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Showing 361 to 380 of 1466 Records
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2023 (1) TMI 1106
Recall of order - power to review - CIRP initiated - Corporate Debtor failed to make repayment of its dues - Operational Creditors - HELD THAT:- It is clear that the Corporate Debtor had appeared on both the dates and that the copy of the Petition and the supporting documents were served on them on 02.11.2022, hence the Adjudicating Authority had closed the opportunity to file the Counter; the matter was posted For Hearing on 05.12.2022 and thereafter on 05.01.2023, the CIRP was initiated. When the matter came up For Hearing on 05.12.2022, the Corporate Debtor could have been present and submitted his arguments. Though, his right to file the Counter was closed, he was not set Ex Parte as on the date 21.11.2022 and therefore he could have appeared on 05.12.2022 when the matter was posted For Final Hearing and having been present as on 11.12.2022, the Counsel was very much aware that the matter was posted For Hearing on 05.12.2022. Though, the Adjudicating Authority does not have the Power of Review it can, based on the facts and circumstances of the case, Recall the ‘Order’ - In the instant case, this Tribunal, sitting in Appeal, does not find any tangible / substantial grounds to interfere with the impugned order.
The Appellant, has challenged the Admission Order, dated 05.01.2023 on merits, on the ground that there was an Arbitration Clause, in the C & F Agreement, and that the Respondent, ought to have invoked this Clause. There is no embargo on the Operational Creditor, to file a Section 9 Petition, under I & B Code, 2016, even if there is an Arbitration Clause, in the Agreement. The scope and objective of the Code is Resolution, and not a Recovery Mode / Forum - In the instant case, the Adjudicating Authority, based on the material on record, had arrived at a conclusion that there were recurring defaults on behalf of the Corporate Debtor and that the Operational Creditor, has requested for full and final payment of the outstanding dues.
This Tribunal, does not find any illegality or infirmity, in the Order dated 05.01.2023, passed by the Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench – I), in petition, and this Appeal is dismissed.
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2023 (1) TMI 1105
Foreign investment in India - certain ‘procedural’ or ‘technical’ contraventions under FEMA - Compounding of offense - Online i.e., website-based and mobile application games constitute ‘gambling’ as understood in law in this country - delays in the filings of the prescribed forms and reporting of the inward remittances and also delays in the allotment of shares - Petitioner received foreign remittances at diverse periods between 2006 and 2012 and it issued equity instruments i.e., shares, to certain non-resident investors, the Petitioner had committed certain ‘procedural’ or ‘technical’ contraventions under FEMA - whether, for the relevant period, it can be said that the business activity of the Petitioner was illicit, prohibited by law, or illegal such that it would be disentitled to receive foreign investment at all? - HELD THAT:- actual nature of the activity. As we have seen the relevant period is 2006 to 2012. What the DPIIT seems to have done is to have visited the Petitioner’s website at rummycircle.com and found that there was an offering called Ultimate Teen Patti and another called Call it Right. The Affidavit clearly says that these were noted on the Petitioner’s website. The DPIIT asked for no explanation from the Petitioner. It sought no clarification. It sought no explanation as to the nature of these games or offerings. There is nothing to indicate that the DPIIT, in response to the Petitioner’s applications, called on the Petitioner to explain when these online games were first offered, how they were conducted, what they involved or any other material particulars. The Affidavit and the letter to the ED from the DPIIT clearly show that the DPIIT proceeded only on the basis of the name, i.e., the label attached to the name; in another manner of speaking, because ‘Teen Patti’, therefore gambling.
Predominant element of the activity - skill or chance - determines the character of the game. But to constitute ‘gambling’, both conditions must be met:
(i) it must be predominantly a game of chance, and
(ii) it must be played for reward.
DPIIT does not show on Affidavit or otherwise that there is any element of reward in either the so-called Ultimate Teen Patti or the Call it Right game. It does not show that it asked for such a clarification at all. ‘Terms of Service’ on the Petitioner’s website, quoted above, that there was no reward at all. We have therefore a situation where there is a categorical statement made by the Petitioner on its own that none of its activities involved ‘gambling’, as understood in Indian jurisprudence, that is a game of chance with no element of skill, for any gain or reward.
If we view it like this, and given the material, we do not see any other way to it, the mere positioning of these two games (that too after 2012) on the Petitioner’s website cannot render illicit or illegal any activity on the Petitioner’s website or mobile platforms, let alone for the earlier reporting period in question.
This is the factual and legal position as it emerges from the record before us. We must clarify that whether it is for a past period or for an ongoing or future period, it is undoubtedly necessary that the Petitioner must remain clear of any illicit or prohibited gambling activity, whatever the platform. If this is illegal in India, it does not become legitimate merely because it is online or because foreign investors have put money into it. We have the statement made across the Bar and which we will of course have to accept as an undertaking to the Court that at no point will the Petitioner’s activities involve gambling, so long as it is prohibited by our law. The mere fact that there is a game of chance on the website does not in itself make the activity gambling unless there is an accompanying reward or promise of a reward.
It is also clear that for any further foreign investments or FDI equity allotments that the Petitioner makes, it will necessarily have to comply with all applicable statutes. It may indeed have to be subjected to scrutiny yet again. We do not exempt the Petitioner from any of these requirements.
We also make direct the RBI in view of our judgment today to consider the application by the Petitioner for compounding the non-compliances for the period 2006 to 2012 noted above.
At this stage, Mr Shenoy states that a fresh application will be required. The Petitioner will submit that within two weeks. We proceed on the basis that this application will not be confronted with a problem of delay in filing. If there is any such delay, we hereby condone it.
The Fresh application will be decided by the RBI as expeditiously as possible and preferably in four weeks from the date of application. The only reason for specifying a period is that the compounding pertains to 2006 to 2012 and the Petition itself has been pending before us for much too long.
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2023 (1) TMI 1104
Classification of Services - Site Formation and Clearance, Excavation and Earthmoving and Demolition Service - activity “Dismantle” is different from the activity “demolition” or not - HELD THAT:- The appellant had merely carried out dismantling activity. This activity, in no way, can be considered as a taxable service under the category of “site formation and clearance, excavation and earthmoving and demolition service” inasmuch as the work assigned under the work order for do not attract any of the clauses itemized in the definition provided under Section 65(97a) ibid. Thus, the activities undertaken by the appellant will not fall under the taxing net for levy of service tax under the disputed taxable service. There is merit in the finding of the Ld. Commissioner. Therefore, the work undertaken by the respondent cannot be termed as an activity of “Site formation and clearance, excavation & earthmoving & demolition”.
Appeal dismissed - decided against Revenue.
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2023 (1) TMI 1103
Levy of Central Excise Duty - Compounded levy scheme - breach of rule 8(3A) of Central Excise Rules, 2002 - HELD THAT:- The provisions of rule 8 of Central Excise Rules, 2002, as prevalent in September and October 2008, had been breached and that the appellant herein upon being aware of the breach had not made good the deficiency immediately but awaited the report of audit in 2009. On the surface, it would appear that the discharge of duty liability in November 2009 did not suffice to restore the privilege of clearance of goods by debit of CENVAT credit account as the appellant continued to be in breach for the period till then. It is not recorded anywhere that the debit had ceased at any stage before surrender of the registration certificate in December 2010.
We are inclined to take note of the developments between the takeover of the undertaking in November 2008 leading to subsequent closure including addition in the ‘account current’ with no record of the same having been refunded to appellant thereafter. It would also appear that the plea of the appellant on incorrectness of demand under section 11A of Central Excise Act, 1944 beyond the normal period as well as the drawing of attention of central excise authorities to the deficiency in the returns had been ignored as is evident from the finding of the adjudicating authority that the memorandum of understanding (MoU) between the erstwhile management and the appellant, which was relevant, had not been furnished.
To remedy these deficiencies, it would be necessary for the adjudicating authority to take stock of these facts and circumstances noted supra, to enable which it would be appropriate to set aside the impugned order and remand the matter back to the adjudicating authority.
Appeal disposed off.
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2023 (1) TMI 1102
Principles of Natural Justice (Audi Alteram Partem) - rectification of mistake - whether in all cases where rectification of the Assessment Order is sought for under Section 84 of the Tamil Nadu Value Added Tax Act, 2006 is there a need for the Assessing Officer to provide an opportunity of hearing to the Dealer? - HELD THAT:- In the case of AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION VERSUS THE DESIGNATED AUTHORITY & ORS. [2011 (1) TMI 7 - SUPREME COURT], the 1st proviso to Section 84(1) of the Act, which makes it clear that only in cases, where the rectification which has an effect of enhancing the assessment or penalty, there is a statutory requirement for granting reasonable opportunity of hearing to the Dealer and not when the assessment has been confirmed. The application of the Principle of Audi Alteram Partem is a general principle, which will not apply to the cases, where there is no enhancement of assessment or penalty in an order passed under Section 84 of the Act is passed.
In the case on hand, the assessment or penalty has not been enhanced by the 1st respondent but the 1st respondent has only confirmed the earlier Assessment Order passed against the petitioner in the year 2016. Therefore, there is no necessity for the 1st respondent to afford an opportunity of hearing to the petitioner.
This Court does not find any infirmity in the impugned order - petition dismissed.
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2023 (1) TMI 1101
Disallowance of Input Tax Credit - failure to produce the relevant documents along with tax invoices despite notices - Section 100A(2) of the Delhi Value Added Tax Act, 2004 - HELD THAT:- According to the learned counsel for the appellant, provisions of Section 100A(2) of the Delhi Value Added Tax Act, 2004 do not support the stand of the respondent. He submits that although the electronic communications may not be required to be personally signed, in terms of Section 100A(2), the said communications must necessarily be authenticated by the digital signature of the concerned authority - The learned Tribunal did not decide the controversy, but remanded the matter to the learned OHA. This was, essentially, for the reason that one of the contentions advanced on behalf of the appellant was that the learned OHA had not put the issue of limitation to the appellant and therefore, the appellant did not have the opportunity to respond to the same.
There are no infirmity with the decision of the Tribunal in remanding the matter to the learned OHA. It would be apposite for the learned OHA, in the first instance, to decide the contentious issues, including the issue whether the notices were required to be digitally signed as contended by the petitioner - appeal dismissed.
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2023 (1) TMI 1100
Maintainability of petition - appeal provided against the reassessment order or not - Validity of re-assessment order - challenge on the ground of the same being invalid due to non-availment of an opportunity and the final hearing not being given despite the acknowledgment of the lock down due to the COVID-19 virus - whether the circumstances existed at the relevant point of time had actually made any breach of principle of natural justice?
HELD THAT:- Noticing the fact that the officer concerned had the statutory time limit to meet with as the same was expiring on 31.03.2020, although later on the period of limitation had also been extended by the Apex Court in its various orders, but, the officer can be given the benefit that at the time when he actually passed this order on 25.03.2020, he may not be aware of such developments. In fact, no one was aware of the seriousness of the entire issue. And, yet, the fact remains that the officer concerned, having taken a note of the fact that the request has been made by the petitioner to the Rajasthan Authority for issuance of Form-’F’, he has chosen not to accommodate the petitioner nor was he given an opportunity to tender the Form-F nor any opportunity of hearing was accorded. Therefore, this petition under Article 226 of the Constitution of India can be entertained bearing in mind the fact that this is a clear violation of principle of natural justice.
Availability of alternative remedy in the form of appeal this stage would not have served the purpose for this being a violation of the principle of natural justice. It was an unprecedented situation where people had suffered, no one was sure as what is going to be the future. In such circumstances, when peoples were struggling to save the human lives, the request for the petitioner to get the Form-F from the concerned authority was a mere impossibility, the opportunity shall need to be availed.
The reassessment order dated 25.03.2020 and the final notice of assessment are quashed and set aside with all consequential reliefs. The matter shall be taken up from the stage where it was left. The officer concerned shall avail an opportunity of hearing of the petitioner. The petitioner is permitted to file Form-’F’ or any other documents within a period of one week before the officer concerned, who will continue to hear the reassessment proceedings - this petition is allowed.
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2023 (1) TMI 1099
Assumption of jurisdiction by the A.O for framing of the assessment u/s. 143(3) - HELD THAT:- As in the case of the present assessee before us the impugned assessment had been framed by the ITO-1(1), Bhilai vide his order passed u/s.143(3) dated 29.12.2016 on the basis of a notice u/s. 143(2), dated 24.09.2015 that was issued by the DCIT-1(1), Bhilai, i.e., an A.O who at the relevant point of time was not vested with jurisdiction over the case of the assessee, therefore, the assessment so framed cannot be sustained and is liable to be struck down on the said count itself.
Apropos the notice issued u/s.143(2) of the Act, dated 05.05.2016 by the ITO-Ward 1(1), Bhilai, we are of the considered view that as the said notice was issued after the lapse of the stipulated time period, i.e., beyond the specified time frame which expired as on 30.09.2015, therefore, the assessment order so framed would also not be saved on the said basis. To sum up, as the impugned assessment u/s. 143(3), dated 29.12.2016 had been framed by the ITO- Ward 1(1), Bhilai de-hors the issuance of a valid notice u/s. 143(2) of the Act, therefore, the same cannot be sustained is liable to quashed. We, thus, in terms of our aforesaid observations quash the assessment framed by the A.O u/s.143(3), dated 29.12.2016 for want of valid assumption of jurisdiction on his part. Appeal of the assessee is allowed.
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2023 (1) TMI 1098
Seeking release of confiscated goods - whether the authority was justified in holding that the appellant is not the owner of the goods? - HELD THAT:- The appeal is disposed off with a direction to the appellant to file an application before the Deputy Commissioner of State Tax, Goods and Services Tax, Bureau of Investigation, South Bengal, Durgapur zone seeking relief under Section 129(1) (a) of the said Act and such application shall be filed within one week from the date of receipt of the server copy of this judgment and order. On receipt of the said application, the said authority shall independently consider such a prayer uninfluenced by any of the observations made in its order dated 12th December, 2022, which is subject matter of the writ petition and such order shall be passed within a period of 10 days from the date on which the application is filed by the appellant.
Appeal disposed off.
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2023 (1) TMI 1097
Maintainability of appeal - non-compliance with the requirement of pre-deposit - Attachment of Bank accounts of appellant - Initiation of garnishee proceedings - HELD THAT:- When the appeal was presented, the mandatory pre-deposit of 10% of the disputed tax has been complied with by the appellant. If that be so, no coercive action should be taken against the appellant till the appeal is heard and disposed of. In terms of the above direction, the appellant is granted liberty to file an appropriate interim application in the appeal petition and the appellate authority shall consider the same and pass appropriate orders for the purpose of lifting the garnishee order and the bank attachment. The appellant shall file the application in the statutory appeal not later than 10th February, 2023.
Appeal disposed off.
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2023 (1) TMI 1096
Seeking grant of Anticipatory Bail - It is submitted by learned counsel for the applicant that proceeding u/s 74 of CGST Act is still pending, he is cooperating with the investigation/enquiry and did not misuse the liberty of aforesaid interim anticipatory bail which was granted on 22.03.2021 by the Coordinate Bench of this Court.
HELD THAT:- Learned AGA for the State does not dispute the aforesaid factual aspect of the matter as argued on behalf of the appellant.
The aforesaid interim anticipatory bail order dated 22.03.2021 is made absolute till finalization of proceedings on the terms and conditions as indicated in the above order dated 22.03.2021 - the instant anticipatory bail application is allowed.
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2023 (1) TMI 1095
Maintainability of petition - availability of alternate efficacious remedy under Section 107 of the respective GST Enactment - Detention of goods alongwith vehicle - HELD THAT:- The petitioner claims to be a transporter who was transporting goods for a dealer from the Tiruppur District in Tamil Nadu to a recipient in Hyderabad, Telangana. The consignment of Ready-Made Textile/ Hosiery Garments were being transported by the appellant for an unknown consignor and consigneer whose name has been later given as Star Handlooms in the affidavit filed in support of the Writ petition. About 58 bundles of Textile/ Hosiery Garments were being transported by the appellant and that out of 58 bundles 33 did not accompany necessary documents including invoices. For the balance, it can be inferred there was only lorry receipts.
Under these circumstances, the lorry bearing registration number T.N. 39-Ck-5569 was detained by State Tax Officer (Intelligence), Roving Squad, Tiruppur on 4.3.2022 and that on the same day Form GST MOV-02[Order for Physical Verification/Inspection of the Conveyance, Goods and Documents] was issued to the driver in charge of the aforesaid vehicle and the aforesaid vehicle along with the consignments were detained.
There is an indication that 33 bundles accompanied lorry receipts without invoices under section 68(2) and for the balance 25 there were neither any invoices nor any lorry receipts. In the reply dated 15.03.2022 of the appellant also there was no clear explanation as to whether the appellant was carrying the goods for the said Star Handlooms of Tiruppur District or it was being transported by the appellant for itself. The only response of the appellant in its reply dated 15.3.2022 was that only two of the bundles would be valued at Rs. 20,000 each and that rest of the bundles the value would be between Rs.4,500 to Rs.5000 and not Rs.20,000 per bundle.
Whether the value of the 33 out of 58 seized goods/bundles were valued between Rs. 4500 -5000 per bundle or R.20,000/- cannot be determined in a writ proceedings based on the submission of the appellant. The owner i.e. either the consignor or consignee have also not come forward to claim the Bundles. Therefore, the order passed by the respondent State Tax Officer cannot be interfered by this Court. It cannot be construed that the value of two of the bundles out of 58 bundles alone were Rs.20,000 and that rest of them were only between Rs. 4500 -5000. There cannot be determination of the value n a writ proceeding.
Whether the value was Rs.4500 - 5000 is something which the appellant will have to establish only before the appellate authority under section 107 of the respective GST enactments in an appellate proceedings. If the appellant wishes to pursue the appellate remedy, the appellant will have to pay deposit 25% of the amount determined by the respondent State Tax Officer, Intelligence. This Court is not really concerned with the disputed questions of fact. It is for the appellant to establish the same before the Appellate Authority and the amount that may be pre-deposited can be either appropriated or refunded back subject to the out come of the appeal in the proposed appeal against the aforesaid order.
Writ petition dismissed.
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2023 (1) TMI 1094
Cancellation of the Registration Certificate of petitioner - failure to file Goods and Services Tax monthly returns for a continuous period of six months - HELD THAT:- In identical circumstances, this Court, in the case of TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST), THE ASSISTANT COMMISSIONER (CIRCLE), SALEM BAZAAR. [2022 (2) TMI 933 - MADRAS HIGH COURT] had held that The petitioners are directed to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid.
This Court has been consistently following the directions issued in the case of Tvl.Suguna Cutpiece Vs Appellate Deputy Commissioner (ST) (GST) and others and the Revenue/Department has also accepted the said view as evident from the fact that no appeal has been filed in any of the matters, this Court intends to follow the above order of this Court - Petition ordered.
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2023 (1) TMI 1093
Classification of supply of service - composite supply or not - activity of design and development of patterns used for manufacturing of camshaft for a customer - intermediary service or not - non-speaking order - violation of principles of natural justice.
Whether activity of appellant is an intermediary service as held by the MAAR or as contended by the appellant, an activity of design and development of patterns/tools used for manufacturing of camshafts, for a overseas customer is a composite supply where the principal supply is supply of services?
HELD THAT:- It is appellant who prepares the drawing and designs of tool / pattern and also check feasibility of its manufacturing. The techno commercial offer is being made by the appellant to overseas OEM / Machinist. Overseas OEM / Machinist releases the purchase order, for specific number of units of tools, after approval of techno commercial offer. The appellant undertakes in-house drawing, design, modelling, simulation and documentation for manufacture of the tools. Whereas, it hires third party vendor for machining (manufacturing) the tool as per specification provided by the appellant. The third party vendors charge for the manufacture of tools, which is paid by the appellant. The third party vendor delivers the tool to appellant, of which appellant further raises supply invoice to overseas OEMs / Machinist specifying therein the description of goods (tools), quantity, rate per unit, etc. However, as industry practice in this sector appellant keeps such tools with it for further use in manufacture of camshaft.
The invoice raised by the appellant also exhibits that the tools of specific designs as per the specifications of overseas customer are supplied to them. Thus, from perusal of the purchase order placed by the overseas customers and supply invoice raised by appellant, it is clear that dominant intention of overseas customer is to get the supply of manufactured pattern/tools from the appellant as per specification provided by them.
Thus, it is clear that the appellant is making such supply of tools on his own against the consideration which is price for tools and hence, there is no issue of receiving commission from overseas customers. Appellant is not facilitating any supply between overseas entity and third party vendor. The impugned transaction is supply of goods i.e. tools from appellant to customer on principal to principal basis. Considering these facts of and definition of “intermediary” provided under section 2(13) of the IGST Act, 2017, it is very much clear that appellant is not an “intermediary”. Hence, the findings of the MAAR that the impugned activity is an intermediary service is erroneous and not acceptable.
On careful perusal of the definition of the term “composite supply” and the essential conditions enumerated in the definition, it is seen that the composite supply comprising two or more taxable supplies of goods or services or both, or any combination thereof should be made by a taxable person to a recipient - However, in the instant case, considering the facts of the case, it is amply clear that impugned transaction between appellant and overseas customer is of supply of goods i.e. pattern/tool of specified specifications. Hence, contentions of the appellant that impugned transaction is composite supply where the principal supply is supply of services is not valid. In view of the above discussion, we hold that the impugned transaction is supply of goods i.e. pattern/tool of specified specifications.
Thus, the impugned transaction between appellant and overseas customer is supply of goods.
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2023 (1) TMI 1092
Classification of supply - zero-rated supply - supply of renting of immovable property services provided by the SEZ Authority - supply of any other services by the suppliers located in DTA to the SEZ unit - reverse charge mechanism - section 16(1) of the IGST Act, 2017 - HELD THAT:- On perusal of the provisions of the zero-rated supply under section 16(1) of the IGST Act, 2017, it is clear that any supply of goods or services or both made to a SEZ developer or SEZ unit for carrying out the authorised operation in SEZ will be considered as zero-rated supply. That is, the said supply will not attract any GST whatsoever. It is further mentioned here that this provisions of zero-rated supply will cover even the supply of services which are specified under the reverse charge Notification 10/2017-I.T. (Rate) dated 28.06.2017 as amended by Notification No. 03/2018, (Rate) dated 25.01.2018. This is so because it is the settled proposition of the law that the specific provisions made in the Act will have greater legal force than that of a notification issued under same or any other provisions of the same Act. Hence the provisions laid down under section 16(1) of the IGST Act, 2017 will supersede over the notification issued under section 5(3) of the IGST Act, 2017, which enumerates the services which attract GST under reverse charge basis. It is also pertinent to mention here that the said provision of section 16(1) ibid, merely mentions about the supply of goods or services or both to the SEZ developer or SEZ unit. The said provision does not mention any thing about the type of the supplier.
From the provisions of section 16 (1) and Section 5 (3) of IGST Act it is clear that the intention of the legislature is not to tax the supplies made to a unit in SEZ or a SEZ developer, which has been made zero rated under clause (b) of section 16 (1) of the IGST Act. 2017. By virtue of deeming provision under section 5 (3) of the IGST Act, 2017, the levy on procurement of services specified in Notification 13/2017 CT (Rate) falls upon the unit in SEZ or SEZ developer - The appellant will not be required to pay any GST under RCM on the impugned supply of renting of immovable property services received SEEPZ SEZ, if appellant furnishes LUT.
As regards any other services supplied by the DTA to the SEZ unit or developer, it is stated that the aforesaid principle will also be applicable in such cases. That is all the supply of services procured by SEZ unit from the suppliers located in DTA for carrying out the authorised operation in SEZ will not attract any GST in accordance with the provision of section 16(1) of the IGST Act, 2017, and the Appellant will not be required to pay any GST under RCM on the services received from DTA supplier for carrying out the authorized operation in SEZ, subject to LUT.
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2023 (1) TMI 1091
Transfer of Case / jurisdiction passed u/s 127 - Validity of Reopening of assessment notice - mandatory procedure to be followed u/s 127 by which the assessee is entitled to an opportunity of being heard before the assessment jurisdiction is transferred to the file of a different assessing officer - HELD THAT:- The language of Section 127 is clear that the assessee should be given a reasonable opportunity of being heard in the matter before the power under Section 127 of the Act is invoked. The statute is also clear that such opportunity of being heard is to be given wherever it is possible to do so. If the authority proposes to dispense with the opportunity of hearing, the statute states that reasons have to be recorded for not providing such an opportunity. On perusal of the order impugned in the writ petition dated 29th June, 2021, we find that no such reasons have been recorded by the authority for dispensing with the opportunity of personal hearing as no show cause notice was issued to the assessee prior to order of transfer.
In any event, the learned Single Bench was of the opinion that the appellant had made out a prima facie case for entertaining the writ petition. But, however, if the assessment proceedings are to be proceeded by the assessing authority at Kanpur, then the writ petition itself would become infructuous. In any event, we are of the view that since no reasons have been recorded by the authority for dispensing with the opportunity of being heard, we find that there are no such reasons to do so. Therefore, the authority is bound to issue notice to the appellant and afford them a reasonable opportunity of being heard before a decision is taken.
We are inclined to remand the matter back to the authority for a fresh decision. In the result, the appeal stands disposed of along with the writ petition by directing the appellant to treat the order passed by the Principal Commissioner of Income Tax-5, Kolkata dated 29th July, 2021 as a show cause notice and the appellant shall submit their objection within fifteen days from the date of receipt of the server copy of this judgment and order after which the Principal Commissioner of Income Tax shall afford an opportunity of hearing to the authorised representative of the assessee and pass a speaking order on merit and in accordance with law.
Consequent upon the order dated 29th July, 2021, the assessing authority in Kanpur has taken up the reassessment proceedings and has passed an order dated 30th July, 2022 under Section 148A(d) of the Act and also issued a notice under Section 148 dated 30th July, 2022.
The order passed under Section 148A(d) of the Act dated 30th July, 2022 and the notice issued under Section 148 dated 30th July, 2022 shall be kept in abeyance and shall abide by the fresh order that may be passed by the Principal Commissioner of Income Tax –5, Kolkata in terms of the above direction.
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2023 (1) TMI 1090
Condonation of delay in filling appeal before HC - present appeal filed after a delay of 109 days - only explanation provided for such delay that the delay of few days in filing the appeal is due to the administrative reasons beyond the control of the Appellant - HELD THAT:- We are unable to accept that the delay in filing the appeal can be condoned for the aforesaid reasons. It is settled law that each day of delay has to be explained. The appellant has not given sufficient explanation for the delay of 109 days. The fact that the appellant has casually termed the delay of 109 days as a delay of only of “few days” clearly indicates the lack of seriousness on the part of the Revenue in adhering to timeline stipulated under the Act. The application is accordingly dismissed.
Revision u/s 263 - As per CIT provisions of Section 56(2)(vii)(a) would be applicable and the assessee would be liable to pay tax on the difference between the consideration paid for the said shares and their Fair Market Value - HELD THAT:- MAT credit entitlement is not a marketable asset, and the question whether such entitlement should be included while computing the fair market value of shares of a company is debatable. More importantly, the learned ITAT found that the learned Commissioner was not justified in assuming jurisdiction on the ground that no enquiries had been conducted by the AO. AO had issued queries regarding investment in unlisted equity shares. The assessee had responded to the questionnaire and submitted various details including the details of the shares purchased; the entities from whom the shares were purchased; copies of the bank accounts evidencing payments of consideration; and, the computation of the book value of the shares amongst other details. AO had applied its mind to the said information and had framed the assessment. ITAT rightly held that this is not a case that no enquiry has been conducted by the AO. Accordingly, the learned ITAT set aside the order dated 31.03.2021, passed by the learned Commissioner. We find that no substantial question of law arises in the present appeal.
Maintainability of appeal on low tax effect - As appellant submits that since the Commissioner had set aside the assessment order with a direction to the assessee to make a fresh assessment, the tax effect could not be ascertained and the appeal was not covered under the Board Circulars issued in this regard. The said contention is unpersuasive. The orders passed under Section 263 of the Act are not excluded from the purview of the circular issued by the Central Board of Direct Taxes (CBDT) fixing the monetary limits for filing appeals. In the present case, although the Commissioner had remanded the matter to the AO, he had also broadly quantified the income, which, according to the Commissioner, had been under assessed. A meaningful reading of the order passed by the Commissioner under Section 263 of the Act clearly indicates that the net tax effect of setting aside the said order is far below the monetary limit specified by the CBDT.
We dismiss the present appeal on the ground that it is belated; the tax effect is below the monetary limit; and no substantial question of law arises in the present appeal.
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2023 (1) TMI 1089
TP Adjustment - comparable selection - exclusion of Motilal Oswal Advisors India Pvt. Ltd (MOIALP) and the inclusion of IDC India Limited (IDCL) and ICRA Management Consulting Services Ltd (ICRA) as comparables for benchmarking of Arms Length Price (ALP) of investment advisory services rendered by the Respondent - HELD THAT:- Admittedly, the Respondent-assessee is engaged in the business of non-binding investment advisory services as against Motilal Oswal Advisors India Pvt. Ltd, which is engaged in merchant banking, securities brokering and other IT-enabled services. DRP held that Motilal Oswal Advisors India Pvt. Ltd (MOIALP) be taken out from the list of valid comparables. In regard to ICRA Management Consultancy Services (ICRA) and IDC India Limited (IDCL), DRP held that the functions performed by ICRA were different from the functions carried out by the Petitioner and ICRA was providing consultancy services and was engaged in management consultancy and therefore, could not be considered as comparable.
As regards IDCL, it was held that the same was not engaged in activities of providing investment advisory services and was functionally different from the functions of the assessee. The Tribunal, however, placed reliance upon AGM India Advisors Pvt. Ltd. [2020 (6) TMI 300 - BOMBAY HIGH COURT] wherein it was held that ICRA and IDC were functionally similar to that of the Petitioner in the said Petition as it was providing non-binding investment advisory services.
Insofar as Motilal Oswal Advisors India Pvt. Ltd. (MOIALP) is concerned, it has already been held to be not comparable in the case of the assessee itself, in Income Tax Appeal No.30 of 2017, decided 10 June 2019, wherein it has been held that the said company was engaged in merchant banking and registered and established as merchant banker. This view has also been taken in Principal Commissioner of Income Tax Vs. NVP Venture Capital India (P) Ltd. [2018 (9) TMI 1182 - BOMBAY HIGH COURT]
Be that as it may, the questions A, B and C as suggested do not give rise to any substantial questions of law.
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2023 (1) TMI 1088
Deduction u/s 80P - investments made in TIDCO and TNEB Bonds - case of the appellant that Section 80P(2)(a)(i) of the Act does not limit or confine the benefit of deduction only in respect of investments made in SLR - Non SLR investment would have to be tested on the basis of Section 80(2)(d) - whether the benefit under Section 80P(2)(a)(i) is available only in respect of SLR investments and not to non- SLR investments? - HELD THAT:- It has been consistently held by various Courts that as long as it is Banking Business, the investment, whether it is SLR or non SLR may not make a difference - We are informed that there is no contrary view expressed in respect of the above issue.
Yet another reason why we would think that the assessee must succeed is in view of the fact that Income Tax Act, being a Central Enactment, though normally, decisions rendered by other Courts would have persuasive value, in the case of Central Enactment, an attempt must be made not to depart from the view taken by other Courts unless there are sound and compelling reasons for consistency in taxing enactments is important. We do not find any compelling reason, for this Court to deviate from the views taken by other Courts.
Reference made to Section 80P(2)(4) by the learned counsel for the Revenue may not have any bearing for the assessment year 2005-06 and 2006-07 for the above provision was made effective only from 01.04.2007. It is a cardinal principle of construction that every statute is prospective unless it is expressly or by necessary implication made to have retrospective operation [Keshvan vs. State of Bombay [1951 (1) TMI 32 - SUPREME COURT] - This presumption of prospectivity of any law is articulated in the following legal maxim viz., nova constitutio futuris formam imponere debet non praeteritis (A new law ought to regulate what is to follow, not the past). The above maxim has been quoted with approval repeatedly by Indian Courts.
Thus the benefit under Section 80P(2)(a)(i) is available to both SLR and non-SLR investments as long as it constitutes “Banking Business". Decided in favour of assessee.
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2023 (1) TMI 1087
Accrual of interest income - Real income received / receivable by the company on inter corporate deposit - Assessment u/s 143 - real income or hypothetical income - Assessee claims that no real income accrued to the company and merely as the assessee is following mercantile system of accounting it does not result in accrual of income from interest when there is no interest in real terms and the statement of the accounts of the assessee also did not reflect any credit entry in respect of interest receipt from the borrower - HELD THAT:- Tax Authorities below have failed to keep in mind the fundamental principles of taxation that only real income should be taxed and not the hypothetical income. What the Ld. Tax Authorities below have considered to be income arising from interest to be taxable on accrual basis would be a case where interest account is not settled, however when the loan account and interest account stand settled between the parties and a deed of settlement stands then on the basis of accrual interest income cannot be attributed and only the actual interest received on that account, was liable to be shown in P& L account. As rightly done by the assessee company.
The assessee being in the business of lending, if had borrowed any amount on interest that is not of much consequence in the present facts and circumstances as being watchful of it’s business interest and to secure the principal amount at least, the assessee gave up the claim of interest income. There is no allegation of untoward benefit to the borrower as the two entities were not known to each other.
There is also force in the contention of assessee that in any case, if shortfall in interest is adjusted from principal amount on principle of first appropriation towards interest before applying it to principal. Then being in lending business, the shortage towards principal would be allowable as bad debt. Which assessee prevented. Being in lending business the bad debt ratio is crucial to the assessee and thus business expediency cannot be more justified then here. - Decided in favour of the assessee.
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