2020 (4) TMI 75 - AT - Service Tax

Short payment of service tax - renting of immovable property service - Difference in receipts between ST-3 return and Form-26AS (TDS certificate) - HELD THAT - There is no allegation in the show cause notice that the appellant has filed incorrect returns (Form ST-3) or have maintained improper account nor any discrepancy is pointed out in their accounts. Further, the account of the appellant are also subject to audit under the provisions of Section 44AB of the Income Tax Act read with Rules thereunder. The copy of the audit report are annexed with the appeal memo. It is established principle of law that the turnover figures cannot be rejected without any cogent reason and/or specific discrepancy pointed out. In absence of any specific discrepancy or allegation, the demand of service tax short paid on account of renting of immovable property services, is not tenable - Penalties also set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues: Alleged short payment of service tax under renting of immovable property service

Analysis:
The appellant, engaged in providing services for renting immovable property, faced an issue regarding the alleged short payment of service tax specifically under the renting of immovable property service. The appellant contended that they had paid the correct service tax on the rent amount for the relevant period, maintained proper books of account, and regularly filed ST-3 returns. The show cause notice alleged a shortfall in service tax payment based on various considerations like godowns/warehouses, processing/grading of seeds, T.C. charges, storage, labor charges, and legal fees. The notice claimed a total service tax liability of ?24,04,955, out of which the appellant had paid ?13,69,341, resulting in an alleged shortfall of ?10,35,614. The appellant argued that there was no specific discrepancy in their returns or accounts and presented ledger accounts to support their claim. The authorized representative for the Revenue relied on Form-26AS receipts and final accounts to justify the demand amount. However, the tribunal noted that there were no specific discrepancies or allegations of incorrect returns or improper accounts in the show cause notice. The tribunal emphasized that turnover figures cannot be rejected without cogent reasons or specific discrepancies. Consequently, the demand for service tax shortfall on renting immovable property services was deemed untenable, leading to the setting aside of the impugned order, including the penalties imposed. The appellant was granted consequential relief as per the law.