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TMI Blog2025 (1) TMI 1227X X X X Extracts X X X X X X X X Extracts X X X X ..... sh seized as part of his total income and computed the self-assessment tax liability corresponding to said income. Assessee communicated to the AO for offering of cash seized as income and requested for adjusting the tax due from the cash seized as the assessee did not have liquidity to discharge the tax liability. In the instant case before us, the learned counsel could not readily substantiate evidences in support of existence of identical circumstances, therefore, we feel it appropriate to set-aside the finding of the CIT(A) on issue in dispute and restore the matter back to the file of the AO for determining the issue of adjustment of self-assessment tax liability after verification of application filed by the assessee seeking such adjustment & other documentary evidences to support that circumstances identical to the case of Arun Banal [2023 (6) TMI 39 - ITAT DELHI] existed in the case and then decide the issue in accordance with law. Interest charged u/s 220 in respect of regular tax demand consequent to assessment order - The assessee cannot be held as assessee in default for non-payment of the tax on time and no interest under section 220 can be charged from the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding source of cash found, the matter was referred to the Income-tax authorities, and consequently, a warrant of authorization for search action under section 132 of the Income-tax Act, 1961 ( in short the Act), was executed on 05/04/2014. During the course of search proceeding, statement of the assessee was recorded under section 132(4) of the Act, but the assessee again failed to furnish source of the cash and hence cash found was seized by the Income tax authorities. Thereafter, proceedings under section 153A of the Act were initiated and the assessee was asked to file return of income. The assessee filed return of income under section 153A of the Act on 22/07/2016 declaring a total income of ₹ 40,12,100/- but the said income did not include the cash of ₹ 10,83,260/- seized during the course of search action. During the course of assessment proceeding, the assessee accepted the cash seized of ₹ 10,83,260/- as his undisclosed income and requested vide letter dated 10/04/2015 and 10/02/2016 for adding the said sum to the total income and adjustment of cash seized against advanced tax liability. Accordingly, total income was computed at ₹ 50,95,360/- in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ific amendment by way of Explanation- 2, inserted below section 132B, though Finance Act 2013, with effect from 01/06/2013, which states that for removal of doubts, it is hereby declared that the 'existing liability' does not include 'advanced tax' payable. Thus, the explanation has clearly put in place an embargo against adjustment of seized cash against the advance tax liability of the assessee being advance tax payable not included as an existing liability, hence the decision of the Hon'ble Punjab and Haryana High Court in the case of Ashok Kumar (supra) is not applicable. Furthermore, the Hon'ble Punjab and Haryana High Court in Cosmos Builders and Promoters (ITA No. 425 of 2014) has held that the insertion of Explanation 2 to Section 132B is prospective. Given that the search action in this case occurred in the financial year 2014--subsequent to the insertion of Explanation 2--its provisions are applicable to the facts of this case. Thus, the prayer of the assessee for adjustment of the seized case against advanced tax liability is not permissible and accordingly relevant prayer of the assessee is rejected. 4.1 The second prayer has been made by the assessee for adjusting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deserves to be deleted. We, accordingly, delete the addition." 4.2 Further, we find that Kolkata bench of the Tribunal in the case of ACIT vs Narendra N Thacke (2017) 82 taxmann.com 64 has held that the action of the assessee in seeking to adjust the seized cash with the self-assessment tax payable along with the return of income is in order and in accordance with section 132B of the Act as admittedly self-assessment tax payable become existing liability on the part of the assessee. In our opinion, once the assessee accepts the asset in the form of cash as unexplained and offers the same for tax, the revenue can't sit over his request and on the other hand charge interest for nonpayment of taxes. Until, the cash seized is adjusted against the taxes, the Revenue is mere custodian and required to adjust against the taxes as and when requested for adjustment and any delay on the part of the Revenue, the assessee should not be penalized. 4.3 In view of the precedents discussed above, it is evident that self assessment tax liability could be treated as part of the 'existing liability' , but in the instant case, the assessee has apparently not included the said amount of the cash sei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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