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Showing 1 to 20 of 422698 Records
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2025 (1) TMI 257
Revocation of cancellation of their GST registration - final order of cancellation fails to record or assign any reason in support of the allegations which stood leveled in the SCN and which preceded the passing of that order - Violation of principles of natural justice - HELD THAT:- As is manifest from a reading of the SCN of 26 December 2023, the respondents had failed to indicate any intent to cancel the registration from a retrospective date.
The final order of cancellation fails to record or assign any reason in support of the allegations which stood leveled in the SCN and which preceded the passing of that order. In view of the aforesaid, the order of 08 January 2024 is rendered wholly unsustainable.
As is manifest from a reading of the SCN of 26 December 2023, the respondents had failed to indicate any intent to cancel the registration from a retrospective date.
Conclusion - The entire procedure as adopted by the respondents appears to be wholly arbitrary.
The impugned order of 08 January 2024 cannot possibly be sustained - Petition allowed.
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2025 (1) TMI 256
Suspension of GST registration of petiitoner - non-consideration of reply - Violation of principles of natural jusice - HELD THAT:- Admittedly, the petitioner is a registered dealer under the provisions of GST. The respondent has initiated an enquiry into certain alleged irregularities committed by the petitioner. The petitioner has replied to the said show cause notice. Under the said circumstances, it would be appropriate for the respondent to consider the reply of the petitioner and thereafter pass suitable orders in accordance with law and the act of respondent in suspending the GST registration of the petitioner pending enquiry would be too harsh on the petitioner as he would not be in the position to conduct his business and the enquiry may take some time.
The respondent is hereby directed to revoke the suspension of the GST registration of the petitioner which has been done as per show cause notice dated 14.10.2024.
Petition disposed off.
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2025 (1) TMI 255
Challenge to order which has come to be passed and in terms of which a SCN dated 30 May 2024 pertaining to the tax period April 2019 to March 2020 has come to be finalized - HELD THAT:- While dealing with an identically worded order passed by the said officer, in XEROX INDIA LIMITED VERSUS ASSISTANT COMMISSIONER, WARD 208 (ZONE -11) DGST AND ANR [2024 (12) TMI 1283 - DELHI HIGH COURT] it was held that 'The Assistant Commissioner has clearly adopted a template where the only reason assigned is that the reply filed was “not comprehensible, conceivable, not perspicuous and is ambiguous”. This clearly exhibits an abject non-application of mind and the officer repeatedly employing identical phraseology to deal with such matters.' - the final order cannot be sustained.
The order dated 25 August 2024 is quashed - petition allowed.
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2025 (1) TMI 254
Cancellation of registration of the petitioner - non filing of the GST return for a continuous period of six months - petitioner is ready to make the payment towards GST returns for a period of six months - HELD THAT:- In view of the consensus between the parties, the matter is covered by the order passed in Kiran Enterprises GSTIN Versus Commissioner, State Goods & Another [2024 (10) TMI 1306 - UTTARAKHAND HIGH COURT]], the present writ petition is also decided in terms of the said order.
Petition disposed off.
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2025 (1) TMI 253
Challenge to order passed in exercise of powers conferred by Section 73 (9) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- While there is some contestation with respect to the participation of the petitioner in the hearings that ensued and on the different dates which were fixed by the Assistant Commissioner, for the purposes of the present writ petition, we find it unnecessary to delve into those aspects since, and in our considered opinion, the Assistant Commissioner has clearly taken an extremely narrow and pedantic view while refusing to accede to the prayer for adjournment. The authority has failed to assign any reason in support of its conclusion that the request for adjournment was unmerited.
The impugned order dated 16 August 2024 is quashed - petition allowed.
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2025 (1) TMI 252
Maintainability of petition - availability of alternative remedy - challenge to adjudication order passed under Section 73 (9) of the M.G.S.T. Act, 2017, the C.G.S.T. Act, 2017 read with Section 20 of the I.G.S.T. Act, 2017 and the allied enactments - HELD THAT:- It is afraiding, in the wake of the fact that an efficacious remedy of statutory appeal is available to the petitioner, accepting for the sake of arguments that his request seeking time to respond to the show cause notice was not considered favourably, there are no reason to make exception and exercise the power under Article 226 of the Constitution.
The appellate authority would be able even to go into the stand of the petitioner of breach of principles of natural justice while passing the adjudication order - petition dismissed.
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2025 (1) TMI 251
Blocking the Electronic Credit Ledger (ECL) of the petitioner under Rule 86A of the Central Goods and Services Tax Rules, 2017 (CGST Rules) - absence of a pre-decisional hearing - HELD THAT:- The issue answered in favour of the petitioner- assessee in K-9-Enterprises’s case [2024 (10) TMI 491 - KARNATAKA HIGH COURT] where it was held that 'in the absence of valid nor sufficient material which constituted ‘reasons to believe’ which was available with respondents, the mandatory requirements/pre- requisites/ingredients/parameters contained in Rule 86A had not been fulfilled/satisfied by the respondents- revenue who were clearly not entitled to place reliance upon borrowed satisfaction of another officer and pass the impugned orders illegally and arbitrarily blocking the ECL of the appellant by invoking Rule 86A which is not only contrary to law but also the material on record and consequently, the impugned orders deserve to be quashed.'
Since no pre-decisional hearing was provided/granted by the respondents before passing the impugned order, coupled with the fact that the impugned order invoking Section 86A of the CGST Rules by blocking of the Electronic credit ledger of the petitioner does not contain independent or cogent reasons to believe except by placing reliance upon the reports of Enforcement authority which is impermissible in law, since the same is on borrowed satisfaction as held by the Hon’ble Division Bench of this Court, the impugned order deserves to be quashed.
It is also pertinent to note that in the impugned order except stating that “a registered supplier who has been found to be non-existent or not to be conducting business from his place of registration", no other reasons are forthcoming in the impugned order. On this ground also, the impugned order dated 06.06.2024 deserves to the quashed.
Conclusion - The impugned order is quashed, since no pre-decisional hearing was provided/granted by the respondents before passing the impugned order, coupled with the fact that the impugned order invoking Section 86A of the CGST Rules by blocking of the Electronic credit ledger of the petitioner does not contain independent or cogent reasons to believe.
Petition allowed.
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2025 (1) TMI 250
Short payment of Goods and Services Tax - adjudication of challenge to appellate order - HELD THAT:- The first Division Bench in M/S. MAA TARINI TRADERS, M/S. SURA CONSTRUCTION, M/S. SMT. AMULU PATRO, M/S. THE NATIONAL SMALL INDUSTRIES CORPORATION LIMITED, ASHISH MOHANTY, M/S. V.S.T. TILLERS TRACTORS LIMITED, NIRANJAN PRADHAN VERSUS STATE OF ODISHA & OTHERS, JOINT COMMISSIONER OF STATE TAX, & ANOTHER, CHIEF COMMISSIONER OF C.T. & G.S.T., ODISHA, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC) , DEPARTMENT OF REVENUE, MINISTRY OF FINANCE & OTHERS, C.T. & G.S.T. OFFICER, CUTTACK-I [2024 (2) TMI 1421 - ORISSA HIGH COURT] directed a quantum of deposit with liberty to parties in as much as, petitioner could avail of its remedy upon constitution of the Tribunal and in event it does not do so within time provided upon reconstitution, the department would be free to proceed.
Petition disposed off.
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2025 (1) TMI 249
Jurisdiction to invoke section 74(5) of the Central Goods and Service Tax Act, 2017 - suppression on the part of the petitioner with regard to invoices raised upon National Highway Authority of India or not - HELD THAT:- It was pointed out from the impugned show-cause notice by the learned advocate for the petitioner that no details are given with regard to alleged suppression of the facts by the petitioner.
The petitioner has made out a very good prima facie case for granting interim relief during the pendency of this petition. Therefore, the respondents may proceed with the hearing of the show-cause notice but no final order shall be passed without permission of this Court during the pendency of this petition.
Stand over to 4th September, 2024. To be listed on top of the Board.
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2025 (1) TMI 248
Declination to grant any interim order and direction has been issued to file the affidavits - cancellation of appellant’s registration under the GST Act on the ground that the appellant was not carrying on business in the place mentioned in the registration certificate - HELD THAT:- Admittedly, the appellant did not comply with the procedure as stated in section 28(1) of the WBGST Act, 2017 as well as Rule 19(1) of the WBGST Rules 2017. Considering the fact that the registration of the appellant was granted several years back, this Court is of the view that one more opportunity can be granted to the appellant to go before the original authority viz., the Assistant Commissioner, State Tax, Government of West Bengal, Serampore Charge and file the appropriate application in the appropriate form along with all supportive documents. If the same is filed, the original authority viz., the Assistant Commissioner shall consider the said application and decide the same on merits uninfluenced by any observation made by the appellate authority in the earlier order.
Appeal disposed off.
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2025 (1) TMI 247
Reopening of assessment - Period of limitation to issue notice issued u/s 148A(b) - scope of notices issued u/s 148 of the new regime between July and September 2022 - Application of TOLA to the Income Tax Act after 1 April 2021 - As decided by HC [2023 (2) TMI 1378 - GUJARAT HIGH COURT] allowed assessee appeal quashing and setting aside the notice issued u/s 148 alongwith the order u/s 148A(d) of the self-same date.
HELD THAT:- The issue involved in these Special Leave Petitions are squarely covered by the Judgment of this Court rendered in “Union of India & Ors. vs. Rajeev Bansal” [2024 (10) TMI 264 - SUPREME COURT (LB)]
The petitions filed by the Revenue are disposed of. The assessee will be governed by reasons discussed in the said Judgment. AO will dispose of the objections in terms of the law laid down by this Court. Thereafter, the assessee who is aggrieved will be at liberty to pursue all the rights and remedies in accordance with law, save and except for the issues which have been concluded in the Judgment.
Pending applications, if any, also stand disposed of.
Cases, which fall less than the value of Rs.50,00,000/- would have to be dropped - All that the assessee has to do now is to point out to the assessing officer that he is covered by para 7 of the High Court’s judgment [2024 (10) TMI 1623 - PUNJAB AND HARYANA HIGH COURT] and the proceedings be dropped as the tax liability is less than Rs.50 lakh subject to verification of this particular fact. Special Leave Petition stands disposed of.
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2025 (1) TMI 246
Excise duty refund and interest subsidy - full credit of challans deposited by the petitioner had not been given by the assessing officer due to wrong PAN number mentioned in the challans by the petitioner - petitioner has mentioned on the challans TAN number instead of PAN number - HELD THAT:- We are inclined to dispose of this petition by directing the Deputy Commissioner Income Tax, Circle-1, Jammu to ensure that the necessary correction in the challan as stated above is carried out with or without the approval of the Chief Commissioner Income Tax, Amritsar within a period of two weeks and the amount payable to the petitioner is released.
We also make it clear that in case no approval is received by the Deputy Commissioner Income Tax Appeals for correction of an inadvertent and clerical error in the challans from the office of the Chief Commissioner Income Tax, Amritsar, the approval, as may be required, shall be deemed to have been granted and the Deputy Commissioner Income Tax, Circle-1, Jammu shall be competent to carry out the necessary correction and release the amount payable to the petitioner.
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2025 (1) TMI 245
Delay in filing the application u/a 119 (2) (b) - respondent no. 1 rejected the application seeking condonation of delay filed u/s 119 (2) (b) as it was beyond the period of six years from the end of the Assessment Year as stipulated in the CBDT Circular No. 09/2015 thereby holding that the same is not maintainable - HELD THAT:- We find the petitioner has been diligent enough in pursuing the claim for a refund. In fact, it is material to note that the payments made to the petitioner by the Government of UP were delayed on account of the dispute which had to be referred to arbitration. Pursuant to the arbitral award payments were made to the petitioner in different tranches. The petitioner had filed a claim for refund with respondent No. 3 within the stipulated period.
However, respondent No. 3 did not have jurisdiction to process the claim as the same was for more than Rs. 10,00,000/-. The claim of the petitioner for the Assessment Year 2015-16 in respect of the very same contract was processed and refund was granted. In the meantime, there was outbreak of COVID pandemic. We are satisfied that a case making out compelling circumstances for filing the return belatedly is made out in the application filed by the petitioner.
In the present facts, the petitioner has made out a case for condoning the delay in filing the application u/s 119 (2) (b) before the CBDT. There are adequate circumstances on record justifying the delay in filing application and hence, looking at the compelling reasons for the delay in filing the application the claim of the applicant ought to have been considered by the respondents on merits.
Petition is accordingly allowed.
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2025 (1) TMI 244
Stay and review application rejected - not providing a reasoned and speaking order while rejecting the applications - HELD THAT:- The respondent authorities has passed the assessment order dated 31.03.2024 passed u/s 143 (3) of the Income Tax Act 1961 along with copy of demand notice issued u/s 156 of the Income Tax Act 1961 against the petitioner. Thereafter the petitioner has filed an application under Section 220 (6) of the Income Tax Act, 1961 filed on 29.04.2024 before respondent No. 3. The respondent- No. 3 has not decided the case on the basis of prima facie case, balance of convenience, irreparable loss caused to the petitioner, Genuine hardship, CBDT instruction and hi-pitched assessment.
Respondent No. 3 rejected the application without reasoned and speaking order on 14.06.2024. Subsequently, aggrieved of the same, the petitioner has filed review application before the respondent No. 2/PCIT (Central) Bhopal. The respondent No. 2 has also not decided the review application on merits and passed the order to pay 20% of the tax liability by way of installments in 5 months on. 18.10.2024. Thus, the impugned orders dated 14.06.2024 and 18.10.2024 are non-speaking orders.
AO has not adopted the correct procedure in deciding the stay application and review application of the petitioner and has not followed the guidelines as stated in KEC International Ltd. [2001 (3) TMI 32 - BOMBAY HIGH COURT] and in UTI Mutual Fund [2012 (3) TMI 333 - BOMBAY HIGH COURT] and also M/s Aarti Sponge & Power Ltd. [2018 (4) TMI 1284 - CHHATTISGARH HIGH COURT]
Thus matter is remitted to the respondent No. 2 to consider the stay application afresh/review application.
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2025 (1) TMI 243
Penalty u/s 271B - failure of the assessee to get accounts audited in respect of the previous year as required u/s 44AB but before specified due date i.e. due date for filing the return of income - HELD THAT:- Admittedly, the audit of Financial Year 2016-17 was completed in March 2019 & obviously the audit of Financial Year 2017-18 cannot be done prior to that. We find force in the arguments of the assessee that under the above peculiar circumstances of the case the assessee was prevented by reasonable & genuine cause for not getting the books of accounts completed & audited in time. Therefore, we are of the considered opinion that the assessee was prevented by sufficient & reasonable cause for not getting the books of accounts audited in time.
As relying on APL (INDIA) PRIVATE LIMITED VERSUS JCIT (OSD) -8(1), MUMBAI [2014 (4) TMI 206 - ITAT MUMBAI] we hold that the assessee in the instant case was prevented by reasonable cause in not getting the accounts audited in time and accordingly, we direct the Assessing Officer to delete the penalty levied u/s 271B of the IT Act. Thus, the ground of appeal filed by the assessee is allowed.
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2025 (1) TMI 242
Revision u/s 263 - AO had added the Fair Market Value (FMV) of the property to the total income of the assessee u/s 56(2)(x) - PCIT observed that the AO should have added u/s 56(2)(x) and actual purchase consideration as unexplained investment u/s 69A - HELD THAT:- Assessee failed to explain the nature and source of investment with necessary supporting evidences. Action of the PCIT is in accordance with clear statutory provisions of the Act. Clause (x) of Section 56(2) expands the scope of income from other sources w.e.f. AY.2017-18 and subsequent year to provide that receipt of the sum of money or property by any person without consideration or for inadequate consideration in excess of Rs. 50,000/- shall be chargeable to tax in the hands of recipient under the head “Income from other sources”.
AO should have taxed Rs. 14,93,393/- and not the entire Stamp Duty Value (SVA) u/s 56(2)(x) of the Act. Moreover, AO should have added Rs. 33,18,000/- u/s 69 because assessee did not offer explanation about the nature and source of the investment which was not recorded in his books of account. As held in case of Malabar Industries Co [2000 (2) TMI 10 - SUPREME COURT] an incorrect application of law will satisfy the requirement of the order being erroneous. Hence, the PCIT has rightly involved provisions of section 263 of the Act.
Whether directions of PCIT in the order u/s 263 of the Act are in order? - We find that there is confirmation and ledger account from the builder, M/s N. Rose Developers Pvt. Ltd., who has accepted payments from the appellant and also signed the documents. The said documents are the basis for the re-opening the assessment u/s 147 of the Act as well as revision proceedings u/s 263 of the Act. It is also a fact that in the payment receipts, different flats numbers are mentioned. It is also submitted that payments for purchase of flat were made from 09.11.2011 to 15.02.2020. Hence, all investments were not made in the current assessment year. Therefore, the addition of the total amount cannot be made in the subject assessment year.
We also find that the facts as stated in different stages are contrary to each other, which require further clarification and verification to come to a correct conclusion. Therefore, in the interest of justice and fair play, the matter is set aside to the file of PCIT to make further inquiry with respect to the year of purchase, purchase cost and date-wise payments etc. to determine the amount of investment u/s 69. For statistical purpose, the appeal of the assessee is partly allowed.
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2025 (1) TMI 241
Validity of reopening of assessment u/s 147 - Whether the appellant was rightly assessed u/s 148/147 despite the existence of Section 153C, which pertains to assessments following search and seizure operations?
HELD THAT:- As foremost substantive ground seeking to quash section 148/147 proceedings and find no merit therein. This is for the precise reasons that case law PCIT Vs Naveen Gupta [2024 (11) TMI 1071 - DELHI HIGH COURT] holds that even if section 153C contains a non-obstate clause, the same does not bar a learned assessing authority to invoke re-opening u/s 148/147 of the Act. This is also coupled with the fact that the assessee has not filed the corresponding search records and panchanama so as to satisfy the rigor of Section 153C.
Suffice to say, a perusal of the case file suggests that the learned Assessing Authority herein had recorded the corresponding reasons based on tangible material comprising of the evidence collected in post such enquiries and statements recorded from various persons. We further emphasize here that the department’s allegation against the assessee right from the beginning is that he had indulged in various accommodation entries outside India in collusion with the searched person Shri Manish Jain. CIT-DR vehemently submits that the appellant herein has not even filed his bank statement right from scrutiny till date resulting this factual position. She also quotes Section 124(3) of the Act that even the assessee is precluded from challenging the Assessing Officer’s jurisdiction as per Abishek Jain [2018 (6) TMI 211 - DELHI HIGH COURT].
We find merit in the Revenue’s instant arguments that the learned assessing authority not only went by the relevant tangible materials initiating section 148/147 proceedings but also it’s jurisdiction could not be questioned at this stage in the foregoing terms.
Departmental authorities herein had not served any notice during the course of assessment, and therefore, the same deserves to be quashed - No substance therein as he has neither challenged the AO’s action taking recourse to Section 144 proceedings by filing all the relevant notice, nor his passport details form part of records before us. We further wish to clarify there is no clarity in the case file that the US based authority had ever detained him during his alleged overseas trip.
Imposition of penalty u/s 271(1)(C) for concealment of income - The assessee has admittedly not filed any reasonable explanation; much less a convincing u/s 271(1)(c) Explanation 1(A) (B) so as to get out of the rigor of concealment and furnishing of inaccurate particulars of income therein. We thus quote MAK Data (P) Limited [2013 (11) TMI 14 - SUPREME COURT] to conclude that the learned lower authorities have rightly levied the impugned penalty in his case this “lead” penalty appeal which also stands upheld.
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2025 (1) TMI 240
Revision u/s 263 - Validity of assessment framed u/sec.153C - consolidated satisfaction note has been prepared for many assessment years - HELD THAT:- Since in the instant case a consolidated satisfaction note has been prepared for assessment years 2012-2013 to 2018-2019, therefore, the consolidation satisfaction note being not in accordance with law, therefore, the entire assessment proceedings is liable to be quashed. We hold accordingly and quash the assessment.
There is also no dispute to the fact that two searches have taken place and there is only one satisfaction note i.e., a combined satisfaction note in the case of Yuvraj Dhamale Group of cases has been recorded, on the basis of which, notice u/sec.153C was issued to the assessee. However, no separate satisfaction note was recorded in the case of Shri Sachin Nahar that any books of account or documents seized or requisitioned pertains or pertain to or any information contained therein relates to the assessee. Therefore, no addition could have been made in the hands of the assessee without resorting to the provisions of either sec.147/148 or sec.153C of the Act.
Once the assessment framed u/sec.153C r.w.s.143(3) is held to be void being not in accordance with law on account of a combined satisfaction note for assessment years 2012-2013 to 2018-2019 instead of separate satisfaction note, no addition could have been made in the hands of the assessee on the basis of the email dated 19.03.2021 without issuing a separate notice u/sec.153C or resorting to provisions of sec.148. Therefore, we do not find any error in the order of the Assessing Officer.
For invoking the provisions of sec.263 of the Act, the twin conditions i.e., the assessment order must be erroneous and the order is prejudicial to the interest of Revenue must be satisfied as held in the case of Malabar Industrial Co. Ltd [2000 (2) TMI 10 - SUPREME COURT] - In the instant case, the order is certainly not erroneous, even though it may be prejudice to the interest of the Revenue. Therefore, the twin conditions are not satisfied and the PCIT, in our opinion, cannot invoke the provisions of sec.263 - Decided in favour of assessee.
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2025 (1) TMI 239
Revision u/s 263 - Taxability of the investments in the hands of the trust u/s 56(2)(x) - assessment of trust - relatives inclusions in the beneficiaries - whether transactions involved in this case are out of the purview of section 56(2)(x) as the trust has been established exclusively for the family members covered in the definition of relative?
HELD THAT:- Assessee has made only submissions with respect to the non-taxability of interest in partnership firm, the assessee has no where mentioned any thing about the receipt of preference shares and equity shares of M/s Silver Needle hospitality. The AO has also not conducted any query nor raise any further question as regard to the applicability of the provisions of section 56(2)(vii) explanation (d) vis-à-vis preference shares and equity shares.AO has also failed to see the applicability of the provisions of section 45(4) of the Income Tax Act as they stood at the relevant times.
It was the abundant duty of the AO to examine the valuation of shares of partnership firms, adopted by the settlor for crediting the capital account of assessee in those firms and the taxability of the same in the hands of the firms and vice versa, which the AO has not done in this case. Therefore, it is a complete case of lack of enquiry. It is settled position of law that tax planning is permissible if it is done within the four corners of law but tax evasion is not permissible.
Whether amount received is not taxable in terms of section 56(x) as the same has been received for the benefit of relative? - We don’t find any infirmity in the view of the PCIT in as much as it is evident from the clauses of the trust deed that the benefits of the trust were not restricted to relatives only. The benefit of the amount received was not restricted to the family members and hence the view of the AO is not plausible view therefore the PCIT is correct in law in holding the order as prejudicial to the interest of revenue.
What was received is not covered by the definition of term “property” as given in explanation(d) of section 56(2)(vii)? - whether interest in partnership firm is covered in the meaning of expression “property”? - There are so many differences between expression share and securities therefore one cannot say that they are synonyms. The additional differences highlight the complexities and nuances of shares and securities, and demonstrate the importance of understanding the specific characteristics of each.
Expression shares and securities as used in explanation(d) of section 56(2)(vii) denotes two different type of properties these properties are distinct and hence the term “and” used between them carries a meaning of “or”. There are so many judicial pronouncements wherein it has been held that “and” can be read as “or” when the interpretation requires so.
In the present case the context in which the term shares and securities has been used it is abundantly clear that “and” should be read as “or”. Further literal interpretation in the present case is also giving an absurd meaning therefor we are of the firm opinion that the expression “and” used here should be read as “or”
Case laws where it has been held that terms 'or' and 'and' can be interchangeably interpreted to fulfil the legislative intent.
We are of the view that term “and” is to be read as “or”. And if that be so then whether interest in partnership firm falls in the category of “shares” as used in explanation (d) of section 56(2)(vii). What is “interest in partnership firm” has been decided by so many judicial pronouncements wherein this expression has been interpreted of expression. We have already noted somewhere else that term shares as used in explanation-2 of section 56(2)(vii) is not restricted to the shares of companies only, rather it is wide enough to mean a part or portion of something. For instance, "sharing" refers to dividing or giving out portions of something among several people..
Merely because some expression is missing we cannot restrict the meaning of a word. It is settled position of law that that words should not be overly restricted; their meaning can be shaped by the context in which they are used. Legal texts, contracts, or laws often define words, but if a specific definition is not provided, courts or authorities may interpret the word according to its common usage or the broader context. Therefore we have to take the common meaning of word “share”.
As interest in partnership firm” falls in the category of “shares” and the same is covered by the provisions of explanation (d) of section 56(2)(vii). Therefore, we reject the contentions of assessee that interest in partnership firm is out of the purview of section 56(2)(X).
Whether amount was not received without consideration? - No merit in this contention in view of the fact that it is not merely a case of receipt of an amount, rather a case where on the same date the assessee has been given rights in the partnership firms and the erstwhile partner has been retired. In fact, assessee has been made owner of the partnership firms without paying any penny. In fact, it is a finding of fact that no actual money has been transferred to the account of the assessee rather shares of M/s Silver Niddle has been transferred and capital account of the assessee has been credited in the partnership firms by reconstituting the partnership firms.
Amount received by the trust is received under fiduciary capacity and hence not taxable and trust via trustee does not have any right to enjoy the receipt as owner - We don’t find any merit in these arguments, there are provisions under the Income Tax Act which are meant exclusively for the purpose of taxation of Private Discretionary trusts. For instance, section 165 specify the tax rates applicable to a trust section 164A provides charge of tax in case of oral trust etc.
Provisions of section 56(2)(X) are not applicable to genuine transactions - In the facts of the present case, two important facts which are missing in other cases are that the assessee in this case has received the amounts without consideration for the benefits of non-relatives, secondly the assessee has been made partner in those firms where the settlor was having substantial interest. In order to circumvent the provisions of section 45, which deals with the chargeability of capital gains under various circumstances, the assessee has adopted a route of transferring the assets of Partnership firm thorough layers of companies and juristic entities. Therefore, we are not convenience with the arguments of the assessee.
Validity of Revision u/s 263 - The position of facts and law as discussed above would prove beyond doubt that the present case the order of the AO is erroneous in so far as prejudicial to the interest of revenue. AO has passed the order without making enquiries which should have been made by him. It is equally true that in final stage of assessment, the assessee has not disclosed the transferee of shares of private limited company along with interest in partnership firm in categorical terms.
Here we would like to make a reference to the decision of Every stone [1994 (7) TMI 36 - RAJASTHAN HIGH COURT] wherein it has been held that non application of mind by the AO to the legal issues would justify action of section 263. Assessee appeal dismissed.
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2025 (1) TMI 238
Validity of reassessment proceedings initiated as time-barred under the amended provisions u/s 149(1) - HELD THAT:- The notices issued to the assessee in present case are barred by limitation under the new provision of Section 149(1) of the Act is not covered under TOLA. Accordingly, all the notices are quashed being barred by limitation.Appeal of the assessee is allowed.
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9911796707
