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TMI - e-Newsletter TaxTMI Additions (Benefit) u/s 28(iv) - Expenditure... TaxTMI Addition of bogus sales - difference in opinion... TaxTMI Revision u/s 263 - CSR expenses - admissibility as... TaxTMI Validity of reopening of assessment - The High... TaxTMI Correct head of income - Income from leasing or... TaxTMI Cancellation of GST registration of petitioner -... TaxTMI Violation of principles of natural justice - Mode... TaxTMI Classification of goods - rate of tax - Classic... TaxTMI Seeking activation of GSTIN and granting final... TaxTMI Recovery of tax arrears from the Former director of... TaxTMI Grant of Regular Bail - Forged tax invoices -... TaxTMI Income taxable in India or not - Salary income -... TaxTMI Jurisdiction of AO - Validity of notice issued u/s... TaxTMI Reopening of assessment - The Appellate Tribunal... TaxTMI Eligibility for concessional rate of GST - Biomass... TaxTMI Latest Case-Laws TaxTMI Latest Notifications + Circulars TaxTMI GST Council Decisions TaxTMI

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TMI Tax Updates - e-Newsletter June 28, 2021 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Highlights / Catch Notes GST: Reversal of IGST - Validity of notice - Revenue submits that, the impugned communication is only an intimation of IGST payable and consequentially, a request to the petitioner to reverse the same. If that were so, then the impugned intimation shall be construed to put the petitioner to notice as to the proposal to reverse the same. - The petitioner will file a reply to the same within a period of four weeks from today - HC Visit to Get Source GST: Validity of summons issued u/s 70 - Proper officer - search/inspection proceedings u/s 67 of the CGST Act - Mr.Rastogi appears to have misread the powers of the Board to assign the officers to perform the function as proper officers in relation to the various Sections of the CGST Act, as the delegation of powers by the Commissioner to the other authority or the officer as contemplated in Section 167 of the CGST Act. The Court, therefore, does not find any substance in the submission of Mr.Rastogi that the respondent No.3 was not the ‘proper officer’ as per the definition contained in Section 2(91) of the CGST Act, and therefore, had no powers to issue summons under Section 70 of the CGST Act. - HC Visit to Get Source Income Tax: Accrual of income - real income - since the basis, modality and the amount on which the capacity charges, deemed generation charges and capacity Index Incentives were to be determined/ quantified, it was difficult for the assessee to ascertain the correct and actual amount of charges recoverable from UPCL. - Deemed Generation Charges and capacity index incentive charges during the FY 2015-16 relevant to AY 2016-17. Once the correct amount of income has already been offered to tax in AY 2016-17, we find no merit in the addition made by the AO in the present order of assessment. - AT Visit to Get Source Income Tax: Deduction u/s 80IC - substantial expansion - Initial assessment year - in case substantial expansion is carried out as defined in clause (ix) of Sub-section-8 of Section 80IC by such an undertaking or enterprise, within the aforesaid period of 10 years, the said previous year in which the substantial expansion is undertaken would become ‘initial assessment year’ and from that assessment year, the assessee shall be entitled to 100% deduction of profits and gains. - AT Visit to Get Source Income Tax: Penalty u/s 271(1)(c) - Penalty under section 271(1)(c) of the Act is leviable to be imposed only where the assessee has concealed its particulars of income or furnished inaccurate particulars. Action of making addition on ad-hoc basis does not result into imposition of penalty u/s. 271(1)(c) of the Act and hence cannot be termed as either concealment or furnishing of inaccurate particulars of income - AT Visit to Get Source Income Tax: Revision u/s 263 - Once the valuation report has not been sent by the valuation officer to the assessing officer/assessee, within the period stipulated by the act that alleged report cannot found basis of "RECORD" to invoke the judicial under section 263 by the revisional Commissioner. - Merely the assessing officer has formed an opinion which is not in line of thinking of the revisional Commissioner and there are two possible views, then also the revisional Commissioner cannot exercise the power for provision under section 263 - AT Visit to Get Source Income Tax: Notional short term capital gain on transfer or otherwise of some real estate asset - Since assessee inadvertently shown the property as capital asset and moved an application before the lower authority u/s. 154 for rectification of the order but ld. A.O. did not pay and any heed and same property was shown as investment in the individual balance sheet of the assessee. In such case notional capital gain cannot be added. - AT Visit to Get Source Income Tax: Reopening of assessment u/s 147 - additional depreciation u/s. 32(1)(iia) disallowed - ld. CIT(A) has no power under the provision of law to give direction to the AO for reopening of assessment. Thus the reasons recorded for reopening of assessments is bad in law. - AT Visit to Get Source Income Tax: Addition made on account of gains from cancellation of forward contract - Allegation that, the so-called asset could not be created not any foreign exchange loan was taken by the assessee for such assets - The intended loan have been raised for the purpose of acquisition of plant & machinery and gain so earned on fluctuation of foreign exchange rate was on capital account. Thus, the gain so earned would partake the character of capital asset. - AT Visit to Get Source Income Tax: Reopening of assessment u/s 147 - addition made on protective basis - the present appeal is being decided only on the basis of the fact that substantive addition has attained finality. In the circumstances, protective addition cannot be sustained. - AT Visit to Get Source Income Tax: Revision u/s 263 - unsecured loans receipts - Given that the AO basis a mere confirmation so filed by the assessee which in reality is not a confirmation in absence of signature and authentication has accepted the loan transaction is clearly not just a case of lack of enquiry but a case of no enquiry rendering the order so passed as clearly erroneous and prejudicial to the interest of Revenue - AT Visit to Get Source Income Tax: Addition based on statements recorded u/s. 132(4) - Effect of retraction of statements recorded u/s. 132(4) of the Act - Taxation of capitation fee alleged to have been received in cash by the assessee for admission of students - there was no evidence suggesting that the assessee charged capitation fee and consequent thereto the AICTE dropped the complaint against the assessee. - We do not find any reason to interfere with the orders of CIT(A) accordingly, it is justified - AT Visit to Get Source Income Tax: Reopening of assessment u/s 147 - Reassessment beyond the period of four years - sufficiency of the reasons cannot be gone into in a writ proceedings - Perusal of the above findings of the 3rd respondent would be sufficient to hold that the requirements of Section 147 of the Act has been complied with and the initiation of reopening proceedings is well within the provisions of the Act and therefore, the respondents are at liberty to proceed with re-assessment by following the procedures - HC Visit to Get Source Income Tax: Reopening of assessment u/s 147 - TP Adjustment - The impugned order is not a suo-motu proceedings initiated by the Transfer Pricing Officer under Sub-Section 2B of Section 92CA of the Act and therefore, Sub-Section 2C of Section 92CA of the Act would not be applicable. - This Court is of the considered opinion that there is no infirmity or perversity as such in respect of the order impugned passed by the Transfer Pricing Officer with regard to the reference made by the Assessing Officer regarding certain international transactions or otherwise. - HC Visit to Get Source Customs: Levy of fine and penalty - Valuation of imported goods - There are no merit in the order of the authorities below in mechanically imposing fine and penalty on the appellant. In the order of the adjudicating authority, no justification has been recorded for imposition of penalty and directing confiscation of the goods - there are no circumstances brought on record to show that the value declared by the appellant is intentionally manipulated or suppressed - fine and penalty set aside - AT Visit to Get Source Customs: Refund of IGST - Duty drawback - Since interpretation under GST/IGST is involved, the orders are set aside and the matter is remanded back to the file of the Adjudicating Authority for fresh disposal in accordance with the law as declared/interpreted by courts - AT Visit to Get Source Customs: Levy of late fee charges - delay in filing the bills of entry - under Notification No. 26/2017 itself, it is stated that such late fee can be waived if sufficient reasons are furnished before the proper officer. Thus, it is a condonable lapse. - For all these reasons and most importantly since the period involved is during the transition period of GST, the late fee charges imposed is not warranted - Appeal allowed - AT Visit to Get Source Customs: Recovery of Customs Dues - non-fulfilment of export obligation under Export Promotional Capital Goods (EPCG) Authorization - entitlement to release bank guarantee or not - In view of the facts and circumstances, thirty days time is granted for the purpose of submission of EODC by the writ petitioner - HC Visit to Get Source Customs: Classification of imported goods - Art paper of different descriptions - It is evident from the seizure that the importer had classified the Art paper of different descriptions falling under CTI 4810, which is definitely “Stock Lot” of paper, as per DGFT Notification No. 45/2015-20 under 4811 to circumvent the prohibition imposed. - by introducing an impermissible yardstick namely, GSM variation, the respondents have arrived at a finding that the imported goods constitute a stock lot. This is patently illegal. - HC Visit to Get Source IBC: Validity of order of Adjudicating authority (NCLT) observations against the IRP to refer the matter to IBBI. - Order of NCLT relies more on uploading of the Order on website, rather than finding if or not the Order was actually communicated to parties and IRP. Admission Order para 11 even mentioned e-mail address of IRP. Communication could have been sent even on e-mail. - Therefore no fault on the part of IRP for not having knowledge of order of NCLT - Paragraphs 24 and 25 of the Impugned Order set aside - AT Visit to Get Source Service Tax: Levy of Service tax - Noticepay - amount received as consideration towards tolerating the act of breach of contract by the employee - declared service or not - mployer cannot be said to have rendered any service per se much less a taxable service and has merely facilitated the exit of the employee upon imposition of a cost upon him for the sudden exit - No service tax - AT Visit to Get Source Service Tax: Rejection of application before Settlement Commission - The provisions for settlement are provided in a statute enabling the aggrieved person to come out with true facts and settle the issue peacefully to avoid prolongation and protraction of disputes. Thus, the settlement provisions are made for the welfare of the assessees and the said provisions are to be implemented in its spirit and the provisions for settlement cannot be dealt with reference to the disputes, if any, exist between the parties - HC Visit to Get Source Central Excise: CENVAT Credit - supplementary invoices - In the present case there is no sale of goods, but the differential duty has been paid on stock-transfer of goods by the sister concern to the appellant-assessee - the entire exercise is revenue neutral and therefore Cenvat credit cannot be denied on the supplementary invoices issued to the sister concern for the differential duty paid - AT Visit to Get Source VAT: Validity of provisional assessment order - The procedures to be followed in the department for assessment are well settled. Thus, the authorities competent are not expected to commit such jurisdictional errors in a routine manner. In these circumstances, review of such orders by the higher authorities are imminent to form an opinion that there is willful or intentional act for commission of such jurisdictional errors, enabling the assesses to get exonerated from the liability. Liability and jurisdictional errors are distinct factors, and therefore, Courts are expected to provide an opportunity to the Department to decide the liability on merits and in accordance with law with reference to the provisions of the Act and Rules and guidelines issued by the Department. - HC Visit to Get Source Articles ICAI Training Rules Revised : Key Highlights INFLUNECE OF PRICE IN RELATED PARTY TRANSACTIONS Notifications GST - States 15/2021-State Tax - dated 16-6-2021 - Himachal Pradesh SGST Himachal Pradesh Goods and Services Tax (Fourth Amendment) Rules, 2021. 14/2021-State Tax - dated 15-6-2021 - Himachal Pradesh SGST Seeks to extend specified compliances falling between 15.04.2021 to 30.05.2021 till 31.05.2021 in exercise of powers under section 168A of Himachal Pradesh Goods and Services Tax Act, 2017. F A 3-48-2019-1-V-(38) - dated 17-6-2021 - Madhya Pradesh SGST Amendment in Notification No. F A 3-48-2019- 1-V-(09) dated 23rd February 2021 F A 3-05-2021-1 -V-(39) - dated 17-6-2021 - Madhya Pradesh SGST Madhya Pradesh Goods and Services Tax (Amendment) Rules, 2021 G.O. Ms. No. 19 - dated 18-6-2021 - Puducherry SGST Amendment in Notification No. G.O. Ms. No. 9, dated the 1st April, 2020 G.O. Ms. No. 18 - dated 18-6-2021 - Puducherry SGST Seeks to rationalize late fee for delay in filing of return in FORM GSTR-7 G.O. Ms. No. 17 - dated 18-6-2021 - Puducherry SGST Amendment in Notification No. G.O. Ms. No. 2, dated the 3rd January, 2018 G.O. Ms. No. 16 - dated 18-6-2021 - Puducherry SGST Amendment in Notification No. G.O. Ms. No. 9, dated the 23rd January, 2018 G.O. Ms. No. 14 - dated 18-6-2021 - Puducherry SGST Provide relief by lowering of interest rate for the month of March and April, 2021 Income Tax 75/2021 - dated 25-6-2021 - IT Seeks to amend Notification No. 85/2020, dated the 27th October, 2020 74/2021 - dated 25-6-2021 - IT Modification of Notification Nos. 93/2020 dated the 31st December, 2020, No. 10/2021 dated the 27th February, 2021, No. 20/2021 dated the 31st March, 2021 and and No. 38/2021 dated 27th April, 2021 Circulars / Instructions / Orders SEBI - SEBI/HO/IMD/IMD-I/DOF5/P/CIR/2021/582 - dated 25-6-2021 Alignment of interest of Key Employees of Asset Management Companies (AMCs) with the Unitholders of the Mutual Fund Schemes SEBI - SEBI/HO/IMD/IMD-II DOF3/P/CIR/2021/583 - dated 25-6-2021 Prudential norms for liquidity risk management for open ended debt schemes SEBI - SEBI/HO/IMD-I/DF6/P/CIR/2021/584 - dated 25-6-2021 Amendment to SEBI (Alternative Investment Funds) Regulations, 2012 Income Tax - 12/2021 - dated 25-6-2021 Extension of time limits of certain compliances to provide relief to taxpayers in view of the severe pandemic Case Laws: GST 2021 (6) TMI 918 Validity of summons issued u/s 70 - Proper officer - search/inspection proceedings u/s 67 of the CGST Act - EOU Scheme - Refund/allow recredit - Refund of duty paid on the goods exported towards fulfillment of the export obligation - fraud or any willful misstatement or suppression of facts - Section 2(91) of CGST Act read with Section 20 of IGST Act - HELD THAT:- From the bare reading of Section 70 of the CGST Act, it clearly emerges that the proper officer has the power to summon any person whose attendance he considers necessary either to give evidence or to produce the documents in any inquiry in the same manner in the case of a Civil Court under the CPC. Now, as per the definition of 'proper officer' as contained in Section 2(91), a 'proper officer' in relation to any function to be performed under the CGST Act means the Commissioner or the officer of the Central Tax, who is assigned that function by the Commissioner in the Board - the respondent No.3 is a proper officer in relation to the function to be performed under the CGST Act as contemplated under Section 2(91), and as such, was entitled to issue summons under Section 70 of the CGST Act in connection with the inquiry initiated against the petitioner. In the instant case, the Board has assigned the officers to perform the function as proper officers in relation to various Sections of CGST Act and the Rules made thereunder by issuing the Circular in question, the question of issuing Notification for delegation of powers by the Commissioner as contemplated under Section 167 of the CGST Act does not arise. Mr.Rastogi appears to have misread the powers of the Board to assign the officers to perform the function as proper officers in relation to the various Sections of the CGST Act, as the delegation of powers by the Commissioner to the other authority or the officer as contemplated in Section 167 of the CGST Act. The Court, therefore, does not find any substance in the submission of Mr.Rastogi that the respondent No.3 was not the proper officer as per the definition contained in Section 2(91) of the CGST Act, and therefore, had no powers to issue summons under Section 70 of the CGST Act. Heavy reliance on the interim order passed by this Court in case of Bhumi Associates (supra), it may be noted that apart from the fact that the said order is an interim order, the guidelines issued in the said interim order appear to have been issued in connection with the voluntary payment made by the person during the course of search and seizure proceedings conducted under Section 67 of the CGST Act. Admittedly, no search and seizure proceedings have taken place under Section 67 of the Act, in case of the petitioners. In the instant case, the petitioners having made payment under Section 74(5), they appear to have informed the Proper Officer of such payment in the Form GST DRC-03 (Annexure-F) as contemplated in Rule 142(2) of the said Rules. Petition dismissed. 2021 (6) TMI 913 Provisional attachment of overdraft bank account - Section 83 of the Central GST Act - HELD THAT:- The Petitioner has approached this Court without availing the aforementioned remedy available to it in law. Consequently, the Court directs that the Petitioner shall, not later than 1st July 2021, file an objection to the order of provisional attachment of its bank account before the Commissioner and upon the receipt of such objection, the Commissioner shall proceed to fix a date for hearing the Petitioner, which date should be communicated to the Petitioner at least three days in advance. After hearing the Petitioner, the Commissioner shall pass a reasoned order in terms of Section 83 of the OGST Act and Section 159 (5) and (6) of the OGST Rules not later than 2nd August, 2021. The said order shall be communicated to the Petitioner not later than 9th August, 2021. Petition disposed off. 2021 (6) TMI 912 Seeking grant of Anticipatory Bail - power to summon - compounding of offence - evasion of tax/duty - HELD THAT:- In view of the statement given by Sri D.C. Mathur, counsel for respondent no. 2, application for grant of anticipatory bail application is premature. This court has no reason to doubt the undertaking given by Sri Mathur that unless and until after receiving evidence and documents produced by the applicant, if satisfaction is arrived in terms of their being any suppression of fact or mis-statement or improper availment of input tax credit, no action is warranted to be taken to arrest the applicant. The application is premature and is not maintainable at this stage - application dismissed. 2021 (6) TMI 911 Validity of notice - Non-Service of SCN - Reversal of IGST - communication amounts to a demand in respect of which there has been no proper show cause notice or notice of any sort - HELD THAT:- The respondent has filed a counter wherein at paragraph 5 he states that the impugned communication is only an intimation of IGST payable and consequentially, a request to the petitioner to reverse the same. If that were so, then the impugned intimation shall be construed to put the petitioner to notice as to the proposal to reverse the same. The petitioner will file a reply to the same within a period of four weeks from today and further proceedings may be taken thereafter in accordance with law - Petition closed. Income Tax 2021 (6) TMI 915 Reopening of assessment u/s 147 - TP Adjustment - order impugned passed by the Transfer Pricing Officer with regard to the reference made by the Assessing Officer regarding certain international transactions or otherwise - suo-motu powers conferred to the Transfer Pricing Officer under Sub-Section 2B of Section 92 CA - Whether re-opening of assessment proceedings would not fall under Sub-Section 2B or Sub-Section 2C of Section 92 CA of the Act.? - HELD THAT:- When the assessment includes reassessment, the Assessing Officer while conducting the reassessment proceedings, is undoubtedly empowered to seek further informations or details to cull out the truth and the very purpose and object of reassessment contemplated under Section 147 of the Act is to ensure that the assessee pay the tax as applicable. The original assessment is made pursuant to the return of income filed by the assessee. The scope of scrutiny or enquiry at the time of original assessment is entirely different. Thus, in the event of re-opening of assessment and during re-assessment, the authorities competent necessarily have to cull out more details and informations from the authorities concerned for the purpose of ascertaining the truth regarding the tax escaped assessment - the purpose of Section 147 for reopening of assessment cannot be restricted nor the power of reassessment of the Assessing officer for collecting the evidences or materials or informations from the authorities concerned cannot be crippled down by wrongly interpreting the other provisions of the Income Tax Act. Constructive interpretation is imminent in such circumstances in order to ensure that the purpose and object of the Act is met with in its letter and spirit. The impugned order is not a suo-motu proceedings initiated by the Transfer Pricing Officer under Sub-Section 2B of Section 92CA of the Act and therefore, Sub-Section 2C of Section 92CA of the Act would not be applicable. The circumstances contemplated under Sub-Section 2B of Section 92 CA is not applicable in the present case, in view of the fact that the petitioner admittedly submitted the Audit Report under Section 92-E of the Act. This Court is of the considered opinion that there is no infirmity or perversity as such in respect of the order impugned passed by the Transfer Pricing Officer with regard to the reference made by the Assessing Officer regarding certain international transactions or otherwise. Thus, the petitioner has not established any acceptable ground for the purpose of considering the relief as such sought for in the present writ petition. Reopening of assessment for credit for withholding tax paid in Singapore cannot be allowed as TDS - HELD THAT:- As apparent that the amount lent to the Singapore company was actually borrowed by the assessee company and interest expenditure on money borrowed has also been claimed resulting in no real interest income on netting. Hence, in the absence of real interest income offered in India, relief under Section 90 of the Income Tax Act, 1961 on the tax withheld at Singapore may also be not available. Thus, the Assessing Officer has reason to believe that the income has escaped assessment. Such a finding is relevant for the purpose of constituting a Prima-facie case for re-opening of assessment by invoking Section 147 of the Act. The petitioner has to defend his case by availing the opportunities to be provided by the Department in this regard. As during the process of re-opening, the Assessing Officer requested details and informations from the Transfer Pricing Officer and the report in this regard furnished by the Transfer Pricing Officer is also to be considered and a final order of assessment is to be passed as expeditiously as possible by following the procedures contemplated and by affording opportunity to the petitioner / assessee. 2021 (6) TMI 914 Reopening of assessment u/s 147 - Reassessment beyond the period of four years - HELD THAT:- What is required is to scrutinize the reasons and sufficiency of the reasons need not be gone into by the High Court in a writ proceedings where the assessment is sought to be reopened by invoking Section 147 - Thus, sufficiency of the reasons cannot be gone into in a writ proceedings. High Court cannot conduct a rowing enquiry in respect of the accounts details as well as the technicalities involved in respect of the transactions. All those aspects are to be considered by the AO while passing the final order of reassessment. Perusal of the above findings of the 3rd respondent would be sufficient to hold that the requirements of Section 147 of the Act has been complied with and the initiation of reopening proceedings is well within the provisions of the Act and therefore, the respondents are at liberty to proceed with re-assessment by following the procedures and by affording opportunity to the writ petitioner/assessee, as contemplated. The respondents are directed to complete the said exercise of completion of the re-assessment proceedings within a period of four months from the date of receipt of a copy of this order. 2021 (6) TMI 903 Addition based on statements recorded u/s. 132(4) - Effect of retraction of statements recorded u/s. 132(4) of the Act - Taxation of capitation fee alleged to have been received in cash by the assessee for admission of students in L N Welingkar Institute of Management under management quota - statement of Samir kharkanis recorded u/s.132(4) of the Act in respect of seized document from his residence, Shri Samir Karkhanis explained his role with the prospective students and their parents regarding negotiations for cash donations, modus operandi, receipt of capitation fee not only for this A.Y. and also for passed 6 years - HELD THAT:- We note that the basing on the statements of employees together with the seized torn piece document the DCIT, Central Circle lodged a complaint to AICTE stating that the assessee was involved in accepting the capitation fee In pursuance of such complaint the AICTE issued show caused notice to the assessee and in response to which the assessee submitted reply along with supporting documents. The AICTE put up the said case before the standing complaint committee consisting of Justice P.S. Patankar, Professor Manik Rao Solunke and Professor K. Tirumaran. After detailed discussion, the three members committee by referring to a letter dated 07-02-2013 issued by the western regional office of AICTE held that there was anything wrong in the admissions and absolutely no evidence or any document suggesting that the assessee was charging capitation fees or donations . The AICTE again put up the said report of three members committee before the One Man Justice P.C. Jain, committee for vetting/final opinion. The One Man Justice committee fully agreed with the report of three members committee. On perusal of the finding of the Hon‟ble One Man Justice committee clearly establishes that there was no evidence suggesting that the assessee charged capitation fee and consequent thereto the AICTE dropped the complaint against the assessee. Therefore, the arguments made by the ld. DR are rejected. AO does not have jurisdiction to make the addition in the hands of the assessee without any incriminating material found as a result of search - We find that there is no incriminating evidence found as a result of search action indicating undisclosed income. Therefore, we are of the considered opinion that the AO had failed to bring on record any material suggesting the receipt of capitation fee and there is no basis to infer that the assessee had been receiving capitation fee during any previous year relevant to the assessment years under consideration. In the absence of any incriminating material suggesting the undisclosed income, the question of extrapolation of addition in the previous year or subsequent year does not arise. Therefore, We do not find any reason to interfere with the orders of CIT(A) accordingly, it is justified. Thus, grounds raised by the revenue fails, hence, are dismissed. Application under Rule 27 of the ITAT Rules questioning the validity of assessment order - No ground questioning the validity of proceedings u/s. 153C of the Act raised for any of the assessments and no decision rendered by the CIT(A) on such validity of assessment. It is an established principle that Rule 27 would not extend to permit respondent-assessee scope of an appeal to question the decision on such issues which are not subject matter of the appeal. It is also decided that the assessee who has not appealed cannot be permitted to raise a ground which will adversely work against the appellant-revenue. 2021 (6) TMI 899 Additions towards amount received towards interest - Loan used for the acquisition of any capital asset - waiver or remisssion of loan - Addition being amount remitted on account of unconditional and irrevocable standby letter of credit issued by National Australian bank and adjusted against loan received from GECSI holding that this receipt is revenue in nature - HELD THAT:- The only argument of the AR is that the issue squarely covered in favour of the assessee by the decision of the honourable Supreme Court in case of Commissioner versus Mahindra and Mahindra Ltd [ 2018 (5) TMI 358 - SUPREME COURT] and therefore the issue may be setaside to the file of the learned assessing officer with a direction to consider the claim of the assessee in view of this decision. DR did not have any objection to this aspect if the matter may be examined once again in the light of the decision of the honourable Supreme Court. Moreover, the assessee also needs to establish that the purpose of the loan was for purchase of terminals. There is another twist in the case of the assessee, which shows that the loan amount has been paid by Tabcorp Ltd to GE capital services India Ltd on behalf of the assessee, and further the original loan was credited to the overdraft account of the assessee. CIT A has categorically stated that assessee has not produced any evidence that the assessee has purchased any terminals. There was no evidence available that whether the loan was used for the acquisition of any capital asset or not. Moreover, the learned assessing officer while making the addition has also not stated that under which provisions of the act the above income is treated as business income of the assessee. Therefore, we set-aside the whole issue back to the file of the learned assessing officer with a direction to the assessee to justify its claim in view of the decision of MAHINDRA AND MAHINDRA LTD. THRG. M.D. AO may examine the claim of the assessee and decide the issue afresh.Disallowances on depreciation on assets in the premises sealed by the government of India due to ban of lottery business. Addition on account of interest on inter corporate deposit given to MAC Solution Pvt Ltd.- HELD THAT:- We have carefully considered that the above issue is squarely covered in favour of the assessee by the decision of the coordinate bench in [ 2016 (1) TMI 756 - ITAT DELHI] for assessment year 2006 07 and 2007 08 wherein allowed the claim of the assessee following the decision of the honourable jurisdictional High Court in CIT versus Oswal Agro Mills Ltd [ 2010 (12) TMI 947 - DELHI HIGH COURT] . Therefore respectfully following the decision of the coordinate bench in assessee‟s own case we also direct the learned assessing officer to allow the depreciation on assets in the premises sealed by the government of India due to ban on lottery business. Accordingly, ground number 2 of the appeal of the assessee is allowed. Accrual of income - Addition on account of interest ICD given - assessee company is along with other parties entered into a joint venture agreement and formed a company for marketing of lottery - HELD THAT:- Assessee before us and stated that there is an uncertainty of recovery of the original amount of advances (ICD) and therefore in absence of any reasonable certainty of the recovery of the principal sum the interest cannot be said to be accrued to the assessee. The assessee has not produced any document/resolution/financial position of the companies to move the assessee has given ICD. We are dealing with the case for the assessment year 2008 09 in which year the assessee has already recovered 75 lakhs. Further out of the total advance of ₹ 503 lakhs assessee has already recovered ₹ 3 00 lakhs. Therefore, we do not find any evidence placed before us or before the lower authorities to even remotely suggest that assessee is not able to recover the above sum. We do not find any infirmity in the orders of the lower authorities in holding that interest has accrued to the assessee Accordingly, ground number 3 of the appeal of the assessee is dismissed. 2021 (6) TMI 898 Revision u/s 263 - unsecured loans receipts - HELD THAT:- We find that one of the key reasons for scrutiny selection was verification of unsecured loans and therefore, it was incumbent on the part of the Assessing officer to carry out necessary examination by calling for information/documentation from the assessee and verifying such information/documentation so submitted before taking any view in the matter. Unsecured loan from Sh. Bharat Harwani, Pr CIT has recorded a finding that the assessee has furnished a photocopy of ledger confirmation, which does not have any signature from Sh. Bharat Harwani and further no ITR and bank statement has been furnished of Sh. Bharat Harwani so as to establish/prove the genuineness and creditworthiness in respect of this unsecured loan - What the ld Pr CIT has stated are basic documentation which is reasonably expected to be called for and examined by the AO as part of standard operating procedure for verifying the genuineness of loan transaction and creditworthiness of the lender. There is nothing on record that the AO on receipt of so called confirmation has called for any further information/documentation from the assessee or carried out any independent examination u/s 133(6) Given that the AO basis a mere confirmation so filed by the assessee which in reality is not a confirmation in absence of signature and authentication has accepted the loan transaction is clearly not just a case of lack of enquiry but a case of no enquiry rendering the order so passed as clearly erroneous and prejudicial to the interest of Revenue. Similar fact pattern exist in respect of other two transactions with Sh. Rahul Harwani and Sh. Sunil Israni and we agree with the findings of the ld Pr CIT that the order so passed by the AO is erroneous and prejudicial to the interest of the Revenue - credits by way of journal entries in account of Sh Rahul Harwani for purchases/expenses cannot be termed in the nature of loans and advances in terms of Section 269SS and to this extent, the findings of the ld Pr CIT are set-aside. Appeal of the assessee is partly allowed. 2021 (6) TMI 895 Reopening of assessment u/s 147 - addition made on protective basis - investment was made in AY 2012-13 and not in AY 2011-12 - HELD THAT:- Specific paras 2(vi) to (viii) and Para 3 of the above Report clearly address the departmental position. In the light of these facts and submissions, it is deemed appropriate to allow the appeal of the assessee on the aforesaid grounds as the substantive addition has attained finality. At the same time, it is clarified that the factum of the cheque dated 31.03.2011 of ₹ 20 lacs in favour of M/s. KOC Industries Ltd. stated to be cleared in 2012-13 assessment year is kept open for consideration in the said appeal and is not being considered or decided in the present appeal as the present appeal is being decided only on the basis of the fact that substantive addition has attained finality. In the circumstances, protective addition cannot be sustained. Said order was pronounced at the time of virtual hearing itself in the presence of the parties via Webex. The appeal, accordingly, is allowed. 2021 (6) TMI 894 Addition made on account of gains from cancellation of forward contract - AO observed that, the so-called asset could not be created not any foreign exchange loan was taken by the assessee for such assets - Assessing Officer treated the same as revenue receipt - CIT-A deleted the addition - HELD THAT:- CIT(A) after considering the facts on the issue held that the assessee company is engaged in manufacturing of polyester chips, yarn, and other fabrics and is not in a banking business. The assessee also not engaged in the business of foreign exchange nor trading in machineries sought to be imported. The assessee intended to expend its capital expansion and panned to purchase certain machineries and accordingly decided to import such machineries from abroad against foreign currency loan - in order to safe guard its interest against the fluctuation in foreign currency entered into forward contract. CIT(A) after relying on the decision of Sutlej Cotton Mills [ 1978 (9) TMI 1 - SUPREME COURT] held that if the amount in foreign currency was a trading asset then foreign exchange fluctuation would be a revenue expenses, but if held as capital account, the loss would be a capital loss. The Ld. CIT(A) also held that the decision in assessee's own case for AY 1993-94 is also squarely applicable on this issue for the year under consideration. Hon'ble Jurisdictional High Court in assessee's own case for AY 1993-94 [ 2009 (2) TMI 95 - GUJARAT HIGH COURT] while considering the merit of the case clearly held that if the foreign exchange was acquired under the contract for the purpose of discharging an obligation on capital account viz, toward borrowing for the purpose of import of capital asset, which would indicate that the surplus realised on cancellation of such contract would bear the same character. Thus we are of the view that intended loan have been raised for the purpose of acquisition of plant machinery and gain so earned on fluctuation of foreign exchange rate was on capital account. Thus, the gain so earned would partake the character of capital asset. We do not find any infirmity in the order of ld. CIT(A) which we affirm - Decided against revenue. 2021 (6) TMI 893 Disallowance u/s 14A r.w.r. 8D - HELD THAT:- As decided in own case [ 2018 (2) TMI 109 - ITAT HYDERABAD] with regard to investment in APGPCL, the coordinate bench has remitted this issue back to the file of the AO to verify the contention of the assessee and, if, found correct, the investment should be excluded from the calculation under rule 8D(2)(iii). Therefore, we are also inclined to remit this issue back to the file of the AO to verify the contention of the assessee. Appeal of the assessee is allowed for statistical purposes 2021 (6) TMI 892 Reopening of assessment u/s 147 - additional depreciation u/s. 32(1)(iia) disallowed - HELD THAT:- CIT(A) has no power to give directions to the AO to reopen the assessments for the assessment years which are not before him. We also do not find any direction given by the ld. CIT(A) in his order for AY 2009-10. The ld. CIT(A) applied the ratio of the judgement of the Hon'ble Supreme Court in the case of Rama Bai [ 1983 (9) TMI 323 - SUPREME COURT] and deleted the interest added in the AY 2009-10. The other assessment years were not before him i.e. AY 2005-06 and 2006-07. The proposition of law laid down in the case law referred above is that the ld. CIT(A) has no power under the provision of law to give direction to the AO for reopening of assessment. Thus the reasons recorded for reopening of assessments is bad in law. Appeals of the assessee are allowed. 2021 (6) TMI 891 Exemption u/s 11 - addition made in respect of the net surplus when the assessee failed to submit evidence in support of the amount spent and also failed to prove that the same was spent only for the aims and objectives of the society - CIT-A deleted the addition - HELD THAT:- The assessee itself admitted that by filing a letter regarding the closure of business due to unhealthy competitions and several disputes and discrepancies among the board members of the society. In the absence of books of accounts and vouchers, the AO was unable to ascertain as to whether the receipts have been utilized only for the aims and objects of the society. The order of the CIT(A) is contrary in nature. Therefore, considering the totality of the facts of the case, to meet the ends of justice, we remit the issue back to the file of the AO with a direction to decide the appeal on merits after examining the documentary evidence as required for claiming exemption u/s. 11 by the Assessee, which will be put-forth by the assessee before him. Grounds raised by the revenue are treated as allowed for statistical purposes. 2021 (6) TMI 890 Disallowance of opening balance of sundry creditors - Second statutory appeal - HELD THAT:- Purchases made from creditors were in earlier year payments were made through banking channel and same are part of paper book and ledger account of creditors along with statement of purchases are part of paper book. ITAT Delhi Bench in the matter of Smt. Sudha Loyalka [ 2018 (7) TMI 1892 - ITAT DELHI] where A.O. made addition to assessee's income under section 69C in respect of amount payable to creditors towards purchases, in view of fact that said purchases were duly recorded in books of account and sales made against those purchases were not disputed, impugned addition was to be set aside. ITAT held no addition could be made under section 41(1) in respect of unexplained purchases where amount was shown as payable in balance sheet and thus there was no cessation of liability. Respectfully following the Jurisdictional High Court order in DATTATRAY POULTRY BREEDING FARM PVT LTD [ 2018 (12) TMI 1636 - GUJARAT HIGH COURT] and parity with the Delhi ITAT order and sales were not disputed by the lower authorities, so in view of the above, we allow this ground of appeal. Notional short term capital gain on transfer or otherwise of some real estate asset - Addition of short term capital gain erroneously considered by the appellant in computation of total income - Contention of the ld. A..R. was that assessee moved an application u/s. 154 of the Act stating that he has inadvertently made the claim of capital gain and explained all the details pertaining to property - HELD THAT:- The present Assessee's case is of assessment year 2014-15 and after going through the sale deed we have noted that property was sold on 19.08.2019 and in his balance sheet assessee has shown it as an investment not as a closing stock and same is part of paper book at page no. 5. Since assessee inadvertently shown the property as capital asset and moved an application before the lower authority u/s. 154 for rectification of the order but ld. A.O. did not pay and any heed and same property was shown as investment in the individual balance sheet of the assessee. In such case notional capital gain cannot be added. Thus this ground of appeal of the assessee is allowed. 2021 (6) TMI 889 Reopening of assessment u/s 147 - Addition u/s 68 - assessment was reopened based on the information furnished by Investigation Wing, Mumbai that the assessee had introduced unaccounted money in the form of loan creditors - Assessee has not satisfactorily proved the genuineness of the transactions and identity of the creditors. Lenders have only meagre incomes and therefore the Assessing Officer treated the transactions as not genuine since ingredients of section 68 of the Act have squarely attracted in this case - HELD THAT:- On a perusal of the Assessment Order we observed that except stating the creditworthiness of the creditors cannot be relied on merely because they have shown loss return, no conclusive evidences were brought on record to show that the loan amount credited in the Books of Accounts of the assessee is nothing but unaccounted money of the assessee. As the assessee has discharged its initial onus of proving the identity, genuineness and creditworthiness of the creditors by providing all necessary details as stated in earlier paragraphs and thus the assessee has proved identity, genuineness and creditworthiness of the creditors. The Assessing Officer has not controverted the evidences furnished by the assessee. No further enquiries have been made by the Assessing Officer to disprove the evidences furnished by the assessee. What is discussed above and in view of the evidences furnished by the assessee, we are of the view that the assessee has discharged his onus of proving the identity, genuineness and creditworthiness of the creditors and fulfilled the requirement of ingredients of section 68 of the Act. Thus, the addition made u/s. 68 of the Act without any enquiry is liable to be deleted. Thus, we direct the Assessing Officer to delete the addition made u/s. 68 - Decided in favour of assessee. 2021 (6) TMI 888 Estimation of income - bogus purchases - CIT(A) restricting the addition at 5% as against 7% made by the Assessing Officer - HELD THAT:- We find that the CIT(A) has rightly applied the profit rate at the rate of 5% and we find no infirmity in the order of the CIT(A), hence, the appeal of Revenue's is dismissed. 2021 (6) TMI 887 Revision u/s 263 - limited scrutiny assessment -Scope of Limited scrutiny - unexplained of sundry creditors and unexplained investment - HELD THAT:- The perusal of the order shows that the assessing officer has not only the posed questions with respect to share application as well as sundry creditors by the detailed questionnaire to the assessee but had also made additions on of sundry creditors. The assessing officer had mentioned that the shares were allotted in the financial year 2014 - 2015 on the basis of the share money received by the assessee. No discrepancy was found no additions were made on this head. However in respect of sundry creditor, the assessing officer had made the additions. In our considered opinion once the assessing officer has examined both the issues as referred to him under the limited scrutiny, then it is not incumbent upon him to expand the scope of the assessment without seeking the approval from the principal Commissioner of income tax in accordance with the board instruction 19 and 20/2015 2015 dated 29th December 2015 and Instruction number 5/2016 dated 14/07/2016. Assessing officer, can only deviate from the limited scrutiny and converted into the only after following the procedure provided under the circular (5/16 supra). In the present case it is not the case of the principal Commissioner that case was required to be converted into the complete scrutiny and the proposal should have been made by the assessing officer. In our view the assessing officer had acted within the limits circumscribed by the limited scrutiny in accordance with the material available in is file after the last date of deciding the assessment. If the assessing officer during the course of assessment comes to the conclusion that some investment were made in the books of account, then the addition can be made under section 69 of the act but for that procedure as provided by the circulars, were required to be followed by the assessing officer. In our considered opinion once the order was passed based on the material available on record and investment in shares and subsequent allotment have been accepted by the assessing officer and additions were made on account of sundry creditors, then no fault can be found in the order passed by the assessing officer. The sole basis for initiating the proceedings under section 263 was the enquiry report by the ITO whereby he had estimated the investment to the tune of ₹ 2,85,60,000/- and subsequent reference by the assessing officer to the valuation cell under section 142A of the income tax act. The revisional Commissioner in his order though has mentioned that the valuation was referred to the valuation cell under section 142(2A) of the Income Tax Act. In our considered opinion the wrong provisions has been mentioned by the revisional Commissioner as the valuation of the assets by the valuation officer is mention under section 142A and not under section 142(2A) Once the valuation report has not been sent by the valuation officer to the assessing officer/assessee, within the period stipulated by the act that alleged report cannot found basis of RECORD to invoke the judicial under section 263 by the revisional Commissioner. The twin requirement of the order being erroneous and prejudicial to the interests of revenue should be satisfied and that the CIT should invoke the powers u/s. 263 only after an enquiry by him to establish the twin conditions. Merely the assessing officer has formed an opinion which is not in line of thinking of the revisional Commissioner and there are two possible views, then also the revisional Commissioner cannot exercise the power for provision under section 263 - we found that the order passed by PCIT, was not in accordance with law and therefore we quash the same. - Decided in favour of assessee. 2021 (6) TMI 886 Penalty u/s 271(1)(c) - Bogus purchases - HELD THAT:- As it transpires from the record available before us that the Assessing Officer levied penalty under section 271(1)(c) of the Act on estimate basis without any evidence on record with regard to concealment of income. Penalty under section 271(1)(c) of the Act is leviable to be imposed only where the assessee has concealed its particulars of income or furnished inaccurate particulars. Action of making addition on ad-hoc basis does not result into imposition of penalty u/s. 271(1)(c) of the Act and hence cannot be termed as either concealment or furnishing of inaccurate particulars of income. - Decided against revenue. 2021 (6) TMI 885 Revision u/s 263 - assessee could not appear due to severe ill-health of the assessee's wife who expired on 24/01/2015 - HELD THAT:- As appears from the record that during the relevant period when the Ld. AO had taken up the second round of proceedings based on the orders of the Ld. CIT-IV, Hyderabad passed u/s.263 the assessee was not in a position to appear before the Ld. Revenue Authorities because of his sever ill-health and demise of his wife. Considering the issues involved in the appeal as well as the prayer of the Ld. AR, in the interest of justice, we hereby remit the entire matter back to the file of Ld. A.O. in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. We also hereby caution the assessee to promptly co-operate before the Revenue Authorities in their proceedings failing which the Ld. Revenue Authorities shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. 2021 (6) TMI 884 Depreciation on Goodwill - HELD THAT:- We in the backdrop of the aforesaid judgment of the Hon ble Supreme Court in the case of Smifs Securities ltd. [ 2012 (8) TMI 713 - SUPREME COURT] are unable to concur with the view taken by the lower authorities that goodwill is not a depreciable asset eligible for depreciation, and accordingly, vacate the same. Resultantly, the disallowance of the assessee s claim for depreciation on goodwill is vacated. Disallowance of Staff welfare expenses - HELD THAT:- Admittedly, in the present case also, the A.O while resorting to an ad hoc disallowance out of the staff welfare expenses had not called upon the assessee to furnish the details in respect of the staff welfare expenses which as per him were not verifiable. As such, the assessee had suffered the aforesaid part disallowance of staff welfare expenses without being afforded a sufficient opportunity of being heard. We, thus, in terms of our aforesaid observations are of the considered view that the ad hoc/estimated disallowance of the staff welfare expenses made by the A.O/DRP cannot be sustained and is liable to be vacated. Disallowance of Commission expenses - confirmations of the parties to whom commission was claimed to have been paid by the assessee were not filed in the course of the assessment proceedings - HELD THAT:- As material placed on record by the assessee to substantiate the authenticity of the commission expenses; that confirmations from all the dealers could not be obtained after lapse of a substantial period of 5 years (aprox); the PAN Nos. of majority of the parties were furnished by the asssessee; commission expense of ₹ 1.099 crores incurred by the assessee against its sales of ₹ 3,176.56 crores worked out at a miniscule figure of 0.03% of its sales; the assessee had duly demonstrated before the DRP the reason and justification for incurring the commission expenditure; and allowability of a similar claim of commission expenses in the past; and respectfully following the aforesaid order of the Tribunal in the assessee s own case, we find no justification in disallowance of a similarly placed assessee s claim for deduction of commission expenses - We, thus, in terms of our aforesaid observations direct the A.O to vacate the disallowance of commission expenses. Ad hoc disallowance w.r.t miscellaneous expenditure - HELD THAT:- On objection filed by the assessee, the DRP had wrongly observed that the disallowance was being restricted to 5% as against 10% made by the A.O, as the facts were never so. Be that as it may, the A.O in his impugned order passed u/s 153A/143(3) r.w.s 144C(1), dated 31.10.2011 though referred to the aforesaid mistake of the DRP but without pointing out as to what all expenses were not supported by documentary evidence, therein restricted the disallowance on an ad hoc basis As neither of the lower authorities had pointed out as to what all expenses out of total miscellaneous expenseswere not supported by documentary evidence, therefore, no ad hoc disallowance under such circumstances could justifiably have been made. In our considered view a disallowance of an expense made by an A.O in the thin air can by no means be sustained. We vacate disallowance made by the A.O/DRP w.r.t the miscellaneous expenses. 2021 (6) TMI 883 Claim of additional depreciation u/s 32 (1) (iia) - HELD THAT:- As is brought to our notice that the issue of claim of additional depreciation under section 32 is recurring nature and we noticed that the respective assessing officers in assessment year 2012-13 and 2013-14 had disallowed the claim of additional depreciation and in those respective assessment years the issue was contested before coordinate benches of this tribunal and it was held in favour of the assessee [ 2019 (1) TMI 1899 - ITAT MUMBAI] - Since this issue is already settled in favour of the assessee, we do not see any reason to interfere with the findings of Ld. CIT(A). Accordingly ground No. 1 raised by the revenue is dismissed. Delay in deposit of employees ESIC and labour welfare fund contribution - HELD THAT:- In the case of the assessee, it is observed from Tax audit report submitted by the assessee that, it has received from its employees towards Employee Contribution fund within dates but deposited to the fund houses before filing ITR - As considered that Sec 43B applies to both employee and employer contributions and if the contributions are paid to the fund houses before filing ITR, no disallowance u/s 36(1)(va) is warranted. It is established that when the employee deposits both of its contribution and employees' contribution to the fund houses before the date of filing ITR, the entire amount will be allowed as deduction in the profit and loss account of the assessee u/s 43B - AO is thus directed to delete the addition made to the total income of the assessee u/s 36(1)(va) of the Act and allow the said addition u/s 43B - This ground of appeal is allowed. 2021 (6) TMI 882 Deduction u/s 80IC - substantial expansion - Initial assessment year - whether assessee has already claimed deduction @ 100% for 5 Assessment Years - HELD THAT:- The issue now stands squarely covered by the judgment of case of Pr. Commissioner of Income Tax vs. Aarham Softronics [ 2019 (2) TMI 1285 - SUPREME COURT] and related cases wherein the Hon ble Apex Court has laid down that in case substantial expansion is carried out as defined in clause (ix) of Sub-section-8 of Section 80IC by such an undertaking or enterprise, within the aforesaid period of 10 years, the said previous year in which the substantial expansion is undertaken would become initial assessment year and from that assessment year, the assessee shall be entitled to 100% deduction of profits and gains. It was also laid down by the Hon ble Apex Court that deduction would be for a total period of 10 years. 2021 (6) TMI 881 Accrual of income - real income - Addition to total income on account of capacity charges, deemed generation charges and capacity index incentives - assessee is following mercantile system of accounting - as submitted by the assessee that UERC, (Terms and Conditions for determination of Hydro Generation Tariff) Regulation, 2004, Regulation 20(2) provided for capacity charges, Regulation 29(1) provided for capacity index incentives and Regulation 31(1) provided for deemed generation - HELD THAT:- In the financial statements capacity charges, deemed generation charges and capacity Index incentive have been shown as a disclosure in the balance Sheet as an amount claimable by the assessee from UPCL which has not been acknowledged but disputed by the UPCL since inception and the matter has been referred to the Regulatory Authority for settlement from time to time. Facts on record demonstrate that since the methodology was to be determined and there were several technical aspects which were to be finalized, due to lack of clarity in the regulations, the determination of amount on account of capacity charges, deemed generation charges and capacity index incentives could not be quantified. The issue was disputed by UPCL. UERC is a regulatory authority which fixes the tariff on annual basis in accordance with the Terms Conditions for determination of Hydro Generation Tariff, Regulation 2004. The method of calculation of these charges was not clear and as such this matter became the subject matter of dispute. The assessee filed a petition before the UERC on 25th March 2014 due to prolonged dispute between UPCL and UJVNL and had also sought necessary directions from the UERC on the applicability and payability of capacity charges, deemed generation charges and capacity Index incentive. We find merit in submissions made by the Ld AR that since the basis, modality and the amount on which the capacity charges, deemed generation charges and capacity Index Incentives were to be determined/ quantified, it was difficult for the assessee to ascertain the correct and actual amount of charges recoverable from UPCL. We are, therefore, unable to sustain the addition made by the AO. AR has also brought on record the fact that the assessee has started receiving the disputed amounts from UPCL in monthly installments w.e.f, August, 2015 and that the assessee has voluntarily agreed to disclose the entire amount of capacity charges, Deemed Generation Charges and capacity index incentive charges during the FY 2015-16 relevant to AY 2016-17. Once the correct amount of income has already been offered to tax in AY 2016-17, we find no merit in the addition made by the AO in the present order of assessment. We, therefore, allow ground of the appeal and direct the AO to delete the addition made. 2021 (6) TMI 877 Depreciation on assets for which the actual cost as per section 43(1) of the Income Tax Act, 1961 was nil - demerger in terms of explanation 4 to section 2(19AA) recognised - second round of appellate proceedings - AO has disallowed depreciation on the ground that the assessee had received assets free of cost from the Government of Uttaranchal - HELD THAT:- As per settled accounting principles, every rupee invested in the business has a cost. The cost of borrowing from the bank is known to the business depending on the rate of interest but that does not mean that the capital introduced in the form of shareholders fund has no cost. In the present case, assets generating hydro power have been received by the assessee from the demerger of UP Jal Vidyut Nigam along with corresponding liabilities which it owns to the Uttaranchal Government and others. This liability represents nothing but the cost of the assets received on demerger. The assessee is entitled to depreciation on the written down value of these assets which been prescribed in Explanation 2B of section 43(6) of the Income Tax Act, 1961. The assessee is, therefore, entitled to depreciation. Somewhat similar situation arose in case of M/s Bharat Sanchar Nigam Limited (BSNL) when it got incorporated in 2000. Prior to BSNL s incorporation, the telecommunication services were being provided by Government of India, Ministry of Communication through its two departments, namely Department of Telecommunication Services and Department of Telecommunication Operation. The AO in case of BSNL referred to the capital structure of the BSNL to draw an inference that the cost of assets was being met by the general reserve as reflected in the capital structure of the company. As per AO, a sum equal to the general reserve would be required to be reduced from the cost of the assets in terms of Explanation 10 of Section 43(1) of the Act. This has been negated by the Hon ble Delhi High Court [ 2013 (5) TMI 416 - DELHI HIGH COURT] - Decided against revenue. Customs 2021 (6) TMI 917 Classification of imported goods - Art paper of different descriptions - falling under CTI 4810 or under under 4811 - HELD THAT:- It is evident that the form, size, GSM and any other special characteristic plays a major role in classification of the paper. The detailed Packing List for the Bill of Entry No.3192548, dated 18.03.2021, forwarded by the supplier suggested that the imported cargo contains different descriptions of Art paper falling under 481014 and 481019 depending upon size - It is evident from the seizure that the importer had classified the Art paper of different descriptions falling under CTI 4810, which is definitely Stock Lot of paper, as per DGFT Notification No. 45/2015-20 under 4811 to circumvent the prohibition imposed. The findings of the order passed by the learned Single Bench of this Court in M/S. JAYASAKTHI PAPERS VERSUS THE COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS, (GROUP-2) [ 2021 (4) TMI 83 - MADRAS HIGH COURT] was completely ignored where it was held that by introducing an impermissible yardstick namely, GSM variation, the respondents have arrived at a finding that the imported goods constitute a stock lot. This is patently illegal. The respondents are directed to release the goods, by granting liberty to the parties to adjudicate the matter - Petition allowed - decided in favor of petitioner. 2021 (6) TMI 907 Recovery of Customs Dues - non-fulfilment of export obligation under Export Promotional Capital Goods (EPCG) Authorization - entitlement to release bank guarantee or not - HELD THAT:- This Court is of the considered opinion that the impugned order is for recovery of Government dues for the alleged non-fulfilment of EODC - Now the petitioner has approached the Joint Director General of Foreign Trade for issuance of EODC. The application is pending. The learned counsel for the petitioner also made a submission that he will approach the authority for early disposal of the application and therefore, some time is to be granted for submission of the said certificate. In view of the facts and circumstances, thirty days time is granted for the purpose of submission of EODC by the writ petitioner. In the event of not submitting the said certificate to the respondents within a period of thirty days from the date of receipt of a copy of this order, the respondents are at liberty to realise the bank guarantee already furnished by the writ petitioner - Petition disposed off. 2021 (6) TMI 905 Levy of late fee charges - delay in filing the bills of entry - HELD THAT:- It is to be stated that the cause of action in this appeal has occurred during the transition period of introduction of GSTIN registration. There were much technical difficulties faced by assessee / importer / exporter during that time due to system failure, server connectivity etc. There were many cases filed before the High Courts - In the present case also, it is seen that the appellant could not obtain the GSTIN registration and had to apply for the second time. Being a new law, it is inferable that it is not easy for the public to understand how to apply and pay the tax under a new law. Further, under Notification No. 26/2017 itself, it is stated that such late fee can be waived if sufficient reasons are furnished before the proper officer. Thus, it is a condonable lapse. In the circular issued by Board dated 31.8.2017, it is stated that the importer should not be penalized for delay happening due to any system related defect. For all these reasons and most importantly since the period involved is during the transition period of GST, the late fee charges imposed is not warranted - Appeal allowed - decided in favor of appellant. 2021 (6) TMI 901 Refund of IGST - Duty drawback - C.B.I.C. Circular No. 37/2018-Customs dated 09.10.2018 - HELD THAT:- Hon ble court in M/S. PRECOT MERIDIAN LIMITED VERSUS THE COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS [ 2020 (1) TMI 90 - MADRAS HIGH COURT] and M/S AMIT COTTON INDUSTRIES THROUGH PARTNER, VELJIBHAI VIRJIBHAI RANIPA VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS [ 2019 (7) TMI 472 - GUJARAT HIGH COURT] have held inter alia that the circular in question being merely in the form of instructions or guidance to the concerned department, it only explains the provisions of the duty drawback; that it has nothing to do with the IGST refund; and that circulars cannot prevail over the statute, etc., and have directed the refund as claimed therein. Since interpretation under GST/IGST is involved, the orders are set aside and the matter is remanded back to the file of the Adjudicating Authority for fresh disposal in accordance with the law as declared/interpreted by courts - Appeal allowed by way of remand. 2021 (6) TMI 878 Valuation of imported goods - imported motorcycle parts - redetermination of value based on market survey - levy of fine and penalty - Rule 9 of the Customs Valuation (Determination of value of imported goods) Rules, 2007 - HELD THAT:- In more or similar fats and circumstances when the re-determined value has been accepted by the importers, this Tribunal in COMMISSIONER OF CUSTOMS DELHI VERSUS M/S HANUMAN PRASAD SONS [ 2020 (12) TMI 1092 - CESTAT NEW DELHI] after analyzing the principles of law on the subject held that importer cannot go back on such acceptance and be allowed to dispute the re-determined value, when the same was categorically accepted by him. Applying the principle of the said case to the facts of the present case, there are no iota of hesitation to arrive at the conclusion that in the present case also, the proprietor of the appellant categorically accepted the re-determined assessable value on the basis of market survey carried out in his presence vide statement dated 20.01.2010, which has never been retracted, therefore, the same is binding on him. Penalty - HELD THAT:- There are no merit in the order of the authorities below in mechanically imposing fine and penalty on the appellant. In the order of the adjudicating authority, no justification has been recorded for imposition of penalty and directing confiscation of the goods - there are no circumstances brought on record to show that the value declared by the appellant is intentionally manipulated or suppressed; the Department has re-determined the value on the basis of market survey after rejecting the transaction value declared by the appellant. The re-determined value being in excess of the declared value ipso facto cannot be construed as ground warranting confiscation and imposition of penalty on the appellant in absence of reasons and evidences justifying the said action which are missing in the orders of the authorities below - Appeal allowed in part. Corporate Laws 2021 (6) TMI 916 Maintainability of suit - suit instituted by authorized person or not - Order VI Rule 14 as well as the provisions of Order XXIX Rule 1 CPC - right, title and interest over the suit land or not - recovery of possession of the suit land from the defendant - Whether the learned first appellate court while arriving at the finding that the suit has not been instituted by authorized person of the company overlooked the provisions of Order VI Rule 14 as well as the provisions of Order XXIX Rule 1 CPC? - HELD THAT:- The trial court decided the suit vide judgment and decree dated 22.3.2016. The order satisfying the criteria stipulated in Section 560(7) of the Companies Act, 1956 was passed on 4.10.2010 and on the strength of the said order the company received its active status w.e.f. 30.10.2007 prior to the date of filing the suit on 17.12.2008. Accordingly the first appellate court rightly took note of the subsequent development and correctly held that company was in existence on the date of filing the suit. The appellate court has the power under Order XLI Rule 33 CPC to pass such order which ought to have been passed by the trial court on the basis of Section 560(7) Companies Act, 1956 which is the mandate of the law. The power under Order XLI Rule 33 CPC of the appellate court is wide in order to do complete justice to the parties in a lis and the first appellate court is well within its power which requires no interference. Whether reversal of the finding of issue No. 2 is proper on the face of the pleadings of the parties to the suit? - HELD THAT:-The suit is for declaration of right, title and interest of the plaintiff appellant company over the suit land and other consequential reliefs like recovery of possession, injunction etc. The plaintiff appellant in its plaint pleaded that the suit land was purchased from one Jagannath Paul who executed the Ext.3 sale deed and delivered possession. So the plaintiff appellant derived the title over the suit land upon execution of the sale deed by the vendor Jagannath Paul. On the other hand the defendant respondent in his written statement denied purchase of the suit land vide registered sale deed No. 240/1985 dated 2.2.1985 from Jagannath Paul and the delivery of possession by the said vendor. The trial court framed issue No. 2 whether the plaintiff has right, title and interest over the suit land upon consideration of the pleadings of the parties to the suit - The trial court held that Ext.3 being a registered document so it was presumed that the Ext.3 was validly executed. The defendant respondent failed to dislodge the said presumption. Then the trial court referred to a particular statement made by the defendant respondent as DW 1 in his cross examination that he had no document of purchase of the suit land from its owner i.e. plaintiff and on the basis of the said deposition held that the defendant respondent admitted the ownership of the plaintiff appellant over the suit land. The trial court was wrong in putting the burden on the defendant respondent to dislodge the presumption which the registered document carry u/s 114(c) of the Evidence Act. Admission of the defendant respondent of the title of the plaintiff appellant cannot discharge the onus of plaintiff appellant to prove the execution of Ext. 3 moreso when the plaintiff appellant failed to prove its possession over the suit land since the date of purchase. There is no specific mention in regard to the date of dispossession of the plaintiff appellant from the suit land by the defendant respondent who enjoyed the status of land holder under the Land Revenue Regulation after being granted the kheraj periodic patta to him. There is no denial of execution of the sale deed by the executant, Jagannath Paul. It is not mandatory that a sale deed requires attestation by witnesses and as such the manner and proof of execution of the sale deed does not fall within the sweep of Section 68 of the Evidence Act. But when the fact of execution is disputed in the form of the stand taken by the defendant respondent that he specifically denied purchase of the suit land vide regd. sale deed No. 240/1985 (Ext 3), then irrespective of the stipulation in Section 68 of the Evidence Act if there are any attesting witnesses or scribe, examination of such witnesses become necessary to prove the execution of the sale deed - In view of the discussions the second substantial question of law is decided against the plaintiff appellant thereby upholding the finding of the first appellate court in issue No. 2. The first appellate court rightly considered the pleadings of the defendant respondent wherein the ownership of the plaintiff appellant was denied and moreover he failed to prove the fact that his possession over the suit land was hostile and adverse to the plaintiff appellant and it was within the knowledge of the representatives of the plaintiff appellant including its director, Suresh Kumar Jain that the same was adverse to the interest of the plaintiff appellant from the date of entry of the defendant respondent. The learned first appellate court took note of the pleadings in the plaint and held that the suit was filed within the period of limitation. Thus, the suit filed by the plaintiff appellant is maintainable but the plaintiff appellant failed to prove his title over the suit land for which the plaintiff appellant is not entitled for the reliefs. The suit is dismissed. 2021 (6) TMI 904 Oppression and mismanagement - Petitioner having less than 10% of the issued share capital of the Company - section 244 of the Companies Act - HELD THAT:- Based on the statutory provision of Section 241 and 244 of the Companies Act, 2013, it is clear that the Application to the Tribunal for relief in cases of oppression and mismanagement can be filed by any member of the Company who complains that the affairs of the Company are being conducted in a manner prejudicial to the public interest or the manner prejudicial or oppressive to him or any other member or members or the manner prejudicial to the interest of the Company - But the precondition for filing a petition under Section 241 is provided under Section 244 of the Companies Act 2013. It lays down the precondition of filing a Petition that such member has a right to apply under Section 244 for an order under this Chapter. Section 244 (1) (a) of the Act lays down the precondition being that any member or members must hold not less than one-tenth of the total number of its Members, or any member or members must hold not less than 10% of the issued share capital of the Company. Admittedly Petitioner/Respondent No. 1 in this Appeal had filed the Petition under Section 241 of the Companies Act 2013 alleging acts of oppression and mismanagement against the Respondents. However, the Petitioner admits that its shareholding is less than the required 10% eligibility criteria for filing the petition. Therefore, instead of seeking a waiver under proviso to Section 244 (1) of the Companies Act 2013, the Petitioner has sought relief for granting a waiver from the 10% eligibility criteria - The NCLT had the power to grant a waiver from any of the conditions laid down regarding the eligibility criteria for filing the Petition under Section 241 of the Act. But Applicant/Petitioner has to assign a reason; based on that, the NCLT may or may not waive any of the eligibility criteria as laid down under Section 244 of the Act. Admittedly, in this case, notices have been issued without admitting the Petition and even without considering the eligibility criteria for filing a Petition under Section 241 of the Companies Act 2013. Consequently, an Application seeking a waiver from eligibility criteria under proviso to Section 244 (1) of the Companies Act is pending - Appeal disposed off. Insolvency & Bankruptcy 2021 (6) TMI 902 Validity of order of Adjudicating authority (NCLT) observations against the IRP to refer the matter to IBBI. - HELD THAT:- Adjudicating Authority proceeded on the basis that if the Admission Order has been put on the website, it was responsibility of the parties. Learned Counsel submits that even if it is said to be responsibility of the parties, and their Counsel, the IRP had no reason to check the website of the Adjudicating Authority if any such Application is filed or admitted. The parties to the Application were the Financial Creditor and the Corporate Debtor and the Admission Order had appointed the IRP. Unless the Order was communicated, he would not know. Section 7 (7) of IBC required the Adjudicating Authority to communicate Order of Admission to Financial Creditor Corporate Debtor within 7 days. The Adjudicating Authority has not observed that the Registry had conveyed the Admission Order to the IRP. When this is so, it would not be appropriate to make IRP face reference as has been ordered. It appears to us that the observations and reference were uncalled for. Going through the Impugned Order, it relies more on uploading of the Order on website, rather than finding if or not the Order was actually communicated to parties and IRP. Admission Order para 11 even mentioned e-mail address of IRP. Communication could have been sent even on e-mail. For such reasons mentioned above, we set aside Paragraphs 24 and 25 of the Impugned Order. Appeal allowed. 2021 (6) TMI 896 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- The demand notice was sent to the registered address of the corporate debtor as per the master data (Annexure-B) of the petition in which registered office is shown as Plot No. 1, Naher (Canal) Colony B/h Water Filling Plant, Dhankot, Gurgaon, HR 122001. Copy of postal receipt and tracking report showing duly service of notice are attached as Annexure E. Whether the operational debt was disputed by the corporate debtor? - HELD THAT:- The respondent-corporate debtor has filed reply and admitted the occurrence of default towards operational creditor. Thus, there is no dispute as to the liability between the corporate debtor and the operational creditor. Existence of debt and default - HELD THAT:- It has been shown that the corporate debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice till date. It is also observed that the conditions under Section 9 of the Code stand satisfied. Accordingly, the petitioner proved the debt and the default, which is more than ₹ 1 lac by the respondent-corporate debtor. The present petition being complete and having established the default in payment of the Operational Debt for the default amount being above ₹ 1,00,000/- - petition admitted - moratorium declared. 2021 (6) TMI 880 Condonation of delay of forty eight days in filing of the present Application on behalf of the Applicant - applicability of time limitation in section 7 and 9 of IBC - HELD THAT:- It is no longer res Integra as held by the Hon'ble Supreme Court of India in a couple of decisions that Section 5 of the Limitation Act, 1963 would apply to a proceeding under Section 7 or 9 of IBC, 2016 and hence bowing down to the provisions of Article 141 of the Constitution of India, though this Tribunal had expressed a view otherwise in the matter of M/S. FNA MULTI-TRADE PRIVATE LIMITED VERSUS M/S. VA TECH WABAG LIMITED [ 2020 (9) TMI 1188 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI] taking into consideration the decision of the Hon'ble Madras High Court under the Presidency Town Insolvency Act, 1909. Be that as it may, the Applicant who seeks for condonation of delay has to adequately explain to the satisfaction of this Tribunal the 'sufficient cause' and 'reasonableness' for condoning the delay in filing the main Application. It is the cardinal principle of limitation that the Applicant, who seeks to condone the delay, has to explain the delay for each and every day as sought for, more particularly this Tribunal is of the considered view in relation to a proceeding under IBC, 2016 being a proceeding in rem and has an impact on all the stakeholders of the Corporate Debtor unlike a suit for recovery of money filed before the Civil Court and in the circumstances this Tribunal is required to be more circumspect in condoning the delay as compared to a liberal approach as canvassed by the Applicant. The stand of the Applicant that the Operational Creditor is operating its office from Chennai depot is not a 'sufficient cause' or a 'reasonable cause' for the Tribunal to condone the delay in filing the main Application. In the present case, the Applicant has not satisfactorily explained to this Tribunal the delay of 48 days (albeit 79 days) in filing the main Application - Application dismissed. Service Tax 2021 (6) TMI 908 Rejection of application before Settlement Commission - true declarations made by the petitioner or not - non-payment of service tax on broadcasting services and sale of space or time for advertisement services - HELD THAT:- In the present case, there is a clear finding that the petitioner has not cooperated for the adjudication only in the event of true and clear declaration. Settlement can be made and even an iota of doubt in respect of the declaration could be sufficient to send the matter back to the adjudicating authority. The provision as stated in Section 32E of the Central Excise Act, 1944, would clearly reveal that a person approaching the Settlement Commission must establish that the application contains full and true disclosure of his duty liability which has not been disclosed before the Central Excise Officer having jurisdiction. Thus, an approach to the Commission must be not only genuine, it must be proved that the application contains the true and full disclosure of duty liability, which has not been disclosed before the Central Excise Officer concerned - In the absence of an element of truthfulness in the application, the Commission is liable to reject the application in limini and send the matter back to the adjudicating authority by invoking Section 32L of the Act. This being the scope of consideration by the Settlement Commission, the findings of the Settlement Commission are of paramount importance for the purpose of considering this writ petition. The findings of the Settlement Commission reveal that the petitioner has not approached with clean hands. The show cause notice was issued for non-payment of service tax on broadcasting services and sale of space or time for advertisement services. Once a dispute is raised and the petitioner approached the Settlement Commission, without furnishing full and true disclosures, then there is no reason whatsoever for the Commission to entertain the application for settlement and thus, the writ petitioner is not entitled for settlement by invoking the provisions of the Act. The provisions for settlement are provided in a statute enabling the aggrieved person to come out with true facts and settle the issue peacefully to avoid prolongation and protraction of disputes. Thus, the settlement provisions are made for the welfare of the assessees and the said provisions are to be implemented in its spirit and the provisions for settlement cannot be dealt with reference to the disputes, if any, exist between the parties - this Court has no hesitation in arriving a conclusion that the petitioner has not established any acceptable reasons for the purpose of interfering with the order passed by the Settlement Commission. Petition dismissed. 2021 (6) TMI 906 Levy of Service tax - Noticepay - amount received as consideration towards tolerating the act of breach of contract by the employee - declared service or not - HELD THAT:- The issue in hand is if Service Tax can be demanded on amount recovered by the employer from the employee for granting waiver of mandatory notice period prescribed in the agreement. The issue has been settled by the Hon ble High Court of Madras in the case of GE T D INDIA LIMITED (FORMERLY ALSTOM T D INDIA LIMITED) VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE [ 2020 (1) TMI 1096 - MADRAS HIGH COURT] where it was held that the employer cannot be said to have rendered any service per se much less a taxable service and has merely facilitated the exit of the employee upon imposition of a cost upon him for the sudden exit. Appeal dismissed - decided against Revenue. 2021 (6) TMI 900 Refund of unutilized input service credit - rejection of part claim on the ground that input services was taken for the period before October 2016 while arriving at the total CENVAT Credit taken during the quarter October to December 2016 - HELD THAT:- A more or less similar issue has been addressed to by the Learned Bench wherein also the appellant had clubbed its refund claims and the Bench had held that The restriction under notification provided to avoid multiple claims in particular quarters therefore the claim should be filed quarterly basis but if the claim is filed after six months for two quarters there is no violation of any condition. Only condition which bar the refund is refund should be filed within the overall period of one year from the relevant date. If that be so refund is well within the time limit and same should be allowed. Further, it has been held by co-ordinate Mumbai CESTAT (M/s. WNS Global Services Pvt. Ltd. vs. C.C.E., Pune III [ 2015 (11) TMI 905 - CESTAT MUMBAI] , followed in M/s. Q Logic India Private Limited vs. C.S.T., Pune [ 2016 (7) TMI 1175 - CESTAT MUMBAI] that for the purposes of refund, the CENVAT credit of any particular quarter will include the amount of brought forward credit as well from the earlier quarter - When this is the position of law, then denying the refund on the ground that the CENVAT Credit on input services was taken for the period before October 2016 while arriving at the total CENVAT Credit taken during the quarter October to December 2016, cannot stand. The rejection of the refund claim is improper - it is held that the appellant s claim for refund is in order and the rejection of the same is improper - Appeal allowed - decided in favor of appellant. 2021 (6) TMI 897 Refund of Service Tax paid - rejection on the ground that the claims are beyond the period of limitation mentioned in the N/N. 12/2013-ST, dated 01.07.2013 - whether the time-limit prescribed in the notification would prevail over sections 51 and 26(1)(e) of the SEZ Act? - HELD THAT:- The issue was considered by the Hon ble Telengana and Andhra Pradesh High Court in the case of GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [ 2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT ] . The Division Bench of the Tribunal in the case of M/S DLF ASSETS PVT. LTD. VERSUS THE COMMISSIONER, SERVICE TAX, DELHI I [ 2020 (11) TMI 35 - CESTAT NEW DELHI ]. It was held that the conditions of the notification cannot be pressed into application to deny the refund to a SEZ Unit. The rejection of refund on the ground of limitation cannot sustain - Appeal allowed - decided in favor of appellant. Central Excise 2021 (6) TMI 879 CENVAT Credit - supplementary invoices - goods cleared to sister concern on stock transfer basis - contravention of Rule 9 of the Cenvat Credit Rules, 2004 - HELD THAT:- M/s.Jai Balaji Industries Ltd. (Unit-I) was initially discharging their duty on the goods cleared to their sister concern on stock transfer basis, sales price to independent buyers during the relevant period. However, at the instance of the department, M/s.Jai Balaji Industries Ltd. (Unit-I) discharged their differential duty on the revised assessable value taking into consideration 110% of the cost of manufacture of the goods as per Rule 9 read with Rule 8 of Central Excise Act Valuation Rules, 2000. This has resulted in payment of differential duty. After discharging differential duty they had issued supplementary invoices in favour of the appellant-assessee on which the appellant-assessee had availed Cenvat credit - Rule 9(1)(b) of the Cenvat Credit Rules, 2004 prescribes that Cenvat credit availed on subsequent invoices involving sale of goods is denied in the circumstances where suppression of fact, misstatement etc. are involved. In the present case there is no sale of goods, but the differential duty has been paid on stock-transfer of goods by M/s.Jai Balaji Industries Ltd. (Unit-I) to the appellant-assessee - the entire exercise is revenue neutral and therefore Cenvat credit cannot be denied on the supplementary invoices issued to the sister concern for the differential duty paid - Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2021 (6) TMI 910 Validity of provisional assessment order - pre-amended provision under Section 19 for an input tax credit is to be considered for the purpose of passing an assessment order - Section 51 of the TNVAT Act - HELD THAT:- Institutional respect is of paramount importance. Even the point of jurisdiction, limitation, error apparent on the face of the record, are on merits and all are to be adjudicated before the appellate authority and the appellate authority, more specifically, the Appellate Tribunal or the Commissioner (Appeals), as the case may be, is empowered to adjudicate all such legal grounds raised by the respective parties and make a finding on merits. Thus, usurping the powers of the appellate authorities by the High Court by invoking its powers under Article 226 of the Constitution of India is certainly unwarranted. The parties must be provided an opportunity to approach the appropriate authorities for redressal of their grievances in the manner known to law. In the event of entertaining all such writ petitions, the High Court will not only be over-burdened, but usurping the powers of the appellate authority, which is certainly not desirable. Jurisdictional error should not result in exoneration of liability - Jurisdictional error, if any committed, is technical, and thus, rectifiable. In such circumstances, the Courts are expected to quash the order passed by an incompetent authority and remand the matter back for fresh adjudication. The higher authorities of the Department are expected to be watchful and review the orders passed by the subordinate authorities and in the event of any negligence, dereliction of duty, collusion or corrupt activities, such officials are liable to be prosecuted apart from initiation of departmental disciplinary proceedings. The procedures to be followed in the department for assessment are well settled. Thus, the authorities competent are not expected to commit such jurisdictional errors in a routine manner. In these circumstances, review of such orders by the higher authorities are imminent to form an opinion that there is willful or intentional act for commission of such jurisdictional errors, enabling the assesses to get exonerated from the liability. Liability and jurisdictional errors are distinct factors, and therefore, Courts are expected to provide an opportunity to the Department to decide the liability on merits and in accordance with law with reference to the provisions of the Act and Rules and guidelines issued by the Department. The authorities competent shall proceed with the final assessment by affording opportunity to the assessee and by following the procedures contemplated under the statute. If any final assessment order has been passed thereafter, if the petitioner is aggrieved, he is at liberty to prefer appeal under Section 51 of TNVAT Act - Petition disposed off. 2021 (6) TMI 909 Violation of principles of natural justice - reopening of assessments - dealer neither failed to file their objection / availing personal hearing nor the declaration form - non-application of mind - HELD THAT:- The respondent being a statutory authority is expected to discharge statutory functions in accordance with Section 84 of the TNVAT Act. It appears that the petitioner has repeatedly approached the respondent in person and requested to consider the representation, dated 26.12.2020, but the same has not yet been considered - Considering the submissions made by the learned counsel appearing for the petitioner as well as the respondent it would be appropriate to direct the respondent to dispose of the representation of the petitioner, dated 26.12.2020. The respondent is directed to dispose of the representation of the petitioner, dated 26.12.2020, on merits, and in accordance with law, within a period of 12 weeks from the date of receipt of a copy of this order - petition disposed off.
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