TMI Blog2018 (7) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... shed the bank guarantee, as directed by the Department for an amount of ₹ 63,85,000/-, the Department would have released entire stock of sugar and the Department was not required to keep 1200 bags of sugar in the warehouse for which it had to pay ₹ 3,09,780 as warehouse charges. Therefore, it was not the Department which was at fault, rather it was the petitioner itself for which the Department cannot be penalized and, therefore, the claim of the petitioner for refund of ₹ 3,09,740/- towards warehouse charges paid to the Central Warehouse Corporation by the Department for keeping 1200 bags of sugar is rejected. Waiver of interest u/s 234A, 234B and 234C - In respect of second prayer for granting interest from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying in P.D. Account of Principal CIT (Central), Kanpur without deducting warehouse charges along with interest. It also seeks a direction to the Income Tax Department (hereinafter referred to as 'Department') to compensate the petitioner for the loss occurred due to alleged negligence on the part of the Department. 2. The petitioner is a firm which has been doing business of manufacture of Khandsari sugar and rab etc. A raid was conducted on the business and residential premises of the partners on 4th April, 1995 by the Department. A search and seizure operation was carried out under Section 132 of the Income Tax Act (hereinafter referred to as 'Act'). The authorities seized FDRs worth ₹ 14 Lakhs and cash amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained. This Court after considering the submissions of counsels for the parties and the facts of the case, passed its final judgment and order dated 11th October, 1995 in Civil Misc. Writ Petition No.900 of 1995 and held that the tax liability assessed against the petitioner was found to the tune of ₹ 1,64,84,223/- which was much more than the value of the goods so seized and, therefore, this Court did not find any illegality in the order, requiring the petitioner to furnish a bank guarantee of ₹ 63,85,000/- in favour of the Department to get release of stock of the sugar. However, it was said that this order would be subject to the final order passed under Section Section 132 (12) of the Act. 6. Despite dismissal of aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of deposit of 1200 bags of sugar. 7. The petitioner approached the Income Tax Settlement Commission under Section 245 of the Act to get its dispute with the Department settled regarding its liabilities. The Settlement Commission passed the final order on 27th March, 2012. The Settlement Commission had upheld the interest under Section 234A and 234C of the Act. However, it waived of interest under Section 234B amounting to ₹ 43,53,651/-. After the tax liabilities were finalized by the Settlement Commission, notice of demand dated 23rd November, 2012 was issued. The petitioner challenged the aforesaid notice of demand by filing Writ Petition No. 303 of 2013 before this Court on various grounds namely (i) the notice of demand was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of auction of seized sugar and monies realized on account of encashment of FDR should be given by the AO with effect from the date the monies were realized. 6. The assessing officer is directed to charge the interest u/s 234A and 234C as per the record. The Settlement Commission specifically rejected the claim of the petitioner with reference to the loss occurred due to seizure of sugar as it held that it was not under the powers and functions of the Income Tax Settlement Commission to pass any such order. 9. We have heard Mr. Kaushalendra Nath Singh, learned counsel appearing for the petitioner, and Mr. Shubham Agarwal, learned counsel appearing for respondents. 10. It is well settled that the Department is entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was passed by the Settlement Commission on 25th February, 2015. Therefore, the petitioner cannot claim interest on the amount of ₹ 6,24,260/- from the date when the goods were auctioned. We are of the view the petitioner is entitled for the interest at the rate of 12% per annum from the date of final order passed by the Settlement Commission i.e. 25th February, 2015. Thus, we direct the respondent-authority to release ₹ 6,24,260/- lying with the CIT (Moradabad) with interest at the rate of 12% per annum from 24th February, 2015 till the date actual payment is made. We further direct that the needful should be done within a period of four weeks from the date of production of certified copy of this order. 12. With the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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