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Showing 1 to 20 of 1499 Records
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2023 (3) TMI 1499 - CESTAT KOLKATA
Valuation - inclusion in the assessable value - third party inspection charges incurred at the instance of the buyers and subsequently recovered from the buyers - HELD THAT:- The Appellant’s case is that they have submitted the customer’s ledger in which the inspection charges are Sundry Debtors debited to the customer’s account. The reimbursed receipts do not form part of their income and thus this is not an additional consideration. This is also relevant to observe that RITES raised the bills to the Appellant charging Inspection charges as per agreement amongst RITES, the Appellant and the customer. This is variably from the records that the Inspection charges were paid to RITES by the Appellant on behalf of their customers and the same amount was reimbursed by the customers and there is no difference between the amount paid and the reimbursed receipts. Both the amounts are matching.
The impugned order is set aside and the Appeal filed by the Appellant is allowed.
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2023 (3) TMI 1498 - CESTAT KOLKATA
Undervaluation - demand of service tax - Inclusion of TDS in the value of service provided by foreign service providers - Applicability of reverse charge mechanism (RCM) for Service Tax - HELD THAT:- It is found that as per the invoice, the Appellant is paying Service Tax on the value of services provided by foreign service provider and as per the statutory provisions, the Appellant was required to deduct Income Tax at source. In that circumstances, the Income Tax component which is to be deducted at source, if refunded to the service provider, the same shall be refunded to the Appellant itself. In that circumstances, the value of service provided by the foreign service provider remains the same as what the tax deducted by the Appellant at source the same is borne to the Appellant.
When TDS has been borne by the Appellant and only the consideration for services as agreed upon by the parties has been paid to service provider, therefore, the amount of TDS cannot be included in the taxable value to determine the Service Tax liability. Therefore, as TDS liability has been borne by the Appellant and the value of service provided has already been paid to the service provider, the Appellant has correctly arrived at the taxable value of service received by them and paid the Service Tax thereon correctly under reverse charge mechanism.
There are no merits in the impugned orders, the same are set aside - the Appeals filed by the Appellant are allowed.
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2023 (3) TMI 1497 - KARNATAKA HIGH COURT
Monay Laundering - schedule offence - challenge to criminal proceedings - required sanction under Section 19 of the Prevention of Corruption Act was obtained or not.
The learned counsel for the respondent did not dispute the fact that the case against the accused No. 1/petitioner No. 2 herein, which was a schedule offence under the Prevention of Money Laundering Act, was quashed by this Court in [2023 (2) TMI 1309 - KARNATAKA HIGH COURT] and therefore, in view of the judgment of the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary, [2022 (7) TMI 1316 - SUPREME COURT], the proceedings under the Prevention of Money Laundering Act would not survive.
HELD THAT:- The prosecution of the petitioners/accused for the predicate offence under Section 3 punishable under Section 4 of the Prevention of Money Laundering Act, 2002 pending before the Principal City Civil and Sessions Judge, Bengaluru (CCH - 1) is quashed - Petition allowed.
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2023 (3) TMI 1496 - ITAT MUMBAI
Jurisdiction of the Addl. CIT/JCIT for conducting the assessment proceedings and passing the draft / final assessment order in the absence of an order issued in writing u/s. 120(4)(b) - Scope of definition of the expression “Assessing Officer” as defined in Section 2(7A) - HELD THAT:- For Additional CIT or JCIT to exercise or perform all or in all the powers and functions conferred on are assigned to the Assessing Officer, an authorization u/s. 120(4)(b) of the Act is required mandatorily.
CBDT i.e. the Board has the power to empower the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to authorise the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director to perform the functions of the Assessing Officer by issuing orders in writing separately u/s. 120(4)(b) of the Act. This independent order u/s. 120(4)(b) is mandated in statute itself which alone would confer jurisdiction of Addl. CIT or JCIT to perform the functions of the Assessing Officer under the Act. In the absence of any independent order passed u/s. 120(4)(b) of the Act, the Addl. CIT or JCIT could not be considered as AO as defined u/s. 2(7A) of the Act at all. In addition to this, there should also be a separate transfer order transferring jurisdiction from ACIT to Addl. CIT / JCIT in terms of Section 127 of the Act. This can be either by way of a general order or by way of a special order in writing.
In the instant case, the assessee had sought for the copy of notification , if any, issued u/s 120(4)(b) of the Act and order of transfer of jurisdiction u/s 127 of the Act to the ld. AO vide its letters. The assessee has not been given any replies to these letters from the side of the Assessing Officer. In view of these, the reliance placed by the ld. DR before us on the letter dated 21/03/2023 of the Assessing Officer seeking more time to trace the records are not entertained, as sufficient opportunities have already been granted to the revenue to produce the relevant documents.
Hence it could be reasonably presumed that the concerned documents containing notification u/s 120(4)(b) of the Act and order of transfer of jurisdiction u/s 127 of the Act are not available in the records of the revenue.
Thus we hold that in the absence of separate order passed u/s. 120(4)(b) and order u/s. 127 of the Act, the Additional CIT / JCIT had no power to perform the functions of an Assessing Officer u/s. 2(7A) of the Act for the year under consideration. Accordingly, the assessment order framed by Additional CIT is hereby quashed. Assessee appeal allowed.
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2023 (3) TMI 1495 - ITAT RAIPUR
Delay of 935 days filling cross objections - assessee company explained that the delay was due to the pendency of a rectification application before the AO - assessee contended that after rectification, the tax liability would be less than Rs. 50 lakhs, which was the threshold for departmental appeals before the ITAT - Validity of assessment proceedings questioned as notice u/s.143(2) was not issued by the Jurisdictional AO within the prescribed time limit - HELD THAT:- As is discernible from the record, it is the claim of the assessee that it had, after framing of the assessment by the A.O vide his order passed u/s.143(3) dated 30.06.2016 filed with him a rectification application dated 28.06.2019. It is stated by the assessee that during pendency of its rectification application before the A.O its appeal was disposed off by the CIT(Appeals). It is further stated by the assessee that its rectification application had not been disposed off by the A.O till date. It is stated by the assessee that after the rectification is carried out the tax effect involved in the present appeal of the revenue would be less than Rs. 50 lac i.e. the threshold limit contemplated in CBDT Circular No.03/2018 dated 11.07.2018 enabling filing of appeals by the department with the Tribunal.
As the present cross-objection of the assessee company is not supported by any application seeking condonation of delay involved in filing of the same, therefore, the same does not merit admission on the said count itself. We, thus, in terms of our aforesaid observations dismiss the cross-objection filed by the assessee-respondent.In the result, cross-objection filed by the assessee is dismissed in terms of our aforesaid observations.
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2023 (3) TMI 1494 - DELHI HIGH COURT
Lack of territorial jurisdiction to entertain the petition - an overriding effect of MSMED Act has over Arbitration and Conciliation Act, 1996 - whether the learned District Judge was right in rejecting the petition filed by the appellant on the ground that the learned District Judge does not have the territorial jurisdiction to entertain the petition? - HELD THAT:- It is a settled law that a place which is provided under the exclusive jurisdiction clause agreed between the parties determines the territorial jurisdiction of the Court to entertain a petition under Section 34 of the Act of 1996. Though in the present case, there was no arbitration clause, but still the parties have conferred exclusive jurisdiction to the Courts in Delhi. The same shall mean that any challenge to the arbitration award in terms of Section 19 of the MSMED Act would necessarily lie before the Court in Delhi. So, it follows that a challenge to the award passed under the MSMED Act shall necessarily be in terms of Section 34 of the Act of 1996 and surely the principles as governed under the Act of 1996 shall apply to such challenge.
It may be stated here that a learned Single Judge of this Court in the case of AHLUWALIA CONTRACTS (INDIA) LTD. VERSUS OZONE RESEARCH & APPLICATIONS (I) PVT. LTD. AND ORS. [2023 (1) TMI 1377 - DELHI HIGH COURT], is of the view that the seat of arbitration shall be the place where Facilitation Council is situated (Nagpur in that case). Hence, a petition filed before this Court under Section 34 of the Act of 1996, shall not be maintainable.
The impugned order passed by the learned District Judge rejecting the petition filed by the appellant herein under Section 19 of the MSMED Act read with Section 34 of the Act of 1996, on the ground that the Court has no territorial jurisdiction is contrary to the settled position of law and the same is liable to be set aside.
The objections filed by the appellant, are restored on the file of the learned District Judge (Commercial Court), Shahdara, Delhi, for adjudication of the same on merits in accordance with law.
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2023 (3) TMI 1493 - SC ORDER
Legality of bail order - Section 45 of the Prevention of Money Laundering Act - it is submitted that the High Court wrongly released both the respondents on bail without having regard to the gravity of the offence and without considering the restrictive provisions of Section 45 of the Prevention of Money Laundering Act - HELD THAT:- So far as the position of trial is concerned, the same is at the stage of framing of charges and investigation is complete.
As both the respondents in these petitions have been enlarged on bail four years back and further that they have already suffered about three years imprisonment in the predicate offences, we do not think any benefit would accrue to the investigating agency by taking them again in custody. In the event the prosecution finds that these two respondents are not cooperating in the trial, or there are any subsequent developments requiring their detention, the Enforcement Directorate shall be at liberty to apply for cancellation of bail before this Court.
Petition disposed off.
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2023 (3) TMI 1492 - ITAT DELHI
Validity of order passed u/s 144C beyond period of limitation - HELD THAT:- No strength of the arguments of the Assessing Officer and the ratio given by the revenue authorities is against the law laid down. The final order passed by the Assessing Officer is beyond the period of limitation as provided u/s 144C of the Income Tax Act, 1961 and hence, the same is liable to be declared as null and void.
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2023 (3) TMI 1491 - ALLAHABAD HIGH COURT
Permission to petitioners to appear in the IInd and IIIrd Semester Examinations of B.T.C. Training Course-2012 and to continue their studies for the said course - HELD THAT:- After the judgement of Meghalaya High Court in CMJ FOUNDATION AND ORS. VS. STATE OF MEGHALAYA AND ORS. [2015 (7) TMI 1437 - MEGHALAYA HIGH COURT] as well as amendment in Section 48 of Amendment Act 2019, the CMJ University informed the petitioners, the petitioner no. 2 under the RTI Act, 2005 to the effect that the students named Desh Deepak Registration No. 10111010119125 and Sunil Kumar, Registration No. 10111010119126 of Bachelor of Arts Degree has completed their verification and therefore, the verification of both the students are complete according to the records of the University and the Degree of both the aforesaid students are valid.
The Degrees obtained by the petitioners from the CMJ University, Meghalaya in the year -2012 are treated to be valid one - the writ petition is allowed with the direction to the State Government of U.P. to continue the petitioners with the B.T.C. Training Course- 2012, if the same is surviving.
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2023 (3) TMI 1490 - SUPREME COURT
Maintainability of Writ Petitions instituted by the Appellants before the Orissa High Court - Constitutional validity of abolition of the OAT - Article 323-A of the Constitution makes it mandatory for the Union Government to establish SATs or not - invocation of Section 21 of the General Clauses Act to rescind the notification establishing the OAT, thereby abolishing the OAT - abolition of the OAT, violative of Article 14 of the Constitution and violative of the fundamental right of access to justice - violation of principles of natural justice by failing to provide the OAT Bar Association and the litigants before the OAT with an opportunity to be heard before arriving at a decision to abolish the OAT - validity of notification dated 2 August 2019 - transfer of cases from the OAT to the Orissa High Court has the effect of enlarging the jurisdiction of the latter or not - State Government took advantage of its own wrong by ceasing to fill the vacancies in the OAT or not - failure of the Union Government to conduct a judicial impact assessment before abolishing the OAT - Union Government became functus officio after establishing the OAT.
An overview of the proceedings arising from the abolition of the Madhya Pradesh Administrative Tribunal (MPAT) and the Tamil Nadu Administrative Tribunal (TNAT) - HELD THAT:- The MPAT Abolition Case [2004 (9) TMI 665 - SUPREME COURT] concerned the powers of the State of Madhya Pradesh under the Madhya Pradesh Reorganization Act 2000 as well as the constitutional validity of certain provisions of that enactment. This Court was not called upon to adjudicate whether Section 21 of the General Clauses Act would be applicable to Section 4(2) of the Administrative Tribunals Act. A decision on the abolition of an SAT by the exercise of special powers under a legislation enacted for the reorganization of a state does not have any bearing on whether an SAT may be abolished in exercise of powers under the Administrative Tribunals Act. The MPAT Abolition Case is therefore not germane to the issue of whether Section 21 of the General Clauses Act would be applicable to Section 4(2) of the Administrative Tribunals Act. However, the issue whether the decision to abolish the MPAT was arbitrary, unreasonable and therefore violative of Article 14 of the Constitution was decided in that case - The proceedings arising from the TNAT Abolition Case (supra) in appeal before this Court, too, do not have a bearing on the approach to be adopted while deciding the merits of the issues because the question of law was expressly kept open.
The Writ Petitions instituted before the Orissa High Court were maintainable - HELD THAT:- In State of Orissa v. Ram Chandra Dev [1963 (11) TMI 82 - SUPREME COURT]], a Constitution Bench of this Court held that the existence of a right is the foundation of a petition Under Article 226 - In this case, the Odisha Retired Police Officers' Welfare Association alleged that its right to speedy redressal of grievances (a facet of the fundamental right of access to justice) was violated. The OAT Bar Association joined the Odisha Retired Police Officers' Welfare Association in alleging that the state's action of abolishing the OAT violated its right Under Article 14 of the Constitution. Having alleged that these rights were violated by the abolition of the OAT, they were entitled to invoke the High Court's jurisdiction Under Article 226 of the Constitution. Whether there is substance in the grievance is a separate matter which has to be analysed.
Article 323-A does not preclude the Union Government from abolishing SATs - HELD THAT:- Article 323-A does not specify the conditions in which the power to enact laws providing for the adjudication of certain disputes by administrative tribunals must be exercised. It therefore cannot be said that Parliament was obligated to exercise this power upon the fulfilment of certain conditions - The consequences of reading Article 323-A as mandating the creation of administrative tribunals, would be to foreclose the possibility of the adoption of an alternate course of action to achieve the desired objective of reducing arrears and ensuring speedy justice. This, too, indicates that it could not have been the intention of Parliament to mandate the establishment of administrative tribunals as the only remedy to mounting arrears or as the only manner in which speedy justice could be secured.
The word "may" in Article 323-A of the Constitution is not imparted with the character of the word "shall." Article 323-A is a directory, enabling provision which confers the Union Government with the discretion to establish an administrative tribunal. The corollary of this is that Article 323-A does not act as a bar to the Union Government abolishing an administrative tribunal once it is created.
Applicability of Section 21 of the General Clauses Act - HELD THAT:- This Court answered in the negative because Section 3 of the Commissions of Inquiry Act 1952 provided for the power to fill any vacancies whereas Section 7 provided for the only situation in which a Commission which was already constituted would cease to exist. This Court observed that the Commissions of Inquiry Act 1952 did not provide for the power to reconstitute a Commission or replace its members. The scheme of the enactment and its context indicated that Section 21 of the General Clauses Act could not be invoked. Further, the object of the Commissions of Inquiry Act 1952 would be frustrated if the appropriate government were permitted to reconstitute a Commission midway through the task that it was charged with completing because it made it possible for an independent agency to exist, free from governmental control. In the present case, there is no such impediment to the application of Section 21 of the General Clauses Act. The object of the Administrative Tribunals Act would not stand frustrated if an SAT is created and then abolished - The natural consequence of the Union Government rescinding the notification establishing the OAT would be to restore the status quo ante. Nothing in either Article 323-A of the Constitution or the Administrative Tribunals Act prevents such a revival. Further, the absence of a provision in the Constitution which explicitly permits a revival does not act as a barrier to such a revival. For the reasons discussed above, the Union Government's reliance on Section 21 of the General Clauses Act is in accordance with law.
The notification dated 2 August 2019 is not violative of Article 14 of the Constitution - HELD THAT:- The absence of a right to be heard before the formulation or implementation of a policy does not mean that affected parties are precluded from challenging the policy in a court of law. What it means is that a policy decision cannot be struck down on the ground that it was arrived at without offering the members of the public at large (or some Section of it) an opportunity to be heard. The challenge to a policy may be sustainable if it is found to vitiate constitutional rights or is otherwise in breach of a mandate of law - the decision to abolish the OAT cannot be assailed on the ground that there was a violation of the principles of natural justice. Article 14 of the Constitution has not been violated.
The Union Government did not become functus officio after establishing the OAT - HELD THAT:- The doctrine of functus officio gives effect to the principle of finality. Once a judge or a quasi-judicial authority has rendered a decision, it is not open to her to revisit the decision and amend, correct, clarify, or reverse it (except in the exercise of the power of review, conferred by law). Once a judicial or quasi-judicial decision attains finality, it is subject to change only in proceedings before the appellate court - The doctrine of functus officio exists to provide a clear point where the adjudicative process ends and to bring quietus to the dispute. Without it, decision-making bodies such as courts could endlessly revisit their decisions. With a definitive endpoint to a case before a court or quasi-judicial authority, parties are free to seek judicial review or to prefer an appeal. Alternatively, their rights are determined with finality. Similar considerations do not apply to decisions by the state which are based entirely on policy or expediency.
In the present case, the State and Union Governments' authority has not been exhausted after the establishment of an SAT. Similarly, the State and Union Governments cannot be said to have fulfilled the purpose of their creation and to be of no further virtue or effect once they have established an SAT. The state may revisit its policy decisions in accordance with law. For these reasons, the Union Government was not rendered functus officio after establishing the OAT.
The notification dated 2 August 2019 is valid despite not being expressed in the name of the President of India - HELD THAT:- In the present case, the notification dated 2 August 2019 was not issued in the name of the President. However, this does not render the notification invalid. The effect of not complying with Article 77 is that the Union Government cannot claim the benefit of the irrebuttable presumption that the notification dated 2 August 2019 was issued by the President. Hence, the Appellants' argument that the notification dated 2 August 2019 is invalid and unconstitutional is specious - In the present case, the notification dated 2 August 2019 was issued in exercise of the statutory powers under the Administrative Tribunals Act - the notification dated 2 August 2019 is valid despite not being expressed in the name of the President of India.
The abolition of the OAT is not violative of the fundamental right of access to justice - HELD THAT:- The fundamental right of access to justice is no doubt a crucial and indispensable right under the Constitution of India. However, it cannot be interpreted to mean that every village, town, or city must house every forum of adjudication created by statute or the Constitution. It is an undeniable fact that some courts and forums will be located in some towns and cities and not others. Some or the other litigants will be required to travel some distance to access a particular forum or court - the Orissa High Court has established benches which will operate virtually in multiple cities and towns across the state. This negates the Appellants' argument that the Orissa High Court is less accessible than the OAT. In fact, the number of virtual benches of the High Court is greater than the number of benches of the OAT. Litigants from across the state can access the High Court with greater ease than they could access the OAT - Litigants may therefore approach the Orissa High Court for the resolution of disputes. The abolition of the OAT does not leave litigants without a remedy or without a forum to adjudicate the dispute in question. It is therefore not violative of the fundamental right of access to justice.
The State Government did not take advantage of its own wrong - HELD THAT:- The State Government discontinued appointments to the OAT as a result of its decision to abolish the OAT and not vice versa. The Appellants' averment confuses the sequence of events on which their argument is based. The State Government based its decision on an evaluation of the OAT's functioning in the year 2014, which was prior to its decision to abolish the OAT. Hence, there is no "wrong" which the State Government took advantage of. Similarly, we do not agree with the argument of the Appellants that the Union of India had systematically made the OAT non-functional - The lis before the Orissa High Court was limited to the validity of the decision to abolish the OAT.
The failure of the Union Government to conduct a judicial impact assessment before abolishing the OAT does not vitiate its decision to abolish the OAT - HELD THAT:- An assessment such as the one directed to be conducted would only shed light on the impediments faced in the delivery of justice. The lack of an assessment precludes any well-informed, intelligent action concerning tribunals in the country (as a whole). This, in turn, has cascading effects for the citizenry, which is deprived of a well-oiled machinery by which it can access justice. We therefore reiterate the directions of this Court in Rojer Mathew [2019 (11) TMI 716 - SUPREME COURT] and direct the Ministry of Law and Justice to conduct a judicial impact assessment at the earliest.
Thus, the abolition of the OAT was constitutionally valid - The challenge to the constitutional validity of the impugned notification dated 2 August 2019 by which the OAT was abolished is rejected. The judgment of the High Court shall stand affirmed.
Appeal dismissed.
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2023 (3) TMI 1489 - CALCUTTA HIGH COURT
Fair Rent Determination - building has been let out to the Union of India for use by the Income Tax Department - Chief Commissioner, Income Tax fixed the fair rent in terms of the CPWD recommendation - as submitted that since the CPWD rates were being followed all along and even the fair rent was ascertained on the basis of such rates, there was no reason for the respondent-Authorities to withhold the rent to the petitioners in terms of the CPWD rates, as they came out from time to time.
HELD THAT:- Although the respondents have argued that the CPWD rates, as per the Manual on Infrastructure of CBDT, are merely advisory, the Chief Commissioner of Income Tax, while fixing the fair rent for the premises lastly, had himself relied on the CPWD rates. As such, there is no plausible reason to deviate from such rent structure subsequently.
The respondents have all along acted on the basis of the CPWD rates for assessing the rent for the premises-in-question. Since the Circular dated January 30, 1987 also indicates that the rent has to be revised in respect of buildings hired by the Income Tax Department as per the CPWD Code, the respondent-Authorities cannot deviate from such norms now, more so in the absence of any alternative yardstick.
The petitioners, in their supplementary affidavit, have clearly enumerated the arrears of rent as per the CPWD rates.
Admittedly, the respondent no. 1 vacated the rented premises “Parmar Building” and gave possession of the same to the petitioners on June 30, 2021. As such, the rent due to the petitioners has to be cleared by the respondents in favour of the petitioners up to the said date.
Such date has been disclosed by the petitioners in their supplementary affidavit filed in connection with the writ petition. The respondents’ opposition thereto does not, in specific terms, deny either the date of handing over possession by the respondent-Authorities or the calculations made by the petitioners in the said supplementary affidavit.
Inasmuch as the respondents’ claim of Municipal Tax and maintenance and repair charges due from the landlords/petitioners is concerned, the document on record clearly indicate that the fair rent adjudicated by the Chief Commissioner, Income Tax indicated that Municipal Taxes and maintenance and repair charges were to be borne by the petitioners.
Although learned counsel for the respondents has vociferously argued that such amounts were not paid by the petitioner, neither has it been averred by the respondents as to whether they paid such sums and, if so, what was the quantum paid by them, nor has any such claim been made by the petitioners before any forum till date. Moreover, the said question has to be adjudicated by taking detailed evidence, which is beyond the scope of the writ court.
Whether the order of the Chief Commissioner, Income Tax would prevail in the teeth of the specific provisions laid down in Section 151 of the 1990 Act, which applies to the present case and provides for apportionment of property tax by the person primarily liable to pay, by recovery of the same from the occupiers of the premises - There can neither by any agreement against the statute, nor can the assessment of fair rent by the Chief Commissioner, Income Tax prevail over the provisions of law. Since the 1990 Act prevails in respect of the building-in-question in view of it being situated within the territorial jurisdiction of Asansol, such question is also required to be decided prior to observing that any amount, if at all, is due by way of Municipal Taxes from the petitioners to the respondents.
Inasmuch as the maintenance and repair charges are concerned, the respondents have produced precious nothing to substantiate their claim of having borne the expenses in that regard. Unless specific pleading is made and proof is furnished in that regard, in any event, the respondents are not entitled to get any such amount from the petitioners.
Question of adjustment of such dues from the amount payable by way of rent to the petitioners - such argument has to negated at the outset, also on another score. It is well-settled that unless there is a specific agreement between the lessor and lessee and/or landlord and tenant to the effect that repair and maintenance charges shall be adjusted from the rent, such adjustment cannot be claimed as a matter of right by the respondents/lessees.
Since the possession was handed over as long back as on June 30, 2021, the respondents are undoubtedly at liberty to institute a regular civil suit to make such money claim before a competent court of law.
However, in view of the above discussions, there is no scope of this Court adjusting such amount of Municipal Taxes and alleged repair and maintenance charges within the ambit of the present writ petition.
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2023 (3) TMI 1488 - DELHI HIGH COURT
Notices issued u/s 153C - Reliance on incriminating material found in the search and survey action carried against entities and private individuals - petitioner’s objections are pending consideration with respondent no. 1 - as argued satisfaction note was furnished after the writ petitions were filed, and, therefore, it does not form a part of the record presently made available - HELD THAT:- The concerned officer of the respondents/revenue will dispose of the objections dated 24.03.2023 submitted by the petitioner. The concerned officer will also grant a hearing to the petitioner and/or to his authorized representative and shall issue a notice, in this behalf, which will set forth the date and time of the hearing.
Likewise, insofar as the satisfaction note concerning AY 2020-21 is concerned, the petitioner will file his objections within two (2) weeks commencing from today.
The concerned officer will, thereafter, fix a date and time for according hearing vis-à-vis the said satisfaction note. Needless to state, with respect to the objections dated 24.03.2023 and the satisfaction note concerning AY 2020-21, the concerned officer will pass a speaking order; copies of which will be furnished to the petitioner.
As before the concerned officer proceeds further in the matter, he will furnish all the material, if not already furnished, to the petitioner. It is made clear that that no precipitate action will be taken against the petitioner till six (6) weeks from the date of the passing of the order have elapsed.
In case an order is passed which is adverse to the interest of the petitioner, the petitioner will have the liberty to take recourse to an appropriate remedy, as per law. Mr Tankha, on instructions, says that no objection will be taken by the petitioner, with regard to the fact the limitation qua the reassessment proceedings initiated pursuant to the impugned Section 153C notices expired on 21/22.04.2023.
In case proceedings against the petitioner are not dropped, the respondents/revenue will have liberty to pass an assessment order within eight (8) weeks, after the period of six (6) weeks expires from the date of disposal of objections preferred by the petitioner.
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2023 (3) TMI 1487 - ITAT BANGALORE
TP Adjustment - comparable selection - as submitted TPO in selecting comparables applied filter of companies with turnover of more that one Crore however failed to apply the upper turnover limit - HELD THAT:- High turnover is a ground for excluding companies as not comparable with a company that has low turnover - 10 companies are directed to be excluded for failing turnover filter.
Great software Laboratory Pvt. Ltd. the services rendered by the assessee under a contract with its AE cannot be compared with a company that renders various services under SWD segment. We do not find any reason to include this comparable in the final list.
Elveego Circuits Pvt. Ltd. company is in the business of Chip and semiconductor design services where as the assessee before us is into basic SWD services of coding an documentation, Testing and quality assurance, software patches and maintenance. There is no similarity between the functions performed by the assessee vis-à-vis that of this company. We therefore at the threshold reject this company being functionally not similar with that of the assessee. See Sprinklr India Pvt. Ltd [2023 (1) TMI 1356 - ITAT BANGALORE].
Blackpepper Technologies Pvt. Ltd. - On perusal of the P&L account of the company, we notice that for the year ended 31.3.2007, the company has generated revenue only from sale of services and no revenue is generated from sale of products. We therefore tend to agree with the above findings of the DRP and accordingly we see no reason to interfere with the decision of the DRP - we uphold the inclusion of this company.
Aptus Software Labs Pvt. Ltd. company is deriving revenue from both domestic as well as foreign company. The notes to the account being note 24 reveals the revenue is recognised by this comparable from service transactions. The NIC code being 6201 as appearing at page 3383 of paper book reveals the description to be information technology services as against computer programming, consultancy and related activities as submitted by the assessee in the synopsis. We therefore do not find any reason to exclude this company from the final list. We direct the Ld.AO/TPO to retain this company in the list.
Acewin Agritech Ltd. company has invested in enlarging its business development team and also has the product development vertical the income recognition is only from the sale of services being export and therefore this company does not have a segmental details of the variety of services rendered by it. Moreover, the company is a leading software development and information technology outsourcing company and therefore as the entire revenue is categorised under one single segment, it is not comparable with the captive service provider like that of assessee before us that renders its services on a cost plus model with its AE. We accordingly reject this comparable and direct the Ld.AO/TPO to exclude from the final list.
Infobeans Technologies Ltd. company is functionally not comparable and no segmental details are available. Therefore, the coordinate bench did not consider this company as comparable in assessee’s own case for AYs 2014-15 [2021 (1) TMI 25 - ITAT HYDERABAD] & 2015-16 [2021 (4) TMI 1290 - ITAT HYDERABAD].
Threesixty Logica Testing Services Pvt. Ltd. company derives 100% income from writing, modifying, testing of computer program to meet the needs of a particular client excluding webgage and designing. In the annual report, the revenue recognition by this company is stated to be primarily from software testing, QA and related services which is also supported from the notes to account being note 1 wherein the company overview also states that it is primarily engaged in providing information technology services being software testing and QA services and it also stated in the segmental report and operating segmental details that there are no other reportable segments. Thus we see merit in the arguments of the Ld.AR that this company is not comparable functionally since the assessee is a contract service provider rendering limited services to its AE alone.
Kcube Consultancy Services Private Limited and Jindal Intellicom Limited rejected for the reason that they did not feature in the search matrix of the TPO - As submitted that the companies cannot be rejected solely on the ground that the same were not featuring in the search matrix of the TPO. It is submitted that above companies are functionally comparable to the assessee and passes all filter applied by the assessee. Reliance in this regard is placed on the decision of Prism Networks Private Limited [2022 (2) TMI 1296 - ITAT BANGALORE] - Thus we remand this comparable to the Ld.TPO to consider it based on FAR analysis in accordance with law.
Isummation Technologies Private Limited, Virinchi Limited, Evoke Technologies Private Limited,CG-Vak, Sagarsoft Limited Software & Exports Ltd. and Maveric Systems Limited - We note that all the above comparables requires to be considered afresh by the Ld.AO/TPO in the light of the respective annual reports. Needless to say that the FAR analysis has to be verified with that of the assessee in order to come to a conclusion of the same being functionally similar with that of assessee. Accordingly we remand the above comparables sought for inclusion by the assessee to the Ld.AO/TPO to carry out necessary verification.
Computing interest on outstanding receivables - AR submitted that the Ld.TPO proposed transfer pricing adjustment in respect of outstanding receivables in respect of trade creditors being the AEs by using SBI rate and CUP as the most appropriate method - HELD THAT:- Special Bench of this Tribunal in case Instrumentation Corpn. Ltd. [2016 (7) TMI 760 - ITAT KOLKATA] held that outstanding sum of invoices is akin to loan advanced by assessee to foreign AE., hence it is an international transaction as per explanation to section 92 B of the Act. Alternatively, it has been argued that working capital adjustment subsumes sundry creditors. In such situation computing interest on outstanding receivables and lones and advances to international transaction would amount to double taxation.
In view of the above, we deem it appropriate to set aside the impugned order on this issue and remit the matter to the file of the Ld.AO/TPO for deciding it in conformity with the above referred judgment. We also direct the Ld.TPO that in the event the WCA subsumes the outstanding receivables, no separate characterisation is to be made. However for those receivables that fall out of the WCA pertaining to year under consideration, then, the rate of interest to be charged must be LIBOR + 300 basis points which is in accordance with the principles laid down bin case of CIT vs. Cotton Naturals (I) Pvt. Ltd [2015 (3) TMI 1031 - DELHI HIGH COURT].
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2023 (3) TMI 1486 - SUPREME COURT
True effect of Article 324 and, in particular, Article 324(2) of the Constitution - requirement of having a full-proof and better system of appointment of members of the Election Commission - challenge to policy's implementation by the Union of India - violations of fundamental rights guaranteed by the Constitution of India - balance between environmental conservation and individual liberties.
HELD THAT:- The significant legal precedents regarding the scope of governmental authority in environmental matters and the protection of individual rights within the framework of environmental regulation are established.
Until the Parliament makes a law in consonance with Article 324(2) of the Constitution, the following guidelines shall be in effect:
(1) It is declared that the appointment of the Chief Election Commissioner and the Election Commissioners shall be made on the recommendations made by a three-member Committee comprising of the Prime Minister, Leader of the Opposition of the Lok Sabha and in case no Leader of Opposition is available, the Leader of the largest opposition party in the Lok Sabha in terms of numerical strength and the Chief Justice of India.
(2) It is desirable that the grounds of removal of the Election Commissioners shall be the same as that of the Chief Election Commissioner that is on the like grounds as a Judge of the Supreme Court subject to the "recommendation of the Chief Election Commissioner" as provided under the second proviso to Article 324(5) of the Constitution of India.
(3) The conditions of service of the Election Commissioners shall not be varied to his disadvantage after appointment.
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2023 (3) TMI 1485 - ITAT MUMBAI
Taxability of income in India - Services under FIS or FTS - services provided by the group entities or holding company to its subsidiaries as administrative support services - HELD THAT:- The assessee provides the administrative and day to day management services to the JIPL, this fact is confirmed by the observation and relevant material placed before us that the Indian entity JIPL does not have any support team and administrative set up to carry out the business independently. All the support services are provided by the intra-group entities and particularly, the administrative and day to day management services are provided by the assessee. The Ld.CIT(A) has confused with the two schedules viz., Schedule A and Schedule B and came to wrong conclusion by observing the bill copies submitted before him for reimbursement of certain charges for which the assessee has outsourced certain services for the whole group and whatever the services are utilized by the assesse are alone charged to the JIPL.
Therefore, in our considered view, the services provided by the assessee in order to support and provide the administrative and day to day management services to the JIPL are in the nature of group support services. These services are not to fall under the category of FIS or FTS.
Thus services provided by the group entities or holding company to its subsidiaries as support services to run their business effectively will not be considered as FTS or FIS under the treaty and these services does not amount to make available technical or skill or expertise while providing these services. Decided in favour of assessee.
Reimbursement of expenses - AO noticed third party invoices which are for the services rendered to JIPL and the assessee has reimbursed the same without their being any mark up - These expenses are clearly certain services required by the JIPL and we have already indicated in the previous paragraph that the JIPL does have any administrative office, all the necessity day to day managements are controlled thru the Holding Company. Accordingly, the assessee arranged the various services and all these services are utilized by JIPL and these expenses were reimbursed by JIPL to the assessee and also it is brought to our notice that these are reimbursed by JIPL without any mark up, it is settled position that reimbursement of expenses at cost is not taxable as fees for technical services since there is no element of income attached to the transaction.
Further the services provided by the third party through the holding company do not allow the make available any technical knowledge, skill, know how or processes to the JIPL or to the assessee within the meaning of Article 12 of Treaty between India – US. Therefore, even in this count, the reimbursement of expenses outside the tax net in the source country. Accordingly, the grounds raised by the assessee are allowed.
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2023 (3) TMI 1484 - ITAT CUTTACK
Estimation of income - Unapproved purchases and sales - determining the profit on the alleged unproved purchases at 10% and the unproved sales at 5% - reliance on incriminating materials found in the course of search - HELD THAT:- In the present case, as it is noticed that there is no evidence to prove the alleged unproved purchases or unproved sales and as there is no evidence in any manner found in the course of search or post search enquiry or in the course of assessment proceedings to show that the sellers and buyers were bogus, no addition on account of said unproved purchases or unproved sales can be made in the hands of the assessee. This view also supports from the fact that in the statement recorded, which has been extracted above, various registers and facts have been brought to question such entries in the registers and such invoices have not been shown to be not recorded in the regular books of account of the assessee and there is neither any allegation that the books of account were produced subsequent to search whereas it is an admitted fact that the regular books of account were found on tally in the course of search.
Estimating 10% of the alleged unproved purchase and 5% of the alleged unproved sales - As we have categorically held that the addition per se of alleged unproved purchases and unproved sales cannot be made in the hands of the assessee, the question of estimation of the profit on the same no more survive. Even otherwise, the ld CIT(A) in his wisdom having rejected the books of account, could have at best estimated the income of the assessee for the whole year, he could not estimate the profit merely on the alleged undisclosed sales or unproved purchases. In these circumstances, this issue is decided in favour of the assessee and the addition as confirmed by the CIT(A) in respect of 10% profit estimated on the "unproved purchases" and 5% profit on the "unproved sales" stands deleted.
Cash creditors - As in respect of appeal in the case of Bajarangbali Steel Industries Ltd. as it is noticed that the AO has not given the assessee the copy of the statement recorded in the course of survey action u/s. 133A of Avighna Vyappar Pvt Ltd. the issue in that appeal is restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to cross examine the said Shri Dilip Das.
Coming to the arguments of CIT (OSD) in respect of Bajarangabali Steel Industries Ltd.,, wherein, the statement of Satyendra Kumar Thakur has been recorded - Admittedly, Shri Satyendra Kumar Thakur has categorically admitted to the transaction. AO has stated that on the basis of field enquiry, he has treated the transaction as bogus. However, on perusal of paper book shows the statement of profit and loss account of M/s. Arnav Financial Services Private Limited for the year ended 31.3.2020, wherein, the interest income itself has been shown at Rs. 1,10,47,708. The TDS itself is of Rs. 10,97,278 and refund is Rs. 9,40,330/-. In respect of Vaikunth Motor Finance Ltd., Pvt Ltd., for the year ended on 31.3.2020, the interest income has been shown at Rs. 1,39,15,130/-, refund has been claimed, wherein, TDS is nearly Rs. 13,51,487/-. Thus, clearly, in respect of loan creditors of Arnav Financial Services Private Limited and Vaikunth Motor Finance Ltd., Pvt Ltd.,, evidences substantially proves in favour of the assessee that these are companies with substantial holdings, financial capabilities and consequently, creditworthiness, genuineness and identity stands proves and consequently, addition is not called for.
Loan creditors - Admittedly, there is no evidence available with the Revenue in the form of any statement recorded from any of the Directors to controvert the evidence in the form of income tax returns filed, confirmation letters filed, deduction of TDS on the interest paid and the interest income offered by such loan creditors for the relevant assessment years, consequently the additions are unsustainable and the same stand deleted.
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2023 (3) TMI 1483 - BOMBAY HIGH COURT
Validity of reassessment proceedings in name of a non-existing company - notice issued after scheme of amalgamation as approved by the High Court - HELD THAT:- In the case of Spice Entertainment Ltd. [2011 (8) TMI 544 - DELHI HIGH COURT] a Division Bench of the Delhi High Court held that once the factum of amalgamation of a company had been brought to the notice of the AO, despite which the proceedings are continued and an order of assessment passed in the name of non-existent company, the order of assessment would not merely be a procedural defect but would render it void.
Recently, the apex court in the case of Pr. CIT v. Maruti Suzuki India Ltd.[2019 (7) TMI 1449 - SUPREME COURT] despite the fact that the AO was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law.
The stand of the Revenue that the reassessment proceedings could be initiated for a period prior to the specified date as per the scheme of amalgamation even against a non-existent entity, is an argument which is clearly untenable in view of the ratio of the aforementioned judgments. WP allowed.
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2023 (3) TMI 1482 - DELHI HIGH COURT
Appointment of Ld. Sole Arbitrator for adjudication of the disputes and differences between the Petitioner and the respondent Nos. 1, 2, 3 and 4 - award of costs of this Petition as per Section 31(A) of the Act be paid by the respondents in favour of the petitioner - seeking deposit of (or security for) the amount due and outstanding i.e., Rs 1,34,00,00,000/- to the petitioner from the respondents - also restraint has been sought particularly against respondent No. 1 from making any further payments and/or transferring any assets to respondent No. 2, prior to making payments to the petitioner.
Whether arbitration clauses are not applicable as the petitioner has a remedy available under the RDDBFI Act and the SARFAESI Act? - HELD THAT:- A perusal of Clause 33 of the Facility Agreement reveals that it is in the eventuality that the lender (petitioner herein) does not have the benefit of the RDDBFI and SARFESI Acts, then, the parties will have a right to refer any dispute arising out or in connection with the Facility Agreement, to the arbitration.
The Supreme Court in M.D. FROZEN FOODS EXPORTS PVT. LTD. & ORS. VERSUS HERO FINCORP LTD. [2017 (9) TMI 1266 - SUPREME COURT] on which reliance has been placed by Mr. Rao has held, the remedy under SARFAESI Act is in addition and not in derogation to the RDDBFI Act, which is an alternative remedy available to the lender for recovery of money. The Supreme Court also held that the remedy for recovery of money and the remedy under the SARFAESI Act can proceed simultaneously. Hence this submission of Mr. Chidambaram is liable to be rejected.
Whether all the parties including respondent Nos. 2 and 3 are required to be referred to arbitration when admittedly the respondent Nos. 2 and 3 are not the signatories to the CAL and Facility Agreement? - HELD THAT:- In MAHANAGAR TELEPHONE NIGAM LTD. VERSUS CANARA BANK & ORS. [2019 (8) TMI 576 - SUPREME COURT], the Supreme Court had applied the Doctrine of Group of Companies and held that the CANFINA (a non-signatory party therein) was undoubtedly a necessary and proper party in the arbitration proceedings.
Whether respondent Nos. 2 and 3 can be referred to arbitration along with petitioner and respondent No. 1? - HELD THAT:- The plaintiffs suit was specifically for non-payment of those dues under the main agreement by the defendant No. 1 and also for non-payment of the dues by defendant No. 3 under the personal guarantee. Whereas, the case of the defendants was that the main agreement between plaintiff and defendant No. 1 for supply of goods contained the arbitration clause and thus main claim of the plaintiff arising out of that agreement is covered by the arbitration agreement, thus, the parties must be referred to arbitration under Section 8 of the Act of 1996. The Court after hearing the submissions of both the sides, negated the plea on behalf of the defendants by holding that the arbitration clause being entered into only between the creditor and the principal debtor and not with the guarantors, all the parties including the guarantors thus cannot be referred to arbitration.
This Court appoints Justice L. Nageswara Rao, a Former Judge of Supreme Court of India (Mob. No. 9810035984), as the sole Arbitrator, who shall adjudicate the disputes between the parties, through claims and counter claims, if any. He shall give his disclosure under Section 12 of the Act of 1996. The learned Arbitrator can fix the fee to conduct arbitration proceedings in consultation with the counsel for the parties.
Petition disposed off.
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2023 (3) TMI 1481 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL. PRINCIPAL BENCH, NEW DELHI
Maintainability of application under Section 7 of IBC - application barred by limitation which is prescribed under Article 137 of the Limitation Act, 1961 or not - Appellant made various payments up to February, 2017 but also on 07.03.2019 sent a proposal for one time settlement of term loan which tantamounts to acknowledgement - HELD THAT:- There is no substance in the argument of Counsel for the Appellant because the Respondent has appended complete detail of various payments made by the Corporate Debtor in the loan account no. 56000983 much after 2015 or till 23.02.2017 when the last payment USD 1 Lakh was made, therefore, there was an acknowledgment on the part of the Corporate Debtor about the debt which was to be paid and since the application under Section 7 was filed on 31.01.2020, therefore, it is well within the limitation.
There is hardly any substance in the present appeal for the purpose of interfering in the order of admission on the ground of limitation.
There are no merit in the present appeal and the same is hereby dismissed.
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2023 (3) TMI 1480 - ORISSA HIGH COURT
Validity of Revision u/s 263 - ITAT has set aside the said order of the Principal CIT as noted “this is not a case of inadequacy of enquiry. It is a case of absence of enquiry” - HELD THAT:- The view taken by the ITAT appears to be a plausible one and not erroneous in law. Consequently, the Court is not satisfied that any substantial question of law arises. The appeal is dismissed.
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