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TMI Blog2025 (1) TMI 1227X X X X Extracts X X X X X X X X Extracts X X X X ..... in Law. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming stand of A.O. for providing credit of Rs 10,83,260/- paid as Tax by the Appellant on 9 April 2014 as against allowed by the AO as paid only on 21 March 2018. 3. On the facts and circumstances of the case and in law, the AO erred in levying and computing interest under Section 234B and Section 234C of the Act; 4. On the facts and circumstances of the case and in law, It is prayed that interest levied under section 220 should be deleted as there was failure on the part of A.O. to give the credit of cash seized in system on time. 5. Without prejudice to above, It is prayed before your honours the date of deposited of tax should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/2015 and 10/02/2016 for adding the said sum to the total income and adjustment of cash seized against advanced tax liability. Accordingly, total income was computed at Rs. 50,95,360/- in the assessment order passed under section 153A/143(3) of the Act on 30/12/2016. A notice of demand under section 156 of the Act was issued along with the assessment order, wherein the assessee was allowed 30 days time for payment of the demand of Rs. 17, 01, 366/- including interest under section 234B/234C of the Act, but the Assessing Officer adjusted the cash seized against the tax liability only on 21/03/2018 3. In view of non-adjustment of the cash seized against the advance tax or self-assessment tax liability while passing the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmined on completion of the search assessments orders / penalty order etc i.e. regular tax demand. The learned counsel for assessee relied on the decision of the Hon'ble Punjab and Haryana High Court in the case of CIT Vs Ashok Kumar reported in (2012) 20 taxmann.com 432 (Punjab and Haryana). But, we find that, legislature has introduced specific amendment by way of Explanation- 2, inserted below section 132B, though Finance Act 2013, with effect from 01/06/2013, which states that for removal of doubts, it is hereby declared that the 'existing liability' does not include 'advanced tax' payable. Thus, the explanation has clearly put in place an embargo against adjustment of seized cash against the advance tax liability of the assessee being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein the Tribunal held as under: "7. Undisputedly, the cash seized was in the possession of the department from the date of search itself, i.e., 01.12.2018. It is a fact that the assessee has also requested the Assessing Officer to adjust the self assessment tax liability on the income declared of Rs.1,07,00,000/- from the seized amount. However, assessee's request was never accepted. On a reading of section 132B of the Act, though it transpires that the assets seized can be adjusted against any existing liability under the Act and advance tax may not be an existing liability, however, in our view, self assessment tax is certainly an existing liability created on 1st April once the financial year ends. Therefore, the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash as unexplained and offers the same for tax, the revenue can't sit over his request and on the other hand charge interest for nonpayment of taxes. Until, the cash seized is adjusted against the taxes, the Revenue is mere custodian and required to adjust against the taxes as and when requested for adjustment and any delay on the part of the Revenue, the assessee should not be penalized. 4.3 In view of the precedents discussed above, it is evident that self assessment tax liability could be treated as part of the 'existing liability' , but in the instant case, the assessee has apparently not included the said amount of the cash seized as part of his total income and computed the self-assessment tax liability corresponding to said income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said date. As on the date cash seized was available for adjustment by the Assessing Officer, and the assessee made request for such adjustment even during the course of the assessment proceeding as well as in the post assessment period, however same was adjusted by the Assessing Officer only on 21/03/2018 and this delay cannot be attributed to the assessee. The assessee cannot be held as assessee in default for non-payment of the tax on time and no interest under section 220 can be charged from the assessee in such circumstances. Accordingly, we direct the Assessing Officer to adjust the seized cash against the tax liability raised in notice for demand dated 30/12/2016 as said cash was already available with the Department for adjustment w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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