2013 (8) TMI 1042 - AT - Income Tax

Summary

Issues involved:
Assessment of interest u/s 234A, 234B, and 234C on cash seized by Income Tax Department before due date of advance tax payment for A.Y. 2009-10.

Issue 1: Interest u/s 234A
The assessee challenged the interest charged u/s 234A, contending that taxes were paid before filing returns exceeding the tax payable as per returned income. The Ld. CIT(A) confirmed the interest. The Tribunal noted that the assessee's request to adjust seized cash against tax liability was not specific in the statement u/s 132(4). Relying on precedents, the Tribunal held that the seized cash could be adjusted towards advance tax liability, even before assessment completion, as per Section 132B(1)(i) of the Act. The Tribunal allowed the appeal, citing similar cases where interest was deleted by the Tribunal and High Court, as the seized cash exceeded the total tax payable.

Issue 2: Interest u/s 234B
The assessee disputed the interest charged u/s 234B, arguing that the cash seized was before the due date of advance tax payment for A.Y. 2009-10. The Tribunal found that the seized cash was admitted as income by the assessee and requested to adjust it against tax liability. Relying on legal provisions and precedents, the Tribunal allowed the appeal, stating that the seized cash could be utilized towards advance tax liability before assessment completion.

Issue 3: Interest u/s 234C
The assessee contested the interest charged u/s 234C, stating that the cash seized was before the due dates of advance tax payment for A.Y. 2009-10. The Tribunal observed that the assessee had requested to adjust the seized cash against tax liability. Citing relevant legal decisions, the Tribunal allowed the appeal, emphasizing that the seized cash could be adjusted towards advance tax liability before assessment finalization.

In conclusion, the Appellate Tribunal ITAT Pune allowed the appeal, ruling in favor of the assessee and directing the cancellation of interest charged u/s 234A, 234B, and 234C.