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Showing 101 to 120 of 1740 Records
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2024 (9) TMI 1642
Direction to respondents to reimburse the extra GST amount paid along with interest - grievance of the petitioner is that despite the aforesaid enhancement from 01.01.2022, the respondents are paying the running bills with 12% GST and the petitioner is paying 18% GST - HELD THAT:- Respondent No.4 which is a State GST Department, according to which also the rate of GST has been enhanced from 12% to 18% and same is liable to be paid by respondent No.2 which is a Government Entity.
The respondent No.2 is directed to pay the difference of GST amount to the petitioner @ 6% from 01.01.2022 to 30.09.2022 with a period of three months from the date of receipt of certified copy of this order, failing which the petitioner shall be entitled for interest @ 6% per annum from the date of entitlement.
Petition disposed off.
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2024 (9) TMI 1641
Action on the part of the respondent authorities in not reflecting the payments so made by the petitioners pursuant to the final demands raised - Time limitation - HELD THAT:- Section 129 (5) of the State Act only stipulates that upon payment of the entire amount as referred to in Sub-section (1) of Section 129, all proceedings in respect to the notice specified in Sub-section (3) shall be deemed to be concluded. The said provision therefore shows that upon payment of the amount, the proceedings in respect of the notice specified in Sub-section (3) shall be deemed to be concluded. The said provision would in the opinion of this Court, would apply only in circumstances, when pursuant to a Show Cause Notice issued under Section 129 (3), the entire amount so stated therein is paid. In contrast, it would be relevant to observe that Section 129 (3) also refer to an order to be passed within 7 days from the date of service of such notice. However, Section 129 (5) only refers to the notice and not to the order.
In that view of the matter, this Court is of the opinion that right to file appeal by the petitioners cannot be taken away merely because the petitioners have paid the entire amount demanded in the orders passed under Section 129(3) of the State Act.
This Court is of the opinion that on account of the fault of the respondent authorities, the petitioners were not able to file appeals against the respective orders dated 19.10.2023 and 12.09.2023 passed under Section 129 (3) of the State Act - Petition disposed off.
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2024 (9) TMI 1640
Revocation of suspension of the petitioner’s Goods and Services Tax (GST) registration - reasons set out in the impugned SCN are not intelligible - principles of natural justice - HELD THAT:- The copy of the reply filed by the petitioner is annexed to the present petition. It indicates that no supporting documents have been furnished by the petitioner.
It is considered apposite to permit the petitioner to furnish all such documents as are considered relevant to establish that he was functioning at his principal place of business, within the period of one week from date. The respondents are directed to consider the same and pass an appropriate order after affording the petitioner an opportunity to be heard.
Petition disposed off.
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2024 (9) TMI 1639
Cancellation of registration of petitioner - appeal was dismissed on the ground of limitation - challenge to order of cancellation of registration on the ground of not providing an opportunity of hearing as well as such order was passed without assigning any reason for cancellation of the registration of the petitioner - HELD THAT:- The Coordinate Bench of this Court in case of M/s. Aggrawal Dyeing & Printing vs. State of Gujarat [2022 (4) TMI 864 - GUJARAT HIGH COURT] has held that 'The procedural aspects should be looked into by the authority concerned very scrupulously and deligently. Why unnecessarily give any dealer a chance to make a complaint before this Court when it could have been easily avoided by the department.'
In the present matter, order of cancellation of registration is passed without giving any reason by the respondent authorities, and appeals filed by the petitioners under Section 107 of the GST Act are also dismissed.
As the Appellate Authority has dismissed the appeals of the petitioner, the respondent authorities will not be able to exercise the revisional power under section 108 of the GST Act. Therefore, the impugned order passed by the Appellate Authority as well as the order of cancellation of registration are required to be quashed and set aside - the matter is remanded back to the Assessing Officer at the show cause notice stage.
This petition is partly allowed by quashing and setting aside the impugned order passed by the Appellate Authority as well as order of cancellation of registration and the matter is remanded to the Assessing Officer at show-cause notice stage, however, the registration number of the petitioner shall remain suspended till such show cause notice is disposed of - petition disposed off by way of remand.
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2024 (9) TMI 1638
Refund of accumulated input tax credit (ITC) - zero rated supply - Mismatch in ITC as per GSTR-2B and GSTR-3B - HELD THAT:- Although the appellate authority has faulted the adjudicating authority for not carefully examining the reconciliation statement and passing a refund order to the extent of ₹12,04,443/- without sufficient discussion, the appellate authority has also not examined the question of reconciliation. There is neither any discussion nor any finding regarding the reconciliation statement furnished by the petitioner.
In terms of Section 107 (11) of the CGST Act, the appellate authority is required to decide the question in issue and cannot remand the matter to the adjudicating authority. In the present case, although, the appellate authority has faulted the adjudicating authority in not addressing the question of reconciliation statement, the appellate authority has also not addressed the same.
It is considered apposite to set aside the impugned order and remand the matter to the appellate authority for consideration afresh - petition disposed off by way of remand.
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2024 (9) TMI 1637
Seeking cancellation of GST registration of the petitioner - petitioner had discontinued its business - HELD THAT:- It is considered apposite to direct the proper officer to process the petitioner’s application as expeditiously as possible.
Petition disposed off.
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2024 (9) TMI 1636
Claim of wrongful refund - willful mis-declaration of the available ITC - one single order for two Financial Years - jurisdiction to issue SCN - it is contended that the authority who has issued the Show Cause Notice could only pass the impugned order - time limitation - HELD THAT:- The parameters under which this Court ought to entertain the writ petition are not satisfied. Be that as it may, it is also pertinent to take note of that this Court is not exercising its jurisdiction on the ground that the Petitioners herein have an adequate, alternative and efficacious remedy provided under Section 107 of the Assam GST Act, 2017. It is however apposite to mention that in order that the remedy which is available to the Petitioners is an efficacious and adequate remedy, the Petitioners should also be able to raise all the issues which the Petitioners could have raised in the instant proceedings.
This Court is not inclined to entertain the instant writ petition insofar as the challenge to the impugned order dated 12.08.2024 on the ground of availability of alternative and efficacious remedy. However, the Petitioner herein would be at liberty to file an appeal under Section 107 of the AGST Act, 2017.
This Court had perused the materials on record and there is no mention as to how much amount/amounts lying in the bank accounts of the Petitioner No. 2 and his relatives which have been frozen. There is also no mention as to whether the Petitioners have other bank account(s). It is also clear from the mandate of Section 107 (6) (b) of the Act of 2017 that the pre-deposit of 10% of the tax amount is required to be deposited and there is no provision for waiver by the Appellate Authority. It is well settled that the amount to be paid as pre-deposit is for filing or entertaining the Appeal and not for realization of the tax amount.
In the account(s) which have been frozen as stated in the Show Cause Notice dated 09.04.2024 and if the said accounts are still unoperational on account of the freeze, the Appellate Authority is directed to permit the filing of the Appeal(s) as well as to entertain the Appeal(s) without any predeposit subject to the accounts which have been frozen (the details mentioned in the Show Cause Notice dated 09.04.2024), has/have deposit(s) equivalent or more than the amount required to be deposited in terms with Section 107 (6) (b) of the Act of 2017.
Petition disposed off.
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2024 (9) TMI 1635
Demand in respect of ITC to be reversed on non-business transactions and exempt supplies - HELD THAT:- Respondent no. 1 cannot adjudicate a demand, which is also the subject matter of other proceedings. Since, the period covered under the impugned order is also subsumed in the show cause notice issued by the DGGI, both the proceedings cannot be carried on simultaneously.
The impugned demand is required to be set aside - Petition allowed.
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2024 (9) TMI 1634
Direction to process the refund applications filed by the petitioner u/s 54 of the Central Goods and Services Tax Act, 2017 (CGST Act)/ Delhi Goods and Services Tax Act, 2017 (DGST Act) - prayer for directions be issued for grant of provisional refund in terms of Section 54 (6) of the CGST/DGST.
The respondents states on instructions that the petitioner’s applications are lodged. They will be processed within a period of one month from date and appropriate orders would be passed.
HELD THAT:- The respondents are bound down to the said statement.
Needless to state that if the respondents propose to reject these applications filed by the petitioner, the respondents shall indicate the reasons for doing so and pass an order after affording the petitioner an opportunity to be heard.
Petition disposed off.
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2024 (9) TMI 1633
Seeking direction to respondents to expeditiously establish the GST Appellate Tribunal in the State of Kerala in accordance with the provisions of Section 112 of the CGST Act 2017 forthwith - Revenue submits that the steps have already been taken to establish the GST Appellate Tribunal and the selection process is going on - HELD THAT:- This submission is recorded.
Rectification of Section 169 of the CGST Act 2017 by correcting the erroneous usage of the word “or” with the correct word “and”, thereby such amendment will mandate assessing officers to serve notices and orders through at least minimum of three alternative modes of service, ensuring compliance with the principles of natural justice and providing an opportunity for affected parties to be heard - HELD THAT:- This Court cannot grant such a relief in the public interest litigation filed by the petitioners. The individual grievance of the person will have to be considered in appropriate manner in an individual litigation to be initiated by such person - the prayer is declined.
In the light of the fact that the process has already been initiated to establish the GST Appellate Tribunal, it is ordered that entire selection process shall be completed within a period of four months.
The writ petition is disposed of.
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2024 (9) TMI 1632
AO jurisdiction to issue notice u/s 143[2] on the relevant date - ITAT quashing the assessment order passed u/s 143(3) by the Income Tax Officer, Ward-9(2), Kolkata on the ground of lack of jurisdiction - lack of jurisdiction without considering Sub-section (2) of Section 124 and Sub-Section (3) of 127 - As decided by HC [2023 (1) TMI 1418 - CALCUTTA HIGH COURT] legal position had been rightly taken note of by the learned tribunal and the assessee cannot be prevented from raising the question of jurisdiction which is an issue which goes to the root of the matter and the learned tribunal had rightly permitted the assessee to canvas the issue and also rightly concluded that the assessment was bad in law - revenue could not factually controvert the submissions of the assessee that notice u/s 143[2] and section 142[1] of the Act was issued by an officer, who did not have jurisdiction over the assessee.
HELD THAT:- The tax amount involved in the present case is about ₹1,50,000/- ( Rupees one lakh fifty thousand only ).
It is stated that the legal issues raised in the present case are also pending adjudication in other cases. Such legal issues would be decided in the said cases.
We fail to understand as to why, for such a petty amount, the petitioner, Principal Commissioner of Income-Tax 1, has approached this Court. There is also a delay of 477 days in the filing of the present special leave petition.
Accordingly, the application for condonation of delay as well as the special leave petition are dismissed.
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2024 (9) TMI 1631
Validity of reassessment proceedings against non-existent entities/ amalgamanting compnaies - Reassessment action initiated by the respondents on the ground of the amalgamated entity having never been placed on notice - as argued no notices were served upon the amalgamated entity and orders of assessment as well as notices of reassessment were maintained in the name of the amalgamating entity - HELD THAT:- Position in law appears to be well- settled that a notice or proceedings drawn against a dissolved company or one which no longer exists in law would invalidate proceedings beyond repair. Maruti Suzuki conclusively answers this aspect and leaves us in no doubt that the initiation or continuance of proceedings after a company has merged pursuant to a Scheme of Arrangement and ultimately comes to be dissolved, would not sustain.
We note that in this batch of writ petitions and in light of the disclosures which have been made, the assessees clearly appear to have apprised their respective AOs of the factum of amalgamation and merger at the first available instance. If the respondents chose to ignore or acknowledge those fundamental changes, they would have to bear the consequences which would follow. Once the Scheme came to be approved, the transferor companies came to be dissolved by operation of law. They, thus, ceased to exist in the eyes of law. Proceedings thus drawn in their name would be a nullity and cannot be validated by resort to Section 292B of the Act.
The submission of the respondents based on Sections 159 and 170 of the Act is equally misconceived. It becomes relevant to note that Section 159 places the liability of a deceased assessee on its legal representatives. It thus creates a right of recourse for the Revenue to pursue and recover outstanding demands. We fail to appreciate how that provision could have any bearing on the question that stood posited. The proceedings impugned herein are not in relation to any right of recovery that may have been asserted or proposed. The challenge is to orders of assessment and initiation of reassessment made or commenced against a non-existent entity.
While the respondents sought to draw sustenance from the phrase “when the predecessor cannot be found ” as appearing in sub-section (2) thereof, we find ourselves unable to read that expression as being akin to a dissolution of a corporate entity or its merger with another.
The expression “cannot be found” cannot be construed as having been intended to cover situations where an entity ceases to exist in law by virtue of an amalgamation or merger. Regard must also be had to the heading of Section 170 and which speaks of succession to a business “otherwise than on death”. It is thus concerned with a specific contingency pertaining to succession to a business and how the predecessor and successor are liable to be taxed. It has no concern with the question of whether a notice or order in the name of a non-existent entity could be treated as valid in law.
AO invoked Section 154 asserting that the assessment order had inadvertently come to be framed in the name of EHSSIL - Admittedly, the factum of merger had been duly brought to the attention of the AO. The merger was taken into consideration at more than one place in the order of assessment that came to be framed. Despite the above, the AO proceeded to draw the order in the name of an entity which had ceased to exist. We also bear in consideration the indubitable fact that the rectification order came to be passed three years after the framing of the original order of assessment, and that too, during the pendency of the appeal of the assessee and where a specific ground of challenge was raised in this regard. This was therefore not a case of discovery of an inadvertent error or mistake immediately after the passing of an order.
We also bear in consideration Maruti Suzuki [2019 (7) TMI 1449 - SUPREME COURT] having clearly held that such a mistake would not fall within the ken of Section 292B of the Act. An exercise of rectification as undertaken in the present case, if accorded a judicial imprimatur, would in effect amount to recognising a power to amend, modify or correct in an attempt to overcome a fundamental and jurisdictional error contrary to the principles enunciated in Maruti Suzuki.
We also cannot lose sight of the fact that this was not a case where the assessee had attempted to mislead or suppress material facts and which may have warranted the case of the assessee being placed in the genre which was considered in Mahagun Realtors. The mere submission of replies on the letter head of EHSSIL also fails to convince us to hold in favour of the Revenue. In any event, none of the authorities below have held that the appellant was guilty of suppression. We would thus be inclined to allow the instant appeal and answer the question as posed in favour of the appellant and against the Revenue.
Notices issued u/s 142 (1) on the ground that although they have been drawn in the name of the resultant entity which came into existence consequent to a Scheme being approved, they bear the PAN of the erstwhile entity and which had since then ceased to exist - We find ourselves unable to place that mistake in the category of a “fundamental flaw” or “incurable illegality” as explained in Maruti Suzuki [2019 (7) TMI 1449 - SUPREME COURT]
Although in the writ petition it is averred that the original Section 148 notice was never served upon the petitioner, we find that the order of 15 March 2022 speaks of various subsequent notices which had been issued and remained unanswered. In any event, the present writ petitions merely impugn the notice under Section 142 (1) with no challenge having been mounted in respect of the original notice of reassessment. These petitions would consequently merit dismissal.
Whether disclosures with respect to the sanction of the Scheme were made in the course of the assessment proceedings? - The respondents categorically assert that no information with respect to a Scheme that may have been approved was provided during the course of assessment. The petitioners on the other hand aver that the respondents had been duly placed on notice of the proceedings pending before the NCLT and which had preceded the ultimate approval of the Scheme. In W.P.[above] petitioners allude to a communication issued by the Regional Director while the Scheme was pending approval.
As is manifest from the aforesaid recordal of facts, there was an abject and evident failure on the part of the petitioners to apprise the respondents of a Scheme which stood duly approved. Even if the concerned AO were assumed to have derived knowledge of the pendency of proceedings before the NCLT or called upon to furnish a consent to the proposed Scheme, the same would not absolve the assessee from the obligation of duly apprising the respondents once a Scheme of Arrangement came to be approved. These writ petitions would thus merit dismissal.
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2024 (9) TMI 1630
Validity of notices u/s 133 (6) and subsequent notice u/s 148 - HELD THAT:- Almost in similar facts, the High Court of judicature of Bombay in Benaifer Vispi Patel [2024 (8) TMI 53 - BOMBAY HIGH COURT] found that while the Central Government is empowered under Section 135A of the Act to make a scheme of income tax in the official gazette for the purpose of collecting information under Section 133B of the Act or for demanding the information under Section 133C of the Act, or by exercising power of inspection under Section 134 of the Act or under Section 135 of the Act, however, the same has to be exercised with due caution and care.
While the petitioner was served with a notice under Section 133 (6) of the Act in the present case and reply was filed, the reply was ignored stating that the same has not been filed. In circumstances where the information may not have been received in the electronic mechanism system which is also prone to errors, once it has come on record that reply had actually been filed, it would be wholly unjustified to allow the Revenue to make the assessee face the cumbersome proceedings under Section 148 of the Act.
Having proceeded on a presumption that reply not having been filed and the amount having escaped from income tax assessed, we are satisfied that the said amount was already recorded and included in the ITR for the AY 2020-21 and the same was duly processed by the AO and it was offered for tax as part of business turnover. We are satisfied that the impugned notice u/s 148 of the Act in the present case has been issued without application of mind and stands vitiated on that count. The proceedings initiated, therefore, are not sustainable in law.
Notice dated 31.03.2024 has been issued by the ACIT Central Karnal and the notices issued under Section 133 (6) and Section 148 of the Act were issued by the jurisdictional Assessing Officer. He, therefore, was also not competent to issue the same in view of the judgment passed in Jasjit Singh [2024 (8) TMI 228 - PUNJAB AND HARYANA HIGH COURT] wherein held notices issued by the JAO under Section 148 and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B have been found to be contrary to the provisions of the Act, 1961 and accordingly set aside.
Thus, we find the notices are not sustainable in law. We, accordingly, quash the impugned notices issued under Section 133 (6) of the Act, consequential notice dated 31.03.2024 issued under Section 148. WP allowed.
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2024 (9) TMI 1629
Validity of the order passed by the Income Tax Settlement Commission [ITSC] - restricting Applicability of interest u/s 234B on the total income which came to be disclosed in the Statement of Facts [SOF] up to the date of admission of that application u/s 245D (1) - HELD THAT:- As a sine qua non for the consideration of the application, the ITSC must firstly be satisfied that the applicant has made a full and true disclosure with respect to all details pertaining to income and the amount at which a settlement is prayed to be entered. This becomes apparent from Section 245D (1) enabling the ITSC to issue a notice to the applicant to explain why the application so made be allowed to be proceeded with.
ITSC is further enabled to call for reports and records from the Principal Commissioner with respect to the disclosures as made in such an application. It is only after the ITSC is convinced that a full, true and candid disclosure has been made by the applicant, that the same is admitted for further consideration. The amount which the applicant may ultimately be called upon to pay could hypothetically be more than that which may be disclosed in the SOF.
This is by virtue of the exercise and inquiry which the ITSC is enabled to undertake in terms of sub-sections (3) and (4) thereof. It is only upon the conclusion of that inquiry that the ITSC proceeds to fame a formal order in terms contemplated under sub-section (4)(a) and frame consequential directions in accordance with sub-section (6).
As in the case of Brij Lal [2010 (10) TMI 8 - SUPREME COURT] makes a clear distinction between the admission of an application under Section 245D (1) and the determinative exercise which the ITSC ultimately takes under Section 245D (4). It has in unequivocal terms observed that the interest liability flowing from Section 234 B cannot go or travel beyond the date of admission of the application under Section 245D (1). We are, therefore, of the firm opinion that the ITSC clearly committed no error in restricting the interest liability to the date of admission of the application.
We find no merit in the challenge which stands mounted. The writ petition fails.
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2024 (9) TMI 1628
Levy of penalty u/s. 271G - assessee failing to furnish documents and information u/s. 92CA/92D - HELD THAT:- There is no finding by the TPO / AO in the transfer pricing orders stating that the information / explanations provided by the assessee during the transfer pricing assessment proceedings were inaccurate or that there was any insufficient information / explanation preventing the TPO from determining the arm’s length price. On the contrary, the Transfer Pricing Officer has acknowledged that the assessee has furnished the details and information.
There is no finding recorded by the TPO that the conduct of the assessee lacks bonafides or there any indifference on the part of the assessee in not producing the records called for by the TPO leading to inability on the part of the TPO to determine the arm’s length price.
The most important factor is that whatever TP adjustment has been done by the TPO has been deleted by the DRP and the Revenue has accepted the order of the DRP. On similar facts in the case of Ankit Gems (P) Ltd. [2019 (7) TMI 13 - ITAT MUMBAI] has held that “where TPO had accepted benchmarking done by assessee under TNMM and no variation / adjustment was made by him to ALP imposition of penalty u/s. 271G would be unsustainable. Appeals by the assessee are allowed.
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2024 (9) TMI 1627
Revision u/s 263 - primary contention of the PCIT was that the AO failed to disallow unpaid leave salary u/s 43B and did not verify the claim of depreciation and additional depreciation on fixed assets - HELD THAT:- Upon examining the facts, it is evident that the AO had thoroughly reviewed the relevant details during the assessment proceedings. The Tax Audit Report, specifically Column 26(i)(A)(b), clearly indicated that the unpaid leave salary was disclosed as a liability and not claimed as a deduction. Only the amount paid was claimed in the profit and loss account, which was appropriately considered by the AO. This explanation was corroborated by detailed submissions, including ledger accounts and prior years' computations provided to the PCIT, demonstrating that there was no duplication of deductions.
As regards depreciation, AO reviewed the audited financial statements and the Tax Audit Report, particularly Form 3CD, which detailed all additions to fixed assets and the corresponding depreciation claimed. The auditor, had certified these claims, confirming their accuracy and compliance with the provisions of the Act.
The purpose of the Tax Audit under section 44AB of the Act is to ensure that financial records and claims are thoroughly verified by an independent professional, providing a reliable basis for the AO to rely upon. If the AO is expected to recheck all the details already certified by the auditor, especially when there are no specific qualifications or adverse remarks in the audit report, it would undermine the very purpose of the audit under section 44AB - AO appropriately relied on the certified audit report, as intended by law, and no further verification was necessary in absence of any discrepancies noted by the auditor. AO’s acceptance of the depreciation claim was fully justified and in line with the principles underlying the audit provisions.
For invoking jurisdiction u/s 263, it must be established that the assessment order is both erroneous and prejudicial to the interest of the revenue. In the present case, the AO’s order was based on a conscious examination of the records, and no substantive errors were pointed out by the PCIT that would indicate any failure in the verification process. The assessee’s argument that even if the unpaid leave salary and additional depreciation were disallowed, the resulting tax effect would be NIL due to the large available deduction u/s 80IA is relevant. The gross total income before deduction u/s 80IA was Rs. 12,04,36,098/-, and the available deduction under Section 80IA was Rs. 17,43,55,892/-. Thus, the taxable income would still remain NIL, demonstrating that there is no prejudice to the revenue.
The absence of proper inquiry led to an assessment order lacking the basic elements of scrutiny expected of the AO. Conversely, in present case under adjudication, the AO did not overlook critical details; instead, the alleged issues were evaluated, and decisions were made based on certified records. The PCIT’s contention that further inquiry was needed was speculative and not supported by any specific evidence of actual errors.
In case of Kandi Friends Educational Trust [2013 (10) TMI 1224 - PUNJAB AND HARYANA HIGH COURT] the lack of inquiry raised significant questions about whether the income of the trust was properly exempt under Section 11 of the Act, directly impacting the tax liability. In present case, the potential disallowances would not impact the tax liability due to the extensive section 80IA deduction available, making the order not prejudicial to the revenue in any practical sense. PCIT’s revisionary action was futile as the enhanced profits, even if added back, would be fully offset by the remaining section 80IA deduction.
Thus, the conditions of being erroneous and prejudicial to the revenue under Section 263 are not satisfied - Appeal filed by the assessee is allowed.
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2024 (9) TMI 1626
Penalty u/s 271(1)(c) - addition on account of short credit of sale consideration received from the sale of copy rights and cable rights - non specification of clear charge - concealment of income v/s furnishing inaccurate particulars of income - whether the penalty under section 271(1)(c) is sustainable in the light of the procedural lapse raised by the assessee? - HELD THAT:- It is settled position of law that in the penalty proceedings under section 271(1)(c), AO must clearly specify whether the penalty is being levied for concealment of income or furnishing inaccurate particulars of income. In the present case, notice issued u/s 274 r.w.s. 271(1)(c) does not specify the nature of default. Several judicial precedence have held that when the charge is not clearly specified in the penalty notice, the penalty proceedings are rendered invalid.
Hon’ble Supreme Court in the case of CIT & Anr, -vs.- M/s SSA’s Emerald Meadows [2015 (11) TMI 1620 - KARNATAKA HIGH COURT] and in the case of Manjunatha Cotton and Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] have held that vague notice u/s 274 rendered the penalty proceedings are void ab initio. In the present case, AO failed to specify the exact charge whether concealment of income or furnishing inaccurate particulars of income, which is clearly procedural lapse, since the penalty proceedings initiated without clarify on this issue. The imposition of penalty cannot be sustained.
Even on merits, the addition sustained by the CIT(Appeals) related to disputed adjustment of sale consideration of copy rights and cable rights. There is no finding that the assessee deliberately concealed its income or furnished inaccurate particulars of income. The explanation officered by the assessee appears to be bonafide one and there is no evidence suggests the malafide intention on the part of assessee. Appeal of the assessee is allowed.
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2024 (9) TMI 1625
Legality of the order u/s.143(3) - validity of action of the AO as the same has been passed u/s 143(3) of the Act as against the specific provisions u/s 153C - HELD THAT:- On perusal of the satisfaction note it reveals that same was recorded on 10-10-2022 by the AO after giving the findings that the seized assets and documents /digital data and information relates to assessee and it is a fit case for initiating proceedings u/s 153C r.w.s 153A of the Act for the A.Y. 2015-16 to 2020-21. The AO has issued the notice u/s.143(2) of the Act. On the similar facts, the coordinate Bench of the Tribunal in the case of Jasjit Singh [2014 (11) TMI 1012 - ITAT DELHI] it was held that the date of receiving of the seizes documents would become the date of search and six years period would be reckoned from this date
The date of recording of the satisfaction will be the deemed date for the possession of the seized documents which is 03-10-2022 and six years would be reckoned from this date. The submission made by Ld AR is tenable that the assessment year relevant for previous year in which search was conducted in the case of the assessee will be AY 2023-24 and six years immediately preceding the assessment year relevant for u/s 153C of the Act will be AY 2018-19 to 2022-23. The assessment for AY 2021-22 should have been carried out by issuing notice u/s 153C of the Act and not u/s 143(2) of the Act. There fore the assessment order dated 29-12-22 passed u/s 143(3) of the Act is bad in law and liable to be quashed and quashed accordingly. The additional grounds filed by the assessee are allowed.
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2024 (9) TMI 1624
TDS u/s 195 - assessee has paid an amount to the secondment employees of the parent companies - DRP after perusing the contract of agreement between Assessee and Toshiba Japan vis-à-vis placement of employees in India, formed a view that there was no employer employee relationship between the assessee and secondment employees and the amount which has been paid was in the nature of Fee for Technical Services (FTS) and hence the assessee ought to have deducted the TDS u/s 195 - HELD THAT:- When we go through the agreement then we find that there are certain other clauses like clause No.3.8 which says that tools, equipment, infrastructure and other information necessary for the international assignees (secondment employees) to carry out their duty would be provided by the assessee. Similarly, clause 11 would show that the assessee has also agreed to indemnify the parent company with respect to all claims remedies arising out of the Acts of international assignees (secondment employees).
Similarly other clauses of the agreement would show that the international assignees would have lien to their jobs in the parent company after the termination of the secondment employment agreement. All these clauses are required to be investigated by the AO to find out the true nature of the payments made to the secondment employee. We remit the entire issue to the file of AO for denovo examination considering additional evidences filed by the assessee before us. We also direct the AO to consider the alternative plea of the assessee.
Disallowance of technology fees paid by the assessee to the parent company - As assessee could not be able to establish with cogent material that the AE had actually rendered services to the assessee and assessee has also failed to derive any benefits from these payments - So far as the benefits factor is concerned, the courts have time and again held that the TPO/DRP/A.O cannot disallow the genuine expenses on the ground that no benefits have been received by an assessee. A reference can be made to the judgment of case of Ekal Application [2012 (4) TMI 346 - DELHI HIGH COURT] So far as rendering of services from the parent company to the assessee is concerned, the assessee has simply filed some e-mail correspondence between the parent company and the assessee.
In our view these e-mail correspondences are not enough to hold that the parent company had rendered technical services/assistance to the assessee. It is pertinent to observe that before us, the assessee has also filed an application dated 24.09.2021 praying to admit certain evidences to establish the receipt of services from the parent company - we remit this issue also to the file of A.O./TPO for deciding afresh in accordance with law after considering all the evidences filed before us.
Appeal of the assessee is allowed for statistical purpose.
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2024 (9) TMI 1623
Income deemed to accrue or arise in India - software licensing amounts to Fee for Included Services under Article 12(4)(b) of India-US DTAA or not? - scope of 'Make available’ clause - whether the professional service such as installation of software into customer system amount to Fee for Included Services under Article 12(4)(b) of India-US DTAA? - HELD THAT:- DR could not dispute that the issue with regard to software licensing is squarely covered by the order of the coordinate bench in which one of us i.e., Judicial Member was also on the Bench [2024 (9) TMI 1505 - ITAT DELHI] assessee has only got the commercial information and not the technical know- how/technical expertise or the technologies on the basis of which it was prepared. For bringing any payment within the definition of "fee for included services' the non- resident must make available the technical skill, expertise or technical know-how to the assessee, on the basis of which non-resident has prepared or developed the commercial information. Undisputedly in the instant case the technical skill, expertise or technical know-how used in preparing the commercial information was not made available to the assessee and hence the remittance made by the assessee for obtaining such commercial information cannot be called to be the 'fees for the included services to make it chargeable to tax in India. 'Make available’ clause is not satisfied, as erroneously held by the DRP ”
We are of the considered view that clearly, these services are merely support services dealing with installation and integration and when the primary services themselves are not taxable as FTS, these ancillary services qua the primary services cannot be taxed as FTS. Reliance is rightly placed by Ld. AR on decision of TSYS Card Tech [2023 (4) TMI 1088 - ITAT DELHI] and Net B.V [2017 (7) TMI 420 - ITAT DELHI] wherein it is held that installation and integration services are support services and not taxable as FTS.
Appeal of the assessee is allowed.
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