M.C. Agarwal, J. - (1.) BY this petition under Article 226 of the Constitution of India, the petitioner seeks a writ of certiorari to quash an order dated July 25, 1984, a copy of which is annexure "6" to the writ petition, by which the Income-tax Officer, C. C. I., Varanasi, rejected the claim of the petitioner for grant of interest under Sections 132B and 244 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). A writ of mandamus is also sought for a direction to the respondents to grant interest to the petitioners under the aforesaid sections.
(2.) WE have heard Sri Z.K. Hasan, learned counsel for the petitioners, and Sri Bharat Ji Agarwal, learned senior standing counsel for the respondents. The case of the petitioners is that their residential premises were searched on August 2, 1975, by the Income-tax Officer and cash amounting to Rs. 25,165 and gold ornaments weighing about 970 kgs. were seized under the provisions of Section 132 of the Act. The Income-tax Officer passed an order dated October 29, 1975, in terms of Section 132(5) of the Act retaining the ornaments and cash aforesaid. The petitioners preferred an appeal to the Central Board of Direct Taxes, who by order dated September 25, 1975, allowed the appeal and directed the Income-tax Officer to return the ornaments. As regards the cash, it was directed that it will be treated as undisclosed income and the Income-tax Officer will calculate the tax on that income and retain the assets to that extent and release the balance.
(3.) ACCORDING to the petitioners, after the aforesaid order of the Central Board of Direct Taxes, the petitioners wrote several letters between 1978 and 1983 to the Income-tax Officer to refund the aforesaid amount, but to no avail. Ultimately, they filed Writ Petition No. 231 of 1984, in this court on February 14, 1984, in which a month's time was granted to counsel for the Income-tax Department for filing a counter-affidavit. The Income-tax Officer without filing a counter-affidavit immediately released the ornaments and cash to the extent of Rs. 19,866 unconditionally. Then, by application dated May 9, 1984, the petitioners asked the Income-tax Officer, respondent No. 1, to pay interest to the petitioners under Sections 132B and 244 of the Act on the amount of Rs. 19,866. This request of the petitioners has been rejected by the impugned order dated July 25, 1984, saying that Section 132B came into force with effect from October 1, 1975, and was not retrospective and that Section 244 of the Act was also not applicable to the facts of the case. It is thereafter that the petitioners filed the present writ petition. In the counter-affidavit, the basic facts are not denied. It is alleged that the various letters mentioned by the petitioners in para 5 of the writ petition by which a refund of the amount is said to have been claimed were not received in the office of respondent No. 1. It is claimed that Sections 132B and 244 of the Act are not applicable to the facts of the case.;