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2015 (11) TMI 25 - HC - Income TaxEntitlement for interest on the amount claimed along with future interest - Bar of suits in civil courts. - inetrest on what rate and from what date? - Whether the plaintiff is entitled for decree of the sum as prayed in suit against the defendants jointly and severally? - Jurisdiction of court - Held that:- It is not disputed on behalf of the plaintiff that when this Order was passed on 20.9.2005 (or even on 27.9.2004 as argued on behalf of the plaintiff), plaintiff was aware of the fact that the three bank drafts totaling to ₹ 30,50,000/- were not encashed by the defendants and plaintiff had a right to claim interest on these bank drafts in the proceedings under Section 245(D)(6) of the Income Tax Act, inasmuch as, by June/August 2004, plaintiff had encashed the pay orders totaling to the amount of ₹ 30,50,000/-. The computation being done of amounts; payable for and against the plaintiff; and for and against the defendants, very much had to be and was the subject matter of the Order dated 20.9.2005 (or 27.9.2004) and all these were aspects with respect to the recovery from the plaintiff of the Income Tax dues payable by the plaintiff pursuant to the search and seizure operations in the premises of the plaintiff on 4.2.1995 and refund to the plaintiff on account of excess amount lying with the defendants. The plaintiff thus ought to have raised but did not raise the claim of the amount which is the subject matter of the present suit before the Income Tax Officer who passed the computation vide Order dated 20.9.2005/27.9.2004 or if the plaintiff did make the claim with respect to interest payable on three drafts, then the same stood denied in terms of the aforesaid Order dated 20.9.2005/27.9.2004. As asked the counsel for the plaintiff a specific question, as to whether the plaintiff had raised this claim which is the subject matter of the present suit being the interest payable on account of monies of the plaintiff lying dormant in suspense accounts with the banks as the three bank drafts/pay orders were not encashed by the defendants, but counsel for the plaintiff could not answer this query of the Court one way or the other in spite of taking instructions from the plaintiff. Therefore, looking at the matter from any angle, if this issue was raised and the claim was denied by the ITO or the issue was not raised at all, the claim of the plaintiff definitely stood merged in the Order dated 20.9.2005/27.9.2004 being the claim of the plaintiff with respect to interest on the amount of ₹ 30,50,000/-. If the case of the plaintiff is that the Order dated 20.9.2005/27.9.2004 wrongly disallows the claim, then plaintiff had appropriate remedy to challenge the said order in an appeal but the plaintiff failed to do so. This suit in view of Section 293 of the Income Tax Act however is not the remedy and the only remedy of the plaintiff was to challenge the Order dated 20.9.2005/27.9.2004 in the appropriate forum and which the plaintiff failed to do. The ratio of the judgment of the Supreme Court in the case of Parmeshwari Devi Sultania (1998 (3) TMI 3 - SUPREME Court) clearly applies that with respect to any claim which is made in a civil suit against the Income Tax department which will result in modification of proceedings under the Income Tax Act, then the cognizance of such a civil suit cannot be taken by a civil court in view of the categorical bar contained in Section 293 of the Income Tax Act. In Parmeshwari Devi Sultania’s case (supra), the Supreme Court has referred to a judgment of the Privy Council in Raleigh Investment Co. Ltd. Vs. Governor General-in Council [1947 (2) TMI 18 - PRIVY COUNCIL] wherein a similar issue was decided. It is settled law that under Section 9 of the Code of Civil Procedure, 1908 a suit is not maintainable once there is an express or implied bar to the suit. Section 293 of the Income Tax Act is an express bar to the present suit in view of the judgment of the Supreme Court in the case of Parmeshwari Devi Sultania (supra). In view of the above, since this Court has no inherent jurisdiction to try this suit in view of the bar contained in Section 293 of the Income Tax Act, the suit is therefore dismissed, leaving the parties to bear their own costs.
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