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Showing 461 to 480 of 1484 Records
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2025 (3) TMI 1024
Recovery of any tax for any period prior to the date when the Resolution Plan was sanctioned - Petitioner has undergone a successful Corporate Insolvency Resolution Process (CIRP) and the Resolution Plan is approved by the NCLT - HELD THAT:- The Affidavits in Reply, if any, shall be filed by the said Respondents on or before 7th April, 2025 and a copy of the same shall be served on the Advocates for the Petitioner. If the Petitioner wants to file an Affidavit-in-Rejoinder, they may do so on or before 15th April, 2025 and serve a copy of the same on the Advocate for the concerned Respondents.
As far as interim relief is concerned, it is found that a strong prima facie case is made out for staying the order passed by Respondent Nos. 4 and 5 as well as the adjudication of the impugned Show Cause Notices. This is said because, atleast prima facie, the Hon’ble Supreme Court in the case of Ghanashyam Mishra [2021 (4) TMI 613 - SUPREME COURT] has framed a principle that when the new management takes over a Company under a Resolution Plan, it starts with the clean slate and would not be liable for the past dues of the Company and which were incurred prior to the sanction of the Resolution Plan.
Conclusion - i) The principle that a company, post-CIRP and with an NCLT-approved Resolution Plan, is not liable for past dues is reaffirmed. This supports the notion of a "clean slate" for new management. ii) An ad-interim relief granted, staying the impugned orders and notices until further orders, indicating a strong preliminary case in favor of the Petitioner.
The matter is placed on 21st April, 2025 under the caption “for ad-interim reliefs”.
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2025 (3) TMI 1023
Seeking grant of regular bail - availment of benefit of Input Tax Credit fraudulently, amounting to Rs. 96.95 crores - HELD THAT:- In present case, the investigation is over and charge-sheet has been filed. As per the case of prosecution, the applicant is alleged to have transacted with 24 fictitious firms and the amount of transactions with those firms comes to Rs. 537 crores and on the basis of the said transactions, the applicant had wrongful availed the benefit of Input Tax Credit worth Rs. 96.95 crores though no actual goods had been exchanged between the parties. The punishment prescribed for the offence alleged in the FIR against the present applicant is to the extent of imprisonment for the period of 5 years. Having regard to the punishment prescribed for the offence so also, the fact that the trial of the offence is not likely to commence and conclude in near future, the present application deserves consideration.
Conclusion - In the facts and circumstances of the case and considering the nature of the allegations made against the applicant in the FIR, without discussing the evidence in detail, prima facie, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail, subject to fulfilment of conditions imposed.
Bail application allowed.
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2025 (3) TMI 1022
Challenge to petitioner's arrest and subsequent judicial custody - non-compliance with the statutory requirement for the issuance of a notice under Section 35 (3) of BNSS, 2023.
HELD THAT:- It is well established in modern criminal jurisprudence and constitutional law that any challenge to the legality of an arrest involves a contest between the entrenched right to life and liberty and the larger public interest and state obligation to punish the guilty. Thus, any interpretative exercise by this Court—whether under its writ jurisdiction or inherent powers—must employ a “test of proportionality.”
In the case of Satender Kumar Antil v. CBI [2022 (8) TMI 152 - SUPREME COURT], the Apex Court observed in respect of grant of bail to persons accused of offences punishable with less than seven years of imprisonment that “one would expect a better exercise of discretion on the part of the court in favour of the accused”.
The Apex Court, in Ashok Munilal Jain and Anr. v. Assistant Director, Directorate of Enforcement [2017 (3) TMI 1642 - SUPREME COURT] held that the procedure prescribed under the Criminal Procedure Code (CrPC), 1973 is equally applicable to criminal proceedings arising under the CGST Act, 2017.
The inherent powers of a High Court are not negated by any overlap with the judicial review powers conferred under Articles 226 and 227. Writs are extraordinary constitutional remedies and operate independently of the statutory right under Section 528 to address grievances not specifically provided for in the Sanhita - The High Court may, at its discretion, entertain a petition under Article 227 of the Constitution or under Section 528 of BNSS to address a substantial question of law that goes to the root of the matter or the genesis of the prosecution.
A perusal of Section 69 (3) (a) of CGST Act, 2017 reveals that the said Act envisages that the arrestee charged with a cognizable and non-bailable offence as under Section 132 (4) of the said Act shall be forwarded to the custody of the Magistrate, in default of bail. The statute does not provide for custody of the arrestee to either police or the proper officer. Therefore, the authority of the Magistrate to, either admit the said arrestee on bail or remand him to judicial custody, is to be necessarily exercised in accordance with the provisions of the BNSS, 2023 (i.e. CrPC, 1973) - the instant petition is maintainable under Section 528 of BNSS, 2017, particularly where the grounds of challenge to the arrest include non-compliance with the statutory provision of Section 35 (3) of BNSS, 2017.
The Apex Court in Arnesh Kumar v. State of Bihar, [2014 (7) TMI 1143 - SUPREME COURT] held that an arrest without a warrant by a police officer for a cognizable offence punishable with imprisonment of up to seven years must satisfy not only the requirement of having ‘reason to believe’ that the arrestee has committed the alleged offence but also that the arrest is necessary for one or more of the purposes enumerated in sub-clauses (a) to (e) of clause (1) of Section 41 CrPC (with Section 35(1) of BNSS corresponding to Section 41 CrPC). As to the issue of notice of appearance under Section 35 (3) of BNSS (i.e., Section 41-A of CrPC), the Court observed that such notice must be served on the accused within two weeks from the date of institution of the case, with an extension by the Superintendent of Police possible for reasons recorded in writing.
In the case at hand, the petitioner however, is an arrestee, who has been in custody since 30.01.2025 who had tendered evidence and cooperated with the conduct of inquiry, and thus, had compiled with the summons issued on 02.01.2025 - under Section 70 of the CGST Act, 2017. The subject of challenge herein is not the issuance of summons, but the arrest effected in pursuance of the said summons, when the same was so made without issuance of the notice of appearance under Section 35 (3) of BNSS, 2023 (or section 41-A(1) of CrPC, 1973).
The case at hand involves a complaint of wrongful availment of ITC by the petitioner to the tune of INR 5.10 crores only, and the petitioner has been in remand since the date of his arrest on 30.01.2025 - The CGST, Act 2017 provides for assessment under Section 59, provisional assessment under section 60, scrutiny of returns under Section 61, assessment of persons who do not file returns under Section 62, assessment of unregistered persons under Section 63, summary assessment in special cases under Section 64, and audit under Sections 65 and 66. It is undisputed that while a prosecution can be launched prior to conduct of summary assessment or special audit determining liability, no offence can be said to be made out in respect of purported discrepancies in the furnished returns, until completion of the said audits.
In light of the fact that the petitioner-arrestee was arrested against the offence punishable with no more than five years of imprisonment plus fine, but without the issuance of notice of appearance directing him to appear before the officer authorised under Section 69(1) of the CGST Act, and the fact that the petitioner has been incarcerated since 30.1.2025, coupled with the settled bail jurisprudence to exercise discretion in favour of accused of such nature, it is deemed fit that the petitioner be enlarged on bail.
Conclusion - The petitioner's arrest is vitiated due to non-compliance with Section 35 (3) of BNSS.
Petition is granted bail subject to fulfilment of conditions imposed - application allowed.
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2025 (3) TMI 1021
Refund of excess GST collected by the promoter and deposited with the respondents - compliance with Circular No. 188/20/2022-GST or not - HELD THAT:- It appears that the petitioners have approached this Court prematurely without taking recourse to the actions against the promoter in accordance with law so as to get the requisite documents in order to process the refund claim (if any), to be sanctioned by the respondents as per the provisions of the GST Act and the Rules and therefore, we refrain to entertain this petition at this stage.
The petition is accordingly dismissed with no order as to costs.
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2025 (3) TMI 1020
Maintainability of petition - availability of alternative remedy - service of SCN or not - HELD THAT:- Undisputedly, the petitioner did not prefer any appeal instead he made a representation to some authority which has been dismissed as not acceptable/ maintainable. He has then approached the GST Council, which has also rejected the same.
The second writ petition is not maintainable, accordingly, it is dismissed.
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2025 (3) TMI 1019
Principles of natural justice - Cancellation of GST registration with retrospective effect from 23 October 2020 - whether the SCN and the subsequent order provided adequate reasons for such retrospective cancellation and whether the petitioner was given sufficient notice and opportunity to respond to the proposed action? - HELD THAT:- Section 29 of the Central Goods and Services Tax Act, 2017 Act confers upon the respondents to cancel registration from a retrospective date, in Riddhi Siddhi Enterprises vs. Commissioner of Goods and Services Tax (CGST), South Delhi & Anr. [2024 (10) TMI 278 - DELHI HIGH COURT] held that 'In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer’s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant.'
Thus, it becomes apparent that absence of reasons in the original SCN in support of a proposed retrospective cancellation as well as a failure to place the petitioner on prior notice of such an intent clearly invalidates the impugned action. The writ petition is entitled to succeed on this short ground alone.
Conclusion - Retrospective cancellation of GST registration requires a reasoned order and prior notice to the affected party. The mere existence of the power to cancel registration retrospectively does not justify its use without clear and objective reasons.
The writ petition is allowed by modifying the impugned order and providing that the cancellation of the petitioner’s GST registration shall come into effect from the date of the SCN i.e. 25 October 2021.
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2025 (3) TMI 1018
Attachment of petitioner's current Banking Account - HELD THAT:- The legal issue involved in this Writ Petition has already been dealt with by this Court in SRI GANAPATHI PANDI INDUSTRIES, REP. BY ITS PROPRIETOR VERSUS THE ASSISTANT COMMISSIONER (STATE TAX) (FAC) TONDIARPET ASSESSMENT CIRCLE, CHENNAI [2024 (10) TMI 1631 - MADRAS HIGH COURT], this Court is inclined to dispose of the present Writ Petition on the same lines.
It was held in the above case that 'The orders impugned in all Writ Petitions are quashed insofar as it relates to the claim made by the petitioners for ITC which is barred by limitation in terms of Section 16 (4) of the CGST Act, 2017 but, within the period prescribed in terms of Section 16 (5) of the said Act.'
Petition allowed.
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2025 (3) TMI 1017
Claim of ITC was reversed/negatived on the ground of time limitation - retrospective amendments to Section 16 of GST Act - HELD THAT:- When this Writ Petition is taken up for hearing, the respective learned counsel for the petitioner and learned Additional Government Pleader for the respondent, would submit that the issue involved in the present Writ Petition, has been squarely covered by the common order of this Court, dated 17.10.2024 passed in W.P.Nos.25081 of 2023, etc., batch [2024 (10) TMI 1631 - MADRAS HIGH COURT] wherein, this Court has categorically held 'this Court considering the fact that the issue involved in all these Writ Petitions is only with regard to the availment of ITC, which is barred by limitation in terms of Section 16 (4) of the CGST Act, and in the light of the subsequent developments took place, whereby, Section 16 of the CGST Act was amended and sub-section (5) was inserted to Section 16, which came into force with retrospective effect from 01.07.2017, the petitioners are entitled to avail ITC in respect of GSTR-3B filed in respect of FYs 2017-18, 2018-19, 2019-20 and 2020-21 as the case may be, on or before 30.11.2021, is inclined to quash the impugned orders.'
Conclusion - i) The retrospective amendments to Section 16 allow for an extended deadline for claiming ITC, overriding the original limitation period. ii) The petitioners are entitled to avail ITC in respect of GSTR-3B filed in respect of FYs 2017-18, 2018-19, 2019-20 and 2020-21 as the case may be, on or before 30.11.2021.
The impugned orders reversing ITC claims were quashed, and the respondent-Department was directed to de-freeze bank accounts and refrain from recovery actions - petition allowed.
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2025 (3) TMI 1016
Reopening of assessment u/s 147 - proceedings initiated after a period of four years - HELD THAT:- We are concerned with the satisfaction of jurisdictional conditions to reopen the case u/s 147 of the Act. Secondly, the decision was dealing with the assessment year 1997-1998, but the reference was made to the 2002 medical regulations without discussing how they would apply.
Therefore, even on this count, this decision cannot be made applicable to the facts of the present case.
We have not been shown any decision regulation or rules which required Petitioner-Assessee to disclose during the assessment proceedings that the sales promotion expenses were incurred on the doctors.
Therefore, even on this count, in the absence of any obligation, there cannot be any failure to disclose fully and truly all material facts necessary for the assessment. Therefore, the decision of Kap Scan and Diagnostic Centre (P.) Ltd.[2012 (6) TMI 620 - PUNJAB AND HARYANA HIGH COURT] would not assist the Revenue. Decided in favour of assessee.
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2025 (3) TMI 1015
Reopening of assessment u/s 147 - proceedings initiated after a period of 4 years - HELD THAT:- It is admitted that the proceedings are based on the records filed during the course of the original assessment proceedings. The reasons recorded also admits that the issue was examined during the course of the assessment proceedings and 1/3rd of the promotional expenses were disallowed and the balance expenses were allowed.
If this is an admitted position as per the reasons recorded, then we fail to understand how the precondition of failure to disclose fully and truly all material facts necessary for the assessment can at all be satisfied. If at all, there is a failure, it was on the part of the assessing officer to have not disallowed the entire expenditure and not the failure on the part of the petitioner-assessee.
Therefore, the pre-condition required by first proviso to Section 147 of the Act based on the admission made in the reasons for reopening are not satisfied and therefore on this short ground itself, the impugned notice dated 29 March 2016 is required to be quashed and set aside.
Expenses incurred on promotional articles and their allowability - The present proceedings if permitted would amount to the proceedings based on change of opinion and review of the assessment order, which power the Act does not confer upon the assessing officer u/s 147. Furthermore, third proviso to Section 147 of the Act is clear that if the issue is pending before the Appellate Authority, then reassessment proceedings cannot be initiated.
The petitioner is justified in relying upon this Court's decision in Abbot India Ltd. [2023 (2) TMI 468 - BOMBAY HIGH COURT] in which, on a similar fact situation, reassessment proceedings were quashed.
In the instant case, the issue was already concluded by the CIT(A) before the initiation of the impugned proceedings and therefore even on this count, the impugned proceedings are without jurisdiction.
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2025 (3) TMI 1014
Refunds due to the inaction of the Income Tax Department in complying with the ITAT's order - Petitioners' grievance is that the time limit for giving effect to the Tribunal’s order dated 31st July 2006 has long expired, still, by not issuing the order giving effect, refunds are being denied to the Petitioner.
HELD THAT:- Petitioners now submits that due to not passing the order giving effect within the prescribed period of limitation, the Petitioners would be entitled to the above refund returns. On instructions, he states that if the refunds are given by 30th April 2025, the Petitioners will not claim any interest on the refunds.
Accordingly, based on the statements in the affidavit filed by the Principal Commissioner of Income Tax, we direct the Respondents to pass appropriate orders on the issue of refunds by 15 April 2025. If any refunds are found due, they must be made to the Petitioners on or before 30 April 2025.
If there is a delay, the refund amounts will carry interest at 6% p.a. and must be paid to the petitioners.
After such payment, the interest component must be recovered from the Officers responsible for the delay. There is no point in burdening the State Exchequer and, consequently, the taxpayer for inaction, whether deliberate or otherwise, on the part of the department officials.
We dispose of the petitions in the above terms by directing the Respondents to file a compliance report by 5th May 2025 with an advance copy to the learned counsel for the Petitioners. This direction is issued given the fair statement made by Petitioners that the Petitioners would not claim interest provided the amounts are refunded by 30th April 2025. In the facts of this case, it will not be proper to require the Petitioners to once again approach this Court by filing a fresh petition.
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2025 (3) TMI 1013
Reopening of assessment u/s 147 - notice was issued within a period of four years from the end of the assessment year - unexplained cash deposits - HELD THAT:- Given the quality of the explanations belatedly offered, we cannot fault the assessing authorities for having reason to believe that the income has indeed escaped assessment. The circumstance that demonetization had been ordered and there was a rush to make cash deposits also cannot be ignored.
In this case, the exercise of jurisdiction cannot be faulted on a cumulative consideration of all such factors. The petitioner will have the full opportunity to explain the situation during the reassessment proceedings.
Petitioner offered some explanations regarding the cash deposits by Mr. Ajay Pratap Singh, Mr. Rahul Mahajan and Mr. Kumar Jayendra. Apart from the quality of the explanations, at least prima facie, they appear to be in a nature of after-thoughts.
We are afraid that we cannot go into such factual aspects when deciding whether the jurisdictional parameters for re-opening the assessment were fulfilled. Based on the facts of the present case and the material on record, we are satisfied that jurisdiction has been correctly assumed. Further, whether the explanations now offered deserve to be accepted is a matter that the reassessing authority can always look into following the law.
The circumstances in Aroni Commercials Limited [2014 (2) TMI 659 - BOMBAY HIGH COURT] or for that matter, the other decisions relied upon by the Petitioner, were entirely different. Those were mainly cases of change of opinion. The discrepancies and explanations which are now sought to be furnished were not the subject matter of such decisions.
We decline to admit this petition. However, we clarify that all contentions of all parties are kept open.
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2025 (3) TMI 1012
Denial of exemption u/s 11 - rejecting the application for condonation of delay in filing Form No. 10 - HELD THAT:- It is not in dispute that the petitioner has explained in detail the cause for late filing of Form 10B. In similar circumstances, this Court in case of Parshwanath Bhakti Vihar Jain Trust [2024 (9) TMI 292 - GUJARAT HIGH COURT] relying upon the decision in case of Sarvodaya Chaitable Trust [2021 (1) TMI 214 - GUJARAT HIGH COURT] held that furnishing of audit report along with refund filed is to be treated as procedural requirement though it is mandatory in nature but substantial compliance is required to be made. It was further observed that the approach of the authority in such type of case should be equitable and judicious. It is also not in dispute that the petitioner trust for past many years has substantially satisfied the conditions for claiming the exemption which should not be denied for non filing of Form 10B in time. The petitioner has explained the reason for delay in filing Form 10B due to illness of the Accountant who was on leave for a long time due to medical reasons.
Petition is allowed. The impugned orders are quashed and set aside. The matter is remanded back to the respondent to pass appropriate order to condone the delay in filing the Form 10B for AY 2017-2018 by the petitioner.
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2025 (3) TMI 1011
Reopening of assessment - assess income of an alleged Association of Persons (AOP) formed between two companies - HELD THAT:- The impugned reopening notice in this case was admittedly issued to the Petitioners on the premise that together, they constitute an AOP. This premise would no longer hold good, given the ITAT’s finding that no AOP existed. Since the base of the impugned reopening notice no longer survives, the impugned reopening notice will have to be set aside and is hereby set aside. Decided in favour of assessee.
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2025 (3) TMI 1010
Reopening of assessment u/s 147 - no valid serving of notice to assessee - HELD THAT:- Revenue has not been able to demonstrate that the impugned notice u/s 148A (b); impugned order under section 148A (d) and impugned notice u/s 148 were ever served upon the assessee at its registered office at Singapore. The fact that the assessee has no Permanent Account Number nor any credentials in the IT Portal has neither been contradicted nor controverted by the revenue. Undisputedly, the assessee is a foreign company which is a resident of Singapore and appears to be covered under the provisions of DTAA.
Since the facts and incidental issues raised by the assessee has neither been placed before the concerned AO nor considered in the absence thereof, we deem it apposite not to enter into the examination of substantial question of income received for Maintenance, Repair, and Overhaul (MRO) services rendered outside India inasmuch as the notice u/s 148A (b)
requiring the assessee to provide relevant information and satisfactory explanation appears to have not been received by the assessee.
Thus, we remit the matter to the stage of consideration of notice u/s 148A (b) of the Act.
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2025 (3) TMI 1009
Reopening of assessment u/s 147 - Reasons to believe - nexus between the transaction and the alleged escapement of income - as argued no failure on the part of the petitioner to disclose fully and truly all material facts during the course of the regular assessment - HELD THAT:- AO while recording the reasons has failed to take into consideration the report of the Investigation Wing in true perspective. It also appears that the AO while recording the reasons for reopening has not even considered that the amount mentioned in the reasons regarding the AY 2013-14 is nothing but total of debit and credit side of the account of M/s. Affluence Commodities Pvt. Ltd. from the books of accounts of the petitioner.
Similarly for AY 2014-15 also the reasons recorded reflects the total of the debit and credit side of the account of the said Company from the books of accounts of the petitioner meaning thereby that the AO without application of mind and contrary to any information in his possession has issued the impugned notices in a mechanical manner.
This Court in case of Paresh Babubhai Bahalani [2023 (10) TMI 1203 - GUJARAT HIGH COURT] has referred to and relied upon the decision in the case of Bharatkumar Nihalchand Shah [2023 (3) TMI 1415 - GUJARAT HIGH COURT] wherein, it is held that non-specific and general reasons without establishing the rational nexus between transaction and the escapement of income are not valid for assumption of jurisdiction to reopen the assessment.
r proceeded to record that the petitioner has failed to offer the income as deemed income amounting to Rs. 14, 03, 19, 900/- which is nothing but total of debit and credit side of the account from the books of account maintained by the petitioner of the said company. It is therefore, evident that the reasons recorded by the respondent are on the borrowed satisfaction without forming an independent opinion and therefore, the assumption of the jurisdiction to reopen the reassessment under Section 147 of the Act is bad in law.
Reassessment proceddings set aside in absence of any independent satisfaction reflected in the reasons recorded on the basis of the information received by the AO. Decided in favour of assessee.
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2025 (3) TMI 1008
Reopening of assessment u/s 147 - Reason to believe - disallowing certain percentage of expenses on samples given to doctors on the ground that same constitutes sale promotion expenses incurred on the doctor - HELD THAT:- We fail to understand if these items were not disallowed during the course of the assessment proceedings, how there can be an allegation that the petitioner has failed to disclose full and true all material facts necessary for the assessment. If at all there has been failure, it is on the part of the assessing officer of not disallowing the same. Certainly, for such a failure of the assessing officer, reopening cannot be initiated after expiry of four years from the end of the relevant assessment year.
In the order rejecting the objection, the officer has not rebutted the specific plea of the petitioner that there was no failure to disclose fully and truly all material facts necessary for the assessment. The order merely reproduces the reasons as recorded, certain provisions of the reassessment and the decisions.
Absence of any rebuttal of the specific objection raised by the petitioner, it shall be deemed that the respondent has accepted that there was no failure to disclose fully and truly all material facts necessary for the assessment.
Thus, the impugned notice is required to be quashed on the non fulfillment of the condition prescribed in first proviso to section 147 of the Act itself. Decided in favour of assessee.
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2025 (3) TMI 1007
Delay of 371 days’ in filing the appeal before the ITAT - Assessee has assigned the reason that the appellant came to knowledge about the impugned order on 02.05.2024 and immediately, thereafter he filed the appeal before the ITAT on 23.05.2024
HELD THAT:- The Supreme Court vide its Order in the matter of Vidya Shankar Jaiswal [2025 (1) TMI 1526 - SC ORDER] while setting aside the order of this Court rejecting the appeal on the ground of delay, has held that the High Court ought to have adopted justice oriented and liberal approach by condoning the delay of 166 days.
As per reason shown by the appellant/assessee coupled with the fact though the application of the appellant was supported by the affidavit, but the revenue did not file any counter-affidavit controverting the reason assigned by the assessee and, as such, the delay of 371 days occurred in filing the appeal remained uncontroverted, therefore, the delay of 371 days occurred in filing the appeal being bona fide and unintentional deserves to be and is hereby condoned subject to payment of cost of 5, 000/- by the appellant to the High Court Legal Services Committee and the appellant is also directed to file proof thereof within 15 days from today. The substantial question of law is answered accordingly.
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2025 (3) TMI 1006
Tribunal not recalling the ex-parte order passed when there was a reasonable cause for non-appearance on the date of hearing of the appeal - HELD THAT:- We find that the tribunal had committed a factual mistake in holding that the assessee did not appear before the CIT(A) when the fact remains that the assessee had appeared before the appellate authority and contested the proceeding on merits.
We have gone through the order passed by the Appellate Authority and we find that the Appellate Authority has not discussed any facts nor dealt with the grounds which have been raised by the assessee, though the grounds have been extracted in the order passed by the Appellate Authority.
Thereafter, Appellate Authority referred to the various decisions and ultimately, the conclusion holding that the assessee had not proved the three ingredients required u/s 68 of the Act.
We are of the view that there is no discussion on facts despite the assessee having appeared before the Appellate Authority. Therefore, we are of the view that the assessee should not be left remediless and should be given an opportunity to put forth their case on merits. Since the assessment proceedings were based on judgment assessment, we are inclined to remand the matter back to the Assessing Officer for a fresh consideration.
The order passed by the learned Tribunal, the order passed by the Appellate Authority and the assessment order are set aside and the assessment is restored to the file of the Assessing Officer, who shall complete the assessment after affording an opportunity of personal hearing to the authorized representative of the assessee.
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2025 (3) TMI 1005
Levy of penalty u/s 271 (1) (c) - addition of unexplained cash credit u/s. 68 on sale of shares of penny stock falsely claimed by the assessee as Long-Term Capital Gains exempt u/s 10(38) -Tribunal while granting relief to the assessee, made an observation that for levying penalty u/s 271 (1) (c), stricter yardstick of culpability is required to be established.
HELD THAT:- This finding of ITAT, in our view, is not legally sustainable. We support our conclusion by placing reliance on the decision of Union of India & Ors. vs. Dharamendra Textile Processors & Others [2008 (9) TMI 52 - SUPREME COURT] held that the explanations appended to Section 271 (1) (c) of the Income Tax Act entirely indicates the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return.
It was further held that the judgment in Dilip N. Shroff [2007 (5) TMI 198 - SUPREME COURT] has not considered the effect and relevance of Section 276-C of the Income Tax. The object behind the enactment of Section 271 (1) (c) read with explanations indicates that the said Section has been enacted to provide for a remedy for loss of revenue. The penalty under the proceedings is a civil liability and willful concealment is not an essential ingredient for attracting civil liability as in the matter of prosecution under Section 276-C of the Income Tax Act.
Accordingly, it was held that the decision in Dilip N. Shroff’s case was not correctly decided but SEBI’s case has analyzed the legal position in the correct perspective. In the light of the decision in Dharamendra Textile Processessors, the observations made by the learned Tribunal which appears to suggest that the culpability has to be established does not lay down the correct legal principle.
Therefore, we are inclined to set aside that portion of the order passed by Tribunal while interpreting the provisions of section 271 (1) (c) of the Act as it is not in consonance with the decision of Dharamendra Textile Processors [supra]
With regard to the penalty which has been imposed on the assessee, considering that the penalty is less than Rs. 5 lakhs and the assessee being an individual, we do not propose to interfere with the relief granted by the learned Tribunal to the assessee by deleting the penalty. Therefore, to that extent the order is affirmed. Decided in favour of revenue.
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9911796707
