INCOME TAX ACT, 1961

Section 234B

Interest under section 234B and 234C - Computation - Adjustment of seized cash towards tax liability -

During course search and seizure operation in case of assessee, Department seized certain cash. Later on, the assessee filed his return of income. Before Tribunal, the assessee prayed that the seized cash should be adjusted towards his advance tax/tax liability, with effect from the date of the search. He further, submitted that since the seized cash was with the Department and the Department was using the same, therefore no interest should be levied. However, Revenue submitted that the seized cash should not be adjusted towards the assessee's advance tax/tax liability, as the assessee never intimated to the Department about the willingness to adjust the seized cash. Held: On perusal of assessee's income tax return and computation of income tax, it was noted that it was one sided approach adopted by the assessee just to cheat the Department by demonstrating that he suo moto adjusted the seized cash towards his advance tax/tax liability because just to make an entry in the Return of Income, suo moto, without intimating to the Department, was not a compliance. Hence, it was abundantly clear that assessee never intimated to the Department that his seized cash should be adjusted against his advance tax/tax liability. Further, the assessee neither offered seized cash during his statement under section 132(4) nor he intimated to the Department that the seized cash should be adjusted towards his advance tax/tax liability; therefore the Department was entitled to levy interest on outstanding demand.

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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