TMI Tax Updates - e-Newsletter
January 20, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Rectification of mistake - Excess input tax credit availed in GSTR 3B - When a show cause notice is not contested, the resultant order passed assumes the nature of an agreed order and a rectification application will not lie to correct a factual mistake therein. - HC
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Income Tax:
Reopening of assessment - validity of order passed u/s 148A(d) - As noted that the assessee had repeatedly sought for adjournments which would show that the assessee attempted to drag the matter fully knowing well that the assessment will be time barred. - In terms of Clause (c) of Section 148A, the assessing officer has to consider the reply of the assessee in response to the notice issued under Clause (b). We find from the order dated 07.05.2023 passed under Section 148A(d) of the Act that the assessing officer has considered reply/replies furnished by the assessee in response to the notice issued - The stipulation under Clause (d) has been complied with by the AO - HC
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Income Tax:
Exemption u/s 11 - assessment of trust - cash donations were anonymous as contemplated u/s 115 BBC - ITAT observed that, the inspection report mentioned about donors having not found on the given address. There were incomplete and vague addresses. It has drawn adverse inference against the appellant and has concluded that the decision of the assessment officer holding the donations to be anonymous u/s115 BBC of the Act was justified on facts and in law. - Demand confirmed - HC
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Income Tax:
Addition u/s 68 - bogus LTCG on shares - sharp scrips gain/prices - In fact, the brokers’ credibility was also doubted by the Assessing Officer and for which the assessee has not given any explanation before any of the Authorities. Thus, the Assessing Officer and the CIT(A) has rightly denied the LTCG exemption u/s 10(38) of the Act to the assessee. - AT
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Income Tax:
Rectification of mistake u/s 154 - short deduction of TDS and interest on short deduction - Revenue cannot charge the assessee and also collect the same amount from the recipients. - AT
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Income Tax:
Applicability of TDS provisions in respect of provision for expenses made at the end of the year - Merely because the assessee had voluntarily disallowed the expenses u/s 40(a)(ia) of the Act in the return, the same would not automatically enable the ld. AO to treat it as "assessee in default" u/s 201(1) of the Act and consequentially levy interest u/s 201(1A) of the Act. - AT
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Income Tax:
Wherein the addition u/s 68 was proposed on the basis of entries in the Bank Passbook, which cannot be treated as books of accounts of the assessee, therefore, the contention of the Ld. AR that addition u/s 68 cannot be made when no books of accounts are maintained by the assessee is worth concurring which is well supported by the analogy and well settled principle of law drawn by Hon’ble Bombay HC - AT
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Income Tax:
Validity of original assessment pursuant to revisional order passed by the CIT (Exemptions) - Doctrine of merger - By virtue of the passing of the CIT(A)’s aforesaid order under appeal, the original assessment order got merged therein. The law is very clear in this regard - AT
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Income Tax:
Disallowance of provision for expenses - Since, assessee could not file any evidence and also basis for quantifying amount of provision made for expenses, in our considered view said provision can only be treated as unascertained liability, which is not crystallized during the impugned assessment year. - AT
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Income Tax:
Addition u/s 69 - unexplained investment - when no evidence has been brought on record to substantiate the allegation that the investment is from unexplained sources and rather as per the assessment order passed by the AO, the same has been considered as an expenditure. Therefore, no addition could have been made in the absence of an independent, corroborative evidence.- AT
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Income Tax:
Nature of loss - commodities transactions - Addition made u/s 43(5) - speculative loss or business loss - CIT(A) rightly concluded that all the transactions undertaken by the Assessee were not non-speculative in nature and thereby discarded the incorrect bifurcation made by the Assessing Officer and allowed the set off of loss - AT
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Income Tax:
Income from House property - Vacancy can only follow a state of actual letting, envisaged u/ss. 23(1)(b)/(c). Reduction due to vacancy u/s. 23(1)(c) would accordingly follow a condition of actual letting, absent in the instant case for the top floor of the building. A part of the property referred to therein is one which admits of an actual and separate letting. The AV of the 7th floor would therefore be computed u/s. 23(1)(a), while that for other floors, being let, u/s. 23(1)(a) r/w ss. 23(1)(b)/(c). - AT
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Income Tax:
Revision u/s 263 - assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue. First of all, the AO has considered the issue of exemption u/s. 11 of the Act, while completing assessment u/s. 143(3) of the Act, which is evident from the assessment proceedings, where, the AO has called for various details, and in reply, the assessee has submitted relevant details.- AT
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Customs:
Time limitation - suppression of facts or not - The impugned proceedings under Section 124 of the Act, 9 to 11 years after the date of the subject import cannot stand the scrutiny of reasonableness/arbitrariness inasmuch as any proceedings under Section 124 of the Act, 9 to 11 years after the import is unreasonable. Thus the impugned proceedings are set aside. - HC
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Customs:
Jurisdiction - Power of DRI to issue SCN - Recovery of duties of customs u/s 28 AAA of Customs Act - Though DGFT has issued show cause notices on various dates and an order dated 23.10.2020 came to be passed by DGFT placing the petitioner under the Denied Entities List, the same were withdrawn in entirety by virtue of letter dated 20.09.2021. It is also undisputed that till date, DGFT has not initiated any steps to cancel the license issued by them and hence, this Court is of the considered view that the show cause notice dated 24th November 2020 issued by the second Respondent is without any jurisdiction. - HC
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Corporate Law:
A Company cannot refuse `Transmission of Shares’, once the `legal heirs’ proves his/her entitlement to them, through a `Probate’, a `Succession Certificate’. It is to be pointed out that `transfer’ is an act of parties or law by which the title to the party is conveyed from one person to another. This would lapse by `Operation of Law’ or `Succession’. `Transmission of Shares’ on the basis of `will’ can raise complicated issues which require an `evidence’, to be read by the parties and need to be determined by a Court of Law. - AT
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Service Tax:
Recovery of Service Tax dues, of a Company which is under liquidation applying IBC, 2016 - It is thus beyond the two years preceding the commencement of liquidation date and the Company having been liquidated and the respondent having failed to lodge any claim under IBC at any stage of the proceeding under IBC and the sale proceeds having been distributed in terms of the waterfall it may not be permissible to sustain the impugned demand notice. - HC
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Service Tax:
Demand of service tax on Management, Maintenance or Repair Services - Export of services - Place of provisions of services - it is not disputed that the services are provided outside India and therefore no service tax can be demanded under this head also and the demand under the head of Management, Maintenance or Repair Services also set aside. - AT
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Central Excise:
Area Based Exemption - Benefit of budgetary scheme - The respondent authorities are therefore directed to examine the individual claims of the petitioners and if they are found to have satisfied the criteria and the eligibility laid down under the NEIIPP, the benefits of budgetary support scheme as had been extended to other similarly situated units shall also be extended to the petitioner units. - HC
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Central Excise:
Exemption to cement supplied to industrial / institutional consumers in 50 kg. bags - the allegation in the SCN as to whether the appellant has cleared cement to industrial / institutional consumers is too vague to be the basis for confirmation of demand. Further, adjudication after such lapse of time alleging that the appellant has not furnished evidences to show that the clearances of such 50 kg. bags have been made only to industrial / institutional consumers, is not justified.- AT
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VAT:
If the department was not satisfied with the original adjudication order and/or the order by which review proceeding was dropped, it was open for the department including Commissioner to direct the competent authority to prefer statutory Appeal and/or statutory Revision before the competent authority in terms of Section 79 and 80(1) of the JVAT Act. However, in our opinion, it was not open for the Revenue particularly, Additional Commissioner, Commercial Taxes to initiate suo-motu revision proceeding, that too, on the mere filing of a letter by writ petitioner-DCCT. - HC
TMI Short Notes
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2024 (1) TMI 874
Seeking grant of Regular Bail - issuing fake bills by creating paper firms - HELD THAT:- There is no denial to the fact that the economic offences constitute a separate class of their own, but trite it is that presumption of innocence is one of the bedrocks on which the criminal jurisprudence rests. Time and again, Apex Court has reiterated the need to integrate the right of investigating agencies to have effective interrogation of the accused with the right of liberty of the accused. The incarceration suffered by the petitioner, the maximum punishment prescribed under the law and the fact that investigation already stands concluded, and in view of dictum of law laid down in Satender Kumar Antil's case [ 2022 (8) TMI 152 - SUPREME COURT] , the present petition is allowed.
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2024 (1) TMI 873
Maintainability of petition - availability of alternative remedy - Penalty - Seeking release of detained goods - areca nuts (supari) - HELD THAT;- The goods being areca nuts (supari) have been released and handed over to authorized persons. The release order dated 08.07.2023 has also been placed on record apart from the fact that an order has already been passed on 30.05.2023 imposing the penalty on the ground that the petitioner-firm was not involved in the business of areca nuts and that both the firms were not involved in the business of supply of areca nuts but were engaged in the business of stationary items etc. In such circumstances, once the authorities have already passed the order as per the statutory provisions it would be open to the petitioner to avail his statutory remedy of appeal under the provisions of the Act. The Apex Court in The State of Punjab Vs. Shiv Enterprises others, [ 2023 (1) TMI 842 - SUPREME COURT] held that it is not for this Court to entertain the writ petitions against the show cause notice issued. The writ petition disposed off.
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2024 (1) TMI 872
Cancellation of GST registration of the petitioner with retrospective effect - registration obtained by fraud, wilful, mis-statement and suppression of facts - HELD THAT:- In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, 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. Taxpayer s registration cannot be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant without any cogent reason. It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period - it is not considered apposite to examine this aspect but assuming that the respondent s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. Keeping in view the fact that petitioner does not wish to carry on its business, the order dated 16.01.2023 is modified to the extent that the registration stands cancelled with effect from 23.12.2022 - petition disposed off.
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2024 (1) TMI 871
Disallowance of Input tax credit on supplies received from the supplier/dealer - mismatch in the GSTR 3B filed by the petitioner and GSTR 2A in respect of the input tax credit - HELD THAT:- The impugned orders in Exhibits P-4 and P-6 are set aside and the matter is remitted back to the assessing authority to consider the case of the petitioner afresh in the light of the Circular No. 183/15/2022-GST dated 27.12.2022. Petition allowed by way of remand.
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2024 (1) TMI 870
Violation of principles of natural justice - petitioner was not afforded any opportunity of personal hearing and not allowing such personal hearing despite specific request - Recovery of outstanding dues - HELD THAT:- Having regard to the facts projected by the petitioner and the provisions contained in sub-section [4] of Section 75 of the GST Act, 2017, the Court is of the view that the petitioner has been able to make out a prima facie case for interim relief. It is accordingly provided that till the next date of listing, there shall not be any coercive action by the respondent authorities by way of any proceeding against the petitioner to recover alleged outstanding dues in terms of the impugned order dated 10.12.2023.
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2024 (1) TMI 869
Rectification of mistake - Excess input tax credit availed in GSTR 3B - HELD THAT:- What is sought by the appellant, in effect, is the review of the said assessment order. The appellant made no case for rectification. The rectification under section 161 of the GST Act is permissible only when there are errors apparent on the face of the record, in a situation where the show cause notice was contested, which is not the case here. When a show cause notice is not contested, the resultant order passed assumes the nature of an agreed order and a rectification application will not lie to correct a factual mistake therein. There are no merit in the appeal. Accordingly, it is dismissed.
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2024 (1) TMI 868
Profiteering - Respondent had not passed on the benefit of input tax credit (ITC) to him by way of commensurate reduction in the price of the flat purchased - HELD THAT:- It is clear from the DGAP's Report that the Respondent had started the above project in the post-GST regime as the commencement certificate was issued to him on 23.08.2018 by the Pune Municipal Corporation and there wasn't any demand raised by the Respondent in the pre-GST regime. There was no price history of the units sold in the pre-GST regime that could be compared with the post-GST base prices to establish whether there was any profiteering by the Respondent or not. Hence, there was no pre-GST turnover or ITC which could be compared with the post-GST turnover or ITC. On this basis, the DGAP has reported that the Respondent had neither benefited from additional ITC nor had there been a reduction in the tax rate in the post-GST period and therefore it did not qualify to be a case of profiteering. Therefore, the Commission observes that no benefit of additional ITC during the GST period as compared to the pre-GST period has accrued in the case of this Project to the Respondent, which he is obliged to pass on to his buyers. Hence, the provisions of Section 171 of the CGST Act, 2017 are not attracted in this case and there is no requirement of any commensurate reduction in the prices of the units in the above project by the Respondent. Applicant No. 1 could have availed the above benefit only if the above project was under execution/implementation before the date of GST implementation viz., 01.07.2017. Hence, the allegations made by the Applicant No. 1 are incorrect and therefore, the same cannot be accepted. The Commission finds that the provisions of Section 171 (1) of the CGST Act, 2017 are not attracted in the Respondent's project Galaxy . Therefore, the proceedings in the present case are hereby dropped.
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Income Tax
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2024 (1) TMI 875
Computation of capital gains on the sale of a capital asset - description of the previous owner and the period of holding of the asset by the assessee - Benefit of indexed cost of inflation - determination of indexed cost of acquisition - As decided by HC [ 2012 (2) TMI 733 - DELHI HIGH COURT] expression held by the assessee used in Explanation (iii) to Section 48 has to be understood in the context and harmoniously with other Sections. The cost of acquisition stipulated in Section 49 means the cost for which the previous owner had acquired the property. The term held by the assessee should be interpreted to include the period during which the property was held by the previous owner, thus decided against the Revenue. HELD THAT:- As petitioner submitted that the special leave petition would not survive for further consideration owing to low tax effect. The submission of learned counsel for the petitioner is placed on record. In the circumstances, the Special Leave Petition is dismissed owing to the aforesaid reason.
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2024 (1) TMI 867
Assessment u/s 153A r.w/s 153C Rejecting the claim of agricultural income and treating the income as income from other sources - HELD THAT:- Following the earlier order passed by this Court in M/S NILAMBUR TRADERS [ 2023 (9) TMI 849 - SC ORDER] as held resistance to the notice by the assessee is very informal. As already noted, the said reply did not convince the assessing authority. No exception to the findings of fact recorded in this behalf is argued. Special leave petitions are also dismissed by holding that the High Court has rightly recorded that no substantial question of law arose in the appeals filed under Section 260A of the Income Tax Act, 1961. Decided against assessee.
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2024 (1) TMI 866
Reopening of assessment - validity of order passed u/s 148A(d) - case of the appellant is that the respondent assessing authority had failed to consider that information for several assessment years cannot be called for as has been done in the notice issued u/s 148A(b) and no information could be sought for separately for the assessment year 2018-2019 since the appeal is pending before the appellate authority and the re-assessment proceedings in relation to the said year has been challenged by the appellant before this court and by order dated 15.03.2022, the matter stood remanded back to the assessing officer. As contended that the respondent assessing officer did not conduct any independent investigation or enquiry under Section 148A(a) before initiating proceedings by issuance of a notice under Section 148A(b) - AO concluded that the assessee failed to produce any credible evidence to explain the source of cash deposits which had been pointed out in the notice issued and failed to substantiate the same with relevant entries in its books of accounts. HELD THAT:- On carefully going through the information which was furnished to the assessee in the form of an annexure to the said notice, it is seen that the assessing officer sought to initiate re-assessment proceedings only for the assessment year 2016-2017. It is no doubt true that the information which was received by the department pertaining to the three financial years have been set out but nonetheless, the re-assessment proceedings which have been proposed to be initiated pertained only to the assessment year 2016-2017. The assessee raised an objection in their reply dated 20.04.2023 stating that notice cannot be issued by clubbing three assessment years. On receipt of the reply, the assessing officer in no uncertain terms has clarified by email dated 20.04.2023 that they were required to submit the details of cash deposits made in a particular bank account in the name of the assessee during the financial year 2015-2016 relevant to the assessment year 2016-2017. The assessee would contend that the assessing officer sought to amend the notice dated 31.03.2023 by issuance of the email which is impermissible under law. The said contention raised by the assessee is devoid of any merits as the information which was furnished to the assessee though contained information pertaining to the three assessment years, the information called for in the notice dated 31.03.2023 pertained only to the assessment year 2016-2017. Thus, the email sent by the assessing officer dated 20.04.2023 cannot be construed to be an amendment of the notice dated 31.03.2023. Accordingly, such contention raised by the assessee is rejected. As noted that the assessee had repeatedly sought for adjournments which would show that the assessee attempted to drag the matter fully knowing well that the assessment will be time barred. The assessing officer was in fact reasonable and accommodated their requests for adjournment on two occasions and granted time till 30.04.2023. It is only after receiving the said information, the assessee sought to give a reply on merits on 29.04.2023 once again reiterating what had been stated earlier. The contentions raised by the assessee have been considered by the assessing officer and a reasoned order has been passed recording all facts and dealing with all the objections raised by the assessee. In terms of Clause (c) of Section 148A, the assessing officer has to consider the reply of the assessee in response to the notice issued under Clause (b). We find from the order dated 07.05.2023 passed under Section 148A(d) of the Act that the assessing officer has considered reply/replies furnished by the assessee in response to the notice issued under Clause (b).In terms of Clause (d), the assessing officer has to decide on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under Section 148 by passing an order with the prior approval of specified authority within the time framed. The stipulation under Clause (d) has been complied with by the assessing officer who has taken a decision, on the basis of the material available on record including the reply/replies given by the assessee and found that the case of the assessee for the assessment year under question namely 2016-2017 is a fit case to issue notice u/s 148 of the Act and prior approval of the specified authority has also been obtained. Thus, the provision of the Section 148A of the Act has been scrupulously followed by the assessing officer and there is no error in the decision-making process of this court to interfere. Thus we find that the challenge to the order passed under Section 148A(d) of the Act has to necessarily fail. Assessee appeal dismissed.
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2024 (1) TMI 865
Reopening of assessment u/s 147 - change of opinion - reasons to believe - Since there is no business activity during the year under consideration and project is yet to be commenced, hence the amount of financial cost along with depreciation and other expenses should be capitalized as preliminary expenses under the head work in progress and this fact was not verified by the assessing officer while finalizing the assessment - HELD THAT:- During the assessment proceedings, petitioner received a notice dated 21st June 2019 in which petitioner was called upon to provide working of depreciation claimed as per the IT Act and party-wise details (name, address and amount) of interest on unsecured loan claimed alongwith details of TDS compliance. Petitioner was also asked to provide party-wise details of unsecured loans alongwith compliance to requirement of Section 68 of the Act and also party-wise details of loan from NBFCS/others. Petitioner responded to the same and provided the details. Subsequently, petitioner received another notice dated 4th September 2019 u/s 142(1) of the Act calling upon petitioner to provide details of the loans, advances and deposits received and given in the format prescribed and also details of all expenses above Rs. 1 lakh debited under each head of Profit and Loss account alongwith comparative analysis with previous year s figures. Petitioner provided these details. It is true that in the assessment order there is no elaborate discussion regarding these items but there has been disallowance on interest on TDS amount debited to Profit and Loss account. This is an indication that the subject matter of financial cost and other expenses has been discussed during the assessment proceedings. As held in Aroni Commercials Limited [ 2014 (2) TMI 659 - BOMBAY HIGH COURT] once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. The only requirement is that the AO ought to have considered the objection now raised in the grounds for issuing notice u/s 148 during the original assessment proceedings. Therefore, it is obvious that the reopening of the assessment by impugned notice dated 30th March 2021 is merely on the basis of change of opinion of the AO from that held earlier during the course of assessment proceeding leading to the assessment order dated 20th December 2019. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. Thus this Hon ble Court be pleased to issue a writ of Certiorari calling for records pertaining to the impugned notice u/s 148 by the Respondent No. 3 and after going into the validity and legality thereof to quash and set aside the same.
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2024 (1) TMI 864
Validity of reopening notices issued u/s 148 and orders passed u/s 148A(d) - authority which sanctioned for issuance of order u/s 148A(d) is the authority u/s 151(i) and not u/s 151(ii) - Section 148 notice which has been issued by respondent No. 2 after the statutory period of four years, is not in the mandatory procedure prescribed under the Act - respondent has also raised a plea of alternative efficacious remedy - HELD THAT:- As regards the issue of alternative remedy, the coordinate Bench of this Court in Arvind Sahdeo Gupta [ 2023 (8) TMI 522 - BOMBAY HIGH COURT] has observed that if a jurisdictional issue is raised and the controversy is purely a legal one which does not involve any disputed question of fact, then the writ petition does not deserve to be thrown out threshold. The decision of the Apex Court in Chhabil Dass Agarwal [ 2013 (8) TMI 458 - SUPREME COURT] was distinguished by observing that the challenge in the said case was to the order of assessment, whereas the challenge before the Court was to the notice under Section 148 of the IT Act against which no statutory remedy is available. In the instant case, the challenge raised by the petitioner, that reopening without prior approval of Commissioner of Income Tax, goes to the root of the matter and hence the petition cannot be thrown out on the ground of alternative remedy. Validity of sanction, in Siemens Financial Services Pvt. Ltd. [ 2023 (9) TMI 552 - BOMBAY HIGH COURT] at the Principal Seat has held that the sanction ought to have been granted under Section 151 (ii) and not under Section 151(i) of the Act. Relying upon the said decision in Crompton Greaves Consumer Electrical Ltd [ 2023 (8) TMI 1419 - BOMBAY HIGH COURT] which related to the assessment year 2016-17, the Division Bench of this Court has quashed order under Section 148 A (d) as well as notice under Section 148 of the IT Act, since the authority which sanctioned issuance of order under Section 148 A (d) was the one under Section 151(i) and not under Section 151 (ii) of the Act. The case in hand is squarely covered by the decision of Siemens Financial Services Pvt. Ltd. (supra). The decisions relied upon by learned counsel for the respondents in support of the said contentions have already been considered by the Division Bench of this Court in the said decision. Hence, orders passed under Section 148(A)(d) as well as the notices issued under Section 148 of the I.T. Act are hereby quashed and set aside.
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2024 (1) TMI 863
Maintainability of appeal u/s 260-A - Exemption u/s 11 - assessment of trust - cash donations were anonymous as contemplated u/s 115 BBC - substantial question of law of fact? - HELD THAT:- Bearing in mind the inherent limitations in the light of the provisions of section 260A of the Act, it is to be noted at the outset that the issue regarding the exemption being claimed under section 11 cannot be said to be pure question of law which could be agitated in an appeal u/s 260A. As regards the factual dispute is concerned, we find no hesitation in concurring with the observations in the impugned judgment and order of the ITAT and the submissions of Mr. Sharma that by virtue of section 68 read with rule 46A, the onus is on the assessee to substantiate that the donations received by it are not anonymous donations. Once having borne in mind this aspect, it is quite apparent that at no point of time, the appellant was able to discharge this onus. Apart from the fact that it had even failed to file the returns, it had made some attempt to furnish some record and revenue had volunteered to verify genuineness by a sample check. Barring few instances, identity of the donors could not be confirmed in view of section 133(6). Pertinently, after the appeal was preferred before the first appellate authority a new set of donors list was furnished stating that the first list was submitted erroneously and still the enquiry did not result in identification of the donors. The appellant had pointed out about having received cash donations from 7145 donors. The result of the verification undertaken by the assessment officer to verify from some of the donors seeking confirmation did not yield results. Consequently the appellant had miserably failed to discharge the onus. Pertinently, during verification, 8 donors who were contacted denied to have paid any donation to the appellant. ITAT has observed that all these donations were received in cash from 7145 persons. Those were not found to have been deposited in the bank account. The letters issued under section 133(6) were returned unserved with the remarks address not found , insufficient address , addressee left . The inspection report mentioned about donors having not found on the given address. There were incomplete and vague addresses. It has drawn adverse inference against the appellant and has concluded that the decision of the assessment officer holding the donations to be anonymous u/s115 BBC of the Act was justified on facts and in law. No error or irregularity much less giving rise to any substantial question of law.
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2024 (1) TMI 862
Delay in filling appeal before the CIT(A) - delay in filing the appeal of 2929 days - assessee has stated that the reasons that the intimation was not served to the assessee but the assessee came to know about the intimation when the action of demand for recovery came to the knowledge of the assessee - A.R. submitted that the delay is due to the reasonable cause of bonafide belief about mistake which is rectifiable u/s. 154 and without any malafide intention to defraud Revenue - HELD THAT:- It is pertinent to note that though the delay is that of 2929 days but whether the intimation was rightly served to the assessee was not denied by the Revenue. In fact, the assessee has taken a measure of filing rectification application u/s. 154 and the same was also not entertained. AO has also suggested to file appeal and therefore the assessee after exhausting all the remedies has filed the appeal before the CIT(A). Thus, the delay in filing the appeal was not deliberate. These aspects have not been taken into account by the CIT(A). In fact, the assessee has filed the detailed affidavit explaining the delay before the CIT(A). This was also totally ignored. Therefore, we are condoning the delay in respect of the appeal filed before the CIT(A), the remaining matter to the file of CIT(A) for proper adjudication of the issues contested by the assessee in the appeal filed before the CIT(A). Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Appeal of the assessee is partly allowed for statistical purposes.
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2024 (1) TMI 861
Validity of reassessment proceedings - unexplained investments in the NCD [Non-convertible debentures] - HELD THAT:- NCDs were subscribed on 17.06.2014 by the assessee in a company name M/s Hindustan Power Projects P. Ltd. The assessee has also earned interest and that interest has been offered to tax in the assessment year 2015-16 and 201617 and the NCDs were redeemed in the month of September 2015 and October 2015 relevant to the assessment year 201718 and then transferred the funds from Deutesche Bank India, to J.P Morgan Bank in Singapore. Assessee has obtained form 15CB and filed form 15CA with regard to the said remittances to its J.P Morgan Bank account in Singapore. From the above it is apparent that the assessee has only repatriated the amounts invested in the earlier years and hence, no taxability arises during the year. In the case of the assessee company, neither has any income accrued or arisen or is deemed to accrue or arise under that for the assessment year 2017-18 nor any claim has been under any DTAA. It is apparent that the Assessing Office has not examined the relevant records before them wherein the interest earned has been duly offered to tax. Hence it can be concluded that there was no escapement of income during the year and hence, the notice issued u/s. 148 is considered to be void ab initio and consequently the assessment is treated as nullity. Assessee appeal allowed.
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2024 (1) TMI 860
Revision u/s 263 - taxability of income from interest on fixed deposits under the head Income from Other Source and thereby not allowing the deduction claimed u/s. 80P - HELD THAT:- It is pertinent to note that at the time of passing/completing the AO u/s 143(3) of the Act, the issue related to 80P(2)(d) claimed by Credit Co-operative Societies was very well governed by case of Surat Vankar Sahkari Sangh Limited, [ 2016 (7) TMI 1217 - GUJARAT HIGH COURT] and this issue was rightly claimed by the assessee at that juncture. Current invocation of Section 263 of the Act does not fulfil the criteria of assessment being erroneous or prejudicial to the interest of Revenue with the second view which is not allowable under Section 263 of the Act and its revisional powers. Hence, as held in earlier Assessment Years, wherein the order u/s 263 has been quashed in assessee s own case, the present Assessment Year will also be governed by the same contentions of the DR taken in submissions dated 08.12.2023, will not be applicable in toto as the assessee s case is governed by its own order for subsequent Assessment Year. Appeal of assessee allowed.
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2024 (1) TMI 859
Addition u/s 68 - bogus LTCG on shares - sharp scrips gain/prices - HELD THAT:- The assessee has purchased this scrip on 02.04.2012 and this fact was undisputed. There was exorbitant scrip increase in the period from 20.04.2012 to 27.12.2014 and prior to the suspension to the BSE Stock of the said scrip assessee has sold these shares on exorbitant market price. AO has doubted the genuineness of the purchase as well, therefore, the impact on market price while selling the said shares was doubted throughout by the Revenue. In fact, the purchase of said scrip appears to be bogus in nature as the scrip when having share price of Rs. 17.45 was purchased by the assessee at Rs. 20 per share. The reliance of the decision of Udit Kalra [ 2019 (4) TMI 834 - DELHI HIGH COURT] categorically treated the said scrip as non-genuine and bogus. The assessee s claim for LTCG cannot be simply proved on the Demat statement but the very effect of the price purchased and price sold of the said scrip determined the same. In fact, the brokers credibility was also doubted by the Assessing Officer and for which the assessee has not given any explanation before any of the Authorities. Thus, the Assessing Officer and the CIT(A) has rightly denied the LTCG exemption u/s 10(38) of the Act to the assessee. Appeal of the assessee dismissed.
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2024 (1) TMI 858
Exemption u/s 11 - Rejecting the registration u/s 12AA - g enuineness of the activity undertaken by the society i.e., selling of medicines or charity activities have not been proved, therefore, the Ld. CIT(E) rejected the registration - HELD THAT:- Considering the facts and circumstances that the assessee has produced the documents in support of the claim for registration and also the copy of the financials for the period ended 31/03/2019, we deem it fit to remand the matter to the file of the AO with direction to consider the documents produced by the appellant including financial statement in terms of judgment of Hon ble Supreme Court in the case of PCIT vs. Ahmedabad Urban Development Authority ( 2022 (10) TMI 948 - SUPREME COURT ). Appeal filed by the assessee is partly allowed for statistical purposes.
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2024 (1) TMI 857
Disallowance of claim of brought forward loss - considering the revised return of income filed u/s 139(5) to belated return of income filed u/s 139(4) and thereby denying assessee to carry forward the losses - HELD THAT:- Counsel has taken us through the original return filed for the Assessment Year 2019-20 dated 26/11/2019 which depicts that, the assessee has filed the return well within the time limit specified under Explanation 2 to Section 139(1) of the Act which is 26/11/2019. The Ld. CIT(A) by recording wrong date of filing of the return by the assessee i.e. 20/02/2020 , for AY 2019-20 erroneously held that the assessee had filed the return belatedly, which ultimately resulted in not allowing the loss claimed by the assessee for Assessment Year 2019-20. Considering all we are of the opinion that the Ld. CIT(A) has committed error in not allowing the carry forward of losses accordingly, we direct the A.O. to allow the assessee to carry forward the loss for the Assessment Year 2019-20 as claimed by the assessee. Appeal of assessee allowed.
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2024 (1) TMI 856
Rectification of mistake u/s 154 - short deduction of TDS and interest on short deduction - As per the rectification application assessee had contended that the demand raised by the CPC vide order u/s 200A was not justified in view of the fact that the deductees have already deposited the income tax on its entire income and discharged their income tax liability - CPC u/s 154 of the IT Act rejected the contention of the assessee and recomputed the demand - HELD THAT:- The assessee had placed reliance on the decision of the Hon'ble Supreme Court in the case of Hindustan Coco Beverages Pvt. Ltd. ( 2007 (8) TMI 12 - SUPREME COURT] - The assessee has contended that the demand raised by the CPC was a mistake apparent from record and the CPC should have rectified the same u/s 154. In a given case where a person has not deducted the TDS and claimed the benefit of the Hon ble Supreme Court decision in the case of Hindustan Coco Beverage Pvt. Ltd., the fact whether the deductees have already deposited the income tax on its entire income is a matter which requires verification. Revenue cannot charge the assessee and also collect the same amount from the recipients. Hence in the interest of justice, we remand the matter to the file of the DCIT(TDS) to examine the issue in toto and rectify the demand notice. Further, we also direct that the assessee DCIT(TDS) shall endeavor to obtain the relevant details to examine the fact of inclusion of the relevant income in the total income of the recipients. The process of rectification u/s. 154 be completed within 180 days from the date of this order, as the matter has not been resolved for the last ten years. Appeal of the assessee is allowed for statistical purpose.
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2024 (1) TMI 855
Reopening of assessment - investment made by the Appellant towards subscribing to equity shares treated as undisclosed business income earned in India and should be taxed at the rate of 40% as per the provisions of the Act - HELD THAT:- We find that the assessee has remitted an amount Rs. 28.82 crores and also filed form 15CA from which the Revenue came to know the information pertaining to the remittances. From the above reasons nothing could be deciphered has to how the AO come to conclusion of escapement of income. The case has been reopened just because of assessee made remittances which is from the sale of investments made by the assessee. Though the merits of the matter is relevant at the time of reopening, the Assessing Officer at the stage of reopening is required to form only a prima facie believe are satisfaction that income chargeable to tax has escapement assessment. In this case we don t find any such prima facie satisfaction from the reasons recorded. Hence it can be concluded that there was no escapement of income during the year and hence, the notice issued u/s. 148 is considered to be void ab initio and consequently the assessment is treated as nullity. Appeal of the assessee is allowed.
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2024 (1) TMI 854
Levy of penalty u/s 272A(2)(k) - Delay on the part of the assessee to file the TDS returns in time - technical venial breach or willful breach - Quarterly TDS returns were suo moto filed by the assessee after due remittance of TDS with applicable interest without receiving any notice from the income tax department, thus as pleaded that there was only a technical venial breach committed by the assessee - HELD THAT:- We find that the assessee had duly explained the reasons for the delayed filing of TDS returns. The reasons explained by the assessee were not found to be false by the revenue. We find that the assessee had already suffered the interest u/s 201(1A) of the Act for the late remittance of TDS. Hence there is no loss to the exchequer by the delayed filing of TDS returns by the assessee. For a mere technical venial breach, the assessee should not be invited with penalty u/s 272A(2)(k) of the Act. Our view is further fortified by the decision of Haryana Distillery Ltd vs JCIT [ 2018 (9) TMI 289 - ITAT DELHI] . Thus we hold that this is not a fit case for levy of penalty u/s 272A(2)(k) of the Act - Decided in favour of assessee.
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2024 (1) TMI 853
Short deduction of TDS - payments made to doctors - TDS provisions u/s 194J or 192 - proceedings u/s 201(1) / 201(1A) of the Act were initiated on the assessee and differential rate of TDS was sought to be collected from the assessee by treating it as assessee in default - HELD THAT:- CIT(A) observed that the same issue had already been decided in favour of the assessee by this Tribunal [ 2015 (5) TMI 931 - ITAT DELHI] for Asst Year 2009-10 and accordingly held that the payments to doctors would be covered only u/s 194J and not u/s 192 of the Act. We find that the relief has been granted by the ld. CIT(A) by following the Tribunal order passed in assessee‟s own case for the Asst Year 2009-10 referred supra. We also find identical view has been taken for Asst Year 2011-12 by this Tribunal [ 2017 (10) TMI 681 - ITAT DELHI] . Hence we do not find any infirmity in the order passed by the ld. CIT(A) in this regard. Accordingly, the Ground Nos. 1 to 3 raised by the revenue are dismissed. Applicability of TDS provisions in respect of provision for expenses made at the end of the year - assessee treated as assessee in default u/s 201(1) - HELD THAT:- Once there is a categorical finding that the assessee had not credited the corresponding liability for expenses to the account of the concerned vendors who had rendered the services, the payees become non-identifiable and hence there is no question of applicability of TDS provisions on the same. Merely because the assessee had voluntarily disallowed the expenses u/s 40(a)(ia) of the Act in the return, the same would not automatically enable the ld. AO to treat it as assessee in default u/s 201(1) of the Act and consequentially levy interest u/s 201(1A) of the Act. The provisions of section 40(a)(ia) and section 201(1) / 201(1A) of the Act are mutually exclusive. In any case, there is no estoppel against the statute. We find that the issue in dispute is squarely addressed by the Co-ordinate Bench of Delhi Tribunal in the case of HT Mobile Solutions Limited vs JCIT (OSD) [ 2023 (5) TMI 1212 - ITAT DELHI] to hold that the assessee cannot be treated as assessee in default u/s 201(1) of the Act and no interest is chargeable u/s 201(1A) of the Act on the same. Decided in favour of assessee.
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2024 (1) TMI 852
Business expenditure u/s 37(1) - transaction documents as referred to in the Framework Agreement require to be seen to find out the true nature and character of the loan - whether for acquiring capital asset or for repayment of liabilities? - HELD THAT:- We find, as per submissions of DR, it is the case of the Revenue that various agreements, which are not produced at earlier stages need to be examined for arriving at a proper conclusion on assessee s claim of business expenditure. Since, the documents referred to by learned Departmental Representative were never called for and examined by the departmental authorities, in our view, in the interest of justice, the issue arising for consideration needs to be restored back to the AO for de novo adjudication. AO, if so desires, may call upon the assessee to furnish the documents, which he requires to examine for ascertaining the true nature and character of the expenditure. On examination of such documents, the Assessing Officer may decide the issue after providing due and reasonable opportunity of being heard to the assessee. Appeal is allowed for statistical purposes.
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2024 (1) TMI 851
Deduction u/s. 80P(2)(a)(i) - interest and dividend incomes received by the assessee, a primary agricultural credit society under the Kerala Co-operative Societies Act, 1969 (Kerala Act) from Ernakulam District Co-operative Bank as income from other sources u/s. 56 - HELD THAT:- Revenue authorities have, we find, denied the assessee s claim in view of the decision in Totgar s Co-operative Sales Society Ltd. [ 2010 (2) TMI 3 - SUPREME COURT] which, as argued by Shri Ramdas, the learned counsel for the assessee, stands considered in Peroorkkada Service Co-operative Bank Ltd. [ 2021 (12) TMI 1084 - KERALA HIGH COURT] The entire premise of the decision in Totgars Co-operative Sales Society(supra), is whether the income arising to a society on it s deposits with other co-operative society/bank arises to it in the normal course of business or is on it s surplus funds for the time being. The Apex Court found it to be latter, so that the income was not assessable u/s 28, i.e., as business income, but only as income from other sources, as was by the Revenue u/s. 56. The issue of the same being, in the alternative, deductible u/s.80P(2)(d) of the Act did not come up for consideration before it. Even if, therefore, as the Revenue contends, the income arises to the assessee on it s surplus funds and, accordingly, is assessable u/s. 56 of the Act, the same, where otherwise eligible, stands to be deducted u/s.80P(2)(d) of the Act. Continuing further, whether assessable as business income or otherwise, where the same forms part of the gross total income, the same, on satisfaction of the condition/s therefor, would qualify for deduction under the relevant clause of section 80P of the Act. The matter has been explained by the Cochin Bench per it s decisions in Mundakkayam SCB Ltd. v. ITO [ 2024 (1) TMI 766 - ITAT COCHIN] and ITO v. The Adichanalloor Farmers SCB Ltd. Ors [ 2023 (8) TMI 1417 - ITAT COCHIN] also expressing it s view in its respect, even as the decision in Peroorkkada Service Co-operative Bank Ltd. [ 2021 (12) TMI 1084 - KERALA HIGH COURT] would in any case hold. The impugned sum accordingly stand to be deducted u/s.80P(2)(d) of the Act.
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2024 (1) TMI 850
Estimation of income - Bogus purchases - HELD THAT:- AO has himself stated that it cannot be said that assessee had not made purchases but, according to the AO, purchases were made from parties different than the parties entered in the books of account. On this account, AO has made addition for bogus purchases @ 25% of the purchases. This can only be said to be surmise. It is settled law that no addition is permissible on the basis of surmise and conjecture. When corresponding sales have been accepted, disallowance for bogus purchase is not sustainable. Further, ld. CIT (A) vide his elaborate order has dealt with all the issues raised by the AO in his assessment order and has come to the conclusion that the addition on account of bogus purchases is not sustainable. We do not find any infirmity in the well reasoned order of ld. CIT (A). We further note that ITAT in assessee s own case [ 2023 (10) TMI 188 - ITAT DELHI] has deleted the addition on bogus purchases as held FAA was justified in deleting the additions made on account of nongenuine purchases. Once the purchases are held to be genuine, then there cannot be any doubt regarding manufacturing activity of the assessee. Therefore, the manufacturing expenses claimed by the assessee have to be allowed. In this view of the matter, we do not find any infirmity in the decision of learned Commissioner (Appeals). Decided against revenue.
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2024 (1) TMI 849
Unexplained cash credit u/s 68 r.w.s. 115BBE - assessee not maintaining books of accounts - HELD THAT:- As evident from the material available before us that the assessee has not maintained any books of accounts, neither she was required to maintain books of accounts as prescribed under the provisions of I.T. Act. Since her source of income are only salary, house property and other sources. It is also a fact that the addition on account of unexplained cash credit has been made u/s 68 r.w.s. 115BBE by the Ld. AO, which has been further affirmed by the Ld. CIT(A) without observing that the addition should not have been made u/s 68. Contention of the revenue based on judgment of Smt. Gloria Eugenia Rynjah Banerji [ 2023 (8) TMI 1418 - ITAT DELHI] cannot be subscribed to as following the judicial discipline we are bound to follow the ratio of law and analogy drawn by H Bhaichand N. Gandhi [ 1982 (2) TMI 28 - BOMBAY HIGH COURT] which has not been considered while decision was offered by the tribunal. Thus wherein the addition u/s 68 was proposed on the basis of entries in the Bank Passbook, which cannot be treated as books of accounts of the assessee, therefore, the contention of the Ld. AR that addition u/s 68 cannot be made when no books of accounts are maintained by the assessee is worth concurring which is well supported by the analogy and well settled principle of law drawn by Hon ble Bombay HC in the case of Bhaichand N. Gandhi (supra). Thus addition made u/s 68 in case of the assessee, who is not maintaining books of accounts is bad in law and thus, is liable to be vacated. Decided in favour of assessee.
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2024 (1) TMI 848
Application for approval u/s 80G filed in Form 10AB - application rejected only on one ground that the application has been filed beyond the specified time and hence held it as time barred - whether the application of the assessee was time barred or not? - HELD THAT:- The sub-clause says that the Institution which have provisional registration have to apply at-least six months prior to expiry of the provisional registration or within Six months of commencement of activities, whichever is earlier. In continuation of this when we read the sub clause iii of Proviso of section 80G(5), which we have already reproduced above, it is clear that the intention of parliament in putting the word or within six months of commencement of its activities, whichever is earlier is in the context of the newly formed Trust/institutions. For the existing Trust/Institution, the time limit for applying for Regular Registration is within six months of expiry of Provisional registration if they are applying under sub clause (iii) of the Proviso to Section 80G(5) of the Act. This will be the harmonious interpretation. If we agree with the interpretation of the CIT(E), then say a trust which was formed in the year 2000, performed charitable activities since 2000, but did not apply for registration u/s.80G, the said trust will never be able to apply for registration now. This in our opinion is not the intention of the legislation. This interpretation leads to absurd situation. We are of the opinion that the words, within six months of commencement of its activities has to be interpreted that it applies for those trusts/institutions which have not started charitable activities at the time of obtaining Provisional registration, and not for those trust/institutions which have already started charitable activities before obtaining Provisional Registration. We derive the strength from the Speech of the Hon ble Finance Minister and the Memorandum of Finance Bill. 2020. Therefore, in these facts and circumstances of the case, we hold that the Assessee Trust had applied for registration within the time allowed under the Act. Hence, the application of the assessee is valid and maintainable. Provisional Approval is upto A.Y.2025-26, and it can be cancelled by the CIT(E) only on the specific violations by the assessee. However, in this case the ld.CIT(E) has not mentioned about any violation by the Assessee. Therefore, even on this ground the rejection is not sustainable. CIT(E) has not discussed whether the Assessee fulfils all other conditions mentioned in the section as he rejected it on technical ground. Therefore, we hold that the Assessee had made the application in form 10AB within the prescribed time limit and hence it is valid application. Therefore, we direct the CIT(E) to treat the application as filed within statutory time and verify assessee s eligibility as per the Act. CIT(E) shall grant opportunity to the assessee. Appeal of the assessee is allowed for statistical purpose.
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2024 (1) TMI 847
Validity of original assessment pursuant to revisional order passed by the CIT (Exemptions) - Doctrine of merger - validity of assessment order originally passed stands beore order passed by the ld. CIT(A) - Exemption u/s 11 denied - receipts collected from the students, in whatever form, are to be considered as income of the Trust/Society - as argued CIT(Appeals) erred on facts and law in upholding the addition made by AO by invoking the provisions of section 11 12 in case of appellant being an educational institution approved u/s 10(23C)(vi), upholding the order of the AO treating tied up grants received from the government as income of the appellant and disallowing depreciation as application of income - HELD THAT:- It is not at all in dispute and rather it is a matter of record that the fact that the original assessment in this case was proceeded consciously with reference to the provisions of Sections 11 and 12 of the Act is at one apparent from the original assessment order itself, wherein reference has been made to order sheet notings whereby the assessee was show caused for making addition of the funds collected by the assessee, as income for the year. It is also been accepted by the department itself in its written submissions filed before us and also the comments of the DCIT (Exemptions), Circle-1, Chandigarh, assessment was proceeded with in reference to the provisions of Sections 11 and 12 of the Act. It is only in the said comments of the DCIT, Circle-1 (Exemption), Chandigarh that for the first time, a case has been tried to be made out, that the reference to Sections 11 and 12 of the Act was inadvertently made in the assessment order, which may be treated as a typing mistake. Such methodology, in our considered opinion, is unheard of. Firstly, the flow of the assessment order itself makes it amply clear and apparent that the AO was fully aware and conscious of invocation of the provisions of Sections 11 and 12 of the Act. From this last observation also, it is evident that the AO was fully conscious of the invocation of the provisions of Sections 11 and 12 of the Act while making the assessment. Likewise, the issue of depreciation was also dealt with accordingly. Further, in case the AO, after passing of the order, felt it so necessary, he would have invoked the provisions of Section 154 in order to rectify, if he so felt it necessary to do so. Still further, it was only and only the AO passing the order originally who could have taken remedial measures, if so advised, and none else. Here, it is the DCIT, Circle-1 (Exemption), Chandigarh, who, in his comments has sought to raise the issue of the alleged inadvertence in mention being made of Sections 11 and 12 in the original assessment order. It is not at all, under law, the purview of the said officer to raise these issues, and more particularly when the original assessment order has been the subject matter of appeal before the ld. CIT(A), who, vide order dated 05.03.2019, i.e., the order impugned in the present appeal, has upheld the original assessment order. By virtue of the passing of the CIT(A) s aforesaid order under appeal, the original assessment order got merged therein. The law is very clear in this regard. It was way back in 1958 that the Hon'ble Supreme Court in CIT Vs Amrit Lal Bhogilal Co [ 1958 (4) TMI 3 - SUPREME COURT] held that if an appeal is provided against an order passed by a Tribunal, the decision of the appellate authority is the operative decision in law; that if the appellate authority implies or reversed the decision of the Tribunal, it is obvious that it is the appellate decision that is effective and can be enforced; in law, the position would be just the same even if the appellate decision merely confirms the decision of the Tribunal. As a result of the confirmation or affirmation of the decision of the Tribunal by the appellate authority, the original decision merges in the appellate decision and it is the appellate decision alone which subsists and is operative and capable of enforcement. In the present case, indubitably, the superior jurisdiction of the ld. CIT(A) was capable of reversing, modifying or affirming the original assessment order, which was put in issue before the ld. CIT(A) and the ld. CIT(A), in fact, has affirmed the original assessment order. Therefore, the doctrine of merger is squarely applicable and the assessment order originally passed stands fully merged in the order passed by the ld. CIT(A). Way back in 1953, that the Hon'ble Bombay High Court in Tejaji Farasram Kharawa [ 1953 (3) TMI 29 - BOMBAY HIGH COURT] held that it is a well established principle of law that when an appeal is provided from a decision of a Tribunal and the Appeal Court after hearing the appeal passes an order, the order of the original Court ceases to exist and is merged in the order of the Appeal Court and although the Appeal Court may merely confirm the order of the Trial Court, the order that stands and is operative is not the order of the Trial Court but the order of the Appeal Court. In the case at hand, the Appeal Court, i.e. the ld. CIT(A) has affirmed/confirmed the order of the Trial Court, i.e., the AO and that too, by a speaking order. Therefore, it is the CIT(A) s order that the AO s order stands merged. No decision contrary to the above case laws has been cited by the Department before us, nor has it been pleaded that the law laid down therein is either not a law of the land or is not the law applicable to the facts of the present case. There is no force in the Department s contention that the original order dated 05.03.2017 is void ab-initio and that accordingly, the appeal of the assessee is also void ab-initio and it be dismissed as such. This argument of the Department is, accordingly, rejected. Validity of approval u/s 10(23C)(vi) - As we find ourselves to be in agreement with the assessee that the ld. CIT(A) went wrong in upholding the addition made by the AO by invoking the provisions of Sections 11 and 12 when the assessee is an educational institution duly approved u/s 10(23C)(vi) of the Income Tax Act. Accordingly, Ground No. 2 is accepted and the addition is deleted. Treating tied up grants received by the assessee from the Government as income of the assessee - We find that it is undisputed that the funds/surplus of receipts over expenditure were in the nature of grant-in-aid, which facts stand expressly accepted by the ld. CIT(A) himself. As such, this grant-in-aid cannot be considered as income of the assessee under the Act, either for ascertaining the amount to be expended or for ascertaining the amount to be accumulated. The grants-in-aid made available to the assessee by the Government of Punjab, being not the income of the assessee, are exempt from tax. Ground No.3 is accepted and the addition is deleted. Disallowance of depreciation as application of income - As per the provisions of Section 11(6), if acquisition of an asset has been claimed as application of income u/s 11 by the assessee in the concerned assessment year or in any other previous year, depreciation would not be allowed. In the present case, as observed from the record and as not disputed before us, no such claim was made by the assessee regarding application of income u/s 11 either in the year under consideration or in any of the earlier years. Still otherwise, again, as rightly contended on behalf of the assessee and not disputed by the Department, the assessee had not claimed expenditure incurred on acquisition of fixed assets as revenue expenditure in the Receipt Expenditure Account, in any of the earlier years. The aforesaid being the undisputed factual position, the assessee is again correct in pleading that the ld. CIT(A) went wrong in confirming the disallowance of depreciation as application of income. Accordingly, the disallowance of depreciation as application of income is hereby ordered to be deleted. Ground No. 4 is accepted.
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2024 (1) TMI 846
TDS u/s 195 - payments made to non-residents w/o deducting TDS - disallowance u/s. 40(a)(i) - Assessee simply claimed that payment made to non-residents is not fees for technical services and provisions of section 195 is not applicable - HELD THAT:- We are of the considered view that payments made by the assessee to non-residents for rendering installation and testing services fall under the provisions of section 9(1)(vii)(b) of the Act and thus, not liable to tax in India. Since, income of non-resident is not taxable in India, the assessee need not to deduct TDS u/s. 195 of the Act on payment made to non-resident service providers. Since, the assessee is not required to deduct TDS u/s. 195 of the Act, the question of disallowance of said payments u/s. 40(a)(i) of the Act does not arise. CIT(A) after considering relevant facts has rightly deleted additions made by the Assessing Officer and thus, we are inclined to uphold the findings of the ld. CIT(A) and reject grounds taken by the revenue for all assessment years. Disallowance of bad debts - AO disallowed bad debts claimed on the ground that the assessee has claimed exemption u/s. 10A of the Act for earlier assessment years and income pertains to bad debts was not offered in the computation of total income for all previous years and thus, opined that conditions prescribed u/s. 36(2) of the Act are not satisfied - HELD THAT:- As not in dispute that income pertains to bad debts written off has been offered to tax in earlier assessment years. Further, whether the assessee has paid tax or claimed exemption under certain provisions of the Income-tax Act does not matter, but what is required is income pertains to said bad debts has been credited in the profit and loss account in earlier years or not. Since, the assessee has offered income pertains to bad debts written off in earlier years and also write off of bad debts in the books of accounts, in our considered view, conditions prescribed u/s. 36(2) of the Act are satisfied. Therefore, we are of the considered view that, the Assessing Officer is erred in disallowing bad debts u/s. 36(1)(v) r.w.s. 14A of the Act. CIT(A), after considering relevant facts has rightly directed the Assessing Officer to verify whether the amounts claimed as bad debts were included in the income for earlier assessment years. Thus, we are inclined to uphold the findings of the ld. CIT(A) and reject ground taken by the revenue. Disallowance of provision for expenses - AO said provision made for expenses is not ascertained liability and contingent in nature and thus, cannot be allowed as deduction - CIT(A) sustained additions made by the AO - HELD THAT:- If a liability is arising in a particular accounting year, deduction should be allowed although the liability may have to be qualified and discharged at a future date. In the present case, the assessee could not file any evidences to prove that the liability has arisen for the impugned assessment year for services availed in the course of business of the assessee. Since, assessee could not file any evidence and also basis for quantifying amount of provision made for expenses, in our considered view said provision can only be treated as unascertained liability, which is not crystallized during the impugned assessment year. Therefore, we are of the considered view that there is no error in the reasons given by the AO and the ld. CIT(A) to disallow provision for expenses and thus, we are inclined to uphold the findings of the ld. CIT(A) and reject ground taken by the assessee for both assessment years. Belated employees contribution to PF ESI u/s. 36(1)(va) - CIT(A) deleted additions made by AO - HELD THAT:- As by following the decision of Checkmate Services P. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] we are of the considered view that belated payment to employees contribution to PF ESI cannot be allowed as deduction. CIT(A) without appreciating relevant facts simply deleted additions made by the Assessing Officer. Thus, we reverse the findings of the ld. CIT(A) on this issue and uphold the additions made by the Assessing Officer towards belated payment to PF ESI u/s. 36(1)(va) r.w.s. 2(24)(x) - Decided against assessee.
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2024 (1) TMI 845
Dismissal of appeal as assessee s name was struck off by the Registrar of the company - Unexplained cash credit addition not decided by CIT(A) as made by the AO on the ground that the assessee has been struck off from the ROC records and even has surrendered the PAN and therefore the assessee was no longer in existence - HELD THAT:- The appeal was dismissed ex-parte without deciding the same on merit which is not correct as the first appellate authority should have decided the issue on merits. As perused the decision of M/s Dwarka Portfolio Pvt. Ltd. [ 2022 (5) TMI 1385 - ITAT DELHI ] in which the similar issue has been decided in favour of the assessee by the Co-ordinate Bench by holding that the appeal cannot be dismissed on the ground that the assessee s name was struck off by the Registrar of the company and the assessee cannot be treated as cancelled and non-existent for the purpose of realizing the amount due to the company and for payment or discharge of liability or obligation of the assessee. Thus we hold that the appeal has been wrongly dismissed by the CIT(A) on the ground of assessee company name being struck off from the rolls of ROC. Accordingly we restore the issue/appeal to the file of CIT(A) with the direction to decide the same on merit.
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2024 (1) TMI 844
Disallowance u/s 80(P)(2)(a)(i) - assessee society has violated section 18 of the Karnataka Co-operative Societies Act, 1959 by having more than 15% associate members (other than regular members) - CIT(A) deleted addition - HELD THAT:- Hon ble Apex Court in the case of Mavilayi Service Co-operative Bank Ltd. Ors. [ 2021 (1) TMI 488 - SUPREME COURT ] had held that the expression members , since it is not defined under the Income-Tax Act, the meaning/expression members must be considered n the context of the provision of the law enacted by the State legislature under which Co-operative Society claiming exemption has been formed. It is, therefore, necessary to consider the expression member in section 80P(2)(a)(i) of the Act in the light of definition as contained in section 18 of the Karnataka Co-operative Societies Act, 1959. As per amendment, w.e.f. 01.06.2014, Co-operative Societies registered under the Karnataka Co-operative Societies Act, 1959, is allowed to have nominal / associate members (non-members) up to 15% of its total membership. In the instant case, as mentioned earlier, the assessee society is providing credit facilities to non-members exceeding 15% of its total membership. Therefore, assessee would not be entitled to deduction u/s 80(P)(2)(a)(i) of the Act on income arising from dealing with non- members. Only profits attributable to non-members alone would not be entitled to deduction u/s 80P(2)(a)(i) of the Act. Thereby meaning proportionate deduction is to be allowed in respect of the income arising out of business with the members of the assessee society. In the light of the above said judgment of the Hon ble Apex Court in the case of Mavilayi Service Co-operative Bank Ltd., (supra), we restore the issue to the AO to determine the proportionate deduction under section 80P(2)(a)(i) of the Act with regard to the income earned from the assessee s dealings with its regular members. Addition u/s 68 - cash deposit of the Specified Bank Notes (SBN) from period 10.11.2016 to 31.12.2016 - as per AO assessee society was not authorized to accept the SBNs subsequent to the demonetization announced by virtue of the order of Government of India (Refer Gazette Notification No.2652 dated 8.12.2016) - assessee had claimed that this money was deposited by its customers in its bank accounts and the AO was provided with party-wise details, the identity of the creditors from whom the amounts is collected etc - CIT(A) has deleted the addition made u/s 68 - HELD THAT:- The assessee had furnished the details such as from whom the amounts are collected, where it is accounted and the details of the loans and deposits. Hence, the assessee cannot be made liable u/s 68 of the Act as unexplained credit. The evidence produced by the assessee was rejected only on the basis that assessee was not authorized to collect the SBNs subsequent to 8.11.2016. On identical factual situation, in the case of Bhageeratha Pattina Sahakara Sangha Niyamita [ 2022 (2) TMI 1243 - ITAT BANGALORE ] we hold that ld. CIT(A) was justified in deleting the addition made u/s 68 of the Act. Decided in favour of assessee.
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2024 (1) TMI 843
Addition u/s 69 - unexplained investment - investment not recorded in the books of accounts and taxed the same as Income u/s 115BBE - Burden to prove - HELD THAT:- When the applicability of provision of section 69 was not accepted by the ld. CIT (A), then in that eventuality the normal business income cannot be taxed by the revenue without bringing on record the independent corroborative evidences in support of the addition. In this regard our attention was drawn to the decision of Naresh Khatter HUF [ 2003 (1) TMI 77 - DELHI HIGH COURT] wherein it was categorically held that burden to establish that an investment has been made, onus is on the revenue. As we find that in the facts of the present case the revenue has not brought anything on record either direct, indirect or indirect corroborative evidence in support of the additions made by them. Thus, we are of the view that when no evidence has been brought on record to substantiate the allegation that the investment is from unexplained sources and rather as per the assessment order passed by the AO, the same has been considered as an expenditure. Therefore, no addition could have been made in the absence of an independent, corroborative evidence. Even otherwise, as held by Hon ble Delhi High Court (supra) that section 292B of the Act cannot save an order not passed in accordance with the provisions of the Act. We, therefore, find no force in the order of the ld. CIT (A) and the same is quashed. The addition is deleted. Appeal of the assessee is allowed.
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2024 (1) TMI 842
Nature of loss - commodities transactions - Addition made u/s 43(5) - speculative loss or business loss - Assessee had indulged in trading in commodities derivatives on National Sport Exchange Limited (NSEL) through his broker - nature of transaction and investment made by the future and options by entering the contract - Assessee submitted that the Assessee had suffered loss on account of NSEL Scam in commodity market. The loss was booked on account of bad debts written off by the Assessee during the relevant previous year. The debts arisen in the normal course of business - AO concluded that the Assessee had undertaken speculative and non-speculative trades but had not maintained separate accounts, thus treating the loss as speculative loss permitted to be set off against speculative profit and gains of other speculative business only in terms of Section 73 of the Act. - CIT(A) concluded that all the transactions undertaken by the Assessee were not non-speculative in nature and thereby discarded the incorrect bifurcation made by the Assessing Officer and allowed the set off of loss HELD THAT:- We find no infirmity in the order passed by the CIT(A) as the CIT(A) has granted relief by following the decision of Mumbai Bench of the Tribunal in the case of Nirshilp Securities Pvt. Ltd [ 2021 (6) TMI 814 - ITAT MUMBAI] wherein it has been held that the commodities transaction undertaken on NSEL were paired purchase sale transactions backed by the delivery of commodities as per warehouse receipt issued/retained by NSEL accredited warehouses which did not fall in the definition of speculative transaction as defined in Section 43(5) of the Act. The aforesaid decision of the Tribunal in the case of Nirshilp Securities Pvt. Ltd. has been followed in the case of Smt. Asha Devi Poddar [ 2022 (8) TMI 1476 - ITAT MUMBAI] - Respectfully following the aforesaid decisions of the Tribunal we decline to interfere with the order passed by the CIT(A). Ground No. 1 to 3 raised by the Revenue are dismissed.
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2024 (1) TMI 841
TP Adjustment - comparable selection f or determining ALP in respect of Marketing Support Services - HELD THAT:- Axis Integrated System Ltd. - As per the marketing support services agreement the assessee was engaged in providing services to its associate enterprise regarding the marketing of product whereas the Axis Integrated System Ltd. was engaged in providing services related to Directorate General of Foreign Trading, customers/ excise and tax related services which were in the nature of professional consultancy services. Similarly, in the case of the assessee itself for A.Y. 2014-15 [ 2023 (8) TMI 1420 - ITAT MUMBAI] after following the above referred decision directed the AO/TPO to exclude the Axis Integrated System Ltd. as comparable. Following the decision of the ITAT as referred supra the AO is directed to exclude the AISL from the list of the comparable, therefore, ground of appeal no. 1.6 to 1.8 are allowed. Killick Agency and Marketing Ltd. be excluded considering the different function and revenue and activity. Majestic Research and Solution Ltd. was engaged in various activity like study, design, data collection etc. and the function was not comparable with the assessee company, thus we direct the assessing officer to exclude this company from the list of comparable.
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2024 (1) TMI 840
Income from House property - Allowance of interest u/s. 24(1)(b) in computing the income from house property, being rent on a multi-storied building - assessee s claim stands denied by the assessing authority, admitting the interest on capital borrowed to be for constructing a house property, income from which is assessable u/s. 22 rws. 23, for want of evidence - HELD THAT:- The first appellate authority allowed relief for the said years on the basis that the claim could not be denied on that basis where a claim had been in fact preferred; the footnote in the returns being explained to an inadvertent carry-over of the said remark in the returns for the earlier years where no such claim was, for that reason, i.e., non-payment, made. The non-claim and, consequently, non-allowance for the earlier years, would therefore be of no consequence; the disallowance by AO under such circumstances being in fact perverse inasmuch as he disallows interest which he claims has not been paid in the face of accounts reflecting the payment. There has accordingly been no adjudication on the merits of the claim for any of the preceding years; the disallowance of interest since reversed in first appeal, for the two preceding years being on account of a misconception as to non-payment of interest by the assessee, which fact did not obtain. The assessee has before us relied on the relevant parts of the balance-sheet for the earlier years, i.e., the schedule of fixed assets, as well as it s face, reflecting the source and application of funds, to substantiate that the building was financed primarily from secured (from bank) and unsecured (from directors) borrowings. On the basis of the Grounds of Appeal before the first appellate authority, also filed physically (copy on record), it is also shown that the same were also adduced before the AO - we only consider it fit and proper that the matter is restored back, which we do at the request of Ms. Ammal, to the file of the AO, for determination afresh, setting aside the impugned order. Annual value how determined - Computation of annual value (AV) u/s. 23 whether with or without reckoning the non-receipt of any rent for the seventh (top) floor of the building inasmuch as no rent was received for the same, either during the current year or even the preceding years - HELD THAT:- A property, whether let or not, is liable to be assessed at it s annual value, defined as the rent reasonably expected on being let from year to year (s. 23(1)(a)). Sections 23(1)(b) and (c) provide for adjustment to the said value on account of actual rent, received or receivable, being either higher or lower, the latter being on account of vacancy. And which would, where so, obtain instead of a notional rent expected on a year-to-year letting contemplated u/s. 23(1)(a) as the annual value , at which income from a house property is to be otherwise assessed. That is, in case of actual letting, precedence is to be given to the real state of affairs. Vacancy can only follow a state of actual letting, envisaged u/ss. 23(1)(b)/(c). Reduction due to vacancy u/s. 23(1)(c) would accordingly follow a condition of actual letting, absent in the instant case for the top floor of the building. A part of the property referred to therein is one which admits of an actual and separate letting. The AV of the 7 th floor would therefore be computed u/s. 23(1)(a), while that for other floors, being let, u/s. 23(1)(a) r/w ss. 23(1)(b)/(c). We decide accordingly, remitting the matter back to the file of the AO to do the needful after hearing the assessee. Assessee s appeal is partly allowed.
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2024 (1) TMI 839
Estimation of income - Bogus purchases - disallowances involving GP component - HELD THAT:- Assessee could neither file confirmation of its suppliers nor the AO s notices could be served on them as per the assessment findings. Faced with this situation, Mr. Joshi has taken pains to compile the corresponding details in all these three assessment years regarding assessee s bogus and unverified purchases for being assessed at uniform rate. We hold that once the bogus purchases have attained finality, the only consequence is that they do not deserve to be treated at par with the latter category in light of the overwhelming evidence in this case file. Revenue has also quoted a catena of case law wherein such bogus purchases stand assessed at varying margins from 5-12%. We deem it appropriate in these peculiar facts to conclude that a lump sum disallowance of 6% in all these three cases would meet the ends of justice with a rider that the same shall not be taken as a precedent. Necessary computation shall follow as per law.
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2024 (1) TMI 838
Revision u/s 263 - assessment of trust - as per CIT(Exemptions), AO failed to carry out required enquiries he ought to have been carried out in light of objects and activities of the Trust and gross receipts earned by the Trust for the impugned assessment year - HELD THAT:- We find that when the AO has taken up the case for verification of expenditure incurred for charitable and religious purpose and further, during the course of assessment proceedings, he has called for various details about objects and activities of the Trust, financial statement, break up of income and expenditure, then, in our considered view, the Ld.CIT(Exemptions) cannot presume that, said information was not in the knowledge of the AO. This is because, the AO might have taken independent view de hors decision taken by the AO for earlier assessment years based on appraisal of relevant facts in light of objects and activities of the Trust. As res judicata is not applicable to the Income Tax proceedings. In other words, there is no rule that different view cannot be taken for subsequent years when a view has been taken for earlier assessment years. In our considered view, it is always possible to take a different view, in case, the facts brought on record is apprised in right perspective of law. Therefore, the arguments of the Ld.DR that the AO has failed to take note of earlier assessment orders while completing assessment is incorrect and not acceptable We are of the considered view that assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue. First of all, the AO has considered the issue of exemption u/s. 11 of the Act, while completing assessment u/s. 143(3) of the Act, which is evident from the assessment proceedings, where, the AO has called for various details, and in reply, the assessee has submitted relevant details. The sole basis for the CIT(Exemptions) to invoke provisions of Sec.263 of the Act, is the decision of the Hon ble Supreme Court in the case of ACIT(Exemptions) v. Ahmedabad Urban Development Authority ( 2022 (10) TMI 948 - SUPREME COURT ] and in our considered view, said judgment cannot be applied retrospectively for earlier assessment year as clarified by the Hon ble Supreme Court in their subsequent judgement dated 02.11.2022. Therefore, we are of the considered view that the Ld.CIT(Exemptions) is erred in invoking their jurisdiction and set aside the assessment order passed by the AO u/s. 263 of the Act and thus, we quash the order passed by the Ld.CIT(Exemptions) u/s. 263 of the Act. Appeal filed by the assessee is allowed.
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Customs
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2024 (1) TMI 837
Time limitation - suppression of facts or not - impugned order challenged on the premise that the very initiation by issuance of show cause notices 9 to 11 years after the subject import is beyond reasonable period - HELD THAT:- Section 124 of the Act which provides for confiscation, does not prescribe any period of limitation. It is trite law that whenever the statute does not prescribe limitation for taking any action, courts have consistently held that such action must be taken within a reasonable time - Thus any proceeding initiated or completed after a reasonable period would suffer from the vice of arbitrariness thereby falling foul of Article 14 of the Constitution of India. Now what would constitute a reasonable period for taking any action or passing an order would depend on the scheme of the Act and the nature of rights and obligations flowing therefrom and the facts of the case. Keeping the above aspect in mind and on gleaning through the provisions of the Act, the largest period for taking action is provided under Section 28 of the Act for recovery of duty in case of fraud, suppression or wilful misstatement. The impugned proceedings under Section 124 of the Act, 9 to 11 years after the date of the subject import cannot stand the scrutiny of reasonableness/arbitrariness inasmuch as any proceedings under Section 124 of the Act, 9 to 11 years after the import is unreasonable. Thus the impugned proceedings are set aside. The writ petition is disposed off.
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2024 (1) TMI 836
Provisional release of old and used digital multifunction copying, printing and scanning machines of A3 size - prohibited goods or not - enhancement of value - date of Bill of Lading at the port of exportations or the date of filing of the Bill of Entry in India is relevant for determining the goods or restricted goods or prohibited goods for the purpose of Customs Act, 1962? - Section 110 A of the Customs Act, 1962 - HELD THAT:- All Electronic and IT Goods notified under the Electronic and IT Goods (Requirements of Compulsory Registration), 2012 as amended from time to time or Second hand Multi Functional Devices including printers are prohibited and were importable only against authorization subject to the condition laid down in the aforesaid Ministry of Electronics and Information Technology from 19.05.2019. The position under Paragraph 2.13 of the New Policy with effect from 01.04.2023 is not different. Under it, imports are restricted wherever an importer complies with the requirement of All Electronic and IT Goods notified under the Electronic and IT Goods (Requirements of Compulsory Registration), 2012. Imports are prohibited in case of import of unregistered/non-compliant notified products as in CRO, 2012, as amended from time to time is prohibited . There is no doubt that the second hand and used multifunction printers/devices imported by the petitioner were prohibited under the provisions of the Foreign Trade Policy 2015-2020 as in force on the date of the respective Bill of leading on 13.09.2021 and on the date of filing of the respective Bill of Entries on 23.09.2021 for home clearance. However, there is relaxation under the new policy - there is a drift that any prohibition or restriction or obligation relating to import or export of any goods or class of goods or clearance thereof provided in any other law for the time being in force, or any rule or regulation made or any order or notification issued thereunder, shall be executed under the provisions of that Act only, if such prohibition or restriction or obligation is notified under the provisions of the Customs Act, 1962, subject to such exceptions, modifications or adaptations as the Central Government deems fit. The Hon'ble Supreme Court has ordered release of similar consignments in the case of M/S DELHI PHOTOCOPIERS VERSUS THE COMMISSIONER OF CUSTOMS (GR. 5) CHENNAI II ORS. [ 2021 (8) TMI 1244 - SUPREME COURT] . The goods were prohibited. They were ordered goods to be released under Section 125 of the Customs Act, 1962. Notification dated 01.04.2020 amending the Schedule of the Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order, 2012 has merely clarified Multifunction Devices (MFDs) are basically printers with additional capabilities like Fax, Scan, Photocopy etc. Thus, it was clarified that they are covered under the category of Printers/Ploters notified vide Gazette Notification dated 3rd October 2012. The imported consignments may be allowed to be cleared within a period of thirty (30) days from the date of receipt of a copy of this order subject to the petitioner providing suitable securities in the form of Bank Guarantee to cover the redemption fine that may be imposed on the petitioner for importing prohibited goods. Petition allowed.
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2024 (1) TMI 834
Jurisdiction - Power of DRI to issue SCN - Recovery of duties of customs u/s 28 AAA of Customs Act - HELD THAT:- In the case of TITAN MEDICAL SYSTEMS PVT. LTD. VERSUS COLLECTOR OF CUSTOMS, NEW DELHI [ 2002 (11) TMI 108 - SUPREME COURT] , it was held that since the licensing authority has not taken any steps to cancel the license and the licensing authority also has not claimed that there was misrepresentation in which case once an advance license was issued and not questioned by the licensing authority, the customs authorities cannot interfere on allegation that there was misrepresentation. In that case, the fact was that even the customs authorities questioned about the advance license itself. Therefore, the Hon'ble Supreme Court held that if at all anybody wanted to question about the advance license, the appropriate authority could only be the authority which issued the license viz., DGFT and not the customs authorities. In the instant case on hand, the principle laid down in Titan Medical Systems (P) Ltd v. Collector of Customs, New Delhi would only be applicable. It is an undisputed fact that Director General of Foreign Trade [DGFT] has issued the license under Section 9 of Foreign Trade Development and Regulation Act, 1992 [FTDR Act] and thereby issued SEIS Scrips [Service Exports from India Scheme]. Though DGFT has issued show cause notices on various dates viz., 1st SCN on 21.10.2020, 2nd SCN and 3rd SCN on 03.02.2021 and an order dated 23.10.2020 came to be passed by DGFT placing the petitioner under the Denied Entities List, the same were withdrawn in entirety by virtue of letter dated 20.09.2021. It is also undisputed that till date, DGFT has not initiated any steps to cancel the license issued by them and hence, this Court is of the considered view that the show cause notice dated 24th November 2020 issued by the second Respondent is without any jurisdiction. This Court is of the considered view that the show cause notice dated 24th November 2020 issued by the second Respondent is not in consonance with the Circular No.334/1/2012-TRU dated 01.06.2012 and hence, the same is liable to be set aside - Petition allowed.
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Corporate Laws
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2024 (1) TMI 833
Transmission of shares - transmission of the shares ordered without such necessary documentation - HELD THAT:- It is seen from Section 44 of the Companies Act, 2013 that shares are construed as movable property governed by the Articles of Association of the Company and Article 8.15 mandates that a Succession Certificate is required for the transmission of the shares. When Section 44 of the Act provides that shares of any member in a Company are required to be transferred in the mode and manner provided for under the Articles of Association of the Company, the sole Respondent is bound to meet the requirements of the said article 8.15. This Tribunal in the matter of M/s. Nalini Hari Vs. M/s. Mysore Stoneware Pipes and Potteries Limited in Company Appeal (AT) (CH) No. 55/2021 dated 05.12.2022 [ 2022 (12) TMI 367 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI] has recognised the importance of a valid Succession Certificate in a matter where the Applicant was seeking transmission of shares under Section 58 of the Act. In this matter this Tribunal upheld the refusal to direct transmission of shares even though a Succession certificate was issued, the same was under challenge. There are force in the contention of the Learned Counsel for the Appellant that considering the same ratio, the prayer of the first Respondent herein seeking transmission of Shares without even obtaining a Succession Certificate, cannot be sustained. A Company cannot refuse `Transmission of Shares , once the `legal heirs proves his/her entitlement to them, through a `Probate , a `Succession Certificate . It is to be pointed out that `transfer is an act of parties or law by which the title to the party is conveyed from one person to another. This would lapse by `Operation of Law or `Succession . `Transmission of Shares on the basis of `will can raise complicated issues which require an `evidence , to be read by the parties and need to be determined by a Court of Law. The Succession Certificate, specifies the debts and securities entitles a legal heirs not only to receive the Interest or Dividends but also to negotiate or transfer them, as per decision in Themappa Chettiar Vs. Indian Oversees Bank [ 1943 (3) TMI 11 - HIGH COURT OF MADRAS ]. In regard to disputes pertaining to `Will , parties are expected to get that dispute settled from a `Competent Court of Law as per decision in `C. Rajesh Kapoor Vs. `Tirupati Balaji Hotels P. Ltd. . If the `Probate Proceedings are pending in `Civil Court then the `Petitioner under the `Companies Act for `rectification of register will not be `maintainable . In the facts of the attendant matter on hand, the Company can effect `transfer of shares , on the basis of `Succession Certificate , as per Section 370 of the `Indian Succession Act, 1925 . The impugned order set aside - appeal allowed.
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Insolvency & Bankruptcy
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2024 (1) TMI 832
Status of second loan - Security Interest over the Secured Assets - Whether, the 2nd Loan is a Fresh Loan or whether it was given in lieu of the default committed by the Corporate Debtor in servicing the 1st Loan? - Whether it was given for restructuring of the 1st Loan and hence, the Appellant is entitled to retain the Security Interest over the Secured Assets in terms of the Tripartite Agreement entered into on 14.06.2017? HELD THAT:- It is the main case of the Appellants that the emails dated 08.04.2019, 18.05.2019 and 22.05.2019 were not brought on record and these emails were essential for deciding the subject issue on hand. The Learned Senior Counsel Mr. V. Prakash, appearing for the Applicants / Appellants drew our attention to email dated 22.05.2019 and the Letter dated 08.04.2019, in support of his case that the First Respondent was requested for issue of NOC in favour of the Appellants. The Learned Senior Counsel Mr. E. Om Prakash appearing for the First Respondent, drew attention to the date and time of retrieval of these emails showing that the emails were printed within a few minutes from the Email ID of the Promoter of the Corporate Debtor Company and that nothing turns on these emails as the fact remains that there is no evidence on record that the 2nd Loan was taken to restructure the 1st Loan. Subsequent to letter dated 08.04.2019, the email dated 20.05.2019, seeking for release of NOC establishes that the restructuring never took place and the NOC was never issued for the 2nd Loan. It is apposite to reproduce the email dated 31.01.2019, subsequent to the Issuance of the Sanction Letter, which clearly evidences that the Appellants has agreed to Sanction of a New Loan, instead of rescheduling the existing Loan and close the existing Loan. This email clinches the issue that the Sanction of the Loan on 31.01.2019 is indeed a `Fresh Loan . Additionally, the subsequent correspondence dated 09.07.2019, requesting to issue NOC further establishes that the NOC was never issued and therefore, the First Respondent continues to have the 1st Charge on the subject Assets. Appeal dismissed.
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PMLA
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2024 (1) TMI 835
Money Laundering - Transfer of investigation from the State police to the Central Bureau of Investigation - HELD THAT:- The thrust of the petitioner that only the CBI should investigate the case and be able to arrest the suspect has to be juxtaposed with the inability of the ED itself, another powerful central agency accompanied by the CRPF personnel, to search and seize, far less arrest the suspect. However, the involvement of the CBI personnel in the inveastigation of the present cases would be an imperative considering the ineptitude of the local police to handle the matter as discussed above and in view of the allegation of bias levelled by the petitioner, a premiere investigating agency - A pan-India organisation like the CBI would also be able to deal better with inter-State or inter-country measure if it becomes necessary to undertake the same. One cannot rule out the possibility of any accused illegally crossing over to a neighbouring country. In order to unearth the truth and to apprehend the miscreants responsible, a concerted effort is required from both the Central and the State agencies. Thus, to instil confidence in the people and to have a fair and effective investigation, for the present, a Special Investigation Team (SIT) consisting of personnel from both the CBI and the State police need to investigate the alleged offences. As FIR Nos. 8 and 9 of 2024 of the Nazat Police Station both pertain to allegations made in this same line, the cases need to investigated by the same agency. It is directed that further investigation of the Nazat Police Station case Nos. 8 and 9 of 2024 shall be conducted by a Special Investigation Team headed by an officer of the CBI of the rank of a Superintendent of Police to be nominated by the CBI and Mr. Jaspreet Singh, IPS, presently posted as the Superintendent of Police, Islampur Police District. The CBI shall make the nomination by tomorrow i.e., 18.01.2024. List this matter under the heading To Be Mentioned on 12.02.2024 at 2.00 p.m.
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2024 (1) TMI 831
Money Laundering - predicate offence - if in case an accused is acquitted/discharged in a predicate offence, in that eventuality, whether the prosecution initiated by the respondent/ED can be allowed to be continued or is liable to be quashed? - HELD THAT:- The issue was considered by the Supreme Court in case of Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT] and it was observed that The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money-laundering against him or any one claiming such property being the property linked to stated scheduled offence through him. A Coordinate Bench of this Court in case of Nayati Healthcare [ 2023 (10) TMI 822 - DELHI HIGH COURT] has also considered the issue whether the prosecution initiated by the respondent/ED can be continued in a case where the accused has already been acquitted/discharged for the predicate offence where it was held that Considering that the FIR has been quashed by this court and that it has not been challenged till date, there can be no offence of money laundering under section 3 of the PMLA against the petitioners. The complaint filed by the respondent/ED and the consequential proceedings cannot survive. Considering that the co-accused Dr. Jeevan Kumar has been acquitted by the trial court vide judgment dated 22.03.2013 and that the said judgment has not been challenged till date, there can be no offence of money laundering under section 3 of PMLA against the petitioner - Petition disposed off.
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Service Tax
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2024 (1) TMI 830
Interpretation of statute - broadcasting services - STGU services - essence of services under the category of broadcasting and STGU, both under the un-amended definition of taxable service (effective up to 30.06.2012) and service under Negative List regime (w.e.f. 01.07.2012) - it was held by CESTAT that There are no merits in the impugned orders, in so far as the adjudged demands were confirmed on the appellants - HELD THAT:- The view taken by the Customs Excise Service Tax Appellate Tribunal in the facts of the case is agreed upon - the Civil Appeals are dismissed.
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2024 (1) TMI 829
Recovery of Service Tax dues under the Finance Act, 1994, of a Company which is under liquidation applying IBC, 2016 - HELD THAT: A reading of Section 53 of IBC would show that the proceeds from the sale of liquidated assets shall be distributed in the order of priority mentioned in Section 53 of the Act. Importantly, when it comes to the due to the Central / State Government in terms of Section 53(1)(e)(i) of IBC, the distribution from the sale proceeds of the liquidated asset is only in respect of the amount due for two years preceding the liquidation commencement date. A reading of Section 53(1)(e)(i) of the IBC would reveal that it is in three parts, the first part identifies the nature of the due i.e., amount due to the Central / State Government including that which is received on account of the consolidated fund of India / State. The third part is the period in respect of which such amounts ought to be due viz., two years preceding the liquidation commencement date. The middle / second part of the said sub-clause connects the first and the third part by employing the expression in respect of . The expression in respect of has been held by the Hon'ble Supreme Court as an expression of wide import / connotation. It is equivalent to in connection with or in relation to . The amounts due to the Central Government must be in connection with, the whole or any part of the period of two years preceding the liquidation commencement date - in the instant case, the demands are in respect of the period 2012 and 2015-2016 on the basis of the Order in Original in 12 of 2012 and 80 of 2015-16 dated 27.03.2012 and 08.01.2016. It is thus beyond the two years preceding the commencement of liquidation date and the Company having been liquidated and the respondent having failed to lodge any claim under IBC at any stage of the proceeding under IBC and the sale proceeds having been distributed in terms of the waterfall it may not be permissible to sustain the impugned demand notice. As a matter of fact it was informed that the sums realized on the sale of assets of the company liquidated, was inadequate even to discharge the dues of secured creditors. The impugned demand notice is set aside - Petition allowed.
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2024 (1) TMI 828
Jurisdiction - power of Assistant Commissioner, Bhavnagar-I to demand service tax for services if any provided at Balmer in Rajasthan - extended period of limitation - HELD THAT:- It is observed that appellant was engaged in full-time services with M/s. Cairn Energy India Ltd at Balmer office in Rajasthan, the taxable services if any is also provided at Balmer in Rajasthan. Demand of Service tax is confirmed by Order of Assistant Commissioner, Bhavnagar-I who has no jurisdiction to demand tax at Balmer in Rajasthan. The demand of service tax is without jurisdiction. Impugned Order is therefore liable to be set aside - Appeal allowed.
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2024 (1) TMI 827
CENVAT Credit - inputs/capital goods - goods or services such as monopole supply, monopole installation, monopole supply and installation, prefabricated shelters, raw material towers (GBT,RTT-MP), shelter, tower supply and transportation and towers transportation - HELD THAT:- The Honorable Bombay High Court in M/S. BHARTI AIRTEL LTD. (EARLIER KNOWN AS BHARTI TELE-VENTURES LTD.) VERSUS THE COMMISSIONER OF CENTRAL EXCISE [ 2014 (9) TMI 38 - BOMBAY HIGH COURT] has decided that the assesse is not entitled for CENVAT credit on the goods in the question in the present case. However, thereafter the Honorable Delhi High Court in the case of VODAFONE MOBILE SERVICES LIMITED, INDUS TOWERS LIMITED, TOWER VISION INDIA PRIVATE LIMITED, BHARTI INFRATEL LIMITED, VERSUS COMMISSIONER OF SERVICE TAX, DELHI [ 2018 (11) TMI 713 - DELHI HIGH COURT] held that the assesse are entitled for CENVAT credit on the same goods relying on the Honorable Supreme Court Judgment in the case of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD VERSUS SOLID CORRECT ENGINEERING WORKS ORS. [ 2010 (4) TMI 15 - SUPREME COURT] . Since, the Honorable Bombay High Court has not considered the Honorable Supreme Court Judgment in the case of Solid And Correct Engineering Works Ors and on the contrary the Delhi High Court in the case of M/s. Vodafone Mobile Services Limited Passed the Judgment Relying on the Honorable Apex Court Judgment on Solid And Correct Engineering Works Ors. Delhi High Court Judgment prevails over the Judgment of Bombay High Court in the case of Bharti Airtel Limited. Moreover, Relying on the M/s. Vodafone Mobile Services Limited of Delhi High Court, this Tribunal consistently taken a view that assesse is entitled for CENVAT Credit on various goods related to supply and installation of Telecom tower. Thus, the appellant are entitled for the CENVAT Credit - appeal allowed.
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2024 (1) TMI 826
Levy of service tax - Import / Export of services - Place of provisions of services - Business Auxiliary Service - Commercial Coaching or Training Services - Convention Centre Service - Management, Maintenance or Repair Services - Extended period of limitation - interest - penalty. Business Auxiliary Service - Marketing support services received from foreign service provider - extended period of limitation - HELD THAT:- Neither in the show cause notice nor in the impugned order, any specific clause of Section 65(19) was mentioned by the Adjudicating Authority while confirming the demand on the appellant. This issue has been considered by various benches of the Tribunal and it has been consistently held by the Tribunal that the demand cannot sustain without specific mention of the clause under which demand is confirmed on the assessee - demand do not sustain. Commercial Coaching or Training Services - subscription paid to institution located outside India - HELD THAT:- It is not in dispute that the services in question are performed outside India as evident from Para 34.6 of the Impugned order whereas in terms of Rule 3(ii) of the Taxation of Services (Provided from outside India and Received in India) Rules, 2006, receipt of such services shall qualify as import only if the services are performed in India. In the present case, we find that the subscription fee paid to institutes i.e. foreign service providers, were for coaching and training performed completely outside India and therefore, no tax is payable under reverse charge mechanism - the demand on this service also set aside. Convention Centre Service - HELD THAT:- It is found that the entire demand in respect of Convention Centre Services pertains to the period prior to 18.04.2006 hence no service tax can be demanded for the period prior to 18.04.2006 as Section 66A was introduced only w.e.f. 18.04.2006 - it is also found that as per Rule 3(ii) of the Import Rules, receipt of convention services shall qualify as import only if the services are performed in India and therefore, it cannot be taxed in India. Hence, this demand also set aside. Management, Maintenance or Repair Services - HELD THAT:- As per Rule 3(ii) of Taxation of Services (Provided from outside India and received in India) Rules, 2000, the receipt of such services shall qualify as import only if the services are performed in India whereas in the present case, it is not disputed that the services are provided outside India and therefore no service tax can be demanded under this head also and the demand under the head of Management, Maintenance or Repair Services also set aside. Extended period of limitation - interest - penalty - HELD THAT:- The department in order to invoke the extended period has to establish fraud, collusion, wilful misstatement or suppression of facts or contravention of any provisions of this Act or Rules with an intent to evade the payment of tax which has not been done by the department in this case and moreover, the entire transaction was revenue neutral as the appellant would have taken the credit of the service tax paid under reverse charge and there was no malafide intention to evade the tax - the entire demand is barred by limitation. Once the demand of tax has been set-aside then there is no question of interest and penalty. The impugned order is not sustainable in law - Appeal allowed.
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2024 (1) TMI 825
Invocation of extended period of limitation - execution of works contracts for the Government Department - it is alleged that relevant details were not provided with supporting documents before the Adjudicating Authority - HELD THAT:- Under the admitted facts and circumstances, almost the whole turnover of the Appellant is exempted, except the amount for construction of school building for Rs. 8,44,300/- which also qualifies for exemption under the Notification No. 33/2012-ST (SSI). It is further found that the services provided for the construction of road and for irrigation project are also exempted under Notification No. 25/2012-ST. - it is further found that the Show Cause Notice have been wrongly issued invoking the extended period of limitation, there being no element of any fraud, mis-representation or mis-statement in the facts of this case. The impugned order set aside - appeal allowed.
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Central Excise
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2024 (1) TMI 824
Restoration of appeal - non payment of necessary pre-deposit under the provisions of Section 35 of the Central Excise Act, 1954 - it was held by High Court that The question of law must be answered in favour of the Revenue that the Tribunal had no jurisdiction and would have become functus-officio once the amounts had never been deposited inspite of the directions in the SLPs dated 21.08.2015. HELD THAT:- There are no ground to interfere with the impugned order passed by the High Court. However, liberty is given to the petitioners to file review. SLP dismissed.
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2024 (1) TMI 823
Area Based Exemption - Benefit of budgetary scheme under Notification dated 05.10.2017 issued by the Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) - industrial units which were under the threshold exemption and/ or manufacturing exempted goods. Case of Revenue is that the petitioners having opted for availing the benefits under the Notification No. 8/2003-CE dated 01.03.2003 to get the benefit of exemption from payment of Central Excise Duty, they cannot be extended the benefit of budgetary support which is restricted to only those units who had their registration under Central Excise and had paid Central Excise Duty and had collected their refunds as applicable. HELD THAT:- As is seen from the recital of the notification of the budgetary support scheme, it is to provide financial support to those industries who were existing eligible manufacturing units operating in the various states mentioned including the North Eastern States under the industrial policies announced. The petitioner units were also availing benefits under the Industrial Policy and under the erstwhile Central Excise Law but were however either exempted from payment of central excise duty by virtue of their turnover being below threshold limit of 1.5 crores per annum or that the items which they had manufactured were already exempted. No materials have been placed before the Court by the respondents to suggest that because the petitioner units were not required to pay Central Excess Duty by virtue of their annual turnover being below the threshold limit of 1.5 crores or that they had produced goods which were already exempted under Central Excise Duty, they were not considered to be eligible industries to avail the benefits offered under the NEIIPP industry policy. In the absence of such specific averments and contentions on behalf of the respondents or in the absence of such specific clauses being available under the industrial policy itself, the petitioner industries will have to be considered to be eligible industries to avail the benefits as applicable and as conferred under the NEIIPP. The judgment of the Apex Court in M/S HERO MOTOCORP LTD. VERSUS UNION OF INDIA ORS. [ 2022 (10) TMI 677 - SUPREME COURT] , relied upon by the respondents, had upheld the validity of budgetary scheme support. However, the question of the manufacturing units, like the petitioners, who, although were eligible to avail the benefits under the industrial policies, were not required to avail those benefits by virtue of their manufactured goods being exempted or their turnover fell below the threshold limit, was not at all an issue before the Apex Court in the said Judgment. The issue before the Apex Court was the validity of the budgetary scheme and which was upheld by the Apex Court - The scheme does not conceive of a class of manufacturing units who, although were eligible, were not availing the benefits under the industrial policies. The subsequent interpretation given by the respondent authorities vide the circular dated 10.01.2019 by way of a clarification is held to be beyond the purview of the budgetary scheme notification itself. The said clarification by circular dated 10.01.2019 to the extent it excludes the manufacturing units like the petitioner is therefore held to be bad and set aside accordingly. When the avowed object of the budgetary support scheme is to provide financial support to those industries who were eligible to avail benefits under the NEIIPP, the exclusion of the petitioner units on the classification that they did not pay Central Excise Duty either because their annual turnovers were below the threshold limit of 1.5 crores or that they had produced items which were already exempted is based on fiction and cannot be permitted to be a ground to deny the benefits of budgetary support scheme. The respondent authorities are therefore directed to examine the individual claims of the petitioners and if they are found to have satisfied the criteria and the eligibility laid down under the NEIIPP, the benefits of budgetary support scheme as had been extended to other similarly situated units shall also be extended to the petitioner units. The respondent authorities will forthwith proceed to examine the individual claims and pass appropriate orders within a period of 30 days from the date of receipt of the certified copies this order. Petition allowed.
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2024 (1) TMI 822
Recovery of amount of service tax before issuing notification under Section 68(2) of the Finance Act, 1994 - Rule 2(1)(d)(iv) of the Service Tax Rules, 1994 - HELD THAT:- In the present case, the respondents have rejected the refund claim of the appellant of Rs. 4,69,561/- in respect of service rendered from a non-resident provider for the period prior to 31.12.2004. The Bombay High Court in the case of Indian National Shipowners Association [ 2008 (12) TMI 41 - BOMBAY HIGH COURT ] has held that Respondents are restrained from levying service tax from the members of the Petitioners association for the period from 1-3-2002 till 17-42006, in relation to the services received by the vessels and ships of the members of the Petitioners association outside India, from persons who are non-residents of India and are from outside India. In view of the settled position of law the said action of the respondents is illegal and in such circumstances, the impugned order dated 17.08.2007 passed by the Customs Excise Service Tax Appellant Tribunal, New Delhi is hereby set aside and consequentially the orders dated 17.06.2005 passed by the Deputy Commissioner Central, Excise and Division, Bhilwara and 20.10.2005 passed by the Commissioner (Appeal II) Customs Central Excise, Jaipur are also set aside. The respondents are directed to refund the payment of Rs. 4,69,561/- to the appellant on the applicable interest in accordance with law within a period of six months from the date of production of certified copy of this order - Appeal allowed.
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2024 (1) TMI 821
CENVAT Credit - clearance of exempted goods - bagasse and press mud - separate accounts and inventories have not been maintained as required in terms of the provisions of Sub-Rule 3 of Rule 6 of CENVAT Credit Rules, 2004 - Rule 6 of CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 - period from April 2016 to June 2017 - HELD THAT:- The issue is no more res-integra. Revenue s only grievance is that the precedent decision followed by the learned Commissioner (Appeals) would not apply to the present case of the respondent as Rule 6 of the CENVAT Credit Rules was amended subsequent to the judgement of the Hon ble Supreme Court in UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] . It is the case of the Revenue that consequent to such amendment in Rule 6 of the CENVAT Credit Rules non-excisable goods cleared for a consideration from a factory are to be treated as exempted goods for the purpose of Rule 6 of the CENVAT Credit Rules for clearances w.e.f. 01.03.2015. The grounds of the Revenue was dealt with by the Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, MEERUT-I VERSUS M/S. BAJAJ HINDUSTHAN SUGAR LTD. [ 2018 (12) TMI 1649 - CESTAT ALLAHABAD] wherein it was observed that It was held in the said Final Order that Press Mud and Bagasse are not arising out of manufacturing activity and the same are agricultural waste and residue and therefore since the said Final Order is applicable in the present case I uphold the impugned order and reject the appeal filed by Revenue. There are no justifiable reasons to interfere in the impugned order passed by the learned Commissioner (Appeals) - appeal of revenue dismissed.
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2024 (1) TMI 820
Reversal of proportionate credit attributable to exempted goods - bagasse emerge as a by-product, during the course of manufacture of sugar - manufacture of both dutiable and exempted product - Rule 6 of Cenvat Credit Rules, 2004 - HELD THAT:- In the present case, during the course of manufacture of sugar, bagasse emerges as a by-product which over a period of time gets converted into press mud and bio compost and the same were cleared without payment of duty. Since these by-products were cleared without payment of duty, the Department alleged that the Appellant manufactured both dutiable and exempted product and hence, they are liable to reverse the Cenvat credit proportional to the value of exempted goods, as per Rule 6 of the Cenvat Credt Rules, 2004. The issue is no longer res integra as the Hon ble Supreme Court in case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] has categorically held that reversal of Cenvat Credit is not warranted in terms of Cenvat Credit Rules, 2004, when the by-product Bagasse is cleared from the factory without payment of duty. Thus, the demands confirmed in the impugned order is not sustainable and accordingly, the same is set aside - appeal allowed.
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2024 (1) TMI 819
Refund of excess central excise duty paid - Principles of unjust enrichment - non-production of any evidence before the Central Excise authority to substantiate the claim that the incidence of duty has not been passed on to the customers - HELD THAT:- From the findings recorded by the Ld. Commissioner (Appeals) in the impugned order, it is found that the Appellant has not produced any other evidence other than CA s Certificate to substantiate the claim of non-applicability of unjust enrichment in this case. The CA Certificate alone is not sufficient to conclude that 'unjust enrichment' is applicable in this case or not. This view has been held in the case of COMMISSIONER OF CUSTOMS (EXPORTS) CUSTOM HOUSE, VERSUS 1. M/S. BPL LTD., 2. CUSTOMS EXCISE SERVICE TAX APPELLATE TRIBUNAL [ 2010 (7) TMI 66 - MADRAS HIGH COURT ] it was held that Inasmuch as the Tribunal has merely relied upon the certificate of the Chartered Accountant and in order to give sufficient opportunity to first respondent while answering the question of law in favour of the revenue, the order passed by the Tribunal is hereby set aside and the matter is remitted back to the Tribunal for a fresh consideration of the appeal filed before it. The first respondent is permitted to furnish any other substantial evidence in support of his claim for refund. There are no reason to differ with the above findings in the impugned order to uphold the rejection of the refund claim. Accordingly, the Appellant is not eligible for the refund claim and the same has been rightly rejected in the impugned order. Appeal dismissed.
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2024 (1) TMI 818
Exemption to cement supplied to industrial / institutional consumers in 50 kg. bags - eligibility for Sl.No.1C of Notification No.4/2006-CE dt. 1.3.2006 - denial of exemption on the ground that appellant had cleared the cement in 50 kg. bags without printing Retail Sale Price on the bags as required. Whether Chapter II of SWM (PC) Rules, 1977 / PC Rules of 2011 require affixation of MRP / RSP on cement bags of 50 kgs. when cleared to industrial / institutional consumes? HELD THAT:- As per the decision of the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. MADRAS CEMENTS LTD. [ 2019 (11) TMI 1784 - SC ORDER] a batch of cases on the same issue was decided by upholding the decisions of the Tribunal. The Tribunal held that R.S.P is not required to be printed on cement cleared in 50 kgs. bags to industrial / institutional consumers and is covered under Sl.No.1C of Notification No.4/2006-CE dated 1.3.2006 as amended. The Tribunal in the case of GRASIM INDUSTRIES LTD. (UNIT-I) VERSUS COMMISSIONER OF C. EX., TRICHY [ 2008 (10) TMI 462 - CESTAT, CHENNAI] has discussed in detail the issue as to whether R.S.P has to be affixed on cement bags of 50 kgs and held that We have found favour with the assessee s case in view of the clarification issued by the CBEC, which is to the effect that no RSP requires to be printed on the goods sold to industrial/institutional consumers as defined under the rules framed under the Standards of Weights and Measures Act and that such goods would be covered under Sl. No. 1B or 1C of Notification No. 4/2006-C.E. by virtue of the Second Proviso to the Explanation to Sl. No. 1C of the Notification as amended. Thus, the allegation in the SCN as to whether the appellant has cleared cement to industrial / institutional consumers is too vague to be the basis for confirmation of demand. Further, adjudication after such lapse of time alleging that the appellant has not furnished evidences to show that the clearances of such 50 kg. bags have been made only to industrial / institutional consumers, is not justified. The demand cannot sustain and requires to be set aside - Appeal allowed.
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2024 (1) TMI 817
Process amounting to manufacture - affixing the MRP on the containers of Adhesive solution falling under Chapter 35 of Central Excise Tariff Act, 1944 - Cenvat Credit for making adjustment against the Excise Duty on the manufactured goods - HELD THAT:- The appellant treated their activity of repacking and resale of the goods as trading activity. Accordingly, under the dealer registration, they have issued dealer invoice in respect of the Cenvat Credit of CVD paid in respect of imported goods, later on when the department raised contention that this re-packing is amount to manufacture appellant admittedly paid an amount over and above the Cenvat Credit. The issue to be decided in the revenue s appeal is that whether the appellant is entitled for Cenvat Credit for making adjustment against the Excise Duty on the manufactured goods. In the present case on the same transaction the department has demanded the Excise Duty considering as manufactured goods. Therefore, obviously whatever Cenvat Credit involved with the goods needs to be adjusted against the total duty liability. The contention of the revenue is that since they have already passed credit of CVD through dealer invoice the same cannot be adjusted is absolutely incorrect for the reason that the CVD was not Passed on twice. It is the same CVD was passed on. Therefore, the contention of the revenue in this regard absolutely absurd and not acceptable. From the decision in COMMISSIONER OF CENTRAL EXCISE ST, BHAVNAGAR VERSUS GUJARAT HEAVY CHEMICALS LIMITED [ 2023 (5) TMI 188 - CESTAT AHMEDABAD] , it can be seen that the facts are absolutely identical that in respect of the consignment sold as trading activity by passing on the credit under dealer invoice. Subsequently, when the department has sought to consider the activity as manufacture and demanded Excise Duty Cenvat Credit was allowed to be adjusted. The impugned order is upheld - Appeal is dismissed.
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CST, VAT & Sales Tax
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2024 (1) TMI 816
Initiation of Suo moto revision proceedings - whether the Commissioner and/or Additional Commissioner could have initiated suo motu revision proceeding on the same set of grounds on which, earlier, the said authority itself granted sanction for initiation of review proceedings by the adjudicating authority? HELD THAT:- It is not a proper course of action to be adopted in approaching the Commissioner of Commercial Taxes for initiation of suo motu revision proceeding, on its own motion, on the same set of facts in respect of which Commissioner of Commercial Taxes itself granted sanction for initiation of review proceedings. Under the scheme of JVAT Act, there is statutory provision for appeal and statutory provision of revision before Commercial Taxes Tribunal and, if the department was not satisfied with the original adjudication order and/or the order by which review proceeding was dropped, it was open for the department including Commissioner to direct the competent authority to prefer statutory Appeal and/or statutory Revision before the competent authority in terms of Section 79 and 80(1) of the JVAT Act. However, in our opinion, it was not open for the Revenue particularly, Additional Commissioner, Commercial Taxes to initiate suo-motu revision proceeding, that too, on the mere filing of a letter by writ petitioner-DCCT. From bare perusal of Section 80(4) of the JVAT Act, it would transpire that the Commissioner may, on its own motion, call for and examine the records of any proceeding in which any order has been passed. In the present case, from the records of the proceeding of Additional Commissioner, it transpires that although Additional Commissioner has recorded in its order that he has perused the records of the assessment proceedings, but there is no such evidence to that effect available in the records. It is pertinent to indicate that the jurisdictional fact of assuming jurisdiction under Section 80(4) of the JVAT Act by Commissioner of Commercial Taxes is calling for records of proceeding pertaining to any order and, thereafter, satisfying itself that said order requires interference by the said authority. In the instant case, aforesaid jurisdictional fact itself is absent and the Additional Commissioner, merely on the strength of a letter written by DCCT, initiated suo motu revision proceedings without even calling for records of the case and without even examining the orders in question - the Commissioner has acted beyond the power conferred to it under Section 80(4) of the JVAT Act is in accordance with law and requires no interference by this Court. Thus, the orders passed by Additional Commissioner, Commercial Taxes dated 25.04.2019 suffer from various illegalities and infirmities and the same have been rightly set aside by the Commercial Taxes Tribunal, Ranchi, vide its order dated 28.02.2020. Application dismissed.
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2024 (1) TMI 815
Seeking release of detained goods and vehicle of petitioner - penalty - HELD THAT:- It appears that the petitioner is coming forward pay 200% of the penalty amount, which was imposed by the respondent vide notice dated 21.11.2023. The petitioner is directed to deposit 25% of the penalty amount, which was imposed by virtue of impugned notice dated 21.11.2023, to the respondents and for the remaining 75%, he is directed to execute bank guarantee in favour of the respondents - Upon the deposit and execution of the bank guarantee as stated above, the respondent is directed to release the petitioner's vehicle along with the goods immediately. Petition disposed off.
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Indian Laws
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2024 (1) TMI 814
Interpretation of statute - Section 17A of the Prevention of Corruption Act, 1988Corruption - siphoning of public funds - Difference of opinion - HELD THAT:- As different views is expressed on the interpretation of Section 17A of the Prevention of Corruption Act, 1988 as also its applicability to the appellant in the subject-case, the matter is referred to the Hon ble the Chief Justice of India. The Registry to place the papers before the Hon ble the Chief Justice of India so that appropriate decision can be taken for the constitution of a Larger Bench in this case for adjudication on the point on which contrary opinions have been expressed.
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