COMPENENT AUTHORITY -CUM -CHIEF ADMINISTRATOR PATIALA vs. DEPUTY COMMISSIONER OF INCOME TAX & ORS

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CWP/13706/2018HC Punjab & HaryanaPHHC01084016201828 May 2018Author: MR JUSTICE RAJIV SHARMA,MR. JUSTICE R.C. KATHURIA (RETD.)4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition without expressing any opinion on the merits of the case. It directed Respondent No. 1 (Competent Authority-cum-Chief Administrator, Patiala Urban Planning and Development Authority) to take a decision on the petitioner's letter dated September 24, 2015, and subsequent reminders dated December 4, 2015, January 28, 2016, and May 26, 2016. This decision was to be made in accordance with the law, by passing a speaking order, and after affording an opportunity of hearing to the petitioner. The decision was to be completed within three months from the date of receipt of the certified copy of the order. The specific claim for loss of interest was not adjudicated upon but was to be considered as part of the decision-making process.

What were the facts?

The petitioner, Patiala Urban Planning and Development Authority (PUDA), a statutory authority, collected funds for regularization of unauthorized colonies. These funds were deposited in Fixed Deposits (FDs) in the name of PUDA, held in an 'Escrow Account' for the Punjab Government. The Deputy Commissioner of Income Tax (DCIT) issued an attachment order on July 18, 2014, to Oriental Bank of Commerce and ICICI Bank, where PUDA maintained its term deposits. PUDA challenged this order, and the High Court set it aside on March 17, 2015. Subsequently, PUDA requested a refund of ₹29,85,39,376.93. While a cheque for ₹29.85 crores was issued in favor of the Income Tax Department (respondent No. 3), it was returned as it should have been in favor of PUDA. PUDA then requested the balance amount and an additional ₹3,68,03,951/- for loss of interest due to premature withdrawal and retention of funds by the Income Tax Department from July 23, 2014, to October 14, 2015. Despite reminders, no action was taken, leading to the present writ petition.

What were the issues?

1. Whether the petitioner is entitled to a refund of ₹29,85,39,376.93, including the balance amount after the initial cheque issuance, and compensation for loss of interest amounting to ₹3,68,03,951/- due to the Income Tax Department's actions. Assessee's Contentions: The petitioner argued that the funds collected were for the Punjab Government and held in an escrow account. Following the High Court's order setting aside the attachment, the funds should be refunded. The petitioner also claimed loss of interest due to the premature withdrawal of FDs and the retention of money by the Income Tax Department. They relied on their letters and reminders sent to the respondents seeking resolution. Revenue's Contentions: The judgment does not record any specific contentions from the revenue respondents regarding the refund or the claim for loss of interest.

AI-generated summary — verify with the full judgment below

CWP-13706-2018 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP-13706-2018 Date of Decision: 28.5.2018 Competent Authority-cum-Chief Administrator, Patiala Urban Planning and Development Authority, Patiala ....Petitioner. Versus Deputy Commissioner of Income Tax, Circle-1 (Exemptions) and others ...Respondents. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL, ACTING CHIEF JUSTICE. HON'BLE MR. JUSTICE TEJINDER SINGH DHINDSA PRESENT: Ms. Rita Kohli, Senior Advocate with Mr. Pradeep Sharma, Advocate for the petitioner. AJAY KUMAR MITTAL, ACJ.

In this writ petition filed under Articles 226/227 of the Constitution of India, the petitioner has prayed for issuance of a writ in the nature of mandamus directing the respondents to release an amount of ` 3.68 crores to the petitioner towards loss of interest due to premature withdrawal of the FDRs and retention of money by the respondents.

The petitioner is a Statutory Authority created under the Punjab Laws (Special Provisions) Act, 2013 (Annexure P-1) to regularize the unauthorized colonies in the State of Punjab. The petitioner was to act as a competent authority under the said Act. State Government vide notification dated 26.6.2013 (Annexure P-2) make it compulsory for all the developers of unauthorized colonies/owners of plots/buildings in such areas to file an Gurbachan Singh 2018.05.29 17:50 I attest to the accuracy and integrity of this document

CWP-13706-2018 -2- application in the prescribed format for compounding/regularization of layout/plots/buildings before the competent authority within 60 days from the date of notification of the policy. On the basis of the said notification, the petitioner received various applications along with requisite funds on behalf of the State Government and the funds were deposited in Terms Deposits (Annexure P-3 Colly) with various banks for a period of one year in the name of the petitioner. The petitioner maintained its accounts with Oriental Bank of Commerce and ICICI Bank Limited in Patiala and being the nodal agency was holding an 'Escrow Account' for the Punjab Government and the collection/regularization fee received by the petitioner belonged to State Government. Respondent No.2 issued attachment order dated 18.7.2014 (Annexure P-4) to the Oriental Bank of Commerce and ICICI Bank wherein the petitioner was maintaining its term deposits in the name of the petitioner. Feeling aggrieved, the petitioner filed CWP-16162- 2014 and this Court vide order dated 17.3.2015 (Annexure P-5) set aside the attached order, Annexure P-4. In pursuance thereto, the petitioner vide letter dated 9.4.2015 (Annexure P-6) requested respondent No.2 to refund a sum of ` 29,85,39,376. 93. In response thereto, respondent No.1 vide letter dated 1.5.2015 (Annexure P-7) asked the petitioner to send certain documents. Respondent No.3 vide letter dated 11.5.2015 (Annexure P-8) submitted the requisite documents as sought for by respondent No.

State Bank of India sent a letter dated 8.9.2015 (Annexure P-9) to respondent No.4 along with a cheque dated 8.9.2015 (Annexure P-10) amounting to ` 29.85 crores in favour of respondent No.

Respondent No.3 vide its communication dated 18.9.2015 (Annexure P-11) returned the cheque dated 8.9.2015 to respondent No.2 with a request to issue cheque in favour of the Gurbachan Singh 2018.05.29 17:50 I attest to the accuracy and integrity of this document

CWP-13706-2018 -3- petitioner instead of respondent No.

Respondent No.3 vide letter dated 24.9.2015 (Annexure P-12) informed respondent No.1 that the related bank account had been attached by the Income Tax Department due to which respondent No.4 was not able to proceed with the suggestion of the respondents and requested respondent No.2 to release the said amount to enable respondent No.4 to get the said cheque encashed and transfer the amount to the petitioner. Respondent No.3 also mentioned in the said letter that an amount of ` 29,85,39,358.93 was required to be refunded whereas cheque in the amount of ` 29,85,00,000/- had been issued and requested for the issuance of cheque for the balance amount. Further, respondent No.3 sent a reminder dated 4.12.2015 (Annexure P-13) to respondent No.1 for the issuance of cheque for the balance amount. The petitioner vide letter dated 15.12.2015 (Annexure P-14) followed by reminder dated 26.1.2016 (Annexure P-15) requested respondent No.1 for issuance of an amount of ` 3,68,03,951/- against the loss of interest due to premature withdrawal of the FDRs and retention of money by the Income Tax Department from 23.7.2014 to 14.10.2015, but to no effect. Thereafter, the petitioner sent the reminder dated 26.5.2016 (Annexure P-16) to respondent No.2, but no response has been received till date. Hence, the present writ petition.

Learned counsel for the petitioner submitted that for the relief claimed in the writ petition, the petitioner has sent a letter dated 24.9.2015 (Annexure P-12) followed by the reminders dated 4.12.2015, 28.1.2016 and 26.5.2016 (Annexures P-13, P-15 and P-16, respectively) to respondents No.1 and 2, but no action has so far been taken thereon.

After hearing learned counsel for the petitioner, perusing the present petition and without expressing any opinion on the merits of the Gurbachan Singh 2018.05.29 17:50 I attest to the accuracy and integrity of this document

CWP-13706-2018 -4- case, we dispose of the present petition by directing respondent No.1 to take a decision on the letter dated 24.9.2015 (Annexure P-12) followed by the reminders dated 4.12.2015, 28.1.2016 and 26.5.2016 (Annexures P-13, P-15 and P-16, respectively), in accordance with law by passing a speaking order and after affording an opportunity of hearing to the petitioner within a period of three months from the date of receipt of the certified copy of the order. (AJAY KUMAR MITTAL) ACTING CHIEF JUSTICE May 28, 2018 (TEJINDER SINGH DHINDSA) gbs JUDGE Whether Speaking/Reasoned Yes/No Whether Reportable Yes/No Gurbachan Singh 2018.05.29 17:50 I attest to the accuracy and integrity of this document

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