TMI Tax Updates - e-Newsletter
August 29, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
Recovery of GST - Non filing of returns - there is a caveat in terms of provision u/s 62(2) where on receipt of such information, as noticed above, was received by the petitioner on 27.9 2019, petitioner filed the returns on 25.10.2019 within 30 days. There could not have been an occasion for issuing of recovery notices as assessment orders were in law required be withdrawn. - HC
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GST:
Claim of transitional credit - submission of form TRAN-1 - mistake while submitting the aforementioned form TRANS-1 was that, instead of filing it under the Central GST, it was filed under the State GST. - The SGST network on consideration of the matter would take a call on such request by applying the principles of natural justice, i.e. affording an opportunity of hearing to the petitioner and thereafter would strictly adhere the procedure prescribed in the circular for onward transition to ITGRC. - HC
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Income Tax:
Capital gains arising out of land acquisition compensation - date of accrual of capital gains for the purpose of Section 45 - capital gains shall be deemed to have accrued: (a) upon making of the award, in the case of ordinary acquisition referable to Section 16; and (b) after expiration of fifteen days from the publication of the notice mentioned in Section 9 (1), in the case of urgency acquisition under Section 17. - SC
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Income Tax:
Can the decision of ITAT for later Assessment Year (i.e AY 1975-1976) be questioned in the second round of litigation - the revenue had every reason to question the correctness of the later decision of ITAT in the second round of proceedings pertaining to the assessment year 1971-1972. - SC
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Income Tax:
Penalty u/s. 271(1)(c) - non disclosure of sale the lands and windmill - As carefully perused the penalty order dated 25.09.2015 and we find that the Assessing Officer considered all the factual aspects raised by the assessee and rejected the same to be absolutely without bonafides. - HC
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Income Tax:
TDS u/s 194N - Consequences of failure to deduct or pay u/s 201 - cash withdrawal exceeding Rupees One Crore in an year from the bank account - Not agree with the stand of the writ petitioners' counsel that the volume of transaction that had taken place prior to 01.09.2019 should be ignored - as brought to notice computation of tax has been made only with effect from 01.09.2019 and there has been no levy on the transaction before the cut off date. - HC
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Income Tax:
Short deduction of TDS - Addition u/s 40 (a) (ia) - the assessee has deducted tax on the above sum the rate of one percent instead of 2% as held by the assessing officer. Therefore there is no failure of non-deduction of tax. If there is any offence or violation it is deduction of tax at lower rates compared to what is prescribed. - AT
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Income Tax:
Rectification of mistake - when there is no provision for condonation of delay for filing of the miscellaneous application, then the miscellaneous application filed belatedly is not maintainable being barred by limitation provided under section 254(2) of the Act. Miscellaneous application so filed by the assessee is dismissed. - AT
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Income Tax:
Addition u/s 68 - Unexplained share capital receipt - Mere paperwork by the assessee does not take the authorities anywhere, when the learned AO suspected the real existence of the entities that applied and paid for share application and share premium and insisted that a higher degree of proof is required in that respect. - Order of the CIT(A) deleting the additions, set aside - AT
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Income Tax:
Addition u/s 14A - Whether the provisions of section 14A are applicable even when no exempt income is earned? - Recently, the Hon'ble Supreme Court has dismissed the SLP filed against the decision of the High Court wherein it was held that section 14A of Act cannot be invoked where no exempt income was earned in the relevant year. - AT
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Customs:
Power of Central Government to impose quantitative restrictions - Import of Peas - Powers u/s 3 versus u/s 9A of the FTDR Act - Notwithstanding Section 9A, the Central Government continues and has authority to impose quantitative restrictions by an order under Section 3(2) of the FTDR Act. Principle of Lex specialis derogat legi generali, therefore, is not applicable to the case in hand - Section 9A has to be interpreted as an escape provision when the Central Government i.e. the Union of India may escape the rigours of paragraph (1) of Article XIX of GATT-1994. Section 9A is not a provision which incorporates or transposes paragraph (1) of Article XI into the domestic law either expressly or by necessary implication. - SC
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Customs:
Validity of Show Cause Notice (SCN) - Violation of Foreign Trade Policy - SFIS scheme - This is a premature writ petition, we are not inclined to give any relief to the petitioner. The petitioner may file a reply of the show cause notice and the concerned respondents authorities shall adjudicate upon the same in accordance with law, rules, regulations and government policies - HC
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Customs:
Principles of Natural Justice - Mutuality of interest - while remanding back the matter, it is observed that: the initial SCN was adjudicated by the Commissioner and the subsequent SCNs were adjudicated by lower authorities. In the interest of Justice, we hold that all the SCNs be adjudicated now by Commissioner who is competent to adjudicate the case involving highest duty. - AT
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Service Tax:
Merely because the total amount has been billed using the number of man hours / man days as a measure, it does not become a manpower supply service. If this logic is accepted, every case where the billing is done based on the number of man hours / man days should be treated as a manpower supply service. - AT
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Central Excise:
CENVAT Credit - input - film rolls - Kodak branded film rolls supplied free of cost with Camera - when the film roll is being clubbed with the camera and both packed in a combi-pack, the MRP of the combi-pack will obviously include the value of film roll and eligible for credit - Credit allowed - AT
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VAT:
Determination of mandatory pre-deposit for admission of an appeal - adjustment of deposit with input tax credit (ITC) / Net credit - No authority is cited by the petitioner in support of petitioner’s contention that adjustment of any net credit of tax is required to be made by the appellate authority while considering any appeal filed under Section 35 of the Act - Petition dismissed. - HC
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VAT:
Penultimate sale - leather garments - The mere claim of the Assessee that the Assessing Authority had initially allowed such exemption u/s 5(3) of the Act upon due scrutiny of the transactions is not acceptable, because the finding of facts with regard to inextricable link between the sale or purchase claimed to be exempted u/s 5(3) of the Act and the export has to be established by the Assessee by leading evidence - Matter restored back - HC
Articles
Notifications
GST - States-
74/2019–State Tax - dated
26-8-2020
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Delhi SGST
Seeks to amend Notification No. 4/2018– State Tax, dated the 23rd February, 2018
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39/2020– State Tax - dated
26-8-2020
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Delhi SGST
Seeks to amend Notification No. 11/2020– State Tax, dated 20-08-2020
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62/2020-State Tax - dated
25-8-2020
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Gujarat SGST
Gujarat Goods and Services Tax (Tenth Amendment) Rules, 2020
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(GHN-79)GST-2020-R123(5)TH - dated
25-8-2020
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Gujarat SGST
Amendment in Notification No. .(GHN-79)GST-2017-R123(1)-TH, dated the 7th September, 2017
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72/GST-2 - dated
27-8-2020
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Haryana SGST
Haryana Goods and Services Tax (Removal of Difficulties) Order, 2020
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Leg. 19/2020 - dated
13-8-2020
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Haryana SGST
Haryana Goods and Services Tax (Second Amendment) Ordinance, 2020
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62/2020-State Tax - dated
26-8-2020
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Maharashtra SGST
Maharashtra Goods and Services Tax (Tenth Amendment) Rules, 2020
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241115-FIN-CT1-TAX-0001/2020 - dated
28-8-2020
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Orissa SGST
Odisha Goods and Services Tax (Tenth Amendment) Rules, 2020.
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F. 12(46)FD/Tax/2017-III-222 - dated
26-8-2020
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Rajasthan SGST
Seeks to bring into force Provisions of RGST(Amendment) Act, 2020 to amend section 50 of the RGST Act,2017 w.e.f. 01.09.2020
Income Tax-
70/2020 - dated
27-8-2020
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IT
Corrigendum - Notification No. 65/2020 dated 13th August 2020
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69/2020 - dated
27-8-2020
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IT
Corrigendum – Notification No. 63/2020 dated 13th August 2020
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68/2020 - dated
27-8-2020
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IT
Corrigendum – Notification No. 62/2020 dated 13th August, 2020
News
Case Laws:
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GST
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2020 (8) TMI 735
Detention of consignment - detention on the ground that the documents did not reflect the transaction covered by the transportation that was apprehended - Section 130 of GST Act - HELD THAT:- The 1st respondent are directed to release the goods and the vehicle to the petitioner on the petitioner furnishing a bank guarantee for the amount mentioned in Ext.P7 notice. The respondents shall, thereafter, transmit the files to the adjudicating authority for an adjudication of the issue under Section 130 of the GST Act.
Petition disposed off.
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2020 (8) TMI 734
Levy of GST - Works Contract - composite tax paid - tender rejected on the ground that the petitioner has not disclosed tax burden - petitioner argued that the petitioner has not disclosed tax burden since the petitioner has paid Composition levy under Section 10 of the GST Act - HELD THAT:- The petitioner produced Ext.P9 statement for payment of self-assessed tax. Ext.P9 would show that the payment of self-assessed tax for the quarter January–March 2019-'20, has been filed. But, it was filed only on 16.07.2020, which is much after filing of the writ petition. There is nothing on record to show that the petitioner was composite dealer as on the date of filing of the tender application. As the petitioner left the columns relating to tax element blank, respondents 1 and 2 could not assess the actual cost of the work in his bid. As the tender submitted by the petitioner was not complete in all respects, respondents 1 and 2 rejected the same - there are no illegality or arbitrariness on the part of respondents 1 and 2 in doing so.
The tender process started in the year 2020 and Ext.P7 test report allegedly submitted by the petitioner is of the year 2017. When respondents 1 and 2 demanded test report, the bidders are expected to provide test reports of recent origin. Uploading of a three year old test report will not serve the purpose. For this reason also, rejection of petitioner's bid is justified.
Petition dismissed.
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2020 (8) TMI 733
Recovery of GST - non filing of returns - notices pertained to period August 2018, October 2018 and December 2018 - Section 62 (1) of GST Act - HELD THAT:- Apparently, the returns filed within time as evidenced from screenshots Ext.P7 - For the reasons best known 4th respondent issued recovery notices Ext.P8 which are without adherence to sub Section 62(2) of the GST Act. The question of raising demand could not arise qua the returns in respect of the period referred to was not exigible to tax.
On a plain reading of Section 62 (2), extracted in paragraph 18 of the writ petition which I need not reproduce it again, it is not in doubt that whenever an assessee fails to file a return an assessing officer is required to sent the assessment order in terms of provisions Section 62 (1) of the Act but, there is a caveat in terms of provision under Section 62 (2) where on receipt of such information, as noticed above, was received by the petitioner on 27.9 2019, petitioner filed the returns on 25.10.2019 within 30 days. There could not have been an occasion for issuing of recovery notices as assessment orders Ext.P4 were in law required be withdrawn. There appears an apparent error and omission on the part of the revenue in not adhering to the fact referred. For the reasons aforementioned impugned recovery notices Ext.P8 are set aside.
4th respondent is directed to look into the returns filed as evidenced from Ext.P6 and P7 and take a call on sustainability of Ext.P4 - Petition allowed.
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2020 (8) TMI 732
Claim of transitional credit - submission of form TRAN-1 - mistake while submitting the aforementioned form TRANS-1 was that, instead of filing it under the Central GST, it was filed under the State GST. Petitioner was not aware of such indication - HELD THAT:- While exercising the powers of judicial review under Article 226 of the Constitution of India, it would not be in the domain of this court to decide as to whether it is a normal credit or was an intentional or bonafide error. Since petitioner has already sought rectification vide request, Ext.P5 in W.P.(C)No.12930 of 2020 and Ext.P3 in other items, I am of the view that the 4th respondent has already received such request on consideration of the matter, in case it requires the petitioner or representative, take a call and thereafter, as per the circular and the procedure invoked, would send it to SGST network. The SGST network on consideration of the matter would take a call on such request by applying the principles of natural justice, i.e. affording an opportunity of hearing to the petitioner and thereafter would strictly adhere the procedure prescribed in the circular for onward transition to ITGRC. Let the entire exercise be undertaken within a period of six months.
If at all the department had sent earlier notice, it would have definitely referred to while raising a summary of show cause notice including the demand any therein - Since the petitioners have already submitted the request, the procedure as directed to be followed by respondents in other matters, the conditions contained therein would also apply in the present case. Until such time a decision is taken, the operation of show cause notice is ordered to be kept in abeyance.
Petition disposed off.
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Income Tax
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2020 (8) TMI 725
Exemption u/s 54F - assessee was denied the benefit of deduction u/s 54F was that the assessee owned more than two residential houses, other than the new asset on the date of transfer of the original asset - HELD THAT:- From the order of assessment passed u/s 147 for assessment year 2011-12 it is clear that the Dhobi Ghat, Thalgatpura and Nagadevanahalli properties were in fact not residential houses owned by the assessee and that the assessee had only given the lease of vacant land and obtained rent for land and not for any building - assessee did not own more than one residential house, other than the new asset on the date of transfer of the original asset. Therefore, deduction u/s 54F of the Act should be allowed to the assessee. We hold and direct accordingly.
Capital gain computation - FMV as on 01.04.1981 - plea of the assessee that fair market value and guideline value are two different values and generally, the fair market value is higher than the guideline value - assessee had adopted the value as on 01.04.1981 at ₹ 150/- per sq.ft. on the basis of a report of a registered valuer - HELD THAT:- Our attention was drawn to a decision in the case of Late Smt. Krishna Bajaj Vs ACIT [2013 (12) TMI 544 - KARNATAKA HIGH COURT] wherein it was laid down that in the context of fair market value for the purpose of computing capital gain, that market value of property is generally far more than higher than the guideline value. The claim of the assessee for FMV as on 01.04.1981 is supported by a report of the registered valuer and facts of the present case, we are of the view that the claim of the assessee for adopting FMV as on 01.04.1981 at ₹ 150/- per sq.ft. is reasonable and the same is directed to be accepted.
Benefit of indexation to the assessee - HELD THAT:- Property was acquired by M. Gunasheela on 10.09.1979 and that on his death on 30.11.2004, wife of Gunasheela released her 1/3rd share in favour of her two daughters and thereby, the assessee and his sister got half share each of the property. This deed of release was dated 30.09.2009.
Provisions of section 55(2)(b)(ii) of the Act are relevant and the same provides that if the capital asset becomes property of the assessee by way of succession, the cost of acquisition of the capital asset would be the cost of the capital asset to the previous owner or the FMV as on 01.04.1981 at the option of the assessee, if the capital asset was acquired by the previous owner prior to 01.04.1981.
In the present case, neither the assessee nor her mother acquired the property. They acquired the property only by way of inheritance. The share released by mother of the Assessee in her favour also had not cost to her and therefore the cost to the previous owner has to be adopted. The property was acquired by Gunasheela prior to 01.04.1981 and the assessee in the computation of capital gain has opted to adopt the FMV as on 01.04.1981 for computing capital gain. Assessee would be entitled to the benefit of indexation from 01.04.1981 in respect of her half share in the property on sale of which, the assessee derived capital gain. - Appeal by the assessee is partly allowed.
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2020 (8) TMI 724
TP Adjustment - Delay in receipt of receivable from associated enterprise - HELD THAT:- In the present case the assessee has been granted the working capital adjustment while computing the arm’s-length price of the international transaction of the sale of services, according to us no separate benchmarking should be done of the outstanding receivable as outstanding receivable are part of the working capital of the assessee.
Further the issue is squarely covered in favour of assessee by the decision of the honourable Delhi High Court in case of Principal Commissioner Of Income Tax Versus Kusum Healthcare Private Limited [2017 (4) TMI 1254 - DELHI HIGH COURT]. Therefore ground number two of the appeal of the assessee is allowed and learned transfer pricing officer/learned assessing officer are directed to delete the addition in relation to the delay in receipt of receivable from associated enterprise.
Depreciation claimed at the rate of 60% on voice recording software licenses - HELD THAT:- Respectfully following the decision of the coordinate bench in assessee’s own case [2017 (8) TMI 225 - ITAT DELHI] we direct the learned assessing officer to grant assessee depreciation on the above software at the rate of 60% as relying on CIT Vs BSES Yamuna Powers Ltd.[2010 (8) TMI 58 - DELHI HIGH COURT]
Disallowance u/s 14A read with rule 8D - no satisfaction was recorded by the assessing officer having regard to the accounts of the assessee - HELD THAT:- AO failed to record any satisfaction with regard to the correctness of the claim of the assessee that it has not incurred any expenditure. AO did not cite any of the expenditure in the profit and loss account of the assessee, which is incurred by the assessee for earning of the exempt income. The satisfaction of the learned assessing officer as provided u/ss 2 of Section 14 A is a preliminary requirement for invoking the provisions of rule 8D of the income tax rules for making a disallowance u/s 14 A - in absence of any satisfaction recorded by the learned AO with respect to the examination of the books of account of the assessee to verify the correctness of the claim of the assessee, the disallowance u/s 14A cannot be sustained. Accordingly we direct the learned assessing officer to delete the disallowance
MAT Computation for disallowance u/s 14A - HELD THAT:- We direct the AO to exclude the amount of adjustment made u/s 14A of the Act r.w. Rule 8D of the Income Tax Rules, 1962 while computing the book profits u/s 115JB of the Act - See VIREET INVESTMENT (P.) LTD. [2017 (6) TMI 1124 - ITAT DELHI]
Short deduction of TDS - Addition u/s 40 (a) (ia) - facility maintenance advertisement and tour and travel for the reason that assessee has deducted tax at the source at the rate of 1 % instead of at the rate of 2% - HELD THAT:- Here the facts stated before us undisputedly shows that the assessee has deducted tax on the above sum the rate of one percent instead of 2% as held by the assessing officer. Therefore there is no failure of non-deduction of tax. If there is any offence or violation it is deduction of tax at lower rates compared to what is prescribed. The issue is squarely covered in favour of the assessee by the decision of the honourable Calcutta High Court in CIT versus SK Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH COURT]. In view of this ground of the appeal is allowed.
Disallowance of deduction u/s 10 A/10 B on account of income arising from sale of scrap - HELD THAT:- As noted from the assessment order that the learned assessing officer has treated this income from sale scrap as business income and not income from other sources. Therefore, it is profits of the business of the undertaking that are considered by the learned assessing officer himself. According to this, subsection 4 of Section 10 B the profit derived from export of article or things or computer software shall be the amount which bears to the profits of the business of the undertaking in the same proportion as the export turnover in respect of such article or things or computer software bears to the total turnover of the business carried on by the undertaking.
According to that provision profits of the business of the undertaking is required to be computed and thereafter the deduction is required to be granted in proportion to the export turnover to total turnover. For this reason, also we do not find any infirmity in the order of the learned dispute resolution panel giving direction to the learned assessing officer to delete the above disallowance. Accordingly, ground number 1 of the appeal of the learned assessing officer is dismissed.
Disallowance of depreciation on goodwill - asset purchase agreement dated 4/11/2009 and its subsequent amendment with American Express India private limited to acquire the global travel service centre as a going concern for a lump sum consideration - HELD THAT:- As stated by us earlier that this issue is not a new as the claim of the depreciation on the goodwill has already been allowed to the assessee in assessment year 2010 – 11 by the coordinate bench. Therefore respectfully following the decision of the coordinate bench in assessee’s own case, we dismiss this ground of appeal.
Disallowance of referral pay - assessee has failed to furnish evidence in respect of the services rendered - According to the learned dispute resolution panel the above expenditure is allowable u/s 37 (1) - HELD THAT:- No infirmity in the order of the learned dispute resolution panel because such expenditure was incurred by the assessee for the purpose of recruitment of its own employees. The payment for such referral was made to the employees of the company who were existing and who referred new employees. Therefore, the above expenditure is incurred wholly and exclusively for the purposes of the business. In view of this ground number, three of the appeal of the learned assessing officer is dismissed.
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2020 (8) TMI 731
Capital gains arising out of land acquisition compensation - date of accrual of capital gains for the purpose of Section 45 - Subject land had been given by the original owner on a lease for 20 years to a Government College - Whether chargeable to income-tax under Section 45 for the previous year referable to the date of award of compensation i.e., 29.09.1970 or date of notification for acquisition - question concerning date of accrual of capital gains - Whether High Court was right in taking the date of award as the date of accrual of capital gains for the purpose of Section 45 of the Act of 1961? - when did the transfer of the land in question, by way of compulsory acquisition, take place and when did the capital gains accrue to the assessee-appellant? - part of the land in question which was given on lease, possession of the College, after determination of the lease on 31.08.1967, was only that of a tenant at sufferance
HELD THAT:- Statements of law in decisions of Andhra Pradesh High Court [1986 (11) TMI 15 - ANDHRA PRADESH HIGH COURT], based on the enunciations by this Court in the case of Avinash Sharma [1970 (4) TMI 162 - SUPREME COURT], are rather unquestionable and need to be given imprimatur for application to the controversy like the present one.
To be more specific, in such cases, capital gains shall be deemed to have accrued: (a) upon making of the award, in the case of ordinary acquisition referable to Section 16; and (b) after expiration of fifteen days from the publication of the notice mentioned in Section 9 (1), in the case of urgency acquisition under Section 17.
Answer to Point No. 1 is clearly in the negative i.e., against the assessee-appellant and in favour of the revenue that on the facts and in the circumstances of the present case, transfer of the capital asset (land in question), for the purposes of Section 45 of the Act of 1961, was complete only on 29.09.1970, the date of award and not on 15.05.1968, the date of notification for acquisition under Section 4 of the Act of 1894; and hence, capital gains arising out of such acquisition have rightly been charged to tax with reference to the date of award i.e., 29.09.1970.
Effect of the decision of ITAT in relation to the other case of the assessee-appellant for the assessment year 1975- 1976 where the issue concerning date of accrual of capital gains was decided against the revenue with reference to the date of taking possession - Admittedly, the said decision for the assessment year 1975- 1976 was not appealed against and had attained finality. Hence, it has been argued on behalf of the appellant that it is not open for the revenue to question the similar decision of ITAT in the present case pertaining to the assessment year 1971-1972.
HELD THAT:- Matter involved in the said case pertaining to the assessment year 1975-1976 was taken to be an acquisition under the urgency provision contained in Section 17 of the Act of 1894 whereas, the acquisition proceedings in the present case had not been of urgency acquisition but had been of ordinary process where possession could have been taken only under Section 16 after making of the award. As noticed, the very structure of the ordinary process leading to possession under Section 16 of the Act of 1894 has been different than that of the urgency process under Section 17; and the said decision pertaining to the proceedings under Section 17 of the Act of 1894 cannot be directly applied to the present case.
Even if we assume that the stand of revenue in the present case is not in conformity with the decision of ITAT in relation to the assessment year 1975-1976, it cannot be said that revenue has no just cause to take such a stand. As noticed, while rendering the decision in relation to the assessment year 1975-1976, the ITAT did not notice the principles available in various decisions including that of this Court in Avinash Sharma [1970 (4) TMI 162 - SUPREME COURT] that even in the case of urgency acquisition under Section 17 of the Act of 1894, land was to vest in Government not on the date of taking over possession but, only on the expiration of fifteen days from the publication of the notice mentioned in Section 9(1). Looking to the facts of the present case and the law applicable, in our view, the revenue had every reason to question the correctness of the later decision of ITAT dated 29.06.1990 in the second round of proceedings pertaining to the assessment year 1971-1972.
Fact situation of the present case relating to the assessment year 1971-1972 is not similar to that of the other case of the appellant relating to the assessment year 1975-1976 and the revenue is not precluded from taking the stand that the transfer of capital asset in the present case was complete only on the date of award i.e., on 29.09.1970. Answer to Point No. 2 is also clearly in the negative i.e., against the assessee-appellant
Conclusion:- In the second round of proceeding, the AO had rightly assessed the tax liability of the appellant, on long-term capital gains arising on account of acquisition, on the basis of the amount of compensation allowed in the award dated 29.09.1970 as also the enhanced amount of compensation accrued finally to the appellant; and as regards interest income, had rightly made protective assessment on accrual basis.
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2020 (8) TMI 730
Penalty u/s. 271(1)(c) - non-disclosure of the capital gains, in the required column in the income tax report, for the relevant financial year - non disclosure of sale the lands and windmill - HELD THAT:- It is not in dispute that the assessee did not disclose about the sale of the lands and windmill in the return of income - as clear from the perusal of the return of income and in the relevant column, it is stated as ‘Nil’. The assessee relies upon the annual report and substantial portion of the report was read to us by the learned counsel to impress upon us that the assessee’s non-disclosure was bonafide and an inadvertent mistake.
Annual report is not a report, which is filed under the Income Tax Act - it is admitted that this annual report was never filed with the Income Tax Department. That apart, the Chartered Accountant has reported the captial gains as Nil and this has been signed by the Managing Director of the Company. If such is the factual position, it will not only be a case of filing inaccurate particulars, but also a case of concealment of income. The information came to the Department through the AIR, which was forwarded by the Registration Department and after verifying the same, when notice was issued under Section 143(2), the assessee, for the first time statef that due to inadvertence, they did not disclose the particulars relating to the capital gains. The above facts will clearly show that the assessee did not act bonafidely and the belated explanation sought to be offered deserves to be rejected.
One more attempt made by the assessee was 24 months after the assessment were completed by attempting to file a revised statement of income on 01.03.2017. This statement can never improve the case of the assessee nor exonerate them from penalty. Another contention advanced by M/s.S.Yogalakshmi is that the AO had not recorded his satisfaction that penalty proceedings have to be initiated, by relying to the decision in the case of D.M.Manasvi to support the argument that the enire circumstances should have been considered, more particularly, the financial distress to which the assessee was thrown.
As carefully perused the penalty order dated 25.09.2015 and we find that the Assessing Officer considered all the factual aspects raised by the assessee and rejected the same to be absolutely without bonafides.
As decided in MAK DATA P. LTD. [2013 (11) TMI 14 - SUPREME COURT] voluntary disclosure does not release the assesee from mischief of penalty proceedings under Section 271(1)(c) of the Act. Therefore, we find that the penalty order is a reasoned order.
Order passed by the Tribunal does not call for any interference and the Substantial Questions of law framed for consideration have to be answered against the assessee.
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2020 (8) TMI 723
Dismissal of appeal as not filling appeal in electronic form - assessee before the Ld. CIT (A) had to be filed manually on 29.04.2016 by the assessee because, as per the assessee, e-portal for filing the appeals was not functioning properly - HELD THAT:- Contention of the assessee is supported by the Circular issued by the CBDT dated 26th May, 2016 (Circular No. 20/2016) wherein it has been stated that EVC functionality of verification of eITA appeals was made operational from 12.05.2016 for individuals and from 19.05.2016 for other persons. Thus, undisputedly, the e-filing portal was not functioning on the date of filing of appeal by the assessee before the Ld. CIT (A) manually i.e. 29.04.2016.
CIT (A) chose to dismiss the appeal of the assessee for the sole reason that the appeal before him was not filed in the electronic form although even Circular No. 20/2016 of the CBDT fairly acknowledges that the functionality was operative only from 19.05.2016 in the assessee’s case - we fail to understand as to how the Ld. First Appellate Authority could have dismissed the assessee’s appeal for no fault on the part of the assessee. Assessee’s appeal filed electronically later on i.e. on 10.05.2017 is still pending before the Ld. CIT (A) - thus restore this appeal to the file of the CIT (A) and direct that this appeal be tagged along with the appeal filed electronically on 10.05.2017 and be considered as one appeal for passing a reasoned order on merits as per law after giving proper opportunity to the assessee to present its case. Appeal of the assessee stands allowed for statistical purposes.
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2020 (8) TMI 722
Deduction u/s 54F disallowed - As per CIT-A assessee cannot purchase any residential house other than the new asset within a period of one year after the date of transfer of the original asset - HELD THAT:- For triggering the provisions of the proviso (ii) to section 54F (1), the pre requirement is this that the assessee has purchased one more residential house other than the new asset within one year after the date of transfer of the original asset and this is not enough that some ownership right is acquired by him in such property within such time which has not accrued to him on account of purchase.
Hence, it has to be the case that there is such purchase by the assessee and mere acquisition of some right is not enough. In the present case, both persons i.e. the present assessee and his wife Smt. Alka Dev are stating that the purchase is by Smt. Alka Dev, wife of the assessee although in the purchase deed, name of the assessee is also there along with the name of Smt. Alka Dev and purchase consideration of this second residential property is paid by her out of the joint/her individual bank account and we have seen that she was having sufficient own funds in that joint bank account received as her share in sale proceeds of the shares and this claim is accepted by CIT (A) also in her case and that order of CIT (A) has attained finality because the appeal of revenue against this order of CIT (A) got dismissed by the tribunal because of low tax effect.
We delete the disallowance of the assessee’s claim for deduction u/s 54F made by the AO and confirmed by CIT (A). - Decided in favour of assessee.
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2020 (8) TMI 721
Exemption u/s 11 - charitable activity u/s 2(15) - A.O. observed that all the activities of the assessee were in the nature of trade, commerce and business - many members had given amounts more than ₹ 50,000/- and they would become beneficiaries as per Section 13(3)(b), exemption also stands withdrawn by applying provisions of Sections 13(1) and 13(2) - HELD THAT:- As decided in own case [2020 (7) TMI 543 - ITAT DELHI] no infirmity in the order of the CIT(A) in holding that the activities of the assessee are charitable in nature and the assessee is entitled to the claim of exemption u/s 11 of the IT Act. - Decided in favour of assessee.
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2020 (8) TMI 720
Reopening of assessment u/s 147 - notice issued at the old address of the assessee company and that too through affixture - non-issuance of notice under section 143(2) - HELD THAT:- There is no material available on record to show that the assessee had ever used the email ID rajkumar@mail.com. On the other hand, the snapshot of the MCA record available with the learned Assessing Officer, copy of which is filed at page 7 of the paper book, clearly shows that the email ID of the assessee is sagarpnp@hotmail.com. It is, therefore, difficult for us to hold that there is any proper service of notice under section 148 of the Act on the assessee. Further, there is no denial of the fact pleaded by the assessee that the assessee was being assessed by the ITO, Ward No. 5 (3) till the assessment year 2013-14 and the return of income for the assessment year 2013-14 was also filed before the, Ward number 5 (3).
Circumstance that is brought to our notice by the Ld. AR and on verification of the order sheet entries made by the learned Assessing Officer what we found is that the order sheet entries do not contain any entry regarding the issuance of notice under section 148 on 30/3/2015, nor about the service thereof, in as much as subsequent to the entry regarding the recording of reasons on 20/3/2015, the next entry is dated 3/6/2015 and the order sheet silent as to the proceedings that it took place on 30/3/2015.
Under order V, rule 17 of the code of civil procedure, the affixation can be done only when the assessee or his agent refuses to sign the acknowledgement or could not be found; whereas in this matter is not the case of the Revenue that the assessee is not traceable or anyone representing the assessee refused to receive the notice or to sign the acknowledgement thereof. In the circumstances we are of the considered opinion that the decision of the Hon’ble Apex Court in the case of M/s I-Ven interactive Ltd [2019 (10) TMI 785 - SUPREME COURT] has no application to the facts of the case.
Non Service of notice under section 143 - conjointly reading of section 148 (1) of the Act with section 139 (4) of the Act and section 144 of the Act makes it abundantly clear that pursuant to the notice under section 148 of the Act, if an assessee files a belated return or letter reiterating his earlier written then the learned Assessing Officer is bound to issue notice under section 143(2) of the Act if he frames the reassessment under section 144/143(3) of the Act. In the case on hand, there is no denial of the fact that by letter dated 29/12/2015, in response to the notice dated 12/6/2016 under section 142 (1) of the Act issue to the assessee, the assessee submitted before the, learned Assessing Officer that the return of income filed on 4/12/2015 was in response to the notice issued and section 148 of the Act. When once the assessee submitted so that in response to the notice under section 148 of the Act the return dated 4/12/2015 was filed, it is incumbent upon the learned Assessing Officer, if at all, he proceeds to frame the assessment under section 144/143(3) of the Act, to issue notice under section 143(2) of the Act, without which, in the assessment framed would not be legal. - Decided in favour of assessee.
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2020 (8) TMI 719
Deduction of Education Cess - claim of cess incurred during the year under consideration and which was claimed during the assessment proceedings - HELD THAT:- We observe that similar issue stands adjudicated by us in assessee’s own case for the Assessment Year 2012-13 to 2014-15 wherein we have decided in favour of the assessee allowing the claim of education cess to be allowed as an expenditure after relying the judgment of of Chambal Fertilizers and Chemicals Limited. [2018 (10) TMI 589 - RAJASTHAN HIGH COURT]
Thus we allow the claim of education cess as an expenditure - Decided in favour of assessee.
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2020 (8) TMI 718
Assessment u/s 153A - Addition on account of unexplained sundry creditors - treated as income of the assessee u/s 68 - HELD THAT:- The said amount was received by the assessee from different parties which have duly been reflected in assessee`s books of accounts. During the assessment proceedings the assessee submitted monthly summary ledger for all the parties from whom payments were received. All the credit balances have been duly reflected in assessee`s books and amounts were received in due course of business. As mentioned, the assessee is a property developer and agent engaged in buying, selling and developing of the plots and properties. The payments received by the assessee were the advance from the parties. Complete detail of the same was filed before Ld. AO during the course of assessment. AO while making this addition u/s 153A has nowhere referred to any seized or incriminating material or document.
We rely on the judgment of CIT vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] and therefore we are of the view that no addition can be made in an unabated assessment in absence of any incriminating material seized as a result of search.That being so, we decline to interfere in the order passed by the ld. CIT(A), his order, on this issue, is hereby upheld and ground no. 1 raised by the revenue is dismissed.
Admission of additional evidence - CIT-A admitting certain fresh evidence or materials produced by the assessee in contravention of the provisions of Rule 46A of I. T. Rules, 1962 - HELD THAT:- Two additional grounds, the ld CIT(A) had rejected the ground No.1 and did not admit it, hence there is no question of additional evidence. Ground No.2 raised by the assessee during the appellate proceedings relates to charging of interest under section 243A and 234B of the Act. Since it is a legal issue and emanated from assessment order, hence it can not be treated as additional evidence.
Taking into account the factual position narrated above there is no any violation of the provisions of Rule 46A of the Income Tax Rules, therefore we dismiss ground No.2 raised by the Revenue.
Disallowance of expenses claimed under the head “Purchases & Payment made for plots, lands & building” - HELD THAT:- Copy of audited profit and loss account was filed in which the purchase price of the plots purchased was duly disclosed. The details of purchases and payment details thereof were furnished.
The assessee also incurred expenses of₹ 45,90,000/- and claimed under land leveling expenses and a sum of ₹ 51,51,293/- claimed as Boundary Expenses. We note that this being assessment u/s 153A of the Act therefore the addition shall only be made on the basis of incriminating material found or seized. We have mentioned our detailed reasoning in para No. 9 of this order stating that in case of unabated assessment addition should not be made without any incriminating material. That being so, we decline to interfere in the order passed by the ld. CIT(A), his order on this issue is hereby upheld and ground no. 3 raised by the revenue is dismissed.
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2020 (8) TMI 717
Rectification of mistake - Miscellaneous application beyond limitation period as provided u/s 254(2) - HELD THAT:- There is nothing available on record which suggest that the order so dispatched at given address has been returned back unserved by the postal department. Therefore, it is a case where the matter has been pronounced in the open Court on the same day it was heard and thereafter, the order was dispatched and duly delivered to the assessee. It is also a fact that the order has also been uploaded on the Tribunal’s website as soon as the same was pronounced.
Contention advanced by the AR that the order passed by the Coordinate Bench has not been received by the assessee cannot be accepted. The provisions of section 254(2) has prescribed the limitation period of six months of moving the application from the end of the month in which the order is passed, therefore, the present miscellaneous application filed belatedly is not maintainable. The limitation period is provided in the Act itself and there is no provision for condonation of delay, if any, in filing the miscellaneous application and consequently, the Tribunal has no jurisdiction/power to condone the delay in filing the miscellaneous application.
Accordingly, when there is no provision for condonation of delay for filing of the miscellaneous application, then the miscellaneous application filed belatedly is not maintainable being barred by limitation provided under section 254(2) of the Act. Miscellaneous application so filed by the assessee is dismissed.
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2020 (8) TMI 716
Scope of limited scrutiny under CASS - additional ground that the Assessing Officer grossly erred in exceeding his jurisdiction in making huge disallowances on issues which were not the basis for initiating Limited Scrutiny - HELD THAT:- From the perusal of Assessment order, it can be seen that the Limited Scrutiny was conducted for reasons:- Depreciation claimed at higher rates/higher additional depreciation claimed and Mismatch in amount paid to related persons u/s 40A(2)(b) reported in Audit Report and ITR.
Thus, the scope of limited scrutiny was properly taken into consideration by the Assessing Officer while making addition in respect of the above mentioned reasons. Therefore, the additional ground taken by the assessee does not sustain. As the scope of assessment order does not override the reasons mentioned in the limited scrutiny, additional ground taken by the assessee is dismissed.
Business expenditure in respect of payment of royalty u/s 37 disallowed - HELD THAT:- Transaction under reference was a commercial arrangement between two parties which was entered into during AY 2015-16. No royalty was paid till a license agreement dated 22.07.2014 was entered into between the assessee and the proprietor ship concern of Ms. Rai, namely Indian Inc. As per the agreement, a payment of 2% of net revenue was to be made by the assessee to Indian Inc. on account of royalty for the use of the name “Indian Inc.”. The tax was duly deducted at source and deposited under Section 194J of the Income Tax Act, 1961. Besides this, Ms. C.E. Rai had offered the said amount in here individual income tax return where she was taxed at the rate of 34.61% whereas the tax rate applicable for the company was 33.06%. All these factual aspects were not at all disputed by the Revenue authorities. Merely on the ground that trademark was earlier i.e. prior to present assessment year not registered cannot be the ground for making disallowance. In fact, in the earlier assessment years, the said expenditure was allowed by the Revenue. Thus, the Assessing Officer as well as the CIT(A) was not correct in disallowing the said claim of business expenditure in respect of payment of royalty under Section 37 - Decided in favour of assessee.
Disallowing depreciation on the new office building - use of property for business purposes - HELD THAT:- The fact remains that property was not fit for business purposes till March, 2015. In fact the letter dated 23.03.2015 was addressed to the builder stated that basic amenities was not completed such as Lift and other facilities. Besides this the assessee has not supported by any documents on record its contention that the assessee started using the new office as a warehouse and also for the purpose of display of samples through the visits of overseas buyers. So the contention of the assessee that the property was in use, does not survive. The Assessing Officer rightly rejected the claim of depreciation to the assessee. - Decided against assessee.
Disallowance in respect of travel expenses - Proof of expenditure for business purpose - HELD THAT:- It is pertinent to note that the disallowance in respect of travel expenses was made by the Assessing Officer on ad-hoc basis. CIT(A) also notes that there is travel expenses for business purposes. From the perusal of the records it can be seen that all the relevant evidence was brought on record by the assessee before the Assessing Officer as relates to the said expenses was done for business purpose only. Thus, the Assessing Officer as well as the CIT(A) was not right in disallowing the travel expenses - Decided in favour of assessee.
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2020 (8) TMI 715
Exemption u/s 11 denied - property which was acquired by utilising the loan availed from the bank by the Appellant Trust - assesse-trust was registered u/s.12AA - assessee was assessed as AOP - HELD THAT:- The assessee is paying interest on said loans and also repaying principal amount out of its own funds. The factum of Mrs. Mercy Latha standing personal guarantor to the said loan as well offering of personal properties as collateral securities to secure said loan shall also be considered by AO in denovo assessment to arrive at decision whether the assessee has infringed provisions of Section 13(1)(c), 13(1)(d) and 13(2) of the 1961 Act.
The post acquisition activities such as long term lease granted, utilization of said land, approvals obtained from competent authorities in the name of assessee-trust as well status of construction of School Building and amount spent by assessee for construction of School Building shall also be considered by AO in denovo assessment, before coming to conclusion whether any benefit was derived by Managing Trustee out of said land.
The said land is incorporated in the Balance Sheet on asset side as ‘Leasehold Land’-₹ 4,00,00,000/- and an amount of ₹ 4,00,00,000/- was borrowed by assesee from UBI in September, 2015, which was later transferred to bank account of Mrs. Mercy Latha in the first week of October 2015. As per Sale deed dated 28.10.2015, the land was acquired for ₹ 3,50,00,000/- by Mrs. Mercy Latha , while Mrs. Mercy Latha has got transferred ₹ 4,00,00,000/- from assessee-trust and the said land is capitalized at ₹ 4,00,00,000/- in the books of accounts of assessee-trust. The differential of ₹ 50,00,000/- retained by Mrs. Mercy Latha was not explained by the assessee-trust neither the same was enquired by authorities below in first round of litigation and whether the said differential leads to benefit of ₹ 50 lacs derived by Mrs. Mercy Latha as the said amount was not refunded by Mrs. Mercy Latha to the assessee-trust, as is emerging from records. This aspect also need to be carefully enquired by the AO and assessee is directed to place on record before the AO, complete explanation of differential amount of ₹ 50 lacs retained by Mrs. Mercy Latha .
The assessee is directed to explain this differential of ₹ 50 lacs before the AO in set aside denovo assessment proceedings. It is also made out that the bankers were insisting on the registration of property in the name of Mrs. Mercy Latha and hence land was registered in her name , but perusal of sale deed shows that Mrs. Mercy Latha made first payment for acquiring the aforesaid land way back in 28.11.2014 when two cheques, firstly of ₹ 25 lacs and secondly of ₹ 5 lacs was given to the seller of land by Mrs. Mercy Latha. The agreement to sale entered into at the time of advancing of ₹ 30 lacs is not brought on record. The assessee is directed to provide explanation to that effect before the AO in set aside proceedings. This aspect is also to be looked into by AO before framing denovo assessment. The learned counsel for the assessee has referred to provisions of Section 31 of Tamil Nadu Recognised Private Schools (Regulation) Act, 1973 and stated that the procedure for getting permission for purchase of property is very cumbersome .
In our considered view, difficulty in complying with procedure is no excuse unless assessee is able to demonstrate impossibility of performing an act and that too under these circumstances also, execution in deviation with provisions of statute has to be within the realm of legality as illegality cannot be perpetuated. The assessee is directed to submit detailed explanation to that effect before the AO in denovo assessment proceedings.
In view of additional evidences filed by assessee for the first time before the tribunal, we are inclined to restore the matter back to the file of AO for framing denovo assessment. We clarify that the AO is free to make such enquiries as may deem fit to decide the issue denovo in set aside proceedings. The AO will allow assessee to file necessary evidences in its defense in support of its contentions. - Appeal of the assessee is allowed for statistical purposes
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2020 (8) TMI 714
Addition u/s 68 - Unexplained share capital receipt - CIT(A) held that since no business activities are carried out by the assessee company and the assessee company could not earn any income from many of its source of income or any business activities carried by it, the share application money brought by the above investor companies cannot be considered as assessee’s own money earned by it by any source and the provisions of section 68 of the Act cannot be invoked - HELD THAT:- The way of acquaintance of these share applicant entities with the affairs of the assessee company, the facts that motivated these entities to purchase the shares of the assessee company at a huge premium, particularly when the assessee did not commence the business and does not possess any assets of considerable net worth, the measures of security for such investment obtained by such entities, the modus operandi of the agreement between the assessee and such entities - all these things will have to be get clarified, not by papers, but by examination of the persons who run and manage these entities.
Orders of the authorities below reveal that the assessee has not complied with the requirements of the learned Assessing Officer in the exercise of forming satisfaction as to the creditworthiness of the share applicants or the genuineness of the transaction. Mere paperwork by the assessee does not take the authorities anywhere, when the learned Assessing Officer suspected the real existence of the entities that applied and paid for share application and share premium and insisted that a higher degree of proof is required in that respect.
In the circumstances of the case, in view of the decisions of the Hon’ble Apex Court in the case of PCIT vs. NRA Iron and Steel (P) Ltd [2020 (2) TMI 273 - SC ORDER] we are of the considered opinion that the action of the learned Assessing Officer was legal and the inference drawn by him that the assessee had routed their own money in the books of accounts through the conduit of investor companies is justified. On this premise, we agree with the Revenue and while setting aside the impugned order, restore the addition made by the learned Assessing Officer under section 68 - Decided against assessee.
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2020 (8) TMI 729
Stay of demand - Recovery of outstanding tax demands - Demanded to remit 20% of the disputed taxes - HELD THAT:- A perusal of the impugned orders would show that the orders are nonspeaking and merely call upon the petitioners to remit 20% of the disputed taxes without reference to the tri-fold aspects of prima facie case, financial stringency and balance of convenience.
Evidently, the matter needs more application of mind than what is seen above. In the aforesaid circumstances, the impugned orders are set aside. Orders shall be passed afresh by the 2nd respondent after hearing the petitioners either virtually or by way of a physical hearing as may be mutually convenient to the parties within a period of six (6) weeks from date of uploading of this order. Till such time, recovery proceedings are kept in abeyance.
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2020 (8) TMI 713
Validity of assessment u/s 153C - assumption of jurisdiction by Ld.AO under section 153C along with additions made in respective years - HELD THAT:- This issue has been decided by this Tribunal in case of Sh.P. Vittalnath Ready [2020 (3) TMI 572 - ITAT BANGALORE] upholding the validity of proceedings under section 153C and held upholding the validity of proceedings under section 153C.
In both these cases are identical arising out of the same search conducted on the group, we do not find any reason to deviate from the above findings. We also note that Ld.CIT(A) held that materials found belonging to assessee was found during course of search, from searched premises, and therefore, notice issued under section 153C of the Act is valid. - Decided against assessee.
Addition of estimation of business Income - HELD THAT:- For A.Y:2013-14 We note that this issue has been dealt with by this Tribunal while deciding this issue observed that for assessment year 2013-14, time period for issuing notice under section 143 (2) expired before the date of search and that the assessment had not abated.
As AR submitted that issue is identical. It is also been alleged by Ld. ar that no incriminating material was found during search relating to assessment year 2013-14, we therefore direct Ld.AO to verify the same and consider the claim of assessee. In the event it is found that time period for issuance of notice under section 143 (2) stood expired, and that no incriminating materials were found, no addition could be made under section 153C.
Estimation of income - Tribunal partly allowed by limiting the estimation to 8% of gross receipts - HELD THAT:- As decided in own case [2020 (3) TMI 572 - ITAT BANGALORE] on careful consideration of facts and taking a reasonable approach, it would be met end of justice, if the profit rate were applied to 8% being equal to presumptive rate under section 44AD of gross receipts as against estimation @ 8.5% by Ld. CIT (A). The AG is, therefore, directed to recalculate the addition of business income by adopting 8% of gross receipts. This ground of appeal is therefore, partly allowed.
Addition being 1/3rd of cash seized at the time of search - HELD THAT:- As decided in [2020 (3) TMI 572 - ITAT BANGALORE] assessee has been showing substantial income over the years and ate of business requires holding cash in hand for making weekly payments to pourakarmikas, diesel etc.
Considering these facts, it can be assumed that cash was available out of known sources, which can be considered as explainable out of cash withdrawals made prior a week of search date. Therefore, we are of the view the AO was not justified in making this addition, hence, the addition is directed to be deleted.
Addition being 1/3rd of gold seized at the time of search - HELD THAT:- As decided in [2020 (3) TMI 572 - ITAT BANGALORE] no addition can be made in the hands of the assessee by treating 1/3rd of seized jewellery in his hand as jewellery was belonging to entire family members. Therefore, if at all if any addition to be made it is to be equally divided among family members. Further, the assessee has only claimed jewellery of 261 grams as belonging to him, which has been reflected in balance sheet as on 31.03.2011 hence, no addition could be made in the hands of the assessee. Further, considering the CBDT Circular which provides jewellery holding by female member and male members and children in particular quantity as not be served meaning thereby as explained, we are of the considered opinion that no addition can be sustained on this account. Accordingly, 1/3rd addition made in the case of the assessee on account of jewellery is deleted.
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2020 (8) TMI 712
TP Adjustment - Comparability Analysis and Determination of Arm's Length Price - HELD THAT:- M/s. C G VAX Software & Exports Limited is not only engaged in the business of computer software development, but also engaged in product manufacturing process, whereas the present assessee is not in product manufacture activity. M/s. C G VAX Software & Exports Ltd. owns huge intangible assets and also engaged in outsourced product development. In view of the foregoing reasons, we hold that the said company cannot be considered for inclusion in the list of comparables.
Comparability on the basis of turnover filter - decisions cited by the learned DR before us cannot be the basis to hold that high turnover is not relevant criteria for deciding on comparability of companies in determination of ALP under the Transfer Pricing regulations under the Act. For the reasons given above, we uphold the order of the CIT(A) on the issue of application of turnover filter and his action in excluding companies by following the ratio laid down in the case of Genisys Integrating [2011 (8) TMI 952 - ITAT BANGALORE].
Negative working capital adjustment - Negative working capital adjustment shall not be made in case of a captive service provider as there is no risk and it is compensated on a total cost plus basis.
MAT Credit not allowed - At the time of hearing, the ld. counsel for the assessee submitted that the MAT credit would be consequential to the decision rendered in AY 2009-10 , 2010-11 & 2011-12 with regard to exemption u/s. 10A of the Act in those years - HELD THAT:- We accept the prayer of the ld. counsel for the assessee and direct the AO to given consequential relief based on the outcome of the earlier assessment years. Ground is accordingly treated as allowed for statistical purposes.
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2020 (8) TMI 711
Revision u/s 263 - claim of exemption u/s 10(38) was allowed to the assessee without any enquiry - HELD THAT:- On careful examination of the whole issue it is apparent that the ld AO did not carry out any enquiry with respect to the long term capital gain claimed by the assessee u/s 10(38) - On careful examination of the order passed by the learned principal Commissioner of income tax, we found that, necessary enquiries were made by PCIT on the issue, therefore, on this account no fault could be found with the order u/s 263 - when no inquiries have been made by the learned assessing officer, for the reason for which the case of the assessee was selected in scrutiny, the order is erroneous and prejudicial to the interest of the revenue. This issue is squarely covered in favour of the revenue wherein identical facts and circumstances of the case the action of the PCIT in absence of revisionary order u/s 263 of the Act was upheld in POOJA GUPTA VERSUS PR. CIT, NEW DELHI [2019 (1) TMI 1630 - ITAT DELHI].
We uphold the action of the ld PCIT in holding that the order passed by the ld AO is erroneous and prejudicial to the interest of the revenue. Accordingly, all the grounds of appeal of the assessee revolving on the challenge to the order passed u/s 263 of the income tax act by the learned principal Commissioner of income tax are dismissed.
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2020 (8) TMI 727
Income Tax Refund - Why refund is not being processed for years together, when undisputedly the amount being claimed by way of refund is an amount realized from the assessee under coercion and misrepresentation? - whether the amount realized from the assessee is de hors the scheme of the Income Tax Act read with the circular issued by the CBDT from time to time? - Liberty to approach the competent authority under the Income Tax Department - petitioner involuntarily deposited an amount with the Income Tax Department in March, 2009 threatened by the attachment of bank account and prosecution on the basis of survey conducted by the Department towards non-deduction of tax at source under Section 194 C - HELD THAT:- Having considered the limited prayer made on behalf of the petitioner now, in the light of the bare facts and the prayer made in the writ petition noted above, we do not intend to get into the merits of the case at this stage. Petitioner, if so advised, may approach the competent authority for redressal of his grievance in accordance with law. In case, such an application is made, the competent authority under the Income Tax Department may endeavour to take decision thereupon within reasonable time preferably within 12 weeks from the date of receipt of copy of this order.
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2020 (8) TMI 710
Cash deposit in the bank account - sufficient cash was not in hand as per cash book - AO made an addition u/s 69 read with section 115BBE - assessee has contended before the LD. CIT (A) that without giving show cause notice and opportunity to explain the availability of cash, the addition made by the AO - CIT-A deleted the addition - HELD THAT:- AO has made the addition on the basis of copy of the cash balance in the cash book on a particular date. It is manifest from the assessment order that the AO has not issued any show cause notice to the assessee or even asked the assessee to explain the source of cash deposit in the bank account.
Thus the entries made in the cash book from 14.11.2015 to 17.11.2015 were considered by the LD. CIT (A) and it was found that it was only a genuine mistake on the part of the Data Entry Operator who has made the entry of 17.11.2015 instead of 16.11.2015. As no contrary material brought before us, we do not find any error or illegality in the impugned order of LD. CIT (A).
Gain on sale of land - LTCG or business income - HELD THAT:- Initially the assessee has invested in the land in question, however, subsequently when the assessee has decided to develop the residential colony on this land then the capital asset has been converted into stock-in-trade. Bifurcation of the profit arising from the sale of the plots of land ought to have been based on the FMV on the date when the assessee has decided to develop the land into residential colony. The timing and date of such conversion is taken by the LD. CIT(A) as on 1st day of financial year 2015-16 i.e. 01.04.2015. The said date is not the actual date coming from the relevant material/record. The preparation of the site plan for developing the colony shall be the actual date of conversion of the agricultural land into stock-in-trade.
CIT(A) has not examined this issue as on when the capital asset was converted into stock-in-trade. The LD. CIT(A) has just taken the 1st day of previous year relevant to assessment year as the date of conversion which is not based on any documentary evidence. Computation of capital gain as well as the business income arising from the sale of land is dependent on the fair market value of the undeveloped land in question on the date when the assessee decided to develop the land. The documentary evidence on this point would be the lay out plan prepared by the assessee or any other document which was prepared by the assessee for the purpose of development of the land. Therefore, the bifurcation and computation of Long Term Capital Gain and Business income requires a proper verification and re-consideration.
Accordingly we set aside this limited issue to the record of the AO for determining the actual date of conversion of the capital asset into stock-in-trade and then apply the provisions of section 45(2) of the IT Act to bifurcate the profit into Long Term Capital Gain and Business income.
Deduction under section 54F - CIT (A) has not considered this issue. AO has denied the claim solely on the ground that the profit on sale of the land is Business income whereas the LD. CIT (A) has not adjudicated this issue while passing the impugned order. Accordingly the AO is directed to examine the claim of deduction under section 54F and then decide the same after giving an opportunity of hearing to the assessee.
Income arising from sale of shops - CIT (A) has allowed the claim of the assessee as Income from Capital gain, we find that once the assessee has decided to develop the land by construction of shops for the purpose of sale, then a different para meter cannot be applied as applied in the case of development of land in a residential colony. Accordingly, the profit arising from the sale of shops is also required to be bifurcated as per the provisions of section 45(2) - AO has to compute the capital gain as well as the Business income in view of our observations as regards the conversion of the agricultural land into residential colony. Appeal of the revenue is partly allowed for statistical purposes.
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2020 (8) TMI 709
Penalty levied u/s. 271(1)(c) - Estimation of income - bogus purchases - adhoc estimation was made by the Assessing Officer restricting the profit element in the purchases @12.5% - HELD THAT:- As decided in Shri Deepak Gogri [2017 (11) TMI 1857 - ITAT MUMBAI] there is no concealment of income or furnishing of inaccurate particulars as the profit element was determined by way of adhoc estimation. Coming to the interest, the assessee furnished complete details in the return of income and made a claim and simply because the claim is denied and cannot lead to furnishing of inaccurate particulars or concealment of income.
No allegation by Assessing Officer that the assessee failed to disclose the particulars relating to its claim in the return of income. Delete the penalty levied u/s. 271(1)(c).
Similar view has been taken by the Hon'ble Delhi High Court in the case of CIT v. Aero Traders Pvt. Ltd. [2010 (1) TMI 32 - DELHI HIGH COURT] wherein the Hon'ble High Court affirmed the order of the Tribunal in holding that estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars.
In the case on hand the Assessing Officer has only estimated the Gross Profit on the alleged non-genuine purchases without there being any conclusive proof of concealment of income or furnishing inaccurate particulars of such income. Thus, we do not observe any infirmity in the order passed by the Ld.CIT(A) in deleting the penalty u/s. 271(1)(c) - Decided in favour of assessee.
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2020 (8) TMI 728
TDS u/s 194N - Consequences of failure to deduct or pay u/s 201 - cash withdrawal exceeding Rupees One Crore in an year from the bank account - writ petitioners herein are Co-operative Banks engaged in the business of banking and that they had failed to comply with the terms of Section 194N of the Act and that the explanation given by them was not satisfactory - HELD THAT:- No fault the respondents for having issued show cause notices to the writ petitioners for not having complied with Section 194N of the Act. But then, the enquiry could have been held only after the commencement of the assessment year and not in the previous year itself.
Not agree with the stand of the writ petitioners' counsel that the volume of transaction that had taken place prior to 01.09.2019 should be ignored - as brought to notice computation of tax has been made only with effect from 01.09.2019 and there has been no levy on the transaction before the cut off date. The Central Board of Direct Taxes had issued a clarification that the provision having come into effect from 01.09.2019 any cash withdrawal prior to the said date will not be subjected to TDS.
Since the threshold of One Crore Rupees is with respect to the previous year, with reference to the assessment year 2020-2021, the cash withdrawal for triggering Section 194N of the Act shall be counted from 01.04.2019. The writ petitioners have not questioned the validity of the provision. The provision employs the expression “Previous year”. With reference to the assessment year 2020-2021, the previous year would obviously mean the period commencing from 01.04.2019 to 31.03.2020.
A taxing provision has to be understood in a plain manner. Such an application of the provision will not amount to retrospective operation. If TDS was levied even on transactions that had taken place prior to 01.09.2019, then, that would definitely be illegal, but that is not the case here. Therefore, Iustain the stand of the learned standing counsel that to calculate the threshold limit of One Crore rupees, the transactions that had taken place with effect from 01.04.2019 will have to be taken into account, but actual levy of tax will be on the cash withdrawals that had taken place with effect from 01.09.2019.
Also sustain the stand of the learned Standing counsel that the department need not wait till the time limit for the assessees to file their returns for the assessment year gets over. It is open to the department to initiate action against the deductors, who have failed to act as per the requirements under Section 194N of the Act, as they are also deemed assessees. But then, when the enquiry is conducted, it is open to the noticees, who are to be treated as assessees in default to place materials before the Assessing Officer that the amounts received by the recipients do not represent income at their hands. If by then, the assessees had also filed their returns and the case falls under the proviso to Section 201(1) of the Act, the writ petitioners who have failed to deduct cannot be fastened with any liability.
Since the Assessing Officers have not taken into account the entire scheme of the Act and had proceeded at breakneck speed, we are constrained to interfere with the impugned proceedings and they are accordingly quashed. The matters are remitted to the file of the respective jurisdictional Assessing Officers. Writ Petitions stand allowed.
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2020 (8) TMI 726
Validity of reopening of assessment u/s 147 - whether mere audit objection could not form basis to reopen the completed assessment? - CIT(A) dismissed the assessee's appeal insofar as the reopening of assessment is concerned, and on the merits, the CIT(A) held that the assessee has not raised any ground of appeal that is to presume that the assessee has not pressed the ground of addition made by the AO -Tribunal remanded the matter to CIT(A) to adjudicate the issue on merits - HELD THAT:- Tribunal ought to have adjudicated all the grounds raised by the assessee that is whether the reopening is valid in law and whether there were materials in the hands of the Assessing Officer for reopening the assessment. So the assessee is right in contending that the audit objection cannot be the basis for reopening. The Assessing Officer has not recorded any reasons as to why he came to the conclusion that the income chargeable to income tax has escaped assessment and what was the belief which led to issuance of notice under Section 148 of the Act.
Factually, whether the assessee had produced the books of accounts and such other material as we find that the Tribunal did not consider these issues. We deem it appropriate to set aside the order passed by the Tribunal and remand the matter back to the Tribunal for fresh consideration.
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2020 (8) TMI 708
Exemption u/s 11 - rejection of application of assessee for grant of registration u/s.12A - CIT(E) rejected the application of the assessee holding that the assessee trust does not exist for the purpose of charity, rather it is working commercially, which is defeating its own aims and objectives - HELD THAT:- On perusal of the order of CIT(E), we find that the CIT(E) in its order observed that the assessee trust does not exist for the purpose of charity, rather it is working commercially, which is defeating its own aims and objectives.
Considering the prayer of assessee we provide one more opportunity to the assessee to substantiate its claim before the CIT(E) with proper evidence/documents and the CIT(E) is directed to consider the submission of the assessee and pass the order accordingly after providing reasonable opportunity to the assessee. - Decided in favour of assessee for statistical purposes.
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2020 (8) TMI 707
Deduction u/s. 80IB(10) - CIT- A deleted the addition - Revenue made out a case that the order of CIT(A) is not a speaking order - HELD THAT:- Regarding speaking order allegation of the ld. DR, As AR submitted that the order of Town Planning Authority/Collector is longest with approx 80 pages and the facts and findings are discussed throughout the order of CIT(A). Para 5.3.3 cannot be read in isolation. In response, the ld. DR for the Revenue submitted that the note furnished by the ld. AR may be sent to the CIT(A) for fresh adjudication after appreciating of the facts now given by the ld. DR.
We deem it appropriate to remand this issue back to the file of CIT(A) for considering this issue afresh in the light of the submissions made by the parties. Accordingly, the grounds raised by the Revenue are allowed for statistical purposes.
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2020 (8) TMI 706
Addition u/s 14A - Whether the provisions of section 14A are applicable even when no exempt income is earned? - CIT-A deleted the addition - HELD THAT:- As decided in CHEMINVEST LIMITED VERSUS COMMISSIONER OF INCOME TAX-VI [2015 (9) TMI 238 - DELHI HIGH COURT] and M/S. CHETTINAD LOGISTICS PVT. LTD. [2017 (4) TMI 298 - MADRAS HIGH COURT] questions of law, which could have arisen are already covered by the judgment of a Co-ordinate Bench of this Court rendered in M/s.Redington (India) Limited case [2017 (1) TMI 318 - MADRAS HIGH COURT]. Recently, the Hon'ble Supreme Court [2018 (7) TMI 567 - SC ORDER] dismissed the SLP filed against the decision of the High Court wherein it was held that section 14A of Act cannot be invoked where no exempt income was earned in the relevant year. - Decided in favour of assessee.
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Customs
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2020 (8) TMI 705
Power of Central Government to impose quantitative restrictions - Import of Peas - Powers u/s 3 versus u/s 9A of the FTDR Act - HELD THAT:- The impugned notifications were in the nature of ‘quantitative restrictions’ under Section 9A of the FTDR Act, which could be only imposed by the Central Government after conducting such enquiry, as is deemed fit, and on being satisfied that the “goods are imported into India in such quantities and under such conditions as to cause or threatens to cause serious injury to domestic industry.” Further, in exercise of power under sub-section (3) to Section 9A the Central Government has framed the Safeguard Measures (Quantitative Restrictions) Rules, 2012, that prescribe mandatory and detailed procedure for initiation, investigation, hearing to parties and adjudication by the Authorised Officer, which statutory mandate has not been followed. Under sub-rule (4) to the above Rule, the Authorised Officer has power to initiate suo moto action if he is satisfied with the information received from any source that sufficient evidence exits regarding increased imports; serious injury or threat of serious injury to the domestic industry; and causal link between increased imports and serious injury or threat of serious injury to the domestic industry.
By another order dated 2nd July, 2020 the Union of India was directed to file an affidavit clearly stating whether the impugned notifications are in the nature of ‘quantitative restrictions’ and if so whether the procedure under Section 9A of the FTDR Act read with Safeguard Measures (Quantitative Restrictions) Rules, 2012 had been followed and to produce the relevant record thereof.
Challenge to the role and authority of the DGFT to issue the Notifications and Trade Notice and interpretation of the words “total quantity” - HELD THAT:- The effect of the Notifications, as noticed and beyond doubt, is to bring the specified commodities from free to the restricted category and therefore the imports in question would require a prior authorisation for import. The requirement of licence is nothing but authorisation. Therefore, in terms of paragraph 2.10, the imports of the specified commodities would only be by the ‘actual user’, unless the ‘actual user’ condition was specifically dispensed with or diluted by the DGFT. The Directorate by specifying that the licence would be issued to the miller or refiner has, therefore, just clarified that the ‘actual user’ alone will be permitted to import the restricted goods mentioned in the notification for which a prior authorisation or licence is required. The importers are traders and it is not the case of any of the importers that they are the ‘actual users’. Further, none of the importers have applied for a licence or authorisation for import of the restricted commodities - ‘Actual user’ condition, therefore, applies by default when imports require an authorisation. However, the DGFT can specifically dispense with or dilute the ‘actual user’ condition.
Section 9A of the FTDR Act and it’s interpretation - General Agreement on Tariff and Trade – 1947 and 1994 - HELD THAT:- The Panels are normally composed of three persons, and in exceptional cases five, who are well qualified government or non-government individuals selected from a roaster of persons suggested by WTO members. The panel members serve in their individual capacities and not as representatives of WTO members. The Appellate Body reviews Panel decisions. The Appellate Body is a standing institution composed of seven persons appointed by DSB for four-year term. Members of the Appellate Body must be persons with recognised authority with demonstrated expertise in law and international trade who are not affiliated with any government. Membership of the Appellate Body is broadly representative of the membership of the WTO. The procedure adopted for the dispute resolution mechanism is to facilitate prompt settlement of situations with the objective and purpose that the ‘Marrakesh Agreement’ is preserved and not nullified or impaired.
Obligations of the contracting party and effect of international treaty, namely, GATT-1994 on the domestic law - HELD THAT:- Where the treaty or portion thereof become a part of the domestic law by ‘act of transformation’, it is obvious that only the part incorporated or transformed into domestic law is invocable and justiciable and not the parts that are not codified into domestic law. However, invocability can embrace several ideas which are intertwined and is of specific concern in cases of constitutions allowing direct application. Here ‘invocability’ is a generic term which means to embrace a small inventory of means of judicial control over the use in a particular law suit of the direct applicability of the treaty. As in case of ‘act of transformation’, even in direct application cases, some jurisdictions accept the principle of partial direct application and, therefore, the treaty is directly applicable for some purposes and not others.
While interpreting the domestic law enshrining Human Rights (and sometimes environment issues) this Court on some occasions has relied on international conventions and treaties where the terms of any legislation are absent, not clear or are reasonably capable of more than one meaning. In such cases, where there are statutes, rules etc. the meaning which in consonance with the treaties can be relied upon, for there is a prima facie presumption that the Parliament did not intend to act in breach of international law, including State treaty obligations. Part-III of the Indian Constitution a-priori incorporates and recognises the Human Rights, consequently recourse to international conventions can be made to interpret and borrow explicit terminologies and nuances to bailiwick Human Right jurisprudence. However, in the present case we are examining an economic and fiscal legislation or rather economic policy decision taken by the Union of India.
In the affidavit filed on 6th July 2020, with reference to Section 9A of the FTDR Act, the Union of India has stated that the said section is attracted only when the goods are imported into India in increased quantity and under such conditions as to cause or threaten to cause serious injury to domestic industry. Section 9A is enacted as a safeguard mechanism in terms of Article XIX of the GATT-1994 and Article II of the WTO Agreement on Safeguards vide the Amendment Act, 2010. The notifications under challenge have been issued within the express terms of Section 3 of the FTDR Act which permits the Central Government to impose restrictions without any qualification of the nature specified in Section 9A. Power of the Central Government to restrict imports to limited quantities under Section 3 and quantitative restrictions under Section 9A of the FTDR Act are completely distinct and have no connection or interplay. The power under Section 3(2) of the FTDR Act is of a wide amplitude. Reference is also made to Rule 5(2) to assert that there is necessity of evidence that the imports had increased as a result of ‘unforeseen developments’ in addition to the necessity for evidence disclosing serious injury or threat of serious injury to domestic industry and a causal link between imports and serious injury. The restrictions have been imposed not due to increased quantities of imports but to prevent panic disposal by farmers as the prices of Gram would come down.
Interpretation of Sections 3 and 9A of the FTDR Act - HELD THAT:- The Central Government i.e. the Union of India has been given the necessary discretion and election with regard to framing of policies for import and export of goods, services and technology. Therefore, implementation of GATT-1994, including Article XI, is left to the Central Government by means of delegated legislation - Clause (2) of Article XI of GATT-1994 states that provisions of paragraph (1) shall not extend to three specified situations as stated in sub-clauses (a), (b) or (c). Clause (c) deals with import restrictions on any agricultural or fisheries product, imported in any form necessary for enforcement of governmental measures specified therein. Similarly, Article XII of GATT-1994 states that notwithstanding the provisions of paragraph (1) of Article XI, any contracting party, in order to safeguard its external financial position and its balance of payments, may restrict the quantity or value of merchandise permitted to be imported, subject to the provisions of paragraphs of that Article.
Notwithstanding Section 9A, the Central Government continues and has authority to impose quantitative restrictions by an order under Section 3(2) of the FTDR Act. Principle of Lex specialis derogat legi generali, therefore, is not applicable to the case in hand - Section 9A has to be interpreted as an escape provision when the Central Government i.e. the Union of India may escape the rigours of paragraph (1) of Article XIX of GATT-1994. Section 9A is not a provision which incorporates or transposes paragraph (1) of Article XI into the domestic law either expressly or by necessary implication.
The impugned notifications would be valid as they have been issued in accordance with the power conferred in the Central Government in terms of sub-section (2) to Section 3 of the FTDR Act. The powers of the Central Government by an order imposing restriction on imports under sub-section (2) to Section 3 is, therefore, not entirely curtailed by Section 9A of the FTDR Act - In the present case, this Court is not called upon to decide and examine the obligations of the Contracting Parties in terms of GATT-1994.
The impugned notifications and the trade notices are upheld and the challenge made by the importers rejected. The imports, if any, made relying on interim order(s) would be held to be contrary to the notifications and the trades notices issued under the FTDR Act and would be so dealt with under the provisions of the Customs Act 1962.
Petition dismissed.
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2020 (8) TMI 704
Validity of Show Cause Notice (SCN) - Violation of Foreign Trade Policy - SFIS scheme - HELD THAT:- It appears that the petitioner, who was the Chief Operating Officer of M/s KPMG during the period in dispute, has challenged a show cause notice dated 26th June, 2020 issued to him by the Customs authorities (Annexure P-1 to the memo of this writ petition). The respondents have invited reply of the petitioner to the said show cause notice, as stated in para-10 therein.
As the show cause notice is yet to be decided or adjudicated upon by the concerned respondents authorities, we are not expressing any opinion on the merits of the case. The petitioner has to give reply of the show cause notice to the concerned respondent authorities and if the respondents decide any issue against the petitioner, the petitioner is not remediless.
This is a premature writ petition, we are not inclined to give any relief to the petitioner. The petitioner may file a reply of the show cause notice and the concerned respondents authorities shall adjudicate upon the same in accordance with law, rules, regulations and government policies applicable to the facts of the case and after giving adequate opportunity of being heard to the petitioner - Petition dismissed.
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2020 (8) TMI 703
Provisional Release of seized goods - High end wrist watches - petitioner submitted that it would suffice for the disposal of the writ petition if a suitable direction is given to the respondents to provisionally release the goods which are detained by the respondent No.1 - HELD THAT:- It appears that high end wrist watches have been seized and lying with the respondent No.2/DRI since 29th October, 2012.
Learned Senior Counsel appearing for the petitioner has submitted that they are ready and willing to deposit the duty under protest. As per the show-cause notice issued by the respondent No.1, the duty amount mentioned is ₹ 52,19,582/-. Out of this amount, ₹ 27,50,669/- has already been deposited by the petitioner during the course of investigation - petitioner has shown the readiness and willingness to deposit the remaining amount of ₹ 24,68,913/- for the provisional release of the high end wrist watches, without prejudice to his rights and contentions in the adjudication process of the show-cause notice.
The respondent No.1 directed to decide the application for the provisional release of the goods, in accordance with law - petition disposed off.
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2020 (8) TMI 702
Principles of Natural Justice - Mutuality of interest - holding subsidiary relationship - related party or not - Valuation - clearances of goods, by the holding company to the subsidiary company - inclusion of marketing expenses incurred by the subsidiary, in the assessable value of finished goods - time limitation - HELD THAT:- The impugned orders are silent as to how the appellants claim of valuation under Rule 7 was legally tenable and how Rules preceding the same are not applicable. The respective authorities have only disputed the fact that certain expenses incurred by the subsidiary on account of Marketing and Advertisement were not included and that they are related - Revenue has not considered the provisions of Section 3 of CETA as it is seen that they have accepted the costing method applied by the appellants. Moreover, if Rule 7A of the Rules is applied, no proper reasoning has been given in the impugned orders.
The issue needs to go back to the original authority to consider the Rules of valuation and to give clear findings on the conclusions arrived thereof. Moreover, we find that the initial SCN was adjudicated by the Commissioner and the subsequent SCNs were adjudicated by lower authorities. In the interest of Justice, we hold that all the SCNs be adjudicated now by Commissioner who is competent to adjudicate the case involving highest duty.
Applicability of the extended period - HELD THAT:- The appellants have taken the plea that earlier provisional assessment was made and was finalised and even under circumstances, Department has invoked extended period. We find that the submissions of the appellant that they have submitted all the details at the time of provisional assessment and the department has gone through their submissions and finalised the assessments - the submissions of the appellants have not been considered in detail in as much as the manner in which the provisional assessments were finalised have not been discussed at all.
Whether M/s. HSL and M/s.HWPL are related entities? - HELD THAT:- The impugned order has not considered the submissions of the appellants on this account.
It was also alleged in the SCNs and affirmed in the OIO that marketing and advertisement expenses borne by the subsidiary were on behalf of the appellants and therefore, are includable in the assessable value - HELD THAT:- The impugned order has not given any findings after going through the submissions of the appellants and balance sheets of different companies.
Appeals are allowed by way of remand to Commissioner of Customs in the interest of Justice.
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Corporate Laws
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2020 (8) TMI 701
Disqualification of Director - Section 164(2)(a) of the Companies Act, 2013 - HELD THAT:- In the instant case, the petition is devoid of any material which may indicate as to a legal right in favour of the petitioners against being removed as a disqualified director or to restore the Director Identification Number (DIN) and Digital Signature Certificate (DSC) of the petitioners so as to enable the Court to determine their legal right, if any. In the circumstance, we are of the view it would be appropriate for the petitioners to make a representation before the Registrar of Companies, Guwahati being the respondent No.2 as regards their claim for continuing with the Director Identification Number (DIN) and Digital Signature Certificate (DSC) as well as to exclude their name from the list of disqualified directors. Upon such representation being made, the Registrar of Companies shall pass a detailed reasoned order as regards the entitlement of the petitioners to continue with the Directors Identification Number (DIN) and Digital Signature Certificate (DSC) and to get themselves removed from the list of disqualified directors.
It is provided that the petitioners shall file such applications, if so advised, within a period 7 days from today. Till the expiry of 7 days from today, the respondent authorities shall unfreeze the Directors Identification Number (DIN) and Digital Signature Certificate (DSC) issued in favour of the petitioners. However, if such application is not filed, the continuation of the order to unfreeze their Directors Identification Number (DIN) and Digital Signature Certificate (DSC) shall remain withdrawn and the Registrar of Companies shall be at liberty to take any action against the petitioners. In the event, application is filed the order to unfreeze the Directors Identification Number (DIN) and Digital Signature Certificate (DSC) shall continue till the Registrar of Companies may pass a reasoned order.
Petition disposed off.
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2020 (8) TMI 700
Principle of Merger - Compensation under Section 53N(1) of the Competition Act, 2002 - aggrieved entity - violation of Section 3(3) of the Act - time limitation - applicant contends the respondents to take a plea that the Compensation Application filed by the Applicant centers around the assumption that Section 53N of the Act requires the existence of either the former Competition Appellate Tribunal (COMPAT)/ National Company Law Appellate Tribunal or the Competition Commission of India’s order - HELD THAT:- It is to be pertinently pointed out that the Section 53N of the Act speaks of ‘Awarding compensation’ and a mere perusal of the ingredients of the said Section unerringly point out that the said Section does not contemplate a Limitation period for projecting an ‘Application’. It is an axiomatic principle in Law that when no time limit is prescribed, based on the ‘Doctrine of Laches’ the relevant proceedings ought to have been filed within a reasonable period of time and that failure to do so results in serious prejudice and harm to the concerned party and adversely affects the ability of the said party to defend itself.
In fact, the Competition Act, 2002 does not either by reference or in comparison provide for any period of Limitation for the purpose of filing an Application before COMPAT to adjudicate a case for compensation arising from the findings of the CCI or from the orders of COMPAT or under Section 42A or 53Q(2). It is not in dispute that the Applicant had sent the Information through letter dated 04.02.2011 under Section 19(1) of the Act to the Hon’ble Commission alleging ‘anti-competitive behavior’ on the part of the three Respondents and another. Further, the Applicant had alleged that the Respondents had acted and resorted in a manner in regard to the tenders released by the Applicant for purchasing Aluminum Phosphate Tablet (ALP) for the period 2009-10 - As a matter of fact, the Hon’ble Commission found that the Respondents had cartelised in respect of the two tenders for purchase of ALP Tablets released by the Applicant for the period from 2009-10 and 2011-12 and also it was found out that the Respondent had colluded and fixed the prices for the year 2009 tender and collusively boycotted the 2011 tender, thereby contravening Section 3 of the Act.
Undoubtedly, a plea of Limitation cannot be determined as an abstract principle of Law divorced from facts. The question of Limitation is an mixed issue of ‘Fact and Law’. In fact, ‘Limitation bars remedy and does not destroy a right’.
This Tribunal taking into account of all the facts and circumstances of the present case in a conspectus fashion, comes to a resultant conclusion that in the present case, the ‘cause of action’ firstly arose from the decision of the CCI’s order dated 23.04.2012, which was later affirmed by the COMPAT on 29.10.2013 and attained finality - this Tribunal holds that Section 53N of the Competition Act, 2002 entail an Applicant’s ‘cause of action’ to have come into existence because of an order of the Competition Commission of India or the Competition Appellate Tribunal. Further, it cannot be lost sight of that in the instant case, the Competition Commission of India, erstwhile COMPAT and the Hon’ble Supreme Court had found that the Respondents had violated the Competition Act.
Application allowed.
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2020 (8) TMI 699
Territorial Jurisdiction - Continuation of proceedings before Ahmedabad Bench of NCLT - Section 419(1) of the Companies Act, 2013 - Appellants claimed before the NCLT that the matters cannot proceed at Ahmedabad but in spite of objections when the NCLT continued to proceed, the present Appeals have been filed - Whether after notification, dated 08.03.2019, the NCLT, Ahmedabad has jurisdiction over TP-122/397- 398,58-59,235(2),237(b)NCLT.AHM/2016(New) and other connected matters, which pertain to the State of Madhya Pradesh?
HELD THAT:- The present Appeals have been filed referring to this Notification dated 8th March, 2019 to claim that from 8th March, 2019 onwards the Bench at Ahmedabad had no jurisdiction to exercise with regard to matters arising from the State of Madhya Pradesh - When these Appeals were filed, Notices were issued to not only Registrar, NCLT, Ahmedabad Bench but also to Registrar, NCLT, Principal Bench, New Delhi asking them to file Affidavits. It was recorded in proceeding dated 20.08.2019 to issue Notice to Respondents as to why the concerned cases pending before NCLT, Ahmedabad Bench, Ahmedabad be not transferred to Indore Bench, Madhya Pradesh pursuant to the above Notification dated 8th March, 2019. The Order dated 20.08.2019 further directed the Ahmedabad Bench not to hear the case on merits and to adjourn the same to subsequent dates till final Orders are passed in these Appeals.
These Appeals were filed on the basis that by Notification dated 8th March, 2019, the Ahmedabad Bench lost jurisdiction over matters relating to State of Madhya Pradesh. By Notification dated 31st January, 2020 which has now been issued by the Ministry of Corporate Affairs, the foundation for maintaining these Appeals has been lost. Although the learned Counsel for Appellant is trying to argue regarding the validity and legality of the Notification dated 31st January, 2020, we find that already High Court of Madhya Pradesh was moved by the Appellant - PHG International Private Limited in Writ Petition No.4479 – 2020 which has considered this very Notification dated 31st January, 2020 and dismissed the same. Appellants can pursue remedies as available in law. However, it appears to us that with Notification dated 31.01.2020 issued by Central Government, we have no reason to keep these Appeals pending and stay operating.
Considering the Notification dated 1st June, 2016 read with the Notification dated 8th March, 2019, read with the present Notification dated 31st January, 2020, it is apparent that jurisdiction of State of Madhya Pradesh will be exercised by Ahmedabad Bench of NCLT till the operationalization of Indore Bench of NCLT which will be notified by the Central Government by a subsequent notification - There are no reasons to keep these Appeals pending now.
Appeal disposed off as now they have become infructuous.
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2020 (8) TMI 698
Oppression and mismanagement - Validity of notice issued - company petition is pending since 2017 - removal of appellant/petitioner as a director of the Respondent Company - appellant/petitioner has been pointed out that the notice dated 6.2.2017 is a defective as in the notice no explanatory statement is given - HELD THAT:- After passing of this order more than two years has been lapsed but the company petition cannot be decided. It is pointed out on behalf of the Respondents that taking advantage of the interim order passed on 14.3.2017 the appellant representing himself as a director of the company has taken various steps which are detrimental and prejudicial to the interest of the Respondent NO.1 company as well as shareholder members. The Respondents are not being allowed to enter into a new project due to appellant/petitioner activities.
The grievance is that impugned order is in contradiction of the earlier order dated 14.3.2017. Earlier order dated 14.3.2017 was passed as the notice for removal of appellant was not in conformity with the Section 169 read with Section 115 of the Companies Act 2013 as in the notice no explanatory statement was given. Now the Respondents are ready to serve fresh notice in conformity with the Companies Act, 2013. Section 242(4) of the Companies Act, 2013 empowers the NCLT to pass any interim order which it thinks fit for regulating the conduct of the company’s affairs. Hence the NCLT considering the change circumstances in the matter has modified its own ex parte order dated 14.3.2017, nothing wrong in it. It is not argued that the impugned order is detrimental and prejudicial to the interest of the Respondent Company.
It is apparent that both the parties agreed to hold EOGM by the Board of Directors under the Chairmanship of Special Officer to be appointed by the Tribunal. Hence the impugned order is well reasoned order - Appeal dismissed.
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Insolvency & Bankruptcy
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2020 (8) TMI 682
Eligibility for appointment of Resolution Professional - A person who remained in the service of SBI and getting pension - HELD THAT:- The approach of NCLAT is not correct that merely Resolution Professional who remained in the Service of SBI and is getting pension, was disentitled to be Resolution Professional.
Let new Resolution Professional be appointed by the NCLT forthwith within a week in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 - The change of Resolution Professional shall not reflect adversely upon the integrity of concerned Resolution Professional, who has been replaced.
Appeal disposed off.
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2020 (8) TMI 697
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - applicability of time limitation - HELD THAT:- Section 18 of the Limitation Act, provides that where before the expiration of the prescribed period of limitation for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing then fresh periods of limitation shall be computed from the time when acknowledgement was so signed.
In the case of J.C. BUDHRAJA VERSUS CHAIRMAN, ORISSA MINING CORPORATIONLTD. & ANR. [2008 (1) TMI 963 - SUPREME COURT], Hon’ble Supreme Court has specified that explanation to Section 18 provides that an acknowledgement may be sufficient though it omits to specify the exact nature of the right are avers that the time for payment has not yet come or is accompanied by a refusal to pay, or is coupled with a claim to set off or address to a person other than a person entitled to the right - Hon’ble Supreme Court has relied on its earlier judgment passed in KHAN BAHADUR SHAPOOR FREDOOM MAZDA VERSUS DURGA PROSAD CHAMARIA AND ORS. [1961 (3) TMI 113 - SUPREME COURT]. In the said case, Hon’ble Supreme Court has clarified that acknowledgement as prescribed by Section 19 merely renews debt; it does not create any new right. It is a mere acknowledgement of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or either by implication. The statement of which the plea of acknowledgement is based must relate to the present subsisting liability, though the exact nature of the specific character of the said liability may not be indicated in words.
Thus in the case mentioned above, the Hon’ble Supreme Court has held that the limitation can only be extended in the manner provided U/S 18 of the Limitation Act. For example, an acknowledgement of liability under Section 18 of the Limitation Act would certainly extend the limitation period - In this case, admittedly the account of the Corporate Debtor was classified of NPA on 29th January 2013. Therefore, as per the law laid down by the Supreme Court case of GAURAV HARGOVINDBHAI DAVE VERSUS ASSET RECONSTRUCTION COMPANY (INDIA) LTD. AND ANR. [2019 (9) TMI 1019 - SUPREME COURT], the date of default shall be computed from the date when the account was classified as NPA, i.e.29th January 2013.
Article 137 of the Limitation Act shall be applicable for an Application filed under Sections 7, 9 or 10 of the I&B Code. Since the account of the Corporate Debtor was classified as NPA on 29th January 2013. Therefore, default started on 29th January 2013 and three years period of limitation was available for applying u/s Section 7 of the Code - thus, a fresh period of limitation of three years started w.e.f. 01st June 2016 in terms of Section 18 of the Limitation Act. Thus it is clear that the petition filed under Section 7 of the Code on 29th September 2018 is well within limitation. The impugned order is assailed only on the Limitation ground therefore Appeal deserves to be rejected.
Impugned Order upheld - appeal dismissed.
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2020 (8) TMI 696
Maintainability of application - initiation of CIRP process - allegation that the Respondents (Allottees) are themselves being defaulter - no ‘default’ by the ‘Corporate Debtor’ - HELD THAT:- In view of the fact that part of the infrastructure (Apartments/Flats) has already been completed, the allottees (Financial Creditors) were the main beneficiaries of the infrastructure have already reached settlement with the ‘Promoter’ and the fact that the ‘Promoter’ as an ‘outsider financial creditor’ has agreed to invest the amount, not from the account of the ‘Corporate Debtor’ but from other sources to keep the infrastructure as a going concern.
In exercise of inherent powers conferred under Rule 11 of the NCLAT Rules, 2016, following order is passed:
i. ‘Rajesh Goyal’ (Promoter) is directed to cooperate with the Interim Resolution Professional and disburse amount (apart from the amount already disbursed) from outside as Lender (financial creditor) not as Promoter to ensure that the project is completed within the time frame as given by him. The disbursement of amount which has been made by ‘Rajesh Goyal.’ and the amount as will be generated from dues of the Allottees (Financial Creditors) during the Corporate Insolvency Resolution should be deposited in the account of the Company (Corporate Debtor) to keep the Company a going concern. The amount can be utilized only by issuance of cheque signed by the authorised person of the Company (Corporate Debtor) with counter signature by the Interim Resolution Professional. The Bank in which the Corporate Debtor (Company) has account the amount should be deposited only for the purpose of completion of the Project. Banks will allow the cheques for encashment only with the counter signature of the Interim Resolution Professional.
ii. The flats/apartments should be completed in all aspect by 30th June, 2020. All internal fit outs for electricity, water connection should be completed by 30th July, 2020. The allottees are directed to deposit their balance amount and pay 90% without penal interest, if not deposited, by 15th March, 2020. The Allottees in whose favour possession has been offered and clearance has been given by the competent authority are bound to pay the cost for registration and directed to deposit registration cost to get the flats/apartments registered after paying all the balance amount in terms of the agreement.
iii. Common area such as Swimming Pool, Club House etc. as per the agreement, be also completed by 30th August, 2020. The allottees are allowed to form ‘Residents Welfare Association’ and get it registered to empower them to claim the common areas.
iv. ‘Rajesh Goyal’ will return the amount to the allottees, who already sought for, within the time frame i.e. 30% of the principal amount within 90 days and rest 70% of the principal amount within 180 days. The interest be paid to them in the manner as detailed above by 30th August, 2020. The ‘Financial Institutions/’Banks’ and ‘Operational Creditors’, if any should be paid simultaneously within the period of 180 days.
v. All these processes should be completed by 30th August, 2020. If it completed, the Corporate Insolvency Resolution Process be closed after intimating it to the Adjudicating Authority (National Company Law Tribunal). The resolution cost including fee of the Interim Resolution Professional will be borne by the Promoter. Only after getting the certificate of completion from the Interim Resolution Professional/ Resolution Professional and approval of the Adjudicating Authority (National Company Law Tribunal) unsold flats/ apartments etc. be handed over to the Promoter.
vi. It is made clear that even during the Corporate Insolvency Resolution Process, the Interim Resolution Professional can also sell the unsold flats/apartments, by way of a Tripartite Agreement between the Purchaser, Interim Resolution Professional/Resolution Professional and Promoter (Rajesh Goyal). The proceeds as may be generated from such sale should be utilized for completion of the project, payment to Financial Institutions/Banks, Operational Creditors and interest as is payable to the allottees whose principal amount is to be refunded. Once the project is completed, the ‘Interim Resolution Professional’ will move application before the Adjudicating Authority (National Company Law Tribunal) with the report of completion and ask for disposal of application under Section 7 of the ‘I&B Code’ filed by Ms. Babita Gupta, Mr. Manoj Kumar Gupta and Ms. Sweta Gupta (Allottees – Financial Creditors).
vii. However, if the ‘Promoter’ fails to comply with the undertaking and fails to invest as financial creditor or do not cooperate with the Interim Resolution Professional/Resolution Professional, the Adjudicating Authority (National Company Law Tribunal) will complete the Insolvency Resolution Process.
Appeal disposed off.
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Service Tax
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2020 (8) TMI 695
Reverse Charge Mechanism - appellant engaged in providing software services to their customers abroad - amount paid to their subsidiaries located abroad namely M/s IEII, M/s IEEL, M/s IEG and M/s IEJ - manpower recruitment and supply agency services - business auxiliary services - management or business consultancy services - demand aongwith interest and penalties - HELD THAT:- There is nothing in the agreements to show that the subsidiary is required provide manpower to the appellant in those countries. If that was the case, the services had to be performed by the appellant themselves at the customers’ end. Instead, the entire delivery of software service has been out sourced by the appellant to the subsidiary and the subsidiary got paid for these services.
The argument of the Department is that the billing is done by the subsidiary in terms of number of manpower or man days of different persons required / utilised for performing the services. It is a common practice in business for consultancy firms to bill the clients in terms of number of man hours of the personnel required at different levels required. Even, advocates may charge their clients for the number of hours spent on their case. Merely because the total amount has been billed using the number of man hours / man days as a measure, it does not become a manpower supply service. If this logic is accepted, every case where the billing is done based on the number of man hours / man days should be treated as a manpower supply service. The real test of determining the nature of service is to go through the agreement to understand what is the deliverable which the service provider has to deliver to the service recipient. In this case, this deliverable service is the delivery of software services to the clients of the service recipients i.e., the appellant.
The demand made by the Revenue upon the appellant in the two show cause notices under the head “manpower recruitment and supply service” under reverse charge mechanism needs to be set aside along with interest - penalties imposed upon the appellants under Section 76, 77 and 78 also need to be set aside - Appeal allowed - decided in favor of appellant.
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Central Excise
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2020 (8) TMI 693
Recalculation of interest under section 11AB - recovering the penalty imposable under section 11AC of the Act - Benefit of reduced penalty - appellant, party to the diversification of the goods by the M/s. Salasar Steel in the domestic market, or not - M/s. Salasar Steel was the merchant exporter - HELD THAT:- Taking notice of the fact that Hon'ble Chhattisgarh High Court have remanded the matter of penalty for the main party - M/s. Salasar Steel to the adjudicating authority. We deem it fit and proper to allow all these appeals by way of remand to the adjudicating authority for a denovo determination of the issue of imposition of penalty under Rule 26 after disposal of the matter in the case of M/s. Salasar Steel. The adjudicating authority is directed to dispose off these remanded matters along with M/s. Salasar Steel if the matter of M/s. Salasar Steel is still pending.
Appeal allowed by way of remand.
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2020 (8) TMI 694
Prosecution of accused - separate identity of Company/Firm and its owner - contention of the petitioner is that as per Section 9AA of the Central Excise Act, it is mandatory requirement to implead the company/firm as an accused - evasion of excise duty - HELD THAT:- A1 firm had been represented by A2, who was the Managing partner, till his death. After his death, the entire confusion arouse. Though this petitioner is no way affected by summoning Ms. Saradha Subhas to be a representative for M/s. Print Wraps firm/A1, the petitioner opposed the petition in Crl.M.P.No.2158/2011 and the trial Court dismissed the same by order dated 20.06.2013. This Court, by order dated 29.09.2011 in CRL.R.C.No.1256/2003 observed that there is no impediment in proceeding further in the trial under Section 305(3) Cr.P.C.
As per Section 63 of Cr.P.C., how summons to be served on corporate bodies and societies are stated. On service of summons under Section 63 of Cr.P.C, the company/Firm will nominate the representative to represent the firm. No doubt, it is for the company/Firm to decide who is to represent them in the proceedings. The right of choosing the representative rests solely with the company. Section 305 Sub-clause(ii) authorize the company/Firm to appoint its own representative for the purpose of enquiry or trial and such appointment need not be under the seal of the corporation - In this case, after the demise of A2, who was the Managing Partner of A1 firm, the summons must be sent to A1 firm for representing them. It is admitted that Ms. Saradha Subbash, the partner of M/s. Print Wraps is presently conducting the business and affairs of the firm.
Thus, from the reading of Section 63 and 305 of Cr.P.C, it is seen that after the summons are served in the manner prescribed under Section 63 of Cr.P.C, the Corporation may appoint a representative as per Section 305 of Cr.P.C., for the purpose of inquiry or trial. Thus, it is evident that when the accused is a corporate body, it is not for the Court to decide who shall represent corporate body. The Court can issue the summon in the manner prescribed under Section 63 of Cr.P.C, and the representative could be appointed by the Corporate Body for the purpose of representing the firm during trial.
This Court directs the Trial Court to issue summons as per Section 63 of Cr.P.C to A1 firm to the present Principal Officer Ms. Saradha Subbash and thereafter, proceeds under Section 305 of Cr.P.C. If it is found that there is any deceit and evasion in receiving and complying the summons, the trial Court is directed to take coercive steps in this regard - Petition dismissed.
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2020 (8) TMI 692
CENVAT Credit - input - film rolls - Kodak branded film rolls supplied free of cost, to be packed in a combo pack along with the camera which is manufactured by the appellant for Kodak - HELD THAT:- The identical issue pertaining to available of credit, in the hands of camera manufacturer, on film rolls has been decided by this Tribunal in the case of KODAK INDIA LTD. VERSUS COMMISSIONER OF C. EX., BANGALORE [2002 (9) TMI 440 - CEGAT, BANGALORE], under the erstwhile provisions contained in Central Excise Rules, wherein it has been held that film rolls cleared with camera will constitute ‘accessories’ to the camera and eligible for credit.
Ld. Commissioner erred in not appreciating that the film-rolls were very much considered as ‘accessories’ to a camera and once the same is considered as ‘accessories’, it qualifies as ‘input’ as defined in Rule 2(k) of the Credit Rules, as applicable during the impugned period and becomes duly eligible for credit. Moreover, when the film roll is being clubbed with the camera and both packed in a combi-pack, the MRP of the combi-pack will obviously include the value of film roll and eligible for credit.
CENVAT Credit allowed - Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2020 (8) TMI 691
Validity of assessment order - Levy of VAT - input tax credit - It was mentioned in the show cause notice that the petitioner did not file information such as books of accounts and tax invoices relating to input tax credit claimed by it and the input tax credit was proposed to be disallowed - assessment had to be completed under Section 29(3) of the Act within 4 years from the last date of filing the return for a particular month - HELD THAT:- Naturally during the period between the date of issuance of show cause notice dt.09-04-2020 and June, 2020 and 30-06-2020, it would have been difficult for the petitioner to obtain the services of Sales Tax Consultant, have access to material documents such as invoices etc., to properly defend itself against the proposal made by 1st respondent in the show cause notice dt.09-04-2020.
There has been a violation of principles of natural justice because petitioner could not file objections to the show cause notice on account of non-availability of its Sales Tax Consultant, and even a personal hearing was not provided to the petitioner though such personal hearing was sought by the petitioner.
The matter is remitted back to the 1st respondent for fresh consideration - Petition allowed by way of remand.
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2020 (8) TMI 690
Determination of mandatory pre-deposit for admission of an appeal - adjustment of deposit with input tax credit (ITC) / Net credit - HELD THAT:- The Act requires a pre-deposit as per the language in the proviso(2) of sub-Section (1) of Section 31 of the Act and does not permit any adjustments - No authority is cited by the petitioner in support of petitioner’s contention that adjustment of any net credit of tax is required to be made by the appellate authority while considering any appeal filed under Section 35 of the Act - Petition dismissed.
Time Limitation - It is contended that by the time petitioner realized that an appeal needs to be filed, the limitation period of 30 days prescribed for filing the appeal under sub-Section (1) of Section 31 of the Act had expired - HELD THAT:- Much case law has been referred to, in the affidavit filed in support of the writ petitions taking the plea relating to the validity of omission of the proviso(1) to Section 31(1) of the Act and it is contended that pending adjudication of the said issue, the garnishee order issued by the 1st respondent on 16.03.2020 should be suspended, and the penalty order passed by the 1st respondent on 25.09.2019 in AO.No.43687 should also should be set aside.
Maintainability of appeal - HELD THAT:- The petitioner had a remedy of appeal under sub-Section (1) of Section 31 of the Act against the penalty order dt.25.09.2019 passed by the 1st respondent; and the petitioner did not avail of the remedy at all; and the case of the petitioner does not fall within any of the exceptions to the rule permitting entertainment of writ petitions under Article 226 of the Constitution of India in spite of existence of an alternative remedy, and therefore we are not inclined to entertained the Writ Petition.
Petition dismissed.
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2020 (8) TMI 689
Principles of Natural Justice - Validity of proceedings/notices - non-application of independent mind - issue is that the impugned proceedings/notices are made on the basis of the Audit Reports/Inspection Proposals proceeded from the Enforement Wing or from ISIC Authorities - Circular No.3 dated 18.01.2019 - HELD THAT:- The Circular has empowered the Assessing Officers to henceforth independently deal with the assessment without being influenced by the proposals of the higher officials - In view of the Circular No.3 dated 18.01.2019 issued by the Commissioner of State Tax, Chennai, all the impugned proceedings in these batch of Writ Petitions, which proceeds on the basis of the proposals/reports of the Enforcement Wing/ISIC, are set aside and consequently, the matters are remanded back to the Assessing Officer. The Assessees are granted liberty to file their objections with all supporting documents, within a period of 30 days from the date of receipt of a copy of this order.
On receipt of such objections, the Assessing Officer shall extend due opportunity of personal hearing to the Assessees/Representatives, if necessary through Video Conferencing and endeavor to conclude the assessment proceedings, atleast within a period of 12 weeks from the date of receipt of the objections - Petition allowed.
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2020 (8) TMI 688
Maintainability of Revision Petition - revision petitions dismissed only on the ground that already charges were framed and trial has been commenced in all the cases - Jurisdiction of Commissioner of Commercial Taxes to issue prosecution sanction against the defaulting dealer - sanction to prosecute the petitioner.
The only point raised by the learned counsel appearing for the petitioner is that the competent authority did not accord any sanction to prosecute the petitioner herein - HELD THAT:- The competent officer accorded sanction for prosecution to prosecute the petitioner for the offences under Sections 49(2)(a), 49(2)(b) and 27(2)(b) r/w 27(3) of Pondicherry General Sales Tax 1967 r/w Section 81 of the Puducherry Value Added Tax Act, 2007 and under Section 409 and r/w 34 of IPC - Further this Court also finds that there are prima facie materials to attract the offences under Sections 49(2)(a), 49(2)(b) and 27(2)(b) r/w 27(3) of Pondicherry General Sales Tax 1967 r/w Section 81 of the Puducherry Value Added Tax Act, 2007 and under Section 409 and r/w 34 of IPC, as against the petitioner. Therefore, this Court dismissed the discharge petition not only on the ground that already the charges were framed and trial commenced but also on merits, as stated above. This quash petition is nothing but to clear abuse of process of Court, since the petitioner already filed discharge petition and the same was dismissed on merits.
Petition dismissed.
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2020 (8) TMI 687
Taxability - Exemption on the sale of REP licence - Goods or not - HELD THAT:- The Honourable Supreme Court in its detailed judgment, in the case of Yasha Overseas vs Commissioner of Sales Tax and others [2008 (5) TMI 43 - SUPREME COURT], while discussing various precedents on the issue, held that both REP license and DEPB license amounted to 'goods' and therefore sales thereon, was taxable under the Sales Tax Law of the State.
There are no merits in the present petition - petition dismissed.
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2020 (8) TMI 686
Penultimate sale - leather garments - Exemption under Section 5(3) of the Central Sales Tax Act, 1956 - purchase of raw hides and skins - exemption denied on the ground that the goods in question exported viz., leather garments were not the “same goods” as the goods purchased, viz., Raw Hides and Skins and therefore, the Assessee was not entitled to exemption under Section 5(3) of the Act - HELD THAT:- There are no details of entire chain of transactions established by the Assessee at all. Neither the details of export orders are available, nor the purchases of Raw Hides made by the Assessee directly linked to such export orders after being converted into Leather Garments is established - there are no discussion in any of the orders of authorities below passed by them and placed. The mere claim of the Assessee that the Assessing Authority had initially allowed such exemption under Section 5 (3) of the Act upon due scrutiny of the transactions is not acceptable, because the finding of facts with regard to inextricable link between the sale or purchase claimed to be exempted under Section 5(3) of the Act and the export has to be established by the Assessee by leading evidence.
Since such findings are not available, it cannot be held that the Assessee is entitled to such exemption under Section 5(3) of the Act, nor the order of the learned Tribunal or the Assessing Authority, allowing such exemption without the facts being fully and properly examined with due scrutiny by the Assessing Authority, can be sustained.
The matter deserves to be remanded back to the learned Assessing Officer for passing fresh orders after giving an opportunity of hearing to the Assessee and allowing him to lead requisite evidence to establish such inextricable link between the sale or purchase of the raw hides and skins in question and the export of leather garments or Dressed Hides and Skins by the Assessee - Petition allowed by way of remand.
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Indian Laws
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2020 (8) TMI 685
Dishonor of Cheque - insufficiency of funds - settlement has been reached already - HELD THAT:- Having gone through the material on record, it appears that in respect of the impugned order dated 7.12.2019, a specific settlement has taken place in writing which settlement has been produced on record which is reflecting on page-51 which is signed by the parties and the learned advocate appearing on behalf of respondent No.2 has confirmed this fact of settlement in true sense. Additionally, it is also visible from the record that on page-59 of the affidavit filed by respondent No.2 on oath, confirming the terms of the settlement.
The present application stands allowed.
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2020 (8) TMI 684
Dishonor of Cheque - insufficiency of funds - legally enforceable debt - rebuttal of presumption - Both the trial court as well as the appellate court held that the proof of hire purchase agreement is not sufficient to rebut the presumption under Section 138 of the N.I.Act - HELD THAT:- A negotiable instrument including a cheque carries presumption of consideration in terms of Section 118A and Section 139 of the N.I.Act. Once the complainant has succeeded in proving that the accused executed the cheque, then the onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the N.I.Act. In this case, the accused has failed to raise a probable defence which creates doubt with regard to the existence of a debt or liability. In the light of the evidence adduced, this Court is perfectly in agreement with the findings of the trial court as well as the appellate court that the presumption mandated by Section 138 of the N.I.Act has not been rebutted, in accordance with law.
Revision Petition is dismissed confirming the concurrent conviction and sentence imposed against the revision petitioner by the trial court as well as the appellate court. During the pendency of the proceeding, this Court called for a report from the Sub Inspector of Police, Vithura Police Station to ensure the presence of the revision petitioner before this court - The accused is sentenced to pay a fine of ₹ 2,50,000/- and in default to pay the fine amount, the accused shall undergo sentence of simple imprisonment for a period of three months. The fine amount if realised, the same shall be released to the complainant under Section 357(1) of Cr.P.C. - Criminal Revision Petition is allowed in part.
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2020 (8) TMI 683
Permission for withdrawal of petition - Dishonor of Cheque - non-retrospective application of Section 143A of the Negotiable Instruments Act, 1888 - HELD THAT:- The learned counsel for the petitioner seeks to withdraw the present petition seeking liberty to seek redressal before the learned Trial Court by filing a fresh application under Section 148 of the amended Negotiable Instruments Act, 2018 brought into force w.e.f. 01.09.2018 both in relation to the applicability thereof or exercise of discretion in terms of Section 148(1) of the said enactment qua the quantum of the amount to be deposited in terms of Section 148(1) being a minimum of 20%.
Petition dismissed as withdrawn.
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