Pradeep Misra Vs UOI & Ors. (Delhi High Court)
In Delhi High Court, the petitioner sought compensation for loss of interest arising from the delayed release of seized Kisan Vikas Patras (KVPs) and Indira Vikas Patras (IVPs) by the Income Tax Department.
The case arose after a search conducted on 21.01.1997 under Section 132 of the Income Tax Act, 1961, during which KVPs, IVPs, fixed deposits, cash, and jewellery were seized from the petitioner. An assessment order dated 28.07.1999 raised a tax demand of Rs. 2,24,65,638/-, following which the petitioner approached the Settlement Commission under Section 254(1) of the Act.
During the pendency of proceedings before the Settlement Commission, several KVPs and IVPs either matured or were nearing maturity. The petitioner repeatedly requested the authorities through letters and representations to either release, renew, or convert the instruments into interest-bearing fixed deposits. However, the Assessing Officer neither responded nor acted upon those requests.
The petitioner contended that the delay in release prevented him from receiving maturity proceeds on time, resulting in substantial loss of interest. The department argued that the instruments could not be released because a large tax demand remained outstanding and that the Settlement Commission had directed release only upon payment of the settlement amount. The department further contended that the petitioner was not entitled to interest for the period prior to deposit of the settlement dues on 23.12.2003.
