2017 (6) TMI 1249 - AT - Service Tax

Renting of immovable properties - renting out various properties namely shops, open space etc. for the period 01.06.2007 to 31.10.2010 - extended period of limitation - Held that - As the issue of taxability of service was in dispute during the relevant period, therefore, the extended period of limitation is not invokable in the facts and circumstances of the case - the demand for extended period of limitation is set aside and demand within the period of limitation has been confirmed - penalty also set aside - appeal allowed in part.

Summary

Issues:
1. Service tax demand on renting of immovable property
2. Invocation of extended period of limitation
3. Applicability of tax on renting of immovable properties

Analysis:

Issue 1: Service tax demand on renting of immovable property
The appellant appealed against the order confirming the demand of service tax on renting out properties like shops and open spaces from June 2007 to October 2010. The impugned order invoked the extended period of limitation for issuing the demand.

Issue 2: Invocation of extended period of limitation
The appellant did not dispute the levy of service tax on renting immovable properties but contested the invocation of the extended period of limitation. The appellant's counsel argued that a previous decision by the Hon'ble High Court of Delhi had held that renting of immovable properties service was not taxable, hence the extended period of limitation should not apply.

Issue 3: Applicability of tax on renting of immovable properties
The Tribunal considered the dispute regarding the taxability of the service during the relevant period. It was held that since there was a dispute regarding the taxability of the service, the extended period of limitation was not applicable in this case. Consequently, the demand within the regular period of limitation was confirmed, and the demand for the extended period was set aside. No penalty was imposed on the appellant under these circumstances.

In conclusion, the Tribunal disposed of the appeal by setting aside the demand for the extended period of limitation and confirming the demand within the regular period, treating it as cum service tax. The decision was based on the non-applicability of the extended period due to the disputed taxability issue during the relevant period.