2015 (8) TMI 1385

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....s. 30,00,000 u/s 271AAA by the A.O. by ignoring the detailed facts & findings given by the A.O. in Penalty order. 2. Whether the ld. CIT(A) has failed to appreciate the fact that the section 132B(1) is very clear that the seized or requisitioned assets may be dealt with against existing liability under the Income-tax Act, and not against the advance tax or self assessment tax and in doing so lost sight of the very purpose of the legislation of section 132B(1) of the Income-tax Act. 3. Whether the ld. CIT(A) has failed to appreciate the fact that since there was a short fall in the payment of tax on the returned income, the incidence of interest u/s 234B and 234C was automatic and in accordance with the Income-tax Act. 4. Whether the l....

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....essee's claim of setting off the advance tax liability against seized cash, the Assessing Officer declined the same by observing as follows:- "Reliance has been sought to be placed on various case laws on which it has been held that interest u/s 234A and 234B may not be levied by treating the assessee in default for non-payment of advance tax in cases where cash seized from the assessee was lying in custody of the Department. It is further contended that a similar penalty levied in the case of Sh. Parvinder Singh Prop. M/s Mahinder Singh Jewellers, Amritsar was deleted by the CIT(A), Ludhiana and the order has been upheld by the ITAT, Amritsar vide its order dated 4.10.2012. However, the above arguments of the assessee cannot be accepte....

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....visions of Part C of Chapter XVII." After the insertion of the above explanation the Departmental case is further strengthened that the seized cash cannot be adjusted against the advance tax. With the insertion of this explanation the judicial pronouncements given by the assessee also stand over ruled. In view of the above it is clear that the assessee is in default of having failed to pay the advance tax in respect of the income disclosed u/s 132(4) and hence I am convinced that penalty u/s 271AAA is leviable and it is a fit case for levy of penalty under the said section. The quantum of such penalty leviable being 10% on undisclosed income is worked out as under :- Total amount of undisclosed income Rs.3,00,00,000 Penalty leviabl....