2014 (6) TMI 280 - AT - Income Tax

Computation of interest u/s 234A and 234B of the Act - Credit of the amount seized as advance payment of tax Held that - Following S.Duraipandi S.Thalavaipandian Vs. ACIT 2013 (12) TMI 998 - ITAT CHENNAI - seized amount shall be treated as advance tax paid provided the assessee authorizes the department to appropriate the seized amount towards such tax liability - the seized amount shall be treated as payment of advance tax on the date of seizure itself. The contention of the assessee regarding date of intimation to treat the seized amount as advance tax is concerned, the assessee has placed on record copies of the communication dt.16-11-2010 and 30-11-2010 along with photocopies of Department inward register - A perusal of same shows that both the intimations were received in the office of Revenue thus, the matter is remitted back to the AO for verification of intimation and its acknowledgement, before granting the aforesaid relief Decided in favour of Assessee.

Summary

Issues:
1. Delay in filing appeals and condonation of delay.
2. Treatment of seized amount as advance tax.
3. Date of intimation to treat seized amount as advance tax.

Issue 1: Delay in filing appeals and condonation of delay:
The appeals were filed with a delay of seven days, and the assessees sought condonation of the delay with valid reasons supported by affidavits. The Tribunal, after perusal, accepted the explanations for the delay and condoned it, admitting the appeals to be heard on merits.

Issue 2: Treatment of seized amount as advance tax:
The assessees, involved in the business of silver ornaments, had cash seized during a search under the Income Tax Act. They requested to adjust the seized amount towards advance tax, but the Assessing Officer levied interest without considering their request. The CIT(Appeals) held that the request should have been made before the close of the relevant previous year. The Tribunal referred to a similar case where seized amounts were treated as advance tax if authorized by the assessee. Following this precedent, the Tribunal directed the Assessing Officer to treat the seized amount as advance tax paid on the date of seizure itself.

Issue 3: Date of intimation to treat seized amount as advance tax:
The assessees provided evidence of their communication to authorize the Revenue to adjust the seized amount towards advance tax on specific dates. The Tribunal remitted the file back to the Assessing Officer to verify the authenticity of these intimations before granting relief. If found correct, the Assessing Officer was instructed to give credit for the seized amount as advance payment of tax for the relevant assessment year before charging interest under sections 234A and 234B.

In conclusion, the Tribunal allowed the appeals of the assessees for statistical purposes, emphasizing the treatment of the seized amount as advance tax and the importance of timely intimation to the authorities for such adjustments.