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Showing 101 to 120 of 925 Records

• 2012 (6) TMI 833
  

  Eligibility for exemption u/s. 11 - Held that:- Find out whether the assessee has received any money over and above the fees prescribed and thereafter decide the issue afresh in accordance with law after giving reasonable opportunity of hearing to the assessee. We make it clear that the assessee is not entitled for exemption either u/s 11 or u/s 10(23C) in case it collected any money by whatever name it is called i.e., donation, building fund, auditorium fund etc. etc., over and above the prescribed fee for admission of students.

  Depreciation claimed by the assessee trust - Held that:- Where an assessee trust is claiming depreciation on assets where cost of the relevant assets stood claimed as an application of income for a preceding and/or the current year under S.11(1), its claim under S.32(1)is eligible only in respect of business assets and where entire cost of the asset stands allowed by way of application of income under S.11(1), the depreciation claimed by the assessee under S.32(1) is not allowable as the trust is not undertaking any business activity. In view of the above, the Assessing Officer is directed to verify in respect of each asset on which depreciation claimed, whether the value of such asset was in fact allowed under S.11, and if it was so allowed, the depreciation would not be allowed in respect of such asset. Only if the value of the asset was not allowed as expenditure under S.11, the Assessing Officer is required to allow depreciation thereon

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• 2012 (6) TMI 832
  
  Issues involved: Suspension of petitioner u/s Regulations 13(e) and 13(f) of the Customs House Agent Licensing Regulations, 2004.
  
  The High Court of Calcutta, in the case at hand, addressed the issue of the suspension of the petitioner under Regulations 13(e) and 13(f) of the Customs House Agent Licensing Regulations, 2004. The court allowed the petitioners to file a statutory appeal against the suspension order, keeping all questions open for further discussion in the appeal process. The petitioner was alleged to have violated Regulations 13(e) and 13(f) which pertain to exercising due diligence in providing accurate information to clients and not withholding relevant information related to cargo or baggage clearance. However, the court found that the allegations did not establish any contravention of these regulations by the petitioner. As a result, the court ordered a stay on the operation of the suspension order for a period of 3 weeks. The petitioners were also granted the opportunity to seek a renewal of their prayer for stay before the Appellant Authority. Additionally, the court directed the urgent issuance of a certified copy of the order to the parties upon application, subject to necessary formalities.

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• 2012 (6) TMI 831
  

  Disallowance of depreciation on assets taken over from Bank of Thanjavur(BOT)- Held that:- Down-loaded master detail from the official website of Registrar of Companies, clearly mention that status of M/s.BOT as dormant. It is also mentioned that corrections are to be submitted by the concerned persons, if such data is incorrect. This downloaded material cannot be considered as material evidence proving the existence of that company. These were only the master data, which could be incorrect and such master data was always subject to correction. It would not show that the M/s.BOT continued its independent existence and continued its operation despite amalgamation. - Decided against assessee.

  Broken period interest - Held that:- When interest received by an assessee, from transferees for broken period is included under the head ‘business income’, amounts paid by the assessee to the transferors for broken periods could not have been disallowed.

  Bad debts written off need to be allowed.

  Allowance of normal write-off of bad debts - Held that:- The issue regarding write-off of bad debts raised by assessee in its ground No.4 for Assessment Years 2004-05 and 2006-07and as ground No.3 for Assessment Year 2005-06 requires reconsideration by the Assessing Officer, in the light of judgment of the Apex Court in Catholic Syrian Bank Ltd‘s case (2012 (2) TMI 262 - SUPREME COURT OF INDIA) as held that once bad debts were written off in the books of accounts, the claims had to be allowed

  Disallowance made under Section 14A -Held that:- We are of the opinion that this issue requires a fresh look by Assessing Officer. Rule-8D was held to be applicable only from Assessment Year 2008-09 by Hon’ble Mumbai High Court. It was also held that even for earlier years, disallowance had to be made under Section 14A of the Act considering the facts and circumstances. We, therefore, set aside the orders and remit back to the file of Assessing Officer for consideration of this issue afresh in accordance with law. This issue thus, stands decided in favour of assessee for statistical purposes.

  MAT applicability - Held that:- The provisions of Sec.115JB could not be applied on the assessee. In the result, this issue stands decided in favour of assessee.

  Exclusion of income of assessee from its Singapore and Colombo operations -branch income of assessee at Singapore and Colombo, whether to be excluded or to be considered for only tax credits.? - Held that:- Hon’ble apex Court in the case of PV.AL. Kulandagam Chettiar (2004 (5) TMI 8 - SUPREME Court ), after studying the Double Taxation Avoidance Agreement between Govt of India & Govt. of Malaysia, held that even if a person was resident in India, once such a resident in India was deemed to be a resident of a contracting state, on account of economic and personal relationship with such contracting state, then residence in India will become irrelevant and treaty would be prevail over Sections 4 & 5. Therefore, we are of the opinion that Commissioner of Income Tax(Appeals) took a correct view that income of the foreign branches in Singapore and Columbo had to be excluded and not considered only for tax credits.

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• 2012 (6) TMI 830
  
  Issues:
  1. Disallowance under Section 40(a)(ia) of the Income Tax Act.
  2. Interpretation of the law regarding TDS deposit and deduction.
  
  Analysis:
  1. The appeal was against the order of the Ld. Commissioner of Income Tax (Appeals) regarding the disallowance of &8377; 14,33,823/- under Section 40(a)(ia) of the Act. The assessing officer disallowed the amount on account of late deposit/non-deduction of tax at source. The Ld. Commissioner partly allowed the appeal after considering the submissions of the assessee.
  
  2. The Revenue contended that the Ld. CIT(A) erred in law by deleting the disallowance and should have upheld the assessing officer's order. On the other hand, the assessee's representative argued that similar issues had been decided by different benches of the Tribunal following the decision of the Calcutta High Court in CIT Vs. Virgin Creations GA No. 3200/2011.
  
  3. The Tribunal examined the submissions and noted that the TDS had been deposited in the government account for most cases before filing the return. The Ld. CIT(A) upheld the disallowance only for cases where TDS was not made, such as in the instances of Arvindbhai Himatbhai and Rajput Umedbhai Gamsingh. The Tribunal found that the Ld. D.R. did not contest this finding.
  
  4. The Tribunal referred to the decision of the Calcutta High Court in the case of Commissioner of Income Tax Kolkata-XI Vs. Virgin Creations and subsequent Tribunal decisions in similar cases. Following the precedent set in these cases, the Tribunal dismissed the Revenue's appeal, upholding the decision of the Ld. CIT(A) regarding the disallowance under Section 40(a)(ia).
  
  5. In conclusion, the Tribunal dismissed the appeal of the Revenue, affirming the decision of the Ld. CIT(A) regarding the disallowance under Section 40(a)(ia) of the Income Tax Act.

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• 2012 (6) TMI 829
  
  Issues involved: Appeal against refusal of registration u/s 12AA of the Income-tax Act, 1961.
  
  The appellant, a State Highways Authority, sought registration u/s 12A(a) of the Act, which was denied by the ld. Commissioner of Income-tax. The Commissioner observed that the authority was largely independent of Government funding and engaged in activities with commercial aspects, leading to the rejection of the application.
  
  The appellant contended before the Tribunal that the registration refusal was based on proposed Rules not approved by the Government. They highlighted the U.P. State Highways Rules, 2011, which mandated remittance of collected fees to the State Government, indicating non-profit nature. The Tribunal noted that the issue of commercial activities was not adequately examined by the Commissioner and directed a re-adjudication based on the relevant Rules.
  
  The ld. D.R. argued that the Commissioner's decision was based on available Rules, while the appellant emphasized the approved U.P. State Highways Rules, 2011. The Tribunal found that the Commissioner's assessment relied on proposed Rules, leading to the decision to set aside the order and remand for fresh adjudication considering the approved Rules.
  
  The Tribunal allowed the appeal for statistical purposes, directing the Commissioner to re-examine the registration issue in light of the U.P. State Highways Rules, 2011, after providing the appellant with a hearing opportunity.
  

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• 2012 (6) TMI 828
  

  Estimation of income at 5% of the gross receipts - Addition made towards the income of the assessee, who is engaged in supply of vehicles for goods transportation - deduction of interest and remuneration to partners claimed by the appellant in view of the provisions of Sec.40(b) - Held that:- The estimation of income of the assessee made by the assessing officer adopting a rate of 5% is on higher side, and it would meet the ends of justice if the income is estimated applying a rate of 3%. In deciding the issue as above, we considered the fact that the assessee does not own trucks used in the business and is incurring huge incidental expenditure. From such income estimated applying rate of 3%, deduction towards interest and remuneration to partners in terms of S.40(b) of the Act may be allowed.

  Impugned order of the CIT(A) is set aside, and the assessing officer is directed to recompute the income of the assessee. Accordingly, assessee’s ground No.2 is partly allowed and ground No3 is allowed.

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• 2012 (6) TMI 827
  
  Issues involved: Rectification of order u/s 254 of the Income Tax Act regarding deduction under section 80HHC on the value of DEPB.
  
  Summary:
  The appellant filed three Misc. Applications u/s 254 of the Income Tax Act, 1961, arising from the Tribunal's order related to assessment years 2001-02, 2003-04, and 2004-05. The issue pertained to deduction u/s 80HHC on the value of DEPB. The Assessing Officer initially decided the issue based on judgments of the Mumbai High Court and Punjab & Haryana High Court, rejecting the appellant's contention. The CIT (A) upheld this decision, which was confirmed by the Tribunal. However, the subsequent reversal of the Mumbai High Court's judgment by the Supreme Court in the case of Topman Exports v. CIT constituted a mistake apparent from the record. The appellant sought rectification of the order to align with the Supreme Court's decision.
  
  The Tribunal rectified its order, remanding the issue to the Assessing Officer to recompute the deduction u/s 80HHC in accordance with the law and the Supreme Court's judgment in the Topman Exports case. The Assessing Officer was directed to provide the appellant with an opportunity to be heard. Consequently, the common grounds raised by the appellant were allowed, and the Tribunal's order dated 21.11.2011 was rectified accordingly.
  
  The Misc. Applications filed by the assessee were disposed of in light of the rectification made by the Tribunal.

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• 2012 (6) TMI 826
  
  Issues Involved:
  1. Authorization for filing the appeal u/s 86(2A) of the Finance Act, 1994.
  2. Procedural vs. Substantive compliance in filing the appeal.
  3. Tribunal's duty to provide an opportunity to cure procedural defects.
  
  Summary:
  
  1. Authorization for filing the appeal u/s 86(2A) of the Finance Act, 1994:
  The appeal was dismissed by the Tribunal due to the lack of proper authorization as required under Section 86(2A) of the Finance Act, 1994. The appeal was filed by the Commissioner of Central Excise, Patna, instead of the officer authorized by the Committee of Commissioners. The Tribunal held that there was no authorization by the Committee of Commissioners in favor of the officer who filed the appeal.
  
  2. Procedural vs. Substantive compliance in filing the appeal:
  The appellant argued that the requirement for the appeal to be filed by the authorized officer is procedural and not mandatory, citing judgments from the High Courts of Gujarat and Karnataka. The respondent countered that the provision is clear and mandatory, requiring dismissal of the appeal if not filed by the authorized officer. The Court noted that the earlier part of the provision regarding the objection of the Committee of Commissioners is mandatory, but the latter part, which involves directing an officer to file the appeal, is procedural.
  
  3. Tribunal's duty to provide an opportunity to cure procedural defects:
  The Court referred to the Supreme Court's judgment in Shaikh Salim Haji Abdul Khayumsab vs. Kumar & others, emphasizing that procedural rules are the handmaid of justice and should not obstruct substantive rights. The Court held that the Tribunal should have given the appellant an opportunity to correct the procedural defect by showing that the appeal was filed by the Committee of Commissioners or the duly authorized officer. The Tribunal's dismissal of the appeal without such an opportunity was against the law.
  
  Conclusion:
  The Court set aside the Tribunal's order and remitted the matter back to the Tribunal, directing it to provide the appellant a reasonable time to correct the procedural defect. If the defect is corrected, the Tribunal should hear the appeal on merits. The appeal was allowed to this extent, with no order as to costs.

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• 2012 (6) TMI 825
  

  Levy of penalty u/s 271(1) - Held that:- The assessee is maintaining books and without pointing out any specific defect in books and making addition on that basis, addition is made by estimating the income. Thus canceling the penalty on the ground that income was determined on the basis of estimation.

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• 2012 (6) TMI 824
  
  Issues involved: Appeal against deletion of addition u/s 10B of the Income Tax Act, 1961 by CIT(A).
  
  Facts:
  - Assessee company filed return declaring total income.
  - Providing information technology services to foreign clients.
  - Earned dividend income, long-term capital gain, and interest income.
  - Claimed deduction u/s 10B.
  - Certificate from STPI filed.
  - AO found discrepancies and lack of Board approval for 100% export-oriented undertaking.
  - AO disallowed claim u/s 10B.
  
  CIT(A) Decision:
  - Assessee furnished replies to discrepancies.
  - CIT(A) held conditions for u/s 10B fulfilled.
  - CIT(A) allowed exemption u/s 10B based on fulfillment of conditions.
  - AO's disallowance deleted.
  
  Appellant's Submission:
  - Confusion on whether claim made u/s 10A or 10B.
  - Claim revised to u/s 10A before AO.
  - Form 56F filed for u/s 10A.
  - Discrepancies argued as frivolous.
  - Delay in submission of Softex forms condoned.
  - No discrepancy in FIRC and turnover.
  - Claim under u/s 10A should have been granted.
  
  Tribunal Decision:
  - Assessee initially claimed u/s 10B, denied by AO.
  - CIT(A) granted deduction u/s 10B, not admissible.
  - Matter restored to CIT(A) for fresh consideration.
  - CIT(A) to determine entitlement to exemption u/s 10A and fulfillment of conditions.
  - Assessee to be given opportunity to be heard.
  
  Result:
  - Appeal treated as allowed for statistical purpose.

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• 2012 (6) TMI 823
  

  Allowability of deduction u/s 54EC - Held that:- Direction of ld. CIT may kindly be modified to the extent that the A.O. will reframe his assessment order in accordance with law ignoring the observation made by ld. CIT on allowability of deduction u/s 54EC of the Act. Ld. D.R. did not object to this submission of the assessee. Therefore, the direction of ld. CIT is modified and the A.O. is directed to reframe the assessment order in accordance with law ignoring the observation of ld. CIT on allowability of deduction u/s 54EC of the Act.

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• 2012 (6) TMI 822
  

  Whether CIT(A) is justified in confirming the action of the assessing officer in disallowing the claim of depreciation to the appellant society in respect of assets purchased and used for the purposes of the society? - Held NO - Allow depreciation on the written down value of the assets of assessee trust.

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• 2012 (6) TMI 821
  
  Issues involved: Challenge against four orders in original passed by Deputy Commissioner of Customs and a communication demanding payment under threat of recovery action under Customs Act, 1962.
  
  Details of the Judgment:
  
  1. Lack of Show Cause Notice:
  The orders claiming duty were based on the petitioners' failure to produce the required end-use certificate within the specified time. The petitioner's counsel argued that the impugned orders were issued without any show-cause notice. It was highlighted that the end-use certificate was eventually issued by the Superintendent (Tech), Central Excise, certifying the proper utilization of the imported goods by the petitioners for manufacturing purposes. Despite a belated appeal with a request for condonation of delay, the appeal was dismissed as time-barred, emphasizing the lack of authority to condone the delay.
  
  2. Alternative Remedy of Appeal:
  The petitioners were unable to pursue their alternative remedy of appeal due to the delay in filing. While the existence of an alternative remedy does not always preclude a writ petition, it was noted that the impugned orders seemed to violate principles of natural justice. The imposition of differential duty, which carries adverse civil consequences, should ideally be preceded by notice and a fair hearing, which appeared to be lacking in this case.
  
  3. Stay Order and Further Proceedings:
  Considering the presence of the end-use certificate, the court stayed the demand for payment mentioned in the communication dated April 24, 2012, in the interest of justice. The interim order was set to be effective until August 21, 2012, or until further orders were issued, whichever came first. The enforcement of demands from the challenged orders was suspended until August 21, 2012. The court directed the matter to proceed based on affidavits, with the affidavit-in-opposition to be filed within three weeks and the affidavit-in-reply, if any, within one week thereafter. The writ application was scheduled for a hearing on July 17, 2012. All parties were instructed to act based on a signed copy of the order.
  
  This summary captures the key issues and details of the judgment, outlining the arguments presented and the court's decisions regarding the challenges against the customs orders and the demand for payment.

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• 2012 (6) TMI 820
  
  Issues involved:
  Challenging order of assessment and notice issued under Section 266(3) of the Income Tax Act, 1961.
  
  Order of Assessment:
  - The Andhra Pradesh Beverages Corporation Limited challenged the order of assessment dated 28-12-2011 for the assessment year 2009-10, raising a demand of Rs. 865,60,88,900.
  - The petitioner filed its return of income admitting 'nil' income and Rs. 3,89,560/- as book profit under Sec.115 JB of the Act.
  - The order of assessment was challenged on the grounds that the petitioner is acting as an agent of the State and the income of the State Government is not liable to be taxed under Art. 289(1) of the Constitution.
  - The challenge also included the initiation of proceedings under Sec. 143(2) based on identification by CASS and a circular of the CBDT, alleging abdication of statutory functions and discretion by the respondent.
  
  Validity of Circular and Precedents:
  - The circular of the Board directing assessing officers to take up cases identified by CASS was challenged, citing precedents like Pahwa Chemicals Pvt Ltd and others.
  - Precedents highlighted the limitations on the power of the Board to issue instructions contrary to the provisions of the Act or interfering with the quasi-judicial discretion of the assessing officer.
  - The CASS methodology was defended as a fair and transparent method for identifying cases for scrutiny under Sec. 143 of the Act.
  
  Decision:
  - The Court found no violation of the Act or abdication of statutory discretion by the respondent in taking up the petitioner's case for scrutiny based on CASS.
  - The petitions were dismissed with liberty to pursue the appellate remedy, as the Court declined to consider the merits of the impugned order of assessment.
  - The dismissal of the petitions was also based on the lack of independent grounds challenging the invocation of power under Section 266(3) of the Act.
  
  Conclusion:
  The Court upheld the validity of the assessment order and the notice issued under Section 266(3) of the Income Tax Act, 1961, based on the application of the CASS methodology for scrutiny, dismissing the petitions with liberty to pursue appellate remedies.

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• 2012 (6) TMI 819
  
  Issues Involved:
  1. Rejection of appeals by CIT(A) u/s 249(4) of the Income-tax Act.
  2. Payment of admitted tax on returned income.
  3. Restoration of appeals to CIT(A) for adjudication on merits.
  
  Summary:
  
  Issue 1: Rejection of Appeals by CIT(A) u/s 249(4) of the Income-tax Act

  The appeals were dismissed in limine by the CIT(A) because the assessees had not paid the admitted taxes on their returned incomes at the time of filing the appeals, as required by section 249(4)(a) of the Income-tax Act.

  Issue 2: Payment of Admitted Tax on Returned Income

  The assessees argued that they had paid the admitted tax on the returned income before the disposal of the appeal. The ITAT reviewed the payment details and confirmed that the admitted taxes were indeed paid on the respective dates mentioned in the provided table.

  Issue 3: Restoration of Appeals to CIT(A) for Adjudication on Merits

  The ITAT referred to the decision of the Coordinate Bench in the case of Banu Begum, where it was held that non-payment of admitted tax on returned income is a curable defect. Once the defect is cured by payment, the appeal becomes valid. The ITAT concluded that since the assessees had paid the admitted taxes, it was fair to admit the appeals. The ITAT set aside the impugned orders of the CIT(A) and restored the matters to the file of the CIT(A) for adjudication on merits, providing reasonable opportunity of hearing to the assessees.

  Conclusion:

  All the appeals under consideration were allowed, and the matters were restored to the CIT(A) for fresh adjudication on merits.

  Order Pronounced:

  Order pronounced in the open court on 08/06/2012.

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• 2012 (6) TMI 818
  
  Issues Involved:
  1. Whether there is enough evidence to implicate the appellant in the fraudulent export activities of M/s. Megna Impex.
  2. Whether the appellant aided and abetted the fraudulent export activities.
  
  Summary:

  Issue 1: Evidence to Implicate the Appellant

  The primary issue was whether there was sufficient evidence to implicate the appellant in the fraudulent export activities of M/s. Megna Impex. The Revenue's case relied heavily on the statement of Shri Ashok Kumar, who claimed that the appellant was a beneficiary of the illicit gains to the extent of 20%. However, the tribunal noted that apart from Shri Ashok Kumar, no other person, including Shri Gurkirpal Singh or Shri Satbir Singh, corroborated this claim. The appellant himself denied receiving any share of the profits. The tribunal emphasized that the statement of a co-accused requires corroboration from independent sources, which was absent in this case. Therefore, the statement of Shri Ashok Kumar alone could not be the sole basis for implicating the appellant.

  Issue 2: Aiding and Abetting Fraudulent Activities

  The second issue was whether the appellant aided and abetted the fraudulent export activities. The tribunal found that the evidence on record only implicated Shri Ashok Kumar and Shri Gurkirpal Singh in the fraudulent activities. Shri Satbir Singh's statements during the investigation indicated that it was Shri Ashok Kumar and Shri Gurkirpal Singh who managed the affairs of M/s. Megna Impex and that the appellant was only involved in the preparation of documents in his professional capacity as a Chartered Accountant. The tribunal also noted that the CBI investigation had given a clean chit to the appellant, stating that no criminal mens rea was substantiated against him. Additionally, the Income Tax assessment order concluded that the real beneficiaries of the fraudulent exports were Shri Ashok Kumar and Shri Gurkirpal Singh, not the appellant.

  The tribunal concluded that there was no evidence of the appellant's financial involvement in the export of goods or any assistance rendered for the fraudulent exports. The mere fact that the appellant applied for the IE code number and DEPB scrips on behalf of M/s. Megna Impex, or that the proprietor of M/s. Megna Impex was his employee, was not sufficient to hold him liable for aiding and abetting the fraudulent activities. The tribunal emphasized that mere knowledge of illegal activities is not sufficient to invite penal action.

  Conclusion

  In view of the foregoing, the tribunal found no justifiable reason to impose penalties upon the appellant. Accordingly, the impugned orders were set aside, and the appeals were allowed with consequential relief to the appellants.

  Pronounced in the open court on 26.6.2012.

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• 2012 (6) TMI 817
  
  Issues:
  The judgment involves the issue of refund sought by the petitioner u/s investigation conducted by the Commissioner of Central Excise, Bangalore, and the legality of the amount collected during the said investigation.
  
  Summary:
  The petitioner, a firm engaged in processing and exporting granite and marble slabs, sought a refund of Rs. 60 lakhs collected by the authorities during an investigation. The petitioner claimed that they were pressured to deposit the amount, even though they believed they were not liable to pay any duty. The petitioner relied on various judgments to support their claim that the amount was collected illegally. The respondent, however, contended that the amount was deposited voluntarily pending completion of the investigation. The Court noted that the amount was collected before determining the actual liability of the petitioner and directed the Commissioner to expedite the proceedings. The Court ruled that the amount deposited would earn interest at 9% and be refunded if the order favored the petitioner. The petitioner was given a deadline to file a reply, and the Commissioner was directed to pass final orders within a specified period. If the petitioner succeeded, the deposited amount would be refunded with interest.
  
  The judgment highlighted the importance of following due process in determining tax liabilities and emphasized that the authorities should not collect amounts illegally. The Court directed the Commissioner to expedite the proceedings and ensure that the petitioner's claim for refund, along with interest, would be addressed if the final order favored the petitioner.

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• 2012 (6) TMI 816
  
  Issues Involved:
  1. Validity of Section 154 of the Finance Act, 2003.
  2. Liability to pay interest on the refunded excise duty.
  3. Applicability of the principle of restitution.
  
  Summary:
  
  1. Validity of Section 154 of the Finance Act, 2003:
  The appellants challenged Section 154 of the Finance Act, 2003, which retrospectively withdrew the exemption from excise duty granted to industrial units in the North Eastern Region. The Hon'ble Supreme Court upheld the validity of Section 154, stating that the withdrawal of exemption from the date of the notification was within the competence of the Parliament and not liable to be quashed on the ground of being unreasonable. The Court emphasized that the retrospective operation, although potentially harsh, did not invalidate the demand as the State had been deprived of revenue without any corresponding benefit.
  
  2. Liability to Pay Interest on the Refunded Excise Duty:
  The appellants contended that they should not be liable to pay interest on the refunded excise duty, particularly since they had returned the principal amount and had an interim stay in their favor until the Supreme Court's judgment. The learned Single Judge rejected this contention, holding that the appellants were liable to pay interest as per the provisions of the Finance Act, 2003. The Court clarified that the stay order did not affect the liability to pay interest, and the liability remained even after the dismissal of the writ petition.
  
  3. Applicability of the Principle of Restitution:
  The Court applied the principle of restitution, which mandates that the appellants must place the revenue in the same position it would have been but for the exemption. The Court referred to the case of South Eastern Coalfields Ltd. v. State of M.P., emphasizing that restitution aims to restore the parties to their original position before the wrongful act or order. The Court stated that an unsuccessful litigant cannot be allowed to enjoy the fruits of an interim order and must compensate for the benefits derived during the period of the stay.
  
  Conclusion:
  The appeals were dismissed, affirming the learned Single Judge's decision that the appellants were liable to pay interest on the refunded excise duty as per Section 154 of the Finance Act, 2003. The principle of restitution was upheld, ensuring that the revenue was restored to its rightful position.

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• 2012 (6) TMI 815
  
  Issues Involved:
  The main challenge in this case is the initiation of proceedings u/s Rule 14 of Central Civil Services (Classification, Control and Appeal) Rules of 1965 while proceedings u/s Rule 16 were still pending.
  
  Details of Judgment:
  
  Issue 1: Initiation of Proceedings under Rule 14 while Rule 16 Proceedings were Pending
  The petitioner, an Assistant Commissioner of Customs, faced charges related to bills of entries, with proceedings initiated under Rule 16 of the Rules. Subsequently, a second memo under Rule 14 was issued before the closure of Rule 16 proceedings. The Court noted that the second memo included additional bills of entries, distinct from those in the first memo. The Court held that as the earlier Rule 16 proceedings were closed, there was no bar to initiating separate proceedings under Rule 14 for major penalty, even if they related to similar misconduct.
  
  Issue 2: Simultaneous Proceedings for Major and Minor Penalties
  The Court emphasized that since the earlier Rule 16 proceedings had concluded, there was no question of simultaneous proceedings for major and minor penalties. The petitioner could have sought modification of charges during earlier proceedings if both were to continue. However, with Rule 16 proceedings closed, only Rule 14 proceedings for major penalty remained. The Court rejected the argument that the second proceedings were unjustified due to the pendency of the first proceedings, as there were no simultaneous major and minor penalty proceedings.
  
  Issue 3: Justification for Initiating Major Penalty Proceedings
  The Court considered the respondent department's argument that minor penalty proceedings could not be completed due to the petitioner's superannuation. It was noted that further details of unauthorized actions came to light post-superannuation, leading to the initiation of major penalty proceedings. Citing a precedent, the Court held that the circumstances did not align with the case law relied upon by the petitioner, as there were no parallel proceedings for the same misconduct. Consequently, the Original Petition was dismissed.
  
  This judgment clarifies the legal stance on initiating separate proceedings for major penalty under Rule 14 when earlier proceedings under Rule 16 have concluded, emphasizing the distinction between major and minor penalty proceedings and the relevance of new evidence post-superannuation.

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• 2012 (6) TMI 814
  

  Addition u/s 40(e)(ia) - Allowability of expenses on account of VSAT, leaseline, depository and transaction charges paid to stock exchange - AO had made disallowance on the ground that these charges were of the nature of fees for technical services and, therefore, tax was required to be deducted which was not done by the assessee - Held that:- VSAT and leaseline charges paid by assessee to stock exchange were merely reimbursement charges paid/payable by the stock exchange to department of telecommunications and, therefore, these did not have any income element and accordingly tax was not required to be deducted.

  Transaction charge as in earlier years i.e., assessment year 2005-06 and assessment year 2006-07 in which orders were made under section 143(3), no disallowance had been made. The assessment year 2007-08 was the first year in which disallowance was made this claim was not controverted by the ld. DR. Therefore, following the judgment of Hon’ble High Court in the case of Kotak Securities Ltd. ( 2008 (8) TMI 592 - ITAT MUMBAI) the disallowance of transaction charges in assessment year 2007-08 can not be up held. Thus order of CIT(A) deleting the addition on account of transaction charges is sustained.

  As regards depository charges, fees have been paid to depository for maintaining the accounts of the shares in Demat forms and for dematerializing of shares. These do not require any technical services and, therefore, disallowance of depository charges has been rightly deleted by the CIT(A). - Appeal of revenue dismissed.

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