RAM KISHAN GUPTA Vs. UNION OF INDIA

JUDGEMENT

(1.) BY way of this petition, a writ of mandamus is sought against the respondents for release of the amount of interest on a sum of Rs.5,35,000/ -which was seized from the business premises of the petitioner during the search and seizure operation conducted on 17.03.1985. The said amount of Rs.5,35,000/ - was returned to the petitioner on 17.02.2000 but without any interest thereon. The petitioner furnished an application to the Central Board of Direct Taxes on 11.11.05 wherein he claimed that interest on the said amount of Rs.5,35,000/ - should be allowed to the petitioner. The prayer made in the said application was that interest be directed to be paid to the petitioner under Section 240 or Section 244A of the Income Tax Act, 1961 (hereinafter referred to as the said Act).

(2.) THE said application was rejected by a communication dated23.06.2006 by simply stating that the petitioner was not eligible to claim any interest for the assessment year 1986 -87 under Section 240, 244A or under Section 132B(4) as per the report of the Commissioner of Income Tax, New Delhi. The said communication also stated that the grievance was treated as having been closed. Thereupon, the petitioner filed the present writ petition seeking a mandamus as indicated above as also the setting aside of the communication dated 23.06.2006.

(3.) THEREAFTER , regular assessment in respect of the assessment year 1986 -87 was completed and the assessment order was framed on 30.3.1989 whereby a demand was raised of Rs.5,92,980/ - including interest. The cash amount which was available with the department was Rs.5,35,000/ -. It is obvious that the demand as per the assessment order exceeded the cash available with the department.