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Showing 421 to 440 of 1183 Records
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2021 (6) TMI 763
Availment of illegal input tax credit - invoices issued by both the non-existent and fictitious firm - search and seizure operations under Section 67 of GST Act - HELD THAT:- The power exercised under Section 67 of the Central Goods and Services Tax Act, 2017 is distinct, separate and independent of the power to be exercised by the competent authority under Section 71. The intent, purpose and scope of both the Sections are distinct, separate and independent and not subject to each other - It is true that notice dated 21.01.2021 (Annexure-5) under Section 71 stood issued to the petitioner, but then, upon subjective satisfaction of having reason to believe, the officer authorized to conduct the search and seizure operations under Section 67, did do per law.
From the reading of the Panchnama [Page-75], it is evident that two independent witnesses were firstly associated; who volunteered to the authorities to be part of the search and seizure operations; and only thereafter in their presence, petitioner’s premises was searched on 21.01.2021, wherefrom the material allegedly kept with an endeavour of evading the tax payable under the Act was recovered. The quantity is huge.
Petitioner shall fully cooperate and participate in the passing of the order by the competent authority, so required to do so pursuant to the exercise of power under Section 67 of the Act - Petition disposed off.
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2021 (6) TMI 762
Suspension of operation of the excise licences of the petitioner - allegation is that certain quantum of liquors that were placed in the premises without any lock and key - Compounding of Offences - sale of Indian and Foreign liquors and claims - HELD THAT:- The entirety of the observations of the first appellate authority in regard to the alleged discrepancies are theoretical and do not reveal any independent application of the material that are stated to be available on record or the responses that have been furnished by the petitioner. As regards the reference to the violation of orders to contain the pandemic, those offences have been compounded and as I have indicated in paragraph-4, proceedings cannot be continued any further, qua those offences.
The impugned orders of original and appellate authorities are set aside. The respondents are granted liberty to issue a show cause notice afresh indicating the violations and furnishing all materials on the basis of which the allegations are based. After receipt of response from the petitioner, hearing the petitioner and consideration of all materials, the officer will pass an order within a period of eight (8) weeks and the application of the petitioner for renewal of its licence shall be considered thereafter and subject to such order.
In the present matter, bearing in mind the nature of the order that has been passed by me, a detailed enunciation of this issue may not be necessary, since there is no identity between the issue raised in show cause notice dated 21.04.2020 and the issue based upon which order of cancellation dated 29.03.2020 has been passed - continuation of the proceedings pursuant to show cause dated 21.04.2020 is, as observed by me earlier, misconceived since it turns on an entirely different set of issues.
The authorities have proceeded to compound the offence committed under the Excise Act, which, in my considered view, is contrary to the object and intendment of the Disaster Management Act. The control exercised by the Centre and State under the DM Act is in public interest and to control the situation caused by the prevailing disaster, in this case, the COVID – 19 pandemic. Any restrictions placed on the activities and movement of the public is also for the aforesaid reason only - Petition disposed off.
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2021 (6) TMI 761
Disallowance of Architect fee and brokerage expenses - AO disallowed said expenses only on the ground that Sri Perumbakkam project was not completed for the year under consideration, but never called for any proof of expenses, whereas, CIT(A) has confirmed additions made by the AO on the ground that assessee has not furnished any evidence - HELD THAT:- It is a claim of assessee that had been the AO called for evidence for expenses, the assessee could have furnished said evidence. The assessee was not given opportunity to furnish necessary evidence in support of it expenses, we are of the considered view that issue needs to go back to the file of the AO to give another opportunity to the assessee to file necessary evidence in support of its expenses.
Disallowance of sales tax & service tax - Claim of the assessee before CIT(A) was that it has opted for composite scheme of payment of sales tax & service tax and as per said scheme, taxes on sales cannot be collected from customers - HELD THAT:- The sales tax & service tax is an item of expenditure, which is deductible in case same is paid by the assessee without collecting from customers - AO as well as learned CIT(A) were erred in disallowing sales tax & service tax debited into profit & loss account by holding that sales tax & service tax is not an expense. As fact with regard to whether the assessee has collected taxes from customers or not is not coming out from records. Therefore, to ascertain the facts, issue has been set aside to the file of the AO and direct him to cause necessary enquiries and if the AO found that the assessee has opted composite method of payment of taxes without collection of taxes from customers, then AO is directed to allow sales tax & service tax paid by the assessee as deductible expenses.
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2021 (6) TMI 760
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - application was dismissed on the ground of pre-existing dispute - HELD THAT:- The Demand Notice has to be responded to within 10 days, as required in Section 8(2) for the purpose of bringing to the notice of the operational creditor the existence of a dispute or evidence of repayment of operational debt. The Corporate Debtor has not done so, prompting the operational creditor to take action as per Section 9 (1). Later during hearing before the Adjudicating Authority, the Corporate Debtor raised the issue of existence of a dispute. It appears to be a spurious dispute, raised to ward off the responsibility of repayment of debt as claimed by the operational debtor - The doubtful nature of dispute can also be inferred from the fact that Ld. Counsel of Respondent (Corporate Debtor) has stated in arguments that he had sent emails regarding the high percentage of wastage of newsprint on 28.9.2016, 5.10.2016, 25.5.2017, 2.7.2018 and 9.8.2018. The first invoice that is included in the demand notice which is due for payment is of 22.2.2018. All the other invoices included in the demand notice are of dates later than 22.2.2018 - It is not clear why the same issue is raised again by the corporate debtor for later invoices. It appears that this issue has been shown as a pre-existing dispute as an afterthought by the Respondent.
While there is dispute about the rate of interest claimed by the Appellant it does not significantly alter the quantum of unpaid debt, which will remain to be above Rs. One Lakh. Thus, the application is maintainable on account of the unpaid debt being more than Rs. One Lakh, the threshold amount.
Appellant not printing the newspaper for 16 days and the loss incurred by the Respondent on this account - HELD THAT:- The Clause 3 of the agreement stipulates that the responsibility of supplying newsprint lay with the Corporate Debtor. Hence this issue does not provide any help to the Respondent in his case.
High percentage of wastage of newsprint in printing - HELD THAT:- The said agreements make it very clear that the minimum number of chargeable copies will be 10,000. In addition, the said agreements also stipulate that the wastage will be less than 4%. This wastage, quite obviously, is in relation to printing of 10,000 copies. It is understood that in printing jobs as the number of copies increase the quantum of wastage decreases and, conversely, as the number of copies decrease the quantum of wastage increases - It is, therefore, logical to expect that the later invoices should also have been settled on the same principle. Hence, we find the insistence of the Respondent that the Appellant should provide clarification for higher wastage to be superfluous and according to us this dispute does not fall in the category of preexisting dispute.
Submission of dispute to arbitration - HELD THAT:- The matter was not referred for arbitration by either of the parties. This issue of possibility of arbitration has been raised at the appeal stage. It is not for this tribunal to direct the parties to go for arbitration.
The Appellant and the Respondent continued in their relationship of Corporate Debtor and Operational Creditor even after 3.12.2017 and hence effectively the agreements continued to bind the parties. The Corporate Debtor accepted the invoices raised on and after 22.2.2018 and in various emails kept on promising to make payments and buying time for making payments - Appellant’s application under Section 9 of IBC satisfies all the ingredients as laid down in law. The same deserved to be admitted.
The matter is remitted back to the Adjudicating Authority. The Adjudicating Authority will admit the application (unless parties settle dispute before such Order), and pass further consequential directions as per provisions of IBC - Appeal allowed.
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2021 (6) TMI 759
Seeking restoration of name of the company in the ROC - absence of statutory filings for more than two years - Section 252 of Companies Act - HELD THAT:- It is evident that the company is carrying on business and it is in operational. However, the admitted fact that the company is not filed the Annual Returns for two preceding years and the same has been admitted by the Appellant and the Company for their default showing that they are ignorant of the law.
The main ground for the removal of the company from the Register of Companies is that if the company is not carrying any business or operation for a period of two immediately preceding years the ROC may issue notice to the Company calling explanation from the Company and thereafter take action in accordance with law. Non-filing of Annual Return is a default. The said default can be cured/rectified by imposing costs as per the provisions of the Companies Act, 2013. Whilst, the Company is carrying the business and if it is in operational however, non-filing the Annual Returns and the financial statement as required under law inadvertently may not be a ground for removing the name of the company - the company is in operational and as per Section 252 of the Companies Act the Learned NCLT ought to have restored the name of the Company to the Register of Companies.
The SCN and any consequential order in respect of striking off the company are hereby set aside - ROC is hereby directed to restore the name of the Company i.e. Hiraj Hospitality Pvt. Ltd. on the Register of Companies - application allowed.
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2021 (6) TMI 758
Denial of deduction u/s 80P(2)(a)(i) - assessee is a Co-operative society registered under the Maharashtra Co- operative Societies Act, 1960 - HELD THAT:- The assessee Co-operative society is admittedly engaged in carrying on the business of banking and providing credit facilities. Section 80P(2)(a)(i) provides that in the case of co-operative society engaged in carrying on the business of banking or providing credit facilities to its members, the whole of the amount of profits and gains of business attributable to such activities shall be deductible in the computation of total income. The claim of assessee for deduction has been negated by the authorities below on the ground that it had admitted certain Members, described as ‘Nominal Members’, who were neither entitled to dividend nor voting rights.
Taking note of the fact that the Citizen Co-operative Society Ltd. [2017 (8) TMI 536 - SUPREME COURT] judgment dealt with the Andhra Act wherein the term ‘Member’ did not include Nominal Member, the Hon'ble Supreme Court in Mavilayi Service [2021 (1) TMI 488 - SUPREME COURT] held that the interest on loans given to Nominal Members under the Kerala Act was eligible u/s 80P(2)(a)(i) as the term ‘Member’ under the Kerala Act included ‘Nominal Members’. As evident that when the loans are given to Nominal Members and the relevant State Act includes, ‘Nominal Member’ purview of ‘Member’, there can be no question of denial of benefit u/s 80P(2)(a)(i).
We find that the provisions of the Kerala Act and the Maharashtra Act, in so far as the term `Member’ including `Nominal member’ is concerned, are similar. In Jalgaon District Central Co-operative Bank Ltd. [2003 (9) TMI 56 - BOMBAY HIGH COURT] has held that the definition of `member’ given in section 2(19) of the Maharashtra Act takes within its sweep even a nominal member and there is no distinction between a duly registered member and nominal member. We overturn the impugned order and direct to grant deduction u/s 80P(2)(a)(i), as claimed by the assessee. - Decided in favour of assessee.
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2021 (6) TMI 757
Assessment u/s 153A - addition made u/s.69A of the Act in respect of monies lying in foreign bank account as undisclosed income - HELD THAT:- Undisputed fact that there is no incriminating material found during the course of search and in view of the fact that the statement made u/s.132(4) of the Act does not constitute incriminating material, we have no hesitation in quashing the assessment made u/s.153A of the Act r.w.s.143(3) of the Act on 31/03/2015 for the A.Y.2006-07.
We also find that on similar facts and circumstances in respect of Base note received from French Government and in respect of assessment completed u/s.153A of the Act, the Co-ordinate Bench of Kolkata Tribunal in the case of Bishwanath Garodia vs. DCIT [2016 (9) TMI 1365 - ITAT KOLKATA] had also held that the ld. AO cannot make any assessment u/s.153A of the Act making addition to assessee’s income in respect of amount deposited in foreign bank since assessment for relevant assessment year have already been completed u/s.143(3)
Penalty u/s. 271 (1)(b) - HELD THAT:- This action of the assessee was found to be of non-cooperative attitude by the ld. AO for which penalty u/s.271(1)(b) of the Act was levied. In our considered opinion, the assessee has given a plausible explanation on the subject mentioned issue and the said explanation was not accepted by the ld. AO. However, we find that ultimately the assessments were framed by the ld. AO for all these assessment years only u/s.143(3) of the Act which goes to prove that assessee had indeed cooperated with the ld. AO for smooth completion of assessment proceedings by making some addition.
Hence, we do not deem this as fit case for sustaining the levy of penalty u/s.271(1)(b) of the Act. Accordingly, the penalty levied u/s.271(1)(b) of the Act are hereby directed to deleted for A.Y.2006-07 to 2012-13. Penalty appeals u/s. 271(1)(b) of assessee allowed.
Penalty u/s. 271AAA - HELD THAT:- When the only source of income is from diamond business, it could be safely concluded and inferred that assessee could have earned undisclosed income only from such businesses, hence, the second condition prescribed in 271AAA(2) i.e. substantiating the manner in which undisclosed income has been derived has been duly complied with by the assessee in the instant case. Hence, we hold that assessee is duly entitled for immunity from levy of penalty in respect of undisclosed income disclosed during the course of search in terms of Section 271AAA(2) of the Act. Accordingly, the penalty levied in the case of Shri Sunil C Gandhi is hereby directed to be deleted.
Addition u/s.153A - addition u/s.69A of the IT Act made on protective basis in the case of the assessee - HELD THAT:- We find that assessee in response to the queries raised by the ld. AO confirmed that he was the beneficial owner of the foreign bank account of HSBC Bank at Geneva and that he has been operating the same since 2000. We find that assessee has also confirmed before the ld. AO that all the funds in the said bank account are in relation to his (i.e. Shri Nirav Gandhi) business activities outside India and do not represent any income from any sources in India. It was also pointed out that the said funds have duly been disclosed by Shri Nirav Gandhi while filing his tax returns in Belgium, which fact was also later confirmed by the Belgium revenue authorities.
Hence, there cannot be any addition that could be made in the hands of a non-resident in respect of a foreign bank account either on substantive or on protective basis. On this preliminary ground, we are inclined to grant relief to the assessee (i.e. Shri Nirav Gandhi). We find that assessee has not preferred any appeal against the order passed by the ld. CIT(A). We find that Revenue has challenged the deletion of protective addition made by the ld. CIT(A). Since assessee is a non-resident, at the cost of repetition, there cannot be any addition in respect of a foreign bank account in HSBC Bank, Geneva in India either on substantive or on protective basis. Accordingly, the ground raised by the Revenue is dismissed.
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2021 (6) TMI 756
Addition u/s.35D by treating the amount as pre-operative expenses - HELD THAT:- As decide in own case [2019 (11) TMI 1633 - ITAT PUNE] DR was required to submit a report on the granting or otherwise of deduction of such expenses in the earlier years. A copy of the report from the AO has been placed on record by the ld. DR. As per this report, a deduction was claimed for the first time in the return for the A.Y. 2009-10 which was not granted, but the ld. CIT(A) accepted the assessee’s claim and the Revenue’s appeal has been dismissed, albeit on low tax effect. No assessment was taken up u/s. 143(3) of the Act for the A.Y. 2010-11, meaning thereby that the deduction got allowed.
From the above report of the AO, it is ostensible that the assessee has been consistently allowed deduction of ₹ 9.00 lakh in the assessments for the A.Ys 2009-10 and 2010-11. The assessment year 2011-12, under consideration, is a consecutive 3rd year in line. The deduction for similar amounts has been allowed in the immediately two preceding assessment years, following the principle of consistency, hold the assessee to be entitled to deduction in the year under consideration as well. The impugned order is overturned on this score and the deduction is granted. - Decided in favour of assessee.
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2021 (6) TMI 755
Oppression and Mismanagement - Seeking reasonable exit from the Company firstly to the Appellants and thereafter to the Respondents group by appointing the Chartered Accountant to value the shares of the Company - whether the Learned NCLT has dealt with the Company Petition on its merits or not?
HELD THAT:- The counter allegations have not been dealt by the Learned NCLT. It is also a fact that the R-1 Company is closely held family Company. However, the primary duty is to decide the allegations and come to a conclusion and thereafter the Tribunal ought to have considered passing of decisions as it deem fit in accordance with law and the precedents has held by the Hon’ble Supreme Court. The Learned Counsel for the Respondent submitted that as per the decisions of the Hon’ble Supreme Court even where a case of Oppression has not been made the Jurisdiction of Erstwhile Company Law Board to pass any other or further order in the interest of the Company, if it is of the opinion that the same would protect the interest of the Company, it would not be powerless.
It is apt to refer to the provisions of Companies Act, 1956 and Section 397,398 of the Companies Act, 1956 which dealt with the Oppression and Mismanagement in the affairs of the Company and the Jurisdiction Vests with the then the Company Law Board. The Company Law Board had wide powers under Section 402 of 1956 Act to give directions in the interest of the company and its shareholders. The New Companies Act, 2013 Section 241 provides a provision to make an Application to NCLT for relief in the case of Oppression and Mismanagement - the Judgments of the Hon’ble Supreme Court with respect to Section 397,398 are squarely applicable to the provisions of Section 241 and 242 of the Companies Act, 2013 with respect to the Oppression and Mismanagement.
Reliance placed in the case of upon the Judgment of the Hon’ble Supreme Court in “Needle Industry (India) Ltd. vs. Needle Industry Newey (India) Holding Ltd. [1981 (5) TMI 89 - SUPREME COURT] it was held that Even though the Company petition fails and the appeals succeed out on the finding that the Holding Company has failed to make out a case of Oppression, the court is not powerless to do substantial justice between the parties; and place them, as nearly as it may, in the same position in which they would have been, if the meeting of May 2 were held in accordance with law.
Thus, there is no doubt that the then Company Law Board was not powerless to pass orders even though the case of oppression is not made out. We are bound by the above decisions of the Hon’ble Supreme Court which are leading Judgments in the matter of Oppression and Mismanagement. However, in the facts of the present case the Learned NCLT has not dealt the case on merits and without arriving at a finding on the basis of merits giving directions more particularly when parties have not come forward for exiting the Company, is in our view Unjustified. There is no doubt that the parties have made some offers but ultimately the parties should have come forward with a concrete proposal with regard to the exit either by the Petitioners or by the Respondents.
The Learned NCLT erred in passing the said impugned order, since there is no consensus between the parties with regard to exit from the Company - Learned NCLT is requested to deal with the Company Petition on merits by considering the allegations made by the Appellants/Petitioners along with the documents relied upon by them - stay granted by this Tribunal dated 09.04.2019 shall continue to operate till disposal of the Company Petition No. 138 of 2018 on its merit - Appeal disposed off.
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2021 (6) TMI 754
Claim filed by Operational Creditors belatedly, rejected - CIRP is now at the stage where the Resolution Plan has already been approved by the Committee of Creditors and the same has been filed before the Adjudicating Authority for approval - HELD THAT:- The Nationwide lockdown was imposed on 25th March, 2020. When the period of 90 days expired on 17th March, 2020, if Regulation 12(2) read with Regulation 40C is kept in view, the Appellant cannot take advantage by claiming that because of the COVID-19 situation, the Appellant could not file the claim with the Resolution Professional. Submitting of the claim cannot be equated with filing of the application - It is admitted position that already Resolution Plan has been approved and perusal of the record shows that after much efforts the Resolution Professional could take the CIRP to the stage of approval of Resolution Plan.
The reasons recorded by the Adjudicating Authority have substance and if at belated stage when the Resolution Applicants are already before the Committee of Creditors with their Resolution Plan(s) if new claims keep popping up and are entertained, the CIRP would be jeopardized and Resolution Process may become more difficult - keeping in view the object of the ‘I&B Code’ which is Resolution of the Corporate Debtor in time bound manner to maximize value, if such requests of applicants like Appellant are accepted the purpose of ‘I&B Code’ would be defeated.
Appeal dismissed.
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2021 (6) TMI 753
Revision u/s 263 - Addition u/s 68 - unexplained share capital and premium - HELD THAT:- AO has enquired about the issue by serving the summons u/s 131 of the Act to the Directors/ Principal officers of share holding companies at their official addresses through the departmental Inspectors. And it is noted that the AO has made field enquiry through the Inspector (on test-check basis) to find out the actual existence of company and to find out whether there are employee/employees working there etc. AO has made specific finding that the share holders are duly registered with the Ministry of Corporate Affairs and they all have filed their respective return of income regularly. The AO notes that the directors of all the share holders company have responded to the summons u/s 131 of the Act and their existence has been verified with the PAN data base and found to be correct.
AO has acknowledged to have recorded statement of directors on oath and placed the same on record. The AO has looked into the details of the source of funds submitted by the share holders during the course of statement recorded of the directors and he has recorded his satisfaction on the source of share subscribing money of the share holders.
AO has made a finding of fact that the share subscription was made through the banking channel and that all the share subscribers have submitted even their annual return filed for AY 2017-18 (when the Third Assessment order was being framed) even though the assessment was regarding AY 2009-10. Further the AO has noted that the investments made by the share holders are duly reflected in the respective books of accounts and moreover the AO has also noted their creditworthiness and genuineness of the transaction.
In order to prove identity, creditworthiness and genuineness of the transaction the assessee had filed the following details of each share subscribers which is evident from PB filed before us. The share holders have filed the following details before AO to prove the identity, creditworthiness and genuineness of the share transaction.
The assessee had not only submitted all the details and evidences to prove the share capital raised but has also produced all the directors of shareholder companies who were examined on oath - AO has verified the bank statements, books of accounts, copy of share application and allotment forms, etc. were checked and placed in the records. So the case of assessee is distinguishable and therefore this case law does not apply to the facts of this case.
Third PCIT could not have usurped the revisional jurisdiction u/s 263 of the Act without satisfying the condition precedent as prescribed in the section 263 of the Act and consequently the action of the third Ld. PCIT-4, to interfere with the AO’s order dated 26.12.2017 by passing impugned orde u/s 263 of the Act is held to be without jurisdiction - Decided in favour of assessee.
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2021 (6) TMI 752
Revision u/s 263 - short term capital loss from the scrips claim - HELD THAT:- No exceptional circumstances in respect of the action of AO while enquiring into the issue of short term capital loss were cited by the Ld. PCIT in his impugned order or the Ld. DR. So, we presume the fact that AO was aware of the contents of the circular of CBDT regarding penny stock and thereafter had issued notice u/s. 142(1) -
Thus invoking Explanation 2(c) of section 263 of the Act is not correct in the facts and circumstances of the case. PCIT has not bothered to refer to any cogent material on the basis it can be said that these three scrips in question are penny stock.
The assumption of Ld. PCIT is based on surmises and conjectures and it is settled principle of law that suspicion howsoever strong cannot take the place of evidence/proof.
Considering the enquiry made by AO on the issue, we presume that the AO has performed his task of an investigator on the issue of short term capital loss on the scrips in question after taking note of CBDT circular No. 287/30/2014-IT(inv.II)- Vol-III dated 16.03.2016 on penny stock and thereafter conducted the enquiry. And after perusal of the reply of the assessee to the specific queries and details called for and after perusal of the supporting materials, the AO being satisfied has accepted the claim of assessee in respect of loss on these scrips. Therefore the AO’s action of accepting short term capital loss on the three (3) scrips cannot be termed as a case of no-enquiry on the part of the AO as well as discussed supra the Ld. PCIT’s opinion that Explanation 2(c) u/s. 263 is attracted in this case is incorrect in the light of the facts and circumstances as aforestated - condition precedent to invoke revisional jurisdiction u/s 263 of the Act is absent - Decided in favour of assessee.
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2021 (6) TMI 751
Revision u/s 263 - case of assessee was reopened in respect of escapement of income through accommodation entry provided by Akash Agarwal group in the garb of bogus billing - PCIT observed that the AO’s action of applying u/s. 44AD of the Act i.e. 8% on the purported accommodation entry from Akash Agarwal group is erroneous and resulted in under assessment of income - HELD THAT:- Since actual contractual work (construction of new road (11 km.), leveling, formation of village road etc. as given in the table supra) has been found to have been executed by some other persons in the remote areas of mines situated at Barajamda, Jharkhand, the AO presumed that the purpose of availing the billing from M/s. Simplex must be for inflation of expenses and thereafter adopted the presumptive tax rate as envisaged u/s. 44AD of the Act.
Since the AO’s aforesaid finding is based on the evidence in the form of photos/work, completion report and the payment released by reputed companies for the successful completion/execution of works contract, the finding of the AO is a plausible view and cannot be termed perverse. It is trite law that only the net income can be brought to tax. For that expenditure incurred by the assessee has to be allowed to determine the net income of the assessee. In this case, the AO has found that assessee has executed the contract through some one. For execution of the work contract, the assessee received payment from the contractor and the assessee’s expenditure incurred need to be allowed.
For doing that AO has found that though bogus billing has been made through M/s. simplex, work contract has been executed through some one. So, he was of the opinion that procuring the bills through M/s. Simplex was for inflation of expenses and to plug the revenue loss on account of that he applied the presumptive tax rate u/s. 44AD.
Therefore, the action of AO on the facts and circumstances as discussed is a plausible action and cannot at any rate by termed as “unsustainable in law”. Therefore, the action of Ld. PCIT to invoke the revisional jurisdiction is absent and therefore, the impugned action of Ld. PCIT is held to be bad in law and so quashed. - Decided in favour of assessee.
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2021 (6) TMI 750
Reopening of assessment u/s 147 - reason to believe V/S reason to suspect - suspicious transaction of LTCG in shares - HELD THAT:- AO has simply reproduced the information from DIT(Inv) that since the assessee has transacted in this financial year in the scrip of M/s Essar India, the LTCG claim is bogus; and the AO while recording the reason concluded that by doing the said transaction there was an escapement of income of ₹ 5,55,624/- whereas when the assessment order was framed the AO has found that assessee has made LTCG of ₹ 9,70,583/-. - when the AO got adverse information from the DIT(Inv) as a prudent and responsible officer, the AO should have made preliminary enquiry and collected materials which could have made him form the belief that there is escapement of income.
As noted that AO based on the information from DIT(Inv) neither furnished a copy of the same to assessee nor even recorded the gist of the information from DIT in the reasons recorded by him to conclude that LTCG on M/s Essar India is bogus. In the facts and circumstances discussed it is noted that the legal requirement to reopen i.e. “reason to believe escapement of income” has not been satisfied. Since the requirement of law prescribed u/s 147 of the Act has not been met in the reasons recorded in the case of assessee, the AO did not have jurisdiction to reopen the assessment and therefore the very action of issuing notice u/s 148 is bad in law and consequently all action taken by the AO is null in the eyes of law and therefore quashed. Appeal of the assessee is allowed.
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2021 (6) TMI 749
100% EOU - refund of unutilized CENVAT credit - time limitation - Section 11B and not under Rule 5 of CCR read with N/N. 27/2017 - HELD THAT:- It is not disputed that the appellant debited an amount of ₹ 60,12,607/- which resulted in excess debit of ₹ 12,44,979/-. Further, the appellant has filed the present refund claim under Section 11B and not under Rule 5 of CCR read with Notification No.27/2017. Further, also after the introduction of GST, the appellant could not transitioned the excess debit into TRAN-I. In that case, the only option for the appellant was to file a refund claim under Section 11B read with Section 142(5) - the impugned order has not disputed the eligibility of credit debited in excess. After the introduction of GST in July 2017, there is no option provided to the noticee to avail CENVAT credit, as the returns have been suspended with regard to erstwhile regime. Consequently, the noticee filed the refund of the amount debited in excess in terms of provision 142(3) of CGST Act which was allowed as credit.
The impugned order wrongfully invoked the Section 142(3) to reject the refund claim. It is a fact that if CGST Law was not introduced, the appellant would have availed credit in ER-1 Returns and as per Section 174(2)(c) of CGST Act, the appellant cannot be effected of its right, privilege, in availing credit merely in respect of refund rejected on account of limitation being passed after 27.12.2017 - thus, change in taxation regime should not affect the credit availment right of assessee. Hence the appellant is rightly entitled for the credit and also refund.
The impugned order denying the refund by invoking Section 142(3) is not sustainable in law - Appeal allowed - decided in favor of appellant.
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2021 (6) TMI 748
Validity of assessment - absence of notice under section 143(2) - HELD THAT:- In the case of ‘CIT vs. Laxman Das Khandelwal’ [2019 (8) TMI 660 - SUPREME COURT] as, inter alia, been held by the Hon'ble Supreme Court that a complete absence of notice under section 143(2) of the Act does not get cured even by section 292BB of the Act; that for section 292BB of the Act to apply, a notice under section 143(2) must have emanated from the Department and it is only infirmities in manner of service of notice that section 292BB of the Act seeks to cur-e and it is not intended to cure complete absence of notice itself. It was held that the law on the point as regards applicability of the requirement of notice under section 143(2) of the Act is quite clear from the decision in ‘ACIT vs. Hotel Blue Moon’ [[2010 (2) TMI 1 - SUPREME COURT] wherein it was held that notice under section 143(2) of the Act would be mandatory for the purpose of making assessment under section 143(3) of the Act.
The above position has duly been taken into consideration by the ld. CIT(A), as noted hereinabove. The Department has not been able to refute the decisions in ‘ACIT vs. Hotel Blue Moon’ (supra) and ‘CIT vs. Laxman Das Khandelwal’ (supra), both rendered by the Hon'ble Supreme Court. No merit in the grievance sought to be raised by the Department, the same is hereby rejected
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2021 (6) TMI 747
Refund of the excess payment made - rejection on the ground that the payment towards two bills of entry fall under the jurisdiction of ACC, Bangalore as the imports were made from ACC, Bangalore in respect of two said bills of entry - HELD THAT:- It is not in dispute that the appellant has made payment twice on account of the technical problem in ICEGATE and the fact of double payment was also confirmed from PAO, New Delhi which confirms double payment towards certain bills of entry for which the refund was filed. Further, the refund application was filed with the ICD, Bangalore which has partly allowed the refund but rejected the refund of ₹ 10,49,491/- on the ground that the payment towards two bills of entry fall under the jurisdiction of ACC, Bangalore as the imports were made from ACC, Bangalore.
In the additional submissions filed by the appellant, the appellant has also submitted that the bills of entry with reference to which the amounts have been paid twice were provisionally assessed during the relevant point of time due to pendency of SVB proceedings and those bills of entry were finally assessed by closure of provisional duty Bond by ACC, Bangalore in 2019 and communicated to the appellant on 04.01.2019 and has also submitted the documentary proof of final assessment of the said bill of entry and as per Section 27(1B)(c) where any duty is paid provisionally under Section 18, the limitation of one year shall be computed from the date of assessment of duty after the final assessment. If the Department consider the same as duty even then the period of one year will start from 04.01.2019 and the refund filed by the appellant is found to be within time.
The impugned order rejecting the refund on time bar is not sustainable in law - Appeal allowed - decided in favor of appellant.
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2021 (6) TMI 746
100% EOU - Maintainability of appeal - non-compliance of the manadatory predeposit under Section 35F of the Finance Act, 1994 - HELD THAT:- The dismissal of the appeal for non-compliance of mandatory predeposit under Section 35F of the Finance Act, 1994 is not sustainable in law in the present case because the appellant has already paid the entire duty by debiting the cenvat credit account and also paid the interest in cash. Further the Commissioner(Appeals) after hearing the matter on merits should not have dismissed the appeal for non-compliance of Section 35F.
Once the credit of education cess and secondary education cess is specifically disallowed to be carried forward as transitional credit, they remain and retain their character as education cess and secondary education cess as cenvat credit as per Rule 3 of CCR, 2004. Since there is no finding on the merit by the learned Commissioner(Appeals), it will not be appropriate to decide the appeal on merits. The dismissal of the appeal for non-compliance of mandatory predeposit is not justified in law when the appellant has already paid the entire duty by debiting the cenvat credit account.
The matter remanded back to the learned Commissioner(Appeals) for disposal of the appeal on merits after considering the various provisions contained in Section 140 of CGST Act, 2017 and the Circular dt.02.01.2019 issued by CBIC and after following the principles of natural justice - appeal allowed by way of remand.
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2021 (6) TMI 745
Demand of service tax - reverse charge - revenue neutral issue - extended period of limitation - The appellant had received services of Back End Operations such as payrolls and finance input services from its related party AirAsia Global Shared Services (AGSS, for short) which is located outside India - HELD THAT:- In the present case, it is not disputed that the appellant is receiving the services of back-end operation such as payroll and finance from their related party AGSS which is located outside the taxable territory of India. It is also not disputed that the services received by the appellant is an input service and service tax is paid under reverse charge mechanism. Further it is found that the appellant submitted a certificate dt. 01.10.2018 of M/s. MOJ & Associates, Chartered Accountants certifying the remittance of taxes under reverse charge mechanism for the receipt of services from AGSS for the financial years 2013-14 to 2017-18. The said certificate mentions that the payment of service tax on business support service received from AGSS made on accrual of invoices.
Extended period of limitation - HELD THAT:- Both the authorities have not considered the ratio of the decision in the case of JET AIRWAYS (I) LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI- (VICE-VERSA) [2016 (12) TMI 934 - CESTAT MUMBAI] decided by the Tribunal which was upheld by the Hon’ble Apex Court in JET AIRWAYS (INDIA) LTD. VERSUS COMMISSIONER [2018 (1) TMI 210 - SC ORDER] which is clearly applicable in the facts and circumstances of the present case. It is also found that the Commissioner(Appeals) in the impugned order has wrongly relied upon the ratio laid down by the Apex Court in the case of BALWANT SINGH VERSUS JAGDISH SINGH [2010 (7) TMI 556 - SUPREME COURT] wherein the facts of those cases are entirely different from the facts of the present case - The decision of Balwant Singh deals with the condonation of delay while the present case deals with the concept of revenue neutrality with regard to service tax remitted under reverse charge mechanism.
The extended period of limitation has wrongly been invoked by the Revenue in the present case because the appellant has not concealed any material fact and has been filing the return regularly and paying the service tax under reverse charge mechanism and has been cooperating with the Department by providing various information and documents - the invocation of extended period of limitation is not sustainable in law.
Revenue Neutrality - HELD THAT:- The issue of revenue neutrality has also been clarified by the CBEC vide Circular No.354/148/2009-TRU dt. 16/07/2009 wherein it has been clarified that the service tax paid by a service recipient on reverse charge basis would also qualify as input service for availment of cenvat credit
Regarding the demand of the appellant seeking refund of ₹ 20,91,847/- paid post-01.07.2017, both the authorities have not considered the claim of the appellant on merits and therefore it is not desirable for me to give a finding on the request of the appellant to grant refund. The appellant has to file a refund claim as per law and in the present appeal, the refund cannot be granted to the appellant - Appeal disposed off.
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2021 (6) TMI 744
Refund of CENVAT Credit where the balance of the amount as on the appointed day has been carried forward/debited/reversed under this Act - proviso to Section 142(3) of CGST Act - decisions relied not applicable to the facts of the present case - HELD THAT:- When the appellant filed the refund claim for the respective periods, there was no facility to debit the refund claim in ER-2 Returns after the GST Act came into force. It is also found that by the time the refund claim was filed, the appellant had already carried forward the closing balance of credit as on 30.06.2017 through TRAN-1. Further, it is found that since no Return in ER-2 could be filed under GST Law and the appellant in order to satisfy the debit condition under Para 2(h) of the Notification No.27/2012, debited the refund claim amount in GSTR-3B in respective month, in fact, the credit was reversed under GST Law at the time of filing refund claim.
An identical issue has been considered by the Tribunal in the case of M/S. GLOBAL ANALYTICS INDIA PVT. LTD. VERSUS THE COMMISSIONER OF G.S.T. & CENTRAL EXCISE [2019 (7) TMI 1185 - CESTAT CHENNAI] wherein the Hon’ble CESTAT on an identical set of facts has held as denial of refund is not in accordance with law.
It is very strange that the learned Commissioner (Appeals) has failed to give any finding on the above relied upon decisions and he has placed reliance on decisions which are not relevant to the facts of the present case. The decisions relied upon by the learned Commissioner in the impugned order does not deal with the subject involved in these cases.
The rejection of the refund under Rule 5 of CCR read with Notification No.27/2012 is not sustainable in law - appeal allowed - decided in favor of appellant.
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