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TMI Tax Updates - e-Newsletter
January 20, 2018
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Conduct of the Income Tax officials - First raising unsustainable, illegal and high pitched demands and then seeking to coercively recover the same even showing scant regard to the orders passed by highest Tribunal under the Act and for that invoking the writ jurisdiction to seek support to their such effort is nothing but an utterly irresponsible and unfair behaviour. - HC
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Taxation of profits arisen on handing over of possession of development rights together with land in terms of the shareholders agreement - The benefits represent, at best, a hypothetical income which may or may not materialise and its money value is, therefore, not the income of the assessee. - AT
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Penalty u/s 271(1)(c) - whether the assessee’s application of the TNMM in the given circumstances, can be considered as done in good faith and with due diligence? - Held Yes - No penalty - AT
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TDS liability u/s 195 - Income of non-resident agents cannot be considered to accrue or arise or deemed to be received in India when the services rendered by the non-residents and the agents were outside India and the commission was also payable or paid to them outside India. - AT
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MAT computation - amount disallowed under Sec. 14A cannot be added to arrive at the book profit for the purposes of Sec. 115JB - AT
Corporate Law
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Removal of the company from the Register of Companies - Condonation of Delay Scheme-2018 eligibility - HC allows the appellant to comply with the conditions and formalities to avail the benefit of CODS-2018 Scheme.
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Composition of certain offences - Even otherwise, the appellant has been able to place on record sufficient facts to prima facie justify as to why the delay took place in conveying the AGM and subsequent filing of the necessary documents before the ROC. In my opinion, it is a fit case where company law board ought to have allowed the petition under section 621A for compounding. - HC
Central Excise
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CENVAT credit - input sold as such - there is no provision for reversal of credit of service tax on return of goods - AT
Case Laws:
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Income Tax
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2018 (1) TMI 905
Application filed u/s 254 (2) seeking rectification - Held that:- SLP dismissed. HC order confirmed [2018 (1) TMI 860 - DELHI HIGH COURT] wherein held as already affirmed the order of the ITAT which is sought to be rectified, this Court is not inclined to interfere with its subsequent order declining to rectify the said order. Secondly, the Court finds that the ground on which such rectification was sought was far beyond the scope of the powers of rectification
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2018 (1) TMI 904
Claim for accrued for ascertain liability of interest on overdue deposits claimed - Held that:- There can be no doubt that the assessee/bank was not only aware of its liability on the particular aspect, but, in fact, was able to crystallize it and set it out expeditiously in its returns. The possibility of likelihood of the depositor renewing the overdue deposit or for that matter, the payment being made later, in no way deflects from the reality that the assessee is able to identify its liability at the time, when it filed its returns. In that sense-for the reasons spelt out in detail in Aggarwal and Modi’s case (2016 (1) TMI 790 - DELHI HIGH COURT), the liability was ascertained and not unascertained. Consequently, the question of law is answered in favour of the assessee and against the Revenue.
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2018 (1) TMI 903
Certificate issued for lower deduction of tax at 0.39 per cent u/s 197 cancelled - whether the exfacie misstatement and suppression of the hearing having been granted by stating in the petition “no personal hearing whatsoever was granted” was a material suppression i.e. by making such a statement was the petitioner likely to gain therefrom and whether it was a bona fide mistake / inappropriate drafting? - whether the suppression of the fact of hearing being granted is material in the present facts? Held that:- In this case, we find besides stating in the petition that no hearing was given, no mention of meeting the respondent no.1 with regard to these proceedings is even mentioned. We are not impressed by the submission on behalf of the petitioner that even the impugned order does not mention grant of any personal hearing to the petitioner. This does not absolve the petitioner from stating all facts fully and truly. Including the fact that a hearing (howsoever inadequate) was given to the petitioner. This fact of hearing being granted is now admitted even by the petitioner after the note sheet is produced. The affidavit dated 11th December, 2017 of Mr. Mahopatra on behalf of the petitioner, however also does not make any attempt to explain the use of the word “No personal hearing whatsoever was granted”. The only thing in support of the petitioner is that when the suppression is seen in the context of the fact, it is clear that at no time did the petitioner seek to obtain any adinterim / interim relief on the basis of above averment without notice to the other side, it could be suggestive of a mistake. We have examined the orders passed from time to time, from the 6th November, 2017 onwards, when this petition was first moved and at no time did the petitioner seek any relief without notice to the other side. Therefore, the suppression may have been on account of mistake as it is unlikely to be made deliberately as it would stand exposed on the other side having notice of the same. Admittedly, the petitioner in this case, has always moved the Court after notice to the respondents. Petition dismissed.
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2018 (1) TMI 902
Penalty u/s 271(1)(c) - unexplained income - Held that:- Admittedly, there was an unexplained income as discernible from the records maintained by the assessee. The assessee had a duty to explain and substantiate the source of such income. The assessee has an explanation of diversion of materials as retained from an abandoned Government contract, which was not fully accepted by the Tribunal. When the explanation has not been accepted by the Tribunal in the assessment proceedings, there is no reason why in the penalty proceedings the same should be considered as a bonafide explanation, especially when there is nothing more available with the Appellate Authority considering the penalty proceedings, to substantiate such diversion. Admittedly, there was no such substantiating material produced by the assessee and available with the Tribunal at the earlier stage when the assessment proceedings were considered. In such circumstances, we are of the opinion that the addition made of computation of income as available definitely comes under Explanation 1(B) of Section 271(1). - Decided against the assessee.
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2018 (1) TMI 901
Relied upon documents furnished to the petitioner - reasoned order disposing of the Show cause Notice must be passed - Held that:- Issue of show cause notice and reply is an internal mechanism, which is normally adopted by the Income Tax Department before they examine whether or not to initiate and file prosecution under the Act. There is no statutory compulsion or mandate for the same. This enables the person concerned to give and project his point of view, which is considered and examined by the authorities before they decide to launch prosecution and by the competent authority which grants sanction under Section 279 of the Act. We are, at this stage, not required to go into the question and answer whether or not the petitioner has committed any offence and therefore should or should not be prosecuted. As per the respondents, the issue relates to foreign bank accounts and whether income or amounts mentioned therein represent undisclosed income, etc. These are matters for the authorities to decide on the basis of documents available. The sanctioning authority would also decide whether or not to grant sanction. List of witness and documents would be examined keeping in view allegations made in the written complaint. In case cognizance and summoning order is passed, the person aggrieved can challenge the summoning/cognizance order in accordance with law. A pre-emptory order at this stage examining merits and de-merits on whether or not prosecution should be filed, would not be correct and warranted. As noted that during the course of hearing, controversy had arisen whether the show cause notice issued is under the Black Money Act. We need not go into this aspect for the aforestated reasons.
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2018 (1) TMI 900
Allowance of expenditure incurred towards restructuring of debenture and claim of depreciation on 'goodwill'- revenue or capital expenditure - Held that:- This issue arising herein stands concluded in favour of the Respondent-Assessee and against the Appellant-Revenue by the decision of this Court in CIT Vs. M/s. Aditya Birla Nuvo Ltd. (2017 (3) TMI 876 - BOMBAY HIGH COURT). Head Office expenses cannot be allocated to profits derived from 100% export oriented units falling under Section 10B - Held that:- Tribunal has allowed the Respondent-Assessee's Appeal by following decision of its coordinate bench in the case of Grasim Industries [2012 (8) TMI 989 - ITAT MUMBAI]. No substantial question of law Appeal admitted on the substantial questions of law at Nos. 1 and 5. 1. Whether on the facts and circumstances of the case and in law, the Tribunal was justified in directing the Assessing Officer to allow the amount claimed by way of provision for leave encashment in view of the provisions of Section 43B(f) of the Act? 5. Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in restricting the disallowance under Section 14A of the Act to ₹ 1,87,954/?
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2018 (1) TMI 899
Assessment of income from sale of plots - income from business or as capital gains - Held that:- The impugned order of the Tribunal stands rectified/modified to the extent that the issue with regard to the applicability of Section 45(2) of the Act has been restored to the Assessing Officer for fresh consideration. We are informed by counsel for the parties that neither the Revenue nor the Assessee is aggrieved by the order dated 1 January 2018 passed by the Tribunal remanding the issue to the Assessing Officer. It would be appropriate as urged by the Revenue to adjourn the hearing of these Appeals sine die to await the final factual determination with regard to the directions made by the Tribunal in paragraph 8 of its order dated 1 January 2018.
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2018 (1) TMI 898
Registration under Section 12A denied - as contended by the Revenue that the assessee provides services for which it charges users on a commercial basis and therefore, cannot fall within the charitable object, for which it was established - Held that:- We notice that both the appellate authorities have concluded that the assessee s objects are charitable; it provides basic services by way of domain name registration, for which, it charges subscription fee on annual basis and also collects connectivity charges. The assessee is the only nationally designated entity entitled to allocate domain names to its applicants who seek it in India. Apparently, it is also an affiliate national body of the ICAMM and authorized to assign .in registration and domain names in terms of Central Government s letter dated 20.11.2004. In that sense, the assessee (though not a statutory body) is carrying on regulatory work. It s case would therefore be a fortiori on a different footing than Chamber of Commerce, and other such trade bodies, set up not for profit basis but should have been held to be charitable organizations such as Bureau of Indian Standards, ICAI Accounting Research Foundation, etc. [Bureau of Indian Standards v. Director General of Income Tax (Exemption) (2012 (11) TMI 891 - DELHI HIGH COURT); ICAI Accounting Research Foundation v. Director General of Income Tax (Exemption) 2009 (8) TMI 61 - HIGH COURT OF DELHI]. No question of law arises
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2018 (1) TMI 897
Stay against the recovery of the demand - dogged approach of the Revenue to multiply the litigations in the Constitutional Courts- Held that:- The entire demand raised by the authorities below prima facie was not even sustainable when once the controversy was apparently covered by the decision of the Delhi High Court and also the Bench of the Tribunal itself at Bengaluru, in favour of assessee. Therefore, the grant of absolute stay against the recovery would have been more appropriate in the circumstances, rather than calling upon the assessee to deposit a further sum of ₹ 2.00 Crores. ITAT, perhaps to serve the interest of the Revenue leaned to some extent in favour of Revenue for the time being subject to the final decision of the appeal itself and chose to pass this order, which brought to the kitty of Revenue more than a sum of ₹ 5.00 Crores against a prima facie unsustainable demand of ₹ 22.17 Crores, still the Revenue did not feel satisfied and instead of pursuing hearing of the appeal before the ITAT, chose to file the present writ petition before this Court which is absolutely misconceived remedy availed by them. Were these officials trying to prove their superior wisdom over the wisdom of Tribunal and already rendered precedent or overawe the Tribunal by the intervention of the higher constitutional courts, even on a misconceived petition?. First raising unsustainable, illegal and high pitched demands and then seeking to coercively recover the same even showing scant regard to the orders passed by highest Tribunal under the Act and for that invoking the writ jurisdiction to seek support to their such effort is nothing but an utterly irresponsible and unfair behaviour. It is the lack of such discipline with the Government Officials which turns Government Departments as a major litigant in the Constitutional Courts, in turn depriving the Constitutional Courts to devote their time for looking into the causes of poor people, which deserve their time and attention - W.P. dismissed with exemplary costs on the officials involved in filing of this writ petition. The costs are quantified at ₹ 50,000/- to be paid by each of the Principal Commissioner of Income Tax-.
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2018 (1) TMI 896
Penalty u/s 271(1)(c) - Held that:- Undisputedly, no penalty proceedings have been initiated by the AO during the course of assessment proceedings. During the appellate proceedings, the ld CIT(A) has enhanced the income of the assessee and satisfaction has been recorded to initiate the penalty proceedings in relation to such enhancement of income by issuance of notice u/s 274 of the Act. The Coordinate Bench in the quantum proceedings, as we have noted above, has since deleted the enhancement of income so made by the ld CIT(A). Where the very basis of levy of penalty has been deleted, the penalty cannot stand by itself and the same is liable to be cancelled. In the result, the ground taken by the Revenue is dismissed.
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2018 (1) TMI 895
Computation of House Property Income - determining letting value as per provisions of Section 23(1) (a) in place of provisions of 23(1)(c) - CIT(A)) confirming the addition of deemed gross rent as against the actual casual gross rent received during the short period - Held that:- In case of a property which remained vacant for a part of the year, then Annual Letting Value (ALV) shall be deemed to be the actual rent received by the assessee in case the same is lower than the reasonable rent receivable. In the instant case of assessee, the said office premises were vacant for the major part of the year and the assessee was in receipt of actual rent of ₹ 70,000/-. Accordingly, the annual letting value should be determined u/s. 23(1)c) of the IT Act. Restore the matter back to the file of the AO for deciding afresh as per law after giving due opportunity to the assessee. Appeal of the assessee is allowed for statistical purposes.
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2018 (1) TMI 894
Penalty u/s 271(1)(c) - defective notice - Held that:- The show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 does not strike out the inappropriate words. We are of the view that imposition of penalty cannot be sustained. The plea of the the assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present case cannot be sustained and the same is directed to be cancelled. - Decided in favour of assessee.
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2018 (1) TMI 893
Revision u/s 263 - whether twin conditions viz. erroneous and prejudicial to the interest of the revenue as envisaged by the provisions of Section 263 are, prima-facie, fulfilled or not? - Held that:- The perusal of the quantum order reveals that AO has nowhere discussed the allowability / admissibility of the six items as enumerated by Ld. CIT in the show-cause notice - CIT, after perusal of Tax Audit Report, noted that these items were required to be disallowed or added back to the income of the assessee but Ld. AO omitted to do so. After perusing the quantum order, show-cause notice, we are of the opinion that Ld. AO has omitted to note those six points as reported in the Tax Audit Report while framing the quantum assessment order. The Ld. AR could not show any evidence to demonstrate that discussions on any of these items were, at all, made during quantum assessment proceedings and they same were duly noted by Ld. AO. - Decided against assessee Allowability of share issue Expenses - Held that:- As these expenses are incurred by the assessee are capital in nature being incurred to expand the capital base of the company and hence, disallowable. Therefore, additions to that extent stand confirmed. Similarly, the Ld. Sales Tax Penal charges Allowability - Held that:- Since Ld. AR could not produce any documentary evidence to prove the same, the matter being factual one, is being restored to Ld. AO for the limited purpose of verification of the stated fact as contended by Ld. AR Advances written off - write-off of certain advances given to various employees to incur expenditure on tours, miscellaneous advances etc. and write-off of earnest money deposits while making tender / bid to a potential customer - Held that:- We find that these expenses are routine business expenditure for the assessee and incurred to ensure day-to-day running of assessee’s business and therefore, allowable Commission on warranty income - as contended that the assessee undertakes the warranty of the equipment supplied by the foreign group companies - Held that:- It is uncontroverted fact that the assessee is consistently following the same method of accounting for recognition of commission income over past several years. A perusal of detailed working of the same as placed on Page No. 151 reveals that the said income has been apportioned on the basis of number of expired and unexpired warranty days, which lends strength to various arguments of Ld. AR. Therefore, without delving much deeper into the issue, the impugned addition stands deleted subject to verification of the fact by Ld. AO that this impugned income has been offered by the assessee to tax in subsequent years. Addition on account of provision for gratuity - Held that:- It is settled proposition that deduction could be allowed to assessee only against ascertained liabilities and not mere provision. The Ld. AR could not demonstrate the working of arriving at the said provision. It is also noted that the assessee did not produce any evidence in this regard before any of the lower authorities and the documents being presented before us in the form of actuarial valuation report constitute additional evidences. Hence, without delving much deeper into the issue, we restore the same to the file of Ld. AO for re-appreciation of assessee’s contention & documentary evidences and decide as per law. The assessee, in turn, is directed to substantiate his claim in this regard before Ld. AO and also demonstrate the crystallization / accrual of the liability failing which Ld. AO shall be at liberty to dispose-off the same on the basis of material available on record. This ground stands allowed for statistical purposes.
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2018 (1) TMI 892
Revenue recognized from the project - Method of accounting followed - Held that:- In the present case, the assessee is following Mercantile system of accounting therefore, the assessee was required to disclose the profit which accrued corresponding to the part of the work of the project executed by the assessee. AO was required to examine the agreement to sale for units and record whether any specified area of plot of land was allocated to the customers and significant risk relating to the said plot like price risk, any regulatory risk (related to state government or any local authority) was transferred by the assessee. He was also required to examine whether there was any restriction on the buyer to sale or transfer his interest in the property to a third person till complete sale consideration is paid. In our opinion, if the significant risk and reward are transferred to the buyer, the amounts received from the buyer to the extent of stage of completion of the project has accrued to the assessee and it should be subject to tax in terms of section 5 of the Act. Before us, the percentage of work completed by the assessee on the project, is not available and, thus, we are unable to compute the revenue recognized from the project. Set aside the order of lower authorities on the issue in dispute raised in both the appeals and restore the matter to the file of the Assessing Officer for deciding afresh in view of observation made by us above.
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2018 (1) TMI 891
Reopening of assessment - reasons to believe - Held that:- On this issue with the newly introduced Explanation-3 to Section 147 of the Act, with retrospective effect from 01.04.1989, where some courts held that the AO has to restrict the reassessment proceedings only to the issue in respect of which reasons have been recorded for reopening the assessment, and that it is not open to him to touch upon any other issue for which no reasons have been recorded as contended by the ld. Counsel for the assessee and other courts held in opposite way. Hon’ble Delhi High Court in the case of Ranbaxy Lab Ltd. (2011 (6) TMI 4 - DELHI HIGH COURT) held that there must be some nexus between “reason to believe” recorded and the assessment framed. In this case also, the AO had not made any addition on the basis of reasons recorded and try to reduce other valid claim of the assessee allowed during the assessment u/s 143(3) of the Act. It is well settled law that where two non-jurisdictional High Court’s decisions are opposed to each other, the one in favour of the assessee is required to be followed by the Tribunal. The reference, if any, required, may be made to the decision of CIT Vs. Vegetable Products Ltd. (1973 (1) TMI 1 - SUPREME Court). - Decided in favour of assessee
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2018 (1) TMI 890
Addition on account of income from house property - Held that:- There is no basis or evidence on record to estimate the rental income as done by the AO. In the result, addition so made by the AO is clearly on an adhoc basis and cannot be sustained in the eyes of law and the same are hereby deleted. In the result, ground of appeal is allowed. Addition on account of commission & brokerage - Held that:- There is no basis or evidence on record to estimate the commission and brokerage income as done by the AO. In the result, addition so made by the AO is clearly on an adhoc basis and cannot be sustained in the eyes of law and the same are hereby deleted. In the result, ground of appeal is allowed. Unexplained investment in building construction - Held that:- The assessee having failed to offer any explanation regarding the source of investment in construction of the building by the name of the Pawan Towers amounting to ₹ 1,14,75,402 during the financial year 2006-07 relevant to impunged assessment year, the addition made by the Assessing officer as so confirmed by the ld CIT(A) is hereby sustained. In the result, ground of assessee’s appeal is dismissed.
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2018 (1) TMI 889
Levy of penalty u/s 271(1)(c) - disallowing claim of depreciation on know-how, patents and trademarks - Held that:- The Tribunal in assessee’s own case [2018 (1) TMI 12 - ITAT PUNE]as of the view that slump price had to be bifurcated over the cost of tangible assets and balance consideration has to be attributed to goodwill, know-how, patents and trademarks. The Tribunal after taking into consideration the factual and legal aspects of the case and the claim of assessee, held the assessee to be entitled to claim depreciation both on tangible and intangible assets, including depreciation on non-compete fees. The claim of assessee was allowed in entirety. Consequent thereto, enhancement made by the CIT(A) in the quantum proceedings has been reduced to Nil in the hands of assessee. Consequent thereto, there is no basis for levy of penalty under section 271(1)(c) of the Act. - Decided in favour of assessee
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2018 (1) TMI 888
Capital gains - transfer u/s 2(47) - Taxation of profits arisen on handing over of possession of development rights together with land in terms of the shareholders agreement - Legal transfer given u/s 2(47)(v) - income accrued to assessee - Held that:- Even if it is assumed that the assessee was entitled to the benefits under the advance licences as well as under the duty entitlement passbook, there was no corresponding liability on the Customs Authorities to pass on the benefit of duty-free imports to the assessee until the goods are actually imported and made available for clearance. The benefits represent, at best, a hypothetical income which may or may not materialise and its money value is, therefore, not the income of the assessee. It is clear that the income from capital gain on a transaction which never materialized is, at best, a hypothetical income. It is admitted that, for want of permissions, the entire transaction of development envisaged in the JDA fell through. In point of fact, income did not result at all for the aforesaid reason. This being the case, it is clear that there is no profit or gain which arises from the transfer of a capital asset, which could be brought to tax under Section 45 read with Section 48. The consortium parties were under obligation to provide the developed land along with necessary approvals and permissions from the concerned competent authorities, i.e. GDA, having a total FSI area of 34,94,371 sq ft, i.e. an FSI area of 47,933.76 sq ft per acre of land and in case they failed to provide such FSI, then they would be liable for penal consequences and so much so the consortium parties could not withdraw their amounts fixed under the agreement. In this way, unless and until the approvals and permissions are granted by GDA, it cannot be said that any income accrued to the appellants.- Decided in favour of assessee. Admissibility of land development expenses - Held that:- Because we have already held while adjudicating the ground nos. 1 to 3 above that such development rights together with land in relation to the stipulated land under shareholders agreement dated 18th May 2007 cannot be taxed in Assessment Year 2008-09 in the absence of registration u/s 17(1A) of the Registration Act, 1908. Hence it is not necessary to decide the issues involving computation of profits and because this ground relates to the computation of profits, therefore we are not adjudicating upon the issue and this ground has become infructuous and dismissed . FCD Interest allowability - Held that:- No doubt that the debentures have been allotted by the SPV as part of the sale consideration of development rights together with land in terms of the shareholders agreement dated 18th May 2007, but because there were various obligations which had to be carried out by the assessees, more particularly obtaining of approvals and permissions and because till all the conditions are completed, the appellants could not withdraw any amount from the SPV. The accrual of interest on FCD is also linked with the transfer of development rights together with land and accordingly it is correctly credited to the WIP account. Basically, it is a revenue neutral exercise because ultimately it will increase the profits in the year as and when approval is made and the profits have been offered by the assessees.Therefore, the additions in dispute are deleted. Deemed dividend u/s 2(22)(e) - Held that:- We hold that the additions as made by the CIT (Appeals) in terms of section 2(22)(e) of the IT Act are not correct because such amounts received cannot be considered as loans and advances. Even otherwise also, the payer companies had already made their investment in capital field more than the accumulated profits and in that situation it cannot be considered that those companies were having physical possession of accumulated profits capable of being disbursed. Therefore, the additions in dispute stand deleted. Addition of cash payment u/s 40A(3) - Held that:- Provision of section 40A(3) is applicable when any expenditure has been incurred and claimed by way of debiting to the profit & loss account. In the present case, the assessee had not claimed the expenditure of ₹ 26 lakhs because the same has not been debited in the profit & loss account. Moreover, the repayment of debt is not covered u/s 40A(3) of the IT Act because the amount of ₹ 26 lakhs was paid by the appellant to Saamag Construction Ltd. as repayment of the debt, hence the addition in dispute is deleted. Allowability of Legal & Documentation Expense - Held that:- We agree with the view of the Ld. CIT(DR) that basically the admissibility or inadmissibility of the expenditure so incurred has to be seen only in those years in which the profits and gains from transfer of development rights together with land as contemplated under the shareholders agreement dated 18th May 2007 would be considered and because we are holding, in view of the judgment of the Supreme Court in the case of Pr. CIT vs. Balbir Singh Maini (2017 (10) TMI 323 - SUPREME COURT OF INDIA), that on account of the non-registration of the shareholders agreement dated 18th May 2007, the provisions of section 2(47)(v) of the IT Act cannot be applied and transactions cannot be considered as transfer for the purpose of levy of income-tax. Therefore, no specific addition on this issue is called for because even the assessee had not claimed the same by way of debiting to the profit & loss account. This ground has become infructuous. Addition on account of settlement of debts - Held that:- So-called settlement of debts is the combination of revaluation of land owned by SRPL, which have been made SPV under shareholders agreement, coupled with the chargeable interest on the amount advanced by appellant to SRPL plus the expenses required to be incurred and borne by the appellant under shareholders agreement. Therefore, in the interest of justice, we direct the AO to calculate the interest on the amount of advance made by the appellant to SRPL from the date of its advancement @ 14% per annum and tax the same in the year under appeal and out of the balance amount of so-called settlement of debt whatever amount the appellant has incurred on legal expenses of ₹ 1,46,02,000/- for increase in authorized capital of SRPL and loss on wrong registry expenses ₹ 1,43,64,501/- incurred in relation to the land of SRPL be excluded and the residual amount be treated as capital receipt not liable for tax. However, such amount of ₹ 1,46,02,000/- legal and documentation expenses and wrong registry expenses ₹ 1,43,64,501/- will not form part of WIP as claimed by the appellant against development rights together with land as discussed above. As a result, this ground is partly allowed. Unexplained expenditure u/s. 69C - disallowance was made on the basis of seized material - Held that:- When the assessee has not purchased any land from the persons mentioned in the papers, no addition can be made on the basis of such papers. The Assessing Officer has not made any independent inquiry from such personsand in the absence thereof no addition can be made. We further note that the Assessing Officer did not bring any adverse material on record or gave a finding with cogent evidence contrary to that of the assessee. AO has not brought any independent corroborative material suggesting that the assessee has purchased such land and has made the payment as recorded in seized papers. Hence, in the absence of any such action by the AO. CIT(A) has rightly deleted the addition in dispute
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2018 (1) TMI 887
Addition on account of direct expenses by invoking provisions of section 145(3) - Held that:- We find force in the submission of the assessee that when rejection of books of account by the Assessing officer u/s.145(3) is not sustained by the CIT(A), there is no ground to estimate the income by the Assessing Officer. - Decided in favour of assessee
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2018 (1) TMI 886
Penalty U/s 271B - assessee failed to keep its account audited - Held that:- As AR submitted that a consolidated audit of all the shops to whom license was granted by the Excise department, was carried out at Udaipur by the Chartered Accountant and a consolidated audit report was furnished by him in the name of AOP M/s Umrao Singh & Party (Kota Bundi) group, Udaipur and the consolidated audit report was prepared after taking into account all relevant factors of the assessee as well as of other license holders. The consolidated report in the name of AOP M/s Umrao Singh and party of which the assessee is one of the member. Once the assessment in the hands of AOP has been made then the assessment of the same income in the individual capacity tantamount to double assessment of the same income, which is impermissible in the eyes of law. Thus the Bench direct to delete the penalty levied U/s 271B of the Act. - Decided in favour of assessee
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2018 (1) TMI 885
Transfer pricing addition in respect of ‘Software development segment’ - comparability analysis - Held that:- Assessee is engaged in development, testing and maintenance of internal company software in respect of testing infrastructure capability and of specified data to be used by its A.E., thus companies functionally dissimilar with that of assessee need to be deselected from final list. Penalty u/s 271(1)(c) - whether the assessee’s application of the TNMM in the given circumstances, can be considered as done in good faith and with due diligence? - Held that:- Coming back to the Explanation 7 to section 271(1), we find that no doubt the addition of ₹ 53.27 lac has been made on account of transfer pricing adjustment in respect of the international transaction of provision of ‘Software development services’, but, the same cannot be deemed to represent the income in respect of which particulars have been concealed or furnished wrongly by the assessee. The raison d’etre is that the ALP of this transaction was determined by the assessee in accordance with the provisions of section 92C and in the manner prescribed under the TNMM in good faith and with due diligence. The Hon'ble Delhi High Court in Principal CIT vs. Mitsui Prime Advanced Composites India (P) Ltd. (2017 (4) TMI 186 - DELHI HIGH COURT) has confirmed the deletion of penalty u/s 271(1)(c) which was imposed pursuant to the transfer pricing addition in somewhat similar circumstances. - Decided in favour of assessee.
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2018 (1) TMI 884
Disallowance u/s 40(a)(i) - commission paid to non-resident commission agents by the assessee - non deduction of tds - PE in India existence - income accrued in India - Held that:- Commission was paid for services provided to the assessee out of India which was remitted directly outside India and was not received by them or on their behalf by any third party. It is also a matter of record that the assessee has furnished Form 15CA in terms of Rule 37(BB) of the Income Tax Rules which is on record. Income of non-resident agents cannot be considered to accrue or arise or deemed to be received in India when the services rendered by the non-residents and the agents were outside India and the commission was also payable or paid to them outside India. In absence of Permanent Establishment in India, there is no liability to withhold deduction of payment of commission to the foreign agents. Therefore, in as the assessee had duly discharged its duty in filing the required Form 15CA with respect to the foreign remittances, we find no reason to interfere with the findings of the Ld. CIT (A) and we dismiss the grounds raised by the department.
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2018 (1) TMI 883
Rectification under Sec. 254(2) - Held that:- The non-consideration of the CBDT Circular No. 789, dated 13th April, 2000 in the backdrop of the judgment in the case of Azadi Bachao Andolan Vs. DCIT (2003 (10) TMI 5 - SUPREME Court) and that in the case of DIT Vs. Universal International Music B.V. (2013 (4) TMI 641 - BOMBAY HIGH COURT) without confronting the same to the assessee at the time of hearing of the appeal, had thus to the said extent rendered the order passed by the Tribunal under Sec. 254(1) as suffering from a mistake which is apparent from record. We thus without expressing any view on the merits of the case recall the order passed by the Tribunal under Sec. 254(1), dated 16.12.2016, for the purpose of rectifying the order after taking cognizance of the aforesaid mistakes as are apparent from the record. - The application filed by the assessee under Sec. 254(2) is allowed
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2018 (1) TMI 882
Writing off the inventory acquired by the assessee on amalgamation - Method of valuation of inventory at lower of cost or net realizable value - disallowing deduction being difference between cost and net realizable value of certain inventory items - AO further adding the said amount to the book profits u/s 115JB by wrongly concluding it as provision for diminution in value of asset - Held that:- The assessee had demonstrated at length the specific reasons for writing off each and every item of the inventory forming part of the aggregate value of ₹ 14,40,81,661/- during the year under consideration. As the assessee company had carried the value of the assets and liability as appearing in the books of the amalgamating company, viz. Sequent Scientific Company while filing its return of income, but however, the value of the said assets and liabilities were thereafter reassessed and the fixed assets were valued as per the valuation report, while for the inventory was valued at lower of cost or net realisable value, as per the accounting policy which was followed by the assessee. Lower authorities had dislodged the claim of the assessee as regards the writing off the inventories of the amalgamating company, without placing record any material which could go to conclusively disprove the said claim of the assessee - now when the assessee had given specific reasons for having written off the stock inventories, therefore, in case if the A.O had a conviction that there was no justification for the assessee to have raised such a claim or that the same was found to be incorrect, then he remained under an obligation to have rebutted the explanation of the assessee by placing on record concrete material which would have conclusively disproved beyond doubt the authenticity of the claim of the assessee. No such exercise had been done by the lower authorities and no such material had been placed on record which could persuade us to conclude that the claim of writing off the inventory by the assessee was not found to be in order. Also unable to persuade ourselves to subscribe to the view of the CIT(A) that the claim of the assessee as regards the writing off the inventories was not to be accepted, for the reason that the items falling under the said bracket had less than one year of age. CIT(A) while arriving at the aforesaid view had lost sight of the fact that the assessee who is engaged in the business of manufacturing of bulk drugs, speciality chemicals and formulations, had specifically explained the reason for having written off the said inventories.- Decided in favour of assessee. Addition u/s 14A r.w. Rule 8D - sufficiency of own funds - Held that:- ow when the assessee had sufficient own funds of ₹ 96.55 crores available with it, therefore, it could safely be presumed that the said amount was utilized for making investment in the exempt income yielding investments of ₹ 6,08,36,459/- by the assessee during the year. We find that our aforesaid view stand fortified by the judgment of the Hon’ble High Court of Bombay in the case of Commissioner Of Income-tax Vs. HDFC Bank Limited. (2014 (8) TMI 119 - BOMBAY HIGH COURT). We further find that the ld. A.R had averred before us that as the assessee had not received any exempt dividend income during the year under consideration, therefore, there was no occasion for making any disallowance under Sec.14A MAT computation - without prejudice to our aforesaid observations that no disallowance under Sec. 14A is called for in the hands of the assessee, we find that the contention of the assessee that the lower authorities had erred in failing to appreciate that the disallowance under Sec. 14A is not to be considered for computing the MAT liability of the assessee under Sec. 115JB is no more res integra in light of the judgment in the case of CIT Vs. Bengal Finance & Investments Pvt. Ltd. (2015 (2) TMI 1263 - BOMBAY HIGH COURT) wherein held that amount disallowed under Sec. 14A cannot be added to arrive at the book profit for the purposes of Sec. 115JB of the Act. - Decided in favour of assessee
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2018 (1) TMI 881
Disallowance of interest expenditure - sufficient funds of its own for making the investments - Held that:- Notably, major part of the interest free loans are continuing from the preceding assessment years and only an amount of ₹ 10,00,000/– has been advanced to one person in the impugned assessment year. It is also established on record that the assessee was having huge interest free fund available with it not only take care of the interest free loans but also the amount spent in construction of factory premises. CIT(A) has recorded a categorical finding of fact that the borrowed funds were exclusively utilized for export of diamonds. Therefore, when the assessee was having sufficient interest free funds available with it to take care of the interest free loans and construction of factory premises, no disallowance out of interest expenditure can be made in view of the ratio laid down in case of Reliance Utilities And Power Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT]- Decided in favour of assessee
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Customs
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2018 (1) TMI 880
Principles of Natural Justice - stand of the department is that certain documents are not available, the rest are already on record - Held that: - If the case of the petitioners is that they are in possession of copies of any of the additional documents, though the department contends that the same are not available, it would be open for the petitioners to produce the same before the adjudicating authority. The adjudicating authority shall proceed afresh after enabling the petitioners to produce additional documents if they so desire and also give opportunity to participate in the proceedings and make submissions - appeal allowed by way of remand.
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2018 (1) TMI 879
Interpretation of Statute - “offence report” as used in Regulation 20(1) of 2013 Regulations - time limit for issuance of Offence Report - suspension of CHA License - Held that: - the suspension order dated 31.03.2017 was based upon the offence report, and therefore the show cause notice under Regulation 20, dated 14.07.2017, would be clearly barred by the limitation as it was issued more than 90 days after the offence report was submitted. The SCN dated 14.07.2017 initiating proceedings under Regulation 20 of the 2013 Regulations quashed, as it has been issued after 90 days from the date of receipt of offence report - petition disposed off.
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2018 (1) TMI 878
Forfeiture of CHA License - revocation of security deposit - penalty - time limitation of Inquiry Report - back dated inquiry report - Held that: - the Inquiry Officer had submitted his report dated 14th November, 2017, before the restraint order was passed on 17th November, 2017. This report was served on the petitioner on 23rd November, 2017 vide communication posted on 22nd November, 2017 - The counter affidavit thus accepts and admits that the respondents had not furnished statements and other documents relied upon by them. These were partly furnished in the court on 7th December, 2017 and recently in the form of CD-ROM. Hard copy has also been furnished to the petitioner. The Inquiry Report dated 14th November, 2017 is quashed - A fresh inquiry would be held by the Inquiry Officer in terms of the the Regulations without being influenced by the earlier Inquiry Report - matter on remand.
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Corporate Laws
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2018 (1) TMI 877
Removal of the company from the Register of Companies - Condonation of Delay Scheme-2018 eligibility - Held that:- The request of the petitioners made before us is bonafide. Given the fact that the action of the respondents for striking off the name of the company from the Register of Companies maintained by the respondent no.2 is itself pending consideration before the NCLT, the petitioners deserve to be fairly given an opportunity to avail the benefit of CODS-2018 Scheme. In view of the above, it is directed as follows: (i) The petitioners may file all the requisite returns in relation to the company in order to enable them to avail the benefits under the CODS-2018 Scheme; (ii) The petitioners would also submit the necessary application under CODS-2018 Scheme along with its requisite charges; (iii) The aforesaid documents and applications will be submitted online to the Registrar of Companies.
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2018 (1) TMI 876
Disregard to the law and the principles of natural justice by NCLT - application seeking initiation of contempt proceedings - not framing the formal charge or not communicating in any manner the gravamen of the allegations on which the petitioners are to answer the charge of contempt - Held that:- Undoubtedly, after the facts have been gathered and process initiated and particularly in the event of cognizance eventually being taken of contempt under the Contempt of Courts Act, the NCLT will be within its jurisdiction and power to enforce appearance and attendance. In absence of separate rules to govern the procedure to be followed by NCLT for exercise of power to punish for contempt, the NCLT is to follow the general rules. The statute and the rules, as extracted earlier, permit and authorize NCLT to “regulate” its own procedure [S. 424] and “be guided by the principles of natural justice” [see S. 424 read with Rules 11, 34 and 51]. There is no merit whatsoever in the grievance raised by the petitioners that the NCLT has flouted the law and the principles of natural justice by not framing the formal charge or not communicating in any manner the gravamen of the allegations on which the petitioners are to answer the charge of contempt. At the cost of repetition, one may say that the stage where formal charge (or notice of accusations) would require to be framed so as to inform the party in question of the allegations he is required to meet or the conduct he is required to explain, is yet to arrive. The procedure envisaged in Section 17 of Contempt of Courts Act, quoted earlier, would kick-in after and in the event of NCLT recording a finding that prima facie case of contempt is made out and thereby taking formal cognizance and summoning the parties in question to stand trial. NCLT, rather than acting in hurry or undue haste, as is alleged, has taken the neutral course of treating the application seeking initiation of contempt proceedings or for the parties in question to be asked to purge, merely as an application filed in the wake of its order dated 13.07.2017. The decision as to whether or not a prima facie case of willful disobedience, defiance or commission of any act constituting contempt is made out, would undoubtedly be taken by the NCLT after it has secured the replies and considered the contentions having heard the parties in question. The argument that NCLT has acted arbitrarily, or with bias, is without basis. By giving opportunity to show cause, it has instead acted in most fair manner, following the spirit of the rules. [Rule 59]. As regards the grievance that some of the parties shown in the list of contemnors were not even properly served and yet proceeded ex parte, all that needs to be said is that, if such were the facts, it is a matter of irregularity of the proceedings. This court is confident that if any such lapse has occurred, and brought to the notice of NCLT, it would take suitable corrective action and pass the necessary orders in terms of rules. [Rule 49(2)]. This, by itself, cannot be allowed to be used by the petitioners to impel this court to interdict in exercise of the writ jurisdiction. The petitioners have not been able to show violation of the principles of natural justice in the proceedings thus far conducted by NCLT on the contempt application. As noted above, the said proceedings cannot be said to be without jurisdiction. There is no element of arbitrariness as necessitates the writ court’s intervention. Thus, this court declines exercise of writ jurisdiction.
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2018 (1) TMI 875
Composition of certain offences - Held that:- There are no reasons as to why the matter should not have been compounded. Merely because the court did not compound the matter cannot be a ground for the CLB to not compound the offence. As in the case filed by Shri Shubhinder Singh Prem [2018 (1) TMI 830 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] that ROC appears to have taken a stand that it has no objection to compounding of the offences where one of the co-accused is Shubinder Singh Prem. I see no reason as to why other appellants herein should also not be granted the same benefit as that of Shubinder Singh Prem. At best, the appellant herein are similarly situated as of Shubinder Singh Prem, if not better of. Even otherwise, the appellant has been able to place on record sufficient facts to prima facie justify as to why the delay took place in conveying the AGM and subsequent filing of the necessary documents before the ROC. In my opinion, it is a fit case where company law board ought to have allowed the petition under section 621A for compounding. Appeal is allowed. The alleged offences committed under section 159 of the Companies Act, 1956 are compounded. ROC will communicate the compounding fees to the appellant.
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2018 (1) TMI 874
Winding up petition - quantification of debt - Held that:- The debt in the present case is undisputed. Only dispute is of quantification. Keeping in view the undisputed facts that there are confirmed dues payable to the petitioner company I admit the present petition. The Official Liquidator attached to this court is appointed as the Provisional Liquidator. He is directed to take over all the assets, books of accounts and records of the respondent-company forthwith. The citations be published in the Delhi editions of the newspapers “Statesman” (English) and “Veer Arjun” (Hindi), as well as in the Delhi Gazette, at least 14 days prior to the next date of hearing. The cost of publication is to be borne by the petitioner who shall deposit a sum ₹ 75,000/- with the Official Liquidator within 2 weeks, subject to any further amounts that may be called for by the liquidator for this purpose, if required. The Official Liquidator to take all further steps that may be necessary in this regard to protect the premises and assets of the respondent-company.
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2018 (1) TMI 873
Non-accounting of the insurance amount - non-submission of the Statement of Accounts, from the date of Original Application within 15 days of the order of the Appellate Tribunal - Action of DRAT, Chennai in directing DRT, Bangalore, to dismiss original application, for non-submission of statement of accounts to the Tribunal - Procedure to be followed by the Tribunal, when application is filed - jurisdiction conferred on the Debts Recovery Tribunal to adjudicate the claim - Held that:- When a specific procedure to adjudicate a claim/counter claim/set off, is envisaged in Rule 19 of the RDBI Act, 1993, the DRAT, Chennai, has committed a patent error in directing dismissal. Rules of natural justice are foundational and fundamental concepts of law. Principles of natural justice are part of the procedure, in the decision making process, involving the rights of parties. Statement of accounts, would reveal, the loan availed, amounts paid, and amount transferred by any other institution, in the case on insurance claim amount. Even taking it for granted that such statement is not filed, still it is always open to both parties, to adduce evidence, in Debts Recovery Tribunal, Bangalore, in support of their rival contentions. Public money to the tune of ₹ 21,76,42,758.42 is involved. Action of DRAT, Chennai in directing DRT, Bangalore, to dismiss original application, for non-submission of statement of accounts to the Tribunal, cannot be approved. When huge public money is involved, DRAT, Chennai, ought to have directed, DRT, Bangalore, to proceed with the matter, on merits. Going through the order impugned, it could be deduced that for the alleged non-accounting of the insurance amount, DRAT, Chennai, condemned the bank, ordered cost, in case of failure of submission of statement of accounts within three days and also gone to the extent of directing dismissal of O.A.. DRAT, Chennai and thus, committed a patent and grave error, which cannot be remedied and rectified, by review, as the order made in M.A. No.131/2013 dated 11.03.2015, has already been given effect to, by DRT, Bangalore. When violation of principles of natural justice is per se apparent on the face of record, High Court, while exercising jurisdiction under Article 227 of the Constitution of India, cannot be a mute spectator and refuse to entertain a revision petition. High Court, should step in and correct the manifest injustice. We cannot subscribe to the directions of the Appellate Tribunal to dismiss Original Application. Order requires to be set aside. Accordingly, set aside.
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Insolvency & Bankruptcy
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2018 (1) TMI 906
Corporate insolvency process - 'existence of dispute' - Held that:- In the present case, we find that there is an 'existence of dispute' and a notice of dispute has been received by the 'Operational Creditor'. In the aforesaid background the Adjudicating Authority rightly rejected the application filed by the appellant under Section 9 of the I & B Code.
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Service Tax
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2018 (1) TMI 872
Maintainability of petition - requirement of pre-deposit - Held that: - entire service tax payable on reverse charge basis on the commission paid to the agents, has been paid. The said position is admitted and accepted by the respondents and is also not challenged and contested in the order-in-original. The contention of the respondent is that the petitioner must also pay in addition and over and above 12% service tax, the amount received from the agents under the mutual agreement in view of Section 73A (2) notwithstanding the payment made. As the petitioner has paid full amount of service tax, which is an accepted and admitted position, on reverse charge basis on the commission payment, we would direct the Tribunal not to dismiss the appeal preferred by the petitioner on the ground of “pre-deposit” under direction (ii), provided the petitioner has made pre-deposit in accordance with law in respect of other adjudication subject matter of the order-in-original dated 29th January, 2015. Petition disposed off.
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Central Excise
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2018 (1) TMI 871
Clandestine removal - chewing tobacco - compounding scheme - Held that: - The appellant is not availing the compounding scheme at the time of manufacture of chewing tobacco. So, the appellant was not paying any duty - it is evident that the appellant was manufacturing the chewing tobacco without paying any duty in the clandestine manner. When it is so, then then there is no reason to interfere with the impugned order. Matter remanded to the original authority to verity whether there was any manufacturing activity for the period Jan. to May 2013 or not and levy the duty and penalty for this period, accordingly, but by providing reasonable opportunity to the appellant.
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2018 (1) TMI 870
CENVAT credit - input sold as such - GTA service in respect of Raw Petroleum Coke (RPC) - whether Service Tax credit paid on GTA on the said input is to be reversed as the Input had been sold as such instead of using it in the manufacture of final product? - Held that: - The Hon’ble Punjab & Haryana High Court in the case of Commissioner of Central Excise, Chandigarh-I Vs. Punjab Steels [2010 (7) TMI 252 - PUNJAB AND HARYANA HIGH COURT], rejected the appeal filed by the Revenue on the identical situation, where it was held that there is no provision for reversal of credit of service tax on return of goods - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 869
CENVAT credit - capital goods - Concrete Sleeper - Held that: - the Tribunal in a recent decision in the case of Ultratech Cement Limited Vs. Commissioner of Customs & Central Excise [2016 (9) TMI 284 - CESTAT HYDERABAD] on an identical situation allowed the credit on Mono Block Concrete Sleeper for Railway track - also, Hon’ble Supreme Court in the case of JayaswalNcco Limited Vs. Commissioner of Central Excise, Raipur [2015 (4) TMI 569 - SUPREME COURT] allowed the credit on Railway Track - appeal dismissed - decided against Revenue.
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CST, VAT & Sales Tax
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2018 (1) TMI 868
Suo motu proceedings for revision - time limitation - interpretation of statute - Section 23(4)(a) of O.S.T.Act read with Rule 80 of the O.S.T.Rules - whether under Rule 80 of the Rules, revisional proceedings are to be concluded from the date of passing of the final orders passed within a period of three years sought to be revised or the proceedings if initiated within three years can be concluded beyond the period of three years? Held that: - The purpose of Rule 80 is to give finality to the suo motu proceedings initiated by the Asst. Commissioner within a specified period and the same can be done after proper interpretation is given that the proceedings are to conclude and revision orders passed within a period specified in the Rule - the entire Rule 80 cannot be read in a disjoined manner. On reading of the Rule in a joint manner would make it clear that for revising an order within a period of three years after providing opportunity to the assessee and calling for the records, the revision order itself has to be passed within a period of three years. Passing of the order dated 05.09.1996 in Annexure-3 which was beyond the period of three years from the date of the order sought to be revised, is liable to be quashed as also the order of the Commissioner dated 05.06.1999 in Annexure-4 - petition allowed - decided in favor of petitioner.
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2018 (1) TMI 867
Principles of Natural Justice - petitioner has stated in the petition that an application for rectification of the mistake which is apparent according to her on the face of the record was not entertained. The rectification application is dated 14th July 2017 - The grievance is that the Appellate Authority as well in a short, cryptic and virtually unreasoned order dismissed the petitioner's appeal. Held that: - Since the rectification applications are on file of the Assessing Officer and the petitioner desires to first press the same, we direct that the Assessing Officer shall consider the rectification application in accordance with law - In the event the rectification application is allowed then nothing would survive in the appeal which is filed before the Appellate Authority and depending upon the modifications or changes effected in the assessment order, the petitioner would have to decide whether to further challenge it. No opinion expressed on the merits of the controversy. Petition disposed off.
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2018 (1) TMI 866
Validity of assessment order - TNGST Act - penalty u/s 16(2) of the Act - grievance of the appellant / writ petitioner is that despite the fact of seizing of C.P.U. by the Central Excise Department and without giving any personal hearing or opportunity, the assessment order, dated 16.03.2009, was made by the respondent - Held that: - The assessment order was issued on 27.02.2004. The pre-revision notice was issued on 28.02.2006 for which the petitioner has submitted his response on 20.04.2006 and thereafter, submitted one more representation on 06.03.2009 praying for time to file objection for the reason that the records is in C.P.U., which was seized by the Central Excise Department. However, it was rejected and the impugned order came to be passed on 16.03.2009. In the considered opinion of this Court, in the light of the said fact, Section 16(1)(a) of the TNGST Act would not come to the aid of the appellant / writ petitioner. Before passing the revision order, the dealer should be given reasonable opportunity and personal hearing, if required so, as per Section 22(4) of the TNVAT Act, 2006. No order of revision should be made without affording an opportunity to the dealer as provided under Sections 22, 25, 27 of the Act. The impugned order, dated 02.06.2016, passed in W.P.(MD).No.2931 of 2009 as well as the impugned order, dated 16.03.2009, passed by the respondent are set aside subject to the condition that the appellant / writ petitioner shall deposit 15% of tax admitted by the appellant / writ petitioner to the credit of the respondent - Petition allowed in part.
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2018 (1) TMI 865
Validity of assessment order - principles of Natural Justice - works contract - case of petitioner is that the third respondent did not afford an opportunity of personal hearing, though the revision of assessment has been done under Section 27 of the said Act - Held that: - Courts have held that an opportunity of personal hearing is mandatory when revision of assessment is sought to be done under Section 27 of the said Act - In the instant case, apart from levy of tax, there is also an order levying penalty under Section 27(3) of the said Act. Therefore, it is more necessary that an opportunity of personal hearing should be granted and that the opportunity should be an effective opportunity and not an empty formality. The matter is remanded to the third respondent for a fresh consideration - petition allowed by way of remand.
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