TaxTMI 
TaxTMI 
2017 (6) TMI 731
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....ioner had taken a stand that such cash amount belonged to his son-in-law. However, subsequently, the petitioner wrote to the Revenue authorities on 29.03.2012 and took a stand that his statement was recorded during the search operation rather late at night. He was otherwise also unwell and that therefore, the statement made by him was not entirely accurate. He further stated that the said amount belonged to him and he was unable to explain the source of such amount. He, therefore, conveyed that the same may be treated as his income and the advance tax of such income may be calculated and thereafter, such advance tax liability be adjusted from the cash seized. He further stated that this request was made so that he does not have to pay any interest for non-payment of advance tax on such income of Rs. 70 lacs. Relevant portion of his letter dated 29.03.2012 reads as under: "7. Considering my mental position, I wish to purchase peace and mental rest with a request to consider the cash found from my premise. As per the provisions of the law in may case/hand. I therefore, request that under the law, the cash found if it is treated my income, then the appropriate tax thereon may please ....
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....the petitioner. By an order dated 24.02.2014, the Assessing Officer accepted the return of the petitioner and thereby accepted the petitioner's income for the year under consideration at Rs. 70 lacs. He also instituted penalty proceedings under section 271 AAA of the Act. 5. It appears that after passing of this order of assessment, the Assessing Officer, on the amount of Rs. 20,03,350/- of tax payable, levied interest of Rs. 74,122/- under section 234C of the Act. He also passed a separate order of penalty under section 271AAA of the Act levying penalty of Rs. 7 lacs. Such total sum of Rs. 27,77,472/- (which included the basic tax, interest under section 234C and penalty under section 271 AAA of the Act) was adjusted from the seized cash of Rs. 70 lacs. The petitioner does not dispute these computations and adjustments of course subject to the petitioner's pending appeal on the question of penalty. The petitioner would contend that, out of the total sum of Rs. 70 lacs, after adjusting the said sum of Rs. 27,77,472/-, the department had to refund a sum of Rs. 42,22,528/- to the petitioner instead of which, the department refunded a sum of Rs. 37,61,760/- on 24.11.2015. The....
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.... adjusted against the amount seized under section 132 of the Act. It was on this background, the assessee has requested for such adjustment concerning his advance tax liability. We may recall, soon after the search was carried out, the assessee conveyed to the Revenue that he admits the cash seized as his income, surrenders it for the purpose of tax and requests for appropriation of advance tax payable on such income from out of the seized amount. The Revenue, however, contended that the stand of the assessee was inconsistent and, in any case, the advance tax would not fall within the meaning of term 'existing liability'. 10.As pointed out by the counsel for the petitioner, a Division Bench of this Court had an occasion to deal with a somewhat similar issue in a tax appeal. By a judgement dated 26.11.2014 in case of Kamlesh Bhogilal Kandoi M/s. Bhogilal Mulchand Kandoi vs. A.C.I.T in Tax Appeal No. 55 of 2002, the Court considered following question of law: "(2) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the cash seized cannot be adjusted against the advance liability as requested by the appellant." 11.The Co....
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....mendment was given: " Application of seized assets under section 132B The existing provisions contained in section 132B of the Income Tax Act, inter alia, provide that seized assets may be adjusted against any existing liability under the Income Tax Act, the Wealth-tax Act, the Expenditure tax Act, the Gift tax Act and the Interest tax Act and the amount of liability determined on completion of assessments pursuant to search, including penalty levied or interest payable and in respect of which such person is in default or deemed to be in default. Various courts have taken a view that the term "existing liability" includes advance tax liability of the assessee, which is not in consonance with the intention of the Legislature. The legislative intent behind this provision is to ensure the recovery of outstanding tax/interest/penalty and also to provide for recovery of taxes/interest/penalty, which may arise subsequent to the assessment pursuant to search. Accordingly, it is proposed to amend the aforesaid section as to clarify that the existing liability does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII of the Act. This amendment....