REPORTABLE IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 10601 OF 2013 [ARISING OUT OF S.L.P. (C) NO. 20381 OF 2012] CHIRONJILAL SHARMA HUF ... APPELLANT(s) Versus UNION OF INDIA AND OTHERS ... RESPONDENT(s) JUDGMENT R.M. LODHA,J. Leave granted. 2. brief facts necessary for consideration of issue raised in appeal are these: In search conducted in house of appellant on 31.1.1990, cash amount of Rs. 2,35,000/- was recovered. On 31.5.1990, order under Section 132(5) of Income Tax Act, 1961 (for short Act ) came to be passed. Assessing Officer calculated tax liability and cash seized in search from appellant's house was appropriated. However, order of Assessing Page 1 2 Officer was finally set-aside by Income Tax Appellate Tribunal (for short Tribunal ) on 20.2.2004. revenue accepted order of Tribunal. Consequently, appellant has been refunded amount of Rs. 2,35,000/- along with interest from 4.3.1994 (date of last of regular assessments by Assessing Officer) until date of refund. 3. appellant (assessee) claims that he is entitled to interest under Section 132B(4)(b) of Act which was holding field at relevant time for period from expiry of period of six month's from date of order under Section 132(5) to date of regular assessment order. In other words, order under Section 132(5) of Act having been passed on 31.5.1990, six months expired on 30.11.1990 and last of regular assessments was done on 4.3.1994, assessee claims interest under Section 132B(4)(b) of Act from 1.12.1990 to 4.3.1994. 4. Section 132 of Act deals with search and Page 2 3 seizure. Sub-section (5) thereof, which is relevant for purposes of present appeal, reads as under: (5): Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as assets) is seized under sub-section (1) or sub-section (1A), as result of search initiated or requisition made before Ist day of July, 1995, Income-tax Officer, after affording reasonable opportunity to person concerned of being heard and making such enquiry as may be prescribed, shall, within one hundred and twenty days of seizure, make order, with previous approval of Joint Commissioner)- (i) estimating undisclosed income (including income from undisclosed property) in summary manner to best of his judgment on basis of such materials as are available with him; (ii) calculating amount of tax on income so estimated in accordance with provisions of Income Income- Tax Act, 1922 (11 of 1922), or this Act; (iia) determining amount of interest payable and amount of penalty imposable in accordance with provisions of Indian Income-Tax Act, 1922 (11 of 1922), or this Act, as if order had been order of regular assessment; (iii) specifying amount that will be required to satisfy any existing liability under this Act and any one or more of Acts specified in clause (a) of sub-section (1) of section 230A in respect of which such person is in default or is deemed to be in default, Page 3 4 and retain in his custody such assets/or part thereof as are in his opinion sufficient to satisfy aggregate of amounts referred to in clauses (ii), (iia) and (iii) and forthwith release remaining portion, if any, of assets to person from whose custody they were seized: Provided that if, after taking into account materials available with him, Income Tax Officer is of view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate tax on such income or part, as case may be, as if such income or part were total amount chargeable to tax at rates in force in financial year in which assets were seized and may also determine interest or penalty, if any, payable or imposable accordingly: Provided further that where person has paid or made satisfactory arrangements for payment of all amounts referred to in clauses (ii), (iia) and (iii) or any part thereof, Income-Tax Officer may, with previous approval of Chief Commissioner or Commissioner, release assets or such part thereof as he may deem fit in circumstances of case. 5. Section 132B deals with payment of interest on delayed assessment. Omitting unnecessary part, relevant provisions of Section 132B(4)(a) and(b) of Act read as under: 132B: Application of retained assets........ (4)(a) Central Government shall pay simple interest at rate of fifteen per cent per annum on amount by which aggregate of money retained under Section 132 and of proceeds, if any, of assets sold towards discharge of existing liability referred to in clause 3 of sub- section (5) of that section exceeds aggregate of amounts required to meet Page 4 5 liability referred to in clause (i) of sub-- section (1) of this section. (b) Such interest shall run from date immediately following expiry of period of six months from date of order under sub-section 5 of section 132 to date of regular assessment or reassessment referred to in clause (i) of sub-section (1) or, as case may be, to date of last of such assessments or re- assessments. 5. close look at above provisions and, particularly, clause (b) of Section 132B(4) of Act clearly shows that where aggregate of amounts retained under Section 132 of Act exceeds amounts required to meet liability under Section 132B(1)(i), department is liable to pay simple interest at rate of fifteen percent on expiry of six months from date of order under Section 132(5) of Act to date of regular assessment or re-assessment or last of such assessments or reassessments, as case may be. It is true that in regular assessment done by Assessing Officer, tax liability for relevant period was found to be higher and, accordingly, Page 5 6 seized cash under Section 132 of Act was appropriated against assessee's tax liability but fact of matter is that order of Assessing Officer was over-turned by Tribunal finally on 20.2.2004. As matter of fact, interest for post assessment period i.e. from 4.3.1994 until refund on excess amount has already been paid by department to assessee. department denied payment of interest to assessee under Section 132B(4)(b), according to Mr. Arijit Prasad, learned counsel for revenue on ground that refund of excess amount is governed by Section 240 of Act and Section 132B(4)(b) of Act has no application. But, in our view, Section 132B(4)(b) deals with pre-assessment period and there is no conflict between this provision and Section 240 or for that matter 244(A). former deals with pre- assessment period in matters of search and seizure Page 6 7 and later deals with post assessment period as per order in appeal. 7. view of department is not right on plain reading of Section 132B(4)(b) of Act as indicated above. 8. We, accordingly, allow appeal and set- aside impugned order and hold that appellant is entitled to simple interest at rate of fifteen percent per annum under Section 132B(4)(b) of Act from 1.12.1990 to 4.3.1994. 9. revenue shall calculate interest payable to assessee as above and pay same to appellant (assessee) within two months from today. No costs. ........J. (R.M. LODHA) .......J. (MADAN B. LOKUR) ......J. (KURIAN JOSEPH) NEW DELHI; NOVEMBER 26, 2013. Page 7 Chironjilal Sharma HUF v. Union of India and Other