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2024 (8) TMI 1204
CENVAT Credit - invoices issued before the introduction of time limit for credit availment - HELD THAT:- Admittedly for two invoices issued on 28.06.2014 and 01.07.2014 credit of ₹13,59,600/- each was taken by the Appellant, as revealed from the show-cause notice. These invoices would go to show that by the time N/N. 21/2014-CE (NT) was brought into force on 01.09.2014, the said period of six months was not over but because of the fact that during those period no specific time limit was prescribed to avail the credit, denial of the same credit for the invoice issued prior to the effective date would naturally be in violation of the statutory provision contained in Section 38A of the Central Excise Act, 1944.
To bring more clarity to the issue the same can be explained by placing an example that instead of invoice being issued on 01.07.2014, had it been issued on 07.01.2014, period of six months would have expired by the time N/N. 21/2014-CE (NT) was brought into force on 01.09.2014. It is apparently for this reason that consistent decision is passed by this Tribunal that the same N/N. 21/2014-CE (NT) is applicable to the invoices issued post N/N. 21/2014-CE (NT) - the Appellant having availed credit on these two invoices on 31.01.2015, since within six months of 01.09.2014, is entitled to the credits availed by it.
The order passed by the Commissioner of CGST & Central Excise (Appeals), Nashik is hereby set aside - Appeal allowed.
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2024 (8) TMI 1203
100% EOU - refund of accumulated CENVAT Credit - refund claim rejected because the Respondent has not complied with the conditions prescribed in Notification No. 5/2006-CE(NT) dated 14.03.2006 issued under Rule 5 of Cenvat Credit Rules, 2004 - Applicability of National Litigation Policy - HELD THAT:- As per the submission of the learned Counsel for the Respondent, the amount of refund involved in the present appeal is totally amounting to Rs.48,38,722/- is below the monetary limit as prescribed under instructions dated 22.08.2019 issued by the CBIC; whereas the submission of the learned AR for the Revenue is that the Department has challenged the entire impugned order and therefore, the case is not covered under National Litigation Policy. After considering the submissions of both the parties, it is decided to decide the present appeal against the impugned order in its entirety without going into the question of National Litigation Policy.
The terms of ‘input service’ as defined under Rule 2(l) of the Cenvat Credit Rules, 2004 uses terms ‘means’ and ‘includes’ in the definition. First leg of the definition i.e. the 'means' portion would cover every service used directly or indirectly, in or in relation to manufacture of final products and clearance of final products from the place of removal and the 'inclusive’ part is illustrative and certainly is not exhaustive.
Each of the input service involved in the present case has been held to be ‘input service’ in view of the various decisions relied upon by the Respondent - the eligibility of Cenvat Credit cannot be questioned in refund proceedings in view of the decision in the case of COMMISSIONER, SERVICE TAX COMMISSIONERATE VERSUS M/S HCL COMNET SYSTEM & SERVICES LTD., NOIDA [2017 (12) TMI 1661 - ALLAHABAD HIGH COURT].
As regards the refund in respect of the invoices addressed to the corporate office at Gurgaon instead of manufacturing premises, it is found that it is only a technical lapse and substantive benefits cannot be denied for procedural irregularities.
There is no infirmity in the impugned, the same is upheld - appeal of Revenue dismissed.
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2024 (8) TMI 1202
Denial of CENVAT credit under Rule 14 of Cenvat Credit Rules, 2004 with proposal to impose penalties and recover interest - denial on the ground that input service invoices did not have registration number of service provider - HELD THAT:- In respect of cenvat credit of Rs.26,445/- there are allegations that registration number of service provider is not available. It is noted that there are no allegations that the services provided through the said invoices were not received by the appellant nor there are allegations that the said services did not suffer service tax. It is, therefore, held that the appellant was eligible for cenvat credit of Rs.26,445/-.
It is further found that cenvat credit of Rs.60,776/- was denied to the appellant on the ground that the invoices were having the address of office and not that of factory - there are plethora of judgments of this Tribunal and higher courts that on such ground, cenvat credit cannot be denied so long as there are no allegations that the services or the goods were not received in the factory and the goods and services did not suffer service tax or central excise duty, as the case may be. In the present case, I find that there are no allegations that the goods and services did not suffer tax or duty. Therefore, the appellant was eligible to avail cenvat credit of Rs.60,776/-.
CENVAT credit of Rs.4,68,680/- was availed of service tax paid on rent paid by the appellant after the year 2001 when they made application for inclusion of additional premises into the approved plan of the factory - the appellant was eligible for cenvat credit of Rs.4,68,680/-.
It is further noted that the disputed cenvat credit of Rs.1,24,044/- also involved service tax or central excise duty on MS angles and electrodes. It is noted that learned AR has relied on ruling by Hon’ble Bombay High Court in the case of MANIKGARH CEMENT VERSUS COMMISSIONER OF CUS. & C. EX., NAGPUR [2017 (7) TMI 1117 - BOMBAY HIGH COURT] wherein in the year 2018, it was held that central excise duty paid on welding electrodes used for repair and maintenance of plant and machinery is not admissible for availment of cenvat credit - the appellant was eligible for cenvat credit of Rs.1,24,044/-.
Thus, the appellant was eligible for cenvat credit of Rs.26,445/-, Rs.60,776/-, Rs.4,68,680/- and Rs.1,24,044/- - appeal allowed.
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2024 (8) TMI 1201
Recovery of dues - priority of dues - Petitioner-Bank's registered security interest with CERSAI has priority over the dues claimed by the GST and Sales Tax Departments or not - HELD THAT:- In the present case, the order of attachment issued by the Sales Tax Department is dated 19th April 2022. It is thereafter that steps have been taken to attach the immovable property. It is on this basis that the respondents seek to rely upon the provisions of Section 37 of MVAT Act.
The registration of the Bank Security Interest with CERSAI is dated 17th March 2017 which is much prior to the order of attachment. In view of the clear position of law under Section 26-E of the SARFAESI Act and further the ratio as laid down by the Full Bench of this Court in Jalgaon Janta Sahakari Bank Ltd. and another [2022 (9) TMI 163 - BOMBAY HIGH COURT] and the judgment of the Division Bench of this Court in Indian Bank thr. Chief Manager [2024 (7) TMI 1309 - BOMBAY HIGH COURT], there are no hesitation to hold that the claim of secured creditor that is the Petitioner – Bank, will have preference over the claim of Respondents (GST Department and the Sales Tax Department).
Petition allowed.
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2024 (8) TMI 1200
Criminal breach of trust - Quashing of summoning order - offence punishable under Sections 406, 420 & 120B respectively of the Indian Penal Code, 1860 - Vicarious liability of the office bearers - non-application of mind - HELD THAT:- The impugned order passed by the High Court is a fine specimen of total nonapplication of mind. Although the complaint was filed for the offence punishable under Sections 406, 420 and 120B respectively of the IPC yet the Additional Chief Judicial Magistrate thought fit to take cognizance and issue process only for the offence of criminal breach of trust as defined under Section 405 of the IPC and made punishable under Section 406 of the IPC - even if the entire case of the complainant is accepted as true no offence worth the name is disclosed.
Where a jurisdiction is exercised on a complaint petition filed in terms of Section 156(3) or Section 200 of the CrPC, the Magistrate is required to apply his mind. The Penal Code does not contain any provision for attaching vicarious liability on the part of the appellant Nos. 2 and 3 respectively herein who are none other than office bearers of the appellant No. 1 Company. When the appellant No. 1 is the Company and it is alleged that the company has committed the offence then there is no question of attributing vicarious liability to the office bearers of the Company so far as the offence of cheating or criminal breach of trust is concerned - Vicarious liability of the office bearers would arise provided any provision exists in that behalf in the statute. Statutes indisputably must contain provision fixing such vicarious liabilities. Even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability.
Every act of breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of manipulating act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person may seek his remedy for damages in civil courts but, any breach of trust with a mens rea, gives rise to a criminal prosecution as well - The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed.
There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e., since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously.
There is no manner of any doubt whatsoever that in case of sale of goods, the property passes to the purchaser from the seller when the goods are delivered. Once the property in the goods passes to the purchaser, it cannot be said that the purchaser was entrusted with the property of the seller. Without entrustment of property, there cannot be any criminal breach of trust. Thus, prosecution of cases on charge of criminal breach of trust, for failure to pay the consideration amount in case of sale of goods is flawed to the core. There can be civil remedy for the non-payment of the consideration amount, but no criminal case will be maintainable for it.
The magistrate must carefully apply its mind to ascertain whether the allegations, as stated, genuinely constitute these specific offences. In contrast, when a case arises from a FIR, this responsibility is of the police – to thoroughly ascertain whether the allegations levelled by the informant indeed falls under the category of cheating or criminal breach of trust. Unfortunately, it has become a common practice for the police officers to routinely and mechanically proceed to register an FIR for both the offences i.e. criminal breach of trust and cheating on a mere allegation of some dishonesty or fraud, without any proper application of mind.
The impugned order passed by the High Court is set aside so also the order passed by the Additional Chief Judicial Magistrate, Khurja, Bulandshahar taking cognizance upon the complaint - Appeal allowed.
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2024 (8) TMI 1199
Violation of principles of natural justice - the impugned order came to be passed by the respondent without providing any opportunity of personal hearing to the petitioner. Hence, this petition has been filed - HELD THAT:- In the present case, it appears that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice and it is just and necessary to provide an opportunity to the petitioner to establish their case on merits. In such view of the matter, this Court is inclined to set aside the impugned order dated 28.03.2024 passed by the respondent.
The impugned order dated 28.03.2024 is set aside and the matter is remanded to the respondent for fresh consideration on condition that the petitioner shall pay 10% of disputed amount to the respondent within a period of four weeks from today (22.08.2024) and the setting aside of the impugned order will take effect from the date of payment of the said amount - Petition disposed off.
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2024 (8) TMI 1198
Maintainability of petition - whether this Court should at all entertain the instant writ petition taking into account that an efficacious alternative remedy is available? - HELD THAT:- This Court finds it very pertinent to take note of a recent judgment of the Supreme Court in the case of PHR INVENT EDUCATIONAL SOCIETY VERSUS UCO BANK AND OTHERS [2024 (4) TMI 466 - SUPREME COURT (LB)] where it would be seen that the High Court should not ordinarily entertain a writ petition under Article 226 of the Constitution, if an effective remedy is available to the aggrieved person. The Supreme Court further emphasized that this Rule should be applied with great rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. It was further observed that though the powers under Article 226 of the Constitution are of widest amplitude, still the courts cannot be oblivious of the rules of self-imposed restraint evolved.
Let this Court take note of the case made out by the petitioner. From the facts narrated above, it would be seen that the petitioner received the show cause notice dated 22.10.2021, but the petitioner did not take that opportunity of submitting a reply. It is further seen that the petitioner was duly given the opportunity of personal hearing, however, the petitioner did not avail such opportunity. Under such circumstances, the question of violation of the principles of natural justice do not arise. In addition to that, the other parameters where the writ petition can be entertained is not met in the instant proceedings.
This Court is not inclined to entertain the writ petition. It is, however, made clear that the dismissal of the instant writ petition shall not prejudice the petitioner, if any appeal is filed.
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2024 (8) TMI 1197
Refund of certain unutilized CENVAT credit - HELD THAT:- The petitioner, opted to try his luck by filing a fresh TRAN-1 form seeking transition of CENVAT credit which had not been refunded on account of the above orders. This application of the petitioner was rejected by the Deputy Commissioner on 27.02.2023. The application of the petitioner was rejected on the ground that the said application is covered by instruction No.4.7 of the aforesaid circular and as such the request of the petitioner for transitioning further credit is not permissible - A reading of this provision would make it clear that this provision stipulates that if a request made, under TRAN-I/TRAN-2, in the earlier period had been rejected, the same cannot be reiterated under the second chance given by the Hon’ble Supreme Court. In such circumstances the only option available to the person making such an application is to file an appeal against the earlier order of rejection of transition. In the present case, the rejection order was passed under the CENVAT regime itself and it is not an order of rejection of TRAN-1/TRAN-2.
In the event, the impugned order dated 27.02.2023 in DIN3718012392140 and DIN3718012314992 is set aside, remanding the matter back to the Deputy Commissioner to consider the matter afresh. Needless to say, the Deputy Commissioner shall give adequate opportunity to the petitioner to set out its case and also to reply to any issues raised by the Deputy Commissioner - Petition allowed.
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2024 (8) TMI 1196
Challenge to order passed on remand under Section 73 of the WBGST/CGST Act 2017 - HELD THAT:- Having heard the learned advocates appearing for the respective parties and taking note of the factum of payment made by the petitioners in Form GST DRC – 03 dated 29th July, 2024 and the amendment to the CGST Act, 2017, inter alia, including the insertion of Section 128A(1), 128A(1)(b), and the recommendations made in the 53rd GST Council Meeting, the matter requires reconsideration by the respondent no. 1.
In view thereof, while remanding the matter back to the respondent no. 1, I direct the respondent no. 1 to reconsider the aforesaid issue and to pass a fresh reasoned order - Petition disposed off by way of remand.
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2024 (8) TMI 1195
Violation of principles of natural justice - impugned order has been passed 24.01.2024 even before the period of 30 days (SCN had granted 30 days time to the petitioner to respond) had elapsed - HELD THAT:- In the present case, the notice was issued on 26.12.2023 granting 30 days time. The impugned assessment order has been passed even before the said period has been elapsed. The petitioner was entitled to gather all the material required for his defense. This would mean that the petitioner would have to be given access to the website of the department, after restoration of registration, with adequate time being given to the petitioner to gather all the details such as e-way bills, e-invoices, etc. In the present case, such an opportunity was not given to the petitioner as the appellate authority’s order, restoring registration, was passed on 22.01.2024 and the impugned order has been passed on 24.01.2024.
This Court is of the opinion that there has been violation of principles of natural justice rendering the impugned order invalid - Petition allowed.
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2024 (8) TMI 1194
Rejection of petitioner’s application for the cancellation of his GST registration - vague SCN - although the impugned SCN called the petitioner to appear for a personal hearing, but no date and time was communicated for the same - Violation of principles of natural justice - HELD THAT:- As is apparent from the tenor of the impugned SCN, it is cryptic and does not contain any specific details of the allegations. It merely refers to the statutory provision – Rule 21 (e) of the Central Goods and Services Tax Rules, 2017 – without providing any clue as to any transaction alleged to have resulted in wrongful availment of the Input Tax Credit (ITC). The purpose of issuing a show cause notice is to enable the notice to respond to the allegation on the basis of which an adverse action is proposed. It is a fundamental principle of natural justice that a person must not be condemned unheard. He must have an opportunity to meet the allegations as set out against him. The impugned SCN fails to satisfy the requisite standard of such a notice.
The impugned SCN does not propose for the cancellation of the petitioner’s GST registration with retrospective effect. Thus, the petitioner had no opportunity to contest pursuant to the passing of any such order. Thus, on this ground alone, the impugned cancellation order is liable to be set aside. Additionally, the petitioner was not provided any opportunity to be heard as no date or time for the personal hearing was communicated to the petitioner.
It is apparent that the impugned cancellation order has been passed in violation of the principles of natural justice. However, since the petitioner also seeks for the cancellation of his GST registration, it is considered apposite to direct that the impugned cancellation order shall be operative prospectively, that is, from 09.06.2023 being the date of the impugned SCN, and not retrospectively from 01.07.2017.
Petition disposed off.
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2024 (8) TMI 1193
Review petition under Order XLVII Rule 1 read with Section 151 of the Code of Civil Procedure, 1908 - Refusal of refund of ITC - application for review of the order filed mainly on the ground of mistake or error apparent on the face of the record for want of consideration of facts and judgments placed on record - HELD THAT:- The review-petitioner has never disputed that the order impugned in the writ petition dated 31.10.2023 passed by Addl. Commissioner of State Tax(Appeal), Balasore under Annexure-9 is an appealable one before GST, Tribunal, but admittedly such GST, Tribunal has not been made functional and, thereby, this Court in M/S. Maa Tarini Traders (supra) has provided protection by way of granting stay of recovery of disputed amount subject to deposit of 20% of the remaining tax amount in dispute, besides, providing protection for filing of appeal, once the GST, Tribunal is constituted and made functional.
The petitioner cannot claim any prejudice in the matter, since the order sought to be reviewed has been passed by this Court on the consent of the parties which is clearly reflected from the sentence “It is agreed by the parties”, in the very first line of the order passed in the writ.
Reliance placed upon the decision of Bombay High Court in Principal Global Services Pvt. Ltd. v. The State of Maharashtra and others [2023 (4) TMI 69 - BOMBAY HIGH COURT] in support of his contention for review of the impugned order, but although the petitioner claims for review of the order on the ground of mistake or error apparent on the face of record, however, the decision relied on by the petitioner reveals about review of order for some typographical error as revealed in paragraph-7 of the relied on decision.
On a careful scrutiny of the entire averments of the review petition together with the admitted facts of the case, this Court does not find any ground as permissible under law to review the impugned order. Consequently, no ground for review of the impugned order having made out by the petitioner, the present review petition lacks merit and is liable to be dismissed.
The review petition being devoid of merit stands dismissed on contest, but in the circumstance, no order as to costs.
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2024 (8) TMI 1192
Suspension of GST officer / Tax Officer - Challenge to suspension order based on allegations of issuing registration without proper verification - registration issued to Prabhat Singh without verifying the report submitted by the State Tax Officer who conducted the field survey - HELD THAT:- The order of suspension cannot be revoked, and if the petitioner is allowed to join duty, he may tamper with material evidence. Therefore, this Court finds no infirmity or illegality in the order passed by the second respondent.
The respondents are directed to complete the disciplinary proceedings against the petitioner within a period of six months from the date of receipt of a copy of this order - Petition dismissed.
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2024 (8) TMI 1191
Grant of bail - creating fake companies/ firms and appointing their Directors/ Partners/ Proprietors, who is further involved in passing on the inadmissible Input Tax Credit - illegal passing of inadmissible Input Tax Credit of Goods and Services Tax - HELD THAT:- It is evident that Sumit Gupta without knowledge of so-called directors, proprietors and other staff of company had used to pass inadmissible and indelible input tax credit to various firms without supply of underlying goods/ services. The irregular input tax credit on the basis of invoices were issued by fictious/ fake suppliers without actual supply of goods for services, leading to the wrongful availment or utilization of input tax credit and passing thereof which resulted in huge loss in revenue to the government.
Even an ordinary person of country is paying CGST & SGST of central and state government for the building and development of nation and state but the persons like petitioner who is white-collar criminals impede and obstruct the development of nation and state as well by creating fake and bogus firm committing forgery in well planned manner in cool calculation and dishonest design with a vulture eye on personal profit causing huge loss of public funds, affects economy of nation and state, should be dealt with different approach to send the eye opening message to such white-collar criminals of society.
The Hon’ble Apex Court in the case of Y.S. Jagan Mohan Reddy Vs. CBI [2013 (5) TMI 896 - SUPREME COURT] held that 'Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deeprooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.'
In view of the allegations made in the complaint, verified materials on record and also taking into consideration the cognizance order dated 04.06.2024 passed by the learned Presiding Officer, Special Court Economic Offences, Jamshedpur, whereby the cognizance has been taken against the petitioner for the offences under Sections 132 (1) (i) to (iv) read with 132 (4) and (5) of the CGST Act, 2017 as well as under Sections 201 (Part-3), 204, 420, 465, 467, 468 and 471 of the Indian Penal Code, 1860, the petitioner is not entitled for bail. Accordingly, the bail application of the petitioner is, hereby, rejected.
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2024 (8) TMI 1190
TDS u/s 194H - Discount offered by the appellant on sale of Prepaid SIM cards and Recharge coupons - relationship between appellant and its distributors was not that of a ‘Principal to Principal', but only a 'Principal-Agent relationship' - As decided by HC [2024 (1) TMI 1312 - TELANGANA HIGH COURT] Section 194H is applicable in respect of amounts paid to the agents in connection with sale of SIM cards and other services is adaptable
HELD THAT:- The issue in this case is squarely covered by the decision of this Court in Bharti Cellular Limited (now Bharti Airtel Limited) v. Assistant Commissioner of Income Tax, Circle 57, Kolkata & Anr [2024 (3) TMI 41 - SUPREME COURT].
Thus, the present appeals are allowed, and the impugned judgment(s) is set aside by holding that the parties will be bound by the decision in Bharti Cellular Limited (now Bharti Airtel Limited).
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2024 (8) TMI 1189
Validity of Reassessment proceedings - reason to believe - whether any reasonable person could form a belief that income had escaped assessment and that would be adequate to reopen the assessment? - information was the receipt of information from the Deputy Director of Income-tax (Investigation), Mumbai that stock brokers had misused client code modification facility and created fictitious profits and losses to benefit their clients - failure to disclose material facts or not? - HELD THAT:- It is a matter of public knowledge that client codes entered by a stock broker at the time of execution of the trades are permitted to be modified within a stipulated time after execution, if the stock broker finds that there had been any error in entering the correct client code. In the instant case, there is nothing to show whether such modification had been effected by the stock broker to deal with his errors in execution or whether the modification was effected under instructions of the Petitioner.
Besides, every transaction executed under the Petitioner’s client code and thereby captured in his books of accounts have been subjected to scrutiny assessment. If someone else’s client code had been entered by the stock broker and that had been changed to the Petitioner’s client code, the transaction would get captured in the Petitioner’s books and would be part of the material scrutinized.
If it is the Petitioner’s client code that had been originally entered by the stock broker, leading to it being modified after execution, it would have no bearing on the income of the Petitioner, since it would be the person whose client code was entered upon modification, whose taxation would be impacted. Therefore, without any basis to show that there had been a failure on the Petitioner’s part in making a full and truthful disclosure of material facts, the very jurisdiction to initiate reassessment as provided for in Section 147 would not be attracted.
It is because the Revenue cannot demonstrate a failure on the part of the Petitioner to make full and truthful disclosure of facts in his possession, that its stance has been moulded to state that such demonstration is not necessary, and it would suffice if the Revenue formulates a “reason to believe” that income has escaped assessment. We are afraid that we cannot agree to such a proposition, which would require ignoring the explicit provisions of Section 147 and supplanting it with a new formulation as is being canvassed by the Revenue.
Section 147 explicitly stipulates the grounds on which, and the framework within which, such reassessment may be initiated. The Revenue has invoked the first proviso to Section 147(1) in order to initiate the reassessment. An essential ingredient of the first proviso is that no action for reassessment can be taken after the expiry four years from the end of the relevant assessment year, unless the income escaping assessment has been caused by the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. That vital element is sorely missing in the instant case.
It was the Petitioner who had failed to disclose any material fact fully and truly, there is no scope for initiating reassessment. Consequently, this Writ Petition deserves to be allowed, quashing the proposed reassessment. Decided in favour of assessee.
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2024 (8) TMI 1188
Reopening of assessment beyond period of limitation - Section 148 notice was issued on 25 July, 2022, which is almost two years after the limitation period had expired on 31 March, 2020, which was further extended upto 31 March, 2021 because of the notification issued as a result of Covid-19 pandemic.
HELD THAT:- The period of six years relevant to the assessment year 2013-14 expired on 31 March, 2020. Thus, the amendment as incorporated in Section 149 (1) (b) was not applicable for the re-opening/reassessment in question, which was for the assessment year 2013-14. It appears that overlooking such position, the Assessing officer, under the presumption that the amendment to the said provision as incorporated by Finance Act, 2022 with effect from 1 April, 2022 had become applicable to the facts in hand, i.e., A.Y. 2013-14, issued notice under section 148 dated 25 July, 2022 inter alia considering the decision of Supreme Court in Union of India vs. Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT].
Being a jurisdictional issue, looked from any angle, the notice dated 25 July, 2022 under Section 148 of the Act could not have been issued for the assessment year 2013-14. It is on such notice, the assessment order dated 26 May, 2023 has been passed. We may observe that this is clearly a case where the Assessing Officer has proceeded without jurisdiction and possibly applying the amended provisions of Section 149 as incorporated by the Finance Act to the case in hand when he issued notice dated 25 July, 2022 overlooking the fact that in the present case as the law would stand, the limitation had already expired and within the extended period of limitation as noted by us herein. Thus, once the notice itself was inherently without jurisdiction, the order passed on such notice although was passed without granting hearing to the petitioner, would obviously be rendered illegal.
Thus applying the principles as laid down in New India Assurance Co. Ltd. [2024 (1) TMI 803 - BOMBAY HIGH COURT] there is no manner of doubt that the petition would be required to be allowed.
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2024 (8) TMI 1187
Assessment order passed beyond period of limitation - difference in the liability towards sundry creditors - HELD THAT:- Prima facie, it cannot be construed that the impugned Assessment Order was passed after 30.09.2021 as there is a presumption that the order would have passed on the said date. It is also stands confirmed that the order was emailed to the petitioner on the following date i.e., on 01.10.2021 as is evident from Page No.188 of the Typed Set of Papers.
The order copy was also dispatched physically to the petitioner on 04.10.2021 and received by the petitioner on 05.10.2021. Therefore, it cannot be said/held that the assessment that was completed vide impugned Assessment Order dated 30.09.2021 was time barred.
Also evident that the explanation of the petitioner in petitioner's representation dated 29.09.2021 has not been considered.
The assessment has been completed in a hurry as otherwise the assessment would have got time barred after 30.09.2021. Therefore, neither the petitioner nor the respondents can be found fault on account of the limitation, which would operate against the respondents.
To balance the interest of the parties, we set aside the impugned Assessment Order dated 30.09.2021 and remit the case back to the respondents to pass orders on merits, within a period of six months from the date of receipt of a copy of this order.
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2024 (8) TMI 1186
Validity of Reopening of assessment - validity of approval granted by the Joint Commissioner u/s 151 - HELD THAT:- As the facts stand, leading to the impugned reassessment order, it is quite clear that such order was passed on the basis of reasons which were furnished to the Petitioner under a notice issued u/s 143 (2) r.w.s. 147, and to which objections were raised by the Petitioner vide reply dated 15 October, 2021 which were not disposed of by passing a speaking order. Thus, as observed hereinabove, the case is clearly hit by the principles of law as laid down in the case of GKN Driveshafts (India) Ltd. [2002 (11) TMI 7 - SUPREME COURT] and on this basic issue, the impugned order will be required to be quashed and set aside.
We also cannot countenance an argument as urged on behalf of the department that sanctity should be attributed to the fresh reasons which form part of the approval granted by the Joint Commissioner u/s 151 and which now ought to be considered as the appropriate reasons.
Such a plea cannot be taken after the assessment order is already passed. In our opinion, it is not permissible for the Respondents-Revenue to raise such contentions as this will be completely contrary to the well settled principles of law and the sanctity of the procedure u/s 148 as it stood applicable for the assessment year in question We therefore reject the case of the Respondents-Revenue in this regard that now the Petitioner needs to respond to the reasons which form part of the approval granted u/s 151 and that too without the same being issued to the petitioner in a manner known to the law by the AO
This is a clear case where the AO in fact has adopted different approaches, firstly, in furnishing different reasons to the assessee than what was placed before the Joint Commissioner. Things did not stop here, the AO thereafter decided to proceed in breach of the law, as if he was not aware about the rules which are required to be followed by him, namely, that once he had furnished reasons and to which objections were raised by the Petitioner, as a mandate of law, he was required to pass a speaking order disposing of the objections.
He failed to pass such order and nonetheless he proceeded to pass the impugned assessment order. It appears to us that the AO was quite aware that the assessment order when looked from any angle, was illegal and could be set aside by the Court.
AO permitting this to happen, as an eye wash the AO purports to take a plea that the reasons as set out before the Joint Commissioner be now set up as a defence to the present proceedings knowing well that referring to such reasons would be an untenable argument.
AO in the present case has acted against the interest of the Revenue, and all of his actions has in fact helped the assessee in the present proceedings. This inasmuch as if the AO was to follow the correct path as per the record and if he was to be right, income of such large amount would not have escaped assessment.
AO however, maintained technical defects which appears to be quite a conscious attempt. He has failed to diligently discharge his official duties, expected from him in law.
We don’t know what happens to such officers and whether any action is taken against such Officers in such cases questioning their performance and more particularly when they are responsible to deal with such large amounts of revenue, being not brought to tax, and as to whether any performance audit, vigilance or enquiry is conducted against such Officers and their actions in respect of several assessees is subjected to any scrutiny by the concerned Principal Commissioner of Income-tax under whose jurisdiction, such AO discharges their duties.
The assessee in our opinion is correct in questioning the actions of the department that these are flawed, however, whether the AO ought to have been so reckless is the issue, which is an issue which the high officials of the department need to ponder on.
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2024 (8) TMI 1185
Denial of credit of TDS - AR submitted that the assessee is only a commission agent and therefore the total gross sale proceeds cannot be treated as the income of the assessee and thereby the Ld. Revenue Authorities have erred in applying the Rule-37BA - As reiterated that since the assessee is only a commission agent, the assessee is eligible to get credit of the entire amount deducted as tax at source u/s. 194Q
HELD THAT:- As through the CBDT Circular No. 452, dated 17th March, 1986 relied on by the Ld. AR and perused the decision of this Tribunal in the case of Yagneswari General Traders [2024 (3) TMI 1344 - ITAT VISAKHAPATNAM] as held Kaccha Arahtias turnover includes only the gross commission and not the sales effected on behalf of their principals.
It is a f act that the assessee is only a licensed commission agent in Agricultural Market Committee Yard, Guntur which is formed under the rules and regulation of the Government of Andhra Pradesh. Therefore, the Circular issued by the CBDT (supra) squarely applies to the assessee and hence assessee is acted only as an agent (kaccha arahtia) and therefore it is eligible to get credit of the entire amount deducted as tax at source and there is no short fall of TDS as concluded by the Ld. Revenue Authorities - set-aside the orders of the Ld. Revenue Authorities and direct the Ld. AO to grant credit of the entire amount deducted as tax at source in the case of the assessee.
As following above no hesitation to set-aside the orders of the Ld. Revenue Authorities and direct the Ld. AO to grant credit of the entire amount deducted as tax at source in the case of the assessee. Thus, the grounds raised by the assessee are allowed.
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