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TMI Blog2017 (11) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 4,90,899/- allegedly belonging to the appellant stood seized by the department on 31.05.1990 and appropriated vide order dated 23.11.1990 under Section 132(5) of the Act ? (iv) Whether, the term 'existing liability under the Act' has been correctly interpreted and applied in the facts and circumstance existing in the present case ? 3. We have heard Sri Amit Mahajan, learned counsel for the appellant and Sri Piyush Agarwal, learned Senior Standing Counsel for the Department. 4. The brief facts of the case are that search and seizure operation under Section 132(1) has held on the office premises of Chief General Manager, Dispatch and Coordination, Central Coal Field Ltd., Ranchi on 30.07.1990. During the course of search, cash amounting to Rs. 4,90,889/- was seized. The said amount which was found during the course of search, was for purchase of coal in the office of Chief General Manager, Central Coal Field Ltd., Ranchi. 5. An order under Section 132 (5) of the Income Tax Act, 1961 (hereinafter referred as 'The Act') has been passed in the name of M/s Gyan Chand Mahavir Prasad Jain Industries, Firozabad of which the sole proprietor was Mahabir Pras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able 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 Income-tax 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." 7. After the order passed under Section 132(5) of the Act, a notice under Section 143(2) has been issued and in pursuance thereto the appellant-assessee appeared and after considering the submission of the assessee, the assessing authority has passed an order dated 02.03.1993 under section 143(3) of the Act by which the assessing authority has treated the recovered cash as undisclosed investment and accordingly the assessing authority has determined the taxable income at Rs. 5,34,120/-. A demand notice has been issued under Section 156 wherein a demand of Rs. 4,20,914/- was raised. The said amount comprised tax at Rs. 2,73,332/- interest unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of furnishing of the return; or (b) where no return has been furnished, ending on the date of completion of the assessment under section 144, on the amount of the tax on the total income as determined under sub-section (1) of section 143, and where a regular assessment is made, on the amount of the tax on the total income determined under regular assessment, as reduced by the amount of,-- (i) advance tax, if any, paid; (ii) any tax deducted or collected at source; (iii) any relief of tax allowed under section 90 on account of tax paid in a country outside India; (iv) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section; (v) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and (vi) any tax credit allowed to be set off in accordance with the provisions of section 115JAA or section 115JD. Explanation 1.--In this section, "due date" means the date specified in sub-section (1) of Section 139 as applicable in the case of the assessee. Explanation 2.--In this sub-section, "tax on the total income as determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded. (5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years. 234B. Interest for defaults in payment of advance tax.- (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-section (1) of section 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of such assessment year and ending on the date of making such application, on the additional amount of income-tax referred to in that sub-section; (b) where as a result of an order of the Settlement Commission under sub-section (4) of section 245D for any assessment year, the amount of total income disclosed in the application under sub-section (1) of section 245C is increased, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of such order, on the amount by which the tax on the total income determined on the basis of such order exceeds the tax on the total income disclosed in the application filed under sub-section (1) of section 245C; (c) where, as a result of an order under sub-section (6B) of section 245D, the amount on which interest was payable under clause (b) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly; (3) where, as a result of an order of reassessment or recomputation under section 147 or section 153A, the amount on which interest was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. The appellant has explained that he has authorised by one Mahesh Chandra Bansal of Firozabad for lifting the coal from CCL, Ranchi and accepted that he has no knowledge about any purchase of the said drafts. In his submission, the person authorised has further explained that he did not know who had made the said investment in the bank. In fact, he had denied the transaction. 14. This stand of the authorised person was challenged and thereafter a fresh explanation has been given that the appellant has not clearly given any authority to the said authorised person namely Mahesh Chandra Bansal. The assessing authority has noticed the contradiction in the statement of the authorised authority in the changed stand by the appellant. The assessing authority had noticed that Mahesh Chandra Bansal had denied the allegation of appellant. He came to the conclusion that since Mr. Bansal denied having done any work with the assessee and having made any investment on behalf of the assessee or any other person while purchasing of the said drafts and since no plausible explanation has been furnished about the investment in the purchase of drafts and stands clearly establishes that the investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the name of the appellant and same were deposited by the appellant with affidavit and application with own signature is itself a sufficient proof that the appellant has invested a sum of Rs. 4,90,899/- from unaccounted source and therefore assessing authority has fully justified in making the addition of Rs. 4,90,899/-. 17. The CIT(A), therefore, arrived at the conclusion that in view of the aforesaid facts and the determination of the addition by the assessing authority, the appellant is liable to pay interest under Section 234A of the Act. 18. While affirming the view of imposition of interest under Section 234A and 234B, the CIT(A) has relied upon several decisions of the High Court as well as of the Hon'ble Supreme Court which are discussed in detail in the order of the CIT(A) dated 30.03.1993. The CIT(A) has held by following the decisions that levy of interest is mandatory in the facts and circumstances of the present case. He has held that the moment it is found that the legitimate tax has not been paid by specified date interest become payable. He has further held that there is subjectivity or discretion in the matter of levy of such interest under Section 234A a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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