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TMI Blog2022 (6) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment order under the said provision and not upto the date of payment - whether this Court can award interest or compensation having found delay on the part of the revenue in releasing the cash amount seized by the revenue from the petitioners while carrying out the assessment, though delay was attributed on the part of the respondents and not on the petitioners from the date of assessment order till payment or not? - HELD THAT:- Though in this case the petitioners have prayed for interest at the rate of 12% p.a. from 01.11.2017 to 01.12.2020 on cash amount of Rs.9,35,000/- and compensatory interest at the same rate from 24.12.2019 till 01.12.2020 on the amount of cash released of Rs.14,36,000/-, the petitioners have restricted their prayer for compensatory interest at the rate of 6% p.a. on these two amounts and also on Rs.24,29,000/-. In our view, though Delhi High court in AJAY GUPTA[ 2007 (4) TMI 42 - HIGH COURT, NEW DELHI] had awarded interest at the rate of 9% p.a. towards compensation/damages for the delayed period, since the petitioners in this case have restricted their claim for compensation/damages at the rate of 6% p.a. for the delayed period, we are inclined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said cash and jewellery. The petitioners applied for release of the assets on 29.11.2017 as per proviso to Section 132(B)(1)(i) of the Act, 1961. 5. On 23.12.2019 and 26.12.2019, the respondents accepted the return of income filed by the petitioners for passing an assessment order under Section 143(3) of the Act, 1961 in the case of petitioner nos.1 to 4 and 10 and assessed the income at Rs.nil. 6. Between 07.02.2020 to 03.09.2020 the petitioners requested respondents to release the seized cash of Rs.48,00,000/-. On 17.11.2021, the respondent no.3 partly released the cash of Rs.23,71,000/- without there being payment of any statutory interest as per Section 132(B)(4)(a b) of the Act, 1961. It is the case of the petitioners that, remaining amount of Rs.24,29,000/- was retained by respondents unlawfully. 7. On 26.02.2021, the petitioners filed this petition inter alia praying for various reliefs. During the pendency of this petition, respondents partly released cash amount of Rs.23,71,000/-. 8. Mr. Chandak, learned counsel for petitioners invited our attention to the various documents annexed to the petition and also the assessment order referred to above and would sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of interest under Section 132-B (4) had been submitted to the Chief Commissioner of Income Tax, Pune vide letter dated 26.02.2021. On receipt of the approval, the interest on the cash released would be paid to the assessee. He submits that, the respondents cannot withhold the amount payable to the petitioners for alleged future liability. The liability must be existing as per Section 132-B (1) (i) of the Act, 1961. 13. Learned counsel relied upon Section 132-B (3) and would submit that, under the said provision any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of sub- Section (1) are discharged shall be forthwith made over or paid to the persons from whose custody the assets were seized. In this case, neither there was any existing liability nor any liability had been fixed after passing the assessment order dated 23.12.2019 and 26.12.2019. The respondents thus could not have withheld any amount payable to the petitioners. He submits that, the respondents have accepted the claim of the petitioners regarding payment of interest, but has not released the payment. 14. The learned counsel for the petitioners invited our attention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asia Ltd. Vs. Commissioner of Income Tax-1, Pune (supra) and would submit that, Hon ble Supreme Court in the said judgment has clearly held that, person should only be taxed in accordance with law and hence where excess amounts of tax are collected from an assessee or any amounts are wrongfully withheld from an assessee without authority of law the revenue must compensate the assessee. 19. Mr. Sharma, learned counsel for the respondent nos.2 to 10 on the other hand submits that, as per the provisions of Section 132-B (1) (i) the cash can be retained till the completion of the assessment, penalty proceeding and Appellate proceedings and till the full discharge of the liability of the assessee. In this Case, on the basis of the outcome of the assessment order, the Pr. CIT, Nagpur vide order dated 17.011.2020 released the seized cash of Rs.23,71,000/-. However, in respect of the M/s. Harshit S. Kabra (HUF) and M/s. Lashika Motors, the proceedings were initiated under Section 147 of the Act, 1961 for reopening of the assessment. He submits that, proposal for payment of interest under Section 132- B (4) had been submitted to the Chief Commissioner of Income Tax, Pune vide letter date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he part of the revenue in releasing the amount seized after the date of assessment order. In this case the interest is paid upto the date of assessment order by the respondents to the petitioners. 24. So far as judgment of the Hon ble Supreme Court of India in a case of Sandvik Asia Ltd. Vs. Commissioner of Income Tax-1, Pune (supra) relied upon by the petitioners is concerned, it is clear that the Hon ble Supreme Court has not considered Section 132-B (4) of the Act, 1961 in the said judgment, but had considered Section 214, 240, 244, 244(1) and Section 244(1A) of the Act, 1961. The petitioners had not challenged the vires of the provisions of Section 132-B(4) in this petition and thus no additional interest or compensation can be awarded by this Court in favour of the petitioners. 25. Mr. Chandak, learned counsel for the petitioners in rejoinder submits that, interest under Section 240 and 244-A is provided if assessment orders passed is in case of regular assessment whereas under Section 132-B, the interest would start after expiry of 120 days from the date of search and seizure upto the date of assessment order. 26. It is submitted by the learned counsel for the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, 1961 on 17.11.2021. The period of 120 days come to an end on 02.03.2018. The claim for payment of interest or compensation from the date of assessment order till payment is opposed by the revenue on the ground that under the said Section 132-B(4)(a b), interest is provided only upto the date of assessment order and not beyond the said period. 30. The learned counsel for the revenue could not dispute that, there was delay in releasing the cash amount of the petitioners seized by the respondents and such payment was not made within a period of 120 days from the date on which the last authorization for search under Section 132 was executed to the date of completion of assessment under Section 153-A or under Chapter XIV-B of the Act, 1961. 31. The question that arises for consideration of this Court is whether this Court can award interest or compensation having found delay on the part of the revenue in releasing the cash amount seized by the revenue from the petitioners while carrying out the assessment, though delay was attributed on the part of the respondents and not on the petitioners from the date of assessment order till payment or not. 32. There is no doubt th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court of India in a case of Sandvik Asia Ltd. Vs. Commissioner of Income Tax-1, Pune (supra) would apply to the facts of this case. The respondents were solely responsible for the gross delay in not releasing the cash amount of the petitioners under Section 132-B (4) (b) of the Act, 1961 and thus cannot refuse the payment of compensation to the petitioners for wrongfully withholding the said amount from the date of assessment order till payment. 37. Delhi High Court in a case of Ajay Gupta Vs. Commissioner of Income Tax (supra) has held that, since the payment was made after the outer limit of the period prescribed under section 132B(4)(b) of the Act, 1961, the Petitioner would be entitled to compensation on account of delay for the subsequent period. The Delhi High Court followed the judgment of the Hon ble Supreme Court in a case of Sandvik Asia Ltd. Vs. Commissioner of Income Tax-1, Pune (supra) and directed the revenue to pay compensation/damages to the assessee on the balance sum for the subsequent period at the rate of 9% p.a. In our view, the principles laid down by the Delhi High Court in a case of Ajay Gupta Vs. Commissioner of Income Tax (supra) after advertin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue to pay interest or compensation upto the date of payment. The question for consideration of this Court raised by the petitioners is whether the respondents can refuse to compensate the petitioners for wrongfully withholding the cash amount of the petitioners though by the assessment order the liabilities of the petitioners were declared as nil beyond the date of assessment order. The judgment of the Hon ble Supreme Court in a case of Commissioner of Customs (Import) Vs. M/s. Dilip Kumar and Company and Ors. (supra) thus would not advance the case of the revenue. 41. In so far as judgment of the Hon ble Supreme Court in a case of Ramnath and Co. Vs. Commissioner of Income Tax (supra) relied upon by the learned counsel for the revenue is concerned, the Hon ble Supreme Court in the said judgment while dealing with the Section 80-O of the Act, 1961 has held that, taxing statutes are subject to the rule of strict interpretation. There is no dispute about the preposition of law laid down by the Hon ble Supreme Court in the said judgment. We do not propose to expand the scope of Section 132- B(4) of the Act, 1961 in this matter. The Hon ble Supreme Court and the Delhi High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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