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TMI Blog2013 (5) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... ct). 2. The said application was rejected by a communication dated 23.06.2006 by simply stating that the petitioner was not eligible to claim any interest for the assessment year 1986-87 under Section 240, 244A or under Section 132B(4) as per the report of the Commissioner of Income Tax, New Delhi. The said communication also stated that the grievance was treated as having been closed. Thereupon, the petitioner filed the present writ petition seeking a mandamus as indicated above as also the setting aside of the communication dated 23.06.2006. 3. The facts necessary for us to determine the issues raised by the petitioner need to be examined. A search and seizure operation was carried out in the business premises of the petitioner under Section 132 of the said Act on 23.07.1985. Cash, amounting to Rs. 5,35,000/-, as well as some jewellery were seized. Thereafter, an order under Section 132(5) of the said Act was passed on 20.11.1985 whereby the tax amount was determined to be Rs. 10,57,154 and the penalty amount, which was 200% of the tax amount, was determined at Rs. 21,14,308/-. As such, the total tax and penalty computed under the said order dated 20.11.1985 was of Rs. 31,71,46 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. First of all, the learned counsel for the revenue submitted that no interest would be payable to the petitioner under Section 132B(4) of the said Act (as it was applicable at the relevant time). Secondly, the learned counsel for the revenue submitted that no interest was payable even after the assessment order dated 30.3.1989 inasmuch as the demand exceeded the amount of cash available with the department. Thirdly, it was contended by the learned counsel for the revenue that as the petitioner had approached the department under the Kar Vivad Samadhan Scheme, 1998, payment of Rs. 3,29,670/- by the petitioner in February, 1989 closed all issues with regard to the assessment year 1986-87 and therefore, no interest was payable in respect of that assessment year. He submitted that on 17.2.2000 the entire amount of Rs. 5,35,000/- was returned to the petitioner. The learned counsel for the respondent also placed reliance on the provisions of Section 244A of the said Act to indicate that the said provision came into effect in April, 1989. This is clear from sub-section (4) of Section 244A. Therefore, the learned counsel for the respondent submitted that no interest would be payable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets.- (1) The assets retained under sub-section (5) of section 132 may be dealt with in the following manner, namely:- (i) The amount of the existing liability referred to in clause (iii) of the said sub-section and the amount of the liability determined on completion of the regular assessment or reassessment for all the assessment years relevant to the previous years to which the income referred to in clause (i) of that sub-section relates (including any penalty levied or interest payable in connection with such assessment or reassessment) and in respect of which he is in default or is deemed to be in default may be recovered out of such assets. (ii) If the assets consist solely of money, or partly of money and partly of other assets, the Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liability to the extent of the money so applied. (iii) The assets other than money may also be applied for the discharge of any such liability referred to in clause (i) as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake an order, with the previous approval of the Joint Commissioner,- (i) estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him; (ii) calculating the amount of tax on the income so estimated in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act; (iia) determining the amount of interest payable and the amount of penalty imposable in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act, as if the order had been the order of regular assessment; (iii) specifying the amount that will be required to satisfy any existing liability under this Act and any one or more of the Acts specified in clause (a) of sub-section (1) of section 230A in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets/or part thereof as are in his opinion suff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee would be discharged of the said liability to the extent of money so applied. We have also noticed above that the assets available for such application were not in excess of the liabilities which were sought to be discharged. Therefore, there was no question of any interest running under Section 132B(4)(a) of the said Act. That being the position, the question of determining the rate of interest under Section 132B(4) or the date from which the interest was to run, does not arise. Therefore, we are in agreement with the submission made by the learned counsel for the respondent that no interest would be payable even under Section 132B(4) of the said Act. 14. We are however, left with one period which is yet not covered and that is the period commencing on February, 1999 when the petitioner made the payment of Rs. 3,29,670/- under the Kar Vivad Samadhan Scheme, 1998 and closed all issues pertaining to the assessment year 1986-87. Because all issues stood closed in February, 1999 the entire amount of Rs. 5,35,000/- became immediately returnable to the petitioner. However, that amount was returned a little later on 17.2.2000. Therefore, the said amount of Rs. 5,35,000/- was ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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