TaxTMI 
TaxTMI 
1998 (11) TMI 15
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....n retained contrary to the mandate of section 132(8) of the Income-tax Act, 1961. It is not in dispute that the fixed deposit receipts have since been encashed by the Assessing Officer for the adjustment of the amounts against the arrears of tax, etc. The order of the Settlement Commission in so far as it is relevant for the purpose of this case is extracted and set out below : "4(b) For the assessment years 1987-88 and 1988-89, interest under section 139(8) would be charged for a period of six months. Interest under section 215/217 would be charged for a period of eighteen months. 4(c) For the assessment years 1989-90 to 1991-92, interest under sections 234A, 234B and 234C would be charged as per law. However, for the purpose of chargin....
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....owards the tax and interest and the balance amount in four equal quarterly instalments commencing from July 1, 1995. Interest under section 245D(6A) was to be paid along with the last instalment. The seized cash could be adjusted against the tax payments, if so requested by the assessee. It is admitted by the assessee that he did not pay the sum of Rs. 10 lakhs on or before June 1, 1995. He did not also pay the balance in four equal quarterly instalments. It is also admitted that the Income-tax Officer had made an order dated May 31, 1995, determining the tax and interest payable by the assessee as a result of the order. That order was received by the assessee on June 15, 1995. The payments still having not been made by the assessee, the A....
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....shment of the fixed deposit receipt was valid on account of the default committed by the assessee even after the order of the Settlement Commission. It was, therefore, open to the authorities to recover the amount from and out of the documents retained as also by requiring others, who held money on behalf of the assessee, to make the payment to the authorities. The complaint of counsel for the petitioner that the authorities could have waited till the assessee paid the money in instalments, though appears to be reasonable, cannot be accepted. In view of the fact that the assessee had committed default in the payment of Rs. 10 lakhs and had not come forward to pay the amounts in instalments, the recovery effected by the Assessing Officer can....