The Deputy Commissioner of Income Tax, Amritsar. V. M/s Shanker Kumar kedia HUF, Amritsar.

ITA 733/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0761 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-05-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 09-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Assessee Lawyers: SSH ASHWANI KALIA; HARSH AGGARWAL CAS
• Keywords: Retrospective amendment
• Section: 234B; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.733(ASR)/2014 ASSESSMENT YEAR:2012-13 PAN: AAFHS4329K DY. COMMR. OF INCOME TAX, VS. SH. SHANKER KUMAR KED IA, HUF, CENTRAL CIRCLE, PROP. M/S.MALI RAM JEWELLERS, AMRITSAR. GURU BAZAR, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. S. S. KANWAL, DR RESPONDENT BY: S.SH. ASHWANI KALIA AND HARSH AGGAR WAL, CAS DATE OF HEARING: 12/05/2016 DATE OF PRONOUNCEMENT: 19/05/2016 ORDER THIS IS THE DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2012-13, AGAINST THE ORDER, DATED 25.09.2014, PASSED BY THE LD. CIT(A)-1, LUDHIANA. THE DEPARTMENT HAS RAISED THE FOLLOWING G ROUNDS OF APPEAL: 1.(A) WHETHER ON THE FACTS AND CIRCUMSTANCES OF TH E CASE THE DECISION OF CIT(A) IS CORRECT IN WHICH HE HAS DIREC TED THE AO TO RE-WORK THE INTEREST LEVIABLE U/S 234B & 234C OF THE I.T.ACT, 1961 AS PER THE DECISION OF HONLBLE PUNJA B & HARYANA HIGH COURT IN THE CASE OF CIT VS. ASHOK KUM AR 334 ITR 355 ON WHICH THE ASSESSEE RELIED. (B) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(A) IS RIGHT WHILE ALLOWING THE APPEAL OF THE AS SESSEE IN NOT APPRECIATING THE FACT THAT THE ASSESSEE HAD MAD E A REQUEST FOR ADJUSTMENT OF SEIZED CASH TOWARDS INSTA LLMENTS OF ADVANCE TAX ON 03.04.2012 I.E., AFTER THE DATES OF PAYMENT OF INSTALLMENTS OF ADVANCE TAX THAT WERE PAYABLE I N F.Y. 2011-12 HAD ALREADY EXPIRED. ITA NO.733(ASR)/2014 ASSESSMENT YEAR:2012-13 2 2. THE FACTS ARE THAT VIDE ORDER, DATED 26.11.2013 , PASSED UNDER SECTION 154 OF THE ACT, THE AO REJECTED THE ASSESSE ES REQUEST FOR ADJUSTMENT OF SEIZED CASH OF RS.1,14,90,000/- AGAIN ST ADVANCE TAX. 3. THE LD. CIT(A), VIDE IMPUGNED ORDER, ALLOWED THE ASSESSEES APPEAL. 4. THE DEPARTMENT IS NOW IN APPEAL BEFORE US. 5. THE LD. DR CONTENDED THAT THE LD. CIT(A) WAS NO T CORRECT IN DIRECTING THE AO TO REWORK THE INTEREST LEVIABLE U/ S 234B & 234C OF THE I.T. ACT, 1961 AS PER THE DECISION OF THE HONBLE P UNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ASHOK KUMAR, 334 ITR 355, RELIED ON BY THE ASSESSEE. HE FURTHER STATED THAT THE LD. CIT(A) WA S NOT RIGHT IN APPRECIATING THE FACT THAT THE ASSESSEE HAD MADE A REQUEST FOR ADJUSTMENT OF SEIZED CASH TOWARDS INSTALLMENTS OF A DVANCE TAX ON 03.04.2012 FOR THE F.Y. 2011-12, I.E., AFTER THE DA TES OF PAYMENT OF INSTALLMENTS OF ADVANCE TAX THAT WERE PAYABLE IN F .Y. 2011-12, WHICH HAD ALREADY EXPIRED. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE RELIED ON THE IMPUGNED ORDER. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A), WHILE ACCEPTIN G THE ASSESSEES REQUEST, MADE THE FOLLOWING OBSERVATIONS: I HAVE CONSIDERED THE FACTS OF THE CASE, THE BASIS OF ADDITION MADE BY THE AO AND THE ARGUMENTS OF THE AR ON THE ISSUE. IT IS SEEN THAT SEARCH IN THE CASE OF THE ASSESSEE HAD BEEN CONDUCT ED ON 14.03.2012 LEADING TO CASH SEIZED OF RS.1,14,90,000 /- AND THE ASSESSEE REQUESTED FOR ADJUSTMENT OF SEIZED CASH O N 3.4.2012 I.E., AFTER THE CLOSING OF THE FINANCIAL YEAR. THEREFORE, THE SEIZED CASH ITA NO.733(ASR)/2014 ASSESSMENT YEAR:2012-13 3 COULD NOT HAVE BEEN AVAILABLE FOR ADJUSTMENT AGAIN ST ADVANCE TAX LIABILITY OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2 012-13. IT IS HOWEVER ACCEPTABLE THAT THE SAID SEIZED CASH COULD HAVE BEEN ADJUSTED AT THE TIME OF PROCESSING OF THE CASE AS S ELF ASSESSMENT AX LEADING TO REDUCTION OF AN INTEREST LEVIABLE U/S 2 34C. IT, THEREFORE BECOMES CLEAR THAT THE RESPONSIBILITY FOR NOT ADJUS TING THE CASH SEIZED DURING THE SEARCH OPERATION WITHIN A MONTH O R SO OF INTIMATION/REQUEST BY THE ASSESSEE FALLS WITH THE A .O. THE ASSESSEE HAS REQUESTED THAT HE WAS ELIGIBLE FOR CONSEQUENTIA L BENEFIT. THE FACTS OF THE CASE ARE SIMILAR TO THE FACTS IN RESPE CT OF CIT V/S ASHOK KUMAR, 335 ITR 355, WHEREIN THE HON'BLE JURISDICTIO NAL HIGH COURT HAS DIRECTED THE ADJUSTMENT OF SEIZED CASH TO WARDS ADVANCE TAX LIABILITY. IT IS HOWEVER TO BE NOTICED THAT TH E ASSESSEE HAD MADE APPLICATIONS FOR ADJUSTMENT OF SEIZED CASH ON 03.04.2012 AND THEREFORE THE ONUS TO MAKE THE IMPUGNED ADJUSTM ENT CANNOT BE PUT ON THE ASSESSING OFFICER BEFORE THAT. THE FA CTS OF THE CASE UNDER CONSIDERATION ARE THEREFORE LITTLE DIFFERENT IN THIS REGARD. IT HOWEVER, REMAINS FACT THAT AT THE TIME OF FILING OF THE RETURN OF INCOME THE SELF ASSESSMENT TAX COULD HAVE BEEN TAKE N OUT OF THE SEIZED CASH OF RS.1,14,90,000/- LEADING TO REDUCTIO N IN THE IMPOSITION OF INTEREST U/S 234BC. 5. THE AMENDMENT TO SECTION 132B IN FINANCE ACT 201 3 HAS ALSO BEEN CONSIDERED WHILE DECIDING THE APPEAL UNDER CON SIDERATION. THE AMENDMENT BROUGHT IN BY THE FINANCE ACT 2013 RE ADS AS UNDER:- 'FOR THE REMOVAL OF DOUBTS, IT IS THEREBY DECLARED THAT THE 'EXISTING LIABILITY' DOES NOT INCLUDE ADVANCE TAX P AYABLE IN ACCORDANCE WITH THE PROVISION OF PART C OF CHAPTER XVII. IT IS ALSO SEEN THAT THE SAID AMENDMENT IS EFFECTIV E FROM THE DATE OF PASSING OF FINANCE ACT 2013. SINCE THE AMEN DMENT BROUGHT IN BY THE FINANCE ACT 2013 IS CLARIFICATORY IN NATU RE, A QUESTION ARISES AS TO WHETHER IT IS RETROSPECTIVE IN ITS IM PACT OR NOT. THE AR IN THIS REGARD HAS BROUGHT MY ATTENTION TO THE AMEN DMENT TO SECTION 9 EXPLANATION 4 WHEREIN THE LEGISLATURE HAS EXPRESSLY SPECIFIED THAT IT WOULD BE RETROSPECTIVE W.E.F. 01. 06.1976 EVEN THOUGH IT HAD BEEN INSERTED BY THE FINANCE ACT, 201 2. THE LANGUAGE OF THE EXPLANATION 4 REFERRED TO ABOVE REA DS AS UNDER: FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIED . SIMILARLY THE LANGUAGE USED IN RESPECT OF AMENDMEN T BROUGHT IN TO SECTION 132B BY FINANCE ACT, 2013 REA DS AS UNDER: ITA NO.733(ASR)/2014 ASSESSMENT YEAR:2012-13 4 FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT 6. IN VIEW OF THE ABOVE ANALYSIS IT BECOMES CLEAR THAT THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2013 DOES NOT HAVE RETROSPECTIVE EFFECT AND THEREFORE THE JUDGMEN T OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. ASHOK KUMAR, 334 ITR 355 REMAINS THE LAW FOR THE PU RPOSES OF ISSUE UNDER CONSIDERATION. THEREFORE, THE AO IS DIRECTED TO REWORK THE INTEREST LEVIABLE U/S 234BC. 8. IT REMAINS UNDISPUTED THAT RS.1,14,90,000/- WAS SEIZED IN THE SEARCH CONDUCTED ON THE ASSESSEE. IT ALSO HAS NOT B EEN DISPUTED THAT THE ASSESSEE HAS REQUESTED FOR ADJUSTMENT OF ASSESSEES CASH AGAINST ADVANCE TAX DUE, VIDE HIS LETTER DATED 03.04.2012. AN APPLICATION FOR RECTIFICATION U/S 154 OF THE ACT WAS SUBMITTED ON 22.11.2013 TO DCIT (CENTRAL CIRCLE) AND THE SAME WAS REJECTED VIDE ORD ER DATED 26.11.2013 ON THE GROUND THAT THE SEIZED CASH COULD NOT BE ADJ USTED AGAINST ADVANCE TAX LIABILITY, WHICH IS NOT EXISTING LIABIL ITY U/S 132-B OF THE ACT. THE LD. CIT(A) HAS FOLLOWED THE DECISION IN THE CAS E OF CIT VS. ASHOK KUMAR, 334 ITR 355 (P&H) WHEREIN, SEIZED CASH WAS DIRECTED TO BE ADJUSTED TOWARDS ADVANCE TAX LIABILITY UNDER SIMI LAR CIRCUMSTANCES. THE LD. CIT(A) HAS NOTED THAT SINCE THE ASSESSEE HAD FI LED APPLICATION FOR ADJUSTMENT ON 03.04.2012, THE ONUS TO MAKE THE IMP UGNED ADJUSTMENT WAS NOT THAT OF THE A.O. HOWEVER, THE LD. CIT(A) ALSO TOOK NOTE OF THE FACT THAT AT THE TIME OF FILING THE RETURN OF INCO ME, THE SELF- ASSESSMENT TAX COULD HAVE BEEN TAKEN OUT OF THE SEIZED CASH LE ADING TO REDUCTION IN THE IMPOSITION OF THE INTEREST U/S 234B & 234C. ITA NO.733(ASR)/2014 ASSESSMENT YEAR:2012-13 5 9. THE FACTUM OF THE AMENDMENT TO SECTION 132B, BRO UGHT IN BY THE FINANCE ACT, 2013, BEING PROSPECTIVE, HAS BEEN DULY TAKEN NOTE OF BY THE LD. CIT(A). THIS HAS ALSO BEEN CONSIDERED BY THIS B ENCH VIDE ORDER, DATED 31.08.2015, PASSED IN ITA NO. 185(ASR)/2015 FOR THE ASSESSMENT YEAR 2011-12 IN THE CASE OF DCIT VS. SURINDER KUMAR KHI NDRI, WHEREIN, THE ISSUE WAS OF PENALTY UNDER SECTION 27AAA. IT WAS OB SERVED THEREIN, AS UNDER: WE FIND THAT THE EXPLANATION 2 TO SECTION 132B, AS FINANCE ACT, 2013 CLEARLY STATES IS EFFECTIVE FROM IST JUNE, 201 3. WHEN THE LAW SO SPECIFICALLY STATES, THERE IS NO SCOPE OF HOLDI NG THAT IT IS RETROSPECTIVE IN EFFECT. THIS PROVISION RESTRICTS T HE SCOPE OF ADJUSTMENT OF SEIZED CASH, AND, THEREFORE, IS TO BE TREATED AS ADVANCE TO THE ASSESSEE. AS HELD BY HONBLE SUPREME COURT IN THE CASE OF CIT VS. VATIKA TOWNSHIP PVT. LTD., (2014) 367 ITR 466 (SC) THE LEGISLATION WHICH MODIFIES ACCRUED RIGHTS OR W HICH IMPOSES OBLIGATIONS OR IMPOSES NEW DUTIES OR ATTACHES A NEW DISABILITY HAS TO BE TREATED AS PROSPECTIVE, UNLESS THE LEGISLATIV E INTENT IS CLEARLY TO GIVE THE ENACTMENT A RETROSPECTIVE EFFECT. IN V IEW OF THESE DISCUSSIONS AND CONSISTENT WITH THE STAND TAKEN BY THE CO-ORDINATE BENCH, WE APPROVE THE REASONING ADOPTED BY THE CIT( A). ACCORDINGLY, WE APPROVE THE ORDER OF THE CIT(A) AN D DECLINE TO INTERFERE IN THE MATTER. 10. AS EVIDENT, CIT VS. VATIKA TOWNSHIP PVT. LTD. , 367 ITR 466 (SC) HAS BEEN CONSIDERED THEREIN. 11. SIMILAR WAS THE POSITION BEFORE THE CHANDIGARH BENCH OF THE TRIBUNAL WHERE IN THE CASE OF SHRI HANS RAJ GANDHI , IN ITA NO.739/CHD/2014 FOR THE ASSESSMENT YEAR 2008-09, VI DE ORDER DATED 18.11.2014, THE TRIBUNAL UPHELD THE ACTION OF THE L D. CIT(A) IN DIRECTING THE AO TO REDUCE THE INTEREST U/S 234B OF THE ACT. ITA NO.733(ASR)/2014 ASSESSMENT YEAR:2012-13 6 12. MERE FILING OF S.L.P. BY THE DEPARTMENT AGAINST THE ORDER PASSED BY THE HONBLE HIGH COURT IS NOT ENOUGH FOR THE INCOME TAX AUTHORITIES NOT TO FOLLOW THE ORDERS OF THE HONBLE HIGH COURT, WH ICH ARE BINDING IN NATURE. 13. A SIMILAR ISSUE HAS BEEN DECIDED BY THIS BENCH IN FAVOUR OF THE ASSESSEE, VIDE ORDER DATED 16.05.2016, IN ITA NO.39 2(ASR)/2014, IN THE CASE OF DCIT (CENTRAL CIRCLE), AMRITSAR VS. SH. SU RINDER KUMAR KHINDRI, AMRITSAR. 14. IN VIEW OF THE ABOVE, FINDING NO MERIT IN THE G RIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT, THE SAME IS HEREBY REJECT ED. THE ORDER OF THE LD. CIT(A) IS CONFIRMED. 15. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/05/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/05/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. SHANKER KUMAR KEDIA, AMRITSAR. 2. THE DCIT (CENTRAL CIRCLE), ASR 3. THE CIT(A), ASR 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER