JUDGMENT :

(Prayer in Application No.35 of 2021: This Application has been filed under Order II Rule 1 of Insolvency Rules R/W Section 7 of PTI Act, 1909 praying to waive the interest in full and order immediate release of the entire amount of Rs.2,42,27,764/- pertaining to AY 2008 -2017 (excluding AY 2011 - 2012), held in fixed depositsby Official Assignee towards interest demand from Income Tax Department along with accrued interest to the Petitioner, without further delay.

Application No.36 of 2021: This Application has been filed under Order II Rule 1 of Insolvency Rules R/W Section 7 of PTI Act, 1909 to direct the Income Tax Department to refund the excess tax remittance by Respondent in March 2018 amounting to Rs.4,00,000/- to the Petitioner without further delay.)

1. The ex-insolvent has filed two applications seeking: (i) waiver of interest in full and for the immediate release of the sum of Rs.2,42,22,764/- held in fixed deposits by the Official Assignee towards the interest demand of the Income Tax Department; and (ii) to direct the Income Tax Department to refund the excess tax remittance by Respondent in March 2018 amounting to Rs.4,00,000/- to the Petitioner without further delay.

2. On a petition by a creditor, the Applicant was adjudged as an insolvent by order dated 26.11.2002 in I.P.No.77 of 2002. Pursuant thereto, the Official Assignee took charge of the estate of the Applicant. Thereafter, the assets of the Applicant were identified. The present application primarily concerns an immovable asset which was sold by auction in the year 2011. Such sale took place pursuant to orders of this Court. Prior thereto, by letter dated 09.01.2007, the Applicant informed the Official Assignee that capital gains may accrue from the sale of the assets, and that capital gains tax should be paid in respect thereof. However, the Official Assignee did not take any steps in such regard. In those circumstances, the Applicant filed Application No.433 of 2009 to direct the Official Assignee to remit capital gains tax so as to avert interest and penalty liabilities in respect thereof. Application No.433 of 2009 was disposed of by this Court by directing the Official Assignee to set apart 20% of the insolvent’s share of the sale proceeds from the sale of the relevant immovable asset towards capital gains tax. On the basis of the said order, 20% was initially parked in a Reserve Bank of India account and subsequently transferred to an interest bearing account pursuant to order dated 01.03.2013 in Application No.304 and 305 of 2012.

3. By notices issued between 16.03.2015 and 22.02.2016, the Income Tax Department informed the Official Assignee that the income tax liability of the estate of the insolvent had not been discharged. Eventually, ex-parte assessment orders in respect of assessment years 2008 -2009 to 2018 - 2019 were issued. Upon obtaining the permission of this Court, the Official Assignee remitted tax on 29.03.2016, as regards assessment years 2008 -2009 to 2013 - 2014; on 15.12.2016, as regards the assessment year 2014 - 2015; on 21.12.2016, as regards assessment years 2015 - 2016 and 2016 - 2017; and, on 15.03.2018, as regards assessment years 2017 -2018 and 2018 - 2019. In the present application, the focus is on the demand for interest and, in particular, interest on capital gains tax of Rs.1,37,03,299/- in respect of the assessment year 2011 - 2012, which was paid on 29.03.2016. The Income-Tax Department issued a demand notice on 05.01.2017 claiming interest under Sections 234A, 234B and 234C of the Income Tax Act, 1961 (the I-T Act) for delayed filing/remittance of tax returns/advance tax. An aggregate sum of Rs.2,42,27,764/- is claimed towards interest. The Applicant seeks waiver of such interest.

4. The question whether the request for waiver of interest should be made before the statutory forum under the I-T Act or before this Court was considered by the Division Bench of this Court in O.S.A.Nos.91 to 93 of 2016. By order