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Showing 481 to 500 of 1430 Records
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2023 (12) TMI 950
Clandestine removal - paints and varnishes - manufacture of goods bearing the brand names “REAL” and “NICE” of another person - ineligible to grant SSI exemption - suppression of facts - extended period of limitation - HELD THAT:- Apparently and admittedly there is no retraction to the admissions that appellants were engaged in clearances/sale of manufactured goods without proper invoices. The fact of having any assignment deed to have been executed in November 2010 was not brought to the notice of the investigation team at the time of search on 13.09.2011. The said assignment deed bears notarization of 24.11.2011 (as recorded by Commissioner (Appeals) in Para 9 of the order under challenge) i.e. the date after the searches were conducted in the appellant’s premises. Thus there are no infirmity in the order of the adjudicating authorities below when the said assignment deed as is stated to have been executed in favour of M/s. Real Industrial Coating (Appellant No. 1) to be an afterthought.
The department has been meticulous in checking the records about brand names/trade marks from the portal for the purpose as is maintained by Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, Controller-General of Patent Designs and Trade Mark as recorded in Para 11 of the order under challenge. It is on record that during the period of investigation also the portal was still recording Shri Gulshan Kumar Matta as the brand owner instead of Shri Rambaksh Matta of M/s. Real Industrial Coating - there are no infirmity with the findings of authorities below that the brands ‘REAL’ and ‘NICE’ were the brands of a different person/third party than the manufacturer in the present case i.e. M/s. Real Industrial Coating was not the owner of these brands - the said exemption has rightly been denied to the appellants.
It is also observed that all the appellants herein while being examined during the investigation have admitted that the goods in question were cleared without the cover of proper invoices. 40% of the goods thereof were sold and purchased on kacchi parchis. The said kacchi parchis were recovered from all the premises as were searched during investigation and were taken on record as relied upon documents. Those documents are held to be the sufficient corroboration to the said admission of the appellants which apparently has never been retracted - The appellants have failed to produce any document which may corroborate the authenticity of the assignment deed of 27.11.2010. No evidence is produced to falsify the website extracts - there are no reason to differ when these admissions have been accepted as the sufficient proof of appellants’ alleged guilt - In the light of the said admission the present becomes a case of suppression of fact, fraud and collusion. Hence, the department has rightly invoked the extended five years period of limitation.
The show cause notice is dated 09.07.2015. The period of limitation (2 or 5 years, as the case may be) has to reckon from the relevant date, as is apparent from Section 11A(1)(a) and Section 11A(4) of Central Excise Act. As per Section 11A(3) of Central Excise Act, the period for issuing show cause notice shall be computed from the date of receipt of information to Central Excise Officer, about payment of duty, in writing, which shall be the date of filing returns - there are no reason to differ from the findings of the adjudicating authorities below that the show cause notice is issued prior the relevant date for the said period. Hence, the order to that extent is also sustainable.
The order under challenge is held sustainable - Appeal dismissed.
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2023 (12) TMI 949
Wrongful re-credit of CENVAT credit while availing the exemption under the Notification No.56/2002 - recovery of erroneous refund - levy of penalty.
It is the case of the Revenue that learned Commissioner has erred in as much as he did not impose penalty equivalent to the duty evaded in terms of Section 11AC.
HELD THAT:- Whereas the Commissioner has confirmed the demand of wrongfully availed credit of Rs.1,05,61,543/- under Section 11A and imposed penalty of Rs.20,39,919/-. Reasoning given by Commissioner was that the time under which the issue was under Stay can be excluded. We are of the opinion that Section 11AC does not provide for any such exclusion. Penalty under Section 11AC is related to the amount of duty evaded. Learned Commissioner could not have upheld the invocation of Section 11AC and imposed reduced penalty. The wordings of the Section 11AC are clear and therefore, there is no scope for any doubt in this regard.
The penalty is required to be imposed equal to the duty evaded or credit wrongfully availed or duty erroneously refunded.
The impugned order is modified to the extent of increasing the penalty imposed under Section 11AC from Rs.20,39,919/- to Rs.1,05,61,543/-. The appeal is, accordingly, allowed.
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2023 (12) TMI 948
Dishonour of Cheque - present complaint was filed without appreciating that the petitioner was not responsible for the conduct of the business of the Company at the relevant time - complaint does not contain any specific allegation against the petitioner to attract sections 138 and 141 of the NI Act - violation of principles of natural justice - HELD THAT:- Section 141 of the NI Act provides for a constructive liability which is created by a legal fiction. Section 141 of the NI Act being a penal provision should receive strict construction and compliance. If the accused played insignificant role in the affairs of the company, it may not be sufficient to attract the constructive liability under section 141 of the NI Act. The petitioner is claiming that he was appointed as the Regional Sales Manager in the accused no. 1 with effect from 01.10.2015 vide offer letter dated 28.05.2015 at a monthly salary of Rs. 50,000/-. The accused nos. 2 and 3 are the first director of the accused no. 1 as per Memorandum of Association.
If the petitioner was not responsible for affairs of the accused no. 1 despite being promoted as Additional Director of the accused no. 1, it can only be established and proved in accordance with law during the trial of the complaint under section 138 of NI Act. The petitioner has not placed or submitted any document which can reflect that the petitioner has never participated in conduct of business of the accused no. 1. The petitioner cannot be absolved from his liability qua the cheques in question by merely pleading that he was not responsible for day to day affairs and conduct of the business of the accused no. 1. The arguments advanced by the counsel for the petitioner are without any legal support.
The present complaint cannot be dismissed qua the petitioner. The present petition alongwith pending application is accordingly dismissed.
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2023 (12) TMI 947
Dishonour of Cheque - Insufficient Funds - legality of judgment of acquittal - existence of legally enforceable debt or not - accused had issued the cheque in discharge of the liability of Surinder Singh and the learned Trial Court erred in ignoring this position - HELD THAT:- The absence of any agreement will not make the case of the complainant doubtful - the cross-examination of the complainant or his witness was insufficient to rebut the presumption and it was duly proved on record that the accused had issued a cheque in discharge of his liability. Learned Trial Court erred in holding otherwise.
Hem Chand (CW-1) stated that the cheque(Exhibit C-1) was deposited with the bank. The cheque was dishonoured due to insufficient funds. He admitted in his cross-examination that the account of the accused was closed. It is apparent from the statement of this witness that the cheque was dishonoured due to insufficient funds, was not challenged in the cross-examination and has to be accepted as correct.
Testimony of this witness will not make the case of the complainant suspect because the cheque was drawn on Oriental Bank of Commerce and the official of the said bank specifically stated that the cheque was dishonoured due to insufficient funds. Therefore, the next requirement that a cheque was dishonoured due to insufficient funds has been duly established - The complainant stated that he issued the legal notice (Ext. C-3) asking the accused to make the payment within 15 days. Postal receipts (C-4 and C-5) and acknowledgement (C-6) corroborates his testimony. The acknowledgement shows that the registered cover was returned after delivery; therefore, it is duly proved that legal notice was duly served.
It was duly proved that the cheque was issued in discharge of the legal liability, which was dishonoured due to insufficient funds and the accused had not made the payment despite receipt of a valid notice of demand - the complainant has proved all the ingredients for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act.
The learned Trial Court did not consider the presumption attached to the cheque and the suggestions made to the complainant and his witnesses. It had taken a view which could not have been taken by any reasonable person. The judgment of the learned Trial Court proceeds in ignorance of the settled position of law and the same is liable to be interfered with even in an appeal against the acquittal.
The present appeal is allowed.
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2023 (12) TMI 946
Seeking immediate action in furtherance to the lock and seal notice and demolish the unauthorised construction of the building - HELD THAT:- When the matter is taken up for hearing, the learned Standing Counsel appearing for the Chennai Corporation/3rd respondent would state that the building in question is now under lock and seal and to settle scores between the parties, they have to approach the appropriate Forum.
Seeking to contribute funds for completing the construction of the unfinished apartments and also to compensate the home buyers for the inordinate delay in completion of the construction and for other reliefs - HELD THAT:- It has been stated that though M/s. Vasavi Builders /25th respondent herein is a partnership firm, most of the financial transactions of Vasavi Builders with that of the Home Buyers were exercised in the Account of M/s.Vasavi Housing and Infrastructure Limited. Further, Section 60(3) of Insolvency and Bankruptcy Code 2016 clearly states that any case relating to the Corporate Debtor pending in any Court or Tribunal shall be transferred to the Adjudicating Authority (NCLT Chennai) dealing with the Insolvency Resolution Process or Liquidation Proceedings of such Corporate debtor. In the present case, the connected proceedings are pending before National Company Law Tribunal, therefore, any further action can be settled before NCLT.
Petition closed.
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2023 (12) TMI 945
Professional misconduct - power of High Court to revise an order passed by the Council under Section 22 A of the Chartered Accountants Act, 1949 - HELD THAT:- A reading of the case of RADHEY SHYAM & ANR & JAGDISH PRASAD VERSUS CHHABI NATH & ORS & IQBAL KAUR & ORS [2015 (7) TMI 376 - SUPREME COURT] would to a conclusion that all Courts and Tribunals which are functioning in the territorial jurisdiction of this Court are subordinate to it. The control and working of the Subordinate Court while exercising their statutory appellate or revisional authority are subject to the jurisdiction of the Court under Article 227 of the Constitution of India. Despite the curtailment of the power of this Court to revise an order pursuant to the amendment to Section 115 of Code of Civil Procedure under Act 46 of 1999, the power of this Court to exercise superintendence and control over courts and tribunals and exercise revisional jurisdiction continues to be recognised by virtue of Article 227 of Constitution of India. Being a Constitutional Court, the power is inherent, as it were.
An adjudication implies that there is a lis before the Court of Tribunal and the Tribunal decides the same after hearing both the parties. The mere fact that the parties are heard does not make a body - a Tribunal. Principles of natural justice have grown to such an extent that even without a body being a Tribunal, it has been called upon to comply with the principles of natural justice. The basis of this principle is attributed to the Act of the Almighty. God did not punish Adam, banishing him from Paradise, without hearing him. If principles of natural justice applies to Almighty, all the more it applies to his frail creatures. Therefore, the test is not whether the parties are heard and examined, but, whether there is a transfer of judicial power from the State to a body and that body is clothed with the power of adjudication of a lis.
In case on hand, a professional misconduct not being a lis, the Board of Discipline cannot be held to be a Tribunal within the meaning of Article 227 of the Constitution of India. Consequently, it is not amenable to my revisional jurisdiction. Therefore, the Civil Revision Petition is dismissed as not maintainable.
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2023 (12) TMI 944
Cancellation of petitioner’s GST registration with retrospective effect - failure to furnish the returns for a continuous period of six months - HELD THAT:- In the present case, the impugned order does not set out any intelligible reason for cancelling the petitioner’s GST registration, let alone doing so with retrospective effect - it is also material to note that the learned counsel for the petitioner had confined his challenge to the cancellation of the petitioner’s GST registration with retrospective effect. It is stated that the petitioner had no objection to his GST registration being cancelled but the same cannot be done with retrospective effect, as the same has a cascading effect on the petitioner’s customers whom the supplies were made.
The impugned order to the extent that it directs cancellation of the petitioner’s registration with retrospective effect, is set aside - petitioner’s GST registration shall stand cancelled from the date of the issuance of the Show Cause Notice, that is, with effect from 06.06.2023.
Petition disposed off.
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2023 (12) TMI 943
Recovery of IGST - Validity of demand / show cause notice - Jurisdiction of CAG to issue notices / SCN - Conditions and procedure for issuance of SCN u/s 73(1) - HELD THAT:- Prior to issuance of a show cause notice under Section 73[1] of the CGST Act, 2017, it is mere discrepancy. At that stage, the alleged discrepancy would only be a discrepancy simplicitor but at the stage of issuance of Demand-cum-Show Cause Notice under Section 73[1] of the CGST Act, 2017, there is formation of a prima facie opinion on the part of the Proper Officer that there is an act, which is in violation of the statutory obligation cast on the noticee. Admittedly in the case in hand, the Form GST ASMT-10 was not issued to the petitioner. A contention has also been raised that the CAG is not the Proper Officer to issue any kind of letters regarding the discrepancy.
This Court finds force in the contentions advanced by the petitioner that an act of issuance of the impugned Demand-cum-Show Cause Notice dated 05.09.2023 under Section 73[1] of the CGST Act, 2017 by the Proper Officer was without compliance of the mandatory conditions precedent, prescribed under the CGST Act, 2017 and the CGST Rules, 2017, more particularly, the provisions of Section 61 of the CGST Act, 2017 r/w Rule 99 of the CGST Rules, 2017, to derive jurisdiction to issue such a Demand-cum- Show Cause Notice under Section 73[1] of the CGST Act, 2017, impugned herein.
Thus, it is ordered that the operation of the impugned Demand-cum-Show Cause Notice shall remain stayed, till the returnable date.
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2023 (12) TMI 942
Manner of payment of pre-deposit - Blocking of Input Tax Credit - request of adjustment towards the pre-deposit under Section 107(6) to file an appeal came to be rejected by the Appellate-Authority - prayer for a direction to the Respondents to consider the deposit of Rs. 1 Crore as sufficient compliance of Section 107(6) of the CGST/MGST Act - HELD THAT:- In the present case, the Petitioner is in no manner disputing that the Petitioner is required to comply with the provisions of sub-section (7) of Section 107 of the CGST Act, in filing the appeal. In other words, the Petitioner is ready and willing to make the payment/deposit of the tax as per clauses (a) and (b) of sub-section (6) of section 107 of the CGST Act. However, the question raised by the Petitioner is that for fulfilment of such condition, the amount of tax, which is voluntarily deposited by the Petitioner, under protest under sub-section (5) of section 73 of the CGST Act, by permitted to be reckoned for the purposes of a pre-deposit for compliance of sub-section (6) of section 107 of the CGST Act. In our opinion, such request for the Petitioner is not something, which is opposed to law, inasmuch as, on a holistic reading of section 73 of the CGST Act, it can be said that an amount deposited under sub-section (5) section 73 of the CGST Act is not an amount, which is deposited in pursuance of any demand or any assessment order. It is certainly a voluntary deposit and which is subject to all the contentions of the assessee.
Thus, when it comes to the compliance of sub-section (6) of section 107 of the CGST Act, namely, the mandatory payment of the tax, being a condition precedent, mandated in terms of the provisions of subsections (6)(a) and (6)(b) of section 107 of the CGST Act, the principle as laid down in Supreme Court in VVF (India) Ltd. [2021 (12) TMI 477 - SUPREME COURT] would become applicable considering that the provisions of the CGST Act on pre-deposit are not too different from the provisions of the MVAT act, which fell for consideration of the Supreme Court.
Blocking of input tax credit - HELD THAT:- The input tax credit is contended to have been blocked on 19th April 2022 and the period of one year expires on 19th April 2023, hence, by operation of law as per Section 83(2) of the CGST/MGST Act, the said attachment ceases to exists.
The Respondents are directed to treat sum of Rs. 1 Crore as pre-deposit for the purpose of Section 107(6) of the CGST/MGST Act and the appeal be decided on merits - The input tax credit alleged to have been blocked vide order dated 19th April 2022 stands defreezed by operation of law - Petition disposed off.
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2023 (12) TMI 941
Maintainability of petition - availability of alternative remedy - Validity of assessment order - rejection of appeal on the ground of limitation - It is urged that the assessment order itself was an ex parte order - HELD THAT:- Having not availed the statutory remedies available, the petitioner cannot seek to approach this Court under Article 226 of the Constitution of India to challenge an assessment order especially with respect to the computation of the turn over and the determination of the taxable turnover and the tax payable, as arrived at by the Assessing Officer. In the BGST Act, an appellate remedy is provided under Section 107, which has to be availed within a period of three months or with a delay within a further period of one month.
It is trite law that when there is a specific period for delay condonation provided, there cannot be any extension of the said period by the Appellate Authority or by this Court under Article 226 of the Constitution.
The petitioner by his own failure has not availed the appellate remedy and in that circumstance, there can be no invocation of the extraordinary jurisdiction under Article 226 of the Constitution of India - there is no jurisdictional error, violation of principles of natural justice or abuse of process of Court averred or argued by the petitioner in the above writ petition. The gross delay also stands against the petitioner.
Petition dismissed.
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2023 (12) TMI 940
Classification of goods - rate of GST - Stadiometer being diagnostic medical equipment - Infantometer being diagnostic medical equipment - taxable at 12% GST Slab? - HELD THAT:- Infantometer as the name suggests, is used for purpose of measuring height/length of infants. As per Wiktionary definition, Infantometer is an instrument for measuring the size of young children. The product is described as useful for research, clinical and hospital purpose - Stadiometer is described as piece of medical equipment used for measuring human height. It is used in routine medical examination and for clinical tests and experiments - The above definitions make it clear that both these instruments, the Stadiometer and the Infantometer have clinical used and are described as diagnostic instruments and apparatus.
Stadiometer is diagnostic medical equipment and is covered under tariff item 90189019 (other category) with rate of tax being 12% - Infantometer is diagnostic medical equipment and is covered under tariff item 90189019 (other category) with rate of tax being 12%.
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2023 (12) TMI 939
Liability of GST - Whether Purchase of raw cotton from Kacha Arhtiya who is a registered dealer constitutes a purchase from agriculturist - Reverse Charge Mechanism in view of section 9(3) of CGST/PGST Act, 2017 - HELD THAT:- To understand whether the Kacha Arhtia is liable to pay GST under reverse charge basis, it is pertinent to go through the Circular No. 57/31/2018-GST issued vide CBEC-20/16/4/2018-GST dated 4th September, 2018(to be read with the corrigendum dated 05th November, 2018) which has explained the Scope of Principal-Agent relationship in the context of Schedule-I of the CGST Act - As clarified vide above circular, the crucial component for covering a person within the ambit of the term 'agent', as contained in sub-Section (5) of Section 2 of the CGST Act and PGST Act, 2017, is corresponding to the representative character identified in the definition of agent under the Indian Contract Act, 1872. The said circular further clarifies that a key ingredient for determining whether the agent is wearing the representative hat and is supplying or receiving goods on behalf of the principal would be whether invoice for further supply or goods on behalf of the principal is being issued by the agent or not.
Since the scope of supply under the GST Act also covers the activities specified in schedule-I by or undertaken through an agent, the key ingredient for determining relationship would be whether the invoice for the further supply of goods on behalf of the principal is being issued by agent or not. In other words, the crucial point is whether or not the agent has the authority to pass on the title of the goods on behalf of the principal.
As soon as the auction for a lot is over, the auctioneer (Market officer) shall fill in the particulars in a book to be maintained in Form-H and shall secure the signatures of both the buyer and the seller or their respective representatives, whoever may be present at the spot. H register will have all details of date, Kacha Arhtia, name and address of seller, description of produce, quantity, rate, name of buyer. The responsibility of paying the market fee as prescribed under APMC Act and Rules shall be of the buyer in terms of provision of APMC Act and Rules and M/s Bansal Industries being a buyer in instant case, is liable to pay such fee and not the Kacha Arhtia or Agriculturist. Delivery of agricultural produce is made only after the Kacha Arhtia or the buyer gives to the seller a sale voucher in Form J clearly mentioning the details of the buyer and other details of the produce. On delivery of agricultural produce to a buyer, the Kacha Arhtia executes a memorandum in Form-I and delivers the same to the buyer on the same day or the following day clearly mentioning the name of the buyer corresponding to the Form-J issued to the seller.
Kacha Arhtia does not fall under the Scenario 4 given in the CBIC Circular No. 57/31/2018-GST dated 04.09.2018 cited by M/s Bansal Industries in their supports as at no time during the process of sale-purchase of agricultural goods in the grain markets does the Kacha Arhtia have the authority to pass or receive the title of the goods on behalf of the agriculturist. At all times during the purchase of raw cotton at the Mandi, the title of the agricultural produce and the authority to pass on the title of the agricultural produce is vested exclusively with the agriculturist himself. During the auction, it is the agriculturist who has to agree to the price offered by the bidders and thereafter when the delivery of goods is to be made to the successful bidder, i.e. buyer, at that point also the consent of the agriculturist is required before the goods can be transported to the buyer's premises - the provisions of APMC Rules also provide an opportunity to the buyer to remit money to the seller either directly or via the Kacha Arhtia. It is in fact only as an option of convenience wherein the money is transmitted via Kacha Arhtia after deduction of their commission etc which is the regular market practice.
M/s Bansal Industries i.e. the applicant is the recipient of supply of goods(raw cotton) by an agriculturist and not the Kacha Arhtia. As such, the applicant is liable to pay GST under reverse charge basis being a registered person in terms of Notification No. 13/2017- Central Tax (Rate) dated 28th June 2017 as amended vide Notification No. 43/2017-Central Tax (Rate) dated 14th November 2017 read with corresponding Notifications issued under Punjab State GST Act 2017.
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2023 (12) TMI 938
Government Entity or not - Urban Improvement Trust (UIT) Kota - constructing a Community Hall by the applicant at Bapu Nagar Residential Scheme, Kota, in accordance of works contract allotted by UIT Kota - taxability under GST law - paid tax shall be refunded to the assessee along with appropriate interest or not - Applicability of change in tax rate during continuing of a works contract, where the works contract has pre-fixed terms and conditions including total tender rate.
Whether Urban Improvement Trust (UIT) Kota is “Government Entity”? - HELD THAT:- UIT Kota is established by Govt, of Rajasthan (State Legislature) in 1970 under The Rajasthan Urban improvement Act 1959 and it is established by Govt, of Rajasthan with 90% or more participation by way of equity or control to carry out a function entrusted by the State Government. Thus UIT Kota falls under the category of “Government Entity”.
Whether constructing a Community Hall by the applicant at Bapu Nagar Residential Scheme, Kota, in accordance of works contract allotted by UIT Kota, is a taxable service under GST law and if yes, then determination of the liability to pay tax after applicable exemption and deductions? - HELD THAT:- The applicant is liable to pay GST on supply of this services and there no exemption and deduction is available to applicant in respect of aforesaid service provided to UIT Kota.
If no, then whether the paid tax shall be refunded to the assessee along with appropriate interest? - HELD THAT:- This question need not be answered.
Applicability of change in tax rate during continuing of a works contract, where the works contract has pre-fixed terms and conditions including total tender rate - HELD THAT:- The benefit of the reduced tax rate, i.e., 12% instead of 18% on works contract supplied to a Governmental Authority or a Government Entity regarding the works contract services mentioned in the corresponding entry, stands discontinued with effect from 01.01.2022. The revised rate applicable for the said supply is 18%. The revised rate is applicable from the 01st day of January, 2022. In case, where the time of supply of the work completed is on or before 31st December, 2021, GST at pre-revised rate is applicable and in case where the time of supply of the work completed is on or after, 01st day of January, 2022, GST at the revised rate is applicable.
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2023 (12) TMI 937
Stage of payment of GST - Time of supply - delayed payment of interest that is not still paid by purchaser of goods - time of demand of interest/debit of interest in the account of purchaser of goods - Requirement to issue fresh invoice of interest for delayed payment be issued in spite of non-receipt of interest? - GST payable on accrual basis or not?
HELD THAT:-As per Section 15 of CGST Act, 2017, 'The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply Further, as per Section 15(2) of CSGT Act, 2017, lists out the compulsory inclusions in the value of supply wherein as per Section 15(2)(d) it has been clarified that - 'interest or late fee or penalty for delayed payment of any consideration for any supply', thus GST provisions have clearly outlined Interest will be a part of value of supply.
Sec. 12(6) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value - Further applicant may raise debit note for interest on delayed payment under Section 34 of Act.
GST on interest recovered is to be paid on the date on which the supplier of goods receives such addition in value on delayed payment of any consideration.
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2023 (12) TMI 936
Exemption from deduction of Tax u/s 194N and 194A to Co-operative Societies - petitioner had taken a stand that they are business correspondents to pass on the cash benefits as mandated by the State Government and hence, they are qualified for being exempted under Section 194N - DR contented that Central government had also increased the limit of Rs. 1 crore as determined in the provisions of Section 194N of the IT Act to a sum of Rs. 3 Crore, and the same had came into force with effect from 01.04.2023 only with an intention to grant benefits to the members of the Co-operative Societies
HELD THAT:- The activities of the Co-operative Societies, such as accepting the deposits, paying the interest and thereafter redeeming the same for granting loan to agriculturists, weavers or to it's members, are appears to be partly as a banking activities, however, the active involvement of the petitioners/cooperative societies, to act as a business correspondents of a State Government for the distribution of the cash benefits to its members as well as to the non-members such as Pongal enam, flood relief, Covid reliefs and other reliefs, would appears that it is not a banking transaction but a transaction other than the banking activities in nature.
As far as the application of Section 194A of the IT Act is concerned, the petitioners are liable to deduct the TDS as provided thereunder. Whenever the deposits or investments are made with the societies, the societies are liable to deduct the tax on the interest payment. The eligibility for deduction must be tested by the Authorities in the course of assessment as it involves the determination of several questions of fact. The society is always entitled to, in the return of income filed by it, seek credit of the taxes attributable to the income returned by it and any excess deduction, if the stand of the societies is accepted in assessment, would have to be refunded to them. Therefore, it would be a premature petition to challenge the circular issued by the Authority concerned.
In the present case, the petitioners/Co-operative Societies have challenged the three circulars dated 16.03.2021, 05.08.2021 and 01.04.2021 issued by the 3rd respondent. The said circulars mandate the compliance of provisions of Sections 194A and 194N of the IT Act and in those circulars, the 3rd respondent had not mentioned anything contrary to the provisions of Sections 194A and 194N of the IT Act. Merely, they had brought into the knowledge of the petitioners/Societies to comply with the said provisions along with the latest amendments thereunder. At any cost, the same cannot be challenged under Article 226 of the Constitution of India, unless and otherwise, the provisions of Sections 194A and 194N of the IT Act are struck down with regard to the Cooperative Societies are concerned.
This Court had came across many cases, where the officers of the cooperative societies viz., Secretary or other Officials, in collusion with other officers, had opened hundreds of fictitious accounts and granted loans to those fictitious accounts. Thereafter, if there is any loan waiver or interest waiver granted by the Government, the same benefits will goes to the persons, who are all involved in the creation of those fictitious accounts. Hence, this is where the Societies are functioning in an unregulated manner. It is also due to the reason that the qualified Auditors had not been mandated to audit the accounts of the Societies and only the departmental audits have been conducted, which would pave the way for all sort of malpractices in those cooperative societies. Under these circumstances, Section 194N of the IT Act would be one of the ways to curb the malpractices in distribution of cash and encourage the cashless economy.
Now-a-days, the Central Government is granting benefits to the poor people through their bank accounts. Hence, if it is possible for the land-less people to open their bank accounts, certainly, the petitioners/Co-operative Societies cannot plead any excuse that its members, who are all having lands, are not in a position to open the bank accounts since it is very easy process to open the bank account for anyone at present.
If any distribution of cash for reliefs such as Pongal enam, flood relief, covid relief, etc., the same can be rooted through the respective bank accounts directly, whereby unnecessarily the members need not approach the Co-operative Societies for claiming the said reliefs. On the other hand, it will be automatically credited to their respective bank accounts and message, intimating the said deposit, will also be sent to their phones. In such case, the valuable time of the farmers and other members of the societies will be saved and the work of the cooperative society will also get reduced.
This Court is inclined to suggest and pass the following orders:
(i) Any benefit, such as pongal enam, flood reliefs, etc., shall be made only through the bank accounts of the respective members or non-members of the Co-operative Societies. The said act will save the valuable time of the members of the said Societies since if they are called for the payment of cash, initially they have to approach the Society or ration shop, etc., to register their name along with the address and thereafter, again they have to approach the Society or ration shop, etc., to collect the money, which would unnecessarily cause hardship for the members as well as the general public. On the other hand, if the funds are transferred to the respective bank accounts of the beneficiaries, it would be hassle-free for the public and there will be no question of mishandling of any cash;
(ii) If there is payment of cash for all the benefits provided by Government, such as pongal enam, flood reliefs, etc., it would only encourage and pave way for the mishandling of money and the same will also lead to the misappropriation of money and corruption at a large extent. When a way is available to completely eradicate the corruption and mishandling of money, etc., necessarily the Government/Societies, etc., should follow the same and distribute all sorts of reliefs through their bank accounts, in which case, the question of TDS would not arise.
(iii) When the reliefs are credited to the respective bank accounts of the beneficiaries, the withdrawal of the same should be allowed only in the presence of the beneficiaries in person. At any cost, the officials of the cooperative societies/ration shops, etc., should not be allowed for withdrawal of the said reliefs by bringing the cheques from its members. If it is allowed, there are chances for malpractices and mishandling of cash hereagain.
(iv) In a similar way, if any loan is granted to the members of the societies, the said loan has to be directly credited to the respective bank accounts of the members, in which case, the withdrawal should be permitted only in the presence of respective members of the cooperative society since there is a chance for collecting of cheques by the Societies from its members and withdrawing the loan amount under the guise of helping the poor farmers, which again lead to mishandling of money. Hence, the same should not be allowed. The aforesaid aspects has to be ensured by the respective banks and Co-operative Societies and other Government Agencies, who are involved in the distribution of cash to public.
(v) Further, this Court would suggest to consider and make a provision to audit the Co-operative Societies through the Chartered Accountant in addition to the present method of scrutinising the records by the Auditors.
(vi) The 1st respondent shall also consider with regard to the issuance of appropriate circulars for entertaining the cashless transactions by the Co-operative Societies by amending the IT Act. Once if the petitioners/Co-operative Societies have followed the above suggestions, there is no need for them to handle any cash transaction any more.
The above order would also avoid the distribution of reliefs in the fictitious name, since the same will happen very often at the cooperative societies, due to which, a large number of cases were also filed against the officials of the cooperative society and pending before the Courts. WP disposed of.
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2023 (12) TMI 935
Limitation for passing fresh assessment order - Whether assessment orders pursuant to the appellate orders of the Tribunal are barred by limitation in terms of section 153? - principal reason petitioner has approached this court is that since limitation under Section 153(2)(A)/153(3) had expired pursuant to the orders passed by Tribunal AO had been emasculated of the jurisdiction to pass a fresh assessment order - HELD THAT:- The counter-affidavit filed on behalf of the respondents/revenue, does not indicate the dates of which add ‘of’ the orders dated 21.11.2014 and 29.05.2015 passed by the Tribunal were served on the petitioner.
As would be evident, the best scenario for the respondents/revenue would be if the order of the Tribunal was served on or after 01.04.2016, but on or before 31.05.2016. It is not in dispute that as per Section 153(2)(A) [which is the old provision], the limitation would expire on 31.03.2018. However, if the amended provision, i.e., Section 153(3) of the Act were to be taken into account, the limitation would expire on 31.03.2017. It is also not disputed that this aspect of the matter is covered by the judgments of the coordinate bench rendered in Nokia India (P.) Ltd. [2017 (9) TMI 1298 - DELHI HIGH COURT] and Aricent Technologies (Holdings) Ltd [2023 (3) TMI 220 - DELHI HIGH COURT].
Thus, whichever regime we take into account, i.e., the time limit fixed as per Section 153(2)(A) of the Act or the time limit fixed by the amended provision i.e., Section 153(3) of the Act, as of today the AO is bereft of jurisdiction and hence, would have no legal locus to pass assessment order(s). Therefore, the prayers made in the writ petition are allowed.
Assessment proceedings concerning AY 1998-99 to AY 2009-10, pursuant to the orders of the Tribunal dated 21.11.2014 and 29.05.2015, have become time-barred. AO is thus directed to accept the return income lodged by the petitioner for the aforementioned AYs. Resultantly, the return as available on record will be processed and consequential orders would be passed.
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2023 (12) TMI 934
Income taxable in India - 15 percent of the revenue generated from the bookings made within India were attributable to the Permanent Establishment (PE) - HELD THAT:- The coordinate bench, in AY 2006-07 [2022 (9) TMI 311 - DELHI HIGH COURT], had sustained the said conclusion and had gone on to hold that no substantial question of law arose for its consideration. It is this decision that was affirmed by the Supreme Court, with the dismissal of the SLP as noted hereinabove. Tribunal via the impugned order, did not rule on the merits of the case for AYs 2007-08 to 2010-11.
Revenue, in the instant appeals, has not proposed a question on merits, perhaps, having regard to the aforementioned judgment of the Supreme Court as well as the decision of the Tribunal on the narrow issue of limitation.
Tribunal, in the instant case, had dismissed the appeal of the appellant/revenue on the ground of limitation for the AYs in issue, i.e., AYs 2008-09 and 2010-11.The reason given by the Tribunal for dismissal, on merits, was that the final assessment order was barred by limitation, as per Section 153 of the Income-tax Act
Appellant’s/revenue’s plea that the provisions of Section 144C of the Act would come into play was repelled by the Tribunal for the reason that framing a draft assessment order was not required for the periods in issue, and therefore, the non-obstante clause under Section 144C of the Act would not override Section 153 of the Act.
Since on merits the matter stands closed, in our view, these appeals need not be entertained vis-à-vis the questions proposed by the appellant/revenue as they have, in a sense, been rendered academic.
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2023 (12) TMI 933
Stay of demand during the pendency of the petitioner’s appeal before CIT (A) - petitioner states that the discretion to stay the demand during the pendency of an appeal has to be exercised judiciously and reasonably, based on relevant grounds, with due application of mind, and must not be exercised arbitrarily or capriciously or based on irrelevant considerations - He contends that doubting of genuineness of the transaction is based on considerations alien to Section 68 for which the Assessee is only required to show legitimate receipt of the money from the claimed person through normal banking channels, which has been undisputedly proven by the petitioner - HELD THAT:- Undoubtedly, the power vested u/s 220(6) of the Act, 1961 is discretionary and it is not mandatory to pre-deposit 20% of the assessed amount to obtain stay of deposit at the stage of filing the appeal before the CIT (Appeals). In the present case, AO in the assessment order has given a number of cogent findings against the petitioner. In fact, the AO after analyzing a number of relevant facts has virtually held that the transaction between the petitioner and the foreign entity was based on ‘reverse engineering’.
Keeping in view the aforesaid findings, this Court is of the view that the petitioner has not been able to make out a prima facie case in its favour. To put it mildly, the petitioner has a ‘lot to answer’ in the appeal.
The petitioner’s plea of financial stringency based on its balance-sheet also inspires no confidence as according to the Assessing Officer, the accounts have not been properly maintained. Accordingly, the writ petition is dismissed. However, this Court clarifies that the findings given by this Court are only in the context of the present writ proceedings and shall not prejudice either of the parties at the stage of the appellate proceedings.
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2023 (12) TMI 932
Exemption u/s 11(1)(d) - misutilization of receipts of earmarked funds as corpus donation - assessee-trust had taken loan- from bank for purchasing land from UIT but had repaid loan& interest by utilising the donation amount but not for construction of hospitals - HELD THAT:- The foreign donation was received as a corpus donation and within the meaning of section 11(1)(d). The fund was duly delayed for delay in approval from FCRA, where it is mentioned that the funds is for “construction/running of hospital/dispensary and clinic”.
The assessee had utilized this donation for repayment of loan which is not at all violation section 11(1)(d) and duly covered with consent of the donor. Further the donor agreed to donate amount to Rs. 20 crores to the assessee in next two years for carrying out the activities of the assessee trust in Udaipur. The donor, Dr. Kirti Jain has also submitted the letter for the purpose of donation on dated 06.01.2014. The fund was donated by founder member of the trust. The source is well explained. There is no deviation in activities of trust as per the stated main object. Expenses were incurred for charitable activities. The delay in project was due to stuck up of construction as per order of Hon’ble Jurisdictional High Court. In our considered view, there is no violation of section 11(1)(d) r.w.s. 11(1). We find that there is no valid reason to interfere in the impugned appeal order. Therefore, the ground nos. 1, 2 & 3 of the revenue are dismissed.
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2023 (12) TMI 931
Revision u/s 263 - Applicability of section 56 on disputed property as purchased from relative - Whether disputed property is purchased from relative therefore, the provision to section 56(2)(x) with explanation 56(2)(vii) is not applicable under the facts of the case, more over it not a capital asset being a rural agriculture land? - HELD THAT:- It was the case of the assessee that the AO has specifically raised query regarding the said issue and it has been explained to the AO by the assessee that the land, which was purchased by the assessee, is purely a rural agricultural land situated more than 6 km. from Nagar Palika, Damoh as per the population is between 1,00,000 to 10,00,000 and the seller Mohd. Khalil alias Khalik is a relative of the assessee and in support of the above contention, a confirmation letter from the seller has also been furnished. AO accepted the said contention/clarification given by the assessee and made no addition. In our considered opinion, the said approach of the AO requires any interference u/s 263 of the Act.
Increase in unsecured loan during the assessment year under consideration, the assessee had furnished 41 lenders from unsecured loans which has been taken during the year under consideration - The assessee had also furnished the bank statement of the lenders. Learned counsel for the assessee contended that the assessee had passed the three tests i.e. identity of the lenders, creditworthiness of the lenders and genuineness of the transactions, except the case of Ganga Jamuna Traders of Rs. 60,00,000/- and all the transactions are being made through bank account. The learned Assessing Officer accepted the clarification which was supported by the documentary evidence given by the assessee and made no addition. The assessee had complied and answered all the queries raised by the Assessing Officer u/s 143(2) and 142(1) of the Act by submitting satisfactory details and clarifications in respect of both the issues i.e. ‘purchase value of the property less than the value as per stamp authority’ and ‘large increase in unsecured loan during the year’.
Considering the fact that the assessee has discharged his initial onus by providing the supporting evidence such as confirmation, PAN & Adhar Numbers of all 41 lenders and the Bank statements, the burden of the assessee is discharged which has been accepted by the A.O. Further in so far as second issue is concerned, since the assessee has purchased the land from the ‘relative’ and the said contention was duly supported by the genealogical tree, and the said fact has also already been examined by the AO, thus, in our considered opinion, the order of the Pr. CIT deserves to be quashed. Accordingly, we allow the grounds of appeal of the assessee and set aside the order impugned of the Pr. CIT - Appeal of the assessee is allowed.
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