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TMI Blog2011 (10) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee would have paid the tax on 12.4.2006 and 12.09.2006. We allow the appeal of the assessee and direct the department to give credit of 60,40,000 to the assessee from the date, when assessee made application for treating the cash as payment of advance tax/fare while computing the interest chargeable under sec. 234B and 234C of the Incometax Act, 1961 X X X X Extracts X X X X X X X X Extracts X X X X ..... rose with regard to chargeability of interest under sec. 234B and 234C of the Act. Assessing Officer did not gave credit of the amount seized by the department while levying interest under sec. 234B and 234C of the Act. The assessee moved an application to the Assessing Officer requesting him to give the credit of the taxes paid by him in the shape of cash seized by the department at the time of search. The application of the assessee has been rejected by the Assessing Officer vide order dated 28.11.2006. 3. Dissatisfied with the action of the Assessing Officer, assessee carried the matter in appeal before the learned CIT(Appeals) but Learned First Appellate Authority has also rejected the prayer of the assessee. According to the Learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of K.K. Marketing reported in 278 ITR 576 but this decision relates to the preamendment section of 132B of the Act. Under these circumstances, Hon'ble High Court has remitted the issue back to the ITAT. He took us through the amended provisions as well as the old provisions of sec. 132B of the Act and submitted that there is no substantial difference between both the provisions. In the pre-amended provisions, an order under sub-section (5) of sec. 132 has to be passed and the assets retained under this section would be dealt with in the manner provided in sec. 132(1) of the Act. This passing of an order under sub-section (5) of sec. 132 has been done away. Therefore, as far as giving credit of cash seized by the department is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pletion of the assessment under sec. 153A and the assessment of the year relevant to the previous year in which search as initiated or requisition is made, or the amount of liability determined on completion of the assessment under Chapter XIV-B for the block period, as the case may be (including any penalty levied or interest payable in connection with such assessment) and in respect of which such person is in default or is deemed to be in default, may be recovered out of such assets". 7. A bare perusal of this clause would reveal that it refers to the mechanism for adjusting the assets seized under sec. 132 of the Act. Such assets can be adjusted, (a) against the amount of any existing liability under this Act; (b) against the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of law and facts on this issue, and it is worth to take note of the discussion made by the ITAT which read as under: "9. It is well understood that as per section 4 of the Act, an assessee is chargeable to income-tax in respect of his total income. Sub-section (2) of section 4 prescribes that the income-tax so chargeable shall be deducted at source or paid in advance, where it is so deductible or payable under any provision of the Act. We have observed earlier that advance tax liability is governed by sections 208 to 210 of the Act. Similarly, section 140A provides for payment of self-assessment tax on the basis of any return of income required to be filed by the assessee. The relevant provisions also prescribe the dates and the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, the seized cash cannot be adjusted towards advance tax liability. We have carefully perused the said judgment and find that the same does not prohibit adjustment of seized assets towards liability to pay advance tax. In any case, we find that judgment of the Hon'ble Madhya Pradesh High Court is relevant in a situation when section 132(5) was on the Statute, which has since been deleted by the Finance Act, 2002 with effect from 1-6-2002. Section 132(5) of the Act required the Assessing Officer to make an enquiry and thereafter make an order to deal with the seized assets. Section 132(5) of the Act authorizes the Assessing Officer to retain in his custody such assets as in his opinion were sufficient to satisfy the aggregate amounts refe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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