A.F.R. Court No. - 10 Case :- WRIT TAX No. - 566 of 2011 Petitioner :- Chander Prakash Jain Respondent :- Commissioner Of Income Tax And Another Counsel for Petitioner :- R.B. Shukla,Dinesh Tiwari Counsel for Respondent :- C.S.C., Income Tax,D.Awasthi. Hon'ble Arun Tandon,J. Hon'ble Dr. Satish Chandra,J. Heard learned counsel for petitioner-assessee and Sri Dhanajay Awashti, learned counsel for respondent-department. On 16th November, 1994, search under Section 132 (1) of Income Tax Act, 1961 (hereinafter referred to as Act, 1961 ) was conducted at residential premises of petitioner, where he along with his mother and brother resided. Again on 22nd November, 1994 search was made at Bank of petitioner. Rs. 2,59,900/- from Saving Bank Account in name of son of petitioner along with certificates of investments/deposits worth Rs. 3,45,997/- were seized under Section 132 (1) (iii) of Act, 1961. order under Section 132 (5) of Act, 1961 was passed by Assessing Officer for retaining aforesaid assets on 13th March, 1995. appeal under Section 132 (11) of Act, 1961 was filed by petitioner before Commissioner of Income Tax on 3rd April, 1995, which remained pending. Assessing Officer made order dated 28th September, 1995 adjusting cash of Rs. 67, 038/- against existing demands against petitioner. He further adjusted Rs. 1,92, 862/- against existing demands against late Pushpa Devi (mother of petitioner). This exhausted entire cash of Rs. 2,59,900/- seized from Bank account of son of petitioner. In response to notice under Section 148 of Act return of income for assessment year 1992-1993 showing income of Rs. 3,466/- was filed. Assessment order was made under Section 143/148 of Act, 1961 for assessment year 199201993, income was determined at Rs. 84,959/- under head of other source and Rs. 16,50,000/- under head of long term capital gains. No credit was given to petitioner-assessee by Assessing Officer for money retained under Section 132 (5) of Act, 1961. Not being satisfied with assessment order, assessee filed appeal before Commissioner of Income Tax (Appeals), which was allowed vide order dated 29th November, 1999 demand was reduced to nill. department being not satisfied with order of appellate authority, filed appeal before Income-Tax Appellate Tribunal. appeal was partly allowed by Tribunal. Not being satisfied with order of Tribunal, assessee petitioner filed appeal under Section 260A of Act, 1961 before High Court being Income Tax Appeal No. 92 of 2005, which remained pending. In pursuance to order of Tribunal, fresh order was passed by Assessing Officer on 19th April, 2005. Petitioner filed appeal before Commissioner of Income Tax (Appeals) on 31st August, 2005, which was partly allowed by Commissioner of Income Tax vide order dated 17th January, 2006. On 18th January, 2007, intimation was given by assessing officer about seized money. Petitioner also made application before Commissioner of Income Tax, Meerut for release of seized assets, with further prayer that assessee be compensated for pecuniary loss due to non renewal of deposits and interest under Section 132B (4) of Act, 1961. Since said application was not considered, petitioner filed Writ Petition No. 1306 of 2010. High Court disposed of writ petition with direction upon Assessing Officer to decide application of petitioner within time permitted by High Court. Assessing Officer under order dated 8th February, 2011 has refused to release seized assets and to make payment of interest as claimed by petitioner. Not being satisfied petitioner has approached this Court by means of present writ petition. High Court after hearing learned counsel for parties vide its order dated 23rd May, 2013 recorded that prima facie there is no justification for seized assets being not released. Learned counsel for department prayed for time for matter being looked into. High Court on 29th May, 2013 recorded statement of Senior Counsel for department that department is ready to release seized assets and petitioner may collect same. It is not in dispute that assets have been released in favour of petitioner, which include Kishan Viaksh Patras, Indira Vikash Patras, Bank Fixed Deposit Receipts, etc., these could not be encashed by petitioner as maturity date had expired and value has been transferred to unclaimed account. However, there is no issue in that regard before this Court as counsel for department has assured assessee-petitioner to do needful so that certificates are encashed. dispute between parties before us is confined to payment of interest on money seized on 22nd November, 1994 till date tax liability of capital gains of Rs. 3,71,653 for assessment year 1992-1993 was adjusted and on remaining assets till date they were released. In alternative, assessee has prayed for direction for renewal of seized investments in shape of Indira Vikash Patras and Kishan Vikash Patras and deposits with banks with interest on prevailing rates on maturity value till assets were appropriated/released. It is case of petitioner that during all these period, money would have augmented by nearly four times of its value in year 1994. Learned counsel for petitioner submitted that as per order of retention under Section 132 (5) of Act, 1961, seized assets comprise of cash, Indira Vikash Patras, Kishan Vikash Patras etc. of Rs. 3,45,997/-, they were retained against liability of Rs. 5,81,133/- treating them as undisclosed income and Rs. 67,038/- against existing liability. This order of retention was summary order subject to regular assessment under Section 143 (3) of Act, 1961, which was made on 29th March, 1996. retention of seized assets beyond date of regular assessment is without authority of law. It is stated that in regular assessment, for year 1992- 1993, no addition was made with reference to seized assets, therefore, liability as mentioned in summary order dated 13th March, 1995 with reference to seized assets ceased. Such assets were liable to be released under Section 132B (3) of Act, 1961. Revenue has retained assets for more than 19 years without authority of law, therefore, assessee must be compensated for loss of interest. In alternative, it is submitted that Revenue could have appropriated seized amount in April, 1996 against demand notice dated 29th March, 1996, no interest under Section 220 (2) of Act, 1961 could have been levied. Revenue is liable to pay statutory interest under Sections 132B (4) and 244A of Act, 1961. He explained that Revenue cannot indirectly keep money on plea that there will be demand and therefore, money should be allowed to be kept with Revenue. It is further explained that due to failure of Revenue either to release seized assets retained without authority of law/ failure to get Indira Vikash Patras, Kishan Vikash Patras etc. renewed on date of maturity in year 1999, petitioner suffered pecuniary loss. Petitioner-assessee has also enclosed Chart depicting loss, which has been caused to him and it is claimed that total loss is Rs. 17,50,000/0. It is also stated that interest on Rs. 1,49,183/- was wrongly charged under Section 220 (2) of Act, 1961, which be deleted and amount so recovered to be returned with interest under Section 244A (1) of Act, 1961. Learned counsel for petitioner has relied upon judgment of Apex Court in case of Chironjilal Sharma Huf vs. Union of India & Others reported in (2014) 360 ITR 237 (SC) for proposition that liability as per order of Assessing Officer on being overturned by Tribunal, assessee becomes entitled to interest for pre-assessment period also under Section 132B (4) (b) of Act, 1961. It has also been explained that interest on post assessment period is to be dealt with in accordance with Section 240 or Section 244A of Act, 1961. Reference has also been made to judgment of Apex Court in case of Sandvik Asia Ltd. vs. Commissioner of Income Tax, Pune & Others reported in (2006) 2 SCC 508, wherein it has been held that if person can be taxed in accordance with law and hence where excess amount is collected or any amounts are withheld wrongfully, revenue must compensate assessee. (Reference paragraph-30 of judgment). In paragraph nos. 31 and 41 of said judgment, it has been explained that any amount becoming due to assessee under Section 240 of Act, 1961 would encompass interest also. Sri Dhanajay Awashthi, learned counsel for respondent- department disputes correctness of stand so taken on behalf of assessee. It is submitted that no interest is payable to assessee-petitioner in respect of assets not sold or converted into money and that cash which was seized from petitioner assessee, has already been utilized, hence there is no cash, is lying unutilized in P.D. Account. It is further stated that interest has been charged strictly as per order of Commissioner of Income Tax, therefore, relief for refund of same, as prayed, appears to be misconceived. We have considered submissions made by learned counsel for parties and have gone through records of present writ petition. From records of present writ petition it is apparent that seizure was affected in year 1994. assessment was completed in year 1996, cash seized was adjusted against tax demands. Fixed Deposit Receipts, Kishan Vikash Patras and Indira Viaksh Patras, which were seized, were not encashed nor were renewed. It is for this reason only that Assistant Commissioner of Income Tax, Meerut vide order dated 8th February, 2011 while disposing of application of petitioner dated 28th September, 2010 has refused payment of interest on aforesaid assets. It has been recorded that no interest is payable in relation to assets other than money, which are not sold by income-tax officer. According to Assistant Commissioner of Income Tax, interest is payable only in respect of seized assets, which are converted into money. No interest is payable in respect of assets, which remain unsold. In support of her conclusion, officer has referred to sub- Section 4 of Section 132B of Act, 1961. It is not in dispute that seized Kishan Vikash Patras, Indira Vikash Patras etc. continued to be retained by Income Tax Department even after conclusion of assessment proceedings in year 1996 unreasonably for long duration. There is absolutely no explanation from side of department as to why these Kishan Vikash Patras, Indira Vikash Patras, Fixed Deposit Receipts etc. were retained by department even after assessment proceedings had been completed in year 1996 and as to why same were not encashed/renewed. In our opinion, money invested in shape of Kishan Vikash Patras, Indira Vikash Patras etc. continued to be money available with Union of India all along. This money was utilized by Government for its own purposes, which fact can be inferred as Vikash Patras etc. were never encashed. issue before us is as to whether assessee is to suffer in respect of loss of interest on these Kishan Vikash Patras, Indira Vikash Patras etc. for inaction on part of department especially when money lay with Union of India itself. We are of considered opinion that facts of this case are more or less identical to those in case of Chironjilal Sharma Huf and Sandvik Asia Ltd. (supras). We may also refer to recent judgment of Apex Court in case of Commissioner of Income-Tax vs. Gujarat Fluoro Chemical reported in (2013) 358 ITR 291 (SC), wherein while noticing law laid down in case of Sandvik Asia Ltd. (Supra), it has been noticed that in case of Sandvik Asia Ltd. Apex Court had come to conclusion that where there had been inordinate delay on part of Revenue in returning money, which will include statutory interest, Revenue must compensate and same is not payment of interest on interest. (Reference paragraph 7 of judgment). In case of South Eastern Coalfields Ltd. vs. State of M.P. & Others reported in (2003) 8 SCC 648, in paragraph 29 Apex Court has laid down as follows: 29. Once doctrine of restitution is attracted, interest is often normal relief given in restitution. Such interest is not controlled by provisions of Interest Act of 1839 or 1978. It is not in dispute that because of non return of Kishan Vikash Patras, Indira Vikash Patras, Fixed Deposit Receipts etc., and because of non-extension of period of their validity by Revenue for all said period these investments lay in controll of Revenue, although illegally, in our opinion, after assessment proceedings had been finalized. same should have been returned to assessee after assessment. This act of department has resulted in uncalled for loss of interest on aforesaid investment, in shape of Kishan Vikash Patras, Indira Vikash Patras, Fixed Deposit Receipts etc. loss has been caused to assessee for no fault of his. Kishan Vikash Patras, Indira Vikash Patras, Fixed Deposit Receipts etc. would have earned interest in normal course of things, if they had been revalidated/encashed as per option available to Revenue. If Revenue has failed to do so and money all along continued to remain deposited with Union of India and available for utilization by Revenue itself, we see absolutely no reason in facts of case as to why Revenue may not be asked to pay interest on aforesaid Kishan Vikash Patras, Indira Vikash Patras, Fixed Deposit Receipts etc., at part with interest, which money would have earned, on face value of aforesaid documents, under provisions of Income Tax Act had investments revalidated/renewed been encashed by department. In facts and circumstances of case on record we are satisfied that order of Assistant Commissioner of Income Tax dated 8th February, 2011, insofar as it refuses to make payment of interest under Section 132B of Act, 1961 on ground that Kishan Vikash Patras, Indira Vikash Patras, Fixed Deposit Receipts etc. had not been encashed, cannot be legally sustained and is hereby quashed. Assistant Commissioner of Income Tax is directed to redetermine interest as per representation dated 28th September, 2010, in light of what has been recorded above and in light of judgment of Apex Court in cases of Chironjilal Sharma Huf, Sandvik Asia Ltd. (Supras) strictly in accordance with provisions of Income Tax Act. Let necessary calculation of interest be done within four weeks from date certified copy of this order is filed before him. All consequential action shall be taken immediately thereafter. So far as refund of interest paid under Section 220 of Act, 1961 is concerned, we find no reason to interfere with order of Commissioner of Income Tax dated 21st May, 2007. present writ petition is partly allowed subject to observations made above. (Dr. Satish Chandra, J.) (Arun Tandon, J.) Order Date :- 28.04.2015 Sushil/ Court No. - 10 Case :- WRIT TAX No. - 566 of 2011 Petitioner :- Chander Prakash Jain Respondent :- Commissioner Of Income Tax And Another Counsel for Petitioner :- R.B. Shukla,Dinesh Tiwari Counsel for Respondent :- C.S.C., Income Tax,D.Awasthi. Hon'ble Arun Tandon,J. Hon'ble Dr. Satish Chandra,J. Allowed. For order, see order of date passed on separate sheets. (Dr. Satish Chandra, J.) (Arun Tandon, J.) Order Date :- 28.04.2015 Sushil/ Chander Prakash Jain v. Commissioner Of Income-tax And Another