TaxTMI 
TaxTMI 
2015 (9) TMI 1167
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....have carefully considered the issue before me. In the appellant's case the request for adjusting seized cash towards tax has been made on 08-09-2009 itself. However there has been no response from the department regarding this request of the assessee. It is seen that a sum of Rs. 69,53,300/- was seized and was available with the department. In the various judicial decisions relied upon by the appellant have considering similar contentions held that levy of interest u/s 234A, 234B & 234C when cash seized was available for adjustment towards tax liability was not justified. In this connection the decision of the Hon'ble Jurisdictional Bombay High Court in Income tax Appeal no. 3741 of 2010 dated 21-09-2011 in the case of CIT v. Jotindra B. Mody is relevant. Vide the said decision the Bombay High Court has held as follows:- "The basic argument of the Revenue is that under section 132B(1)(i) of the Income Tax Act 1961, the amount seized during the course of search can be dealt with for discharging the existing liability under the Acts set out therein, in the present case, the tax liability relating to the assessment year in question would get crystallised only after the assess....
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....39; under this Act, the Wealth-tax Act, 1957, the Expenditure-tax Act,1987, the Gift-tax Act, 1958 and the Interest-tax Act, 1974 and the amount of liability determined on completion of assessment pursuant to the search, including penalty levied or interest payable in connection with such assessment and in respect of which, such person is in default or is deemed to be in default. A new Explanation in section 132B shall be inserted so as to provide that for the removal of doubts, it is hereby declared that the 'existing liability' does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII." The learned D.R. further submitted that assessee's request to the Assessing Officer under section 154 has rightly been not entertained by the Assessing Officer as the issue is debatable. Hence the learned D.R. submitted that order of the Assessing Officer be upheld. 6. Upon careful consideration we note that the learned CIT(Appeals) has applied a jurisdictional High Court decision in the case of CIT v. Jotindra B. Mody [IT Appeal No. 3741 of 2010, dated 21-9-2011]. The order of the jurisdictional High Court is binding and there cannot be any di....
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....o the person from whose custody the assets were seized: Provided further that such asset or any portion thereof as is referred to in the first proviso shall be released within a period of one hundred and twenty days from the date on which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed; (ii) if the assets consist solely of money, or partly of money and partly of other assets, the Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liability to the extent of the money so applied; (iii) the assets other than money may also be applied for the discharge of any such liability referred to in clause (i) as remains undischarged and for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Assessing Officer or, as the case may be, the Tax Recovery Officer under authorisation from the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or[ Commissioner under sub-section (5) of section 226 and the Assessing Officer or, as the case m....
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....that Revenue's contention that tax liability relating to the assessment year in question would crystallize only after the assessment is complete, is not correcty. 8. Now we find that the Explanation inserted to section 132B as referred by the, learned D.R. aims to negate the effect of above said jurisdictional High Court ruling. 9. Now we have to examine whether the said Explanation can be said to be bringing upon a substantive change/amendment or not. 10. In this regard we may gainfully refer to exposition from Hon'ble Apex Court as under: (a) In the case of Virtual Soft Systems Ltd. v. CIT [2007] 289 ITR 83 Hon'ble Apex Court has expounded as under "It is a well settled legal position that an amendment can be considered to be declaration and clarification only if the statute itself expressly and unequivocally states that it is a declaratory and clarificatory provision. If there is no such clear statement in the statute itself, the amendment will not be considered to be merely declaratory or clarificatory. Even if the statute does contain a statement to the effect that the amendment is declaratory or clarificatory, that is not the end of the matter. The cour....
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....rting the above decision without removing the statutory basis of the decision that tax liability cannot be said to crystallize only after the assessment is complete. Hence this Explanation will act prospectively, Hence, the reliance by the learned D.R. on the insertion of this Explanation to section 132B cannot help the case of the Revenue as the Explanation has been inserted much after the conclusion of the assessment year under consideration. Before parting we may also refer to Hon'ble Apex Court decision in the case of CIT v. Shelly Products [2003] 261 ITR 367, for the following observation of the Hon'ble Apex Court: "In a case where an assessee chooses to deposit by way of abundant caution advance tax or self-assessment-tax which is in excess of his liability on the basis of the return furnished or there is any arithmetical error or inaccuracy, it is open to him to claim refund of the excess tax paid in the course of the assessment proceedings. He can certainly make such a claim also before the concerned authority calculating the refund. Similarly, if he has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from ....