SITARAM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioner, an assessee, has filed this petition under Arts. 226 and 227 of the Constitution of India, seeking direction to respondent No. 1 CIT and respondent No. 2-Asstt. CIT, to pay interest to him under s. 132B(4) of the IT Act, with further prayer to pay interest under the Interest Act from 16th March, 1995 onwards at 18 per cent per annum. However, during arguments learned counsel for the petitioner has claimed interest under s. 132B(4) and s. 244A of the IT Act only. Facts are not much in dispute. Search under s. 132 of the IT Act, 1961, was conducted at business and residential premises of the deceased on 3rd Sept., 1992. On 4th Sept., 1992, during said operation, cash of Rs. 1,68,298 was found and out of it, an amount of Rs. 1,60,000 was seized by the respondents. On 24th Dec, 1992, order under s. 132(5) determining provisionally total tax liability at Rs. 3,34,492 was passed and seized cash was appropriated till orders under s. 143(3) of the IT Act on regular assessment were passed. On 16th March, 1995 order of regular assessment for asst. yr. 1993-94 came to be passed and total income was assessed at Rs. 2,69,200. Net tax demanded by IT Department was Rs. 34,572. The petitioner paid that tax in cash in May, 1995.

(2.) The petitioner claims that an amount of Rs. 1,60,000 seized from him was neither appropriated nor treated as advance tax. He had filed an appeal against determination of tax liability and that Appeal No. CIT(A)/69/1995-96 was allowed by the CIT(A) on 4th July, 1996. The tax liability of the petitioner was brought down to Rs. 1,654. On 19th Aug., 1996 the petitioner applied and sought refund of Rs. 1,60,000 along with interest. On 2nd Dec, 1996 an amount of Rs. 1,60,000 only was returned to him by cheque and no interest whatsoever was granted.

(3.) In this background, Shri Bhattad, learned counsel for the petitioner has invited our attention to provisions of ss. 132(5), 132B and s. 244A to contend that interest, as envisaged therein, ought to have been granted and its denial is contrary to settled law. The judgment of Hon'ble apex Court in the case of Sandvik Asia Ltd. vs. CIT, 2006 AIR(SC) 1223 is also relied upon by him to urge that even in the absence of express statutory provision, the Hon'ble apex Court has found interest payable in this situation.