Credit for taxes and release of seized cash under Direct Tax Vivad se Vishwas Act refunds and interest ordered within 30 days

Challenge concerning credit for taxes paid by challans and release/refund of cash seized under the Direct Tax Vivad se Vishwas Act 2020; respondents initially declined matching challan credit but subsequently allowed credit for three challans resulting in a refund, while declining credit for seized cash. Respondents accepted seizure, acknowledged misallocation of seizure records, and agreed to release and refund the seized cash with accumulated interest within 30 days, subject to an indemnity bond filed by the petitioner. The CPC is directed to process the refund arising from the corrected Form No. 5 within 30 days.

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Issues: (i) Whether the Petitioner is entitled to credit/refund for taxes paid by way of challans and for cash seized during search and adjusted against assessment under the Direct Tax Vivad se Vishwas Act, 2020 and/or to release of the seized cash under Section 132B(3) of the Income-tax Act, 1961.

Analysis: The matter involves a block assessment following search and seizure under Section 158BC read with Section 132 of the Income-tax Act, 1961 and claims made under the Direct Tax Vivad se Vishwas Act, 2020. Record shows cash was seized and later adjusted against assessment; separate challan payments were also made. Form No. 3 initially did not reflect credit for either the seized cash or the challan payments. Prior writ proceedings resulted in directions for reconsideration and personal hearing. Subsequent departmental filings acknowledge seizure and the department has, in a related family-member matter, conceded release of seized cash with interest and grant of credit for challan payments. During the present proceedings the Respondents conceded that cash must be released and undertook to refund the seized cash with accumulated interest and to grant the refund shown in Form No.5; an indemnity bond has been furnished.

Conclusion: Credit/refund for taxes paid by way of challans shall be allowed and the seized cash of Rs. 11,50,000 along with accumulated interest shall be released/refunded; relief granted in favour of the Petitioner (assessee).

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