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IN THE HIGH COURT OF DELHI AT NEW DELHI
Manmohan, Navin Chawla, JJ.
Suresh Gulati - Appellant
Versus
Principal Commissioner Of Income Tax - X & Anr. - Respondents
Civil Writ Petition No. 13641 of 2021
Decided On : 03-12-2021
Interest - Income Tax Act - The court directed the respondent to decide the petitioner's representations for payment of interest within six weeks in accordance with law, based on the provisions of Section 132B(4)(a) read with Section 244A of the Income Tax Act, 1961.
Fact of the Case:
The petitioner sought directions to the respondents to pay interest as per Section 132B(4)(a) read with Section 244A of the Income Tax Act, 1961, stating that non-payment of interest on the seized amount was against the provisions of the Act.
Finding of the Court:
The court disposed of the writ petition with a direction to the respondent to decide the petitioner's representations for payment of interest within six weeks in accordance with law, without expressing any opinion on the merits of the controversy.
Issues: Non-payment of interest on the seized amount, delay in deciding the petitioner's representations for payment of interest.
Ratio Decidendi: The court relied on the provisions of Section 132B(4)(a) read with Section 244A of the Income Tax Act, 1961, and the petitioner's representations/applications for payment of interest in reaching its decision.
Final Decision: The court directed the respondent to decide the petitioner's representations for payment of interest within six weeks in accordance with law, without expressing any opinion on the merits of the controversy.
JUDGMENT
Manmohan, J. - Present writ petition has been filed seeking directions to the respondents to pay interest to the petitioner as per Section 132B(4)(a) read with Section 244A of the Income Tax Act, 1961 (hereinafter referred to as the Act).
2. Learned Counsel for the petitioner states that non-payment of interest on the seized amount is against the provisions of Section 132B(4)(a) of the Act by virtue of which the respondents are under an obligation to pay interest on the amount seized. He states that the said interest is payable after expiry of 120 days from the date when last authorization for search was accorded. In support of his submission, learned counsel for the petitioner relies on the decision of the Supreme Court in the matter of Chironjilal Sharma HUF vs. Union of India & Ors., Civil Appeal No.10601/2013 dated 26th November, 2013.
3. A perusal of the paper book reveals that the petitioners representations/applications dated 03rd October, 2017, 16th July, 2019, 03rd February, 2020, 12th October, 2020 and 20th July, 2021 for payment of interest have not been decided till date.
4. Consequently, the present writ petition is disposed of with a direction to respondent No.2 to decide the petitioners aforesaid representations/applications within six weeks in accordance with law. It is clarified that this Court has not expressed any opinion on the merits of the controversy. The rights and contentions of all the parties are left open.
The court's decision was based on the provisions of Section 132B(4)(a) read with Section 244A of the Income Tax Act, 1961, regarding the payment of interest on the seized amount.
Statutory provisions require authorities to pay interest on seized amounts post a 120-day period if applications remain undecided, reinforcing timely responses to citizens' representations.
The court affirmed the obligation of tax authorities to comply with statutory provisions for interest payments on seized amounts, directing timely action to address delays in such refunds.
The court enforced the provision for interest payment in accordance with section 132B(4) of the Income Tax Act, 1961, by directing the Respondent to take action on the representation for interest pay....
The main legal point established in the judgment is the interpretation of the word 'shall' in the second proviso to Section 132B(1)(i) of the Income Tax Act, 1961, and the determination of its mandat....
The main legal point established in the judgment is that interest under Section 234B(2A) of the Income Tax Act should be calculated only on the additional amount of income tax after providing the set....
The court established that interest on Cenvat credit is due from the date of deposit when collected under coercion, highlighting the limits of authority during searches.
The court emphasized that differing circumstances in tax cases must be individually assessed, particularly regarding claims for interest on delayed refunds.
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