9911796707
TMI Blog1997 (1) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... f its partner Shri Muni Lal on 18th Sept., 1987, when cash to the extent of Rs. 1,55,000 was seized. The assessee made a petition on 3rd Dec., 1987, making a request for the adjustment of the cash seized towards estimate of advance tax payable in the case of the firm and its partners for the asst. yr. 1988-89. As per the estimate of advance tax filed in the case of Shri Muni Lal, the tax payable as per the estimate filed in December, 1987 was Rs. 71,296 only and a subsequent request was again made that the balance due to the assessee may be adjusted against the advance tax instalment of the firm M/s National Feed Store and other partners S/Shri Ram Parkash and Raghunandan Lal. However, no order of appropriation of cash seized was passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cash seized during the search treating the same as advance tax payable. The learned first appellate authority accepted this plea of the assessees and directed that since the cash seized was lying with the Department, the same should have been adjusted against the quantum of advance tax payable by the assessees and the penalty at 4 per cent (2 per cent for each month of default) should be levied only in relation to the balance tax which remained payable after adjustment of advance tax payable as per the estimate filed by the assessees. He accordingly allowed partial relief to the assessees and penalties of Rs. 473, Rs. 470 and Rs. 634 were sustained in the cases of S/Shri Muni Lal, Ram Parkash and Raghunandan Lal respectively. The Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. That the learned CIT(A) has also rightly allowed assessees' appeals on the ground that since the amount found during the course of search was surrendered as income for the year under consideration and taxes accordingly be adjusted against the advance tax payments. 6. Smt. Hardeep Srivastava, the learned Departmental Representative, submitted that the cash seized in operation under s. 132 has to be retained consequent to passing of the order under s. 132(5) and it is required to be dealt with in accordance with the provisions of s. 132B of the Act. It was submitted that the legislature has specifically laid down the manner in which the assets retained under s. 132(5) are to be dealt with and it is not permissible for any authority ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty for default of two months only in relation to tax which remains payable after giving adjustment of advance tax which was requested by the assessees to be adjusted out of the cash seized from the premises of Shri Muni Lal, one of the partners. 8. We have heard the rival submissions and have also gone through the order passed by the AO as well as CIT(A). The term advance tax and its payment by its definition implies a voluntary action on the part of the assessee. Seizure from the assessee of a sum is not the same thing as payment of the said sum by the assessee. Seizure of the sum does not transfer the ownership in the said sum from the person from whom it is seized to the person who seizes it, unless an order of appropriation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharge of the liabilities referred to in cl. (i) and the assessee shall be discharged of such liability to the extent of the money so applied. (iii) The assets other than money may also be applicable for the discharge of any such liability referred to in cl. (i) and remains undischarged and for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the AO, or, as the case may be, TRO, under authorisation from the Chief CIT or CIT under sub-s. (5) of s. 226 and the AO, or, as the case may be, TRO may recover the amount of such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule. (2) Nothing contained in sub-s. (1) shall preclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in line with the provisions of s. 132B r/w s. 132(5)(ii), (iia) and (iii) of the Act because it is an unascertained liability the very levy of which was challenged by the assessees. Further a liability to pay penalty which is likely to undergo different kinds of challenges before it becomes finally payable cannot take precedence for discharge over the past and/or existing tax liability which may be quite ascertained. Accordingly, we are of the opinion that the grievance of the Revenue is quite correct and consequently, the direction of the CIT(A) to the AO to levy penalty under s. 271(1)(a) on the tax payable after giving credit of advance stax estimated out of the seized amount from the assessee is hereby vacated. 9. In the result, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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