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TMI Blog2016 (7) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,309/- forming part of Fixed Deposit Certificates worth ₹ 5,98,75,340/- and 3031.5gms of jewellery were seized. In response to the notice dated 1.6.2001 issued under section 158BC of the Act to file the Block Return within 16 days, the assesee filed the return on 8.1.2002 admitting total undisclosed income of ₹ 1,41,50,975/-. In the course of the Block Assessment Proceedings, the assessee admitted further undisclosed income of ₹ 3,95,632/-. Based on the materials made available, the assessing authority determined the tax liability as ₹ 1,20,55,160/- which included Surcharage @ 17% amounting to ₹ 15,36,495/- and Interest u/s.158BFA for the period from 22.6.2001 to 08.1.2002 (for 7 months) ₹ 14,80,458/-. Challenging the levy of surcharge and interest, the appellant preferred an appeal before the Commissioner of Income Tax (Appeals ) - II, Coimbatore. 3. The Commissioner of Income Tax (Appeals ) - II, Coimbatore / the first appellate authority after considering the submissions of the parties concerned came to the conclusion that the levy of interest under Section 158BFA of the Income Tax Act is not justified and accordingly, it was held by order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 28.02.1999 1998-99 1999-2000 44,06,158 6,25,641 30.12.1999 1999-00 2000-2001 39,33,903 -- -- 2000-01 2001-2002 73,22,477 10,10,922 -- Total 2,00,89,899 59,38,924 7. The Assessing Officer, namely, Deputy Commissioner of Income Tax, Chennai Circle IIII(4), Chennai, has determined the liability of tax as under:- Interest received on TNSC deposits, as admitted Rs.67,33,958/- Interest accrued upto 11.1.2001, as admitted Rs.33,98,532/- Normal income for the AY 2000-2001, as admitted Rs.11,35,557/- Income offered on adhoc basis as admitted Rs.30,00,000/- Additional interest on deposits as admitted ₹ 3,95,632/- Additional Towards unexplained jewellery ₹ 4,00,000/- Total Undisclosed Income Rs.1,50,63,679/- Tax payable thereon ₹ 90,38,207/- Add : Surcharge @ 17% ₹ 15,36,495 /- ₹ 1,05,74,702/- Add: Interest u/s 158BFA ₹ 14,80,458/- Rs.1,20,55,160/- Less : PD A/c adjusted Rs.1,08,03,210/- Balance payable ₹ 12,51,950/- 8. Being aggrieved by the order passed by the Assessing Officer, the appellant preferred an appeal before the Commissioner of Income Tax, Appeals - II, Coimbatore, challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government, the right of the amount remains with the assessee. Therefore, the seized amount cannot be equated with tax payment. Adjustment is possible only after the filing of the return. Therefore, the levy of interest is clearly attracted as per the prescription of statute. By recording the above said reasons, the order passed by the appellate authority, namely, the Commissioner of Income Tax Appeals was reversed by the Tribunal. Further, the Tribunal has also directed the Commissioner/appellate authority to decide the issue insofar as levy of interest for the period of 30 days, the time sought for filing the return in Form 2B and to decide the issue after affording adequate opportunity for the appellant, and allowed the appeal filed by the revenue. 12. Being aggrieved by the order passed by the appellate Tribunal, the instant Appeal has been preferred before this Court by the assessee. The instant appeal was admitted and the following substantial questions of law were framed:- 1. Whether the Tribunal is correct in confirming the order of the respondent/assessing officer in imposing interest under section 158BFA (1) of the Act even though there was no loss of revenue on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Further, it was submitted that under the Income Tax Rule 112, Sub Rule 12(iii) provides the Commissioner of Income Tax to deposit the seized cash into the Personal Deposit account in any State Bank of India or authorised bank. Such personal Deposit Account (PD A/c) does not carry any interest. Thus, the seized cash, during the course of such, remains the same, without earning interest when Commissioner deposits the same in the P.D.Account. 15. The provisions of Section 158BFA(1) of the Act is usefully extracted hereunder:- Section 158BFA. (1) Where the return of total income including undisclosed income for the block period, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of January, 1997, as required by a notice under clause (a) of section 158BC, is furnished after the expiry of the period specified in such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of [one] per cent of the tax on undisclosed income, determined under clause (c) of section 158BC, for every month or part of a month comprised in the period commencing on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution." Therefore, the contention of the revenue that the appellant has to approach the Board to waive the levy of interest cannot be sustained in the light of the decision rendered by the Hon'ble Supreme Court supra. 18. In the case of Commissioner of Income Tax v. J.P.Narayanaswamy held by the High Court of Karnataka reported in [2014] 41 Taxmann.com 52 (Karnataka), it was held that the levy of interest is as per statutory provision under section 158BFA(1) of the Act and does not link to the date of payment of tax in case of delay in filing of the return after receiving notice under section 158BC of the Act and only linked to the delay in filing the return. It has been held in Paragraph 17 as under: "17. The adjustment of liability as determined under Clause (c) follows determination of tax liability and therefore is not in any way providing for reducing tax liability before quantification of the tax liability. Application in terms of Section 132B is thereafter. It is for this reason we cannot accept the contention of learned counsel for the Assesseee that before levying of interest the amount should have been adjusted from out of the tax liability amount as available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the Legislature.
22. In Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc reported in (2012) 9 SCC 552 : (2012) 4 SCC (Civ) 810, it has been held as follows:
"64. ... that it is not the function of the Court to supply the supposed omission, which can only be done by Parliament. In our opinion, legislative surgery is not a judicial option, nor a compulsion, whilst interpreting an act or a provision in the Act."
23. We are unable to accept the contention of the appellant that levy of interest can be adjusted from the seized amount which was lying in the P.D.Account in the absence of any provision to grant such claim.
24. In the light of the above discussions and following the aforesaid decisions, we are not inclined to interfere with the order passed by the Appellate Tribunal. Hence, the substantial question of law framed in the instant appeal is answered against the appellant/assessee. Tax Appeal filed by the assessee is dismissed. However, there shall be no order as to costs.. No costs. X X X X Extracts X X X X X X X X Extracts X X X X
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