ANILKUMAR BHAGWANDAS Vs. P K TIWARI

JUDGEMENT

(1.) The brief facts which led to filing of this petition are that Rs.1,45,680 were seized from petitioners on 7.10.1986 in proceedings under Section 132 of the Income Tax Act, 1961. On 3.2.1987, an order was made under Section 132(5) of the Act estimating undisclosed income in a summary manner and calculating the amount of tax on the income so estimated in accordance with the provisions of the Act and about other determination envisaged under said provision made an order for retaining in custody Rs.1,41,800 out of said cash as was in his opinion sufficient to satisfy aggregate of amounts referred to in various subclauses of subsection (5) of Section 132. Regular assessment for the assessment year 1987-88, relevant to the previous year during which the search was conducted and money was seized from the petitioner was made on 19.6.1989. As a result of which, entire amount retained by the respondents in proceedings under Section 132 became liable to be returned to the petitioner. The amount was not returned notwithstanding as a result of regular assessment the amount become so payable to the assessee in terms of Section 132B(3) of the Act. The assessee ultimately made a demand for refund of the amount which became payable to it by the respondents as a result of regular assessments dated 19.6.1989, vide letters dated 16.12.1991 and 18.12.1991. As sum of Rs.1,41,80 was finally paid to the assessee by way of refund voucher on 17.11.1995 and interest on the said amount between 3.8.1987, that is to say, with effect from the date of expiry of six months from the date of order under Section 132(5) to 19.6.1989, the date of regular assessment under Section 143(3) of the Act, was computed and ordered to be refunded. The interest was worked out at the rate provided under the aforesaid provision. The said amount has also been paid by the respondents to the assessee.

(2.) Aggrieved with the calculation of interest payable on the amount which became due to the assessee on the making of assessment order dated 19.6.1989, assessee preferred a revision before the Commissioner of Income Tax, Ahmedabad making a grievance that assessee is entitled to interest until the date of payment of amount which became due to be paid to the assessee as a result of assessment order dated 19.6.1989 in terms of Section 243 of the Income Tax Act, 1961. That revision has been rejected by the Commissioner on 18.2.1997, impugned order Annexure A to the petition, by holding that though the petitioner was entitled to claim interest under Section 243 within the ratio of decision of Gujarat High Court in Anilkumar Gajjar v. CIT., but as with effect from 1.4.1989 the provisions of Section 243 of the Act has been made inapplicable, ratio of the judgment of Hon'ble Gujarat High Court is not applicable to the case of the assessee. The order also laments on the inordinate delay of five years caused in grant of refund of cash seized, even after assessee filed petition before the assessing officer and for which he has to look into administrative level. He felt his hands are tied with the position of law.

(3.) It is in the aforesaid circumstances, this petition has been filed, seeking direction to quash the order of CIT dated 18.2.1997, and a mandamus to the respondents to grant interest under Section 240 read with section 244 in respect of period of payment of cash detained under Section 132(5) of the Act. There is no issue between the parties that no other remedy is available to the assessee against the order of CIT made under Section 264.