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TMI Tax Updates - e-Newsletter May 22, 2023 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Highlights / Catch Notes GST: Cancellation of GST registration of petitioner - Non compliance of conditions mentioned in section 29(2) of the GST Act - opportunity of hearing was not given to the petitioner - violation of principles of natural justice (audi alterem partem) - order of cancellation quashed. - It is left open to the respondent – authority to issue a fresh notice on any specific ground mentioned under section 29(2) of the GST Act, which proceeding, if initiated, may be decided on its own merit - HC Visit to Get Source GST: Provisional attachment of petitioner's Bank Accounts - fraudulent transfer of Input Tax Credit (ITC) - Mere suspicion that the petitioner is a dummy company, which is founded on the basis of statements that one of the directors of the petitioner company was, or is an employee of Third Party, and is in complete disregard of the corporate documents of the petitioner, would clearly fall foul of the requirement of forming an opinion, as it does not meet the standards required for taking an action u/s 83 of the CGST Act. - The attachment order is set aside. - HC Visit to Get Source GST: Validity of SCN - SCN not communicating the relevant information and material thereby disabling the petitioner to respond to the same - Since the Statute itself prescribes for affording reasonable opportunity, it is incumbent upon the Revenue to afford the same and any deficiency in that regard vitiates the end result. - the show cause notice are quashed with a liberty to the competent authority to proceed in the matter in accordance with law, if so advised. - HC Visit to Get Source GST: Validity of audit report u.s 65(6) of GST Act - the impugned audit report cannot be said to be after a reasonable opportunity. - The petition is allowed-in-part, quashing the impugned Audit Report - The petitioner is reserved liberty to file its response with the third respondent on or before 27.02.2023 and for the purposes of Section 65[6] of the KGST/CGST Act, the prescribed thirty days shall be computed from 27.02.2023. - HC Visit to Get Source Income Tax: Reopening of assessment u/s 147 - Penny stock transaction - It is settled law that sufficiency or adequacy of the reasons for the issuance of the notice for reopening of the assessment is not required to be gone into at this stage of the reopening. It can never be said that the final outcome of the proceedings has been derived at by the authority by issuing a notice for reopening. - if the AO was satisfied to harbour reasons to believe that there was escapement of income and if on such basis, he has exercised his powers u/s 147, 148 of the Income Tax Act, 1961, no fault can be found. - HC Visit to Get Source Income Tax: Addition on account of rolling charges received outside the books of account - In the absence of any material being brought on record by the appellant to explain that the expenditure shown to have been incurred by it as per the entries made in the seized document, was recorded in the books of account, no fault can be found in the order passed by the Tribunal restoring addition of amount - HC Visit to Get Source Income Tax: Long term capital gain - reliance on unsigned computerized Satakhat (agreement for sale) found during course of survey in premiss of third party lawyer - There was no corroborative and supporting evidence to support the alleged incriminating material - In absence of corroborative and supporting evidence, no justification for making addition on account of long term capital gains. - AT Visit to Get Source Income Tax: Validity of Revision u/s 263 - non mentioning computer generated DIN - Non-est order - Circular categorically mentions that subsequent to 01/10/2019, the computer generated DIN not only be allotted but be duly quoted in the body of the communication itself. - Neither the reasons nor the statement in the prescribed format is to be found in the order passed u/s 263 of the Act, spelling out the particular category of exception that prevented allotting the DIN on that day. It is yet another violation. - such an order shall be treated to have never been issued and, therefore, shall not take any affect. - AT Visit to Get Source Income Tax: Addition u/s 56(2)(viia) - shares received by the assessee company on account of amalgamation, for a price lower than the Fair Market Value (F.M.V) of the shares - Admittedly, the assessee is a company in which public are not substantially interested. Further, the assessee had received “any property” being shares of a company during the previous year relevant to the assessment year below the fair market value. - CIT(A) wrongly deleted the penalty - Additions confirmed - AT Visit to Get Source Income Tax: Addition u/s 68, u/s 69A and section 69 - In the explanatory memorandum to Notification No. 103/2019, it is certified that no person is being adversely affected by giving retrospective effect to this notification. - In the present case, assessee has duly discharged its tax liability under the IDS, 2016 which is prior to the extended due date as well as before the notification itself and, therefore, there is no occasion to put him in an adverse situation. - AT Visit to Get Source Income Tax: Addition u/s 56(2)(ix) - forfeited amount of application money collected on issuing shares against share warrants - The amount forfeited by the assessee out share capital issued by it shall not fall within the scope of sec. 56(2)(ix) - Further, the said amount shall constitute a Capital receipt in the hands of the assessee. - Not taxable - AT Visit to Get Source Income Tax: Estimated addition @ 25% of the advance booking receipt on shops/flats by the AO u/s 68 - Since the project could not be further carried out due to legal bar the assessee was under legal obligation to refund the amount to the investors after receiving compensation from the government. Estimated addition @ 25% of the advance booking received by the assessee by the AO is not sustainable, hence rightly deleted by the CIT(A). - AT Visit to Get Source Income Tax: Revision u/s 263 - As been emphasized by the CBDT that the pending assessment and litigations should be handled taking into consideration the clarification so issued and in the instant case, a fresh litigation has been started by the Department by initiation of action u/s 263 which is clearly in the teeth of the CBDT Circular and cannot be sustained in the eyes of law. - AT Visit to Get Source Customs: Seeking permission to re-export of mobile phones - case of petitioner is that despite the payment of the redemption fine and the penalty amount, the goods have not been released for the purpose of re-export - The other co-noticees on whom the penalties have been imposed are the courier company and its employees. They are admittedly not the employees of the petitioner and he has no control over the actions of those noticees. Since the petitioner has deposited the requisite redemption fine and has deposited the penalty imposed upon him, the respondent is required to release the goods for the purpose of re-export - HC Visit to Get Source Customs: Adjust of sale proceeds of goods auctioned - Seized goods could not be cleared due to financial difficulty - Appeal were pending - The respondent/revenue, having sold the goods, which it could not have done, since the appeal was pending at the relevant time, we find that there is no good reason for adjustment of redemption fine. - Revenue shall disburse the amount of sale proceeds pursuant to auction sales by only adjusting the amount of penalty. - AT Visit to Get Source Corporate Law: Petitioner’s DIN number was incorrectly used - grievance of the Petitioner is that owing to the identity in names, the Petitioner has been wrongly reflected as a Director in Respondent No. 2 company - The Petitioner, whose DIN number has been incorrectly used, shall be saddled with no liability in respect of Respondent No. 2 company or its subsidiaries including any of their businesses or activities - HC Visit to Get Source Indian Laws: Dishonour of Cheque - Evidently, the petitioner cannot be allowed to be prosecuted for bald allegations, burden to prove whereof is on respondent No. 2 in view of admission of respondent No. 2 that he had signed the cheque which got dishonoured - Likewise, respondent No. 2 has admittedly acted in violation of mandate of The Income Tax Act - If the impugned FIR and proceedings arising out of the same is allowed to be sustained, it would amount in protecting and recognizing illegal acts of respondent No. 2. - HC Visit to Get Source Indian Laws: Dishonour of Cheque - territorial jurisdiction of the Magistrate - The territorial jurisdiction of the learned Magistrate is decided as per section 142A of the Negotiable Instruments Act, 1881. It is the branch of payee bank which confers jurisdiction on the Court. Therefore, merely because two complaints are filed at two different places by itself does not raise ground for challenging order of issuance of process on the ground of lack of territorial jurisdiction. - HC Visit to Get Source IBC: Initiation of CIRP - Whether the Assignment Agreement being unregistered document could not have been relied by the Adjudicating Authority for admitting Section 7 application? - when acquisition of assets by Asset Reconstruction Company is made as per Section 5(1), deeming provision contained in Sub-section (2) of Section 5 shall come into play and the Asset Reconstruction Company shall be deemed to be Lender for all purposes. - AT Visit to Get Source Service Tax: Levy of sales tax - transactions relating to telephone sets, modems and caller IDs instruments - non-refundable deposits and refundable deposits - It was held by High Court that the transactions relating to telephone sets, modems and caller IDs instruments are subject to sales tax levy. - Order of HC sustained - SC Visit to Get Source Service Tax: SVLDRS - Rejection of declaration - It is relevant to note that the respondents had never disputed or doubted the statements submitted by the petitioner. On the contrary, it is apparent that the respondents had accepted the said statements - The impugned order rejecting the petitioner’s declaration on the ground that “investigation has not been concluded and hence the demand has not been estimated or concluded on or before the stipulated date” is unsustainable. - HC Visit to Get Source Service Tax: Disallowance of CENVAT Credit - activity of purchase and sale of units of Mutual Fund Schemes - trading (exempt) services or not - the activity of redemption and subscription of mutual fund is akin to management of investments and not trading in services, it cannot be held as exempted service, for seeking the reversal as per provisions of Rule 6 of CENVAT Credit Rules, 2004. - AT Visit to Get Source Central Excise: Quantum of duty payable by the respondents - manufacturing and clearing of gutkha it cannot be accepted that it is implicit in the provisions of the amended Rule 17(2), that it applies retrospectively for purposes for determination of duty in respect of searches conducted prior to 20.10.2008 - HC Visit to Get Source Central Excise: Job-work - duty liability of job-worker or supplier? - The duty liability can be shifted to the supplier of raw materials or semi-finished goods only if the supplier gives an undertaking in terms of the notification - it is noted that the learned counsel’s argument that this is a procedural lapse. It is opined that this is a substantial condition which cannot be taken as a procedural condition, as it shifts the duty liability from the job worker to the supplier of raw materials or semi-finished goods. Until and unless this condition of giving undertaking is fulfilled, the duty cannot be fastened on the supplier of raw materials or semi-finished goods, as they were not the manufacturers of marble slabs/tiles. - AT Visit to Get Source Articles Inclusion of CA, CS and CMAs under Prevention of Money Laundering Act (PMLA)- Myths vs Facts. REPUDIATION OF INSURANCE CLAIMS Notifications GST - States 38/1/2017-Fin(R&C)(243)/3443 - dated 12-5-2023 - Goa SGST Revocation of cancellation of registration where registration has been cancelled on or before the 31st day of December, 2022 38/1/2017-Fin(R&C)(242)/3442 - dated 12-5-2023 - Goa SGST Amendment in Notification No. 38/1/2017-Fin(R&C)(38)/323 12th January, 2018 (07/2023) FD 20 CSL 2023 - dated 16-5-2023 - Karnataka SGST Seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding Rs. 5 Cr from 01st August 2023. F A 3-51-2019-1-V(17) - dated 17-5-2023 - Madhya Pradesh SGST Seeks to amendment in Notification No. F A 3-51-2019-1-V(29), dated 4th May, 2020 F A 3-32-2017-1-V(16) - dated 17-5-2023 - Madhya Pradesh SGST Amendment in Notification No. F A 3-32-2017-1-V(41), dated 29th June 2017 F A 3-93-2017-1-V (07) - dated 21-4-2023 - Madhya Pradesh SGST Amendment in Notification No. F-A 3-93-2017-1-V (162) dated the 29th December, 2017 CT-8-0003-2023-Sec-1-V (CT) (10) - dated 21-4-2023 - Madhya Pradesh SGST State Government, recommendations of the Council, waives the amount of late fee referred to in section 47 of the MPGST Act ERTS(T) 65/2017/Pt. III/421 - dated 31-3-2023 - Meghalaya SGST State Government, recommendations of the Council, waives the amount of late fee referred to in section 47 of the Meghalaya Goods and Services Tax Act, 2017 ERTS(T) 65/2017/Pt. III/420 - dated 31-3-2023 - Meghalaya SGST State Government recommendations of the Council, notifies the registered persons who failed to furnish a valid return within a period of thirty days from the service of the assessment order issued on or before the 28th day of February, 2023 515/XI-2-23-9(47)/17-T.C.215-U.P.Act-1-2017-Order-(273)-2023 - dated 24-4-2023 - Uttar Pradesh SGST EXTENSION OF LIMITATION UNDER SECTION 168A OF Uttar Pradesh Goods and Services Tax Act, 2017 Circulars / Instructions / Orders SEBI - SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/73 - dated 19-5-2023 Risk disclosure with respect to trading by individual traders in Equity Futures & Options Segment News CBDT proposes changes to Rule 11UA in respect of ANGEL TAX- Also proposes to notify Excluded Entities Clarification regarding applicability of Tax Collection at Source to small Debit/Credit Transactions under LRS Case Laws: GST 2023 (5) TMI 850 Cancellation of GST registration of petitioner - bogus firm - opportunity of hearing was not given to the petitioner - violation of principles of natural justice (audi alterem partem) - HELD THAT:- Admittedly, the registration of the petitioner was cancelled on the basis of the survey dated 27.09.2019 with the report that the disclosed business place of the firm was not found and therefore, the firm is bogus. On the said basis, the registration was cancelled on 01.12.2020. The petitioner moved application for revocation of cancellation of the registration on 28.01.2021, but the same was rejected. Thereafter, on 26.04.2021, a show cause notice was issued to the petitioner to show cause as to why the revocation of cancellation of registration may not be rejected. This Court in APPARENT MARKETING PRIVATE LIMITED. VERSUS STATE OF U.P. AND 3 OTHERS [ 2022 (3) TMI 493 - ALLAHABAD HIGH COURT ] has held Though the notice for cancellation of registration may not be placed on a high pedestal of a jurisdictional notice, at the same time, unless the essential ingredients necessary for issuance of such notice had been specified therein at the initial stage itself, the authorities cannot be permitted to have margin or option to specify and/or improve the charge later. Impugned order cannot be sustained - petition allowed. 2023 (5) TMI 849 Provisional attachment of petitioner's Bank Accounts - fraudulent transfer of Input Tax Credit (ITC) - it was alleged that the petitioner company was created as a dummy company of M/s Best Crop Science Pvt. Ltd. for availing ITC by fraudulent means - HELD THAT:- It is relevant to note that the opening sentence of Section 122(1) of the CGST Act also refers to a taxable person. Thus, the assets of a person falling under Sub-section (1A) of Section 122 of the CGST Act can be attached only by a Commissioner who exercises jurisdiction in respect of the said taxable person - Sub-section (1A) of Section 122 of the CGST Act is applicable to any person who retains the benefit of the transaction covered under Clauses (i), (ii), (vii) and (ix) of Section 122(1) of the CGST Act and at whose instance such transaction is conducted. There is no allegation that the petitioner has retained the benefit of any of the alleged transactions covered under any of the specified clauses of Section 122(1) of the CGST Act. On the contrary, the allegation is that the petitioner has facilitated M/s Best Crop Science LLP / M/s Best Crop Science Pvt. Ltd. to avail fraudulent ITC. More importantly, there is no allegation that any of the allegedly offending transactions were conducted at the instance of the petitioner. On the contrary, it is alleged that the petitioner company was set up by the promoters of M/s Best Crop Science Pvt. Ltd. for availing fraudulent ITC - The impugned order is, thus, liable to be set aside on this ground alone. The second reason that the petitioner is a dummy company because the director of the petitioner is/was an employee of M/s Best Crop Group is also somewhat in the realm of assumptions. The petitioner had stated that Shri Raman Kumar was employed by M/s Best Crop Group but he had since moved on and had taken up his role as a director of the petitioner company - there must be a live nexus between the reasons for provisionally attaching assets and bank accounts and the material available with the Commissioner. Merely because there was some material (although disputed) to indicate that one of the directors of the petitioner was an employee of another company cannot be the basis to believe that the petitioner company is a dummy company given the material as provided. The language of Section 83 of the CGST Act requires the Commissioner to form an opinion that it is necessary to attach the property of a taxable person. However, the said opinion is required to be based on relevant facts and not merely on grounds of suspicion. It is difficult to imagine that a company would survive if its bank accounts are frozen for a protracted period of time. Thus, the nature of the power makes it necessary that the same is exercised with due caution and only when it is necessary - Mere suspicion that the petitioner is a dummy company, which is founded on the basis of statements that one of the directors of the petitioner company was, or is an employee of M/s Best Agrolife Group, and is in complete disregard of the corporate documents of the petitioner, would clearly fall foul of the requirement of forming an opinion, as it does not meet the standards required for taking an action under Section 83 of the CGST Act. The attachment order is set aside. It is, however, clarified that the concerned authorities are not precluded from proceeding against the petitioner in accordance with law - petition disposed off. 2023 (5) TMI 848 Validity of SCN - SCN challenged on the ground that it does not satisfy the requirements of provision r/w Rule 142 of GST Rules - SCN not communicating the relevant information and material thereby disabling the petitioner to respond to the same - violation of principles of natural justice - HELD THAT:- Bare reading of the show cause notice (Annexure P-1) reveals that it neither contained the material and information nor the statement containing details of ITC transaction under question. Section 75 of GST Act is a complete Code in itself which prescribes for various stages for determination of wrongful utilization of ITC while following the concept of reasonable opportunity of being heard to the assessee. Since the Statute itself prescribes for affording reasonable opportunity, it is incumbent upon the Revenue to afford the same and any deficiency in that regard vitiates the end result. The Jharkhand High Court has dealt with the provisions of Section 74 and 75 of GST Act as well as Rule 142 of GST Rules in the case of M/s Sidhi Vinayak Enterprises Vs. The State of Jharkhand ors [ 2023 (2) TMI 226 - JHARKHAND HIGH COURT] holding that he impugned show cause notice in both the cases does not fulfill the ingredients of a proper show-cause notice and thus amounts to violation of principles of natural justice, the challenge is maintainable in exercise of writ jurisdiction of this Court. Following decision of the Jharkhand High Court, this Court has no manner of doubt that the very initiation of the proceedings by way of show cause notice (Annexure P-1) is vitiated for the same being vague - Petition allowed. 2023 (5) TMI 847 Validity of audit report under Section 65[6] of the Karnataka Goods and Services Tax Act, 2017/Central Goods and Services Tax Act, 2017 - consequential direction to the third respondent to readjudicate after extending a reasonable opportunity in terms of SCN issued under Section 65[5] of the KGST/CGST Act - HELD THAT:- If the petitioner has furnished books of accounts in the month of March 2022 and the final endorsement is issued on 13.10.2022, and if it is undisputed that Notice under Section 65[5] of the KGST/CGST Act is served on the petitioner only on 23.12.2022, this Court must opine that the impugned audit report cannot be said to be after a reasonable opportunity. Therefore, this Court must interfere with the impugned order. At this stage, when queried, Sri. K M Shivayogiswamy submits that the petitioner would respond to the Show Cause Notice dated 09.12.2022 within two weeks from the date of receipt of a certified copy of this order. The petition is allowed-in-part. Income Tax 2023 (5) TMI 846 Reopening of assessment u/s 147 - Penny stock transaction - information received from Investigation Wing related to penny scrips in which various beneficiaries had transacted - HELD THAT:- In the present case the AO has heard the material on record which would prima facie suggest that the assessee had sold number of shares of a company which was found to be indulging in providing bogus claim of long term and short term capital gain. The company was prima facie was found to be a shell company. The assessee had claimed exempt of long term capital gain by way of sale of share of such company. Notice u/s 148 was issued calling upon the petitioner to deliver a return in the prescribed form for the assessment year 2012-13. The authority received information from Investigation Wing, Kolkata during the year under consideration that the assessee made transaction in penny stock in the scrip of M/s Twenty First Century (I) Limited for an amount of Rs. 6,49,000/-. It is settled law that sufficiency or adequacy of the reasons for the issuance of the notice for reopening of the assessment is not required to be gone into at this stage of the reopening. It can never be said that the final outcome of the proceedings has been derived at by the authority by issuing a notice for reopening. On the basis of material before it as highlighted above, if the Assessing Officer was satisfied to harbour reasons to believe that there was escapement of income and if on such basis, he has exercised his powers under Sections 147, 148 no fault can be found. This Court is in complete agreement with the aforesaid two decisions relied upon by the learned advocate appearing for the respondent- Authority namely; Purviben Snehalbhai Panchhigar [ 2018 (11) TMI 139 - GUJARAT HIGH COURT] and Pushpa Uttamchand [ 2022 (5) TMI 1158 - GUJARAT HIGH COURT] - Special Civil Application dismissed. 2023 (5) TMI 845 Reopening of assessment - validity of notice issued u/s 148A(b) and order passed u/s 148A(d) - Assessee seeking accommodation - principal allegation against the petitioner is that he has failed to disclose the entire sale consideration concerning the subject properties - HELD THAT:- A show cause notice was issued on 17.02.2023, which required a response to be filed by 23.02.2023. The petitioner, evidently, made a request for accommodation on 23.02.2023 to seek time up until 07.03.2023. We are told that the reason given for seeking accommodation was that the petitioner had to gather the material relevant for his defence. It appears that without dealing with the request for accommodation, the AO passed the impugned assessment order dated 03.03.2023. Clearly, the petitioner was not heard in support of his stand. There is, therefore, if nothing else, a breach of principles of natural justice, as the AO, without dealing with the request for accommodation, proceeded to pass the impugned assessment order dated 03.03.2023. On this singular ground, we are inclined to set aside the impugned assessment order dated 03.03.2023 and the order passed under Section 148A(d) - consequential notice issued under Section 148 of the Act shall also collapse. 2023 (5) TMI 844 Additions made in the taxable income - Additions included the purchases of goods made by the sister concern of appellant - amount paid in cash by the appellant from undisclosed sources - HELD THAT:- Neither before the authorities below nor before this Court, the appellant could bring any material on record to show that the addition of Rs.3,50,000/- was not pertaining to the A.Y. 1994-95 or the same related to purchases not made by it but by its sister concern namely, M/s B.R. Metal. Assessee is proved to have incurred expenditure qua the relevant year but could not offer any explanation about the sources of expenditure or part thereof. The explanation as offered by him that the addition did not pertain to the year under scrutiny and was qua the purchases made by its sister concern had not been found to be satisfactory by the authorities below. Under the provisions of Section 69-C such amount will certainly be deemed to be income of the assessee for the year 1994-95. Accordingly, we find no reason as to why the order passed by the Tribunal thereby making addition in the income of the appellant as income from undisclosed sources is liable to be interfered with. Hence, the argument so raised by the appellant is rejected. Addition on account of unrecorded rolling charges - HELD THAT:- Tribunal had restored addition of this amount on the ground that the appellant had failed to prove that it had incurred any expenses. Appellant failed to point out any irregularity or illegality in the order as passed by learned Tribunal on this point. The appellant did not dispute that the fact that the entries made in document A-1 were qua the amount received as rolling charges. It could not produce any material on record to prove that the expenses which were shown to be incurred in respect of job work charges and received from various parties, were recorded in the books of account. As such, the appellant was certainly not entitled to deduction to the extent of 75% in the amount as shown and was liable to addition thereof. Resultantly, no intervention is required to be made by this Court in the order of Tribunal. Addition on account of rolling charges received outside the books of account - CIT (A) had allowed deduction @75% from the addition so made and had allowed addition to the extent of 25% only after calculating the net profit on job receipts - A.Y. 1995-96 - HELD THAT:- On perusal of the orders passed by the authorities below, it is explicit that neither there was any challenge by the appellant of the fact that the entries made in the seized document were related to it nor it could establish that the transactions as shown in these seized document were recorded in its books of account. In the absence of any material being brought on record by the appellant to explain that the expenditure shown to have been incurred by it as per the entries made in the seized document, was recorded in the books of account,no fault can be found in the order passed by the Tribunal restoring addition of amount - As such, the order of the Tribunal on this point also deserves to be affirmed. Gross profit as calculated @8% of sales shown to be made in the seized document - The observations as made by the assessing officer and affirmed by the Tribunal on this point do not deserve any interference in view of the fact that the CIT (A) had not given any justification for reduction of the same. The gross profit calculated @8% cannot be stated to be on higher side at all and is reasonable one. As such, the finding given by the Tribunal on this point also deserve to be affirmed. 2023 (5) TMI 843 Long term capital gain - reliance on unsigned computerized Satakhat (agreement for sale) found during course of survey in premiss of third party lawyer - HELD THAT:- We find merit in the submission made by assessee that AO made addition on the basis of third-party information neither the AO made investigation on fact from purchasers nor copy of such satakat was provided to assessee nor the person from whose possession the document was recovered was examined during the re-assessment proceedings. There was no corroborative and supporting evidence to support the alleged incriminating material found at the business premises of Vasudev Goplani, Advocate. In absence of corroborative and supporting evidence, no justification for making addition on account of long term capital gains. Appeal of assessee allowed. 2023 (5) TMI 842 Disallowing deduction u/s.80P - interest income earned by the assessee from co-operative banks - HELD THAT:- The extant issue is no more res integra in view of the catena of decisions delivered by the Pune Benches. The Pune Bench in Rena Sahakari Sakhar Karkhana Ltd. [ 2022 (1) TMI 419 - ITAT PUNE] held that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The payer of interest is also a Co- operative society registered under the Cooperative Societies Act. Direct to grant deduction u/s.80P(2)(d) of the Act on the amount of interest earned from various cooperative banks. Appeal of assessee allowed. 2023 (5) TMI 841 Revenue recognition - Differential amount of TDS - Difference of TDS between the amount of TDS of assessee and the ITS data available - Assessee submitted that he had already recognized the income constituting 90% of the fee which was realized during the AY 2016-17 and only TDS component had not been recognized as the same was not reflecting in Form 26AS as on the date of filing of return and this is a case of double taxation - HELD THAT:- As in the interest of justice, we remit this issue to the file of the AO who shall examine the assessee s claim that the assessee has already recognized the income in AY 2016-17 itself. To the extent revenue has been recognized in AY 2016-17, the assessee shall be granted relief. Needless to say that the assessee be given opportunity of being heard. Appeal of the assessee stands allowed for statistical purpose. 2023 (5) TMI 840 Validity of Reopening of proceedings u/s 147/148 - notice after the expiry of four years - reasons to believe - HELD THAT:- Reasons recorded for reopening does not depicts anything regarding failure of the assessee to disclose fully and truly all material facts necessary for the assessment at the time of original assessment. Also gone through the order passed u/s 147/143(3) of the Act wherein at no point of time, the A.O. found that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment at the time of original assessment. Bare reading of reasons recorded for reopening for the Assessment Year 2012-13 and also the reassessment order at no point of time the A.O alleged that there was a failure on the part of the assessee to disclose fully and truly material facts necessary for his assessment at the time of original assessment. Thus, in our opinion, the proceedings initiated u/s 147/148 is amounts to making of roving enquiries of the settled matter which has already became final in the original assessment after due verification and examination. Decided in favour of assessee. 2023 (5) TMI 839 Disallowance of exemption u/s 54B - Whether assessee has failed to establish with documentary evidences that the agricultural activities have been carried out by him at least for a period of two years immediately preceding the dates of transfer? - CIT-A deleted the addition - HELD THAT:- We find that the assessee right from the beginning has claimed deduction u/s 54B - AO instead of examining the claim of Section 54B in right perspective, started investigation as that the assessee is not eligible for exemption of capital gain. The investigation of AO was not on right track. Assessee is eligible for claiming exemption of Section 54B irrespective of fact whether the land sold by individual assessee falls in rural area or in urban area. The conditions for claiming eligibility are that the land must have been used for agricultural purpose immediately for two years from the date of transfer for the agricultural purpose and the land acquired on investing such sale proceed should be used for agriculture purpose. We find that the AO has not questioned the nature of land purchased by assessee. To prove the claim of Section 54B, the assessee has shown agricultural income in three preceeding assessment years and return of income for three preceeding assessment years were filed the assessee also furnished the details recorded in Form 8 and 7/12 extract. Besides that, the assessee also furnished the evidence of sale of cotton, vegetables to APMC and Amish Oil Mills. AO while rejecting the claim of assessee u/s 54B, referred the decision of Hon'ble Jurisdictional High Court in CIT Vs. Siddhartha J. Desai [ 1981 (9) TMI 48 - GUJARAT HIGH COURT] but AO failed to appreciate the decision in correct perspective as the fact of said decision are more favorable to the assessee. the nature of land was also converted from agriculture to non-agriculture purpose just before transfer of land and the same was considered as a transfer of agriculture land as far as seller is concerned. Those facts exactly similar to the facts of the present case. Thus, we find that the ld. CIT(A) on appreciation of such evidence, allowed the deduction under Section 54B of the Act. We find that finding of ld. CIT(A) is based on appreciation of evidence. Invoking provisions of Section 50C of the Act by the AO - assessee vehemently submitted that the assessee sold agricultural land and the value of consideration was more than the Jantri value applicable for agricultural land, the Jantri value applied by Stamp Valuation Authority for collection of stamp from purchaser by applying the rate of non-agricultural land. We find that on such issue, the Assessing Officer has not brought any adverse evidence against the assessee. AO has not examined the purchaser, thus, we find merit in the submission of ld. AR of the assessee that the assessee is not liable to be taxed by invoking provisions of Section 50C of the Act in absence of any supporting evidence. We direct the AO to compute the capital gain on the basis of sale consideration shown on the sale deed dated 10.07.2013. Assessee appeal allowed. 2023 (5) TMI 838 Penalty u/s 271(1)(c) - assessee contented that no penalty is livable when the assessed income is finally made under the provisions of section 115JB - HELD THAT:- We observe that the Tribunal in the case of M/s. Samin Tekmindz India Pvt. Ltd.[ 2019 (8) TMI 449 - ITAT DELHI] following the decision of the jurisdictional High Court in the case of CIT Vs. Nalwa Sons Investments Ltd. [ 2010 (8) TMI 40 - DELHI HIGH COURT] deleted the penalty levied u/s 271(1)(c). Thus sustain the order of the ld. CIT (Appeals) in deleting the penalty levied u/s 271(1)(c). Appeal of revenue dismissed. 2023 (5) TMI 837 Levy of penalty u/s. 271(1)(c) - Income declared during search proceassessee had furnished inaccurate particulars of income - HELD THAT:- It is an undisputed fact that during the course of search on 12.01.2010, the Director of the assessee company declared income of Rs. 1,80,00,000/- belongs to the assessee company and paid taxes thereon ad filed its Return of Income on 07.10.2010 for the AY 2010-11. Further the time limit of filing of Return of Income for A.Y. 2010-11 was not expired on the date of survey namely 12.01.2010 i.e. much before the end of the financial year itself. Assessee in its Return of Income duly declared the sum of Rs. 1,80,00,000/- which was admitted during the course of survey. Thus it cannot be said that the assessee had furnished inaccurate particulars of income which is not disputed by the AO. As per Explanation 5A to Section 271(1)(c), penalty is not leviable since the assessee has paid the taxes thereon in the Return of Income filed u/s. 139(1) - As supported by case of CIT vs. Jupiter Distillery [ 2011 (12) TMI 390 - ITAT, AHMEDABAD] and Muninaga Reddy [ 2014 (2) TMI 82 - ITAT BANGALORE] wherein deleted the levy of penalty u/s. 271(1)(c). Also in the case of CIT vs. SAS Pharmaceuticals [ 2011 (4) TMI 888 - DELHI HIGH COURT] held where income surrendered by assessee during survey had been shown by it in its regular income-tax return filed within prescribed time, penalty could be imposed. CIT(A) has followed the above decisions and deleted the penalty on the declared income in search. CIT(A) confirmed the levy of penalty on the balance disputed income. We do not find any infirmity in the order passed by the CIT(A), who partly deleted the penalty levied u/s. 271(1)(C). The grounds raised by the Revenue is devoid of merits and the same is dismissed. 2023 (5) TMI 836 Capital gain - computation of income on account of sale of a house property with the help of section 50C - FMV determination - HELD THAT:- When capital gain is to be computed u/s 48 then full value of the consideration received or accruing as a result of the transfer by an assessee of a capital asset being land or building or both, is less than the value adopted or assessed by any authority of a State Government for charging the stamp duty, then such valuation determined by such State Government would be deemed to be the full value of consideration. The moment assessee pointed out that it has sold the property within 3.5 months and it cannot fetch the price as deemed by the AO on the strength of stamp duty valuation, AO should have referred it to the Valuation Cell. CIT(Appeals) has erred in observing that since the assessee has not asked the AO to refer the valuation of this property to the Valuation Cell, therefore, there was no necessity at the end of the AO to determine the fair market value u/s 50C(2) of the Income Tax Act. Quasi judicial authorities are being respected not on account of their power to legalise the injustice on technical ground but because they are capable of removing injustice and is expected to do so. Once the fact was brought to the notice of ld. AO that this property was purchased for a sum of Rs.2.38 crores and it is actually being sold after three half months for Rs.2.80 crores, then before deeming its sale value at Rs.3,90,00,000/-, AO ought to have applied his mind and ought to have got its value determined by the DVO. We set aside both the impugned orders and remit this issue to the file of ld. Assessing Officer for re-adjudication. AO is directed to call for a valuation report under sub-clause (2) of section 50C for determining the fair market value of the property on the date of transfer. AO is also directed to decide the claim of the assessee whether the gain is to be assessed as a capital gain or a business income. Appeal of the assessee is treated as allowed for statistical purposes. 2023 (5) TMI 835 Validity of Revision u/s 263 - non mentioning computer generated DIN - violation of the procedure prescribed by the CBDT - Legal existence of the order passed without the Document Identification Number (DIN) basing on the Circular No. 19/2019 - HELD THAT:- A reading of the CBDT Circular No. 19/2019, dated 14/08/2019 clearly shows that with effect from 01/10/2019, all the communication shall contain the computer generated DIN, without which, vide paragraph No.4 thereof, such a communication shall be deemed to have never been issued. Paragraph 3, however, refers to five exceptional circumstances. As stated therein that in such exceptional circumstances, the communication may be issued manually, but shall contending a statement referring to the exceptional circumstances and also the fact that it was so issued without DIN with the approval of the Chief Commissioner/Director General of Income Tax. There are two documents before us. One is the order dated 23/03/2020 passed under section 263 of the Act and the other is a communication dated 02/06/2020. The communication dated 02/06/2020 states that the order under section 263 of the Act dated 23/03/2020 was having a particular DIN. But the question is whether such a later reference will relate back to the date of order i.e., 23/03/2020 passed u/s 263 and validates the same. Since it is not the case of Revenue that DIN was generated on 23/03/2020 and the document dated 02/06/2020 is not specific on this aspect, we are of the considered opinion that it is imperative for us to look at the circumstances under which the DIN was generated separately. Neither the order u/s 263 nor the communication dated 02/06/2020 spell out the reasons for not either generating the DIN or quoting the same in the order dated 23/03/2020. Circular categorically mentions that subsequent to 01/10/2019, the computer generated DIN not only be allotted but be duly quoted in the body of the communication itself. In the communication dated 23/03/2020 any reference to DIN is conspicuously absent. To meet the events where the computer generated DIN could not be generated on the date of issuance of communication, five exceptions are provided by paragraph 3 of the circular. It is also specifically stated that if the case of the Revenue falls in any of these exceptions, the said fact has to be recorded in the communication itself in the prescribed format. Neither the reasons nor the statement in the prescribed format is to be found in the order passed under section 263 of the Act, spelling out the particular category of exception that prevented allotting the DIN on that day. It is yet another violation. We are of the considered opinion that for want of generation/quoting the DIN in the order dated 23/03/2020, such an order shall be treated to have never been issued and, therefore, shall not take any affect. Assessee appeal allowed. 2023 (5) TMI 834 Disallowance u/s 14A - DR had submitted that the assessee had non-current investment and had received during the assessment year a dividend - whether the CIT(A) was right in restricting the disallowance? - HELD THAT:- As disallowance made by the revenue authority cannot be more than the expenditure incurred by the assessee for earning the exempt income. For the above said purposes, we may fruitfully rely upon the decision of the Special Bench in the case of ACIT Vs. Vireet Investment P. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] - Decided against revenue. Addition u/s 56(2)(viia) - shares received by the assessee company on account of amalgamation, for a price lower than the Fair Market Value (F.M.V) of the shares - CIT-A deleted the addition - HED THAT:- In the present case, due to the scheme of amalgamation, the assessee received the shares of 11 amalgamating companies along with underline properties including the shares of various companies and in consideration thereof, had allotted the number of shares at face value of Rs.10/- to various shareholders of the said 11 amalgamating companies. In this way / practice, not only, the transfer of 11 amalgamating companies have taken place but also the transfer of unlisted / listed shares / preferential shares below the market rate have taken place. The argument of the ld.AR is that there is no transfer of shares in the eyes of law, as there is absence of transferor and transferee and there is no receive of shares, whatever transfer of receive of shares happened that was in pursuance to the statutory approved scheme of amalgamation done by the Hon ble High Court can not be accepted and is rejected. The reading of section 56(2)(viia) makes abundantly clear that there is no requirement of transfer as argued by the ld. AR. The requirement under the provision is the receive of any property being the share of a company without or inadequate consideration which is less than the Fair Market Value. Admittedly, the assessee is a company in which public are not substantially interested. Further, the assessee had received any property being shares of a company during the previous year relevant to the assessment year below the fair market value. CIT(A) has misunderstood and misread the statutory provisions mentioned in section 56(2)(viia) of the Act. The ld.CIT(A) has wrongly concluded that the word receive used in section 56 only happens on account of transfer. CIT(A) had held that the amalgamation is not a transfer and therefore, it will not form part of section 56(2)(viia) of the Act. CIT(A) without applying his mind had come to the conclusion that the shareholding and shareholders were identical and even post amalgamation, the holders were the same and the shareholding was in the same ratio. The ld.CIT(A) has lost his sight to the provision of section 56(2)(vii) which contemplates that the receipt of any property being shares of an unlisted company in which public are not substantially interested by a company in which public are not substantially interested. In the present case, the assessee received the property being the shares of the amalgamating companies along with the shares held by these amalgamating companies. As mentioned hereinabove, the assessee company had received the property being the shares of amalgamating companies in which the public are not substantially interested, without consideration or a consideration which is less than the fair market value of such shares. In view of the above, the conclusion drawn by the ld.CIT(A) was without any basis. Decided in favour of revenue. Whether the amount charged by the AO on account of receive of shares, was in accordance with law or not ? - Admittedly, the ld.CIT(A) has not decided the grounds of the assessee on merit and had granted the relief to the assessee on technical ground. As is clear from our finding, hereinabove, the Assessing Officer was within his jurisdiction to invoke the provision of section 56(2)(viia), therefore, we deem it appropriate to remand back the present appeal to the file of ld.CIT(A) with a direction to decide the grounds raised by the assessee on merit. Appeal of Revenue is partly allowed for statistical purposes. 2023 (5) TMI 833 National Faceless Appeal - Procedures for Faceless assessment - Non grant of opportunity for personal hearing - HELD THAT:- Assessee though made the request to the learned CIT(A) for grant of opportunity for personal hearing through the National Faceless Appeal Centre, however, the same was not granted to the assessee. Therefore, in view of the above, we deem it appropriate to restore the appeal to the file of the learned CIT(A) for de novo adjudication after granting the opportunity to the assessee for personal hearing as per the Faceless Appeal Scheme, 2021. The assessee can make a fresh request in this regard as per the aforesaid clause (12) of the Faceless Appeal Scheme, 2021. Appeal by the assessee is allowed for statistical purposes. 2023 (5) TMI 832 Addition u/s 68, u/s 69A and section 69 - assessee stated that he has disclosed u/s 183 of the Finance Act, 2016 in respect of the Income Declaration Scheme, 2016 (IDS), 2016 - deposit of amount due under the IDS, 2016 after the due date of 30.09.2017 that is on 21.12.2017 - AO observed that certificate of declaration under IDS, 2016 has not been produced by the assessee to establish the claim so made - HELD THAT:- We take note of the Notification No. 103/2019 dated 13.12.2019 which has extended the due date for payment of tax under the IDS, 2016 along with interest and penalty in respect of income declared under the IDS, 2016 to 31.01.2020. Considering the fact of deposit of tax payable under the IDS, 2016 by the assessee though after the original due date but much prior to the extended due date as well as prior to the issuance of Notification No. 103/2019, we find it proper to remit the matter back to the file of ld. AO for the purpose of verification of these facts and compute the interest if, applicable, in terms of the notification referred above It is important to note that assessee has discharged his tax liability in respect of declaration made by him under the IDS, 2016. Having done so, the benefits available under the IDS, 2016 should be given to the assessee. The Central Government itself relaxed the condition for making the payment of last installment by extending the dates from 30.09.2017 to 31.01.2020. In the explanatory memorandum to Notification No. 103/2019, it is certified that no person is being adversely affected by giving retrospective effect to this notification. Thus, the intention of the Central Government is in no way to adversely affect any person in relation to IDS, 2016. In the present case, assessee has duly discharged its tax liability under the IDS, 2016 which is prior to the extended due date as well as before the notification itself and, therefore, there is no occasion to put him in an adverse situation. Appeal of the assessee is allowed for statistical purposes. 2023 (5) TMI 831 Disallowance being commission paid - allowable business expenditure or not? - CIT(A) dismissed the appeal of the assessee primarily holding that the communication sent from the office of the first appellate authority for furnishing the written submission were not complied by the assessee and the assessee has not provided any evidence to substantiate his grounds of appeal before him - HELD THAT:- The assessee had made enquiries and ascertained that majority of the parties had moved their residences and present residing in places other than the addresses as provided to the A.O. during the assessment year 2016-2017, along with the details of the bank statements, TDS details etc. The assessee had filed confirmations from all the recipients of the commission payment with new addresses and the same are placed on record. The assessee has also made TDS deduction with respect to the commission payment made by him. The bank statements are also provided. Since the first appellate authority s order is an ex parte order, in the interest of justice and equity, we are of the view that one more opportunity ought to be provided to the assessee to prove that commission payments as genuine payment and necessary expenditure for the purpose of his business. Decided in favour of assessee for statistical purposes. 2023 (5) TMI 830 Condonation of delay - Levy of penalty u/s 271(1)(c) - CIT(A) dismissing the appeal holding that the same was barred by limitation u/s 249(2) - Condonation of delay due to outbreak of Covid-19 pandemic - HELD THAT:- We find that there is nationwide Covid 19 Pandemic situation which is beyond the control of the human being and the assessee is prevented by sufficient cause in not filing the appeal in time and the ld. CIT(A) should have considered this aspect of the case while deciding the appeal of the assessee. We feel that the assessee has not received justice and appeal of the assessee has been dismissed merely on the ground that the appeal was filed belated, but considering the decision of the apex court [ 1987 (2) TMI 61 - SUPREME COURT] , we deem it fit the interest of justice to restore the matter to the file of ld. CIT(A) to decide on this merit of the case. Therefore, we set a side the matter to the file of ld. CIT(A) to decide the appeal of the assesses on merits. The assessee is also directed to co-operate with the ld. CIT(A) in deciding the appeal on merits and without sufficient reason, not to take further adjournments.Appeal of the assessee is allowed for statistical purposes. 2023 (5) TMI 829 Addition u/s 56(2)(ix) - forfeited amount of application money collected on issuing shares against share warrants - six parties did not pay the balance amount of 75% and hence the assessee forfeited the payments of 25% already made by them - HELD THAT:- In the instant case, the assessee has received money on issuing share capital in the form of exercise of rights in share warrants. Share capital so collected by the assessee is not in the course of negotiations for transfer of capital asset. Shares so issued may constitute Capital asset in the hands of the persons, who purchased the shares, but that is not relevant here. Issuing share capital does not result in transfer any capital asset. Accordingly, since the money was not received in the course of negotiations for transfer of capital asset, the provisions of sec.56(2)(ix) will not apply to the facts of the present case. As decided in M/S. R.S. TRIVENI FOODS P. LTD. case [ 2019 (8) TMI 1674 - ITAT DELHI] forfeiture of the amount is not on account of failure of negotiation of transfer of capital asset of the assessee and thus, is not hit by section 56(2)(ix). The addition sustained by the Ld. CIT (A) is directed to be deleted. Thus we hold that the amount forfeited by the assessee out share capital issued by it shall not fall within the scope of sec.56(2)(ix) - Further, the said amount shall constitute a Capital receipt in the hands of the assessee. Accordingly, the above said amount is not taxable in the hands of the assessee. Appeal of assessee allowed. 2023 (5) TMI 828 Validity of intimation issued u/s 143(1) when the return of income filled was held as invalid return u/s 139(9) - Invalid or defective return - HELD THAT:- An order u/s 139(9) is on record by which return of income filed by the assessee has been treated as invalid return. Despite treating the return as invalid return, it has been processed by CPC, u/s 143(1)(a) by disallowing the claim of the assessee. We have also noted that there is a pre-requisite of return to be available u/s 139 or 142(1) for issuance of an intimation u/s 143(1) - Since the return has been held to be invalid by CPC, there exists no return u/s 139 which could have been processed u/s 143(1). Accordingly, processing done by CPC of an invalid return is improper and not in accordance with the provisions of the Act and Rule 8 of the aforesaid scheme. We are of the considered view that ld. CIT(A) is wrong in holding the processing of return of income u/s 143(1) as valid when prior to such processing, an order u/s 139(9) was passed treating the return as invalid resulting into situation as if no return has been filed. Accordingly, grounds taken by the assessee are allowed. 2023 (5) TMI 827 Addition u/s 68 - cash deposit/time deposit by the assessee in its cooperative credit society and IDBI Bank account - HELD THAT:- When the assessee has not given the detail viz. name, address and PAN of the person from whom the cash in question was received along with confirmation neither before the AO nor before the Ld. CIT(A) nor the assessee has come up before the Tribunal to furnish any such detail, the identity and creditworthiness of the depositor has not been proved nor the genuineness of the transaction is proved as required under section 68 of the Act, we find no illegality or perversity in the impugned findings returned by the Ld. CIT(A). So ground No.1 raised by the assessee in its appeal is hereby dismissed. Unexplained/ unsecured loans - HELD THAT:- No doubt the assessee has brought on record PAN, bank statement, ledger account of the lender etc. but in the given circumstances their creditworthiness has not been proved by the assessee when specifically called upon by the AO to prove as required under section 68 of the Act. Merely because of the fact that transaction is through banking channel does not absolve the assessee to prove the creditworthiness of the lenders. Financials of any of the creditors have not been brought on record. When such transactions are surrounded by unexplainable facts and suspicious circumstances the onus is on the assessee to explain and to dispel all the suspicious circumstances which the assessee has miserably failed to prove. No doubt income of the lending entities is not the requirement of the law or they should have sufficient balance in their account to lend the loan. But we are of the considered view that when transactions themselves are surrounded by unexplainable and suspicious circumstances, income of the lending parties and their business profile do become a requirement to be explained by the assessee. No income or meager income of the lender itself speaks volume of the creditworthiness of the lenders which is the requirement of section 68 to prove.When the assessee has failed to discharge the onus by proving genuineness of the transactions and creditworthiness of the creditors as required under section 68 of the Act, the impugned deletion made by the Ld. CIT(A) is not sustainable - Decided in favour of revenue. Estimated addition @ 25% of the advance booking receipt on shops/flats by the AO u/s 68 - HELD THAT:- Assessee being a builder developer received an amount as advance booking of low cost housing flats. It is also not in dispute that at the time of applying for conversion of use of the land in question from agriculture to residential the assessee was informed that sole plot reserved for a project called Virar Alibag Corridor Project on which no construction activity can be carried out. Assessee was to refund the advance to the investors. Since the project could not be further carried out due to legal bar the assessee was under legal obligation to refund the amount to the investors after receiving compensation from the government. Estimated addition @ 25% of the advance booking received by the assessee by the AO is not sustainable, hence rightly deleted by the CIT(A). Consequently grounds raised by the Revenue are hereby dismissed. 2023 (5) TMI 826 Penalty u/s 271(1)(c) - Addition u/s 14A r.w.r. 8D - HELD THAT:- We find that the mere fact that the provision of Section 14A r.w. Rule 8D(2)(iii) are held applicable and the claim of the assessee that it has not incurred any expenditure in relation to exempt income not being accepted cannot lead to a situation where the charge of furnishing of inaccurate particulars of income can be fastened on the assessee without leading any positive evidence to the effect that there is wrong furnishing of information vis-a-vis the investments which has yielded or can yield exempt income in future and secondly, there is actual incurrence of certain administrative expenditure for managing these investments during the year under consideration. As we have noted above, there is no finding recorded by the AO either during the assessment proceedings or even during the penalty proceedings to this effect and no positive evidence has been led in this regard and in absence thereof, the penalty cannot be levied on the assessee. The matter is squarely covered by the decision of Reliance Petroproducts Ltd [ 2010 (3) TMI 80 - SUPREME COURT] wherein an identical matter relating to levy of penalty u/s 271(1)(C) on disallowance u/s 14A was under consideration and it was held that the same cannot lead to satisfaction of charge of furnishing of inaccurate particulars of income and the penalty was held not sustainable in the eyes of law - thus e levy of penalty u/s 271(1)(c) is hereby directed to be deleted. Decided in favour of assessee. 2023 (5) TMI 825 Revision u/s 263 - computation of income where the surrendered income is considered separately as deemed income and not as business income, after setting off the same against the business loss it will still show a net loss figure and there wouldn t be any taxable income resulting in nil tax liability for the impugned assessment year 2016-17 - HELD THAT:- The phrase prejudicial to the interest of the revenue has to be read in conjunction with an erroneous order passed by the AO. In the instant case, we find that even where the AO had considered amount surrendered as deemed income as against business income, he would still be required to allow set off of the same against regular business income, being the legal position under pre-amended law (as we have discussed subsequently) and the order so passed cannot therefore be held as erroneous in allowing set off of business income against income surrendered irrespective of different classification and also cannot be held as prejudicial to the interest of the Revenue as there is clearly no loss to the Revenue. As regard the assessee s eligibility to set off business loss against deemed income for the impugned assessment year 2016-17, the matter is no more res integra as it has held by various Benches of the Tribunal that the amendment brought in by the Finance Act, 2016 is prospective in nature. We refer to case of Sanjay Bairathi Gems Ltd. [ 2017 (8) TMI 721 - ITAT JAIPUR] wherein, speaking through one of us, it was held that the amendment brought in by the Finance Act, 2016, whereby set off of losses against income referred to in section 69B has been denied is stated clearly to be effective from 1-4-2017 and will accordingly, apply to assessment year 2017-18 onwards and for the year under consideration i.e, assessment year 2013-14, there is no restriction to set off of business losses against income brought to tax us 69B. In the instant case, the show-cause pertaining to assessment year 2016-17 has been issued by the ld PCIT on 31/01/2022 which is subsequent to issuance of aforesaid CBDT Circular dated 19/06/2019 which itself shows that the initiation of proceedings u/s 263 are not in compliance with the aforesaid CBDT Circular. As been emphasized by the CBDT that the pending assessment and litigations should be handled taking into consideration the clarification so issued and in the instant case, a fresh litigation has been started by the Department by initiation of action u/s 263 which is clearly in the teeth of the CBDT Circular and cannot be sustained in the eyes of law. Thus the impugned order passed by the ld PCIT u/s 263 of the Act cannot be sustained in the eyes of law. Decided in favour of assessee. 2023 (5) TMI 824 Assessment order passed in the name of amalgamating/non-existing company - HELD THAT:- The decision of the Hon ble Supreme Court in the case of Mahagun Realtors (P.) Ltd. [ 2022 (4) TMI 347 - SUPREME COURT] cannot be interpreted to mean that even in the case where the factum of amalgamation was put to the notice of AO, still the assessment made in the name of amalgamating company i.e. non-existing company is valid in law. The fact situation of the present case squarely falls within fact situation of the cases of Maruti Suzuki India Ltd.[ 2019 (7) TMI 1449 - SUPREME COURT] , Spice Enfotainment Ltd. [ 2011 (8) TMI 544 - DELHI HIGH COURT] and the decision of Alok Knit Exports Ltd. [ 2021 (8) TMI 777 - BOMBAY HIGH COURT] and Teleperformance Global Services Pvt. Ltd. [ 2021 (4) TMI 550 - BOMBAY HIGH COURT] Therefore, we have no hesitation to hold that the assessment order passed by the Assessing Officer in the name of non-existing entity is null and void ab initio. Accordingly, we hereby quash the assessment order. 2023 (5) TMI 797 Validity of assessment u/s 92CA - period of limitation as prescribed u/s 92CA(3A) r.w.s. 153 - HELD THAT:- As relying on ATOS INDIA PVT. LTD.case [ 2023 (2) TMI 1112 - ITAT MUMBAI] and M/S. MONDELEZ INDIA FOODS PRIVATE LIMITED [ 2022 (11) TMI 1339 - ITAT MUMBAI] order of the ld. TPO dated 01/11/2019 and draft assessment order dated 27/12/2019 as barred by limitation, thereby resulting in assessee not being an eligible assessee u/s.144C(15)(b)(i) of the Act and consequentially the final assessment order dated 17/04/2021 is also bad in law. Accordingly, the ground of original grounds and additional grounds raised by the assessee are hereby allowed. Customs 2023 (5) TMI 823 Seeking permission to re-export of mobile phones (Apple brand I-Phones) - illegal import or not - case of petitioner is that despite the payment of the redemption fine and the penalty amount, the goods have not been released for the purpose of re-export - nondeposit of penalty by one noticee - HELD THAT:- The contention raised by the respondent is unmerited. The petitioner has not challenged the Order-in-Original and has, in fact, deposited the redemption fine and paid the penalty imposed on him. The respondent cannot withhold the benefit of the order for the reason that the other co-noticees have failed to comply with the Order-in- Original and have not deposited the penalty amount. It is not disputed that the respondent is entitled to recover the penalty in terms of the provisions of the Act in case a noticee fails to deposit the same despite the order being passed. However, nondeposit of penalty by one noticee cannot be to the detriment of the other noticee - It is not disputed that the 50 mobile phones, which are sought to be re-exported after deposit of the redemption fine belong to the petitioner. The other co-noticees on whom the penalties have been imposed are the courier company and its employees. They are admittedly not the employees of the petitioner and he has no control over the actions of those noticees. Since the petitioner has deposited the requisite redemption fine and has deposited the penalty imposed upon him, the respondent is required to release the goods for the purpose of re-export as ordered by the Order-in-Original dated 10.02.2023. The present writ petition is allowed and the respondents are directed to forthwith release the offending goods to the petitioner for the purpose of re-export. 2023 (5) TMI 822 Smuggling - illegal import of Gold - foreign currency - demand based on the statement given by Shri Deepak Batra and Shri Amar Punjabi - no opportunity to cross examine was provided - corroborative statements or not. Opportunity to cross-examine Shri Deepak Batra and Shri Amar Punjabi was not given to the appellants - HELD THAT:- Though case was made out based upon the statement of Shri Deepak Batra who was intercepted at International Airport while travelling to Bangkok. He had deposed the connivance of three of the appellants for illegally exporting/importing the foreign currency and gold. Pursuant to his statement, searches were conducted at the appellants premises and their statements were recorded. Three of the appellants, as already observed above, have in full corroboration acknowledged their involvement in the alleged illegal transactions. In several words and several ways three of them have confessed about being involved in the business of illicit trade of export and import of currency and gold. The case therefore is based upon the admissions of the appellants. The admissions have never been retracted by any of the appellants - The foreign currency found in the baggage of Shri Deepak Batra stands corroborated on documents as were recovered during said search. Resultantly, there are no infirmity when opportunity of cross-examining Shri Deepak Batra has been denied to the appellants. The goods in question were not seized from the customs area - HELD THAT:- The appellants could not produce any document about discharging their customs duty liability. Accordingly, its stands sufficiently proved that appellants have been procuring gold in sheer violation of the Customs Act and the gold so procured by them has passed the customs area in a concealed manner without payment of customs duty which is sufficient to hold that appellants were involved in smuggling of gold. On 05.07.2017, Shri Deepak Batra was intercepted at the international airport with concealed foreign currency in his baggage. The said currency was mentioned to be handed over to him by three of the appellants which stands proved from the document recovered from the premises of the appellants. Resultantly, irrespective, the currency/gold were not recovered from the customs area, the trading thereof is definitely in violation of the Customs Act and the goods are definitely the smuggled goods. There is no infirmity in the order under challenge while ordering absolute confiscation of foreign currency recovered from Shri Deepak Batra, Indian and foreign currency as recovered from the premises of Shri Janki Dass Madan and the confiscation of the gold recovered from the appellants along with the order of imposition of penalty upon three of the appellants along with Shri Deepak Batra - Appeal dismissed. 2023 (5) TMI 821 Adjust of sale proceeds of goods auctioned - Seized goods could not be cleared due to financial difficulty - Appeal were pending - Confiscation with option to redeem on payment of redemption fine and further penalty was also imposed under Section 112 of the Customs Act - import of rough marble blocks - restricted goods or not - HELD THAT:- It is found that from the copy of the RTI reply dated 25.01.2019, that the Revenue in terms of its notice to auction sale issued during 2014, and in spite of the appellant having sent reply dated 28.04.2014 informing pendency of their appeals, proceeded to dispose of the goods. It is further found that no further opportunity was given by the Customs Department by giving a fresh notice to the appellant after disposal of the appeals by the Commissioner (Appeals). Under such facts and circumstances, following the ruling of the Hon ble Delhi High Court in the appellant s own case, ORIENTAL TRIMEX LTD. VERSUS THE COMMISSIONER OF CUSTOMS IMPORT under similar facts and circumstances, these appeals are allowed. It was held in the case that The respondent/revenue, having sold the goods, which it could not have done, since the appeal was pending at the relevant time, we find that there is no good reason for adjustment of redemption fine. Appeal allowed. 2023 (5) TMI 820 Time limitation for filing appeal - Review Order passed only on 27.04.2010 which is beyond the period of three months as required under Sub Section (3) of Section 129D of Customs Act, 1962 - Refund of SAD - HELD THAT:- There is absolutely no evidence adduced as to show the date on which the order was received by the Reviewing authority. The Commissioner (Appeals) has discussed in the impugned order that even after repeated requests the Department did not furnish the date on which the original order was received by the Reviewing Authority. The very same facts and issue came up for consideration before this Tribunal in COMMISSIONER OF CUSTOMS (EXPORTS) , CHENNAI VERSUS M/S. NAGAPPA EXPORTS, M/S. AMARA RAJA BATTERIES LTD. AND M/S. NORITSU KOKI CO. LTD. [ 2023 (3) TMI 1216 - CESTAT CHENNAI ], in which it was observed that As there is no evidence to substantiate the contention of the Department that the Order-in-Original was received on such dates by the Review Cell and as there is no reason to dis-believe the findings of the Commissioner (Appeals) that there was no evidence as to the date on which Order-in-Original was received by the Reviewing Authority, the strong inference that can be drawn is that there is a delay in passing the review orders in these appeals. There are no ground to take a different view. The impugned order sustained. The appeal filed by the Department is dismissed. 2023 (5) TMI 819 Demand of Interest - Commissioner has not recorded any reason for demanding the interest under Section 47(2) of the Customs Act - HELD THAT:- From a plain reading of the Section 125 of the Customs Act, it is evident that Section 125(2) is not a section for confirmation of demand of duty, but it creates an obligation on the importer/person seeking redemption of the goods as per Section 125(1) to pay the amount. Section 125(2) clearly provides only for payment of duty - thus, the demand for interest made cannot be upheld. In the case of COMMISSIONER OF CUSTOMS VIJAYAWADA VERSUS RUCHI SOYA INDUSTRIES LIMITED [ 2016 (7) TMI 88 - CESTAT BANGALORE] , Tribunal by majority has held that there was no delay in paying duty assessed in terms of Section 47(1) of the Act. Sub Section (2) of Section 47, states that interest is payable if the duty is not paid within 2 days from the date on which the assessed bill of entry is returned to the assessee for payment of duty. I have to agree with the Member (J) that in the present case in terms of Section 47(1), there is no delay in payment of duty and consequently there is no liability to pay interest under Section 47(2) of the Act. There are no merits in the demand for interest made by the impugned order. The impugned order needs to be modified to that extent - appeal allowed. Corporate Laws 2023 (5) TMI 818 Petitioner s DIN number was incorrectly used - grievance of the Petitioner is that owing to the identity in names, the Petitioner has been wrongly reflected as a Director in Respondent No. 2 company- Katariya Multi Trade Private Limited - HELD THAT:- At the time of the incorporation of Respondent No. 2, the name of Sunil Rawat along with Indore, Madhya Pradesh address was mentioned. However, the DIN number of the Petitioner, who is a resident of Delhi, has been wrongly mentioned. It is this error that needs to be corrected in the records - In the facts and circumstances of the case, when there is no dispute that the DIN number has been wrongly mentioned due to an error of the Company Secretary concerned, the Petitioner cannot be visited with consequences unknown to him and for which he is not to blame. It is accordingly directed that Respondent No. 2 company Kataria Multi Trade Pvt. Ltd. shall be deemed to have been incorporated with the details of Directors given at page 43 of the petition as the correct details of the directors with the DIN numbers. The Petitioner, whose DIN number has been incorrectly used, shall be saddled with no liability in respect of Respondent No. 2 company or its subsidiaries including any of their businesses or activities - If any rectification has to be carried out on the MCA website or ROC, Ahmedabad records, the same shall be done within 4 weeks from the date of filing of an application to this effect. Petition disposed off. Insolvency & Bankruptcy 2023 (5) TMI 817 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Corporate Guarantor - assignment of debt to an Asset Reconstruction Company - CIRP against the Principal Borrower, already commenced - initiation of two applications under Section 7 for same set of claim amount and default simultaneously - Validity of unregistered Assignment Agreement. Whether the Assignment Agreement being unregistered document could not have been relied by the Adjudicating Authority for admitting Section 7 application? - HELD THAT:- The Assignment Agreement dated 18.01.2021 was relied by the Financial Creditor and has been referred to by the Adjudicating Authority in Para 5 of the order. The Order dated 11.05.2022 initiating Section 7 application has not been reversed or modified and still in force. Secondly, the Assignment Agreement dated 18.01.2021 being in accordance with Section 5 of the SARFAESI Act, 2002, the Respondent No.1 has to be deemed to be lender and is thus entitle to exercise all rights which were vested in the lender. Section 5 is an enabling provision to empower the Asset Reconstruction Company to acquire financial assets in the manner provided in Sub-section (1). The Assignment Agreement dated 18.01.2021 was in accordance with Section 5(1)(b) i.e. by entering agreement with State Bank of India. Sub-section (2) of Section 5 contains a deeming clause. Sub-section (2) provides that Asset Reconstruction Company on such acquisition be deemed to be the lender and all the rights of such bank or financial institution shall vest in such company. When the legislature uses the deeming fiction it is always for purpose and object. Hon ble Supreme Court had occasion to consider provision of Section 43 of the Indian Contract Act, 1872 which contains the deeming provision and on fulfilling the ingredients as provided in the statute, legal fiction will come into play, irrespective whether the transaction was in fact intended or even anticipated to be so - Hon ble Supreme Court in Anuj Jain, Interim Resolution Professional for Jaypee Infratech Limited vs. Axis Bank Ltd. Ors. [ 2020 (2) TMI 1259 - SUPREME COURT ] held that Applying the principles to the provision at hand i.e., Section 43 of the Code, it could reasonably be concluded that any transaction that answers to the descriptions contained in sub-sections (4) and (2) is presumed to be a preferential transaction at a relevant time, even though it may not be so in reality. In other words, since sub-sections (4) and (2) are deeming provisions, upon existence of the ingredients stated therein, the legal fiction would come into play; and such transaction entered into by a corporate debtor would be regarded as preferential transaction with the attendant consequences as per Section 44 of the Code, irrespective whether the transaction was in fact intended or even anticipated to be so. Following the law laid down by the Hon ble Supreme Court, when acquisition of assets by Asset Reconstruction Company is made as per Section 5(1), deeming provision contained in Sub-section (2) of Section 5 shall come into play and the Asset Reconstruction Company shall be deemed to be Lender for all purposes. As a Lender, the Respondent No.1 was fully entitled to exercise its right to initiate proceeding under Section 7. Assignment of financial debt has to be by registered document, or not - HELD THAT:- Reliance placed on judgment of this Tribunal in Palm Products Pvt. Ltd. vs. T.V.L. Narsimha Rao and Anr., [ 2021 (3) TMI 304 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI ]. In the above case, a Non-Banking Financial Company (NBFC) after being held to be related party under Section 29A was kept out of the CoC which action was challenged before this Tribunal. When the NBFC made an application before the Resolution Professional on the basis of Assignment Deed, the said deed was unregistered and that is the reason given by the Resolution Professional for not accepting the claim. The Adjudicating Authority has observed in the order that applicant was non-financial institution, which findings were challenged before this Tribunal. This Tribunal held that there being NBFC certificate, the applicant was NBFC and the said observation have to be ignored. A perusal of the above observation indicate that although the application was held to be NBFC, however, there was no case that applicant was Asset Reconstruction Company. Assignment in the above case was not in favour of any Asset Reconstruction Company. Hence, the observation made in the judgment upholding the view of the Adjudicating Authority that document was unregistered hence the Resolution Professional rightly ignored the claim, does not lend any support to the case of the Appellant in the present case - The present is a case of an Asset Reconstruction Company where for acquisition of asset by an Asset Reconstruction Company an particular manner and procedure is prescribed and when asset is acquired as per provisions of Section 5 of SARFAESI Act, deeming section will come into play. Application under Section 7 having admitted against the Principal Borrower, it was not open for the Respondent No.1 to file application against the Corporate Guarantor since two simultaneous proceedings under Section 7 cannot be proceeded with - HELD THAT:- In the case of Dr. Vishnu Kumar Agarwal vs. Piramal Enterprises Ltd. [ 2019 (2) TMI 316 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] it was held that though there is a provision to file joint application under Section 7 by the 'Financial Creditors', no application can be filed by the 'Financial Creditor' against two or more 'Corporate Debtors' on the ground of joint liability ('Principal Borrower' and one 'Corporate Guarantor', or 'Principal Borrower' or two 'Corporate Guarantors' or one 'Corporate Guarantor' and other 'Corporate Guarantor'), till it is shown that the 'Corporate Debtors' combinedly are joint venture company. The Hon ble Supreme Court in Laxmi Pat Surana vs. Union of India Anr. [ 2021 (3) TMI 1179 - SUPREME COURT ] had occasion to consider the right to proceed against Guarantor in aforesaid case. Hon ble Supreme Court has held in the above judgment that Section 7 is an enabling provision which permits the Financial Creditor to initiate CIRP against a Corporate Debtor. The Corporate Debtor can be the Principal Borrower as well as the Corporate Guarantor. The Hon ble Supreme Court held that right or cause of action would enure to the lender to proceed against the Principal Borrower, as well as the guarantor in equal measure. The scheme of I B Code, in view of law laid down by the Hon ble Supreme Court in Laxmi Pat Surana vs. Union of India Anr., the judgment of this Tribunal in Dr. Vishnu Kumar Agarwal is not followed. It is further relevant to notice that no submission have been advanced regarding debt or default. Debt and default by the Corporate Debtor is an admitted fact which has not been questioned or contested. The Adjudicating Authority having returned the finding that there exist financial debt and default, no error has been committed by the Adjudicating Authority in admitting Section 7 application. There are no error in the impugned order admitting Section 7 application. There is no merit in the Appeal. Appeal is dismissed. PMLA 2023 (5) TMI 816 Seeking grant of bail - Money Laundering - cheating and misappropriation of money by making false promises and forging documents - HELD THAT:- In Rohit Tondan [ 2017 (11) TMI 779 - SUPREME COURT ], the Hon'ble Supreme Court has held that The Court is not required to record a positive finding that the accused had not committed an offence under the Act. The Court ought to maintain a delicate balance between a subsequent judgment of acquittal and conviction and an order granting bail much before commencement of trial. The duty of the Court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. Further, the Court is required to record a finding as to the possibility of the accused committing a crime which is an offence under the Act after grant of bail. The only allegation against the applicant is of having transferred the company and there is no allegation against the applicant of having acquired any company or any other property. Even while the applicant was a director in the company, there is no allegation that he was having the authority to make financial transactions and that he in fact did make any transaction which may amount to commission of any offence. What prima facie appears from the allegation levelled in the complaint is that there is absolutely no allegation of commission of any of act which may amount to commission of any offence and he has been charged with the alleged offences merely for the reason that he held the position of director in the company. From the material placed before the Court at this stage, apart from being a director of the company which had been sold away to the persons accused of launching a Bike Bot scheme, there appears to be no allegation that the applicant has actually committed any such act, as would attract the offence described in Section 3 of the Prevention of Money Laundering Act. As the applicant has no previous criminal history, apart from the predicate offences, there appears to be no likelihood that the applicant would again indulge in commission of similar offence in case he is released on bail and no material has been plato theced in the counter affidavit to give rise to a reasonable apprehension to this effect. The applicant is languishing in jail since 20.12.2020 and he has already been granted bail in the predicate offence as also in case Case Crime No. 558/2021, under Section 2 3 U.P. Gangsters and Anti-Social Activities (Prevention) Act, 1986, in which the applicant has been implicated after his arrest in the present case. Applicant is released on bail subject to conditions imposed - Application allowed. Service Tax 2023 (5) TMI 815 Levy of sales tax - transactions relating to telephone sets, modems and caller IDs instruments - non-refundable deposits and refundable deposits - HELD THAT:- Matter related to Levy of sales tax on non-refundable deposits and refundable deposits was remanded by High Court - It was held by High Court that the transactions relating to telephone sets, modems and caller IDs instruments are subject to sales tax levy. This Court is of the opinion that no interference is called for especially in view of the fact that the High Court has taken note of all the decisions on the point - Petition dismissed. 2023 (5) TMI 814 Levy of service tax - Event Management services or not - respondent was conducting Cricket Matches as per the direction of BCCI and for that purpose the BCCI are transferring/ paying various type of amounts under the cover of subsidies / subvention from the amount of profit which was earned by the by way of conducting matches - it was held by CESTAT that From the facts, it is clear that the respondent have received the subsidy against the expenses incurred for conducting Cricket Matches, therefore, by any stretch of imagination it cannot be said that the respondent has provided any taxable service to BCCI. HELD THAT:- This Court is of the opinion that no substantial question of law arises - Appeal dismissed. 2023 (5) TMI 813 Exemption to SEZ unit - authorised operations in a SEZ - Validity of conditions imposed - Board of approval refused to issue of Forms A1 and A2 on the ground that these forms cannot be issued with retrospective effect - HELD THAT:- The judgment relied upon in GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [ 2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT ] decided by the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh was challenged under Article 136 (in a SLP(C) Dy. No. 22140 of 2019) which was dismissed by this Court on 26.07.2019. Following the said decision, this Court holds that there is no merit in the appeal. Appeal dismissed. 2023 (5) TMI 812 Rejection of declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - time limitation - It is the petitioner s case that it is entitled to the benefit of the Scheme since it had made a declaration under Section 125 of the Finance Act (No. 2), 2019 (declaration as contemplated under the Scheme) - whether the amount of service tax payable by the petitioner was quantified before the stipulated date, that is, before 30.06.2019? HELD THAT:- The expression tax dues is defined in wide terms. It encompasses dues that were mentioned in show cause notice(s) or were subject matter of disputes before various authorities. It also includes dues that were voluntarily disclosed by an assessee without the same being subject matter of any enquiry or dispute. Further, it covers arrears in respect of which there was no dispute or any pending litigation. More importantly, it also covers cases where enquiry, investigation or audit were pending but the dues had been quantified - Section 125(1) of the Finance Act (No. 2), 2019 posites that all persons, except those as stipulated, would be eligible to make a declaration under the Scheme. The legislative intent in enacting Chapter V of the Finance Act (No. 2), 2019 (the Scheme) was to maximize the sweep of the Scheme. It was to cover all situations where tax was payable except those cases, which were expressly excluded - Clause (c) of Section 123 of the Finance Act (No. 2), 2019, which covers cases where enquiry, investigation or audit is pending, must be interpreted bearing the aforesaid legislative scheme in mind. In terms of Clause (c), the tax dues in cases where enquiry, investigation or audit was pending against a declarant meant the amount of duty payable under any indirect tax enactment, which was quantified on or before 30.06.2019. The Bombay High Court found that there was a clear admission on the part of the petitioner and that the tax dues were quantified in terms of Section 121(r) of the Finance Act, 1994. It is also relevant to refer to the decision of the Bombay High Court in Thought Blurb v. Union of India Ors. [ 2020 (10) TMI 1135 - BOMBAY HIGH COURT] . In that case, the Bombay High Court had referred to the Circular dated 27.08.2019 and held that, in terms of the letters written by the petitioner / taxpayer, the tax dues were quantified before the relevant date. Reverting back to the facts of the present case, it is found that on the one hand there is a letter of respondent No.3 to the petitioner quantifying the service tax liability for the period 1st April, 2016 to 31st March, 2017 at Rs. 47,44,937.00 which quantification is before the cut off date of 30th June, 2019 and on the other hand for the second period i.e. from 1st April, 2017 to 30th June, 2017 there is a letter dated 18th June, 2019 of the petitioner addressed to respondent No. 3 admitting service tax liability for an amount of Rs. 10,74,011.00 which again is before the cut off date of 30th June, 2019. Thus, petitioner's tax dues were quantified on or before 30th June, 2019 - there are no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019. In the present case, the petitioner had filed a declaration on 24.12.2013 under the VCES declaring that a service tax of ₹36,47,132/- was due on account of service tax, education cess and higher education cess. The petitioner had also paid ₹18,50,000/- pursuant to the declaration made under the VCES - the benefit of the VCES was denied to the petitioner for the reason that it had failed to pay the balance amount within the stipulated period. Subsequently, on 10.12.2015, an Anti Evasion Branch of the Service Tax Department conducted a search on the premises of the petitioner. On the said date, the statement of Sh. Divya Dipti Chopra (one of the Director s of the petitioner company) was recorded. He has referred to the declaration made under the VCES and the disclosure that ₹36,47,132/- was due and payable. He had also disclosed the petitioner s total turnover and had acknowledged that service tax of approximately ₹30,00,000/- including interest would be payable up to November, 2015. It is relevant to note that the respondents had never disputed or doubted the statements submitted by the petitioner. On the contrary, it is apparent that the respondents had accepted the said statements. As noticed above, by the letter dated 03.06.2019, the petitioner was called upon to provide the calculation sheet of the interest liability and to deposit the same so that the investigation may be concluded. Respondent no. 1 had not questioned the calculation of the service tax. It is also material to note that the impugned notice also proceeds on the basis of the dues as quantified by the petitioner. The respondents have calculated the amount of tax payable on the basis of the balance sheets of the petitioner as ₹41,46,688/-, which is materially similar to the computation as furnished by the petitioner (with the difference of ₹11/- only) - it is clear that the tax dues had been quantified as required under Section 121(r) of the Finance Act (No. 2), 2019. The impugned order rejecting the petitioner s declaration on the ground that investigation has not been concluded and hence the demand has not been estimated or concluded on or before the stipulated date is unsustainable. The Scheme does not exclude taxpayers in respect of whom investigations have not been concluded; it expressly includes taxpayers in respect of whom investigation, enquiry or audit is pending - petition allowed. 2023 (5) TMI 811 Partial Reverse Charge Mechanism - Requirement to pay the balance 50% of service tax as recipient of service in terms of N/N. 30/2012 ST. dated 20/06/2012 - contract for construction of a multi-storied building for the bank purpose to Tripura Housing and Construction Board, Agartala (THCB) - HELD THAT:- As per section 68(1) the Service Tax liability dwells upon the person, providing the taxable service. However, in terms of Notification No. 30/ 12-ST, dated 30.6.12, this liability is divided equally between the service provider and the service recipient - each sharing 50% tax payable. The following facts distinctly emerge in the matter : 1. TSCBL awards contract for construction of a multi-storeyed building to THCB for a consideration of Rs.45600000. The service recipient is TSCBL from THCB. 2. THCB engages M/s Dipak Paul, for the construction of the said building for a consideration of Rs.4,0616850.00.- herein the service provider is M/s Dipak Paul, while the service recipient is THCB 3. M/s Dipak Paul upon completion of the building hands it over to THCB.- thus M/s Dipak Paul provider of works contract service to THCB. 4. TSCBL releases entire funds and takes over the possession of the building from THCB. Under the circumstances no liability by way of RCM is accruable upon TSCBL, the appellant with regard to the aforesaid services rendered by M/s Dipak Paul. M/s Dipak Paul has provided the services to THCB who as per law can avail credit of tax paid by M/s Dipak Paul, as input service credit-who and was required to discharge the service tax liability. No show cause notice therefore merits issuance to the appellant herein as they are not recipient of service directly from M/s Dipak Paul. As there exist, no relationship between TSCBL and M/s Dipak Paul as a service receiver and a service provider for the impugned works order. No liability accrues upon the noticee to pay Service Tax. Therefore the order of the Learned Commissioner (Appeals) cannot be sustained and is therefore set aside. The appeal filed by TSCBL is allowed. 2023 (5) TMI 810 Statutory requirement of making the pre-deposit not satisfied - duty of excise by virtue of section 83 of the Finance Act - HELD THAT:- The requirement of pre-deposit under section 35F of the Central Excise Act, as made applicable to service tax as they apply in relation to duty of excise by virtue of section 83 of the Finance Act, has not been complied with by the appellant. It would be seen from a bare perusal of section 35F of the Central Excise that after August 06, 2014 neither the Tribunal nor the Commissioner (Appeals) have the power to waive the requirement of pre-deposit, unlike the situation which existed prior to the amendment made in section 35F on August 06, 2014 when the Tribunal, if it was of the opinion that the deposit of duty and interest demanded or penalty levied would cause undue hardship, could dispense the said deposit on such conditions as it deemed fit to impose so as to safeguard the interest of the Revenue. The Supreme Court in NARAYAN CHANDRA GHOSH VERSUS UCO BANK [ 2011 (3) TMI 1478 - SUPREME COURT ], examined the provisions contained in section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 relating to pre deposit in order to avail the remedy of appeal. The provisions are similar to the provisions of section 129E of the Customs Act. The Supreme Court emphasised that when a Statute confers a right to appeal, conditions can be imposed for exercising of such a right and unless the condition precedent for filing appeal is fulfilled, the appeal cannot be entertained. The Supreme Court, therefore, held that deposit under the second proviso to section 18(1) of the Act, being a condition precedent for preferring an appeal, the Appellate Tribunal erred in law in entertaining the appeal. The Supreme Court also held that the Appellate Tribunal could not have granted waiver of pre-deposit beyond the provisions of the Act. It will also be appropriate to refer to a decision of the Delhi High Court in DISH TV INDIA LIMITED VERSUS UNION OF INDIA AND ORS. [ 2020 (8) TMI 183 - DELHI HIGH COURT ], wherein the requirement of pre-deposit under section 129E of the Customs Act, came up for consideration. The High Court held that when the Statute itself provided wavier of pre-deposit to the extent of 90% or 92.5% of the duty amount and made it mandatory to deposit 7.5% or 10% of duty amount, the Courts cannot waive this requirement of deposit. The Madhya Pradesh High Court in ANKIT MEHTA VERSUS COMMISSIONER, CGST INDORE [ 2019 (3) TMI 1342 - MADHYA PRADESH HIGH COURT ] also dismissed the Writ Petition that had been filed against the order of the Tribunal dismissing the appeal for the reason that the required pre-deposit was not made. The contention that was advanced before the Tribunal and before the Madhya Pradesh High Court was that the appellant was not in a position to make the pre-deposit due to financial constraints. After examining the provisions of section 129E of the Customs Act, the Madhya Pradesh High Court held that This Court after careful consideration of the aforesaid judgments is of the opinion that section 129E does not empower the Tribunal or the Commissioner (Appeals) to waive the pre-deposit or to reduce the pre-deposit , this Court is also not inclined, keeping in view the aforesaid statutory provisions of law to waive or reduce the pre-deposit and, therefore, no case for interference is made out in the matter. The appellant has not made the pre-deposit. In view of the aforesaid decisions of the Supreme Court, the Delhi High Court and the Madhya Pradesh High Court, it is not possible to permit the appellant to maintain the appeal without making the required pre-deposit. Appeal dismissed. 2023 (5) TMI 809 Valuation of service tax - Security Agency Service to Government and Public Sector Undertakings - non-inclusion of wages, EPF, ESI, Bonus, Gratuity, House Rent Allowance etc in the taxable value for the purpose of payment of service tax - HELD THAT:- The Appellant has provided Security Agency Service to Government and Public Sector Undertakings and paid Service Tax on the service charges collected by them from the customers. However, they have not included the wages, EPF, ESI, Bonus, Gratuity, House Rent Allowance etc. to arrive at the taxable value as they have considered these receipts as re-imbursible expenses which are not includible in the gross value for the purpose of payment of Service Tax. The Appellant has not disputed the liability of payment of service tax for the security agency service rendered by them to their customers. They were regularly filing Service Tax returns during the period April 2004 to March 2006 and intimating the gross value on which they have paid Service Tax. Thus, it is observed that the Appellant has not suppressed any information from the department and declared the taxable value in the ST-3 returns filed by them. Hence, it cannot be alleged that they have suppressed the information from the department with an intention to evade payment of service tax. From the impugned order, it is found that there is no evidence brought on record to substantiate the claim in the notice that the Appellant has suppressed the taxable value from the department. Appeal allowed. 2023 (5) TMI 808 Levy of service tax - Room Charge Retention on cancellation of accommodation by their customers during the years 2012-13 to 2015-16 - Revenue contended that the amount retained was not for provision of 'Short-term Accommodation Service', as no service whatsoever has been provided by the appellant to the customers for the income so earned - Declared Service as per clause (e) of Section 66E of the Finance Act, 1994 or not - HELD THAT:- The amounts retained by the appellant from the advances received for the provision of the taxable service on cancelation of the agreement to provide the service, are to be taxed under the same category of the taxable service which was agreed to be provided, the consideration for the same would be the amount retained and the service tax shall be payable on the value determined taking the said amount as the value of the service to be provided. The issue involved in the present case is no longer res-integra. The issue is squarely covered by the decision of this Delhi Bench in the case of M/S LEMON TREE HOTEL VERSUS COMMISSIONER, GOODS SERVICE TAX, CENTRAL EXCISE CUSTOM [ 2019 (7) TMI 767 - CESTAT NEW DELHI ] it was held that the retention amount (on cancellation made) by the appellant does not undergo a change after receipt and no service tax is attracted under the provisions of Section 66 E(e) of the Finance Act. CBIC has vide Circular No 178/10/2022-GST dated 3- 08.2022 clarified that amount forfeited in the case of non - refundable ticket for air travel or security deposit or earnest money forfeited in case of the customer failing to avail the travel, tour operator or hotel accommodation service or such other intended supplies should be assessed at the same rate as applicable to the service contract, say air transport or tour operator service, or other such services. Admittedly appellant has paid service tax on the room retention charges collected by them on cancellation of the booking by availing the exemption/ abatement as per notification No 26/2012-ST treating them as Short term accommodation services - there are no merits in the impugned order - appeal allowed. 2023 (5) TMI 807 Refund of service tax with interest - Commissioner (Appeals) while deciding the appeal held that the refund claim to the appellant is admissible for the period after 18.04.2006 and could be rejected for the period prior to that - applicability of N/N. 41/2007-ST dated 06.10.2007 as amended by N/N. 17/08-ST dated 01.04.2008 - HELD THAT:- Once the Commissioner (Appeals) holds that there was no liability to pay service tax prior to 18.04.2006, then the refund claim should have been decided as per the provisions of Section 11B of the Central Excise Act, 1944. Undisputedly as noted by both the authorities, refund claim has been filed as per Notification No. 41/2007-ST dated 06.10.2007 as amended by Notification 17/08-ST dated 01.04.2008 read with Section B of the Central Excise Act, 1944 as made applicable to service tax under Section 83 of the Finance Act, 1994. There being so, the finding recorded by the Commissioner (Appeals) in para 6.5 itself is contrary and needs to be set aside. If the tax has been paid under mistake of law, the same could have been claimed as refund by way of refund claim made under Section 11B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. Appeal allowed. 2023 (5) TMI 806 Disallowance of CENVAT Credit - activity of purchase and sale of units of Mutual Fund Schemes - trading (exempt) services or not - manufacturer of Cement and Clinker falling under chapters 25232930 and 25231000 respectively - Rule 6(3A) of the Rules, 2004 - HELD THAT:- Following are the ingredients of trading (as found from definition of trading): i. There should be two parties and a market to purchase and sell the good involved; ii. There should be transfer of right/title involved from the seller to the buyer, while selling the same; iii. There should be a fixed price known in advance while selling or buying the said good etc. On undertaking the test of the activities undertaken by the appellant, against the above criteria the activity of subscription and redemption of the units of the mutual fund is not an activity of sale and purchase of the securities. When the units of mutual fund are redeemed, the units cease to exist i.e., gets cancelled or relinquished, It does not get transferred to the third party. Thus investment activities undertaken by the appellants is totally different from 'trading in securities'. The issue has been considered by the tribunal in ACE CREATIVE LEARNING PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BENGALURU SOUTH GST COMMISSIONERATE [ 2021 (4) TMI 687 - CESTAT BANGALORE] where it was held that There is a restriction on the right to transfer unit and the appellant cannot transfer units to any other person. Further I find that the appellant cannot be termed as service provider because he only makes an investment in the mutual fund and earn profit from it which is shown in the Books of Accounts under the head other income . Hence the question of invoking Rule 6 does not arise, and I am of the view that Department has wrongly invoked the provisions of Rule 6(3) demanding the reversal of credit on the exempted services. Thus, the activity of redemption and subscription of mutual fund is akin to management of investments and not trading in services, it cannot be held as exempted service, for seeking the reversal as per provisions of Rule 6 of CENVAT Credit Rules, 2004. In the impugned order, reliance has been placed on the decision in the case of ROCA BATHROOM PRODUCTS PVT. LTD. VERSUS C.C.C., JAIPUR [ 2016 (12) TMI 223 - CESTAT NEW DELHI] . The said decision is distinguishable as it is in respect of the trading of goods and not in the case where the Education Guide itself clarifies that buying and selling of the unit of mutual funds is not service itself. There are no merits in the demand made by the impugned order. As the order fails on the merit of demand, the same will fail on the demand of interest and penalty imposed - appeal allowed. 2023 (5) TMI 805 CENVAT Credit - input services - Expenses related to ESOP - Club or Association - Tour Operator Rail Travel Agency - Outdoor catering - Rent-a-cab - Insurance - Health services - denial on account of nexus - levy of penalty - HELD THAT:- Undisputedly the credit in respect of rent-a-cab service has been taken by the appellant on the basis of the invoices which bear their name as recipient of the input services. There can be no denial of that fact. Accordingly for the period prior to 2011 the credit in respect of rent-a-cab service which has been used by the appellant for providing output service, cannot be denied. Accordingly this credit is held to be admissible. In respect of all other services, to a specific query placed by the Bench to the counsel, counsel was unable to produce any documents which show the appellant as recipient of the said services. In absence of any such document, the findings recorded in the impugned order cannot be departed with. Insurance services for which certain documents of ICICI Lombard Travel Insurance have been produced - HELD THAT:- There are no reference to the services being received by the appellant. Accordingly these documents also do not qualify as per the prescribed document for the purpose of availing the Cenvat credit. Hence denial of credit in respect of these documents cannot be faulted with as the appellant has availed this credit without production of the document as required. Levy of penalty - HELD THAT:- There are no merit in the submission of the appellant to the effect that penalty could not have been imposed on them - Penalty under Section 78 needs to be modified to the extent of admissible credit on rent-a-cab service. Appeal allowed in part. 2023 (5) TMI 804 Refund of service tax paid on the input services - time limitation - Not addressed to the registered premises - Invoice not in the name of the assesse - Ineligible input services - Reduction in proportionate refund - CA Certificate not produced - Not an export service - Relevant documents not produced - Mismatch of export proceeds - HELD THAT:- The learned Commissioner (Appeals) has upheld the findings of the original authority, holding that for a limited ground, the appeals were remanded by his predecessor vide order dated 30.12.2016. However, on examination of such order, it is found that the matter arising out of the adjudication order and as indicated in the appeals filed by the appellant were remanded in totality for a fresh finding in the remand proceedings. Thus, it cannot be said that the learned Commissioner (Appeals) has recorded specific finding vide order dated 30.12.2016 with regard to consideration of the limited issued as pointed out by the authorities below in this case. Since, in the remand proceedings, the original authority has not dealt with all the issues arising out of the subject refund applications, the matter should go back to the original authority for a fresh fact finding on all the issues involved in the appeal concerning grant of refund benefit to the appellants. In other words, the original authority should look into all the aspects dealt with by the learned Commissioner (Appeals) vide order dated 30.12.2016, while remanding the matter to him. Relevant date for filing of the refund application - date of payment of service tax on input services or not - HELD THAT:- The issue arising out of the present dispute is no more res integra in view of the decisions rendered by the Tribunal in the case of COMMISSIONER OF SERVICE TAX, MUMBAI-II VERSUS M/S SITEL INDIA LTD. [ 2016 (4) TMI 112 - CESTAT MUMBAI] and MERRILL TECHNOLOGY SERVICES INDIA PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX [ 2016 (6) TMI 473 - CESTAT CHENNAI] . The ratio laid down under the said decided cases is that the relevant date for filing of the refund application should be construed as the date of filing of the refund application at the end of the quarter for which such benefit is claimed. In the present case, since the appellant has filed the refund application within one year from the end of the relevant quarters, the stand taken by the department in rejecting the refund application on the ground of time barred is not sustainable and the appeals deserve to be allowed in favour of the appellants. Invoices were not addressed in the registered premises of the appellant - HELD THAT:- It is found that such findings are factually erroneous inasmuch as the disputed invoices submitted by the appellant demonstrates that the name of the appellants have been mentioned in those invoices. Even assuming that such allegation of department is correct, but the mandatory requirement of claim of refund benefit cannot be whittled down for the procedural lapses. In this context, Rule 9 ibid is aptly clear that if the other requirements provided under the statute are contained in the invoice, the benefit of refund should be allowed by the original authority. Therefore, rejection of the refund benefit on such ground, cannot also stand judicial scrutiny - ends of justice would be met, if the matter is remanded to the original authority for verification of the invoices for ascertaining whether, the name of the appellants is appearing in all the disputed invoices and thereafter to consider the grant of refund in their favour. Denial of the refund benefit on the ground of ineligible input services and absence of nexus - HELD THAT:- Both the authorities below have not dealt with the issue of denial of Cenvat Credit in terms of Rule 14 of the Cenvat Credit Rules read with Section 73 of the finance Act, 1994. Since, availment of credit at the material time was not disputed by the department, claiming of refund of the accumulated Cenvat Credit on account of exportation of service at a later stage cannot be denied by the department. It is not the case of the department that the appellants had not complied with the requirements of Rule 5 ibid read with the notification issued thereunder for claiming the benefit of refund. Thus, rejection of refund benefit on the ground of non-establishment of nexus between the output service and the input services cannot be sustained. Other issues should be remanded to the original authority for proper verification of the documentary evidences for ascertaining the fact regarding eligibility of the refund benefit to the appellants - In respect of the remand matters, the original authority should adjudicate the matter afresh and should follow the principles of natural justice in granting reasonable opportunity of personal hearing to the appellants. Appeal disposed off. Central Excise 2023 (5) TMI 803 Quantum of duty payable by the respondents - manufacturing and clearing of gutkha under the brand name India Gold - retrospective effect of amended Rule 17(2) of PMPMR-2008 - failure to consider the actual intent of the legislation as mentioned in Rule 17(2) of PMPMR-2008 - HELD THAT:- It is material to note that the premises of respondent no. 1 was searched on 04.08.2008. As on the date of the said search, Rule 17 as set out above was applicable. Respondent no. 1 is not registered with the Excise Department and there is no dispute that the Adjudicating Authority has determined the duty payable in terms of Rule 17(2) of the PMPM Rules as in force on the date of the search. It is material to note that Rule 1(2) of the Second Amendment Rules expressly provides that they shall come into force on 20.10.2008 . Thus, the contention that Rule 17(2) as amended by Second Amendment Rules would also apply to searches conducted prior to 20.10.2008 militate against the express language of Rule 1(2) of the Second Amendment Rules. Further, the contention that the language of Rule 17(2) as amended by the Second Amendment Rules, makes it explicit that it would apply from 01.07.2008, is unpersuasive. A plain reading of Rule 17(2) as amended by the Second Amendment Rules indicates that it provides for the manner of computing the duty payable in respect of goods manufactured or cleared from the unit, which is not registered with the concerned Central Excise office - Undisputedly, the duty is liable to be computed on the presumption that the machines found at such premises are in operation since 01.07.2008. The duty is required to be calculated by applying the appropriate rate of duty, as specified in the Notification No. 42/2008 C.E. dated 01.07.2008, to the number of packing machines operating in the factory during that month. In the present case, it cannot be accepted that it is implicit in the provisions of the amended Rule 17(2), that it applies retrospectively for purposes for determination of duty in respect of searches conducted prior to 20.10.2008. Undisputedly, for searches conducted after the Second Amendment Rules came into force, the duty would be determined by assuming unless established to the contrary that the machines found were operative from 01.07.2008 and by applying the computational provisions of Rule 7 of the PMPM Rules. There are no ground to interfere with the impugned order. The questions projected by the Revenue are answered against the Revenue - appeal dismissed. 2023 (5) TMI 802 Job-work - duty liability of job-worker or supplier? - raw material supplier undertakes the responsibility of paying duty as per provisions of Notification No. Notification No. 83/94-CE, 84/94-CE or 214/86-CE - entitlement to the exemption from payment of excise duty - Wrong availment of benefit of SSI exemption Notification No. 08/2003-CE dated 01.03.2003. and Notification No. 83/94-CE, 84/94- CE or 214/86-CE - non-payment of duty on goods manufactured by the respondents as job worker - extended period of limitation - penalty - HELD THAT:- Note (6) of the SECTION V of CHAPTER 25 of Central Excise Tariff Act,1985, in relation to products of headings 2515 and 2516, specifies that the process of cutting or sawing or sizing or any other process, for converting of stone blocks into slabs or tiles, shall amount to manufacture . It is noted that the process undertaken by the respondent on job work i.e. sawing of marble blocks into marble slabs amounts to manufacture and that a new article having a distinctive character or use has emerged from the said process. The marble slabs manufactured by the respondent falling under chapter heading 2515 are new article having a distinctive character or use and marketable, therefore eligible to levy of excise duty. A Manufacturer is the one who actually undertakes the manufacturing activity. A customer does not become manufacturer by merely supplying raw materials or getting goods manufactured according to his drawing or specification. Once the goods have been manufactured, duty liability arises and fastened on the manufacturer of the said goods as Central Excise duty is on manufacture . From the facts on record, it is found that the respondent assessees have done the job work of sawing the green marble blocks and cleared the same as such (without finishing, polishing etc.) to the principal manufacturers. It is the principal manufacturers who also have established units for processing of marble who have done the further process of finishing, polishing etc. and thereafter cleared the goods from their premises - though the respondent assessees is liable to pay excise duty on the job work goods, it is found that such duty have been wrongly calculated both with respect to the quantum of clearance and also the calculation of duty, as have been rightly observed by learned Commissioner (Appeals). Such observations have not been disputed by revenue. In the case of KARTAR ROLLING MILLS VERSUS COMMISSIONER OF C. EX., NEW DELHI [ 2006 (3) TMI 63 - SUPREME COURT] the Supreme Court has held that unless there is an undertaking by the principal manufacturer that they would discharge the duty liability, the job worker is liable to discharge duty on the clearances from the premises of job worker. The Tribunal in the case of ETERNIT EVEREST LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BHOPAL [ 2010 (1) TMI 601 - CESTAT, NEW DELHI] has been held that duty has to be demanded from job worker, and not from principal manufacturer, when transaction between the two are on principal to principal basis. It is noted that in the present case, the transaction between job worker and principal manufacturer are on principal to principal basis. It is not in doubt that the marble slabs/tiles were manufactured by the job worker and the duty liability as per excise laws is only on the manufacturer. The duty liability can be shifted to the supplier of raw materials or semi-finished goods only if the supplier gives an undertaking in terms of the notification - it is noted that the learned counsel s argument that this is a procedural lapse. It is opined that this is a substantial condition which cannot be taken as a procedural condition, as it shifts the duty liability from the job worker to the supplier of raw materials or semi-finished goods. Until and unless this condition of giving undertaking is fulfilled, the duty cannot be fastened on the supplier of raw materials or semi-finished goods, as they were not the manufacturers of marble slabs/tiles. It is noted there are several case laws that have held that the condition of the exemption notification has to be construed strictly and if any condition is not fulfilled the same cannot be applied to a situation. Appeals of revenue allowed by way of remand to the original Adjudicating Authority with the following directions: i) To calculate the quantum of marble slabs cleared on job work basis as per the formula prescribed in the tariff. ii) To calculate the duty on the job work by taking value of job work goods (including cost of marble blocks) iii) To recalculate the SSI exemption from the turnover after taking into account the exempt and export turnover. iv) The penalty amount under Section 11AC shall also be modified accordingly. v) The respondent assessees shall be entitled to pay the reduced amount of penalty, upon such redetermination, in accordance with law. vi) We also direct the respondent assessees to appear before the Adjudicating Authority with a copy of this order and seek opportunity of hearing within a period of 45 days from the date of receipt of this order. CST, VAT & Sales Tax 2023 (5) TMI 801 Seeking condonation of delay in filing revision - whether any plausible reason has been indicated by the revisionist in filing the instant revisions? - HELD THAT:- The delay in filing revision has been considered by this Court in Sales/Trade Tax Revision Defective No.6 of 2020 Commissioner Commercial Tax U.P. Lko. Vs. M/s. R.C. Sons., Rakabganj, Lucknow [ 2022 (9) TMI 533 - ALLAHABAD HIGH COURT ], with other connected defective revisions, decided on 7.9.2022, where the delay of 163 days was sought to be explained on the basis of the casual and lethargic attitude of the officials which prevails in the Department, on the part of the Officers concerned. The time limitation for filing of Revision against order impugned is 90 days from the date of communication of the order. Despite receiving impugned judgment and order on 25.07.2011, there is no explanation as to why the revision itself, was preferred even two years four months thereafter in December, 2013. All these facts indicate the casual and cavalier attitude on the part of the department in filing of the revision belatedly, rather, as observed by the Apex Court in the case of Central Tibetan Schools [ 2021 (2) TMI 1214 - SUPREME COURT ] other than the lethargy and incompetence of the revisionist, there is nothing which has been brought on record to explain the delay. Keeping in view the aforesaid discussion including the judgments of the Apex Court in the cases of Living Media India Ltd [ 2012 (4) TMI 341 - SUPREME COURT] , Central Tibetan Schools [ 2021 (2) TMI 1214 - SUPREME COURT ] Volex Interconnect [ 2021 (10) TMI 897 - SUPREME COURT] , all judgments being of a latter date to the judgments cited by learned counsel for the revisionist including the judgment of Central Tibetan Schools being a three judges judgment, the Court does not find any plausible or cogent reason for condoning the delay. The application for condonation of delay and consequently the revision itself is dismissed. Indian Laws 2023 (5) TMI 800 Dishonour of Cheque - complainant has admitted that he had signed the cheques but fraud was committed in filling up those cheques and presenting the same before the Bank - HELD THAT:- It is admission of respondent No. 2 that he had issued the signed cheque which is subject mater of the complaint case filed by the petitioner. The cheques were for refund of loan. Evidently, the petitioner cannot be allowed to be prosecuted for bald allegations, burden to prove whereof is on respondent No. 2 in view of admission of respondent No. 2 that he had signed the cheque which got dishonoured - Likewise, respondent No. 2 has admittedly acted in violation of mandate of The Income Tax Act (as contained in Section 269 ST of The Income Tax Act and Section 269SS of the said Act), therefore, respondent No. 2 cannot be allowed to get protection of his unlawful act of dealing with cash above the ceiling amount prescribed under the law. If the impugned FIR and proceedings arising out of the same is allowed to be sustained, it would amount in protecting and recognizing illegal acts of respondent No. 2. The impugned FIR and subsequent proceedings stands hereby quashed to prevent miscarriage of justice and this petition is allowed. 2023 (5) TMI 799 Dishonour of Cheque - legally enforceable debt or not - territorial jurisdiction of the Magistrate - case already filed before same Trial Court regarding the same transaction - offence under section 138 read with section 141 of the Negotiable Instruments Act, 1881 - HELD THAT:- No provision of law or any precedent is pointed out in support of his submission that filing of complaint based on one agreement and one transaction, independent dishonour of cheque is not maintainable. Considering scheme of section 138 of the Negotiable Instruments Act, 1881, independent cause of action gives rise to filing of independent complaint. If the court is satisfied that the ingredients of section 138 are fulfilled, the learned Magistrate is entitled to issue process. Legally recoverable liability or not - submission is that initial loan was Rs. 1,50,00,000/- and the cheques issued which are subject matter of two complaints are of Rs. 1,61,48,178/- and Rs. 1,56,07,312/-, demonstrate that there is no legally recoverable liability - HELD THAT:- The said submission is in ignorance of paragraph 7 of the complaint which states that in addition to Rs. 1,50,00,000/-, amount of Rs. 50,00,000/- was sanctioned to the complainant. The factum as to whether the total amount of cheque is legally recoverable or not is purely question of facts. At the stage of issuance of process, unless there is unimpeachable document on record which shows that the amount sought to be enforced on the face of it is not legally Petitioners are residing outside territorial jurisdiction of the Magistrate or not - inquiry under section 202 is mandatory or not - HELD THAT:- Such inquiry is not held and, therefore, order of issuance process is barred. The Apex Court in Sunil Todi and Others vs. State of Gujrat and Another [ 2021 (12) TMI 175 - SUPREME COURT ] has held that in every case under section 138 of the Negotiable Instruments Act, 1881, it is not necessary that the witnesses should be examined. If the material on record is sufficient to make out prima facie case, inquiry under section 202 can be held in absence of witnesses if complainant has given affidavit of complaint. The impugned order indicates that such order has been passed by the Court based on complaint along with affidavit of verification. The alleged defect of inquiry under section 202 can be cured during affidavit of evidence. The territorial jurisdiction of the learned Magistrate is decided as per section 142A of the Negotiable Instruments Act, 1881. It is the branch of payee bank which confers jurisdiction on the Court. Therefore, merely because two complaints are filed at two different places by itself does not raise ground for challenging order of issuance of process on the ground of lack of territorial jurisdiction. Complainant has already filed one case before same Trial Court regarding the same transaction or not - HELD THAT:- The statement made in paragraph 14 is inconsequential and has no relevance on merits of the matter and, therefore, even if such statement is incorrect, it will be of no consequence and does not affect the validity of order of issuance of process. Petition dismissed. 2023 (5) TMI 798 Seeking enforcement of a unilateral offer concerning private financial transactions - recovery of dues on the failure to comply with the one-time settlements, extraordinary jurisdiction of the High Court - HELD THAT:- A writ of certiorari is to be issued over a decision when the Court finds that the process does not conform to the law or statute. In other words, courts are not expected to substitute themselves with the decision-making authority while finding fault with the process along with the reasons assigned. Such a writ is not expected to be issued to remedy all violations. When a Tribunal is constituted, it is expected to go into the issues of fact and law, including a statutory violation. A question as to whether such a violation would be over a mandatory prescription as against a discretionary one is primarily within the domain of the Tribunal. The object and reasons behind the Act 54 of 2002 are very clear as observed by this Court in MARDIA CHEMICALS LTD. VERSUS UNION OF INDIA [ 2004 (4) TMI 294 - SUPREME COURT] . While it facilitates a faster and smoother mode of recovery sans any interference from the Court, it does provide a fair mechanism in the form of the Tribunal being manned by a legally trained mind. The Tribunal is clothed with a wide range of powers to set aside an illegal order, and thereafter, grant consequential reliefs, including re-possession and payment of compensation and costs. Section 17(1) of the SARFAESI Act gives an expansive meaning to the expression any person , who could approach the Tribunal. Approaching the High Court for the consideration of an offer by the borrower is also frowned upon by this Court. A writ of mandamus is a prerogative writ. In the absence of any legal right, the Court cannot exercise the said power. More circumspection is required in a financial transaction, particularly when one of the parties would not come within the purview of Article 12 of the Constitution of India. When a statute prescribes a particular mode, an attempt to circumvent shall not be encouraged by a writ court. A litigant cannot avoid the noncompliance of approaching the Tribunal which requires the prescription of fees and use the constitutional remedy as an alternative - the powers conferred under Article 226 of the Constitution of India are rather wide but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal. The present appeals are disposed of.
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