Rajendra Prasad Mittal V. Union of India and Chief Commissioner of Income Tax Rajasthan, Jaipur and Commissioner of Income Tax (Central), Jaipur and Assistant Commissioner of Income Tax, Central Circle, Alwar

CW/3414/2011

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The case involves Rajendra Prasad Mittal, the petitioner, who sought interest on a tax refund following a block assessment by the Income Tax Department, which was contested and led to various appeals. The Income Tax Appellate Tribunal had earlier ruled in favor of the petitioner regarding the refund, but the interest on this refund was not addressed, prompting the filing of this writ petition. The respondents, including the Union of India and various tax commissioners, did not contest the entitlement to interest but failed to provide a decision on the matter for an extended period. The court found that the respondents had not fulfilled their obligation to process the interest claim under Section 132B(4) of the Income Tax Act, 1961, and thus directed them to calculate and pay the due interest.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 694037 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 10-09-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ANUROOP SINGHI; ADITYA KHANDELWAL
• Assessee Lawyers: ANANT KASLIWAL; RAGHAV KRISHNATRI
• Keywords: Block assessment; Income Tax; Interest on Refund; Refund; Departmental Remedy
• Section: 244A(1A); 132B(4)

Judgement Text

"[2024:RJ-JP:38515-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D. B. Civil Writ Petition No. 3414/2011 Rajendra Prasad Mittal S/o Shri Kishori Lal Ji Mittal, aged app. 55 years, C/o N.G. Jewellers, Sarrafa Bazar, Main Market, Nagar, Bharatpur, Rajasthan ----Petitioner Versus 1. Union of India, through Chief Commissioner of Income Tax Rajasthan, Jaipur 2. Commissioner of Income Tax (Central), Jaipur 3. Assistant Commissioner of Income Tax, Central Circle, Alwar ----Respondents For Petitioner : Mr. Anant Kasliwal Senior Advocate assisted by Mr. Raghav Krishnatri Advocate For Respondents : Mr. Anuroop Singhi Advocate with Mr. Aditya Khandelwal Advocate HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE ASHUTOSH KUMAR Order 10/09/2024 1. Heard. 2. After a long drawn litigation and availing departmental remedy which culminated in passing of a common order dated 18.12.2009 by the Income Tax Appellate Tribunal, Jaipur Bench ‘A’, Jaipur (hereinafter referred to as ‘the Tribunal’), the petitioner had to file this writ petition in the year 2011 for another relief of consequential nature, i.e., claim of interest on the amount of refund. 3. At the outset, there is no dispute between the parties that during pendency of the petition so far as refund aspect is [2024:RJ-JP:38515-DB] (2 of 5) [CW-3414/2011] concerned, the same has already been returned to the petitioner- assessee. 4. The only issue which remains to be decided is with regard to the right of the petitioner to interest. 5. The records speak that block assessment orders were passed in respect of the petitioner-assessee resulting in various additions and deletions. The matter went up to the Tribunal. The revenue’s appeals against deletion were dismissed whereas appeals of the petitioner-assessee against addition were allowed. 6. The order passed by the Tribunal resulted in claim of refund. It is also not in dispute that the petitioner-assessee has been granted refund also after passing of the order by the Tribunal. What remains to be decided in this petition is the interest on the amount of refund which the petitioner-assessee claims. 7. Mr. Anant Kasliwal, learned Senior Advocate appearing on behalf of the petitioner would submit that in case where refund is ordered, provisions contained in Section 132B(4) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) speak in favour of the petitioner-assessee and sub-section (4) of Section 132B of the Act provides for payment of simple interest in the manner and to the extent provided therein. Despite various representations made, the respondent-authorities did not pass any order on the aspect of interest on refund to which the petitioner is entitled under the law. For this purpose alone, this petition has been filed by the petitioner. Prayer has been made that the respondents be directed to examine the claim of interest in accordance with the provisions contained in Section 132B(4) of the Act as was [2024:RJ-JP:38515-DB] (3 of 5) [CW-3414/2011] applicable in respect of claim of refund pertaining to different assessment years which were subject matter of consideration in the block assessment proceedings. 8. Learned Senior Advocate would further submit that as the case of the petitioner is that the interest payable to him under Section 132B(4) of the Act was illegally retained and not released, the petitioner is also entitled to interest on interest as per the provisions contained in Section 244A(1A) of the Act. 9. Learned counsel for the respondents would submit that though the return has not been filed in the present case, petitioner’s claim for interest under Section 132B and Section 244A(1A) of the Act is required to be examined in accordance with law. 10. In the present case, no return has been filed by the respondents though this petition has remained pending since 2011. We fail to understand what prevented the respondents- authorities in deciding petitioner’s claim for interest despite repeated representations and for the said relief, the petitioner had to again approach this Court even though the Tribunal passed various orders both in the appeals filed by the revenue as well as the appeals filed by the petitioner-assessee. 11. Section 132B(4) of the Act as it stood on the day, order was passed by the Tribunal, reads thus: “132B. (1) xxxxxxxx (2) xxxxxxx (3) xxxxxxx (4)(a) The Central Government shall pay simple interest at the rate of [one-half per cent for every [2024:RJ-JP:38515-DB] (4 of 5) [CW-3414/2011] month or part of a month] on the amount by which the aggregate amount of money seized under Section 132 or requisitioned under Section 132A, as reduced by the amount of money, if any, released under the first proviso to clause(i) of sub-section (1), and of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause(i) of sub-section (1), exceeds the aggregate of the amount required to meet the liabilities referred to in clause (i) of sub-section (1) of this section. (b) Such interest shall run from the date immediately following the expiry of the period of one hundred and twenty days from the date on which the last of the authorisations for search under Section 132 or requisition under Section 132A was executed to the date of completion of the assessment [or reassessment of recomputation].” 12. The above provision clearly shows that the petitioner- assessee is entitled to interest in the manner and to the extent provided therein. Therefore, the respondents were under an obligation to examine petitioner’s representations and make payment of interest on the refund amount as is allowable under the law. However, no orders were passed, either allowing or rejecting such a claim, much less, giving any reason therefor. 13. Learned Senior Advocate also submits that where there is delay in payment of interest payable under the law, Section 244A(1A) of the Act also eventually speaks to grant interest on interest. Relevant provision is also quoted hereinbelow as under: “244A. (1) xxxxxxxxxxx [(1A) In a case where a refund arises as a result of giving effect to an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264, wholly or partly, otherwise than by making a fresh assessment or reassessment, the assessee shall be entitled to receive, in addition to the interest payable under sub-section (1), an additional interest on such amount of refund calculated at the rate of three per cent per annum, for the period beginning from the date following the date of expiry of the time allowed under sub-section (5) of section 153 to the date on which the refund is granted:] [2024:RJ-JP:38515-DB] (5 of 5) [CW-3414/2011] [Provided that where proceedings for assessment or reassessment are pending in respect of an assessee, in computing the period for determining the additional interest payable to such assessee under this sub- section, the period beginning from the date on which such refund is withheld by the Assessing Officer in accordance with and subject to provisions of sub- section (2) of section 245 and ending [with the date up to which such refund is withheld], shall be excluded].” 14. Learned counsel for the respondents seriously disputes the above submission by submitting that Section 244A(1A) of the Act may not allow interest on interest, but interest on the amount of refund. 15. We are of the view that the provisions, which have been referred to above, make out a case for consideration of claim for interest on refund which the respondent-department should have considered in the light of the provisions contained therein. Neither the representations made by the petitioner were decided, nor reply was filed in this petition even after lapse of 13 years. Thus, we are inclined to direct the respondents to calculate the interest payable on refund amount as is payable under the provisions referred to hereinabove by appropriate computation and whatever amount is found due and payable towards interest be paid to the petitioner within an outer limit of three months from the date of receipt of copy of this order. 16. Writ petition is, accordingly, allowed. (ASHUTOSH KUMAR),J (MANINDRA MOHAN SHRIVASTAVA),CJ Manoj Narwani-Aarzoo /52 "