TaxTMI 
TaxTMI 
2011 (5) TMI 824
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....004. During the operation, total cash of Rs.2,81,0,5000/- was recovered and seized by the Income-Tax Department. The petitioner addressed letters dated 28.9.2004 and 26.7.2005 requesting the Commissioner of Income-Tax to release the seized cash and adjust the same against the self-assessment tax and advance tax liability of the petitioner for the assessment year 2004-05 and 2005-06. It is, however, the case of the petitioner that the authorities adjusted the amount of Rs.1,05,64,679/- and Rs.8,34,034/- against tax liabilities on 12.12.2005 and 17.10.2006. While framing the assessment the department demanded interest of Rs.17,66,954/- and Rs.6,29,577/- under Sections 234B and 234C of the Income Tax Act, 1961 ("the Act" for short). The depart....
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....ed by the Court, respondents have appeared and filed replies. In an affidavit dated 20.1.2011 they have stated inter alia that in view of the notification dated 26.6.2006, the petitioner is not entitled to claim waiver of interest. The notification superseded previous notifications. The claim of the petitioner was considered but found not covered and hence application was dismissed. Further affidavit dated 1.4.2011 was also filed to highlight certain factual aspects regarding search and seizure operations and adjustment of the cash seized from the petitioner's premises towards his tax liabilities. 5. On the basis of the above pleadings, counsel appearing for both the sides have made detailed submissions before us. Learned Senior A....
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....t counsel for the petitioner did not pursue the prayer for declaring notification dated 26.6.2006 invalid. He, however, stressed that applying such a notification in the present case, would amount to giving retrospective operation to the notification. 8. Facts are not seriously in dispute. The petitioner desired that his seized cash of Rs.2,81,05,000/- be adjusted towards his tax liabilities. Such adjustment was not granted for considerable period of time. Eventually, when the adjustment was granted and the assessment was framed, to the extent of delay, interest totaling to Rs.23,96,531/- was demanded under Section 234B and 234C of the Act. The petitioner filed application on 3.11.2007 and prayed that such interest be waived. The ....
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....lar notification dated 23.5.1996. It, thus, is an inescapable situation that by virtue of the Board's order dated 26.6.2006, previous category of cases where waiver of interest was permitted on account of non-adjustment of seized cash, during search and seizure operations towards advance tax installments or installments which fall due after the seizure, came to be deleted. 11. It is not in dispute that charging of interest under section 234B and 234C of the Act is mandatory. Such interest can be waived only under some authority of law. Board's order/notification, under Section 119(2)(a) of the Act, would certainly be one such source. However, in absence of any such order or notification, waiver of interest would be unauthorized and there....