TMI Blog2005 (12) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... been filed. A writ of certiorari has also been claimed for quashing the order dated November 9, 1989, passed by the Commissioner of Income-tax, Allahabad, by which the claim of the petitioner regarding interest on the refund amount has been denied. The facts of the case lie in a narrow compass. The officials of the Income-tax Department on August 5, 1975, conducted search and seizure operation at the premises of the petitioner and seized the gold ornaments valuing Rs. 23,195 as also Rs. 46,006 in cash. Pursuant thereto, the order under section 132(5) was passed on November 1, 1985. In the summary proceedings the authority concerned was of the view that the tax liability comes to more than the value of the assets seized and, consequently, it ordered retention of the assets seized by the Department, so that in the event of liability being created by the final order, the same may be paid from the seized assets. However, in the regular assessment proceedings for the assessment years 1967-68 to 1976-77, the Income-tax Officer framed the assessment order against the petitioner and created the net liability to the tune of Rs. 14,946 only for the aforesaid assessment years. The gold orna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existed before passing of the regular assessment order. Reliance has been placed by him upon a judgment, Anilkumar D. Gajjar v. CIT [1996] 220 ITR 470 (Guj). Sri Shambhu Chopra, learned standing counsel, in his submission has reiterated the stand as taken by the Commissioner in his order, impugned in the present writ petition. It may be noted here that the impugned order dated November 9,1989, is in two parts. By para. 2(i) the claim of the petitioner for grant of interest under section 132B(4) from the expiry of six months of order under section 132(5), i.e., from May 1, 1976, to the date of the last assessment, i.e., December 31, 1977 (for the period of twenty months) which works out to Rs. 6,212 has been accepted. The petitioner is aggrieved by para. 2(ii) of the impugned order through which his claim of payment of interest from April 1, 1978 to May 1, 1980, and onward has been denied. Section 132 of the Act empowers, upon fulfilment of the conditions laid therein to search and seize the documents, books of account, assets, etc. Section 132, on the face of it, is intended to achieve two limited objectives: (i) to get hold of the evidence bearing a tax liability of a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 remains undischarged and for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Assessing Officer or, as the case may be, Tax Recovery Officer under authorisation from the Chief Commissioner or Commissioner under subsection (5) of section 226 and the Assessing Officer or, as the case may be, Tax Recovery Officer may recover the amount of such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule. (2) Nothing contained in sub-section (1) shall preclude the recovery of the amount of liabilities aforesaid by any other mode laid down in this Act. (3) Any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of sub-section (1) are discharged shall be forthwith made over or paid to the persons from whose custody the assets were seized. (4)(a) The Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 132 to the date of the regular assessment or reassessment referred to in clause (i) of sub-section (1). The dispute in the present writ petition is confined to the claim of the interest for the period after completion of the assessment order and till date of the payment of the refund of the excess amount (i.e., on the refund of Rs. 31,060) over and above the assessed tax on the petitioner. According to the petitioner the interest on the said amount is payable by the Department in pursuance of section 244 of the Act. We find sufficient force in the argument of learned counsel for the petitioner that section 132B(4) of the Act and section 244 operate in different fields, inasmuch as they relate to the payment of interest for different periods. There is no overlapping. To put it differently section 132B(4) deals with the liability of the Central Government to pay interest up to the date prior to the framing of the assessment or reassessment order. Section 244 of the Act deals with the liability of the Central Government to pay interest for the subsequent stage which comes into existence after the completion of the assessment/reassessment order. At this stage, learned stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment proceedings but with delay, therefore, the present case is covered by section 237 read with section 240 of the Act. Section 243 of the Act creates a statutory liability of the Central Government to pay interest on delayed refunds. It provides under section 243(1)(b) of the Act that if the assessing authority does not grant refund within three months from the end of the month in which the claim for refund is made under this Chapter, the Central Government shall pay the assessee the simple' interest at the specified rate. The rate of interest was 12 per cent, per annum prior to October 1, 1984, which has been substituted by the words 15 per cent, with effect from October 1, 1984. The procedure for calculating the interest is prescribed in rule 119A of the Income-tax Rules. A conjoint reading of sections 243 and 244 clearly shows the liability of the Central Government to pay interest in the present case at the rate of 12 per cent, per annum for the period after three months of the end of the month in which the total income is determined under the Act. The assessment order was framed on December 31, 1977, the liability of interest would start running after three months, ..... 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