TMI Tax Updates - e-Newsletter
October 29, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy FEMA PMLA Service Tax CST, VAT & Sales Tax

Articles

1. LEVY OF GST ON SUPPLY OF GOODS AND SERVICES BY A CHARITABLE TRUST TO DEVOTEES

   By: Dr. Sanjiv Agarwal

News

1. Government of India releases balance amount of ₹ 44,000 crore to States and UTs (with Legislature) under the back-to-back loan facility in-lieu of GST compensation

2. India, ADB sign $251 million loan for integrated urban flood management in Chennai

3. Micro finance: Empowering a Billion Dreams (Inaugural Address by Shri M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India - October 27, 2021 - at the Sa-Dhan National Conference on “Revitalizing Financial Inclusion”)

4. ADB, India sign $100 million loan for agribusiness development in Maharashtra

Notifications

Customs

1. 86/2021 - dated 27-10-2021 - Cus (NT)

Courier Imports and Exports (Clearance), Amendment, Regulations, 2021

2. 85/2021 - dated 27-10-2021 - Cus (NT)

Courier Imports and Exports (Electronic Declaration and Processing), Amendment, Regulations, 2021

3. 84/2021 - dated 27-10-2021 - Cus (NT)

Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Second Amendment Rules, 2021

4. 83/2021 - dated 27-10-2021 - Cus (NT)

Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Second Amendment Rules, 2021

GST

5. 13/2021 - dated 27-10-2021 - CGST Rate

Seeks to amend Notification No 1/2017- Central Tax (Rate) dated 28.06.2017.

6. 13/2021 - dated 27-10-2021 - IGST Rate

Seeks to amend Notification No 1/2017- Integrated Tax (Rate) dated 28.06.2017.

7. 13/2021 - dated 27-10-2021 - UTGST Rate

Seeks to amend Notification No 1/2017- Union territory Tax (Rate) dated 28.06.2017.

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/DOP/P/CIR/2021/653 - dated 28-10-2021

Maintenance of current accounts in multiple banks by Stock Brokers

2. SEBI/HO/IMD/IMD-II DF3/P/CIR/2021/652 - dated 27-10-2021

Guiding Principles for bringing uniformity in Benchmarks of Mutual Fund Schemes

DGFT

3. 31/2015-2020 - dated 28-10-2021

Amendment in Para 2.107 (TRQ under FTA/CECA) of Handbook of Procedure 2015-2020.

Customs

4. 24/2021 - dated 27-10-2021

Reducing compliance burden regarding registration of Authorised Couriers

Highlights / Catch Notes

GST

• Court Upholds Email and Written Submissions as Sufficient for Hearing During COVID-19; No Illegality Found in Seizure Case.

  Case-Laws - HC : Principles of natural justice - seizure of goods alongwith the vehicle - levy of penalty - When right to represent the case was given in peculiar fact situation of COVID-19 pandemic by way of e-mails/written submissions, then sufficient/necessary compliance is being made regarding opportunity of hearing. Even otherwise on merits also appellate authority delved upon and thereafter ensure passing of order - No illegality or perversity has been pointed out by the petitioner to the extent where this Court would have invoked the jurisdiction. - HC
  Visit to Get Source

  ---

• Court Considers Interference Due to Violation of Natural Justice: Petitioner Was Denied Personal Hearing in Assessment Order.

  Case-Laws - HC : Violation of the principles of natural justice - opportunity of personal hearing not provided - the statement made by the Assessment Officer in the impugned order dated 18.11.2020, as if the petitioner has not replied to DRC-01 notice is a total non-application of mind, as the very detailed reply having been received by the respondent just 5 days prior to the said DRC-01 notice, the said reason ought not to have been stated by the respondent in the impugned order. Therefore, on that ground, this Court feels that the impugned order can very well be interfered with. - HC
  Visit to Get Source

  ---

• Reshelling Sugar Mill Rollers Classified as Maintenance Service, Not Job Work, Under GST SAC 9987.

  Case-Laws - AAR : Classification of services - job work service or not - activity of reshelling of old sugar mill rollers - When such a Television set is taken up for correcting the malfunction in order to make it workable, it cannot be construed that the concerned mechanic has manufactured a Television or has conducted jobwork which has resulted in a Television. - SAC 9987 covers under its ambit “Maintenance, repair and installation (except construction) service” - AAR
  Visit to Get Source

  ---

Income Tax

• Tax Tribunal Upholds Trust's Income as NIL; Gratuity and Prior Expenses Exempt u/s 10(23)(iiiab.

  Case-Laws - AT : Assessment of trust - Addition on account of provisions of gratuity and prior period expenses - In fact, the assessee had made claim u/s 10(23)(iiiab) of the Act. Therefore, we do not find any infirmity in treating the income at NIL by Ld.CIT(A). Thus, grounds raised by the Revenue are dismissed. - AT
  Visit to Get Source

  ---

• Invalid Reopening of Tax Assessment: Notice Issued Late u/s 148, Beyond Deadline of March 31, 2013.

  Case-Laws - AT : Validity of reopening of assessment u/s 147 - in our opinion proviso to section 147 of the Act is meant to limit the scope of provision u/s. 147 of the Act, going by this, it is safe to say that the proviso to section 147 of the Act is a qualifying proviso and it only seeks to limit the main provision in section 147 of the Act with stipulation or condition. In the present case, we already discussed the same in the aforementioned paragraphs that the AO should have issued notice u/s. 148 of the Act on or before 31-03-2013 whereas the notice issued was on 23-04-2014. - AT
  Visit to Get Source

  ---

• CIT(A) Deletes Additions After AO's Contradictory Decision on Employee Secondment Payments; Revenue Fails to Prove Errors.

  Case-Laws - AT : Claims of amount paid for employees taken on Secondment - Revenue attribution - AO on one hand had held the secondment agreement to be not a genuine agreement but on the other hand had disallowed only 50% of the expenditure which according to us appear to be contrary. We further find that CIT(A) for the reasons stated in the order has deleted the addition. Before us, Revenue has not pointed any fallacy in the findings of CIT(A) - No additions - AT
  Visit to Get Source

  ---

• PCIT's Lack of Clarity on Transactions and IDS Validity u/s 263 Raises Questions on Penalty Initiation.

  Case-Laws - AT : Revision u/s 263 by CIT - PCIT failed to specify the transaction on which initiation of penalty either under section 271D or 271E was warranted. And on the issues of validity of discloser in IDS, the ld PCIT has not specified that while making declaration the assessee made any misrepresentation of any facts. Once the IDS in all cases were accepted by ld. PCIT, the AO or the Range head no authority to relook or power to revoke or to examine its validity. We further find that the ld PCIT while directing the AO has not himself revoked the IDS nor directed to refund the payment of tax to the assessee. - AT
  Visit to Get Source

  ---

• Stake Money to Horse Owners Not Liable for TDS u/ss 194B or 194BB, No Disallowance u/s 40(a)(ia.

  Case-Laws - AT : TDS u/s 194B or 194BB - disallowance in respect of payment of stake money u/s 40(a)(ia) -'stake money' is not liable to TDS u/s 194B of the Act. - we also hold that stake money paid by assessee to the horse owners are not liable to TDS under section 194B or section 194 BB of the Act. Consequentially no disallowance could be made under section 40 (a) (ia) of the act in the hands of assessee. - AT
  Visit to Get Source

  ---

Customs

• Appeal u/s 130 Dismissed: Non-Fulfillment of Export Obligations Must Be Appealed u/s 130E to Apex Court.

  Case-Laws - HC : 100% EOU - non-fulfilment of export obligation - The appeal under Section 130 of the Act before this Court would not be maintainable and the appellant/revenue has to pursue its grievance by filing an appeal under Section 130E of the Act before the Hon’ble Apex Court - the appeal filed under Section 130 of the Act is held to be not maintainable - HC
  Visit to Get Source

  ---

IBC

• Fine on Corporate Debtor Overruled Due to Section 14 Moratorium Under Insolvency and Bankruptcy Code.

  Case-Laws - Tri : Levy of fine on the corporate debtor - In view of the moratorium declared in terms of Section 14 of the Code and also in view of the fact of making certain compliances subsequently and also in view of the fact that the Resolution Professional is facing certain reasonable impediments with regard to certain other compliances, the impugned order of National Stock Exchange of India Ltd. is unsustainable. Burdening the corporate debtor with imposition of fines further is against to the interest of the corporate debtor and also against to the object of the Code. - Tri
  Visit to Get Source

  ---

Case Laws:

• GST

• 2021 (10) TMI 1163
  Maintainability of petition - availability of alternate remedy by way of appeal - Violation of principles of natural justice - objections of the writ petitioner has not been considered - beneficiary of Input Tax Credit - HELD THAT:- If the articulation in the impugned orders is insufficient or in other words, if it is not ample or adequate, it becomes a question of whether it is terse and epigrammatic or laconic. Even a terse order can be eloquent. An order can be terse but epigrammatic. It can be tersely eloquent. An order can appear to give out reason, but it can be laconic. In this case on hand ITC being allegedly adjusted towards outward tax liability turns heavily on facts/figures and it would be appropriate for an Appellate Authority which can go into facts and have the benefit of records to go into this. Therefore, it cannot be gainsaid that this is a case where objections of writ petitioner not being considered point is compelling enough to warrant interference in writ jurisdiction on the teeth of alternate remedy. Very recently i.e., on 03.09.2021 Hon ble Supreme Court i.e., a three member Bench of Hon ble Supreme Court speaking through Hon ble Justice Dr.Dhananjaya Y Chandrachud in THE ASSISTANT COMMISSIONER OF STATE TAX AND OTHERS VERSUS M/S COMMERCIAL STEEL LIMITED [ 2021 (9) TMI 480 - SUPREME COURT] , while reiterating the aforementioned Rule of alternate remedy rule qua fiscal Statute has culled out the exceptions to alternate remedy rule and held that interference in writ jurisdiction shall be only under exceptional circumstances and there is also an adumbration of exceptional circumstances. In the case on hand, the lone point that is urged before this Court turns on NJP violation. This Court has come to the conclusion (as would be evident from the discussion and dispositive reasoning articulated supra) that alleged NJP facet violation in this case is not compelling enough. Absent compelling NJP violation, as there is no other exception (exceptions to alternate remedy rule) that arises in the case on hand, it is clear that this is a fit case to relegate the writ petitioner to alternate remedy by way of statutory appeal under Section 107 of TNGST Act and C-GST Act. As this Court is relegating writ petitioner-dealer to alternate remedy of statutory appeal, it is made clear that this Court has not expressed any view or opinion on the merits of the matter. If the writ petitioner chooses to take alternate remedy route or statutory appeal under Section 107 of TN-GST Act and C-GST Act, the same will be dealt with and decided on its own merits, in accordance with law by Appellate Authority uninfluenced by any observation that is made in this order which is for the limited purpose of disposal of captioned writ petitions - Petition dismissed.

  ---

• 2021 (10) TMI 1162
  Principles of natural justice - seizure of goods alongwith the vehicle - levy of penalty - place of supply mentioned in the E-way bill is different from the actual place of receiver - suppression of sales or not - case of petitioner is that the appellate authority did not provide any opportunity of personal hearing to the petitioner - time limitation - HELD THAT:- In the present case, impugned order dated 02-07-2021 was duly communicated to the petitioner on the same day. Therefore, petitioner had to file the appeal within four months as outer limit (from the date i.e. 02-07-2019) on or before 30- 10-2019 whereas appeal was preferred on 16-12-2019. Although petitioner has taken the ground that petitioner received order dated 02-07-2019 on 30-07-2019 and if period is counted from 30-07-2019 also, even then outer limit of four months expires on 30-11-2019. Appellate authority as recorded this fact and given opinion that appellate authority has no power to condone the delay after expiry of four months as stipulated in Section 107(1) and 107(4) of the SGST Act. Therefore, appeal was dismissed on account of delay. Non affording of opportunity of hearing - HELD THAT:- Although Section 107(4) and (8) of the SGST Act provides provision for opportunity of hearing to the appellant and if it is seen in juxtaposition, then it appears that opportunity of hearing is required to be given to an appellant who files appeal. In the present context, notice of hearing dated 17-02-2020 (Annexure P/5) and different e-mails dated 18-05-2020, 26-10-2020 and 24-11-2020 indicate that petitioner had filed the written submissions in the pending appeal for perusal of authority and for record purpose before the appellate authority. Petitioner did not press for hearing, rather pressed for consideration of written submissions and tried to press for hearing on 28.11.2020, when final order was passed. Understandably, petitioner wanted early decision so that issue of release of attached vehicle be resolved - from the record, it appears that pre-decisional hearing was afforded to the petitioner and petitioner filed written submissions also in the pending appeal for perusal and for record purpose. Therefore, it cannot be said that petitioner does not get any opportunity of hearing. Appeal got dismissed on the point of limitation as preliminary ground for rejection of appeal and admittedly, petitioner filed appeal belatedly. Therefore, for personal hearing appellate authority could not have waited for normalcy to resume. On the basis of written submissions and record available, appellate authority passed the impugned order dated 28-11-2020 which is otherwise also stands to judicial scrutiny. When right to represent the case was given in peculiar fact situation of COVID-19 pandemic by way of e-mails/written submissions, then sufficient/necessary compliance is being made regarding opportunity of hearing. Even otherwise on merits also appellate authority delved upon and thereafter ensure passing of order - No illegality or perversity has been pointed out by the petitioner to the extent where this Court would have invoked the jurisdiction. Petition dismissed.

  ---

• 2021 (10) TMI 1161
  Violation of the principles of natural justice - opportunity of personal hearing not provided - petitioner has not given any reply to the SCN - HELD THAT:- It is a fact that the Assistant Commissioner, Aruppukottai, by proceeding dated 21.05.2019, has issued a show cause notice and a copy of the same has been filed by the petitioner in this petition. This fact has been accepted by the respondent and a copy of the said notice has also been filed by the learned Government Advocate. The said notice has been responded by the petitioner assessee by reply dated 08.10.2020, with documents - the petitioner has given a reply once again on 14.10.2020 and the said reply was submitted to the respondent Assessment Officer in person and he having received the same has acknowledged by putting his signature and date and this is the evidence from the photocopy of the same filed in the typed set of documents, where the signature of the Assessment Officer can be compared with the signature in the impugned order. Therefore, prima facie, the stand taken by the petitioner has to be accepted. The rule states that show cause notice in DRC-01 Form under Rule 142(1) can be sent through online, but in this case, before such DRC-01 notice sent through online, already a detailed show cause notice had been given, which had been responded towards both the authorities ie., the erstwhile authority as well as the present authority, ie., the Assessment Officer, since they had issued notice one time each and both the notices has been responded promptly by the petitioner - the statement made by the Assessment Officer in the impugned order dated 18.11.2020, as if the petitioner has not replied to DRC-01 notice is a total non-application of mind, as the very detailed reply having been received by the respondent just 5 days prior to the said DRC-01 notice, the said reason ought not to have been stated by the respondent in the impugned order. Therefore, on that ground, this Court feels that the impugned order can very well be interfered with. The matter is remanded to the respondent / Assessment Officer for reconsidering the same - Petition allowed by way of remand.

  ---

• 2021 (10) TMI 1160
  Classification of services - job work service or not - activity of reshelling of old sugar mill rollers - HSN Code - whether is treatable as a job work service under SAC 9988 or is treatable as a repair/maintenance service under SAC 9987? taxable at 12% GST in terms of clause (id) of Sr. No.26 of Notification No.11/2017-CT(R), dt.28.06.2017 or will continue to attract 18% GST as earlier? HSN Code - HELD THAT:- Applicant receives old and worn out sugar mill rollers from its customers who have actually used the said goods and such use has resulted in wear and tear. The applicant make the said rollers reusable. As per section 2(68) of the CGST Act, 2017 jobwork means, any treatment or process undertaken by a person on goods belonging to another registered person and the expression jobworker shall be construed accordingly - the sugar mill rollers are not brought into existence by the applicant in the subject case, rather the said rollers are already in existence, have been used to an extent which has resulted in wear and tear. Repairing of the impugned rollers signify working on same goods which are already in existence. The already existing goods (old and worn out rollers) are worked on so that the defects get removed and the same are ready for reuse. There is no new product emerging. The supply of service in the subject case is nothing but repair done on some old and used product to make it reusable. The impugned rollers were already a finished product which have been used for a period of time and suffered damages which are being rectified by the applicant. On receipt of the worn out roller, the shell which is made of cast iron is broken into pieces. The shaft is left untouched. The broken pieces of cast-iron are melted after addition of nominal material to compensate for the worn out and lost part of the shell, etc. This material is recast and shrunk on the shaft. This process involves heating of the shell and inserting the shaft vertically. On coiling the shell the casting grips the shaft. Thereafter the shell is machined and grooved. Then this Sugar Mill Roller is delivered to the customer - the identity of the impugned goods remains the same before and after performing the process. An example would be of a Television Set which has stopped working due to certain reasons like, failure of a circuit, etc. When such a Television set is taken up for correcting the malfunction in order to make it workable, it cannot be construed that the concerned mechanic has manufactured a Television or has conducted jobwork which has resulted in a Television. SAC 9987 covers under its ambit Maintenance, repair and installation (except construction) service - The subject activity of re shelling old and worn out and unusable sugar mill rollers is an activity of repair and squarely falls under SAC 9987. Since the said activity of reshelling of old sugar mill rollers is neither manufacturing nor job work, it will continue to attract 18% GST and not 12% GST in terms of clause (id) of Sr. No.26 of Notification No.11/2017-CT(R), dt.28.06.2017.

  ---

• Income Tax

• 2021 (10) TMI 1164
  Deemed dividend u/s 2(22)(e) - assessee herein is a shareholder having substantial interest in concerns imparting loan - HELD THAT:- What is required to be seen is whether CAPL has advanced moneys as pure loan amounts or for business purposes. The agreements produced by the assessee before Ld CIT(A), which were also confronted with the AO, would prove that the transactions entered between the parties are business transactions - both the companies are maintaining accounts as running accounts only and real estate investment activity was agreed to be a continuous activity. Hence the question of making one to one reconciliation, as contended by Ld DR. would not arise in these types of transactions - we confirm the order of Ld CIT(A) in deleting the additions made u/s 2(22)(e). Addition of unexplained investment - HELD THAT:- Since the addition made on substantive basis in the hands of Brindavan Beverages P Ltd has been upheld by Ld CIT(A), the protective addition made in the hands of the assessee of the very same amount is liable to be deleted - the above said company had filed appeal before ITAT challenging the decision rendered by Ld CIT(A) and further the said company has opted to settle the issue under DTVSV Scheme. The assessee has filed copy of Form No.3 given under the above said scheme. Under the above said scheme, the above said company is required to pay tax shown in Form no.3 and final certificate in Form no.5 is required to issued in proof of settlement of dispute. Since these matters are pending, we restore this issue to the file of AO with the direction to delete this protective addition upon furnishing of Form no.5 by the assessee.

  ---

• 2021 (10) TMI 1159
  Rectification of mistake u/s 254 - HELD THAT:- Once a mistake/error is brought to the notice of the Tribunal, which is apparent on face of record, either by the assessee or the assessing officer, the Tribunal would have the necessary power to rectify/amend its order. This power will also extend to a situation, such as the one obtaining in the present case, where the petitioner s counsel withdrew the appeal, for the reason that, the issue concerning transfer pricing adjustment in respect of the assessment year (AY) in issue i.e., AY 2011-12, stood resolved. The petitioner s counsel, inadvertently, failed to bring to the notice of the Tribunal, that the issues raised in ground nos. 6 and 7 of the appeal were outstanding, and that they needed to be adjudicated upon. Thus, having regard to the aforesaid, we are of the view that the impugned order, passed by the Tribunal in the miscellaneous application deserves to be set aside.

  ---

• 2021 (10) TMI 1158
  Assessment u/s 153A - whether the seized material was under Section 132 or books of account, other documents or any assets are requisitioned under Section 132A? - HELD THAT:- Petitioner had filed their returns for the Assessment Year in question, which they thought was the true and correct return of income and that it contained all other particulars as prescribed. If respondent felt that was not enough and petitioner should file a fresh true and correct return of income because of the search, then respondent should certainly indicate in its notice what were the seized material under Section 132 or books of accounts or other documents or any assets requisitioned under Section 132A. Otherwise an assessee would file a copy of what it had filed earlier, which respondent anyways had in its file. Petitioner has also been seeking from respondent to make available copy of the alleged incriminating material found/seized during the search based on which the notice has been issued. Mr. Chhotaray states that such material has been given later. We are not going into that aspect at this stage because what we find is that the notice issued under Section 153A is bereft of any material. Nothing prevented respondent from mentioning in the notice the basis for issuing the notice under Section 153A so that petitioner could comply with the same as prescribed. The notice dated 29th November 2018 impugned in this petition is quashed and set aside. We do not make any observation on the merits of the case. Respondent may issue fresh notice under Section 153A and word it suitably, as advised so that petitioner may have some information reading that notice the basis on which such notice has been issued. All rights and contentions of the parties are kept open.

  ---

• 2021 (10) TMI 1157
  Nature of gain - sale of technical know-how - slump sale - capital or revenue gain - goodwill liable to be taxed u/s 45 of the Act as capital receipt at the value given by the purchaser in its financials - HELD THAT:- It cannot be gainsaid that the assets were self-generated and the cost of acquisition of the said assets was indeterminable. The whole exercise was done by the Revenue merely for the reason that the purchaser in his books of accounts has shown the same as the technical know-how. If such technical know-how could not attract capital gains, in view of B.C.Srinivasa Setty [ 1981 (2) TMI 1 - SUPREME COURT] the Revenue has made an attempt to treat the technical know-how as goodwill in the second round. This reasoning of the Tribunal cannot be faulted with, in the light of the judgment of the Hon ble Apex Court in B.C.Srinivasa Setty supra. The gain from transfer of business by implication was not a Revenue receipt chargeable to tax either under Section 28 or under Section 56 or Section 10[3] of the Act. Moreover, the order passed by the Tribunal at the first instance has reached finality. Hence, this substantial question of law has to be answered in favour of the Revenue and against the assessee. Non-competence fee receipt - Since we have held that the technical knowhow is not a goodwill, the arguments of the Revenue for remand would not inspire any confidence. The non-competence receipt was received by the assessee in cash. See case of Mahindra Mahindra Ltd [ 2003 (1) TMI 71 - BOMBAY HIGH COURT] wherein it is held that Section 28[iv] does not apply to benefits in cash or money, referring to the judgment of the Hon ble High Court of Gujarat in CIT V/s. Alchemic Pvt. Ltd . [ 1980 (8) TMI 42 - GUJARAT HIGH COURT] The non-competence fee was in fact a payment for sharing customer database and sharing of trained employees. The receipt towards the said transfer is not attributable to transfer of any assets or right and the mere fact that the receipt is not attributable to noncompete covenant, it cannot be automatically concluded that the receipt was either from business or income of an activity recurring in nature. - Decided in favour of assessee. Interest under Section 244A - HELD THAT:- If the orders under which such refund was made, subsequently if gets reversed, the interest paid to the assessee under Section 244A if to be withdrawn, no fault can be fixed on the assessee for the delay caused in the entire process, thereby seeking for compensatory interest. Claiming interest on the interest paid under Section 244A of the Act not being provided under the Statute, the Tribunal rightly held that the Assessing Officer shall recompute the interest chargeable under Section 220[2] of the Act by reducing only the principal amount of tax from the refund granted earlier and not to charge interest on the interest granted earlier under Section 244A of the Act, the same cannot be held to be unjustifiable. Thus, we find no perversity or illegality in the order of the Tribunal impugned.

  ---

• 2021 (10) TMI 1156
  Deduction u/s 35D - foreign currency convertible bonds [FCCBs] as debentures and considered it to be part of capital employed for allowing deduction - whether FCCB convertible bonds are debentures or no? - HELD THAT:- As in terms of the Companies Act, 1956 debenture includes debenture shares and the bonds being interest bearing instruments which represent a loan, FCCB bonds, the instruments issued to investors for raising funds which is repayable after certain period is nothing but a debt instrument. This view is supported by the judgment of the High Court of Madras in case of PVP Ventures Ltd. [ 2012 (7) TMI 696 - MADRAS HIGH COURT] confirmed by the Hon ble Apex Court 2014 (3) TMI 1127 - SC ORDER] by the Revenue. For the reasons aforesaid, the finding of the Tribunal that the increase or decrease in liability on account of fluctuation in foreign exchange as on the date of the balance sheet would increase or decrease the liability of the assessee and such liability would be on capital account as such, the gain or loss would be on capital account and not taxable cannot be faulted with. Hence, the challenge made by the Revenue on this issue is answered against the Revenue and in favour of the assessee.

  ---

• 2021 (10) TMI 1155
  Assessment of trust - Addition on account of provisions of gratuity and prior period expenses - AO observed that the assessee has not claimed exemption u/s 10(23)(iiiab) of the Act and failed to submit requisite Audit Report in form No.10B - HELD THAT:- As the assessee is an educational institution and existing solely for education purpose and not for the purpose of profit. It is noticed that the Assessing Officer has incorrectly stated that the assessee had not made any claim u/s 10(23)(iiiab) of the Act. In fact, the assessee had made claim u/s 10(23)(iiiab) of the Act. Therefore, we do not find any infirmity in treating the income at NIL by Ld.CIT(A). Thus, grounds raised by the Revenue are dismissed.

  ---

• 2021 (10) TMI 1154
  TDS u/s 195 - payment made by the assessee company to non-resident - whether it is in nature of royalty? - Rectification application u/s 154 - HELD THAT:- The core issue has been decided putting reliance on the decision of the Hon ble Supreme Court in the case of Engineering Analysis Centre of Excellence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT] that the payment made by the assessee company to non-resident are not in nature of royalty and therefore the assessee was not required to deduct TDS as per provisions of the Act. When the core issue is decided in favour of the assessee and against the Revenue, there ceased to be any obligation on the part of the assessee for deduction of TDS. The entire area of the appeal before us by the Revenue against the rectification order u/s.154 of the Act passed by the Ld. CIT(Appeals) is in pursuance to the order of TDS deduction. That when it has been decided that the assessee was under no obligation to deduct TDS for payment to non-resident as it was not in nature of royalty, therefore, the said appeal filed by the Revenue before us becomes infructuous and hence, dismissed.

  ---

• 2021 (10) TMI 1153
  Disallowance u/s 14A r.w.r.8D - disallowance as per formula prescribed under the aforesaid Rules - HELD THAT:- CIT(A) deleted the disallowance under Rule 8D(2)(ii) made out of interest expenditure observing that the loan taken by the assessee was for specific purposes and further that the assessee had sufficient own funds in the shape of share capital and surplus to make the investments. He, therefore, relied on the decision in the case of CIT Vs. REI Agro Industries Ltd [ 2013 (12) TMI 1517 - CALCUTTA HIGH COURT] . DR could not point out any error in the above findings of the Ld. CIT(A). Disallowance made under Rule 8D(2)(iii) - CIT(A) relying on the decision in the case of CIT Vs. REI Agro (supra) and in the case of ACB India Ltd [ 2015 (4) TMI 224 - DELHI HIGH COURT] directed the Ld. AO to consider only those investments upon which exempt income had been earned by the assessee. The Ld. DR could not point out any contrary decision on this issue. In view of this, this ground of appeal of the revenue is dismissed. Disallowance being the payment of premium on redemption of FCCB( Foreign Currency Convertible Bonds) - HELD THAT:- DR has fairly admitted that the accounting entries are made as per Companies Act, 1956. The expenditure claimed on account of premium is otherwise admissible as per relevant provisions of the Income Tax Act. DR has further admitted that this issue has been decided in favour of the assessee in the earlier assessment year by the Co-ordinate Bench of this Tribunal. In view of this, this ground of the revenue s appeal is hereby dismissed. Claim of bad debts written off from the Renukoot Unit, which was already sold out/transferred - slump sale - HELD THAT:- We are not convinced by his argument. The Renukoot Unit in question was sold out by way of slump sale on 23/05/2011, whereas, the assessee has calculated the net worth of the unit as on 31.03.2011 and claimed bad debts in the relevant A.Y 2012-13 - on slump sale, the assets/liabilities get transferred to the purchaser. In our view the assessee deliberately kept the entries continued in its accounts so as to claim the aforesaid loss on account of bad debts at the end of the year, which in our view is not at all justified. This ground of appeal of appeal is accordingly allowed in favour of the department and the order of the Ld. AO on this issue is restored. Deduction of Education Cess - Whether an allowable deduction while computing the income chargeable under the heads of profits and gains of business or profession? - HELD THAT:- A perusal of the provisions of the Finance Act 2004 and Finance Act 2011 would show that it has been specifically provided that education cess is an additional surcharge levied on the income-tax. Therefore, in the light of the decision of the Hon ble Supreme Court in the case of CIT Vs. K. Srinivasan 1971 (11) TMI 2 - SUPREME COURT] the additional surcharge is part of the income-tax. The aforesaid decision of the Hon ble Apex Court and the provisions of Finance Act, 2004 and the relevant provisions of section 2(11) (12) of the subsequent Finance Acts have not been brought into the knowledge of the Hon ble High Courts in the cases of Sesa Goa Ltd Chambal Fertilisers [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] . Since the decision of the Hon ble Supreme Court prevails over that of the Hon ble High Courts, therefore, respectfully following the decision of the Hon ble Supreme Court in the case of CIT Vs. K. Srinivasan (supra), this issue is decided against the assessee.

  ---

• 2021 (10) TMI 1152
  Levy of penalty u/s 271(1)(c) - return of income was filed belatedly - HELD THAT:- Admittedly, there is no variation between the returned income and assessed income. Though the return of income was filed belatedly, nevertheless it is return of income under the provisions of section 139 of the Act and the findings of CIT(A) that the penalty is not leviable u/s 271(1)(c) of the Act is based on correct appreciation of facts and law governing the levy of penalty in the facts of present case. It is settled position of law that the penalty u/s 271(1)(c) of the Act is leviable with reference to concealment in the return of income. See NA MALBARY AND BROTHERS [ 1963 (11) TMI 5 - SUPREME COURT] and ONKAR SARAN AND SONS [ 1992 (3) TMI 1 - SUPREME COURT] In the absence of any variation between returned income and assessed income, no penalty u/s 271(1)(c) of the Act can be levied. Hence, we do not find any merit in the appeal filed by the Revenue. Accordingly, the appeal filed by the Revenue stands dismissed.

  ---

• 2021 (10) TMI 1151
  Reopening of assessment u/s 147 - Bogus loan transactions - assessee failed to establish the identity and genuineness of the entities - assessee failed to reply to the show cause notices - summon u/s 131 issued to the principal officers of both these entities were not accepted which were confronted to the director o the assessee - HELD THAT:- AO was clinched with specific information which indicated possible escapement of income in the hands of the assessee. The assessment u/s 143(3) was completed on 22/03/2013 whereas tangible information was received by Ld. AO vide letter dated 29/03/2017 wherein it transpired that the loans taken by the assessee during the year were from those entities which were involved in penny stock manipulation and provided exit to beneficiaries of Long Term Capital Gains. These two entities were allegedly dummy paper entities with no real business and involved in sham transactions. These facts, in our opinion, were quite sufficient to reopen the case of the assessee The arguments made by Ld. AR do not convince us. At the time of reopening, the only requirement is that Ld.AO should have specific tangible information which indicate possible escapement of income in the hands of the assessee. Nothing more is required at this stage to reopen the case of the assessee. The information so received, in our considered opinion, was sufficient tangible material. Therefore, legal grounds raised by Ld. AR stand rejected. Upon perusal of rectification order u/s 154, it could be gathered that the director of M/s Gateway Leasing Private Limited appeared before Ld. AO and his statement was recorded on oath u/s 131. In the recorded statement, the fact of advancing loan to the assessee as well as repayment was duly accepted. Upon perusal of paper-book as placed before us, it could be gathered that the assessee has duly filed ledger account of the party along with name, address, PAN of the lender, details of brokers who arranged loan, securities offered, term sheet / sanction letter, Board Resolution, Inter-corporate deposit receipt, pledge agreement and various other similar documents in support of the genuineness of the loan transaction. The loan was fully paid on 21/05/2010 along with interest. The transactions were confirmed by M/s Gateway Leasing Private Limited in response to notice u/s 133(6). Thus, the assessee had duly discharged the onus of proving the identity of the lender, their creditworthiness and the genuineness of the loan transaction. This being so, the impugned additions are not sustainable in law. Estimation of income - bogus purchases - CIT-A estimated profit element @12.5% - HELD THAT:- As it could be gathered that the purchases were supported by primary purchase documents and the payments to the suppliers was through banking channels. The whole of purchases have been disallowed while accepting the sales which could not be held to be justified. Therefore, the estimation made by Ld. CIT(A), for all the three years, is quite fair and reasonable. Finding no reason to deviate from the same, we dismiss the appeals for all the three years.

  ---

• 2021 (10) TMI 1150
  Assessment u/s 153A - Undisclosed investment in the residential buildup house - difference in values as declared by the assessee and as opined by the DVO, - Whether no incriminating evidence was found during the course of search relating to the part additions as confirmed by the Worthy CIT(A)? - Tribunal in the second appeal reversed the findings of the Ld. CIT(A) and deleted the addition holding that since no material was found during the search to justify the reference to the DVO, the action was not in accordance with law - HELD THAT:- As in the present case, the authorities below have not pointed out any corroborative evidence to show that the assessee had made investment in question more than the amount declared by the her during assessment proceedings. Hence respectfully following the judgment of Abhinav Kumar Mittal [ 2013 (1) TMI 629 - DELHI HIGH COURT] we allow the appeal of the assessee and set aside the impugned order passed by the Ld. CIT(A). Undisclosed capital gain - Addition merely on the basis of the statement of Shri S.S. Bindra, one of the co-owners of the house in question - HELD THAT:- AO has even not examined Shri Iqbaljit Singh to ascertain the actual sale consideration of the said house. As pointed out by the Ld. counsel even the other co-owners were not examined. As per the law laid down in the case of Daulat Ram Rawat Mal [ 1972 (9) TMI 9 - SUPREME COURT] in the present case the documentary evidence would prevail over the oral statement relied upon by the AO. Hence, we find merit in the contention of the Ld. counsel for the assessee that the Ld. CIT(A) has wrongly upheld the addition made by the AO. Accordingly, we allow this ground of the appeal of the assessee and set aside the findings of the Ld. CIT(A). Addition of low household expenses - HELD THAT:- As no incriminating material was recovered during the course of search and seizure action, the Ld. CIT(A) has wrongly sustained the addition made by the AO on account of house hold expenses.CIT(A) has not given any cogent and convincing reason for sustaining the addition on account of the household expenses. In our considered view the addition sustained by the Ld. CIT(A) is not based on any evidence on record. - Decided in favour of assessee.

  ---

• 2021 (10) TMI 1149
  Deemed dividend assessed u/s 2(22)(e) - HELD THAT:- As noticed that the decision rendered by Ld CIT(A) in deleting the assessment of deemed dividend in the hands of Prakash Ladhani has been upheld by the Tribunal on the reasoning that the transactions of advancing money by CAPL to BBPL are business transactions. Accordingly, we confirm the decision of ld CIT(A) in holding that there is no case for assessment of deemed dividend on merits and hence the protective addition made in the hands of the assessee herein is liable to be deleted. Unexplained investment as assessed protectively - DTVSV Scheme - Since the addition made on substantive basis in the hands of Shri Prakash Ladhani has been upheld by Ld CIT(A), the protective addition made in the hands of the assessee of the very same amount was deleted by Ld CIT(A). As further submitted that Shri Prakash had filed appeal before ITAT challenging the decision rendered by Ld CIT(A) and further he has opted to settle the issue under DTVSV Scheme. The assessee has furnished a copy of Form No.1 filed under the above said scheme. Under the above said scheme, the above said company is required to pay tax shown in Form no.3 and final certificate in Form no.5 is required to be issued in proof of settlement of dispute. Since these matters are pending, we restore this issue to the file of AO with the direction to delete this protective addition upon furnishing of Form no.5 issued to Shri Prakash Ladhani in settlement of this dispute.

  ---

• 2021 (10) TMI 1148
  Validity of reopening of assessment u/s 147 - notice u/s 148 was not validly served - notice u/s 148 of the Act was issued on 12-03-2014 and it was served on the assessee by way of affixture only after six days, i.e. on 18-03-2014, as per the report of the serving officer - - mandation of serving officer has to show that all due and reasonable diligent efforts were made to serve the assessee/defendant with the notice - HELD THAT:- Without exhausting the regular / ordinary course of service of notice as provided under section 282 of the Act, the assessing officer has straight away proceeded to serve the notice by way of substituted service as provided under Rule 17 and 20 of Order V of CPC - there is nothing on record to suggest that before resorting to substituted service of notice issued under section 148 of the Act, the pre-conditions of Rules 17 and 20 of Order V CPC were satisfied. Nowhere in the assessment order the assessing officer has mentioned even a single sentence to indicate that either the assessee or anyone authorized on his behalf has refused to sign the acknowledgement or the assessing officer even after reasonable attempt has failed to find the assessee at the given address or the assessee has consciously avoided service of notice issued under section 148 of the Act. Thus, in our view, the notice issued under section 148 of the Act was not validly served on the assessee. Therefore, the fundamental requirement for initiation of proceedings under section 147 of the Act stands unsatisfied / unfulfilled. This being a jurisdictional error, the consequence which follows would result in invalidation of the assessment order. Therefore, we hold that the assessment order passed under section 143(3) r.w.s. 147 of the Act without valid service of notice under section 148 of the Act is void ab initio. Eligibility of reasons to believe - As reading of the reasons recorded clearly reveals that being of the view that the assessee has not filed any return of income for the impugned assessment year resulting in escapement of income, the assessing officer has reopened the assessment under section 147 of the Act. However, the facts on record reveal that the assessee, in fact, had filed his return of income for the impugned assessment year on 18-05-2010 declaring total income of Rs. 2,05,448/. It is also evident, the return of income so filed by the assessee was processed under section 143(1) of the Act on 15-04-2011 granting refund of Rs. 7,190/-. Thus, it is very much clear, the reason to believe for reopening of assessment has no nexus with the material on record. Thus due to erroneous assumption of facts while forming belief for reopening of assessment, the proceeding has been vitiated. Consequently, the assessment order passed under section 143(3) r.w.s. 147 of the Act has been rendered invalid. - Decided in favour of assessee.

  ---

• 2021 (10) TMI 1147
  Assessment u/s 153C - Whether no addition/disallowance can be made in absence of any incriminating material found as a result of search and seizure operation? - HELD THAT:- As on the date of search and seizure operation, assessments for the impugned assessment years have not abated. A perusal of the assessment orders would reveal that the various additions/disallowance made by assessing officer, such as, disallowance of depreciation, cash credits, 14A disallowance, etc. are not based on any incriminating material found as a result of search. At least, in the body of the assessment orders the assessing officer has not made any observation to demonstrate that the additions/disallowances made are with reference to incriminating material found as a result of search. On a specific query from the bench, learned departmental representative while accepting that the assessing officer has not referred to any incriminating material for making additions also could not bring to our notice any incriminating material on record which can be even remotely connected to the additions made by the AO. As per the ratio laid down in case of CIT vs Continental Warehousing Corporation and Another [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] in a case where on the date of search and seizure proceedings the assessment has not abated, no addition can be made in absence of any incriminating material - No infirmity in the decision of Commissioner (Appeals) in deleting the additions made by the assessing officer - Decided in favour of assessee.

  ---

• 2021 (10) TMI 1146
  Revision u/ 263 by CIT - revisional order passed ex-parte has observed that deduction claimed by the assessee on sale of agricultural land u/s 54B of the Act has been wrongly allowed without adequate enquiry and the order of the AO passed u/s 143(3) of the Act is vitiated by non-application of mind - principal allegation of the PCIT is that the land sold and then purchased by the assessee is not an agricultural land - HELD THAT:- We find the observations of the PCIT neither here nor there. It is manifest that the PCIT has proceeded on a total misconception of law in the given set of facts. Where the agricultural sold land situated is outside the municipal limits, it will not be deemed as capital asset under Section 2(14)(iii) of the Act at the first place and consequently there would be no liability of capital gain on the assessee at the threshold. Hence, we do not understand the need for certificate of land record authorities in this regard. The assessee has not claimed at all that the agricultural land is situated outside the specified distance of municipality. The assessee has, in fact, calculated the LTCG and claimed deduction thereon on the ground that the capital gain accrued on sale of land has been towards purchase of other land parcels which is also used for agricultural purposes. The PCIT has made out a totally different case which has no relation with application of Section 54-B of the Act. The use of agricultural land, after its transfer to a builder, is of no consequence for the purposes of Section 54-B of the Act. The PCIT himself has admitted that the land in sale to be agricultural land and also not disputed the purchase of agricultural land by utilization of capital gain for agricultural purposes. The PCIT has proceeded to disturb the assessment on totally irrelevant consideration and without showing any error in the claim. On appreciation of facts available before us showing the use of land for agricultural purposes having regard to the agreement with farmers and other supporting papers, we are unable to discern even any remote error in the action of the AO in admitting the claim of deduction under Section 54-B of the Act. On the other hand, we find that the action of the PCIT suffers from vice of arbitrariness and total lack of application of mind. The palpably wrong revisional order is accordingly set aside and quashed. Non-issuance of notice and on total lack of opportunity while concluding the proceedings under Section 263 - whether a failure to give a reasonable opportunity to the assessee of being heard was only a procedural irregularity ? - The finality of the assessment cannot be disturbed for the failure of the PCIT to obdurately adhere to the explicitly prescribed requirement of opportunity to assessee. Hence, in the absence of any opportunity to the assessee for which the fault is attributable squarely to the PCIT, is fatal and such defect being incurable, the revisionary order passed under Section 263 of the Act is also required to be quashed independently on this ground also. - Decided in favour of assessee.

  ---

• 2021 (10) TMI 1145
  Validity of reopening of assessment - non-service of notice u/s. 143(2) - as per AO Assessee did not comply with the notice u/s. 148 of the Act by filing the return of income, therefore he issued notice u/s. 142(1) of the Act calling for certain details which was also not responded by the assessee - HELD THAT:- We agree that the AO had no other alternative but to proceed with framing assessment u/s. 144 of the Act since it is admitted that the assessee had not filed the return of income pursuant to the service of notice u/s. 148 of the Act. Therefore, the AO rightly did not issue notice u/s. 143(2) of the Act, because there was no statutory requirement of the AO to issue the same. Ergo this legal issue raised stands dismissed. Non participation from the side of the assessee - Addition as long term capital gain - According to assessee this amount was sale consideration of his Shaiel Dhan Bhumi/Shaiel Raice Land/Rural Agricultural Land which is exempted u/s. 10(37)(1) read with Section 2(14) - HELD THAT:- First of all it is not in dispute that the assessment order has been passed after reopening u/s. 147 of the Act and thereafter by framing the assessment u/s. 144 of the Act because according to AO the assessee did not co-operate during the assessment proceedings. And it is the assessee s case that for reasons beyond his control being not well he was prevented from responding to the notice u/s. 142(1) and notice u/s. 144 of the Act. So, as held by the Hon ble Supreme Court Tin Box Compan y[ 2001 (2) TMI 13 - SUPREME COURT] if sufficient opportunity is not given by the AO while framing of assessment, then the assessee should be given opportunity before the AO. Since the assessee has to explain the amount deposited in his bank account supported by the documents and the AO had to examine the veracity of the same, we deem it fit to set aside the impugned order of Ld. CIT(A) for de novo assessment on the issue of addition made by the AO - Appeal of assessee is allowed for statistical purposes.

  ---

• 2021 (10) TMI 1144
  Revision u/s 263 by CIT - scope of revisionary jurisdiction of ld. PCIT - validity of declaration made under IDS - income declared by assessee under IDS was accepted without any variation or objection - AO issued notice u/s 153C requiring the assessee to file return of income - search and survey of SRK group and it related parties, of which the assessee is also part, has resulted in to impounding of documents/ books of accounts and evidence related with evidence of undisclosed receipt and expenses in respect of project Amrut Sarovar Residenty - HELD THAT:- We find the there is no dispute that the AO while passing the assessment order accepted the claims of the assessee in non- speaking order. It is not the case of ld PCIT that the AO is not authorised (empowered) to accepted the return of income in non-speaking order. We have seen that the AO while passing the assessment order recorded that the Authorized representative of the assessee vide various order sheet entries have furnished the relevant details and information called for. After affording ample and adequate opportunities of being heard to the assessee, assessment proceedings have been completed on the basis of the submissions and details collected and in consequence upon the conclusion of proceeding and hearing of evidences, assessment is made by this order - A perusal of show cause notice under section 263 dated 08.03.2021, clearly demonstrate that the ld PCIT identified all the issues which were the subject matter of the notice under section 142(1) and the questionnaire attached thereto, were issued by the assessing officer, except the issue of initiation of penalty 271D. The ld PCIT in his show cause notice (SCN) under section 263 has accepted that the AO made detailed questionnaire dated 03.12.2018. And on perusal record and details /evidences available on record, the PCIT noted that AO has not made further inquiry. PCIT has not made a case that there was no enquiry or lack of inquiry rather recorded that the AO called detailed inquiry. We find that the ld. PCIT has not specified that what kind of further inquiry was required, when the income disclosed in IDS was duly accepted by higher authority. And the acceptance of IDS was never questioned by Board or other superior authority then PCIT. We find that in SCN the ld PCIT observed that the assessee made declaration on the basis of misrepresentation of fact. However, the ld PCIT failed to mentioned the nature of misrepresentation or the basis of his such observation. PCIT failed to give any specific finding on his observation while revision the assessment order. After going through the entire material, we find that the AO had taken a conscious decision on the basis or explanation furnished by assessee. Furthermore, the assessment order was duly approved by the ld JCIT. There in not finding of ld PCIT that the approval granted by the JCIT is not proper or non-application of proper procedure. We find that in the case in hand the AO has made required inquiry and came to a plausible, reasonable and legally sustainable conclusion in allowing the claims to the assessee. Non initiation of penalty under section 271D/ 271E - We find that in case of CIT Vs Suresh G. Shah [ [ 2006 (8) TMI 101 - HIGH COURT, GUJARAT] and CIT Vs Parmanand M. Patel [ 2005 (7) TMI 72 - GUJARAT HIGH COURT] it was held that CIT cannot exercise his jurisdiction under section 263 for the purpose of initiation of penalty proceedings. Otherwise also we find that the assessee has specifically in its reply to the SCN to the ld PCIT has stated that the cash was received only against the booking and no loan or such transaction was undertaken by them. PCIT failed to specify the transaction on which initiation of penalty either under section 271D or 271E was warranted. And on the issues of validity of discloser in IDS, the ld PCIT has not specified that while making declaration the assessee made any misrepresentation of any facts. Once the IDS in all cases were accepted by ld. PCIT, the AO or the Range head no authority to relook or power to revoke or to examine its validity. We further find that the ld PCIT while directing the AO has not himself revoked the IDS nor directed to refund the payment of tax to the assessee. In the IDS the assessee has paid more tax to the revenue then the rate of normal tax, so there is no loss of revenue. At the cost of repetition, we note that the AO while passing the assessment order in all years have made inquiry and took reasonable, plausible and legally sustainable view. The Hon ble Delhi High Court in CIT Vs Kelvinator of India Ltd [ 2002 (4) TMI 37 - DELHI HIGH COURT] held that if the AO has adopted one of the course permissible in law, which resulted in loss of revenue or where two view is possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as erroneous order prejudicial to the interest of revenue unless view taken by the AO is not sustainable in law. At the cost of repetition, we may note that the ld PCIT neither in his show cause notice nor in ultimate / final order has held that the order passed by the AO is unsustainable in law. We are of the considered view that the ld PCIT was not justified in subjecting the assessment order for all three years to revision proceedings by taking view that the AO has not made further inquiry, therefore we quash the revision order (s) in all three assessment years.- Decided in favour of assessee.

  ---

• 2021 (10) TMI 1143
  Validity of reopening of assessment u/s 147 - Period of limitation - notice issued beyond 4 years - taxability of goodwill as credited to the accounts of retiring partners - HELD THAT:- AO has power to reassess if he has reason to believe that any income chargeable to tax escaped assessment but however, the proviso limits that power that no action shall be taken after expiry of four years from the relevant assessment year, which means to say that if the AO has reason to believe that any income chargeable to tax as escaped assessment, the notice should be issued within four years from the end of said assessment year. Therefore, in our opinion proviso to section 147 of the Act is meant to limit the scope of provision u/s. 147 of the Act, going by this, it is safe to say that the proviso to section 147 of the Act is a qualifying proviso and it only seeks to limit the main provision in section 147 of the Act with stipulation or condition. In the present case, we already discussed the same in the aforementioned paragraphs that the AO should have issued notice u/s. 148 of the Act on or before 31-03-2013 whereas the notice issued was on 23-04-2014. Further, we also discussed that all the relevant details regarding the admission of new partners and also retiring partners were fully disclosed in the audit report in Form No. 3CD, and payment of goodwill thereon Thereby, we find no infirmity in the order of CIT(A) and it is justified - Decided against revenue.

  ---

• 2021 (10) TMI 1142
  Non speaking order passed by CIT-A - Disallowance of set off claimed - HELD THAT:- AO has not given any cogent reason or referred to the necessary provision of law as to why the claim by the assessee is not allowable. CIT(A) again has copied the order of AO not spelling out as to why and what violation of section 72 of the Act, the claim is being dismissed. Addition being the difference in business income arrived by the A.O - Again Ld. CIT(A) has passed a non speaking order. The Ld. CIT(A) mention that assessee could not file any documents and the reconciliation warranting, the AO to make the addition. But this is totally wrong appreciation as AO has mentioned that the reconciliation has been given by the assessee, but it is not acceptable. CIT(A) has passed the order without application of mind. It is settled law that even administrative orders have to be construct with rule of natural justice. The order by Ld. CIT(A) is on the cusp of abandonment of statutory duty cast upon him as the first appellant authority. This is more palpable by a reading of ground No. 1 of the assessee as above. Accordingly, remit the issue to the file of Ld. CIT(A) to pass a proper speaking order after giving the assessee proper opportunity of being heard. Assessee appeal allowed for statistical purpose.

  ---

• 2021 (10) TMI 1141
  Addition invoking provisions of section 69 and 40A/40a(ia) - CIT- A deleted the addition - HELD THAT:- We agree with the Ld. Sr. DR that the orders of Ld. CIT(A) are cryptic and is passed without recording proper reasoning. The Ld. CIT(A) reproduced the submissions filed by assessee and decided the issue without giving reasons. In the interest of justice we remand this issue back to the Ld. AO to verify the claims in both the appeals based on evidences/submissions filed by assessee and in accordance with law. Needless to say that proper opportunity of being heard must be granted to assessee in accordance with law. Revenue appeals stands allowed for statistical purposes.

  ---

• 2021 (10) TMI 1140
  Claims of amount paid for employees taken on Secondment - Revenue attribution - As submitted assessee was rendering management consultancy services to the group entities of K.K. Modi Group by availing services of seconded employees for which it was setup - HELD THAT:- AR has pointed out that in A.Y. 2011-12, assessee had taken on seconded employees who were originally employee in the flagship group company i.e. Godfrey Philips India (P) Ltd. and then seconded to the assessee on cost to company basis, without any mark-up. It has been further pointed by the Learned AR that no disallowance of secondment cost to employees was disallowed by the AO in earlier years. The aforesaid contention of the Learned AR has not controverted by the Revenue. We find that AO on one hand had held the secondment agreement to be not a genuine agreement but on the other hand had disallowed only 50% of the expenditure which according to us appear to be contrary. We further find that CIT(A) for the reasons stated in the order has deleted the addition. Before us, Revenue has not pointed any fallacy in the findings of CIT(A). In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed.

  ---

• 2021 (10) TMI 1139
  Addition u/s 69A - Cash deposits during the demonetization period - Assessee submitted that the savings were out of accumulated savings in the form of pin money and minor cash gifts received by her from her parents and in-laws on the occasion of birthdays, anniversaries etc. - HELD THAT:- CIT(A) grant relief to Rs. 50,000/- and upheld the addition to the extent of Rs. 2,00,000/-. Before us, assessee has submitted that the deposits to be out of accumulated savings and out of the cash gifts received by her on the occasion of birthdays and anniversaries. It is also a fact that assessee s husband is an income tax payer working for an MNC. in view of the CBDT Circular vide Instruction No. 03/2017 dated 21st February 2017 and relying on the decision of SMT. UMA AGRAWAL BABA KAPUR SUNARAN KA MOHALLA VERSUS I.T.O 1 (3) GWALIOR, M.P. [ 2021 (6) TMI 712 - ITAT AGRA] , the explanation of the assessee about the source of cash deposits cannot be brushed aside without there being any evidence to the contrary.- Decided in favour of assessee.

  ---

• 2021 (10) TMI 1138
  TDS u/s 195 - payments abroad of export commission to non-resident the foreign agent for the procurement of export orders - FTS under the India-France DTAA - disallowance u/s 40(a)(i) - HELD THAT:- As relying on STERIA INDIA LTD. (EARLIER KNOWN AS XANSA (INDIA) LTD.) [ 2018 (4) TMI 578 - DELHI HIGH COURT] for bringing the services under the net of Fee for Technical Services (FTS) under the India France DTAA, the make available clause has to be satisfied. But in the services rendered by the non-resident of procuring export order for the assessee, no knowledge has been provided to the assessee which could be exploited further by the assessee. In such circumstances, the services rendered by the non-resident cannot be held as FTS under the India-France DTAA. Accordingly, such services will not be chargeable in India in the hands of nonresident under DTAA and, therefore, no liability to deduct tax at source will arise. Consequently, payment to said non-resident is not liable to disallowance under section 40(a)(i) of the Act. - Decided in favour of assessee.

  ---

• 2021 (10) TMI 1137
  Assessment u/s 153A - Addition u/s 68 - action of CIT(A) in holding that no addition was warranted in the present case - HELD THAT:- CIT(A) while deciding the issue in favour of the assessee has given a finding that the original return of income filed by assessee was processed u/s. 143(1) of the Act and at the time of search action no assessment or reassessment proceedings were pending or abated. He has further given a finding that the addition made u/s. 68 of the Act was not based on any incriminating document/record or any other material found/seized during the course of search proceedings. Before us, no fallacy in the findings of CIT(A) has been pointed out by the Revenue. In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed.

  ---

• 2021 (10) TMI 1136
  Revision u/s 263 by CIT - validity of declaration made under IDS - Before issuing the notice under section 153C of the Act, the assessee made disclosure under income disclosure scheme (IDS) - understatement of income of the project - HELD THAT:- The phrase prejudicial to the interests of the revenue is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the revenue. If due to an erroneous order of the Income-tax Officer, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the revenue. The phrase prejudicial to the interests of the revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Income-tax Officer is unsustainable in law. There must be material available on the record called for by the Commissioner to satisfy him prima facie that the aforesaid two requisites are present. If not, he has no authority to initiate proceedings for revision. Exercise of power of su motu revision under such circumstances will amount to arbitrary exercise of power. It is well-settled that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged before the Court, it would be open to the Courts to examine whether the relevant objectives were available from the records called for and examined by such authority. The decision of the ITO could not be held to be erroneous simply because in his order he did not make an elaborate discussion in that regard. Moreover, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous, he simply asked the ITO to re-examine the matter, which was not permissible. After affording ample and adequate opportunities of being heard to the assessee, assessment proceedings have been completed on the basis of the submissions and details collected and in consequence upon the conclusion of proceeding and hearing of evidences, assessment is made by this order . A perusal of show cause notice under section 263 dated 08.03.2021, clearly demonstrate that the ld PCIT identified all the issues which were the subject matter of the notice under section 142(1) and the questionnaire attached thereto, except the issue of initiation of penalty 271D and validity of IDS. The ld PCIT in his show cause notice (SCN) under section 263 has accepted that the AO made detailed questionnaire (para -5) dated 03.12.2018. And on perusal record and details /evidences available on record, the PCIT noted that AO has not made further inquiry. Thus, the ld. PCIT has not made a case that there was no enquiry or lack of inquiry rather recorded that the AO called detailed inquiry. We find that the ld. PCIT has not specified that what kind of further inquiry was required, when the income disclosed in IDS was duly accepted by higher authority. And the acceptance of IDS was never questioned by Board or other superior authority then PCIT. It is the AO who has to take a conscious decision if any further inquiry is required or not. Furthermore, the assessment order was duly approved by the ld JCIT. There in not finding of ld PCIT that the approval granted by the JCIT is not proper or non-application of proper procedure. AO has made required inquiry and came to a possible conclusion in allowing the claims to the assessee. Non initiation of penalty under section 271D/ 271E - We find that in case of CIT Vs Suresh G. Shah [ [ 2006 (8) TMI 101 - HIGH COURT, GUJARAT] and CIT Vs Parmanand M. Patel [ 2005 (7) TMI 72 - GUJARAT HIGH COURT] it was held that CIT cannot exercise his jurisdiction under section 263 for the purpose of initiation of penalty proceedings. Otherwise also we find that the assessee has specifically in its reply to the SCN to the ld PCIT has stated that the cash was received only against the booking and no loan or such transaction was undertaken by them. PCIT failed to specify the transaction on which initiation of penalty either under section 271D or 271E was warranted. And on the issues of validity of discloser in IDS, the ld PCIT has not specified that while making declaration the assessee made any misrepresentation of any facts. Once the IDS in all cases were accepted by ld. PCIT, the AO or the Range head no authority to relook or power to revoke or to examine its validity. We further find that the ld PCIT while directing the AO has not himself revoked the IDS nor directed to refund the payment of tax to the assessee. In the IDS the assessee has paid more tax to the revenue then the rate of normal tax, so there is no loss of revenue. At the cost of repetition, we note that the AO while passing the assessment order in all years have made inquiry and took reasonable, plausible and legally sustainable view. The Hon ble Delhi High Court in CIT Vs Kelvinator of India Ltd [ 2002 (4) TMI 37 - DELHI HIGH COURT] held that if the AO has adopted one of the course permissible in law, which resulted in loss of revenue or where two view is possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as erroneous order prejudicial to the interest of revenue unless view taken by the AO is not sustainable in law. At the cost of repetition, we may note that the ld PCIT neither in his show cause notice nor in ultimate / final order has held that the order passed by the AO is unsustainable in law. We are of the considered view that the ld PCIT was not justified in subjecting the assessment order for all three years to revision proceedings by taking view that the AO has not made further inquiry, therefore we quash the revision order (s) in all three assessment years.- Decided in favour of assessee.

  ---

• 2021 (10) TMI 1135
  TDS u/s 194B or 194BB - disallowance in respect of payment of stake money under section 40(a)(ia) - stake money and cups disbursed to horse owners without deducting TDS - HELD THAT:- As decided in own case [ 2020 (12) TMI 1280 - ITAT BANGALORE] CBDT Circulars are binding on the Department as it clarifies the understating of the provisions of the Act by the Revenue which cannot be disregarded by the income-tax authorities while construing the provisions of the Act. The ld. DR was not able to point out why the interpretation given in the CBDT Circular relied upon by the assessee should not prevail. We find that the Department has tried to indirectly tax what cannot be taxed by virtue of Circular issued by the CBDT, a situation which is impermissible in law. Thus, on this aspect also, we hold that stake money is not liable to TDS u/s 194B of the Act. - we also hold that stake money paid by assessee to the horse owners are not liable to TDS under section 194B or section 194 BB of the Act. Consequentially no disallowance could be made under section 40 (a) (ia) of the act in the hands of assessee. Nature of expenditure - Expenditure on modification of TV towers - claim un/s 37 - AR submitted that, during the year six TV towers were modified to fit the technology cameras which could be used during horse races and there is no enduring benefit in the hands of assessee and that, amount paid for purchase of technological camera are capitalised the books of account on which depreciation is claimed in accordance with section 32 - HELD THAT:- In present facts assessee incurred expenses on re-modification of TV towers which might, undergo further modification as and when the technologically upgraded camaras are brought in. It is submitted that the towers were remodified to fit in the new camaras purchased. Admittedly, the cameras purchased by assessee were capitalised on which depreciation is claimed. Thus in our view though expenditure do not have the character of enduring benefit, the advantage is not for indefinite future. Accordingly, respectfully applying the principles laid down in EMPIRE JUTE COMPANY LIMITED VERSUS COMMISSIONER OF INCOME-TAX [ 1980 (5) TMI 1 - SUPREME COURT] we hold the expenditure to be revenue in nature. We direct the Ld.AO to delete the disallowance made on expenses towards re-modification of TV towers. Nature of expenditure - expenditure incurred on constructing temporary stables, repairs to existing stables and gun greeting of such stables - HELD THAT:- We agree with the argument advanced by the Ld.Sr,DR that the structures are permanently made for outstation horses that come to Bangalore for races and therefore to be catagorised as capital asset. We also note that assessee incurred repair work towards existing stables. We direct the Ld.AO to allow the expenditure incurred is towards repair work as revenue expenditure. Expenditure incurred on upgrading of UPS system u/s 37 - HELD THAT:- We note that the server installed in the racecourse premises was originally supported by UPS of 8 KVA. Assessee upgraded it to16 KVA in the year 2012. The upgradation of UPS has brought into effect a new asset for advantage of assessee and therefore has to be treated as capital asset. However, assessee is eligible for depreciation. We direct the Ld.AO to grant depreciation to assessee on the UPS. Expenditure incurred towards maintenance of betting systems and other equipments and asphalting of roads - Revenue or capital expenditure - HELD THAT:- We note that both these expenditure are incurred by assessee for maintenance of existing asset. It cannot be ignored that, there would arise ware and tear of machines used and the road on which horse racing takes place. These needs to be maintained on regular basis for the purposes of business. We are therefore convinced with the view of Ld.CIT(A) that they are in the nature of revenue expenditure.

  ---

• 2021 (10) TMI 1125
  Undisclosed income - amounts have been advanced to Prakash Ladhani outside the books of account - assessee submitted that it has withdrawn money from United Bank of India and the same was deposited with Bank of India - As per AO the amount was given to Shri Prakash Ladhani and it would also fall under the category of deemed dividend within the meaning of section 2(22)(e) CIT-A deleted the addition - HELD THAT:- We notice that the transactions relating to imprest account, withdrawal from United Bank of India and deposit into Bank of India have been routed through the books of account. As submitted by assessee, the imprest account was fastened between cash withdrawal from United Bank of India and deposit into Bank of India in order to have control over these transactions. We notice that the imprest account is created as conduit between the bank transactions. We notice that the Ld. CIT(A) has examined the books of account which has also been confronted before the A.O. CIT(A) has also recorded a finding that all the transactions are duly recorded in the books of account. When all the transactions have been routed through the books of accounts, the question of undisclosed income will not arise. Hence we are of the view that the AO has made the impugned addition on surmises and conjectures only and accordingly, in the facts and circumstances of the case, we do not find any infirmity in the decision rendered by Ld. CIT(A) in deleting this addition in both the years.- Decided in favour of assessee.

  ---

• Customs

• 2021 (10) TMI 1134
  100% EOU - non-fulfilment of export obligation - requirement that the entire manufactured goods shall be exported or the unit should achieve positive net foreign exchange earnings as a percentage of export fixed by the authority prescribed as per N/N. 53/1997 Cus dated 03.06.1997 - HELD THAT:- The matter under consideration would certainly go beyond the inter-se dispute between the parties and would partake the character of general public importance as enunciated by Hon ble Apex Court in COMMISSIONER OF CUSTOMS, BANGALORE-1 VERSUS M/S MOTOROLA INDIA LTD. [ 2019 (9) TMI 229 - SUPREME COURT] . More particularly, inasmuch as the interpretation of the Notification No.53/1997, the subject matter of the appeal as to whether duty could be levied if the unit fails to achieve Net Foreign Exchange Earning as a Percentage (NFEP) and Export Performance (EP) as specified in Appendix-1 of the Export and Import Policy, within one year of importation or procurement of such goods or within such extended period not exceeding one year, vis- -vis Clause 6(1) and 6(4) of the Notification No.53/1997. The appeal under Section 130 of the Act before this Court would not be maintainable and the appellant/revenue has to pursue its grievance by filing an appeal under Section 130E of the Act before the Hon ble Apex Court - the appeal filed under Section 130 of the Act is held to be not maintainable. Appeal dismissed.

  ---

• 2021 (10) TMI 1133
  Seeking unconditional release of seized goods - Smuggling - Gold - Section 110(2) of Customs Act, 1962 - HELD THAT:- When the matter was taken up today, the learned counsel for the revenue has produced the original record before us and has pointed out that in pursuance of show cause notice dated 13.03.2014 issued to the appellant, adjudicating authority has passed an order originally on 28.02.2015 and as per the appellant on 13.03.2014. The appeal is disposed of with liberty to the appellant to challenge the order dated 28.2.2015 passed by the Adjudicating Authority by way of the appeal in accordance with law.

  ---

• Insolvency & Bankruptcy

• 2021 (10) TMI 1132
  Levy of fine on the corporate debtor - delay in making certain compliances in terms of Regulation 7(3) of SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015 - corporate debtor is undergoing CIRP during relevant time - moratorium is under effect - HELD THAT:- It is to be seen that the fine was levied for the delay in making certain compliances. In view of the fact that due to the failure of the Board of Directors of the corporate debtor in managing the company in a proper manner, the company went into the CIRP process. After the company was taken over by the applicant Resolution Professional, certain compliances have been made, may be belatedly and with regard to other compliances, the Resolution Professional explained the impediments being faced by him. In view of the moratorium declared in terms of Section 14 of the Code and also in view of the fact of making certain compliances subsequently and also in view of the fact that the Resolution Professional is facing certain reasonable impediments with regard to certain other compliances, the impugned order of National Stock Exchange of India Ltd. is unsustainable. Burdening the corporate debtor with imposition of fines further is against to the interest of the corporate debtor and also against to the object of the Code. The imposition of fine on the corporate debtor for delay in making the subject compliances is condoned - application allowed.

  ---

• FEMA

• 2021 (10) TMI 1131
  Pre-deposit requirement qua the petitioner - As petitioner submit that he in no way concerned with the affairs of the company after his resignation on 6-5-2006 much less with the agreement dated 21-6-2006. Further, even the earlier agreement was between the two companies to which the petitioner was not a signatory - HELD THAT:- As in our opinion, for the stand taken by the petitioner, we direct the Appellate Authority to exempt the requirement of pre-deposit as regards this petitioner (M. Umesh), in case he resorts to remedy of appeal in light of the liberty given in terms of this order. In other words, the Appellate Authority shall not insist for pre-deposit requirement qua the petitioner herein, i.e. M. Umesh. Besides, the appellate authority shall not non-suit the petitioner for having filed the appeal beyond limitation as the petitioner was pursuing remedy before the High Court in the first place and thereafter before this Court, after issuance of show cause notice.

  ---

• 2021 (10) TMI 1130
  Foreign contributions - Prior permission u/s 11 to receive foreign contributions in the form of life saving equipment/articles for COVID-19 insofar as to expedite the relief work in our country - exemption to registered associations, organisations or persons, defined under Section 2(1)(m) of the Foreign Contribution (Regulation) Act, 2010 to receive foreign contributions - HELD THAT:- As exemptions and relaxations under different Statutes are not a matter of right. It is the prerogative power of the Government to exempt or give relaxations with or without stringent conditions. It is not for the Court to direct the Government to exercise the power in a particular manner. It is evident from the pleadings and not denied by the Learned Counsel for the Petitioner during the course of hearing that before filing the present petition, Petitioner has not approached the Competent Authority seeking exemption under the Act. We therefore direct the Competent Authority under the concerned Ministry to treat the present petition as a representation and decide the issues raised and grievances ventilated by the Petitioner, in accordance with law, relevant rules, regulations and Government policies applicable to the facts of the case, as early as practicable, keeping in mind the nature of relief sought.

  ---

• 2021 (10) TMI 1129
  Search and seizure operation carried out by the officers of FEMA - search and specific seizure of certain gold jewellery which, according to him, was part of the stock-in-trade - Jurisdiction of High court - HELD THAT:- As cause of action has arisen within the State of West Bengal, that is, the search and seizure has taken place in West Bengal and the petitioner company is situated at West Bengal, in my view, there is no impediment in entertaining this writ petition before this High Court. Clause (2) of Article 226 of the Constitution of India clearly allows this High Court to have jurisdiction in such cases wherein the cause of action has partly arisen notwithstanding the fact that the seat of the authority dealing with the issue is outside the jurisdiction. Search and seizure of the excess jewellery that has been seized by the Enforcement Directorate - As it is to be noted that in the writ petition, the petitioner has relied on several documents to indicate that this excess jewellery was duly accounted for and had been sent for job work. In my view, the Enforcement Directorate should look into the documents filed in the writ petition and pass a reasoned order on whether these goods are stock-in-trade or not. Enforcement Directorate finds that the same are duly accounted for, the same should be released in favour of the petitioner in accordance with law. The above enquiry and the reasoned order should be passed within a period of eight weeks from date.The authorities are also directed to allow the authorized representative of the petitioner-company to have a lawyer of his choice to be present during the summons at an inaudible distance as per the guidelines laid down by the Supreme Court.

  ---

• PMLA

• 2021 (10) TMI 1128
  Money Laundering - seeking grant of Anticipatory bail - criminal conspiracy - cheating and defrauding - siphoning off the commission received from the suppliers through a complex web of fake commercial transactions through multiple companies owned by the accused persons, registered outside India - fraudulent transactions - requirement of custodial interrogation of the petitioner - HELD THAT:- In the present case, it is not disputed by the respondent that the petitioner has not joined the investigation. Rather, it is on record that the petitioner has joined the investigation more than 20 times. The statements of the witnesses U/s 50 of PMLA have already been recorded and there is only an apprehension that the petitioner would tamper with the evidence or threaten the witnesses but till date nothing has been placed on record to show that any such attempt has been made by the petitioner in this regard and there appears to be only an apprehension in this regard. All the documents have been seized by the respondent and have been filed alongwith the charge sheet in the court of Special Judge. Apprehension of arrest - HELD THAT:- The father of the petitioner had already been arrested who was lateron granted regular bail by the Special Judge and as far as the petitioner is concerned, he has been called time and again by the respondent (ED) and when he moved his anticipatory bail application before the Ld. Special Judge, it was opposed tooth and nail by the respondent, so it cannot be said that the apprehension in the mind of the petitioner in regard to his arrest is a mere fear or it is a vague apprehension. There is nothing to show that as to for what purpose, the custodial interrogation of the petitioner is required and the alleged offence entail maximum sentence of 7 years with fine - petitioner is allowed to be released on bail subject to condition imposed - bail application allowed.

  ---

• Service Tax

• 2021 (10) TMI 1127
  CENVAT Credit - duty paying documents - denial of credit on the strength of invoices issued by its Head Office as ISD on the ground that the said input service credit was availed on the basis of photocopy of the certificate issued by the Banks in favour of Head Office (ISD) - suppression of facts or not - invocation of extended period of limitation - HELD THAT:- There is no dispute about the receipt of services inasmuch as the appellant has duly received the services from Bank and that payment of the Banking charges for loan processing and upfront fee have been duly made since not disputed in the impugned orders. It is also seen that the order passed by the authorities below have travelled beyond the allegations made in the SCN. When no dispute was made by the adjudicating authority with regard to the photocopies of documents, the objection raised by the Ld. Commissioner (Appeals) is not justified when, in-principle, he has agreed with the service eligibility under Rule 2(l) of the Credit Rules and the fact that receipt of Banking service is not in dispute. Hence, there are no reason to deny the credit and hence, the appeal is liable to succeed. Time Limitation - HELD THAT:- SCN has been issued in June 2014 by invoking extended period of limitation. Apart from the general aversion, there is no evidence to show that credit has been wrongly availed by way of fraud or suppression when the credit amount availed by the appellant has been duly disclosed in the periodical returns filed with the Department. Appeal allowed - decided in favor of appellant.

  ---

• CST, VAT & Sales Tax

• 2021 (10) TMI 1126
  Maintainability of petition - availability of alternative remedy of appeal - Revisional/re-assessment orders - escapement of turnover - wrong availment of Input Tax Credit - reasonable opportunity to show cause provided or not - HELD THAT:- This Court is clear in its mind that personal hearing is not statutorily imperative for a legal drill i.e., assessment of escaped turnover/wrong availment of Input Tax Credit (ITC). This is owing to the language in which common proviso to sub-sections (1) and (2) of Section 27 of TNVAT Act is couched. The expression a reasonable opportunity to show cause against such order occurring in the proviso has been explained by this Court in a detailed and elaborate order in STATE BANK OF INDIA OFFICER S ASSOCIATION (CC) SBIOA VERSUS THE ASSISTANT COMMISSIONER (ST) [ 2019 (9) TMI 698 - MADRAS HIGH COURT] . This Court is informed that this order has not been reported in any law journal. Therefore, this Court deems it appropriate to give case number and date of order for the benefit of all concerned. In the present case, there is no disputation or disagreement that the writ petitioner has been given an opportunity of personal hearing vide communication dated 11.02.2021, but the writ petitioner did not respond/avail the same. Therefore, the only grievance of the writ petitioner is, mismatch ought to have been examined by the Assessing Officer though the writ petitioner has not responded. However, learned Revenue counsel points out that it would have been examined if the dealer/writ petitioner had responded - There is no disputation or disagreement before this Court that alternate remedy against impugned orders is available to writ petitioner-dealer by way of statutory appeal under Section 51 of TNVAT Act. The campaign against impugned orders in writ jurisdiction in the captioned main writ petitions fail. However, it is made clear that it is open to the writ petitioner to avail alternate remedy under Section 51 of TNVAT Act, if the writ petitioner chooses to do so, subject to limitation and pre-deposit conditions set out therein, i.e., if the writ petitioner satisfies these conditions and takes alternate remedy route i.e., statutory appeal, the Appellate Authority shall deal with the appeals on its own merits and in accordance with law, uninfluenced by any of the observations made in this order. The sequitur that follows from the narrative discussion and dispositive reasoning set out thus far is captioned writ petitions fail and the same deserve to be dismissed albeit preserving the rights of the writ petitioner to pursue alternate remedy subject to pre-deposit and limitation conditions - Petition dismissed.

  ---