TMI Blog2012 (4) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 132B(1)(i) of the Act does not have any relevance - 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 - These orders itself stated that penalty proceedings under section 271(1)C of the Act are being initiated and accordingly such proceedings have been initiated and are pending - When statute recognizes the entitlement of the respondents to apply the asset seized towards the tax liability determined,which includes penalty, it is puerile to contend that the statute obliges the respondents to return the same on determination of the tax liability and before levying the penalty - Held that: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey also filed Ext.P4 series of appeals against Ext.P2 series of orders, which are pending before the appellate authority, the 3rd respondent. 3. Subsequently, petitioner made Ext.P5 dated 5/8/09 requesting the 2nd respondent to return the gold since they have already paid the entire tax due under Ext.P2 series of orders. To that representation, they were given Ext.P6 reply requiring them to contact the assessing officer. Subsequently, Ext.P7 dated 18/11/11 was issued by the 1st respondent informing the petitioner that their request cannot be considered before the disposal of Ext.P4 series of appeals. It was in these circumstances, the writ petition was filed mainly contending that the petitioner having discharged the tax liability due und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of which are Ext.P9 series. It is contended that since payments have been made within thirty days as per Ext.P8, there is no liability to pay interest as per the provisions contained in Section 220(2) of the Income Tax Act. As far as the penalty proceedings initiated against the petitioner as per Ext.P10 and similar other notices issued on 31/12/10 are concerned, the contention of the petitioner is that on the issuance of the notices, Ext.P10(a) and similar other replies have been given. It is also contended that the pendency of the penalty proceedings cannot be a justification for refusing to release the gold seized on 15/01/2009 and that such withholding is not permitted in terms of the provisions contained in Section 132B of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the respondents for refusing release of the gold is that the request cannot be considered before the disposal of the first appeal. However, in the statement filed, the justification offered is the pendency of the penalty proceedings evidenced by Ext.P10 and similar other notices. During the course of the hearing also, the ground urged for withholding the gold seized from the petitioner is the pendency of penalty proceedings. Therefore, the correctness of the stand taken by the respondents in refusing to release the gold to the petitioner has to be decided with reference to the pendency of the penalty proceedings under Section 271(1)(c) of the Income Tax Act, 1961. 9. The case set up by the petitioner is that as at present, the liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter XIV-B for the block period, as the case may be] including any penalty levied or interest payable in connection with such assessment) and in respect of which such person is in default or is deemed to be in default, may be recovered out of such assets: 11. A close reading of Section 132B(1)(i) of the Act shows that it consists of two parts. The former part provides for application of the seized assets against "the existing liability under the Income Tax Act, Wealth-tax Act, Expenditure-tax Act, Gift-tax Act and the Interest-tax Act. Thus it is clear that this part of clause (i) provides for application of the seized assets against "existing liability" under the aforesaid Acts only. On the other hand, the latter part of this clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that so far no penalty has been levied on them and that the section does not entitle the respondents to retain the assets seized, towards an anticipated future liability such as penalty to be levied. Therefore, they contend that the gold seized is liable to be returned to them. 13. Having considered this contention of the petitioner, I should confess my inability to accept the plea. The search under section 132 of the Act led to the seizure of gold and the seizure resulted in the determination of liability of tax by virtue of the assessment orders passed against the petitioner. These orders itself stated that penalty proceedings under section 271(1)C of the Act are being initiated and accordingly such proceedings have been initiated and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
