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TMI Blog2024 (9) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the possession of Sarup Chand should be treated as advance tax payable by them. The alleged amount was concededly lying deposited in the bank account of Sarup Chand and till the determination of liability of all the parties, there was no question of adjustment of seized cash against the liability of appellants. They were liable to pay interest in terms of Section 234B on account of delayed payment on advance tax. In the wake of above discussion and findings, we are of the considered opinion that amount seized from the possession of Sarup Chand could not be treated as cash belonging to appellants from the date of seizure and it could not be adjusted on the said date against their tax liability. Revenue has correctly adjusted seized cash from the date of framing of assessment and charged interest u/s 234B on delayed payment of advance tax. As we are of the considered opinion that amount seized from the possession of Sarup Chand could not be treated as cash belonging to appellants from the date of seizure and it could not be adjusted on the said date against their tax liability. The Revenue has correctly adjusted seized cash from the date of framing of assessment and charged i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of a residential property. The surrendered income included cash seized from the bank account of Sarup Chand. 5. The Assessing Officer vide order dated 28.04.2009 framed assessment for the assessment year 2007-08 qua both the appellants herein. The assessment order was also passed with respect to tax liability of Sarup Chand. No tax liability was found of Sarup Chand though a sum of Rs. 43,73,136/- was found in his bank account. The said amount was claimed by appellants as their capital gain arising out of sale proceeds of house, thus, Assessing Officer requested Commissioner of Income Tax for adjustment of seized amount towards the tax liability of appellants. The Commissioner of Income Tax, Amritsar vide letter dated 26.06.2009 permitted Assessing Officer to adjust seized cash against tax liability of appellants. The Assessing Officer, accordingly, adjusted seized cash against the tax liability of appellants, however, Assessing Officer charged interest under Section 234B from both the appellants. 6. The appellants pleaded that amount recovered from the possession of Sarup Chand should be adjusted against self-assessed tax due under Section 140A read with Section 132B of 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thereafter the cash so seized was adjusted against the demand due from both the assessees. It cannot therefore be said that the cash seized from the bank account of Shri Sarup Chand belonged to both the assessees till a decision was taken by the AO in this behalf in the assessment order passed in the case of Shri Sarup Chand on 28.4.2009. Since the assessment order in the case of Shri Sarup Chand was passed on 28.4.2009, the AO has rightly adjusted the cash seized from the bank account of Shri Sarup Chand against the liability of both the assessees after 28.4.2009. 13. The claim of the assessee that cash seized from the bank account of Shri Sarup Chand should have been adjusted by the AO against self assessment tax due u/s 140A from both the assessees in terms of section 132B has no legs to stand. Section 132B permits adjustment of seized assets Including cash against the existing liability of the person from whom it is seized and not against the existing liability of others. In the present case, cash was seized from the bank account of Shri Sarup Chand and not from the possession or premises of either Kamla Mehta or Shelly Mehta. Therefore neither Kamla Mehta nor Shelly Mehta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise for the kind consideration of this Hon'ble Court. i) Whether in facts and circumstances of the case the Income Tax Appellate Tribunal had failed to consider that while passing the Assessment order dated 28th April, 2009, the Assessing Officer had accepted that the amount lying in the account of Sarup Chand in Standard Chartered bank belonged to the Appellant and hence, the same was liable to be adjusted towards the self-assessment tax under Section 140-A in terms of the letter and affidavit dated 3.8.2007 followed by letter dated 2.2.2008 by Sarup Chand and the note given by the Appellant in the return of income filed in pursuance to the notice under Section 153-A of the Income Tax Act contrary to the ratio of this Court in 334 ITR page 355?. ii) Whether in facts and circumstances of the case, the Income Tax Appellate Tribunal had failed to consider that adjudication of the assessing officer on 28th April, 2009 based on the affidavit and letter dated 3.8.2007 to the effect that the seized cash belonged to the assessee and not to Sarup Chand would relate back to the date of search and the amount seized which was assessed as undisclosed income of the Appellant would be deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (1) are discharged shall be forthwith made over or paid to the persons from whose custody the assets were seized. xxxx xxxx xxxx xxxx Explanation 2. For the removal of doubts, it is hereby declared that the existing liability does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII. [Emphasis Supplied] 12. From the perusal of aforesaid provision, it is evident that assets seized by Revenue are utilized towards tax liability arising under Income Tax Act, Wealth Tax Act, Expenditure Tax Act, Gift Tax Act, Interest Tax Act; liability determined on completion of assessment under Section 153A; liability determined on completion of assessment of the year relevant to the previous year in which search took place; the liability determined on assessment for the block period or liability of penalty or interest. 13. The Revenue during the course of search recovered cash which falls within the definition of assets. As per Section 132B, cash seized is required to be adjusted against tax liability. In the case in hand, cash was seized from the possession of Sarup Chand. The appellants as well as Sarup Chand during the course of search and therea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y appellants is misconceived. The Court is not oblivious of the fact that explanation 2 was inserted w.e.f. 01.06.2013 and assessment year in question is 2007-2008. 15. The respondent has charged interest under Section 234B and interest under said section is payable on delayed payment of advance tax. Section 234B further provides that assessment framed under Section 153A is a regular assessment and interest in case of regular assessment is payable from the first day of April next following such financial year to the date of regular assessment. The relevant extracts of Section 234B are reproduced as below: 234B. Interest for defaults in payment of advance tax. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent. of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one percent. for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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