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COMMISSIONER OF INCOME TAX, CHANDIGARH- v. M/S GARG RICE & GENERAL MILLS, KHARAR - ITA-81-2005  RD-P&H 3345 (22 May 2006)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
I.T.A. NO. 81 OF 2005
DATE OF DECISION: 29.5.2006
COMMISSIONER OF INCOME TAX, CHANDIGARH- II ....APPELLANT
M/S GARG RICE & GENERAL MILLS, KHARAR
CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE RAJESH BINDAL
PRESENT: MR. S.K. GARG NARWANA, ADVOCATE FOR THE APPELLANT.
The Revenue has filed the present appeal raising the following substantial question of law:
"Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in upholding the order of the CIT (A), Chandigarh in directing the Assessing Officer to treat the amount of Rs. 2,40,000/- seized during the course of search as payment towards advance tax whereas the assets retained u/s 132 (5) are to be adjusted as per provisions of Section 132 B of the Income Tax Act, 1961 i.e. only towards liability determined u/s 132(iii) of the Income Tax Act or the liability determined on the completion of assessment." Brief facts of the case are that search and seizure operation was conducted in the premises of the assessee, wherein some cash were seized. The assessee claimed that the cash seized, should be adjusted against his advance tax liability for which request was made well within time. The request of the assessee was not considered and interest under Section 234B and 234C of the Income Tax Act was levied. Application of the assessee for rectification of the order was rejected by the Assessing Officer and against the order of rectification, appeal was accepted by the I.T.A. NO. 81 OF 2005 
Commissioner of Income Tax, (Appeals), Chandigarh, which order was upheld by the Income Tax Appellate Tribunal (for short 'the Tribunal') with the following observations:
"10. In the present case, there is an indication that order u/s 132(5) was passed retaining cash seized. The assessee filed application in December, 1994 and in March, 1995 after the above order requesting for adjustment of seized cash towards advance tax. No order rejecting above request seems to have been passed. The cash seized as per statutory provision was required to be adjusted against the current liabilities. However, it is clear from order dated 12.10.1999 of the Assessing Officer that no credit for seized cash was allowed to the assessee towards payment of taxes. This stand is contrary to the statutory provisions, directions of Commissioner of Income-Tax (Appeals), Patiala dated 16.10.1996 and is quite unjust. The amount seized has to be treated as tax recovered from the assessee for the reasons given in detail in case of C.I.T. Vs Raghu Nandan Lal, supra. The impugned directions of learned Commissioner of Income- tax (Appeals) are quite in line with the directions given by ITAT in the case cited supra. We, therefore, do not find any error in the order of Commissioner of Income-tax (Appeals).............."
The Tribunal while rejecting the appeal of the Revenue relied upon the case of Raghu Nandan Lal (supra). Further, it is evident from the order of the Tribunal that, besides, the case in hand, two other cases namely: M/S Nand Lal, Labhu Ram, Kharar, and M/s Punjab Cold Storage, Balongi were also decided. Whereas in the case of Raghu Nandan Lal (supra), counsel for the Revenue informed that appeal was not filed since the amount involved was small though he did not dispute that question of law involved in that case was also same. However, no details of the other two cases have been furnished either in appeal or at the time of hearing.
Counsel for the Revenue could not point out any illegality in the order passed by the Tribunal which could require interference by this Court. Admittedly, the amount of the assessee was lying with the Revenue, I.T.A. NO. 81 OF 2005 
adjustment of which, sought by the assessee against payment of advance tax. The request was not acceded to. On the other hand, for the alleged delayed payment of advance tax, interest is sought to be charged. It cannot be disputed that the adjustment of the amount seized was sought by the assessee for discharging his liability to pay advance tax.
We find no reason to entertain the appeal. Consequently, the same is dismissed.
(ADARSH KUMAR GOEL)
May 29, 2006 (RAJESH BINDAL)
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