TMI Tax Updates - e-Newsletter
June 18, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Procedure relating to sanction, post-audit and review of refund claims - Guidelines issued to ensure uniformity in issuance of speaking order for refund - Details required for all category of refund claims, Additional details in case of the refund of accumulated ITC and IGST, Additional details in case of refund deemed export, Additions details in case of refund of excess balance in cash register, Additions details in case of refund of all other cases
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GST:
Scope of Advance Ruling application - Since the petitioner has not paid GST @ 18% and appears to be contesting the aforesaid notice, therefore, the issue is treated to be pending before the Authority under the GST/SGST Act, 2017 hence, Authorities have rightly declined to grant advance ruling to the petitioner as the petitioner did not approach in advance before the Authority for obtaining the ruling. - HC
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GST:
Maintainability of petition - availability of alternative remedy of appeal - Jurisdiction of DRI - if an order or action of an officer is without jurisdiction or there is a violation of principle of natural justice or constitutional validity of a provision of law is involved and prima facie the petitioner has been able to make out a case that the issue involved in this case is the jurisdiction of the officer concerned who has exercised the power of a GST Officer and since interpretation of several provisions of law and notifications are involved, this writ petition cannot be thrown out at the motion stage on the ground of availability of alternative remedy and this writ petition has to be heard and decided on merit. - Interim relief granted - HC
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GST:
Maintainability of appeal - time limitation - Cancellation of GST registration of petitioner - There is no material available on record to establish as to when the order passed by the Deputy Commissioner Sales Tax was communicated to the petitioner. That was the crucial fact for being ascertained as it would be that date from which the period of limitation for preferring the appeal would have commend. - Matter restored before the appellate authority - HC
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GST:
Search and seizure - validity of proceeding initiated under Section 67 of the Act - if the said Panchanama is perused, it is evident that on the date of search itself, the amount of tax and a penalty was deposited by the petitioner as discrepancies were found in the stock and thus there was no question of any kind of seizure. Moreover, there were independent witnesses as well as the petitioner own representatives who did not raise any objection as regards search, thus, filing of the application before respondent No.5 to remeasure the stock was an afterthought. - Petition dismissed - HC
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GST:
Cancellation/suspension of registration of petitioner - delay of 865 days in filing appeal - The limitation under Section 107 of the Act of 2017 is three months which is evident from the perusal of the statutory provision contained in Section 107 of the Act of 2017. However, Section 29 of the Act of 2017 is entirely different and only deals with the application for revocation of cancellation of registration. - The reasoning given by the lower Appellate Authority are just and proper. Circular issued by the CBIC is of no assistance to petitioner inasmuch as the same only deals with Section 29 of the Act of 2017 and not with Section 107 of the Act of 2017 - HC
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GST:
Revocation of cancellation of registration of GST - No reason has been specified in the impugned order. Reasons are soul of every order. However, brief it may be, the order must reflect an application of mind of the authority. Due to the absence of any reasoning reflected in Ext.P11, notwithstanding the merits or demerits of the contentions raised by both sides, Ext.P11 cannot stand the test of scrutiny of law. - HC
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GST:
Levy of GST - sending goods/ raw material/ capital goods from one unit to other - Existing and new unit (situated within the same state) would have same GSTIN - Being same GSTIN of both the units (present & new unit), there is no occurrence/constitution of 'supply' in respect of movement of raw material, semi-finished, finished, capital goods between these two units within the state. Therefore, no liability of GST would arise for such movement between two units working under same GSTIN. - E-way bill is required for inter unit transfer of goods - AAR
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GST:
Classification of supply - Supply of goods or services - composite supply - activities undertaken for implementing various construction/ repair/ renovation/ addition/ alteration projects by GMVN Ltd. for Central Government, State Government, Local Authority or Governmental Authority - on the basis of the two works contract, generalized view cannot be in respect of to any other work/ contract, by applying the same yard stick. - the consideration is in the form of grants and hence, it is held that the benefit of exemption is available to the applicant in respect of these two works. - AAR
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GST:
Classification of services - rate of GST - Intermediary services - Overseas Commission Agent located outside India - In the present case, the import of services shall be treated as inter-state supply of services and the same is chargeable to IGST under reverse charge i.e. service recipient located within Indian territory has to pay the tax. Since the transaction is related to an intermediary service which is out of the ambit of ‘import of services’ as discussed in foregoing paras, accordingly we observe that GST under reverse charge is not payable on the same. - AAR
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Income Tax:
Reopening of assessment - Denial of natural justice - non considering assessee stand - The correctness of order under Section 148A(d) is being challenged on the factual premise contending that jurisdiction though vested has been wrongly exercised. By now it is well settled that there is vexed distinction between jurisdictional error and error of law/fact within jurisdiction. For rectification of errors statutory remedy has been provided. - Petition dismissed - HC
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Income Tax:
Maintainability of the order/s u/s. 201 & 201(1A) for failure to deduct tax at source and interest thereon (for the delayed deposit with the Central Government) - The confused and non acceptable system of accounting was being followed - The assessee’s liability to deduct tax at source in respect of the sums under reference being patent and, in fact, admitted - Appeal of the assessee dismissed - AT
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Income Tax:
Allowability of Professional promotion charges - Expenses incurred by Hospitals towards patients referred to hospital by doctors/villagers/RMP’s etc. - the disallowance was made by the AO only on the ground that the said expenditure is hit by the explanation to Section 37(1) being prohibited. When the genuineness of the expenditure is not doubted then the claim of the assessee cannot be disallowed. - AT
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Income Tax:
TDS u/s 195 - Disallowance of Primary Rate Interface (PRI) Line charges paid to Telecom Companies on account of non-withholding of taxes - Following the decision of High Court, A.O./T.P.O. directed to delete the addition on lease line charges from the hands of the assessee. - AT
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Income Tax:
Revision u/s 263 - case was selected for limited scrutiny - Whether the AO has considered the issue is question - the statement of Reconciliation of 26AS filed by the Appellant is also not sufficient to show that the contract fee has been offered to tax correctly. Clearly, the Assessing Officer has not undertaken necessary inquires/verification during assessment proceedings. The Assessment Order is also silent on these issues and therefore, does not support the contentions of the Appellant. - AT
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Income Tax:
Depreciation - plant and machinery could not be used during the year due to shifting / relocation of plant - Though, the unit could not generate revenue during the year on account of relocation of plant to Panoli, but the fact that the assessee did not earn revenue or did not put the assets to use on account of fact that it was in process of shifting of plant to Panoli, would not, in our view, disentitle the assessee to claim depreciation on plant and machinery forming part of block of assets. - AT
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Income Tax:
Validity of Best judgement assessment u/s 144 - the responsibility of the assessee does not end by merely appointing a Counsel. The assessee necessarily needs to ensure and make available all necessary informations to its counsel for enabling him to participate effectively in the hearing. However, in view of the peculiar facts of the present case, considering the oral undertaking given we do not insist on an affidavit of the assessee. Having expressed our displeasure on the lax attitude evident on record, accepting the oral undertaking given, we deem it appropriate to direct a remand. At the same time at this stage we deem it necessary to highlight that a Government Corporation is like any other assessee before the tax authority and cannot be allowed to plead that on this count it be given a preferential treatment and be allowed to escape the responsibilities of representing their case before the other governmental authorities including the tax authorities. - AT
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Income Tax:
Revision u/s 263 by CIT - assessee had paid a sum towards electricity charges in cash which are dis-allowable u/s 40A(3) - during the course of assessment proceedings, the AO did not verify certain details which in our view should have been done in order to assess the correct taxable income of the assessee. Accordingly, in a considered view, the Principal CIT has not erred in law and facts in setting aside the assessment order under s. 263 of the Act since the same is erroneous and prejudicial to the interests of the revenue. - AT
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Income Tax:
Assessment of trust - Application of Maximum Marginal rate @ 30% - To be treated as AOP u/s 164 or not - As such subsection (2) of section 164 of the Act provides to charge the tax on the part of income which is not exempt treating the same as income of the Association of persons. However, in the case on hand, the trust before us is not eligible for exemption under section 11 of the Act for the year under consideration. Therefore, the same cannot be treated as Association of persons in the manner as provided under subsection (2) of section 164 of the Act. - AT
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Customs:
Levy of penalty on the Director of Company - The adjudication order also is fallacious because the entire order proceeds on the basis that show cause notice has been given to the company, personal hearing has been given to the company, penalty has been imposed on the company but penalty is attempted to be recovered from the Director without any basis being laid in the adjudication order. - Impugned order and penalty set aside - HC
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Customs:
Jurisdiction - power of DRI to issue SCN - Proper Officer - Officers from Group-B who are already from the Customs Department can be appointed as “Officers of Customs”. Similarly, the Officers of Directorate of Revenue Intelligence (DRI) are appointed as “Officers of Customs” under notification issued under Section 4(i) of the Customs Act, 1962 - Thus, under Section 6 of the Customs Act, 1962, the powers and functions(duties) of the Board and/or “Officers of Customs” specified in Section 5 read with Section 4 and notifications issued there under to implement the same can be entrusted on these officers. - The challenges to the impugned Show Cause Notices and the Orders in Original on the strength of the decision of the Hon'ble Supreme Court in M/S CANON INDIA fails - HC
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Indian Laws:
Dishonor of Cheque - legally enforceable debt or not - They altered the terms of their contract in respect of payment of money that it would be paid by the accused only after possession of the purchased land was handed over to him by the complainant. Such novation is permissible under Section 62 of the Indian Contract Act, 1872. But the complainant has suppressed the said facts and brought a new story through her complaint petition - nless the complainant could show that possession was duly handed over after registration of those sale deeds and thereafter the cheque was deposited by her, she cannot claim any legally enforceable debt in her favour to be discharged by the accused. - HC
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Indian Laws:
Dishonor of Cheque - vicarious liability of authorized signatory - There is no denial that stop payment was made. A plea has also been taken that Gurucharan Singh, who has signed the Cheque was neither Director nor authorized signatory of the Company on the date of issuance of Cheque. But nothing has been placed before this court in support of this plea and disclosed as to who was the authorized signatory and as to how and why the applicants were not responsible to the Company for conduct of the business of Company, whereas the applicant no.1 is the Company and applicants no.2 to 4 are the Directors of the Company. Therefore, it can not be said that they are not responsible. - HC
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IBC:
Initiation of CIRP - All the projects of Corporate Debtor (Real Estate developer i.e Supertech Ltd.) or specified project to be proceeded against - In ‘CIRP’ Process, Project-Wise Resolution to be started as a test to find out the success of such Resolution. Keeping an eye regarding construction and completion of the projects, it is opined that an Interim Order dated 12th April, 2022 staying the constitution of CoC be modified to the extent that CoC be constituted for the Eco Village II Project only with all Financial Creditors including Financial Creditors/Banks/Home Buyers. - AT
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Service Tax:
Rejection of declaration filed under SVLDRS - The case of the petitioner squarely falls under the exception given in Section 125(1)(e) of the Act as the petitioner was subjected to an enquiry/ investigation and the amount of duty involved in the said enquiry or investigation/ audit had not been quantified on or before the 30th day of June, 2019 - the petitioner is therefore not entitled to settle the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme. It has been rightly rejected - HC
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Service Tax:
Rectification of mistake - digging of borewell for the farmer/ agriculturist for the purpose of irrigation - exemption from Service tax or not - The present rectification of mistake application is without merit and is in the nature of an attempt to seek view of the final order of this Tribunal, which is not permissible. - AT
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Central Excise:
Interest on delayed refund - Extended Period of limitation - Section 6 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and section 11BB of the Central Excise Act, 1944 - The order of refund was passed within the extended time limit and, therefore, is saved by Section 6 of the 2020 Act from being subjected to the rigors of Section 11BB of Central Excise Act - It is well settled that Tax Laws are to be interpreted strictly in terms of the terminology employed by legislature. - HC
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Central Excise:
Extended period of limitation - suppression of facts or not - The belief of an assessee may be right or wrong but it is incumbent on the department to ascertain the correctness of the eligibility of the exemption notification. Therefore, by declaring the goods under exemption there cannot be a charge of suppression of fact on the part of the appellant. - AT
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Central Excise:
Valuation - inclusion of TCS collected from the buyer over and above the price of the goods - In the present case the TCS is collected not as a additional consideration but explicitly as tax and same is deposited to the income tax department, therefore, it cannot be said that the amount of TCS belongs to the appellant - the amount of TCS cannot be considered as additional consideration flowing from the buyer to the appellant accordingly, the same is not includable in the assessable value for charging Excise Duty - AT
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VAT:
Validity of assessment order - levy of interest on belated payments of taxes - Needless to say, if the admitted tax has been paid in time, the question of levying interest in 2019 for the remainder of the taxes, after a period of four years when the tax was paid, will not arise as the authorities are expected to have raised demands of interest concurrent with the tax demand or in any event, within a reasonable period of time thereafter. - HC
Articles
Notifications
News
Case Laws:
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GST
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2022 (6) TMI 768
Levy of IGST - Ocean Freight - services provided by a person, located in a non-taxable territory, by way of transportation of goods on a vessel from a place outside India up to Customs station of clearance in India - HELD THAT:- On perusal of judgement of Hon ble Supreme Court in UNION OF INDIA ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR [ 2022 (5) TMI 968 - SUPREME COURT] , while agreeing with the view taken by the High Court in MOHIT MINERALS PVT LTD VERSUS UNION OF INDIA 1 OTHER [ 2020 (1) TMI 974 - GUJARAT HIGH COURT] , held to the extent that a tax on the supply of a service, which has already been included by the legislation as a tax on the composite supply of goods, cannot be allowed. Appeal dismissed.
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2022 (6) TMI 767
Scope of Advance Ruling application - Classification of services - rate of tax to sub-contractor - sub-contractor executes works contract pertaining to dam, wherein the principal contractor is liable for tax @12% for the period from 22.01.2017 to 25.01.2018 - HELD THAT:- Sub section 2 of Section 97 provides the questions on which the advance ruling can be sought under this Act. Section 98 provides the procedure for receipt of the application. The first proviso to Sub-section 2 of section 98 is coming in the way of the petitioner and relying on such provision the Authority as well as Appellate Authority have declined to grant advance ruling to the petitioner - According to the proviso, the authority shall not admit the application where the question raised in the application is already pending or decided in proceedings under any of the provisions of this Act. The Petitioner approached the Authority for obtaining the advance ruling only after a search conducted on 20.03.2020 in which the evasion of SGST was found which has resulted in issuing a show-cause notice dated 21.05.2020. Since the petitioner has not paid GST @ 18% and appears to be contesting the aforesaid notice, therefore, the issue is treated to be pending before the Authority under the GST/SGST Act, 2017 hence, Authorities have rightly declined to grant advance ruling to the petitioner as the petitioner did not approach in advance before the Authority for obtaining the ruling. Petition dismissed.
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2022 (6) TMI 766
Maintainability of SCN - refund of accumulated credit of compensation cess - principal grounds of challenge to the show cause notices and subsequent orders are that the refund despite being due to the petitioner in law has been wrongly denied and the consequential orders of refusal to refund are non-speaking - violation of principles of natural justice - HELD THAT:- The claim for refund has been declined by assigning reasons which may be cryptic on bare perusal but are sufficient to enable the assessee to know the exact cause for rejection of the claim for refund. The reasons assigned could have been more elaborate but that by itself cannot render the impugned orders vitiated. The reasons assigned are sufficient to save the orders from being sacrificed at the alter of natural justice (non-speaking order). Pertinently, the reasons assigned cannot categorize the impugned orders to be non-speaking since they do not dissuade the assessee from knowing the mind of the adjudicating authority or dissuading from filing an appeal. Certain other reasons have been assigned by the Revenue to support impugned orders, which this Court declines to go into in the face of the unavailed alternative statutory remedy of appeal u/S. 107 of the C.G.S.T. Act. Petition dismissed.
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2022 (6) TMI 765
Maintainability of petition - availability of alternative remedy of appeal - Jurisdiction of DRI - HELD THAT:- The respondents raised point of maintainability of the writ petition on the ground of availability of alternative remedy by way of an appellate forum but the same is not sustainable for the reason that it is a well settled principle that alternative remedy is not always a bar and particularly when the question of jurisdiction is involved in the writ petition and the writ court is very much empowered to entertain the writ petition, if an order or action of an officer is without jurisdiction or there is a violation of principle of natural justice or constitutional validity of a provision of law is involved and prima facie the petitioner has been able to make out a case that the issue involved in this case is the jurisdiction of the officer concerned who has exercised the power of a GST Officer and since interpretation of several provisions of law and notifications are involved, this writ petition cannot be thrown out at the motion stage on the ground of availability of alternative remedy and this writ petition has to be heard and decided on merit. Prima facie the petitioner has been able to make out a case for an interim order and considering this aspect there will be conditional stay of the impugned adjudication order dated 3rd March, 2022 and subject to deposit of 10% of the demand in question, by the petitioner, within ten days from date and if such payment is made by the petitioner within the time stipulated herein, no coercive action shall be taken against the petitioner for recovery of the demand in question. Petition disposed off.
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2022 (6) TMI 764
Maintainability of petition - availability of alternative remedy of appeal - requirement to comply with the pre-deposit - HELD THAT:- The submission of the learned advocate for the appellant appears to be reasonable because if the appellant had preferred a statutory appeal, he would be statutorily required to pre-deposit 10% of the disputed amount of tax and admittedly close to 20% of the disputed amount of tax has already been recovered. That apart, if any recovery proceeding has been initiated prior to 28th May, 2022, i.e. prior to expiry of the period of limitation for filing a statutory appeal, then such recoveries will have no sanction of law as it would, in effect make the appellate remedy infructuous. Let a soft copy of the affidavit-in-opposition be shared with the learned advocate for the appellant not later than 19th June, 2022 and if the appellant desires to file a reply, the same should be filed not later than 22nd June, 2022. It is thereafter the matter can be listed before the Learned Single Bench for being heard and disposed of. Petition disposed off.
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2022 (6) TMI 763
Violation of principles of natural justice - input tax credit - petitioner submits that Annexure P/1 is conspicuously silent as regards the description of transaction on which the petitioner alleged to have availed the ITC - HELD THAT:- The petitioner was issued a notice dated 11.03.2019 with reference No.83/2019/41-B/21/TRAW-3/152. This notice finds mention in Annexure P/1, which is a notice under Rule 142(1) of the GST Rules. It is also important to note that the petitioner did not file any reply to Annexure P/1, dated 13.032019. If, the contents of paragraph-6 of the petition are taken into consideration, the same would reveal that the petitioner did not file any reply, but has made an attempt to demonstrate that he sought documents from the respondent No.2 to have some clarity on the issue, but those documents were not supplied to the petitioner and hence for want of those documents, the petitioner could not file reply. The explanation so put forth by the petitioner has no substance inasmuch as, neither there is any reply nor there is any application filed by the petitioner on the record by which he sought documents as well as detail of the transaction from the respondents. Whether the petitioner was aware about the transactions which were taken note of by the respondent to issue a notice under Section 74 of the Act of 2017? - HELD THAT:- If the entire, appeal is perused the same would reveal that the petitioner having already submitted its reply dated 08.05.2019 (Annexure R/2) disclosing the transactions with M/s V.K. Enterprises, Chhatarpur, failed to mention the facts as regards transactions with M/s V.K. Enterprises, Chhatarpur in his memorandum of appeal. Thus, apparently, the petitioner has made futile attempt to lay foundation by raising a ground that in the notice contained in Annexure P/1, he was not informed regarding the transactions, which in the eyes of the respondents were questionable or doubtful - the writ petition filed by the petitioner is grossly misconceived. The grounds raised in the entire petition are ill founded. Petition dismissed.
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2022 (6) TMI 762
Maintainability of appeal - time limitation - Cancellation of GST registration of petitioner - Section 107 (1) of GST Act - HELD THAT:- As per section 107 (1), the appeal could be preferred within a period of three months. The petitioner has contended that no notice was issued to him by the Deputy Commissioner Sales Tax. In any case no such notice was served upon him and he acquired knowledge of the fact of passing of the order from other source hence could not prefer the appeal within time - The period of limitation for preferring the appeal as per Section 107 (1) is three months from the date on which the decision or order is communicated such person. The appeal preferred by the petitioner has been dismissed by merely observing that the same has been preferred after a period of three months from the date of passing of the order which reason cannot be sustained since appeal could be preferred within three months from the date on which the order was communicated. There is no material available on record to establish as to when the order passed by the Deputy Commissioner Sales Tax was communicated to the petitioner. That was the crucial fact for being ascertained as it would be that date from which the period of limitation for preferring the appeal would have commend. The matter is remanded back to the appellate authority Joint Commissioner of Sales Tax, Indore for reconsideration of the matter and decision afresh - Petition allowed by way of remand.
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2022 (6) TMI 761
Search and seizure - validity of proceeding initiated under Section 67 of the Act - HELD THAT:- The crux of the matter lies in a document in the present case I.e. the Panchnama which has been produced on record by the petitioner itself. The same reveals that on 25/01/2022 a search team reached the premises of the petitioner and at the premises there were two persons namely Anil Kumar Dahiya and Arvind Patel including nephew of proprietor of the petitioner s firm Arihant Jain were available and signatures of all these persons were obtained while carrying out the Panchanama and then the stocks were checked there only. It was found that there was discrepancies in the stock which attracted the levy of tax, hence, the petitioner out of his own free will deposited the amount of tax as well as penalty of Rs.38,46,195/-. Thus, if the said Panchanama is perused, it is evident that on the date of search itself, the amount of tax and a penalty was deposited by the petitioner as discrepancies were found in the stock and thus there was no question of any kind of seizure. Moreover, there were independent witnesses as well as the petitioner own representatives who did not raise any objection as regards search, thus, filing of the application before respondent No.5 to remeasure the stock was an afterthought. There is no infirmity as far as the order/letter impugned are concerned and accordingly the present petition being devoid of merits stands dismissed.
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2022 (6) TMI 760
Cancellation/suspension of registration of petitioner - delay of 865 days in filing appeal - time limitation - Section 29 and Section 107 of CGST Act - HELD THAT:- Section 29 of the Act of 2017 is confined to an application for revocation against cancellation of registration whereas Section 107 of the Act of 2017 deals with the provisions of Appeal including limitation to file appeal. The limitation under Section 107 of the Act of 2017 is three months which is evident from the perusal of the statutory provision contained in Section 107 of the Act of 2017. However, Section 29 of the Act of 2017 is entirely different and only deals with the application for revocation of cancellation of registration. Perusal of circular dated 25/06/2020 reflect that it is unambiguous and in no uncertain terms only deals with Section 29 of the Act of 2017 and not with Section 107 of Act of 2017. Apparently, in the present case the appeal of the petitioner which was moved under Section 107 of the Act of 2017 has been rejected by the Appellate Authority inasmuch being time barred. It is further observed that the directive of Apex Court were issued subsequently upon out break of Covid-19 Pendemic in the year 2020 whereas in the present case, the registration was canceled on 04/02/2019 and the appeal was preferred on 16/09/2019. The reasoning given by the lower Appellate Authority are just and proper. Circular dated 25/06/2020 (Annexure P/6) is of no assistance to petitioner inasmuch as the same only deals with Section 29 of the Act of 2017 and not with Section 107 of the Act of 2017 - petition dismissed.
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2022 (6) TMI 759
Detention of petitioner's vehicle alongwith the goods - expired E-way bill - HELD THAT:- There will be a direction to the first respondent to complete the adjudication following the detention of goods pursuant to Ext.P4 within one month from the date of receipt of copy of this judgment. In the meantime, the first respondent shall release the goods covered by Ext.P1 and the aforesaid vehicle on the petitioner executing a bond for the value of the goods in FORM GST INS-04 and furnishing security in the form of Bank Guarantee equivalent to the amount of applicable tax, interest and penalty payable. Petition disposed off.
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2022 (6) TMI 758
Revocation of cancellation of registration of GST - non-application of mind - application rejected without any detailed reasoning - violation of principles of natural justice - HELD THAT:- Petitioner had filed the application for revocation of cancellation in a very detailed manner. However, the application is seen rejected in one sentence. Nothing further needs to be elaborated as to the non-speaking nature of the order under challenge. No reason has been specified in the impugned order. Reasons are soul of every order. However, brief it may be, the order must reflect an application of mind of the authority. Due to the absence of any reasoning reflected in Ext.P11, notwithstanding the merits or demerits of the contentions raised by both sides, Ext.P11 cannot stand the test of scrutiny of law. The 1st respondent is directed to pass fresh orders on Ext.P8 application filed by the petitioner - petition disposed off.
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2022 (6) TMI 757
Levy of GST - sending goods/ raw material/ capital goods from one unit to other - Existing and new unit (situated within the Rajasthan state) would have same GSTIN - comprise supply of goods or services or not - value is to be considered for E-way bills if that is to be issued? - applicability of provisions of Job-work - Input Tax Credit - For purchase of raw material/ capital good, separate factory address required or not? - For invoice of clearance of goods does the applicant have to mention both addresses or the address of the concerned unit from which the goods are cleared? Registration of new unit (situated within the Rajasthan state) and leviability of GST on movement of goods/raw material/ capital goods from present unit (i.e. F-668,670 9F2, VKI Area, Jaipur) to new unit and vice versa - HELD THAT:- As far as supply of goods or services or both between these two establishment of applicant is concerned, it is found that movement of goods/raw material/ capital goods from present unit (i.e. F-668,670 9F2, VKI Area, Jaipur) to new unit and vice versa does not constitute 'supply, as these units are not distinct person to each other due to single registration - In the present case, for a transaction to be a 'supply', the essential criteria to be satisfied in the involvement of consideration, with the only exceptions being the activities mentioned in Schedule I and import of services. Thus, in the present case being unit transfer of raw material, semi-finished, finished, capital goods; there no consideration is involved and the activity is neither specified in Schedule I nor in the nature of import of services, the activity i.e. movement of raw material, semi-finished, finished, capital goods between the two units under same GST registration number shall not be a 'supply' under the provisions of the GST Act, 2017 - in the present case no liability of GST would arise for such of raw material, semi-finished, finished, capital goods between two units within the state and working under same GSTIN. Consideration of value for E-way bills if that is to be issued for transfer of goods from one unit to other - HELD THAT:- The applicant is not exempted to generate e-way bill for the movement of capital goods, raw material or finished goods to be made between their two units. Further, as far as value for E-way bills if that is to be issued for transfer of goods from one unit to other is concerned, we find that being not a 'supply', no GST would attract on such movement, therefore there will not be any transaction for sale, mortgage, transfer of property involving any kind of value between the two units. Thus, for transfer of the goods between two units they would have to take a value of such goods as explained in Explanation-2 to Sub-Rule (1) of the Rule 138 of the CGST Rules, 2017 and issue an E-way bill for such transfer (if required depending on value of such transferred goods). Whether movement of raw material/capital goods/ semi-finished goods for further processing would the provisions of job-work apply or they can send these goods on simple internal challan? - HELD THAT:- As the question of the applicant does not fall under the category mentioned in the sub section (2) of the section 97 of the CGST Act, 2017 therefore, no answer is being given. Whether applicant would require to issue E-way bill for such movement of goods from our one unit to other if the value of the goods to be moved is higher than the threshold limit required for issue of E-way bill in normal course? - HELD THAT:- As per sub section (2) of the section 97 of the CGST Act, 2017, the applicant can seek the advance ruling on the questions as mentioned in sub section (2) only. As the question of the applicant does not fall under the category mentioned in the sub section (2) of the section 97 of the CGST Act, 2017 therefore, no answer is being given. Whether applicant can use ITC for the goods/raw material/capital goods received in one factory for payment of GST for the clearance made from second unit? - HELD THAT:- The applicant would be eligible for ITC credit in respect of goods and services received by them subject to condition and restrictions of the chapter V Input Tax Credit. However, it is also mentioned in the provisions that ITC would be credited to their electronic credit ledger. The situation arising in the case is that since applicant would be having single GST No. for both the units then as per the section 16(1) there would be only one ledger for the ITC credit - all eligible Input Tax Credit that is claimed by a registered person in the GST returns (GSTR-2 or GSTR-3B) reflects in Electronic Credit Ledger. Credit in Electronic Credit Ledger can be used only for payment of tax. The electronic credit ledger shall be maintained in FORM GST PMT-02 for each registered person eligible for input tax credit on the common portal and ever)' claim of input tax credit will be credited to this ledger. The amount available in the electronic credit ledger can be used for making any payment towards output tax. The applicant would be able to use the eligible credit of inputs and capital goods for payment of GST for the goods cleared from other unit as there is only one electronic ledger for the credit of both the units having same GST number. Hence, applicant would be able to use this credit for discharging their GST liability from either of the units. Under which related to factory address in respect of purchase of raw material by these units? - HELD THAT:- As per sub section (2) of the section 97 of the CGST Act, 2017, the applicant can seek the advance ruling on the questions as mentioned in the sub section (2) only - As the question of the applicant does not fall under the category mentioned in the sub section (2) of the section 97 of the CGST Act, 2017 therefore, no answer is being given. Determination of address of units on the invoice - HELD THAT:- As per sub section (2) of the section 97 of the CGST Act, 2017, the applicant can seek the advance ruling on the questions as mentioned in the sub section (2) only - As the question of the applicant does not fall under the category mentioned in the sub section (2) of the section 97 of the CGST Act, 2017 therefore, no answer is being given.
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2022 (6) TMI 756
Classification of supply - Supply of goods or services - composite supply - activities undertaken for implementing various construction/ repair/ renovation/ addition/ alteration projects by GMVN Ltd. for Central Government, State Government, Local Authority or Governmental Authority the consideration for which is received in the form of grants - exemption from GST or not - applicability of N/N. 12/2017- Central Tax (Rate) (As amended) dated the 28th June, 2017 - HELD THAT:- The applicant has received payment for execution of a specific work i.e. the type and scope of the work is predetermined, hence, we hold that money transferred by the Government into the accounts of the applicant in the form of grant is a consideration under the provision of CGST Act, 2017, consequently the activity undertaken by the applicant for the State/Central Government or local authority amount to supply as defined in section 7 of the CGST Act, 2017 - the applicant in their application under reference has accepted on their own that the amount received is consideration, the activity undertaken by them for the Government amount to Supply as defined in section 7 of the CGS Act, 2017 and that the work undertaken is a service and hence not under dispute. Whether the works referred to in by the applicant is supply of goods or supply of services? - HELD THAT:- It is found from the definition of scope of supply, Composite supply and works contract and the terms of reference appearing in the work allocated to the applicant namely construction of 'Shaheed Dwaf at Banjarawala, Dehradun and construction of 'Creation of barrier free environment for PWDs and tourist rest houses in various district of Uttarakhand State', involves civil construction work viz. construction, repairs, etc. and hence falls under the definition of works contract service - on the basis of the two works contract, generalized view cannot be in respect of to any other work/ contract, by applying the same yard stick. Applicability of GST on the grants - HELD THAT:- By virtue of Notification No. 12/2017-CT (Rate) dated 28.06.2017 any supply of services by a Government Entity to Central Government, State Government' Union territory, local authority or any person specified by Central Government, State Government, Union territory or local authority is exempt from payment of GST, if the consideration received from Central Government, State Government, Union Territory or local authority, is in the form of grants. We find that from the wordings of the said notification it is clear that exemption is available, only, if the consideration received is in the form of grants and has to be utilized for the intended purpose only. The litmus test in such cases would be the character of the consideration and if it qualifies to be a grant then and only then the benefit under the provisions of Notification No. 12/2017-CT (Rate) dated 28.06.2017, is available. In the instant case it is found that in the letter No. 41/VI/2021-80(51) 2020 of the Secretary, Uttarakhand Government the word 'Anudaan' at Para 16 and in the letter dated 16.09.202, Department of Empowerment of Persons with Disabilities (Divyangjan), Ministry of Social Justice and Empowerment, GOI, Para 3 specifies that 'Purpose for which this grant is sanctioned: - creation of barrier free environment for PwDs in 44 No. Tourist Rest House in 07 Districts of Uttarakhand State under administrative charge of GMVNL, Dehradun under the SIPDA scheme during 2020-21 , establish that the consideration is in the form of grants and hence, it is held that the benefit of exemption Notification No. 12/2017-CT(Rate) dated 28.06.2017 is available to the applicant in respect of these two works.
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2022 (6) TMI 755
Classification of services - rate of GST - Intermediary services - Overseas Commission Agent is covered within the definition of the term intermediary as provided under section 2(13) of the IGST Act, 2017 or not - import of services or not - Levy of GST on RCM basis under section 5(3) of the IGST Act, 2017 on commission paid to the Overseas Commission Agent. Overseas Commission Agent is covered within the definition of the term intermediary as provided under section 2(13) of the IGST Act, 2017 or not - HELD THAT:- Any person, who enables the supply of goods/services between two persons, is considered as intermediary. However, where a person is providing services or supplies of goods on his own account to his customers, It cannot be termed as intermediary. As per the agreement dated 05.03.2021, Mr Bobby Kapoor, has to arrange or facilitate the supply of goods of the applicant to international Market and in return he shall get the commission on agreed terms - on perusal of legal provisions, agreement dated 05.03.2021 other records submitted by the applicant in this regard, it is observed that Mr Bobby Kapoor, a overseas commission agent, fall within the definition of intermediary as provided under section (2)13 of the IGST Act, 2017. Services received by applicant form the Overseas Commission Agent falls within the meaning of the term import of services or not - HELD THAT:- As per facts circumstances, services received by applicant form the Overseas Commission Agent falls within the meaning of the term import of services means the supply of any services where, (i) the supplier of service is located outside India; (ii) the recipient of service is located in India; and (iii) the place of supply of service is in India. On perusal of said legal provisions, it is found that the services can be called as import of services only when it is satisfied all the three conditions mentioned therein. On perusal of records, it is found that the conditions (i) (ii) are satisfied in as much as Mr Bobby Kapoor, supplier of service, is located within India. Now in respect of (iii) condition, section 13 of the IGST Act, 2017 specifically deals with place of supply of a service as to whether a service can be termed as import of service or otherwise. On perusal of section 13 of the IGST Act, 2017 is relevant to the issue in hand which provides that the place of supply of the intermediary services would be the location of the supplier of such services (i.e. location of intermediary service provider). Thus the condition (iii) is not satisfied as the place of supply of service is not in India. Thus, the services received by the applicant is out of the ambit of import of services in as much as the condition (iii), is not satisfied in terms of section 13(8)(b) of IGST Act, 2017 as place of supply of service is out of India, since the location of Mr. Bobby Kapoor, is UAE, which is a place outside India. Whether the applicant is required to pay GST on RCM basis under section 5(3) of the IGST Act, 2017 on commission paid to the Overseas Commission Agent? - HELD THAT:- On perusal of section 5 of the IGST Act, 2017, it is found that the said section deals with levy and collection of tax i.e. IGST and section 5(3) of the IGST Act, 2017 provides that the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. In the present case, the import of services shall be treated as inter-state supply of services and the same is chargeable to IGST under reverse charge i.e. service recipient located within Indian territory has to pay the tax. Since the transaction is related to an intermediary service which is out of the ambit of import of services as discussed in foregoing paras, accordingly we observe that GST under reverse charge is not payable on the same.
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Income Tax
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2022 (6) TMI 754
TDS on entire amounts paid to the agent - whether Tribunal committed an error in upholding the decision of the First Appellate Authority and thereby affirming the finding of the Assessing Officer that tax had to be deducted at source even in respect of reimbursements which had been incurred by the agent? - HELD THAT:- Tribunal has approved the factual finding recorded by the First Appellate Authority stating that there is no proof that brokerage and freight charge by consignment agent from the assessee are not loaded with profit and if it had been a case of true reimbursement the consignment would have enclosed the bill drawn by its brokers and transporters and in that case the assessee could have decided the deductibility of TDS from such bills of brokers and transporters without depending on the consignment agent. Further, the First Appellate Authority has recorded that even after an opportunity was given during the appeal proceeding, the assessee could not establish their stand and, therefore, held that amounts of brokerage and freight can be paid by the assessee to consignment agent are the only available criteria to decide the deductibility of tax at source on the payment of brokerage and freight - the terms and conditions of the agreement of consignment sale was taken note of wherein it is stated that the consignment agent is required to remit the entire sale proceeds and depending on the maximum price realized or other such criteria the assessee will pay commission to the consignment agent. Further noting the facts of the case, the Tribunal held that deduction of tax at source under Section 194C is required to be made on any sum paid by the assessee to clearing and forwarding agent and it includes reimbursement of the expenditure. In this regard, the clarification issued by the CBDL was referred to. The decision in DLF Commercial Project Corporation [ 2015 (7) TMI 576 - DELHI HIGH COURT] which was rendered following the decision in CIT vs. Gujarat Narmada Valley Fertilizers Co. Ltd. [ 2014 (4) TMI 235 - GUJARAT HIGH COURT] would be wholly applicable to the facts of the case on hand, wherein the Court had approved the concurrent finding rendered by the First Appellate Authority. The facts of the case on hand has been noted by the CIT(A), who has rendered a categorical finding that the assessee was unable to establish their stand in spite of opportunity granted to them at the appellate stage. Further, in CIT vs. Gujarat Narmada Valley Fertilizers Co. ltd. it has been held that law obliges only amounts which fulfilled the character of income to be subject to TDS. In the case before us, all the two Authorities and the Tribunal have concurrently held that the assessee was unable to produce any document to establish their stand. This Court while exercising jurisdiction under Section 260A of the Income Tax Act cannot be called upon to reexamine the facts or to re-appreciate the tenor and ambit of the document which was placed before the Assessing Officer, CITA and more importantly the Tribunal has noted that the assessee has failed to establish the reimbursement which was pleaded by producing document despite opportunity being given at the appellate stage. No substantial question of law.
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2022 (6) TMI 753
Estimation of income - bogus purchases - ITAT confirmed the addition to the extent of 15% and the entire purchases should have been taken into account - HELD THAT:- As in group appeal [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] in identical fact situation observed that the purchases could not be rejected without disturbing the sales in case of a trader. After observing as above, this Court dismissed the Appeal. Appellant-Revenue fairly pointed out that this decision will apply to the fact of the present case. In light of the observation of the Division Bench as above, the order passed by the Tribunal cannot be faulted. No question of law, therefore, arises for consideration. Appeal dismissed.
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2022 (6) TMI 752
Validity of Reopening of assessment - Scope of new provision section 148A - Validation of notices after quashed by various High Courts - conducting of enquiries or issuance of show-cause notice or passing of order under section 148A - impugned notices have been challenged in the present batch of writ petitions on the ground that the procedure laid down under Section 148A of the Act has not been followed, which has rendered the impugned notices null and void - HELD THAT:- As decided in UNION OF INDIA ORS. VERSUS VERSUS ASHISH AGARWAL [ 2022 (5) TMI 240 - SUPREME COURT] judgments of the several High Courts would result in no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted sections 147 to 151. Finally the Civil Appeals were allowed in part and judgments of the various High Courts have been modified and substituted. In v iew of the decision of the Apex court, the present batch of writ petitions would stand disposed of in terms of the judgment of the Supreme Court in Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] .
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2022 (6) TMI 751
Reopening of assessment - Denial of natural justice - non considering assessee stand - order passed under Section 148A (d) has been raised contending that the order is erroneous in facts having been passed without considering stand of the petitioner - HELD THAT:- As the consistent view is that, where the proceedings have not even been concluded by the statutory authority, the writ court should not interfere at such a pre-mature stage. Moreover it is not a case where from bare reading of notice it can be axiomatically held that the authority has clutched upon the jurisdiction not vested in it. The correctness of order under Section 148A(d) is being challenged on the factual premise contending that jurisdiction though vested has been wrongly exercised. By now it is well settled that there is vexed distinction between jurisdictional error and error of law/fact within jurisdiction. For rectification of errors statutory remedy has been provided. In the light of aforesaid settled proposition of law, we find that there is no reason to warrant interference by this Court in exercise of the jurisdiction under Article 226/227 of the Constitution of India at this intermediate stage when the proceedings initiated are yet to be concluded by a statutory authority. Hence, the writ petition stands dismissed.
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2022 (6) TMI 750
Nature of loss - loss arising out of foreign currency term loan - revenue or capital loss - HELD THAT:- We have perused the case records and noted that foreign currency term loan sanctioned by the bank was by way of conversion of existing rupee term loan and that the FCTL was at concessional rate as compared to the rupee term loan leading to lower interest being debited in the profit loss account. As the assessee has not represented nor made any submission before AO or before CIT(A) or in the statement of facts that in this year, the assessee has claimed forex loss and what is the treatment of any loss or gain arising in future years and whether the Department has accepted the same or not. These facts are not available on record and hence, we presume that the loan taken for purchase of machinery is rightly held by AO as capital loss. We affirm the findings of lower authorities on this issue. Depreciation at the appropriate rate by increasing the cost of the machinery - Alternate claim made by assessee is that in case, the effect is to be given for change in foreign exchange rates on FCTL, obtained by conversion of rupee term loan is considered to be a capital expenditure, the same ought to have been considered as the cost of asset purchased and depreciation should have been allowed on the cost of asset including this forex loss. We direct the AO to allow depreciation on this amount at an appropriate rate. Hence, this alternate claim of assessee is allowed.
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2022 (6) TMI 749
Maintainability of the order/s u/s. 201 201(1A) for failure to deduct tax at source and interest thereon (for the delayed deposit with the Central Government) - The confused and non acceptable system of accounting was being followed - whether income of recipient is exempt from tax or whether tax has been paid by the recipient in view of judgment of Hon'ble Apex Court in Hindustan Cola [ 2007 (8) TMI 12 - SUPREME COURT] ? - HELD THAT:- It is clear that neither before him nor before us there is anything on record to exhibit the income of the payee-societies, much less the whole of it, as exempt u/s. 80P, or even if they have claimed it per their returns of income for the relevant years. Rather, as observed by the ld. CIT(A), the proper course, even in such a case, is for the payees to obtain a certificate of deduction of tax at source u/s. 197 at nil or a lower rate, only which would enable the assessee to either not deduct tax at source or do so at a lower rate. Further, as we see it, it is only where the fact of exemption from tax of the payee s income, which is subject to TDS, is admitted and unqualified, as where it is not hinged by or subject to any conditionality, that perhaps one could argue of non-liability to TDS (inasmuch as the tax deduction provisions would extend only to income chargeable to tax), else not (see G.E. India Technology Centre (P.) Ltd. [ 2010 (9) TMI 7 - SUPREME COURT ] The Apex Court in Hindustan Coca Cola Beverage P. Ltd. (supra) held that a payer may not deduct tax at source where the same stands already deposited by the payee (with the Central Govt.), adducing proof to that effect, though shall be liable to interest for the delayed payment of tax as well as penalty, being the position of law as clarified by the Board itself per it s Circular dated 29/1/1997. The assessee s reliance on the said decision is wholly unevidenced and without merit. The assessee s liability to deduct tax at source in respect of the sums under reference being patent and, in fact, admitted, we have no hesitation in, upholding the impugned order, dismissing the assessee s appeals as not pressed/without merit.
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2022 (6) TMI 748
Exemption u/s 10(10) - receipt of gratuity amount and leave encashment - whether assessee is found to be an employee holding a civil post under a State ? - CIT(A) submitting that the university is an autonomous body - also submitted that only because the employees of said university are treated as government employees they cannot be said to be holding civil post under the state - HELD THAT:- DR was unable to cite any factual distinction or provision of law then one which were considered in DHARAM JEET DAHIYA VERSUS INCOME TAX OFFICER, WARD-1, HISAR based upon another order [ 2017 (6) TMI 165 - ITAT DELHI] 2016 (6) TMI 687 - ITAT DELHI] Thus, respectfully following the settled proposition of law in regard to class of employees to which assessee also belongs, the Grounds are sustained and the appeal is allowed. The impugned order is set aside. The Ld. AO shall allow exemption u/s 10(10) of the Act, to the disputed amount of gratuity received by the assessee, during the instant year..
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2022 (6) TMI 747
Interest on refund u/s.244A of the Act till 11.11.2014 - assessee received refund on 11.01.2014 but it was not provided tax calculation sheet along with the same - HELD THAT:- After receipt of refund cheque, assessee made several requests to the AO for copy of tax calculation sheet but however the AO issued only tax computation sheet only on 10.12.2016. From the tax calculation sheet provided by AO, assessee noted that the interest u/s.244A of the Act on refund was computed only up to 06.01.2014, whereas the assessee is eligible to receive interest u/s.244A of the Act up to the date of refund cheque i.e., 11.11.2014. The assessee moved rectification application before AO which was rejected by AO by citing the decision of Rajasthan High Court in the case of Rajasthan State Electricity [ 2005 (11) TMI 35 - RAJASTHAN HIGH COURT] . Aggrieved, assessee preferred appeal before the CIT(A). The CIT(A) stated that the decision of Hon ble Rajasthan High Court in the case of Rajasthan State Electricity supra is in favour of assessee and also cited the Board s instruction No.7 dated 01.08.2002 and directed the AO to grant interest u/s.244A of the Act on the refund amount up to the date of 11.11.2014. Aggrieved, Revenue is in appeal before the Tribunal. CIT(A) has considered the Instruction No7 of 01.08.2002 issued by the Central Board of Direct Taxes and Circular No.11/2016 dated 24.04.2016, Instruction No.7/2013 dated 15.07.2013 and Instruction No.2/2007 dated 28.03.2007 and also the decisions of Hon ble Supreme Court in the cases of Sandvik Asia Ltd [ 2006 (1) TMI 55 - SUPREME COURT] and CIT vs. HEG Ltd. [ 2009 (12) TMI 35 - SUPREME COURT] and noted that the assessee is entitled for interest on refund u/s.244A of the Act up to the date of actual grant of refund i.e., 11.11.2014. Now, the ld. Senior DR could not controvert the order of CIT(A) despite specific query asked by the Bench. The ld.Senior DR however relied on the order of AO rejecting the rectification application by the AO u/s.154 of the Act. We find no infirmity in the order of CIT(A) and hence, the appeal of Revenue is dismissed.
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2022 (6) TMI 746
Penalty u/s 271(1)(c) - Mandation of sufficient compliance of recording of satisfaction in terms Section 271(1)(c) - assessee had made patently wrong claim of depreciation on residential property and patently wrong claim of deduction of interest which was capitalized in precededing assessment year as revenue expenditure - HELD THAT:- As in the assessment order and penalty order there is apparent ambiguity as to what was the basic fround for penalty. On other hand it is also established that the notice issued u/s 274 r.w.s. 271(1)(c) of the Act was defective as it was not clear as which limb the penalty was levied. Reliance in this regard can be placed on the judgment of Hon ble Bombay High Court in Commissioner of Income Tax -11 vs. Shri Samson Perinchery [ 2017 (1) TMI 1292 - BOMBAY HIGH COURT] - Thus, the ground raised by the assessee by virtue of Rule 27 of the Rules 1963 are sustained and the notice dated 25.02.2013 is held to be invalid and the penalty proceedings order dated 09.02.2015 is set aside. - Decided in favour of assessee.
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2022 (6) TMI 745
Validity of Reopening of assessment u/s 147 - computation of deduction u/s 80M - Whether Tribunal was right in law in holding that reopening of assessment is valid on the ground that the appeal of the assessee does not arise out of the reasons recorded for reopening ignoring the grounds of appeal taken before it? - HELD THAT:- As it is evident from the computation of income that the assessee had disclosed full details of its claim in respect of interest accrued but not due in the computation of income furnished along with the return of income. The whole basis of reopening was the aforesaid computation along with notes thereon as furnished by the assessee along with the return of income. In other words, there was no new tangible material before Ld. AO to reopen the case of the assessee and the reopening was based on existing material already available on record. In such a case, the reopening would become mere review of the order which is impermissible as per the decision of Hon ble Supreme Court in CIT V/s Kelvinator of India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT ] We are of the opinion that the formation of belief has to be on the basis of some fresh tangible material or new information which is not the case here. This being so, reassessment proceedings are liable to be quashed on legal grounds. The aforesaid conclusion also find support from the decision of Hon ble High Court of Madras in Tanmac India V/s DCIT [ 2017 (1) TMI 122 - MADRAS HIGH COURT ] wherein reassessment was held to be not justified since the same was sought to be initiated on the basis of return of income and enclosures thereto which was already part of record. Similar is the ratio of decision in Pr. CIT V/s M.R.Narayanan [ 2021 (6) TMI 825 - MADRAS HIGH COURT ] as well as in CIT V/s RPG Transmissions Ltd. [ 2014 (2) TMI 238 - MADRAS HIGH COURT ] Considering the ratio of aforesaid binding judicial pronouncements, the reassessment proceedings are liable to be quashed. We order so. The legal grounds urged by the assessee stand allowed.
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2022 (6) TMI 744
Bogus LTCG - disallowance u/s 10(38) - Penny stock purchases - unexplained cash credit u/s 68 - HELD THAT:- AO has not doubted the purchase of shares were through banking channels. While making the additions, AO has not brought any material how the assessee has brought its own unaccounted money for the acquisition of the shares specially when the purchase of shares was not doubted and shares have been sold on Stock Exchange. AO has not brought on record statement of any persons through whom assessee s own unaccounted money has been brought in. As stated above, the appellant has held the shares for over 3 years and it would be incorrect to treat sale of shares as bogus merely on the basis of suspicion and on account of fact that a substantial quantum of capital gains has been made by the assessee. In the present case, no material has been brought on record to suggest that purchase and sale of shares were bogus. Assessing Officer has not brought any material to support his finding that there has been collusion or connivance between the broker and the assessee for the introduction of his own unaccounted money. In the present case, despite the assessee s specific request, no opportunity of cross examination was provided to the assessee on the basis of whose statements reliance has been placed to hold that the sale of shares was sham / bogus. - Decided in favour of assessee.
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2022 (6) TMI 743
Revision u/s 263 - windmills on which higher depreciation @80% was claimed by the assessee - depreciation on windmills installed on or before 31/03/2012 were entitled for higher depreciation @80% - HELD THAT:- It is observed that the benefit of higher depreciation @80% was initially restricted to the windmills installed on or before 31st day of March-2012 as per the specific entry prevalent at the relevant time in Appendix-I to the Income Tax Rules, 1962. The said entry was subsequently amended to make windmills installed on or after the 1st day of April-2014 to be eligible for the benefit of higher depreciation @80%. A careful analysis of both these entries shows that the windmills installed during the period from 01/04/2012 to 31/03/2014 were not entitled for higher depreciation @80% as rightly contended by the Ld.counsel for the assessee and there is nothing to show that the effect or intention of the amendment made was to withdraw the benefit of higher depreciation @80% allowed to windmills installed on or before 31/03/2012 as sought to be contended by the Ld.DR. The windmills installed on or before 31/03/2012 continued to be eligible for the benefit of higher depreciation @80% even for AY 2013-14 and the subsequent years and there is nothing to show or even suggest the said benefit was withdrawn or discontinued from AY 2013-14 onwards. Since the windmills on which higher depreciation @80% was claimed by the assessee for the year under consideration had been undisputedly installed by the assessee on or before 31/03/2012, we are of the view that the assessee-company was entitled for higher depreciation @80% on the said windmills for the year under consideration and there being no error in the order of the Assessing Officer passed u/s.143(3) allowing depreciation at higher rate of 80% on the said windmills, the Ld. Pr.CIT is not justified to revise the same vide his impugned order passed u/s.263 of the Act. In view of that matter, we set aside the impugned order passed by the Ld. Pr.CIT u/s.263 of the Act and restore that of the Assessing Officer passed u/s.143(3) of the Act. Appeal of assessee allowed.
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2022 (6) TMI 742
Unexplained cash credits u/s.68 - HELD THAT:- We are of the considered view that once AO has accepted the assessee s figure of receipts from job work declared in the return of income on the basis of which return has been filed by the assessee on presumptive basis under section 44AD AO is precluded from making separate additions u/s 68 to the returned income on the basis that the assessee has not been able to prove the fact of carrying out job work activity in absence of adequate supporting documents etc. without disturbing the figure declared by the assessee offered as job work receipts. As regards cash deposits the assessee has filed confirmations along with identity proofs of lenders and the same has not been disputed by the assessing officer - Accordingly, considering the fact that deposits by each of the individual lenders were less than ₹ 20,000 coupled with the fact that the assessee has been able to establish their identity, we are of the view that source of cash deposits also stands substantiated. Accordingly, ground number 1 to 3 of the assessee s appeal are allowed. Set off of loss from derivative transactions against income declared by the assessee in the return of income - assessee has submitted that both the quantification and genuineness of the aforesaid loss from derivative transactions are not in dispute - assessee, due to oversight could not claim the above loss either before the AO or the Ld. CIT(Appeals) and has relied on various judicial precedents in support of his contention that additional claim can be raised at any stage before appellate authorities - HELD THAT:- We are in agreement with the contention of the assessee that a legally valid claim can be made by the assessee even before the appellate authorities. Therefore, in the interests of justice, we are restoring the matter to the file of the AO only in respect of the additional grounds of appeal in respect of claim of set off of loss incurred in derivative transactions against income declared in the return of income filed by the assessee, with a direction to verify the claim of the assessee in respect of this ground, since the revenue authorities did not have any opportunity to verify the aforesaid claim of the assessee at any prior stage. In the result, the additional ground of appeal of the assessee is allowed for statistical purposes.
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2022 (6) TMI 741
Revision u/s 263 - assessee had claimed deduction under section 80P on interest earned from nationalized bank / Gujarat State Finance Corporation and not from deposits kept with co-operative society/cooperative bank - HELD THAT:- As on analysis of the original assessment order and perusal of the order passed by the Ld. Pr. CIT, we note that during the course of assessment proceedings, the AO did not make any enquiry/did not apply his mind on the applicability of section 80P of the Act on interest earned on deposits kept with GSFC/nationalized banks. In fact, the learned counsel for the assessee has not been able to point out any specific instances where the AO in the original assessment order had carried out detailed enquiries/applied his mind with respect to the various issues pointed out by the Ld. Pr. CIT while passing the 263 order. From the facts on record, we find that there is an evident lack of enquiry by the assessing officer while passing the original assessment order. It was on this basis that Ld. Pr. CIT passed the 263 order after giving due opportunity to the assessee and after taking into consideration the replies filed by the assessee and held that the original assessment order is erroneous and prejudicial to the interests of the Revenue. Accordingly, in view of the above observations, we are of the considered view that there is no infirmity in the order passed by the Ld. Pr. CIT under section 263 of the Act. - Decided against assessee.
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2022 (6) TMI 740
Carry forward of the short term capital loss - Addition on the ground that same has not been claimed in the return of income filed under section 139(1) - whether the short-term capital loss claimed in the return of income filed in response to notice issued under section 153A of the Act can be allowed to carry forward to the assessee for subsequent years? - HELD THAT:- As assessee has referred to the decision of the Tribunal in the case of BE Billimotrai Co Ltd. [ 2020 (2) TMI 485 - ITAT MUMBAI] wherein the assessee filed regular return of income on 27/09/2013 i.e. within the due date prescribed under section 139(1) of the Act, but same was not accompanied by the audit report as required under section 44AB of the Act. Subsequently the assessee filed revised return of income on 31/03/2014, where the assessee filed the audit report. Assessing Officer completed the assessment under section 143(3) of the Act, allowing carry forward of the loss as shown in the revised return of income. The Ld. CIT invoked proceeding under section 263 of the Act on the ground that the Assessing Officer has erroneously allowed carry forward of the business loss. The Tribunal held that the Assessing Officer had not issued any defective memo in terms of section 139(9) of the Act and therefore defect in the original return of income stood removed by way of filing voluntarily revised return by the assessee. In the circumstances, the Tribunal (supra) held the original return of income filed by the assessee was valid return and holding the assessee eligible for carry forward of the business loss. Thus, in our opinion the ratio of the above decision of the Tribunal is not applicable of the facts of the instant case, as in this case there was no issue of any defect in the original return of income filed under section 139(1) and the revised return of income has only been filed in response to notice under section 153A of the Act, wherein the assessee has claimed the short-term capital loss. - Decided against assessee.
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2022 (6) TMI 739
Allowability of Professional promotion charges - Expenses incurred by Hospitals towards patients referred to hospital by doctors/villagers/RMP s etc. - Addition in view of the provisions of the Section 37 - The expenses are incurred by the assesee are in nature of referral cases, investigation charges or reimbursement of the cost incurred to the persons for bringing the patients to the hospital - HELD THAT:- We are of the opinion that AO has not doubted the genuineness of the expenditure incurred by the assessee as referral charges but the disallowance was made by the AO only on the ground that the said expenditure is hit by the explanation to Section 37(1) being prohibited. When the genuineness of the expenditure is not doubted then the claim of the assessee cannot be disallowed. We are of the view that the AO has wrongly interpreted the CBDT circular. No 05/2012 dated 01/08/2012. The Ld. AR for assessee submitted that the circular is not applicable for the present case, it is applicable for expenditure incurred in providing freebies to medical practitioner by pharmaceuticals and allied sector health industry. We are of the considered view that the CIT(A) has rightly upheld the order by relying on the identical issue decided in Hon ble Rajasthan High Court [ 2017 (12) TMI 931 - RAJASTHAN HIGH COURT ] . The Commissioner of Income Tax (Appeals) after considering the relevant facts has rightly held that the expenses claimed by the assessee is allowable u/s.37(1) of the Income Tax Act, 1961. Thus, we do not find any merit in the case of the Revenue.
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2022 (6) TMI 738
Non service of notice u/s 143(2) within the statutory period - HELD THAT:- Assessment Order clearly mentions that notice under section 143(2) was issued and duly served upon the assessee. In response thereto, the assessee participated in assessment proceedings. However the Ld. CIT(A) obtained report from AO who submitted documents to prove service of notice. After giving opportunity to the assessee, the Ld. CIT(A)-1 recorded the finding that the notice has been duly served upon the assessee within the prescribed time limit. We uphold the following findings - Accordingly, we reject these grounds. Denial of deduction of expenditure while computing income under the head Business - grievance of the assessee is that the expenditure relatable to the said business income debited to P L Account ought to have been allowed as deduction which has not been done - HELD THAT:- We find substance in the above contention of the assessee and direct the Ld. AO to scrutinise the expenses debited to the P L Account relatable to the aforesaid business income and allow the same in accordance with law after giving reasonable opportunity of hearing to the assessee. Income from Business Centre and reimbursement of expenses - Income from house property or business - contention of the assessee is that it has not let out any property or part thereof, instead it has been allowing the spaces for commercial use by commercially exploiting the property for the purpose of business - HELD THAT:- We have perused the Business Centre Agreement ( Agreement ) entered into between the assessee company and three space holder companies - Agreement mentions that the licensor assessee is owner and in possession of commercial building situated in Greater Kailash-II, New Delhi and that it is authorised to utilise commercial space appx. 1852 sq. ft. located at Mezzanine Floor of the said complex for running Business-cum-Facility Centre therefrom. In pursuance of the same the assessee has set up a fully air conditioned Business-cum-Facility Centre in the said commercial space for providing temporary office and other secretarial services and facilities to different individuals, companies and entities against payment of monthly Licence Fee and other charges to enable them to carry on their business operations within the basic structure and framework of the Business Centre. Thus we find substance in the submission of the assessee that it was never the intention of the assessee to let out its commercial building for the purpose of enjoying the rent but to commercially exploit the same by letting it out Therefore, income derived therefrom partakes the character of income from business. Thus income derived by the assessee from running Business Centre in all and income by way of reimbursement of expense constitute Business income and are assessable as such. AO is directed to modify the assessment and carry out necessary consequential amendments. He shall allow the deduction of expenses debited to P L Account as per law and withdraw the deduction allowed under section 24 of the Act. We order accordingly and allow this ground of the assessee. Determination of carry forward and set off of business loss - HELD THAT:- Since the assessee is carrying on business, the loss under the head business ought to have been computed. We agree. The Ld. AO is directed to determine, carry forward and set off of business loss in accordance with law. Income from undisclosed sources - HELD THAT:- As we have reached to the conclusion that the assessee has discharged the primary onus which lay upon it. The identity of the creditor, the creditworthiness of the creditor and genuineness of the transaction have been proved by the assessee. In CIT vs. Bedi Co. Pvt. Ltd.[ 1998 (2) TMI 2 - SUPREME COURT ] the Hon ble Supreme Court held that where the explanation offered by the assessee as to the nature and source of credit is prima facie credible, it cannot be rejected on mere surmises. We, therefore, delete the impugned addition. Treatment to reimbursement of expenses as income from house property - HELD THAT:- We have adjudicated this issue while dealing with ground No. 4 wherein we have held that the said sum forms part of income from Business Centre run by the assessee which is assessable as Business income. The assessment be modified accordingly. Denial of deduction of expenditure debited to P L Account on the erroneous assumption that the assessee did not carry on any business - HELD THAT:- since it is no longer in dispute that the assessee is engaged in the business, we direct the Ld. AO to look into the expenses claimed by the assessee and allow deduction in computing income from business if on verification the expenses are found to be deductible as per law after giving reasonable opportunity of hearing to the assessee. Disallowance of interest - AO made the disallowance for the reason that amount borrowed by the assessee from M/s. Binaguri Tea Company Pvt. Ltd. was considered as assessee s income from undisclosed source - HELD THAT:- We are of the view that the impugned interest paid on borrowal for the purpose of assessee s business has to be allowed under section 36(1)(iii) of the Act. We, therefore, direct the AO to allow the interest (inclusive of TDS deposited by the assessee to the credit of the lender) while computing income of the assessee under the head business . It may not be out of place to mention that the loan obtained by the assessee appearing in its books as credit has been held to be genuine by us. Accordingly, interest on the capital borrowed for the purposes of business is a deductible expenditure. We direct the Ld. AO to modify the assessment. Outstanding credit balance in the account of M/s. Bell Ceramics Ltd . - AO made the disallowance holding that its nexus with income earned during the year is not established - HELD THAT:- On consideration of the rival submissions, we agree with the contention of the assessee that the impugned sum is allowable as deduction for the reason that the Ld. AO has not disputed that the said sum has been offered as income in the preceding year which has been brought to tax. The writing off of the impugned sum during the year in the accounts of the assessee has also not been disputed by the Ld. AO/CIT(A)-1. We, therefore, decide this ground in favour of the assessee. Disallowance u/s 14A - assessee s submission is that the exempt income earned by the assessee and claimed as exempt aggregated to Rs. 8,027/- only and therefore the disallowance of Rs. 14,745/- as against Rs. 8,027/- is not sustainable - HELD THAT:- We agree and restrict the disallowance to Rs. 8,027/- only. Denial of set off and carry forward of business loss - HELD THAT:- We direct the Ld. AO to determine the business loss and allow the set off and carry forward in accordance with law.
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2022 (6) TMI 737
TDS u/s 195 - Disallowance of Primary Rate Interface (PRI) Line charges paid to Telecom Companies on account of non-withholding of taxes - submission of the assessee is that the subordinate authorities have erred in disallowing the charges paid to Telecom Companies such as Bharati Airtel, Tata Communications and Vodafone Cellular u/s. 40(a)(ia) by treating the same as leased line charges and not appreciating the fact that the above charges were for standard PRI line charges which require no human intervention and consequently does not qualify as fees for technical services - HELD THAT:- As decided in favour of the assessee in the case of Pr. CIT-2 Vs. Lee Murihead (P) Ltd. [ 2019 (4) TMI 1871 - BOMBAY HIGH COURT] we direct the A.O./T.P.O. to delete the addition on lease line charges from the hands of the assessee. Accordingly, this ground of appeal of the assessee is allowed.
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2022 (6) TMI 736
Unexplained cash deposited into the bank account the demonetization period - HELD THAT:- As assessee has claimed that he has sold coffee seeds to a concern named M/s. Raj Coffee Curing Works. The purchase invoices given by the above said concern are placed - AO issued a notice under section 133(6) of the Act to the above said concern, but did not receive reply from it before the completion of the assessment. A.R has furnished proof to show that the above said concern has sent a reply to the AO, but it has been sent after the completion of the assessment. CIT(A) also failed to take cognizance of the confirmation given by the above said concern. It was submitted by Ld. AR that the assessee is a non-resident and he did not visit India during the year under consideration. Since he has sold coffee seeds prior to the date of demonetization, he was constrained to deposit the cash into the bank account after announcement of demonetization. Hence the Ld. A.R contended that there is no reason to reject the explanations given by the assessee. Also merit in the submission made by Ld. AR. Since the evidence furnished by the assessee with regard to sale of coffee seeds has been confirmed by the purchaser, there is no reason to suspect the explanation given by the assessee - AO has not brought on record any other material to disbelieve the explanation so given by the assessee. Accordingly, the assessee has explained the sources for making the deposit in bank account - Decided in favour of assessee.
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2022 (6) TMI 735
Disallowance on account of LC Discounting Charges in the Revised Return filed - when the liability arose? - year of assessment - Assessing Officer observed that the assessee has claimed LC charges neither provided nor claimed in the original return. Assessee's explanation that the liability crystallized in the impugned assessment year was also rejected - AO also took adverse inference for non-furnishing of the details by the assessee - AO objected admission of additional evidence by CIT-A - HELD THAT:- Till the signing of memorandum of understanding the CIT(A) accepted that the liability did not crystallise. When the liability crystallised in February 2012, the same is to be assessed for AY 2012-13. Hence, Ld. CIT(A) has contradicted himself when he says that the liability arose after there was a memorandum of understanding on 21.02.2012 still the same has to be allowed in AY 2011-12 i.e. in the year earlier than the date of MOU. The decision referred by the Ld. CIT(A) from Hon'ble Supreme Court in the case of Nonsuch Tea State Ltd. [ 1974 (11) TMI 5 - SUPREME COURT] also supports the proposition that the liability arose only when the MOU was signed. In that case, Hon'ble Supreme Court has held that the liability to pay remuneration arose only when government conveyed its approval and not prior to that date. Same proposition is emanating from the decision of CIT vs Exxon Mobil Supra [ 2010 (9) TMI 36 - DELHI HIGH COURT] which Ld. CIT(A) has himself referred. In this view of the matter when Ld. CIT(A) is himself accepting and giving case laws for the proposition that the liability arose only when the MOU was signed, there is no justification for the same to be accounted for in the current assessment year. The mere submission that there was the opinion from a C.A. for this claim has no legal sustainability dehors any cogent reasoning. Once it is clear that the expenditure was not to be accounted for this year, the order of the Ld. CIT(A) is not at all sustainable. As regards other aspects wherein Ld. CIT(A) is accepting the assessee's submission that five of the parties have replied directly to the Assessing Officer, which the AO has not so acknowledged. We find that nothing stopped the Ld. CIT(A) from examining the assessment records as to whether the AO's claim that there was no response from these parties is correct or not. In this view of the matter, we do not approve the Ld. CIT(A) doubting the claim of the Assessing Officer that some of these parties did not reply. Be as it may the adjudication of the claim on merit is only of academic interest, as we have already held that the amount was not liable to be accounted for in the present assessment year. We set-aside the order of the Ld. CIT(A) on the reasoning that Ld. CIT(A) has erred in holding that the L.C. discounting charges were to be allowed in the present assessment year. - Decided in favour of revenue for statistical purpose.
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2022 (6) TMI 734
Revision u/s 263 - case was selected for limited scrutiny - Whether the AO has considered the issue is question - HELD THAT:- As per notice dated 19.09.2017 issued u/s 143(2) of the Act, the case of the Appellant was selected for limited scrutiny for examination of following issues (i) whether sundry creditors are genuine, (b) whether contract receipts/fees have been correctly offered to tax and (iii) whether sales turnover/receipts has been correctly offered to tax. AO was required to carry out necessary verification and inquiries in relation to the above issues. Appellant has contended that during the assessment proceedings the Appellant had filed necessary documents/confirmation and details reconciliation statement. We have examined the assessment order, the paper-book of the Appellant and copy letter date 11.06.2018 filed by the Appellant along with the annexures. AO has merely asked for age-wise details, and balance confirmation in relation to the sundry creditors. It is correct that the Appellant had provided the aforesaid information/documents during the assessment proceedings, however, but the same are not sufficient to enable the AO to verify the genuineness of sundry creditors. Similarly, the statement of Reconciliation of 26AS filed by the Appellant is also not sufficient to show that the contract fee has been offered to tax correctly. Clearly, the Assessing Officer has not undertaken necessary inquires/verification during assessment proceedings. The Assessment Order is also silent on these issues and therefore, does not support the contentions of the Appellant. We are also not inclined to accept the contention advanced on behalf of the Appellant that provisions of Clause (a) of Explanation 2 to Section 263 of the Act support the case of the Appellant. The expression without making inquiries or verification used in Clause (a) of Explanation 2 to Section 263 of the Act, has to be read in conjunction with the words that follow this expression which should have been made . In the case before us, the Assessing Officer has failed to carry out necessary inquiries and verification in relation to the issues identified for limited scrutiny which should have been made in the facts and circumstances of the present case. PCIT was legally justified in exercising powers of revision under Section 263 of the Act in the facts and circumstances of the present case.
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2022 (6) TMI 733
Depreciation on plant and machinery forming part of block of assets - Disallowance on the ground that assets were not put to use in the present yea r - HELD THAT:- The Notes forming part of Balance Sheet mentions specifically states The company is in transition period and has not finished restructuring of power plant at Panoli and hence could not made sales during the year by generation and supply of power . So this is not a case, where the unit had not been in operation for several years or has not been generating any revenue at all for many years altogether. Though, subsequently the unit closed down eventually (in 2016), but so far as the present assessment year is concerned, there is no observation either in the assessment order or CIT(A) order that relocation was purpose of closing down the unit altogether. Though, the unit could not generate revenue during the year on account of relocation of plant to Panoli, but the fact that the assessee did not earn revenue or did not put the assets to use on account of fact that it was in process of shifting of plant to Panoli, would not, in our view, disentitle the assessee to claim depreciation on plant and machinery forming part of block of assets. Thus, in absence of any finding to the effect that the purpose of shifting was to close down the unit altogether, in our view, it respectfully following the decision of Gujarat High Court in the case of Nirma Credit Capital Ltd. [ 2017 (2) TMI 278 - GUJARAT HIGH COURT] and PCIT v. Babul Products (P.) Ltd [ 2018 (7) TMI 2095 - GUJARAT HIGH COURT] . in our view, Ld. CIT(A) erred in disallowing the claim of the assessee in respect of depreciation on plant and machinery forming part of block of assets on the ground that assets were not put to use in the present year. Assessee appeal allowed. Set-off of unabsorbed brought forward depreciation and business loss in absence of business activity during the year - HELD THAT:- As in the case before us there is no specific finding either in the assessment order or CIT(A) order that the assessee had abandoned/closed his business during the year. Though during the year, admittedly the assessee could not generate revenue on account of relocation of plant to Panoli, but that fact by itself, would not, in our view, ipso facto lead to the conclusion that the business of the assessee has ceased altogether. As relying on the case of Dwarka Cements [ 2003 (8) TMI 166 - ITAT BOMBAY-J] which has held that merely because there was no manufacturing activity in relevant previous year, that could not be reason enough to come to conclusion that unabsorbed appreciation of assessee in earlier years was not entitled to be set off against its business income in current year, we are of the considered view that assessee should be allowed set-off of unabsorbed brought forward depreciation and business loss during the year. Appeal of assessee allowed.
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2022 (6) TMI 732
Delayed payment of employees contribution to PF / ESI invoking the provisions of section 2(24(x) read with section 36(1)(va) - Payment has been made beyond the stipulated date but before the date of filing of the return - HELD THAT:- We find that with regard to the grievance of the assessee against the action of the ld. CIT(A) in confirming the additions made by the CPC relating to employees contribution towards PF ESI, there is no dispute between the parties regarding the date of deposit of PF ESI, which clearly is beyond the prescribed date of deposit as applicable under the relevant section of the I.T. Act. Further, there is no dispute between the parties that the deposits were made before the filing of return of income for the relevant assessment year. The Hon'ble Allahabad High Court, in the case of Sagun Foundry (P.) Ltd. [ 2016 (12) TMI 1479 - ALLAHABAD HIGH COURT] has dealt with a similar issue and after taking into account the judgment of the Hon'ble Supreme Court in the case of CIT vs. Alom Extrusion Ltd. ( 2009 (11) TMI 27 - SUPREME COURT] has decided the issue in favour of the assessee.
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2022 (6) TMI 731
Non grant the credit of TDS - credit denied as assessee had not offered the freight receipts as income for the relevant year under consideration - as argued assessee had shown the net of the Gross receipts of the Freight services against the disbursements to the Ex-servicemen truck owners in its audited books of accounts, and thus have fulfilled the requirements as specified in the provisions of Section 199 read with Rule 37BA of The Income Tax Act 1961 - HELD THAT:- We find ourselves unable to confirm the orders passed. The factual matrix as noticed in the orders and as argued has remained unaddressed. It is necessary for us to highlight that under the Scheme of the Income Tax Act, what is to be brought to tax is the specific income arising from the stated activity in the specific period. It has been repeatedly canvassed and we notice that the argument has not been upset by the Tax Authorities. The assessee society incorporated under the HP Ex-Servicemen Corporation Act, 1970 was created to provide employment/financial benefits to the retired Defence personnel. The cement companies including A.C.C. Ltd., J.P. Cements etc. required the cement to be lifted and transported from the premises entered into an agreement with the assessee. Admittedly the assessee Society/Corporation did not own any trucks and agreements were entered into with ACC Ltd., Ambuja Cement etc. for transporting cement etc. from the premises. Since the assessee corporation did not own any trucks, these were hired by the Corporation and commission income from the said hiring activity was the income received by the Corporation only. However, since trucks have been engaged through the assessee by ACC Ltd. etc., the TDS deducted etc. payments by the ACC Ltd. were paid to the truck owners through the assessee, pleadings to this effect, we have noticed have been extracted in the respective orders, however, while passing the order, the AO, we find, has been guided by the fact that credit of TDS of freight receipts cannot be allowed as no freight receipts have been disclosed. Similarly, the ld. Commissioner is also influenced by this fact has confirmed the order. It is a fact that the freight receipts are not offered as income of the assessee as the income of the assessee was only commission income. The claim on facts needs to be examined by the Tax Authorities. Accordingly, on a perusal of the record and in the light of the submissions of the parties, we find that in the interest of justice, it is appropriate to set aside the respective orders and restore the issue back to the file of the CIT(A) for a proper consideration on facts - Appeal of the assessee is allowed for statistical purposes.
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2022 (6) TMI 730
Validity of Best judgement assessment u/s 144 - argument of non affording an opportunity of being heard to the appellant - HELD THAT:- We find ourselves in agreement and concur with the finding of the CIT(A) and hold that the assessee admittedly did not participate in the proceedings before the AO either fairly or completely. However, while so holding we are also live to the submissions of the assessee in as much as for want of proper representation/shortcomings etc. by a duly appointed Representative the assessee should not be made to suffer. It is seen that ld. CIT(A) noticing that the submission was unsupported by an Affidavit of the AR appointed has dismissed the bald argument. Considering the same, we hold that while the First Appellate Authority was justified to dismiss the bald plea, at the same time, being live to the practical difficulties of the assessee also in obtaining such an affidavit from its counsel, we deem it appropriate presently to dispense with such a requirement. We would like to make it clear that the assessees, even though it is a government authority cannot be permitted to abuse the process of law. Bald unsupported excuses of blaming its AR without first satisfying the adjudicating authority that all necessary details for compliances were always provided to the counsel is a requirement which cannot be summarily overlooked. It is obvious that a counsel can make representation on behalf of an assessee only if all details are made available by the assessee to its C.A./counsel. Infact ideally an affidavit to the said extent would be the foremost primary fact on which we would first insist to be demonstrated. We are of the firm view that the responsibility of the assessee does not end by merely appointing a Counsel. The assessee necessarily needs to ensure and make available all necessary informations to its counsel for enabling him to participate effectively in the hearing. However, in view of the peculiar facts of the present case, considering the oral undertaking given we do not insist on an affidavit of the assessee. Having expressed our displeasure on the lax attitude evident on record, accepting the oral undertaking given, we deem it appropriate to direct a remand. At the same time at this stage we deem it necessary to highlight that a Government Corporation is like any other assessee before the tax authority and cannot be allowed to plead that on this count it be given a preferential treatment and be allowed to escape the responsibilities of representing their case before the other governmental authorities including the tax authorities. The rigors of non-compliances with the requirements of the Statute are same for all assessees. We make it clear that merely because the assessee is a Government authority, it itself is no reason for the authority to act in an irresponsible and negligent manner. Accordingly, with the said observations, the issue is restored back to the Assessing Officer. Said order was pronounced in the Open Court in the presence of the parties. In the result, the appeal of the assessee is allowed for statistical purposes.
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2022 (6) TMI 729
Delayed payment of employee's contribution, beyond the prescribed time, to the welfare Funds like PF - HELD THAT:- As on a consideration of the peculiar facts, where admittedly the assessee is found to have deposited the employees' contribution to ESI/PF well before filing of the return of income, accordingly, considering the legal position as thrashed out in various decisions of the Co-ordinate Benches, the appeal of the Revenue is dismissed.
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2022 (6) TMI 728
Exemption u/s. 54B - capital gain on sale of ancestral land in the hands of appellant - assessee explained specific asset sold was HUF property and the land was purchased in the name of the wife as the stamp duty to be paid for women was much less and since his wife was also a co-parcener, hence the claim may be allowed. - Assessee filed a copy of the 'Jamabandi' and copy of the Purchase Deed with a submission that these documents were available before the CIT(A) and the AO, however, they failed to consider or discuss them - also there is no finding on record about the status of the land whether it is HUF or not. HELD THAT:- We find on a consideration of the material available on record that the issue on facts needs to be addressed. Parties were required to argue whether the remand be made to the AO or the CIT(A). Both the parties agreed that the remand be made to the AO. Accordingly, on a consideration of the facts, circumstances and submissions of the parties before the Bench, it is deemed appropriate to set aside the impugned orders and restore the issues back to the file of the AO to ascertain the status of the, and which was sold and then decide the issue in accordance with law after giving the assessee a reasonable opportunity of being heard. The assessee in its own interests is directed to ensure full and proper participation before the AO and not abuse the trust reposed. It is made clear that in the eventuality of abuse of the trust reposed, the AO shall be at liberty to pass an order on the basis of the material available on record. Appeal of the assessee is allowed for statistical purposes.
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2022 (6) TMI 727
Delayed payments made towards EPF and ESI - intimation order passed u/s. 143(1) - scope of amendment - HELD THAT:- A perusal of the record shows that in the facts of the present case, the assessee admittedly deposited the PF/ESI before filing of the return. No doubt there was a delay in terms of the specific Act. As observed earlier, the issue is no longer res-integra and has been addressed thread bare in various orders of the ITAT. As seen that the year under consideration is 2018-19 assessment year and considering the judicial position wherein the amendments held to be prospective in nature and shall come into play from 2020-21 assessment year, the appeal of the assessee, accordingly, is allowed.
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2022 (6) TMI 726
Revision u/s 263 by CIT - assessee had paid a sum towards electricity charges in cash which are dis-allowable u/s 40A(3) and AO did not examine this aspect at all during assessment proceedings - CIT further held that the explanation of the assessee that payment had to be made in cash since the cheque issued to the electricity company was dishonoured due to insufficient funds was found to be not acceptable because if the cash was available in the books of accounts, then the same could have been deposited in the bank before issuing the cheque - Secondly, Principal CIT observed that remuneration of Rs. 12,00,000/- was paid to partners of the firm - HELD THAT:- We note that the order passed by the assessing officer is a brief order and does not discuss in detail the various details called for and the explanation given by the assessee. The AO has accepted the returned income filed by the assessee. Though we note that though the AO had from time to time sought for various details from the assessee and also for certain matters in respect of which Principal CIT has made certain observations, the Ld. Assessing Officer had sought for details and analysed the issues, for instance one related to payment of remuneration to HUF, in respect of which there was an ongoing litigation in previous years, however we equally note that in respect of certain issues for instance the difference - in respect of receipts as compared to party -wise ledger accounts, there was an obvious omission on the part of the assessing officer in not carrying out the necessary reconciliation between total receipts under the head Sales with the party -wise accounts reflected as job work receipts from the various parties. As noted by the Principal CIT, even during the 263 proceedings, the assessee has not been able to satisfactorily reconcile the difference. Another aspect for consideration, is the disallowance on account of late payment of employees Provident Fund beyond the due date prescribed under the relevant Act. This issue was not analysed by the AO during the course of assessment proceedings, especially when the language of the Act is clear and unambiguous. In our view, during the course of assessment proceedings, the AO did not verify certain details which in our view should have been done in order to assess the correct taxable income of the assessee. Accordingly, in a considered view, the Principal CIT has not erred in law and facts in setting aside the assessment order under s. 263 of the Act since the same is erroneous and prejudicial to the interests of the revenue. The same is accordingly being set aside to pass a fresh order after giving due opportunity of hearing to the assessee. Appeal of the assessee is dismissed.
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2022 (6) TMI 725
Assessment of trust - benefit of the exemption as provided under section 11 - application for registration under section 12AA of the Act was made in pursuance to the provisions of sub section (2) of section 12AA - whether the assessment was pending before the assessing officer as on the date of registration granted by the learned CIT exemption? -whether intimation generated under the provisions of section 143(1) of the Act is an assessment in the manner as provided under the proviso attached to section 12A(2) - HELD THAT:- As relying on SR. KOSHTI VERSUS COMMISSIONER OF INCOME-TAX. [ 2004 (12) TMI 62 - GUJARAT HIGH COURT] we hold that the intimation generated under section 143(1) of the Act is not an assessment and therefore we hold that the benefit as provided under the 1st proviso to subsection 2 of section 12AA of the Act is unavailable to the assessee. In addition to the above, we also note that the assessee while filing the return of income has not claimed the benefit of the provisions of section 11 of the Act which can be verified from the computation of income available on pages 1 to 3 of the paper book. Thus, we are not convinced with the argument of the learned counsel for the assessee. Application of Maximum Marginal rate @ 30% - Whether the rate of an individual should be applied or the maximum marginal rate of tax in the manner as provided under the provisions of section 164? - Admittedly, the person has filed the return of income in the representative capacity in the manner as provided under clause (iv) of section 160 of the Act. To this proposition, there is no dispute. It is also not under challenge that the trust on hand is a discretionary trust meaning thereby the beneficiaries of the trust are not known. In other words the trust being public trust was formed to carry out the charitable activities as evident from the trust deed, placed on pages 9 to 15 of the paper book. It was also provided in the trust deed that ownership of all money and the properties of the trust shall be of the trust and no member/organization shall have right of ownership. Likewise, in the event of dissolution of the trust, all the property of the trust after meeting the liabilities would be transferred to some other trust carrying on similar activity which can be verified from the registration certificate granted by the learned CIT exemption under section 80G of the Act Thus in the light of the above discussion it can be concluded that the tax shall be charged on the income of the assessee at the maximum marginal rate in pursuance to the provisions of section 164(1) of the Act. We find pertinent to deal with subsection (2) of section 164 of the Act which is applicable to a trust which is entitled for the benefit of the provisions of section 11 of the Act. As such subsection (2) of section 164 of the Act provides to charge the tax on the part of income which is not exempt treating the same as income of the Association of persons. However, in the case on hand, the trust before us is not eligible for exemption under section 11 of the Act for the year under consideration. Therefore, the same cannot be treated as Association of persons in the manner as provided under subsection (2) of section 164 of the Act. In view of the above and after considering the facts in totality, we do not find any infirmity in the order of the authorities below. Hence, we uphold the order of the learned CIT(A). Thus the ground of appeal of the assessee is hereby dismissed.
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Customs
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2022 (6) TMI 724
Levy of penalty on the Director of Company - import of goods under advance licence scheme - non-fulfillment of export obligation - petitioner has not been served any show cause notice dated 26th April, 2002 nor given a notice of personal hearing before passing of the adjudication order - violation of principles of natural justice - HELD THAT:- To the averment in the petition in paragraph no.22 that petitioner was neither served with a show cause notice dated 26th April, 2002 nor petitioner was given any notice of personal hearing before passing the adjudication order dated 5th February, 2008 it has not been denied in the affidavit in reply. Petitioner s averment in paragraph no.22 that demand notice dated 7th August, 2001 and refusal order dated 3rd October, 2001 referred to in the adjudication order dated 5 th February, 2008 was not served on petitioner has also not been denied in the affidavit in reply. Therefore, on this ground alone the adjudication order should go. When we read the adjudication order dated 5th February, 2008, the entire order proceeds on the basis that obligations to comply with the provisions of FTDR Act was that of the company, the notices were issued to the company and even penalty has been imposed on the company. hough penalty has been imposed on the company because company has defaulted in the export obligation imposed on the licence, in the adjudication order, Respondent No.3 has gone ahead and stated that the noticee firm and its Directors are hereby directed to pay above penalty amount and produce the requisite evidence to his office. There is no discussion at all in the order as to how the Directors of the company become personally liable to pay penalty amount. The adjudication order also is fallacious because the entire order proceeds on the basis that show cause notice has been given to the company, personal hearing has been given to the company, penalty has been imposed on the company but penalty is attempted to be recovered from the Director without any basis being laid in the adjudication order. Therefore, the adjudication order dated 5th February, 2008 is also quashed and set aside to the extent of the directions upon petitioner to pay the penalty amount. Petition disposed off.
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2022 (6) TMI 723
Jurisdiction - power of DRI to issue SCN - Proper Officer - It is the uniform submission of the respective counsel for the petitioners in the respective writ petitions is that the impugned proceedings under the respective Show Cause Notices as also the respective impugned Order-in-Originals are without jurisdiction as they emanate from a person who is not a proper officer within the meaning of Section 2(34) of the Customs Act, 1962. HELD THAT:- What was implicit in the provisions of the Customs Act, 1962 has been now made by explicit in the amendment to the Customs Act, 1962 vide amendment in Finance Act, 2022. Therefore, these writ petitions are liable to be dismissed by giving liberty to the petitioners to work out their remedy before the alternate forum. Thus, under the Customs Act, 1962, there are different Power Centres for appointing persons as Officers of Customs for discharging their powers and functions (duties) imposed under the Act. The contours of powers to be exercised by such Officers of Customs is to be drawn by the Board. Section 3, of the Customs Act, 1962, recognizes the classes of Officers of Customs . It also includes such other classes of Officers of Customs who may be appointed for the purpose of the Act by the Board - Under Sub-Section 2 to Section 4, the Board can also authorize the officers mentioned therein to appoint Officers of Customs below the rank of the Assistant Commissioner of Customs. Officers from Group-B who are already from the Customs Department can be appointed as Officers of Customs . Similarly, the Officers of Directorate of Revenue Intelligence (DRI) are appointed as Officers of Customs under notification issued under Section 4(i) of the Customs Act, 1962 - Apart from the above, the Central Government may by notification can also entrust the function of the Board or any Officers of Customs under the Customs Act, 1962, on any other officer from any other department, viz., the Central Government, the State Government or the Local Authority either conditionally or unconditionally. Thus, under Section 6 of the Customs Act, 1962, the powers and functions(duties) of the Board and/or Officers of Customs specified in Section 5 read with Section 4 and notifications issued there under to implement the same can be entrusted on these officers. The challenges to the impugned Show Cause Notices and the Orders in Original on the strength of the decision of the Hon'ble Supreme Court in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [ 2021 (3) TMI 384 - SUPREME COURT ] fail. It is made clear that in case the respondent(s) want(s) to rely on the statement of person who may have given statement against the petitioner, such person shall be produced for cross examination by the petitioner - In case such person is not available for cross -examination, the respondent shall pass orders on merits by applying the principle of preponderance of probability and decide the case. Needless to state, the petitioner shall be heard before final orders are passed. The respective petitioners are at liberty to file their reply and written submission within a period of 30 days from the date of receipt of a copy of this order. In case the petitioner(s) fail(s) to file their reply within such time or within such extended time as may be allowed by the jurisdictional adjudicating authority, order shall be passed based on the available records and materials. It is made clear that in case the respondent wants to rely on the statement of person who may have given statement against the petitioner, such person shall be produced for cross examination by the petitioner - In case such person is not available for cross -examination, the respondent shall pass orders on merits by applying the principle of preponderance of probability and decide the case. Needless to state, the petitioner shall be heard. The petitioner is also directed cooperate with the respondent in the de novo proceeding, failing which, the respondent is at liberty to pass appropriate orders on merits based on the available material.Appeal allowed in part by way of remand.
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Corporate Laws
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2022 (6) TMI 722
Dissolution of Corporate Debtor - disbursement qua creditors have been made and there has been no claim from contributories - few claims rejected on the ground of non-submission of documentary evidence - HELD THAT:- The captioned main CP has served its purpose i.e., it has outlived its utility. Next year it will be two decades old. Two decades may be contemporary history in a historian's perspective but in litigation, it is clearly vintage nay ancient. This Court is convinced that just and reasonable circumstance exists for acceding to dissolution prayer in the captioned application - OL is permitted to deposit balance in the hands of OL qua said Company in the Public Account of India in the Reserve Bank of India after making permissible Statutory deductions and after incurring permissible expenses i.e., permissible under said Act and Rules thereunder. To be noted such deposit in the Public Account of India is inter alia under Section 555 of said Act. This Court is informed that the Central Government has made rules for destruction of physical records in the office of the OL and the same are traceable to sub-sections (1) and (2) of Section 550 of said Act. The physical records in the office of OL and destruction of the same can be done in accordance with said Rules. Be that as it may, it is made clear as far as physical records qua main CP and application/s thereat in this Company Court are concerned, the same shall be governed by digitization which is now underway as the digitization process in this Court would be making provision for destruction of physical records also. Captioned application and main CP disposed of.
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Insolvency & Bankruptcy
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2022 (6) TMI 721
Direction for maintaining of status quo in relation to the liquidation process of the Corporate Debtor - whether the Respondent violated Order of this Bench dated 20.07.2021 as alleged by the Applicant? - HELD THAT:- After filing the Contempt Application dated 02.08.2021 this Tribunal had afforded opportunity to the Respondent to file their Response to the Contempt Application and the Contempt Application has been heard both sides and reserve for Orders. This Tribunal extended the Interim Order dated 20th July, 2021 till 05.07.2022. The Appeal filed by the Applicant on 14.07.2021 and this Tribunal passed Status Quo Order on 20th July, 2021 much later to handing over the possession of property and issuance of sale certificate to the auction purchaser on 03.06.2021. Moreover, the Applicant has not made the auction purchaser a party to the proceedings before this Tribunal. This Tribunal passed the status quo order on 20th July, 2021 and the Respondent/ Liquidator stated that he has implemented the Order of this Tribunal dated 20th July, 2021 with respect to Liquidation Process from the date of passing of status quo order - Further, it is sated that the Respondent/ Liquidator does not have possession or control over the disposed asset of the Corporate Debtor. The Appeal has been filed much later to the sale certificate issued to the auction purchaser and the Applicant has not impleaded the auction purchaser as a party to the proceedings and the status quo order will not be applicable to the auction purchaser and this Tribunal cannot desist the auction purchaser from proceeding with the property which he is in possession in accordance with law, therefore, this Tribunal is of the view that the Respondent has not violated the order of this Tribunal dated 20th July, 2021 nor committed any contempt of this Tribunal - this Tribunal comes with a resultant and irrefutable conclusion that there is no disobedience of the Order of this Tribunal and the Contempt Application filed by the Applicant is frivolous and wasting the precious time of this Tribunal. Contempt application dismissed.
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2022 (6) TMI 720
Initiation of CIRP - All the projects of Corporate Debtor (Real Estate developer i.e Supertech Ltd.) or specified project to be proceeded against - It was submited that, in event the construction of the projects are allowed to proceed as ongoing project, the promoters of the Corporate Debtor are willing to extend all cooperation to the IRP for carrying out the ongoing projects. It is submitted that CIRP need not to be allowed to continue for all the 20 projects rather it may be undertaken on projects basis HELD THAT:- From the status report submitted by the IRP, it is clear that IRP in his Report has listed 20 projects of the Corporate Debtor which also included Eco Village II Project for which the finance was given by the Union Bank of India who has filed the Application under Section 7 of the Code for initiation of the CIRP. By the admission of the Application under Section 7 of the Code by the Adjudicating Authority, CIRP has commenced against the Corporate Debtor and when CIRP has commenced against the Corporate Debtor, all projects which had been undertaken and under construction comes under CIRP. As per the IRP Status Report, IRP has taken a stock of situation by visiting the sites which are under construction. CIRP has been initiated against the Corporate Debtor. CIRP has commenced against all the projects of the Corporate Debtor. CIRP encompasses all the assets of the Corporate Debtor including all Bank Accounts. The IRP has already been appointed and has taken steps by informing all concerned including Banks to add the name of IRP for operation of the Account - the consequence of CIRP is that all assets of the Corporate Debtor come in the control and management of the IRP. All bank accounts are to be operated with the counter signature of the IRP. No amount from any account can be withdrawn without the counter signature and permission of the IRP. IRP under the IBC has responsibility to run the Corporate Debtor as a going concern. Further when Promoters are ready to extend all cooperation with all its staffs and employees to the IRP, we see no reason for not to direct the IRP to proceed with construction of all the projects under the overall supervision and control of the IRP. In CIRP Process, Project-Wise Resolution to be started as a test to find out the success of such Resolution. Keeping an eye regarding construction and completion of the projects, it is opined that an Interim Order dated 12th April, 2022 staying the constitution of CoC be modified to the extent that CoC be constituted for the Eco Village II Project only with all Financial Creditors including Financial Creditors/Banks/Home Buyers. The Interim Order dated 12th April, 2022 continuing as on date is modified to the extent that IRP may constitute the CoC with regard to the Project Eco Village II only - After constitution of CoC of Eco Village II Project, the IRP shall proceed to complete the construction of the project with the assistance of the ex-management, its employees and workmen - application disposed off.
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2022 (6) TMI 719
Liquidation of Corporate Debtor - Non-receipt of Expression of Interest by the Resolution Professional - publication of Form G - HELD THAT:- Since, more than 1000 days has expired from the commencement of CIRP, no Expression of Interest was received and the 180 days CIRP period has expired, the CoC at its 22nd meeting Annexed at pages 48 to 49 of the application held on 18/05/2022 had recommended liquidation of the Corporate Debtor with 100% voting shares - The Resolution Professional has not consented to act as a Liquidator of the Corporate Debtor. Section 33(1)(a) of the Code mandates that the Adjudicating Authority shall pass an order of liquidation where no resolution plan is received before the expiry of the CIRP. Sub-section (2) thereof requires the Adjudicating Authority to pass the liquidation order where the Resolution Professional intimates to the Adjudicating Authority the decision of the Committee of Creditors approved by not less than 66% of the voting share to liquidate the Corporate Debtor - Reading these two provisions together, this Adjudicating Authority is left with no option but to order liquidation of the Corporate Debtor. The Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with subsection (1) - Application allowed.
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2022 (6) TMI 718
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtors - existence of debt and dispute or not - Invocation of Section 95 of the IBC, 2016 - HELD THAT:- The instant Petition is liable to be admitted under section 100 of IBC, 2016. The application filed under Section 95 of IBC, 2016 is hereby admitted under Section 100 of the IBC, 2016. The Insolvency Resolution Process is initiated against the Respondent/Personal Guarantor and moratorium is declared in place of interim moratorium, which begins with the date of admission of the application and shall cease to have effect at the end of the period of 180 days, as provided under Sec 101 of IBC, 2016. Petition admitted - moratorium declared.
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2022 (6) TMI 717
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Doctrine of Merger - merger of order of NCLAT, where there was a specific direction to this Adjudicating Authority to admit the application and pass consequential orders, with Supreme Court order - HELD THAT:- Hon'ble NCLAT in its order dated 02.12.2021 in the last para specifically directed the Adjudicating Authority to pass consequential orders within one month from the date on which copy of this order is produced before the Adjudicating Authority, and further mentioned that during this period, it is open to the parties to endeavour to enter into settlement - as per the Doctrine of Merger, order of Hon'ble NCLAT merged into the order of Hon'ble Supreme Court on 05.05.2022 and one month period mentioned in the order of Hon'ble NCLAT giving liberty to the parties to enter into settlement be considered from 06.05.2022. In compliance of the order dated 02.12.2021 passed by the Hon'ble NCLAT which is merged in the order passed by Hon'ble Supreme Court dated 05.05.2022, this application is admitted and moratorium as described under Section 14 of IBC, 2016 is triggered from the date of this order. Application admitted - moratorium declared.
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2022 (6) TMI 716
Seeking extinguishment of claim of the respondent corporation as envisioned under Clause 6 of the resolution plan - demand raised after approval of Resolution Plan - Section 60(5) read with Section 32A of the IBC, 2016 - HELD THAT:- In the present case, there was a defect in the title of the land itself and this issue has now been resolved after prolonged litigation. This fact was not a subject matter of discussion during the CIRP proceedings. The extra payment of compensation will only remedy the defect in the title to the land and PSIEC can cancel the lease as per the terms and conditions of the original allotment letter. The applicant has claimed that the demand notice can t be sustained in view of the provisions of Section 31 of the I B Code. The additional payment made in the demand notice is a payment towards removing the defect in the title to the land and is not linked to the CIRP. The approved Resolution Plan cannot preclude the control that PSIEC has under law to deal with its properties and the plot in question which is undeniably a public property - this Bench is of the opinion that the enhanced land compensation is a payment towards rectifying the defect in the title to the property and is not statutory dues within the meaning of the provisions of Section 31 of the I B Code - the impugned demand notice issued by the Respondent Corporation is rejected. Seeking release of attached and detained goods - seeking extinguishment of claim of the respondent as envisioned under Clause 6 of the resolution plan - HELD THAT:- It is apparent that at the time of initiation of CIRP, the interest amounting to Rs.29,85,928/- stood as the liability of the applicant company towards payment of interest in view of the CESTAT order. The goods lying in the safe custody were only to secure the payment of the outstanding dues subject to the final orders of the Hon ble High Court of Himachal Pradesh. As per the provisions of the Insolvency and Bankruptcy Code, 2016, it was the duty of the Commissionerate of Central Excise to lodge its claim before the IRP in response to as per Regulation 7 dealing with claims by operational creditors as no claim was filed during the CIRP proceedings. There is no evidence on record to suggest that any such claim was lodged. It is also noted that the alleged offenses were committed prior to the initiation of the CIRP proceedings, the provisions of Section 32A will be squarely applicable to the present case. The impugned attachment and detention orders issued by the respondent is allowed, and the respondent is directed to release the attached and detained goods and any claim of the respondent against the applicant on the issues discussed is ordered to be extinguished - Application allowed.
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2022 (6) TMI 715
Validity of proposed private sale conducted by the liquidator - mode of sale - HELD THAT:- From the facts of the case in hand, it is observed that the applicant-Ex Promoters have not participated in the auctions on 28.08.2019, 27.09.2019, 18.10.2019 and 21.09.2020. It is also observed that the applicant has failed to submit any bid for the auction dated 27.01.2021 in compliance with the direction of this Tribunal dated 25.01.2021. These responses or these lack of responses from the applicants cast serious doubt over their actual intention with regard to the bidding of the corporate debtor. Their subsequent offer of approximately Rs.80 Crores falls way below the reserve price of the last failed auction on 27.01.2021 at Rs.96.02 Crores - The applicant has failed to make out a case that there has been any infringement of these Sections and Regulations on the part of the Liquidator - Application dismissed. Seeking directions to be issued to liquidator for the sale of corporate debtor as a going concern and to consider the bid of the applicant - HELD THAT:- The applicant s plea that a different approach should be adopted for MSME is also not tenable as the applicants are clearly hit by the provisions of Section 29-A of the Code. In any case, the period for issuing any direction to the Liquidator to sell the corporate debtor as a going concern is over as private sale has already taken place in compliance with the provisions of the relevant Sections of the Code and in the related Regulations made thereunder. No case has been made out by the applicants-Ex-Promoters that there has been any violation of the provisions of the Code in the private sale effected by the Liquidator - Application dismissed. Seeking to issue necessary direction to the Liquidator to sell the Corporate Debtor i.e. M/s Supreme Tex Mart Limited (STML) as a going concern in liquidation - HELD THAT:- As clarified in the order pertaining to the earlier two IA Nos.227/2021 and IA No.228/2021, private sale has already taken place in the present case in compliance with the provisions of the relevant provisions of the Code and Regulations made thereunder. It is also seen from the records that the Liquidator has made adequate efforts and attempts to sell the corporate debtor as a going concern through open public auction. No case has been made out in the present application that there has been any short-coming on the part of the Liquidator in this regard - there is no merits in the application and the same is dismissed. Seeking to constitute a Consultation Committee of stakeholders as required under Regulation 31-A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - seeking restraint on Liquidator from taking any decision with regard to sale of liquidation of estate of the corporate debtor - HELD THAT:- The Insolvency and Bankruptcy Board of India, in exercise of the powers conferred by Clause (t) of sub-Section (1) of Section 196 read with Section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016) has introduced Regulation 31A in the Liquidation Process Regulation, 2016. It is also noted that there is no mention of the retrospective application of the provisions in the relevant notification. It is also settled law that all laws are presumed to be prospective unless the Legislature unequivocally expresses its intent for the operation of such provisions retrospectively - Though, in the present case, there is a change in the present Liquidator who was was appointed w.e.f. 01.11.2019, i.e. after the introduction of Regulation 31-A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 in the statute book, but the applicability of provisions relates to the date of liquidation order and not to the date of appointment of the new Liquidator. Furthermore, it is noted that the liquidation process is a time-bound process and any delay caused by introduction of new procedure would result in huge depreciation of the assets under liquidation leading to a lesser recovery of public money owed to the Public Sector Banks. Any such interpretation resulting in delay will be against the objectives of the Code. Regulation 31A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 is not with retrospective effect - Application dismissed. Seeking issuance of appropriate directions to the Liquidator to immediately constitute Consultation Committee of stakeholders as required under Regulation 31A of the IBBI (Liquidation Process) Regulations, 2016 - HELD THAT:- The provisions of Regulation 31A of the IBBI (Liquidation Process) Regulations, 2016 are not with retrospective effect. Thus in the present case, Stakeholder Consultation Committee (SCC) cannot be allowed to be constituted - Application dismissed.
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Service Tax
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2022 (6) TMI 714
SVLDRS - Rejection of declaration filed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - rejection on the ground that the tax dues have not been quantified on or before 30.06.2019 - HELD THAT:- Though the petitioner had filed a declaration in Form SVLDRS-1 on 22.10.2019 in time, last date being 31.12.2019 and later for the second time on 21.12.2019 in Form SVLDRS-1 under category Voluntary Disclosure , it appears that the case of the petitioner was under investigation and a show cause notice was to be issued. Thus, the petitioner was not eligible for the benefit. A reading of the provision of Chapter V of the Finance Act, 2019 containing the provision relating to SVLDR Scheme indicates that though a person who has not been issued with a show cause notice can opt to settle the case under the scheme by offering to pay the tax due as defined in Section 123 of the Act, it is not available to person who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019. Though, it is not mandatory that a show cause notice or an adjudication order should have been issued and/or passed before filing a declaration in Form SVLDRS-1, to be eligible to settle the case under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, the case should not be under any of the exceptions provided in Section 125 of the Act. The case of the petitioner squarely falls under the exception given in Section 125(1)(e) of the Act as the petitioner was subjected to an enquiry/ investigation and the amount of duty involved in the said enquiry or investigation/ audit had not been quantified on or before the 30th day of June, 2019 - the petitioner is therefore not entitled to settle the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme. It has been rightly rejected vide impugned communication dated 31.12.2019. Petition dismissed.
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2022 (6) TMI 713
Validity of recovery notices - impugned show cause notices issued without taking recourse to Section 73 of the Finance Act, 1994 - HELD THAT:- We would like the counsel for the parties to file written submissions not exceeding three pages each, at least three days before the next date of hearing. List the matter on 26.08.2022.
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2022 (6) TMI 712
Rectification of mistake - Levy of service tax - service received by the Airlines/assessee are covered under the tax entry Online data base retrieval and access service or not - extended period of limitation - revenue neutrality - levy of interest and penalty - HELD THAT:- The appeal of the assessee have been allowed on both the grounds of revenue neutrality and non applicability of extended period of limitation. This Tribunal holding the situation as revenue neutral, have not placed reliance on the ruling in the case of Angadpal Indl. P. Ltd., rather appreciating the facts that admittedly the assessee have deposited their output tax and thus in the facts and circumstances whatever service tax, if it was paid (on the input service of OLIDAR under RCM) was available as Cenvat credit and thus the situation is revenue neutral ipso facto. In view of the provisions of Section 73 (2A) of the Finance Act, the demand for the normal period of limitation (i.e. 18 months from the date of show cause notice dated 23.10.2013 or for the period Feb., 2012 to till 23.10.2013) is confirmed - this ROM application filed by Revenue is allowed.
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2022 (6) TMI 711
Refund of CENVAT Credit - rejection of refund on the ground observing that refund was allowable only in case of unutilised credit due to export, and refund was not allowable for not being able to carry forward part of cenvat credit to GST regime - HELD THAT:- The Commissioner (Appeals) has held that the respondent assessee is entitled to refund of the balance amount of cenvat credit. However, he observed that it is subject to merits and compliance under Section 142(9)(b) of the CGST Act. From plain reading of the provisions of Section 142(9)(b) of the CGST Act, it is found that there is no further compliance or merit required to be seen. This section very clearly mentions that, if any, additional amount is found to be available as credit in favour of an assessee on filing of the revised return as per law, and pursuant to such return, if any, amount is found refundable then the same shall be refunded to the assessee under the existing law notwithstanding anything contrary contained in the said law, other than unjust enrichment. There is no further inquiry required in the matter and in view of the categorical finding of the Commissioner (Appeals) - the assessee is entitled to refund - Appeal allowed - decided in favor of appellant.
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2022 (6) TMI 710
Rectification of mistake - digging of borewell for the farmer/ agriculturist for the purpose of irrigation - exemption from Service tax or not - HELD THAT:- The ground raised by the Revenue in the RoM application that the appellant assessee had produced some new documentary evidences before the Tribunal in support of their appeal, whereas the first Appellate Authority has categorically mentioned that apart from four affidavits from four farmers, value of service being Rs.3,18,000/-, nothing was produced before the Court below. The present rectification of mistake application is without merit and is in the nature of an attempt to seek view of the final order of this Tribunal, which is not permissible. Accordingly, this rectification of mistake application is dismissed.
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Central Excise
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2022 (6) TMI 709
Removal of scraps - authorized removal or not - permission under Rule 57F (2) of the Excise Rules for reprocessing of inputs required from the applicant authorities before removal of various types of scraped cables and lead scraps for reprocessing to the factory of job workers or not - loss which waste and scrape of copper arising during reprocessing has to be returned to the factor or not - extension of time if loss not returned within 60 days - suppression and willful mistake or not - invocation of extended period of limitation - HELD THAT:- The order passed by the Tribunal was just and proper and does not call for any interference. Extended period of limitation - HELD THAT:- To invoke the power under Section 11A that is to invoke the extended period of limitation there should be a clear finding of willful mis-statement or suppression on the part of the assessee with an intent to avoid payment of duty. On perusal of the show-cause notice, it is found that there is absolutely no such allegation against the assessee and this aspect of the matter is not disputed by the revenue. The allegation against the assessee was that of not properly maintaining the register required to be maintained in terms of Rule 57F(2) of the Rules. If such is the allegation against the assessee, the adjudicating authority committed a serious error in invoking the power under Section 11A of the Act - A reading of the show-cause notice clearly shows that the information was gathered from the registers and challans maintained by the assessee and the show-cause notice is not on account of any discovery of new facts by the department either by conducting an inspection or based on intelligence. Therefore, the Tribunal was right in holding that the extended period of limitation could not have been invoked by the authority. Non-payment of duty of waste and scrap - HELD THAT:- The decision of the Tribunal in FINOLEX CABLES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, PUNE [ 1995 (4) TMI 190 - CEGAT, NEW DELHI] will clearly apply and support the assessee s case, where it was held that waste and scrap of wires and cables are not excisable goods and the question of their classification under CETA, 1985 does not arise. The learned Advocate appearing for the respondent also placed reliance of the decision of the Tribunal in CCE MUMBAI VERSUS CHEMICAL PROCESS EQUIPMENT PVT. LTD. [ 2018 (1) TMI 47 - CESTAT MUMBAI] wherein it was held that duty proposed on aluminium scrap is not sustainable. The decision in the case of ITEL INDUSTRIES LTD. VERSUS ASSISTANT COMMISSIONER OF CENTRAL EXCISE, DIVISION-I, PALAKKAD [ 2011 (8) TMI 621 - KERALA HIGH COURT] relied on by the revenue is clearly distinguishable on facts where the Court found a clear infraction of the procedure required to be followed / adopted under Rule 57A of the Act. Therefore, the said decision will not render any assistance to the case of the revenue - In the instant case, there is no intermediary product such as cable scrap as the essential character of the telecommunication cables is that it should be capable of conducting electricity. If it fails such a test then it qualifies to be termed as scrap. As already pointed out, there was no allegation of any willful mis-statement or suppression of fact by the assessee with an intent to avoid payment of duty and therefore, the power under Section 11A of the Act could not have been invoked by the authority. The order passed by the Tribunal does not call for interference - appeal dismissed - decided against Revenue.
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2022 (6) TMI 708
Interest on delayed refund - Extended Period of limitation - refund having been made beyond the period of three months from the date of filing of application for refund - Section 6 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and section 11BB of the Central Excise Act, 1944 - HELD THAT:- From bare perusal of Section 6 of the 2020 Act, it is evident that the time limit as and where prescribed in the provisions of Central Excise Act, 1944 is deemed to be extended without any exception. Thus, the time limit prescribed in Section 11BB of the Central Excise Act is deemed to be extended by Section 6 of the 2020 Act. As such, in view of the overriding effect of Section 6 of the 2020 Act, the time limit of three months prescribed for grant of refund u/s 11BB also stands extended till 30 th September, 2020. The order of refund was passed within the extended time limit and, therefore, is saved by Section 6 of the 2020 Act from being subjected to the rigors of Section 11BB of Central Excise Act - It is well settled that Tax Laws are to be interpreted strictly in terms of the terminology employed by legislature. Nothing can be inferred nor implied. Tax statute is to be plainly read without bringing the element of equity into play. Thus, the refund was sanctioned within extended time period prescribed under the 2020 Act and, therefore, the claim for interest in that regard is untenable and thus is hereby rejected - petition dismissed.
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2022 (6) TMI 707
100% EOU - Demand of interest on duty paid on DTA clearances of warehoused goods - goods remained in warehouse for four years - period for which goods may remain in warehouse - what is relevant, intent to use the goods or actual use of goods? - HELD THAT:- There is no dispute that appellant is 100% EOU and the goods imported by them under exemption provided to 100% EOU whereby after warehousing the goods, the same were cleared after four years on payment of Customs duty as per Customs Warehouse provisions - By reading the provisions under Section 61 (1)(aa), it is clear that any goods intended to use by 100% EOU and the same were cleared after warehousing period of three years and in terms of sub-section (2)(i) the assessee was required to clear the goods after expiry of three years. In the present case, the assessee being 100% EOU, imported goods exempted under Notification No. 50/2003-Cus. There is no dispute about the intention of the said goods to be used in the manufacture of final product in the 100% EOU unit of the appellant. Section 61(1) does not provide that goods should be used in the manufacture but it only requires that the goods imported with intention of use in 100% EOU. As regards the intention for use, it is not disputed - Therefore, appellants clearances falls under Section 61(1)(aa), according to which the interest provisions provided under sub-Section (2)(i) shall apply, which provides that interest to be charged only after expiry of three years till the date of payment of duty. The appellant have discharged the customs duty along with interest beyond three years till the date of payment. Therefore, as per statutory provisions, as discussed above under Section 61, the demand of interest over and above the interest paid by the appellant is not sustainable. A similar issue has been considered by this Tribunal in the case of M/S. SUN PHARMACEUTICALS INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE S.T., VADODARA [ 2015 (12) TMI 656 - CESTAT AHMEDABAD] where it was held that there is no occasion to demand interest from the appellant as there is no delay in payment of the duty. Interest can be levied only if there is delay in payment of duty, which is not the case herein. Appeal allowed - decided in favor of appellant.
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2022 (6) TMI 706
Benefit of exemption - Bonafide belief - Manufacture of textile machineries - Applicability of N/N. 06/2002 dated 01.03.2002 - Relax Drum washer Machine - extended period of limitation - proviso to section 11A of the Central Excise Act, 1944 - HELD THAT:- As regard the merit of the case that whether the appellant is eligible for exemption Notification No 06/2006-CE or otherwise, the issue attained finality as per the tribunal s order in the case of COMMISSIONER OF CENTRAL EXCISE ST., SURAT AND OTHERS VERSUS M/S. BHAGYAREKHA ENGINEERS PVT. LIMITED AND OTHERS [ 2014 (8) TMI 778 - CESTAT AHMEDABAD] against the appellant - It was held in the said case that all the machines specified in each of the heading of List 6 or List 2 respectively of Notification No. 6/2002-CE and 6/2006-CE convey only those machine which carried out a specific activity. Accordingly, Sr. No. 6(5) and 2(5) of the relevant exemption notifications has to be considered to be applicable only to the categories of drying machines. As the machine manufactured by the manufacturers is not a drying machine, therefore the benefit of above exemption notifications is not available to the impugned manufacturers. As regard the appellant s belief whether it is the bona fide or otherwise it is observed that it is not only the appellant but there are other manufacturers also who were under the bona fide belief that the goods in question is covered under the exemption Notification No 06/2006-CE . It is evident from the case of M/S ACCURATE TRANS HEAT PVT. LTD. SHRI KEDARMAL MANGILAL DERGER VERSUS COMMISSIONER OF CENTRAL EXCISE, SURAT [ 2018 (7) TMI 973 - CESTAT AHMEDABAD] , in that case also the assessee for the same machine were claiming the exemption notification - From the verification report, it is clear without any doubt that the range superintendent has verified the manufacturing activity physically and thereafter given the report that the product which is manufactured by the appellant is eligible for exemption under notification No. 06/2006-CE. The appellant thereafter filed ER- 1 return on 27.02.2008 therefore, all the information regarding the nature of goods claimed for exemption notification was within the knowledge of the department. Extended period of limitation - suppression of facts or not - HELD THAT:- Once an assessee claim exemption notification and the same is in the knowledge of the department, the department firstly to do the proper verification to ascertain whether the goods on which exemption is claimed is covered under the notification or otherwise. The belief of an assessee may be right or wrong but it is incumbent on the department to ascertain the correctness of the eligibility of the exemption notification. Therefore, by declaring the goods under exemption there cannot be a charge of suppression of fact on the part of the appellant. In the identical case, this tribunal in the case of M/S ACCURATE TRANS HEAT PVT. LTD. SHRI KEDARMAL MANGILAL DERGER VERSUS COMMISSIONER OF CENTRAL EXCISE, SURAT [ 2018 (7) TMI 973 - CESTAT AHMEDABAD] held that there is no suppression of fact and the demand of extended period was set aside - The present case is on better footing on the ground that the superintendent has carried out the verification and specific report in respect of the claim of exemption notification No 06/2006-CE was reported. Thus, there is no suppression of fact with intent to evade payment of duty on the part of the appellant. In the present case the demand for the period 15.04.2004 to February 2008 was raised by the Show cause notice dated 06.04.2009 hence the entire demand is prior to normal period of one year, therefore the same is hit by the limitation - the demand raised in the SCN and confirmed by the Adjudicating Authority is not sustainable being time barred. Appeal allowed - decided in favor of appellant.
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2022 (6) TMI 705
Valuation - inclusion of TCS collected from the buyer over and above the price of the goods, from the buyer of scrap, or not - the TCS amount be treated as amount of money value of additional consideration and Central Excise duty is required to be paid - HELD THAT:- From the plain reading of Section 206C of Income Tax Act,1962, it is clear that the amount collected as TCS has nothing to do with the price of the goods but it is a tax collected from the buyer of the scrap and the same is deposited in the income tax department, therefore, the amount collected as TCS is a tax and in terms of Section 4, the tax is not includable in the assessable value - it is clear that any additional amount if it is flowing from the buyer to the assesse directly or indirectly the same is includable in the assessable value meaning thereby any amount which is coming from the buyer and retained by the appellant alone will be includable in the assessable value. In the present case the TCS is collected not as a additional consideration but explicitly as tax and same is deposited to the income tax department, therefore, it cannot be said that the amount of TCS belongs to the appellant - the amount of TCS cannot be considered as additional consideration flowing from the buyer to the appellant accordingly, the same is not includable in the assessable value for charging Excise Duty - appeal allowed - decided in favor of appellant.
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2022 (6) TMI 704
Entitlement to interest on the amount collected during investigation - amount was paid under protest - Section 35FF of the Central Excise Act - HELD THAT:- The appellant is entitled to interest from the date of deposit or date of encashment of the cheque, till the date of grant of refund - The appellant is entitled to interest on refund @ 12% p.a., as held by this Tribunal in the case of M/S. PARLE AGRO PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS SERVICE TAX, NOIDA (VICE-VERSA) [ 2021 (5) TMI 870 - CESTAT ALLAHABAD] following the ruling of the Apex Court in the case of SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [ 2006 (1) TMI 55 - SUPREME COURT] . The Adjudicating Authority is directed to grant balance amount of interest @ 12% per annum within a period of 45 days from the date of receipt of a copy of this order - appeal allowed - decided in favor of appellant.
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2022 (6) TMI 703
CENVAT Credit - input services - GTA services availed in respect of goods supplied by them from their premises to the buyers premises - goods sold on FOR basis - Circular No. 988/12/2014-CX dated 20th October, 2014 - HELD THAT:- The issue regarding the sale being FOR basis has been raised for the first time in Tribunal. In terms of the aforesaid Circular, the matter needs to be re-examined by the lower authorities and if the sales are on FOR basis, the benefit of Circular needs to be granted to the appellant by allowing the credit. The matter is remanded to the original authority to examine if the goods have been supplied on FOR basis. If it is found that the goods have been supplied on FOR basis, the credit has to be allowed to appellant - Appeal allowed by way of remand.
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2022 (6) TMI 702
CENVAT credit - input services - outward transportation - place of removal - denial of cenvat credit on outward transportation only on the basis of Hon ble Supreme Court judgement in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [ 2018 (2) TMI 117 - SUPREME COURT] , where it was held that Cenvat Credit on goods transport agency service availed for transport of goods from place of removal to buyer s premises was not admissible to the respondent - HELD THAT:- Subsequent to this Apex Court judgement, this Tribunal considering the issue of Cenvat on outward transportation in the case of M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [ 2019 (2) TMI 1488 - CESTAT AHMEDABAD] held that cenvat credit is admissible, relying on the Board Circular which was issued subsequent to the Hon ble Supreme Court judgement. This subsequent development on the legal issue has not been considered by the lower authorities. Further, the documents shown by the Learned Counsel such as purchase orders, invoices, Chartered Accountant Certificate, clearly shows that the prices are FOR price which is inclusive of freight, Insurance etc. and on such price excise duty was charged, if it is so, then the appellant shall be entitled for cenvat credit, however, the facts regarding the FOR price and sale of goods have not been properly verified by the lower authorities, therefore, this aspect needs to be relooked. Appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2022 (6) TMI 701
Maintainability of petition - availability of alternative remedy of appeal - Validity of assessment order - works contract - transfer of the property took place on the ONGC platform - part of the State of Maharashtra or not - movement of goods from the State of Maharashtra to Mumbai High - inter-state sale or local sale - case of petitioner is that the transfer of the property in goods imported in execution of the work contract is outside the State of Maharashtra and thus the State of Maharashtra has no jurisdiction to levy tax - concept of a separate delivery of such goods in such a contract - HELD THAT:- It is not in dispute that the petitioner has filed this writ petition under Article 226 of the Constitution of India impugning the order of assessment passed by the assessing officer on 30th December, 2015 under section 23(4) of MVAT Act. Under section 26 of the MVAT Act, the remedy of filing an appeal against the assessment order passed by the assessing officer under section 23(4) of MVAT Act is available. The Supreme Court in case of COMMISSIONER OF INCOME TAX OTHERS VERSUS CHHABIL DASS AGARWAL [ 2013 (8) TMI 458 - SUPREME COURT] while dealing with the order of assessment passed under section 148 of the Income Tax Act, 1961, held that it is settled law that non-entertainment of petitions under writ jurisdiction of High Court when an efficacious alternative remedy is available is a rule self-imposed limitation. It is essentially the rule of policy, convenience and discretion rather than the rule of law. High Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226. If this Court entertains this petition impugning the assessment order without directing the petitioner to avail alternative remedy available under section 26 of the MVAT Act and if the petition is rejected on its own merits, the petitioner in that event would not be able to subsequently avail of alternative remedy by way of an appeal under section 26 of the MVAT Act which would be prejudicial to the interest of the petitioner. On this ground also we are not inclined to entertain this writ petition impugning the assessment order directly in this writ petition. The petitioner has not made out any exceptional circumstances to entertain the petition for entertaining the writ petition without availing alternative efficacious remedy available to the petitioner. The writ petition is dismissed as not maintainable on the ground of alternative efficacious remedy under section 26 of the Maharashtra Value Added Tax Act, 2002 not availed by the petitioner.
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2022 (6) TMI 700
Validity of assessment order - levy of interest on belated payments of taxes in terms of Section 42(3) of the TNVAT Act - HELD THAT:- Admittedly, no show cause notice for the levy of interest was ever issued - One feature in the 2016 assessments is that the computations refer to the position that admitted taxes, as per the returns filed under the Act, were itself not settled. In such an instance, the petitioner is liable to pay interest in terms of the Section 42 of the Act in regard to the admitted tax and such a levy is automatic. However, the impugned notice does not make a distinction between the components of the tax being admitted tax tax levied on additions made in assessment upon which interest has been levied, had this been done, and the assessing authority made a bifurcation as regards the interest related to the belated payment of admitted tax and the interest relating to the tax on added turnover, there would have been no necessity for further discussion in relation to the first category of interest - All that would have remained is for the assessee to make its submission in regard to the second component of interest, that is the interest on the payments of tax on additional turn over. However, this has not been done, as a result that there is no clarity on the bifurcation and consequently, the interest relating to the two components. Needless to say, if the admitted tax has been paid in time, the question of levying interest in 2019 for the remainder of the taxes, after a period of four years when the tax was paid, will not arise as the authorities are expected to have raised demands of interest concurrent with the tax demand or in any event, within a reasonable period of time thereafter. Petition disposed off.
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Indian Laws
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2022 (6) TMI 699
Dishonor of Cheque - legally enforceable debt or not - framing of charges - acquittal of the accused - Section 138 of NI Act, 1881 - HELD THAT:- It is evident that the complainant asserted that after the registration of the Sale Deeds she and her co-sharers handed over physical possession of the land to the accused person herein. In her examination in chief on affidavit, the complainant herein stated that on the date of registration of those deeds itself they handed over such possession to the accused person herein, by shifting their stand as made in the complaint petition. In the cross-examination, the complainant admitted that the accused person never took any loan from her. She again volunteered during such cross-examination that she deposited the cheque only after handing over possession of the land to the accused so far. Even as on date if possession is delivered, would immediately pay the cheque amount. From the affidavits, more particularly, as per the affidavit under Exbt.A, it appears that the parties to the agreement for sale, ultimately, shifted from their original agreement due to changed circumstances of non-registration of those deeds. They altered the terms of their contract in respect of payment of money that it would be paid by the accused only after possession of the purchased land was handed over to him by the complainant. Such novation is permissible under Section 62 of the Indian Contract Act, 1872. But the complainant has suppressed the said facts and brought a new story through her complaint petition as indicated above. Unless the complainant could show that possession was duly handed over after registration of those sale deeds and thereafter the cheque was deposited by her, she cannot claim any legally enforceable debt in her favour to be discharged by the accused. This Court is not inclined to interfere with the findings of the Courts below and the order stands confirmed and the prayer in revision stands rejected.
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2022 (6) TMI 698
Dishonor of Cheque - vicarious liability of authorized signatory/signatory of the cheque on bouncing of the cheque - HELD THAT:- This court finds that the cheque was issued on 06.07.2019 by the Company amounting to Rs.5 lakh. It was presented on 09.07.2019. But it was not encashed and returned with endorsement stop payment . In the complaint it has specifically been pleaded in paragraph 7 that the accused were responsible for conduct of the business at the relevant point of time. This fact has not been denied by the applicants in this petition. Section 141 of the Negotiable Instruments Act provides offences by companies. It provides that if the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. The Hon'ble Supreme Court considered Section 141 in the judgment relied by learned counsel for the applicants in the case of SMS PHARMACEUTICALS LTD. VERSUS NEETA BHALLA [ 2005 (9) TMI 304 - SUPREME COURT] and held that the liability arises on account of conduct, act or omission on the part of a person and not merely on account of holding an office or a position in a company. Therefore, in order to bring a case within Section 141 of the Act the complaint must disclose the necessary facts which make a person liable. There is no denial that stop payment was made. A plea has also been taken that Gurucharan Singh, who has signed the Cheque was neither Director nor authorized signatory of the Company on the date of issuance of Cheque. But nothing has been placed before this court in support of this plea and disclosed as to who was the authorized signatory and as to how and why the applicants were not responsible to the Company for conduct of the business of Company, whereas the applicant no.1 is the Company and applicants no.2 to 4 are the Directors of the Company. Therefore, it can not be said that they are not responsible. Application dismissed.
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