TMI Tax Updates - e-Newsletter
August 19, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
CST, VAT & Sales Tax
TMI SMS
Highlights / Catch Notes
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GST:
Grant of Anticipatory Bail - Petitioner is the landlord of the premises where his tenant, who runs a factory, allegedly evaded the tax by clandestine sale of Pan Masala.- Section 70 of G.S.T. Act - on careful consideration of the evidence on record, it is considered appropriate to allow the petition, therefore, without commenting on merits of the case, the petition is allowed. - HC
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GST:
Levy of penalty - Profiteering - purchase of flat - It is apparent from the perusal of Section 122 (1) (i) that the violation of the provisions of Section 171 (1) is not covered under it as it does not provide penalty for not passing on the benefits of tax reduction and ITC. It only provides for imposition of penalty for not issuing an invoice or for issuing an incorrect or false invoice in respect of any supply of goods or services or both - Since, the profiteered amount is not a tax imposed under the CGST Act, 2017, No penalty - NAPA
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Income Tax:
Condonation of delay in filing an appeal before ITAT - in the facts and circumstances of the case, the explanation for the delay offered by the appellant cannot be said to smack of mala fides or that it was put forth as a part of a dilatory strategy, and therefore, the Tribunal ought to have condoned the delay of said period of 154 days in filing the I.T.A. and taken up the matter on merits. - HC
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Income Tax:
Claim of exemption u/s 11 - the project under contract with RBI for setting up of the financial museum by the assessee does not reflect discharging of any formal and systematic education rather the same is enough indicative for the commercial purposes, rejection thereon, in our considered opinion, is just and proper - AT
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Income Tax:
Exemption u/s 11 - application for registration u/s 12AA rejected - The quantum of fee/subscription only without any other corroborating finding establishing that the activities are not charitable cannot be a ground for refusal for grant of registration - AT
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Income Tax:
Claim of expenditure against interest Income - Since, we hold in principle that the expenditure is allowable either way u/s 57, if the income is treated under the head “income from other sources” as per the provisions of Section 56 or u/s 37, if the income is treated under the head “profits and gains of business or profession” as per the provisions of Section 28, at this juncture, we refrain from determining issue of the claim of preclusion or collateral estoppel under “which head” the income earned by the assessee is taxable. - AT
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Income Tax:
Denial of exemption u/s 54F - LTCG - No case law has been brought to our notice wherein two distinctly placed properties have been allowed for claim of deduction u/s 54F. Keeping in view, the geographical distances, the investment in two differently placed properties cannot be termed to be “a residential house” even after resorting to liberal interpretation of “a residential unit”. - AT
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Income Tax:
Power of CIT-A - Procedure in Appeal u/s 250 - Valuation of property - whether the assessee can take an additional ground at appellate stage even when the same has not been raised before the lower authorities? - Held Yes - AT
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Customs:
Amendment in shipping bills - MEIS benefits - since the Revenue does not have any case that the conditions stipulated in Section 149 are not existing, there can be no denial of the permission to amend the shipping bills. - HC
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Customs:
Principles of Natural Justice - Extension of period of issuance of SCN after seizure of goods - the right of the petitioners has not been prejudiced or taken away in granting extension of six months for completion of proceedings under Section 124 of the 1962 Act - HC
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IBC:
Invocation of performance guarantee - CIRP proceedings - the Adjudicating Authority passed the Order that “the performance guarantee given by the bankers on behalf of the Corporate Debtor, whereby simply to set off the money in the event of an order was passed in favour of the Corporate Debtor, cannot be interfered with the performance guarantee with regard to another contract” - the Adjudicating Authority has rightly refused to grant an interim relief about the invocation of bank guarantee given by bankers on behalf of the Corporate Debtor. - AT
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IBC:
Resolution of Corporate Insolvency approved by the Committee of Creditors - Claim of Customs Duty and other dues after de-bonding / de-notification of SEZ unit - it is abundantly clear that the estimated amount of ₹ 45 Crores has been set apart in the approved Resolution Plan to take care of the duties chargeable and penalties imposable by the Development Commissioner while according approval to opting out of Corporate Debtor from SEZ. - Additional demand towards interest and penalty not sustainable - AT
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IBC:
Claim of Tax Dues after the Approval of Resolution Plan - CIRP process - Operational Debt or not - no claim was filed by the Appellants before the Resolution Professional, despite the knowledge of the CIRP - the Operational Creditors has no rights against the acquiring Company relating to the period, before the Effective Date. The Acquiring Company shall not have any liability towards Operational Creditors for the amounts owed prior to the Effective Date. - AT
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IBC:
Maintainability of application - initiation of CIRP - Period of limitation - when part payment is made before the expiration of the prescribed period of limitation by the person liable to pay the debt, a fresh period of limitation shall be computed from the time when the payment was made - In the instant case, the Operational Creditor claims that it has received last payment in lieu of debt from the Corporate Debtor on 30th May 2015. Alleged liability is on account of invoice dated 13th December 2011. Therefore, the limitation period cannot be extended, given the statutory provision under Section 19 of the Limitation Act as the Corporate Debtor has made part payment after expiration of the period of limitation. - AT
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IBC:
Jurisdiction of Adjudicating Authority - withdrawal of approved Resolution Plan - after due deliberations, when the 1st Respondent/’Resolution Applicant’ had accepted the conditions of the ‘Resolution Plan’ especially keeping in mind the ingredients of Section 25(2)(h) of the ‘Code’ to the effect that ‘no change or supplementary information to the ‘Resolution Plan’ shall be accepted after the submission date of ‘Resolution Plan’ then it is not open to the 1st Respondent/’Resolution Applicant’ to take a ‘topsy turvy’ stance and is not to be allowed to withdraw the approved ‘Resolution Plan’. - AT
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IBC:
Maintainability of application - initiation of CIRP - Period of limitation - the legislative policy now is to move away from the concept of “inability to pay debts” to “determination of default” - default referred to in the Code is that of actual non-payment by the corporate debtor when a debt has become due and payable - if default had occurred over three years prior to the date of filing of the application, the application would be time-barred save and except in those cases where, on facts, the delay in filing may be condoned - Appellate Tribunal had been in error in applying the period of limitation provided for mortgage liability for the purpose of limitation applicable to the application in question. - SC
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Service Tax:
Rejection of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Quantification of demand before the cut of date - a liberal interpretation has to be given to the SVLDRS, 2019 and the circulars issued by Central Board of Indirect Taxes and Customs as their intent is to unload the baggage relating to legacy disputes under the Central Excise and Service Tax and to allow the businesses to make a fresh beginning. - HC
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VAT:
Principles of Natural Justice - once there is a finding on identical transactions given by the Appellate Authority in respect of two Assessment Years in the case of an Assessee, unless that is set aside or the order is suspended by a competent court or authority, Respondent Adjudicating Authority was bound to follow the orders of the Appellate Authority for subsequent years - HC
Articles
Notifications
Customs-
77/2020 - dated
17-8-2020
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Cus (NT)
Special Warehouse (Custody and Handling of Goods) Amendment Regulations, 2020.
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76/2020 - dated
17-8-2020
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Cus (NT)
Manufacture and Other Operations in Warehouse (no. 2) Amendment Regulations, 2020.
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75/2020 - dated
17-8-2020
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Cus (NT)
Manufacture and Other Operations in Special Warehouse Regulations, 2020
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36/2020-Customs (N.T./CAA/DRI) - dated
11-8-2020
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Cus (NT)
Appointment of CAA by DGRI
GST - States-
ERTS(T)2/2020/267 - dated
24-6-2020
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Meghalaya SGST
Seeks to extend due date for furnishing FORM GSTR-3B for supply made in the month of August, 2020 for taxpayers with annual turnover up to ₹ 5 crore.
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ERTS(T)2/2020/266 - dated
24-6-2020
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Meghalaya SGST
Seeks to provide relief by waiver of late fee for delay in furnishing outward statement in FORM GSTR-1 for tax periods for months from March, 2020 to June, 2020 for monthly filers and for quarters from January, 2020 to June, 2020 for quarterly filers
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ERTS(T)2/2020/265 - dated
24-6-2020
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Meghalaya SGST
Seeks to provide one time amnesty by lowering/waiving of late fees for non furnishing of FORM GSTR-3B from July, 2017 to January, 2020 and also seeks to provide relief by conditional waiver of late fee for delay in furnishing returns in FORM GSTR-3B for tax periods of February, 2020 to July, 2020.
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841/XI-2-20-9(47)/17- U.P. Act-1-Order-(136)-2020 - dated
7-8-2020
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Uttar Pradesh SGST
Amendment in Notification No. 445/XI-9(47)/17-U.P.Act-1-2017-Order-(118)-2020 Dated 11-05-2020
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840/XI-2-20-9(47)/17- U.P. Act-1-Order-(135)-2020 - dated
7-8-2020
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Uttar Pradesh SGST
Amendment in Notification No. KA.NI.-2-983/XI-9(47)/17-U.P. Act-1-2017-Order-(42)-2019 dated 02.07.2019
Income Tax-
67/2020 - dated
17-8-2020
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IT
Income-tax (20th Amendment) Rules, 2020.
SEZ-
S.O. 2773 (E) - dated
6-8-2020
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SEZ
Central Government de-notifies an area of 17.894 hectare, (thereby making the resultant area as 386.806 hectare) at Duppituru, Moturupalem, Maruturu and Gurujaplem Villages, Visakhapatnam District in the State of Andhra Pradesh
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (8) TMI 372
Refund/release of IGST and amount of duty drawbacks due - HELD THAT:- The concerned respondent authorities are directed to decide the question of release or otherwise of IGST along with interest as well as the release or otherwise of duty drawback due to the petitioner in accordance with law, rules, regulations and Government policies applicable to the facts of the case, as early as possible and preferably within a period of three weeks from today. Petition disposed off.
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2020 (8) TMI 371
Refund/release of IGST and amount of duty drawbacks due - HELD THAT:- The concerned respondent authorities are directed to decide the question of release or otherwise of IGST along with interest as well as the release or otherwise of duty drawback due to the petitioner in accordance with law, rules, regulations and Government policies applicable to the facts of the case, as early as possible and preferably within a period of three weeks from today. Petition disposed off.
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2020 (8) TMI 370
Grant of Anticipatory Bail - Petitioner is the landlord of the premises where his tenant, who runs a factory, allegedly evaded the tax by clandestine sale of Pan Masala.- Section 70 of G.S.T. Act - validity of initiation of counter proceedings - applicability/nonapplicability of the provisions of Section 438 Cr.P.C. - HELD THAT:- A significant amount of time has been spent by both the parties to convince the Court or to counter that the procedure prescribed in Chapter XII of the CR.P.C. has not been complied with or followed in the present case, therefore, the very initiation of the proceeding is void and contrary to the law - It is not disputed that the petitioner is one of the Director of media company Dabang Dunia but it is contended that they are neither concerned nor responsible for the unauthorized use of any sticker or ID card by any vehicle or driver implicated in the clandestine transportation of any taxable goods. Elaborate discussion of all the evidences, which is otherwise confidential, would not be appropriate as it may affect the case of either party. But on careful consideration of the evidence on record, it is considered appropriate to allow the petition, therefore, without commenting on merits of the case, the petition is allowed. The bail application is allowed and it is directed that in the event of the petitioner's arrest or surrender before the police within a month of this order, the petitioner shall be released on bail on his furnishing a personal bond of ₹ 10,00,000/- with one solvent surety of the like amount to the satisfaction of Station House Officer of the Police Station concerned.
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2020 (8) TMI 369
Profiteering - purchase of flat - allegation that the benefit of reduction in the rate of tax not passed on by way of commensurate reduction of price - contravention of provisions of Section 171 (1) of the CGST Act, 2017 - penalty - HELD THAT:- It has been revealed that the Respondent has not passed on the benefit of additional ITC to the buyers of his flats/plots w.e.f. 01.07.2017 to 31.08.2018 which he was required to pass on every month as he was availing the benefit of ITC every month to discharge his GST liability. It is also revealed that he has passed on the above benefit in the month of February, 2019 as is evident from the details furnished by him vide his submissions dated 11.02.2019, after this Authority had initiated proceedings against the Respondent vide its notice dated 07.12.2018. Therefore, there is no doubt that the Respondent has violated the provisions of Section 171 (1) of the CGST Act, 2017. Penalty - HELD THAT:- It is also revealed from the perusal of the CGST Act and the Rules framed under it that no penalty had been prescribed for violation of the provisions of Section 171 (1) of the Act, therefore, the Respondent was issued show cause notice to state why penalty should not be imposed on him for violation of the above provisions as per Section 122 (1) (i) of the above Act as he had apparently issued incorrect or false invoice while charging excess consideration and GST from the buyers - It is apparent from the perusal of Section 122 (1) (i) that the violation of the provisions of Section 171 (1) is not covered under it as it does not provide penalty for not passing on the benefits of tax reduction and ITC. It only provides for imposition of penalty for not issuing an invoice or for issuing an incorrect or false invoice in respect of any supply of goods or services or both Since, the profiteered amount is not a tax imposed under the CGST Act, 2017, the above penalty cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act. Since, no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 31.08.2018 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) can not be imposed on the Respondent retrospectively. Accordingly, the notice dated 27.05.2019 issued to the Respondent for imposition of penalty under Section 122 (1) (i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped.
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Income Tax
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2020 (8) TMI 368
Condonation of delay in filing an appeal before ITAT - delay of 154 days in filing the I.T.A. - Unexplained investment on Gold and silver jewellery found during the course of search and seizure proceedings - HELD THAT:- The Supreme Court in N.Balakrishnan Vs. M. Krishnamurthy [ 1998 (9) TMI 602 - SUPREME COURT] has held that the primary function of a Court is to adjudicate the dispute between the parties and to advance substantial justice; and that rules of limitation are not meant to destroy the right of parties, but they are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. It held that there is no presumption that delay in approaching the Court is always deliberate, and the words sufficient cause under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice. Every case of delay there can be some lapse on the part of the litigant concerned, but that alone is not enough to turn down his plea and to shut the door against him; and if the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the Court must show utmost consideration to the suitor. It also observed that if the delay is deliberate, then the Court should not accept the explanation. It held that while condoning the delay, the Court should compensate the opposite party with costs. Applying the principles laid down in the above case to the instant case, we are of the opinion that, in the facts and circumstances of the case, the explanation for the delay offered by the appellant cannot be said to smack of mala fides or that it was put forth as a part of a dilatory strategy, and therefore, the Tribunal ought to have condoned the delay of said period of 154 days in filing the I.T.A. and taken up the matter on merits.
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2020 (8) TMI 367
Exemption u/s 10A - STP I unit and non-STP unit are using the same infrastructure, employees, etc - STPI unit was not a new unit and it was formed by splitting up and reconstruction of the already existing business and the products, customers and employees were common to the pre existing unit - total turnover computation for the purpose of Section 10A - HELD THAT:- Both the issues decided in favour of assessee as relying on M/S. SERVION GLOBAL SOLUTIONS LTD. [ 2019 (6) TMI 1514 - MADRAS HIGH COURT]
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2020 (8) TMI 366
Interest expenditure allowance - whether CIT(A) was justified in holding that interest expenditure should be allowed even in the back ground that assessee had not offered any income from the project? - whether CIT(A) was justified in holding that interest expenditure should be allowed by allowing a fresh plea not raised before AO, thereby, violating Rule 46A? - HELD THAT:- As per the details available out of total interest cost of ₹ 16,39,35,373/-, an amount of ₹ 490,80,176/- was incurred on account of ancillary borrowing cost being amount paid to Karvy as brokerage for arranging the NCDs and expenses like processing charges, Registration and Stamp Duty Charges and other charges and as per the judgment of Hon ble apex court rendered in the case of India Cement Limited [ 1965 (12) TMI 22 - SUPREME COURT ] it was held that such expenses are revenue expenses incurred for business purposes and allowable irrespective of the purpose of borrowings and on this aspect, we hold that such expenses are allowable by respectfully following this judgment of Hon ble Apex Court. The remaining amount of interest expenditure on ICDs and NCDs etc., we find that such expenditure is interest on borrowing for acquiring or carrying the inventory and therefore tribunal order rendered in the case of DLF Ltd . 2019 (6) TMI 1288 - ITAT DELHI is relevant. Tribunal considered in that case the provisions of section 36 (1) (iii) and its proviso and held that this proviso is the only restriction if conditions of section 36 (1) (iii) are satisfied and the proviso is applicable only when the borrowing is made in respect of acquisition of a capital asset for the period up to user of the asset and inventory is not a capital asset and therefore, interest on borrowing used for inventory is allowable u/s 36 (1) (iii). Before us, the learned DR of the revenue has argued that the judgments followed by CIT (A) are not applicable but in reply to the argument of the learned AR of the assessee as per which, he placed reliance on this tribunal order rendered in the case of DLF Limited vs. ACIT (Supra), she could not point out any judgment of any Hon ble High Court or Hon ble apex court where a contrary view is taken. Hence, we respectfully follow this tribunal order and decline to interfere in the order of CIT (A) on this issue in both years because facts are admittedly similar in both years. Disallowance u/s 14A - this is the argument of assessee that there is no exempt income in these two years and this is the decision of the learned CIT (A) that in the absence of exempt income, section 14A is not triggered - HELD THAT:- We find that the P L Account for the year ended as on 31.03.2013 is available on page 39 of the paper book and as per the same, other income is ₹ 55,31,681/- and as per Note No. 18 on page 50 of the paper book, this income is on account of interest on fixed deposit and therefore, it is seen that there is no exempt income. There is no dispute that facts are not different in A. Y. 2014 15. As per the judgment of Hon ble Delhi High Court rendered in the case of Chemiinvest Limited 2015 (9) TMI 238 - DELHI HIGH COURT section 14A cannot be invoked in the facts of the present case. Hence, respectfully following this judgment, we decline to interfere in the order of CIT (A) on this issue also in both years. Revenue appeal dismissed.
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2020 (8) TMI 365
Addition u/s 56(2)(viib) relating to share premium - AO rejected DCF method of valuation - Valuation of shares - HELD THAT:- At the time of valuing the shares as on 16.04.2012, the actual results of the later years would not be available. What is required for arriving at the fair market value by following the DCF method are the expected and projected revenues. Accordingly the valuation is on the basis of estimates of future income contemplated at the point of time when the valuation was made. As been clarified by the Assessee that the product which was being developed by the Assessee has substantial value and the Assessee was able to raise funds to the tune of ₹ 50.13 crores from international market We are of view that the issue with regard to valuation has to be decided afresh by the AO on the lines indicated in the decision of ITAT, Bangalore in the case of VBHC Value Homes Pvt.Ltd., Vs ITO [ 2020 (6) TMI 318 - ITAT BANGALORE ] (i) the AO can scrutinize the valuation report and he can determine a fresh valuation either by himself or by calling a determination from an independent valuer to confront the assessee but the basis has to be DCF method and he cannot change the method of valuation which has been opted by the assessee. (ii) For scrutinizing the valuation report, the facts and data available on the date of valuation only has to be considered and actual result of future cannot be a basis to decide about reliability of the projections. The primary onus to prove the correctness of the valuation Report is on the assessee as he has special knowledge and he is privy to the facts of the company and only he has opted for this method. Hence, he has to satisfy about the correctness of the projections, Discounting factor and Terminal value etc. with the help of Empirical data or industry norm if any and/or Scientific Data, Scientific Method, Scientific study and applicable Guidelines regarding DCF Method of Valuation. The order of ld.CIT(A) is accordingly set aside for deciding the issue afresh after due opportunity of hearing to the Assessee. Appeal is allowed for statistical purpose.
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2020 (8) TMI 364
Rectification of mistake u/s 254 - disallowance of depreciation on finance lease - Tribunal held that it was not the lease agreement but a hire purchase agreement camouflaged as lease agreement and in the absence of lease agreement - HELD THAT:- We have no option but to hold that there is no infirmity in the Assessment Order on this issue. Hence, it is seen that the basis of the decision of the Tribunal is this that the assessee has not made available the copy of the lease agreement before the Tribunal and because of this reason, the Tribunal has held in the impugned Tribunal order that there is no infirmity in the Assessment Order on this issue i.e. the issue regarding disallowance of depreciation on finance lease. In the MPs filed by the assessee, this is not the contention raised by the assessee that there is any mistake in this finding of the Tribunal that no lease agreement was made available before the Tribunal. Since, this is the basis of the Tribunal s decision that in the absence of lease agreement, the Tribunal has no option but to hold that there is no infirmity in the Assessment Order on the issue of disallowance of depreciation, we are of the considered opinion that various contentions raised by the assessee in these MPs and in the written submissions filed by learned AR of the assessee in both written submissions has no relevance for the purpose of deciding these MPs. Hence, we hold that there is no merit in these MPs.
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2020 (8) TMI 363
Stay petition - apparent mistake in the tribunal order or not ? - HELD THAT:- No apparent mistake could be pointed out in the impugned tribunal order because only this is stated that the tribunal has dismissed the appeal of the assessee based on hearing and not on the basis of documentary evidences and in the additional grounds raised in the M. P. signed on 08.07.2020 it is stated that the documentary evidences were available in the paper book but the said paper book was not filed before the tribunal. This is admitted position that the paper book was not filed before the hearing or at the time of hearing of the appeal and the tribunal has decided the appeal based on hearing as stated by the assessee in the M. P. signed on 12.06.2020 and filed on 15.06.2020 and in the M. P. signed on 08.07.2020, the assessee says that the documentary evidences were available in the paper book but the said paper book was not filed before the tribunal because the assessee could not get time to file it because only 15 days were available after the hearing of stay petition in which early hearing was granted and the assessee has also not got opportunity to furnish the documentary evidences. It is seen that this is not the case of the assessee that documentary evidence was made available before the tribunal and reference to such evidence was made in course of hearing of the appeal and in spite of that, the tribunal has not considered such evidence. We, therefore, find no merit in this M.P.
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2020 (8) TMI 362
Claim of exemption u/s 11 - whether the activities of the assessee in the year under consideration is coming under the purview of its claim u/s 11 or it is within the periphery of the last limb of the First proviso of Section 2(15) of the Act under the definition of charitable purpose i.e. Advancement of any other object of general public utility? - HELD THAT:- No manner of application to the instant case before us when we find that the activities of the assessee before us is indicative enough of profit oriented intent moreso when the activities /project by the assessee is done at the behest of the RBI for general public utility. The clauses of the memorandum of Association clearly clarify the actual status of the appellant read with the letter dated 08.06.2012 issued by RBI - It is the settled principle of law that the claim under Section 11 is to be extended to a registered organization u/s 12A provided the activities of such organization should be in consonance with the objects of the section. In the case in hand though the assessee is a registered concern u/s 12A as a charitable institution, the actual work done by the assessee in the year under consideration is not charitable in nature particularly when no formal and systematic educational function is discharges by it rather commercial in view of the receipt on turnkey project basis, from RBI in lieu of the service rendered by the assessee which involves the activities carrying on in the nature of trade, commerce or business for consideration coming under the periphery of First Proviso to Section 2(15) of the Act which has already been clarified by the First Appellate Authority. No infirmity in the order impugned passed by the First Appellate Authority observing the project under contract with RBI for setting up of the financial museum by the assessee does not reflect discharging of any formal and systematic education rather the same is enough indicative for the commercial purposes, rejection thereon, in our considered opinion, is just and proper so as to warrant any interference. The assessee has no legs to stand upon in order to claim the relief u/s 11 of the Act and hence in the absence of any merit we dismiss the appeal preferred by the assessee. Appeals of the assessee are dismissed.
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2020 (8) TMI 361
Eligibility for deduction u/s.80P(2) - from the order of the CIT(A) it is clear that the assessee is eligible for deduction u/s.80P(2) and not engaged in banking business - HELD THAT:- Co-operative society which is a member of a federated co-operative society - In section 80P(2) when Parliament has used the word 'members', it has used it in the normal sense of a member of a co-operative society. The intention was to extend the exemption to co-operative societies directly extending credit facilities to their members. There is nothing in the said provision to show that the intention was to grant exemption to co-operative societies which were extending credit facilities to persons, who, though not members of the said society, were members of another co-operative society which is a member of the co- operative society seeking exemption. The meaning of the expression 'member' cannot therefore be extended to include the members of a primary co-operative society which is a member of the federated co-operative society seeking exemption. The principle of lifting the corporate veil cannot have any application in the context of the provisions contained in section 80P(2)(a)(z) of the Act - U.P. Co-operative Cane Union Federation Ltd v. CIT [ 1997 (1) TMI 7 - SUPREME COURT] . Assessee is eligible for deduction u/s.80P(2)(a)(i). AO has disallowed two additions i.e. provision for bad doubtful debts and provision for gratuity - These two additions are resulting to enhancement of profit of the assessee society which are specific disallowances related to the business of the assessee. Circular issued on 02.11.2016, whereas the case of the assessee is pertaining to A.Y.2009-2010 2010-2011. The Circular is clarificatory in nature. Therefore, it would be presumed that the benefit of Circular will apply to the assessee. It is also clear that the additions made by the AO is covered by this Circular. The above mentioned additions are eligible for deduction under Chapter-VIA and under section 80P of the Act. In support of our above view, we also rely on the decision of the coordinate bench of the Tribunal in the case of Ozone Pharmaceutical [ 2019 (4) TMI 1302 - ITAT DELHI] wherein the assessee has got deduction under Chapter VIA if the profit from business has been increased by the AO by making certain disallowance. Accordingly, we allow the appeal of the assessee.
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2020 (8) TMI 360
Deduction u/s 54F - Disallowance of claim as assessee has not filed any detail in support of the claim - CIT(A) has confirmed the disallowance only on one ground being more than one residential houses were owned by the assessee as on the date of sale - HELD THAT:- Since CIT(A) has not discussed the other grounds which the AO has recorded in the assessment order along with this one which is considered by the ld. CIT(A) and further the assessee has now produced the additional evidence in support of the claim that he has not acquired the flat in question as such there is no violation of condition prescribed U/s 54F of the Act therefore, in the facts and circumstances of the case we set aside the matter to the record of the ld. CIT(A) to considered the additional evidence filed by the assessee and thereafter give a finding on all the issues and grounds which were raised by the AO while denying the deduction U/s 54F of the Act. Needless to say the assessee was granted one more opportunity of hearing before passing fresh order. Appeal of the assessee is allowed for statistical purposes.
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2020 (8) TMI 359
Exemption u/s 11 - application for registration u/s 12AA rejected - reason specified by the Ld. CIT (E) for rejecting the assessee s application for registration u/s 12AA of the Act is that since no activities had been undertaken by the society, it was not possible to register it presumably because it was not possible to form satisfaction about whether the activities of the society were genuine - HELD THAT:- This issue has been settled in the case of Ananda Social Educational Trust vs. CIT [ 2020 (2) TMI 1293 - SUPREME COURT ] as held that Commissioner would be bound to record the finding that an activity or activities actually carried on by the Trust are not genuine being not in accordance with the objects of the Trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust. Undisputedly, in the present case, the Ld. CIT (E) has not recorded a finding that the activities of the Society were not genuine or were not in accordance with the objects of the Society. As per CIT (E) that no activities had been carried out by the assessee society. Therefore, it is our considered opinion that the Ld. CIT (E) has unnecessarily enlarged the scope of the mandate to be exercised by him at the time of grant of registration u/s 12AA. He has gone into an all together different consideration for grant of registration whereas he was only to consider whether the objects and the activities were genuine were not. Thus, the observation of the Ld. CIT (E) that since no activities were carried out, the registration cannot be granted, does not hold good. CIT (E) went on to make an irrelevant observation that the subscription fee of ₹ 3 ₹ 5 to be charged from various categories of members was high and, therefore, the activity of the society could not be considered charitable. We find ourselves unable to be in agreement with the Ld. CIT (E) as this being a valid reason for refusal to grant of registration u/s 12AA. The quantum of fee/subscription only without any other corroborating finding establishing that the activities are not charitable cannot be a ground for refusal for grant of registration and we hold that registration could not have been denied on this ground also. CIT (E) has given altogether invalid reasons for refusing the grant of registration u/s 12AA of the Act. He has also chosen not to comment adversely on the nature of the objects which strengthens the cause of the assessee society. We set aside the order of the Ld. CIT (E) by holding that the Ld. CIT (E) has dismissed the application for registration without any justifiable reason and by considering completely irrelevant factors. CIT (E) has also not recorded any adverse finding that the objects of the society were not charitable or were non-genuine. CIT (E) is directed to grant of registration u/s 12AA of the Act to the assessee Society. - Decided in favour of assessee.
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2020 (8) TMI 358
Deduction u/s 54F - assessee allegedly did not fulfil the conditions of Section 54F - AO denied the exemption of long term capital gains on the reason that assessee on the date of transfer of original asset had more than one residential house although, both the assets were jointly owned by assessee with his wife - Assessee further contended alternatively that even if it is assumed that assessee continued to be owner of the property at Malibu Town, Gurgaon, assessee was joint owner of the property with 50% share and as such, cannot be considered as own residential house in terms of proviso to Section 54F - HELD THAT:- If the ownership was recorded for maintenance purpose in the name of assessee, it is not relevant for satisfying the conditions of Section 2(47)(vi) - whatever objections have been raised by the authorities below, were no relevant to discard the explanation of assessee which is supported by the documentary evidences on record, genuineness of which, have not been doubted by the authorities below. The claim of assessee is also supported by the fact that assessee paid the capital gains tax on sale consideration of impugned property which have been accepted by the A.O. Similarly, the part of the share of wife of the assessee was also transferred and according to Learned Counsel for the Assessee in the case of wife of assessee the return have been accepted on identical facts under section 143(1) of the I.T. Act, 1961 and no reassessment proceedings have been initiated till date. The A.O, therefore, bound to follow the rule of consistency in the matter as well. In view of the above facts it is clear that assessee transferred the capital asset to his son with all rights, title, interest and enjoyment in the impugned immovable property through Agreement to Sell and Registered Transfer Deed, subject to consideration, therefore, assessee would not be having more than one residential house at the time of claiming exemption from capital gains and as such, A.O. was not justified in rejecting the claim of exemption under section 54F of the I.T. Act. For alternate contention assessee was having only 50% share in the impugned residential property which was sold to the son of the assessee. Therefore, A.O. cannot deny exemption under section 54F of the I.T. Act, 1961, to the assessee. The alternate contention of Learned Counsel for the Assessee is allowed. Assessee has genuinely transferred the impugned property in Malibu Town, Sohna Road, Gurgaon, to his son and satisfied the conditions of Section 54F of the I.T. Act. Thus, assessee would be entitled for exemption/deduction under section 54F of the I.T. Act. In view of the above, we set aside the Orders of the authorities below and delete the addition and direct the A.O. to allow exemption under section 54F of the I.T. Act to the assessee. In view of the above the other contentions of assessee regarding use of the impugned property for commercial purpose and consequential grounds are left with academic discussion only. We do not propose to decide the same. Ground No.1 of the appeal of the Assessee is allowed.
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2020 (8) TMI 357
Validity of reopening of assessment u/s 147 - second notice issued u/s 148 - HELD THAT:- In the present case, reassessment proceedings initiated in pursuance to notice issued under section 148 of the Act on 02/07/2008 were still alive. The Assessing Officer issued second notice under section 148 of the Act on 29/03/2011. The second notice was evidently not in consonance with the law set out by the Hon ble High Courts. Thus, the second notice issued u/s 148 of the Act on 29/3/2011 is bad in law and the subsequent proceedings arising therefrom are vitiated. Second reassessment proceedings were initiated after the expiry of four years from the end of the relevant assessment year. The second notice u/s 148 of the Act was issued on 29/3/2011. Assessee has undisputedly filed return of income u/s 139 of the Act and has also responded to notice issued under section 148, therefore, the first two conditions does not get attracted in the present case. As regards condition no. (3), the reasons recorded for reopening does not indicate that income chargeable to tax has escaped assessment in the impugned assessment year by reason of failure on the part of assessee to disclose fully and truly all the material facts, necessary for the assessment. In the present case, reading of the reasons for reopening does not suggest that the reopening of assessment beyond four years is a result of failure on the part of assessee to disclose fully and truly all material facts necessary for the assessment. The present case does not fall within any of the conditions set out in proviso to section 147 of the Act for initiating reassessment proceedings. Ergo, the reassessment is liable to be quashed on this ground as well. Approval for issue of second notice under section 148 - Authorized Representative of the assessee has drawn our attention to the communication dated 18/03/2011 as addressed by the Assessing Officer to the CIT. The Assessing Officer has clearly brought the fact to the notice of CIT that the reassessment proceedings are time barred on 31/03/2009 itself and hence, reassessment order under section 143(3) r.w.s. 147 was not passed within time barring limit, the case cannot be opened again. CIT has granted permission to the AO for initiating reassessment proceedings without properly examining reasons for reopening. The reassessment proceedings were initiated beyond period of four years and nowhere in the reasons it has been brought out that the assessee has failed to disclose fully and truly all material facts necessary for the assessment. CIT has not recorded his satisfaction on the reasons recorded by the Assessing Officer for reopening. Further, the Assessing Officer had brought the fact to the notice of CIT that earlier notice was issued under section 148 of the Act on 02/07/2008, however, no assessment order under section 143(3) r.w.s. 147 of the Act was passed within time barring limit, hence, the case cannot be reopened again. CIT without commenting on the observations made by the AO approved permission for reopening the assessment. Evidently, the permission was granted in a mechanical manner without application of mind. Thus, in the facts of the case and in the light of law laid down by the Hon ble Jurisdictional High Court, notice dated 29/3/2011 u/s 148 of the Act is held invalid, reassessment proceedings arising there from are vitiated and hence, liable to be quashed. - Decided in favour of assessee.
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2020 (8) TMI 356
Disallowance of deduction claimed under the head income from other sources - Whether the assessee is eligible to claim the expenditure incurred in earning of the interest income as per the provisions of Section 57? - Whether the assessee is eligible to claim deduction u/s 37 in case such interest income is to be treated under the head income from the profits and gains of business or profession ? - HELD THAT:- For the amount received on interest, the assessee would not be in a position to lend the amount on interest to earn interest income. Hence, netting of the interest income on the interest expenditure is a prerequisite for correct determination of taxable income. Keeping in view, decision of the CIT (A) that there is no nexus between the interest earned and the interest paid cannot be upheld. As a result, the assessee is allowed to claim the interest expenses. Regarding the alternate decision of the ld. CIT (A) that the interest income constitutes the business income, even in those circumstances, the interest paid to earn such interest income is to be allowed as deduction u/s 37 of the Act. Since, we hold in principle that the expenditure is allowable either way u/s 57, if the income is treated under the head income from other sources as per the provisions of Section 56 or u/s 37, if the income is treated under the head profits and gains of business or profession as per the provisions of Section 28, at this juncture, we refrain from determining issue of the claim of preclusion or collateral estoppel under which head the income earned by the assessee is taxable. - Appeal of the assessee is allowed.
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2020 (8) TMI 355
Denial of exemption u/s 54F - investment of capital gains in the Ansal property and invested in the capital gains bonds - HELD THAT:- In the instant case, the issue is different from what has been examined in the case laws cited by the ld. Counsel of the assessee. In all the situations, the Courts upheld the deduction in the situations where the multiple units were either adjacent or on the same floor or on the different floors or multiple units in the same residential complex owing to division of property. Whereas in the instant case, there was no such division of property among the members and the investments are at different locations one being the investment in residential property at Jungpura of ₹ 24,20,000/- and the other being at Ansal properties in NCR. No case law has been brought to our notice wherein two distinctly placed properties have been allowed for claim of deduction u/s 54F. Keeping in view, the geographical distances, the investment in two differently placed properties cannot be termed to be a residential house even after resorting to liberal interpretation of a residential unit . All the case laws relied by the counsel are found to be factually different from the instant case. Keeping in view, the provisions of Section 54F, the amendments, the ratio of judgments wherein two residential units are considered as a residential house and keeping view the facts of the instant case wherein the assessee has invested in two distinctly identifiable properties at separate locations, we hereby hold that the assessee is eligible to claim deduction on the investment of capital gains in the Ansal property invested in the capital gains bonds. The investment in the residential property at Jungpura is liable to be taxed under the head capital gains . Business Loss - The assessee was in the trading business of car seat covers. During the year, the loss computed at ₹ 3,13,826/- has been set off against the other income. AO observed that as against receipt of ₹ 10,522/-, the assessee has claimed expenses on account of depreciation on car, salary of employee, petrol and other expenses. The AO disallowed 50% of the salary expenses of the employees. We hold that the salary paid by the assessee to the employees cannot be disallowed without bringing anything on record to prove that such payments were bogus in nature. Hence, the disallowance made by the AO is hereby directed to be deleted.
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2020 (8) TMI 354
Reopening of assessment u/s 147 - Information received from Sales Tax Department - Estimation of income - bogus purchases - CIT- A sustained the addition made by the AO towards alleged bogus purchases to 12.50% gross profit on total purchases from those parties - HELD THAT:- For Reopening of assessment AO has formed reasonable belief of escapement of income on the basis of report of Investigation Wing, which is further supported by the report of Sales Tax Department, Govt. of Maharashtra. Further, in our considered view, information relied upon by the ld. AO constitutes a fresh tangible material which is sufficient to reopen the assessment. We, therefore, are of the opinion that there is no merit in grounds taken by the assessee challenging reopening of assessment and hence, we reject grounds raised by the assessee, challenging of reopening assessment. Bogus purchases - ITAT, Mumbai, in number of cases had considered an identical issue and depending upon facts of each case, directed the Ld. AO to estimate gross profit of 10% to 15% on total alleged bogus purchases. In this case, considering the nature of business of the assessee the Ld. AO has made 12.50% additions, which has been affirmed by the ld. CIT(A) on total alleged bogus purchase. Both authorities have taken uniform rate of profit for estimation of income from alleged bogus purchase, but no one could support said rate of gross profit with necessary evidences or any comparable cases. Rate of profit adopted by the AO is appears to be on higher side when compared to nature of business of the assessee. Therefore rate profit adopted @ 12.50% on alleged bogus purchases is on higher side going by the nature of business of the assessee and hence, we order the Assessing Officer to restrict the addition at the rate of 5% on alleged bogus purchases. Appeal of the assessee is partly allowed.
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2020 (8) TMI 353
TP Adjustment - addition on account of Arm's Length Price - comparable selection - application of TNMM or RPM or CUP - HELD THAT:- We find the ld. CIT(A) has simply mentioned that he agrees with the submissions made by the appellant wherein it has highlighted various business and commercial reasons for non-applicability of TNMM method. He has not given any categorical finding that TNMM is not the most appropriate method under the facts and circumstances of the case. Assessee has not given full data for applicability of CUP as the most appropriate method. Assessee has not given full data for additives for application of CUP as the most appropriate method. So far as base oil is concerned, the assessee has given data for ₹ 21 crore whereas the total input is of ₹ 44.44 crores and, therefore, in absence of full details, CUP analysis could not have been done for the base oil. So far as trading segment is concerned, we find the assesseee for the first time has gone before the CIT(A) for segmental RPM for the trading segment. This was not there in the original study. Here is absolutely no complete analysis of the data. Various comparables selected by the TPO has not at all been considered by the CIT(A). Further, we are of the opinion that if RPM is approved, then, the TPO should be given opportunity for analysis of cost base of comparables, segmental details and benchmarking process. So far as service fee is concerned, the assessee has to first prove that the foreign AE is the least complex party and relevant data should be available in public domain or the assessee should give full details.Nothing is coming out of record regarding the submission of the details. Initial years of transfer pricing proceedings, we deem it proper to restore the issue to the file of the AO/TPO for deciding the issue afresh and in accordance with the law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. Ground of appeal No. 1 by the Revenue is accordingly allowed for statistical purposes. Expenditure on foreign travel - Allowable business expenditure - AO disallowed being 20% of such expenditure on the ground that the assessee did not establish that the amount in question was an expenditure laid out wholly and exclusively for the purpose of business - CIT(A) deleted the addition on the ground that the employee of the assessee provided an undertaking that foreign travel expenditure is towards the business purpose only and the same had also been approved by the senior to whom the relevant employee reports to - HELD THAT:- As decided in own case [ 2009 (4) TMI 1032 - ITAT DELHI] some of the emails were not furnished by the assessee but in view of the details furnished by the assessee, it cannot be said that the expenditure is not incurred or not allowable at all. On the facts and circumstances of the case, in our opinion, the Assessing Officer was justified in disallowing partial amount - Decided against assessee. TDS u/s 195 - Addition u/s 40(a)(i) - expenditure incurred in foreign currency for which no TDS has been deducted - CIT(A) deleted the addition on the ground that substantial amount of expenditure pertained to the year prior to the financial year 2003-04 and, therefore, the AO is not justified in disallowing the entire foreign exchange payment without identifying the payment pertaining to the actual accrual made during the year - HELD THAT:- Even otherwise, the ld. CIT(A) has threadbare analysed each and every item and given justification for deletion of the same, the operative para of which has already been reproduced in the preceding paras. The ld. DR could not point out any error in the order of the CIT(A) on this issue so as to take a contrary decision. Since the ld. CIT(A) has given justifiable reasons for deleting the addition made by the AO, therefore, in absence of any contrary material brought to our notice by the ld. CIT-DR, the order of the CIT(A) on this issue is upheld and this ground raised by the Revenue is dismissed.
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2020 (8) TMI 352
Power of CIT-A - Procedure in Appeal u/s 250 - plea has not been made before the AO but made before the appellate authorities - Valuation of property - whether the assessee can take an additional ground at appellate stage even when the same has not been raised before the lower authorities? - Determining the Annual Letting Value (ALV) of one of the property of the assessee which remained vacant during the period relating to the previous years relevant to the assessment years under consideration - AO determined the ALV of Property as per market rate and accordingly made the impugned additions after giving the benefit to the assessee of statutory deductions - HELD THAT:- As decided in M/S JSW HOLDINGS LTD. [ 2017 (8) TMI 1609 - ITAT MUMBAI] CIT(A) though, rightly admitted the question of law as to whether the income offered by the assessee in the return of income consequent to offer made in his statement recorded during the survey action can be challenged before the appellate authority, but wrongly decided the same in favour of revenue. In view of our findings given above and in view of the various case laws as discussed above, we have no hesitation to hold that the additional income was returned by the assessee perhaps under force, pressure, threat or coercion and under the mistaken belief. The assessee, in our view, was not liable to pay tax on the said additional income returned. We accordingly direct the Department to refund the taxes, if any, paid by the assessee in respect of additional income offered during the survey action. Even as per the provisions of sub section (4) and sub section (5) of section 250 of the Act, it was required of the CIT(A) to look into grounds taken by the assessee which were based on documentary evidence in the shape of Court orders and adjudicate upon them so as to determine the correct tax liability of the assessee. In view of this, the impugned orders of the CIT(A) which have been passed without considering the pleas taken by the assessee are not sustainable in the eye of law. However, the issue is required to be restored to the file of the CIT(A) for decision afresh. Appeal of assessee allowed for statistical purposes.
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Customs
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2020 (8) TMI 351
Amendment in shipping bills - MEIS benefits - Exporter was unable to file MEIS claim on the account that the shipping bills were not electronically transmitted to the DGFT for processing the MEIS scrips - in the reward column instead of mentioning 'Y' it was mentioned as 'N'. - HELD THAT:- The amendment of shipping bills shall necessarily be conforming to the conditions laid down in Section 149 of the Customs Act. In the case on hand, since the appellant does not have any case that the conditions stipulated in Section 149 are not existing, there can be no denial of the permission to amend the shipping bills. Appeal dismissed.
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2020 (8) TMI 350
Principles of Natural Justice - Extension of period of issuance of SCN after seizure of goods - power of Principal Commissioner of Customs or Commissioner of Customs is empowered to extend the period for issuance of notice under Section 124 of the 1962 Act to another six months - affording an opportunity of hearing at the time of extension or not - Section 110(2) of the Customs Act, 1962 - HELD THAT:- The seizure in the instant case was done on 16.10.2019 and the period of six months expired on 15.04.2020. In view of the Ordinance dated 31.03.2020 promulgated before expiry of period, had already been extended upto 30.06.2020 but still vide Exhibit R1(a) dated 11.03.2020, the Commissioner of Customs (Prev) on the basis of report of Assistant Commissioner of Customs (P), Thrissur Division extended the period from 15.04.2020 to another period of six months. Whether the said order was communicated to the petitioner within or after the expiry period? - In the absence of Ordinance, there would have been a force in the arguments of learned counsel appearing for the petitioners of non-adherence to the strict provisions of the Act as concededly the communication of extension received by the petitioner is dated 26.05.2020 (Exhibit P-19). Thus, the right of the petitioners has not been prejudiced or taken away in granting extension of six months for completion of proceedings under Section 124 of the 1962 Act - petition dismissed.
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Corporate Laws
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2020 (8) TMI 342
Oppression and Mismanagement - Offence of perjury - reduction in shareholding in the Company from 49% to 36% - mismanagement of the affairs of the Company - oppression to the minority shareholders - making false and contradictory averments in the Counter Affidavit filed by Respondent No.3 - Section 340 of Cr.PC - HELD THAT:- The allegations in the present petition, directly or indirectly touch upon the Minutes of the AGM of 30.09.2006, which is the subject matter of adjudication before NCLT. While Mr. Khosla urges that this petition can be independently decided as it relates to the alleged EGM and certain other issues raised therein, but on a holistic reading of the petition, this Court is of the opinion that any decision in the present petition will have a bearing on the genuineness of AGM dated 30.09.2006 and other aspects sub-judice before NCLT, as the controversies are intrinsically linked. It is apparent from the order passed by the Supreme Court in MR. VIKRAM BAKSHI ORS. VERSUS MS. SONIA KHOSLA (DEAD) BY LRS. [ 2014 (5) TMI 749 - SUPREME COURT ], which was a consent order, that the parties chartered a course of action for further litigation and the path chosen was to have the entire dispute decided before the then CLB (now NCLT). In fact, it was the Petitioner Group which had put forth before the Supreme Court that once the Company Petition is decided, the connected issues of the alleged illegalities in the various Board Meetings would be taken care of, including allegations qua AGM held on 30.09.2006 - It is not disputed by Mr. Khosla that the NCLT is even currently seized of the Petitions/ Applications, as referred to in the order of the Supreme Court, between the two Groups. Thus in the light of the order of the Supreme Court in MR. VIKRAM BAKSHI ORS. VERSUS MS. SONIA KHOSLA (DEAD) BY LRS. [ 2014 (5) TMI 749 - SUPREME COURT ], it is not proper for this Court to entertain the present Petition at this stage. Petitioner may approach the NCLT, in accordance with law, if so advised. In all probability once the proceedings pending before the NCLT end, the creases shall be ironed out with respect to the EGM also. Nonetheless, in case the issues raised herein still survive after the proceedings end before NCLT, it shall be open to the Petitioner to approach this Court, in accordance with law - Petition disposed off.
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2020 (8) TMI 340
Possession of secured assets of the company in liquidation - permission to sell the secured assets by public auction - SARFAESI Act - time limitation - HELD THAT:- Prima facie, the reliance placed by the counsel for the appellant on Article 62 of the Schedule to the Limitation Act is misplaced. Article 62 provides limitation for a suit to enforce payment of money secured by a mortgage or otherwise charged upon immovable property. The proceedings under the SARFAESI Act are not for recovery of money but are more akin to a proceeding for foreclosure of mortgage, limitation for a suit wherefor provided in Article 63 (a) of the Schedule to the Limitation Act is of 30 years commencing from the date when the money secured by the mortgage became due. It thus appears that Article 63(a) and not Article 62 of the Schedule to the Limitation Act would apply. However, it is not deemed apposite to deal further on the said aspect because we have also enquired from the counsel for the appellant, whether not the challenge to the SARFAESI Act proceedings, on the ground of the same being barred by limitation, is required to be made by way of a proceeding under Section 17 of the SARFAESI Act and before the DRT and the jurisdiction of this Court would be barred by Section 34 of the SARFAESI Act - the SARFAESI Act came into force only in the year 2002 and going by Article 63(a) of the schedule to the Limitation Act, it cannot be said that the limitation of 30 years, even if counted from 31st December, 1991 has not expired or had expired, for that matter, even by 20th July, 2015 when the notice under Section 13(2) of the SARFAESI Act was issued. Since the possession of the secured assets was with the respondent no.1 OL pursuant to the recommendation of the BIFR and the order of liquidation, respondent no.2 RIICO Ltd., for the purpose of proceedings under the SARFAESI Act, was in any case required to apply to the Company Court for direction to the respondent no.1 OL to handover possession of the property for sale under the SARFAESI Act - We have not been able to decipher any clear reply from the counsel for the appellant to our aforesaid queries, qua jurisdiction of the Company Court or of this Court in appeal against the order of the Company Court, to go into the aspect of bar of limitation, if any to the proceedings under the SARFAESI Act and jurisdiction therefor being exclusively of the DRT or qua limitation. Appeal dismissed.
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Insolvency & Bankruptcy
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2020 (8) TMI 349
Invocation of performance guarantee given about another contact - refusal to grant interim relief to the Corporate Debtor - time limitation for filing reply before Appellate Tribunal - HELD THAT:- Appellant has filed this Appeal on 08th June 2019 against the Order dated 31st December 2019 passed by the Adjudicating Authority/NCLT, Chennai Bench, Chennai - As per Section 61 of the Insolvency and Bankruptcy Code, 2016, the Appeal filed before this Appellate Tribunal against Order of the Adjudicating Authority can be filed within 30 days. The proviso to Section 61 of the Insolvency and Bankruptcy Code provides that the Appellate Tribunal may allow an Appeal to be filed after the expiry of the statutory period of 30 days. Still, in no circumstances, such extended period shall exceed 15 days. The language of the proviso to Section 61(1)of the I B Code makes it clear that this Tribunal does not have the power to extend the time limit beyond 15 days, in addition to the statutory time limit of 30 days. It is also clear that this extension of 15 days depends upon the satisfaction of the Appellate Tribunal, on being shown the sufficient cause for not filing the Appeal within the time limit. The moratorium order passed under sub-section (1) to Sec 14 of the I B Code does not apply to the surety in a contract of guarantee to a Corporate Debtor. Therefore, in the circumstances, the Adjudicating Authority passed the Order that the performance guarantee given by the bankers on behalf of the Corporate Debtor, whereby simply to set off the money in the event of an order was passed in favour of the Corporate Debtor, cannot be interfered with the performance guarantee with regard to another contract - the Adjudicating Authority has rightly refused to grant an interim relief about the invocation of bank guarantee given by bankers on behalf of the Corporate Debtor. Appeal dismissed.
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2020 (8) TMI 348
Resolution of Corporate Insolvency approved by the Committee of Creditors - Claim of Customs Duty and other dues after de-bonding / de-notification of SEZ unit - It is contended that the amount to be paid at the time of de-bonding/ exit from SEZ is subject to the assessment to be made by the Development Commissioner under Rule 74 of the SEZ Rules, 2016 - time limitation - HELD THAT:- Section 61 of the I B Code provides for appeal against an order passed by the Adjudicating Authority under Part-II of the I B Code covering Sections 4 to 77 of the I B Code . An aggrieved person may prefer an appeal to NCLAT within 30 days. This Appellate Tribunal has been vested with powers to allow an appeal to be filed after the expiry of 30 days if it is satisfied that there was sufficient cause for not filing the appeal within the prescribed time. However, such period shall not exceed 15 days - It is by now well settled that the provisions of the Limitation Act, 1963 cannot be invoked for regulating the period of limitation governing appeals preferred under Section 61 of the I B Code which ordinarily provides a period of 30 days for preferring of an appeal by an aggrieved person qua an order passed under Part-II of the I B Code which is extendable by 15 days at the discretion of this Appellate Tribunal on sufficient cause being assigned for non-filing of appeal within the statutory period of 30 days. It is also manifestly clear that the outer limit of 45 days cannot be transgressed to enable an Appellant to maintain an appeal under this provision. If the appeal has been preferred beyond statutory period of 30 days and extended period of 15 days i.e. total 45 days, this Appellate Tribunal will have no jurisdiction to entertain such appeal. From which date the period of limitation is to be reckoned? - HELD THAT:- The appeal has been preferred even 30 days beyond the extended timelines of 45 days envisaged under Section 61(2) proviso of the I B Code . It is, therefore, irrelevant as to whether the cause assigned for non-filing of the appeal within statutory period of 30 days from the date of knowledge was sufficient to warrant condonation of delay/ extension for 15 days contemplated under law as the maximum outer limit. The appeal being hopelessly time barred deserves to be dismissed on the count of limitation alone. Whether the Appellant has been able to carve out a case on merit for judicial intervention qua the impugned order? - HELD THAT:- It is abundantly clear that the SEZ Act, 2005 has overriding effect and wherever the extant laws dealing with the matters dealt with under the Act are inconsistent with the provisions of the Act, the provision of the Act will prevail. In the instant case, there is no controversy on the vital aspect of the exact amount chargeable for de-notification of the unit of Corporate Debtor being determined by the Development Commissioner at the time of exit in terms of Rule 74. This is in fact admitted position and the Appellant also has admitted that the amount of ₹ 45 Crores set apart in the approved Resolution Plan for de-notification of the Corporate Debtor from SEZ is not a crystallised debt but an amount to be assessed by the Development Commissioner in exercise of its jurisdiction. Thus, it is abundantly clear that the estimated amount of ₹ 45 Crores has been set apart in the approved Resolution Plan to take care of the duties chargeable and penalties imposable by the Development Commissioner while according approval to opting out of Corporate Debtor from SEZ. Admittedly, the Resolution Applicant has applied for the de-notification of the unit of the Corporate Debtor before the Development Commissioner. Claim of Appellant amounting to ₹ 36,21,42,252/- having been rejected during the Resolution Process and the same not having been assailed by the Appellant before the Adjudicating Authority, the Appellant is not entitled to raise issue in this regard for the first time in appeal before this Appellate Tribunal. Argument advanced on this aspect is accordingly repelled - the Appellant has failed to carve out a case for judicial intervention in appeal on merits too - Appeal is barred by limitation and is dismissed.
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2020 (8) TMI 347
Claim of Tax Dues after the Approval of Resolution Plan - CIRP process - Operational Debt or not - Section 60(5) of the I B Code - HELD THAT:- The statutory dues are operational debts, and once a resolution plan is approved by the NCLT, the treatment of all stakeholders, including Operational Creditors, is to be determined as per the terms of the approved Resolution Plan. Based on the terms of the approved Resolution Plan, it is clear that the Operational Creditors has no rights against the acquiring Company relating to the period, before the Effective Date. The Acquiring Company shall not have any liability towards Operational Creditors for the amounts owed prior to the Effective Date. Since the claim of the Appellant, i.e. the Statutory dues are the operational debt of the corporate debtor, Uttam Strips Pvt Ltd, and no claim was filed by the Appellants before the Resolution Professional, despite the knowledge of the Corporate Insolvency Resolution Process against the Corporate Debtor Uttam Strips Ltd, therefore the Appellants does not have any right to claim its dues from the acquiring Company, i.e. Jyoti Strips Ltd. The approved Resolution Plan is binding on all the stakeholders; therefore, the Appellant is abode by the terms of the Approved Resolution Plan. No interference is called for against the impugned Order dated 18th December 2019 - In the impugned Order, the statutory dues have been treated as Operational Debt and equated them with similarly situated Operational Creditors - impugned order upheld.
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2020 (8) TMI 345
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - three years from the date of the alleged default - whether the application made by respondent No. 2 before NCLAT under Section 7 of the Code is within limitation? - HELD THAT:- The Insolvency and Bankruptcy Code, 2016 has been enacted to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons and other entrepreneurs in a time bound manner so as to ensure maximisation of value of assets of such persons and to balance the interest of all the stakeholders. As regards corporate debtor, the primary focus of the Code is to ensure its revival and continuation by protecting it from its own management and, as far as feasible, to save it from liquidation - When the Corporate Insolvency Resolution Process is understood on the anvil of the aforementioned fundamentals on the spirit and intent of IBC, it is also evident that such a process is not intended to be adversarial to the corporate debtor but is essentially to protect its interests. In relation to a financial creditor, the trigger for CIRP is default by the corporate debtor of rupees one lakh or more against the debt/s. When seeking initiation of CIRP qua a corporate debtor, the financial creditor is required to make the application in conformity with the requirements of Section 7 of the Code while divulging the necessary information and evidence, as required by the Rules of 2016. After completion of all other requirements, for admitting such an application of the financial creditor, the Adjudicating Authority has to be satisfied, as per sub-section (5) of Section 7 of the Code, that default has occurred and, in this process of consideration by the Adjudicating Authority, the corporate debtor is entitled to point out that default has not occurred in the sense that the debt , which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. As observed by this Court, the legislative policy now is to move away from the concept of inability to pay debts to determination of default . Operation of law of limitation over IBC proceedings - HELD THAT:- The following basics come to the fore: (a) that the Code is a beneficial legislation intended to put the corporate debtor back on its feet and is not a mere money recovery legislation; (b) that CIRP is not intended to be adversarial to the corporate debtor but is aimed at protecting the interests of the corporate debtor; (c) that intention of the Code is not to give a new lease of life to debts which are time-barred; (d) that the period of limitation for an application seeking initiation of CIRP under Section 7 of the Code is governed by Article 137 of the Limitation Act and is, therefore, three years from the date when right to apply accrues; (e) that the trigger for initiation of CIRP by a financial creditor is default on the part of the corporate debtor, that is to say, that the right to apply under the Code accrues on the date when default occurs; (f) that default referred to in the Code is that of actual non-payment by the corporate debtor when a debt has become due and payable; and (g) that if default had occurred over three years prior to the date of filing of the application, the application would be time-barred save and except in those cases where, on facts, the delay in filing may be condoned; and (h) an application under Section 7 of the Code is not for enforcement of mortgage liability and Article 62 of the Limitation Act does not apply to this application. Whether Section 18 Limitation Act could be applied to the present case - HELD THAT:- Indisputably, in the present case, the respondent No. 2 never came out with any pleading other than stating the date of default as 08.07.2011 in the application. That being the position, no case for extension of period of limitation is available to be examined. In other words, even if Section 18 of the Limitation Act and principles thereof were applicable, the same would not apply to the application under consideration in the present case, looking to the very averment regarding default therein and for want of any other averment in regard to acknowledgement. In this view of the matter, reliance on the decision in Mahaveer Cold Storage Pvt. Ltd. does not advance the cause of the respondent No. 2. There remains nothing to doubt that the Appellate Tribunal had been in error in applying the period of limitation provided for mortgage liability for the purpose of limitation applicable to the application in question. The discussion foregoing leads to the inescapable conclusion that the application made by the respondent No. 2 under Section 7 of the Code in the month of March 2018, seeking initiation of CIRP in respect of the corporate debtor with specific assertion of the date of default as 08.07.2011, is clearly barred by limitation for having been filed much later than the period of three years from the date of default as stated in the application - the impugned orders deserve to be set aside and the application filed by the respondent No. 2 deserves to be rejected as being barred by limitation. Appeal allowed.
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2020 (8) TMI 338
Jurisdiction of Adjudicating Authority - withdrawal of approved Resolution Plan - time limitation of achieving Insolvency Resolution of the Corporate Debtor - Principles of Res-Judicata - Delay in completion of Corporate Insolvency Resolution Process of the Corporate Debtor - HELD THAT:- The Adjudicating Authority while passing the order of dismissing the application in CA No. 1252(PB)/2019 dated 10.7.2019 had not specifically dealt with the aspect of supply of copy of certificates under Sections 43,45,50 and 66 of the I B Code. Likewise, the (iii)(rd) relief withholding of approval of Resolution Plan sanctioned by the Committee of Creditors of Corporate Debtor was also not expressly adverted to by the Adjudicating Authority at the time of dismissing the CA No.1252(PB)/2019. To put it precisely, the Adjudicating Authority while dismissing CA No.1252(PB)/2019 on 10.7.2019 had merely mentioned about the ivth relief prayed for by 1st Respondent / Resolution Applicant viz. the revaluation of the Resolution Plan submitted by it before the Resolution Professional but not granted the said relief but merely mentioned that no ground for considering the prayer sought in the application is made out by passing a speaking order but merely mentioned, no ground for considering the prayer sought in the application is made out and the said application was dismissed as such. Principles of Res-Judicata - HELD THAT:- The said principle is a prohibition against the Court / Tribunal. An inter-party order passed by a competent Tribunal binds them even if it is an erroneous one. If an order is passed in a given proceedings and the same became final, then in Law, it would be binding at a later stage of the proceeding, in the considered opinion of this Tribunal. Res Judicata prohibits an inquiry at the very threshold and bar the trial of a suit or a given proceeding - The Rule of constructive Res Judicata is enshrined in explanation iv of Section 11 of the Civil Procedure Code. In fact, the doctrine of Res Judicata applies to all judicial proceedings and equally to all quasi-judicial proceedings before Tribunals. When any matter might and ought to have been raised as a ground of defence in an earlier proceeding but that was not made, then in Law to avoid plurality of litigations and to bring about finality in it, such matter was deemed to have been constructively in issue and as such is taken as determined . The issue of withdrawal of Resolution Plan by the Applicant has never been considered consciously on merit and / or adjudicated upon in CA No. 1252(PB)/2019 and proceeded to mention that doctrine of constructing Res Judicata does not apply to the issues/points, or any lis between the parties that was not decided previously and despite been pleaded was not considered by court/Tribunal and expressly dealt with in the order so passed etc., this Tribunal is of the considered view that these observations are not legally tenable because of the latent and patent fact that the grounds raised by the 1st Respondent / Successful Resolution Applicant in CA 1816(PB)2018 (withdrawal application) were projected earlier and rejected in CA No. 1252(PB)/2019 through an order dated 10.7.2019. Furthermore, the plea of the 1st Respondent / Successful Resolution Applicant and the finding of the Adjudicating Authority that the prayer for withdrawal was not considered while disposing of CA No. 1252(PB)/2019 is quite in tune with the very principle of Res Judicata which means that the reliefs should be deemed to have been denied when what were claimed being not granted which unerringly points out that they were denied or refused by the Adjudicating Authority. Withdrawal of Resolution Plan - HELD THAT:- In the instant case, notwithstanding the fact only upon the approval of the Adjudicating Authority the Resolution Plan of the Resolution Applicant would be binding on all the parties and further that the application for withdrawal was filed by the 1st Respondent/ Resolution Applicant was filed earlier to the stage of Approval by the Adjudicating Authority yet this Court comes to an cocksure conclusion that the Adjudicating Authority , in law cannot enter into the arena of the majority decision of the Committee of Creditors other than the grounds mentioned in Section 32(a to e) of the I B Code. Moreover, after due deliberations, when the 1st Respondent/ Resolution Applicant had accepted the conditions of the Resolution Plan especially keeping in mind the ingredients of Section 25(2)(h) of the Code to the effect that no change or supplementary information to the Resolution Plan shall be accepted after the submission date of Resolution Plan then it is not open to the 1st Respondent/ Resolution Applicant to take a topsy turvy stance and is not to be allowed to withdraw the approved Resolution Plan . Delay in completion of Corporate Insolvency Resolution Process of the Corporate Debtor - HELD THAT:- The 2nd Respondent had clearly pointed out before this Tribunal that no special investigation audit was conducted and, therefore, the 1st Respondent/ Resolution Applicant cannot have a grievance that the Resolution Professional had not supplied it a copy of the said Audit Report. Further, the CBI and SFIO proceedings initiated against the Corporate Debtor are pending and hence, and in any event Section 32A of the I B Code grants immunity to the 1st Respondent/ Resolution Applicant in respect of the offences committed by the Corporate Debtor before the start of CIRP . Also, that it specifies that the assets of the Corporate Debtor as represented will be available in the right manner as at the time of furnishing of Resolution Plan . When that be the fact situation, the 1st Respondent/ Resolution Applicant taking an umbrage of pending SFIO investigation of the affairs of Corporate Debtor or the CBI investigation to file CA 1816(PB) of 2019 (withdrawal application) is unworthy of acceptance - During the period from August, 2018 till January 2019 when the orders were reserved by the Adjudicating Authority on the approval application, the 1st Respondent/ Resolution Applicant took part and, therefore, by any stretch of imagination, it cannot be said that the validity of the approved plan was only six months period and such plea is not well founded. This Tribunal comes to an irresistible conclusion that the views arrived at by the Adjudicating Authority in CA No.1816(PB)/2019 in C.P.(IB)No. 101 (PB) 2017 to the effect (i)that doctrine of Res Judicata does not apply to the present case (ii) in granting the relief of withdrawal of Resolution Plan with costs and resultantly allowing the aforesaid CA No. 1816(PB)/2019 in C.P.(IB)No. 101 (PB) 2017 partly specifying the terms therein with costs of ₹ 1 lakh to be paid by the 1st Respondent/ Resolution Applicant are clearly unsustainable in law and accordingly, they are set aside in furtherance of substantial cause of justice - Appeal allowed with no costs.
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2020 (8) TMI 337
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT:- Admittedly, in this case, the alleged amount is due on account of non-payment of invoice amount, generated on 13th December 2011. The acknowledgement of debt, which is beyond the limitation period, i.e. 01st April 2017 cannot provide a fresh period of limitation under Section 18 of the Limitation Act - In the case of Jignesh Shah v. Union of India, [ 2019 (9) TMI 1121 - SUPREME COURT ] Hon ble the Supreme Court has clearly held that when the time for limitation begins to run, it can only be extended in the manner provided under the Limitation Act. For example, an acknowledgment of liability under Section 18 of the Limitation Act would certainly extend the limitation period. Thus, when part payment is made before the expiration of the prescribed period of limitation by the person liable to pay the debt, a fresh period of limitation shall be computed from the time when the payment was made - In the instant case, the Operational Creditor claims that it has received last payment in lieu of debt from the Corporate Debtor on 30th May 2015. Alleged liability is on account of invoice dated 13th December 2011. Therefore, the limitation period cannot be extended, given the statutory provision under Section 19 of the Limitation Act as the Corporate Debtor has made part payment after expiration of the period of limitation. In this case, the Adjudicating Authority has passed the Order of admission under Section 9 of the Code, without even considering the statutory requirement of Section 9(3)(b) and 9(3)(c) of the Code. The Adjudicating Authority has even not considered the issue of limitation, though Section 3 of Limitation Act mandates to decide the issue of limitation - The Adjudicating Authority has admitted the time barred petition, though as per statutory provision of Section 3 of the Limitation Act, it was obligatory on the Adjudicating Authority to examine the issue of limitation. Appeal allowed.
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2020 (8) TMI 336
Maintainability of application - initiation of CIRP - Time limitation - Section 7 of the I B Code - HELD THAT:- The Form-1 of the Application, (Part 4 at serial No.2) records the date of default as 31st December 2007. This Application under Section 7 is filed on 26th February 2019, i.e. after more than 11 years. The Financial Creditor has also admitted in the statutory Form-1 that the consequence of default is that all the interest amount became due and payable forthwith. Hence, the period of limitation admittedly started on 31st December 2007. This Appellate Tribunal in case of Gauri Prasad Goenka Vs. Punjab National Bank Others [2020 (5) TMI 65 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] has held that Section 3 of the Limitation Act is a mandatory provision and it is obligatory on the Tribunal to examine the issue of limitation. Further, if the claim is barred by limitation, the Corporate Debtor cannot be held to have committed a default. Admittedly, in this case, the Applicant/Financial Creditor has stated that default started from 31st December 2007 and the Application for initiation of Corporate Insolvency Resolution Process is filed on 26th February 2019. The Financial Creditor has also admitted that the consequence of default is that all the interest amount became due and payable immediately. Hence, the period of limitation began from 31st December, 2007. As per the terms of Agreement, the subscription to the debentures was done for a period of 84 months. Interest @ 12% p.a. and in case of default, an additional interest of 6% p.a. was required to be paid. In the entire duration of the Agreement, the Corporate Debtor paid interest amounting to ₹ 39,86,371/- only once, i.e. for the Quarter ending 31st September 2007. It is further contended that the Corporate Debtor defaulted on the payment of interest till the time stipulated in the Agreement, i.e. up to 20th May 2014. Thus, it is clear that the default started on 31st December 2007. Thereafter, the default continued till 20th May 2014, i.e. the expiry of the period as stipulated in the Agreement - Therefore, the right to sue accrued from the moment, default first occurred on 31st December 2007. Since the default has occurred over three years prior to the date of filing of the Application, it would be barred by limitation under Article 137 of the Limitation Act. Therefore, the right to sue accrued from the moment, default first occurred on 31st December 2007. Since the default has occurred over three years prior to the date of filing of the Application, it would be barred by limitation under Article 137 of the Limitation Act. The Adjudicating Authority erred in admitting the Application filed under Section 7 of the I B Code, even though it was time-barred - Appeal allowed.
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PMLA
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2020 (8) TMI 344
Money Laundering - illegal collection of money - Grant of Anticipatory Bail - corruption and criminal conspiracy in which the ACB/EOW raided few offices and residences - allegation that Applicant Anil Tuteja received an amount of ₹ 2,21,94,000 and Applicant Alok Shukla received an amount of ₹ 1,51,43,000 illegally during the period from 30.5.2014 to 18.2.2015 and 1.7.2014 to 18.2.2015, respectively - HELD THAT:- There is concurrent jurisdiction of the High Court and the Court of Session for entertaining an application preferred under Section 438 Cr.P.C. and an application filed by the Applicant under Section 438 Cr.P.C. directly before the High Court is maintainable. From the speech of the then Finance Minister, it is also clear that the provisions of Section 24 of PMLA only apply after framing of a charge against the accused - In the instant matter, the predicate offence is of the year 2014 2015. In said case, charge-sheet has already been filed and no recovery was made from any of the Applicants. No departmental proceeding has been initiated against any of the Applicants nor has any show cause notice been issued against them. No case regarding acquisition of any disproportionate property has been registered against them. Out of 212, about 153 witnesses have already been examined. Despite the fact that the 18 Applicants are officers of Indian Administrative Services, there is no allegation levelled against them that they ever influenced any of the witnesses or tampered with any evidence. ECIR case was registered against them in the year 2019. Notice was issued to them for the first time in the ECIR case in the month of March, 2020. The delay in issuance of notice has not been explained. The benefit of anticipatory bail provided to the Applicants - both the applications for grant of anticipatory bail are allowed.
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Service Tax
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2020 (8) TMI 343
Rejection of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - rejection on the ground that the audit was conducted and conveyed on 02nd July, 2019 and amount of duty involved in the audit had not been quantified on or before the 30th day of June, 2019 - HELD THAT:- This Court is of the view that the duty liability stood admitted in an oral statement by the petitioner before 30th June, 2019 and consequently stood quantified prior to the cut-off date in accordance with the beneficial circulars dated 12th December, 2019 and 27th August, 2019 issued by the Central Board of Indirect Taxes and Customs - This Court is further of the opinion that a liberal interpretation has to be given to the SVLDRS, 2019 and the circulars issued by Central Board of Indirect Taxes and Customs as their intent is to unload the baggage relating to legacy disputes under the Central Excise and Service Tax and to allow the businesses to make a fresh beginning. The Designated Committee is directed to decide the petitioner s application in accordance with the observations and findings of this Court after giving an opportunity of hearing to the petitioner - list the matter before the Designated Committee on 03rd September, 2020 at 11:00 A.M.
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CST, VAT & Sales Tax
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2020 (8) TMI 346
Valuation - inclusion of consultancy charges in the assessable value - assessee took the contention that the software was sold for a particular price and the consultancy services are with respect to the modifications made in the software to adapt it to the purchaser's requirements - imposition of penalty at double the tax amount - HELD THAT:- The learned Senior Government Pleader invited us to the records to point out that the invoices produced would clearly demonstrate the manner in which the transaction was carried out, making the entire turnover taxable under the KVAT Act. We are, however, not looking at the facts in the above revisions and have to confine ourselves to determination of questions of law. We have stated the law and the facts have to be examined by the statutory authorities. The statute provides for adjudication by the original authority and then two stages of appeals; the forums enjoined with the power to so adjudicate have been empowered to look into the facts. The matter has to be remanded back to the fact finding authority - revision allowed by way of remand.
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2020 (8) TMI 341
Principles of Natural Justice - it is contended that the order is contrary to binding precedent of the superior officer in the Petitioner s own case for the earlier Assessment Years 2013-14 and 2014-15 - transactions of sale of nickel-cobalt by the Petitioner either to customers within Arshiya FTWZ or to DTA units within Arshiya FTWZ of goods - HELD THAT:- The transaction of sale of nickel-cobalt by the Petitioner either to customers within the Arshiya FTWZ or to DTA units within the Arshiya FTWZ are under consideration for levy of VAT for all the three assessment years, 2013-14, 2014-15 and 2015-16. The Appellate Orders for Assessment Years 201314 and 2014-15, subject matter of review by the higher authorities, have neither been stayed nor modified. Whether or not, this is a sale in the course of import, is not an issue we would like to go into at this stage, nor are we making any observations on the merits of this case. We are also not commenting on the allegations/ counter allegations with respect to the appeal sought to be filed or on the issue of pre-deposit or, for that matter, whether the view taken by the Appellate Authority for Assessment Years 2013-14 and 201415 was right. It is sufficient for us to observe that the two sets of facts i.e. facts of the present case and facts in the case of Assessment Years 2013-14 and 2014-15, are apparently identical and once there is a finding on identical transactions given by the Appellate Authority in respect of two Assessment Years in the case of an Assessee, unless that is set aside or the order is suspended by a competent court or authority, Respondent No.3 Adjudicating Authority was bound to follow the orders of the Appellate Authority for Assessment Years 2013-14 and 2014-15 for the Assessment Year 2015-2016. The Impugned Order consisting of Assessment order dated 20th March, 2020 and the notice of demand and remand the proceedings back to Respondent No.3 Deputy Commissioner of State Tax, for denovo consideration in accordance with law and after hearing the Petitioner and considering its submissions and passing a speaking order in line with the aforesaid observations and keeping in mind the principles of judicial discipline and binding precedent that require subordinate authorities to follow the orders of the higher appellate authorities - Petition allowed.
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2020 (8) TMI 339
Levy of tax at the rate of 12.5% on the entire taxable turn over - reversal of the Input Tax Credit - benefit of presumptive tax scheme - petitioner is eligible for the assessment under Section 3 (4) (b) of the Tamil Nadu Value Added Tax Act - HELD THAT:- The amendment to Section 3(4) of the TNVAT Act would have to be applied retrospectively - The revised assessment order giving a prospective effect to Section 3 (4) b from 01.04.2012, may not be correct. Accordingly, the proceedings itself requires to be reconsidered by the respondent. The impugned order of the respondent is hereby set aside and the matter is remanded back to the respondent for fresh consideration - Petition allowed by way of remand.
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