TMI Tax Updates - e-Newsletter
June 1, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Attachment of Bank Accounts of petitioner for recovery of GST of third party - the bank accounts of ZIPL cannot be attached for securing the revenue of another taxable person. It is implicit that the bank accounts and assets of only those taxable person or persons specified in Section 122(1A) of the CGST Act can be attached who may be liable for payment of any government revenue and the Commissioner is of the opinion that it is necessary to attach their assets in the interest of government revenue. - HC
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Income Tax:
Reopening of assessment u/s 147 - doctrine of res judicata - principal of consistency - Consistency does not mean putting iron fetters on the subsequent decision making; it only means expecting that a deviation from the previous decision in similar set of circumstances is explained by way of cogent and rational reasons. In the present case, the decision taken first in point of time (order dated 28.07.2022) was a reasoned decision, based on the analysis of material on record, but the decision taken subsequently (order dated 31.07.2022) not just took a view completely inconsistent with the previous view but even without an iota of reason. - notice cannot sustain and set aside - HC
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Income Tax:
Review petition - Reopening of assessment u/s 147 - petitioner/assessee was a “non-filer” - cash deposit - It cannot be said that the notice under Section 148 of the Act was invalid. This is evident upon a bare perusal of the reasons given by the AO for reopening the assessment. Thus, in our opinion, it cannot be said that the impugned notices had no basis for triggering an enquiry, and therefore, were invalid. - HC
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Income Tax:
Reopening of assessment - legality and validity of notice u/s 148 and order u/s 148A(d) - unexplained loan transaction - considering the nature of huge financial scam, is not inclined to entertain this writ petition by exercising its constitutional writ jurisdiction under Article 226 of the Constitution of India. - PCIT - is directed to refer this case along with all other cases involving Anil Kasera where similar modus operandi has been adopted relating to unaccounted cash loan, to the Enforcement Directorate (ED) and file compliance report before this Court on 13th June, 2023. - HC
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Income Tax:
Addition on account of services rendered by the assessee to its AE in India - whether FTS under the provisions of Article 13(4)(c) of the India-UK DTAA? - the assistance, support or advice provided by the assessee to BTPL shall not per se be considered to make technology available since the assessee did not make available any technical knowledge, experience or skill to BTPL by way of rendering the above support services to BTPL. Article 13(4) of the India–UK DTAA does not apply to the assessee’s case and hence the consideration could not be included in FTS. - AT
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Income Tax:
Penalty u/s 271(1)(c) - debatable issue arises - partial income not offered to tax - revenue from web hosting services - income in the nature of royalty or not - since the matter is debatable and still to attain the finality, levy of penalty is not sustainable - AT
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Income Tax:
TDS liability on year end provisions of expenses - Assessee in default u/s 201(1) - non-deduction of TDS on provision for expenses made at the end of the year u/s 194C, 194I and 194J - in the absence of an ascertainable amount and identifiable payee, the machinery provisions of recovering tax deducted at source falls flat because in either way, it does not aid the charge of tax u/s 4 of the Act, but, takes a form of separate levy independent of other provisions of the Act. - AT
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Income Tax:
Depreciation on goodwill - goodwill as acquired during business acquisition - We find merit in the argument of assessee that the net balance of purchase consideration paid, and the value of net assets acquired is Goodwill and the transfer of IP to BluJay UK cannot affect the value of goodwill as the Goodwill is rightly attributed to all the assets acquired from Four Soft and benefits accrued to BluJay India. Once the existence of Goodwill is established, Depreciation on such goodwill cannot be questioned further. - AT
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Income Tax:
Rectification u/s 154 - No doubt that the income tax authority can rectify any apparent mistake in its order however, when the order of the AO, has been upheld by the ld.CIT(A) and thereafter by the Tribunal, in that eventuality, AO is denuded from rectifying any such mistake, as it would lead to giving unbridled power to AO/ ld.CIT(A) to unsettled the settled position of fact and law and will lead to chaos and anarchy. - There cannot be two contradictory orders of the Tribunal one by upholding the assessment and other quashing the assessment based on the jurisdictional error. - orders of CIT appeals - reversed decided in favour of revenue - AT
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Income Tax:
Taxability of shipping income - Shipping income as dealt by Article-8 states that profits derived by an enterprise of a contracting state by operation of ships in international traffic shall be taxable only in the State of residence. The word 'only' debars the other contracting state to tax the shipping income so earned by the assessee even if it is sourced from India. When India does not have any taxation right on a shipping income of non-resident entity, exemption or reduced rate of taxation in the source state is of no relevance because once the taxing right has been given-off, the other conditions like exemption or reduced rate of tax has no bearing on the taxability of particular income in other contracting state. - AT
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Income Tax:
Unexplained deposits in cash in bank - assessee's father was the owner of agriculture land and the said cash was deposited partly out proceeds from sale of agriculture land belonging to father - AO had only considered the cash deposit. Deposit of cash was duly explained during the remand before the ld. AO - Addition deleted - AT
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Income Tax:
TDS u/s 194C or 192 - existence of employer and employee relationship between the doctors and hospital - fact remains that as per details filed by the assessee, consultant doctors are not governed by said rules and are independent. AO is completely erred in coming to the conclusion that there is an employer and employee relationship between consultant doctors and appellant company and remuneration paid to said doctors is salary which attracts provisions of section 192. - AT
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Income Tax:
Unexplained cash deposits during demonetization period - Assessee could not also explain how the amount withdrawn in the year 2013 was made available for depositing in the year 2016, that too during demonetization period. The arguments of the assessee that money was kept for the purpose of treatment of his brother was also unproved, because no evidence has been filed to justify his arguments and further, there was no proof as to how much was spent for treatment and how much balance was available with the assessee. - AT
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Customs:
Violation of import conditions - goods (Raw Petroleum Coke) imported by the respondent admittedly having sulphur content in excess of 7% conform to Indian Standard 17049 or not - prohibited/restricted goods - this question, which is a mixed question of fact and law is required to be decided by the Tribunal before approving the order passed by the Commissioner of Customs (Appeals) granting provisional release. - HC
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Customs:
Classification of export goods - Ilmenite upgraded (processed) - it is difficult to agree with the view of the Department that to obtain beneficiated Ilmenite processes like roasting and chemical treatment is mandatory. - From the flow chart which has been noticed above it can be seen that the various processes undertaken on the raw sand by the appellants achieves the purpose of regulating the size, removing unwanted impurities and also improving quality or SI grade of Ilmenite - is concluded that such processes result in beneficiated Ilmenite - AT
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IBC:
Continuation of CIRP proceedings when the operational debts have been paid by the corporate debtors - Appellant cannot get away from liability of interest by saying that it has requested the Operational Creditor to challenge the levy of interest since if the liability of the interest is of the Appellant as per the Supply Agreement - Section 9 application which was filed by the Operational Creditor, the entire Operational Debt having been paid by the Corporate Debtor, there is no useful purpose in continuing the Section 9 proceeding any further. - CIRP process things closed - AT
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Service Tax:
Short payment of service tax - subsequent adjustment with excess tax paid - The appellant can adjust the service tax excess paid against his service tax liability for the succeeding month or quarter; sub-Rule 4A of Rule 6 of STR starts with a non-obstante clause and, therefore, the procedure prescribed for the earlier rules, if any, are not applicable in the instant case; the appellant is eligible to avail the provisions of Rule 6 (4A) of STR, 1994. - AT
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Service Tax:
Levy of Service Tax - business auxiliary service - Tea, an agricultural produce or not - the said Notification does not distinguish between Tea or Green Tea or Black Tea, and it is also well understood that there is no alteration to the essential characteristic other than, perhaps, making it marketable as either Green Tea or Black Tea. - Even the processes involved in converting Green Tea into Black Tea does not alter the basic characteristic of the Tea as such and the same could not be considered as a non-agricultural product under any stretch of imagination. - AT
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Central Excise:
Rejection of petitioner’s claim for benefit of budgetary support - If the provisions of the Scheme Notification are given the meaning as sought to be done by the petitioner, every unit which was eligible to avail exemption under any specified notification and started manufacturing new items after 01.07.2017 would claim to be eligible for budgetary support under the new Scheme, which would result in the creation of uneven playing field in respect of new units which start production/clearance of similar products but would not be entitled for the benefit of budgetary support - HC
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Central Excise:
Whether the exemption notification is absolute or the exemption notification is conditional - the reading of the exemption notification stipulates that it is subject to fulfillment of two conditions and therefore the payment of duty and availing Cenvat credit cannot be held as violation of provisions of section 5A of the central excise act - AT
Articles
Notifications
News
Case Laws:
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GST
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2023 (5) TMI 1232
Refund of Input Tax Credit (ITC) - goods supplied to SEZ Units (zero-rated supply) effected during the period of August 2017 to March 2018 - rejection on the ground that it was time-barred - HELD THAT:- It is stated that in the present case, the zero-rated supplies are stated to have been made between August 2017 to March 2018. According to the petitioner, the refund in respect of the supplies made during the period of February 2018 to March 2018, is within the period of limitation; if the period after 01.03.2020 to 28.02.2022, is excluded - It is apparent that neither the Adjudicating Authority nor the Appellate Authority has considered the petitioner s claim that the delay is required to be condoned. It is considered apposite to set aside the orders dated 26.05.2021 and 25.02.2022 impugned in this petition, and remand the matter to the Adjudicating Authority for considering afresh - petition allowed by way of remand.
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2023 (5) TMI 1231
Maintainability of petition - availability of alternative remedy of appeal - Cancellation of GST registration of petitioner - HELD THAT:- The 2nd respondent had specifically directed the petitioner to show cause as to why the GST registration of the petitioner shall not be cancelled because the petitioner does not have a building number in the registered place of the business and a valid lease agreement. In response to Ext.P13 notice, the petitioner submitted Ext.P14 reply - On going through Ext.P14 reply, the petitioner had only submitted the building tax receipt as evidenced by reference No.4 in Ext.P14. But, the petitioner did not produce the valid lease agreement. Consequently, the 2nd respondent has passed Ext.P15 order, cancelling the registration of the petitioner. The learned Government Pleader submitted that if the petitioner is aggrieved by Ext.P15, he has a remedy under Section 13 of the GST Act, to seek for rectification of Ext.P15 order or file an appeal under Section 107 of the GST Act - In the light of the alternative statutory remedy available to the petitioner, the writ petition not entertained - petition dismissed.
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2023 (5) TMI 1230
Attachment of Bank Accounts of petitioner - evasion of GST while providing an online payment gateway (Aggregator Services) under the trade name Onion-Pay - respondents allege that that ZIPL was supporting illegal gambling products such as Teen Patti , Roulette , Ludo , Matrix 5 and all merchants associated with the payment gateway were suspected to be fake and shell companies - creation of web of fake gaming merchant entities, which were operated and managed by ZIPL. Whether the impugned orders are in accordance with Section 83 of the CGST Act? HELD THAT:- There is no issue regarding the CGST liability of ZIPL, it is apparent that ZIPL s bank accounts could not be attached for any amount due and payable to the merchants using the ZIPL s platform. The provisions of Section 83 of the CGST Act can be invoked for attaching the assets and bank accounts of a taxable person or a person specified under Section 122(1A) of the CGST Act, if in the opinion of the Commissioner it is necessary to do so for the purpose of protecting the interest of government revenue. Thus, the bank accounts of ZIPL cannot be attached for securing the revenue of another taxable person. It is implicit that the bank accounts and assets of only those taxable person or persons specified in Section 122(1A) of the CGST Act can be attached who may be liable for payment of any government revenue and the Commissioner is of the opinion that it is necessary to attach their assets in the interest of government revenue. A debt owed by any person to the taxable person, whose assets or bank accounts are liable to be attached under Section 83 of the CGST Act, can be attached being an asset of such a person. But the bank account of the person owing such debt cannot be subject to a provisional attachment order under Section 83 of the CGST Act. This Court considers it apposite to dispose of the present petition by setting aside the impugned orders attaching ZIPL s bank accounts albeit with the further direction that ZIPL shall make payments due to various merchants directly in their respective bank accounts as disclosed by ZIPL to the respondents and as recorded in the impugned order dated 01.02.2023. Insofar as the remaining amount of ₹69.92 crores is concerned, ZIPL shall transfer the same to its current account. Petition disposed off.
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2023 (5) TMI 1229
Refund claim - delayed application of refund - Department does not dispute the applicability of circular dated 5th July, 2022 as well as the adjudication made by this Court in [ 2022 (3) TMI 578 - ALLAHABAD HIGH COUR ] in the facts of the present case. HELD THAT:- In that view of the matter and for the reasons recorded by this Court in Writ Tax No. 173 of 2022, this writ petition also succeeds and is disposed of on same terms. The order impugned dated 27.10.2021 stands quashed. Respondent no. 4 is directed to revisit the issue in light of the above observations, by passing a fresh order, within a period of six weeks from the date of presentation of a certified copy of this order.
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Income Tax
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2023 (5) TMI 1228
Reopening of assessment u/s 147 - validity of order u/s 148A(d) - concerned ACIT dropped the proceedings, while pertaining to the assessment year 2015-16 opted to proceed further under Section 148A - consistency (or lack thereof) in the decision making - bogus sale entries - as argued two contradictory final outcomes pertaining to assessment years 2015-16 and 2016-17 clearly show not just non-application of mind but even extreme arbitrariness, more so, because the officer serving as the decision making authority of ACIT is the same officer - HELD THAT:- As significant to note that in order dated 28.07.2022, while dropping the proceedings, the ACIT concerned recorded his analysis of the documentary material; but in the subsequent order dated 31.07.2022, while deciding to proceed further u/s 148A the same ACIT recorded not even a whiff of analysis, if any, carried out by him of the documentary record and simply reiterated the allegations borne out of the alleged admission of Shri Rajeev Khushwaha. There is no dispute to the legal proposition as submitted by counsel for respondents revenue that the doctrine of res judicata does not apply to income tax proceedings pertaining to different assessment years since each assessment year is a separate assessment unit in itself if rests in separate factual scenario. In the case of J.K. Charitable Trust, Kamal Tower, Kanpur [ 2008 (11) TMI 8 - SUPREME COURT] the basic question framed by the Hon ble Supreme Court was as to whether the revenue could be precluded from filing an appeal even though in respect of some other years, involving identical disputes, no appeal was filed. The Hon ble Supreme Court after elaborate discussion through multiple judicial precedents arrived at a conclusion that fact situation in all the assessment years was same and dismissed the appeal. The issue before us is the consistency (or lack thereof) in the decision making. There was nothing wrong if in the impugned order dated 31.07.2022 the ACIT concerned had taken a view different from the view taken in order dated 28.07.2022, provided the diversion was supported by way of cogent reasoning. Consistency does not mean putting iron fetters on the subsequent decision making; it only means expecting that a deviation from the previous decision in similar set of circumstances is explained by way of cogent and rational reasons. In the present case, the decision taken first in point of time (order dated 28.07.2022) was a reasoned decision, based on the analysis of material on record, but the decision taken subsequently (order dated 31.07.2022) not just took a view completely inconsistent with the previous view but even without an iota of reason. Respondent s argument of two different sanctioning authorities is concerned, no doubt order dated 28.07.2022 was issued with the approval of Principal Commissioner Income Tax-10 and order dated 31.07.2022 was issued with the approval of Principal Chief Commissioner of Income Tax, but the satisfaction recorded in both orders was of same Assistant Commissioner of Income Tax. There is nothing on record to suggest even feebly that the latter sanctioning authority was apprised of the earlier view taken in order dated 28.07.2022. An assessee, deals with the income tax department as a whole, like a body and not its individual organs, especially where left hand does not know what right had sanctioned. The impugned notice and order suffer two infirmities, namely the same proceed on a view inconsistent with the earlier order despite the facts and circumstances being similar and the ACIT concerned did not support the said subsequent divergent view with reasoning - unable to uphold the impugned notice and order u/s 148 so the same are set aside - Decided in favour of assessee.
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2023 (5) TMI 1227
Review petition - Reopening of assessment u/s 147 - petitioner/assessee was a non-filer - reasons to believe that the cash deposit had been made by the petitioner/assessee from undisclosed sources, which had escaped assessment - HELD THAT:- AO, it appears, received two pieces of information - First, that the said amount had been deposited in the aforementioned bank account, and second, that the petitioner/assessee had not filed a return. The second piece of information was not accurate - once the petitioner/assessee informed the AO that a return had been filed, it came to light that no scrutiny-assessment has taken place. The return, concededly, had been processed u/s 143(1) - AO, thus, was of the view that the matter required further enquiry and investigation, and therefore, proceeded further after disposing of the objections raised by the petitioner/assessee. The objections were disposed of by the AO on 27.11.2019. It was only thereafter that a notice u/s 142(1) was issued on 27.11.2019. Therefore, the AO having examined the matter holistically, concluded that the return filed by the petitioner could be accepted. We find Petitioners argument that reassessment proceedings were commenced because the AO was under the impression that the return had not been filed does not give a complete picture of the background facts. The other facet which triggered enquiry u/s 148 was the deposit of cash by the petitioner/assessee in the aforementioned bank accounts. It cannot be said that the notice under Section 148 of the Act was invalid. This is evident upon a bare perusal of the reasons given by the AO for reopening the assessment. Thus, in our opinion, it cannot be said that the impugned notices had no basis for triggering an enquiry, and therefore, were invalid. Although we had closed the writ petition, we granted the petitioner/assessee leeway to take recourse to a statutory remedy as per law, in case he was still aggrieved by the assessment order passed in his case. There is, to our minds, no error apparent on the face of the record. We find no merit in the review petition
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2023 (5) TMI 1226
Reopening of assessment - legality and validity of notice u/s 148 and order u/s 148A(d) - unexplained loan transaction - HELD THAT:- It appears from record which AO has annexed to the notice u/s 148A(b) and order u/s 148A(d) that some of the documents which established the involvement of the petitioner in such type of transactions with the said Anil Kasera and there are names of many other persons who are involved in this type of transactions adopting same modus operandi. There is also finding of the assessing officer in the impugned order u/s 148A(d) that a sum representing in the form of entry or entries in the books of account (loan transaction) has escaped income in this case. All the aforesaid findings in the impugned order are based on material evidence which cannot be scrutinised by a writ court in exercise of its constitutional writ jurisdiction under Article 226 of the Constitution of India and be substituted with its own findings. Recently this Court has noticed that several writ petitions have been filed involving similar nature of huge unaccounted cash transactions where modus operandi is the same and involving the same broker Anil Kasera. This court, considering the nature of huge financial scam, is not inclined to entertain this writ petition by exercising its constitutional writ jurisdiction under Article 226 of the Constitution of India. Principal Chief Commissioner of Income Tax, West Bengal Sikkim is directed to refer this case along with all other cases involving Anil Kasera where similar modus operandi has been adopted relating to unaccounted cash loan, to the Enforcement Directorate (ED) and file compliance report before this Court on 13th June, 2023.
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2023 (5) TMI 1225
Reopening of assessment - validity of order passed u/s 148A(d) - reopening on new set of facts - giving less than three days time to the assessee to respond - typographical errors in the order dated 4th May, 2023 [ 2023 (5) TMI 1115 - CALCUTTA HIGH COURT] HELD THAT:- In paragraph 7 of the said order, the date shall be mentioned 21.03.2022 instead of 27.03.2022 . In paragraph 8 of the said order, the date shall be mentioned 20.03.2023 instead of 23.02.2023 . In paragraph 14 at page 5 of the said order, the words fifteen days shall be mentioned instead of the words ten days . Let the said corrections be carried out and this order shall form part of the order dated 4th May, 2023. Urgent photostat certified copy of this order, if applied for, be furnished to the parties expeditiously upon compliance of all legal formalities.
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2023 (5) TMI 1224
Exemption u/s 11 - registration u/s 12AA was refused by holding that the assessee institution did not satisfy the registering authority with the genuineness of its activities and it was held that the assessee Trust had generated surplus (profit) out of their total receipts - ITAT grant registration to the assessee as applied by the assessee - HELD THAT:- As decided in M/s Queen s Educational Society [ 2015 (3) TMI 619 - SUPREME COURT ] as per 13th proviso to Section 10(23C) is of great importance in that assessing authorities must continuously monitor from assessment year to assessment year whether such institutions continue to apply their income and invest or deposit their funds in accordance with the law laid down. Further, it is of great importance that the activities of such institutions be looked at carefully. If they are not genuine, or are not being carried out in accordance with all or any of the conditions subject to which approval has been given, such approval and exemption must forthwith be withdrawn. All these cases are disposed of making it clear that revenue is at liberty to pass fresh orders if such necessity is felt after taking into consideration the various provisions of law contained in Section 10(23C) read with section 11 of the Income Tax Act. In view of the judgment passed by the Supreme Court referred hereinabove, the issue in hand is squarely covered. No substantial question of law arises for consideration as the Income Tax Appellate Tribunal, Amritsar while allowing the appeal has considered all the aspects.
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2023 (5) TMI 1223
Penalty imposed u/s. 271(1)(c) - delay in compliance with Regulation 8(3) of SAST Regulations, 1997 - amount paid to SEBI - HELD THAT:- In any case of the matter, whether the payment made to SEBI for violation of certain SEBI Regulations is on account of any offense or is prohibited by law, as per the language of Explanation 1 to section 37 of the Act, in our view, is a highly debatable issue as there are judicial precedents holding that penalty paid for delay in various obligations to SEBI/Stock Exchange/RBI does not amount to infringement/infraction of any law. Therefore, merely because assessee accepted the disallowance, it will not lead to the conclusion that the assessee has furnished inaccurate particulars of income. Penalty imposed u/s. 271(1)(c) in the facts of the present appeal is unsustainable. Accordingly, we delete the penalty imposed. Appeal of assessee allowed.
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2023 (5) TMI 1222
Reopening of assessment u/s 147 - accommodation entry receipts - reason to believe - HELD THAT:- It is pertinent to mention that even at the time of initiating the reassessment proceedings the AO himself was not sure about the mode of accommodation entry/allege transactions therefore reason to believe had no legs to stand. Therefore ground of assessee deserve to be allowed. Valid approval u/s. 151 - HELD THAT:- As relying on M/S N.C. CABLES LTD. [ 2017 (1) TMI 1036 - DELHI HIGH COURT] in the present case also the exercise of approving powers u/s. 151 of the Act appears to have been only ritualistic and formal rather than based on application of mind to the material placed by the AO before the approving authority which could lead to a valid and meaning full approval. Therefore notice u/s. 148 of the Act without obtaining valid approval u/s. 151 of the Act and all consequent reassessment and first appellate order are not validly sustainable and deserve to be quashed - Decided in favour of assessee.
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2023 (5) TMI 1221
Addition on account of services rendered by the assessee to its AE in India - fees for the services rendered by the assessee from outside India to BTPL - whether FTS under the provisions of Article 13(4)(c) of the India-UK DTAA? - Satisfaction of make available clause - HELD THAT:- It is an undisputed fact that the assessee is a tax resident of UK and therefore has opted to be governed by the provisions of India-UK DTAA being more beneficial to it under the provisions of section 90 of the Act. Services provided by the assessee includes administrative services, accounting services, legal services and other support services that are ancillary to the functioning of corporate management function of BTPL. These services are thus essentially in the nature of managerial services which are in our considered view outside the scope of the meaning of FTS under Article 13(4) of the India-UK DTAA. A mere provision of service may require technical knowledge by service provider but that would not per se mean that such technical knowledge has been made available to the service recipient. Therefore, the assistance, support or advice provided by the assessee to BTPL shall not per se be considered to make technology available since the assessee did not make available any technical knowledge, experience or skill to BTPL by way of rendering the above support services to BTPL. Article 13(4) of the India UK DTAA does not apply to the assessee s case and hence the consideration could not be included in FTS. Services rendered by the assessee to BTPL do not satisfy make available clause as envisaged under Article 13(4)(c) of the India-UK DTAA to fall within the scope of FTS. Hence, the fees for the services rendered by the assessee from outside India to BTPL are not in the nature of FTS as per the provisions of Article 13(4)(c) of India-UK DTAA. Decided in favour of the assessee.
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2023 (5) TMI 1220
Deduction u/s 80IC - income earned from sale of scrap - According to the AO, the words derived from pertains to sale of the goods manufactured in the eligible unit and scrap sales are not byproduct of the assessee - HELD THAT:- We observe that the same issue had come up before the Pune Tribunal for A.Y. 2016-17 [ 2021 (12) TMI 821 - ITAT PUNE ] and there also, by placing reliance on the earlier decision of Pune Tribunal in assessee s own case in [ 2017 (12) TMI 1826 - ITAT PUNE ], Tribunal had provided the relief to the assessee. The ld.DR also, on principle, conceded that the issue is covered in favour of the assessee. Unable to demonstrate any contradicting facts with those already on record nor could furnish any judgment of higher forum favouring the Revenue on this issue. As per principle of consistency, on the same parity of reasoning, deduction u/s. 80IC shall be allowed for the sale of scrap. Ground of Revenue are dismissed. Disallowance u/s. 14A - CIT(A) placing reliance in assessee s own case in [ 2017 (11) TMI 1929 - ITAT PUNE ] observed that since the facts were identical to the year with the appeal following the same, he allowed relief on this issue also to the assessee - HELD THAT:- The principle of res judicata are not applicable in the income tax proceedings and, therefore, as a quasi-judicial authority, the ld. CIT(A) should have examined the facts for this year and then compared them with the facts in a definite manner as appearing in the Pune Tribunal s decision which was relied on by him. Such exercise has not been done as is evident in his order. On the contrary, it is evident from the order of the AO that after considering the submissions filed by the assessee, he has categorically stated why disallowance u/s. 14A is warranted in this case and that he was not satisfied with the calculation of the assessee. It is clearly evident that the AO has recorded his reasons and satisfaction specifically in his order while addressing this issue and invoking sec.14A r.w.r. 8D. Decided in favour of revenue. TP adjustment - Allocation of certain corporate expenses to the 80IC unit at Roorkee - HELD THAT:- Admittedly, in this case, the allocation of corporate expenses was done for both the units on the basis of sale for the year under consideration. It is not a case of cost allocation for rendering any services by one unit to the other, which otherwise would have required the ALP determination by applying an arm s length mark-up. Here is a case where common administrative expenses, such as, directors' salary and audit fee etc., have been shared between both the units on the basis of revenue earned by them de hors such expenses culminating into rendition or receipt of any services or property by/from one unit to another. We thus uphold the view taken by the ld. CIT(A). Accordingly, grounds of the Revenue stands dismissed.
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2023 (5) TMI 1219
Penalty u/s 271(1)(c) - debatable issue arises - partial income not offered to tax - assessee earned revenues from two streams i.e. web hosting and domain registration charges and offered revenue from web hosting services only to tax in the return filed - assessee did not offer to tax its income from domain registration services for the reason that it was under a bonafide belief that this income is not chargeable to tax under the provisions of the Act - HELD THAT:- As said income has been held to be taxable as royalty by the appellate authorities including the Tribunal in the quantum appeal of the assessee before the Hon ble Delhi High Court, the Hon ble Court has framed a substantial question of law - We are, therefore, of the view that the issue involved in the present appeals is a debatable issue and the position in law is not yet settled. The impugned penalty in both the AYs is therefore not exigible. CIT(A) has rightly deleted the penalty. Accordingly, we reject the appeals of the Revenue.
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2023 (5) TMI 1218
Revision u/s 263 - Deduction u/s 80P - interest income derived from parking of surplus funds in fixed deposits - HELD THAT:-This tribunal s recent order in Solapur Zilha Prathamik Shikshah Sahakari Sanstha Niyamit [ 2023 (1) TMI 1254 - ITAT PUNE] observed that the interest income earned by a co-operative society on its investments held with a cooperative bank would be eligible for claim of deduction u/s.80P(2)(d) of the Act. AO while framing the assessment had taken a possible view, and allowed the assessee s claim for deduction under Sec. 80P(2)(d) on the interest income earned on its investments/deposits with co-operative banks, therefore, the Pr. CIT was in error in exercising his revisional jurisdiction u/s 263 of the Act for dislodging the same - No justification on the part of the Pr. CIT, who in exercise of his powers u/s 263 of the Act, had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under Sec. 80P(2)(d), we set-aside his order and restore the order passed by the A.O under Sec. 143(3) - Assessee appeal allowed.
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2023 (5) TMI 1217
Exemption u/s 11 denied - exemption in the previous years had been allowed by the ITAT and approved by P H High Court - whether CIT(A) ought to have allowed this exemption as a judicial discipline - whether the activities of the Assessee-Trust are charitable in nature, entitling the Assessee to exemption u/s 11? - Tribunal held that the activity of the appellant was in the nature of trade, commerce or business and hence it cannot be regarded as activity for charitable purpose in view of the proviso to section 2(15) of the Income-tax Act, 1961? HELD THAT:- As w.e.f. 1.4.2004, a new section, i.e., section 10 (46A) is slated to be incorporated in the Income Tax Act, so as to exempt any income arising to a body or authority, or Board or Trust or Commission, not being a company, which has been established or constituted by or under a Central of State Act with one or more of the following purposes, i.e., dealing with and satisfying the need for housing accommodation;planning, development or improvement of cities, towns and villages; regulating, or regulating and developing, any activity for the benefit of the general public; or regulating any matter, for the benefit of the general public, arising out of the object for which it has been created We find that our view is supported by the decision in the case of CIT (Exemptions) vs. Gujarat Industrial Development Corporation [ 2023 (4) TMI 392 - GUJARAT HIGH COURT] wherein, the Hon'ble Gujarat High Court, following the decision of the Hon'ble Supreme Court in the case of Ahmedabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT] has dismissed the appeal filed by the Revenue, holding that the matter is squarely covered by the decision of the Hon'ble Supreme Court and no question of law, much less any substantial question of law arises for consideration. It is relevant to note that in the said case, the Senior Standing Counsel appearing for the Revenue fairly submitted that the decision rendered in the case of Ahmadabad Urban Development Authority (supra) would govern the case of the assessee. We, therefore, find that the Revenue has also accepted the decision of the Hon'ble Supreme Court as applicable in the case of Gujarat Industrial Development Corporation, which is also a statutory corporation constituted under the Gujarat Industrial Development Act for the purpose of securing and assisting rapid and orderly establishment and organisation of industrial areas and industrial estates in the State of Gujarat. Conclusion: (a) For A.Y. 2011-12, the Hon'ble High Court has granted exemption to the Assessee trust under section 11 of the Income Tax Act. (b) The Civil Appeal of the Department against the said High Court judgement has been rejected by the Hon'ble Supreme Court. (c) The Hon'ble High Court has held the Assessee s activity of sale of plots and premises, even at market price, not to be a commercial or business venture per se, but to be necessitated by the statutory mandate of the Punjab Town Improvement Act, 1922, i.e., the mother statute qua the Assessee trust. (d) Facts for the year under consideration, i.e., A.Y. 2016-17, not having undergone any change at all from the facts in A.Y. 2011-12, the judgement of the Hon ble High Court for A.Y. 2011-12, as approved by the Hon'ble Supreme Court in Ahmedabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT] is squarely applicable to the year under consideration, that is, A.Y. 2016-17. (e) Therefore, the second proviso to section 2 (15) and, consequently, section 13 (8) of the Income Tax Act are held not applicable to the Assessee s case, and so, the aggregate receipts of the Assessee trust from its activities of sale of plots, flats and commercial booths and also its income earned form non-construction fee, transfer fee, penal interest and compounding fee, etc., are held to be entitled for exemption under section 11 of the I.T. Act. Such exemption is allowed to the Assessee. (f) The Order under appeal is, thus, reversed and cancelled on accepting the grievance of the Assessee. Assessee appeal allowed.
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2023 (5) TMI 1216
Determination of commission income of the proven accommodation entry operator - CIT (A) s reducing the commission income to 1.04% against the AO s determination @ 2% - HELD THAT:- identical issue was considered by the coordinate Bench of the Tribunal in the case of the brother of the assessee, Anand Kumar Jain [ 2023 (1) TMI 1254 - ITAT PUNE] the rate of commission in the present cases is determined at 0.47%. AO is accordingly directed to follow the direction in the aforesaid ITAT order. Protective addition - HELD THAT:- We note that the Ld. CIT(A) has held that the impugned amount can at best be treated as obtained out of assessee s undisclosed commission income which has already been brought to tax. We note that on identical issue, the Tribuna l[ 2023 (5) TMI 1186 - ITAT DELHI] in the case of Sh. Anand Kumar Jain, observed that such receipt form part of accommodation entries and that the AO may verify the same. Following the aforesaid precedent, we direct the AO to verify the same as stated above. Apropos DVO Report - difference in the value of property purchased by assessee and his wife during the year under consideration - immovable property purchased by the appellant was referred for valuation to the DVO - HELD THAT:- As CIT(A) has given a finding transaction was not below the circle rate. We note that the ld. CIT(A) has passed a well reasoned order, which does not need interference.
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2023 (5) TMI 1215
Penalty u/s 271B - AO was not satisfied with the claim of exemption for the purpose of Section 10(23C)(iiiab) r.w.r. 2BBB - AO observed that the assessee university has not audited its account as per Clause (b) of sub-section (1) of section 12A despite the fact that its total income as computed under the Act without giving effect to the provisions of Section 12 exceeds the maximum amount which is not chargeable to Income Tax in F.Y. 2017-18 - whether violation of main part of the Section 44AB confirmed? HELD THAT:- Proviso of Section 44AB is not a default or charging provision rather is a beneficial provision for the any assessee whose accounts are audited under any other law other than the Act and such audited accounts if furnished with return will be considered as compliance of Section 44AB - AO has considered it to be a default Clause and erroneously introduced the default of audit u/s 12A(1)(b) to fall in the Proviso to Section 44AB. While in case there is a failure of audit for the purpose of Section 12A(1)(b) of the Act, then there is no penalty provision except that the Act provides that the concerned assessee shall not be entitled to the benefit of exempt income u/s 11 or 12. If the impugned order of CIT(A) is considered it appears that he introduced his own case as the Ld. AO had not found violation of main part of the Section 44AB for the reasons that the assessee university had gross receipts for the year under consideration above the prescribed limit of Rs. 60,00,000/- for mandatorily getting books of accounts audited as per provisions of Section 44AB of the Act but Ld. AO had taken shelter of Proviso to section 44AB and assumed as assessee University has not got the accounts audited for the purpose of Section 12A(1)(b) of the Act, this is a violation of Section 44AB of the Act. Tax Authorities below have fallen in grave error on facts and law while invoking the penalty provisions. Decided in favour of assessee.
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2023 (5) TMI 1214
Reopening of assessment - validity of notice u/s 148 - Information received by the AO under Project Falcon from DGIT(Investigation), Mumbai about trading on the United Stock Exchange of India by engaging in reversal trades in illiquid stock options resulting in non-genuine business loss/gains to the beneficiary assessee and that the present assessee is a party to such manipulation - HELD THAT:- Reasons derived by the AO on the alleged ground of income escaping assessment which consists of claim of artificial loss from trade reversal on Stock Exchange and the belief that the assessee has incurred an amount as commission paid for obtaining a loss of is beyond logic and not borne out of any record. Hence, the order passed by the Assessing Officer u/s 147 dated Nil is to be treated non est in the eyes of law. Appeal of the assessee is allowed.
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2023 (5) TMI 1213
Addition toward estimated gross profit by rejecting books of accounts - Unexplained cash credits - HELD THAT:- Where AO rejected books of account u/s 145(3) and made estimated addition on turnover, then such books of accounts should not be relied to make addition on account of sundry creditors/ trade creditors. Thus, respectfully following the judgment of BAHUBALI NEMINATH MUTTIN [ 2017 (1) TMI 1375 - KARNATAKA HIGH COURT] the addition made by the Assessing Officer, in case of assessee under consideration, on account of creditor/ temporary loan taken for trading purpose should be deleted. Addition u/s 68 - creditors/person who gave the temporary loan, did not turn up before him, as discussed in the assessment order - We note that assessee has produced sufficient documents and evidences before the assessing officer and the solitary reason of not serving of summons on few creditors cannot be relied only by ignoring the other relevant material produced by the assessee. The judicial pronouncement in the case of D. H Enterprises [ 2016 (8) TMI 510 - GUJARAT HIGH COURT] in which it was held that the solitary reason of not serving of summons cannot be relied only by ignoring the other relevant material produced by the assessee. As noticed that in the case of the assessee, the confirmation with the name, address, copy of ledger account, copy of bank statement and PAN number in respect of the parties were filed before the Assessing Officer, therefore addition should not be made in the hands of assessee. Assessee has proved the source of money and the assessee need not to prove source of the source , as held in the case of Prayag Tendu Leaves Processing Co, [ 2017 (12) TMI 932 - JHARKHAND HIGH COURT] - assessee`s case is covered by the judgment of Gopal Heritage (P.) Ltd, [ 2021 (10) TMI 422 - GUJARAT HIGH COURT] wherein the Court held that where assessee had taken unsecured loans from some persons and Assessing Officer made addition under section 68 on ground that assessee had not been able to prove immediate source of cash-in-hands of party, since all ingredients contemplated under section 68 had been duly satisfied in aspect of identity of creditors, genuineness of transactions and their creditworthiness, said addition was to be deleted As evident that the assessee had produced all relevant details and documents in its possession, namely, names and addresses, PAN numbers, confirmations, bank statements and copy of ledger accounts. The amounts in question had been received by way of account payee cheques. As permanent account numbers and the income tax returns of all the creditors had been furnished by the assessee,AO could have easily verified the same, hence there is no failure on the part of the assessee to furnish relevant documents and evidences before the AO. Onus of the assessee (in whose books of account credit appears) stands fully discharged if the identity of the creditor is established and actual receipt of money from such creditor is proved. In case, AO is dissatisfied about the source of the amount deposited in the bank accounts of the creditors, the proper course would be to assess such credit in the hands of the creditor (after making due enquiries from such creditor). Therefore, AO was not justified in treating it as unexplained cash credit. The assessee has satisfactory explained the source. Ground of assessee s appeal is allowed.
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2023 (5) TMI 1212
Assessee in default u/s 201(1) - non-deduction of TDS on provision for expenses made at the end of the year u/s 194C, 194I and 194J - AO observed that the provision had been made on ad hoc basis in respect of various expenditures by the assessee - HELD THAT:- It is a fact on record that such provisions were made in view of accrual method of accounting followed by the assessee and the same were reversed in the books of account on the first day of the immediately succeeding year. Not in dispute that as and when the invoices are received by the assessee in the succeeding year with date of invoice falling in the succeeding year, the same are processed for payment wherein due deduction of tax at source have been made and remitted to the account of the Central Government within the prescribed time. This is a consistent practice followed by the assessee on year-to-year basis. The fact of the assessee deducting the tax at source in the succeeding year and remitting the same to the account of the Central Government on various dates are enclosed. See case UCO BANK VERSUS UNION OF INDIA OTHERS [ 2014 (11) TMI 412 - DELHI HIGH COURT] We find that in the absence of an ascertainable amount and identifiable payee, the machinery provisions of recovering tax deducted at source falls flat because in either way, it does not aid the charge of tax u/s 4 of the Act, but, takes a form of separate levy independent of other provisions of the Act. Similar view was also taken in yet another decision of the Hon ble Jurisdictional High Court in the case of DCIT vs. Ericcson Communications Ltd. [ 2015 (9) TMI 507 - DELHI HIGH COURT] . Thus we hold that the assessee cannot be treated as an assessee in default for mere book entries passed within the meaning of section 201(1) and consequentially interest u/s 201(1A) is also directed to be deleted. Assessee in default u/s 201(1) and interest u/s 201(1A) levied - short-deduction of tax at source on certain expenditures - HELD THAT:- We find that the assessee had explained before the lower authorities that some of the payees had furnished low tax deduction certificate obtained u/s 197 of the Act from their TDS Officer and had furnished the same to the assessee. Accordingly, the assessee had deducted the tax at source in accordance with the rates prescribed in the low tax deduction certificate u/s 197 with effective date mentioned thereon. Hence, it was the case of the assessee that there was no short-deduction of tax made by the assessee at all and that all the taxes have been duly deducted and remitted in accordance with the provisions of Chapter XVII-B of the Act. CIT(A) had merely directed the AO to examine the same and decide the issue accordingly. The assessee is directed to produce the certificates obtained u/s 197 before the ld. AO to justify its case. Accordingly, the issue in respect of short-deduction of tax at source is hereby remitted to the file of the ld. AO. Assessee in default u/s 201(1) and liable for interest u/s 201(1A) - professional expenses incurred by the assessee - HELD THAT:- We find that a sum has been transferred by the assessee to Professional charges separately. This clearly acts to prove that the professional expense as already included in the aggregate retainership fee. Hence, the contentions of the Revenue that professional expenses had not been subjected to deduction of tax at source, is factually incorrect. Direct the ld. AO to delete the demand raised on account of professional expenses both u/s 201(1) and u/s 201(1A) of the Act. Assessee in default in respect of rent expenses, retainership fee and search engine marketing expenses - HELD THAT:- As stated earlier some of the parties to whom payments were made had furnished lower tax deduction certificate u/s 197 of the Act and some of the parties to whom payments were made were not liable to be subjected to TDS provisions as per the Act. In the interest of justice and fair play, we deem it fit and appropriate to restore this issue to the file of the ld. AO for denovo adjudication qua this aspect of the expenditure.
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2023 (5) TMI 1211
Penalty u/s 271B - failure to get his books of account audited by a qualified Chartered Accountant, thereby violating the provisions of section 44AB - as explained that the assessee is engaged in the business of supply of milk (Amul) on behalf of Gujarat Co.op Milk Marketing Federation Ltd. known as Amul Milk in the assigned area - HELD THAT:- During assessment proceedings as also before the Ld. CIT(A) in penalty proceedings the assessee explained, inter alia that it was his first year of business and that he was under the bonafide belief that the provisions of section 44AB as inapplicable to him as he was only a commission agent supplying milk on behalf of Amul Milk in the assigned area and was entitled to fixed commission only. In our opinion, the explanation offered by the assessee constitutes reasonable cause and the assessee is eligible to the protection envisaged under section 273B. It is an admitted position that during the course of assessment proceedings, the assessee got the tax audit done and submitted the tax audit report before the Ld. AO when he was made aware that initial receipts having been deposited by him in the bank account maintained by him necessitated tax audit as per the provisions of section 44AB. This factual position has altogether been ignored by the Ld. AO/CIT(A) and the impugned penalty has been levied/confirmed. As during the course of assessment proceedings, the assessee got the tax audit done and submitted the tax audit report before the Ld. AO when he was made aware that initial receipts having been deposited by him in the bank account maintained by him necessitated tax audit as per the provisions of section 44AB. This factual position has altogether been ignored by the AO/CIT(A) and the impugned penalty has been levied/confirmed. The contention of the assessee before the AO/CIT(A) has been that the assessee is only an agent of Amul. The assessment order passed on 28.12.2019 reveals that the assessee explained in detail the modus operandi of his business which after examination has been accepted by the Ld. AO. The explanation offered by the assessee has been discarded by the Ld. CIT(A) without any valid and cogent reasons. As following the decision in Mohd. Javed s case [ 2023 (3) TMI 1364 - ITAT DELHI] we hold that the impugned penalty is not sustainable which we hereby vacate. Decided in favour of assessee.
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2023 (5) TMI 1210
Unaccounted income - income from film distribution - difference between the amount being the collection as per document impounded and as shown by the assessee on account of assessee s share received from the film distributor on account of the movie Pokiri - HELD THAT:- A perusal of the fax received from Asha Film Distributor, clearly shows the share of the assessee on account of the picture Pokiri . The above amount is for 91 days. The said fax clearly gives all the details and was recovered from the office of the assessee which was received in his Fax number only. When the said document gives the time, date, name of the Centre with whom the assessee is doing business giving full details of the share of the assessee, it cannot be said that it is a dumb document. Although film distributor has stated that he has given only Rs.1,40,00,000/-, however, he did not produce any books of account to support his claim nor he has given any explanation as to how and why the fax was sent from his office to the assessee. Since the impounded document clearly gives full details of the share of the assessee and since the learned CIT (A) out of the above has allowed certain expenses towards commission, therefore, in absence of any contrary material brought to our notice, the order of the learned CIT (A) is upheld and the grounds raised by the assessee on this issue are dismissed. CIT (A) power in directing AO to enhance the income - HELD THAT:- As held in various decisions that the power of the CIT (A) is co-terminus with that of the power of the AO and the CIT (A) can do which the Assessing Officer has failed to do. Since CIT (A) has already deleted an amount and another amount subject to certain verification, therefore, by directing the AO to rectify the mistake amounting to Rs.31.00 lakhs does not amount to any enhancement of income. Therefore, he is not required to issue any notice for enhancement of income. In any case, the learned CIT (A) has given a simple direction to rectify the mistake which the AO has committed by not adding the amount which has attained finality . Therefore, the order of the CIT (A) on this issue is justified. The grounds raised by the assessee on this issue are accordingly dismissed.
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2023 (5) TMI 1209
Depreciation on goodwill - goodwill as acquired during business acquisition - Company has entered into a business acquisition agreement to acquire the business of four Soft Limited ('Four Soft'), as a going concern on slump sale basis - consideration paid in excess of the book value of the assets acquired inter alia consists of the attributes of goodwill. HELD THAT:- We find merit in the argument of assessee that the purchase consideration was attributed to the business acquired from Four Soft which is a bundle of the components and described in Clause 6.2.2. of the BTA. Details furnished by assessee in the paper book that with the above benefits accrued on transfer of business, the business of the assessee has increased substantially from financial year. As the transfer of IP from Blujay India to Blujay UK cannot question the benefits accrued from the bundle of assets transferred in the course of acquisition as IP was just a part of the assets acquired from Four Soft. Therefore, argument of the Revenue that the underlying asset consisting goodwill is transferred cannot be accepted as IP in entirety did not result in creation of goodwill and the goodwill is a sum paid for acquisition of all the assets and rights i.e. the Business Commercial Rights acquired from Four Soft. As find from the details furnished by the assessee that post transfer of IP to Blujay UK, IP platform licence access was provided back to Blujay India which is in turn providing software development support distribution services in India to domestic third parties. 50% of such income has also been offered to tax in India. From the details furnished by the assessee, we find it is only the ownership of the IP that is transferred to Blujay UK and Blujay India is still benefitting out of the other assets acquired namely business contracts, employees, business permits, policies, readymade business etc. - Transfer of IP to UK was on back-to-back basis without any capital gains and the assessee has not claimed any depreciation on the IP transferred during the year. We find merit in the argument of assessee that the net balance of purchase consideration paid, and the value of net assets acquired is Goodwill and the transfer of IP to BluJay UK cannot affect the value of goodwill as the Goodwill is rightly attributed to all the assets acquired from Four Soft and benefits accrued to BluJay India. Once the existence of Goodwill is established, Depreciation on such goodwill cannot be questioned further. As following the decision of Avis Hospitals India Ltd [ 2022 (7) TMI 268 - ITAT HYDERABAD] we are of the considered opinion that the assessee is entitled to claim depreciation on goodwill. Decided against revenue.
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2023 (5) TMI 1208
Rectification u/s 154 - apparent mistake in the order passed by the AO in the year 2009 - whether after finalization of the assessment proceedings up to the level of the Tribunal and after dismissing the M.A. can assessee file an application under section 154 before the AO on the same issue? - HELD THAT:- Whether the income tax authorities mentioned u/s 116 can rectify any mistake in its order which is though not apparent but will have any effect of setting aside the order passed by the superior authorities. No doubt that the income tax authority can rectify any apparent mistake in its order however, when the order of the AO, has been upheld by the ld.CIT(A) and thereafter by the Tribunal, in that eventuality, AO is denuded from rectifying any such mistake, as it would lead to giving unbridled power to AO/ ld.CIT(A) to unsettled the settled position of fact and law and will lead to chaos and anarchy. In the present case, after the Tribunal had dismissed the appeal of the assessee on merit, AO has rightly dismissed the rectification application filed by the assessee as the AO was duty bound to implement the order passed by the Tribunal. After approval of the order without modification by the superior authority, the order of the lower authority ceases to exist. The order of the Tribunal/superior authority passed by it can only be modified, set aside and annulled by process known to law. Admittedly, the Tribunal has neither recalled its order nor an appeal has been preferred against the order passed by the Tribunal before the hon ble High Court. Order passed by the Tribunal has attained finality and is required to be executed / enforced by the Assessing Officer. We cannot subscribe the view of the ld. AR that by rectification, the alleged jurisdictional issue can be looked into by the Assessing Officer or ld.CIT(A) thereby annulling the entire assessment proceedings, more particularly, when the assessment proceedings have already attained finality by virtue of the order of the Tribunal. There cannot be two contradictory orders of the Tribunal one by upholding the assessment and other quashing the assessment based on the jurisdictional error. A mistake which can be rectified is required to be apparent and should be known to the Assessing Officer without any in-depth analysis. The Hon'ble Supreme Court in the case of Volkart Brothers [ 1971 (8) TMI 3 - SUPREME COURT] had elaborately discussed the scope of section 154 , hence the mistake pointed by the assessee can not be said to be apparent in nature. Examining the issue either from the prospective of finality of the first order or from the scope of section 154, we allow the appeal of Revenue and accordingly, the appeal of the Revenue is allowed.
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2023 (5) TMI 1207
Validity of reassessment proceedings - assessment of shipping freight income in India - documentation charges and vessel handling charges assessed as the income of the assessee - HELD THAT:- Assessee is a Singapore based shipping entity and is governed by India-Singapore DTAA. The assessee claim that shipping income thus earned by the assessee is covered by Article-8 of DTAA which provide that only the resident country would have taxation right to tax the same. Accordingly, the assessee has availed the benefit of Article-8 and filed its return of income by taking benefit of DTAA on freight income. Whole dispute stem from the fact that the agent was subjected to survey action u/s 133(2A) wherein statement of key persons was recorded. The main issue emerged out of document / vessel handling charges stated to the received by the agent independently. The copies of statement taken during survey proceedings are on record and we have perused the same. The same has also been extracted in the reasons recorded by Ld. AO to reopen the case of the assessee. The fact of escapement of income is sine qua non to acquire this jurisdiction. Until and unless there is escapement of income, the reopening could not be resorted to under law. We find that in the present case, there are no reasons before Ld. AO to reach such a belief that documentation / vessel handling charges belonged to the assessee and the agent wrongly offered the same to tax. Secondly, there is no escapement of income since the income has already been offered to tax by the agent. Merely because tax rate was higher for principal, the same could not lead to a conclusion that there was escapement of income unless it was conclusively shown that the income of the principal was erroneously offered to tax by the agent. We find that there is no such material before Ld. AO to reach such a conclusion. There is no material to reach a conclusion that the aforesaid income belonged to the assessee. This being the case, reassessment jurisdiction, as acquired by Ld. AO, could not be said to be valid in the eyes of law and the same is, therefore, liable to be termed as bad-in-law. The fulfilment of primary conditions viz. reasons to believe and escapement of income is sine qua non to acquire the reassessment jurisdiction. If the same are not fulfilled, no valid jurisdiction could be said to have been acquired by Ld. AO. Simply because tax rate was higher for principal assessee, the same could not be a ground to tax the same in the hands of the assessee unless it was demonstrated that the said income was collected by the agent on behalf of the principal and this income belonged to principal only. We find that there is no material before Ld. AO to reach the said conclusion. Therefore, the assessment framed by Ld. AO is liable to be quashed on this score only. For every new issue coming before AO during course of proceedings of assessment or reassessment of escaped income and which he intends to take into account, he would be required to issue a fresh notice under section 148. If no disallowance was made for items which led to formation of belief of escapement of income then the reasons for initiation of reassessment proceedings would cease to survive and therefore, there was no justification to make addition on other account. This decision follows the ratio of decision of Hon ble Bombay High Court in Jet Airways (I) Ltd. ( 2010 (4) TMI 431 - HIGH COURT OF BOMBAY ). These case laws are binding on us. Therefore, in the absence of any contrary decision shown to us, it was to be held that since the reassessment fails on recorded reasons, the assessment of shipping freight income would be out of reassessment jurisdiction of Ld. AO and therefore, liable to be deleted. The reassessment proceedings as well as consequential assessment framed therein are unsustainable in law and accordingly, liable to be quashed - Decided in favour of assessee. Whether shipping income is taxable only in Singapore as per Article 8 of the India-Singapore? - DTAA Article 24 would have no application in the case of the present assessee but Article 8 would apply and the assessee would be eligible to claim the benefit of the same since it is more beneficial vis- -vis statutory provisions of Income Tax Act, 1961. The conditions of Article 24, in our considered opinion, have not been fulfilled in the present case and therefore, the invocation of the same against the assessee could not be held to be justified. Another line of agreement was that DTAA do not provide for double non-taxation of the income. However, we find that the provisions of Sec. 13F of the Singapore Income Tax Act were already in existence since 01-04-1991 whereas DTAA between the two countries has been signed subsequently on 27-5-1994. Despite that, both the authorities chose not to alter the taxation right of shipping income which is generally available to the country of residence. The DTAA is in the nature of bilateral agreement wherein the two countries have specifically agreed on the taxing rights of particular streams of income. The same has to be given effect to in full, whatever the consequences may be. Any income of a non-resident shipping company which is a tax resident of Singapore is liable to be taxed only in Singapore but not in India. The provision of Article-24 would apply to income which is exempt from tax as per the tax treaty which is not the case since the international shipping income earned by the assessee is not exempted in India. Therefore, the exclusive right of taxation in one contracting state is not the same as the specific exemption being available in other contracting state. Shipping income as dealt by Article-8 states that profits derived by an enterprise of a contracting state by operation of ships in international traffic shall be taxable only in the State of residence. The word 'only' debars the other contracting state to tax the shipping income so earned by the assessee even if it is sourced from India. When India does not have any taxation right on a shipping income of non-resident entity, exemption or reduced rate of taxation in the source state is of no relevance because once the taxing right has been given-off, the other conditions like exemption or reduced rate of tax has no bearing on the taxability of particular income in other contracting state. Therefore, the assessee being tax resident of Singapore, shipping income so earned from India on international waters is taxable only in Singapore on accrual basis.
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2023 (5) TMI 1206
Unexplained deposits in cash in bank - assessee's father was the owner of agriculture land and the said cash was deposited partly out proceeds from sale of agriculture land belonging to father - as argued AO only had taken the amount for depositing cash in bank but not consider the withdraw of cash during assessment proceeding - HELD THAT:- As it is very clear that the assessee filed the return for the impugned assessment year and the cash deposited from the well explained source for selling of the property of his father. The assessee is a power of attorney holder of his father for selling the land, copy of the power of attorney dated 17.02.2012 along with English Translation are duly. The documents are duly filed before both the authorities. After considering the factual matrix the assessee cannot be deemed assessee as mentioned by the AO in the remand report. In remand report the ld. AO accepted the fact that the properties are not related with the assessee and the cash was originated from the sale of property and the assessee s own source which is explained in cash account of assessee. The concept of the deemed assessee cannot be sustained as per the explanation of section 159 and 160 r.w.s 2(7) - assessee is not liable for payment of tax related to sale of property which belong to his father. The source of cash deposited in bank accounts is well explained considering the cash trial of the assessee. AO had only considered the cash deposit. Deposit of cash was duly explained during the remand before the ld. AO. Entire issue was explained before both the lower authorities by the assessee. DR has not submitted any contrary fact or any judgment against the submission of the ld. AR. So, the addition made by the ld. AO is quashed. Decided in favour of assessee.
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2023 (5) TMI 1205
TDS u/s 194C or 192 - short deduction of TDS u/s. 201(1) and interest thereon u/s. 201(1A) - remuneration paid to the consultant doctors - existence of employer and employee relationship - when the engagement of the services of the doctors can be seen to be in the nature of employment? - survey team observed that there exists an employer and employee relationship between consultant doctors and the appellant and thus, the assessee should have deducted TDS u/s. 192 for payment made to the consultant doctors - HELD THAT:- AO grossly misunderstood the model employed by the assessee for employing employee doctors and consultant doctors and took one sample report of an employee doctor and observed that even consultant doctors are governed by said report - fact remains that as per details filed by the assessee, consultant doctors are not governed by said rules and are independent. AO is completely erred in coming to the conclusion that there is an employer and employee relationship between consultant doctors and appellant company and remuneration paid to said doctors is salary which attracts provisions of section 192. As there is absence of employer and employee relationship. Therefore, opined that the department does not have individual materials to reassess the income of consultant doctors. As in CIT v/s. Grant Medical Foundation [ 2015 (2) TMI 457 - BOMBAY HIGH COURT] examined at length the issue as to when the engagement of the services of the doctors can be seen to be in the nature of employment. In this case also the Hon'ble High Court held the relationship between Professional Doctor consultant and the Hospital cannot be treated as Employer Employee relationship, unless there exist the specific Rules and Provisions in the contract of appointment between the consultant and Hospital. There is no error in the reasons given by the CIT(A) to delete additions made towards short deduction of TDS u/s. 201(1) and interest thereon u/s. 201(1A) in respect of payment made to consultant doctors. Thus, we are inclined to uphold the findings of the ld. CIT(A) and reject ground taken by the revenue. Short deduction of TDS - payment to annual maintenance charges for maintenance of medical equipment u/s. 194J OR 194C - HELD THAT:- AMC charges paid by the appellant to various contractors is a simpliciter works contract charges paid for repair and maintenance of medical equipment, which cannot be considered as fees for technical services as defined u/s. 194J of the Act, because said services does not parse required specialized technical knowledge. As decided in case of M/s. Saifee Hospital [ 2019 (4) TMI 710 - BOMBAY HIGH COURT] payment for services rendered towards maintenance of medical equipment, is payment for work contract covered u/s. 194C and the same does not involve any technical service, which would require deduction of tax at source u/s. 194J of the Act. CBDT Circular No. 715 dated 08.08.1995, has also clarified the applicability of TDS provisions in respect of payment made to AMC provider by way of question no. 29 and answered that routine, normal maintenance contract which includes supply of spares will be covered u/s. 194C - there is no error in the reasons given by the CIT(A) to delete additions made towards short deduction of TDS on payment made to AMC charges u/s. 201(1) and interest thereon u/s. 201(1A) - Decided against revenue.
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2023 (5) TMI 1204
Unexplained cash deposits - cash deposits made during demonetization period - assessee submitted that source for cash deposits was out of sale proceeds of ancestral property (agricultural land) and initially receipts from sale of property was deposited into joint account of assessee and sister-in-law and later sister-in-law has withdrawn money from her bank account and gave a gift to the assessee. The source for cash deposit is out of gift received from my sister-in-law - HELD THAT:- From the sequence of events and arguments of the assessee right from the assessment stage to appellant stage, we find that there is inconsistency in arguments in respect of source for cash deposits. Assessee could not file any corroborative evidence to substantiate his arguments, that why the money received towards sale of property was kept in his sister-in-law bank account, when he was having right and interest in the property. Assessee could not also explain how the amount withdrawn in the year 2013 was made available for depositing in the year 2016, that too during demonetization period. The arguments of the assessee that money was kept for the purpose of treatment of his brother was also unproved, because no evidence has been filed to justify his arguments and further, there was no proof as to how much was spent for treatment and how much balance was available with the assessee. It is difficult to accept the evidences filed by the assessee to prove the source for cash deposits during demonetization period - Decided against assessee.
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2023 (5) TMI 1203
Validity of order passed u/s 92CA(3) - period of limitation - Whether TP order in this case has been passed by the TPO after the time limit prescribed u/s 92CA(3A) r.w.s. 153? - HELD THAT:- As in the present case the TPO has passed the order only on 30.01.2014 which was after the limitation period as prescribed u/s 92CA(3). We note the similar view has been taken by the Tribunal in the following cases Tata Power Solar Systems Ltd [ 2022 (3) TMI 1510 - ITAT BANGALORE] , M/s.Swiss Re Global Business Solutions India Pvt. Ltd. [ 2022 (1) TMI 1033 - ITAT BANGALORE] , ECL Finance Ltd. [ 2021 (9) TMI 1399 - ITAT MUMBAI] M/s. Unisys India Pvt. Ltd. [ 2022 (6) TMI 1378 - ITAT BANGALORE] . Since the impugned order passed by the TPO u/s 92CA of the Act is beyond the period of limitation it is held to be bad in law. Therefore the addition in respect of TP adjustments stands quashed. Non-grant of Foreign Tax Credit under India-Singapore Treaty - HELD THAT:- Since issue requires factual verification the same is restored back to the file of the AO for de novo consideration. AO is directed to compute foreign tax credit that is due to the assessee in accordance to the law after affording a reasonable opportunity of hearing to the assessee. Assessee has claimed credit of tax deducted at source while computing the tax liability for the year, which also requires verification at the end of the AO and the AO to verify the same and grant credit of tax in accordance to the law after hearing the assessee. Ground allowed for statistical purposes.
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2023 (5) TMI 1186
Determination of commission income of the proven accommodation entry operator - CIT(A) restricted the rate of commission to 1.04% as against 2% computed by the AO - HELD THAT:- As per the explanation and submissions of the assessee, whole of the expenses incurred in earning commission income shall be allowed and accordingly the net rate of commission earned by the assessee i.e. 0.47% is the best which can be applied on the turnover of the accommodation entries after elimination of circular transactions. Thus the maximum addition which can be made in the hands of the assessee on account of commission earned on turnover of the accommodation entries worked out accordingly. Estimating the correct value of the property and expenses incurred thereon - Receipt of the valuation report of the DVO after 6 months after the reference - assessee owns 50% of the property - HELD THAT:- CIT(A) concurrently considered the provisions of Section 56(2)(vi ib) and Section 50C, report of the DVO and the stamp duty valuation (circle rates). CIT(A) held that the value as per the stamp duty valuation authority shall be taken as full value of the consideration and since the payment made by the assessee is as per the stamp value authorities determination, no addition is called for. Addition made on account of cost of construction CIT(A) held that there was no difference between the value in the cost of construction declared by the assessee and the value as considered by the AO, can be attributed owing to the variance being less than 10% of the accepted norms of variation. Having gone through the facts, we find no reason to interfere with the decision of the ld. CIT(A) who accepted the value of the land as per the circle rate and value of the construction within the acceptable range of variation. Protective Addition - As substantive addition has already been completed in the case of Sh. Naresh Kumar Jain and hence, no protective addition can be confirmed at this juncture in the case of the assessee.
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Customs
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2023 (5) TMI 1202
Violation of import conditions - goods (Raw Petroleum Coke) imported by the respondent admittedly having sulphur content in excess of 7% conform to Indian Standard 17049 or not - prohibited/restricted goods - order for provisional release when the import conditions prescribed for the Raw Petroleum Coke (RPC) under ITC HS 27131100 are required to be complied with by the importer in respect of the goods they are importing (i.e. RPC) and not for the goods they are manufacturing (CPC) by using imported RPC - HELD THAT:- According to the respondent the product imported by them being used in the Calcination Plant, the restriction on the sulphur content in terms of the BIS standard, will not be applicable. The learned Tribunal while considering the correctness of the order passed by the Commissioner after setting out the arguments placed before it by both sides has recorded the submissions of the revenue that the goods should not be provisionally released as admittedly the sulphur content is more than four per cent and the same cannot be used by Aluminium Manufacturing Industry. The learned Tribunal has not rendered a specific finding on this submission, takes note of the fact that the respondent importer is a calciner and they would use the imported product as feed stock for making CPC from RDC for their customer with sulphur content ranging 0.8% to 3.5%. Whether there was a violation of the license condition can be examined by taking note that the product that will be manufactured by the respondent importer or should the importer satisfy that the import effected by them is in accordance with license condition? - HELD THAT:- Since the product is a prohibited item the test would be to examine whether the imported product satisfy the license condition rather to examine whether the import was justified based on the end product that would be produced. The Commissioner of Customs, (Appeals) as well as the learned Tribunal has proceeded based upon the ultimate end product which is being manufactured by the respondent. Thus in our view, it would be an incorrect manner of examining as to whether the import was provided and whether it satisfies the conditions of licence. Furthermore, the Tribunal opined that no harm will be caused by provisionally releasing the goods - such a finding cannot be accepted as the question would be as to whether when admittedly the sulphur content is in excess of 7% will it conform to ISI 7049 as mentioned in the licence and if it does not conform to the said standard, is there a violation of the conditions of import? Furthermore, the goods being prohibited item, there is a mandatory requirement to comply with the policy condition and the Tribunal was required to examine as to whether there has been any violation of the stipulations under the policy. Before considering as to whether the goods have to be provisionally released when admittedly the sulphur content is more than 7%. Therefore, this question, which is a mixed question of fact and law is required to be decided by the Tribunal before approving the order passed by the Commissioner of Customs (Appeals) granting provisional release. The matter requires to be reconsidered by the Tribunal - Appeal allowed by way of remand.
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2023 (5) TMI 1201
Classification of export goods - Ilmenite upgraded (processed) - to be classified under Tariff Item 2614 00 20 (as beneficiated/processed Ilmenite) or under Customs Tariff Act 2614 00 10 (as unprocessed Ilmenite)? - HELD THAT:- As per the definition beneficiation is done for three purposes. Any processes done for the above three purposes carried out on the mined sand would be known as beneficiation . From the flow chart which has been noticed above it can be seen that the various processes undertaken on the raw sand by the appellants achieves the purpose of regulating the size, removing unwanted impurities and also improving quality or SI grade of Ilmenite - it is difficult to agree with the view of the Department that to obtain beneficiated Ilmenite processes like roasting and chemical treatment is mandatory. Without furnishing any evidence to establish the said contention, the processes undertaken by the appellant would result in beneficiated Ilmenite. Though the original authority had discussed and held in Para 18 that the goods are not upgraded Ilmenite, however, has held in the operative part of the order that goods which are upgraded ilmenite has to be classified under CTH 26140010. The Commissioner (Appeals) held that the goods are unprocessed and has to be classified under 26140010. From the facts discussed and on the basis of the documents, it is concluded that such processes result in beneficiated Ilmenite. Thus, the goods which are upgraded/processed Ilmenite are classifiable under 2614 00 20. The impugned order is set aside - appeal allowed.
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Insolvency & Bankruptcy
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2023 (5) TMI 1200
Section 7 application admitted - the Adjudicating Authority passed an order on 06.01.2023 closing the right of the Appellant to file reply and the orders were reserved - Respondent submits that the order of the High Court was not even before the Adjudicating Authority when order was passed on 28.02.2023, therefore, there is no error in the order admitting application under Section 7 - HELD THAT:- From the sequence of events which has been brought on the record it does appear that reply was filed by the Corporate Debtor on 29.11.2022 which continued to be under scrutiny as per DMS, as noted in order dated 06.01.2023. Learned counsel for the Appellant submits that there are certain minor defects in the reply which Appellant was always ready to rectify. It is submitted that the High Court has passed the order on 22.02.2023 when the Appellant directly approached the High Court in a Writ Petition. Their being statutory need, the Appellant should have filed appeal, if any, against the order dated 06.01.2223 of the Adjudicating Authority, before this Tribunal. The ends of justice be served in directing the Adjudicating Authority to consider the reply which was filed by the Appellant on 29.11.2022, especially when the Financial Creditor has already filed it rejoinder. The Adjudicating Authority passed the impugned order without taking into consideration the reply which has already filed on 29.11.2022 but laying in defect. Let the Section 7 application be listed before the Adjudicating Authority on 03.07.2023, on which date the Adjudicating Authority may consider the application as well as reply and rejoinder and take decision in accordance with law, as early as possible.
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2023 (5) TMI 1199
Maintainability of Section 9 application - it is argued that entire Operational Debt having been paid by the Corporate Debtor, there is no useful purpose in continuing the Section 9 proceeding any further - impleadment of Respondent as Corporate Debtor - Appellant submits that the Section 9 application was filed for Safeguard Duty reserving right to claim future interest or penalties or delay charges - HELD THAT:- Admittedly, the levy by the Custom Department is by Assessment Order dated 04.10.2022 by which finalization of duty on the bill of entry was made. In the Safeguard Duty, on the date when application was filed, interest could not have included as the amount of interest has been crystalized only subsequently when provisional assessment has been finalized by letter dated 04.10.2022 - The claim of interest levied by order dated 04.10.2022 cannot be said to be included in the debt as claimed by the Applicant under Section 9. The impugned order records that Appellant has deposited on 14.11.2022, entire claim amount of Rs.16,41,96,213.38/- Principal amount and applicable GST making a total amount of Rs.18.68,55.290.82/-. On deposit of the aforesaid amount, thus, the debt as was claimed in the application stood paid. The order further notice that submission was made on behalf of the learned senior counsel for the Appellant that in view of the aforesaid deposit, the application should be rejected, which was opposed by learned counsel for the Respondent stating that interest is also to be paid by the Corporate Debtor - Operational Debt as was claimed in the application under Section 9 which is apparent from Part IV of the Application which clearly states that the Operational Debt was only Rs.17,24,06,024/- and Applicant has reserved its right to claim further interest, penalties or delayed charges, etc. - On payment of entire Operational Debt as was claimed in the application, there was no occasion to continue the Section 9 application any further. It is open for the Appellant to challenge the levy of interest, if they are so aggrieved to liability of interest which ultimately will come on them as per the supply agreement. Appellant cannot get away from liability of interest by saying that it has requested the Operational Creditor to challenge the levy of interest since if the liability of the interest is of the Appellant as per the Supply Agreement, it was open for the Appellant to take such recourse in accordance with law challenging the levy of interest. Section 9 application which was filed by the Operational Creditor, the entire Operational Debt having been paid by the Corporate Debtor, there is no useful purpose in continuing the Section 9 proceeding any further. The Adjudicating Authority ought to have closed the matter and the observation that the parties are permitted to settle the matter amicably within one week, was uncalled for. Appeal deserves to be allowed closing the application under Section 9 filed by the Operational Creditor - Appeal allowed.
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PMLA
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2023 (5) TMI 1198
Money Laundering - proceeds of crime - criminal conspiracy to cause loss to the exchequer and banks by indulging in illegal foreign exchange transactions on the basis of forged/ fabricated documents - Hawala transactions - It has been submitted that the petitioner is neither named as an accused in the FIR in the predicate offence nor was ever summoned during investigation nor charge-sheeted in the predicate offence. HELD THAT:- The jurisprudence regarding bail is by now very well settled that rule has always been bail and its exception jail. It has also been stated time and again that such a principle has to be followed strictly. Right to bail is also essential for the reason that it provides the accused with an opportunity of securing fair trial. The right to bail is linked to Article 21 of the Constitution of India, which confers right to live with freedom and dignity. However, while protecting the right of an individual of freedom and liberty the court also has to consider the right of the society at large as well as the prosecuting agency. This is the reason that the gravity of the offence is required to be taken into account. The gravity of the offence is gathered from the attendant facts and circumstances of the case. It is a settled proposition that economic offences fall within the category of 'grave offences' - The money laundering not only is a threat to the financial health of the country but it may also adversely impact its integrity and sovereignty. Moreover, the act of money laundering can even lead to the collapse of the economic system. Whether the person whose role has been found later knew that the money which he has been dealing with is a proceed of crime? - HELD THAT:- The court understands that this is very difficult for the department to find direct evidence regarding this. But at the same time, despite the twin conditions, the court cannot return any finding merely on the basis of inferences and presumptions. It is a settled proposition that at the stage of bail, the court is only required to see a prima facie case and is not required to look into the test of guilt. The court is required to maintain a delicate balance between the judgment of acquittal and conviction and an order granting bail before commencement of trial. It is also a settled proposition that the court cannot meticulously examine the evidence and cannot hold a mini trial at this stage. The court is only required to examine the case on the basis of broad probabilities - the department has opposed the bail on the ground that if the petitioner is released on bail, he may tamper with the prosecution evidence. However, it is matter of record that the entire evidence in the present case is in form of the documentary evidence and thus complaint has already been filed. The petitioner also cannot be stated to be at flight risk. He has roots in the society and even this ground has not been considered by the department. It is pertinent to mention here that in Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT] it has been inter alia held that the Court is at the stage of considering the application for the grant of bail is expected to consider the question from the angle as to whether the accused possessed the requisite mens rea. It was further held that the Court is not required to record a positive finding that the accused have not committed an offence under the Act - the jurisprudence of the bail positively lays down that a liberty of a person should not ordinarily been interfered with unless there exist cogent grounds. Despite, the twin conditions, it is not necessary that at the stage of bail, the Court has to come to the conclusion that the petitioner is not guilty for such an offence. The Court is at the stage of has to examine the case on the scale of broad probabilities. The Court at this stage is required to record an objective finding on the basis of material available on record and no other purpose. A bare perusal of the Section 2 (u) of the Prevention of Money Laundering Act, 2005 which provides for the definition of proceeds of crime indicates that it is the property derived or obtained, directly or indirectly which relates to criminal activity relating to a scheduled offence. Similarly in order to be punished under Section 3 of PMLA, It is necessary that person dealing with the Proceed of crime must have some knowledge that it is tainted money - the serious medical conditions of the petitioner as stated herein has not improved and he has been under regular treatment and has already undergone two procedures. The applicant has also been stated to undergo further procedures and/or surgeries as and when advised. It has been stated that the petitioner is suffering from numbness of limbs which is a precursor to possible paralysis which requires urgent medical attention. Thus, taking into account the facts and circumstances, the petitioner is admitted to bail on furnishing a personal bond in the sum of Rs. 25,00,000/- with two sureties of the like amount to the satisfaction of the trial court, subject to the conditions imposed. Bail application allowed.
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2023 (5) TMI 1197
Seeking grant of Anticipatory bail - Money Laundering - predicate offence - allegation against the applicant is that he was also involved in the conspiracy and he had taken seven cheques to deposit in the account of co-accused Kapil Kumar - HELD THAT:- Non appearance of the applicant right from dismissal of Special Leave Petition on 25.09.2018 till date cannot be justified on the ground of transfer of file as the applicant had full knowledge of pendency of the case and he had challenged the proceedings by filing applications under Section 482 Cr.P.C. and by filing S.L.P. Spread of covid-19 pandemic also does not justify non-appearance of applicant four five years. As such, without making any further observations, this court is of the considered opinion that the aforesaid conduct of the applicant disentitles him to grant pre-arrest bail by this court - the application for anticipatory bail is hereby dismissed.
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2023 (5) TMI 1196
Money Laundering - seeking release of attached petitioner s properties - it is the specific contention of the petitioner that the property was purchased by him along with another person and thereafter the said property was converted into plots and so many plots was purchased by the third parties - HELD THAT:- It is evident that interest of a co-owner and that of the third party bona fide purchasers of the plots are involved in attached property No.4. The petitioner has offered fixed deposit of Rs.10,00,000/-, which is the value estimated by the competent authority in the Provisional Attachment Order. Therefore, the alternative prayer sought in the writ petition appears to be just and reasonable. The writ petition is allowed-in-part granting alternative relief sought by the petitioner. The respondent is directed to release the attached property No.4 i.e. Ac.6-00 situated at Survey No.376/2, Alamur Village, Ananthapur, subject to the petitioner furnishing security in the form of a fixed deposit for Rs.10,00,000/-.
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Service Tax
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2023 (5) TMI 1195
Short payment of service tax - subsequent adjustment with excess tax paid - appellant submits that the mistake of short or excess payment has occurred due to the newly introduced Works Contract Service - Rule 6 (4A) of STR, 2004 - HELD THAT:- On going through the records of the case and the reconciliation statements submitted by the appellant, it is clear that the appellant has certainly short paid service tax in initial months of April, August and September and excess paid in the months of May, June and July. On reconciliation they have paid the service tax liability along with interest and reflected the same in the returns for the period October 2007 to March 2008. We find that the adjudicating authority simply goes by the show cause notice and bases his confirmation of service Tax on the appellants on the entries made in the ST-3 returns, referring to Rule 6(3) of STR. The Adjudicating authority has not considered the submissions of the appellant and the reconciliation statements submitted thereof; the Adjudicating authority did not discuss the submissions made by the appellants and the Chartered Accountants Certificate. He proceeds only on the premise that the appellant has violated the provision of Rule 6 (3) of STR, 1994 - it is found that the adjudicating authority did not counter or negate the claims and submissions of the appellants. Not even a single piece of evidence has been adduced to show that the appellants have in fact violated the provisions of Rule 6 (3) of STR, 1994. Except for making a bald averment that the appellants have violated the provisions of Rule 6 (3) of STR, 1994, no other discussion is made to show as to how the conclusions were drawn. The appellant can adjust the service tax excess paid against his service tax liability for the succeeding month or quarter; sub-Rule 4A of Rule 6 of STR starts with a non-obstante clause and, therefore, the procedure prescribed for the earlier rules, if any, are not applicable in the instant case; the appellant is eligible to avail the provisions of Rule 6 (4A) of STR, 1994. The fact that the appellant has made good the service tax short paid by them, along with interest, is not refuted either in the SCN or the impugned order. Therefore, there is considerable force in the submissions of the appellant. The Tribunal in the case of M/S. SCHWING STETTER (INDIA) PVT. LTD. VERSUS CCE, LTU, CHENNAI [ 2016 (6) TMI 239 - CESTAT CHENNAI] has observed that the excess amount paid in the month of May, 2011 adjusted by the appellants in the subsequent months tax liability is absolutely in order. Therefore, invoking Section 73(1) for a non-existing 'short-payment' is not sustainable. Accordingly, the impugned order is set aside. Tribunal in the case of DELL INDIA PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, BANGALORE [ 2015 (12) TMI 1555 - CESTAT BANGALORE] has observed that when the assessee paid excess amount of tax to the exchequer, law of the land is very clear under Article 265 of the Constitution of India, which says that No tax shall be levied or collected except by authority of law. If Revenue becomes very rigid on strict compliance of the procedure every time and all the time, there could be situations where such rigidness and strictness on the part of the Revenue could become contrary to the provisions of the Article 265 of the Constitution of India. The impugned order cannot be sustained and is liable to be set aside - Appeal allowed.
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2023 (5) TMI 1194
Refund of service tax paid - Custom House Agents - Technical Testing and Analysis Agencies - denial on the ground of time limitation - denial also on the ground that the conditions set out in the N/N. 17/2009-ST dated 07.07.2009 have not been fulfilled by the appellant. Time Limitation - HELD THAT:- As per para 2(f) the notification No.17/2009, the refund has to be filed within a period of one year. In these appeals, it is seen that the refund claim for different quarters has been entirely rejected by the authorities below. It is submitted by the Ld. Counsel that a few shipping bills may be beyond the time limit. The authorities below ought to have considered the refund claims in regard to shipping bills which are within the time limit of one year. The entire claim for a quarter cannot be rejected merely because few of the shipping bills pertaining to that quarter is beyond the period of one year. The invoices which are filed within the period of one year ought to have been considered for the different quarters - This issue is therefore required to be remanded to the adjudicating authority who is directed to look into the matter as to the shipping bills which are within the time limit of one year. Rejection of refund claim on input services availed for testing and analysis - HELD THAT:- The authorities below have held that testing is done for raw material and therefore it cannot be said that these services have nexus with the finished products which are exported. Even if the services are used for testing of raw materials such services have nexus with the manufacturing of finished products and therefore eligible for credit/refund. Further, the period involved is prior to 01.04.2011 when the definition of input services had a wide ambit as it included the words activities relating to business . It is also to be stated that there is no condition attached to the notification with regard to refund claim in regard to testing and analysis services. The rejection of refund claim on the ground. Rejection of refund claim for the reason that the invoices are issued by the service provider in the address of their Head office at Guindy whereas the input services have been availed by the manufacturing unit at Pallavaram - HELD THAT:- The appellants furnished the address of their Head office to the service provider as it happened to be the Head office. The service provider mentioned such address in the invoices and also for the reason that they received payment from the Head office of the appellant. The Department does not dispute that the appellant has received the services as per the invoices. When there is no dispute with regard to the services availed and the service tax paid, it is opined that rejection of refund is without any basis. The issue with regard to rejection on the ground of time-bar has to be remanded to the adjudicating authority for de novo consideration. In such de novo adjudication, the adjudicating authority shall take into consideration the discussions and view expressed above by us in regard to issue of testing and analysis services and the issue of invoices mentioning the address of the Guindy unit - The appeals are allowed by way of remand to the adjudicating authority.
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2023 (5) TMI 1193
Levy of Service Tax - business auxiliary service - Tea, an agricultural produce or not - eligibility for exemption in terms of N/N. 13/2003-S.T. dated 20.06.2003, as amended by N/N. 08/2004-S.T. dated 09.07.2004 - denial of benefit on the ground that Black Tea is manufactured by the appellant after multiple processes wherein green tea leaf is converted into Black Tea, which would fall under Chapter 9 of the CETA, 1985 and that the same would no longer remain an agricultural produce of green leaf tea. HELD THAT:- The meaning of 'agricultural produce', as extracted in the above paragraphs per Notification No. 08/2004 ibid. undoubtedly covers, inter alia, Tea, but, as specified therein, does not include manufactured products such as sugar, edible oils, processed food and processed tobacco. Therefore, the activity of manufacture is limited to products such as sugar, edible oils, processed food and processed tobacco and nothing beyond that - the production of Black Tea involves processes for which there is no bar in the said Notification. Further, the said Notification does not distinguish between Tea or Green Tea or Black Tea, and it is also well understood that there is no alteration to the essential characteristic other than, perhaps, making it marketable as either Green Tea or Black Tea. Even the processes involved in converting Green Tea into Black Tea does not alter the basic characteristic of the Tea as such and the same could not be considered as a non-agricultural product under any stretch of imagination. The demand raised against the appellant is not sustainable, for which reason the impugned order is set aside - Appeal allowed.
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Central Excise
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2023 (5) TMI 1192
Maintainability of appeal - appeal dismissed for non-compliance of the mandatory requirement of Section 35-F of the Act with respect to pre-deposit to maintain the statutory appeal - HELD THAT:- While there is no dispute that the right of appeal claimed by the appellant before the Tribunal was conditional inasmuch as such appeal may be maintained only upon making pre-deposit prescribed by the statute, at present, learned counsel for the appellant prays for some time to make the pre-deposit to maintain the appeal before the Tribunal. Undisputedly, the appellant is a statutory board constituted by the Government of U.P. In such circumstance, upon query made, Sri Amit Mahajan, learned counsel for the revenue fairly states, if the present appellant were to make good the deposit within a period of one month from today, the revenue would have no objection to the impugned order being set aside so as to allow the appellant to press its appeal on merits. In view of such statement made, no useful purpose would be served in seeking to decide the legal issues being raised - Appeal disposed off.
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2023 (5) TMI 1191
Rejection of petitioner s claim for benefit of budgetary support - rejection on the ground that the benefit thereunder can only be allowed on goods manufactured under an 8-digit HSN code and cleared prior to 01.07.2017 - respondents rejected the claim of the petitioner on the ground that the goods manufactured by the petitioner under the Exemption Notification were different from those manufactured during the operation of the new Scheme - HELD THAT:- The goods covered under the generic head of the Tariff item HSN code 3808 under Chapter 38 are further classified under sub-heads and sub-items with 6-digit HSN code and 8-digit HSN code. Thus, HSN Code 3808 is the broad classification of different goods enumerated in the Table of the different goods/items with 6-digit and 8-digit HSN codes - Under the broad category of 4-digit Tariff Item HSN Code 3808 under Chapter 38, all such goods with 8-digit HSN code falling under it would be eligible for the exemption from excise duty in the manner provided under the Exemption Notification. Thus, if the petitioner s unit manufactured any of the items with 8-digit code mentioned in the sub-items or sub-heads under the broad Tariff Item 3808, exemption could be sought under the aforesaid Notification in respect of the item with 8-digit HSN code. This classification structure would indicate that Tariff item HSN code 3808 is the umbrella covering all the sub-heads and sub-items under which these items with 6-digit and 8-digit HSN codes are categorised. But, there is no tariff rate mentioned against the broad items of 6-digit items like insecticides, or rodenticides, or fungicides etc. mentioned under the broad Tariff Head of 4-digit HSN code 3808. The different items under the aforesaid broad items with 6-digit HSN code (like insecticides) are further categorised with 8-digit HSN code items like Aluminium phosphite (3808 91 11), Calcium cyanide (3808 91 12), D.D.V.P. (Dimethyl-dichloro-vinyl-phosphate, 3808 91 13), Diagonal (3808 91 21) etc. and tariff rates are shown against each of these sub-items with 8-digit HSN code. Upon introduction of the new GST regime, all the notifications issued earlier under the Central Excise Act,including the Exemption Notification were rescinded. However, the Government of India took a policy decision to provide budgetary support to the existing eligible manufacturing units operating in the States of Jammu Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim under different Industrial Promotion Schemes of the Government of India, for the residual period for which each of the units is eligible, and introduced and notified a new scheme on 5.10.2017 vide Notification dated 05.10.2017 - Under the new Scheme, all units which were eligible under the erstwhile schemes and were in operation through notifications issued by the Department of Revenue in the Ministry of Finance, including Exemption Notification for the State (now UT) of Jammu Kashmir were considered eligible. Under this new Scheme, the benefit is limited to the tax which accrues to the Central Government under Central Goods and Service Act, 2017 and Integrated Goods and Services Act, 2017, after devolution of the Central tax or the Integrated tax to the States, in terms of Article 270 of the Constitution. The new Scheme provides certain benefit by way of budgetary support to such units which were being granted excise duty exemption under earlier tax regime prior to introduction of GST regime. However, such budgetary support is conditional and not a blanket support. If the petitioner s unit is eligible, is it entitled to the benefit of budgetary support? - whether the petitioner s unit fulfils the conditions for the benefit of budgetary support? - HELD THAT:- The eligible unit must be manufacturing the specified goods - Specified goods has been defined under para 4.2 of the Scheme notification, as to mean the goods specified under exemption notifications, which were eligible for exemption under the said notifications, and which were being manufactured and cleared by the eligible unit by availing the benefit of excise duty exemption from the premises under Central Excise with a registration number, as it existed prior to migration to GST etc. In order to qualify for the budgetary support, the eligible unit must fulfil the following: (i) continue to manufacture the item covered by HSN 3808 which was manufactured earlier and, (ii) the manufacturing unit must have availed the benefit of the excise duty exemption under the Exemption Notification and, (iii) the said item must have been cleared by the manufacturing unit by availing the excise duty exemption upto 01.07.2017. Consequently, if the unit had not been manufacturing the item and had not been availing excise duty exemption under the Exemption Notification by clearing the same, the unit cannot avail the benefit of budgetary support in respect of the said item under the new Scheme. The unit must manufacture only the specified goods to avail the budgetary support and the specified goods has been defined under Para of 4.2 of the Scheme as those goods which were being manufactured and cleared by the eligible unit by availing the benefit of excise duty exemption. Thus, the specified good in respect of which the budgetary support is sought, not only, must have been manufactured by the unit and cleared by the unit by availing the benefit of excise duty exemption. Thus, manufacturing the item and availing the benefit of excise duty exemption in respect of the said good by clearing it by the unit when the Exemption Notification was in operation are condition precedents for availing budgetary support under the new Scheme, when the unit continues to produce the same good. As a corollary, if the unit had not been manufacturing the particular item covered under Chapter 38, and had not been availing the benefit of excise duty exemption by clearing it, the unit cannot seek budgetary support in respect of the item under the new Scheme - merely producing an item which is covered under the broad Tariff of 3808 will not suffice. The unit must have availed excise duty exemption by clearing it from the unit in respect of the said good to come within the meaning of specified goods . What is important to be noted is that the budgetary support is to be given with reference to the specified goods only. What can further be noted is that under the definition of specified goods , it does not stop by merely the item being mentioned in the Exemption Notification. There are other conditions for the item being qualified as specified good , i.e., the good must find mention in the Exemption Notification and it must not only have been manufactured by the unit when the Exemption notification was in operation, excise duty must have been also availed in respect of the said good by clearing it from the unit. Only, when these conditions are fulfilled, such good will qualify to be a specified good under the new Scheme to avail budgetary support - only such goods having the attributes of being manufactured earlier and in addition, having the benefit of excise duty availed earlier which fell under the broad Tariff Head of 3808 under Chapter 38 of the Excise and Tariff Act under the early Exemption Notification, would qualify for getting the benefit of budgetary support under the Scheme. It would not suffice as contended by the petitioner that any good being manufactured now, which fall within the category of Tariff Head of 3808 would qualify for availing the budgetary support. More is required of such good to be qualified for getting the budgetary support. If the provisions of the Scheme Notification are given the meaning as sought to be done by the petitioner, every unit which was eligible to avail exemption under any specified notification and started manufacturing new items after 01.07.2017 would claim to be eligible for budgetary support under the new Scheme, which would result in the creation of uneven playing field in respect of new units which start production/clearance of similar products but would not be entitled for the benefit of budgetary support - the respondents have clearly mentioned that goods under Tariff Headings 38089113, 38089199, 38089290, 38089340, 38089350, 38089390, 38089910 and 38089990 manufactured after 01.07.2017, were not manufactured/cleared by the petitioner prior to 01.07.2017 and as such there is no question of availing excise duty exemption prior to 01.07.2017 in respect of these goods. As these goods were not manufactured earlier and consequently, no exemption of excise duty was availed in respect of these goods, these goods are not eligible for budgetary support. The decision taken by the respondents does not suffer from any illegality or arbitrariness which would warrant interference - Petition dismissed.
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2023 (5) TMI 1190
Scope of the supply order placed by the PSU on the manufacturer - impact of the Central excise exemption scheme - area-based exemptions - Refund of Excise Duty under MODVAT Scheme - special conditions of the purchase orders placed by the SICOP, challenged - It was pleaded that since the SSI Units, which had been earlier placed the supply orders and the writ petitioners formed a single class and, therefore, there could not have been different terms and conditions of supply incorporated in the supply orders placed with the writ petitioners - HELD THAT:- The plea of discrimination raised by the writ petitioners is predicated on the ground that in the supply orders issued by SICOP for purchase of AAC/ACSR conductors with the local manufacturers as well as two outside manufacturers, there was no condition akin to Clause 13(v). Specific mention is made of the supply order placed with M/s Jaldara Conductors Pvt. Ltd, Jaipur, and supply order placed with M/S Ashok Transmission Wire Pvt. Ltd, Jaipur, both dated 23rd August, 1986. The writ petitioners also invited our attention to certain supply orders made by SICOP to the local manufacturers in the year 1986 and 1987 to hammer the point that clause similar to Clause 13(v) providing for transfer of benefit under MODVAT scheme to the purchaser(s) was not incorporated in the supply orders issued to such local SSI units. The plea is refuted by the respondents - From the reading of pleadings of both the sides, it clearly transpires that there is no dispute with regard to the fact that the supply orders issued by appellant No. 2 directly to M/S Jaldara Conductors Pvt. Ltd, Jaipur, and M/S Ashok Transmission Wire Pvt. Ltd, Jaipur, dated 23rd August, 1986, did not contain any condition, as is contained in Clause 13(v) of the supply order dated 12th January, 1987 and Class (ii) of purchase orders issued by SICOP in favour of the writ petitioners. These supply orders were directly between appellant No. 2 and the units outside the State. From the reading of these two supply orders, it becomes abundantly clear that these were issued after initiating the process of tenders and receiving offers from the intending suppliers. The rates to be charged for different items of goods like AAC/ACSR and the terms and conditions of the supply were those which were mutually settled between the parties. The supply orders in question issued in favour of the writ petitioners and the supply orders issued in favour of local SSI units and some outside units are not issued simultaneously but pertain to different point of time. In the instant case, the supplies from the writ petitioners were procured by the appellants through SICOP. In the supply order issued by the appellants in favour of SICOP, it was clearly mentioned that the SSI units, who would enter into arrangement with SICOP for supply of AAC/ACSR conductors, would transfer the benefit, if any, received by them under MODVAT scheme - The writ petitioners were aware and entered into contract with their eyes wide open. The SICOP framed the supply order after discussion with the writ petitioners and after having regard to all commercial aspects of the transaction. The writ petitioners accepted the supply orders and made the supplies strictly as per the terms and conditions laid down in the supply orders. However, later on, it seems finding that the appellants had directly placed certain orders with outside units without imposing such conduction, the writ petitioners made representation to the respondents. The representation made by the writ petitioners came under active consideration of the respondents, who, after weighing all pros and cons of the matter, concluded that it was not possible to revoke the condition which was included in the supply orders in consultation with the writ petitioners and more particularly when 80% of the supplies had already been made by the writ petitioners - it is very difficult to say that the writ petitioners herein and the local as well outside manufacturers, who were also given supply orders by the appellants for procurement of certain items, form a single class. Each contractual transaction is independent transaction between two parties. The relationship of two contracting parties is governed by the terms and conditions of the contract. Even in the case of Government, it is very unwise to expect that the State would enter into contracts for supply of various items with various persons by having same and identical terms and conditions. Clause 13(v) of the supply order issued by the appellants in favour of SICOP and Clause (ii) of the special conditions of the supply orders issued by SICOP in favour of the writ petitioners and we find that these clauses incorporated in the supply orders were only as a bargain to seek some discount or concession from the suppliers in lieu of placing bulk supply orders with them without even inviting tenders and making the writ petitioners to compete with outside manufacturing units. The transfer of benefit of refund of excise duty by the writ petitioners to the Purchasing Department i.e., the appellants herein, was part of a bargain struck between the two parties under which one party i.e. SICOP, was to issue the supply orders for procurement of AAC/ACSR conductors in favour of the writ petitioners and the other party i.e. the writ petitioners herein, were to make supplies on the mutually agreed/settled rates of the items with a further benefit to the Purchasing Department in the shape of transfer of benefit of refund of excise duty available to the writ petitioners under MODVAT scheme. There are nothing wrong or unholy in the arrangement. The legal position in this regard is well settled. Unless the Court finds a condition in the contract entered into between the two parties unconscionable, it would be loath to interfere in the matter. The impugned condition is found neither unconscionable nor in violation of any statutory provision. Rather this Court has found this condition a result of negotiations between two contracting parties which ultimately resulted into a concluded contract coming into existence between them. Comparing this contract with other contracts executed at different points of time and even between different parties would not be justified. The plea of discrimination raised by the writ petitioners is thus not supported by any legal or fact situation obtaining in the instant case. The Writ Court has not considered all these aspects and has, without any justification, held Clause 13(v) discriminatory in nature. Clause 13(v) is contained in the supply order issued by the appellants in favour of SICOP and, therefore, there was no privity of contract between appellants and the writ petitioners giving them any cause of action or locus to challenge the said Clause. The Clause (ii) of the special conditions of the supply order which the SICOP issued in favour of the writ petitioners has not been considered, discussed or dealt with by the Writ Court - Clause (ii) of the special conditions is similar and akin to Clause 13(v) and in view of discussion, there are no fault found with Clause 13(v), so is the position with Clause (ii). The writ petitioners have not been able to make out any case of discrimination between them and the outside manufacturers/local SSI units and, therefore, the decision of the Writ Court cannot be upheld - Appeal allowed.
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2023 (5) TMI 1188
Grant of interest on delayed payment of refund under Section 11BB of Central Excise Act - HELD THAT:- The appellant is entitled to interest on the delayed refund in view of the judgement of the Hon ble Apex Court in the case of Ranbaxy Laboratories Ltd. vs. UOI cited [ 2011 (10) TMI 16 - SUPREME COURT] wherein the Hon ble Apex Court has held that liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made. The appellant has filed the refund claim on 28.10.2010 which was finally sanctioned on 31.08.2020 but no interest was granted - Further, as per Section 11BB of the Act, the interest is payable after the expiry of 3 months from the date of receipt of application. Therefore, in this case, the appellant is entitled to interest on delayed payment from 27.01.2011 to till date of credit to the account of the appellant at the rate of 6% as per the statute. The original authority is directed to compute the amount of interest and pay the same within the period of 2 months from the date of receipt of this order - Appeal allowed.
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2023 (5) TMI 1187
Wrong availment of input tax credit of amount paid on fully exempted goods as per Sl. No. 90 of Notification No. 04/2006-C.E. dated 01.03.2006, as amended - main contention of the Department is that payment of duty at concessional rate without availing exemption for their first clearances of 3,500 M.T. is violative of the provisions of Explanation to sub-section (1A) of Section 5A of the Central Excise Act, 1944. Whether the principal manufacturer is eligible to avail exemption as per Notification No. 04/2006-C.E. dated 01.03.2006 under Sl. No. 91 and clear the goods on concessional payment of duty? - whether it is mandatory to avail nil rate of duty as provided under Sl. No. 90 and consequently, whether the appellant herein is eligible for availment of CENVAT Credit of the duty paid by the principal manufacturer? HELD THAT:- In the case of M/S. KOVAI MARUTHI PAPER AND BOARDS, M/S. SARASWATHI UDYOG INDIA LTD, SHRI RAM CARTONS, M/S. SRIVARI PACKAGING INDUSTRIES VERSUS CCE, SALEM AND CCE, SALEM VERSUS M/S. SARASWATHI UDYOG INDIA LTD., M/S. KOVAI MARUTHI PAPER AND BOARDS [ 2018 (5) TMI 474 - CESTAT CHENNAI] , the Chennai Bench of the Tribunal had examined whether the principal manufacturers should compulsorily avail the exemption under Sl. No. 90 of the said Notification which prescribes nil rate of duty. The Tribunal had followed the decision in the case of BALKRISHNA PAPER MILLS LTD, LAXMI BOARD AND PAPER MILLS LTD, COMMISSIONER OF CENTRAL EXCISE, THANE-I VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE I AND LAXMI BOARD AND PAPER MILLS LTD [ 2015 (11) TMI 210 - CESTAT MUMBAI] wherein it was held that an assessee cannot be forced to avail the nil rate of duty provided under Sl. No. 90 of the Notification. The Tribunal in the case of M/S. SRIPATHI PAPER BOARDS VERSUS CCE ST, TIRUNELVELI [ 2018 (9) TMI 891 - CESTAT CHENNAI] had occasion to analyse a similar issue, wherein it was decided that The first condition is that the exemption is available for the clearance of first 3500 MTs and the second condition is that the exemption is not applicable to a manufacturer who avails exemption under Notification No. 8/2003-CE dated 01.03.2003. The nil rate of tax is therefore available subject to the satisfaction of both the above conditions and appeal allowed. The impugned order set aside - appeal allowed.
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CST, VAT & Sales Tax
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2023 (5) TMI 1189
Production of C-Forms - Seeking return of amount recovered consequent to such communication in excess of 30% of the demand along with interest - whether this Court must dispose of the petition with only orders on the petitioner s grievance as against the communications dated 27.10.2020 in order to enable effective and complete adjudication? HELD THAT:- If the law does not prohibit multiple assessments under circumstances and such circumstances could include the subsequent production of statutory C-forms, the petitioner should not be exposed to the travails of multiple proceedings. This Court must also consider the fact that the department has realised the entire demand as way back as in the month of November 2020. If the petitioner is permitted to produce the Statutory C-Forms and the fourth respondent is 1 Sri Hema Kumar K, learned Additional Government Advocate also submits that the amount is realised only after the lapse of the appeal period as against the order dated 18.11.2020. directed to reconsider assessment the petitioner s grievance not just against the realisation of the demand but also framing of assessment, there would complete adjudication. As such, the petitions must be disposed of quashing the orders dated 18.09.2020 by the fourth respondent with liberty to both the parties and authorities to place a certified copy of this order before the fifth respondent for disposal of the appeals in Nos. 357087702 and 327087703 consequent to this order. The petitions are disposed of quashing the fourth respondent s orders dated 18.09.2020 and consequentially, the assessment proceedings are restored to the fourth respondent for reframing with due opportunity to the petitioner to file Statutory C-Forms.
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Indian Laws
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2023 (5) TMI 1233
Auction - rejection of bid - Disqualification of petitioner to participate in the tender/auction process - seeking to issue direction to opposite party no.4 to treat the bid of the petitioner as valid and reconsider the entire tender process from the stage of considering the technical bid afresh and award the tender in favour of the petitioner within a stipulated period. HELD THAT:- There is no dispute that the petitioner had submitted his bid quoting higher price of Rs.685/-and also furnished a letter of the bank without incorporating the bank guarantee as required under Rule-27(4)(iv) of the OMMC Rules, 2016. Once the bid submitted by the petitioner was not incorporated by the bank guarantee or the previous year s income tax return, it was defective one and cannot be entertained as per the tender notice. It was also clarified in the tender notice that in absence of any documents, as enumerated in clause-1 to 14, the application submitted by the bidder would not be taken into consideration. Therefore, fully knowing the conditions stipulated in the tender notice, the petitioner should not have filed this writ petition claiming consideration of his bid on the ground that he had quoted higher price than opposite party no.5. In TIRUMALA TIRUPATI DEVASTHANAMS VERSUS K. JOTHEESWARA PILLAI (D) BY LRS OTHERS [ 2007 (5) TMI 594 - SUPREME COURT] , the apex Court held that the principle on which the writ of mandamus can be issued are well settled and referring to BIHAR EASTERN GANGETIC FISHERMEN COOPERATIVE SOCIETY LTD. VERSUS SIPAHI SINGH [ 1977 (9) TMI 114 - SUPREME COURT] , the apex Court observed that The chief function of a writ is to compel performance of public duties prescribed by statute and to keep subordinate tribunals and officers exercising public functions within the limit of their jurisdiction. It follows, therefore, that in order that mandamus may issue to compel the authorities to do something, it must be shown that there is a statute which imposes a legal duty and the aggrieved party has a legal right under the statute to enforce its performance. In view of the ratio decided in aforementioned judgment, it is made clear that writ of mandamus can be issued where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that officer to discharge the statutory obligation. Furthermore, a writ of mandamus can be issued to compel the authorities to do something and for that it must be shown that there is a statute which imposes a legal duty and the aggrieved party has a legal right under the statute to enforce its performance - As such, the same is absolutely absent in the present case in view of the fact that the petitioner having not submitted his bid along with bank guarantee, as required in terms of the conditions stipulated in the advertisement and he has not discharged his duty in terms of Rule-27(4)(iv) of OMMC Rules, 2016 read with the conditions stipulated in the advertisement. If the tender notice specifies certain conditions and the same have not been adhered to, the bid submitted by the petitioner cannot be taken into consideration. Therefore, the Tahasildar, Jamda is well justified in rejecting the bid of the petitioner, which has been confirmed by the Sub-Collector, Bamanghaty, Rairangpur in appeal. Therefore, this Court is not inclined to entertain this writ petition. The writ petition merits no consideration and the same is hereby dismissed.
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