Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 4, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
GST
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Delayed appeal dismissed for lack of justifiable cause; Courts bound by statutory limitation periods.
Appeal filed beyond limitation period without sufficient cause for condonation of delay. Extraordinary jurisdiction cannot be invoked to interfere with orders passed after proper show cause notice. Apex Court precedent establishes no power to condone delay after expiry of statutory limitation period for appeals. Petition dismissed due to lack of merits and jurisdictional constraints.
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GST refund claim for March 2018 allowed due to Covid extension.
Refund application for unutilized Input Tax Credit for March 2018 was filed on 27.05.2020, beyond the two-year limitation period ending on 20.04.2020. However, due to exclusion of period from 01.03.2020 to 28.02.2022 from limitation, petitioner is entitled to benefit. Competent authority directed to reconsider refund claim by applying mind and passing appropriate order following Circular dated 05.07.2022. Petition disposed of.
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Deceased Taxpayer's SCN Annulled: Sole Proprietor's Identity Inseparable from Business.
The court held that the show cause notice (SCN) issued u/s 74 of the Central Goods and Services Tax Act, 2017 to a deceased sole proprietor is non-est in law. A sole proprietorship concern's identity is not distinct from the sole proprietor. Since the sole proprietor, Mr. Surender Kumar Gupta of M/s S.K. Gupta & Co., has expired, the SCN was issued to a non-existent person. While the legal representative or any person carrying on the deceased taxpayer's business is liable to pay the dues, the SCN should have been issued to them, not the deceased taxpayer. Relying on the Madras High Court's decision in Unnikrishnan R case, the court set aside the impugned SCN but clarified that the respondents can issue a notice to the legal representative or any other person carrying on the deceased taxpayer's business.
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Quashing summary GST order for lack of details violates natural justice.
The High Court quashed the summary order issued under the GST Act without a detailed order, finding it a violation of principles of natural justice. The court observed that the summary order merely mentioned the order number, tax period, financial year, issues involved, description of goods, and demand details, but lacked a detailed order supporting it. Consequently, the court set aside the summary order, the consequent recovery action, and the attachment of the petitioner's bank accounts. The respondents were directed to pass an appropriate order for lifting the attachment of the petitioner's bank accounts forthwith.
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GST registration wrongly cancelled for delay in tax payment despite lack of valid grounds.
The High Court held that the cancellation of the petitioner's GST registration with retrospective effect was improper. The show cause notice (SCN) cited non-payment of tax, interest or penalty within three months as the reason, which is not a valid ground u/s 29 of the CGST Act for cancellation. The impugned order failed to reflect any reason for cancellation and indicated no amount payable by the petitioner. Furthermore, the order violated principles of natural justice as no date or time was mentioned for the personal hearing despite being called for in the SCN. Consequently, the petitioner was not afforded an opportunity to be heard. The High Court set aside the impugned order cancelling the petitioner's GST registration.
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Cotton seed oil cake supplier gets GST exemption as cattle feed.
The petitioner was exempt from paying GST on the supply of cotton seed oil cake under Entry No. 102 of Notification No. 2/2017, as it qualifies as cattle feed. The pre-GST VAT regime also exempted cotton seed oil cake as cattle feed. The respondent Authority's objections, based on the Audit Party's findings that the petitioner could not prove the purchasers' status, are irrelevant as the end-use as cattle feed is undisputed. The Supreme Court has held that the end-use of a product by the purchaser is not a concern for the assessee in classifying goods. Therefore, the petitioner is entitled to the exemption for supplying cotton seed oil cake as cattle feed under the GST Act. The High Court quashed the impugned orders denying the exemption and allowed the petition.
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Annuity tax dispute: When does GST liability arise for road maintenance? Court favors tax payment timeline in CBIC circular.
GST levy on annuity received by petitioner - dispute on timing of liability. Authorities viewed liability arising from concession period commencement date, considering annuity for road maintenance. Petitioner disagreed. CBIC circular clarified tax payable on invoice issuance or annuity receipt, whichever earlier. HC set aside orders, directing authorities to collect tax per CBIC circular.
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High Court quashes penalty for discrepancies in transporting goods due to non-consideration of justifications.
The High Court held that the issues raised by the petitioner regarding the reasons for transporting goods in a different vehicle and the expiry of the e-way bill should have been considered by the competent authorities before imposing a penalty u/s 129 of the CGST/SGST Acts. If there was no attempt to evade tax and the discrepancies were beyond the petitioner's control, this should have been considered by the original and Appellate Authorities. Although the petitioner may be justified in challenging the Appellate Authority's order due to the non-constitution of the Tribunal u/s 112, the High Court may not entertain the challenge in a writ petition under Article 226 since adjudication involves disputed questions of fact. The appeal filed by the petitioner is restored to the Appellate Authority, who shall pass fresh orders after affording a further opportunity of hearing to the petitioner. The order is quashed.
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Appeal dismissed due to delay doesn't bar High Court jurisdiction to review original order.
The High Court set aside the impugned order of adjudication and remitted the matter back to the respondent for fresh consideration. The appeal was dismissed on the ground of time limitation. However, the Court held that if an appeal is dismissed on the ground of delay as barred by limitation, it is not considered an appeal in the eyes of law, and there would be no merger of the original order into the order of the Appellate Authority. Therefore, the High Court can exercise its jurisdiction under Articles 226 and 227 of the Constitution. The mere dismissal of the appeal by the Appellate Authority on the ground of limitation does not preclude the High Court from exercising its jurisdiction. Consequently, the impugned order was set aside, and the matter was remanded for fresh consideration.
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High Court upholds rejecting Input Tax Credit for failure to prove actual goods movement, purchaser liable.
The High Court upheld the validity of the impugned order u/s 107(11) of the Karnataka Goods and Services Act, 2017. The petitioner's contention that the adjudicating authority erred by not taking action against the supplier and ignoring tax invoices and tax payments was rejected. The court held that the purchasing dealer must prove the actual physical movement of goods unless purchased from respective dealers. Failure to establish this aspect justifies rejection of Input Tax Credit (ITC) claims by the assessing officer, as per the Supreme Court's judgment in The State of Karnataka v. M/s Ecom Gill Coffee Trading Private Limited. Although the petitioner produced documents showing the supplier's existence and business continuity, the vehicles transporting the goods were not traced and appeared fraudulent. Section 16(2)(c)(d) was applicable, and the burden of proving ITC eligibility lies on the purchaser u/s 155. The revenue can recover tax from the purchaser if the supplier failed to pay. The appellate authority rightly confirmed the order rejecting the petitioner's ITC claim. The High Court found no malice, arbitrariness, or illegality in the order and dismissed the writ petition.
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Reversal of ITC and opting for lower GST rate resolves tax liability dispute for real estate project.
The Respondent opted for GST at 5% without ITC as per Notification No. 03/2019-Central Tax (Rate) and reversed all available ITC pertaining to the financial years 2017-2018 and 2018-2019 from April 2019 onwards. The Respondent also reversed ITC availed due to delay in payments to suppliers beyond 180 days and excess ITC availed wrongly, resulting in negative credit during the post-GST period. The Respondent did not retain any ITC related to the 'Ireo Waterfront' project and reversed all ineligible ITC. Post-GST, no additional ITC benefit accrued to the Respondent for the 'Ireo Waterfront' project. Consequently, the provisions of Section 171(1) of the CGST Act, 2017 are not attracted, and the proceedings were dropped.
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Cinema Hall Profiteered Rs. 4.65L by Not Passing GST Rate Cut; Ordered to Refund with Interest.
The respondent resorted to profiteering by not passing on the benefit of GST rate reduction on cinema tickets, realizing an additional Rs. 4,65,549 from recipients. As per Rule 133, the respondent is directed to reduce ticket prices commensurate with the tax cut, deposit the profiteered amount of Rs. 4,65,549 plus 18% interest equally in central and state consumer welfare funds within 3 months. The respondent violated Section 171(1) by denying rate cut benefit, but penalty u/s 171(3A) cannot be imposed retrospectively. The jurisdictional GST commissioners are directed to monitor compliance and report to the commission within 4 months.
Income Tax
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Revised guidelines for admitting refund claims and carrying forward losses in Income Tax.
This order authorizes Income-tax authorities to admit applications or claims for refund and carry forward of loss u/s 119(2)(b) of the Income-tax Act, 1961. It supersedes previous instructions and provides comprehensive guidelines on conditions for condonation and procedures. Principal Commissioners/Commissioners are vested with powers for claims up to Rs. 1 crore, Chief Commissioners for claims between Rs. 1-3 crores, and Principal Chief Commissioners for claims exceeding Rs. 3 crores per assessment year. No application beyond five years from the assessment year's end will be entertained. Authorities must ensure genuine hardship and reasonable cause for delay. Court proceedings' duration is excluded from the five-year period if the application is filed within six months of the order. Supplementary refund claims are admissible if conditions are met, but without interest. The order covers pending applications and allows the Board to examine grievances and issue directions.
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Tax Prosecution Quashed Due to Lack of Updated Authorization After Self-Assessment Payment.
Criminal complaint filed u/s 200 of Cr.P.C. for the offence punishable u/s 276C(2) read with Section 278B of the Income Tax Act. Petitioners failed to deposit assessed tax. Petitioners deposited tax liability about a year ago, prior to filing of complaint. Complaint lacks mention of such deposits. Petitioners deposited self-assessment tax before complaint filing and informed department via letter dated 28.03.2018. Complainant should have obtained fresh authorization regarding delayed interest and penalty only. No response from department to petitioners' request for waiver of interest and penalty in letter dated 28.03.2018. Authorization obtained in 2017 no longer valid after petitioners paid self-assessment tax in 2017-2018. Department needed fresh authorization for prosecution regarding interest and penalty. No wilful default in making assessed tax payment, applying ratio in Unique Trading Company case. Petitioners filed returns, declared tax liability, requested installments, indicating no wilful default. Amount deposited in 2017-2018, while complaint filed in 2019 without disclosing payments. Prosecution termed abuse of process of law. Complaint quashed and set aside by exercising extraordinary powers u/s 482 of Cr.P.C.
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Appellate tribunal upholds partial disallowance for bogus purchases via sham transactions.
The case pertains to the estimation of income and disallowance of bogus purchases. The purchases were deemed sham transactions fabricated through bogus paper concerns engaged in providing accommodation entries. The Income Tax Appellate Tribunal (ITAT) partly allowed the Revenue's appeal, holding that for bogus purchases, the addition at the rate of 6% of the bogus purchases was fair and reasonable. The High Court upheld the ITAT's view, stating that the conclusion was based on the material and analysis of facts and figures available. The court found no substantial questions of law arising from the ITAT's decision to reduce the disallowance from 12.5% to 6% for the bogus purchases.
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Taxpayer wins right to carry forward MAT credit for DTVSV scheme refund calculation.
The petitioner is entitled to carry forward the reduced Minimum Alternate Tax (MAT) Credit for payment of taxes under the Direct Tax Vivad se Vishwas (DTVSV) Scheme. The respondent, while calculating the amount payable in Form 3 regarding tax arrears and amount payable under DTVSV, failed to consider the Assessing Officer's order permitting the petitioner to carry forward the MAT Credit. The High Court quashed Form 3 and the rectification order, remanding the matter to the respondent to recalculate the entitlement of refund in accordance with the Scheme and Rules, applying Rule 10, and considering the Assessing Officer's order u/s 154 giving effect to the CIT(A) order regarding the MAT Credit carry forward.
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High Court backs Tribunal's decision to overlook delay in filing Form 10B, rejects Revenue's reliance on Wipro judgment.
The High Court upheld the Tribunal's decision to condone the delay in filing Form 10B by the assessee, rejecting the Revenue's reliance on the Supreme Court's ruling in M/s Wipro Limited. The Court distinguished the present case from Wipro, where the declaration u/s 10B(8) was filed belatedly with the revised return. Here, the assessee had electronically filed Form 10B during the appellate proceedings, and the delay was rightly condoned by the CIT(A) and Tribunal. The Court endorsed an equitable, balanced, and judicious approach in such cases, following its earlier decisions in Sarvodaya Charitable Trust and Social Security Scheme of GICEA. The Revenue's appeal was dismissed as no substantial question of law arose.
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Scrutinizing Futility: When Reassessment Meets Minimum Tax.
The High Court held that merely because the income u/s 115JB is more than the proposed addition regarding income escaping assessment as stated in the reasons recorded, once the entire assessment is reopened, the Assessing Officer can examine other aspects. Therefore, it cannot be said that the reopening exercise would be futile. The Assessing Officer, after considering information about share price fluctuations of Kushal Ltd. on Money Control, concluded that the assessee had indulged in generating non-genuine gains by trading in Kushal Script on BSE during the year under consideration. However, even if the proposed addition is made for income escaping assessment, there would not be any taxable income after the proposed addition, considering the income taxed u/s 115JB. Consequently, the High Court ruled that no fruitful purpose would be served by continuing the reassessment proceedings.
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Improper reopening of assessment based on unverified info, procedural lapses. AO failed to follow due process.
The case pertains to the assumption of jurisdiction u/ss 147/148 read with section 151 of the Income Tax Act. The Assessing Officer (AO) wrongly assumed jurisdiction u/s 147 instead of the statutory path available u/s 153C. The case was reopened beyond the period of four years based on information received from the Investigation Wing, New Delhi, alleging bogus Long-Term Capital Gains (LTCG) and addition u/s 68 on account of share capital treated as an accommodation entry. The Tribunal held that the AO's reluctance to initiate reopening proceedings based on generalized and uncorroborated information, and the issuance of notice u/s 148 on the last day, implying compulsion to save on limitation, demonstrated a lack of independent inquiry and application of mind. The financial year was wrongly mentioned, approval was granted by the PCIT based on an incomplete Performa, and the satisfaction of the Additional CIT that the 'case requires verification' did not meet the requirement of 'chargeable income has escaped assessment' u/s 148. The Tribunal found overwhelming reasons that the reasons recorded and approval granted u/s 151 did not meet legal requirements. The issuance of notice u/s 148 based on cryptic reasons and mechanical approval by the Pr.CIT u/s 151 did not pass.
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Tenant's mere right to stay doesn't constitute property transfer u/s 56(2)(x).
The assessee, a tenant paying monthly rent of Rs. 700, acquired only the right to stay or modify the property, without any ownership rights, thus not attracting provisions of Section 56(2)(x) of the Act. The transfer of property is governed by the Transfer of Property Act, 1882, and the revenue failed to provide evidence of such transfer as per the Act. The ITAT relied on decisions pertaining to Section 50C and the orders in Greenfield Hotels & Estates (P.) Ltd. and The Bombay Drug Distributors, concluding that the addition based on tenancy rights was unjustified. Consequently, the ITAT set aside the impugned appeal order and deleted the addition, allowing the assessee's appeal.
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Depreciation claim for prior period allowed; TDS non-examination remanded by tribunal in tax assessment case.
Assessee, a company paying taxes at fixed rate, filed claim for prior period depreciation. ITAT held allowance of prior period depreciation claim was tax neutral exercise, not resulting in revenue loss. Assessee entitled to claim unabsorbed depreciation of preceding year as depreciation of succeeding year u/s 32(2). Revisionary jurisdiction u/s 263 unwarranted as assessment order not erroneous causing prejudice to revenue. However, ITAT confirmed PCIT's order regarding non-examination of TDS on rent expenses by AO u/s 40(a)(ia), holding assessment order erroneous on this count. Appeal partly allowed.
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Cash book redrawing, credit card additions upheld; notice validity confirmed despite non-communication of case transfer.
Proceedings valid despite non-communication of case transfer as section 127 not applicable. Notice u/s 143(2) not time-barred. CIT(A) not required to decide validity of revised return as assessment held valid. Cash book redrawing upheld based on Tribunal's earlier decisions for assessee. Credit card payment addition confirmed due to lack of substantiating evidence, distinguishing cited case laws. Assessee's appeal dismissed.
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Foreign company's share transfer not taxable in India as immovable property value below 50% & no controlling interest.
The Income Tax Appellate Tribunal (ITAT) examined the taxability of capital gains arising from the transfer of shares of a foreign company under Article 14(4) of the India-Spain Double Taxation Avoidance Agreement (DTAA). The revenue contended that the company's immovable property exceeded 50% of its total assets, making the gains taxable in India. However, the ITAT found that the value of immovable property did not exceed 50% of the total assets based on book value or fair market value. Additionally, the assessee held only 9.65% shares indirectly, which cannot be considered a controlling interest. The ITAT held that Article 14(4) of the DTAA cannot be applied in this case, and the capital gains arising from the transfer of shares cannot be taxed in India. Consequently, the ITAT directed the Assessing Officer to delete the addition made in this regard and allowed the assessee's appeal.
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Trust's cash deposits taxability due to lack of 12A reg. & evidence for hostel receipts.
Denial of exemption u/s 10(23C)(iiiad), addition of unexplained cash credits u/s 69A. Registration granted u/s 12AA from 23-02-2019 indicating trust not exclusively engaged in education. Assessing Officer treated trust as Association of Persons, rendering income from cash deposits taxable due to lack of registration u/s 12A. Assessee's contention regarding cash deposits relating to hostel receipts from third parties not substantiated by documentary evidence or formal agreement. Income from cash deposits to be considered in hands of trust in absence of supporting documentation. Commissioner of Income Tax (Appeals) directed to re-examine classification as Association of Persons and tax implications, ensuring income without third-party attribution is taxed in hands of trust. Order of Commissioner of Income Tax (Appeals) set aside, matter remitted for fresh adjudication as per law after considering facts, evidence, and submissions. Appeal allowed for statistical purposes.
Customs
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HC quashes Customs order rejecting conversion of shipping bills to drawback bills; strikes down time limit in Circular 36/2010.
Circular No. 36/2010-Customs dated 23.09.2010 issued under the Customs Act, 1962, specifically para 3(a), was struck down as ultra vires Articles 14 and 19(1)(g) of the Constitution of India and Section 149 of the Customs Act by the Gujarat High Court in Messrs Mahalaxmi Rubtech Ltd. v. Union of India. The petitioner's application for conversion of shipping bills to drawback shipping bills from 01.10.2017 to 31.03.2020 was rejected based on the time limit prescribed in the struck-down para 3(a). The High Court quashed the impugned order dated 19.04.2023 and remanded the matter, directing the respondent to pass an appropriate order to convert the petitioner's shipping bills from 01.10.2017 to 13.03.2020 to drawback shipping bills u/s 149 of the Customs Act, enabling the petitioner to become eligible for duty drawback as per Circular No. 88 of 2017.
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Customs drawback demand: Court halts proceedings, awaits Revisional Authority's decision.
The High Court rejected the application filed by the petitioners u/s 245(2) of the Code of Criminal Procedure, thereby refusing to discharge them and quash the complaint regarding excess drawback amount demand by the Additional Commissioner of Customs. The court held that since the revision filed by the respondent against the original order dated 30.09.2013 is pending consideration before the Revisional Authority, no purpose would be served by allowing the complainant to proceed against the petitioners. However, discharging the accused on the ground that the original order is set aside would deprive the respondent of the right to prosecute based on that order. Consequently, the Special Court for Economic Offences, Bengaluru, was directed to stop further proceedings against the petitioners for the present, with liberty to the respondent to revive the complaint upon final adjudication of the dispute by the Revisional Authority, i.e., the Principal Commissioner RA and Ex-Officio Additional Secretary to the Government of India. The writ petition was disposed of accordingly.
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Arecanut import from Pakistan denied concessional duty due to non-fulfillment of Rules criteria.
The Tribunal examined the issue of availment of concessional rate of duty under Notification No. 68/2012-Cus. dated 31.12.2012 for import of whole arecanut originally from Pakistan. The Commissioner (Appeals) had held that the respondent failed to fulfill the criteria u/r 8 for concessional rate, but allowed the benefit on grounds of non-adherence to procedure for challenging the certificate of origin by the Ministry of Commerce. The Tribunal found that the procedure followed by Revenue was not an issue before the Commissioner (Appeals), who travelled beyond the scope of the order under challenge. Relying on the Supreme Court's decision in Gujarat State Fertilizers Co. v. Collector of Central Excise, the Tribunal set aside the impugned order as bad in law, as the respondent did not challenge the Revenue's authority nor was it an issue during assessment proceedings. Consequently, the Revenue's appeal was allowed.
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Importer correctly declared neurosurgery microscope; Department changed classification later - Tribunal set aside penalty.
The appellant had correctly declared the description of the imported goods as "Surgical Microscope for Neurosurgery - Zeiss OPMI Pentero with accessories" in the Bill of Entry, claiming classification under CTH 90189099 and availing concessional duty benefits. The Department initially accepted the classification but later concluded that the correct classification was CTH 90118000. The Tribunal consistently holds that when the description of goods is correctly disclosed in the Bill of Entry and relevant technical documents, imposition of penalty u/s 114A cannot be sustained. Citing the case of HIKOKI POWER TOOLS INDIA PVT LTD, the Tribunal observed that once the catalogue is submitted during assessment, it is the Department's responsibility to ascertain the appropriate classification. Since the appellant correctly disclosed the description, wrong classification based on that description cannot invoke extended period of limitation. Finding no justification for penalty u/s 114A, the Tribunal modified the order, setting aside the penalty imposed, and disposed of the appeal.
DGFT
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Interest equalisation scheme extended until Dec 2024 with Rs 50L cap on MSMEs for FY24-25.
The Interest Equalisation Scheme (IES) for Pre and Post shipment Rupee Export Credit has been extended for three months beyond 30th September 2024, until 31st December 2024. The extension is granted on the same terms and conditions as the previous extension, with an additional condition that the fiscal benefits for each MSME will be restricted to Rs. 50 Lakhs for the FY 2024-25 until December 2024. MSMEs that have already availed the equalization benefit of Rs. 50 Lakhs or more in 2024-25 until 30th September 2024 will not be eligible for further benefits during the extended period. The extension is valid for three months or until a revised approval is received prior to the lapse of the three-month extension period. Relevant RBI guidelines and notifications should be referred to for further details.
FEMA
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Foreign Exchange Violations: Path to Compounding under FEMA.
This document provides guidance on compounding of contraventions under the Foreign Exchange Management Act (FEMA), 1999. It outlines the process, eligibility criteria, and computation matrix for determining the compounding amount payable for various types of contraventions. Key points: - Certain contraventions related to foreign investment, external commercial borrowings, overseas investment, and branch/liaison offices can be compounded by RBI's Regional Offices. - Applicants must submit a compounding application along with the prescribed fee of Rs. 10,000 plus GST. - Cases involving serious contraventions like money laundering, terror financing, or affecting national sovereignty are not eligible for compounding. - The compounding amount is calculated based on factors such as the sum involved, duration of contravention, undue gains made, and repetitive nature of the contravention. - A detailed computation matrix with formulas is provided for calculating the compounding amount for different types of contraventions. - The compounding authority will pass an order after giving the applicant an opportunity for a personal hearing. - The compounded amount must be paid within 15 days from the date of the compounding order. - Summary information about compounding orders will be hosted on RBI's website. The document also covers procedural aspects like submission of applications, payment modes, and issuance of compounding orders.
IBC
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State Law Protecting Depositors Overrides Central Bankruptcy Code.
The Tamil Nadu Protection of Interests of Depositors Act (TNPID Act), 1997, is a special enactment intended to protect depositors' rights and provide a mechanism for disbursement of assets of the accused, apart from punishing them. The Insolvency and Bankruptcy Code (IBC), 2016, overrides inconsistent provisions in other laws, as per Section 238. However, the Madras High Court held that the TNPID Act's purpose, upheld by the Supreme Court despite marginal encroachment into Central legislations, cannot be ignored. The Court ruled that the NCLT order declaring attachments under the TNPID Act null and void was contrary to settled principles of law. The State's sovereign power and duty to protect public interest through the TNPID Act was reiterated, allowing the petition.
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Personal guarantors defaulted on repayment plan; NCLT/NCLAT upheld premature end of IRP under IBC.
The appellants contended that the insolvency resolution process was not conducted as per the Code and due process was not followed, with bank account details being shared at a belated stage. However, the NCLT held that the appellants failed to comply with the repayment plan conditions and deposit the required amount, constituting a breach under Regulation 20 of the IBBI (Insolvency Resolution Process for Personal Guarantors) Regulations, 2019. The RP was within his rights to submit a report u/s 118(2) of the Code. Initial installment payments cannot excuse subsequent defaults in the repayment schedule. The NCLAT found no apparent factual or legal flaws in the impugned orders declining to recall the orders declaring premature end of the repayment plan and granting liberty to proceed u/s 121 of the Code. The appeal was disposed of.
Indian Laws
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Cheque dishonour led to conviction under NI Act. Witness competent despite SPA. Presumption favoured complainant upon admitted signatures.
Dishonour of cheque constituted legally recoverable debt. Petitioner convicted u/s 138 Negotiable Instruments Act. Complainant's witness, though SPA holder, competent to depose on known facts. Presumption u/s 139 NI Act favoured complainant upon admission of signatures. Onus on petitioner to rebut presumption by proving cheque not issued for legally recoverable debt, which petitioner failed. Petitioner rightly convicted and sentenced by ASJ. HC dismissed revision petition, finding no infirmity in ASJ's judgment.
PMLA
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Laundered proceeds from scheduled crimes are criminal property, including foreign assets. Firms prosecutable for money laundering.
Proceeds of crime encompass any property derived from criminal activity related to scheduled offenses, including property held abroad equivalent to domestic assets. Companies can be prosecuted for money laundering offenses irrespective of individuals' prosecution u/s 70 of PMLA. Provisional attachment orders need not be adjudicated in petitions filed u/s 482 CrPC. Prima facie case established for prosecuting individuals and companies under PMLA. Petitioners must establish defense based on merits and evidence. Petition dismissed.
SEBI
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Tightening Index Options Rules for Investor Safety and Market Stability.
This circular outlines measures to strengthen the equity index derivatives framework for increased investor protection and market stability. Key points include mandating upfront collection of option premiums from buyers, removing calendar spread treatment on expiry days, introducing intraday monitoring of position limits, increasing minimum contract size to Rs. 15-20 lakhs for new index derivatives, allowing only one weekly expiry index derivative per exchange, and levying additional extreme loss margin of 2% on short options expiring that day. These changes aim to address risks from excessive speculative trading in index options nearing expiry, ensure suitability for investors, and promote basic risk management practices. Implementation timelines range from November 2024 to April 2025 for different measures.
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Here is a concise tweet-like title representing the legal matter: SEBI revises stress testing for equity derivatives settlement funds; new methodologies, clearing corp categorization.
This circular outlines SEBI's revised stress testing framework for determining the Minimum Required Corpus (MRC) of the Core Settlement Guarantee Fund (Core SGF) in the equity derivatives segment. Key aspects include introducing new stress testing methodologies like Stressed VaR, Filtered Historic Simulation, and Factor Model, in addition to existing hypothetical and historical scenarios. Clearing Corporations (CCs) are categorized into two groups based on market share for applying cover-n standards. Provisions allow one-time inter-segment transfer of funds from equity cash to derivatives segment and staggered contributions to meet additional MRC requirements. CCs must formulate joint Standard Operating Procedures and implement necessary systems for compliance within stipulated timelines.
Service Tax
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Refund claims for unutilized Krishi Kalyan Cess credits rejected under GST transition rules.
Rejection of cash refund claims for Krishi Kalyan Cess under the GST regime. The key points are: The provisions for transition under the GST Act allow certain eligible credits to be carried forward or refunded, but do not extend to ineligible duties like the Krishi Kalyan Cess. The appellants were not entitled to claim refund of unutilized cenvat credit under the existing rules. Section 142(3) read with Section 174 of the GST Act does not entitle them to cash refund of the Cess. The Commissioner (Appeals) order rejecting the refund claim was upheld by the CESTAT (Appellate Tribunal).
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Appellant allowed to take distributed CENVAT credit from ISD on intellectual property service.
The appellant availed CENVAT credit on intellectual property service received from the Input Service Distributor (ISD), TSL Kolkata. The Revenue denied the credit to the appellant despite not disputing its availment by TSL Kolkata. CESTAT held that since TSL Kolkata's credit availment was undisputed, the appellant was entitled to take the distributed credit based on invoices issued by ISD. Reversal of credit by appellant was not required. The impugned order denying credit was set aside, and the appeal was allowed.
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Circulars / Instructions / Orders
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Case Laws:
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GST
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2024 (10) TMI 136
Demand of penalty at the higher rate being 100 percent of the value of the goods under Section 129(1)(b) of the U.P. G.S.T. Act, 2017 - petitioner is opposed to quantum of penalty and not at the stage of detention of goods - HELD THAT:- On query made, learned counsel for the revenue has made a fair statement, it cannot be doubted, the petitioner is the bonafide owner of the goods. The penalty order is modified to the extent penalty imposed. Quantum is reduced in terms of provisions of Section 129(1)(a) of the Act i.e. equal to twice the amount of tax imposed on the value of the goods, as estimated by the revenue authorities - Petition disposed off.
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2024 (10) TMI 135
Cancellation of GST registration of the Petitioner-Company under the Goa GST Act - order does not give any reason whatsoever for cancellation of the GST registration of the Petitioner - violation of principles of natural justice - HELD THAT:- The impugned orders cancelling the registration of the Petitioner-Company cannot be sustained, even for a minute for the simple reason that apart from just mentioning the show cause notice, the reply submitted by the Petitioner-Company to the show cause notice and also further stating that the officer concerned had examined the reply, no other reason has been given in the impugned order dated 07/10/2022. Such an approach adopted by the Assistant Tax Officer while passing the impugned order, cannot be appreciated. Even while exercising the administrative functions, any officer or an authority is under legal obligation to give some reasons for arriving at a particular conclusion in a situation where the party concerned is likely to suffer adversely by the decision so taken by the authority or the officer - the Assistant Tax Officer has to pass orders exercising certain quasi-judicial functions under various tax laws, and hence, it is expected from him, even in normal course, to always pass a reasoned and speaking order. As it is stated, the reasons are the soul of a decision or order and in absence thereof, the order or the decision cannot be justified. The impugned orders are quashed - petition allowed.
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2024 (10) TMI 134
Condonation of delay in filing the appeal - invocation of extra ordinary jurisdiction of this court - HELD THAT:- It is not in dispute that after issuance of show cause notice, impugned order dated 22.03.2022 was passed against which, the appeal should have been preferred within limitation, but the appeal has been preferred beyond the limitation - Further, before this Court also, petitioner has failed to give any good ground for condonation of delay, therefore, this Court, under extra ordinary jurisdiction, cannot interfere with the impugned orders. The Apex Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] has specifically held ' there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days' period.' Thus, no interference is called for in the impugned orders - petition dismissed.
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2024 (10) TMI 133
Cancellation of GST registration of petitioner - non-filing of returns u/s 39 of the Central Goods and Services Tax Act, 2017 - cancellation of registration without assigning any reason - violation of principles of natural justice - HELD THAT:-A perusal of the impugned order dated 12.09.2023 would show that the said order is passed by a quasi-judicial authority. The effect of the said order would be that in absence of a registration, the Petitioner cannot carry out his business. Therefore, the effect of the said impugned order would entail civil consequences. In the backdrop of the above, if this Court peruses the order, it is shocking that the Respondent No. 3 had cancelled the registration without assigning any reason. This clearly shows a total non-application of mind. Accordingly, this Court therefore sets aside the said impugned order dated 12.09.2023 thereby restoring the status back to the date on which the Show Cause notice dated 08.08.2023 was issued. Petition disposed off.
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2024 (10) TMI 132
Refund of unutilised Input Tax Credit for the month of March 2018 - barred by time limitation or not - HELD THAT:- In terms of the amendment in the explanation to Rule 54, relevant date for filing the refund application is provided to be two years from the due date of furnishing GSTR 3B returns. In other words, the last date for filing refund application in the month of March 2018 would be 20.04.2020 being two years from the due date of furnishing GSTR 3B returns. In the present case, the refund application was filed on 27.05.2020, however in view of the above notification, in particular clause (iii) thereof, the period from 01.03.2020 to 28.02.2022 was excluded from the limitation period. The petitioner would be entitled to the benefit of the same. The competent authority is directed to reconsider the claim of refund of the petitioner by applying its mind and pass appropriate order following the Circular dated 05.07.2022 - Petition disposed off.
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2024 (10) TMI 131
Benefit of N/N. 11/2017-Central Tax dated 28-06-2017 where the construction of building for Government entities is entitled to a lower rate of tax - It is submitted that the notification has not been taken into consideration - violation of principles of natural justice - HELD THAT:- The petitioner may approach the authority which issued Ext.P3 order by filing an application for rectification under Section 161 of the CGST Act. Since the writ petition was pending in this court from 20-05-2024, it is directed that if the petitioner where to file such rectification petition if so advised within a period of 10 days from the date of receipt of a certified copy of this judgment, the period from the date of Ext.P3 till the date of filing the application will stand excluded for the purpose of determining any period of limitation within which the application under Section 161 of the CGST Act had to be filed on behalf of the petitioner.
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2024 (10) TMI 130
Challenge to SCN issued u/s 74 of the Central Goods and Services Tax Act, 2017 - respondents submits that the petitioner has since been carrying on the business of her deceased husband and therefore, in terms of Section 93 of the CGST Act, the respondents are entitled to initiate the proceedings for recovery of any amount due under the relevant statute from the said concern - HELD THAT:- It is settled law that the identity of the sole proprietorship concern is not different from that of a sole proprietor. In the present case, a sole proprietor of the concern M/s S.K. Gupta Co. Mr Surender Kumar Gupta, has since expired and therefore, it is relevant in fact, that the impugned SCN has been issued to a non-existent person. Undeniably, in a case where the person is liable to pay tax, interest and/or penalty, has expired and the business is carried on by the taxpayer s legal representative or any other person after his demise, the said legal representative or such other person is liable to pay the due, interest or penalty as payable by the deceased taxpayer. However, the show cause notice for recovery of any such amount is required to be issued to the legal representative or such other person, who is carrying on the business of the deceased taxpayer. In the present case, impugned SCN has not been issued to the legal representative of the deceased taxpayer but to the deceased taxpayer. In UNNIKRISHNAN R, SUJATHA R, NALINAKSHI AMMA VERSUS THE UNION OF INDIA, THE COMMISSIONER OF COMMERCIAL TAXES, THE STATE TAX OFFICER, KUZHITHURAI [ 2024 (7) TMI 606 - MADRAS HIGH COURT] the Madras High Court has held ' The order that has been passed against the dead person is non-est in law. If the petitioner is carrying on the business of the deceased person, then, the remedy is available to the Department to proceed against the petitioner under Section 93 of the TNGST Act, 2017. It appears to be that the petitioner is not carrying on the business of the deceased person.' The impugned SCN is set aside. It is clarified that, this order will not preclude the respondents from issuing a notice to the legal representative or any other person, if it is found that the business of the deceased taxpayer is being carried on by the deceased taxpayer s legal representative or such other person - Petition disposed off.
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2024 (10) TMI 129
Violation of principles of natural justice - Challenge to summary order issued under GST Act without a detailed order - Attachment of the bank accounts - HELD THAT:- On perusal of the summary order dated 06.01.2020 at Annexure A to the petition it only says the order No. b612, tax period order dated 06.01.2020, financial year : 2019/20 and tax period :01.07.2017 to 31.03.2019 and issues involved is shown as DRC-1 and description of goods is HSN 72042190 and description shown is scrap and the details of demand is also mentioned having total of Rs. 2,16,14,681/-. On perusal of the above summary of the order, again a query was raised to learned Assistant Government Pleader Mr. Dave to make a statement at bar that there is no detail order in existence on the record of the respondents which is passed on 06.01.2020. Therefore, in absence of any order, for which, the summary of the order was issued on 25.01.2020, the same cannot be sustained and accordingly, the summary of the order dated 25.01.2020 in FORM GST DRC-01 is hereby quashed and set aside and consequent action for the recovery on the basis of such summary of the order in absence of any detailed order passed under any of the provisions of the GST Act is also hereby quashed and set aside including the attachment of any of the bank accounts of the petitioner. The respondents are directed to pass an appropriate order for lifting the attachment of the bank accounts of the petitioner forthwith - the petition is disposed of.
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2024 (10) TMI 128
Cancellation of its GST registration with retrospective effect - incomplete SCN - violation of principles of natural justice - HELD THAT:- It is material to note that the SCN did not specifically propose cancelling the petitioner s GST registration with retrospective effect. It is also material to note that the SCN mentioned that in the event the petitioner did not appear for a personal hearing at the appointed date and time, the case would be decided ex-parte on the basis of available records and on merits. However, no date of a personal hearing was communicated to the petitioner. As noted, the SCN does not mention any appointed date or time for a personal hearing - the decision of the proper officer to cancel the petitioner s GST registration with retrospective effect falls foul of the principles of natural justice. The petitioner also questions the grounds on which the petitioner s GST registration was cancelled. According to the SCN, the petitioner s registration was proposed to be cancelled as the petitioner s address was not traceable. However, the petitioner has annexed a copy of an electricity bill reflecting the same address. The present petition is disposed off by directing that the impugned cancellation order shall take effect from 15.06.2022. The impugned cancellation order is modified to the said extent.
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2024 (10) TMI 127
Wrongful availment of input tax credit (ITC) in respect of the exempted supplies - It is alleged in the SCN that the petitioner had not declared the correct tax value in filing its annual return under the FORM GSTR-09 - HELD THAT:- It is relevant to note that remanding a matter to the concerned authority has the effect of providing further time of two years for the adjudicating authority to adjudicate the SCN. In the aforesaid manner the authority has effectively frustrated the legislative provisions stipulating the period of limitation for adjudicating the assessments. In similar matters in KHEMKA AVIATION PRIVATE LIMITED VERSUS SALES TAX OFFICER CLASS II/AVATO WARD 1 ORS. [ 2024 (8) TMI 700 - DELHI HIGH COURT] , the respondents had made a statement that if the matter is remanded to the concerned adjudicating authority, the same would be disposed of within a period of six months from date. The impugned order is set aside - matter remanded to the adjudicating authority to consider it afresh - petition disposed off by way of remand.
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2024 (10) TMI 126
Cancellation of petitioner s GST registration with retrospective effect - impugned order does not reflect any reason for cancelling the petitioner s GST registration - whether cancellation of the petitioner s GST registration is warranted for the reason as set out in the SCN? - violation of principle sof natural justice - HELD THAT:- The only reason set out in the said SCN for proposing to cancel the petitioner s GST registration is failure to pay tax, interest or penalty within a period of three months from the date on which the said amount became due - However, that is not one of the reasons available under Section 29 of the Central Goods and Services Tax Act, 2017 (hereafter the CGST Act) for cancellation of a taxpayer s GST registration. It is apparent to note that non-payment of dues for a period of three months is not a prescribed ground for cancelling the petitioner s GST registration - It is also important to note that the impugned order sets out a tabular statement, which indicates that no amount has been determined as payable by the petitioner. The impugned order has also been passed in violation of principles of natural justice. Although the SCN called upon the petitioner to appear for a personal hearing at the appointed date and time, no such date or time was indicated. Thus, in effect the petitioner was not afforded an opportunity to be heard - the impugned order is set aside - petition disposed off.
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2024 (10) TMI 125
Violation of principles of natural justice - opportunity of personal hearing not provided - petitioner has failed to communicate about the impugned proceedings to the petitioner - HELD THAT:- In the present case, it appears that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice since it is just and necessary to provide an opportunity to the petitioner to establish their case on merits. In such view of the matter, this Court is inclined to set aside the impugned order dated 08.12.2023 passed by the respondent. The impugned order dated 08.12.2023 is set aside and the matter is remanded to the respondent for fresh consideration on condition that the petitioner shall pay 10% of disputed tax amount to the respondent within a period of four weeks from today (12.09.2024) and the setting aside of the impugned order will take effect from the date of payment of the said amount - Petition disposed off by way of remand.
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2024 (10) TMI 124
Principles of natural justice - non-consideration of the petitioner s replies - HELD THAT:- Even in the matters, although the petitioner had filed replies, they were not considered, and the impugned orders were passed without providing sufficient reasons for rejecting the petitioner s explanations. In view of the above, the orders impugned herein are set aside. The petitioner shall file their replies/objections along with any required documents to the respondent within two weeks from the date of receipt of a copy of this order. Upon receipt, the respondent shall issue a 14-day clear notice, schedule a personal hearing, and thereafter pass appropriate orders on merits and in accordance with the law as expeditiously as possible. These writ petitions are disposed of.
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2024 (10) TMI 123
Levy of GST on the supply of the cotton seed oil cake on the ground of the same being exempt under Entry No. 102 of N/N. 2 of 2017 - HELD THAT:- The petitioner was not liable to pay the VAT into Pre-GST Regime on the sale of cotton seed oil cake as the same was exempted as cattle feed. The GST Act has subsumed the earlier VAT Act and as per the Entry No. 102 of Notification No. 2 of 2017, it clearly provides for exemption to levy of GST on cattle feed. Even on perusal of the show-cause notice, it is revealed that the respondent Authority has reproduced objections raised by the Audit Party which clearly shows that the Audit Party while considering the replies made by the petitioner during the course of Audit and deliberations on the issues though recorded that the petitioner was not able to prove or state the status of the cotton seed oil cake purchasers with GSTIN but such purchasers also declined to pay up the tax on such outward supplies with the contention that since end use of the cotton seed oil cakes is only for cattle feed the product has to be exempted, meaning thereby that the merely the supply of the cotton seed oil cake to the traders would not determine the levy of GST as end use of cattle feed is not in dispute. The Hon ble Supreme Court in case of COMNR. OF CENTRAL EXCISE VERSUS M/S. GOPSONS PAPERS LTD. ANR. [ 2015 (10) TMI 443 - SUPREME COURT] has therefore, in such circumstances in the facts of the said case held that end use of the product at the ends of the purchaser is not the concern of the assessee and cannot be the consideration for classifying the goods in question. It is opined that in the facts of the case when the petitioner has made supply of the cotton seed oil cake as cattle feed, the petitioner was entitled to exemption under Serial No. 102 of Exemption Notification No. 2 of 2017. The impugned orders dated 11.01.2023 passed by the Adjudicating Authority as well as order dated 29.03.2022 passed by the Appellate Authority are hereby quashed and set aside - petition allowed.
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2024 (10) TMI 122
Levy of GST in relation to the annuity being received by the petitioner - date on which the liability to pay G.S.T. would arise - HELD THAT:- The annuity payable to the petitioner is fixed in the concession agreement, dated 18.01.2018. There is a difference of opinion on the question of when such liability would arise. The assessing authority and the appellate authority have taken the view that the said time of supply of services should be treated as on the date on which the concession period had commenced as the annuity is based for maintenance of the road and management of the said road with the said responsibility commencing from the date of the concession period. The issue as to whether the view of the petitioner is to be accepted or whether the view of the assessing authority and the appellate authority is to be accepted is now settled in view of the circular dated 26.06.2024, issued by the Government of India, Ministry of Finance, Central Board of indirect taxes and Customs bearing No. 221/15/2024-GST. In this circular, the C.B.I.C. has taken the view that the tax is payable at the time of issuance of invoice or receipt of payments of annuity, whichever is earlier. The orders are set aside with a direction to the respondent authorities to collect tax in accordance with the circular issued by the C.B.I.C. - appeal disposed off.
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2024 (10) TMI 121
Blocking of input tax credit under Rule 86A of the CGST /SGST Rules 2017 without any just cause or reason - violation of principles of natural justice - HELD THAT:- This writ petition can be disposed of permitting the petitioner to approach the authority who issued Ext. P7 / P9 and seek lifting of the orders blocking the credit to the tune of Rs. 1,77,250/- for the reasons indicated above. Since the petitioner has already filed Ext.P8, if the petitioner were to approach the authority who issued Ext. P9 (c), the matter shall be adjudicated by the said authority. Considering the difficulties pointed out by the learned counsel for the petitioner, the competent authority shall adjudicate the matter as contemplated by the provisions of sub-rule (2) of Rule 86A within a period of two weeks from the date of receipt of a certified copy of this judgment.
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2024 (10) TMI 120
Seeking direction to the 2nd respondent to release the goods belonging to the petitioner - Attempt to evade tax - HELD THAT:- The issues raised by the petitioner as reasons for the goods being transported in a vehicle other than the vehicle mentioned in the e-way bill and for the expiry of the e-way bill are matters that ought to have been considered by the competent authorities before imposing a penalty under Section 129 of the CGST/SGST Acts. If there was no attempt to evade tax and the discrepancies noted were on account of reasons beyond the control of the petitioner, this was also a matter that ought to have been considered by the original authority / Appellate Authority while passing orders. Though the petitioner may be justified in approaching this Court challenging the order of the Appellate Authority on account of the fact that the Tribunal has not been constituted under the provisions of Section 112 of the CGST/SGST Acts since the adjudication of the issues involve disputed questions of fact it may not be proper for this Court to entertain a challenge to the order passed by the Appellate Authority in a writ petition under Article 226 of the Constitution of India. The appeal filed by the petitioner will stand restored to the file of the Appellate Authority, who shall pass fresh orders, after affording a further opportunity of hearing to the petitioner - Ext.P7 order is quashed.
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2024 (10) TMI 119
Challenge to assessment order and summary of assessment order - violation of the principles of natural justice, specifically provided under the provisions of Section 75 (4) of Kerala State Goods and Services Tax Act, 2017 - HELD THAT:- The provisions of Section 75 (4) specifically provided that prior to completion of assessment, an opportunity for hearing is to be extended, when the assessee makes a specific request in that regard in writing before the assessing authority. In the case at hand, the fact that such a request is made by the petitioner is not in dispute. Furthermore, the show cause notice which culminated in the assessment order has created a demand in excess of Rs. 30,00,000/-. Section 75 (4) mandates an opportunity of hearing when any adverse decision is contemplated against an assessee. Insofar as a demand in excess of Rs. 30,00,000/- is created against the petitioner, it was incumbent on the part of the second respondent to have provided the petitioner a reasonable opportunity for personal hearing. Insofar as there is no evidence to prove that the notice fixing the hearing on 16.04.2024 was actually served on the petitioner, there are no reason to sustain the order at Ext. P6. This writ petition is allowed, by quashing Ext. P6 assessment order issued by the second respondent herein. The second respondent would issue a fresh notice, intimating the petitioner as regards the opportunity for personal hearing, under the provisions of Section 75 (4).
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2024 (10) TMI 118
Seeking quashing of the impugned order of adjudication - appeal dismissed on the ground of time limitation - HELD THAT:- The judgment of this Court in R.S. MARKETING AND LOGISTICS PRIVATE LIMITED VERSUS THE COMMERCIAL TAX OFFICER BENGALURU [ 2024 (6) TMI 889 - KARNATAKA HIGH COURT] , is directly and squarely applicable to the facts and circumstances of the instant case and the present petition deserves to be disposed of by setting aside the impugned order and remitting the matter back to respondent No. 1 for reconsideration of the matter afresh, in accordance with law. In so far as the dismissal of the appeal before respondent No. 2 - Appellate Authority, it is well settled that if an appeal is dismissed on the ground of delay as barred by limitation, is not an appeal in the eye of law and there would not be any merger of the original order into the order of the Appellate Authority so as to prevent this Court from exercising its jurisdiction under Articles 226 and 227 of the Constitution of India. Merely because respondent No. 2-Appellate Authority dismissed the appeal filed by the petitioner on the ground of limitation, since there is no adjudication on merits and the appeal has been summarily dismissed only on the ground of limitation, the said order of dismissal of the appeal on 23.04.2024 as barred by limitation cannot come in the way of this Court exercising its jurisdiction under Articles 226 and 227 of the Constitution of India and as such, this contention of the respondent cannot be accepted. The impugned order at Annexure-A dated 30.08.2023 passed by respondent No. 1 is hereby set aside - matter is remitted back to respondent No. 1 for reconsideration of the matter afresh - Writ Petition is hereby allowed.
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2024 (10) TMI 117
Violation of principles of natural justice - It is the grievance of the petitioner that instead of notifying the petitioner about the dates of personal hearing and without providing sufficient and reasonable opportunity to the petitioner, the respondent has proceeded to pass the impugned ex-parte order dismissing the appeal on the ground that the petitioner did not appear - HELD THAT:- A perusal of the representation at Annexure-E dated 06.02.2024, which was served on the respondent on 07.02.2024 will indicate that the petitioner had subsequently requested the respondent to notify the petitioner about the date of personal hearing by intimating the same to the E-mail id of the petitioner as indicated in the said letter/representation. In this context, a perusal of the impugned order will indicate that despite referring to the aforesaid letter/representation received on 07.02.2024, the respondent did not notify the petitioner or to his E-mail id as stated in the said letter/representation and merely noticed that the petitioner remained absent on 20.02.2024 and 01.03.2024 and proceeded to pass the impugned exparte order, which is clearly in violation of the principles of natural justice warranting interference by this Court in the present petition and by adopting a justice oriented approach and in order to provide one more opportunity, the impugned order deserves to be set aside and the matter be remitted back to the concerned respondent for reconsideration afresh in accordance with law. The impugned order at Annexure-F dated 28.03.2024 along with the impugned Form GST APL-04 dated 28.03.2024 at Annexure-F1 issued/passed by the respondent are hereby set aside - Petition allowed by way of remand.
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2024 (10) TMI 116
Challenge to notices issued - petitioner contends that thesnotices, issued u/s 73 of the Central Goods and Services Tax (CGST) Act, 2017, are flawed due to the improper consolidation of multiple tax periods into a single SCN - petitioner s primary argument is that the respondent cannot issue a common show cause notice by grouping the tax periods from 2019 to 2023-24 - HELD THAT:- This Court finds that the respondent erred in issuing a consolidated show cause notice for multiple assessment years, spanning from 2019 to 2023-24. Section 73(10) of the CGST Act mandates a specific time limit from the due date for furnishing the annual return for the financial year to which the tax due relates. The law stipulates that particular actions must be completed within a designated year, and such actions should be executed in accordance with the law's provisions. This Court concludes that the show cause notices issued by the respondent are fundamentally flawed. The practice of issuing a single, consolidated show cause notice for multiple assessment years contravenes the provisions of the CGST Act and established legal precedents. The impugned SCN dated 07.05.2024 (Annexure-F) and the summary of the SCN dated 08.05.2024 (Annexure-G) issued by the respondent for the tax periods 2019-20, 2020-21, 2021-22, 2022-23, and 2023-24 are hereby quashed - Petition allowed.
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2024 (10) TMI 115
Exemption from payment of service tax/GST in terms of the N/N. 30/2012-Service Tax dated 20.06.2012 - practicing advocates - HELD THAT:- From perusal of the materials, it is absolutely clear that the petitioner s case is covered under the notification dated 20.06.2012 and therefore, he is not entitled for payment of tax. Such fact was also brought to the notice of the authority by way of a representation by the petitioner and the fact also remains the same that in similar circumstances the appellate authority i.e., the Commissioner of Taxes interfered with such decision. This court is of the view that while issuing the notice and doing the recovery, the authority had acted without jurisdiction and therefore, there shall be no bar to exercise the power of Article 226 in the given facts of the present case. The notice dated 30.03.2022 as well as the recovery notice dated 06.06.2024 are set aside and quashed.
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2024 (10) TMI 114
Validity of the impugned order u/s 107(11) of the Karnataka Goods and Services Act, 2017 - case of petitioner is that the adjudicating authority without resorting to any action against the supplier who was the selling dealer, has ignored the tax invoices produced, ignored the payment of tax and has gone against the purchaser, which is illegal, arbitrary, and the same is liable to be quashed - HELD THAT:- In the present case after it was found by the revenue that there were certain violations/anomalies by the supplier and the dealer with regard to payment of tax returns audit was conducted. By virtue of the judgment in the case of THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED [ 2023 (3) TMI 533 - SUPREME COURT] , it is held that the purchasing dealers have to prove the actual physical movement of the goods unless they have been purchased from their respective dealers and if the respective purchasing dealer fails to establish and prove the important aspect of physical movement of the goods alleged to have been purchased from the concerned dealers on which the ITC has been claimed, the Assessing Officer is absolutely justified in rejecting such ITC claims, though in the present case the petitioner has produced documents to show that there is existence of the supplier and he is continuing his business by virtue of a separate GST number and has also now produced along with a memo photograph showing some of the godowns belonging to the supplier. The fact remains that the goods that was moved and purchased from the supplier to the purchaser, the vehicles in which it was moved have not been traced and those appear to be fraudulent and not registered before the Regional Transport Authority. Therefore, the provisions of section 16 (2) (c) (d) is squarely applicable to the case on hand. Whether the tax charge in respect of supplier actually has been paid to the Government, either in cash or through utilization of Input Tax Credit admissible in respect of the said supply would have to be proved by the purchaser as contemplated under section 155 of the Act, which says where any person claims that he is eligible for Input Tax Credit under this Act, the burden of proving such claim shall lie upon such person. The law contemplates that the supplier ought to have filed the returns and paid the tax and if he has stopped payment of tax, the revenue is at liberty and by law entitled to recover from the purchaser, initiate proceedings against the purchaser in accordance with law and the ITC claimed by the petitioner ought to have paid to the Government by the supplier for having paid the tax to the revenue. Hence the same has been rightly rejected by the Assessing Officer which is confirmed by the appellate authority. Therefore, there are no anomaly, illegality or discrepancy in the order passed by the appellate authority confirming the order of the respondent No.7. The order that is questioned herein is not tainted with any malice, arbitrariness, illegality or capriciousness - the writ petition lacks merit for consideration. Petition dismissed.
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2024 (10) TMI 113
Profiteering - benefit of reduction in the rate of tax or ITC on the supply of construction service by the Respondent, on implementation of GST w.e.f.01.07.2017 or not - Section 171 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The DGAP has verified the documents submitted by the Respondent as well as the statutory returns filed by him and revealed that the Respondent had opted for GST @ 5% without ITC in terms of Notification No. 03/2019-Central Tax (Rate)dated 29.03.2019 and reversed all the ITC available pertaining to the F.Y. 2017-2018 and 2018-2019 from April, 2019 onwards and he had also reversed ITC availed in compliance with Rule 37 of the CGST Rules,2017,due to delay of more than 180 days in making payments to the suppliers for the value of supply along with tax, from the date of issuance of the invoices by the respective suppliers. He had also reversed the excess amount of ITC availed wrongly due to a clerical mistake, which resulted in a negative credit during the post-GST period. Therefore, the Respondent has not retained any ITC related to lreo Waterfront project and reversed all the ineligible ITC pertaining to the F.Y. 2017-2018 and 2018-2019. It can be concluded that post-GST, no benefit of additional ITC accrued to the Respondent in respect of the project Ireo Waterfront . Therefore, the Commission finds that the provisions of Section 171(1) of the CGST Act, 2017 are not attracted in the Respondent s project Ireo Waterfront . The proceedings in the present case are accordingly dropped.
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2024 (10) TMI 112
Profiteering - failure to pass on the benefit of reduction in the GST rate on Services by way of admission to exhibition of cinematograph films where price of admission ticket is one hundred rupees or less by way of commensurate reduction in price - Section 171 of the Central Goods and Services Tax Act, 2017 - penalty. HELD THAT:- The Respondent has resorted to profiteering by way of either increasing the base prices of the service while maintaining the same selling prices or by way of not reducing the selling prices of the service commensurately, despite a reduction in GST rate, on Services by way of admission to exhibition of cinematograph films where price of admission ticket is above one hundred rupees from 28% to 18% w.e.f. 01.01.2019 and Services by way of admission to exhibition of cinematograph films where price of admission ticket is less than one hundred rupees from 18% to 12% w.e.f. 01.01.2019 upto 30.06.2019. On this account, the Respondent has realised an additional amount to the tune of Rs. 4,65,549/- from the recipients which included both the profiteered amount and GST on the said profiteered amount. Thus, the profiteered amount is determined as Rs. 4,65,549/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017. As per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, the Respondent is therefore directed to reduce the prices of his tickets, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients. As per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, the Respondent is therefore directed to reduce the prices of his tickets, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients. The Respondent is also directed to deposit the profiteered amount of Rs. 4,65,549/- along with the interest to be calculated @ 18% from the date when the above amount was collected by him from the recipients till the above amount is deposited. Since the recipients, in this case, are not identifiable, the Respondent is directed to deposit the amount of profiteering in two equal parts, of Rs. 2,32,774.5/- in the Central Consumer Welfare Fund (CWF) and Rs. 2,32,774.5/- in the Telangana State Consumer Welfare Fund (CWF) as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017, along with interest @18%. The above amount shall be deposited within a period of 3 months from the date of receipt of this order failing which the same shall be recovered by the jurisdictional Commissioner CGST/SGST as per the provisions of the CGST/SGST Act, 2017. Penalty - HELD THAT:- The Respondent has denied benefit of rate reduction to his customers/recipients in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has committed an offence under Section 171 (3A) of the above Act. However, perusal of the provisions of Section 171 (3A), under which liability for penalty arises for the above violation, shows that it has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, 2019 and it was not in operation during the period from 01.07.2017 to 30.06.2019 when the Respondent had committed the above violation. Hence, the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively for the said period. Further, the Commission in terms of Rule 136 of the CGST Rules, 2017 directs the jurisdictional Commissioners of CGST/SGST, Telangana to monitor compliance with this Order under the supervision of the DGAP, by ensuring that the amount profiteered by the Respondent as ordered by this Commission is deposited in the respective Consumer Welfare Funds along with interest thereon. A report regarding compliance of this order shall be submitted to this Commission by the DGAP within a period of four months from the date of receipt of this Order.
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Income Tax
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2024 (10) TMI 111
Summoning order u/s 278-B - delayed payment of Tax Deducted at Source (TDS) - Contention of applicants is that they had the liability of paying the Tax Deducted at Source amount which admittedly has been paid belatedly and beyond time but for which period they have also paid interest to the department. HELD THAT:- As argued once admittedly the applicants have paid the TDS amount late as such, they are liable for the penal action as provided under the aforesaid provisions of the Act, 1961 and consequently, merely because they paid the interest for the delayed period, the same would not allow them to wriggle out of the strict provisions of the Act, 1961 and the prosecution which has been lodged against them for non compliance of the aforesaid provisions of the Act, 1961. Opposite Party also contends that the aforesaid circular may not come to rescue of the applicants inasmuch as the said circular would be applicable in normal circumstances but the applicants herein are habitual defaulter who have repeatedly delayed payment of the TDS amount within the time stipulated. Applicants states that the instant application may be disposed of with liberty to the applicants to raise the aforesaid argument before the learned trial Court and the learned trial Court may be directed to consider the said objections in accordance with law. To the aforesaid proposition, Opposite Party learned counsel for the respondents has no objection.
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2024 (10) TMI 110
Criminal complaint u/s 200 of Cr.P.C. for the offence punishable u/s 276C (2) r.w.s. 278B of the Income Tax Act - Petitioners failed to deposit such tax assessed HELD THAT:- The payment of the tax liability was deposited by the Petitioners about a year ago, prior to filing of the complaint. There is no whisper of such deposits made by the Petitioners in the entire complaint. The averments in the complaint would go to show that the Petitioners failed to pay the self-assessment tax together with interest and penalty. Thus, when the self-assessment tax was deposited much prior to the filing of the complaint and intimated to the department vide letter dated 28.03.2018, it was incumbent upon the complainant to obtain a fresh authorisation with regard to the delayed interest and penalty only. Besides, there is no response given to the request made by the Petitioners in the letter dated 28.03.2018 for waiver of interest and penalty. Thus, the authorisation obtained in the year 2017, no longer subsists when the Petitioners paid the self-assessment tax during the year 2017-2018. What remained at the time of filing of the complaint was only interest on delayed payment as well as penalty. Thus, it was necessary for the Department to obtain a fresh authorisation to launch the prosecution only for the purpose of interest and penalty. The question is whether there is any wilful default in making payment of the assessed tax. Applying the ratio in the case of Unique Trading Company [ 2024 (2) TMI 405 - BOMBAY HIGH COURT] it is crystal clear that the Petitioners by filing returns, declaring the tax liability and also requesting the Department to grant installments, would certainly show that such attempts cannot be considered as wilful default in making the payment, which is sine qua non for launching prosecution. Even otherwise, the amount was deposited somewhere during the year 2017-2018 whereas the complaint is filed in the year 2019 and that too, without disclosing such payments. The prosecution which has been launched against the Petitioners has to be termed as an abuse of the process of law as no purpose would be served in continuing with such a complaint. The complaint which is launched by the Department, therefore, requires to be quashed and set aside by exercising extraordinary powers under Section 482 of Cr.P.C. The complaint is, therefore, quashed and set aside.
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2024 (10) TMI 109
Maintainability of appeal on low tax affect - tax effect for filing appeals in Income Tax matters - HELD THAT:- Monetary limits, the CBDT has clarified that the same shall be applicable with the exceptions which are carved out in 3.1 (1) where decision to appeal/file SLP is taken on merits and without regard to tax effect and the monetary limits. Revenue would have to take a clear stand in so far as the present appeal is concerned, whether a decision to file appeal was taken on merits and without regard to the tax effect as involved. We accordingly dispose of this Application with liberty to the Applicant Revenue to file a fresh Application making out a case as would be required to be pleaded in terms of the clarification dated 19th June 2023 issued by the CBDT read with further Circular No. 5 of 2024 as noted by us herein above. At this stage, Respondent would submit that the CBDT has now issued a fresh circular dated 17th September 2024 which can also be taken into consideration. It is for the Revenue to take appropriate decision in this regard.
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2024 (10) TMI 108
Doctrine of constitutional priority - Certain transfers to be void u/s 281 - Supremacy of attachment passed by the Tax Recovery Officer / Income Tax Department or to the mortgage created in favour of the secured creditors Dues of the Income Tax Department precedence over the dues of the secured creditor - intra Court appeal arises out of the order passed by the writ Court in UNION BANK OF INDIA (E-CORPORATION BANK) [ 2024 (1) TMI 115 - MADRAS HIGH COURT] HELD THAT:- In fact the issue raised in this appeal is covered by a decision of the Hon'ble Supreme Court in Connectwell Industries Pvt Ltd [ 2020 (3) TMI 362 - SUPREME COURT] which in fact has been followed in a detailed order passed in State Bank of India etc.[ 2022 (12) TMI 557 - MADRAS HIGH COURT] Since this position is not controverted, the writ appeal cannot be entertained as the same has been preferred by the Revenue. In that view of the matter, this writ appeal is liable to be dismissed. Accordingly, it is dismissed.
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2024 (10) TMI 107
Validity of reassessment proceedings beyond period of limitation - notice u/s 148 has evidently been issued one year and 116 days after the expiry of 6 years since the end of the AY 2014-15 the applicable period of limitation u/s 149 - HELD THAT:- We find that the matter at hand is squarely covered by the ruling by a Division Bench of this Court in the case of Godrej Industries Ltd. [ 2024 (3) TMI 109 - BOMBAY HIGH COURT] - The facts of the case in Godrej are quite similar the Assessment Year was 2014-15; the show cause notice u/s 148A (b) came to be issued for the first time on 24 May, 2022; and the Section 148 notice came to be issued on 31 July, 2022. In the instant case, the notice u/s 148 was issued on 25 July, 2022 just about six days before the notice in Godrej. A plain reading of the foregoing would make it clear that the ruling in Godrej explicitly rules that the validity of a notice u/s 148 must be judged on the basis of the law as existing on the date of which the notice is issued. In the instant case, the deadline for issuance of notices for AY 2014-15 had expired on 31st March, 2021. Consequently, and evidently, the notice issued in the instant case was hopelessly barred by limitation. Therefore, the 148 Notice issued indeed deserves to be quashed as being barred by limitation. Assessee as well as the Respondent-Revenue confirm the factual position found above. Consequently, in reliance upon the law declared in Godrej, the reassessment proceedings being barred by limitation, cannot be permitted to be continued, calling for interference by this Court. Therefore, we hereby quash and set aside the 148 SCN dated 25 July, 2022 and all consequential actions emanating from the 148 SCN. Since we are disposing of this Petition on the basis of the reassessment being barred by limitation u/s 149 we express no opinion on any other issues raised in the Writ Petition.
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2024 (10) TMI 106
Validity of Order of Assessment u/s 143 (3) r/w 144B - violation of principle of natural justice - though personal hearing through video conferencing was sought the same was not responded and accorded prior to passing of the impugned order - HELD THAT:- Considering the fact and the documents on record it is noticed that though hearing through video conferencing was sought by the assessee, the same was not responded before passing the order of assessment under section 143 (3) r/w 144B of the Act, which in our opinion is in breach of Section 144B (7) (vii) (2) of the Act, and violative of principles of natural justice. It is the duty cast upon the authorities in faceless assessment, if there is a demand for personal hearing, the same deserve to be granted. Keeping in mind the mandatory provision, if the facts of the present case is considered, indisputably, the request made by the petitioner for personal hearing through video conferencing at that stage was acceded to, however, intimation thereof was sent after the time of hearing was scheduled. Admittedly, on the second time, the request of the petitioner for granting personal hearing through video conferencing, intimation thereof was to be given one day advance, was not either acceded to or taken care of by the revenue authorities and straightway, the impugned order was passed. Thus, provision of Section 144B of the Act was not complied with by the revenue authorities and thereby, the order passed cannot be sustained in eye of law.
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2024 (10) TMI 105
Estimation of income - Bogus purchases - purchases are sham transactions fabricated through bogus paper concerns engaged in providing accommodation entries - ITAT partly allowing the appeal of the Revenue wherein it was held that in respect of bogus purchases, the addition at the rate of 6% of bogus purchases is fair and reasonable. HELD THAT:- The view taken and the conclusion arrived at by the appellant Tribunal are based on material before it and after analysing the facts and figure available before it. When the Tribunal has thought it fit to reduce the disallowance at 6% from 12.5%, the Tribunal had before it the facts which were duly analysed by it. No interference is called for in the said conclusion and findings of the Tribunal in the present appeal by this court. See PANKAJ K. CHOUDHARY [ 2021 (10) TMI 653 - ITAT SURAT] - No substantial questions of law can be said to have arisen.
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2024 (10) TMI 104
Reopening of assessment u/s 147 - specific case of the petitioner is that the assessment was completed earlier u/s 143(3) wherein, the claim of the petitioner in respect of bad debts and advance written off were not disturbed - HELD THAT:- The records reveal that the petitioner had furnished all the materials for completing the assessment on 17.12.2019 u/s 143(3) of the Act. In fact in response to the notice dated 30.11.2019 issued under Section 142(1) of the Act. These information s were furnished by the petitioner by a detailed note on 09.12.2019. Therefore, it is clear that the reasons given for reopening the assessment is inspired from change of opinion by the AO. Therefore, there is no merits in the Impugned Notice and the Impugned Order for the Assessment Year 2017-2018. These writ petitions deserve to be allowed and are therefore accordingly allowed.
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2024 (10) TMI 103
TDS u/s 194C or 195 - short deduction of TDS - assessee has made direct payment to non-resident company - proceedings u/s 201 (1) r.w.s. 201 (1A) - Application of the decision in the case of Rishikesh Apartments Cooperative Housing Society [ 2001 (6) TMI 17 - GUJARAT HIGH COURT] for TDS deduction. HELD THAT:- Deductee has paid the entire amount of tax except Rs.08.00 lakh which was paid as self-assessment tax, the Tribunal was right in holding that the tax paid by the contractor in its own case by way of advance tax and self-assessment tax should be deducted from the gross tax that the assessee should have deducted under the provisions of the Act while computing the interest chargeable under Section 201 (1A) of the Act. In the facts of the case, the Tribunal was therefore justified in directing the Assessing Officer to calculate the interest on the amount which was paid by the contractor as self-assessment tax till the date it was deposited and such interest was to be paid by the assessee for not deducting the tax at source. Therefore, in the facts of the case, it cannot be said that the Tribunal has committed an error in holding that the assessee is not liable to pay any interest in view of the decision of this Court in case of Rishikesh Apartments Cooperative Housing Society [ 2001 (6) TMI 17 - GUJARAT HIGH COURT] Issue of applicability of the provision of Section 195 (2) of the Act being payment to non-resident is concerned, applying the decision of this Court in case of Rishikesh Apartments Cooperative Housing Society (supra), ultimately the assessee was not held to be liable to deduct the tax than what is to be paid by the contractor and therefore, the second question has become academic and we decline to answer the same. Question No. 1 is answered in favour of the assessee and against the Revenue as the Tribunal was justified in applying the ratio of decision of this Court in case of Rishikesh Apartments Cooperative Housing Society (supra).
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2024 (10) TMI 102
Rejection of Form 3 under the Direct Tax Vivad se Vishwas (DTVSV) Scheme - Entitlement to carry forward reduced MAT Credit under the DTVSV Scheme - quashing Form 3 determining amount payable under the Direct Tax Vivad se Vishwas (DTVSV) Scheme on or before 30.04.2021 and rejecting the application to rectify Form 3 issued in response to the application made by the petitioner under Scheme - Instructing respondent to accept Form No. 1 and 2 under the scheme on 30.01.2021 as is filed by the petitioner and allow opted option of not to pay the tax and allow reduction of MAT credit and consequent refund - HELD THAT:- The petitioner is entitled to carry forward the reduced MAT Credit for payment of the taxes under the Scheme as the petitioner has the option which is further fortified by the answer to Question 53 of the FAQ as per Circular No.9/2020 issued by the CBDT. On perusal of the remarks made by the respondent in the Form 3 it is apparent that the respondent though has taken into consideration that the AO has permitted the carry forward of the MAT Credit but while calculating the amount payable by the petitioner in Form 3 with regard to tax arrears and amount payable under DTVSV on or before 30.04.2021, the respondent has not taken into consideration order dated 29.01.2021 passed by the AO for permitting petitioner to carry forward the MAT Credit being the difference between tax payable under the normal provision of tax payable u/s115JB and therefore the petitioner was entitled to reduce the MAT Credit for not paying any amount otherwise payable as calculated in Form No. 3. We are of the opinion that impugned Form No. 3 and the rectification order are required to be quashed and set aside by remanding the matter back to the respondent to re-calculate the entitlement of the refund in accordance with the Scheme and the Rules thereunder by applying Rule 10 of the Rules after taking into consideration order dated 29.01.2021 passed by the AO u/s 154 of the Act with regard to order dated 01.09.2016 giving effect to the CIT (A).
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2024 (10) TMI 101
Deduction u/s 80P - delay in filing Return of Income for claiming deduction - HELD THAT:- The case is remitted back to the respondent to pass a fresh orders after taking note of the aforesaid order passed by the CIT, condoning the delay in filing the return u/s 139 of the Income Tax Act, 1961. The Officer shall re-examine the issue as to whether the petitioner would be entitled to the benefit of Section 80P of the Income Tax Act, 1961. The respondent shall pass orders on merits in accordance with law, within a period of twelve weeks from the date of receipt of a copy of this order. Needless to state, the petitioner shall be heard, if the petitioner so desires.
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2024 (10) TMI 100
Rectification u/s 254 - Tribunal set aside the order passed u/s 263 on the ground of limited scrutiny case and holding that the AO could not have gone beyond the reasons for which case was selected for scrutiny - as contended that the Tribunal has committed mistake apparent on record by considering the fact of limited scrutiny as there was a case of survey and the returned income was to be examined thoroughly. HELD THAT:- Tribunal has passed the order considering the case of limited scrutiny under the regular assessment and accordingly, allowed the Appeal filed by the assessee. The petitioner could not have on the same ground filed the rectification application as the Tribunal has already considered the same. We are therefore of the opinion that there is no mistake apparent on record from the order passed by the Tribunal in the Appeal so as to entertain the Misc. Application under Section 254 (2) . Tribunal has not committed any error which is apparent on record while passing the order in Appeal. If the petitioner has any grievance, the recourse in accordance with law can be taken but the provisions of Section 254 (2) of the Act would not be of any avail to the petitioner.
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2024 (10) TMI 99
Denial of exemption u/s 11 - procedural delay in furnishing Form 10B - as per assessee delay was on account of various technical issues. HELD THAT:- Considering the language of the provision of Section 10B (8) of the Act, the Hon ble Supreme Court in M/S WIPRO LIMITED [ 2022 (7) TMI 560 - SUPREME COURT] held that it was mandatory on part of the assessee to file declaration before the due date of filing of return u/Sub-section (1) of Section 139 of the Act, whereas, in the facts of the said case the assessee filed such undertaking along with the revised return under Sub-section (5) of Section 139 and in such facts, the Hon ble Supreme Court held that the twin conditions prescribed u/s 10B (8) of the Act was mandatory to be fulfilled and it cannot be said that though the declaration is mandatory, the filing of such declaration within the due date of filing of return under Sub-section (1) of Section 139 of the Act would be directory. Reference to the aforesaid decision has no connection whatsoever remotely to the facts of the present case and therefore, in the facts of the present case, the Tribunal has rightly followed the decision of this Court in case of Sarvodaya Charitable Trust v. Income Tax Officer (Exemption) [ 2021 (1) TMI 214 - GUJARAT HIGH COURT] as well as the decision of Social Security Scheme of GICEA[ 2022 (12) TMI 1172 - GUJARAT HIGH COURT] to uphold the decision of the CIT (Appeals), wherein this Court has held that the approach of the authority in such type of cases should be equitable, balancing and judicious. In the facts of the case, when the assessee has already filed the audit report in Form 10B electronically on 27.02.2021 during pendency of appellate proceedings along with copy of audited financial statements, delay in filing the said form is rightly condoned by CIT(A) and the Tribunal. We are of the opinion that the Tribunal has not committed any error by not following the decision in case of M/s. Wipro Limited (supra) as referred to and relied upon by learned advocate for the appellant-Revenue, and has rightly followed the decision of this Court in case of Social Security Scheme of GICEA (supra). Appeal dismissed - No substantial question of law arises.
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2024 (10) TMI 98
Denial of exemption u/s 11(1) - Failure to submit Form No. 10 AB due to technical glitches on web portal of the official website of the Income Tax Department - petitioner would submit that instead of directing the authorities to accept the application form of the petitioner, the authorities have directed him to approach before the assessing authority and to file his application for condonation of delay, meaning thereby the authorities are not intended to decide the application of the petitioner on its merits, but they may decide their application on the ground of limitation - HELD THAT:- In view of the circular dated 17.07.2022, the purpose would be subserved if the Commissioner of Income Tax is directed to accept the application Form No. 10 AB of the petitioner in physical mode treating the same is filed prior to the last date of submission of the application i.e. 30.06.2024 and to decide it on its own merits, considering the period of delay and reasons for delay, as the same has been explained by the petitioner that due to technical glitches he could not succeed in filing the application form. Therefore, although the Commissioner of Income Tax (Exemption) has not been made a party respondent in the case, yet in the interest of justice, the petitioner is directed to submit his application Form No. 10-AB in physical mode to the Competent Authority/Commissioner of Income Tax (Exemption) Bhopal along with an application as well as necessary documents under the circular dated 17.07.2022 within 03 weeks from today, then the Commissioner of Income Tax (Exemption) Bhopal is directed to consider the application of the petitioner treating it as filed before the last date of submission of application form i.e. 30.06.2024, and decide the application on its own merits in accordance with law, and Circular dated 17.07.2022.
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2024 (10) TMI 97
Supervisory jurisdiction of this Court invoked cancelling Look Out Circular (LOC) issued at the behest of Income Tax Department against the petitioner herein - Petitioner claimed that such LOC has not been issued in legitimate manner and prayed that such LOC be cancelled. Simultaneously, he also sought liberty of the learned Trial Court to travel abroad - also application seeking release of his FDR but such request has been turned down on the ground that FDR was not a condition with respect to travel - HELD THAT:- Department of Income Tax is duly represented in the present proceedings and in response to the query put by this Court, it has been, very fairly, admitted that as on date there is no further Look Out Circular against the petitioner. This Court has already extracted the relevant portion of the order whereby the petitioner had been permitted to travel abroad and it is quite evident that the above said FDR was in lieu of his such travel only as he was directed to submit the same before leaving the country. Admittedly, he was also asked to join the investigation as and when directed by the AO and respondent has stated that such proceedings have already culminated into an assessment order. In view of the fact that earlier Look Out Circular had been rescinded and there is no fresh Look Out Circular, there was no reason to have not released the aforesaid FDR of Rs. 25 lacs. The petition is accordingly allowed and learned Trial Court is directed to release the aforesaid FDR of Rs. 25 lacs to the petitioner.
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2024 (10) TMI 96
Reopening of assessment u/s 147 - change of opinion - assessee had not paid service tax - HELD THAT:- It appears that the reassessment sought to be initiated mainly on the basis that it has been found that the assessee had not paid service tax during the year and the same was shown in the balance-sheet as tax and duties payable. A further scrutiny of the reasons so recorded would also reveal that the said reasons appears to have been recorded on verification of the case records, more particularly with regard to service tax issue. Meaning thereby, the authorities have revisited the case records already available with them. Thus, we are of the opinion that as such the authority has not come in the possession of any new information and/or any other tangible material. A bare perusal of the entire reasons recorded would suggest that initiation of reopening is sought on the basis of re- verification of material already on record. We also satisfied ourselves by taking into consideration the relevant documentary evidence pointed out by advocate for the petitioner that each and every query including the issue of service tax raised in the original assessment proceedings were satisfied and all the relevant materials and information were disclosed truly and fully. The authority has already gone into the aspect of issue of service tax at the time of assessment proceedings and passing the order u/s 143(3) of the Act. Thus, in our considered opinion, jurisdiction assumed by the AO u/s 147 of the Act is nothing but a change of opinion. It is trite law that assumption of jurisdiction u/s 147 of the Act is impermissible on the basis of mere change of opinion.
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2024 (10) TMI 95
Reopening of assessment u/s 147 - merely because the income u/s 115JB is more than that of the proposed addition qua the income escaping the assessment as stated in the reasons recorded once the entire assessment is reopened, AO can look into other aspects of the assessment and therefore it cannot be said that the reopening exercise would be futile exercise HELD THAT:- AO after considering the information which was received with regard to the share prices movement of the Kushal Ltd. carried out on money control and after noticing that there was fluctuation in the price, has come to the conclusion that because the assessee has made transaction in the shares of the said company there was escapement of the income on the ground that the assessee had indulged in generating non-genuine gain by trading in Kusha Script on BSE during the year under consideration, except such information, no other information relating to the assessee or in connection with the transaction carried out by the assessee was recorded in the reasons by the AO. As apparent that the even if the addition is made as proposed by the AO in the reasons recorded, being the income escaped from the assessment, as the income which is taxed u/s 115JB is concerned, there would not be any taxable income after proposed addition. Petition succeeds as no fruitful purpose would be served to continue the re-assessment proceedings.
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2024 (10) TMI 94
Faceless assessment of income escaping assessment - notice issued under Section 148 of the Act is issued by the Jurisdictional Assessing Officer ( JAO ) and not by a Faceless Assessing Officer ( FAO ), as is required by the provisions of Section 151A - HELD THAT:- It is now well settled that for a notice to be validly issued for reassessment under Section 148 of the Act, the Respondent-Revenue would need to be compliant with Section 151A, which has been interpreted and analysed in detail by a Division Bench of this Court in the case of Hexaware Technologies Limited [ 2024 (5) TMI 302 - BOMBAY HIGH COURT ] wherein held Court held that it was not permissible for the Jurisdictional Assessing Officer to issue a notice under Section 148, as the same would amount to breach of the provisions of section 151A of the IT Act. There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice under Section 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice under Section 148 of the Act. Decided in favour of assessee.
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2024 (10) TMI 93
Faceless assessment of income escaping assessment - notice issued under Section 148 of the Act is issued by the Jurisdictional Assessing Officer ( JAO ) and not by a Faceless Assessing Officer ( FAO ), as is required by the provisions of Section 151A - HELD THAT:- It is now well settled that for a notice to be validly issued for reassessment under Section 148 of the Act, the Respondent-Revenue would need to be compliant with Section 151A, which has been interpreted and analysed in detail by a Division Bench of this Court in the case of Hexaware Technologies Limited [ 2024 (5) TMI 302 - BOMBAY HIGH COURT ] wherein held Court held that it was not permissible for the Jurisdictional Assessing Officer to issue a notice under Section 148, as the same would amount to breach of the provisions of section 151A of the IT Act. There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice under Section 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice under Section 148 of the Act. Decided in favour of assessee.
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2024 (10) TMI 92
Validity of order u/s 148A(d) and a notice u/s 148 were issued to the petitioner and penalty orders - failure to respond to the show cause notice - petitioner also admittedly failed to file the return of income in response to the Section 148 notice, and has approached this Court after the penalty was issued - HELD THAT:- Impugned assessment order and impugned penalty order are set aside on condition that the petitioner remits a sum of Rs.2,00,000/- towards the income tax demand, as agreed to, within four weeks from the date of receipt of a copy of this order. Within the said period, the petitioner is permitted to submit a reply to the show cause notice. Upon receipt of the petitioner's reply and subject to being satisfied regarding the receipt of the sum of Rs.2,00,000/-, the assessing officer is directed to provide a reasonable opportunity to the petitioner, including a personal hearing by video conferencing, and thereafter issue a fresh order within four months from the date of receipt of the petitioner's reply. In order to enable the petitioner to upload the reply, the respondents are directed to provide access to the portal. All legal issues are kept open for consideration by the assessing officer.
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2024 (10) TMI 91
Validity of notice u/s 148 - reason to believe - AO has for reasons unknown and unfathomable merely observed that the response of the petitioner has not been found to be maintainable - HELD THAT:- There has been an abject failure on the part of the AO to either examine or consider the objections that were submitted. AO has for reasons unknown and unfathomable merely observed that the response of the petitioner has not been found to be maintainable. The order u/s 148A(d) as well as the consequential notice u/s 148 of the Act are thus liable to be set aside on this short score alone. We, accordingly, allow the instant writ petition and set aside the order u/s 148A(d) as well as the consequential notice, both dated 10 April 2024.
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2024 (10) TMI 90
Revision u/s 263 - AO passed an order u/s 145 (3) in absence of the assessee rejecting his books of accounts - revenue submits that the Joint Commissioner while passing order u/s 144A of the Act ought not to have directed the AO to pass order in terms laid down by him and the AO ought to have examined the entire case independently - HELD THAT:- The Commissioner of Income Tax while exercising powers u/s 263 of the Act i.e. suo moto jurisdiction would be entitled to look into the order of the AO provided he reaches to the conclusion that the same is erroneous to the extent that it is prejudice to the interest of the revenue. As observed in MALABAR INDUSTRIAL CO. LTD. [ 2000 (2) TMI 10 - SUPREME COURT] every loss of revenue as a consequence of the order of the AO cannot be treated as prejudice to the interest of the revenue. Thus, if two views are possible to reach to a conclusion and an assessment, merely because the Commissioner does not agree with the view adopted by the AO, cannot be a ground to hold the order as erroneous. The error has to be found from the provisions of law and the order can be set aside only when the view taken by the AO is unsustainable in law. ITAT in appeal while relying on the aforesaid judgment reached to the conclusion that the view taken by the AO cannot be said to be erroneous. We also find that the additions have been made based on the provisions of law by the AO and, therefore, do not find any reason for interfering with the well reasoned order of the ITAT which is based on facts. More so, no substantial question of law can be said to be required to be examined by this Court.
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2024 (10) TMI 89
Validity of assessment order and penalty order - as argued petitioner did not have a reasonable opportunity to contest the proposed addition on merits - HELD THAT:- By the impugned assessment order, the entire sale consideration for the purchase of the immovable property was added to the total income of the assessee. Such addition was made notwithstanding the fact that the petitioner had submitted documentary evidence with regard to the sanction of a loan by the Indian Overseas Bank. This aspect was noticed in the order u/s 148A(d), wherein it was concluded that the assessee had failed to substantiate the sources of income for the remaining Rs.23,00,000/-. However, while issuing the impugned assessment order, these aspects were not taken into consideration perhaps on account of non participation by the petitioner. As a result, the total sale consideration was added to the income of the assessee. Notwithstanding the non participation by the assessee, this approach has caused great hardship. The assessee, however, cannot be excused for non participation especially in view of the number of notices that were both uploaded and served by e-mail. In these facts and circumstances, it is just and appropriate to impose costs on the petitioner. Impugned assessment order is set aside subject to the condition that the petitioner pays a sum of Rs.40,000/- as costs to the Adyar Cancer Institute with in fifteen days from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice within the said period. In order to enable the petitioner to upload the reply, the respondents are directed to provide access to the portal.
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2024 (10) TMI 88
Validity of Reopening of assessment u/s 147 - Reasons to believe - importance of reasons to be given in the order - HELD THAT:- The impugned order passed by the AO has recorded the contents of the notice issued u/s 148A(b) of the Act and thereafter reproduced the entire submissions made by the petitioner and again reiterated the contents of the notice u/s 148A(b) of the Act to come to prima facie conclusion that it is a fit case to reopen the assessment. Reasons are required to be given by any quasi judicial authority dealing with the contentions raised more particularly in the Scheme of the Act when it stipulates statutory opportunity to the assessee to file reply to the notice issued u/s 148A(b) of the Act and thereafter on consideration of the reply and materials on record, the AO is required to come to the prima facie conclusion that it is a fit case to reopen the assessment. Thus, the impugned order u/s 148A(d) is not tenable as it is bereft of any reason and consequently, notice u/s 148 is also liable to be quashed and set aside.
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2024 (10) TMI 87
Review petition - Writ court power of review of its order - whether there is an error apparent on the face of record to review the order [ 2018 (5) TMI 639 - CHHATTISGARH HIGH COURT] ? - HELD THAT:- Though the provisions of the CPC under Order 47 Rule 1 are not applicable to review the order passed in the proceeding under Article 226 of the Constitution of India, yet, the High Court being court of record, power of review inheres in the court of plenary jurisdiction exercisable by this Court to prevent miscarriage of justice or to correct grave and palpable errors, but that power ought not be treated as unlimited or unabridged, but they are to be invoked on the grounds analogous to the grounds mentioned in Order 47 Rule 1 of the CPC, namely; (i) discovery of new and important matter or evidence which the party seeking the review could not produce at the time when the earlier order sought to be reviewed was made, despite exercise of due diligence, (ii) existence of some mistake or error apparent on the face of the record, and (iii) existence of any analogous ground. Whether the new documents which were not part of the writ petition can be considered in the review jurisdiction and whether that would constitute an error apparent on the face of record warranting review jurisdiction? - Admittedly, the application for taking additional documents on record was filed by the review petitioners before the writ appellate court on 21-10-2022 and no reason has been assigned as to why documents 'A' to 'R' filed before the writ appellate court, could not be filed before the writ court particularly when the return was filed by the review petitioners before the writ court on 11-12-2017. It is not the case of the review petitioners that these documents were not available to them when the return was filed and writ petition was heard. The application for taking additional documents on record filed before the writ appellate court is conspicuously silent in this regard and the review petitioners were obliged to state in the said application that these documents could not be filed despite due diligence. As such, I do not find any error apparent on the face of record warranting exercise of review jurisdiction. In that view of the matter, the review petition deserves to be and is accordingly dismissed, in limine
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2024 (10) TMI 86
Assumption of jurisdiction u/s 147/148 r.w.s 151 - wrong assumption of jurisdiction u/s 147 instead of statutory path available u/s 153C - case reopened beyond period of four years - information has been received from Investigation Wing, New Delhi adverse to the assessee - Bogus LTCG - addition u/s.68 on account of share capital treating the same as an accommodation entry - HELD THAT:- Reluctance of the AO to initiate reopening proceedings based on some generalized and uncorroborated information. The notice under Section 148 of the Act on the last day (despite availability of so called information) was impliedly under compulsion to save on limitation. No independent inquiry appears to have been made by the AO in the long intervening period including the fate of assessment of the so called entry providers. Thus, the circumstances would show that the AO has proceeded on dotted lines as dictated in the information received. To demonstrate the inherent lack of application of mind, firstly, by the AO under Section 148(2) and thereafter, by the PCIT u/s 151 of the Act, the assessee points out that the financial year is wrongly mentioned, approval granted by the PCIT based on incomplete Performa and also satisfaction of the Addl. CIT that the case requires verification which is not the same expression as the chargeable income has escaped assessment referred to in the main provision of Section 148 of the Act. On perusal of the objections raised on behalf of the assessee, we find that for multiple reasons, on standalone and cumulative basis, the reopening under Section 147 of the Act does not meet the strict requirement of law at all and thus, jurisdiction usurped under Section 147 is apparently without sanction of law. We thus find overwhelming potency in the plea of the assessee that reasons recorded and approval granted thereon u/s 151 do not meet the requirement of law and hence the issuance of notice under Section 148 based on cryptic reasons combined with a mechanical approval of the Pr.CIT under Section 151 do not pass the test of judicial scrutiny. We thus have no hesitation to hold that the notice issued under Section 148 is without jurisdiction and consequently reassessment framed for Assessment Year 2010- 11 based on invalid notice, is bad in law and hence quashed. Assessee appeal allowed.
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2024 (10) TMI 85
Rejection of application u/s 12A(1)(ac) (iii) and consequential order of non granting of approval u/s 80G (5) read with Rule 11AA - CIT(E) rejected the application citing lack of proof regarding the activities being carried out by the trust . HELD THAT:- It is the case of the assessee that the assessee is running the school in accordance with the objects of the appellants society and to substantiate the same, the assessee has produced copy of balance sheets as on 31/03/2019 to 31/03/2022, copy of registration of society, copy of memorandum of society and copy of Form No. 10C dated 08/02/2022 (provisional registration granted by PCIT/CIT(A)). PCIT has not considered and tested the veracity of those documents while observing that there is no proof about the activities being carried out by the trust . Apart from the same, in our opinion, CIT(A) ought to have followed the ratio laid down by in the case of Anand Society and Educational Trust [ 2020 (2) TMI 1293 - SUPREME COURT] Considering the above facts and circumstances, we restore the matter to the file of the Ld. CIT(E) for deciding the applications filed by the assessee afresh for registration u/s 12AB and the approval under 80G(5) of the Act after giving due consideration to the documents provided by the Appellant and decide the same on hearing the applicant. Appeals filed by the assessee partly allowed for statistical purposes.
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2024 (10) TMI 84
Addition u/s 56(2)(x) - transfer of tenancy right - revenue has agitated the issue on the ground that there is no tenure mentioned in the agreement related to the transfer of tenancy right - HELD THAT:- Assessee is purely a tenant under the landlord and paying rent of Rs. 700/- pm. In exchange of the rent, the assessee is only getting the right to stay or some modification in the property, but there is no ownership right is vested with the assessee, which attracts provisions of section 56(2)(x) of the Act. The transfer of property is guided by the Transfer of Property Act, 1882. Section 56 of the Transfer of Property Act deals with the rights of a buyer who purchases one or more properties from an owner who has mortgaged two or more properties to one person1. In the absence of a contract to the contrary, the buyer is entitled to have the mortgaged-debt satisfied out of the property or properties not sold to him, so far as the same will extend, but not so as to prejudice the rights of the mortgagee or persons claiming under him or of any other person who has for consideration acquired an interest in any of the properties. The right of transfer is vested with selling right and right to mortgage of the property. Factually, the revenue was not able to bring any such evidence for transfer of property as per guided by the Transfer of Property Act, 1882. AR respectfully relied on the decisions pertaining to Section 50C of the Act. However, we, with due respect, rely on the findings in the orders of Greenfield Hotels Estates (P.) Ltd. [ 2016 (12) TMI 353 - BOMBAY HIGH COURT ] and The Bombay Drug Distributors [ 2024 (2) TMI 1438 - ITAT MUMBAI] - We find that the addition is unjustified on the basis of the tenancy right. We set aside the impugned appeal order and the addition is deleted. Appeal of assessee allowed.
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2024 (10) TMI 83
Assessment order passed u/s. 153A - incriminating material found during search or not? - addition as declared by the assessee as agriculture income in the return of income, u/s. 68 on the ground that no evidence of agriculture activity was provided by the assessee - HELD THAT:- The Hon ble Supreme Court in the case of PCIT vs. Abhisar Buildwel (P.) Ltd.[ 2023 (4) TMI 1056 - SUPREME COURT] has clearly held that no addition can be made in a completed assessment u/s. 153A of the Act unless an incriminating material is found during the search. In the present case, the A.O has not pointed to any such material with respect to the agriculture income or the capital gains. The addition as unexplained agriculture income u/s. 68 of the Act was merely on the basis of lack of evidence and no incriminating material was brought on record to support this addition. A.O had accepted assessee s agriculture income in the assessment for other years u/s. 153A of the Act. Similarly, with regard to the disallowance of deduction u/s. 54B of the Act on sale of agriculture land, the A.O has not relied on any incriminating material to show that land sold was not agriculture land. The assessee had already disclosed the capital gain in the return of income and the disallowance is based on only on the lack of further documentary evidence which does not meet the threshold required u/s. 153A of the Act for a completed assessment. Addition made by the A.O were not justified. Decided in favour of assessee.
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2024 (10) TMI 82
Delay in deposit of PF/ESI - deduction u/s 36(1)(va) in respect of delayed deposit of amount collected towards employees' contribution to PF cannot be claimed when deposited within the due date of filing of return even when r/w Section 43B - HELD THAT:- The issue relating to ground taken by the assessee has come to rest and is no longer res-integra by the verdict of Chekmate Services Pvt. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] wherein it has been held that deduction u/s 36(1)(va) in respect of delayed deposit of amount collected towards employees' contribution to PF cannot be claimed when deposited within the due date of filing of return even when read with Section 43B. Decided against assessee.
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2024 (10) TMI 81
Denial of exemption claimed u/s 11 - delay in filing form 10B - HELD THAT:- There were circulars available at the time when the assessee had made applications to condone the delay in filing form 10B which has not been considered at all. It is further noted that, CIT(A) has also not condoned the delay by observing that there were no sufficient cause explained by the assessee which is contrary to the fact as enumerated here in above. In the interest of justice, we remit this issue to the AO to consider the claim of the assessee in accordance with law by carrying out necessary verification of form 10B filed by the assessee. AO shall take form 10B on record and verify the exemption claimed u/s. 11 in accordance with law. Needless to say that proper opportunity of being heard must be granted to assessee in accordance with law. Grounds raised by the assessee stands partly allowed for statistical purposes.
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2024 (10) TMI 80
Revision u/s 263 - claim of prior period depreciation - HELD THAT:- Assessee submitted that it was a company assessee paying taxes at a fixed rate. A detailed table was filed before us showing that the assessee had paid taxes in all the preceding year and by allowing depreciation of prior periods in the relevant earlier years to which it pertained would have resulted in refund of equivalent amount being generated as of the tax demand being sought to be raised in the impugned year by disallowing the same. Therefore the entire exercise of allowability of claim of depreciation of earlier years in the impugned year or the year to which it pertained was a tax neutral exercise. Even otherwise, we are aware, that even if the assessee had returned losses in any preceding year, the assessee was entitled to claim the unabsorbed depreciation of that year as the depreciation of the succeeding year in terms of section 32(2) of the Act. Irrespective of the fact of the assessee having returned profits or losses in the preceding years, the allowance of claim of depreciation of earlier years in the impugned year or the year to which it pertained was clearly a tax neutral exercise. There is therefore no loss of revenue to the department by allowing the claim of prior period depreciation in the impugned year. The assessee could not have been denied depreciation in preceding years for not having claimed so and if so allowed, there is no loss of Revenue to the Department as noted above by us. There is no prejudice therefore caused to the Revenue and exercise of revisionary jurisdiction, therefore, in the present case is, unwarranted since it fails to satisfy the twin primary conditions of the assessment order being erroneous and causing prejudice to the Revenue, both of which conditions need to be satisfied for a valid exercise of revisionary power u/s 263 of the Act. We do not agree with the ld.Pr.CIT of the assessment order being erroneous causing prejudice to the Revenue for having allowed the claim of prior period depreciation and the order passed by the ld.Pr.CIT, therefore, on this count is set aside. Issue of tax deducted at source on rent not being examined by the AO . - Assessee fairly agreed that the same was not examined during the assessment proceedings. But he pointed out that it was explained to the CIT that the assessee had deducted TDS on rent on which provisions of TDS was applicable pointing out that while the assessee had claimed rent expenditure of Rs.2.50 crores, TDS had been deducted on the expenses of Rs.55,34,961/- while the balance amount of expenditure of Rs.1,95,22,321/- did not attract provisions of TDS at all. The ld.counsel for the assessee further pointed out that in the assessment order passed by the AO in consequence to the order passed u/s 263 of the Act, the AO was satisfied with the explanation of the assessee, and no addition had been made to the income of the assessee on account of non-deduction of TDS on rent expenses as per the provisions of section 40(a)(ia) of the Act. Admission of assessee that the issue of tax at source on rent expenses was not examined by the AO at all, we do not find any infirmity in the order of the ld.Pr.CIT holding the assessment order erroneous on this count. The order of the PCIT u/s. 263 of the Act is partly confirmed on the issue of non-examination by the AO of TDS on rent expenses, while his finding of the assessment order being erroneous causing prejudice to the Revenue on account of allowance of claim of prior period depreciation is set aside. Appeal of the assessee is partly allowed.
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2024 (10) TMI 79
Denial of exemption u/s 11 - appellant has not filed Form 10 indicating the reasons for accumulation of income - as per CIT(A) mere investments in FD is not sufficient to claim exemption but the appellant needs to accumulate income in terms of section 11(2) by filing Form 10 - HELD THAT:- The appellant is a Trust managed by Endowment Department, State Govt. of Telangana. The appellant manages a temple called Sri Laxmi Narsimha Swamy Temple. As per the objects of the appellant Trust, the surplus, if any, is fully applied for the benefit of general public at large and no part of the income has been used or given for the benefit of any Trustees or Executive Committee Members. As admitted fact that the assessee itself has declared surplus income and has not paid any tax which is evident from ITR Form filed for the impugned A.Y. The appellant argues that by mistaken of law and also in absence of necessary staff who can do the relevant work, the appellant could not exercise the option u/s 11(2) and filed Form 10 along with return of income. We find that the appellant has filed Form 10 on 17.06.2024 along with resolution dated 1/8/2019. The appellant has also filed petition for condonation of delay on 27.06.2024 before the concerned authority and the said application is pending for disposal. Therefore, appellant Trust is managed by Endowment Department, Govt. of Telangana and the sole objective of the appellant is to provide benefit to the general public at large, in my considered view, an opportunity should be given to the assessee to see the outcome of the petition filed by the appellant for condonation of delay in filing Form 10. Thus, set aside the order passed by the learned CIT (A) and restore the issue back to the file of the Assessing Officer and direct the Assessing Officer to reconsider the issue in light of Form 10 filed by the assessee along with resolution of executive committee, after disposal of application filed by the appellant for condonation of delay in filing Form 10 before the Pr. CIT (Exemption) New Delhi. Assessee appeal allowed for statistical purposes.
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2024 (10) TMI 78
Denial of exemption u/s 12A/10(23C)(iiiab) - provisional registration u/s 12A of the IT Act for three years was granted to the assessee trust - HELD THAT:- If the assessee trust was granted registration u/s 12A of the IT Act during the pendency of assessment proceedings for any previous assessment year and the objects and activities remains same for such assessment year, the benefit of exemption u/s 11 and 12 shall be available to the assessee for that year for which assessment proceedings are pending. In the instant case in hand, we find that provisional registration u/s 12A of the IT Act for three years was granted to the assessee trust on 07.04.2022 and the return of income was processed by CPC on 27.10.2022 therefore, in the light of second proviso to sub-section (2) of section 12A of the IT Act the assessee trust was entitled to get the benefit of exemption u/s 11 and 12 of the IT Act. It is also found that when ld. Addl./JCIT(A) passed the first appeal order the assessee trust was already approved by CIT(Exemption), Pune u/s 12A of the IT Act for five assessment years i.e. from assessment year 2022-23 to 2026-27. Also decided in Shri Krishnabai Ghat Trust [ 2019 (5) TMI 618 - ITAT PUNE] has already held that if the proceedings pending before the ld. CIT(A) and registration u/s 12AA is granted to the assessee then for such previous assessment year also he is entitled for exemption u/s 11 12 of the IT Act. We find that the assessee trust was granted registration u/s 12A of the IT Act during the pendency of assessment proceedings and Form 10B audit report was also available with the CPC while processing the return. Therefore we allow the additional ground of appeal raised by the assessee in the present appeal. We therefore direct CPC to amend the intimation issued u/s 143(1) of the IT Act in the light of Form 10B Audit Report and provisional registration certificate u/s 12A of the IT Act furnished before us. Decided in favour of assessee.
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2024 (10) TMI 77
Revision u/s 263 - incriminating material in possession of the Department specifically mentioning payment as cash on-money payment towards purchase of immovable property - HELD THAT:- We are of the considered view that there is apparently no lack of enquiry by the AO on the issue of on-money payment towards purchase of immovable property, and secondly the order passed u/s 263 by PCIT has not given any specific findings as to where the AO is wrong in passing the assessment order. We are of the considered view that the assessment order is not erroneous and prejudicial to the interest of the Revenue. In the recent case of PCIT v. Kaushik Nanubhai Majithia [ 2024 (3) TMI 1339 - GUJARAT HIGH COURT] on similar facts, while ruling in favour of the assessee no basis for conducting proceedings against the assessee merely for the fact that the developer had paid tax on the amount shown in the excel-sheet. There is no adjudication with regard to the payment, which was shown in the excel-sheet to the effect that the same was actually paid by the assessee to the developer. Even otherwise, the concurrent findings returned by the CITA and ITAT are that the document found from the premises of the third party namely excel-sheet, which is the basis of the proceedings was without any signature and there is no corroborative material to substantiate the said document - Appeal of the assessee is allowed.
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2024 (10) TMI 76
Restriction of TDS Credit in respect of Royalty income - HELD THAT:- We respectfully following the order of the Co-ordinate bench of the Chennai Tribunal in assessee s own case [ 2024 (1) TMI 1324 - ITAT CHENNAI] we direct the ld.AO to follow the same direction for this AY 2015-16 also as directed by the Tribunal in AY 2020-21 considering the facts and circumstances of the case, we direct Ld. AO to allow full TDS credit to the assessee which is otherwise available as per Form 26AS.
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2024 (10) TMI 75
Legality of proceedings due to non-communication of case transfer u/s 127 - main contention that no information about change of incumbent was communicated to the assessee, thereby, the assessee has been deprived from exercising his right to be reheard conferred by the proviso to section 129 - HELD THAT:- We find that this ground is raised without prejudice to the additional ground No. 1 2. In the aforementioned paragraphs, we held that there is no applicability of section 127 of the Act to the facts of the present case and the assessment proceedings are valid under law. Against the second additional ground, we held that the notice u/s 143(2) of the Act is not barred by limitation. We hold that there is nothing remain for the additional ground raised by the ld. AR as there is no significance for the reason that the assessee participated in the assessment proceedings through his authorized representative, which is evident from para 2 of the assessment order. Therefore, the contention of the ld. AR that the notice under section 143(2) r.w.s. 129 does not contain any information about change of incumbent, is not justified. Thus, the additional ground raised by the ld. AR on behalf of the assessee is dismissed. Action of the CIT(A) in not deciding the validity of revised return filed on 05.03.2014 - DR submits that the AO issued notice u/s 143(2) of the Act is with reference to the revised return of income and argued that the AO conducted the assessment proceedings based on the revised return of income as filed by the assessee - HELD THAT:- CIT(A) containing gist of arguments an assessment based on non-est return of income , whereas, the impugned order was passed on 28.12.2018. On a careful examination of the same, we find no indication proof of receipt, filed, any sign of Office of the CIT(A), therefore, we hold that there was nothing before the ld. CIT(A) to decide the issue an assessment based on non-est return of income . Be that as it may, the assessee contended that the entire assessment proceeding is illegal in the eye of the law for not informing about the transfer of case from one jurisdiction to another jurisdiction as per section 127 of the Act in first additional ground. We discussed the said additional ground in the aforementioned paragraphs, where we held that the provisions of the section 127 of the Act are not applicable and held the entire assessment proceedings are valid under law. Therefore, since, we held that assessment proceedings are valid under law, again remanding the matter to the file of the CIT(A) on the issue of deciding as to whether the assessment proceedings made under revised return of income is valid or not does not arise. Therefore, in view of our decision in additional ground No. 1, we find no force in the argument of the ld. AR in remanding the matter to the file of the ld. CIT(A) Thus, ground No. 2 raised by the assessee fails and it is dismissed. Validity of exercise of re-drawing cash book - Tribunal in assessee s own case for AY 2008-09 to 2012-13 held that no explanation was offered by the assessee, failed to discharge the burden to prove the source of income of the assessee and confirmed the order of the AO in computing the unexplained income by redrawing the cash book and peak value of the credit, which was arrived after due credit for the amount of cash withdrawn from the bank. On an examination of the assessment order, we find that the AO adopted the same method as it was adopted in AYs 2008-09 to 2012-13, which is clear from the assessment order. AR did not bring on record any view contrary to the view taken by the ITAT in assessee s own case for the AYs. 2008-09 to 2012-13. Thus, we find no infirmity in the order of the ld. CIT(A) in confirming the order of the Assessing Officer and accordingly, ground Nos. 3, 4 5 raised by the assessee are dismissed. Addition towards credit card payments - AO with AIR information found the assessee made credit card payments - AO added the same to the total income of the assessee for not producing any evidence in substantiating the payments - There was no evidence before the authorities below and even before us to substantiate the credit card payments, we find that the facts before the ITAT Delhi Bench are not similar to the facts on hand and thus, the Delhi Bench order in the case of Shivam Industries [ 2024 (2) TMI 1399 - ITAT DELHI] is not applicable to the present case. Reliance of Mumbai Bench decision in the case of ANS Law Associates [ 2014 (12) TMI 1201 - ITAT MUMBAI] , the Tribunal remanded the matter back to the file of the AO for his consideration afresh. We note that the AO made the addition solely on the basis of AIR information and the assessee, therein, denied the receipt of income from a particular source. It was contended that it is for the AO to prove that the assessee has received the income as the assessee cannot prove with evidence. We find the facts and circumstances in the said case are not similar to the facts of the present case and the finding of the ITAT Mumbai bench is not applicable to the facts on hand. Admittedly, there was no evidence before us to substantiate the credit card payments, except by placing reliance on case law as discussed herein above and thus, we find no infirmity in the order of the ld. CIT(A) and we agree with the reasons recorded by the ld. CIT(A). Appeal filed by the assessee is dismissed.
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2024 (10) TMI 74
Validity of reassessment proceedings - Bogus LTCG/Sham transactions - reasons to believe v/s suspect - as argued notice u/s 148A is not valid for the reason that the AO has re-opened the assessment without any material connecting the assessee to the alleged sham transaction and that the assessee was not provided with the documents relied on by the AO for the purpose of reopening the assessment - HELD THAT:- AO has not brought anything on record to implicate the assessee that he in any manner is involved in the sham transaction. It is also relevant to mention here that the assessee is a regular investor which is substantiated by the significant investments made by the assessee in mutual funds etc. (refer statement of investments submitted). Considering the facts of the present case and the decision of Karan Maheshwari [ 2024 (3) TMI 953 - BOMBAY HIGH COURT ] we hold that the notice issued by the AO under section 148A is not sustainable and accordingly the addition / disallowance made in the reopened proceedings is liable to be quashed. Assessee appeal allowed.
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2024 (10) TMI 73
Assessment u/s 153A - Whether nothing incriminating was found from the premises of the assessee? - HELD THAT:- Documents and statements and while applying the law laid down in the case of Abhisar Buildwell [ 2023 (4) TMI 1056 - SUPREME COURT] and regarding the preceding year, the impugned order Ld. CIT(Appeal) also deserves to be set aside, when there is no incriminating material said to have been recovered or found at the time of search and seizure, involving the assessee. Assessment on the basis of sales made by the assessee to the two parties - While making assessment, no doubt was expressed regarding movement of goods concerning said sales. Even there is no dispute concerning corresponding purchases said to have been made by the assessee. Stock details were accepted by the AO - In view of all this, it is beyond comprehension as to how the AO invoked the provisions of section 68 of the Act. Calculation of a different Profit Margin - When provisions of section 68 of the Act could not be invoked the calculation of the profit margin at the rate of 8%, by Ld. CIT(Appeal) deserves to be set aside. Even otherwise, in the case of the assessee itself, referred to above, as regards findings about profit margin relating to sales made to the three parties mentioned therein, Co-ordinate Bench of the Appellate Tribunal expressed surprise over applying rate of profit margin different from the profit margin applied to the rest of the sales, and consequently held the impugned order to be erroneous. Similarly, here, the impugned order passed by CIT(A) applying rate of profit margin different from the profit margin applied to the rest of the sales, deserves to be set aside.
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2024 (10) TMI 72
Income deemed to accrue or arise in India - Taxability of gains on foreign exchange transactions under the India-Spain DTAA - reasons for bringing the LTCG to tax in India is that as per Article-14(4) the share of immovable property is more than 50% of the total assets of the assessee company and that any gain from alienation of shares of the company whose property consists principally immovable property, is taxable in India HELD THAT:- As per Article-14(4) the gains from alienation of shares of the capital stock of a company (the assessee in this case) the property of which consists, directly or indirectly principally of immovable property situated in a contracting state (India) may be taxed in that State (India). Therefore, the revenue is contending that the immovable property owned by the assessee is more than 50% and therefore, the gain arising on the transfer of shares would result in capital gain in India. Revenue in this regard rejected the valuation report submitted by the assessee and also the valuation done with regard to the overall other assets owned by the assessee. From the table extracted in the earlier part of this order, we notice that the value of immovable property as a percentage of total assets of the assessee does not exceed 50% either based on book value or as per the Fair Market Value. Therefore, we see merit in the submission of the AR that Article-14(4) of India-Spain DTAA cannot be applied in assessee's case on this count. It is an undisputed fact that assessee is holding only 9.65% of the shares indirectly in IMI Investments Two Ltd and therefore applying the ratio of the above decision it cannot be said that such holding is towards any controlling interest. As also relevant to mention here that as per UN Model Convention commentary, the provisions of Article 14(4) come into effect to prevent the case of indirect transfer of ownership of immovable property by transfer of shares owning these properties. There is merit in the submission of AR that Article 14(4) of DTAA between India and Spain cannot be applied in assessee's case. We hold that Article-14(4) of the DTAA between India and Spain cannot be applied in assessee's case and therefore, the capital gain arising out of transfer of shares of the IMI Investments Two Ltd. cannot be taxed in India. Accordingly, we direct the AO to delete the addition made in this regard. Assessee appeal allowed.
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2024 (10) TMI 71
Denial of exemption u/s 10(23C)(iiiad) - Addition of unexplained cash credit u/s 69A - HELD THAT:- It is also observed that the assessee is granted registration u/s.12AA with effect from 23-02-2019 (i.e. A.Y. 2019-20), wherein the activities mentioned are Relief of the poor, Education, Medical Relief which indicates that the trust is not exclusively engaged in the education. AO has treated the status of the assessee as an Association of Persons (AOP) for the relevant assessment year, due to the lack of registration u/s 12A of the Act. The taxability of income arising from cash deposits in the bank account of the trust, in this context, becomes a crucial matter. In the absence of a valid registration u/s 12AA, the income of the trust is not eligible for exemption under Chapter III of the Act and, therefore, must be considered taxable. Assessee s contention that the cash deposits in the trust's bank account relate to hostel receipts attributable to third parties (i.e., the owners of Ideal Hostel and Naman Hostel) has not been adequately substantiated through documentary evidence or a formal agreement establishing the relationship between the trust and the hostel owners. In the absence of such documentation, the income relating to the cash deposits in the trust s account should be considered in the hands of the assessee, i.e., the trust, as per the provisions of the Income Tax Act. As imperative that the CIT(A) to re-examine the classification of the trust as an AOP and the tax implications arising from this classification. In particular, CIT(A) must ensure that any income deposited in the trust's account that is not backed by documentary evidence supporting its attribution to third parties is appropriately taxed in the hands of the trust. In conclusion, the order of the CIT(A) is set aside and the matter is remitted back for fresh adjudication in accordance with the law. CIT(A) shall pass a reasoned order after considering all facts, evidence, and submissions made by the assessee. Appeal of the assessee is treated as allowed for statistical purposes.
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Customs
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2024 (10) TMI 70
Classification of goods - Aerosol Valve - petitioner has submitted various representations, but no decision has been taken and the bills are being raised continuously, therefore, he had to file this petition - HELD THAT:- This Special Leave Petition is disposed off by reserving liberty to the petitioner herein to submit a reminder representation to the respondent-Authorities.
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2024 (10) TMI 69
Violation of principles of natural justice - cancellation of duty drawback sanctioned to the petitioner - petitioner had failed to produce necessary Bank Realization Certificates - HELD THAT:- A reading of the Impugned Order indicates that there is a clear violation of the principles of natural justice as the Bank Realization Certificates purportedly filed by the petitioner on 30.05.2017 has not been considered while passing the Impugned Order, even if the petitioner is to be found fault with for not appearing for personal hearing on the date fixed for personal hearing in the Personal Hearing Notice dated 15.03.2021. Under these circumstances, this Court is therefore left with no other option except to quash the Impugned Order and to remit the case back to the first respondent to pass a fresh order on merits and in accordance with law within a period of three months from the date of receipt of a copy of this order. This Writ Petition is disposed of.
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2024 (10) TMI 68
Prayer for striking down and declaring para 3 (a) of the circular no. 36/2010-Customs dated 23.09.2010 issued under the Customs Act, 1962 as being ultra-vires the statutory provisions - application for conversion of the shipping bills has been rejected - HELD THAT:- It would be germane to reproduce the findings given by this Court in case of MESSRS MAHALAXMI RUBTECH LTD. VERSUS UNION OF INDIA [ 2021 (3) TMI 240 - GUJARAT HIGH COURT] while striking down para 3 (a) of the circular it was held that ' the impugned circular to the extent of para 3 (a) is ultra vires Articles 14 and 19(1)(g) of the Constitution of India as also ultra vires Section 149 of the Customs Act, 1962.' When the petitioner filed an application for conversion of the shipping bills to drawback shipping bills from 01.10.2017 to 31.03.2020, para 3 (a) of the Circular No. 36 of 2022 was already struck down and therefore the time limit prescribed therein would not be applicable to the application made by the petitioner on 01.07.2022 and the respondent No. 3 was required to consider the application for conversion of the shipping bills to drawback shipping bills as per the provision of Section 149 of the Customs Act without rejecting the same on the ground of limitation. The impugned order dated 19.04.2023 passed by the respondent No. 3 is hereby quashed and set aside. The matter is remanded back to the respondent to pass appropriate order to convert the shipping bills of the petitioner from 01.10.2017 to 13.03.2020 to drawback shipping bills while exercising its powers under Section 149 of the Customs Act, so that the petitioner becomes eligible for duty drawback as per Circular No. 88 of 2017. Petition allowed by way of remand.
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2024 (10) TMI 67
Classification of the goods imported by Petitioner - to be classified under Custom Tariff Item 8421 or under 3926? - non-consideration of entire documents - violation of principles of natural justice - HELD THAT:- As the Petitioner has not participated and the Adjudicating Authority not considered all documents, the impugned order 26th March 2024 is set aside. The matter is remanded to Respondent No. 2 for denovo consideration. Mr. Raichandani states that on or before 1st October 2024, Petitioner will file a reply to the show cause notice and also attend personal hearing as and when called upon. The Respondent No. 2 is directed to give atleast 5 working days advance notice for the personal hearing. The order to be passed shall deal with all submissions of Petitioner. Petition disposed off by way of remand.
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2024 (10) TMI 66
Rejection of application filed by the petitioners u/s 245 (2) of Cr.PC thereby refusing to discharge the petitioners and to quash the complaint - excess drawback amount demand by Additional Commissioner of Customs - HELD THAT:- Admittedly, on the basis of the original order dated 30.09.2013, produced as per Annexure-E, passed by the Additional Commissioner of Customs, the criminal proceedings was initiated by filing the complaint on 07.03.2017, in which, the petitioners, being the accused has filed an application under Section 245 of Cr.PC, seeking discharge on various grounds. The said application came to be dismissed by the learned Magistrate on the ground that the order in question is not set aside rather the same is pending consideration before the Revisional Authority. When the fact that the revision preferred by respondent No. 1 is pending consideration before the Revisional Authority, no purpose would be served if the complainant is permitted to be proceed against the petitioners. At the same time, if the accused is discharged on the ground that the original order dated 30.09.2013 is set aside and the matter is remanded back for fresh consideration, that too when the same is challenged and pending consideration before the Revisional Authority, respondent No. 1 will lose its right to prosecute the petitioner on the basis of the order in question - it is deemed appropriate to direct the learned Magistrate to stop the further proceedings against the petitioners in the pending prosecution, with liberty to respondent No. 1/complainant to revive the complaint to order on final adjudication of the dispute by the Revisional Authority i.e., The Principal Commissioner RA and Ex-Officio Additional Secretary to the Government of India. The Special court for Economical offences, Bengaluru is directed to stop the further proceedings pending against the petitioners for the present, with liberty to respondent No. 1 to revive the complaint on final adjudication of the dispute by the Revisional Authority i.e., The Principal Commissioner RA and Ex-Officio Additional Secretary to the Government of India. Writ Petition is disposed off.
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2024 (10) TMI 65
Classification of goods - Aerosol Valve - petitioner has submitted various representations, but no decision has been taken and the bills are being raised continuously, therefore, he had to file this petition - HELD THAT:- The issue with regard to classification of Aerosol Valve requires consideration at appropriate stage of adjudication, when an order is passed against the petitioner. This matter is left to be examined by the adjudicating authority at appropriate stage, in case the petitioner disputes the correctness and validity of the demand of customs duty. Petition disposed off.
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2024 (10) TMI 64
Availment of SAFTA concessional rate of duty - import of whole arecanut originally from Pakistan - concessional rate of duty under N/N. 68/2012-Cus. dated 31.12.2012 - scope of SCN - HELD THAT:- The Commissioner (Appeals) in the impugned order has held that respondent failed to fulfil the condition/criteria laid down under Rule 8 and thereby not eligible to the concessional rate of duty under N/N. 68/2012 dated 31.12.2012; however, she has allowed the benefit by observing that the procedure in challenging the certificate of origin has not been followed by the Ministry of Commerce. It is found from the records that whether the procedure has been followed or not by the Revenue was not an issue before the learned Commissioner (A), therefore, she has travelled beyond the scope of order under challenge and hence, impugned order cannot be sustained in view of the principle laid down by the Hon ble Supreme Court in the case of GUJARAT STATE FERTILIZERS CO. VERSUS COLLECTOR OF CENTRAL EXCISE [ 1997 (2) TMI 105 - SUPREME COURT] . In the present case also, neither the respondent challenged the authority of the Revenue in not following the proper procedure nor it was an issue during assessment proceedings, hence, the learned Commissioner (Appeals) has travelled beyond the scope of the issues raised, hence the order is bad in law. Consequently, the impugned order is set aside. The Revenue s appeal is allowed.
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2024 (10) TMI 63
Levy of penalty on the appellant for wrong declaration of the classification of the goods - Classification of imported goods - Surgical Microscope for Neurosurgery Zeiss OPMI Pentero with accessories - to be classified under CTH 90189099 or under CTH 90118000? - benefit of concessional rate of duty under Sl.No.473 of No.12/2012-Cus dated 17.03.2012 as amended - HELD THAT:- The appellant had disclosed the description of the goods in their Bill of Entry as Surgical Microscope for Neurosurgery Zeiss OPMI Pentero with accessories claiming the classification under CTH 90189099 along with benefit of Notification as per interpretation of the respective entry as understood by them. The Department, after accepting the classification accordingly assessed the goods and later, came to the conclusion that the classification declared by the appellant is not correct and the correct classification is CTH 90118000. Since this Tribunal has been consistently taking the view that where the description of the goods is correctly disclosed in the Bill of Entry and the relevant technical documents including brochures filed along with Bill of Entry, imposition of penalty under Section 114A in the said circumstances cannot be sustained. In the case of HIKOKI POWER TOOLS INDIA PVT LTD AND SHRI DATTATREYA JOSHI VICE PRESIDENT COMPANY SECRETARY VERSUS COMMISSIONER OF CUSTOMS, BANGALORE [ 2024 (3) TMI 137 - CESTAT BANGALORE] , in similar circumstances, this Tribunal has observed ' The goods were physically examined by the assessing officer and thereafter allowed to be cleared on payment of applicable duty. Since the goods were meant to be used for agricultural purposes, they classified it according to their understanding under CTH 84322990. We find that the appellant declared the description of the goods correctly all along during the said period. Also, the goods were examined and assessed by the Department. Once the catalogue has been submitted by the appellant during the course of assessment, therefore, it is the responsibility of the Department to ascertain from the catalogue and description its classification under the appropriate heading. This Tribunal has consistently held that once the description of the goods is correctly disclosed, wrong classification of the said goods on the basis of description cannot be the basis for invoking extended period of limitation.' There are no justification for imposition of penalty - In the result, the impugned order is modified to the extent of setting aside the penalty imposed under Section 114A of the Customs Act, 1962 - Appeal is disposed of.
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Insolvency & Bankruptcy
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2024 (10) TMI 62
Conflict between provisions of Insolvency and Bankruptcy Code, 2016 and Tamil Nadu Protection of Interests of Depositors Act, 1997 - Whether the provisions of IB Code, 2016, override the provisions of TNPID Act? - whether the proceedings initiated under TNPID Act, cannot go on in view of the provisions of the IB Code? - whether NCLT can declare the attachment made under the provisions of TNPID Act as null and void? - HELD THAT:- The TNPID Act is a special enactment which is intended to protect the rights of depositors and provide a mechanism for the disbursement of the assets of the accused apart from punishing the accused. The NCLT, Chennai Bench, has relied upon the judgment of Hon'ble Supreme Court in Innoventive Industries Limited Vs. ICICI Bank and Another [ 2017 (9) TMI 58 - SUPREME COURT ] for the proposition that the provisions of the IB Code shall have effect not withstanding anything inconsistent therewith contained in any other law for the time being in force, particularly referring to Section 238 of the IB Code, 2016. A Full Bench of this Court in S.Bagavathy Vs. State of Tamil Nadu rep.by it Secretary, Law Department, Chennai and Others [ 2007 (3) TMI 783 - MADRAS HIGH COURT ] considered the constitutional validity of TNPID Act, elaborately. One of the issues raised before the Full Bench was regarding the legislative competence of the State to promulgate the law. Taking note of the primary object of the State legislation, the Full Bench held that the enactment is meant for public safety and to protect the interest of public and applied Doctrine of parens patriae by reminding sovereign power and duty of the State to shoulder responsibilities in public interest. The Hon'ble Supreme Court in K.K.Baskaran Vs. State represented by its Secretary, Tamil Nadu and Others [ 2012 (11) TMI 205 - SUPREME COURT ], considered whether TNPID Act is beyond the legislative competency of State legislature as it falls within Entries 43, 44 and 45 of List I of VII Schedule of Constitution - The Hon'ble Supreme Court disagreed with the judgment of Bombay High Court with reference to Maharashtra Act and the subject matter covered by the Maharashtra Act does not fall within the subject matter of Sections 58-A and 58-AA of Companies Act. While holding that Courts should look at the legislation as a whole and there is a presumption that the legislature does not exceed its constitutional limits, the Hon'ble Supreme Court accepted the view that incidental trenching in exercise of ancillary powers into a forbidden legislative territory is permissible if a legislation is in substance one on a matter assigned to legislature then it must be held to be valid even though it incidentally trenches on matters beyond its legislative competence. The purpose and object of TNPID Act, which has been upheld by Hon'ble Supreme Court despite its marginal encroachment into the Central legislations, cannot be ignored. In view of the judgment of Hon'ble Supreme Court, this Court has no hesitation to hold that the order of NCLT is contrary to the settled principles of law. Therefore, this Court agrees with the submission of the learned Additional Advocate General reiterating the legal grounds raised in this writ petition. Petition allowed.
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2024 (10) TMI 61
Compliance with the repayment plan and its implications under Section 118 of the I B Code - It is the contention of the Appellants that the insolvency resolution process was not conducted as per the provisions of the Code and due process has not been followed, that the bank account details were shared at a very belated stage - HELD THAT:- The basis of the aforesaid orders of NCLT dated 07.02.2024 was that the Personal Guarantors / appellants of these Company Appeals have clearly failed to comply with the conditions of depositing the amount as per the repayment plan and that, since there was a breach of repayment plan as contemplated under Regulation 20 of IBBI (Insolvency Resolution Process for Personal Guarantors) 2019, the RP was fully within his rights to submit his report u/s 118(2) of the Code. Further in the Order passed on 07.02.2024, granting liberty to initiate Section 121, detailed reasoning has been given as to why the application preferred by the RP was considered and allowed. Part of the order of 07.02.2024 becomes relevant to be extracted to establish as to under what conditions the recall application as preferred by the appellants deserve rejection. Payment of the initial instalments cannot give a leverage or an excuse to commit subsequent default in the future repayment schedule given under the repayment plan. The initial payment which was made on 27.10.2023 and it can at the best be interpreted to express the bonafides of the Appellants towards acceptance and enforcement of the repayment plan, but it cannot be used as a foundation to grant liberty to the appellants to commit default in honouring the terms and conditions of the repayment plan. The reasons which have been assigned in the Impugned Orders for declining to recall the Orders passed on 07.02.2024, declaring the premature end of repayment plan and granting liberty to proceed u/s 121 of the Code, do not suffer from any apparent legal vices which could call for any interference by the tribunal in the exercise of the Appellate Jurisdiction, in the absence of there being any apparent factual or legal flaw. Appeal disposed off.
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PMLA
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2024 (10) TMI 60
Money Laundering - proceeds of crime - scheduled offences - vicarious liability on the companies - attachment of properties - HELD THAT:-The value of any such property or the property equivalent in value held within the country or abroad is also to be construed as proceeds of crime . Therefore, the circumstances indicated under Section 2(1)(u) of PMLA are that any property derived by a person, in result of criminal activity relating to a scheduled offence can be treated as proceeds of crime. The value of any such property or if such property is taken or held outside the country, then the property equivalent in value held within the country can be construed as proceeds of crime. Therefore, some properties, in result of criminal activity, is held outside the country, then the property equivalent in value held within the country can be attached by the Enforcement Directorate. The very object of the provision would be to protect the economic interest of the country. Therefore, the petitioners cannot take a ground that the property attached were purchased prior to the scheduled offence between the years 2010 and 2017. Explanation (2) to Section 70 of PMLA clarifies that a company may be prosecuted, notwithstanding, whether the prosecution or conviction of any legal juridical person shall be contingent on the prosecution or conviction of any individual. Therefore, it is expressly clarified under Section 70 of PMLA that a company may be prosecuted. Thus, the ground taken by the petitioners that the company cannot be held vicariously liable runs counter to Section 70 of PMLA and stands rejected. The merits involved in the Provisional Attachment Order need not be adjudicated in the present petitions filed under Section 482 Cr.P.C. - this Court has no hesitation in arriving at a conclusion that the respondent have made out a prima facie case for prosecuting the individual persons and the companies under Section 70 of PMLA. Thus, the petitioners have to establish their defence on merits and based on documents and evidences available on record. Petition dismissed.
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2024 (10) TMI 59
Money Laundering - reasons to believe - Invocation of writ jurisdiction as well as inherent jurisdiction of this Court under section 482 of the Code of Criminal Procedure, 1973 - illegal arrest and detention of the petitioner - whether arrest of the petitioner by the respondents was in consonance with the ratio laid down by the Supreme Court in the case of Arvind Kejriwal Vs. Directorate of Enforcement [ 2024 (7) TMI 760 - SUPREME COURT] , in the sense, whether there was sufficient material with the authorized officer who had recorded his reasons to believe in writing and whether there was a necessity to arrest the petitioner? HELD THAT:- In Vijay Madanlal Choudhary, the Supreme Court on the aspect of the checks on the power to arrest stated that there must be material in possession with the Authority before the powers of arrest can be exercised as opposed to the Cr.P.C. which gives the power of arrest to any police officer and the officer can arrest any person merely on the basis of a complaint, credible information or reasonable suspicion against such person. Thirdly, there should be reason to believe that the person being arrested is guilty of the offence punishable under the PMLA in contrast to the provision in Cr. P.C, which mainly requires reasonable apprehension/suspicion of commission of offence. In case of Arvind Kejriwal [ 2024 (7) TMI 760 - SUPREME COURT] , the Supreme Court has further elaborated the expression reasons to believe by stating that it is not synonymous with subjective satisfaction of the officer. The belief must be held in good faith; it cannot merely be a pretence. In the same case, it was held that it is open to the Court to examine the question whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the section. The respondent Nos. 1 and 2 seem to have already in possession of sufficient material qua the petitioner and his companies as well as alleged transactions during the arrest and interrogation of the petitioner s father, after whose release by the Special Court, the petitioner came to be arrested on 29th July, 2024 during alleged second search within four days of release of petitioner s father. The material in possession of respondent Nos. 1 and 2 prior to the arrest of the petitioner as demonstrated by the respondents appears to be with it and, therefore, respondent Nos. 1 and 2 could have arrested the petitioner at the time of alleged first search which was conducted on 26th June, 2024 itself. Thus, it is the subjective satisfaction of the respondents sans rational connection to their formation of belief i.e reasons to believe. It is deemed necessary to grant an interim relief of bail to the petitioner in light of the fact that the right to life and liberty is sacrosanct in view of the constitutional mandate. Pending the disposal of the petition, the petitioner shall be released on executing a P.R bond in the sum of Rs. 1,00,000/- with one or two sureties in the like amount to the satisfaction of the learned Special Judge under PML Act, City Civil and Sessions Court, Mumbai - In case the petitioner is unable to furnish sureties of the amount aforesaid, he be released on furnishing cash security in the sum of Rs. 1,00,000/- for a period of four weeks - The petitioner shall co-operate with the respondents as and when summoned - List the petition for admission on 12.11.2024.
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Service Tax
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2024 (10) TMI 58
Business auxiliary services - process of operating the lottery business which includes promotion, marketing and all auxiliary and incidental support services like selling, billing, collection, remitting, evaluation of prospective customers etc - HELD THAT:- The Civil Appeals are allowed.
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2024 (10) TMI 57
Permission for withdrawal of petition - writs to quash an order and settle service tax dues - HELD THAT:- The writ petition is dismissed as withdrawn, as prayed.
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2024 (10) TMI 56
Penalty under Section 78 of the Finance Act, 1994 - Levy of service tax on renting of immovable property - failure to discharge the service tax liability after collecting the same from the lessee - HELD THAT:- This Court is inclined to confirm the payment of service tax and appropriation of the same vide impugned order. Since the vires of levy of service tax on renting of immovable property is still pending before the Hon'ble Supreme Court and temporary relief has been granted to various lessee subject to deposit 50% of the service tax due demand, the Court is inclined to set aside the impugned order in so far as imposition of penalty under Sections 77 and 78 of the Finance Act, 1994 and remits the case back to the respondent to await for the orders of the Hon'ble Supreme Court and pass orders on merits in so far as penalty and adjudicate the same in terms of Section 78 of the Finance Act, 1994. This writ petition stands disposed of.
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2024 (10) TMI 55
Liability to pay service tax for the activity carried out by them considering the activity as Works Contract - relevant period is from 10.09.2004 to 30.09.2007 and 16.06.2005 to 30.09.2007 - suppression of facts or not - HELD THAT:- Hon ble Supreme Court in the matter of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] has held ' in view of our finding that the said Finance Act lays down no charge or machinery to levy and assess service tax on indivisible composite works contracts, such argument must fail. This is also for the simple reason that there is no subterfuge in entering into composite works contracts containing elements both of transfer of property in goods as well as labour and services.' Considering the activity carried out by the appellant is prior to introduction of the 'Works Contract Service and considering the facts and circumstances, the issue is squarely covered by the judgment of the Hon ble Supreme Court in the matter of Larsen Toubro Ltd., hence the appeal is allowed.
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2024 (10) TMI 54
Non-payment of service tax - lease amount recovered from the lessee under the category of Supply of Tangible Goods service - basic contention of the department for demanding service under the category of Supply of Tangible Goods service is that while providing Diesel Generator Sets on lease basis, the appellant has not transferred the right of possession and effective control on the Diesel Generator Sets and therefore, the appellant should have paid the service tax under the category of Supply of Tangible Goods service. HELD THAT:- In the present matter, the appellant have paid VAT on all the lease agreements which have been entered for supply of Diesel Generator Sets to various lessees. The agreements which have been entered into by the appellant have clearly provided that the lessees shall bear all the maintenance and operating cost of the Diesel Generator Sets during the term of lease. The other clauses of the agreement also point out the fact that lessees have the right of possession and effective control on the Diesel Generator Sets which is evidenced by the agreement which have been shown to us by the learned advocate. The identical issue has been considered and settled by this Tribunal in various decisions. This Tribunal in the case of TECHNICAL DYING SERVICES P LTD VERSUS C.C.E. S.T. -VADODARA-II [ 2024 (1) TMI 452 - CESTAT AHMEDABAD] has held that ' Cenvat credit on Digital Cinema Equipment has to be allowed, independent of taxability on lease Rentals of DCE. Accordingly we set aside the demand of Cenvat credit on Digital Cinema Equipment on merit as well as on limitation.' The VAT has been paid by the appellant on the supply of Diesel Generator Sets and therefore, service tax is not liable to be paid under Supply of Tangible Goods service - there are no merit in the impugned orders-in-original and the same is set aside - appeal allowed.
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2024 (10) TMI 53
Cash Refund of Krishi Kalyan Cess - Rejection on the grounds that there is no provision for transition of said Cess in the GST regime and only eligible credits were to be transitioned and the rest were to be lapsed - HELD THAT:- The entire provisions for transition under the Act, if read in totality, especially Section 141, Section 142 Section 174 of the Act are meant for allowing certain credits to be carried forward to the new regime for it s use in discharge of GST or refund of such certain categories which the Appellants would be otherwise entitled for under the existing law or which might accrue to him in due course on finalization of dispute, etc., but unable to utilize as such under GST. In this case, neither the cess is an eligible duty and therefore, eligible for transition and subsequent use nor they were entitled to claim refund under the existing law in accordance with prevailing rules governing refund of unutilized Cenvat credit under Rule 5. The Appellants would not be entitled for cash refund under Section 142(3) read with Section 174 of the Act. Therefore, there is no infirmity in the order passed by the Commissioner (Appeals). Appeal dismissed.
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2024 (10) TMI 52
CENVAT Credit - rejection on the ground that credit availed were not relating to provision of service and therefore confirmed the demand - revenue neutrality - HELD THAT:- When it is found that after reconciliation between the availment of the Cenvat credit under the both registration i.e. Service Tax and Central Excise, if the payment of duty equal to the Cenvat credit availed under the service tax registration which pertains to the manufacturing unit is more than disputed service tax credit, the situation will be Revenue neutral. During the denovo adjudication, the appellant have submitted the reconciliation statement to the adjudicating authority and adjudicating authority has not disputed the said reconciliation, according to which there is a payment from PLA in manufacturing unit more than the disputed service tax availed in the service tax registration. As observed by this Tribunal in the remand order dated 09.04.2014, the entire situation admittedly being a Revenue neutral the demand cannot be sustained except an amount of Rs.18,00,000/- which appellant have reversed as per the direction of this Tribunal and they are not disputing this amount. Therefore, the Cenvat credit of Rs.18,00,000/- reversed by the appellant is maintained. Being a revenue neutral situation, the demand confirmed in the impugned order is not sustainable - the impugned order is set aside, the appeal is allowed.
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2024 (10) TMI 51
Short payment of service tax - Non-payment of Service Tax on reimbursable expenses - Non-payment of Service Tax for commission received from clients during 2006-07 to 2009-10 - Non-payment of Service Tax for commission earned on Sea Freight charges during 2006-07 to 2009-10 - penalties. Non-payment of Service Tax of Rs.98,62,631/- on reimbursable expenses - HELD THAT:- The said issue has been settled by the Hon ble Apex Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. [ 2018 (3) TMI 357 - SUPREME COURT] wherein it has been held that prior to 14.05.2015, reimbursable expenses are not includable in the taxable value of services rendered by an assessee. In this case, we find that whole of the period is prior to 14.05.2015. Accordingly, the reimbursable expenses received by the appellant from their clients are not includable in the taxable value of the services provided by them. Therefore, the demand of Rs.98,62,631/- is set aside. Non-payment of Service Tax of Rs.74,56,649/- for commission received from clients during 2006-07 to 2009-10 - Non-payment of Service Tax of Rs.23,85,135/- for commission earned on Sea Freight charges during 2006-07 to 2009-10 - HELD THAT:- Tthe said amounts were collected on account of sale of space purchased by the appellant from shipping lines, which were sold to their clients at a higher value. Therefore, it is observed that the appellant has earned profit on sale of space, which does not constitute a commission received by the appellant. Hence, the same does not fall under the category of business auxiliary service . The same view has also been taken by the Tribunal in the case of International Clearing and Shipping Agency [ 2023 (11) TMI 104 - CESTAT CHENNAI] wherein it was observed ' The notional surplus earned thereby arises from purchase and sale of space and not by acting for a client who has space or slot on a vessel. Section 65(19) of Finance Act, 1994 will not address these independent principal-to- principal transactions of the appellant and, with the space so purchased being allocable only by the appellant, the shipping line fails in description as client whose services are promoted or marketed.' Admittedly, in this case, the said amounts have been earned by the appellant on account of sale of space to their clients, which had been purchased at a lower rate from the shipping lines. In these circumstances, it is a business profit earned by the appellant, which cannot be termed as a service provided by the appellant and thus the same is not chargeable to Service Tax under the category of business auxiliary service - demand set aside. Penalty - HELD THAT:- As whole of the demand has been set aside, therefore, no penalty is imposable on the appellant. The impugned order is set aside - appeal allowed.
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2024 (10) TMI 50
Wrongful availament of CENVAT Credit of the Service Tax paid on intellectual property service pertaining to Kalinga Nagar unit during the material period - input service distribution - input services - whether the CENVAT Credit availed by the appellant on intellectual property service can be denied, when the Input Service Distributor (ISD) i.e., TSL, Kolkata has availed CENVAT Credit and distributed the credit to the appellant as an ISD and the availment of CENVAT Credit at the end of TSL, Kolkata has not been disputed by the Revenue, or not? HELD THAT:- As it is an admitted fact that the availment of CENVAT Credit on intellectual property service was not disputed at the end of the ISD/TSL, Kolkata, the CENVAT Credit cannot be declared as inadmissible CENVAT Credit to the appellant who has taken the CENVAT Credit on the strength of the invoices issued by the ISD. In these circumstances, the appellant is entitled to take CENVAT Credit and accordingly, there is no requirement of reversal of CENVAT Credit by the appellant. The impugned order deserves no merit and thus, the same is set aside - Appeal allowed.
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Central Excise
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2024 (10) TMI 49
Recovery of wrongly availed as credit of service tax and cess - input service - GTA - Mediclaim premium - period from 2007-08 to 2010-11 (upto Feb/2011). GTA Service - HELD THAT:- As per exclusion (BA) to the said provision only services of general insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle was excluded. The said definition also permitted credit of outward transportation upto the place of removal when it related to activities relating to business. Further it was only from 01/04/2011, that the definition of the term Input service given under Rule 2(l) of the CENVAT Credit Rules was substituted vide N/N. 3/2011-CE(NT) dated March 1, 2011, inter alia, deleting the phrase activities relating to business , thus, limiting the wide scope of the term Input services . In CCE, NAGPUR VERSUS ULTRATECH CEMENT LTD., [ 2010 (10) TMI 13 - BOMBAY HIGH COURT] , the Hon ble Bombay High Court, examined availing credit of service tax in the context of a manufacturing unit and had held that the definition of input service is not restricted to services used in or in relation to manufacture of final products, but extends to all services used in relation to the business of manufacturing the final product, during that relevant time. Even post the amendment to the definition of the term Input service given under Rule 2(l) of the CENVAT Credit Rules, a Larger Bench of this Tribunal in the case of M/S. THE RAMCO CEMENTS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY [ 2023 (12) TMI 1332 - CESTAT CHENNAI-LB] examined whether CENVAT credit on GTA services for outward transportation of goods from the factory to the buyer s premises be denied in cases where the goods are sold on FOR (buyer s premises) basis. The order held that the place of removal whether at the factory premises or at the buyers premises has to be ascertained by applying the judgments of the Supreme Court in COMMISSIONER CENTRAL EXCISE, MUMBAI-III VERSUS M/S. EMCO LTD. [ 2015 (8) TMI 200 - SUPREME COURT] and COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [ 2015 (4) TMI 857 - SUPREME COURT] . The invoice is on FOR destination basis and no separate freight charges are included in the invoice. In the circumstances stated the GTA services form a part of the cost of the goods and are activities relating to business which in terms of the CCE, NAGPUR VERSUS ULTRATECH CEMENT LTD., [ 2010 (10) TMI 13 - BOMBAY HIGH COURT] would make it an eligible input under the definition of input services during the relevant time. Insurance premium for personal insurance services - HELD THAT:- Larger Bench of the Tribunal in the case of M/S. RELIANCE INDUSTRIES LTD., VADODRA VERSUS COMMISSIONER CENTRAL EXCISE SERVICE TAX (LTU) , MUMBAI [ 2022 (4) TMI 1357 - CESTAT MUMBAI (LB)] had examine the issue whether CENVAT credit could have been availed by the appellant on the Service Tax paid on insurance premium for availing medi-claim facility for employees who had opted for voluntary separation scheme, prior to 01/04/2011. It held that the scheme was an integral part of the employee cost and forms a part of the final product and would certainly be entitled to CENVAT credit of such service. The appellant was eligible for input credit on Service Tax paid for GTA and on insurance premium for personal insurance services, during the relevant time and the credit disallowed and demanded on the said services in the impugned order needs to be set aside along with the interest involved on the same and the penalty imposed and is so ordered. Appeal disposed off.
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2024 (10) TMI 48
Admissibility of credit of service tax paid on Goods Transport Agency Service (GTA) availed by the appellant for outward transportation of goods on Free on Road (FOR) destination basis from the factory gate or depot of the appellant to the premises of the customers - HELD THAT:- The Revenue has not disputed that the cement is sold on FOR basis as per the allegations made in the show cause notice. Once the sale is on FOR destination basis, the ownership in the goods gets transferred only at the customer s premises and, therefore, the present appeal needs to be allowed in favour of the appellant. The appellant is entitled to avail the cenvat credit of service tax paid on GTA Services for outward transportation of cement on FOR destination sales from the factory/depot to the customer's premises in terms of Rule 2(l) of Cenvat Credit Rules, 2002 - The impugned order, therefore, deserves to be set aside - Appeal allowed.
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2024 (10) TMI 47
Clandestine clearances of their finished products - Copper wire/ bare Copper wire -Shortage of goods - demand solely on the basis of the statement of transporters and buyers without providing the opportunity of cross examination and having disregard to the Section 9D of the Central Excise Act, 1944 - violation of principles of natural justice - HELD THAT:- It is found that the case of the department against the Appellant is that, appellant had received inputs without payment of duty and after processing it, sold their excisable goods without payment of duty clandestinely without preparation of Central Excise invoices and without accounting the same in daily stock account and without showing the same in their periodical returns from time to time. Revenue in support of above allegation relied upon the statements of Shri Sushil Kumar Agarwal proprietor of M/s. Shivani Metals and M/s. Somain Enterprises, Shri Pankaj Agarwal power of attorney Holder of M/s. Shivani Metals and Somian Enterprises, Shri Bupendra G. Patel factory manager of M/s Shivani Metal and various buyers and transporter. The entire proceedings have been initiated on the basis of statements of above persons. The appellants have pleaded that the only opportunity of cross-examination of 3 person i.e. Shri Dwarkanath Khajuria, Shri Lal Bahdur Yadav and Shri Krishna Kumar (Transporters) was provided but the said witness did not appear. It is the case of the appellant that demand of duty has been confirmed by the Ld. adjudicating authority on the basis of the statements of transporters and other persons whose cross-examination have not been allowed. No other corroborative evidence is available on record but the statements which too have not been allowed to be examined. The reasons assigned by the authorities below to reject cross-examination is clearly unsustainable in legal parlance for the obvious reason that no adverse inference can be drawn against assessee whose statements are to be relied by the Revenue without ascertaining the veracity in the absence of cross-examination. Therefore the said statements cannot be relied upon as admissible evidence in terms of the provisions of Section 9D of the Act. It is also found that the allegation against the appellant in present matter is that they have procured unaccounted raw materials and cleared illicitly the clandestine manufactured finished goods without payment of duty, however in the present matter no efforts were made by the Revenue to reveal the truth by examining the manufacturing process to ascertain the raw material consumed and resulted output. Further no raw material supplier was produced by the revenue in the present matter. Therefore, the charge of clandestine removal of goods is not sustainable against the appellant. As regard the demand of central excise duty of Rs. 60,789/- on the goods 2305.430 Kg. found short during the search and admitted by the staff Shri Bhupendra G Patel we find that the admission of shortage by the staff does not conclusively establish the charges of clandestine removal of goods. It is further found that there is no other corroborative evidence brought on record with respect to the allegation of clandestine removal of said goods, which is a serious charge and has to be proved beyond doubt as held by the Hon ble High Court in the case of M/S. CONTINENTAL CEMENT COMPANY VERSUS UNION OF INDIA OTHERS [ 2014 (9) TMI 243 - ALLAHABAD HIGH COURT] and COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, LUDHIANA VERSUS M/S ANAND FOUNDERS AND ENGINEERS [ 2015 (11) TMI 1166 - PUNJAB HARYANA HIGH COURT] . The charge of clandestine removal against the appellant could not be established by the revenue beyond doubt. Therefore the impugned order is not sustainable - the impugned order is set aside - Appeal allowed.
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2024 (10) TMI 46
100% Export Oriented Unit (EOU) - whether the exemption Notification No.06/2006-CE dated 01.03.2003 and Notification No.21/2012-Cus. dated 17.03.2012 are available on the inputs used in manufacture of Solar Module (Non-conventional Energy Device)? - eligibility for exemption from payment of SAD - exemption from payment of BCD in respect of Solar PV Glass and Edge Tape - demand for the period from 01.04.2009 to 30.04.2011 is barred by limitation - extended period of limitation. HELD THAT:- In the present case, the appellant sought exemption on various parts procured locally as well as imported, used in the manufacture of Solar Module (non-conventional energy devices) at Sl. No.11 and 20 of the said List 5 against Sl. No.84 of List 5 of Notification No.6/2006-CE dated 01.03.2006. Sl. No.21 of List 5 allows exemption to parts consumed within the factory of production of such parts for the manufacture of goods specified at Sl. No.1 to 20 of the said List. Thus, it is very clear that the parts which are manufactured within the factory can be allowed when consumed in the manufacture of items mentioned at Sl. No.1 to 20. Also, the Tribunal in the case of M/s. Sova Solar Limited [ 2020 (7) TMI 485 - CESTAT KOLKATA] allowing the exemption for the parts manufactured and used within the factory of production, denied exemption to the parts procured from outside and used in the manufacture of goods specified at Sl. No.1 to 20. This Tribunal in a similar set of facts and circumstances in Raydean Industries case [ 2022 (4) TMI 1155 - CESTAT NEW DELHI] , the claim of the appellant that Module Mounting Structures whether could be considered as part of Solar Power Generating System . Sl. No.332 of the Notification No.12/2012-Cus. dated 17.03.2012 allowed Non-conventional Energy Device specified in List 8. The appellant claimed the parts as Solar Power Generating System where a specific mention about the parts consumed within the factory and production of such parts for manufacture of the goods specified at Sl. No.1 to 20 has been prescribed. The principle laid down by the Hon ble Supreme Court in the case of M/s. Dilip Kumar and Co. [ 2018 (7) TMI 1826 - SUPREME COURT] , the claim of the appellant that benefit of Notification No.6/2006-CE dated 01.03.2006 and No.12/2012-CE dated 17.03.2012 to the parts procured and used in the non-conventional devices or systems specified in List 5/List 8 of the respective Notifications, as the case may be, cannot be allowed and the Commissioner has rightly denied the benefit of the said exemption Notifications - Since the appellants are not entitled to avail benefit of Notification No.6/2006-CE dated 01.03.2006 and Notification No.12/2012-CE dated 17.03.2012, that is additional duty of Customs under Section 3 of Central Excise Tariff Act, 1975 (CVD) being leviable, therefore, the additional duty leviable under subsection 5 of Section 3 of the Customs Tariff Act, 1975 (SAD) cannot be extended to the appellant. The appellant in para 15 of their written submissions made a specific claim about the benefit of exemption Notification No.25/1999-Cus. dated 28.02.1999 and Notification No.24/2005-Cus. dated 01.03.2005 on the goods used in the manufacture of solar cells / modules which are exempted from customs duty and therefore, the duty foregone at the time of import on such goods used in the manufacture of goods cleared by the appellant at Nil rate of duty would any way be Nil . Thus, though there is a claim advanced by the appellant with regard to exemption under Notifications, which the Commissioner has not examined, hence to examine the said issue, the matter needs to be remanded. Extended period of limitation - HELD THAT:- The issue relates to interpretation of admissibility of Notification No.6/2006-CE dated 01.03.2006 and Notification No.12/2012-CE dated 17.03.2012 as allowed to be claimed as an alternative plea by the Tribunal in the de novo proceedings, thus, there are no reason to invoke extended period of limitation. The denial of benefit of exemption N/N. 6/2006-CE dated 01.03.2003 and N/N. 12/2012-CE dated 17.03.2012 and denial of benefit of exemption from SAD under N/N. 20/2006-Cus. dated 01.03.2006 and N/N. 21/2012-Cus. dated 17.03.2012 are upheld; differential duty with interest to be calculated for the normal period of limitation; penalty is set aside - Admissibility of exemption from BCD on Solar Photovoltaic Glass under of N/N. 25/1999-Cus. dated 28.02.1999 and No.24/2005-Cus. dated 01.03.2005 to be examined. The matter is remanded to the Commissioner for computation of liability - Appeal disposed off by way of remand.
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CST, VAT & Sales Tax
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2024 (10) TMI 45
Assessment order for recovery of alleged dues pertaining to the Financial Year 2014-15 - order issued post approval of resolution plan under IBC, 2016 - HELD THAT:- Considering the observation of the Hon ble Apex Court in case of M/s. Ghanashyam Mishra Sons (P) Ltd. [ 2021 (4) TMI 613 - SUPREME COURT ], it is opined that the petition deserves to be allowed - it was held in the said case that ' That once a resolution plan is duly approved by the Adjudicating Authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan.' Impugned assessment order dated 08.01.2021 and the subsequent notices issued by the respondent are hereby quashed and set aside - petition allowed.
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2024 (10) TMI 44
Challenge to demand notice - petitioner seeks set-off of VAT payment as against entry tax liability - HELD THAT:- Section 4 of the Entry Tax Act provides for reduction in tax liability and states that where the importer of a motor vehicle remits entry tax, and becomes liable to pay sales tax under the General Sales Tax Act and additional sales tax under the Tamil Nadu Additional Sales Tax Act, 1970 as well, then liability under the General Sales Tax Act shall be reduced to the extent of entry tax paid. For the availment of benefit under Section 4 of the Act, the assessee is required to establish a one-to-one nexus between the entry tax and VAT payment and prove that the payments relate to the same motor vehicles. It is only upon such onus being discharged, then the benefit of Section 4 would be available to the assessee. The respondents have only taken note of the shortfall under statement II. The conflict can only be resolved if the liability under both enactments is crystallized. The admitted position as on date is that while returns filed under the TNVAT Act have been processed and assessments completed, the returns of entry tax filed on 16.04.2008 are pending. This Writ Petition is disposed off.
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Indian Laws
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2024 (10) TMI 43
Appeal against the judgment of the National Consumer Disputes Redressal Commission (NCDRC) dismissing the appeals challenging the Maharashtra State Consumer Disputes Redressal Commission's order - HELD THAT:- Undisputedly an irrevocable power of attorney dated 6-7-2013 was executed by the appellants in favour of the Respondent No.2 along the JAV of the same date, pursuant to which the Respondent No.2 had undertaken to develop the land in question. It further appears that though allegedly the said power of attorney was revoked by the appellants vide the letter dated 12-8-2014, the JAV has not been revoked so far and the same still continues to be in force. As rightly submitted by the learned counsel for the respondents, in the letter daeted 12-8-2014, the appellants had stated to be not liable Henceforth , i.e. after the said letter was sent - It is also not denied that the appellants have not taken any action whatsoever against the respondent No.2 with regard to the alleged non-compliance of the terms and conditions of JAV by the said Respondent. Under the circumstances, it does not lie in the mouth of the appellants to say that the appellants are not liable for the acts of Respondent No.2. The `NCDRC having considered all the issues with regard to the joint liability of the appellants as well as the Respondent No.2, there are no good ground to interfere with the same. The Appeals being devoid of merits and are dismissed.
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2024 (10) TMI 42
Dishonour of Cheque - legally recoverable debt or not - rebuttal of presumption - petitioner has been convicted and sentenced under Section 138 Negotiable Instruments Act, 1881 - HELD THAT:- The first ground which has been taken on behalf of the petitioners is that the complainant has failed to step into the witness box and only CW1 Sh. Ritin Behl the SPA holder, who has been examined and he had not personal knowledge of the facts involved in the present case. First and foremost, even though CW1 Sh. Ritin Behl had deposed on the basis of an SPA but it is a settled law that irrespective of the Special Power of Attorney in favour of the witness, he is a competent witness to depose about the facts which are in his knowledge. Furthermore, the entire case under Section 138 N.I. Act was based on the documents - it was for the petitioners to have led cogent evidence in their defence, which they have miserably failed to do. Once the signatures on the cheque were admitted, the presumption under Section 139 NI Act worked in favour of the complainant and the onus was on the petitioners/accused to prove that the cheques were not issued in discharge of the legally recoverable debt. However, neither the authenticity of the letter has been questioned in the cross-examination of CW1 nor is there any other cogent evidence brought to disprove that the cheque was not in discharge of any legally recoverable debt. The Petitioner has been rightly convicted and sentenced. The impugned judgment of learned ASJ dated 13.05.2024 does not deserve any interference as it suffers from no infirmity - the present Revision Petition is hereby dismissed.
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