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TMI Blog1994 (12) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. DCIT(Appeals) has erred in-- 1. directing to allow interest on the seized cash of Rs. 59,462 from the date of seizure to the date of final refund ignoring the facts that (a) the directions are against the provisions of sec. 132B(4)(a) (b) of the IT Act, 1961. (b) as per asst. orders framed in pursuance of order u/s 132(5) passed and after levy of penalties no refund was due to the assessee, (c) the waiver of penalties of Rs. 85,497 u/s 273A(4) and u/s 264 made vide order dated 25-5-1985 on the ground that assessee was too old and was not having any means to live and no one to support in old age, (d) the waiver of penalties does not create a right to claim interest on the amount refunded as a result of above waiver. 2. acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m hereunder: "The claim of the assessee for claiming the interest on the balance amount of Rs. 25,535 is hereby rejected on the following grounds: (1) The Hon'ble CIT has nowhere mentioned in the order u/s 273A(4) that the assessee will be given interest u/s 132B(4)(a)(i). He has simply waived the amount of penalty and not quashed the penalty order itself which remains in existence even today. (2) The liability towards payment of penalties u/s 271(1)(a) and 271(1)(c) for the assessment year(s) 1968-69 to 1977-78 were remained outstanding till the date of waiver order passed by the Hon'ble CIT on 25-5-1985 u/s 273A(4) vide letter No. Ju/BD/704/85-86. As such no interest can be paid to the assessee u/s. 132B(4)(a) (b) from 4-11-1976 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be dealt with in the following manner, namely :-- (i) The amount of the existing liability referred to in clause (iii) of the said sub-section and the amount of the liability determined on completion of the regular assessment or reassessment for all the assessment years relevant to the previous years to which the income referred to in clause (i) of that sub-section relates (including any penalty levied or interest payable in connection with such assessment or reassessment) and in respect of which he is in default or is deemed to be in default may be recovered out of such assets." 9. The Ld. Departmental Representative contended that existing liability means the one determined u/s 132(5)(iii) and if that is exceeding the assets retain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o put it simply, if the aggregate of monies retained, as mentioned above, exceeds the liabilities mentioned in section 132B(1)(i), the liability to pay interest arises. 13. Now we shall examine section 132B(1)(i) to see as to which liabilities it refers to. It refers to existing liability u/s 132(5)(iii), liability on regular assessment or reassessment, penalties levied, interest payable and other liabilities in respect of which the assessee is in default or is deemed to be in default. All these liabilities have to be aggregated and if the monies retained, as discussed above, are in excess of these liabilities, the assessee shall be entitled to interest. However, the opening sentence in clause (i) of sub-section (1) of section 132B viz. " ..... X X X X Extracts X X X X X X X X Extracts X X X X
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