TMI Blog2023 (11) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee requests for it. The assertion of the learned counsel that Form 26AS can be provided only by the Income Tax department to the Central Excise officers is not correct. The assessee himself could have provided this form to the central excise department as well - the demand for the normal period of limitation which the assessee has admitted and is not contesting is also as per the best judgment assessment, inter alia, based on the Form 26AS and other records - the assessee s objections to best judgment assessment in the impugned order has no legs to stand on and deserves to be dismissed. What is the relevant date for reckoning the limitation under section 73 and what was the normal period of limitation? - HELD THAT:- The proposition of the department that the date on which the return is filed after the due date should be reckoned as the relevant date cannot be accepted because (a) once the assessee does not file the return by the due date, the relevant date sets in and there is no provision in the law to modify this relevant date by any subsequent events including filing of the returns; and (b) because it results in absurdity because the assessee will be worse off by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel that the penalty under Section 77(1) (c) cannot exceed Rs. 10,000/- is also not correct. He has completely mis-read the section which provides for penalty of Rs. 10,000/- or Rs.200/- per day whichever is higher. Thus, the penalty cannot be less than Rs. 10,000/- but there is no upper limit. For all these reasons, the penalty imposed under section 77(1) (c) calls for no interference - Late fee was imposed under section 70 on the assessee for late filing of returns. This is a statutory fee and no specific averments have been made regarding this late fee - The penalty under sections 77(2) and 78 need to be set aside and the penalty under section 77(1)(c) needs to be upheld. Appeal allowed in part. - HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON'BLE MR. P. V. SUBBA RAO, MEMBER ( TECHNICAL ) Shri R M Saxena and Shri Rajesh Kumar, Advocates for the appellant Shri S K Meena, Authorised Representative for the Department Appearance: Shri S K Meena, Authorised Representative for the Department Shri R M Saxena and Shri Rajesh Kumar, Advocates for the respondent ORDER P V SUBBA RAO : 1. M/s Right Resource Management Service Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been wrongly alleged in paragraph 6 of the SCN that the assessee had not provided the requisite information/ documents such as Form 26AS, balance sheets and copies of the bills issued by it. All these documents, except the bills which are voluminous, were resumed by the officers during search on 30.3.2015 itself. Only Form 26AS for the period 2010-11 and 2011-12 of the assessee were obtained by the officers from the Income Tax department. Form 26AS is generated by the Income Tax department based on TDS returns filed by third parties. c) Since the officers were issuing repeated letters and summons and harassing the assessee and had also demanded a bribe, the assessee complained to the CBI who filed an FIR a copy of which is at page 229 of the paper book. d) The assessee had calculated its tax liability as Rs. 24,73,553/- based on Form 26AS figures. e) There were no grounds to invoke extended period of limitation of five years in the case. The SCN incorrectly alleged suppression of true taxable value and wilful mis-declaration of taxable value which have been upheld in the impugned order. f) The normal period of limitation under section 73 was 18 months upto 13.5.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable and those which were received from income tax department such as Form 26AS as per the best judgment under section 72. b) The adjudicating authority, however, erred in holding that the period April 2010 to September 2011 was beyond five years and hence was hit by limitation on the ground. Where no ST-3 return is filed by the due date, the relevant date to calculate the limitation is the last date on which such return should have been filed and not the actual date of filing the return. In this case, the assessee filed the returns much after the due date and if the date of actual filing of returns is considered, the demand for the period April 2010 to September 2011 would fall within the extended period of limitation. The relevant dates are as follows: S. NO. Half year Due date for filing ST-3 Actual date on which ST-3 is filed 1 April 2010 to September 2010 25.10.2010 1.11.2012 2 October 2010 to April 2011 25.4.2011 1.11.2012 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Indian Evidence Act, 1872 and only income tax department is authorised to provide it to the Central Excise department. 9. According to the learned authorised representative, the best judgment assessment had to be resorted to because the assessee had, despite repeated letters and summons, not produced the required documents. He further asserts that this failure of the assessee was the reason penalty was imposed on the assessee under Section 77(1)(c). 10. In order to examine this assertion of the assessee, it is necessary to examine section 72 of the Act which reads as follows: SECTION 72. Best judgment assessment. If any person, liable to pay service tax, (a) fails to furnish the return under section 70; (b) having made a return, fails to assess the tax in accordance with the provisions of this Chapter or rules made thereunder, the Central Excise Officer, may require the person to produce such accounts, documents or other evidence as he may deem necessary and after taking into account all the relevant material which is available or which he has gathered, shall by an order in writing, after giving the person an opportunity of being heard, make the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de them to the Central Excise Department. 14. We have considered these submissions regarding Form 26AS. The Income Tax Act requires various persons to deduct tax at source before paying the payee and file returns of Tax Deducted at Source (TDS) online with the Income Tax department. These returns indicate the PAN of each payee and the amounts paid and the tax deducted and details of the credit to the Income Tax department. The person deducting the tax has to also issue Form 16 (in case of salaries) of Form 16A (in case of other payments) to the payee at the end of the Financial Year. The amounts deducted by various persons from an assessee s accounts get set off against his final tax liability at the end of the year. For instance, if an employee gets a salary of Rs. 10,00,000/- in a year and a sum of Rs. 50,000/- was deducted as tax and his bank paid him some interest and deducted, say, Rs.5,000/- as tax, both these amounts get consolidated into Form 26AS of the employee and these amounts get adjusted against final tax liability at the end of the year. It is a matter of common knowledge that anyone can log into the income tax website and download one s own Form 26AS for any year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that section 73 does not distinguish between cases where the return was filed within time and the return was filed after the due date. A plain reading of the section indicates that once a return is filed, that date is the relevant date for determining the limitation. 19. We find that section 73(6) reads as follows: (6) For the purposes of this section, relevant date means,- (i) in the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied or short-paid (a) where under the rules made under this Chapter, a periodical return, showing particulars of service tax paid during the period to which the said return relates, is to be filed by an assessee, the date on which such return is so filed; (b) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (c) in any other case, the date on which the service tax is to be paid under this Chapter or the rules made thereunder; (ii) in a case where the service tax is provisionally assessed under this Chapter or the rules made there under, the date of adjustment of the service tax after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot also be accepted because it would mean that the assessee would be worse off by filing the return with delay than by not filing it at all. 23. Thus, the proposition of the department that the date on which the return is filed after the due date should be reckoned as the relevant date cannot be accepted because (a) once the assessee does not file the return by the due date, the relevant date sets in and there is no provision in the law to modify this relevant date by any subsequent events including filing of the returns; and (b) because it results in absurdity because the assessee will be worse off by filing the return late than by not filing it at all. Hence it needs to be rejected and we do so. The Constitution Bench of Supreme Court in the Commissioner of Customs vs. Dilip Kumar Company held that in interpreting statutes based on plain language, absurdity should be avoided. Paragraph 20 of the judgment is as follows; 20. In applying rule of plain meaning any hardship and inconvenience cannot be the basis to alter the meaning to the language employed by the legislation. This is especially so in fiscal statues and penal statues. Nevertheless, if the plain language re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Act before it was amended by the Finance Act of 1956 having already come to an end, the amending provision will not assist him to commence a proceeding even though at the date when he issued the notice it is within the period provided by that amending Act. This will be so, notwithstanding the fact that there has been no determinable point of time between the expiry of the time provided under the old Act and the commencement of the amending Act. The legislature has given to Section 18 of the Finance Act, 1956, only a limited retrospective operation i.e. up to April 1, 1956, only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income Tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided, become barred. To similar effect is the judgment in J.P. Jani, Income Tax Officer v. Induprasad Devshanker Bhatt, AIR 1969 SC 778. The Court held : 6. In our opinion, the principle of this decision applies in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober 2014, the new limit of 30 months applies. Invocation of extended period of limitation 26. The SCN was issued and the demand was confirmed in this case invoking extended period of limitation of five years under the proviso to section 73. To invoke the extended period of limitation, the short payment of tax should be, on account of, a) Fraud; or b) Collusion; or c) Wilful mis-statement; or d) Suppression of facts; or e) Violation of the provisions of the Act or Rules made thereunder with an intent to evade payment of tax 27. The reasons for invoking extended period of limitation given in the SCN is as follows: 8. Whereas, from the above, it appears that M/S RRMS have suppressed the correct taxable values in the ST-3 returns filed for the period 2010-11 to 2014-15 and thereby, evaded the service tax amounting to Rs. 2,81,34,607/-.They willfully mis-declared the taxable values in ST-3 returns with an intention to evade payment of service tax. Theevasion has been unearthed as a result of enquiry undertaken by the officials of Directorate General of Central Excise Intelligence, Regional Unit, Dehradun. M/s RRMS failed to self assess correctly the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and willingly. Accordingly, I find that the extended period of limitation for demand and recovery of service tax as provided under the proviso to Section 73(1) of the Finance Act 1994 is invokable in the present case. 29. In order to invoke extended period of limitation, at least one of the five elements indicated in the proviso to section 73(1) needs to be present. The case of the Revenue is that the assessee had suppressed the value of the taxable services provided by it in its ST-3 returns with an intent to evade payment of duty. This intent, according to the Revenue, is evident from the assessee s lack of cooperation during the investigation and also from the fact that in some cases, it had collected service tax from its clients and had not deposited it. The case of the assessee is that it had filed the ST-3 returns and had paid the service tax and also paid the differential service tax along with interest for the normal period during investigation itself. It is further the case of the assessee that not only has it been filing the returns with the Range Superintendent but it was also audited before this case was worked by the DGCEI and therefore, it had not hidden anyth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) . (c) who fails to (i) furnish information called by an officer in accordance with the provisions of this Chapter or rules made thereunder; or (ii) produce documents called for by a Central Excise Officer in accordance with the provisions of this Chapter or rules made thereunder; or (iii) appear before the Central Excise Officer, when issued with a summon for appearance to give evidence or to produce a document in an inquiry, shall be liable to a penalty which may extend to ten thousand rupees or two hundred rupees for everyday during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance; 32. According to the Revenue, despite several summons and letters, the assessee failed to produce the documents and records and also failed to appear before the officers and hence penalty @ Rs. 200/- per day for the period of failure was correctly imposed. Learned counsel for the assessee does not dispute that the assessee failed to appear in response to the summons and also that it had not provided the documents called for by the officers. His submission is that the officers w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a statutory fee and no specific averments have been made before us regarding this late fee. 34. In view of the above, we find that: a) the relevant date for reckoning the limitation under section 73 in cases where no return is filed by the due date is the due date for filing the return and there is no provision for changing this relevant date even if the assessee files a return after the due date and the Commissioner was correct in reckoning the last date for filing of returns as the relevant date; b) best judgment assessment can be resorted to by the officers suo moto and it is not necessary that an assessee requests for it; c) the reasons for resorting to best judgment assessment given in the SCN and the impugned order are fair and reasonable; d) the demand for the extended period of limitation under section 78 is not sustainable in the factual matrix of this case; e) the normal period of limitation was 18 months up to 13.5.2016 and 30 months thereafter and the 30 months limitation will apply to all the past periods also except those which have already expired by 13.5.2016 under the previous limitation of 18 months; f) the demand for the normal period of ..... 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