S.Duraipandi & S.Thalavaipandian, CHENNAI V. ACIT, CHENNAI

ITA 2226/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1144 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2013
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 13-03-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 11-12-2012
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOB IRS
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Search and seizure; Block assessment
• Section: 234B; 6; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A.NOS. 2223 TO 2229/MDS/2012 ASSESSMENT YEARS : 2002-03 TO 2008-09 S. DURAIPANDI & S. THALAVAIPANDIAN, C/O CNGSN & ASSOCIATES, NO.22, VIJAYARAGHAVA ROAD, T.NAGAR, CHENNAI 600 017. PAN AAAAD4723G VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-III(4), CHENNAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B. RAMAKRISHNAN, FCA RESPONDENT BY : SHRI SHAJI P. JACOB, IRS, ADDL. CIT DATE OF HEARING : 13 TH MARCH, 2013 DATE OF PRONOUNCEMENT : 20 TH MARCH, 2013 O R D E R PER BENCH THIS IS A BUNCH OF SEVEN APPEALS. THESE APPEALS AR E FILED BY THE ASSESSEE, WHO IS AN A.O.P. THE RELEVANT ASS ESSMENT YEARS ARE 2002-03 TO 2008-09. ITA 2223 TO 2229/12 :- 2 -: 2. THESE APPEALS ARE DIRECTED AGAINST THE COMMON OR DER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-II AT CHENN AI DATED 28.9.2012 AND ARISE OUT OF THE ORDERS OF THE ASSESS ING OFFICER REJECTING THE PETITIONS FILED BY THE ASSESSEE UNDER SEC.154 OF THE INCOME-TAX ACT, 1961. 3. THE ASSESSEE IN THE PRESENT CASE, AN A.O.P., WAS ENGAGED IN THE BUSINESS OF MONEY LENDING. THERE WAS A SEAR CH ACTION UNDER SEC.132 ON 16.5.2007. CASH AMOUNTING TO ` 1.65 CRORES WAS SEIZED IN THE COURSE OF SEARCH AND THE SAME WAS RETAINED BY THE REVENUE IN THE P.D. ACCOUNT OF THE COMMISSIONER OF INCOME- TAX. THEREAFTER THE ASSESSMENTS WERE COMPLETED UND ER SEC.153C. THE ASSESSMENTS SO COMPLETED WERE TAKEN IN FIRST APPEALS BEFORE THE COMMISSIONER OF INCOME-TAX(APPEA LS). CERTAIN MODIFICATIONS WERE GRANTED BY THE COMMISSIO NER OF INCOME-TAX(APPEALS). LATER ON, THE APPEALS WERE TA KEN BEFORE THE TRIBUNAL IN SECOND APPEALS. THE TRIBUNAL CONFI RMED THE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS). 4. THE MATTER BEING SO, THE ASSESSEE THEREAFTER FIL ED RECTIFICATION PETITIONS UNDER SEC.154 ON 26.8.2011 BEFORE THE ASSESSING OFFICER PRAYING FOR RECTIFICATION OF CERT AIN MISTAKES ITA 2223 TO 2229/12 :- 3 -: APPARENT IN THE ASSESSMENT ORDERS. THE MISTAKE POI NTED OUT BY THE ASSESSEE IS THAT THE ASSESSING AUTHORITY LEVIED INTEREST UNDER SEC.234B WITHOUT GIVING CREDIT TO THE SUM OF ` 1.65 CRORES SEIZED AT THE TIME OF SEARCH AND ALSO TO THE SUM OF ` 31 LAKHS PAID ON 17.8.2007. 5. THE ASSESSING OFFICER EXAMINED THE PRAYER MADE B Y THE ASSESSEE IN THE LIGHT OF THE LAW STATED IN SEC.132B (1)(I). HE HELD THAT IT IS CLEAR FROM THE ABOVE SECTION THAT CASH S EIZED AT THE TIME OF SEARCH HAS TO BE ADJUSTED FIRST AGAINST ANY EXIS TING LIABILITY, IF ANY. AT THE TIME OF SEARCH THERE WAS NO TAX LIABIL ITY AND THEREFORE, THE SEIZED CASH COULD NOT HAVE BEEN ADJUSTED AGAINS T ANY DEMAND. THE ASSESSING OFFICER OBSERVED THAT THE T AX LIABILITY WAS DETERMINED ONLY AFTER THE COMPLETION OF ASSESSM ENT UNDER SEC.153C AND THE SEIZED CASH OF ` 1.65 CRORES WAS ADJUSTED IMMEDIATELY AGAINST THE DEMAND RAISED THEREIN. HE FURTHER OBSERVED THAT AS THE ASSESSEE DID NOT PAY ANY ADVAN CE TAX, THE ASSESSEE WAS LIABLE TO PAY INTEREST UNDER SEC.234B. ACCORDINGLY, THE ASSESSING OFFICER FOUND THAT THERE IS NO MISTAK E AND DISMISSED THE RECTIFICATION PETITIONS FILED BY THE ASSESSEE. ITA 2223 TO 2229/12 :- 4 -: 6. THE ORDERS OF THE ASSESSING OFFICER WERE TAKEN I N FIRST APPEALS BEFORE THE COMMISSIONER OF INCOME-TAX(APPEA LS). THE COMMISSIONER OF INCOME-TAX(APPEALS), FIRST, CONSIDE RED THE SCOPE OF SEC.154 IN THE LIGHT OF THE PETITIONS FILED BY T HE ASSESSEE. HE FOUND THAT THE MISTAKE ALLEGED IN THE ASSESSMENT OR DERS MUST BE PATENT, MANIFEST AND SELF-EVIDENT AND IT SHOULD NOT REQUIRE ELABORATED DISCUSSION OF FACTS OR ARGUMENT TO ESTAB LISH IT. RELYING ON A SERIES OF DECISIONS, HE HELD THAT THE MISTAKE IN COMPUTATION OF INTEREST UNDER SEC.234B POINTED OUT BY THE ASSESSEE IS A DEBATABLE ISSUE WHICH CALLS FOR A DET AILED STUDY OF THE MATTER AND THEREFORE, IT CANNOT BE HELD TO BE A MISTAKE RECTIFIABLE UNDER SEC.154. ACCORDINGLY, HE HELD TH AT THE PETITIONS OF THE ASSESSEE WERE RIGHTLY REJECTED BY THE ASSESS ING OFFICER. 7. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ALSO RELIED ON THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. K.T.KUNJUMON (239 ITR 782) WHEREIN THE HONB LE HIGH COURT HAS HELD THAT THE SEIZED CASH COULD BE ADJUST ED ONLY AGAINST THE TAX RESULTING FROM BLOCK ASSESSMENT. H E HELD THAT WHEN THE BLOCK ASSESSMENT IS PENDING, NO ADJUSTMENT CAN BE ITA 2223 TO 2229/12 :- 5 -: MADE AGAINST ANY OTHER TAX LIABILITY, BEFORE COMPET ING BLOCK ASSESSMENT. 8. THUS, THE COMMISSIONER OF INCOME-TAX(APPEALS) RE JECTED THE FIRST APPEALS FILED BY THE ASSESSEE. THE ASSES SEE IS AGGRIEVED AND THEREFORE, THE SECOND APPEALS BEFORE US. 9. THE COMMON GROUNDS RAISED BY THE ASSESSEE IN ALL THESE APPEALS READ AS BELOW : 2. THE LEARNED COMMISSIONER OF INCOME- TAX(APPEALS) HAS ERRED IN UPHOLDING THAT THE ASSESSEES APPEAL IS NOT MAINTAINABLE U/S 154 AS TH E ISSUE OF INTEREST INVOLVES A DEBATABLE ISSUE EVEN THOUGH THE SAME IS A MISTAKE APPARENT FROM THE RECORDS. 3. THE LEARNED COMMISSIONER OF INCOME- TAX(APPEALS) HAS ERRED IN REJECTING THE ASSESSEES APPEAL ON THE GROUND THAT THE ASSESSEE SOUGHT THE AMOUNT SEIZED TO BE TREATED AS ADVANCE TAX, WHERE A S ACTUALLY THE ASSESSEE HAD REQUESTED THAT THE SUMS SEIZED BE TREATED AS TAX PAID BY THE ASSESSEE UNDE R ITA 2223 TO 2229/12 :- 6 -: SECTION 140A OR OTHERWISEAS DEFINED U/S 234B(2) OF THE INCOME TAX ACT, 1961. 4. THE LEARNED THE COMMISSIONER OF INCOME- TAX(APPEALS) HAS ERRED IN NOT DIRECTING THAT THE IN TEREST U/S 234B SHOULD CEASE TO BE CHARGED TO THE EXTENT O F CASH SEIZURE. 10. THE ASSESSEE HAS ALSO FILED ANOTHER ADDITIONAL GROUND FOR THE CONSIDERATION OF THE TRIBUNAL. THE ADDITIONAL GROUND READS AS BELOW : THE LEARNED ASSESSING OFFICER ERRED IN CALCULATION OF INTEREST UNDER SECTIONS 234 A OF THE INCOME-TAX ACT , 1961. 11. AS THE ADDITIONAL GROUND DOES NOT CALL FOR ANY FURTHER INVESTIGATION OF FACTS, THE SAID GROUND IS ADMITTED FOR ADJUDICATION. 12. IN PARAGRAPH 6 OF HIS ORDER, THE COMMISSIONER O F INCOME- TAX(APPEALS) HAS AGREED TO THE FACTS EXPLAINED BY T HE ASSESSEE THAT A SUM OF ` 1.65 CRORES WAS SEIZED BY THE DEPARTMENT IN THE COURSE OF SEARCH ON 16.5.2007. HE HAS ALSO CONFIRM ED THE PAYMENT OF ` 31 LAKHS MADE ON 17.8.2007. THEREFORE, THERE IS N O ITA 2223 TO 2229/12 :- 7 -: DISPUTE REGARDING THE AMOUNTS SEIZED BY THE DEPARTM ENT AND PAID BY THE ASSESSEE, BOTH LYING IN THE HANDS OF THE DEP ARTMENT BEFORE COMPLETING THE ASSESSMENTS CONSEQUENT TO THE SEARCH . 13. NOW, THE QUESTION IS WHETHER THE AMOUNT SEIZED BY THE DEPARTMENT AND THE AMOUNT PAID BY THE ASSESSEE BEFO RE THE COMPLETION OF THE ASSESSMENTS COULD BE TREATED AS P AYMENTS TOWARDS TAX LIABILITY OF THE ASSESSEE, ARISING FROM THE ASSESSMENTS COMPLETED CONSEQUENT TO THE SEARCH. IF THE SEIZED AMOUNT AND PAID AMOUNT ARE TREATED AS ADVANCE PAYMENTS PAID BY THE ASSESSEE, THOSE PAYMENTS MADE BY THE ASSESSEE NEED TO BE REDUCED FROM THE AMOUNT OF ADVANCE TAX LIABILITY CA ST ON THE ASSESSEE AND THE INTEREST UNDER SEC.234B SHOULD BE LEVIED ONLY ON THE BALANCE OF THE AMOUNT. SO ALSO, THE LEVY OF INTEREST UNDER SEC.234A CAN BE MADE ONLY AFTER GIVING EFFECT TO TH E AMOUNTS ALREADY PAID BY THE ASSESSEE. IF THE SEIZED AMOUNT AND PAID AMOUNT ARE NOT GIVEN CREDIT AS STATED ABOVE, THE ST AND TAKEN BY THE REVENUE WILL HOLD GOOD TO SAY THAT THE EARLIER PAYMENTS MADE BY THE ASSESSEE NEED NOT BE REDUCED FROM THE ADVANC E TAX LIABILITY OR TOTAL TAX LIABILITY AND THE ASSESSEE I S LIABLE FOR PAYING INTEREST UNDER SEC.234A AND 234B. ITA 2223 TO 2229/12 :- 8 -: 14. IT IS TO BE SEEN THAT THE DEPARTMENT CANNOT SUO MOTU ADJUST CASH SEIZED IN THE COURSE OF SEARCH TOWARDS ADVANCE PAYMENT OF TAX AGAINST THE LIABILITY ARISING OUT OF THE ASSESS MENT TO BE MADE CONSEQUENT TO THE SEARCH. BUT, IF THE ASSESSEE AUT HORIZES THE DEPARTMENT TO APPROPRIATE THE SEIZED AMOUNT TOWARDS SUCH TAX LIABILITY, THEN IT IS THE DUTY OF THE REVENUE TO AC T ACCORDINGLY AND APPROPRIATE THE SEIZED AMOUNT TOWARDS SUCH TAX LIAB ILITY. IN THE PRESENT CASE, IT IS THE FINDING OF THE COMMISSIONER OF INCOME- TAX(APPEALS) THAT NO SUCH LETTER IS AVAILABLE ON RE CORDS. THIS OBSERVATION IS NOT CORRECT. THE ASSESSEE HAS WRITT EN TO THE ASSISTANT DIRECTOR OF INCOME-TAX ON 30.8.2007 REQUE STING THE REVENUE TO ADJUST THE AMOUNTS SEIZED FROM THE ASSES SEES RESIDENCE, BANK LOCKER, OFFICE AND MRS. JAYANTHI KR ISHNAMURTHY TOWARDS TAX PAYABLE BY THE ASSESSEE. THE ASSESSEE HAS ALSO STATED THAT THE ASSESSEE IS AN A.O.P. AND THE REQUE ST IS MADE TO THE DEPARTMENT ON BEHALF OF THE A.O.P. AS FAR AS T HE AMOUNT OF ` 31 LAKHS PAID ON 17.8.2007 IS CONCERNED, THE FINDIN G OF THE COMMISSIONER OF INCOME-TAX(APPEALS) IS THAT IT WAS PAID BY SHRI S. DURAIPANDI ON 17.8.2007 FOR THE ASSESSMENT YEAR 2007-08 IN HIS INDIVIDUAL CAPACITY AND THE CREDIT COULD BE GIV EN ONLY IN HIS ITA 2223 TO 2229/12 :- 9 -: INDIVIDUAL ACCOUNT. THIS FINDING IS ALSO NOT TRUE. THE ASSESSEE AS AN A.O.P. HAS ALREADY REQUESTED IN WRITING TO THE D EPARTMENT THAT THE SAID AMOUNT OF ` 31 LAKHS ALSO MAY BE APPROPRIATED AGAINST THE TAX LIABILITY OF THE ASSESSEE-A.O.P. WHEN THE ASSESSEE IS PAYING ` 31 LAKHS OVER AND ABOVE THE SEIZED AMOUNT AT THE TI ME OF SEARCH, IT IS OBVIOUS THAT THIS ADDITIONAL AMOUNT W AS PAID BY THE ASSESSEE TO MEET THE TAX LIABILITY ARISING OUT OF THE ASSESSMENTS CONSEQUENT TO THE SEARCH. 15. THE COMMISSIONER OF INCOME-TAX(APPEALS) IN HIS ORDER HAS RELIED ON THE JUDGMENT OF THE HONBLE MADRAS HIGH C OURT IN THE CASE OF CIT V. K.T.KUNJUMON (239 ITR 782), TO REJEC T THE CONTENTION RAISED BY THE ASSESSEE. IN THE SAID JUD GMENT, THE HONBLE HIGH COURT HAS HELD THAT THE PROVISIONS REL ATING TO SEARCH AND SEIZURE AND CONSEQUENTIAL BLOCK ASSESSMENT OVER RIDE OTHER PROVISIONS OF THE INCOME-TAX ACT, 1961 AND THEREFOR E, CASH SEIZED IN THE COURSE OF SEARCH MUST BE ADJUSTED IN FIRST I NSTANCE TOWARDS THE LIABILITY ARISING OUT OF THE CONSEQUENTIAL BLOC K ASSESSMENT. THE COURT HELD THAT IF ANY SURPLUS IS AVAILABLE AFT ER ADJUSTING THE DEMAND OF BLOCK ASSESSMENT, THE SURPLUS ALONE CAN BE ADJUSTED AGAINST EXISTING LIABILITY. IT IS RELYING ON THE A BOVE RATIO THAT THE ITA 2223 TO 2229/12 :- 10 -: COMMISSIONER OF INCOME-TAX(APPEALS) HAS REJECTED TH E CONTENTION OF THE ASSESSEE. WE FIND THAT THE COMMI SSIONER OF INCOME-TAX(APPEALS) HAS MISCONSTRUED THE FACTS OF T HE CASE AND THE RATIO OF THE ABOVE JUDGMENT OF THE HONBLE MADR AS HIGH COURT. 16. IT IS AN ADMITTED FACT ON RECORD THAT THE ASSES SEE WAS NOT HAVING ANY LIABILITY EXISTING AT THE TIME OF SEARCH . WHAT THE HONBLE HIGH COURT HAS HELD IS THAT NO ADJUSTMENTS CAN BE MADE AGAINST ANY EXISTING LIABILITY PREVAILING AT THE TIME OF SEARCH. THE NEXT DIRECTION OF THE HONBLE HIGH COURT IS THAT TH E SEIZED CASH MUST BE ADJUSTED AGAINST THE LIABILITY ARISING OUT OF THE BLOCK ASSESSMENT. IN THE PRESENT CASE, THE PRAYER OF THE ASSESSEE IS EXACTLY THE SAME. THE REVENUE HAS SEIZED A SUM OF ` 1.65 CRORES ON 16.5.2007 IN THE COURSE OF SEARCH. THERE AFTER THE ASSESSEE HAS PAID ANOTHER SUM OF ` 31 LAKHS ON 17.8.2007. THE ASSESSEE HAS GIVEN IN WRITING TO THE REVENUE AUTHOR ITIES THAT THESE AMOUNTS ARE TO BE ADJUSTED AGAINST THE LIABIL ITY ARISING OUT OF THE BLOCK ASSESSMENT. WHEN THIS IS THE CASE, TH ERE IS NO JUSTICE IN THE ARGUMENT OF THE REVENUE THAT SUCH AD JUSTMENT OF PREPAID AMOUNTS COULD BE MADE ONLY AFTER THE LIABIL ITY IS ASCERTAINED AS A RESULT OF A BLOCK ASSESSMENT AND T HE PREPAID ITA 2223 TO 2229/12 :- 11 -: AMOUNTS CANNOT BE ADJUSTED AGAINST THE ADVANCE TAX LIABILITY OF THE ASSESSEE. 17. THIS IS BECAUSE THE ARGUMENT OF THE REVENUE IS CONTRADICTORY AND SELF-DEFEATING. THE AUTHORITIES BELOW HAVE STATED THAT THERE WAS NO LIABILITY EXISTING AT THE TIME OF SEARCH AND THEREFORE, THE AMOUNT SEIZED FROM THE ASSESSEE COUL D NOT BE ADJUSTED AGAINST THE ADVANCE TAX. IF THERE WAS NO EXISTING LIABILITY OF ADVANCE TAX AGAINST THE ASSESSEE, THEN HOW THE R EVENUE CAN LEVY INTEREST ON THE ASSESSEE UNDER SEC.234B? INTE REST UNDER SEC.234B IS LEVIED ON AN ASSESSEE FOR DEFAULT IN PA YMENT OF ADVANCE TAX. THAT CONTEMPLATES THE EXISTENCE OF LI ABILITY TOWARDS ADVANCE TAX IN THE PREVIOUS YEAR RELEVANT TO THE AS SESSMENT YEAR. IN THE CASE OF THE ASSESSEE, THE SAID LIABILITY TOW ARDS ADVANCE TAX IS LATENT. EVEN THOUGH NOT QUANTIFIED EXACTLY, THE LIABILITY TOWARDS ADVANCE TAX HAS ALREADY BEEN CRYSTALIZED, WHEN THE SEARCH IS COMPLETED BY THE DEPARTMENT. IF THERE COULD HAVE B EEN NO TAX LIABILITY AGAINST THE ASSESSEE CONSEQUENT TO THE SE ARCH, THERE WAS NO PROVOCATION FOR THE DEPARTMENT TO SEIZE THE AMOU NT OF ` 1.65 CRORES AT THE TIME OF SEARCH. THE SEIZURE OF THAT AMOUNT IS MADE TO ADJUST AGAINST THE DEMAND ARISING OUT OF THE CON SEQUENTIAL ITA 2223 TO 2229/12 :- 12 -: ASSESSMENT. WHEN THE REVENUE IS TAKING SUCH A PREC AUTION ON THE PRESUMPTION THAT THE LIABILITY IS GOING TO ARIS E, IT IS FUTILE TO ARGUE THAT THE ASSESSEE HAD NO ADVANCE TAX LIABILIT Y AT THE TIME OF SEARCH. THE SEARCH HAS CREATED THE ADVANCE TAX LIA BILITY AGAINST THE ASSESSEE EXCEPT FOR EXACT QUANTIFICATION. THAT IS WHY, WE AGAIN REPEAT THE QUESTION THAT IF THERE WAS NO SUCH LIABILITY, HOW THE REVENUE LEVIED INTEREST UNDER SEC.234B? IT IS CLEAR THAT THE STAND TAKEN BY THE REVENUE IS CONTRADICTORY. 18. THE INCOME-TAX APPELLATE TRIBUNAL, COCHIN B ENCH IN THE CASE OF SYNTHETIC INDUSTRIAL CHEMICALS LTD. V. DCIT (270 ITR (AT) 98) HAS OBSERVED THAT IT IS TO BE SEEN THAT EVEN T HE PAYMENT OF ADVANCE TAX IS AN ADVANCE PAYMENT OF ASSESSED TAX. IN THE LIGHT OF THE ABOVE PROPOSITION, WHEN THE ASSESSEE HAS WRI TTEN TO THE DEPARTMENT TO TREAT THE SEIZED AMOUNT AGAINST THE T AX LIABILITY ARISING OUT OF THE CONSEQUENTIAL ASSESSMENT, IT IS CLEAR THAT THE ASSESSEE WAS REQUESTING THE DEPARTMENT TO ADJUST TH E AMOUNT TOWARDS ADVANCE PAYMENT OF ASSESSED TAX. 19. IN FACT, THE HONBLE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD. V. CIT (280 ITR 643) HAS DEMYSTIFIED THE PRINCIPLES OF LEVYING AND PAYING INTEREST ON THE AMOUNT OF TAX AN D REFUNDS ITA 2223 TO 2229/12 :- 13 -: PAYABLE. THE COURT HAS EVEN HELD THAT THE REVENUE HAS TO PAY INTEREST ON THE EXCESS ADVANCE TAX PAID BY AN ASSES SEE AND IF NOT PAID SO, INTEREST HAS TO BE PAID EVEN ON THE INTERE ST. 20. THEREFORE, IN THE FACTS OF THE CASE, AS THE ASS ESSEE HAS CLEARLY GIVEN IN WRITING TO THE REVENUE THAT THE AM OUNT OF ` 1.65 CRORES SEIZED AT THE TIME OF SEARCH AND ` 31 LAKHS PAID BY THE ASSESSEE THEREAFTER TO BE ADJUSTED AGAINST THE TAX LIABILITY ARISING OUT OF THE CONSEQUENTIAL ASSESSMENT, IT IS TIME AND AGAIN CLEAR THAT THOSE AMOUNTS SHOULD BE TREATED AS TAX PAID BY THE ASSESSEE IN ADVANCE. THEREFORE, LEVY OF INTEREST UNDER SEC. 234B COULD BE COMPUTED ONLY AFTER FIRST GIVING CREDIT TO THE TWO AMOUNTS OF ` 1.65 CRORES AND ` 31 LAKHS. THE FINDING OF THE COMMISSIONER OF INCOME-TAX(APPEALS) THAT THE AMOUNT OF ` 31 LAKHS WAS PAID BY SRI DURAIPANDI AND THE CREDIT IS TO BE GIVEN TO THA T INDIVIDUAL, IS NOT A CORRECT CONCLUSION. THE ENTIRE AMOUNT HAS BE EN PAID BY THE ASSESSEE IN THE STATUS OF AN A.O.P. FOR AND ON BEHA LF OF THE ASSESSEE-A.O.P. 21. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. K.K.MARKETING, 278 ITR 596, HAS CONSIDERED A SIMILA R ISSUE OF ITA 2223 TO 2229/12 :- 14 -: LEVYING INTEREST UNDER SECTIONS 234B AND 234C. IN THE SAID CASE, ON SIMILAR SET OF FACTS, THE HONBLE HIGH COURT HEL D THAT THE DEPARTMENT SHOULD HAVE APPROPRIATED THE AMOUNT AGAI NST THE ADVANCE TAX LIABILITY OF THE ASSESSEE AND AS SUCH T HE ASSESSEE COULD NOT BE HELD RESPONSIBLE FOR PAYMENT OF INTERE ST UNDER SECTIONS 234B AND 234C OF THE ACT. THE SAME VIEW HAS AGAIN BEEN TAKEN BY THE HONBLE DELHI HIGH COURT IN THE C ASE OF VISHWANATH KHANNA VS. UNION OF INDIA & OTHERS (W.P. (C) NO.21428 OF 2005 DATED 3 RD JUNE, 2011), WHEREIN THE HONBLE HIGH COURT HELD THAT THE ADVANCE TAX PAYABLE SHOUL D BE ADJUSTED FROM THE AMOUNT LYING WITH THE DEPARTMENT IN THE AS SESSEES OWN ACCOUNT WHEN THE ASSESSEE HAS GIVEN IN WRITING TO T HE DEPARTMENT TO MEET THE ADVANCE TAX LIABILITY FROM SUCH AMOUNT WITHHELD BY THE DEPARTMENT. 22. ACCORDINGLY, WE DIRECT THE ASSESSING AUTHORITY TO COMPUTE THE INTEREST, CHARGEABLE UNDER SEC.234B AFTER FIRST GIVING CREDIT TO THE AMOUNT OF ` 1.65 CRORES SEIZED ON 16.5.2007 AND ` 31 LAKHS PAID ON 17.8.2007. THE SEIZED AMOUNT SHALL BE TREA TED AS ADVANCE TAX PAID ON 16.5.2007 ITSELF. THE SUM OF ` 31 LAKHS WILL ITA 2223 TO 2229/12 :- 15 -: BE TREATED AS ADVANCE TAX PAID ON 17.8.2007. THE I NTEREST SHALL BE REWORKED ON THE ABOVE LINES. 23. THE CONTENTION OF THE ASSESSEE REGARDING LEVY O F INTEREST UNDER SEC.234B IS THUS ACCEPTED. 24. ON THE SAME ANALOGY OF THE ABOVE DISCUSSION MAD E IN RESPECT OF SEC.234B, IT IS TO BE HELD THAT WHILE CO MPUTING INTEREST UNDER SEC.234A IT IS NECESSARY TO GIVE CREDIT FOR T HE ABOVE STATED TWO AMOUNTS PAID PRIOR TO THE COMPLETION OF THE ASS ESSMENT. THIS PRINCIPLE HAS BEEN UPHELD BY THE HONBLE SUPREME CO URT IN THE CASE OF PRANOY ROY AND ANOTHER V. CIT (309 ITR 231) . 25. THEREFORE, WHILE COMPUTING INTEREST BOTH UNDER SECTIONS 234A AND 234B, PREPAID AMOUNTS OF ` 1.65 CRORES AND ` 31 LAKHS NEED TO BE GIVEN CREDIT AND THE INTEREST CAN BE CA LCULATED ONLY AFTER GIVING CREDIT TO THESE AMOUNTS AND REDUCING T HE SAME FROM THE ADVANCE TAX LIABILITY AND TAX LIABILITY RESPECT IVELY. 26. IT IS ALSO NECESSARY FOR US TO DEAL WITH THE FI NDING OF THE COMMISSIONER OF INCOME-TAX(APPEALS) THAT THE ISSUE RAISED BY THE ASSESSEE IN HIS APPLICATION UNDER SEC.154 WAS NOT A MISTAKE APPARENT FROM THE RECORDS. HE HAS HELD THAT IT IS NECESSARY TO GO ITA 2223 TO 2229/12 :- 16 -: BEYOND THE RECORDS OF THE CASE AND DEEP INTO THE FA CTS TO DECIDE WHETHER THERE IS A MISTAKE APPARENT OR NOT AND THER EFORE, IT IS A DEBATABLE ISSUE AND CANNOT BE DECIDED IN A PROCEEDI NG UNDER SEC.154. THE MISTAKE APPARENT ON THE FACE OF THE R ECORD DOES NOT MEAN THAT IT IS AN EASY OR CASUAL PROCEDURE. IF TH E MISTAKE IS APPARENT, RECTIFICATION IS CALLED FOR IN SPITE OF T HE VOLUME OF WORK AND EFFORT. VOLUME OF ENQUIRIES AND VERIFICATION I S NOT THE GROUND TO HOLD THAT THERE IS NO MISTAKE APPARENT FROM THE RECORDS. WHAT HAPPENED IN THE PRESENT CASE IS THE COMPLETE BLACK OUT OF FACTS. THE COMMISSIONER OF INCOME-TAX(APPEALS) HIMSELF ADM ITS THAT THERE WAS A SEIZURE OF ` 1.65 CRORES AT THE TIME OF SEARCH AND THERE WAS SUBSEQUENT PAYMENT OF ` 31 LAKHS. THESE TWO AMOUNTS HAVE BEEN COMPLETELY BLACKED OUT AND INTERE ST WAS LEVIED WITHOUT GIVING ANY PRIOR CREDIT TO THE ABOVE AMOUNTS. AT THE SAME TIME, THESE INFORMATION ARE VERY MUCH AVAILABL E ON RECORDS. WITHOUT CONSIDERING THESE ASPECTS, HOW IT IS POSSIB LE TO SAY THAT THE ISSUE IS A DEBATABLE ONE AND SO IT IS NOT A MIS TAKE APPARENT FROM THE RECORDS? WE ARE OF THE VIEW THAT THE COMM ISSIONER OF INCOME-TAX(APPEALS) HAS COME TO THE CONCLUSION ON A HYPER TECHNICALITY. THIS IS A CLEAR MISTAKE APPARENT FR OM THE RECORDS LIABLE FOR RECTIFICATION. ITA 2223 TO 2229/12 :- 17 -: 27. IN THESE CIRCUMSTANCES, WE REPEAT OUR DIRECTION S THAT THE AMOUNT OF ` 1.65 CRORES AND ` 31 LAKHS BE FIRST GIVEN CREDIT AS ADVANCE PAYMENT OF TAX AND INTEREST UNDER SECTIONS 234A AND 234B WILL BE CHARGED ONLY AFTER THAT CREDIT IS EFFE CTED. 28. IN RESULT, THESE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 20 TH OF MARCH, 2013 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (DR.O.K.NARAY ANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 20 TH MARCH, 2013 MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.