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TMI Tax Updates - e-Newsletter March 7, 2023 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws News Advisory : GSTN launches e-invoice registration services with private IRPs Government to significantly ramp up focus on quality; reasonably strict but practical quality standards to be brought in on many more products to strengthen manufacturing competitiveness and to protect consumers : Shri Piyush Goyal Address by Governor, Shri Shaktikanta Das, Reserve Bank of India - March 06, 2023 - Digital Payments Awareness Week (March 6-12, 2023) Launch of Mission ‘Har Payment Digital’, Mumbai Union Commerce and Industry Minister reviews SEEPZ SEZ projects, launches new website Union Commerce and Industry Minister inaugurates ECGC Bhawan, new corporate office of ECGC at Andheri, Mumbai Notifications GST - States 38/1/2017-Fin(R&C)(4/2023-Rate)/3199 - dated 28-2-2023 - Goa SGST Amendment in Notification No. 38/1/2017-Fin(R&C)(2/2017-Rate) dated the 30th June, 2017 38/1/2017-Fin(R&C)(3/2023-Rate)/3198 - dated 28-2-2023 - Goa SGST Amendment in Notification No. 38/1/2017-Fin(R&C)(1/2017-Rate) dated the 30th June, 2017 38/1/2017-Fin(R&C)(2/2023-Rate)/3197 - dated 28-2-2023 - Goa SGST Amendment in Notification No. 38/1/2017-Fin(R&C)(13/2017-Rate) dated the 28th June, 2017 38/1/2017-Fin(R&C)(1/2023-Rate)/3196 - dated 28-2-2023 - Goa SGST Amendment in Notification No. 38/1/2017-Fin(R&C)(12/2017-Rate) dated the 30th June, 2017 Circulars / Instructions / Orders IBC IBBI/LAD/58/2023 - dated 4-3-2023 Serving of copy of applications to the Board, as mandated under Rules 4, 6 and 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 Highlights / Catch Notes GST Misuse of E-way Bill - said goods being transported by a different conveyance - There may be instances where, for illegal purpose, the goods are off loaded in the midway and taken to a different destination other than the one mentioned in the e-way bill. It is not for the authority to ascertain the reason as to why such action has been undertaken. There is no requirement in law to verify the reason for transporting goods in a vehicle without a proper e-way bill. - HC Visit to Get Source Levy of penalty upon the petitioner for transporting goods against an expired e-way bill - Transportation of goods with a proper e-way bill is one of the salient features of the Act. There is no scope to dilute the said provision of law for granting relief to an errant transporter. The Act cannot and ought not to be interpreted in such a manner that the very essence of the same is lost. - HC Visit to Get Source Seeking grant of regular bail - cheating and fabrication of bills and documents - considering the gravity and the magnitude of the allegations involved in the present case and also the apprehension expressed by learned State counsel that in case the petitioner is released on bail, then he may threaten the witnesses, this Court does not deem it fit and proper to grant bail to the petitioner. - HC Visit to Get Source Application for rectification of mistake u/s 74- section 174(2) of the CGST Act, 2017 - the learned Commissioner, CGST, Siliguri Commissionerate is directed to take on board the application for rectification of mistake filed by the petitioner, consider the same and dispose it by a written order - HC Visit to Get Source Income Tax Nature of income surrendered during the course of survey - Addition u/s 69 r/w section 115BBE or business income - Where the assessee has subsequently recorded the same in his books of accounts as part of business income, it cannot be said that the said action on part of the assessee is not in accordance with accepted accounting methodology and the nature of such income is other than business income. - AT Visit to Get Source Unexplained investment u/s 69 - CIT-A deleted addition admitting the additional evidences - ld CIT(A) did not deal with the exceptions of Rule 46A, therefore, ld CIT(A) accepted the additional evidences in violation of Rule 46A of the Rules, which is not tenable in law. - AT Visit to Get Source Reopening of assessment u/s 147 - Rejection of objection - the reasons furnished suffers from error apparent nor can the counter be called in aid to improve the impugned order. - HC Visit to Get Source Credit of TDS - employer has not at revised his TDS return - The tax credit to the assessee cannot be denied merely on the grounds that the deductor has not filed its revised TDS return which is beyond the control of the assessee. - AT Visit to Get Source Revision u/s 263 - disallowance u/s 36(1)(iii) - Since the issue under consideration during the assessment proceedings was only confined to the disallowance of interest expenses on debentures, therefore, we are of the considered view that revision proceedings under section 263 have correctly been initiated in respect of this issue. - AT Visit to Get Source Losses incurred by the assessee from F & O operations - Speculation loss or business loss - Loss incurred on account of derivatives would be deemed business loss under proviso to section 43(5) and not speculation loss and, hence, Explanation to section 73 could not be applicable; and such loss would be set off against income from business - AT Visit to Get Source Deduction u/s 80IA - there is no monetary restriction on the amount of investment required to set up eligible infrastructure facility the appellant assessee has carried out the work contract with various hospitals and local government bodies relating to treatment, management and disposal of bio-medical waste as per the terms and conditions entered with various authorities which has been noted by the ld.CIT(A) in the first appellate order. - AT Visit to Get Source Deduction u/s 80IA - Belated filing of ITR - the ld.CIT(A) has recorded a categorical finding that the assessee was prevented by sufficient cause in filing the return within the prescribed time limit perhaps due to weak responsive Departmental website. - the assessee is very well entitled to claim deduction u/s 80IA(4) of the Act. - AT Visit to Get Source Income deemed to accrue or arise in India - Fee for Technical Services (FTS)/ Fee for Included Services (FIS) - the services provided by the assessee under the marketing support service agreement are neither in the nature of technical or consultancy services under Article 12(4) of India – USA Tax Treaty. Even, assuming that it is in the nature of consultancy services, however, the ‘make available’ condition provided under Article 12(4)(b) of the Tax Treaty is not satisfied. - AT Visit to Get Source TP Adjustment - International transactions with its AEs for providing software consultancy services - Selection of MAM - DRP without appreciating the above facts, has simply upheld TNMM as most appropriate method and upheld the TP adjustment as suggested by the TPO. Hence, we reverse the findings of the DRP and direct the TPO to consider CUP as most appropriate method to bench mark international transactions with its AEs. - AT Visit to Get Source Customs Time Limitation to issue SCN to a Customs Broker - Whether the word ‘issue’ is required to be construed as ‘served’? - The learned Tribunal has erred in holding that the Commissioner was required to serve a notice to the respondent within a period of ninety days from the date of receipt of the offence report. The Commissioner was required to issue a notice within the period of ninety days and there is no dispute that it had done so - HC Visit to Get Source Power to not to impose anti-dumping duty - the recommendation made by the designated authority - The reasons have to be recorded by the Central Government when it proceeds to form an opinion not to impose any anti-dumping duty despite a positive recommendation made by the designated authority in the final findings for imposition of anti-dumping duty. - AT Visit to Get Source Corporate Law Seeking directions to the Respondents to allow benefit of Companies Fresh Start Scheme (CFSS) in respect of overdue filings to the Petitioner who could not avail the benefit of filing under CFSS-2020 by 31st December, 2020 - considering that the DIN was restored only after the order was passed by the Court in above cited case, the documents and forms shall be permitted to be submitted by the Petitioner along with requisite fee in accordance with the Companies Act and Rules. - HC Visit to Get Source Indian Laws Dishonor of Cheque - failure to complete part of the promise - legal and legitimate dues or not - where ingredients of an offence are lacking against an accused, it is the duty of the Court to discharge such accused. Holding a Trial against the petitioner under Section 138 read with Section 141, is utmost abuse of the process of law and the Learned Trial Court has passed the summoning order without any application of mind. - HC Visit to Get Source IBC Approval of the Resolution Plan pertaining to its dissolution - dissenting debenture holders - power to mould relief and approve the RP - we should extend the benefit under Article 142 of the Constitution of India to the retail debenture holders. We are inclined to issue such directions to mould the relief in view of the particular facts and circumstances in the present case, which are similar to that in the case of Rajkumar Nagpal. - SC Visit to Get Source Preferential, undervalued and fraudulent transactions - Related party transactions - It is amply clear that the Option Agreements I & II are preferential and undervalued transactions and, therefore, they are avoidance transactions as per sections 43 and 45 of IBC. Therefore, the two Option Agreements No. 1 and II are declared ‘null and void’ and any interest created in the property ‘Chambers’ project of the corporate debtor by virtue of these Option Agreements are also declared non est in law and ‘null and void’. - AT Visit to Get Source Service Tax Rejection of refund claim - excess payment of service tax not in dispute - Admittedly no revised return as provided for in terms of Rule 7B of the Service Tax Rules, 1994 or under provisions of the Section 142 (9) of the CGST Act has been filed by the appellant. In para 4.6 and 4.7 of the order in original, Assistant Commissioner has recorded specific finding to this effect - It is settled provision in law that the when the statute provides a manner of doing the thing, then the thing has to be done in the prescribed manner only and all other manner are necessarily barred. - AT Visit to Get Source Refund - fresh issue of SCN after decision of CESTAT in favor of assessee and remand back - the show cause notice that was again issued by a different Assistant Commissioner on 05.05.2020 when the appellant filed an application for implementing the said decision of the Tribunal, seeks to not only nullify the decision of the Tribunal but also seeks to re-open the issues that had earlier settled by the Assistant Commissioner. - The uncalled for action of the Assistant Commissioner in denying refund to the appellant would also result in payment of an amount towards interest under section 11BB of the Excise Act to the appellant. - AT Visit to Get Source VAT Classification of goods - rate of tax - Choloromint Herbasol - Happydent White - Chatar Patar - the Revenue-respondent has not led any evidence or produced any material to discharge the onus on it. Once the goods have been manufactured by the assessee under the Drugs Licence issued by the Directorate of Ayurvedic Medicines then the ayurvedic medicines would fall under Entry 31 of Schedule B attached with the Punjab Value Added Tax Act (PVAT), 2005 and is liable to be taxed @4% - HC Visit to Get Source Classification of goods - rate of tax - sale of Wheat Bran (Chokad) - If Entry 74 of Schedule ‘B’ had to be made applicable in order that the sale of ‘Chokad’ to NALCO is amenable to tax at 4%, then it was necessary for the Department to show that there was a notification issued by the State Government identifying ‘Chokad’ as an ‘industrial input’. In the absence of such notification, no inference could have been drawn that ‘Chokad’ sold to NALCO was in fact an ‘Industrial input’. - HC Visit to Get Source Violation of principles of natural justice - denial of opportunity to cross-examine the third party whose papers constitutes the basis of assessment - The justification put forth by the STO that such an exercise would result in ‘squandering away of the time’ or that would to prolong the proceedings, appears not to be justified since the STO could have made the entire exercise of summoning those selling dealers and allowing an opportunity to the Petitioner to cross-examine them, time bound. - Order quashed - HC Visit to Get Source Interpretation of statute - non-obstante clause - exemption granted on the basis of the turnover of a dealer - conditional exemption or not - The exemption under Entry 68 Part B to the Schedule IV is conditional and the said goods on being despatched to places outside the State would attract the levy of purchase tax under Section 12 of the TNVAT Act. Thus the challenge to the levy of purchase tax is liable to be rejected. Input tax credit of the purchase tax would be subject to Section 19 of the TNVAT Act - the impugned orders insofar as it imposes penalty are liable to be set-aside. - HC Visit to Get Source Finalisation of assessment and creation of extra demand - extension of the period of limitation - In the present case, since the assessment year is 2008-09, the period of limitation of 6 years had not expired when the proceedings were pending before the Commissioner when he passed order dated 28.04.2016. The Tribunal, vide order dated 26.11.2021 had rightly partly allowed the appeal of the assessee by deleting the demand of interest and penalty and upholding the demand of amount of tax - HC Visit to Get Source Case Laws: GST 2023 (3) TMI 290 Misuse of E-way Bill - said goods being transported by a different conveyance - Levy of penalty under Section 129(3) of the West Bengal Goods and Services Tax Act, 2017 - failure to produce any document in support of the goods being transported by a different conveyance - HELD THAT:- It appears that the adjudicating authority and the appellate authority applied their mind and on being satisfied that the goods were found to be transported without any e-way bill imposed penalty. The petitioner ought to appreciate that when an e-way bill is generated then the details of the goods to be transported, the place from where the shipment is made and the final destination are mentioned therein along with the details of the transporter and the vehicle number. Apart from the taxing purpose, the e-way bill is generated to identify the goods that are being transported, the place from where it is being transported, the final destination and the vehicle number by which the goods will be transported. The same implies that the goods cannot and ought not to be transferred from one vehicle to the other, far less, transported via a different vehicle, without obtaining a proper e-way bill. The moment the goods are unloaded from the vehicle in respect of which e-way bill was generated and loaded in a different vehicle without any e-way bill a statutory breach is committed, liable to be dealt with in accordance with the statute - There may be instances where, for illegal purpose, the goods are off loaded in the midway and taken to a different destination other than the one mentioned in the e-way bill. It is not for the authority to ascertain the reason as to why such action has been undertaken. There is no requirement in law to verify the reason for transporting goods in a vehicle without a proper e-way bill. In GULJAG INDUSTRIES VERSUS COMMERCIAL TAXES OFFICER [ 2007 (8) TMI 344 - SUPREME COURT ] the Court held that breach of statutory provision would attract levy of penalty and the officer does not have any authority to either reduce or waive the penalty. Petition dismissed. 2023 (3) TMI 289 Levy of penalty upon the petitioner for transporting goods against an expired e-way bill - petitioner contends that he ought not to be imposed the penalty amount as the petitioner was in no way responsible for the delay in issuing the gate pass at Cooch Behar - HELD THAT:- There may or may not be valid reasons for not being able to transport the goods within the validity period of the e-way bill. The petitioner may not have any intention to evade tax; but can that be a valid ground to transport goods without a valid e-way bill. The Act is very clear on the issue. Law bars transportation of certain goods beyond a particular distance without a valid e-way bill. The petitioner being aware of the legal requirement generated the e-way bill prior to transportation of the goods. Due to some unknown reason there was delay in issuing gate pass at the check post for which the transportation got delayed resulting in non-delivery of goods within the stipulated time period. Law prescribes generation of fresh e-way bill for transportation of goods if the same cannot be delivered on time - It is the duty of the owner/transporter/consignor/consignee to keep track of the consignment and do the needful for transporting the goods in accordance with law. The interception and detention of goods without valid documents are permissible in law. The authority intercepting the vehicle in the course of movement is not supposed to appreciate the reasons as to why the vehicle was moving without a valid e-way bill. Transportation of goods with a proper e-way bill is one of the salient features of the Act. There is no scope to dilute the said provision of law for granting relief to an errant transporter. The Act cannot and ought not to be interpreted in such a manner that the very essence of the same is lost. Section 129 of the Act opens with a non obstante clause which lends a mandatory character to the same. The petitioner may or may not be directly responsible for the delay in issuance of the gate pass, but he is certainly at fault in transporting goods without a valid e-way bill. Petition dismissed. 2023 (3) TMI 288 Cancellation of GST registration of petitioner - It is the petitioner s case that he had been carrying on the business and had been filing his due returns from the date of the registration, however, had not filed the returns for certain period as its turnover for the said period was nil - petitioner failed to respond to the Show Cause Notice - HELD THAT:- In a number of such case, this Court has held that the registration be restored to permit the taxpayer to file the returns while reserving the right of the respondents to cancel the registration if the petitioner does not cure the cause within a specified period. It is the petitioner s case that it had been unable to respond to the Show Cause Notice as he had been unwell. It is also noticed that the during the material time, the pandemic was raging and a number of persons were facing such difficulty. The respondents are directed to restore the registration to enable the petitioner to file all returns and pay taxes, interest and penalties, if any, in accordance with law - petition disposed off. 2023 (3) TMI 287 Refund of GST u/s 54 of the Central Goods and Services Tax Act, 2017 and the Central Goods and Service Tax, Rules, 2017 - passed passed on the grounds, never mentioned in the show cause notice - rejection mainly on the ground that order has been passed in violation of principle of natural justice and being a non-speaking and cryptic order - HELD THAT:- The order has been passed on those grounds which were never mentioned in the show cause notice. Even the petitioner was not granted an opportunity to meet with the grounds, upon which, the impugned order has been passed. The petition requires consideration - the impugned order dated 13.7.2021 passed by the respondent no.3- Deputy Commissioner of Sales Tax is hereby quashed and set aside. The respondent authority is directed to decide the case afresh after giving an opportunity of hearing to the petitioner and in accordance with law - petition allowed by way of remand. 2023 (3) TMI 272 Seeking grant of regular bail - cheating and fabrication of bills and documents - earlier bail application dismissed - HELD THAT:- The argument raised by learned senior counsel for the petitioner that no separate FIR could be filed and only a complaint under the GST Act could have been filed would not be sustainable since offences under the GST Act and that of the provisions of the IPC as are in the present case are separate and distinct. Even maximum punishment under Section 467 IPC is upto life imprisonment. The allegations against the petitioner were with regard to getting benefit of about Rs.2,68,74,696/- as wrongfully by way of Input Tax Credit and as per the allegations there was no physical movement of any goods and it was all a paper transactions and even as per learned counsels for the parties, the FIR was initially lodged under Sections 420, 467, 468 and 471 IPC and thereafter Section 132 of the Goods Service Tax Act, 2017 was added. The earlier bail petition was dismissed as withdrawn by the petitioner on 24.08.2022 and the present petition has been filed on 29.11.2022 and till date there is no change of circumstance. This Court is of the view that considering the gravity and the magnitude of the allegations involved in the present case and also the apprehension expressed by learned State counsel that in case the petitioner is released on bail, then he may threaten the witnesses, this Court does not deem it fit and proper to grant bail to the petitioner. Consequently, finding no merit in the present petition, the same is hereby dismissed. 2023 (3) TMI 271 Application for rectification of mistake - section 174(2) of the CGST Act, 2017 - HELD THAT:- A perusal of the impugned communication dated 23.01.2018 reflects that it was the Joint Commissioner who had communicated to the petitioner stating that the Commissioner of CGST Siliguri Commissionerate was of the opinion that the points raised in the application were not covered under section 74 Act and that the application for rectification of mistakes stood disposed of. Quite evidently there is no written order of the learned Commissioner CGST disposing the application for rectification of mistake as required under section 74 Act. In view of the submissions made by the learned counsel for the parties the impugned communication dated 23.01.2018 passed by the Joint Commissioner is set aside and the learned Commissioner, CGST, Siliguri Commissionerate is directed to take on board the application for rectification of mistake filed by the petitioner, consider the same and dispose it by a written order - Application disposed off. 2023 (3) TMI 270 Seeking grant of Regular Bail - availment of fraudulent input tax credit - HELD THAT:- Reliance placed in the case of Sanjay Chandra v. CBI [[ 2011 (11) TMI 537 - SUPREME COURT] ], wherein it was held that we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge sheet is already filed before the Special Judge, CBI, New Delhi. Therefore, their presence in the custody may not be necessary for further investigation. We are of the view that the appellants are entitled to the grant of bail pending trial on stringent conditions in order to ally the apprehension expressed by CBI. Keeping in view the facts of present case and the judgment in the case of Sanjay Chandra and in particular that the petitioner is in custody since 07.05.2022; challan was presented on 06.07.2022, however, charges are yet to be framed; in all there are 20 witnesses; the trial is likely to take a considerable time, his further detention behind bars would not serve any useful purpose, thus the present petition for grant of regular bail deserves to be allowed. The petitioner is ordered to be released on regular bail, subject to his furnishing bail/surety bonds to the satisfaction of trial Court/Duty Magistrate concerned and subject to him not being required in any other case, and subject to the conditions imposed - petition allowed. 2023 (3) TMI 269 Seeking grant of anticipatory bail - wrongful availment of ITC - Section 132 of the Punjab Goods Services Tax Act, 2017 - HELD THAT:- It is apparent that the petitioner was granted interim bail by this Court vide order dated 27.05.2022 and he has appeared before learned trial Court in pursuance to the same. However, both the counsel have disputed the amount of ITC involved in the present case. The specific stand of the respondent-complainant is that the amount involved is about Rs.7.22 crores and once the amount is more than Rs.5.00 crores, offence is nonbailable. This Court while dealing with the anticipatory bail filed by the petitioner would refrain itself from commenting anything on the merits of the case specifically regarding the amount alleged to have been wrongly availed as the same lies within the domain of the trial Court to decide on the basis of the evidence to be led by the respective parties. However, confining itself to the prayer made for anticipatory bail, interim order dated 27.05.2022 is made absolute subject to his complying with the conditions as envisaged under Section 438 Cr.P.C. Petition allowed. 2023 (3) TMI 222 Maintainability of petition - petition dismissed on the ground that application under section 30 of the Central Goods and Services Tax Act, 2017 for revocation of cancellation of the registration was not filed - HELD THAT:- Considering the conspectus of the matter, we are inclined to accord an opportunity to the Petitioner to file an application before the Authority under Section 30 of the CGST Act. In case the application is filed by the Petitioner within 15 days from today under Section 30 of the CGST Act before the Authority, the Authority shall construe the same within limitation and take decision upon the application on merits expeditiously. Petition disposed off. Income Tax 2023 (3) TMI 286 Maintainability of the writ petition in view of the alternative remedy available u/s 246 of filing an appeal - Reopening of assessment u/s 147 - Validity of order passed u/s 148A(d) of the Act, as it stood amended - HELD THAT:- Since the Assessing Officer while passing the order has given an interpretation and held against the petitioners, therefore, necessity arises for this Court to consider the correctness of such finding, which finding cannot be agitated before the Assessing Officer for re-assessment proceedings. The Allahbad High Court in the case of Rajeev Bansal Vs. Union of India Others [ 2023 (2) TMI 1081 - ALLAHABAD HIGH COURT] as well as Keenara Industries Pvt. Ltd Vs. Income Tax Officer [ 2023 (3) TMI 104 - GUJARAT HIGH COURT] have entertained the writ petitions where alternative remedy was available. The Calcutta High Court in the case of Aashiyana Housing Ltd. Vs. Union of India [ 2023 (3) TMI 221 - CALCUTTA HIGH COURT] has held that the alternative remedy will not operate as an absolute bar for entertaining the writ petition as jurisdictional issue goes to the root of the matter. Therefore, we are of the view that appellant has made out a case for entertaining this appeal and had also stayed the further re-assessment proceedings. The Apex Court in the case of Red Chilli International Sales [ 2023 (1) TMI 674 - SC ORDER] The provisions of reopening under the act of 1961 has undergone an amendment by the Finance Act, 2021 and consequently, the matter would require deeper and indepth consideration keeping in view the earlier case law. Accordingly, we set aside the observations made by the High Court in the impugned judgment observing that the writ petitions would not be maintainable in view of the alternative remedy. We do deem it open to examine this issue in the present case after having examined the notice u/S 148A(b), including annexure thereto, reply filed by the petitioner and the order under Section 148A(d). Accordingly, this batch of writ petitions is admitted for final hearing. In the meanwhile, there shall be interim stay of the order passed u/s 148A(d) of the Act as well as consequential notice u/s 148 of the Act, until further orders. 2023 (3) TMI 285 Assessment u/s 153C - incriminating documents or books of accounts belonging to the assessee were found during the course of search action u/s 132 or not? - whether no additions were made by the A.O. on the basis of documents belonging to the assessee? - HELD THAT:- We are of the considered view that since the search was conducted prior to amendment in section 153C of the Act, it was an essential pre-requisite that the incriminating documents on the basis of which the assessment was framed must belong to the assessee. From the contents of the assessment order and the observations made by Ld. CIT(Appeals), even the Ld. A.O. has not alleged that additions were made on the basis of incriminating documents belonging to the assessee found during the course of search. Therefore, in the instant set of facts, we find no infirmity in the order of the Ld. CIT(Appeals) wherein he has held that since assessment was not framed on the basis of any incriminating documents belonging to the assessee found during the course of search, then in light of the various judicial precedents, additions are not liable to be sustained. Additions for Unabated assessment year can only be made on the basis of incriminating material found during the course of search - We observe that Ld. CIT(Appeals) while disposing of the objections raised by the in respect of initiation of proceedings under section 153C of the Act, has categorically held that there was no incriminating material which formed the basis of assessment framed under section 153C of the Act. The same is evident from the relevant paragraphs of Ld. CIT(Appeals) order disposing of the objections raised by the assessee in respect of initiation of proceedings under section 153C. In the instant set of facts, no incriminating materials was found during the course of search which formed the basis of initiation of proceedings under section 153C of the Act. We also observe that the instant year is an unabated assessment year where the time limit of completing the assessment proceedings have already been concluded. It is well-settled law that in absence of any incriminating material found during the course of search, proceedings under section 153A/153C of the Act cannot be initiated in case of unabated assessment year. As noted by Ld. CIT(Appeals), is an unabated assessment year. During the search operation which was carried by the Department, admittedly, no incriminating material was discovered, which formed the basis of additions made in respect of order for assessment year 2009-10 passed u/s. 153C of the Act, for which the time limit of initiation of assessment has already concluded. It is a settled position of law that in case of unabated assessment year, no addition could be made de-hors the material found during the search. In our view, CIT(Appeals) has not erred in law and in fact in holding that the initiation of proceedings u/s. 153C of the Act on the assessee are not sustainable in the instant facts. Appeal of the Department is dismissed on ground of jurisdiction itself. 2023 (3) TMI 284 Reopening of assessment u/s 147 - notice beyond a period of four years from the end of the assessment year Reasons to believe - Disallowance of the prior period expense treating the same as expenditure of earlier years - the same has been booked as expenditure only due to the reversal of entry of earlier years where the same was shown as income - HELD THAT:- In the case of ICICI Securities Primary Dealership Ltd. [ 2012 (8) TMI 754 - SC ORDER] AO completed assessment of assessee under section 143(3) after taking into consideration account furnished by assessee. After lapse of four years from relevant assessment year Assessing Officer reopened assessment of assessee on ground that during relevant year assessee company had incurred a loss in trading in share, which was a speculative one and therefore chargeable to tax. Accordingly, AO passed order under section 147 of the Act. The Hon'ble Supreme Court held that since after a mere re-look of accounts which were earlier furnished by assessee, Assessing Officer had come to conclusion that income had escaped assessment, same was not permissible under section 147 as it was clearly a change of opinion. Therefore, order re-opining assessment was not permissible. In the case of Godrej Boyce Mfg. Co. Ltd. [ 2022 (4) TMI 639 - BOMBAY HIGH COURT] the High Court held that where Assessing Officer completed original assessment under section 143(3) and subsequently he issued notice seeking to reopen such assessment for reason that interest bearing funds had been used for making addition of capital work-in-progress and hence interest paid in respect of capital borrowed for addition to capital work-in-progress should have been added back and capitalized as per provisions of section 36(1)(iii), as reasons did not indicate that there was failure to disclose truly and fully all material facts, impugned notice deserved to be quashed . Accordingly, in view of our observations in the preceding paragraphs and in light of the above judicial precedents highlighted above, we are hereby directing that the present reassessment proceedings are liable to be set aside. Since, we are quashing the notice issued u/s 147 of the Act on grounds of jurisdiction itself, we are not separately adjudicating on other Grounds of Appeal filed by the assessee. 2023 (3) TMI 283 Nature of income surrendered during the course of survey - Addition u/s 69 r/w section 115BBE or business income - income surrendered by the assessee on account of receivables - HELD THAT:- The nature of surrendered income was therefore unrealized sundry receivables generated out of out of book sales undertaken by the assessee. The factum thereof has been accepted by the Survey team and where the AO dispute the nature of such surrender or the findings of department s own survey team, the AO has to lead positive evidence to arrive at any contrary finding. Nothing has been brought on record in this regard. Therefore, the picture which is clearly emerging from the material available on record is the nature of surrender is amount of unrealized receivables from the sales undertaken by the assessee as part of his regular business dealings and which have not been recorded in the books of accounts. Where the assessee has subsequently recorded the same in his books of accounts as part of business income, it cannot be said that the said action on part of the assessee is not in accordance with accepted accounting methodology and the nature of such income is other than business income. As relying on M/S FAMINA KNIT FABS AND M/S MEHTA ENGINEERS VERSUS THE A.C.I.T., CIRCLE-3 [ 2019 (5) TMI 8 - ITAT CHANDIGARH] the income so surrendered by way of account receivables cannot be brought to tax under the deeming provisions u/s 69 r/w section 115BBE and has been rightly offered by the assessee under the head business income . In the result, the matter is decided in favour of the assessee. 2023 (3) TMI 282 Disallowance of interest expenses - Addition on the ground that the same pertains to capital work in progress - whether assessee establishes that the interest free funds available with the assessee are far in excess of investments in CWIP, the presumption has to be that the investments are made out of interest free funds? - HELD THAT:- In the instant case, we observe that while the addition to CWIP but the assessee had own interest free and hence the interest-free funds available with the assessee are far in excess of addition to CWIP. Respectfully following the decision of ITAT in the assessee s own case for assessment year 2004-05 [ 2019 (1) TMI 2005 - ITAT AHMEDABAD] we hereby allow the appeal of the assessee with respect to ground number. Disallowance considering the same as prior period expenses - HELD THAT:- We are in agreement with the assessee that assessee has been following a consistent practice of offering both prior period income as well as claiming deduction of prior period expenses, which is a tax neutral exercise. Further, looking at the nature of expenses, the same are revenue in nature and incurred for the purpose of business of the assessee. Again the Gujarat High Court in the case of Dishman Pharmaceuticals Chemicals Ltd. [ 2019 (10) TMI 1195 - GUJARAT HIGH COURT] held that once prior period income was held to be taxable, prior period expenditure should also be allowed to be set off and assessee was not obliged in law to indicate any direct or indirect nexus between prior period income and prior period expenditure. Decided in favour of assessee. Disallowance of depreciation - plant and machinery installed and put to use or not? - HELD THAT:- In the case of Southern Petrochemical Industries Corporation Ltd [ 2007 (7) TMI 284 - MADRAS HIGH COURT] the High Court held that stand-by assets not put to use during year will be entitled to depreciation. In the impugned year under consideration, the assessee had furnished certificate from the General Manager of the company and another certificate from an independent party to the effect that plant and machinery had been installed and put to use during the year under consideration. However, Ld. CIT(Appeals) did not accept the additional evidence placed before him during the course of appellate proceedings and dismissed this ground of appeal of the assessee. The evidence furnished by the assessee with regard to certificate issued by an independent party has also been accepted by the Department in the assessment of the assessee for subsequent years and depreciation on such plant and machinery was allowed accordingly. Looking into the instant facts, we are of the considered view that the assessee is eligible to claim depreciation on such plant and machinery installed and put to use during the year under consideration. Disallowance of 5% of travelling expenses - HELD THAT:- In the case of Vardhman Shipping (P.) Ltd [ 2022 (8) TMI 954 - ITAT AHMEDABAD] the Assessee debited certain amount of travel ticket expenses and travelling expense. AO disallowed 1/5th of said expenses. It was noted that assessee had submitted statement substantiating payment towards said expenses before Commissioner (Appeals), however, it had not been clarified as to how said expenditure was being incurred for business purpose. ITAT held that impugned disallowance made by Assessing Officer was rightly confirmed by Commissioner (Appeals). In the case of Kohinoor Indian (P.) Ltd [ 2021 (9) TMI 839 - ITAT AMRITSAR] where assessee claimed foreign travel expenses, however, some vouchers for expenditure incurred by assessee were missing, order of lower authorities restricting expenditure to 5 per cent, in absence of supporting document was reasonable. In the present case CIT(Appeals) observed that most of the expenses have been incurred in cash and the supporting vouchers were also self-made by the assessee. According, most of the expenses could not be verified. Accordingly, in our considered view, the Ld. CIT(Appeals) has been reasonable in restricting the disallowance to 5% of such expenses. Disallowance of the vehicle and maintenance expenses - HELD THAT:- Looking into the facts of the instant case and the fact that disallowance has been made on a totally ad hoc basis and in light of the ITAT order in assessee s own case for assessment year 2004-05 [ 2019 (1) TMI 2005 - ITAT AHMEDABAD] we are hereby allowing ground number 6 of the assessee s appeal. 2023 (3) TMI 281 Adjustments in the processing of return u/s 143(1) - disallowance u/s 40(a)(ia) and 43B - HELD THAT:- As referred to the computation of taxable income to demonstrate that adjustments made in the processing of return u/s 143(1) of the Act, in respect of disallowance made u/s 40(a)(ia) and 43B had already been added by the assessee suo motto. CIT(A) has merely given directions to the ld. AO to verify the records and based on his verification of the records, he may consider the additions / disallowances to be made. We note that approach adopted by the ld. CIT(A) is not in accordance with the provisions of section 250 of the Act which prescribes the procedure in appeal to be complied with by the ld. CIT(A). Further, section 251 adequately empowers the ld. CIT(A) to exercise his powers while disposing the appeal. Despite such non adherence of the provisions of law by the ld. CIT(A), we ourselves find it proper to verify the records in this respect for the meritorious disposal. Considering the facts on record and going through the computation of taxable income referred above, we without any hesitation hold that disallowance made u/s 40(a)(ia) and 43B is not warranted. MAT computation u/s 115JB - In respect of arbitrary adjustment made in the book profit computed u/s 115JB of the Act, assessee has adequately explained his case that this amount represented the amount withdrawn from reserve/provision and the same stands credited in the profit and loss account for the year under consideration and was reduced from the book profit since it was already offered to tax in the earlier years. We note that certain specific adjustments are only permitted to be made under the provisions of Section 143(1) of the Act.we direct to delete the adjustment made while computing the book profit u/s 115JB of the Act. Claim of deduction made by the assessee towards marketing and sales expenses relating to project Avidipta-II - accounting treatment in terms of applicable accounting standard and accounting principles - assessee has adopted control approach for revenue recognition prescribed under the Ind AS 115 by considering satisfaction of performance obligation over time which is taken to be analogous to PCM - HELD THAT:- Section 145 and 145A of the Act provides for computation of income under the head profits and gains from business or profession and income from other sources by applying the Income Computation and Disclosure Standards (ICDS) . Since no specific ICDS has been notified for real estate developers, revenue and cost recognition is governed by the applicable accounting standards and Ind AS discussed Considering the discussion made on the accounting treatment in terms of applicable accounting standard and accounting principles as well as judicial precedents, we are of the considered view that claim of deduction made by the assessee towards marketing and sales expenses relating to project Avidipta-II are not allowable in the year under consideration while computing the total income under the provisions of the Act. However, keeping in mind the detailed discussion made above on the accounting treatment, we are of the considered view to hold that since these expenses have been accumulated in work-in-progress as per the above stated accounting standard and revenue recognition policy and also considering the matching concept of accounting principle, these have to be allowed and considered against the revenue in the year in which performance obligation is satisfied, in other words, in the year in which the said project is completed and sales are booked in the profit and loss account. Accordingly, ground no. 3 and 4 are dismissed. 2023 (3) TMI 280 Validity of assessment u/s 144 - net profit determination by rejecting the books of account u/s 145(3) - assessee was unable to produce the books of account and detailed documents during the assessment proceeding - arbitrary profit rate of 6% of gross receipts contrary to rate of 2.07% returned by the appellant on the basis of audited financial statements - CIT(A) only restricted the net profit @ 4% for non-submission of the books of account of the assessee - HELD THAT:- We find that for assessment year 2014-15 the net profit percentage declared by the assessee was 3.11. Appellate authority has taken a realistic view has determined the NP @4% on the gross turnover of the assessee. CIT(A) properly clarified that the assessee was unable to explain the reasons for non-submission of the books of accounts before the assessing authority. Without proper books of account, the ld. appellate authority has determined the net profit @ 4%. After a thoughtful consideration, we find that no infirmity in the order of the ld. CIT(A), so, the grounds of the appeal of assessee for A.Y. 2015-16 are dismissed. Determination of Net profit by the ld. CIT(A) is inclusive of salary interest paid to partners - CIT(A) has determined lower net profit. We find no infirmity in this issue in the order of the ld. CIT(A). Related to issue in interest on deposit the Counsel took the plea that the fix deposit / FDRs are utilize to acquire the bank guarantee. Entire FDR is related to opportunity generation of business income in several years. The assessee maintained the consistency for utilising this interest earned and interest paid in the P L account. The issue was already agitated before the ld. CIT(A) by the assessee. We find that there is a nexus in between interest earned and interest paid in relation to the assessee business. Considering the factual matrix, we find that this particular issue is accepted by the bench. The interest paid should be adjusted with interest received which will not separately assessable. Appeal of the assessee dismissed. 2023 (3) TMI 279 Assessment u/s 153A - Unsecured loan u/s 68 - incriminating material found during the search or not? - HELD THAT:- As in the absence of any incriminating material found during the search action and duly following the judgements in the cases of CIT (Central-III) vs. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] and Meeta Gutgutia [ 2017 (5) TMI 1224 - DELHI HIGH COURT] hold that the assessment u/s 153A/143(3) of the Act in the instant case for AY 2010-11 was not justified and therefore is quashed. We further find that identical issue arose in the case of the husband of the assessee, Mr. Vinod Kumar Taneja [ 2022 (9) TMI 1424 - ITAT DELHI] wherein the Co-ordinate Bench of Tribunal had dismissed the appeal of the Revenue. Before us, no fallacy in the findings of CIT(A) has been pointed out by Revenue nor has Revenue pointed to any distinguishing feature in the present case and that of husband of assessee, Mr. Vinod Kumar Taneja - Decided against revenue. 2023 (3) TMI 278 Bogus sales - unexplained cash deposits in bank account - estimation of income - no discrepancy in the statutory records noted - revenue suo-motto derived the figure of total cash sales, as recorded in cash-book vs. sale bills vs. stock register, by comparison with receding previous year's total cash sales - HELD THAT:- Admittedly, it is an undisputed fact that authorities below had accepted the opening stock, closing stock, purchases, direct expenses, sundry debtors, sundry creditors, all VAT 15 returns and annual VAT 20 of the assessee and did not point out any defect in any of the aforesaid documentary evidences. AR submitted that the assessee filed books of account, Stock Register and all other record for verification before the A.O and CIT(A) but they didn t point out any defect in the said record. AO can't brush aside suo-motto statutory record of Sales-tax department like Vat-15 and vat-20 without pin pointing any defect in the said records. In fact, the Ld. A.O has calculated as bogus sales, on the basis of surmises and conjectures. He ought to have brought on record any material evidence to hold the disputed cash sales as bogus sale. A.O has accepted the GP ratio of assessee declared @ 4.38%. AO suo-moto reduced the GP of 4.38%, out of disputed bogus sales which has been reduced from the returned income - A.O cannot blow hot and cold at the same time by partly rejecting the books of accounts and partly accepted the books of accounts, which is bad-in-law. If the AO rejected the books of accounts, then he can't rely on the same books of accounts for opening stock, closing stock, purchases, sundry debtors, sundry creditors, GP Ratio and expenses etc. etc., which are based on same books of accounts which have been accepted. It is settled law that the A.O cannot sit on the chair of the assessee to decide the sales, as per his choice to categorize into so called bogus sales and non-bogus sale The Visakhapatanam Tribunal in the case of ACIT Vs. Hirepanna Jewellers [ 2021 (5) TMI 447 - ITAT VISAKHAPATNAM] has observed that when no difference in stock register found, purchases, sales and the stock are inter linked and are inseparable. Every purchase increases the stock and every sale decreases the stock and all matching with inflow and outflow there is no reason to disbelieve the sales. In the case of PCIT vs. Agson Global Pvt. Ltd , [ 2022 (1) TMI 848 - DELHI HIGH COURT] hold the rationale that one cannot disallow bogus purchases and the same time treats the sale with same parties as genuine - the books of accounts are duly audited and no defect found, then no disallowance . Thus we hold that the cash deposits in bank represent the sales which the assessee has rightly offered for taxation. We have gone through the trading account and find that there was sufficient stock to affect the sales and we do not find any defect in the stock as well as the sales. Since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 69A or tax the same u/s 115BBE again. Accordingly, the addition is deleted. Appeal of the assessee is allowed. 2023 (3) TMI 277 Unexplained investment u/s 69 - CIT-A deleted addition admitting the additional evidences - sufficient reasons for complete non-compliance during assessment stage which is a pre-condition for accepting additional evidence under Rule 46A of the I.T. Rules,1962 - HELD THAT:- We note that ld. CIT(A) has erred in admitting additional evidences, apart from the above, Ld. CIT(A) did not record reasons in writing for admitting additional evidences. We note that during the appellate proceedings, the assessee has not raised additional ground. The assessee furnished only additional evidences. Therefore, findings of ld CIT(A) that he had admitted additional ground, is factually incorrect. CIT(A) has not explained in his order that which issue he has adjudicated by way of additional ground. CIT(A) did not explain in his order the exceptional clause (a) to (d) of Rule 46A, which are:(a) the Assessing Officer has refused to admit evidence(s); or (b) Assessee was prevented by sufficient cause from producing the evidence which he was called upon by the Assessing Officer; or (c) assessee was prevented by sufficient cause from producing before the Assessing Officer which is relevant to any ground of appeal; or (d) The Assessing Officer has made the order without giving sufficient opportunity to the assessee to adduce evidence relevant to any ground of appeal. Hence, we note that ld CIT(A) did not deal with these exceptions of Rule 46A, therefore, ld CIT(A) accepted the additional evidences in violation of Rule 46A of the Rules, which is not tenable in law. CIT(A) erred in admitting that source of investment of pound sterling for share of company namely Flightcare Ltd., in the name of Shri Nurudin Ajania i.e., husband of the assessee - there was no name of the assessee i.e., Smt. Shehnaz Nurdin Ajania. Besides, the learned CIT(A) also erred in admitting that source of investment of Rs.50,00,000/- as opening balance and other credits in bank account was jointly. We note that in the remand report, the assessing office mentioned that there is no details received from the Indian Banks. The assessing officer further mentioned that details received HSBC Bank, the source of investment was not clearly mentioned. Even in remand proceedings, the assessing officer did not get opportunity to verify these details hence it is a complete violation of Rule 46A of the Rules, therefore, we are of the view that matter may be remitted back to the file of the Assessing Officer for fresh examination of these documents and details. Hence, due to proceedings, and even in remand proceedings, the assessee has not submitted entire details before the assessing officer and there is no findings by ld CIT(A) on additional ground, therefore, we are of the view that an opportunity should be given to Assessing Officer to verify these documents and details. Therefore, we accept the prayer of Ld DR for the Revenue, and set aside the order of CIT(A) and remand the various issues raised by the assessee in the grounds of appeal before CIT(A) for fresh consideration - Appeal of the Revenue is allowed for statistical purposes. 2023 (3) TMI 268 Revision u/s 263 - bogus LTCG - Validity of reopening of assessment u/s 147 - PCIT, Sambalpur exercised the suo motu revisional power u/s 263(1) and an order was passed directing the AO to add an entire amount u/s 68 r.w.s. 115BBE - whether the reassessment proceedings were themselves invalid since the reasons recorded in the file for reopening and the reasons supplied to the Assessee were different? - HELD THAT:- If the original re-assessment order itself was not validly passed, the subsequent revisional order by the PCIT was required to be held invalid. No substantial question of law arises from the impugned order of the ITAT. The Court is therefore not inclined to frame the questions of law as urged by the Revenue in the present appeals. 2023 (3) TMI 267 Reopening of assessment u/s 147 - Rejection of objection - huge amount of cash transaction in Bank of India - HELD THAT:- The impugned proceedings suffers from error apparent on the face of the record. Reliance placed on Anshul Jain's [ 2022 (10) TMI 3 - SC ORDER] case by the learned Senior Standing Counsel appearing for the Respondent is misconceived. The above judgment was a case were it was found as a matter of fact that the objections were considered. However, in the instant case this Court finds that objection have been rejected without even applying its mind to factors that are relevant and more importantly the facts stated in the counter would clearly show that the reasons furnished for reassessment suffers from error apparent on the face of the record inasmuch as admittedly reference was made to the wrong Bank and Account Number, while proposing reassessment on the basis of alleged deposits to the said account thereby vitiating the entire proceeding under Section 147. Yet another reason which would warrant interference is the fact that the Respondent has in its counter set up a case rather material particulars, different from the reasons given for reassessment, which is impermissible. It is well settled that public orders must be tested on the basis of what is stated in the order and subsequent counter affidavit cannot improve the order as held by the Hon'ble Supreme Court in the following decisions - Commissioner of Police v. Gordhandas Bhanji . [ 1951 (11) TMI 17 - SUPREME COURT] and Mohinder Singh Gill v. Chief Election Commr. [ 1977 (12) TMI 138 - SUPREME COURT] Applying the above decisions to the present case, this Court is inclined to set aside the impugned order, on the ground that the reasons furnished suffers from error apparent nor can the counter be called in aid to improve the impugned order. However, this would not preclude the Respondent from exercising the power of assessment, if there are reasons / circumstances which would warrant such exercise. 2023 (3) TMI 266 Addition u/s 69 - unaccounted investment in purchase of property - Whether no unaccounted cash was ever invested by the assessee? - HELD THAT:- From the relevant part of the assessment order as well as the first appellate order, except copy of MoU, we are unable to see any other documentary evidence to show that the assessee along with her granddaughter Ms Vasudha Sharma invested Rs.50 lakh with the builder and only shown Rs.25 lakh banking transactions to the Department. For making addition u/s 69, it is the duty of the AO to establish by way of cogent and sustainable evidence that the assessee has invested his unaccounted money/income in purchase of property and, in the present case, the allegation of the AO based on copy of MoU cannot be held as sustainable and acceptable in absence of any other positive adverse material against the assessee establishing the factum of investment of Rs.50 lakh including alleged unaccounted investment of Rs.25 lakh in purchase of property. Assessee has successfully demonstrated that he only invested Rs.25 lakh with the builder M/s Gul Properties Pvt. Ltd. through banking channel and by way of a letter dated 12.07.2018 he requested the builder to refund the entire amount cancelling the booking. From the letter of the builder dated 21.08.2018 , it is also clear that the builder has refunded the amount by issuing two cheques through banking channel in the name of the assessee and his granddaughter totaling to Rs.25 lakh. We are unable to agree with the allegations made by the AO in the assessment order which were only based on doubts without any sound basis, hence, we also decline to agree with the observations of the ld.CIT ( A ) while confirming the baseless addition. The grounds raised by the assessee are allowed and the AO is directed to delete the addition.Appeal filed by the assessee is allowed. 2023 (3) TMI 265 Validity of the assessment framed u/s 147 - Suspension v/s reason to believe - nexus between the information in the possession of the AO and formation of belief of escapement of income - reopening made beyond four years - HELD THAT:- The income of the assessee during the year alone is not sufficient to draw any conclusion regarding source of investments made during the year. Investments can be made from past earnings /savings also. Merely because income returned for the year was not sufficient to justify investment in LIC premium, it cannot be inferred that the investment was made from undisclosed sources AO appears has proceeded to form his belief of escapement of income in the present case on an implausible premise. His premise that the investments during the year are sourced from the incomes earned during year suffers from a basic fallacy. In fact, this information could not have even lead to suspicion about the income having escaped assessment. AO needed to conduct some more inquiry, determine the quantum of income which the assessee had been returning in the past years, and whether considering his life style and other factors he could have reasonably accumulated the amount to the extent of Rs.10 lakhs for making investment in LIC premium. He ought to have sought explanation from the assessee of the source of investment, and if his inquiries and investigation would have not satisfied him only in such circumstances, AO could have formed belief of escapement of income on account of source investment in LIC premium remaining unexplained. Thus information in the possession of the AO could not have lead to belief of escapement of income so as to assume valid jurisdiction to reopening the case of the assessee u/s 147. CIT(A) has proceeded on the exactly wrong premise as that on which the AO had proceeded that the source of investments is to be co-related or explained through income earned during the year, that is why, CIT(A) has noted that the AO had verified the returned income and the amount of investment and had rightly come to the conclusion that the assessee had no sufficient source of making such investment - since we have held the jurisdiction assumed u/s 147 to be invalid, the assessment order passed, as a consequence is not sustainable in the eyes of law and without jurisdiction. Therefore, the same is directed to be set aside - Assessee appeal allowed. 2023 (3) TMI 264 Short Foreign Tax Credit - Credit of TDS deducted by employer - revised computation of income furnished during assessment proceedings on the premise that the claim cannot be entertained unless made in the return of income (original or revised) - AO while including the overseas income has omitted to grant the excess foreign tax credit - CIT(A) dismissed the appeal of the assessee on the grounds that the employer has not at revised his TDS return and hence the order of the Assessing Officer is affirmed - As argued that the assessee qualified as a Resident and Ordinarily Resident of India and filed his return of income for AY 2014-15 in India duly reporting his Kenya sourced salary income and claimed relief under the provisions of Section 90 read with Article 25 sub article 2(a) of the India Kenya DTAA - HELD THAT:- Placing reliance on the judgment of Hon ble Supreme Court in the case of Goetz (India) Ltd. [ 2006 (3) TMI 75 - SUPREME COURT] the appellate authorities are empower to accord the right relief to the assessee. Hence, we hereby direct the AO to consider the entire taxes paid in India and Tanzania and give due credit to the taxes deposited of Rs.19,26,610/- as per Form 26AS. AO shall also accord foreign tax credit as per the revised claim filed by the assessee. The tax credit to the assessee cannot be denied merely on the grounds that the deductor has not filed its revised TDS return which is beyond the control of the assessee. Ordered accordingly. 2023 (3) TMI 263 Deduction u/s.11 12 - delay in filing of the audit report in Form 10B - auditors of the assessee had failed to include the Form 10B being the audit report alongwith return of income - HELD THAT:- A perusal of the decision of the Hon ble P H High Court in the case of Shahzedanand Charity Trust [ 1997 (8) TMI 72 - PUNJAB AND HARYANA HIGH COURT] clearly shows that the Hon ble P H High Court has categorically held that the audit report u/s.12A(1)(b) of the Act can be filed even at the appellate stage. Thus, clearly, the Hon ble P H High Court has held that the filing of the audit report alongwith the return as per provisions of section 12A(1)(b) is not mandatory. As we are faced with a decision of the Hon ble High Court on the issue, the decision of the Co-ordinate Bench of this Tribunal would not hold value of precedence. Thus, clearly, it is noticed that the audit has been done within time in the case of the assessee and it is only the audit report which has not been filed within the time prescribed. This is only a venial breach of the provisions. This being so, as also considering the fact that CBDT in its Instruction No.1/1148 has given the powers to the AO to condone the delay in filing of the audit report, we are of the view that the impugned assessee should not be denied the benefit of deduction u/s.11 12 of the Act on account of the said venial breach in respect of the delay in filing of the audit report. Consequently, the delay in filing of the audit report in Form 10B is condoned and the Assessing Officer is directed to consider the same when computing the income of the assessee. Appeal of the assessee stands allowed. 2023 (3) TMI 262 Income deemed to accrue or arise in India - treating the receipt of fees for business support services as Fees for technical services ('FTS') as per Article 12 of the tax treaty between India and Netherlands - Whether services are managerial in nature and hence do not fall within the definition of FTS? - HELD THAT:- We note that identical issue was subject matter of consideration of the ITAT in assessee s own case [ 2023 (3) TMI 165 - ITAT DELHI] - The Tribunal had held that the payment received cannot be treated as FTS under Article 12 (5) of India Netherlands DTAA and the addition made is to be deleted. Since facts in the present case are identical to the aforesaid and no distinguishable feature has been pointed out, hence following the precedent we direct that the payment received in this case cannot be treated as FTS under Article 12 (5) of India Netherlands DTAA. Hence, this ground of assessee stands allowed. 2023 (3) TMI 261 Revision u/s 263 - disallowance u/s 36(1)(iii) - HELD THAT:- We find that the AO only asked the assessee to show cause as to why the interest expense on debentures should not be disallowed being capital in nature and be added back to the total income of the assessee. In its reply assessee submitted that the amount capitalised u/s 36(1)(iii) includes proportionate interest on debentures and the remaining amount was claimed as revenue expenses by the assessee. Thus, it was submitted by the assessee that it has already capitalised the interest cost on debentures till the Unit-2 was put to use. Though the assessee has provided detailed working of computation of disallowance u/s 36(1)(iii) however, it is not evident from the record that any specific enquiry/investigation/examination of such details was ever conducted by the AO or any show cause notice was issued by the AO to examine the other components of expenditure during the assessment proceedings. The assessee has also not brought on record any show cause notice issued by the AO on this issue. Since the issue under consideration during the assessment proceedings was only confined to the disallowance of interest expenses on debentures, therefore, we are of the considered view that revision proceedings under section 263 have correctly been initiated in respect of this issue. Accordingly, to this extent, the impugned order passed u/s 263 is upheld. Applicability of section 79 - As held that the assessee has diluted shareholding in respect of major shareholder vis- -vis the preceding years in which loss was incurred, and thus as per section 79 he assessee is not entitled to carry forward earlier years brought forward losses, which was allowed by the AO. Since no enquiry in this regard, which was warranted in the facts and circumstances of the case, was made by the AO resulting in the assessment order to be erroneous insofar as prejudicial to the interest of the Revenue. During the hearing, Tribunal in Khajrana Ganesh Properties Pvt Ltd. [ 2017 (9) TMI 1726 - ITAT MUMBAI] and Instant Traders Private Limited [ 2018 (9) TMI 211 - ITAT MUMBAI] wherein it has been held that the issue whether the loss in the year may be carried forward to following year and set off against the income of subsequent year is liable to be determined by the Assessing Officer who deals with the assessment of such a subsequent year. Thus, we are of the considered opinion that this issue was duly examined by the Assessing Officer during the scrutiny assessment proceedings. Therefore, the impugned revision order passed under section 263 of the Act is set aside to this extent. Taxability of the share premium received by the assessee u/s 56(2)(vii)(b) - One of the requirements was that the loan given by the lender banks are to be converted into equity shares/preference shares and part of promoter shares were also to be transferred to the lender bank. In pursuance of the above scheme, the assessee company, during the year, converted the existing loan given by the banks into equity shares. Accordingly, the shares were issued to banks, namely, Allahabad Bank, Bank of India, Corporation Bank, Union Bank of India and Andhra Bank. We find that the disclosure regarding the issuance of shares to the aforesaid bank was also made by the assessee in its audited financials. Thus, it is evident that the circumstances under which shares were issued to the banks were completely different than the shares issued to M/s Prism Cement Ltd., as the earlier was under the Scheme/Guidelines issued by RBI. Thus we are of the considered opinion that this issue was duly examined by the AO during the scrutiny assessment proceedings. Therefore, the impugned revision order passed under section 263 of the Act is set aside to this extent. Grounds raised by the assessee are partly allowed. 2023 (3) TMI 260 Losses incurred by the assessee from F O operations - Speculation loss or business loss - as per CIT-A Assessee has shown the above loss as business loss from trading in derivatives which has been conducted on recognized stock exchange and accordingly as per proviso (d) to section 43(5), the F O loss is not speculative loss - Whether CIT(A) has erred allowing the F O loss as business loss contrary to explanation to Section 73? - HELD THAT:- As decided in case of Asian Financial Services Ltd.[ 2016 (3) TMI 685 - CALCUTTA HIGH COURT] that loss incurred on account of derivatives would be deemed business loss under proviso to section 43(5) and not speculation loss and, hence, Explanation to section 73 could not be applied and as such, loss would be allowed to be set off against income arising out of proper business because derivatives were treated differently within meaning of Explanation to section 73(4) and not at par with shares. In the case of Blue Berry Trading Co. (P.) Ltd. [ 2022 (9) TMI 76 - ITAT MUMBAI] the ITAT held that where assessee executed futures and options transactions in recognized stock exchange through SEBI registered share broker, said transactions would fall under exception provided in definition of speculative transactions in terms of section 43(5)(d), and loss incurred on same was to be treated as regular business loss. In the assessee s own case of Magic Share Traders Ltd. [ 2019 (6) TMI 1392 - ITAT AHMEDABAD] the ITAT held that Loss incurred on account of derivatives would be deemed business loss under proviso to section 43(5) and not speculation loss and, hence, Explanation to section 73 could not be applicable; and such loss would be set off against income from business. In our considered view, we observe that various courts, including the ITAT in assessee s own case for assessment year 2012-13 and assessment year 2013-14 has decided the issue on identical facts in favour of the assessee. 2023 (3) TMI 259 Revision u/s 263 by CIT - Cash deposits during the monetization period - conclusion by the learned PCIT, that inquiries or verification which ought to have been done, had not carried out by the AO - whether AO has carried out the inquiries or verification in regard to cash deposits under reference which ought to have been carried out in the circumstances of the case? - HELD THAT:- As submitted that AO has issued specific show cause notice wherein the assessee was asked to substantiate the genuineness of the high cash sales made in the month of October 2016. In response thereto, the assessee filed submissions on 24/12/2019, which are available - The other notices issued and information called under section 133(6) of the Act are also in relation to high cash sales. In such circumstances, it cannot be said that Assessing Officer ignored the fact of the cash sales. The evidences like sale bills, sale registers, stock register, partywise cash sales, have been filed during assessment proceeding, which demonstrates that not only purchases, but sales were also duly verified by the AO. PCIT stated that assessee has purchased diamonds and sold diamonds to small customers, which is not practical as a small retail customers don't buy loose diamonds. In this regard, the assessee submitted that it has not sold loose diamonds to customers, but loose diamonds are purchased and after engaging labourers, jewelry was made, which was then sold. The sales are only in respect of the jewelry during October 2016 and which includes bangles, pendants, rings, earrings etc, which is evident from the copy of the bills, ledger accounts, labour bills etc. detailed filed in the paperbook. The finding of the PCIT that enquiry or verification which ought to have been done, had not been done, is devoid of merit and not justified. The Explanation -2 to section 263 of the Act cannot be invoked in such circumstances. The order of the Ld. PCIT is accordingly set aside. The grounds of the appeal of the assessee are accordingly allowed. 2023 (3) TMI 258 Addition u/s 68 - addition of share capital and share premium being unexplained cash credit - HELD THAT:- As decided in the case of CIT Vs Orchid Industries (P) Ltd [ 2017 (7) TMI 613 - BOMBAY HIGH COURT] by holding that provisions of section 68 of the Act cannot be invoked for the reasons that the person has not appeared before the AO where the assessee had produced on records documents to establish genuineness of the party such as PAN, financial and bank statements showing share application money. In the instant case before us also, the assessee has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but AO has not commented on these evidences filed by the assessee. Besides all the four investors have also furnished complete details/evidences before the AO which proved the identity , creditworthiness of investors and genuineness of the transactions. Under these facts and circumstances and considering underlying facts in the light of ratio laid down in the decisions as discussed above , we are inclined to set aside the order of Ld. CIT(A) by allowing the appeal of the assessee. 2023 (3) TMI 257 Delayed payment of Employees' contribution to Provident Fund u/s 36(1)(va) - HELD THAT:- It is undisputed that the employee s contribution to provident fund was deposited by the assessee after the due date prescribed under the relevant statute but within the due date of filing the income tax return in accordance with section 139(1). We find that the Hon ble Supreme Court in Checkmate Services (P.) Ltd. [ 2022 (10) TMI 617 - SUPREME COURT ] held that payment towards employee s contribution to provident fund after the due date prescribed under the relevant statute is not allowable as deduction under section 36(1)(va). Decided against assessee. 2023 (3) TMI 256 Deduction u/s 80IA - Disallowance of claim as assessee failed to file its return of income within the time prescribed under subsection (1) of Section 139 - filing of the return within such stipulated period was pre-requisite for claim of deduction under this section - CIT-A deleted the addition - HELD THAT:- In the present case, however, the return of income of the assessee for AY 2012-13 was filed beyond the prescribed time limit u/s 139(1) of the Act. For that the ld.CIT(A) has recorded a categorical finding that the assessee was prevented by sufficient cause in filing the return within the prescribed time limit perhaps due to weak responsive Departmental website. Even in a situation the return of income of the assessee for AY 2012-13 is treated as belated return beyond the prescribed time limit provided u/s 139(1) of the Act, then also, as per the judgement of the Hon ble Supreme Court in the case of G.M. Knitting Industries Pvt. Ltd. [ 2015 (11) TMI 397 - SC ORDER] which was followed by the coordinate Bench of the ITAT, Pune in the case of Krushi Vibhag Karmchari Vrund Sahakari Pat Sanstha [ 2022 (10) TMI 348 - ITAT NAGPUR] , the assessee is very well entitled to claim deduction u/s 80IA(4) of the Act. Therefore, we are unable to find any valid reason to interfere with the findings arrived at by the ld.CIT(A). Thus, we uphold the same. Accordingly, the sole ground of the Revenue dismissed. Deduction u/s 80IA - denial of deduction as conditions prescribed for claiming deductions u/s 80IA has not been complied with by the assessee because: (i) there was no development of any infrastructure facility; (ii) the appellant had been treating bio medical waste which was not covered in the definition of infrastructure facility as per Explanation to section 80IA(4) of the Act and (iii) the appellant was paying rent for plant machinery which indicate that the facility was not owned by the appellant - HELD THAT:- On being asked by the Bench, rebutting the allegation of the AO that the assessee do not own any plant and machinery as it had paid rent thereon, the ld. Counsel submitted the copies of the financial statements including balance sheet and chart of relevant FY showing claim of depreciation which reveals that the assessee has deployed and set up plant and machinery and had also claimed depreciation thereon which was allowed by the AO without any dispute or doubt, thus, inadvertent mentioning of rent payment in P L Account on plant machinery does not raise any bar regarding claim of deployment of plant machinery by the assessee for setting up of infrastructure facility on which claim of deduction u/s 80IA(4) has been made. We are in agreement that the conclusion drawn by the ld.CIT(A) that the appellant assessee has set up bio-medical facility as per the provisions of section 80IA(4) of the Act, there is no monetary restriction on the amount of investment required to set up eligible infrastructure facility the appellant assessee has carried out the work contract with various hospitals and local government bodies relating to treatment, management and disposal of bio-medical waste as per the terms and conditions entered with various authorities which has been noted by the ld.CIT(A) in the first appellate order. He rightly noted that it is not an allegation of the AO that any of the prescribed conditions have not been met or else the appellant has not carried out the work relating to biomedical waste treatment in accordance with the terms and conditions prescribed in the contracts. After recording the above findings, the ld.CIT(A) finally observed that the infrastructure facility set up by the appellant in the form of bio-medical waste treatment plant is entitled to deduction u/s 80IA(4) - Decided in favour of assessee. 2023 (3) TMI 255 Income deemed to accrue or arise in India - Fee for Technical Services (FTS)/Fee for Included Services (FIS) u/s 9(1)(vii) and Article 12(4)(b) of India USA Double Taxation Avoidance Agreement (DTAA) - amount received by the assessee towards provision of Marketing Support Services (MSS) - assessee before us is a wholly owned subsidiary of an Indian entity - HELD THAT:- The scope of services also provide for expert advice on developing market strategy and marketing campaign, attending meetings, conference etc. for the promotion of parent company s products, providing relevant reliable and current information with regard to the products of parent company with regard to USA market and gathering data for enhancing the marketability of parent company products. They are not of the nature to term them as either technical or consultancy services. Even assuming that some amount of consultancy is involved, however, the question which begs an answer is whether, make available condition of Article 12(4)(b) is satisfied. Article 12(4)(b) provides that a consideration received from provision of technical or consultancy services can be treated as FIS only when it makes available technical knowledge, experience, skill, know-how or processes to the service recipient. The term make available has been interpreted in various judicial precedents to mean that there must be a transfer of technical knowledge, experience, skill, know-how etc. from the service provider to service recipient in a manner so as to enable the service recipient to perform such services in future independently without any aid and assistance of the service provider. Nothing has been brought on record by the departmental authorities to demonstrate that there is complete transfer of technical knowledge, know-how, skill etc. to the recipient of service so as to enable him to use such technical know-how, knowledge, experience, skill etc. independently without the aid and assistance of the service provider. The reasoning based on which, the departmental authorities have proceeded to treat the consideration received as FIS is, provision of such services has resulted in enduring benefit to the parent company. The aforesaid interpretation of the departmental authorities is an antithesis to the interpretation given to the term make available by various judicial authorities. The decisions relied upon by learned counsel appearing for the assessee clearly support this view. We hold that the services provided by the assessee under the marketing support service agreement are neither in the nature of technical or consultancy services under Article 12(4) of India USA Tax Treaty. Even, assuming that it is in the nature of consultancy services, however, the make available condition provided under Article 12(4)(b) of the Tax Treaty is not satisfied. That being the case, the consideration received cannot be treated as FIS under Article 12(4)(b) of the Tax Treaty. Accordingly, we delete the addition made by the Assessing Officer. Appeal of assessee allowed. 2023 (3) TMI 254 TP Adjustment - International transactions with its AEs for providing software consultancy services - Selection of MAM - CUP method OR TNMM - HELD THAT:- There is no reason for the TPO to reject CUP method selected by the assessee to bench mark international transactions with its AEs when the assessee was consistently following said CUP method. Further, the assessee has filed comparable transactions of third party sales and proved that margin earned from AE transactions is higher than the margin earned from non-AE transactions. It is a well settled principle of law by the decision of the Hon ble Supreme Court in the case of Radhasaomi Satsang [ 1991 (11) TMI 2 - SUPREME COURT] that although, res judicata is not applicable to Income Tax proceedings, but rule of consistency needs to be followed unless there is a change in facts and circumstances which requires to be considered a different approach or method for considering any issue. As here is no change in the facts and circumstances of the case for the impugned assessment year when compared to previous two years and thus, TPO ought to have followed CUP method selected by the assessee for benchmarking international transactions with its AEs. DRP without appreciating the above facts, has simply upheld TNMM as most appropriate method and upheld the TP adjustment as suggested by the TPO. Hence, we reverse the findings of the DRP and direct the TPO to consider CUP as most appropriate method to bench mark international transactions with its AEs. Accordingly, we direct the TPO to delete the addition made towards TP adjustment made towards AE sales. TP adjustment towards corporate guarantee - assessee company has given a corporate guarantee for the foreign currency loan of US from Axis Bank, Hong Kong to its AE XIUS holdings USA and computed guarantee commission @1% on total corporate guarantee given by the assessee to its AE and has made adjustment - HELD THAT:- We find that after amendment of definition of international transaction, corporate guarantee given by any entity to its AE falls under the definition of international transactions in terms of sec.92B of the Act and thus, any corporate guarantee given by the assessee to its AE is an international transaction, which needs to be bench marked. When it comes to rate, at which, such guarantee commission needs to be benchmarked, then bank guarantee given by the commercial banks cannot be a yardstick to apply to corporate guarantees given by an entity. Further, the guarantee commission rate is depending upon the facts of each case and the risk involved in the transactions between the assessee and its AE - As following the decision of the Hon ble Bombay High Court in the case of Everest Kanto Cylinder Ltd. [ 2015 (5) TMI 395 - BOMBAY HIGH COURT] we direct the TPO to benchmark corporate guarantee fees @ 0.5% on total corporate guarantee given by the assessee to its AE. Appeal filed by the assessee is partly allowed. 2023 (3) TMI 253 TP Adjustment - Comparable selection - HELD THAT:- Merely because E-Infochips earns a margin at 72.32% for a particular year, it is not possible to exclude the same because, it is not solely depending upon the margin for a particular year, the ALP adjustment will be made but it would be only one of the several entities the average of which is taken into consideration, and thereby ironing out the difference if any, from entity to entity. The view taken in Intoto Software ( 2013 (10) TMI 599 - ITAT HYDERABAD] has no application to the facts of the case. We, therefore, decline to interfere with the findings of the authorities below insofar as E-Infochips, Bangalore Ltd., is concerned. Kals Information Systems - Merely because the Kals Information Systems derives 6% revenue from training, it cannot be said that it is not a good comparable. Persistent Systems Ltd. - When there is a difference between Outsourced Software Product Development and the IT services which means rendering software development service, and the assessee is in software development service, naturally the Persistent Systems Ltd., which is into Outsourced Software Product Development is not a comparable because of functional dissimilarity. Interest on receivables - We are of the considered opinion that the ends of justice would be met by accepting the interest rate on similar foreign currency receivables/advances as LIBOR+200 points. We accordingly uphold the findings of the learned DRP on this aspect and direct the learned Assessing Officer / learned TPO to adopt the same. 2023 (3) TMI 252 Revision u/s 263 - Validity of assessment order passed - no valid service of notice u/s 143(2) - HELD THAT:- valid service of notice u/s 143(2) - HELD THAT:- In the present case, the revenue authorities is not in a position to show that there was a valid service of notice u/s 143(2) of the Act before completion of assessment. Being so, the assessment order is ab-initio which cannot be survived. This is being so, where there is no valid assessment order that order cannot be subject matter of revision u/s 263 of the Act by PCIT. Accordingly, on the primary ground raised by assessee, we quash the order passed by PCIT u/s 263 of the Act. Appeal filed by the assessee is allowed. 2023 (3) TMI 221 Validity of reopening of assessment - order passed u/s 148A(d) as it stood amended - interpreting the provision of the Act before its amendment - HELD THAT:- The legal principle which had been laid down by several decisions of the Hon ble Supreme Court while interpreting the provision of the Act before its amendment would equally apply with full force while considering the correctness of an order passed u/s 148A(d) of the Act. That apart, the assessee has no other alternative remedy as against the order impugned in the writ petition and we are also of the prima facie view that it would not be right to hold that all issues can be adjudicated at the time of the reassessment proceedings. We say so because when a jurisdictional issue is raised before the writ Court, even assuming an alternative remedy is available, it will not operate as an absolute bar for entertaining the writ petition as jurisdictional issue goes to the root of the matter and it is one of the exceptional factors carved out by the Hon ble Supreme Court for exercise of jurisdiction under Article 226 of the Constitution of India. Therefore, we are of the view that the learned Single Bench ought to have considered the correctness of the order impugned before it qua the grounds which were canvassed by the assessee/appellant in his reply to the notice issued under Section 148A(b) of the Act. Assumption of jurisdiction by referring to Section 149(1) - In the reply dated 14th June, 2022 the first ground which has been raised by the assessee is by contending that the re-assessment has to necessarily fall within Clause (b) to sub- Section (1) of Section 149 of the Act. Referring to the decision of the Hon ble Supreme Court in the case of Union of India vs. Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] it is contended that the new law relating to re-assessment shall operate and that all defence under Section 149 of the new law shall be available to the assessee. The assessing officer while passing the order passed by the writ petition has given an interpretation and held against the assessee. Therefore, necessity arises for the writ Court to consider the correctness of such finding, which finding cannot be agitated before the assessing officer in the re-assessment proceedings. Thus, we are of the view that the appellant has made out a case for entertaining this appeal. Accordingly, the appeal stands admitted. If the reassessment proceeding is allowed to proceed further during the pendency of the appeal, this appeal will become infructuous. Therefore, there will be an order of interim stay of the order passed under Section 148A(d) of the Act dated 28th July, 2022 as well as the consequential notice issued under Section 148 of the Act dated 28th July, 2022 until further orders. The respondent/department is directed to file their affidavit-in-opposition not only to the grounds in this appeal but also the averments raised in the writ petition. Customs 2023 (3) TMI 251 Search and Seizure - Smuggling - reasons to believe - Quashing of search and seizure proceedings and all consequential proceedings, launched against the respondent/assessee - assessee had impugned the action contending that there were no reasons to believe in terms of Section 110 of the Central Excise Act, 1944 read with Section 123 of the Customs Act, 1962 - HELD THAT:- The power of search which in this case was resorted to, can be gathered from Section 105 of the Customs Act. Section 105 confers power to search premises if the Assistant Commissioner of Customs or Deputy Commissioner of Customs has reasons to believe that goods liable to confiscation or documents relevant for such proceedings are secreted in any place. In such event, the search proceedings can be authorized by the Assistant Commissioner or other official. Section 123 on the other hand enacts a burden of proof which is that where any goods to which that provision applies are seized under the Act on the reasonable relief that they are smuggled goods, the burden of proof would then shift to the person in possession of such goods to prove that they were not smuggled goods. The basic premise of Section 105, and indeed search proceedings is the reasonable belief that some objective material exists on the official record to trigger searches. The person authorizing the search must express his satisfaction that the material is sufficient for him to conclude that search is necessary; further there should exist something to show what is such material. The mere recording that the person concerned is satisfied, without the supportive materials, therefore, is insufficient to trigger a lawful search - In the present case the concerned official who authorized the search did not refer to any information nor indeed any report on the record which was produced before the High Court. Appeal dismissed. 2023 (3) TMI 250 Time Limitation to issue SCN to a Customs Broker (from date of receipt of offence report) - whether the learned Tribunal was correct in holding that a show cause notice under Regulation 20 of the Customs Brokers Licensing Regulations, 2013 (CBLR) is required to be received by the customs broker within a period of ninety days of the receipt of the offence report and it is not sufficient that the notice is sent within the said period of ninety days? Whether the word issue is required to be construed as served ? HELD THAT:- As it would be apparent in the facts of the present case, notice was, in fact, issued within the period of ninety days as contemplated under Regulation 20(1) of the CBLR. Attempts to deliver the said notice to the respondent were also made within the said period but the notice could not be delivered by the postal authority as the premises of the respondent was found closed. Clearly, the question whether the procedure under Regulation 20 of the CBLR is triggered within time is not dependent on the customs broker receiving the notice - there are no reason to interpret the word issue , as used in regulation 20(1) of CBLR, in any way other than its plain meaning. In the context of issue of summons or notices, the same would be issued when they are prepared and put in the course for communicating to the recipient. In Banarsi Debi [ 1964 (3) TMI 11 - SUPREME COURT ], the date of the notice for re-opening the assessments was within the eight years from the end of the relevant Assessment Year but the same was served beyond the period of eight years. One of the questions that arose for consideration of the court in that case related to the interpretation of Section 4 of the Indian Income Tax (Amendment) Act, 1959 (hereafter the Amending Act ). The object of the said Section was to save the validity of the notices which were issued beyond the prescribed time. Section 4 of the Amending Act used the word issue . The court held that if the narrow meaning is given to the expression issue , the Section would be unworkable because the objective of the Amending Act was to save the validity of the notices issued under Section 34(1) of the Income Tax Act, 1922, which were beyond the period of eight years. It is in that context that the court held that the word issue under Section 4 of the Amending Act was used interchangeably as served , as the object was to save the notices which were served beyond the period of eight years. The court held that it was obvious that the expression issue , as used in Section 4 of the Amending Act, was not used in a narrow sense of sent as the principal Section 34(1) of the Income Tax Act, 1922 required the notice to be served within the prescribed period (eight years). In the present case, there is no ambiguity in the language of Regulation 20(1) of the CBLR. It requires that the Commissioner issues a notice within the period of ninety days from the receipt of the offence report. There is, thus, no reason to construe the expression issue any different from its plain meaning. The decision of the Supreme Court in R.K. Upadhyaya8 also recognizes that the plain meaning of the expression issuance of notice would be to dispatch the same. The learned Tribunal has erred in holding that the Commissioner was required to serve a notice to the respondent within a period of ninety days from the date of receipt of the offence report. The Commissioner was required to issue a notice within the period of ninety days and there is no dispute that it had done so - The impugned order is set aside and the matter is remanded to the learned Tribunal to consider the respondent s appeal on merits - Appeal allowed by way of remand. 2023 (3) TMI 249 Validity of Notification dated 11.05.2022 issued by the Central Government rescinding the Notification dated 16.05.2017 imposing anti-dumping duty - seeking direction to the Central Government to issue a Notification for imposition of anti-dumping duty, based on the recommendation made by the designated authority - Maintainability of appeal under section 9C - Whether the Central Government exercises legislative power? - Provisional assessment of imports. The main contention that has been advanced is that despite the recommendation having been made by the designated authority in the final findings to impose anti-dumping duty, the Central Government kept quiet and did not issue the consequential notification for imposition of anti-dumping duty - submission is that under rule 18 of Anti Dumping Rules, the Central Government has to take a decision within three months of the publication of final findings, and as the Notification was not issued for a long period of time it should be presumed, particularly when the Central Government issued the Notification dated 11.05.2022 revoking the imposition of duty that the Central Government had decided not to impose anti-dumping duty on the subject goods from the subject country. Whether Central Government has taken a decision not to impose anti-dumping duty? - HELD THAT:- In the present case, it is not in dispute that the final findings of the designed authority were published on 11.01.2021. In the appeal, the appellant has stated that an office memorandum was not issued by the Central Government. Learned counsel appearing for the Central Government has also not stated or placed such an office memorandum. The issue that arises for consideration is whether a presumption can be drawn that the Central Government has taken a decision not to impose anti-dumping duty as a decision was not taken within three months by the Central Government from the date of publication of the final findings by the designated authority and infact the notification dated 11.05.2022 was issued rescinding the notification dated 16.05.2017. On a consideration of the provisions of the Tariff Act and the 1995 Anti-Dumping Rules, it is clear that a presumption can safely to be drawn that the Central Government, by keeping silent for a long period of time, shall be deemed to have taken a decision not to impose anti-dumping duty and such a case would also fall in the category of cases where an office memorandum has actually been issued conveying the decision of the Central Government not to impose anti-dumping duty. The inevitable conclusion, therefore, that follows from the aforesaid discussion is that it has to be presumed that the Central Government has taken a decision not to impose anti-dumping duty despite a recommendation having been made by the designated authority for imposition of anti-dumping duty. This presumption also finds support from the fact that the Central Government issued a notification dated 11.05.2022, after the final findings were submitted by the designated authority on 15.02.2022, rescinding the notification dated 16.05.2017 earlier issued by the Central Government imposing anti-dumping duty for a period of five years. The matter has, therefore, to be remitted to the Central Government for taking a decision on the recommendation made by the designated authority. Maintainability of appeal under section 9C - HELD THAT:- The maintainability of the appeal under section 9C of the Tariff Act was examined at length by this very Bench in M/s. Apcotex Industries Limited vs. Union of India and 38 others [[ 2022 (11) TMI 1096 - CESTAT NEW DELHI] ] and it was held that the appeal would be maintainable against the decision of the Central Government contained in the office memorandum not to impose anti-dumping duty. In Balaji Amines Ltd. vs. The Union of India [[ 2022 (12) TMI 985 - CESTAT NEW DELHI] ], the Bench also held that an appeal under section 9C of the Tariff Act would be maintainable even if the Central Government does not issue a notification for imposition of anti-dumping duty for a long period of time after the designated authority has made a recommendation for imposition of anti-dumping duty. Whether the Central Government exercises legislative power? - HELD THAT:- The reasons have to be recorded by the Central Government when it proceeds to form an opinion not to impose any anti-dumping duty despite a positive recommendation made by the designated authority in the final findings for imposition of anti-dumping duty. The matter, therefore, would have to be remitted to the Central Government for taking a decision on the recommendation made by the designated authority for imposition of anti-dumping duty on the import of the subject goods from the subject countries. Provisional assessment of imports - HELD THAT:- The provisional assessment of imports concerning the subject goods from the subject countries will be made for the time being - It is, however, made clear that the aforesaid direction will not create any equities in favour of the domestic industry. The matter is remitted to the Central Government to consider the recommendation made by the designated authority - Appeal allowed by way of remand. Corporate Laws 2023 (3) TMI 248 Seeking directions to the Respondents to allow benefit of Companies Fresh Start Scheme (CFSS) in respect of overdue filings to the Petitioner who could not avail the benefit of filing under CFSS-2020 by 31st December, 2020 - HELD THAT:- After the Petitioner company was incorporated in the year 2003, only one Balance Sheet/ Annual Return was filed. There is no explanation whatsoever for non-filing of the documents and the balance sheets for more than a decade by the company. This led to the company being struck off and disqualification of the directors in 2017. The Petitioner has chosen to get the company restored only in 2019 and the DIN restored in September, 2020 after filing of a writ petition. If there was any delay in processing of the DIN restoration pursuant to the orders, which were passed by this Court in RAVINDER SINGH CHAUHAN VERSUS MINISTRY OF CORPORATE AFFAIRS ANR [ 2020 (9) TMI 1285 - DELHI HIGH COURT] , the Petitioner ought to have availed of its remedies in accordance with law to ensure restoration of the DIN during the subsistence of CFSS. The Petitioner cannot be seen as being recalcitrant in its filing of documents and forms and choose to seek extension of benefits of CFSS, which is merely an alleviating measure. The said Scheme starts by saying that the alleviating measure has been introduced by the government primarily in view of the COVID-19 pandemic and was extended in view of the same. The Petitioner has been a consistent defaulter in filing the documents and forms including the balance sheets for over several years. Thus, the CFSS cannot be extended in this manner beyond the date of operation inasmuch as there were a large number of companies, which were disqualified and if benefit under CFSS is extended to such companies beyond the date, the said scheme would be completely unworkable. The Petitioner was quite conscious of the fact that it had to file its documents and balance sheets in time, but has chosen not to do so. Thus, the long delay by the Petitioner cannot be completely sought to be condoned by the two or three months delay in restoring the DIN by the ROC. The Petitioner was conscious of the deadlines under the CFSS and ought to have taken its remedies, but has chosen not to do so. In view of the same, this would not be a case of an extension the benefit of the CFSS scheme to the Petitioner - considering that the DIN was restored only after the order was passed by the Court in above cited case, the documents and forms shall be permitted to be submitted by the Petitioner along with requisite fee in accordance with the Companies Act and Rules. Petition disposed off. 2023 (3) TMI 247 Seeking restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC), NCT of Delhi and Haryana - HELD THAT:- The Audited Balance sheets from Financial Year 2017-18 to 2018-19 as also the company repeatedly renewed Bank Guarantees for the project awarded to it by the Government of Odisha, as has a long-term loan of Rs. 29,96,000/- shows that the Appellant Company is having substantial movable as well as immovable assets. Therefore, it cannot be said that the Appellant Company is not carrying on any business or operations. Hence, the order passed by the National Company Law Tribunal (Cuttack Bench, Cuttack) as well as Registrar of Companies, Odisha is not sustainable in law. The name of the Company directed to be restored to the Register of Companies subject to the compliances imposed - application allowed. Securities / SEBI 2023 (3) TMI 276 Adani Group of companies - Decline in the share price as precipitated by a report published by Hindenburg Research on 24 January 2023 - manipulatIon of share prices - volatility in the securities market - failure to disclose transactions with related parties and other relevant information concerning related parties in contravention of the regulations framed by SEBI - loss of investor wealth in the securities market over the last few weeks because of a steep decline in the share price of the Adani Group of companies - This report inter alia alleges that the Adani Group of companies has manipulated its share prices; failed to disclose transactions with related parties and other relevant information concerning related parties in contravention of the regulations framed by SEBI; and violated other provisions of securities laws - HELD THAT:- SEBI is seized of the investigation into the allegations made against the Adani Group companies. SEBI has not expressly referred to an investigation into the alleged violation of the Securities Contracts (Regulation) Rules 1957 which provide for the maintenance of minimum public shareholding in a public limited company. Similarly, there may be various other allegations that SEBI must include in its investigation. As a part of its ongoing investigation, SEBI shall also investigate the following aspects of the issues raised in the present batch of petitions: a. Whether there has been a violation of Rule 19A of the Securities Contracts (Regulation) Rules 1957; b. Whether there has been a failure to disclose transactions with related parties and other relevant information which concerns related parties to SEBI, in accordance with law; and c. Whether there was any manipulation of stock prices in contravention of existing laws. The above directions shall not be construed to limit the contours of the ongoing investigation. SEBI shall expeditiously conclude the investigation within two months and file a status report. SEBI shall apprise the expert committee (constituted in paragraph 14 of this order) of the action that it has taken in furtherance of the directions of this Court as well as the steps that it has taken in furtherance of its ongoing investigation. The constitution of the expert committee does not divest SEBI of its powers or responsibilities in continuing with its investigation into the recent volatility in the securities market. In order to protect Indian investors against volatility of the kind which has been witnessed in the recent past, we are of the view that it is appropriate to constitute an Expert Committee for the assessment of the extant regulatory framework and for making recommendations to strengthen it. The remit of the Committee shall be as follows: a. To provide an overall assessment of the situation including the relevant causal factors which have led to the volatility in the securities market in the recent past; b. To suggest measures to strengthen investor awareness; c. To investigate whether there has been regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies; and d. To suggest measures to (i) strengthen the statutory and/or regulatory framework; and (ii) secure compliance with the existing framework for the protection of investors. The Expert Committee shall be headed by Justice Abhay Manohar Sapre, a former judge of the Supreme Court of India. The Chairperson of the Securities and Exchange Board of India is requested to ensure that all requisite information is provided to the Committee. All agencies of the Union Government including agencies connected with financial regulation, fiscal agencies and law enforcement agencies shall co-operate with the Committee. The Committee is at liberty to seek recourse to external experts in its work. Insolvency & Bankruptcy 2023 (3) TMI 246 Approval of the Resolution Plan pertaining to its dissolution - dissenting debenture holders - power to mould relief and approve the RP - HELD THAT:- A Bench of three Judges of this Court, in the case of SECURITIES AND EXCHANGE BOARD OF INDIA VERSUS RAJKUMAR NAGPAL ORS. [ 2022 (9) TMI 110 - SUPREME COURT] , allowed the appeal, insofar as it held that the SEBI Circular would have retrospective application. However, this Court noted that the RCFL RP was extremely beneficial to debenture holders in as much that, for those with exposure upto Rs. 10 lakhs would receive 100% of their principal amount, whereas those with exposure of more than Rs. 10 lakhs would receive 29.96% of the principal amount, which is greater than the amount of recovery made by secured lenders, who would receive 24.96% of the principal amount. In the present case also, small investors, whose exposure is up to Rs. 5 lakhs, are benefiting to the extent of 100% of their principal amount. Even debenture holders whose exposure is more than Rs. 5 lakhs are receiving 23.24% of their principal amount, similar to the case of Rajkumar Nagpal. The facts in the present case are identical to the facts in the case of Rajkumar Nagpal. In the present case also, we find that a different voting mechanism proposed under the SEBI Circular will further delay the resolution process and potentially disrupt the efforts undertaken by the stakeholders, including the retail debenture holders. In the present case also, such unscrambling of the resolution process will not only prove time consuming but may also adversely affect the agreed realized gains to the retail debenture holders, who have already consented to the negotiated settlement before the High Court. We find that in the present case also, we should extend the benefit under Article 142 of the Constitution of India to the retail debenture holders. We are inclined to issue such directions to mould the relief in view of the particular facts and circumstances in the present case, which are similar to that in the case of Rajkumar Nagpal. In exercise of the powers under Article 142 of the Constitution of India, the RP preferred by AIIL qua the debenture holders allowed, except the dissenting debenture holders. 2023 (3) TMI 245 Preferential, undervalued and fraudulent transactions - Related party transactions - Appellant Pray Projects has argued that the Appellant was unaware of the imminent initiation of CIRP of the corporate debtor and it entered into separate Option Agreements with the corporate debtor as genuine commercial transactions relating to real estate property, which was done at an arm s length by the Appellants - HELD THAT:- Admittedly, SUIL and STPL are related parties of the corporate debtor since they all belong to the same group of companies and therefore the amounts received by the corporate debtor from Pray Projects i.e. Rs. 5 crores and from Fervent Securities i.e. Rs. 1 crore were transferred to the corporate debtor s related parties between 10.12.2018 to 17.12.2018 as is evident from the summary of option agreements in the TAR which is extracted earlier in this judgment and Flow Charts I II. It is thus clear that amounts paid by Pray Projects and Fervent Securities were not retained by the corporate debtor, but were transferred to two entities viz. SUIL and STPL which are companies in the same group as the corporate debtor. While the interest in the property Chambers project was created in favour of Pray Projects and Fervent Securities through the two option agreements dated 15.12.2018 and 17.12.2018 respectively, the consideration amounts were not retained by the corporate debtor, but transferred on receipt to its related entities SUIL and STPL. Thus, these amounts did not remain part of the assets of the corporate debtor. The two Option Agreements thus created fiction of transfer of property in Chambers Project without any consideration being actually retained by the corporate debtor. An analysis of the various transactions which are included in the bank account statements and TAR and which has been shown in the Flow Charts makes it abundantly clear that whatever amount was paid by Pray Projects and Fervent Securities as option advance were immediately transferred on receipt to the SUIL and STPL (which are related parties of the corporate debtor and also companies in the same group) and thus these amounts were not retained by the corporate debtor. It thus becomes clear that while interest in the property Chambers project of the corporate debtor was created in favour of Pray Projects and Fervent Securities, the consideration against these Option Agreements was not retained by the corporate debtor and no amounts were added in the assets of the corporate debtor - no amounts can be claimed from the corporate debtor in its CIRP by the Appellants Pray Projects and Fervent Securities. Pray Projects and Fervent Securities have claimed that they were not aware of the insolvency related proceedings against the corporate debtor MPPL. It is a fact that the corporate debtor MPPL which entered into such agreements with Pray Projects and Fervent Securities was very much aware that the matter relating to admission of section 7 application against the corporate debtor had been reserved for orders on 10.12.2018 and the corporate debtor had admitted the debt and default - if the corporate debtor enters into such transactions even though the other parties may be entering into such transactions without being aware that such transactions could be avoidance transactions, the fact that such transactions are to the detriment of the legitimate interests of the creditors of corporate debtor cannot be denied. It is therefore convincing that the transactions as undertaken in relation to the two Option Agreements are avoidance transactions which infringe sections 43 and 45 of the IBC. It is amply clear that the Option Agreements I II are preferential and undervalued transactions and, therefore, they are avoidance transactions as per sections 43 and 45 of IBC. Therefore, the two Option Agreements No. 1 and II are declared null and void and any interest created in the property Chambers project of the corporate debtor by virtue of these Option Agreements are also declared non est in law and null and void . It is abundantly clear and established that the payment of Rs. 5 crores made by Pray Projects to the corporate debtor in December, 2018 did not remain with the corporate debtor, but were almost immediately transferred to its group entities SUIL and STPL, and Rs. One crore paid by Fervent Securities to the corporate debtor was also not retained by the corporate debtor, but was transferred to the group entity STPL where SUIL and STPL are related parties of the corporate debtor as the corporate debtor MPPL, SUIL and STPL belong to the same group of companies. Thus, these amounts were not part of the assets of the corporate debtor during the CIRP of the corporate debtor. Therefore, the two entities Pray Projects and Fervent Securities cannot claim any payment as a result of insolvency resolution of the corporate debtor. The Impugned Order does not bear any infirmity and needs no intervention - Appeal dismissed. 2023 (3) TMI 244 Validity of resolutions passed in the 5th COC meeting of the Corporate Debtor - quashing of illegal decision of the COC as passed in the 5th COC meeting - seeking to pass an ex-parte ad interim order staying the decision and/or Resolutions passed in the 5th COC meeting for change of management of the Applicant No. 1. HELD THAT:- The impugned order does not grant any interim relief in terms of any of the reliefs prayed in the I.A./656/2023. The limited direction issued by the Adjudicating Authority is however, in order to ensure that the applicant s rights are not adversely affected, the resolution passed in the 5th CoC meeting of the Corporate Debtor vide Item No. B2 may not be further acted upon by the Respondents . Parties in the application were heard on 01st and 2nd February, 2023 which is apparent from the proceedings brought before this Tribunal and fixed 15.02.2023 for hearing which hearing could not take place and date was fixed by the Adjudicating Authority for hearing on 01st and 2nd March, 2023 on the application. No exception can be taken to the order passed by the Adjudicating Authority on 15.02.2023 extending the interim order and fixing the next date on 01st and 2nd March, 2023 - at the stage when the Adjudicating Authority is seized of the application I.A. 656/2023 and had already fixed date on 1st and 2nd March, 2023 for hearing of the application, this Appeal need not to be entertained. Hon ble Supreme Court in Wander Ltd. and Another Vs. Antox India P. Ltd. [[ 1990 (4) TMI 280 - SUPREME COURT] ] had laid down that in exercise by the Court if it is shown to be exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions, Appellate Court can interfere - It is not found that the exercise of jurisdiction of the Adjudicating Authority in the present case is arbitrary, capricious, or perverse. The ad-interim-order passed by the Adjudicating Authority shall not in any manner influence the decision on the application on merits - appeal disposed off. 2023 (3) TMI 243 Maintainability of application - it is alleged that applicant has not disclosed all the true facts in the application - HELD THAT:- The present application is not maintainable and is totally mis-conceived because not only the fact that the Applicant has not disclosed all the facts in the present application much less about the dismissal of their appeal by the Hon ble Apex Court but even if this fact is kept aside for the time being, the Applicant is not a party in the appeal in which the application has been filed and that the application could not have been filed in a decided appeal which was disposed of way back on 14.05.2019 in the case of SUPERNA DHAWAN ANR VERSUS BHARTI DEFENCE AND INFRASTRUCTURE LTD. ORS [ 2019 (5) TMI 1969 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] . The present application is not maintainable and being totally mis-conceived is thus hereby dismissed. 2023 (3) TMI 242 Maintainability of petition - seeking initiation of Corporate Insolvency Resolution Process (CIRP) - Financial Creditors failed to make repayment of its dues - Non-Performing Assets (NPA) - Time Limitation - HELD THAT:- On perusal of the records, it is noticed that this Application has been filed on 30.03.2021 and the Date of NPA and Date of Default is stated to be 31.03.2017 and 02.12.2016 in the Part-IV of the Petition. Further, the Date of Default as per record of default with Information Utility is stated to be 01.03.2017. In view of this, the present Application having been filed on 30.03.2021 is barred by limitation in view of Date of Default as per Part-IV date as well as per IU Records. The Financial Creditor has already filed Financial Statement till 31.03.2016. Since this financial statement has been signed on 13.12.2016, it does not save the case of the Financial Creditor. As the limitation period expires before 24.03.2020, the enlargement of period as granted by Hon ble Supreme Court on account of Covid-19 is not applicable in the Present Petition filed by the Financial Creditor. In view of this the Present Petition filed by the Financial Creditor for imitating CIRP against the Corporate Debtor is barred by law of limitation and hence is liable to be dismissed. 2023 (3) TMI 241 Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or Operational Debt - HELD THAT:- From the perusal of the documents, the Bench is of the view of that there is no dispute that this money was collected for the maintenance/taxes payment and there is no default in handing over the flats booked by members of the Applicant Society. The amount in question is akin to the money paid in advance to a service provider for availing services and defraying expenses to be incurred by such service providers in rendition of agreed services. Any debt arising from supply of goods or services including advance paid towards supply of such goods or services fall under the definition of Operational Debt. In the present case, the Applicant has filed this Application claiming itself to be a Financial Creditor under section 5 (8) (f) of the Code whereas the amount in question is in nature of an Operational Debt recoverable from the Corporate Debtor, even if the debit notes towards common amenities as claimed by the Corporate Debtor for the period subsequent to the handing over are not considered. Since the amount in question is not a financial debt, the Applicant cannot said to be a Financial Creditor so as to make eligible to file an application under section 7 of the Code. The Present Application is not maintainable and hence is liable to be dismissed. 2023 (3) TMI 223 Seeking Approval of Resolution Plan - HELD THAT:- There are no error in the order of the National Company Law Appellate Tribunal in JET AIRCRAFT MAINTENANCE ENGINEERS WELFARE ASSOCIATION VERSUS ASHISH CHHAWCHHARIA RESOLUTION PROFESSIONAL OF JET AIRWAYS (INDIA) LTD. ORS; ASSOCIATION OF AGGRIEVED WORKMEN OF JET AIRWAYS (INDIA) LTD. VERSUS JET AIRWAYS (INDIA) LTD. ORS. [ 2022 (11) TMI 332 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] where it was held that Non-payment of full provident fund amount to the workmen and employees and the gratuity payment till the insolvency commencement date amounts to non-compliance of provisions of Section 30(2)(e) of the Code. However, in the facts of the present case, all other parts of the Resolution Plan have not been found to infirm in any manner, there are no case for interfering with the order approving the Resolution Plan. Appeal dismissed. Service Tax 2023 (3) TMI 240 Non-issuance of Discharge Certificate in Form SVLDRS 4 as per Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) as per provision of Section 127(8) of the Finance Act, 2019 - HELD THAT:- It is not in dispute that the petitioner as required under the law had made the payment twice. Both the times, it had twice been recredited in his account and therefore, for the third time, it needed to make a payment and by then, the time limit prescribed had already been over. The order in case of M/s Yashi Contructions [ 022 (3) TMI 110 - SC ORDER ], taken note of, where the Apex Court while endorsing the refusal of the relief by the High Court for extension of period to make the deposit under the scheme, held that the settled proposition of law is that the person who wants to avail the benefit of a particular scheme has to abide by the terms and conditions of the scheme. If the time extended is not provided under the scheme, it will then tantamount to modifying the scheme which is the prerogative of the government. Here is not the case where any extension sought for not having been granted where request on the part of the petitioner would also not tantamount to modifying the scheme as he was never at fault. Twice when he made an attempt, he failed on account of technical glitch. Applying the ratio laid down by the Apex Court mutandis mutandis in the case of the present petitioner who was not under the fault when this amount could not get deposited with the bank and was recredited after having once gone to the bank, to deny him the benefit only because there were technical glitches about which it could not have done anything, would amount to leaving the petitioner remediless which is impermissible under the law and this also since has been succinctly addressed by the Apex Court., following the decision in the case of M/s Shekhar Resorts Limited [ 2023 (1) TMI 256 - SUPREME COURT ] this petition is being allowed. The payment as per the directions of the committee was needed to be made by 30.6.2020 which instead had been made on 8.7.2020. Not only the Court can be oblivious of the Covid 19 pandemic being at its peak during that period for generating the payment was something where there was no say of the petitioner. Therefore, not only the respondents denial for considering the case but later recovery of the entire amount of Rs 7,68,675/- on 11.7.2022 shall need to be reverted/refunded to the petitioner. Accordingly the petition is allowed. 2023 (3) TMI 239 Levy of Service Tax - remuneration collected from the member units for the activity of treatment of effluent water - N/N. 08/2017-S.T. dated 20.02.2017 - HELD THAT:- The said activity has been exempted from the levy of Service Tax vide Notification No. 08/2017-S.T. dated 20.02.2017 - Since the activity is exempt from the levy of Service Tax as per the above Notification, there are no hesitation to hold that the demand cannot sustain and requires to be set aside. The impugned order is set aside - appeal allowed. 2023 (3) TMI 238 Refund of CENVAT Credit - management consultancy service - real estate agent service - garden maintenance - club and association service - negative list services or not - HELD THAT:- From perusal of rule 5 of CENVAT Credit Rules, 2004, it is seen that it is not the utilization of input/input service in exports that has prompted this attractive neutralization scheme but the restricted scope for utilization of credit legitimately availed towards discharge of duty or tax liability. Though referred to as refund, it is also not refund in the true sense that the claimant is not person liable to pay tax or duty having had to pay such duty or tax despite lack of authority of law; the discharge of tax liability by the provider of service, and in accordance with authority of law, is not in question at all. The intent is to neutralize the taxes included, thereby, in the value of goods manufactured or service so that taxes are not exported too. The limited remit of the sanctioning authority, subject to procedural prescription separately notified, is spelt out in the rule itself to limit denial, if any, only to such contingencies and disallowance, if at all, is restricted to the ascertainment of proportion in accordance with that borne by exports to total turnover as mathematical attribution. This has been held by the Tribunal in KKR INDIA ADVISORS PVT. LTD. VERSUS COMMISSIONER OF CGST, MUMBAI CENTRAL AND VICE-VERSA [ 2018 (6) TMI 797 - CESTAT MUMBAI ] where it was held that The first step is to a show cause notice invoking Rule 14 of the Cenvat Credit Rules, 2004 for denial of the cenvat credit. Then only the refund can be rejected which was not done. Obviously the refund claim cannot be rejected by disputing the admissibility of the input services. It is seen from the impugned order that no such notice was issued to the appellant herein. The preliminary objections to the refund limited itself to a few objections that appear to have been responded to and none of those have proposed that the said amount of credit was to be recovered. In the absence of this critical requirement to comply with principles of natural justice, the denial of credit is without authority of law and impugned order is set aside. Appeal allowed. 2023 (3) TMI 237 Rejection of refund claim for refund of service tax filed by the appellant - excess payment of service tax not in dispute - reverse charge mechanism - time limitation - principles of unjust enrichment - HELD THAT:- Undisputedly and admittedly appellant has paid certain amounts under reverse charge mechanism by making self assessment of service tax payable under the reverse charge mechanism, on the basis of the Trade License Agreement entered into with their principals at Thailand for the use of their trade name/ brand name. Subsequently the value of the taxable service got revised downwards as after negotiations the period of the agreement was revised and also the consideration to be paid. Accordingly the principals issued the credit note on 31.08.2017 for the period 01.01.2017 to 31.03.2017 and revised invoice 20.10.2017 for the period 01.04.2017 to 30.06.2017. For the period 01.04.2017 to 30.06.2017 appellant had filed the return as prescribed under ST-3 format on 14.08.2017. The present claim for the refund of excess service tax paid has been made by the appellant on 03.04.2018. Appellant submit that as per Article 265 of the Constitution of India, Government cannot retain the excess of tax paid and the same needs to be refunded. Admittedly no revised return as provided for in terms of Rule 7B of the Service Tax Rules, 1994 or under provisions of the Section 142 (9) of the CGST Act has been filed by the appellant. In para 4.6 and 4.7 of the order in original, Assistant Commissioner has recorded specific finding to this effect and impugned order upholds the same in para 11 and 12. It is settled provision in law that the when the statute provides a manner of doing the thing, then the thing has to be done in the prescribed manner only and all other manner are necessarily barred. Principles of unjust enrichment - HELD THAT:- The issue of unjust enrichment comes into picture only if the refund is otherwise found admissible. In the case under consideration if the refund is not found admissible, application of the principles of unjust enrichment need not be considered. Appeal dismissed. 2023 (3) TMI 236 Levy of Service tax and penalty - Business Auxiliary Services (BAS) - commission paid by the appellant to the foreign agents is taxable under Reverse Charge Mechanism - suppression of facts or not - rule 2(1)(d)(iv) of the Service Tax Rules, 1994 - HELD THAT:- On perusal of records, it is found that in paragraph 10 11, it has been categorically held by the Commissioner that there is no suppression of facts. The proposal to impose penalty has also been dropped holding that there was no suppression of facts and that non-payment of service tax was due to bonafide belief that the amount paid to the commission agents is not subject to levy of service tax. Although the Commissioner had rendered a finding that there is no suppression of facts with intend to evade payment of tax, the demand for the extended period has been confirmed. Such confirmation of demand is not legal and proper and requires to be set aside. The appellant succeeds on the ground of limitation - thus it is not necessary to delve into the merits of the case as the issue on limitation is answered in favour of assessee. The impugned order is set aside on the ground of limitation - appeal allowed. 2023 (3) TMI 235 Refund of service tax paid - refund claim rejected by the adjudicating authority as sufficient documents were not produced before him including the invoices issued by M/s. Kinfra and also the worksheets submitted by the appellant did not tally with the refund claim - HELD THAT:- There is no dispute about the admissibility, in principle, the refund, in view of Section 104 of the Finance Act, 2017. The refund claim was filed within prescribed time period of six months as stipulated under Section 104 of the Finance Act,2017. The only issue to be addressed now is correctness of the documents vis- -vis the quantum of claim filed by the appellant. The adjudicating authority categorically made observation that the worksheets submitted by the appellant did not tally with the services tax challans, etc., issued by M/s. Kinfra. To meet the ends of justice, it is prudent to remand the matter to the adjudicating authority only for the limited purpose of verification of the documents on record and the documents that would be submitted by the appellant during the remand proceedings so as to verify the claim filed by the Appellant. It is stated by the Ld.CA that the appellant would furnish all the documents within a fortnight from the date of communication of this order - Appeal allowed by way of remand. 2023 (3) TMI 234 Refund of the service tax, krishi kalyan cess and swachh bharat cess - duty free shops located in taxable territory - denial of partial refund claim for the 1st period solely for the reason that it was barred by limitation under section 11B of the Excise Act. Whether pursuant to the letters submitted by the appellant for ensuring compliance of the order dated 14.08.2019 passed by the Tribunal on 14.08.2019 for the 1st period and the order passed by the Commissioner (Appeals) on 26.05.2021 for the 3rd period, the Assistant Commissioner could have treated these letters as fresh refund applications, so as to confer power upon him to issue show cause notices to the appellant for denying the refund? HELD THAT:- The Assistant Commissioner completely fell in error in treating the communication dated 05.09.2019 submitted by the appellant for compliance of the order dated 14.08.2019 passed by the Tribunal as a fresh application filed by the appellant for refund of Rs. 12,77,92,894/-. As would be seen, the appellant had made it clear in the communication dated 05.09.2019 that it was in the context of the refund application dated 31.01.2018 and the prayer made was to grant refund in view of the decision rendered by the Tribunal in M/S DELHI DUTY FREE SERVICES PVT. LTD. VERSUS COMMISSIONER CGST DIVISION, DELHI SOUTH COMMISSIONERATE [ 2019 (8) TMI 1489 - CESTAT NEW DELHI] . Thus, the proceeding initiated by the Assistant Commissioner by treating the said communication as a fresh refund application was without jurisdiction and consequently all orders passed thereon are without jurisdiction and liable to be set aside - The Assistant Commissioner, unless the decisions of the Tribunal and the Commissioner (Appeals) had been set aside, had necessarily to comply with the directions issued by the Tribunal and the Commissioner (Appeals) and grant refund to the appellant for the 1st period and 2nd period. What is also important to notice in the present case is that while adjudicating the first show cause notice dated 24.08.2018 that was issued to the appellant when the refund application was filed, the Assistant Commissioner had, in the order dated 06.09.2018, after reminding himself of the observations made by the Supreme Court in Kamalakshi Finance [ 1991 (9) TMI 72 - SUPREME COURT ] about maintaining judicial discipline, followed the decision of the Tribunal in Flemingo to hold that the appellant would be entitled for refund of service tax as the duty free shops were located beyond the taxable territory and it is only on the ground of limitation that the claim was rejected - The finding of the Assistant Commissioner on the issue of limitation was set aside by the Tribunal in the decision rendered on 14.08.2019 holding that limitation would not be applicable in a case where tax was realised without authority of law and so the appellant was entitled to refund. Thus, the show cause notice that was again issued by a different Assistant Commissioner on 05.05.2020 when the appellant filed an application for implementing the said decision of the Tribunal, seeks to not only nullify the decision of the Tribunal but also seeks to re-open the issues that had earlier settled by the Assistant Commissioner. Under section 11BB of the Excise Act, if the amount is not refunded within three months from the date of the receipt of the application, interest has to be paid to the applicant from the date immediately after the expiry of the three months from the date of receipt of such application till the date of refund of such duty. The uncalled for action of the Assistant Commissioner in denying refund to the appellant would also result in payment of an amount towards interest under section 11BB of the Excise Act to the appellant. Appeal allowed. 2023 (3) TMI 233 Levy of penalty u/s 76, 77 and 78 of FA - levy of service tax came into effect of Goods Transport Services from 01.01.2005 under reverse charge mechanism, as it was new entry, the appellant did not pay service tax - amount paid by transport agency on account of Goods Transport Services, was appropriated, after adjudication - HELD THAT:- Considering the facts that there is no dispute that the service tax has been paid by the service provider, although the same was paid by the assesse under reverse charge mechanism and the same has been paid and appropriated. Similar case has been decided by this Tribunal in the case of CST, KOLKATA VERSUS M/S KAMRUP COKE INDUSTRIES, M/S PARASNATH COKE INDUSTRIES, M/S SKJ COKE INDUSTRIES AND VICE VERSA [ 2018 (11) TMI 1927 - CESTAT KOLKATA] , where this Tribunal held that We agree with the submissions made by the assessee that when service tax amount has been deposited before the Show Cause Notice, no penalty should be imposed. Thus, the assessee is entitled for benefit of Section 80 of the Finance Act, 1994 as the amount of service tax has already been paid. Therefore, the appellant is entitled for immunity from imposing penalty. Therefore, the order imposing penalty under Sections 77 78 of the Finance Act, 1994 on the assessee are set aside and the order dropping the penalty under Section 76 of the Finance Act, 1994, is upheld. Appeal allowed - decided in favour of assessee. Central Excise 2023 (3) TMI 232 CENVAT Credit - inputs in stock, in process or inputs contained in their final products and required to have been paid before effecting clearance under Notification No.60/2003- CE dated 29.07.2003 under Rule 12 of the Cenvat Credit Rules, 2002 - invocation of extended period of limitation u/s 11A(1) - HELD THAT:- The CENVAT credit had been taken by the respondent-department when the final products were exigible to duty. It was availed on inputs till the date of exemption vested in assessee. The respondent could not be divested of that credit as there was no statutory provision to do so. The right to avail credit is indefeasible and there cannot be stated to be any co-relation between the raw material and the final product; that is say, it is not as if the credit could be taken only on final product that was manufactured due to the particular raw material to which the credit was related. It is nobody's case that credit of duty on inputs was taken by the respondent illegally or irregularly. The subsequent exemption of final products manufactured by the respondent from excise duty did not make the respondent assessee liable to reverse the cenvat credit availed as the same was given to it on the date when the final product was not exempted. The respondent was certainly entitled to benefit of cenvat credit in the obtaining circumstances of the case and, therefore, the question of payment of any interest or penalty by the respondent or its officers did not arise. The substantial questions of law are answered accordingly in favour of the respondent and against the appellant. Appeal dismissed. 2023 (3) TMI 231 Utilisation of CENVAT credit amounting towards payment of BED and SED on the final products - Rule 3 (7)(b) of the CENVAT Credit Rules, 2004 - HELD THAT:- In the facts of the present case, no substantial question of law arises for consideration as with respect to this very assessment, show cause notice has already been dropped by this Court on 25.01.2007 in CEA No. 140-2006 and even SLP filed against this order has also been dismissed. Appeal dismissed. 2023 (3) TMI 230 Recovery of irregularly availed Cenvat Credit - ISD invoices did not contain the requisite details as required in terms of Rule 4A of Service Tax Rules, 1994 - No input services covered in the said ISD invoices were received by the appellant unit - credit transferred amount included a portion of credit transferred back by M/s. Pricol Ltd., Plant-I to Pricol ISD Registrant which was subsequently redistributed by the ISD registrant to the appellant unit and such credit is not permissible to be transferred by the ISD to the appellant in terms of Rule 7 of CCR, 2004. HELD THAT:- The Hon ble Tribunal in COMMISSIONER OF CENTRAL EXCISE, SALEM VERSUS PRICOL LTD. [ 2012 (9) TMI 866 - CESTAT CHENNAI] have already decided that input service credit when distributed by the ISD, cannot be held as inadmissible on the pretext that such invoices did not contain all the particulars as required in terms of Rule 4A of CCR, 2004, when it was possible for the department to verify all the input service invoices on the basis of which the credit has been accumulated by ISD. It is seen that the proceedings initiated against M/s. Pricol Limited, Plant-I, Coimbatore, on the issue of retransfer of ISD credit to M/s. Pricol Ltd., ISD was finalized by this Hon ble Tribunal in M/S. PRICOL LTD. (PLANT I) , M/S. PRICOL LTD. VERSUS THE COMMISSIONER OF G.S.T. CENTRAL EXCISE, COIMBATORE COMMISSIONERATE [ 2019 (2) TMI 25 - CESTAT CHENNAI] where it was held that it is evident that M/s. Pricol Ltd., Plant-I has only returned/reversed the exact quantum of Credit that was transferred to it in the first place by the M/s. Pricol Ltd., ISD. Such return/reversal has not enlarged the quantum of Credit that has been availed nor has there been any financial injury caused to the exchequer. This is then only a revenue neutral situation. Appeal allowed - decided in favour of appellant. CST, VAT & Sales Tax 2023 (3) TMI 275 Jurisdiction - suo motu revisional power of the Additional Commissioner of Sales Tax - Was the exercise of the suo motu revisional power by the Additional Commissioner of Sales Tax (Revenue) by way of the impugned order dated 10th May, 2016 under Section 18(1) of the Odisha Entry Tax Act, 1999 (OET Act) without jurisdiction inasmuch as an appeal filed against the Assessment Order sought to be revised, was already pending at the instance of the Assessee? - barred by time limitation or not. HELD THAT:- It is a settled legal position that the suo motu revisional proceeding has to be concluded not beyond five years from the original order of assessment. This Court has interpreted a similar provision contained in Section 23(1) of the Odisha Sales Tax Act, 1947 read with Rule 80 of the Odisha Sales Tax Rules, 1947 in the cases of M/S. SAGARMAL AGARWALLA VERSUS COMMISSIONER OF SALES TAX, ORISSA, CUTTACK AND 2 OTHERS [ 2018 (1) TMI 868 - ORISSA HIGH COURT] and vide Order dated 10th July, 2019 passed in the case of P.P. RICE MILLS VERSUS SPECIAL ADDITIONAL COMMISSIONER OF SALES TAX = [ 2019 (7) TMI 1969 - ORISSA HIGH COURT ] - In P.P. Rice Mills, this Court held that On reading of the Rule in a joint manner would make it clear that for revising an order within a period of three years after providing opportunity to the assessee and calling for the records, the revision order itself has to be passed within a period of three years. The impugned order dated 10th May, 2016 of the Additional Commissioner is hereby set aside - the questions framed by this Court are answered in favour of the Appellant-Dealer and against the Department - appeal allowed. 2023 (3) TMI 274 Challenge to SCN before completion of enquiry - Proposal to levy tax under TNVAT Act - doctrine of mutuality - supply of liquor to the members of club - amounts to a transaction of sale of goods from one person to another attracting taxation under the TNVAT Act, or not - HELD THAT:- The consistent legal position has been reiterated by the Hon ble Supreme Court of India in Union of India -vs- Kunisetty Satyanarayana [ 2006 (11) TMI 543 - SUPREME COURT ] that a charge memo or show cause notice cannot be challenged before the completion of enquiry and the proceedings cannot be interdicted till it reaches its logical conclusion. Having due regard to the aforesaid legal position, as there is nothing which precludes the Petitioner from raising the contentions in this Writ Petition in the reply to be submitted to the Respondents, who are bound to deal with the same before coming to any ultimate conclusion, there is no necessity for the Court to interfere at this pre-mature stage of the matter. It shall be incumbent upon the Petitioner to submit its explanation to the show cause notice, which is impugned in the Writ Petition, if not done already, to the concerned authority by 31.03.2023 - Petition disposed off. 2023 (3) TMI 273 Classification of goods - rate of tax - Choloromint Herbasol - Happydent White - Chatar Patar - liable to tax at 12.5%, as per Schedule F of PVAT Act, 2005 or @ 4% tax under the residue entry? - HELD THAT:- In the present case, the issue that the goods in question namely Choloromint Herbasol and Happydent are medicines have been examined and has attained finality as per the judgments by the Uttrakhand High Court, Allahabad High Court which has been affirmed by the Hon ble Supreme Court by dismissing the SLP against the judgment passed by Allahabad High Court. Reference can now be made to the observations made by the Uttarakhand High Court in the case of Commissioner Trade Tax Vs. Perfetti Van Mell [[ 2008 (7) TMI 870 - UTTARAKHAND HIGH COURT] ] with respect to the appellant-Company itself, the Uttarakhand High Court has observed that the items Choloromint with Herbasol and Happydent White are manufactured by the assessee under the drug licence issued to it by the Directorate of Ayurvedic Medicines of State of Haryana. Even if, for the purpose of utility, Choloromint with Herbasol as mouth freshners and that of Happydent White (baking soda with mint flavor) to keep the teeth clean, these items will not be confectionary items, specially when these items are manufactured under a valid drug licence. The Uttrakhand High Court held the above-said two items, Choloromint with Herbasol and Happydent White being manufactured under a valid drug licence are ayurvedic medicines and trade tax payable on said items @ 4% as per clause (b) of the Sub-Section (2) of Section 4 of Uttranchal Value Added Tax, 2005. In the present case, the Revenue-respondent has not led any evidence or produced any material to discharge the onus on it. Once the goods have been manufactured by the assessee under the Drugs Licence issued by the Directorate of Ayurvedic Medicines then the ayurvedic medicines would fall under Entry 31 of Schedule B attached with the Punjab Value Added Tax Act (PVAT), 2005 and is liable to be taxed @4% as per consistent view taken by the Uttarakhand High Court. The question posed for consideration in this appeal is answered against the respondent-Revenue and in favour of the assessee-appellant - Appeal allowed. 2023 (3) TMI 229 Classification of goods - rate of tax - sale of Wheat Bran (Chokad) - Taxable @ 4% treating the same as industrial input coming under SI No.74 of Part-II of Schedule-B particularly when Wheat Bran (Chokad) is generally exempted under Entry 3 of Schedule-A? - HELD THAT:- The fact remains that an entry in a taxation statute admits only of strict interpretation. If the legislative intent was that there should be some conditionality attached to granting exemption from VAT on the sale of Chokad , then it should have been expressly stated as has been done in Column 3 in regard to Entries 24 and 38. That there being no such conditionality as far as Entry 3 is concerned, the only conclusion that can be drawn is that sales of Chokad irrespective of the purpose for which such Chokad has been purchased by the buyer, would be exempt from VAT. It is not even the Department s case that any notification has been issued by the State Government stating that Chokad is an Industrial input for the purposes of Entry 74 of Schedule B . Without noticing this requirement in Entry 74, both the STO as well as the JCST fell into error in drawing an inference that Chokad sold to NALCO must naturally have been used as an industrial input. This cannot be a matter of surmise or conjecture. If Entry 74 of Schedule B had to be made applicable in order that the sale of Chokad to NALCO is amenable to tax at 4%, then it was necessary for the Department to show that there was a notification issued by the State Government identifying Chokad as an industrial input . In the absence of such notification, no inference could have been drawn that Chokad sold to NALCO was in fact an Industrial input . The Court is, therefore, satisfied that the STO, the JCST and the Tribunal erred in treating the sale of Chokad by the Petitioner to NALCO as an industrial input attracting VAT at 4%. The question framed is answered in the negative, i.e., in favour of the Petitioner-dealer and against the Department. 2023 (3) TMI 228 Violation of principles of natural justice - denial of opportunity to cross-examine the third party whose papers constitutes the basis of assessment - HELD THAT:- In the present case the computer records which reflect the name of a dealer which is identical to that of the Petitioner. However, in view of the plea of the Petitioner that he did not indulge in those purchases, the Petitioner ought to have been given the chance of cross-examining the alleged sellers in order to defend itself effectively in the assessment proceedings. The justification put forth by the STO that such an exercise would result in squandering away of the time or that would to prolong the proceedings, appears not to be justified since the STO could have made the entire exercise of summoning those selling dealers and allowing an opportunity to the Petitioner to cross-examine them, time bound. This is not practical or realistically feasible considering the long lapse of time. At the same time there has clearly been denial of an effective opportunity to the Petitioner-dealer by refusing it the right to cross-examine the selling dealers. While in similar cases it might have been possible for the Court to remand the matter to the STO to complete the above exercise, in the present case, considering that more than two decades have elapsed since those transactions, an opportunity being provided at this stage to the Petitioner to cross-examine the selling dealers might not even be practical. There was no requirement of the selling dealers to preserve any records or to produce such records even if summoned. The entire exercise would certainly at this stage be a pointless one. The Court is unable to sustain the impugned order of the Tribunal and the corresponding orders of the JCST and STO - the revision petition is disposed off. 2023 (3) TMI 227 Demand of additional demand - tax disputes relating to the period before amendment in Section 33 of the HVAT Act - right of appeal - vested right or not - HELD THAT:- Learned counsel for the State has referred to a Division Bench judgment of this Court in KHAZAN CHAND NATHI RAM VERSUS STATE OF HARYANA AND OTHERS (AND OTHER CASES) [ 2004 (3) TMI 720 - PUNJAB AND HARYANA HIGH COURT ] wherein it has been held that the right of appeal is a vested right and it will exist on the date of commencement of lis - The lis can be said to commence under the Haryana General Sales Tax Act (HGST) on the date when return is filed or is required to be filed. Therefore the provisions of Section 39(5) of the HGST Act would continue to govern the right of appeal vested in the petitioners which is saved in terms of Section 4 of the Punjab General Clauses Act (As applicable to State of Haryana). A perusal of the judgment of Khazan Chand Nathi Ram's case further shows that this Court had examined Section 61(2) of the Haryana Vat Act 2003 and concluded that Section 61(2) of the Haryana Vat Act does not give any retrospective effect to the provisions of the aforesaid Act either expressly or by necessary implication. Section 61(2) of the HVAT Act contemplates transfer of pending proceedings pertaining to application, appeal, revision or other proceedings to the authorities constituted under the HVAT Act and it is to be disposed of by the authorities so constituted. Appeal dismissed. 2023 (3) TMI 226 Interpretation of statute - non-obstante clause - Levy of purchase tax under Section 12 of the Tamil Nadu Value Added Tax, 2006 - exemption granted on the basis of the turnover of a dealer - conditional exemption or not - HELD THAT:- The non-obstante clause contained in Section 12 of the TNVAT Act, is limited in its operation only with reference to definition of Input Tax Credit under Section 2(24) of the TNVAT Act. Apparently, there was an need to provide for a non-obstante clause with reference to Sub-section (24) to Section 2 of the TNVAT Act, inasmuch as input tax was defined to mean tax paid by a registered dealer to another registered dealer on the purchase of goods. However in the case of purchase tax under Section 12 of the TNVAT Act, the taxes are not paid by the purchasing dealer to the selling dealer instead the levy/ charge is on the purchasing dealer and he is required to discharge the obligation/liability. But for the non-obstante clause in sub-section (2) to Section 12 of the TNVAT Act the taxes paid under section 12 of TNVAT Act may not qualify as Input Tax Credit within the meaning of Section 2(24) of the TNVAT Act. As a matter of fact, there are provisions under the TNVAT Act which provides for a non-obstante clause which are much wider in its scope and operation. It may also be relevant to note that there are instances/provisions under the TNVAT Act where the legislature intended to give an over-riding effect over more than one provision, it had been expressly provided for as would be evident if one gleans through the TNVAT Act. Statue to be Constructed to make it Effective and Workable - HELD THAT:- A statute or any enacting provision therein must be so construed as to make it effective and operative. If one construes the non-obstante clause in sub-section (2) to Section 12 as extending to Section 19 which governs the conditions for claiming input tax credit, it would result in taxes paid under Section 12 of the TNVAT Act, being automatically available as credit thereby neutralizing the charge and thus the provisions meaningless. The above construction thus ought to be avoided. Avoiding additional or substitution of words/Judicial Legislation - HELD THAT:- The attempt by the revenue to extend the operation of the nonobstante clause in Section 12 (2) of the TNVAT Act, would result in rewriting sub-section (2) to Section 12 which reads as notwithstanding anything contained in sub-clause (2) to Section 2 as notwithstanding anything contained in sub-clause (2) to Section 2 and 19 - Such construction ought to be avoided for the Court cannot aid the legislature, it cannot add or amend the provision. It is contrary to all rules of construction to read words into an Act. Similarly it is wrong and dangerous to proceed by substituting some other words for words of the statute. The court cannot re-frame the legislation for the reason that it has no power to legislate. Different words different meaning - HELD THAT:- This Court had found that the legislature has employed the non-obstante clause differently through the Act, while in some provisions the non-obstante clause is very wide, in some cases it is limited to a particular provision or provisions. The non-obstante clause under sub-section (2) to Section 12 of the TNVAT Act, is limited in its operation to section 2 (24) of the TNVAT Act. If the intention of legislature of employing the non-obstante clause in sub-clause (2) to Section 12 of the Act, was to override Section 19 of TNVAT Act it would have provided for it expressly in sub-section (2) to Section 12, as done in various other provisions of the Act. It is settled rule of construction that if in relation to the same subject-matter different words are used in the same statute, there is a presumption that they are not used in the same sense. The exemption under Entry 68 Part B to the Schedule IV is conditional and the said goods on being despatched to places outside the State would attract the levy of purchase tax under Section 12 of the TNVAT Act. Thus the challenge to the levy of purchase tax is liable to be rejected. Input tax credit of the purchase tax would be subject to Section 19 of the TNVAT Act - the impugned orders insofar as it imposes penalty are liable to be set-aside. Petition disposed off. 2023 (3) TMI 225 Finalisation of assessment and creation of extra demand - extension of the period of limitation - main grievance of the appellant is that the initial assessment order dated 19.11.2015 which he received on 21.01.2016 was void ab initio as the assessment framed was barred by time - HELD THAT:- The assessment order was passed on 19.11.2015 and as per the amendment made in Section 29(4) of the Punjab Vat Act, an assessment order under sub- section (2) or sub-section (3) can be passed by the Commissioner within a period of six years after the date when the annual statement was filed or due to be filed whichever is later. Even the amended sub-section(2) or sub-section (3), also extended time for passing the assessment order for the assessment year 2006-07 till 20.11.2014. In the present case, the assessment year is 2008-09 and the assessment order was passed on 19.11.2015. The period of six years would come to an end in the year 2016. Since the period of limitation got extended from three years to five years and the assessment order with respect to assessment year 2001-02 was made on 10.07.2006 which was held to be within the limitation as provided by amended Section 11-CC. Therefore, the appeal filed by the State of Punjab was dismissed, however, it was held that the assessee was liable to pay only the principal amount of sales tax and no interest of penalty was to be paid by him. Thus, the amendment in Section 29(4) of Punjab VAT Act was made by notification No. 49-Leg./2013 (Punjab Act No. 38 of 2013) dated 15.11.2013. Even the proviso of Section 29(4) had extended the period of limitation for the assessment year 2006-07 till 20.11.2014. In the present case, since the assessment year is 2008-09, the period of limitation of 6 years had not expired when the proceedings were pending before the Commissioner when he passed order dated 28.04.2016. The Tribunal, vide order dated 26.11.2021 had rightly partly allowed the appeal of the assessee by setting aside the order of the Designated Officer imposing interest u/s 32(3) amounting to Rs.15624220/- and the imposition of penalty u/s 53 to the tune of Rs.20832293/- and the tax calculated had to be paid by the assessee. Appeal dismissed. Indian Laws 2023 (3) TMI 224 Dishonor of Cheque - failure to complete part of the promise - legal and legitimate dues or not - signatory of the cheque - vicarious liability for an offence - HELD THAT:- The Hon'ble Supreme Court in the case of ALKA KHANDU AVHAD VERSUS AMAR SYAMPRASAD MISHRA ANR. [ 2021 (3) TMI 381 - SUPREME COURT ] has set out preconditions for a person to be prosecuted under Section 138 of the Negotiable Instruments Act. It was held that there is no question of invoking Section 141 of the NI Act against the appellant, as the liability is the individual liability (may be a joint liabilities), but cannot be said to be the offence committed by a company or by it corporate or firm or other associations of individuals. It is, thus, settled that the complainant has to make specific averments as are required under the law in order to hold the accused vicariously responsible for the offence. The petitioner is, admittedly, the wife of Mr. Gunjan Jain, who is the partner in the accused firm, M/s Swift Construction Expert. There is, however, no manner of doubt that on the date when the alleged offence was committed by the company, the petitioner was not a partner and had nothing to do with the affairs of the partnership firm. It is a settled law that the powers of quashing should be used sparingly, and where the factual matrix in a complaint are laid down clearly and not in a routine manner where bald and unspecified averments are made against the accused persons, the complaint ought not to be quashed. However, where ingredients of an offence are lacking against an accused, it is the duty of the Court to discharge such accused. Holding a Trial against the petitioner under Section 138 read with Section 141, is utmost abuse of the process of law and the Learned Trial Court has passed the summoning order without any application of mind. Petition allowed.
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