TMI Blog2015 (8) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... stment of seized cash, and, therefore, is to be treated as advance to the assessee - appeal dismissed - decided against Revenue. - A. D. Jain (Judicial Member) And Pramod Kumar (Accountant Member) For the Appellant : Tarsem Lal F or the Respondent : Salil Kapoor ORDER Pramod Kumar (Accountant Member) By way of this appeal the Assessing Officer has challenged the correctness of the order dated 27th January, 2015, in the matter of penalty under section 271AAA of the Income-tax Act, 1961, for the assessment year 2011-12 on the following grounds :- 1. Whether the decision of CIT(A)-5, Ludhiana is right in deleting the penalty imposed at ₹ 30,00,000 u/s 271AAA by the A.O. by ignoring the detailed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. There seems to be no dispute on the assessee s stand that repeated requests were made to the Assessing Officer to adjust the cash seized against the advance tax liability. A notice under section 210 was received by the assessee on 30.9.2010 and it was submitted that demand so raised had become an existing liability and should have been adjusted out of seized cash. That was, however, not done. 3. It was in this backdrop that proceedings under section 271AAA were initiated against the assessee. The Assessing Officer was of the view that since the assessee has not paid tax on the income declared by the assessee himself, the benefit of exclusion under section 271AAA(2)(i) is not available. As for the assessee s claim of setting off the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is deemed to be in default may be recovered out of search assets. It was very much clear from a plain reading of this section that the legislative intent always had been that the amount of seized cash will be adjusted only against regular demand after assessment and not against advance tax liability. However, different courts had interpreted it in divergent manners leading to some confusion on this account. Therefore, explanation 2 had to be inserted by Finance Act, 2013 in the form of clarification for the removal of doubts and it clearly states as under :- 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 provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able legal position. 6. We find that the Explanation 2 to section 132B, as Finance Act, 2013 clearly states is effective from 1st June, 2013. When the law so specifically states, there is no scope of holding that it is retrospective in effect. This provision restricts the scope of adjustment of seized cash, and, therefore, is to be treated as advance to the assessee. As held by Hon ble Supreme Court in the case of CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC) the legislation which modifies accrued rights or which imposes obligations or impose new duties or attach a new disability have to be treated as prospective, unless the legislative intent is clearly to give the enactment a retrospective effect. In view of these discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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