Release the seized cash – Board directs the field.
Now that the Ombudsman is in place, the CBDT has realized that the department is sitting on a neat pile of seized cash which is not returned even after the case is settled on flimsy grounds like pending appeals. Now the CBDT has instructed that
(a) Where an application is made for release of seized cash and the nature and acquisition of such cash is explained to the satisfaction of the Assessing Officer, the seized cash should be released after adjustment of any existing liability.
(b) Where seized cash or part thereof was not released, the amount lying in PD account should be released within one month of passing the (search and seizure) assessment.
(c) Where assessee is in appeal against the assessment order and the penalty has not been imposed up to the date of the order of the CIT(Appeals), the position regarding the amount lying in the PD Account should be reviewed at the time of giving effect to the order of the CIT(Appeals). Only such amount thereof should be retained which is sufficient to meet the expected amount of penalty imposable on the assessment as revised in appeal effect. The balance should be released within one month from the order, after recovery of any existing demand at that time,
(d) The amount, which was retained after the assessment order or the order of the CIT(Appeals) for the amount of penalty imposable, should be released within one month from passing of the penalty order, after recovery of demand arising out of the penalty order and any other demand existing at that time.
(e) Where assessment was made before issue of this Instruction and cash in PD account has not yet been dealt with or partly dealt with, all the Assessing Officers should examine such cases and amount lying in the PD Account be released within one month from the date of this Instruction.
The CBDT has informed the field that any disobedience of the instructions will be viewed seriously by the Board. The Board also wants all Commissioners to ensure that
1. no amount in their PD Accounts is retained merely because of the reason that Department is in appeal before the ITAT/HC/SC.
2. the amount to be retained on account of expected penalty demand should not exceed the amount of penalty imposable on the basis of assessment order
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CBDT INSTRUCTION NO. 11/2006., Dated: December 1, 2006