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TMI Blog2017 (8) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... vance tax payment that was due from the Petitioners (hereafter 'Assessees')? 2. The facts in brief leading to the filing of the present petitions are that, during the course of a search carried out under Section 132B of the Income Tax Act, 1961 ('Act') on 27th September 2011, cash was found in the premises of both the Assessees. As far as Ms. Latika Datt Abbott (the Petitioner in W.P. (C) 6491 of 2016) is concerned, the cash seized was to the extent of Rs. 1.18 Crores. In the case of Ms. Charu Datt Bhatia (the Petitioner in W.P. (C) 6588 of 2016), the cash seized was Rs. 96,50,000/- in the aggregate. 3. Ms. Abbott offered an additional income of Rs. 1,25,00,000/- for AY 2012-13 the year under consideration. She filed a letter dated 13th D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed her return on 30th March 2013 declaring an income of Rs. 5,25,56,564/-. In the said return the additional income of Rs. 1,50,00,000/- was included and credit of Rs. 96,50,000/- was claimed as payment of tax on 15th December 2011 in view of the letter dated 13th December 2011 submitted to the Department. Accordingly, the computation of interest under Section 234A, 234B and 234C was made taking credit of Rs. 96,50,000/- as tax deposited on 15th December 2011. 6. The return filed by Ms. Bhatia was processed by an intimation dated 3rd July 2013 where the declared income of Rs. 5,25,56,564/- was accepted. However, the credit of Rs. 96,50,000/- was not given. Accordingly, a demand of Rs. 1,21,22,630/- was raised which included levy of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act for the period from the date on which the advance tax was due till the date of the above adjustment. 9. The case of the Assessees is that the Department ought to have adjusted the cash seized towards the advance tax liability and since this request was made soon after cash was seized, there was no justification in requiring the Assessees to pay interest on account of failure to pay advance tax. 10. During the pendency of these petitions, the Central Board of Direct Taxes ('CBDT') has come out with Circular No. 20/2017 dated 12th June 2017. This Circular clarifies that Explanation 2 to Section 132B of the Act, inserted with effect from 1st June 2013 and which states that "existing liability does not include advance tax payable in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessees themselves, the adjustment is made against the determined tax liability. 13. The Court is unable to accept the above submission of learned counsel for the Department. Circular No. 20/2017 makes clear the intention of the Department not to contest those cases where the Assessees had been given the benefit of adjustment of seized cash against the advance tax liability. There cannot be a situation where for those Assessees who have continued to remain in default of payment of advance tax the benefit of Circular No. 20/2017 is extended but not to those defaulting Assessees whose request made prior thereto for adjustment of the seized cash against advance tax dues is refused and adjustment is made against the tax demand prior ..... X X X X Extracts X X X X X X X X Extracts X X X X
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