TMI Tax Updates - e-Newsletter
February 24, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Withdrawal from the composition permission with retrospective effect - the petitioner is right that the moment he entered into the export transactions would become entitled for composition permission because of provision of Section 10 and his permission is required to be cancelled with effect from the date of export transaction. - HC
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GST:
Levy of GST - consideration received on sale of sites - without the layout plan issued by the Planning Authority, the local authority will not issue the Khata for the plot and in the absence of the Khata, the registration process for transfer of title from the seller to the buyer will not take place. On a co-joint reading of all the above provisions, we hold that sale of land developed by the Respondent is covered within the scope of the term 'sale of land' as mentioned in entry 5 of Schedule III. - AAAR
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GST:
Valuation of supply of services - activities undertaken for milling of wheat into wheat flour, along with fortification and supplied upon packing of the same - the value of by-products so retained by the appellant yielded during CMR milling, which were allowed to be retained by the appellant to meet the CMR activity cost shall obviously be included as part of value of supply and also to be termed as a bona fide form of consideration’. - AAR
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Income Tax:
Validity of deduction of TDS u/s 194A on interest - Motor Accident Claims - Enhanced Principal - The Insurance Company is directed to pay the TDS amount deducted on the interest component of the claim amount, uptill the date of the High Court Judgment along with 9% interest. - HC
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Income Tax:
Refund of pre-deposit - ITAT on 21.10.2014 passed remand order - the authorities were required to pass fresh assessment by 31.03.2017 - But, order was not passed by that time - In the present case, admittedly, no assessment order has been passed nor any assessment order could be passed, the same having been barred by the provisions of Section 153(1)(a)(iii). - Respondents are directed to refund the excess amount deposited by the petitioner after deducting tax liability qua depreciation disallowance which stands admitted by the petitioner before Tribunal - HC
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Income Tax:
Nature of receipt - addition on account of Hardship Compensation received - the benefit received by the assessee in the form of bigger size of flat and amount received as hardship allowance from the developer is a capital receipt, which cannot be treated as revenue receipt for taxing as income - AT
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Income Tax:
Reopening of assessment u/s 147 - corrigendum issued to make changes in reaosns to belive - the action of the AO to be wholly untenable in law. By issue of corrigendum, the Assessing Officer has attempted to rectify the very fulcrum of believe derived qua the broker - The name of the broker was substituted in the corrigendum which has changed the tone of the entire basis for assumption of jurisdiction u/s 147 - AT
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Income Tax:
Rectification of mistake - Assessment of trust - depreciation on Fixed Assets denied - Assessee himself wrongly declared its income under the head ‘income from other sources" instead of Business Income - It is clear that not granting depreciation on Fixed Assets were mistake apparent from the record which could have rectified by the authorities below. - AO directed to verify and allow the claim as per law - AT
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Income Tax:
Deeming gift of immovable property - applicability of section 56(2)(vii) - gift of immovable property to appellant (done) prior to 1.10.2009 - Transfer Deed of lease hold rights executed and registered on 23.10.2010 was merely documents whose execution became necessary for creating a legal title. Assessee cannot be put to disadvantage on basis of this documents dated 23/10/2010, so as to say that there was transfer of interest on this date only. - AT
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Income Tax:
Demand u/s 201(1) with interest u/s 201(1A) - non deduction of TDS on the interest paid to HUDCO - minor delay in submitting the declaration that the payee (HUDCO) has paid tax on such interest - When there was no dispute about such a declaration being filed in a prescribed format and there was no dispute about the genuineness of such declaration, mere minor delay in filing the said declaration would not defeat the very claim. - AT
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Income Tax:
Income deemed to accrue or arise in India - absence of specific notification by the Government implementing the Protocol to India-Israel DTAA - once the DTAA itself has been notified and contains the Protocol there is no need for the Protocol itself to be separately notified or for the beneficial provisions in some other conventions between India and another country to be separately notified to form part of India – France DTAA. - AT
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Income Tax:
Rate of TDS on payment to non resident - Non-availability of PAN of non resident - the ld Tax Authorities below have fallen in error in not extending the benefits of section 90(2) - The matter of fact remains that what were the rates of taxation under DTAA are not coming up from the matter before this bench therefore, the issue requires to be restored to the files of Ld. AO to take into consideration the rate of the DTAA and recalculate the tax demand - AT
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Income Tax:
TP adjustment in respect of franchise fee - prudence of expenditure - TPO cannot step into the shoes of assessee to decide prudence of expenditure. The TPO failed to examine the documents furnished by assessee to benchmark the transaction by applying one of the methods specified in Chapter-X of the Act. Thus, in the facts of the case we hold that the findings of the TPO/Assessing Officer in making adjustment in respect of franchise fee are unsustainable. - AT
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Customs:
DFIA (Duty Free Import Authorisation) scheme - revalidation of the DFIA licences - due to the aforementioned Public Notice dated 23.07.2010, Clarification dated 23.09.2010 and Policy Circular No.13 dated 31.01.2011, they have been unable to get the benefit of DFIA licences - In view of the fact that the respondents have arbitrarily and by total non application of mind has rejected the petitioner's request for revalidation of the subject DFIA licences, the impugned order has to be quashed and the writ petition has to be allowed - HC
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Customs:
Debonding of 100% EOU - Demand of interest on raw materials, lying in stock beyond the warehousing period - Period of limitation - The section does not speak of any extension of time based on a request for waiver. Further the request for waiver is filed as per the Board Circular. Circulars, though binding on the Department, is not so on the Tribunal. Thus, the SCN is time barred. - in absence of any limitation period for demanding interest in respect of Customs duty payable in term of Section 61(3) of Customs Act, in the case of warehoused goods, the limitation period would be the period prescribed in Section 28 of the Act ibid. - AT
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Indian Laws:
Dishonour of cheques - 7 cheques dishonoured at different places - different jurisdiction of trial court as per the bounced cheque - as the six complaint cases pertain to the same transaction, it would be advisable to have a common adjudication to obviate the possibility of contradictory findings being rendered in connection therewith by different Courts. As four of the six cases have been filed by the respondent company before the Dwarka Courts at New Delhi and only two such cases are pending before the Courts at Nagpur, Maharashtra, it would be convenient and in the interest of all concerned, including the parties and their witnesses, that the cases be transferred to the Dwarka Courts at New Delhi. - SC
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IBC:
Liability to pay IRP fees and expenses - the reasonability of the fees payable to the IRP may be determined keeping in mind that CIRP had not made much progress beyond its preliminary phase and there was no occasion to carry out any exceptional responsibility - AT
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IBC:
Validity of approval of Resolution Plan - the amount was the share of the Appellant for submitting Bid Bond Bank Guarantee by the consortium, Appellant being one of the member of the consortium. The agreement dated 24.10.2018 which was basis of the claim of the Appellant in no manner indicate that the amount was given in trust to the Corporate Debtor. - Claim was rightly rejected - AT
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IBC:
Initiation of CIRP - Requirement of mandatory service of notice u/s 8 - After the transfer of winding up proceedings as per Rules 2016 read with amendments made in Section 434 of the Act, 2013 as applicable to the Code by Act 26 of 2018, if the winding up petition has been filed on the ground that the Company is unable to pay its debt, for treating the application under Section 9 of the Code, notice under Section 8 of the Code is not necessary or mandatory and a petition under Section 9 shall be maintainable without service of notice under Section 8 of the Code. - AT
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Service Tax:
Levy of fine and penalty - undue sympathy to impose an adequate penalty would undermine the efficacy of law and encourage other tax payers to avoid paying taxes on time while waiting for if and until they have been found to have evaded duty by the department to pay their taxes - appeal dismissed. - AT
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Service Tax:
Denial of CENVAT credit - credit availed and utilized on inputs and capital goods used for setting up of passive infrastructure for provision of Business Support Services [BSS] - whether towers are movable property or immovable property? - the appellant was entitled to take CENVAT credit since the items in dispute are ‘capital goods’. - AT
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Service Tax:
Export of services - input services - Air Travel Agent Service (ATAS) - input services such as Car hire charges, Insurance charges, Travel expenses and Staff welfare expenses - The inclusive part of the definition of input service is only illustrative and not exhaustive. In the absence of any intention of the legislature to restrict the definition of ‘input service’ to any particular class or category of services used in the business. - Credit allowed - AT
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Central Excise:
Inordinate delay in adjudication of SCN - Clandestine Removal - Adjudication of such a show cause notice after 29 years would be contrary to the mandate of Section 11A(11) of the CEA 1944 and would lead to unreasonable and arbitrary results. Such proceedings therefore stands vitiated due to inordinate and unreasonable delay and are accordingly fit to be quashed. - HC
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Central Excise:
Rejection of claim for interest on delayed refund - If the claim for refund itself was not maintainable in law, the question of grant of interest does not arise. The relief of refund was allowed in favour of the appellant in terms of the order of the High Court of Rajasthan, however the same was silent on the issue of interest as no relief was claimed in that regard by the appellant. Therefore, no relief of interest on delayed refund can be allowed to the appellant at this stage. - AT
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Central Excise:
Clandestine removal - Goods cleared without issuing invoices and CE duty was leviable on those goods - admission by the party itself - admissible evidences or not - In view of the specific admissions by the Director, nothing further was required to be proved by the Department and also the recovery of challans during visit of factory clearly proves that goods so manufactured were clandestinely cleared from the factory under the guise of job work on which no Excise duty was paid. It is a settled principle of law that what is admitted by a party need not be proved. - AT
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VAT:
Imposition of penalty under Section 40(2) of the JVAT Act - Admittedly, the present dispute did not pertain to filing of incorrect return with intention to suppress or conceal purchases; rather the dispute pertains to filing of revised return belatedly. Thus, the imposition of penalty under Section 40(2) of the JVAT Act upon Petitioner is not sustainable in the eye of law and if the justification of the Respondents in this regard is accepted then the provision of Section 30 more particularly; sub-section 4 would be rendered otiose. - HC
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VAT:
Validity of impugned Auction Notice - properties are brought for auction for non payment of tax and penalty of petitioner - only after a lapse of almost five years from the date of the assessment orders, the petitioner has filed the Rectification Petitions in the year 2018 even without filing a Statutory Appeal as against the assessment orders dated 28.01.2013 and 15.10.2013 pertaining to the relevant assessment years 2007-08 to 2011-12. - Petition dismissed - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2023 (2) TMI 935
Cancellation of registration of petitioner - rejection of application for revocation of cancellation under the Gujarat Goods and Service Tax Act, 2017 - order passed is without providing the adequate opportunity to explain the transactions to various parties - violation of principles of natural justice (audi alterem partem) - HELD THAT:- The show cause notice, which has been issued, is quite cryptic. This Court in Aggarwal Dyeing and Printing Works versus State of Gujarat Ors. [ 2022 (4) TMI 864 - GUJARAT HIGH COURT ], has at length decided this issue - It was held in the case that On account of procedural lapses, the High Court should not be flooded with writ applications. The procedural aspects should be looked into by the authority concerned very scrupulously and deligently. Why unnecessarily give any dealer a chance to make a complaint before this Court when it could have been easily avoided by the department. Application disposed off.
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2023 (2) TMI 934
Cancellation of GST registration of petitioner - GST return not filed - non-submission of reply to SCN as SCN not received by the petitioner - violation of principles of natural justice - HELD THAT:- The present petitioner is also entitled for the benefit of the order passed by this Court in Technosum India Pvt. Ltd. Lucknow Vs. Union of India and others [ 2022 (9) TMI 1412 - ALLAHABAD HIGH COURT] . In the said judgment, the Court has held that the impugned order does not assign any reason whatsoever for cancelling registration of the petitioner and is passed only on the ground that reply to the show cause notice is not given. The non-submission of reply to the show cause cannot be a ground for cancellation of the registration. The present petitioner is also entitled for the same relief. The benefit of the above order, shall also be made available to the present petitioner. Petition allowed.
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2023 (2) TMI 933
Violation of principles of natural justice - opportunity of personal hearing - opportunity of hearing denied because the option 'No' was marked against the option for personal hearing (in the reply to the show-cause-notice), submitted through online mode - HELD THAT:- There are complete agreement with the view taken by the coordinate bench in Bharat Mint Allied Chemicals [ 2022 (2) TMI 350 - ALLAHABAD HIGH COURT ]. Once it has been laid down by way of a principle of law that a person/assessee is not required to request for opportunity of personal hearing and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified 'No' in the column meant to mark the assessee's choice to avail personal hearing, would bear no legal consequence. Even otherwise in the context of an assessment order creating heavy civil liability, observing such minimal opportunity of hearing is a must. Principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing. It has to be ensured that such opportunity is granted in real terms. Here, it is noted that the impugned order itself has been passed on 21.10.2022, while reply to the show-cause-notice had been entertained on 14.09.2022. The stand of the assessee may remain unclear unless minimal opportunity of hearing is first granted. Only thereafter, the explanation furnished may be rejected and demand created - Not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority to pass appropriate and reasoned order as may serve the interest of justice and allow a better appreciation to arise at the next/appeal stage, if required. The matter is remitted to the respondent no.2/Assistant Commissioner, State Tax, Sector-6, Aligarh to issue a fresh notice to the petitioner within a period of two weeks from today - petition allowed by way of remand.
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2023 (2) TMI 932
Maintainability of appeal - Appeal can be entertained as per the provisions of Rule 108 of the Tamil Nadu Goods and Service Tax Rules, 2017 even if the assessee has not submitted a certified copy of the order within a period of seven days as stipulated under Rule 108(3) of the Rules, or not. HELD THAT:- The issue for consideration in this writ petition was also the subject matter of consideration by the Division Bench of Orissa High Court in the case of M/s.Atlas PVC Pipes Limited vs. State of Odisha and others [ 2022 (7) TMI 130 - ORISSA HIGH COURT ]. In the aforesaid decision of the Orissa High Court also, the petitioner assessee had filed an Appeal under Section 107 of the Odisha Goods and Services Tax Act, 2017, electronically on time, but did not furnish a certified copy of the impugned order, within seven days of filing of the appeal as prescribed under the proviso to Rule 108(3) of the OGST Rules. After giving due consideration to all the relevant provisions of the OGSTAct/Rules, the Orissa High Court has held that since Rule 108(3) has not prescribed for condonation of delay in the event where the petitioner fails to submit the certified copy of the order impugned in the appeal nor is there any provision restricting application of Section 5 of the Limitation Act, 1963, in the context of supply of certified copy within the period stipulated in sub-rule (3) of Rule 108 , the requirement to furnish certified copy of the impugned order within seven days of filing of appeal is only a procedural requirement, which can be condoned by exercising powers under Article 226 of the Constitution of India as it is only a technical defect. This Court is of the considered view that the direction sought for by the petitioner in these writ petitions has to be granted, i.e., to direct the respondents to accept the certified copy of the impugned order submitted by the petitioner and thereafter process the Appeal filed under Section 107 of the Tamil Nadu Goods and Service Tax Act if it is otherwise in order and entertain the said Appeal thereafter and decide the same, on merits and in accordance with law - petition disposed off.
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2023 (2) TMI 931
Maintainability of appeal - appeal dismissed on the ground of being barred by time limitation - cancellation of registration of petitioner - HELD THAT:- It is true that the appellant was not vigilant in filing the appeal before the appellate authority within the period of limitation. On a perusal of the order of cancellation of the registration, it is seen that the appellant had submitted his reply dated 3rd November, 2021 to the show cause notice dated 24 th October, 2021. However, the same order states that no reply to show cause notice has been submitted. This mistake is sought to be explained by the learned Government counsel stating that it is a system generated order. In any event, the appellant had the benefit of registration from 2017 onwards and the appellant admits that he could not remit the tax and that he is a small time dealer and due to financial constraints, could not remit the taxes and at present, the appellant is ready and willing to remit the taxes along with the interest for belated payment and prays that the registration may be restored. The order of cancellation of registration dated 24 th October, 2021 is set aside and the appellant is granted 10 days time from the date of receipt of the server copy of this judgment and order to pay the entire tax due together with interest and other charges, if any and if the same is complied with, the assessing authority shall restore the registration granted to the appellant in accordance with law - Appeal allowed.
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2023 (2) TMI 930
Withdrawal from the composition permission - grievance on the part of the petitioner is composition permission was withdrawn with effect from 8.4.2022 i.e. the date on which the application of the petitioner was made, the portal did not allow him to retrospectively withdraw from the composition permission and hence, the petitioner raised a grievance with the GST helpdesk on 12.5.2022. HELD THAT:- The Petitioner s composite permission was effective from 26.12.2021. According to him, it never had supplied by making use of such composition permission be that it may, it had already filed the return which had expected to file in the month of January. Prescribed for those who are availing the composition benefit, admittedly the petitioner has filed CMP-08 returns but not the GSR 1M/GSTR-1Q and GSTR 3B/M/GSTR-3B Q returns which are meant for for regular/normal taxpayers for the period from the date of registration i.e. 26.12.2021 till the date it applied for cancellation to say that it was not aware of the registration under the composition scheme under Section 10 of CGST Act is not something believable and to say that he could come to know this mistake of even while filing of return of his income is also not believable. It is taken the GST registration under the composition scheme, the option is always with the taxpayer and it is his first application for the cancellation of this registration under the composition scheme had come on 8.4.2022. It is case of the petitioner that he got an order for export in March, 2022. He had already exported the goods to say that he was unaware of such operation under the composition permission and was not entitled to the expert goods under such permission is not acceptable. In the instant case as can be noticed , his expert has been made on 16th March, 2022, as per this provision he ceases to satisfy the conditions mentioned in Section 10 of CGST Rule and therefore, his request for cancellation of registration under the composition permission shall need to be essentially from the date on which, he had breached the condition stipulated in section 10 of the CGST Act. To that extent, the petitioner is right that the moment he entered into the export transactions would become entitled for composition permission because of provision of Section 10 and his permission is required to be cancelled with effect from the date of export transaction. While acceding to his request of such permission to be treated to have been cancelled from 16th March, 2022. The respondent-authority is also directed to take care of the software. Let their limitations be also addressed by the highest authority. Petition disposed off.
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2023 (2) TMI 929
Levy of GST - consideration received on sale of sites - advance received towards sale of site - sale of plots after completion of works related to basic necessities - rate of GST - on what value GST to be charged? - If GST is chargeable on any of these transactions, can the applicant collect the GST from the prospective buyers? - eligibility for claiming Input Tax Credit that are paid on the expenses they incur on development. HELD THAT:- The transfer of title in the land to the buyer is only limited to the dimensions of the plot being sold. The developed roads, drains, water supply lines and tanks, electricity lines and sewerage facilities are not sold to the purchasers of plots in the layout. The ownership of these facilities and infrastructure which are mandated by law lies with the local authority and the Planning authority. As such it cannot be said that the owner who has carried out the development of the land has rendered a service to the purchasers. The consideration that the buyer pays is with the intention of purchasing the plot. The consideration is not for receiving a service of development of land. The activity of developing the land is only incidental to the sale of land. The dominant intention here is the sale of land and not the provision of service of development. In the case of plotted development where a large parcel of land is subdivided into small plots for sale to buyers, the development of land is a mandatory prerequisite to the sale of plots as per the Town Country Planning Act. Where the parcel of land is being sold as is, such development work is not mandated by any law. In this case the Respondent is undertaking the development works as per the statutory requirement and any amounts received from interested buyers is only an advance for the purchase of land and not for the development works - The buyer approaches the developer and pays advances with the intention of getting an apartment built for him. Therefore, until the completion certification is received from the competent authority, the developer is rendering a service of construction to the buyer. However, any buyer who approaches a developer for purchase of an apartment after receipt of the completion certificate, is not getting any service from the developer and is paying the consideration for the purchase of building which is the ready to move in apartment. This transaction is not subject to GST in terms of entry 5 of Schedule III of the CGST Act. There can be no transfer in the title of a plot of land to the purchaser unless and until the same is released by the Planning Authority. This release of sites for transfer of title by registration happens only when the development work is complete and a completion certificate is obtained from the concerned Authority/Agency/Department. Therefore, any sale of a plot which is carved out of a large parcel of land can take place only after the development of the land. The Appellant Department has also contended that the Respondent charges the buyer based on the super built-up area and not on the exact measure of the plot. They contend that this evidences that the developer is collecting charges for land and services like land levelling, formation of roads, providing electricity facility, drainage line and water line, etc on a proportionate basis and all these are intrinsic part of the plot allotted to the buyer and such transactions are not relevant to the sale of land but are to the sale of developed plot, which amounts to rendering taxable supplies - it is made clear that any services procured by the owner from third parties for undertaking the development activity will be subject to GST at the applicable rates. The transfer of title in the land/plot cannot take place before the land is developed with the required infrastructure and amenities, as the Planning Authority, in terms of Section 17 of the KTCPA (reproduced in Para 15 ante), will not issue the layout plan unless the development is complete. Further, without the layout plan issued by the Planning Authority, the local authority will not issue the Khata for the plot and in the absence of the Khata, the registration process for transfer of title from the seller to the buyer will not take place. On a co-joint reading of all the provisions, it is held that sale of land developed by the Respondent is covered within the scope of the term 'sale of land' as mentioned in entry 5 of Schedule III.
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2023 (2) TMI 928
Exempt supply or not - composite supply or not - activities undertaken for milling of wheat into wheat flour, along with fortification and supplied upon packing of the same - Valuation of supply of services provided by the applicant Company to the State Government - rate of tax applicable on the value of supply - components to be included in calculation of the % of value of goods in the total value of composite supply for the purpose of Notification No. 2/2018- Central Tax (Rate). HELD THAT:- The applicant has been selected for empanelment for crushing of wheat into wholemeal atta and fortify it by premixing of micro-nutrients containing Iron, Folic acid, Citrate, EDTA and Vitamins to a specific percentage. The agreement further requires the applicant to pack the crushed stock of wholemeal atta after fortification into properly labelled poly-packs having thickness of 50 microns or above. It, therefore, appears that the activities undertaken by them for milling of wheat into wheat flour, along with fortification and supplied upon packing of the same qualify the definition of composite supply under clause (30) of section 2 of the GST Act where the supply of services by way of milling is the principal supply. Whether this composite supply is made in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution? - HELD THAT:- The agreement between the applicant and the State Government for supply of fortified Wholemeal Atta/Atta is found to be executed in terms of G.O. No. 2834-F.S. dated 6th September, 2017 - reference made to to Para 3.1 of the Circular No. 153/09/2021-GST dated 17.06.2021 where it is stated that Public Distribution specifically figures at entry 28 of the 11th Schedule to the constitution, which lists the activities that may be entrusted to a Panchayat under Article 243G of the Constitution. Hence, the instant composite supply made by the applicant is found to be in relation to any function entrusted to a Panchayat under article 243G of the Constitution. Whether the value of supply of goods in this case exceeds 25 percent of the total value of the supply or not? - HELD THAT:- The cash consideration paid by the State Government is Rs 179.48/- reduced by Rs 43/-, which comes at Rs 136.48/- per quintal. Further, the contract entered into with the State Government stipulates that the applicant will retain 1kg refraction and 4kgs bran for conversion of 100 kgs of wheat. As per the contract these bran and refraction are retained by the applicant and it is sold in the open market at the prevailing market rates which is generally around Rs 20/- per kg for bran and Re 1/- per kg for refraction. This rate was also confirmed in the memo issued by State Government of West Bengal, Department of Food and Supplies vide memo no. 569(3) - FS/Sectt/Food/4P02/2016/2021 dated 18.02.2022. It is found from the agreement made between the applicant and the State Government that the applicant has been selected for empanelment for crushing of wheat into whole meal atta and fortify it by pre-mixing micro-nutrients and to pack it in 1Kg poly pouch/packet and to deliver the same to the nominated M.R. Distributors - in the instant case, the applicant receives Rs.10/- and Rs. 50/- i.e., Rs. 60/- in total against fortification cost and packing charges respectively for crushing of 100 kgs of wheat which involves supply of goods. It needs to be determined whether such value exceeds 25% of the total value of supply or not. According to the applicant, total value of supply would be Rs 260.48/- which includes both cash and non-cash consideration. In this context, in a similar kind of activity, the Appellate Authority for Advance Ruling (AAAR,), Andhra Pradesh in the matter of Sri Kanakadurga Rice and Flour Mill reported [ 2020 (11) TMI 72 - THE APPELLATE AUTHORITY UNDER GST, ANDHRA PRADESH ] held that it is clear that the value of by-products so retained by the appellant yielded during CMR milling, which were allowed to be retained by the appellant to meet the CMR activity cost shall obviously be included as part of value of supply and also to be termed as a bona fide form of consideration . In the present case, the total value of supply to be Rs.260.48 out of which Rs.136.48 is the cash consideration and Rs.124 is the non-cash consideration, as it has been explained in the aforesaid memo. The value of goods involved in the instant supply stands at Rs.60/- against total value of supply of Rs. 260.48, thereby the value of goods involved in the instant composite supply stands at 23.03% of the total value of supply i.e., it does not exceed 25% of the value of the composite supply. Thus, the instant supply of services by way of milling of food grains into flour (atta) to Food Supplies Department, Govt. of West Bengal for distribution of such flour under Public Distribution System is eligible for exemption under serial no. 3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, since the supply satisfies all the conditions specified in the said entry.
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Income Tax
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2023 (2) TMI 927
Reopening of assessment u/s 147 - reopening beyond the period of four years - reasons to believe - whether the jurisdictional pre-conditions envisaged u/s 147 as was applicable to the present case, before its substitution by way of Finance Act, 2021 with effect from 1st April 2021 had been fulfilled, and if not, whether the reassessment proceedings could be said to be bad on account of change of opinion? - HELD THAT:- Section 147 of the Act empowers the AO to assess or re-assess an income if he has reasons to believe that such income has escaped assessment, subject to the provisions of section 148 to 153. The first Proviso to the said section, however, envisages, inter-alia that where an assessment under section 143(3) has been made, no action shall be taken after the expiry of period of four years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment for such year by reason of the failure on the part of the assessee as to make a return under section 139, or in response to the notice u/s 142(1) or section 148 as to disclose fully and truly all material facts necessary for its assessment for that assessment year. Since this is a case of reopening beyond the period of four years, AO was to satisfy the jurisdictional conditions on both counts, i.e., reason to believe and failure to disclose fully and truly the material facts . It is a settled principle of law that the jurisdiction exercised u/s 147 by an AO has to be tested on the touchstone of the reasons recorded, which can neither be improved subsequently nor added in the reply or in the subsequent pleadings. Admittedly, this was a case where an order of assessment under section 143(3) had been passed for the relevant assessment year. As per the ratio of the judgment in Hindustan Lever Ltd. V/s. R. B. Wadkar, Assistant Commissioner of Income-Tax and Ors. [ 2004 (2) TMI 41 - BOMBAY HIGH COURT] AO was obliged to disclose as to which fact or material was not disclosed by the Assessee fully and truly for the purposes of assessment of that assessment year so as to establish a vital linkage between the reasons and the evidence. In the present case, the jurisdictional condition has not been satisfied by the AO, except having made a bald statement that the material facts were not disclosed fully and truly. Shelter is sought to be taken by the AO in the reasons recorded that although the assessee had produced books of account, annual reports and audited profit and loss account as also the balance-sheet etc., the relevant material or facts were so embedded therein that they could not have been discovered by the AO despite due diligence. AO has failed to establish that there was any failure on the part of the assessee to disclose fully and truly any material fact in the present case. As all the relevant facts had not only been disclosed, as stated in the preceding paragraphs, but had also been considered by the AO, while considering the claim of deduction under section 35(2AB) in the order of assessment. Apart from this, the impugned notice has been issued without there being any tangible material with the AO as he clearly relied upon the material which was already on record. No information was received by the AO between the date of the order of assessment under section 143(3) and the issuance of the notice under section 148 - This is clearly impermissible in terms of the ratio of the judgment in the case of Jindal Photo Films Ltd. [ 1998 (5) TMI 20 - DELHI HIGH COURT] as being a case of mere change of opinion which does not provide jurisdiction to the AO to initiate proceedings under section 147. Decided in favour of assessee.
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2023 (2) TMI 926
Validity of deduction of TDS u/s 194A on interest - Motor Accident Claims - Enhanced Principal - TDS for the period prior to the date of Judgement of HC and after the date of Judgement - HELD THAT:- This issue has been considered by the Division Bench of this Court in the case of Rupesh Rashmikant Shah Vs. Union of India and others [ 2019 (8) TMI 518 - BOMBAY HIGH COURT ] interest awarded in the motor accident claim cases from the date of the Claim Petition till the passing of the award or in case of Appeal, till the judgment of the High Court in such Appeal, would not be exigible to tax, not being an income - till the date of the Judgment of the High Court no TDS can be deducted on the interest component and, as such, the deduction done by the Insurance Company on the interest component of the claim amount is bad in law. Order: The Insurance Company is directed to pay the TDS amount deducted on the interest component of the claim amount, uptill the date of the High Court Judgment along with 9% interest. Any interest on the claim amount after the date of the High Court Judgment, tax has to be collected as income from other sources and, as such, the Insurance Company would be entitled to claim TDS on that component of interest, which accrues after the High Court Judgment.
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2023 (2) TMI 925
Rectification of mistake u/s 254 - time limit for disposal of Misc. application - error in order on appeal as dismissed for non-prosecution - Tribunal has concluded that u/s 254 it had no power to condone the delay qua the application for recall of its order, which was filed beyond six months - HELD THAT:- The application moved by the petitioner was not moved with a view to rectify any mistake apparent from the record, or even to amend any order. The petitioner simply sought a recall of the order [ 2018 (1) TMI 1708 - ITAT DELHI] , whereby the appeal was dismissed for non-prosecution. Therefore, in our opinion, the said provision was not applicable for adjudicating the petitioner s application for recall of the order dated 24.01.2018. It appears, that the only avenue available to the Tribunal was as contemplated in Rule 24 of the ITAT Rules. While there was delay, the appellant seems to have furnished some reasons for explaining the delay. Broadly, the reasons given were that the notice of hearing issued by the Tribunal for the hearing on 24.01.2018 was misplaced, and did not reach the concerned officer of the petitioner, which according to the petitioner, was the primary cause for non-attendance on the said date. Furthermore, as per the petitioner, it was unaware of the passing of the dismissal order dated 24.01.2018, and only came to know about the same only on 05.02.2018. The petitioner also contends, that the inadvertent delay in filing the miscellaneous application was caused on account of the concerned persons in the Department being temporarily transferred to a plant outside Delhi, and some persons retiring during the relevant period. Having regard to the aforesaid, in our opinion, the appeal deserves to be heard on merits.The matter is remitted to the Tribunal for disposal of the petitioner s statutory appeal on merits.
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2023 (2) TMI 924
Refund of pre-deposit - ITAT on 21.10.2014 passed remand order - the authorities were required to pass fresh assessment by 31.03.2017 - But, order was not passed by that time - writ petition claiming refund after deduction of tax liability on the admitted depreciation disallowance - HELD THAT:- The issue is no more res integra. This Hon'ble Court in Deep Chand Jain [ 1983 (8) TMI 52 - PUNJAB AND HARYANA HIGH COURT] wherein as entirely concur in the view taken by Chandrakantaraj Urs, J. in R. Gopal Ramnaryan's case [ 1980 (6) TMI 23 - KARNATAKA HIGH COURT] to the effect that until and unless the quantum of tax is determined in accordance with the procedure laid down by law, the revenue has no right to collect the tax, and, if tax, by way of advance tax or on self-assessment or having been deducted at source, has been paid by the petitioner, the same cannot be retained contrary to the requirements of article of the Constitution. In the present case, admittedly, no assessment order has been passed nor any assessment order could be passed, the same having been barred by the provisions of Section 153(1)(a)(iii). Said view has further been followed by Division Bench of this Court in the case of Bharti Engineering Corporation vs. Union of India [ 2006 (5) TMI 52 - PUNJAB AND HARYANA HIGH COURT]] Resultantly in light of the consistent view of this Court, the present writ petition is allowed. Respondents are directed to refund the excess amount deposited by the petitioner after deducting tax liability qua depreciation disallowance which stands admitted by the petitioner before Tribunal within 30 days from the date of receipt of certified copy of this order. The petitioner will also be entitled to statutory interest on such amount to be calculated for period starting from 01.04.2017 till the date of actual payment.
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2023 (2) TMI 923
Nature of receipt - addition on account of Hardship Compensation received - revenue receipt or capital receipt - assessee is a member of the MIG Co-operative Housing Society Ltd. - As per assessee payment is a hardship allowance to cover the cost of prospective loss of place of residence and the consequential hardship thereof, including loss of furniture, fixtures, and other inbuilt conveniences like fresh gas connections and various other facilities including relocation of residence - HELD THAT:- We find that while dealing with a similar issue of taxability of hardship compensation, the coordinate bench of the Tribunal in Lawrence Rebello [ 2021 (10) TMI 63 - ITAT INDORE ] held that the benefit received by the assessee in the form of bigger size of flat and amount received as hardship allowance from the developer is a capital receipt, which cannot be treated as revenue receipt for taxing as income - Decided in favour of assessee.
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2023 (2) TMI 922
Reopening of assessment u/s 147 - corrigendum issued to make changes in reaosns to belive - Wrongful assumption of jurisdiction u/s 147 as alleged - Impermissibility of substantive modification of Reasons recorded by issuing of corrigendum - HELD THAT:- By the Corrigendum, two important changes have been carried out; firstly, the name of broker was amended from S.S. Corporate Services Ltd. to broker namely A to Z Stock Trade Pvt. Ltd. ; secondly, the amount of alleged escapement was modified from Rs.15,78,004.95 to Rs.21,31,154/-. We find the action of the AO to be wholly untenable in law. By issue of corrigendum, the Assessing Officer has attempted to rectify the very fulcrum of believe derived qua the broker, i.e., S.S. Corporate Securities Ltd. The name of the broker was substituted in the corrigendum which has changed the tone of the entire basis for assumption of jurisdiction u/s 147 - The amount earlier computed and determined precisely at Rs.15,78,004.95 was also substituted by improved figure of Rs.21,31,154/- in the corrigendum. The whole basis for deriving the belief from the information is thus substantially changed. AO, in the instant case, has formed the belief qua the material attributable to transactions with S.S. Corporate Securities Ltd., if it is to be assumed that the action was taken with application of mind. The assessee however pointed out in the course of the assessment that no transactions have been carried out in the capital market segment or in the currency derivative segment through the said broker. Thus, at the stage of recording reason, the Assessing Officer was not privy to the exact nature of information at all for alleged formation of believe or in the alternative he has casually and perfunctorily exercised power of reopening dehors the material supplied to him. Both the situations disempowers the Assessing Officer to exercise the drastic powers conferred under Section 147 of the Act. Reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the AO to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. While the Revenue is entitled to elaborate on briefly recorded reasons, the Revenue cannot give new ground for reopening, genesis of which is not traceable to such recorded reasons. Hence, the supplementation made by the AO by way of corrigendum is totally contrary to the plethora of judicial pronouncement holding the field in this regard. Applicability of Section 292B to change the basis of reopening a case - The instant case is the case of the jurisdictional defect which cannot be rectified by invoking the provisions of Section 292B of the Act. Thus, on a nuanced analysis of fact situation, we find traction in the plea of the assessee. The reasons cited for forming belief in the instant case are wholly incongruent and at odds with actual facts. The Assessing Officer apparently has not applied his mind. The corrigendum issued with the aid of Section 292B is thus also not sustainable in law for the reasons noted above. Thus, the action of the Assessing Officer suffers from multifaceted defects of cardinal nature in serious transgression of statutory requirements. The reasons were not recorded qua the transactions in relation to broker M/s. A to Z Stock Trade Pvt. Ltd. Such fundamental infirmity of substantive nature while usurping jurisdiction cannot be called a mere technical defect or procedural irregularity. Such vital infirmity, in our considered view cannot be cured or obliterated by taking shelter of Section 292B of the Act. We hold that impugned notice issued under Section 148 suffers from inherent fundamental defects and does not meet the requirement contemplated under Section 147 of the Act. The notice issued under Section 148 is thus null and void and as a sequel thereto, re- assessment proceedings carried out in the instant case is without jurisdiction. Hence, in our considered opinion, the Assessing Officer has misdirected himself in law in initiating the re-assessment proceedings without any legal foundation. Appeal of the assessee is allowed
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2023 (2) TMI 921
Income deemed to accrue or arise in India - Royalty receipt - payment received by the Assessee from the customers is on account of use of process involved in the transponders and its amounts to royalty within the meaning of section 9(l)(vi) and also amounts to royalty within the meaning of respective articles of DTAA - income earned by the assessee from providing digital broadcasting services through its transponders to customers in India was not taxable in India under the relevant DTAA - HELD THAT:- The issue with regard to functions performed by transponders could not be categorized as process stands settled. As in case of Director of Income Tax Vs. New Skies Satellite [ 2016 (2) TMI 415 - DELHI HIGH COURT ] settled the controversy holding that all that the customers gets through the agreement with the Assessee is mere access to a broadband width available in the transponder. The control over the parts of the satellite and naturally transponder remains with the Assessee. At no point does the Assessee cede control over the satellite to the customers. Logically therefore, since the transponder is a part of satellite that cannot be severed from it, there can be no independent control of the transponders without control of the satellite itself. As concluded by HC that the Finance Act, 2012 will not affect Article 12 of the DTAAs, it would follow that the first determinative interpretation given to the word royalty in Asia Satellite [ 2011 (1) TMI 47 - DELHI HIGH COURT] , when the definitions were in fact pari materia (in the absence of any contouring explanations), will continue to hold the field for the purpose of assessment years preceding the Finance Act, 2012 and in all cases which involve a Double Tax Avoidance Agreement, unless the said DTAAs are amended jointly by both parties to incorporate income from data transmission services as partaking of the nature of royalty, or amend the definition in a manner so that such income automatically becomes royalty. Appeal of the revenue is dismissed.
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2023 (2) TMI 920
Appeals to the Appellate Tribunal - appeal fee - computation of total income assessed by the AO to which this appeal relates - DR has objected to the appeal fee of Rs. 500/- deposited by the assessee while filing this appeal, and it was submitted by ld. Sr. DR that the appeal fee as stipulated under Section 253(6)(c) amounting to Rs. 10,000/- is to be paid while filing this instant appeal with tribunal - HELD THAT:- As in the instant appeal filed by the assessee with tribunal, the appeal fee of Rs. 10,000/- shall be leviable u/s 253(6)(c) of the 1961 Act. We clarify that we have restricted our discussions and decision to the actual factual matrix of the case before us, and so far as other facts situations contended by the assessee, it is merely academic so far as this appeal is concerned and hence not adjudicated by us. Since now we have now held that an appeal fee of Rs. 10,000/- shall be payable by the assessee while filing this appeal with tribunal keeping in view provisions of Section 253(6)(c) of the 1961 Act , and the assessee has only deposited an appeal fee of Rs. 500/-, we direct assessee to deposit the differential appeal fee amount to Rs. 9,500/- on or before 6th March , 2023 with Government Treasury , and file the paid challan with Registry latest by 09th March, 2023, failing which appeal of the assessee shall stand dismissed .
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2023 (2) TMI 919
Rectification of mistake - Assessment of trust - depreciation on Fixed Assets denied - Correct head of income - assessee declared the entire income under the head income from other sources and the CPC did not give benefit of depreciation on the Fixed Assets - as per DR there is no provision in the Income Tax Act for granting deprecation except specified in sec. 57 and as receipt of the truest is more than Rs. One crore, accordingly it is not eligible for exemption as per section 10(23C)(iiiad) - HELD THAT:- On going through the income and expenditure account and the entire submissions of the assessee, the assessee wrongly offered the income from under the income from other sources u/s 56 of the Act. After going through the sec.56, as observe that the income earned by the assessee does not fall under the head of income from other sources . The sole purpose as per submission of the assessee is to running a school for educational purposes to students, therefore, if any income received by the assessee will not fall under the head income from other sources . The income of the assessee should be computed under the head profit and gains of business profession as per under Chapter IV D , therefore the income should be computed as per Chapter IV D of the I.T. Act. As per section 14 of the Act heads of income has specified the manner procedure for calculating the total income after considering the relevant sections/provisions of the Act. Since the assessee s activities falls under the head D - Profits and gains of business or profession, therefore the assessee is eligible for depreciation on Fixed assets as per section 32 of the Act. CIT(A) as dismissed appeal of the assessee on wrong footings. Even in the order passed u/s 143(1) , the CPC gives opportunity the for filling the rectification application. It is clear that not granting depreciation on Fixed Assets were mistake apparent from the record which could have rectified by the authorities below. CIT(A) should have corrected the mistake which are done by the AO/CPC whereas the CIT(A) has decided only the issue that it is debatable issue and it cannot be rectified u/s 154 of the Act. Assessee himself wrongly declared its income under the head income from other sources . The income should be computed as per manner prescribed in the Act under the head D.- Profits and gains of business or profession. The depreciation is notional expenditure and it is statutory incentive to the assessee if the assessee has satisfied all the conditions for getting depreciation. Since the lower authorities have not examined the preliminary requirement for getting depreciation allowances as per sec. 32 of the Act and computation of depreciation also - Thus remit this issue to the file of the AO for the eligibility of the depreciation claimed. Appeal of the assessee is allowed for statistical purposes.
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2023 (2) TMI 918
Deduction u/s 80P(2)(d) - interest received by the co-operative society from co-operative bank - HELD THAT:- The view taken was that the interest received by the co-operative society from co-operative bank is eligible for deduction u/s 80P(2)(d) - assessee in that case was also a sugar co-operative society like that of the present assessee. DR before us could not bring any evidences/documents supporting Revenue contrary to the facts existing on record. Therefore, on the same parity of reasoning, the relief granted already to the assessee on this issue is sustained. Ground No.1 of Revenue is dismissed. Disallowance of ceremony expenses - AO had disallowed ceremonial expenditure on the ground that it is not related to the business purpose of the assessee or exclusively for commercial expediency in functioning of the assessee s business - HELD THAT:- These functions give a moral boost to the working efficiency of the employees. At the same time, they cannot be expected to contribute for these functions. The expenses for the ceremony and functions are borne by the assessee and in so much as they are intrinsically weaved within the basic functioning of the assessee's business, hence should be allowable as business expenses. CIT(A) of his order while providing relief on this issue to the assessee directed the AO to delete the addition stating that such kind of functions create harmony amongst the workers and management. These ceremonies are required to be performed on account of tradition and to certain extent as compulsion since these functions are followed in every sugar factory. The expenses have to come from the account of assessee only. It cannot be expected to be collected from the employees. These expenses take the colour and character of business expenses. We are in conformity with the finding of learned CIT(A) and the same is upheld. Ground of Revenue is dismissed.
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2023 (2) TMI 917
Revision u/s 263 - As per CIT AO's allowance of deduction u/s 80P was incorrect - HELD THAT:- As decided in own case [ 2022 (12) TMI 355 - ITAT PUNE ] we find that the issue which is subject matter of revision is covered in favour of the assessee by judicial precedents. Therefore, we are of the considered opinion that the order of revision passed by the ld. PCIT u/s 263 of the Act cannot be sustained in the eyes of law. Hence, the grounds of appeal raised by the assessee stand allowed.
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2023 (2) TMI 916
Rectification of mistake u/s 154 - period of limitation - claim of deduction u/s.80IA of the Act was denied to the assessee by applying the provisions of Section 80IA(12A) - HELD THAT:- The subject matter of first rectification proceedings was granting further credit of TDS and rectification of excess interest charged u/s.234C and the subject matter of impugned section 154 proceedings dated 27/03/2018 was denial of deduction u/s.80IA of the Act. No hesitation to hold that the second rectification order passed u/s.154 of the Act dated 27/03/2018 wherein the claim of deduction u/s.80IA of the Act was denied to the assessee by applying the provisions of Section 80IA(12A) of the Act, is clearly barred by limitation. Accordingly, the issue framed hereinabove in question a above is decided in favour of the assessee. Even on merits, AR placed on record the copy of decision of Ultratech Cement Ltd. [ 2022 (1) TMI 923 - ITAT MUMBAI] wherein this Tribunal had passed an elaborate order after due consideration of provisions of Section 80IA(12A) of the Act and granted deduction u/s.80IA of the Act to the successor company. For the sake of brevity, the elaborate observations made by this Tribunal on merits is not reproduced hereunder. Hence, even on merits, the assessee is entitled for deduction u/s.80IA of the Act in the facts and circumstances of the instant case. Accordingly, the ground Nos. 1-4 raised by the assessee are allowed. TDS credit - This issue requires factual verification by the ld. AO. Hence, the ld. AO is hereby directed to decide the issue in accordance with law.
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2023 (2) TMI 915
Benefit of exemption u/s 54F 54B - Long term capital gain from sale of urban agricultural land - AO held that capital gain was taxable in A.Y. 2012-13 and not 2011-12 - HELD THAT:- It is pertinent to note that the Ld. A.R. has distinguished the decision in factual aspect that of Balbir Singh Maini [ 2017 (10) TMI 323 - SUPREME COURT ] and Suraj Lamp Industries [ 2011 (10) TMI 8 - SUPREME COURT ] In this particular case the assessee is an individual and he has sold 1/4th share of the said land and purchased the land (agricultural land) in A.Y. 2011-12 itself. The execution of the agreement related to purchase of land and possession of the land was in A.Y. 2011-12 only. The registration is in April 2011cannot debar the assessee when the assessee has claimed benefit of exemption under Section 54F 54B is in A.Y. 2011-12 itself. The same has not been granted in that particular year. As the assessee has offered his income from Long Term Capital Gain in A.Y. 2011-12 only. These aspects were not taken into account by the Assessing Officer as well as CIT(A). Hence, the appeal of the assessee is allowed.
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2023 (2) TMI 914
Deeming gift of immovable property - applicability of section 56(2)(vii) - gift of immovable property to appellant (done) prior to 1.10.2009 - unregistered gift but duly notarized - HELD THAT:- AO has erred in observing that the transaction is one of the nature where assessee has received immovable property for a consideration, which is less than the stamp duty value and thus considered it to be deemed gift/ income in the hands of assessee. In the context of deemed gift on the basis of inadequate consideration, the series of documents executed between the assessee and her maternal uncle indicate that the transaction was Gift only and had completed before 01.10.2009. So the provisions of Section 56(2)(vii)(b) which were introduced in the Act by Finance Act, 2010, with retrospective effect from 01.10.2009 are wrongly applied. Transfer Deed of lease hold rights executed and registered on 23.10.2010 was merely documents whose execution became necessary for creating a legal title. Assessee cannot be put to disadvantage on basis of this documents dated 23/10/2010, so as to say that there was transfer of interest on this date only. All the previous documents once duly protected by Suraj Lamp and Industries Pvt. Ltd. Case [ 2011 (10) TMI 8 - SUPREME COURT ] deserved to be taken into consideration, which Ld. Tax Authorities below failed to do. Addition u/s 69 - Tax Authorities below have fallen in error to not take into consideration the series of documents. Since the transaction is proved to be a gift, there is no question of any consideration being passed. The reference to consideration in agreement seems to be out of wrong advise parties may have received as they were advised to execute all sorts of documents with only intention to protect any contingency. However, the primary document of transfer of interest being the gift deed only.
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2023 (2) TMI 913
Disallowance of interest paid - Interest free advances - AO made the disallowance alleging that on one hand the assessee has given interest free advances and on the other hand, it is claiming interest expenditure on unsecured loans taken - HELD THAT:- Sale consideration has been received but payments have not been made to the sundry creditors, cannot be questioned by the revenue authorities and the same depends on the credit limit available for making payments to the sundry creditors and the time of receiving amount from sale of goods and one cannot ignore the situation if sales are realised in much less period and assessee is left with sufficient time to pay the sundry creditors and during this gap, assessee is possessed with surplus funds, which can be used for other business purposes. Since details have been placed before us, which are part of the audited financial statements and remain uncontroverted, we are inclined to hold that the assessee has sufficient interest free funds available to give interest free funds and, therefore, the ld. CIT(A) was not justified in confirming the disallowance of interest expenditure - Appeal of assessee allowed.
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2023 (2) TMI 912
Demand u/s 201(1) with interest u/s 201(1A) - non deduction of TDS on the interest paid to HUDCO - minor delay in submitting the declaration that the payee (HUDCO) has paid tax on such interest - assessee submitted that the required form 26A being the certificate of chartered accountant as per sub-section 1 of section 201 of the Act, could not be submitted before the assessing officer because the order has been passed before the relevant due date of filling the ITR - HELD THAT:- When there was no dispute about such a declaration being filed in a prescribed format and there was no dispute about the genuineness of such declaration, mere the form is not filed with the office of the assessing officer and that too the order was passed before the due date of filling the return of income and therefore, the assessee was prevented from sufficient cause and the same were filed before the ld. CIT(A) is sufficient compliance and the said declaration filed would not defeat the very claim. The similar view is taken in the case of Siyaram Metal Udyog (P.) Ltd. [ 2016 (7) TMI 68 - GUJARAT HIGH COURT] held main thrust of sub-section 1A of section 206C thus is to make a declaration as prescribed, upon which, the liability to collect tax at source under sub-section (1) would not apply. When there was no dispute about such a declaration being filed in a prescribed format and there was no dispute about the genuineness of such declaration, mere minor delay in filing the said declaration would not defeat the very claim. The Tribunal therefore, viewed such delay liberally and in essence held that there was substantial compliance with the requirement of filing the declaration - Decided against revenue.
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2023 (2) TMI 911
Undisclosed sales and estimated profit of the outside book sales at 3.9% - CIT(A) deleting the addition for undisclosed sale and sustaining the addition only to the extent of net profit element embedded in the alleged undisclosed sale - HELD THAT:- Finding of the ld. CIT(A) is in line with the judicial precedents as held consistently including in the judgment of President Industries [ 1999 (4) TMI 8 - GUJARAT HIGH COURT] , as well as by the decision of the ITAT Delhi Bench in the case of Anil Kumar Bajaj [ 2018 (6) TMI 1512 - ITAT DELHI] We fail to find any infirmity in the order of the ld. CIT(A) who has rightly taken into consideration the net profit offered by the assessee in the last three years and has also taken into consideration that purchases made by the assessee are only made from Bharat Petroleum Ltd. and the ld. Assessing Officer has not disputed the said purchases and since the sale prices are not in control of the assessee and they have to be kept as per the rates decided by the oil marketing companies, the margin of profit can only be subject to tax. Thus, since the CIT(A) has applied highest of the net profit rate i.e., 3.90 % on the alleged undisclosed sales, we do not find any reason to interfere in the said finding. Thus, the effective ground of appeal raised by the revenue stands dismissed.
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2023 (2) TMI 910
Disallowance made u/s. 40(a)(ia) - Exhibition Expense - Non deduction of TDS @0.01% - Assessee contented that for purpose of lower deduction of tax u/s. 197 receipient applied for deduction certificate and same was granted to him by his assessing officer - HELD THAT:- On this issue we have gone through the provision of section 40(ia). The law provide that if the assessee pays this tax then the same is allowable in the year when it is paid. Even the assessee on written submission sought relief that the AO be directed to allow the expenses in the year of payment of TDS. Looking to this provision and the specific relief sought by the assessee the ld. Assessing officer is directed to give the consequential relief in the year in which the tax has been paid by the assessee. In terms of these observation the ground are allowed for statistical purpose. Exemption of 80IB in respect of Duty Drawback - HELD THAT:- Assessee fairly admitted that the issue is pending before the supreme court which was decided by the ITAT against the assessee and has not been decided yet. Therefore, the assessee prayed that when the supreme court pass the order the consequential relief be implemented in the years also. The bench fairly admitted the plea of the assessee and the assessing officer is directed to give necessary appeal effect arising out of the order of the supreme court in the case of the assessee. As decided in assessee own case [ 2018 (2) TMI 1704 - ITAT JAIPUR ] particular receipt which is found to be not income/profit derived from the business of the eligible undertaking has to be excluded for the purpose of computing the deduction u/s 80IB. Hence, we find that the case of the assessee does not fall in the category where the Assessing Officer has accepted the business of the assessee undertaking as eligible for deduction u/s 80IB in the initial year but has taken a difference stands in the subsequent years. Further, a year before us is not the first year in which the claim of the assessee u/s 80IB in respect of Vishesh Krishi Upaj Yojana and Drawback Duty has been denied but this was denied in the earlier years and for the Assessment Year 2008-09, the matter has been carried to the Hon ble Jurisdictional High Court but the assessee could not succeed. Hence, we do not find any substance in the ground of the assessee s appeal same is dismissed.
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2023 (2) TMI 909
Rectification of mistake u/s 254 - Income from factory premises - income from business OR income from other sources - HELD THAT:- Assessee is seeking recalling of the order [ 2015 (8) TMI 1566 - ITAT DELHI] passed by the Tribunal. The assessee has failed to point out error which is apparent from the record and can be rectified u/s 254 The judgments relied by the Ld. Counsel for the assessee do not help as in the case of Radhasoami Satsang [ 1991 (11) TMI 2 - SUPREME COURT] has clarified that the decision is confined to the facts of the case and may not be treated as an authority on aspects which have been decided for general application. Therefore, respectfully following the judgment of Hon ble Supreme Court in the case of CIT vs M/s Reliance Telecom Ltd. [ 2021 (12) TMI 211 - SUPREME COURT] no merit in the contention of the assessee that there is a mistake apparent on record and needs to be rectified. On the contrary, it would tantamount to revisit the decision of the Tribunal on merit and to disturb the observations of the Tribunal which was given after appreciating the facts on record.M.A. filed by the assessee is dismissed.
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2023 (2) TMI 908
Reopening of assessment - income for bogus purchases - HELD THAT:- AO received information from the DGIT (Inv.), Mumbai, as well as the Sales Tax Department, Government of Maharashtra, indicating that the assessee is a beneficiary of bogus purchase bills. On the basis of such information, which is a new and tangible material, AO had formed the belief that income chargeable to tax has escaped assessment requiring re opening of assessment under section 147 - Therefore, in view of the above, we uphold the re opening of assessment under section 147 of the Act in the facts of the present case. Accordingly, ground no.1, raised in assessee s appeal is dismissed. Estimation of income bogus purchases - As relying on Mohammad Haji Adam case [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT ] we set aside the impugned order passed by the CIT(A) and restore the matter to the file of the Assessing Officer with the direction to restrict the addition as regard the bogus purchases by bringing the gross profit rate on such bogus purchases at the same rate as that of the other genuine purchase. We further direct that if the gross profit rate on bogus purchases is higher than the other genuine purchases and the same has already been offered to tax by the assessee then no further addition be made. Accordingly, grounds raised in assessee s appeal are allowed for statistical purposes.
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2023 (2) TMI 907
Disallowance being payment of employee s contribution to ESI and PF - debatable issue - adjustment u/s.143(1) - Payment delayed but well before the prescribed due date of filing of return u/s.139(1) - HELD THAT:- The contention of the assessee that the issue of allowability of his claim for deduction of belated deposit of the employee s share of contributions towards ESI EPF was a debatable one, we are afraid would jeopardize the very maintainability of his application filed u/s.154 of the Act with the A.O. In case, the aforesaid claim of the assessee that the issue in question was a debatable one, is to be accepted, then, the remedy that was available with him against the adjustment made u/s.143(1) of the act was to prefer an appeal against the same before the CIT(Appeals) and not to carry the same before the A.O by way of an application u/s.154 of the Act. Be that as it may, the aforesaid judgment of the Hon ble Apex Court in the case of Checkmate Services Pvt. Ltd. ( 2022 (10) TMI 617 - SUPREME COURT ) not only seizes the issue in question and renders the matter as no more res-integra, but the same as per Article 141 of the Constitution of India is to be construed as a declaration of law by the Court and has to be given a retrospective application. On construing the judgment of the Hon ble Apex Court in the case of Checkmate Services Pvt. Ltd. (supra) as a declaration of law as it always have been, the view taken by the A.O disallowing the assessee s claim for deduction of delayed deposit of employees share of contribution towards ESI and EPF being in conformity with the aforesaid judgment of the Hon ble Apex Court, thus, by no means could be held to be debatable. We, thus, in terms of our aforesaid deliberations are of the considered view that the claim of the assessee that the issue in hand was a debatable one, and thus, could not have been brought within the realm of Section 143(1) of the Act cannot be accepted. Appeal of the assessee is dismissed.
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2023 (2) TMI 906
Income deemed to accrue or arise in India - Permanent Establishment (PE) - Protocol to implement the DTAA was not notified - amounts received by the assessee are in the nature of FTS under Article 13 of India Israel DTAA - Whether in course of rendering services the assessee had made available technical knowledge, experience, skill, know-how, process etc. enabling NIIPL to apply the technology contained therein independently without the aid and assistance of the assessee? - HELD THAT:- In the facts of the present appeal, except making general observation that the assessee has made available technical knowledge, knowhow, skill etc. the departmental authorities have not brought any material on record to prove such fact. The allegation of the departmental authorities that they are taking such position in absence of material/evidence furnished by the assessee to establish its claim, in our view, is not borne out from record. Not only the agreement mentions in detail the nature of services to be provided by the assessee, but the assessee has furnished various other material on record, including invoices raised for reimbursement of cost. Thus, in our view, the Revenue has failed in proving that the make available condition is satisfied. Therefore, applying the restricted meaning of FTS as per India Portugal and India Canada DTAAs, we hold that the amounts received by the assessee from providing SAP and IT support services are not in the nature of FTS, hence, not taxable in India in absence of a Permanent Establishment (PE). At this stage, for the sake of completeness, we must observed, learned Departmental Representative has submitted that in absence of specific notification by the Government implementing the Protocol to India Israel DTAA the restrictive meaning in other DTAAs cannot be applied to India Israel DTAA. Though, the aforesaid contention of learned DR is unsustainable at the threshold considering the fact that learned DRP has given the benefit of Protocol to Indian Israel DTAA, however, we deem it appropriate to address the issue. In case of Steria (India) Ltd. [ 2016 (8) TMI 166 - DELHI HIGH COURT ] while dealing with similar contention raised by the Revenue, has held that once the DTAA itself has been notified and contains the Protocol there is no need for the Protocol itself to be separately notified or for the beneficial provisions in some other conventions between India and another country to be separately notified to form part of India France DTAA. Thus, in view of the aforesaid observations of Hon ble Jurisdictional High Court, we do not find merit in the submissions of learned Departmental Representative. - Decided in favour of assessee.
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2023 (2) TMI 905
Addition u/s 68 - difference between opening balance and closing balance of creditors - HELD THAT:- It is the case of the assessee that the sundry creditors predominantly comprises of outstanding payable by the assessee to Serco UK. As contended, the increase in sundry creditors is mainly on account of increase in outstanding liability of Serco UK. As claimed, the increase in such liability of Serco UK is owing to currency difference and consequently increase in the value foreign currency (pound) qua the earlier year. The explanation offered by the assessee is obviously abstract one and without support of any documentary evidences. At the cost of repetition, neither the ledger account of creditors are available nor any document to vouch for such abstract explanation. It is not known whether the old liability on account of trade payable has continued as such when the business of the assessee company shows the expenses incurred pegged at Rs.29. 35 crore and revenue of Rs. 7.35 Cr.. In the absence of any record to vindicate the bonafides of outstanding liability on account of trade payables as claimed, we see no traction in the plea of the Assessee. We are rather persuaded by the contentions raised on behalf of Revenue. We are thus dis-inclined to interfere with the findings of Assessing Officer and CIT(A). Disallowance of expenses being 20% of other expenses - HELD THAT:- AO was within its power to estimate the disallowances under such circumstances, in discharge of its quasi-judicial function. The action of the Assessing Officer in making estimations thus cannot be dubbed as asymmetric or beset with any illegitimacy. The CIT(A) resonated with the action of the AO and concurred with the same owing to failure of the Assessee yet again to substantiate the claim. It will be wholly speculative for the tribunal to displace the quantum of estimations by some lower amount and say that estimate arrived by revenue under such gross circumstances was excessive or otherwise. We are in no position to weigh or modify the estimations as urged on behalf of the assessee on the basis of some abstract explanations offered on behalf of the assessee. AO has arrived at an estimate of disallowance which he was entitled to, in the absence of supporting evidences. CIT(A) has endorsed the aforesaid action after due appraisal of facts and circumstances. We hardly see any potency in the plea of the Assessee. Arguments canvassed by Revenue without repetition, has considerable force. We thus decline to interfere therewith. Appeal of the assessee is dismissed.
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2023 (2) TMI 904
Rate of TDS on payment to non resident - Non-availability of PAN of non resident - payments in the nature of fees for technical services - provisions of section 90(2) read with DTAA overrides the provision of section 206AA or not? - Whether assessee is liable for deduction of tax at higher rate for want of Permanent Account Number of the concerned non-resident payees as per the provisions of section 206A? - HELD THAT:- There is no dispute to the fact that all the payments were made to the non resident of the countries with whom there are DTAA agreement by India. There is no dispute to the fact that the assessee had applied rate at lower level while the AO had applied higher rates as per Act considering appellant to be assessee in default. The order of the CIT(A) shows that the judgment of Danisco India Pvt. Ltd Vs. UOI [ 2018 (2) TMI 1289 - DELHI HIGH COURT ] wherein case of Dy. CIT Vs. Serum Institute of India [ 2015 (6) TMI 26 - ITAT PUNE ] Further without a wording of discussion to distinguish the legal proposition on facts or law, CIT(A) had failed to follow the same. This leaves no doubt in the mind of this bench that the ld Tax Authorities below have fallen in error in not extending the benefits of section 90(2) - DR could not point out the provisions of the Act or DTAA to support the observations of CIT(A). The matter of fact remains that what were the rates of taxation under DTAA are not coming up from the matter before this bench therefore, the issue requires to be restored to the files of Ld. AO to take into consideration the rate of the DTAA and recalculate the tax demand considering difference between the rate applied by the Ld. AO and the rates on which tax deducted by the assessee in terms of the relevant DTAA. As far as the claim of refund is concerned there is no force in the submissions of the ld DR that claim is being raised belated as order of the CIT(A) shows that rectification petition u/s 154 was filed by the assessee wherein, the request for refund of the excess TDS deducted was made and being aggrieved by non rectification and non-refund of the tax deposited appeal was filed. This issue is also subject to the determination of tax rates as directed to be recalculated.
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2023 (2) TMI 903
TP adjustment in respect of franchise fee - prudence of expenditure - TPO at threshold has discarded payment of franchise fee on the ground of need of such payment - HELD THAT:- TPO has exceeded his jurisdiction in making such observation. TPO cannot step into the shoes of assessee to decide prudence of expenditure. The TPO failed to examine the documents furnished by assessee to benchmark the transaction by applying one of the methods specified in Chapter-X of the Act. Thus, in the facts of the case we hold that the findings of the TPO/Assessing Officer in making adjustment in respect of franchise fee are unsustainable. The adjustment is deleted and ground of appeal is allowed.
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2023 (2) TMI 883
Ex parte order passed u/s 254(1) - non appearance by assessee - As argued assessee did not receive even a single notice fixing the hearing of the appeals and therefore could not appear before the Tribunal on the date of the hearing - HELD THAT:- From the perusal of the record, we find that notices were issued to the assessee on more than one occasion including through registered post - we find no acknowledgement of receipt of notice by or on behalf of the assessee in the record. The Co ordinate Bench of the Tribunal in the absence of representation on behalf of the assessee proceeded to decide the appeals filed by the assessee ex parte qua the assessee after hearing the submissions of the Revenue and perusal of the material available on record. There was sufficient cause for non appearance on behalf of the assessee when the appeals were called for hearing. Therefore, we deem it fit and appropriate to recall the aforesaid ex parte order passed in assessee s appeals being for a fresh hearing of the appeals on merits. In view of the undertaking given by the learned A.R. that he will be appearing in the appeal hearing, the appeals are fixed for hearing on 15/02/2023, i.e., the date convenient to both parties. Miscellaneous Applications filed by the assessee are allowed.
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Customs
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2023 (2) TMI 902
DFIA (Duty Free Import Authorisation) scheme - revalidation of the DFIA licences - whether actual user of the licence can use the licence for import of goods mentioned in the licence or not? - whether the Public Notice No.84/2009-14, dated 23.07.2010 and the Policy Circular No.13, dated 31.01.2011, issued by the first respondent are prospective or retrospective in operation? HELD THAT:- Admittedly, no stay of the judgment, passed by the Division Bench of the Punjab and Haryana High Court in the matter of Pushpanjali Floriculture Pvt. Ltd. vs. Union of India, [ 2016 (7) TMI 628 - PUNJAB HARYANA HIGH COURT ], has been granted by the Hon'ble Supreme Court. It is also not in dispute that the decision rendered by a learned Single Judge of this Court in the case of Hoewitzer Organic Chemical Co. vs. D.G.F.T., New Delhi [ 2013 (6) TMI 303 - MADRAS HIGH COURT ], which is relied upon by the learned counsel for the petitioner, has attained finality as the department has not filed any Appeal as against the said order. In the said decision, the learned Single Judge, after following the judgments of the Hon'ble Supreme Court in the case of S.B.International Ltd. vs. Assistant Director General of F.T. [ 1996 (1) TMI 125 - SUPREME COURT ] as well as the Jain Exports (P) Ltd. vs. Union of India [ 1988 (5) TMI 50 - SUPREME COURT ], has held that the import policy prevalent at the time of issuance of the licence would apply to goods covered by imports made under that licence and the subsequent change in policy will be of no consequence. In the instant case also, only based on the Public Notice No.84/2009-14 dated 23.07.2010, the clarification dated 23.09.2010 and the Policy Circular No.13 dated 31.01.2011, the petitioner's request for revalidation of the DFIA licences, which are the subject matter of the writ petition, have been rejected under the impugned order. Though the petitioner's DFIA licence came into effect on 15.04.2010 itself, the petitioner has been able to utilise the DFIA licence only for few months and thereafter, due to the aforementioned Public Notice dated 23.07.2010, Clarification dated 23.09.2010 and Policy Circular No.13 dated 31.01.2011, they have been unable to get the benefit of DFIA licences - Admittedly, no stay has been obtained from the Hon'ble Supreme Court and only a S.L.P. is pending as against the Division Bench judgment of the Punjab and Haryana High Court in Pushpanjali Floriculture Pvt. Ltd. case. Further the order of the learned Single Judge of this Court in Hoewitzer case, has also attained finality and therefore, the petitioner must be given the benefit in accordance with the said decision. In view of the fact that the respondents have arbitrarily and by total non application of mind has rejected the petitioner's request for revalidation of the subject DFIA licences, the impugned order has to be quashed and the writ petition has to be allowed - Petition allowed.
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2023 (2) TMI 901
Debonding of 100% EOU - Levy of interest on raw materials, lying in stock beyond the warehousing period - department was of the view that the duty paid on raw materials warehoused beyond the period of three years was liable to interest under Section 61 (2) (i) of Customs Act, 1962 at the rate of 15% per annum as per Notification No. 28/2002- Cus. (NT) dated 13.05.2002 - SCN is time barred or not. HELD THAT:- The SCN has been issued under Section 28 of the Customs Act,1962. It is clear from the above provision that the SCN has to be issued within a period of six months. The impugned raw materials were imported between 1995 and 2003. The SCN is dated 13.10.2008. The duty having been paid on the date of De-Bonding the relevant date to compute the demand would therefore be the date of debonding ie., 31.03.2007. The Ld. AR has submitted that as the appellant had filed a request for waiver, and also an undertaking; the date of rejection of the request for waiver has to be considered as the relevant date - The section does not speak of any extension of time based on a request for waiver. Further the request for waiver is filed as per the Board Circular. Circulars, though binding on the Department, is not so on the Tribunal. Thus, the SCN is time barred. The Tribunal in the case of Commissioner of Customs, Madras Vs Electronic Research Ltd. [[ 1999 (1) TMI 294 - CEGAT, MADRAS] ] held that in absence of any limitation period for demanding interest in respect of Customs duty payable in term of Section 61(3) of Customs Act, in the case of warehoused goods, the limitation period would be the period prescribed in Section 28 of the Act ibid. Appeal allowed.
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Insolvency & Bankruptcy
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2023 (2) TMI 900
Liability to pay IRP fees and expenses - Whether in the given facts of the present case, the IRP is entitled to claim fees and expenses incurred in the CIRP proceedings and, if so, whether it is incumbent upon the Operational Creditor/Respondent to bear such fees/expenses subject to their being reasonable? - HELD THAT:- It is an admitted fact that the CIRP commencement date was 24.02.2020. The IRP was appointed on 09.03.2020 on which date he had sought details from the Operational Creditor and suspended management to proceed with CIRP. IRP had issued a public announcement on 11.03.2020 in accordance with CIRP Regulation 6. It is also an admitted fact that no claims were filed by the Operational Creditor or any other creditor till the time of filing of Section 19 application. The date of filing Section 19 application before the Adjudicating Authority was 16.10.2020. It is also an admitted fact that IRP did not receive any fees/expenses at the time of filing of Section 60 application on 21.03.2022. The provisions as appearing in IBC and Regulations framed thereunder read with the Code of Conduct of IRP all indicate that although quantum of fees has not been fixed, the quantum of fees payable is context specific. Thus, what fee is reasonable is context specific but what is context specific is not amenable to a precise definition. However, the fee should be a reasonable reflection of the work necessarily and properly undertaken by IRP. Further the fees should not be inconsistent with the applicable regulations and should be charged in a transparent manner. Reasonability of the fees/expenses which has been allowed by the Adjudicating Authority in the present case - HELD THAT:- The IRP has claimed Rs.4,00,000/- only towards fixed fee for the period for which the CIRP had continued and this entire amount has been allowed by the Adjudicating Authority. It is an admitted fact that a substantial portion of this period was hit by the lockdown arising out of the Covid outbreak. Further, we cannot lose sight of the fact that the CIRP proceedings were stymied on account of the fact that the IRP could not lay hand on the information required to undertake various steps of CIRP like preparation of Information Memorandum, Expression of Interest etc. The IRP had also not succeeded in constituting the CoC and therefore no possibility to collate claims. It is, therefore, felt that the reasonability of the fees payable to the IRP may be determined keeping in mind that CIRP had not made much progress beyond its preliminary phase and there was no occasion to carry out any exceptional responsibility - As regards expenditure incurred on Legal expenses, Company Secretary and Out of pocket expenses which have been claimed by the IRP at the rate of Rs.50,000/- each and so allowed by the Adjudicating Authority, it needs to be rationalized by reducing it by one half. The basis of this rationalisation is that not much work complexity was involved as is borne out by the facts of the case and that it would suffice to restrict expenditure on the two aforementioned professional services and miscellaneous costs at the rate of Rs.25,000/- each. We therefore hold that payment of a consolidated amount of Rs.2,87,000/- plus GST to the IRP would suffice towards payment of fees/expenses. The quantum of fees/expenses payable to a consolidated amount modified to Rs.2,87,000/- plus GST instead of Rs.5,62,000/- - The same amount should be paid within one week from the date of uploading of this order - appeal disposed off.
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2023 (2) TMI 899
Validity of approval of Resolution Plan - rejecting the claim as financial debt. - HELD THAT:- The amount of Rs.50 Lakhs which was given by the Appellant for submitting Bid Bond Bank Guarantee was the share of the Appellant, a member of the consortium. - The Adjudicating Authority has rightly in its conclusion observed that the disbursement was not for time value of money and the ingredient of Section 5(8) of the I B Code has not been made out - there are no error in the order of the Adjudicating Authority holding the claim of the Appellant as not a financial debt. Submission of the counsel for the Appellant that the amount was given in trust since it was for specific purpose, hence, it should be kept out of the assets of the Corporate Debtor - HELD THAT:- It is relevant to notice that before the Adjudicating Authority no such pleading or argument was raised. However, in the appeal ground has been taken that amount of Rs.50 Lakhs was held in trust by the Corporate Debtor for the Appellant - The Explanation to Section 18 (1) clearly provides that assets shall not include assets owned by a third party in possession of the corporate debtor held under trust. First judgment relied by the Appellant is GANESH EXPORT IMPORT CO VERSUS MAHADEOLAL NATHMAL [ 1955 (1) TMI 17 - HIGH COURT OF CALCUTTA] where it was held that The party who put the Property in the hands of the company can claim it back in a winding up as his property, while the creditors cannot claim that it should be brought into the distribution. The next judgment relied by learned counsel for the Appellant is RESERVE BANK OF INDIA VERSUS BANK OF CREDIT COMMERCE INTERNATIONAL (OVERSEAS) LTD. [ 1992 (3) TMI 276 - HIGH COURT OF BOMBAY] where it was held that In an annual general meeting of RR. Ltd. on July 2, 1964, payment of dividend was approved. R.R. Ltd. had an overdraft with the Bank which exceeded the limit. The Bank refused to make funds available to RR. Ltd. for the purpose of implementation of resolution declaring dividends. The third judgment on which learned counsel for the Appellant placed reliance is CANBANK FINANCIAL SERVICES LTD. VERSUS CUSTODIAN [ 2004 (9) TMI 383 - SUPREME COURT] , where Hon ble Supreme Court held that We are concerned with a right of a party to possess the property over which it has a lawful title. In such a situation, Benami Transactions Act will have no application in allocation of shares as the same would not come within the purview of transaction relating to a transfer of property. Transfer of CANCIGO in favour of the Appellant was, thus, valid and legal as by reason of the transfer of possession of the CANCIGOs by respondent No. 2 in favour of the Appellant, a valid right has been created therein, the same could not have been attached in terms of section 3(3) of the said Act. There can be no dispute to the preposition that any amount given in trust to a Corporate Debtor cannot be treated as asset of the Corporate Debtor as per Section 18(1)(f) - There can be no quarrel to the law laid down by the Hon ble Calcutta High Court, Hon ble Bombay High Court and Hon ble Supreme Court as noticed above but question which needs to be answered is as to whether the amount which was given by the Appellant to the Corporate Debtor was an amount given in trust. The agreement entered between the parties on 24.10.2018, as noticed above clearly indicate that the amount was the share of the Appellant for submitting Bid Bond Bank Guarantee by the consortium, Appellant being one of the member of the consortium. The agreement dated 24.10.2018 which was basis of the claim of the Appellant in no manner indicate that the amount was given in trust to the Corporate Debtor. Amount was given by the Appellant as his share to submit Bid Bond Bank Guarantee. Thus, the submission of the learned counsel for the Appellant that the amount given by the Appellant was the amount given in trust to the Corporate Debtor is wholly unfounded and cannot be accepted. Thus, no ground has been urged which may warrant any interference by this Tribunal in the order approving the Resolution Plan - appeal dismissed.
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2023 (2) TMI 898
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - application has been filed by the Operational Creditor without serving mandatory notice of demand in terms of Section 8 of the Code - Whether after transfer of winding up proceeding as per the Companies (Transfer of Pending Proceedings) Rules, 2016 r/w amendments made in Section 434 of the Companies Act, 2013 as applicable to the I B Code by Act 26 of 2018, the winding up petition which has been filed on the ground of company unable to pay its debt for treating the application under Section 9 of the Code notice under Section 8 of the Code is mandatory and without service of notice under Section 8 proceedings so transferred cannot be treated as proceedings under Section 9? Application under Section 9 required to be filed and maintained or not - HELD THAT:- The manner in which the application under Section 9 is to be filed is provided in Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 which says that it has to be in form -5 accompanied with documents and records required therein and as specified in the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016. Section 9(3) further provides for the documents to be appended with the application. There is no dispute that a demand notice was served under Section 434(1)(a) of the Act, 1956 and despite receipt of demand notice and the expiry of statutory period, the Company Petition was filed under Section 433(e) of the Act, 1956 presumably on the ground that the Company is unable to pay its debt. The contention of Counsel for the Appellant that notice under Section 8 of the Code was also required to be served because of the first proviso to Rule 5 of the Rules, 2016 as per which the Operational Creditor was to submit all information, other than information forming part of the records transferred, required for admission of the petition under section 9 of the Code is not well founded because the language of this proviso does not contemplate issuance of a fresh notice under Section 8 albeit before filing of the application under Section 9. Looking from any angle, there is no requirement of issuance of a fresh notice under Section 8 of the Code as it cannot be read as a part of the submission of information as provided in first proviso to Rule 5 of the Rules, 2016. After the transfer of winding up proceedings as per Rules 2016 read with amendments made in Section 434 of the Act, 2013 as applicable to the Code by Act 26 of 2018, if the winding up petition has been filed on the ground that the Company is unable to pay its debt, for treating the application under Section 9 of the Code, notice under Section 8 of the Code is not necessary or mandatory and a petition under Section 9 shall be maintainable without service of notice under Section 8 of the Code. Correctness of the law laid down in the cases of Sabari Inn Pvt. Ltd. [ 2017 (12) TMI 834 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ], Mosmetro Story (FZE) [ 2017 (11) TMI 1945 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] and Shailendra Sharma [ 2021 (1) TMI 447 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] - HELD THAT:- The first decision is in the case of Sabari Inn Pvt. Ltd. came on 17.11.2017. In this case, the Appellant (Corporate Debtor) entered into a contract with the Respondent Contractor therein. Although, according to the Appellant therein, pursuant to the contract, entire amount was paid but the Respondent issued a legal notice dated 07.09.2013 calling upon the Appellant to pay the outstanding sum of Rs. 12,06,508/- and thereafter filed a company petition under Section 433 434 of the Act, 1956 before the High Court of Madras. After constitution of the Tribunal and Adjudicating Authority, the said case was transferred to the Adjudicating Authority, Chennai Bench and was renumbered. In the said case, the Appellant therein raised an issue that no notice under Section 8(1) of the Code was served prior to treating the application as filed under Section 9 of the Code. It was held that no notice was issued under Section 8(1) and as per Rule 5 other informations were also not placed on record. It was thus held that the application filed under Section 433 and 434 of the Act, 1956 cannot be treated to be an application under Section 9 of the Code and hence, the application was abated. The second decision in Mosmetro Story (FZE) was delivered on 28.11.2017. In this case, the Appellant was the Corporate Debtor who used to purchase chemicals from the Operational Creditor. The Appellant therein had alleged that the he had already made the payment and settled the account but the Operational Creditor issued a legal notice on 19.08.2015 and 09.09.2015 for the payment of the outstanding sum of Rs. 1,98,75,342/- and thereafter filed the petition under Section 433 434 of the Act, 1956 before the High Court of Madras - In this case also the Corporate Debtor had taken a plea that since no notice under Section 8 (1) of the Code was served prior to treating the application under Section 9 of the Code, therefore, the application was not maintainable. In this case same view was expressed as has been expressed in the case of Sabari Inn Pvt. Ltd. (Supra) holding that neither the notice was issued under Section 8(1) nor other informations were placed before the Adjudicating Authority, therefore, the Company Petition stood abated. The case of Shailendra Sharma was decided on 13.01.2021, in which same issue was raised that before the petition is treated as an application filed under Section 9 of the Code, mandatory notice under Section 8(1) of the Code, should have been served and reference has been made to the aforesaid two decisions. It is needless to mention that since we have already held, while deciding the first question, that service of the notice under Section 8(1) of the Code is not a mandatory requirement, therefore, the decisions rendered in aforesaid three cases are held to be not a good law and are thus accordingly over ruled. The second question is accordingly decided. There is no merit in the present appeal as well and the same is thus dismissed.
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Service Tax
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2023 (2) TMI 897
Levy of fine and penalty - Issuance of SCN under proviso to Section 73(1) of FA - service tax along with interest is paid before the issue of Show Cause Notice - intent to evade tax present or not - CBEC Circular F. No. 137/167/2006-CX dated 3.10.2007 - HELD THAT:- It has been held by courts that appellate bodies should be mindful of the first-hand knowledge of the original authority and the position that he holds to assess the facts and the credibility of circumstances from his own observations. Even if a superior appellate body feels that another view is possible, that is no ground for substitution of the original authorities view with one s own by exercising its appellate jurisdiction. The exception would be if the impugned order is demonstrably found as not being rational or reasonable or is suffering from procedural impropriety. Which is not the case here. In the circumstances, the show cause notice having been issued invoking the extended time limit under proviso to section 73 (1) of the Finance Act 1994 and the imposition of penalty cannot be said to be unwarranted. In the instant case where suppression of facts has been alleged in the Show Cause Notice, the appellant has not paid the reduced penalty as is required by law along with tax and interest, however the same facility has still been extended to them by the original authority in the impugned order. Further with regard to the judgements cited by the appellant against the imposition of penalty, it is felt that each case has to be seen from the facts and circumstances that prevail. In its decision in M/S ONWARD E-SERVICES LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI-II [ 2018 (5) TMI 323 - CESTAT MUMBAI] , the Tribunal noted that the assessee had correctly declared the value in the ST-3 returns filed by them and had not suppressed any facts unlike the present case were no ST-3 Returns were filed for the relevant period on time. In the case of COSMIC DYE CHEMICAL VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY [ 1994 (9) TMI 86 - SUPREME COURT] , the Hon ble Supreme Court noted that it was a case where the goods were thought to be exempt from duty, whereas in the instant matter the taxability of the service during the relevant period is not under challenge. The judgements cited are hence not relevant in the appellant s case. In the circumstances, undue sympathy to impose an adequate penalty would undermine the efficacy of law and encourage other tax payers to avoid paying taxes on time while waiting for if and until they have been found to have evaded duty by the department to pay their taxes - appeal dismissed.
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2023 (2) TMI 896
Levy of service tax - Banking and Other Financial Services or not - Foreclosure charges collected by the banks and non-banking financial companies on premature termination of loans - HELD THAT:- The Larger Bench in the case of COMMISSIONER OF SERVICE TAX, CHENNAI VERSUS M/S REPCO HOME FINANCE LTD. [ 2020 (7) TMI 472 - CESTAT CHENNAI] has considered the issue and held that such charges are not liable to service tax. The demand cannot sustain and requires to be set aside - Appeal allowed - decided in favor of appellant.
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2023 (2) TMI 895
Denial of CENVAT credit - credit availed and utilized on inputs and capital goods used for setting up of passive infrastructure for provision of Business Support Services [BSS] - whether towers are movable property or immovable property? - HELD THAT:- The issue involved in this appeal stands decided in favour of the appellant by the Delhi High Court in Vodafone Mobile Services Limited vs. CST, Delhi [ 2018 (11) TMI 713 - DELHI HIGH COURT ], which decision was affirmed by the Supreme Court in Commissioner of Service Tax Delhi vs. Vodafone Mobile Services Limited [ 2019 (7) TMI 1419 - SC ORDER ]. The permanency test was examined at length by the Supreme Court in Commissioner of Central Excise, Ahmedabad vs. Solid Correct Engineering Works [ 2010 (4) TMI 15 - SUPREME COURT ] . In this case the Supreme Court drew a distinction between machines which by their very nature are intended to be fixed permanently to the structures embedded in the earth and those machines which are fixed by nuts and bolts to a foundation not because the intention was to permanently attach it to the earth but because foundation was necessary to provide a wobble free operation to the machine. It would also be relevant to refer to the decision of the Supreme Court in SIRPUR PAPER MILLS LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, HYDERABAD [ 1997 (12) TMI 109 - SUPREME COURT ] wherein the Supreme Court observed that merely because a machine is attached to earth for more efficient working and operations it would not per se become immovable property. This issue was also examined at length by a Division Bench of the Tribunal in M/S. RELIANCE JIO INFOCOMM LTD. VERSUS ASSISTANT COMMISSIONER, CGST CENTRAL EXCISE, BELAPUR-IV DIVISION [ 2022 (4) TMI 1361 - CESTAT MUMBAI ] and it was held that towers and shelters would not be immovable property. Thus, in view of the factual position and the decisions referred, the towers and shelters would not be immovable property. CENVAT Credit on capital goods - HELD THAT:- The Delhi High Court in Vodafone Mobile Services [ 2018 (11) TMI 713 - DELHI HIGH COURT ] had also examined this issue and held that the Tribunal clearly erred in concluding that the towers and parts thereof and the prefabricated shelters are not capital goods with the meaning of Rule 2(a) of the Credit Rules - Thus also, the appellant was also entitled to take CENVAT credit since the items in dispute are capital goods . Appeal allowed.
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2023 (2) TMI 894
Recovery of Cenvat Credit wrongly taken - export of services - input services - Air Travel Agent Service (ATAS) - Business Auxillary Service (BAS) - short payment of Service Tax on Overriding Commission - short payment of service tax - period from October, 2007 to September, 2010 - HELD THAT:- During the period covered in these impugned notices, denial of Cenvat credit on input services such as Car hire charges, Insurance charges, Travel expenses and Staff welfare expenses is not legally maintainable in terms of Rule 2 (1) of CCR, 2004, as all these services are input services considering the sweep and depth of definition of input service as per Rule 2 (1) of CCR, 2004. It includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, activities relating to business etc. This being an inclusive definition of an input service , these expenses are having a connection with the provision of output services. Hon ble High Court of Judicature of Mumbai (Nagpur Bench) in the case of CCE, Nagpur Vs. Ultratech Cement Ltd. [ 2010 (10) TMI 13 - BOMBAY HIGH COURT ] , has held that for an input service the expression activities in relation to business in the definition of input service postulates activities which are integrally connected with the business of the assessee. If the activity is not integrally connected with the business of the manufacture of final product, the service would not qualify to be input service under Rule 2 (1) of the CCR, 2004. The definition of input service seeks to cover every conceivable service used in the business of manufacturing the final products. The categories of services enumerated after the expression such as in the definition of input service do not relate to any particular class or category of services, but refer to variety of services used in the business of manufacturing final products. Nothing in the definition of input service to suggest that the legislature intended to define the expression such as restrictively. The inclusive part of the definition of input service is only illustrative and not exhaustive. In the absence of any intention of the legislature to restrict the definition of input service to any particular class or category of services used in the business. Appeal allowed.
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Central Excise
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2023 (2) TMI 893
Inordinate delay in adjudication of SCN - Clandestine Removal - removal of electronic overhead crane without payment of duty - it is alleged that the growth shop wrongly availed the benefit of exemption notification no. 118/75-CE dated 30.04.1975 as the goods cleared were not parts of crane but a fully functional crane - period from June 1993 to November 1993 - HELD THAT:- The facts as borne out from the pleadings on record need no repetition. The impugned show cause is of 9th December 1993 (Annexure-5) issued upon the petitioner asking them to show cause as to why the appropriate excise duty amounting to Rs. 1,67,42,847.30 be not imposed upon him under the provisions of Rules 9(B), 52A, 173(B), 173(F) and 173(G) of Central Excise Rules, 1944 and Section 11A of the CEA, 1944 alleging less payment of duty due to misclassification. The respondents had kept the impugned show cause notice and ten other SCNs as indicated in the chart above in the call book on the ground that the matter was sub-judice. However, from the pleadings on record and also from the averments made in the counter affidavit, it appears that none of the conditions as enumerated in the CBIC circular / guidelines relied upon by the respondents and also by the petitioner stood satisfied for transferring the matter to the call book. Similar issue perused in Punjab and Haryana High Court in the case of M/S GPI TEXTILES LIMITED VERSUS UNION OF INDIA AND OTHERS [ 2018 (9) TMI 25 - PUNJAB HARYANA HIGH COURT ] where the show cause notices issued under Section 11 A of the Central Excise Act 1944 were kept pending for 16 years. The present case is a gross one as the impugned show cause notice are kept pending since 9th December 1993 for 29 years and even if some explanation on the part of the respondents relating to pendency of Civil Appeal No. 3793 of 2001 till 05.05.2004 is accepted, there is no justification for not proceeding upon the impugned show cause notice for 18 years thereafter till the impugned notice of personal hearing has been served upon the petitioner. Adjudication of such a show cause notice after 29 years would be contrary to the mandate of Section 11A(11) of the CEA 1944 and would lead to unreasonable and arbitrary results. Such proceedings therefore stands vitiated due to inordinate and unreasonable delay and are accordingly fit to be quashed. The impugned show-cause notice dated 9th December 1993 is quashed. The notices of personal hearing dated 30th November 2022 and 23rd December 2022 are also quashed. Petition allowed.
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2023 (2) TMI 892
Rejection of claim for interest on delayed refund under Section 11BB of the Central Excise Act, 1944 - HELD THAT:- The issue needs to be examined in the light of the decision of the Larger Bench of the Bombay High Court in the case of M/S. GAURI PLASTICULTURE P. LTD., BOMBAY DYEING MANUFACTURING CO. LTD., M/S. SIMPLEX MILLS CO. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, INDORE, THE COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV, THE UNION OF INDIA THROUGH THE COMMISSIONER OF CENTRAL EXCISE MUMBAI I [ 2019 (6) TMI 820 - BOMBAY HIGH COURT] . The Hon'ble High Court considered all the earlier judgments taking contrary views, also the orders passed by the Apex Court keeping the question of law open and referring to the provisions of Rule 5 and 11 of the Cenvat Credit Rules, 2004, negatived the contention of the assessee that cenvat credit can be refunded even in relation to those inputs which have not been used in the manufacture of the final product or the exported goods. The appellant herein being unsuccessful in claiming the refund of unutilised Cenvat Credit, approached the Honorable High Court of Rajasthan. The Learned Division Bench after referring to the judgments of various High Courts and also the orders passed by the Apex Court concluded that the Tribunal by the impugned order cannot distinguish the judgments of the High Courts and therefore answered the issue in favour of the assessee. Though the revenue challenged the said order before the Apex Court, however the same stood dismissed on account of low monetary limits. As a result, the application made by the appellant for refund was allowed. If the claim for refund itself was not maintainable in law, the question of grant of interest does not arise. The relief of refund was allowed in favour of the appellant in terms of the order of the High Court of Rajasthan, however the same was silent on the issue of interest as no relief was claimed in that regard by the appellant. Therefore, no relief of interest on delayed refund can be allowed to the appellant at this stage. The appellant is not entitle to interest on delayed refund, the issue of limitation as decided by the Adjudicating Authority is not required to be gone into - Appeal dismissed.
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2023 (2) TMI 891
Clandestine removal - Goods cleared without issuing invoices and CE duty was leviable on those goods - admission by the party itself - admissible evidences or not - extended period of limitation - penalties - HELD THAT:- From the records, it appears that investigations were carried out by the Department at the factory premises of the appellant where documents such as challans, registers etc. were recovered. On co-relating the goods cleared under various challans with the invoices, it was gathered that no invoices were issued in respect to the goods cleared under the said challans. It also did not show that they have been used for sending the material out of the factory for job work as they did not have any description of job worker or the nature of job work. Further, it was found that the appellant maintained two sets of outward registers, one with details of goods cleared under the invoices and the other under the cover of challans. Sh. Amit Rajput, Director of the unit in his voluntary statement under section 14 of the Central Excise Act, 1944 admitted that challans were cleared without issuing invoices and CE duty was leviable on those goods. In view of the specific admissions by Sh. Amit Rajput nothing further was required to be proved by the Department and also the recovery of challans during visit of factory clearly proves that goods so manufactured were clandestinely cleared from the factory under the guise of job work on which no Excise duty was paid. It is a settled principle of law that what is admitted by a party need not be proved. Extended period of limitation - HELD THAT:- Invoking the extended period of limitation as the appellant willfully and intentionally suppressed material facts of clandestinely manufacturing and clearing finished goods, without issuing proper invoices, without maintaining statutory records and without filing statutory returns so as to avoid the imposition of excise duty, the demand under the SCN is well within the time limit of five years under proviso to the then section 11A(1) now section 11A(4) of the CE Act, 1944. Penalties - HELD THAT:- On contravention of the provisions of the C E Act,1944 and the Rules made thereunder, the penalty under section 11AC is confirmed - Similarly, the personal penalty imposed upon Sh. Amit Rajput, Director of the unit under Rule 26(1) of the Central Excise Rules, 2002 needs to be upheld as he was responsible for the clandestine manufacture and removal of goods as is evident from the documents recovered during the search which stands corroborated with his statements. That without his knowledge and active participation the goods could not have been clandestinely manufactured cleared from the factory, since he being the director was responsible for the day to day affairs of his firm. He admitted the duty liability on the goods manufactured and cleared from his factory. Appeal dismissed.
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CST, VAT & Sales Tax
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2023 (2) TMI 890
Levy of penalty on applicant (Government Institution) under Section 8(D)(6) of the U.P. Trade Tax Act, 1948 - as per assessee, the authorities without recording any finding had imposed maximum amount of penalty on the revisionist who is not a dealer and is an educational institution - HELD THAT:- It is admitted to both the parties that the revisionist is an educational institution imparting education to the students. The university needs building not only for the students, but also for the teachers and other educational activities to be carried out within its campus. The budgets for carrying out such construction are provided by the State Government. The Act of 2008 is a fiscal act, intended to raise revenue for the State Government. The very purpose is met out, once the dealer to whom the payment has been made by the educational institution is subjected to assessment proceedings and tax liability is created and realized. Initiation of penalty proceedings under Section 8(D)(6) against a Government Institution has not helped the revenue, but such exercise has led to financial loss to the Government by unnecessary expenditure on litigation which, at any cost, should be avoided. Once, U.P. Rajkiya Nirman Nigam was assessed to tax and an assessment order was passed on 31.03.2010 and a tax liability was created towards the payment received by it from the university, the penalty proceedings initiated by the Taxing Authorities looses its sheen - Further, the revisionist had sufficiently explained in the reply furnished before the assessing authority that they were not well aware of the provisions of law which required for deduction under Section 8(D)(6). The reasons so furnished appear to be plausible, and in the absence of any malafide intention, penalty is not leviable. Revision allowed.
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2023 (2) TMI 889
Imposition of penalty under Section 40(2) of the JVAT Act - concealment of purchases for an amount of Rs.1,55,69,332/- made by the Petitioner despite the fact that the said amount was duly reflected in its revised return - suppression of facts or not - order was passed without granting sufficient opportunity to the Petitioner - violation of principles of natural justice (audi alterem partem) - HELD THAT:- Admittedly, for the quarter ending September, 2015, the last date for filing of revised return was up-to January, 2016. However, before assessment proceeding was initiated on 09.01.2016 i.e., before the expiry of period of revising of return in dispute which would be itself evident from the penalty order dated 02.02.2016 at Annexure-1. Further, the Petitioner, for the purchases in dispute has utilized Form SUGAM-G and, thus, no occasion arose for suppression of any turnover with intent to evade payment of tax. In the entire Counter Affidavit no mens-rea has been alleged by Respondent-authorities. Thus, it appears that the contention of the petitioner that at best penalty under Section 30(4)(d) of the JVAT Act could have been imposed upon petitioner is correct. This specific plea of Petitioner is uncontroverted by Respondent-authorities. There is no dispute with respect to the fact that before assessment proceeding under Section 40(2) of the JVAT Act and regular assessment proceeding under Section 35 of the JVAT Act are mutually exclusive to each other. However, acceptance of GTO and revised quarterly return in the original assessment proceeding could not be totally brushed aside when the sole issue revolves around revision of return by the Petitioner-company. Admittedly, the present dispute did not pertain to filing of incorrect return with intention to suppress or conceal purchases; rather the dispute pertains to filing of revised return belatedly. Thus, the imposition of penalty under Section 40(2) of the JVAT Act upon Petitioner is not sustainable in the eye of law and if the justification of the Respondents in this regard is accepted then the provision of Section 30 more particularly; sub-section 4 would be rendered otiose. In the given facts and circumstances and in view of specific provision enshrined u/s 30(4) (d) of the Act, it is apparent that there is no deliberate act of evasion of tax which would be warranting imposition of penalty on the petitioner given the language used in Section 40(2) containing the penal provision. In fact it cannot be said to be an act of deliberately filing incorrect returns as the revised return has been duly accepted by the Assessing Officer. Reference in this regard may be made the judgment passed in the case of COMMISSIONER OF SALES TAX, UP. VERSUS SANJIV FABRICS AND HARI OIL GENERAL MILLS [ 2010 (9) TMI 461 - SUPREME COURT ] wherein the Hon ble Apex Court has held that burden would be on the revenue to prove the existence of circumstances constituting the offence - mens rea is a condition precedent for levying penalty under Section 10(b) read with Section 10A of the Act. Thus, this court holds that the penalty imposed by the revenue u/s 40(2) of the JVAT Act is not sustainable in the facts and circumstances of this case rather; penalty under Section 30(4)(d) of the JVAT Act could have been imposed upon Petitioner - the amount of alleged penalty of Rs.17,35,000/- already realized from the bank accounts of Petitioner is to be refunded to the Petitioner after deducting Rs.25000/- taking resort of Section 30 (4) of the JVAT Act which prescribes maximum penalty of Rs.25000/-. Application allowed.
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2023 (2) TMI 888
Validity of impugned Auction Notice - properties are brought for auction for non payment of tax and penalty of petitioner - non-application of mind in issuance of SCN - Rejection of the Rectification Petitions filed by the petitioner under Section 84(1) of the Tamil Nadu Value Added Tax Act, 2006 - No reasons given for rejection of application - violation of principles of natural justice. HELD THAT:- As seen from Section 84 of the Tamil Nadu Value Added Tax Act, 2006, only in cases where there is an error apparent on the face of the record, the rectification of an assessment order can be entertained. The first respondent under the impugned order has categorically held that no case has been made out by the petitioner for rectification of the assessment orders. The proviso to Section 84 of the Tamil Nadu Value Added Tax Act, 2006 also makes it clear that only in cases where the authority decides to revise the assessment, there is a necessity for granting an opportunity of hearing to the dealer (the petitioner herein). In the case on hand, the authority, while deciding the petitions filed under Section 84(1) of the Tamil Nadu Value Added Tax Act, 2006, has not revised the earlier assessment orders passed by the respondents and therefore, has rightly not granted any opportunity of hearing to the petitioner. No specific request for personal hearing was also sought for by the petitioner. Admittedly, only after a lapse of almost five years from the date of the assessment orders, the petitioner has filed the Rectification Petitions in the year 2018 even without filing a Statutory Appeal as against the assessment orders dated 28.01.2013 and 15.10.2013 pertaining to the relevant assessment years 2007-08 to 2011-12. The first respondent has also observed that having not exercised the statutory appeal as directed by this Court in its order dated 18.06.2019 passed in W.P. No.6309 of 2017, the petitions filed under Section 84(1) of the Tamil Nadu Value Added Tax Act, 2006, by the petitioner seeking for rectification of the assessment orders cannot be entertained under any circumstances whatsoever. This Court does not find any infirmity in the said observation after seeing the conduct of the petitioner, the details of which are observed in the earlier paragraph of this order which will reveal that only to protract the inevitable, the Rectification Petitions have been filed - Petition dismissed.
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2023 (2) TMI 887
Stay of demand - Recovery of amount lying to the credit of the petitioner's bank account maintained with the second respondent bank and the said amount was debited from the petitioner's bank account - HELD THAT:- Admittedly, a statutory appeal has been filed as against the assessment order dated 20.01.2021 passed under section 27 of the TNVAT Act by the petitioner which is under consideration by the Appellate Deputy Commissioner of Commercial Taxes and the petitioner has also paid the pre-deposit amount as required for filing the statutory appeal. The petitioner has also filed a stay petition seeking stay of the impugned assessment order. While that be so, the first respondent has recovered a sum of Rs.28,49,000/- from the amount lying in the petitioner's bank account maintained with the second respondent bank. The said amount covers the tax liability as determined by the first respondent in the assessment orders which is the subject matter of the appeal before the Statutory appellate authority. This Court after giving due consideration to the fact that the statutory appeal has already been filed by the petitioner by making statutory pre- deposit amount and the first respondent has also recovered the sum of Rs.28,49,000/- from the petitioner's bank account lying with the second respondent after filing of the statutory appeal by the petitioner, is inclined to grant stay of any further recovery from the petitioner either from the amount lying to the credit of the second respondent bank or from any other source till the statutory appeal, pending on the file of the newly impleaded third respondent is disposed of on merits and in accordance with law. Petition disposed off.
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2023 (2) TMI 886
Jurisdiction - Grant of refund of the excess amount of tax paid by the appellant as determined by the Assessing Authority - whether the Commissioner had jurisdiction under Rule 36 of the Haryana General Sales Tax Rules read with Section 43 of the Haryana General Sales Tax Act to reject the refund and to go into the merits of the assessment framed by the Assessing Authority? HELD THAT:- The issue culled out hereinabove is no longer res integra. A Division Bench of this Court in RAGHBAR DASS HUKAM CHAND CO. JAI BHARAT GUM CHEMICAL LTD. SHIV SHAKTI RICE MILLS BHARAT INDUSTRIAL ENTERPRISES LTD. VERSUS STATE OF HARYANA AND OTHERS [ 2009 (5) TMI 869 - PUNJAB AND HARYANA HIGH COURT] had precisely dealt with the question of law i.e. whether the higher authorities in the hierarchy of Sales Tax Department, Haryana in the garb of exercising power of granting sanction under Rule 36 of Haryana General Sales Tax Rules to the refund orders passed by the Assessing Officer, could set aside such order of assessment? View taken was that irrespective of merits of the case the refund has to follow order of the Assessing Authority and in proceedings for determining refund, only question was of quantification of refund. The impugned order passed by the Haryana Tax Tribunal dated 01.07.2005 (Annexure A-7) cannot sustain. The appellant-company consequently would be entitled to the refund in the light of the assessment order dated 11.02.2003 (Annexure A-1) pertaining to the assessment year 1998-99. Appeal allowed.
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2023 (2) TMI 885
Seeking rectification of assessment order - Validity of Bank Attachment notice - petitioner has sought for rectification of the assessment order dated 01.02.2022 on the ground that the registration certificate has been misused and also on the ground that they have already closed down their business - HELD THAT:- The petitioner's bank Account maintained with the second respondent Bank has been attached pursuant to the Bank Attachment Notice dated 14.10.2022, issued by the first respondent to the second respondent, which is also the subject matter of challenge in this writ petition - No prejudice would be caused to the respondents if the petitioner's Applications dated 26.10.2022 and 05.12.2022, filed under Section 84 of the Act seeking for rectification of the assessment order is considered, on merits and in accordance with law within a time frame to be fixed by this Court. This Court directs the first respondent to pass final orders, on merits and in accordance with law on the petitioner's Applications dated 26.10.2022 and 05.12.2022 seeking for rectification of the assessment order dated 01.02.2022 within a period of eight weeks from the date of receipt of a copy of this order. Petition disposed off.
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Indian Laws
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2023 (2) TMI 884
Dishonour of cheques - 7 cheques dishonoured at different places - different jurisdiction of trial court as per the bounced cheque - case of petitioner is that as all the cheques relate to the same transaction, it would be proper and appropriate that the cases pertaining to their dishonour are tried and decided together - HELD THAT:- It is now well settled that the offence under Section 138 of the Act of 1881 is complete upon dishonour of the cheque but prosecution in relation to such offence is postponed, by virtue of the provisos therein, till the failure of the drawer of the cheque to make the payment within 15 days of receiving the demand notice. However, jurisdiction to try this offence remained a troublesome issue for a long time. It may be noted that this Court exercised power under Section 406 Cr.P.C. in relation to offences under Section 138 of the Act of 1881 even during the time the original Section 142 held the field. In A.E. Premanand Vs. Escorts Finance Ltd. Others, this Court took note of the fact that the offences therein, under Section 138 of the Act of 1881, had arisen out of one single transaction and found it appropriate and in the interest of justice that all such cases should be tried in one Court. In the case on hand, as the six complaint cases pertain to the same transaction, it would be advisable to have a common adjudication to obviate the possibility of contradictory findings being rendered in connection therewith by different Courts. As four of the six cases have been filed by the respondent company before the Dwarka Courts at New Delhi and only two such cases are pending before the Courts at Nagpur, Maharashtra, it would be convenient and in the interest of all concerned, including the parties and their witnesses, that the cases be transferred to the Dwarka Courts at New Delhi. The transfer petitions are allowed.
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