ITAT upholds CIT(A)-I's order on interest for non-response to cash seized. Advance tax not existing liability.

The appeal was dismissed by the Hon'ble ITAT, upholding the CIT(A)-I's order. The appellant's contentions regarding interest charged for non-response to adjusting cash seized against advance tax liability were rejected. The Division Bench's judgment clarified that advance tax does not constitute an existing liability under Section 132B of the Income Tax Act, 1961. The appellant's challenge to Explanation 2 to Section 132B and liability under Section 234C was also dismissed, except for the computation of liability under Section 234C, which was decided in favor of the appellant based on a previous judgment.

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Issues:
- Appeal against Tribunal's order dismissing appellant's appeal against Commissioner of Income Tax's order for assessment year 2008-09.
- Contention regarding interest charged for non-response to request for adjustment of cash seized against advance tax liability.
- Interpretation of Explanation 2 to Section 132B of the Income Tax Act, 1961.
- Due dates for paying advance tax installments and chargeability of interest under Section 234C.

Analysis:
1. The appellant raised substantial questions of law regarding interest charged when the department did not respond to the request for adjusting cash seized against advance tax liability. The Hon'ble ITAT confirmed the order of CIT(A)-I, stating that advance tax does not constitute existing liability as per Section 132B of the Income Tax Act, 1961. The appellant's contentions were dismissed based on a Division Bench judgment dated 29.09.2014, which held that the cash seized could be adjusted against advance tax dues, and the explanation to Section 132B was not retrospective.

2. The appellant also questioned the interpretation of Explanation 2 to Section 132B inserted by the Finance Act, 2013. The Hon'ble ITAT upheld CIT(A)-I's order, while the appellant argued that the explanation clarifies that advance tax is not part of existing liability. However, the Division Bench's judgment favored the respondent, stating that the explanation is not retrospective, resulting in dismissal of the appeal on these grounds.

3. Regarding the due dates for paying advance tax installments and chargeability of interest under Section 234C, the appellant's appeal was partially successful. The appellant was held liable to pay interest under Section 234C until the date of the letter requesting adjustment of the seized amount. This decision was influenced by a Division Bench judgment dated 22.07.2010 in a similar case, directing the computation of liability under Section 234C in accordance with that judgment.

4. Ultimately, the appeal was disposed of, with questions 1 to 3 decided against the appellant based on the Division Bench's judgment regarding the non-retrospective nature of the explanation to Section 132B. However, question 4 was decided in favor of the appellant, leading to the liability under Section 234C being computed as per the judgment referred to.

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