Jiwan Kumar v. PCIT (2020) 424 ITR 296/ 194 DTR 20/ 316 CTR 767 (P&H)(HC)

S.244A: Refund – Interest on refunds – Retention of impounded cash- — Delay of more than three years after finalisation of assessment in refunding amount seized —Entitled to interest from date of order passed by Assessing Officer till date of payment- Right to property – Retention of impounded cash without any authority of Law is violation of Article 300A of Constitution. [ 132B(4) , 153A , 263, Art .300A ]

Allowing the petition the Court held that the assessee was entitled to interest under section 244A for the period from January 22, 2014 till the date of payment. The contention of the Department that the amount was relinquished under section 132A and hence interest only according to the provision under section 132B(4) could be granted, was not tenable. Section 132B(4) provides for interest to be paid after 120 days of the date of last authorisation till the date of completion of assessment under section 153A or Chapter XIV-B. This provision could not be read in isolation in the facts of the assessee’s case where in spite of completion of the assessment on January 21, 2014, the amount was not refunded till July 4, 2017. The assessee was entitled to interest under section 244A(1)(b) from the date of the assessment order passed by the Assessing Officer till the date of payment of the seized amount.

Court also held that  to deprive the assessee of his property without authority of law violated article 300A of the Constitution of India. In the absence of any legal backing non-refund of the seized amount to the assessee, the assessee was entitled to interest even under the general law.( AY.2012-13)