After search, as per amended provision by the Finance Act 2010, where assessee files application with Settlement Commission for settlement of his cases, the cash seized during search be permitted to be adjusted against the tax due as per the offer made by the assessee in the settlement application. It may be mentioned that as per the provision contained in this regard, the assessee has to make additional disclosure of income in the settlement petition and pay additional tax of Rs. 50 Lakhs before filing the application with the Settlement Commission.
Since cash is seized at the time of search and lying in PD account of CIT, such cash after adjusting existing tax liabilities, may be permitted to be adjusted against the tax due as per settlement petition. Suitable amendment / instruction are required to be given to the authorities in the matter since they are not permitting such adjustment for want of clarity.
(SUGGESTIONS TO REDUCE / MINIMIZE LITIGATIONS)