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2014 (1) TMI 1434 - AT - Income TaxValidity of rectification order passed u/s 154 of the Act Adjustment of cash seized against advance tax liability Date from which adjustment would be effective Interest charge u/s 234B and 234C of the Act Held that - The decision in Shri Ram S.Sarda vs. Dy.CIT 2011 (12) TMI 146 - ITAT RAJKOT followed When under the scheme of section 132B the Central Government is under obligation to pay simple interest on excess amount, the same scheme of the provision is applicable when interest is to be recovered from the assessee, may be u/s 234A, 234B or 234C - Thus, the cash seized during the course of search is required to be adjusted against taxes due including advance-tax for the purpose of computation of interest u/s 234A, 234B and 234C - the department has to adjust the seized amount towards the advance-tax from the date when it was seized and accordingly directed the assessing officer to adjust the seized cash from the date of seizure thus, the order of the CIT(A) set aside and the AO is directed to make adjustment of payment made by the assessee towards release of seized valuables against the advance tax liability for the assessment year under consideration decided in favour of Assessee.
Issues involved:
Appeals against common order of Ld. Commissioner of Income Tax(Appeals) dated 20/07/2012 for AY 2010-2011 - Adjustment of seized cash and payments made for release of valuables against advance tax liability - Interest u/s.234B and 234C - Rectification order passed u/s.154 of the I.T. Act, 1961. Detailed Analysis: Issue 1: Adjustment of seized cash and payments for release of valuables against advance tax liability - The appeals by different assessees were against a common order regarding adjustment of payments made for release of seized valuables against advance tax liability for AY 2010-2011. - The assessees contended that the seized cash and payments should be adjusted against their advance tax liability, citing various judicial pronouncements supporting their claim. - The Hon'ble Coordinate Bench in a specific case decided in favor of the assessee, stating that seized assets can be applied against existing liabilities, including advance tax obligations. - The decision emphasized that seized cash should be adjusted against taxes due, including advance tax for computation of interest under relevant sections. - The Tribunal, following the precedent, directed the Assessing Officer to adjust the seized cash against the advance tax liability from the date of seizure itself. - The Tribunal found no reason to deviate from the established view and allowed the appeals of the assessees based on the consistent legal interpretation. Issue 2: Rectification order passed u/s.154 of the I.T. Act, 1961 - The assessees had also challenged the validity of the rectification order passed under section 154 of the Income Tax Act, 1961. - However, the counsel for the assessees decided not to press this ground, allowing the matter to be decided on merit. - The Tribunal did not delve into this issue further due to the decision not to press the ground, focusing instead on the adjustment of seized cash against advance tax liability. Conclusion: - The Tribunal allowed the appeals of the assessees, directing the Assessing Officer to adjust the seized cash against their advance tax liability for the relevant assessment year. - The decision was based on established legal interpretations and precedents supporting the adjustment of seized assets against tax liabilities, including advance tax obligations. - The Tribunal's ruling provided clarity on the treatment of seized cash and payments made for release of valuables in relation to advance tax liabilities, ensuring consistency with previous judicial decisions.
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