In Pr. Commissioner of Income Tax v. Sh. Surinder Kumar Khindri, the division bench of the Punjab and Haryana High Court held that the cash seized during search can be adjusted against the advance tax liability of the assessee since the same amount to existing liability as per specific provision of Section 132B of the Income Tax Act, 1961.
Coming to the facts of the case, an amount of Rs. 99,00,000/- was seized from the residence and bank lockers of the assesseee during the course of search. The assessee requested the Assessing Officer to adjust the seized amount towards his expected advance tax liability which was denied on ground that the advance tax liability does not constitute an existing liability under the relevant provisions of the Income Tax Act and the seized amount can be adjusted only against the regular tax liability.Subsequently, the assessee filed income tax returns and the department initiated penalty proceedings against him on ground of non-payment of taxes on the surrendered income.
The first appellate authority as well as the ITAT accepted the plea of the assessee and therefore, the Revenue preferred an appeal before the High Court.
Before the High Court, the Revenue reiterated the above arguments and relied on the decision of the Madha Pradesh high Court in the case of Ramjilal Jagannath and Others Vs. Assistant Commissioner.
Rejecting the submissions of the Revenue, the bench noticed that the issue had been already settled by the same Court in the case of Commissioner of Income Tax Vs. Ashok Kumar. Aligning with the findings of the lower authorities, the division bench comprising Justice Ajay Kumar Mittal and Justice Ramendra Jain held that the amount seized was adjustable against the advance tax liability.
Read the full text of the Judgment below.
