TMI Tax Updates - e-Newsletter
March 27, 2020
Case Laws in this Newsletter:
GST
Income Tax
Benami Property
Insolvency & Bankruptcy
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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GST:
Release of detained goods - whether the Officers of Kerala would have a jurisdiction to detain and seize the goods or at the best could have intimated the jurisdictional Officer in Karnataka to initiate proper proceedings against the petitioner in view of the report? - In case of a bonafide dispute with regard to the classification between a transitor of the goods and the squad officer, the squad officer may intercept the goods and detain them for the purpose of preparing the relevant papers for effective transmission to the judicial assessing officers and nothing beyond. - HC
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GST:
Seizure of documents - proceeding under Section 70 of the OGST Act - grievance of the petitioner is that, since the documents called for by the OGST Authority has been seized by the CGST Authority, he is not in a position to supply the documents to the OGST Authority - Direction issued - HC
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GST:
Bail Application - offences punishable under Sections 132(1)(b) and 132(1)(c) of CGST Act - The applicant is arrested on 21.07.2019 and almost 55 days are over and complaint is yet not filed by respondent no. 2 against the present applicant. - The application is allowed subject to conditions and the applicant is ordered to be released on bail.
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Income Tax:
Non remittence of TDS in time - penal action initiated by the Income Tax Department against the petitioners - criminal proceedings - the petitioners though deducted tax at source, not paid the same within the time prescribed. This action of initiating criminal prosecution after obtaining sanction from the appropriate authority cannot be termed as violative of principles of natural justice.
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Income Tax:
Seizure of money - release the money in interim custody - This court, by exercising the powers vested under Article 226 of the Constitution of India, cannot issue any direction with respect to release of the money, at this stage of the matter, unless the matter is considered by the appropriate authority.
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Income Tax:
Reopening of assessment u/s 147 - reasons for re-opening the assessment - change of opinion or not - mere filing to the annexure by the petitioner in response to notice during scrutiny assessment by itself may or may not have been sufficient to come to the conclusion that there was full and true disclosure by the petitioner if the information furnished was neither complete nor true.
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Income Tax:
Correct head of income - interest received under Section 28 of the Land Acquisition Act, 1894 - part take the character of the compensation and would fall under the head “Capital gains” or “Income from other sources” - the interest received on compensation or enhanced compensation is to be treated as “income from other sources” and not under the head “Capital gains”.
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Income Tax:
Exemption u/s 11 - registration u/sec. 12AA denied - CIT(E) rejected the 12A registration on the ground that clause mentioned in the gift deed is not in accordance with law is concerned; we find that the above reason given by the ld.CIT(E) is not correct in rejecting the 12A registration to the assessee. CIT(E) not at all examined what the assessee‟s activities whether assessee actually carrying charitable activities are not. Without doing so, the ld. CIT(E) picked up an irrelevant clause in the gift deed and rejected 12A, CIT(A) is not correct.
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Income Tax:
Reopening of assessment u/s 147 - additions u/s. 68 and u/s. 69C - Information from the Investigation Wing(Income-tax Department) can only trigger the reasons to suspect. Then the AO to make some preliminary inquiry and collect some material which would suggest the escapement of income - AO does not satisfy the jurisdictional requirement as per the settled law - Notice issued u/s 148 quashed.
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Income Tax:
Denial of deduction u/s 80P(2) - assessee is in the Banking business accepts the deposits from the general public being D Class nominal members and also lend the funds - eligibility of nominal members - the nominal members are also eligible for the Benefits of credit society.
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Income Tax:
Penalty imposed u/s 221(1) r.w.s. 140A(3) - non-payment of self-assessment tax - Return of Income as filed u/s 139(1) itself was declared an invalid Return - scope of Sec.140A(3) - without there being any requisite corresponding amendment to Sec. 221 of the Act in consonance with the amendments carried out in Sec. 140A(3) of the Act w.e.f. 01.04.1989, the Assessing Officer erred in levying the impugned penalty.
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FEMA:
Organisation of a political nature as barred from receiving foreign contributions - Support to public causes by resorting to legitimate means of dissent like bandh, hartal etc. cannot deprive an organisation of its legitimate right of receiving foreign contribution. It is clear from the provision itself that bandh, hartal, rasta roko etc., are treated as common methods of political action. Any organisation which supports the cause of a group of citizens agitating for their rights without a political goal or objective cannot be penalized by being declared as an organisation of a political nature. - SC
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FEMA:
Violation of provisions of Section 10(6) of the FEMA Act - Responsibility of Authorised person - Considering the fact that the appellant admittedly became aware of the contravention yet failed to take corrective measures until the action to impose penalty for such contravention was initiated, he cannot be permitted to invoke the only defence available in terms of proviso to subSection (1) of Section 42 of the FEMA Act that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention - SC
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Service Tax:
Club and Association Service - Levy of service tax - advance entrance/enrollment fee collected from prospective members - Mutuality of interest - there being mutuality of interest between the club and its members, there is no transfer of ownership of the service - Demand set aside.
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VAT:
Audit of the business operations of the petitioner - Section 64 (4) of the TNVAT Act - In the case on hand, the Joint Commissioner (CT) Enforcement I, who is subordinate to the Commissioner, has ordered for audit, which is against the provisions of the Act. Based on the same, the first respondent has passed the impugned assessment orders, which are as rightly contended by the learned counsel for the petitioner, liable to be set-aside.
Articles
Notifications
Customs-
17/2020 - dated
25-3-2020
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Cus
Seeks to amend Notification No. 69/2011-Customs, dated the 29th July, 2011
GST-
02/2020 - dated
26-3-2020
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CGST Rate
Seeks to amend Notification No. 11/2017-Central Tax (Rate), dated the 28th June, 2017
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03/2020 - dated
25-3-2020
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CGST Rate
Seeks to amend Notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017
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02/2020 - dated
26-3-2020
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IGST
Seeks to amend Notification No. 4/2019- Integrated Tax, dated the 30th September, 2019
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02/2020 - dated
26-3-2020
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IGST Rate
Seeks to amend Notification No. 8/2017- Integrated Tax (Rate), dated the 28th June, 2017
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03/2020 - dated
25-3-2020
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IGST Rate
Seeks to amend Notification No. 1/2017- Integrated Tax (Rate), dated the 28th June, 2017
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02/2020 - dated
26-3-2020
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UTGST Rate
Seeks to amend Notification No. 11/2017- Union Territory Tax (Rate), dated the 28th June, 2017
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03/2020 - dated
25-3-2020
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UTGST Rate
Seeks to amend Notification No. 1/2017-Union territory Tax (Rate), dated the 28th June, 2017
GST - States-
06/2020 - KGST.CR.01/17-18 - dated
24-3-2020
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Karnataka SGST
Seeks to prescribe return in FORM GSTR-3B of KGST Rules, 2017 along with due dates of furnishing the said form for April, 2020 to September, 2020
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05/2020 - KGST.CR.01/17-18 - dated
24-3-2020
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Karnataka SGST
Seeks to prescribe the due date for furnishing FORM GSTR-1 by such class of registered persons having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year, for each of the months from April,2020 to September, 2020.
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04/2020 - KGST.CR.01/17-18 - dated
24-3-2020
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Karnataka SGST
Seeks to extend the time limit for furnishing of the annual return specified under section 44 of KGST Act, 2017 for the financial year 2018-2019 till 30.06.2020.
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04/2020 - FD 03 CSL 2020(e) - dated
19-3-2020
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Karnataka SGST
Seeks to exempt foreign airlines from furnishing reconciliation Statement in FORM GSTR-9C
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Order No. 01/2020- MGST. - dated
27-2-2020
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Maharashtra SGST
Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117(1A) of the Maharashtra Goods and Services Rules, 2017 in certain cases.
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01/2020-State Tax (Rate) - dated
27-2-2020
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Maharashtra SGST
Seeks to amend notification No. 1/2017- State Tax (Rate) dated 29.06.2017 so as to notify rate of GST on supply of lottery.
Insolvency and Bankruptcy-
IBBI/2020-21/GN/REG056 - dated
20-4-2020
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IBC
Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2020.
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (3) TMI 1125
Release of detained goods - section 129 of GST Act - classification of goods - whether the Officers of Kerala would have a jurisdiction to detain and seize the goods or at the best could have intimated the jurisdictional Officer in Karnataka to initiate proper proceedings against the petitioner in view of the report? - HELD THAT:- It is evident that Section 129 opens with a non obstante clause empowering the Officers to detain and seize the goods, if it found to be in contravention of any of the any of the provisions of the Act and release of the vehicles, as per the conditions, enumerated, therein. In case of a bonafide dispute with regard to the classification between a transitor of the goods and the squad officer, the squad officer may intercept the goods and detain them for the purpose of preparing the relevant papers for effective transmission to the judicial assessing officers and nothing beyond. In the present case, it is a case of bonafide miscalculation as to whether the goods would be exigible to 12% or 28%. The upshot of the reasoning aforementioned is that the impugned order of detention Ext.P3(c) and consequential notices are not sustainable and hereby quashed - goods are directed to be released to the petitioner with a further direction that the inspecting authority of Kerala would prepare a report and submit the same to the assessing authority, Karnataka for taking action - Petition allowed.
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2020 (3) TMI 1124
Permission for withdrawal of petition - Whether demand raised in the assessment order Ext.P1 is not in accordance with the provisions of Section 62 read with Section 44 of the GST Act? - HELD THAT:- The petitioner seeks the liberty of this court for withdrawal of this writ petition with a liberty to challenge the assessment order in accordance with law. The writ petition is dismissed as withdrawn.
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2020 (3) TMI 1123
Seizure of documents - proceeding under Section 70 of the OGST Act - grievance of the petitioner is that, since the documents called for by the OGST Authority has been seized by the CGST Authority, he is not in a position to supply the documents to the OGST Authority - HELD THAT:- This writ petition is disposed of, directing the petitioner to apply for copies of the Documents required by him before the CGST authority within 15 (fifteen) days from today. If such an application is filed, the copies of the documents sought for shall be supplied within a period of three weeks from the date of his application. Petition disposed off.
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2020 (3) TMI 1122
Refund of IGST - goods exported from India - Zero rated supplies - time limitation - HELD THAT:- It is ordered that the 3rd respondent or the competent authority of the respondents will take up the claim of the petitioner for grant of refund as referred to in Ext.P5 and after affording reasonable opportunity of being heard to the petitioner will take a considered decision thereon without much delay, preferably within a period of 3 to 4 weeks from the date of production of a certified copy of this order. Petition disposed off.
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2020 (3) TMI 1121
Rectification of mistake - error apparent on the face of record - availability of benefit of notification dated 13-10-2017 at the relevant point of time - HELD THAT:- Issue notice to the petitioner returnable on 6-12-2019.
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2020 (3) TMI 1120
Bail Application - offences punishable under Sections 132(1)(b) and 132(1)(c) of CGST Act - The applicant is arrested on 21.07.2019 and almost 55 days are over and complaint is yet not filed by respondent no. 2 against the present applicant. - HELD THAT:- Considering the offence as alleged in the FIR and also considering the nature of allegations made in the FIR, this is opined to be a fit case to exercise the discretion to enlarge the applicant on bail. The application is allowed subject to conditions and the applicant is ordered to be released on bail.
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Income Tax
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2020 (3) TMI 1119
Non remittence of TDS in time - penal action initiated by the Income Tax Department against the petitioners - criminal proceedings - HELD THAT:- The petitioners Company M/s.Vasan Health Care Private Limited has not remitted the TDS in time. It has partially remitted with interest but still remittence of TDS is due. Mere representation to defer action will not and cannot stop the authorities proceeding in accordance to law. The interim relief granted to the petitioners is to operate the bank account with minimum balance of ₹ 1.62 Crores by itself an indication that the petitioners have not cleared the entire due. Even otherwise, the interim order of the Court dated 08.01.2016, goes to show that only after the coercive measure of freezing the petitioners account, the Income Tax Department were able to recover about ₹ 8 Crores. While so, the petitioners, who have failed to pay TDS in time and what little paid was paid with delay and interest cannot stale the prosecution on frivolous and flimsy ground. In this case, the petitioners though deducted tax at source, not paid the same within the time prescribed. This action of initiating criminal prosecution after obtaining sanction from the appropriate authority cannot be termed as violative of principles of natural justice. Refer the case of Madhumilan Syntex Ltd [ 2007 (3) TMI 670 - SUPREME COURT] wherein the Directors of the Company approached the Court seeking quash of the criminal prosecution on the ground that the tax deducted at source was paid with interest and there was reasonable cause of the belated payment, the Honourable Supreme Court after extracting the relevant provisions of the Income Tax Act once a statute requires to pay tax and stipulates period within which such payment is to be made, the payment must be made within that period. If the payment is not made within that period, there is default and an appropriate action can be taken under the Act. Interpretation canvassed by the learned counsel would make the provision relating to prosecution nugatory.' Following the dictum laid down by the Hon'ble Supreme Court in Madhumilan Syntex case [supra], these Criminal Original Petitions are dismissed. Consequently, connected Miscellaneous Petitions are closed.
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2020 (3) TMI 1118
Seizure of money - release the money in interim custody - HELD THAT:- An application filed by the appellant seeking interim custody of the money was already declined and a revision petition filed against the said order is pending disposal before the Sessions Court. Evidently, now the Income Tax Department is in seisen of the matter and had already initiated 'centralization proceedings'. They are now keeping custody of the money based on an order passed by the Magistrate's Court. It is for the appellant to approach the appropriate authority in the Income Tax Department claiming ownership and release of the amount, pending finalization of the proceedings, on adducing proof with respect to its ownership. They can also purse the remedy of revision petition filed before the Sessions Court. This court, by exercising the powers vested under Article 226 of the Constitution of India, cannot issue any direction with respect to release of the money, at this stage of the matter, unless the matter is considered by the appropriate authority. As found by the learned Single Judge, interference by this court may be warranted only in a proper proceedings wherein the appellant challenges any order which may be passed by the authority or court concerned. We do not think that it is proper to exercise the discretionary jurisdiction vested on this court under Article 226 to issue any direction with respect to release of the money, unless a proper adjudication is made by the authority or court concerned. Hence we find no illegality, error or impropriety in the judgment of the Single Judge, impugned herein. Consequently, the above writ appeal deserve no merit and the same is hereby dismissed, reserving liberty to the appellant to approach the appropriate authority/court seeking appropriate reliefs.
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2020 (3) TMI 1117
Reopening of assessment u/s 147 - reasons for re-opening the assessment - deduction u/s 80JJAA as claimed by the petitioner - change of opinion or not? - HELD THAT:- Whether the notice that has been issued to the petitioner was on account of change of opinion or on account of failure on the part of the petitioner to fully and truly disclose all material required for the assessment is to be determined by the Assessing Officer while passing order under Section 147 of the Income Tax Act, 1961. In the facts of the case, though the petitioner had furnished certain details at the time of re-assessment, the question still remains to be answered is whether there was full and true disclosure by the petitioner as is contemplated under proviso to Section 147 of the Income Tax Act, 1961. In this case, mere filing to the annexure by the petitioner in response to notice during scrutiny assessment by itself may or may not have been sufficient to come to the conclusion that there was full and true disclosure by the petitioner if the information furnished was neither complete nor true. It is therefore best left open for the petitioner to demonstrate before the 1st respondent that the details furnished by the petitioner vide letter dated 03.03.2016 in annexure 2 meets the requirements of full and true disclosure for the Assessing Officer to drop the proceedings in terms of 1st proviso to Section 147 of the Income Tax Act, 1961. In case there is a change of opinion, the 1st respondent cannot proceed in the light of the decision of the Hon ble Supreme Court in CIT Vs. Kelvinator of India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT] In case indeed there is a mere change in opinion, the 1st respondent will be obliged to drop the proceeding. However, to ascertain whether is a mere change of opinion or not first it has to be established that the there was true and full disclosure by the petitioner. This can be demonstrated by the petitioner only before the 2nd respondent and not in a proceeding under Art.226 of the Constitution of India as scope of judicial review is limited and it is not possible to conduct roving enquiry on facts. Under these circumstances, do not find any merits in quashing the impugned notice dated 13.03.2017 and the communication dated 24.11.2017 overruling the objection of the petitioner. Relegate the petitioner to participate in the proceedings before the 1st respondent by filing appropriate representations/objections within a period of thirty days from the date of receipt of a copy of this order. The 1st respondent is obliged to pass orders on merits in accordance with law. It is made clear that in case the circumstance do not justify invocation of proviso to Section 147, the 1st respondent shall drop the proceedings. At the same time, while passing orders under Section 147 of the Income Tax Act, the 1st respondent can pass assessment order as per Explanation 3 to Section 147 of the Income Tax Act, 1961.
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2020 (3) TMI 1116
Unexplained cash purchase - information received from the Customs Authorities - notice was issued for enhancement of income and served on the AR asking the assessee to give his explanation within 15 days, however, till date the assessee neither submitted the explanation nor requested for more time to submit the explanation - main contention of the learned counsel for the petitioner is that the second respondent, without applying his mind independently, has issued the impugned notice relying on the report of the Assessment Officer, which is arbitrary and illegal and on this score alone, the impugned notice is liable to be quashed - HELD THAT:- Considering the facts and circumstances of the case and having regard to the submissions now made by the learned counsel on either side, this Court permits the petitioner to submit the necessary objections to the second respondent, within a period of two weeks from the date of receipt of a copy of this order. On receipt of the same, the 2nd respondent shall consider the same and pass appropriate orders independently applying his mind, on merits and in accordance with law, after providing an opportunity of personal hearing to the petitioner, within a period of four weeks thereafter.
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2020 (3) TMI 1115
Correct head of income - interest received under Section 28 of the Land Acquisition Act, 1894 - part take the character of the compensation and would fall under the head Capital gains or Income from other sources - HELD THAT:- The scheme with regard to chargeability of interest received on compensation and enhanced compensation has undergone a sea change with the insertion of Sections 56(2)(viii) and 57(iv) of the 1961 Act. Section 56 deals with income from other sources and a specific provision has been inserted by way of sub-section 2(viii), whereby the interest received on compensation or enhanced compensation, as referred to in clause (b) to Section 145A has been included under the head 'Income from other sources'. In clause (iv) to Section 57, deduction of fifty per cent is provided on interest received on compensation or enhanced compensation. In view of the amendments, the decision of Apex Court in Ghanshyam's case [ 2009 (7) TMI 12 - SUPREME COURT] does not come to the rescue of the petitioner to claim that interest received under Section 28 of the 1894 Act is to be treated as compensation and to be dealt with under Capital gains . The fact that there is no amendment carried out under Section 10(37) of the 1961 Act will not change the position. Section 10 deals with deductions and subsection (37) thereof deals with capital gains arising from transfer of agricultural land, it no where provides as to what is to be included under the head Capital gains . The argument raised is not well founded. Learned counsel has relied on Circular No. 5 of 2010 by merely reading clause 46.1. The said clause talks about undue hardship being caused as arrears of interest being taxable on accrual basis. Clause 46.2 states that Section 145A is amended to overcome the difficulty, by deeming the income for the year in which it is received. Clause 46.3 has been ignored in which Section 56(2)(viii) is dealt with that interest on compensation or on enhanced compensation referred to in clause (b) of Section 145A shall be assessed as income from other sources . It is held that the interest received on compensation or enhanced compensation is to be treated as income from other sources and not under the head Capital gains .
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2020 (3) TMI 1114
Exemption u/s 11 - registration u/sec. 12AA denied - Charitable activity u/s 2(15) - CIT(E) has observed that the trust in its MoA has been mentioned that on dissolution, the land will be given back to the heirs of the donors, which is not as per law - HELD THAT:- Assessee-society is running an old age home in 03 acres of land situated in Vizianagaram. Assessee is providing paying guest accommodation for the needy. Paying guest accommodation is said to be provided to those who are admitted by their kids or nearby relatives. The expenditure for running the organization is from interest income earned on bank deposits held by it. The deposits held by the organization are said to be out of funds donated by the public. Enquiries revealed that some donors initially donated each ₹ 1.00 lakh to the Prema Samajam‟ as one time donation for the benefit of it and the donations so collected were deposited in bank accounts held by it. Some donations are extended by public for Annadhanam Scheme‟ for benefit of the assessee. Apart from the donations accepted from public, it also receives sponsorships for providing food from public on special occasions i.e. birthdays, marriage days etc. Prema Samajam collects ₹ 3,000/- from public to provide food to the inmates on the day of their choice who want to sponsor food for the inmates of it for arranging food for all the 100 inmates presently housed. Some Doctors are learnt to be visiting Prema Samajam extending their free service to treat the inmates on fortnightly basis. One more building also sponsored by the Visakha Dairy Trust, Visakhapatnam. After examining the objects and activities carried by the assessee and also report submitted by the ITO (Exemptions), Visakhapatnam which reveals that the assessee is running old age home providing free shelter and food to at least 50 destitutes and also extending services to the poor people and free medical treatment. The source of income of the assessee is donations collected from the public and interest income deposited in the banks. Assessee is solely existed for the purpose of running society to carry the charitable activities, even assessee is charging some amount from the people who are admitted in the paying guest accommodation and expenses borne by the children or relatives. Ultimately all the funds are used for the benefit of the people who are admitted in the society, no profit making activity is carried out by the assessee. Under these facts and circumstances of the case, we are of the opinion that without there being any doubt, the assessee is running its society in charitable lines and is deserves to be granted registration u/sec. 12A of the Act. CIT(E) rejected the 12A registration on the ground that clause mentioned in the gift deed is not in accordance with law is concerned; we find that the above reason given by the ld.CIT(E) is not correct in rejecting the 12A registration to the assessee. CIT(E) not at all examined what the assessee‟s activities whether assessee actually carrying charitable activities are not. Without doing so, the ld. CIT(E) picked up an irrelevant clause in the gift deed and rejected 12A, CIT(A) is not correct. We, therefore, granting 12A to the assessee. - Decided in favour of assessee.
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2020 (3) TMI 1113
Reopening of assessment u/s 147 - additions u/s. 68 and u/s. 69C - AO received investigation report from the Pr. DIT about the assessee having rigged transaction - reason to believe OR reason to suspect - HELD THAT:- It has to be kept in mind that reason to believe postulates a foundation based on information and belief based on reason. Even if there is foundation based on information, there still must be reason warrant holding a belief that income chargeable to tax has escaped income. A bare reading of the reasons recorded to reopen reveals that there was non application of mind before reopening the assessment. Based on an information/investigation report, the AO has jumped into the conclusion that the assessee is involved in the activities of penny stock rigging etc. It has to be kept in mind that information from the Investigation Wing(Income-tax Department) can only trigger the reasons to suspect . Then the AO to make some preliminary inquiry and collect some material which would suggest the escapement of income. AO based only on investigation report has recorded his satisfaction without conducting preliminary inquiry, which is nothing but the borrowed satisfaction from the report of Investigation Wing. The condition precedent to reopen an assessment that is reason to believe should be that of the AO not that of the investigation wing, so in the absence of the condition precedent to reopen, the AO lacks jurisdiction to reopen the assessment. Even though the department was aware as on 09 Jan. 2014 itself about the demise of late Sushila Choudhari, the notice issued u/s. 148 in the name of deceased person is also bad in law. So I find that reason recorded by AO does not satisfy the jurisdictional requirement as per the settled law on the subject and therefore AO lacks jurisdiction to reopen and thereafter notice u/s. 148 is bad in law and therefore, the same cannot be sustained in the eyes of law and therefore, the same is hereby quashed. - Decided in favour of assessee.
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2020 (3) TMI 1112
Denial of deduction u/s 80P(2) - assessee is in the Banking business accepts the deposits from the general public being D Class nominal members and also lend the funds - eligibility of nominal members under Karnataka Co-operative Societies Act, 1959 - HELD THAT:- As decided in M/S. KODAVOOR VYAVASAYA SEVA SAHAKARI SANGHA NIYAMITHA [ 2019 (8) TMI 1269 - ITAT BANGALORE] restore the entire disputed issue to the file of Assessing Officer to adjudicate afresh in the light of the decision of chargeability of interest income under the head income from other sources and the observations of Hon'ble Supreme Court in the case of Totgar s Co-operative Sales Society Ltd. Vs. ITO [ 2010 (2) TMI 3 - SUPREME COURT] and Tumkur Merchants Souharda Credit Co-operative Ltd.[ 2015 (2) TMI 995 - KARNATAKA HIGH COURT] In respect of the claim of Nominal Members included in the definition of Member we find support on our view rely on the decision of Trapaj Vibhageeya Khet Udyog Mal Rupantar Food Processing Sahakari Mandali Ltd. Vs. DCIT [ 2018 (8) TMI 273 - ITAT AHMEDABAD] and M/S. S-1308 AMMAPET PRIMARY AGRICULTURAL COOPERATIVE BANK LTD. [ 2019 (1) TMI 116 - MADRAS HIGH COURT] which is covered in favour of the assessee. Accordingly, we are of the substantive opinion that the nominal members are also eligible for the Benefits of credit society. Accordingly we restore entire disputed issue to the file of Assessing Officer to grant the benefit to the nominal members and the assessee should be provided adequate opportunity of hearing and co-operate in submitting the information for early disposal of the case and allow the grounds of appeal of the assessee for statistical purposes.
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2020 (3) TMI 1111
Disallowance of deduction u/s 80P - whether the assessee being a co-operative society is eligible for deduction under section 80P of the Income Tax Act with respect to the income earned by the assessee on bank interest on fixed deposit receipts and savings bank accounts? - HELD THAT:- The above issue is covered by the decision in case of Totgar s Co-operative Sale Society Ltd. v. ITO [ 2010 (2) TMI 3 - SUPREME COURT] wherein it has been considered and held that assessee is not eligible for deduction under section 80P of the Act on the bank interest received on fixed deposit receipts and savings bank accounts. Such interest income falls in the category of Other income which has been rightly taxed by the Department under section 56 - Decided against assessee.
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2020 (3) TMI 1110
Penalty imposed u/s 221(1) r.w.s. 140A(3) - non-payment of self-assessment tax - Return of Income as filed u/s 139(1) itself was declared an invalid Return - scope of Sec.140A(3) - HELD THAT:- We find that the issue in dispute in the present appeal before us is squarely covered by the aforesaid order of Co-ordinate Bench of ITAT, Mumabi in the case of Heddle Knowledge Pvt. Ltd. vs. ITO [ 2018 (3) TMI 208 - ITAT MUMBAI] held that the fact that the amended Sec. 140A(3) w.e.f. 01.04.1989 does not envisage any penalty for non-payment of self-assessment tax, the Assessing Officer was not justified in levying the impugned penalty by making recourse to Sec. 221(1) of the Act. Sec. 221 of the Act remains unchanged, both during the pre and post amended Sec. 140A(3) of the Act and even in the pre-amended situation, penalty u/s 221 of the Act was not attracted for default in payment of self-assessment tax, which was expressly covered in pre 01.04.1989 prevailing Sec. 140A(3). Thus, without there being any requisite corresponding amendment to Sec. 221 of the Act in consonance with the amendments carried out in Sec. 140A(3) of the Act w.e.f. 01.04.1989, the Assessing Officer erred in levying the impugned penalty. Thus, on this aspect, we hereby set-aside the order of CIT(A) and direct the Assessing Officer to delete the penalty imposed u/s 140A(3) r.w.s. 221(1) of the Act. - Decided in favour of assessee
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2020 (3) TMI 1109
Disallowance u/s 36(1)(iii) - interest free advances to its sister concern - diversion of funds - HELD THAT:- Assessee has borrowed interest bearing funds and claimed the corresponding interest as expenditure. It advanced interest free loan to subsidiary concern but has not established the commercial expediency on the transaction with its sister concern. The assessee has not placed any material even before us to prove that the impugned transaction was undertaken on commercial consideration. Therefore,we uphold the disallowance made by the A.O. and sustained by the learned CIT(A) subject to verification as directed by the learned CIT(A). Therefore,the corresponding grounds of the assessee on this issue fail. Addition u/s 40A(3) - Proof of single payment,which is exceeding ₹ 20,000/- - HELD THAT:- Expenditure incurred under the head Pooja expenses , gift purchases for Ayudha pooja,cash purchases,Sivaranjini Contractor ,could be allowed as business expenditure,towards which incurring of cash expenditure could be justified. Therefore,we direct the A.O. to allow these expenses. With regard to payments made under the following heads,Rajshree Associates-labour contractors,Emmkay Associates-labour contractors,Pachyappan-Masonary,Sivaranjini Contractor,Shanugam-centring,since the assessee is not able to establish that these payments did not attract the provisions of section 40A(3) we are of the view that disallowances made by the A.O. and as sustained by the learned CIT(A) under this heads do not require any disturbances and hence,such disallowances are confirmed. Thus,the corresponding grounds are treated as partly allowed on this issue. Donations disallowance u/s 37 - HELD THAT:- We find that the assessee has incurred the impugned expenses wholly and exclusively for the purpose of business and hence,the disallowance made by the A.O is not warranted. Therefore,we direct the A.O to allow the expenses claimed by the assessee under Section 37 of the Act. Corresponding grounds of the assessee are allowed.
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2020 (3) TMI 1089
Money seized in search - seeking order or direction directing the 1st respondent to release and disburse to the petitioner, the amount withheld illegally - HELD THAT:- First respondent had earlier filed appeal before the Judicial First Class Magistrate Court, Pattambi under Section 451 of Cr.P.C and under section 132 of the Income Tax Act, 1961 for getting the custody of the amount seized by the 2nd respondent to the Income Tax Department, which was allowed by the learned Magistrate. It is also equally not in dispute, that aggrieved by the said order rendered by the learned Magistrate, the petitioner has preferred a Crl.Revision Petition which is now pending before the Sessions Court, Palakkad. Since the legality and correctness of the said issue decided by the learned Magistrate in giving custody of the seized amount to the 2nd respondent is now pending consideration before the Sessions Court,even going by the admitted case of the petitioner, it is not right and proper for the petitioner to approach this Court with similar prayers so as to short circuit the hierarchy of remedies available thereunder. In case if the petitioner has any grievances, it is for the petitioner to move the said Sessions Court for final orders. Even thereafter, in case if the petitioner has any legally justiciable grievances thereto, he certainly has various other remedies to challenge the same, including the option of filing an appropriate petition under section 482 of the Cr.P.C before this Court. The matter is pending before the Sessions Court and when further remedies are available for the petitioner, it is not right and proper for this Court to short circuit the said due process and make a frog leap by resorting to proceedings under Article 226 of the Constitution of India. Going by the facts and circumstances of this case, this Court is of the considered opinion that the other prayers in the writ petition including prayers no. 1 and 3, should be entertained by this Court on merits and it is not a fit case to exercise discretionary jurisdiction under Article 226 of the Constitution. In the light of these aspects, the petitioner is bereft of any merits and the same will stand dismissed.
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Benami Property
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2020 (3) TMI 1108
Benami transactions - Pleadings of the respondents is that the money was provided by the father - HELD THAT:- From para 2 of the plaint, it is clear that the respondents/plaintiffs have merely mentioned that the money was provided by the father of the respondent no.1, i.e. Late Govind Singh Tomar. It is nowhere mentioned by the plaintiffs that Govind Singh Tomar had entered into an agreement to purchase the property in the name of plaintiff no.1. Under these circumstances, at the most it can be said that Late Govind Singh Tomar had provided the money to respondent no.1 for entering into an agreement to sell. In the present case also the pleadings of the respondents is that the money was provided by the father. Thus, it is held that merely because the respondent no.1 had taken financial help from his father for making the sale consideration, it would not make the agreement to sell a Benami transaction, so as to push it into the forbidden area of the provisions envisaged under Sections 3 and 4 of the Benami Transactions (Prohibition) Act, 1988. Under these circumstances, this Court is of the considered opinion that the trial court did not commit any mistake by rejecting the application filed under Order VII Rule 11 CPC.
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2020 (3) TMI 1107
Benami Transactions - Whether the sale consideration was paid by the respondent alone? - respondent was father-in-law of the applicant. Applicant and son of the respondent namely Neeraj Kumar were husband and wife. Due to some dispute between them, decree of divorce has been granted in favour of the applicant. Before passing of the decree of divorce a sale deed was executed in favour of the applicant and respondent by which they purchased suit property - HELD THAT:- Since issue whether the property in dispute was purchased as benami transactions and at the time of said purchase what was intention of buyers actual or name lender, can be decided only after considering merits of respective claims of parties on the basis of their evidence. Hence only on basis of Section 4 of Act, entire suit cannot be allowed to fall at preliminary stage. [See also Mridula Singh vs. Brahmdeo Pd. Singh [ 2005 (9) TMI 684 - PATNA HIGH COURT ] Whether the provisions of Section 4(3)(a) of the Benami Transactions (Prohibition Act), 1988 would be applicable to daughter-in-law, since she is not coparcener in Hindu undivided family? - As observed that while considering exemption under Section 4 in respect of Benami Transactions, the existence of fiduciary capacity has to be determined in circumstances of individual cases. In the aforesaid case, it has also been observed that since the daughter-in-law was not holding the property in fiduciary capacity, the prohibition enshrined under Section 4 would apply and the suit for possession at the instance of daughter-in-law would be maintainable. In juxtaposition with the law laid down in the case of Mridula Singh (Supra), there cannot be any iota of doubt that issue regarding maintainability of the counter claim can be well adjudicated by the trial Court by framing an issue on the basis of the evidence led by the parties in respect of Benami Transactions. Thus, this Court comes to the conclusion that there is no illegality or perversity in the impugned order warranting interference of this Court in exercise of its revisional jurisdiction.
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2020 (3) TMI 1106
Benami transaction - the plaintiff failed to prove that money was paid from the fund of the joint family of the plaintiff and defendant No.1 - As urged that the plaintiff failed to prove that money was paid from the fund of the joint family of the plaintiff and defendant No.1. - maintainability of the suit - HELD THAT:- In the instant case when the defendant abandoned the issue of maintainability of the suit on the point of inconsistent plea of title by the plaintiff and again right of tenancy over the self same property, the defendant cannot challenge the maintainability of the suit at the stage of first appeal. Mr. Saha also refers to the decision of this Court in Smt. Minati Sen @ D.P. Sen vs. Kalipada Ganguly [ 1997 (6) TMI 366 - CALCUTTA HIGH COURT] in the said report the respondent raised an issue that both the Courts below did not consider as to whether the defendant/appellant was guilty for damaging the suit property by addition and alteration. This Court found that the said issue was not pressed by the plaintiff/respondent in the trial court and held that when the issue was not pressed by the plaintiff/respondent in the trial court, there was no justification for the appellate court to go into this question and decide the same in favour of plaintiff/respondent. When a party has raised an issue in the trial court and deliberately has abandoned it, he cannot be allowed to raise it again at the appellate stage. Order VII Rule 7 of the Code of Civil Procedure authorizes the appellant to claim a relief in the alternative on the facts stated in the plaint and it is open to him to pray even for inconsistent relief. But it must be shown by the plaintiff that each of such pleas is maintainable. In the instant case, as gone through the plaint time and again. In paragraph 8 of the plaint, the plaintiff/respondent stated as to how the consideration money was paid to purchase the suit property in the name of defendant No.1. In paragraph 12 of the plaint the plaintiff stated that since the suit property stood in the name of the defendant No.1 and in order to avoid future complications the defendant No.1 settled 2/3rd share of the suit property in favour of plaintiff and proforma defendant No.2 at yearly settlement of ₹ 9/- by executing a registered deed of settlement on 10th January, 1955. Thus agreement with the learned Advocate for the respondent that the respondent claimed title in respect of 1/3rd share of the suit property on the basis of the said registered deed of settlement executed by the defendant No.1. Whether finally published Record of Rights in respect of the suit property would disentitle the plaintiff to institute a suit for declaration of title? - In Jharna Ghosal vs. Satyendra Prosad Dhar [ 1978 (1) TMI 178 - CALCUTTA HIGH COURT] held that Section 57B of the said Act did not either expressly or by necessary implication exclude the jurisdiction of civil courts to decide questions of title. No substantial question of law involved in the instant appeal and this appeal is liable to be dismissed on contest, however without cost.
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Insolvency & Bankruptcy
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2020 (3) TMI 1105
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - Time Limitation - HELD THAT:- The Corporate Debtor /Respondent has neither challenged the decree as mentioned earlier nor filed any review till the date of the filing of the petition under Section 7 of the I B Code. It is also clear that the Defendant No.1 to 5 in the said suit were jointly and severally liable to discharge their obligations of the decree above leaving it to the sole discretion of the Plaintiff/Appellant to recover the said amount from any of the said Defendants. Time Limitation - HELD THAT:- The Corporate Debtor /Respondent made a false statement before the Adjudicating Authority, and the Adjudicating Authority had no reason to disbelieve such a statement. The Adjudicating Authority had failed to appreciate that the Corporate Debtor /Respondent had mischievously not placed any record about the alleged Review Application. In the circumstances, the impugned order dated 05th July 2019 regarding the rejection of the Application filed under Section 7 of the I B Code deserves to be rejected. Since all the ingredients of Section 7 of the, I B Code 2016 are satisfied and the Application for initiation of the corporate insolvency resolution process is complete, therefore, the Appeal is allowed.
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2020 (3) TMI 1104
Approval of Final Resolution Plan - section 31 of the IBC - extension of CIRP period - HELD THAT:- The resolution professional has examined the modified plan and has found it to be in compliance with section 30(2) of the IBC read with regulation 38 of the CIRP Regulations. The provision regarding waiver of any liability accruing in respect of minimum alternate tax (MAT) kept in resolution plan originally has been deleted in modified plan. The term of plan is increased from three years to seven years without affecting the feasibility and viability of the plan. The resolution professional Mr. Vikram Bajaj will be the monitoring and supervising agency for implementation of the plan. The remuneration of the monitoring agency shall be ₹ 1,50,000 plus taxes and out of pocket expenses at actual - The corporate debtor will stand amalgamated with the resolution applicant as per the scheme of amalgamation. It is stated that the scheme of amalgamation between Swadisht Oils Pvt. Ltd. (transferor company) and Rajasthan Liquors Ltd. (transferee company) as given in annexure B to modified resolution plan at pages 153-168 is to facilitate the insolvency resolution of transferor company and shall enable continuity of operations of SOPL and enhance its viability, apart from saving employment of existing employees and works. The modified resolution plan submitted by Atyant Capital India Fund-1 is found in conformity of section 30(2) of the Code and the same is approved.
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FEMA
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2020 (3) TMI 1103
Organisation of a political nature as barred from receiving foreign contributions - Sections 5 (1) and 5 (4) of the Foreign Contribution (Regulation) Act, 2010 and Rules 3 (i), 3 (v) and 3 (vi) of the Foreign Contribution (Regulation) Rules, 2011 as violative of Articles 14, 19 (1) (a), 19 (1) (c) and 21 of the Constitution of India - Guidelines for declaration of an organisation to be an organisation of a political nature not being a political party are found in Rule 3 of the Rules - principal challenge of the Appellant-organisation to Section 5 (1) of the Act is on the ground that the terms activity, ideology and programme are vague and have not been defined in the Act which result in conferring unbridled and unfettered power on the executive. Therefore, the Appellant-organisation contended that Section 5 (1) is violative of Article 14 of the Constitution. Section 5 (4) is also challenged on the ground that the authority to whom a representation should be made has not been specified and it is not clear whether the authority would be an independent authority or the Central Government itself HELD THAT:- Where the provisions of a statute are vague and ambiguous and it is possible to gather the intention of the legislature from the object of the statute, the context in which the provisions occur and purpose for which it is made, the doctrine of reading down can be applied - DTC v. Mazdoor Congress [ 1990 (9) TMI 334 - SUPREME COURT] . To save Rule 3(v) from being declared as unconstitutional, the Court can apply the doctrine of reading down . A balance has to be drawn between the object that is sought to be achieved by the legislation and the rights of the voluntary organisations to have access to foreign funds. The purpose for which the statute prevents organisations of a political nature from receiving foreign funds is to ensure that the administration is not influenced by foreign funds. Prohibition from receiving foreign aid, either directly or indirectly, by those who are involved in active politics is to ensure that the values of a sovereign democratic republic are protected. On the other hand, such of those voluntary organisations which have absolutely no connection with either party politics or active politics cannot be denied access to foreign contributions. Therefore, such of those organisations which are working for the social and economic welfare of the society cannot be brought within the purview of the Act or the Rules by enlarging the scope of the term political interests . We are of the opinion that the expression political interests in Rule 3 (v) has to be construed to be in connection with active politics or party politics. Any organisation which habitually engages itself in or employs common methods of political action like 'bandh' or 'hartal', 'rasta roko', 'rail roko' or 'jail bharo' in support of public causes can also be declared as an organisation of political nature, according to the guideline prescribed in Rule 3 (vi). Support to public causes by resorting to legitimate means of dissent like bandh, hartal etc. cannot deprive an organisation of its legitimate right of receiving foreign contribution. It is clear from the provision itself that bandh, hartal, rasta roko etc., are treated as common methods of political action. Any organisation which supports the cause of a group of citizens agitating for their rights without a political goal or objective cannot be penalized by being declared as an organisation of a political nature. To save this provision from being declared as unconstitutional, we hold that it is only those organisations which have connection with active politics or take part in party politics, that are covered by Rule 3 (vi). To make it clear, such of those organisations which are not involved in active politics or party politics do not fall within the purview of Rule 3 (vi). We make it clear that organisations used for channeling foreign funds by political parties cannot escape the rigour of the Act provided there is concrete material. In that event, the Central Government shall follow the procedure prescribed in the Act and Rules strictly before depriving such organisation the right to receive foreign contributions.
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2020 (3) TMI 1102
Violation of provisions of Section 10(6) of the FEMA Act - Responsibility of Authorised person - goods had arrived in India, but the Company failed to submit Bill of Entry and did not take delivery of the goods - goods not released and as such kept in bonded warehouse - defence of the appellant that he could not be made responsible for the stated contravention. For, he became the Managing Director of the Company much later i.e. on 22.10.2001 - HELD THAT:- In the present case, the finding of fact is that the import of goods for which the foreign exchange was procured and remitted was not completed as the Bill of Entry remained to be submitted and the goods were kept in the bonded warehouse and the Company took no steps to clear the same. As a result, Section 10(6) of the FEMA Act is clearly attracted being a case of not using the procured foreign exchange for completing the import procedure. It is also possible to take the view that the Company should have taken steps to surrender the foreign exchange to the authorised person within the specified time as provided in Regulation 6 of the Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 (for short, the FEMA Regulations ) issued by the Reserve Bank of India Contravention referred to in Section 10(6) of the FEMA Act is a continuing actionable offence. If so, the Company and the persons managing the affairs of the Company remain liable to take corrective measures in right earnest. Considering the admitted fact that the appellant took over the management of the Company on 22.10.2001 and was fully alive to the default committed by the Company, yet failed to take corrective steps in right earnest. Notably, being conscious of such contravention, the appellant had sought indulgence of the authorities for more time. Appellant cannot now be heard to contend that no liability could be fastened on him individually. Indeed, regulation 6 of the FEMA Regulations provides for the period within which the foreign exchange ought to be surrendered if the Company was not wanting to take delivery of the goods imported. That, however, does not mean that the contravention ceased to exist beyond the specified period. On the other hand, after the specified period as predicated in regulation 6 had expired, it would be a case of deemed contravention until rectified. It is not the case of the appellant that he is not an officer or a person in charge of and responsible to the Company for the conduct of the business of the Company, as well as, the Company on or after 22.10.2001. Considering the fact that the appellant admittedly became aware of the contravention yet failed to take corrective measures until the action to impose penalty for such contravention was initiated, he cannot be permitted to invoke the only defence available in terms of proviso to subSection (1) of Section 42 of the FEMA Act that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. In the reply filed to the show-cause notice by the appellant, no such specific plea has been taken. We hold that no error has been committed by the adjudicating authority in finding that the appellant was also liable to be proceeded with for the contravention by the Company of which he became the Managing Director and for penalty therefor as prescribed for the contravention of Section 10(6) read with Sections 46 and 47 of the FEMA Act read with paragraphs A-10 and A-11 (Current Account Transaction) of the Foreign Exchange Manual 200304. The first appellate authority and the High Court justly affirmed the view so taken by the adjudicating authority.
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Service Tax
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2020 (3) TMI 1101
Valuation - inclusion of warranty claims in assessable value - reverse charge mechanism - Section 66A of FA - Revenue neutrality - extended period of limitation - It was held that When the Overseas Distributor is establishing the network of Authorized Repairers for carrying out the warranty responsibility of the appellant, indeed, this will satisfy customer care services provided on behalf of the client contained in Sub-Clause (iii) of the definition of Business Auxiliary Service , and would be taxable. HELD THAT:- There are no reason to interfere with the impugned order - appeal dismissed.
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2020 (3) TMI 1100
Valuation - Franchise services - Whether bifurcating the amount of weekly gross sales into the payment of royalty (@ 8% thereof) and the payment towards Franchise Advertisement Fund (@ 4.5% thereof) takes the later value out of the ambit what is called as transaction value/the gross value? - It was held that The amount of weekly gross sales @ 4.5% but for franchise advertisement fund is nothing but the part of gross value of the contract for providing the franchise service and, hence, was equally taxable as 8.5% of the said weekly gross sales is taxable. HELD THAT:- There are no reason to interfere with the impugned order(s) passed by the Tribunal - appeal dismissed.
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2020 (3) TMI 1099
Refund of service tax - rejection on the ground of time limitation - service tax paid on various activities, which were exempt from service tax in terms of Mega Exemption N/N. 25/2012-ST dated 20/06/2012 - HELD THAT:- Every refund claim arises on account of fact that the same was not required to be paid - Reference can be made to the Hon ble Madras High Court decision in the case of ASSISTANT COMMISSIONER OF SERVICE TAX, CHENNAI VERSUS M/S NATARAJ AND VENKAT ASSOCIATES [ 2014 (5) TMI 179 - MADRAS HIGH COURT ] laying down that the refund claim beyond the period of limitation provided under law is totally barred by limitation. Even the fact that the tax was paid under a mistake of law, cannot be adopted for grant of such refund. There are no justifiable reasons to interfere in the impugned order of Commissioner (Appeals) - appeal dismissed - decided against appellant.
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2020 (3) TMI 1098
Club and Association Service - Levy of service tax - advance entrance/enrollment fee collected from prospective members - Mutuality of interest - HELD THAT:- The issue herein is squarely covered in favour of the appellant/assessee by Hon ble Supreme Court in the case of STATE OF WEST BENGAL ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE ORS. VERSUS M/S. RANCHI CLUB LTD. [ 2019 (10) TMI 160 - SUPREME COURT] and also by the Hon ble Jharkhand High Court in the case of RANCHI CLUB LTD. VERSUS CHIEF COMMISSIONER OF CENTRAL EXCISE SERVICE TAX [ 2012 (6) TMI 636 - JHARKHAND HIGH COURT] where it was held that from 2005 onwards, the Finance Act of 1994 does not purport to levy service tax on members clubs in the incorporated form. Thus, there being mutuality of interest between the club and its members, there is no transfer of ownership of the service - appeal allowed - decided in favor of appellant.
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Central Excise
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2020 (3) TMI 1097
Maintainability of petition - non-compliance with the requirement of pre-deposit - Section 35F of the Central Excise Act, 1944 - HELD THAT:- Today, Mr. Jorgay Namka, learned counsel for the petitioner has submitted that the petitioner is not in a position to pay the requisite amount in terms of Section 35F of the Act - If that be the position, we have no alternative but to dismiss the IA. Application dismissed.
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2020 (3) TMI 1096
Recovery of dues - sick company - Wrongful adjustment of sanctioned refund - demand of interest - relevant period starting from 19 March, 2017 (expiry of three months from the date of the order dated 20 December, 2016 passed by the Tribunal) till the date of payment of refund amount or not - HELD THAT:- It is not possible to accept this submission of the learned Authorized Representative of the Department. As noticed by the Commissioner (Appeals), the dues pertaining to the orders dated 18 October 2001 and 23 February 2001 confirming the demands, were not disclosed by the Department or the earlier management to the BIFR and the same were not considered in the scheme sanctioned by BIFR. The BIFR had also by order dated 22 May, 2002 protected the management from recovery of dues which were not disclosed by the old management or not provided for in the package approved by the BIFR. It is not the case of the Department that the dues pertaining to the aforesaid two orders confirming the demands had been disclosed by the Department or the earlier management to the BIFR. The proceedings before the BIFR had not been assailed before any appellate forum. Appeal dismissed.
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CST, VAT & Sales Tax
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2020 (3) TMI 1095
Filing of the appeals before statutory authorities and recovery of dues under various laws in the situation of outburst of Corona Virus pandemic - HELD THAT:- This present scenario of outburst of deadly corona virus is very precarious and sensitive, as the lawyers and the staff rendering assistance to this Court and the Judges are vulnerable, thus in order to prevent such rampant of spread by taking preventive measures, I deem it appropriate to issue general directions to the departments concerned like the banks, financial institutions, Income tax authorities, authorities dealing with the erstwhile KVAT, GST, recovery of tax on motor vehicles and building tax to defer the recovery proceedings or coercive measures till 06.04.2020. In order to overcome the apprehension that this general order may cause impediment or hindrance to persons who are willing to opt for the Amnesty Scheme, it is made clear that this order will not be an impediment for any of such defaulters to avail the Amnesty scheme as and when such scheme is promulgated or in vogue. It is also made clear that the borrowers of the bank, if want to pay off the dues of the bank, it will be open to them to abide by any of the RBI directives or any other directive which is likely to come into place de hors this order - Similarly, defaulters of GST, KVAT, Building tax, Motor Vehicles tax etc. who are willing to pay the demanded amount subject to certain conditions which the department would have fixed within their power to relax or otherwise, would not be bound by this order. In cases wherein tax authorities are required to complete the assessment proceedings before 31.3.2020, they can be deferred subject to the order of this Court but it is made clear that the assessees would not raise the objection of limitation - The adjudicating authorities already seized of the proceedings and communicated for appearance on a particular date there is likelihood of the party may be handicapped in not approaching on a fixed date in view of the present situation. In such circumstance, the adjudicating authorities are directed not to pass any adverse order till 06.04.2020. The Registry is directed to list all the matters pending in this regard batch-wise post 06.04.2020.
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2020 (3) TMI 1094
Principles of natural justice - opportunity to cross-examine denied - difference on account of certain inter-state transaction reflected in the return as well as the details available from the check post - presumption of certain facts - Section 114(g) of the Indian Evidence Act - HELD THAT:- Pith and substance of the facts revealed, which are not being mentioned again in order to avoid repetition would reveal that the petitioner had been afforded an opportunity to crossexamine the witnesses. In case the other evidence which has been sought are not produced, the petitioner can always derive the benefits of provisions of Section 114(g) of the Indian Evidence Act. Provisions of Section 114(g) of the Indian Evidence Act enables the authority or the court to presume existence of certain facts. The petitioner can always take the benefit of such provisions at the relevant point of time by making submissions in an appropriate forum and competent authority but not through the process of this Court, as it appears to be a adoption of a dilatory tactics. Petition dismissed.
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2020 (3) TMI 1093
Maintainability of petition - non-compliance with the condition of pre-deposit - non-application of mind - HELD THAT:- The Tribunal, after considering the records relating to assessment, passed Ext.P2 order dated 29.03.2010, wherein the Tribunal found that both, the contentions raised by the assessee and the arguments put forth by the Revenue, have not been considered by the authorities below - The Tribunal therefore remanded the matter solely for the purpose of giving the assessee and the Revenue an opportunity to reiterate their contentions with supporting evidences and to enable the assessing authority to pass a speaking order considering all the aspects. A reading of Ext.P9 would show that the Fast Track Assessment Team, after narrating the factual sequences, only recorded the contentions of the assessee - The manner in which the Fast Track Assessment Team has passed Ext.P9 order is not justifiable. The remand as per Ext.P2 order by the Tribunal was for the sole requirement to consider and meet the objections raised by the petitioner. While the fact being so, the 3rd respondent-Fast Track Assessment Team could not have passed an order in the nature of Ext.P9, without answering the contentions raised by the petitioner. In such circumstances, Ext.P9 order is liable to be set aside. The case is remitted to the 3rd respondent for reconsideration.
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2020 (3) TMI 1092
Levy of Interest u/s 24 (3) of TNVAT Act - incorrect availment of deferral for the assessment years 2001-02 and 2002-03 - adequate reasons for levy of interest given or not - HELD THAT:- This Court, in order to give an opportunity, by treating the impugned orders as show cause notices, directs the petitioner to submit the required documents to correlate the production figure before the authority / respondent, within a period of four weeks from the date of receipt of a copy of this order - The respondent shall consider the same and pass appropriate orders afresh. Petition disposed off.
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2020 (3) TMI 1091
Principles of Natural Justice - Validity of assessment order - main ground of attack by the petitioner is that no opportunity was granted to the petitioner for production of documentary evidence before the authority for passing appropriate orders - HELD THAT:- Admittedly, the cause of action for issuing the pre-revision notices was on the basis of the proposal submitted by the Enforcement Wing Officials, pursuant to an inspection conducted in the place of business of the petitioner. When the petitioner submitted their objections to the pre-revision notices, the Assessing Officer has to independently adjudicate the matter and he shall not be influenced by the directions issued by the Enforcement Wing Officials. But he has not done so in this case. Further, no reasonable opportunity was provided to the petitioner for production of necessary documentary evidence before the authority for passing appropriate orders, as per Section 27(2) of the TNVAT Act. This Court is inclined to set-aside the assessment orders dated 29.10.2015 and are set-aside accordingly. The matters are restored to the file of the Assessing Officer / first respondent - petition allowed by way of remand.
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2020 (3) TMI 1090
Audit of the business operations of the petitioner - Section 64 (4) of the TNVAT Act - Whether the inspection done by the second respondent, who is below the rank of Commissioner is against the provisions of law? - HELD THAT:- Section 64 (4) of the Act empowers the Commissioner to order for audit of any registered dealers and such audit is required to be done by an Officer not below the rank of Deputy Commercial Tax Officer and such responsibility cannot be delegated to others or usurped by others - In the case on hand, the Joint Commissioner (CT) Enforcement I, who is subordinate to the Commissioner, has ordered for audit, which is against the provisions of the Act. Based on the same, the first respondent has passed the impugned assessment orders, which are as rightly contended by the learned counsel for the petitioner, liable to be set-aside. This Court is inclined to set-aside the impugned assessment orders and remit the matters back to the authority, for passing orders afresh, after providing due opportunity to the petitioner, for production of necessary accounts as well as filing proper objections - Petition allowed by way of remand.
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