Commissioner Of Income Tax (Central), Ludhiana v. M/S. Cosmos Builders And Promoters Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA No. 425 of 2014 (O & M)Date of Decision:- 14.07.2015 Commissioner of Income Tax (Central), Ludhiana ......Appellant(s) vs. M/s. Cosmos Builders and Promoters Ltd. ......Respondent(s) CORAM:- HON'BLE MR. JUSTICE S.J. VAZIFDAR,ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE G.S.SANDHAWALIA S.J. VAZIFDAR, A.C.J. (Oral) C.M. No. 27376-CII of 2014 We are inclined to condone the delay as ITA No. 30 of 2014has first been filed which, by order dated 06.10.2014, was allowed to bewithdrawn with liberty to file a fresh appeal. ITA No. 425 of 2014 (O & M) This is an appeal against the order of the Tribunal dismissingthe appellant's appeal against the order of the Commissioner of Income Tax.The present appeal is in respect of assessment year 2008-09. The appellant contends that the following substantial questions of law arise for consideration:- “(i)Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT is justifiedin law in confirming the order of CIT(A)-I, that nointerest could be charged in the event of department notresponding to the assessee's request for adjustment ofcash seized against advance tax liability withoutappreciating the fact that the advance tax does notconstitute the existing liability as per specific provisionof section 132B of the Income Tax Act, 1961. (ii)Whether, on the facts and in thecircumstances of the case, the Hon'ble ITAT is justifiedin law in confirming the order of CIT(A)-I, whereasExplanation 2 to Section 132B of the Income Tax Act,1961 inserted by the Finance Act, 2013, with effect from01-06-2013 has clarified that the “existing liability”does not include advance tax payable in accordancewith the provisions of Part C of Chapter XVII. (iii)Whether the Explanation 2 to Section 132Bof the Income Tax Act, 1861, though inserted by theFinance Act, 2013, with effect from 01-06-2013 beingclarificatory in nature, makes explicit what was implicitin the provision before the insertion of the saidExplanation. (iv)Whether, on the facts and circumstances ofthe case, Hon'ble ITAT is justified in law in confirmingthe order of CIT(A)-I, whereas the due dates for payinginstallments of advance tax for the assessment year2008-09, were 15-06-2007, 15-09-2007, 12-12-2007and 15-03-2008 and for the shortfall in the installmentsof advance tax, which were falling due before the firstrequest letter of the assessee dated 20-02-2008, theinterest u/s 234C of the Income Tax Act, 1961 waschargeable in view of the provisions of Section 234C(1)(a) of the Income Tax Act, 1961, according to the ratioof the judgment of This Hon'ble Court in the case ofCIT vs. Arun Kapoor, (2011) 234 ITR 351 (P & H).” Question Nos. 1, 2 and 3 must be decided against the appellantin view of the judgment of a Division Bench of this Court dated 29.09.2014in the case of Commissioner of Income Tax (Central), Ludhiana vs. Sh.Sandeep Jain and others in ITA No. 261 of 2014. The respondent wasentitled to have the cash seized adjusted against its advance tax dues. Theonly question is whether the explanation to Section 132B of the IncomeTax, 1961 (in short 'the Act') was retrospective in operation or not. Thisquestion has been answered in favour of the respondent by this judgment.The Division Bench expressly held that the explanation is not retrospectivein operation. The appeals as far as questions no. 1 to 3 are concerned, isdismissed. As far as question no. 4 is concerned, the respondent would beliable to pay interest under Section 234C upto the date of the letter dated20.02.2008 addressed by it to the department requesting the adjustment ofthe amount seized against its liability. This issue is decided in favour of theappellant by the judgment of another Division Bench of this Court dated22.07.2010 in the case of Commissioner of Income Tax vs. Arun Kapoor,(2011) 334 ITR 351. The liability under Section 234C shall be computed inaccordance with this judgment. The appeals as far as questions no. 1 to 3 are concerned, isdismissed. As far as question no. 4 is concerned, the respondent would beliable to pay interest under Section 234C upto the date of the letter dated20.02.2008 addressed by it to the department requesting the adjustment ofthe amount seized against its liability. This issue is decided in favour of theappellant by the judgment of another Division Bench of this Court dated22.07.2010 in the case of Commissioner of Income Tax vs. Arun Kapoor,(2011) 334 ITR 351. The liability under Section 234C shall be computed inaccordance with this judgment. The appeal is accordingly disposed off. (S.J. VAZIFDAR) ACTING CHIEF JUSTICE (G.S. SANDHAWALIA) JUDGE