TMI Tax Updates - e-Newsletter
October 29, 2022

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Law of Competition Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. Can consistent ill health be a valid reason for the non-filing of the GST Revocation Application? Can High Court Condone the delay in such cases?

   By: Abhishek Raja

2. Pr.CIT , V Kolkata Vs. SWATI BAJAJ – VERY RELEVANT AND VITAL SURVEILLANCE MEASURES OF STOCK EXCHANGES AND SEBI NOT BROUGHT TO NOTICE OF HIGH COURT LEADING TO WRONG CONCLUSION OF PRICE RIGGING AND MANIPULATION BY INVESTORS.

   By: DEVKUMAR KOTHARI

3. E-WAY BILL – SOME ISSUES

   By: DR.MARIAPPAN GOVINDARAJAN

4. Recovery under GST without issuance of SCN is not permissible

   By: Bimal jain

News

1. “India will become a global economic power with collective efforts”: Union Minister Shri. Piyush Goyal

2. IEPFA organises an Investor Education, Awareness and Protection Conference in Srinagar, Jammu & Kashmir

Notifications

GST - States

1. CCT/26-2/2022-23/78/2182 - dated 21-10-2022 - Goa SGST

Seeks to extend the due date for furnishing the return in FORM GSTR-3B for the month of September, 2022 till the 21st day of October, 2022

2. 12/2022 – State Tax - dated 30-9-2022 - Jharkhand SGST

Amendment in Notification S.O. No. 3– State Tax, dated the 3rd January, 2018

3. 11/2022 – State Tax - dated 30-9-2022 - Jharkhand SGST

Amendment in Notification No. 21/2019-State Tax, dated the 28th June, 2019

4. 9/2022-PP2/GST-15/20/2022 - dated 21-10-2022 - Tamil Nadu SGST

Extends the due date for furnishing the return in FORM GSTR-3B for the month of September, 2022 till the 21st day of October, 2022

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/DDHS/P/CIR/2022/00144 - dated 28-10-2022

Reduction in denomination for debt securities and non-convertible redeemable preference shares

2. SEBI/HO/IMD/DOF2/P/CIR/2022/145 - dated 28-10-2022

Addendum to SEBI Circular on Development of Passive Funds

Highlights / Catch Notes

GST

• Court Rejects Petitioner's Bid Against Registration Cancellation Due to Lack of Response to Show Cause Notice.

  Case-Laws - HC : Cancellation of registration of petitioner - The petitioner should furnish a proper reply to the show cause notice dated 18.08.2022 making out a case as to why action cannot be taken against him. As the petitioner has approached this Court without furnishing any reply to the show cause notice, this is not a fit case for interference. - HC
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• Court Confirms Online Filing Date as Official for CGST Refunds u/s 54 and Rule 89, Overriding Circular Limits.

  Case-Laws - HC : Seeking direction to re-credit amount - period of limitation for refund - Gap between online application and physical application - It has to be held that the date of filing of the application by the petitioner on common portal would be liable to be treated as date of filing claim for refund to the satisfaction of requirement of Section 54 of the CGST Act and Rule 89 of the CGST Rules. The procedure evolved in Circular dated 15.11.2017 cannot operate as delimiting condition on the applicability of statutory provision - HC
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• Tax Evasion Alert: Duplicate Invoices Detected; Penalties Possible Under CGST Act Section 129 and Chapter 15 Procedures.

  Case-Laws - HC : Release of detained goods - petitioner (revenue) had received intelligence that the goods are being transported twice over on the same set of invoices - If the assessee does not avail the benefit as accrue from Section 129, the department is clearly free to take recourse under Chapter 15 read with Section 122 of the CGST Act to take steps for determining the tax due liability and the penalty. - HC
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• Court Rules E-way Bill Delay Doesn't Justify Tax and Penalty u/s 129, Use Sections 73 or 74 Instead.

  Case-Laws - HC : Seeking release of detained goods - delayed generation of E-way bill - the department has proceeded to determine the tax liability as well as penalty only u/s 129, which is not contemplated or intended. On a plain reading of Section 129, there is no provision u/s 129 for determination of tax due, which can be done only by taking recourse to the provisions of Section 73 or 74 of the CGST Act, as the case may be. - HC
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• High Court Orders Review After Delay in Decision on Revocation of Registration Cancellation Application.

  Case-Laws - HC : Revocation of order of cancellation of registration - The application of the petitioner for revocation of the order of cancellation of registration was rejected by the respondents by a non speaking order dated 07.10.2021. Under the circumstances the petitioner again moved an application for revocation of cancellation of registration on 29.10.2021 and thereupon a show cause notice dated 10.11.2021 has been issued which has been replied by the petitioner vide reply dated 17.11.2021 and yet the respondents are not taking any decision - Matter restored back with directions - HC
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Income Tax

• Court Upholds Consistent Application of Transfer Pricing and AMP Expense Rules for 2009-10 and 2011-12 Assessments.

  Case-Laws - HC : TP Adjustment - The law on the issue of AMP is well settled by the aforesaid judgements of this Court and the same has been consistently applied by the appellate authorities below and the predecessor benches of this Court to the facts of the Assessee in AY 2009-10 and AY 2011-12. Therefore, we are unable to agree with learned senior standing counsel for the Revenue that there is any change in law which would merit reconsideration of said issues of AMP in the present proceedings. - HC
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• Assessee Entitled to Depreciation on Goodwill, Patents, Trademarks u/s 32(1)(ii), Confirms Appellate Authorities.

  Case-Laws - HC : Depreciation on goodwill and depreciation of patents and trademark - The ownership of the IP rights of the Assessee stands proved on record, its use by the Assessee is also not disputed and therefore the appellate authorities have rightly held that the Assessee is entitled to claim deprecation u/s 32(1)(ii) of the Act on the said IP rights. - HC
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• Section 127 Transfer Violates Natural Justice: No Hearing Opportunity Given to Assessee in Income Tax Case.

  Case-Laws - HC : Transfer of case u/s 127 - the assessee did not file any reply against the proposed centralisation under section 127 of the Act. It also became undisputed that the petitioner has not been given any opportunity of hearing. Drawing of conclusion by the authorities that the assessee had no objection on such proposed transfer, not only violated the basic principle of natural justice which are incorporated in section 127 itself - HC
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• Re-examine TDS u/s 195 for company payments to parent firm; consider cost-sharing, Deloitte certificate, and DTAA.

  Case-Laws - AT : TDS u/s 195 - payment made to its parent company - Although, the assessee strongly relied upon the certificate issued by the Deloitte GmbH and contended that the payment made to the non-resident is only cost incurred by the parent company without any mark-up, which was not supported by any evidence. Therefore, we are of the considered opinion that the issue needs to be re-examined in light of various averments including cost sharing agreement, certificate issued by the Deloitte GmbH and the provisions of section 9(1)(vii) of the Act read with DTAA between India and Germany. - AT
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• PCIT's Conditions on Section 80G Registration Deemed Unlawful; Lacks Authority to Impose Conditions as per Clause I.

  Case-Laws - AT : Registration u/s 80G - Conditions imposed by CIT - Had the assessee moved to the PCIT under clause II & III of proviso 2 to section 80G then he would have been empowered to impose the condition. When in the instant case assessee has come up under clause I of sub section v of section 80G, no such condition can be imposed by the Ld. PCIT. So we are of the considered view that impugned order passed by the Ld. PCIT is not sustainable to the extent of imposing conditions in para 10(a) to (j) of the impugned order, in the eyes of law. - AT
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• Trust's Free Medicine Expenses Questioned; Use of Undisclosed Evidence Breaches Natural Justice Principles, Says AO.

  Case-Laws - AT : Assessment of trust - addition as made by the AO by doubting the genuineness of the expenditure incurred on free distribution of medicines to patients and other social organizations - The statements/material cannot be used on the back of the assessee and if done so it is against the principles of natural justice - AT
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• Reopening of Assessment u/s 147 Invalid Due to Routine Approval by Authorities, Says Court.

  Case-Laws - AT : Reopening of assessment u/s 147 - Necessity to take valid approval before reopening - Since, the authorities below has granted approval for reopening of the assessment in a routine and casual manner, based on such approval, reopening of assessment by the A.O. is not at all sustained in the eye of law - AT
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• Assessee's Rental Deposit Write-Off Allowed as Revenue Expense u/s 37(1) Due to Lease Issues with Sipcot.

  Case-Laws - AT : Rental deposits written off - allowable revenue expenses u/s 37(1) - The assessee could not occupy the property since the required permission was not taken by the owner of the land from Sipcot and lease could not be finalized. The assessee has filed recovery proceedings by filing a suit before the Hon’ble Madras High Court but that is pending. In the mean time, the assessee had made this claim of rental deposits as write off and claimed as allowable expenditure u/s.37(1). - Claim allowed - AT
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• Pr.CIT Ignored Assessee's Responses, Failed to Explain Disagreement, and Returned Case Without Independent Inquiry.

  Case-Laws - AT : Revision u/s 263 by CIT - Pr.CIT has ignored the replies of the assessee and he has not discussed as to why he does not agree with the contentions of the assessee. The Ld. Pr.CIT has merely remitted the matter back to the Assessing Officer without making any inquiry himself. It is apparent that no independent inquiries have been made by the Ld. Pr.CIT although it was incumbent upon him to make such inquiry so as to reach the conclusion that the order of the Assessing Officer was erroneous and prejudicial to the interest of the revenue. - AT
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• Section 263 Revision: Interest Disallowance Not Erroneous if Aligned with Jurisdictional High Court Decision u/s 36(1)(iii).

  Case-Laws - AT : Revision u/s 263 - interest disallowance u/s 36(1)(iii) - When the case of the assessee is covered by the binding decision of the jurisdictional High Court, then there is no scope for holding the assessment order to be erroneous and prejudicial to the interest of revenue. - AT
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Customs

• Court Rules Lowest Price Prevails for Duty Assessment on Contemporaneous Goods; Price Increase Unjustified.

  Case-Laws - AT : Demand of differential duty - while applying the price of contemporaneous goods, when more than one price are available then the lowest of the prices should be taken for the assessment. Therefore for this reason the price could not have been enhanced in respect of the goods in question. - AT
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• Refund of Special Additional Duty Granted: Lack of Proof on Original Invoice Endorsement and Buyer Credit Use.

  Case-Laws - AT : Refund of SAD - Stamp of endorsement - Even though it is alleged by the department that two sales invoices did not bear the required endorsement, it is not established whether these invoices verified by Review Cell are the original invoices issued to the buyer by the appellant. So also there is no evidence to establish that the buyer had availed credit on these alleged invoices. There are no merits in the grounds alleged for remand of the matter. - Refund cannot be denied - AT
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• Penalty Imposed u/s 112(b) Overturned; Container Removal Deemed Theft Under IPC; Police Complaint Filed.

  Case-Laws - AT : Levy of penalty - the subject container was very much in the custody of the SIIB Officers since no Bill-of-Entry was ever filed and hence, the alleged removal from the CFS could only attract act of ‘theft’ under the Indian Penal Code, for which a separate police complaint was lodged - Fastening the penalty under Section 112(b) ibid against this appellant is only a fallacy, which cannot be sustained - AT
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Corporate Law

• Shareholders can pursue fraud claims u/s 447, but must first follow Section 213 procedures.

  Case-Laws - HC : Fraud - Whether a shareholder, minority or otherwise, can initiate proceedings - for a shareholder to avail a remedy under Section 447 of the Act such shareholder essentially needs to go through the procedure under Section 213 of the Act and in the event of a report being submitted by the Inspector to the Tribunal of there being a fraud either the Shareholder or the Tribunal could refer the report to the SFIO who can then follow the procedure provided under Section 212 of the Act and initiate criminal proceedings against the offenders for an offence under Section 447 of the Act. - HC
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Indian Laws

• Google Found Dominant in India, Ordered to Stop Anti-Competitive Practices u/s 27, Must Comply in 3 Months.

  Case-Laws - Commission : Anti-competitive agreements - Dominant position of Google in India - In terms of the provisions of Section 27 of the Act, the Commission hereby directs Google to cease and desist from indulging in anti-competitive practices that have been found to be in contravention of the provisions of Section 4 of the Act - Google, however, is allowed three months from the date of receipt of this order to implement necessary changes in its practices and/or modify the applicable agreements/ policies and to submit a compliance report to the Commission in this regard. - Commission
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Service Tax

• Service Tax Recovery on Works Contracts Must Follow Acts, Rules, and Circulars, Not Just Official Endorsements or Orders.

  Case-Laws - HC : Recovery of Service tax - works contract - It is well settled principle of law that any endorsements or orders made by the officials/Departmental Heads cannot override the provisions of the Act/Rules/Circulars. - HC
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Case Laws:

• GST

• 2022 (10) TMI 1001
  Cancellation of registration of petitioner - whether no reason has been provided in the show cause notice as to why the proceeding for cancellation of registration under the CGST Act is sought to be initiated against the petitioner? - section 129 of CGST Act - violation of principles of natural justice - HELD THAT:- The show cause notice suspending the GST registration of the petitioner w.e.f. 18.08.2022 is due to the proceedings initiated against the petitioner under the GST Act for violation of the provisions in issuing invoice or bill without supply of goods wrongful availment of the benefits under the Act. The petitioner should furnish a proper reply to the show cause notice dated 18.08.2022 making out a case as to why action cannot be taken against him. As the petitioner has approached this Court without furnishing any reply to the show cause notice, this is not a fit case for interference. Petition disposed off.

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• 2022 (10) TMI 1000
  Seeking direction to re-credit amount in electronic credit ledger - period of limitation for refund - Gap between online application and physical application - time limitation in terms of Explanation (2) (c) (1) of Section 54 of the Central Goods Services Tax Act, 2017 HELD THAT:- Sub-section (1) of Section 54 of the CGST ACt provides that any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. Prior to the insertion of Explanation (2) (ba) by the Finance Act, 2022, the relevant date in the case of goods exported out of India by land, the date on which such goods pass the frontier. In the case of services exported out of India, the date of receipt of payment in convertible foreign exchange or in Indian rupees or issue of invoices, where payment of the services had been received in advance prior to the date of issue of the invoice, is treated as relevant date. The total case of the respondents is thus that since the physical submission of the application along with documents was on 17.10.2019, it was beyond the period of two years and therefore time barred, counted from the relevant date. It is not in dispute that the petitioners filed their refund application in the common portal on 28.12.2018 and ARN was generated. Until the application with documents were physically submitted on 17.10.2019, the respondents did not do anything on the application, which was filed as per the mechanism adopted by the respondents, on 28.12.2018. It is not in dispute that the refund claim of the petitioner otherwise satisfied all requirements of Section 54 of the CGST Act and the attendant Rules and the petitioner was eligible to seek refund. The refund claim was however considered as time barred stating that the application was liable to be treated to have been filed on 17.10.2019 and not on 28.12.2018. It has to be held that the date of filing of the application by the petitioner on common portal would be liable to be treated as date of filing claim for refund to the satisfaction of requirement of Section 54 of the CGST Act and Rule 89 of the CGST Rules. The procedure evolved in Circular dated 15.11.2017 cannot operate as delimiting condition on the applicability of statutory provisions - the respondents are directed to re-credit the amount of Rs.3,37,076/- in the electronic credit ledger of the petitioner with interest at the rate of 9% p.a. from the date of order of rejection of the claim, i.e., 19.11.2019 till realisation - petition allowed.

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• 2022 (10) TMI 999
  Release of detained goods - Petitioner / Revenue had received intelligence that the goods are being transported twice over on the same set of invoices - Section 129 (3) of the CGST Act - HELD THAT:- The plain reading of the provisions of CGST Act makes it clear that the provisions as contained in Chapter 19 including Section 129 are the provisions for release of goods intercepted during transportation on the ground as engrafted therein and provides an opportunity to the assessee to take the benefit and to come forward for release of the goods on payment of the amounts as indicated in Section 129 (1)(a)(b) and (c) as the case may be. The quantum of penalty which is to be paid under Section 129 (1)(a)(b) and (c) is to be determined under Section 129(3) of the CGST Act. The said power is purely an alternate mode given to the assessees to come forward and to avoid any future litigation and to offer and pay the amount. If the assessee does not avail the benefit as accrue from Section 129, the department is clearly free to take recourse under Chapter 15 read with Section 122 of the CGST Act to take steps for determining the tax due liability and the penalty. In the present case, as the respondent has not approached for availing the benefit that flow from Section 129, coupled with the fact that the appellate authority found that the basis for initiating proceedings were non-existent, there are no reason to interfere with the order passed by the appellate authority, in exercise of powers under Section 226 of the Constitution of India - petition dismissed.

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• 2022 (10) TMI 998
  Validity of demand u/s 129 - Seeking release of detained goods - delayed generation of E-way bill - case of the petitioner s company is that although the Part- B of the e-way bill was not generated, the same was attributable to the transporter, however, before the goods were actually seized, the e-way bill was generated at about 7.34 am in the morning on the next date i.e. 25.09.2018 - HELD THAT:- In the present case, the department has proceeded to determine the tax liability as well as penalty only under the provisions of Section 129 of the Act, which is not contemplated or intended. On a plain reading of Section 129, there is no provision under section 129 for determination of tax due, which can be done only by taking recourse to the provisions of Section 73 or 74 of the CGST Act, as the case may be. As the proceedings have been initiated and concluded only under section 129 and the owner of the goods has not come forward for payment of such penalty as has been determined, the entire action of determining the tax and penalty under section 129(1) as has been done by means of the impugned order and upheld in the appellate proceedings, impugned before this Court, there are no hesitation in holding that the order passed on 17.10.2018 and as upheld by the order dated 31.10.2020 are not legally substitutable and are accordingly set aside. The amount paid by the petitioner for release of the goods shall be refunded to the petitioner with all expedition preferably within a period of two months from today - the writ petition is allowed.

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• 2022 (10) TMI 997
  Direction to conclude the proceedings under section 129 after having initiated the proceedings under the provision of section 129 of the CGST Act - detention/ seizure/adjudication of penalty for the goods in transit - HELD THAT:- By way of interim relief, it is directed that the respondent shall release the goods and the conveyance of the petitioner confiscated and detained pursuant to the order dated 24.09.2022 passed in Form No. GST MOV-11 subject to the following conditions: (i) The petitioner deposits the amount of penalty on the goods of Rs. 4,14,850/-; (ii) The petitioner deposits the amount of fine in lieu of confiscation of the conveyance, amounting to Rs. 4,14,850/-. Thus, the petitioner, in all, shall deposit Rs. 8,29,700/-; (iii) The petitioner furnishes the bond to the tune of Rs. 23,04,724/-. Upon compliance of the above conditions by the petitioner, the goods and the conveyance of the petitioner be released by the respondent-authority. The order of the interim relief shall remain part of the main matter - Civil Application is allowed and disposed of.

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• 2022 (10) TMI 996
  Demand of interest under Section 50 of the Central Goods and Services Tax Act, 2017 - Period between July, 2017 and October, 2019 - HELD THAT:- It is appropriate that the petitioner file a reply to notice dated 04.02.2020, setting out the proper interest payable, according to it. Let the amount be re-determined by the authority in light of the decision of this Court in the case of M/S. MAANSAROVAR MOTORS PRIVATE LIMITED VERSUS THE ASSISTANT COMMISSIONER, THE SUPERINTENDENT OF GST CENTRAL EXCISE, THE BRANCH MANAGER [ 2020 (11) TMI 107 - MADRAS HIGH COURT] , within a period of four (4) weeks from today, after hearing the petitioner - it was held in the said case that Learned counsel for the petitioner states that the interest liability relating to belated payment of tax both by cash and reversal of ITC has been coercively recovered - With the insertion of the proviso to be taken to be retrospective, these writ petitions are allowed. In light of the alleged demand for interest, the respondent has attached the bank account of the petitioner in Axis Bank Limited, Anna Salai, Chennai in Form GST DRC-13. The attachment shall continue till such time re-computation is effected, as stipulated supra, and subject to the same - petition disposed off.

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• 2022 (10) TMI 995
  Provisional attachment of current account of the petitioner - time limitation - Section 83 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- The attachment as per Section 83(2) shall cease to have effect after a period of one year from date of order of attachment. Thus, pending writ petition, the impugned order has ceased to have effect, as on 15.09.2020. With this, this writ petition has been rendered infructuous. There is no further embargo on the operation of the bank account and on the petitioner resuming operations in that regard - Petition disposed off.

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• 2022 (10) TMI 994
  Validity of distinction between registered borrower and unregistered borrower - distinction in respect of GST liability or not - It was submitted that the petitioner is penalised for the reason that the borrower may be unregistered person - HELD THAT:- Notice returnable on 16.11.2022. In order to avoid irreversible situation, in the event the petitioner succeeds in the petition, interim relief deserves to be granted. By way of ad interim relief, it is directed that the competent authority of the respondent shall not take any further steps pursuant to the impugned show-cause notice.

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• 2022 (10) TMI 993
  Principles of natural justice - whether petitioner has not submitted any reply to the charges levelled in the impugned show cause notice? - reverse charge mechanism - HELD THAT:- The petitioner had responded to the show cause notice and the same should have been considered and dealt with in the impugned order dated 6th July 2021. Respondent No.2 not having done that, impugned order requires to be quashed and set aside, which we hereby do. The matter is remanded for denovo consideration. Before passing any order, which shall be within eight weeks from today, petitioner shall be given a personal hearing, notice whereof shall be given atleast seven working days in advance. If petitioner wish to file any written submissions, petitioner may do so within three working days of the personal hearing. It is also noted that this is one more case where respondents have passed such order without applying its mind and without considering the records. Petition disposed off.

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• 2022 (10) TMI 992
  Revocation of order of cancellation of registration of the petitioner - Rule 22(1) of the CGST Rules 2017 - HELD THAT:- The facts of the case as already noted in the order dated 04.07.2022, clearly reflects that a show cause notice for cancellation of registration under Rule 22(1) of the CGST Rules 2017 was issued by the respondent to the petitioner and the order cancelling the registration was passed on 13.03.2020. Thereafter another show cause notice dated 22.09.2021 for cancellation of registration was issued by the respondent no.4 and second order of cancellation was passed on 22.09.2021. The application of the petitioner for revocation of the order of cancellation of registration was rejected by the respondents by a non speaking order dated 07.10.2021. Under the circumstances the petitioner again moved an application for revocation of cancellation of registration on 29.10.2021 and thereupon a show cause notice dated 10.11.2021 has been issued which has been replied by the petitioner vide reply dated 17.11.2021 and yet the respondents are not taking any decision. This writ petition is disposed of with the direction to the concerned respondent to decide the pending applications of the petitioner for revocation of order cancelling the registration, in accordance with law, by a reasoned and speaking order, expeditiously, preferably within four weeks from the date of presentation of a certified copy of this order, after affording reasonable opportunity of hearing to the petitioner.

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• 2022 (10) TMI 991
  Levy of GST - work pertains to hiring of services for Artificial Intelligence Machine Learning based reservoir modeling, both static and dynamic - petitioner alleges that the tender notice fails to specify a uniform GST rate applicable to all bidders for the services - HELD THAT:- On balancing the equities, this Court is of the opinion that interest of justice as well as public interest would be served if an interim order is passed at this stage. Accordingly, it is provided that no further action be taken by the respondent nos. 1 2 OIL in furtherance to the LOI dated 01.07.2022 and the respondent no. 3 is accordingly directed not to further advance with the work which is the subject matter of this writ petition till the returnable date. Since, the work is of public interest, an endeavor would be made to dispose of the writ petition on the returnable date, on which date, the learned counsel representing the OIL is directed to produce the records - List this case after 4(four) weeks.

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• Income Tax

• 2022 (10) TMI 990
  Reopening of assessment u/s 147 - Claim for compensation paid/provided to the profit and loss account (P L Account) - ITAT confirmed the order of the CIT(A) holding that since there was no fresh tangible material in the possession of the Assessing Officer on the basis of which a belief could be formed for escapement of income, the re-opening notice was bad in law - HELD THAT:- As observed by the ITAT that since the impugned issue was examined by the A.O., in view of the query asked by him, which was properly replied with proper details after which the original assessment order under Section 143(3) came to be passed accepting the impugned claim, the AO did not have the shield of Explanation-1 to Section 147 to justify the re-opening which was done without there being any fresh tangible material in the possession of the Assessing Officer. The above findings of fact have not been controverted by the Revenue. As recorded in the Tribunal order that the Assessing Officer before recording the reasons for reopening has made reference to the same documents/material which were also on the record of the Assessing Officer in the original assessment proceedings under Section 143(3). We, therefore, observe that there does not appear to be any fresh tangible material that has come into the possession of the Assessing Officer before recording the reasons for re-opening the assessment. Even in the recorded reasons, the Assessing Officer clearly states that his observations are based on a perusal of records but no fresh or new tangible material has been referred to or brought on record. The re-opening is within a period of four years from the end of the relevant assessment year. Therefore, it is important that the officer reopening a assessment has reason to believe based on tangible material that income has escaped assessment. What we observe from the aforesaid facts is that the dis-allowance of the claim of Rs. 6,50,00,000/- on account of compensation is based on record that was already with the AO at the time of the proceedings under Section 143 (3) of the Act. There is no new or fresh tangible material that has been brought on record. This appears to be an attempt to view the same material from a different angle of perception. It is nothing but a case of change of opinion, which cannot be permitted. We also agree with the Tribunal that since the impugned issue was examined by the A.O. on a query raised by him and which was replied to with details during the original scrutiny proceedings, Explanation 1 to Section 147 would not be applicable in the facts of the case. - Decided in favour of assessee.

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• 2022 (10) TMI 989
  TP Adjustment - provisions of services of market development (services of carrying out advertisement, market business promotion i.e. AMP) - international transactions or not? - TPO computed the adjustment by applying the Bright Line method - HELD THAT:- A perusal of the impugned order shows that the ITAT in its impugned order concluded that the factual matrix has remained consistent in AY 2009-10 [ 2017 (2) TMI 650 - ITAT DELHI] AND AY 2010-11[ 2017 (10) TMI 998 - ITAT DELHI] and, therefore, relied upon the findings recorded for AY 2009-10 to hold that the expenses incurred on AMP does not constitute an international transaction between the Assessee and its AE. The law on the issue of AMP is well settled by the aforesaid judgements of this Court and the same has been consistently applied by the appellate authorities below and the predecessor benches of this Court to the facts of the Assessee in AY 2009-10 and AY 2011-12. Therefore, we are unable to agree with learned senior standing counsel for the Revenue that there is any change in law which would merit reconsideration of said issues of AMP in the present proceedings. We, therefore, hold that the ITAT has properly and correctly assessed the fact and law while concluding that services of AMP are not international transactions in light of the provisions of sub-clause (d) of clause (i) of Explanation to Section 92B.

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• 2022 (10) TMI 988
  Depreciation on goodwill and depreciation of patents and trademark - HELD THAT:- There is no infirmity in the finding returned by the appellate authorities that the business rights acquired by the Assessee under its agreement with UIL for valuable consideration constitutes an intangible asset within the meaning of Section 32(1)(ii) - Revenue has not disputed the exclusive nature of rights, payment of consideration and the same being of an enduring nature, since it span for 20 years. In these facts, the capitalisation of the said business rights as an intangible asset has been correctly upheld by the appellate authorities. Therefore, the Assessee was entitled to claim depreciation. Similarly, with respect to the acquisition of IP rights from SAL, Revenue does not dispute the nature of the rights acquired and the limited contention raised is with respect to confirmation of the payment of consideration recorded in the agreement. The said contention raised by Revenue is firstly a question of fact, which objection is not borne out from the record and secondly, Assessee has stated that the said agreement was executed under the aegis of BIFR, since SAL was a sick company and there was no doubt raised by Revenue with respect to the payment of consideration. The ownership of the IP rights of the Assessee stands proved on record, its use by the Assessee is also not disputed and therefore the appellate authorities have rightly held that the Assessee is entitled to claim deprecation u/s 32(1)(ii) of the Act on the said IP rights. The facts as well as the law were properly and correctly assessed by the CIT(A) and the ITAT. We, therefore, answer the question of law framed in these appeals against the Revenue and in favour of the Assessee.

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• 2022 (10) TMI 987
  Penalty u/s 271(1)(c) - Defective notice u/s 274 - As argued non striking off the inaccurate particular of income portion in the notice under section 274 - HELD THAT:- On facts it is found that the assessee s aim to offer interest income on income tax refund was an inadvertent and bona fide error and no contumacious conduct has been established by the assessing officer. The revenue filed appeal before the Tribunal. The Tribunal after considering the correctness of the order passed by the CIT also found that notice issued by the assessing officer under Section 271(1)(c) of the Act was defective, inasmuch as the irrelevant portion of the notice has not been struck off. Therefore, the assessee did not have adequate opportunity to put forward their submission in response to the penalty notice. The learned Senior Counsel had referred to the decision of this Court in the case of Principal CIT, Central - 2 Kolkata Vs. Brijendra Kumar Poddar [ 2021 (12) TMI 24 - CALCUTTA HIGH COURT ] where the Court took into consideration the decision in the case of CIT Vs. MANJUNATHA COTTON GINNING FACTORY [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT ] and dismissed the appeal filed by the revenue. Thus we find that the correct legal position has not been noted by the CIT but the learned Tribunal as well. No substantial question arising for consideration in this appeal.

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• 2022 (10) TMI 986
  Transfer of case u/s 127 - transfer of the case from the present jurisdiction at Rajkot to DCIT/ACIT, Central Circle, Varanasi - HELD THAT:- Section 127 of the Act expressly provides for affording opportunity of hearing to the concerned assessee when the powers to transfer the assessment is to be exercised by the competent authority under the said provision. When the petitioner is deprived of such opportunity, there is a statutory infraction in addition to the violation of natural justice operating to the prejudice of the petitioner as his case was not considered by the authority. In the impugned order also it is stated that the assessee did not file any reply against the proposed centralisation under section 127 of the Act. It also became undisputed that the petitioner has not been given any opportunity of hearing. Drawing of conclusion by the authorities that the assessee had no objection on such proposed transfer, not only violated the basic principle of natural justice which are incorporated in section 127 itself, under which the powers are exercised, but it also acted arbitrarily assuming that the petitioner had no objection to the proposed transfer. This petition is allowed to the extent by remitting back the case to the competent authority of the respondents. The competent authority shall decide on the issue of transfer of assessment of the petitioner from Rajkot to DCIT/ACIT, Central Circle, Varanasi afresh by giving opportunity of being heard to the petitioner after considering the objections raised by the petitioner The exercise shall be completed and necessary orders shall be passed in accordance with law within a period of four weeks from the date of receipt of copy this order. In order that the competent authority of the respondent is enabled to decide afresh, the impugned order dated 23.2.0221 passed u/s 127(2) of the Act is set aside.

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• 2022 (10) TMI 985
  Revision u/s 263 by CIT - As per CIT, claim of deduction of expenses with respect to the purchase, expenses, brokerage or interest is not in accordance with the law - AO has not verified the Sundry Creditors, other expenses, brokerage paid and unsecured loan - HELD THAT:- We find that the Assessing Officer has called for all the information required for making assessment, have perused the relevant details filed by the assessee, wherever the details are not coming forth the requisite penalty notices were issued and the balance information was obtained and verified. PCIT has also called for the report of the learned Assessing Officer where AO has also shown that requisite notices under Section 133(6) of the Act were issued and replies were obtained from lenders. It is not the case of the learned PCIT that the AO has allowed the claim of the assessee or not made addition/ disallowances, which should have been made as per law. Only reason for holding the order of AO erroneous is that interest was not examined if same were utilized for the purpose of the business, the expenses were correct or genuine and whether for brokerage expenses services were rendered or not. PCIT did not find single instances despite having all the information available with him, which is even remotely suggesting and supporting the reasons for which order under Section 263 of the Act was passed. If the order has been passed without making enquiries or verification which are reasonable and prudent officer should have carried out, in that case no doubt the order passed by the learned Assessing Officer becomes erroneous. However, the learned PCIT should have shown that what are the further enquiries or verification should have been made by AO which he has failed to do. The revisionary authority should be in a position to show that failure to make the enquiry in a particular fashion, which should have been made by the man of reasonable prudence, and learned Assessing Officer has failed to do so. This could have been shown by also looking at the past assessment history of the assessee. In fact the assessee has shown that in earlier assessment year passed under scrutiny assessment did not result into any addition. There is nothing in the revisionary order to show that the claim of deduction of expenses with respect to the purchase, expenses, brokerage or interest is not in accordance with the law. Also not shown that fresh loans taken by the assessee and he has failed to discharge initial onus. In the result, we do not find that the assessment order passed by the learned Assessing Officer is erroneous so far as it is prejudicial to the interest of the Revenue. - Decided in favour of assessee.

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• 2022 (10) TMI 984
  Addition u/s 68 - unexplained cash credit in respect of share capital and share premium received by the assessee during the year - HELD THAT:- Both the authorities have reached and based their conclusions to make addition on the fact that the directors of the subscribing companies were not produced before the AO which in no way could not be the basis for making addition as the assessee has filed all the necessary documents before the authorities below proving the identities, creditworthiness of the investors and genuineness of the transactions. The case of the assessee is squarely covered by the decisions of Crystal Networks Pvt. Ltd [ 2010 (7) TMI 841 - KOLKATA HIGH COURT] wherein it has held that where all the evidences were filed by the assesse proving the identity and creditworthiness of the loan transactions , the fact that summon issued were returned un-served or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. As the assessee has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but neither AO nor ld CIT(A) commented on these evidences filed by the assessee. Considering these facts in the light of ratio laid down in the decisions as discussed above , we set aside the order of Ld. CIT(A) and direct the AO to delete the addition. Appeal of the assessee is allowed.

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• 2022 (10) TMI 983
  TDS u/s 195 - payment made to its parent company - payment is made by the appellant under cost Sharing agreement with its group wherein the BASF SE who is another member in the pool - Whether payment made by the appellant to BASF SE is payment in the nature of fees for technical services? - HELD THAT:- The assessee, on the basis of cost sharing agreement and also in light auditor certificate claimed that payment made to non-resident entity is not liable to be taxed in India and consequently, the assessee need not to deduct TDS in India. We find that although the assessee claims to have reimbursed cost incurred by parent company to provide certain common services without any markup, the said claim of the assessee was not substantiated. Further, if we go through the cost sharing agreement between the assessee and its parent company, the services to be rendered are in the nature of composite services and from the said agreement, it is difficult to ascertain whether they are in the nature of fee for technical services or only reimbursement of cost. Although, the assessee strongly relied upon the certificate issued by the Deloitte GmbH and contended that the payment made to the non-resident is only cost incurred by the parent company without any mark-up, which was not supported by any evidence. Therefore, we are of the considered opinion that the issue needs to be re-examined in light of various averments including cost sharing agreement, certificate issued by the Deloitte GmbH and the provisions of section 9(1)(vii) of the Act read with DTAA between India and Germany. The issue needs to go back to the Assessing Officer for further verification and accordingly, we direct the Assessing Officer to re-examine the issue of applicability of TDS as per section 195 of the Act on payment made to non-resident and decide the issue in accordance with law. Appeals filed by the assessee are allowed for statistical purposes.

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• 2022 (10) TMI 982
  Addition towards loss of chit - assessee has subscribed for chit fund and made a premature drawing and incurred loss - assessee has claimed chit loss as business loss on the ground that the chit fund has been used for the purpose of business - AO had disallowed chit loss on the ground that the subscription to chit is mutuality and any gain on chit fund is exempt from tax and consequently, loss on chit cannot be allowed as deduction - HELD THAT:- We find that, the CIT(A) has deleted the addition by following decision of V. Raj Kumar [ 2014 (3) TMI 388 - MADRAS HIGH COURT] where as clearly held that any profit or loss arising from the chit subscription activity is liable for taxation and consequent loss of chit is a allowable deduction. The finding of facts recorded by the Ld. CIT(A) in light of decision of Jurisdictional High Court of Madras, V. Raj Kumar vs CIT is uncontroverted by the Revenue. Therefore, we are inclined to uphold the findings of the Ld. CIT(A) and reject ground filed by the Revenue. Unexplained credit u/s. 68 - AO has made addition towards unsecured loan taken from M/s. D.S. Metal (P) Ltd and M/s. Shakthi Metals and Steels, on the ground that the assessee could not submit necessary evidence including confirmation letters from the party - CIT(A) deleted addition on the basis of confirmation letters filed by the assessee - HELD THAT:- Admittedly, the assessee could not file confirmation letters before the AO. However, the assessee has obtained confirmation letters from the creditors and submitted before the CIT(A). Although, CIT(A) has furnished additional evidence along with confirmation letters to the AO, but the AO chose not to comment on additional evidence filed by the assessee. Therefore, on this ground itself, the addition made by the AO cannot be sustained. CIT(A) has discussed the addition made by the AO in light of confirmation letters filed by the assessee and has recorded categorical finding that the assessee has proved unsecured loan, claims to have been received from M/s. D.S. Metal (P) Ltd and M/s. Shakthi Metals and Steels. The factual findings recorded by the Ld. CIT(A) is uncontroverted by the Revenue. Therefore, we are of the considered view that there is no error in reasons given by the CIT(A) to delete addition. Appeal filed by the Revenue is dismissed.

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• 2022 (10) TMI 981
  Assessment of trust - Registration u/s 80G - provision in ITA which permits withdrawal / cancellation of section 80G certificate / order - whether the Ld. PCIT is empowered to accord approval sought for by the assessee under section 80G subject to the conditions to be complied with by the assessee trust ? - HELD THAT:- Compliance of the conditions for section 11 12 of the Act by the assessee is to be examined by the Assessing Office (AO) during the assessment proceedings. The role of Ld. PCIT while according registration and approval under section 12A 80G is only to make himself satisfied about the genuineness of the activities to be carried out by the assessee trust and compliance of such requirement of any other law for the time being in force by the trust or institution material to achieve its object and then to accord the registration and approval. Moreover, assessee in this case has applied for approval under section 80G of the Act in form No.10AC as explained in column six of the impugned order i.e. 11-Clause (i) of first proviso to sub-section (5) of section 80G. Had the assessee moved to the PCIT under clause II III of proviso 2 to section 80G then he would have been empowered to impose the condition. When in the instant case assessee has come up under clause I of sub section v of section 80G, no such condition can be imposed by the Ld. PCIT. So we are of the considered view that impugned order passed by the Ld. PCIT is not sustainable to the extent of imposing conditions in para 10(a) to (j) of the impugned order, in the eyes of law. Consequently, approval granted by the Ld. PCIT under section 80G of the Act to the assessee is made absolute sans conditions laid down in para 10 of the impugned order. Hence, both the appeals filed by the assessee are allowed.

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• 2022 (10) TMI 980
  Assessment of trust - addition as made by the AO by doubting the genuineness of the expenditure incurred on free distribution of medicines to patients and other social organizations - only on the basis of statements recorded u/s 131 of the office bearers of the social organization, AO disallowed the expenses incurred by the assessee for supplying free medicines to social organizations - HELD THAT:- We note that the AO recorded the statement of Dr. Chatterjee on 01.12.2016 wherein he stated that he associated with Anandalok Hospital as resident medical officer since 1997 but due to personal issues, he left Anandalok in March 2013 and again joined in July 2015 and so he did not attend any medical camps for Anandalok. However on 25.02.2014 in the remand proceedings, Dr. T. N. Chatterjee was again recorded u/s 131 of the Act wherein he stated that on his recommendation the assessee trust scrapped assets worth Rs. 17,32,99,000/-which were not usable / or obsolete. He stated that he was associated since 1997 and was getting contractual fee of Rs. 1,00,000/- per month and in March 2014 on request of other doctors and staff members of the hospital, he verified the medical equipments lying inside of hospital premises and advised the Managing Trustee Mr. Deo Kumar Saraf to discard the old machines/equipments. There is conflict in the statement by Dr. T.N. Chatterjee as in the statement recorded on 01.12.2016 he stated that he left the hospital in March 2013 and again joined in July, 2015 whereas in the statement recorded in the remand proceedings on 02.05.2018 Dr. Chatterjee stated that he was working in the hospital since 1997 and in March 2014, he stated that on request of doctors and staff member of Anandalok Hospital certain equipments / marchinaries which were obsolete and outdated ,he recommended the scrapping of the same after carrying out the necessary examination. So therefore find a merit in the contention of A.R that first statement was recorded under pressure. Therefore on this account also the addition of Rs. 2,21,95,113/- for free distribution of medicine to affected people is wrongly made by the AO. The statements/material cannot be used on the back of the assessee and if done so it is against the principles of natural justice as has been held in the case of Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT ] wherein the Hon ble Apex Court has held that failure to give assessee the cross-examination of witnesses whose statements were relied upon to take an adverse view results in breach of principles of natural justice. In our viewthis is a serious flaw and renders the action of AO as nullity. We are inclined to set aside the order of Ld. CIT(A) and direct the AO to delete the addition. In the result the ground no. 1 is allowed. Addition by estimating @ 5% of the cost of scrapped assets - HELD THAT:- The said scrapping/discarding of asset was done on the recommendation of Dr. T. N. Chatterjee who after inspecting these plants or machineries/equipments submitted a report that the said assets were not usable and should be discarded. Thereafter a committee of two employees Shri Sudam Maity and Bhavesh Jhawas constituted who were assigned the job of discarding of the said assets lying in the hospital premises located at Salt Lake. The said committee sold them and utilized the same in a party of all the staff of the assessee trust. We also note that both the authorities have not brought any material/evidence on record which corroborate that these assets were sold for more than Rs. 85,000/- . CIT(A) also agreed to the contentions of the assessee that these obsolete machineries which were not usable and thus directed the AO to make the addition @ 5% which comes to Rs. 86,64,950/-. But in our view by doing so the Ld. CIT(A) has merely acted on surmises and conjectures sans any concrete basis. The said action of the ld CIT(A) is wrong and cannot be sustained. Under these facts and circumstances we are inclined to set aside the order of Ld. CIT(A) and direct the AO to delete the addition. Consequently the ground no. 2 is allowed.

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• 2022 (10) TMI 979
  Revision u/s 263 by CIT - CIT-A setting aside the assessment order passed u/s 147 read with section 143(3) - employees contribution towards ESI and PF - HELD THAT:- These payments were made after the limitation provided in ESI and PF but before the due date of filing of the return. We take note of the finding of ITAT, Kolkata in the case of Pankaj Agarwal [ 2022 (8) TMI 1295 - ITAT RANCHI] The assessee will succeed before the AO there will be no prejudice to the Revenue and, therefore, the assessment order dated 19.03.2018 is not held to be prejudice to the interest of revenue and do not call for any revisionary proceeding for the issues raised in the show-cause notice u/s 263 - We, therefore, quash the impugned order u/s 263 and restore the assessment order u/s 147 read with section 143(3) of the Act and allow the grounds raised by the assessee.

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• 2022 (10) TMI 978
  Reopening of assessment u/s 147 - Necessity to take valid approval before reopening - obtaining approval from the JCIT and the PCIT on the basis of the information received by the A.O. from the Non PAN AIR of the Department that the assessee deposited a sum in the saving bank account during the financial year 2009-10 - HELD THAT:- In the instant case the A.O. has not applied his independent mind while reopening the assessment u/s 147 and simply relied on the Non PAN AIR information. Even for recording reasons for initiating proceedings u/s 148 and for obtaining approval of the JCIT, Range-2, Noida and PCIT, Noida respectively, the power vested by Commissioner under section 151 to grant or not to grant approval to the A.O. to reopen an assessment is coupled with a duty. Commissioner is required to apply his independent mind to the proposal put up to him for approval in the light of material relied upon by the A.O. That power by the Commissioner cannot be exercised casually and in a routine manner. Since, the authorities below has granted approval for reopening of the assessment in a routine and casual manner, based on such approval, reopening of assessment by the A.O. is not at all sustained in the eye of law - Appeal of the assessee is allowed.

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• 2022 (10) TMI 977
  Disallowance of expenses made by AO - stoppage of production - CIT(A) directed AO to allow 50% of the expenses claimed by the assessee as assessee has not furnished evidences for incurring those expenses before the Assessing Officer - HELD THAT:- As stated that the assessee has stopped production during the year under consideration due to labour strike. It is also further stated that the most of the expenses have been incurred through banking channel. It is the submission of the learned AR that the assessee was carrying on the business/production in the earlier year and only during the year under consideration production had to be stopped. Hence the stoppage of production should be taken as temporary lull in the business and hence there was no necessity in disallowing the entire expenses claimed by the assessee - See MICRO TURNERS (P) LTD. VERSUS JCIT, ROHTAK [ 2016 (5) TMI 284 - ITAT DELHI] Dispute may be put to rest by making disallowance of part of expenses claimed by the assessee. This is due to the fact that considerable time, i.e., more than nine years have elapsed from the date of closure of the financial year. This issue should be settled at this stage. Considering the fact that similar expenses have been allowed in the earlier years and since it was submitted that most of the expenses have been incurred through banking channels and the nature of expenses would show that they are normal expenses incurred in the course of business, disallowance of expenses for non-production of vouchers may be restricted to 10% of the expenses claimed by the assessee and, in my view, the same would meet the ends of justice. Appeal filed by the assessee is partly allowed.

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• 2022 (10) TMI 976
  Delayed employees contribution to provident fund - assessee has deposited the amount before filing of the return of income u/s.139(1) and there is a delay in depositing the employees contribution to provident fund - HELD THAT:- As amendment was brought in Finance Act, 2021 w.e.f 01.04.2021. The law was not framed/amended in the relevant Assessment year and any legal proposition which cast additional burden/liability on the assessee cannot be implemented retrospectively. The amendment to section 36(1)(va) of the Act will not be applicable to Assessment Year 2018-19. The assessee has deposited the employees contribution of provident fund before the due date u/s. 139(1) - Accordingly, we set-aside the order of the CIT(A) and direct the assessing officer to delete the disallowance and allow the grounds of appeal in favour of the assessee.

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• 2022 (10) TMI 975
  Rental deposits written off - allowable revenue expenses u/s 37(1) - HELD THAT:- We noted that the assessee company has claimed a sum of Rs.2,89,42,376/- as deposits written off on account of payment of deposits on account of lease rental in term of agreement entered with Mahaveer Safety Glass Co. Pvt. Ltd., dated Feb,2008 for the property at Plot Nos.D-9 D-10 in Sipcot Industrial Park, Irungattukottai. The assessee could not occupy the property since the required permission was not taken by the owner of the land from Sipcot and lease could not be finalized. The assessee has filed recovery proceedings by filing a suit before the Hon ble Madras High Court but that is pending. In the mean time, the assessee had made this claim of rental deposits as write off and claimed as allowable expenditure u/s.37(1). As the issue is exactly identical, respectfully following the Hon ble Madras High Court decision in the case of Pricol Ltd. [ 2021 (8) TMI 481 - MADRAS HIGH COURT ] we direct the AO to allow the claim of assessee. Appeals filed by the assessee are allowed.

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• 2022 (10) TMI 974
  Rectification of mistake u/s 154 - Delayed Employees contribution to the Employee Provident Fund and Employee State Insurance Fund - addition u/s 2(24)(x) r/w s. 36(1)(va) - amount being deposited before the due date of filing the return of income u/s. 139 (1) - scope of amendment - HELD THAT:- In view of the foregoing, no question of the said Explanations being read as retrospective, so as to apply for the relevant year, sustaining the impugned additions, which therefore fail. This is, however, subject to any decision/s by the Hon ble jurisdictional High Court, which would, where so, hold, even justifying a rectification u/s. 154/254(2), even where rendered after the date of the order sought to be rectified. See SAURASHTRA KUTCH STOCK EXCHANGE LTD [ 2008 (9) TMI 11 - SUPREME COURT] and SMT. ARUNA LUTHRA. [ 2001 (8) TMI 84 - PUNJAB AND HARYANA HIGH COURT] No such decision has been found, or otherwise pointed out by the parties, as was the case before the Tribunal in Nikhil Mohine [ 2021 (11) TMI 927 - ITAT JABALPUR] any such decision, even if discovered later, may operate to amend this order, or the order giving appeal effect thereto, to bring it in conformity or agreement with the said decision/s, of course, after allowing a fair opportunity of hearing to the assessee. The impugned additions, therefore, could not have been made under the given facts and circumstances of the case, and are directed for deletion. Decided in favour of assessee.

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• 2022 (10) TMI 973
  Non deposit of employees contribution to provident fund within the time allowed under prescribed Act - as submitted assessee has deposited the amount before filing of the return of income u/s. 139(1) of the Act and there is a delay in depositing the employees contribution to provident fund - scope of amendment - HELD THAT:- We find that the amendment was brought in Finance Act, 2021 w.e.f 01.04.2021. The law was not framed/amended in the relevant Assessment year and any legal proposition which cast additional burden/liability on the assessee cannot be implemented retrospectively. We considering the overall facts, circumstances, judicial decisions, are of the reasoned view that the amendment to section 36(1)(va) of the Act will not be applicable to Assessment Year 2018-19. The assessee has deposited the employees contribution of provident fund before the due date u/s. 139(1) of the Act. Accordingly, we set-aside the order of the Ld.CIT(A) and direct the assessing officer to delete the disallowance and allow the ground of appeal in favour of the assessee. CPC cannot make adjustment relating to section 43B or 36(1)(va) in 143(1)(a) assessment, even otherwise without giving proper notice to the assessee with regard to enhancement - We are in agreement with the submissions of the assessee that the Assessing Officer does not have any mandate u/s. 143(1)(a)(i) to (vi) of the Act. The adjustment made by the Assessing Officer are outside the mandate of section 143(1) of the Act. Therefore, even in this count, the assessment made by the Assessing Officer is bad in law. In the result, Ground No.2 also allowed.

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• 2022 (10) TMI 972
  Revision u/s 263 by CIT - Reopening of assessment u/s 147 - assessee firm had allegedly received bogus entries - lack of inquiry v/s inadequate inquiry - whether the Ld. PCIT was justified in exercising his revisionary powers u/s. 263 when the AO had already rejected the various contentions of the assessee and had also made additions to the returned income by disallowing salary and interest to partners and had also enhanced the percentage of earnings by taking the same as 8% being commission earned by the assessee firm? - HELD THAT:- As in the present case, the Ld. PCIT has not specifically pointed out as to what inquiries or verification should have been carried out by the AO in this regard. From the records produced before us, it is very much evident that the AO had made inquiries regarding assessee s claim of having earned income from sub-contract work and, thereafter, after considering the reply submitted by the assessee, the AO reached a conclusion that the assessee s claim regarding its working as a sub-contractor was not to be accepted and that the assessee s such claim was to be rejected. Thereafter, the AO proceeded to hold that the assessee s work was in the nature of providing accommodation entries and based on this conclusion, the AO held that a rate of 8% should be applied being percentage of commission earned on providing the accommodation entries. Thus, in view of the questionnaires issued by the AO and the replies submitted by the assessee, the conclusion reached by the AO of rejecting the assessee s claim apparently proves that the AO had made proper inquiries and had also duly applied his mind to the facts of the case. Therefore, the contention of the Ld. PCIT that no enquiry was made by the AO is factually incorrect. It is not a case, where no inquiry had been made by the AO. Merely because the Ld. PCIT felt that further inquiry should have been made does not make the order of the AO erroneous and prejudicial to the interest of the Revenue. We also note that there is no incorrect application of law by the AO in the present case and further, the AO, after making inquiries and examining the records, has taken a view which is one of the possible views, and since this view is not unsustainable in law, it cannot be said that the order passed by the AO was erroneous in so far as being prejudicial to the interest of Revenue. Even at the cost of repetition, we reiterate that inadequacy of inquiry does not give jurisdiction to the Ld. PCIT to invoke his revisionary powers and set aside the assessment and nor does this section provide such powers to the Ld. PCIT that he can impose his view on the AO dictating him how a particular assessment is to be concluded. Pr.CIT has ignored the replies of the assessee and he has not discussed as to why he does not agree with the contentions of the assessee. The Ld. Pr.CIT has merely remitted the matter back to the Assessing Officer without making any inquiry himself. It is apparent that no independent inquiries have been made by the Ld. Pr.CIT although it was incumbent upon him to make such inquiry so as to reach the conclusion that the order of the Assessing Officer was erroneous and prejudicial to the interest of the revenue. There is a difference between lack of inquiry and inadequate inquiry and it is for the Assessing Officer to decide the extent of inquiry to be made and it is his satisfaction which is required under the law. The Hon ble Delhi High Court in the case of Commissioner of Income Tax vs. Sunbeam Auto Ltd. [ 2009 (9) TMI 633 - DELHI HIGH COURT] has held that if there was any inquiry, even inadequate, that would by itself not give occasion to the Commissioner to pass order u/s. 263 of the Act merely because the Commissioner had a different opinion in the matter. It is a settled law that the Ld. Pr.CIT cannot pass the order u/s. 263 on the ground that thorough inquiry should have been made by the Assessing Officer. We have no hesitation in holding that the Ld. Pr.CIT had wrongly invoked the revisionary powers u/s. 263 of the Act and we have no option but to quash the same. It is so ordered accordingly. - Decided in favour of assessee.

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• 2022 (10) TMI 971
  Deduction /s. 80P - Disallowance of deduction claimed by holding the appellant as a co-operative bank - HELD THAT:- We observe that identical issue i.e. whether the assessee a cooperative society is entitled for deduction u/s. 80P(2)(d) of the Act on the interest income earned from other cooperative banks/societies has been decided by various Coordinate Benches in favour of the assessee. See Kshatriy Gadkari Maratha Cooperative Credit Society Ltd [ 2019 (4) TMI 1932 - ITAT MUMBAI] as held admittedly, the interest which the assessee respondent had earned was from a Co-operative Society Bank. Therefore, according to Sec. 80P(2)(d) of the I.T. Act, the said amount of interest earned from a Cooperative Society Bank would be deductable from the gross income of the Co-operative Society in order to assess its total income. Therefore, the Assessing Officer was not justified in denying the said deduction to the assessee respondent. Also see Kaliandas Udyog Bhavan Premises Co-op Hsg Society [ 2018 (4) TMI 1678 - ITAT MUMBAI] Thus we hold that the assessee a cooperative society is eligible for deduction u/s.80P(2)(d) of the Act in respect of the interest income earned by the assessee from either any other cooperative society or from a cooperative bank. Grounds raised by the assessee are allowed.

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• 2022 (10) TMI 970
  Exemption u/s. 11 - CIT-A justification in deleting the disallowance and allowing the grant exemption u/s. 11 - Whether CIT(A) was justified in granting relief beyond the scope of ground raised which was The AO has not considered the submission made by the AO on portal 19.12.2018 and also earlier submissions? - HELD THAT:- On a careful perusal of the order of the Ld. CIT(A) and the reasons given therein, we observe that revenue is aggrieved because of Ld. CIT(A) has given relief based on the evidences submitted by the assessee. The evidences submitted were not controverted by the revenue. CIT(A) has not adjudicated the appeal on merit - We observe that Assessing Officer has not assessed the income of the assessee judicially even though assessee has filed the information somewhere on 11.07.2017. He cannot set-aside the information available with him. Hence, we do not find any infirmity in the order passed by the Ld. CIT(A) in deleting the disallowance and directing the Assessing Officer to grant exemption u/s. 11 as claimed by the assessee. Grounds raised by the revenue are dismissed.

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• 2022 (10) TMI 969
  Revision u/s 263 - interest disallowance u/s 36(1)(iii) - PCIT took the view that the AO has not examined the issue of non-charging of interest on the loan given by the assessee - HELD THAT:- Pr. CIT, before holding an order to be erroneous, should conduct necessary enquiries or verification in order to show that the finding given by the assessing officer is erroneous or the Ld. Pr. CIT should show that the view taken by the AO is unsustainable in law. In the instant case, we noticed that the Assessing Officer has called for the details of loan taken by the assessee as well as given by the assessee in a particular format which included a specific column for mentioning rate of interest charged. The Ld. A.R. submitted that the details called for by the Assessing Officer were duly furnished before him and hence the Assessing Officer is very much aware of the fact that the assessee has not charged interest on certain loans aggregating to Rs. 16.42 crores. In the instant case, a cursory glance of the Balance sheet as on 31.3.2017 of the assessee would show that the assessee is having own funds, i.e., Capital balance of Rs. 75.74 crores as on 31.3.2017, whereas interest free loan given by the assessee was to the tune of the Rs. 16.42 crores only. Since own funds available with the assessee far exceeds amount of interest free loan, no interest disallowance under section 36(1)(iii) is called for, as per the decision rendered in the case of Reliance Utilities and Power Ltd [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] Admittedly the learned PCIT has failed to examine these factual aspects and has also failed to follow binding decision of Hon ble Jurisdictional High Court. When the case of the assessee is covered by the binding decision of the jurisdictional High Court, then there is no scope for holding the assessment order to be erroneous and prejudicial to the interest of revenue. Non-examination of these factual aspects and non-application of the binding decision of jurisdictional High Court on the issue sought to be revised by Ld. PCIT would make the impugned revision order unsustainable in law - Appeal filed by the assessee is allowed.

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• 2022 (10) TMI 968
  Deduction u/s. 80P(2)(d) - interest earned from deposits in cooperative bank - as per AO amendment made by Finance Act, 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the definition of Co-operative Society and requiring them to deduct income tax at source under Section 194A - HELD THAT:- As relying on Kaliandas Udyog Bhavan Premises Co-op Hsg Society [ 2018 (4) TMI 1678 - ITAT MUMBAI] and KSHATRIY GADKARI MARATHA COOPERATIVE CREDIT SOCIETY LTD. [ 2019 (4) TMI 1932 - ITAT MUMBAI] we hold that the assessee a cooperative society is eligible for deduction u/s. 80P(2)(d) of the Act in respect of the interest income earned by the assessee from either any other cooperative society or from a cooperative bank. Thus, we do not find any infirmity in the order of the Ld. CIT(A) and accordingly, grounds raised by the revenue are dismissed.

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• Customs

• 2022 (10) TMI 967
  Levy of penalty - Wrong mentioning of the Section - case would fall under Section 114(i) or 114(iii) of the Customs Act? - HELD THAT:- Learned ASG is not in a position to satisfy the Court how the case would fall under Section 114(i) of the Customs Act, as claimed. Nothing has been pointed out how the goods can be said to be prohibited goods. Even otherwise, it is required to be noted that there is a clear finding recorded by the learned Tribunal and confirmed by the High Court that the respondent did not claim any draw back benefit. When the Revenue is not in a position to even satisfy this Court that the case would fall under Section 114(i) of the Customs Act and, even according to the Revenue, the case would not fall under Section 114(iii) of the Customs Act, we see no reason to interfere with the impugned judgment passed by the High Court as well as that of the Tribunal. Appeal dismissed.

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• 2022 (10) TMI 966
  Demand of differential duty - consignment of PVC Flex Sheet LF-238 by way of filing Bills of Entry and cleared the imported goods for Home Consumption from ICD - imports by contemporaneous price - HELD THAT:- As regard application of the contemporaneous price, it is found that imports by Tower Overseas are of February 2006 and that of appellant are of April to July 2006. For applying the price of contemporaneous goods, it is also one of the condition that the import should be at same time. Moreover there is force in the submission of the appellant that market of PVC Flex Sheet during that period was volatile, in that view imports not being of the same time; the import value of that Tower Overseas are not comparable at all. The fact was also placed on record by the appellant that during the same period of imports by the appellant, there have been imports of the similar item @0.27USD/SQM at the port of Mumbai by Yash Enterprise which is lesser than the price at which appellant imported the said items during the month of June 2006. It is also settled law that while applying the price of contemporaneous goods, when more than one price are available then the lowest of the prices should be taken for the assessment. Therefore for this reason the price could not have been enhanced in respect of the goods in question. As a result impugned order is not sustainable, accordingly the same is set aside - appeal allowed.

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• 2022 (10) TMI 965
  Refund of SAD - Endorsement on the Invoice - stamp required as per Para 2(b) of Notification No. 102/2007 is not endorsed - whether the direction for remand by the Commissioner (Appeals) to verify and reprocess the refund claim is legal and proper? - HELD THAT:- It is the case of the department that when two invoices were called for by the review cell, such invoices did not bear the endorsement as required under para 2(b) of Notification. It is pointed out by the learned counsel for the appellant that the original authority after examining the invoices has made a finding that there are endorsements on the sales invoices which indicated not eligible for CENVAT credit . It is also noted by the original authority that the condition in para 2(b) has been fulfilled. The Larger Bench of the Tribunal in the case of CHOWGULE COMPANY PVT LTD VERSUS COMMISSIONER OF CUSTOMS CENTRAL EXCISE [ 2014 (8) TMI 214 - CESTAT MUMBAI (LB)] has held that failure of the importer to endorse on the sales invoices that no credit of such additional customs duty would be admissible to buyers as stipulated under condition 2(b) of Notification cannot be a ground to deny the refund. Even though it is alleged by the department that two sales invoices did not bear the required endorsement, it is not established whether these invoices verified by Review Cell are the original invoices issued to the buyer by the appellant. So also there is no evidence to establish that the buyer had availed credit on these alleged invoices. There are no merits in the grounds alleged for remand of the matter. The order passed by Commissioner (Appeals) requires to be set aside - the order passed by the original authority sanctioning the refund is restored - appeal allowed.

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• 2022 (10) TMI 964
  Levy of penalty on the appellant under Section 112(b) of the Customs Act, 1962 - existence of material on record to prove that the appellant had submitted the fake gate pass or not - illegal removal of the subject container - prohibited goods or not - HELD THAT:- The findings of the Adjudicating Authority, clearly exonerates this appellant from the penal action under Section 114AA of the Customs Act, 1962, for the reason that there was no material on record to prove that the appellant had submitted the fake gate pass. The above, clubbed with the earlier portion of the order of the Adjudicating Authority that there was no evidence other than the statement of one Shri R. Suresh to suggest the involvement of this appellant in the illegal removal of the subject container, clearly indicates that the appellant has been targeted for no reason whatsoever in this case. Further, there is no material brought on record as to the role of this appellant, i.e., act or omission, that has led to the confiscation of the prohibited goods and it is a matter of record that no goods were confiscated at all in this case on hand. It is also a matter of record that the subject container was very much in the custody of the SIIB Officers since no Bill-of-Entry was ever filed and hence, the alleged removal from the CFS could only attract act of theft under the Indian Penal Code, for which a separate police complaint was lodged and the Revenue has not placed before me the current status of the said complaint - Revenue has also not placed anything on record as to against whom such complaint has been lodged and if this appellant is one of the accused. Fastening the penalty under Section 112(b) ibid against this appellant is only a fallacy, which cannot be sustained at any stretch of imagination - Appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2022 (10) TMI 963
  Fraud - minority shareholders or not - applicability of Section 439 of the Companies Act - submission is that once an offence has been designated to be cognizable under Sub-section 6 of Section 212 of the Act, the provision of Section 439 of the Act that deals with non-cognizable offences would not be applicable and the procedure prescribed under Section 212 of the Act has to be strictly followed - initiation of proceedings under Section 447 of the Companies Act, 2013. Whether a shareholder, minority or otherwise, can initiate proceedings before the Magistrate by himself or herself for an alleged offence under Section 447 of the Companies Act, 2013? - HELD THAT:- Section 439 of the Companies Act, which has been reproduced herein above, makes all the offences under the Companies Act non-cognizable and Sub-Section (3) of Section 439 provides that a complaint could be filed by the Registrar or a Shareholder of the Company or a person authorized by the Central Government in that behalf. Thus, any offence being non-cognizable, a complaint could be filed by the Registrar, Shareholder of the Company or a person authorized by the Central Government - Sub-Section (6) of Section 212 of the Act specifically deals with the offences covered under Section 447 of the Act and makes it clear that no Court shall take cognizance unless a complaint is made by the Director, Serious Fraud Investigation Office (SFIO) or the officer of the Central Government authorized by a general or special order in writing in this behalf by that Government. Thus, an offence under Section 447 of the Act is given special treatment in terms of Sub-Section (6) of Section 212 of the Act. It is only that procedure which is prescribed under Sub- Section (6) of Section 212 of the Act which would apply. It is held that a shareholder, minority or otherwise cannot initiate proceedings before the Magistrate by himself or herself for an alleged offence under Section 447 of the Act. Whether the offence under Section 447 of the Companies Act, 2013 is a cognizable offence or a non-cognizable offence? - HELD THAT:- Sub-Section (6) of Section 212 of the Act is clear that an offence under Section 447 of the Act is cognizable and the method of taking cognizance is also provided. Thus, it is held that an offence under Section 447 of the Act is a cognizable offence. What is the remedy available to a shareholder in the event of the shareholder alleging fraud requiring the initiation of proceedings under Section 447 of the Companies Act, 2013? - HELD THAT:- It is held that a shareholder cannot file any proceedings before the Magistrate for an offence under Section 447 of the Act. However, such a shareholder is not remediless. In the event of after investigation, it was proved that the business of the Company is being conducted with an intent to defraud its creditors, members or any other persons or otherwise for a fraudulent or unlawful purpose, or the Company was formed for any fraudulent or unlawful purpose, then every officer of the Company who is in default and the person or persons concerned in the formation of the Company would be punishable for fraud in the manner provided under Section 447 of the Act - for a shareholder to avail a remedy under Section 447 of the Act such shareholder essentially needs to go through the procedure under Section 213 of the Act and in the event of a report being submitted by the Inspector to the Tribunal of there being a fraud either the Shareholder or the Tribunal could refer the report to the SFIO who can then follow the procedure provided under Section 212 of the Act and initiate criminal proceedings against the offenders for an offence under Section 447 of the Act. Does the order passed by the learned Magistrate in the present matter suffer from legal infirmity requiring interference? - HELD THAT:- Having come to a conclusion that no proceedings could have been initiated by a Shareholder by himself under Section 447 of the Act and that the requirement under Sub- Section (6) of Section 212 of the Act was required to be complied with. The learned Magistrate without having gone through and appreciated the provisions of Sections 212, 213, 439 and 447 of the Act, the order of cognizance is contrary to the applicable law and therefore, suffers from legal infirmity requiring this Court s interference. The Criminal Petition is allowed.

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• 2022 (10) TMI 962
  Legality of Annual general Meeting sought to be convened - Section 96 of the Companies Act, 2013 - HELD THAT:- The main petition is pending before the Tribunal for consideration. The instant Appeal is disposed off with a request to the National Company Law Tribunal, Cuttack Bench, Cuttack to expedite the matter and dispose of at an early date by considering all the issues raised by the parties including issue of Annual General Meeting. The instant Appeal is disposed of.

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• Insolvency & Bankruptcy

• 2022 (10) TMI 961
  Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Existence of debt and dispute or not - time limitation - HELD THAT:- Upon perusal of the records, it is evident that the amount was disbursed to the Corporate Debtor. The Corporate Debtor has admitted in paragraph 13 of letter dated 24.09.2016 the fact that he has received an amount of Rs.15,00,000/- vide DD No. 751011 drawn on SBBJ Bank. This indicates that the fact that there was a valid disbursal - the Respondent was under an obligation to enter into an Appointment Letter by signing the Retailership Agreement post receipt of security deposit. Further, Clause 3 of letter dated 24.09.2016 stipulates that the security deposit shall be refunded at the end of 7th year. Since the Respondent has neither entered into an agreement nor refunded the deposit, there is a clear default. This application was filed on 05.12.2019 and as submitted by Petitioner the date of default is 05.08.2019. Hence, the application falls within the limitation period of three years - the Respondent has defaulted in the payment of the outstanding debt. The application made by the Petitioner is complete in all respects as required by law. It clearly shows that the Respondent is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC, at the relevant time. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor - Petition admitted - moratorium declared.

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• Service Tax

• 2022 (10) TMI 960
  Recovery of Service tax - works contract - Government of Andhra Pradesh has awarded the work of Pranahitha Chevella Lift Irrigation Scheme Link-II Package 7 now renamed as Kaleshwaram Project - Link-II - Package No. 7 - applicability of N/N. 41/2009-Service Tax, dated 23rd October, 2009 and Circular No. 116/10/2009, dated 15th September, 2009 - HELD THAT:- From a perusal of the documents, it is seen that the petitioners have been entrusted with the works of digging up the canal for the purpose of Kaleshwaram Project, as per the Articles of Contract, dated 17-11-2008. As seen from the documents filed by the petitioners, on an earlier occasion, the official respondents duly taking into consideration the exemption granted by the Ministry of Finance, Government of India, vide Notification No. 41/2009-Service Tax, dated 23-10-2009, have released the Service Tax amounts which were earlier recovered from the petitioners bills. Admittedly, the Government of India through the Ministry of Finance has issued the notification exempting the payment of Service Tax for certain works done by the Government or on its behalf. Notification No. 41/2009-Service Tax, dated 23-10-2009 makes it abundantly clear that the same is exempting the Service Tax for the canal works done by the Government or on its behalf i.e., the petitioners. Admittedly, in this case, there is no dispute that the petitioners have undertaken the work for digging up the canal system for the purpose of Kaleshwaram Project on behalf of the Government, which is admittedly not a commercial activity, and which is chargeable to service tax. Once the Government of India, through the Ministry of Finance, has granted the exemption to the work contracts in respect of canals and once the circular has been issued clarifying the same, the endorsement made by the Director of Works Accounts is without jurisdiction and contrary to the said exemption granted by the Government of India - It is well settled principle of law that any endorsements or orders made by the officials/Departmental Heads cannot override the provisions of the Act/Rules/Circulars. The official respondents are directed not to recover or deduct any amounts towards Service Tax pursuant to the endorsement of the Director of Works Accounts - Petition allowed.

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• 2022 (10) TMI 959
  Levy of service tax - foreign currency expenditure for the financial year 2012-13 - reverse charge mechanism - validity of SCN - HELD THAT:- In the present case the show cause notice does not specify the category of service under which the demand has been confirmed. In regard to the period from July 01, 2012 to March 31, 2013 the demand has been proposed under section 66A of the Finance Act which did not exist. This precise issue was considered by a Division Bench of the Tribunal in M/S FRISCO FOODS PRIVATE LIMITED VERSUS COMMISSIONER, CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, DEHRADUN [ 2021 (11) TMI 428 - CESTAT NEW DELHI] and it was held that the charging section which has been invoked for the period post 2012 does not exist at all and, therefore, there is no question of any ambiguity. Even if there is an ambiguity, it should go in favour of the assessee. As the demand for both the aforesaid period could not have been confirmed, the impugned order dated 28.07.2015 deserves to be set aside and is set aside - Appeal allowed.

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• Central Excise

• 2022 (10) TMI 958
  Area Based Exemption - Relevant date for commencement of commercial production - the date of commencement of commercial production should be treated as 01.01.2006 in terms of the notification dated 10.06.2003 as contended by the Department or it should be treated as 12.06.2006 as contended by M/s. Troikaa Pharmaceuticals (the respondent)? - HELD THAT:- A categorical finding has been recorded by the Commissioner (Appeals) that the ingredients to manufacture the tablets were received by the respondent on 05.06.2016. This finding has not been assailed in the appeal. The date of commercial production, therefore, cannot be before 05.06.2006. The EM also records the date of commencement of commercial production as 12.06.2006. The dates of the two records MFR and BMR as 01.06.2006 is contained in the BPR dated 12.06.2006 of the tablet by bifosa. This was the first batch produced by the respondent on 12.06.2006. The contention of the Department that the date of commercial production should, therefore, be treated as 01.06.2006 and not 12.06.2006 is incorrect as both these documents are prepared as per the standard operating procedure of good practices followed by the respondent which is also prescribed under the Drugs and Cosmetic Rules. There is no infirmity in the impugned order - The appeal is, accordingly, dismissed.

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• 2022 (10) TMI 957
  Wrongful availment of CENVAT Credit - recovery of credit alongwith interest and penalty - import of non alloy copper coated wire of M.S/non alloy solid wire/welding wire and are carrying out processes like cutting, rewinding, branding, testing and repacking - process amounting of manufacture or not - HELD THAT:- A part of the imported goods has been used for manufacture of the goods cleared on payment of duty and duly reflected in the ER-1 returns filed. The remaining imported goods which were available in stock as such or contained in finished goods have been allowed to be traded by the Revenue. A detailed calculation needs to be made by the lower authorities to determine how much of the credit amounting to Rs.3,08,58,313/- pertained to the inputs which were used by the appellants for manufacture and clearance of the dutiable goods. To that extent, the amount reversed needs to be restored to the appellants. For the purpose of this computation, the matter needs to be remanded back to the original authority. It is made clear that Section 142(3) of the CGST Act has to be followed strictly. The concerned officer should consider granting cash refund of any amount due to the appellants - the appeals are partly allowed and the matter remanded back to the original authority.

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• CST, VAT & Sales Tax

• 2022 (10) TMI 956
  Levy of additional sales tax under the provisions of Section 2(a) of the Tamil Nadu Additional Sales Tax Act, 1970 - amendment to Section 2 of the Tamil Nadu Additional Sales Tax Act, 1970 vide amendment in the year 1996, w.e.f. 01.08.1996 - HELD THAT:- In the case of THE STATE OF TAMIL NADU, REP. BY THE JOINT COMMISSIONER (CT) , COIMBATORE VERSUS TVL. BANNARI AMMAN SUGARS LIMITED [ 2018 (1) TMI 1698 - MADRAS HIGH COURT] , though it has been concluded that, the Sales Tax Appellate Tribunal has rightly held that, additional sales tax cannot be levied, since the taxable turnover for the whole year was determined as Rs.43,03,53,904/-, which is below Rs.100 crores in a year, there is no discussion as to why the other two decisions rendered in the cases of PHILIPS INDIA LIMITED VERSUS ASSISTANT COMMISSIONER (CT), FAST TRACT ASSESSMENT CIRCLE II, AND OTHERS [ 2004 (5) TMI 538 - MADRAS HIGH COURT] National Time Company [ 2010 (7) TMI 842 - MADRAS HIGH COURT ] stand dissented. The case remanded back to the original Authority to reconsider the demand of additional sales tax under the provisions of the Tamilnadu Additional Sales Tax Act, 1970 - the Respondent Authority are directed to complete the reassessment and pass appropriate orders within a period of three months from the date of receipt of a copy of this order.

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• 2022 (10) TMI 955
  Cancellation of the Registration Certificate of petitioner - cancelled on the premise that the Petitioner has failed to file Goods and Services Tax monthly returns for a continuous period of six months - Certificate was cancelled with effect from 04.02.2020 in view of Section 29 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- This Court has been consistently following the directions issued in the case of TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR [ 2022 (2) TMI 933 - MADRAS HIGH COURT ] and the Revenue/Department has also accepted the said view as evident from the fact that no appeal has been filed in any of the matters, this Court intends to follow the above order of this Court. This Court feels that the benefit extended by this Court in the earlier orders referred in Suguna Cutpiece Centre s case , may be extended to the Petitioner - Petition disposed off.

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• 2022 (10) TMI 954
  Maintainability of appeal - requirement of pre-deposit - whether the tribunal was justified in law requiring the full amount of tax to be deposited towards pre-deposit? - Section 78 of the Gujarat Value Added Tax Act, 2003 - HELD THAT:- The orders regarding pre-deposit and the extent to which the tribunal may require the assessee to make such pre-deposit, are the issues in the realm of discretion of the tribunal to be exercised subject to considerations based on the facts of each case and the prima facie view of the merits emerging from the record. The observations of the tribunal satisfies the said requirements to exercise the discretion whereby it thought it fit to direct pre-deposit to the extent of 100%. This court would not substitute its own reasons and for that matter the discretion validly exercised as above by the tribunal - the present Appeal does not raises question of law much less substantial question of law. Appeal dismissed.

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• Law of Competition

• 2022 (10) TMI 953
  Anti-competitive agreements - abuse of dominant position in the markets for licensable mobile OS for smart mobile devices and app stores for Android OS - the Commission agrees with the findings of the DG and holds that all licensable smart mobile device OSs are part of the same relevant market - consideration of relevant markets - alleged contravention of various provisions of Section 4 of Competition Act, 2002 - HELD THAT:- No doubt, the DG has been vested with the limited powers of Civil Court as also the power to conduct search and seizure operations, however, it is for the DG to exercise such powers in the manner as deemed appropriate in the facts and circumstances of each case. No party, much less a party under investigation, can dictate as to the mode and manner of investigation to be undertaken by the DG. As previously pointed out, the role of DG during investigation is essentially fact finding in nature by collecting documents and evidence and to present its recommendations to the Commission based on their analysis. While conducting the investigation, it is neither requirement of the law nor any obligation of the investigator to consult each and every affected or interested participant. On careful perusal of the Investigation Report, the Commission is satisfied that the DG has contacted a cross-section of stakeholders including third parties and in this view of the matter, the allegations, and suggestions of bias in investigation as attributed by Google to the DG lack merit and are rejected. Having perused the investigation report, the Commission is satisfied that while analyzing the allegations and reaching its recommendations, the DG has not relied upon such orders and the same are based upon the documents and evidence gathered during the course of investigation. The reference to the prima facie order as made by the DG in the Investigation Report is only to understand the scope of investigation and such reference, by no stretch of arguments, be construed as swaying the independence of the recommendations made by the DG. In fact, if the argument of Google is taken to its logical conclusion, there can be no independent adjudication by the authority also (in this case, the Commission) after making a prima facie opinion while ordering investigation. The antitrust investigation is complex in nature and require greater understanding of the subject and so long as the recommendations are made in an independent manner based on material and evidence gathered during investigation, mere reference to such reports for the limited purpose of understanding the issues in itself cannot be said to sway, much less vitiate, the conclusions arrived at by the DG - the Commission is afraid that the submissions of Google are contrary to the express provisions of General Regulations. Unlike civil courts where cross-examination is a matter of course, cross-examination before the DG or the Commission is highly circumscribed by regulatory framework nd can be granted on fulfilling requirements of Regulation 41(5) of the General Regulations. It is, thus, evident that the Commission or the DG has the discretion to take evidence either by way of Affidavit or by directing the parties to lead oral evidence in the matter. However, if the Commission or the DG, as the case may be, directs evidence by a party to be led by way of oral submissions, the Commission or the DG, as the case may be, if considers necessary or expedient, may grant an opportunity to the other party or parties, as the case may be, to cross-examine the person giving the evidence. Thus, it is only when the evidence is directed to be led by way of oral submissions that the Commission or the DG may grant an opportunity to the other party or parties to cross-examine the person giving the evidence, if considered necessary or expedient. Hence, even when the evidence is led by oral submissions, the Commission or the DG retains the discretion to consider the request for grant of opportunity to the other party or parties to cross-examine the person giving the evidence if the same is considered necessary or expedient. The Commission delineates the following relevant market(s) in the present matter: a. Market for licensable OS for smart mobile devices in India b. Market for app stores for Android smart mobile OS in India c. Market for apps facilitating payment through UPI in India The Commission holds Google to be dominant in in the first two relevant markets i.e., market for licensable OS for smart mobile devices in India and market for app store for Android smart mobile OS in India. Further, Google is also found to have abused its dominant position in contravention of the provisions of Section 4(2)(a)(i), Section 4(2)(a)(ii), Section 4(2)(b)(ii), Section 4(2)(c) and Section 4(2)(e) of the Act, as already discussed in the earlier part of this order. In terms of the provisions of Section 27 of the Act, the Commission hereby directs Google to cease and desist from indulging in anti-competitive practices that have been found to be in contravention of the provisions of Section 4 of the Act - Google, however, is allowed three months from the date of receipt of this order to implement necessary changes in its practices and/or modify the applicable agreements/ policies and to submit a compliance report to the Commission in this regard. Levy of penalty - HELD THAT:- The Commission takes a serious note of such glaring inconsistencies and wide disclaimers in presenting various data points by Google. The Commission is constrained to observe that despite commanding enormous resources, Google has failed to provide the data in the manner sought by the Commission despite grant of sufficient time, as sought by it. Be that as it may, in the interest of justice and with an intent of ensuring necessary market correction at the earliest, the Commission decides to proceed to quantify the provisional monetary penalties on the basis of the data presented by Google. Accordingly, the Commission decides to take the revenue data of Google s business operations in India, as submitted by it vide submission dated 06.10.2022, as relevant turnover for computation of quantum of penalty. Determination of an appropriate amount of penalty to be imposed - HELD THAT:- The Commission is of the view that the ends of justice would be met if a penalty of 7 % of the relevant turnover. Accordingly, the Commission imposes a penalty on Google @ 7 % of its average of the average of relevant turnover for the last three preceding financial years 2018-19, 2019-20 and 2020-21, as provided by Google - the Commission imposes a penalty of Rs. 936.44 crore upon Google for violating Section 4 of the Act. Google is directed to deposit the penalty amount within 60 days of the receipt of this order. The Commission deems it appropriate to deal with the request of the parties seeking confidentiality over certain documents / data / information filed by them under Regulation 35 of the General Regulations, 2009 (as amended). Considering the grounds given by the parties for the grant of confidential treatment, the Commission grants confidentiality to such documents / data / information in terms of Regulation 35 of the General Regulations, 2009, subject to Section 57 of the Act, for a period of three years from the passing of this order. Application disposed off.

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