SC declines to interfere with HC order seeking intervention of PM office for action against Income Tax officials
In a recent order, Hon’ble Supreme Court has declined to interfere with Hon’ble Bombay High Court judgment seeking intervention of PM office to take action against Income Tax officials for delay in releasing seized cash for nine years despite ITAT order. High Court allowing interest to the assessee directed that its judgment be forwarded to the Prime Minister’s office and to Hon’ble Minister for Finance for taking appropriate action against erring officials on whose lethargic and adamant attitude the Department has to suffer financially.
ABCAUS Case Law Citation:
4254 (2024) (09) abcaus.in SC
In The instant case, the Central Excise Department seized gold items and cash which were taken over by the Income-tax Department under Section 132A of of the Income Tax Act, 1961 (the Act) and order under Section 132(5) of the Act was passed retaining the said assets.
Subsequently, the case was scrutinized under Section 143(3) of the Act and an assessment order was passed. The assessee challenged the Assessment Order firstly before CIT(A) and later before ITAT which in 2014 decided the issue in favour of assessee. No further appeal under Section 260A of the Act was filed by the Department. Therefore, the order of the ITAT attained finality.
However, the seized jewellery and cash was not released to the assessee despite that there was no outstanding demand against assessee and despite several letters by the assessee in this regard to which there was not even a response. In view of the Revenue not following the order of the ITAT, an application was filed by Petitioner before the Principal Commissioner of Income Tax (PCIT) in 2019 after five years of the ITAT order, The PCIT by order u/s 132B directed release of both the cash and the jewellery.
After PCIT order, the seized gold was handed over but the cash was not returned. Aggrieved the assessee in 2022 filed a Writ Petition before Hon’ble Bombay High Court for release of the cash. The Petitioner also contended that he was entitled to interest @ 12% p.a. on account of inordinate delay in releasing the seized amount during the post-assessment period and Petitioner in effect was claiming compensation.
Before the Hon’ble High Court, the jurisdictional Assessing Officer (JAO) submitted that the case pertained to a period when the records were maintained manually and as per the current practice processing of refund is done by system maintained by system and a manual order for processing refund of the principal amount and interest thereon has been passed in 2023. He further stated that after the refund is processed, the same was transmitted to the Centralised Processing Unit (“CPC”) for verification of computation and generation of system enabled refund intimation and payment of refund. That refund with interest had been processed by JAO and now it was for the CPC to refund.
The Hon’ble High Court observed that there was no explanation why the Department sat over the order passed by the ITAT and later by the PCIT. Over nine years had passed since the order by ITAT and three and half years had passed since order of the PCIT.
The Hon’ble High Court held that the assessee was entitled to compensation in the form of interest @ 12% as this was nothing but a clear case of high handedness on the part of the officers of the Revenue.
The Hon’ble High Court opined that this was a fit and proper case in which action should be initiated against all the officers concerned who were all in charge of this case at the appropriate and relevant point of time because of their inaction, Petitioner was made to suffer both financially and mentally.
The Hon’ble High Court directed that a copy of its judgment be forwarded to the Prime Minister’s office and to Hon’ble Finance Minister for perusal and appropriate action against erring Income Tax officials on whose lethargic and adamant attitude the Department had to suffer financially.
Aggrieved by the harsh judgment of the Hon’ble High Court, the Income Tax Department filed a Special Leave Petition (SLP) before the Hon’ble Supreme Court challenging the said judgment.
However, a division bench of the Hon’ble Supreme Court after hearing the counsel of the Department, declined to interfere with the judgment of the Hon’ble Bombay High Court and dismissed the Special Leave Petition.
Download Full Judgment Click Here >>
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