The Asstt.Commissioner Of Income Tax, Ludhiana v. Sh.Hans Raj Gandhi, Ludhiana

ITA 739/CHANDI/2014 | 2008-2009
Pronouncement Date: 18-11-2014 | Result: Dismissed

Appeal Details

RSA Number 73921514 RSA 2014
Assessee PAN ABMPR3068A
Bench Chandigarh
Appeal Number ITA 739/CHANDI/2014
Duration Of Justice 2 month(s) 28 day(s)
Appellant The Asstt.Commissioner Of Income Tax, Ludhiana
Respondent Sh.Hans Raj Gandhi, Ludhiana
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 18-11-2014
Assessment Year 2008-2009
Appeal Filed On 21-08-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI T.R.SOOD ACCOUNTANT MEMBER ITA NO. 739/CHD/2014 ASSESSMENT YEAR : 2008-09 THE A.C.I.T. VS. SHRI HANS RAJ GANDHI CENTRAL CIRCLE-III S/O SHRI MOHAN LAL LUDHIANA. 259-A MODEL TOWN EXT. LUDHIANA. PAN: ABMPR3068A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJIV KUMAR DR RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 10.11.2014 DATE OF PRONOUNCEMENT : 18.11.2014 O R D E R PER BHAVNESH SAINI J.M. : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEAL S)-I LUDHIANA DATED 21.5.2014 FOR ASSESSMENT YEAR 2008-0 9 ON THE FOLLOWING GROUNDS :- 1. THAT THE LD. CIT(A) ERRED BOTH IN LAW AND ON FA CTS IN DIRECTING THE AO BY TREATING THE AMOUNT LYING IN TH E P.D. ACCOUNT AS ADVANCE TAX OF THE ASSESSEE IN VIE W OF THE SPECIFIC PROVISIONS OF SECTION 132B(1) WHIC H ARE AS UNDER: I. THE AMOUNT OF EXISTING LIABILITY MAY BE RECOVERED OUT OF SEIZED AMOUNT. II. THE ASSESSING OFFICER MAY APPLY SUCH SEIZED MONEY IN THE DISCHARGE OF THE LIABILITIES AND THE ASSESSEE SHALL BE DISCHARGED OF SUCH LIABILITY TO THE EXTENT OF THE MONEY SO APPLIED. 2 2. THAT THE LD. CIT(A) ERRED BOTH IN LAW AND ON FAC TS 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 O R REQUISITIONED 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 THE LEGISLATION OF SECTION 132B (1) OF THE INCOME TAX ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE CHALLENGED THE ORDER OF THE ASSESSING OFFICER IN CH ARGING INTEREST UNDER SECTION 234B OF THE INCOME TAX ACT B Y NOT ALLOWING CREDIT FOR THE AMOUNT SEIZED DURING THE CO URSE OF SEARCH BEFORE THE LEARNED CIT (APPEALS). THE ASSE SSING OFFICER IN THE ORDER PASSED UNDER SECTION 154 OF TH E INCOME TAX ACT DID NOT ACCEPT THE CLAIM OF THE ASSESSEE FO R NON-LEVY OF INTEREST UNDER SECTION 234B ON THE GROUND THAT A S PER THE PROVISIONS OF SECTION 132B OF THE INCOME TAX ACT SE IZED CASH COULD NOT BE ADJUSTED AGAINST THE ADVANCE TAX LIABI LITY. THE ASSESSING OFFICER ALSO REFUSED TO FOLLOW THE JUDGME NT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. ARUN KAPOOR 334 ITR 351 ON THE GROUND THAT THE DEPARTME NT HAD FILED SLP AGAINST THE SAID DECISION. 3. IT WAS SUBMITTED BEFORE THE LEARNED CIT (APPEALS ) THAT AFTER THE SEARCH AND SEIZURE OPERATION THE ASSESSE E HAD MADE A REQUEST TO THE DEPARTMENT FOR ADJUSTMENT OF AMOUN T SO SEIZED TOWARDS THE ADVANCE TAX INSTALLMENTS VIDE LE TTER DATED 17.9.2008 FOR ASSESSMENT YEARS 2008-09 AND 2009-10. AGAIN ANOTHER APPLICATION WAS ALSO FILED. HOWEVE R NO ADJUSTMENT OF CASH SO SEIZED HAD BEEN MADE BY THE 3 DEPARTMENT FOR NO FAULT OF THE ASSESSEE. IT WAS A LSO CLARIFIED THAT IF THE ASSESSEE MAKES A REQUEST FOR ADJUSTMENT OF CASH SO SEIZED TOWARDS THE PAYMENT OF ADVANCE TAX THEN THE SAME SHALL BE ADJUSTED TOWARDS THE ADVANCE TAX. IT WA S SUBMITTED THAT THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ARUN KAPOOR (SUPRA) HELD THAT THE ASSESSEE IS ENTITLED TO ADJUSTMENT OF SEIZED AMOUNT TOWARDS ADV ANCE TAX LIABILITY FROM THE DATE OF MAKING THE APPLICATION I N THAT REGARD . IT WAS THEREFORE SUBMITTED THAT THE ASSESSEE WAS ENTITLED FOR ADJUSTMENT AND NO INTEREST COULD BE CH ARGED. THE LEARNED CIT (APPEALS) CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE JUDGMENT IN THE CASE OF CIT VS. AR UN KAPOOR (SUPRA) DIRECTED THE ASSESSING OFFICER TO ACCEPT TH E APPLICATION OF THE ASSESSEE AND REDUCE THE TAX UNDE R SECTION 234B OF THE INCOME TAX ACT ACCORDINGLY. THE FIND INGS OF THE LEARNED CIT (APPEALS) IN PARAS 4 AND 5 OF THE APPEL LATE ORDER ARE REPRODUCED AS UNDER :- 4. I HAVE CONSIDERED THE FACTS OF THE CASE AND IT IS APPARENT THAT THE CASH SEIZED AT THE TIME OF SEARCH OPERATION HAD BEEN REQUESTED BY THE APPELLANT TO BE ADJUSTED AGAINST HIS ADVANCE TA X LIABILITY AND THE SAID REQUEST HAD BEEN MADE TWICE 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 GOVERN MENT ACCOUNT AND AT THE SAME TIME CHARGE INTEREST FOR NON PAYMENT OF ADVANCE TAX ON THE DUE DATES. IT IS QUITE APPARENT THAT THE SEIZED CASH SHOULD HAVE BEEN ADJUSTED AS REQUESTED BY THE ASSESSEE TO MEET THE ADVANCE TAX OBLIGATIONS IN THIS REGARD. . THE HON'BLE BOMBAY HIG H COURT IN THE CASE OF CIT-I VS. SHRI JYOTINDRA B. MODY IN ORDER DAT ED 21/9/2011 HAS CLEARLY HELD THAT ONCE THE ASSESSEE OFFERS TO TAX T HE UNDISCLOSED INCOME INCLUDING THE AMOUNT SEIZED DURING SEARCH T HEN THE LIABILITY TO PAY ADVANCE TAX IN RESPECT OF THAT AMOUNT ARISE S EVEN BEFORE 4 COMPLETION OF THE ASSESSMENT. THE HON'BLE COURT FUR THER HELD THAT SECTION 132B (1) OF THE ACT DOES NOT PROHIBIT THE U TILIZATION OF AMOUNT SEIZED DURING THE COURSE OF SEARCH TOWARDS ADVA NCE TAX LIABILITY. FURTHER THE HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. ASHOK KUMAR 334 ITR 355 HAS CLEARLY HELD ON SIMILAR FACTS THAT THE ASSESSEE WAS ENTITLED TO ADJUSTMENT OF SEIZED CASH AGAINST ADVANCE TAX LIABILITY AND THEREFORE NO INTEREST COULD BE CHARGE D U/S 234A & 234B IN THE EVENT OF DEPARTMENT NOT RESPONDING TO ASSESS EE'S REQUEST FOR ADJUSTMENT OF CASH SEIZED AGAINST ADVANCE TAX LIABI LITY. IN VIEW OF THE CLEAR CUT JUDGEMENT OF THE HON'BLE JURISDICTIONAL H IGH COURT THE ACTION OF THE AO IN REJECTING THE APPLICATION OF THE ASSES SEE U/S 154A IS ERRONEOUS. 5. THE ASSESSING OFFICER'S OBSERVATION THAT THE DECI SION OF HON'BLE HIGH COURT WOULD NOT BE APPLICABLE AS THE SAME HAS BE EN CHALLENGED IN SLP BEFORE THE HON'BLE SUPREME COURT AMOUNTS TO REFUSAL TO FOLLOW THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT WHICH COULD BE TREATED AS CONTEMPT OF THE COURT. THE DEPARTMENT HAD FILED SLP AGAINST DECISIO N OF THE HON'BLE HIGH COURT DOES NOT MEAN THAT SAID DECISION WOULD NOT BE LAW OF LAND TILL CONFIRMED BY THE HON'BLE APEX COURT. THE ASSESSING OF FICER IS THEREFORE DIRECTED TO ACCEPT THE APPLICATION OF THE APPELLANT AND REDUCED THE INTEREST U/S 234B ACCORDINGLY. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (APPE ALS) IN DIRECTING THE ASSESSING OFFICER TO REDUCE THE INTER EST UNDER SECTION 234B OF THE INCOME TAX ACT. IT IS NOT IN DISPUTE THAT THE ASSESSEE MADE A REQUEST FOR ADJUSTMENT OF CASH SO SEIZED TOWARDS ADVANCE TAX INSTALLMENTS. THE ISSUE IS NO W SETTLED BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN FAVOU R OF THE ASSESSEE IN THE CASE OF CIT VS. ARUN KAPOOR (SUPRA) . MERELY BECAUSE SLP OF THE DEPARTMENT IS PENDING BEFORE THE HON'BLE SUPREME COURT IS NO GROUND TO SHOW DIS-REGARD TO T HE JUDGMENT OF THE HON'BLE HIGH COURT. THE AUTHORITI ES 5 BELOW ARE BOUND TO FOLLOW THE DECISION OF THE HON'B LE HIGH COURT. ACCORDINGLY THERE IS NO INFIRMITY IN THE ORDER OF THE LEARNED CIT (APPEALS) IN DECIDING THE ISSUE IN FAVO UR OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT. THE DEPARTMENTAL APPEA L STANDS DISMISSED. 5. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF NOVEMBER 2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 TH NOVEMBER 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR ITAT CHANDIGARH 6