TMI Blog2015 (9) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... The Appellant : Amitava Bhattacharya ORDER Shamim Yahya, Accountant Member - This appeal by the Revenue is directed against the order of learned CIT(Appeals)- I, Nagpur dated 21-08-2012 and pertains to assessment year 2009-10. The ground raised in ground no. 1 is as below: On the facts and circumstances of the case and in law, the learned CIT(A) erred in directing the Assessing Officer to adjust the seized cash of ₹ 72 lakhs towards advance tax liability which was not an existing liability as on the date of search. 2. In this case the assessee has asked for adjustment of ₹ 72 lakhs cash seized during the search towards advance tax liability. The same was denied by the Assessing Officer. Assessee's rectification application under section 154 was also dismissed by the Assessing Officer. 3. Upon assessee's appeal, learned CIT(Appeals) allowed the appeal holding as under: 'I have carefully considered the issue before me. In the appellant's case the request for adjusting seized cash towards tax has been made on 08-09-2009 itself. However there has been no response from the department regarding this request of the assessee. It is seen t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s payment to advance tax. Interest u/s 234B 234C, if any may therefore be reworked accordingly.' 4. Against the above order, the Revenue is in appeal before us. 5. We have heard the learned D.R. Shri Amitava Bhattacharya. None appeared on behalf of the assessee. However, in our considered opinion, the matter may be adjudicated by hearing the learned D.R. The Revenue in this regard is aggrieved that the CIT(Appeals) erred in applying the decision of Hon'ble jurisdictional High Court which is contrary to the extant provisions of section 132B(1) of the Act. The learned D.R. has further contended that Finance Act, 2013 has inserted an Explanation to section 132B with effect from 01-06-2013 and submitted the following proposition : The existing provisions of section 132B, inter alia provide that the assets seized under section 132 or requisitioned un/s 132A may be adjusted against the amount of any 'existing liability' under this Act, the Wealth-tax Act, 1957, the Expenditure-tax Act,1987, the Gift-tax Act, 1958 and the Interest-tax Act, 1974 and the amount of liability determined on completion of assessment pursuant to the search, including penalty levied or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r requisition is made, or the amount of liability determined on completion of the assessment under Chapter XIV-B for the block period, as the case may be] (including any penalty levied or interest payable in connection with such assessment) and in respect of which such person is in default or is deemed to be in default, may be recovered out of such assets: [Provided that where the person concerned makes an application to the Assessing Officer within thirty days from the end of the month in which the asset was seized, for release of asset and the nature and source of acquisition of any such asset is explained] to the satisfaction of the Assessing Officer, the amount of any existing liability referred to in this clause may be recovered out of such asset and the remaining portion, if any, of the asset may be released, with the prior approval of the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner, to the person from whose custody the assets were seized: Provided further that such asset or any portion thereof as is referred to in the first proviso shall be released within a period of one hundred and twenty days from the date on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to the date of completion of the assessment [under section 153A or] under Chapter XIV-B. [Explanation 1].-In this section,- (i) block period shall have the meaning assigned to it in clause (a) of section 158B; (ii) execution of an authorisation for search or requisition shall have the same meaning as assigned to it in Explanation 2 to section 158BE.] [Explanation 2. - For the removal of doubts, it is hereby declared that the existing liability does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII.]' Considering the extant provisions of section 132B, Hon'ble jurisdictional High Court in the case of Jotindra B. Mody (supra) had held that section 132B(1)(i) of the Act does not prohibit utilization of the amounts seized during the course of search towards the advance tax payable on the amount of undisclosed income declared during the course of search. The Hon'ble Court had clearly expounded that Revenue's contention that tax liability relating to the assessment year in question would crystallize only after the assessment is complete, is not correcty. 8. Now we find that the Explanation inserted to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laratory provision or whether it is an amendment which is intended to change the law which applies to further period. 11. Now we find that the above Explanation has clearly been inserted to overcome the decisions as expounded by the Hon'ble jurisdictional High Court in the case of Jotindra B. Mody (supra). The Hon'ble jurisdictional High Court has held that as per the existing provision of section 132B, it cannot be said that tax liability relating to the assessment year in question would crystalize only after the assessment is completed and, therefore, the request of the assessee for adjustment of amounts in question towards the advance tax could not be entertained. Now to overcome this decision the Explanation to section 132B had been inserted to provide that for removal of doubt it is hereby declared that the existing liability does not include advance tax payable in accordance with the provisions of Part C of Chapter 17. Admittedly this Explanation aims at subverting the above decision without removing the statutory basis of the decision that tax liability cannot be said to crystallize only after the assessment is complete. Hence this Explanation will act prospecti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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