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Showing 41 to 60 of 18006 Records
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2023 (12) TMI 1397
Quashing of order passed u/s 74 of the GST Act on the ground that the petitioners are liable to pay GST on the amount of discount received by it on purchase of the motor vehicles contrary to the circular issued by Central Board of Indirect Taxes and Customs and the appellate orders passed under similar provisions under the Finance Act - HELD THAT:- When the matter was taken up for passing the order, it was found that the appellate order relied upon by the petitioners is under challenge before the CESTAT. In such circumstances, the petition is required to be kept pending till the CESTAT decides such issue.
Issue Rule returnable on 30th April, 2024. Ad interim granted earlier to continue as interim relief till the final disposal of this petition.
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2023 (12) TMI 1396
Denial of ITC - imported goods or not - HELD THAT:- Considering the facts and circumstances of the case and submission of the parties and in view of the instruction dated 20th December, 2023, this writ petition is disposed of by setting aside the impugned adjudication order dated 16th August, 2023 by directing the adjudicating authority concerned of the State GST, to pass a fresh adjudication order, within two weeks from the date of receipt of such order and allow the claim of ITC in accordance with law.
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2023 (12) TMI 1395
Cancellation of petitioner’s GST registration - petitioner has not filed returns for a continuous period of six weeks - non-application of mind - violation of principles of natural justice - HELD THAT:- It is seen from the impugned order that while the second respondent has referred to the petitioner’s purported reply dated 12.12.2022, in the very next sentence, the second respondent has also recorded that no reply is filed to the Show Cause Notice. The non-application of mind is obvious and therefore there must be interference quashing the cancellation of the petitioner’s GST registration but on terms.
The second respondent’s impugned order dated 30.12.2022 is quashed but on the condition that the petitioner shall file necessary declarations, if not already filed, and discharge of dues within the period of four [4] weeks from the date of receipt of a certified copy of this order - Petition allowed.
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2023 (12) TMI 1394
Maintainability of petition - availability of statutory remedy of appeal - non-constitution of the Tribunal - HELD THAT:- The respondent State authorities have acknowledged the fact of non-constitution of the Tribunal and come out with a notification bearing Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019 for removal of difficulties, in exercise of powers under Section 172 of the B.G.S.T Act, which provides that period of limitation for the purpose of preferring an appeal before the Tribunal under Section 112 shall start only after the date on which the President, or the State President, as the case may be, of the Tribunal after its constitution under Section 109 of the B.G.S.T Act, enters office.
Subject to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act. The petitioner cannot be deprived of the benefit, due to non- constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed.
Petition disposed off.
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2023 (12) TMI 1393
Addition made 56(2)(viib) on account of share premium received of allotment of shares - valuation of the Shares made by Technical Expert as required under Rule 11DA of the Income Tax Rules - HELD THAT:- The assessee has taken the DCF method for valuation of share which is followed by the Rule 11UA the Rule. However, there is no dispute between the parties that Rule 11UA(1) is not applicable on the facts and circumstances of the present case which is a provision of general nature whereas Rule 11UA(2) is a specific provision providing for the valuation of the unquoted equity shares.
After going through the relevant Section and the Rules, in our opinion, the matter of valuation of unquoted equity shares, has been completely left to the discretion of the assessee. It is his option whether to choose NAV Method (Book Value) under clause (a) or to choose DCF Method under clause (b) and the AO cannot adopt a method of his own choice.
We relied on the order of Crown Chemicals [2022 (12) TMI 1552 - ITAT MUMBAI], Hometrail Buildtech (P.) Ltd [2023 (9) TMI 797 - ITAT DELHI] and Nabh Multitrade Pvt. Ltd., [2020 (10) TMI 928 - ITAT JAIPUR] We find that the assessee valued the share amount to Rs. 158/- per share and allotted share is Rs.100 which is much less than the NAV which is not contravening of section 56(2) of the Act. Further, all the investment in equity shares are accumulated from the directors and son of director. So, the addition in related to contravening of section 56(2) is not justified. Accordingly, we set aside the appeal order.
Addition u/s 68 - non-furnishing of the identity and PAN of the creditors - HELD THAT:- The assessee was unable to substantiate its claim before the revenue authorities. Accordingly, we remit back the matter to the file of the CIT(A) for adjudication afresh.
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2023 (12) TMI 1392
Unexplained income u/s 68 r.w. section 115BBE - cash deposit post demonetization - Onus to prove - AO referred to the cash deposits made by the assessee in the month of October and November and compared to the last two years and held it to unreasonably high - HELD THAT:- Source of such cash deposits has been explained by the assessee as out of its cash sales so undertaken from time to time and it has also been explained that such cash sales are subject to VAT where VAT has been collected and deposited with the government treasury.
Assessee has furnished the cash book containing the entries towards the cash sales, cash deposits with bank, complete sale and purchase ledgers, sundry creditors, VAT returns, copy of trading and profit/loss account and balance sheet which are duly audited. No defect has been pointed out by the AO in terms of availability of stock or in any of the documentation so submitted by the assessee or in the books of accounts.
Merely the fact that certain cash deposits have been made by the assessee during the period of demonization and such deposits are on a higher side considering the past year figures cannot be basis to hold the explanation so made by the assessee as unsustainable and treat the cash sales as bogus and bringing the cash deposits to tax u/s 68 of the Act.
The comparative figures for past years can no doubt provides a starting point for further examination and verification but basis such comparative analysis alone and without any further examination which points out any defect or manipulation in the documentation so submitted or in terms of availability of requisite stock in the books of accounts, the sales so undertaken by the assessee which is duly recorded in the books of accounts cannot be rejected and treated as bogus. Decided in favour of assessee.
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2023 (12) TMI 1391
Challenge to summons issued under Section 70 of the Central Goods and Services Tax Act 2017 directing the petitioner through its proprietor to tender oral evidence - HELD THAT:- Let the petitioner appear before the designated officer on 23 January 2024 at 2.30 p.m.
Petition disposed off.
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2023 (12) TMI 1390
Application under section 30(6) of the Insolvency and Bankruptcy Code, 2016, after approval of the resolution plan by the Committee of Creditors - HELD THAT:- On perusal of the documents on record, it is satisfied that the Resolution Plan is in accordance with sections 30 and 31 of the IBC and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
Hon’ble Supreme Court in Ghanashyam Mishra and Sons Pvt Ltd v Edelweiss Asset Reconstruction Company Ltd, [2021 (4) TMI 613 - SUPREME COURT] has held that once a resolution plan is duly approved by the Adjudicating Authority under sub-section (1) of section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Govt, any State Govt or any local authority, guarantors and other stakeholders.
The Resolution Plan approved by CoC and being approved by this Adjudicating Authority shall be binding on the Corporate Debtor and other persons, authorities etc. as specified in section 31 of the Code.
Application disposed off.
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2023 (12) TMI 1389
Impleadment of the Respondent No. 2, Builders Association of India, in an ongoing proceeding to investigate allegations of cartelisation and price manipulations of Grey Cement Manufacturers - inspection of non- confidential records - power of CCI to review - failure to satisfy the conjunctive two-fold test given under Regulation 25 of ‘substantial interest’ and ‘public interest’ - Ultra vires action of Section 57 of the Competition Act - ex-parte - violation of principles of natural justice.
Impleadment of the Respondent No. 2, Builders Association of India, in an ongoing proceeding to investigate allegations of cartelisation and price manipulations of Grey Cement Manufacturers - HELD THAT:- During the process of enquiry by the Commission, Regulation 25 of the General Regulations 2009 allows the Commission the power to permit a person or enterprise to take part in proceedings given that they have a substantial interest attached to the outcome of the proceedings and that allowing them to take part is seen as a necessity in view of public interest.
It is contended by the Petitioner that the Order dated 05.07.2023 to implead BAI as a party to the proceedings under Suo Moto Case No. 2 of 2019 is improper as it fails to satisfy the conjunctive two-fold test given under Regulation 25 of ‘substantial interest’ and ‘public interest’ and that in absence of its satisfaction as reflected in the inadequacy of reasoning given in the impugned Order dated 05.07.2023 to that effect, the actions of the CCI in impleading BAI are illegal and unacceptable cannot be accepted.
Exercise of jurisdiction under Aricle 227 of the Constitution - HELD THAT:- It is trite law that Writ Courts while exercising its jurisdiction under Article 227 of the Constitution of India do not substitute the opinions arrived at by statutory bodies with their own, unless the decision arrived at by the statutory bodies are beyond their jurisdiction or there is a failure to exercise jurisdiction vested in them or the order passed is so perverse and illegal that it finds itself in contravention of Wednesbury principles. The nature and scope of the jurisdiction under Article 226 of the Constitution of India has been crystallised in several judgements of the Supreme Court.
The Apex Court in STATE OF PUNJAB AND ORS. VERSUS MEHAR DIN [2022 (3) TMI 1622 - SUPREME COURT], has held that 'The law on the subject is settled that the Courts being the custodian of fundamental rights are under an obligation to interfere where there is arbitrariness, irrationality, unreasonableness, malafides and bias, if any, but at the same time, the Courts should exercise the power of judicial review with a lot of restraint, particularly in contractual and commercial matters.'
In Bank Of India And Anr v. Degala Suryanarayana, [1999 (7) TMI 703 - SUPREME COURT], the Supreme Court has held that 'The Court exercising the jurisdiction of judicial review would not interfere with the findings of fact arrived at in the departmental enquiry proceedings excepting in a case of malafides or perversity i.e., where there is no evidence to support a finding or where a finding is such that no man acting reasonably and with objectivity could have arrived at that finding. The Court cannot embark upon reappreciating the evidence or weighing the same like an appellate authority. So long as there is some evidence to support the conclusion arrived at by the departmental authority, the same has to be sustained.'
In the present case, the impugned Order passed under Regulation 25 of the General Regulations 2009, also brings attention to the submissions made by BAI ,including considerations and records of BAI as an association with the largest consumers of cement - In view of the settled position of law, this Court is not inclined to substitute its conclusion to the one arrived at by the Board which is based on the material on record before the Commission.
The allegation of the Petitioner that the impugned order dated 05.07.2023 is devoid of adequate reasoning towards the satisfaction of the requirements under Regulation 25 of the General Regulations 2009 and it is, therefore, unreasoned cannot be accepted.
Principles of natural justice - Petitioner alleges that the requirements under Section 36 of the Act, which mandates that procedures followed by CCI ought to be in consonance with the principles of natural justice, were not followed in the present case as the impugned order dated 05.07.2023 was passed by CCI ex-parte - HELD THAT:- It is contended that the Petitioner was neither given due notice of the consideration of making BAI a party as under Regulation 25 of the Competition Regulation 2009 nor were they presented an opportunity of being heard before the impleadment of a third party to the Suo Moto Case No. 2 of 2019. The allegations of the Petitioner ought to be weighed here on the pointed question as to whether fulfilment of requirements under principles of natural justice were or were not followed in the present case, that is, whether there exists any procedural fallacy which renders the impugned Order dated 05.07.2023 improper and invalid in law.
It is, therefore, a reiteration of the well-established principle that a fair procedure very much includes the presentation of an appropriate notice to all involved parties. However, the contention of the Petitioner that such a notice was not provided to the Petitioner prior to the passing of the impugned Order dated 05.07.2023 by the CCI cannot by accepted by this Court.
Power of CCI to enquire into agreements - abuse of dominant position - HELD THAT:- The CCI has the power to enquire into agreements and dominant position of enterprises under Section 19 of the Act and the procedure for the same is given under Section 26 of the Act read with Regulation 21 under the General Regulations 2009. The nature of the proceedings under the ambit of this Act vis-à-vis the parties and their involved interests thereof was noted by the Apex Court in Samir Agarwal v Competition Commission of India, [2020 (12) TMI 621 - SUPREME COURT] where it was held that 'given the context of the Act in which the CCI and the NCLAT deal with practices which have an adverse effect on competition in derogation of the interest of consumers, it is clear that the Act vests powers in the CCI and enables it to act in rem, in public interest.'
The power to review the orders of CCI, which were given under Section 37 of the Act, had subsequently been repealed by the Competition Amendment Act, 2007. The Petitioner contents that the impugned Order accepting the impleadment application of BAI dated 05.07.2023 is a review of the previous Order dated 29.12.2021 whereby CCI had rejected the initial impleadment application of BAI.
Ultra vires action of Section 57 of the Competition Act - HELD THAT:- The impugned Order passed by CCI does not ensue the grant of confidential records of proceedings to BAI. Moreover, it is also clear that the grant of non-confidential information is also explicitly recorded to be done within the bounds of Regulation 37(1) which can only be exercised subject to conformity with the safeguards enumerated within Section 57 of the Act and Regulation 35 of the General Regulations 2009 as noted above. The contention of the Petitioner that adequate safeguards under Section 57 have been ignored by CCI in its passing of the impugned Order cannot be accepted by this Court. The requisite procedural provisions on sharing information with parties to the proceedings have been duly paid attention to and followed by CCI as far as the impugned Order dated 05.07.2023 challenged in the present Writ is concerned.
It is evident that the stage at which compensation under Section 53N can be invoked is that of an Appellate Stage, post the final orders of CCIin any proceedings initiated before it. Therefore, at the present stage of proceedings in the Suo Moto Case No. 2 of 2019, invoking Section 53N is neither an option for the Petitioner, nor is there any reason to prefer an application for compensation when there exists a carved out provision in the form of Regulation 25 which allows the party to take part in the proceedings before the CCI after its satisfaction. The fact that the proceedings under the Competition Act apply in rem is of no consequence when the CCI is adjudicating the allegations regarding the cartelization and price manipulation.
Conclusion - The court upheld the CCI's decision to implead BAI, finding no violation of procedural fairness or statutory provisions - Petition dismissed.
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2023 (12) TMI 1388
Money Laundering - provisional attachment of properties - proceeds of crime - nexus between the alleged schedule offences and the attached property - reasons to believe - complainants availed loans through various instant loan apps that have been charging exorbitant interest rates along with high processing fee and GST charges - HELD THAT:- The contention of the learned counsel for the appellants that M/s Sarvottam Fincap Ltd. was the only NBFC against which there are no allegations regarding involvement of any Fintech Company is devoid of merit, as it took ICD of Rs. 4.52 crores on 14.01.2020 from its newly incorporated sister company M/s VPoint IT Solutions Pvt. Ltd. and the new company received loan from foreign/overseas companies in the month of February to May 2020. This proves that M/s VPoint IT Solutions Pvt. Ltd. was incorporated by M/s Sarvottam Fincap Ltd. for the purpose of receiving overseas loan from Foreign Fintech Companies. The conspiracy between both the appellants and the overseas investor is apparent on the face of record.
The fact that no sanction or adverse order is passed by the RBI against the appellant companies till date is also no ground to allow the present appeals, being a separate prerogative of the RBI as a Regulatory Authority. The fact that appellant M/s Sarvottam Fincap Ltd. after taking ICD of Rs. 4.52 crores from appellant M/s VPoint IT Solutions Pvt. Ltd. disbursed the small loans on high rate of interest and processing fee shows that huge amount was rotated again and again to earn high profits in a very short span by exercising coercive re- payment techniques, as mentioned above. Respondent ED in its written submissions pointed out that appellant M/s Sarvottam Fincap Ltd. through their APP “Paisa Finch” has disbursed a loan amount of Rs. 90,49,91,734, out of which a whopping amount of Rs. 17,27,97,774 was deducted upfront in the name of processing fees. M/s Sarvottam has also received an amount of Rs. 79,60,938 as interest/penalty. Thus, the total proceeds of crime are much more than the total attached amount of Rs. 5,03,85,408 & Rs. 59,416 in the accounts of the appellants respectively.
The contention of appellants that the reasons to believe recorded in the ShCN of the Ld. Adjudicating Authority are merely copy & paste of the allegations made by ED in their original complaint is also devoid of merit. The ECIR was registered on the basis of FIR lodged against the appellants and the allegations made in the said FIRs, is sufficient to form basis for reason to believe by the ED, as well as by Ld. Adjudicating Authority and accordingly recorded. The said reason to believe is not going to change its colour or form a divergent/contradictory view, after perusal of material on record by Ld. Adjudicating Authority.
Conclusion - The provisional attachment of properties as justified under PMLA due to the appellants' involvement in money laundering activities - Appeal dismissed.
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2023 (12) TMI 1387
Beneficial ownership nominee of a holder of shares or securities of the shares or securities subject matter of nomination - Scheme, intent & object behind the Companies (Amendment) Act, 1999 - implication of the scheme of ‘nomination’ under the Companies Act, 1956 as well as other comparable legislations - use of the term ‘vest’ and the presence of the non- obstante clause within the provisions of the Companies Act, 1956 - Nomination under the Companies Act, 1956 vis-à-vis law of succession.
Scheme, intent & object behind the Companies (Amendment) Act, 1999 - HELD THAT:- Reading the provision of nomination within the Companies Act, 1956 with the broadest possible contours, it is not possible to say that the same deals with the matter of succession in any manner. There is no material to show that the intent of the legislature behind introducing a method of nomination through the Companies (Amendment) Act, 1999 was to confer absolute title of ownership of property/shares, on the said nominee - In fact, while interpreting other enactments that are similar in nature by virtue of the fact that the provision of nomination within the statute begins with a non-obstante clause and/or is armed with the term ‘vest’ such as the (Banking Regulation Act, 1949, the Government Savings Certificate Act, 1959 and/or the Employees Provident Fund Act, 1952), multiple courts have rejected the argument that the nominee would become the absolute owner to the exclusion of the legal heirs. To hold otherwise would exceed the scope and extent of S. 109A of the Companies Act, 1956.
Implication of the scheme of ‘nomination’ under the Companies Act, 1956 as well as other comparable legislations - HELD THAT:- A consistent view appears to have been taken by the courts, while interpreting the related provisions of nomination under different statutes. It is clear from the referred judgments that the nomination so made would not lead to the nominee attaining absolute title over the subject property for which such nomination was made. In other words, the usual mode of succession is not to be impacted by such nomination. The legal heirs therefore have not been excluded by virtue of nomination.
There are variations with respect to the word ‘vest’ being present in some legislations (the Employees Provident Fund Act, 1952) and absent in others (the Insurance Act, 1939, the Cooperative Societies Act, 1912). Looking at the dissimilarities and the fact that uniform definition is not available relating to the rights of ‘nominee’ and/or whether such ‘nomination’ bestows absolute ownership over nominees, it is only appropriate that the terms are considered as ordinarily understood by a reasonable person making nominations, with respect to their movable or immovable properties. A reasonable individual arranging for the disposition of his property is expected to undertake any such nomination, bearing in mind the interpretation on the effect of nomination, as given by courts consistently, for a number of year - The legislative intent of creating a scheme of nomination under the Companies Act, 1956 in our opinion is not intended to grant absolute rights of ownership in favour of the nominee merely because the provision contains three elements i.e., the term ‘vest’, a non-obstante clause and the phrase ‘to the exclusion of others’, which are absent in other legislations, that also provide for nomination.
Use of the term ‘vest’ and the presence of the non- obstante clause within the provisions of the Companies Act, 1956 - HELD THAT:- In Vatticherukuru Village Panchayat v. Nori Venkatarama Deekshithulu, [1991 (4) TMI 447 - SUPREME COURT] this Court considered the question of the effect of ‘vesting’ under S. 85 of the AP Gram Panchayat Act, 1964 of the water works & appurtenant land on the Gram Panchayat. It was held that the word ‘vesting’ in S. 85 did not confer absolute title on the Gram Panchayat. Even after vesting, the Government, in appropriate cases, was amenable to place restrictions on the Gram Panchayat on enjoyment of such waterworks & lands - In Municipal Corpn. of Greater Bombay v. Hindustan Petroleum Corpn. [2001 (8) TMI 1406 - SUPREME COURT] it was observed that the term ‘vesting’ is capable of bearing the meaning of limited vesting, in title as well as possession, and is referrable to the context and situation within which it operates. The above would suggest that the word ‘vest’ has variable meaning and the mere use of the word ‘vest’ in a statute does not confer absolute title over the subject matter.
In the context of the facts of the present case, S. 109A of the Companies Act (pari materia to S. 72 of the Companies Act, 2013) provides for vesting of shares/debentures of a share/debenture holder unto his nominee ‘in the event of his death’. Similarly, Bye-law 9.11.1 under the Depositories Act, 1996 provides for ‘vesting’ of the securities unto the nominee on the death of the beneficial owner - The vesting of the shares/securities in the nominee under the Companies Act, 1956 and the Depositories Act, 1996 is only for a limited purpose, i.e., to enable the Company to deal with the securities thereof, in the immediate aftermath of the shareholder’s death and to avoid uncertainty as to the holder of the securities, which could hamper the smooth functioning of the affairs of the company. Therefore, the contrary argument of the appellants on this aspect is rejected.
Nomination under the Companies Act, 1956 vis-à-vis law of succession - HELD THAT:- The appellants’ have contended that nominations under S. 109A of the Companies Act, 1956 & Bye-law 9.11 of the Depositories Act, 1996 suggest the intention of the shareholder, to bequeath the shares/securities absolutely to the nominee, to the exclusion of any other persons (including legal representatives) and constitutes a ‘statutory testament’. However, aforesaid argument is not acceptable for the following reasons: a. The Companies Act, 1956 does not contemplate a ‘statutory testament’ that stands over and above the laws of succession, b. The Companies Act, 1956 as iterated above is concerned with regulating the affairs of corporates and is not concerned with laws of succession. c. The ‘statutory testament’ by way of nomination is not subject to the same rigours as is applicable to the formation & validity of a will under the succession laws, for instance, S. 63 of the Indian Succession Act, wherein the rules for execution of a Will are laid out.
Therefore, the argument by the appellants of nomination as a ‘statutory testament’ cannot be countenanced simply because the Companies Act, 1956 does not deal with succession nor does it override the laws of succession. It is beyond the scope of the company’s affairs to facilitate succession planning of the shareholder. In case of a will, it is upon the administrator or executor under the Indian Succession Act, 1925, or in case of intestate succession, the laws of succession to determine the line of succession.
Conclusion - Consistent interpretation is given by courts on the question of nomination, i.e., upon the holder’s death, the nominee would not get an absolute title to the subject matter of nomination, and those would apply to the Companies Act, 1956 (pari materia provisions in Companies Act, 2013) and the Depositories Act, 1996 as well - The object of introduction of nomination facility vide the Companies (Amendment) Act, 1999 was only to provide an impetus to the investment climate and ease the cumbersome process of obtaining various letters of succession, from different authorities upon the shareholder’s death.
Upon a careful perusal of the provisions within the Companies Act, it is clear that it does not deal with the law of succession. Therefore, a departure from this settled position of law is not at all warranted.
The impugned decision takes the correct view - The appeal is accordingly dismissed without any order on cost.
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2023 (12) TMI 1386
Seeking release of amount seized during a search by CGST officers - HELD THAT:- This Court in its judgment DEEPAK KHANDELWAL PROPRIETOR M/S. SHRI SHYAM METAL VERSUS COMMISSIONER OF CGST, DELHI WEST & ANR. [2023 (8) TMI 929 - DELHI HIGH COURT], had held that the concerned authorities do not have the power to cease cash found during the search conducted under Section 67 (1) of the CGST Act.
Thus, the currency ceased is required to be returned to the petitioner - the concerned authority is directed to remit the aforesaid amount into the bank account of the petitioner - petition allowed.
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2023 (12) TMI 1385
Condonation of 17 days’ delay in filing the Appeal - HELD THAT:- It is well settled that the limitation for filing the Appeal shall commence on the date when order of Adjudicating Authority is pronounced and it has no dependence on the date of uploading of the order, which has been laid down by the Hon’ble Supreme Court in V. Nagarajan vs. SKS Ispat and Power Limited & Ors., [2021 (10) TMI 941 - SUPREME COURT (LB)].
The jurisdiction to condone delay is limited to only 15 days under Section 61(2) proviso. The delay cannot be condoned as prayed in the application - Delay Condonation Application is dismissed. In result, Memo of Appeal is rejected.
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2023 (12) TMI 1384
Validity of final assessment order passed u/s 143(3) r.w.s. 144C(3) and 144B - Petitioner had filed its objections u/s 144C(2) with DRP, however, did not upload the objections in the portal due to a technical impediment in the portal - HELD THAT:- As Faceless Assessing Officer unaware of the fact that the Petitioner has filed its objections, proceeded to pass the assessment order without waiting for the directions of DRP under Sub-section 5 of Section 144C of the Act.
Therefore, without going into merits of the matter and in view of the view expressed by us in Sulzer Pumps India Private Limited [2021 (12) TMI 891 - BOMBAY HIGH COURT] and Pepsico India Holdings Private Limited [2023 (12) TMI 226 - DELHI HIGH COURT] we hereby quash and set aside the assessment order.
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2023 (12) TMI 1383
Revision u/s 263 - eligibility of exemption u/s 10(21) - HELD THAT:- We notice that entitlement of the assessee for exemption u/s 10(21) has been the core issue in entire proceedings for the year under consideration. In the original return the assessee had claimed deduction u/s 11 and it was only during the reassessment proceedings u/s 147 of the Act, the alternate claim of exemption u/s 10(21) is made by the assessee.
From the perusal of records all the details pertaining to the alternate claim of the assessee have been submitted and are part of the records. Therefore there is merit in the claim of the ld AR that the order under section 144 r.w.s. 263, though the assessee did not make any fresh submissions, all the details pertaining to eligibility of the assessee for exemption u/s 10(21) have been examined by the AO and he has taken a possible view that the impugned incomes are correctly included for the purpose of exemption.
It is relevant to notice that in the celebrated decision of Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] in the context of revision proceedings u/s 263 it is held that "Every loss of revenue as a consequence of an order of AO cannot be treated as prejudicial to the interests of the revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Income- tax Officer is unsustainable in law"
The claim of the assessee is that the income derived from Auditorium Hire charges, hoarding site & service charges and rent are incidental to the attainment of the objectives of the assessee trust and the reason for excise of revisionary power under section 263 is that the said income is not incidental to the objectives.
AR relied on the decision of Association of Surgeons of India [2016 (7) TMI 521 - ITAT CHENNAI] wherein it was held that the income earned from letting out of Auditorium was eligible for exemption under section 11 when the income was applied to the objects of the Trust. Therefore there is merit in the contention that whether the impugned income is incidental to the objects of the assessee trust is a debatable issue and that the AO while allowing the exemption in the order passed under section 144 r.w.s. 263 has taken a possible view upon verifying the details available on record.
Thus, we hold that the conclusion of the second CIT (Exemptions) that the order passed by the AO is erroneous is not tenable and liable to be quashed. Appeal of assessee is allowed.
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2023 (12) TMI 1382
Income deemed to accrue or arise in India - Taxability of amount received - PE in India - Indo-China DTAA - whether payments made by the assessee’s customers to it constituted royalty, in respect of software supplied? - as confirmed by SC [2021 (7) TMI 1336 - SC ORDER] supplies made (of the software) enabled the use of the hardware sold. It was not disputed that without the software, hardware use was not possible. The mere fact that separate invoicing was done for purchase and other transactions did not imply that it was royalty payment. In such cases, the nomenclature (of license or some other fee) is indeterminate of the true nature.
HELD THAT:- We find no ground to interfere with the impugned order(s) passed by the High Court. The Special Leave Petitions are, accordingly, dismissed.
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2023 (12) TMI 1381
Reopening of assessment u/s 147 - AO based on the bank statements obtained from Karur Vysya Bank Ltd. had noticed certain credits into the bank account of the assessee and had called for furnishing details in this regard - HELD THAT:- We also notice that the assessee did not appear before the CIT(A) who has concluded the appellate proceedings ex-parte based on the materials available on records.
Given this in the interest of natural justice and fair play we are of the considered view that the assessee be given one final opportunity to present the case on merits. Accordingly we remit the issue back to the AO for de novo verification calling for necessary details as may be required. Assessee is directed to furnish the required information as may be called for without seeking any adjournments and cooperate with the proceedings. Appeal of the assessee is allowed for statistical purposes.
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2023 (12) TMI 1380
Validity of assessment proceedings are time-barred - release the refunds along with interest in accordance with Section 244A as returned assessment should be accepted - petitioner states that as the limitation period to pass such orders, as per the statutory timelines prescribed u/s 153(3) read with Section 153(4) and Section 153(5) of the Act have expired, the assessment proceedings have become time-barred
HELD THAT:- In the event, the AO has not passed the assessment orders in accordance with the orders of remand passed by the ITAT within the time stipulated under Section 153(3) read with Section 153(4) and Section 153(5) of the Act, the returned assessments are directed to be accepted on the said issues. AO shall also release the refunds, if any, along with applicable interest in accordance with Section 244A of the Act within a further period of eight weeks. This Court clarifies that it has passed this order, as it is settled law that assessment is complete only when the AO passes an assessment order determining the total income and the demand notice determining the tax payable by the assessee is issued. [See: Kalyan kumar Ray v. CIT [1991 (8) TMI 291 - SUPREME COURT].
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2023 (12) TMI 1379
Validity of reassessment proceedings against non existing entity - whether it is defect which is curable u/s 292B? - HELD THAT:- It is settled law that the said defect is not curable. This court in Alok Knit Exports Ltd. [2021 (8) TMI 777 - BOMBAY HIGH COURT] while dealing with submissions of Revenue held that human errors and mistakes cannot and should not nullify proceedings which were otherwise valid and no prejudice has been caused, relying on judgment of Maruti Suzuki India Ltd [2019 (7) TMI 1449 - SUPREME COURT] held that the basis on which jurisdiction is invoked is under Section 148 of the Act and when such jurisdiction was invoked on the basis of something which was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation, the notice is bad in law.
It has been time and again held that the notice issued to a non existing entity is not valid. Decided in favour of assessee.
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2023 (12) TMI 1378
Disallowance u/s 37(1) - expenses being contribution / donation to educational institutions, trust, local bodies - commercial expediency or not? - As decided by HC [2019 (8) TMI 1288 - GUJARAT HIGH COURT] correct test should be of commercial expediency and not whether the payment was compulsory for the assessee to make or not. ITAT has not erred in law and on facts in deleting disallowance u/s 37(1) in respect of expenses being contribution / donation to educational institutions, trust, local bodies, thus decided issue in favour of assessee - HELD THAT:- Upon hearing the counsel the Court made the following
Heard learned counsel for the petitioner-Department. Leave granted.
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