TMI Tax Updates - e-Newsletter
November 8, 2024

Case Laws in this Newsletter:

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

Articles

1. RCM cannot lead to double taxation where the supplier has paid tax

   By: Kamal Aggarwal and Aditi Vishnoi

2. PROVISIONS RELATING TO SUMMARY TRIAL IN CRIMINAL CASES

   By: DR.MARIAPPAN GOVINDARAJAN

3. Provisional Attachment under Section 83 valid when prima facie view arises that attachment is necessary to protect revenue interest

   By: Bimal jain

4. TAN Correction Online vs. Offline: Which Method is Better?

   By: Ishita Ramani

5. CBIC CLARIFICATIONS ON ‘GOODS’ AND ‘AS IS OR AS IS WHERE IS’ BASIS

   By: Dr. Sanjiv Agarwal

News

1. Shri Piyush Goyal unveils brochure and film for global mobility event, "Bharat Mobility Global Expo 2025"

Notifications

GST - States

1. G.O.Ms.No. 120 - dated 7-11-2024 - Telangana SGST

Amendment in Notification No. G.O.Ms.No.218, Revenue (CT-II) Department, Dated: 22.10.2018

2. G.O.Ms.No. 119 - dated 7-11-2024 - Telangana SGST

Notifying “Account Aggregator” as the systems with which information may be shared by the common portal based on consent

3. 17/2023- State Tax (Rate) - dated 7-11-2024 - Telangana SGST

Amendment in Notification No. 1/2017-State Tax (Rate), dated 29.06.2017

4. 16/2023- State Tax (Rate) - dated 7-11-2024 - Telangana SGST

Amendment in Notification No. 17/2017- State Tax (Rate) dated 29-06-2027

5. 15/2023- State Tax (Rate) - dated 7-11-2024 - Telangana SGST

Amendment in Notification No. 15/2017- State Tax (Rate) dated 29-06-2017

6. 14/2023- State Tax (Rate) - dated 7-11-2024 - Telangana SGST

Amendment in Notification No. 13/2017- State Tax (Rate), dated 29-09-2027

7. 13/2023- State Tax (Rate) - dated 7-11-2024 - Telangana SGST

Amendment in Notification No. 12/2017- State Tax (Rate), dated 29-06-2017

8. 12/2023- State Tax (Rate) - dated 7-11-2024 - Telangana SGST

Amendment in Notification No. 11/2017 – State Tax (Rate), dated 29-06-2027

SEZ

9. S.O. 4821(E) - dated 5-11-2024 - SEZ

Central Government de-notifies an area of 25.428 hectares, thereby making the resultant area as 361.378 hectares at Duppituru, Moturupalem, Maruturu and Gurujaplem Villages, Visakhapatnam District in the State of Andhra Pradesh

10. S.O. 4820(E) - dated 5-11-2024 - SEZ

Central Government notifies the 50.586 hectares area comprising the survey numbers and the area to set up a Multi-Sector SEZ at Kumarbagh, District West Champaran in the State of Bihar and constitutes an Approval Committee

Circulars / Instructions / Orders

Customs

1. PUBLIC NOTICE No. 17/2024 - dated 10-10-2024

Digitization of Customs Bonded Warehouse procedures relating to obtaining Warehouse License, Bond to Bond Movement of warehoused goods, and uploading of Monthly Returns - Reg.

Highlights / Catch Notes

GST

• Petitioner granted bail after nearly a year, citing false implication and right to speedy trial; court stresses "bail is the rule.

  Case-Laws - HC : Petitioner sought regular bail, contending false implication and non-impleadment of main accused. Petitioner underwent 11 months and 26 days of custody, with another case pending on bail. Charges framed u/ss 420, 467, 468, 471 IPC and Section 132 CGST Act, 2017. Court observed that out of 12 prosecution witnesses, only 3 examined till date, and further detention would violate Article 21's right to speedy trial, as per Dataram Singh case. Deprivation of liberty without speedy trial inconsistent with Article 21, as per Abdul Rehman Antulay case. Veracity of allegations to be established during trial. Only 3 witnesses examined despite charges framed, rendering further incarceration purposeless. Without commenting on merits, bail granted subject to conditions, applying "bail is rule, jail exception" principle.
  Visit to Get Source

  ---

• Bail Granted for Wrongful Input Tax Credit Case Citing Custody Duration, Co-Accused Bail, and Right to Speedy Trial.

  Case-Laws - HC : This is a judgment by the High Court granting regular bail to the petitioner accused of offenses u/ss 420, 467, 468, 471 of the Indian Penal Code and Section 132(1)(b) and (c) of the HGST Act, 2017, related to wrongful availment and utilization of Input Tax Credit (ITC). The court considered that the petitioner has already undergone substantial incarceration, co-accused have been granted bail, and the trial is likely to take considerable time. The court relied on the principles of criminal jurisprudence, the right to a speedy trial under Article 21 of the Constitution, and the need to minimize pre-conviction detention. The court also cited precedents emphasizing that bail is the general rule, and denial of bail should not be based solely on pending cases or convictions. Consequently, the petitioner was directed to be released on regular bail upon furnishing bail and surety bonds to the satisfaction of the trial court or duty magistrate.
  Visit to Get Source

  ---

• Court Confirms No Extensions Beyond Statutory Time Limits for GST Appeals Under Haryana GST Act 2017.

  Case-Laws - HC : The High Court examined the issue of whether the Appellate Authority was legally correct in rejecting appeals filed beyond the time limit prescribed under the Haryana Goods and Services Tax Act, 2017. It was found that while the petitioners had paid the pre-deposit for hearing the appeal, the appeals were admittedly filed beyond the limitation period, even exceeding the additional period of 30 days for condonation u/ss 107 and 35(1) of the Act. The provisions u/s 107 are not amenable to the Limitation Act, and the delay cannot be further condoned as the condonation is provided within the Act itself. Consequently, the Appellate Authority's action in rejecting the appeals cannot be deemed illegal or unjustified. The Supreme Court's decision in M/s Tecnimont Pvt. Ltd. Vs. State of Punjab, regarding non-deposit of pre-deposit and rejection of appeals, was considered, wherein the High Court retains jurisdiction under Article 226 to condone the pre-deposit requirement based on case facts. The cancellation of GST registration has a cascading effect on other businesses, necessitating finality in the decision and an efficacious remedy for the aggrieved person. The powers to hear appeals u/s 107 would not be subject to filing within the prescribed time, as it would not deprive a person.
  Visit to Get Source

  ---

• Tax registration cancelled without hearing or reasons.

  Case-Laws - HC : Order for cancellation of registration passed without providing opportunity of hearing or assigning reasons violates principles of natural justice. Coordinate Bench judgment held authorities should have considered transitional registration applications favorably during GST implementation. Despite directions, cryptic notice and order cancelling petitioner's registration issued without reasons. Appeal dismissed, precluding revisional remedy u/s 108. Impugned orders quashed, matter remanded to Assessing Officer at show cause notice stage for fresh adjudication after following due process.
  Visit to Get Source

  ---

• Unfair GST registration cancellation order quashed; due process ordered for show cause notice.

  Case-Laws - HC : GST registration cancellation order passed without providing reasons or opportunity for hearing, violating principles of natural justice. Appellate authority dismissed appeal without considering petitioner's submissions. High Court quashed cancellation order and appellate order, remanding matter to assessing officer for issuing show cause notice and following due process. Petitioner's registration to remain suspended till disposal of show cause notice in accordance with court's directions.
  Visit to Get Source

  ---

Income Tax

• Interest u/s 234C Not Applicable When TDS Not Deducted by Payer, Tribunal Rules in Favor of Assessee.

  Case-Laws - AT : The case pertains to the levy of interest u/s 234C for failure on the part of the payer to deduct tax deducted at source (TDS) u/ss 196D and 194LD. The key points are: Tax due on returned income means the tax chargeable on the total income declared in the return, reduced by the TDS amount. The advance tax is reduced by the TDS amount, meaning the assessee is not required to pay advance tax to that extent. Since the payers failed to deduct TDS, the assessee paid the full tax. Therefore, interest u/s 234C cannot be levied on the assessee for the payers' fault. The Bombay High Court in Ngc Network Asia LLC held that when the payer fails to deduct TDS, no interest u/s 234B can be imposed on the payee assessee. It is not a case of deferment in payment of advance tax u/s 234C since the assessee discharged the tax liability. Thus, the Appellate Tribunal directed the Assessing Officer to delete the impugned addition of interest u/s 234C, deciding in favor of the assessee.
  Visit to Get Source

  ---

• No surcharge if total income is below Rs 50 lacs, rules Income Tax Appellate Tribunal.

  Case-Laws - AT : The Income Tax Appellate Tribunal (ITAT) ruled that surcharge is not leviable when the total income is less than Rs. 50 lacs. The Assessing Officer had contended that since the assessee's tax liability would fall under the maximum marginal rate, surcharge would apply as per section 2(29). However, the assessee argued that as per the Finance Bill, 2022, surcharge is applicable only when the total income exceeds Rs. 50 lacs. The ITAT held that since the assessee's total income was Rs. 6,73,590/-, which is less than Rs. 50 lacs, levying surcharge would not be applicable. Consequently, the ITAT directed the Assessing Officer to delete the surcharge levied on the assessee Trust.
  Visit to Get Source

  ---

• Court Urges Tax Exemption for All Land Acquisition Compensation to Address Discrimination and Grievances.

  Case-Laws - HC : This case deals with the taxability of compensation paid to landowners for land acquisition. The court held that u/s 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 Act), the compensation paid to land-losers is exempted from income tax levy. However, this exemption is not available to those whose lands were acquired under other statutes like the Karnataka Industrial Areas Development Act 1966. The court observed that this creates an apparent hostile discrimination against land-losers under other statutes, as the compensation package under the 2013 Act is more attractive. The court urged the Central Government to address this issue and extend the tax exemption benefit to all land-losers, regardless of the statute under which their land was acquired, to assuage the grievance of land-losing farmers. The appeals were allowed, and the writ petitions of land-losers were dismissed.
  Visit to Get Source

  ---

• Sales Commission for Non-Resident Not Taxable in India if Operations Outside Country, Court Rules in Favor of Assessee.

  Case-Laws - HC : The issue pertains to whether the amounts received as sales commission by a non-resident assessee are in the nature of fees for included services, and whether such income accrued or arose in India. The court held that the case is covered by the decisions in Toshoku Ltd. and Evolv Clothing Co.(P). Ltd., which dealt with Section 9(1)(i) of the Act and its Explanation (a). If all operations are carried out in India, the entire income is deemed to accrue in India. However, if operations are not entirely carried out in India, only the part of income reasonably attributable to operations in India is deemed to accrue in India. If no operations are carried out in the taxable territories, income accruing abroad through business connection in India cannot be deemed to accrue in India. The decision was in favor of the assessee.
  Visit to Get Source

  ---

• Court Rules PCIT Lacked Authority for Section 263 Order; AO's Original Assessment Stands Unchallenged, Favoring Assessee.

  Case-Laws - HC : The High Court held that the Principal Commissioner of Income Tax (PCIT) lacked jurisdiction to pass an order u/s 263 of the Income Tax Act in this case. The Assessing Officer (AO) did not raise any queries regarding the Tax Deducted at Source (TDS) claim without declaring corresponding interest income during the assessment proceedings, nor did the assessee provide justification for the same. The PCIT sought to make an addition u/s 68 on a transaction that was not part of the reasons recorded for reopening the assessment. The Court observed that the PCIT's powers u/s 263 are in the nature of review and can be exercised only if the AO's order is erroneous and prejudicial to the Revenue's interests. Since the AO accepted the assessee's explanation regarding the share purchase transaction and the borrowed funds, the AO could not make additions on other grounds in the reassessment proceedings. Therefore, the non-addition of income commensurate to TDS or failure to make further inquiries did not confer jurisdiction on the PCIT to pass an order u/s 263. The decision was in favor of the assessee.
  Visit to Get Source

  ---

• Vendor's PAN Validated, 20% TDS Quashed for Aadhaar-Linked PAN.

  Case-Laws - HC : The High Court quashed the impugned orders, holding that Section 206AA, mandating 20% TDS rate for invalid PAN, was not applicable. The vendor had linked his PAN with Aadhaar by paying late fee, rendering his PAN valid. The petitioners remitted payment against vendor's valid PAN and filed Form 26QB mentioning the same. The departmental website accepted the filing without indicating PAN invalidity. Thus, deducting TDS at 20% rate by deeming vendor's PAN invalid was contrary to facts and violated natural justice principles.
  Visit to Get Source

  ---

• Informant's Reward Denied: Tax Evasion Info Already Known, Not Undisclosed, Tribunal Rules Against Petitioner.

  Case-Laws - HC : Qualification criteria for being an 'informant' under the Income Tax Informants Reward Scheme, 2018. The key points are: the information provided by the petitioner regarding cash deposits and repayment of deposits in violation of Sections 269SS and 269T was already known to the Assessing Officer during the assessment proceedings. Therefore, it cannot be considered as 'undisclosed income and wealth' eligible for reward under the Scheme. Additionally, the information did not lead to the detection of 'substantial tax evasion', which is a prerequisite for receiving the reward. The High Court held that since the transactions were reflected in the books and examined during assessment, the information provided by the petitioner was not new or undisclosed. The Tribunal's findings also did not support allegations of undisclosed income and tax evasion. Consequently, the petitioner's claim for a reward was rejected.
  Visit to Get Source

  ---

• Tax Tribunal Orders Reassessment: Assessee Gets Chance to Prove Purchases Made by Sister Concerns, Discrepancies Re-examined.

  Case-Laws - AT : Assessee failed to substantiate the difference between purchases shown in its Profit and Loss Account and TCS reflected in Form 26AS. Sample bills showed invoices raised in sister concerns' names with assessee's PAN, and payments reflected in sister concerns' bank accounts. Lower authorities ignored vital documents produced. ITAT restored the issue to AO, directing opportunity to assessee to substantiate that purchases were made by sister concerns reflecting in their accounts, paid from their bank accounts. AO may ask assessee to furnish voluminous details before verification unit and call report. AO to decide as per facts and law after due opportunity to assessee, who must appear without adjournment, else AO can pass appropriate order. Grounds allowed for statistical purposes.
  Visit to Get Source

  ---

• Dispute Over Stamp Duty Value for Property Sale: Assessing Officer vs. CIT(A) & ITAT on Section 43CA Interpretation.

  Case-Laws - AT : The case pertains to the applicability of Section 43CA, which deals with the adoption of stamp duty value as the full value of consideration for computing profits and gains from the transfer of immovable property. The assessee executed an agreement for sale of a flat on 30/04/2011, with earnest money paid on 26/04/2011. However, the agreement was registered in the subsequent assessment year. The Assessing Officer (AO) adopted the stamp duty value on the date of registration, leading to a higher value than the agreement value. The CIT(A) held that since there was only one registered sale agreement executed during the year under consideration, the stamp duty value as on the date of the agreement should be adopted as the deemed sale consideration. The ITAT upheld the CIT(A)'s order, directing the AO to compute profits and gains by considering the stamp duty value as on 30/04/2011, the date of the agreement for sale, in accordance with Section 43CA(3). The provisions of Section 43CA(4) were also satisfied since earnest money was paid before the agreement date.
  Visit to Get Source

  ---

• Foreign Portfolio Investor's FCC Loss Classified as Short-Term Capital Loss, Tribunal Upholds Carry Forward Eligibility.

  Case-Laws - AT : The assessee, a Foreign Portfolio Investor registered in India, entered into Forward Foreign Exchange Contracts (FCC) with HDFC Bank to safeguard against foreign currency fluctuation risk. The issue pertained to the treatment of loss arising from FCC as a short-term capital loss. The Tribunal held that while considering a similar issue, the coordinate bench in Citicorp Investment Bank (Singapore) Ltd. ruled that profit earned by a Singaporean bank on termination of forward contracts entered for safeguarding against foreign exchange fluctuation in respect of debentures purchased in India would be a capital gain exempt under the Indo-Singaporean DTAA. Additionally, in D.B. International (Asia) Ltd., it was held that the gain from a forward foreign exchange contract should be treated as a capital gain, and consequently, the loss arising from such a contract should be treated as a capital loss. Thus, the Tribunal found no infirmity in considering the loss on rollover/cancellation of FCC as a short-term capital loss eligible for carry forward under the head "capital gains," dismissing the grounds raised by the Revenue.
  Visit to Get Source

  ---

• Foreign Exchange Contracts with Actual Delivery Not Speculative; Expenses Allowed as Expenditure per ITAT Decision.

  Case-Laws - AT : Disallowance of provision for foreign exchange fluctuations and loss on forward contracts u/s 43(5) regarding speculative transactions. It clarifies that foreign currency is not a trading commodity, and the provisions of Section 43(5) are not applicable. To qualify as a speculative transaction, there should be a contract for purchase or sale of a commodity settled on a net-net basis without actual delivery. In this case, the contracts were settled by actual delivery, not on a net-to-net basis, and hence do not fall within the meaning of a speculative transaction u/s 43(5). Following the Supreme Court's decision in Woodward Governor India (P.) Ltd, the ITAT upheld the CIT(A)'s order allowing the provision for foreign exchange fluctuations and loss on forward contracts as expenditure for the year.
  Visit to Get Source

  ---

• Uncorroborated digital files, unproven entries can't justify tax additions - SC affirms inadmissibility of electronic data sans supporting proof.

  Case-Laws - AT : Digital images and Excel files found on partner's phone cannot be relied upon for making additions u/s 69C for unexplained expenditure. Loose papers and documents not corroborated by other evidence are considered dumb documents inadmissible as evidence. Mere entries in seized documents without proof of actual transactions cannot justify additions. Presumptions of imports based solely on electronic files without supporting materials are invalid. Additions made by the Assessing Officer solely relying on such uncorroborated electronic data were rightly deleted by the Tribunal following judicial precedents.
  Visit to Get Source

  ---

• Assessment Invalidated: Improper Approval under Sec 153D; Additions Removed for Lack of Cross-Examination and Improper Disallowance.

  Case-Laws - AT : Assessment u/s 153A was quashed due to improper approval granted u/s 153D by JCIT through a common mechanical communication without application of mind. Addition u/s 10(38) was deleted as opportunity for cross-examination of witness whose statement was relied upon was not provided, violating principles of natural justice as per Supreme Court's decision in Andaman Timber Industries case. Commission addition at 0.2% was also deleted. Disallowance of business promotion expenses for non-production of bills/vouchers was deleted following Delhi High Court's decision in R.G. Buildwell Engineers Ltd. case, approved by Supreme Court, holding that disallowance cannot be made without rejecting books of account.
  Visit to Get Source

  ---

• Assessment Reopening Valid; Tax Loss Disallowance Overturned Due to Insufficient Evidence of Price Manipulation.

  Case-Laws - AT : The reopening of assessment proceedings u/s 147 was valid as the Assessing Officer (AO) had received information about the assessee booking tax loss through trade in shares, which could not be considered a mere change of opinion. The AO provided independent findings regarding trading in shares of M/s. Radhe Developers Ltd., and the assessee's objections were not tenable. The decisions in NDTV, Calcutta Discount, Parshuram Potteries, and Bombay Stock Exchange cases were not relevant as the reopening was specific to trading in M/s. Radhe Developers Ltd.'s scrip and not just a second opinion. However, the disallowance of loss in share trading was not sustained as the AO and CIT(A) did not correlate the trading with price fluctuations of M/s. Radhe Developers Ltd. or establish the assessee's involvement in price manipulation. The SEBI report and suspension of Bombay Stock Exchange in 2015 were not sufficient to disallow the loss in the assessment year 2011-12.
  Visit to Get Source

  ---

• Capitalized software payments TDS failure disallows depreciation; Assets for testing from AEs not taxable income.

  Case-Laws - AT : Depreciation claim disallowance u/s 40(a)(i) for failure to deduct TDS on capitalized software payments is disallowed, following coordinate bench decision. Addition u/s 28(iv) for assets received free of cost from AEs for testing purposes is rejected, as assets are temporary, returned/destroyed after testing, pricing agreed under MAP embeds indirect benefits, and billing is cost-plus basis, precluding separate addition u/s 28(iv). Assessee's grounds allowed, revenue's appeal dismissed.
  Visit to Get Source

  ---

• Tribunal Rules Share Capital Transactions Legitimate; Revenue Fails to Prove Otherwise u/s 68.

  Case-Laws - AT : The assessee company received share capital and share application money from 13 share applicants. The Assessing Officer (AO) made an addition u/s 68, alleging that the identity, creditworthiness of the share applicants, and genuineness of the transactions were not proved. The assessee filed voluminous documents to establish the identity, creditworthiness, and genuineness. The Tribunal held that the documents speak for themselves, proving the identity, creditworthiness, and genuineness beyond doubt, as the share applicant companies had sufficient net worth to make the investments in the NBFC company for better returns. Once the assessee discharged the primary onus, the burden shifted to the Revenue. The AO's general observations of dissatisfaction without examining the correctness of the documents were unjustified. The audited balance sheets showed the share applicants had sufficient net worth. The provisions of Section 56(2)(viib) were not applicable for the year under consideration. The assessee successfully explained the nature and source of the share application money by proving the identity, creditworthiness, and genuineness. The assessee discharged the burden of proof, and the Revenue did not dispute the details except making general observations. Hence, no addition u/s 68 was called for.
  Visit to Get Source

  ---

• Trust denied registration for benefiting specific community, but broader charity objectives overlooked.

  Case-Laws - AT : The Income Tax Appellate Tribunal (ITAT) held that the provisions of Section 13(1)(b) of the Income Tax Act can be invoked at the time of assessment, based on the material brought on record. However, registration u/s 12A cannot be denied to a trust by invoking Section 13(1)(b) at the time of granting registration. The Commissioner of Income Tax (Exemptions) had denied registration u/s 12A to a trust due to one objective benefiting only the Jain community, invoking Section 13(1)(b), but overlooked the broader charitable objectives. The ITAT remanded the matter to the CIT (Exemptions) for reconsideration, directing not to disentitle the trust for registration solely on the grounds mentioned in the order rejecting the application.
  Visit to Get Source

  ---

• Late Employee Contribution Deposits to ESIC & EPF Count as Income; Supreme Court Confirms No Deductions for Delays.

  Case-Laws - AT : The delayed deposit of employees' share of contributions towards ESIC and EPF by the assessee beyond the due dates prescribed under the respective Acts would constitute income of the assessee by virtue of Section 36(1)(va) read with Section 2(24)(x) of the Income Tax Act. The Apex Court in Checkmate Services Pvt. Ltd. case observed this position. The non-obstante clause in Section 43B does not dilute or override the employer's obligation to deposit the amounts deducted from employees' income on or before the due date. The deduction is allowed only if the deposits are made before filing the return, but this cannot apply to amounts held in trust, such as employees' contributions, which are not part of the assessee employer's income. These amounts have to be deposited as per the welfare enactments on or before the due dates mandated by the concerned law for claiming deduction. The Assessing Officer/CPC was justified in rejecting the assessee's claim for deduction of delayed deposit of employees' share through an intimation u/s 143(1)(a) prior to the Checkmate Services judgment.
  Visit to Get Source

  ---

• Ex-parte appellate order set aside; case remanded for fresh hearing on firm dissolution and freight expense disallowance.

  Case-Laws - AT : Ex-parte appellate order passed by CIT(A) based on statement of fact filed by assessee. Second round of litigation regarding whether assessee firm stood dissolved or business discontinued. Disallowance of freight expenses u/s 40(a)(ia). Assessee did not participate in appellate proceedings before CIT(A) for reasons cited in statement of fact. Huge additions made by AO and huge tax demand raised against assessee in second round. Assessee acted negligently during appellate proceedings before CIT(A) but should not be allowed to benefit from its own wrong. CIT(A) passed ex-parte order based on record including statement of fact. Assessee did not comply with CIT(A)'s notices. Act of court should not prejudice anybody. Mandate of 1961 Act is to compute and collect correct taxes. Assessee now arguing against additions before ITAT, filing paper book. Contradictory statements regarding dissolution of firm versus discontinuance of business. Inquiries to be conducted in interest of justice. Appellate order set aside, matter remanded to CIT(A) for fresh adjudication after giving opportunity to both parties u/ss 189(1), 189(3), 189(4) read with Section 176(3).
  Visit to Get Source

  ---

• Beneficiary's Delayed Appeal Permitted After Trust's Dismissal; Unexplained Cash Deposits Under Scrutiny.

  Case-Laws - AT : Assessment order u/s 143(3) passed against an individual beneficiary, determining the primary assessee liable for taxation. The key points are: the assessment order was passed against the individual beneficiary, not the trust. Although the trust is the primary assessee u/s 160(1)(iv), the department can directly assess the beneficiary u/s 166. Since the assessment was framed against the beneficiary, the beneficiary should have filed an appeal before the CIT(Appeals), not the trust. The trust's appeal is dismissed, and the beneficiary is allowed to file a delayed appeal before the CIT(Appeals), who is directed to adopt a liberal approach regarding the delay. The issue pertains to the determination of the primary assessee liable for taxation and the unexplained cash deposits u/s 69A, where no source was provided.
  Visit to Get Source

  ---

• Contractor can continue its project completion method for income recognition for projects started before 2016.

  Case-Laws - AT : The assessee followed the project completion method for income recognition since inception. The transitional provisions stipulate that for projects commenced before March 31, 2016, but not completed by that date, revenue recognition shall be based on the method regularly followed prior to April 1, 2016. The Assessing Officer's application of the percentage completion method based on ICDS III by partially interpreting it was unjustified. The addition made by the Assessing Officer for the year under consideration by applying the percentage completion method was not justified and was set aside. The assessee's appeal was allowed.
  Visit to Get Source

  ---

Customs

• Court Upholds MEIS Benefits for Para Cumidine and Diaminostilbene, Aligns with Finance Act 2019, Valid Until Dec 31, 2020.

  Case-Laws - HC : The High Court held that the products Para Cumidine (ITC HS Code 2921 49 20) and Diaminostilbene 2, 2-disulphonic acid (DASDA) (ITC HS Code 2921 59 40) were part of Appendix 3B Table 2 of the MEIS scheme, and the revision of their ITC HS Codes through Notification No. 38/2015-2020 was merely to synchronize with the Finance Act (No. 2) of 2019. The Court observed that the annexures to the notification and the public notice No. 12/2015-2020 did not exclude these codes from the MEIS scheme. The reasons for denying the benefit were contrary to the notifications, which did not intend to exclude these products. The Court held that the contention of alignment with the Finance Act was untenable, as there was no change in the MEIS schedule for these items. The Court also rejected the objection regarding the discontinuation of the MEIS scheme, stating that the codes were not excluded from the scheme. Therefore, the petitioner was entitled to the MEIS benefit for these products until 31.12.2020.
  Visit to Get Source

  ---

• "G Type Tempered Glass Lid" Classified Under Tariff Heading 7010 for Glass Lids, Not Associated Goods.

  Case-Laws - AT : Classification of "G Type Tempered Glass Lid" under the appropriate tariff heading, either 7013 or 7010. It is held that glass lids are covered under heading 7010, which specifically mentions "stoppers, lids and other closures, of glass" as an independent entry, distinct from the other items like bottles, jars, etc. Heading 7013 does not have a specific entry for glass lids. The revenue's contention that lids under 7010 should be of the goods mentioned in the same heading is incorrect, as the description of "stoppers, lids and other closures, of glass" is provided independently after a semicolon. Therefore, irrespective of its use, a glass lid is correctly classified under heading 7010, which specifically covers it, rather than 7013, which lacks a specific entry for glass lids.
  Visit to Get Source

  ---

• Customs broker suspended for unauthorized filings, negligence on compliance, enabling endangered wood smuggling.

  Case-Laws - AT : Customs broker's license suspended for violating regulations by filing shipping bill without authorization, failing to advise client on compliance, and not verifying client's identity. Broker facilitated attempted smuggling of endangered red sanders wood by filing shipping bill behind exporter's back. Violations deliberate, not innocent errors. Allowing such practices would undermine customs controls, enabling smuggling of prohibited goods. Appellate tribunal upheld suspension order, finding broker sublet license credentials and colluded in smuggling scheme.
  Visit to Get Source

  ---

• Customs' delay exceeds limitation period, proposals go beyond notice scope.

  Case-Laws - AT : The Show Cause Notice (SCN) issued after more than ten years is time-barred, exceeding the extended period of limitation of five years provided u/s 28. The proposals in the SCN do not fall within the scope of Section 124, which allows notice for confiscation of goods and imposition of penalty. The only proposal falling u/s 124 is the imposition of penalty u/s 114, which cannot be sustained as there is no proposal to confiscate export goods or hold them liable for confiscation u/s 113, a prerequisite for imposing penalty u/s 114. The remaining proposals in the SCN fall beyond the scope of any SCN issued u/s 124. The Appellate Tribunal (CESTAT) is mentioned.
  Visit to Get Source

  ---

• Press Release on Mega Power Policy 2006 Modifications Not a 'Change in Law' Under Power Purchase Agreement.

  Case-Laws - SC : Whether the press release of 01.10.2009 announcing modifications to the Mega Power Policy 2006 constitutes a 'Change in Law' under Article 13 of the Power Purchase Agreement (PPA). The key points are: The press release did not alter/amend/repeal the existing law as of 01.10.2009, it merely announced a proposal approved by the Cabinet subject to certain conditions. No vested rights were created for any party to the PPA on 01.10.2009. Accepting the argument would create legal uncertainty with two regimes operating between 01.10.2009 and 11.12.2009/14.12.2009, contrary to the rule of law principles of clarity and predictability. The doctrine of promissory estoppel is inapplicable as the respondent PSPCL was not the promisor. The customs duty exemption and policy document constituting the 'Change in Law' came into effect on 11.12.2009 and 14.12.2009 respectively, not on 01.10.2009. The State Commission rightly held that benefits under the Mega Power Status would accrue only from 30.07.2010, when it was granted, and not from any prior date.
  Visit to Get Source

  ---

• Court Overturns Absolute Confiscation of Diamonds; Orders Reassessment of Values to Prevent Market Entry of Conflict Diamonds.

  Case-Laws - AT : This case deals with the valuation of 'rough diamonds' imported into India and the subsequent discrepancy between the declared value and the reassessed value by customs authorities. The key points are: Customs authorities confiscated the goods u/s 111(m) of the Customs Act, 1962, for misdeclaration of particulars in the bill of entry. The appellate authority enhanced the confiscation to 'absolute' confiscation without prior notice, which was challenged as violating natural justice. The court held that absence of prior notice is not required when the appellate authority is only enhancing the gravity of confiscation. The proposal for reversal of redemption of confiscated goods served as notice of potential outcome. Absolute confiscation was set aside as it could lead to 'conflict diamonds' entering the domestic market, contrary to India's commitment to ban their trade. The mismatch in the certificate alone is not a ground for absolute confiscation. The court remanded the case for re-determination of value as per statutory procedure, with only the misdeclared portion liable for confiscation subject to redemption, and the rest eligible for clearance.
  Visit to Get Source

  ---

Corporate Law

• Court Rules Digital Signatures Not Required for Filing Form CHG-1 When Company Fails to Register Charge.

  Case-Laws - HC : The Court held that when a company fails to register a charge as mandated u/s 77 of the Companies Act, 2013, insisting on digital signatures from the company itself while filing Form CHG-1 u/s 78 for charge registration would contradict the very purpose of Section 78, which is designed to address such lapse or refusal by the company. The instructions for Form CHG-1 do not accommodate situations where the company's cooperation cannot be presumed. Therefore, the requirement for digital signatures from the company should not be insisted upon while filing Form CHG-1 u/s 78 when the company defaults on its statutory duty u/s 77. The High Court dismissed the appeal, upholding the view that digital signatures from the company need not be mandated in such circumstances.
  Visit to Get Source

  ---

Benami Property

• Property Suit Dismissed: No Ownership Claim Under Benami Act; Plaintiff Must Vacate & Pay for Illegal Occupation.

  Case-Laws - HC : The plaintiff sought a mandatory injunction for possession of the suit property and a permanent injunction restraining the defendants from dispossessing or interfering with the plaintiff's possession. The court held that the late Sardar Nirmal Singh occupied the property as a licensee, and allowing his family to claim ownership would be an abuse of the Benami Act. The court found no fiduciary relationship between the late Raghbir Singh and Sardar Nirmal Singh regarding the property. The suit lacked cause of action, and the ownership claim was barred u/s 4 of the Benami Act. The amendment application relying on Pankaja judgment was misplaced. The suit was rejected under Order VII Rule 11(a) and 11(d) of CPC. The court issued a mandatory injunction directing the plaintiff to hand over vacant possession to defendant no. 1 within four weeks, considering the plaintiff's illegal and unauthorized possession. Mesne profits were awarded from 01.05.2022 for continued illegal possession. The plaintiff's reliefs were dismissed, and actual costs were imposed for abuse of process u/s 35(2) CPC and Delhi High Court Rules, as per Ramrameshwari Devi judgment.
  Visit to Get Source

  ---

IBC

• Insolvency Proposal Rejected: Tribunal Upholds Creditors' Decision, Stresses Timely Resolution Process Under IBC.

  Case-Laws - AT : Rejection of the appellant's proposal for settlement u/s 12A of the Insolvency and Bankruptcy Code (IBC) by the Committee of Creditors (CoC) and the National Company Law Appellate Tribunal's (NCLAT) decision upholding the denial of another opportunity to submit a Section 12A proposal. The key points are: 80.22% of CoC members had already voted against the appellant's settlement proposal, deeming it unfeasible and commercially unviable. Simultaneously, the Successful Resolution Applicant's (SRA) resolution plan was approved by 80.84% of the CoC. The NCLAT emphasized the primacy of the CoC's commercial wisdom, stating that the suspended management cannot insist on consideration of its proposal when the CoC has categorically decided against it. The Tribunal also noted the time-sensitive nature of IBC proceedings and the need to avoid indefinite delays, as the resolution plan had been pending for nearly four years. Consequently, the NCLAT dismissed the appeal, finding no error in the Adjudicating Authority's decision to disallow further opportunities for the appellant to submit a Section 12A proposal.
  Visit to Get Source

  ---

• Limitation period restarted with debt acknowledgement; Application for resolution held valid.

  Case-Laws - AT : Application for resolution of debt filed u/s 7 was contested on grounds of limitation prescribed under Article 137 of Limitation Act, 1963. Accounts declared non-performing assets on 31.03.2015, but corporate debtor acknowledged liability by making payment of Rs. 2.65 crore in December 2016, restarting limitation period from that date u/ss 18 and 19. Application filed in 2018 was well within three-year limitation period from December 2016 acknowledgement. Tribunal erred in examining limitation issue. Appellate Tribunal set aside impugned order and remanded matter back to Tribunal.
  Visit to Get Source

  ---

• Tribunal Dismisses Insolvency Application for Delay; Upholds Strict Compliance with Limitation Period under IBC.

  Case-Laws - AT : The Tribunal examined the maintainability of an application for initiating the Corporate Insolvency Resolution Process (CIRP) u/s 7 of the Insolvency and Bankruptcy Code (IBC). It addressed the issue of condonation of delay in filing the petition. The Operational Creditor (OC) claimed a bona fide belief that the petition was filed within the limitation period. However, the Tribunal held that Section 5 of the IBC applies to applications filed u/ss 7 or 9, and cited the Supreme Court's decision in B.K Educational Services Pvt. Ltd. Vs. Parag Gupta And Associates, which stated that the right to sue accrues when a default occurs, and if the default occurred over three years prior to the application filing, it would be barred under Article 137 of the Limitation Act, except in cases where Section 5 may be applied to condone the delay. The Tribunal rejected the OC's plea of bona fide belief and held that the mandatory provision must be complied with, and the delay must be sufficiently and convincingly explained for condonation. Finding no merit in the appeal, the NCLAT dismissed it.
  Visit to Get Source

  ---

Indian Laws

• Cheque dishonor case: Timely notice & complaint filing within limitation period upheld.

  Case-Laws - HC : Dishonor of cheque due to insufficient funds, the legal requirements for issuing notice and filing a complaint within the prescribed time limit, and the court's analysis of whether the complaint was filed within the limitation period. It discusses the applicability of Section 4 of the Limitation Act when the limitation period expires on a court holiday. The court found that the Magistrate and Additional Sessions Judge did not err in issuing the summoning order against the petitioner, as the complainant provided pre-summoning evidence through an affidavit as per Section 145. The High Court dismissed the petition, holding that the lower courts did not commit any illegality warranting interference u/s 482 of the Code of Criminal Procedure.
  Visit to Get Source

  ---

• Cheque dishonour case dismissed as signature not petitioner's; no liability u/s 138.

  Case-Laws - HC : Cheque dishonoured due to signature being different from the petitioner, implying Bhagawat Daulat Gawali had no authority to sign on behalf of the petitioner-accused or his proprietorship firm. Cheque does not bear petitioner-accused's signature, so cannot be held liable for issuance or dishonour u/s 138 of NI Act, 1881. Respondent's assertion that Gawali issued cheque on behalf of petitioner-accused to discharge liability is untenable u/s 138, which is specific and applicable only to drawer and drawee. No third party can be summoned u/s 138. Petitioner-accused, not being signatory, cannot be summoned in complaint case filed by respondent u/s 138. Summoning order dated 01.02.2021 is illegal and set aside.
  Visit to Get Source

  ---

• Cheques Bounce Case: Petitioners Cleared of Liability, Proceedings Against Issuer Continue Under Negotiable Instruments Act.

  Case-Laws - HC : This case pertains to the dishonor of cheques and the challenge to cognizance and summoning orders. The key points are: The cheques were signed and issued by respondent No. 3, Bhagawat Daulat Gawali, in his individual capacity, unconnected to the petitioners or the alleged business transaction between petitioner No. 1 (Bipin Lal Singh Pagar through his proprietorship firm) and respondent No. 2 (Tiger Logistics (India) Limited). The cheques were dishonored due to "Account Closed." Since petitioner No. 1 did not sign the cheques, he cannot be held liable u/s 138 of the Negotiable Instruments Act, 1881. Respondent No. 2's claim that the cheques were issued by respondent No. 3 on behalf of the petitioners may be grounds for a civil suit but not a complaint u/s 138. The petitioners, not being signatories, cannot be summoned in the complaint case u/s 138. The summoning orders against the petitioners are set aside, though proceedings may continue against Bhagawat Daulat Gawali in accordance with the law.
  Visit to Get Source

  ---

VAT

• Bank's charge trumps State's tax dues in property auction.

  Case-Laws - HC : Under the SARFAESI Act, a bank's charge takes priority over the State's claim for outstanding dues related to specific land. The High Court held that the charge created by the State for sales tax or VAT dues has no legal efficacy due to the SARFAESI Act and RDB Act provisions. The petitioner bank had created a prior charge in 2011, while the State's charge was in 2018. Therefore, the petitioner bank's charge has priority over the property auctioned to petitioner no. 2. Consequently, the impugned orders were quashed, and the petition was allowed.
  Visit to Get Source

  ---

Service Tax

• Tribunal Rules Extended Limitation Unjustified Without Evidence of Intent in Service Tax Assessment Disputes.

  Case-Laws - AT : Issue of invoking an extended period of limitation for service tax assessment in cases involving interpretation of legal provisions. It establishes that mere interpretation differences or omissions without intent cannot justify invoking the extended period. The key points are: Interpretation issues regarding taxability do not constitute willful suppression of facts justifying extended limitation. The responsibility lies with the tax officer to scrutinize returns and make assessments within the normal period. Any revenue loss due to non-scrutiny is a policy risk taken by the department. Extended limitation requires evidence of fraud, collusion, willful misstatement or violation with intent, which cannot be presumed from differing interpretations or non-scrutiny. The tribunal ruled in favor of the assessee on the limitation issue, deeming it unnecessary to examine the merits.
  Visit to Get Source

  ---

• Tribunal Supports CENVAT Credit Refunds, Allows Document Submission; Swachh Bharat Cess Refunds Upheld Despite Past Claims.

  Case-Laws - AT : This case deals with the issuance of an addendum/corrigendum to a show cause notice after a six-month gap, refund of accumulated CENVAT credit availed on export of services, and refund of Swachh Bharat Cess. The Tribunal held that there is no legal infirmity in issuing an addendum to supplement allegations in the original show cause notice. Regarding the refund claim for CENVAT credit on exported services, the Tribunal remanded the matter to allow the appellant to produce relevant supporting documents to fulfill the notification conditions, citing precedents that substantive benefits cannot be denied for procedural lapses. On the refund of Swachh Bharat Cess, the Tribunal relied on previous decisions allowing utilization of CENVAT credit for discharging the cess and entitlement to refund, despite the appellant's earlier letter not pressing the claim.
  Visit to Get Source

  ---

Case Laws:

• GST

• 2024 (11) TMI 279
  Challenge to issuance of summons under Section 70 of the Central Goods and Services Tax Act, 2017 on the ground that the summoning authority lacks jurisdiction by virtue of Section 6 Sub-section 2(b) of the CGST Act - HELD THAT:- The submissions put forth are to the effect that once a detailed reply has been submitted by the petitioner, it is incumbent upon the authorities concerned to take a decision in consultation with the competent authority having jurisdiction to make the assessment. The opposite party nos. 3 and 4 are directed to take an appropriate decision on the reply filed by the petitioner, as mentioned above, expeditiously and preferably within a period of two months from the date a copy of this order is produced before the authorities concerned. The order so passed shall be communicated to the petitioner without fail. Petition disposed off.

  ---

• 2024 (11) TMI 278
  Dismissal of appeal preferred by the petitioner as not being maintainable - no date was fixed for hearing which is mandatory in terms of Section 75(4) of GST Act - violation of principles of natural justice - HELD THAT:- Considering that there is no material by the respondents to suggest that any hearing was fixed or the petitioner was afforded an opportunity of hearing and finding the same to be prima-facie in violation of principles of natural justice as well as under Section 75(4) of GST Act which is mandatory, the order dated 23.12.2023 is quashed. As the main order dated 23.12.2023 has been quashed, the order dated 05.07.2024 is also set aside - the matter is remanded to respondent no.2 to pass a fresh order in accordance with law after giving an opportunity of hearing to the petitioner - petition allowed by way of remand.

  ---

• 2024 (11) TMI 261
  Seeking grant of regular bail - petitioner submits that petitioner has been falsely implicated in this case and the main accused have not been impleaded - petitioner has undergone actual custody of 11 months and 26 days and there is one another case registered against him, in which he is on bail - offences u/s 420, 467, 468, 471 IPC and Section 132 CGST Act, 2017 - HELD THAT:- Admittedly, the charges were framed on 29.09.2023 and out of total 12 prosecution witness, three prosecution witnesses have been examined till date and one witness has given up. Further detention of the petitioner will not serve any useful purpose and will be violation of Article 21 of the Constitution of India including the right to speedy trial, and is against the principle Bail is a rule, jail is an exception as elucidated in the judgment of Apex Court in DATARAM SINGH VERSUS STATE OF UTTAR PRADESH AND ANR. [ 2018 (2) TMI 410 - SUPREME COURT] . Deprivation of personal liberty without ensuring speedy trial is not consistent with Article 21. While deprivation of personal liberty for some period may not be avoidable, period of deprivation pending trial/appeal cannot be unduly long. The Apex Court in ABDUL REHMAN ANTULAY VERSUS R.S. NAYAK [ 1991 (12) TMI 274 - SUPREME COURT] observed that Right to Speedy Trial flowing from Article 21 encompasses all the stages, namely the stage of investigation, inquiry, trial, appeal, revision and retrial. The veracity of the allegations leveled against the petitioner shall be established during the course of the trial. Admittedly, the charges have been framed and only three prosecution witness have been examined till date. Therefore, this Court is of the view that further incarceration of the petitioner would not serve any purpose. Without commenting anything on the merits of the case, lest it may prejudice the trial, the present petition is allowed and order is made absolute. The petitioner shall abide by the conditions imposed - bail application allowed.

  ---

• 2024 (11) TMI 260
  Grant of concession of regular bail - wrongful availment and utilization of Input Tax Credit (ITC) - offences under sections 420, 467, 468, 471 of I.P.C 132 (1) B C of HGST Act, 2017 - HELD THAT:- The petitioner has already suffered sufficient incarceration i.e. 3 years, 2 months and 16 days, similarly situated co-accused have already been granted concession of bail by this Court, and as per the principle of the criminal jurisprudence, no one should be considered guilty, till the guilt is proved beyond reasonable doubt, whereas in the instant case, challan stands presented on 28.01.2022 and charges stands framed on 24.05.2022, out of 40 witnesses, 8 PWs have been examined so far which is sufficient for this Court to infer that the conclusion of trial is likely to take considerable time and detaining the petitioner behind the bars for an indefinite period would solve no purpose. Reliance can be placed upon the judgment of the Apex Court rendered in Dataram versus State of Uttar Pradesh and another [ 2018 (2) TMI 410 - SUPREME COURT ], wherein it has been held that the grant of bail is a general rule and putting persons in jail or in prison or in correction home is an exception. To elucidate further, this Court is conscious of the fundamental principle of law that right to speedy trial is a part of reasonable, fair and just procedure enshrined under Article 21 of the Constitution of India. This constitutional right cannot be denied to the accused as is the mandate of the Apex court in HUSSAINARA KHATOON AND ORS. VERSUS HOME SECRETARY, STATE OF BIHAR, PATNA [ 1979 (3) TMI 215 - SUPREME COURT ]. Besides this, reference can be drawn upon that pre-conviction period of the under-trials should be as short as possible keeping in view the nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence, reasonable apprehension of tampering with the witness or apprehension of threat to the complainant. Reliance can be placed upon the order of this Court rendered in BALJINDER SINGH ALIAS ROCK VERSUS STATE OF PUNJAB [ 2023 (3) TMI 1537 - PUNJAB AND HARYANA HIGH COURT] , wherein, while referring Article 21 of the Constitution of India, this Court has held that no doubt, at the time of granting bail, the criminal antecedents of the petitioner are to be looked into but at the same time it is equally true that the appreciation of evidence during the course of trial has to be looked into with reference to the evidence in that case alone and not with respect to the evidence in the other pending cases. In such eventuality, strict adherence to the rule of denial of bail on account of pendency of other cases/convictions in all probability would land the petitioner in a situation of denial of the concession of bail. The petitioner is directed to be released on regular bail on his furnishing bail and surety bonds to the satisfaction of the trial Court/Duty Magistrate, concerned - Petition allowed.

  ---

• 2024 (11) TMI 259
  Time limit for filing appeals - whether the Appellate Authority hearing appeals in terms of Section 107 of the Act was legally correct in rejecting the appeals which had been filed after the requisite time period laid down in Haryana Goods and Services Tax Act, 2017? - HELD THAT:- It is found that while the petitioners had paid the pre-deposit for hearing on the appeal, it is an admitted position that the appeals had been filed beyond the limitation period that even beyond the period which could be condoned under the provisions of Section 107 and 35 (1) of the Act while the said provision provides for a period of three months for filing of an appeal with additional period of 30 days for condonation, the provisions under Section 107 are not condemnable to Limitation Act and therefore, the delay cannot be further condoned. The condonation being provided under the Act itself. In view thereto, the action of the Appellate Authority in rejecting the appeals cannot be said to be illegal or unjustified. Hon ble Supreme Court in the case of M/s Tecnimont Pvt. Ltd. Vs. State of Punjab and others [ 2019 (9) TMI 788 - SUPREME COURT] , the similar issue relating to non-deposit of in cases where the pre-deposit had not been made, and the appeals were rejected before the Supreme Court where the Hon ble Supreme Court observed that the order was not unjustified in rejecting the appeals but left it open for the High Court to exercise its jurisdiction under Article 226 considering the facts of each case to condone the requirement of pre-deposit. The cancellation of registration of GST has cascading effect on all the other businessman too who are receiving the goods from the concerned businessmen whose GST registration has been cancelled. Therefore, in these circumstances, it is essential that a finality should be arrived at between the decision taken for cancellation of the registration and also at the same time remedy should be available which is efficacious to the concerned aggrieved person. The powers to hear the appeal in terms of Section 107 of the Act would not be subject to filing of an appeal within the time prescribed wherein, it would not in any manner deprive a person from claiming the right of hearing of an appeal by filing of a writ petition before this Court for condonation of delay. Petition allowed.

  ---

• 2024 (11) TMI 258
  Cancellation of registration of petitioner - opportunity of hearing not provided - order was passed without assigning any reason for cancellation of the registration of the petitioner - principles of natural justice - HELD THAT:- The Coordinate Bench of this Court in case of AGGARWAL DYEING AND PRINTING WORKS VERSUS STATE OF GUJARAT 2 OTHER (S) [ 2022 (4) TMI 864 - GUJARAT HIGH COURT] has held that The Appellate authority ought to have appreciated that the writ applicants at relevant point of time i.e. in year 2017, applied for registration which request was favourably considered by the authorities under the Act with a specific registration number allotted to the writ applicant. It was a transitional phase, whereby the old CST Act was repealed and the new regime of CGST/ GGST has come into force. The aforesaid judgement was rendered in the year 2022. However, in spite of the above direction issued by this Court, the respondent-authorities without following such directions are issuing cryptic notice and order for cancellation of registration number of the petitioner - In the present matter, order of cancellation of registration is passed without giving any reason by the respondent authorities, and appeal filed by the petitioner under Section 107 of the GST Act is also dismissed. As the Appellate Authority has dismissed the appeal of the petitioner, the respondent authorities will not be able to exercise the revisional power under section 108 of the GST Act. Therefore, the impugned order passed by the Appellate Authority as well as the order of cancellation of registration are required to be quashed and set aside. Accordingly, the matter is remanded back to the Assessing Officer at the show cause notice stage. Petition allowed by way of remand.

  ---

• 2024 (11) TMI 257
  Rectification of apparent mistake underlying the passing of the impugned order - tax period of July 2018 to March 2019 - HELD THAT:- It is informed that the writ petitioner has preferred an appeal against the order of 01 February 2021. In view of the aforesaid and admitted facts which emerge, it is apparent that the impugned order of 23 April 2024 would not sustain - petition allowed.

  ---

• 2024 (11) TMI 256
  Cancellation of GST registration - no reasons for cancellation provided - violation of principles of natural justice - HELD THAT:- The respondent authorities rejected the application for revocation of cancellation contrary to the directions issued by this Court. Respondent no.3 also rejected the appeal without referring to the details submitted by the petitioner - In the present case, order of cancellation of registration is therefore, passed without assigning any reason by the respondent authority and penalty was imposed without any notice and opportunity of hearing to the petitioner and appeal filed by the petitioner under section 107 of the GST Act against the order of rejection of application for revocation of cancellation is also dismissed. As the appellate authority has dismissed the appeal of the petitioner, respondent authority will not be able to exercise revisional power under section 108 of the GST Act. Therefore, the impugned order passed by the appellate authority as well as order of cancellation of registration are required to be quashed and set aside and accordingly, the matter is remanded back to the Assessing Officer at show cause notice stage. The petition is partly allowed by quashing and setting aside the impugned orders passed by the appellate authority as well as order of cancellation of registration and the matter is remanded back to the respondent authority at the show cause notice stage. However, registration of the petitioner shall remain suspended till the show cause notice is disposed of as per the directions given by the Court.

  ---

• 2024 (11) TMI 255
  Maintainability of petition - petitioner requests for a short accommodation - HELD THAT:- Ex facie, the present petition appears to be pre-mature. The directions pertain to the cancellation of the GST registration of the petitioner and vide order dated 28.08.2024, four weeks time has been granted, which is yet to expire. The petition is dismissed for being pre-mature without prejudice.

  ---

• Income Tax

• 2024 (11) TMI 277
  Addition u/s 68 - Genuineness or creditworthiness of the unsecured loans received by the petitioner during the year not proved - HELD THAT:- Petitioner has furnished all the relevant documents containing the copy of the ledger account from its audited books, confirmation of respective depositor with PAN Number, copy of its bank statements, copy of the ITR filed by the respective depositors, copy of the bank statements of respective depositors from where the funds were provided, which is evident from the paper-book filed by the petitioner in this petition as it contains the documents submitted during the assessment proceedings. It is pertinent to note that no dispute has been raised by the respondent with regard to submission of the aforesaid documents by the petitioner during the assessment proceedings. We are conscious about the settled legal position that extra-ordinary jurisdiction under Article 227 of the Constitution of India is required to be exercised sparingly and a self-restraint is required to be maintained on the entertainment of a writ challenging the orders where alternative efficacious remedy is available. However, in the gross facts of the present case, we are constrained to exercise our extra-ordinary jurisdiction as the Assessing Officer has not considered the documents placed on record and without referring to the same, has made vague observations, which are not tenable in the eyes of law and therefore, we are left with no other option but to entertain this petition in the facts of the case. This Court is of the view that the impugned assessment order has been passed without considering the documents placed on record and therefore, the same is not tenable in the eyes of law. Decided in favour of assessee.

  ---

• 2024 (11) TMI 276
  Validity of reopening of assessment - Jurisdictional validity of the notice and order issued u/s 148, 148A(b), and 148A(d) - Application of mind by the specified authority in granting sanction for reopening the assessment or not? - petitioner did not submit the bank statement of the relevant time period, when the fixed deposit was initiated and the source of the amount which was used for investment in the fixed deposit was not submitted. HELD THAT:- As specified authority has failed to consider the notice issued u/s 148A (b) of the Act, in its proper perspective vis-a-vis the information made available from the inside portal in relation to the reply filed by the petitioner, placing on record the details of the fixed deposits of the petitioners with the HSBC Bank for the year under consideration, which is reflected from the bank statements of the HSBC Bank placed on record. It is submitted that the clumsy attempt is made by the specified authority to justify granting sanction to reopen the case. On perusal of the contents of the affidavits, it is clear that when the sanction was granted, there was no application of mind on the part of the specified authority and mechanical sanction was granted without referring to the documents and thereafter when the specified authority was called upon to justify the action of the sanction further details are placed on record which cannot be considered at this stage, as we are examining the validity of the impugned action i.e. passing of the order under Section 148A (d) and issuance of the notice under Section 148 to assume the jurisdiction by the respondent Assessing Officer to come to the conclusion that it is a fit case to reopen the assessment or not. Therefore, on perusal of the show-cause notice and the impugned order under Section 148A (d) of the Act, it clearly shows that the assessee has shown the details of the amount as stated in the notice and the order being the investment made by the petitioners since 2013, and therefore there is no question of any escapement of income on face of the impugned notice and order, which would give a jurisdiction to the Assessing Officer to reopen the assessment for the year under consideration.There is no other information disclosed in the show-cause notice either under Section 148A (a) or 148B. AO has stated following false facts without taking into consideration the reply of the assessee, which ought to have been considered as provided under Section 148A (d) of the Act as such order is required to be passed after considering the reply filed by the assessee. Thus we are of the opinion that the impugned order under Section 148A (d) and notice under Section 148A (b) of the Act are passed without jurisdiction as the Assessing Officer has failed to take into consideration the above facts. The petition is accordingly allowed.

  ---

• 2024 (11) TMI 275
  Revision u/s 263 - CIT noted that the Auditors of Kiri Industries i.e. the assessee had certified that an interest amount had been paid by the assessee u/s 201(1A) and 206C(7) towards late payment of TDS - CIT observed that the AO did not disallow these expenses, which were categorized as penalties by the Auditors of the assessee company, thus AO s failure to disallow this amount led to the assessment order as being erroneous and prejudicial to the interests of the Revenue HELD THAT:- We observe that in the case of Resolve Salvage Fire India (P.) Ltd [ 2022 (4) TMI 906 - ITAT MUMBAI] has held that interest paid on delayed payment of TDS under section 201(1A) would be compensatory in nature and thus, was to be allowed as deduction. Therefore, in view of the above judicial precedent and other precedents cited by the Counsel for the assessee, we are of the considered view that the AO has taken a legally plausible view, duly supported by judicial precedents. In a decision rendered in the case of CIT Vs. Sunbeam Auto [ 2009 (9) TMI 633 - DELHI HIGH COURT] wherein, while considering the distinction between lack of inquiry and inadequate inquiry, the Hon ble court held that where the AO has made inquiry prior to the completion of assessment, the same cannot be set aside u/s 263 on the ground of inadequate inquiry. Accordingly, when the AO has taken a legally plausible view, duly supported by judicial precedents, then, in our considered view the Principal CIT is precluded from taking recourse to 263 proceedings only with a view to substitute another view with that of the view taken by the AO, unless the view taken by the Assessing Officer is wholly unsustainable - Assessee appeal allowed.

  ---

• 2024 (11) TMI 274
  Cancellation of registration granted to the assessee u/s 12AB r.w.s. 12A(1)(ac)(i) - change in the objects of the trust - V alidity of the earlier 12AB registration received as a religious trust - assessee trust has not undertaken any charitable activity as per changed objects of the trust as envisaged in the new trust deed - HELD THAT:- Unless and until any adverse material is brought on record which has not been done, the Ld. CIT(E) is not justified in withdrawing the registration granted to the trust u/s 12AB of the Act. Non-compliance of any other law/furnishing of incomplete or false or incorrect information has also not been noticed by the Ld. CIT(E). The issues raised by the Ld. CIT(E) in para 5 of his order are not at all relevant for the purpose of withdrawal of registration granted to the assessee trust u/s 12AB of the Act which is valid till AY 2026-27. Moreover, it is revealed from the records that the registration already granted to the assessee u/s. 12AB of the Act has been cancelled without following the due process of the principles of natural justice. We are therefore of the view that the cancellation of registration already granted to the assessee trust as a religious trust which subsists till AY 2026-27 is not justified at all. We, therefore vacate this part of the Ld. CIT(E) s order. Assessee s application in Form 10AB u/s 12A(1)(ac)(v) of the Act filed before the Ld. CIT(E) on 15.04.2023 - Copy of new trust deed dated 31.03.2023 was submitted by the assessee which formed part of its reply filed on 12.09.2023 and 10.10.2023 before the Ld. CIT(E). Application for modification to enlarge the objects of the trust was also submitted to the Charity Commissioner u/s 50(A)(1) of Maharashtra Public Trust Act, 1950. The Charity Commissioner has granted permission to the modification/change in the objects of the trust vide his order dated 19.04.2023. The contention of the assessee is that the assessee filed application before the Ld. CIT(E) for change in the object clause as per the new trust deed in compliance to the requisite condition of sub-clause (a) of clause 10 of Form 10AC within the prescribed time limit of 30 days. Therefore, the application for change in the object clause has been filed in time. It has also been asserted that the assessee trust till date has not effected any change in its objects, pending permission from the Income Tax Authorities. The proposed modified object, namely the educational activities have not yet been taken up. The argument of the Ld. CIT-DR is therefore not relevant. In our view, the aforesaid legal and factual matrix of the assessee s case has not been considered/appreciated by the Ld. CIT(E) in right perspective. We, therefore, direct the Ld. CIT(E) to consider the assessee s application u/s 12A(1)(ac)(v) in Form 10AB seeking approval for change in the objects/rules/regulations of the assessee trust as per the new trust deed and pass order afresh in accordance with law after allowing reasonable opportunity of hearing to the assessee trust. Appeal of the assessee is allowed for statistical purposes.

  ---

• 2024 (11) TMI 254
  Computing value of perquisites u/s 17(2) - assessee is a Trust constituted under Charitable Endowment Act, 1890 - value of residential accommodation provided by the Central Government or any State Government to the employees either holding office or post in connection with affairs of the Union or of such State or serving with any body or Undertaking under the control of such Government on such deputation . As per HC [ 2021 (7) TMI 1053 - KARNATAKA HIGH COURT] for the purposes of Rule 3, the requirement is that the accommodation should be provided by the Central Government or State Government to the employees either holding office or post in connection with affairs of Union or of State or serving with any body or undertaking under the control of such government from deputation. The aforesaid expression is unambiguous and unclear and therefore, its meaning cannot be expanded to include any body, undertaking under the control of Central Government. Merely because assessee is a body or undertaking owned or controlled by the Central Government, it cannot be elevated to the status of Central Government. Thus, the assessee cannot claim that valuation of perquisites in respect of residential accommodation should be computed as in case of an accommodation provided by the Central Government. Therefore, Sl.No.1 of Table 1 of Rule 3 of the Rules does not apply to the assessee. HELD THAT:- Having heard learned senior counsel for the petitioner(s) and learned counsel for the respondent(s) at length, we do not find any reason to interfere in the impugned judgment and orders(s). Special Leave Petitions are hence dismissed.

  ---

• 2024 (11) TMI 253
  Legality of the Settlement Commission s order - Accrual of interest income - interest accrued as due on Government securities and debentures held by petitioner - case of respondents that as the applicant was following mercantile system of accounting for interest paid on securities and deposits it could not follow the cash system of accounting for corresponding income - As decided by HC [ 2023 (7) TMI 135 - BOMBAY HIGH COURT] Income having accrued and corresponding expenditure having been reckoned on mercantile lasts, the interest income shall be taxed on accrual basis for both the years under consideration. Commission has not articulated as to why it did not agree with the submissions made by the assessee s representative. We direct that the matter be sent to the Interim Board for Settlement constituted for the settlement of pending applications as contemplated u/s 245 AA of the Act HELD THAT:- There is a delay of 364 days in the filing of the present special leave petition. Even on merits, we are not inclined to issue notice in the present special leave petition. The application for condonation of delay and the special leave petition are both dismissed.

  ---

• 2024 (11) TMI 252
  Validity of reassessment notices/ proceedings - scope of notices issued under Section 148 of the new regime between July and September 2022 - Application of TOLA to the Income Tax Act after 1 April 2021 - TOLA and notifications issued under it will also apply to reassessment notices issued after 1 April 2021 or not? - As decided by HC [ 2023 (3) TMI 1538 - GUJARAT HIGH COURT] all original notices under section 148 of the Act referable to the old regime and issued between 01.04.2021 to 30.06.2021 would stand beyond the prescribed permissible timeline of six years from the end of Assessment Year 2013-14 and Assessment Year 2014-15. Therefore, all such notices when they would relate to Assessment Year 2013-14 or Assessment Year 2014-15 would be time barred as per the provisions of the Act as applicable in the old regime prior to 01.04.2021. These notices cannot be issued as per the amended provision of the Act. HELD THAT:- The Special Leave Petitions are disposed of in terms of the judgment of this Court in Union of India vs Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB)] AO will dispose of the objections in terms of the law laid down by this Court in Rajeev Bansal (supra). Thereafter, the assessees who are aggrieved will be at liberty to pursue all the rights and remedies in accordance with law, save and except for the issues which have been concluded by the judgment of this Court in Rajeev Bansal (supra). Pending applications, if any, stand disposed of.

  ---

• 2024 (11) TMI 251
  Taxability of compensation - Land-losers relieved off from the levy of income tax on the compensation paid for the acquisition of their lands - relief has granted principally in terms of section 96 of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - Scope of Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 Act) for tax exemption. HELD THAT:- All the above being said, one cannot turn a Nelson s Eye to the apparent hostile discrimination of the persons losing land in acquisition process under the statutes other than 2013 Act, are put to: Firstly, the benefit of package availing under the new Act 2013 Act are pretty attractive compared to those contemplated under State legislations such as Karnataka Industrial Areas Development Act 1966, inter alia providing for acquisition. In the new Act, the amount of compensation payable to the land-losers is much higher. Added to the above, under Section 96 of the 2013 Act, the compensation is exempted from the levy of income tax. There are other rehabilitatory facilities too. It is quite obvious that there is a lot of heart-burn in the class of persons who have lost lands in acquisitions accomplished under the statutes other than 2013 Act. As already mentioned above, ordinarily, land-losers in acquisition process, whichever be the statute, do constitute one homogenous class, at least viewed from the angle of recompense. It is high time that the Central Government addresses this aspect of the matter before long and thereby assuages the grievance of land losing farmers, consistent with the policy content laudable intent enacted in Section 96 of the new Act. Much is not necessary to specify. These Appeals are allowed and the impugned orders of the learned Single Judge are set at naught; the subject Writ Petitions of land-losers are liable to be and accordingly dismissed.

  ---

• 2024 (11) TMI 250
  Fees paid as sales is in nature of fee for included services - as per AO there was make available of technical inputs by the assessee and so, the amounts received as sales commission is in nature of Fee for included services - incomes accrued, arisen, or deemed to have accrued or arisen in India to the non-resident assessee s or not? - HELD THAT:- The issue is covered by a decision of Toshoku Ltd. [ 1980 (8) TMI 2 - SUPREME COURT] as well as Evolv Clothing Co.(P). Ltd [ 2018 (6) TMI 1324 - MADRAS HIGH COURT] as held as Cl. (a) of the Explanation to Cl. (i) of sub-s. (1) of S. 9 of the Act which provides that in the case of a business of which all the operations are not carried out in India, the income of the business deemed under that clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India. If all such operations are carried out in India, the entire income accruing therefrom shall be deemed to have accrued in India. If, however, all the operations are not carried out in the taxable territories, the profits and gains of business deemed to accrue in India through and from business connection in India shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories. If no operations of business are carried out in the taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India. Decided in favour of assessee.

  ---

• 2024 (11) TMI 249
  Revision u/s 263 - income chargeable to tax commensurate to TDS - as per CIT AO did not raise any query related to this issue during the course of proceedings nor has the assessee given any justification for claim of TDS without declaring the corresponding interest income from securities - PCIT had sought to make an addition u/s 68 on account of a transaction which was not the subject matter of the reasons recorded for reopening the assessee s assessment for the relevant assessment year HELD THAT:- The powers of the Commissioner u/s 263 of the Act are in the nature of a review and an order under Section 263 of the Act could be passed only if the learned PCIT found that (i) the order passed by the AO is erroneous; and (ii) that it is prejudicial to the interest of the Revenue. Once it is accepted that the AO could not have made any addition to the assessee s any other income if it was satisfied with the assessee s explanation regarding the transaction of purchase of shares of FDPL; it would follow that the PCIT could not fault the AO for not making any such addition. Clearly, once the AO accepted the assessee s explanation regarding the investment made in the shares of FDPL and the amount borrowed from APPL for funding the said purchase, the AO could not proceed to make any addition on any other ground in the reassessment proceedings. Thus, non-addition of any income on account of alleged income from interest commensurate with the TDS deposited by Valtika Limited, or making further enquiries would not confer the learned PCIT with the jurisdiction to pass an order under Section 263 of the Act. Decided in favour of assessee.

  ---

• 2024 (11) TMI 248
  Short deduction of TDS by petitioners - TDS rate applicable was 20% as the vendor s PAN was deemed invalid due to the non-linkage with Aadhaar - Section 206AA overrides the said rate when the vendor s PAN is invalid or not linked to Aadhaar HELD THAT:- As seen from records that the vendor had linked his PAN with his Aadhaar on 02.08.2024 by paying a late fee of Rs. 1,000/- and he has also provided the challan receipt with the petitioners for the late payment made by him for delay in linking PAN with Aadhaar. Therefore, the question of vendor s PAN number being invalid does not arise. Since Section 206AA(1) stipulates that if any person who is entitled to receive any sum on which tax is deductible at source under the Act, fails to furnish his PAN number to the deductor, then the deductor shall deduct tax at source (TDS) at the rate of 20% and as per Section 206AA(6), if the PAN number provided by the deductor is invalid or does not belong to the deductee, it shall be deemed that the deductee has not furnished his PAN to the deductor and the provisions of sub-section (1) of Section 206AA will apply, the question of Section 206AA being applicable to the petitioners does not arise in as much as the petitioners remitted the sum of Rs. 56,000/- against their vendor s PAN number on 09.08.2024 and the petitioners filed the Form 26QB on 09.08.2024 mentioning their vendor s PAN number and that the Department s website has also accepted the same and did not give any indication that the PAN number of the petitioner s vendor was invalid. For the foregoing reasons, this Court is of the view that the impugned orders passed by the respondent are contrary to the facts and circumstances of the cases and violative of the principles of natural justice and the same are liable to be quashed.

  ---

• 2024 (11) TMI 247
  Unsecured loan received u/s 68 - ignorance to reply filed by the petitioner - HELD THAT:- As it is not in dispute between the parties that the petitioner filed the reply within the time granted by the respondent AO. It is true that the petitioner has sought further time to file the remaining information which was in process of being collected by the petitioner. AO ignoring the reply filed by the petitioner passed the impugned assessment order stating that the petitioner has not complied with the show cause notice. The respondent AO has also not considered the detailed reply filed by the petitioner. The impugned assessment order is quashed and set aside and the matter is remanded back to the AO to pass a fresh de novo order.

  ---

• 2024 (11) TMI 246
  Addition u/s 68 - sale proceeds of the share on account of accommodation entry - sale of shares off market through a shell company - HELD THAT:- The assessee had sold the part of the shares purchased on 08.02.2010 during the Financial Year 2011-12 and the balance share being 1439 were sold in the assessment year under consideration. It was also observed by the Tribunal that the respondent-assessee did not claim the long term capital loss in the computation of income and therefore, there is no loss of revenue. The bank statement submitted by the assessee during the course of assessment proceedings reflected that the transactions were carried out by the assessee on payment of STT. Tribunal taking into consideration the relevant documents such as debit note etc. filed by the assessee before the AO held that the transactions of the shares carried out by the assessee is genuine on the factual position and deleted the addition made by the Assessing Officer. Decided in favour of assessee.

  ---

• 2024 (11) TMI 245
  Validity of assessment order passed - no adequate opportunity of hearing by the respondent-Assessing Officer - denial of principle of natural justice - HELD THAT:- As in the impugned assessment order respondent-Assessing Officer has not even referred to the replies dated 23.03.2022 and 25.03.2022 filed by the petitioner nor he has referred to the show-cause notice dated 27.03.2022 issued by him along with draft assessment order. Thus, we are of the opinion that the impugned order dated 29.03.2022 of not providing opportunity of hearing results into breach of principle of natural justice. The impugned order is accordingly quashed and set aside. The matter is remanded back to the Assessing Officer to pass a fresh de novo order.

  ---

• 2024 (11) TMI 244
  Qualification as informant under the Income Tax Informants Reward Scheme, 2018 - Whether information provided by the petitioner could be said to fall within the meaning of undisclosed income and wealth ? - violation of the provisions of 269SS and 269T noted - HELD THAT:- Cash deposits as well as the aspect of repayment of deposits in purported violation of Sections 269SS and 269T appear to have been clearly taken note of by the AO in the course of the assessment proceedings itself. This leads us to the inevitable conclusion that the cash deposits and repayment thereof were aspects which were duly noticed and stood disclosed in the assessment proceedings. It would consequently be incorrect to hold that the information provided by the petitioner could be said to fall within the meaning of undisclosed income and wealth and which forms the basis for reward under the 2007 Guidelines. The claim of the petitioner for a reward also fails to satisfy the test of detection of substantial tax evasion and which constitutes a sine qua non for a reward being provided under the 2018 Scheme. Once it is found that the cash deposits, repayment of loans and other cash transactions stood duly reflected in the books of account, were examined in the assessment proceedings and were also scrutinized by the AO, it cannot possibly be said that the information which was proffered by the petitioner was one which was not otherwise available with the respondents. We consequently find ourselves unable to hold in favour of the writ petitioner bearing in mind the indubitable fact which emerges from the record and establishes that the information proffered was already in the knowledge of the respondents and that the material provided by the petitioner did not pertain to undisclosed income. The material furnished by the petitioner also cannot be viewed as having triggered the discovery of a scheme of substantial tax evasion. In fact, the findings as rendered by the Tribunal are clearly to the contrary and dispel the allegation of undisclosed income and tax evasion.

  ---

• 2024 (11) TMI 243
  Estimation of income - bogus purchases - CIT(A) partly allowed the appeal of the Assessee by restricting the addition to 16.5% of amount disallowed by the A.O. as an additional taxable income without giving any benefit of expenses towards the same - HELD THAT:- In the absence of any evidences or the argument in contravention of the findings and the conclusion of the Ld. CIT(A), we find no error or infirmity in the order of the Ld. CIT(A). Accordingly, finding no merit in the Grounds of appeal of the Assessee, we dismiss the Grounds of Appeal of the Assessee.

  ---

• 2024 (11) TMI 242
  Addition u/s 69C r.w.s. 115BBE - assessee failed to substantiate with evidence to his satisfaction regarding the difference between purchases shown in its Profit and Loss Account and the TCS reflected in Form 26AS - Low income disclosure from receipts (liquor) on which TCS has been deducted - HELD THAT:- A perusal of the sample bills shows that the invoices were raised in the names of the sister concerns of the assessee whereas the PAN of the assessee has been quoted instead of the PAN of the purchasers. The payments for such invoices are also reflected in some of the invoices which are the bank accounts of the sister concerns. These vital documents were completely ignored by the lower authorities although these were produced before them. We deem it proper to restore the issue to the file of the Assessing Officer with a direction to give an opportunity of being heard to the assessee to substantiate that the purchases are in fact made by the sister concerns of the assessee for which they have made the payments from their bank accounts and that such purchases are reflected in their Trading and Profit and Loss Accounts. AO if so considers fit, may, ask the assessee to furnish the required details, which according to assessee are voluminous, before the verification unit and call for a report from the verification unit. Assessing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to appear before the Assessing Officer on the appointed date and file the requisite details without seeking any adjournment under any pretext, failing which the Assessing Officer is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

  ---

• 2024 (11) TMI 241
  Disallowance u/s 43CA - difference between the stamp duty value and the agreement value in respect of Flat - as argued Provisions of Sec. 43CA cannot be made applicable to the present assessment year as no exchange had taken place during year - AO held that on the one hand, the assessee submitted that the flat was allotted to the party in the years 2009 and 2010, while on the contrary, the assessee submitted a copy of the allotment letter, in respect of the same flat, which dates to 05/05/2011, thus contradictions raise doubts on the genuineness of the assessee s claim - as per CIT(A) in this case, there was only one registered sale agreement that was executed during the year under consideration, therefore the value adopted by the stamp duty authority as on the date of the agreement is to be adopted as deemed sale consideration HELD THAT:- Agreement for sale executed on 30/04/2011 was the principal agreement honoured by the parties for the sale of Flat no.C-1103. Thus, even though the said agreement was ultimately registered in the year under consideration, in light of the provisions of section 43CA(3) we are of the considered view that the stamp duty value as on the date of the agreement for sale, i.e. 30/04/2011 be considered as the full value of consideration for computation of profits and gains of the assessee from the transfer of Flat. Further, the provisions of section 43CA(4) of the Act are also satisfied in the present case, as the earnest money of INR 2 lakhs was paid by the purchaser vide cheque No. 272834 dated 26/04/2011. Consequently, we set aside the impugned order and delete the addition made by considering the stamp duty value on the date of registration of the agreement. We direct the AO to compute the profits and gains from the transfer of the impugned flat in light of the provisions of section 43CA(3) of the Act by considering the stamp duty value as on the date of agreement for sale, i.e. 30/04/2011. We further direct that no order shall be passed without affording reasonable opportunity of being heard to the assessee. Accordingly, grounds raised by the assessee are allowed for statistical purposes.

  ---

• 2024 (11) TMI 240
  Treating the loss arising from Forward Foreign Exchange Contracts ( FCC ) as a short-term capital loss - assessee is registered in India as a Foreign Portfolio Investor and for safeguarding itself from foreign currency fluctuation risk, the assessee entered into FCC with HDFC Bank - HELD THAT:- We find that while considering a similar issue pertaining to the nature of income from settlement of forward cover taken in foreign exchange, the coordinate bench of the Tribunal in Citicorp Investment Bank (Singapore) Ltd [ 2012 (9) TMI 44 - ITAT MUMBAI ] held that profit earned by a Singaporean bank on termination of forward contracts entered into for safeguarding it from foreign exchange fluctuation in respect of debentures purchased in India would be a capital gain exempt under Indo-Singaporean DTAA. Also see D.B. International (Asia) Ltd. [ 2013 (7) TMI 1109 - ITAT MUMBAI ] held that the gain from forward foreign exchange contract has to be treated as capital gain. As a natural corollary the loss arising from such contract has to be treated as capital loss. Thus, we find no infirmity in the impugned order in considering the loss on rollover/cancellation of FCC to be short-term capital loss eligible for carry forward under the head capital gains . Accordingly, grounds raised by the Revenue dismissed.

  ---

• 2024 (11) TMI 239
  Powers of the Commissioner u/s 251 - CIT(A) power in enhancing the income - CIT(A) power to add a new source of income which has not been considered by the AO - CIT(A) disallowed the claim of assessee u/sec.80P and directed the AO to tax the net profit declared by assessee in the Profit and Loss Account - HELD THAT:- As observed that the impugned Profit and Loss account considered by the CIT(A) was not part of the record of Assessment Proceedings as it was never filed before the AO. Therefore, by considering the figure of Net Profit mentioned in the impugned Profit and Loss Account the Ld.CIT(A) has travelled beyond the jurisdiction granted by section 251 as the impugned profit and Loss account was never part of the Assessment Record. CIT(A) has erred in giving the directions to the Assessing Officer to assess the Net Profit . We derive support from the Hon ble Supreme Court s analysis of Section 31 of the Income Tax Act 1922 in the case of Rai Bahadur Hardutroy Motilal Chamaria [ 1967 (4) TMI 8 - SUPREME COURT] . The Section 31 of the Income Tax Act 1922 and the Section 251 of the Income Tax Act 1961 are exactly identical except the Explanation which is inserted in the Income Tax Act 1961. However, we have already interpreted the effect of the Explanation to section 251. Similarly, we find support from case of Vijay Builders [ 2015 (2) TMI 1122 - ITAT PUNE] wherein the ITAT has followed the Hon ble Supreme Court s decision in the case of CIT vs Shapoorji Pallonji Mistry [ 1962 (2) TMI 12 - SUPREME COURT] In the case under consideration the impugned source of income which was Net Profit shown in the impugned Profit and Loss Account was never before the Assessing Officer. Hence the Assessing Officer had not applied his mind on the Taxability/ non taxability of the impugned Net Profit , hence the Ld.CIT(A) had no jurisdiction to consider the said amount of Net Profit and enhance the income of the Assessee. CIT(A) has erred in directing the AO to tax the impugned Net Profit and erred in enhancing the income of the assessee. Accordingly, the AO is directed to delete the addition which was directed by Ld.CIT(A). In the result the ground number 1 raised by the Assessee is allowed.

  ---

• 2024 (11) TMI 238
  Reopening of assessment - assessee was not registered u/s. 12A/12AA of the Act, the assessee was not entitled to exemption u/s. 11 of the Act and due to large surplus, the assessee has not applied the same u/s. 11(2) of the Act which was an allowable accumulation - HELD THAT:- There can be no reassessment merely for the reason of non registration of a Trust or Institution. In the present case in hand, there is no iota of doubt that the reassessment was initiated for non registration and the other reasons specified are consequential to such non registration or rather to say for non fulfillment of the conditions due to the non registration. The ld. AR has extensively placed reliance on the decision of Karnataka State Welfare Fund [ 2022 (1) TMI 654 - KARNATAKA HIGH COURT ] which has upheld the order of the Tribunal, quashing the reassessment order for the reason that it is violative of the second and third proviso to section 12A(2) of the Act. The assessee s case would not fall under the 3rd proviso to section 12A of the Act where it is not the case of the Revenue that the registration of the assessee Trust was refused or granted and cancelled at any point in time, the assessee ought to get the benefit of the 2nd proviso to section 12A of the Act where reopening merely for non registration is not warranted as per the Act. The ld. AR has also relied on the first proviso to section 12A of the Act where the registration has been granted u/s. 12AA of the Act then the provision of section 11 and 12 of the Act shall apply to the assessment year preceding the assessment year for which the assessment proceedings are pending before the ld. A.O. as on the date of registration along with the cumulative condition that the objects and activities of the Trust remains the same for such preceding assessment year. Here in this case, the assessment proceeding commenced on issuance of the notice u/s. 148 of the Act dated 28.09.2018 and the date of registration was the next day, i.e., 29.09.2018, which implies that the assessment proceeding for earlier years were pending before the ld. A.O. as on the date of such registration, thereby concluding that the provisions of section 11 and 12 of the Act shall apply to income held by the assessee Trust of any assessment year, preceding the assessment year in which the registration was granted. The ld. AR has also placed reliance on the decision of Shree Shyam Mandir Committee [ 2017 (10) TMI 1450 - RAJASTHAN HIGH COURT ] which held that the proviso to section 12A(2) of the Act inserted from 01.10.2014 has retrospective effect. On a conjoint reading of the provisions, the CBDT Circular No.1/2015 and the decisions relied upon the assessee, we deem it fit to hold that the reassessment proceeding is bad in law as it is contrary to the proviso to section 12A(2) of the Act and, therefore, liable to be quashed. Ground no. 3 raised by the assessee is hereby allowed.

  ---

• 2024 (11) TMI 237
  Disallowance of provision for foreign exchange fluctuations and loss on forward contract - Applicability of Section 43(5) regarding speculative transactions - HELD THAT:- The Forward Contracts (Regulation) Act, 1952 ( FCRA ) defines goods as every kind of movable property other than actionable claims, money and securities. Since the provisions of section 43(5) of the Act apply only to transactions in commodity , it is respectfully submitted that the provisions of the said section are not at all applicable in the present case for the simple reason that foreign currency is not a trading commodity. We note that in order to be a speculative transaction , there should be a contract for purchase or sale of a commodity, including stocks and shares and such contract should be settled otherwise than by actual delivery or transfer of the commodity. In other words, the transaction must be settled on a net-net basis, whereby the difference between the price prevailing on the settlement date and the contracted price is paid/ received by the parties to the contract. In the instant case of the assessee the contracts are settled by actual delivery and not on a net-to-net basis and hence the same does not fall within the meaning of speculative transaction as mentioned in section 43(5) of the Act. As respectfully following the decision of Woodward Governor India (P.) Ltd [ 2009 (4) TMI 4 - SUPREME COURT] we do not find fault in the order of the CIT(A) in deleting the disallowance made by the AO in the reassessment order. Therefore, we are of the considered view that both the provision for foreign exchange fluctuations and loss on forward contract are allowable as expenditure in the impugned year and hence we uphold the order of the CIT(A) and dismiss the appeal of the revenue.

  ---

• 2024 (11) TMI 236
  Addition made u/s 69C - unexplained expenditure - reliability of the digital images found from the phone of partner of the assessee-firm - according to Ld A.R, they are dumb documents and hence no credence should have been given to them - HELD THAT:- We are of the view the documents, being loose papers, should be classified as dumb documents only and the AO could not have placed reliance on these documents in order to make the impugned additions in both the years under consideration. In the case of Common Cause vs. UOI [ 2017 (1) TMI 1164 - SUPREME COURT ] the entries in loose papers/sheets are irrelevant and inadmissible as evidence. It was further held that such loose papers are not books of account and the entries therein are not sufficient to charge a person with liability. In the case of CIT vs. Lavanya Land (P) Ltd [ 2017 (7) TMI 141 - BOMBAY HIGH COURT] it was held that where entire decision is based on huge amounts revealed from seized documents but not supported by actual cash passing hands, no addition can be made. In the instant case also, the AO has drawn presumptions that the image files and Excel sheets represent import of goods by the assessee. However, the said presumption is not supported by any other evidence to prove that the assessee has actually imported the goods mentioned in the above said files. We hold that the AO could not have made the impugned additions in both the years on the basis of image and Excel files, which were not supported by the corroborating materials. Documents found in the phone of the partner of the assessee-firm cannot be considered to be credible evidence which would support the addition made by the AO. Decided in favour of assessee.

  ---

• 2024 (11) TMI 235
  Assessment made u/s 153A - approval granted u/s 153D - HELD THAT:- From the assessment order under appeal for AY 2015-16 it can be noticed that the approval has been granted by the JCIT through common communication - all the approvals have been granted through a common approval for at least 7 cases in one go were provided by the Ld. JCIT through a common communication. The approval provided through communication has been found to be mechanical and without application of mind. We hold that the approval granted by the JCIT u/s 153D for the AY 2015-16 is bad in law and consequently the assessment made u/s 153A pursuant to the approval granted u/s 153D of the Act is also bad in law. Thus, the assessment framed by the AO u/s 153A/143(3) dated 30.12.2016 for the AY 2015-16 is hereby quashed. Addition made u/s 10(38) - We observe that the Ld.CIT(A) rejected the request on the ground that the denial of opportunity of cross examination of the witness does not amount to violation of principles of natural justice. The assessee is aggrieved from above stands taken by the CIT(A) as the orders relied upon in support thereof are not applicable to the case as the sole evidence against assessee is the statement of the Managing Director of the broker entity. It is a primary evidence used against the assessee and in view of the decision of Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT ] the assessment framed without providing opportunity to cross examine the witness whose statement the AO is relied on is bad in law. In the case of Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT ] the Hon ble Supreme Court held that failure to give the assessee the right to cross examine witnesses whose statements are relied upon results in breach of principles of natural justice and it is a serious flaw which renders the order in nullity. We further observe that the assessment for AY 2015-16 was also framed without providing cross examination of the broker whose statement was relied on and even the CIT(A) also did not provide for cross examination for AY 2015-16 and 2016-17 in spite of the assessee s request. We, therefore, observe that the ratio of the decision of the Hon ble Supreme Court in the case of Andaman Timber Industries (supra) squarely applies. Thus, we hold that the addition made by the AO based on the statement of the Managing Director of the Broker Company which was relied on without providing cross examination despite the request of the assessee is certainly in violation of principles of natural justice and consequently the addition based on such statement cannot be sustained. Therefore, the AO is directed to delete the addition made u/s 10(38) of the Act for the assessment years 2015-16 and 2016-17. Addition made on account of commission at 0.2% is also directed to be deleted. Disallowance of expenses incurred on account of business promotion expenses which have been disallowed by the AO for failure to produce bills and vouchers - We observe that the assessee has submitted the copy of ledger account of expenses and produce complete books of account. However, the AO without finding any defect in the books of account disallowed the expenses merely for non production of bills and vouchers. We observe that the Hon ble Delhi High Court in the case of PCIT Vs. R.G. Buildwell Engineers Ltd. [ 2017 (12) TMI 1614 - DELHI HIGH COURT ] which was approved by the Hon ble Apex Court [ 2018 (10) TMI 252 - SC ORDER ] held that no disallowances can be made without rejecting the books of account. Following the decision, we delete the disallowance made by the AO.

  ---

• 2024 (11) TMI 234
  Addition as income from house property - estimation of rent for the purpose of let-out - case of the AO that the assessee is receiving lower rent from one party when compared to rental income received from other two parties - as per assessee property is leased out for a continuous long period for the occupation of tenants and therefore no deemed rent can be invoked as per section 23(1)(a) - HELD THAT:- On similar facts, in assessee s own case [ 2020 (11) TMI 1124 - ITAT VISAKHAPATNAM] for the A.Y. 2015-16 this bench has dismissed the appeal of the revenue by relying on the decision of Oberoi Hotels Pvt., Ltd [ 2016 (1) TMI 169 - ITAT KOLKATA] The case relied on the Ld. DR could not be applied to the instant case as the co-owners themselves are the Directors of the lessee company and hence related. In the instant case, the lease has been done to the third non-related parties based on commercial consideration. The portion let out to M/s. A.S. Raja Trust which is a non-profit organisation is meagre and incidental to the hospital activities of M/s. Visakha Hospitals Diagnostics Limited. It was explained that M/s. A.S. Raja Trust operates a blood bank as a non-profit organisation which is incidental to the hospital run by M/s. Visakha Hospitals Diagnostics Limited which occupies major portion of the let-out area. As submitted by the Ld.DR the decision of the Tribunal for the earlier assessment year is pending before Hon ble High Court of Andhra Pradesh for adjudication. The order of the Tribunal, Visakhapatnam is neither stayed nor reversed by the Hon ble High Court, therefore, we place reliance on the decision of the Tribunal, Visakhapatnam Bench while allowing the ground raised by the assessee in the appeal. Appeal of the assessee is allowed.

  ---

• 2024 (11) TMI 233
  Surcharge levied where the total income is less than Rs. 50 lacs - CIT(A) has contended that since the assessee s tax liability would fall under the maximum marginal rate, surcharge would be applicable in the case of assessee as per section 2(29) - assessee s contention that as per the Finance Bill, 2022 surcharge could be applicable only when the assessee in case of Individual, Hindu Undivided Family or Association of Person or Body of individuals having a total income, exceeding Rs. 50 lacs of such income tax - HELD THAT:- Only when the total income exceeds Rs. 50 lacs then surcharge is leviable, where the rate of surcharge is fixed according to the slab of income. During the year under consideration, the income of the appellate was assessed by the ld. A.O./CPC at Rs. 6,73,590/- which is less than Rs. 50 lacs and, therefore, levying of surcharge would not be applicable for the same. We, therefore, direct the ld. A.O. to delete the surcharge levied in the hands of the assessee Trust. Ground no. 2 raised by the assessee is hereby allowed.

  ---

• 2024 (11) TMI 232
  CIT(A) dismissing the appeal of the assessee ex-parte - there was non compliance on the part of the assessee to the various notices issued by him - HELD THAT:- It is a fact that there was a non-compliance before the CIT(A). However, there was a reasonable sufficient cause for non-compliance. Also, as per Section 250(6) of the Act, CIT(A) has to state the points for determination and the reasons for his decision, meaning thereby CIT(A) has to discuss the merits of the addition. In this case, assessee has raised the issue that Specified Domestic Transactions u/sec.92BA were excluded by Finance Act, 2017. Admittedly, TPA are only with reference to Specified Domestic Transactions. This issue has not been discussed by the ld.CIT(A). As held in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra[ 2016 (5) TMI 290 - BOMBAY HIGH COURT] as noticed that the powers of the CIT(A) is coterminous with that of the AO i.e. he can do all that AO could do. Therefore just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. The order of the CIT(A)[NFAC] is set-aside to CIT(A) for denovo adjudication. The ld.CIT(A) shall provide opportunity of hearing to the assessee. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.

  ---

• 2024 (11) TMI 231
  Gross profit estimation on undisclosed turnover - enhancement of assessment by estimating higher amount of gross profit u/s 251(1)(a) - CIT(A) justification in enhancing the gross profit ratio from 8% as estimated by the AO to 25% - HELD THAT:- Since the facts lie in a narrow compass, with the able assistance of the learned Departmental Representative on our own, the issues are being delved into. We find that the AO estimated the gross profit @ 8% on unrecorded turnover and such profit rate was enhanced by the CIT(A) to 25% on his own without bringing on record any notice for enhancement as required under section 251(2) of the Act and thus such action is unsustainable and hence quashed to the extent of increase in the rate of gross profit. Accordingly, we uphold the order passed by the AO whereby he has estimated profit @ 8%. Since no other ground except than that of enhancement is taken before us, it is not required to comment on the reasonableness of estimation or any other addition perpetrated by the AO. Thus, all the grounds raised by the assessee are allowed.

  ---

• 2024 (11) TMI 230
  Validity of Reopening Proceedings u/s 147 - i nformation was received from investigation wing, Ahmedabad that the assessee has booked tax loss trade in share - HELD THAT:- Reopening in this particular case cannot be held as change of opinion and the reopening u/s. 147 is valid. The contention of the ld. A.R. that the objections filed by the assessee company suffers from factual and legal infirmities also cannot be tenable as the Assessing Officer has given the independent finding in respect of trading in shares particularly that of M/s. Radhe Developers Ltd. Therefore, the decision of NDTV [ 2020 (4) TMI 133 - SUPREME COURT] is not applicable in assessee s case as though the assessee has disclosed the trading, it has not specifically given the details such as bifurcation of the scrip trading in respect of M/s. Radhe Developers Ltd. at the earlier reopening stage. Thus, the reopening is valid. As regards relates to the contention that prosecution in question was duly recorded in books of account cannot the sole criteria for quashing the reopening as the reopening u/s. 147 is invoked in respect of investigation report as well as the independent finding/reasons given by the AO in respect of escapement of income as per AO s belief. The contention of the ld. A.R. is that he was not given cross-examination of the persons whose statement was recorded and relied upon is also does not stand as the Assessing Officer issued the notice u/s. 148 and initiated proceedings u/s. 147 and given independent findings which was not wholly and solely based on the statements. The decisions in case of NDTV [ 2020 (4) TMI 133 - SUPREME COURT] , Calcutta Discount [ 1960 (11) TMI 8 - SUPREME COURT ] as well as Parshuram Potteries [ 1976 (11) TMI 1 - SUPREME COURT ] and Bombay Stock Exchange [ 2014 (6) TMI 444 - BOMBAY HIGH COURT ] will not be relevant in assessee s case as the reopening u/s. 147 was on the issue of trading in scrip of M/s. Radhe Developers India Ltd. which is more specific centric and cannot be said that the reopening was just a second opinion or afterthought of the Assessing Officer. Thus, the Assessing Officer is justified in reopening the assessment. Decided against assessee. Disallowance of Loss in Trading of Shares - AO has not co-related with the trading as well as the price fluctuation of M/s. Radhe Developers Ltd. as any connection with the assessee s syncronised manner of trading and the link which establishes the assessee s involvement in the fluctuation of the price has not been categorically mentioned in the assessment order. The CIT(A) has also not given any independent finding after verifying that whether there is an actual syncronised trading between the assessee and that of company scrip i.e. M/s. Radhe Developers Ltd. which has a variation/fluctuation in its pricing at the time of purchase as well as at the time of sale. The details given by the assessee before us was also before the CIT(A) as well as before the Assessing Officer. From the perusal of these orders, it can be seen that the Assessing Officer as well as CIT(A) has not given any detailed finding as to whether the assessee has actively involved in the price manipulation during the assessment year 2011-12. The SEBI report as well as the suspension of the Bombay Stock Exchange is in the year 2015 giving the details of 2012. The involvement of assessee s transaction has not been specifically pointed out either in the assessment order or in the order of the CIT(A). Thus, on merit the disallowance made by the Assessing Officer does not sustain. Decided against revenue.

  ---

• 2024 (11) TMI 229
  Disallowance u/s. 40(a)(i) of the depreciation claim by the assessee on computer software - HELD THAT:- Disallowance of the depreciation claimed by the assessee u/s. 40(a)(i) for the reason that the assessee has failed to deduct tax at source on the capitalised software. These facts being identical to the facts pertaining to AY 2014-15 [ 2024 (6) TMI 876 - ITAT BANGALORE ] we are of the considered view that the ratio laid down in the above decision of the coordinate bench is applicable for the year under consideration also. Accordingly, respectfully following the said decision of the coordinate bench we hold that no disallowance u/s. 40(a)(i) can be made towards depreciation on computer software on the ground that no TDS was deducted on the payments made towards computer software. The grounds raised by the assessee in this regard are thus allowed. Addition made u/s. 28(iv) - AO noticed that the assessee has received assets free of cost from AEs located outside India to whom the assessee is providing software development services - HELD THAT:- From the plain reading of the section 28(iv) it is clear that if a benefit in the nature of income is arising from business the same shall be taxable under the head profits and gains from business or profession. Therefore the limited question before us is whether import of assets free of cost for testing purposes is a benefit in the nature of income arising from the business of software development to the assessee. In the present case assessee received certain equipments free of cost for the purpose of testing the compatibility of the software developed by the assessee in those equipments. It is an undisputed fact that these equipments are either returned or destroyed once the testing is completed (refer relevant observations of the CIT(A) in this regard). Accordingly there is no dispute that the impugned assets are not made available to the assessee permanently to give any benefit of enduring nature as the assets are either returned or destroyed. Further considering the nature of asset and the purpose for which it is imported, there is merit in the contention that these assets in isolation cannot be used for any purpose to derive any benefit since these are testing equipments or prototypes. Now coming to the issue of whether the import of assets free of cost is resulting in a benefit in the nature of income to the assessee, it is relevant to check if the impugned transaction would have otherwise resulted in a benefit in the nature of income to the assessee. The assessee is in the business of providing software development services to its AEs only. The arm s length pricing of the said services have already been tested by the TPO and the dispute on the pricing is resolved through MAP with the competent authorities of India and Korea wherein the cost of indirect benefits received by the assessee should have been embedded while arriving at the margin. Therefore it cannot be alleged that the price charged towards the software development services is reduced/adjusted by the assessee against the benefit of assets imported free of cost to justify addition under section 28(iv) and that the revenue has not brought anything on record to substantiate such a contention. Even assuming that there is nexus between the price charged towards rendering of services and import of assets free of cost the addition in our view could be done through a TP adjustment towards price charged for software development and in assessee s case the price is already agreed under MAP. Therefore there is no justification for making the addition under section 28(iv) again on the ground that had there been a cost paid towards import of these assets the same would have resulted in increased income to the assessee since the billing is done on cost plus basis. AO is not correct in making addition under section 28(iv) of the Act given that the assets imported free of cost for testing purposes are either returned or destroyed by the assessee and that the pricing towards software development services rendered are agreed under MAP. Decided against revenue.

  ---

• 2024 (11) TMI 228
  Reopening u/s 147/148 - notice after the expiry of 4 years - allegation regarding the failure on the part of assessee was noted by the AO qua the deposits in bank accounts of the assessee - HELD THAT:- As present case was earlier assessed u/s 143(3) and during the original proceedings, there was no allegation of non-compliance on the assessee. There were observations by the AO in the original assessment proceedings regarding turnover of the assessee certain disallowance on account of low GP rate and lump sum addition towards certain expenses have been carried out, therefore, it is evident that the books of accounts and relevant material was undergone the scrutiny by the AO. In such a situation, it cannot be said that the requisite information was not furnished by the assessee in the original assessment and there was any failure on this count on the part of assessee. Herein, we may take support from the order in the case of New Delhi Television Ltd. [ 2020 (4) TMI 133 - SUPREME COURT] wherein it is held that the assessee is obligated to dislodge the primary facts, it is neither required to disclose the secondary facts nor required to give any assistance to the AO by discloser of other facts, it is for the AO to decide what inference are to be drawn from the facts before him. We are of the considered opinion that in present case the revenue, though have alleged so in the reasons to believe, but unable to substantiate any failure on the part of assessee to disclose fully truly all material facts necessary for his assessment. We, thus, find force in the contentions raised by the Ld. AR through the first ground of the present appeal, that the reopening proceedings have been initiated against the assessee beyond a period of 4 years, wherein an assessment u/s 143(3) was already completed on 19.11.2016, therefore, the instant case is squarely falls withing the scope of the provisions of first proviso to section 147, but the action of Ld. AO was not in harmony with the said provision, accordingly, the jurisdiction assumed by the Ld. AO was not tenable in the eyes of law, therefore, the assessment order passed u/s 147 r.w.s. 144 r.w.s. 144B dated 26.03.2022 on the foundation of such invalid jurisdiction has not sanctity, thus, unsustainable and is liable to be annulled. Assessee appeal allowed.

  ---

• 2024 (11) TMI 227
  Addition made u/s 68 - share capital and share application money received from 13 share applicants - No evidences to prove the identity and creditworthiness of the share applicants and genuineness of the transactions - HELD THAT:- All documents speaks loud enough that identity and creditworthiness of alleged share applicants is established beyond doubt. Genuineness of the transactions is also proved because these companies have sufficient net worth to make the investment and they have applied in a NBFC company for better returns. Once, the assessee has discharged his primary onus, the burden of proof shifts on to Revenue authority and observations of AO that they are not satisfied with these details will not serve the purpose. At some part of the assessment order the AO has even observed that the assessee had filed submissions and some voluminous paper work which was of no use other than to increase the volume of the assessment report of the assessee company. We fail to find any justification in such observation of AO. Rather than mentioning the documents as voluminous paper work, he/ she should have move ahead to examine the correctness of those documents and should have discussed the same in the assessment order. General observation that the AO is not satisfied with the documents filed by the assessee cannot meet the requirement of law. We on perusal audited the balance sheet of the alleged share applicant companies notice that they have sufficient net worth in the form of share capital and accumulated reserve and surplus to explain the source of investment made in the assessee company. Even the provisions which entitles the revenue authorities to examine the case where a company not being a company in which public are substantially interested receive from any person in any consideration for issue of shares that exceeds the face value of such share, the aggregate consideration received for such shares as exceeds the fair market value of the share to be treated as income of other sources u/s 56(2)(VIIB) of the Act has been inserted by the Finance Act, 2012, with effect from 1st April, 2013 and is therefore not applicable for the year under consideration. We are thus of the considered view that the assessee has successfully explained the nature and source of the alleged share application money by way of proving the identity and creditworthiness of share applicants and genuineness of the transactions. We find that the assessee has successfully discharged the burden of proof primarily casted upon it to explain the identity and creditworthiness of all the alleged thirteens share applicants / shareholder and genuineness of the share transactions and correctness of such details has not been disputed by the Revenue Authorities except making general observations. Therefore, we are inclined to hold that no addition u/s 68 of the Act, is called for. Assessee appeal allowed.

  ---

• 2024 (11) TMI 226
  Rejection of application for registration u/s 12AB - Invocation of Section 13(1)(b) regarding the trust s objectives - HELD THAT:- In the case of Shah Gulabchandmulchand Shree Parshwanath Trust, Vapi [ 2024 (9) TMI 197 - ITAT SURAT] ITAT held that where CIT(E) denied registration under Section 12A to assessee-trust due to one objective benefiting only Jain community, invoking Section 13(1)(b), but overlooked broader charitable objectives since provisions of section 13 can be invoked only at time of assessment and not at time of grant of registration under section 12A, matter would be remanded back to CIT(E) for reconsideration As provisions of Section 13(1)(b) of the Act can be invoked at the time of assessment, on the basis of material that may be brought on record. However, grant of registration under Section 12A of the Act cannot be denied to the assessee by invoking the provisions of Section 13(1)(b) of the Act at the time of grant of registration. In the result, in view of the above observations, the matter is restored to the file of CIT (Exemptions), for de-novo consideration, after giving due opportunity of being heard and with the direction not to disentitle the assessee for grant of registration only on the grounds as mentioned in its order for rejecting the application filed by the assessee trust. Appeal filed by the assessee is allowed for statistical purposes.

  ---

• 2024 (11) TMI 225
  Delayed deposit of employees share of contribution towards ESIC and EPF - intimation issued u/s. 143(1)(a) - HELD THAT:- Hon ble Apex Court in the case of Checkmate Services Pvt. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] had observed that the employee s share of contributions towards ESI EPF deposited by the assessee beyond the due dates prescribed under the said respective Acts would by virtue of Section 36(1)(va) r.w.s. 2(24)(x) of the Act constitute income of the assessee. Whether or not the delayed deposit of employees share of contribution towards ESIC EPF could have been made by the AO prior to the judgment of Checkmate Services Pvt. Ltd. vide an intimation u/s. 143(1) - As decided in M/s. BPS Infrastructure [ 2024 (4) TMI 1006 - CHHATTISGARH HIGH COURT ] reasoning in the impugned judgment that the non-obstante clause would not in any manner dilute or override the employer s obligation to deposit the amounts retained by it or deducted by it from the employee s income, unless the condition that it is deposited on or before the due date, is correct and justified. The non- obstante clause has to be understood in the context of the entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees contributions- which are deducted from their income. They are not part of the assessee employer s income, nor are they heads of deduction per se in the form of statutory pay out. They are others income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. If such interpretation were to be adopted, the non-obstante clause under Section 43B or anything contained in that provision would not absolve the assessee from its liability to deposit the employee s contribution on or before the due date as a condition for deduction. Accordingly, in the backdrop of the judgment of the Hon ble Apex Court in the case of Checkmate Services Pvt. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] we are unable to concur with the Ld. AR that the A.O/CPC, Bengaluru had erred in rejecting the assessee s application filed u/s. 154 of the Act, wherein the latter had sought for setting aside the disallowance of his claim for deduction of delayed deposit of employees share of contributions towards ESIC EPF u/s. 36(1)(va) r.w.s. 2(24)(x) of the Act made by the AO/CPC, Bengaluru vide an intimation u/s. 143(1)(a) of the Act prior to the judgment of the Hon ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT (supra) - Ground of assessee dismissed.

  ---

• 2024 (11) TMI 224
  Denial of benefits of Section 11 - Appellant did not furnish Audit Report in Form 10-B within the prescribed time - extended due date of e-filing of Form No. 10B being audit report u/s 12A(1)(b) of the Act for the assessment year 2022-23 was 07.10.2022 and the assessee had e-filed Form No. 10B issued by the Chartered Accountant as on 07.11.2022, which is delayed by 31 days. HELD THAT:- We find that the AO CPC has made adjustment for the amount of expenditure claimed, amount accumulated and set apart for exemption u/s 11(2) of the Act for the sole reason that the AO did not file the audit report prescribed in Form No. 10B of the Act on or before the due date. The said due date in the case of the assessee under the provisions of section 12A(1)(b) of the Act was 07.10.2022 however, the assessee has e-filed the said Form No. 10B on 07.11.2022 and thus, there was a delay of 31 days in filing such form on the Income-tax Portal. Therefore, the issue is merely for the condonation of the delay of the 31 days. We find that the Ld. CIT(A) has referred to Circular No. 16/2022 dated 19.07.2022 issued by the CBDT, where in the CBDT invoking powers u/s 119(2)(b) of the Act delegated the power for condoning the delay to the Pr. Chief Commissioner/Chief Commissioner or Commissioner of Income-tax as the case may be. The assessee stated that application for condonation of delay in filing Form No. 10B for the year under consideration was filed before the Commissioner of Income-tax (Exemption), Mumbai on 16.03.2023 and said application is still pending for disposal till date. However, we find that under the CBDT circular No. 16/2022 dated 19.07.2022 the concerned Commissioner of Income-tax is preferably required to dispose off the application within the three month of receipt of this application. Before us, assessee expressed ignorance regarding disposal of the application of the assessee. We feel it appropriate to set aside the order of lower authorities and restore the matter back to the file of the Assessing Officer for deciding afresh.

  ---

• 2024 (11) TMI 223
  Rejecting the application u/s 12A for approval of the Appellant Trust - Charitable activity - Trust Deed copy submitted was not self- certified Rule 17A(2)(a) by the trustee, which is an inadvertent error, Details of date place of each activity were not furnished by the Trust and Details of donation received were not supported by complete postal address/ PAN of the donors HELD THAT:- We find that the assessee is a trust carried on charitable activities like arrangement of food for conducting pooja and relief to poverty. The activities are for the benefit of public at large - There is no reference of the information submitted on that date in the order of the ld CIT (E) , thus, it is true that the learned CIT(E) has issued the show cause notice on 01.02.2024 but there is no reference of the details submitted on 12.01.2024 and how same is dealt with by the learned CIT(E). The observation of the CIT(E) has raised seven points which was not stated to have been replied by the assessee and, therefore, it was held that the learned CIT(E) was not able to draw any satisfactory conclusion about the genuineness of the activities and compliance of requirement of any other law. Regarding the genuineness of the activities the assessee has provided the details of various expenditure of various activities for the year ended on 31.03.2022 wherein the total expenditure of Rs. 15,75,738/- were spent. The assessee has also spent sum of Rs. 12,74,626/- for the year ended on 31.03.2023 on the object of the trust. There is no comment by the learned CIT(E) on the activities of the assessee stated in these documents. We restore the matter back to the file of the learned CIT(E) to decide the issue afresh. Appeal of the assessee is allowed for statistical purposes.

  ---

• 2024 (11) TMI 222
  Ex- parte appellate order passed by CIT(A) based on the material on record mainly statement of fact (SOF) filed by the assessee - second round of litigation - whether the assessee firm stood dissolved or the business stood discontinued? - Disallowance of freight expenses u/s 40(a)(ia) - HELD THAT:- It could be seen that the assessee did not participated at all in the appellate proceedings conducted before ld. CIT(A), for the reasons cited in SOF. This is second round of litigation. Huge additions were made by the AO even in second round of litigation and huge demand of tax and interest was raised by Revenue against the assessee. The assessee filed its appeal before ld. CIT(A) challenging the additions as were made by the AO in second round of litigation, and it is for the assessee to have remained vigilant once the appeal was filed by it before ld. CIT(A). The assessee and/or its partners (or legal representative) acted negligent during the course of appellate proceedings before ld. CIT(A) in the second round of litigation and their act is deprecated. The assessee should not be allowed to take benefit of its own wrong as it acted in complete defiance of law on both the counts. Assessee has now filed paper book before the ITAT and has raised challenge to the additions both on merits as well on law. It is equally true that the ld. CIT(A) passed an ex-parte appellate order based on material on record including SOF. The assessee did not comply with any of the eight notices issued by ld. CIT(A). It is also equally true that the Act of the Court should not prejudice anybody. The mandate of the 1961 Act is to compute and collect correct taxes from correct assessee and for the correct assessment year. The assessee has now come forward to argue against the additions as were made by authorities below, and paper book containing as many as 225 pages are filed before ITAT. The assessee has also stated the reasons for its non compliances before ld. CIT(A), which have been cited by us in the preceding part of this order. The true, complete and correct facts are to be brought on record and the onus is on the assessee to bring the same on record. Even before us contradictory statements are made with respect to dissolution of the assessee firm vis- -vis discontinuance of the business of the assessee firm. Under these facts and circumstances, and in the interest of justice as well now the inquiries are to be conducted. Keeping in view Section 189(1), 189(3) 189(4) read with Section 176(3)(owing to failure on the part of the assessee to intimate Revenue in stipulated time about discontinued business), it is considered fit and appropriate that in accordance with principles of natural justice, one more opportunity is required to be given to the assessee and hence the appellate order passed by ld. CIT(A) dated 25.09.2023 is set aside and the matter can go back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law after giving opportunities to both the parties.

  ---

• 2024 (11) TMI 221
  Assessment order u/s 143(3) passed against assessee trust v/s individual beneficiary - determination of primary assessee whose income is liable to be brought to tax in the hands of the representative assessee - Unexplained money u/s. 69A - no source of the cash deposits in the bank account provided HELD THAT:- We are unable to subscribe to the explanation of the Ld. AR as regards the reason as to why the appeal was filed by Kajal Deepak Trust , despite the fact that the impugned assessment order u/s. 143(3) was passed in the case of the beneficiary, viz. Ms. Kajal Jadwani. Although we principally concur with the Ld. AR that the discretionary trust, viz. Kajal Deepal Trust is the primary assessee whose income is liable to be brought to tax in the hands of the representative assessee, i.e. the trustee or trustees u/s. 160(1)(iv) of the Act, but at the same time, may herein observe, that as per Section 166 of the Act there is no bar on the department to frame direct assessment of a person on whose behalf or for whose benefit income therein referred to is receivable. Accordingly, now when the A.O had proceeded with and framed the assessment u/s. 166 of the Act, i.e. in the hands of the individual beneficiary, then, in case if the said assessment order was not to be accepted, it was for the said assessee to have carried the same by way of an appeal before the CIT(Appeals). Accordingly, the Ld. AR s claim that as the trust viz, Kajal Deepak Trust is the primary assessee, therefore, no infirmity arises from the fact that the latter had filed the appeal before the CIT(Appeals) against the assessment order which was never passed in its case cannot be accepted. As the assessee, viz. Ms. Kajal Jadwani had for the aforesaid misconception failed to carry the impugned order of the A.O passed u/s. 143(3) by way of a proper appeal before the CIT(Appeals), therefore, she shall remain at a liberty to assail the impugned assessment order before the first appellate authority, who is directed to adopt a liberal approach regarding the reasons leading to the delay in preferring of the appeal before him. Appeal of the assessee trust is dismissed.

  ---

• 2024 (11) TMI 220
  Denial of application u/s 80G - provisional certificate u/s 10 AC has been issued on 25.10.2022 and application in Form 10AB has not been filed within statutory time limit - HELD THAT:- There is substance in the submission of AR that in the instant case provisional approval u/s 80G of the Act had been granted to the appellant from 25.10.2022 to AY 2025-26, so period for which provisional approval had been granted was to expire only on 31.03.2025 and not before and further that the second limb of the aforesaid clause was inapplicable in appellant case. We are of the considered opinion that rule of procedure are just to handmaid to administration of justice and not to penalise anybody and object of procedure only for interest of justice and the time limit prescribed in aforementioned provisions and clauses in question is quite directory in nature, not mandatory and such a provision / clause should be dealt which in above manner in order to fulfil the End s of justice. Consequently, the impugned order of the Ld. CIT(E) is hereby set aside and quashed on this point and matter be remitted back to file of the Ld. CIT(E) with the direction to decide expeditiously afresh.

  ---

• 2024 (11) TMI 219
  Levy of interest u/s 234C - failure on part of the payer to deduct TDS u/s 196D and 194LD - HELD THAT:- Tax due on returned income means the tax chargeable on the total income declared in the return of income furnished by the assessee for the assessment immediately following the financial year in which the advance tax is paid or payable, as reduced by the amount of any tax deductible or collectible at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income. As seen that the advance tax is reduced by any tax deductible or collectible which means that even the legislators have taken care of liability of the payer to deduct tax at source on payments and to that extent, assessee is not required to pay any advance tax. In the case on hand, since the payers faulted in deducting tax at source, the assessee discharged its liability by paying the full tax. Therefore, in our considered opinion, the assessee cannot be levied with interest u/s 234C of the Act for the fault of the payers. As decided in Ngc Network Asia LLC [ 2009 (1) TMI 174 - BOMBAY HIGH COURT] wherein the Hon ble High Court held that when a duty is cast on the payer to deduct and pay the tax at source, on payer s failure to do so, no interest under section 234B can be imposed on the payee assessee. We are of the considered view that it is not case of deferment in payment of advance tax on income as envisaged in Section 234C of the Act. Since the assessee has discharged the tax liability, no interest is leviable u/s 234C - Thus direct the AO to delete the impugned addition. Decided in favour of assessee.

  ---

• 2024 (11) TMI 218
  Income recognition method - Assessment of the income of the assessee applying percentage completion method OR project completion method - HELD THAT:- Transitional provisions which state that for the projects, which commenced on or before 31.03.2016 but not completed by the said date, the revenue shall be recognized based on the method regularly followed by the person prior to the previous year beginning from the 1st day of April 2016. It is unrebutted on the record that the assessee since its inception has been following project completion method. In view of the aforesaid transitional provisions, the action of the AO in applying the percentage completion method on the basis of ICDS III by part-reading the same, cannot be held to be justified. The impugned addition made by the AO for the year under consideration by applying percentage completion method of accounting is not justified and the same is accordingly set aside. Appeal of the assessee stands allowed.

  ---

• Benami Property

• 2024 (11) TMI 217
  Benami transaction - Plaintiff seeking a mandatory injunction in respect of property Restraining the defendants from creating any third-party interest qua the suit property - plaintiff further seeks a permanent injunction against the defendants restraining them from dispossessing the plaintiff from the suit property and interfering/or obstructing with the plaintiff s possession, occupation and enjoyment of the suit property - plaintiff is a permanent resident of Canada as well as naturalized Canadian citizen. HELD THAT:- In the facts of this case, it is apparent that late Sardar Nirmal Singh as an extended family member was permitted by late Sh. Raghbir Singh to occupy a portion of the suit property as a licensee. In ordinary course, owners permit extended family members to use and occupy immovable properties out of love and affection on the reasonable belief that the property will be vacated by the family member when called upon by the owner. To permit late Sardar Nirmal Singh or his family member to contend that the evidence of their possession in the suit property without payment of rent or licence fee would entitle them to raise a claim of ownership would be putting premium on a dishonest plea and would also be an abuse of the exception provided in proviso 2(ii) to Section 2 (9) (A) of the Benami Act. In the facts of this case, upon perusal of the averments made in the plaint and the documents annexed with the plaint, this Court is of the considered opinion that the plaintiff has failed to prove that late Sh. Raghbir Singh held the suit property in a fiduciary capacity qua Sardar Nirmal Singh. This Court finds that the suit lacks a cause of action. Furthermore, the plea of ownership raised is barred under Section 4 of the Benami Act. The judgment of the Supreme Court in Pankaja [ 2004 (8) TMI 716 - SUPREME COURT] relied upon by the plaintiff in support of their amendment application, is misplaced. The ratio which flows form the said judgement is that an amendment of pleadings must not be disallowed merely on the ground that the relief sought is barred by limitation which does not apply to the facts of the present case. Accordingly, the suit is rejected under Order VII Rule 11(a) and 11(d) of the CPC. The suit property comprises of a superstructure comprising ground floor, first floor, second floor and terrace on a plot admeasuring 250 sq. yds. The plaintiff asserts that he is in actual physical possession of the entire second floor along with terrace; and is in constructive possession of the remaining floors which are in the physical possession of the tenants. Issuance of mandatory injunction to the plaintiff to handover peaceful and vacant possession to the defendant no. 1 - Keeping in view, the judgments of the Supreme Court in Maria Margadia Sequeria Fernandes v. Erasmo Jack De Sequeria [ 2012 (3) TMI 594 - SUPREME COURT] judgment of Division Bench of this Court in Liberty Sales Services v. Jakki Mull Sons [ 1997 (2) TMI 601 - DELHI HIGH COURT] and Nathu Ram v. DDA [ 2022 (2) TMI 1479 - DELHI HIGH COURT] this Court hereby passes a decree of mandatory injunction directing the plaintiff herein to handover the vacant physical possession of the portion occupied by him in the suit property to the defendant no. 1 within four (4) weeks from today having come to this conclusion that he is in illegal and unauthorised possession of the suit property. The order for payment of mesne profits for the continued illegal possession w.e.f. 01.05.2022 is being passed. Accordingly, the reliefs sought by the plaintiff are dismissed in the aforesaid terms along with all pending application and a mandatory injunction is passed against the plaintiff and in favour of defendant no. 1. Award of actual costs in favour of the defendant - This Court is of the considered opinion that this suit filed by the plaintiff is an abuse of process. The Supreme Court in Ramrameshwari Devi Others v. Nirmala Devi [ 2011 (7) TMI 1305 - SUPREME COURT] has opined that uncalled for litigation gets encouragement because Courts do not impose realistic costs. Keeping in view the Section 35 (2) of CPC, Rules 1 (i) 2 of Chapter XXIII of Delhi High Court (Original Side) Rules, 2018 and the judgment of Ramrameshwari Devi (Supra), this Court deems it appropriate to impose actual costs on the plaintiff and payable to the defendants. For the purpose of determining the actual cost incurred by the defendants to be paid by the plaintiff herein, the Taxing Officer of this Court is directed to take appropriate steps in accordance with the provisions of Delhi High Court (Original Side) Rules, 2018 ( Original Side Rules, 2018 ). List before the Taxing Officer/concerned Joint Registrar on 03.12.2024.

  ---

• Customs

• 2024 (11) TMI 273
  Seizure Order of Gold Jewellery - Two Gold Chains and Six Gold Bangles, weighing 508.100 grams seized - seeking relase of goods seized - HELD THAT:- The provisional release of goods, documents and things seized, pending order of adjudication, may be released to the owner by the adjudicating authority, subject to taking a bond from him in proper form with such security and conditions. It thus appears that the provisional release of the goods and attachment thereof is a discretion vested with the adjudicating authority and, therefore, it is only appropriate that the authority, which is vested with the discretion under the statute, exercise the same. Power of judicial review under Article 226 of the Constitution of India though very wide, nevertheless, this Court would neither exercise the discretion vested with the statutory authority nor direct the manner in which the authority must exercise the discretion. The petitioner may file an application u/s 110A of the Customs Act,1962, if it is not actually filed by now. If it is already filed, the same shall be considered by the appropriate authority, taking into account the submissions that may be made and also the judgments that may be relied upon by the petitioner and, thereafter, the authority shall pass orders in accordance with law, after hearing the petitioner, within a period of two weeks.

  ---

• 2024 (11) TMI 272
  Benefit under the MEIS Scheme - products namely Para Cumidine and Diaminostilbene 2, 2-disulphonic acid (DASDA) with their revised ITC HS Codes of 2921 49 20 and 2921 59 40 respectively - Effect of revision of ITC HS Codes HELD THAT:- Two products namely Para Cumidine bearing Code No. 29214920(old CTI 29214990) and Diaminostilbene-2, 2-disulphonic acid bearing Code No. 29215940(old CTI 29215990) were part of the Appendix 3B Table 2 of the MEIS scheme and notification No. 38/2015-2020 was issued only with a view to synchronise with the Finance Act (No. 2) of 2019. Annexures to the Notification no. 38/2015-2020 at Annexure-D page 90 refers to both the items, i.e. ITC HS Code 29214920 and 29215940 as free items. Similarly in public notice no.12/2015-2020 dated 10.07.2020 was issued with a view to add MEIS entries in Appendix 3, Table 2 for exports made with effect from 01.01.2020 and Table B of the said notification provides for benefits for the entries which would not be applicable where rate is zero for exports made with effect from 01.01.2020 as those codes have ceased to exist with effect from 01.01.2020. On perusal of the Table B of the Notification No. 12/2015-2020 dated 10.07.2020 ITC HS Codes 29214920 and 29215940 are not notified. Therefore, it appears that Code Nos. 29214920 and 29215940 have continued to be part of Appendix-3B Table 2 of the scheme having old CTI 29214990 and 29215990 respectively. Reasons assigned for denial of the benefit are contrary to the Notification No. 38/2015-2020 dated 01.01.2020 read with public notice no. 12/2015-2020 dated 10.07.2020 which does not exclude HS Codes 29214920 and 29215940 as both the notifications are issued only with a view to syncronise the HS Codes with Finance Act (No. 2) of 2019. Appendix 3B Table 2 was introduced to MEIS Scheme from day one and on perusal of both the aforesaid notifications and public notice, there is no change in the said Table more particularly when items which were excluded are specifically stated in the notification and public notice. In that view of the matter, the contention raised on behalf of the respondent that after creation of specific ITC HS Code for these products, alignment of MEIS Schedule was done with Finance Act (No. 2) of 2019 is not tenable as there is no change in the MEIS schedule so far as these two items are concerned. Next objection raised by the respondent is with regard to MEIS Scheme stands discontinued with effect from 01.01.2021 and therefore, no benefit can be given to the petitioner and the decision of DGFT is final and binding on all matters relating to interpretation of policy and provisions in the handbook of procedure etc. , is also not tenable in view of the fact that at no point of time Codes No. 29214920 and 29215940 have been excluded from the schedule to MEIS Scheme which is in consonance with the office memorandum issued by CBIC which clearly states that new CTI 29214920 is carved out from old CTI 29214990 and new CTI 29215940 is carved out from old CTI 29215990 and in that view of the matter, the petitioner is entitled to benefit of MEIS on both the products till 31.12.2020.

  ---

• 2024 (11) TMI 271
  Classification of goods namely, G Type Tempered Glass Lid - Tariff Heading 7013 OR 7010 - HELD THAT:- Glass Lids are covered under the heading 7010 whereas the heading 7013 does not have a specific entry of Glass Lids. As observed that the description in heading 7010 namely stoppers, lids and other closures, of glass is provided independently and not conjunctively with the goods of the same entry like Carboys, bottles, flasks, jars, pots, phials, ampoules etc, therefore, the said description is independently disjunctive from other description of heading 7010 therefore, the contention of the Revenue is not correct that Stopper, lids and other closures, of glass are of the goods namely Carboys, bottles, flasks, jars, pots, phials, ampoules and other container, of glass, of a kind used for the conveyance, or packing of goods; preserving jars of glass; stoppers, lids and other closures, of glass of heading 7010 and accordingly the glass lids being a lid for tableware or kitchenware will not classify under 7010 but the same is classifiable under 7013. We do not find any substance in the said contention of the Revenue for the reason that in heading 7010, stoppers, lids and other closures of Glass is provided after ; that means this description is independent to the other description such as Carboys, bottles, flasks, jars, pots, phials, ampoules and other container, of glass, of a kind used for the conveyance, or packing of goods; preserving jars of glass; therefore it cannot be contended that the stopper, lids and other closures of glass mentioned in 7010 are of the packaging material mentioned in 7010. On the other hand, heading 7013 does not have any specific entry in respect of Glass Lids, therefore, irrespective of the use of lids if the same is made of glass, the lid is correctly classified under 7010. Undisputedly the lids made of glass is specifically provided in heading No. 7010 and the same is not provided in 7013.

  ---

• 2024 (11) TMI 270
  Monetary limits for filing appeals before CESTAT - Re-assessment of customs duty - Commissioner of Customs (Appeals) set aside the re-assessment of goods at enhanced value and restored the self-assessment at the declared value and consequently, allowed the appeal filed by the importer/assessee/respondent - HELD THAT:- We find that the present cases are squarely covered under the CBIC s instructions dated 02.11.2023. We also find that none of these cases is falling under the exceptions provided in para 2 of the instructions dated 02.11.2023. While dismissing the earlier bunch of Revenue s appeals on the identical issue, this Bench has considered various decisions of the High Courts and the Supreme Court, wherein department s appeals were dismissed under litigation policy keeping the question of law, if any, open. See VSM IMPEX PVT. LTD. [ 2024 (5) TMI 1404 - CESTAT CHANDIGARH] We are of the considered opinion that the present appeals filed by the department are not maintainable in view of the instructions dated 02.11.2023 issued by the CBIC wherein it has been specifically prescribed that no appeal shall be filed before the CESTAT below the monetary limit of Rs.50 lakhs and if already filed, will have to be withdrawn and consequently, we dismiss all these appeals under litigation policy without going into the merit of each case.

  ---

• 2024 (11) TMI 269
  Customs Broker [CB] licence suspension - Lot of Red Sanders (Pterocarpus santalinus) in various shapes and sizes were attempted to be exported mis-declaring them as decorative iron materials - Red sanders is an endangered species - gravity of the offence - HELD THAT:- Regulation 10(a) requires the Customs Broker to obtain the authorization from each of the companies, firms or individuals which employed him as a CB and to produce such authorization if required by the Deputy Commissioner or Assistant Commissioner of Customs. The undisputed facts of this case are that the appellant never even contacted M/s Deepnidhi in whose name he filed the shipping bill, let alone, obtain an authorization. Regulation 10(d) requires the Customs Broker to advise his client to comply with the provisions of the Act, other allied acts, Rules and Regulations and in case non-compliance bring such matter to the notice of the Deputy Commissioner or the Assistant Commissioner of Customs. In this case the appellant had not even contacted the exporter in whose name he filed the shipping bill. The shipping bill was filed behind the back of the alleged exporter. Regulation 10(n) requires the CB to verify the correctness of the IEC, GSTN, identity of his client and function of the client at the declared address by using reliable, independent, authentic documents, data or information. In this case the appellant had not only not verified the identity of M/s Deepnidhi in whose name it filed the shipping bill but had filed the shipping bill behind its back to facilitate smuggling of red sanders by Mr. Mohti Taneja. We find that the appellant had clearly violated regulations 10(a), 10(d), 10(e), 10(n). These violations are not an innocent error or a careless mistake but a deliberate scheme in which the appellant sub-let his license to Shri Devender Kumar. Shri Devender Kumar, in turn, colluded with Shri Mohit Tanjea and filed shipping bill in the name of M/s Deepnidhi without their knowledge and used that shipping bill and attempted to smuggle out red sanders. If any consideration is given to such a CB, it will be a mockery of the entire system of controls by Customs. Any prohibited goods including drugs, arms, annuation etc., can be smuggled in and smuggled out very easily if the Customs Broker starts filing benami shipping bills without even the knowledge of the importer or exporter. It will be far worse, as in this case, if the CB lets out its credentials to another for a monthly fee and that person, in turn, files benami shipping bills or Bills of Entry to smuggle prohibited goods. In view of above, we find that the impugned order needs to be sustained.

  ---

• 2024 (11) TMI 268
  SCN is time-barred - Show Cause Notice (SCN) issued after more than ten years - well beyond even the extended period of limitation of five years provided for u/s 28 - Whether the proposals in the SCN fall within the scope of section 124? - HELD THAT:- Section 28 provides for issue of SCN for recovery of duties not levied, not paid, short levied, short paid or erroneously refunded and it prescribes a normal period of limitation of one year and an extended period of limitation of five years if the not levy, short levy, etc. was on account of collusion, any wilful mis-statement or suppression of facts by the importer or his agent. There is no provision to recover duties beyond five years in any case. Proposals in the SCN fall within the scope of section 124 or not? - The impugned order upholding the order in original passed by the Joint Commissioner is issued in pursuance of the SCN issued under section 124 under which notice can be issued only for confiscation of goods and imposition of penalty; The only proposal in the SCN falling within the scope of section 124 is the imposition of penalty under section 114; this cannot be sustained because there is no proposal to confiscate export goods or holding the export goods liable to confiscation under section 113 which is a necessary pre-requisite for imposing penalty under section 114. The remaining proposals in the SCN fall beyond the scope of any SCN issued under section 124.

  ---

• 2024 (11) TMI 267
  Maintainability of 4 appeals against a total of 399 Bills of Entry - Interpretation of Rule 6(A) of the CESTAT Procedure Rules - HELD THAT:- In a case where there are numbers of Bills of Entry and for all Bills of Entry, if one common order-in-original is passed, then only one appeal is sufficient; however as per the Explanation of the Rule 6(A) ibid, it is clear that when more than one order-in-original are passed, then appellant or assessee is required to file numbers of appeals as many as numbers of order-in-original. But in the present cases, the Commissioner (Appeals) passed 4 orders-in-appeal disposed of the appeals covering a total of 399 Bills of Entry; therefore, as per Rule 6(A) ibid the Appellant-Revenue is required to file 399 appeals challenging each Bill of Entry which is an assessment order in itself. Ahmedabad Bench in the case of CMR Nikkie India Pvt Ltd [ 2021 (6) TMI 270 - CESTAT AHMEDABAD] has also interpreted Rule 6(A) and has held that the number of appeals which the department is required to file, will be equivalent to the number of Bills of Entry filed by the importer/assessee. Also in M/s Narbada Industries [ 2022 (5) TMI 1361 - JAMMU KASHMIR HIGH COURT] while interpreting the National Litigation Policy and specifically the phrase monetary limits below which appeal shall not be filed , in its aforementioned pronouncement lucidly elucidated that the said phrase pertains to the monetary threshold of a singular appeal, rather than the aggregate amount of multiple appeals. This interpretation is founded on the fundamental principle that each appeal represents a distinct cause of action, necessitating separate consideration in determining the applicability of monetary thresholds. Thus, we are of the considered opinion that these 4 appeals filed by the Revenue are not maintainable. Revenue is directed to file 399 appeals instead of 4 appeals, if they are so advised.

  ---

• 2024 (11) TMI 216
  Mega Power Policy and the effect of the Press Release of 01.10.2009 -competitive bidding was initiated by the respondent, what was in vogue was the Mega Power Policy, 2006. Petitioners praying before this Hon ble Commission to declare that the Union Cabinet s decision dated 01.10.2009 modifying the Mega Policy 2006 reported vide Press Information Bureau on the same date does not amount to Change in Law under Article 13 of the PPA Whether the press release of 01.10.2009 announcing the decision of the Union Cabinet about approval of certain modifications envisaged in the then existing mega power policy, is covered within the meaning of the expression law as defined in Clause 1.1 of the RFP/PPA and if so did the extant legal regime as on 01.10.2009 undergo a change from the said date ? - HELD THAT:- The golden rule of interpretation is that the words of a contract should be construed in their grammatical and ordinary sense, except to the extent that some modification is necessary in order to avoid absurdity, inconsistency or repugnancy. (See para 5.01 Kim Lewison, The interpretation of Contracts, 3rd Edition). Similarly, any invocation of the business efficacy test as canvassed would arise only if the terms of the contract are not explicit and clear. The business efficacy test cannot contradict any express term of the contract and is invoked only if by a plain and literal interpretation of the term in the agreement or the contract, it is not possible to achieve the result or the consequence intended by the parties acting as prudent businessmen. The press release did not alter/amend/repeal the existing law as on 01.10.2009. It was at best the announcement of a proposal approved by the Cabinet which had to be given shape after fulfilment of the conditions mentioned therein. Some of the conditions were that the power purchasing States were to undertake to carry out distribution reforms as laid down by the Ministry of Power and admittedly in that regard there was a meeting held on 28.10.2009; an undertaking was sought from the States in the prescribed formats and the four distribution reform measures required to be undertaken were part of the undertaking. The press release summarizing the Cabinet decision and beset with several conditions created no vested rights on any party to the power purchase agreement vis-a-vis the other party on 01.10.2009. In fact, the press release itself contemplated certain contingencies. A right vests when all the facts have occurred which must by law occur in order for the person in question to have the right (see Salmond on Jurisprudence, Twelfth Edition P.J. Fitzgeral page 245). It is only when the right vests will there be a corelative duty on the other as far as nature of the right involved in the present case is concerned. Accepting the argument would also create tremendous uncertainties in the law. In the absence of any repeal of 01.03.2002 notification and the 07.08.2006 Mega Power Policy, between 01.10.2009 and 11.12.2009/14.12.2009 there will be two legal regime operating. Lord Bingham of Cornhill in his locus classicus The Rule of Law rightly identifies as one of the facets of rule of law, the following the law must be accessible and so far as possible intelligible, clear and predictable. One of the arguments advanced by the learned senior counsel for the appellants is based on the doctrine of promissory estoppel. The argument need not detain us since the respondent PSPCL which is the party to power purchase agreement is not the promisor, even if we assume the press release of 01.10.2009 as holding out the promise. The Union of India has not been arrayed in any duly constituted litigation to enforce the promise. The argument also belies the primary contention of the appellant since even according to their understanding, it was at best a promise by the Union of India and not any alteration of the law proprio vigore (by its own force). In any case, no steps have been taken to enforce the so-called promise and there is no order of any court of law enforcing the promise as on 02.10.2009. The appellant contends that since the promise was duly complied with, there was no need to enforce the promise. This is also an argument which cuts at the root of appellants main submission. The notifications constituting change in law happened on 11.12.2009 and 14.12.2009 and hence there is no basis in the contention that on 01.10.2009 the old legal regime had given way. There is only one voice of the government which has given the customs duty exemption for goods imported for use in thermal power plants, (without the requirement of the plant being an interstate power plant) with effect from 11.12.2009. The policy document also came on 14.12.2009. The press release of 01.10.2009 could not have been the basis for the appellant to have assumed that the notification of 01.03.2002 would stand amended and they would have the benefit from 01.10.2009 itself. Though several judgments were cited, including Bachhittar Singh vs. The State of Punjab [ 1962 (3) TMI 84 - SUPREME COURT ] to contend that the press release of 01.10.2009 was not an order , we do not propose to examine them as we are otherwise convinced for the reason set out above that the 01.10.2009 Press Release is not law under Clause 1.1. Equally, for that reason, we have not discussed the cases on Article 77 of the Constitution of India, dealing with authentication of orders. State Commission while rejecting the contention of the appellant has rightly recorded that Commission holds that since the Mega Power Status was granted to the Project under the Mega Power Policy by the Ministry of Power on 30.07.2010 on the application dated 11.05.2010 filed by the respondent no.1, having become eligible on 16.04.2010, the benefits, if any, accruing thereunder to the Project would be applicable only from 30.07.2010 and not from any prior date, notwithstanding that the decision for granting the Mega Power Status was taken/announced on 01.10.2009 or the notifications in respect of the said decision of the Union Cabinet were issued by the concerned Ministries of the Government of India on 11.12.2009 and 14.12.2009.

  ---

• 2024 (11) TMI 215
  Valuation for rough diamonds - discrepancy between the declared value and the reassessed value by the customs authorities - Additional detriment of absolute confiscation - exacerbating the option to redemption of confiscated goods along with others fastened on to them in proceedings arising from alleged overinvoicing of three lots of rough diamonds from among the seven lots imported against bill of entry - confiscation of goods that could be re-exported only by redemption on payment of Rs. 10,00,000 along with penalty of Rs. 20,00,000 under section 112 of Customs Act, 1962 -. According to Learned Counsel for appellant, they had not been put on notice of intent to convert conditional confiscation into absolute along with change of the cause for confiscation under section 111 of Customs Act, 1962. HELD THAT:- The first appellate authority enhanced the gravitas of confiscation but that is, by no stretch, in violation of principles of natural justice nor in breach of procedure set out in section 128A of Customs Act, 1962. The stipulation therein is contingent upon absence of prior notice and operates with the presumption that appeal of jurisdictional authorities would be triggered by dropping of proceedings which leaves such enjoinment to be complied with only in the event of such intent on the part of first appellate authority in appeal of assessee; indeed, with foregoing of right to be issued with notice before adjudication by the original authority, it is moot if the first appellate was even required to entertain this particular plea. The proposal of the appellant-Commissioner for reversal of the redemption of impugned goods cannot be said to be anything but notice of potential outcome for undoing the unalloyed contents of the order appealed against. We are unable to fathom the cause for such appropriation or even a proposal for securing that end. The Customs Act, 1962 does not prescribe destruction of confiscated goods which is an executive decision and confiscation does not, of itself, assure destruction. There is, thus, every possibility of conflict diamonds ending up in the domestic market which is, doubtlessly, not contrary to law but that they these were transported across the border and hence carrying the taint of conflict diamonds in which the Central Government would be forced as an accessory by committee constituted under section 129D of Customs Act, 1962 does not appear to have weighed with the reviewing authority. It would have been most appropriate for the goods to be repatriated to country of despatch and to be dealt with in the manner appropriate to the laws of that country than that national commitment to ban on international trade in conflict diamonds be called into question by consequence of absolute confiscation. In any case, the lack of match in the certificate is not a ground for absolute confiscation of the impugned goods. It would have been appropriate for checks to be carried out with the authority concerned instead of adopting such precipitate action. The absolute confiscation is, therefore, set aside. The original authority had confiscated the goods under section 111(m) of Customs Act, 1962 which comes into play for misdeclaration of particulars in the bill of entry. Valuation of imported goods, in accordance with section 14 of Customs Act, 1962 and with rule 3(4) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, is, doubtlessly, an approximation of its worth but is sanctified when determined in compliance of the statutory procedure; it is only upon the appropriateness of the method adopted or preceding procedure that re-determination may be challenged. The importer had foregone the opportunity to be placed on notice before substitution of the value and, hence cannot cry foul upon finding rendered. At best, only the computation becomes challengeable. There is nothing on record to indicate such challenge. In order that the consequence of misdeclared value is fairly, and only if due, visited on imports and importer as well as others, we set aside the impugned order for re-determination of value only to the extent permitted by rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The goods are not liable to be confiscated absolutely and even such confiscation, as is intended to be undertaken and subject to redemption on payment of fine, should limit itself to that portion of the goods that were misdeclared with the rest of the goods eligible for clearance for home consumption. The appeals are allowed by way of remand

  ---

• Corporate Laws

• 2024 (11) TMI 266
  Requirement of digital signatures for processing Form CHG-1 for charge registration - Section 78 of the Companies Act, 2013 - HELD THAT:- This Court is of the view that Section 78 of the Act is resorted to only after a company has failed to register a charge as mandated under Section 77 of the Act thereby indicating a lapse or refusal on the part of the company to fulfil its statutory obligations. In such cases, expecting a person in whose favour the charge is created to obtain digital signatures from the company itself contradicts the very scenario Section 78 is designed to address. This stance is further supported by the instructions for form CHG-1, which do not explicitly accommodate situations where the company s cooperation can be presumed absent. Therefore, insisting on digital signatures in the form from a company who is refusing to register the charge in such circumstances would unduly hinder the rights of charge holders to secure their interests when a company defaults on their statutory duty under Section 77 of the Act. This Court is in agreement with the view of the learned Single Judge that the requirement for digital signatures from the company, while filing form CHG-1 under Section 78 of the Act, should not be insisted upon. This Court finds no ground to interfere with the impugned order. Accordingly, the present appeal along with the applications is dismissed.

  ---

• Insolvency & Bankruptcy

• 2024 (11) TMI 214
  Approval of the Resolution Plan - grievance put forth by the Appellant is with regard to the Appellant not being informed about the auction proceedings which were initiated at behest of the RP, thus, depriving it of its participation in the said proceedings - HELD THAT:- It has come on record and stands admitted that the Resolution Plan had already been implemented and the dues as found payable under the Resolution Plan have been disbursed to the concerned parties. As regards the Appellant is concerned, the amount was disbursed vide Demand Draft dated 22.10.2020 which has been received and accepted by the Appellant. Leading to the dismissal of the appeal vide impugned Judgment dated 14.02.2022. Having perused the record while bearing in mind the extensive observations made by 3-Judge Bench of this Court in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS [ 2019 (11) TMI 731 - SUPREME COURT ], and its reiteration by numerous subsequent decisions of this Court such as the EBIX SINGAPORE PRIVATE LIMITED VERSUS COMMITTEE OF CREDITORS OF EDUCOMP SOLUTIONS LIMITED ANR., KUNDAN CARE PRODUCTS LIMITED VERSUS MR AMIT GUPTA AND ORS. AND SEROCO LIGHTING INDUSTRIES PRIVATE LIMITED VERSUS RAVI KAPOOR RP FOR ARYA FILAMENTS PRIVATE LIMTIED ORS. [ 2021 (9) TMI 672 - SUPREME COURT ] , the present is not in a position to accept the claim of the Appellant as sought to be made and put forth in these appeals. The Orders dated 05.10.2020 and 27.11.2020, as have been passed by the NCLT and approved by the NCLAT vide its impugned Judgment dated 14.02.2022, do not call for any interference in the present Appeals. The appeals being devoid of merit, stand dismissed.

  ---

• 2024 (11) TMI 213
  Seeking to place a settlement proposal under Section 12A of IBC before the Committee of Creditors - permission for withdrawal and suspension of the Corporate Insolvency Resolution Process - denial to Appellant yet another opportunity to submit a Section 12A proposal when the resolution plan of the SRA is at the stage of consideration by the Adjudicating Authority - Appellant failed to show bonafide in their previous settlement/withdrawal proposals - Appellant contends that Section 12A of IBC read with CIRP Regulation 30A provides scope for submission of multiple settlement proposals particularly when the resolution plan of the SRA has not attained finality - whether the Adjudicating Authority could have precluded the consideration of the 12A proposal of the Appellant by the CoC on the ground that the resolution plan was under consideration of the Adjudicating Authority? HELD THAT:- 80.22% of the CoC members had already voted against the settlement proposal dated 08.02.2020 of the Appellant. The 8th CoC meeting had also concluded that the 12A proposal is not feasible or commercially viable. The settlement proposal, therefore, stood clearly rejected by the CoC pursuant to deliberations in the 8th and 9th CoC meetings. It is equally significant to note that around the same time when the settlement proposal dated 08.02.2020 of the Appellant had been rejected, Respondent No. 3 had submitted their resolution plan dated 24.01.2020 with the RP. The resolution plan along with the Addendum as submitted by the Respondent No. 3 was approved by the CoC in the 8th CoC meeting held on 06.02.2020 with 80.84% voting share. The result of the voting was circulated to the CoC on 14.02.2020 and the 9th CoC meeting had noted the approval of the resolution plan of the SRA with CoC having voted with 80.84% in favour of the plan. It is the case of the Respondents that once the resolution plan has been accepted by the CoC, it becomes binding and irrevocable as between the CoC and the SRA. This Tribunal took special notice of proviso to Regulation 30A of the CIRP Regulations and the intendment of this proviso after noticing that Regulation 30A has been substituted by Notification dated 25.07.2019 to give effect to the provisions of Section 12A. In the present facts of the case, it is noticed that the CoC in its deliberations in the 8th and 9th CoC meetings had already put their stamp of approval on the resolution plan. Such opinion expressed by the CoC after due deliberations in the meetings through voting represents collective business decision and constitutes an expression of the CoC s commercial wisdom. And it is here that primacy of the commercial wisdom of the CoC comes into play. Thus, the suspended management cannot insist, impose or force the consideration of its settlement proposal by the CoC when the CoC in the exercise of its business decision has categorically decided against considering any such proposal from the Appellant. The decision of CoC is a business decision taken in the exercise of their commercial wisdom which is clearly not amenable to judicial review and hence the Adjudicating Authority committed no error in not issuing any directions to the CoC to consider the settlement proposal. Time is a crucial facet of IBC proceedings and such proceedings cannot be subjected to indefinite delay as that would defeat the object of the statute. In the present facts of the case, it is found that it has been more than 5 years since the Corporate Debtor was admitted into CIRP and nearly 4 years since the resolution plan of the SRA was approved by the CoC in 2020. Therefore, when a resolution plan has already been received by the CoC and the CoC in the exercise of its commercial wisdom has decided to only consider this plan and has also rejected with majority voting the settlement plan given by the Appellant, no error has been committed by the Adjudicating Authority in disallowing further opportunity to the Appellant to submit a Section 12A proposal. The impugned order does not warrant any interference - The Appeal is dismissed.

  ---

• 2024 (11) TMI 212
  Maintainability of application - time limitation - application contested on the ground that it is barred by the limitation as prescribed under Article 137 of the Limitation Act, 1963 - HELD THAT:- The Tribunal has committed a patent error in examining the issue of limitation in respect of the petition filed under Section 7 by the Appellant. There is no dispute that all the accounts of the Respondent were declared NPA on 31.03.2015 and the application was filed by the Appellant for the resolution of an amount of Rs. 158.83. It is also not in dispute, as it has emerged from the record, that a sum of Rs. 2.65 Cr. was paid by the CD in the month of December, 2016 in the loan account which means that the Respondent had acknowledged its liability in the month of December, 2016, in terms of Section 18 and 19 of the Act, hence, the limitation would start again from the date of acknowledgement i.e. December, 2016 and will continue for three years up to December, 2019. The Respondent having acknowledged the debt in the month of December, 2016, during subsistence of period of limitation, would start the period of limitation again from Dec, 2016 and shall give a fresh period of three years to the Appellant to count the limitation to file the application under Section 7 i.e. from December, 2016 to December, 2019 whereas the application under Section 7 was filed in the year 2018 much before the expiry of the period of limitation. These findings have not been challenged by the Respondent by way of an appeal and has attained finality against the Respondent. Even otherwise, there are no error in the aforesaid findings recorded by the Tribunal. The present appeal is found to be meritorious and the same succeeds. The impugned order is hereby set aside. The matter is remanded back to the Tribunal - appeal allowed by way of remand.

  ---

• 2024 (11) TMI 211
  Maintainability of application - initiation of CIRP - condonation of delay in filing petition u/s 7 of IBC - It was averred in the application that at the time of filing of petition, no application for condonation of delay was filed as it is alleged that the OBC at that time was under the bonafide impression and belief that the CP was filed well within the period of limitation - HELD THAT:- The Tribunal held that Section 5 of the Act shall apply to the application filed under Section 7 or 9 of the Code but while referring to a decision of the Hon ble Supreme Court in the case of B.K Educational Services Pvt. Ltd. Vs. Parag Gupta And Associates [ 2018 (10) TMI 777 - SUPREME COURT ] held that the right to sue, therefore, accrues when a default occurs and that if the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the Limitation Act, save and except in those cases where in the facts of the case Section 5 of the Act may be applied to condone the delay in filing such an application . The Tribunal has also held that the Appellant cannot be permitted to take the plea of bonafide belief that the limitation for filing the application, filed under Section 7, would start from 01.12.2016 when the Code came into being and became enforceable. The Tribunal has also discussed in its order about the liberal approach of the Court in condoning the delay but it was held that if mandatory provision is not complied with and that delay is not sufficiently, satisfactorily and convincingly explained then the delay cannot be condoned on equitable or sympathetic grounds alone. There are no merit in the present appeal for the purpose of interference and hence, the same is hereby dismissed.

  ---

• PMLA

• 2024 (11) TMI 210
  Condonation of delay of 488 days in filing the special leave petition - Money Laundering - proceeds of crime - provisional attachment of property - gist of the objection raised by the ED is that the present writ petition is not maintainable in the High Court of Jharkhand - it was held by High Court that The respondent no.2 is directed to accept the amount of Rs.12 Lakhs tendered by the petitioner-company through bank draft in the name of Directorate of Enforcement payable at Ranchi which shall be deposited in the interest-bearing account till completion of the trial. HELD THAT:- The delay cannot be condoned - SLP dismissed on the ground of delay.

  ---

• Service Tax

• 2024 (11) TMI 265
  Service tax on cost of salary recovered by the appellant from Group entity under the category of man-power recruitment or supply agency service - Assessee submits that recovery of cost of the employees deputed to the group entity is not liable to service in the hands of the appellant HELD THAT:- We find that there is no dispute in the fact that so called service recipient M/s GETRI is a subsidiary of the appellant and the appellant are recovering the actual cost of the salary paid to the employees who are deputed at GETRI. In the same type of arrangement Hon ble Gujarat High Court considering the identical issue in the case of Arvind Mills Ltd. [ 2014 (4) TMI 132 - GUJARAT HIGH COURT] The issue is no more res-integra as under the identical arrangements within the group company, no service tax can be charged. Accordingly, in the present case having the same facts, the ratio of the above judgment is directly applicable and considering the same, the impugned order is set aside and appeal is allowed.

  ---

• 2024 (11) TMI 264
  Classification as supply of tangible goods service - Demand the service tax on activity of transportation of RMC to the service recipient site is amount to service of supply of tangible goods service - activity of construction of Drain was proposed to be classified under site formation and Site Formation and Clearance , Excavation, Earth Moving Demolition Services HELD THAT:- The appellant s activity by any stretch of imagination cannot be classified as supply of tangible goods service, therefore, the demand on this count is not sustainable. Whether the activities carried out by the appellant for M/s L T is covered by Commercial Industrial Construction Services, as claimed by the appellant or under Site Formation and Clearance , Excavation, Earth Moving Demolition Services as proposed by the Revenue - From the purchase order, the scope of work clearly shows that it is construction of Drain in Stone Pitching at Training Center HZMC, West. It is observed that the construction of water drain was constructed by providing and laying cement concrete etc. and also laying of Rubble Stone Pitching. This clearly shows that the appellant have carried out the service of commercial or Industrial Construction Service, hence the department s claim to classify the said activity under Site Formation and Clearance , Excavation, Earth Moving Demolition Services is absolutely incorrect. Therefore, the service is not classifiable under Site Formation and Clearance , Excavation, Earth Moving Demolition Services . Consequently, the demand on this count also does not sustain. Thus the entire demand is not sustainable. Decided in favour of assessee.

  ---

• 2024 (11) TMI 263
  Cenvat credit denied only on the ground of non-filing of ST-3 - appellant have not taken the cenvat credit on capital goods, therefore, the same is not hit by invocation of Rule 4(4) of Cenvat Credit Rules, 2004 - HELD THAT:- We find that as regard the allegation that the appellant have taken the cenvat on capital goods as well as availed the depreciation. From the perusal of record it is absolutely clear that the appellant have not taken cenvat credit on capital goods, therefore, the reason for denial of credit on the goods is not correct. On this basis the credit cannot be denied. As regard the denial credit on the input service only on the ground of non filing of ST-3 return, we are of the view that merely of non-filing of ST-3 return, the assessee cannot be deprived of their statutory benefit of cenvat credit as provided under statute. The cenvat credit cannot be denied only on the ground of non-filing of ST-3, therefore on both the counts, the cenvat credit was wrongly disallowed which is not sustainable, therefore, we hold that the appellant is eligible for cenvat credit and the same stands adjusted against the service tax demand as accepted by the appellant. Demand as raised under advertising service in the show cause notice whereas the adjudicating authority itself has confirmed the demand under the category of selling of space for advertisement - This demand pertaining to the period prior to 01.07.2012 where the category of service was significantly statutory, therefore, if the demand was proposed under the wrong head, the demand will not sustain under different head as held in catena of judgments as cited by the appellant, therefore, the demand is set aside only on this ground itself without going into the issue of limitation as raised by the appellant. Penalty for failure to pay service tax for reasons of fraud, etc . - As in the facts of the present case, appellant is liable to pay penalty of 15% of the recoverable service tax amount. We find that the appellant have paid the service tax as admitted by them, the tax amount which includes the cenvat credit which is admissible to them as discussed above and the remaining amount was paid in cash along with interest and penalty of 15%. Therefore, no further penalty is required to be sustained. Accordingly, we set aside the penalty over and above Rs. 4,78,239/-.

  ---

• 2024 (11) TMI 262
  Service Tax demand by invoking the extended period of limitation - service provided by the assessee are considered to be services of erection commissioning and installation provided by the assessee are considered to be services of Erection Commissioning and Installation Servicess - HELD THAT:- We find that as per the arguments of Appellant on the basis of various contracts, it is clear that the contracts are on turnkey basis which were executed in lump sum basis and there is no bifurcation of the material and the service therefore, prima facie the service is of works contract service. On the issue that whether works contract service was taxable prior to 01.06.2007 it has been decided by the Hon ble Supreme Court in the case of L T. [ 2015 (8) TMI 749 - SUPREME COURT] The adjudicating authority has confirmed the demand only on the basis that an SLP was filed by the revenue before the Hon ble Supreme Court in the case of L T. Since, the Hon ble Supreme Court judgment was not before adjudicating authority at the time of passing of adjudication order, in the interest of justice, we are of the view that matter should be reconsidered as per law settled by the Hon ble Supreme Court in the case of L T, accordingly we set aside the impugned order and remand both the appeals to the adjudicating authority for passing a fresh order keeping in mind the above observation.

  ---

• 2024 (11) TMI 209
  Service tax under reverse charge mechanism under Goods Transport Agency Service or otherwise - appellant as a recipient of transport service - As per Commisioner [Appeals] monthly bills raised by the truck owners are nothing but consignment notes and therefore the appellant is liable to pay service tax under reverse charge mechanism HELD THAT:- We find that it is an admitted fact that in respect of the transport service provided by the truck owners no individual consignment note was issued for the transportation service. The service provider had issued monthly bill which Commissioner (Appeals) has considered as consignment note. We completely disagree with the learned Commissioner (Appeals) for the reason that the consignment note itself connotes that the document has to be issued for each and every consignment that means for every trip if a document is issued which contains all the information as required under the law irrespective of any nomenclature the same can be accepted as consignment note. However, in the present case the monthly bill raised for the collection of charges by the service provider was treated as consignment note by the Learned Commissioner (Appeals) which is absolutely incorrect. The monthly bill is not a document which is issued for each consignment moreover the bill does not contain all the information as required under the law. Therefore, the entire confirmation of demand by the learned Commissioner (Appeals) based on the monthly bill cannot be sustained. As relying on Nandganj Sihor Sugar Co. Ltd. [ 2014 (5) TMI 138 - CESTAT NEW DELHI ] and Ultra Tech Cement Ltd. [ 2017 (11) TMI 297 - CESTAT MUMBAI ] in the present case there is absolutely no issuance of consignment note in respect transport service provided by the truck owners. We also hold that the monthly bill in the present case cannot be treated as consignment note. Therefore in absence of consignment note, the demand under GTA is not sustainable. Assessee appeal allowed.

  ---

• 2024 (11) TMI 208
  Non payment of service tax on sale of development rights - Invoking Extended period of limitation - Intentional and wilful suppression of facts or not? department felt that the transfer of development rights became a service with effect from 1.7.2012 as per section 65B (44) of the Finance Act, 1994 and therefore, it was taxable - whether the transaction of transfer of development rights is a service under section 65B(44) read with section 65B(51) of the Finance Act ? - Invoking Extended period of limitation - HELD THAT:- The issue in the instant case involves interpretation of legal provisions. Whether TDR is a transaction in immovable property or a service is a debatable issue. In such a situation allegations in the SCN that the Noticee suppressed the value of taxable services seems to be a far stretched one. The issue that extended period of limitation in cases involving interpretation of law is not invokable is a settled issue and it has been held by the judicial forums that extended period of limitation in not sustainable in such cases. There is no other ground on which the extended period of limitation can be invoked. Evidently, fraud, collusion, wilful misstatement and violation of Act or Rules with an intent all have the mens rea built into them and without the mens rea, they cannot be invoked. Suppression of facts has also been held through a series of judicial pronouncements to mean not mere omission but an active suppression with an intent to evade payment of service tax. In other words, without an intent being established, extended period of limitation cannot be invoked. Thus, the central excise officer has an obligation to make his best judgment if either the assessee fails to furnish the returns or, having filed the return, fails to assess tax in accordance with the Act and Rules. Thus, although all assessees self-assess tax, the responsibility of taking action if they do not assess and pay the tax correctly squarely rests on the central excise officer, i.e., the officer with whom the Returns are filed. It is incorrect to say that had the audit not been conducted, the allegedly ineligible CENVAT credit would not have come to light. It would have come to light if the central excise officer had discharged his responsibility under section 72. This legal position that the primary responsibility for ensuring that correct amount of service tax is paid rests on the officer even in a regime of self-assessment was clarified by the Central Board of Excise and Customs [CBEC] in its Manual for Scrutiny of Service Tax Returns. Therefore, it is incorrect to say that had the audit not been conducted, the alleged non-payment of service tax would not have come to light is neither legally correct nor is it consistent with the CBEC s own instructions to its officers. CBEC took a conscious decision that detailed scrutiny of the Returns should be done only in some cases selected based on some criteria. In those Returns, where detailed scrutiny is not done by the officers some tax may escape assessment which may not be discovered within the normal period of limitation. Such loss of Revenue, needless to say, is a risk which is taken as a matter of policy by the CBEC. Thus to sum-up: a) The respondent assessee was required to file the ST 3 Returns which it did. Unless the Central Excise officer calls for documents, etc., it is not required to provide them or disclose anything else. b) It is the responsibility of the Central Excise Officer with whom the Returns are filed to scrutinise them and if necessary, make the best judgment assessment under section 72 of the Finance Act and issue an SCN under Section 73 of the Finance Act within the time limit. If the officer does not do so, and any tax escapes assessment, the responsibility for it rests on the officer. c) Although the Central Excise Officer is empowered to scrutinise all the Returns and if necessary, make the best judgment assessment, if, as per the instructions of CBIC, the officer does not conduct a detailed scrutiny of the Returns and as a result is unable to discover any short payment of tax within the period of limitation, neither the assessee nor the officer is responsible for such loss of revenue. Such a loss of Revenue is the risk taken by the Board as a matter of policy. d) Extended period of limitation cannot be invoked unless there is evidence of fraud or collusion or wilful misstatement or suppression of facts or violation of the provisions of the Finance Act or Rules with an intent. e) Intentional and wilful suppression of facts cannot be presumed because (a) the appellant was operating under self-assessment or (b) because the appellant did not agree with the audit or (c) because the officer did not conduct a detailed scrutiny of the Returns and the escapement of tax was discovered only during audit. We, therefore, find in favour of the respondent on the question of limitation. It is therefore, not necessary to examine the merits of the case.

  ---

• 2024 (11) TMI 207
  Issuance of an Addendum/Corrigendum to the Show Cause Notice (SCN) after a six-month gap - HELD THAT:- The initial notice was issued to deny the appellant s claim for refund for non-fulfilment of the conditions of the Notification. The said addendum dated 14.10.2019 further supplements the allegations contained in the original show cause notice, stating that the formula for calculating the refund amount was not fulfilled. We note that in the case of Gwalior Rayon Mfg. (Wvg.) Co [ 1982 (4) TMI 68 - HIGH COURT OF M.P. AT JABALPUR] held that merely because necessary particulars have not been stated in the show cause notice, it could not be a valid ground for quashing the notice, because it is open to the petitioner to seek further particulars, if any, that may be necessary for it to show cause if the same is deficient. Therefore, we hold that there is no legal infirmity in the issuance of addendum in this regard. Refund of accumulated Cenvat credit availed on export of services - appellant had failed to provide supporting documents in relation to the payment received during the relevant period, hence the refund claim was being rejected - whether the appellant has fulfilled the conditions of the Notification No. 27/2012-CE (NT) dt 18.06.012 as amended by Not. No. 14/2016-CE (NT) dated 1.03.2016? - HELD THAT:- In Mangalore Chemicals and Fertilizers Ltd [ 1991 (8) TMI 83 - SUPREME COURT] held that the procedural infraction of Notification, Circulars etc., are to be condoned, if exports have already taken place and the law is settled now that substantive benefit cannot be denied for procedural lapse. Similarly, in the decision in the case of Agio Pharmaceuticals Limited [ 2013 (6) TMI 686 - GOVERNMENT OF INDIA] the Government held that there is no dispute of duty or export of duty of goods registered in warehouse under Rule 9 of Central Excise Rules, 2002. Goods were cleared from factory under Central Excise supervision and ARE-1 signed by both partners endorsed by Customs and the Central Excise authorities stated that the goods exported, shipping bills and substantial conditions of Notification No. 19/2004- CE (NT), dated 06.09.2004 and Rule 18 of Central Excise Rules, 2002 were complied with. Rebate cannot be denied for minor procedural infraction. In the instant case, it is established that broadcast services were exported. Thus, we hold that there is no reason for denying the refund on minor procedural infractions. However as the relevant documents were not submitted before the original authority, we hold that this matter needs to be remanded, giving an opportunity to the appellant to produce all the relevant and supporting documents before the original adjudicating authority to satisfy the remaining condition of the notification. Refund of Swachh Bharat Cess to the appellant - We note that the issue is no more res integra in view of the decision of this Tribunal in State Street Syntel Services Pvt., Ltd. [ 2019 (6) TMI 859 - CESTAT MUMBAI] wherein while discussing Section 119 of the Finance Act, 2015 and various other case laws, held that the Swachh Bharat Cess paid on input services has to be available as Cenvat Credit and the same can be discharged by utilizing Cenvat Credit and the appellant therein are entitled for refund of it. Consequently, we hold that the appellant cannot be denied the refund of what is allowed to them statutorily, merely on the grounds that they have submitted a letter to the Department for not pressing the same.

  ---

• 2024 (11) TMI 206
  Service tax on the service of Clinical Trial on Drugs for the Foreign Service recipient - whether this service is considered as export of service or otherwise - HELD THAT:- As relying on VEEDA CLINICAL RESEARCH LIMITED VERSUS PR. COMMISSIONER, CGST, AHMEDABAD (VICE-VERSA) [ 2024 (10) TMI 1067 - CESTAT AHMEDABAD] Service in question provided to Foreign Service recipient is export of service and accordingly no service tax is recoverable on the same. Assessee appeal allowed.

  ---

• 2024 (11) TMI 205
  Calculation of value of service portion in the execution of a works contract - in works contract service , the value of land should be included or otherwise - demand for service tax, interest, and penalty - whether demand being time barred? - HELD THAT:- From the Rule 2A(i), it is clear that for the purpose of value of service in the execution of works contract the gross value shall not include the value of land or undivided share of land. In view of this provision the value of land is not includible and service tax demand on this ground is not sustainable on merit. Submission of the learned Chartered Accountant that the demand is hit by limitation - We find that the show cause notice was issued invoking the extended period. As regard the facts of the case the appellant was registered with Service Tax Department and in respect of the same works contract service , they have been paying the service tax on declaring all the details in their ST-3 return. Even the value of land was also disclosed in the return. Therefore, there is no suppression of fact on the part of the assessee, all the transactions were recorded in the records. All the books were regularly audited by the statutory auditors. The appellant have not charged or recovered any service tax on land value based on their bona fide belief that no service tax is payable thereon, considering, the provisions of law. The issue also involved the interpretation of valuation for works contract service. Therefore, the demand and corresponding interest and penalty is not sustainable, on the ground of limitation also. Accordingly, the demand is set aside.

  ---

• 2024 (11) TMI 204
  Cenvat Credit on the basis of invoices of various broadcasting service providers - Invocation of extended period of limitation - HELD THAT:- We find that the respondents have regularly filing the ST-3 returns and it was not required during the relevant time to submit the copies of invoices with ST-3 returns and it was only during audit, it was noticed by the Department that the respondent is availing the Cenvat credit on photocopies. We find that the Department has not been able to establish that there was intention of the appellant to evade the payment of service tax. Further, the Commissioner has rightly observed in para 4.8 of the impugned order wherein he has held that the show cause notice is within normal period of limitation of one year for the period from October, 2008 to March, 2009 and for the remaining period of time i.e. March, 2005 to September, 2007; the show cause notices were barred by limitation. Cenvat Credit availed on photocopies of invoices - Respondent has wrongly availed the Cenvat credit on the basis of photocopies alone which does not bear the signature of the issuing authority, therefore, we set aside the impugned order and confirmed the demand for the normal period from October, 2008 to March, 2009 along with interest; no penalties are required to be imposed on the respondent. Accordingly, the matters are remanded back to the Original Authority to quantify the demand of wrongly availed Cenvat Credit for the period October, 2008 to March, 2009 along with interest. Both appeals are disposed of on the above terms.

  ---

• Central Excise

• 2024 (11) TMI 203
  Eligibility for exemption Notification No.10/2006-CE dated 01.03.2006 - SSI exemption - misclassification of goods - Parts of Kitchen/ table wares, Toilet Items, SS Box, Sigree/Tandoor and Brass Knobs - determination of ratio of the value of such items out of the total clearance value of the year 2012-13 - HELD THAT:- It is clear that during 2014-2015 no such items were cleared by the Respondent. The Department has filed the appeal without application of mind, as the Order-in-Original clearly states the analogy which was adopted for quantifying the amount prior to 2011 as stated above. The Department, without reading the order, has filed the appeal in a vague and perverse manner which is liable to be dismissed. Furthermore, the Department has again failed to give or suggest any other method logically or evidence that the computation made by the commissioner was incorrect or arbitrary. He has adopted a reasonable method for computation. The issue in dispute in appeal is strictly restricted to the period prior to February, 2011 for which the Adjudicating Authority has used the analogy to calculate the value of duty leviable on the manufacturing of these 4/5 items prior to February, 2011. The demand in SCN for the same period is upto Rs.48,35,361/-. This demand of duty is below the monetary limit for filing the appeal before the Tribunal, hence this appeal itself is not maintainable. The amount stated in the appeal is incorrect as the dispute pertains to the period prior to 2011. In the Order-in-Original the Adjudicating Authority stated that these 4/5 items were eligible to SSI exemption for the period prior to 01.03.2011. However, this seems a typographical error as the SSI exemption was available till 31.03.2011. There are no infirmity in the impugned order - The appeal is dismissed.

  ---

• 2024 (11) TMI 202
  Violation of principles of natural justice - no personal hearing has been conducted by the adjudicating authority - Valuation of lighting fixtures supplied to brand owner - levy of separate penalty on a partner of a partnership firm - levy of redemption fine - goods are not available. Principles of natural justice - HELD THAT:- It is found that in the entire case, no personal hearing has been conducted by the adjudicating authority though, the adjudicating authority has given a notice of hearing on 21.09.2017 but by one notice two consecutive date of hearing i.e. 03.10.2017 13.10.2017 was fixed. In this regard, it is found that it is a settled law that by giving one hearing notice letter even though, two or three dates are given it is to be considered as one date of hearing and as per the statute, minimum three opportunities of personal hearing is required to be given to the assessee. Moreover, the appellant also filed a letter dated 29.11.2017 explaining the reason for non attendance and requested for a fresh date of hearing. However, by that time, the adjudication order came to be passed. As regard the second show cause notice, even though, hearing is conducted but the order was passed on the same line of the order passed in the show cause notice dated 30.03.2017. Therefore, taking total stock of the proceeding, there is a clear violation of principles of Natural Justice in adjudication of the show cause notices. Levy of personal penalty on Shri Ashwin Dias - HELD THAT:- It is found that Shri Ashwin Dias is undisputedly partner of M/s. Art Luminaires which is a partnership firm. The Hon ble jurisdictional High of Gujarat in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS JAI PRAKASH MOTWANI [ 2009 (1) TMI 501 - GUJARAT HIGH COURT] judgment in the case of SHAH PETROLEUMS AND SNEHAL ARVINDBHAI SHAH VERSUS C.C.E. S.T. -SURAT-II [ 2023 (2) TMI 67 - CESTAT AHMEDABAD] held that in case of partnership firm, no separate penalty can be imposed on the partner. In view of the settled legal position by the Hon ble High Court of Gujarat irrespective of any merit of the case, the personal penalty on Mr. Ashwin Dias is clearly not sustainable. Hence, the same is set aside. Levy of Redemption Fine - goods are not available - HELD THAT:- It is found that the Ld. Commissioner (Appeals) is absolutely correct in setting aside the redemption fine, as the issue is squarely covered by the Larger Bench judgment in the case of SHIV KRIPA ISPAT PVT. LTD. VERSUS COMMISSIONER OF C. EX. CUS., NASIK [ 2009 (1) TMI 124 - CESTAT MUMBAI - LB] wherein, it was held that when the goods are not available for confiscation no redemption fine can be imposed. Therefore, there are no infirmity in the order of the Commissioner (Appeals) to the extent, it set aside the redemption fine. Appeals are allowed by way of remand to the adjudicating authority for passing a fresh order by observing the principles of Natural Justice.

  ---

• 2024 (11) TMI 201
  Reversal of excess input service credit - Distribution of input service credit of the common input credit of various input services distributed by their Head Office situated at Thane (Mumbai) - Department is of view that since the appellants Head Office is who providing output service, the Head Office of the appellant has not proportioned input credit going for providing output service at cleared and therefore distribute the input service credit amounts three units in excess - HELD THAT:- The fact is noted that the show cause notice on the similar issue were also issued to the appellant is other units situated at Tamil Nadu and Uttar Pradesh. The matter have already been decided by the Division Bench of this Tribunal in M/S COVESTRO (INDIA) PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2024 (3) TMI 1367 - CESTAT ALLAHABAD] wherein, the appeal of the appellant has been allowed by this Tribunal. The matter is no longer res Integra as the issue has already been decided by this Tribunal in the appellant s own case on the same issue where it was held that It is found that exactly the same issue in case of Appellant s Tiruchirapalli unit has been decided by the Chennai Bench vide Final Order [ 2023 (2) TMI 7 - CESTAT CHENNAI ], observing that There is also nothing brought out on record if the appellant, being a recipient unit, had any role or influence in the manner of distribution so that a case of wilful suppression with an intention to evade payment of duty, etc., could be justified. When the appellant took consistent stand inter alia that its Head office-ISD unit was regularly filing its ER-1 return, that the service provider unit at Head Office had Service Tax liability every year, which was paid in cash and that the entire tax liability was paid in cash every year rather than paying through the CENVAT Credit, the lower authorities have not denied anywhere the above facts. Following the above decision of this Tribunal in the appellants own case on the same issue it is decided that impugned order in appeal is devoid of any merit and therefore, the same is set aside - appeal allowed.

  ---

• 2024 (11) TMI 200
  Clandestine removal - Recovery of central excise duty with interest and penalty - demand was confirmed, basically relying on the admissions made by the authorized signatory of the appellant company regarding shortage of finished goods and the raw materials - invocation of Extended period of limitation - penalty - HELD THAT:- While considering the issue of clandestine removal, the statement dated 17.01.2015 of Shri Shikhar Agarwal recorded under Section 14 of the Central Excise Act, 1944 is relevant to be taken note of, where he accepted that he was part of panchnama proceedings and was present throughout. From the above contents of his statement, it is evident that Shri Shikhar Agarwal had admitted the shortage of the finished goods and the raw materials and also the removal of the goods without payment of duty and without accounting thereof in the records. Further, he agreed with the verification of records with physical stock by the officers and accepted the lapse of the stock found short. Coupled with the admissions made by Shri Shikar Agarwal, the modus operandi of the appellant of not maintaining any kind of Daily Stock at the factory premises, not making entry of final products in the daily production register, not issuing any invoices in respect of excisable goods cleared and neither declared the production and clearance of excisable goods so manufactured and cleared in the ER-1 Returns only reflects that shortage of the finished goods and the raw materials during the physical verification at the time of preventive check is evident of the fact of clandestine removal with intent to evade payment of duty. The objection raised by the appellant that search was without search warrant is not sustainable as per the records made available and considered in the impugned order. The Revenue has placed on record the authorization dated 15.01.2015 by the Additional Commissioner (Preventive) to the Superintendent (Preventive) authorizing him to search the premises, etc. of the appellant. From the impugned order, it is found that the Commissioner (Appeals) had categorically noted that the panchnama makes it clear that the search warrant was shown to Shri Ram Avtar Agarwal, Director of the appellant and he had signed the search warrant - the notices for personal hearing issued on various dates sent by speed post were not returned or un-delivered. The contention of the appellant stands duly dis-proved by the documentary evidence placed on record by the Revenue. Invocation of Extended period of Limitation - Penalty - HELD THAT:- The invocation of extended period of 5 years under Section 11 A (4) of the Act is correct and this being a case of deliberate suppression of facts regarding production and removal of goods, the penalty has been rightly invoked under Section 11AC(1)(c) of the Act. The demand of duty along with interest and penalty is confirmed - there are no infirmity in the impugned order and hence, the same is affirmed - appeal dismissed.

  ---

• CST, VAT & Sales Tax

• 2024 (11) TMI 199
  Jurisdiction to claim outstanding dues from petitioners regarding specific land - Priority of charge under the SARFAESI Act over the State s claim - HELD THAT:- This Court in the aforesaid decision in case of PARTNERS OF SIDDHESHWAR TAX FAB ORS. VERSUS STATE OF GUJARAT ORS. [ 2024 (7) TMI 1547 - GUJARAT HIGH COURT] has held Thus, the charge in respect of the property in question created for sales tax dues or VAT dues is of no avail and has no efficacy in law in view of the provisions of SARFAESI Act and the RDB Act. The property in question was sold by respondent no. 6-Bank under the provisions of SARFAESI Act and the petitioners were successful purchasers and the sale certificate is issued and sale deed is also executed by which the petitioners have become absolute owners of the property and therefore considering the existing position of law, the charge created by the respondent State over the property in question in the year 2018, cannot be sustained. Considering the above decision and the facts of the case, it is an undisputed fact of the case that the petitioner bank had created a prior charge in the year 2011 as against the charge created by the State in the year 2018. Therefore, the petitioner-Bank will have a prior charge over the property in question which is sold in auction in favour of petitioner no. 2 and accordingly, the impugned orders dated 26.09.2018 and 07.09.2019 are hereby quashed and set aside - petition allowed.

  ---

• 2024 (11) TMI 198
  Maintainability of petiiton - availability of alternative remedy - Rejection of appeal filed by the present petitioners - non-attendance of appellant before the Authority either in person or through an agent - Section 26 (5) (a) of the Maharashtra Value Added Tax Act - HELD THAT:- The plea of availability of an alternate remedy, cannot be construed as a Bar for exercising the powers under Article 226 of the Constitution of India. More so, in the instant case, when the challenge is, to the passing of the impugned order by the Appellate Authority in contradistinction to the mandate as provided in Section 26 (5) (a) of the Maharashtra Value Added Tax Act. The plea therefore, is being turned down. It is a settled position of law, that between a Statute and a Rule, it is the Statute, which has primacy and therefore, prevails upon the Rule. In that view of the matter, while deciding the appeal, the Authority will have to be governed by the mandate of Section 26 (1) (a) of the Maharashtra Value Added Tax Act and decide the appeal in the manner as indicated therein, the Rule being subservient to it. The position in this regard has been considered in BALAJI STEEL RE-ROLLING MILLS VERSUS COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS [ 2014 (11) TMI 531 - SUPREME COURT ] in which considering similar provisions as contained in the Central Excise Act and Rule 20 of the Rules framed thereunder, which provided for dismissal of an appeal on account of the absence of the petitioner, it has been held that the substantive provisions of the Act would prevail and would be the manner in which the appeal has to be decided. In that view of the matter, the impugned order is hereby quashed and set aside and the matter is remitted back to the respondent No. 2 for decision afresh - petition allowed by way of remand.

  ---

• Indian Laws

• 2024 (11) TMI 197
  Dishonour of Cheque - insufficient funds - challenge to summoning order - scope of interference of this Court under Section 482 of the Code - non-application of mind - whether the learned MM and learned ASJ erred in passing the summoning order and impugned revision order, respectively, against the petitioner? - HELD THAT:- It is observed that after a cheque is returned for insufficient funds in the account, a notice demanding the repayment of the due amount should be issued by the payee to the drawer within a time period of thirty (30) days from the date on which the cheque was returned. Moreover, the provision also provides the drawer with a statutory period of fifteen (15) days to repay the due amount from the date of receipt of the demand notice. However, if the drawer fails to pay the due amount within the said statutory period, then an offence under Section 138 of the NI Act is deemed to have been committed. Moreover, once the offence is made out under Section 138 of the Act, the concerned Magistrate shall take cognizance of the offence as per Section 142 of the NI Act, only if the complaint is made in writing, by payee or holder in due course of time and within one month from the date on which the cause of action arises. It is pertinent to unfold the series of events that took place between the respondent no. 2 and the petitioner, wherein the cheque presented by the respondent no. 2 was returned for insufficient funds vide the return memo dated 25th May, 2019. Thereafter, the respondent no. 2, adhering to the statutory requirement of 30 days mentioned under clause (b) of proviso to Section 138 of the NI Act, issued a legal demand notice to the petitioner for the payment of due amount on 21st June, 2019 and the same was received by the petitioner on 24th June, 2019 as per the postal tracking report on record. It is pertinent to note that the Hon ble Supreme Court in the case of M/S. SAKETH INDIA LIMITED AND OTHERS VERSUS M/S. INDIA SECURITIES LIMITED [ 1999 (3) TMI 591 - SUPREME COURT] observed that the day on which the cause of action arises must be excluded in computing the limitation period for filing of the complaint as per Section 142 (1) (b) of the NI Act. In the matter at hand, the period of fifteen (15) days for repayment of the due amount expires on 9th July, 2019. Therefore, the cause of action under clause (c) of proviso to Section 138 of the NI Act arises on 10th July, 2019, which is to be excluded while calculating the limitation period of one month as envisaged under Section 142 (1) (b) of the NI Act. Therefore, according to the said provision, the complaint is to be filed on or before 10th August, 2019. However, the respondent no. 2 filed the complaint on 13th August, 2019 - It is the case of the respondent no. 2 that the limitation period of one month for filing the complaint expires on 10th August, 2019, on which the Court was not functioning and therefore, the respondent no. 2 was only able to file the complaint on the next working day i.e., 13th August, 2019. The NI Act, which categorically lays down extensive substance regarding the dishonor of the cheque, is silent with respect to the expiration of the limitation period on the day the Courts are closed. However, since the same is explicitly dealt by Section 4 of the Limitation Act, 1963, the same would be applicable in the instant case as well - given that the limitation period of one month for filing the complaint expires on 10th August, 2019, which is a holiday for the Court concerned, the same may be filed on the day when the Court concerned reopened i.e., 13th August, 2019. Coming to the issue of non-providence of sufficient reasons for summoning of the petitioner, it is observed that the respondent no. 2 filed pre-summoning evidence by way of an affidavit. It is pertinent to note that as per Section 145 of the Act, the complainant may give its evidence via an affidavit and upon satisfaction of the Court concerned, the same may be treated as an evidence for summoning the accused for any enquiry, trial or proceedings - Upon perusal of the summoning order, it is observed that the learned MM was satisfied with the sufficient causes being shown and accordingly, summons against the petitioner were issued. Therefore, the learned MM was correct in passing the summoning order against the petitioner and the learned ASJ was also right in upholding the said summoning order. This Court is of the view that the learned MM and the learned ASJ have not committed any error or illegality while passing the respective orders and therefore, this Court does not find any reasons to exercise its powers under Section 482 of the Code as the instant petition is bereft of any merits - Petition dismissed.

  ---

• 2024 (11) TMI 196
  Dishonour of Cheque - challenge to summoning Order - Cheque has not been signed by the petitioner but by a person, who is neither an employee nor a Legal Representative of the petitioner or his Proprietorship Firm - HELD THAT:- Pertinently, the Cheque in question has been dishonoured on the ground of signature being different, which again implies that Bhagawat Daulat Gawali had no authority to sign the Cheque for and on behalf of the petitioner-accused or his Proprietorship Firm. The Cheque does not bear the signatures of the petitioner-accused and therefore, cannot be held liable either for the issuance of Cheque or its consequent dishonour. The assertion of the respondent No. 2-Complainant that Bhagawat Daulat Gawali had issued the Cheque for and on behalf of the petitioner-accused in discharge of his liability is not tenable under Section 138 of NI Act, 1881. This may be a valid ground for filing a Suit for Recovery but definitely under Section 138 of NI Act, 1881 which is specific and is applicable only to the Drawer and Drawee of the Cheque, no third party can be summoned under Section 138 of NI Act, 1881. Therefore, the petitioner-accused not being a signatory to the Cheque, cannot be summoned in the Complaint Case under Section 138 of the NI Act, 1881 filed for and on behalf of the respondent No. 2-Complainant. The Summoning Order dated 01.02.2021 is patently illegal and is hereby set aside - Petition disposed off.

  ---

• 2024 (11) TMI 195
  Dishonour of Cheque - Challenge to Cognizance and Summoning Orders - vicarious liability - Cheques have been signed and issued by the respondent No. 3-Bhagawat Daulat Gawali in his individual capacity which had no connection with the petitioners herein or the alleged business transaction between the petitioner No. 1-Bipin Lal Singh Pagar through its Proprietorship Firm M/s Amax Agro Exports (the petitioner No. 2) and the respondent No. 2-Tiger Logistics (India) Limited. Whether the Petitioner can be summoned under S.148 NI Act for a dishonoured Cheque that has not been signed by him but by one Bhagawat Daulat Gawali, who is neither an employee nor a Legal Representative of the petitioner or his Proprietorship Firm? - HELD THAT:- Pertinently, the Cheques in question have been dishonoured on the ground of Account Closed vide Cheque Return Memo dated 03.09.2020. Since, the petitioner No. 1-Bipin Lal Singh Pagar is not a signatory to the said two Cheques, he canot not be held liable under Section 138 of NI Act, 1881. The claim of the respondent No. 2-Tiger Logistics (India) Limited that the Cheques had been issued by the respondent No. 3/Bhagawat Daulat Gawali for and on behalf of the petitioners in discharge of their liabilities towards the respondent No. 2-Tiger Logistics (India) Limited, may be a basis for filing the Civil Suit, but these averments for Complaint under Section 138 of NI Act, 1881 are not maintainable against the petitioners. Therefore, the petitioners not being a signatory to the two Cheques cannot be summoned in the Complaint Case under Section 138 of the NI Act, 1881. The Summoning Orders both dated 11.01.2021 in the two Complaints, against the petitioners are patently illegal and are hereby set aside, though they may be continued against Bhagawat Daulat Gawali, in accordance with law - Petition allowed.

  ---

• 2024 (11) TMI 194
  Direction to empanel it as an Agency for production of audio visual contents - benefits of exemption/relaxation from deposit of EMD in terms of the letter dated 27th December, 2023 (Annexure-8) issued by the MSME Department - HELD THAT:- This Court finds that the Petitioner being a MSME Unit is entitled for certain exemptions/relaxations as per the letter under Annexure-8 and notification as well as Memorandum under Annexure-10 and 11 respectively. The plea taken by the State of Odisha-Opposite Party Nos.1 2 that the case of the Petitioner could not have been considered, as the notification was issued on the date of sitting of the Scrutiny Committee is not sustainable. From the counter affidavit, it appears that the Scrutiny Committee was convened on 27th December, 2023 and subsequently on 28th December, 2023. Admittedly, notification of MSME Department (Annexure-8) was issued on 27th December, 2023. Thus, it could have been considered by the Scrutiny Committee on 28th December, 2023. Further the Petitioner claims that in view of Section 44AD of the Act, it is not required to submit the audit report of the Chattered Accountant. These aspects need fresh consideration by the Scrutiny Committee. Further the Scrutiny Committee failed to take into consideration the instruction and policy decision of the Government under Annexures-10 and 11. The writ petition is disposed of with a direction that the Scrutiny Committee shall review the case of the Petitioner giving its representative an opportunity of being heard and to produce documents in support of its case. The Petitioner shall be intimated about the date of consideration of its case by the Scrutiny Committee and entire exercise shall be completed as expeditiously as possible preferably within a period of three months from the date of production of certified copy of this order before the Director, Department of Information and Public Relations, Government of Odisha, Bhubaneswar-Opposite Party No. 2. Petition disposed off.

  ---