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2014 (7) TMI 236 - KARNATAKA HIGH COURTDenial of input tax credit - Assessee filed Nil returns - credit on the basis of revised return was also denied - Levy of interest and penalty - works contract - construction of buildings - So it is urged by the appellant/assessee that even long after the expiry of the period in which the revised return could have been filed, the fact remains that there is no response by filing any revised returns. - first appellate authority allowed relief to the assessee - Held that:- it is not in dispute that all the requirements were not fulfilled by the assessee for the period involved in the appeals - it is a case of the first appellate authority acting more loyal than the king, even though a claim had not been put forth by the assessee through the returns, the first appellate authority has ventured to allow the appeals and grant relief to the assessee, contrary to statutory provisions! Even in regard to this period of April 2006 to November 2006 is concerned, the factual position is not very different - The conduct of the assessee in filing nil returns for April 2006 to November 2006 can never be accepted as bona fide, as the assessee, prior to the filing of the return, had been made aware of the tax liability and virtually admitted the same and had paid some provisional amount. Therefore, there is absolutely no bona fides on the part of the assessee in continuing to file nil returns even for this period and claiming no tax liability. The revised returns were filed only after inspection, etc., and therefore, cannot be accepted as a voluntary return or bona fide return as the assessee has done it after a good deal of persuasion. Even when a revised return or a return subsequently has been made subsequent to passing of the best judgement order, while the original assessment can be withdrawn, best judgement assessment cannot be withdrawn, which, nevertheless does not absolve the assessee from being levied with penalties and interest. Insofar as the argument that the revised return having been filed within six months and taking cue from the provisions of section 38(3) of the Act, the revised return should be accepted and acted upon is concerned, we find this provision is not applicable to the present situation as it arises only in a situation where best judgment assessment is passed because of non-filing of the return as for the periods in question which we are discussing, the assessee had filed nil returns. In so far as the submission that in a best judgment assessment, where a return is not accepted and is based on the information as disclosed in the books of accounts, etc., the claim in the returns or nonclaiming in the returns cannot be of much significance, we find that claim for input-tax credit can only be in specified form and not in a generalised form and therefore, the arguments cannot succeed. We have discussed this aspect elaborately as above. Therefore, on comparison of provisions of section 38(3) of the Act, the benefit cannot be extended by overlooking the statutory requirements under section 10(4) of the Act read with sub-sections (1) and (4) of section 35 of the Act. An assessee pays penalty if it violates the statutory provision and likewise the Revenue also loses revenue unless it adheres to the requirements of the statutory provision. It is for this reason we are not impressed by the submission on behalf of the assessee that there was no need for taking a technical approach or hyper-technical approach and if the appellate authority had taken a pragmatic and plausible view, the revisional authority should not have disturbed the same or interfered with the same, is not accepted. Input credit disallowed - levy of interest and penalty confirmed.
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