9911796707
TMI Blog2012 (3) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of search and seizure operation a sum of Rs. 90,31,000/- belonging to the firm was seized and deposited into the account of the Income Tax Department. The said amount remained till the date of the assessment and no part thereof was released. In the course of search action, the assessee firm admitted that said seized amount be treated as additional income and such an offer was accepted by the Income Tax Authorities, which was also shown by the appellant in its income tax return for the Assessment Year 2009-10. The appellant from time to time requested and made a prayer before Investigation Wing i.e. ADIT, Unit III(1), Delhi, as well as before the DCIT, Range 14(1), Mumbai holding jurisdiction over the case of the assessee, to treat the amount so seized towards advance tax liability. The similar request was also made before the Assessing Officer. 2.1 However, while passing the assessment order, the Assessing Officer did not allow any credit in respect of seized amount which was requested to be treated as advance tax and accordingly he charged interest u/s.234B and 234C. 3. Before the learned CIT(Appeals) the assessee relied upon the following decisions :- i) CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r relied upon the judgment of Hon'ble Madhya Pradesh High Court in the case of Ramjilal Jagannath And Others vs. ACIT reported in 241 ITR 758. On the other hand, the learned AR reiterated the submissions made before the learned CIT(Appeals) and also the judgments relied upon by the assessee before the Ld. CIT(A). Besides this he further relied upon the judgment of Punjab and Haryana High Court in the case of CIT Ashok Kumar reported in (2011) 334 ITR 355. 5. We have carefully considered the submissions of both the parties and the orders of the authorities below and also gone through the various judgements relied upon by the parties. First of all the relevant facts which are relevant for the issue involved are that the action of search and seizure u/s.132 took place on 24.12.2008, during the course of which cash amounting to Rs. 90,31,000/- was found from the residential premises of the partners. The said amount was offered as an additional income for the Assessment Year 2009-10 in the hands of the assessee firm. In the return of income filed on 24.09.2009, the said cash was duly included in the return of income. The assessee vide letter dated 09.03.2010 requested for adjustmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment. Here in this case, the assessment relates to the previous year in which search have been initiated. The advance tax is clearly a liability under the Income Tax Act by virtue of section 209 and 210. The word "existing liability" under the Income Tax Act as appearing in section 132B, sub-section (1) clause (i) will also cover the advance tax liability. The assessee has duly requested to adjust his liability for the advance tax prior to the due date of the third instalment i.e. 15.03.2009 in relation to the income which has been offered for the year ending 31.03.2009 i.e. relevant to Assessment Year 2009-10. Thus the liability to pay advance tax existed prior to 15.03.2009 and the assessee was under the law to discharge this liability. This liability got discharged on the date when it made a request on 09.03.2009 to adjust the seized cash towards advance tax. Thus, in our opinion, the Assessing Officer was legally obliged to adjust the seized cash towards the liability for advance tax which existed at that time and there seems to be no infirmity in the finding given by the learned CIT(Appeals). 5.2 As regards to the judgment of Hon'ble Madhya Pradesh High Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh receipts against the liability of advance tax which arose on account of the income surrendered during the search operation. The Department does not deny possession of the cash since the time of search. Thus, we find no justification for the Revenue to interpret the expression existing liability' in section 132B(l)(i) as not referring to liability of advance tax. Under the Income-tax Act, liability towards advance tax is a part of the scheme of recovery of taxes and such liability definitely falls in the expression 'existing liability' used in section 132B(1 )(i) in the facts and circumstances of the case. The reliance pleaded by the CIT (Appeals) on the judgment of the Hon'ble Madhya Pradesh High Court in the case of Ramjilal Jagannath v. Asstt. CIT [2000] 241 ITR 758 is quite misplaced. As per the Revenue, in terms of the said judgment, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any case it is also not clear under which statutory powers, such a letter has been issued by the CBDT. Thus, in the absence of any details in this regard the observation of the Assessing Officer does not justify his stand. The action of the Assessing Officer is contrary to the law. In any case, in the present case there is no case set up by the Revenue that the cash seized was liable to be appropriated against any other liability under this Act when the assessee made the request to adjust the same against advance tax liability for the assessment year 2007-08. Therefore, in view of the aforesaid discussion, we set aside the order of the CIT (Appeals), and direct the Assessing Officer to allow adjustment of seized cash against advance tax liability of the assessee as contended in the written communications dated 1-12-2006 and 15-3-2007 and thereafter recompute, if any, interest chargeable under sections 24B and 34C of the Act." 5.4 In the latest judgment, the Hon'ble Punjab and Haryana High Court in the case of CIT vs. Ashok Kumar reported in (2011) 334 ITR 355, it has observed and held as under :- "Held, dismissing the appeal, that the assessee had made request for adjustmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
