DCIT, Ludhiana V. Sh. Sandeep Jain, Ludhiana

ITA 687/CHANDI/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68490 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 05-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, JM ITA NO. 687 & 688/CHD/2013 ASSESSMENT YEAR : 2009-10 D.C.I.T. C.C-I VS. SANDEEP JAIN LUDHIANA C/O LUDHIANA STEEL ROLLING MILLS, G.T ROAD OPP. DHANDARI KALAN RLY STATION, LUDHIANA AAPPJ 9885P (APPELLANT) (RESPONDENT) APPELLANT BY SHRI AKHILESH GUPTA RESPONDENT BY: NONE (ADJOURNMENT APPLICATION REJECTED) DATE OF HEARING 3.9.2013 DATE OF PRONOUNCEMENT 20.9.2013 O R D E R PER T.R.SOOD, A.M THESE APPEALS ARE DIRECTED AGAINST THE ORDER DATED 12.3.2013 OF THE LD. CIT(A)-I, LUDHIANA. THESE WER E HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. ITA NO. 687/CHD/2013 2 IN THIS APPEAL THE RESPONDENT HAS MOVED AN ADJOUR NMENT APPLICATION. ON PERUSAL OF RECORD, IT WAS NOTICED THAT THE ISSUE IS SQUARELY COVERED, THEREFORE, WE REJECTED THE AD JOURNMENT APPLICATION AND PROCEEDED TO HEAR THE APPEAL ON EX- PARTE BASIS. THE REVENUE HAS RAISED VARIOUS GROUNDS OF APPEAL BUT THE LD. DR FOR THE REVENUE POINTED OUT THAT ONLY DI SPUTE IS REGARDING DELETION OF INTEREST LEVIED U/S 234B OF T HE ACT BY THE LD. CIT(A). 3 THE LD. DR FOR THE REVENUE WAS HEARD. 2 4 AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR F OR THE REVENUE AND RELEVANT MATERIAL ON RECORD, WE FIND T HAT A SEARCH WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE AND T HE ASSESSMENT WAS FRAMED U/S 153B/143(3) OF THE ACT T HROUGH WHICH INCOME WAS ASSESSED AT RS. 407,24,850/-. INT EREST U/S 234A, 234B, 234C AND 234D WAS LEVIED. THE ASSESSEE FILED A RECTIFICATION APPLICATION THROUGH WHICH IT WAS STAT ED THAT CASH AMOUNTING TO RS. 1.5 CRORES WHICH WAS FOUND AND SEI ZED DURING SEARCH, WAS NOT TREATED AS ADVANCE TAX DESPITE REQU EST MADE BY THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER DI D NOT ACCEPT THIS CONTENTION AND REJECTED THE APPLICATION . 5 ON APPEAL THE LD. CIT(A) FOUND MERIT IN THE APPEA L OF THE ASSESSEE ALLOWED THE SAME ON THE BASIS OF THE DECI SION OF HON'BLE JURISDICTIONAL HIGH COURT IN CASE OF CIT V. ASHOK KUMAR, 334 ITR 355 (PH). 6 THE LD. DR FOR THE REVENUE RELIED ON THE ORDER OF THE ASSESSING OFFICER BEFORE US. 7 AFTER CONSIDERING THE SUBMISSIONS OF LD. DR FOR T HE REVENUE AND MATERIAL AVAILABLE ON RECORD, WE FIND THAT THIS ISSUE WAS DECIDED BY THE LD. CIT(A) VIDE PARA 4 AND 5 OF HIS ORDER WHICH READS AS UNDER: 4. I HAVE CONSIDERED THE FACTS OF THE CASE AND IT I S APPARENT THAT THE CASH SEIZED AT THE TIME OF SEARCH OPERATIO N HAD BEEN REQUESTED BY THE APPELLANT TO BE ADJUSTED AGAINST H IS ADVANCE TAX LIABILITY AND THE SAID REQUEST HAD BEEN MADE TW ICE IN WRITING BUT NO ACTION ON THE SAME WAS TAKEN BY THE ASSESSING OFFICER. IT IS MANIFEST INJUSTICE TO HOLD ON TO THE CASH BELONGING TO THE ASSESSEE IN THE GOVERNMENT ACCOUNT AND AT TH E SAME TIME CHARGE INTEREST FOR NON PAYMENT OF ADVANCE TAX ON THE DUE DATES. IT IS QUITE APPARENT THAT THE SEIZED CAS H SHOULD HAVE BEEN ADJUSTED AS REQUESTED BY THE ASSESSEE TO MEET THE ADVANCE TAX OBLIGATIONS IN THIS REGARD. THE HONBLE BOMBAY 3 HIGH COURT IN THE CASE OF CIT-I VS. SHRI JYOTINDRA B. MODY IN ORDER DATED 21/09/2011 HAS CLEARLY HELD THAT ONCE T HE ASSESSEE OFFERS TO TAX THE UNDISCLOSED INCOME INCLU DING THE AMOUNT SEIZED DURING SEARCH, THEN THE LIABILITY TO PAY ADVANCE TAX IN RESPECT OF THAT AMOUNT ARISES EVEN BEFORE CO MPLETION OF THE ASSESSMENT. THE HONBLE COURT FURTHER HELD THAT SECTION 132B(1) OF THE ACT DOES NOT PROHIBIT THE UTILIZATIO N OF AMOUNT SEIZED DURING THE COURSE OF SEARCH TOWARDS ADVANCE TAX LIABILITY. FURTHER THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ASHOK KUMAR 334 ITR 355 HAS CLEARLY HELD ON SIMILAR FACTS THAT THE ASSESSEE WAS ENTITLED TO ADJ USTMENT OF SEIZED CASH AGAINST ADVANCE TAX LIABILITY AND THERE FORE NO INTEREST COULD BE CHARGED U/S 234A & 234B IN THE EV ENT OF DEPARTMENT NOT RESPONDING TO ASSESSEES REQUEST FOR ADJUSTMENT OF CASH SEIZED AGAINST ADVANCE TAX LIABI LITY. IN VIEW OF THE CLEAR CUT JUDGEMENT OF THE HONBLE JURI SDICTIONAL HIGH COURT, THE ACTION OF THE AO IN REJECTING THE A PPLICATION OF THE ASSESSEE U/S 154A IS ERRONEOUS. 5. THE ASSESSING OFFICERS OBSERVATION THAT THE DEC ISION OF HONBLE HIGH COURT WOULD NOT BE APPLICABLE AS THE S AME HAS BEEN CHALLENGED IN SLP BEFORE THE HONBLE SUPREME C OURT AMOUNTS TO REFUSAL TO FOLLOW THE DECISION OF HONBL E JURISDICTIONAL HIGH COURT WHICH WOULD BE TREATED AS CONTEMPT OF THE COURT. THE DEPARTMENT HAD FILED SLP AGAINST DECISION OF THE HONBLE HIGH COURT DOES NOT MEAN THAT SAID DECI SION WOULD NOT BE LAW OF LAND TILL CONFIRMED BY THE HONBLE AP EX COURT. THE ASSESSING OFFICER IS THEREFORE DIRECTED TO ACCE PT THE APPLICATION OF THE APPELLANT AND REDUCED THE INTERE ST U/S 234B ACCORDINGLY. THE ABOVE CLEARLY SHOWS THAT THE ISSUE HAS BEEN DEC IDED ON THE BASIS OF DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT V. ASHOK KUMAR (SUPRA). IN THIS CAS E IT WAS HELD AS UNDER: HELD, DISMISSING THE APPEAL, THAT THE ASSESSEE HAD MADE REQUEST FOR ADJUSTMENT OF THE ADVANCE TAX LIABILITY OF RS. 3,14,312 AGAINST THE SEIZED AMOUNT OF RS. 5,90,000 ON AUGUST 28, 1989. SINCE THE FIRST INSTALLMENT OF ADVANCE TA X WAS PAYABLE ON SEPTEMBER 15, 1989 AND THE REQUEST FOR ADJUSTMENT WAS MADE ON AUGUST 28,1989 AND REMINDER ON SEPTEMBER 12,1989, NO INTEREST WAS EXIGIBLE UNDER S ECTIONS 234A AND 234B OF THE ACT. THE TRIBUNAL HAD RIGHTLY HELD THAT THE ASSESSEE WAS ENTITLED TO ADJUSTMENT OF THIS AMO UNT AND NO INTEREST COULD BE CHARGED ON THAT BASIS. FOLLOWING THE ABOVE, WE FIND NOTHING WRONG WITH THE ORDER OF THE LD. CIT(A) AND CONFIRM THE SAME. 4 8 IN THE RESULT, ITA NO. 657/CHD/2013 IS DISMISSED. ITA NO. 688/CHD/2013 9 IN THIS APPEAL IDENTICAL GROUNDS HAVE BEEN RAISED BY THE REVENUE WHICH WE HAVE ALREADY ADJUDICATED IN ABOVE NOTED PARAS NO. 7 AND FOLLOWING THE SAME WE DECIDE THIS I SSUE AGAINST THE REVENUE. 10 IN THE RESULT, ITA NO. 688/CHD/2013 IS DISMISSED . 11 IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.9.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20.9.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR