TaxTMI 
TaxTMI 
1995 (7) TMI 112
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....urse of search & seizure operation in September/October. In this connection your kind attention is drawn to the order under section. 132(5) wherein on our request the said amount was treated as advance tax. Accordingly, credit for such amount of Rs. 1,62,194 has to be allowed as advance tax for the above assessment year." 3. The Assessing Officer rejected the petition of the assessee vide his letter No. 11-085-CT-3363/Inv.Cir-I(I)/Cal./332 dated 16-1-1991 stating therein that the assessee's request for rectification of the case by allowing the credit of the seized amount of Rs. 1,62,194 as advance tax and also for interest under section 244A on the refund cannot be allowed as there is no such clear provision in the Income-tax Act, for rectification of order under section 143(1)(a). 4. When the matter was carried in appeal before the CIT(A) the assessee submitted that there was a search operation in the premises of the assessee on 22-9-1988 an on 5-10-1988 an cash of Rs. 1,62,194 was seized by I.T. Department. It was further stated that an income of Rs. 8 lakhs was declared under section 132(4) at the time of search and in the course of the proceedings under section 132(5), th....
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....ess : Deposited on 2-1-1989 as advance tax (Receipted challan enclosed) 3,41,000 -------- 1,62,194 &....
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....; -------- Income-tax @ 60% 4,80,000 Surcharge @ 5% of income-tax 24,000 -------- ....
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.... in the intimation under section 143(1)(a) when the facts relating thereto had been there on record, should indeed give rise to a mistake apparent from record. In view of this he directed the Assessing Officer to make necessary rectification in the intimation under section 143(1)(a) treating the sum of Rs. 1,55,303 out of the seized sum of Rs. 1,62,194 as advance tax and work out the refund consequently allowable to the assessee. 7. Being aggrieved by the order of the CIT(A), the revenue preferred this appeal. The ld. departmental representative strongly supported the order of the Assessing Officer and vehemently contended that the CIT(A) was not justified in holding that there was a mistake apparent from record. According to the ld. departmental representative, the seized amount cannot be treated as advance tax but it may be treated as tax on finalisation of assessment. 8. The ld. counsel for the assessee, on the other hand, supported the order of the CIT(A). He also filed a paper book containing computation of total income, copy of intimation under section 143(1)(a), copy of petition for rectification, order dated 16-1-1991 against the petition for rectification, letter dat....
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....ue in favour of the assessee, the CIT(A) is absolutely governed by the order under section 132(5) of the I.T. Act as quoted by him in his order. We find that the order under section 132(5) itself is wrong and is not in accordance with the provisions of law in so far as the seized money of Rs. 1,63,000 is retained towards " existing liability by way of advance tax ". There is no such provision in the Act to include the advance tax in the liabilities envisaged in section 132(5). According to the provisions of section 132(5)(ii), (iia) and (iii), the amount of tax, interest payable and penalty imposable and existing liability under this Act and under Excess Profit Tax Act, Business Profit Tax Act, the Indian Income-tax Act, 1922, Wealth-tax Act, 1957, Expenditure Tax Act, Gift-tax Act and Company's (Profits) Surtax Act only are to be included and considered for the purpose of retention of seized money. In this case, the amount of tax as per section 132(5)(ii) is Rs. 5,04,000 (before adjustment of advance tax) and existing liability as per provisions of section 132(5)(iii) is Rs. 6,891. After adjustment of advance tax of Rs. 3,41,000 already paid, the current liability under section 13....
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....ich the income referred to in clause (i) of that sub-section relates including any penalty levied or interest payable in connection with such assessment or reassessment and in respect of which he is in default or is deemed to be in default may be recovered out of such assets. (ii) If the assets consist solely 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, Tax Recovery Officer under authorisation from the Chief Commissioner or Commissioner under sub-section (5) of section 226 and the Assessing Officer or, as the case may be, Tax Recovery Officer may recover the amount of such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule." It ....