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Showing 1 to 20 of 1182 Records
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2025 (2) TMI 1182
Deduction u/s. 80P - denial of deduction on non-filing of the income-tax return u/s. 139(1) - HELD THAT:- An amendment was brought in section 143(1)(a) of the Act by the Finance Act, 2021 w.e.f. 01.04.2021 giving powers to the CPC for disallowing the claim of deduction u/s. 80P of the Act if return of income is not filed within the statutory time limit provided u/s. 139(1) - prior to amendment, there was no mechanism for CPC to deny the deduction u/s. 80P of the Act.
Admittedly, the assessment year under consideration is 2018-19 whereas the amendment has been brought in from A.Y. 2021-22 and therefore the CPC erred in making the adjustment by way of disallowing deduction u/s.80P of the Act in the instant case.
CPC was not justified in disallowing the deduction claimed by assessee u/s. 80P of the Act for A.Y. 2018-19 as the powers for doing so were brought into the Act from A.Y. 2021-22. Appeal of the assessee is allowed.
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2025 (2) TMI 1181
Review Petition under Section 114 read with Order XLVII Rule 1 and Section 151 of the Civil Procedure Code (CPC) - reopening of evidence and recalling witnesses for further cross-examination based on electronic evidence - Validity of impugned order passed - HELD THAT:- It is apparent that witness Abhayraj has already been cross-examined at length on the issue of demarcation and diversion of the disputed land by the petitioner who is a practicing Advocate and by his counsel and same is specifically observed by the trial Court in its order. Plaintiff has not produced any electronic evidence or any other evidence, which might show that further cross-examination of the witness on the point of demarcation about which lengthy cross-examination has already taken place is further necessary. Therefore, this Court dismissed the application. The facts of K.K. Velusamy (supra) are not applicable in this case, as in that case compact disc in form of electronic evidence was produced before the trial Court, in which witnesses who were sought to be recalled for further cross-examination were alleged to have admitted the fact that the money was lent for security purposes and no agreement to sale was executed, whereas case in hand no such material is available. It is settled position of law that provision of Order XVIII Rule 17 of CPC are not intended to enable parties to recall any witness for further cross-examination on which lengthy cross-examination has already been made. In fact it is a provision enabling the Court to clarify any issue or doubt by recalling any witness. The power under Section 151 or Order XVIII Rule 17 of CPC is not intended to be used routinely merely for asking because if so used it will defeat the very purpose of the various amendments to the Code to expedite trials.
Therefore, this Court does not find any error apparent in the impugned order passed by this Court in Miscellaneous Petition No.7264/2024. Consequently, this Review Petition being devoid of merits is hereby dismissed.
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2025 (2) TMI 1180
Maintainability of appeal on low tax effect - monetary limits for filing Income Tax Appeals by the department before the High Court - HELD THAT:- As monetary limit (tax liability) in the present case is less than Rs. 2 Crores, therefore, in light of aforesaid circular (Para-5) dated 17/09/2024, the instant Tax Case stands disposed of.
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2025 (2) TMI 1179
Validity of reopening of assessment - Notice issued period of four years - sanction accorded by Specified authority or not? - HELD THAT:- As w.e.f. 01.04.2021 the Principal Chief Commissioner or the Principal Director General is the competent authority for giving sanction if more than 3 years have elapsed from the end of the relevant assessment year.
Since in the instant case the notice u/s 148 of the Act has been issued on 13.04.2022 which is beyond the period of three years from the end of the relevant assessment year, therefore, the competent authority who should have given sanction for reopening proceedings is the Principal Chief Commissioner / Principal Director General. However, in the instant case, the same has been approved by the PCIT-1, Pune. Therefore, such approval being not in accordance with law, is invalid and consequently, the entire re-assessment proceedings are vitiated. We, therefore, quash the re-assessment proceedings. Appeal filed by the assessee is allowed.
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2025 (2) TMI 1178
Seeking release of seized cash - Section 457 Cr.P.C. - petitioner is ready and willing to furnish an indemnity for the entire amount at the time of released - HELD THAT:- The petition is allowed - The trial court is directed to release the seized cash deposited by the I.O. in the court in favour of the petitioner by preserving color photographs of the currency notes. It is open for the trial court to impose any other condition as deemed fit and proper.
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2025 (2) TMI 1177
Reopening of assessment u/s 147 - reason to believe - tangible material for the AO to conclude that the petitioner had a PE in India or not? - HELD THAT:- Entire action of reassessment was based solely on the past surveys which had been conducted. There has been an abject failure on the part of the AO to record any finding on how the material gathered in the course of those surveys would impact the assessment of income for the years in question.
As was observed by us in Grid Solutions OY, PE [2025 (1) TMI 911 - DELHI HIGH COURT] is a fact specific issue and that facts gathered in the course of a survey cannot be mechanically adopted or applied as relevant to an assessment wholly unconnected and separate. AO also fails to record any satisfaction to the effect that the facts gathered in the course of those past surveys have been, on a prima facie evaluation, found to exist in the AYs’ in question.
and for all the aforesaid reasons, we allow the instant writ petitions and quash the following impugned notices issued under Section 148.
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2025 (2) TMI 1176
Validity of the Notice(s) issued u/s 148 - reasons to believe - whether subsequent notices issued u/s 143(2) and 142(1) of the Act as the same are issued without jurisdiction and also barred by limitation? - HELD THAT:- AO has recorded the reasons in view of the report of the District Valuation Officer. Moreover, the Survey conducted reveals that the assessee has not truly disclosed his income chargeable to tax which has escaped assessment for the relevant Financial Years.
AO has recorded his own valid and proper satisfaction for existence of reason to believe that the income of the relevant assessment years has escaped assessment. Thus, the notice cannot be treated to have been passed without jurisdiction. Even otherwise, the petitioner would get full opportunity to raise his defence in the appellate proceedings.
Accordingly, the Petition being bereft of any merit is liable to be and is hereby dismissed. Decided against assessee.
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2025 (2) TMI 1175
Reopening of assessment u/s 147 - reasons to believe - scope of assumptions of facts - HELD THAT:- A perusal of the reasons for reassessment would establish beyond a measure of doubt that the same were prompted by the survey which was conducted in 2007 and 2019 on various constituents of the GE Group in India. We had, while dealing with an identical issue in Grid Solutions OY (Ltd.) [2025 (1) TMI 911 - DELHI HIGH COURT] as held a survey report pertaining to a particular tax period cannot ipso facto be read or countenanced as being relevant and binding for independent assessment years. Suspicion cannot take the place of a belief and that too a belief which is based on reasons.
Thus, we find ourselves unable to sustain the impugned reassessment action. Appeal allowed.
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2025 (2) TMI 1174
Enhancement of assessable value of imported goods by adopting the NIDB (National Import Data Bank) data without following the prescribed statutory procedure under Section 14 of the Customs Act and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - HELD THAT:- The similar issue has been dealt by this Tribunal in the case of Commissioner of Customs (Port), Kolkata Vs. M/s Bajaj Writing Aid vide Final Order No. 77599/2023 dated 31.10.2023 [2023 (10) TMI 1522 - CESTAT KOLKATA] wherein this Tribunal has held 'the Department has not made any attempt to follow the procedure given under the Valuation (Determination of Value of Importers Goods) Rules 2007 and has simply adopted the NIDB data and selectively enhanced value. As discussed above, the Commissioner (Appeals), has given a detailed finding along with reasons while setting aside the Order-in-Original. We do not find any reason to interfere with the same.'
Conclusion - The enhancement of value based solely on selective NIDB data without adherence to statutory provisions and without valid reasons is unsustainable.
The appeal filed by the Revenue is dismissed.
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2025 (2) TMI 1173
Entitlement to refund of the closing balance of Education Cess and Secondary & Higher Education Cess (SHE Cess) lying as on 30.06.2017, which could not be transitioned as input credit under the Goods and Services Tax (GST) regime - sub-sections (3) and (9) of Section 142of the CGST Act, 2017 read with Section 11B of the Central Excise Act, 1944 - HELD THAT:- The provisions of Sections 142(3) and 142(9)(b) of the CGST Act, is a transitional arrangement wherein it has been specifically provided that such provisions apply as a non-obstanate clause whereby such provisions will have overriding effect, if anything to the contrary is contained under the provisions of existing law i.e., Central Excise Act, 1944, except for the provisions of sub-section (2) of section 11B ibid. Thus, all the conditions of the requirements of Section 11B ibid as it remained under the existing law, other than those relating to Unjust Enrichment clause contained in Section 11B(2) ibid would apply, only if they are not contradictory to the provisions of Section 142(9)(b) of the CGST Act, 2017, in dealing with refund of ‘CENVAT credit’.
Further, upon introduction of GST regime, the transitional arrangements have been provided under Section 142 of CGST Act, to enable the CENVAT credit, if refundable, to be paid in cash to the eligible persons, as there was no way that such excess CENVAT credit could be used by the assessee in payment of tax on output service or duty on final products. I also find that the proviso (c) to Section 11B(2) ibid, cannot be read to state that refund of such excess CENVAT credit has not been provided under Rule 5 of the CCR, as the entire arrangement of refund of excess CENVAT credit is arising as a transitional arrangement by moving from Excise duty/Service Tax regime to GST regime.
There are merit in the argument of the learned Counsel for the appellants that they are eligible for refund of duty in cash under Section 11B(2)(d) ibid, inasmuch as the phrase ‘duty of excise’ used in Section 11B(2)(d) ibid refers to duties of excise leviable under Section 3 of the Central Excise Act, 1944 and it also includes CENVAT credit, which is nothing but such duty of excise paid on inputs or service tax paid on input services, which have been allowed for taking credit in terms of Rule 3 of the CCR - the impugned order is not legally sustainable and the appellants are eligible for refund of excess CENVAT credit paid by them, and specifically allowed to be refunded in terms of Section 142(9)(b) of the CGST Act, 2017.
When the Central Excise Act, 1944 amongst other laws relating to old tax regime was repealed by Section 174 of the CGST Act, 2017 and that the CCR is also being superseded vide Notification No.20/2017-C.E. (N.T.) dated 30.06.2017, by the Central Government for smooth implementation of transfer to GST regime in indirect taxation, the provisions of Section 142 of the CGST Act, 2017 are sufficient to provide for the tax administration for sanction of cash refund in circumstances stated therein, and there is no need and it is not legally feasible to make any specific provision in CENVAT statute itself, for enabling cash refund of excess CENVAT credit relating to earlier regime while moving to the new GST regime.
In the case of Dhyan Networks and Technologies Pvt. Ltd. Vs. Commissioner of GST and Central Excise, Chennai [2022 (10) TMI 1009 - CESTAT CHENNAI], the Tribunal has held that cash refund is required to be given to the assessees in terms of Section 142 of the CGST Act, 2017.
The Co-ordinate Bench of this Tribunal in the case of Emami Cement [2022 (3) TMI 1254 - CESTAT NEW DELHI], have held that rejection of refund of accumulated balance amount of credit on education cess, secondary and higher education cess and Krishi kalyan cess by original authority and upheld by the Commissioner (Appeals-Thane) cannot be legally sustained and set aside the impugned order of rejecting the appeal filed by the appellants in that case.
Conclusion - There are no merits in the impugned order passed by the learned Commissioner (Appeals) to the extent it has rejected the refund of excess CENVAT credit, which is contrary to the legal provisions of Section 142(3) and Section 142(9)(b) of the CGST Act, 2017 and thus, it does not stand the scrutiny of law. Therefore, by setting aside the impugned order dated 12.11.2021, the appeal is allowed in favour of the appellants, with consequential relief, with respect to refund of excess CENVAT credit of Rs. 4,82,561/- payable to the appellants.
The impugne dorder is set aside - appeal allowed.
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2025 (2) TMI 1172
Admission of Section 7 application - existence of a financial debt - occurrence of default - failure in repayment as per revised terms of the amendment to third Debenture Trust Deed - Financial Creditor by majority controlled the PMC and default subsequent to constitution of PMC is orchestrated by financial creditor - it was held by NCLAT that 'There are no infirmity in the findings returned by the Adjudicating Authority that the financial creditor succeeded in proving the debt and default and the ingredients under Section 7 are fulfilled. In view of the facts brought on the record, it is clearly proved that there is a debt and default which has been acknowledged from time to time by the corporate debtor. Corporate debtor has failed to honour its repayment obligations as per financial document. Adjudicating Authority after considering all submissions of the parties have rightly returned the finding of debt and default.'
HELD THAT:- There are absolutely no error in the view taken by the National Company Law Appellate Tribunal.
Appeal dismissed.
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2025 (2) TMI 1171
Violation of principles of natural justice - challenge to order of assessment passed by the respondent in DRC-07 - whether the impugned order is an ex pare order and the mode of service adopted by the respondent is an effective service in terms of the provisions of Section 169 of the GST Act? - HELD THAT:- In the present case, it is the main grievance of the petitioner that since the notices were uploaded by the respondent-Department in the different column, ''View Additional Notices/Orders, instead of the uploading the same in the usual column, i.e. 'View Notices/Orders, the petitioner has failed to view the same, as the petitioner only get used to view the Portal under the usual column, i.e. 'View Notices/Orders. Thus, it is clear that the new modus operandi adopted by the respondent-Department, i.e. sending notice through On-line Portal is the seat of all problems for the assessees, which opened the floodgate for all the assessees to file litigations before this Court seeing necessary relief.
The service of notice should be first by way of initial modes, viz., by giving/tendering it directly or by a messenger including a courier; by registered post or speed post or courier; and by sending a communication to assessee's e-mail address (169.1(a) to (c)) and thereafter, by making it available on the common portal; by publication in a newspaper (169.1(d) & (e). If none of these modes is practicable, by affixing it in some conspicuous place at assessee's last known place of business or residence (169.1(f). The provision further provides that every decision, summons, notice or any communication shall be deemed to have been served when it is tendered, or published, or a copy thereof is affixed, and also when the same is sent by registered post or speed post.
In the case on hand, admittedly, the show cause notice sent by the respondent via. Online Portal has not been noticed by the petitioner and the reasons assigned by the petitioner for not having noticed the said notice is that, he is an illiterate and has no computer knowledge and hence, he is not well-accustomed with the GST operation system and further, notice has been uploaded in the different column, viz., ''View Additional Notice/Orders, which not only the petitioner-assessee but most of the assessees, including the Consultants engaged by them are not aware that the notices are being uploaded under the different column, via. 'View Additional Notices/Orders column. Though it is contention of the learned Government Advocate that the respondent-Department has caused three reminders to the show cause notice, when the first notice, (viz., Show Cause Notice dated 22.05.2024) sent by the respondent itself via., On-line GST Portal been noticed by the petitioner/assessee, no useful purpose would be served by sending three reminders to such notices.
Conclusion - This Court has no hesitation to hold that the impugned order is an ex parte order as the same suffers from violation of principles of natural justice and is liable to be aside on account of the fact that the petitioner has not been heard before passing such order. Therefore, this Court is inclined to set aside the impugned order.
The matter is remanded to the respondent for fresh consideration - Petition allowed by way of remand.
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2025 (2) TMI 1170
Dismissal/abatement of appeals filed before the Tribunal, in view of the approval of the Resolution Plan by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC), 2016 - HELD THAT:- This Tribunal lacks the jurisdiction to render an opinion on a matter relating to the settling of pending claims which are not an issue pending before this Tribunal. The Customs Act 1962 and the Insolvency & Bankruptcy Code, 2016 operate in their own spheres, leaving little room for this Tribunal to render an opinion on the matter.
The CESTAT Benches including that at Chennai, have been consistently ordering the abatement of appeals, wherever the Resolution Plan is shown to have accepted by the Adjudicating Authority, as seen from Order of Mumbai Bench of CESTAT, in the case of M/s. Jet Airways (India) Ltd. Vs. Commissioner of Service Tax, Mumbai & Anr., [2023 (5) TMI 767 - CESTAT MUMBAI].
It is a well-accepted norm of judicial discipline that a Bench of lesser quorum / strength should follow the view taken by Bench of larger quorum / strength, in a case whose ratio covers the legal issue involved in the impugned matter, more so when it is based on the precedence of earlier judgments on the matter.
Conclusion - i) The approval of a Resolution Plan by the NCLT under the IBC extinguishes statutory dues. ii) The appeals should be abated or dismissed in view of the Resolution Plan's approval.
Appeal abated.
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2025 (2) TMI 1169
Seeking grant of bail - Money Laundering - scheduled offences - illegal sand/mineral mining operations conducted by the present applicant - it was held by High Court that 'No case for grant of bail has been made out in terms of Section 45 of the PML Act, as there exist reasonable grounds for believing that the applicant is guilty of such offence.'
HELD THAT:- The impugned order, being interim in nature, will not have any bearing on the Writ Petition which is yet to be disposed of.
Appeal disposed off.
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2025 (2) TMI 1168
Levy of surcharge - CIT (A) relying on the Section 2(29)(C) has held that surcharge is leviable on the AOP as the tax has been charged at the maximum marginal rate - assessee is an AOP (Trust) - HELD THAT:- We are in complete agreement with the order of Hon’ble ITAT, Mumbai, in the case of Jitendra Gala Navneet Trust v. DDIT [2024 (11) TMI 233 - ITAT MUMBAI]. We therefore hold that the assessee is not liable for the levy of surcharge because assessee’s income has not breached Rs. 50 Lakhs. In view of the above, the appeal filed by the assessee is allowed.
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2025 (2) TMI 1167
Additions u/s 69A and 69C - Reliance on documents from electronic records - evidence on record to show compliance u/s. 65B of the Indian Evidence Act - HELD THAT:- Admittedly, from the perusal of the image found from the mobile of Shri Javed Shaikh as reproduced in the impugned assessment order, we note that there is nothing mentioned about the name of assessee. It was found from person who was an employee of the assessee and had left the employment, as stated by the assessee in his statement.
There is no corroborative material brought on record by the authorities below, to conclusively demonstrate that transactions are of the assessee for the purpose of making addition. Importantly, we also note that requirements of Section 65B of the Indian Evidence Act have not been complied with since the entire addition is based on image found from the mobile of Shri Javed Shaikh which is an electronic record. In this respect, we take note of the decisions of Hon'ble Supreme Court in Arjun Pandirao Khotkar [2020 (7) TMI 740 - SUPREME COURT] which makes it mandatory to comply with the requirements in respect of electronic record, compliance of which has nowhere been mentioned in the entire proceedings.
Thus, we delete the addition made in the hands of the assessee as unexplained money u/s. 69A. Further, we affirm the deletion in respect of addition made by AO u/s. 69C by holding it as unexplained expenditure. Accordingly, ground taken by the Revenue is dismissed and that of the assessee is allowed.
Addition made u/s. 69C based on documents, found and seized from mobile of one Shri Shailendra Rathi - The image/sheet found from the mobile of Shri Shailendra Rathi being an electronic record, used as evidence for the purpose of making addition in the hands of the assessee is without obtaining necessary certification in this regard and therefore, addition by AO is not tenable. Accordingly, considering the overall factual matrix and discussions made above, we do not find any infirmity in the findings arrived at by ld. CIT(A). Ground no.2 raised by the Revenue is thus, dismissed.
Addition u/s. 69A based on statement of one Shri Kaustubh Latke that payment is made by assessee to one group called as “GNP Group” - AO did not make any independent enquiry, so as to ascertain the fact stated by Shri Kaustubh Latke in respect of sale of land at Pune in this respect. He did not identify details of land in Pune, i.e., its location, area, buyer, seller, consideration, etc., in relation to which assessee is alleged to be the recipient of consultancy services from Shri Kaustubh Latke. AO has simply placed reliance on uncorroborated statement of Shri Kaustubh Latke and arrived at a conclusion that assessee had made payment of Rs. 3 crores without adducing any evidence to that effect or conducting any enquiry. The seized document in the form of image found from the mobile of Shri Kaustubh Latke does not specify nature or purpose of the alleged transaction nor does have any signature or any other identification of the assessee.
Addition cannot be made only on the basis of WhatsApp conversation between third parties without adducing corroborative evidence in support of such allegation.
CIT (A) after considering various judicial precedents to state that documents/material found from the premises of third party or a statement of third party cannot be relied upon to make additions in the hands of the assessee, unless such material or statement is corroborated by independent evidence, linking such material to the assessee
As decided in Common Cause v. UOI [2017 (1) TMI 1164 - SUPREME COURT] wherein searches were conducted on the Birla and Sahara Group of Companies and incriminating material in form of random sheets and loose papers, computer prints, hard disk, pen drives etc. were found, held that noting on loose sheet/diary does carry any evidentiary value under the provision of section 34 of the Evidence Act.
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2025 (2) TMI 1166
Addition made u/s 69C - Addition on the basis of the statement and loose sheets - HELD THAT:- No addition can be made unless there irrebuttable evidence as regards the payment of bonus in cash and addition cannot be made merely because of the failure on the part of AO to conduct necessary enquiries and to bring on record cogent, convincing and admissible evidence.
Even otherwise, the AO has made addition u/s 69C in the present case. In order to make additions under the said section the initial burden is upon the revenue/AO to prove that expenditure was actually incurred only thereafter assessee can be put to prove the source with regard to such expenditure.
In the facts of the present case, AO has miserably failed to discharge its burden and nothing has been brought on record to prove the actual incurring of any expenditure. Therefore, on this reason also no addition could have been made u/s 69C of the Act.
AO has failed to discharge its burden and to bring on record the cogent, convincing and relevant documentary evidences to make addition u/s 69C - Appeal filed by the assessee stands allowed.
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2025 (2) TMI 1165
Unexplained investments and unexplained receipts - additions have been made on the basis of information collected by the AO - HELD THAT:- We are of the considered view that even in the third round of litigations, the AO could not provide the specific information/ details collected from the companies on the basis of which the impugned additions have been made, are in complete violation of the principles of natural justice.
Thus to sum- up even in the first round of litigation, AO could not provide the details which were the basis for making the impugned additions. Therefore, in our considered view, such additions cannot be sustained, keeping in mind the number of decades passed since the original assessment order was framed. Moreover, the additions have been made in violation of audi alteram partem. We, therefore, direct the AO to delete the impugned addition.
Addition based upon the letter received from the Custodian - As no specific details of holding of shares for the impugned assessment year has been mentioned or provided to the assessee, the additions cannot be sustained. AO is directed to delete the same.
Additions made on account of dividend details/warrants - The investment in shares DCM Ltd. of 2500 shares are coming from earlier years as the same is opening balance. Similarly, 3900 shares of Eicher Motors which were opening balance of the assessee were only 200 shares with bonus of 400 shares at the end of the impugned financial year. The holding of Golden Proteins at 15,300 shares have been wrongly taken from the opening balance of Gujarat Ambuja Proteins. The complete details of short-term capital gains and long-term capital gains on sale of shares during the impugned financial year have been given with complete details of dividends received from shares during the financial year.
It would be pertinent to mention here that the entire additions have been based on dividends declared by the companies of which the assessee may or may not have held the shares during the year under consideration as the same is not based on physical holding of shares and merely on the basis of information collected behind the back of the assessee for which we have already expressed our view elsewhere. Therefore, this addition also cannot be sustained. Accordingly, Ground No. 2 with all its sub- grounds is allowed.
Addition on account of unexplained receipts - We do not find any specific reason given for making the impugned addition as interest received on savings bank account, dividend income have already been shown by the assessee on its income statement and there is no specific mention as to entry in which bank account has not been shown/declared by the assessee. The additions have been repeated from the first round of litigation without any demonstrative evidence, therefore, the same is directed to be deleted.
Allowability of interest expenditure - In assessee's own case for AY 1991-92, has allowed the claim of interest. On finding parity of facts we direct the AO to allow the entire claim of interest.
Enhancement of assessed income on account of difference in the balance sheet in the books of account of Late Harshad Mehta - As we figures from the reconciliation statement hereinabove we find that the balance has been mentioned as balance as per the books of Harshad Mehta and the total balance which included share-market balance, money market balance and personal balance. It seems that the balance of Harshad Mehta have been considered with his own balance and not with the balance of Sudhir S. Mehta, which have been explained in the above chart and the balance stands totally reconciled. Therefore, the impugned enhancement made by the ld. CIT(A) is uncalled for and deserves to be deleted. Accordingly, Ground No. 6 is allowed.
Levy of interest u/s 234D - In our considered opinion, provisions of Section 234D of the Act are not applicable in the facts of the case inasmuch as, there was no refund issued to the assessee as there was no processing of return u/s 143(1) of the Act. Our view is fortified by the decision in the case of Delta Airlines Inc [2011 (9) TMI 21 - BOMBAY HIGH COURT] We accordingly direct the AO to not charge interest u/s 234D of the Act.
Levy of interest u/s 234A and 234B - In our considered view, such levies are mandatory but only up to the date of original assessment order which is dated 20/03/1995. The AO is directed to charging interest u/s 234A and 234B of the Act up to the date of original assessment order.
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2025 (2) TMI 1164
Cancellation of bail granted to respondent - fraudulent availing of Input Tax Credit (ITC) - interpretation and application of the provisions under Sections 122 and 132 of the CGST Act - HELD THAT:- Sections 122 (viii) and 122 (x) explicitly address the unlawful acquisition of refunds and falsifying final records or creating fake accounts. Under Section 132 (c), it is mandated that invoices or bills cannot be utilised without the corresponding supply of goods or services. In this case, the respondent wrongfully availed of input tax credit without receiving any goods, relying on forged bills from non-existent companies. The evidence unmistakably establishes that the respondent was the proprietor of M/s Gurbax Rai & Sons and M/s Gurbax Rai Cotton Industries. Investigative materials have further revealed that the respondent fraudulently availed input tax credit amounting to Rs. 8.59 crores.
Upon reviewing the entire record, it is evident that the learned trial court erred egregiously and displayed a lack of accuracy by granting bail to the accused respondent, Lovkesh Kumar. The argument that a similar matter received an interim order of no coercive action from the Hon’ble Apex Court does not justify dismissing the plea for cancellation of bail.
Conclusion - The trial court's decision to grant bail is based on a misinterpretation of the CGST Act's provisions, particularly Section 132. This Court firmly decides to cancel the bail granted to respondent Lovkesh Kumar S/o Shri Guruvax Rai.
The application for the cancellation of bail is allowed, and the order permitting bail from 05.04.2024 issued by the learned Additional Sessions Judge No.1, Jaipur Metropolitan-II, is hereby nullified.
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2025 (2) TMI 1163
Confirmation of demand - imposition of penalty under section 78 of the Finance Act, 1994 - short-payment of Service Tax under Reverse Charge Mechanism (RCM) against import of certain services - irregular availment of Cenvat credit of input services - levy of penalty.
Levy of penalty - HELD THAT:- It is an admitted fact that the moment audit pointed out, they have paid the Service Tax along with interest. Therefore, the department was aware that they have already paid the Service Tax and interest as it was even recorded in the SCN. Further, on going through various grounds taken including revenue neutrality, it would be obvious that there were certain interpretational issues, which the appellant would have had while considering the payment of Service Tax or otherwise - in the absence of any cogent and positive evidence by the department about deliberate and intentional suppression or misstatement, the ground for invoking extended period cannot be sustained and on the same ground, the penalty can also be not imposed. Further, since these conditions are not established, therefore, the benefit under Section 73(3) cannot be denied and once the amount has been paid along with interest, there was no need to issue SCN. Therefore, on this count, the Order of the Commissioner imposing penalty, in the facts of the case, cannot sustain and accordingly, the penalty imposed by the Adjudicating Authority is set aside.
Short payment of Service Tax under Business Support Service by wrongly claiming deduction under Pure Agent clause - HELD THAT:- During the material time, Rule 5 provided for inclusion of reimbursable activities as part of service provided. As per Rule 5(1), as it existed during the material time, whether any expenditure or costs are incurred by the service provider in the course of providing taxable service, all such expenditure or costs were to be treated as consideration for taxable service provided or to be provided and shall be included in the value for the purpose of charging Service Tax on the said service. Therefore, irrespective of the fact whether the expenditure or costs are incurred on reimbursable basis or otherwise, it was required to be included in the gross value in terms of Rule 5(1). However, Rule 5(2), which was subject to the provisions of Rule 5(1), certain expenditure and costs incurred by the service provider as pure agent of the recipient of service was required to be excluded from the value of taxable service, subject to fulfillment of certain conditions. The Adjudicating Authority has examined these conditions and came to the conclusion that the appellants have not fulfilled all the conditions enumerated under Rule 5(2) to justify the claim of deduction as pure agent.
The issue regarding inclusion of reimbursable expenditure or costs in the gross value of consideration received for providing taxable service or otherwise is no longer res integra in view of the judgment in the case of Union of India Vs Intercontinental Consultants and Technocrats Pvt Ltd [2018 (3) TMI 357 - SUPREME COURT]. Hon’ble Supreme Court at Para 21, inter alia, observed that Rule 5 brings within its sweep the expenses which are incurred while rendering the services and are reimbursed i.e., for which the service recipient has made payment to the assessee and as per these Rules, these reimbursable expenses also forms part of the gross amount charged.
Conclusion - The reimbursable expenses should not be included in the taxable value. Penalty imposed on the appellants for short payment of Service Tax and Cenvat credit demand set aside, as there was no evidence of willful misstatement or suppression.
The impugned order is set aside - appeal allowed.
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9911796707
