Ram Prasad Gupta V. Union of India through its Chairman, Central Board of Direct Taxes and Chief Commissioner of Income Tax and Commissioner of Income Tax and Additional/Joint Commissioner of Income Tax and Assistant Commissioner of Income Tax and Central Coalfields Ltd.

WPC/317/2014

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The case involves Ram Prasad Gupta, the petitioner, who sought a refund from the Income Tax Department for an amount of Rs.1,64,705, which was part of a seized amount during a search and seizure operation in 1991. The petitioner argued that after settling his tax liabilities, the remaining amount should have been refunded by the Income Tax Department without the need for repeated claims. The Income Tax Department had retained the amount and was unsure about the encashment of the demand draft. The court found that the petitioner was entitled to the refund along with interest and compensation for the delay and harassment faced over the years.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 811689 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 07-12-2015
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax Vs. H.E.G. Ltd., Sandvik Asia Ltd. Vs. Commissioner of Income Tax, 1, Pune, Commissioner of Income Tax, Gujarat Vs. Gujarat Fluro Chemicals
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DEEPAK ROSHAN; AMIT KR DAS
• Assessee Lawyers: BIREN PODDAR; MANOHAR CHOWDHARY; DARSHAN PODDAR; PIYUSH PODDAR; AMRITA SINHA
• Keywords: Compensation; Income Tax Refund; Interest on Refund; Seized amount; Senior citizen
• Section: 244A; 132B; 132(5)

Judgement Text

" IN THE HIGH COURT OF JHARKHAND AT RANCHI W .P .(T) No.317 of 2014 Ram Prasad Gupta, S/o Late Ram Narayan Sao, R/o C/o Omkar Nath, Koila Dukan, Namak Patti, P .O-Garhwa, P .S.-Garhwa, Dist.-Garhwa-822114 … Petitioner Versus 1. Union of India through its Chairman, Central Board of Direct Taxes, North, Block, New Delhi-110001 2. Chief Commissioner of Income Tax, Central Revenue Building, Main Road, Ranchi-834001 3. Commissioner of Income Tax, Central Revenue Building, Main Road, P .O & P .S.-Ranchi-834001 4. Additional/Joint Commissioner of Income Tax, Range-3, Central Revenue Building (Annexe), Main Road, P .O & P .S.-Ranchi-834001 5. Assistant Commissioner of Income Tax, Circle-3, (the Assessing Officer), Central Revenue Building (Annexe), Main Road, P .O & P .S.-Ranchi-834001 6. Central Coalfields Ltd. Through Sr. Finance Officer (Sales) P .O-Charhi, Dist.-Hazaribagh (Jharkhand) .... Respondents --------- CORAM: HON'BLE MR. JUSTICE D. N. PATEL HON'BLE MR. JUSTICE AMITAV K. GUPTA --------- For the Petitioner : Mr. Biren Poddar, Sr. Advocate, Mr. Manohar Chowdhary, Mr. Darshan Poddar, Mr. Piyush Poddar, & Ms. Amrita Sinha For the Respondent Nos.1 to 5 : Mr. Deepak Roshan, Advocate For the Respondent No.6 : Mr. Amit Kr. Das, Advocate --------- 15/Dated: 07 th December, 2015 Per D.N. Patel, J 1. This writ petition has been preferred for getting refund of an amount of Rs.1,64,705/- (Rupees one lakh sixty four thousand seven hundred five only) from the respondent - Income Tax Department, but, as the said amount has not yet been paid, it is prayed by the learned counsel for the petitioner that the said amount may be refunded with interest as per Section 132B of the Income Tax Act as well as Section 244A of the Income - 02 - Tax Act along with certain amount of compensation as per the decision rendered by the Hon'ble Supreme Court reported in (2006) 2 SCC 508. 2. The relief prayed for in this writ petition is as under:- “That in the instant writ application the petitioner prays for issuance of an appropriate writ(s), order(s) direction(s) from this Hon'ble Court for the following reliefs:- a) For a direction upon the Respondent No.5 to refund out of the seized amount of Rs. 1,84,762/-, seized on 21.02.1991 (Annexure-1) and retained vide order under Section 132(5) dated 20.06.1991 (Annexure-2), after adjustment of tax payable by the petitioner for the Assessment year 1990-91 amounting to Rs. 20,257/- on the finally assessed income i.e. to refund a sum of Rs.1,64,705/- to the petitioner out of the seized amount, which the Respondent IT department was duty bound to refund suo- motto, without the petitioner having made any claim for the same. b) For a further direction upon the Respondent No.5 to allow interest under the provisions of Section 132B(4) of the Income Tax Act, 1961 on the seized amount refundable, from the date immediately following the expiry of the period of six months from the date of the order under sub-section (5) of Section 132 (i.e. six months from 20.06.1991, that is from dated 20.12.1991 to the date of last of such assessments or reassessments, that is up to Date 04.10.2004, the date of order of Commissioner of Income Tax (Appeals) (Annexure-4) @15% from 20.12.1991 to 31.05.2002, @ 8% from 01.06.2002 to 07.09.2003 and @ 6% from 08.09.2003 to 04.10.2004 as per provision of the IT Act, amounting to Rs. 2,87,295/- - 03 - c) For a further direction upon the Respondent No.5 for payment of further interest under Section 244A on the amount refundable, after the order of CIT(A) dated 04.10.2004, amounting to Rs. 4,50,057/- (being tax refund of Rs.1,64,705/- + interest u/s 132B(4) amounting to RS.2,85,532/-) from 4.10.2004 to the date of issue of refund, at the rates as per provisions of section 244A of the IT Act, 1961 as has been held by Hon'ble Apex Court in the case Commissioner of Income Tax Vs. H.E.G. Ltd. reported at (2010) 324 ITR 331(SC). d) For a further direction upon the respondent No.5 for payment of compensation and Cost to the Petitioner, a Senior Citizen who is 74 years of age at present and was praying for the refund for his treatment and at present almost unable to move (Admitted by the Respondent No.5 in Annexure -10/1), for sitting tight over the repeated applications and persuasions for refund, mis-guiding the Petitioner and harassment caused to the Petitioner, during last more than 9 years, on the amount refundable to the Petitioner from 4.10.2014 when the refund became due, on the aforesaid amount Rs.4,50,057/- refundable on 4.10.2004 to the date of grant of the refund to the Petitioner, @9% per annum and to issue the refund within one month, failing which the Department shall pay the penal interest/ compensation @15% p.a. for the aforesaid period, as has been held by Hon'ble Apex Court (Division Bench) in the case of Sandvik Asia Ltd. Vs. Commissioner of Income Tax, 1, Pune reported at (2006) 2SCC 508 = 280 ITR 643 (SC) and explained and approved by Hon'ble 3 Judges Bench of Hon'ble Apex Court in recent case of Commissioner of Income Tax, Gujarat Vs. Gujarat Fluro Chemicals decided on 18.09.2013, reported at (2013) 358 ITR 291 (SC). 3. Learned counsel for the petitioner has submitted that initially this petitioner for purchasing coal deposited - 04 - an amount of Rs.25,86,947/- ( Rupees Twenty five lakhs eighty six thousand nine hundred forty seven only) and the coal was already supplied by the respondent - Central Coalfields Ltd. worth Rs.24,02,185/- (Rupees twenty four lakhs two thousand one hundred eighty five only) and the sum of Rs.1,84,762/- (one lakh eighty four thousand seven hundred sixty two only) was retained by the Central Coalfields Ltd., and before the coal of remaining amount is supplied, search and seizure operation was carried out by the Income Tax Department and the demand draft given by this petitioner to the respondent-Central Coalfields Ltd. was encashed by the Income Tax Department through Central Coalfields Ltd. and disclosed income was added and ultimately the said addition was deleted and finally liability was imposed upon this petitioner to the extent of Rs.20,057/- (twenty thousand fifty seven only). Thus out of Rs.1,84,762/- (Rupees one lakh eighty four thousand seven hundred sixty two) only an amount of Rs.20,057/- (twenty thousand fifty seven) should have been retained by the Income Tax Department and the remaining amount of Rs.1,64,705/- (Rupees one lakh sixty four thousand seven hundred five only) ought to have been refunded by the Income Tax Department, but, as the said amount has not been refunded, this petitioner had to move from pillar to post, as stated in this writ petition and, therefore, this amount may be ordered to be refunded with interest under Section 132(B) as well as under Section 244A - 05 - of the Income Tax Act with compensation as per decision rendered by the Hon'ble Supreme Court in the case of Sandvik Asia Ltd. Vs. Commissioner of Income Tax, 1, Pune, as reported in (2006) 2 SCC 508. 4. Learned counsel appearing for the Income Tax Department has submitted that as per paras 17 and 18 of the counter affidavit, filed by the Income Tax Department, they are not sure whether the demand draft of Rs.1,84,762.71 paise has been encashed or not and therefore, interest may not be ordered to be paid by the Income Tax Department. 5. Having heard learned counsel for the parties and looking to the facts and circumstances of the case, it appears that the liability finalised upon this petitioner was at Rs.20,057/- (Rupees twenty thousand fifty seven) and the amount encashed by the respondent-Income Tax Department is of Rs. 1,84,762/- (Rupees one lakh eighty four thousand seven hundred sixty two) and, therefore, amount which is to be refunded is Rs.1,64,705/- (Rupees one lakh sixty four thousand seven hundred five). The amount was seized as on 21.02.1991 and has been retained by the Income Tax Department, and, therefore, this amount shall be refunded by the Income Tax Department to this petitioner within a period of six weeks from today along with the interest under Sections 132(B) and Section 244A of the Income Tax Act. The calculation of the said amount of interest will be assessed within a period of eight weeks so that the - 06 - payment of the principal amount with interest can be made within a period of four weeks thereafter. 6. The petitioner has reached to an advanced age and since long refund has not been made by the Income Tax Department and the petitioner had to move from pillar to post, as stated in the memo of writ petition. Therefore, this amount shall be refunded to this petitioner as stated here-in-above within outer limit of six weeks. 7. Accordingly, this writ petition is allowed and disposed of. (D. N. Patel, J) (Amitav K. Gupta, J) Chandan/Satayendra "