TMI Tax Updates - e-Newsletter
March 4, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Highlights / Catch Notes

• GST:

  Entitlement to interest on IGST refund - In refund application petitioner has only claimed the integrated tax and not the interest on the same - The High court referred to Section 56 of the CGST/DGST Act and circular issued by CBEC, which mandates interest payment if refunds are not granted within 60 days from the date of application. - The court concluded that interest under Section 56 is mandatory and automatically payable if refunds are not granted within the stipulated period, irrespective of the claim made by the petitioner in the refund application.
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• GST:

  Cancellation of GST registration of the petitioner with retrospective effect - The High court observed that cancellation with retrospective effect should be based on objective criteria and not merely due to non-filing of returns. - The consequences of retrospective cancellation, such as denial of input tax credit to customers, were considered. - Both the petitioner and the department sought cancellation of GST registration, albeit for different reasons. - The impugned order was modified, and the registration was treated as cancelled from the date of the show cause notice, i.e., 11.07.2023.
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• GST:

  Validity of SCN - validity of extension of outer time limit provided in the statute for issuance of notice under sub-Section (2) of Section 73 of the GST Act - The court considers the jurisdictional issue and the prima facie case made by the petitioner but does not stay the notice. The court orders that no final order shall be passed without the leave of the court.
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• GST:

  Validity of Conclusion of proceedings u/s 73 of the Central Good and Service Tax Act 2017 without considering the reply filed by the petitioner - The court noted that the impugned order did not adequately address the petitioner's response. Despite the petitioner's detailed explanation, the order merely stated that the reply was not comprehensive and failed to consider the merits of the petitioner's explanation. - Consequently, HC set aside the impugned order and remitted the matter to the proper officer for re-adjudication.
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• GST:

  Condonation of delay in filing appeal - The petitioner argued that due to health issues, specifically septic shock, and subsequent challenges in consulting with the relevant authority, they were unable to file the appeal within the prescribed 90-day period. - The High Court directed the Appellate Authority to accept and address the appeal on its merits, provided it was filed within ten days from the receipt of the court's order.
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• Income Tax:

  Scope of Rectification u/s 254 - Power of ITAT - valuation of a bundle of sports rights purchased by the petitioner - Despite detailed expert opinions and submissions by the petitioner, the Tribunal opted for a blanket remand to the TPO for fresh valuation, without addressing key issues raised by the petitioner. - The High Court referenced previous judgments, emphasizing the duty of the Tribunal to consider all factual and legal issues before remanding cases. - The Court highlighted the mistake apparent from the record, emphasizing that the Tribunal's failure to address fundamental submissions made by the petitioner warranted rectification of the order. - Matter restored back before the Tribunal.
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• Income Tax:

  Period of limitation to issue notice for reopening of assessment u/s 149 - The High court emphasized the principle that the validity of a notice u/s 148 must be assessed based on the law in force at the time the notice is issued. It was determined that under the amended provisions, and considering the first proviso to Section 149(1) of the Act, the time limit for issuing a notice for AY 2014-15 had expired on 31st March 2021, rendering the impugned notice dated 31st July 2022 as issued beyond the period of limitation. The court also noted that the fifth proviso to Section 149, which allows for the exclusion of certain periods in computing the limitation period, did not salvage the impugned notice from being time-barred. As a result, the petition was allowed in favor of the petitioner.
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• Income Tax:

  Reopening of assessment u/s 147 - reasons to believe - The High court observes that all the issues raised in the notice for reopening were indeed subject to discussion during the assessment proceedings. Despite the absence of explicit mention in the assessment order, the court holds that the Assessing Officer had considered the petitioner's submissions on these matters. As a result, the court concludes that the reopening of the assessment is merely based on a change of opinion, which does not constitute a valid reason to believe that income has escaped assessment.
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• Income Tax:

  Validity of draft assessment order u/s 144C(1) - difference in numbers in closing and opening stock of Lingerie - The show cause notice lacked specific quantification of proposed additions to income - The High court directed that the draft assessment order be treated as a show cause notice, allowing the petitioner to submit a reply within three weeks. The assessing officer was instructed to provide a reasonable opportunity, including a personal hearing through video conferencing, before issuing a fresh draft assessment order.
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• Income Tax:

  Waiver of interest u/s 234A, 234B and 234C - Interest assessed on account of non-payment of advance tax - prayer for waiver of Interest declined as that late assessee (Husband of the Petitioner) had furnished incorrect particulars in Form 15-H in order to avoid the payment of taxes - The court concluded that (Late) assessee's actions, including filing returns promptly upon receiving notices and depositing tax liabilities, did not constitute voluntary filing without detection. However, it recognized his age and illiteracy as relevant factors constituting unavoidable circumstances. - The court quashed the order of the Chief Commissioner, waived the interest demanded, and set aside subsequent proceedings under Section 140 of the Income Tax Act.
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• Income Tax:

  Income deemed to accrue or arise in India - receipts of subscription fees - The ITAT had found that it did not involve the transfer of copyright or the provision of technical or consultancy services that make available technical knowledge or processes to the subscriber. - The High court agreed with the Tribunal's decision, emphasizing that the provision of access to a legal database does not constitute the rendering of any technical or consultancy service that would make technical knowledge, experience, skill, know-how, or processes available to the subscriber, thereby not falling within the ambit of FTS as defined by the relevant DTAA and the Act.
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• Income Tax:

  Reopening of assessment u/s 147 - change of opinion - mechanical satisfaction - Admission of additional income by Senior Executive of the petitioner during the search - variation in additional income admitted - The High Court upheld the justification for reopening provided by the respondents, highlighting the availability of fresh material and alleged failures by the petitioners to fully disclose material evidence. Objections regarding change of opinion and mechanical satisfaction were rejected.
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• Income Tax:

  Unexplained cash credit u/s 68 - bogus share capital/share premium - The tribunal noted that the appellant's company had witnessed significant growth over the years, leading to a substantial increase in the value of its shares. The ITAT also considered the financial status of the share subscribers, who demonstrated ample net worth to justify their investments. - Furthermore, the ITAT emphasized that the provisions of Section 56(2)(viib) of the Act, relating to the valuation of shares, were not applicable to the assessment year in question. It was concluded that the addition of the unexplained cash credit was unjustified.
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• Income Tax:

  Bogus loss from trading in shares/securities - ITAT observed that, despite the appellant's submission of evidences during the assessment proceedings, the assessing officer did not conduct any inquiry or investigation and solely relied on the statement of the director of the appellant company, recorded during a summon under section 131 of the Act. However, this statement was retracted by filing an affidavit, highlighting its lack of evidentiary value without corroborative evidence. - Consequently, the Tribunal allowed the appeal, directing the assessing officer to delete the addition on account of the rejection of loss.
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• Income Tax:

  Scope of rectification u/s 154 - Allowing the rectification application CIT(A) admitted the claim of expenditure - The ITAT concluded that the question of comparables in the appellant's business line involved subjective adjudication and detailed inquiries, which were beyond the scope of rectification proceedings under Section 154. Citing the precedent set by the Supreme Court, the ITAT emphasized that rectification is meant for correcting apparent mistakes on record, not for conducting detailed investigations. - The Revenue's appeal was allowed on the grounds that the appellant's rectification was not maintainable, as the Assessing Officer's findings had not been reversed by the NFAC.
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• Income Tax:

  Eligibility for exemption u/s 10(23C)(iiiad) - claim not made in return of income - failure to furnish audit report in Form 10B - The Tribunal found that the institution, a society providing education, had spent more than 85% of its receipts towards charitable purposes. Despite a belated submission of the audit report, the institution was eligible for exemption under section 10(23C)(iiiad) of the Act. Consequently, the appeal was allowed, granting the institution the exemption it sought.
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• Income Tax:

  Addition u/s 68 - unsecured loans Addition u/s 2(22)(e) - Deemed dividend - The Tribunal found merit in the Assessee's submissions, noting that all relevant documents were submitted to prove the legitimacy of the transaction. The addition under section 68 was reversed, and the AO was directed to delete the same. However, the addition under section 2(22)(e) was upheld, as the Assessee failed to provide substantial evidence to support the contention that the loan from M/s KAJ Infrastructure Pvt. Ltd. was for business purposes.
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• Income Tax:

  Disallowance of weighted deduction u/s. 35(2AB) - research and development (R&D) expenditure - The Income Tax Appellate Tribunal (ITAT) considered the arguments presented by both parties and examined the relevant documentation, including Form-3CM and Form-3CL, which certified the R&D expenditure incurred by the assessee. - The ITAT allowed the appeals filed by the assessee. It directed the Assessing Officer to allow the actual expenditure incurred for in-house R&D facilities, as certified by the Ministry of Science and Technology, without any weighted deduction.
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• Income Tax:

  Revision u/s 263 - Genuineness of expenditure (Commission paid) - The ITAT found that the commission agreement was genuine, payments were made through banking channels, and tax was deducted at source, supporting the legitimacy of the transaction. Despite the substantial amount of commission paid, the ITAT emphasized that the genuineness of the transaction should be verified, which was found to be in order. The discrepancy in GST calculations and reported figures was deemed irrelevant by the ITAT. - The ITAT allowed the appeal of the assessee, quashing the order passed by the Ld. Pr. CIT under Section 263.
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• Income Tax:

  Revision u/s 263 - unexplained cash deposits - onus to prove - The Pr. CIT found the assessment order erroneous and prejudicial to the revenue's interests due to inadequate verification. - The Tribunal upheld the Ld. Principal Commissioner's decision, stating that the AO had not adequately examined the sources of cash deposits nor obtained relevant details or evidence before accepting explanations. The appellant failed to provide documentary evidence supporting claims, and the AO's assessment lacked thorough inquiry.
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• Income Tax:

  Rectification u/s 154 - under-assessment of income qua the foregoing depreciation/additional depreciation issue(s) - The Tribunal considered the Revenue’s contentions but found no merit in them. It was observed that the rectification proceedings under section 154 initiated by the Assessing Officer were not sustainable, as they involved a detailed re-computation of the assessee’s depreciation claims, which went beyond rectifying apparent mistakes on record. - In light of the decision of Supreme Court, the Tribunal dismissed the Revenue’s appeal, affirming the CIT(A)’s decision.
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• Income Tax:

  Set off of brought forward business loss - mistakes in previous years for not claiming benefit of set-off - 8 years time limit provided in the statute - The ITAT found that the assessee had a legitimate assessed business loss from AY 2005-06, which was not set off against the business income in AY 2008-09 and 2009-10 due to an accountant's mistake. However, under Section 72 of the Act, such unadjusted business losses can be carried forward and set off against business income in up to 8 subsequent assessment years. The Tribunal concluded that the assessee was indeed eligible to set off the brought forward business loss against the business income of AY 2010-11, as it falls within the 8-year time limit.
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• Income Tax:

  Depreciation on landed property - disallow depreciation on land cost and added back to the total income - The ITAT held that Depreciation on landed property is not allowable under the Income Tax Act, 1961.
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• Income Tax:

  Disallowance of depreciation on goodwill created in the scheme of amalgamation - The ITAT allowed the claim for depreciation on goodwill, aligning with the precedent set in KIFS International LLP [2023 (9) TMI 1439 - ITAT AHMEDABAD], emphasizing that goodwill arising from amalgamation, sanctioned by the High Court, qualifies as an intangible asset under section 32(1) of the Act. The tribunal rejected the AO's view that the amalgamation scheme was a colorable device, noting the lack of objection from the Income Tax Department during the amalgamation process and the approval by the High Court.
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• Customs:

  Import of balloons for party decorations, pumps and balloons stands - Compliance with Toys (Quality Control) Order, 2020 - The tribunal observed that the clarification from DPIIT regarding the exclusion of holiday decorations from the scope of the Order is crucial in this determination. - The appellant has consistently from the very beginning contended that they are engaged in the business of decorations using balloons, and the goods (balloons) imported were intended to be used only for decoration. The department has not been able to establish otherwise. - The CESTAT sets aside the impugned order and directs the release of the goods to the appellant, without the imposition of redemption fines.
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• Customs:

  Imports crude edible oil - crude palm oil - Whether Social Welfare Surcharge (SWS) is leviable when the Basic Customs Duty (BCD) is exempted. - The tribunal held that since the BCD is exempted, and as SWS is calculated at the rate of 10% on the aggregate of duties, taxes, and cesses levied and collected, which in this case is nil, SWS is also nil. The tribunal found no provision for calculation of SWS on notional BCD when actual BCD is exempted.
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• Customs:

  Benefit under the SHIS Scheme (Status Holder Incentive Scheme) - Import of Turning Cradle and Blade Shell Lifting Device - Goods were considered as not falling within the category of "relating to plastic sector" - The Customs department initially accepted the goods as used but later contradicted this finding based on revised reports from Shri N J Lalwani. (Valuer) - The Tribunal found merit in the impugned order, stating that all necessary documents were provided to the appellant for cross-examination. - However, in the interest of justice, the Tribunal allowed one last opportunity for the appellant to cross-examine Government approved valuer and remanded the matter back to the Commissioner for fresh adjudication.
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• Customs:

  Rejection of application seeking amendment of the bill of entries u/s 149 - mis-declaration of the HSN Code due to clerical error - The appellant argued that the mis-declaration was a mistake, and they had been classifying their goods correctly before and after the incident. - The Tribunal found merit in the appellant's argument and ordered the Customs Authorities to amend the Bill of Entries under Section 149 of the Customs Act. The appellant was directed to deposit the requisite fee for the amendment.
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• Customs:

  Application for cancellation of bail granted to the applicant / accused - mis-declaration of manufacturing year of the crane imported - arrested u/s 104(1) for the offence committed u/s 132 and 135(1)(a) - After careful consideration, the Court decides that there are no grounds to cancel the bail granted to the accused. They find that the accused has cooperated with the investigation and has not breached any bail conditions. Therefore, the application for bail cancellation is rejected, and the matter is disposed of accordingly.
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• Indian Laws:

  Automatic Vacation of the interim order / Stay Order after six months - judicial legislation or not - The Supreme Court held that interim orders cannot automatically expire due to the lapse of time. Fundamental principles of natural justice require that any modification or vacation of such orders must occur through judicial examination, ensuring fairness to all parties involved. - The Court highlighted that while Article 142 empowers the Supreme Court to pass orders for doing complete justice, it cannot be used to annul lawful judicial orders en masse without considering individual case merits and the rights of those not present before the Court.
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• IBC:

  Eligibility of ex-promoter/Corporate Debtor u/s 29A read with Section 240A of the IBC to submit a resolution plan claiming the benefits of MSME - rejection of Resolution Plan. - The NCLAT held that obtaining MSME status post-CIRP commencement does not disqualify a corporate debtor from submitting a resolution plan under Section 29A of the IBC. - The NCLAT found that the Adjudicating Authority overstepped its jurisdiction by questioning the MSME status of the corporate debtor, as the authority to grant or revoke MSME registration lies solely with the competent authority under the MSME Act.
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• IBC:

  Exclusion of appellant from the Committee of Creditors (CoC) - The Resolution Professional deemed Rare ARC (appellant) akin to a related party, thus ineligible for CoC participation - assignment of term loan in bad faith - The NCLAT found that the assignment from SEFL to Rare ARC was made under suspicious circumstances, with SEFL still holding a significant interest in the loan through security receipts. Moreover, allegations regarding the funding of the assignment transaction by SIFL and SEFL raised doubts about the bona fide nature of the assignment. Consequently, Rare ARC's appeal was dismissed, affirming its exclusion from the CoC.
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• IBC:

  Execution of Conveyance deed - Home Buyers / Commerical property - entitlement to receive the payment of rent as assured in the MoU entered with the allottees and the erstwhile management. - The Adjudicating Authority refused the appellant's prayer for the execution of a Conveyance Deed, stating that there was no specific prayer made in the application for this relief. Additionally, the Authority held that during the CIRP, the RP is responsible for managing the affairs of the Corporate Debtor, including decisions regarding the execution of contracts. The NCLAT also cited a previous judgment indicating that the rights of homebuyers cannot be adversely affected during CIRP, but the manner of protection depends on the RP's decisions.
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• PMLA:

  Rejection of bail of the applicant - co-accused - accusation is that the applicant has misused his authority as despite the land falling within CRZ- III in respect of which no permission could have been granted, the applicant knowingly proceeded to grant such permission - The High court grants bail to the applicant, considering the lesser degree of his involvement compared to the prime accused.
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• PMLA:

  Money Laundering - Limitations of Enforcement Directorate's Powers under PMLA - The High Court found no overreach in the ED's actions, stating that the ED was within its rights to share information with the police for further action, and that the communication did not amount to a directive to register an FIR but was merely sharing of information based on credible evidence of illegal activities. - The Court found that the FIR was based on predicate offenses cognizable under the IPC, and the subsequent actions by the ED and police were in accordance with their statutory duties.
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• Service Tax:

  GTA - transportation of goods - whether sale is not mandatory in relation to the word “goods” for purpose of levy of service tax? - The Tribunal determined that the components manufactured and transported by the appellant are considered "goods" under the Finance Act, 1994, and therefore subject to service tax. They emphasized that there is no legal distinction between a private factory and a government body regarding the payment of service tax for Goods Transport Agency (GTA) services.
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• Central Excise:

  CENVAT Credit - though the tools and moulds purchased by them were continue in use for manufacture of excisable automobile components however same has been shown as sold on record on VAT-able invoice issued - The tribunal held that the appellant is entitled to avail Cenvat credit on the tools and moulds as they were not physically removed from their factory. Therefore, the impugned order demanding central excise duty from the appellant is set aside, and the appeal is allowed.
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• Central Excise:

  Issuance of second SCN without adjudicating first SCN - Valuation - the Tribunal found merit in the Appellant's arguments. It noted that the Department had pursued two show-cause notices for the same period, despite a previous adjudication favoring the Appellant and despite legal precedent prohibiting such actions. As a result, the Tribunal set aside the order passed by the Commissioner (Appeals) and allowed the appeal, granting consequential relief to the Appellant.
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• VAT:

  Time Limitation for reopening of asse - The High Court observed that since no returns were filed by the petitioner in time or thereafter as is prescribed under Rule 7 of the TNVAT Rules, 2007, it has to be construed that the Impugned Assessments dated 23.12.2019 is the first assessment passed by the Assessing Officer under Section 22(4) of the TNVAT Act, 2006. - The limitation for reopening the Assessment under Section 27 of the TNVAT Act, 2006 will apply only six years thereafter. Therefore, there is no merits in the challenge to the Impugned Order. - The court dismisses the writ petition, upholding the validity of the notices and assessment orders.
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Articles

• Share valuation fees claimed as business expenditure. CIT(A) allowed under head capital gains. Ground not pressed in quantum appeal by assessee. Penalty imposed deleted. – case of unnecessary litigation by revenue against Tata Industries Ltd.
• SERVICE TAX: TAXABILITY OF NOTIONAL INTEREST
• Assessing Officer must consider the relevant aspects before passing an orders
• Goods Transport Agency (GTA)
• Writ jurisdiction cannot grant a waiver of statutory pre-deposit condition for filing appeal

Notifications

• DGFT

• 65/2023 - dated 1-3-2024 - FTP
  Export of Onions (under HS code 0703 10 19) to UAE

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• GST - States

• S.O. 15/P.A.5/2017/S.148/2024 - dated 14-2-2024 - Punjab SGST
  Special Procedure to be followed by the Electronic commerce operator who is required to collect tax at source u/s 52 Punjab Goods and Services Tax Act, 2017

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• S.O. 14/P.A.5/2017/S.148/2024 - dated 14-2-2024 - Punjab SGST
  Special Procedure to be followed by the Electronic commerce operator as required to collect tax at source u/s 52 in respect of goods supplied through it by the person paying tax u/s 10

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• S.O. 13/P.A.5/2017/S. 23/2024 - dated 14-2-2024 - Punjab SGST
  Seeks to waive the requirement of mandatory registration under section 24(ix) of PGST Act for person supplying goods through ECOs, subject to certain conditions

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• S.O. 12/P.A.5/2027/S. 158A/2024. - dated 14-2-2024 - Punjab SGST
  Seeks to notify “Account Aggregator” as the systems with which information may be shared by the common portal under section 158A of the PGST Act, 2017

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• S.O. 11/P.A.5/2017/S. 148/2024 - dated 14-2-2024 - Punjab SGST
  Seeks to notify a special procedure for condonation of delay in filing of appeals against demand orders passed until 31st March, 2023

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• S.O. 10/P.A.5/2017/S. 148/2024 - dated 14-2-2024 - Punjab SGST
  Amendment in Notification No. S.O.93/P.A.5/2017/S.148/2017, dated the 28th November, 2017

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• Income Tax

• 26/2024 - dated 1-3-2024 - IT
  Exemption from specified income U/s 10(46) – 'Karnataka Urban Water Supply and Drainage Board', notified

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• 25/2024 - dated 1-3-2024 - IT
  Exemption from specified income U/s 10(46) – 'Uttar Pradesh Real Estate Regulatory Authority', notified

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News

• Civil Accounts Day 2024 celebrated in New Delhi to mark the 48th foundation day of Indian Civil Accounts Service (ICAS)

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• Financial Intelligence Unit-India (FIU-IND) imposes penalty of Rs. 5,49,00,000 on Paytm Payments Bank Ltd with reference to violations of its obligations under PMLA

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Case Laws:

• GST

• 2024 (3) TMI 118
  Entitlement to interest on IGST refund - case of Revenue is that petitioner has only claimed the integrated tax and not the interest on the same and therefore he is not entitled for the grant of interest on the tax amount - HELD THAT:- Section 56 of the CGST/DGST Act deals with the interest on delayed refunds. It provides that if any tax ordered to be refunded under sub-section (5) of Section 54 is not refunded within 60 days from the date of receipt of application under sub-section (1) of that Section, interest at the rate of 6% shall be payable in respect of such refund from the date immediately after the expiry of 60 days from the date of the receipt of the application till the date of refund of such tax. Payment of interest does not depend on the claim made by petitioner and therefore cannot be denied on the ground of waiver on the claim of interest in FORM GST-RFD-01. Moreover, the question of payment of grant of interest arises only if the refund is not granted within 60 days from the date of receipt of application. No justification has been shown by the respondent for delay in payment of refund within the stipulated period. Thus, even though, the petitioner may not have claimed interest in his refund applications, his claim of interest cannot be denied under Section 56 of the Act as the same is mandatory and payable automatically in terms of the provisions of the Act. The petitioner is entitled to statutory interest at the rate of 6% starting from the date immediately after the expiry of sixty days from the date of receipt of refund applications till the date on which the refund is credited to the bank account of the petitioner - Respondent is accordingly directed to process the refund of interest and credit the same into the account of the petitioner within four weeks - petition disposed off.

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• 2024 (3) TMI 117
  Application seeking cancellation of GST registration of the Petitioner rejected - Vague/bereft of details order - violation of principles of natural justice - HELD THAT:- The order dated 03.01.2024 does not qualify as an order rejecting the application seeking cancellation of GST registration as the same is bereft of any details or reasons and accordingly the same cannot be sustained. The application of the Petitioner seeking cancellation is allowed. The GST registration of the Petitioner shall now be treated as cancelled with effect from 21.11.2023 i.e., the date when the petitioner applied for cancellation of GST registration. Petitioner shall comply with the requirements of Section 29 of the Central Goods and Services Tax Act, 2017 and furnish the requisite details. Petition disposed off.

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• 2024 (3) TMI 116
  Violation of principles of natural justice - Validity of confirmation of demand of GST - impugned order does not take into consideration the replies submitted by the petitioner and is a cryptic order which merely records that reply was found not satisfactory and devoid of merits - demand alongwith penalty - HELD THAT:- The impugned order records that petitioner has not furnished the requisite details. Proper Officer is directed to intimate to the petitioner details/documents, as maybe required to be furnished by the petitioner within a period of one week from today. On such intimation being given, petitioner shall furnish the requisite explanation and documents within one week thereof. Thereafter, the Proper Officer shall re-adjudicate the show cause notice within a period of two weeks after giving an opportunity of personal hearing. Petition disposed off.

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• 2024 (3) TMI 115
  Cancellation of GST registration of the petitioner with retrospective effect - SCN does not put the petitioner to notice that the registration is liable to be cancelled retrospectively - petitioner had no opportunity to even object to the retrospective cancellation of the registration - Violation of principles of natural justice - HELD THAT:- In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period - it is not considered apposite to examine this aspect but assuming that the respondent s contention in 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. It may be further noted that both the Petitioners and the department want cancellation of the GST registration of the Petitioner, though for a different reason. In view of the fact that Petitioner does not seek to carry on business or continue the registration, the impugned order dated 22.08.2023 is modified to the limited extent that registration shall now be treated as cancelled with effect from 11.07.2023 i.e., the date when the Show Cause Notice was issued - petition disposed off.

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• 2024 (3) TMI 114
  Validity of SCN - validity of extension of outer time limit provided in the statute for issuance of notice under sub-Section (2) of Section 73 of the GST Act - HELD THAT:- Taking into consideration the fact that a jurisdictional issue has been raised and a prima facie case has been made out by the petitioner, however, considering the fact that fiscal policy of the State is involved and the fact that a co-ordinate Bench of this Court, by order dated 13th February 2024, in an identical matter had been pleased to pass a limited interim order, it is not proposed to stay the impugned show cause notice, the respondents shall continue with the impugned proceeding but no final order shall be passed without the leave of this Court. The issue involved in the writ application would be decided upon exchange of affidavits - Let affidavit-in-opposition be filed within a period of 4 weeks from date. Reply, if any, thereto be filed within two weeks thereafter - Liberty to mention after expiry of the period for exchange of affidavits.

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• 2024 (3) TMI 113
  Validity of Conclusion of proceedings u/s 73 of the Central Good and Service Tax Act 2017 without considering the reply filed by the petitioner - creation of demand against the petitioner - petitioner had, on account of an error, claimed Integrated GST credit instead of CGST and SGST credit which was a mere bona fide clerical error - HELD THAT:- The proper officer had to at least consider the reply on merits and then form an opinion whether the explanation was sufficient or not. He merely held that since no payments has been made within 30 days of the issue of notice by you and no proper reply/explanation has been received which ex-facie shows that proper officer has not even looked at the reply submitted by the petitioner. The Impugned order being bereft of any reasoning is not sustainable and is set aside - the matter is accordingly remitted to the proper officer to re-adjudicating the Show Cause Notice after giving an opportunity of personal hearing to the petitioner - petition allowed.

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• 2024 (3) TMI 112
  Condonation of delay in filing appeal - Imposition of penalty and interest under Section 73(9) and Section 73(7) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Under Section 107 of the CGST Act, the Appellate Authority does not have the power to condone delay beyond 120 days. In this case, the period of further delay is only 24 days and the petitioner has provided cogent reasons to explain such delay. It is pertinent to note that the petitioner has paid the entire tax liability and the proposed appeal is limited to penalty and interest. Therefore, the Appellate Authority is directed to receive and dispose of the appeal on merits if the appeal is received within a maximum period of ten days from the date of receipt of a copy of this order. Petition disposed off.

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• Income Tax

• 2024 (3) TMI 111
  Taxable income deemed to accrue in India - income from supply of CAS and middleware products to Indian customers - whether fall under the 'royalty' as defined under Section 9(1)(vi) of the Income Tax Act, 1961 ( the Act ) and Article 12(3) of the India-Swiss DTAA. As decided by HC [ 2022 (9) TMI 1563 - DELHI HIGH COURT] questions of law as covered by the decision of Engineering Analysis Centre of Excellence Pvt. Ltd. [ 2021 (3) TMI 138 - SUPREME COURT] wherein held 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. HELD THAT:-There is a gross delay of 325 days in filing the Special Leave Petition. Moreover, the issues which arise in this case are covered by the judgment of this Court in Engineering Analysis Centre of Excellence Pvt. Ltd. v. Commissioner of Income Tax (supra) In the circumstances, the Special Leave Petition is dismissed both on the ground of delay as well as on merits. Pending application(s) shall stand disposed of.

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• 2024 (3) TMI 110
  Scope of Rectification u/s 254 - Power of ITAT - valuation of a bundle of sports rights purchased by the petitioner - As per assessee order dated 25th November 2021 of the Tribunal passed u/s 254(1) did not deal with issues such as terminal value, comparing actual figures with projections, availability of CUP method, department s own action of use of terminal value in another transaction during the AY 2009-10, etc. even after recording petitioner's submission, petitioner filed a rectification application - Tribunal held that it is not a mistake apparent from the record and non adjudication of various grounds would not justify the review - HELD THAT:- As held by this Court, in Coca-Cola India (P.) Ltd. [ 2014 (11) TMI 798 - BOMBAY HIGH COURT] and Sony Pictures Networks India Pvt Ltd. [ 2019 (1) TMI 606 - BOMBAY HIGH COURT] , by not dealing with an issue which is otherwise ripe for consideration and instead remanding to the TPO, the Tribunal has ensured further litigation and continued uncertainty for both the revenue and petitioner. In addition, non-consideration of the above basic submissions made at the hearing as recorded, is clearly a mistake apparent from the record. The Tribunal ought to have allowed the rectification application dated 21st April 2022 and recalled the order dated 25th November 2021 in respect of issues raised in the rectification application for adjudication accordingly. Therefore, we allow the petition and also set aside the order under Section 254(1) of the Act by the Tribunal in respect of issues raised in the rectification application. The appeal is restored to the Tribunal for fresh disposal in accordance with law.

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• 2024 (3) TMI 109
  Period of limitation to issue notice for reopening of assessment - whether notice is issued beyond the period of limitation provided for in Section 149? - applicability of Section 3 of TOLA - exclusion of Covid period - HELD THAT:- The validity of a notice must be judged on the basis of the law existing as on the date on which the notice is issued u/s 148 of the Act, which in the present case is 31st July 2022, by which time the Finance Act, 2021 is already on the statute and in terms thereof, no notice under Section 148 of the Act for AY 2014-15 could be issued on or after 1st April 2021 based on the first proviso to Section 149 of the Act. Therefore, the fifth proviso cannot apply in a case where the first proviso applies because, if a notice under Section 148 of the Act could not be issued beyond the time period provided in the first proviso, then the fifth proviso could not save such notices. The fifth proviso can only apply where one has to determine whether the time limit of three years and ten years in Section 149(1) of the Act are breached. The sixth proviso to Section 149 of the Act has no impact as it only provides a situation where after exclusion of the time period referred to in the fifth proviso, the time available with the Assessing Officer for passing an order under Section 148A(d) of the Act is less than 7 days, then the remaining time frame shall be extended to 7 days and limitation also stands extended by 7 days. The notice u/s 148 of the Act issued on 31st July 2022, therefore, is barred by limitation. As per the fifth proviso to Section 149 of the Act only the period from 24th May 2022 to 8th June 2022 can be excluded since the notice under Section 148A(b) of the Act has been issued for the first time on 24th May 2022 providing time to petitioner till 8th June 2022 to furnish a reply. The Revenue is seeking to exclude a period from 21st May 2021 to 4th May 2022 relying on Ashish Agarwal ( 2022 (5) TMI 240 - SUPREME COURT] which, as explained earlier, cannot apply. Hence, the impugned notice dated 31st July 2022 is bad in law. Decided in favour of assessee.

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• 2024 (3) TMI 108
  Reopening of assessment u/s 147 - reasons to believe - issues subject matter of discussion during the assessment proceedings or not? - petitioner submitted that four items, i.e., claim of provision against unascertained liabilities, claim of excessive deduction u/s 35(2AB), deduction claimed on account CSR expenses and donations and excess allowance of deduction u/s 80IC were all subject matter of discussion during the assessment proceedings HELD THAT:- All the four items, as submitted by assessee which form the basis for reason to believe escapement of income have been considered during the assessment proceedings. In the first notice Assessee received u/s 142(1 Petitioner was called upon to furnish deduction claimed under Chapter VIA with documentary evidences and also details of deductions claimed u/s 35 of the Act with supporting documents. Another communication was received by Petitioner u/s 142(1) calling upon Petitioner to provide data in the format prescribed for deduction claimed u/s 80IC details of products manufactured at 80IC Units and details of products sold from these Units, item-wise details of direct expenses which has been considered for allocation to 80IC Units, details of claim u/s 35 along with DSIR certificate of expense in Form 3CL and any other certificate obtained or required to be obtained in this regard, details of R D activity being carried on in respect of which deduction has been claimed and details of expenditure in CSR for which deduction u/s 80G has been claimed. Petitioner through its Chartered Account s letter gave data in connection with deductions claimed. In the assessment order it is accepted that questionnaire along with two notices u/s 142(1) were issued and the further details were called for from time to time during the course of assessment proceedings and Petitioner from time to time furnished the details called for. In the assessment order, the AO has also dealt with Petitioner s claim for deduction under Section 80IC and disallowed certain deductions. Likewise, the AO also disallowed certain provision for expenses u/s 37 of the Act. Therefore, the fact that the four issues raised in reason to believe for escapement of income have been subject matter of consideration during the assessment proceedings cannot be disputed. Revenue's submissions that all the four items do not find the mention in the assessment proceedings and, therefore, it cannot be stated that the AO had formed an opinion while writing the assessment order also cannot be accepted. As held by this Court in Aroni Commercials Limited [ 2014 (8) TMI 390 - BOMBAY HIGH COURT] once a query is raised during the assessment proceedings and Assessee has replied to it, it follows that the query raised was a subject of consideration of the AO while completing the assessment. It is also not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. Therefore, the reopening of the assessment, in our view, is merely on the basis of change of opinion of the AO - Decided in favour of assessee.

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• 2024 (3) TMI 107
  Validity of draft assessment order u/s 144C(1) - difference in numbers in closing and opening stock of Lingerie - challenge is to a draft assessment order and that the petitioner had an alternative remedy by way of approaching the Dispute Resolution Panel - as alleged value of closing stock is more than the value of opening stock of previous assessment year and the assessment year under consideration - personal hearing through video conferencing denied - HELD THAT:- The extract indicates clearly that the income-tax authorities checked the website of the petitioner and found the price range for lingerie of a particular brand 'sloggi'. Based on the price range of such brand, an estimated average price of Rs. 1,500/- was taken as the unit price. On that basis, the total addition of Rs. 27,04,84,500/- was arrived at. Since the show cause notice did not contain the above quantification of the addition, the petitioner was deprived of the opportunity to respond thereto. It is also significant to notice that expenditure to the extent of Rs. 9,01,61,500/-, which was incurred in the previous year, was disallowed without putting the petitioner on notice with regard to such proposed disallowance in the above mentioned show cause notice. Apart from the above, it should not be lost sight of that the petitioner had expressly requested for a personal hearing through video conferencing and the provision of such personal hearing is mandated under clause (viii) of sub-section 6 of Section 144B of the Income-tax Act. For all these reasons, the impugned draft assessment order calls for interference so as to provide a reasonable opportunity to the petitioner. Since an issue not raised earlier finds place in the draft assessment order and probably in the assessment order, it becomes necessary for the respondent to issue a fresh show cause notice or, in the alternative, for the draft assessment order to be treated as a show cause notice. Therefore, it is directed that the draft assessment order be treated as a show cause notice. In view of the interference with the draft assessment order, the assessment order does not survive. The petitioner is permitted to submit a reply to the draft assessment order (i.e. show cause notice) within a period of three weeks from the date of receipt of a copy of this order.

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• 2024 (3) TMI 106
  Waiver of interest u/s 234A, 234B and 234C - Interest assessed on account of non-payment of advance tax - prayer for waiver of Interest declined as that late assessee (Husband of the Petitioner) had furnished incorrect particulars in Form 15-H in order to avoid the payment of taxes - application u/s 119(2)(a) rejected for seeking waiver of interest in terms of circular of Central Board of Direct Taxes ( CBDT ) dated 23.05.1996 - legal heirs of late Megh Raj who have come in second round of litigation before this Court - department has submitted that as the returns of the income were filed by the concerned assessee only after he was informed of non-filing of the returns, the same would amount to have been detected by the AO and therefore, the benefit of the notification issued by the CBDT dated 23.05.1996 cannot be applied - whether it is the case of filing of returns voluntarily without detection? HELD THAT:- CBDT circular dated 23.05.1996 which provides class of incomes or class of cases in which the reduction or waiver of interest u/s 234A or 234B or as the case may be 234C of the Act of 1961, can be considered. Merely where a return of income could not be filed by the assessee due to unavoidable circumstances and such return of income is filed voluntarily by the assessee or his legal heirs without detection by the AO. Filing of returns voluntarily without detection. The word detection would have to be understood in terms of the provisions of the Income Tax Act while in layman knowledge the detection would be coming to know of a particular aspect alone, but in terms of Income Tax Act, the provisions of Sections 142 and 148 of the Act of 1961 would come into play i.e. where there is a evasion on the part of any assessee which comes to the knowledge of the AO and he initiates proceedings by issuing notice under Section 142(1) of the Act of 1961 that it can be said that the AO has detected such an action of evasion of tax. It is also noticed and admitted position that till the date, petitioner Megh Raj filed his returns and deposited the tax, no notice under Section 142 of the Act of 1961 was issued nor any notice u/s 148 was issued as has been noticed in the impugned order also. In the present case interestingly, AO came to know about the Form 15-H and information mentioned therein which admittedly was signed by the assessee on dotted lines. Having come to know about such information and that the assessee had not filed his returns for several years and letters seem to have been sent by the AO to the assessee on 30.01.2000. Upon receiving the same, the assessee has filed his returns on 03.02.2000 i.e. within a period of four days. He thereafter has also sent a letter and he has also deposited the taxable income. In view thereof, it cannot be said that the income tax return was not filed voluntarily without detection of the Assessing Officer. Second condition relating to the assessee having not filed return of income due to unavoidable circumstances though on the face of it cannot be said to be a situation available on record but as has already been observed by this Court an earlier the old age and illiteracy of assessee are important factors. The same therefore can be said to be relevant and treated as unavoidable circumstances. In view thereof, the order passed by the Chief Commissioner holding the said circumstances as not sufficient for waiver of tax are found to be unjustified and misinterpretation of CBDT notification. The notification appears to have been issued by the CBDT especially to deal with the cases like the one in hand. Once the citizen is ready to deposit and immediately deposit the tax upon coming to know of his liability, it cannot be said that he has deliberately or willfully evaded the depositing of tax and the interest in terms of Section 234A of the Act of 1961 can be waived. Writ petition deserves to be allowed and the contents of the petitioners are sustained. We make the order absolute and waive the interest as demanded and subsequent proceedings u/s 140 also stands quashed.

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• 2024 (3) TMI 105
  Income deemed to accrue or arise in India - Accrual of income in India - receipts of subscription fees - Taxability in the nature of business income and not taxable as assessee has no Permanent Establishment [PE] in India as per ITAT - distinction between the transfer of a copyright as distinct from a mere right to use copyrighted material - as argued the solution provided by the assessee has attributes of independent performance and as per the examples provided in the MoU in this case, imparting of a technical training is indicative of fulfilment of a make available clause in terms of Article 12(4)(b) of the India-USA DTAA as well as Explanation- 2 of Section 9(1)(vii) of the Income Tax Act, 1961 - HELD THAT:- As is plainly evident from a reading of Explanation 2 of Section 9(1)(vii) of the Act and which defines FTS, it contemplates consideration which may be said to fall within the ambit of rendering of a managerial, technical or consultancy service. The mere access granted to a subscriber to the legal data base would clearly not fall within the ambit of Section 9(1)(vii) of the Act. All that the assessee does is provide access to the database. It has not been shown to be providing any further managerial, technical or consultancy service to a subscriber. We, in any case, find ourselves unable to countenance the contention that the access so granted could be construed as providing services of the nature spoken of in Section 9(1)(vii) of the Act. We find that similar would be the position which would obtain when subscription fee is examined on the anvil of Article 12 of the DTAA. If the Department were to describe subscription fee as royalty , they would necessarily have to establish that the payments so received by the assessee was consideration for the use of or the right to use any copyright or a literary, artistic or scientific work as defined by Article 12(3) of the DTAA. Granting access to the database would clearly not amount to a transfer of a right to use a copyright. We must bear in mind the clear distinction that must be recognised to exist between the transfer of a copyright and the mere grant of the right to use and take advantage of copyrighted material. Neither the subscription agreement nor the advantages accorded to a subscriber can possibly be considered in law to be a transfer of a copyright. In fact, it was the categorical assertion of the assessee that the copyright remains with it at all times. This issue in any case no longer appears to be res integra in light of the judgment of this Court in Director of Income Tax Vs. Infrasoft [ 2013 (11) TMI 1382 - DELHI HIGH COURT] as held incorporeal right to the software i.e. copyright remains with the owner and the same was not transferred by the Assessee. The right to use a copyright in a programme is totally different from the right to use a programme embedded in a cassette or a CD which may be a software and the payment made for the same cannot be said to be received as consideration for the use of or right to use of any copyright to bring it within the definition of royalty as given in the DTAA. What the licencee has acquired is only a copy of the copyright article whereas the copyright remains with the owner and the Licencees have acquired a computer programme for being used in their business and no right is granted to them to utilize the copyright of a computer programme and thus the payment for the same is not in the nature of royalty. Similarly, in order for that income to fall within the ambit of fees for included services , it was imperative for the Department to establish that the assessee was rendering technical or consultancy services and which included making available technical knowledge, experience, skill, know-how or processes. As has been found by the Tribunal, the access to the database did not constitute the rendering of any technical or consultancy services and in any case did not amount to technical knowledge, experience, skill, know-how or processes being made available. As we examine the nature of the transaction between an Indian subscriber and the assessee, it becomes manifest and apparent that it neither comprises of a transfer of copyright nor does it include a transfer of a right to apply technology and other related aspects which are spoken of in Article 12(4)(b) of the DTAA. No justification to interfere with the view as expressed by the Tribunal - Decided against revenue.

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• 2024 (3) TMI 104
  Reopening of assessment u/s 147 - Admission of additional income by Senior Executive of the petitioner during the search - variation in additional income admitted - HELD THAT:- The petitioner filed Return of Income on 27.09.2014 and admitted a total income of Rs. 153,79,75,580/-. The revised returns that was filed by the petitioner on 05.03.2016 after the statement was given on 09.01.2015. Revised return filed on 05.03.2016 for the Assessment Year 2014-2015 was contrary to the Letter dated 09.01.2015 and 16.01.2015. Similarly, return that was filed on 30.09.2015 for the Assessment Year 2015-2016 by the petitioner is contrary to the letter that was issued by the petitioner on 11.7.2020. Content of which has been extracted in the reasons given for reopening of the assessment for the Assessment Year 2015-2016 vide communication dated 26.08.2020. Thus, the income for the respective assessment years have escaped assessment. Returns were filed contrary to the undertaking given by the petitioner pursuant to search that was commenced under section 132 of the IT Act, 1961 on 20.11.2014. WP dismissed.

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• 2024 (3) TMI 103
  Unexplained cash credit u/s 68 - bogus share capital/share premium - book value of share was 212/- per share whereas the premium at which the equity shares were issued was approximately five times higher - as per DR mere fact that subscribers have sufficient funds or net worth would not automatically proved that they have creditworthiness to invest the money and transactions are genuine - HELD THAT:- We find that during the year the assessee has raised money from five subscribers by issuing equity shares of face value of 10/- each and at a premium of Rs. 990/-. The net worth or the book value as per share as per books of account of the assessee was 212/- per share whereas the assessee was issued shares at a premium of Rs. 990/-. We also note that the assessee company was incorporated in 2007 and over a period of four years the value of shares was increased by 20 times and it is only based on this growth trajectory and potential of the assessee, equity shares have been prised at Rs. 1,000/- each inclusive of premium of Rs.990/-. Provisions of Section 56(2)(viib) of the Act are effective from AY 2013-14 and are not applicable to the year under consideration. We find that the assessee has filed all the evidences as stated above consisting of copies of ITRs, audited accounts, certificates of incorporation, Memorandum and Articles, Annual Returns filed with ROC, bank statements, replies to summons issued u/s 131, source of source certificates, assessment orders u/s 143(3) and intimation u/s 143(1) of the Act in all five investors and the authorities below have failed to pin point any defect of deficiency. Thus we are inclined to hold that the addition has wrongly been confirmed by the CIT(A) and we are not in a position to sustain the same. Consequently the order of CIT(A) has set aside and AO is directed to delete the addition. Decided in favour of assessee.

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• 2024 (3) TMI 102
  Bogus loss from trading in shares/securities - AO received information from Directorate of Investigation, New Delhi that the assessee is an entry operator engaged in the business of providing accommodation entries by trading in purchase and sale of shares and advancing unsecured loans - director of the assessee company was issued summon u/s 131 and a statement on oath, wherein he admitted that the assessee company is an entry operator and involved in giving bogus entries - HELD THAT:- We find in this case, the statement given on oath has even been retracted by director filing an affidavit and, therefore, it has no evidentiary value as the authorities below have not brought any corroborative evidence to that effect. It is settled legal position that a confession given during survey has no evidentiary value unless corroborative evidences are there. Moreover, AO has not brought on record any substantive facts and finding are based on the DIT(Inv.) report alone. In absence of any substantive finding on various evidences filed by the assessee and AO making addition as suspicious basis, we are unable to subscribe to the conclusion of the authorities below. Thus we direct the ld. Assessing Officer to delete the addition on account of rejection of loss. Decided in favour of assessee.

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• 2024 (3) TMI 101
  Maintainability of rectification application - high rate of profit noted i n assessee s line of business when compared to the identical cases of contractors - HELD THAT:- We are afraid that such a question involving subjective adjudication of comparables in the assessee s line of business could hardly be treated as an instance of rectification u/sec.154 proceedings going in TS Balram, ITO vs. Volkart Bros. [ 1971 (8) TMI 3 - SUPREME COURT] . Their lordships have settled the law longback that purpose of sec. 154 rectification is only to deal with an apparent mistakes on record than those involving detailed roving enquiries. We further wish to emphasize that the NFAC s detailed discussion has nowhere reversed the AO s categoric findings on this legal aspect of maintainability of assessee s rectification petition. Nor the assessee s had raised any such ground as per his Form-35 before us. Whether Revenue has wrongly quoted the case law of Goetze (India) Ltd [ 2006 (3) TMI 75 - SUPREME COURT] wherein their lordships made it amply clear that powers of appellate authority(ies) exercising their respective jurisdiction(s) under the provisions of the Act is not impinged upon for the purpose of entertaining a new claim? - We are of the considered view that the said judicial precedent nowhere dealt with an instance of sec. 154 rectification. Be that as it may, once we have concluded that the assessee s rectification itself is not maintainable in the peculiar facts of the instant case wherein the AO s clear-cut findings have not been reversed by the NFAC s, all other aspects deserve to be treated as academic only. Revenue succeeds in it s first and foremost substantive grievance in very terms. Revenue appeal allowed.

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• 2024 (3) TMI 100
  Revision u/s 263 revising assessment framed u/s 144 - unexplained cash credit addition - as per CIT conclusion taken by the AO to assess the income at the rate of 1.5% as commission income attracts the provision of Section 263 as the entire amount of credits in the bank account should have been added as unexplained cash credit - HELD THAT:- We observe from the assessment order that though the assessee did not appear before the AO however, the AO while framing the assessment has taken a possible and plausible view on the basis of bank statement that was available before the AO and recorded a clear cut finding that the assessee is acting as an accommodation entry provider/pass through entity and whatever money is received in the bank account is immediately transferred out to various parties and therefore came to a conclusion that a commission at the rate of 1.5% would be reasonable to be assessed as income and accordingly the assessment was framed. AO has taken a view which cannot be said to be incorrect on the basis of facts available nor is against any provisions of the Income Tax Act, 1961. AO has taken a possible view by applying and assessing the income at 1.50% of total credits in the bank account and the ld. Pr. CIT is not allowed to substitute his view in place of AO s view for the reason that he does not agree to AO s view. The case of the assessee is squarely covered by the decision of Gabriel India Ltd. ( 1993 (4) TMI 55 - BOMBAY HIGH COURT] . Taking into account these facts and circumstances and the ratio laid by various High Courts, we are inclined to quash the order passed by the Pr. CIT u/s 263 of the Act. Decided in favour of assessee.

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• 2024 (3) TMI 99
  Condonation of delay - delay in filing of appeal of 238 days - assessee has filed a delay condonation petition adducing reason that it being an educational institution running a small school and providing education to the under-privileged children, is not conversant with the deadlines fixed under the taxation laws and that the Treasurer of the institution immediately on receipt of the appeal order of the CIT(A) had handed over the same to the Principal of the Institution - HELD THAT:- As assessee was prevented from sufficient cause in not filing the appeal in time before us and accordingly, we are inclined to condone the delay and admit the appeal of the assessee for adjudication. Eligibility for exemption u/s 10(23C)(iiiad) - claim not made in return of income - assessee had not furnished the audit report in Form 10B along with return of income, the deduction towards application of income for charitable purposes was denied by the CPC both u/s 143(1) as well as in the rectification order passed u/s 154 - - assessee is a Society engaged in the Charitable Activity of Imparting Education through a 10+2 Hindi Medium School Affiliated to Uttarakhand Board - HELD THAT:- It is not in dispute that the assessee is a society duly registered u/s 12AA of the Act thereby eligible for exemption u/s 11 of the Act. But at the same time there is no dispute that gross receipts of the assessee was less than Rs. 1 crore during the year under consideration and hence, the assessee would be entitled for exemption of its income in terms of section 10(23C)(iiiad) of the Act. This limit of Rs. 1 crore was later enhanced to Rs. 5 crores. Hence, either way, irrespective of the fact that the audit report has been filed belatedly, the assessee s income would be eligible for exemption u/s 10(23C)(iiiad) in the instant case. Accordingly, the lower authorities had grossly erred in denying the claim u/s 10(23C)(iiiad) on the ground that the same was not claimed by the assessee in the return of income. Either way, the claim of exemption 10(23C)(iiiad) made by the assessee in the instant case in the manner as provided in the statute. The law is well settled that a belated claim of the assessee should be allowed even if the same is not claimed by the assessee in the original return of income but made during the course of assessment and appellate proceedings. Reliance in this regard is placed on the decision of Hon ble Jurisdictional High Court in the case of CIT Vs. Jai Parabolic Springs Ltd [ 2008 (4) TMI 3 - DELHI HIGH COURT] . Thus we hold that the assessee would be entitled for exemption u/s 10(23C)(iiiad) of the Act in the instant case. Accordingly, ground raised by the assessee is allowed

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• 2024 (3) TMI 98
  Addition u/s 68 - unsecured loans - Onus to prove - addition made as assessee failed to discharge the onus in proving the credit as genuine - HELD THAT:- The assessee has furnished confirmation, copy of Income tax returns of the lender, copy of bank statements of the lender to prove the identity, genuineness and creditworthiness of the transaction. Assessee also produced the financials of the company in which the lender was one of the Directors holding 98.4% of the shareholding. According to which the company made substantial profits and had sufficient funds to advance amounts to the Director. Therefore, the assessee has proved the source of source also in this case although not required to prove in law. We hold that the assessee has proved the identity, genuineness and creditworthiness of the creditor and therefore, the AO is erred in treating the loan of Rs. 80 lakhs received by the assessee as unexplained cash credit u/s 68 - Thus, reversing the findings of the CIT(A), we direct the AO to delete the addition made u/s 68. Addition u/s 2(22)(e) - Assessee is a Director and shareholder of company granting loan, thus holding more than 10% of voting rights of the company - CIT(A) sustained the addition - HELD THAT:- Counsel before us reiterated the submissions made before the CIT(A) submitted that the company has provided loan for purchase of agricultural land to the assessee as the assessee has experience and expertise in arranging the land to the company. Ld. Counsel submits that the loan was given to the assessee for the purpose of business. However, the assessee could not produce any substantial evidence to prove its contentions. Therefore, we see no infirmity in the order passed by the CIT(A) in sustaining the addition. This ground of appeal is rejected. Appeal of the assessee is partly allowed.

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• 2024 (3) TMI 97
  Disallowance of weighted deduction u/s. 35(2AB) - appellant was not carrying on research activity at the address mentioned in Form 3CL but incurred at Kalunga, Rourkela - amount certified by the Ministry of Science and Technology, Government of India in Form-3CL - HELD THAT:- From From-3CL, we find that the total expenditure incurred for in-house R D facility eligible for deduction u/s. 35(2AB) is Rs. 22.68 Lakhs. The amount has been claimed u/s. 35(1) of the Act as deduction by the assessee while filing the revised return o f income. The pleading of the Ld. AR is that the actual expenditure which was not disputed by the Revenue and which is certified by the Ministry of Science and Technology may be allowed during the impugned assessment year without any weighted deduction deserves consideration. Thus since the amount certified by the Ministry of Science and Technology, Government of India in Form-3CL amounting to Rs. 22.68 Lakhs corresponds with the claim made by the assessee while filing the return of income, we direct the Ld. AO to allow the actual expenditure incurred by the assessee for in-house R D facility. Accordingly, these grounds raised by the assessee are allowed.

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• 2024 (3) TMI 96
  Revision u/s 263 - Genuineness of expenditure (Commission paid) - discrepancies in the GST shown in the commission bills and GST reported in the Audit Report - CIT opined that the transaction is abnormal in nature which is approximately 3.03% on the total turnover of the assessee company HELD THAT:- We find that the assessee has deducted tax at source on the commission payment made to the agent. This fact is also evidenced in the Tax Audit Report filed by the assessee. We find that various judicial pronouncements have held that the business decision of the assessee cannot be questioned by the Revenue. However, only the genuineness of the transaction needs to be verified. In the instant case, there is an agreement between the parties and the payments have been made through banking channels after deduction of tax at source. Merely because, the commission payments were huge in nature, it cannot be a ground for questioning the genuineness of the transactions in the absence of any adverse material on record. Argument of the DR that the commission have been credited only at the year-end could not be accepted because the payment of commission has been made by the assessee on regular intervals during the year, while calculation of the commission based on supplies was credited in the books of accounts on 31/3/2018. With respect to the capital gains as observed in the order of the Ld. Pr. CIT passed u/s. 263, we find from the submissions of the Ld. AR that the assets form part of the books of account. AR also submitted the copy of Form 26QB and the Sale Deed before us. Assessee has also provided sample confirmation letters for the sales made through the agent from the ultimate buyer. Difference in GST calculation and reported does not have any relevance in the instant case. Therefore find no merit in the arguments of the Ld. DR thereby considering the order passed by the CIT u/s. 263 of the Act deserves to be quashed. We allow the grounds raised by the assessee.

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• 2024 (3) TMI 95
  Revision u/s 263 - unexplained cash deposits - onus to prove - HELD THAT:- AO has simply accepted the explanation of the assessee without bringing any evidence on record to prove that the entire cash deposits were out of the business receipts as explained by the assessee s son. As apparent from the return of income filed by the assessee, the assessee has disclosed turnover and admitted total income @ 8% of the turnover. It is also noticed from the order of the Ld. Pr. CIT that though the assessee claimed that the assessee had received cash from various parties towards sale proceeds of Tomotos and deposited the cash in the bank account, the assessee did not produce any details of purchasers of Tomotos and transactions made with them. The onus is on the assessee to prove the genuineness of source for cash deposits along with the documentary evidence. It is also apparent from the order of the Ld. AO that the Ld. AO had not thoroughly examined the above details nor obtained the relevant details / information / evidence from the assessee before accepting the explanation of assessee's son as well as the claim made by the assessee. We also observed that even before the revisionary proceedings, the assessee did not furnish any documentary evidence in support of his claim. Under these circumstances, we find merit in the observation of the Ld. Pr. CIT that the Ld. AO has passed the assessment order without making inquiries or verification which should have been done when the case is selected for scrutiny on the issue. CIT has rightly invoked the provisions of section 263 and thereby setting aside the assessment order passed by the AO with a direction to re-do the assessment in accordance with law after making all enquiries and verification of the issues mentioned in his order passed U/s. 263 of the Act after providing a reasonable opportunity of being heard to the assessee. Accordingly, we hereby sustain the order passed by the Ld. Pr. CIT. Decided against assessee.

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• 2024 (3) TMI 94
  Rectification u/s 154 - under-assessment of income qua the foregoing depreciation/additional depreciation issue(s) - HELD THAT:- All the foregoing clinching facts sufficiently indicate that the AO s impugned action invoking sec.154 rectification for the purpose of carrying-out a detailed exercise of re-computing the assessee s depreciation/ additional depreciation could hardly be held as sustainable in law in principle in light of TS Balram, ITO vs. Volkart Bros. [ 1971 (8) TMI 3 - SUPREME COURT] . Their lordship s have settled the law long back that the purpose of sec.154 rectification is to deal with the apparent mistakes on record than carrying-out detailed roving enquiries. This is indeed coupled with the fact that the CIT(A)'s has already termed the impugned rectification as a debatable one which further strengthens the assessee s stand against the applicability of sec. 154 proceedings. We thus see no reason to accept the Revenue s instant sole substantive grievance. Revenue appeal dismissed.

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• 2024 (3) TMI 93
  Deduction u/s 80P(2)(a)(i) - interest derived from various other co-operative societies/Nationalised/scheduled banks - HELD THAT:- It is found that the instant issue is no more res integra as decided in The Rena Sahakari Sakhar Karkhana Ltd [ 2022 (1) TMI 419 - ITAT PUNE] wherein held commission income on collection of bills from MSEDCL has been made eligible for deduction u/s. 80P(2)(a) on the ground of the same being in the nature of business activity to accept the assessee s sec.80P(2)(d) deduction claim in very terms. Decided in favour of assessee.

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• 2024 (3) TMI 92
  Set off of brought forward business loss - mistakes in previous years for not claiming benefit of set-off - eligibility for set off of the business loss with future business income - 8 years time limit provided in the statute - HELD THAT:- As per the provisions of Section 72 the unadjusted business loss of a particular year would be eligible to be carried forward to 8 subsequent assessment years and the same would be eligible for set off against the business income of 8 subsequent assessment years. Hence as per section 72 of the Act, the assessee had indeed set off the brought forward business loss pertaining to Asst Year 2005-06 with the business income of Asst Year 2010-11 which is within the 8 years time limit provided in the statute. Hence the lower authorities grossly erred in not following the provisions of the Act in the correct perspective and had denied the legitimate deduction to the assessee. AO is hereby directed to allow the set off of brought forward business loss pertaining to Asst Year 2005-06 with the business income of the year under consideration. Accordingly, the grounds raised by the assessee on merits are allowed.

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• 2024 (3) TMI 91
  Estimation of income - Bogus purchases - CIT(A) restricted the addition to the gross profit ratio of the genuine purchases - HELD THAT:- We find that while deciding similar issue in assessee s own case in Smaru Gems [ 2019 (6) TMI 1718 - ITAT MUMBAI] following the aforesaid decision Mohommad Haji Adam [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] , directed the AO to restrict the addition as regards the bogus purchases by bringing the gross profit rate on such bogus purchases at the same rate as that of the other genuine purchases. Thus, no infirmity in the impugned order passed by the learned CIT(A) granting partial relief to the assessee - Decided against revenue.

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• 2024 (3) TMI 90
  Depreciation on landed property - disallow depreciation on land cost and added back to the total income - HELD THAT:- No dispute with regard to the legal position as per law that, no provision to claim depreciation on landed properties. In the present case, it is also undisputed fact that the assessee has claimed depreciation on land cost. Therefore, in our considered view there is no error in the reasons given by the AO to disallow depreciation on land cost and added back to the total income. Arguments of the assessee that, the issue has been resolved with the Revenue and the said depreciation on the UDS in land has been reversed and offered to tax for the assessment year 2012-13 - As we are of the considered view that if the assessee has reversed depreciation and credited to profit and loss account, then same can be excluded while computing income for assessment year 2012-13. But, when it comes to allowing depreciation on any asset, said depreciation should be allowed on each year considering value of WDV of the asset. Just because the assessee has claimed depreciation for some years and enjoyed the benefit and later on reversed the claim and offered to tax at its convenience, the claim of the assessee cannot be entered. Therefore, we are of the considered view that the Assessing Officer is right in disallowing depreciation on land for this year. However, if the claim of the assessee is correct that, it has reversed depreciation on land for the assessment year 2012-13 and offered to tax, then the same can be excluded for computing total income. Thus, we direct the AO to verify the claim of the assessee and if the AO found that the claim of the assessee is correct, then we direct the AO to exclude the income offered towards reversal of depreciation while computing total income for the assessment year 2012-13. Disallowance u/s 14A r.w.r. 8D - expenses incurred towards managerial remunerations and other routine administrative expenses - HELD THAT:- AO has recorded satisfaction having regard to books of accounts of the assessee that, the assessee has incurred expenses towards managerial remunerations and other routine administrative expenses and a portion of which must have been attributed towards earning of exempt income. It is only after examining the books of accounts, AO came to the conclusion that the assessee incurred administrative and other expenses and said finding that, a portion of such expenses were attributed towards earning of substantial exempt income constitutes satisfaction as required u/s. 14A of the Act and thus, we reject arguments of the assessee. Disallowance computed by the AO and sustained by the ld. CIT(A), in our considered view, although the provisions of Rule 8D of I.T. Rules, 1962 is not applicable for the impugned assessment year, but proportionate expenses relatable to income should be disallowed by applying certain methods. CIT(A) directed the Assessing Officer to restrict the disallowance u/s. 14A to 2% of exempt income. Therefore, we are of the considered view that there is no error in the reasons given by the Assessing Officer and ld. CIT(A) to sustain disallowance u/s. 14A of the Act and thus, we reject ground taken by the assessee. Disallowance of investments written off and debited to profit and loss account - HELD THAT:- As respectfully following the decision of Hon ble High Court of Madras in appellant s own case for assessment year 2001-02 [ 2018 (12) TMI 47 - MADRAS HIGH COURT] we are of the considered view that write off of diminution in value of investment in other companies is allowable as revenue expenses/loss in terms of section 28 and 37(1) of the Act. Thus, we reverse the findings of the CIT(A) on this issue and direct the Assessing Officer to delete additions made towards disallowance of write off of investment and debited profit and loss account. Addition towards workmen and staff welfare expenses - CIT(A) has given a categorical finding to the Assessing Officer in light of arguments of the assessee that, said expenditure has already been considered in the return of income filed under Fringe Benefit - HELD THAT:- There is no cause of grievance with the appellant, when there is a clear finding from the ld. CIT(A) to the effect that the matter may be re-examined in light of averments of the assessee before the first appellant authority. Thus, we are of the considered view that there is no merit in ground taken by the assessee on the issue of computing the value of fringe benefit, in so far as providing travel and conveyance expenses is concerned. CIT(A) has given appropriate relief as per law on the basis of relevant evidences filed by the assessee in so far as computation of value of fringe benefit on workmen and staff welfare expense. CIT(A) has given a direction to the AO to verify the claim of the assessee in respect of travel and conveyance expenses. Therefore, there is no error in the reasons given by the ld. CIT(A) and thus, we are inclined to uphold the order of the CIT(A) and dismiss appeal filed by the assessee. Income recognition - addition towards sale of farmer s security cards - as submitted assessee is following mercantile systems of accounting, income accrues only when the assessee sells the cards to farmers - HELD THAT:- As appellant s responsibility to offer income in right assessment year cannot be based on vague reason. Since, the appellant is following mercantile system of accounting, the moment it distributes cards to farmers, income from sale of cards accrues. The appellant has carried out distribution of cards in the assessment year 2007-08 and income pertaining to sale of said cards should be offered to tax for assessment year 2007-08. Therefore, we are of the considered view that, there is no error in the reasons given by the ld. CIT(A) to sustain additions made by the AO for assessment year 2007-08. While computing the income from sale of farmer s security card, the AO should allow expenses fully and wholly incurred for the purpose of earning such income. We further direct the AO to consider the arguments of the assessee that, it has offered income from sale of cards for subsequent assessment year 2008-09 and in case the income is sustained for this assessment year, income offered by the assessee for assessment year 2008-09 should be allowed. AO must carry out necessary verification and in case the arguments of the assessee is correct, then we direct the AO to exclude income from sale of farmers security cards for the assessment year 2008-09. Disallowance u/s. 40(a)(ia) - non-deduction of tax at source on certain expenditure - HELD THAT:- If the payee s have paid tax on the amount paid by the assessee and included in their return of income for relevant assessment year, then the sum paid by the assessee without deduction of tax at source cannot be disallowed u/s. 40(a)(ia) of the Act. This proviso has been examined by various courts. Admittedly second proviso to section 40(a)(ia) of the Act came into statue w.e.f. 01.04.2013 and the impugned assessment year is 2012-13. Therefore, we are not going to comment on applicability of said proviso to the case of the assessee for impugned assessment year. We left open the issue to the AO, to verify the applicability of said proviso in light of arguments of the assessee and also other evidences including judicial precedents if any, filed by the assessee to justify its case. Thus, we set aside the issue to the file of the AO and direct the AO to verify the claim of the assessee in light of second proviso to section 40(a)(ia) of the Act and decide the issue in accordance with law. Additions towards interest on accrual basis relating to call deposits and term loan advances given to joint venture companies - HELD THAT:- Although, the appellant claims that call deposits and loans given to joint venture companies become NPA, the reasons given by the appellant to treat said loans and call deposits as NPA is not acceptable. The assessee cannot treat call deposits and loan given to joint venture companies as NPA on the basis of financial creditor s decision. The assessee should independently carry out necessary exercise and ascertain whether call deposits and loans given to joint venture companies are NPA or not. Also as long as the loans is continued in the books of accounts, interest which is due on said loans on accrual basis must be brought to tax. AO, after considering relevant facts has rightly made additions towards interest income. Additions towards rent due to staff quarters amounting - Addition on the ground that although the assessee has specified in its notes of account, but did not offer rent due from staff quarters to tax - HELD THAT:- When the appellant is following mercantile system of accounting, income pertains to relevant assessment year has to be accounted on accrual basis, whether or not said income has been received during the relevant financial year. Since, the appellant has reported rent due from staff quarters for the ending 31.03.2008, in our considered view the AO has rightly made additions and thus, we are inclined to uphold the findings of the ld. CIT(A) in sustaining the additions made by the Assessing Officer and reject ground taken by the assessee. Addition towards revenue recognition in respect of land lease deposit received by the assessee for allotment of industrial land in SEZ on long term lease basis - HELD THAT:- We are of the considered view that land lease deposit received by the appellant for transfer of land along with title, right and interest for long term lease of 90/99 years to the extent of non-refundable deposit should be considered as income as and when the income accrues to the assessee. Since, the appellant has received upfront lease deposit, when the land has been leased out, in our considered view, the appellant ought to have recognized the income in the profit and loss account in the year of receipt. Since, the appellant has not recognized the income even though said income accrues to the appellant in the relevant assessment years, in our considered view, the AO has rightly taxed lease land deposit on accrual basis and thus, we are inclined to uphold the findings of the ld. CIT(A) and reject grounds taken by the assessee. MAT - re-computation of book profit u/s. 115JB of the Act by making additions towards depreciation on land - HELD THAT:- The assessee has made excessive claim of depreciation in the books of accounts towards undividend land cost, even though there is no provision under Income-tax Act, 1961 to allow depreciation on land. Since, the appellant has made a wrong claim, in our considered view disallowance of depreciation on land should be added back to the book profit computed u/s. 115JB of the Act. Therefore, we are of the considered view that there is no error in the reasons given by the CIT(A) to sustain additions made by the Assessing Officer towards depreciation to book profit computed u/s. 115JB of the Act. Thus, we are inclined to uphold the findings of the ld. CIT(A) and reject ground taken by the assessee. Disallowance u/s. 14A r.w.r. 8D towards expenditure relatable to earning exempt income - It is the argument of the Ld. Counsel for the assessee that while computing disallowance under Rule 8D(2)(iii) of I.T. Rules, 1962, the Assessing Officer has taken all investments including investment which did not yield exempt income - HELD THAT:- The matter needs re-look from the Assessing Officer. Therefore, we are of the considered view that the issue needs to go back to the file of the Assessing Officer and thus, we set aside the order of the ld. CIT(A) on this issue and set aside the issue to the file of the Assessing Officer and direct the Assessing Officer to reconsider the issue in light of our discussion given herein above and consider only those investments which yielded exempt income for the relevant assessment year for computing disallowance under Rule 8D(2)(iii) of I.T. Rules, 1962.

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• 2024 (3) TMI 89
  Disallowance of depreciation on goodwill created in the scheme of amalgamation - entire assets and liabilities of the amalgamating company were transferred to the assessee company at their book value - HELD THAT:- As decided in KIFS International LLP vs. DCIT [ 2023 (9) TMI 1439 - ITAT AHMEDABAD] no depreciation is allowable on goodwill from the AY 2021-22 onwards. However, goodwill is not excluded from capital assets. The purpose of exclusion of goodwill from the depreciable assets is that it is seen that Goodwill, in general, is not a depreciable asset and in fact depending upon how the business runs; goodwill may see appreciation or in the alternative no depreciation to its value. Therefore, there may not be a justification of depreciation on goodwill. Accordingly, there is no need to provide for depreciation on goodwill of business/profession like other intangible assets or plant machinery. But such an amendment is not applicable for the year under consideration - thus reverse the order of the authorities below and direct the AO to allow the claim of the assessee for the depreciation on the impugned goodwill - Decided in favour of assessee. Assessment framed by the AO is in the name of non-existent assessee - assessee itself has filed the return of income, appeals in the name of non-existent company - HELD THAT:- Mistake committed by the assessee does not empower the Revenue to also commit the same mistake especially in a situation where the fact about the scheme of amalgamation and conversion of the assessee into LLP was known by the AO which is evident from the assessment order discussed above. The department was aware of the complete fact that the company was no longer in existence, yet the AO has framed the assessment in the name of non-existing company. Therefore, contention of the DR fails on this count that the assessee has also made a mistake in filing the returns of income and appeal papers in the name of non-existing company. We also note that this Tribunal in case of Urmin marketing (P) Ltd. [ 2020 (11) TMI 47 - ITAT AHMEDABAD] has already decided the identical issue in favor of assessee on the similar facts and circumstances. Assessment framed u/s 143(3) of the Act is not sustainable. Hence the ground of appeal of the assessee is allowed.

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• 2024 (3) TMI 88
  Validity of Assessment u/s 153C - requirements of approval u/s 153D - as alleged absence of valid and effective approval under section 153D of the Act by the competent authority - HELD THAT:- As the facts in the present case with regard to the validity and effectiveness of approval under section 153D of the Act is similar to the one adjudicated by the Income-tax Appel late Tribunal for the assessment year 2014-15 [ 2023 (10) TMI 686 - ITAT DELHI] wherein held JCIT, without any consideration of factual and legal position in proposed additions/disallowances and without contents of appraisal report before him or incriminating material collected in search etc. has buckled under statutory compulsion and proceeded to grant a simplicitor approval with caveats and disclaimers. This approach of the JCIT has ipso facto rendered the impugned approval to be a mere ritual or an empty formality to meet the statutory requirement and can not thus be countenanced in law. Accordingly, respectfully following the precedent as above, we hold that the assessment in the assessment year 2009-10 in pursuance of invalid approval accorded u/s 153D is invalid and liable to be quashed and quashed as such. Appeals filed by the Revenue are dismissed.

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• Customs

• 2024 (3) TMI 87
  Seeking release of imported goods - confiscation - penalty - imported balloons for party decorations, pumps and balloons stands - Requirement of compulsory registration scheme under BIS before completion of import - violation of import policy in terms of the TQC Order - improper importation of the subject goods without BIS Certificates - whether party items / inflatable balloons for party decoration are covered under the scope of the TQC Order? - HELD THAT:- Appellant has classified the imported balloons under CTH 9503 as Toys and balloons for the reason that as per Analytics Report 46/2021-22 issued by National Customs Targeting Centre, Mumbai, wherein it is stated that balloons are to be classified under CTH 9053. The said report did not make any distinction between toy balloons and decoration balloons. As per the Toys (Quality Control) Order 2020 issued by Department for Promotion of Industry and Internal Trade, Ministry of Commerce (DPIIT) applies to Toys designed or clearly intended or not exclusively for use in play by children under 14 years of age. In the present case, the appellant has consistently from the very beginning contended that they are engaged in the business of decorations using balloons, and the goods (balloons) imported were intended to be used only for decoration. The department has not been able to establish otherwise. As per the list of items shown in the IS 9873 (Part I): 2012 item at (k) shows that holiday decorations that are primarily intended for ornamental purposes are excluded. Thus goods used for decoration is excluded. The said item at (k) does not make any distinction or differentiation based on the material used in for the balloon. Further, in the present case the appellant offered to test the goods as to the nature of the material used. The department did not conduct any test. Thus, we are of the considered opinion that the order passed by original authority confiscating the goods and directing for re-export cannot be sustained. The impugned order is set aside. The goods are to be released to the appellant on payment of applicable duty, if any. The redemption fine is also set aside. In the result, the appeal is allowed with consequential reliefs, if any.

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• 2024 (3) TMI 86
  Imports crude edible oil - crude palm oil - Whether Social Welfare Surcharge (SWS) is leviable when the Basic Customs Duty (BCD) is exempted in terms of Notification No. 24/2015-Cus 25/2015-Cus, issued in terms of sub-section (1) of Sec 25 of the Customs Act, 1962, for the goods imported under Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS)? - HELD THAT:- It is not in dispute that the Appellant had imported goods by availing benefit of exemption Notification Nos. 24/2015 25/2015 and were allowed the exemption from BCD on finding that the Appellant fulfilled the conditions thereunder. The aforementioned notifications have been issued in exercise of power to grant exemption u/s 25 of the Customs Act. BCD stands exempted subject to condition, inter alia, of debit to the MEIS/SEIZ scrips (as the case may be) of the BCD leviable on the goods, but for the exemption. Thus, we find that there is no actual collection of BCD in view of the exemption. As per Sec 110(3) of the Finance Act 2018, SWS leviable under sub-sec (1) has to be calculated @10% on the aggregate of duties/taxes and cesses, which are levied and collected u/s 12 of the Customs Act. Thus, in the instant case, admittedly, the aggregate of duties/taxes and cesses collected is nil, as is evident from the perusal of the Bills of Entry. Thus, we hold that SWS will be nil, as anything multiplied with zero is also zero. There is no specific provision made under Statute for calculation of SWS on notional BCD, when the actual BCD is exempted subject to fulfilment of stipulated conditions of the notification. The contention of Revenue is that debit of BCD to the scrip under the said notifications is an alternate method of payment and not an exemption, per se, so as to justify the computation of SWS on notional BCD. We find that such contention of Revenue is not in consonance with the method of calculation of SWS provided in Sec 110(3) of the Finance Act 2018. The Hon ble Apex Court in Somaiya Organics [ 2001 (4) TMI 84 - SUPREME COURT] , has held categorically that the expression collection in the context of tax laws would mean physical realization of tax, whereas, in the instant case, the Commissioner (Appeals) has himself accepted in the Impugned Order that no money representing BCD goes to the exchequer under the said notifications. Meaning, thereby, that the context of physical realization of tax is clearly not met and the debit of BCD to the scrip is at best a notional collection of tax, when the said notifications are read in entirety. Had the debit to scrip been equivalent to cash payment or any other admissible mode of payment, there was no need to grant any exemption as duty levied would have been discharged in full using such scrips. The statutory provision is quite clear that power to exempt any duty of Customs is within section 25 only and thus, once BCD is exempted in terms of notification issued under Sec 25, it would tantamount to exemption from duty and no other interpretation is possible. We further find that the ruling of the Hon ble Bombay High Court in the case of La Tim Metal Industries [ 2022 (11) TMI 1099 - BOMBAY HIGH COURT] is directly on the same issue of levy of SWS, where BCD is nil and duty paid/debited using MEIS scrip. We also find that in Appellant s own case, having similar facts, the coordinate Bench has also taken similar view. Hence, we find that goods imported under aforesaid notifications were exempted from BCD and Additional duty of Customs in full and there was no liability to pay BCD by the importer. This fact is an admitted fact. Further, the leviability of SWS is based on levy and collection of BCD, which itself is exempted. There cannot be any collection of SWS on such goods cleared under the aforesaid exemption notifications. Thus, we allow all the Appeals and set aside the Impugned Orders. The Appellant shall be entitled to consequential benefits, including refund of SWS paid with interest, as per law.

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• 2024 (3) TMI 85
  Benefit under the SHIS Scheme (Status Holder Incentive Scheme) - Import of Turning Cradle and Blade Shell Lifting Device - Goods were considered as not falling within the category of relating to plastic sector - enhanced declared assessable value - confiscation and demand of customs duty and imposition of penalty - seek to adopt the revised certificate from Government Approved valuer and treat the imported goods as new and un-used - HELD THAT:- We find that in the instant case Shri N J Lalwani, the government approved value has changed his stance and suo-moto revised on the report. In that background, cross-examination of Shri N J Lalwani becomes relevant to find the reasons why the report was changed and what was the fact which resulted in change of stance. The appellants were seeking cross examination of Shri N.J. Lalwani, however prior to cross examination they wanted certain documents. There was a lot of correspondence about the fact if the documents are already supplied or already available with appellants. The appellants were insisting on supply of documents whereas revenue believed all documents are supplied/ available with appellant. we find that Revenue has made all efforts and provided all the documents necessary to the appellant to enable the cross-examination Shri N J Lalwani. in the impugned order, goes item wise and gives evidence that the documents being asked by the appellant are already in their possession and have been given, in some cases at numerous times. We have examined the facts stated in the impugned order. We hold that all necessary documents have been provided to the appellant. In the interest of justice, we give one last opportunity to the appellant to cross-examine Shri N J Lalwani. From the record, it is apparent that there was a deliberate delay on the part of the appellant to cross-examine the Shri N J Lalwani. The reasons why shri N J Lalwani change his strance will be helpful in reaching proper conclusion in this case. In this background, in the interest of justice we set aside the order and remand the matter back to the Commissioner. The commissioner will give two dates for cross-examination of Shri N J Lalwani and the appellant can avail any one of the dates. The Commissioner will follow the principle of natural justice and grant personal hearing to the appellants. Appeal is allowed by way of remand for fresh adjudication with above directions.

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• 2024 (3) TMI 84
  Rejection of application seeking amendment of the bill of entries u/s 149 - mis-declaration of the HSN Code due to clerical error - imported consignments of Calcium Phosphate - interest and penalty - HELD THAT:- From the fact that soon after detection on 26.11.2020, the appellant paid the differential duty along with interest and penalty on 4.12.2020 without any protest. From the nature of amendment sought by the appellant in Bills of Entry, the same is liable to be allowed since only a paper declaration was sought for amending the Customs Tariff Heading from 25 to 28. The observations made by the Delhi High Court in CC Vs. M.D. Overseas [ 2023 (9) TMI 1271 - DELHI HIGH COURT] are relevant in the present context on the applicability of Section 149 of the Act. Thus, it would well be considered as a mistake which has been rectified at the first available opportunity and therefore there is no error in allowing the application made by the appellant u/s 149 of the Act seeking amendment of the bill of entries. The amendment sought by the appellant in the facts of the present case is justified and therefore the impugned order is liable to be set aside. The Department is directed to amend the Bill of Entries by exercising power u/s 149 of the Customs Act and pass appropriate orders on the appellant depositing the requisite fee under Notification No. 36/2017-Customs (NT). The appeal is, accordingly allowed.

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• 2024 (3) TMI 83
  Application for cancellation of bail granted to the applicant / accused - mis-declaration of manufacturing year of the crane imported - arrested u/s 104(1) for the offence committed u/s 132 and 135(1)(a) - HELD THAT:- From the facts on record it appears that the accused is attending the investigation and has co-operated the same. No case is made out to show that custodial interrogation by cancelling bail is just and necessary. The ld Metropolitan Magistrate has observed that the main allegation is regarding mis-declaration of the order of manufacturing of the crane. It is specifically observed that this issue is related to the documents filed with RTO. It is further observed that the accused is ready to co-operate with the investigation and submit the documents required for the investigation. The documents are already submitted by the accused. In these circumstances no case is made out to cancel the bail granted to the accused. Considering the nature of the offence and also facts on record, there is no merit in the contention that the accused is not entitled for the bail. Hence, the same are devoid of merit. In the result, I pass the following order : Misc. Application is rejected and disposed of accordingly.

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• Insolvency & Bankruptcy

• 2024 (3) TMI 82
  Eligibility of ex-promoter/Corporate Debtor u/s 29A read with Section 240A of the IBC to submit a resolution plan claiming the benefits of MSME - rejection of Resolution Plan. Eligibility of the Corporate Debtor to submit a resolution plan in the present facts of the case when it has acquired a change in its status to that of an MSME after initiation of the CIRP proceedings - HELD THAT:- As the subsequent Chartered Accountant s certificate was not based on any independent valuation or investigation but premised on the faulty certificate of the Chartered Engineer and hence cannot be relied upon. Whether the Adjudicating Authority could have raised concern over the plausibility of the reports of the Chartered Engineer and other the valuation reports which had validated the MSME entitlement of the Corporate Debtor by going under the skin of the computation exercise conducted by them in rejecting the MSME status of the Corporate Debtor? - HELD THAT:- The MSME registration was done by the competent authority under MSME Act on 23.10.2020 which was subsequent to the date of MSME Notification of 26.06.2020. Hence the certificate prima-facie was issued on the basis of the new Notification. Also in the present case, admittedly, the application has been filed online and the registration was done online on the basis of ITRs and hence there lies no case of any patent procedural violation or deviation from the normal practice. Any infirmity or defect in the MSME registration certificate could have therefore been corrected only by the competent authority or any other designated authority as specified in the notification. The MSME Act as it stands clearly does not provide any supervisory role on the Adjudicating Authority to revise/modify/revoke/interfere with MSME registration at its level. Clearly the notification framed thereunder also does not bestow upon the Adjudicating Authority with any such authority to hold an MSME registration certificate to be null and void on its own - The MSME registration can only be revoked by the competent authority and the Adjudicating Authority cannot arrogate this jurisdiction upon itself to modify/revise/revoke or interfere in any manner with the MSME registration granted by the competent authority. It is opined that the MSME status of the Corporate Debtor as granted by the competent authority continues to subsist and could not have been disregarded by the Adjudicating Authority unilaterally. CoC was not consulted before MSME registration of the Corporate Debtor - HELD THAT:- As regards the process of consideration and approval of resolution plan is concerned, the matter is essentially that of the commercial wisdom of the CoC and the scope of judicial review is strictly circumscribed within the boundaries of Section 30(2) of the IBC for the Adjudicating Authority. This discipline has been emphasised by the Hon ble Supreme Court in several judgments and laid down that the powers of the Adjudicating Authority dealing with the resolution plan does not extend to examining the correctness or otherwise of the commercial wisdom exercised by the CoC and every dissatisfaction does not partake the character of a legal grievance and cannot become a ground of appeal. Collective action along with timely resolution and value maximisation is fundamental to the operational aspects of an insolvency regime. It is also well settled that the IBC places the CoC in control of the insolvency process and the CoC exercises its power of decision making through the process of voting. Voting mechanism which is the instrument of decision making for the CoC has been coupled with specific threshold levels of voting share required for taking such decisions - Finality and binding force of the resolution plan in accordance with the majority decision is well settled. That being the case, there are no position to subscribe to the findings of the Adjudicating Authority in rejecting the resolution plan which has been recommended by the CoC with requisite majority. The Adjudicating Authority committed gross error in rejecting the application for approval of the resolution plan of the SRA on the ground that the MSME registration was obtained after commencement of the insolvency proceedings and that the registration was wrongly obtained - both the impugned orders of the Adjudicating Authority are unsustainable - Appeal allowed.

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• 2024 (3) TMI 81
  Exclusion of appellant from the Committee of Creditors (CoC) - The Resolution Professional deemed Rare ARC (appellant) akin to a related party, thus ineligible for CoC participation - assignment of term loan - it is contended that the SIFL and SEFL were related parties to the Corporate Debtor and assignment was made with intent to control the CIRP of the Corporate Debtor - HELD THAT:- Admittedly, the claim was filed by the Appellant in the second CIRP of the Corporate Debtor which claim was based on assignment dated 09.09.2020. After receipt of the claim by Appellant, there has been correspondences between Resolution Professional and the Appellant. After certain correspondences between the parties, the Resolution Professional issued an e-mail dated 30.04.2022 communicated to the Appellant i.e. assignee that the Appellant is akin to a related party and held that the Appellant shall have no voting of the CoC of the Corporate Debtor. It is noticed that in the avoidance application which was filed by the Administrator there was pleading that Rs.25 Crores was routed through SIFL and SEFL from its related entities to the Rare ARC for paying the consideration. The avoidance application still pending for consideration before the Adjudicating Authority, it is not necessary for us to return any finding on issue which is pending consideration before the Adjudicating Authority in the avoidance application filed by the Administrator in the CIRP of SIFL and SEFL. It is relevant to notice that in spite of there being pleading on behalf of the Resolution Professional in its Affidavit filed before the Adjudicating Authority that the funding for obtaining assignment was through SEFL itself, no details have been given by the Appellant to indicate the source of funding especially when there are allegations that the assignment was a fraudulent transaction. It was incumbent on the Appellant to clear the doubt by bringing relevant materials to show that for taking assignment no fund was used through SIFL and SEFL. It is relevant to reiterate again that the fact that appellant filed its claim on 09.09.2020 in first CIRP on the same date on which it took assignment from SEFL, a date on which it took assignment from SEFL, a related party to Corporate Debtor makes it crystal clear that assignment in favour of appellant was made only for participating in CIRP of Corporate Debtor as assignee of SEFL, hence, appellant the assignee has rightly been held to be related party to the Corporate Debtor. There are no grounds have been made out to interfere with the impugned order of the Adjudicating Authority by which application has been rejected. There is no merit in the Appeal - appeal dismissed.

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• 2024 (3) TMI 80
  Condonation of delay of only 5 days in filing the Appeal - exclusion of period during which certified copy was under preparation - HELD THAT:- Appellant is entitled only for exclusion of period taken for preparation of certified copy as per Section 12 of the Limitation Act. Present is not a case where Appellant is claiming benefit of exclusion of period during which certified copy was under preparation and Appellant is pressing its case on the basis of uploading of the Order on 22nd November, 2023. Judgment of the Hon ble Supreme Court in V NAGARAJAN VERSUS SKS ISPAT AND POWER LTD. ORS. [ 2021 (10) TMI 941 - SUPREME COURT] does not render any help to the Appellant nor the Judgment of the Hon ble Supreme Court in SANJAY PANDURANG KALATE VERSUS VISTRA ITCL (INDIA) LIMITED AND OTHERS [ 2023 (12) TMI 1249 - SUPREME COURT] comes to aid of the Appellant. As noticed in Sanjay Pandurang Kalate both the counsels were present and there was no dispute between the counsel that no substantive order was passed on 17th May, 2023 by the Adjudicating Authority whereas in the present case order was dictated on 09th November, 2023 which is clear from the report submitted by the Registrar of NCLT. When the order was dictated in the presence of the Learned Counsel for the appellant he cannot be heard in saying that Appellant is not aware of the order and limitation shall not commence from the date of the order and the limitation shall commence only from the date when order is uploaded. In the present case, the order having been dictated on 09th November, 2023, limitation shall commence from 10th November, 2023 and 30 days period shall come to an end on 09th December, 2023 and 15 days condonable period shall also come to an end on 24th December, 2023 whereas the Appeal was e-filed on 27th December, 2023 i.e. beyond 15 days condonable period. The Appeal having been field beyond 15 days after expiry of the limitation, the delay condonation application cannot be allowed and the same is dismissed.

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• 2024 (3) TMI 79
  Approval of Resolution Plan - HELD THAT:- It is well settled that commercial wisdom of CoC in approving the resolution plan is not to be interfered by the Adjudicating Authority in its judicial review and limited ground for interference with the resolution plan is only when resolution plan violates or is in non-compliance of Section 30(2) of the Code. The Appellant has no such right that its resolution plan should be approved by the CoC which proposition has already been laid down by the Hon ble Supreme Court in ARCELORMITTAL INDIA PRIVATE LIMITED VERSUS SATISH KUMAR GUPTA ORS. [ 2018 (10) TMI 312 - SUPREME COURT ]. There are no ground in this Appeal warranting any interference with the order of the Adjudicating Authority dated 04th January, 2024 by which the Adjudicating Authority has approved the Resolution Plan. The CoC after considering the Resolution Plan of the Appellant and all other Resolution Applicants has approved the resolution plan of Respondent No. 3 with 100% vote share which resolution plan has ultimately been approved by the Adjudicating Authority on 04th January, 2024. There are no ground to interfere with the order dated 04th January, 2024. There is no merit in the Appeal, the Appeal is dismissed.

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• 2024 (3) TMI 78
  Execution of Conveyance deed - Home Buyers / Commerical property (space) - entitlement to receive the payment of rent as assured in the MoU entered with the allottees and the erstwhile management. Seeking a direction to Adjudicating Authority to execute the Conveyance Deed - HELD THAT:- It is relevant to notice that although in the impugned order the said prayer of the Applicant was noticed, considered and rejected, but in the Application which was filed by the Appellant, which has been disposed of, there was no prayer for execution of the Conveyance Deed - When there was no prayer in the Application seeking a direction for execution of the Conveyance Deed, there was no occasion to raise objection to the said prayer by the RP in its reply - even though no specific prayer was made, the Adjudicating Authority was not precluded to consider any prayers made in the Application and to entertain any issue with regard to such prayers. The submission of the Appellant that when the Corporate Debtor is being run as a going concern, it is open for the RP to continue the real estate business of the Corporate Debtor and while running business of real estate Company, execution of Conveyance Deed, payment of rent is part of the said business. There can be no dispute that by virtue of Section 17, 18 and 25, it is duty of the IRP to manage the affairs and take control of the assets over which the Corporate Debtor has ownership rights. The allottees, cannot as a right claim execution of Conveyance Deed, as has been prayed in the present case before the Adjudicating Authority. The RP, who is running the business of the Corporate Debtor is the best person to take a decision as to what part of the business of the Corporate Debtor can be carried out. There cannot be any dispute to the proposition that the rights of allotees cannot be affected in the CIRP as their interest is to be appropriately preserved and protected, but in what manner, the rights of homebuyers are to be protected and preserved is an issue, which depends on facts of each case and nature and function, which is carried out by the RP, who is vested with the management. Direction issued in the case of in Alok Sharma [ 2022 (6) TMI 925 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ] to execute the Sale Deed has to confine to the facts of the said case and cannot be relied in the present case. Whether Appellant is entitled to receive the payment of rent as assured in the MoU entered with the allottees and the erstwhile management? - HELD THAT:- The Adjudicating Authority in the impugned order has noticed the statement of the RP that rent received in respect of the units allotted to Applicants has been kept in Fixed Deposit and would be disbursed in accordance with law. The above statement of RP recorded in the impugned order amply protect the interest of the allottees. How the amount received during the CIRP from the shops allotted to the Appellant is a question, which depends on the ultimate decision of the Adjudicating Authority in the CIRP and during the currency of CIRP, the Adjudicating Authority has not committed any error, in not granting prayer of the Appellant to make the payment of entire amount received against the shops allotted to the Appellant - The above order of the Adjudicating Authority amply protects the interest of the Appellant and there are no infirmity in the said order, warranting interference in this Appeal. Thus, no grounds have been made out to interfere with the impugned order passed by the Adjudicating Authority. The Appeal is dismissed.

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• PMLA

• 2024 (3) TMI 77
  Rejection of bail of the applicant - co-accused - Money Laundering - Proceeds of crime - scheduled offence - accusation is that the applicant has misused his authority as despite the land falling within CRZ- III in respect of which no permission could have been granted, the applicant knowingly proceeded to grant such permission - HELD THAT:- The Special Court has observed that the role of the applicant is not of generating proceeds of crime as defined under section 2(1) (u) and laundering the same as per section 3 of the PML Act. It is further observed that it is not even the contention of ED that the applicant is beneficiary of proceeds of crime or recipient thereof. The Special Court recorded the contention that the applicant has not laundered the proceeds of crime. The Special Court then referred to paragraph 12.2 of the prosecution complaint where it is mentioned that during the applicant s tenure as Sub-Divisional Officer, Dapoli, the applicant misused his position and directly assisted in money laundering activities of accused Sadanand Kadam. In this context, it is important to note the observation of the trial Court that the role attributed to the applicant is that he had knowingly assisted the process of money laundering. The applicant Jayram Vinayak Deshpande be released on bail on his furnishing P.R. Bond of Rs. 1,00,000/- with one or more sureties in the like amount - Until the applicant- Jayram Vinayak Deshpande furnishes surety, he be released on cash security of Rs. 1 lakh along with PR bond - bail application allowed.

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• 2024 (3) TMI 76
  Limitations of Enforcement Directorate's Powers under PMLA - Money Laundering - proceeds of crime - illegal mining - compoundable offences or not - reasons to believe - petitioner's first prayer is for the issuance of directions to ensure that the respondents do not violate the spirit and sanctity of the proceedings - violation of statutory provisions contained in the MMDR Act Haryana Rules 2012 - statutory limits of Section 66 (2) under the Prevention of Money Laundering Act, 2002 - HELD THAT:- As per the instructions supplied by the ED, in furtherance of the PMLA proceedings, based on reasons to believe, a search u/s 17 of the PMLA, 2002 was conducted at multiple premises to investigate the offense of commission of money laundering through illegal mining at large scale in Yamuna Nagar and nearby districts. Two premises of the Petitioner-residence and registered office of M/S Mubarikpur Royalty Company were searched, and multiple incriminating documents, digital devices, and evidence were recovered, which reveals the generation of proceeds of crime by the Petitioner's firm. Also, unaccounted Cash of Rs. 4,50,000/- which is believed to be Proceeds of Crime, was also recovered from the residence of the Petitioner. The material in possession, and findings of the Directorate of Enforcement, information was shared under section 66(2) of the PMLA, 2002 with the Police. Further, under the information shared u/s 66(2) of the FMLA, 2002, an FIR No. 21 dated 19.01.2024 was registered u/ s 120-B, 420 of IPC, 1860, 21(1) of Mines and Minerals (Regulation of Development) Act, 1957 and 15 16 of Environment Protection Act, 1986 at P.S. Pratap Nagar, Yamuna Nagar. Violation of statutory provisions contained in the MMDR Act Haryana Rules 2012 - HELD THAT:- Once the petitioner has been made an accused by the ED itself in the FIR, it cannot be countenanced that he will be asked to appear in person in terms of Section 50 PMLA, which contemplates obligation on the person to attend as directed; to state the truth and the proceedings before the ED officer would be a judicial proceeding. The whole context of Section 50 PMLA would have a different outlook once the ED itself has chosen to arraign the petitioner as an accused in the FIR lodged by themselves. Therefore, the petitioner s fundamental rights under Article 21 of the Constitution of India are grossly violated as the procedure established by law is not followed, and the proceedings launched are grossly actuated with malice in law. The petitioner s contention that the said communication amounts to direction is misreading of the said communication, which has been reproduced in para 16. The communication is only information and it is the power of concerned investigator/SHO to register FIR if they are satisfied and found offence cognizable, as such, the present petition deserves dismissal even on this prayer and related prayers. Thus, if this court disrupts the proceedings at this stage, it will amount to interfering in the investigation and presuming the malicious intent. It is not that the petitioner has been deprived of his liberty but to carry out investigation is also the statutory obligation of the investigators. If the prosecution is launched, it is always permissible to an accused to seek discharge and even to challenge the charges, if framed. However, disrupting proceedings at initial stage would violate the duty to investigate the crime and bring guilty to justice to do justice to the victim. An analysis of the above does not make a case for issuing a formal notice and seeking a reply, and no response is required for the following clarifications. Consequently, the petitioner does not justify any prayer except that the further investigation will also be carried out in accordance with law and that in the future also, if any information is shared, the same shall again be shared within the parameters of section 66 of PMLA. Petition dismissed.

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• Service Tax

• 2024 (3) TMI 75
  Cenvat Credit - input service - Air Travel Agent Service - Catering Service - CHA Service (Export) - Courier Service - Event Management Service - Group Term Insurance Service - Hotel Service - Rent a Cab/Car Service - Repair and Maintenance Service (Car) - Tour and Travel Service - Construction Service - HELD THAT:- In COMMISSIONER CENTRAL EXCISE COMMISSIONERATE, DELHI-III VERSUS M/S BELLSONICA AUTO COMPONENTS INDIA P. LTD. [ 2015 (7) TMI 930 - PUNJAB HARYANA HIGH COURT] it was held that service tax paid on the civil work and on lease rentals was admissible once the land which was taken on lease to construct the factory was being used by the manufacturer even indirectly by the manufacturer of the final products namely metal sheets and the benefit could not be denied - the findings of the Tribunal denying the said benefit had been set aside in the said case, which would be directly applicable to the present case, which was also for the period from 2007 to 2010. It was also noticed the amendment made in the year 2011 to Rule 2(l) of the 2004 Rules went on to show that services were excluded from the definition of input service thereafter and if the services were not covered by the said rule, it would not have been necessary to introduce the amendment. Therefore, it was held that the setting up of a factory premises providing for output services would fall into the definition of input service and the amendment was not retrospective and not applicable. In COMMISSIONER OF CENTRAL EXCISE DELHI-III VERSUS M/S MARUTI SUZUKI INDIA LTD. [ 2016 (11) TMI 237 - PUNJAB AND HARYANA HIGH COURT] , the Division Bench granted the benefit under Mandap Keeping Service and Rent a Cab Service and while relying upon the judgment passed in M/S. COCA COLA INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, PUNE-III [ 2009 (8) TMI 50 - BOMBAY HIGH COURT] and definition of input service as such was considered by holding that same should be ordinary allowed as long as a connection would be there between input stage goods and service and the interpretation of the revenue would be against the Cenvat credit scheme. Thus, no substantial question of law arises as contended by counsel for the appellant - The appeal stands dismissed, accordingly.

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• 2024 (3) TMI 74
  Non-payment of service tax - Construction of Residential Complex Service (CRCS for short) and Work Contract Service (WCS) - appellant appears to have informed that their customers did not pay service tax and hence, the same was not paid from October 2008 onwards - HELD THAT:- Undisputedly the service rendered by the appellant is clearly in the nature of works contract since in respect of all the projects undertaken by it, the agreements itself clearly specify that it was for the developer to use standard materials for construction. Further, the Revenue has not at all disputed that the appellant was only a builder and hence, it is clear that the appellant, as a builder/developer had provided the work contract services and the period involved is prior to 01.07.2010, which is before the introduction of explanation to Section 65 (105) (ZZZH) vide Finance Act, 2010. Benefit derived from the order of principal Bench of CESTAT, New Delhi in the case of M/S KRISHNA HOMES VERSUS CCE, BHOPAL AND CCE, BHOPAL VERSUS M/S RAJ HOMES [ 2014 (3) TMI 694 - CESTAT AHMEDABAD] wherein, the Ld. Bench has examined the effect of introduction of the above explanation to Section 65 (105) (ZZZH) ibid, wherein it has been clarified that no Service Tax could be levied prior to 01.07.2010 under CRCS for which reference has also been made to the clarification issued by CBSE in Circular No.108/2/2009-Service Tax dated 29.01.2009. Further, the question as to whether the above would apply to cases where the services were rendered as WCS was also examined and answered in affirmative in the above case as well, by the Ld. Bench, by following the decision of the Apex Court in the case of M/S. LARSEN TOUBRO LIMITED ANOTHER VERSUS STATE OF KARNATAKA ANOTHER [ 2013 (9) TMI 853 - SUPREME COURT] . The demand raised against the appellant lacks merit and hence, the impugned order cannot sustain - Appeal allowed.

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• 2024 (3) TMI 73
  Levy of Service Tax - Business auxiliary services (BAS) - Purchase and sale booked in the books of appellant - Direct sale by Mercury and only margin booked in the books of the appellant - Warranty Repairs - period Financial Year 2010-11 to Financial Year 2013-14 - Extended period of limitation - penalty - HELD THAT:- Law is well settled that set off /adjustment against payables is to be considered as receipt of convertible foreign exchange and needs no reiteration as held by Hon ble SC in JB. BODA AND COMPANY PRIVATE LIMITED VERSUS CENTRAL BOARD OF DIRECT TAXES [ 1996 (10) TMI 70 - SUPREME COURT] and followed in several decisions for service tax in COMMISSIONER OF CENTRAL EXCISE JAIPUR-1 VERSUS M/S NATIONAL ENGINEERING INDUSTRIES LTD. [ 2017 (10) TMI 1496 - RAJASTHAN HIGH COURT] , BHARAT RE-INSURANCE BROKERS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE CUSTOMS AND SERVICE TAX, HYDERABAD-II [ 2020 (6) TMI 259 - CESTAT HYDERABAD] . Having accepted in SCN OIO, that payments are received and adjusted in running account against the payables in foreign currency to the same foreign party outside India, there are no reason to deviate from the settled law, that set off is sufficient fulfilment of the condition of receipt in convertible foreign exchange. In absence of any other contradiction alleged in the SCN/OIO, the demand raised under BAS category for the subject period does not sustain. Even for the period after 01.07.2012, the above legal position holds good and cannot be made subject to service tax more so when Section 66B, ibid provides no levy for the services rendered outside India. Demand made under renting category - HELD THAT:- Perusal of the agreements and related documents makes it clear that transaction is in the nature of cold storage facility not mere renting. Accordingly, the demand does not sustain under renting category. Demand made under the category of MMRS on services rendered to Navy / coastal guards - HELD THAT:- The Appellant admittedly paid service tax when provided to other service recipient, and claimed exemption when provided to Navy /coastal guards etc. Perusal of the relevant work orders and invoices clearly evidences that services are rendered to Navy/coastal guards only and rightly eligible for the exemption from service tax during the subject period. When the demands were raised after detailed audit of the records, it is inherent that department was in possession of the related work orders, invoices, ledgers and bank statements etc. Viewing from that background, it is incorrect to say that Appellant did not submit the supporting documents for the exemptions claimed. Demands made under MMRS category for warranty claims - HELD THAT:- Warranty claims were raised for the composite works involving service material portion, the demand cannot be made under service category of MMRS . There are force in both arguments of the Appellant and accordingly set aside the demands. Time limitation - penalties - HELD THAT:- There are force in the submissions of the Appellant, that the facts were known to the department as evident from the previous SCN s. The issues are subject to varied interpretations and confusion was prevailing. Further, appellant maintained proper books of accounts and the present demand have been raised based on the records maintained by the appellant and there is no mis representation, or any suppression or mis statement or fraud on the part of the appellant. Accordingly, extended period of limitation is not invocable in the present case. For the same reasons, all the penalties needs to be set aside. The impugned order is set aside - appeal allowed.

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• 2024 (3) TMI 72
  Levy of service tax - Mining Services - appellant is responsible to operate and maintain the HPMACs, owned by ONGC, to produce and supply compressed air to ONGC - HELD THAT:- It is well settled law on this issue that the person in whose hand the excisable goods are produced is liable to discharge the Central Excise duty liability. In the present case, Compressed Air is specified as excisable goods under Tariff Heading No. 28530030 and the process of compression has resulted in the production of Compressed Air from the raw material atmospheric air leading to the emergence of a new identifiable commodity, which is different from the raw material that was used. In the case of INDIAN OXYGEN LTD. VERSUS COLLECTOR OF C. EX. [ 1989 (6) TMI 145 - CEGAT, NEW DELHI] , which has been upheld by the Hon ble Supreme Court in COLLECTOR VERSUS INDIAN OXYGEN LTD. [ 1999 (9) TMI 1006 - SC ORDER] it was inter alia held that compressed gas was liable to duty under item 68 of the then Central Excise Tariff Act, 1985. The contention of the Appellant is agreed upon that the ownership of the plant and machinery used for the manufacture of 'excisable goods' cannot be a criteria for charging Central Excise duty. Accordingly, the activity undertaken by the appellant in both the cases amounts to manufacture of 'Compressed Air' chargeable to Nil rate of duty and hence, no Service Tax is leviable on such activities. As per these Contracts, the appellant operated the said HPMACs at the mining sites of ONGC and OIL to produce and supply excisable goods viz. Compressed Air , falling under the Central Excise Tariff Heading No. 28530030 chargeable to 'Nil' rate of duty, for use in the oil exploration. In both the cases, the appellant was responsible only for the production of 'Compressed Air'. Oil exploration was not the responsibility entrusted to the appellant. The appellant has not been paid based on the quantum of oil explored - the activity undertaken by the appellant cannot be categorized as mining service as defined under Section 65(105)(zzzy) of the Finance Act, 1994. The demands of Service Tax along with interest confirmed in the impugned order under mining service is not sustainable. Since the demand of Service Tax is not sustainable, the question of imposing penalties does not arise. The impugned order is set aside - appeal allowed.

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• 2024 (3) TMI 71
  Levy of service tax - Dredging Services undertaken by the Appellant as a sub-contractor of M/s MBL - Construction Service - Goods Transport Agency Service - time limitation - penalties. Levy of service tax - 'Dredging Services' as a sub-contractor to the main contractor - contention of the Appellant is that as the main contractor M/s. MBL has discharged service tax on the gross amount received by them towards the whole amount received rendering of 'Dredging Services', they are not liable to pay service tax again for the 'Dredging Service' as a sub-contractor - HELD THAT:- The Department had also earlier clarified that the sub-contractor is not liable to pay service tax when the main contractor pays service tax on the gross value received for the services rendered. Thus, we observe that there were confusions regarding the liability for payment of service tax by the sub-contractor, when the main contractor pays service tax on the gross value. Later, the Board issued a further clarification vide Circular No. 96/7/2007-ST dated 23.08.2007, clarifying that sub-contractors are liable to pay service tax even if the main contractor pays service tax on the gross value. This Circular, being oppressive in nature towards the sub-contractors, can be applied only prospectively as held by the Hon ble Supreme Court in the case of SUCHITRA COMPONENTS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GUNTUR [ 2007 (1) TMI 4 - SUPREME COURT] - for the demand of Rs.38,16,593/- confirmed under Dredging Services rendered by the Appellant as a sub-contractor pertaining to the period 2005-06 and 2006-07, it is held that the demand confirmed in the impugned order is not sustainable. Levy of service tax - dredging services undertaken by the Appellant in the river Daya and at the lagoon of Chilka lake, as a sub-contractor - HELD THAT:- The said demand has been raised for the period 2008-09 to 2011-12. It is also observed that all the amounts received by the Appellant for the dredging services rendered have been recorded in their books of accounts, i.e., in the Balance Sheet and Profit Loss Account. The figures mentioned in the statutory records are not challenged by the Department. The Notice has not brought in any evidence to substantiate the allegation of suppression of any information on the part of the Appellant. Moreover, the 'Dredging Service' rendered by the Appellant was within the knowledge of the Department - the said demand covers the period up to September 2011. The Appellant has been filing ST-3 returns regularly. During the relevant period, the demand, if any, for the normal period of limitation has to be issued within a period of one year from the relevant date, i.e., the date of filing of the return. The Appellant has filed the ST-3 return for the period April 2011 to September 2011 in October 2011. Thus, it is observed that the entire demand in the Show Cause Notice dated 18.10.2013 was raised beyond the normal period of limitation. Accordingly, the demand of service tax of Rs.1,15,68,852/- confirmed on Dredging Services in the impugned order by invoking the extended period of limitation is not sustainable. Penalty - HELD THAT:- As there is no evidence on record to establish suppression of facts with intention to evade payment of service tax, the penalty imposed equivalent to the service tax confirmed is not sustainable. Appeal allowed.

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• 2024 (3) TMI 70
  Interpretation of statute - transportation of goods - whether sale is not mandatory in relation to the word goods for purpose of levy of service tax? - applicability of the concept of marketability to the instant case - HELD THAT:- The contention cannot be agreed upon that the said components are not goods as they are not sold ordinarily. This Tribunal in M/S. DIESEL LOCO MODERNIZATION WORKS VERSUS CCE, CHANDIGARH [ 2011 (3) TMI 161 - CESTAT, NEW DELHI] had categorically held that Notification No.29/2008-ST dated 26.06.2008 pleaded by the appellant in support is not applicable to GTA Services which is covered by sub-Clause (zzp) of Clause 105 of Section 65 of the Finance Act, 1994 whereas the exemption under the said Notification is meant for sub-clause (zzzz) of Clause 105 of Section 65 of the Act ibid. Undoubtedly, the component manufactured and transported by the appellant are covered within the definition of Goods under the Finance Act, 1994 being movable property and satisfying the definition of the term under Section 2 of the Sale of Goods Act, 1930. Also the unit has been registered as a factory under the Factories Act. The appellants are covered within the definition of term other persons‟, required to pay service tax as recipient of GTA Services under Rule 2(1)(v)(a) of the Service Tax Rules, 1994. There being no distinction in law between a private factory or a government body using GTA Services. No exemption is therefore admissible to the appellant either as a Government factory or as a unit of the Ministry of Railways. The tax demand along with interest as confirmed by the learned Appellate Authority is clearly payable by the appellant. After considering the facts and circumstances of the case and the appellant belonging to the Ministry of Railways enabling the discharge of sovereign functions, as pointed out by the learned Advocate, this is a fit case for waiver of any penal liability imposed. The appeals are, therefore, disposed off upholding the tax demand and interest while setting aside the penal liabilities.

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• 2024 (3) TMI 69
  Non-payment of service tax - Business Auxiliary Service - Manpower Recruitment or Supply Agency Service - Management or Repair Service - amount which has been received by them from the Heavy Water Board, Department of Atomic Energy - issuance of two SCN - for the same activity, the second show cause notice has demanded service tax under the categories of Business Auxiliary Service, Manpower Recruitment or Supply Agency Service and Maintenance or Repair Service - time limitation - HELD THAT:- It is found that two show cause notices, first dated 16.06.2005 and second dated 01.05.2009 have been issued on the same facts of the matter. However, in the first show cause notice, service tax has been demanded under the category of Maintenance or Repair Service while in the second show cause notice the demand has been made invoking extended time proviso alleging suppression of facts etc and service tax has been demanded under the categories Business Auxiliary Service, Manpower Recruitment or Supply Agency Service and Maintenance or Repair Service. The Adjudicating Authority has decided both the show cause notices on the same date i.e. 28.12.2012 and has confirmed the demand of service tax for the for the same set of activities undertaken by the appellant under two categories of services namely Maintenance or Repair Service and in the second order-in-original under Business Auxiliary Service, Manpower Recruitment or Supply Agency Service, and Maintenance or Repair Service - the confirmation of demand of service tax for the same activity i.e. manufacturing of Heavy Water of nuclear grade for Department of Atomic Energy under the different categories by the Adjudicating Authority clearly indicates no application of judicious mind and demand has been confirmed in a perfunctory manner without any cogent reasons. The definition of term manufacture as provided under Section 2(f) of Central Excise Act, 1944 is an inclusive definition which says that activity of manufacture and resulted into a new and identifiable product having distinct name, character and use . Section 2(d) of Central Excise Act, 1944 provides the definition of excisable goods and says that excisable goods are one which is specified in the first and second schedules of the Central Excise Tariff Act, 1985 - the process of converting deuterium into Heavy Water is nothing but manufacturing of Heavy Water as defined under Section 2(f) of Central Excise Act, 1944. It is also opined that merely because Heavy Water falling under Chapter 28.45 of the Central Excise Tariff Act, 1985 attracts nil rate of duty will not make it non-excisable goods. Time Limitation - HELD THAT:- On the issue of second show cause notice being time-barred, it is clear from the facts of the matter that first show cause notice was issued on 16.06.2005 demanding service tax on the same set of activities for the period 01.07.2003 to 31.03.2004 and the second show cause notice was issued by the department on 01.05.2009 covering the period 2004 to November 2006 invoking extended time proviso under Section 73 of the Finance Act, 1994 on the same set of activities of the operation of Heavy Water plant by the appellant. Since the department was already aware about the activities undertaken by the appellant and the show cause notice has already been issued on 16.06.2005 still they proceeded to issue second show cause notice without providing any reason - on this very count also second show cause notice is clearly time-barred and therefore need to be set-aside on the ground of limitation. The impugned orders-in-original are without any merit and therefore, the same is set aside - Accordingly, the appeals are allowed.

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• 2024 (3) TMI 68
  Levy of service tax - notional interest on the security deposit collected by the appellant at the time of renting out the property and fixing the monthly rent - HELD THAT:- The issue is no longer res-integra and has been decided in favour of the assessee by the this Tribunal in Murali Realtors Private Ltd vs Commissioner of Central Excise, Pune [ 2014 (9) TMI 461 - CESTAT MUMBAI] which was followed in M/s Singhal Premises, Pvt Ltd Vs Commissioner, Central Excise, Jaipur [ 2023 (10) TMI 1166 - CESTAT NEW DELHI] , where the Bench held that service tax could not have been levied on the notional interest calculated by the department on the interest fee security deposit collected by the appellant from tenants. In the present case, the appellant had not disputed their liability to pay service tax on the rental amount of the property as they are paying service tax on the same and therefore the dispute is limited regarding the liability to pay service tax on the notional interest earned by them on the amount of security deposits received from the service recipients - no service tax can be levied on the appellant in respect of the notional interest earned on the security deposits. Since the main issue decided in favour of the appellant, it is not necessary to go into the other grounds of challenge raised in the appeal. The impugned orders are set aside - appeal allowed.

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• Central Excise

• 2024 (3) TMI 67
  Reversal of Cenvat Credit - Job work - Availment of credit of duty paid on procurement of goods without being reversed on transfer to the contracted manufacturer under procedure prescribed in rule 4(5)(a) of CENVAT Credit Rules, 2004 - finished goods not having been returned to supplier - availment of credit of tax paid on goods that were not received in premises of appellant - HELD THAT:- The CENVAT credit scheme rests upon availment of credit and its continued existence till utilization; there is, therefore, threshold entitlement flowing from rule 3 of CENVAT Credit Rules, 2004 and retention eligibility flowing from rule 4 and rule 6 of CENVAT Credit Rules, 2004. The threshold entitlement of credit of ₹ 2,67,44,448 is not in dispute and it is only its continued retention, after the goods were dispatched to contracted entities, which has been sought to be disallowed owing to the finished goods not having been returned to the appellant or, in the alternative, its actual deployment in the finished product having been demonstrated. In doing so, the adjudicating authority has discarded the permission accorded by jurisdictional office for clearance from the premises of the contracted entity and, that too, by disclaim of job worker status. The availment of credit of ₹ 2,41,49,130 rests upon rule 3 of CENVAT Credit Rules, 2004 which is predicated upon discharge of duty liability and upon conformity with inputs in rule 2 thereof. The denial has been grounded on non-receipt at premises of the appellant. In doing so, the adjudicating authority has not examined the implied extending of the premises of manufacturer to that of job-worker which is implicit in the excise duty liability revolving on job-worker that becomes eligible credit in the account of the principal manufacturer upon bearing incidence of duty liability. That the impugned order has discarded claim of job-worker status, and inadequately so, precluding consideration of this eligibility hinders us from deciding thereto warrants rectification. The dispute warrants fresh determination within the framework of the observations - the impugned order set aside - matter remanded back to the adjudicating authority for fresh disposal.

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• 2024 (3) TMI 66
  CENVAT Credit - though the tools and moulds purchased by them were continue in use for manufacture of excisable automobile components however same has been shown as sold on record on VAT-able invoice issued to M/s. Ford India Pvt. Limited - applicability of provisions of Rule 3(5A)(a) of the Cenvat Credit Rules, 2004 - HELD THAT:- From a plain reading of Rule 3(5A)(a), it can be seen that Cenvat credit is to be reversed only if the capital goods on which Cenvat credit has been availed by any assessee, have physically been removed - It is found from the entire proceedings that no evidence has been adduced by the department to prove that the tools and moulds which were purchased and used by the appellant have been physically removed from their factory of manufacture and therefore, since the tools and moulds were being used in manufacture of excisable goods it was wrong on the part of the department to ask for the payment of Central Excise duty on such tools and moulds that these are physically available in the appellant s manufacturing premises. Reliance can be placed in the case of M/S. L.G. BALAKRISHNAN AND BROS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, TRICHY [ 2016 (6) TMI 829 - CESTAT CHENNAI] where it was held that We note that the invoices issued did not contain the details of any removal, mode of transport, rate of duty, duty payable thereon, etc., as per the requirement of Rule 11(2) of Central Excise Rules, 2002. We also note that based on these invoices no credit can be availed by any buyer as these are not in terms of Rule 9 of Cenvat Credit Rules, 2004. In view of settled legal position regarding need for physical removal of capital goods or inputs, in order to attract the provisions of Rule 3(5) of Cenvat Credit Rules, 2004, we find that there is no justification to invoke such provision to demand and recover any amount from the appellant in this case. Timpugned order-in-original is without any merit and the same is set aside - appeal allowed.

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• 2024 (3) TMI 65
  Issuance of second SCN without adjudicating first SCN - Valuation - adoption of incorrect valuation for goods cleared to its depot on normal transaction value which should have been cleared on the latest aggregate quantity of goods sold as against the price at which most number of goods were sold - violation of Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - HELD THAT:- After adjudication order in respect of first show-cause notice was issued that had attained finality by dropping the demand by the CESTAT on 11.01.2018, the other show-cause notice was pursued and adjudication order was passed subsequent thereto. It seems that ignoring all legal provisions including the constitutional right of protection against double jeopardy that is being tried repeatedly for the same act of alleged omission despite a clear finding of the Hon'ble Supreme Court made in Osaka Alloys And Steels Pvt. Ltd. [ 2007 (9) TMI 615 - SC ORDER ] that even without adjudication of the first show-cause notice, issue of second show-cause notice raising the demand is without jurisdiction, besides being time barred and in LUPIN LIMITED VERSUS UNION OF INDIA [ 2012 (6) TMI 785 - GUJARAT HIGH COURT] it was also held that issue of another show-cause notice without any new material would be wholly futile and prejudicial to the Assessee and would be an abuse of the process of law. The order passed by the Commissioner of Central Tax (Appeals-I), Pune on the basis of a subsequent show-cause notice, after the first was held to be not sustainable by the CESTAT, is without jurisdiction and the same is, therefore, set aside with consequential relief - Appeal allowed.

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• CST, VAT & Sales Tax

• 2024 (3) TMI 64
  Time Limitation for reopening of assessment - impugned notice were issued after a lapse of five years for these assessment years - HELD THAT:- If no returns were filed or if the returns filed were incomplete or returns filed were incorrect or did not accompany any of the documents prescribed with proof of payment of tax, the Assessing Officer has to make a proper enquiry and assess a dealer to the best of this judgement, subject to such conditions as may be prescribed, after the completion of the year. There are no records to substantiate that the petitioner had filed returns in time for the respective assessment years in various assessment circles as is contemplated in Rule 7 of the TNVAT Rules, 2007. No Assessment Order was passed by the Assessing Officer for the years in question. Therefore, question of either inferring deemed assessment as is contemplated under section 22 (1) and (2) of the TNVAT Act, 2006 or actual assessment would not arise for the purpose of computation of limitation under Section 27 of the TNVAT Act, 2006. Since no Assessment Order came to be passed, question of the petitioner getting an opportunity to file a fresh return as is contemplated under section 22 (6) (a) (b) or (c) of the TNVAT Act, 2006 also did not arise - Since no returns were filed by the petitioner in time or thereafter as is prescribed under Rule 7 of the TNVAT Rules, 2007, it has to be construed that the Impugned Assessments dated 23.12.2019 is the first assessment passed by the Assessing Officer under Section 22(4) of the TNVAT Act, 2006. The limitation for reopening the Assessment under Section 27 of the TNVAT Act, 2006 will apply only six years thereafter. Therefore, there is no merits in the challenge to the Impugned Order. Since the demand has now been confirmed there cannot be any interference with the Impugned Notices issued to the respective banks attaching the accounts of the petitioners maintained with them. Petition dismissed.

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• Indian Laws

• 2024 (3) TMI 63
  Automatic Vacation of the interim order / Stay Order after six months - judicial legislation or not - Whether this Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can order automatic vacation of all interim orders of the High Courts of staying proceedings of Civil and Criminal cases on the expiry of a certain period? - Whether this Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can direct the High Courts to decide pending cases in which interim orders of stay of proceedings has been granted on a day-to-day basis and within a fixed period? HELD THAT:- There cannot be automatic vacation of stay granted by the High Court. The direction issued to decide all the cases in which an interim stay has been granted on a day-to-day basis within a time frame, not approved. Such blanket directions cannot be issued in the exercise of the jurisdiction under Article 142 of the Constitution of India - both the questions framed is answered in the negative. Following conclusions have been arrived: a. A direction that all the interim orders of stay of proceedings passed by every High Court automatically expire only by reason of lapse of time cannot be issued in the exercise of the jurisdiction of this Court under Article 142 of the Constitution of India; b. Important parameters for the exercise of the jurisdiction under Article 142 of the Constitution of India which are relevant for deciding the reference are as follows: (i) The jurisdiction can be exercised to do complete justice between the parties before the Court. It cannot be exercised to nullify the benefits derived by a large number of litigants based on judicial orders validly passed in their favour who are not parties to the proceedings before this Court; (ii) Article 142 does not empower this Court to ignore the substantive rights of the litigants; (iii) While exercising the jurisdiction under Article 142 of the Constitution of India, this Court can always issue procedural directions to the Courts for streamlining procedural aspects and ironing out the creases in the procedural laws to ensure expeditious and timely disposal of cases. However, while doing so, this Court cannot affect the substantive rights of those litigants who are not parties to the case before it. The right to be heard before an adverse order is passed is not a matter of procedure but a substantive right; and (iv) The power of this Court under Article 142 cannot be exercised to defeat the principles of natural justice, which are an integral part of our jurisprudence. c. Constitutional Courts, in the ordinary course, should refrain from fixing a time-bound schedule for the disposal of cases pending before any other Courts. Constitutional Courts may issue directions for the time-bound disposal of cases only in exceptional circumstances. The issue of prioritising the disposal of cases should be best left to the decision of the concerned Courts where the cases are pending; and d. While dealing with the prayers for the grant of interim relief, the High Courts should take into consideration the guidelines prescribed. The reference is answered accordingly.

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