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2024 (11) TMI 912
Challenge to notice issued u/s 65 of the Maharashtra Goods and Services Tax Act, 2017 (SGST Act) in Form No. GST ADT-01 read with Rule 101 of the Goods and Services Tax Rules, 2017 (GST Rules) by which the respondents seek to conduct an audit for the financial year 2020-21 - whether the provisions of Section 65 of the SGST Act dealing with audit would apply to a person who was registered under the CGST Act for the period for which an audit is ordered but who ceases to be registered on the date the audit is ordered? - HELD THAT:- In the instant case, the preliminary findings of the audit as per its report dated 11 October 2024 is that the petitioner has claimed an excess input tax credit of Rs.3,60,44,378/- which is ineligible under the provisions of the Act. Furthermore, there is also a prima-facie finding that in the absence of proper documentation reversal of input tax credit (Rs.10,36,950/- + Rs.1,17,75,353/- + Rs.1,17,75,353/-) amounting to Rs.2,45,87,656/- is not in accordance with the law. Preliminary audit reports also suggest short disclosure of other income, resulting in the short payment of tax. The preliminary audit report prima facie has found a total tax plus interest liability of Rs.7,01,31,710/- for the period 2020-21. In our view, the petitioner cannot escape non-facing audit proceedings in the light of these prima facie findings of the audit conducted by the authorities by taking a plea that since they have now been de-registered they are not covered by the provisions of Section 65 of the SGST Act.
There is an obligation cast on a person in whose case of audit is conducted to comply with the directions of the tax authorities under Section 65(5) and these obligations are not affected even if registration is subsequently cancelled. This is made clear from the provisions of Section 29(3) of the SGST Act. If the contention of the petitioner that because they are de-registered, they are not covered by the provisions of Section 65 is accepted, then it would lead to provisions of Section 29(3) dealing with discharge of obligation under the Act or the Rules redundant. It is a settled position that any interpretation that will make the Act's provisions redundant or nugatory cannot be accepted. Instead, we must adopt an interpretation that gives meaning to all the provisions taken together, if necessary, by resorting to a harmonious construction.
It is also important to note that provisions of Section 65 of the SGST Act, read with Rule 101, give sufficient and adequate opportunity to a noticee to explain his case before any audit report is prepared. If an assessee has complied with all the provisions of the Act or Rules and has not defaulted in payment of tax or has not made short-payment of tax or has not wrongly availed input tax credit or refund, then there should not be any hesitation on the part of the noticee to make his submissions and come clear rather than to obstruct the audit proceeding by taking the plea which is canvased.
The provisions of Section 65 of the SGST Act would be applicable for conducting the audit of a financial year when a person was registered, although, on the date of ordering the audit, such a person ceases to be registered voluntarily or otherwise.
This writ petition, challenging the impugned notice dated 21 August 2024 (Exhibit-A) and preliminary audit findings dated 11 October 2024 (Exhibit-B), is dismissed.
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2024 (11) TMI 911
Jurisdiction of impugned orders under U.P.G.S.T. Act, 2017 - time limittaion u/s 73 and Section 44 of the Act - retrospective effect of notifications - impugned order passed beyond the time limit prescribed therein as calculated from the due date of filing annual returns prescribed in Section 44 (1), which was extended to 05.02.2020 and the time limit of three years ended on 05.02.2023 but the impugned orders are dated 05.10.2024 and 02.12.2023 - HELD THAT:- Ordinarily the due date for filing annual return is 31st December of the end of the Financial Year, which in the case of financial year 2017-18 would be 31.12.2018, however, this due date for filing annual return, was extended vide notification of the Central Board of Direct Taxes and Customs dated, 03.02.2018 to 05.02.2020 and this notification was adopted by the State of U.P. vide notification dated 05.02.2020. Based on this notification, the period of three years mentioned in sub Section 10 of Section 73 would end on 05.02.2023 meaning thereby, an order under sub Section 9 of Section 73 for the financial year 2017-18 could have been passed by 05.02.2023 but not after it.
Apparently the impugned orders are beyond the time limit prescribed under sub Section 10 of Section 73 as applicable for the financial year 2017-18 and therefore the impugned orders are beyond jurisdiction being barred by the time provided in the said provision, therefore, the writ petition is allowed and the impugned orders dated 05.10.2024 and 02.12.2023 issued by the Deputy Commissioner, State Tax, Sector 05, Lucknow quashed.
The accounts of the petitioner which have been freezed shall be de-freezed - petition allowed.
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2024 (11) TMI 910
Challenge to SCN and adjudication order - inordinate, unexplained delay - violaion of principles of natural justice - HELD THAT:- In similar circumstances, this Court has, through its several decisions, quashed the show cause notice and restrained the Respondents from proceeding further with the adjudication, which is inordinately delayed. In this regard, we refer to our decision in the cases of COVENTRY ESTATES PVT. LTD. VERSUS THE JOINT COMMISSIONER CGST AND CENTRAL EXCISE & ANR. [2023 (8) TMI 352 - BOMBAY HIGH COURT], PARESH H. MEHTA VERSUS THE UNION OF INDIA, THE COMMISSIONER OF CUSTOMS NHAVA SHEVA, (GENERAL) RAIGAD, THE ADDITIONAL DIRECTOR DIRECTORATE OF REVENUE INTELLIGENCE MUMBAI. [2024 (10) TMI 1412 - BOMBAY HIGH COURT], and M/S. ESJAYPEE IMPEX PVT. LTD., SHRI MAHENDRAKUMAR P. PARMAR MANAGING DIRECTOR OF M/S. ESJAYPEE IMPEX PVT. LTD., VERSUS THE UNION OF INDIA, ADDITIONAL DIRECTOR GENERAL, DIRECTORATE OF REVENUE INTELLIGENCE, MUMBAI, COMMISSIONER OF CUSTOMS (IMPORT-I) , MUMBAI [2024 (11) TMI 622 - BOMBAY HIGH COURT].
The impugned order is set aside - the Respondents are restrained from taking further steps or proceedings in furtherance of it - petition allowed.
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2024 (11) TMI 909
Seeking interference by restoration of the appeal - petitioner could not respond to the notices for prosecuting his appeal because he was unwell - HELD THAT:- Considering petitioner was unwell and under medical treatment at the time notices referred to in impugned order regarding the appeal were served upon him, it is required to interfere. Impugned order is set aside and quashed only on the ground that petitioner appears to have been prevented from prosecuting his appeal.
The writ petition is disposed of.
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2024 (11) TMI 908
SCN issued beyond time limitation - HELD THAT:- It was pointed out by learned advocate that the audit ultimately concluded on 2nd August, 2024 which is beyond the period prescribed under the provisions of Section 65(4) of the GST Act and consequently, the impugned show-cause notices issued by the respondent-Authorities in response to each paragraph of the audit report are without jurisdiction.
Issue Notice, returnable on 4th December, 2024. In the meanwhile, the proceedings pursuant to the impugned show-cause notice may continue, however, no final order shall be passed without permission of this Court during pendency of this petition.
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2024 (11) TMI 907
Violation of principles of natural justice - cancellation of registration without providing reasons in the order - petitioner was not submitting his quarterly return - HELD THAT:- Since in the present case, the basis for initiating action was non-filing of return, as alleged in the show cause notice, subsection (2) of the Section 29 is applicable. The proper officer is empowered to cancel registration of a person if he is satisfied that any of the conditions stipulated in Section 29(2)(b) are attracted - The order impugned is completely non speaking and does not record and reason why the registration has been cancelled.
The impugned order is set aside. Case is remanded to concerned authority for consideration afresh and to pass appropriate order(s) in accordance with law - Petition is allowed by way of remand.
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2024 (11) TMI 906
Challenge to order issued under Section 74 of the Central /West Bengal Goods and Services Tax Act, 2017 - HELD THAT:- Having considered the materials on record and taking note of the clarification issued by the Central Board of Indirect Taxes and Customs dated 17th July, 2023, the writ petition raises jurisdictional issue. The writ petition is required to be heard.
Taking note of the prima facie case made out by the petitioners, inter alia, including the clarification offered by the Central Board of Indirect Taxes and Customs dated 17th July, 2023, the petitioners are entitled to a limited protection, especially since a show cause notice dated 30th July, 2024 has already been issued.
Liberty granted to the petitioner to respond to the show cause dated 30th July, 2024. Since the time to respond has already expired during the pendency of the writ petition on 5th September, 2024, the same is extended by three weeks from date - Liberty to mention for inclusion in the list after expiry of the period for exchange of affidavits. Liberty to the respondents to apply.
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2024 (11) TMI 905
Recovery of refund - petitioner objected to the proposed demand by pointing out that Notification No. 54/2018 Central Tax was prospectively introduced w.e.f. 9.10.2018 and therefore refund prior to such date ought not to be recovered - rectification of order - HELD THAT:- This Court while considering the mistakes pointed out in Misc. Civil Application No.1 of 2020 in Special Civil Application No. 15833 of 2018 has passed the rectification order holding that Notification No.54 of 2018 shall apply prospectively with effect from 9th October, 2018 only.
The impugned show cause notice dated 31.03.2023 issued on the basis of retrospective operation of Notification No.54 of 2018 dated 09.10.2018 is held to be without jurisdiction. The impugned notice is therefore, quashed and set aside as Notification No.54/2018 would be applicable prospectively with effect from 09.10.2018 and therefore, the amount quantified for the period prior to 09.10.2018 towards alleged erroneous refund would not survive.
Petition is disposed of.
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2024 (11) TMI 904
Adjudication of challenge to appellate order - short payment of Goods and Services Tax - HELD THAT:- The first Division Bench directed a quantum of deposit with liberty to parties inasmuch as, petitioner could avail of its remedy upon constitution of the Tribunal and in event petitioner does not do so within time provided upon reconstitution, the department would be free to proceed.
The writ petition is disposed of.
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2024 (11) TMI 903
Challenge to order regarding tax demand based on defects highlighted by Audit Department for assessment year 2017-18 - mismatch between GSTR-3B and GSTR-2A leading to tax demand - lack of personal hearing before passing orders by the respondent - HELD THAT:- A perusal of the impugned order, dated 30.12.2023 would reveal that the respondent has once again confirmed the very same demand which was already demanded vide order dated 19.12.2023 on the similar defect, which is nothing but overlapping the earlier issue and it was the subject matter of W.P.No.7855 of 2023, which was disposed of by this and remanded the matter for fresh consideration while setting aside the earlier impugned assessment order dated 19.12.2023.
This Court is inclined to set aside the present impugned assessment order dated 30.12.2023 and remanded the matter for reconsideration. The respondent is directed to reconsider this matter and pass orders afresh after affording an opportunity of personal hearing to the petitioner.
Petition disposed off.
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2024 (11) TMI 902
Grant of anticipatory bail - non-existent Firm/Entity carried out transactions - claim of Input Tax Credit without there being actual movement of goods and as such has defrauded the government exchequer of due taxes - HELD THAT:- Regard being had to the background facts of the case, in which, the assessment has already been quashed and the matter has been remanded back to the assessment authority apart from the quashment of the criminal case instituted in Bokaro Steel City relating to a similar nature of offence, it is required to extend the privilege of anticipatory bail to the petitioner.
The petitioner accordingly is directed to surrender before the learned court below within a period of four weeks and on her surrender, she shall be released on bail on furnishing bail bond of Rs. 10,000/ with two sureties of the like amount each to the satisfaction of learned Judicial Magistrate, Jamshedpur in connection with Telco P.S. Case No. 104/2018, corresponding to G.R. Case No. 2027/2018, subject to the conditions as laid down under Section 438(2) of the Code of Criminal Procedure.
Application allowed.
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2024 (11) TMI 901
Rejection of appeal on the ground that the ten per cent has to be paid from the Electronic Cash Ledger - HELD THAT:- N/N. 53/2023 dated 02.11.2023 issued by the Ministry of Finance, Department of Revenue (Central Board of Indirect Taxes and Customs), which permitted filing of delayed appeals even beyond the period provided under Section 107 of the GST Act, that the stipulation was of paying an amount of 12.5 per cent of the amounts pending and due to be paid to the Department as against the 10 per cent prescribed by the statute. In the said Notification issued by the Central Government on the recommendation of the GST Council, it has been specifically stated that at least 20 per cent of the 12.5 per cent remaining due and payable should be paid from the Electronic Cash Ledger. Hence, even the GST Council understood the ten per cent to be enabled for payment through the Electronic Credit Ledger.
It is noticed that the Hon’ble Supreme Court has stayed the Division Bench judgment and in such circumstances, especially since consideration of the appeal on merits is the question raised, it is opined that pending decision of the Hon’ble Supreme Court, the appeal should be considered on merits.
The order in appeal dated 14.01.2023 is set aside - petition allowed.
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2024 (11) TMI 900
Challenge to adjudication order dated 19th October, 2023 - rejection of petition on the ground of time limitation - HELD THAT:- Revenue submits, there is no dispute with regard to facts in relation to filing of the appeal.
Impugned order dated 24th April, 2024 is set aside since, thereby petitioner stood deprived of hearing - the writ petition is disposed of.
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2024 (11) TMI 899
Requirement to collect GST on the diagnostic and lab services provided through third party diagnostic labs - GST has to be collected for the whole invoice amount or on the margin on the supply alone? - applicable tax rate and which SAC to be used - collection of TCS - assesse fall under the definition/meaning of an "Insurance Agent" if invoiced to an insurance company or not.
Whether the assesse need to collect GST on the diagnostic and lab services provided through third party diagnostic labs? If yes, Whether GST has to be collected for the whole invoice amount or on the margin on the supply alone and what will be the applicable tax rate and which SAC to be used? - HELD THAT:- The applicant, with regard to taxability of diagnostic and lab services provided through third party diagnostic labs, contends that they act as an aggregator for the said services for companies/insurance companies/insurance brokers; they provide access to the digital platform and digital tools, for companies/insurance companies/insurance brokers, to manage the workflows for availing the services of the said diagnostic labs / clinical establishments for their employees or group of people; as per Notification 12/2017-Central Tax, services by way of health care services by clinical establishment are exempted and thus the service is being provided by the clinical establishment to the persons using the digital platform of the applicant and the applicant is only working as an aggregator; the service mentioned by the applicant comes under the definition of e-commerce and hence the applicant is not required to collect the tax under GST.
Whether the applicant qualifies to be an e- commerce operator or not? - HELD THAT:- In the instant case the applicant owns a digital platform / mobile App. The employees or group of people of companies / insurance companies / insurance brokers i.e. recipients of service having contract with the applicant, selects the diagnostic labs or wellness providers and books specific date & time, from the list provided on the digital platform / App. Once the tests are done the diagnostic labs or wellness providers raise invoice on the applicant and the applicant in turn raises the invoice on the companies after retaining their margin - The applicant merely provided the platform for the recipients so as to enable them to select the lab from whom the services are to be procured. Once the selection is over, the labs after the tests provide the reports directly to the recipients. The invoices are raised by the labs on the applicant. Thus the applicant doesn't qualify to be an e- commerce operator.
The applicant, admittedly, adds mark up on the cost of the services procured from the diagnostic labs / wellness providers and raises invoices on their clients with the marked up value. In this scenario, the applicant has to charge GST on the whole invoice amount, being the transaction value but not merely on the mark-up value, in terms of Section 15(1) of the CGST Act 2017 - In the instant case, the services being provided by the applicant are by way of diagnosis for illness etc., in a recognised system of medicines in India and hence the impugned services being diagnostic services are covered under healthcare services and thus gets covered under SAC 9993.
Rate of GST applicable to the impugned services - HELD THAT:- In the instant case, applicant does not qualify to be "a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India" as the applicant, admittedly, is not a hospital or nursing home or clinic or sanatorium or any other similar institution, but an aggregator procuring the services from diagnostic labs. Thus the applicant do not qualify to be a clinical establishment. Therefore the second condition is not fulfilled and hence the applicant is not entitled to avail the aforesaid exemption. Thus the applicant is liable to collect GST on the diagnostic and lab services provided through third party diagnostic labs to their clients.
Collection of TCS by the applicant - HELD THAT:- As the applicant does not qualify to be an e-commerce operator, the instant question becomes redundant.
Whether the applicant falls under the definition / meaning of Insurance Agent, if invoiced to an insurance company and if yes, how the GST is applicable? - HELD THAT:- In the instant case, the services being provided by the applicant are not connected, not even remotely, with the sale of insurance policies and hence the applicant does not fall under the definition / meaning of the “Insurance Agent". Therefore the applicant has to raise invoice on par with the other companies.
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2024 (11) TMI 898
Stay of demand - direction as called upon the writ petitioner to make a pre-deposit of 20% - As decided in PPK NEWSCLICK STUDIO PVT. LTD [2024 (8) TMI 888 - SC ORDER] admitted fact that 30% of the demand has already been recovered by the respondent. ITAT shall consider the appeal of the appellant in accordance with law on its own merits
HELD THAT:- There is omission on the part of the ICICI Bank which has not complied with the order of this Court dated 09.08.2024 and instead is seeking to comply with the communication dated 15.12.2023 issued by the Office of the Deputy Commissioner of Income Tax, Central Circle 1, Delhi to them.
It is needless to observe that the order of this Court dated 09.08.2024 is subsequent to the aforesaid communication.
Direction is issued to the Branch Manager, ICICI Bank, E-30, Saket, New Delhi to comply with the order of this Court dated 09.08.2024 both in letter and spirit forthwith.
Miscellaneous Application has been filed seeking the following reliefs:
“(i) Set aside the notice dated 15.12.2023 bearing No.ITBA/COM/F/17/2023-24/1058789726(1) sent by the Respondent to ICICI Bank, Saket Branch; AND
(ii) Direct that any amount credited in the Petitioner’s bank accounts with the ICICI Bank, Saket Branch, bearing Account Nos.017105010200 and 017105009185, shall not be debited to the Income Tax Department, pursuant to their letter dated 15.12.2023; AND
(iii) Direct that normal banking operations shall resume in the Petitioner’s bank accounts with the ICICI Bank, Saket Branch, bearing Account Nos.017105010200 and 017105009185; AND
(iv) Pass such further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case.”
The prayers stated above at (ii) and (iii) are granted.
Consequently, the Miscellaneous Application stands disposed of in the aforesaid terms and the application for appropriate Orders/Directions is allowed.
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2024 (11) TMI 897
Validity of Reopening of assessment u/s 147 - As decided by HC [2023 (10) TMI 1454 - BOMBAY HIGH COURT] this is not a fit case to exercise our discretionary jurisdiction under Article 226 of the Constitution of India. At the same time, Petitioner may raise all grounds which Petitioner has before the AO in reply to the notice u/s 148. The officer shall consider the objections and points raised by Petitioner and pass such order as he deems fit
HELD THAT:- On instructions, respondents states that the respondents have no objection to the notices issued u/s 148 being quashed, as the transaction in question was between a mother and son.
In view of the aforesaid position, the impugned judgment/order is set aside, quashing the aforesaid notices. The appeal is allowed. The writ petition will be treated as allowed.
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2024 (11) TMI 896
Deduction u/s 54EC - premature cancellation of the bonds - Petitioner sought to cancel PFC bonds to utilize the sale proceeds for a property purchase in Noida, claiming mistaken advice regarding tax benefits - legislative intent behind the bonds, lock-in period of 5 years as integral to ensuring long-term capital allocation and financial stability.
HELD THAT:- The PFC bonds, are known as “54EC Capital Gain Tax Exemption Bonds – Series VIII”. This is a type of investment instrument authorized by the Income Tax Act, 1961. These bonds provide an opportunity for individuals to save on long-term capital gains taxes incurred from the sale of property or assets. By investing in these bonds, one can defer the payment of capital gains tax and enjoy the potential benefits of a reliable investment option. Such investment is held for 5 years and the bonds so acquired cannot be transferred or converted into money or any loan and neither can an advance be taken on security of such bond within 5 years from date of acquisition. Any such action would result in withdrawal of the capital gain exemption benefit.
Thus, the subject bonds issued by the Respondent fall within the category of ‘long-term specified assets’, in terms of notification dated 8th June, 2017 issued by the Ministry of Finance, and as defined in Section 54EC of the Act to mean “any bond, redeemable after five years and issued on or after the 1st day of April, 2018”. The long term specified assets/bonds can be redeemed only after 5 years from the date of the issuance due to the lock-in period under Section 54EC of the Act as amended by Section 21 of the Finance Act, 2018. Furthermore, this information with regard to the lock-in period is mentioned in Clause 13 of the information memorandum issued by the Respondent regarding the subject bonds.
In the opinion of the Court, having regard to the statutory scheme and the terms and conditions of the subject instrument, the Petitioner’s request for cancellation or redemption, cannot be accepted. The funds raised through the 54EC bonds are specifically intended to support Respondent’s financial objectives. The ‘Object of the Issue’ of the PFC Capital Gain Tax Exemption Bonds is – ‘to augment resources of PFC for meeting fund requirement’. These funds are in the nature of long term funds borrowing. This intent, combined with the five year lock-in period, imposes a clear embargo on premature redemption, as it ensures that the investments remain committed to Respondent’s financial stability and to meet the object of the Issue. This lock-in period is not a mere formality but a substantive requirement, integral to the legislative intent behind Section 54EC.
Terms and conditions governing the bonds, stipulated by the Respondent clearly restrict any withdrawal, redemption, or transfer of these bonds before the completion of the mandated 5-year period. This restriction applies regardless of whether the Petitioner has claimed the capital gains exemption or not, and regardless of any willingness on the Petitioner’s part to forgo interest, as these bonds are essentially bound by legislative and contractual rigidity. Permitting any deviation from the stipulated lock-in period would compromise the object and purpose underlying these bonds, creating an avenue for circumventing statutory obligations under Section 54EC.
The statutory framework does not just seek to incentivize tax savings but to ensure that these savings result in actual, long-term capital allocation. Allowing premature redemption through judicial intervention would not only be against the contractual terms, but also contravene the statutory intent of encouraging long-term investment. Thus, it is beyond the scope of this Court, particularly under the writ jurisdiction under Article 226 of the Constitution, to modify or rewrite the conditions stipulated for allocation of bond.
Court is of the view that the judgment in Major Amandeep Singh [2015 (8) TMI 1585 - DELHI HIGH COURT] 3does not apply to the present case. Upon issuance of the bonds to the Petitioner, the rights and obligations of both parties are governed by the specific terms of the financial instrument. Neither party can alter the same unilaterally. Any attempt would not only contravene the contractual terms, but would also be against the statutory purpose underlying the bond scheme.
Although not expressly argued, and only vaguely alluded to, the Petitioner’s claim for cancellation appears to stem from an alleged mistake of fact and reliance on misguided financial advice. Such grounds, in the opinion of the Court, do not create any enforceable right and cannot be adjudicated under Article 226 of the Constitution.
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2024 (11) TMI 895
Revision u/s 263 - assessee to be a beneficiary on account of funds received from four parties - PCIT cancelled the assessment framed u/s 147 r.w.s. 144 by directing AO to frame the assessment afresh after doing necessary verification - HELD THAT:- The assessment framed by AO cannot be said to be being erroneous nor prejudicial to the interest of revenue as these items of so-called bogus loans of Rs. 3,13,000.- from four parties did not come to the notice of the AO during the assessment proceedings warranting the addition by the AO. Therefore, we are inclined to hold that the jurisdiction exercise by ld. PCIT is bad in law.
In our opinion the assessment framed by the AO u/s 147/144 of the Act is neither erroneous nor prejudicial devoid of which the jurisdiction u/s 263 of the Act cannot be invoked.
The case of the assessee is supported by the judgment of Malabar Industries Limited [2000 (2) TMI 10 - SUPREME COURT] wherein it has been held that in order to invoke jurisdiction u/s 263 of the Act, the assessment order passed has to be erroneous as well as prejudicial to the interest of revenue and even if one of the two conditions are satisfied, even then section 263 by ld. PCIT cannot be invoked. Appeal filed by the assessee is allowed.
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2024 (11) TMI 894
Addition u/s 68 - unexplained cash credit - non proving in identity, creditworthiness, and genuineness of the share premium received by the assessee - HELD THAT:- Hon’ble Supreme Court in the case of CIT vs. Kamdhenu Steel & Alloys Ltd. [2012 (9) TMI 950 - SC ORDER] held that mere non-appearance of director cannot be held to be justified in treating the share premium and share capital as unexplained income if sufficient documentary evidences are provided. In the present case of the assessee, the shareholders were scrutinised u/s 143(3)/147 of the Act, further detailed evidences were submitted to establish genuineness of the transactions.
In this regard, we rely on the decision of Lovely Exports (P) Ltd. [2008 (1) TMI 575 - SC ORDER] wherein, it was held that once company proves the existence and authenticity of shareholders, it had discharged its burden u/s 68 of the Act. We find merit in the contention of the ld. AR.
That the premium is matter of business prerogative as held in the Coordinate Mumbai Bench of the Tribunal in the case of M/s Greek Infra Ltd. [2013 (12) TMI 949 - ITAT MUMBAI] and in the case of Trident Shelters Pvt. Ltd. [2014 (1) TMI 1224 - ITAT HYDERABAD]
That revenue cannot question the quantum of share premium in the absence of evidence of collusion or mala fide intent.
We hold that the addition made by the AO as unexplained cash credit u/s 68 of the Act is unsustainable since the assessee has sufficiently established the identity, creditworthiness and genuineness of the transaction relating to the share capital received during the relevant financial year. We, therefore, direct the Assessing Officer to delete the addition u/s 68 - Appeal of the assessee is allowed.
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2024 (11) TMI 893
Levy of penalty u/s. 271(1)(c) - defective notice u/s 274 - omnibus notice - Non mentioning of charge for which penalty is to be levied - HELD THAT:- An examination of the first notice reveal that it is in a preprinted performa, wherein both limbs of section 271(1)(c) of the Act have been mentioned.
AO has not struck off irrelevant clauses in the preprinted performa. The omnibus notice is vague. The subsequent notice is equally ambiguous as the AO has not mentioned any of the limbs of section 271(1)(c) of the Act in the notice for which the penalty is to be levied. Non mentioning of charge for which penalty is to be levied makes the notice as much defective as non striking of irrelevant clauses in the notice. Both make the notice ambiguous and vague. Hence, the proceedings arising from defective notice are vitiated.
Hon’ble Jurisdictional High Court in the case of PCIT vs. Sahara India Life Insurance Company Ltd. [2019 (8) TMI 409 - DELHI HIGH COURT] following the decision rendered in the case of CIT vs. Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] deleted penalty where the AO failed to clearly specify the limb of section 271(1)(c) of the Act for levy of penalty in the notice.
Also in the case of Mohd. Farhan A Shaikh [2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] has held that where assessment order records satisfaction for imposing penalty on one or other or both grounds mentioned in section 271(1)(c) of the Act, a defect in notice in not striking of irrelevant matter would vitiate penalty proceedings. An omnibus notice suffers from the vice of vagueness. Assessee appeal allowed.
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