9911796707
TMI Blog2017 (9) TMI 1884X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, and the judgment in the case of Spaze Towers (P.) Ltd. [ 2016 (11) TMI 1401 - PUNJAB AND HARYANA HIGH COURT ] has brought requisite clarity on the issue. Therefore, for the period prior to the amendment, the 'existing liability' includes the advance tax liability in accordance with the provisions of part C of chapter XVII of the Act. Subsequently, accepting the above judgment, the CBDT issued direction to Field Officers by way Circular No.20/2017 dated 12/06/2017. Therefore, the issue is now settled and the expression 'any existing liabilities' does include the advance tax liabilities prior to 01.06.2013. The case of the assessee falls prior to the said date of 01.06.2013. The cash was seized in the search ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x payable, is retrospective in nature and hence, seized cash cannot be adjusted against the advance tax liability for A.Y.2010-11. [3] The learned CIT (A) failed to appreciate that - a. Explanation 2 to section 132B has been inserted w.e.f 01.06.2013 and the legislature, in its own wisdom, has not made it applicable retrospectively and hence, there is no reason to hold that the said explanation inserted w.e.f. 01.06.2013 is applicable even to the earlier years. b. When two contradictory views are possible, the view favourable to the assessee should be adopted in view of the Supreme Court decision in the case of Vegetable Products Ltd. [88 ITR 192] AND therefore, the view taken by ITAT, Ahmedabad in the case of Kanishka Prints Pvt. Ltd. [143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said levy of statutory interest, the assessee filed a rectification application for deletion of the said interest and relied on the said letters of the assessee. They contain the specific request for appropriation of seized cash against the last installment of the advance tax for the previous year ending with March, 2010. In the said rectification application, the assessee submitted that the said seized cash is required to be adjusted against the advance tax payment and not towards the regular tax payment as done by the AO. AO rejected the said application and passed an order dated 25/09/2014 in this regard and it is against the assessee. In this order AO relied heavily on the amended provisions of Explanation-2 to sec 132B of the Act. Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the assessee firm i.e. M/s. Happy Home Developers. He also brought our attention to another letter dated 14.10.2010 addressed to the AO, Central Circle - I, Nashik filed along with the Return of Income filed u/s. 139 of the Act. Bringing our attention to page 8 of the Paper Book, Counsel submitted that the said letter contains a manner of the appropriation of the said seized cash towards advance tax liability of the firm. 6. Further, bringing our attention to judgment of Punjab Haryana High Court in the case of Spaze Towers (P.) Ltd. (surpa), (Page 5 of the Paper Book) dated 17.11.2016, Ld. Counsel submitted the prospective applicability of the amended provisions of Explanation 2 to section 132B was answered by the Hon'ble High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... draw or to not press appeal filed by the Department on this issue. Considering these developments, Ld. Counsel for the assessee submitted that the 'existing liability' used in the provisions of section 132B of the Act includes the 'advance tax liabilities' for the period prior to 01.06.2013. In effect, Ld. A.R. submitted that both the AO and the CIT (A) failed in wrongly interpreting the provisions section 132B of the Act and submitted for reversing their orders. 8. On the other hand, Ld. DR for the Revenue dutifully relied on the orders of the AO and the CIT (A). 9. We have heard both the parties on the issue relating to inclusion of the advance tax liabilities within the meaning of the 'existing liabilities' as use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clarity on the issue. Therefore, for the period prior to the amendment, the 'existing liability' includes the advance tax liability in accordance with the provisions of part C of chapter XVII of the Act. 11. Subsequently, accepting the above judgment, the CBDT issued direction to Field Officers by way Circular No.20/2017 dated 12/06/2017. The contents of para 7 and 8 of the circular are relevant and for the sake completeness of this order, we proceed to extract the said paragraphs here as under : 3. Several Courts have held that the insertion of Explanation 2 to section 132B of the Act, is prospective in nature and not applicable to cases prior to 01.06.2013. The SLPs filed by the Department against the judgment of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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