TMI Blog2019 (11) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... en made on that very day, therefore, it is not a case of deferment of the income, as the liability to pay the advance tax in the case of the assessee arose only at the moment the income was surrendered by the assessee, i.e., as on 31st March, and not prior to that. Since the liability to pay the advance tax has arisen on 31st March therefore, it cannot be regarded to be a case of deferment of income tax. Therefore, the interest u/s 234C cannot be levied and there has been a mistake apparent on record in the order of the Assessing Officer while levying the interest u/s 234C of the Act. Appeal of the assessee is partly allowed. - ITA No.127/LKW/2017 - - - Dated:- 5-11-2019 - Shri. A. D. Jain, Vice President And Shri T. S. Kapoor, Accountant Member For the Appellant : Shri Rakesh Garg, Advocate For the Respondent : Shri A. K. Bar, CIT (DR) ORDER PER A. D. JAIN, V.P.: This is assessee s appeal against the order of the ld. CIT(A)- IV, Kanpur, dated 7/12/2016 for assessment year 2011-12, taking the following grounds: 1. Because the CIT(A), has erred on facts and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax had not been deposited, the order passed by the CIT(A) is bad in law and be quashed. 9. Because the CIT(A) has failed to appreciate that the assessee had moved three letters of three different dates i.e., 07.04.2011, 07.11.2012 and 17.04.2013 requesting for adjustment of the amount seized towards payment of tax liability in terms of section 132, the amount seized was bought to be adjusted against the tax liability, arising at, the time of filing of return on the income surrendered, the CIT(A) has erred in holding otherwise, the 'appeal order passed' by the CITA) be quashed. 10. Because the authorities below have erred on facts and in law in charging interest under section 2348 and 234C of the Act without adjusting the amount of cash seized at the time of search, from the date when the request was made which if done, there would be no liability to pay interest, the interest charged be deleted. 11. Because without being prejudice to the above, the CIT(A) has erred in law in not giving any finding, on the merits of the case, which is contrary to the principles of judicial discipline. 2. This is a recalle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ha Mohan Purshottam Das Agarwal and Shri Amar Nath Agarwal, Director of the concern, Radha Mohan Purshottam Das Jewels Pvt. Ltd. was recorded, and Shri Kailash Nath Agarwal, partner of the assessee firm had surrendered ₹ 7,00,00,000/- as undisclosed income to be taxed, in the hands of the family members, and Shri Amar Nath Agarwal had disclosed a sum of ₹ 8,00,00,000/- to be taxed in the hands of his family members. On the disclosed amount of ₹ 7,00,00,000/-, the D.I. Wing had taken three cheques of ₹ 75 lakhs each from Shri Kailash Nath Agarwal, towards the estimated tax liability. 7. The assessee filed its return of income declaring an income of ₹ 5,17,63,360/-, including the proportionate undisclosed income of ₹ 3,50,00,000/- (50%). The Assessing Officer completed the assessment on a total income of ₹ 5,18,61,380/-, after adding a sum of ₹ 98,000/- as disallowance out of expenses. Accordingly a tax liability of ₹ 1,24,91,886/- was created, as per details given below: S. No. Particulars As per Notice of Demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sections 234B and 234C of the Act. The ld. A.R. of the assessee further submitted that the Lucknow Bench of the Tribunal, in the group cases, in ITA No.679 to 687/LKW/2017, vide order dated 8/8/2017, dealt with this issue of charging of interest under section 234B and 234C of the Act, and directed the Assessing Officer to recomputed the interest under section 234B of the Act. Thus, following the same view, the issue relating to levy of interest in the case of the assessee may be decided. 11. The ld. D.R., on the other hand, has placed reliance on the order of the ld. CIT(A). 12. Heard. We find that this issue is squarely covered by the order of the Lucknow Bench of the Tribunal, vide order dated 8/8/2017, wherein the Tribunal, in the case of the Radha Mohan Purshottam Das Agarwal Group, consisting of nine appeals, has dealt with the issue relating to charging of interest under section 234B and 234C of the Act, holding as under: 4. Now the next issue arising in ground No. 8 relates to the charging of interest u/s 234B and 234C of the I.T. Act. So far the interest u/s 234C is concerned, learned A.R. before us vehemently co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance tax payable by the assessee. We noted that the Revenue has allowed the credit to the assessee as claimed in each of the hand only after the completion of the assessment i.e. vide order dated 20/06/2014 and accordingly levied the interest u/s 234B till the date of payment that the Revenue has taken to be the date when they made the adjustment. We noted that this issue is duly covered by the decision of Delhi Tribunal in the case of Mahabir Prasad Gupta vs. DCIT in I.T.A. No.1151/Del/2008, order dated 14/10/2011 in which this Tribunal on the issue of levy of interest u/s 234B held as under: 6. We have duly considered the rival contentions and gone through the record carefully. In order to appreciate the controversy more logically, it is imperative upon us to have a look on section 132B(i) which prescribes the mode of application of seized assets or requisitioned assets. The portion relevant for the purposes of present appeal reads as under: 132B. (1) The assets seized under sec. 132 or requisitioned under sec. 32A may be dealt with in the following manner, namely: (i) the amount of any existing liability under this Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid the tax on 12.4.2006 and 12.09.2006. The ITAT in the case of Nikka Mal Babu Ram (supra), has made a lucid enunciation of law and facts on this issue, and it is worth to take note of the discussion made by the ITAT which reads as under: 9. It is well understood that as per section 4 of the Act, an assessee is chargeable to income-tax in respect of his total income. Sub-section (2) of section 4 prescribes that the income-tax so chargeable shall be deducted at source or paid in advance, where it is so deductible or payable under any provision of the Act. We have observed earlier that advance tax liability is governed by sections 208 to 210 of the Act. Similarly, section 140A provides for payment of self-assessment tax on the basis of any return of income required to be filed by the assessee. The relevant provisions also prescribe the dates and the amount of tax required to be paid by an assessee. Therefore, the expression 'existing liability in section 132B(1)(/) cannot be read to exclude a particular tax liability, if it can be shown to have existed on a particular date. If the liability to pay advance tax had arisen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. The Hon'ble High Court specifically noted that it is only after an order under section 132(5) is passed that the assessee can make a request that the seized amount which is sought to be released in his favour be adjusted or appropriated towards the liability to pay advance tax. Though, in the context of the present assessment year before us, the provisions of section 132(5) are not applicable and therefore, strictly speaking, the ratio of the judgment of the Hon'ble Madhya Pradesh High Court does not apply, so however it is pertinent to observe that the Hon'ble High Court has not read any blanket prohibition in the Act against adjusting the seized assets against liability for payment of advance tax. Therefore, there is no justification for the CIT (Appeals) to rely upon the order of the Madhya Pradesh High Court in the case of Ramjilal Jagannath (supra) and deny the claim of the assessee . 8. We do not find any disparity on facts, therefore, respectfully following the order of the Co-ordinate Bench and in view of the above discussion, we allow the appeal of the assessee and direct the department to give credit of ₹ 60,40,000 to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake apparent on record in the order of the Assessing Officer while computing the interest u/s 234B of the Act. We accordingly allow ground No. 8 of the appeal. 13. Thus, whether interest under sections 234B and 234C of the Act is to be charged, or not, has been considered by the Tribunal in the case of the Radha Mohan Purshottam Das Agarwal Group, consisting of nine appeals, on facts exactly similar, mutatis mutandis, to those present in the case of the assessee presently under appeal and the Tribunal has decided the issue in favour of the assessees, vide order dated 8/8/2017. Following this view taken by the A Bench of the Lucknow Tribunal in ITA Nos.679 to 687/LKW/2017, we set aside the order of the ld. CIT(A), and direct the Assessing Officer to compute the interest u/s 234B in accordance with the law, if at all it is leviable, only till the date when the assessee made an application to the Department for the adjustment of the cash seized towards the income tax liability. To that extent, we find there is a mistake apparent on record in the order of the Assessing Officer while computing the interest u/s 234B of the Act. With regard to chargi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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