Kali Commodities Pvt Ltd., Kolkata V. D.C.I.T CC - XXVII,kolkata, Kolkata

ITA 2444/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4447 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 14-09-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 09-10-2013
• Court: TRIBUNAL
• Department Lawyers: SATYENDRA MOHAN DAS
• Assessee Lawyers: J M THARD
• Keywords: Search and seizure; Retrospective amendment; Block assessment
• Section: 153A; 234B; 132

Judgement Text

1 ITA NOS. 131-132/KOL/2014 & ITA NO.2444/KOL/2013 KALI COMMODITIES PVT. LTD.. AY 2010-11-2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI WASEEM AHMED, AM & SHRI K. NARASIMHA CHARY, JM] I.T.A NO. 131/KOL/2014 ASSESSMENT YEAR: 2010-11 & ITA NO.2444/KOL/2013 ASSESSMENT YEAR: 2011-12 & ITA NO.132/KOL/2014 ASSESSMENT YEAR: 2012-13 KALI COMMODITIES PVT. LTD. VS. DEPUTY COMMISSIONE R OF INCOME-TAX, (PAN: AAACJ7846G) CENTRAL CIRCLE-XXVII, KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 14.09.2016 DATE OF PRONOUNCEMENT: 23.09.2016 FOR THE APPELLANT: SHRI J.M. THARD, ADVOCATE FOR THE RESPONDENT: SHRI SATYENDRA MOHAN DAS, ADDL. CIT, SR. DR ORDER PER SHRI K. NARASIMHA CHARY, JM: ALL THESE THREE APPEALS BY ASSESSEE ARE ARISING OUT OF SEPARATE ORDERS OF CIT(A), CENTRAL-II, KOLKATA VIDE APPEAL NOS. 90,91/CC-XXVII /CIT(A)C-II/12-13 DATED 25.11.2013, 24.07.2013 AND APPEAL NO.34/CC-XXVII/CI T(A)C-II/13-14 DATED 19.11.2013 DATED 19.11.2013. SINCE FACTS ARE COMMON AND GROUND S ARE MOSTLY IDENTICAL, WE DISPOSE OF ALL THESE APPEALS BY THIS CONSOLIDATED ORDER FOR TH E SAKE OF CONVENIENCE. 2. BRIEF FACTS OF THE CASE ARE THAT ON 5.1.2010 AN D 26.2.2010, THERE WERE SEARCH AND SEIZURE OPERATIONS ON VARIOUS BANK ACCOUNTS OF THE ASSESSEE BY THE INCOME TAX DEPARTMENT. IN SUCH SEARCH AND SEIZURE OPERATIONS, THE BANK BAL ANCE OF THE ASSESSEE TO A TUNE OF RS.54,35,539/- WAS SEIZED. ASSESSMENT ORDERS U/S 1 53A/143(3) OF THE ACT WERE PASSED FOR THE ASSESSMENT YEARS 2004-05 TO 2009-10. 3. ON 30.03.2011 THE ASSESSEE FILED ITS RETURN OF I NCOME FOR AY 2010-11 ASSESSING ITS LIABILITY TO TAX AT RS.14,40,862/- AND ON 30.03.201 1 IT SUBMITTED A LETTER TO THE AO REQUESTING FOR ADJUSTMENT OF TAX PAYABLE FOR THE AY 2010-11 OU T OF THE CASH SEIZED. SO ALSO, ON 27.04.2012 THE ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2011-12 DECLARING A TOTAL INCOME 2 ITA NOS. 131-132/KOL/2014 & ITA NO.2444/KOL/2013 KALI COMMODITIES PVT. LTD.. AY 2010-11-2012-13 OF RS.34,94,800/- AND ASSESSING TAX THEREON AT RS.1 1,16,074/-, AND ON 10.05.2012 IT FILED A LETTER BEFORE THE AO REQUESTING FOR ADJUSTMENT OF T AX PAYABLE FOR AY 2011-12 OUT OF THE CASH SEIZED. LIKEWISE, ON 10.01.2013 THE ASSESSEE FILED ITS RETURN OF INCOME IN RESPECT OF THE AY 2012-13 DECLARING A TOTAL INCOME OF RS.36,04 ,500/- ASSESSING A TAX OF RS.11,52,010/- AND ON 14.01.2013, IT FILED SIMILAR LETTER FOR ADJU STMENT OF THE TAX PAYABLE. THE AO ASSESSED THE TAX LIABILITY OF THE ASSESSEE FOR AY 2012-13 AT RS.11,13,788/-. AGAIN ON 17.06.2013 THE ASSESSEE FILED ANOTHER LETTER BEFORE THE AO REQUEST ING FOR ADJUSTMENT OF TAX OUT OF THE SEIZED AMOUNT. 4. HOWEVER, THE AO ADDED INTEREST U/S. 234A, 234B A ND 234C OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) FOR ALL TH E THREE YEARS. CHALLENGING THE ACTION OF THE AO IN ADDING THE INTEREST U/S. 234B AND 234C OF THE ACT WITHOUT GIVING CREDIT OF THE SEIZED CASH OF RS.54,35,539/- THE ASSESSEE PREFERRED APPEA LS BEFORE THE LD. CIT(A). LD. CIT(A) BY WAY OF IMPUGNED ORDER TURNED DOWN THE CONTENTION OF THE ASSESSEE UPHELD THE ORDER OF THE AO AND DISMISSED THE APPEALS OF THE ASSESSEE. CHALL ENGING THE SAME, THE ASSESSEE CAME IN APPEALS BEFORE US ON THE FOLLOWING EFFECTIVE SOLE G ROUND: THAT THE LD. CIT(A) ERRED IN LAW AS WELL ON FACTS AND CIRCUMSTANCES IN CONFIRMING THE CHARGING OF INTEREST U/S. 234B & 234C OF THE I. T. ACT, 1961 WITHOUT GIVING CREDIT OF SEIZED AMOUNT. 5. AT THE TIME OF HEARING, LD. AR ARGUED THAT WHEN THE SEIZED AMOUNT IS VERY MUCH AVAILABLE IN THE HANDS OF THE DEPARTMENT AND WHEN T HE ASSESSEE FILED LETTERS BEFORE THE AO AT THE EARLIEST POSSIBLE TIME AFTER FILING OF THE RET URN, THE AO IS NOT JUSTIFIED IN IGNORING THE REQUEST OF THE ASSESSEE AND NOT TO ADJUST THE TAX P AYABLE OUT OF THE CASH SEIZED AND TO MAKE ADDITIONS. WHILE ADMITTING THE LIABILITY OF THE AS SESSEE U/S. 234A OF THE ACT, HE VEHEMENTLY DISPUTED THE ADDITION U/S. 234B AND 234C OF THE ACT . HE PRAYED TO QUASH THE ORDERS OF THE AUTHORITIES BELOW IN THIS REGARD. HE PLACED RELIAN CE ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. M/S. BLB SECURITIES PVT. LTD. ITAT NO. 274 OF 2012 IN GA NO. 3245 OF 2012 DATED 09.01.2013, CIT VS. AMIT SERSARIA, IT A 360 OF 2009 DATED 23.02.2015 AND A DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN I T(SS)A NO.01/KOL/2012, ACIT VS. NARENDRA N. THACKER DATED 28.09.2015. 6. ON THE OTHER HAND, LD. DR VEHEMENTLY OPPOSED THE SE APPEALS ON THE GROUND THAT UNDER THE EXPLANATION U/S. 132B OF THE ACT EXISTING LIABILITY DOES NOT INCLUDE ANY FUTURE LIABILITY AT ALL, AS SUCH, THE AUTHORITIES BELOW AR E JUSTIFIED IN NOT CONSIDERING THE REQUEST OF 3 ITA NOS. 131-132/KOL/2014 & ITA NO.2444/KOL/2013 KALI COMMODITIES PVT. LTD.. AY 2010-11-2012-13 THE ASSESSEE FOR ADJUSTMENT OF SEIZED AMOUNT AGAINS T ADJUSTMENT OF TAX LIABILITY OF THE ASSESSEE. 7. BASING ON THE ABOVE FACTUAL MATRIX AND CONTENTIO NS OF THE RIVAL PARTIES, THE ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE AUTHORI TIES BELOW ARE JUSTIFIED IN DISALLOWING THE ADJUSTMENT OF SEIZED CASH AGAINST THE SELF ASSESSME NT TAX LIABILITY? ISSUE 8. FACTS ARE ADMITTED. A TOTAL CASH OF RS.54,35,53 9/- WAS SEIZED ON 05.01.2010 AND 26.10.2010. SUCH CASH WAS VERY MUCH AVAILABLE IN T HE HANDS OF THE DEPARTMENT AS ON THE DATE OF PASSING THE ASSESSMENT ORDERS IN RESPECT OF THE AYS 2010-11 TO 2012-13. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE FILED LETTERS DA TED 30.03.2011, 10.05.2012, 14.01.2013 AND 17.06.2013 REQUESTING THE AO TO ADJUST THE SEIZED C ASH AGAINST THE TAX LIABILITY OF THE ASSESSEE FOR AYS. 2010-11 TO 2012-13. HOWEVER, SUC H REQUEST WAS NOT CONSIDERED BY THE AO AND THE LD. CIT(A) REFERRED TO THE EXPLANATION ( 2) INSERTED IN SECTION 132B OF THE ACT BY THE FINANCE ACT, 2013 WHICH SAYS FOR REMOVAL OF DOUBT, IT IS HEREBY DECLARED THAT THE EXISTING LIABILITY DOES NOT INCLUDE ADVANCE TAX P AYABLE IN ACCORDANCE WITH THE PROVISIONS OF PART-C OF THE CHAPTER-XVII AND HELD THAT AS PER SUCH EXPLANATION, THE SEIZED CASH LYING WITH THE DEPARTMENT CANNOT BE ADJUSTED AGAINST THE ADVANCE TAX. ON THIS PREMISE, THE LD. CIT(A) PROCEEDED TO HOLD THAT THE AMENDMENT IN SECT ION 132B OF THE ACT IS CLARIFICATORY IN NATURE AND, THEREFORE, APPLICABLE TO ALL THE PENDIN G PROCEEDINGS AND CONFIRMED THE ORDER OF THE AO. 9. NOW THE QUESTION IS THE APPLICABILITY OF SECTIO N 132B OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE ON HAND TO SUSTAIN THE AD DITION OF INTEREST U/S. 234B AND 234C OF THE ACT. IN THE CASE OF M/S. BLB SECURITIES PVT. L TD., SUPRA THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD AS UNDER: MRS. GHUTGHUTIA SUBMITTED THAT UNDER SECTION 132B (I) OF THE INCOME TAX ACT, 1961, THE SEIZED CASH COULD BE ADJUSTED AGAINST AN EXISTING L IABILITY AND COULD NOT HAVE BEEN ADJUSTED AGAINST A LIABILITY WHICH AROSE SUBSEQUENT THERETO. WE ARE UNABLE TO ACCEPT THIS SUBMISSION. IF THE S EIZED CASH CAN BE ADJUSTED AGAINST AN EXISTING LIABILITY, THERE IS NO REASON WHY THE SEIZ ED CASH CANNOT BE ADJUSTED AGAINST A LIABILITY WHICH AROSE IN FUTURE BECAUSE IN THAT CASE THE SEIZ ED CASH WOULD AMOUNT TO SOME SORT OF ADVANCE PAYMENT. WE ARE AS SUCH UNABLE TO FIND ANY MERIT IN THE CONTENTION OF MRS. GHUTGUTIA. 4 ITA NOS. 131-132/KOL/2014 & ITA NO.2444/KOL/2013 KALI COMMODITIES PVT. LTD.. AY 2010-11-2012-13 10. IN THE CASE OF CIT VS. AMIT SERSARIA, SUPRA, TH E QUESTION AROSE WAS WHETHER THE ITAT WAS ERRED IN LAW AS WELL AS IN FACT IN UPHOLDING TH E ORDER OF CIT(A) DELETING THE INTEREST AMOUNT CHARGED U/S. 234B OF THE ACT? THE HONBLE H IGH COURT LOOKED INTO THE NOTIFICATION BEARING F. NO. 400/234/95-(IT(B), DATED 23.05.1996 AND ANSWERED THE QUESTION IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. 11. IN THE CASE OF NARENDRA N. THACKER, SUPRA FOR AY 2006-07 THE COORDINATE BENCH OF THIS TRIBUNAL WHILE COMPREHENSIVELY DEALING WITH TH IS MATTER, VIDE PARA NO. 7 HAS OBSERVED AS UNDER: .. THE PROVISIONS OF SECTION 132B OF THE ACT MAK ES IT CLEAR THAT THE TERMS EXISTING LIABILITY DOES NOT INCLUDE ADVANCE TAX PAYABLE IN ACCORDANCE WITH THE PROVISIONS OF PART C OF CHAPTER XVII. BUT THIS AMENDMENT WAS BROUGHT IN THE STATUT E BY FINANCE ACT 2013 WITH EFFECT FROM 1.6.2013 ONLY. HENCE IT CAN BE SAFELY CONCLUDED TH AT WHAT IS PRECLUDED IN THE STATUTE IS ADJUSTMENT OF SEIZED CASH TOWARDS ADVANCE TAX LIABI LITY ONLY AND NOT SELF ASSESSMENT TAX OR REGULAR TAX AND THAT TOO ONLY WITH EFFECT FROM 1.6. 2013. WE HOLD THAT THE ACTION OF THE ASSESSEE IN SEEKING TO ADJUST THE SEIZED CASH WITH SELF ASSESSMENT TAX PAYABLE ALONG WITH THE RETURN OF INCOME IS IN ORDER AND IN ACCORDANCE WITH SECTION 132B OF THE ACT AS ADMITTEDLY SELF ASSESSMENT TAX PAYABLE BECOMES EXISTING LIABILITY ON THE PART OF THE ASSESSEE TO SETTLE.. ON THE ASPECT OF THE OPERABILITY OF THE AMENDMENT B ROUGHT IN SECTION 132B OF THE ACT, WHETHER RETROSPECTIVE OR PROSPECTIVE, THE OBSERVATI ONS OF THE TRIBUNAL IN THE ABOVE CASE ARE AS UNDER: WE FIND THAT THIS IS A SUBSTANTIVE LAW AND NOT PRO CEDURAL LAW AND IS A SUBSTANTIVE LEVY ON THE PART OF THE GOVERNMENT ON THE ASSESSEE AND HENCE CO ULD BE HELD TO BE PROSPECTIVE IN OPERATION ONLY. RELIANCE IS PLACED ON THE DECISION OF THE APE X COURT IN THE CASE OF CWT VS SHARVAN KUMAR SWARUP AND SONS REPORTED IN 210 1TR 886 (SC), WHEREIN IT WAS HELD THAT :- 'SUBSTANTIVE LAW IS CONCERNED WITH THE ENDS WHICH T HE ADMINISTRATION OF JUSTICE SEEKS; PROCEDURAL LAW DEALS WITH THE MEANS AND INSTRUMENTS BY WHICH THOSE ENDS ARE TO BE ATTAINED. THE LATTER REGULATES THE CONDUCT AND RELATIONS OF C OURTS AND LITIGANTS IN RESPECT OF THE LITIGATION ITSELF; THE FORMER DETERMINES THEIR COND UCT AND RELATIONS IN RESPECT OF THE MATTERS LITIGATED. WHAT FACTS CONSTITUTE A WRONG IS DETERMINED BY THE SUBSTANTIVE LAW; WHAT FACTS CONSTITUTE PROOF OF A WRONG IS A QUESTION OF PROCEDURE. SO FAR AS THE ADMINISTRATION OF JUSTICE IS CONCERNE D WITH THE APPLICATION OF REMEDIES TO VIOLATED RIGHTS, WE MAY SAY THAT THE SUBSTANTIVE LA W DEFINES THE REMEDY AND THE RIGHT, WHILE THE LAW OF PROCEDURE DEFINES THE MODES AND CONDITIONS O F THE APPLICATION OF THE ONE TO THE OTHER. ' IT IS ALSO PERTINENT TO LOOK INTO THE LARGER BENCH DECISION OF THE APEX COURT RENDERED IN THE CASE OF CIT VS VATIKA TOWNSHIP P LTD REPORTED IN 367 ITR 466 (SC), WHEREIN THEIR LORDSHIPS WHILE DECIDING THE ISSUE OF APPLICABILITY OF LEVY OF SURC HARGE U/S 113 OF THE ACT BROUGHT IN THE STATUTE WITH EFFECT FROM 1.6.2002 IS NOT TO BE CONSTRUED AS RETROSPECTIVE IN OPERATION, HAD HELD AS FOLLOWS:- 'WE WOULD ALSO LIKE TO POINT OUT, FOR THE SAKE OF C OMPLETENESS, THAT WHERE A BENEFIT IS CONFERRED BY A LEGISLATION, THE RULE AGAINST A RETR OSPECTIVE CONSTRUCTION IS DIFFERENT. IF A LEGISLATION CONFERS A BENEFIT ON SOME PERSONS BUT WITHOUT INFLICTING A CORRESPONDING 5 ITA NOS. 131-132/KOL/2014 & ITA NO.2444/KOL/2013 KALI COMMODITIES PVT. LTD.. AY 2010-11-2012-13 DETRIMENT ON SOME OTHER PERSON OR ON THE PUBLIC GEN ERALLY, AND WHERE TO CONFER SUCH BENEFIT APPEARS TO HAVE BEEN THE LEGISLATORS OBJECT , THEN THE PRESUMPTION WOULD BE THAT SUCH A LEGISLATION, GIVING IT A PURPOSIVE CONS TRUCTION, WOULD WARRANT IT TO BE GIVEN A RETROSPECTIVE EFFECT. THIS EXACTLY IS THE J USTIFICATION TO TREAT PROCEDURAL PROVISIONS AS RETROSPECTIVE. IN GOVERNMENT OF INDIA V. INDIAN TOBACCO ASSOCIATION, THE DOCTRINE OF FAIRNESS WAS HELD TO BE RELEVANT FA CTOR TO CONSTRUE A STATUTE CONFERRING A BENEFIT, IN THE CONTEXT OF IT TO BE GIVEN A RETRO SPECTIVE OPERATION. THE SAME DOCTRINE OF FAIRNESS, TO HOLD THAT A STATUTE WAS RETROSPECTI VE ILL NATURE, WAS APPLIED IN THE CASE OF VIJAY V. STATE OF MAHARASHTRA. IT WAS HELD THAT WHERE A LAW IS ENACTED FOR THE BENEFIT OF COMMUNITY AS A WHOLE, EVEN IN THE ABSENC E OF A PROVISION THE STATUTE MAY BE HELD TO BE RETROSPECTIVE IN NATURE. HOWEVER, WE ARE CONFRONTED WITH ANY SUCH SITUATION HERE. IN SUCH CASES, RETROSPECTIVELY IS ATTACHED TO BENEF IT THE PERSON IN CONTRADISTINCTION TO THE PROVISION IMPOSING SOME BURDEN OR LIABILITY WHERE THE 'PRESUMPTION ATTACHES TOWARDS PROSPECTIVITY. IN THE INSTANT CASE, THE PR OVISO ADDED TO SECTION 113 OF THE ACT IS NOT BENEFICIAL TO THE ASSESSEE. ON THE CONTRARY, IT IS A PROVISION WHICH IS ONEROUS TO THE ASSESSEE. THEREFORE, IN A CASE LIKE THIS, WE HA VE TO PROCEED WITH THE NORMAL RULE OF PRESUMPTION AGAINST RETROSPECTIVE OPERATION. THUS, THE RULE AGAINST RETROSPECTIVE OPERATION IS A FUNDAMENTAL RULE OF LAW THAT NO STAT UTE SHALL BE CONSTRUED TO HAVE A RETROSPECTIVE OPERATION UNLESS SUCH A CONSTRUCTION APPEARS VERY CLEARLY IN THE TERMS OF THE ACT OR ARISES BY NECESSARY AND DISTINCT IMPLICA TION. DOGMATICALLY FRAMED, THE RULE IS NO MORE THAN A PRESUMPTION, AND THUS COULD BE DI SPLACED BY OUT WEIGHING FACTORS. ' WE FIND THAT THE DECISION OF THE PRINCIPLE LAID DOW N BY THE LARGER BENCH OF THE APEX COURT IN THE CASE OF CIT VS VATIKA TOWNSHIP P LTD IN 367 ITR 466 (SC) WOULD SQUARELY APPLY TO THE APPLICABILITY OF THE AMENDMENT BROUGHT IN SECTION 1 32B WITH EFFECT FROM 1.6.2013 AND ACCORDINGLY WE HOLD THAT THE AMENDMENT BROUGHT IN S ECTION 132B WOULD BE CONSTRUED PROSPECTIVE ONLY AS IT IS A PROVISION WHICH IS ONER OUS TO THE ASSESSEE. 12. ON THE OTHER SIDE, THE LD. DR PLACED RELIANCE O N A DECISION IN THE CASE OF CIT VS. SRI CHAND GUPTA (2015) CTR 342 (DEL.) WHEREIN VIDE PARA 10 TO 12 IT HAS HELD AS UNDER: 10. CLAUSE (I) OF SECTION 132B(I) OF THE ACT AS IT EXISTED IN THE STATUTE BOOK AT THE MATERIAL TIME ENABLES THE INCOME TAX AUTHORITIES TO APPLY TH E ASSETS RETAINED UNDER SECTION 132(5) OF THE ACT TOWARDS ANY 'EXISTING LIABILITY' AS REFERRE D TO IN CLAUSE (III) OF SECTION 132(5) OF THE ACT. BY VIRTUE OF THAT CLAUSE, THE ITO COULD SPECIF Y ANY EXISTING LIABILITY AND RETAIN ASSETS SUFFICIENT TO MEET THE SAME. THE EXPRESSION 'EXISTI NG LIABILITY' AS USED IN SECTION 132(5) OF THE ACT WOULD MEAN A LIABILITY WHICH HAS BEEN DETER MINED AND CRYSTALLIZED AND, THUS, IS CAPABLE OF BEING SPECIFIED IN AN ORDER UNDER SECTIO N 132(5) OF THE ACT. IN ABSENCE OF ANY RETURN FILED, ANY ASSESSMENT MADE OR ANY DETERMINAT IVE PROCESS UNDERTAKEN, THE QUESTION OF THE ITO SPECIFYING A LIABILITY UNDER CLAUSE (III) O F SECTION 132(5) OF THE ACT DOES NOT ARISE. THUS, PLAINLY, THE REFERENCE TO AN 'EXISTING LIABIL ITY' AS USED IN SECTION 132(5)(III) OF THE ACT WOULD MEAN SUCH LIABILITY THAT HAS ALREADY BEEN DET ERMINED AND CRYSTALLIZED SUCH DEMANDS OUTSTANDING IN RESPECT OF PRIOR YEARS WHERE ASSESSM ENT HAVE BEEN MADE FOR OR ANY OTHER LIABILITY THAT STANDS CRYSTALLIZED BY ANY DETERMINA TIVE PROCESS UNDER THE ACT. 11. WE ARE UNABLE TO ACCEPT THE TRIBUNAL'S VIEW THA T PAYMENT OF ADVANCE TAX WAS AN EXISTING LIABILITY AS ON THE DATE OF THE ORDER UNDER SECTION 132(5) OF THE ACT AND, THUS, SEIZED ASSETS COULD BE APPLIED TOWARDS THE SAID LIABILITY AS ON T HAT DATE. ALTHOUGH IT CANNOT BE DISPUTED THAT THE ASSESSEE HAD THE LIABILITY TO PAY THE ADVA NCE TAX, NONETHELESS, THIS LIABILITY COULD NOT HAVE BEEN DETERMINED BY THE AO PRIOR TO THE ASSESSM ENT UNDER THE ACT. ADVANCE TAX IS, ESSENTIALLY, TO BE PAID BY AN ASSESSEE ON THE AMOUN T OF TAXABLE INCOME ESTIMATED BY IT. THE AO CAN DETERMINE WHETHER PAYMENT OF ADVANCE TAX PAI D FELL SHORT OF THE REQUIRED AMOUNT ONLY WHEN AN ASSESSEE'S INCOME IS ASSESSED. THUS, A T THE STAGE OF SECTION 132(5) OF THE ACT, SUCH LIABILITY IN RESPECT OF THE ASSESSEE'S INCOME FOR THE PREVIOUS YEAR 1990-91 COULD NOT BE SPECIFIED UNDER CLAUSE (III) OF SECTION 132(5) OF T HE ACT. 6 ITA NOS. 131-132/KOL/2014 & ITA NO.2444/KOL/2013 KALI COMMODITIES PVT. LTD.. AY 2010-11-2012-13 12. ADMITTEDLY, NO ORDER UNDER SECTION 132B OF THE ACT WAS PASSED FOR APPLYING CASH SEIZED AND RETAINED BY THE I'I'O. IT IS NOT DISPUTED THAT THE ASSESSEE HAD ALSO NOT MADE ANY REQUEST THAT THE AMOUNT SEIZED BY THE ITO BE APPLIED TOWARD S THE DISCHARGE OF ITS LIABILITY UNDER THE ACT. THUS, THE ASSETS RETAINED BY THE ITO COULD NOT HAVE BEEN APPROPRIATED TOWARDS THE PAYMENT OF TAX UNTIL THE ASSESSEE HAD FILED A RETUR N INDICATING THE APPLICATION OF SEIZED CASH TOWARDS ITS TAX LIABILITY OR TILL AN ASSESSMENT WAS FRAMED FOR THE ASSESSMENT YEAR 1991- 1992. 13. HE FURTHER RELIED ON THE DECISION IN THE CASE O F HEMANT KUMAR SINDHI & ANR. VS.CIT (2014) 364 ITR 555 (ALL), WHEREIN IT HAS HELD AS UN DER: UNDER CLAUSE (I) OF SUB-SECTION (I) OF SECTION 13 2 B, ASSETS WHICH ARE SEIZED UNDER SECTION 132 OR REQUISITIONED UNDER SECTION 132A CAN BE DEAL T WITH TOWARDS THE AMOUNT OF ANY EXISTING LIABILITY UNDER THE INCOME TAX ACT, 1961 (AND OTHER STATED LEGISLATIONS) AND THE AMOUNT OF LIABILITY DETERMINED ON COMPLETION OF THE ASSESSMEN T UNDER SECTION 153A AND THE ASSESSMENT OF THE YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS INITIATED OR THE AMOUNT OF LIABILITY DETERMINED ON COMPLETION OF THE ASSESSMEN T UNDER CHAPTER XL V-B FOR THE BLOCK PERIOD INCLUDING PENALTY OR INTEREST. THE CRUCIAL W ORDS WHICH ARE USED IN CLAUSE (I) ARE 'THE AMOUNT OF ANY EXISTING LIABILITY' AND 'THE AMOUNT O F THE LIABILITY DETERMINED'. THE WORDS 'EXISTING LIABILITY' POSTULATES A LIABILITY THAT IS CRYSTALLIZED BY ADJUDICATION. SIMILARLY, A LIABILITY IS DETERMINED ON COMPLETION OF THE ASSESS MENT OR AS THE CASE MAY BE, THE BLOCK ASSESSMENT. UNTIL THE ASSESSMENT IS COMPLETE, IT CA NNOT BE POSTULATED THAT A LIABILITY HAS BEEN CRYSTALLIZED. THE FIRST PROVISO TO CLAUSE (I) STATE S THAT THE ASSESSEE MAY MAKE AN APPLICATION TO THE ASSESSING OFFICER FOR RELEASE OF THE ASSET WHIC H HAS BEEN SEIZED. HOWEVER, THE ASSESSEE HAS TO EXPLAIN THE NATURE AND SOURCE OF ACQUISITION OF THE ASSET TO THE SATISFACTION OF THE ASSESSING OFFICER. IN OTHER WORDS, IT IS NOT THE IPSE DIXIT O F THE ASSESSEE BUT THE SATISFACTION OF THE ASSESSMENT OFFICER ON THE BASIS OF THE EXPLANATION TENDERED BY THE ASSESSEE WHICH IS MATERIAL. MOREOVER, IN SUCH A CASE THE AMOUNT OF AN EXISTING LIABILITY CAN BE RECOVERED FROM OUT OF SUCH ASSET; SUCH ASSET BEING THE ASSET WHICH IS REFERRED TO IN THE SUBSTANTIVE PART OF CLAUSE (I). 14. AMENDMENT OF SECTION 132B OF THE ACT AFFECTS RI GHTS, LIABILITIES AND DISABILITIES OF THE ASSESSEES BECAUSE OF SUBSTANTIVE LEVY ON THE PART OF THE GOVERNMENT, AS SUCH, THEY CANNOT BE STATED TO BE THE PROCEDURAL LAW IN ESSENCE IT IS S UBSTANTIVE IN NATURE. IN VIEW OF THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF C IT VS. VATIKA TOWNSHIP P. LTD. REPORTED IN 367 ITR 466 (SC), WE ARE INCLINED TO HO LD THAT THE AMENDMENT BROUGHT IN SECTION 132B OF THE ACT W.E.F. 01.06.2003 IS ONLY P ROSPECTIVE IN NATURE AND IT CANNOT BE APPLIED TO THE ASSESSMENT YEARS EARLIER THERETO. 15. IT IS THE ARGUMENT OF THE LD. AR THAT IN VIEW O F THE BINDING DECISIONS OF THE JURISDICTIONAL HIGH COURT IN M/S. BLB SECURITIES PV T. LTD., SUPRA AND AMIT SERSARIA, SUPRA THE DECISIONS OF OTHER HIGH COURTS CANNOT BE RELIED UPON BECAUSE THOSE ARE ONLY PERSUASIVE IN NATURE. WE FIND STRENGTH IN THE ARGUMENT OF THE LD. COUNSEL AND ARE INCLINED TO FOLLOW THE DECISIONS OF, THE DECISION OF HONBLE JURISDICT IONAL HIGH COURT WHEREIN THEIR LORDSHIP HELD THAT IF THE SEIZED CASH CAN BE ADJUSTED AGAINS T THE EXISTING LIABILITY THE SAME CAN BE 7 ITA NOS. 131-132/KOL/2014 & ITA NO.2444/KOL/2013 KALI COMMODITIES PVT. LTD.. AY 2010-11-2012-13 ADJUSTED AGAINST THE LIABILITY WHICH AROSE IN FUTUR E ALSO BECAUSE IN THAT CASE THE SEIZED CASH WOULD AMOUNT TO SOME SORT OF ADVANCE PAYMENT. 16. DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT IN M/S. BLB SECURITIES PVT. LTD. AND AMIT SERSARIA AND THE DECISION OF THE TRIBUNAL IN T HE CASE OF NARENDRA N. THACKER, SUPRA, ARE APPLICABLE TO THE FACTS AND THE DECISIONS OF HO NBLE JURISDICTIONAL HIGH COURT ARE BINDING ON THIS TRIBUNAL. RESPECTFULLY FOLLOWING T HE SAME WE HOLD THAT THE ACTION OF THE AUTHORITIES BELOW IN NOT ADJUSTING THE SEIZED CASH TOWARDS THE TAX LIABILITY OF THE ASSESSEE FOR AYS 2010-11 TO 2012-13 AND CHARGING OF INTEREST U/S . 234B AND 234C OF THE ACT FOR NON- PAYMENT OR SHORT PAYMENT OF ADVANCE TAX ARE BAD IN LAW. WE CONSEQUENTLY HOLD THAT NO INTEREST U/S. 234B AND 234C OF THE ACT SHALL BE CHA RGED BY THE AO FROM THE DATE OF SEIZURE OF THE CASH TILL THE DATE OF COMPLETION OF ASSESSME NT IN RESPECT OF AYS. 2010-11 TO 2012-13. WE ANSWER THE POINT ACCORDINGLY IN FAVOUR OF THE AS SESSEE AND ALLOW ALL THESE APPEALS OF THE ASSESSEE. 17. IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE ALLOWED. 18. ORDER IS PRONOUNCED IN THE OPEN COURT ON 23.09. 2016 SD/- SD/- (WASEEM AHMED) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23RD SEPTEMBER, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT KALI COMMODITIES PVT. LTD., 9, INDIA EX CHANGE PLACE, 4 TH FLOOR, KOLKATA-700 001. 2 RESPONDENT DCIT, C.C. XXVII, KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .