ACIT, Patiala V. Sh. Sanjeev Kumar Goyal, Mandi Gobindgarh

ITA 936/CHANDI/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86230 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-03-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 03-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR AMA RVEER SINGH
• Keywords: Search and seizure
• Section: 132; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO.936/CHD/2013 ASSESSMENT YEAR: 2010-11 THE ACIT VS. SH. SANJEEV KUMAR GOYAL CENTRAL CIRCLE GOYAL COLONY PATIALA SHASTRI NAGAR MANDI, GOBINDGARH PAN NO.ABCPK6376Q (APPELLANT) (RESPONDENT) APPELLANT BY : DR. AMARVEER SINGH RESPONDENT BY : SH. ASHOK KUMAR GOYAL DATE OF HEARING : 25/03/2015 DATE OF PRONOUNCEMENT : 27/03/2015 ORDER PER T.R.SOOD, A.M. THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER DATED 30.07.2013 PASSED BY THE CIT(A)-I, LUDHIANA. 2. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUND WHICH ARE AS UNDER : 1. THAT THE LD. CIT(A)-1, LUDHIANA HAS ERRED IN LAW AND ON FACGTS IN ADJUDICATING UPON ORDER U/S 154 DIRECTING THE AO TO RECALCULATE THE INTEREST U/S 234B/C TREATING THE AMOUNT OF RS. 80,00,000/- SEIZED DURIN G SEARCH AS ADVANCE TAX IGNORING THE SPECIFIC PROVISIONS OF SECTION 132B(1) , WHICH ARE AS UNDER: I. THE AMOUNT OF EXISTING LIABILITY MAY BE RECOVERE D OUT OF SEIZED AMOUNT. II. THE ASSESSING OFFICER MAY APPLY SUCH SEIZED MON EY IN THE DISCHARGE OF THE LIABILITIES AND THE ASSESSEE SHALL BE DISCHARGED OF SUCH LIABILITY TO THE EXTENT OF THE MONEY SO APPLIED. 2. THAT THE LD. CIT(A) ERRED BOTH INLAW AND ON FACT S IN NOT APPRECIATING THE LEGAL POSITION AS PROVIDED U/S 132B(1) ACCORDING TO WHICH ADVANCE TAX LIABILITY IS NOT INCLUDED IN THE EXISTING LIABILITY. 3. THAT THE LD. CIT(A) FAILED TO APPRECIATE THE FAC T THAT THE SECTION 132B(1) IS VERY CLEAR THAT THE SEIZED OR RELINQUISHED ASSETS MAY BE DEALT WITH AGAINST ANY EXISTING LIABILITY UNDER THE INCOME-TAX ACT AND N OT AGAINST THE ADVANCE TAX AND IN DOING SO LOST SIGHT OF THE VERY PURPOSE OF T HE LEGISLATION OF SECTION 132B(1) OF THE INCOME TAX ACT. 2 4. THAT THE LD. CIT(A) ERRED BOTH IN LAW AND ON FAC TS WHILE GIVING RELIEF TO THE ASSESSEE IGNORING HIS OWN OBSERVATION AND FINDINGS THAT THE ASSESSEE HAD MADE APPLICATION FOR ADJUSTMENT OF SEIZED CASH ON 22.03. 2010 I.E. ONE WEEK AFTER THE DATE OF DEPOSIT OF ADVANCE TAX I.E. 15.03.2010 AND THEREFORE THE ONUS TO MAKE THE IMPUGNED ADJUSTMENT CANNOT BE PUT ON THE ASSESS ING OFFICER. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT A SE ARCH WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE AND A CASH AMOUNTING TO RS . 80,00,000/- WAS SEIZED. THE ASSESSEE MOVED AN APPLICATION DT. 12/03/2010 WH ICH WAS RECEIVED BY THE ACIT, MANDI, GOBINDGARH ON 22/03/2010 THAT THE CASH SHOULD BE ADJUSTED TOWARDS ADVANCE TAX LIABILITY. HOWEVER, AO DID NOT DO SO AND ULTIMATELY INTEREST UNDER SECTION 234 B/C WAS CHARGED. ASSESSEE MOVED A N APPLICATION UNDER SECTION 154 THAT INTEREST SHOULD NOT BE CHARGED TO THE EXTENT OF RS. 80,00,000/- BUT THIS APPLICATION WAS REJECTED. 4. ON APPEAL THE LD. CIT(A) DECIDED THE ISSUE PARTL Y IN FAVOUR OF THE ASSESSEE BY NOTICING THAT SINCE APPLICATION WAS REC EIVED ON 22/03/2010, THEREFORE, THE SEIZED CASH COULD NOT BE CONSIDERED AS PAYMENT OF ADVANCE TAX. HE ALSO NOTICED THAT AMENDMENT MADE BY WAY OF EXPLA NATION TO SECTION 132 B WHERE BY IT WAS CLARIFIED THAT EXISTING LIABILITY D OES NOT INCLUDE ADVANCE TAX IS EFFECTIVE FOR 01.06.2013. HE ALSO REFERRED TO THE D ECISION OF HONBLE JURISDICTIONAL OF HIGH COURT IN CASE OF CIT V/S ASHOK KUMAR 334 I TR 355. 5. BEFORE US LD. DR SUBMITTED THAT EXPLANATION TO S ECTION 132B WAS INSERTED BY FINANCE ACT 2013 WITH EFFECT FROM 01/06/2013 BUT SINCE EXPLANATION WAS OF CLARIFICATORY NATURE THEREFORE SAME SHOULD BE CONST RUED HAVING RETROSPECTIVE APPLICATION. 6. ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE R EFERRED TO THE NOTES ON CLAUSES AND SUBMITTED THAT IT HAS BEEN CLEARLY MENT IONED THAT AMENDMENT WILL TAKE EFFECT FROM 01/06/2013 THEREFORE IT CANNOT BE APPLIED TO EARLIER PERIOD. FURTHER IN VIEW OF THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT V/S ASHOK KUMAR 334 ITR 355, THAT SEIZED CAS H SHOULD HAVE BEEN ADJUSTED AGAINST THE LIABILITY OF ADVANCE TAX AND THEREFORE INTEREST UNDER SECTION 234 B/C COULD NOT HAVE BEEN LEVIED. HE SUBMITTED THAT SIMIL AR VIEW HAS BEEN TAKEN BY AHMEDABAD BENCH OF THE TRIBUNAL IN CASE OF KANISHKA PRINTS PVT. LTD. VS. ACIT, 143 ITD 716. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT LD. CIT HAS DECIDED THE ISSUE VIDE PARA 2 TO 4 WHICH ARE AS UNDER: 3 2. THE APPELLANT IS AGGRIEVED AGAINST THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 154 DATED 25.10.2012 WHEREIN THE ASSE SSEES REQUEST FOR ADJUSTMENT OF SEIZED CASH OF RS. 80,00,000/- TOWARDS ADVANCE TAX LIABILITY HAD BEEN REJECTED. THE APPELLANT HAD RAISED THE ISSUE ON THE BASIS OF JUDG MENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ASHOK KUMAR 334 ITR 35 5. I HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 154 AND THE FACTS OF THE CASE. IT IS A MATTER OF RECORD THAT AN AMOUNT OF RS. 80,00,000/- HAS BEEN S EIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION ON 10.02.2010 AND THE ASSESSE S HAD REQUESTED FOR THE ADJUSTMENT OF THE SAME AGAINST THE ADVANCE TAX DUE FOR THE YEA R UNDER CONSIDERATION VIDE HIS LETTER DATED 12.03.2010 WHICH WAS RECEIVED IN THE OFFICE O F ACIT, MANDI GOBINDGARH ON 22.03.2010 BUT THE SAME WAS NOT ACCEPTED. THE FACTS OF THE CASE ARE SIMILAR TO THE FACTS IN RESPECT OF CIT V/S ASHOK KUMAR 334 ITR 355 WHERE IN THE HONBLE JURISDICTIONAL HIGH COURT HAS DIRECTED THE ADJUSTMENT OF SEIZED CASH TO WARDS ADVANCE TAX LIABILITY. IT IS HOWEVER TO BE NOTICED THAT THE ASSESSEE HAD MADE AP PLICATION FOR ADJUSTMENT OF SEIZED CASH ON 22.03.2010 I.E. ONE WEEK AFTER THE DATE OF DEPOSIT OF ADVANCE TAX I.E. 15.03.2010 AND THEREFORE THE ONUS TO MAKE THE IMPUGNED ADJUSTM ENT CANNOT BE PUT ON THE ASSESSING OFFICER. THE FACTS OF THE CASE UNDER CONS IDERATION ARE THEREFORE LITTLE DIFFERENT IN THIS REGARD. IT HOWEVER REMAINS FACT THAT AT THE TI ME OF FILING OF THE RETURN OF INCOME THE SELF ASSESSMENT TAX COULD HAVE BEEN TAKEN OUT OF TH E SEIZED CASH OF RS. 80,00,000/- LEADING TO REDUCTION IN THE IMPOSITION OF INTEREST U/S 234B/C. 3. THE AMENDMENT TO SECTION 132B IN FINANCE ACT 2013 H AS ALSO BEEN CONSIDERED WHILE DECIDING THE APPEAL UNDER CONSIDERATION. THE AMENDMENT BROUGHT IN BY THE FINANCE ACT 2013 READS AS UNDER:- FOR THE REMOVAL OF DOUBTS, IT IS THEREBY DECLARED THAT THE EXISTING LIABILITY DOES NOT INCLUDE ADVANCE TAX PAYABLE 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 AMENDMENT BROUGHT IN BY THE FINANCE ACT 2013 IS CLARIFICATORY IN NATURE, A QUESTION ARISES AS TO WH ETHER IT IS RETROSPECTIVE IN ITS IMPACT OR NOT. THE AR IN THIS REGARD HAS BROUGHT MY ATTENTION TO THE AMENDMENT 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 B EEN INSERTED BY THE FINANCE ACT 2012. THE LANGUAGE OF THE EXPLANATION 4 REFERRED TO ABOVE READS AS UNDER:- FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIED .. SIMILARLY THE LANGUAGE USED IN RESPECT OF AMENDMENT BROUGHT IN TO SECTION 132B BY FINANCE ACT 2013 READS AS UNDER:- 4. IN VIEW OF THE ABOVE ANALYSIS IT BECOMES CLEAR THAT THE AMENDMENT BROUGHT IN BY FINANCE ACT 2013 DOES NOT HAVE RETROSPECTIVE EFF ECT AND THEREFORE THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T V/S ASHOK KUMAR 334 ITR 355 REMAINS THE LAW FOR THE PURPOSES OF ISSUE UNDER CONSIDERATI ON. THEREFORE THE ASSESSING OFFICER IS DIRECTED TO REWORK THE INTEREST LEVIABLE U/S 234B/C . 8. IN OUR OPINION THE LD. CIT(A) HAS CORRECTLY DECI DED THE ISSUE BECAUSE EXPLANATION TO SECTION 132B CAN NOT BE HELD TO BE O F RETROSPECTIVE NATURE BECAUSE NOTES ON THE CLAUSES VERY CLEARLY PROVIDE T HAT AMENDMENT SHALL TAKE EFFECT FROM 01/06/2013. FURTHER WE ARE BOUND TO FOL LOW THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT V/S ASHO K KUMAR 334 ITR 355. THE LD. CIT HAS ALSO CORRECTLY NOTICED THAT APPLICATION WAS RECEIVED ON 22/03/2010 I.E; ONE WEEK AFTER THE DUE DATE FOR DEPOSIT OF ADVANCE TAX AND THAT IS WHY HE HAS ULTIMATELY DIRECTED THE AO TO REWORK THE INTEREST L EVIABLE UNDER SECTION 234B/C. THEREFORE, WE FIND NOTHING WRONG WITH THIS ORDER AN D FOLLOW THE SAME. 4 9. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 27/03/2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27/03/2015 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR