9911796707
TMI Blog2012 (4) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... h, 4136.83 grams of gold was seized and Ext.P1 is the panchanama prepared during the course of the search. Following the search and seizure, by Exts.P2 to P2(f) orders issued on 31/12/2010, assessment for the years 2003-04 to 2009-10 was completed under Section 153C of the Income Tax Act. In these orders, it is also stated that penalty proceedings under section 271(1)C of the Income Tax Act are being initiated. Later the assessment orders for the assessment years 2003-04 to 2006-07 were rectified as per Exts.P2(g) to P2(j). 2. Case of the petitioner is that the liability under Ext.P2 series of orders were discharged by remitting the tax due as per Ext.P3 series of bank receipts. It is stated that they also filed Ext.P4 series of appeals ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued on 19/1/2012. Thirdly, it is contended that the petitioner has an interest liability, the total of which is Rs. 34,129 in terms of the provisions contained under Section 220(2) of the Income Tax Act. 5. In the reply affidavit filed, in so far as Ext.P8 rectification orders are concerned, petitioner says that the tax liability under Ext.P8 series of orders have been discharged by them as per Ext.P9 series of receipts. In so far as the liability for interest, which is pointed out in the statement filed by the respondents is concerned, contention of the petitioner is that Ext.P8 series orders were issued on 19/1/12 and that the amounts due thereunder were paid on 28/1/12, the receipt of which are Ext.P9 series. It is contended that since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 220(2) for belated payment. Therefore, the case of delay in payment and the liability for interest pleaded by the respondents is not with reference to Ext.P8 series of rectification orders for the assessment years 2005-06 to 2008-09 alone but also in relation to Ext.P2 series of orders. Therefore, the fact that liability under Ext.P8 series has been discharged by Ext.P9 series of receipts does not by itself indicate that the petitioner has no liability to pay interest under Section 220(2) of the Income Tax Act. 8. Now what remains is the legality of the refusal of the respondents to release the gold seized. In Ext.P7 communication issued on 18/11/11, the reason stated by the respondents for refusing release of the gold is that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication of seized or requisitioned assets. 132B (1) The assets seized under section 132 or requisitioned under section 132A may be dealt with in the following manner namely: (i) the amount of any existing liability under this Act, the Wealth-tax Act, 1957 (27 of 1957), the Expenditure-tax Act, 1987 (35 of 1987), the Gift-tax Act, 1958 (18 of 1958) and the Interest-tax Act, 1974 (45 0f 1974) and the amount of the liability determined on completion of the assessment [under section 153A and the assessment of the year relevant to the previous year in which search is initiated or requisition is made, or the amount of liability determined on completion of the assessment under Chapter XIV-B for the block period, as the case may be] inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability to be determined in an assessment. Similarly the expression "penalty levied" should also be read as penalty to be levied in a proceedings under section 271(1)C of the Act. 12. In so far as this case is concerned, the respondents do not contend that the petitioner had any existing liability and therefore, the first part of section 132B(1)(i) of the Act does not have any relevance. As already stated above, the contention of the petitioner is that the section entitles the respondents to apply the assets seized only towards existing liability, liability determined, penalty levied and interest payable. According to them, they have already paid the tax and interest due from them and that so far no penalty has been levied on them and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the absence of such existing liabilities, the assets will have to be returned to the person concerned. This interpretation will render the latter part of section 132B(1)(i) meaningless and such a situation cannot be accepted. Therefore, I am of the view that the section entitles the respondents to retain the gold in question with them until penalty is levied and apply the same towards the liability so determined, provided the petitioner is in default or deemed to be in default. 14. As far as the judgments in Naresh Kumar Kohli v. Commissioner of Income Tax (266 ITR 553) and Commissioner of Income Tax v. Mukundray Kumar Shah (278 ITR 475) relied on by the learned counsel for the petitioner are concerned, facts of these cases show tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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