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Showing 221 to 240 of 1456 Records
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2024 (1) TMI 1236
Approval u/s 80G(5) - eligibility - Whether applicant has not commenced significant charitable activity as per its objects? - as per HC [2018 (7) TMI 1729 - RAJASTHAN HIGH COURT] granted approval u/s 80G(5) - HELD THAT:- We are not inclined to interfere with the impugned judgment passed by the High Court. Special Leave Petition is dismissed keeping the question of law open.
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2024 (1) TMI 1235
ACIT assuming jurisdiction - transfer of cases - Interpretation of provisions of Section 124(3)(a) - absence of reference to an incorrect provision per se cannot invalidate the authority conferred in the present case u/s 120(2) instead of Section 120(4)(b) - HELD THAT:- As petitioner submitted he has instructions to withdraw the special leave petition, in view of the settlement arrived at between the parties under the ‘Direct Tax Vivad Se Vishwas Act, 2020’.
Copy of the settlement arrived at between the parties has been filed and the same is taken on record.
The special leave petition stands dismissed as withdrawn.
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2024 (1) TMI 1234
Reopening of assessment u/s 147 - notice issued on the basis of statement recorded u/s 133A - HELD THAT:- As decided in in Khader Khan [2007 (7) TMI 182 - MADRAS HIGH COURT] wherein as compared and contrasted Sections 132(4) and 133A and concluded that Section 133A does not empower the officer conducting the survey to record statements under oath. On that basis, it was further concluded that such statement does not have evidentiary value.
On examining the impugned notice, it is clear that a survey was conducted and that several factual findings were made on such basis. These findings inter alia relate to sales in cash which were not reflected in the books of account, availability of undisclosed or excess stock; and payment for a property being made partly from undisclosed profits. In the impugned notice, it is recorded that the statement of Sri.S.Ravichandran was not the only basis for initiating proceedings under Section 148A, and that such proceedings were initiated on the basis of the entire set of findings arising from the survey.
In the impugned notice, it is further recorded that a statement was recorded not only under Section 133A, but also under Section 131. Section 131, on a plain reading, confers the powers of a civil court on the relevant officers. Such powers include the power to examine even a third party under oath.
The above discussion leads to the conclusion that no case is made out to interfere with proceedings initiated by the respondent for alleged escaped assessment. It is needless to say, however, that it is open to the petitioner to participate in such proceedings and resist any liability in respect of such escaped assessment.
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2024 (1) TMI 1233
Reopening of assessment - reason to believe - disallowance prior period of expenses - revenue submitted that when petitioner is following the mercantile system of accounting, prior period expenses claimed in profit and loss account is not allowable and that issue has been taken by the AO for a later year and that would be a fresh tangible material - HELD THAT:- We would agree with Petitioner that if the basis for reopening to disallow prior period of expenses was the assessment order for AY-2010- 2011, that assessment order for AY-2010-2011 having been set aside by CIT(A) in his order dated 18th February 2015 and Revenue having accepted the order, it cannot be said that there was any tangible material to reopen the assessment for AY 2008-2009.
Moreover, as decided by this court [2011 (7) TMI 1210 - BOMBAY HIGH COURT] one of the question of law raised was whether the ITAT was justified in deleting the disallowance on account of prior period expenses which did not pertain to the year under consideration when the assessee was following mercantile system of accounting. The court was pleased to hold that the expenditure would be allowable. In the affidavit in reply, none of the averments in the petition has been specifically denied, save and except, it states that the notice has been issued after obtaining prior permission of the concerned authority.
Thus in view of the above, we are satisfied that the reopening cannot be sustained. Assessee appeal allowed.
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2024 (1) TMI 1232
Application for NIL rate TDS deduction certificate u/s 197 - Taxability of income in India - income accruing/arising or deemed to accrue/arise in India - taxability in source state - taxability of income from the Bangladesh project - PE in India - expenditure regarding the consultancy services rendered by the petitioner in Bangladesh - as petitioner is rendering services to the Indian lead Partner and hence, the Assessing Officer has come to the conclusion that the payments in foreign currency by the Indian entity i.e., ICT to the petitioner is the fees for technical services received in India as contemplated under Section 5(2) of the Act, 1961 and that such amounts would be deemed to be income accruing in India under Section 9(1) of the Act.
HELD THAT:- Subject project is being undertaken in Bangladesh and no part of the said project is situated in India. The amounts payable to ICT in respect of above project are being paid in Bangladesh by the Government of Bangladesh. The services for the said project are being rendered by the petitioner herein to ICT and the same is governed by DTAA. As per Article 12 of the DTAA, only fees for ‘included services’ are taxable in the source State and not the fees for the technical services, which is in question in the present proceedings. Further, as per Article 7(1) of the DTAA, the business profits of an enterprise of a contracting State shall only be taxable in the State unless the enterprise carries out the business in other contracting State through a PE. In the present case, no material is placed on record to show that PE of the petitioner company, having office at Hyderabad, is involved in any manner in the above project.
In the above factual background, and in the absence of any material placed before this Court, it can be inferred that no taxable event has taken place in India and thus, petitioner company cannot be subjected to TDS for payments made by ICT to the petitioner company. Though, petitioner has got an alternative remedy of revision before the appellate authority under Section 264 of the Income Tax Act against the impugned order, this Bench is not inclined to relegate the petitioner to appellate authority in the absence of any strong material warranting to hold the petitioner liable to pay TDS.
Writ Petition is allowed and the respondents are directed to consider granting nil rate TDS deduction certificate to the petitioner under Section 197 of the Income Tax Act, 1961, within a period of eight weeks from the date of receipt of copy of this order.
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2024 (1) TMI 1231
Maintainability of appeal in writ Court - seeking action as an AO or an appellate authority - Validity of re-assessment order passed u/s 147 - correctness of the order passed u/s 148A (d) - scope of alternate remedy - as argued error has crept in commencing from the stage of issuance of notice un/s 148A (b) and even thereafter, while passing the re-assessment order there has been violation of principle of natural justice as the elaborate reply given by the assessee to the notice issued u/s 142(1) as well as the show-cause notice had not been considered and brushed aside in a single line
HELD THAT:- The appellant did not question the initiation of the reopening of the assessment by issue of notice u/s 148A (b) nor the appellant challenged the order passed u/s 148(d). Therefore, at this distance of time, the appellant is precluded from questioning the correctness of the order passed u/s 148A (d) of the Act.
After the said order, the re-assessment proceedings have commenced and notice under Section 148 has been issued. The assessee has participated in the proceedings, submitted their reply and the assessing officer has considered the reply and passed an order setting out certain reasons. To test the correctness of those reasons, facts have to be gone into much of which are being disputed by the appellant assessee. Therefore, the learned Single Bench was fully justified in holding that the re-assessment order being an appealable order, the same can be challenged before the appellate authority. That apart, whether the replies given by the assessee has been properly appreciated or not appreciated is also a ground which can be canvassed before the appellate authority.
That apart, whether the appellant is entitled to seek cross-examination of certain third parties is also a ground which can be urged by the appellant before the appellate authority. Therefore, the learned Single Bench was justified in relegating the appellant to avail the alternate remedy.
Thus no ground to interfere with the order impugned. In result, the appeal is dismissed.
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2024 (1) TMI 1230
Validity of Revision u/s 263 by CIT - ITAT set aside revision proceedings as CIT could not establish order u/s 143(3) as erroneous and prejudicial to the interest of the revenue - Under statement in closing stock - HELD THAT:- As tribunal examined the factual aspects as well and noted that the assessee has furnished full details of the stock and the revenue was not able to point out that there is a shortage of stock or how the value declared by the assessee is less in terms of the value as well as in the terms of the quantity. Further the tribunal has also noted that the CIT has not dealt with the aspect as to whether the details were not available before the assessing officer or not during the course of the original proceedings.
Secured loan and Commission - Taking note of the aspect that the stock statement submitted by the bank and the stock as per the stock register were exactly matching with each other, the tribunal agreed with the assessee’s submission that the assessing officer has conducted due enquiry and thereafter completed his scrutiny assessment. The tribunal also noted that the CIT in his order under Section 263 has only observed that there is a possibility of understatement in the closing stock without a specific finding on the said aspect. Thus, the case on hand is not one such case where no enquiry was conducted by the assessing officer.
Thus due enquiry was conducted by the assessing officer and after perusal of the documents, stock register etc. the assessment was completed. The tribunal also re-appreciated the factual position and found that the CIT while exercising power under Section 263 of the Act has not recorded a specific finding that it is as case of no enquiry by the assessing officer rather the observation was there could be a possibility of understatement of the closing stock. Thus, we are satisfied that the tribunal rightly interfered with the order passed by the CIT and allowed the appeal of the assessee. - Decided against revenue.
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2024 (1) TMI 1229
Assessment u/s 153A - disallowance of interest u/s. 36(1)(iii) - incriminating material found during the course of search u/s. 132(1) or not? - HELD THAT:- The issues arising in this Appeal is no more res integra in view of the decision of this Court in case of Principal Commissioner of Income Tax-4 v. Saumya Constructions Limited [2016 (7) TMI 911 - GUJARAT HIGH COURT] wherein it is held that there cannot be any addition of regular item shown in the books of accounts until and unless certain materials of incriminating nature found during the course of search.
The word “incriminating” has not been defined under the Act where it refers to those documents, materials, information which were collected during the search proceedings and simultaneously these documents had bearing on the total income of the assessee. The Tribunal, in the impugned order, has categorically observed that nothing was brought on record contrary to the findings of the CIT(A) and accordingly, no addition of the regular items which were disclosed by the assessee in the regular books of accounts can be made.
Also decided in Abhisar Buildwell P. Ltd. [2023 (4) TMI 1056 - SUPREME COURT] in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A - No substantial question of law.
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2024 (1) TMI 1228
Characterization of receipts - nature of the benefit received - sales tax subsidy/incentive under the Package Scheme of Incentives Scheme, 1993 - revenue or capital receipt - submission of revenue was that merely the fact that the sales tax subsidy under the 1993 Scheme was received based on the eligibility certificate issued after the commencement of the production would not render the receipt as one on capital account
HELD THAT:- The common thread running through various incentives provided under the scheme (to which we have referred above) was the setting up a new unit or large-scale investment in fixed capital. The fact that the eligibility certificate was to be issued by the agency implementing the scheme after the commencement of commercial production by the eligible unit appears to have been incorporated in the 1993 Scheme to ensure that the object and the purpose of the 1993 Scheme, which was to industrialise underdeveloped and developing areas was fulfilled.
Thus, in our opinion, the argument advanced on behalf of the appellant/revenue that a perusal 1993 Scheme would show that the incentives were tied in with production is untenable. The complete focus of the 1993 scheme was to achieve the object, as noticed above, engrafted in its preamble.
Assessee was entitled to avail of sales tax subsidy/incentive under two eligibility certificates dated 13.12.1994 and 15.10.1996 [as amended] for 14 years and 13 years & 11 months, respectively, subject to a maximum entitlement of 110% of capital investment made in setting up of the industrial units.
Investment in capital assets such as land, buildings, plant and machinery was only a measure adopted for calculating the sales tax subsidy/incentive [which in this case was availed by the respondent/assessee by retaining the sales tax it had levied on its goods]. A perusal of the eligibility certificate dated 13.12.1994 would show that it was issued for setting up a “new unit”, while the eligibility certificate dated 15.10.1996 was given to a "pioneer unit" which had undertaken expansion.
Therefore, the argument that the sales tax subsidy/incentive was granted to assist in carrying on business operations and thereby help make the industries more profitable, both on facts and in law is untenable.
The sole purpose of the 1993 Scheme was to set up new units and/or expand existing units in underdeveloped and developing areas
The question of law, as framed is answered in favour of the respondent/assessee and against the appellant/revenue. The sales tax subsidy/incentive received by the respondent/assessee under the 1993 Scheme was a capital receipt.
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2024 (1) TMI 1227
Prosecution u/s 276C (2) - petitioners had delayed to pay self-assessment tax - whether delayed payment alongwith the interest could be termed as evasion of tax? - HELD THAT:- The judgments in Confident Projects (India) (P.) Ltd [2021 (2) TMI 75 - KARNATAKA HIGH COURT], S.P. Velayutham [2022 (2) TMI 50 - MADRAS HIGH COURT] and M/s Health Bio Tech Ltd. & others (2023 (9) TMI 1229 - PUNJAB AND HARYANA HIGH COURT] have categorically held that delayed payment of income tax would not amount to evasion of tax.
In the instant case Return for the total income for the year 2012-13 was filed on 29.09.2012 for amount of Rs. 8,20,53,544/-. The tax was self-assessed for an amount of Rs. 2,10,91,150/-. On account of the financial state of the company which remains debatable, the tax alongwith interest was paid on 10.07.2013. However, the show cause notice for delayed payment was sent only on 11.02.2014 and 24.02.2014 pursuant to which the complaint came to be instituted. Therefore, by no stretch of imagination can it be held that there was any evasion of tax on the part of the petitioners, though there was a delay in the payment of the tax for which interest stands levied and paid. Petition allowed.
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2024 (1) TMI 1226
Reopening proceedings against deceased assessee - proceedings against legal representatives of the deceased assessee - Writ Petition challenging the notice issued u/s 148 in the name of the deseased assessee, the wife of the petitioner - as submitted that the deceased assessee had not filed return of Income in her name as she had no income of her own.
As after the death of the deceased assessee, the Permanent Account Number of deceased assessee was no longer valid. It is submitted that although the legal heirs of the deceased assessee are deemed to be the assessee as per Section 159 the appeal filed is not getting linked with the PAN Card and Aadhar Card number of the deceased assessee and therefore the petitioner as the Legal Representative is remediless.
HELD THAT:- After the death of an assessee, the respective Legal Representatives must register themselves in the Income Tax Portal by submitting the PAN of the deceased assessee along with their PAN as the Legal Representative of deceased assessee and produce a death certificate of the deceased assessee together with their legal heirship Certificate.
It is only after such compliance, appeal against an assessment order passed in the name of a deceased person can be numbered and heared. The petitioner as legal heir of the deceased assessee ought to have complied with the same along with other legal representatives of the deceased assesse Mrs. Nirmala Subramanian.
Petitioner as the legal representative of the deceased assessee along with the other legal representatives thus ought to have to filed an appeal against the Assessment Order dated 14.03.2023 by following the prescribed procedure. The petitioner has however filed a defective appeal on 14.06.2023 before the Commissioner of Income Tax (Appeals).
Having, opted to correctly challenge the Assessment Order dated 14.03.2023 before the Commissioner of Income Tax (Appeals) by filing an appeal though with defects, it is not open to the petitioner to challenge the assessment order and/or the notices that preceded the impugned assessment order and/or the subsequent notice issued under section 221(1) of the Income Tax Act, 1961 in the name of the deceased assesse.
This writ petition is therefore without any merits and is therefore liable to be dismissed. However, liberty is given to the petitioner to work out the remedy before the Commissioner of Income Tax (Appeals) by curing the defect in the appeal filed on 14.06.2023. Defects pointed out shall be cured by the petitioner within a period of 45 days of receipt of a copy of this order.
The Office of the Commissioner of Income Tax (Appeals) is to be suo moto impleaded as third respondent and is directed to number the appeal subject to the petitioner and other legal representatives complying with other statutory requirements for the filing of appeal as the legal representatives of the deceased assessee namely Mrs.Nirmala Subramanian. On the appeal being numbered, it shall be disposed on merits within a period of six (6) months from the date of receipt of a copy of this order. Needless to state petitioner/legal representatives or their Authorsised representatives shall be heard.
Recovery proceedings against the petitioner and legal representatives of the deceased assessee namely Mrs.Nirmala Subramanian shall be kept in abeyance for a limited period of six (6) months from today.
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2024 (1) TMI 1225
Validity of reopening u/s 147 r.w.s. 148 - addition as income from business by treating sale consideration in respect of property owned by the firm which was given for the development and addition on account of deposits made in the bank account - HELD THAT:- AO despite taking note of the fact of the sale deed which was between the two partnership firms and not by the assessee in his individual capacity nor anything pertain to the assessee in his individual capacity qua the said transaction, he still proceeded to entertain his ‘reason to believe’. Even the partnership deed and the PAN of M/s. Sai Developers were also filed during the course of assessment proceedings, which AO has ignored.
Once, assessee has brought the facts on record, then ld. AO could not have proceeded to tax the above transaction in the hands of the assessee, because the agreement and transaction was not with the assessee, albeit between two partnership firm. In fact, AO should have issued notice u/s. 148 to the partnership firm. He has simply gone by ITS records, i.e., information from the individual transaction statement and that there is no return of income filed by the name of Sai Developers. Therefore, he presumed that all the transactions belong to assessee.
Once the sale deed or the agreement is between the two partnership firms, then how the transaction can be viewed in the individual hands by the ld. AO, is beyond comprehension. Even the reasoning given by the AO as incorporated above is not based on rationale reasoning either on facts or in law. Thus, reasons recorded by the ld. AO based on certain information that assessee has entered into transaction of immovable property itself is incorrect and based on such incorrect assumption of facts, notice u/s. 148 cannot be issued nor the same amount can be taxed in the hands of the assessee.
At least when assessee has raised this objection and has filed all the documents like partnership deed, PAN of the partnership firm and more specifically the developer’s agreement entered between two different parties. When all these documents were filed before him then how the assessment can be made u/s. 148 in the hands of the assessee. Accordingly, the reasons recorded itself in the case of the assessee do not give jurisdiction to the ld. AO to make any assessment or issue notice u/s. 148 and accordingly, same is quashed. Accordingly, the entire proceedings u/s. 148 is held to be invalid. Appeal of the assessee is allowed.
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2024 (1) TMI 1224
Eligibility for deduction u/s 80IA - contracts entered with Airports Authority of India (AAI) - constitute as a Central / State Government or not? - HELD THAT:- The Government of India constituted the International Airports Authority of India (IAAI) in 1972 to manage the nation's international airports while the National Airports Authority of India (NAAI) was constituted in 1986 to look after domestic airports. Both the above organizations were merged in April 1995 by an Act of Parliament, namely, the Airports Authority of India Act, 1994 and has been constituted as a Statutory Body and was named as Airports Authority of India (AAI). Therefore, AAI is a statutory body and in terms of the plain language of Section 80-IA(4) and if other conditions of eligibility are satisfied by the assessee, it would be eligible for claim of deduction u/s 80-IA(4) of the Act, if the assessee has entered into an agreement with any statutory body for carrying out development work.
Therefore, in our considered view, claim of deduction u/s 80-IA(4) cannot be denied to the assessee only on the ground that since the assessee has entered into a contract with AAI, which does not constitute as a Central / State Government, the assessee is not eligible for claim of deduction under Section 80-IA(4) of the Act.
Satisfaction of other conditions for eligibility of claim - qualifying as a “developer - whether the assessee qualifies as a “developer” or the assessee is a “works contractor” within the meaning of Explanation to Section 80-IA of the Act? - Evidently the contract has not been awarded to the assessee for carrying out any repairs, maintenance or upkeep etc. of existing airport facility, but the assessee has been awarded contract for bringing into existence a new infrastructural facility in place being new domestic arrival block at Sardar Vallabhbhai Patel International Airport. Accordingly, the assessee in our view is has been entrusted the responsibility of bringing into existence and “new infrastructure facility” being a new domestic arrival block at Sardar Vallabhbhai Patel International Airport.
Assessee has undertaken to bring into existence a new infrastructure facility being new domestic arrival block at Sardar Vallabhbhai Patel International Airport, Ahmedabad and further the assessee is also undertaken various financial and entrepreneurial risks required to be borne by a “Developer” of a project viz. providing bank guarantee to AAI, procurement of certain materials by the assessee at it’s own cost during the construction phase, preparation of various architectural designs relating to the project for approval of AAI etc. which all support the fact that the assessee is in the instant facts is a “developer” within the meaning of Section 80-IA of the Act and is eligible for claim of deduction u/s 80-IA(4).
We observe that Ld. CIT(A) undertook a detailed analysis of the scope of work undertaken by the assessee and the various risks and responsibilities undertaken by the assessee and then came to conclusion that assessee qualifies as a “developer” and is eligible to claim of deduction u/s 80-IA(4), thus confirmed.
Assessee appeal allowed.
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2024 (1) TMI 1223
Revision u/s 263 by CIT - Right Issue of shares - invocation of provisions of section 52(2)(viib) by debunking the calculation of fair market value of shares done by the assessee and accepted by the AO, under Rule 11UA of IT Rules - addition on account of the shares being issued at a value less than its fair market value - CIT set aside the assessment order passed by the ld.AO u/s 143(3) holding it as erroneous and prejudicial to the interest of the Revenue as AO had failed to make proper inquiries regarding valuation of fair market value of shares issued by the assessee during the year at a premium, which valuation as per the ld. Pr. CIT was not in accordance with law as done by the assessee - assessee argued CIT held that the assessment order was erroneous without dealing with the arguments made by the assessee before him.
HELD THAT:- We are not in agreement with the contention of assessee that the contentions made by the assessee before the ld. Pr. CIT were not dealt with by him while holding the assessment order to be erroneous. He has specifically referred to the contentions made regarding non-applicability of section 56(2)(viib) to the Right Issue issued, that there is no mala fide intention involved in the Right shares which is said to be brought in the ambit and scope of the deeming provision of section 56(2)(viib) of the Act.
As for the decision cited in the case of Sudhir Menon HUF [2014 (3) TMI 534 - ITAT MUMBAI] we have noted from the ld. Pr. CIT order, that the issue in the said case related to the invocation of the provisions of 56(2)(vii) which relates to the receipt of any money or property without any consideration or without adequate consideration. While in the present case, the issue relates to the provisions of section 56(2)(viib) of the Act which deems the amounts received in lieu of the issue of shares in excess of their FMV as income of the assessee. CIT, therefore, has rightly found the facts of the case to be different and distinguishable from that in the present case before us. Therefore, we do not agree with the assessee that the ld. Pr. CIT has held the assessment order erroneous without dealing with averments made by the assessee before it.
Now coming to the aspect of the decision of Chhatisgarh Metaliks and Alloys P.Ltd [2023 (4) TMI 74 - ITAT RAIPUR] holding the provision of the section 56(2)(viib) of the Act not applicable on Right Issue, and its impact on revisionary order passed in the present case, it is evident that in the absence of any contrary decision cited by the Revenue before us, the entire exercise of revision in the present case on identical set of facts fails considering the categorical finding of the ITAT that section 56(2)(viib) of the Act cannot be invoked on a Rights Issue. The finding of the error in the assessment order by the ld. Pr. CIT on account of an identical issue clearly does not survive.
Thus the impugned order of the ld. Pr. CIT passed under section 263 of the Act is set aside, and the appeal of the assessee is allowed.
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2024 (1) TMI 1222
Validity of assessment orders without quoting DIN - validity of subsequent generation of the DIN - Application of Board’s circular - principles of functional or purposeful interpretation - HELD THAT:- As decided in Abhinav Chaturvedi and others[2023 (8) TMI 378 - ITAT DELHI] forwarding of the intimation of generation of the DIN in ITBA is only a subsequent action and that is not part of assessment order. The manner in which the word 'communication' is defined shows every notice, order, summons, letter and any correspondence from Tax authorities should have a DIN quoted and it is for this reason that the Intimation issued about the DIN of assessment order itself has a DIN quoted on it
Board’s circular application - Argument raised is against now crystallized proposition of law that as far as the Circulars of the Board are concerned, they are binding upon the officers of the Revenue Department without any exceptions whatsoever.
Once it is concluded that the Circular of the Board is binding upon the Revenue Authorities, then, its non-compliance brings the consequences which the Board Circular itself manifests and it is that the ‘communication’, which in the present case is ‘assessment order’ will be deemed to have been never issued. Thus, when Board lays down what shall be the format of any such ‘communication’ and also provides that if the ‘communication’ is not in that format the same will be considered as not issued at all, then it is not a mere technical flaw liable to be corrected but it vitiates the communication, i.e the ‘assessment order’ in the present form.
Once assessee has a statuary right to be conveyed such ‘communication’, as far as the immediate consequences of the communication not bearing DIN is concerned, as the same is presumed to have never been issued, such communication has no legal foundation left and becomes a voidable communication at the instance of the assessee, irrespective of assessee establishing the plea of prejudice.
The difference pointed out in the passing of an order and issuing communication of order is very much clarified by the Circular as the word ‘communication’ has been primarily used in the sense of a ‘Noun’, specifying what all sorts of orders, notices etc. will require DIN on the body. It is not used in the form of a ‘verb’ indicating the mode of transmission of information or delivery or transmitting a copy thereof as ‘service of the notice’ referred u/s 282 of the Act. Thus to say that there is merely an improper manner of service and such rigour is mitigated by Section 292BB is quite misconceived. See BRANDIX MAURITIUS HOLDINGS LTD. [2023 (4) TMI 579 - DELHI HIGH COURT]
This ground is allowed as the assessment order in question is invalid and is deemed to have never been issued as per the CBDT Circular dated 14/08/2019(supra) for non-mentioning of DIN on the body of the order.
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2024 (1) TMI 1221
Violation of principles of natural justice - appellant's request for cross-examination of parties, whose statement has been relied upon, has not been considered - In the writ appeal, while acknowledging that cross-examination is a part of natural justice, the High Court noted that there is no absolute right to cross-examination, and it depends on each case's facts. - However, High Court permitted the appellant to file appeal before the Appellate Authority, within a period of 30 days from the date of receipt of a copy of this judgment - HELD THAT:- There are no reason to interfere with the impugned judgment passed by the High Court. Hence, the Special Leave Petition is dismissed without prejudice to any other alternative remedy that the petitioner may seek to avail.
The time granted by the High Court to avail the remedy is extended by 30 days from the date of this order.
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2024 (1) TMI 1220
Levy of penalty under Regulation 18 (1) of the CBLR 2018 - failure to comply with the obligations mandated under Regulation 10 (d) and 10 (e) of CBLR 2018 - misclassifying ‘Match Skillets’ exported by them under CTH 36050090 instead of under CTH 48192010 - HELD THAT:- The stand of the appellant from the very beginning was that CTH adopted by the appellant was based on the assessment practice for Match Skillets made out of white board. The appellant has also given justification for the said classification. Further, it is found that the assessing officers were well aware of the classification and they allowed the said classification without any objection. The respondent did not raise any objection to the adopted classification even though the description of the export goods was correctly declared. Further, it is not only the appellant who has followed this classification with regard to impugned goods rather other exporters were also adopting the same classification which was followed at Tuticorin port during the period from April 2015 to October 2020.
The Commissioner in the impugned order has held that the appellants are not directly benefited by their contravention hence there is no mens rea on the part of the appellant and therefore the imposition of penalty on the appellant for violation of Regulation 10 (d) and 10 (e) of CBLR 2018 is not warranted. Further, it is settled law that the classification is a question of law and cannot be treated as misdeclaration or misstatement.
Once it has been observed by the learned Commissioner that there is no mens rea on the part of the appellant then in that case imposition of penalty of Rs.25,000/- for violation of Regulation 10 (d) and 10(e) of CBLR 2018 is not sustainable in law. Therefore, the penalty imposed on the appellant is set aside - appeal allowed.
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2024 (1) TMI 1219
Absolute Confiscation of the seized gold and foreign currency - Prohibited item or not - Baggage Rules - appellant denied having any dutiable goods, his body and baggage were screened - first proviso to sub-clause (a) of clause (1) to Section 129A of the Customs Act, 1962 - HELD THAT:- Any passenger entering into India is required to make a declaration of his baggage before entering into India as provided under Section 77 of Customs Act, 1962. Further if it is found that the goods accompanying him which are also called as baggage, import of which is prohibited and in respect of which true declaration has been made under Section 77 the proper officer may at the request of the passenger detain such articles for the purpose of being returned to him on his leaving India under Section 80 of Customs Act, 1962 - In the instant case, the passenger is neither a habitual offender nor carrying the said goods for smuggling purpose. In this circumstance the Order of the Ld. Commissioner for absolute confiscation of gold chains legally not correct. Further the gold is not a prohibited item. It can be imported only with certain conditions as prescribed under Exim Policy as well as guidelines laid down by the RBI.
In the case of YAKUB IBRAHIM YUSUF VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [2010 (10) TMI 650 - CESTAT, MUMBAI], it has been held that prohibited goods refers to goods like arms, ammunition, addictive drugs, whose import in any circumstance would danger or be detriment to health, welfare or morals of people as whole, and makes them liable to absolute confiscation. It does not refer to goods whose import is permitted subject to restriction, which can be confiscated for violation of restrictions, but liable to be released on payment of redemption fine. The gold does not fall under the prohibited category and therefore it cannot be absolutely confiscated.
In the present case considering the facts and circumstances, the order of absolute confiscation is not sustainable in law and therefore the order of absolute confiscation is set aside and an option given to the appellant to redeem the Gold Chains on payment of redemption fine of Rs.3,00,000/-.
Confiscation of foreign currency worth USD 11,325 - HELD THAT:- Section 111 of the said Act, under which the impugned foreign currency has been confiscated, which provides for confiscation of improperly imported goods. Thus, unless the improper importation is proved with evidence, the said section is not applicable, there is no evidence on record to prove that the impugned foreign currency was improperly imported. Mere improper procurement, if at all, in contravention of FEMA, will not attract Section 111 of the said Act.
In the present matter Revenue has not advanced any evidence to show that the foreign currency, in question, was smuggled into the country by the appellant. In the absence of such evidence, confiscation of the same cannot be upheld. Hence the confiscation of the currency is set aside. Accordingly the revenue shall release the currency of $11,325/- to the appellant.
Penalties imposed on appellant under Section 112(a) and Section 114AA - HELD THAT:- Having regard to the totality of the facts and circumstances of the impugned matter the penalty imposed is reduced to a sum of Rs. 1,00,000/- under Section 112(a) of the Act and the penalty of a sum of Rs. 50,000/-, under Section 114AA of the Act.
The appeal is partly allowed.
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2024 (1) TMI 1218
Classification of imported goods - Encoder/Multiplexer under different Model - classifiable under Tariff Heading No. 85 17 6290 as declared by appellant or under 85 28 of Customs Tariff Act, 1975, as claimed by the revenue? - entitlement for exemption Notification No. 24/2005-CUS (Sr.No.13) dated 01.03.2005 - HELD THAT:- This issue in the appellant’s own case has been decided by this Tribunal in M/S MODERN COMMUNICATIONS & BROADCAST SYSTEMS P. LTD VERSUS C.C., - AHMEDABAD [2018 (12) TMI 172 - CESTAT AHMEDABAD] where it was held that it is clear that as the impugned goods are having the function of transmission of data and other functions and hence the same would merit classification under CTH 8517. Accordingly, we hold that the goods are classifiable under CTH 8517.
From the above decision, it can be seen that this Tribunal has decided the classification of the goods in question under CTH 85 17 6290. Following the above decision in the present appeal also appellant’s goods are correctly classifiable under CTH 85 17 6290.
Moreover, in the revenue’s appeal, the revenue has proposed to classify the goods under CTH 85 28 7100. However, in the show cause notice, it was proposed to classify under CTH 85 28 7390. Therefore, the new grounds in the appeal cannot be made which is beyond the scope of show cause notice.
The impugned order is set aside - Assessee’s appeal is allowed and revenue’s appeal is dismissed.
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2024 (1) TMI 1217
Initiation of CIRP - Date of default - Existence of restructuring proposals - NCLT admitted the application u/s 7 - pre-implementation conditions as stipulated in the restructuring proposals were mandatory or not - failure in its compliance tantamounted to non-execution of the restructuring approvals automatically or not - date of default was covered under Period stipulated under Section 10A of the Code or not - payments of Rs. 50 Crores made by the Corporate Debtor to the financial creditors i.e., the Respondent No. 2 and PFC resulted in automatic extension of restructuring approvals or not - financial viability of the Corporate Debtor as claimed by the Appellant would have impacted the impugned order in deciding the application filed under Section 7 of the code by the Respondent No. 2 or not.
Existence of restructuring proposals - pre-implementation conditions as stipulated in the restructuring proposals were mandatory or not - failure in its compliance tantamounted to non-execution of the restructuring approvals automatically or not - HELD THAT:- The period from the date 25.03.2020 to 24.03.2021, is the period which is required to be excluded for the purpose of initiation of CIRP under Section 7, 9 and 10. Section 10A of the Code also clearly mandates that no application shall ever be filed for initiation of CIRP of a Corporate Debtor for the said default occurring during the said period. It is significant to note that the explanation provided under Section 10A of the Code stipulate that provision of Section 10A shall not apply to any default committed under the said Sections before 25.03.2020. Hence, date of default become critical.
On the failure of the Corporate Debtor to fulfil its obligation to the original common loan agreement and subsequently, further failure to comply with the first restructuring proposal dated 21.02.2020 and further failure to comply with the second restructuring approval dated 29.09.2020, the Appellant, at this stage, cannot take the plea of continuation of all agreements/proposals. Normally, when the restructuring proposal is agreed upon, the same is in supersession to the previous loan agreement/restructuring proposal. Here, it is critical to understand that pre-implementation condition are conditions precedent, which are meant to be followed and it cannot be the case of the borrower that despite his failure to fulfil the conditions precedent, the restructuring proposal should be deemed to be valid, continuing and further deemed to be converted into agreement - In the present case, undisputedly the Corporate Debtor could not make the required payments to the lenders i.e. the Respondent No. 2 as well as PFC and also could not meet with pre-implementation conditions and therefore, the restructuring approval ceased to remain alive and the only valid agreement which survived was the common loan agreement dated 19.06.2013.
Default period falling within period specified under Section 10A of the Code or otherwise? - HELD THAT:- It is evident that the Respondent No. 2 clearly indicated date of default to be 31.03.2018, which is not covered under Section 10A of the Code. Incidentally, the Respondent No. 2 also gave date of NPA of Corporate Debtor i.e., 30.06.2018, which is also out of purview of Section 10A of the Code - the date of default as indicated in Part IV by the Appellant is 31.03.2018 based on first default as per original common loan agreement. The Adjudicating Authority has considered 31.03.2021 as a date of default based on the second restructuring approval dated 29.09.2020. We have already noted that as per Section 10A of the Code, the period is specified is from 25.03.2020 to 24.03.2021. Thus, either of the dates i.e., 31.03.2018 or 31.03.2021 are clearly out of purview of Section 10A of the Code.
Payments of Rs. 50 Crores made by the Corporate Debtor to the financial creditors i.e., the Respondent No. 2 and PFC resulted in automatic extension of restructuring approvals or not - HELD THAT:- The plea of the Appellant regarding existence and continuation of default under first restructuring proposal is wrong as the Corporate Debtor itself has submitted in I.A. No. 1020/KB/2020 filed by the them before the Adjudicating Authority in which the Corporate Debtor sought reliance solely on the Second Restructuring Proposal submitting that the Corporate debtor was required to make payment from 31.03.2021, without contending that there was any payment obligations or default continuing from first restructuring proposal - there are no force in the pleading of the Appellant on this issue.
Financial viability of the Corporate Debtor as claimed by the Appellant would have impacted the impugned order in deciding the application filed under Section 7 of the code by the Respondent No. 2 or not - HELD THAT:- It is recaptured from pleadings of the appellant that the Corporate Debtor has raised bills of Rs. 916.95 Crores from WBSEDCL and during Financial Year 2022-23, the Corporate Debtor earned EBITDA of Rs. 308 Crores and therefore, the company was solvent. During averments, the Appellant also agreed to pay outstanding amounts as per restructuring approvals around Rs. 103 Crores lying in the credit of TRA account - there has been continuous and repeated failure on the part of the Corporate Debtor to meet its obligation in making payment of principals and interest as per original common loan agreement and also failure to meet obligations as per first and second revised Restructuring Approvals. In backdrop of all these information, it is not found that so-called claim made by the Appellant about viability of the Corporate Debtor has any legal or factual force to impact the outcome of Section 7 application as contained in the Impugned Order.
Appeal dismissed.
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