Deputy Commissioner of Income-tax, V. Smt. Pragati Dinesh Bothra, Pune

ITA 1399/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7703 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 27-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Assessee Lawyers: ABHAY KULKARNI
• Keywords: Search and seizure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , !' , #$ BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO.1399/PUN/2015 #% & '& / ASSESSMENT YEAR : 2012-13 THE DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(1) PUNE. .. APPELLANT VS. SMT.PRAGATI DINESH BOTHRA, ASHIYANA, BUNGLOW NO.98, NATIONAL SOCIETY LTD., ANUDH, PUNE. PAN: ABCPB4853 .. RESPONDENT ASSESSEE BY : SHRI ABHAY KULKARNI DEPARTMENT BY : SMT.NIRUPAMA KOTRU DATE OF HEARING : 21-08-2017 DATE OF PRONOUNCEMENT : 21-08-2017 / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE O RDER OF COMMISSIONER OF INCOME TAX(APPEALS), PUNE-11 DATED 14/08/2 015 FOR THE A.Y. 2012-13. 2. THE SOLITARY ISSUE RAISED BY THE DEPARTMENT IN APPEAL IS AGAINST THE FINDINGS OF CIT(A) IN ALLOWING CASH SEIZED DURING SEARCH AND SEIZURE ITA NO.1399/PUN/2015 SMT.PRAGATI DINESH BOTHRA. 2 PROCEEDINGS TO BE ADJUSTED AGAINST THE ADVANCE TAX LIAB ILITY FOR FINANCIAL YEAR 2011-12. 3. THE BRIEF FACTS GERMANE TO THE PRESENT APPEAL ARE: DURING THE COURSE OF SEARCH PROCEEDINGS RS.1,13,00,000/- CASH WAS SE IZED. THE ASSESSEE VIDE LETTER DATED 13/02/2012 OFFERED TO TAX TH E ENTIRE CASH SEIZED AND REQUESTED THE DEPUTY DIRECTOR INVESTIGATION, PUNE T O TREAT THE SAID CASH SEIZED AS PAYMENT TOWARDS ADVANCE TAX. THE ASSE SSING OFFICER WHILE PASSING ASSESSMENT ORDER UNDER SECTION 143(3) RAISED DEM AND OF RS.1,21,27,756/-. WHILE COMPUTING TAX LIABILITY THE ASSESSING OFFIC ER DID NOT GRANT CREDIT OF CASH SEIZED RS.1,13,00,000/- AS PAYMEN T OF ADVANCE TAX DESPITE SPECIFIC REQUEST OF ASSESSEE. 4. THEREAFTER, THE ASSESSING OFFICER VIDE LETTER DATED 24/0 6/2014 FOR THE FIRST TIME PROVIDED CREDIT IN RESPECT OF CASH SEIZED RS .1,13,00,000/- AGAINST THE TAX LIABILITY. HOWEVER, INSTEAD OF TREATING THE SAID CASH AS PAYMENT OF ADVANCE TAX THE ASSESSING OFFICER REDUCED THE SAME FROM TOTAL TAX DEMAND AS CASH RELEASED. IN FIRST APPELLATE PROC EEDINGS, THE CIT(A) BY FOLLOWING VARIOUS DECISIONS OF THE TRIBUNAL DIRECTED THE AS SESSING OFFICER TO ADJUST SEIZED CASH AS PAYMENT OF ADVANCE TAX FROM THE DATE OF REQUEST MADE BY THE ASSESSEE IN THIS REGARD. 5. SHRI.ABHAY KULKARNI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT RECENTLY CBDT VIDE CIRCULAR NO.20/2017 DATED 12/06 /2017 AS DIRECTED THAT EXPLANATION-2 TO SECTION 132B OF THE ACT SHALL HAVE PROSPECTIVE APPLICATION AND THE APPEALS ALREADY FILED BY THE DEPARTMENT IN ITA NO.1399/PUN/2015 SMT.PRAGATI DINESH BOTHRA. 3 RESPECT OF CASES PRIOR TO 01/06/2013 MAY BE WITHDRAWN/ NOT PRESSED UPON. 6. SMT.NIRUPAMA KOTRU REPRESENTING THE DEPARTMENT HAS NOT DISPUTED THE FACTS. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED T HAT IN THE LIGHT OF CBDT CIRCULAR NO. 20/2017 THE APPEAL IS NOT PRESSED. 7. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PER USED. THE FACTS CULLED OUT FROM THE IMPUGNED ORDER ARE NOT IN DISPUT E. THE CBDT IN A RECENT CIRCULAR NO. 20/2017 (SUPRA) AS CLARIFIED REGARDING APPLICABILITY OF EXPLANATION-2 TO SECTION 132B OF THE ACT. THE RELEVANT E XTRACT OF THE CIRCULAR READS AS UNDER: 2. DISPUTE AROSE BETWEEN THE DEPARTMENT AND THE AS SESSEE WITH REGARD TO ADJUSTMENT OF SUCH SEIZED/REQUISITIONED CASH AGA INST ADVANCE TAX LIABILITY ETC. SEVERAL COURTS HELD THAT ON AN APPL ICATION MADE BY THE ASSESSEE, THE SEIZED MONEY IS TO BE ADJUSTED AGAINS T THE ADVANCE TAX LIABILITY OF THE ASSESSEE. SUBSEQUENTLY, EXPLANATI ON 2 TO SECTION 132B OF THE ACT WAS INSERTED BY THE FINANCE ACT, 2013 W.E.F. 01 -06-2013, CLARIFYING THAT EXISTING LIABILITY DOES NOT INCLUDE ADVANCE TAX P AYABLE IN ACCORDANCE WITH THE PROVISIONS OF PART C OF CHAPTER XVII OF THE ACT . HOWEVER, THE DISPUTE CONTINUED ON THE ISSUE AS TO WHETHER THE AMENDMENT WAS CLARIFICATORY IN NATURE HAVING RETROSPECTIVE APPLICABILITY OR IT HAS ONLY PROSPECTIVE APPLICABILITY. 3. SEVERAL COURTS HAVE HELD THAT THE INSERTION OF E XPLANATION 2 TO SECTION 132B OF THE ACT, IS PROSPECTIVE IN NATURE AND NOT A PPLICABLE TO CASES PRIOR TO 01.06.2013. THE SLPS FILED BY THE DEPARTMENT AGAIN ST THE JUDGEMENT OF THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F COSMOS BUILDERS AND PROMOTERS LTD. 1 AND THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE O F SUNIL CHANDRA GUPTA 2 , HAVE BEEN DISMISSED. SUBSEQUENTLY, THE CBDT HAS ALSO ACCEPTED THE JUDGMENT OF THE HON'BLE PUNJAB & HARYA NA HIGH COURT IN THE CASE OF SPAZE TOWERS PVT. LTD. 3 DATED 17.11.2016, WHEREIN IT WAS HELD THAT THE EXPLANATION 2 TO SECTION 132B OF THE ACT IS PRO SPECTIVE IN NATURE. 4. ACCORDINGLY, IT HAS NOW BEEN SETTLED THAT INSERT ION OF EXPLANATION 2 TO SECTION 132B OF THE ACT SHALL HAVE A PROSPECTIVE AP PLICATION AND SO, APPEALS MAY NOT BE FILED BY THE DEPARTMENT ON THIS ISSUE FO R THE CASES PRIOR TO 01.06.2013 AND THOSE ALREADY FILED MAY BE WITHDRAWN /NOT PRESSED UPON. ITA NO.1399/PUN/2015 SMT.PRAGATI DINESH BOTHRA. 4 THUS, IN VIEW OF AFOREMENTIONED CBDT CIRCULAR, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED AS NOT PRESSED. ORDER PRONOUNCED IN OPEN COURT AFTER HEARING ON MOND AY, THE 21 ST DAY OF AUGUST, 2017. SD/- SD/- ( . /D.KARUNAKARA RAO) ( !' / VIKAS AWASTHY) / ACCOUNTANT MEMBER #/ JUDICIAL MEMBER / PUNE; / DATED : 21 ST AUGUST, 2017. S S . . G G . . R R *+#,-!.!', / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), PUNE-11. 4. THE DGIT(INV.), PUNE. 5. , ! , #$ , / DR, ITAT, B BENCH, PUNE. 6. %& '( / GUARD FILE. / BY ORDER, / / TRUE COPY / / ., $ / SR. PRIVATE SECRETARY, ! , / ITAT, PUNE