TMI Tax Updates - e-Newsletter
February 5, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
Highlights / Catch Notes
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GST:
Violation of principles of natural justice - opportunity of ‘personal hearing’ was not afforded to the petitioner - wrongful availment of input tax credit against bogus tax invoices - The High Court observed that, from a bare reading of the order passed by the Respondent No. 3 it is palpably clear that no opportunity of personal hearing was afforded by the Respondent No. 3 to the petitioner, which is a statutory obligation under Section 75(4) of the UPGST Act, 2017. - Accordingly, matter restored back.
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GST:
Detention of goods and Levy of penalty on the ground of under valuation - The High court quashed the impugned orders for wrongly penalizing the petitioner based on under-valuation of goods, a ground not supported for detention of goods as per relevant circulars and legal precedents. It emphasized that detentions for such reasons are beyond the authorities' power under the GST Act, directing any deposits made by the petitioner to be refunded.
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GST:
Levy of penalty - e-Way Bill had expired though the same was accompanied with goods - The High court quashed the impugned orders for penalizing the petitioner on grounds not mentioned in the show cause notice, violating principles of natural justice and the mandate that authorities cannot exceed the scope of the notice
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GST:
Exemption from payment of GST - The petitioner only gets centage charges towards the expenditure borne by the petitioner for project implementation. - The High court decided not to interfere with ongoing assessment proceedings regarding the petitioner's liability for GST. The petitioner, a government entity, argued its activities were exempt from GST, supported by specific notifications. The court directed the assessing authority to thoroughly review the petitioner's claims and documents to determine the exemption status. If found exempt, the show cause notice should be dropped.
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GST:
Principles of natural justice - petitioner submits that the order has not been signed and without signature there can be no order in the eyes of law - The High court quashed the impugned order for not being signed, either manually or digitally, as required by law. It directed the authority to issue a new order within four weeks, strictly adhering to legal requirements.
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GST:
Cancellation of certificate of registration of the petitioner - High Court held that, it is the cardinal principle that the show cause notice must contain the allegation on which the authority proposes to initiate an action/proceeding so as to enable the noticee to deal with such allegation effectively - In the case on hand, the authorities travelled beyond the show cause notice while passing the impugned order. - It directed the revocation of both the cancellation order and the show cause notice, allowing for the possibility of issuing a new show cause notice in compliance with legal standards.
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GST:
Cancellation of GST registration of the petitioner - The high court observed that, no mandatory order can be passed directing the authority to restore the GST registration of the petitioner as such order will be in contradiction to the provisions of Section 30 and the proviso to the said section. - The High court dismissed the petition. - The petitioner directed to file representation, before GST authorities, within two weeks from date, indicating the reasons as to why the returns could not be filed with documentary evidence to justify that the situation led to non-filing of returns.
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GST:
Exemption under Article 243G of the constitution or not - pure services - The Authority for advance ruling (AAR) established that the supply of certain manpower services to hostels and residential schools/colleges run by the Social Welfare Department is exempt from GST. This exemption applies because these services are directly related to functions entrusted to Panchayats or Municipalities under the Constitution, specifically catering to the welfare of weaker sections, including Scheduled Castes and Tribes. Conversely, manpower services like Data Entry Operators, Drivers, and other administrative staff provided to Zilla Panchayat, Taluk Panchayat, or Social Welfare Department do not qualify for this exemption and are subject to an 18% GST rate.
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GST:
Classification of goods - Exemption from GST / IGST - agricultural implement or not - tree pruners - The Authority for Advance Rulings (AAR), Karnataka, determined that tree pruners, classified under HSN Code 82016000, are agricultural implements manually operated and qualify for exemption under GST/IGST. This ruling follows the principle that tools used in agriculture, specifically for harvesting crops like areca, coconut, and pepper, which are operated manually, fall under the category of agricultural implements.
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GST:
Validity of assessment orders under GST - Transitional credit eligibility - Petitioner had obtained GST registrations in the names of its employees for the unlawful purpose of availing of ITC - Violation of principles of natural justice - The High Court held that, the principles of natural justice cannot be put into a straight jacket. - The said order was in inquiry proceedings pursuant to a charge memo and cannot be compared to assessment proceedings. It should be borne in mind that the obligation of establishing eligibility for ITC is cast on the assessee concerned and, therefore, it is the responsibility of the assessee to place all the material documents to establish the actual purchase and receipt of goods or services.
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Income Tax:
Reopening of assessment u/s 147 - excessive share premium - The High Court observed that, the reopening of an assessment requires a valid "reason to believe" based on new tangible material, not merely a change of opinion or directives from higher authorities. Additionally, share premium received on issuance of fresh shares is considered a capital receipt, not income, and thus not taxable under the Act for the assessment year in question.
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Income Tax:
Benefit u/s 11(1A) - Once the AO has accepted the plea that transfer took place in AY 2008-09 and assessed income under long term capital gains in the hands of Assessee, the ITAT correctly concluded that it cannot be said that the possession was not transferred in AY 2008-09. Once legal possession has been handed over by Assessee only in 2008-09 then it is presumed and accepted that the said capital asset was held by Assessee trust wholly for charitable purposes till the date of its sale. - High court dismissed the revenue appeal.
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Income Tax:
Reopening of assessment u/s 147 - Reopening based on audit objections - reasons to believe - High Court observed that, reopening an assessment beyond four years requires not only a reason to believe that income has escaped assessment but also a failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment. - Accordingly, High Court held that, the reasons for reopening were not in compliance with the proviso to Section 147 of the Act and, therefore, quashed the notice and order.
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Income Tax:
Benefit of the provisions of the DTVSV Act - The High court found that, it is true that the DTVSV Act is having the object of resolution of the disputed tax, however, the same cannot be made available to the assessees whose appeals are not pending on the specified date. If the application filed by the petitioner is ordered to be entertained, then the statutory provisions of the DTSVS Act would be rendered nugatory and appeal which was filed subsequently cannot being the case of the petitioner within the scope of provision of DTVSV Act. Petition dismissed.
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Income Tax:
Foreign Tax Credit u/s 90/90A - - The Tribunal found that while the DTAA does not prescribe a filing requirement for FTC, the Income Tax Rules (Rule 128) do mandate the filing of Form No. 67 within a specified time limit. It emphasized that the purpose of this requirement is to verify the eligibility, genuineness, and correctness of the FTC claim. - The ITAT concluded that the filing of the claim form along with certificates and statements is mandatory concerning the essence of the FTC claim but directory regarding the time limit. It held that belated compliance does not warrant rejection or denial of the claim.
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Income Tax:
Revision u/s 263 - as per CIT AO had wrongly allowed the assessee exemption of capital gains claimed u/s 54B - Tribunal found that neither any inquiry was made by the AO regarding fulfillment of the basic conditions for eligibility to claim exemption under section 54B of the Act nor any documents were placed by the assessee before the AO establishing the same - Accordingly, the assessee's claim for exemption u/s 54B was denied due to non-compliance with the conditions. - ITAT uphold the order u/s 263 directing the AO to reexamine the issue.
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Income Tax:
The tribunal allowed several of the assessee's appeals, directing adjustments in tax computations and granting deductions previously disallowed. It dismissed some grounds due to lack of pressing or based on judicial precedents favoring the assessee's positions. This decision illustrates principles related to the allocation of head office expenses, the treatment of brand building expenses, and the allowance of claims for additional depreciation, reinforcing the tribunal's role in interpreting and applying tax laws based on precedents and statutory provisions.
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Income Tax:
Revision u/s 263 by CIT - the ITAT upheld the impugned order, dismissing the appeal of the assessee. The Tribunal ruled that the CIT had exercised revisional jurisdiction after independently examining the records and applying their mind to the case. Additionally, they found that the reference made by the Assessing Officer to the TPO was invalid due to the expiration of the time limit, making it no reference in the eyes of the law.
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Income Tax:
Additions towards Undisclosed profit from contract work and transport income - The tribunal found that the assumptions made by Ld. AO are without any basis, on the contrary the basis adopted by the Ld. AO was itself conflicting at places when the percentage of profit was calculated on the basis of turnover in 26AS, but have presumed that the turnover shown in 26AS was not considered by the assessee in the returned income, Ld. AO also presumed that the deemed profit u/s 44AE was not included in the profit shown by the assessee in ITR was again on the basis of presumption without any concrete evidence. - Matter restored back for fresh consideration.
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Income Tax:
Appealable order before CIT(A) - scope of order passed on the basis of direction given u/s 263, revisionary proceedings - Therefore, for all purposes, the computation of income by the AO giving effect to the ld. CIT’s direction is an assessment order which is appealable. The order passed by the CIT(A), we hold, therefore, holding the assessment order to be not appealable is incorrect in law. Having held so, we deem it fit to restore the issue back to the AO to verify the facts of the case and thereafter pass an order in accordance with the directions of the CIT in his order passed u/s 263 - AT
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IBC:
Authorization of Applicant/ Liquidator to defend all of any of the suit, prosecution or other legal proceedings, civil or criminal in the nature of and on behalf of the Corporate Debtor initiated both prior and post the commencement of liquidation proceedings of the Corporate Debtor - The court finds that the Liquidator should have been allowed to pursue the Writ Petition based on the earlier approval.
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PMLA:
Money Laundering - proceeds of crime - attachments of the property - investigation for a period beyond three hundred and sixty five days not resulting in any proceedings - The High Court mandates the return of documents and properties seized from the petitioner, as no proceeding related to an offense under the Act involving the petitioner or the seized items was initiated within 365 days as required by Section 8(3)(a) of the Prevention of Money Laundering Act.
TMI Short Notes
Articles
Notifications
News
Case Laws:
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GST
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2024 (2) TMI 189
Levy of penalty u/s 129 of the WBGST Act, 2017 - e-way bill in question had expired its validity - period of 1st June, 2019 to 30th June, 2019 - violation of principles of natural justice or not - HELD THAT:- It is not in doubt that stricto sensu, the appellant cannot shirk from its responsibility of complying with the requirement in law to generate a fresh E-way bill, if for any reason the consignment had not been transported. However, viewing the factual scenario, which is not disputed, i.e., the appellant is the owner of the consignment and was using it in connection with its contractual obligations in Uttar Pradesh and then having a similar contract in West Bengal and no evidence has been placed on record that shows that the consignment was to be sold/used for any other purpose in respect of any other party, this Court is persuaded to interference. The appellant has been saddled with the tax amount of ₹54,00,000/-. The law also provides for imposition of penalty. Ordinarily, it is refrained from interfering, but because there was an E-way bill that was generated and in view of the discussions made hereinabove, it is inclined to vary the orders passed by the High Court. The ends of justice would be served if the penalty amount is reduced to 50% of the penalty imposed, i.e., ₹27,00,000/-. Therefore, ₹54,00,000/- being the tax imposed, is upheld and penalty would now be ₹27,00,000/-, totalling to ₹81,00,000/-, which shall be paid by the appellant. The said amount, subject to payment(s) already made, shall be deposited with the concerned Authority on or before 29th February, 2024. Upon the same being done, the transportation vehicle as also the consignment shall be released to their rightful owners expeditiously. At the same time, the appellant is cautioned to be vigilant in future. The appeal stands disposed of.
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2024 (2) TMI 188
Violation of principles of natural justice - opportunity of personal hearing was not afforded to the petitioner - wrongful availment of input tax credit against bogus tax invoices - HELD THAT:- From a bare reading of the order dated August 10, 2021 passed by the Respondent No. 3 it is palpably clear that no opportunity of personal hearing was afforded by the Respondent No. 3 to the petitioner, which is a statutory obligation under Section 75(4) of the UPGST Act, 2017. Furthermore, the Respondent No. 2, while dismissing the appeal failed to correct this glaring impropriety in its order dated September 26, 2022. These orders cannot be allowed to pass through the legislative barriers of natural justice, erected to safeguard individual rights and prevent abuse of power. Let there be a writ of certiorari issued against the order dated August 10, 2021 passed by the Respondent No. 3 and order dated September 26, 2022, passed by the Respondent No. 2. These orders are quashed and set aside. Consequential relief to follow. The Respondent No. 2 is directed to grant an opportunity of personal hearing to the petitioner and thereafter pass a reasoned order in accordance with the law within a period of two months from date. This writ petition is, accordingly, allowed.
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2024 (2) TMI 187
Detention of goods and Levy of penalty on the ground of under valuation - There is no dispute that the invoice, e-way bill and all other relevant documents were accompanied with the goods. Furthermore, there was no mismatch in the description of the goods with the documents. - HELD THAT:- The only ground for detention of the goods was that the valuation of the goods as per the invoice was not correct. This is not a valid ground for detaining the goods as the officer concerned was not competent to carry out such detention. In the event of under valuation, appropriate notice under Sections 73 or 74 of the Uttar Pradesh Goods and Service Tax Act, 2017 is required to be issued as per the procedure provided therein. If the Court holds such a detention to be valid, it would be open to the authorities to carry out detention on their whims and fancies. The detention of the goods in such a scenario is not envisaged under the Act and the officers have not been vested with such a power to detain the goods and thereafter impose penalty under Section 129 of the Act. Specific provisions have been provided for detection of under valuation and the GST officials have to adhere to the same. It is to be noted that only after issuance of notice under Sections 73 or 74 of the Act, if the goods are found under valued, penalty can be imposed. Accordingly, imposition of penalty under Section 129 of the Act on the speculation that the goods are under valued cannot be allowed - impugned orders dated December 20, 2020 and September 17, 2021 are quashed and set-aside - Petition allowed.
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2024 (2) TMI 186
Admission of appeal - petitioner contended that as the learned Proper Officer has passed the order under Section 73 of OGST Act on 06.06.2023, i.e., after the cut-off date, the appeal is not being admitted - HELD THAT:- The notification which was brought out on 02.11.2023 only permits appeal to be filed from orders passed by the proper officer on or before 31.03.2023, in case it was not instituted in time or within the time permitted for a delayed appeal, and in case where such delayed appeal preferred beyond the stipulated period in Section 107 (4) of the act has been rejected. The petitioner would not squarely fall under the notification. The division bench opined that the petitioner also can be allowed to comply with the conditions in Notification No. 53 of 2023-Central Tax dated 02.11.2023 upon which the order passed in appeal would stand set aside and a fresh consideration will be made by the first Appellate Authority. The matter requires consideration by the 1st Appellate Authority in accordance with law taking into account that the appeal has been filed before 31.01.2024 and the appeal filed under Annexure-2 admitted in terms of the notification no.53/2023-Central Tax dated 02.11.2023. Petition disposed off by way of remand.
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2024 (2) TMI 185
Penalty imposed with respect to the goods being transported without e-way bill under U.P. GST Act, 2017 read with Rules framed thereunder - HELD THAT:- Reliance placed on a decision of Division Bench of this Court in M/s Godrej and Boyce Manufacturing Co. Ltd vs State of U.P. and others [ 2018 (9) TMI 1261 - ALLAHABAD HIGH COURT] where it was held that Rule 138, as initially enacted and made effective from 29.6.2017 read with Government Notification dated 21.7.2017, prescribing procedure, came into force on 16.08.2017 by Commissioner's Circular dated 22.07.2017 read with Circulars dated 27.02.2017 and 09.08.2017, stood replaced by Rule 138 by Notification dated 31.01.2018 which came into force on 01.02.2018. So far as the matter is squarely covered by a decision of Division Bench of this Court in M/s Godrej and Boyce Manufacturing Co. Ltd, with which it is agreed, the present writ petition is allowed.
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2024 (2) TMI 184
Rejection of bids for settlement of a number of markets including a market named Balipara Weekly Market - petitioner s bid had not been accepted by the authorities as he did not submit his GST clearance certificate along with his bid - HELD THAT:- The notice inviting tender dated 27.06.2023 provides at Clause 6(IX) that GST clearance certificate would have to be annexed to the bid documents, if necessary - Section 22(1) of the Central Goods and Services Tax Act, 2017 provides that every supplier shall be liable to be registered under the GST Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees. In the present case, there is nothing to show that the petitioner s annual aggregate turnover in a financial year is above twenty lakh rupees. In fact, the petitioner s bid value for the settlement of the market is only Rs. 1,01,000/-. As such, it was not necessary for the petitioner to include the GST clearance certificate in his bid/quotation. The reason for disqualifying the petitioner s bid by the respondent authority is not sustainable. The petitioner s bid/tender would have to be considered by the respondent authorities for settlement of the market along with the other eligible candidates. As his bid is Rs.1,01,000/- compared to the bid of the successful tenderer, i.e., the respondent No. 4, who had submitted a bid amount of Rs. 65,200/-, the settlement of the market would have to be done by the State respondent, which should in public interest - Consequently, the selection of the respondent No. 4, vide letter dated 02.08.2023, as successful bidder is hereby set aside. This writ petition is accordingly disposed of.
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2024 (2) TMI 183
Levy of penalty u/s 129(3) of the Uttar Pradesh Goods and Service Tax Act, 2017 - part A of the e-way bill was dully filled and due to some technical difficulties part B of the e-way bill could not be generated - HELD THAT:- Upon consideration of the arguments made by counsel appearing on behalf the parties and upon perusal of the documents, it is clear that the department has been unable to indicate any intention of the petitioner to evade tax. Petitioner relied upon judgment of this Court in M/S Roli Enterprises Vs. State of U.P. and Others [ 2024 (1) TMI 813 - ALLAHABAD HIGH COURT ] wherein this Court had considered two judgements of the Allahabad High Court in VSL Alloys (India) Pvt. Ltd v. State of U.P. and another [ 2018 (5) TMI 455 - ALLAHABAD HIGH COURT ] and M/s Citykart Retail Private Limited through Authorized Representative vs. Commissioner Commercial Tax and Another [ 2022 (9) TMI 374 - ALLAHABAD HIGH COURT ] and held that non filling up of Part 'B' of the e- Way Bill by itself without any intention to evade tax would not lead to imposition of penalty under Section 129(3) of the UPGST Act. Thus, the judgement relied upon by the petitioner are directly on the point and, accordingly, there are no reason to defer from the same. In the present case also, the defect was of a technical nature only and without any intention to evade tax. Accordingly, the penalty imposed under Section 129(3) of the UPGST Act is unsustainable - petition allowed.
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2024 (2) TMI 182
Violation of principles of natural justice - discrepancy between the amount specified in the show cause notice and the amount specified in the impugned order - transitional credit eligibility - Petitioner had obtained GST registrations in the names of its employees for the unlawful purpose of availing of ITC - Whether the petitioner has made out a case warranting interference in exercise of discretionary jurisdiction? Discrepancy between the amount specified in the show cause notice and the amount specified in the impugned order - HELD THAT:- On examining the respective show cause notice in entirety, it appears that CGST liability has been indicated in course of setting out the basis of such show cause notice. For the purpose of these proceedings, it is neither necessary nor desirable to record conclusive findings. It is sufficient to record that it appears that there is some basis to say that a typographical error resulted in the respective show cause notices indicating the CGST liability as zero. Transitional credit eligibility - HELD THAT:- In order to sustain a claim for transitional ITC, the assessee concerned should establish entitlement to such tax credit. If the assessing officer is of the view that further documents should be submitted for such purpose, it does not call for interference in exercise of discretionary jurisdiction. Petitioner had obtained GST registrations in the names of its employees for the unlawful purpose of availing of ITC - HELD THAT:- The principles of natural justice cannot be put into a straight jacket. Learned counsel for the petitioner places reliance on the order issued in Thilagarathinam Match Works [ 2013 (11) TMI 535 - MADRAS HIGH COURT] . The said order was in inquiry proceedings pursuant to a charge memo and cannot be compared to assessment proceedings. It should be borne in mind that the obligation of establishing eligibility for ITC is cast on the assessee concerned and, therefore, it is the responsibility of the assessee to place all the material documents to establish the actual purchase and receipt of goods or services. If the facts and circumstances of the case are considered cumulatively, none of the grounds of challenge constitute grounds for exercising discretionary jurisdiction. All these writ petitions are dismissed by leaving it open to the petitioner to impugn the orders impugned herein by way of statutory appeals.
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2024 (2) TMI 181
Violation of principles of natural justice (audi alteram partem) - Detention of goods - levy of penalty - e-Way Bill had expired though the same was accompanied with goods - HELD THAT:- The issuance of a show cause notice represents a pivotal juncture in administrative proceedings, demarcating the boundaries within which any authority can exercise its powers. By adhering to the confines of the notice, authorities uphold principles of fairness, accountability, procedural regularity, and legal certainty essential for the legitimacy and effectiveness of governance systems. Any attempt to transcend these limits not only violates the rights of the individuals or entities involved but also undermines the rule of law and public trust in the institutions tasked with upholding it. Thus, this Court holds that, adhering to the show cause notice is not merely a procedural formality, but a mandatory requirement, beyond the scope of which, no action can be taken. Adherence to the show cause notice is a fundamental safeguard against arbitrary exercises of power, ensuring that authority remains tethered to the principles of justice and the rule of law. In RAMLALA VERSUS STATE OF U.P. AND 4 OTHERS. [ 2023 (11) TMI 1218 - ALLAHABAD HIGH COURT] , this Court, while placing reliance on The Board of High School and Intermediate Education, U.P. -v- Kumari Chitra Srivastava, [ 1969 (11) TMI 88 - SUPREME COURT] , held that the reason to not allow the authorities to go beyond the show cause notice is that a person must be given a chance to put up his case with regard to the said show cause notice. In the present case, it is evident that the authorities have travelled beyond reasons provided in the show cause notice and imposed penalty on the ground that was never provided to the petitioner in the show cause notice. The petitioner never had any opportunity to defend itself on the said ground, and therefore, the show cause notice is directly in teeth of the principles of natural justice, namely, the principle of audi alteram partem. The impugned orders in the instant case, cannot be allowed to stand. Accordingly, a writ of certiorari is issued against the impugned orders dated August 20, 2019 and July 24, 2018. These orders are hereby quashed and set aside - Petition allowed.
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2024 (2) TMI 180
Exemption from payment of GST - centage charges towards the expenditure borne by the petitioner for project implementation - whether the supply of goods and services received by the petitioner or supply made by them are exempted from payment of GST? - HELD THAT:- It is not in doubt that the petitioner is a Government Company registered under Section 8 of the Companies Act, 2013. Almost all the shares of the petitioner are held by the State Government. The question whether the supply of goods and services received by the petitioner or supply made by them are exempted from payment of GST is the question which needs to be decided by the assessing authority itself. The petitioner has been issued with show cause notice to which they have filed their reply and the petitioner had also availed one opportunity of hearing before the assessing authority. It is not deemed proper to interrupt the ongoing proceedings before the assessing authority. However, it is made clear that the assessing authority will examine each and every argument of the petitioner against the show cause notice and also examine the evidences/documents submitted by them, including the notifications, to come to a conclusion whether the petitioner is entitled for exemption from payment of GST or not. Once the assessing authority comes to its conclusion that the petitioner is exempted from payment of GST, the show cause notice should be dropped. The present writ petition stands finally disposed of.
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2024 (2) TMI 179
Input Tax Credit - failure to prove discharge burden under Section 155 of the CGST Act - violation of principles of natural justice - HELD THAT:- Considering the detailed discussion on the petitioner's supplies that if the petitioner had taken input tax credit may not support with cogent and technical evidence and he failed to discharge the burden under Section 155 of the CGST Act and considering the provision under Section 16(2)(C) of the CGST Act, input tax credit to the extent of Rs.1,24,618.60/- under CGST Act, there are no grounds to enter into the error of law, requiring this Court to interfere with the assessment order that deny the input tax credit. This writ petition is dismissed, however, it will be open to the petitioner to take recourse to any other remedy of appeal as provided under Section 107 of CGST/SGST Act within the said order and if the petitioner files the appeal, the appellate authority shall decide the issue on merits, without being influenced by any of the other issues made therein.
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2024 (2) TMI 178
Notice for intimating discrepancies in the return after scrutiny U/s. 61 of KGST Act 2017 - petitioner submitted a reply but the respondent has not considered the same - HELD THAT:- It is deemed just and appropriate to dispose of this petition directing the respondent to address the grievance of the petitioner and pass appropriate orders on the reply dated 15.12.2022 within a period of one [1] month from the date of receipt of a copy of this order. The petition stands disposed of.
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2024 (2) TMI 177
Refund of the excess payment of tax made by the petitioner - application of petitioner was rejected vide Ext.P1 order stating that it was not filed within the time limit prescribed u/s 54(1) of the said Act, i.e. two years from the relevant date as prescribed for the period - HELD THAT:- There are no ground to entertain such a writ petition, which has been filed seeking for a direction to consider order dated 17.12.2020 afresh by filing an application as late as on 9.3.2022. Petition dismissed.
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2024 (2) TMI 176
Requirement of further deposit of the tax assessed as a condition prescribed for entertaining the 2nd appeal by the tribunal - Section 112(8)(b) of the CGST/SGST Act, 2017 - HELD THAT:- The petitioner submits that the petitioner will deposit 20% of the remaining amount of tax in dispute within a period of two weeks subject to making deposit of 20% as mandated under Section 112(8) of the CGST Act, futher demand of the tax assessed shall be kept in abeyance till the disposal of this writ petition. In case, the petitioner fails to make deposit of 20% as directed above, the authority will be free to enforce the demand against the petitioner.
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2024 (2) TMI 175
Principles of natural justice - petitioner submits that the order has not been signed and without signature there can be no order in the eyes of law - impugned order has been passed on a ground which was not mentioned in the show cause notice - HELD THAT:- Following the judgements of the Co-ordinate Bench in M/S. SRI RAMA ENERGY SOLUTIONS VERSUS THE ASSISTANT COMMISSIONER (ST) , STATE OF ANDHRA PRADESH, THE UNION OF INDIA [ 2023 (11) TMI 1217 - ANDHRA PRADESH HIGH COURT] , the impugned order is quashed only on the ground that it has not been signed. The authority shall pass fresh orders preferably within the period of four (04) weeks from the date of receipt of a copy of this order, in accordance with law - writ petition stands allowed in part.
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2024 (2) TMI 174
Maintainability of petition - Appealable order or not - appellate tribunal has not yet been constituted - HELD THAT:- The order impugned is appellable under Section 112 of the West Bengal Goods and Services Tax Act, 2017 corresponding to the Central Goods and Services Tax Act, 2017 and the appeal lies to the Appellate Tribunal - It is not in dispute that the Appellate Tribunal has not yet been constituted. In view of the submission of Mr. Agarwal that the petitioner should be directed to approach the Appellate Tribunal once the same becomes functional, this Court is inclined to entertain this writ petition only for the limited purpose of granting protection to the petitioner in the interregnum otherwise the petitioner will be prejudiced. This Court is also of the considered view that a reasonable time should be allowed to the petitioner to approach the Appellate Tribunal after it becomes functional. This Court is, therefore, inclined to follow the time limit stipulated in paragraph 4.2 of the Circular dated 18th March, 2020 as such time limit appears to be reasonable within which the petitioner will be at liberty to file the appeal before the Appellate Tribunal. The period of filing the appeal by the petitioner will stand extended as indicated in Clause 4.2 of the Circular dated 18th March 2020 - Petition disposed off.
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2024 (2) TMI 173
Cancellation of certificate of registration of the petitioner - suppression of outward supply to evade tax in contravention of the provisions of CGST Act, 2017 and WBGST Act, 2017 - HELD THAT:- Section 29(2)(e) states that the proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit where registration has been obtained by means or fraud, wilful misstatement or suppression of facts. Such allegation does not appear to have been leveled against the petitioner in the show cause notice. That apart, the show cause notice alleges about violation of Rule 21(a) and 21(b) only whereas the provisions contained in Rule 21(e) was also invoked for cancelling the registration of the petitioner when the same was not the ground of show cause notice. It is the cardinal principle that the show cause notice must contain the allegation on which the authority proposes to initiate an action/proceeding so as to enable the noticee to deal with such allegation effectively - In the case on hand, the authorities travelled beyond the show cause notice while passing the impugned order. This court is of the considered view that the order of adjudicating authority dated July 14, 2023 (which was signed on 14th August, 2023) as well as the appellate order dated 19th September, 2023 calls for interference - Petition allowed.
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2024 (2) TMI 172
Refund of excess amount recovered by way of debiting the bank account of the petitioners - whether the petitioners would be liable to pay interest as demanded by the authorities vide the rectified order of demand? - HELD THAT:- Since it does not appear from the record that any decision has been communicated to the petitioners on their prayer for installment, this court is of the considered view that the appellate authority should be directed to consider as to whether the petitioners were entitled to ITC reversal by installments and decide the same by passing a reasoned order and thereafter decide as to whether the rectified demand dated 6th July, 2022 can be sustained by assigning reasons. This court is of the considered view that the appellate authority should be directed to decide the appeal on merits - the order of the appellate authority dated 21st June, 2023 is set aside - Petition disposed off.
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2024 (2) TMI 171
Cancellation of GST registration of the petitioner - returns for six months had not been filed - HELD THAT:- The law provides that failure to furnish returns will result in cancellation of registration under Section 29(2)(c). Section 30 of the Act allows revocation of the order of cancellation of registration, subject to the condition that the returns are filed and all payments are made along with interest and penalty, if any. However, the time limit prescribed for filing an application for revocation of registration is 30 days from the date of service of the cancellation order - no mandatory order can be passed directing the authority to restore the GST registration of the petitioner as such order will be in contradiction to the provisions of Section 30 and the proviso to the said section. The law does not empower the authorities to extend the period of limitation in filing the application for revocation or for filing of appeal beyond the period prescribed in the statute itself, i.e., further 30 days or one month, as the case may be. This court is of view that it would not be proper to pass a mandatory order of restoration of the GST registration. The order of the learned Co-ordinate Bench, relied upon by the petitioner, is not clear on the facts and as such it is not possible for the court to understand whether in the said case, there had been any delay in approaching the High Court. The writ petition is disposed of, with direction upon the petitioner to file a comprehensive representation to the Joint Commissioner, State Tax, Siliguri Charge, within two weeks from date, indicating the reasons as to why the returns could not be filed with documentary evidence to justify that the situation led to non-filing of returns. The authority shall consider the said representation, upon hearing the petitioner and pass necessary orders upon consideration of the provisions of law in question and the contentions of the petitioner.
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2024 (2) TMI 170
Exemption under Article 243G of the constitution or not - pure services provided to Zilla panchayat (social welfare department) and Taluk Panchayat - HELD THAT:- The applicant is providing manpower services like FDA, SDA, Typists, drivers Data Entry Operator, D Group etc to Zilla Panchayat/Taluk Panchayat/ Social welfare department/Backward Classes Welfare Department. But these manpower services are not provided by way of any activity 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. Hence provision of such manpower services is liable to tax at 18%. The applicant is also providing manpower services like cleaning staff, cook, assistant cook, teachers, staff nurse and watchman to hostels and residential schools/colleges run by Social welfare department is exempted as it satisfies both the conditions mentioned under entry no. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. These manpower services are provided to Social welfare department which is a department of State Government. These manpower services are provided to weaker sections including scheduled caste and scheduled tribe which are in relation to the function entrusted to a Panchayat under article 243G of the constitution which is covered by 27th entry of eleventh schedule which says 'Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes'.
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2024 (2) TMI 169
Classification of goods - Exemption from GST / IGST - agricultural implement or not - tree pruners covered by HSN Code 82016000 or not - goods relates to Agricultural implements manually operated or animal driven i.e. hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes, axes, bill hooks and similar hewing tools; secateurs and pruners of any kind ; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry other than Ghamella or not. HELD THAT:- It is an admitted fact that the said product is made, predominantly, out of raw material Aluminium and hence the probable classifications would be either based on the usage or based on the raw material i.e. articles of aluminium. Hon ble Supreme Court in the case of U.P. STATE AGRO INDUSTRIAL CORPORATION LTD VERSUS KISAN UPBHOKTA PARISHAD ORS [ 2007 (12) TMI 450 - SUPREME COURT] stated that 'in common parlance implements are usually regarded as tools used by human beings with their hands (and sometimes with their legs), or driven by animal power' - In the instant case, the goods in question Tree Pruners is an agricultural implement and hence in common parlance it can be regarded as a tool, which is used by both hands by human beings in agriculture specifically in relation to harvesting areca, coconut and pepper. Therefore, the product in question merits classification as an agricultural implement / tool used in agriculture under Tariff Heading 8201 6000. In the instant case the product in question i.e, tree pruner is a manually operated agricultural implement and hence qualify to be a tool of a kind used in agriculture. Furthermore, 'pruners of any kind' finds specific mention in the description of entry at Sl.no. 137 and therefore the aforesaid exemption is squarely applicable to the instant case.
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2024 (2) TMI 136
Cancellation of GST registration of the Petitioner with retrospective effect - SCN and the Impugned Order do not put the Petitioner to notice that the registration is liable to be cancelled retrospectively - HELD THAT:- In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant. It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, it is not considered apposite to examine this aspect but assuming that the respondent s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. The order of cancellation is modified to the extent that the same shall operate with effect from 03.02.2023 i.e., date when the GST registration was suspended by show cause notice dated 03.02.2023. Petitioner shall furnish all the requisite returns updated to the date of cancellation of registration. Petition disposed off.
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Income Tax
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2024 (2) TMI 168
Reopening of assessment - Reasons recorded for initiating proceedings u/s 148 - unexplained subscription to assessee's capital of assessee - as decided by HC [ 2017 (9) TMI 1589 - DELHI HIGH COURT] reasons to believe contained the names of the very same five companies which were initially disclosed by the Petitioner during the assessment proceedings. The number of shares subscribed to by the said companies is the same and the amount received has been disclosed by the Assessee. There is no new material which has been found or mentioned in the reasons to believe which were not contained in the information provided by the Assessee prior to the conclusion of assessment under Section 143 (3) - HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court. Hence, the Special Leave Petition is dismissed.
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2024 (2) TMI 167
Doctrine of mutuality - interest income on FDRs and mutual funds arises out of the funds invested with non-members - HELD THAT:- It is common ground that the issue arising for consideration is covered by the judgment of this court in Secunderabad Club [ 2023 (8) TMI 925 - SUPREME COURT] and therefore the appeals should be disposed of in terms of the judgment as held that interest income earned on fixed deposits made in the banks by the appellant Clubs has to be treated like any other income from other sources within the meaning of Section 2(24) of Income Tax Act, 1961. Revenue s appeal is covered by the low tax effect as indicated in Circular No. 17 of 2019 dated 08.08.2019 issued by Department of Revenue, Ministry of Finance. In view of the above, both these appeals are disposed of.
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2024 (2) TMI 166
Reopening of assessment u/s 147 - excessive share premium - HELD THAT:- The reasons recorded for reopening does not dispute that during the year assessee had issued 16730 shares of face value of Rs. 10/- at premium of Rs. 12842/- per share. The AO is only questioning the excessive share premium but not doubting the transaction itself whereby the share premium had been received. On this ground alone, the impugned notice and order on objections have to be quashed and set aside. The amendments incorporated in the definition of income u/s 2(24)(xvi) and Section 56(2)(viib) of the Act were amendments which were to apply only from 1st April, 2013, i.e., assessment year 2013-14. The amendment to Section 68 by incorporation of the first proviso also came into effect by virtue of the Finance Act, 2012 w.e.f. 1st April, 2019 and was to apply for the assessment year 2013-14 and onwards. Therefore, since the amendments were not applicable to the assessment year in question, i.e., 2009-10, there would be no basis for the AO to form a reason to believe that income had escaped assessment for the said assessment year. Moreover, if one considers the reasons recorded, the AO simply says how a company with no proven track record incorporated on 15th March 2007 command such a huge share premium. AO has not bothered to read the balance sheet or the valuation report. AO s reason to believe, therefore, is purely hypothetical and a matter of conjecture. That cannot be a tangible material for arriving at reason to believe escapement of income. Jurisdictional requirement of Section 147 of the Act also is not fulfilled and hence, the proposed reopening is without jurisdiction. As held in Shodiman Investments (P) Ltd. [ 2018 (4) TMI 1287 - BOMBAY HIGH COURT] there is clear breach to the settled position in the law that reopening notice has to be issued by the AO on his own satisfaction and not on borrowed satisfaction. Admittedly, notice has been issued in view of a communication received from his superior officer. It is rather obvious that the AO has not applied his mind and arrived at his own satisfaction but on borrowed satisfaction. Decided in favour of assessee.
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2024 (2) TMI 165
Benefit u/s 11(1A) - Whether property was not held under Assessee Trust wholly for the charitable/religious purposes? - ITAT allowed exemption - HELD THAT:- ITAT, in our view, rightly came to the conclusion that Assessee was entitled to claim the benefit. This was because admittedly, Assessee was the owner of the property and the sale deed was executed with Dilip Estates only on 20th April 2007. Even the Charity Commissioner has accorded his permission for the sale. Once the year of sale is taken to be AY 2008-09, then admittedly, the possession of said property is deemed to have been given in the said assessment year. Once the AO has accepted the plea that transfer took place in AY 2008-09 and assessed income under long term capital gains in the hands of Assessee, the ITAT correctly concluded that it cannot be said that the possession was not transferred in AY 2008-09. Once legal possession has been handed over by Assessee only in 2008-09 then it is presumed and accepted that the said capital asset was held by Assessee trust wholly for charitable purposes till the date of its sale. Decided against revenue.
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2024 (2) TMI 164
Reopening of assessment u/s 147 - issue of shares at excessive share premium - change of opinion - as per assessee this is a clear case of change of opinion because the issue of excessive share premium was the subject matter of consideration during the assessment proceedings - HELD THAT:- The subject matter of large share premium received during the year was under active consideration of the AO during the assessment proceedings. As held by Division Bench of this Court in Aroni Commercials [ 2014 (2) TMI 659 - BOMBAY HIGH COURT] once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. Therefore, there can be no doubt that the very issue of share premium was subject matter of consideration by the AO during the original assessment proceedings, which would mean that reopening of assessment is merely on the basis of change of opinion of the AO from that held earlier during the course of the assessment proceedings. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. Thus the reopening of the assessment for AY 2014-15 is not justified. In view of this finding of ours, we do not consider it necessary to go into the other issues on determination of fair market value, etc. Decided in favour of assessee.
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2024 (2) TMI 163
Reopening of assessment u/s 147 - Reopening based on audit objections - reasons to believe - HELD THAT:- We noted that during the course of the original assessment proceedings, two notices u/s 142(1) were issued calling upon Petitioner to furnish complete set of copy of the return of income, computation of income, audited P L Account, balance-sheet, tax audit report, Form 3CEB, details of professional/technical fees, commission on sales, etc. in the prescribed format, details of all statutory liability covered by Section 43(b) together with proof of payment and explanation as to how these were paid, details regarding finance cost, working of disallowance u/s 14A r.w.r. 8D, etc. Petitioner was also called upon to show cause as to why the disallowance u/s 14A of the Act, disallowance of penalty expenses and mismatch in Section 26AS be added to Petitioner s income. Petitioner admittedly gave detailed reply and an assessment order came to be passed. In the assessment order, there was a disallowance u/s 14A of the Act and the same was added to the total income of Petitioner under the normal provision as well as under Section 115JB. Therefore, as correctly submitted by assessee, the points raised in the reasons recorded for reopening were also the subject of consideration during the assessment proceedings. Admittedly, the reopening has been made based on audit objections. It is settled law as laid down in Indian Eastern Newspaper Society [ 1979 (8) TMI 1 - SUPREME COURT] that in every case, the Income Tax Officer must determine for himself what is the effect and consequence of the law mentioned in the audit note and whether in consequence of the law which has come to his notice, he can reasonably believe that income has escaped assessment. The basis of his belief must be the law of which he has now become aware. The opinion rendered by the audit party in regard to the law cannot, for the purpose of such belief, add to or colour the significance of such law. Therefore, the true evaluation of the law in its bearing on the assessment must be made directly and solely by the Income Tax Officer. Therefore, AO cannot reopen the assessment relying on audit objections. One thing is quite clear that in the affidavit also, it is admitted primary details were filed by assessee. Therefore, the reopening of assessment is not permissible in view of the proviso to Section 147 of the Act. As held in Calcutta Discount Company Limited [ 1960 (11) TMI 8 - SUPREME COURT] the duty of an assessee does not extend beyond the full and truthful disclosure of all primary facts. The Court held that while the duty of assessee is to disclose fully and truly all primary relevant facts, it does not extend beyond that. A Division Bench of this Court in Aroni Commercials Limited [ 2014 (2) TMI 659 - BOMBAY HIGH COURT] has held that once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. Thus reopening proceddings set aside - Decided in favour of assessee.
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2024 (2) TMI 162
Reopening of assessment u/s 147 - reason to believe - reassessment the strength of cogent material and evidence discovered during a survey proceeding against a third party [M/s Bait-Al-Tamurat, Mumbai] - HELD THAT:- A bonafide satisfaction reached as to escapement of income made suffice the test of valid assumption of jurisdiction. Seen in that light, specific allegation was made against the petitioner of having made cash purchases in excess of Rs. 20,000/-. The reply that was furnished by the petitioner does not establish that either the purchases made by the petitioner from third party during the financial year 2015-16 valued were paid through banking channel or that no purchases were made by the petitioner from such seller. What may have been the total quantum of purchases made by the petitioner from third party and what part of it may have been accounted against the payment made through banking channel may remain to be verified at the stage of reassessment. For the purposes of assumption of jurisdiction, all that is required to be seen is, if the satisfaction is bonafide. To that end, there is no dispute that the authority had conducted a survey against third party. In that information was revealed that cash purchases made by the petitioner were valued - In absence of any objection as to existence of such information and there being no material available to reach further satisfaction that such payments were made through banking channel, all other pleas being raised by learned counsel for the petitioner may remain to be examined, on merits, in the face of reassessment proceedings that are still pending.
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2024 (2) TMI 161
Benefit of the provisions of the DTVSV Act - as order of the Tribunal was not served upon the petitioner, the appeal before the Tribunal is to be treated as pending - It is the case of the petitioner that although the Tribunal heard and decided the appeal on 4th June 2019, the order was not made available for a long time and therefore, the petitioner could not prefer an appeal before the High Court - as submitted that in absence of the order served upon the petitioner, the petitioner was justified to state in the Form 1 and 2 that the appeals before the Tribunal were pending on 21st December 2020 when the petitioner filed Form 1 and 2 under the DTVSV Act - HELD THAT:- The petitioner, filed Form 1 and 2 on 22nd December 2020 to get the benefit of the DTVSV Act, however, on the date on which the petitioner filed the Form 1 and 2 as per the provisions of Section 4 of the DTVSV Act read with Section 9 of the DTVSV Rules, no appeal either before the Tribunal or before the High Court was pending. The stand taken by the learned advocate for the petitioner that only because the order of the Tribunal was not served upon the petitioner, the appeal before the Tribunal is to be treated as pending and the petitioner is entitled to get the benefit of the provisions of the DTVSV Act, is not acceptable for the only reason that the petitioner was aware about the disposal of the appeal by the Tribunal on 4th June 2019. Even if reliance placed on behalf of the respondent with regard to service of the order of the Tribunal may not be believed, the fact remains that the petitioner was aware about the order dated 7th May 2019 passed by the Full Bench of the Tribunal and the order dated 4th June 2019 passed by the Division Bench of the Tribunal. In such circumstances, merely because the petitioner received certified copy of the order from the Tribunal on 22nd December 2020, the petitioner cannot contend that the appeal was pending before the Tribunal on the date of filing of the application in Form No.1 and 2 under the provisions of the DTVSV Act. It is true that the DTVSV Act is having the object of resolution of the disputed tax, however, the same cannot be made available to the assessees whose appeals are not pending on the specified date. If the application filed by the petitioner is ordered to be entertained, then the statutory provisions of the DTSVS Act would be rendered nugatory and appeal which was filed subsequently cannot being the case of the petitioner within the scope of provision of DTVSV Act. Petition dismissed.
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2024 (2) TMI 160
Validity of Reopening of assessment - non-supply of the relevant documents - denial of natural justice - HELD THAT:- From a perusal of the order passed u/s 148A (d) and subsequent notice issued u/s 148, it is quite vivid that all the relevant documents upon which the Assessing Officer relied on for reopening of the proceedings were supplied to the petitioner but the letter dated 19.10.2023 reflects that due to large file only some part of attachments of the notice was sent through ITBM software and some documents through postal service on 18.02.2023. Further, in response dated 02.03.2023, the petitioner has specifically stated that the relevant documents have not been supplied and further in the last para, the petitioner has categorically stated that cheque book and statement of Shri Deepak Nanjyani have not been supplied. Taking into consideration the flaws in the enquiry and non-supply of the relevant documents, this Court is of the opinion that the principle of natural justice has not been complied with in its full rigor and also the provisions of Section 148A have not been followed by the revenue, therefore, the order passed by the AO u/s 148 A (d) and notice issued u/s 148 are hereby set aside. Decided in favour of asessee.
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2024 (2) TMI 159
Foreign Tax Credit u/s 90/90A - assessee filed his return of income belatedly u/s 139(4) - solitary reason of not filing FTC claim Form No 67 accompanying certificates, statements etc., within the time limit of filing ITR prescribed u/s 139(1) of the Act as specified u/r 128(9) - whether belated compliance for FTC made after the expiry of time limit prescribed for filing ITR u/s 139(1) of the Act is allowable? - HELD THAT:- A careful reading conjunct consideration of provisions of section 90/90A of the Act and provisions of DTAA, prima-facie it appears us that, the provisions of DTAA in general does not prevail over the provisions of Act and rules made thereunder. Section 90/90A of the Act does also not provide so. However, wherever the DTAA has provided the taxation of a particular category of income at certain rates, then charging of that income at different rates as per the Act, may come in conflict with the DTAA and hence, the taxes over that category of income will be levied at that the rates, so provided in the DTAA. But where no such rates on an income or a category of income on the status of an assessee has been prescribed in the DTAA, then there cannot be any conflict with the Act. Where there is no specific provision in the agreement, it is basic law, i.e., the Income-tax Act/Rules, that will govern the taxation of income. Therefore, in absence of any specific compliance provided in INDO-USA DTAA, in view of the ratio laid down in CIT Vs Hindusthan Paper Corpn. Ltd. [ 1994 (2) TMI 312 - CALCUTTA HIGH COURT] the general provisions of the Act or the IT Rules will govern matter of taxation/assessment. The very purpose and object of insertion of rule 128 to statute is to allow FTC and it is so subscribed by s/r (1) therefore, mandate of s/r (9) is sub-servient to s/r (1). As the river cannot rise higher to its source hence s/r (9) it is to be read harmoniously so as not to defeat the purpose of s/r (1) enabling FTC to resident assessee to in terms of article 25 of DTAA. It is apt to mention here that the very insertion of rule 128 is stemmed out of provision of section 295(1)(ha) of the Act which empowered the board to prescribe procedure for granting of relief or deduction of any income-tax paid in any foreign country outside India u/s 90/90A or 91, against the income-tax payable under the Act; This ispo-fact clarifies amply that, the compliance envisaged under s/r (9) is procedural in nature. Therefore, we are afraid as this could not rescue the Revenue s concern as their Hon ble Lordships in PCIT Vs WIPRO Ltd [ 2022 (7) TMI 560 - SUPREME COURT] have dealt with mandate of provisions of the Act which circumscribed with non-obstante clause, dissimilar with the present case relating to procedural rule brought in by CBDT to give effect to the provision DTAA. Prime object of prescribing filing of requisite form, certificate statement on record is to verify and vouch genuineness correctness of the FTC claimed by resident assessee. It would not only be difficult but impossible for the Revenue to honour each and any FTC claim without first verifying the eligibility of the claimant, genuineness correctness of claim. Undisputedly, a belated compliance would be indifferent to eligibility, genuineness correctness, hence cannot be subjected to rejection or denial. In our considered view filing of claim form alongwith certificates/statement etc., is mandatory as it relates to essence of FTC claim to be allowed as matter of substance, however directory with respective to time limit within which it is to be made as it is merely matter of convenience rather than substance, as the matter of fact rule 128 of IT Rules prescribed no consequences for delayed compliance or non-compliance. This view we find fortified by the judgement in Hyundai Motors India Ltd. Vs UOI [ 2015 (1) TMI 23 - MADRAS HIGH COURT] wherein their Hon ble lordships have also dealt with nature of time limit prescribed whether mandatory or directory co-relating with prescription of consequences for non-compliance. It is held that, the rule setting a time clock prescribing no consequences for non-compliance within such time limit, then such rule for the limited purpose of time clock has to be seen as directory in nature. Placing reliance thereon, we agree with the decision of Brinda Rama Krishna [ 2022 (2) TMI 752 - ITAT BANGALORE] wherein it is adjudicated that, the s/r (9) does not provide for disallowance of FTC in case of delay in filing as same is not mandatory but a directory requirement, therefore non-furnishing the same before the due date u/s 139(1) of the Act is not fatal. Thus, we hold that belated filing of form no 67, certificate statement as envisaged under s/r (8) any-time before it is actually processed or before the final assessment is actually made is sufficient compliance of s/r (9) of IT Rules, thus entitled to FTC. Assessee appeal allowed.
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2024 (2) TMI 158
Addition u/s 68 - income from undisclosed sources - sale of shares as unexplained - HELD THAT:- Co-ordinate Bench of the Tribunal in the case of Lalita Bajaj and Namita Bajaj [ 2023 (10) TMI 557 - ITAT DELHI] assessee has not received any share application money or premium from the investor but the impugned transaction in the present case pertains to sale of investment/shares by the assessee to the other entities and such transaction cannot be alleged as unexplained or bogus particularly when the Department has not disputed the investment in shares by the assessee during the earlier period of time i.e. in the A.Y. 2008-09 in the year of investment by the assessee. Decided in favour of assessee.
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2024 (2) TMI 157
Revision u/s 263 - as per CIT AO had wrongly allowed the assessee exemption of capital gains claimed u/s 54B - CIT noted from the records that immovable property sold by the assessee was non-agriculture land, and therefore, the capital gains earned thereon were not eligible for exemption under section 54B - assessee contended that the conditions to be fulfilled as per the section 54B of the Act was not with regard to the nature of the land, but with respect to its user i.e. whether it was used for agriculture purpose for two years immediately preceding the date on which the transfer took place. HELD THAT:- As assessee was asked at bar whether this fact noted by the ld.Pr.CIT was correct , that neither any inquiry was made by the AO regarding fulfillment of the basic conditions for eligibility to claim exemption under section 54B of the Act nor any documents were placed by the assessee before the AO establishing the same. To this, the ld.counsel for the assessee categorically affirmed the fact and stated that neither any inquiry was conducted by the AO regarding user of land for agricultural purposes two years preceding the date of sale nor any documents filed by the assessee to the AO demonstrating the same. In the light of the same, we find no infirmity in the order of the CIT, finding the AO to have erroneously allowed the assessee s claim of exemption under section 54B of the Act, without even conducting basic inquiry regarding fulfillment of conditions prescribed by the section for being eligible to exemption under the said section. Appeal of the assessee is dismissed.
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2024 (2) TMI 156
Deduction u/s 80IB - allocation of advertisement expenses - HELD THAT:- We find that identical issue has been considered by the coordinate Bench in the appeal of the assessee for A.Y. 2006-07 [ 2023 (12) TMI 969 - ITAT MUMBAI] , wherein the coordinate Bench has considered and allowed this ground as held the allocation in respect of Head Office corporate expenses and advertisement expenses made by the assessee are required to be accepted. The Assessing Officer is directed to accept the allocation of the expenses as per the allocation of the expenses by the assessee. The Assessing Officer need not make any further allocation in this regard for computation of deduction u/s. 80IB. Nature of expenses - treatment of advertisement expenses in the nature of brand building expenses and consequently, considered the same capital expenditure - HELD THAT:- As in the appeal of the assessee for A.Y. 2006-07 [ 2023 (12) TMI 969 - ITAT MUMBAI] such advertisement expenditure are revenue expenditure and not capital expenditure, allowed the claim of the assessee. Accordingly, respectfully following the decision of the co-ordinate Bench, we also hold that amount of ₹853.85 lacs of advertisement expenditure is revenue expenditure. The learned Assessing Officer is directed for deletion/ disallowance after taking into consideration if any depreciation is allowed on that, accordingly, ground no.2 of the appeal is allowed. Allocation of sales commission expenditure while computing eligible income for deduction u/s 80IB - The commission allocated to Section 80IB unit, has been upheld by the learned CIT (A). However, if that amounts to double disallowance, it requires to be deleted. In view of this, we restore the ground of the appeal to the file of the AO to verify the claim of double disallowance. Non-granting of credit on dividend income received from foreign company - CIT (A) has directed AO to verify the provisions of law and also the Double Taxation Avoidance Agreement between India and Malaysia and if the credit claim is allowable to the assessee, same may be considered - HELD THAT:- We do not find any infirmity in the order of the learned CIT (A) in giving the above direction. Accordingly, we restore this ground back to the file of the learned Assessing Officer and direct him to verify the claim of the credit along with quantification of the above sum in accordance with the provisions of Double Taxation Avoidance Agreement between India and Malaysia. Accordingly, ground of the appeal are allowed with above direction. Incorrect computation u/s 145A - claim of the assessee is that it is following exclusive method of accounting for Cenvat credit in the books of account and hence opening inventory, purchases and closing inventory are recorded net of cenvat credit - HELD THAT:- We find that the additional ground is arising out of the facts available on record, no fresh facts are required to be investigated and it is merely a correction of the correct treatment to be given under section 145A of the act. Therefore, we restore this ground of appeal back to the file of the learned assessing officer to examine computation in accordance with the provisions of section 145A. If the claim of the assessee is found to be correct, the necessary adjustment/allowance may be granted. If, it is not available in accordance with the law, the assessee may be granted opportunity of hearing before deciding the issue. Additional depreciation on eligible assets - asset put to use for less than 180 days - additional depreciation has been claimed on the eligible assets installed and put by the assessee during the previous year 2006 07 additional depreciation is allowed to the extent of 10 % as those assets are put to use for less than 180 days in that previous year - HELD THAT:- We find that the assessee is eligible for additional depreciation under section 32 (1) (iia) on the assets purchased and put to use for less than 180 days in the previous year, however as assets are used for less than 180 days only 10 % of additional depreciation is allowed. The balance 10% of the additional depreciation is allowable to the assessee in the next year - no infirmity in the claim of the assessee. The claim of the assessee is also supported by several judicial precedents. Accordingly additional ground number 3 of the appeal is allowed and AO is directed to grant the additional depreciation to the assessee at the rate of 10% on the assets purchased in earlier financial year which was put to use for less than 180 days in that year. Accordingly additional ground number 3 of the appeal is allowed. Accrual of income - exclusion of the amount of retention money included in sales since the same is not accrued during the year, in computing the total income under the normal provisions of the act - HELD THAT:- The identical issue arose in case of the assessee for assessment year 2006 07 [ 2023 (12) TMI 969 - ITAT MUMBAI] wherein this ground is decided in favour of the assessee. Therefore we also direct the learned assessing officer, respectfully following the decision of the coordinate bench in assessee's own case for the earlier year, to examine the sum of retention money offered for taxation in the sale for this year and if the claim is found to be correct, to reduce the same from the income for this year and to include the same as income in the year in which the retention price reaches finality. Accordingly ground raised additional ground of appeal is allowed. Nature of expenses - payment made to clubs - AO held that the entrance fee paid to clubs is a capital expenditure not allowable as business expenditure and disallowed the aggregate sum - CIT A deleted the addition - HELD THAT:- We find that the assessee has paid the club membership expenditure for the employees of the assessee. Therefore now the issue is squarely covered by the decision of the honourable Supreme Court in case of CIT versus United Glass manufacturing Co Ltd [ 2012 (9) TMI 914 - SUPREME COURT] and therefore no infirmity can be found in the deletion of the disallowance made by the learned CIT A. Disallowance u/s 14A r.w.r.8D - CIT- A held that the rule 8D does not apply to the impugned assessment year and therefore directed the learned assessing officer to make disallowance on reasonable basis - HELD THAT:- No infirmity in the direction of CIT A that rule 8D cannot apply to the impugned assessment year and the assessing officer has to make disallowance on reasonable basis. Identical issue arose in case of the assessee for assessment year 2006 07 wherein the coordinate bench has also upheld such direction of the learned CIT A. There is no change in the facts and circumstances of the case and therefore respectfully following the decision of the coordinate bench in assessee's own case for assessment year 2006 07 we find no infirmity in the direction of the learned CIT A. Accordingly ground of revenue dismissed. Deduction u/s 80 IB - allocation of 50% of the head office expenses and then to allocate the same in the ratio of total turnover to the turnover of the eligible units confirmed. Allocation of travelling expenses while computing the profits eligible for deduction u/s 80 IB - Allocation of travelling expenses made by the assessee of the head office which were allocated to the eligible unit in the ratio of turnover of those units to the total turnover of the company. Allocation of 50% of the head office expenses as against hundred percent allocated by the AO to the eligible units for which deduction is claimed under section 80 IC - CIT- A has given similar reasoning. DR could not show us any reason to deviate for computing the profits of eligible unit either under section 80 IB or under section 80 IC of the act. Therefore, the similar reasons given by us while accepting the order of the learned CIT- A on identical computation mechanism under section 80 IB of the act, we also confirm the order of the learned CIT-A for computation mechanism under section 80 IC of the act. Accordingly, ground of the appeal of the learned assessing officer are dismissed.
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2024 (2) TMI 155
Revision u/s 263 by CIT - as per CIT AO failed to make reference to the TPO - as argued CIT has exercised powers u/s. 263 merely on proposal forwarded by the AO without himself examining the records and proper application of mind - HELD THAT:- There is nothing wrong, if, the AO initiates a proposal for invoking revisional jurisdiction u/s. 263 of the Act and thereafter, the CIT examine the record and after considering the same comes to the conclusion that the order passed by the AO is erroneous and prejudicial to the interest of Revenue. The conditions of sub-section(1) to Section 263 of the Act are satisfied if the CIT independently examines the record, apply his mind dehors the fact that the proposal was made by the Assessing Officer. In the instant case, we find that while issuing notice u/s. 263 CIT categorically records It is observed on examination of records . Thereafter, in the impugned order the CIT records similar observation. On further perusal of the impugned order it is palpable that the CIT has applied his mind and formed an opinion on the failures of the Assessing Officer in not referring the matter to the TPO. We find no force in the submissions of assessee that the CIT has adorned revisional powers merely on proposal forwarded by the AO. Hence, the first argument of the assessee assailing the impugned order is rejected. Non reference to the TPO - as argued AO had made a reference to the TPO, but the reference was returned by the TPO stating it to be time barred - A close examination of sequence of events tabulated above would show that the Assessing Officer had received the approval from the office of CIT on 09/03/2021 i.e. well before the last date for passing of the TP order i.e. 31/07/2021. AO went in slumber and held on to himself the approval from CIT for more than six months. In proceedings under the Act, time is the essence. Thereafter, on 20/09/2021 made reference to TPO, by that time the period to pass the order by the TPO u/s. 92CA(3) of the Act had already elapsed. As is evident from Office Memo the last date for passing the order for TPO was 31/07/2021. The reference made by Assessing Officer to the TPO was clearly time barred and invalid. Such reference is no reference in the eye of law. AO completed the assessment giving a go bye to the mandatory provisions of section 92CA and CBDT Instruction No.3 of 2016. Such an assessment order definitely falls within the meaning of erroneous and prejudicial to the interest of Revenue as envisaged u/s. 263 - assessee has pointed that in ITBA portal the last date for completion of assessment was mentioned as 30/09/2022, therefore, the AO has reason to believe that he has still time to make reference. We find no force in the submission of assessee. The limitation for completion of assessment is to be determined strictly in accordance with the provisions of the Act and not dates mentioned in ITBA portal. Department had issued Office Memo clarifying the doubts over issue of limitation for Transfer Pricing proceedings for AY 2018-19. It is a settled legal position that Board Circulars, Notifications and OMs are binding on the Assessing Officer. We find no infirmity in the action of CIT in invoking revisional jurisdiction - Decided against assessee.
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2024 (2) TMI 154
Scrutiny assessment - Validity of assessment framed u/s 143(3) - Whether AO have examined the issues beyond his jurisdiction as conferred upon him under the limited scrutiny ? - HELD THAT:- Admittedly the notice u/s 143(2) was issued for initiating the scrutiny assessment u/s limited scrutiny category to examine the issue regarding contract receipts / fees have been correctly offered for Tax or not. AO while examining the issue has examined all the receipts as emanating from Form 26AS of the assessee where the TDS have been deducted u/s 194C - AO further issued the questionnaire to the assessee and accordingly have come to know that the assessee have shown business income u/s 44AD and 44AE. Since the AO have come to know about the nature of the income of the assessee only after submissions of the assessee, therefore, it cannot be said that the Ld. AO have examined the issues beyond his jurisdiction as conferred upon him under the limited scrutiny mandate. Under such facts and circumstances ground no. 1 of the assessee is dismissed. Undisclosed profit from contract work and transport income - HELD THAT:- The assumptions made by Ld. AO are without any basis, on the contrary the basis adopted by the Ld. AO was itself conflicting at places when the percentage of profit was calculated on the basis of turnover in 26AS, but have presumed that the turnover shown in 26AS was not considered by the assessee in the returned income, Ld. AO also presumed that the deemed profit u/s 44AE was not included in the profit shown by the assessee in ITR was again on the basis of presumption without any concrete evidence. Thus having no further information or decision contradicting the submissions and contentions of the Ld. AR, we find no basis to approve both the additions made by the Ld. AO, thus, we direct to delete the same. In result ground no. 2 3 of the assessee s appeal are allowed.
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2024 (2) TMI 153
Penalty levied u/s 271(1)(c) - defective notice - non specification of clear charge - non-strike off of the irrelevant part in the notice - whether the penalty proceedings are initiated on account of concealment of income or on account of furnishing inaccurate particulars of income? - HELD THAT:- On perusal of the notice issued u/s 274 read with section 271(1)(c) of the Act it is noticed that the AO did not strike off the irrelevant limb in the notice. AO did not specify the limb for which the notice u/s 271(1)(c) was issued i.e. either for concealment of income or for furnishing inaccurate particulars of income. The notice was issued mechanically stating that the assessee had concealed particulars of income or furnished inaccurate particulars of income. As could be seen from the above in the case of Mr. Mohd. Farhan A. Shaikh . [ 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] while dealing with the issue of non-strike off of the irrelevant part in the notice issued u/s 271(1)(c) of the Act, held that assessee must be informed of the grounds of the penalty proceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness. Thus notice issued by the Assessing Officer was bad in law if it did not specify under which limb of section 271(1)(c) of the Act the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. Decided in favour of assessee.
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2024 (2) TMI 152
Deduction u/s 80P - claim denied as delay in filing the return of income - scope of amendment brought is in by Finance Act from 01.04.2021 w.e.f. 1.4.21 - prima facie adjustment - HELD THAT:- From perusal of the said amendment, we note that before 01.04.2021 there was no mechanism for the CPC to prima facie disallow the claim u/s. 80P of the Act. It was only from 01.04.2021 that such powers have been conferred with the CPC to make prima facie disallowance in case of the claim made u/.s 10AA or deduction claimed under any of the provisions in Chapter VIA which, inter alia, includes 80P of the Act. We note that section 80AC of the Act puts a bar against claiming of deduction in respect of certain income provided under the head (C) of Chapter VIA which includes section 80P of the Act also if the return of income are not filed before the due date prescribed u/s. 139(1) of the Act. Had it been a case of scrutiny proceeding u/s. 143(3) of the Act, the situation certainly would have been against the assessee subject to the approval by the authorities for condonation of delay in filing the return. As before us, the issue is regarding prima facie adjustment made u/s. 143(1)(a)(v) of the Act and as discussed above, such power of making the prima facie adjustment towards deduction u/s. 80P of the Act came to CPC only from 1.4.2021 and thus, the alleged disallowance by CPC is beyond its jurisdiction . Therefore, the assessee deserves relief. We are thus inclined to hold that the Ld. CIT(A) erred in denying the deduction u/s 80P - Decided in favour of assessee. Penalty u/s. 272A(1)(d) - no compliance made to notices u/s. 142(1) within the stipulated time - HELD THAT:- From the documents on record, we observe that the demand notice for imposition of penalty is not available. We find it proper to consider the submissions made by the Ld. Counsel for deleting the penalty since the assessment has been completed u/s. 143(3) of the Act and it not being an ex parte order u/s. 144. We find that there is a reasonable cause to delete the penalty so imposed. Thus, the penalty imposed of Rs. 20,000/- is deleted. Grounds taken by the assessee are allowed.
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2024 (2) TMI 151
Enlarging the scope of limited scrutiny - changing limited to complete scrutiny - scientific research expenditure disallowance and disallowance u/s 14A - HELD THAT:- It remains an uncontroverted fact that the case of the assessee was selected for limited scrutiny for the reason Unsecured loans from persons who have not filed their Return of Income. Apart from this there is no mention of any other approval taken by the Assessing Officer to examine the issues of donation for scientific research expenditure as well as disallowance u/s 14A of the Act. It is discernible from the fact that the two issues relating to scientific research expenditure and disallowance u/s 14A of the Act are not connected to the issue of unsecured loans. It is also not the case that while examining the issue of unsecured loans the ld. Assessing Officer found some connection with the issues of scientific research expenditure or disallowance u/s 14A of the Act. Thus it is an admitted fact that the AO exceeded his jurisdiction provided for limited scrutiny by disallowing the claim of scientific research expenditure u/s 35(1)(ii) and disallowance under section 14A of the Act. We are of the considered view that in absence of any prior permission from competent authority for enlarging the scope of limited scrutiny or changing the same to complete scrutiny, AO was not within his jurisdiction to make the disallowance u/s 35(1)(ii) and 14A. Addition u/s 68 - unexplained unsecured loans - HELD THAT:- Since the assessee has duly discharged its primary onus by filing all necessary evidence which in our considered view are sufficient enough to prove the identity and creditworthiness of the share subscriber and genuineness of the transaction to explain the nature and source of the alleged cash credit. We fail to find any infirmity in the finding of the CIT(A) holding that the assessee has established the identity and creditworthiness of the loan creditors and genuineness of the loan transactions received by the assessee as well as the amalgamated companies during the year. Thus, no interference is called for in the finding of the ld. CIT(A) on this issue of addition u/s 68. Revenue appeal dismissed.
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2024 (2) TMI 150
Appealable order before CIT(A) - scope of order passed on the basis of direction given u/s 263, revisionary proceedings - taxability of award of the Arbitral Tribunal - AO on the very next day passed order giving effect to the order of the CIT passed u/s 263 adding the amount of arbitral award to the income of the assessee but assessee's appeal against this order of the AO held to be non-maintainable since the AO s order was simply to give effect to the findings of the ld. CIT and against which no appeal lay - CIT found that the assessee had not returned to tax the award given to it by the Arbitral Tribunal on account of loss of toll collection in connection with the construction of Bharatpur bye pass road. HELD THAT:- We are not in agreement with the CIT(A). The order of the AO is not a simple order giving effect to the order of the CIT passed u/s 263. AO was required to apply his mind to the facts of the case and then pass an assessment order on the issue. It is not that the ld. CIT in his order passed u/s 263 had categorically and specifically held that the arbitral award of Rs. 990 lakhs was taxable and be taxed by the AO in the impugned year. What he had held and directed was that the AO was to pass a fresh assessment order following the decision in the case of Gajapathy Naidu which, he noted, held that when the assessee had accrued the right to receive, it should be included or accounted for in that year. There is no factual finding by the CIT that the amount of arbitral award of Rs. 990 lakhs accrued as right to receive to the assessee in the impugned year. The entire order of the CIT does not contain any such finding. In fact, there is no possibility of such finding in the order of the CIT since he has noted in his order that the assessee did not file copy of the arbitral award before him. CIT(A) s direction to the AO was to subject it to tax in the impugned year, subject to finding the same to have accrued to the assessee in the impugned year in accordance with the decision in the case of CIT Vs. Gajapathy Naidu [ 1964 (4) TMI 6 - SUPREME COURT] In terms of this direction of the CIT, the AO was required to examine the facts of the case and thereafter adjudicate upon the taxability of the arbitral award of Rs. 990 lakhs. The order passed by the AO, therefore, was not a simple order giving effect to the order of the ld. CIT. He was required to examine the facts of the case and apply the law as laid down in CIT Vs. Gajapathy Naidu [ 1964 (4) TMI 6 - SUPREME COURT] to it while subjecting the arbitral amount to tax. The findings of the ld. CIT(A), therefore, that the order of the AO was to give effect to the findings of the ld. CIT and, therefore, not appealable is incorrect. The assessee, we hold, is well within his rights to have filed an appeal against this order passed by the AO. Even otherwise, it has been held in the case of Kalyankumar Ray [ 1991 (8) TMI 291 - SUPREME COURT] that an assessment order comprises the detailed order passed by the AO as well as the computation of income done by him. Therefore, for all purposes, the computation of income by the AO giving effect to the ld. CIT s direction is an assessment order which is appealable. The order passed by the CIT(A), we hold, therefore, holding the assessment order to be not appealable is incorrect in law. Having held so, we deem it fit to restore the issue back to the AO to verify the facts of the case and thereafter pass an order in accordance with the directions of the CIT in his order passed u/s 263 - Appeal of the assessee is allowed for statistical purposes.
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2024 (2) TMI 149
Validity of reopening of assessment u/s 147 - change of opinion - eligibility of claim of exemption u/s 54 - DR submitted that the AO has rightly invoked Section 147 of the Act as the HUF has not purchased the property and deduction the deduction cannot be claimed by HUF when the name of property is that of individual and not in the name of HUF - HELD THAT:- It is pertinent to note that in the first round of assessment u/s 143(3) of the Act, the very issue of claim of exemption under Section 54 of the Act was taken into account and all the aspects of the said issue was considered at that threshold which was thereafter contested by the CIT(A) and the CIT(A) has also passed order dated 03.08.2015 which remain uncontested. Reopening is on the very same issue and, therefore, this is a clear case of change of opinion which cannot be allowed as per ratio laid down in case of CIT vs. Kelvinator of India Limited [ 2010 (1) TMI 11 - SUPREME COURT] - Decided in favour of assessee.
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2024 (2) TMI 148
Disallowance u/s 57 - assessee has not clarified/gave explanation regarding expenses claimed u/s 57 for earning interest income from Banks, interest on income tax refund, miscellaneous income etc. and its related expenses - as per AO held that the since the expenses are not wholly and exclusively incurred for the purpose of making or earning any income which is chargeable under the head income from other sources, therefore, the same was disallowed - HELD THAT:- It is pertinent to note that the expenses/expenditure by the assessee has a direct nexus with the amount/common fund collected by the members of the society and the same which was kept in the Bank as Fixed Deposit. From the perusal of records, it appears that the said deposits as well interest derived thereon is directly used for the maintenance and upkeepment of the society. Therefore, the assessee has rightly set off the same against the income of the assessee society. AO as well as the CIT(A) has not justified in disallowing the same. The decision of Hon ble Supreme Court in case of Secunderabad Club [ 2023 (8) TMI 925 - SUPREME COURT] is applicable in the present case. Thus, the appeal of the assessee is allowed.
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2024 (2) TMI 147
Deduction u/s. 80IA(4)(iv)(a) - A.O triggered the provisions of Section 80IA(8) of the Act by adopting the domestic purchase price of electricity by CSEB as the market rate and scaled down the assessee s claim for deduction u/s. 80IA(4)(iv)(a) - as observed assessee had sold power to its steel division and associate enterprises @4.30/- per unit, which was much higher as in comparison to the price, at which, it had sold surplus power to Chhattisgarh State Electricity Board (CSEB), i.e. at contracted price - CIT(A) vacated the disallowance of the assessee s claim for deduction u/s. 80IA - HELD THAT:- The issue involved in the present appeal is squarely covered by the aforementioned orders passed by the Tribunal in assessee s own cases, [ 2015 (6) TMI 1243 - ITAT RAIPUR] A.Y.2008-09, [ 2022 (8) TMI 440 - ITAT RAIPUR] A.Y.2013-14 and [ 2022 (8) TMI 1445 - ITAT RAIPUR] A.Y. 2014-15 as well as the by the judgment of M/s. Godawari Power and Ispat Limited [ 2013 (10) TMI 5 - CHHATTISGARH HIGH COURT] We find that the Tribunal vide its order passed in the case of DCIT-2(1), Vs. M/s. Mahendra Sponge and Power Limited, [ 2022 (8) TMI 1445 - ITAT RAIPUR] had after exhaustive deliberations vacated the disallowance of the assessee s claim for deduction u/s. 80IA(4)(iv)(a) as found favor with the claim of the assessee and observed, that the market value of the power supplied by the assessee to its steel division was rightly computed by considering the rate at which power was available in the open market, namely, the price that was charged by the electricity board. Decided in favour of assessee.
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2024 (2) TMI 137
Accrual of income in India - sale of software product - royalty receipts - India USA DTAA - As decided by HC [ 2023 (2) TMI 1251 - DELHI HIGH COURT] amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS u/s 195 - HELD THAT:- Having regard to the judgment of this Court in the case of Engineering Analysis Centre of Excellence Private Limited vs. Commissioner of Income Tax and Anr. [ 2021 (3) TMI 138 - SUPREME COURT] and having regard to the order of this Court M/S. GRACEMAC CORPORATION [ 2023 (8) TMI 98 - SC ORDER] the present special leave petition stands, accordingly, dismissed.
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Customs
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2024 (2) TMI 146
Seeking direction to the respondents to declare him as a qualified candidate as per Customs Brokers Licensing Regulations, 2013 and to issue the Customs Brokers License - HELD THAT:- It is well settled that when a citizen aggrieved by the action of a Government Department has approached the Court and obtained a declaration of law in his favour, others, in like circumstances, should be able to rely on the sense of responsibility of the department concerned and to expect that they will be given the benefit of this declaration without the need to take their grievances to Court. Applying this principle to the present case, it was the duty of the Respondents to extend the benefit of the Order dated 18-2-2022 to the Petitioner herein without expecting that every candidate who has secured more than 50 marks in the oral examination must run to this Court to obtain a declaration in their favour. The Respondents are directed to issue Customs Brokers License to the Petitioner herein in light of the Order dated 18-2-2022, which has attained finality - Petition allowed.
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2024 (2) TMI 145
Validity of SCN issued under Section 28(4) of the Customs Act read with Section 124 of the Customs Act in contravention of the order of the Appellate Commissioner - HELD THAT:- The decision rendered by the Court in M/S. N.C. ALEXENDER VERSUS THE COMMISSIONER OF CUSTOMS, CHENNAI II COMMISSIONERATE, CHENNAI [ 2022 (6) TMI 723 - MADRAS HIGH COURT] relates to the jurisdiction of DRI, to issue show cause notice as a proper officer, under the Customs Act, 1962. In this case, the show cause notice has been issued to the Commissioner of Customs II. The Court in N.C. Alexender has also noted that the apparent defect point out earlier by the Hon ble Supreme Court has been cured by the amendment to the provisions of the Customs Act, 1962 in the Finance Act, 2022. Therefore, the decision of the Court in N.C. Alexender is irrelevant. The petitioner should therefore file a reply to the impugned show cause notice. Therefore, there is no merits in the submission of the Learned Counsel for the petitioner. The Court is of the view that the present writ petition is premature. It is therefore liable to be dismissed. The petitioner is therefore given liberty to file a reply to the impugned show cause notice that has been issued to the petitioner. The present writ petition is dismissed with liberty to the petitioner to file a reply within a period of 30 days from the date of receipt of a copy of this order.
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2024 (2) TMI 144
Seeking grant of regular bail - Smuggling of gold having a value more than Rs. 1.20 crores - gold in a compound form concealed in four capsules in the rectum of the petitioner - gold from inside the panties worn by the wife of the petitioner - HELD THAT:- Petitioner has been in custody since 19-5-2023. More than 54 days have elapsed, since the petitioner remaining in custody. Though investigation is stated to be still continuing, I am of the view that, further detention of the petitioner would amount to conviction before punishment. Therefore, this Court is of the opinion that, petitioner can be released on bail subject to strict conditions. Bail application allowed.
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2024 (2) TMI 143
Enforcement of assessment order - petitioner apprehends that during the pendency of Exts P11 to P13, the respondents may enforce the assessment order - HELD THAT:- The third respondent is directed to consider and dispose of Exts. P12 and P13, in accordance with law and as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a certified copy of the judgment, after affording the petitioner an opportunity of being heard - Needless to mention that if the third respondent condones the delay, considers the stay petition and proposes to pass a conditional order of stay, he shall state reason for the same. Petition disposed off.
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Insolvency & Bankruptcy
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2024 (2) TMI 142
Authorization of Applicant/ Liquidator to defend all of any of the suit, prosecution or other legal proceedings, civil or criminal in the nature of and on behalf of the Corporate Debtor initiated both prior and post the commencement of liquidation proceedings of the Corporate Debtor - requisition to the Courts, Tribunals and such government authorities for expeditious disposal of matters pending in the name of and against the Corporate Debtor - blanket/de-facto approval for the institution of the suit or any other legal proceedings by the Liquidator on behalf of the Corporate Debtor in near future so as to ensure appropriate recovery in favour of the Corporate Debtor for its beneficial liquidation - HELD THAT:- There cannot be any exception to requirement of law as contained in Section 33(5) of the Code i.e. legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority. When the application was filed by the Liquidator being I.A. No.405 of 2021, this was with intent and purpose to obtain prior approval of the Adjudicating Authority to instituted legal proceeding on behalf of the Corporate Debtor, which application was allowed by the Adjudicating Authority by the order passed on 28.04.2022. The subsequent application became necessary as the objection was raised to the maintainability of the Writ Petition on the ground that there is no prior approval with regard to filing of the Writ petition. Though it is not disputed that there was no specific approval for filing Writ Petition, however, when the Adjudicating Authority has allowed the Liquidator to prosecute on behalf of the Corporate Debtor, the Adjudicating Authority ought to have issued necessary order as prayed in I.A. No.1081 of 2023 to clarify that the Liquidator was fully entitled to peruse the Writ Petition on behalf of the Corporate Debtor. The impugned order cannot be sustained. Order dated 29.11.2023 is set aside. Appeal disposed off.
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PMLA
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2024 (2) TMI 141
Money Laundering - proceeds of crime - attachments of the property - meaning to be prescribed to the words the proceedings relating to any offence under this Act before a Court in Section 8(3)(a) of PMLA - HELD THAT:- The retention of the documents and properties has been allowed for the purposes of investigation/adjudication. The same would, therefore, extend for a period of 365 days in terms of Section 8(3)(a) of the Act unless a proceeding relating to the offence under the Act has been filed prior thereto. As noted hereinabove, the proceeding relating to any offence under this Act has to mean proceeding filed before the Special Court in relation to the property or the record so attached, seized or frozen. The interpretation to Section 8(3)(a) of the Act as propounded by the learned counsel for the respondent would, in fact, make the said provision confiscatory and violative of Article 14 of the Constitution of India inasmuch as it would allow the seizure to continue endlessly even though the same does not culminate into any proceedings relating to any offence under the Act before a court within the period of 365 days as prescribed by that very provision. Explanation (ii) to Section 44 of the Act states that the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, against any accused person involved in respect of the offence for which complaint has already been filed, whether named in the original complaint or not. From the said provision also, it is apparent that the investigation may lead to filing of a subsequent complaint to bring on record further evidence in form of seized documents and records, either against the accused named in the original complaint or subsequent thereto - it is held that the period of 365 from the passing of the order dated 10.02.2021 by the Adjudicating Authority having been passed, the documents/digital device/property seized from the petitioner in the search and seizure conducted on 19th and 20th August, 2020 from the premises of the petitioner are liable to be returned. Therefore, the natural consequence of the investigation for a period beyond three hundred and sixty five days not resulting in any proceedings relating to any offence under the Act, in terms of Section 8(3) of the Act, is that such seizure lapses and the property so seized must be returned to the person from whom it was so seized. The respondents are directed to return the documents, digital devices, property, and other material seized from the petitioner pursuant to the search and seizure operation conducted on 19th and 20th August, 2020, forthwith to the petitioner, subject to any order to the contrary passed by any competent Court - The petition is allowed.
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Service Tax
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2024 (2) TMI 140
Rejection of appeal - non-fulfilment of conditions of pre-deposit as per section 35F of Central Excise Act, 1944 as made applicable to service tax by virtue of Section 83 of Finance Act, 1994 - HELD THAT:- It is found that now before filing the present appeal before the Tribunal the appellant has made pre-deposit equal to 10% of the tax demanded in terms of Section 35F Central Excise Act, 1944 and thus complied with the mandatory pre-deposit. This case needs to be remanded back to the Ld. Commissioner (Appeals) for deciding the same on merits. Hence, the impugned order is set aside and the matter is remanded back to the Ld. Commissioner (Appeals) with the direction to decide the appeal within the period of two months after the receipt of the certified copy of this order. Appeals is allowed accordingly by way of remand.
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2024 (2) TMI 139
Classification of services - business auxiliary services or not - sale incentive, advertisement and publicity charges received by the appellant - HELD THAT:- The issue involved in the present case is no longer res-integra. Reliance is placed in SUPERIOR DRINKS PVT. LTD. VERSUS COMMISSIONER OF C.E., NAGPUR-I [ 2019 (6) TMI 272 - CESTAT MUMBAI] and COMMISSIONER OF CENTRAL EXCISE S.T., LUCKNOW VERSUS M/S BRINDAVAN BOTTLERS LTD. (VICE-VERSA) [ 2019 (3) TMI 1428 - CESTAT ALLAHABAD] where it was held that The activity undertaken were not performed by the appellant for Coca Cola India, but was performed for themselves. Since no activity has been performed by the appellant for Coca Cola India, we are of view that mere receipt of amounts under the head Market Support Received will qualify them as service under Section 65B(44). There are no merits in the impugned order demanding the service tax by classifying the incentive and sale promotion receipts, to be towards the provison of business auxiliary services . As the demand of service tax itself is set aside on merits, the issue not considered on grounds of limitation. Further since the demand of service tax is set aside so is the demand of interest and the penalties imposed. Appeal allowed.
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Central Excise
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2024 (2) TMI 138
Refund claim - appellant has made payment of duty through PLA at Nil payment through CENVAT credit - Area based exemption vide Notification No.56/2002-CE dated 14.11.2002 and Notification No.01/2010-CE dated 06.02.2010 - ex parte order without giving any reasonable opportunity of hearing to the appellant - violation of principles of natural justice - HELD THAT:- The impugned order passed by the learned Commissioner (Appeals) ex parte is without affording an opportunity of hearing to the appellant. Further, it is found that one consolidated hearing notice granting opportunity of hearing on three different dates i.e. 09.09.2022, 16.09.2022 and 23.09.2022 is clearly in violation of the principles of natural justice. This issue has been considered by the Hon ble High Court of Gujarat in the case of REGENT OVERSEAS PVT LTD AND 1 VERSUS UNION OF INDIA AND 1 [ 2017 (3) TMI 557 - GUJARAT HIGH COURT] wherein the Hon ble High Court has held as notice for personal hearing was Kat served upon the petitioners in accordance with law, no one could remain present for personal hearing on behalf of the petitioners on the dates specified in the notice and the adjudicating authority has proceeded on the footing that three adjournments have been granted and has passed and the impugned ex parte order. The impugned order is not sustainable in law and therefore, the same is set aside and the case remanded back to the learned Commissioner (Appeals) with the direction to decide the same on merits after giving reasonable opportunity of hearing to the appellant and thereafter pass a reasoned order in accordance with law - the appeals are allowed by way of remand.
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