2024 (5) TMI 957 - AT - Income Tax

Adjustment of seized fixed deposits with the advance tax liability - as submitted the request for adjustment of seized assets was made on 11.04.2012, but the assessee had filed return belatedly only on 26.03.2013 and hence the same would also not fall within the ambit of adjustment towards self assessment tax - whether the assessee is entitled for seeking credit of appropriation of seized fixed deposits as self assessment tax liability of the assessee? HELD THAT - We are unable to comprehend ourselves to accept to the proposition of DR in view of the fact that any tax that is paid or sought to be paid by the assessee after the expiry of the financial year could only be construed as advance payment of self assessment tax. In the instant case, the assessee had made a request for adjustment of seized fixed deposits towards the tax liability in terms of section 132B of the Act on 11.04.2012 itself. Obviously, that request had to be construed only towards payment of self assessment tax liability, dehors the actual date of filing of return of income. The most excruciating fact in this appeal is that the assessee though had made a request while filing the belated return of income on 26.03.2013 had indeed sought for adjustment of seized fixed deposits with the self assessment tax liability, the entire orders of the lower authorities are completely silent on this issue, in as much as absolutely the lower authorities had conveniently ignored by not giving any finding to that effect. We find that the seized fixed deposit receipts ultimately had been adjusted against the regular tax arrears for AY 2012-13 by the Income Tax Department at a later period. We direct the ld AO to adjust the fixed deposit receipts towards self assessment tax payable by the assessee w.e.f. 11.04.2012 and recompute the interest u/s 234B of the Act accordingly. Since the seized fixed deposit receipts are now directed to be adjusted against the self assessment tax payable, the adjustment already made by the ld AO towards the regular tax need to be removed. AO is directed accordingly. This in our considered opinion, would meet the ends of justice.

Summary

Issues involved: Appeal against order of Commissioner of Income Tax (Appeals) regarding adjustment of seized fixed deposits against tax liability for AY 2012-13 and interest calculation u/s 234A & 234B.

Summary:

Issue 1: Barred by Limitation
The appeal challenged the order passed u/s 154 of the Income-tax Act, 1961 beyond the prescribed time limit. The assessee contended that the application should be deemed accepted due to the delay. The Tribunal did not delve into this issue as relief was granted on merits.

Issue 2: Adjustment of Seized Fixed Deposits
The main issue was whether the assessee was entitled to adjust seized fixed deposits against self-assessment tax liability. The Income Tax Department did not credit the seized assets towards self-assessment tax, leading to a demand on the assessee. The Tribunal held that any tax paid after the financial year's expiry is considered an advance payment of self-assessment tax. Citing a previous tribunal decision, the Tribunal directed the AO to adjust the fixed deposits against self-assessment tax and recalculate interest u/s 234B accordingly.

Conclusion:
The Tribunal allowed the appeal, directing the AO to adjust the seized fixed deposits against self-assessment tax payable by the assessee. The relief was granted on merits, rendering the issue of limitation moot. The appeal was allowed for statistical purposes.