TMI Tax Updates - e-Newsletter
April 26, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy CST, VAT & Sales Tax

Highlights / Catch Notes

GST

• Concessional rate of duty - Works contract - tender agreement for wet leasing of Robotic spot-welding machine and laser cutting and welding machine - comprehensive Annual Maintenance Contract (AMC) - it is evident that when the activity is not in the capacity of ‘Public authority’, then the activity is for ‘business’ only. ICF is putting up the said Plant to manufacture Stainless Steel coaches, which is not an activity undertaken as a ‘Public Authority’ and therefore, the benefit of the above entry is not applicable to the appellant in respect of CAMC as claimed by them and we hold so. - AAAR
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• Grant of anticipatory bail - alleged non payment of GST - It is settled position that the applicant apprehending arrest need not be made an accused in a crime to seek the relief of anticipatory bail. Its is sufficient in case he succeeds in establishing that his apprehension of arrest is reasonable - the applicant is entitled to the relief of anticipatory bail. - HC
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• Refund of ITC or claim of duty draw back - the petitioner, for the month of July, 2017 has opted to stick with the claim of duty draw back seeing as the amount of drawback is higher than the ITC for the months of August and September, 2017 - On a plain reading of Section 54 (3) it is found that the claim of refund to be in order. - Paragraph 2.5 of the circular, insofar as it is contrary to the statutory provisions of Section 54(3) is bad in law. - HC
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Income Tax

• Validity of Settlement Commission order - In the present case, the petitioner could not able to establish that he approached the Settlement Commission with clean hands and the element of true and full disclosure as contemplated under Section 245(C) had not been established before the Settlement Commission and therefore, there is no perversity or infirmity as such in respect of the findings arrived. - HC
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• Stay application - Since the stay application has been filed pending appeal and in light of Circulars issued by the Central Board of Direct Taxes (CBDT) directing the Assessing/Appellate Authorities to hear and dispose stay applications in a time bound fashion - HC
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• Offence u/sn 276C(2) - failure to pay the income tax based on the self assessment - A mere failure to pay the amount due (tax, interest or penalty) will not satisfy the requirement which would constitute the offence under Section 276C(2) of the Income Tax Act. Hence the crime registered and the further proceedings thereof will not serve any purpose, if it is proceeded further. The same is quashed. - HC
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• Late fee u/s 234E - Late filing of TDS return - the provision of Section 234E of the Act is charging provision i.e. substantive provision which could not be applied retrospectively, unless it is expressly provided in the Act, to levy the late fee for any delay in filing the TDS statement for the period prior to 01.06.2015. The counsel for the assessee has rightly contended that in the absence of enabling provisions u/s 200A of the Act, such levy of late fee is not valid - AT
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Customs

• Issuance of summons - matter already pending before AAR - since the matter is pending at the stage of summons, it is for the parties to take things forward in a proper manner and in accordance with law, bearing in mind that proper procedure and protocol should be followed in matters of conduct of enquiry, investigation and adjudication - HC
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VAT

• Suo moto revision - Eligibility for deduction of the entire sub-contractors' payments made - Both the circumstances must co-exist before the revisional authority can initiate suo moto revisional proceedings. That, it is not sufficient to vest power in the respondent/authority to exercise suo moto revision merely because an order is erroneous - there must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. - HC
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• Constitutional validity - Amendment to VAT after introduction of GST - It is pertinent to note that the power to enact Section 174 of the KGST Act can be traced to Article 246A, which, when read with Article 366(12-A), confers power on the States to make laws with respect to any tax on supply of goods. Accordingly, Section 174 is a validly enacted piece of legislation and cannot be said to be without legislative competence - HC
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Articles

• WHEHTER LIMITED LIABILITY PARTNERSHIP FIRM CAN BECOME A PARTNER OF A PARTNERSHIP FIRM?

News

• Government extends certain timelines in light of the raging pandemic

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Case Laws:

• GST

• 2021 (4) TMI 981
  Concessional rate of duty - Works contract - tender agreement for wet leasing of Robotic spot-welding machine and laser cutting and welding machine - activities under tender agreement for comprehensive Annual Maintenance Contract - benefit under Schedule VI(a) and VI(b) are eligible for serial no. 3 (v)(a) or 3 (vi) of Notification No.11/2017-CT(Rate) dated 20.06.2017 as amended and corresponding entry under state notification. HELD THAT:- In the case at hand, all the Supplies in the tender are not supply made by the appellant to ICF in as much as in respect of the disposal of the obsolete M Ps, the supply is by the ICF and the appellant is the recipient. Further, the supplies are not made in conjunction with each other in as much as the Wet-leasing of M Ps is for a period of 10 years; Construction, supply, installation, commissioning, etc is to be completed within 20 months of LOA and Comprehensive AMC is to be supplied for 5 years after the warranty period. Therefore, the supplies under the Tender in Schedule-I to Schedule-VI are not supplies made to a recipient nor done in conjunction with each other and hence the entire supplies based on the Tender is not a Composite Supply - there is no merit in the claim of the appellant that the supplies based on the entire tender is a Composite supply of Works Contract and the benefit of entry S.No.3(v) of notification No.11/2017-C.T.(Rate) dated 28.06.2017 is not available for the entire tender. As per the contract agreement for wet-leasing, it is an activity consisting of leasing of M Ps in working condition, providing skilled and unskilled manpower, spares, consumables for the entire period of leasing during which the leased goods are reflected in the books of the lessor. The lease charges are paid on a quarterly basis to the appellant based on the productivity. The M Ps are transferred to ICF at the, end of the lease period. Just because, there is a transfer of property in goods after the lease period, the activity is not a works contract. The activity of wet-Leasing is squarely classifiable under SAC 9973 Leasing or rental services with or without operator as held by the LA. Therefore the benefit of entry at 3(v)(a) of Notification No.11/2017-C.T.(Rate) dated 28.06.2017 is not applicable in respect of Wet-Leasing of the M Ps. CAMC, the activity being Maintenance - HELD THAT:- The same is not covered under entry 3(v) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 as amended, which is applicable only to works contract by way of construction, erection, commissioning or installation of original works pertaining to railways. Benefit of entry Sl.No. 3 (vi)(a) of the Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 as amended - HELD THAT:- The above entry is applicable in the case of composite supply of works contract of maintenance of a civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession to the class of receivers specified. ICF is a Production unit of Railways and belongs to Central Government and manufacturing steel coaches is not an activity where the Government is engaged as public authorities. As per the Explanation to the said entry, it is evident that when the activity is not in the capacity of Public authority , then the activity is for business only. ICF is putting up the said Plant to manufacture Stainless Steel coaches, which is not an activity undertaken as a Public Authority and therefore, the benefit of the above entry is not applicable to the appellant in respect of CAMC. There are no reason to interfere with the Order of the Advance Ruling Authority in this matter. The subject appeal is disposed of accordingly.

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• 2021 (4) TMI 980
  Grant of Interim Bail - learned Senior Advocate further submits that his client shall file an Undertaking within five days to the effect that she shall not create any encumbrance with respect to the properties of the business as well as her personal properties till further orders and that his client will deposit the amount representing the admitted duty element - HELD THAT:- Issue notice, returnable on 10.05.2021 subject to conditions imposed.

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• 2021 (4) TMI 979
  Grant of anticipatory bail - alleged non payment of GST - non -filing of GSTR 3B returns for the period from October onwards - Sections 18 and 18A of the SC/ST( Prevention of Atrocities) Act, 1989 - HELD THAT:- The applicant has not yet been made an accused. On the basis of the alleged statement given by Abdul Saleem, the applicant has allegedly dealt with the filing of returns of the Agency. He had allegedly made false invoices. But as of now, no concrete evidence sufficient either to implicate him as an accused or proceed against him has been collected. Admittedly, A.R Agencies is a proprietorship belonging to Rajoob. He alone is to answer for anything done by the agency. Applicant has nothing to do with the Agency and has not gained any income from that business. His Bank accounts are available for scrutiny, and the applicant is willing to cooperate by producing those documents. His custodial interrogation may not be necessary under the circumstances. The CGST officials had sufficient power to implicate the applicant in case they had the required materials with them. The fact that they have not arraigned him as an accused indicates lack of material. The applicant's apprehension of arrest is reasonable, because Abdul Saleem, who is also not a proprietor, has been arrested. It is settled position that the applicant apprehending arrest need not be made an accused in a crime to seek the relief of anticipatory bail. Its is sufficient in case he succeeds in establishing that his apprehension of arrest is reasonable - the applicant is entitled to the relief of anticipatory bail. The bail application is allowed and the applicant is directed to appear before the investigating officer within three weeks.

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• 2021 (4) TMI 974
  Validity of adjudication order - Commissioner (Adjudication), CGST, Delhi (East) is the competent officer - the grievance raised by Mr. Mittal with regard to the competency need not detain us, as, in effect, the contesting respondents have taken the position that, the demand made against the assessee, no longer subsists - HELD THAT:- It is only when, the contesting respondents were to recall and/or review the order, this aspect may gain significance, and, at that point in time, the petitioner would be entitled to contest the matter and, perhaps, revive the writ petition. Liberty, in that behalf, is granted in the event such a situation arises. Insofar as Mr. Mittal's grievance, as regards the typographical error, is concerned, he is right. Consequently, the order dated 05.04.2021 shall stand corrected to the extent that Mr. Hriday Singh s rank would be shown as Assistant Commissioner, CGST - Application disposed off.

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• 2021 (4) TMI 973
  Clandestine removal - cigarette sticks - perishable goods or not - prohibition in removal of 190 cartons comprising 22,26,000 cigarette sticks - HELD THAT:- Issue notice. Mr. Arunesh Sharma accepts service on behalf of Mr. Harpreet Singh, who appears on behalf of respondent nos. 1, 2, 4 and 5 while Mr. Aditya Singla accepts service on behalf of respondent no. 3. 4.1 Counter affidavits will be filed within four weeks. Rejoinders, thereto, if any, will be filed before the next date of hearing. 4.2 In the meanwhile, the petitioner is given liberty to approach the concerned officer for release of the goods qua which the prohibition order has been passed. List the matter on 25.05.2021.

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• 2021 (4) TMI 970
  Provisional attachment of bank account of the petitioner - HELD THAT:- The petitioner has made certain adhoc payments pending investigation as a consequence of which the attachment of the bank account of the petitioner i.e. Mutharamman Iron and Steels has been lifted. The challenge to the provisional attachment does not survive any longer and recording the aforesaid, this writ petition is closed.

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• 2021 (4) TMI 968
  Principles of Natural Justice - input tax credit - whether the term other civil structure used in the definition of Plant and Machinery restricts the Landfilling pit from considering it as Plant and Machinery and thereby restricts the Input Tax Credit (ITC) under Section 17(5)(d) of the GST Act? - HELD THAT:- In the present case principles of natural justice and fair play have certainly been violated as the report of the Principal Commissioner of Central Tax was never given to the petitioner at any point of time. The petitioner has now obtained a detailed report submitted by the Principal Commissioner of Central Tax from the Right to Information Act and he is having the aforesaid report. Keeping in view the fact that the principles of natural justice and fair play has been violated, alternative remedy will not be a bar in the present case, the matter is remitted back to the Authority for Advance Ruling - The petitioner shall appear before the Authority for Advance Ruling on 26.04.2021 - Petition allowed by way of remand.

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• 2021 (4) TMI 963
  Refund of ITC versus claim of duty draw back - option to select one scheme - Circular No.37/18-Customs dated 09.10.2018 - HELD THAT:- It is clear from a reading of Section 54(3) that the petitioner is entitled to one or the other of two benefits, i) duty draw back or ii) Input Tax Credit. Thus, an option has been extended to an assessee engaged in zero rated sale to either claim the benefit of duty drawback or the benefit of refund of ITC. That is why, in the present case, the petitioner, for the month of July, 2017 has opted to stick with the claim of duty draw back seeing as the amount of drawback is higher than the ITC for the months of August and September, 2017 - On a plain reading of Section 54 (3) it is found that the claim of refund to be in order. The orders of the appellate authority are set aside and the authority is directed to refund the sanctioned amounts within a period of six (6) weeks from today. In doing so, the contents of paragraph 2.5 of the Circular will not stand in the way since a circular cannot stand in the way of a benefit offered under a statutory scheme. Paragraph 2.5 of the circular, insofar as it is contrary to the statutory provisions of Section 54(3) is bad in law. Petition allowed.

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• 2021 (4) TMI 939
  Refund of excess GST paid - GST paid twice over or not - lawful bar or any impediment under procedural law, to justify availing of the refund claims - Section 54 of the CGST Act, 2017 - HELD THAT:- The appellant issued invoice No.1 to M/s RITES of taxable value ₹ 11,74,98,541/- and GST ₹ 1,40,99,825/- and also issued Debit Note of taxable value ₹ 9,53,12,728/- and GST ₹ 1,14,37,527/-. In this regard they issued Credit Note No.1 and 2 of that much of amount to negate effect of invoice and debit Note. The appellant further issued invoices No.2 in the name of MOHFW of taxable value of ₹ 11,83,89,351/- and GST ₹ 1,42,06,722/-. The appellant mentioned wrong place of supply in the invoice, therefore, the appellant issued credit Note 3 against invoice No.2. Thereafter the appellant issued invoice No.3 to MOHFW of the same value and GST. In this case, the appellant has issued 3 Credit notes and one debit note, therefore this case is covered under the provisions of Section 34 of the CGST Act, 2017. Further it is found that the appellant has reported credit notes involved GST amount of ₹ 3,98,70,298/- in GSTR-1 of Sept.,2018 (which has been filed after 30.09.2018) but from GSTR-3B of Sept.,2018, it appears that they did not adjust liability as per Section 34(2) of the CGST Act, 2017. The similar issue has been dealt by the Central Board of Indirect Taxes and Customs, New Delhi vide Circular NO.137/07/2020-GST dated 13.04.2020, wherein it has been clarified that liability may be adjusted subject to time limit and conditions as per provisions of Section 34 (2) of the CGST, Act, 2017 - the appellant should adjust the tax liability in the GST return for the month of June, 2018, August, 2018 and September, 2018, but the appellant has failed to do so, therefore, he is not entitled to claim refund as it is not a case of excess payment of tax. Whether the Appellant entitle to claim refund of excess paid tax in terms of Section 54 of the CGST Act, 2017? - HELD THAT:- In this case 3 credit notes/ one debit note has been issued for value and GST amount against one supply of goods, therefore it is covered under the provisions of Section 34 of CGST Act, 2017 and the appellant was required to adjust such excess payment of tax in GST returns of those particular month (s). Therefore, this case is not related to refund of excess payment of tax as per provisions of Section 54 of CGST Act, 2017. Appeal disposed off.

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• Income Tax

• 2021 (4) TMI 978
  Refund claim rejected in view of the provisions contained in section 239(2)(c) - assessee seeks refund of withholding tax concerning the assessment year - petitioner is involved in charitable activities as defined under Section 2(15) - whether Section 239 of the Act, as it obtained prior to its amendment, would apply in this case? - HELD THAT:- We are, presently, of the view that even if the stand taken by Mr. Sharma is presumed to be correct, the petitioner could, perhaps, seek condonation of delay in failing to move for refund, within time, in the manner prescribed by law by triggering the provisions of Rule 41 of the Income Tax Rules, 1962 ( Rules ). Therefore, for the moment, we are inclined to grant liberty to the petitioner to file an application under the aforesaid Rule, before the concerned officer of the Income Tax Department, to seek condonation of delay. The concerned officer will deliberate on the said application, and dispose of the same, as per law, after giving an opportunity of personal hearing to the authorized representative of the petitioner. Mr. Krishnan says that he will move such an application, for the said purpose, within 10 days from today. The concerned officer will be at liberty to hear the authorized representative of the petitioner, via the videoconferencing mechanism, given the fact that the Union Territory of Delhi is reeling under the pressure of the coronavirus cases. Thereafter, the concerned officer will pass a speaking order qua the application moved by the petitioner. The decision rendered in the petitioner s application will be transmitted to the petitioner.

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• 2021 (4) TMI 975
  Search and seizure proceedings - revenue seized original title deeds concerning 10 immovable properties - HELD THAT:- As revenue says that the title deeds will be released to the authorized representative of the petitioner within the next two weeks. The date of release will be intimated by Mr. Anand to the counsel for the petitioner. It is made clear that before releasing the title deeds, the concerned Assessing Officer will satisfy herself as to whether the statement made before us by Mr. Gulati that the transactions, which are subject matter of the title deeds, stand disclosed in the ITRs filed for the relevant assessment years, as indicated in Annexure-R of the instant petition. Issue notice.

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• 2021 (4) TMI 972
  Validity of Settlement Commission order - direction is sought for to reconsider the application and to pass a fresh order under Section 245(D)(4) of the Income Tax Act after affording opportunity to the petitioner - HELD THAT:- In the present case, the findings of the Settlement Commission are unambiguous and specific facts and circumstances were also relied on by the Settlement Commission to arrive a decision regarding true and full disclosure by the petitioner. Such a finding of fact need not be interfered with by the High Court under Article 226 of the Constitution of India, unless such facts are found to be error apparent. When there was an adjudication of facts and the Settlement Commission arrived a finding that factually the petitioner has not established that he filed an application under Section 245(C) with true and full disclosure, then the High Court is expected to exercise restraint in entertaining a writ proceedings under Article 226 of the Constitution of India. In the present case, the petitioner could not able to establish that he approached the Settlement Commission with clean hands and the element of true and full disclosure as contemplated under Section 245(C) had not been established before the Settlement Commission and therefore, there is no perversity or infirmity as such in respect of the findings arrived. As brought to the notice of this Court that the Settlement Commission has already been abolished with effect from 01.02.2021. This being the factum established, the writ petition fails and accordingly, stands dismissed.

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• 2021 (4) TMI 967
  Stay application - HELD THAT:- Despite a specific direction on 13.10.2020 to ascertain whether the stay application filed by the petitioner is pending, no confirmation is given in this regard today. Since a copy of the stay application is available at page No.67 of the typed-set filed in support of the writ petition, there is a direction to R2 to consider the same, hear the petitioner and pass orders within a period of four (4) weeks from today. Since the stay application has been filed pending appeal and in light of Circulars issued by the Central Board of Direct Taxes (CBDT) directing the Assessing/Appellate Authorities to hear and dispose stay applications in a time bound fashion, there shall be a stay of recovery of the disputed demand arising from order of assessment dated 25.12.2019 for a period of four (4) weeks from today or till disposal of stay application, whichever is earlier.

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• 2021 (4) TMI 966
  Reopening of assessment u/s 147 - invalid service of notice under Section 148(1) - HELD THAT:- The entire proceedings ought not to have been brought to naught, even if, the conclusion reached was that notice under Section 148(1) had not been served. According to Mr. Hossain, the matter could have been remanded to the AO, so as to give opportunity to the respondent/assessee to defend the proceedings. This is an aspect that we will consider once service is effected on the respondent/assessee. List the matter on 20.05.2021.

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• 2021 (4) TMI 964
  Disallowance u/s 14A r.w.r. 8D - HELD THAT:- As for the assessment year 2013-14, the assessee has not earned any exempted income. The aforesaid fact has not been disputed by the revenue, and therefore, the ITAT was justified in allowing the appeal preferred by the assessee. - Decided in favour of assessee.

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• 2021 (4) TMI 962
  Settlement Commission order 245D - HELD THAT:- As the facts stated by the petitioners can only be verified by the Settlement Commission, it may be left at the discretion of the Settlement Commission to take a decision whether such facts are correct or not and accordingly, the Settlement Commission may proceed with the matter. We have also been taken to the contents of the Finance Bill 2020-21 and the relevant provisions therein but as the said Bill has still not been enacted, the position which stands is to be taken as in the absence of the contents of the said Bill. Considering we dispose of this petition with the direction to the respondent No.1 Settlement Commission to consider the facts as stated by the petitioner and as recorded in the above order and if they are found to be correct, it may proceed to pass/issue appropriate formal orders on or before 31.03.2021 and if such facts are not found to be correct, the Commission would be free to proceed in accordance with law in its own wisdom and discretion.

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• 2021 (4) TMI 960
  Computation of capital gain - appellant entitlement to adjust the indexed cost of acquisition under the second proviso to Section 48 while computing capital gains on the sale of shade trees during the assessment year 2007-08 - Whether the findings of the Tribunal that it was incumbent on the appellant to allege during the assessment proceedings that the trees which were now sold were in existence prior to 01.04.1981 and no such material / evidence was brought on record before the Tribunal or the lower authorities is perverse, contrary to the record and illegal? - assessee submitted that the finding recorded by the Tribunal in this regard is perverse, as the same is based on surmises and conjectures - HELD THAT:- After perusal of the record, in our considered opinion, the factual controversy between the parties requires adjudication afresh, in the light of the material available on record. The impugned orders passed by the Tribunal / Commissioner of Income Tax (Appeals) as well as by the Assessing Officer are hereby quashed. The matter is remitted to the Assessing Officer to make a fresh assessment again.

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• 2021 (4) TMI 959
  Allowability of provisions for warranty by ITAT - whether the provision made by the assessee has been done in a scientific manner and whether it has followed the conditions stipulated by the Hon'ble Supreme Court in the case of Rotork Controls India Pvt. Ltd. [ 2009 (5) TMI 16 - SUPREME COURT] - Standing Counsel for the appellant would contend that the decision of this Court in the case of Renowned Auto Products [ 2013 (7) TMI 392 - MADRAS HIGH COURT] would bind this Court and the decision of the High Court of Karnataka will not be a binding precedent of this Court - HELD THAT:- The thin but marked difference is that the decision of the High Court of Karnataka is in the assessee's own case [ 2020 (8) TMI 768 - KARNATAKA HIGH COURT] in respect of the correctness of the provision made by the assessee for warranty. These transactions are identical and the assessee has been consistently following the said method for several assessment years, which has been noted by the High Court of Karnataka as well as by the Tribunal in the impugned order. Therefore, we are of the considered view that the Tribunal and the CIT(A) rightly held that the assessee had followed the scientific method and complied with the directions issued by the Hon'ble Supreme Court in Rotork Controls India Pvt. Ltd. The above reasons, we find no good grounds to interfere with the order passed by the Tribunal. - Decided against revenue.

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• 2021 (4) TMI 958
  Reopening of assessment u/s 147 - Non speaking order dated 29.01.2016 had been communicated pursuant to which the impugned assessment has been passed .- HELD THAT:- A perusal of the communication dated 29.01.2016 the relevant portion shows this is a non speaking order and merely conveys the decision over ruling the objection of the petitioner. The exercise carried out by the respondent was contrary to the decision of the Hon'ble Supreme Court in G.K.N Drive Shafts India Ltd. Vs Income Tax Officer , [ 2002 (11) TMI 7 - SUPREME COURT] Therefore the impugned assessment order passed by the respondent is liable to be quashed. Under these circumstances, the impugned assessment order dated 30.03.2016 is quashed by directing the respondent to pass a speaking order in terms of the decision of the supreme Court in G.K.N Drive Shafts India Ltd. Vs Income Tax Officer within a period of three months from the date of receipt of a copy of this order. Thereafter, the assessment proceedings can be completed in accordance with law.

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• 2021 (4) TMI 957
  Offence under Section 276 C (2) - failure to pay the income tax based on the self assessment - HELD THAT:- In the instant case, admittedly there is no concealment of any source of income or taxable item, inclusion of a circumstance aimed to evade tax or furnishing of inaccurate particulars regarding any assessment or payment of tax. What is involved is only a failure on the part of the petitioner to pay the tax in time, which was later on paid after availing installment facility with interest. The penalty imposed is now pending consideration before the appellate authority. So it would not fall under the mischief of Section 276 C of the Income Tax Act. Argument advanced based on the deeming provision Section 278 E of the Income Tax Act regarding the presumption as to existence of culpable mental state on a prosecution for any offence under the Act - A 'culpable mental state' which can be presumed under Section 278E of the Act would come into play only in a prosecution for any offence under the Act, when the said offence requires a 'culpable mental state' on the part of the accused. Section 278 E of the Act is really a Rule of Evidence regarding existence of mens rea by drawing a presumption though rebuttable. That does not mean that the presumption would stand applied even in a case wherein the basic requirements constituting the offence are not disclosed. The presumption can be applied only when the basic ingredient which would constitute any offence under the Act is disclosed. Then only the rule of evidence under Section 278 E of the Act regarding rebuttable presumption as to existence of culpable mental state on the part of accused would come into play. As such there is no scope for applying the rebuttable presumption under Section 278E of the Act in the instant case. What is dealt with in Prakash Nath Khanna's [ 2004 (2) TMI 3 - SUPREME COURT] case is the criminal liability that can be fastened under Section 276CC of the Act when there is wilful failure to furnish return. The expression failure used in Section 276 CC of the Act is with respect to submission of assessment and return and the same cannot be equated with any failure to pay the tax in time and the liability under Section 276 C of the Act. A mere failure to pay the amount due (tax, interest or penalty) will not satisfy the requirement which would constitute the offence under Section 276C(2) of the Income Tax Act. Hence the crime registered and the further proceedings thereof will not serve any purpose, if it is proceeded further. The same is quashed.

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• 2021 (4) TMI 956
  Condonation of delay - assessee submitted that the appeal filed by Shri Sanjiv Bhutra is barred by limitation by 998 days and the appeal filed by Shri Rajiv Kumar Bhutra is barred by limitation by 1013 days. - HELD THAT:- There was certain mis-communication between the assessees and their authorized representative. It is further stated that the assessees were under bonafide belief that their earlier Chartered Accountant would have filed appeal in time. But it came to their notice later that the appeals have not been filed and by that time the due date for filing appeals has elapsed. It is stated that the earlier Chartered Accountant has expired and hence they could not get any letter from him in support of their averments. Since the assessees had believed that the earlier Chartered Accountant would have filed appeals as per their request, they did not follow up the matter. Once they realized that the appeals have not been filed, the present appeals have been filed with delay. Under these set of facts and circumstances of the case, I am of the view that there is sufficient cause for not filing the appeals in time. However, as contended by Ld D.R, it is also the duty of the assessees to follow up their earlier CA with regard to filing of appeal in time. No prudent businessman would remain so inactive or idle, when it comes to the compliance of legal provisions, that too having financial stakes. Since the earlier CA has expired, their averments could not be cross verified. Accordingly, I am of the view that both the assessees should be imposed cost for being lethargic. Bogus Long-term capital gain arising on sale of shares - main contention of Ld. A.R. was that the A.O. has assessed the capital gain declared by the assessees as their taxable income without confronting the materials relied upon by the A.O. with the assessees - HELD THAT:- Assessee should be provided with an opportunity to rebut the evidences/statements relied upon by the A.O. for treating the longterm capital gain declared by the assessees as bogus in nature. As notice that the A.O. has not discussed about the opportunity, if any, given to the assessee to rebut the evidences. Accordingly, I set aside the orders passed by Ld. CIT(A) in the hands of both the assessees and restore all issues to the file of the A.O. for examining them afresh. After affording adequate opportunity of being heard to the assessees, the A.O. may take appropriate decision in accordance with law. Appeals are allowed for statistical purposes.

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• 2021 (4) TMI 955
  Penalty u/s 271(1)(c) - quantum addition arising from treatment of rental income (as to whether it came under the head income from house property or income from business ) - HELD THAT:- DR fails to dispute that the impugned issue is essentially regarding treatment of assessee s rental income than involving concealment of particulars or furnishing of inaccurate particulars of income u/s.271(1)(c) of the Act. Hon'ble apex court s landmark decision in CIT Vs Reliance Petroproducts Limited [ 2010 (3) TMI 80 - SUPREME COURT ] holds that quantum and penalty are parallel proceedings wherein each and every disallowance/addition made in former does not ipso facto attract latter penal provision. Respectfully following the same, we direct the Assessing Officer to delete the impugned penalty. - Decided in favour of assessee.

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• 2021 (4) TMI 954
  Double taxation relief under section 90 - salary income and the foreign allowances - tax the salary income and the foreign allowance received by the assessee for services rendered outside India - assessee - a Non-resident individual, filed his return of income for the A.Y 2014-15 admitting Nil income - Form-16 issued by the assessee s employer i.e., IBM India (P) Ltd Assessing Officer found that during the relevant A.Y, the gross salary of the assessee and the exempt income u/s 10 - HELD THAT:- In the case of Sreenivasa Reddy Cheemalamarri vs. ITO [ 2020 (4) TMI 226 - ITAT HYDERABAD] had considered similar issue held evidence was not produced for receiving the foreign allowance outside India and the bank account of the assessee maintained abroad was not produced is not relevant because the facts of the case establish es that the salary and the foreign allowance was received in India for the services rendered abroad and by virtue of DTAA and the Act, there is no bar in law for receiving the money in India. For the above-mentioned reasons, hereby direct the Ld.AO to delete the tax imposed on the assessee with respect to his salary income of ₹ 12,90,846/- and the foreign allowances Thus , the appeal of the assessee is allowed. The Assessing Officer is directed to allow exemption under DTAA.

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• 2021 (4) TMI 953
  Rejection of books of accounts - Estimation of profit - AO Estimated the profit percentage at 8% of gross receipts on the main contracts and 6% on sub-contracts - CIT (A) who confirmed the assessment of profit on main contract at 8% and income from sub-contracts at 5% - HELD THAT:- No reason to interfere with the orders of the CIT (A) as the CIT(A) has followed the precedents on the issue i.e. the decisions of the Tribunal which he has quoted in his order. Therefore, Grounds 1 and 2 are rejected. Enhancement of the income by the CIT (A) - CIT (A) has directed the Assessing Officer to verify whether the said amount disclosed by the assessee in the subsequent A.Y 2011-12 relate to the contract amount received in the A.Y 2010-11 and thereafter, in the event of assessee s failure to establish a direct nexus only, to enhance the amount to the extent of ₹ 6,38,691/. Therefore, no reason to interfere with this direction of the CIT (A). Assessee s appeal is dismissed.

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• 2021 (4) TMI 952
  Depreciation on commercial vehicle - claim @50% or 15% has been allowed by the Revenue - HELD THAT:- As relying on CIPRIANI HARRISON VALVES PVT LTD [ 2017 (4) TMI 116 - ITAT AHMEDABAD] ad SHREE BALAJI PRODUCTS [ 2016 (11) TMI 443 - ITAT AHMEDABAD] we decide the issue in favour of the assessee; the assessee is entitled to depreciation @50% as claimed. Hence, the appeal is allowed.

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• 2021 (4) TMI 951
  Double taxation relief under section 90 - salary income and the foreign allowances - tax the salary income and the foreign allowance received by the assessee for services rendered outside India - assessee - a Non-resident individual, filed his return of income for the A.Y 2014-15 admitting Nil income - Form-16 issued by the assessee s employer i.e., IBM India (P) Ltd Assessing Officer found that during the relevant A.Y, the gross salary of the assessee and the exempt income u/s 10 - HELD THAT:- In the case of Sreenivasa Reddy Cheemalamarri vs. ITO [ 2020 (4) TMI 226 - ITAT HYDERABAD] had considered similar issue held evidence was not produced for receiving the foreign allowance outside India and the bank account of the assessee maintained abroad was not produced is not relevant because the facts of the case establish es that the salary and the foreign allowance was received in India for the services rendered abroad and by virtue of DTAA and the Act, there is no bar in law for receiving the money in India. For the above-mentioned reasons, hereby direct the Ld.AO to delete the tax imposed on the assessee with respect to his salary income of ₹ 12,90,846/- and the foreign allowances Thus , the appeal of the assessee is allowed. The Assessing Officer is directed to allow exemption under DTAA.

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• 2021 (4) TMI 950
  Addition u/s 68 - assessee submitted that, the notice of hearing sent by the ld. CIT(A) was on a wrong address and consequently, the assessee did not receive the notice and thus, none appeared before the ld. CIT(A) and the ld. CIT(A) passed an ex-parte order - HELD THAT:- As relying on M/S. SRIRAM TIE UP PVT. LTD. VERSUS ITO, WD 9 (4). KOLKATA [ 2018 (3) TMI 1403 - ITAT KOLKATA] ITAT has passed similar orders in many cases on the same issue of additions made u/s 68 of share capital and has set aside the assessment to the file of the AO for fresh adjudication with a direction that Assessing Officer may examine the evidence already on record as well as other documentary evidences which the assessee may file before him and adjudicate the issue in accordance with law. There is violation of the principles of natural justice in this case. Keeping in view the totality of the facts and circumstances of the case, the submissions of both sides and also the orders of the Co-ordinate Bench of the Tribunal in similar matters, we set aside this issue to the file of the AO for fresh adjudication in accordance with law, after giving the assessee adequate opportunity of being heard. Appeal of the assessee is allowed for statistical purposes.

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• 2021 (4) TMI 949
  Late fee u/s 234E in intimation u/s 200A - assessee contended that the provisions to include late fee u/s 234E in the intimation u/s 200A of the Act came into effect only through the Finance Act, 2015 w.e.f. 01/06/2015 and, hence, prior to 01/06/2015 such inclusion of late fee u/s 234E in the intimation u/s 200A is not permissible under the law - HELD THAT:- It is seen that prior to 01.06.2015, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E of the Act. The provision of Section 234E of the Act is charging provision i.e. substantive provision which could not be applied retrospectively, unless it is expressly provided in the Act, to levy the late fee for any delay in filing the TDS statement for the period prior to 01.06.2015. The counsel for the assessee has rightly contended that in the absence of enabling provisions u/s 200A of the Act, such levy of late fee is not valid As relying on M/S. TERRA INFRA DEVELOPMENT LIMITED [ 2018 (10) TMI 285 - ITAT HYDERABAD] we find that the TDS returns filed by the assessee for the relevant period i.e., FY 2012-13 relevant to AY 2013-14 were prior to 01/06/2015. Therefore, respectfully following the said decision of the coordinate bench, we set aside the orders of CIT(A) and direct the AO to delete the fees levied u/s 234E in all the appeals under consideration. - Decided in favour of assessee.

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• 2021 (4) TMI 948
  Disallowance of expenses in relation to exempt income u/s.14A - assessee submitted AO has erred in disallowance of expenses u/s.14A without recording satisfaction as required under sub-section 2 of section 14A of the Act, having regard to the books of accounts of the assessee that disallowance if any made by the assessee is incorrect - HELD THAT:- We find that the AO has computed disallowance having regard to books of accounts of the assessee that although the assessee has made investment in shares and securities which yield exempt income but no disallowance was made in relation to expenses relatable to such exempt income. Therefore, we are of the considered view that said finding of the AO constitute satisfaction as required u/s.14A(2) of the Act and hence, in absence of any express provision for recording satisfaction in particular form by the statute then disallowance computed by the AO by invoking Rule 8D(2) of the IT Rules, 1962 itself depicts that AO was not satisfied with the explanation of the assessee and hence there is no merit in the arguments taken by the ld.AR of the assessee on the issue of satisfaction. Accordingly, we reject the same. Disallowance computed by the AO under Rule 8D(2) - Interest disallowance under Rule 8D(2)(ii) - As gone through the explanation furnished by the assessee in light of schedule of financial charges appeared in the financial statement and find that interest expenditure incurred for the year are relatable to specific loans borrowed for acquisition of assets, interest paid on Client Margin Money and interest paid u/s.234C of the Act. Further, there is no specific interest has been paid on any loan which has been used for investing in dividend yielding shares or securities. Therefore, unless the AO makes out a case that interest bearing funds have been used for making investments in shares and securities which yield income, no interest disallowance can be made under Rule 8D(2) of the IT Rules, 1962. Therefore, we direct the AO to delete additions made towards disallowance of interest under Rule 8D(2)(ii) of IT Rules 1962. Disallowance of expenses under Rule 8D(2)(iii) - We find that the ITAT, Special Bench of Delhi in the case of ACIT vs. Vireet Investments (P) Ltd., [ 2017 (6) TMI 1124 - ITAT DELHI] had considered an identical issue and held that while computing average value of investments only those investments which yield exempt income for the year should be considered - for computing disallowance under Rule 8D(2)(iii), those investments which yield exempt income only needs to be considered. The assessee has submitted details, as per which, out of total investments of ₹ 5,06,26,240/- a sum of ₹ 1,20,000/- was only yielding exempt income. Therefore, we set aside the issue to the file of the AO and direct him to recompute disallowance in light of our discussions herein above and also in light of submissions made by the assessee that only a sum of ₹ 1,20,000/- is yielding exempt income. Disallowance of membership fee paid to MCX Exchange Ltd . - nature of expenditure - Revenue or capital expenditure - Claim of depreciation - HELD THAT:- There is no error in the findings recorded by the AO and confirmed by the ld.CIT(A) in disallowance of deduction claimed towards membership fee paid to MCX Exchange Ltd., as revenue expenditure. Insofar as, the case law relied upon by the ld.AR for the assessee in the case of S. Venkatasubramaniam [ 2006 (9) TMI 148 - MADRAS HIGH COURT] as held that membership fees paid to any stock exchange is revenue expenditure, but because the Hon ble Supreme Court has taken a different view in later judgment in the case of M/s. Techno Shares and Stocks Ltd., vs. CIT [ 2010 (9) TMI 6 - SUPREME COURT] and held that membership fees paid to any stock exchange is an intangible asset and eligible for depreciation u/s.32(1)(ii) of the Act, we are of the considered view that case law relied upon by the ld.AR for the assessee has no application because said judgment was rendered before the decision of Hon ble Supreme Court in the case of M/s. Techno Shares and Stocks Ltd., vs. CIT. Therefore, considering the facts and circumstances of the case and also by following the decision of Hon ble Supreme Court in the case of M/s. Techno Shares and Stocks Ltd, we are of the considered view that there is no error in the findings recorded by the authorities below to disallow deduction claimed towards membership fee paid to MCX Exchange Ltd., as revenue expenditure and further allowing depreciation as intangible asset u/s.32(1)(ii) of the Act. Accordingly, we reject the ground taken by the assessee.

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• 2021 (4) TMI 940
  Deemed dividend under section 2(22)(e) - HELD THAT:- In the present case, the amount of loan in question was given to the assessee by the concerned company on interest and since the said loan was not a gratuitous one and was given in return to an advantage conferred upon the company by the assessee in the form of interest, we find merit in the contention of the ld. Counsel for the assessee that the same cannot be treated as deemed dividend within the meaning of section 2(22)(e) of the Act. Even the ld. D. R. has not been able to raise any contention to rebut or controvert this position. Therefore, respectfully follow the decision of Pradip Kr. Malhotra[ 2011 (8) TMI 16 - CALCUTTA HIGH COURT ] and delete the addition made by the Assessing Officer and sustained by the ld. CIT(Appeals) on account of deemed dividend under section 2(22)(e) of the Act. Ground No. 1 of the assessee s appeal is accordingly allowed. Deduction on account of interest on Housing Loan - D.R. has contended that this claim made by the ld. Counsel for the assessee requires verification by the Assessing Officer - HELD THAT:- Since the ld. Counsel for the assessee has also not raised any objection for getting this matter verified by the Assessing Officer, restore this issue to the file of the Assessing Officer for the limited purpose of verifying the claim of the assessee that deduction on account of interest on Housing Loan was claimed only to the extent of ₹ 1, 50,000/- and not ₹ 5,18, 115/- as wrongly taken by the ld. CIT(Appeals). If the claim of the assessee is found to be correct on verification, the Assessing Officer shall delete the disallowance of ₹ 3,68, 115/- as directed to be made by the ld. CIT(Appeals) on this issue. Ground No. 2 of the assessee s appeal is accordingly treated as allowed for statistical purposes. Disallowance of depreciation on motor car and disallowance on motor car maintenance - HELD THAT:- As observed that the assessee was owner of two cars, one Chevrolet Beat and the other Maruti Van. Since the Maruti Van was being used by the assessee for the purpose of business, depreciation claimed on the said car was allowed by the Assessing Officer. The claim of depreciation amounting to ₹ 76,401/- made by the assessee on account of Chevrolet Beat car, however, was disallowed by the Assessing Officer. In my opinion, even though the personal use of Chevrolet Beat car by the assessee cannot be ruled out, the claim of the assessee for depreciation on the said car cannot be entirely disallowed and it will be fair and reasonable to restrict the same to one- third for such personal use as the claim of the assessee of having used the said car for business purpose also cannot be outrightly rejected - therefore, direct the Assessing Officer to restrict the disallowance made on account of depreciation of Chevrolet Beat car to the extent of 1/3r d. Similarly the disallowance made by the Assessing Officer on account of car maintenance for personal use to the extent of 50% is directed to be restricted to one-third.

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• Customs

• 2021 (4) TMI 977
  Bail application - Seizure of articles along with vehicle in question as well as accused petitioner also arrested - trading of exotic animals and birds - restricted items or not - notified under Section 123 of the Act or not - HELD THAT:- Although no specific notification under Section 11-B of the Customs Act is brought on record about the species of exotic birds/animals under the Customs Act, but such criminals and birds of foreign origin enlisted in the Customs Tariff Act and in view of the fact the petitioners did not produce any sort of document, whatsoever, in support of possession of such valuable animals and birds, which is more than 4 crores and any other supportive evidence, it is difficult to accept that the same has been transported for domestic purpose. Having regard to the submissions of the Customs Department that the area from which it was purchased is nearer to the international border of Myanmar, the matter of smuggling and/or illegal import to India cannot be ruled out - as per the Schedule I of the Import Policy, 2017, import of live animals, other than wild animals and as defined under Wildlife Protection Act, 1972 (as amended) is permitted against a licence to Zoos and Zoological Park, Circus Companies, Private individuals on the recommendation of the Chief Wildlife Warden of a State Government, subject to provision of CITES. As in the present case, the petitioners have no sort of any documents in their possession in support of the seized animals. The Customs Officer, under Section 110 the Customs Act, is empowered to seize such articles, which are liable to confiscation under Section 111 of the Act - burden lies upon the accused to justify that those are not smuggled goods. The accused could not justify possession of such valuable animals and birds of foreign origin. In absence of any legitimate document in support of purchase of seized articles, allegation of prosecution cannot be denuded. Market value of the exotic animals and birds assessed by DFO (annexed with the report) is another aspect, which has raised the occasion to believe that the petitioners may be involved in smuggling activities. As per Section 104 (4) of the Customs Act, any offence relating to prohibited goods is cognizable offence and in view of the high value of the articles, in-depth investigation is required to unearth the entire gamut. Bail application rejected.

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• 2021 (4) TMI 971
  Issuance of summons - matter already pending before AAR - taxability of Tunnel Boring Machines used for executing infrastructure products - HELD THAT:- Representation dated 11.03.2021 filed by the petitioner before the authorities, only requests that the proceedings be deferred till a decision is rendered by AAR and does not make a mention of any threat put forth by the officials in regard to the remittance of the duty, in advance. The petitioner has, in its submission dated 03.04.2021, made an incidental reference to 'pressure' being exerted by the revenue to make payment. However, since the matter is pending at the stage of summons, it is for the parties to take things forward in a proper manner and in accordance with law, bearing in mind that proper procedure and protocol should be followed in matters of conduct of enquiry, investigation and adjudication - Petition dismissed.

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• 2021 (4) TMI 969
  Bail application - Smuggling - Gold Bars - prohibited item - involved in commission of serious offence - HELD THAT:- Even from the facts of the case, it is evident that the accused applicants are the carriers of the smuggled gold from Bangladesh. They are not the main persons who were involved in smuggling the gold. They had committed offence in greed of some money which was to be paid or might have been paid to them for transporting the smuggled gold from West Bengal to Delhi. However, they have been apprehended at Kanpur Central Railway Station on inputs of the Revenue Intelligence Department. The accused applicants are languishing in jail since 12.10.2020. The case is triable by the Magistrate. There is no criminal history of the accused applicants. Let accused-applicants Dhruv Maheshwari and Laxman Ram be released on bail on their furnishing a personal bond of ₹ 2 lakhs each and two sureties in the like amount to the satisfaction of the Trial Court on being summoned with the conditions imposed - application allowed.

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• Corporate Laws

• 2021 (4) TMI 946
  Oppression and mismanagement - siphoning of funds - bogus entries in the books in respect of raw materials and components consumed during the year 2017-18 - fictitious purchases - sections 241 and 242 of the Companies Act, 2013 - HELD THAT:- The Interim Reliefs granted in respect of each of the company petitions shall be in effect until further orders. The respondents in each of the Company petitions are hereby granted four weeks' time to file their reply affidavit. Copies of the reply affidavit shall be served on the Ld. Authorised Representative for the Petitioners. The Petitioners shall thereafter have a further period of four weeks within which to file a rejoinder, if need be. Copies of the rejoinder shall be served on the counsel on record for the respondent - List this matter for further consideration on 24.06.2021.

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• 2021 (4) TMI 944
  Validity of meeting of stakeholders convened on October 29, 2020 - time limitation - Section 230 of the Companies Act, 2013 - HELD THAT:- As per the provisions of the IBC, 2016, the Applicant is required to submit the claim to the Liquidator in such form and in such manner along with such supporting documents as specified by the Board. Thereafter, upon submission of the claim, the Liquidator is required to verify the claims within the time limits specified by the Board and in this connection referring to the relevant Regulations namely, IBBI (Liquidation Process) Regulations, 2016 and more specifically under Regulation 30, the Liquidator is required to verify the claim submitted within a period of 30 days from the last date of receipt of the claims and may either admit or reject in whole or part as the case may be of such claim - It may be noted that under Regulation 44(1) of the IBBI (Liquidation Process) Regulations, 2016, the Liquidator is directed to liquidate the Corporate Debtor within one year from the date of commencement of the liquidation proceedings and Regulation 44(2) stipulates that, after the expiry of one year, the liquidator shall file an application to the Authority to continue the liquidation period along with a report and explain why the liquidation has not been completed. Thus, it can be seen that the Liquidation is a time bound process and the Liquidator is being made accountable and required to explain, if there is any delay caused in the liquidation process. The Hon'ble Supreme Court in Gaurav Hargovindbhai Dave Vs. Asset Reconstruction Company (I) Ltd. Another [ 2019 (9) TMI 1019 - SUPREME COURT] , in relation to the aspect of limitation has restated the well established and well settled principle that there is no equity about limitation , we are unable to entertain this Application/Appeal. In view of the IBC, 2016 being a time bound process as well as the Learned Liquidator being under a compulsion to complete the liquidation process within a period of one year from the date of commencement of liquidation. Petition dismissed.

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• 2021 (4) TMI 942
  Sanction of the Composite Scheme of Arrangement - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- Certificates of the respective statutory auditors of the Petitioner Companies have been placed on record to the effect that the accounting treatment provided for in the Scheme is in conformity with applicable accounting standards notified under Section 133 of the Act. There appears to be no impediment in sanctioning the Scheme which appears to be fair and reasonable and not contrary to public policy or violative of any provisions of law. All the statutory requirements of Sections 230-232 of the Act appear to have been complied with - Petition allowed.

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• Insolvency & Bankruptcy

• 2021 (4) TMI 947
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - accounts classified as NPA - loan given by consortium of lenders - novation of contract - existence of debt and dispute or not - HELD THAT:- It is an admitted position that the consortium of lenders headed by the Applicant had given working capital loan. It is also an admitted position that lead member of such consortium has also given corporate term loan. It is also not in dispute that the Corporate Debtor has defaulted in payment thereof. On behalf of Corporate Debtor, various technical pleas as regard to the completeness and validity of application filed under Section 7 of Insolvency and Bankruptcy Code, 2016, have been made. However, we are not inclined to deal with the same at this stage though generally such issues are decided at the first instance before deciding the issues on merit. In this case, this is being an application filed under Section 7 of Insolvency and Bankruptcy Code, 2016, we have to see the main factor i.e. whether debt is due and payable. A plea was made that this debt was not due and payable on the date of classification of the account of the Corporate Debtor As NPA as mentioned in the Form-1 filed by the Financial Creditor. Further, it was claimed that there was a restructuring of the loan and new time schedule was prescribed which was acted upon by both sides, hence, any application filed under Section 7 of Insolvency and Bankruptcy Code, 2016 could be filed only on the basis of default which took place thereafter. Accordingly, focussed argument was made that in the present application, debt was not payable and pre-mature. In this regard, based on the subsequent documents executed by and between the financial lenders and the Corporate Debtor, it was claimed that it was an instance of novation of contract as per the provisions of Section 62 of Indian Contract Act, 1872. There is established fact situation of a novation of contract between parties whereby earlier arrangement/contract stood extinguished and parties are governed by the new contract/arrangement. This factual position is of substantial nature and goes to the root of the matter because if such subsequent contract is ignored, then the sanctity of contract gets lost - the proceedings initiated on the basis of any default committed by the Corporate Debtor prior in 09.04.2018 are not maintainable. Application dismissed.

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• 2021 (4) TMI 945
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditor is an individual allottee - existence of debt and dispute or not - HELD THAT:- Without going through the merits of the matter, the present petition is not maintainable in the light of the judgment of the Hon'ble Supreme Court in MANISH KUMAR VERSUS UNION OF INDIA AND ANOTHER [ 2021 (1) TMI 802 - SUPREME COURT] , in terms of which the Hon'ble Supreme Court has upheld the amendment made by the Insolvency and Bankruptcy Code (Amendment) Act, 2020 with retrospective effect from 28/12/2019. In terms of the amendment, [Second proviso to sub-section (1) of section 7] an application u/s. 7(1) of Insolvency and Bankruptcy Code can be maintained only if an application for initiating corporate insolvency resolution process against the corporate debtor has been filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per cent of the total number of such allottees, whichever is less. Thus, Financial Creditor being an individual allottee, does not satisfy the requirements of the second proviso to section 7(1) of the Insolvency and Bankruptcy Code, 2016. Thus, the petition is not maintainable and, therefore, is dismissed.

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• 2021 (4) TMI 943
  Condonation of delay of 725 days in submitting the Claim in Form C to the Respondent - HELD THAT:- It is pertinent to note here that the Scheme in relation to the Corporate Debtor viz. NOCL which has been proposed under Section 230 of the Companies Act, 2013 read with the attendant provisions of Insolvency and Bankruptcy Code, 2016 was approved by this Tribunal. However, it is seen that as per the provisions of the IBC, 2016, the Applicant is required to submit the claim to the Liquidator in such form and in such manner along with such supporting documents as specified by the Board. Thereafter, upon submission of the claim, the Liquidator is required to verify the claims within the time limits specified by the Board and in this connection referring to the relevant Regulations namely, IBBI (Liquidation Process) Regulations, 2016 and more specifically under Regulation 30, the Liquidator is required to verify the claim submitted within a period of 30 days from the last date of receipt of the claims and may either admit or reject in whole or part as the case may be of such claim - As against the rejection of the claim, Section 42 of I B Code, 2016 provides for a time window of 14 days upon receipt of such decision to the creditor to file an appeal to the Adjudicating Authority against the said decision of the Liquidator. The Hon'ble Supreme Court in Gaurav Hargovindbhai Dave Vs. Asset Reconstruction Company (I) Ltd. Another [ 2019 (9) TMI 1019 - SUPREME COURT] , in relation to the aspect of limitation has restated the well established and well settled principle that there is no equity about limitation , we are unable to entertain this Application/Appeal. In view of the IBC, 2016 being a time bound process as well as the Learned Liquidator being under a compulsion to complete the liquidation process within a period of one year from the date of commencement of liquidation. Application dismissed.

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• 2021 (4) TMI 941
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The documentary evidence placed on record establishes that the Corporate Debtor failed to make the payments to the Operational Creditor. Therefore, all the legal requirements are fulfilled, the application is admitted, and the commencement of the CIRP is ordered against M/s. RS Seven Lifestyle Private Limited, which ordinarily shall be completed within 180 days, reckoning from the day this Order is passed. Application admitted - moratorium declared.

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• CST, VAT & Sales Tax

• 2021 (4) TMI 976
  Validity of assessment order - reminder notice not received and no opportunity was provided for the petitioner for a personal hearing - HELD THAT:- There are dissatisfaction with the manner in which the Commissioner of Commercial Taxes and the Officials working under him/her are discharging their duties to the detriment of all the Assessees and compelling several assessees to run to the High Court to set right the injustice caused to them on account of non-compliance with the principles of natural justice by the respective Assessing Officers. The impugned Assessment Order is set aside - matter is remitted to the 1st respondent for fresh consideration - petition allowed by way of remand.

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• 2021 (4) TMI 965
  Suo moto revision - Eligibility for deduction of the entire sub-contractors' payments made - payments made to the sub-contractors - assessment years 2008-09 to 2011-12 - the contention of the appellant s counsel is that it was wholly unnecessary to have initiated the suo moto revisional proceedings - HELD THAT:- There must be two circumstances which co-exist to enable the respondent to exercise power of revision under Section 64 of the KVAT Act, which is a suo moto revisional power. Firstly, the order passed by the first appellate authority or any other inferior authority not above the rank of the Joint Commissioner is erroneous. Secondly, the erroneous order must prejudice the interest of the Revenue. Therefore, the revisional authority has to first determine what is the erroneous order and thereafter determine as to whether the erroneous order has adversely affected the interest of the Revenue. Both the circumstances must co-exist before the revisional authority can initiate suo moto revisional proceedings. That, it is not sufficient to vest power in the respondent/authority to exercise suo moto revision merely because an order is erroneous - there must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. While discussing the aspects regarding the payments made to the sub contractors, there is no categorical finding given as to whether the assessee was, indeed, entitled to claim such benefit or not entitled to the same. In the absence of such finding being given by the respondent/revisional authority, the matter has been simply remanded to the Prescribed Authority under the KVAT Act to verify the issue based on certain observations made - the respondent/Authority was not right in remanding the matter to the Prescribed Authority to verify the issues with regard to certain observations made during the course of the order of purchases and sub contractors and to make a fresh re-assessment under Section 39(1) of the KVAT Act without giving a finding as such and in categorical terms as to whether the appellant/assessee was, indeed, entitled to make a claim regarding the deductions vis-a-vis the payments made to various sub-contractors in the respective assessment years. Matters remanded to the respondent/Authority to reconsider the same afresh - Appeal allowed by way of remand.

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• 2021 (4) TMI 961
  Constitutional validity and clauses (d) and (e) of Section 174(1) of the Karnataka Goods and Service Tax Act, 2017 - petroleum products and liquor for human consumption as per the amended Entry 54 - HELD THAT:- The Hon ble Supreme Court in R.S. REKCHAND MOHOTA SPINNING WEAVING MILLS LTD. VERSUS STATE OF MAHARASHTRA [ 1997 (5) TMI 441 - SUPREME COURT] has held that it is a settled principle of interpretation that legislative entries are required to be interpreted broadly and widely so as to give powers to legislature to enact the laws with respect to the matters enumerated in the legislative entries. Therefore, in the light of the aforesaid judgment, by no stretch of imagination it can be held that clauses (d) and (e) of Section 174(1) of the Karnataka Goods and Service Tax Act, 2017 is ultra vires. The appellant s basic contention is that the State is denuded of its power to re-assess a dealer s tax liability under the provisions of the KVAT Act after amendment to Entry 54 of the State List vide the Constitution (101st Amendment) Act, 2016, (the Amendment Act), which was notified to be brought into force w.e.f., 16.9.2016 and the subsequent repeal of the KVAT Act w.e.f., 1.7.2017, vide Section 173 of the KGST Act. The appellant s contention is totally untenable in view of the insertion of saving clause, namely Section 174 of the KGST Act in order to ensure that the repeal of the KVAT Act shall not affect liabilities accrued or tax payable under the KVAT Act. Therefore, in view of the savings clause under Section 174, the appellant s contention that the State cannot reassess the liability incurred prior to repeal of the KVAT Act is totally baseless. Constitutional validity and the assertion that the State s legislative power have been taken away - HELD THAT:- It is pertinent to note that the power to enact Section 174 of the KGST Act can be traced to Article 246A, which, when read with Article 366(12-A), confers power on the States to make laws with respect to any tax on supply of goods. Accordingly, Section 174 is a validly enacted piece of legislation and cannot be said to be without legislative competence. Hence, the contention of the appellant that Section 174 is a still born provision and unconstitutional is devoid of merits and substance. Appeal dismissed.

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