TMI Tax Updates - e-Newsletter
October 9, 2021

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. Why it is important to check Form 26AS before filing Income Tax Return

   By: CAPushpkumar Sahu

2. WHETHER THE PLAINT CAN BE REJECTED IF RELIEFS CLAIMED IN IT CANNOT BE GRANTED IN LAW

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Agri export activities pick up in UTs of Jammu & Kashmir and Ladakh

2. Monetary Policy Statement, 2021-22 Resolution of the Monetary Policy Committee (MPC) October 6-8, 2021

3. Shri Piyush Goyal calls called upon the ASEAN bloc to do away with Non-Tariff Barriers

4. Launch of I-Sprint’21: IFSCA’s Global FinTech Hackathon Series “Sprint01: BankTech”

5. Income Tax Department conducts searches in Assam, Meghalaya and West Bengal

6. Close partnership between India and US is central to a free, open, inclusive and prosperous Indo-Pacific region: Shri Piyush Goyal

7. Repayment of ‘8.79% Government Stock 2021’

8. Income Tax Department conducts searches on certain businessmen/middlemen in Maharashtra

Notifications

DGFT

1. 36/2015-2020 - dated 8-10-2021 - FTP

Inclusion of Ports of Import in continuation to Notification No. 20/2015-20 dated 24.08.2021, Notification No. 23/2015-20 dated 03.09.2021 and Notification No. 32/2015-2020 dated 25.09.2021.

GST - States

2. S. R. O. No. 726/2021 - dated 1-10-2021 - Kerala SGST

Amendment in Notification S.R.O. No. 371/2017 dated 30th June, 2017

3. S. R. O. No. 725/2021 - dated 1-10-2021 - Kerala SGST

Seeks to amend in Notification S.R.O. No.360/2017 dated 30th June, 2017

4. S. R. O. No. 724/2021 - dated 1-10-2021 - Kerala SGST

Seeks to amend Notification S. R. O. No. 361/2017 dated 30th June, 2017

5. S. R. O. No. 723/2021 - dated 1-10-2021 - Kerala SGST

Amendment in Notification S.R.O. No. 363/2017 dated 30th June, 2017

6. S. R. O. No. 722/2021 - dated 1-10-2021 - Kerala SGST

Amendment in Notification S.R.O. No. 732/2017 dated 15th November, 2017

7. S. R. O. No. 721/2021 - dated 1-10-2021 - Kerala SGST

Seeks to exempt KGST on specified medicines used in COVID-19, up to 31st December, 2021

8. S.O. 99/P.A.5/2017/Ss. 9, 11, 15, 16 and 148/2021 - dated 21-9-2021 - Punjab SGST

Amendment in Notification No. SO.17/P.A.5/ 2017/Ss. 9, 11, 15 and 16/2017, dated the 30th June, 2017

9. S.O. 100/P.A.5/2017/S.11/2021 - dated 21-9-2021 - Punjab SGST

Seeks to provide the concessional rate of PGST on Covid-19 relief supplies, up to and inclusive of 30th September 2021

Highlights / Catch Notes

GST

• Court Approves Refund Claim with 6% Interest u/r 97A of CGST Rules, 2017; Compliance Mandatory.

  Case-Laws - HC : Refund claim - Rule 97A of the Central Goods and Services Tax (CGST) Rules, 2017 - Once the application had been processed and or order passed, which has attained finality, the respondents cannot escape the plain effect of the same. They also cannot escape the liability of interest that arises on non-compliance of the same. - Refund allowed with interest @6% - HC
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• GST Applies to Long-Term Leasing for Gem and Jewelry Bourse Development; Registration Differs for Land Purchase vs. Leasing.

  Case-Laws - AAR : Levy of GST - Supply or not - leasing services - contribution paid/payable by the members towards Development Cost of the Bourse for the promotion of Exports of Gem and Jewellery - The procedure of registration of purchase of land and applicable stamp duties is different from the procedure of lease of land. - Further, we note that GHB is aware of this fact that subject activity is leasing service because GHB itself argues for the applicability of entry 41 to said Notification, wherein the description of services is long term leasing of plots for thirty years or more. - Liable to GST - AAR
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• GST Applies to Settlement Fees in Timor-Leste Oil Block Deal; GSPC (J) Liable for IGST via Reverse Charge.

  Case-Laws - AAR : Levy of GST - supply or not - payment of settlement fees pursuant to deed of settlement and Release signed for Timor-Leste Oil Block Production Sharing Contract - supply in GST era or not - GSPC (J) is liable to pay IGST, vide Reverse Charge Mechanism, on Import of Subject supply of Service from ANP. - AAR
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• Manpower services for schools exempt from GST; colleges, offices, hospitals must pay.

  Case-Laws - AAR : Levy of GST - man power services provided - The Subject Supply for the purpose of Security, Cleaning and Housekeeping services provided to the cited schools are exempt from GST. - GST is liable to be paid on subject supply provided to all cited Government Colleges providing education services of above higher secondary level - GST is liable to be paid on subject supply provided to all cited Government offices / Government hospitals. - AAR
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• Court Denies Arrest Protection in Tax Credit Case, Prioritizes National Interest Over Individual Liberty Concerns. Investigation to Proceed.

  Case-Laws - DSC : Seeking protection form arrest - The matter involves availment of huge amount of tax input credit. Therefore, a thorough investigation is certainly required. Any protection granted to the applicant from arrest would rather, be a sure impediment in such investigation. Such being the position, the submission of the applicant that personal liberty of an individual needs to be given paramount importance need not be given undue significance. Rather, the interest of the nation and society cannot be overlooked in such cases. - DSC
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Income Tax

• Supreme Court Clarifies Section 263(2) Interpretation: CIT Revision Order Limitation Based on "Made" Date, Not "Receipt" Date.

  Case-Laws - SC : Revision u/s 263 by CIT - limit limit to pass the order - If the interpretation made by the High Court and the learned ITAT is accepted in that case it will be violating the provision of Section 263 (2) of the Act and to add something which is not there in the section - word used is “made” and not the “receipt of the order”. As per the cardinal principle of law the provision of the statue/act is to be read as it is and nothing is to be added or taken away from the provision of the statue. Therefore, the High Court has erred in holding that the order under Section 263 of the Act passed by the learned Commissioner was barred by period of limitation, as provided under subsection (2) of Section 263 of the Act. - SC
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• Exemption u/s 54F(1) Upheld: Building Constructed Within Three Years Satisfies Tax Provision Despite Land Purchase Timing.

  Case-Laws - HC : Exemption u/s 54F(1) - The three parts/limbs cannot be intermingled to deny the benefit of 54F(1) to the assessee. The third part/ limb being applicable to the facts of the case and it is not in dispute that the assessee has constructed the residential building within three years from the date of transfer of long standing asset, the benefit flowing from the said Section cannot be denied on the premise that the land was purchased prior to one year. In our opinion, this interpretation of the revenue is wholly untenable and would defeat the object and purport of the provision. - HC
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• Court Quashes Reopening of Assessment u/s 147; AO's Claims of Delay Unsupported by Evidence.

  Case-Laws - HC : Reopening of assessment u/s 147 - it appears that the AO has recorded to the effect that he could not refer the matter to the Transfer Pricing Officer nor could he examine the issue because of delayed submission of the revised reports - observations recorded by the AO are factually incorrect and contrary to the material evidence on record - while framing the assessment order, it would not reflect that due to non-submission of revised Accountant’s report or Form No.3CEB, AO could not determine the Arm’s Length Price or refer the issue to the Transfer Pricing Officer. - The notice is not sustainable, quashed - HC
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• Income from Services to Non-Residents Not Taxable; No Evidence of Technical Knowledge Transfer Under Article 12(4.

  Case-Laws - AT : Income accrued in India - Rendering services to non-resident entities - Though, the assessing officer has generally observed that in course of providing services to the assessee, the non-resident entities have made available technical knowledge, know-how, processes to the assessee. However, no substantive material has been brought on record by him to back such conclusion. - it is very much clear, the conditions of Article 12(4) of the tax treaty are not fulfilled. - AT
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• Management Fee Disallowed Under Income Tax Act Sec 40(a)(i); Services Deemed Managerial, Not Technical, Per India-UK DTAA.

  Case-Laws - AT : TDS u/s 195 - Disallowance of management fee paid by invoking the provisions of section 40(a)(i) - whether payment of management fees cannot be regarded as fees for technical services as per the DTAA between India and the U. K. - For ascertaining chargeability to tax reference to the relevant DTAA is essential - we hold that the assessee’s services were managerial in nature and not technical services. Hence, the assessee is not liable to deduct TDS on the same. - AT
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• Section 72: Business Losses Can't Offset Interest Income from Savings and Rentals, Tax Authorities Rule.

  Case-Laws - AT : Set off of brought forward business loss against income from other sources - As provision of section 72 are very clear that brought forward business loss can only be set off against business profit. The assessee itself has shown the interest income in its computation as income from other sources. It is not coming out from records that the fixed deposits were maintained by the assessee out of some business necessity and apparently the fixed deposits were made out of savings from rental income which the assessee has itself offered to tax under income from house property. Interest from electricity company and interest from income tax refund are essentially again ‘income from other sources’. Therefore, as per the provisions of section 72 of the Act, the Lower Authorities have rightly disallowed the set off of brought forward business losses. - AT
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• PCIT's Section 263 Revision Lacks Specific Errors, Relies on Insufficient Inquiry Without New Findings or Fact Verification.

  Case-Laws - AT : Revision u/s 263 by CIT - PCIT himself has not carried out any examination or verification of facts and has simply directed the AO to ‘may verify Form 10CC and initial years assessment orders of each business based on the contract entered with Railways’. PCIT has merely set aside to indulge in verification of the same facts yet again without citing as to how the AO has committed any error except alleging no proper enquiry. - As no two persons possibly think alike, variance in their analysis, understanding and application of law in same or similar factual matrix by itself would not empower a superior authority to displace the view of the lower authority. - AT
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• Assessing Officer's Disallowance of Expenses Lacks Evidence; Justice Demands Clear Identification of Alleged Discrepancies.

  Case-Laws - AT : Disallowance of expenses and commission paid as excessive - Assessing Officer held that the assessee could not substantiate the discrepancies but did not mention anything as to what are all the discrepancies found. The mere allegations cannot be treated as evidences. The fundamental principle of justice requires the Assessing Officer to discover and collect evidence and confront the assessee before making any disallowance. In the instant case, there was no mention at all as to which of the expenses is bogus or inflated. - AT
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Customs

• Assessees can claim CVD and SAD refunds in cash under Notification No. 102/2007, despite DEPB Scheme lapse.

  Case-Laws - HC : Refund of CVD and Special Additional Duty (SAD) - claim were rejected on the ground that DEPB scrips cannot be re- credited - After granting exemption subject to certain conditions, new conditions cannot be introduced by administrative directions or guidelines contrary to the statutory notification or restricting or withdrawing the benefits or imposing strict conditions. - If the DEPB Scheme has lapsed, notwithstanding 4% SAD paid through DEPB scrips, the assessee is entitled to the benefit of exemption N/N. 102/2007 by claiming refund through cash - HC
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• Court Upholds Concessional Duty Rate; Declaration of Retail Sale Price Suffices, No Inquiry into Accuracy Needed.

  Case-Laws - AT : Benefit of concessional rate of SAD - Declaration of RSP - proof of payment of actual VAT on sale after import - The Notification does not envisage an inquiry into the correctness of RSP. It is sufficient if RSP is declared. If the goods are sold at a higher rate, it has to be established with evidence. The Adjudicating Authority need not make unnecessary exercise of what other charges also should be added. When RSP is declared, it is the price at which it is intended to be sold to the consumer. - Demand set aside - AT
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Direct Taxes

• Court Rejects Flawed Interpretation of Benami Act, 1988; Quashes Proceedings Against Company's Commercial Transactions.

  Case-Laws - HC : Benami transaction - commercial complex as been leased out to the company by the JDA - The entire fulcrum of this case, therefore, rests on misinterpretation of the provisions of the Benami Act, 1988. All the transactions in the corporate world made by the company would become benami transaction if the interpretation of definition as understood by the respondents is accepted by this Court. The entire proceedings initiated under the Benami Act, 1988 deserve to be quashed and set aside. - HC
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Indian Laws

• High Court overturns orders declaring petitioner an 'absconder' and attaching properties due to improper legal reasoning.

  Case-Laws - HC : Dishonor of Cheque - Proclamation for person absconding - reason to believe - It is apparent that the impugned orders suffer from the vice of non-application of mind and deserve to be set aside. The declaration of the petitioner as an ‘absconder’, as well as attachment of his properties, was neither fit in the facts and circumstances of the case nor was it in accordance with law. - HC
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Service Tax

• Service Tax Refund Allowed Despite Expired Limitation Period u/s 11B for Double Payment Made by Mistake.

  Case-Laws - AT : Refund of service tax - double payment of service tax was made - when service tax is paid by mistake a claim for refund cannot be barred by limitation, merely because the period of limitation under Section 11B had expired - The refund claims rejected as time barred in these cases cannot be sustained - Refund allowed - AT
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Case Laws:

• GST

• 2021 (10) TMI 374
  Seeking grant of Bail - allegation is that the applicant deposited GST of about 31 Companies illegally - HELD THAT:- Having heard the submissions of learned counsel of both sides, nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence, prima facie satisfaction of the Court in support of the charge, reformative theory of punishment, and larger mandate of the Article 21 of the Constitution of India, the dictum of Apex Court in the case of DATARAM SINGH VERSUS STATE OF UTTAR PRADESH AND ANR. [ 2018 (2) TMI 410 - SUPREME COURT ] and without expressing any opinion on the merit of the case, it is found to be a case of bail. Let the applicant, Jagat Singh @ Jaggi involved in crime be released on bail on his furnishing a personal bond and two sureties each in the like amount to the satisfaction of the court concerned subject to following conditions - bail application allowed. Note:- For correction in the order see JAGAT SINGH @ JAGGI VERSUS UNION OF INDIA - 2021 (10) TMI 982 - ALLAHABAD HIGH COURT

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• 2021 (10) TMI 373
  Refund claim - Rule 97A of the Central Goods and Services Tax (CGST) Rules, 2017 - HELD THAT:- Admittedly, neither the amount of refund awarded under the order dated 06.01.2020 nor any interest has been paid to the petitioner, till date. By earlier order last opportunity had been allowed to the respondents to either pay up the entire amount or explain their conduct. Neither the amount has been paid up nor any further affidavit has been filed. Accordingly, the matter has been proceeded, there is no dispute to the fact that an amount of Rs. 1,28,50,535/- is refundable to the petitioner by respondent no.6 for the month of July, 2019. Also, upon exchange of pleadings, there is no dispute that the application for refund was filed by the petitioner manually, on 27.09.2019 yet the same was not processed and the refund was not directed to be paid within a period of sixty days therefrom. Once the application had been processed and or order passed, which has attained finality, the respondents cannot escape the plain effect of the same. They also cannot escape the liability of interest that arises on non-compliance of the same. Respondent no.6 shall refund the entire amount of Rs. 1,28,50,535/- together with interest from the date against 27.11.2019 till the date of issuance of the demand draft @ 6%. The respondents themselves shall have choice to make payment either through online mode or through bank draft within a period of one month from today - petition allowed.

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• 2021 (10) TMI 372
  Seeking for reverting/changing back the nature of levy to be imposed on the petitioner from regular to composition levy w.e.f. 01st January, 2020 - HELD THAT:- Admittedly, petitioner s representation seeking reversion from regular to composition levy is pending consideration before the respondent No. 2. Moreover, as the show cause notice dated 08th February, 2021 has been rescinded, this Court directs the respondent No. 2 to consider petitioner s representation for reversion from regular to composition levy within two weeks and if it finds that the petitioner fulfils the eligibility criteria, then it should recommend petitioner s case to the GSTN forthwith. The present writ petition along with pending application stands disposed of.

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• 2021 (10) TMI 371
  Challenge Rule 96(10) of the Central Goods and Services Tax Rules - Levy of inegrated tax on goods exported - claim of refund of such tax paid on the goods exported under Section 16(3)(b) of the IGST Act, 2017 - HELD THAT:- Issue Notice making it returnable on 20.10.2021. Noticing the fact that many such matters are pending from the year 2019 and there is an urgency made out by learned advocate Mr. Paritosh Gupta, let all those matters be posted for hearing on 20.10.2021.

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• 2021 (10) TMI 370
  Reimbursement of GST - Scope of the terms of the Contract - Seeking directions for payment of interest on tax dues at 18% per annum being the statutory interest rate chargeable under Section 50 of the CGST Act, 2017 - whether GST is required to be made good to the contractor as it was only 5% of the VAT which was provided for in the contract? - HELD THAT:- The Karnataka Urban Water Supply and Sewerage Board had sought for a clarification relating to implementation of GST in relation to performance of portions of contract after coming into force of GST. The Finance Department by its clarification dated 14.12.2020 has also opined that the tax difference ought to be calculated on each of the works and necessary steps to be taken to decide as to whether contract agreement needs to be changed. While making such clarification, the nature of reconciliation of tax paid in the pre-GST regime as well as taxes as applicable relating to all taxes in post-GST regime has been taken note of - This clarification made in the context of an authority set up under a statute and taking note of the clarification made by the KUIDFC, the respondent is required to act in terms of the clarification made. Further, insofar as tax component is concerned, as the contracts were entered after coming into force of the GST Act, and in light of the opinion expressed by a clarification made on 03.01.2020, the respondent is required to make good the GST after adjusting the amounts of sales tax that was provided for in the contract entered into between the petitioner and the respondent. The respondent is required to honour the same in terms of the clarification dated 03.01.2020. The consideration by the respondent to be made within a period of not later than twelve weeks from the date of release of the order - Petition disposed off.

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• 2021 (10) TMI 369
  Cancellation or suspension of the registration of petitioner - Section 29 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- There is no single whisper that after the expiry of 30 days, as provided under Sub-rule (3) Rule 22, when the cancellation was being resorted to, though apart from the fact that the office concerned has become functus officio after the expiry of 30 days, even if at all, the cancellation was required, in that eventuality, then the petitioner ought to have been heard. The learned counsel for the parties agreed that because the order impugned apparently suffers from the violation of a statutory provisions of non-providing of any opportunity as contemplated under Sub-section (2) of Section 29 of the Act, with the consensus of the parties, the impugned order is quashed - the matter is remitted back to the respondent No. 2, to take an appropriate action and decision thereon too, only after providing an opportunity of hearing to the petitioner. Petition allowed by way of remand.

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• 2021 (10) TMI 368
  Levy of GST - Supply or not - leasing services - contribution paid/payable by the members towards Development Cost of the Bourse for the promotion of Exports of Gem and Jewellery - exemption under Entry No.41(Heading 9972) of Notification No.12/2017Central Tax(Rate) dated 28-6-2017 or not - liability of interest if the liability to pay tax shall accrue with retrospective effect from 1st July, 2017 - HELD THAT:- On careful reading of the copies of the two deeds entered between GHB and GIDC, it is forthcoming that the deeds pertain to leasing of subject plots by GIDC to GHB for a period of 99 years and it is not sale of land. GHB s contention that it has paid stamp duty on lease deed does not change the scope of supply of service into sale of land. The supply is Leasing services in present case. The procedure of registration of purchase of land and applicable stamp duties is different from the procedure of lease of land. Further, it is noted that GHB is aware of this fact that subject activity is leasing service because GHB itself argues for the applicability of entry 41 to said Notification, wherein the description of services is long term leasing of plots for thirty years or more. Subject entry 41 to said Notification provides exemption for providing said services by GIDC to GHB (developer). In this regard, there are no merit in the contention of GHB, that GIDC has supplied services to industrial units, such as M/s. P. Hirani Exports LLP and M/s. Sonani Jewels Pvt. Ltd. for it is on record that GIDC has provided subject services to GHB and not to industrial units. It is also on record that GHB has supplied subject leasing services to industrial units such as M/s. P. Hirani Exports LLP and M/s. Sonani Jewels Pvt. Ltd. Now that GHB is not a State Government Industrial Development Corporations or Undertakings, also that GHB is not having 50 per cent. or more ownership of Central Government, State Government, Union territory, there are no merit to extend the scope of exemption granted vide Entry No. 41 to the said Notification to consideration received by GHB. GHB acquired the lease of the plot from GIDC at the cost of Rs. 225 per Sqm whereas GHB leased the plot to the members, such as, M/s. P. Hirani Exports at the cost of Rs. 2712.83 per Sqm and to M/s. Soni Jewels at Rs. 11960 per Sqm. It is on record that this amount recovered by GHB from its members is not in the nature of reimbursement of charges of the amount which GHB paid to GIDC as GHB has recovered the charges from its applicants/members over and above the rate which it paid to GIDC. Thus there are no merit to entertain the entry 77 of said Notification to GHB. The competent authority, has laid down this path to exemption vide said entry 77 to said Notification to GHB in this regard, which has not been satisfied by GHB. Liability of interest - HELD THAT:- There are no explicit mention in the statutory provisions that Question on interest applicability may be raised before the Authority. However, the authority do not want to pass a Ruling without a comment on this issue. The liability to interest is automatic and arises by the operation of the statutory and mandatory provisions of the law. The interest liability is a statutory liability which accrues automatically.

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• 2021 (10) TMI 367
  Levy of GST - supply or not - payment of settlement fees pursuant to deed of settlement and Release signed for Timor-Leste Oil Block Production Sharing Contract - supply in GST era or not - liability of tax on whom - reverse charge mechanism - HELD THAT:- The prime reason GSPC(J) and other contractors of ANP sought Termination of the PS Contract was due to the uncertainty arising out of the arbitration proceedings initiated by the Timor-Leste Government against the Government of Australia to have Certain Maritime Agreements in Timor Sea(CMATS) Treaty declared as void ab initio and the termination of CMATS would result in automatic termination of Timor Sea Treaty governing petroleum operations in the JPDA, and in effect the PSC entered into for JPDA 06-103 - ANP initiated Arbitration at International Chamber of Commerce on 810-2018 against the respondents and vide ICC Arbitral Tribunal Order dated 16-9-2020. Further the Deed of Settlement and Release was entered between ANP and GSPC(J) [ along with other contractors] on 15-7-2020. Is the subject amount paid by M/s GSPC(J) to ANP, aCost Petroleum charge paid to ANP/ Exploration Costs paid to ANP/ Damages as a condition of Contract of PSC paid to ANP? - HELD THAT:- The subject payment to be paid by GSPC(J) to ANP is to be borne by GSPC(J) as the liability is several and each Respondent is obliged to pay only its respective proportionate share of the Settlement Sum per the ICC Order dated 16-9-20 and not jointly and severally, as submitted by the applicant - The subject payment is not for the breach of PS Contract. The PS Contract had been terminated on 157-15. The subject payment was in pursuance to the Deed of Settlement and Release, vide which there was an agreement between GSPA (J) and ANP and Release of Performance Guarantee of GSPA (J) by ANP - ANP not to pursue the Arbitration Proceedings against GSPC(J) on payment of subject payment by GSPC(J), as the subject payment, as per ICC Order 169-20 is to be paid by GSPC as the liability is several and each Respondent is obliged to pay only its respective proportionate share of the Settlement Sum. Supply taking place or not - HELD THAT:- The subject activities performed by ANP to GSPC (J) for consideration of subject payment is Supply of Service in the GST era. Is subject Supply in GST era or not? - HELD THAT:- The subject agreement and subject ICC order both are dated in the year 2020 - GST era has been ushered with effect from 1-7-2017. Thus the subject activity falls within the scope of Supply, as per Section 7 CGST Act. And that the subject Supply is within the umbrella of GST era. GST liability, whether, on ANP or GSPC(J)? - HELD THAT:- Here is the supply of service by ANP which is in non taxable territory to GSPC(J) which is in taxable territory. This is import of service by GSPC(J) and the GST liability mechanism is Reverse Charge. Time of Supply of Service - HELD THAT:- The subject payment is in nature of Cost Petroleum charges arising out of obligation of PS Contract, but is in nature of Agreement charges to be paid to ANP arising out of the Deed of Settlement and Release dated 5-8-20. The subject matter of GSPC(J), has reciprocity and supply of service from ANP to GSPC(J). We note that the subject supply of service in not envisaged or arising from the Production sharing agreement, but arising as an agreement between ANP and GSPC(J) and is dependent on the Deed of Settlement and Release and therefore, subject settlement amount is not due to a breach of contract of PSC but due to the ANP s obligation to supply said services to GSPC(J). The subject payment is consideration as payment to ANP for the supply of service. GSPC (J) is liable to pay IGST, vide Reverse Charge Mechanism, on Import of Subject supply of Service from ANP.

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• 2021 (10) TMI 366
  Levy of GST - man power services provided to the Central Government, State Government, Local Authorities, Governmental Authorities and Government Entities - four service recipients - Government Schools - Government Colleges - Government Offices - Government Hospitals - Notification 12/2017 CT (R) dated 28-6-17. Government Schools as Service Recipient - HELD THAT:- Entry 66(b) of Notification 12/2017-CT(R) is the relevant GST exemption entry to the aforementioned mentioned (i) to (iii) recipients - The applicant holds Government Schools (and also Government Colleges, offices and hospitals) as Government and cites sr no 3 of said Notification, for exemption to not only schools but also to all the applicant s cited service recipients - there are no merit in applicant s submission to consider sr no 3 of said Notification in subject matter. Government Colleges as service recipient - HELD THAT:- The scope of exemption made available at sr no 66(b) to cited Notification 12/2017-CT(R) excludes from its purview Colleges providing education above higher secondary schooling. With no specific exemption for the services provided to these educational institutions, services provided to the following recipients categorised under Government colleges, by the applicant are taxable. Government Hospitals as service recipient - HELD THAT:- Entries 46 and 74 of N/N. 12/2017-Central Tax(Rate) dated 28-6-2017 covers services provided by veterinary clinics/clinical establishments i.e. hospitals. However, the scope of GST exemption available at above said two entries (46 74) does not cover supply of services provided to veterinary clinics/clinical establishments - the subject service provided to Hospitals, is not covered at entry No. 46 74 of the said Notification. Government Offices as Service Recipient - HELD THAT:- If Government framed a specific entry (entry 66(b) of NT 12/2017-CT(R)) exempting certain services provided to/in educational institutions, then Government would also have had a specific entry exempting services provided to/in Government offices, if that was the intention of the Government. Now that there are no such specific entry, it would not be the correct interpretation of the law to construe that services provided and consumed in Government offices are to be equated as services in relation to panchayat/ Municipality functions. In absence of any specific GST exemption for services consumed within the said offices, there are no merit to consider applicant s submission for GST exemption - The applicant has misconstrued serial number 3 of NT 12/2017-CT(R) to be applicable in subject matter.

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• 2021 (10) TMI 365
  Seeking protection form arrest - issuance of tax invoices without actually supplying any goods - availment of irregular credit - submission of the respondent No. 1 is that further interrogation with the applicant is necessary as well as there is every possibility of his tampering with the evidence certainly has substance - HELD THAT:-The submission of respondent no. 1 appears quite probable because the applicant only knows about the details of those Companies. Any protection from arrest granted to him would in substance amount to granting him the opportunity to tamper with the evidence concerning the remaining almost 100 such entities. Availment of huge amount of tax even without actual supply of any goods is suspected and such suspicion is certainly well founded. Simply because certain cheque books and account books have been seized from the premises of the applicant it cannot be said that no further inquiry is to be made or nothing more is recoverable - Even the submission of the applicant that he was detained for more than 30 hours or was coerced to pay Rs. 15,00,000/or was coerced to sign a cheque for Rs. 2.31 Crores is not sufficient to deny the opportunity to the respondent No. 1 to proceed further with the investigation. The matter involves availment of huge amount of tax input credit. Therefore, a thorough investigation is certainly required. Any protection granted to the applicant from arrest would rather, be a sure impediment in such investigation. Such being the position, the submission of the applicant that personal liberty of an individual needs to be given paramount importance need not be given undue significance. Rather, the interest of the nation and society cannot be overlooked in such cases. Thus the applicant is not entitled for any protection from arrest. Application rejected.

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• 2021 (10) TMI 364
  Seeking monitoring of investigation filed - Summon order - petitioner has submitted that the respondent department is unnecessarily harassing the petitioner by not marking his presence whenever he turns up in response to join the investigation - Seeking permission to have access to his counsel during the course of enquiries - HELD THAT:- The undersigned is of the opinion that the factum whether the petitioner is joining the investigation as per the directions of the Hon ble High Court is a matter of fact. It is also undeniable that it is the foremost requirement to undergo/join the investigation procedure as directed by the Hon ble High Court. Considering the totality in circumstances as already discussed, this court hereby directs that the petitioner shall join the investigation tomorrow at 4:00 PM by appearing in person before the Competent Officer of the respondent department. He shall be entitled to have the access to his counsel during the course of enquiries. Application disposed off.

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• Income Tax

• 2021 (10) TMI 363
  Revision u/s 263 by CIT - limit limit to pass the order - whether order barred by limitation? - Order Made versus Order Served - whether the High Court is right in holding that the relevant date for the purpose of considering the period of limitation under Section 263(2) of the IT Act would be the date on which the order passed under Section 263 by the learned Commissioner is received by the assessee? - HELD THAT:- The relevant last date for the purpose of passing the order under Section 263 considering the fact that the assessment was for the financial year 2008-09 would be 31.03.2012 and the order might have been received as per the case of the assessee respondent herein on 29.11.2012 - date on which the order under Section 263 has been received by the assessee is not relevant for the purpose of calculating/considering the period of limitation provided under Section 263 (2) of the Act. Therefore the High Court as such has misconstrued and has misinterpreted the provision of subsection (2) of Section 263 of the Act. If the interpretation made by the High Court and the learned ITAT is accepted in that case it will be violating the provision of Section 263 (2) of the Act and to add something which is not there in the section - word used is made and not the receipt of the order . As per the cardinal principle of law the provision of the statue/act is to be read as it is and nothing is to be added or taken away from the provision of the statue. Therefore, the High Court has erred in holding that the order under Section 263 of the Act passed by the learned Commissioner was barred by period of limitation, as provided under subsection (2) of Section 263 of the Act. Question of law framed is answered in favour of the revenue appellant and against the assessee.

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• 2021 (10) TMI 362
  Exemption u/s 54F(1) - inclusion of cost of the new residential house or cost of construction of the new residential house - adjustment against the cost of new asset - Whether it would include the cost of land though purchased more than 1 year prior to sale of capital asset? HELD THAT:- In the case of C. Aryama Sundaram [ 2018 (8) TMI 864 - MADRAS HIGH COURT ] condition precedent for adjustment against the cost of new asset is that the new residential house should have been purchased within one year before or two years after the transfer of the residential house, which resulted in the capital gain or alternatively, a new residential house has been constructed in India, within three years from the date of the transfer, which resulted in the capital gain. It has been categorically held that the said Section does not exclude the cost of land from the cost of residential house. It is the cost of the new residential house and not just the cost of construction of the new residential house, which necessarily include the cost of the land, it includes, the cost of the materials used in the construction, the cost of labour and any other cost relatable to the acquisition and/or construction of the residential house. The object of Section 54F is to encourage investment in the residential building and enable the assessee to save tax on capital gains. The aforesaid three limbs of Section 54F(1) being different and distinct, each limb has to be read as a whole separately. The three parts/limbs cannot be intermingled to deny the benefit of 54F(1) to the assessee. The third part/ limb being applicable to the facts of the case and it is not in dispute that the assessee has constructed the residential building within three years from the date of transfer of long standing asset, the benefit flowing from the said Section cannot be denied on the premise that the land was purchased prior to one year. In our opinion, this interpretation of the revenue is wholly untenable and would defeat the object and purport of the provision. The Tribunal has failed to appreciate the judgment of C. Aryama Sundaram, supra in a right perspective. 14. It is trite that even if two plausible views are possible, the view beneficial to the assessee has to be applied. On technicalities, the benevolent provision cannot be interpreted to deny the benefit to the assessee. - Decided in favour of assessee.

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• 2021 (10) TMI 361
  Reopening of assessment u/s 147 - whether the revenue is justified in reopening the assessment for the year under consideration? - determining the Arm s Length Price of the international transactions entered into by the assessee with its associated enterprises - HELD THAT:- The assessee Company had entered into various international transactions with its associated enterprises. Any income arising from international transaction shall be computed having regard to the Arm s Length Price. The original Form No.3CEB under Section 92E of the Act determining the Arm s Length Price of the international transactions entered into by the assessee with its associated enterprises had been submitted physically as well as online with the respondent within the time prescribed by the Act and thereafter, return of income for the year A.Y. 2013-14 was filed and the same was processed under Section 143(1) of the Act and the case was selected for scrutiny assessment under Section 143(2) - also not in dispute that, during the course of proceedings, the AO had called for necessary information by issuing notice under Section 92C read with Section 142(1) of the Act dated 05.02.2016 for the A.Y. 2013-14 and the same was complied with by the assessee vide its letter dated 19.02.2016, whereby, the assessee had furnished a copy of the audit report in Form No.3CEB containing the complete details of international transactions and also submitted Transfer pricing Study report and thereafter, on 18.03.2016, the revised Transfer Pricing Study report and Accountant s report were submitted and finally, the AO has framed the assessment vide its order dated 18.03.2016. Before completion of the scrutiny assessment, the original Accountant s report in Form No.3CEB, Transfer Pricing Study report and revised reports thereof were available on record and it is evident that, the assessee had submitted it in a prescribed time limit. Thus, all the information with regard to international transactions entered into by the assessee with its associated enterprises were placed on record at the time of scrutiny assessment proceedings. On perusal of the reasons recorded, it appears that the AO has recorded to the effect that he could not refer the matter to the Transfer Pricing Officer nor could he examine the issue because of delayed submission of the revised reports - observations recorded by the AO are factually incorrect and contrary to the material evidence on record - while framing the assessment order, it would not reflect that due to non-submission of revised Accountant s report or Form No.3CEB, AO could not determine the Arm s Length Price or refer the issue to the Transfer Pricing Officer. Thus, we find substance in the contention raised by the learned counsel for the writ applicant that, the reasons recorded are factually incorrect and without any basis - Decided in favour of assessee.

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• 2021 (10) TMI 360
  Penalty u/s 234E - Ex - party order passed by CIT-A - Denial of natural justice - delay in filing 26Q TDS return of Quarter-IV of F.Y. 2012-13 - assessee submitted that since the intimation issued by the A.O. in the present case is for the period prior to 01.06.2015, therefore, the same is beyond the scope of adjustment provided under section 200A of the I.T. Act - HELD THAT:- CIT(A) has issued a notice of hearing on 20.03.2018 and decided the appeal on 26.03.2018 in the ex-parte order passed by her due to non-appearance of the assessee. It is the submission of Assessee that notice of hearing was received by the assessee on 22.03.2018. It appears from the order of the Ld. CIT(A) that she has given only one opportunity to the assessee - we find merit in the arguments of the Learned Counsel for the Assessee that no proper opportunity has been granted - we deem it proper to restore the issue to the file of the Ld. CIT(A) with a direction to grant one more opportunity to the assessee to substantiate its case - Assessee appeal is allowed for statistical purposes.

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• 2021 (10) TMI 359
  Reopening of assessment u/s 147 - unaccounted cash receipts - on-money towards sale of shops / flats - addition based on one statement of Shri Suraj Parmar promoter of Cosmos group - abbreviations RJ as used in the excel sheet as interpreted to mean the director of the assessee company Shri Ravi Jhunjhunwala - HELD THAT:- The prime reason to make the addition of on-money in the hands of the assessee is the statement of Shri Suraj Parmar. However, in reply to question no.13, Shri Parmar categorically stated that cash generated from the project was distributed to the partners in the respective projects and it is mainly utilized in purchase of land. Therefore, whatever cash was generated by the cosmos group or Shri Suraj Parmar on account of on-money towards sale of shops / flats that was distributed among the partners of M/s Cosmos Lifestyle and the assessee is not a partner of that entity - in the statement of Shri Suraj Parmar, Shri Bharat Jhunjhunwala was stated to be the key person of the assessee group and stated to be the recipient of cash component. However, Shri Bharat Jhunjhunwala, in statement on oath u/s 131 recorded on 12/10/2015, denied having received any cash component from the cosmos group. The assessee has also denied having received cash component in the project. In such a case, the onus would be on revenue to prove the fact of exchange of cash between the Cosmos group and the assessee entity. We find that except for statement of Shri Suraj Parmar, there is no other corroborative evidence on record to substantiate this fact. Name of assessee entity nowhere figures in the seized data and there is no material on record which would suggest that any cash was paid to the assessee out of on-money received by Cosmos Group. The data only mentions abbreviations RJ which is amenable to several interpretations and could not go on to conclusively prove that the same would represent director of the assessee company. Therefore, no concrete belief could be made on the basis of these abbreviations. No additions could be made merely on the basis of presumption, conjectures and surmises. The assessee has all along denied having received any cash component from the cosmos group. In such a situation, the onus was on revenue to prove with corroborative material the fact of exchange of cash between the assessee and the cosmos group. However, except for statement of Shri Suraj Parmar, there is nothing in the armory of Ld. AO to prove this fact. Denial of natural justice - denial of opportunity to cross examine - As opportunity to cross-examine the person making adverse statements against the assessee has never been provided to the assessee. Since the statement formed the very basis of making additions in the hands of the assessee, not providing such an opportunity of cross-examination would make the additions unsustainable in the eyes of law as held by Hon ble Apex Court in M/s Andaman Timber Industries - Decided in favour of assessee.

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• 2021 (10) TMI 358
  Levy of penalty u/s 271(1)(c) r/w Explanation 1(A) - Defective notice u/s 274 - non specification of one charge - addition of notional interest income accruing on alleged deposit with LGT Bank Liechtenstein in the name of Ambrunova Trust - HELD THAT:- We find that the Assessing Officer did not strike off either of the two limbs namely whether the assessee concealed the particulars of income or furnished inaccurate particulars of such income, although, even if it was to be levied, it was a case of furnishing of inaccurate particulars of income. Also in the case of M/s.Bhavya Shashank Shanbhag v. Dy. Commissioner of Income Tax [ 2021 (7) TMI 381 - ITAT MUMBAI ] the Co-ordinate Bench has deleted the similar issue of penalty based on defective notices issued by the AO. - Decided in favour of assessee.

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• 2021 (10) TMI 357
  Reopening of assessment u/s 147 - eligibility of reasons to believe - addition made on the basis of the report of the Investigation Wing - HELD THAT:- In the reasons for reopening of the assessment, it is clearly stated that not all client code modifications are in genuine. Otherwise, the same we would not have given a window of halfan- hour to the brokers to modify the client codes to correct the genuine errors. AO without any allegation has presumed that assessee has entered into nongenuine client code modification activities. Neither the brokerage examined nor the assessee is examined. In fact the non-genuine client code modification activities could be established on the basis of analysis of Levenshtein Distance of Digit Edit analysis where there are edits ranging from three to five in the client code, then it is obvious that the code is not modified but actually replaced. There is no such allegation on finding of AO. There is no allegation in the reasons recorded by AO that there is any failure on part of the assessee to disclose fully and truly material facts of computation of the total income. It could not have been the duty of the assessee to disclose that there are client code modification made by the broker, when in fact profit or loss has been shown by the assessee before the assessing officer and same was scrutinized u/s 143 (3) of the act. It would be the duty of AO to decipher any inference, which he would like to draw. AO has considered the addition by combining the profit earned by the assessee on account of client code modification and further a loss on account of client code modification. Therefore, in fact assessee has earned profit as well as loss because of client code modification whereas the learned assessing officer has considered both these figures as income of the assessee. Addition stating that assessee has failed to provide any substantial evidence that can corroborated that the client code modification was bona fide it was the duty of the learned assessing officer to show that the client code modification made by the broker of the assessee which has resulted into the Under assessment of income of the assessee because of evidences in the possession of the learned assessing officer. We find that there is no reference of any such evidences but merely a fact that there is a client code modification wherein which has resulted into income as well as loss to the assessee. Also noted that assessee has incurred a loss of Rs. 11.36 crores, the contrived loss even if it is presumed to be a bogus loss, it is merely Rs. 273,631 which would not have made any difference or saving in any tax to the assessee as assessee has assessed loss of more than Rs. 11.34 crores. This is not a clinching fact but it is a supportive fact to show that there is no intention of the assessee of saving of any tax even if the loss is held to be bogus. Merely on such facts the reopening or addition could not have been held invalid, but looking at the composite facts coupled with the other facts, it clinches the issue. There is no examination of broker of the assessee to determine whether the client code modification is genuine as falling into the allowable definition given by SEBI or nongenuine. In absence of either extracting these facts by examining the broker or by the assessee, we do not find any reason that addition can be sustained on the merits of the case also. - Decided in favour of assessee.

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• 2021 (10) TMI 356
  Income accrued in India - Rendering services to non-resident entities - Disallowances of consultancy fees and architect fees - non-resident entities have provided technical/consultancy services which enabled the assessee to apply them in its business - whether the payment made by the non-resident entities can be termed as FTS under Article 12(4) of India Singapore Tax Treaty? - whether not only the fees paid comes within the purview of FTS under section 9(1)(vii) of the Act, but also under Article 12(4) of the tax treaty as the services provided by the non residents made available technical knowledge, skill, know-how, process to the assessee to utilize in its business - HELD THAT:- As from the nature of services provided by the non-resident entities and the terms and conditions under which it was provided, it is clear that whatever services were provided are project specific and cannot be used for any other project by the assessee. Further, while providing such services neither any technical knowledge, skill, etc is made available to the assessee for utilizing them in future, independently nor any developed drawing or design have been provided to the assessee which can be applied by the assessee independently. Thus, it is very much clear, the conditions of Article 12(4) of the tax treaty are not fulfilled. Though, the assessing officer has generally observed that in course of providing services to the assessee, the non-resident entities have made available technical knowledge, know-how, processes to the assessee. However, no substantive material has been brought on record by him to back such conclusion. Even, before us, learned departmental representative has not brought any material to demonstrate that conditions of Article 12(4) have been fulfilled in the facts of the present case. No valid reasons to interfere with the decision of learned Commissioner (Appeals). Accordingly, we uphold the order of learned Commissioner (Appeals) on the issue by dismissing ground raised.

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• 2021 (10) TMI 355
  Addition u/s 40A(3) - disallowing claim as paid to the farmers/vendors - HELD THAT:- We no force in assessee s stand. This is inter alia for the reason that although he has duly explained the source of sum of Rs. 90 lakhs coming from various companies/vendees, there is no reconciliation filed before qua the impugned sum of Rs. 72 lakhs having been passed over to the vendors - learned counsel has relied upon the assessee s alleged hard disk as well as additional documentary evidence, the same are found to be lacking the clinching three folded nexus between vendors/farmers, vendees/companies and himself as the case may be. It was very much incumbent on him to file the detailed reconciliation of the amount received viz amount involving the companies and the land owners; respectively alongwith the corresponding sale deeds as well which he has failed to do so. We thus see no reason to accept the assessee s foregoing contentions seeking a remand report as well from the department in absence of a valid admission of his additional evidence as per Rules 29 to 31 of the Appellate Tribunal Rules, 1963. And more so, when there is no certification on the part of assessee that his hard disk in issue satisfies the basic parameters of an electronic record or data; as the case may be u/s. 2(t) of the Information Technology Act - no reason to interfere with both the learned lower authorities having been making the impugned disallowance - Decided against assessee.

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• 2021 (10) TMI 354
  TDS u/s 195 - Disallowance of management fee paid by invoking the provisions of section 40(a)(i) - whether payment of management fees cannot be regarded as fees for technical services as per the DTAA between India and the U. K. - only reason given by the DRP to hold the payment under the Management Services agreement as fees for technical services is that the said services are ancillary and subsidiary to the enjoyment of the property for which the payment by way of royalty has been made - HELD THAT:- As the test of the object being common is not decisive of the fact that the Management Services agreement is ancillary or subsidiary to the enjoyment of the rights under the License Agreement. The DTAA between India and USA is also similarly worded. As per the Memorandum of Understanding which forms part of the said DTAA, the test of the services being ancillary and incidental to enjoyment of rights under the license agreement would be based on fulfilment of defined conditions. Since none of the aforesaid tests, have been fulfilled in the present case, agreement towards Management Services cannot be regarded as ancillary and subsidiary to enjoyment of the property under the License Agreement. In the preset case we are concerned with deduction of tax at source under section 195 of the Act where the obligation arises only when the sum is chargeable to tax under the Act. For ascertaining chargeability to tax reference to the relevant DTAA is essential - we hold that the assessee s services were managerial in nature and not technical services. Hence, the assessee is not liable to deduct TDS on the same. The disallowance proposed by DRP and made by AO is deleted. This issue of assessee s appeal is allowed. Disallowance u/s 37(1) of the Act in respect of payment of management fees and information technology (IT) charges - HELD THAT:- Assessee as well as learned CIT DR agreed that the disallowance of management fee and IT charges u/s 37 of the Act has been accepted in other years and there is no dispute about it. Further, to the extent the position is accepted by the CBDT in the Unilateral Advance Pricing Agreement (UAPA) as payment on the Arm s Length Basis the deduction cannot be denied. Both learned Counsel as well as learned DR agreed that this matter can be referred to the file of the AO for verification whether this is accepted by UAPA as payment on Arm s Length basis. Hence, this issue is restored back to the file of the AO. Short grant of TDS credit - HELD THAT:- Both learned counsel for the assessee learned CIT DR agreed that this can be sent back to AO for verification and assessee will produce the relevant certificates of TDS before AO and accordingly, the AO will allow the claim of assessee.

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• 2021 (10) TMI 353
  Income from house property - Computation of deduction allowed u/s 24(a) - deduction of expenditure claimed towards the rental income - HELD THAT:- We deem it appropriate to hold that the issue should be re-adjudicated by the Ld. CIT(A) after giving a proper opportunity to the assessee to present its case in this regard. CIT(A) is also directed to consider and give benefit of the order of the ITAT Delhi Bench in the case of M/s Texaco Overseas Pvt. Ltd. [ 2010 (4) TMI 1066 - ITAT DELHI] wherein it has been held that where quantification of charges for additional services was not readily available, annual rental value of the property should be determined after reducing the expenses incurred by the assessee for rendering such additional services. However, the assessee is also directed to demonstrate before the Ld. CIT(A) that the electricity expenses claimed by it were actually incurred and that the assessee held the electricity connection in its name before such expenditure is to be allowed by the Ld. CIT(A). Expenditure on repairs and maintenance expenses - The fact remains that the civil and electrical repairs which the assessee has carried out and are being claimed to the tune of Rs. 9,07,761/- is in addition to the deduction of 30% U/s 24(a) already allowed to the assessee on the gross rental income. We agree with the observation of the Ld. CIT(A) that the 30% statutory deduction U/s 24(a) of the Act would subsume all repairs and maintenance expenses - No force in the contention of the assessee on this issue and we dismiss the ground. Payment towards insurance policy - CIT(A) has made an observation that the copy of insurance policy was not made available. However, in paper book, insurance policy has been submitted and we note that it is a comprehensive insurance policy. However, since the Ld. CIT(A) did not have the benefit of examining this insurance policy, we again deem it fit to restore this claim of the assessee to the file of the Ld. CIT(A) to be considered afresh and to be allowed proportionately after giving proper opportunity to the assessee in this regard. Set off of brought forward business loss against income from other sources - As provision of section 72 are very clear that brought forward business loss can only be set off against business profit. The assessee itself has shown the interest income in its computation as income from other sources. It is not coming out from records that the fixed deposits were maintained by the assessee out of some business necessity and apparently the fixed deposits were made out of savings from rental income which the assessee has itself offered to tax under income from house property. Interest from electricity company and interest from income tax refund are essentially again income from other sources . Therefore, as per the provisions of section 72 of the Act, the Lower Authorities have rightly disallowed the set off of brought forward business losses. Appeal of the assessee stands partly allowed for statistical purposes.

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• 2021 (10) TMI 352
  Revision u/s 263 by CIT - Assessment u/s 153A - period of limitation period for issuance of notice prescribed under Section 263(2) - whether incriminating documents shown to have been found in the course of search? - HELD THAT:- As in the absence of incriminating documents shown to have been found in the course of search, the Assessing Officer was precluded from making any additions/disallowances on the issue in the search assessment under Section 153A of the Act where both the assessments in question stood concluded and remained unabated at the time of search. The position of law on this point is well settled and does not require elaboration. Thus, we find merit in the plea of the assessee that limitation period in such case will have to be reckoned from the original assessment and not with reference to the subsequent post search assessment which is sought to be revised. seen with reference to the original assessments for the respective assessment years, apparently the limitation period for issuance of notice prescribed under Section 263(2) of the Act stood expired. The show-cause notice issued under Section 263(1) of the Act is thus, at the threshold, time barred and thus non est. The consequential revisional order under Section 263 for both the assessment years giving directions to the Assessing Officer for revision of the impugned assessment orders passed under Section 153A of the Act thus cannot survive. - Decided in favour of assessee.

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• 2021 (10) TMI 351
  Income from sale of DEPB - profit on transfer of DEPB u/s 28(iiid) was taxed instead of DEPB credit credited by the assessee in his P L account - HELD THAT:- As relying on M/S TOPMAN EXPORTS VERSUS COMMISSIONER OF INCOME TAX, MUMBAI [ 2012 (2) TMI 100 - SUPREME COURT] it is a well-settled principle of statutory interpretation of a taxing statute that a subject will be liable to tax and will be entitled to exemption from tax according to the strict language of the taxing statute and if as per the words used in Explanation (baa) to section 80HHC read with the words used in clauses i(iid ) and (iiie) of section 28, the assessee was entitled to a deduction under section 80HHC on export profits, the benefit of such deduction cannot be denied to the assessee. Respectfully following the precedent we set aside the issue to the file of the Assessing Officer to decide the issue afresh in the light of judgement of Hon ble Apex Court as above. Appeal filed by the assessee is allowed for statistical purposes.

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• 2021 (10) TMI 350
  Revision u/s 263 by CIT - allowance of deduction u/s 80IA - HELD THAT:- AO had carried out specific enquiries with regard to deduction claimed u/s 80IA(4) of the Act and it was only after he was satisfied with the propriety of the claim, the continuing deductions claimed by the assessee left undisturbed. Significantly, AY 2015-16 in question is not the first year for claim of deduction u/s 80IA(4) - assessee has claimed deduction in respect of different sites from various initial assessment years noted earlier and no change in circumstances was noted by the PCIT which is warranted in a settled point. The acceptance of continuity of claim u/s.80IA(4) cannot be seen with any concern without showing deviation in facts. Private railway sidings have been treated as eligible infrastructure facility for the purposes of Section 80IA(4) of the Act by the co-ordinate benches. Lastly, the purport of enquiry directed by the PCIT is totally unintelligible. PCIT himself has not carried out any examination or verification of facts and has simply directed the AO to may verify Form 10CC and initial years assessment orders of each business based on the contract entered with Railways . PCIT has merely set aside to indulge in verification of the same facts yet again without citing as to how the AO has committed any error except alleging no proper enquiry. The assessment order can be interdicted u/s 263 of the Act only where both the conditions are met i.e. order is erroneous as well as prejudicial to the interests of the Revenue. No error has been shown by the PCIT except absence of proper enquiry. Issue of deduction has been found to be continuing since last many assessment years and necessary documentations for claim / deduction has been placed on record and examined by the AO. No inconsistency in the action of the AO has been shown which can render his action to be erroneous and prejudicial to the interest of the Revenue. As no two persons possibly think alike, variance in their analysis, understanding and application of law in same or similar factual matrix by itself would not empower a superior authority to displace the view of the lower authority. This apart, in the absence of any reason showing error in the assessment order, there was no warrant for a PCIT to interfere with the order under s.143(3) of the Act. The action of the PCIT under s.263 of the Act is thus found to be without jurisdiction and consequential order thus passed is set aside. Claim of deduction u/s 80G - As it is an admitted position that the clinching evidence in the form of receipt from the donor was available before the PCIT. The PCIT has simply observed that the AO may consider deduction after proper verification . The nature of verification is not specified. Such mundane and directionless observations in the revisional proceedings are neither here nor there, in the absence of any elaboration of the grounds for not entertaining the deduction. This ground for revisions is thus set aside. - Appeal of assessee allowed.

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• 2021 (10) TMI 349
  Revision u/s 263 by CIT - lack of enquiry v/s inadequate enquiry - Unexplained expenditure - as per CIT in support of various expenses like salary and wages, shop rent, license fee and house rent etc. incurred by the assessee there was no details filed by the assessee during the course of proceedings and there was no copy of ledger accounts in respect of these expenses - assessee had made an addition on account of capital of partners and AO had not carried out sufficient verifications in this respect - assessee had not given the details of excise duty tax paid by it and further he held that quantitative records were not maintained - HELD THAT:- Assessee during the course of assessment proceedings indicate that Assessing Officer did carryout the necessary investigation and assessee filed the relevant replies which in our opinion are plausible explanations and therefore Assessing Officer rightly passed the assessment order accepting the explanations of the assessee. Assessing Officer took a plausible view and therefore the order passed by the Assessing Officer is not erroneous and therefore the condition for initiating the action u/s. 263 does not arise as on all the issues on which the ld. CIT took u/s. 263 were examined during the assessment proceedings. Jurisdictional High Court of Allahabad in CIT vs. Krishna Capbox (P.) Ltd. [ 2015 (3) TMI 17 - ALLAHABAD HIGH COURT] has held where the Assessing Officer made certain queries which were replied to by assessee and after inquiry, being satisfied in respect to any queries replied by the assessee, Assessing Officer accepted declared income and passed the assessment order, Commissioner cannot issue notice u/s. 263 on the ground that Assessing Officer had not made enquiry on certain accepted version of assessee without making any enquiry or verification. As in the case of CIT vs. Vikas Polymers,[ 2010 (8) TMI 745 - DELHI HIGH COURT] held that there is difference between lack of enquiry and inadequate enquiry and it is only cases of lack of enquiry that the Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings under the Act and passing orders thereon. CIT was not justified in passing the order u/s. 263 of the Act and directing the Assessing Officer to make assessment order de novo - Decided in favour of assessee.

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• 2021 (10) TMI 348
  Validity of assessment u/s 144C - no draft order was issued as mandated - HELD THAT:- As assessment order framed by the Assessing Officer without passing a draft assessment order which is a mandatory requirement in terms of section 144C - this issue is well settled in favour of the assessee and against the Revenue by the decision of the Hon ble High Court of Delhi in the case of JCB India [ 2017 (9) TMI 673 - DELHI HIGH COURT] as held final assessment orders passed by the AO are without jurisdiction on account of the failure, by the AO, to first pass a draft assessment order and thereafter, subject to the objections filed before the DRP and the orders of the DRP, to pass the final assessment order - Decided against revenue.

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• 2021 (10) TMI 347
  Assessment of trust - unexplained donation - Addition of contribution to the building fund on the reasoning that the source of the same was not explained - HELD THAT:- As assessee has furnished list of donors along with their addresses and the amount of donation - there are receipts issued by the assessee against the corpus donation received - But there was no enquiry conducted by the authorities below to verify the genuineness of the corpus donation received by the assessee in the under consideration - without verifying or conducting the necessary enquiries with respect to the donation shown by the assessee, the same cannot be treated as unexplained as alleged by the revenue. Thus, no addition of whatsoever is required to be made by treating the amount of donation as unexplained. - Decided in favour of assessee.

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• 2021 (10) TMI 346
  Reopening of assessment u/s 147 - Validity of reasons to believe - accommodation entries receipt - assumption of existence of jurisdictional fact/incorrect fact - HELD THAT:- AO if had made some preliminary enquiry after receipt of information then this kind of goof up could have been avoided. Thus in this case the AO has erroneously assumed the existence of jurisdictional fact/incorrect fact, so the reasons recorded to form the believe fails to stand the scrutiny of law, and the same was on an erroneous assumption of facts since the AO s reason to believe escapement of income was that the assessee is a beneficiary of accommodation entry provider Shri Gautam Jain Ors. Whereas in the assessment framed there is no whisper about Shri Gautam Jain and the figure of Rs. 12,33,210/- has come down to Rs. 6,16,605/-. Therefore, reason to believe escapement of income was on erroneous facts and therefore the AO did not enjoy the jurisdiction to reopen the assessment and therefore the assessee succeeds on the legal issue raised.

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• 2021 (10) TMI 345
  Non filing of E-appeal - appeal was filed manually in paper format within due time - CIT-A dismissing the appeal of the Company on the technical ground, that the appeal was not filed through e-filing system electronically - HELD THAT:- It is an admitted fact that the learned CIT(A) has dismissed the appeal in limine treating the same as non-est, since, the assessee has not e-filed the appeal and has filed the same manually in paper form. The Co-ordinate Benches of the Tribunal are taking a lenient view in such cases with a direction to the Ld. CIT(A) to allow the assessee to e-file the appeal and decide the appeal on merit. We, direct the Ld. CIT(A) to allow the assessee to file the appeal in electronic mode and decide the appeal on merit.

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• 2021 (10) TMI 344
  Addition u/s 40A(3) - commission paid by the assessee @ 5% of contract work awarded by NOIDA - AO held that the application of 8% on the turnover appears to be excessive AND payments exceeding Rs. 20,000/- were made to a single party and the assessee has willfully bifurcated the payments to keep it within the threshold limit - HELD THAT:- AO has not brought anything on record to disallow 5% of the expenses. He has not determined even the head under which the expenses have been inflated or bogus. Even, in the case of payments made in cash, absolutely no enquiries have been conducted. Assessing Officer held that the assessee could not substantiate the discrepancies but did not mention anything as to what are all the discrepancies found. The mere allegations cannot be treated as evidences. The fundamental principle of justice requires the Assessing Officer to discover and collect evidence and confront the assessee before making any disallowance. In the instant case, there was no mention at all as to which of the expenses is bogus or inflated. In the instant case, we find no primary evidences or secondary evidences or even any probabilities brought out by the revenue to resort to disallowance of 5% expenses over and above 6.77% net profit disclosed by the assessee. Any disallowance made by the revenue without bringing any evidence on record is liable to be set aside. Appeal of the assessee is allowed.

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• Benami Property

• 2021 (10) TMI 343
  Benami transaction - provisional attachment orders passed by the Initiating Officer u/s 24(4) of the Prohibition of Benami Property Transactions Act, 1988 - Real owners of property - transaction under the Companies Act of transferring shares of one shareholder to another - commercial complex as been leased out to the company by the JDA - HELD THAT:- As in the present case, all the properties in question being in the name of petitioner No.1-company and all applications which have been moved to the JDA authorities for surrendering land under Section 90B of the Rajasthan Land Revenue Act and for setting up a commercial building, have been made in the name of the company. The contention of the respondents with regard to intentions of petitioner Nos.2, 3 and 4 to own the plot of land adjacent to the plot owned by another company called Paradise Complex Ltd. and therefore, the petitioner No.1-company was set up, is clearly a misreading of the provisions of the Companies Act. Merely because the petitioner nos.2, 3 and 4 can be said to be shareholders of the company, the Paradise Complex Ltd. would not make them owners of land of the company. So far as the ownership of land is concerned, each company has right to purchase property. The Benami Act, 1988, in the opinion of this Court, would not extend to properties purchased by the company. The transactions of the company are independent transactions which are only for the purpose of benefit of the company alone. It is a different aspect altogether that on account of benefit accruing to the company, the shareholders would also receive benefit and they may be beneficiaries to a certain extent. This would however not make shareholders as beneficial owners in terms of the definition as provided under Section 2(12) of the Benami Act, 1988. Company as defined under the Companies Act, 1956 and incorporated thereunder, therefore, cannot be treated as benamidar as defined under the Benami Act, 1988. The company cannot be said to be a benamidar and its shareholders cannot be said to be beneficial owners within the meaning of the Benami Act, 1988. The entire fulcrum of this case, therefore, rests on misinterpretation of the provisions of the Benami Act, 1988. All the transactions in the corporate world made by the company would become benami transaction if the interpretation of definition as understood by the respondents is accepted by this Court. The entire proceedings initiated under the Benami Act, 1988 deserve to be quashed and set aside. The proceedings initiated under the Benami Act, 1988 are found to be based on income tax proceedings initiated and the statement recorded of one Madan Mohan Gupta. As per record, it is noticed that statement of Madan Mohan Gupta has not been accepted by the Income Tax Authorities for initiating any proceeding of evasion as against Rajendra Kumar Jain. The affidavits given by Madan Mohan Gupta are also not found to be reliable and he has changed his version from time to time. Transferring of shares by Madan Mohan Gupta to the petitioner nos.2, 3 and 4 could not be a ground to draw inference of benami transaction. It is opinion of the Court, the transactions done legally under the Companies Act of transferring shares of one shareholder to another, the benefit, if any, which may accrue on account of legally allowed transactions cannot be made as a ground to draw presumption of benami transaction under the Benami Act, 1988. The strict proof is required to be produced and there is no room for surmises or conjectures nor presumption can be made as the Benami Act has penal consequence. This Court also finds strength in the arguments made by learned counsel for the petitioners regarding provisions of Section 90B of the Rajasthan Land Revenue Act. Once the land has been surrendered and the order has been passed by the JDA under Section 90B of the Rajasthan Land Revenue Act, 1956 and the land has been converted from agriculture to commercial and registered lease deed has been executed by the JDA in favour of the company, the transaction is not a benami transaction. This Court concludes that action of the respondents in attaching commercial complex which has been leased out to the company by the JDA is illegal and unjustified and without jurisdiction. The provisional attachment orders dated 12.01.2018 passed by the Initiating Officer under Section 24(4) of the Benami Act, 1988 and the orders passed by the Adjudicating Authority dated 30.01.2019 confirming the orders under Section 26(3) of the Benami Act, 1988 are set aside with all consequential benefits. The property shall be handed over to the company.

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• Customs

• 2021 (10) TMI 342
  Refund of CVD and Special Additional Duty (SAD) - claims were either refunded through DEPB credit or rejected on the ground that DEPB scrips cannot be re- credited as per the Board Circular No.18/13/Cus dated 29.4.2013 - N/N. 102/2007-Cus - time limitation - HELD THAT:- Indisputably, in N/N.102/2007-Cus dated 14.9.2007, no time period was mentioned for claiming the refund under the said notification. By virtue of the amendment notifications and Circular Nos.6/2008, 10/2012 and 18/2013 issued by Central Board of Excise and Customs, additional restrictions were imposed for availing the exemption. It is well settled that the circular instructions which are administrative in nature cannot efface the effect of the statutory exemption notifications issued. After granting exemption subject to certain conditions, new conditions cannot be introduced by administrative directions or guidelines contrary to the statutory notification or restricting or withdrawing the benefits or imposing strict conditions. Time limitation - main ground for rejecting the refund claims of the assessee is that the DEPB Scheme had lapsed at the time of filing of refund applications after curing the defective applications by the assessee - HELD THAT:- Neither Section 27 of the Act of 1962 nor a notification under Section 25 (1), such as the amended notification in No.93/2008-Cus can be used to impose a limitation period and the right to claim refund. The contention of the Revenue that the period of six months during the relevant period is the period of limitation prescribed under Section 27 of the Act of 1962 for refund of claim as per Notification No.102/2007 is wholly untenable for the reason that the refund of SAD would be claimed by the assessee subsequent to completion of the assessment in many cases, as the SAD would be refundable only on subsequent sale which is not in the control of the assessee. Merely for the reason that DEPB Scheme has lapsed, the assessee cannot be deprived of the benefit flowing from the exemption Notification No.102/2007 if the conditions specified therein are fulfilled. If the DEPB Scheme has lapsed, notwithstanding 4% SAD paid through DEPB scrips, the assessee is entitled to the benefit of exemption N/N. 102/2007 by claiming refund through cash - the substantial questions of law are answered in favour of the assessee and against the Revenue.

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• 2021 (10) TMI 341
  Benefit of concessional rate of SAD - Declaration of RSP - proof of payment of actual VAT on sale after import - High Sea Sales - Notification No. 29/2010-Cus. dated 27.02.2010 - time limitation - import of Ordinary Portland Cement falling under CTH 2523 2910 - HELD THAT:- The investigation revealed that the RSP of the cement per 50 kg during the disputed period was above Rs. 190/- and therefore, importer is not eligible to avail the concessional rate of CVD in terms of clause 1A(i) of Notification No. 04/2006-C.E. The letter of the Superintendent of Customs dated 06.09.2011 showed that the importer was not doing any manufacturing activity in the premises although the importer contended that he is engaged in the manufacture of hollow blocks/bricks. Since there is no manufacturing activity, it cannot be said that the cement was captively consumed. For this reason, the importer is not eligible to avail concessional rate of Duty under clause 1C of the Notification No. 04/2006-C.E. as an industrial consumer. The consignments were seized and confiscated under the belief that it was not intended for retail sale and that the appellant-importer did not intend to discharge VAT on the imported goods. Such apprehension of the Department appears to be highly illogical and too premature. At the time of filing the Bills-of-Entry, the Department cannot assume events that are likely to happen later. If the conditions of the Notification are satisfied, the importer has to be given the benefit of the concession / exemption. The only condition stipulated in the Notification No. 29/2010-Cus. is that the RSP has to be declared on the pre-packaged goods, as required under the Standards of Weights and Measures Act/Rules - When the goods were in pre-packaged form and RSP affixed upon them, the condition required in the Notification stands satisfied at that stage of import. The Department cannot assume that the goods are imported with the intention for self-consumption only and proceed to deny the exemption. The main ground for denying the exemption provided under various clauses of the Notification No. 04/2006-C.E. dated 01.03.2006, as amended, is that though the RSP is affixed as Rs. 190 per 50 kg bag on the imported goods, the appellants have sold the cement at a higher price. In paragraph 13 of the impugned order, it is stated that the expenses incurred by the importer in the nature of transportation, liner charges, handling charges, etc., when included in the assessable value, the cement will have to be sold at a higher rate than Rs. 190/-. When RSP is declared on a pre-packaged commodity, the said price is the transaction value, unless there is evidence to show that it is not so. There must be some evidence to show that foreign supplier has received a higher amount. In the present case, the RSP declared is rejected stating that it is sold at a higher rate. In the absence of invoices to show that it was sold by the appellant at higher rate, the Department has proceeded to enhance the value on the basis of invoices of M/s. India Cements Ltd. The invoices of M/s. India Cement Ltd., their ER-I returns, etc., are seen produced by Department - The sale price of M/s. India Cements Ltd. for the cement cleared from the factory cannot be superimposed on the goods imported from another country. In the present case, there is no sale invoice before us. Actually, there is no evidence to conclude that the appellant herein has sold the entire cement imported. Time limitation - HELD THAT:- The demand cannot sustain on the ground of limitation. The demand of SAD and CVD on enhanced value cannot sustain. The same are set aside. Consequently, the order of confiscation, levy of redemption fine and penalty cannot sustain and hence, the impugned order is set aside - Appeal allowed.

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• Insolvency & Bankruptcy

• 2021 (10) TMI 340
  Withdrawal of the petition under Section 7, 9 or 10 of the IBC - CIRP was initiated but the settlement arrived at between the parties and the terms of settlement are filed alongwith this Application - inherent power under Rule 11 of NCLAT, Rules, 2016 - HELD THAT:- Hon ble Supreme court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [ 2019 (1) TMI 1508 - SUPREME COURT] unequivocally held that before constitute of committee of creditors, a party can approach the NCLT directly, and the Tribunal may, in exercise of its inherent powers under Rule 11 of the NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the concerned parties and considering all relevant factors on the facts of each case. It cannot be read that Hon ble Supreme Court has held that this Appellate Tribunal should exercise inherent power and allow or disallow an Application for withdrawal or settlement. It is well settled that inherent power can be exercised only when no other remedy is available to the litigant and nowhere a specific remedy is provided by the statute. If an effective alternative remedy is available, inherent power will not be exercised, especially when the applicant may not have availed of that remedy. It is also settled law that inherent power cannot be invoked which intends to by-pass the procedure prescribed. The procedure prescribed under the law is to be followed strictly - Rule 11 of NCLAT Rules, 2016 provides that the inherent power of the Appellate Tribunal can be exercised to make any orders as may be necessary for meeting the ends of the justice or to prevent abuse of process of the Appellate Tribunal. This provision suggest that such power can be exercised in the absence of express provision of the Code or Regulation. The procedure prescribed for withdrawal of the petition under Section 7, 9 or 10 of the IBC before the constitution of CoC and after constitution of CoC is provided in Section 12-A and Regulation 30-A of the Regulation. When the settlement has taken place at an appellate stage the Applicant who has filed the petition under Section 7 or 9 of the IBC may file the Application (Form FA) under Section 12-A of the IBC r/w Regulation 30-A of the Regulations for withdrawal of the Petition before the Ld. Adjudicating Authority - there is a prescribed procedure for withdrawal of Petition under Section 7 of the IBC. Therefore, there is no justification to invoke inherent power of this Appellate Tribunal and to take on record the terms of the settlement and pass the order for withdrawal of Petition under Section 7 of the IBC. Application dismissed.

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• 2021 (10) TMI 339
  Seeking reconciliation of the invoices that were presented by the Operational Creditor - absence of non-production of work completion reports relating to the invoices under question - Pre-existing dispute or not - HELD THAT:- No prima facie case is made out in favour of the Appellant, moreso in the light of the fact that the Corporate Debtor was making regular payments on invoices raised Corporate Debtor on the invoices raised before February 2018. This coupled with the fact that in the Reply on affidavit submitted by the Corporate Debtor in the Application filed by the Operational Creditor u/s. 9 of IBC before the Adjudicating Authority the Corporate Debtor has stated payable when able being his payment condition. The argument of the Ld. Counsel of Respondent No. 1 is convincing that this alleged dispute has been raised at this late stage only after the Operational Creditor started asking for his pending payments to show that a pre-existing dispute was present even though it is a spurious dispute, to avoid action under IBC. Thus we find that a prima facie case doesn t exist in favour of the Appellant. Both the parties are agreeable for early hearing and finalization of the appeal case on merits. Hence, no irreparable harm will be caused to the Corporate Debtor if he is not granted stay at this stage. Therefore, there are no sufficient and cogent reason to grant an order for staying the CIRP in the case. The matter be fixed for final hearing on 9th Nov. 2021.

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• 2021 (10) TMI 338
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- It is seen from the record that last part payment was received on 16.02.2016 and the Section 8 Demand Notice was dispatched on 01.02.2018. Admittedly, the Corporate Debtor received the Demand Notice but did not reply to the same. It is the case of the Appellant that this aspect of transit loss was never raised by the Corporate Debtor . A perusal of the Settlement Agreement entered into between the FCI and the Corporate Debtor dated 13.08.2014 shows that the storage loss between February 2011 till March 2012 was less than 0.5% and hence, was regularized. It was the transit loss which was not waived. As laid down by the Hon ble Supreme Court in MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [ 2017 (9) TMI 1270 - SUPREME COURT ] applying the test of Existence of a Dispute , without going into the merits of the case, we are of the view that in this matter, there is a plausible contention which requires further investigation, which is not a patently feeble legal argument or an assertion of fact unsupported by evidence. In the instant case, the Clause Work Description depicts that the Appellant/ Operational Creditor is responsible for the transit and the handling of all notified commodities . Apart from the Indemnity Clause VIII of the Agreement and Custody and Indemnity Bond , signed by both the parties, which provides for the Service Provider to cover all losses/damages and compensate the CRWC for the same, the communication on record dated 01.11.2012, 10.12.2012, 18.01.2013, show that there was an ongoing dispute regarding shortage of 335MT of boiled rice. A Joint Meeting was held which was attended by the Appellant, the Corporate Debtor and FCI - Settlement Agreement evidences that through storage losses upto 0.5% was regularized, Transit Losses (T/L) of Rs. 81,56,519/- was shared on a 50:50 ratio by FCI CRWC, both being Central Government Organizations, they bore the losses equally. Keeping in view the Indemnity Clause, the communication between the parties, filed before the Adjudicating Authority read together with the Settlement Agreement, we are of the view that the ratio of MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [ 2017 (9) TMI 1270 - SUPREME COURT ] is squarely applicable to the facts of this case as there is sufficient material to show that Dispute exists between the parties . There are no illegality or infirmity in the said Impugned Order - appeal dismissed.

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• 2021 (10) TMI 337
  Liquidation of Corporate Debtor - Section 33(1) read with Section 60 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The reasons assigned by the applicant in the application with respect to taking the decision of liquidation of the Corporate Debtor by the CoC appears to be genuine and convincing considering the financial conditions and assets of the company. It is observed from the minutes of the 2nd CoC meeting that the CoC has, with 93.31% majority, decided to liquidate the Corporate Debtor and relying on the settled principle of law regarding the Commercial Wisdom of the CoC, this Miscellaneous Application is allowed. The Corporate Debtor is ordered to be liquidated - application allowed.

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• Service Tax

• 2021 (10) TMI 336
  Refund claim - time limitation - refund claim rejected mainly on the ground that the appellant had not debited the amount claimed as refund from their CENVAT credit account, which according to the said authority, was in violation of Para 2(h) of N/N. 27/2012-CE (NT) dated 18.06.2012 - HELD THAT:- It is the case of the appellant that the claim of the appellant has been filed before the expiry of the quarter in which one year period from the last date of receipt of falls and accordingly the applications for refund is well within time. But, however, as regards the reversal, as could be gathered from the records, the adjudicating officer had no chance of verifying the veracity of the appellant s claim vis- -vis ST-3 Returns in the subsequent period wherein the said reversal was claimed to have been made. It is deemed proper to remand the case for the file of adjudicating authority before whom the appellant shall furnish its ST-3 Returns for the subsequent period wherein the said reversal is reflected - appeal allowed by way of remand.

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• 2021 (10) TMI 335
  Refund of service tax - double payment of service tax was made - refund rejected on the ground of time limitation - applicability of time limitation on tax paid under mistake of law - HELD THAT:- The first claim for refund was prior to May 2017 for which the claim was filed on 18/05/2018 which the adjudicating has held as barred by limitation. In respect of the second claim which is relating to the period April 2017 to July 2017 for which the claim was filed on 18.05.2018 was also held to be barred by limitation. The 3rd claim is relating to April 2017, the refund for which was claimed on 18.05.2018, has also been rejected as hit by limitation. In respect of the last claim which is relating to the period July 2016 to April 2017, the claim which is filed on 18.05.2018 has also been held to be barred by limitation, and, these findings have been upheld by the Commissioner(Appeals) in the impugned order. Hon ble High Court of Judicature at Madras in the case of M/S. 3E INFOTECH VERSUS CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL, COMMISSIONER OF CENTRAL EXCISE (APPEALS-I) [ 2018 (7) TMI 276 - MADRAS HIGH COURT] has considered an almost identical issue of refund under Section 11B ibid vis- -vis the time prescribed thereunder in respect of refund claims and after considering various decision of both the Hon ble Apex Court as well as other High Courts and it was held that when service tax is paid by mistake a claim for refund cannot be barred by limitation, merely because the period of limitation under Section 11B had expired. The refund claims rejected as time barred in these cases cannot be sustained - appeal allowed - decided in favor of appellant.

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• 2021 (10) TMI 334
  Maintainability of appeal - time limitation - period of delay beyond the actual date of filing of the appeals was within the condonable powers of the First Appellate Authority or not - HELD THAT:- Statute prescribes a time limit of two calendar months for filing the first appeal before the First Appellate Authority and the same statute empowers the said First Appellate Authority, if the said authority is satisfied, to condone filing of appeals beyond the prescribed two months, if the same is filed within a grace period of one more calendar month - Admittedly, the date of communication in the case on hand being 14.05.2019, the time limit including condonable period would expire on 13th August, 2019, but the appeals were filed on 14 th August, 2019 which is beyond the condonable prescribed period of limitation. The Hon ble Apex Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] has clearly held that even the Commissioner had no power to condone the delay after the expiry of 30 days grace period. This being the law of the land, the same prevails over the decisions of other lower courts. Appeal dismissed.

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• Central Excise

• 2021 (10) TMI 333
  CENVAT Credit - alleged bogus, fake and fabricated invoices - HELD THAT:- The impugned judgment and order, being a common one, the main issues and all aspects of the challenge to the common judgment and order of the Tribunal, have already been dealt in Central Excise Appeal No. 1 of 2020 by this Court and the entire proceedings being common, the judgment rendered therein will squarely apply in toto in respect of the instant Appeal. Appeal disposed off.

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• CST, VAT & Sales Tax

• 2021 (10) TMI 332
  Principles of natural justice - objections raised by the petitioner before the Assessing Officer has been considered or not - non-verification of Form WW - HELD THAT:- Though personal hearing for a revisional order under Section 27 of TNVAT Act is not statutorily imperative vide STATE BANK OF INDIA OFFICER S ASSOCIATION (CC) SBIOA VERSUS THE ASSISTANT COMMISSIONER (ST) [ 2019 (9) TMI 698 - MADRAS HIGH COURT ] , in the case on hand, as Hon ble single Judge vide earlier order has thought it fit to direct the respondent to give an opportunity of personal hearing before making the revisional order respondent ought to have given a personal hearing to writ petitioner before making the impugned order. On instructions, learned Revenue counsel submits that the records does not demonstrate that the personal hearing was given qua impugned order. Learned counsel for writ petitioner also pitches his case on this point. Owing to the earlier order made by another Hon ble single Judge, it would put to rest all controversies if the impugned order is done de novo i.e., afresh after giving a personal hearing. Impugned order is set aside solely on the ground that personal hearing has not been given - petition disposed off.

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• 2021 (10) TMI 331
  Violation of principles of natural justice - Validity of revision orders - notice not served to petitioner - impugned orders have been passed without giving personal hearing - HELD THAT:- It is deemed appropriate to make it clear that the impugned order in the senior WP, which has been made under CST Act is under Section 12 of CST Act read with Section 9(2A) of CST Act, whereas, impugned order in junior WP has been made under Section 12 per se of TNGST Act. To this extent, paragraph 3 of the previous proceedings shall stand corrected. Reverting to the core issue i.e., issue captured in the previous proceedings, learned Revenue counsel, on instructions submits that the first notice dated 11.12.2020 was returned unserved and to the second notice dated 08.03.2021, writ petitioner did respond citing the Covid-19 situation and sought time - there is no disputation that the first notice dated 11.12.2020 was made available to the writ petitioner only on 27.07.2021 post impugned order. In the case on hand, there is no disputation that there was no affixure much less affixure in the conspicuous place at his last known place of business/residence qua writ petitioner. Therefore, there was no service of notice as far as the 11.12.2020 notice is concerned. Impugned orders being orders are set aside solely on the ground that pre order notices have not been served in accordance with TNGST Rules - petition disposed off.

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• Indian Laws

• 2021 (10) TMI 330
  Dishonor of Cheque - Proclamation for person absconding - reason to believe - Section 138 N.I. Act read with Sections 141 and 142 N.I. Act - HELD THAT:- The provisions of Section 82(1) and (2) Cr.P.C. should be construed strictly. Before issuing process, a Court is required to record its satisfaction that the accused has absconded or is concealing himself to avoid execution of warrants. It is apparent that the impugned orders suffer from the vice of non-application of mind and deserve to be set aside. The declaration of the petitioner as an absconder , as well as attachment of his properties, was neither fit in the facts and circumstances of the case nor was it in accordance with law. Accordingly, the impugned orders passed in proceedings under Sections 82/83 Cr.P.C. against the present petitioner are set aside - petition allowed.

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• 2021 (10) TMI 329
  Grant of regular bail - Methamphetamine - petitioner is part of network who is engaged in supply/sale of Narcotics - Baggage Rules - Section 37 of the NDPS Act - HELD THAT:- Petitioner on 22.02.2018 was found in the possession of Methamphetamine and the same has been verified by conducting a chemical test of the sample of the seized material. The disclosure statement has lead to the arrest of two Nigerian accused in whose possession narcotics was found. It has also been discovered by the NCB that these two accused were living illegally in India on fake passports. Material on record discloses that the petitioner is a part of a network which deals in supply/sale of Narcotics. This is evident from the subsequent recoveries of Narcotics from foreign nationals. The clean tidy track record of the Petitioner does not absolve her from being in possession of 600 Gms of Methamphetamine. An uneducated person may claim no knowledge of the substance found in his/her possession and may raise a defense of the substance being planted on them but being a highly educated person, there is greater presumption that carrying large quantities of narcotics is a crime and that it would entail consequences in law which could be harsh and irrevocable. The quantity recovered from the Petitioner is commercial quantity. For the said reasons, the Petitioners case doesn t fall within the twin parameters of Section 37 of the NDPS Act - this Court is not inclined to grant bail to the Petitioner. Petition dismissed.

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