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TMI Tax Updates - e-Newsletter
January 9, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Securities / SEBI
PMLA
CST, VAT & Sales Tax
Indian Laws
TMI SMS
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Provisional release of detained goods - If the goods are of perishable nature, then it is always open for the writ applicant to prefer an application under Section 67(6) of the Act for the provisional release of the goods and the conveyance. If any such application is filed by the writ applicant, then the respondent No.2 shall immediately look into the same and pass an appropriate order in accordance with law. - HC
Income Tax
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Addition u/s 68 - unexplained cash credit - credit worthiness of shareholders/investors to invest such huge amount - Genuineness of transactions - the assessee has discharged its onus by furnishing the necessary details such as copy of PAN, driving license, ITR, confirmation of the parties etc. in support of identity of the parties. - Additions deleted - AT
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Penalty u/s 271(1)(c) - Addition u/s 68 - Head changed from income under “PGBP” (as shown by the assessee) to addition U/s 68 - That there was some tax sought to be evaded by assessee, is a necessary condition for imposition of penalty U/s 271(1)(c) - The allegation of the Ld. CIT(A) that the assessee had the bogus income or bogus credit, is pointless, because the corresponding amount was already included in the returned income of the assessee. - AT
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Exemption u/s 11 - receipts from the business of developing, coordinating plants and implementing the rail infrastructure projects, etc. for Indian Railways, exceeded the limit provided in proviso to section 2(15) - Figures quoted by the Assessing Officer for inferring that the assessee is engaged in profit motive activity in large scale is totally absurd in light of the above said figures. Hence, in our considered opinion the finding given by the Assessing Officer that assessee is engaged commercial and profit motive activity is totally unsustainable. - AT
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Depreciation on the expenditure incurred for construction of Amritsar Bus Terminal project on build, operate and transfer (BOT) basis - the assessee is entitled to claim deprecation as per specified rate at 25% - Once the claim of the assessee towards depreciation allowance is accepted, the deduction allowed by the AO towards allocated cost of project, naturally needs to be withdrawn - AT
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Registration u/s 80G(5)(vi) denied - CIT(E) held that the assessee-trust is a private religious trust and therefore, cannot be held as a charitable trust within the meaning of Section 2(15) - Having granted registration U/s 12AA of the Act which continues to remain in force and which has not been withdrawn as on date, the main character of the assessee-trust as that of the public trust cannot be challenged in the impugned proceedings. - However, for submissions in relation to Temple related activities, mater remanded back - AT
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Validity of reopening of assessment - Pr. CIT has granted the approval in a mechanical manner by putting only “Yes” which is not valid for initiating the reassessment proceedings. Thereafter, the AO has mechanically issued notice u/s. 148 of the Act. The reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. - AT
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Addition of burning losses during the process of manufacture of ingots - during the year the burning loss in the assessee’s plant was to the extent of 5.81% which is accurate and as per consumption and production of the finished goods. The addition in dispute is not tenable. - AT
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Rectification u/s 254 - ITAT refused to admit additional ground - Having found that the recording of satisfaction by the AO of the searched person is mandatory; which is the question of law, what remained was only to call for the records of the assessment proceedings of the appellant and peruse the same to find out the satisfaction recorded before transmitting the files to the AO of the appellant. We are hence satisfied that the ground necessarily has to be admitted and the Tribunal committed a mistake in refusing the admission of such ground. - HC
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Disallowance u/s 40(a)(ia) - Failure to Deduct TDS - Assessee has not disclosed the freight receipts from the Exporters and the net freight payment made which is covered u/s 194C as payment to a sub-contractor - It is claimed the payment was received on behalf of others - matter remanded back to reconsider the submissions - HC
Corporate Law
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Writ appeal against writ petition entertained by the Ld. Single Judge - private parties - mismanagement and oppression of majority shareholders - Material on record discloses that the dispute between the first respondent company and its shareholders, under challenge, is purely a civil dispute. The remedy under Article 226 of the Constitution of India is available against a State or authority or instrumentality of the State, falling within the ambit of the definition "State" under Article 12 of the Constitution of India - there is an error in exercising the jurisdiction under Article 226 of the Constitution of India - HC
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Disqualification of Director - deactivation of DIN - It cannot but be held that the operation of the 2014 and 2018 Amendments to the 2013 Act are prospective in nature - To be specific, the amendment to Section 164(2), with effect from April 1, 2014 has to be applied prospectively. The three-year default contemplated therein has to commence from the financial year 2014- 2015 (April 1, 2014 - March 31, 2015) and end in the financial year 2016-2017 (ending on March 31, 2017). - HC
VAT
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Karnataka VAT - Effect of Conversion of partnership firm into joint stock company - Carry forward deduction of unabsorbed contractor payments - the adjudicating authority as well as the first appellate authority allowed the claim but tribunal did not - the finding recorded by the tribunal that the petitioner had not substantiated its claim for deduction of excess unabsorbed sub contractor payments before the adjudicating as well as first appellate authority is perverse and the aforesaid finding is therefore, set aside. - HC
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Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - The petitioner is entitled to the inclusion of ‘High Speed Diesel Oil’ as a commodity in the registration certificate. Let this exercise be carried out within a period of four (4) weeks from date of uploading of this order. The request of the petitioner for issuance of ‘C’ Forms is allowed - HC
Case Laws:
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GST
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2021 (1) TMI 257
Release of detained consignments along with vehicle - detention on the ground that the supplier has not produced documents matching with its original destination - HELD THAT:- Petitioner submitted that his client is willing to accede to her suggestion and prayed that the respondents be directed to complete the adjudication without any further delay. The petitioner is directed to furnish a bank guarantee, drawn on a nationalised Bank, to secure the sum mentioned in Ext.P7 notice; and if this is done, the respondents shall release the consignment, along with the vehicle to them without any avoidable delay - the learned Government Pleader is directed to communicate the contents of this judgment to the respondents, so that the petitioner, if they are able to furnish the bank guarantee today itself, can obtain release of the vehicle without any delay.
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2021 (1) TMI 256
Detention of goods alongwith the vehicle - Roto Fabric Cloth Bag - allegation is that product is actually cotton bags and therefore, within the sweep of Section 31 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- It is indubitable that, at this stage, it will not be proper or prudent for this Court to enter into the merits of the controversy, since it will involve assessment of factual aspects and issues which is possible only through a a proper enquiry, following due procedure as per law. The petitioner must be given the latitude of having his articles released on the strength of sufficient security, which the petitioner accedes by way of a bank guarantee - on the further condition that the respondent completes the statutory adjudication within a time frame, after obtaining a sample of the bag in the presence and acknowledgment of the petitioner - it is directed that the petitioner to furnish a bank guarantee, drawn on a Nationalized Bank, for the amount covered by Ext.P7; and if this is done within a period of one week from the date of receipt of a copy of this judgment, the respondent shall release the articles to the petitioner, after taking a sample of the bags in the presence and acknowledgment of the petitioner.
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2021 (1) TMI 255
Provisional release of detained goods - Tobacco products - whether the goods and the conveyance are liable to be confiscated or not? - HELD THAT:- The authority has yet to take the final decision as to whether the goods and the conveyance are liable to be confiscated or not. The learned counsel appearing for the writ applicant pointed out that a detailed reply has been filed to the notice in Form GST MOV 10, however, no final decision has been taken till this date. He further pointed out that the goods came to be detained way back on 6th November 2020 and they are perishable in nature being Tobacco products. If the goods are of perishable nature, then it is always open for the writ applicant to prefer an application under Section 67(6) of the Act for the provisional release of the goods and the conveyance. If any such application is filed by the writ applicant, then the respondent No.2 shall immediately look into the same and pass an appropriate order in accordance with law. Application disposed off.
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2021 (1) TMI 254
Detention of vehicle alongwith the goods - Appealable order or not - violation of Rule 138 of the GST Rules - detention on the ground that E-Way bill issue had expired few hours before the vehicle was detained - HELD THAT:- When the procedure required under the said provision has been apparently followed, an interference under Article 226 is not warranted. The legislative scheme discernible from Section 129 of the Act contemplates compliance of natural justice. Since after detention, Ext.P6 notice was issued and an order was passed after giving an opportunity of being heard, this Court is prima facie of the view that this is not a fit case to invoke Article 226 of the Constitution of India. In such circumstances, it is ideal to relegate the petitioner to the appellate remedy available under Section 107 of the Act. However, since the goods have been detained and has been lying under detention, the same can be released if the petitioner furnishes a bank guarantee, for the amount demanded in Ext.P8 within one week from today. If the petitioner furnishes a Bank Guarantee for the entire amount demand in Ext.P8 within seven days from today, the goods and vehicle detained under Ext.P8 order shall be released to the petitioner forthwith. If the petitioner fails to file an appeal within the period prescribed under the law, the Bank Guarantee can be encashed. Petition disposed off.
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2021 (1) TMI 251
Validity of Section 17(5)(c) and 17(5)(d) of CGST Act - utlra vires of Article 14 of the Constitution of India - seeking that, Input Tax Credit is available on GST paid on goods/services used in construction of immovable property including civil works used in furtherance of business - ITC on on goods/services used in construction of immovable property, including in civil works connected with the immovable property but not claimed in the GST return for the financial year 2019-20 - HELD THAT:- Let notice be issued to the learned Attorney General of India and Advocate General of the State. The notice shall be made returnable within four weeks. The steps be taken within a week through normal mode as well as registered post.
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2021 (1) TMI 249
Recovery of interest payable on delayed payment of tax - whether the interest chargeable thereupon would accrue from the date of deposit of the tax or from the date of filing of the return? - petitioner during course of submissions, seeks to confine his consequential reliefs to the financial year 2017-18 while seeking liberty to assail the respective demand notices for the years 2018-19 and 2019-20 in separate writ petitions - Section 79 of the CGST Act read with Section 75(12). HELD THAT:- Learned counsel for the respondents CGST and the State of Jharkhand both pray for and are allowed four weeks' time to file counter affidavit. Rejoinder, if any, be filed within two weeks thereafter. Matter be listed after six weeks.
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2021 (1) TMI 218
Rectification of mistake in SHRI JOTBIR SINGH BHALLA, DIRECTOR-GENERAL OF ANTI-PROFITEERING, CENTRAL BOARD OF INDIRECT TAXES CUSTOMS, VERSUS M/S. SUNCITY PROJECTS PVT. LTD., [ 2020 (12) TMI 888 - NATIONAL ANTI-PROFITEERING AUTHORITY ] - HELD THAT:- In the above case, the 5th and 6th lines of the Para on page No. 26 instead of deposited in the CWFs of the Central and the Haryana State Government as per the details given above would be read as passed on to all the eligible buyers.
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Income Tax
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2021 (1) TMI 260
Reopening of assessment u/s 147 - Disallowance u/s 40(a)(ia) - Failure to Deduct TDS - Assessee has not disclosed the freight receipts from the Exporters and the net freight payment made which is covered u/s 194C as payment to a sub-contractor - It is claimed the payment was received on behalf of others - HELD THAT:- As brought to the notice of this Court by the Learned Counsel for the Petitioner that after the filing of the Writ Petition, there has been amendment to Section 40(a)(ia) of the IT Act and that the Hon'ble Supreme Court of India in Commissioner of Income Tax, Kolkata XII -vs- Calcutta Export Company [ 2018 (5) TMI 356 - SUPREME COURT ] has held that the said amendment would have retrospective applicability from the date of its insertion with effect from the assessment year 2005-2006 in order to remove the unintended consequences which were causing grave and genuine hardships to the assessees and remedy that position In Commissioner of Income Tax -vs- Cargo Linkers [ 2008 (3) TMI 619 - DELHI HIGH COURT] where in recognition of the fact that similarly placed clearing and forwarding agents in the industry had not been deducting tax at source till 31.03.2005, it was held that since the contract is actually between the exporter and the airline, and the clearing and forwarding agent is only an intermediary, it is not the person responsible for the deduction of tax at source in terms of Section 194-C Taking into account the peculiar features of this case, it shall be incumbent upon the Respondent to afford opportunity of personal hearing to the Petitioner and thereupon, the Respondent shall deal with each of the contentions raised by the Petitioner, uninfluenced and uninhibited by the earlier views expressed by the Respondent in the matter, and pass reasoned orders on merits and in accordance with law and communicate the decision taken to the Petitioner under written acknowledgment.
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2021 (1) TMI 252
Condonation of delay - whether this Court should condone the delay of 342 days in preferring the Tax Appeal? - transaction of purchase and subsequent sale of the IDFC Deep Discount Bond and UPSFC - HELD THAT:- In the overall view of the matter, we have reached to the conclusion that we should give one opportunity to the applicant. The applicant is a cooperative bank and is not going to derive any personal benefit if the delay is condoned and the Tax Appeal is heard on the questions of law as proposed in the memorandum of the Tax Appeal. We should not overlook the fact that there has been some lethargy on the part of the bank in pursuing the matter. However, the lethargy is not of such a type that the delay should not be condoned. The notices under Sections 143(2) and 142(1) of the Act were issued on 14th September 2009. Ultimately, the Assessing Officer finalized the assessment treating the transaction of purchase and subsequent sale of the IDFC Deep Discount Bond and UPSFC as not in the nature of banking but as a speculation business. Ultimately, the Assessing Officer made an addition of ₹ 75,05,000=00. The appeal filed by the applicant herein before the Commissioner of Income Tax (Appeals) also came to be dismissed. Ultimately, the appeal was filed before the Tribunal, and in the absence of any counsel appearing for the applicant, the appellate tribunal dismissed the appeal in limine. We are inclined to condone the delay and hear out the Tax Appeal on merits, i.e. on the two questions of law as proposed. In the result, this application is allowed. The delay of 342 days in filing the Tax Appeal is hereby condoned.
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2021 (1) TMI 244
Rectification u/s 254 - Assessment u/s 153C - ITAT refused to admit additional ground - additional ground raised is only with respect to the satisfaction required to be recorded under Section 153C, which could have been verified on a perusal of the assessment records - HELD THAT:- Having found that the recording of satisfaction by the AO of the searched person is mandatory; which is the question of law, what remained was only to call for the records of the assessment proceedings of the appellant and peruse the same to find out the satisfaction recorded before transmitting the files to the AO of the appellant. We are hence satisfied that the ground necessarily has to be admitted and the Tribunal committed a mistake in refusing the admission of such ground. We hence set aside the impugned order and direct the Tribunal to call for the assessment proceedings from the Department and ensure that the satisfaction is recorded u/s 153C by the AO of the persons searched. Here we have to observe that if at all a question of law is raised from the original order in appeal, it can only be one against refusal of the Tribunal to admit the additional ground. If the High Court finds it in favour of the assessee then what remains is only the examination of records. The Tribunal has found; which cannot be otherwise, that the satisfaction has to be recorded as per the statutory provision. What remained was only examination of the records; which refusal makes it an error apparent from the face of the record. There can arise no contrary or conflicting opinion on this since the interpretation of the provision, as to the satisfaction being mandatory is crystal clear. We fail to understand what evidence requires to be produced by the assessee to substantiate their ground. The Tribunals should be more pragmatic and the recording of the satisfaction could have been verified with lesser effort than that involved in making copious extracts from the original order; in the order impugned. Matter restored before the tribunal.
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2021 (1) TMI 241
Remedy of appeal as enshrined under the provisions of Section 260 A - Dismissal of appeal against assessment order u/s 153A - rectification of alleged mistakes apparent also dismissed - A statement is filed on behalf of the respondents and it is stated therein that the assessee had not filed return of income and since details of payment received by the assessee was seized from the Medical College where proceedings u/s 132 took place, notice u/s 153C was issued - HELD THAT:- The plain and simple reading of Section 260A of the Income Tax Act reveals that appeal to the High Court can be filed within a period of 120 days. The Tribunal while examining the application for taking out additional charges rejected the same on the sole ground that no additional evidence or material was placed. Even attempt was made to make out a case of an error apparent on record by invoking the provisions of section 254(2). Be that as it may. This Court by invoking the provisions under Article 226 of the Constitution of India cannot assume the role of an appellate court in deciding the matter, particularly when the matter is amenable to appeal under the provisions of the Act referred. The writ petition is bereft of merits and it is accordingly dismissed.
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2021 (1) TMI 238
Transfer pricing adjustment made in respect of royalty payment - HELD THAT:- We notice that the co-ordinate bench, in AY 2005-06 and 2006-07, has given a specific direction to the effect that, if the TPO could not find any comparable in respect of royalty payment, then the TPO/AO may consider the royalty payment as part of the international transactions under trading segment and he may consider royalty payment as part of operating cost for the purpose of computing margin in the trading segment. According to Ld A.R, the TPO has followed the alternative direction given by ITAT while giving effect to the order of the ITAT in AY 2005-06 and 2006-07. CIT(A) did not properly consider the direction given by ITAT on an identical issue in AY 2005-06 2006-07, more particularly, the alternative direction given by ITAT. Hence we are inclined to follow the order passed by ITAT in the assessee s own case for AY 2005-06 2006-07. Accordingly, we set aside the order passed by Ld CIT(A) on this issue in all the three years under consideration and, following the decision rendered by ITAT in AY 2005-06 2006-07 on an identical issue, we restore this issue to the file of the AO/TPO in all the three years under consideration with similar direction. Re-computation of deduction allowable u/s 10A - A.R submitted that it is well settled principle that the deduction u/s 10A is allowed at undertaking level and not at entity level and the Ld CIT(A) has, however, considered the profits available at entity level while adjudicating this issue, which is not correct proposition of law - HELD THAT:- We notice that the Ld CIT(A) has not discussed on jurisdictional issue. Further, it is the submission of the assessee that the Ld CIT(A) has considered the profits at entity level instead of the considering the profit at undertaking level. In any case, it is the submission of Ld A.R that the assessee was not given opportunity of being heard by the AO before making adjustment in the quantum of deduction allowed u/s 10A . Thus we set aside the order passed by Ld CIT(A) on this issue in all the years under consideration and restore the same to the file of the AO.
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2021 (1) TMI 237
Undisclosed income - Assessee failed to produce details of total sale proceeds of the agricultural produce sold and also failed to produce details of expenditure incurred on the agricultural activities - According to the assessee, the assessee has earned about ₹ 32,36,200/- from agricultural income instead of ₹ 52,36,200/- which was wrongly mentioned, due to typographical mistake - HELD THAT:- Gross receipt in the year in dispute is ₹ 29,25,000/- and not ₹ 54,36,200/- as claimed by the assessee. CIT(A) has rightly corrected the mistake, but keeping in view of the evidences filed by the assessee and the statement of the Sarpanch of the village alongwith Certificate given by him i.e. Sarpanch and in view of the huge ownership of land by the assessee for which the assessee has produced all the documentary evidences as mentioned in the impugned order, Assessing Officer as well as Ld. CIT(A) made and confirmed the addition in dispute only on estimate basis and disallowed the same on the basis of the documentary evidences rejecting the claim of the assessee which is on the basis of the evidences of the revenue authorities. Hence,addition in dispute has wrongly been made for this year by the revenue authorities without any basis and the same is not sustainable in the eyes of law and is hereby deleted in the interest of justice, by accepting the appeal of the assessee.
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2021 (1) TMI 236
Addition of burning losses during the process of manufacture of ingots - assessee stated that during the year the burning loss in their plant was to the extent of 5.81% which is accurate and as per consumption and production of the finished goods - HELD THAT:- As find considerable cogency in the contention of assessee that there is no standard % of burning loss in furnace it only depends furnace to furnace and only one kind of scrap cannot be used, they used different kind of scrap which has different % burning loss. As noted that all the purchases are recorded in the books of accounts and details of sponge Iron used along with the documentary evidence which were filed before the authorities below, which have not been properly appreciated. It was also noted that during the year the burning loss in the assessee s plant was to the extent of 5.81% which is accurate and as per consumption and production of the finished goods. The addition in dispute is not tenable. Even otherwise, as per settled law, the addition made by the AO was on estimate basis, which is not sustainable, hence, the same is deleted as such. Disallowance of unsecured loan raised - assessee submitted that assessee has taken unsecured loan from Bimla Devi by account payee cheque in routine course of business. Smt. Bimla Devi is the relative of the directors of the company - HELD THAT:- As find considerable cogency in the contention of the assessee, that the loan from Smt. Bimla Devi has been received through NEFT though proper banking channel; Mrs. Bimla Devi is an income tax assesee, who is relative of the Director of the Company. As noted that the cash and bank statement of Bimla Devi for the year 2013-14 alongwith its ITR, computation of income and balance sheet was filed before the authorities below. In this case, as per settled law, the genuineness of the transaction has been established for which assessee is not required to prove source of source and the onus is on the revenue to prove that the transaction is not genuine, which they have failed to prove. Hence, delete the addition in dispute Addition on account of cartage outward for alleged inflated expenses - HELD THAT:- We find considerable cogency in the contention of the assessee, submitted that during the year the assessee had paid ₹ 1182164/- as carriage outward for carriage of finished goods and dispatched goods to different locations and paid freight to the transporters. All the payments have been duly supported by the biliti. Copy of all the bilties as a proof of payment were filed. Merely because of comparison with last year the AO has disallowed the carriage outward expenses. All the expenses are properly supported by the evidence of payment. There was a expenditure debited in the profit Loss account Vehicle running maintenance account which has been decreased from ₹ 2453172 to ₹ 548165, however, the AO has not considered the decrease in the related expenses the expenses of carriage outward is directly related with the expenses vehicle upkeep and maintenance. In view of above, the addition made by the AO is not tenable, hence, the same is deleted as such. Assessee appeal allowed.
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2021 (1) TMI 235
Penalty u/s 271(1)(c) - Addition u/s 68 - HELD THAT:- The overall effect of the Assessment Order dated 29.12.2017 was that the head under which the an amount was assessed, changed from income under PGBP (as shown by the assessee) to addition U/s 68 of IT Act, (as assessed by the Assessing Officer); in the process, however, assessing income of the assessee is same as the returned income of the assessee. AO as well as the Ld. CIT(A) have failed to make out a case for levy of penalty U/s 271(1)(c) of I.T. Act because they have been unable to show, when assessed income is same as returned income; whether, and if so, how allegation of furnishing of inaccurate particulars of income can be said to have resulted in tax sought to be evaded by the assessee. That there was some tax sought to be evaded by assessee, is a necessary condition for imposition of penalty U/s 271(1)(c) - The allegation of the Ld. CIT(A) that the assessee had the bogus income or bogus credit, is pointless, because the corresponding amount of ₹ 6,62,000/- was already included in the returned income of the assessee. For levy of penalty U/s 271(1)(c) , what has to be shown is whether, and if so, how, assessee can be said to have sought to evade tax. AO and the Ld. CIT(A) and the Ld. Sr. DR have failed to establish conclusively that the assessee had sought to evade tax.- Penalty deserves to be deleted - Decided in favour of assessee.
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2021 (1) TMI 234
Validity of reopening of assessment - Non-issuance of notice u/s. 143(2) - mechanical approval granted u/s. 151 - HELD THAT:- AO has completed the assessment u/s. 143(3)/147 of the Act on 10.11.2017 without issuing mandatory notice us. 143(2) which is against the law laid down in the case of ACIT vs. Hotel Blue Moon [ 2010 (2) TMI 1 - SUPREME COURT] wherein, it has been held that in the absence of the notice u/s. 143(2) of the Act the assessment framed by the Assessing Officer is liable to be quashed. Pr. CIT has granted the approval in a mechanical manner by putting only Yes which is not valid for initiating the reassessment proceedings. Thereafter, the AO has mechanically issued notice u/s. 148 of the Act. The reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. Penalty u/s 271(1)(c) - HELD THAT:- Since as already quashed the reassessment and delete the addition in dispute in the quantum appeal, as aforesaid, hence, the penalty, does not stand in the eyes of law, therefore, the same is deleted as such, by also allowing this appeal of the assessee.
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2021 (1) TMI 233
Deduction u/s 80P - whether the interest income earned by the assessee firm from the deposits in the Savings Bank is eligible for deduction u/s 80P(2)? - HELD THAT:- AO and the CIT (A) have relied upon the decision of the Hon ble Supreme Court in the case of M/s Totgar s Co-Operative Sale Society Ltd. [ 2010 (2) TMI 3 - SUPREME COURT] to deny the deduction. As find that the said decision is distinguishable on facts and is not applicable to the facts of the case before this Tribunal. In the case of M/s Totgar s Co-Operative Sale Society Ltd, the interest income was earned on short term bank deposits and securities which were made out of the surplus funds of the members retained by the society and were not immediately necessary for the business of the assessee therein. In the case before this Tribunal, the assessee society had to make the deposits into the Savings Bank A/c held with Kotak Mahindra Bank as a business requirement. Since the assessee s funds were available in the Savings Bank A/c, the assessee has earned certain interest income thereon. Thus, it can be seen that the interest income earned is not on fixed deposits, but it is on the funds which are available and which are required for the business purpose of the assessee. The decision of the Hon ble Supreme Court in the case of M/s Totgar s Co-Operative Sale Society Ltd is clearly not applicable to the case before the Tribunal. In the case of CIT vs. Andhra Pradesh State Coop. Bank Ltd [ 2011 (6) TMI 215 - ANDHRA PRADESH HIGH COURT] has clearly held that the interest income earned on deposits in the Bank is also in the nature of business income which is eligible as deduction u/s 80P(2). Assessee is eligible for deduction u/s 80P(2) of the Act on the interest income earned from the Savings Bank A/c held with the Kotak Mahindra Bank - Assessee s appeal is allowed.
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2021 (1) TMI 232
Deduction u/s 10AA - business activity of manufacture and export - DR submitted that the addition have been made u/s 69C which is a deeming provision and the same cannot be considered for benefit u/s 10AA which is restricted to the profit and gains derived from export - HELD THAT:- As decided in own case [ 2019 (11) TMI 650 - ITAT JAIPUR] wherein similar contentions were advanced by the ld DR and considering the same, the AO was directed to recompute the deduction u/s 10AA taking into consideration the additions so made by him. Considering the fact that there are no changes in the facts and circumstances of the present case, following the decision taken by the Coordinate Bench in assessee s own case for A.Ys 2009-10 2014-15, the Assessing Officer is hereby directed to recompute the deduction u/s 10AA taking into consideration the addition of ₹ 2,03,739/- made by him
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2021 (1) TMI 231
Disallowance u/s 14A - CIT(A) has deleted the addition by giving a finding that there is no exempt income earn - CIT(A) has held that since assessee has himself made a disallowance for earning the exempt income u/s.14A he is going to sustain the aforesaid disallowance and hence he has made a enhancement of the said amount. HELD THAT:- We find that there is no estoppel as to law. If an addition or disallowance is not permissible in law the same cannot be fastened upon the assessee on his concession. Moreover, the ld. CIT(A) is relying upon the jurisdictional High Court decision in M/S. DELITE ENTERPRISES [ 2009 (2) TMI 498 - BOMBAY HIGH COURT] deleting the addition made by the assessing officer then again making an enhancement on a different pretext of estoppel or offering concession by the assessee. This is on the cusp of contempt of the Hon ble Jurisdictional High Court, and not at all sustainable. Accordingly, we set aside the orders of ld. CIT(A) and delete the addition.
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2021 (1) TMI 230
Long Term Capital Gain - Addition u/s 50C on the basis of the valuation done by the Departmental Valuation Officer - HELD THAT:- CIT appeals has elaborately addressed the various legal issues raised by the assessee. However, he has not dealt with the merits of the objections of the assessee that there were inherent defects/deficiencies in the said piece of land, due to which the assessee was contesting the valuation. It is not discernible whether the merits of various objections of the assessee to the deficiency in the said piece of land were considered by the DVO in his report. We find that it is necessary in the interest of justice that the various objections on merits of the valuation be dealt with by the learned CIT appeals by a speaking order. This is also noted that the said objections were not subject matter of consideration by the assessing officer also. In this regard, the learned CIT appeals while addressing the merits of the assessee objection should also give opportunity to the DVO if he chooses to consider the various objections of the assessee and examine how the same are dealt with by the DVO. In coming to the above proposition we draw support from the decision of honourable Supreme Court in the case of Kapurchand Shrimal [ 1968 (8) TMI 16 - SUPREME COURT] that it is the duty of the appellate authority to correct the errors in the order of the authority below and if necessary, remit the matter for reconsideration with or without direction unless prohibited by law. Whether the transfer of development right would come under the sweep of section 50 C? - There is no cogent submission by the learned counsel of the assessee as to how the decisions referred by learned CIT appeals including that from the honourable Supreme Court in the case of Sanjeev Lal [ 2014 (7) TMI 99 - SUPREME COURT] are not applicable. The decision referred by learned counsel of the assessee from honourable Bombay High Court in this regard was with reference to transfer of leasehold rights. In our considered opinion, when the issue is being remitted to the file of learned CIT appeals, the learned CIT appeals shall consider this aspect also afresh. He shall take into account the decisions referred by learned counsel of the assessee and learned counsel of the assessee shall also submit objections to the case laws referred by learned CIT appeals including that from the Supreme Court referred by him as above. The issue of transfer of development right, was never raised before the assessing officer and the claim of the assessee is also without filing the revised return of income. The learned CIT appeals shall consider this aspect also - Assessee appeal allowed for statistical purposes.
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2021 (1) TMI 229
Registration u/s 80G(5)(vi) denied - CIT(E) held that the assessee-trust is a private religious trust and therefore, cannot be held as a charitable trust within the meaning of Section 2(15) - AR has submitted that the assessee-trust is duly registered U/s 12AA - contention raised by the ld. AR that the impugned order has been passed beyond the limitation period - HELD THAT:- Assessee-trust has moved its application on 01.08.2019 and therefore, the limitation period has to be counted from the end of the month in which the application has been filed and the said period expired on 28.02.2020. In the instant case, the impugned order was passed on 19.02.2020, therefore, the same was passed within the limitation period as so prescribed and therefore, the contention so advanced by the ld. AR cannot be accepted. Assessee-trust is a private religious trust which doesn t enure for the benefit of public at large and thus cannot be held as charitable within meaning of section 2(15) - merely the fact that the trustees belongs to a single family cannot be a sole reason for holding that it is a case of private trust as compared to a public trust more so when we find that the assessee-trust has already been registered U/s 12AA of the Act as well as under the Rajasthan Society Registration Act. The trustees are the same at the time of applying for registration U/s 12AA of the Act as well as while applying for the impugned approval U/s 80G of the Act and therefore, where the Revenue has already taken a view that the assessee is a public trust, in such a scenario, basis the same documents, the Revenue cannot plead and take a different view in the matter. Having granted registration U/s 12AA of the Act which continues to remain in force and which has not been withdrawn as on date, the main character of the assessee-trust as that of the public trust cannot be challenged in the impugned proceedings. Regarding the Bhairav Temple being described as property of the assessee trust as per the amended trust deed and carrying on the activities of running of the temple, assessee-trust which has been established on 27.09.2017 is operating out of the temple premises, therefore, it is a case of a trust which is operative as on the date of seeking registration and it thus becomes essential to examine the exact nature of the activities so undertaken by the assessee-trust. The assessee trust has claimed that the necessary information/documents have been submitted before the ld CIT(E) however, on perusal of the records, we are unable to decipher any information and documents which have been submitted by the assessee-trust in relation to Temple related activities and corresponding expenditure. Assessee trust deserve one more opportunity to submit the necessary information/documents thus we are setting aside the matter to the file of ld. CIT(E) for the purposes of examining the activities of the assessee s trust including the activities in relation to Bhairav Temple and basis the same, decide the matter afresh - Appeal of the assessee is allowed for statistical purposes.
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2021 (1) TMI 228
Depreciation on the expenditure incurred for construction of Amritsar Bus Terminal project on build, operate and transfer (BOT) basis - According to the AO, the assessee claimed depreciation on project costs at ₹ 2,50,16,203/- in the books of account but claimed depreciation @ 25% at ₹ 4,66,91,811/- in the computation - AO allowed amortization of whole expenses over the life of such asset and restricted the deprecation - HELD THAT:- We note that the assessee incurred expenditure in constructing Amritsar Bus Terminal on BOT basis and to recoup the said investment, the assessee was allowed to collect adda fees from the users of the said bus terminal. In our view, the said right is business or commercial right in terms of section 32(1)(ii) of the Act, is an intangible asset, therefore, the assessee is entitled to claim depreciation. We find that the facts and circumstances of the case made out in the case of Progressive Construction Ltd. [ 2017 (3) TMI 1167 - ITAT HYDERABAD ] are identical and the issue decided therein is similar to the issue on hand before us. Therefore, the assessee is eligible to get depreciation u/s. 32(1)(ii) of the Act. We hold that the assessee is entitled to claim deprecation as per specified rate at 25% and the order of CIT(A) is justified. It is observed that the AO, while denying the claim of depreciation, allowed deduction towards amortization of expenses relatable to money spent for construction of infrastructure facilities, i.e. bus terminal. Once the claim of the assessee towards depreciation allowance is accepted, the deduction allowed by the AO towards allocated cost of project, naturally needs to be withdrawn. The AO is directed to recalculate the depreciation in terms indicated above and add back the allocated cost of project as allowed by him as deduction in the assessment order - Decided against revenue.
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2021 (1) TMI 227
Exemption u/s 11 - receipts from the business of developing, coordinating plants and implementing the rail infrastructure projects, etc. for Indian Railways, exceeded the limit provided in proviso to section 2(15) - HELD THAT:- Learned representatives fairly agree that whatever we decide in [ 2021 (1) TMI 176 - ITAT MUMBAI] , which were heard alongwith this set of appeal and cross-objection, will apply mutatis mutandis for this assessment year as well. - Decided in favour of assessee.
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2021 (1) TMI 225
Revision u/ 263 - assessee s claim for exemption of LTCG u/s 10(38) not verified by AO - HELD THAT:- A.O had failed to verify the genuineness and correctness of the aforesaid share transactions and had rather summarily accepted the assessee s claim for exemption of LTCG under Sec.10(38), therefore, the Pr. CIT remaining well within the realm of his jurisdiction as contemplated in the Explanation 2(a) to Sec. 263 of the Act had rightly set aside the assessment order with a direction to the A.O to frame the same afresh after affording an opportunity of being heard to the assessee. At this stage, we may herein observe that the Pr.CIT while directing as hereinabove, had however, inadvertently directed the A.O to disallow the assessee s claim of exemption of LTCG under Sec. 10(38) of the Act. As the aforesaid direction of the Pr. CIT clearly militates against his direction to the A.O to pass a fresh assessment order in accordance with law after affording an opportunity of being heard to the assessee, therefore, to the said extent the same cannot be sustained and is expunged from the impugned order. We herein uphold the order passed by the Pr.CIT under Sec. 263 though subject to the modification stated hereinabove.
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2021 (1) TMI 224
Revision u/s 263 - investment in Tata Sons Ltd - as per CIT AO allegedly failed to verify the applicability of section 13(1)(c), 13(1)(d) and 13(2)(h) - what is the nature of scope of the provisions of Explanation 2(a) to Section 263 to the effect that an order is deemed to be erroneous and prejudicial to the interests of the revenue when Commissioner is of the view that the order is passed without making inquiries or verification which should have been made ? - HELD THAT:- As decided in case of SIR DORABJI TATA TRUST [ 2020 (12) TMI 1121 - ITAT MUMBAI] assessee trust has made investments in Tata Sons Ltd, but that does not mean that Tata Sons Ltd is a property of the assessee trust- a proposition blatantly erroneous in law and in concept. What has been paid to the persons holding office as trustees, though in consideration for other roles played by them such as former directors and employees, has nothing to do with the determination of benefits to the trustees. The pension payments to Ratan N Tata and N A Soonawala, for example, have been held to be wholly and exclusively for the purposes of the business of Tata Sons Ltd and, therefore, the stand that these payments amounted to benefit to the trustees is ex facie incorrect. In any case, as we have noted earlier, all these aspects were duly examined at the assessment stage, and the defects that the learned Commissioner has pointed out in the said examination during the assessment proceedings, for the detailed reasons we have set out earlier, cannot meet our judicial approval. We are, therefore, of the considered view that learned Commissioner was not justified in subjecting the assessment order to revision proceedings on the ground that the Assessing Officer did not examine the matter regarding assessee s control over Tata Sons Ltd, and whether, by virtue of such alleged control, any of the specified persons under section 13(3) received any benefits, and whether the investments made by the assessee trust were in violation of Section 13(2)(h). Non-verification of accumulation of unspent surplus under section 11(2) was wrongly stated to be allowed though the same was neither asked nor required as the surplus was less than 15%.This nonverification also, even if that be the correct position, cannot be ground enough to invoke the revision proceedings. Non-verification of interest income - Once all these details were on record, and there is not even a suggestion that any part of interest income is not qualified for exemption under section 11, we are unable to uphold the stand of the learned Commissioner that the subject assessment order was erroneous and prejudicial to the interest of the revenue for want of verifications of interest income sources. We disapprove of the action of the learned Commissioner on this point as well. Commissioner has also noted that even though the income from dividend was treated as exempt under section 10(34), the Assessing Officer should have nevertheless examined whether the entire income of the assessee trust was applied for the purposes of the assessee trust.The observations so made by the learned Commissioner show that he has not even applied his mind to the undisputed facts of the case. What was being directed by the learned Commissioner was already done by the Assessing Officer, and, therefore, these directions clearly show that there was a clear and glaring non-application of mind to even undisputed material facts of the case. We hold the impugned revision order as devoid of legally sustainable merits - Decided in favour of assessee.
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2021 (1) TMI 222
Gain on sale of land - assessee has sold the agricultural land - CIT-A deleted the addition holding that the AO was not justified to consider gain on sale of land as a business income - HELD THAT:- On perusal of the material it is observed that agricultural land purchased by the assessee company was very old purchased in F.Y. 1995-96 and 1996-97 and the same had been treated as fixed assets. The correctness of the aforesaid facts is demonstrated from the audited accounts of the assessee for the financial year 2007-08 and from the findings of the ld. CIT(A) in the appellate order. Assessee has sold the agricultural land as fixed asset in its balance sheet. After perusal of the assessment order, it is observed that without specifically controverting the relevant material and claim of the assessee, the Assessing Officer simply on the basis of memorandum of association has held that income derived from purchase and sale was a business income. No infirmity in the decision of ld. CIT(A). Therefore, this ground of appeal of the revenue is dismissed.
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2021 (1) TMI 221
Addition u/s 68 - unexplained cash credit - credit worthiness of shareholders/investors to invest such huge amount - Genuineness of transactions - HELD THAT:- Admittedly, in the case on hand, the assessee has discharged its onus by furnishing the necessary details such as copy of PAN, driving license, ITR, confirmation of the parties etc. in support of identity of the parties. There is also no dispute to the fact that all the transactions were carried out through the banking channel. What is the inference that flows from a cumulative consideration of all the aforesaid contending factsis that the assessee has discharged its onus imposed under Section 68 of the Act. The details filed by the assessee was not cross verified by the Revenue from the respective parties despite having the necessary details in its possession. Thus, we are of the view, Revenue cannot go to hold the addition under Section 68 of the Act in the given facts and circumstances. - Decided in favour of assessee.
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2021 (1) TMI 220
Addition u/s 68 - bogus long term capital gains - submissions of the assessee before the A.O. was that he had done this transaction through stock exchanges and banking channels and that he had paid Security Transaction Tax / SEBI Tax / Stamp Duty which was applicable for trading of shares - HELD THAT:- CIT(A) while deciding the case of the assessee discussed the facts of another case and not that of the assessee, she reproduced the grounds of appeal in para 2 of the impugned order which were different from the grounds raised by the assessee in Form No. 35 which is placed on record. In the said grounds mentioned in Form No. 35 the assessee challenged the addition made by the A.O. while the Ld. CIT(A) dealt with the additionwhich was not related to the assessee. In the present case the main grievance of the assessee is that the evidences used by the Ld. CIT(A) while sustaining the addition were not confronted to the assessee and that the submissions of the assessee were not considered by the Ld. CIT(A). The principles of natural justice demand that the material used against the person must be confronted before taking the decision against the said person. We therefore keeping in view the peculiar facts of this case deem it appropriate to set aside this case back to the file of the Ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee and by confronting the relevant material / evidence which were used against the assessee. Appeals of the Assessee are allowed for statistical purposes.
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Customs
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2021 (1) TMI 253
Provisional attachment of seized goods - consignment of dry dates - whether the goods are of Iran origin or Pakistan origin? - HELD THAT:- A communication has been shared by the learned Advocate, Mr. Viral Shah, appearing for respondent Nos. 2 and 3, addressed to the Commissioner, Customs House, Mundra, which is by the Dy. Commissioner, Special Inquiry and Investigation Branch, Mundra, Kachchh-Bhuj, which does not contemplate any further inquiry or investigation in regard to the goods in question and has no objection to release the goods under the Customs Act. As submitted by the learned Advocate, Mr. Dhaval Shah, and confirmed by the learned Advocate, Mr. Viral Shah, for respondent-authorities, the Customs Department shall need to take a call and to take a decision in regard the goods, which came to be seized on 19.11.2019. Let the decision be taken, promptly.
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2021 (1) TMI 223
Rectification of Mistake - typographical error or not - HELD THAT:- There is no dispute regarding the first prayer made in the application as it appears to be a typing mistake. ₹ 60 lakhs mentioned in the third line of paragraph 25 of the Final Order dated September 12, 2019 requires to be deleted and replaced by ₹ 60 thousand. Rectification of mistake - prayer made in the context of appropriation of ₹ 1,00,00,000/- deposited by the applicant during investigation - Section 35C(2) of the Act - HELD THAT:- In the present case, the mistake apparent from the record that has been pointed out is non-consideration of an important contention raised by the appellant in the Final Order regarding legality of the order to the extent it appropriated the deposit of ₹ 1,00,00,000/- made by the appellant during investigation - It is not in dispute that after the premises of the appellant were searched on February 06, 2009 by the officers of the Directorate of Revenue Intelligence and during the course of investigation, the appellant deposited Rs. One crore by letters dated May 15, 2009 and May 18, 2009. Pursuant to the show cause notice dated February 02, 2010 that was issued to the appellant, an order dated January 31, 2011 was passed by the Commissioner confiscating the goods with an option to redeem the goods on payment of fine. The Commissioner also seized the Indian currency and imposed penalties upon the appellant and the firm. The customs appeals filed by the appellant and the firm before the Tribunal to assail the aforesaid order dated January 31, 2011 passed by the Commissioner of Customs were finally decided on April 27, 2016. The confiscation of goods and Indian currency was held to be bad in law. It is as a consequence of this order passed by the Tribunal, that the appellant filed an application for refund of the amount of ₹ 1,00,00,000/- that was deposited during investigation and ₹ 3,25,000/- towards the pre-deposit for filing he appeals. The final order dated October, 18, 2018 appropriated an amount of ₹ 1,00,00,000/- deposited by the appellant during the investigation against the dues of M/s Ajit Exports. Specific grounds had been taken by the appellant in the appeal against the appropriation of the amount deposited by the appellant during investigation and even in the written submissions this ground was taken. The relief claimed in the appeal was for setting aside the order dated October 18, 2018 passed by the Commissioner in its entirety and since it is this order that appropriates the amount deposited by the appellant during investigation, it cannot be urged that the appellant had not made any prayer for setting aside the order of appropriation of the amount. In such circumstances the contention advanced by the learned authorized representative of the Department that no relief had been claimed by the appellant for setting aside the order appropriating the amount cannot be accepted and the contention of the learned counsel for the appellant that the final order dated September 12, 2019 should have adjudicated upon this issue deserves acceptance. It is well said that amount deposited during investigation cannot be appropriated towards the tax dues of some other firm. The Commissioner has, however, appropriated the amount deposited by the appellant during investigation towards the tax dues of some other firm. The issue is whether this relief can be granted in the application that has been filed for rectification of mistake - A bare perusal of the aforesaid sub-section (2) of Section 35C(2) of the Act indicates that the Appellate Tribunal may, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (1). Sub-section (1) provides that the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision for a fresh adjudication. What is, therefore, necessary for a mistake to be rectified is that it must be apparent from the record. Whether non-consideration of a submission relevant to the issue for determination which was placed before the Tribunal, can be said to be a mistake apparent from the record so as to be rectified under Section 35C(2) of the Act? - HELD THAT:- This issue was examined by the Supreme Court in Asstt. Commr., Income Tax, Rajkot vs Saurashtra Kutch Stock Exchange Ltd., [2008 (9) TMI 11 - SUPREME COURT] . It was pointed out that the error apparent from the record should be so manifest and clear that no Court would permit it to remain on record. It should be pertinent and self-evident and not require any elaborate discussion of evidence or argument. It was also observed that rectification of an order stems from the fundamental principle that justice is above all and it is to be exercised to remove the error and to disturb the finality. It would, therefore, be appropriate to rectify the error that is apparent on the record by setting aside that part of the order passed by the Commissioner that appropriates an amount of ₹ 1,00,00,000/- deposited by the Appellant during investigation towards the tax dues on M/s Ajit Exports - In the third line of paragraph 25 of the Final Order, ₹ 60 lakhs shall be deleted and shall be replaced by ₹ 60 thousand - That part of the order dated October 18, 2018 that directs for appropriation of ₹ 1,00,00,000/- deposited by the appellant during investigation is set aside. The application filed for rectification of mistakes is allowed.
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Corporate Laws
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2021 (1) TMI 258
Disqualification of Director - deactivation of DIN - effect of Section 164(2)(a) and the proviso to Section 167(1)(a), as introduced by the 2014 Amendment, prospective, retrospective or retroactive in nature. Whether there is any scope for giving opportunity to the defaulting company or its directors to represent against the disqualification under Section 164, read with Section 167 of the 2013 Act? - HELD THAT:- A clear reading of Section 164(2) and Section 167(1)(a), both with the corresponding provisos (as amended) leaves no scope of any discretion on the part of the authorities in case of a company incurring the defaults as contemplated therein. It is well-settled that the rules of natural justice can only be applied if an opportunity of hearing/representation is of relevance and affects the outcome of the procedure. In the absence of any discretion of the authorities, since the disqualification under the said sections is automatic on the perpetration of the defaults contemplated therein, an opportunity of representation/hearing to the defaulter would merely be an exercise in futility. Thus, question (ii) as formulated above, is answered in the negative. Whether Section 164(2)(a), as introduced by the 2014 Amendment and the proviso to Section 167(1)(a), as introduced by the 2018 Amendment, are prospective, retrospective or retroactive in nature - HELD THAT:- The noncompliance of the provisions regarding filing/submission of annual returns and financial statements by a company, as envisaged in Sections 92 and 137 of the 2013 Act, shall result in pecuniary fines as penalty; nothing more, nothing less - However, the scenario has completely changed with the introduction of the 2014 Amendment to Section 164(2), with effect from April 1, 2014. The directors of a defaulting company now become liable, for contravention of Sections 92 and 137, to ineligibility for re-appointment as a director of that company or appointment in any other company for a period of five years from the date of default. This consequence has been newly-introduced and had no parallel in the 2013 Act or, for that matter, in the 1956 Act. Similarly, before the amendment to Section 167(1)(a) by way of a proviso, with effect from May 7, 2018, there was no provision in the 2013 or 1956 Act which automatically vacated the office of the director in all companies other than the defaulting company in case a director incurs disqualification under sub-section (2) of Section 164. The unorganized or non-corporate sector holds sway over a major chunk of the economy of developing countries, including India, primarily in the manufacturing and production domains, apart from tourism and partially in trading. The capital incentives gained by the corporate sector is off-set by the implicit advantages available to the unorganized sector, since the latter is unfettered with several liabilities with regard to revenue, capital, adherence to the industrial and labour laws and manipulation of resources. While the corporate sector has to pay higher interest and viably stick to corporate laws and labour laws, the unorganized sector thrives on exploitation of means and people. This has a direct effect on the business of the corporate sector, in particular small operators and private limited companies, barring a few eminent and resourceful ones - In the absence of any requirement of adherence to the principles of natural justice or any scope of discretion in applying the amended provisions of Sections 164 and 167 of the 2013 Act, there is no scope for the authorities to consider the reason behind defaults and desist from disqualifying the directors if necessary. This lack of discretion in the matter of disqualification operates directly to the detriment of corporate functioning of the small and medium corporate operators. The fall-out of retrospective operation of the amendments is fatal to small and medium businesses, which still comprise the backbone of the economy. There can be umpteen reasons, arising from the inherent disadvantages of functioning befalling private limited companies and small corporate units, which might result in unintentional contravention of Sections 92 and 137 of the 2013 Act. It cannot but be held that the operation of the 2014 and 2018 Amendments to the 2013 Act are prospective in nature - To be specific, the amendment to Section 164(2), with effect from April 1, 2014 has to be applied prospectively. The three-year default contemplated therein has to commence from the financial year 2014- 2015 (April 1, 2014 - March 31, 2015) and end in the financial year 2016-2017 (ending on March 31, 2017). As far as the amended proviso to Section 167(1)(a) of the 2013 Act is concerned, the operation of such proviso has also to be construed prospectively by applying it to companies in default of Sections 92 and 137 of the 2013 Act only after May 7, 2018. On a conjoint reading of the provisions in proper perspective, the distilled effect is that, the DIN of directors of defaulting companies can only be deactivated for violations of Sections 92 and 137 of the 2013 Act commencing from April 1, 2014 and such disqualification shall extend to other companies than the defaulting company, as envisaged in the amended proviso to Section 167(1)(a), only in case the default takes place post-May 7, 2018. Needless to mention, the deactivation of DIN for violation of pre-existing Company Rules, framed under the 2013 Act, can happen within the limited scope of such Rules only, and not on blanket non-compliance of Sections 92 and 137 of the 2013 Act. The question is thus answered to the effect that Section 164(2)(a), as introduced by the 2014 Amendment, and the proviso to Section 167(1)(a), as introduced by the 2018 Amendment, to the 2013 Act are prospective in operation. Petition allowed.
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2021 (1) TMI 240
Writ appeal against writ petition entertained by the Ld. Single Judge - private parties - mismanagement and oppression of majority shareholders - whether writ petition is maintainable under Article 226 of the Constitution of India, when a party pursues multiple remedies? - company petitions nine in number were pending before the NCLT - Holding AGM and filing of financial documents without without following the prescribed procedure - Appellants apprehended that the 2nd respondent has either forged or has caused to be forged the signatures of the majority shareholders with the intention to suggest that the financial statements have been approved by the shareholders at the Annual General Meeting, in the respective years. - HELD THAT:- the writ court ought not to have entertained W.P.(C) No. 14341 of 2020, when the dispute is purely civil in nature. Suppression of material facts in the writ petition - HELD THAT:- Applying the principles of law laid down by the Hon'ble Supreme court in ARUNIMA BARUAH VERSUS UNION OF INDIA ORS [ 2007 (4) TMI 695 - SUPREME COURT] , as regards suppression, equitable remedy and clean hands under Article 226 of the Constitution of India, to the case on hand, we are of the view that there is suppression of material facts in the writ petition. Whether, the Tribunal should be made a party in a petition filed under Article 226 of the Constitution of India? - HELD THAT:- Though the Larger Bench of the Hon'ble Supreme Court in UDIT NARAIN SINGH MALPAHARIA VERSUS ADDITIONAL MEMBER BOARD OF REVENUE BIHAR [ 1962 (10) TMI 55 - SUPREME COURT] held that the Tribunal has to be added as a party, in the latter decisions, the Hon'ble Apex Court clarified that the Tribunal not being required to defend the proceedings under Article 226 or 227 of the Constitution of India, and hence, writ petition is maintainable, without the Tribunal being impleaded. In view of the subsequent decisions of the Hon'ble Apex Court, we are not inclined to accept the contention of the learned counsel for the appellants. Conclusion Material on record discloses that the dispute between the first respondent company and its shareholders, under challenge, is purely a civil dispute. The remedy under Article 226 of the Constitution of India is available against a State or authority or instrumentality of the State, falling within the ambit of the definition State under Article 12 of the Constitution of India - Writ petition filed under Article 226 of the Constitution of India, can be for the enforcement of fundamental rights or for any other purpose, as envisaged under Article 226 of the Constitution. There is no pleadings or materials to substantiate that the appellants are discharging public duties or public functions, and thus, amenable to writ jurisdiction under Article 226 of the Constitution of India. Difference between the exercise of powers under Articles 226 and 227 of the Constitution of India has been explained in the foregoing paragraphs. Thus, in the case on hand, when none of the parties, State or authority or instrumentality of the State, or any private body, discharging public functions, have been arrayed as respondents, when the writ petition has been filed under Article 226 of the Constitution of India, having regard to the roster followed in listing the cases, writ court ought to have directed the respondents/writ petitioners to make necessary amendments, to the provisions under which the writ petition ought to have been filed, or in the alternative, directed that the writ petition be placed before the concerned court, dealing with the challenges made to the orders passed by Courts, or Tribunals, as the case may be. Admittedly, the order impugned in the writ petition (Exhibit-P1) is not an administrative order, passed by the National Company Law Tribunal. Thus, there is an error in exercising the jurisdiction under Article 226 of the Constitution of India - The issues raised for consideration are answered in favour of the appellants - Appeal allowed.
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2021 (1) TMI 239
Disqualification of petitioners - permission to petitioners to file Financial Statements and Annual Return for the pending financial years, by removing the strike off status of the company and activating the DIN of the petitioners - section 164(2) of Companies Act, 2013 - HELD THAT:- The petitioners have not produced any request made by them before the respondents in this behalf. In case the petitioners approach the 2nd respondent seeking an activation of the DIN and DSC for the purpose of uploading Form STK-2, the 2nd respondent shall take up the application and pass appropriate orders in accordance with law on the same within a period of two weeks from its receipt. The petitioners shall produce a copy of this judgment before the 2nd respondent for compliance. Petition disposed off.
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2021 (1) TMI 226
Seeking direction of RoC to activate the DIN Number - filing of all the defaulted Annual Returns and Financial Statements of the Appellant Company before the RoC - Section 424 (3) of the Companies Act, 2013 - HELD THAT:- As regards the activation of DIN of the Directors, having satisfied with the submissions made by the applicant, this Tribunal came to the conclusion that it would be just and proper to order reactivation of the DIN Numbers of the Directors, namely, Mr. Bijosh Paul and Mrs. Neena Chandy to enable the Appellant Company to file the Annual Returns and Financial Statements or other applications contemplated under the Companies Act, 2013. The RoC is directed to reactivate the DIN of Mr. Bijosh Paul and Mrs. Neena Chandy respectively, by collecting fine/ penalty, if any, for the lapse of the Directors. The Company is directed to file all its statutory document(s) along with prescribed fees/additional fee/fine as decided by Registrar of Companies within 30 days from the date on which the DINs of the Directors are reactivated - After duly complying with the above directions, the Registrar of Companies, Kochi is directed to, update their system records with correct status in respect of the Appellant Company and its Directors. Application disposed off.
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Securities / SEBI
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2021 (1) TMI 219
Determination of the ownership of the securities - As stressed that the appellant is holding securities worth more than ₹ 90 crores given by Respondent No. 2 and the impugned direction is relating to only securities worth ₹ 34 crores - HELD THAT:- After perusing certain documents placed before us, without going into the detailed legalities and merit of the matter, we pass the following interim directions:- (a) The parties shall appear before NSE, either physically or through Video Conference, on June 24, 2020. NSE shall give the contact details and arrangements for the said meeting to the parties at least one day in advance. (b) Based on the database of NSE and other parties rights in respect of the securities in question shall be reconciled/determined within one week thereafter. (c) This Tribunal will hear the matter further on Friday, July 03, 2020. In the interim status quo shall be maintained by the parties i.e. there shall be no transfer of securities as directed in the impugned orders nor the appellant shall alienate any of the securities in question.
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PMLA
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2021 (1) TMI 259
Petition filed challenging the summon issued - anticipation of threat and coercion during appearance - seeking direction to respondents to abstain from harassing, threatening or coercing the petitioners during questioning - seeking permission of presence of a legal practitioner - seeking to to limit the questioning time between 9.30 a.m and 4.30 p.m - seeking direction to respondents to provide copies of the statements taken from them. HELD THAT:- The question regarding maintainability of writ petition against a summons under Section 50 and the entitlement to have the presence of a legal practitioner during questioning was considered and negated by this Court in C.M. RAVEENDRAN VERSUS UNION OF INDIA ASST. DIRECTOR, ENFORCEMENT DIRECTORATE [ 2020 (12) TMI 703 - KERALA HIGH COURT] . Therein, reliance was placed on the judgments of the Apex Court in KIRIT SHRIMANKAR VERSUS UNION OF INDIA AND OTHERS [ 2014 (12) TMI 150 - SUPREME COURT] and UNION OF INDIA AND ANOTHER VERSUS KUNISETTY SATYANARAYANA [ 2006 (11) TMI 543 - SUPREME COURT] - In Kirit Shrimankar, the petitioner had approached the Apex Court after the Customs officials conducted a search in the residential premises of his former wife. The petitioner alleged that he was threatened with arrest and incarceration if he did not submit to the dictates of the Customs Officials. The Apex Court observed that it was highly premature for the petitioner to seek remedy under Article 32 of the Constitution of India based on such flimsy averments, which cannot form the basis for a prima facie apprehension. Thereupon, the petitioner withdrew the writ petition. In Kunisetty Satyanarayana, the appellant had approached the court on being served with a show cause notice by his employer as to the genuineness of his caste certificate. The decision of the High Court of Delhi in VIRBHADRA SINGH ANOTHER VERSUS ENFORCEMENT DIRECTORATE ANOTHER, CHUNNI LAL CHAUHAN VERSUS ASSISTANT DIRECTOR, ENFORCEMENT DIRECTORATE ANOTHER, VIKRAMADITYA SINGH VERSUS ASSISTANT DIRECTOR, ENFORCEMENT DIRECTORATE AND PICHESWAR GADDE VERSUS ENFORCEMENT DIRECTORATE MINISTRY OF FINANCE OTHERS [ 2017 (7) TMI 109 - DELHI HIGH COURT] ], is to the effect that, no person is entitled in law to evade the command of the summons issued under Section 50 of the Act on the ground of a possibility of such person being prosecuted in future. Hence, the legal position is that a person issued with summons under Section 50(2) of the Act is bound to appear in person or through authorised agents, as the case may be and to state the truth upon any subject respecting which he is examined and that, no cause of action arises merely for reason of a person being thus summoned - As held by the Apex Court in DUKHISHYAM BENUPANI VERSUS ARUN KUMAR BAJORIA [ 1997 (11) TMI 428 - SUPREME COURT] , it is not for this Court to monitor the investigation and to decide the venue, the timings, the questions and the manner of questioning. Petition dismissed.
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CST, VAT & Sales Tax
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2021 (1) TMI 250
Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT:- Revenue places reliance in the case of M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [ 2019 (2) TMI 1850 - MADRAS HIGH COURT ] where it was held that The Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the C forms from the websites as the same stand blocked from use. Upon enquiry with the Assessing Authorities, they have been informed that the benefit of the decision in M/s Ramco Cements Ltd can be extended only to those dealers that are party to the decision. This stand is unacceptable in so far as the decision of this Court as well as other High Courts, one of which has been confirmed by the Supreme Court, are decisions in rem, applicable to all dealers that seek benefit thereunder, of course, in accordance with law. The State has, after the date of the above order, in THE COMMISSIONER OF COMMERCIAL TAXES, CHEPAUK, CHENNAI, THE ADDITIONAL COMMISSIONER (CT) VERSUS THE RAMCO CEMENTS LTD. AND THE STATE TAX OFFICER, THE JOINT COMMISSIONER (CS) (SYSTEMS) VERSUS SUNDARAM FASTENERS LIMITED [ 2020 (3) TMI 450 - MADRAS HIGH COURT ] challenging the decision in the case of Ramco Cements that has been considered and dismissed by a Division Bench of this Court has held that Appellant State and the Revenue Authorities are directed not to restrict the use of 'C' Forms for the inter-State purchases of six commodities by the Respondent/Assessees and other registered Dealers at concessional rate of tax and they are further directed to permit Online downloading of such Declaration in 'C' Forms to such Dealers. The Circular letter of the Commissioner dated 31.5.2018 stands quashed and set aside along with the consequential Notices and Proceedings initiated against all the Assessees throughout the State of Tamil Nadu. As on date, the order in Writ Appeal is final, and following the rationale thereof, this Writ Petition is allowed. The petitioner is entitled to the inclusion of High Speed Diesel Oil as a commodity in the registration certificate. Let this exercise be carried out within a period of four (4) weeks from date of uploading of this order. The request of the petitioner for issuance of C Forms is allowed - petition allowed.
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2021 (1) TMI 248
Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT:- Revenue places reliance in the case of M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [ 2019 (2) TMI 1850 - MADRAS HIGH COURT ] where it was held that The Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the C forms from the websites as the same stand blocked from use. Upon enquiry with the Assessing Authorities, they have been informed that the benefit of the decision in M/s Ramco Cements Ltd can be extended only to those dealers that are party to the decision. This stand is unacceptable in so far as the decision of this Court as well as other High Courts, one of which has been confirmed by the Supreme Court, are decisions in rem, applicable to all dealers that seek benefit thereunder, of course, in accordance with law. The State has, after the date of the above order, in THE COMMISSIONER OF COMMERCIAL TAXES, CHEPAUK, CHENNAI, THE ADDITIONAL COMMISSIONER (CT) VERSUS THE RAMCO CEMENTS LTD. AND THE STATE TAX OFFICER, THE JOINT COMMISSIONER (CS) (SYSTEMS) VERSUS SUNDARAM FASTENERS LIMITED [ 2020 (3) TMI 450 - MADRAS HIGH COURT ] challenging the decision in the case of Ramco Cements that has been considered and dismissed by a Division Bench of this Court has held that Appellant State and the Revenue Authorities are directed not to restrict the use of 'C' Forms for the inter-State purchases of six commodities by the Respondent/Assessees and other registered Dealers at concessional rate of tax and they are further directed to permit Online downloading of such Declaration in 'C' Forms to such Dealers. The Circular letter of the Commissioner dated 31.5.2018 stands quashed and set aside along with the consequential Notices and Proceedings initiated against all the Assessees throughout the State of Tamil Nadu. As on date, the order in Writ Appeal is final, and following the rationale thereof, this Writ Petition is allowed. The petitioner is entitled to the inclusion of High Speed Diesel Oil as a commodity in the registration certificate. Let this exercise be carried out within a period of four (4) weeks from date of uploading of this order. The request of the petitioner for issuance of C Forms is allowed - petition allowed.
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2021 (1) TMI 247
Karnataka VAT - Effect of Conversion of partnership firm into joint stock company - Carry forward deduction of unabsorbed contractor payments - the adjudicating authority as well as the first appellate authority allowed the claim but tribunal did not Whether the petitioner had substantiated with documentary evidence its claim for deduction of excess unabsorbed sub contractor payments? - HELD THAT:- It is evident that the petitioner had filed a copy of the agreement entered into with M/S B.E. Billimoria Ltd. for carrying on civil work of construction of apartments for and on behalf of the petitioner and had also filed copies of the purchase orders awarded to other registered sub contractors for carrying on the structure work, sanitary work etc. It has further been found by the first appellate authority that the petitioner had also filed certificates / declarations issued by sub contractors certifying that they have received consideration for executing the work contract and their details were also mentioned by the first appellate authority in para 8 of its order. On the basis of the aforesaid material, the adjudicating authority as well as the first appellate authority held that the petitioner had complied with the requirements of Section 15(5)(b) of the Act and therefore, it is entitled to benefit of the amounts paid to registered sub contractors to the extent of certificates / declarations filed - it is held that the finding recorded by the tribunal that the petitioner had not substantiated its claim for deduction of excess unabsorbed sub contractor payments before the adjudicating as well as first appellate authority is perverse and the aforesaid finding is therefore, set aside. Whether petitioner, which is a joint stock holding company can be permitted to carry forward unabsorbed sub contractor payments accumulated during its status as a partnership firm? - HELD THAT:- In the instant case, the erstwhile partnership firm has been converted to joint stock holding company by operation of law under Part-IX of the 1956 Act as ongoing concern and continues the business of the partnership firm, which is now being carried on by the company with all its assets movable and immovable, debts and liabilities in connection therewith. Therefore, there is no need of any explicit provision of law to state that all assets and liabilities of the erstwhile firm shall vest with the company. It is also pertinent to mention here that as per requirements contained in Section 28(2)(b) of the Act, the petitioner on transfer of business has already obtained a new registration under the Act. The tribunal erred in invoking Section 46(2-A) of the Act, which deals with adjustment of excess input tax, which is not the subject matter of the appeal. It ought to have been appreciated that in the instant case, there was no change in the ownership of the business and there was only change in the status of the business i.e., from partnership firm to joint stock company - the tribunal erred in law in holding that the petitioner which is a joint stock company cannot be permitted to carry forward unabsorbed sub contractor payment accumulated during its status as a partnership firm. The impugned order dated 18.12.2015 passed by the Karnataka Appellate Tribunal is quashed and it is held that the petitioner is entitled to the benefit of carrying forward of the payments made to sub contractors and is not liable to make payment of tax under Section 39(1) of the Act - Petition allowed.
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2021 (1) TMI 246
Refund of tax paid on raw material - Eligibility for the benefit of Government Order dated 04.04.1978 - case of Revenue is that respondent is not eligible for benefits on the ground that Government Order dated 30.06.1969 as mini steel plant of the respondent was not established prior to 01.01.1975 and also on the ground that respondent was also not eligible for revised package of incentive offered in Government Order dated 04.04.1975 since, revised package was applicable only to new industrial units whose investment in fixed assets did not exceed ₹ 10 Lakhs - HELD THAT:- The Finance Department of Government of Karnataka had issued an order dated 25.11.1969. Clause (6) of the aforesaid order provided that sales tax shall be paid in monthly or quarterly installments as the case may be by party establishing a new industry and at the end of the year, he will have to make an application to the Assessing Authority under Mysore Sales Tax Act, 1957 for refund of sales tax paid on raw materials with supporting documents. However, by a subsequent Government Order dated 04.04.1975, the cash refund sanctioned by earlier Government Order was discontinued. Thereafter, a Government Order dated 12.01.1977 was issued by the Government of Karnataka while making reference to Government Orders dated 30.06.1969, 04.04.1975 and 17.11.1975. In the instant case, as per Government Order dated 30.06.1969 eligibility to refund of tax paid on purchases of raw materials was subject to certificate issued by Department of Industries and Commerce. The Department of Industries and Commerce issued a new unit certificate to the respondent stating that the respondent had started production of mild steel Ingots with effect from 14.04.1977 and the unit of the respondent was entitled to avail of the incentive and concession as per Government Order dated 12.01.1977. There is no restriction in the Government Order dated 12.01.1977 that sale is applicable to industrial units with investments not exceeding ₹ 10 Lakhs and therefore, Government Order dated 12.01.1977 is applicable to the case of the respondent. It is also pertinent not mention here that in Law Department of Government of Karnataka had already expressed an opinion in favour of the respondent vide communication dated 08.07.1992 that respondent was entitled to benefit of refund of tax - Also, the tribunal in the light of Government Order dated 12.01.1977 as well as certificates issued by Department of Industries and Commerce, which has been held to be binding in the light of the decision of this court in the case of M/s Wipro Infotech Ltd. [ 1998 (3) TMI 670 - KARNATAKA HIGH COURT ] has held that respondent is entitled to refund of tax. Thus, the order passed by the revisional authority has been set aside and the order dated 04.08.1999 passed by Deputy Commissioner of Commercial Taxes has been restored. The tribunal has neither failed to decide nor has decided erroneously any question of law - petition dismissed.
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2021 (1) TMI 245
Levy of Penalty under Section 12-A(1-A) of Karnataka Sales Tax Act, 1957 - activity of construction of flats / apartments - works contract entered into prior to commencement of the construction - HELD THAT:- From perusal of the order passed by the tribunal, it is evident that in paragraph 10, no particulars of sale agreements alleged to have executed by the petitioner prior to commencement of the work has been mentioned, even though the schedule of payment has been mentioned. The aforesaid finding recorded by the tribunal is based on without any material on record - Similarly, there was no material on record either before the first appellate authority or the adjudicating authority to establish the fact that petitioner has entered into an agreement with prospective buyers prior to commencement of the construction. Therefore, the aforesaid finding has to be termed as perverse. Since, in the relevant Assessment Years the position of law was not clear and therefore, failure of the petitioner to disclose the turnover has to be termed as bonafide based on the prevalent position of law and in the aforesaid factual background, the penal provisions levying penalty could not have been invoked by the authorities. Reliance can be placed in the case of EID. PARRY (I) LTD. OTHERS VERSUS ASSISTANT COMMISSIONER OF COMMERCIAL TAXES AND ANOTHER [1999 (12) TMI 708 - SUPREME COURT] . The impugned orders passed by the tribunal as well as first appellate authority levying Penalty under Section 12 A(1-A) of the Act are quashed - Revision allowed.
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2021 (1) TMI 243
Levy of higher rate of tax - no C Form declarations have been filed by the petitioner - Petitioner had submitted that additional C Forms have been submitted before the Assessing Officer and some have been given credit to - HELD THAT:- Without this case being cited as a precedent, the respondent officer was directed to complete the revised demand giving credit to the C Forms where appropriate. After submitting the C-Form, the Assessing officer has prepared Memorandum of Calculation of tax in respect of M/s.Servo Packaging Limited for the year 2013-14 - the impugned order of assessment stands amended in the light of the revised computation dated 05.10.2020. The petitioner will pay the balance demand as raised within a period of four (4) weeks from date of uploading of this order. Petition disposed off.
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2021 (1) TMI 242
Validity of Section 19(11) of the Tamil Nadu Value Added Tax Act, 2006 - Assessing Authority notes the filing of declaration in Form Q in terms of Section 23 of the Act - HELD THAT:- The writ petitions challenging the vires of Section 19(11) were dismissed in USA AGENCIES VERSUS THE COMMERCIAL TAX OFFICER [ 2013 (8) TMI 532 - MADRAS HIGH COURT] and the matters thereafter travelled to Supreme Court wherein the vires of provision was again upheld in ALD AUTOMOTIVE PVT. LTD. VERSUS THE COMMERCIAL TAX OFFICER NOW UPGRADED AS THE ASSISTANT COMMISSIONER (CT) ORS. [ 2018 (10) TMI 814 - SUPREME COURT] . The judgment of the Supreme Court is dated 12.10.2018. It would have been appropriate for the petitioner to have challenged the orders of assessment passed originally immediately thereafter and within the period of 30 days granted in this regard, which timeframe was not availed by the petitioner. In the affidavit filed in support of the writ petitions, the petitioner explains the delay in filing statutory appeals placing the blame at the door of the clerk of the Advocate on record (AOR). At para 7 the petitioner states that certified copy of the order was not applied for by the AOR and it was only in 2019 when recovery proceedings were initiated that the petitioner woke up and pursued the matter with him - the appeal filed by R2 may be restored upon remittance of further 25% of the disputed tax in addition to the 25% of the disputed tax already remitted by it. The petitioner is directed to remit a further 25% of the disputed taxes within a period of three (3) weeks from today - Petition disposed off.
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Indian Laws
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2021 (1) TMI 261
Time Limit for passing of Arbitral Award - Section 29A of the Arbitration and Conciliation Act, 1996 - lockdown in view of COVID-19 - HELD THAT:- In Suo Moto Writ Petition (C) No. 3/2020, by our order [ 2020 (5) TMI 418 - SC ORDER ] , we ordered that all periods of limitation prescribed under the Arbiration and Conciliation Act, 1996 shall be extended w.e.f. 15-3-2020 till further orders. - It is directed that the aforesaid orders shall also apply for extension of the time limit prescribed under section 23(4) of the said Act. Time Limit for for completing the process of compulsory pre-litigation, mediation and settlement - Pre-Institution Mediation and Settlement under section 12A of the Commercial Courts Act, 2015 - HELD THAT:- Under Section 12A of the Commercial Courts Act, 2015, time is prescribed for completing the process of compulsory pre-litigation, mediation and settlement. The said time is also liable to be extended - it is directed that the said time shall stand extended from the time when the lockdown is lifted plus 45 days thereafter. That is to say that if the above period, i.e. the period of lockdown plus 45 days has expired, no further period shall be liable to be excluded. Time limit for Service of all notices, summons and exchange of pleadings - HELD THAT:- Service of notices, summons and exchange of pleadings/documents, is a requirement of virtually every legal proceeding. Service of notices, summons and pleadings etc. have not been possible during the period of lockdown because this involves visits to post offices, courier companies or physical delivery of notices, summons and pleadings - It is considered appropriate to direct that such services of all the above may be effected by e-mail, FAX, commonly used instant messaging services, such as WhatsApp, Telegram, Signal etc. However, if a party intends to effect service by means of said instant messaging services, it is directed that in addition thereto, the party must also effect service of the same document/documents by e-mail, simultaneously on the same date. Period of validity of a cheque - Extension of validity of Negotiable Instruments Act, 1881 due to lockdown in view of COVID-19 - HELD THAT:- The said period has not been prescribed by any Statute but it is a period prescribed by the Reserve Bank of India under section 35-A of the Banking Regulation Act,1949. It is not considered appropriate to interfere with the period prescribed by the Reserve Bank of India, particularly, since the entire banking system functions on the basis of the period so prescribed - The Reserve Bank of India may in its discretion, alter such period as it thinks fit.
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