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TMI Tax Updates - e-Newsletter February 21, 2023 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise Articles Legal status of notices issued under Section 148 for assessment/re-assessment for Assessment year 2013-14 and subsequent years after the prescribed time elapsed VALIDITY OF RULING OF AUTHORITY FOR ADVANCE RULING PENDING INVESTIGATION BY ‘DRI’ Electronic credit ledger cannot be blocked without providing an opportunity of personal hearing News PM GatiShakti Regional Workshop for Western and Central Zone held in Goa RBI releases ‘Draft Guidelines on Minimum Capital Requirements for Market Risk – under Basel III’ RBI releases Draft Reserve Bank of India (Government Securities Lending) Directions, 2023 Curtain Raiser for PM GatiShakti Regional Workshop for Central and Western Zone Held in Goa 1st G20 Finance Ministers & Central Bank Governors and 2nd G20 Finance & Central Bank Deputies Meetings from 22nd-25th February 2023 in Bengaluru Notifications GST - States 22/2022-State Tax - dated 17-2-2023 - Delhi SGST Delhi Goods and Services Tax (Third Amendment) Rules, 2022 Highlights / Catch Notes GST Cancellation of registration of petitioner - The right to carry on trade or profession cannot be curtailed contrary to the constitutional guarantee under Art. 19(1)(g) and Article 21 of the Constitution of India. If the person like petitioner is not allowed to revive the registration, the state would suffer loss of revenue and the ultimate goal under GST regime will stand defeated. The petitioner deserves a chance to come back into GST fold and carry on his business in legitimate manner. - HC Visit to Get Source Works Contract or not - supplies of goods or services for 'selling up of network' - composite supply/principal supply - two ruling of the AAR - first one was accepted but second one was appealed against. - there is binding effect of the first order of advance ruling till 31st March, 2019. which classified the said supply under entry No 3(ii) taxable at 18%. - The second ruling should have ruled on merit as to applicability of the claimed notification entry - Benefit of exemption / relaxation from rate of GST allowed for the period 1.4.2019 to 31.12.2021 - AAAR Visit to Get Source Income Tax Estimation of net profit rate - Rejection of books of accounts - Results which are on declining scale are declared on reduced turnover over the past and subsequent years which have been accepted by the Revenue and thus lend credence to the assessee's submission that its profitability has been effected due to reduced turnover without commensurate reduction in fixed costs. - estimating the net profit rate at the rate of 15% is again arbitrary - AT Visit to Get Source Reopening of assessment u/s 147 - default servicing notice - notice served on the secondary email id registered with PAN - AO ought to have sent the notice u/s 148 to both the primary address and the email address mentioned in the last Return of Income filed to preempt a jurisdictional error on account of valid service; there was neither any cost to it or any prejudice to any party for sending it on more than one email in a given circumstance as in the present case. - HC Visit to Get Source Unsecured loan u/s 68 - Assessee did not produce the 200 odd farmers from whom the Assessee had borrowed an unsecured loan - factually the ITAT has found the addition to be justified and going by ratio of the aforementioned decision, this Court should not interfere with such factual determination by the ITAT. - HC Visit to Get Source Mismatch of credit of TDS due to non-payment of TDS - benefit of tax deducted at source by the employer - Non deposit of TDS by the employer - Reference of Section 205 is to the effect where it provides that the tax when is deductible at source, assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted form that income. Its applicability is not dependent upon the credit for tax deducted being given u/s 199 - TDS Credit allowed - HC Visit to Get Source Reopening of assessment u/s 147 - assessee had entered into cash transactions exceeding Rs.10,00,000 in a month, resulting in escapement of income - the reasons recorded make it amply clear that AO has acted mechanically and without application of mind to the facts and material on record. Such lackadaisical approach for reopening of assessment u/s 147 cannot be condoned. - AT Visit to Get Source Penalty u/s 271A - failure to maintain the books of accounts u/s 44AA - when the very basis of levying the penalty by the ACIT is contrary to the assessment framed by the AO and even business income of the assessee prior to the assessment order was not above the limit prescribed u/s 44AA(2)(i) for keeping and maintaining the books of accounts then the case falls in the ambit of reasonable cause for the said failure - No penalty - AT Visit to Get Source TCS on sale in terms of section 206C - trading of non-ferrous metal scrap - failure to submit the form 27C within the time prescribed - since the assessee had furnished Form 27C before CIT (TDS)-Jamnagar, though belatedly and had also sought to place the same on record during the course of TCS proceedings before the ITO (TDS), the same should have been considered by him at the time of passing of order. - AT Visit to Get Source Customs Valuation of imported goods - Non-calcined petroleum coke - rejection of declared value - when there is a long term contract for lifting of a minimum 8 Lakh Tonnes Per Annum, obviously there will be substantial discount in the price. On this basis, it cannot be said that the comparable price of BGH Exim Limited should be taken for assessment of import of the appellant. - declared value to be accepted - AT Visit to Get Source SION - Benefit of exemption - Whether the appellant is liable to pay duty on the steel grits and saw blades consumed in excess of the SION? - There are no force in the submissions made by learned counsel for the appellant that the demand is time barred because the course of action arose only after the appellant completed its export and the value of such exports was known. The appellant should have, on own its own, paid the duty in fulfilment of its obligation under the bond or under undertaking but has failed to do so and, therefore, the show cause notice was issued in terms of section 28 read with the bond and legal undertaking - AT Visit to Get Source Levy of penalty - freight forwarder - fraudulent availment of Special Focus Market Scheme (SFMS) benefits - taking note of the fact that the appellant is not the actual beneficiary but is only the freight forwarder arranging for container, taking the consignment to shipping lines etc. as per the directions of Shri Ramesh Singh, it is found that the penalty imposed on the appellant is excessive. - the penalties reduced to Rs.2.5 lakhs - AT Visit to Get Source IBC Initiation of CIRP - Claim beyond the period of limitation - The Adjudicating Authority, exercising powers under Section 7 or Section 9 of IBC, is not a Debt Collection Forum. The IBC tackles and/or deals with Insolvency and Bankruptcy. It is not the object of the IBC that CIRP should be initiated to penalize Solvent Companies for non-payment of disputed dues claimed by an Operational Creditor. - AT Visit to Get Source Service Tax Extended period of limitation - Cenvat Credit - telecom towers erected at site and affixed to earth - inputs or not - The demand for duty and interest within the limitation period was sustained. Demand of ineligible cenvat credit issued beyond the period of limitation was dropped considering that the issue was a debatable issue. - Orde of CESTAT sustained - HC Visit to Get Source Extended period of limitation - SCN issued beyond normal period - based on the books of accounts, maintained by the appellant, the officers of service tax department had conducted the audit and they have not disputed the authenticity or accuracy of records maintained by the appellant. - the appellant had received lesser amount than that as shown in the invoices issued to the service recipient. - the charges of suppression etc. cannot be levelled against the appellant. - AT Visit to Get Source Central Excise Process amounting to manufacture or not - activity of aerosol packing of products on job work basis - the process undertaken by the job worker would not amount to manufacture in terms of section 2(f)(ii) of the Excise Act read with note 6 of Chapter 34 or note 10 of Chapter 38 of the Central Excise Tariff. - AT Visit to Get Source Case Laws: GST 2023 (2) TMI 759 Cancellation of registration of petitioner - appeal rejected on the ground of time limitation - petitioner failed to avail the opportunity of hearing - , the petitioner suffered medical emergency. - HELD THAT:- The provisions of GST enactment cannot be interpreted so as to deny right to carry on Trade and Commerce to any citizen and subjects. The constitutional guarantee is unconditional and unequivocal and must be enforced regardless of shortcomings in the scheme of GST enactment. The right to carry on trade or profession cannot be curtailed contrary to the constitutional guarantee under Art. 19(1)(g) and Article 21 of the Constitution of India. If the person like petitioner is not allowed to revive the registration, the state would suffer loss of revenue and the ultimate goal under GST regime will stand defeated. The petitioner deserves a chance to come back into GST fold and carry on his business in legitimate manner. The petitioner, who is sufferer of unique circumstances resulting from pandemic and his health barriers, would be put to great hardship for want of GST registration. The petitioner who is small scale entrepreneur cannot carry on production activities in absence of GST registration. Resultantly, his right to livelihood would be affected. Since his statutory appeal suffered dismissal on technical ground, the situation cannot be allowed to continue. In the facts and circumstances of this case it would be appropriate to exercise our jurisdiction under Art. 226 of the Constitution of India. The order suspending the GST registration, the order dated 14-03-2022 cancelling GST registration of the petitioner passed by the State Tax Officer and the order dated 21-10-2022 passed by the Dy. Commissioner of Tax, Aurangabad are quashed and set aside - Petition allowed. 2023 (2) TMI 758 Works Contract or not - supplies of goods or services for 'selling up of network' - composite supply/principal supply - If supplies contemplated as per the contract with BSNL are not treated as works contract, can these continue to qualify as composite supply? - what is the principle supply? - rate of tax applicable to the supplies made under the contract - applicability of Entry No. 3(vi) (a) of Notification No 11/2017-Central Tax (Rate) (as amended from time to time). - two ruling of the AAR - first one was accepted but second one was appealed against. HELD THAT:- The supply of material and services for setting up of network, supply of satellite connectivity vehicle and training service being made in pursuance of setting up and effective operation of the network as a turnkey contract where contractor undertakes holistic responsibility of all the activities relating to the contract. The activities of Applicant inter-alia involve manufacture of telecom products such as optic liber, optic fiber cable, etc. and services in relation to laying these optic fiber cables (either underground or hung overhead) to create a network, setting up of control centres, installation of equipment, commissioning of network and other ancillary activities that may be necessary for creation of network infrastructure for its customers in the telecom industry. The scope of these activities is contractually stipulated and are typically recognized as a 'turnkey contract'. Therefore, it is clear that supply under consideration meets criteria of civil structure or any other original works . As the network is intended to be used for war fighting operations of Indian Navy, the works contract required therefore is set up with the predominant purpose of defence. In such a case, said works contract is undertaken for a predominant purpose other than commerce, industry, business or profession. The Navy (under the Ministry of Defence, a central government ministry) has entrusted the BSNL. by agreement, works contract to supply, install, commission next generation network along with all materials, civil structure, equipment, satellite connectivity, routers, switches and services to make entire setup to establish network for Indian Navy. BSNL has procured these services in relation to work entrusted by the Indian Navy (central government) - It may be noted that the Notification No 11/2017 has been further amended vide Notification No. 22/2021-CENTRAL TAX (RATE) dated 31.12.2021 (w.e.f. 1.1.2022) by which concessional rate of 12% for specific works contract services provided to Government authority and Government entity have been withdrawn. Said principal notification is further amended vide Notification No 3/2022-CENTRAL TAX (RATE) dt 13.7.2022 w.e.f. 18.7.2022 by which, inter-alia. Entry at Sr No 3(vi) is omitted. The supply of services made by appellant to the BSNL is fulfilling all the requirements and conditions of the entry at serial number 3 clause (vi)s(a). Appellant has specifically mentioned (in his AAAR application at para 1.15) the period of application as a 1.4.2019 to 31.12.2021. As per provision of section 103, advanced ruling pronounced shall be binding on the applicant and the jurisdictional officer, if it is not assailed by filling against it. Hence, there is binding effect of the first order of advance ruling till 31st March, 2019. which classified the said supply under entry No 3(ii) taxable at 18%. Income Tax 2023 (2) TMI 766 Increase in loan liability due to fluctuation in foreign exchange rates - Investment allowance additionally claimed with regard to the additional cost which arose on account of fluctuation in the foreign currency exchange rate - investment allowance on the additional cost in the year of acquisition - actual cost of the ship from the foreign country and the assessee was entitled to invest allowance on the additional cost in the year of acquisition - HELD THAT:- As per section 43A of the Act as it stood during the relevant assessment year up to the assessment year 2003-03, the adjustment on account of foreign currency rate fluctuation was to be made in the year in which the foreign exchange fluctuation took place. By virtue of Finance Act, 2002, with effect from assessment year 2003-04, such adjustment is to be made in the year in which the liability in foreign exchange is discharged. In view of GUJARAT STATE FERTILIZERS CO. LTD. [ 2002 (10) TMI 79 - GUJARAT HIGH COURT] it is well-settled that when the asset was purchased at a price, liability was to be discharged in instalments, it cannot be stated that the liability did not exist or accrue till the instalments became due and payable. It is this liability which changes on account of fluctuation in the rate of exchange. In the Backdrop of the provisions of section 32A read with section 43A, and in view of the judgments referred hereinabove, we answer the questions of law in favour of the appellant and against the revenue. We hold that in terms of section 43A, the increase or reduction in the liability has to take place only in the year of fluctuation and it does not relate back to the year of acquisition of the asset. 2023 (2) TMI 765 Penalty u/s 271B - non-furnishing of TAR within the prescribed time limit u/s 44AB r.w.s. 139(1) - Scope of reasonable cause - Whether reasons advanced by the appellant are good reasonable to take shelter u/s 273B of the Act? - HELD THAT:- It is well settled law that, section 273B states notwithstanding anything contained in section 271B, no penalty shall be imposed on the assessee for failure to comply with the provisions of section 44AB if the assessee proves that there was a reasonable cause for the said failure. Therefore, the liability to levy penalty can be fastened only on only on the assessee who does not have a reasonable cause against the noncompliance of mandate. The burden, of course, is on the assessee to prove such reasonable cause with evidential documents so has to take shield against the levy of penalty. Delayed compliance with the mandates of section 44AB of the Act, we have noted all the reasons furthered by the appellant during assessment and appellate proceedings and find them reasonable and convincing for the purpose of section 273B so has to hold the imposition of penalty as unjustified in the light of Hindustan Steel Ltd. Vs State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] - thus direct the Ld. AO to delete the penalty - Decided in favour of assessee. 2023 (2) TMI 764 Exemption u/s 10(23C)(iiiad) - assessment of trust - as per revenue assessee has not fulfilled the requirements of Section 10(23C)(iiiad) - as submitted assessee is existing solely for educational purposes and not for purpose of profit and its annual receipts during the year is less than Rs. 1 crore - HELD THAT:- As the assessee has surplus approximately 53.65% of receipts for the purpose of future application which was accumulated in order to set up schools and educational institutions after applying 38% of the gross receipt in running and maintenance of the educational institution. Provisions of Section 10(23C)(iiiad) are applicable and consequently the income of the institution is exempt as the assessee trust has satisfied all the conditions as prescribed under the provisions of Section 10(23C)(iiiad) of the Act. Besides there is no allegation by the CIT(E) that the assessee is involved in any other activity for profit and not for educational purposes. Accordingly we set aside the order of Ld. CIT(E) and allow the appeal of the assessee. 2023 (2) TMI 763 Addition of interest - assessee had granted interest free loan to subsidiaries - Since the assessee was paying interest @ 14% to the loans availed from the banks, AO charged the interest @ 14% on the interest free loans granted to its subsidiaries and disallowed the interest expenses - HELD THAT:- CIT(A) has observed that borrowed funds and own funds were kept in common kitty and therefore, it cannot be said that the interest free advances were only out of own funds. Claim of the assessee before the authorities below is that the assessee had granted interest free loans to its subsidiaries out of its own fund and borrowed funds were utilized for acquiring capital assets. It is not in dispute that the interest free funds available to the assessee were sufficient to meet its investment and thus, it could be presumed that the investments were made from the interest free funds available with the assessee. Our view is duly fortified by Reliance Industries Ltd. [ 2019 (1) TMI 757 - SUPREME COURT] , wherein, similar findings of the Tribunal were duly affirmed by the higher Courts. Under the above facts and circumstances, the addition made towards disallowance of interest stands deleted. Appeal filed by the assessee is allowed. 2023 (2) TMI 762 Estimation of net profit rate - Rejection of books of accounts - HELD THAT:- Merely holding the comparable company in similar line of business is only the first step in undertaking a benchmarking analysis. The analysis also needs to consider various other factors and take into consideration functions, risks, and assets employed which apparently has not been undertaken in the instant case and the assessee has also not been confronted with the same. In view of the same, we find that comparing the results of the assessee with an external comparable is not justifiable in the instant case. Results which are on declining scale are declared on reduced turnover over the past and subsequent years which have been accepted by the Revenue and thus lend credence to the assessee's submission that its profitability has been effected due to reduced turnover without commensurate reduction in fixed costs. No justifiable basis has been stated by the ld. CIT(A) while estimating the net profit rate at the rate of 15% which is again arbitrary and no linkage with any material or past history of the assessee. No justifiable basis to disturb the declared results by the assessee even where the books of accounts have been rejected and the addition so made by estimating the net profit rate at the rate of 40% and sustenance thereof by the ld. CIT(A) at 15% is hereby directed to be deleted. Ground of the assessee's appeal is allowed. 2023 (2) TMI 761 Unexplained gold jewellery and ornament - Search proceedings - CIT(A) allowed the rebate of gold jewellery as per CBDT Instruction No.1916 dated 11.05.1994 - CIT(A) allowed the relief of 950 grams and balance, he held to be unexplained and deleted the making charges added by AO @ 5% - HELD THAT:- As noticed that the assessees have purchased this gold through banking channels or through accounting entries, this needs verification. Hence, all these three appeals are remanded back to the file of the AO and orders of AO as well as the CIT(A) restricting the addition are set aside. Assessees will file all these details before AO, who will verify and examine in detail the source of jewellery as well as explanation. In term of the above, all the three appeals are allowed for statistical purposes. 2023 (2) TMI 760 TP Adjustment - adjustment on account of excessive AMP expenditure - HELD THAT:- Tribunal in assessee s own case for the AYs 2013-14 2014-15 [ 2022 (11) TMI 1321 - ITAT BANGALORE] directed the Ld.AO/TPO to delete the addition made towards AMP e xpenses. Adjustment in respect of IT support services - comparable selection - HELD THAT:- The Tribunal in the case of Autodesk India Pvt. Ltd. [ 2018 (7) TMI 1862 - ITAT BANGALORE] took note of all the conflicting decision on the issue and rendered its decision to held as that high turnover is a ground for excluding companies as not comparable with a company that has low turnover - thus we hold that companies listed whose turnover in the current year is more than Rs.200 Crores should be excluded from the list of comparable companies. Inteq Software Pvt. Ltd and Infobeans Technologies Ltd., be excluded from the list of comparables. See Finastra Software Solutions [ 2022 (11) TMI 1320 - ITAT BANGALORE] Disallowance of seminars, conventions and sales promotion expenses - MCI Regulations applicable on pharmaceutical companies or not? - HELD THAT:- AO had primarily made disallowance by referring the CBDT Circular No.5/2012 dated 01.08.2012. In the larger interest of justice, in view of the latest judgment of M/s. Apex Laboratories Pvt. Ltd. [ 2022 (2) TMI 1114 - SUPREME COURT] which has examined the very same issue, it becomes necessary to examine the exact nature of expenses incurred by the assessee for Doctors from all angles. Therefore, for substantial question and cause, necessarily, the matter needs fresh verification by the A.O., especially in the light of the recent judgment of M/s. Apex Laboratories Pvt. Ltd. v. DCIT (supra) - the issues is remitted back to the AO to examine the details submitted in the light of the decision of the Apex Court after giving an opportunity of being heard to the assessee. It is ordered accordingly. Appeal by the assessee is partly allowed. 2023 (2) TMI 757 Reopening of assessment u/s 147 - default servicing notice - notice served on the secondary email id registered with PAN instead of the registered primary email id or updated email id filed with the last Return of Income - HELD THAT:- AO clearly erred in issuing a notice on the secondary email address when there was a primary email address given by the petitioner. It is common knowledge that a secondary email address has to be used as an alternative or in such circumstances when the authority is unable to effect service of any communication on the primary address. There is no prudence in issuing an email on the secondary email address. AO ought to have sent the notice u/s 148 to both the primary address and the email address mentioned in the last Return of Income filed to preempt a jurisdictional error on account of valid service; there was neither any cost to it or any prejudice to any party for sending it on more than one email in a given circumstance as in the present case. We see no wrong with the petitioner s refusal to participate in a proceeding vitiated by valid service of notice. This Court in the case of Mrs. Chitra Supekar [ 2023 (2) TMI 655 - BOMBAY HIGH COURT] has held that it was imperative for the AO to have checked if there was a change of address before initiating a proceeding; and that a valid service of notice u/s 48 is a condition precedent lest it would be a jurisdictional error. We accordingly quash and set aside the notice and all consequential proceedings including the show cause notice for proposed variation and assessment order u/s 144B r.w s.144. Decided in favour of assessee. 2023 (2) TMI 756 Reopening of assessment u/s 147 - information in case of the petitioner was flagged on Insight Portal in accordance with the Risk Management Strategy formulated by the CBDT - non disposal of objections - HELD THAT:- It is a clear violation of the requirement of principles of natural justice and also the statutory requirement under the law. The information which is furnished to the petitioner a name of a person if it can be mentioned in the order disposing of the objection categorically, there is no reason as to why the same would not have been supplied to the petitioner assessee if the said action was the result of the recorded statement and thereafter issued notice on finding a nexus between these two, the least which could be done at the end of the furnished requisite details for necessary to meet with the allegation and presents its case appropriately. In absence of basic details of the name of the persons with whom the petitioner is said to have made unexplained transaction, how is it expected to reply to the same by cropping in dark. Resultantly, we appreciate the fairness of learned advocate not stretching the case beyond the point, and also endorsing clearly that a name of the person with whom the alleged dealing was of issuance of notice had not been disclosed any information supplied to the petitioner. Resultantly, the petition is allowed by quashing and setting aside the order passed u/s 148A(d), notice issued u/s 148A(b) as well as consequential notice issued u/s 148 by respondent No.1 and consequential proceedings pursuant thereto. Let the process be undertaken stage-by-stage from where the stage was left. 2023 (2) TMI 755 Unsecured loan u/s 68 - Assessee did not produce the 200 odd farmers from whom the Assessee had borrowed an unsecured loan - Before the ITAT, it was the second round of litigation - direction issued by the ITAT in the first round was to the effect that the AO should verify whether the Assessee had repaid the amount by calling all the creditors - Appellant seeks to contend that in terms of the direction issued by the ITAT, it is the AO who should have issued summons to the farmers in question to verify the facts - HELD THAT:- As submitted that it is the AO who should have issued summons to them to appear. Even assuming that the AO did not do so, the fact remains that the Assessee did not ask for summons to be issued and the Assessee did not produce any fresh affidavits of the lender farmers to confirm that their loans to the Assessee had been repaid to them. The Assessee could have easily done this to satisfy the requirement of the directions of the ITAT in remand. In the present case, factually the ITAT has found the addition to be justified and going by ratio of the aforementioned decision, this Court should not interfere with such factual determination by the ITAT. No substantial question of law arising from the impugned order of the ITAT. The appeal is accordingly dismissed. 2023 (2) TMI 754 Reopening of assessment u/s 147 - denial of prnciple of natural justice - non providing of information as relied upon - whether any information which is sought to have obtained from the INSIGHT have been furnished to the petitioner? - HELD THAT:- As information which had resulted into initiating the actions, have not been furnished. This being a basic requirement u/s148A where the Assessing Officer before issuance of any notice u/s 148 is firstly to conduct an inquiry and if required, with the prior approval of the specified authority with respect to the information which suggest that the income chargeable to tax has escaped the assessment and sub-clause (b) of Section 148 provides for an opportunity of being heard to the assessee by serving upon him a notice to show cause within such time as may be specified in the notice being not less than seven days, but, not exceeding 30 days from the date on which such notice is issued or such time as may be extended by him on the basis of the application. Non-providing of the information which is the edifice for issuance of notice would surely amount to not providing an opportunity to the petitioner. As at the time of its response to the notice under Section 148A(b), the attention of the authority concerned had been drawn to the fact that those information are missing which would result into the petitioner not being in a position to respond effectively to the allegations of the alleged bogus purchases to the tune of Rs. 69.61 crores (rounded off). This being the case, in our opinion, the petitioner has been able to make out a breach of principle of natural justice resulting into this Court not waiting for the alternative remedy also to come in the way in denying the relief to the petitioner. Resultantly, interference is required at this stage quashing and setting aside the order u/s 148A(d) by directing the authority concerned to furnish the information within seven days of the receipt of copy of this order. 2023 (2) TMI 753 Mismatch of credit of TDS due to non-payment of TDS - benefit of tax deducted at source by the employer - Petitioner is a pilot by profession as an employee of Kingfisher Airlines has deducted the TDS from his salary but such amount had not been deposited by the Airlines to the Central Government s account - HELD THAT:- As in case of Kartik Vijaysingh Sonavane [ 2021 (11) TMI 682 - GUJARAT HIGH COURT] wherein similarly situated assessee, the Court allowed the petition, directed the department not to deny the benefit of tax deducted at source by the employer during the relevant financial year. Reference of Section 205 of the I.T. Act is to the effect where it provides that the tax when is deductible at source, assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted form that income. Its applicability is not dependent upon the credit for tax deducted being given under Section 199 of the I.T. Act. Facts being identical, petition is allowed. The department shall not be denying the benefit of tax deducted at source by the employer during the relevant financial years to the petitioner. The credit of the tax shall be given to the petitioner and if in the interregnum, any recovery or adjustment is made by the department, the petitioner shall be entitled to the refund, with the statutory interest, within eight (08) weeks from the date of receipt of copy of this order. 2023 (2) TMI 752 Reopening of assessment u/s 147 - reopening on different item of income - assessment was reopened alleging that loan availed is non-genuine, hence, has escaped assessment - addition of cash deposited in the account held with ICICI bank by treating it as unexplained - HELD THAT:- It is fairly well settled that while making assessment u/s 147 Assessing Officer has power to make addition of any other item of income which comes to his notice in course of the assessment proceedings along with the item of income for which assessment was reopened. Without making addition of the escaped income, no other addition can be made. Whereas, in the facts of the present appeal, the Assessing Officer without making addition of the loan availed for escapement of which the assessment was reopened has added a completely different item of income, being cash deposited in the bank account. Therefore, the addition made is unsustainable. Accordingly, direct the Assessing Officer to delete the addition. Appeal of assessee allowed. 2023 (2) TMI 751 Revision u/s 263 by CIT - deduction us 80P(2) - HELD THAT:- This tribunal in the case of Sardar patel Co-operative Credit Society ( 2022 (6) TMI 843 - ITAT AHMEDABAD] involving the identical facts and circumstances has decided the issue in favour of the assessee. No material has been placed on record by the Revenue to demonstrate that the decision of Tribunal as discussed above has been set aside/stayed or overruled by the higher Judicial Authorities. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the case for the year under consideration and that of case referred above nor has placed any contrary binding decision in its support. Thus, we hold that the order framed under section 263 of the Act is unsustainable. Hence, the ground of appeal of the assessee is allowed. 2023 (2) TMI 750 Reopening of assessment u/s 147 - assessee had entered into cash transactions exceeding Rs.10,00,000 in a month, resulting in escapement of income - HELD THAT:- A reading of the reasons recorded would show that the AO on the basis of information down loaded from the system of the department found that in the year under consideration, assessee had entered into cash transaction exceeding Rs.10,00,000 in a month. AO has not elaborated in the reasons recorded, what is the nature of information received and what is the nature of cash transaction, whether, deposits in any bank account, cash purchases, cash receipts etc. As in the reasons recorded, AO has referred to three different assessment years in three paragraphs. While, in paragraph 1, he has referred to assessment year 2011-12, in paragraph 2, he has referred to assessment year 2010- 11 and finally in paragraph 3, he has formed a belief that income of Rs.10,00,000 chargeable to tax has escaped assessment for assessment year 2008-09. Thus, the reasons recorded make it amply clear that AO has acted mechanically and without application of mind to the facts and material on record. Such lackadaisical approach for reopening of assessment u/s 147 cannot be condoned. For this reason alone, the reopening of assessment u/s 147 has to be declared invalid as there is no nexus between the information available with the Assessing Officer and formation of belief. Appeal of assessee allowed. 2023 (2) TMI 749 Disallowance of deduction u/s. 80P - adjustment while processing the return u/s. 143(1) - return was not filed within due date prescribed u/s. 139(1) - whether once the Return of Income is filed beyond the prescribed date u/s. 139(1) of the Act, can the deduction u/s. 80P of the Act be denied to the assessee, by way of adjustment u/s. 143(1)? - HELD THAT:- Section 143(1)(a)(v) of the Act provides that disallowance of deduction claimed under any of the provisions of Chapter VI-A under the heading C- Deductions in respect of certain incomes (which includes deduction under section 80P of the Act), can be made if the Return is filed beyond the due date specified under sub-section (1) of Section 139. This amendment has been introduced w.e.f. 01.04.2021 and does not apply to the impugned assessment year involved herein namely Assessment Year 2019-20. Accordingly in our considered view denial of claim of deduction u/s. 80P of the Act would not come within the purview of prima facie adjustment under section 143(1)(a)(v) of the Act. Thus the case laws relied by the Ld. CIT(A) in its order is clearly distinguishable to the facts of the present case and the same are not applicable. CPC Centre is not correct in denying the claim of deduction u/s. 80P of the Act to the assessee under 143(1)(a)(v) proceedings for this Assessment Year 2019-10. Hence the intimation made by the CPC Centre and tax demand raised thereon are hereby quashed. Thus the grounds raised by the assessee are hereby allowed. 2023 (2) TMI 748 Penalty u/s 271A - estimation of income - default of not maintaining the books of accounts by the assessee - As contended that the assessee is not required to maintain the books of accounts u/s 44AA as the turnover of the assessee as well as income from business was not more than the minimum limit provided under the said provision - HELD THAT:- When the assessee has claimed the agriculture income and business income assessee was under bona fide belief that he was not required to maintain the books of accounts as per the provisions of section 44AA(2)(i) - Only in consequence of the assessment order, the business income of the assessee was assessed at Rs. 4,59,800/- instead of agriculture income claimed by the assessee would not ipso facto lead to the conclusion that the assessee was very well aware about the requirement of keeping and maintaining the books of accounts. Accordingly, when the very basis of levying the penalty by the ACIT is contrary to the assessment framed by the AO and even business income of the assessee prior to the assessment order was not above the limit prescribed u/s 44AA(2)(i) for keeping and maintaining the books of accounts then the case falls in the ambit of reasonable cause for the said failure as provided under section 273B of the Income Tax Act. Hence, the penalty levied by the ACIT u/s 271A is deleted. - Decided in favour of assessee. 2023 (2) TMI 747 Change of name of the assessee company in Form No.36 - Defective appeal - HELD THAT:- At the first sight, it is transpired from the records that the name of assessee is mentioned as Lal Mahal Ltd. in Form No.36. However, as per letter dated 07.09.2022, the company is now known as Nutrionex Manufactures Ltd. . Thus, there is change of name/entity of assessee. No step has been taken to amend/rectify the name of the assessee company in Form No.36. Under these facts, the appeal of the assessee being defective hence, dismissed. 2023 (2) TMI 746 TCS on sale in terms of section 206C - trading of non-ferrous metal scrap - failure to submit the form 27C within the time prescribed - assessee contended that assessee was not liable to collect TCS for the reason that the items sold by the assessee was not scrap within the definition of clause (b) of Explanation to section 206C - HELD THAT:- We observe that in the case of GK traders [ 2022 (7) TMI 1380 - ITAT RAJKOT] has held that where assessee-company sold scrap to various companies and failed to submit a statement in Form 27C comprising of buyer's declaration to prescribed authority in time, since there was no limit provided in section 206C to make a declaration in Form 27C collected from buyers, delay in filing same would not be ground to deny benefit to assessee-company. As in the case of CIT (TDS) vs Siyaram Metal Udyog (P.) Ltd [ 2016 (7) TMI 68 - GUJARAT HIGH COURT] has held that no time limit is provided in section 206C(1A) to make a declaration in Form 27C collected from buyers; mere minor delay in furnishing Form 27C would not make assessee liable for non-collection of TCS. Thus since the assessee had furnished Form 27C before CIT (TDS)-Jamnagar, though belatedly and had also sought to place the same on record during the course of TCS proceedings before the ITO (TDS), the same should have been considered by him at the time of passing of order. Accordingly, in the interests of justice, the matter is being restored to the file of ITO (TDS) take into consideration Form 27C furnished by the assessee and pass order in accordance with law. Accordingly, the appeal of the assessee is allowed for statistical purposes. 2023 (2) TMI 745 Reopening of assessment u/s 147 - case reopened beyond the period of 4 years from the end of the relevant assessment year - Reason to believe - HELD THAT:- Primary duty of the assessee is only to disclose fully and truly all material facts necessary for the purpose of making the assessment and not draw the inferences. Thus, it cannot be said that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of making the assessment. Reliance in this regard can be placed on the decision of the Hon ble Bombay High Court in the case of Kalpataru Ltd. [ 2021 (10) TMI 465 - BOMBAY HIGH COURT] - Thus, we are of the considered opinion that there is no satisfaction of the proviso to section 147 and the AO was not entitled to reopen the assessment. Even otherwise, it is admitted that the basis of reopening the assessment for the assessment years 2010-11 and 2011-12, wherein, similar addition was made by AO which came to be deleted by the Tribunal vide order [ 2021 (10) TMI 1204 - ITAT PUNE] - It is also admitted fact that the decision of this Tribunal (supra) was not challenged by the Department before the Hon ble High Court. Thus, the issue had attained finality. Therefore, the very basis of the re-assessment proceedings does not stand, as once the foundation is removed, the superstructure falls (sublato fundmento credit opus). We are of the considered opinion that the AO was not justified in initiating reassessment proceedings and the orders passed by the lower authorities are hereby reversed. - Decided in favour of assessee. 2023 (2) TMI 744 Disallowance us 43B OR 40A - Provision for Gratuity - disallowance of expenditure indicated in the tax audit report but not taken into account in computing the total income in the return of income - Appellant submits that it has already made disallowance of Provision of Gratuity inadvertently u/s 40A(7) as against us 43B thus disallowance made by the AO would amount to double disallowance and same shall be deleted - HELD THAT:- We are of the considered opinion that this issue be remanded to the jurisdictional Assessing Officer for de novo adjudication after necessary verification/examination of all the details. If upon verification, it is found that the amount has already been disallowed on account of the provision for gratuity under section 40A(7) of the Act then to that extent the disallowance under section 43B of the Act be deleted, otherwise the same will result in double disallowance of the same amount. Similarly, as regards the sum it is found that the amount has been paid by the assessee during the year then relief be granted to the assessee as per law. Needless to mention that no order shall be passed without affording reasonable opportunity of being heard to the assessee. As a result, the grounds raised by the assessee are allowed for statistical purposes. 2023 (2) TMI 743 Revision u/s 263 - Amount received which according to the CIT remained unverified as the said party has failed to respond to the notice received u/s 133(6) - HELD THAT:- The Hon ble Supreme Court in the case of Malabar Industries Co. Ltd [ 2000 (2) TMI 10 - SUPREME COURT] has held that where AO has adopted one of the courses permissible in law and which has resulted in loss to the revenue; or where two views are possible and the AO has taken one view with which the Commissioner does not agree, then the assessment cannot be treated as erroneous insofar as it is prejudicial to the interest of the revenue, unless the view taken by the Assessing Officer is not sustainable in law. Also in the case of Max India Ltd. [ 2007 (11) TMI 12 - SUPREME COURT] as held that when the AO has adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the AO has taken one view with which the Commissioner does not agree, the assessment order cannot be treated as erroneous order prejudicial to the interest of the revenue, unless the view taken by the Assessing Officer is unsustainable in law. In the case of Gabriel India Ltd. [ 1993 (4) TMI 55 - BOMBAY HIGH COURT] as held that, the ld. Pr. CIT cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Thus we hold that the revisionary jurisdiction was invalidly invoked by the ld Pr CIT and consequently quash the order passed u/s 263 of the Act. The appeal of the assessee is allowed. 2023 (2) TMI 742 Addition u/s 68 - bogus share capital including share premium raised by the assessee - HELD THAT:- There is no discussion on the nature of evidence, who are the share applicants, what was their financial health etc.The assessee did not file statement of facts either before the CIT(A) or before the ITAT. It has not file any confirmation from the share applicants, their financial health or any evidence demonstrating their identity or creditworthiness. The assessee has not filed its own financial status which can demonstrate whether it can command a premium on the shares - Thus, the assesse company evidently does not have any specific business. It has filed a loss return of Rs.9,171/-. We are convince that it is a paper company devoid of any business. Hence, Revenue authorities have rightly held the alleged share application money as bogus and rightly made the addition. We do not find any error in the order of the ld. Revenue authorities. Accordingly, appeal of the assessee is dismissed. Customs 2023 (2) TMI 741 Valuation of imported goods - Non-calcined petroleum coke - rejection of declared value - case of the department is that due to similarity in various factors, the import price of BGH Exim Limited needs to be followed and the price declared by the appellant should be rejected. Whether the value declared by the appellant in respect of import of Non-calcined petroleum coke as Rs. 2871.15 is correct or price of comparable import made by BGH Exim Limited @ Indian Rs. 3701.20 is correct? - whether the enhancement of value should be made taking the price of comparable imports? HELD THAT:- The learned Commissioner (Appeals) has considered the entire issue in detail not only on the facts but also on the law point. There is an important difference between the facts of the present import and the import made by BGH Exim Limited in which there is only one consignment whereas in the respondent s case the contract was for a quantity of minimum 8 lakh Tonnes Per Annum for the period of 5 years and the respondent had imported 89249 MT of Non-calcined petroleum coke compared to the import quantity of 9400 MT of M/s BGH Exim Limited. On this difference itself, it can be construed that when there is a long term contract for lifting of a minimum 8 Lakh Tonnes Per Annum, obviously there will be substantial discount in the price. On this basis, it cannot be said that the comparable price of BGH Exim Limited should be taken for assessment of import of the appellant. It is observed that the learned Commissioner (Appeals) has examined each and every aspect of the case and came to the conclusion that there is a vast difference between the nature of supplies made by BGH Exim Limited and the appellant in as much as there is a long term contract of the appellant with the suppliers and for the huge quantity of 9000 MT Per Annum. There is no infirmity in the findings of the impugned order - Appeal of Revenue dismissed. 2023 (2) TMI 740 100% EOU - SION - Benefit of exemption - Extended period of limitation - Waiver of penalty levied u/s 117 of the Customs Act, 1962 - reduction in the quantum of penalties imposed under section 112(a) of the Act - It appeared to the revenue that the appellant used or consumed steel grits/ gangs saw blades at a rate higher than the Standard Input Output Norms [SION] - liability to pay duty on the steel grits and saw blades consumed in excess of the SION - CENVAT Credit on additional duties of customs. Whether the appellant is liable to pay duty on the steel grits and saw blades consumed in excess of the SION? - HELD THAT:- Undisputedly, the exemption Notification 22/2003-CUS, as applicable during the relevant period, was subject to various conditions including the condition that the appellant shall use consumables as per the SION norms. It is also undisputed that SION A1833 was applicable to the goods in question. Therefore, the quantity of grits and saw blades which the appellant could have used for manufacture of granite slabs for exports has to be, as per the SION prescribed for the purpose. If it exceeds these norms to the extent they are consumed in excess, they contravene the condition of the Notification. The appellant had executed a bond before the Assistant Commissioner at the time of import, undertaking to pay the duty along with interest if all the conditions are not fulfilled. The steel grits and gang of blades in dispute are consumables in this case and are neither capital goods nor inputs. The appellant claimed the benefit of the exemption Notification No. 52/2003 which must be strictly interpreted because it is available subject to some conditions which will be applicable to all those who claim its benefit. The appellant cannot claim any special waiver from these conditions. One of the conditions is that the appellant gives a bond or legal undertaking to pay the duty along with interest, if any, condition is violated. It needs to be pointed out that in exemption Notifications there may be conditions which must be fulfilled prior to the clearance of the goods and conditions which must be fulfilled after their clearance. In this case the standard input output norm (SION) have to be calculated as 5% of the FOB value of exports. The fulfilment of this condition can, therefore, be ascertained only after the exports have been made. There are no force in the submissions made by learned counsel for the appellant that the demand is time barred because the course of action arose only after the appellant completed its export and the value of such exports was known. The appellant should have, on own its own, paid the duty in fulfilment of its obligation under the bond or under undertaking but has failed to do so and, therefore, the show cause notice was issued in terms of section 28 read with the bond and legal undertaking - the appellant is, therefore, liable to pay the duty. Consequently, the appellant is also liable to pay interest as applicable under section 28AB of the Act. Imposition of penalty under section 112 - HELD THAT:- While the show cause notice proposed that the imported goods were liable for confiscation under section 111(o), the Order-in-Original as well as the impugned order have not held that the imported goods were liable for confiscation - the confiscation or liability of confiscation of the goods under section 111 is a necessary pre-condition for imposition of penalty under section 112 (a). Since there was no order of confiscation of the goods in the order, no penalty could have been imposed under section 112. The penalty under section 112 needs to be set aside. It is contended that if it had paid the customs duty it would have been entitled to CENVAT credit to the extent of additional duty of customs - HELD THAT:- Availability of CENVAT Credit does not take away the taxability. Otherwise, no manufacturer ever has to pay additional duty of customs because he would eligible for CENVAT credit of the amount so paid but such is not the scheme of the law. If appellant is entitled to take CENVAT credit as per the CENVAT Credit Rules, it may take such credit. Calculation of duty was done wrongly as it had to be done reckoning a three year period - HELD THAT:- It is found fit to remit the matter to the original authority for the limited purpose of calculating the amount of duty payable as per the SION norms read with the DGFT Circular No. 10-2009/14 dated 12.10.2009. The penalties imposed under section 112(a) are set aside - The confirmation of duty and interest in the impugned order is upheld and the matter is remanded to the original authority for the limited purpose as calculation of the duty in terms of DGFT Circular read with SION norms - appeal disposed off. 2023 (2) TMI 739 Refund claim - rejection on the ground of unjust enrichment - Revenue contended that the learned Commissioner (Appeals) merely followed the order of Mundra Custom, however he has not independently examined the aspect of unjust enrichment - HELD THAT:- The learned Commissioner (Appeals) simply followed the order of Mundra (Custom) and no independent finding was given as regard the unjust enrichment. Despite that the Revenue has raised the ground of unjust enrichment in their appeal. As regard, the issue of unjust enrichment, it is purely based on the fact on the basis and the same can be established on the basis of books of accounts along with CA Certificate. The issue of unjust enrichment depends on fact of each case, however, the learned Commissioner (Appeals) except following the order of Mundra (Customs), neither examined the fact of unjust enrichment of the present case, nor given any independent finding. Therefore, the matter related to issue of unjust enrichment needs to be reconsidered by the learned Commissioner (Appeals). Accordingly, the impugned order is set aside and matter remanded to the learned Commissioner (Appeals) only for the purpose of examining the issue of unjust enrichment on the basis of records such as CA Certificate, books of accounts etc. Appeal allowed by way of remand. 2023 (2) TMI 738 Levy of penalty u/s 114(iii) and Section 114AA of the Customs Act, 1962 - freight forwarder - fraudulent availment of Special Focus Market Scheme (SFMS) benefits, by producing forged House BL and landing certificate, wherein consignee country was deliberately mis-declared by them for the purpose of availing undue benefit under SFMS - HELD THAT:- The Commissioner (Appeals) in para 16.2 of the impugned order has observed, in respect of the order of the Settlement Commission. Undisputedly there is no denial vis- -vis the role of the appellant in the acts undertaken leading to loss of revenue. However, taking note of the fact that the appellant is not the actual beneficiary but is only the freight forwarder arranging for container, taking the consignment to shipping lines etc. as per the directions of Shri Ramesh Singh, it is found that the penalty imposed on the appellant is excessive. The interest of justice will be met if the penalties are reduced to Rs.2.5 lakhs under Section 114(iii) and Rs.2.5 lakhs under Section 114AA of the Customs Act, 1962. Appeal disposed off. Corporate Laws 2023 (2) TMI 770 Winding up of company - Sections 271 and 272 of the Companies Act, 2013 - HELD THAT:- On going through the pleadings made on behalf of the parties and also the Judgment passed by Hon ble three Member Bench of this Tribunal in the case of REGISTRAR OF COMPANIES NCT DELHI AND HARYANA VERSUS APOORVA LEASING FINANCE INVESTMENT CO LTD, UNION OF INDIA, THROUGH THE SECRETARY, MINISTRY OF CORPORATE AFFAIRS, NEW DELHI [ 2019 (12) TMI 1634 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] which has attained finality as the Civil Appeal has also been dismissed by the Hon ble Supreme Court in UNION OF INDIA VERSUS APOORVA LEASING FINANCE AND INVESTMENT CO LTD AND ANOTHER [ 2021 (1) TMI 1293 - SC ORDER ], it is found that facts of the instant Appeal are same and identical to the case which was dismissed by this Appellate Tribunal vide in the case of Registrar of Companies Vs. Apoorva Leasing Finance Investment Company Limited and Another . Supreme Court held that it only needs to be clarified that the order of the NCLAT, which had come to the conclusion that there was a violation of the principles of natural justice in adhering to the provisions of Section 272(4) of the Companies Act 2013, will not come in the way of the appellant taking recourse to the remedies available in law after following due process. There is no merit in the Appeal, the instant Appeal is hereby dismissed. 2023 (2) TMI 769 Winding up of company - Sections 271 and 272 of the Companies Act, 2013 - HELD THAT:- On going through the pleadings made on behalf of the parties and also the Judgment passed by Hon ble three Member Bench of this Tribunal in the case of REGISTRAR OF COMPANIES NCT DELHI AND HARYANA VERSUS APOORVA LEASING FINANCE INVESTMENT CO LTD, UNION OF INDIA, THROUGH THE SECRETARY, MINISTRY OF CORPORATE AFFAIRS, NEW DELHI [ 2019 (12) TMI 1634 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] which has attained finality as the Civil Appeal has also been dismissed by the Hon ble Supreme Court in UNION OF INDIA VERSUS APOORVA LEASING FINANCE AND INVESTMENT CO LTD AND ANOTHER [ 2021 (1) TMI 1293 - SC ORDER ], it is found that facts of the instant Appeal are same and identical to the case which was dismissed by this Appellate Tribunal vide in the case of Registrar of Companies Vs. Apoorva Leasing Finance Investment Company Limited and Another . Supreme Court held that it only needs to be clarified that the order of the NCLAT, which had come to the conclusion that there was a violation of the principles of natural justice in adhering to the provisions of Section 272(4) of the Companies Act 2013, will not come in the way of the appellant taking recourse to the remedies available in law after following due process. There is no merit in the Appeal, the instant Appeal is hereby dismissed. 2023 (2) TMI 768 Winding up of company - Sections 271 and 272 of the Companies Act, 2013 - HELD THAT:- On going through the pleadings made on behalf of the parties and also the Judgment passed by Hon ble three Member Bench of this Tribunal in the case of REGISTRAR OF COMPANIES NCT DELHI AND HARYANA VERSUS APOORVA LEASING FINANCE INVESTMENT CO LTD, UNION OF INDIA, THROUGH THE SECRETARY, MINISTRY OF CORPORATE AFFAIRS, NEW DELHI [ 2019 (12) TMI 1634 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] which has attained finality as the Civil Appeal has also been dismissed by the Hon ble Supreme Court in UNION OF INDIA VERSUS APOORVA LEASING FINANCE AND INVESTMENT CO LTD AND ANOTHER [ 2021 (1) TMI 1293 - SC ORDER ], it is found that facts of the instant Appeal are same and identical to the case which was dismissed by this Appellate Tribunal vide in the case of Registrar of Companies Vs. Apoorva Leasing Finance Investment Company Limited and Another . Supreme Court held that it only needs to be clarified that the order of the NCLAT, which had come to the conclusion that there was a violation of the principles of natural justice in adhering to the provisions of Section 272(4) of the Companies Act 2013, will not come in the way of the appellant taking recourse to the remedies available in law after following due process. There is no merit in the Appeal, the instant Appeal is hereby dismissed. 2023 (2) TMI 767 Winding up of company - Sections 271 and 272 of the Companies Act, 2013 - HELD THAT:- On going through the pleadings made on behalf of the parties and also the Judgment passed by Hon ble three Member Bench of this Tribunal in the case of REGISTRAR OF COMPANIES NCT DELHI AND HARYANA VERSUS APOORVA LEASING FINANCE INVESTMENT CO LTD, UNION OF INDIA, THROUGH THE SECRETARY, MINISTRY OF CORPORATE AFFAIRS, NEW DELHI [ 2019 (12) TMI 1634 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] which has attained finality as the Civil Appeal has also been dismissed by the Hon ble Supreme Court in UNION OF INDIA VERSUS APOORVA LEASING FINANCE AND INVESTMENT CO LTD AND ANOTHER [ 2021 (1) TMI 1293 - SC ORDER ], it is found that facts of the instant Appeal are same and identical to the case which was dismissed by this Appellate Tribunal vide in the case of Registrar of Companies Vs. Apoorva Leasing Finance Investment Company Limited and Another . Supreme Court held that it only needs to be clarified that the order of the NCLAT, which had come to the conclusion that there was a violation of the principles of natural justice in adhering to the provisions of Section 272(4) of the Companies Act 2013, will not come in the way of the appellant taking recourse to the remedies available in law after following due process. There is no merit in the Appeal, the instant Appeal is hereby dismissed. 2023 (2) TMI 737 Appointment of arbitrator - the submission is, the appointment of Mr. AJ as sole Arbitrator is against the ethos and spirit of the Act and the continuation of the proceedings by him is bad in law and therefore, this Court shall terminate his mandate and stay the ongoing arbitration proceedings. HELD THAT:- The petitioner never raised a challenge as contemplated u/s.13 of the Arbitration and Conciliation Act, but he requested the arbitrator to keep the proceedings in abeyance as he has already instituted the proceedings, seeking termination of his mandate u/s.14 of the Act. The Arbitrator has rightly taken note of this disharmony and conferred a liberty upon the petitioner to file an application u/s.12 r/w Section 13, if at all he wanted to challenge his appointment. In the peculiar situation, where the objection raised by the petitioner deserve any consideration, is no more res-integra as it has been put to rest in case of SHEETAL MARUTI KURUNDWADE VERSUS METAL POWER ANALYTICAL (I) PVT LTD. AND ORS. [ 2017 (3) TMI 1911 - BOMBAY HIGH COURT] , where the position for counsel is highlighted which states that no arbitrator should be involved in any manner with one of the parties to the dispute or a partner with a lawyer or law firm appearing in the arbitration, or representing the law firm or lawyer personally. Thus, there is no need to further deliberate upon the issue, as the observations made in case of Sheetal Maruti Kurundwade are agreed upon, there is no clash of interest of the Arbitrator because as a counsel, he had represented the Advocate representing the opposite party - the objection cannot survive and has been rightly turned down by the learned Arbitrator. The present petition, seeking termination of the mandate of the arbitrator, therefore, cannot be entertained and is dismissed. 2023 (2) TMI 736 Seeking restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC), NCT of Delhi and Haryana - HELD THAT:- In view of the fact that the Audited Financial Statements for the Financial Years from 2013-14 to 2019-20 and Audited Balance Sheets for the Financial Years 2015-16, 2016-17 2017-18 shows that the Appellant Company is having substantial movable as well as immovable assets. Therefore, it cannot be said that the Appellant Company is not carrying on any business or operations. Hence, the order passed by the National Company Law Tribunal (New Delhi Bench, Court-II) as well as Registrar of Companies, NCT of Delhi Haryana is not sustainable in law. The name of the Appellant Company be restored to the Register of Companies subject to the compliances imposed - appeal allowed. Insolvency & Bankruptcy 2023 (2) TMI 735 Initiation of CIRP - Corporate Debtor failed to make repayment of its dues - application was dismissed on the ground of time limitation - whether the Account between the parties could be construed as a running Account? - HELD THAT:- From the Judgement in Bharat Skins Corporation Vs. Taneja Skins Corporation Private Limited [[ 2011 (12) TMI 716 - DELHI HIGH COURT] ] it is clear that for an Account to be termed a running Account it must be demonstrated that there are Debits and Credits entries going on simultaneously or on a regular basis and the balances are struck with some periodicity. Non-payment of invoices and payment without specifying a particular invoice does not make the transaction a running Account. As can be seen from the invoices/communication dated 18.04.2018, 24.04.2018, 12.05.2018, 12.10.2018, 26.10.2018, 15.11.2018, 11.12.2018 24.12.2018, it can be clearly seen that the amounts were paid towards specific invoices and therefore keeping in view the ratio of the aforenoted Judgement the said Account cannot be termed as a running Account. From the email (produced) it is established that the cheque was never realised and the amount was not paid. This cheque was meant for invoices dated 25.05.2015 to 25.09.2015, as can be seen from the Statement of Account - It is clear from the para 14 Statement of Account that these invoices pertain to the period from 25.05.2015 to 25.09.2015 and therefore pertain to the period 3 Years prior to the filing of the Application. The Section 9 Application was filed on 24.02.2020 and it is the case of the Appellant that during the pendency of the proceedings on 08.03.2021, a sum of Rs.3,23,723.36/- was also paid by the Respondent. In the instant case, the contention of the Learned Counsel for the Appellant that the email dated 29.05.2019 should be construed as acknowledgement is also not within 3 Years of the dates of invoices. It is also a settled proposition of law that a cheque which has not been encashed cannot amount to an acknowledgement of liability in terms of Section 18 of the Limitation Act, 1963. This Tribunal is of the considered view that the emails relied upon by the Appellant do not strictly construe an acknowledgement of liability as provided for under Section 18 of the Limitation Act, 1963. Though it is mentioned by the Appellant in the Notes of Submissions that these amounts have been acknowledged in the Balance Sheets, the same has neither been produced before the Adjudicating Authority or before this Tribunal. This Pleading is not even a part of the grounds of Appeal or pleaded before the Adjudicating Authority - it is seen from the record that majority of the invoices are beyond the period of Limitation and that interest claimed by the Appellant/Operational Creditor, as can be seen from the Statement made in Part-IV of the Application @24% p.a. is from the invoices dated 29.04.2015. The amounts said to be due and payable include the principal and interest calculated from the Year 29.04.2015 and therefore this Tribunal agree with the finding of the Adjudicating Authority that out of 25 invoices, 17 are barred by Limitation. The Hon ble Apex Court in a catena of Judgements has laid down that IBC is not a Recovery Proceeding but is meant for Resolution. The Adjudicating Authority, exercising powers under Section 7 or Section 9 of IBC, is not a Debt Collection Forum. The IBC tackles and/or deals with Insolvency and Bankruptcy. It is not the object of the IBC that CIRP should be initiated to penalize Solvent Companies for non-payment of disputed dues claimed by an Operational Creditor. Appeal dismissed. Service Tax 2023 (2) TMI 734 Extended period of limitation - Cenvat Credit - telecom towers erected at site and affixed to earth - inputs or not - goods used in the erection of Tower - prefabricated buildings shelters, PUF Panels - HELD THAT:- The impugned decision of the tribunal was a common order involving several telecom companies including the Respondent herein as well as Reliance Communication Limited, in respect of whom this Court dismissed the appeal in THE COMMISSIONER OF SERVICE TAX MUMBAI VERSUS M/S. RELIANCE COMMUNICATION LTD [ 2018 (4) TMI 1941 - BOMBAY HIGH COURT] - The issue involved in the group of appeals filed before the CESTAT was with regard to denial of cenvat credit to the telecom communication companies on the ground that cenvat credit availed on towers used to rendering telecommunication service is ineligible to cenvat credit as they are immovable goods. On this issue, the tribunal sustained the demand of Revenue partially. The demand for duty and interest within the limitation period was sustained. Demand of ineligible cenvat credit issued beyond the period of limitation was dropped considering that the issue was a debatable issue. This Court having already rendered its decision on the Tribunal order impugned herein, we are not persuaded to take any other view. The affidavit filed on behalf of the Revenue does not elicit any distinguishing feature. Learned Counsel for the Revenue has also not brought any material on record to demonstrate that the decision dated 2nd April 2018 in CEXA 6 of 2017 has been a subject matter of any further challenge. Learned counsel for the Appellant-Revenue has not been able to demonstrate any material difference or distinguishing feature in the facts of this case - There being neither any perversity nor any error on the face of the record, the appeal does not raise any substantial question of law - Appeal dismissed. 2023 (2) TMI 733 Service or not - agreement between the Petitioner and the NHAI for collection of toll charges - activity performed by the Petitioner under the agreement with NHAI - status of the Petitioner qua NHAI - whether the Petitioner would be an agency on behalf of NHAI? - HELD THAT:- The Tribunal, in Petitioner's own case COMMISSIONER OF SERVICE TAX, MUMBAI VERSUS M/S. IDEAL ROAD BUILDERS PVT. LTD., M/S. MEP TOLL ROAD PVT. LTD. [ 2017 (10) TMI 401 - CESTAT MUMBAI] , had rendered a finding that the Petitioner cannot be considered as an agent of the NHAI. In the impugned decision, the Respondent has not dealt with the implications of this finding of the Tribunal. The Respondent- Commissioner had posed this question to himself in the order; however, thereafter, we do not find any declaration as to what is the implication of the earlier decision of the Tribunal and as to whether the finding of the status of the Petitioner would lose its meaning after the introduction of the new regime. The Commissioner has only referred to different periods under which the demands have been made, however, without any discussion about whether it would rule out the earlier finding of the Tribunal. According to us, this specific finding on the status of the Petitioner given in the Petitioner's own case by the Tribunal could not have been overlooked. By stating so, we should not be deemed to have meant that the Commissioner was bound by the decision of the Tribunal or otherwise. The Commissioner could conclude that the declaration was not applicable even after the new regime or that after the new regime, despite the such declaration, the Petitioner would be liable, but the same could not have been ignored. We agree with the learned counsel for the Petitioner that there is a fundamental flaw in the approach adopted by the Respondent, which needs to be corrected. Impugned order set aside - the proceeding before the Respondent-Commissioner is restored to decide the same - petition disposed off. 2023 (2) TMI 732 Recovery of CENVAT credit availed between 2006- 07 and 2010-11 - medi-claim premium paid for procurement of insurance service (of family members of employees) - single premium and not floater policy - HELD THAT:- On scrutiny of the rival submissions, it is seen that reliance has been placed by both sides on decisions arising from dispute on availment of CENVAT credit by central excise assessees. There is a substantial difference between the entitlement for availment of CENVAT credit for those entities in contradistinction with the entitlement of service tax assessees. It is on the claim of entitlement, arising from direct or indirect use in manufacture and certain related services deployed in particular contexts, that these decisions had been rendered. Rule 2 of CENVAT Credit Rules, 2004 factors both the provider and the service; for manufacturers, the sole factor is association with manufacturing process. Accordingly, the issue for consideration is utilization of impugned input service by a provider for rendering output service to a recipient. The decision in EMERSON EXPORT ENGINEERING CENTRE VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2016 (9) TMI 1134 - CESTAT MUMBAI] , emanating from conceding ineligibility for CENVAT credit, does not offer precedent. The impugned order is set aside - appeal is allowed by way of remand to the original authority for re-determination of the credit disallowed in the impugned order. 2023 (2) TMI 731 Refund of Service Tax paid - specified services which are wholly consumed within the SEZ as per notification no. 9/2009-ST dated 03.03.2009 as amended vide notification no.15/2009-ST dated 20.05.2009 - HELD THAT:- On going through the SEZ Act, 2005 and its section 26 (i)(e) specifically provides that all services imported into the SEZ to carry out authorised operation in SEZ shall be exempted. Further in terms of section 51 of the SEZ Act the provisions of the SEZ Act shall have overriding effect over all provisions of any other law for the time being in force and it is settled legal principle that any rule or notification cannot override the Act. Otherwise also the issue involved herein is no longer res integra in view of the decision of this Tribunal in the matter of M/S. EON KHARADI INFRASTRUCTURE PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE III [ 2015 (2) TMI 614 - CESTAT MUMBAI] in which the Tribunal on an identical issue while deciding in favour of assessee held that refund cannot be denied under the Act for procedural infraction of having paid the Service Tax which ought not to have been paid by the service provider. So far as the reliance placed by learned Authorised Representative in the matter of M/S. EVEREST INDUSTRIES LTD. VERSUS CCE, MEERUT - I [ 2013 (4) TMI 526 - CESTAT NEW DELHI] is concerned, it is found that the facts in that decision were different. Therein the refund of Cenvat Credit (Service Tax) under Rule 5 of Cenvat Credit Rules, 2004 in respect of input services used in manufacture of final products cleared for export was involved, in which it has been held by the Tribunal that the benefit of refund of accumulated Cenvat Credit on inputs used in manufacture of goods supplied to the SEZ units cannot be given whereas, in the instant matter it is the refund of Service Tax which is in issue and which as per SEZ Act the appellant was not liable to pay. Appeal allowed. 2023 (2) TMI 730 Extended period of limitation - SCN issued beyond normal period - Section 73 of the Finance Act, 1994 - wilful misstatements of facts or not - short payment of service tax - Business Support Service - HELD THAT:- The recovery of short-levied or non-levied or short-paid service tax amount within the normal period is the rule, in the eventuality of short-levy or short-payment of tax amount by the assessee. In other words, whatever may be the reason, if the service tax amount has not been paid by the assesse, the department is free to initiate proceedings under the main part of sub-section (1) of Section 73 ibid to recover of the service tax amount, which have been short-levied or non-levied etc. On the contrary, invocation of the proviso clause contained in Sub-Section (1) of Section 73 ibid is the exception, which can be sparingly invoked, only in the eventuality, of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter V of the Finance Act, 1994 or rules made there under, with intent to evade payment of the service tax. In such eventuality, instead of the period of one year, the show cause notice can be issued by invoking the extended period of limitation within the period of five years from the relevant date. In this case, it is an admitted fact on record that based on the books of accounts, maintained by the appellant, the officers of service tax department had conducted the audit and they have not disputed the authenticity or accuracy of records maintained by the appellant. Further, it is also an admitted fact on record that towards provision of the taxable service, the appellant had received lesser amount than that as shown in the invoices issued to the service recipient. Since, towards provision of the taxable service, the appellant had received the lesser amount, after adjustment of the aforementioned deductions, their tax liability is confined only to the amount, which was actually received for provision of the taxable service. Thus, under such circumstances, the charges of suppression etc. cannot be levelled against the appellant. There are no merits in the impugned order, insofar as it has confirmed the service tax demand for extended period, beyond one year along with the interest and penalty under Section 77 ibid on the appellant - appeal allowed. Central Excise 2023 (2) TMI 729 Process amounting to manufacture or not - activity of aerosol packing of products on job work basis, undertaken by the job worker - classification of goods - Diesel Engine Conditioner - Fuel System Cleaner - Intake System Cleaner - classifiable under CTH 3403 as lubricating preparations as contended by the department or under CTH 3811 or alternatively under CTH 3402 as contended by the appellant and the job worker? Whether the activity undertaken by the job worker would amount to manufacture under section 2(f)(ii) of the Excise Act? - HELD THAT:- The present appeal concerns only the activity undertaken by the job worker involving repacking from bulk containers received from the appellant into retail packs in respect of three IE coded products, namely (i) Diesel Engine Conditioner; (ii) Fuel System Cleaner; and (iii) Intake System Cleaner, for which the appellant pays job charges to the job worker and the purchase orders placed on the job worker indicate that NIL excise duty would be payable and service tax @ 12.36% would be payable - Section 2(f) of the Excise Act defines manufacture . In terms of section 2(f)(ii) manufacture would include any process which is specified in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff as amounting to manufacture. Chapter note 6 of Chapter 34 and Chapter note 10 of Chapter 38 provide that in relation to products of the concerned Chapter, labeling or relabeling of containers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture. The impugned order holds that the activity undertaken by the job worker of repacking raw material received from the appellant into retail packs would amount to manufacture. There is no finding that the job worker undertakes the activity of repacking from bulk packs to retail packs nor does the appellant undertake such an activity. With regard to the activity of adopting any treatment to render the product marketable to the consumer, it is the case of the appellant and the job worker that such a treatment has not been undertaken on the raw materials supplied by the appellant in bulk containers to the job worker, as the raw materials are injected into aerosol cans and thereafter plastic caps are fitted and labels are affixed on the cans. This activity of injecting the raw materials into aerosol cans would not amount to adopting any treatment on the raw materials to render the product marketable - This is what was held by the Supreme Court in Vadilal Gases Ltd. [ 2017 (1) TMI 1311 - SUPREME COURT ]. The inevitable conclusion, therefore, is that the process undertaken by the job worker would not amount to manufacture in terms of section 2(f)(ii) of the Excise Act read with note 6 of Chapter 34 or note 10 of Chapter 38 of the Central Excise Tariff. The second issue that requires to be examined is about the classification of the products said to have been manufactured by the job worker. As the first issue has been decided in favour of the job worker, namely that the process undertaken by the job worker would not amount to manufacture , it would not be necessary to decide this issue. Penalties - HELD THAT:- Once it is held that the activity undertaken by the job worker would not amount to manufacture under section 2(f)(ii) of the Excise Act, penalties could not have been imposed either upon the employees of the appellant or the employee of the job worker. Appeal allowed. 2023 (2) TMI 728 CENVAT Credit - inputs - bagasse/press-mud - excisable goods or exempt goods - demand of amount equal to 6% of Sale value of Bagasse and Press mud, alongwith interest and penalty - HELD THAT:- Both the lower authorities have held that since the appellant has availed CENVAT credit on various inputs going into the manufacture of the final products, and bagasse and pressmud arising during the course of manufacture and are exempt, CENVAT credit cannot be allowed. The issue is no more res integra as the question as to whether bagasse is manufactured under the provisions of Section 2(f) of the Central Excise Act, 1944 or otherwise and the CENVAT credit availed on the inputs which are used for the manufacture of sugar has to be denied or otherwise has been settled by the apex Court in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. (SC) [ 2015 (10) TMI 566 - SUPREME COURT ] . Hon ble Apex Court held In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty. Appeal allowed - decided in favor of appellant.
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