Kamlesh Bhogilal Kandoi M/S. Bhogilal ... vs A.C.I.T.....Opponent(S) on 10 November, 2014

[Cites 2, Cited by 2]

Gujarat High Court

Kamlesh Bhogilal Kandoi M/S. Bhogilal ... vs A.C.I.T.....Opponent(S) on 10 November, 2014

Bench: Ks Jhaveri, K.J.Thaker

        O/TAXAP/55/2002                                ORDER




         IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                          TAX APPEAL NO. 55 of 2002

================================================================
       KAMLESH BHOGILAL KANDOI M/S. BHOGILAL MULCHAND
                     KANDOI....Appellant(s)
                             Versus
                     A.C.I.T.....Opponent(s)
================================================================
Appearance:
(MR NR DIVETIA), ADVOCATE for the Appellant(s) No. 1
MR SN DIVATIA, ADVOCATE for the Appellant(s) No. 1
MR BB NAIK, ADVOCATE for the Opponent(s) No. 1
MR.VARUN K.PATEL, ADVOCATE for the Opponent(s) No. 1
================================================================

        CORAM: HONOURABLE MR.JUSTICE KS JHAVERI
               and
               HONOURABLE MR.JUSTICE K.J.THAKER

                               Date : 10/11/2014


                                ORAL ORDER

(PER : HONOURABLE MR.JUSTICE KS JHAVERI)

1.Heard learned Advocates for the parties.

2.While admitting the matter on 21.01.2002, the Court framed the following issues :-

"(1) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in not entertaining the additional ground of appeal regarding the legality of intimation u/s. 143(1)(a) of the Income Tax Act, 1961.

Page 1 of 3

O/TAXAP/55/2002 ORDER (2) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the cash seized cannot be adjusted against the advance liability as requested by the appellant."

3.The issue raised in this Tax Appeal requires consideration. Moreover, there are several decisions of different High Courts namely :

316 Income Tax Reports 149 330 Income Tax Reports 53 334 Income Tax Reports 351 334 Income Tax Reports 355 335 Income Tax Reports 548 357 Income Tax Reports 534

4.Subsequently, the law was amended and the relevant portion reads as under :-

"Application of seized assets under Section 132B The existing provisions contained in section 132B of the Income-tax Act, inter alia provide that seized assets may be adjusted against any existing liability under the Income-tax Act, Wealth-tax Act, the Expenditure-tax Act, the Gift-tax Act and the Interest-tax Act and the amount of liability determined on completion of assessments pursuant to search, including penalty levied or interest payable and in respect of which such person is in default or Page 2 of 3 O/TAXAP/55/2002 ORDER deemed to be in default.

Various courts have taken a view that the term "existing liability"

includes advance tax liability of the assessee, which is not in consonance with the intention of the legislature. The legislative intent behind this provision is to ensure the recovery of outstanding tax/interest/penalty and also to provide for recovery of taxes/interest/penalty, which may arise subsequently to the assessment pursuant to search.

Accordingly, it is proposed to amend the aforesaid section so as to clarify that the existing liability does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII of the Act.

This amendment will take effect st from 1 June, 2013."

5.With a view to enable both the sides to place identical matters involving the above issue/s, the matter be listed on 26th NOVEMBER, 2014.

Sd/-

(K.S. JHAVERI, J.) Sd/-

(K.J. THAKER, J) CAROLINE Page 3 of 3

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