TMI Blog2021 (9) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... sions. Assessee shall be liable to pay interest u/s 234B on tax so computed on the income so declared in return of income filed on 17.09.2013, till the date of filing of return of income on 17.09.2013. AO is directed to compute liability of interest u/s 234B to this effect. Assessee while filing application with Settlement Commission offered additional income and the assessee has claimed that it discharged its entire tax and interest liability, by making payments towards tax and interest on 18.03.2014. The assessee has claimed that it was not given appropriate credit for payment of taxes, and form no 26AS/challans are produced before tribunal, the AO shall verify and give credit of payment of appropriate taxes claimed to be so paid by assessee on 18.03.2014, after due verification. Then, obviously if taxes stood paid on this date viz. 18.03.2014 as claimed by assessee even on additional income offered in SOF filed with Settlement Commission, no further liability u/s 234B can be fastened beyond this point of time viz. 18.03.2014 to the extent the taxes stood paid(which is subject to verification by AO) - assessee shall be liable to pay interest u/s 234B on tax so computed on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Member And Shri Ramit Kochar, Accountant Member For the Appellant : Shri Ashish Bansal, Advocate For the Respondent : Shri Shantanu Dhamija, CIT, DR ORDER PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal filed by the assessee has arisen from the appellate order dated 29.09.2016 passed by Ld. Commissioner of Income Tax(Appeals)-II, Lucknow(hereinafter called the CIT(A) ), for assessment year(ay) 2011-12, the appellate proceedings had arisen before learned CIT(A) from consequential order dated 21.10.2015 passed by ld. Assessing Officer (hereinafter called the AO ) to give effect to the order dated 23.09.2015 passed by Settlement Commission u/s 245D(4) of the Income-tax Act, 1961 (hereinafter called the AO ) . We have heard both the parties through video conferencing mode through Virtual Court. 2. The grounds of appeal raised by assessee in memo of appeal filed with Income- Tax Appellate Tribunal, Allahabad Bench, Allahabad(hereinafter called the tribunal ), reads as under: 1. BECAUSE the CIT(A) has erred in law and on facts in upholding the demand that had been raised against the appellant , in terms of order dated 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no bearing, on the facts of the present case and view taken by the CIT(A) , so as to deny the appellant s claim for cancellation of interest amounting to ₹ 57,12,930/- (under section 234B) is wholly erroneous. 8. BECAUSE the order appealed against is contrary to facts, law and principles of natural justice. 3. The short question(s) which has arisen in this appeal filed by the assessee is with respect to interest levied by Revenue u/s 234A and 234B of the 1961 Act. We have heard in details both the rival parties through videoconferencing through Virtual mode. The brief facts of the case are that the assessee is HUF and Shri Suresh Chandra Purwar is claimed to be karta of the assessee. The search and seizure operations u/s 132(1) of the 1961 Act was carried out by Revenue against Shri Suresh Chandra Purwar and his family members and entities in the group, on 25.02.2011. The consequential order in this case was passed by AO on 21.10.2015, to give effect to the order dated 23.09.2015 passed by Settlement Commission u/s 245D(4) of the 1961 Act . The appeal filed by the assessee before ld. CIT(A) was dismissed by ld. CIT(A), vide appellate order dated 29.09.2016 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return of income filed on 17.09.2013 for ay: 2011-12, which included income of ₹ 50,33,000/- which is purported to be towards income declared owing to high denomination currency notes of ₹ 1000/- each which as per assessee s letter dated 17.09.2013 (this letter is claimed by assessee to have accompanied return of income ), remained unexplained, which was part of cash amounting to ₹ 4,13,07,500/- seized on 25.02.2011 from residential premises situated 68, Zero Road, Allahabad, U.P. (₹ 50,33,000/- high denomination currency notes of ₹ 1000/- each seized from first floor of residential premises at 68, Zero Road, Allahabad, U.P. occupied by Shri Suresh Chandra Purwar and his wife for their residence ) . The name of the assessee being a separate tax unit HUF is not appearing in inventory of cash found and seized from the residential premises at 68, Zero Road, Allahabad, U.P. on 25.02.2011 The assessee has claimed that Shri Suresh Chandra Purwar is the karta of the assessee HUF.The amount of tax and interest aggregating to ₹ 19,15,050/- remained unpaid by the assessee in the return of income filed on 17.09.2013. It is pertinent to mention that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 1961 Act, computing a sum of ₹ 1,47,39,270/- being further payable by assessee towards tax and interest u/s 234A and 234B of the 1961 Act. The assessee filed rectification petition u/s 154 of the 1961 Act on 13.11.2015 with AO against the order dated 21.10.2015 passed by AO raising challenge to leviability of interest u/s 234A and 234B of the 1961 Act, which rectification petition u/s 154 stood dismissed by AO vide orders dated 17.11.2015. The assessee then filed an appeal with ld. CIT(A) on 15.12.2015 against the consequential order dated 21.10.2015 passed by the AO to give effect to the order dated 23.09.2015 passed by Settlement Commission u/s 245D(4), which appeal stood dismissed by ld. CIT(A) vide appellate orders dated 29.09.2016. The assessee has claimed that it filed letter dated 17.09.2013 along with return of income filed on 17.09.2013, which is placed in paper book at page number 57-63 . The assessee is also relying on the letter dated 06.04.2011 which was claimed to be filed by Shri Suresh Chandra Purwar before the Director of the Income-tax(Investigation), Kanpur, in which it is claimed that offer to adjust cash seized during search operations against the tax l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter dated 06.04.2011 that the said cash belonged to parents of Shri Suresh Chandra Purwar, while Settlement Commission rejected all contentions of the assessee and held that ₹ 2,60,49,000/- cash found and seized from residence and lockers to be income of the assessee for ay: 2011-12, in the order passed u/s 245D(4) of the 1961 Act. Shri Suresh Chandra Purwar in the said letter dated 06.04.2011 at para 16 stated that as soon as he is provided with the copies of seized material and statements, he shall make a fair and binding estimate of his income and then after adjustment of cash seized against tax liability, the balance cash should be returned to him . Thus, the offer was made by Shri Suresh Chandra Purwar to adjust the cash seized against the tax liability arising out of the correct and binding estimate of the tax liability made by him and other taxpayers in the group . It is also observed that in para 20 of the said letter dated 06.04.2011, Shri Suresh Chandra Purwar stated that the assessee Suresh Chandra Purwar(HUF) is a separate taxable entity engaged in the business of dealing in compounds and grinded masala . It is claimed that the assessee namely Suresh Chandra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned ay: 2011-12, vide order passed u/s 245D(4). The assessee, in this letter dated 17.09.2013, stated that the tax and interest liability to the tune of ₹ 38,67,145/- arising out of tax and interest payable, for ay: 2006-07 to 2011-12 be adjusted against the cash seized during search operations, while request was made to refund the amount of excess cash seized of ₹ 4,34,89,355/-. It was also submitted that no interest be levied under various provisions of Income-tax Act, 1961, as the cash was seized since 2011. Under these circumstances and after considering entire material on record, we are of the considered view, that the assessee is not entitled for complete relief on the interest payable u/s 234B of the 1961 Act, as first of all the assessee was disputing the search conducted by Revenue u/s 132(1) of the 1961 Act against it and secondly, as per material before us, there is no material to suggest that any estimate of income was filed by the assessee before the competent authorities immediately after search operations, even including the high denomination currency notes of ₹ 1000/- each aggregating to ₹ 50,33,000/- as its undisclosed income, rather, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.09.2013, till the date of filing of return of income on 17.09.2013. The AO is directed to compute liability of interest u/s 234B to this effect. Now proceeding further, the assessee while filing application with Settlement Commission on 19/20th March 2014 offered additional income of ₹ 26,54,601/-, and the assessee has claimed that it discharged its entire tax and interest liability, aggregating to ₹ 40,09,000/-, by making payments towards tax and interest on 18.03.2014. The assessee has claimed that it was not given appropriate credit for payment of taxes, and form no 26AS/challans are produced before tribunal, the AO shall verify and give credit of payment of appropriate taxes claimed to be so paid by assessee on 18.03.2014, after due verification. Then, obviously if taxes stood paid on this date viz. 18.03.2014 as claimed by assessee even on additional income offered in SOF filed with Settlement Commission, no further liability u/s 234B can be fastened beyond this point of time viz. 18.03.2014 to the extent the taxes stood paid(which is subject to verification by AO). However, the assessee shall be liable to pay interest u/s 234B on tax so computed on the additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X
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