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TMI Blog2023 (10) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... ability. Several Courts have held that the insertion of Explanation 2 to section 132 B of the Act, is prospective in nature and not applicable to cases prior to 01.06.2013. Accordingly, it has now been settled that insertion of Explanation 2 to Section 132 B of the Act shall have a prospective application and so, appeals may not befiled by the Department on this issue for the cases prior to 01.06.2013 and those already filed may be withdrawn/ not pressed upon. We hereby hold that the order u/s 154 passed by the AO is against the Circular of the CBDT and the order of the Hon ble High Court. Suffice to say that we are unable to appreciate the hyper technicalities embarked upon by the AO as well as the ld. CIT(A) while dealing with the issue. - DR. B. R. R. KUMAR, ACCOUNTANT MEMBER SH. YOGESH KUMAR US, JUDICIAL MEMBER For the Appellant : Sh. Salil Agarwal, Adv. For the Respondent : Ms. Indu Bala Saini, Sr. DR ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of ld. CIT(A)-16, New Delhi dated 26.07.2019. 2. Following grounds have been raised by the assessee: 1. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hort, the Act ) against the order dated August 31, 2015. annexure A.3, passed by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, the Tribunal ) in I.T.A No. 185/Asr/2015, for the assessment year 2011-12, claiming the following substantial question of law. (i) Whether the hon'ble Income-tax Appellate Tribunal committed an error on facts and in law by ignoring the fact that penalty under section 271AAA of the Income-tax Act, 1961 was imposed due to non payment of taxes on surrendered income under section 132(4) of the Income-tax Act, 1961 in the event of the Department not responding to the assessee's request for adjustment of cash seized against advance tax liability without appreciating the fact that the advance tax does not constitute the existing liability as per specific provision of section 132B of the Income-tax Act, 1961? (ii) Whether the hon ble Income-tax Appellate Tribunal is correct on facts and in law by not treating the Explanation 2 to Section 132B of the Income-tax Act, 1961 inserted by the Finance Act, 2013 with effect from June 1, 2013 which has clarified that the existing liability' does not include advance tax pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atory in nature and hence applies to all pending proceedings. It was concluded that the assessee was in default for having failed to pay the taxes and interest in relation to undisclosed income declared and levied penalty under section 271 AAA of the Act vide order dated August 26, 2013, annexure A.1. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) (CIT(A)). Vide order dated January 27, 2015, annexure A.2, the Commissioner of Income-tax (Appeals) held that Explanation 2 to section 132B of the Act inserted by the Finance Act, 2013 was clarificatory in nature. It was further held that the said amendment did not have retrospective effect. Thus, the Commissioner of Income-tax (Appeals) allowed the relief to the assessee. Not satisfied with the order, the Department filed an appeal before the Tribunal. Vide order dated August 31, 2015, annexure A.3, the Tribunal upheld the decision taken by the Commissioner of Income-tax (Appeals) and dismissed the appeal filed by the Department. Hence, the instant appeal by the Revenue. We have heard learned counsel for the parties. 3. Learned counsel for the appellant-Revenue relied upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, the relevant findings recorded by the Tribunal read thus: 'We find that Explanation 2 to section 132B, as Finance Act, 2013 clearly states is effective from June 1, 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 the hon'ble Supreme Court in the case of CIT v. Vatika Township (P.) Ltd. [20141.367 ITR 466, 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 discussions and consistent with the stand taken by the co-ordinate bench, we approve the reasoning adopted by the Commissioner of Income-tax (Appeals). Accordingly we approve the order of the Commissioner of Income-tax (Appeals) and decline to interfere in the matter. 7. In view of the above, we do not find any ground to interfere with the impugned order dated August 31, 2015, annexure A.3, passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has only prospective applicability. 3. Several Courts have held that the insertion of Explanation 2 to section 132 B 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 Punjab and Haryana High Court in the case of Cosmos Builders and Promoters Ltd. and the Hon' ble Allahabad High Court in the case of Sunil Chandra Gupta 2, have been dismissed. Subsequently, the CBDT has also accepted the judgment of the Hon'ble Punjab Haryana High Court in the case of Spaze Towers Pvt. Ltd. dated 17.11.2016, wherein it was held that the Explanation 2 to Section 132B of the Act is prospective in nature. 4. Accordingly, it has now been settled that insertion of Explanation 2 to Section 132 B of the Act shall have a prospective application and so, appeals may not befiled by the Department on this issue for the cases prior to 01.06.2013 and those already filed may be withdrawn/ not pressed upon. 5. The above may be brought to the notice of all concerned. 6. Hindi version follows. Sd/- (Neetika Bansal) Deputy Secretary to Government of India 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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