TMI Blog2003 (2) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... ished returns on 27-2-1990 declaring total income at ₹ 12,87,470/-. The sources of the income shown were share income from M/s PDT Trading Company, other sources such as N.S.C. interest with agricultural income. The assessee did not maintain any regular Books of Accounts. However, the Balance-sheet was furnished. The assessee did not dispute that the income from the other sources was also from and out of worli-matka' business. 3. The search and seizure operations under Section 132 of the Act, were carried out on 30-11-1989. During the course of search and seizure proceedings cash worth ₹ 16,88,400/- was found with the assessee and ₹ 2,10,000/- with his son Mr. Harish. In addition, Special Bearer Bonds worth Pis. 14,10,000/- with some other papers; indicating worli-matka transactions carried out by the assessee including some investment in the construction of the house in the name of Smt. Kaushaliyabai (maternal aunt of the assessee), were also noticed. 4. The statement of the assessee was recorded during the course of search and seizure operation. In the statement, he has stated that cash in his possession belonged to himself, his first wife Saraswatiba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-1-1990 had requested to adjust the cash found at the assessee's business premises against the advance tax payable. According to the assessee, this amount had been adjusted, no interest could have been charged under the said sections. We are, therefore, of the opinion that the C.I.T.(A) was not justified in rejecting the claim of the assessee and not deciding the issue on merits. We are, therefore, of the opinion that the ground of appeal No. 6 raised before the C.I.T. (A) should have been decided by him on merits after taking into consideration the assessee's request to the C.I.T. on 19-1-1990. We hold that the assessee has challenged the very chargeability of interest and as such this aspect had to be taken into consideration by the C. I. T. (A). He will also take this aspect of the case into consideration as to if the department had adjusted the cash available to it against the advance tax payable whether any interest under Sections 234A, 234B, 234C could be charged at all. In this regard, the order of C.I.T. (A) is set aside and he is directed to take all the aspects into consideration and decide the ground of appeal No. 6 before him after affording reasonable opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en adjusted on 31st March, 1990 i.e. the day on which the order under Section 132(5) of the Act was passed since the liability of the interest was to commence from 1st April, 1990. The Tribunal was thus pleased to hold that the amounts seized was liable to be treated as adjusted towards advance tax liability on 30-3-1990 and directed for fresh working of interest, if found chargeable under any of the provisions of the Act. With these directions, the matter was remitted back to the Assessing Officer for recalculating the interest chargeable, if any, in accordance with law following principles of natural justice, 11. Being aggrieved by the aforesaid order the Revenue has filed this Appeal under Section 260A of the Act raising a substantial question of law indicated in the opening para of this judgment. STATUTORY SCHEME 12. In order to appreciate the rival submissions advanced by the parties to the appeal, it is necessary to notice few statutory provisions of the Act, referred to hereinafter. 13. Section 207 provides that in accordance with the provisions of Sections 208 to 219 tax shall be payable in advance during any financial year in respect of the total income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer is of the view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate the tax on such income or part, as the case may be, as if such income or part were the total income chargeable to tax at the rates in force in the financial year in which the assets were seized and may also determine the interest or penalty, if any, payable or imposable accordingly : Provided further that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in Clauses (ii), (iia) and (iii) or any part thereof, the Assessing Officer may, with the previous approval of the Chief Commissioner or Commissioner, release the assets or such part thereof as he may deem fit in the circumstances of the case . 14. It would thus be clear from the aforesaid provisions that after the assets are seized, Income Tax Officer has to proceed in accordance with the procedure prescribed under Sub-section (5) of Section 132. Not only he has to estimate the undisclosed income in a summary manner, but has to calculate the amount of tax on the income so estimated determining the amount of interest pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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