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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter February 7, 2022 Case Laws in this Newsletter: GST Income Tax Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles Subsidy or support are against thought to make people Atmnirbhar. Why support to PSU Banks from public money when they have huge market capitalization and capable to manage their own funds. BUDGETARY CHANGES IN GST PROVISIONS Utilization of ITC cannot be denied merely on the ground that the inputs have no nexus with outward supply News Indian Footwear and Leather Development Programme (IFLDP) approved for continuation with an outlay of ₹ 1700 Crore One District One Product (ODOP) mission of Centre takes a giant technology boost. Government takes several initiatives to enhance collaboration between small business and e-commerce platforms Government takes several steps to boost Indian exports Thirty-Nine (39) Towns have been recognized as Towns of Export Excellence (TEE) under the Foreign Trade Policy Indian exports to China witness growth Notifications GST - States 20/2021-State Tax (Rate) - dated 27-1-2022 - Himachal Pradesh SGST Amendment in Notification No. 21/2018-State Tax (Rate), dated the 27th July, 2018 19/2021-State Tax (Rate) - dated 27-1-2022 - Himachal Pradesh SGST Amendment in Notification No. 2/2017-State Tax (Rate), dated the 30th June, 2017 18/2021-State Tax (Rate) - dated 27-1-2022 - Himachal Pradesh SGST Amendment in Notification No. 1/2017-State Tax (Rate), dated the 30th June, 2017 ERTS (T) 65/2017/Pt. III/65 - dated 28-12-2021 - Meghalaya SGST Amendment in Notification No. 21/2018-State Tax (Rate), dated the 26th July, 2018 ERTS (T) 65/2017/Pt. III/64 - dated 28-12-2021 - Meghalaya SGST Seeks to amend Notification No. ERTS (T) 65/2017/2, dated 29th June, 2017 ERTS (T) 65/2017/Pt. III/63 - dated 28-12-2021 - Meghalaya SGST Seeks to amend Notification No. ERTS (T) 65/2017/1, dated 29th June, 2017 ERTS (T) 65/2017/Pt. III/61 - dated 21-12-2021 - Meghalaya SGST Seeks to bring in force provisions of sections 2, 3 and 7 to 16 of the Meghalaya Goods and Services Tax (Amendment) Act, 2021 ERTS (T) 65/2017/Pt. III/60 - dated 21-12-2021 - Meghalaya SGST Seeks to bring in force provisions of sub-rule (2), sub-rule (3), clause (i) of sub-rule (6) and sub-rule (7) of rule 2 of the Meghalaya Goods and Services Tax (Eighth Amendment) Rules, 2021 Highlights / Catch Notes GST Provisional attachment of goods - Section 83 of the Central Goods and Services Act, 2017 - once assessment Order is passed pursuant to the said Show Cause Notice, the Order of provisional attachment cease to exist and comes to an end. It is accordingly declared that the said provisional attachment ceases to exist and come to an end. - HC Visit to Get Source Exemption from GST - pure services or not - Comprehensive architectural services provided by the Applicant to Municipal Corporation of Greater Mumbai - GST exemption is applicable on Comprehensive architectural services that includes architectural design, structural design, MEP design , HVAC services design, preparation of drawings etc for repairs/ restoration, reconstruction for development of recreation ground cum textile museum at United India Mills 2 & 3 at Kala chowky provided by the Applicant to Municipal Corporation of Greater Mumbai (‘MCGM'). - AAR Visit to Get Source Input tax credit of - rent-a-cab services - GST paid under Reverse Charge Mechanism - hiring of buses for transportation of employees - inward supply - applicability of bar created by Section 17 (5) of GST Act, 2017 - the same is not falling under the block credit as provided under section 17 (5) of CGST Act 2017 and, therefore, in the instant case, (since the applicant is utilizing the services of renting of motor vehicle for business or furtherance of business), the input tax credit is not restricted to the applicant under the referred Section 17(5) of CGST Act 2017. - AAR Visit to Get Source Income Tax Default u/s 201 (1) - short deduction of TDS - penalty u/s 271C - Once it has been categorically held by the CIT (A) that there is no short deduction of TDS, the question of categorising the Appellant as Assessee-in-default for the purposes of Section 201 (1) of the IT Act did not arise. There was, therefore, no occasion for imposition of the penalty under Section 271C - HC Visit to Get Source Rejection of books of accounts and estimation of profit - Mere non-issuance of production of sale memos could not have been a ground to reject the entire books of account particularly since it pertained to sale of country liquor to tribal populations. Also the ITAT appears to have overlooked the fact that the books of account of the Assessee were not rejected by the Excise Department and that the ITAT itself had accepted them for the subsequent AY 2001-02.- HC Visit to Get Source TDS u/s 194A - TDS on the interest component of the compensation paid by insurance company - Tribunal has taken note of the fact that the TDS deducted by the petitioner has been deposited and Form-16-A too has been produced, yet the Tribunal has called upon the Insurance Company to deposit the amount again with it so that same is disbursed to the claimants. The approach adopted by the Tribunal is not countenanced by law. The amount deducted at source as a tax on the interest component is deposited with the government treasury is the money deposited for and on behalf of the income tax payee i.e. claimants and, therefore, there cannot be unjust enrichment by making payment twice. - HC Visit to Get Source Default u/s 201(1) and 201(1A) - period of limitation - TDS u/s 194H - The limitation of 2 years as prescribed in Section 201(1A)(3) of the Act as it existed prior to its substitution by Act No.2/2014 applies to the facts of the case. The limitation to pass an order u/s 201(1A) of the Act expired prior to Finance Act No.2/2014, which came into force with effect from 01.10.2014. Thus, a right accrued to the assessee and the subsequent amendment therefore, could not have revived the period of limitation and take away the vested right accrued to the assessee. - HC Visit to Get Source Late filing fee under section 234E - Fee for default in furnishing statements - After considering the statutory provisions and the implications of the amendment brought in to the Act, it was held, in the earlier judgment, that the amendment would take effect only with effect from 1st June, 2015 and is thus prospective in nature. It is submitted that the aforesaid judgment has become final and is binding upon the authorities. - HC Visit to Get Source Ex-parte assessment order - It is clear that on account of the inability and omission on the part of the petitioner to file his objections and produce documents etc., due to bonafide reasons, unavoidable circumstances and sufficient cause, the respondents have proceeded to pass the ex-parte impugned order, which deserves to be set aside and the matter be remitted back to the respondents for reconsideration afresh after giving one more opportunity to the petitioner. - HC Visit to Get Source Deduction u/s.54B - Claim denied which was not claimed by the assessee while filing the return - The assessee at the time of filing of his returns of income u/s. 139(1) and u/s 148 of the Act had remained under a bonfaide belief that as the agricultural land in question i.e at Village Dharampura was situated beyond the municipal limits, and thus not a “capital asset‟, therefore, the gain on transfer of the same was not exigible to tax under the Act. Accordingly, backed by his aforesaid conviction, the assessee in our considered view had no occasion to have raised in his aforesaid returns of income filed u/s 139(1) and u/s 148 of the Act a claim for deduction u/s 54B w.r.t the investment that was made by him towards purchase of new agricultural lands. - AT Visit to Get Source Delayed payment of employee contribution to ESI (6 days delay) u/s.43B - In the present case we are concerned with the asst. year 2017-18 and the amended provision could not be applied retrospectively as it is only applicable w.e.f 1/4/2021. Being so no disallowance could be made by the AO in respect of PF/ESI paid within the due date of filing return of income. Though, it was beyond the date mentioned in the respective Act. This view of ours is supported by various judgment relied on by the ld. AR. - AT Visit to Get Source Depreciation @ 10% on improvements carried out in the lease hold premises - Assessee claimed 100% depreciation on the leasehold improvements - The ingredients and prerequisites of a capital expenditure or revenue expenditure would remain the same, and not undergo any change depending on whether the building is owned or occupied as lessee or other occupancy rights leased premises. - AT Visit to Get Source Customs The method of filing of Bill of Entry and Exchange of information for assessment is online in the ICEGATE. Therefore, the delay on account of any technical glitches / error in uploading the relevant information document by the concerned Department cannot saddle an importer with liability unless the delay was itself on account of the importer. In this case, the respondent has not been able to show how there was any delay on the part of the petitioner. - HC Visit to Get Source Duty Drawback - Advance Licences for Duty-free import of goods - drawback for 50% of FOB value - The benefit of Section 75 ibid namely the drawback should be allowed of duties of Customs chargeable under Customs Act cannot be denied as the benefit of duty drawback is allowable on the imported goods used in the manufacture of goods which are exported. Revenue has nowhere disputed the fact of export made by the appellant. Hence, the impugned order is contrary and not in accordance with the scheme of the statutory provision as provided under Section 75 ibid - AT Visit to Get Source Rectification of mistake - error apparent on the face of record - It has been rightly concluded in the final order that though this appellant and others have not made any big gain, in the attempted export of the prohibited goods, by the exporter. However, there has been element of negligence and/or vigilance on their part which has facilitated attempted exported of prohibited goods. - There is no error in the final order - there is no merit in the RoM application, the same is dismissed. - AT Visit to Get Source Refund claim - CBEC vide circular dated 22.02.2001 - retention of amounts, by department, at least over and above the amount that would have eventually fallen due from the respondent, on completion of legal process, is an excessive action in contravention of the instructions issued by the Board. - AT Visit to Get Source IBC Initiation of CIRP - Whether the WhatsApp conversation between the Parties can be admitted as evidence? - The proof of service through electronic mode would not form part of a record as an evidence whereas the WhatsApp messages are filed to be admitted as evidence. Hence it cannot be said that Section 20 of the Companies Act permits a party to produce electronic evidence without it being accompanied by the section 65B certificate. Hence, on the 2nd ground also the petition fails. - this Petition is liable to be dismissed - Tri Visit to Get Source Service Tax Exemption from service tax - MANIT is an Educational Institute of National Importance - The substitution vide Notification No.02/2014-ST dated 30.01.2014, of the definition of “Governmental Authority‟ is made, the same shall have the retrospective effect, as substitution relates to the date of original notification as per the Rules of the Interpretation - the Commissioner (Appeals) has erred in holding that substituted definition of Governmental Authority shall not have the retrospective effect. - AT Visit to Get Source Refund of service tax paid - rejection on the ground of failure to cross the bar of unjust enrichment - It is difficult to understand from where he borrowed this inference that ultimate incidence of all taxes shifts from business to the consumer and mere reflection of the same in the books of account (perhaps he meant thereby receivable) does not reflect actual shifting of incidence. No prudent man would concur to his finding that is based on erroneous understanding of simple English sentence available in the Encyclopaedia Britannica strangely he equated “most of the cost of tax” with “all taxes”. - Refund to be given - AT Visit to Get Source Case Laws: GST 2022 (2) TMI 242 Provisional attachment of goods - Section 83 of the Central Goods and Services Act, 2017 - assessment Order passed by the learned Additional Commissioner pursuant to the said Show Cause Notice - HELD THAT:- The Hon ble Supreme Court in the case of M/S RADHA KRISHAN INDUSTRIES VERSUS STATE OF HIMACHAL PRADESH ORS. [ 2021 (4) TMI 837 - SUPREME COURT] has held that, once the final Order of assessment is passed, provisional attachment must cease to subsist. This Court after adverting the said Judgment of the Hon ble Supreme Court in the case of Radha Krishan Industries has held that, once assessment Order is passed, no proceedings of nature referred to in Sub-Section 1 of Section 83 can continue. The principles laid down by the Hon ble Supreme Court in the case of Radha Krishan Industries applied to the facts of this case. Similar is the view taken by this Court in the case of FINE EXIME PRIVATE LIMITED VERSUS UNION OF INDIA, THE PRINCIPAL COMMISSIONER, CENTRAL TAX AND CX, MUMBAI EAST., THE COMMISSIONER OF CGST CENTRAL EXCISE (APPEALS II) MUMBAI [ 2021 (8) TMI 519 - BOMBAY HIGH COURT ] - thus, once assessment Order is passed pursuant to the said Show Cause Notice, the Order of provisional attachment cease to exist and comes to an end. It is accordingly declared that the said provisional attachment ceases to exist and come to an end. Petition disposed off. 2022 (2) TMI 241 Provisional attachment - Banks accounts - input tax credit - seizure of goods - statutory life of the attachment order, expired - Rule-86A of CGST Rules, 2017 - HELD THAT:- The orders of provisional attachment under challenge could be said to have been outlived statutory right considering the fact that the orders impugned are dated 23.07.2019 and it would cease to operate on expiry of period of one year as prescribed under Section-83. The same is the position with regard to the Rule-86A of the CGST Rules, 2017. The attention of this Court is drawn to the draft amendment, whereby, the writ-applicant has referred to the communication dated 28.07.2020 issued by the respondent no.5 as received from the respondent no.2, who seems to have passed the fresh order of attachment. On bare perusal of the said order dated 24.07.2020 produced at Annexure-R and the order dated 27.07.2020 produced at Annexure-Q, even those orders have outlived their statutory life in view of Section-83 of the CGST Act as well as Rule-86A(3) of the CGST Rules, 2017 - as on date, it could be said that there are no orders of attachment of all the four current accounts running in the name of writ-applicant maintained with the respective banks as well as there is no attachment of the Input Tax Credit. Thus, after the goods are seized under sub-section (2) to Section 67 and no notice in respect thereof is issued within six months of the seizure, the authority concerned is obliged to return to the person from whose possession such goods were seized. The proviso enables the authority concerned upon showing sufficient cause to extend the period further not exceeding six months. In the case on hand indisputably no notice has been issued and the time period of six months has also expired - application disposed off. 2022 (2) TMI 240 Exemption from GST - pure services or not - Comprehensive architectural services provided by the Applicant to Municipal Corporation of Greater Mumbai - Notification No. 12/2017 - Central Tax (Rate) dated 28 th June 2017 as amended by Notification No. 16/2021 - Central Tax (Rate) New Delhi, 18th November, 2021 - services includes architectural design, structural design, MEP design, HVAC services design, preparation of drawings etc for repairs/ restoration, reconstruction for development of recreation ground cum textile museum at United India Mills 2 3 at Kola chowky - HELD THAT:- For any supply to be covered under Sr. No. 3 of the amended Notification, the supply should be in respect of only Pure Services, secondly such Pure Services must be provided to the Central Government, State Government or Union territory or local authority and finally such services should be provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. In the instant case, pure services are supplied by the applicant to MCGM. This is because the applicant during the course of the personal hearing, stated that no goods are supplied by them at all, under the impugned agreement. Thus, the first part of the conditions mentioned at Sr. No. 3 of the aforesaid amended Notification is satisfied in the subject case - the second condition to be satisfied for availing exemption under the above referred Notification is that such pure services, as are being rendered in the subject case, should be supplied to the Central Government, State Government or Union territory or local authority. The applicant is supplying pure services to MCGM which is a local authority under the GST Laws. Thus, the second condition mentioned at Sr. No. 3 of the aforesaid Notification is also satisfied in the subject case. From a reading of the Section 63 of the Brihan Mumbai Municipal Corporation Act, 1888, it is crystal clear that the impugned activities, even though at the discretion of MCGM, are entrusted to MCGM by the State Government and such activities can be considered to be in the nature of functions or schemes entrusted to the municipality by the State Government. Thus, the impugned activities are entrusted to the MCGM by the State Government and therefore the same are covered under clause (a) (ii) of Article 243W of the Constitution - Section 63A states that Where any duty has been imposed on, or any function has been assigned to the Corporation under this Act or any other law for the time being in force, or the Corporation has been entrusted with the implementation of a scheme, the Corporation may, either discharge such duties or perform such functions or implement such scheme by itself or cause them to be discharged, performed or implemented by any agency. In the subject case MCGM is performing the impugned activities through an agency, viz. the applicant Sir JJ College of Architecture Mumbai, which is affiliated to the University of Mumbai - the MCGM cannot perform any activity which it is not empowered to do so by the Mumbai Municipal Corporation Act 1888, an Act which has been promulgated by the State Government. Thus all activities, obligatory or voluntary, which are required to be performed by MCGM under the Mumbai Municipal Corporation Act 1888 will be considered as activities performed by MCGM as entrusted to it, by the State Government under the Mumbai Municipal Corporation Act 1888 - thus, the third condition of Sr. No. 3 of the Notification, viz. such pure services should be provided by way of any activity in relation to any function entrusted to a Municipality under article 243W of the Constitution is also satisfied in the subject case. Thus, the applicant is entitled for exemption under Sr. No. 3 of Notification No. 12/2017 - CTR dated 28.06.2017 as amended. 2022 (2) TMI 239 Input tax credit of - rent-a-cab services - GST paid under Reverse Charge Mechanism - hiring of buses for transportation of employees - inward supply - applicability of bar created by Section 17 (5) of GST Act, 2017 - HELD THAT:- As per the Notification no. 22/2019-Central Tax (Rate) dated 30.09.2019 w.e.f. 01.10.2019, M/s N.B.S. Travel providing the bus service is not required to levy G5T (since it is not a body corporate) when it is paying G5T @ 5%. The Applicant, being the service recipient is liable to discharge GST under Reverse Charge Mechanism - From the notification it is clear that notification restricts the availability of ITC un less the supplier is in same line of business. But the heading of this column number three is very clear that it applies to the supplier of said service and not to the recipient of serv ice. In the present case, the applicant is the recipient of service and not the supplier of said service. So said words shall not affect the case of the applicant here. Here, the applicant is receiving the bus service from M/s N.B.S. Travels. Thus, as per the Notification no. 29/2019-Central Tax (Rate) dated 31.12.2019, M/s N.B.S. Travel providing the bus service is not required to levy GST (since it is not a body corporate). It does not issue an invoice charging central tax at the rate of 6 per cent. to the service recipient i.e. the applicant. The Applicant, being the service recipient is liable to discharge GST under Reverse Charge Mechanism. Whether applicant is entitled to avail Input tax credit (ITC) of GST charged on such inward supply? - Chapter V of the CGST Act, 2017 - HELD THAT:- Section 16 of the CGST Act, 2017, contains provisions with respect to eligibility and conditions for taking ITC. As per Section 16 (1), every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in Section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business. Hence, ITC in respect of receipt of services is available and can be taken, subject to such conditions and restrictions and in the manner specified in Section 49 of the CGST Act - in the subject case, the supply of services received by the applicant is used in the course or furtherance of their business and therefore prima facie, they are eligible to take credit of GST charged by their suppliers. Whether Section 17 (5) of the said Act debars the applicant from taking credit? - HELD THAT:- Section 17 (5) had clearly debarred Input Tax Credit on motor vehicles or conveyances used in transport of passengers till the date of the amendment i.e. 01.02.2019. However with effect from 01.02.2019, Input Tax Credit has been allowed on leasing, renting or hiring of motor vehicles, for transportation of persons, having approved seating capacity of more than thirteen persons (including the driver) - In the instant case, the bus service availed by the Applicant is 49-seater i.e. more than 13 seater. Accordingly, the same is not falling under the block credit as provided under section 17 (5) of CGST Act 2017 and, therefore, in the instant case, (since the applicant is utilizing the services of renting of motor vehicle for business or furtherance of business), the input tax credit is not restricted to the applicant under the referred Section 17(5) of CGST Act 2017. The applicant would be eligible for ITC but only with effect from 01/02/2019 only. Income Tax 2022 (2) TMI 238 Default u/s 201 (1) - short deduction of TDS - penalty u/s 271C - whether ITAT was justified in penalizing the appellant in default U/s 271C of the IT Act in absence of contravention of Section 192 ? - As concluded by the CIT(A) that the penalty demand treating the Appellant as Assessee in default under Section 201 (1) to the extent of short deduction of TDS is deleted as employees had paid their taxes directly through self assessment and had filed details of their income, therefore, no further tax was payable - HELD THAT:- Once it has been categorically held by the CIT (A) that there is no short deduction of TDS, the question of categorising the Appellant as Assessee-in-default for the purposes of Section 201 (1) of the IT Act did not arise. There was, therefore, no occasion for imposition of the penalty under Section 271C Department has been unable to point out how the above orders of ITAT upholding the penalty levied by the AO on the Appellant are sustainable in law. Consequently the questions framed by this Court are all answered in favour of the Appellant Assessee and against the Department - The appeal is allowed in the above terms. 2022 (2) TMI 237 Rejection of books of accounts and estimation of profit - Whether the ITAT is legally correct in holding that rejection of books of accounts solely on the ground of non-issuance of sale memos is proper and justified ? - HELD THAT:- Mere non-issuance of production of sale memos could not have been a ground to reject the entire books of account particularly since it pertained to sale of country liquor to tribal populations. Also the ITAT appears to have overlooked the fact that the books of account of the Assessee were not rejected by the Excise Department and that the ITAT itself had accepted them for the subsequent AY 2001-02. For all of the aforementioned reasons, the two questions formulated by this Court are answered in favour of the Assessee and against the Department. 2022 (2) TMI 236 TDS u/s 194A - TDS on the interest component of the compensation paid by insurance company to the claimants-respondents by way of an award passed by the Tribunal - HELD THAT:- The person making payment is bound to deduct tax at source (TDS) on the interest component of the compensation awarded by the Tribunal where the amount of such interest paid in a financial year exceeds ₹ 50,000/-. Indisputably, the interest component in the instant case was exceeding ₹ 50,000/- and, therefore, in the absence of any pan card provided by the claimants, the Insurance Company deducted income tax at the rate of 20% as TDS and deposited the same in the government treasury. That being the position, the petitioner-Insurance Company has carried out the mandate of Clause (ix) of Section 194-A of the Income Tax Act and has not committed any illegality. Tribunal has taken note of the fact that the TDS deducted by the petitioner has been deposited and Form-16-A too has been produced, yet the Tribunal has called upon the Insurance Company to deposit the amount again with it so that same is disbursed to the claimants. The approach adopted by the Tribunal is not countenanced by law. The amount deducted at source as a tax on the interest component is deposited with the government treasury is the money deposited for and on behalf of the income tax payee i.e. claimants and, therefore, there cannot be unjust enrichment by making payment twice. 2022 (2) TMI 235 Default u/s 201(1) and 201(1A) - period of limitation - TDS u/s 194H - payments towards supply of manpower and non deduction of taxes on payments made to distributors towards price protection and special price clearance discounts - whether section 201(1A)(3)(i) or (ii) of the Act would apply to the case of the assessee? - HELD THAT:- It is well settled in law that limitation prescribed under the Act is not a mere period of limitation but the same imposes a fetter on the power of the assessing officer to take action under the said provision. [See: 'S.S.GADGIL VS. LAL CO. [ 1964 (4) TMI 19 - SUPREME COURT] and 'K.M.SHARMA VS. ITO',[ 2002 (4) TMI 7 - SUPREME COURT] ]. In the instant case, admittedly, the statement referred to u/s 200 of the Act has been filed. A finding of fact in this regard has been recorded by the Commissioner of Income Tax (Appeals) as well as by the Tribunal. The limitation of 2 years as prescribed in Section 201(1A)(3) of the Act as it existed prior to its substitution by Act No.2/2014 applies to the facts of the case. The limitation to pass an order under Section 201(1A) of the Act expired prior to Finance Act No.2/2014, which came into force with effect from 01.10.2014. Thus, a right accrued to the assessee and the subsequent amendment therefore, could not have revived the period of limitation and take away the vested right accrued to the assessee. Therefore, it is evident that the order passed under Section 201 of the Act dated 30.03.2016 is clearly barred by limitation. - Decided in favour of assessee. 2022 (2) TMI 234 Validity of Settlement Commission order - validity of the application as made by the assessee - appropriate forum for the redressal of Family disputes - HELD THAT:- Settlement Commission, in exercise of Section 245D(4) provision, has already passed an order which has been given to its effect vide order dated 14.03.2019 (Annexure R-5/5), even before filing of this petition, yet the same has not been challenged by the Petitioners irrespective of the fact that the order impugned dated 02.02.2018 (Annexure P/1) has been merged therein. Pertinently to be observed here further that the Petitioner Suresh Shadija and Respondents No. 3 4 (Shri Pawan Kumar Shadija and Smt. Sandhya Shadija) belong to the same family and it appears to be of their personal dispute as reflected from the proceedings (Annexure P/24) initiated by the Petitioner on 11.05.2017 before the National Company Law Tribunal under Sections 58 and 59 of the Companies Act, 2013, which is pending under consideration before the Tribunal. It, thus, appears that the petitioners have already approached the appropriate forum for the redressal of their disputes. The petition is accordingly dismissed. 2022 (2) TMI 233 Late filing fee under section 234E - Fee for default in furnishing statements - HELD THAT:- Though section 234E of the Act was introduced by the Finance Act, 2012 with effect from 1st July, 2012, since petitioner is being demanded by Ext.P1 late fee for not filing the statement of tax deduction at source, it is necessary to refer to section 200A of the Act. Section 200A(1) incorporated clause (c) to clause (f) with effect from 01.06.2015. Sub-clause to section 200A (1) refers to the fee if any to be computed in accordance with the provisions of section 200A(1)(e). Petitioner that till 01.06.2015 petitioner cannot be mulcted with any liability to pay late fee for non filing of any statement of tax deduction at source M/s.Sarala Memorial Hospital v. Union of India and Another [ 2018 (12) TMI 1818 - KERALA HIGH COURT] wherein an identical question arose for consideration. After considering the statutory provisions and the implications of the amendment brought in to the Act, it was held that the amendment would take effect only with effect from 1st June, 2015 and is thus prospective in nature. It is submitted that the aforesaid judgment has become final and is binding upon the authorities. The demand in Ext.P1 to Ext.P3 intimations for the period from 2012-13 to 2014-15 is bereft of authority and cannot be legally sustainable. 2022 (2) TMI 232 Disallowing the reimbursement of the amount paid to the petitioner's subsidiary abroad and the amount as increasing, as the business increases every year - HELD THAT:- The issue arising out of these appeals appear to have a cascading effect on the tax liability of the petitioner for the succeeding years as well. Since the issues are of recurring nature, the appeal filed by the petitioner deserves an earlier attention for a final disposal. Therefore without expressing any opinion on the merits of the case, these writ petitions are disposed. Considering the arguments advanced by the learned counsel for the petitioner and the submissions of the learned Senior Standing Counsel for the respondent. These writ petitions are disposed by directing the respondent to consider the appeal and dispose the same on merits and in accordance with law within a period of three months from the date of receipt of a copy of this order. 2022 (2) TMI 231 Ex-parte assessment order - Inability and omission on the part of the petitioner to submit objections - HELD THAT:- On account of the defunct / inoperative email address, the petitioner did not have any knowledge of any correspondence addressed by the respondents to the said email address which had become defunct and inoperative resulting in the petitioner not being in a position to suitably reply to any of the notices issued by the respondents and file his objections, documents, details, particulars etc., as sought for by the respondents. It is clear that on account of the inability and omission on the part of the petitioner to file his objections and produce documents etc., due to bonafide reasons, unavoidable circumstances and sufficient cause, the respondents have proceeded to pass the ex-parte impugned order, which deserves to be set aside and the matter be remitted back to the respondents for reconsideration afresh after giving one more opportunity to the petitioner. 2022 (2) TMI 230 Release of seized documents, books of accounts and various other documents which was seized during the search proceedings u/s 132 - document, books of accounts, etc., seized during search are necessary for the purpose of the proceedings and consequently, the question of returning the same to the petitioner at this stage does not arise - HELD THAT:- As grievance of the petitioner with regard to non-return of the books of accounts, documents, etc., seized during search can be addressed by disposing of this petition by directing the petitioner to submit a representation in this regard to the respondents seeking return of the said documents and by directing the respondents to take necessary steps to return back the documents as requested by the petitioner by retaining true photostat copies of the same with the respondents for the purpose of the proceedings and also by directing the petitioner to file an affidavit of undertaking that he shall not take, change, alter or modify the documents so returned to him in any manner whatsoever and that he shall produce the same to the respondents as and when required by them. 2022 (2) TMI 229 Validity of Settlement Commission order - Order beyond the limitation prescribed u/s 245D(4A)(iii) and by operation of Section 245HA(1)(iv) - Non-disposal of the applications within the cut-off period - revenue submitted that the writ Court committed an error in deciding the writ petition on merits sans issuing notice to the Settlement Commission, more particularly when statement of objections was filed by the appellants only to the interim prayer sought and the arguments were heard only on the interim prayer - whether order of the learned Single Judge is in violation of principles of natural justice since no reasonable opportunity was provided to the appellants to address the arguments on the merits of the case? - Single Judge reaching a conclusion that the said order was abated and as such, the Settlement Commission ought to have entertained the rectification application filed by the assessee - HELD THAT:- The said judgment of Star Television News Ltd.,[ 2009 (8) TMI 86 - BOMBAY HIGH COURT] is not applicable to the applications filed subsequent to 01.06.2007 before the Settlement Commission. Indisputably, in the case on hand, the application was filed by the respondent No.1 assessee before the Settlement Commission after 01.06.2007. As could be seen from the material on record, it is discernable that the Revenue has approached this Court challenging the order of the Settlement Commission dated 03.04.2014 passed under Section 245D(2)(c) but failed to take the matter to the logical end. Writ Appeal were withdrawn and now the final order dated 27.05.2016 passed by the Settlement Commission is supported by the Revenue whereas the assessee has challenged the same in the present proceedings. Learned Single Judge has meticulously arrived at a decision on marshalling the facts of the case vis- -vis considering the ruling of Star Television News Ltd., supra, with the relevant provisions applicable to the facts of the present case. Revenue has also placed reliance on the ruling of the Hon ble High Court of Gujarat in M. Kantilal and Co. vs. Income Tax Settlement Commission.[ 2018 (7) TMI 463 - GUJARAT HIGH COURT] and M. Kantilal and Exports vs. Income-tax Settlement Commission[ 2018 (7) TMI 49 - GUJARAT HIGH COURT] wherein the applicants have approached the Hon ble High Court of Gujarat contending that by virtue of operation of the statutory provisions, their settlement applications would likely to abate shortly for no fault of them. Admittedly, the applications were filed by the assessee before the Settlement Commission in those cases prior to 01.06.2007. In that scenario the Hon ble High Court of Gujarat considering the case of Star Television News Ltd., supra, has held that the order of the Settlement Commission in disposing of the proceedings as having abated is unjustifiable. The other grounds urged by the Revenue inasmuch as non-providing of reasonable opportunity etc., cannot be countenanced for the reason that the learned ASG has appeared for respondent No.1 - assessee and argued the matter in extenso. Considering the arguments of both sides, the learned Single Judge has proceeded to decide the writ petition. In the circumstances, we find no jurisdictional error in the order of the learned Single Judge in allowing the writ petition filed by the assessee. 2022 (2) TMI 228 Late remittance of employees contribution to PF and ESI - As submitted assessee had paid the employees contribution prior to the due date of filing of the return u/s 139(1) - Scope of amendment to section 36(1)(va) and 43B - HELD THAT:- As in Bangalore Bench of the Tribunal in the case of M/s. Shakuntala Agarbathi Company [ 2021 (10) TMI 1196 - ITAT BANGALORE] by following the dictum laid down in the case of Essae Teraoka Pvt. Ltd Vs. DCIT [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] held that the assessee would be entitled to deduction of employees contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income u/s 139(1) - Also further held by the ITAT that amendment by Finance Act, 2021, to section 36[1][va] and 43B of the Act is not clarificatory. Therefore, the amended provisions of section 43B as well as 36(1)(va) of the I.T.Act are not applicable for the assessment years under consideration. By following the binding decision of the Hon ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT (supra), the employees contribution paid by the assessee before the due date of filing of return of income u/s 139(1) of the I.T.Act is an allowable deduction - Decided in favour of assessee. 2022 (2) TMI 227 Denial of exemption u/s 11 - Claim denied by the authorities below on the ground that the registration granted subsequently by the ld. CIT(E) was not operative to the year under consideration - HELD THAT:- The connotation of commencement, continuation and termination of `assessment proceedings‟ is fairly settled by authoritative pronouncement from the highest Court of the land in Auto Metal Engineers And Ors. Vs. Union of India Ors. [ 1997 (4) TMI 11 - SUPREME COURT] in which it has been held by the Hon‟ble Summit Court that the process of assessment commences with the filing of return or by issuance by the AO of notice to file a return and it culminates with the issuance of notice of demand u/s 156 - manifest that the assessment proceedings commence with the filing of return and not when notice is issued for the first time u/s 143(2). Issuance of such a notice and passing of assessment order are parts of entire assessment proceedings which commences with the filing of return. Assessee filed its return for the year under consideration on 17.01.2017. The approval was granted by the ld. CIT(E) u/s 12AA on 16.05.2017. It is, ergo, glaringly patent that the assessment proceedings for the year under consideration, which commenced with the filing of return on 17.01.2017, were pending on the date of grant of registration by the ld. CIT(E) on 16.05.2017. Therefore, hold, in principle, that the assessee is eligible for exemption u/s 11 of the Act. AO denied the benefit of exemption u/s 11 on the threshold by holding that the registration granted to the assessee was not applicable for the year under consideration. He, therefore, did not examine the amount of income actually entitled to exemption in terms of section 11 on merits. Since have set aside the view of authorities below on the question of availability of exemption, we set aside the impugned order and restore the matter to the file of the AO for examining the amount of claim of exemption u/s 11 on merits. - Appeal is allowed for statistical purposes 2022 (2) TMI 226 Deduction u/s.54B - Claim denied which was not claimed by the assessee while filing the return - assessee had not raised the aforesaid claim for deduction u/s. 54B either in his Original return of income filed u/s. 139(1) of the Act; or by filing a revised return of income u/s 139(4) of the Act; or by moving a rectification application u/s 154 of the Act; or in the return of income filed in compliance to Notice u/s 148 - HELD THAT:- Admittedly, as per the settled position of law it is not permissible for an assessee to raise a fresh claim for deduction otherwise than by filing a revised return of income. Our aforesaid view is fortified by the judgment GOETZE (INDIA) LIMITED [ 2006 (3) TMI 75 - SUPREME COURT] held that the limitation in entertaining a claim for deduction otherwise than by filing a revised return of income is limited to the power of the assessing authority and does not impinge on the powers of the Income-tax Appellate Tribunal. Hon ble High Court of Bombay in the case of CIT Vs. Pruthvi Brokers Shareholders (P) Ltd.[ 2012 (7) TMI 158 - BOMBAY HIGH COURT ] had after taking cognizance of the judgment of the Hon‟ble Supreme Court in the case of Goetze (India) Ltd. (supra) observed, that an assessee in the course of proceedings before the appellate authorities is entitled to raise additional grounds not merely in terms of legal submissions, but also additional claims to wit claims not made in the return filed by it. The assessee at the time of filing of his returns of income u/s. 139(1) and u/s 148 of the Act had remained under a bonfaide belief that as the agricultural land in question i.e at Village Dharampura was situated beyond the municipal limits, and thus not a capital asset‟, therefore, the gain on transfer of the same was not exigible to tax under the Act. Accordingly, backed by his aforesaid conviction, the assessee in our considered view had no occasion to have raised in his aforesaid returns of income filed u/s 139(1) and u/s 148 of the Act a claim for deduction u/s 54B w.r.t the investment that was made by him towards purchase of new agricultural lands. In fact, it was only after the aforesaid claim of the assessee for exemption of the gain on transfer of the agricultural land in question was scuttled by the A.O for the reason that the agricultural land in question was situated within the municipal limits, and thus, was a capital asset, that the assessee on account of such changed circumstances had raised the aforesaid claim for deduction u/s 54B. The assessee at the time of filing of his returns of income u/s. 139(1) and u/s 148 of the Act had remained under a bonfaide belief that as the agricultural land in question i.e at Village Dharampura was situated beyond the municipal limits, and thus not a capital asset‟, therefore, the gain on transfer of the same was not exigible to tax under the Act. Accordingly, backed by his aforesaid conviction, the assessee in our considered view had no occasion to have raised in his aforesaid returns of income filed u/s 139(1) and u/s 148 of the Act a claim for deduction u/s 54B w.r.t the investment that was made by him towards purchase of new agricultural lands. In fact, it was only after the aforesaid claim of the assessee for exemption of the gain on transfer of the agricultural land in question was scuttled by the A.O for the reason that the agricultural land in question was situated within the municipal limits, and thus, was a capital asset, that the assessee on account of such changed circumstances had raised the aforesaid claim for deduction u/s 54B - Decided against revenue. 2022 (2) TMI 225 Delayed payment of employee contribution to ESI (6 days delay) u/s.43B - HELD THAT:- This issue is covered by the order of this Tribunal in the case of M/s. Jana Urban Services For Transformation Pvt. Ltd. [ 2021 (10) TMI 842 - ITAT BANGALORE ] wherein as find no merit in the argument of the ld. DR since the explanation as provided in Finance Act 2021 prescribes that the amendment in both sec. 36(va) as well as 43B by inserting corresponding explanation that although impugned PF comes in the form of provision and the same is applicable from 1/4/2021 onwards only. In the present case we are concerned with the asst. year 2017-18 and the amended provision could not be applied retrospectively as it is only applicable w.e.f 1/4/2021. Being so no disallowance could be made by the AO in respect of PF/ESI paid within the due date of filing return of income. Though, it was beyond the date mentioned in the respective Act. This view of ours is supported by various judgment relied on by the ld. AR. Accordingly the appeal of the assessee is allowed. 2022 (2) TMI 224 Disallowing the interest paid on Loan - As argued AO has not recorded satisfaction with regard to genuineness of the transactions entered by the appellant and not provided an opportunity - HELD THAT:- We note that the utilisation of the loan by assessee has not been verified by the authorities below. In the submission filed by assessee dated 03.08.2021, assessee has placed summary of payments made subsequent to the loan having waived. All these details along with the balance sheet from the year in which such loan was taken needs to be looked into before coming to such conclusion. CIT(A) has not called for any details to verify the contentions of the assessee. The entire disallowance is based on surmises and conjectures and therefore cannot be appreciated. We are therefore inclined to remand this issue to the Ld. CIT(A) to carry out necessary verification in respect of the details filed by assessee. The assessee is thus directed to file all the relevant documents in support of its contention and the utilisation of the loan amount. CIT(A) is directed to pass detailed order on merits in accordance with law. Needless to say that proper opportunity of being heard must be granted to assessee. Grounds raised by assessee stands allowed for statistical purposes 2022 (2) TMI 223 Reopening of assessment u/s 147 - Eligibility of reason to believe - change of opinion - assessee challenged the reopening of the assessment on the ground that the AO has reopened the assessment on mere change of opinion without any fresh tangible material, which is evident from the fact that in the Proceedings the AO examined the cash deposits into the bank account - HELD THAT:- We are of the opinion that the assessee has already disclosed all the information before the AO in the original proceedings itself and the entire information is already available in the assessment record and also this fact is already confirmed in the remand report. There is no fresh tangible material with the AO to form reasonable basis of escapement of income which is evident from the fact that the AO is in the reasons referred to return of income. Hence, it is clear that there is no fresh material available with the AO to re-open the assessment. Therefore, we are of the view that it is only change of opinion on the existing information. Accordingly, re-opening has to be quashed. The Ld. CIT(A) after considering relevant facts has rightly quashed the reopening of assessment. Hence, we are inclined to uphold order of the Ld. CIT(A) and dismiss revenue appeal. 2022 (2) TMI 222 Ad hoc addition at 1/3 of the development expenses for want of printed receipts and vouchers which were not permissible under law - HELD THAT:- We think that both the AO and the CIT(A) has estimated expenditure on pure guess and suspicion. There were no dispute by the AO and CIT(A) that the assessee has incurred expenses for land development charges. The only reason AO noted is that the assessee has not produced any document or evidence in support of the expenses incurred as land development charges. We have given our thoughtful consideration to facts of the present case and in the light of reasons given by the AO to make ad hoc disallowance of expenses and we ourselves don't agree with the reasons of the AO for making Ad hoc 1/3rd of disallowance of expenses for the simple reasons that unless the AO make out specific cases of expenses, which is not supported by evidence, he cannot make Ad hoc disallowance. At the same time it is also admitted fact the Assessee also failed to produce necessary evidence. Therefore, we are of the considered view to settle the dispute between the parties we deem it appropriate to direct the AO to restrict the disallowance of expenses to 10% of the land development Expenses disallowed by the AO - We allow this appeal with modification of prayer made by the assessee and set aside the order of the Ld. CIT(A) and hence partly allowed. 2022 (2) TMI 221 Employee's contribution to ESIC and PF deposited delayed - HELD THAT:- Since admittedly the issues stand covered against the assessee by the decision of the Jurisdictional High Court in the case of GSRTC [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] which has also been followed by the ld. CIT(A) while dismissing the assessee's appeal, we have noted, We see no reason to interfere in the order of the Ld. CIT(A) upholding the addition made to employee's contribution to ESIC and PF deposited delayed - The appeal of the assessee is therefore dismissed. 2022 (2) TMI 220 Taxability of freight charges from transportation of cargo through feeder vessels - DTAA between India and Germany - HELD THAT:- As per chart submitted by the learned authorized representative the percentage of income from feeder vessels to the total freight income for the impugned assessment year is merely 0.69%. All the arguments raised before us by the learned departmental representative has been considered in the decision of the coordinate benches as well as in the decision of the honourable High Court holding in favour of the assessee. Therefore, respectfully following the decisions of the honourable High Court [ 2012 (8) TMI 681 - BOMBAY HIGH COURT] and coordinate benches in assessee's own case starting from assessment year 2005 - 06 to assessment year 2016 - 07 we allow ground number 2 - 4 of the appeal holding that freight charges earned by assessee from transportation of cargo through feeder vessels is also eligible for benefit of Article 8 of the Double Taxation Avoidance Treaty between India and Germany. Short grant of TDS credit - assessee's claim is that the income involved in the TDS certificate does not pertain to Indian entity but to the assessee - HELD THAT:- TDS is claimed as credit by the assessee. The Indian entity did not claim any credit of the above TDS. The Tax Deducted At Source (TDS) in form No. 26 AS is shown in the name of the Indian entity. As the assessee has shown the income involved in this TDS certificates and in turn also claimed benefit of Article 8 and the benefit of DTAA, the credit for such tax should be granted to the assessee. The claim of the assessee is that Rule 37BA is required to be complied with. It is also submitted that merely because the deductor does not revise the TDS return, it cannot go against the assessee for the claim of the above refund. The assessee raised this additional ground before the learned Dispute Resolution Panel. The Dispute Resolution Panel admitted the above additional ground along with additional evidences. It also obtained the comments from the Assessing Officer and rejoinder of the assessee thereon. The learned Dispute Resolution Panel directed the learned Assessing Officer to carry out the necessary verification and to grant credit. The assessee was also directed to submit all relevant details and clarification thereon. But AO did not consider and carry out such directions. As the issue identical facts emerged in earlier year, we respectfully following the order of the coordinate bench in assessee's own case for assessment year 2016 - 17 also direct the Assessing Officer similarly. 2022 (2) TMI 219 Bogus capital created - Addition on account of alleged beneficiary of capital creation of 43 benamidars - fictitious capital were never used which were only paper entries - AO made addition by taking view that no evidence is filed by the assessee that entire transaction is owned by M D Patel in his petition before ITSC - CIT-A deleted the addition - HELD THAT:- CIT(A) in his finding has clearly held that there is no funds transfer from 43 persons to the assessee in the current year and in absence of fund for accommodation entry in the form of gifts, loan and there is no reason to tax the fictitious capital created in case of other taxpayer in the hands of assessee. Thus, in view of above factual and legal discussions and keeping in view of the decisions of Tribunal in various case of assessee s group we affirm the order of the ld CIT(A). One more reasons to affirm the order of ld CIT(A) that the AO in case of Alkaben Amrutram and Kanchanlala Rana [ 2016 (8) TMI 1563 - ITAT AHMEDABAD] which were restore by Tribunal to the file of AO to verify the issue of capital crated in these cases and in pursuance of direction of the Tribunal, the AO verified the issue of bogus capital formation and completed the assessment without making additions of bogus capital created and accepted the similar version of those assessee. Thus, ground No.1 2 of the revenue is dismissed. Unexplained gifts - assessee has failed to prove with documentary evidence that the alleged gifts were received from the persons who were among the parties owned up by Shri M.D. Patel before the settlement commission - CIT-A deleted the addition - HELD THAT:- CIT(A) while deleting the addition of gifts recorded that before AO the assessee filed affidavit about narrating the similar facts that the amount of Gift is also owned by MD Patel, but he has not accepted it. The ld CIT(A) after considering the report of PCIT dated 04.01.2017, and other order passed by him in similar cases of group deleted the addition of gift . On perusal of various details as recorded in para-17 (supra we find that the either the AO or CIT(A) or ITSC has accepted the fact that entire transaction of capital creation is owned by MD Patel, therefore ,we affirm the order of ld CIT(A). No contrary factor law is brought to our notice to take other view. In the result, we do not find any merit in the ground No.3 of the appeal. 2022 (2) TMI 218 Carry forward of long-term capital loss arising on sale of listed company shares on which STT was paid with the long term capital gain arising there from is exempt tax u/s.10(38) - HELD THAT:- Mumbai Tribunal in the case of Raptakos Brett Co. Ltd. [ 2015 (6) TMI 529 - ITAT MUMBAI] has attained finality as the appeal preferred by the department against the said decision has been dismissed by the Hon ble Jurisdictional High Court, though, due to non-prosecution. Thus, we do not find any infirmity in the order of the Ld.CIT(A) in allowing the claim of carry forward of Long Term Capital Loss arising from sale of equity shares. With regard to case law relied by the Ld. DR in the case of Apollo Tyres Ltd., v. DCIT [ 2021 (9) TMI 708 - KERALA HIGH COURT] the issue involved in that case was whether long term capital loss incurred on which STT paid could not be set off against long term capital gain arising out of sale of land, the issue is factually distinguishable. With regard to Nikhilsawhney v. ACIT [ 2020 (8) TMI 508 - ITAT DELHI] this case was pronounced on 17.08.2020 and subsequently Coordinate Bench has decided the issue in favour of the assessee. Aggrieved, when revenue preferred appeal before Hon'ble Jurisdictional High Court, the same was dismissed. Therefore, the issue under consideration reached finality. In view of the aforesaid observations and respectfully following the judicial precedents relied upon hereinabove, we do not find any infirmity in the order of the ld. CIT(A) granting relief to the assessee. Accordingly, grounds raised by the revenue are dismissed. Assessment u/s 153A - Disallowance u/s.14A of the Act r.w.r. 8D(2) and denial of set off of brought forward long term capital loss with long term capital gain - HELD THAT:- Admittedly, the assessment for A.Y.2012-13 being unabated assessment, there cannot be any disturbance to the originally concluded assessment / appellate proceeding unless there is any incriminating material found during the course of search relatable to such assessment year. As stated earlier in the instant case, no such incriminating material has been referred by the ld. AO in his order for framing these two additions / disallowances. This issue is no longer res integra in view of the decision of the Hon ble Jurisdictional High Court in the case of Continental Warehousing Corporation [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] wherein it had been categorically held that no addition could be made in respect of assessments which have become final if no incriminating material is found during search. - Decided in favour of assessee. 2022 (2) TMI 217 Delayed deposit of employee's contribution towards Provident Fund and ESI after the due date specified - the amount of contribution has been deposited well before the filing of return of income - the consistent claim of the assessee has remained that the Employee's deposit was with a marginal delay but it has been deposited well before the due date of filing of the Return of Income - HELD THAT:- We hold that the disallowance sustained in the present appeal by the CIT(A) qua the employees' contribution despite late payment qua the specific Act cannot be made. Admittedly, in the facts of the present case the payment has been made well within the time line as set out under the Income Tax Act u/s. 139(1) of the Income Tax Act. Thus, admittedly the return of income was filed well within time after making the specific payments. The position of law that the Amendments carried out by the Finance Act, 2021 are prospective in nature and not declaratory stand well settled. The disallowance, accordingly, cannot be sustained - Decided in favour of assessee. 2022 (2) TMI 216 Addition u/s. 36(1)(va) - Delayed employees' contribution to PF and ESI - as argued appellant collected ESI and PF from salary of the employees and whole of the amount had been deposited well before the due date of filing of Income Tax Return - scope of amendment - HELD THAT:- As the amendments carried out by the Finance Act, 2021 in Section 36(1)(va) and 43B were considered by the First Appellate Authority to be clarificatory in nature, hence, retrospective in operation. We have seen that this issue has been considered by the jurisdictional High Court in the case of CIT Vs Hemla Embroidery Mills (P) Ltd. [ 2013 (2) TMI 41 - PUNJAB AND HARYANA HIGH COURT ] as following the decision in case of Alom Extrusions Limited [ 2009 (11) TMI 27 - Supreme Court wherein it has been held that Second Proviso to Section 43B omitted by F.A, 2003 with effect from 1.4.2004 was clarificatory in nature and was to operate retrospectively. Once that is so, the respondent-assessee was entitled to deduction in respect of employer and employee's contribution to ESI and Provident Fund as the same had been deposited prior to the filing of the return u/s 139(1). - Decided in favour of assessee 2022 (2) TMI 215 Depreciation @ 10% on improvements carried out in the lease hold premises - Assessee claimed 100% depreciation on the leasehold improvements as the improvements were of the nature falling within the ambit of part-A in Appendix-I to the Income Tax Rules, 1962 (Rules) under the head Tangible assets entry (4) Purely temporary erections such as wooden structure - HELD THAT:- As rightly observed by the CIT(A), the very fact that the assessee has claimed depreciation on the lease hold improvements only means that the assessee has treated the expenditure incurred on lease hold improvements as capital expenditure. Learned Counsel however made a submission that the treatment in the books of accounts is not final and determinative. While we agree with this proposition that treatment in the books of accounts is not conclusive but we observe that the issue whether the expenditure is capital or revenue is nature has not been examined by the lower authorities. In this regard, we find that though a specific ground viz., ground No.8 was raised by the assessee before the CIT(A) in this regard, the CIT(A) did not examine this issue specifically. The ingredients and prerequisites of a capital expenditure or revenue expenditure would remain the same, and not undergo any change depending on whether the building is owned or occupied as lessee or other occupancy rights leased premises. As already stated this issue though raised by the assessee before the CIT(A) and the grounds of appeal No.9 to 12 before the Tribunal as an alternative ground has not been examined by the CIT(A). In these circumstances, we are of the view that the issue needs to be set aside for fresh consideration by the CIT(A) as to whether the expenditure in question is capital or revenue in nature. We therefore allow this appeal for statistical purposes by remanding the said issue for consideration by the CIT(A). In this regard we find that the decision cited by the learned Counsel for the assessee in assessee s own case for Assessment Year 2001-02 which relates to issue whether the improvements to lease hold premises were capital or revenue in nature, would become relevant. Appeal of the assessee is allowed for statistical purposes. 2022 (2) TMI 214 Rectification of mistake - Default for non-deduction of tax u/s 206C(1) in respect of scrap sales affected and levy of penalty u/s 271CA - Co-ordinate Bench has decided the matter in favour of the assessee treating the assessee no default for non-deduction of tax u/s 206C(1) whereas when it comes to the matter relating to levy of penalty u/s 271CA, matter has been restored back to the file of Assessing Officer to decide the same afresh and thereafter, in para 11, both the appeals of the assessee are allowed for statistical purposes. HELD THAT:- As apparent mistake which has crept in the order of the Co-ordinate Bench wherein in the quantum proceedings, the matter has been decided in favour of the assessee and in the same order, the matter relating to consequent levy of penalty has been restored back to the file of the AO. Therefore, the findings recorded in para 10 while disposing off ground relating to levy of penalty u/s 271CA is hereby rectified/amended with the following findings which shall read as under:- As we have held in Para 4 above that there is no merit in the orders of the AO treating the assessee in default for non deduction of tax u/s 206C(1) of the Act in respect of scrap sales affected by him during the year under consideration, the consequent levy of penalty u/s 271CA of the Act is hereby directed to be deleted. Further, in concluding para 11, in place of existing finding, it should read as Both the appeals of the assessee are allowed . Subject to above changes in Para 10 and 11 of the order passed by the Tribunal, there is no other change in the order so passed -miscellaneous applications so filed by the assessee are disposed off in light of aforesaid directions. 2022 (2) TMI 213 Revision u/s 263 by CIT - doubt on account of sales - HELD THAT:- Assessing Officer conducted enquiry and passed the assessment order after considering the reply filed on behalf of the assessee.In the present case, no case of insufficient stock has been made against the assessee and that being so, the doubt on account of sales is unsustainable. Regarding the observations of the ld. CIT, doubting the cash sales made by the assessee it has not been disputed, when contended that the Diwali festival for the year under consideration fell on 30.10.2016 and the Diwali season ended with Chhath Puja on 6/7.11.2016. It has also not been challenged that the sale of silver is higher during this period - doubt entertained by the ld. CIT is based on merely surmises and conjectures. It again does not stand disputed that a month-wise chart of quantity and value of stock was duly submitted by the assessee before the Assessing Officer in the assessment proceedings. This is an annexure to the trading account and monthly salaries of silver ornaments and silver for the period from 1.4.2016 to 31.3.2017. Non-deposit of cash from sales made from 1.11.2016 to 8.11.2016 , it is trite that this is the prerogative of the assessee and the Department cannot step into the shoes of the businessman to determine such a matter as the time of deposit of money in the bank. Assessing Officer did not verify the sales trend from VAT returns and from the books of account of the preceding year, the assessee had submitted financial statements of the year under consideration before the Assessing Officer. These financial statements contained the figures of sales of the preceding years also. This also points to the fact that it was not a case of no enquiry. Rather, the view of the CIT is that adequate enquiry was not carried out by the Assessing Officer. This, to reiterate, is not the purpose or purport of proceedings under section 263 of the Act. The Assessing Officer, obviously, had verified the sales from the financial statements and the books of account and, as such, it cannot be said that proper enquiry had not been made by the Assessing Officer. The assessee s VAT assessment order for the year under consideration - Decided in favour of assessee. Customs 2022 (2) TMI 212 Requirement of No Objection Certificate (NOC) from the Plant Protection, Quarantine and Storage Department as per the Clause 3(16) of the Plant Quarantine (Regulation of Import into India) Order, 2003 - import of consignment of Bamboo Sticks - It is the specific case of the petitioner that though the Plant Protection, Quarantine and Storage Department had issued a No Objection Certificate (NOC) to the petitioner to import as early as on 14.05.2020, it was not properly uploaded in the ICEGATE server of the respondent/ Customs Department for assessing the Bill of Entry, as a result of which, the container in which the imported Bamboo Sticks were imported attracted detention charges from the Liner - HELD THAT:- The fact on record indicates that the petitioner had filed Bill of Entry on 24.04.2020 and Plant Protection, Quarantine and Storage Department had processed the No Objection Certificate (NOC) on 14.05.2020. The No Objection Certificate (NOC) was however not uploaded for the reasons not known to the petitioner. Therefore, the petitioner kept sending representations to Help Desk of the Customs ICEGATE. Ultimately, No Objection Certificate (NOC) dated 14.05.2020 was uploaded only on 25.05.2020 - petitioner has asked for a Detention Certificate for the period from 15.05.2020 to 25.05.2020. The respondent vide impugned Communication has rejected the request of the petitioner stating that there is no provision to issue Detention Certificate due to the Technical Error in ICEGATE and therefore, the Detention Certificate cannot be issued as prayed for by the petitioner. The method of filing of Bill of Entry and Exchange of information for assessment is online in the ICEGATE. Therefore, the delay on account of any technical glitches / error in uploading the relevant information document by the concerned Department cannot saddle an importer with liability unless the delay was itself on account of the importer. In this case, the respondent has not been able to show how there was any delay on the part of the petitioner. The clarification of the Central Board of Customs in C.B.E.C.F.No.501/9/75-Cus.VI , dated 01.12.1976 is still relevant. The benefit of the said clarification will enure to the petitioner mutatis mutandis in the context of assessment of Bill of Entry under the Bill of Entry (Electronic Integrated Declaration and Paperless Processing) Regulations, 2018. An importer cannot be denied Detention Certificate if the delay was not on account of any fault of the importer, but on account of the technical glitches in the system. The respondent are directed to issue Detention Certificate to the petitioner within a period of thirty (30) days from the date of receipt of a copy of this order - petition allowed. 2022 (2) TMI 211 Duty Drawback - Advance Licences for Duty-free import of goods - drawback for 50% of FOB value - failure to discharge export obligation - Section 75 of the Customs Act, 1962 - HELD THAT:- Section 75 of the Customs Act, 1962 allows Duty drawback on the imported materials that were used in the manufacture of goods which are exported. Here in the case on hand, it is the case of the appellant that the appellant did not use the imported materials in the manufacture of the exported goods since the date of the Advance Licences were much later. In the statement of facts in the appeal memorandum, the appellant has given licence numbers along with dates - The requirement of Section 75 is the use of the imported materials in the export of manufactured goods, which is seriously disputed by the appellant, which aspect has to be properly brought on record. There is also nothing on record as to whether the imported goods under the Advance Licences in question were actually seized, because the Order-in-Appeal refers to a different Advance Licence of a different date altogether. The benefit of Section 75 ibid namely the drawback should be allowed of duties of Customs chargeable under Customs Act cannot be denied as the benefit of duty drawback is allowable on the imported goods used in the manufacture of goods which are exported. Revenue has nowhere disputed the fact of export made by the appellant. Hence, the impugned order is contrary and not in accordance with the scheme of the statutory provision as provided under Section 75 ibid - there is no justification or logic in adopting the drawback for 50% of FOB value which is also not as per Section 75 ibid and by virtue of this also, the impugned order is a non-speaking order. The impugned order is not sustainable since the same is not in accordance with the letter and spirit of the provisions of Section 75 of the Customs Act, 1962 and hence, the matter is required to be remitted back to the file of the Commissioner for passing a fresh speaking order considering the observations and after giving sufficient opportunities to the appellant - Appeal allowed by way of remand. 2022 (2) TMI 210 Rectification of mistake - error apparent on the face of record - Levy of penalty - export of red sanders - prohibited goods or not - HELD THAT:- It has been recorded in the final order that the appellant Custom Broker inspite of having already handled eight export consignment in the past, till the inspection of the 9th consignment, has never met the exporter or the owner of M/s Fashion World, nor he had met any of the relevant person(s) namely Reyaz Ahmed @Rajbir @ Dharmender, who represented M/s Fashion World. In the final order it has been also observed that this appellant have placed great reliance on the freight forwarders through whom he had received the work as well as the documents for KYC. At no stage, the appellant CHA received the documents directly from the office of the exporter. It has been rightly concluded in the final order that though this appellant and others have not made any big gain, in the attempted export of the prohibited goods, by the exporter. However, there has been element of negligence and/or vigilance on their part which has facilitated attempted exported of prohibited goods. There is no error in the final order - there is no merit in the RoM application, the same is dismissed. 2022 (2) TMI 209 Valuation of imported goods - LPG Butane - LPG Propanemis - declaration of country of origin - whether country of origin was Iran and not UAE as declared by the respondents? - seeking enhancement of value on the basis of freight and insurance charges - IOPPL (respondent) and their officers were guilty of any misdeclaration or not - levy of penalty - rejection of refund claim. Misdeclaration of goods - HELD THAT:- The Revenue while investigating the case has not referred the matter to the originating country seeking for any clarification or cancellation of the said country of origin certificate issued by the Chambers of Commerce and Industry of that country. As long as authentic documents are not disowned or corrected by the authorities in the country of origin, the respondents cannot be faulted in the declarations they have filed at the time of Bill of Entry. Confiscation - HELD THAT:- Learned Commissioner proceeds to confiscate the goods. Learned Counsel for the respondents submits that this is not tenable as no mala fide intention has been attributed to the respondents; he relies upon Oriental Containers Ltd. [ 2003 (3) TMI 126 - HIGH COURT OF JUDICATURE AT BOMBAY ] wherein it was held confiscation of goods is not correct when the assessee was innocent victim of the fraud played by the foreign supplier and that the assessee should not be held guilty of violation of the provisions of Customs Act - Learned Commissioner finds that penalty under Section 114AA can be levied only if a person has knowledge and intent in commission or omission under the Act and therefore, he was not inclined to impose any penalty under Section 114AA of the Customs Act, 1962. Redemption fine - penalty - HELD THAT:- The Redemption fine and penalty should be imposed depending on the facts of the case and the seriousness of consequences of misdeclaration. Looking into the fact that mens rea is absent in the instant case, we find that redemption fine and penalty can be reduced. In the circumstances where it is held by adjudicating authority that respondents did not have mens rea, the imposition of redemption and penalty can be at a minimal level commensurate with the commission or omission by the respondents. Accordingly, the redemption fine imposed under Section 125 reduced from ₹ 50,00,000/- to ₹ 5,00,000/- and penalty imposed under Section 112 on M/s. IOPPL repaired from ₹ 20, 00,000 to ₹ 2,00,000/-. Valuation of goods - HELD THAT:- Having gone through the documents presented by the Learned Counsel for the respondent during the hearing, it is convincing that the price was on CFR terms and that the country of origin could not have affected the transaction value in the instant case - Coming to the alleged undervaluation on account of Insurance paid, we find that the respondents have demonstrated with documentary evidence that they have paid insurance premium of ₹ 55,049/- towards the insurance. It is thus found that the department s averment that as freight and insurance were not available, they should be considered at the time of notional levels in terms of Rule 10 (2) of CVR 2007 is not acceptable - the Learned Commissioner s order, as far as demand of duty on the basis of notional value of freight and insurance is concerned, does not require any interference. Refund claim - CBEC vide circular dated 22.02.2001 - HELD THAT:- The departmental officers are bound by the directions of the CBEC, where it was held that no refund/rebate claim should be withheld on the ground that an appeal has been filed against the order giving the relief, unless stay order has been obtained. - Moreover, as submitted by the Learned Counsel, the respondents in the instant case have made a security deposit of ₹ 8 crores and have been sanctioned a refund of ₹ 7.30 crores by the Assistant Commissioner which was reversed by the Commissioner (Appeals). As submitted by the Learned Counsel for the respondents that this is a case of refund of security deposit and department cannot withhold the amount citing the reason that an appeal is pending before CESTAT - retention of amounts, by department, at least over and above the amount that would have eventually fallen due from the respondent, on completion of legal process, is an excessive action in contravention of the instructions issued by the Board. The order of Learned Commissioner (Appeals) is not legally tenable and cannot be upheld - Appeal of the assesse allowed - Revenue appeal dismissed - decided against Revenue. 2022 (2) TMI 208 Jurisdiction - proper officer to issue SCN - DRI issued Show Cause Notice, valid or not - SCN proposed to recover the alleged short-paid customs duty invoking extended period in terms of proviso to section 28(1) of the Customs Act, 1962 - HELD THAT:- The Hon'ble jurisdictional High Court in the case of Quantum Coal Energy P. Ltd. [ 2021 (3) TMI 1034 - MADRAS HIGH COURT ] has applied the decision of the Hon'ble Supreme Court in the case of Canon India Pvt. Ltd. Vs. Commissioner of Customs [ 2021 (3) TMI 384 - SUPREME COURT ] to hold that the Show Cause Notice issued by DRI is invalid and the proceedings initiated cannot sustain - Applying the decision of the Hon'ble Supreme Court in Canon India Pvt. Ltd. the Tribunal held that the Show Cause Notice issued by DRI is invalid. The Show Cause Notice having been issued by DRI are ab initio void - Appeal allowed - decided in favor of appellant. 2022 (2) TMI 207 Jurisdiction - notice not issued by competent person - scope of 'Proper Officer' - Valuation of imported goods - mis-declaration of value in the 11 Bills of Entry - rejection of declared value - demand of differential duty - Section 28(4) of Customs Act - Confiscation - penalties - HELD THAT:- The constitutional validity of section 28(11) of the Act was challenged before the High Court of Delhi in the case of M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 2016 (5) TMI 225 - DELHI HIGH COURT ]. The High Court held that the section is constitutionally valid but set aside its retrospective application. Revenue appealed to the Supreme Court and the operation of this judgment and order of the Delhi High Court was stayed by the Supreme Court [ 2016 (8) TMI 1181 - SC ORDER ] - Sub-section (11) of section 28 of the Act has not been set aside by any High Court or Supreme Court and hence it continues to be in force till date. In fact, its constitutional validity has been examined and upheld by the High Court of Delhi in Mangali Impex. Thus, after the amendment, there are several proper officers‟ under section 17 with respect to the same type of goods imported through the same port/ airport/land customs station such as the assessing officer of the Appraising Group (appraiser or Assistant Commissioner or Deputy Commissioner) of the Custom House, the officers of the preventive Commissionerates who have jurisdiction over the area, the central excise officers who may have been notified as customs officers in the area, officers of Directorate of Revenue Intelligence who have jurisdiction over the area, etc. The decision of Supreme Court in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [ 2021 (3) TMI 384 - SUPREME COURT] is not only that officers of DRI were not proper officers under Section 2(34) of the Act, but the power of issuing a notice under Section 28 of the Act is conferred on the proper officer and not a proper officer or any proper officer. The proper officer for this purpose is held to be the officer of the appraising group who has assessed the Bill of Entry in the first place or his successor in office. This is because the notice under section 28 of the Act is a power of re-opening an assessment which is not inherent and is specially conferred on the assessing officer who alone can exercise it. As the SCN itself has been issued in this case by a person not competent to issue a demand under section 28 of the Act, the demand cannot be sustained. Neither can the proposals for confiscation and imposition of penalties which follow the confirmation of such demand - Demand do not sustain - appeal allowed - decided in favor of appellant. Insolvency & Bankruptcy 2022 (2) TMI 206 Seeking direction to Interim Resolution Professional (IRP) to admit the claim of the applicant company towards the interest component - seeking direction to Resolution Professional to re-examine the principle of law on the point of limitation and reconsider the claim of the petitioner on the point of principal amount - Resolution Professional only admitted the claim towards Principal amount and without any cogent basis, rejected the interest component - rejection of interest component on the ground that interest amount claimed by the Appellant was not booked by the Corporate debtor in its books of accounts and no TDS was deducted by the Corporate debtor - HELD THAT:- The interest for the period from 01st August 2010 to 29th January 2019 (being CIRP commencement date) can be recognised as a liability of the Corporate Debtor and corresponding claim of interest can be admitted by the Resolution Professional, despite the fact that the interest for the said period is nowhere reflected in the Audited Financial statements of the Corporate Debtor or the Appellant. The data provided by the ex-management of the Corporate Debtor to the Resolution Professional, also nowhere match the amount of claim for interest. The interest was never booked as an expense by the Corporate Debtor (at page 25 of the Reply Affidavit) and never recognised as income by the Appellant (at page 17 of the Reply Affidavit) - The TDS was never deducted by Corporate Debtor and never availed by the Appellant - The loan agreement is ex-facie bogus, as it bears the rubber stamp of CIN of the Corporate Debtor and is neither Notarised nor registered, no stamp duty paid thereon. There was no requirement of mentioning CIN on the letterhead of the companies at the time of the purported date of the agreement and no subsequent requirement to mention the same on documents executed prior to enforcement of new Companies Act, 2013. This makes it clear that the said document at Annexure B of the Appeal is a fabricated document by ante-dating the same. The statement of accounts annexed as Annexure C at page 63 of the Appeal, purporting to be the ledger account of Appellant in the books of Corporate Debtor is also bogus as the same does not match with the audited account nor does it match with the tally data provided by the Ex- Management of the Corporate Debtor. It is also an admitted fact that the inordinate delay of 9 years in recognising of interest income by the Appellant in its Balance Sheet and also of no corresponding booking of interest in its accounts by the Corporate Debtor. There is no illegality committed by the Ld. Adjudicating Authority while passing the impugned order, therefore, we do not need to interfere in the impugned order - Appeal dismissed. 2022 (2) TMI 205 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - NPA - Personal Guarantors to Corporate Debtors - existence of debt and dispute or not - HELD THAT:- While availing the aforesaid loan/credit facilities, the CD did not maintain financial discipline and miserably failed to adhere to the terms and conditions laid out in the Working Capital Consortium Agreement. As a result, the account of CD was declared as NPA on 07.07.2015 - It is further stated that, a section 7 application under the I B Code, 2016, was filed by M/s. ICICI Bank Limited against the CD, for initiation of CIRP proceedings, which was admitted by the Hon'ble Tribunal on 19.03.2019. Eventually, this Hon'ble AA, vide order dated 24.12.2020, was pleased to finally approve the Resolution Plan for the CD in terms of Section 31(1) of the Code. The Ld, Counsel for the applicant further submitted that a Demand Notice in Form B, under rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtor) Rules, 2019, was issued by the Financial Creditor, i.e., DBS Bank India Limited on 21.01.2021, to the Personal Guarantor, in respect of the unpaid debt due from M/s. VIL Limited (Corporate Debtor), under rule 7(1) of the IBC Rules 2019. It is pertinent to mention that as per part-III of Form-C, the total debt from the personal guarantor, by way of personal guarantee given to M/s. DBS Bank India Limited, including interest, amounts to ₹ 59,65,43,741/- - It is made known to everyone that on the date of filing this Application by the Applicant/Creditor, the interim-moratorium commences, as stipulated under Section 96(1)(a), in relation to all the debts of the personal guarantor and shall cease to have effect on the date of admission of this Application and during the interim-moratorium period, few actions were prohibited. List the matter for further proceedings in the case on 21.02.2022. 2022 (2) TMI 204 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - pre-existing dispute - service of demand notice - HELD THAT:- As per Section 8 of the IBC, the CD has brought to the notice of the OC the pre-existing dispute for which he has submitted the email dated 22.02.2019 from the Company to the effect that all the DoA products are beyond 12 months from the date of manufacturing. In the reply dated 02.08.2019 to the demand notice dated 17.07.2019, reference has been made to the reply of HTC for not accepting the DoA, products - In view of the fact that there is a pre-existing dispute with respect to the goods returned by the OC to the CD, the application for initiating Corporate Insolvency Resolution Process against the CD is not maintainable and is liable to be dismissed. Application dismissed. 2022 (2) TMI 203 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - financial debt or not -existence of debt and dispute or not - WhatsApp conversation between the Parties can be admitted as evidence or not - pecuniary jurisdiction. Whether this application is maintainable and whether it is within the pecuniary jurisdiction of this Tribunal? - HELD THAT:- This Petition is filed before this Tribunal on 10.11.2020. The notification enhancing the pecuniary limits of this Tribunal is dated 24.03.2020. By virtue of the said notification issued by Ministry of Corporate Affairs, Government of India, the pecuniary limits are raised from ₹ 1 Lakh to ₹ 1 Crore w.e.f. 24.03.2020 - In the reply written submissions it is contended that the notification issued by the Central Government does not confer power upon the Tribunal to act retrospectively. But the Petitioner's Counsel fails to show that the Petition was filed before the NCLT, Hyderabad Bench prior to the notification - Hence the disputed amount being less than the pecuniary jurisdiction of this Tribunal, the Application needs to be rejected on that count. Whether the WhatsApp conversation between the Parties can be admitted as evidence? - HELD THAT:- The counsel tries to interpret section 20 of the Companies Act, in a way to admit the electronic evidence without section 65B certificate. But the said argument does not at all impress this Tribunal. Section 20 is only with regard to the service of notice on the opposite party. The proof of service through electronic mode would not form part of a record as an evidence whereas the WhatsApp messages are filed to be admitted as evidence. Hence it cannot be said that Section 20 of the Companies Act permits a party to produce electronic evidence without it being accompanied by the section 65B certificate. Hence, on the 2nd ground also the petition fails. Whether the Petitioner can be termed as Financial Creditor and whether the amount i.e., admittedly received by the Corporate Debtor can be termed as financial debt within the meaning of Section 5 (8) of IBC? - HELD THAT:- It is an admitted fact that the petitioner moved similar petitions before the NCLT, Hyderabad Bench and it is admitted that the facts and issues involved in those cases are the same as in this case. NCLT Hyderabad Bench has dismissed the Petition on the ground that the Petitioner failed to prove that the amount lent to the Corporate Debtor is a financial debt and that the Petitioner is a Financial Creditor. Unless the Petitioner succeeds in proving that the amount given to the Corporate Debtor is against time value of money, it does not qualify for the financial debt. There is absolutely no evidence to prove that the amount was given for the time value of money. Hence for the same reasons for which the earlier Petitions were dismissed, this Petition is liable to be dismissed on the said ground. The Petition is dismissed. PMLA 2022 (2) TMI 202 Seeking grant of bail - predicate and scheduled offences - pre-amended twin conditions, as cast in Section 45 of the PML Act, satisfied or not - HELD THAT:- There are divergent views expressed by the Hon'ble Apex Court, with respect to the resurrection, or, revival of twin conditions, as, carried in Section 45 of the PML Act, upon, a validating amendment being made thereto, post the decision made in Nikesh Tara Chand's case. Obviously, this Court is left with no alternative but to, in view of the above discussion, rather grant, than deny bail to the applicant, as the rule is of grant of bail, than of denial of bail. Moreover, when no evidence has been adduced, at this stage, by the prosecution, that in the event of grant of bail to the bail applicant-petitioner, there is any likelihood of his fleeing from justice, and, tampering with the prosecution evidence. Since the question, appertaining to the apposite validating amendment, rather reviving, or resurrecting the twin conditions, are still sub-judice, before the Hon'ble Apex Court. Consequently, also this Court deems it fit to accord the indulgence of bail to the bail applicant-petitioner. The reason being till the validating amendment to Section 45 of the PML Act, as made, post the decision in case Nikesh Tara Chand's case [ 2017 (11) TMI 1336 - SUPREME COURT ], becomes upheld, by the Hon'ble Apex Court, thereupto, it may not be appropriate to fetter the personal liberty of the bail applicant-petitioner. The granting of bail to the bail applicant-petitioner, is subject to conditions imposed - petition allowed. Service Tax 2022 (2) TMI 201 Refund of unutilized CENVAT Credit - Car parking Service - Interior Decorator Service - water supply services - telecommunication services - update of current trends in IT industry, SAP, etc. - payment made for an IT conference to M/s. Entrine Business Services Pvt. Ltd - services availed for getting the foreign exchange for the employees when they travel abroad on assignments - services of EEFC fund conversion into INR - consultancy service - HELD THAT:- It is seen that most of these services are very much essential in running the day-to-day business of the appellant and are necessary for the smooth functioning of its business. Surprisingly, the First Appellate Authority has denied the refund has been denied for want of nexus. However, the Central Board of Excise and Customs (C.B.E.C.) has itself done away with the requirement of nexus vide its letter D.O.F. No. 334/1/2012-TRU dated 16.03.2012, which is binding on the First Appellate Authority as well. Hence, demanding of nexus is clearly contrary to the guidelines of the C.B.E.C. letter dated 16.03.2012, for which reason the impugned order denying refund on the above services cannot be sustained. The same is therefore set aside and to this extent, the appeal stands allowed with consequential benefits, if any, as per law. Water supply services - HELD THAT:- No explanation was offered for the service, for which reason perhaps the authority has denied the benefit of refund. Before me, it is pleaded as above and the Learned Advocate for the appellant requested for a remand, for enabling the appellant to furnish supporting documents before the lower authorities. Hence, this issue is remanded back to the file of Adjudicating Authority, who shall consider all such documents that may be furnished by the appellant in support of its claim. Telecommunication service - Services of M/s. Bharti Airtel Ltd. - HELD THAT:- Since there is no finding with regard to the verification of documents, this issue is also remanded to the file of the Adjudicating Authority for re-verification of the appellant s claim in the light of the documents which are produced or which were produced, again, for convenience. The appeal stands partly allowed and partly remanded. 2022 (2) TMI 200 Exemption from service tax - Sl.No.12 of Notification No.25/2012 ST - MANIT is an Educational Institute of National Importance - governmental authority or not - HELD THAT:- The issue is no longer res integra and the same has been decided by the Hon‟ble Patna High Court in the case of SHAPOORJI PALOONJI COMPANY PVT. LTD. VERSUS COMMISSIONER, CUSTOMS CENTRAL EXCISE AND SERVICE TAX AND OTHERS [ 2016 (3) TMI 832 - PATNA HIGH COURT] , wherein Shapoorji Paloonji Co. constructed the buildings for the IIT, Patna. The Hon'ble High Court held that the Governmental Authority as defined under the said notification, wherein, if an institute or body is set up by an Act of Parliament or State Legislature, then the other conditions i.e. 90% or more participation by way of equity or control by Government will not be applicable - The facts herein are similar to the facts in the case of Shapoorji Paloonji Company Pvt. Ltd. The substitution vide Notification No.02/2014-ST dated 30.01.2014, of the definition of Governmental Authority‟ is made, the same shall have the retrospective effect, as substitution relates to the date of original notification as per the Rules of the Interpretation - the Commissioner (Appeals) has erred in holding that substituted definition of Governmental Authority shall not have the retrospective effect. The impugned order is set aside, so far it confirms the demand and penalty for the period April, 2013 to Jan./June, 2014 - Appeal allowed. 2022 (2) TMI 199 Levy of penalty u/s 76 and 77 of FA - service tax paid on being pointed out - intent to evade - suppression of facts or not - credit for the tax paid has not been given - HELD THAT:- There is no malafide or suppression of facts on the part of the appellant. The appellant have bonafidely deposited the tax prior to the issuance of show cause notice and passing of the order-in-original dated 9.9.2020. The appellant is entitled to benefit under Section 180 and no penalty is imposable. Accordingly, the appeal is allowed. The penalties imposed under Section 76, 77 and 78 are set aside. The appellant is also entitled to credit of the taxes deposited ₹ 1,74,652/- - Appeal allowed. 2022 (2) TMI 197 Refund of service tax paid - rejection on the ground of failure to cross the bar of unjust enrichment - HELD THAT:- Most of the cost of tax is actually passed on to the buyers but such shifting the burden if remains backward then the cost of tax is borne by those who are engaged in producing the product. Example of such Shifting and Incidence , as noted in the Encyclopaedia, was lowering wages and salaries, lowering price of raw materials or a lower return on borrowed capital. However, in some cases tax may not be shifted at all and the payer bears the burden. Example of such incidence is stated in the said paragraph as reducing the net income of the business owner by way of reducing the business benefit. It is difficult to understand from where he borrowed this inference that ultimate incidence of all taxes shifts from business to the consumer and mere reflection of the same in the books of account (perhaps he meant thereby receivable) does not reflect actual shifting of incidence. No prudent man would concur to his finding that is based on erroneous understanding of simple English sentence available in the Encyclopaedia Britannica strangely he equated most of the cost of tax with all taxes . Therefore, the reasoning in his order on failure of the Appellant to pass the burden of unjust enrichment appears to be erroneous. Appeal allowed. Central Excise 2022 (2) TMI 198 Recovery of Central Excise Duty - Clearances made by not making consignment-wise payment without utilising cenvat credit shall not be deemed to have been cleared without payment of central excise duty - HELD THAT:- The assessee submitted their reply dated 26.10.2007 stating that they are a small scale unit engaged in the manufacture of engineering goods and those goods would fall under Chapter 73 of the Central Excise Tariff Act on tailor made basis. Further, they stated that they have failed to pay the duty of ₹ 6,15,000/- by the due date, i.e., 05.09.2007 as they were facing financial hardship but they have paid the entire amount of duty with interest on 18.10.2006. Further, they stated that there is no mens-rea on their part for not paying the duty on time but they have paid it along with interest subsequently. Certain other explanations were also given on facts. The assessee was granted an opportunity of personal hearing. The Commissioner adjudicated the matter and took note of the fact that the duty has been paid by the assessee along with interest and, therefore, was of the view that further interest need not be levied. However, with regard to the clearances effected by the assessee during the relevant period, the Commissioner confirmed the proposal in the show cause notice by demanding the duty amount. The relief granted to the assessee was with regard to the levy of interest under Section 11AB and penalty under rules 25 and 27 of the Rules. The revenue filed appeal before the Tribunal. As rightly contended by the learned senior standing counsel for the appellant/revenue, the Tribunal did not go into the aspect as to whether the relief granted to the assessee by not levying interest and penalty was justified or not, but proceeded on the basis that rule 8(3A) of the Rules based on which duty has been demanded has been struck down by various High Courts in the country - the finding rendered by the Tribunal with regard to the validity of rule 8(3A) of the Rules has to be left open. However, with regard to the relief which was granted by the Commissioner to the assessee for not levying interest and penalty is concerned, on facts, no question of law arises for consideration on the said issue. Application disposed off. CST, VAT & Sales Tax 2022 (2) TMI 196 Principles of natural justice - opportunity not provided to the petitioner to file its objections and contest both proceedings - evasion of tax - time limitation - it is the specific contention of the respondents that the respondents are entitled to the period of eight years prescribed under Section 42 of KVAT Act since the petitioner fraudulently evading payment of tax during the assessment year 2013-14 - HELD THAT:- It is relevant to state that the period of eight years would be available to the respondents only pursuant to passing a separate and independent order under Section 79 and it was only after passing an order under Section 79(1) that the respondent would be entitled to invoke Section 39(1) and not before that; in other words in order to claim eight years under Section 40, respondents were not entitled to pass a composite order by invoking both Sections 39 and 79, but had to necessarily pass an independent order under Section 79 after providing an opportunity to the petitioner and thereafter pass another order under Section 39 also after giving an opportunity to the petitioner. In view of the failure on the part of the respondents to follow the prescribed procedure and since no reasonable or sufficient opportunity was provided in favour of the petitioner before passing the impugned orders, thereby violating principles of natural justice, without expressing any opinion on the merits/demerits of the rival contentions and in order to give one more opportunity to the petitioner to file his objections to the notices dated 05.04.2021 and contest the proceedings, it is deemed just and appropriate to set aside the impugned orders and remit the matter back to the respondents for re-consideration afresh - petition allowed by way of remand. Indian Laws 2022 (2) TMI 195 Dishonor of Cheque - notice of proclamation of person absconding - mens rea for the commission of an offence under Section 174-A of the IPC - breach of mandate of sub-Section (2) of Section 82 of the Cr.P.C. or not - HELD THAT:- All the provisions carried in sub-Section (i) of sub-Section (2) of Section 82 of the Cr.P.C., are to be cumulatively complied, and, or that all the provisions carried in sub-Section (i) of sub-Section (2) of Section 82 of the Cr.P.C., require(s) theirs being meted completest conjunctive compliance by the serving / executing officer, and or that the provisions are to be not meted compliance in the alternate - in the report, as became relied, upon by the executive officer, and, as became depended upon by the learned Magistrate concerned, to make the impugned order, disclosure are to occur, that each of the ingredients carried in all the afore provisions, borne in sub-Section (i) of sub-Section (2) of Section 82 of the Cr.P.C., became meted absolute, and, completest compliance, without any of them remaining uncomplied with. Since the mandate of sub-Clause (a) of sub-sub- Section (i) of sub-Section (2) of the Section 82 of the Cr.P.C., was also to be complied alongwith compliance being meted by the executing officer with Clause (b), and, Clause (c) of sub-sub-Section (i) of sub-Section (2) of Section 82, of the Cr.P.C., whereas, a reading of the apposite report, not disclosing that he had also meted compliance to Clause (a) of sub-sub- Section (i) of sub-Section (2) of Section 82, of the Cr.P.C, thereupon, his report is in departure of the statutory injunction, as therethrough(s) rather became cast upon him. Consequently, the knowledge of the proclamation notice, was not hence completely acquired by the petitioner, and, also the endeavour of the executing officer to serve the proclamation notice, upon, the accused, is completely deficit on score. It was rather imperative, for the learned trial Magistrate concerned, to thereafter recourse the mandate of sub-Section (ii) of sub-Section (2) of Section 82 of Cr.P.C., inasmuch as, after his receiving the report of the executing officer, his proceeding, to make an order for publication of the proclamation notice, in the daily newspaper, hence circulating in the area in which the accused ordinarily reside(s). The learned Magistrate, however, did not after the afore deficit report of the executing officer, being made, recourse the mandate of sub-Section (ii) of sub-Section (2) of Section 82 of Cr.P.C. Consequently, the deficit report of the executive officer could not validly bedrock any further conclusion, that the petitioners ever nursed any penally inculpable, mens rea, for an offence under Section 174-A of the IPC. The impugned order of 08.07.2021, declaring the petitioner, as a proclaimed offender, registered at Police Station Ambala City, District Ambala, constituting therein an offence under Section 174-A of the IPC, as well as subsequent proceedings arising therefrom, are quashed - petition allowed.
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