TMI Tax Updates - e-Newsletter
June 7, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
FEMA
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
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Income Tax:
Power of Jt. CIT to issue notice u/s. 148 - Only a Jt. CIT where authorized u/s. 120(4)(b) by the Chief Commissioner or Commissioner, would qualify to be a AO in respect of the person specified in the said authorization - AT
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Income Tax:
Computation of deduction under Section 80IA – the service charges, labour charges and transportation charges incurred were for erection testing and commissioning of the units sold - deduction allowed. - HC
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Income Tax:
Immunity - Settlement commission - Third person - The petitioner cannot challenge and question the order of the Settlement Commission being the beneficiary of the order. - HC
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Income Tax:
Income u/s 2(24) - Whether the tax paid by the employer is a “perquisite” within the meaning of Section 17(2) and, therefore, in terms of Rule 3 of the Income Tax Rules, 1962 cannot be taken into consideration for computing value of the perquisite “rent free accommodation” - HC
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Income Tax:
TDS u/s 194A on Interest - Disallowance of re-imbursement of interest u/s.40(a)(ia) - payment of interest through the parent company - no justification to invoke the provisions of sec.40(a)(ia) of the Act in making the disallowance. - AT
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Income Tax:
Whether Tribunal was right in holding that the entire land introduced by the partners as their capital and later on withdrawn in the year 1986 was an agricultural land, treating it as individual property of the respective partners - HC
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Income Tax:
Capital gains - Transfer of property - joint development agreement - capital gains on the assessee’s land correctly brought to tax by the AO - AT
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Income Tax:
Payments of commission to relatives and sister concerns - excessive or unreasonable - so long as there is no intention to evade tax and so long as the commission is not shocking, the said commission has to be accepted, particularly in the light of the wordings of sec. 40A(2) of the Income-tax Act - AT
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Customs:
Seeks to levy provisional anti-dumping duty on import of Digital Offset Printing Plates, originating in or exported from Peoples' Republic of China. - Notification
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Customs:
Doctrine of forum conveniens - Territorial Jurisdiction of High Court - The conclusion that where the appellate or revisional authority is located constitutes the place of forum conveniens as stated in absolute terms by the Full Bench is not correct as it will vary from case to case and depend upon the lis in question. - HC (LB)
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DGFT:
Safeguard Measures (Quantitative Restrictions) Rules, 2012. - Notification
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DGFT:
Amendments in the Reward/Incentive Schemes of Chapter 3 of Foreign Trade Policy 2009-14 - Appendix 37A, Appendix 37C and Appendix 37D of Handbook of Procedure (Vol. I). - Public Notice
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DGFT:
Introduction of electronic Bank Realization Certificate (e-BRC) system. - Public Notice
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DGFT:
Foreign Trade Policy, 2009-2014 Effective from 05/06/2012. - Notification
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Indian Laws:
Highlights of Annual Supplement 2012-13 to Foreign Trade Policy 2009 -14.
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Service Tax:
Service tax - reimbursement of expenses - what are costs for inputs services and inputs used in rendering services cannot be treated as reimbursable costs as there is no justification or legal authority to artificially split the cost towards providing services partly as cost of services and the rest as reimbursable expenses - AT
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Service Tax:
Amendment in Service Tax vide Finance Act, 2012, regarding negative list shall be effective w.e.f. 1-7-2012 - Notification
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Service Tax:
Amendment in Service Tax vide Finance Act, 2012 to the existing provisions empowering the CBEC to withdraw the provisions of positive list shall be effective from 1-6-2012 - Notification
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Service Tax:
ST - When the assessee having centralized billing and accounting system, non-registration of branch office would not come in the way of availment of Cenvat credit. - AT
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Service Tax:
ST - Whether the revisional authority has jurisdiction to impose penalty for the first time when it has not been imposed by the adjudicating or assessing authority by invoking Section 80 – Held No - HC
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Service Tax:
ST - Whether the penalty imposable under the Finance Act, 1994 is automatic – Held no - HC
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Central Excise:
Since the Settlement Commission has imposed a consolidated penalty in respect of the past clearances as well as the impugned consignment after taking note of the fact that the appellants have admitted their duty liability, a separate penalty cannot be sustained.- AT
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Central Excise:
Excisability - Manufacture - Merely because the appellants were supplying the raw material, exercising supervisory quality control over the goods, it cannot be made a ground for holding that he is the manufacturer. - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2012 (6) TMI 115
Traveling expenses incurred on foreign travel - Revenue dis-allowed expenditure on ground that same was not incurred for business purpose - Held that:- If there is a foreign travel in connection with the business, merely because in the said foreign travel, no business could be transacted or the foreign travel did not result in bagging any contract is not the determinative factor. It is not also necessary that the expenditure could be claimed by the assessee only if person sent was a Director or an employee. Board's resolution produced indicate that travel had been undertaken solely for the purpose of the assessee‟s business - expenditure allowed - Decided in favor of assessee. Requirement of giving a notice of hearing before charging of the interest u/s 217 - Held that:- Issuance of show cause notice is not a condition precedent before charging interest u/s 217 as the requirement of notice was satisfied during the assessment proceedings itself.
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2012 (6) TMI 114
Validity of Revisionary order passed u/s 263 - order purported to bring into tax net capital gains earned on sale of house property in United Kingdom on 31.05.2005 by assessee who's residential status during the relevant previous year was 'resident but not ordinarily resident' - Held that:- The mere fact that assessee relocated to India on 29th May 2005 does not alter her residential status, so far Income Tax Act is concerned with effect from that date. In the cases of non-residents, as also in the cases of 'resident but not ordinarily resident', unless, at the time money is received in India, it is received as income from an outside source, such receipt will not be an income receipt. The income was received in United Kingdom and it is only subsequent remittance, which is wholly irrelevant for taxability purposes, which was received in India. Order of Commissioner thus stands vacated - Decided in favor of assessee.
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2012 (6) TMI 113
Commission paid to Directors - dis-allowance on ground that commission payment was unjustified since gross profit of the company declined, and directors were getting sufficient remuneration and there was no ground to pay commission - Held that:- Assessing Officer cannot decide what the assessee should do and pay. Disallowances can be made u/s 40A(2), when warranted and required and when the conditions of the said section are satisfied. Commission paid to the Managing Director /Director was in accordance with the provisions of the Companies Act, 1956 - Decided in favor of assessee.
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2012 (6) TMI 112
Exemption u/s 10A - denial on ground that assessee did not fulfill the conditions stipulated in clauses (a),(b)and(c) to Section 10A(2)(i) - Revenue contended that clause (c) applicable w.e.f. 1st April, 2001 had the effect of overriding clauses (a) and (b) - Held that:- clause (c) extends the benefit and does not withdraw the benefit extended and available to undertakings covered by clauses (a) and (b). The three clauses are mutually exclusive and operate in their own field. Facts on records reveal that STP registration was granted to the erstwhile partnership firm whose entire business was transferred to the assessee in 2005. The name of the assessee -company was substituted in the STP registration record, which is located in a STP and thus is accordingly covered by Section 10A(2)(i)(b) - Decided in favor of assessee
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2012 (6) TMI 111
Application of section 44D or section 44BB - revision u/s 263 - providing equipment and services in connection with prospecting and extraction or production of mineral oil. - Leasing of seismic vessel to to the CGG - CGG used the vessel for collecting seismic data for the ONGC Ltd. - held that:- In fact, nothing prevented the ld. Director of Income-tax to give a finding that the case did not fall u/s 44BB but fell u/s 44D as the relevant agreement was on record. Further, on the basis of ruling in the case of Wavefield Inseis ASA, In re (2009 (12) TMI 5 (AAR)), it can be said that two views are possible in the matter, as the view taken by the ld. AAR in similar circumstances is that the provisions contained in section 44BB are applicable. In such a situation also, the order cannot be said to be erroneous and prejudicial to the interest of revenue as following one permissible course of action rather than the other does not lead to an order which is erroneous and prejudicial to the interest of revenue. Accordingly, it is held that the ld. Director of Income-tax erred in setting aside the matter on this ground.
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2012 (6) TMI 110
Unsecured loans - Unexplained cash credit u/s 68 - held that:- there is no dispute that the unsecured loans in the account of Ms.Usha Menon and Deepa Travels are appearing in the earlier year’s balance-sheet of the assessee as on 31.3.2005. However, from the confirmation letters filed by the assessee, we observe that there is difference in the old balances and current years figures which the assessee could not reconcile even at this stage. - matter remanded back to AO. Adhoc addition of cash expenses u/s 40A(3) - held that:- The AO without pointing out any payment in cash by the assessee over Rs.20,000/- made disallowance u/s 40A(3) of the Act. - merely because the assessee before the Ld. CIT(A) has stated that, in alternative, the addition is on a very higher side and the same may be reduced, does not mean that the disallowance can be made u/s 40A(3) of the Act or on adhoc basis the same may be reduced to 10%. - Decided in favor of assessee. Non deduction of TDS u/s 194C - held that:- since the assessee paid the TDS amount of Rs.2,96,316/- on 8.6.2006 before the due date of filing return of income u/s 139(1) of the Act, therefore, the impugned disallowance u/s 40(a)(ia) made by the AO is deleted.
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2012 (6) TMI 109
Power of Jt. CIT to issue notice u/s. 148 and also recording the reason(s) for the same – assessee contested that Jt. CIT is not its Assessing Officer competent to record the reason/s and issue notice u/s. 148 – Revenue contested the Jt. CIT, Sri Ganganagar has jurisdiction over the assessee by virtue of Notification No.1 of 2001-02 issued by the CIT, Bikaner - Held that:- Only a Jt. CIT where authorized u/s. 120(4)(b) by the Chief Commissioner or Commissioner, would qualify to be a AO in respect of the person specified in the said authorization whereas the Revenue has not brought on record any order/ direction/ notification u/s. 120(4)(b) - the Notification No. 1/2001-02 issued by the CIT, Bikaner convey a general order passed in exercise of the powers u/ss. 120(1) and 120 (2) to perform functions in respect of the persons residing or having their principal place of business, registered office located within the district of Sri Ganganagar and the same does not confer on him the powers and functions of an AO, which could only be by an order passed by the Chief Commissioner in pursuance of the powers conferred on the said authority by the Board u/s. 120(4)(b) – the Revenue's claim of Jt. CIT holding concurrent jurisdiction with the ITO, Ward 1, Sri Ganganagar is, therefore, without substance as no scope for application of s. 292B of the Act - in favour of assessee.
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2012 (6) TMI 108
Re-opening of the concluded assessment - claim of deduction under Section 80IB(10)questioned - writ petition to issue a Writ of Certiorari – assessee contested that the re-opening of the assessment is a case of `change of opinion on a concluded scrutiny assessment - the petitioner is a domestic private limited company, engaged in the business of engineering works, building and developing of residential properties - Held that:- Notice for the re-opening of the assessment has not stated that the petitioner had failed to fully and truly disclose the material facts relevant for the passing of the original assessment order - the petitioner had placed all the relevant records including the construction agreement that he was operating only as a contractor and not as a builder in the light of the explanation to Section 80IB(10) introduced by the Finance Act, 2009 with retrospective effect, from 1.4.2001, it would not be open to the respondent to re-open the assessment before the passing of the original assessment order - thus it is not the case of the respondent that the petitioner had suppressed certain material facts due to which the original assessment order passed by the respondent is liable to be reassessed – in favour of assessee.
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2012 (6) TMI 107
Re-opening of the concluded assessment - whether the petitioner company is entitled to claim deduction under Section 80IB(10) - writ petition to issue a Writ of Certiorari – assessee contested that the re-opening of the assessment is a case of `change of opinion on a concluded scrutiny assessment - petitioner is a domestic private limited company, engaged in the business of construction of residential/commercial complexes - Held that:- Notice for the re-opening of the assessment has not stated that the petitioner had failed to fully and truly disclose the material facts relevant for the passing of the original assessment order - the petitioner had placed all the relevant records including the construction agreement that he was operating only as a contractor and not as a builder in the light of the explanation to Section 80IB(10) introduced by the Finance Act, 2009 with retrospective effect, from 1.4.2001, it would not be open to the respondent to re-open the assessment before the passing of the original assessment order - thus it is not the case of the respondent that the petitioner had suppressed certain material facts due to which the original assessment order passed by the respondent is liable to be reassessed – in favour of assessee.
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2012 (6) TMI 106
Rate of tax u/s 115A - royalty - Amended collaboration agreement entered in 1981 to be treated as an extension of the old agreement of 1973 - the assessee claimed relief of deduction of 20% towards expenses, further deduction of 20% towards training and exemption in respect of lumpsum royalty and royalty on export sales if new agreement entered is considered to be the extension of earlier agreement - Held that:- Once 1981 agreement is treated as part of 1973 agreement, then the consequences of treating the second agreement as part of the original agreement should have been considered for applying the relevant statutory provisions under the Income Tax Act and in consonance with the Double Taxation Avoidance Agreement - Assessing Officer is directed to consider the claim of the assessee on the relief under DTAA agreement in respect of expenses towards free training, exemption under Section 9(i)(vi) in respect of lumpsum royalty as well as the claim for deduction under Section 44D towards expenses – partly in favour of assessee.
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2012 (6) TMI 105
Computation of deduction under Section 80IA – revenue contested that service charges for maintenance, charges for transportation, erection and commission charges, labour charges, sale of scraps during manufacturing are not to be included as profits and gains of the industrial undertaking for computation of deduction – Held that:- As decided in M/s Liberty India Versus Commissioner of Income Tax [2009 (8) TMI 63 (SC)] deduction provided under Section 80IA being "profit linked incentive” there exists no flaw in the order of the Tribunal - the service charges, labour charges and transportation charges incurred were for erection testing and commissioning of the units sold and were part of the receipts of the industrial undertaking come within the meaning of the profits and gains derived by the undertaking or an enterprise from any business and scrap sales also qualify for consideration under Section 80IA of the Act – in favour of assessee.
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2012 (6) TMI 89
Immunity - Settlement commission - Third person - While granting immunity from prosecution settlement commission has observed as, "No immunity is granted in respect of income contained in the seized papers on the basis of which computation of income has been made in the settlement application and which has been held not to belong to the applicant company by us. The department will be free to initiate penalty and prosecution proceedings in respect of these papers in appropriate hands as per law." - Petitioner sought to deleted this observation. Held that:- The Settlement Commission has accepted the full and true disclosure made by the petitioner, though there is dispute about the manner in which the undisclosed income was earned. - The petitioner cannot insist and claim that their application should have been dismissed as they had failed to make disclosure on the manner in which the said income was earned. - The Settlement Commission has taken on record the reasoning given by the petitioner for earning the said income and expressed dissatisfaction. Even before us the petitioner insists that it had made fully and true disclosure and also stated the manner in which the said income was earned. The petitioner cannot challenge and question the order of the Settlement Commission being the beneficiary of the order. - Decided against the petitioner with cost.
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2012 (6) TMI 88
Income u/s 2(24) - Whether the tax paid by the employer is a “perquisite” within the meaning of Section 17(2) and, therefore, in terms of Rule 3 of the Income Tax Rules, 1962 cannot be taken into consideration for computing value of the perquisite “rent free accommodation” - held that:- The definition of 'income' in clause (24) of Section 2 of the Act is an inclusive definition. It adds several artificial categories to the concept of income but on that account the expression 'income' does not loss its natural connotation. Indeed, it is repeatedly said that it is difficult to define the expression 'income' in precise terms. Anything which can properly be described as income is taxable under the Act unless, 'of course, it is exempted under one or the other provision of the Act. Under the then applicable Rule 3 value of perquisite “rent free accommodation” has to be calculated. The underlined portions above support and affirm our findings. - Rule 3 has undergone change/ amendment with effect from 01.04.2001 and as per the amended Rule, perquisite under Section 17(2) has to be excluded for the purpose of computing perquisite value of “rent free accommodation”. - Decided against the revenue.
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2012 (6) TMI 87
Validity of reassessment notice issued for AY 1984-85, 1985-86, 1986-87 on ground that no amalgamation between M/s Modipon Ltd. and M/s Indofil Chemicals ltd. had taken place in the accounting years ended on 30.6.1983 and 30.6.1984 - effective date of amalgamation is 1st July, 1982 - Revenue contending date of amalgamation to be appointed date therefore, amalgamation took place after 31st March, 1986 - Held that:- It is undisputed that assessment for AY 84-85 and 85-86 were completed recording that the business income/earnings of Indofil Chemicals Ltd. was treated as income/earnings of chemical division of the Modipon Ltd. Further in AY 86-87 Tribunal decided in favor of assessee holding that amalgamation was effective from 1st July, 1982 and accordingly income of Indofil Chemicals Ltd. was assessable in the hands of the petitioner (Modipon Ltd.) on the basis of the scheme of amalgamation which was effective from 1st July, 1982. Since Tribunal order became final, petitioner is entitled to succeed in the present writ petitions and the reassessment notices issued are accordingly set aside and quashed.
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2012 (6) TMI 86
Unexplained cash credit u/s 68 - share application money - held that:- assessee has discharged its onus, cast upon it. Even the identity of the share applicant is not disputed by the ld. Assessing Officer. Even otherwise, the ld. Assessing Officer has not brought any adverse material on record to prove otherwise. - Decided in favor of assessee. Application of section 50C on depreciate assets - held that:- provisions of section 50C were applicable to transfer of depreciable asset covered by section 50 and the capital gain arising from such transfer has to be computed by adopting the stamp duty valuation.
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2012 (6) TMI 85
TDS u/s 194A on Interest - Disallowance of re-imbursement of interest u/s.40(a)(ia) - payment of interest through the parent company - As per the language used by the Parliament what is contemplated is the ‘interest in the form of income’. In the present case the argument of the assessee is that it is only reimbursement of the interest payment in respect of the funds utilised by the assessee towards borrowing facility of it’s parent company. - held that:- the assessee is under no statutory obligation to deduct the tax at source u/s.194A of the Act and, hence, there is no justification to invoke the provisions of sec.40(a)(ia) of the Act in making the disallowance. R&D expenditure - Software Solutions - capital expenditure or revenue expenditure - held that:- without supporting evidence it is very difficult to accept the plea of the assessee in respect of the nexus of the said expenditure with the development of the software and also to arrive at a conclusion whether the same can be treated as a revenue expenditure being recurring in nature. - Decided against the assessee.
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2012 (6) TMI 84
Whether Tribunal was right in holding that the entire land introduced by the partners as their capital and later on withdrawn in the year 1986 was an agricultural land, treating it as individual property of the respective partners - Revenue contending such contribution of land as partnership firm's property on ground that land appurtenant to the structure was also part and parcel of the business of the assessee firm and the land cannot be separated from the building after construction of structure - Held that:- Tribunal observed that at no point of time the ownership of the land was transferred to the partnership firm by means of transfer entry or sale deed. Further, the land was always treated as agricultural land in the earlier assessment years, therefore, finding by the Tribunal that it was agricultural land for the relevant AY and it belonged to the individual partners and was never partnership firm's property is perfectly justified.
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2012 (6) TMI 83
Dis-allowance u/s 14A of interest expenditure and administrative expenses on ground of same attributable to exempt income earned on account of dividend and long term capital gain - assessee is in the business of making investments, besides other business - earlier, it was carrying on the activity of manufacturing and dealing in Textiles - Held that:- CIT(A) have rightly deleted dis-allowance of interest expenditure on ground that no interest expenditure stands shown as relating to the period during which the assessee company was only an investment company. Entire interest expenditure actually related to the earning of taxable income from the Textile Division. Since no nexus was brought by the AO between the borrowed funds and the tax free investment. That being so, disallowance of interest on borrowed funds was entirely uncalled for. Administrative expenses - Held that:- It cannot be gainsaid that the disallowance u/s 14A of the Act cannot be made on an ad-hoc basis and it is the Department’s responsibility to justify any such disallowance by bringing material on record to show that any expenditure was incurred for earning the exempt income. In the absence of such evidence, it was wrong on the part of the AO to proceed to compute disallowance of the expenses u/s 14A of the Act by merely applying Rule 8D(2)(iii) of the Rules. Deduction u/s 80IA/80IB - denial of deduction u/s 80 IA/80 IB for pre-demerger period to assessee company or resulting company regarding the assessee’s three units which stood demerged pursuant to the Demerger Scheme - denial also on ground that same has not been claimed in Return - Held that:- Circular No. 15/5/63 – IT(A-I) dated 13.12.63 relates that the Board agreed that the benefit of section 84 attached to the undertaking and not to the owner thereof and that the successor would be entitled to the benefit of the unexpired period of 5 years, provided the undertaking was taken over as a running concern. It is on record that audit report in form No. 10 CCB, has been filed, in which deductions u/s 80 IA(12)/80 IB(12) were duly certified to have been claimed by the assessee. It is undisputed that the claim was made by way of a Note appended to the original return of income. It cannot be gain-said that the Note to the return of income formed an integral part of the return. Thereby, it cannot be held that the deduction was not claimed in the return of income. Therefore, AO erred in denying the deduction u/s 80 IA(12)/80 IB(12) - Decided in favor of assessee.
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2012 (6) TMI 82
Set off of loss on trading in futures and options as business loss against business income - applicability of Explanation to section 73 to transactions entered into in 'Future and Options i.e. derivatives transactions of NSE - Revenue contending the same to be specualtion loss - Held that:- Transactions of 'Future and Options' are not shares although underlying asset for determining prices of future and options, which are shares, commodities, currencies etc. Future and options are in themselves the items, which are traded through stock exchange and not the underlying items to which 'future and options' relate. It means 'future and options' are not covered by Explanation to section 73 for the reasons that this is specifically excluded by way of clause (d) to section 43(5) w.e.f 01-04-06 by the Finance Act'05. It is clear that Explanation to section 73 refers to the business of purchase and sale of shares and not the business of derivative transactions carried out by recognized stock exchange by the assessee. Therefore, CIT(A) rightly allowed the set off of loss against normal business income - Decided against the Revenue.
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2012 (6) TMI 81
Search/ survey proceedings on group concerns - additions - alleged unexplained investment with HMA Group - Revenue contended unaccounted purchases on basis of few bills found during survey - Held that:- Evidence on record does indicate that these are only accommodation bills for obtaining the loans. Just because there are certain bills available, it cannot be considered as unaccounted purchases unless there is evidence that assessee purchased the goods in question and paid the amount outside the books of account. Assessee contended that amounts were settled by way of LC proceeds and these were accounted for in the books of account. In the absence of any actual purchase and the fact that the bills were discounted in the Bank, which were accounted in the books of account takes it out of the unaccounted purchase provisions of the I.T. Act - Addition deleted Alleged unaccounted sales to Liberty Marketers - dispute regarding name in which bills are raised between both parties - Held that:- As the matters were disputed, contentions were not accepted, and in absence of inquiry and examination of the actual details, matter restored to file of AO Interest paid in cash and relatable loan taken and repaid in cash - assessee contended that interest was taken upfront i.e. the interest would be deducted from the principal amount at the time of advancing the loan itself and these amounts are taken by way of cheques - Held that:- As far as the amounts of loan taken, they are tallying with the dates and these amounts are taken by way of cheques. Matter require further examination - File restored to AO. Alleged unaccounted sales to Depot - dispute is with reference to the goods sent to Branch considered as unaccounted sales of the HO on the basis of the statement obtained from the Branch office - assessee submitted that out of sales statement of 6346 No. of items, Branch has accounted sales of 2698, hence sales of 2698 may be added - Held that:- Addition is restricted upto 2698 items, balance to be deleted. Entire sales proceeds of aforesaid items will be added as against assessee contention of adding only profits. Alleged unaccounted stock at depot - no addition made in assessment order - Held that:- Unaccounted stock found subsequent to the date of search cannot be considered in the block assessment proceedings and may have to be considered under the regular assessment proceedings - Addition deleted. Alleged Cash Credits - Held that:- Since credits are accounted in the books of account and is a subject matter of inquiry in the regular assessments, therefore, in the absence of incriminating material in the course of search, these cannot be examined in the proceedings u/s 158BC. Benefit of telescoping in block assessment - Held that:- Since few grounds are restored to file of AO. hence ultimate examination of telescoping benefit has to be done by AO after deciding the issues afresh.
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2012 (6) TMI 80
Capital gains - Transfer of property - joint development agreement - Validity of reassessment order passed under section 143(3) r.w.s. 147 of the Act. - held that:- It is seen that the learned CIT(A) found that the Assessing Officer issued the notice under section 148 only after obtaining the sanction of the appropriate authority [mentioned in section 2(28C)] as laid out in section 151 of the Act. We also find that all the objections raised by the assessee, pointing out so called infirmities in the said notices, have been addressed in accordance with the provisions of section 292(b) and the judicial decisions cited were distinguished by the learned CIT(A) - Decided against the assessee. Capital gains - Transfer of property - joint development agreement - held that:- the assessee transferred all control and interest in the land to the developer at the time of agreement dt.30.6.1994 when the assessee gave the developer exclusive rights over the property. The assessee has not been able to produce any contrary evidence to show that the property was handed over on any subsequent date and more so in the period relevant to Assessment Year 2003-04. - in accordance with the provisions of section 2(47) of the Act r.w.s. 53A of the Transfer Property Act, 1882, we hold that the capital gains on the assessee’s land at Kayathamaranahalli, Mysore has been correctly brought to tax in Assessment Year 1995-96 by the Assessing Officer. - Decided against the assessee.
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2012 (6) TMI 79
Disallowance u/s 40A(2) - payments of commission to relatives and sister concerns - excessive or unreasonable - held that:- so long as there is no intention to evade tax and so long as the commission is not shocking, the said commission has to be accepted, particularly in the light of the wordings of sec. 40A(2) of the Income-tax Act and it is not the quantum alone that govern such cases but the fair market value of the goods, services, legitimate needs of the business or profession of the assessee would be guiding factor in terms of sec. 40A(2) of the Income-tax Act.
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Customs
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2012 (6) TMI 104
Plea for waiver of pre-deposit of duty and penalty imposed on applicants on ground of their role in regard to smuggling of Red Sanders wood of Indian origin - absolute confiscation of goods - Held that:- From facts it is clear that when the container containing the Red Sanders was intercepted, both the Applicants(employees of Jain Logistics) left the Office after handing over the keys to an unknown person and after handing over the unaccounted cash on the next day of the seizure, as per the direction of Director of M/s. Jain Logistics. Therefore, their role cannot be ruled out in the abetment of smuggling of Red Sanders. Further, since they could not produce any documentary evidence in support of their claim for financial hardships, therefore, applicants are directed to predeposit 10% of penalty in each case within eight weeks.
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2012 (6) TMI 77
Enhancement of assessable value of glass beads (semi-finished) imported for garments at US $0.32 to US $1.00 per Kg.(CIF) on the basis of DOV data - lower assessable value of the contemporaneous import of the similar goods denied on the ground that the appellant have not produced any B/E in support of their contention - Held that:- Now, the Appellant are in a position to submit the bills of entry numbers, which they have obtained through RTI, by evidencing the import at lower assessable value in case of similar goods. In these circumstances, the case is remanded to the Commissioner (Appeals) to decide the matter afresh.
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2012 (6) TMI 76
Doctrine of forum conveniens - Territorial Jurisdiction of High Court - Decision in the matter of New India Assurance Company Limited v. Union of India and Others [2012 (6) TMI 96 (HC)] Held that:- The finding recorded by the Full Bench that the sole cause of action emerges at the place or location where the tribunal/appellate authority/revisional authority is situate and the said High Court (i.e., Delhi High Court) cannot decline to entertain the writ petition as that would amount to failure of the duty of the Court cannot be accepted inasmuch as such a finding is totally based on the situs of the tribunal/appellate authority/revisional authority totally ignoring the concept of forum conveniens. Even if a miniscule part of cause of action arises within the jurisdiction of this court, a writ petition would be maintainable before this Court, however, the cause of action has to be understood as per the ratio laid down in the case of Alchemist Ltd. (2007 (3) TMI 382 (SC)). An order of the appellate authority constitutes a part of cause of action to make the writ petition maintainable in the High Court within whose jurisdiction the appellate authority is situated. Yet, the same may not be the singular factor to compel the High Court to decide the matter on merits. The High Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens. The conclusion that where the appellate or revisional authority is located constitutes the place of forum conveniens as stated in absolute terms by the Full Bench is not correct as it will vary from case to case and depend upon the lis in question. The finding that the court may refuse to exercise jurisdiction under Article 226 if only the jurisdiction is invoked in a mala fide manner is too restricted/constricted as the exercise of power under Article 226 being discretionary cannot be limited or restricted to the ground of mala fide alone. While entertaining a writ petition, the doctrine of forum conveniens and the nature of cause of action are required to be scrutinized by the High Court depending upon the factual matrix of each case in view of what has been stated in Ambica Industries (2007 (5) TMI 21 (SC)) and Adani Exports Ltd. (2001 (10) TMI 321 (SC)). The conclusion of the earlier decision of the Full Bench in New India Assurance Company Limited [2012 (6) TMI 96 (HC)] “that since the original order merges into the appellate order, the place where the appellate authority is located is also forum conveniens” is not correct.
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Corporate Laws
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2012 (6) TMI 116
Certification of shares - tainted shares - Claim of dividend – Custodian - Held that:- appellant under the facts and existing circumstances of the case where he ended up buying tainted shares for no fault on his part but had to seek its certification from the Custodian under compelling circumstance which was not his creation and also had no control, could not have been denied his due on the ground of delay in filing the application for certification specially when the appellant had sought certification of his shares only after two months of the cut off date for reasons beyond his control which cut off date has no statutory effect or legal force. The appellant on the one hand was saddled with the tainted shares for no fault on his part through respondent Nos. 4, 5 and 6 on which he had no control or any role to play and on the top of it, when he sought a remedy of certification for claiming dividends, he had to suffer an order by which his application was rejected on the ground that he had not moved an application within the cut off date which had no statutory force as the same had been fixed at the instance of the Custodian seeking approval from the Special Court. order of the Special Court set aside and allow this appeal as a result of which the respondent-Custodian shall entertain the application filed before the Special Court for certification of his shares and verify the claim of the appellant in regard to the shares.
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2012 (6) TMI 103
Winding up - misfeasance against the directors of the company-in-liquidation - liability of non executive director - Respondent No. 10 contended that he joined the company as a non-executive director and the purpose of his induction was to maintain 'liaison' between the company, State Bank of India and other financial institutions. - held that:- there is no evidence to suggest involvement of this respondent in any act of misappropriation or misapplication of the properties of the company. Therefore, the proceedings against him are dismissed. Loss to company - liability of directors – Held that:- when on the face of materials on record it can be shown that none except the directors and other officers in control of the company could be responsible for any act of misappropriation, then there is a presumption of guilt against the directors and these officers, which they have to rebut. Non-payment of sales tax - held that:- If the Government of Bihar deferred payment of sales tax there is a necessary implication that the amount collected as sales tax could be used for the purpose of the company and the tax paid later. Although such deferment was only up to September 30, 1994, still the official liquidator had the burden to prove that this sales tax amount had been misappropriated by the directors jointly or by some of them or one of them or by any other officer. Non-payment of Provident Fund, ESI and EDLI liabilities. - held that:- this amount was collected from the customers or employees and the company could not use these funds. - There is no such explanation for misappropriation of Provident Fund - higher penal interest imposed.
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2012 (6) TMI 102
Winding up - non-payment of outstanding dues – Held that:- respondent-company has miserably failed to prima facie establish its bona fide pleaded in defence in the reply to the winding up petition. despite persistent demands through repeated letters, besides legal notice sent through registered post, has neglected to pay outstanding dues, which prima facie establishes its inability to pay its debt. respondent-company is unable to pay its debts. winding up petition was to be ordered
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2012 (6) TMI 91
Negotiable Instruments Act – dishonor of cheque - Held that:- cheques referred to in both the complaints are presumed to have been given for consideration. The presumption under section 139 of the Act has not been rebutted by the accused and, therefore, trial court wrongly acquitted the accused by taking a view that there was no consideration for which the cheques were given by Munish Jain to the complainants. accused ought to have been held guilty, especially accused No. 4, Munish Jain who had signed all the cheques for M/s. A.T. Overseas Ltd. Munish Jain, accused No. 4 and respondent No. 4 herein, in both the cases guilty of the offence under section 138 of the Act. Accused Munish Jain was acquitted by the trial court and the High Court has confirmed the acquittal, which is being set aside by this Court by allowing these appeals. as per the provisions of section 235(2) of the Criminal Procedure Code, this Court will have to give an opportunity of being heard to him on the question of sentence
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2012 (6) TMI 75
Mismanagement and oppression - donation of significant sums of money to Madhav Prasad Priyamvada Birla Apex Charitable Trust, who are the Chairman of the Board and his family/associates control the said trust and such donations in substance constitute siphoning of funds of the company to the HVL controlled trust - application to prevent further flow of funds to the said trust - Order of CLB - violation of the principles of natural justice. - Held that:- they did not get adequate opportunity of hearing. stay of operation of the impugned order
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2012 (6) TMI 74
Maintainability of appeal - petitioners have alleged/various illegal acts on the part of the existing management of the company, and the prayers of the petitioner centre around preventing the existing management from running the affairs of the company - allegation is that the petition is a motivated one and for a collateral purpose and instigated by Birla groups and the petitioners and the consenting shareholders who had acquired shares recently cannot voice any grievance relating to alleged acts of oppression/mismanagement in the past – Held that:- once the qualification test laid down in section 399 of the Companies Act for maintaining an application under the provisions of sections 397 and 398 of the Act is satisfied, there is no further necessity to enquire into the quality of the applicant members before entertaining a petition of this nature. An appellant assailing an order of the Company Law Board is not usually required to obtain any entry-permit from the court before being allowed into the arena of adjudication at the appellate stage. If this established course is to be followed then the only enquiry at the stage of admission would be to ascertain from the memorandum of appeal as to whether the grounds on questions of law have been formulated or not, with a very broad correlation with the finding of the Company Law Board in the judgment under appeal. The scope of enquiry thus has to be minimal at this stage. Applying such minimal scrutiny test, in my opinion the appellants have made out a case for admission of the appeal. Pre-admission objection on the question of maintainability of the appeal is rejected.
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FEMA
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2012 (6) TMI 78
FEMA – Penalty for contravention of Sections 6(4) & 6(5) read with Section 13A-10 of Exchange Control Manual - granting of loan to the petitioner, a Non-Resident Indian (NRI) and relending of the same to the respondent No.5 M/s. Prime Petro Products Ltd. through its Chairman and Managing Director Sh. R.K. Mishra impleaded as respondent No. 6 – Held that:- Bank had at the time of granting loan to the petitioner obtained her undertaking that she was not taking the loan for further committing loan transaction and had also complied with the other instructions issued by the Reserve Bank of India in this regard. It was thus held that the Bank and its official could not be said to be privy to or in the know of the illegality committed and no case for imposition of penalty against them was made out – petitioner unable to explain as to how the petitioner is affected by the order so as to have a locus to challenge the same. petition dismissed.
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Service Tax
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2012 (6) TMI 121
Non-payment of service tax on account of ignorance and not on account of any suppression, fraud etc - payment of part tax before issue of SCN - Plea for waiver of penalty u/s 78 - waiver of penalty u/s 73(3) - benefit of cum-tax value - Held that:- Since assessee has promptly discharged tax liability together with interest even though they have separately not collected the tax amount from their customers and since there is no evidence of fraud, suppression etc., on their part, they can be given benefit u/s 73(3) to the extent the tax and interest has been paid by them prior to the issue of SCN, as the total amount paid by them towards tax and interest may be appropriated. Regarding payment made subsequent to the issue of SCN - Held that:- Since appellants were not given an option to pay 25% of penalty amount they may be allowed to pay 25% of the penalty amount within 30 days from the date of re-quantification of the tax amount. Order is set aside and the matter is remanded to the original authority for passing a fresh order for reworking the tax, interest and penal liability.
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2012 (6) TMI 120
Plea for waiver of pre-deposit of service tax of Rs 17.46 lacs and penalty of equal amount u/s 78 - dismissal of appeal by Commissioner(Appeals) for non-compliance with its order of making pre-deposit of Rs 10 lacs - assessee offered to make pre-deposit of Rs.2.00 lakhs - Held that:- Applicants are directed to deposit Rs 2 lacs and report compliance on stipulated date directly to Commissioner(Appeals). After waiving the requirement of pre-deposit of balance amount, it is held that since Commissioner(Appeals) has not decided the issues on merits. Therefore the case is remanded to Commissioner(Appeals) for deciding the issue on its merits without insisting for any further pre-deposit.
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2012 (6) TMI 119
Service tax demand on the entire bill value amount without allowing a deduction for the reimbursement expenses - Ld. Commissioner disallowed the claim as the appellants have not produced the supporting documents evidencing the claim whereas the contention of assessee is that now they are in a position to produce the requisite documents - Held that:- In light of the judgment of the case of Sri Bhagavathy Traders Vs. Commissioner of Central Excise, Cochin [2011 (8) TMI 430 (Tri)] wherein guidelines have been laid down how to compute the expenses defines that only when the service recipient has an obligation legal or contractual to pay certain amount to any third party and the said amount is paid by the service provider on behalf of the service recipient, the question of reimbursing the expenses incurred on behalf of the recipient shall arise - the claim for reimbursement towards rent for premises, telephone charges, stationery charges, etc. amounts to a claim by the service provider that they can render such services in vacuum - what are costs for inputs services and inputs used in rendering services cannot be treated as reimbursable costs as there is no justification or legal authority to artificially split the cost towards providing services partly as cost of services and the rest as reimbursable expenses - the aforesaid decision was not before the ld. Commissioner while passing the Order, the case is remanded to the Ld. Commissioner to decide afresh.
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2012 (6) TMI 118
Waiver of pre-deposit and stay of recovery - refund claim - refund claimed by the builder before the original authority is on the ground that they were not liable to pay Service Tax on the taxable value on which the sub-contractor (the present appellant) paid tax - main contention raised by the learned counsel is that the Department cannot recover Service Tax on a given taxable value from both the builder and the sub-contractor – Held that:- orders of the lower authorities set aside and allow this appeal by way of remand, application disposed of
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2012 (6) TMI 117
Extended period of limitation - demand of Service tax - photography services - whether the value of input materials used by them is required to be added in the value of services being provided by them so as to make the entire gross amount charged by them from their clients leviable to service tax - period involved in the present appeals is from October, 2004 to May, 2005 – Held that:- in the case of CCE v. Satyam Digital Photo Lab (2011 (9) TMI 199 (Tri)), notices issued beyond the period of limitation would not stand inasmuch during the relevant period, there was sufficient material for the assessee to entertain a bona fide belief that the value of raw material used would not form part of the value of services. demand beyond the period of limitation is time-barred and no penalty is required to be imposed. Matters are remanded for requantifying the duty demand falling within the period of limitation, if any. Appeals are disposed of
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2012 (6) TMI 95
CENVAT credit on GTA services - period involved January, 2005 to July, 2006 - assessee contended that since the period involved in the present case is prior to 01.04.2008, accordingly the Service Tax paid on the Outward GTA Service, is available to them as CENVAT Credit - Held that:- Issue of availing the CENVAT Credit on GTA service as an input service under Rule 2(l) of the CENVAT Credit Rules, 2004 is no more res integra. Accordingly, Order passed by the Commissioner (Appeals) is set aside and the Appeal is allowed in favor of assessee.
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2012 (6) TMI 94
CENVAT credit on GTA services - period involved January, 2005 to February, 2006 - assessee contended that since the period involved in the present case is prior to 01.04.2008, accordingly the Service Tax paid on the Outward GTA Service, is available to them as CENVAT Credit - Held that:- Issue of availing the CENVAT Credit on GTA service as an input service under Rule 2(l) of the CENVAT Credit Rules, 2004 is no more res integra. Accordingly, Order passed by the Commissioner (Appeals) is set aside and the Appeal is allowed in favor of assessee.
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2012 (6) TMI 93
Waiver of pre-deposit - adjustment of excess payment of service tax when the appeal is pending before Tribunal and stay has been granted - Held that:- appellant submitted that the issue as to whether the appellant was liable to pay Rs. 9,11,520/- during the year 2006-07 is before the Tribunal and stay against the recovery of the same has already been granted, matter is pending before the Tribunal and stay has been granted, it cannot be said that this amount has been confirmed, proper procedure to be followed would have been to wait for the outcome of the appeal filed by the appellant and pending before the Tribunal and before reaching the conclusion that the adjustment of Rs. 4,82,768/- was wrong, waiver is granted and stay against the recovery of the dues is also granted during the pendency of the appeal
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2012 (6) TMI 92
Refund claims rejected is that the services were not rendered from a registered premise - held that:- the benefit has been denied on the ground that the services were not rendered from a registered firm and nowhere it has been stated that the service was not rendered from the premises at all. - the ld. Commissioner could not have travelled beyond the show-cause notice in the revision proceedings. This aspect also will have to be considered in detail. In these circumstances, on this issue also, appellant has been able to make out a prima facie case in their favour. Input services - repair and maintenance of capital goods - held that:- services used in repair and maintenance of capital goods can be said to have direct nexus with the output service. - appellant has made out a prima facie case. When the assessee having centralized billing and accounting system, non-registration of branch office would not come in the way of availment of Cenvat credit. Since no contrary decision has been placed before me, on this ground also appellant has made out a prima facie case. Joint ownership of property - service tax on renting - Payment of service tax by the appellant after dividing the rent on its own portion - prima facie case in favor of appellant - stay granted.
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2012 (6) TMI 69
Whether the penalty imposable under the Finance Act, 1994 is automatic – Held that:- imposition of penalty under the Act is not automatic. The ingredients mentioned in the Section should exist. In respect of Sections 76, 77 and 78 of the Act, not only the ingredients of those Sections should exist, but also there should be absence of reasonable cause for the said failure. Whether Sections 76 and 78 of the Act are mutually exclusive – Held that:- Sections 76 and 78 are mutually exclusive. If penalty is payable under Section 78, Section 76 is not attracted. Therefore, no penalty can be imposed for the same failure under both the provisions. Even if the ingredients stipulated in Sections 76 and 78 of the Act are established, if "reasonable cause" is shown for the failure, whether the authorities have power to impose penalties given the explicit discretion in Section 80 of the Act – Held that:- Even if the ingredients stipulated in Sections 76 and 78 of the Act are established, if the assessee shows reasonable cause for such failure, then the authority has no power to impose penalty in view of Section 80 of the Act. Whether the revisional authority has jurisdiction to impose penalty for the first time when it has not been imposed by the adjudicating or assessing authority by invoking Section 80 – Held that:- When the assessing authority, in its discretion has held that no penalty is leviable, by virtue of Section 80 of the Act, the revisional authority cannot invoke its jurisdiction and impose penalty for the first time. Power of revisional authority - assessing/adjudicating authority was satisfied with the "reasonable cause" shown by the assessees but still penalty was imposed, not on the ground that there was no reasonable cause or that the reasons were not acceptable to him, but penalty was imposed in substance to educate the taxpayer about his moral responsibility - assessee has not challenged the said orders but has paid the same – Held that:- revisional authority had no jurisdiction to interfere with the said orders as the authority held that there was sufficient cause for non-payment of duty. Therefore, the order passed by the revisionary authority is erroneous and calls for interference. Hence, no case for interference with the impugned order is made out. Hence, these appeals are dismissed
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Central Excise
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2012 (6) TMI 101
Separate penalty imposed on goods confiscated on which duty and penalty has already been deposited under another order passed by Settlement Commission - Held that:- It is strange that confiscation and penalty in respect of the impugned goods have been covered by a separate SCN and separate order, whereas the duty on the very same goods has been demanded under another SCN which covers clandestine clearances made earlier. Nevertheless, since the Settlement Commission has imposed a consolidated penalty in respect of the past clearances as well as the impugned consignment after taking note of the fact that the appellants have admitted their duty liability, a separate penalty cannot be sustained. Accordingly, while upholding the confiscation and imposition of redemption fine, penalty separately imposed under the impugned order is set aside.
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2012 (6) TMI 100
Clandestine removal of goods - search - demand imposed on basis of documents which came to the possession of Revenue from uninformed and undisclosed sources - Held that:- Fact of recovery of the documents is very important and the silence on the part of the Revenue to disclose the source of acquisition and possession of the same is fatal to the Revenue's case especially when the same do not stands corroborated in material particular. Charges of clandestine removal are quasi criminal and requires production of positive and tangible evidences. Even the examination of the said documents have led us to conclude that they are fabricated documents and which at the most can raise doubt against the appellants but cannot fasten duty liability on the same. We note that the investigation in the present case do not lead to the logical end and do not result in the alleged clandestine activities on the part of the appellants. Apart from the loading slips which we have already held as not carrying much evidentiary value, there is virtually no evidence on record to establish clandestine activities of the appellants. In fact, Commissioner has himself observed that the demand is being confirmed on the basis of circumstantial evidence. Therefore, said duty confirmation cannot be upheld - Decided in favor of assessee.
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2012 (6) TMI 99
Condonation of delay - dismissal of appeal on ground of it being time-barred by Commissioner (Appeals) without giving opportunity of being heard to appellant - assessee contended that delay was caused due to time-limit prescribed for filing the appeal being given as three months from communication of order in the impugned order dated 17.09.2008 - assessee also contended late receipt of order on 26.09.08 - Held that:- Since Commissioner (Appeals) has not granted any opportunity of hearing to the Applicant, before dismissing the appeal, which is in violation of the principles of natural justice. The case is, therefore, remanded to the Commissioner (Appeals) to examine all the aspects and decide.
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2012 (6) TMI 98
Availment of CENVAT Credit of service Tax paid on the GTA services - Held that:- Considering the law and the provisions regarding availment of CENVAT Credit and definition of input service as mentioned in CENVAT Credit Rules, 2004, it can be concluded that the judgment in the case of CCE Bangalore Vs. ABB Limited [2011 (3) TMI 248 (HC)]is correct and the appellant or the assessee could avail the CENVAT Credit of Service Tax paid on GTA services - against revenue.
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2012 (6) TMI 97
Duty on capital goods cleared as scrap - capital goods in respect of which Cenvat Credit had been availed - respondents in course of proceedings before the Asst. Commissioner had claimed that the capital goods were not cenvat credit availed goods but the Asstt. Commissioner did not accept this plea and held that the goods were cenvat credit availed. finding is without any reference to the records. Since whether or not the capital goods, in question, were cenvat credit availed is verifiable fact, the impugned order is set aside and the matter is remanded back to the original adjudicating authority for de novo adjudication. revenue's appeal is allowed by way of remand.
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2012 (6) TMI 73
Excisability - Manufacture - dispute regarding manufacturer - demand imposed in relation to fabrication of structural and other items of steel on ground that same were manufactured by the appellant in their factory whereas assessee contended that said goods were being fabricated by the contractors, it is the contractor who has to be held as manufacturer - Held that:- Merely because the appellants were supplying the raw material, exercising supervisory quality control over the goods, and that the said fabrication was being done by the contractors as per the specifications of the appellants, it cannot be made a ground for holding that it is the appellants who had fabricated the goods when the contractors have admitted having fabricated the goods for and on behalf of the appellants. If that be so, the appellant cannot be held as a manufacturer. There is nothing in the Revenue's case to show that the said goods were manufactured by them for clearance from the factory. On the contrary, statements of contractors revealed that the goods were meant for use in the factory itself. Accordingly, applicants are entitled to the benefit of Notification No.281/86 dtd. 24.04.86 and Notification No.217/86, dtd. 02.04.86 It is well settled law that when during the relevant period, the decisions of higher appellate forum were in favour of the assessee or there were conflicting decisions, no suppression can be attributed to the assessee so as to invoke the longer period of limitation.
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2012 (6) TMI 72
Clandestine removal - whether the shortages detected by the officers on weight method, can be said to be on account of clandestine removal - Held that:- There are number of decisions laying down that shortage detected at the time of visit of officers cannot admittedly lead to the findings of clandestine removal in the absence of sufficient corroborative evidences. In view of the foregoing, impugned order is set aside and appeal of appellant is allowed with consequential relief
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2012 (6) TMI 71
Whether the welding electrodes used for repair and maintenance of the plant and machinery of the sugar mills are eligible for cenvat credit – Held that:- in the case of Hindustan Zinc Ltd. (2008 (7) TMI 55 (HC)) welding electrodes used for repair and maintenance of the plant and machinery are eligible for cenvat credit as inputs as well as capital goods. appeals are allowed.
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2012 (6) TMI 70
Whether the appellant is eligible for availment of Cenvat credit on welding electrodes which is used by them for repair and maintenance of plant and machinery – Held that:- Cenvat credit can be availed on welding electrodes which are used for maintenance of plant and machinery. in the case of Vikram Cement (2009 (7) TMI 217 (Tri)). appeal is allowed
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Indian Laws
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2012 (6) TMI 96
Territorial jurisdiction – Writ petition – held that:- that where an order is passed by an appellate authority or a revisional authority, a part of cause of action arises at that place when the original authority is situated at one place and the appellate authority is situated at another, a writ petition would be maintainable at both the places. As the order of appellate authority constitutes a part of the cause of action, a writ petition would be maintainable in the High Court within whose jurisdiction it is situate having regard to the fact that the petitioner is dominus litis to choose his forum, and that since the original order merges into the appellate order, the place where the appellate authority is located is also forum conveniens.
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2012 (6) TMI 90
Indian Stamp Act 1899 - Principle of Natural Justice - appellate order being passed by the same officer who has passed the basic order - Held that:- Allowing the appeal to be heard by the same officer who had passed the basic order would tantamount to reducing the appellate jurisdiction into that of review. Also it would violate the principles of natural justice that no man can be a judge in his own cause. Therefore, Commissioner has manifestly erred in law and acted against the settled principles of natural justice by deciding the appeal against his own order passed as an inferior authority.
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