INCOME TAX ACT, 1961

Section 132B(4)(b)

Search and seizure - Allowability of interest as per section 132B(4)(a) & (b) - There was delay on part of revenue in releasing the cash amount seized from assessee -

There was delay on part of revenue in releasing the cash amount seized from assessee. Assessee sought for interest as per section 132B(4)(a) and (b). Question arose for consideration was whether court could award interest or compensation having found delay on the part of the revenue. For wrongfully withholding the cash amount of assessee though by the assessment order of income of assessee was assessed as nil. Held: There is no doubt that the said section 132B(4)(b) provides that, interest would 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 under section 153A or under Chapter XIV-B. However, said provision does not indicate any bar from awarding payment of interest or compensation in a situation where court finds any delay on the part of the revenue in releasing the amount within time specifically prescribed under the provisions of law for no fault of assessee. In assessee's case, department being solely responsible for gross delay in not releasing the cash amount of assessee under section 132B(4)(b) could not refuse payment of compensation to assessee for wrongfully withholding the said amount from the date of assessment order till payment. Revenue was directed to allow the claim for the interest by way of compensation/damages at the rate of 6% per annum for delayed period already quantified in the chart submitted by assessee.

Relied:G.L. Jain v. CIT-XI & Ors. delivered on 28-8-2012 in Writ Petition (C) No. 876/2012 : 2013 TaxPub(DT) 0923 (Del-HC). Distinguished:Commr. of Cus. (Import) v. Dilip Kumar and Company & Ors. (2018) TaxCorp(IDT) 114975 (SC) : 2018 TaxPub(EX) 737 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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