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2024 (12) TMI 1194
Classification of services - Whether the services rendered by the appellant to overseas universities/colleges amounts to ‘Export of Service’ as contended by appellants or it is ‘intermediary service’ as alleged by the department? - Invocation of Rule 9 of Export of Service Rules - Extended period of limitation.
Classification of services - Whether the services rendered by the appellant to overseas universities/colleges amounts to ‘Export of Service’ as contended by appellants or it is ‘intermediary service’ as alleged by the department? - HELD THAT:- It is observed that in all contracts with the foreign universities, it is explicitly written that NNCCPL is not an agent of such universities. There is a clear denial of agent-principal relationship in the Agreement itself.
All the conditional as laid down in Rule 6A of Service Tax Rules, 1994 are held satisfied in the present case. Though department’s stand is that place of provision of service is taxable territory as the services are provided to Indian students. But the services as mentioned above have been rendered by the appellants for promotion and publicity of foreign universities among Indian students. The agreement for the same is between appellant and foreign universities. There is no agreement of appellant with Indian students. The amount in question is received from foreign universities in convertible foreign exchange and not from Indian students. The students are paying fees in case of getting admission, to the foreign university only. These observations are sufficient for us to hold that Indian students are not the service recipients of the impugned services rendered by the appellants. The place of provision is wrongly held to be in taxable territory (India). Hence foreign consultancy services provided by an assessee amounts to ‘Export of services’ and they are outside the ambit of service tax and they are wrongly alleged as being rendered by intermediary.
The fundamental principle enunciated by the Apex Court in ALL INDIA FEDERATION OF TAX PRACTITIONERS & ORS VERSUS UNION OF INDIA & ORS [2007 (8) TMI 1 - SUPREME COURT] is that service tax is a destination based consumption tax, leviable only on services provided within the country. The provision of Section 66B of the Act, explicitly provides that for service tax to be levied in terms of Chapter V of the Act, the service had to be provided within the taxable territory. But in case where services are provided outside the 'taxable territory', where the service provider is in India and the recipient of service is located outside India, in normal parlance it would be export of service.
Invocation of Rule 9 of Export of Service Rules - HELD THAT:- The services of M/s NNCCPL falls within the ambit of Rule 3 of Place of Provision Rules, 2012, according to which location of service recipient is relevant. Foreign universities the service recipient, are located outside the taxable territory. Therefore place of provision of impugned Foreign Consultancy Service is outside the taxable territory. Accordingly, the show cause notice has wrongly invoked Rule 9 of Place of Provision Rules. Demand confirmed invoking said rule is therefore, liable to be set aside. The issue is otherwise no more res integra as being already dealt with by this Tribunal Principal bench in the case of M/S CHF INDUSTRIES INDIA (P) LTD. VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX, NOIDA [2021 (10) TMI 641 - CESTAT ALLAHABAD], MACQUARIE GLOBAL SERVICES PVT LTD VERSUS COMMISSIONER OF CE & ST, GURGAON-I [2021 (12) TMI 481 - CESTAT CHANDIGARH] and M/S. R.S. GRANITE MACHINE TOOLS PVT. LTD. VERSUS THE COMMISSIONER OF GST & CE (CHENNAI-NORTH) [2019 (1) TMI 1179 - CESTAT CHENNAI].
Extended period of limitation - HELD THAT:- In present case, NNCCPL has been registered with the Service Tax department and has been filing its service tax returns regularly. Payment of Service Tax as applicable on them has clearly been discharged by them vis-à-vis domestic consultancy Income and Coaching Services. The appellant is held not liable to pay service tax with reference to foreign Consultancy Income i.e. the income received from foreign universities for promoting and publicizing their business in India. There is no evasion of tax, question of having any intent to evade is redundant when the tax is already paid. Thus the show cause notice is barred by time.
The appellants are wrongly held as intermedia in terms of Rule 2(f) of Place of Provision Rules, 2012. The services rendered amounts to ‘Export of Service’ in terms of Rule 6A of Service Tax Rules. Hence Rule 9 of Place of Provision Rules has wrongly been invoked. Appellant is, therefore, not liable to pay service tax on foreign Consultancy fee. The show cause notice is otherwise held to be barred by time - the order under challenge is set aside and the appeal is hereby allowed.
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2024 (12) TMI 1193
Liability of Service tax on the entire amount without deducting TDS - Department has entertained a view that the appellant should have discharged their service tax liability on the entire amount which was decided to be paid to the appellant that is the appellant should not have deducted the amount of TDS while discharging their service tax liability - HELD THAT:- It can be seen from the order of the learned Commissioner (Appeals) that the short payment of the service tax has been demanded on TDS amount. It is an established legal proposition that the amount of the TDS has to be deducted from the taxable value for charging service tax as per the provisions of Section 67 Finance Act, 1994 read with relevant service tax rules.
While holding the above view reliance placed on this Tribunal decision in case of M/S. MAGARPATTA TOWNSHIP DEVELOPMENT AND CONSTRUCTION CO. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III [2016 (3) TMI 811 - CESTAT MUMBAI] where it was held that 'There is nothing on record that indicates that the appellant had recovered that amount of Income Tax paid by them on such amount paid to the service provider from the outside India and any other material to hold that this amount is paid is consideration for services received from service provider.'
The service tax cannot be demanded on the TDS amount which have been deducted from the taxable value - the impugned order-in-appeal is without any merit and is set aside - appeal allowed.
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2024 (12) TMI 1192
Valuation of Excise duty - two firms are related to one another as per Schedule 1A to the Clause (c) of Section 6 of the Companies Act, 1956 and as provided under Section 4(3)(b) of the Act or not - requirement to value in terms of Section 4(1)3(b)(ii) of Central Excise Act, 1944 read with Rule 9 of Central Excise Valuation Rules or not - HELD THAT:- The same issue has come for consideration before this Bench in the appellant’s own case for the demand raised for the period 2003- 04 and 2005-06.
The Bench in HINDUSTAN PUMPS & ELECTRICAL ENGINEERING PVT. LTD., MALKOH MARKETING PVT. LTD. VERSUS C.C.E. & S.T. - PANCHKULA, C.C.E. DELHI-III [2018 (10) TMI 532 - CESTAT CHANDIGARH] held that 'the appellant are not related persons in terms of section 4(3)(b)(ii) of Central Excise Act, 1944 and provisions of Rule 9 of the Central Excise Valuation Rules, 2000, are not applicable to the facts of this case, therefore, the impugned orders are not sustainable in the eyes of law.'
The issue is squarely covered in favour of the appellants and the impugned orders cannot be sustained - Appeal allowed.
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2024 (12) TMI 1191
Levy of penalties u/r 26 of Central Excise Rules, 2002 - non-payment of duty by the manufacturer of goods on job work basis by M/s Paras Trading Company - HELD THAT:- As per the facts of the case, it is found that M/s Paras Trading Company was involved in direct sale on principal to principal basis as well as on job work on behalf of the Rcuhi Soya Industries as well as Cargill India Pvt Ltd. The appellant was under bona fide belief that the direct sale is covered under SSI exemption for the reason that as per their bonafide belief job work goods being not dutiable in their hands is not includible in the aggregate value of the overall clearances of the goods. For this reason M/s Paras Trading Company has not discharged the duty.
It is also found that the issue of excise duty liability on the job work was under serious dispute as there were conflicting judgments and subsequently this CESTAT’s Larger Bench in the case of THERMAX BABCOCK AND WILCOX LTD., THERMAX LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2017 (12) TMI 266 - CESTAT MUMBAI] settled the issue holding that job worker is liable to pay duty even the goods is manufactured on job work basis. The larger bench judgment was delivered subsequent to the passing of the impugned order in the present case.
It is also observed that M/s Paras Trading Company has made legitimate transaction by issuing of invoices and all the transactions and payment particulars are recorded in their books of accounts. This is not case of clandestine removal such as removal of goods without issuing any documents. Therefore, there is no doubt that the appellant has rightly entertained the bona fide belief even though they were liable to pay the excise duty.
When the goods were received by the principal manufacturers under proper documents, if any lapse on the part of the job workers the same cannot be attributed to the principal manufacturer or even to their employees. Therefore, irrespective of any offence whether or not committed by the M/s Paras Trading Company these two appellants cannot be penalized under Rule 26 - the appellants are not liable for penalty under Rule 26 of Central Excise Rules, 2002.
The penalties on all the present appellants are set aside - Appeals are allowed.
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2024 (12) TMI 1190
Determination of assessable value of Lubricating Oils and other products - requirement to adopt value as provided under Rules 7 of Central Excise Valuation Rules, 2000 read with section 4 of the Central Excise Act, 1944 - extended period of limitation.
Vlauation of goods - HELD THAT:- It is a matter of record that they have adjusted the duty payments considering sale price on which Central Excise duty have been discharged at the factory gate and the sale price on which the goods have actually been cleared ex-C & F depot. There have been differences both on positive and negative sides, the appellant have paid excess Central Excise Duty on certain goods that is where the price at factory gate has been taken at higher side than the prices on which the goods ex-C & F depot have been cleared and that amount has been adjusted by them towards the short payment of duty taking ex-C & depot price. The appellant vide their letter dated 18.11.2009, 04.04.2010, 12.08.2011, 05.09.2011, 23.12.2011 and 20.01.2012 have submitted all the relevant information of the prices on which goods were cleared at the factory gate as well as the ex- C & F depot price. The show cause notice dated 16.04.2013 has been issued demanding short payment of Central Excise Duty for Financial year 2008-09 to December 2012.
Extended period of limitation - HELD THAT:- For invoking extended time proviso under section 11A(4), the elements of fraud, collusion, willfull mis-statement, suppression of facts or contravention of any provisions of this act or rules with an intention to evade payment of Central Excise Duty need to be presented. The facts of the matter clearly speak that the appellant on their own informed the department since 18.11.2009 giving all the details of ex-factory prices as well as ex-C & F depot prices. In such circumstances it is wrong on the part of the department to invoke the extended time proviso under section 11A(4) of the Central Excise Act, 1944 - the impugned show cause notice and the orders issued confirming the show cause notices are legally not sustainable on the point of time limitation.
The impugned order-in-appeal is not sustainable and therefore set aside - appeal allowed.
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2024 (12) TMI 1189
Classification of product called ‘Zymegold Plus Granules’ - classifiable under Central Excise Tariff item 3101.0099 as fertilizer or as plant growth regulator under Central Excise Tariff item 3808.9340? - HELD THAT:- The matter stands covered by the coordinate bench decision in relation to the same product in the matter of M/S. GODREJ AGROVET LTD. VERSUS COMMISSIONER OF CGST, KOLHAPUR [2023 (5) TMI 299 - CESTAT MUMBAI] wherein the same product i.e. ‘Zymegold Plus’ was involved and it was held that 'The impugned order is liable to be set aside as the products in issue are fertilizers and therefore the appellants have rightly classified their products.'
Thus, the product is classifiable as claimed by the party under the Central Excise Tariff Item 31010099 and the same is to be treated as a fertilizer has claimed by them - appeal allowed.
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2024 (12) TMI 1188
Challenge to attachment of bank and Demat accounts and the demand notice for recovery under the Maharashtra Land Revenue Code (MLRC) - opportunity of hearing was not provided - violation of principles of natural justice - HELD THAT:- It does appear that the impugned attachment orders and notices have been issued without disposal of the show-cause notices. The attachment orders do not refer to any final adjudication orders. These notices threaten the petitioners with serious civil consequences. Therefore, before taking such drastic action, the principles of natural justice and fair play had to be complied with. The impugned attachment notices and other notices warrant interference on this short ground.
In these cases, the respondents had themselves given the show cause notices to the petitioners. Accordingly, it was incumbent upon the respondents to dispose of the show cause notices in accordance with law before the impugned notices could have been taken.
Petition allowed.
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2024 (12) TMI 1187
Rate of tax - inter-state sales of safety equipment without the ‘C’ form - requirement to pay tax at the rate of 4% as per the entry 34 schedule (4) - HELD THAT:- On perusal of the record, it shows that the petitioner had paid tax in accordance with the schedule of the Act from the beginning and has never claimed any exemption through ‘C’ forms. Therefore, the question of submitting the ‘C’ forms for the goods in dispute does not arise. The authorities below and also the Appellate Tribunal, did not consider the petitioner’s case in its the proper prospective.
On perusal of the orders passed by the authorities and as well as the Tribunal, it is succinctly clear that without going into the aspect of rate of tax as against the goods dealt by the assessee of the authorities including the Tribunal must directed with the issue on hand and passed orders under challenge mulcting the assessee to pay tax at the rate of 14.5%, since he did not produce the ‘C’ forms. The furnishing of ‘C’ forms would arise only when the assessee is claiming exemption - But in the instant case he has paid tax as per the schedule appended to the Act for the goods viz., hand gloves.
In that view of the matter, the orders of the Tribunal and also the order of the Appellate Deputy Commissioner and Assessing Authority are set aside, and the matter is remanded to the Assessing Authority to take-up the assessment afresh and pass appropriate orders, after giving opportunity of being heard to the petitioner and the same has to be completed within a period of four weeks from the receipt of copy of this order - the Tax Revision is allowed.
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2024 (12) TMI 1186
Whether the High Court is legally correct in interfering with and setting aside the same and discharging the respondent - Prevention of Corruption - Disproportionate income - Submission of copy of ITR and other information before the High Court without disclosing the same before the trial court - framing of charge u/s 109 of the Indian Penal Code, 1860 read with Section 13(1)(e) punishable under Section 13(2) of the Prevention of Corruption Act, 1988 - HELD THAT:- Taking note of the fact that in the case on hand, the High Court set aside the charge framed against the respondent while exercising the revisional power, it is relevant to refer to the decision in MINAKSHI BALA VERSUS SUDHIR KUMAR AND ORS. [1994 (5) TMI 287 - SUPREME COURT]. This Court on the question of quashing of charge by the High Court held that 'once charges are framed under Section 240 CrPC the High Court in its revisional jurisdiction would not be justified in relying upon documents other than those referred to in Sections 239 and 240 CrPC; nor would it be justified in invoking its inherent jurisdiction under Section 482 CrPC to quash the same except in those rare cases where forensic exigencies and formidable compulsions justify such a course.'
A perusal of the impugned judgment would reveal the nature of the exercise undertaken for passing the impugned judgment. In fact, the aforesaid observation was made after going through the documents filed by the respondent before the High Court. In this context, it is also to be noted that the High Court has also referred to the contentions of the respondent, including the one that for purchasing land at Bhubaneswar, she had borrowed an amount of Rs.2.5 lakhs from her father. After such exercise, it was held by the High Court that there is no clinching material showing that the appellant abetted her husband or made any conspiracy or instigated him in the alleged acquisition of disproportionate assets. This observation itself would go against the very scope of Section 239, Cr. P.C. as at the stage of consideration of a petition for discharge what is to be considered whether there is a ‘prima facie’ case and certainly, the endeavour cannot be to find whether ‘clinching’ materials are there or not. In the common parlance the word ‘clinch’ means ‘point’ or circumstance that settles the issue.
There are no hesitation to hold that such meticulous consideration for presence or absence of clinching material is beyond the scope of power of the Court while considering the question of discharge under Section 239, Cr. P.C. as also while considering the question of quashing of charge framed by the Trial Court, while exercising the revisional jurisdiction.
The judgment under challenge in the case on hand cannot stand the scrutiny. The High Court has clearly erred in its approach and exercise of revisional jurisdiction in quashing the charge framed by the Trial Court upon finding a prima facie case, and also in discharging the respondent – Smt. Pratima Behera.
The impugned judgment dated 31.01.2017 in Criminal Revision No.381 of 2016 is set aside - appeal allowed.
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2024 (12) TMI 1185
Maintainability of petition - availability of efficacious alternative remedy - Freezing of petitioner's bank account - violation of principles of natural justice - HELD THAT:- The arguments about the orders suffering from “vice of want of jurisdiction” or the orders being “contrary to the decisions in MDS Switchgear Ltd [2008 (8) TMI 37 - SUPREME COURT] and Nestle India Ltd. [2004 (5) TMI 65 - SUPREME COURT]” can always be raised in an appeal. Based on such general and vague averments, the remedies provided under the statute cannot be so lightly bypassed.
In the case of Oberoi Constructions Ltd Vs. The Union of India [2024 (11) TMI 588 - BOMBAY HIGH COURT] this Court has considered several precedents about the exhaustion of alternate remedies. This Court has also taken note of the increased tendency to bypass the statutory remedies and insist upon instituting Petition under Articles 226 and 227 of the Constitution of India. Paragraph 65 quoted above does not even indicate any financial difficulties for payment of the pre-deposit amount - Therefore, freezing this bank account will not affect the Petitioner’s ability to institute an appeal by making a pre-deposit. By adopting the reasoning in the said decision, no case is made to interfere with the impugned order.
Upon an exhaustive analysis of precedents on the subject, including the precedent in Greatship (India) Limited [2022 (9) TMI 896 - SUPREME COURT] and others, the coordinate Bench declined to entertain the Writ Petition inter alia on the ground that statutory appellate remedies were available and factual inquiry was necessary to determine whether the jurisdictional facts were established, or not. The coordinate Bench noted that even the Supreme Court had disapproved the High Court’s entertaining Writ Petitions involving classification disputes or even the applicability of exemption notification when parties had statutory alternate remedies.
This Petition cannot be entertained, even though some artificial urgency sought to be created, and relegate the Petitioner to the alternate remedy of appeal, should the Petitioner choose to institute such appeal before the Appellate Authority - petition dismissed.
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2024 (12) TMI 1184
Legality and validity of the order dated passed by the respondent No. 2 in DRC-01 raising demand - HELD THAT:- From the averments made by the GST and Network, it is apparent that the petitioner was not required to pay the IGST on the goods cleared from (Domestic and Tariff Area). Supply from SEZ Unit to DTA is treated as import for DTA Unit and therefore the DTA unit is required to pay IGST and other applicable duties on filing of the Bill on Entry.
The petitioner was not required to pay to IGST on the goods supplied from SEZ unit to DTA. The petitioner has not claimed any refund for such IGST paid, which otherwise was payable by DTA Unit. Therefore, there is no liability of the petitioner to pay the IGST under the provisions of the Integrated Goods and Service Tax Act, 2017 read with GST Act. The respondent No. 2 has failed to consider the same and passed the impugned order merely on account of the difference between in form GSTR-1 and GSTR-3B ignoring the provisions of Section 74 which provides the mechanism of adjudication of show cause notice by taking into consideration the reply filed by the petitioner as well as the provisions of the Act.
On perusal of the affidavit-in-reply filed on behalf of the respondent No. 2, an attempt is made to justify the impugned order which lacks any reasoning. The deponent of the affidavit filed on behalf of the respondent No. 2, has tried to improve upon the impugned order by referring to Section 37 of the GST Act to contend that as per Section 37 of the GST Act furnishing the details of the output supply is required to be declared in GSTR-1 and as per Section 39 of the GST Act, the payment of tax declared in GSTR-1 is to be same as to be paid in Form GSTR-3B return and therefore if there is any difference, the same would amount to non payment of tax resulting into demand, interest and payment.
The impugned order dated 05.02.2022 passed by the respondent No. 2 is hereby quashed and set aside - Petition allowed.
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2024 (12) TMI 1183
Refund the IGST on account of the zero-rated supply made by the petitioner - it is submitted that the matter may be remanded back to the respondent-Authorities to recalculate the refund and process the refund application as claimed by the petitioner as per the Clarification made by the CBIC in Circular No. 197/09/2023-GST dated 17th July, 2023.
HELD THAT:- The matter is remanded back to the respondent-Authorities to reconsider the refund application made by the petitioner so as to grant the refund by applying the Circular No.197/09/2023-GST dated 17th July, 2023. Such exercise shall be completed within a period of twelve weeks from the date of receipt of the copy of this order after providing an opportunity of hearing to the petitioner.
Petition disposed off by way of remand.
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2024 (12) TMI 1182
Inclusion of reimbursable expenses incurred by the petitioner by providing taxable services under the provisions of the Finance Act, 1994 - HELD THAT:- The Hon'ble Supreme Court while upholding the decisions of the Delhi High Court in Intercontinental Consultants & Technocrats Pvt. Ltd. Vs. Union of India [2012 (12) TMI 150 - DELHI HIGH COURT] has ultimately held that 'only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. Though, it was not argued by the learned counsel for the Department that Section 67 is a declaratory provision, nor could it be argued so, as we find that this is a substantive change brought about with the amendment to Section 67 and, therefore, has to be prospective in nature.'
Both the learned counsel for the petitioner and the learned counsel for the respondent confirms that there are no other disputes in the impugned order. Since, the issue is now covered in favour of the petitioner for the period prior to 14.05.2015, the demand confirmed vide impugned order to that extent is liable to be quashed and is accordingly quashed.
Petition allowed.
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2024 (12) TMI 1181
Challenge to appellate orders passed against the rejection of refund applications filed by the petitioner - petitioner submits that the original order has been passed without considering the specific allegation in the show-cause notice - violation of principles of natural justice - HELD THAT:- There are no reason to invoke the extraordinary jurisdiction under Article 226 of the Constitution of India to deal with the matter in which there is a statutory appeal provided to the Tribunal.
Admittedly, a Tribunal has not been constituted till date and a notification has also been issued by the Central Government permitting the filing of the appeal after the Tribunal is constituted. Since, the impugned orders are with respect to refund, there is no demand and hence there is no requirement to pay 20% of the tax demand as has been found in SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others [2023 (3) TMI 1390 - PATNA HIGH COURT].
The petition is closed.
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2024 (12) TMI 1180
Prosecution Proceedings initiated u/s 276C - Bogus LTCG - guilty mind i.e., mens rea - willful evasion of tax on claims made under the head LTCG/Short Term Capital Loss - allegation of crime invoking Section 200 of the CrPC for offence punishable under Section 276C - As decided in [2024 (1) TMI 1007 - KARNATAKA HIGH COURT] mens rea is an element that is to be present in a proceeding u/s 271. The mere fact of not accurate tax, not exact tax or erroneous tax would not lead to the proceedings u/s 276 of the Act.
Court taking Cognisance ought to have referred to and recorded the reasons why the said Court believes that an offence is made out so as to take Cognisance more so on account of the fact that it is on taking Cognisance that the criminal law is set in motion insofar as accused is concerned and there may be several cases and instances where if the Court taking Cognisance were to apply its mind, the Complaint may not even be considered by the said Court taking Cognisance let alone taking Cognisance and issuance of Summons. Thus the order taking Cognisance is not in compliance with applicable law and therefore is set aside.
Proceedings pending before the Special Court (Economic Offences) Bengaluru in these cases stand quashed.
HELD THAT:- After hearing learned Additional Solicitor General, we are not satisfied that any case for interference is made out under Article 136 of the Constitution of India.
Special Leave Petitions are, accordingly, dismissed, leaving the question of law to be decided, if necessary in some other appropriate case.
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2024 (12) TMI 1179
Validity of orders passed by the Local committee on High Pitched Scrutiny Assessment - violation of principles of natural justice as an opportunity of personal hearing was not granted by the said Committee - HELD THAT:- Local Committee can administratively advice the Principal Commissioner of the Income Tax concerned to prevent any cohersive recovery in cases where it had identified such assessments to be high pitched. There has been a depature in placing the said Report before the Appellate Authority under the old instructions, where such Reports were to be placed before the Appellate Authority to curb the litigations.
The same has been left out under the amended instructions. The amended instructions stops with sharing the Report with the Appellate Authority namely the National Faceless Assessment Center. It should be noted that both the instructions in clear terms envisaged that the Local Committees should not be treated as alternative forum of disputes resolution/ appeallate proceedings.
A reading of the said instructions would clearly indicate that the constitution of Local Committees was to curb unnecessary assessment orders which are made high Pitched by the Assessing Officer/ Assessing Units.
Report of the Local Committee shall not be binding on the Appellate Authorities/ Revisional Authorities. It is also to be noted that it is on the discretion of the Principal Chief Commissioner of Income Tax to take any departmental action based on that Report. There is no instructions for giving an opportunity of hearing by the Local Committee. The Local Committee being neither a quasi judicial authority or a statutory authority is not bound to give an opportunity of hearing to the grieving tax payer. It is primarily an internal mechanism only to curb the high Pitched assessment without any reasons or in violation of law or principles of natural justice.
A learned Single Judge of this Court in [2019 (9) TMI 614 - MADRAS HIGH COURT] had categorically held that the mechanism provided in constitution of the Local Committee is not in lieu of appellate remedy and that the contentions and the rights of the assessees before the Appellate Authorities can very well be decided by the Appellate Authority not withstanding the fact that the Local Committee had decided otherwise. The learned Judge had also held that the rejection of the petitioner's complaint before the Local Committee will not prejudice the right of the assessee to persue his appellate remedy by raising all grounds available to him.
A Division Bench of the Punjab and Haryana High Court in the case of Liberty Shows Ltd., vs. Ld., Chairman Central Board of Direct Taxes [2024 (10) TMI 778 - PUNJAB AND HARYANA HIGH COURT] had held that there is no necessity for granting an opportunity of hearing to an assessee by the Local Committee as there is no provisions laid down in the SOP.
The Act itself envisages that an opportunity of hearing ought to have been given by the Assessing Authority before passing orders of assessment. Similarly, the judgment made in [2024 (9) TMI 1672 - MADRAS HIGH COURT] it could be seen that the learned Single Judge had not dealt with the submissions made by the petitioner as in that case, the petitioner himself had submitted that it could be suffice to issue necessary directions to the Appellate Authority to consider the petitioners appeal within a time bound manner.
Law envisaged by the learned Single Judge of this Court and the Division Bench of the Punjab and Haryana High Court, no merits in the contentions raised by the petitioner.
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2024 (12) TMI 1178
Reopening of assessment - reasons to believe - proceedings initiated against the company purchasing the shares which is the subsidiary of the petitioner - HELD THAT:- A reading of the reasons communicated u/s 143(2) makes it clear that there were sufficient reasons for reopening of the assessment under Section 148 read with Section 147 of the Income Tax Act, 1961 as it stood on 01.04.2021.
That apart, the petitioner has suffered Speaking Order. Therefore, there is no justification in challenging the Impugned Notice issued under Section 148 of the Income Tax Act, 1961 and the Impugned Communication/Impugned Scrutiny Notice giving reasons for reopening the assessment and the Impugned Show Cause Notice dated 10.01.2022.
Also petitioner has not cooperated with the respondents Department by furnishing the required informations. Therefore, on this count also there is no basis on which, the Impugned Notices/Communications can be quashed.
Department are empowered to pass the Assessment Orders based on best judgment method under Section 144 of the Income Tax Act, 1961 in absence of proper informations by the petitioner to the above communications calling upon the petitioner to furnish the required informations/documents.
Under these circumstances, these Writ Petitions are liable to be dismissed and are accordingly dismissed.
The respondents are directed to complete the assessment preferably, within a period of 3 months from the date of receipt of a copy of this order or such other extended period that may be required subject to the petitioner filing its reply objections, if any, to the Show Cause Notice.
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2024 (12) TMI 1177
Qualification as an ‘appellant’ u/s 2(1)(a) of the DTVSV Act - validity of a certificate issued under the Direct Tax Vivad Se Vishwas Act, 2020 - HELD THAT:- Rule 7 of the DTVSV Rules expressly provides that the order of the designated authority under sub-Section (2) of Section 5 with respect to the payment of amount made by the declarant as per the certificate granted under sub-section (1) of section 5, shall be in Form No. 5.
In terms of Section 5 of the DTVSV Act, the Designated Authority (respondent no. 1) issued a certificate in Form No. 3 dated 16.10.2020 determining the balance amount payable as Rs. 69,56,571/-. Thereafter, the Designated Authority issued a certificate in Form No. 5, in terms of Rule 7 of the Direct Tax Vivad Se Viswas Rules, 2020 (hereafter DTVSV Rules), under Section 5 (2) read with Section 6 of the DTVSV Act. The said certificate clearly recorded that a sum had been paid by the declarant towards full and final settlement of the ‘tax arrear’.
Once a declarant is issued a certificate (Form No. 5) in terms of Section 5 of the DTVSV Act, and the declarant deposits the determined amount, the Designated Authority is proscribed from initiating any action or proceedings in respect of ‘tax arrear’. The dispute stands settled.
In view of the above, all disputes regarding the tax arrear stood settled with the issuance of a certificate as contemplated under Section 5 of the DTVSV Act.
The petitioner is aggrieved by the issuance of the fresh Form No. 3 dated 29.01.2021, which is a modified version of the earlier Form No. 3 dated 16.10.2020. Thus, effectively the Designated Authority seeks to reopen a concluded settlement.
On a pointed query from this court as to under which provisions the said action has been taken, Mr. Rai fairly states that there is no provision under the DTVSV Act that empowers a Designated Authority to reopen a concluded settlement. As noted above, a plain reading of the provisions of the DTVSV Act indicates that once a final certificate is issued under Section 5 (1) of the Act, all disputes with regard to the ‘tax arrear’ stand concluded. It is apparent that the issuance of the impugned certificate is without authority of law.
The impugned certificate dated 29.01.2021 is set aside.
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2024 (12) TMI 1176
Deduction u/s 10A - loss on account of foreign exchange fluctuation while computing deductions - HELD THAT:- We find that the same has been decided against the assessee by order of the CIT (Appeals). That order has attained finality since the assessee, who is aggrieved, has not chosen to challenge the same.
Strangely, the Income-Tax Department has raised a ground in this regard, despite the issue having been decided adverse to the assessee by the first appellate authority.Tribunal has affirmed the conclusions of the Commissioner of Income-Tax (Appeals) on a mistaken premise that the appeal has been filed by the assessee.
Substantial question of law no.1 is misconceived as that issue does not arise from the order of the Income Tax Appellate Tribunal, and is hence returned unanswered.
Telecommunication expenditure should be excluded both from the export turnover and the total turnover for the purpose of computing deduction u/s 10A - HELD THAT:- Issue arising in substantial question no.2 is covered by a judgment of the Supreme Court in the case of Commissioner of Income-Tax, Central III v HCL Technologies Ltd [2018 (5) TMI 357 - SUPREME COURT] wherein held that expenses incurred in foreign exchange for providing the technical services outside shall be allowed to exclude from the total turnover.
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2024 (12) TMI 1175
Reopening of assessment u/s 147 - Reasons to believe - "tangible material" - HELD THAT:- On perusal of the reasons recorded, it is apparent that there is no failure on part of the petitioner to disclose fully and truly all the material facts for the assessment.
Considering the show-cause notice issued during the regular assessment and the replies filed by the petitioner as well as the details provided, it is apparent that the issues which are raised in the reasons recorded for re-opening of the assessment are duly covered in the details provided by the petitioner along with the Significant Accounting Policies referred to in the Audited Accounts.
Undisputed facts of all the details being provided during the course of the regular assessment and on perusal of the reasons recorded, we are of the opinion that the impugned notice was issued only on mere change of opinion which is not permissible as per the settled legal position as held in case of Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT] held after 1st April, 1989, AO has power to re-open, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief.
Our view gets support from the changes made to Section 147. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words "reason to believe" but also inserted the word "opinion" in Section 147. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the AO.
In view of the above conspectus of law, the impugned notice dated 31st March, 2021 is hereby quashed and set aside and accordingly, the petition succeeds.
The impugned notice is hereby quashed and set aside and accordingly, the petition succeeds.
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