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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter April 15, 2024 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles 1. Modified ITR for Business Reorganization from June 2016 to March 2022 possible until June 30, 2024... taxpayer to communicate to JAO by 30th April 2024 By: Vivek Jalan Summary: Section 170A of the Income-tax Act, 1961, introduced by the Finance Act, 2022, allows successor companies to file modified income tax returns following business reorganization orders issued under the Insolvency and Bankruptcy Code, 2016. Initially, entities with reorganization orders before April 1, 2022, were excluded from this provision. However, a recent order by the CBDT now permits these entities to submit modified returns through an e-filing portal. The process involves notifying the Jurisdictional Assessing Officer by April 30, 2024, verification of the return, and electronic filing by June 30, 2024. 2. Importance of Decision-Making information in SMEs: Harnessing the Power of Data-Driven Decision-Making By: Sundaran Damodaran Summary: In the competitive and volatile business environment, small and medium-sized enterprises (SMEs) face numerous challenges that impact their growth and sustainability. Data-driven decision-making is crucial for SMEs, allowing them to make informed choices based on scientific data rather than intuition. This approach enhances business value by providing insights into market trends, customer behavior, and competitive strategies, improving risk management, operational efficiency, and customer engagement. Despite the benefits, SMEs often encounter challenges such as resource limitations and expertise gaps. Overcoming these requires investment in technology and fostering a data-centric mindset. Ultimately, data-driven decision-making is essential for SMEs' success and sustainable development. 3. Characteristics and Qualities of Perfect Trademark By: Ishita Ramani Summary: A perfect trademark should be unique, easily recognizable, and distinct from others in its category. It must be simple to speak, spell, and remember, avoiding complexity and length. The trademark should not be descriptive or suggest the quality of the products, and it should not fall under prohibited classes under the Trademark Act. Ideal trademarks often involve unique geometric designs or coined words. In India, trademark registration involves applying to the Ministry of Commerce and Industries, and legal advice ensures compliance with trademark laws, facilitating the process. 4. RECENT DEVELOPMENTS IN GST By: Dr. Sanjiv Agarwal Summary: India's economic growth is projected to exceed 8% for the fiscal year 2023-24, with potential continued growth in 2024-25, despite global risks. The GST Council will not meet in the first half of 2024 due to elections, potentially delaying key decisions. The selection process for GST Appellate Tribunal members is underway, aiming to enhance dispute resolution. March 2024 saw robust GST collections, marking a significant milestone with a total gross collection of Rs. 20.14 lakh crore. Various guidelines have been issued to improve GST investigation processes and ensure fair elections, alongside updates on the rectification of assessment orders and auto-population of HSN summaries in GSTR-1. 5. Tax Authorities cannot retain the tax deposited under the cancelled GST registration By: Bimal jain Summary: The Bombay High Court ruled that tax authorities cannot retain tax deposited under a cancelled GST registration. The case involved a petitioner who mistakenly deposited tax under a cancelled GST registration and sought a refund. The authorities denied the refund, citing procedural deficiencies and limitations. The court found this approach incorrect, emphasizing that procedural shortcomings should not invalidate a timely filed appeal. The petitioner was entitled to a refund of Rs.1,22,220 with interest, as the tax was not legally due under the cancelled registration. The court highlighted that procedural issues should not impede substantive rights when proceedings are filed within the limitation period. Notifications GST 1. 09/2024 - dated 12-4-2024 - CGST Seeks to amend Notification No. 83/2020 – Central Tax, dated the 10th November, 2020 - Extension of time limit for furnishing the details of outward supplies in FORM GSTR-1 for specified persons Summary: Notification No. 09/2024 - Central Tax, dated April 12, 2024, issued by the Ministry of Finance, amends Notification No. 83/2020 - Central Tax. It extends the deadline for registered persons to furnish details of outward supplies in FORM GSTR-1 for the tax period of March 2024 to April 12, 2024. This amendment applies to those required to file returns under sub-section (1) of section 39 of the Central Goods and Services Tax Act, 2017, excluding those filing under the proviso of the same sub-section. The notification is effective from April 11, 2024. Circulars / Instructions / Orders GST - States 1. GADT/PndC/APLN/4/2021-PandC - dated 3-4-2024 Framework for conducting Joint Audit by CGST and SGST officers. Summary: The a framework for conducting joint audits by Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) officers. During a meeting between the Chief Commissioner of Central Tax and the Special Commissioner of SGST, it was decided that CGST and SGST audit teams would coordinate and participate in each other's audits. Each CGST Audit Circle is to share its monthly audit plan with SGST counterparts, inviting SGST officers to join their teams and vice versa. This initiative aims to enhance the audit capabilities of SGST officers and facilitate the exchange of compliance-related information. Highlights / Catch Notes GST Supreme Court Clarifies Limited Immunity for GST Officers Acting in Good Faith Under General Clauses Act. Case-Laws - SC : Validity of action taken by the GST officers in Good Faith - Expunging a Portion of the High Court's Interim Order - The Supreme Court granted leave and accepted the request to expunge the portion of the High Court's interim order. The portion expunged related to the observation that the good faith clause may not be available to state officers. The Supreme Court clarified the concept of the good faith clause as providing limited immunity to statutory functionaries. The immunity is confined to acts done honestly and in furtherance of achieving the statutory purpose. The Court referenced Section 3(22) of the General Clauses Act, 1897, which defines 'good faith' as acts done honestly, whether negligently or not. Visit to Get Source Court Rules Pre-Deposit for Appeals Excludes Interest on Disputed Tax; Recovery Proceedings Halted Pending Resolution. Case-Laws - HC : Quantification of pre-deposit of 20% before filing an appeal - Disputed tax amount includes demand of interest or not - The High Court examined the relevant provisions and noted that the requirement for pre-deposit mentioned in Section 112(8)(b) does not include interest. It observed a clear distinction in the provision, specifying the pre-deposit amount as 20% of the remaining tax in dispute. The High Court found merit in the appellant's argument and set aside the portion of the order directing the petitioners to pay 20% of the remaining interest. It further directed the respondents not to initiate any recovery proceedings until the writ petition is heard and disposed of. Visit to Get Source Natural Justice Breach: Order Overturned for Ignoring Petitioner's Detailed Reply, Case Sent Back for Reevaluation. Case-Laws - HC : Violation of principles of natural justice - impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - The High Court noted that the petitioner did provide a detailed reply to the SCN, addressing each of the headings provided. The court found the observation of the Proper Officer regarding the insufficiency of the reply to be unsustainable, as it did not reflect a proper consideration of the content submitted. Considering these factors, the High Court set aside the impugned order and remitted the matter to the Proper Officer for re-adjudication. Visit to Get Source High Court Overturns CESTAT Order on Ocean Freight Tax Refund; Upholds Jurisdictional Precedence in Constitutional Matters. Case-Laws - HC : Refund of service tax on Ocean Freight - Precedents - Validity of order of CESTAT for non-following the decision of Non-Jurisdictional High Court, in regard to constitutionality of a provision or not - impugned order passed at the stage when the issue was pending before the Hon'ble Supreme Court - The High Court examined the precedents cited, particularly emphasizing the significance of decisions by jurisdictional High Courts in constitutional matters. It also considered the Supreme Court's subsequent decision in setting aside a ruling by the Gujarat High Court, which clarified the interpretation of the reverse charge mechanism. - Ultimately, the High Court set aside the impugned order and directed the respondents to process the petitioner's refund claim. Visit to Get Source Taxpayer Wins Right to Carry Forward Excess Payment as Input Tax Credit; Court Orders Reevaluation by Revenue Authorities. Case-Laws - HC : Carry forward of excess payment of tax as ITC for next year - Allegation of availment of excess input tax credit - . The appellant argued that the net tax payable for the previous year was in minus, indicating an excess tax payment that should be returned back and carried forward as Input Tax Credit for the next year. The High Court agreed with the appellant's argument and set aside the order passed by the Writ Court. The matter was remitted back to the revenue for reconsideration, with instructions to provide the appellant with an opportunity to present her case. Visit to Get Source Petitioner Allowed to Apply for Delay Condonation Due to Ill Health; Court Directs Evaluation of Reasons for Late GSTR-3B Filing. Case-Laws - HC : Condonation of delay in filing returns - due to ill-health, returns (GSTR-3B) could not be filed within the time prescribed by the second respondent - The petitioner, relying on Section 62(2) of the State Goods and Service Tax Act, 2017, argued that the assessment order should be withdrawn since the returns were filed within 30 days from the receipt of the order, as per the amendment extending the time limit to 60 days. - The Court acknowledged the petitioner's argument and directed them to file an application to condone the delay within 15 days. Upon filing the application, the respondents were instructed to consider the reasons provided for the delay and permit the filing of revised returns accordingly. Visit to Get Source GST Assessment Overturned for Violating Natural Justice; Court Orders Reconsideration with Proper Hearing. Case-Laws - HC : Validity of assessment order of GST demand - Violation of principles of natural justice - Admittedly, notice in Form DRC-01 was issued after conducting an inspection based on the advertisement made by the petitioner in the Indiamart.com. The respondent has not identified any finished goods in the petitioner's premises as claimed by them. - The High court emphasized the importance of providing a proper opportunity of hearing before making any adverse decisions, as mandated by the GST Act. Consequently, the impugned assessment orders were set aside, and the matter was remanded back to the authorities for fresh consideration, with a directive to afford the petitioner a personal hearing and to consider their submissions adequately. Visit to Get Source Attachment Order Overturned Due to Procedural Error, Ensuring Petitioner's Right to Object and Personal Hearing Restored. Case-Laws - HC : Attachment order - SCN was not uploaded on the portal - The High Court acknowledged that the absence of the show cause notice on the portal was a result of inadvertence. It noted that the right of the petitioner to object to the notice and avail a personal hearing was crucial and had been compromised due to this oversight. Recognizing the importance of these rights, the Court set aside the impugned order, allowing the respondent authority to proceed in accordance with the law. Visit to Get Source Income Tax Income Tax Settlement Annulled Due to Incomplete Disclosure; ITSC Exceeded Jurisdiction, Annulled Claims and Immunity. Case-Laws - HC : Settlement applications u/s 245C (1) - “full and true disclosure” - The High court observed that the respondent did not fully disclose the additional income initially, which surfaced only after the Revenue's intervention. The judgment emphasized that the ITSC should not have proceeded with the settlement application without a complete and accurate disclosure. It was held that by doing so, the ITSC exceeded its jurisdiction, leading to the annulment of the settled claims and the immunity provided. Visit to Get Source Tax Authority Must Reconsider Delayed Refund Claim Due to Administrative Oversights and Procedural Errors, Rules Court. Case-Laws - HC : Condonation of delay in filing the revised return of income claiming refund - application filed u/s 119(2)(b) rejected - “genuine hardship” - The Orissa High Court ruled in favor of the petitioner, directing the authority to reconsider the application for condonation of delay in light of the genuine hardship demonstrated by the petitioner. The court pointed out several administrative oversights and procedural errors in how the trust’s application was handled. Visit to Get Source Court Strikes Down CBDT Circular Clause Extending Approval Time for Section 80G(5) as Unconstitutional and Arbitrary. Case-Laws - HC : Regular Approval u/s 80G(5) - Constitutional Validity of circular - CBDT issues circulars enlarging the time limit even beyond the prescribed limit to mitigate the rigours of the statute and the hardship faced by the assessees. The same is in exercise of its powers under Section 119(2)(b) of the Act. - Based on the lack of justification for the differential treatment between existing and new trusts, the High Court declared the impugned clause of the circular as illegitimate, arbitrary, and ultra vires the Constitution of India. Visit to Get Source Court Rules Differential Treatment of Trusts for Section 80G Approval Unconstitutional; No Inherent Right to Extensions. Case-Laws - HC : Regular Approval u/s 80G(5) - The High Court found that while the respondents had the authority to extend the time limit, there was no valid reason provided for the differential treatment between existing and new trusts regarding Section 80G approval. The court noted that the classification lacked a rational nexus with the object sought to be achieved, rendering it arbitrary and unconstitutional. - The court held that the petitioners did not have an inherent right to claim further extensions of time, even if an initial extension was granted by the respondents. The extension of time was considered an act of benevolence rather than a creation of vested rights on the part of the petitioners. Visit to Get Source High Court rules Pr.CIT can't revise assessment orders with prior approval u/s 153D, affirming ITAT decision. Case-Laws - HC : Validity of revision u/s 263 against order u/s 143(3) r/w section 153A - The assessment order was passed with prior approval under Section 153D - The High court examined the jurisdiction of the Pr.CIT u/s 263 regarding errors in the assessment order. The court upheld the ITAT's decision, emphasizing that once an assessment order is passed with prior approval, the same authority cannot invoke Section 263. Visit to Get Source Court Voids Order Over Flawed Notice: Improper Service, Wrong Account, Bias; Petitioner Must Object Timely to Avoid Reinstatement. Case-Laws - HC : Validity of Show Cause Notice and the consequential order of assessment - The High Court found merit in the petitioner's arguments regarding the invalidity of the show cause notice, improper service of the assessment order, misidentification of a bank account, and pre-determined decision-making by the respondent. Citing relevant legal precedents, the court emphasized the importance of procedural fairness and adherence to legal requirements in such matters. Consequently, the court set aside the impugned order and directed the petitioner to submit objections within a specified timeframe. Failure to do so would result in the restoration of the assessment order. Visit to Get Source Currency Exchange Business Deemed Legitimate; Tribunal Removes Cash Deposit Addition, Moots Jurisdiction Issue. Case-Laws - AT : Unexplained cash credit u/s 68 - onus to prove source of cash - The Tribunal found that the assessee's business model of currency exchange was genuine, supported by evidence from previous assessments, cash book entries, and balance sheet figures. Therefore, the addition on cash deposits was deleted. Additionally, the challenge to the validity of jurisdiction became irrelevant after the Tribunal granted relief to the assessee on merits. Visit to Get Source Tribunal Affirms Airport Service Deductions, Validates Government Incorporation, Upholds Concession Fee Provision Decision. Case-Laws - AT : Regarding the deduction u/s 80IA, the Tribunal affirmed that ground handling and cargo handling services provided by the assessee were covered within the scope of 'developing, operating and maintaining' an airport, thereby entitling the assessee to claim the deduction. Additionally, the Tribunal upheld the incorporation of the assessee company as initiated by the Government of India, satisfying the conditions for claiming the deduction. On the disallowance of provision for concession fee, the Tribunal concluded that the provision was made on a certain basis and did not create a debt in favor of the concessionaire, thereby supporting the decision to delete the disallowance by the CIT(A). Visit to Get Source Tribunal Removes Tax Penalty Against Minor, Citing Lack of Guardian Consent and No Additions in Quantum Proceedings. Case-Laws - AT : Penalty u/s 271(1)(b) imposed on minor - The tribunal upheld the appellant's argument regarding being a minor, stating that penalty proceedings initiated against a minor without the consent of their guardian are not legally sustainable. Considering this and the lack of additions in the quantum proceedings, the tribunal ruled in favor of the appellant, deleting the remaining penalty amount. Visit to Get Source Tribunal Overturns PCIT's Section 263 Jurisdiction; Original Assessment Order Reinstated, No Errors Found. Case-Laws - AT : Revision u/s 263 by CIT - The Appellate Tribunal found that the PCIT's assumption of jurisdiction under Section 263 was not justified. It observed that the assessment order was not erroneous, as the Assessing Officer had accepted the returned income and made no additions based on the reasons recorded for reopening the assessment. Therefore, the Tribunal set aside the PCIT's order and restored that of the Assessing Officer. Visit to Get Source Tribunal Recognizes Triplex Flat as Single Residential Unit, Overturning Tax Exemption Rejection by Assessing Officer. Case-Laws - AT : LTCG - Exemption u/s 54F - assessee has purchased triplex flat - The Assessing Officer rejected the claim, arguing that the purchase did not qualify as a single residential house. However, the Appellate Tribunal overturned this decision, emphasizing the unity of structure and practical usage of the purchased flats. Despite the separate identification by the builder, the Tribunal focused on the internal connectivity and common facilities to deem the triplex flats as a single residential unit. Visit to Get Source Tribunal Confirms Cooperative Society Can Deduct Interest Income from Investments with Cooperative Banks u/s 80P. Case-Laws - AT : Disallowance of deduction(s) u/s 80P - interest income from the investments made in co-operative/other bank(s) - The tribunal analyzed Sec. 80P(2)(d) and determined that interest income derived by a cooperative society from investments made with any other cooperative society is eligible for deduction. Despite an amendment excluding co-operative banks from Sec. 80P benefits, the tribunal held that as long as the interest income is derived from investments with a cooperative bank, the deduction is permissible. Visit to Get Source Appeal Dismissed: Tribunal Enforces Strict Time Limits, Rejects 68-Day Delayed Filing Due to Lack of Justification. Case-Laws - AT : Delay in filling appeal before ITAT - Delay of 68 days involved in filing of the appeal - The Tribunal noted the substantial delay in filing the appeal and the absence of any application for condonation of delay. Citing precedent, the Tribunal emphasized the importance of providing valid reasons for delay. The Tribunal highlighted that the law regarding limitation must be construed strictly. - ITAT declined to condone the delay and dismissed the appeal as barred by limitation. Visit to Get Source Customs Tribunal Remands Case for New Hearing Due to Procedural Injustices in Mis-declaration, Undervaluation of Goods. Case-Laws - AT : Undervaluation and Mis-declaration of the goods imported - The tribunal found that the values used in the SCNs were improperly based on an unadjudicated earlier SCN. Since this earlier SCN was still under adjudication, its findings could not be used to substantiate new demands. The lack of a personal hearing and the reliance on preliminary findings from an unadjudicated SCN were seen as breaches of procedural justice. - The case was remanded for a fresh hearing, to be conducted in conjunction with or subsequent to the adjudication of the earlier SCN, ensuring adherence to the principles of natural justice. Visit to Get Source Tribunal Allows Amendment of Bills for Duty Refunds; Criticizes Lower Authorities for Ambiguity in Customs Duty Reclassification. Case-Laws - AT : Amendment in the bills of entry u/s 149 of the Customs Act, 1962 (CA ’62) - refund of excess duty paid - Re-classifying the goods by changing the CTH - The Tribunal noted that the Assistant Commissioner’s rejection letter was ambiguous and lacked substantive reasoning, which the Commissioner (Appeals) failed to rectify. It emphasized the need for a proper order, following principles of natural justice. - The Tribunal disagreed with the lower authorities' interpretation that amendments under Section 149 are impermissible post-clearance for changes impacting duty assessment. It pointed to higher judicial rulings that allowed such amendments where documentary evidence existed. - Consequently, the Tribunal set aside the previous order and remanded the case back for reassessment under the correct CTH. Visit to Get Source Tribunal Rules Currency in Baggage as Goods; Lacks Jurisdiction on Appeals Involving Baggage Goods Import/Export. Case-Laws - AT : Jurisdiction of the Tribunal - Indian currency/Goods - Baggage Rules - The Tribunal analyzed the definitions of baggage and goods under the Customs Act and observed that while currency and baggage were distinct, currency carried in baggage constituted goods imported or exported as baggage. Considering the proviso to Section 129A(1), the Tribunal concluded that it lacked jurisdiction to entertain the appeal, as it related to goods imported or exported as baggage. Visit to Get Source Tribunal Rules on Re-Export Failure: Appellant Must Repay Drawback with Interest Despite Intention to Re-Export. Case-Laws - AT : Failure to re-export the goods after re-import - Recovery of Drawback - The Appellate Tribunal found that the appellant intended to re-export the goods after repair but could not fulfill this requirement and sold the goods locally instead. Considering similar precedent and a Supreme Court judgment, the Tribunal held that the appellant was indeed eligible for the benefit of Notification No.94/96. However, it was made clear that the appellant must repay the drawback claimed along with interest. Visit to Get Source Tribunal Rules Imported Korean Gold Coins Exempt from Customs Duty Under Comprehensive Economic Partnership Agreement. Case-Laws - AT : Classification - Imported goods from Korea - "gold coins (other than legal tenders)" - The Appellate Tribunal concluded that the gold coins, being articles crafted from precious metal, are appropriately classified under CTH 7114 as articles of gold. - After considering the Comprehensive Economic Partnership Agreement between India and South Korea, along with relevant import policies and circulars, the Tribunal determined that the imported gold coins were not subject to any prohibition or restriction. Therefore, the appellant was entitled to exemption from customs duty under the applicable notifications. Visit to Get Source Corporate Law Lease Deed Voided by Tribunal for Violating Company Laws Despite Ongoing Civil Court Case; Jurisdiction Dispute Rejected. Case-Laws - AT : Oppression and Mismanagement - Validity of the Lease Deed - Doctrine of Res Sub-Judice - Appellants argued that the Tribunal overstepped its jurisdiction by setting aside the lease deed while its validity was under scrutiny in a civil court - The Tribunal found that the lease deed violated company laws and the company's Articles of Association. Despite the appellants' arguments regarding jurisdiction and ongoing civil proceedings, the Tribunal upheld its decision to set aside the lease deed, emphasizing the importance of compliance with company laws and protecting the company's interests. Visit to Get Source Appellate Tribunal Rules NCLT Exceeded Authority on Arbitration Agreement and Share Ownership Dispute. Case-Laws - AT : Rightful owners of 4000 shares or not - Exercise of jurisdiction u/s 8 of the Arbitration and Conciliation Act - The Appellate Tribunal emphasizes that the NCLT's jurisdiction under Section 8 of the Arbitration and Conciliation Act is limited to determining the existence of a valid arbitration agreement and whether the dispute is arbitrable. The Tribunal rules that the NCLT exceeded its jurisdiction by making findings on the ownership of shares, which should be decided at an appropriate stage of the main case. Visit to Get Source Indian Laws Court Upholds Tribunal's Decision, Rejects Late Appeal Due to Missed Deadline and Lack of Justification. Case-Laws - HC : Time limitation - Refusal to condone the delay in challenging the Order passed by the Competent Authority and Administrator, SAFEM(FOP)A, 1976 and NDPS Act, 1985, New Delhi - In this case, the court found that the appeal was filed significantly beyond even the extended 60-day period, with no compelling justification provided for the delay. Consequently, the court upheld the Appellate Tribunal's decision not to entertain the appeal, citing a plethora of judgments that reinforced the sanctity of statutory deadlines in legal proceedings. Visit to Get Source Court Rules Confirmed Sale of Mortgaged Property Valid; Borrower's Redemption Rights Extinguished, No Fraud Found. Case-Laws - SC : Sale of mortgaged (scheduled) properties which was to be conducted by the Authorized Officer (Respondent No.2) of the Respondent-Bank - default in repayment of loan by the Borrower - The Supreme Court considered the conduct of the borrower and noted that the confirmed auction sale could only be interfered with in cases of fraud or collusion, which were not present in this case. It observed that the borrower's right of redemption stood extinguished upon execution of the registered sale deed. Therefore, the Court found no justification for the High Court's interference with the confirmed sale, which had reached an irreversible stage. Visit to Get Source IBC Tribunal Dismisses Homebuyers' Petition for Non-Compliance with Insolvency Code's Threshold Requirements. Case-Laws - AT : Rejection of Section 7 Application filed by the Appellant (homebuyers) on the ground of non-compliance of Section 7, sub-section (1), 2nd Proviso - decree-holder is class of Financial Creditor or not - The tribunal noted that the appellants were only four in number, whereas the total units allotted were 488. The Code requires that a petition on behalf of homebuyers (as financial creditors in a class) is maintainable only if either 100 in number or 10% of the total allottees join the petition. The appellants did not meet this threshold. - Regarding the argument of Finacial Credit: the tribunal disagreed, referencing the definition under the IBC that includes financial creditors as those to whom a financial debt is owed. The tribunal highlighted that despite the RERA order, the appellants remained allottees and thus were required to meet the threshold set out u/s 7 of the Code. Visit to Get Source Corporate Guarantor Faces Insolvency Process as Tribunal Rejects Forgery Claims; Past Consideration Validates Guarantee. Case-Laws - AT : Admission of petition under Section 7 of the IBC - initiation of CIRP - Corporate Guarantor - The Tribunal dismissed the claims of forgery, noting the lack of substantial evidence or any legal finding to the contrary. They emphasized the need for allegations of forgery to be established in a competent court, which had not occurred in this instance. - The Tribunal clarified that even past consideration (actions or agreements made before the execution of the guarantee) is sufficient under the law to validate a contract of guarantee. This addressed the concern about the timing of the deeds' execution relative to the disbursement of loans. - Allegations regarding the forged mortgage deeds were similarly set aside. Visit to Get Source Service Tax Petitioner's Duty Liability Acknowledged Before Deadline; Court Rules Final Audit Report Date Irrelevant to Declaration Validity. Case-Laws - HC : SVLDRS - The High Court acknowledged that the petitioner's duty liability was admitted and quantified before the cutoff date of 30.06.2019, as evidenced by records from the audit proceedings. The Court interpreted Section 125(1)(e) and Section 121(r) in conjunction with the CBIC Circular, emphasizing that admissions recorded during the audit process constituted a written communication of the duty payable. - It held that the rejection of the petitioner's declaration solely based on the date of issuance of the final audit report was not tenable, considering the clarification provided by the CBIC. Visit to Get Source Cargo Space Transactions Ruled as Sales, Not Taxable Services, Overturning Tax Demands on Appellant's Activities. Case-Laws - AT : Recovery of Service Tax - Business auxiliary services - sale and purchase of cargo space - The Appellate Tribunal found that the appellant's activities of buying and selling cargo space were transactions of sale, not services rendered. It disagreed with the Commissioner's interpretation that any activity other than sale of goods constitutes a service. The Tribunal held that the appellant's transactions did not fall under the purview of taxable services and thus set aside the service tax demands. Visit to Get Source Appellate Tribunal Rules Sponsorship Services for Sports Events Exempt from Tax, Dismisses Tax Demand. Case-Laws - AT : Classification of service - sale of space and time for advertisement service or not - The Appellate Tribunal carefully examined the agreements between the parties and the nature of the services provided. It found that the sponsors were granted rights only to display their names, without any provision for displaying advertisements or products. Considering the definition of sponsorship and relevant legal provisions, the Tribunal concluded that the agreements resembled sponsorship services, which were exempt from taxation for sports events during the relevant period. As a result, the Tribunal set aside the demand raised by the department, allowing the appeal with consequential relief. Visit to Get Source VAT Tribunal Overturns Tax Demand, Emphasizes Need for Specific Evidence in Stock Transfer Cases. Case-Laws - AT : Rejection of branch transfer / Stock transfer of Goods - The tribunal found that the tax authority inappropriately applied a general conclusion from a small subset of transactions to all transfers, without adequate individual evidence. - The tribunal referenced several precedents that clarify when a movement of goods between states constitutes a sale versus a transfer. The key determination hinges on whether there is a direct link between customer orders and the movement of goods. - Ultimately, the tribunal sided with the company for most of the disputed transactions, reversing the additional tax demand. It held that the burden of proof to demonstrate that these were not branch transfers but sales rested with the State, which it failed to meet except in a limited number of transactions. Visit to Get Source Case Laws: GST 2024 (4) TMI 528 Availability of Good Faith clause in Section 157 of the GST Act to the officers of the State - Expunging a Portion of the High Court s Interim Order - Respondent sought protection from arrest u/s 69 - High Court is still examining the writ petition, but by the interim order impugned herein, it criticised the prolonged stay of the search party at the residence of the respondents as unauthorized and illegal - HELD THAT:- It is not required to deal with the merits of the issue as the matter is still pending before the High Court, more so when the respondent has submitted that he is not interested in proceeding against the officers and seeks a quietus to the issue. The High Court was of the view that the protection contemplated under section 157 of the GST Act, which is in the nature of a good faith clause, may not be available to the officers - A good faith clause, explained in the vocabulary of the rights and duties regime, can be said to be a provision of immunity to a statutory functionary. Such provisions are in recognition of public interest in protecting a statutory functionary against prosecution or legal proceedings. This immunity is limited. It is confined to acts done honestly and in furtherance of achieving the statutory purpose and objective. Section 3(22) of the General Clauses Act, 1897 best explains good faith as an act done honestly, whether it is done negligently or not. Good faith clauses in statutes providing immunity against suits, prosecution or other legal proceedings against officials exercising statutory power are therefore limited by their very nature, that far, and no further. The High Court was not conducting a suit, prosecution, or other legal proceeding against a statutory functionary. There are no doubt that the High Court was conscious of the principles governing good faith clauses and therefore couched its displeasure and distress by stating that such officials may not be protected or that it may be difficult to accept the contention of good faith. These observations are in the nature of advance rulings. This is because even before the initiation of a suit, prosecution or legal proceeding, the High Court expressed a tentative opinion. If such observations remain, they will affect the integrity and independence of that adjudication, compromising the prosecution and the defence equally. Appeal disposed off. 2024 (4) TMI 527 Violation of principles of natural justice - impugned order does not take into consideration the reply submitted by the Petitioner - cryptic order - under declaration of output tax - reconciliation of GSTR-01 with GSTR-09 - excess claim Input Tax Credit - Scrutiny of ITC availed under ISD - ITC to be reversed on non-business transactions exempt supplies - under declaration of ineligible ITC - ITC claimed from cancelled dealers, return defaulters tax non payers - HELD THAT:- The observation in the impugned order dated 26.12.2023 is not sustainable for the reasons that the reply dated 18.12.2023 filed by the Petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is incomplete, not duly supported by adequate documents, not clear and unsatisfactory, which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. Further, if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish further documents/details - the impugned order dated 26.12.2023 cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 26.12.2023 is set aside and the matter is remitted to the Proper Officer for re-adjudication. Petition disposed off by way of remand. 2024 (4) TMI 526 Quantification of pre-deposit of 20% before filing an appeal - Disputed tax amount includes demand of interest or not - Direction to deposit 20% of the disputed remaining unpaid interest within a time frame - HELD THAT:- In the case on hand the provision for filing an appeal before the tribunal does not contemplate payment of 20% of the disputed interest and it is specific in stating that no appeal shall be filed under sub-section (1) of Section 112 unless the appellant has paid a sum equal to 20% of the remaining amount of tax in dispute - there is a clear distinction drawn in the said provision restricting the pre-deposit amount to a sum equal to 20% of the remaining amount of tax in dispute. The discretion which the court can exercise has to be in terms of the provision of the statute more particularly when the appellants had filed the writ petition on account of the fact that the appellate tribunal is yet to be constituted under the Act - the legislative intent as amplified in Section 112(8)(b) of the Act clearly restricts the pre-deposit amount to 20% of the remaining amount of tax in dispute and does not speak of interest. The discretion to be exercised by the court should be in terms of the statute and, therefore, the said condition imposed by the learned Single Bench calls for interference - the portion of the order passed by the learned Single Bench directing the petitioners to pay 20% of the remaining interest is set aside and the respondents are directed not to initiate any recovery proceedings till the writ petition is heard and disposed of. Appeal allowed. 2024 (4) TMI 525 Maintainability of appeal - time limitation - initiation of the proceedings of penalty against the petitioner - HELD THAT:- In the present case, the appeal under Section 107 of the Act was not admitted being barred by limitation. Under these circumstances, the petitioner has approached this Court on the ground that the very initiation of the proceedings of penalty against the petitioner was void ab initio , and accordingly, the said proceedings should be quashed and set aside - it is clear that the penalty could not have been imposed during the particular period with regard to the technical defects as indicated in the detention order. The detention order and the impugned penalty order are required to be quashed and set-aside - Petition allowed. 2024 (4) TMI 524 Violation of principles of natural justice - opportunity of hearing not provided before issuance of SCN - Reversal of ITC - HELD THAT:- The impugned order was issued without hearing the petitioner and without considering the contentions advanced before this Court by learned counsel for the petitioner. Solely with a view to provide another opportunity to the petitioner to canvass these contentions before the original authority, the order impugned herein calls for interference. The impugned order dated 22.12.2023 is set aside and the matter is remanded to the original authority for re-consideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of a copy of this order. Petition disposed off by way of remand. 2024 (4) TMI 523 Violation of principles of natural justice - ex-parte demand - excess claim of Input Tax Credit (ITC) - HELD THAT:- Perusal of the order shows that the order has been passed disposing of the Show Cause Notice solely on the ground that no reply/explanation has been received from the tax payer. Petitioner has also annexed the medical record of the husband of the petitioner which shows that he was admitted in the hospital on 04.11.2023 and thereafter expired on 20.12.2023 after a prolonged illness. The petitioner was prevented from filing a response to the Show Cause Notice on account of serious illness of her husband. Accordingly, petitioner is liable to be granted an opportunity to respond to the Show Cause Notice. The impugned order dated 30.12.2023 which had been passed solely on account that petitioner had not filed a reply is set aside and the matter is remitted to the Proper Officer to re- adjudicate the same in accordance with law - Petition allowed by way of remand. 2024 (4) TMI 522 Violation of principles of natural justice - impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - excess claim of Input Tax Credit (ITC) - under declaration of ineligible ITC - ITC claimed from cancelled dealers - return defaulters and tax non payers - HELD THAT:- The observation in the impugned order dated 31.12.2023 is not sustainable for the reasons that the reply dated 26.10.2023 filed by the Petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is unsatisfactory, which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner - Further, if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish further documents/details. The impugned order dated 31.12.2023 cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 31.12.2023 is set aside and the matter is remitted to the Proper Officer for re-adjudication - petition disposed off by way of remand. 2024 (4) TMI 521 Violation of principles of natural justice - reasons for cancellation not given in SCN - Retrospective cancellation of GST registration of the petitioner - HELD THAT:- SCN and the impugned order are bereft of any details. Accordingly, the same cannot be sustained and neither the Show Cause Notice, nor the order spell out the reasons for retrospective cancellation. In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant. It is clear that both the petitioner and the respondent want the GST registration to be cancelled, though for different reasons. Petitioner does not seek to carry on business or continue the registration, the impugned order dated is modified to the limited extent that registration shall now be treated as cancelled with effect from 17.10.2020 i.e., the date when the petitioner filed an application seeking cancellation of GST registration. Petitioner shall make the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017. Petition disposed off. 2024 (4) TMI 520 Retrospective cancellation of GST Registration of the petitioner - notice does not specify any cogent reasons - petitioner had no opportunity to even object to the retrospective cancellation of the registration - violation of principles of natural justice - HELD THAT:- The SCN and the impugned order are also bereft of any details accordingly the same cannot be sustained and neither the Show Cause Notice, nor the order spell out the reasons for retrospective cancellation. In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer s registration is required to be cancelled with retrospective date also covering the period when the returns were filed, and the taxpayer was compliant. Petitioner does not seek to carry on business or continue the registration, the impugned order dated is 21.02.2020 modified to the limited extent that registration shall now be treated as cancelled with effect from 07.01.2020. i.e., the date when Show Cause Notice was issued. Petitioner shall make the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017. Petition disposed off. 2024 (4) TMI 519 Maintainability of petition - statutory remedy of appeal under Section 107 of the The Central Goods and Services Tax Act, 2017 - HELD THAT:- The matter involves interpretation of a judgement rendered by Hon ble the Apex Court in the case of C.C., C.E. S.T.-Bangalore vs. Northern Operating Systems Pvt Ltd. [ 2022 (5) TMI 967 - SUPREME COURT] . It is for this reason that several other High Courts have also entertained the writ petitions both on inception of proceeding or even after an assessment order passed by the assessing authority. The matter requires consideration on the nature of the agreement of employment and the application of law in the judgement rendered by Hon ble the Apex Court in C.C., C.E. S.T.-Bangalore vs. Northern Operating Systems Pvt Ltd therefore, the preliminary objection for that limited purpose is overruled. Let a counter affidavit be filed within three weeks to which rejoinder affidavit, if any, may be filed within one week thereafter. - List after expiry of the aforesaid period. 2024 (4) TMI 518 Violation of principles of natural justice - opportunity of personal hearing was not afforded to the petitioner which is a mandatory requirement under Section 75(4) of the Uttar Pradesh Goods and Services Tax, Act, 2017 - HELD THAT:- This Court in M/s Shree Sai Palace v. State of U.P. and Another [ 2024 (3) TMI 49 - ALLAHABAD HIGH COURT] , relying on two judgments of coordinate Bench of this Court in Bharat Mint and Allied Chemicals v. Commissioner Commercial Tax and Others [ 2022 (3) TMI 492 - ALLAHABAD HIGH COURT] and M/s Primeone Work Force Pvt. Ltd. v. Union of India, [ 2024 (1) TMI 625 - ALLAHABAD HIGH COURT] , in similar facts and circumstances has held that no orders can be allowed to pass through the legislative barriers of natural justice erected to safeguard individual rights and prevent abuse of power and that the opportunity of hearing is required to be afforded to the petitioner before passing orders. Let there be a writ of certiorari issued against the order dated July 12, 2023 and the order dated August 18, 2022. These orders are quashed and set aside. Consequential relief to follow. The respondent No. 3 is directed to grant an opportunity of personal hearing to the petitioner and thereafter pass a reasoned order in accordance with the law within a period of six weeks from date. The writ petition is allowed. 2024 (4) TMI 517 Cancellation of the registration of petitioner - cancellation on the ground that the petitioner does not intend to carry on the business under the said GST number - HELD THAT:- The proceedings under DRC-01 are independent of the proceedings for cancellation of GST Registration and can continue despite cancellation of GST registration. The recovery of any amount found due can always be made irrespective of the status of the registration. Thus, merely pendency of the DRC-01 cannot be a ground to decline the request of the tax-payer for cancellation of the GST Registration. The GST Registration of the Petitioner shall be treated to be cancelled with effect from 01.02.2024 i.e., the date from which Petitioner seeks cancellation of GST registration. Petitioner shall make all the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017 and it would be without prejudice to the proceedings initiated by the Respondents by issuance of DRC-01 for the financial year 2018-19 to financial year 2023-24 and the defence of the Petitioner thereto. Petition disposed off. 2024 (4) TMI 516 Refund of service tax on Ocean Freight - Precedents - Validity of order of CESTAT for non-following the decision of Non-Jurisdictional High Court, in regard to constitutionality of a provision or not - impugned order passed at the stage when the issue was pending before the Hon ble Supreme Court - SC has subsequently passed an order setting aside the said decision of the Gujarat High Court - HELD THAT:- The impugned order has been passed at the stage when the issue was pending before the Hon ble Supreme Court against the decision of the Gujarat High Court in MOHIT MINERALS PVT LTD VERSUS UNION OF INDIA 1 OTHER [ 2020 (1) TMI 974 - GUJARAT HIGH COURT] . The Hon ble Supreme Court has subsequently passed an order setting aside the said decision of the Gujarat High Court, on UNION OF INDIA ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR [ 2022 (5) TMI 968 - SUPREME COURT] . The Hon ble Supreme Court has held The IGST Act and the CGST Act define reverse charge and prescribe the entity that is to be taxed for these purposes. The specification of the recipient in this case the importer by Notification 10/2017 is only clarificatory. The Government by notification did not specify a taxable person different from the recipient prescribed in section 5 (3) of the IGST Act for the purposes of reverse charge. The impugned order was decided without relying on the decision in the case of Mohit Minerals as the jurisdictional High Court of Madras has not struck down the provisions of levy and collection of service tax on Ocean freight as ultra vires and in the Writ Petition filed by the appellant the Hon ble High Court of Madras has not granted any stay. Moreover, the Hon ble Apex Court has admitted an appeal filed by the department against the judgment of the Hon ble High Court of Gujarat in the case of M/s. Mohit Minerals P Ltd. The impugned Order-in-Appeal passed by the first respondent is set aside. The respondents are directed to process the claim of the petitioner for refund together with applicable interest under the provisions of the IGST Act, 2017, within a period of 3 months from the date of receipt of a copy of this order. The writ petition is allowed. 2024 (4) TMI 515 Carry forward of excess payment of tax as ITC for next year - Allegation of availment of excess input tax credit - Violation of principles of natural justice - personal opportunity of hearing not granted - cryptic non-speaking order - HELD THAT:- The net tax payable on the previous year has been shown both for the State GST as well as Central GST in minus, that means, if it is zero balance nothing to be returned, if it is in minus, the tax excessively paid previously has to be returned back, therefore, the said excess payment of more than Rs. 1,36,563/- have been made as a carry forward by way of ITC in the next year starting from 1st July, 2017, therefore, such a claim made by the dealer has to be considered as to whether the previous year excess tax had been by her, for which, she is entitled to get for such a credit, without going into that aspect, since the revenue has passed a cryptic order making such a demand from the dealer when it was challenged before this Court, the learned Judge also has accepted the said version of the revenue side, which in our considered view, may be erroneous. Thus, it is held that the order impugned passed by the learned Judge is liable to be interfered with - the impugned order is set aside - matter is remitted back to the respondent revenue for reconsideration, where an opportunity of being heard to be given to the appellant dealer and who can putforth her case, based on which a final decision can be taken by the revenue - appeal allowed by way of remand. 2024 (4) TMI 514 Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand - validity of assessment order - present writ petition was filed after a bank attachment notice was issued - HELD THAT:- The documents on record include the notice in Form ASMT 10, the intimation and the show cause notice. As a registered person under applicable GST enactments, the explanation of the petitioner that he was unaware of proceedings is not convincing. However, on perusal of the impugned order, it appears that the tax demand pertains to discrepancy between the petitioner s GSTR 3B returns and the auto populated GSTR 2A. It is just and appropriate that the petitioner be provided an opportunity to explain the discrepancy after putting the petitioner on terms. The impugned order dated 25.10.2023 is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. Within the same period, the petitioner is permitted to submit a reply to the show cause notice dated 07.08.2023. Upon receipt of the petitioner s reply and upon being satisfied that 10% of the disputed tax demand was received, the first respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of the petitioner s reply. As a consequence of the impugned assessment order being set aside, the bank attachment is raised. The petition is disposed off. 2024 (4) TMI 513 Breach of principles of natural justice - complete non-application of mind - opportunity of hearing not granted - HELD THAT:- On perusal of the impugned order, it appears that the tax demand pertains to discrepancy between the GSTR 3B and GSTR 1 returns. The tax demand was confirmed without hearing the petitioner. The petitioner cannot, however, be absolved of responsibility inasmuch as the petitioner should have monitored the GST portal continually. Solely with a view to provide the petitioner an opportunity of hearing, the impugned order is quashed and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice within the aforesaid period. Upon receipt of such reply and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of the petitioner s reply. Petition disposed off. 2024 (4) TMI 512 Condonation of delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. The writ petition is disposed off. 2024 (4) TMI 511 Condonation of delay in filing returns - due to ill-health, returns could not be filed within the time prescribed by the second respondent - notice issued and best judgement assessment made - HELD THAT:- The petitioner has failed to file the monthly returns in GSTR 3B for the month of July 2023 in time. Therefore, notice was issued under Section 46 of the GST Act, 2017 and best judgment assessment was made. The petitioner has paid the tax on the 31st day from the date of the best judgment assessment order. However, the respondents have insisted the petitioner to pay the demand as per the order passed by the second respondent under best Judgment assessment and demanded the tax. According to the petitioner, as per Section 62(2) of the GST Act, 2017 the time to file the returns has been extended to 60 days and the amendment was given effect from 01.10.2023. This writ petition is allowed with a direction to the petitioner to file an application to condone the delay in filing the returns within 15 days from the date of receipt of a copy of this order. On such filing of an application by the petitioner, the respondents are directed to consider the said application and pass orders by taking into consideration of the reasons provided by the petitioner for non-filing of returns within a period of 30 days from the service of best judgement assessment order and thereafter, permit the petitioner to file the revised returns. 2024 (4) TMI 510 Validity of assessment order of GST demand - Violation of principles of natural justice - opportunity of hearing was not provided to petitioner - no finished goods found in the petitioner s Factory on inspection - Admittedly, notice in Form DRC-01 was issued after conducting an inspection based on the advertisement made by the petitioner in the Indiamart.com. The respondent has not identified any finished goods in the petitioner s premises as claimed by them. HELD THAT:- Considering the fact that the officer, who is present before this Court has confirmed that the personal hearing has not been provided to the petitioner after the notice in Form DRC-01, dated 29.09.2023 and taking into consideration of the fact that the reply of the petitioner Company, dated 10.10.2023 was not considered by the respondent and also in view of the order passed by this Court as stated supra that the respondent ought to have provided an opportunity to the petitioner, in the event of passing any adverse order and also in the absence of any finished goods identified in the petitioner s premises, the orders impugned in these writ petitions are hereby set aside. The issue is remanded back to the respondent for fresh consideration. Petition allowed by way of remand. 2024 (4) TMI 509 Attachment order - SCN was not uploaded on the portal - SCN that was mandatory to be issued before any penalty may have been imposed, remained to be uploaded by way of attachment - inadvertent error - principles of natural justice - HELD THAT:- Owing to such inadvertent error, the right of the petitioner to object to the notice and his right to hearing was completely compromised. Unless the notice had been served on the petitioner with all its contents and annexures, if any, the petitioner may never have availed his opportunity to effectively object to the notice and participate in the personal hearing - It is beyond doubt that the petitioner had a perfect right to object to the show cause notice and he had a near perfect right to personal hearing. Perusal of the print out of the dashboard display clearly indicates that the respondent authority also did not seek to deny such right to the petitioner. Occasioned by the inadvertence, noted above, those rights came to be denied to the petitioner - no useful purpose may ever be served in keeping such a petition pending or calling for counter affidavit at this stage. Petition disposed off. 2024 (4) TMI 508 Rejection of appeal as being time barred - Refusal to grant any interim order to the pending writ petition - assessee was not provided any opportunity - violation of principles of natural justice - HELD THAT:- The learned Government counsel appearing for the respondent State submitted that though opportunity was granted by the assessing officer, the appellant did not avail the same. The matter can be remanded back to the Assistant Commissioner, N.S. Road M.R. Charge to consider the case afresh after affording an opportunity to the appellant/writ petitioner - Appeal disposed off by way of remand. Income Tax 2024 (4) TMI 530 Rejection of DTVsV application - Scope of the DTVSV scheme - Requirement to settle all or part of the pending appeals - revenue has rejected the Forms filed by the petitioner/assessee on the ground that the petitioner/assessee sought to settle only one of the matters pending adjudication - Can an applicant, under the VSV Act, choose to settle one or more of the appeals, while continuing to contest others? HELD THAT:- As decided in MUFG Bank Ltd [ 2022 (11) TMI 1304 - DELHI HIGH COURT ] after examining the provisions of the VSV Act, has, inter alia, concluded that an assessee has the leeway to settle any one appeal under the VSV Act and is not required to settle all the pending appeals filed by the respondents/revenue. The coordinate Bench has categorically held that the unit of settlement under the VSV Act is not an assessment year but any appeal, writ petition or an SLP . In this regard, the coordinate bench has referred, inter alia, to the provisions of Section 2(1)(j) read with Section 2(1)(a) of the VSV Act. Thus revenue, cannot but accept that the issue raised in the present petition is covered by the decision of the coordinate Bench. Accordingly, the writ petition is allowed. The order rejecting the subject Forms and the communication are set aside. 2024 (4) TMI 529 Bogus LTCG - Addition u/s 68 - Exemption u/s 10(38) denied - price manipulation or in providing entry of penny stock - HELD THAT:- We find that in the case of Himani M. Vakil [ 2012 (9) TMI 1099 - GUJARAT HIGH COURT] held that where assessee duly proved genuineness of sale transaction by bringing on record contract notes of sale and purchase, bank statement of broker and demat account showing transfer in and out of shares, Assessing Officer was not justified in bringing to tax capital gain arising from sale of shares as unexplained cash credit. Hon ble jurisdictional High Court in the case of Parasben Kasturchand Kochar [ 2020 (2) TMI 1344 - ITAT AHMEDABAD] also held that when assessee discharged his onus by establishing that transactions were fair and transparent and all relevant details with regard to transfer furnished by Income Tax Authority and the Tribunal have also took the notice of fact that the shares remained in the account of assessee, the assessee also furnished demat account and details of bank transaction about the sale and purchase of shares, the addition was deleted. As in the case of PCIT Vs. Indravadan Jain, HUF [ 2023 (7) TMI 1091 - BOMBAY HIGH COURT] also held that when AO nowhere alleged that transactions made by assessee with a particular broker or share broker was bogus, merely because investigation was done by SEBI against the broker or its activities, the assessee cannot be said to have entered into ingenuine transaction. We find that assessee made sale of shares through BSE and paid security transaction tax and there is no allegation against the share broker through whom assessee has made sales that they were indulging any price manipulation. Therefore, we do not find any justification in treating the LTCG as unexplained cash credit in absence of any cogent evidence. So far as reliance in case of case of PCIT vs. Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT] we find We find in the case of Himani M. Vakil [ 2012 (9) TMI 1099 - GUJARAT HIGH COURT] held that when the assessee proved genuineness of sale transaction by bringing on record contract notes of sale and purchase, bank statement of broker and demat account showing transfer in and out of shares, Assessing Officer was not justified in bringing to tax capital gain arising from sale of shares as unexplained cash credit. Thus, the decision of jurisdictional high Court is binding precedent in the territory of Gujarat. In the result, the addition of undisclosed income under section 68 is deleted. In the result, the ground of appeal raised by the assessee is allowed. 2024 (4) TMI 507 Delay in filling appeal before SC - Claim of long-term capital gains on shares in terms of Section 10(38) - Assessee not claiming exemption u/s 10(38) at the stage of the assessment proceedings but turned around and make such claim of wanting to cross-examine persons - Denial of principles of natural justice - denial of an opportunity to cross examine the entry providers - As decided by HC [ 2023 (2) TMI 392 - ORISSA HIGH COURT] ITAT was justified in accepting the plea of the Assessee that the failure to adhere the principles of natural justice went to the root of the matter. Also, the CBDT circular that permitted to the Assessee to file revised returns if he omitted to make a claim was also not noticed by the AO.ITAT committed no error in concurring with the view of the CIT(A) and in dismissing the Revenue s appeals HELD THAT:- There is gross delay of 309 days in filing this special leave petition. The explanation offered is not sufficient in law to condone the delay. Hence, the application seeking condonation of delay is dismissed. Consequently, the special leave petition is also dismissed keeping open the question of law, if any. In doing so, we have also followed the earlier order of this Court passed in Dipansu Mohapatra in [ 2024 (3) TMI 217 - SC ORDER] 2024 (4) TMI 506 TP Adjustment - comparable selection - non-availability of segmental data - HELD THAT:- In view of the order passed by this Court in Microsoft India (R and D) Pvt Ltd [ 2023 (7) TMI 935 - SC ORDER] the Special Leave Petition is dismissed wherein held in the absence of segmental information provided by the companies in respect of the software services, comparables be deselected. 2024 (4) TMI 505 Nature of expenditure - Commission paid to the Managing Director - Tribunal held that the expenditure incurred can be treated as Revenue expenditure and not as capital expenditure - as decided by HC [ 2022 (9) TMI 1576 - MADRAS HIGH COURT] methodology adopted by the Revenue is perfectly correct for the simple reason that it is not disputed that the amount has been shown as expenditure and that the payment has been made to the Managing Director and the amount has been received by the beneficiary only for the subsequent Assessment Year, which does not mean that as long as the Appellant has not shown the payment in the Books of Accounts in respect of liability, it cannot be stated that the expenditure was incurred during 2004-2005 as such expenditure would be ratified only after Board s meeting. HELD THAT:- Having heard the learned counsel for the parties, the instant Special Leave Petition is permitted to be withdrawn in view of the statement in the counter affidavit that the petitioner can avail the benefit for the Assessment Year 2005-2006. With these observations, Special Leave Petition is disposed of as withdrawn. 2024 (4) TMI 504 Nature of receipts - subsidies - revenue or capital receipts - Whether Tribunal erred by not considering that subsides which may be used freely, are operational subsidies and not capital subsides and thus the same are taxable as revenue income? - HC [ 2024 (1) TMI 972 - CALCUTTA HIGH COURT] decided issue in favour of the revenue and against the assessee HELD THAT:- As petitioner Birla Corporation Limited submits that the issue regarding exemption granted under the Uttar Pradesh Trade Tax, 1948, and the effect thereof is pending consideration before this Court in [ 2018 (8) TMI 2138 - SC ORDER] titled Tata Steel BSL Limited v. Commissioner of Income Tax Delhi . Issue notice on the present special leave petition as well as on the application for stay, returnable in the week commencing 29.07.2024. Notice will be served by all modes, including dasti. Liberty is granted to the petitioner Birla Corporation Limited to approach this Court in case any urgent order is required. Registry to tag all connected/similar matters. 2024 (4) TMI 503 Exemption u/s 11 - denial of claim as Assessee-Trust had not furnished proper information to the Charity Commissioner and there was shortfall in making provision of Indigent Patients Fund ( IPF ) with huge generation of surplus as running a canteen in the hospital with profit motive and was not providing free meals - CIT(A) followed the orders of his predecessor for Assessment Years 2008-2009 and 2009-2010 and decided the issue in favour of Assessee which was upheld by ITAT and HC - HELD THAT:- Delay condoned. No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is, accordingly, dismissed. Pending application also stands disposed of. 2024 (4) TMI 502 Demand raised during the pendency of appeal before this court - denial of Exemption u/s 13A to Political party registered as such under Section 29A of the Representation of People Act, 1951 - whether Assessee INC is a political party registered under the RP Act and satisfies the description of a political party for the purpose of Section 13A of the Income Tax Act, 1961? - HC [ 2016 (3) TMI 879 - DELHI HIGH COURT ] held that ITAT was correct in law in holding that the audited accounts filed by the INC before the CIT (A) could not be accepted as evidence since they were not audited till the assessment was framed and, therefore, the INC was not entitled to exemption u/s 13A of the Act and denying exemption to the INC u/s 13A of the Act and refusing to condone the delay that had occurred in the audit of some of the state units as INC failed to fulfil the three conditions envisaged under clauses (a), (b) and (c) of Section 13A of the Act. HELD THAT:- In view of the submission by way of a concession made by the respondent, no coercive action of any nature shall be taken against the appellant(s) till the next date of hearing. The aforesaid concession made by the learned Solicitor General on behalf of the respondent/Department is without prejudice to all rights and contentions that it may have as against the appellant(s) herein and vice versa. Hence, list these appeals including this application on 24.07.2024. 2024 (4) TMI 501 Settlement applications u/s 245C (1) - statutory requirement of full and true disclosure under Section 245C of the Income Tax Act, 1961, pre-conditions associated with an application under Chapter XIX-A of the Act and effect of violation of the said pre-conditions on the jurisdiction of the Income Tax Settlement Commission [ ITSC ] as well as the fate of the application - ITSC accepted the Revenue s contention that unaccounted money was introduced as bogus share capital by the respondent-assessee group and thus, it proceeded to make the aforesaid addition. Whether the ITSC was justified in considering the application filed u/s 245C of the Act despite recognizing the absence of a full and true disclosure of income? HELD THAT:- ITSC to arrive at an unequivocal finding of full and true disclosure in the application. If the ITSC is not satisfied as to the full and true disclosure of the income in the application, it shall refrain from advancing with it, thereby, lacking jurisdiction to issue any orders pertaining to the subject matter outlined in the application. Additionally, in the case of Om Prakash Mittal [ 2005 (2) TMI 16 - SUPREME COURT] the Hon ble Supreme Court has held that the essential condition to proceed with the settlement through an application u/s 245C of the Act is the necessity for a complete and honest disclosure of income, including the method by which it was obtained. Following an enquiry into the authenticity of this disclosure, the ITSC may decide to either approve or dismiss the application. As in the present case ITSC in its order has succintly noted that the respondent-assessee group failed to provide a convincing explanation regarding repurchase of the share capital. It observed that the evidence submitted by the respondent-assessee group regarding the purported investors lacked credibility, as the shares of the companies had already been repurchased at an extremely unreasonable price. It further noted that the transaction involving the repurchase of shares having a face value of INR 10/-, at a nominal value of 10 paise per paid-up share, cannot be deemed to be authentic. Later, the respondent-assessee group voluntarily agreed to relinquish the amount in question, i.e., the value of the shares repurchased at an unreasonably low price, which was under scrutiny. Further, addressing the respondent-assessee group s contention regarding the revision of the application, we are of the opinion that the statutory framework of Chapter XIX-A of the Act does not allow for any revision or amendment of an application under Section 245C of the Act, as this would essentially entail submitting a new application in the same case while withdrawing the previous one. Such a process would afford the respondent-assessee group an opportunity to retract their initial submission and make a fresh one. Therefore, permitting the revision of the application would indirectly provide the respondent-assessee group a chance to accomplish something that they could not achieve directly. It would also severely affect the importance of the requirement of full and true disclosure at the first instance. The very foundation of a settlement proceeding lies at the bedrock of good faith and therefore, revision or amendment, which has the effect of concealing a misrepresentation made in the application, would be impermissible and de hors the scheme of Chapter XIX-A under the Act. In the case of CIT v. ITSC [ 2013 (7) TMI 95 - DELHI HIGH COURT] this Court, while relying upon the decision of the Hon ble Supreme Court in the case of Ajmera Housing Corporation [ 2010 (8) TMI 35 - SUPREME COURT] concluded that revising a disclosure made in a settlement application would clearly indicate that the original disclosure was neither truthful nor comprehensive.Thus ITSC ought not to have proceeded with passing of the order as the respondent-assessee had failed to make a true and full disclosure before the ITSC. Granting immunity from penalty and prosecution u/s 245H - The grant of such immunity is subject to conditions that the ITSC may deem appropriate to impose. A prerequisite for granting immunity is that the applicant must have cooperated in the proceedings before the ITSC and made a full and true disclosure of its income and the manner in which such income has been derived. Taking into account all above, it is imperative to highlight that the legal framework concerning applications u/s 245C (1) of the Act fundamentally requires a full and true disclosure of additional income. It must be noted that the procedure prescribed under Chapter XIX-A of the Act is a marked departure from the general procedure involving assessment by the AO and consequent action under the law. As briefly observed in the initial part of this judgment, this departure is meant to provide an opportunity for the assessee to come clean regarding the income and tax payable thereon. However, the relief envisaged in Chapter XIX-A of the Act is wide in nature and apart from settlement and quantification of payable tax, it also protects the assessee from prosecution and penalties, if so ordered by the ITSC. At the root of this incentive, lies a commitment of the assessee to make a full, true and honest disclosure of the income, source of income and additional tax payable thereon. Once it is seen that the disclosure was not full and truthful, the ITSC loses its jurisdiction to entertain such an application as well as to provide any immunity to the applicant from prosecution and penalties. Hence, in the present case, the ITSC has erred in law by approving the application of the respondent-assessee group under Section 245C of the Act. The ITSC further went on to grant immunity from the penalty and prosecution under Section 245H of the Act, which was contrary to the twin conditions stipulated herein above. Thus, the ITSC acted in excess of the jurisdiction conferred upon it under the Act. WP allowed. 2024 (4) TMI 500 Condonation of delay in filing the revised return of income claiming refund - application filed u/s 119(2)(b) rejected - genuine hardship of the petitioner rejected - HELD THAT:- On perusal of the provisions contained in Section 119(2)(b) of the Income Tax Act read with circular no.09/2015 dated 09.06.2015 issued by CBDT, it appears that genuine hardship which the petitioner is required to establish is the hardship that would be caused to the petitioner if the delay is not condoned or the time limit is not extended. The petitioner has clearly stated in its application filed u/s 19(2)(b) of the I.T. Act under Annexure-11 that at the time of filing of its return of income for assessment year 2021-22, it has inadvertently erred in claiming the past years deficit against the current year s income under Section 11(1) as application of income and instead offered the total income as income chargeable to tax. Had the past deficit been claimed as application of income, the petitioner would have entitled to a refund The time limit for filing revised return under Section 139(5) of the I.T. Act for the assessment year 2021-22 was 31.12.2022. The petitioner, after receipt of the intimation order under Section 143(1) of the I.T. Act for the assessment year 2021-22, initially filed an application under Section 154 of the I.T. Act before the Assessing Officer-opposite party no.2 for rectification on account of mistake of the total income being chargeable to tax without setting off the past deficit, which is apparent from the record. But the Assessing Officer-opposite party no.2, vide order rejected the said application. The petitioner assailed the intimation order under Section 143(1) of the I.T. Act as well as the order passed under Section 154 of the I.T. Act before the First Appellate Authority under Section 250 of the I.T. Act, which was dismissed, with an observation that the petitioner has the remedy of making application under Section 119(2)(b) of the I.T. Act. Thereby, finding no other alternative, the petitioner approached opposite party no.1 by filing an application under Section 119(2)(b) of the I.T. Act. But opposite party no.1, without taking into consideration genuine hardship of the petitioner, mechanically rejected the said application, vide impugned order which cannot be sustained in the eye of law. In view of the provisions contained in Section 119(2)(b) of the I.T. Act read with circular dated 09.06.2015 issued by CBDT, which stipulates that application for claim of refund/loss is to be made within six years from the end of the assessment year for which such application/claim is made. The last date for filing of revised return for the assessment year 2021-22 was 31.12.2022 and the petitioner made application under Section 119(2)(b) on 16.10.2023 for condonation of delay in filing revised return. Thereby, the application filed by the petitioner is well within six years time limit, as stipulated in the circular. When the petitioner filed application indicating its genuine hardship , opposite party no. 1 could have considered the same in proper perspective, but, without doing so, it rejected such application vide impugned order which cannot be sustained in the eye of law. This Court is of the considered view that the order passed by opposite party no.1 in rejecting the application filed by the petitioner u/s 119(2)(b) of the I.T. Act for condonation of delay in filing the revised return for the assessment year 2021-22 cannot be sustained in the eye of law. Therefore, the said order is liable to be quashed and is hereby quashed. Accordingly, this Court directs the authority concerned to take follow up action in accordance with law. WP allowed. 2024 (4) TMI 499 Regular Approval u/s 80G(5) - application for approval denied as even within the extended time, the petitioner did not file Form No.10AB and applied belatedly - hardship faced by the trusts in digital filing of the respective forms - genuine hardship faced by new v/s old/existing trust - petitioner was granted provisional approval on 06.10.2021 and petitioner commenced its activities from 09.09.2021 and therefore, had to apply for regular approval/registration in Form No.10AB within six months from the date of commencement i.e., within six months from 09.09.2021, by it applied only on 22.03.2023 Whether or not the classification made by the respondents in the matter of grant of extension of time between the existing and new trusts and to apply for approval in respect of clause (i) of the first proviso to subsection (5) of section 80G of the Act is reasonable? HELD THAT:- Petitioner trusts do not have any vested right to claim an extension of time. When the statute prescribes a time limit, the petitioner trusts are expected to apply within the said date to avail the benefits. The first respondent Board issues circulars enlarging the time limit even beyond the prescribed limit to mitigate the rigours of the statute and the hardship faced by the assessees. The same is in exercise of its powers under Section 119(2)(b) of the Act . No discrimination or differentiation was made between the existing trusts and the new trusts at the first instance when Circular No.8 of 2022 was issued. When the impugned Circular No.6 of 2023 was issued, the reason stated by the first respondent was to mitigate genuine hardship Thus, on a combined reading of the earlier Circular No.8 of 2022 and the impugned Circular No.6 of 2023, it can be clear that the only reason which is shown for the exercise of the powers is that these trusts faced hardship since they could not apply on time. No reason whatsoever is mentioned to omit the clause (i) of the first proviso to sub-section (5) of Section 80G of the Act in respect of the new trusts applying under Form No.10AB alone. Except for reiterating that the petitioner trusts do not have any vested right, there is no other ground that is put forth by the first respondent. Even though the new trusts as well as the existing trusts have no right to demand for extension of time as a matter of right, when the respondents have thought it fit to extend the time, considering the hardship, there is no material which is placed before this Court nor any reasoning is contained in the impugned order that the new trusts did not face the hardship in respect of filing of the application under Section 80G5 of the Act alone. Therefore, leaving out the clause in respect of Section 80G5 of the Act alone that too only in respect of the new trusts does not in any manner relate to the object sought to be achieved by the impugned circular nor does it provide any basis for the discrimination/classification. In the instant case, the differential treatment is not based on any substantial distinction that is real and pertinent to the object of the circular. The discrimination is artificial. The respondents are evasive and could not provide any rationale for such a classification. Accordingly, we hold that the impugned clause (ii) of the Circular, dated 24.05.2023 is arbitrary and violative of Article 14 of the Constitution of India and accordingly, would be ultra vires the Constitution. Because we find that clause (ii) of the impugned circular is unconstitutional, we direct the first respondent to consider the applications of the petitioners as to the recognition/approval in respect of clause (i) of the first proviso to sub-section (5) of section 80G of the Act as within time and consider the same and pass orders thereon on merits as per law. Writ Petitions are allowed on the following terms:- (i) The clause 5(ii) of Circular No.6 of 2023 bearing F.No.370133/06/2023-TPL, dated 24.05.2023 of the first respondent is declared as illegitimate, arbitrary, and ultra vires the Constitution of India; (ii) The respondents are directed to consider the applications submitted by the petitioners as to the recognition/approval in respect of clause (i) of the first proviso to sub-section (5) of section 80G of the Act as within time and consider the same and pass orders thereon on merits, in accordance with law within six months from the date of receipt of a copy of this order. 2024 (4) TMI 498 Validity of revision u/s 263 against order u/s 143(3) r/w section 153A - authority of PCIT (Central), Bhopal challenged on the ground that the assessment order was passed u/s 143(3) r/w section 153A upon taking prior approval from the Assistant Commissioner, Income Tax (Central) 1, Indore under Section 153D of the Act - ITAT held that the order passed by the PCIT is unsustainable due to lack of jurisdiction in invoking Section 263 - In this appeal, the tax effect is below than Rs. 1,00,00,000/-. HELD THAT:- As decided in Ramamoorthy Vasudevan [ 2018 (11) TMI 1874 - ITAT PUNE] once the order under Section 143(3) r/w section 153A of the Act has been passed after taking prior approval of the ACIT under Section 153D of the Act, then the jurisdiction under Section 263 of the Act cannot be invoked. Therefore, the view taken by the Co-ordinate Bench of the Appellate Tribunal had attained finality. Hence, the ITAT, Indore has not committed any error of law by following the same view. For passing any order under Sections 143(3) 153A of the Act, prior approval of Joint Commissioner is required under Section 153A of the Act, or Principal Commissioner or Commissioner as the case may be. Therefore, once prior approval had already been taken by the Assessing Officer and accepted the return submitted by the assessee, then the same authority cannot exercise the power under Section 263 of the Act to reverse the order of AO. Even otherwise, the total tax effect of this appeal is less than Rs. 1,00,00,000/-, therefore, we do not find any ground to interfere with the order passed by the Income Tax Appellate Tribunal, Indore. Decided against revenue. 2024 (4) TMI 497 Validity of Show Cause Notice and the consequential order of assessment as it suffers from the vice of pre-determination - SCN says as noticed from the database of the department there exist an amount of Rs. 4,22,83,715 and sale of equity share is Rs. 37,000/- since there is no explanation offered why the same should not treated unexplained investment for the relevant period under consideration and taxed accordingly. HELD THAT:- Though titled as Show Cause Notice the submission of the learned counsel for the petitioner that it is really not in the realm of show cause notice but one where it suffers from the vice of pre-determination has merit. Any order which suffers from the vice of pre-determination is arbitrary and would thereby fall foul of Article 14 of the Constitution of India. In this regard, it may be relevant to rely on the judgment in the case of Siemens Ltd v. State of Maharashtra and others [ 2006 (12) TMI 203 - SUPREME COURT] wherein, it was held that whenever there is a demand, the same may no longer be in the realm of notice and would suffer from the vice of pre-determination. Further, the show cause notice does not even indicate the time limit within which the assessee / petitioner is required to respond to the same. The show cause notice is bad the order of assessment thus stands vitiated. Considering the submissions of both sides and the facts of the case, this Court is inclined to set aside the impugned order. The petitioner shall submit its objection within a period of 8 weeks from the date of receipt of a copy of this order by treating the assessment order as show cause notice. The Respondent shall thereafter proceed to complete the assessment in accordance with law. 2024 (4) TMI 496 Unexplained cash credit u/s 68 - onus to prove source of cash - Addition made on account of cash deposit made in the bank account - HELD THAT:- AO had only doubted the business model of the assessee and had resorted to make addition towards cash deposits as not properly explained by the assessee with sources. Hence arithmetically, the assessee is bound to explain the sources of cash deposits in the bank account. The ld. AR before us placed on record the extract of the cash book already forming part of the records and submitted the availability of cash balance in tabular form The entire cash deposits made in the bank account stood properly explained. We have also gone through the cash book for the whole year which are already forming part of the records and there is absolutely no negative cash balance on any given day in the year. Hence the entire cash deposits made in the bank account stood properly explained by the assessee. In our considered opinion, given the business model of the assessee, the nature and source of credit within the meaning of section 68 of the Act stood properly explained in the instant case and accordingly no addition could be made as unexplained cash credit u/s 68 of the Act. Accordingly, the grounds raised by the revenue are dismissed. Addition u/s 69C - Unexplained business Expenditure - HELD THAT:- We find that the entire business expenses had already been accounted in the regular books of accounts of the assessee and hence the sources for incurrence of the same are drawn from the books of accounts regularly maintained by the assessee. It is not the case of the ld. AO that the said expenditure had been met by the assessee out of its books. Hence in our considered opinion, the provisions of section 69C of the Act per se cannot be made applicable in the instant case and hence the addition made by the ld. AO in this regard had been rightly deleted by the ld. CIT(A). Assessee appeal allowed. 2024 (4) TMI 495 Deduction u/s 80IA - handling and cargo handling services provided by the assessee - claim denied as assessee was incorporated in the manner that it is only an reorganized business set up and assessee company has not entered into direct agreement with the Government of India - HELD THAT:- Perusal of the order of the Tribunal in assessee s own case for the AY 2011-12 [ 2023 (11) TMI 859 - ITAT DELHI] issue decided in favour of assessee as held AO has fallen in error in considering Airport as a facility standing in isolation and giving a very restrictive interpretation to the scope of developing, operating and maintaining Airport. Airport is a facility for transportation of passengers or cargo or both at the same time. The passengers may also travel along with their baggage and cargo may be accompanied by people handling that cargo. Thus the facilities of Airport is not restrict to the fixed structure or equipment connected with the Aircrafts maintenance, their running, flying or landing alone. The functionality of the Airport arise from all the facilities which bring utility or add utility to the premises, convenience to passengers, crew, ground staff. Facilities like cargo handling, ground handling, announcement crew, security, check-in counter, baggage management facility, the Airport crew, airlines crew, aircraft crew facility etc. collectively and independently use the premises, the fixed structures, the equipments etc. The developing, operating and maintaining Airport, therefore, encompasses all these activities which are incidental or supplemental to the transportation of passengers or cargo or both together. These facilities of various kind may be provided by one company or different companies but in any way they operate in consortium and having interdependence. Learned AO has fallen in error in observing that different companies have developed the running of Banglore Airport and the assessee is merely providing utility services beyond the scope of Airport for the purpose of Section 80-IA. Thus, on the basis of aforesaid decision, the Bench is inclined to hold that ground handling and cargo handling services provided by the assessee are covered within the meaning of Explanation referred to Section 80-IA and assessee is entitled to claim the benefit of same. Decided in favour of assessee. TDS u/s 194C on concession fee - Disallowance of provision for concession fee for the AY 2011-12 invoking the provisions of section 40(a)(ia), however, during the assessment years under consideration i.e. 2012-13 2013-14 the same was disallowed as contingent liability not allowable as deduction - CIT(A) considering the submissions of the averments of the AO in the assessment order deleted the disallowance - HELD THAT:- CIT(A) in the order stated that the facts are identical with those of the AY 2011-12 [ 2023 (11) TMI 859 - ITAT DELHI] and the Tribunal allowed the claim of the assessee wherein held provision as made by assessee did not as such create a debt in favour of BIAL as the concession fee did not arise out of any contract performed by BIAL but was more in the form of royalty with uncertainty of actual amount due and therefore no income can be said to have accrued or arisen to BIAL. Methodology adopted for estimation of turnover / profits and subsequently creating the year-end provision and reversing the same in next financial year, remains the same in all subsequent years. Thus, given the fact that in AY 2014-15 the Department has now accepted that the disallowance is not required to be made under section 40(a)(ia) in respect of the year end provisions for concession fee, same sustains the claim of assessee. As year end provisions were made for expenses on estimate basis in respect of which bills were yet to be submitted. The provisions were reversed upon receipt of invoice and expenses were booked as per the invoices and taxes were deducted there from and if income does not result at all, there cannot be a levy of tax even though a book entry is made. Decided against revenue. 2024 (4) TMI 493 Penalty u/s 271(1)(b) imposed on minor - Clubbing of minor s income in parents hands - penalty imposed on Non-compliance of two notices issued by AO u/s 142(1) - assessee argued that assessee under consideration is a minor and assessment order was framed on the minor person without the consent of his guardian, which is not sustained in law, hence penalty sustained by ld CIT(A) is not sustainable in the hands of minor because minor does not have capacity to make contract. HELD THAT:- We note that ld Counsel for the assessee argued that assessee under consideration is a minor and assessment order was framed on the minor person without the consent of his guardian, which is not sustained in law, hence penalty sustained by ld CIT(A) is not sustainable in the hands of minor because minor does not have capacity to make contract. The minor`s income is clubbed in the hands of one of the parents, therefore considering these facts, we note that penalty should not be imposed on the minor-assessee. We note that during the assessment proceedings, assessee submitted all the necessary details and complied with all the notices issued by the AO from time to time. Regarding the non-compliance of notice of hearing requiring appellant to attend/furnish details appellant filed letter for adjournment. The non-compliance was due to Covid-19 pandemic, as the assessee was working with proper safety measures. Besides, it is also an admitted fact that no addition was made by the assessing officer in the quantum proceedings. That is, in the assessment order, the assessing officer did not make any addition in the hands of the assessee, therefore, there is no question to impose the penalty on the assessee and hence we delete the remaining penalty - Appeal filed by the assessee is allowed. 2024 (4) TMI 492 Validity of 263 proceeding issued in the name of non-existing entities which got amalgamated during the assessment proceeding - HELD THAT:- Cause title itself speaks about the change of name of the Company. It is the fact that amalgamation though destroys outer shell of the corporate entity, the Corporate venture continues enfolded within the new or the existing transferee entity. The business and the adventure lives on but within a new corporate residence, i.e., the transferee company. Therefore, at this juncture, it is essential to look beyond the mere concept of destruction of corporate entity which brings to an end or terminates any assessment proceedings. The scheme of amalgamation in which rights and liabilities of one company are transferred or devolved upon another company, the successor-ininterest becomes entitled to the liabilities and assets of the transferor company subject to the terms and conditions of contract of transfer or merger as it were. When two companies amalgamate and merge into one the transferor company loses its entity as it ceases to have its business. However, their respective rights and liabilities are determined under the scheme of amalgamation but the corporate identity of the transferor company ceases to exist w.e.f. the date of amalgamation is made effective. Though, such concept is absolutely correct but merely because the issuance of notice in the name of erstwhile company by the PCIT cannot be said to be without jurisdiction or nullity, particularly, when the said fact of amalgamation is mentioned in the cause title itself as in the case before us. Thus case in hand before us the order has been issued clarifying the entire status of the appellant and the factor of amalgamation as it reflects from the cause title itself. We, thus, do not find any lacuna in the order issued by the Ld. PCIT on the issue of maintainability Revision u/s 263 by CIT - addition of invocation of provision of Section 40(a)(i) for non-deducting TDS of payment made to non-resident and addition u/s 14A r.w. Rule 8D - HELD THAT:- As specifically pointed out by the Ld. PCIT that no details whatsoever was furnished in regard to the issue relating to non-payment of TDS before the Ld. AO, neither the Ld. AO has examined/verified the said issue. Appellant/assessee before us also failed to show any document which could establish that this particular issue was examined by the AO during assessment period or that the appellant furnished the documents before the said authority below. Similarly, the issue relating to exempt income u/s 14A r.w. Rule 8D has not found to have been examined by the Ld. AO; the expenditure attributable to the exempt income must be worked out in accordance with the Rule 8D which would include direct as well as indirect expenditure attributable to the exempt income. In fact, such duty to examine the issues though cast upon the Ld. AO, that has not been performed by the said Revenue Officer and, therefore, the order passed by the PCIT setting aside the order passed by the AO upon considering it erroneous insofar as prejudicial to the interest of the Revenue and further directing the Ld. AO to reframe the assessment afresh is found to be just and proper without any ambiguity so as to warrant interference. Thus, the appeal filed by the appellant is found to be devoid of any merit and, hence, dismissed. Decided against assessee. 2024 (4) TMI 491 Revision u/s 263 by CIT - cash deposit in the bank questioned - assessment in this case was completed u/s 143(3) r.w.s 147 - HELD THAT:- As relying on SHRI PARAMJIT SINGH VERSUS THE P.C.I.T., ROHTAK [ 2023 (12) TMI 1292 - ITAT DELHI] for exercise of power u/s 263 of the Act, it is mandatory that the order passed by the Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. In the present case, the Assessing Officer did not make any addition for the reasons recorded at the time of issue of notice u/s 148 of the Act. This position is not disputed and disturbed by the Commissioner of Income Tax in his order u/s 263 of the Act. Sequitur is that the AO could not have made an addition on account of share application money in the assessment proceedings u/s 147/148. Accordingly, the assessment order is not erroneous. Thus, the Commissioner of Income Tax could not have exercised jurisdiction under Section 263 - Decided in favour of assessee. 2024 (4) TMI 490 Addition u/s 69A - cash deposited during demonetization period - determination of net profit @8% - assessee is the registered dealer under VAT Act - HELD THAT:- AO with considering the earlier years net profit and the nature of business has determined the NP @8% which is unjustified. The cash deposit in demonetisation period is also the part of turn over. The turnover is declared in VAT return. Taking power from the order of Surinder Pal Anand [ 2010 (6) TMI 404 - PUNJAB AND HARYANA HIGH COURT] and Rajinder Parshad Jain [ 2014 (12) TMI 567 - PUNJAB HARYANA HIGH COURT] here we direct to restrict the net profit @3% on turnover declared by the assessee. AO without proper verification of fact wrongly determined the turnover of the assessee during the impugned assessment year. DR was unable to place any contrary judgment against the submission of assessee. No challenge was made on veracity of the documents, submitted by the assessee. We set aside the appeal order. 2024 (4) TMI 489 Exparte order passed - Addition u/s 69A - party-wise scrap sales have not been co-related with the bank statements and the sales are all in one handwriting, which have been fabricated by the assessee to prove the source of cash deposits - HELD THAT:- We have gone through the bank statements and also few sample sales bills and vouchers, all the transactions are less than Rs. 25,000/-. Further the assessee filed the Return of Income for the previous Asst. Year 2010-11 as well as subsequent assessment years invoking provisions of section 44AB of the Act. In the assessment order passed u/s. 147 r.w.s. 144B of the Act dated 21.03.2023 for the Asst. Year 2017-18, the AO called for information u/s. 133(6) and verified the cash deposit in Industrial Sind Bank and Bank of Baroda. Further the assessee filed the Return of Income u/s. 44AD of the Act showing 8% profit, whereas the assessee offered income at 10.19% to be the profit on the scrap sales, which was accepted by the Assessing Officer and passed a Nil demand. Thus in our considered opinion, the Ld. CIT(A) is not correct in confirming the entire addition made by the Assessing Officer which was also an exparte assessment order. Even in the present assessment year, the assessee offered 8.35% on the sales turnover, which is well above 8% as prescribed u/s. 44AD of the Act. Therefore we have not hesitation in deleting the addition made by the Assessing Officer. Decided in favour of assessee. 2024 (4) TMI 488 LTCG - Exemption u/s 54F - assessee has purchased triplex flat - To be considered as single unit or not - as per AO assessee has not submitted any documentary evidence issued by third party such as building society, builder, tehsil office, municipal corporation etc. which can substantiate that the flats are not different residential units and are part of only one residential house and mere submission of the assessee that the flats are connected internally and used by him as one residential house cannot fulfill the criteria laid down u/s 54 HELD THAT:- We observe that assessee has sold the shares and out of the sale proceeds he purchased three flats with interconnectivity. We also verified the agreement submitted before us which clearly shows that assessee has purchased one triplex flat which consists of a common living area, common kitchen and rooms in the 22nd floor which is interconnected. From the agreement and the flat diagram clearly shows that all the three flats are interconnected with one living room, one kitchen and three rooms. After careful consideration of the facts on record and as per the provisions of section 54F of the Act, it allows an assessee to purchase a residential flat . Therefore, a represents one single unit which consist of one living area, X number of rooms and one kitchen. In common parlance, a residential unit consist of living area, one kitchen and rooms. As per the definition of a residential house the triplex flat purchased by the assessee which has common living area, common kitchen and several rooms which satisfies the definition of a single residential unit. Even though assessee has entered into a single agreement to purchase three identified block from the builder, the identification of blocks may be identified with floor names it does not mean that assessee has purchased three flats merely because of identification given by the builder to complete the whole project. As in this case the builder has modified three flats to suit the requirement of the assessee as per which assessee has purchased a modified flats to suit his requirement as per which assessee has purchased common living area, common kitchen and required rooms which satisfies the common definition of a residential flat. Therefore, in our considered view the assessee has purchased a residential flat which may consists of more than one block of flats. We observe that assessee has submitted a floor plan from the builder which encompasses triplex nature of flat and has been attached along with the registered sale deed which clearly shows that triplex nature of unit purchased by the assessee were approved and accepted by the builder. In the light of the discussion, the claim of the assessee is found to be just and proper. Assessee has purchased triplex flats which are interconnected and which can be considered as a residential unit as per the definition of section 54F - Decided in favour of assessee. 2024 (4) TMI 487 Deduction(s) u/s 80P - interest income from the investments made in co-operative/other bank(s) - HELD THAT:- The same is found to be no more res integra in light of this tribunal s recent coordinate bench s order in The Rena Sahakari Sakhar Karkhana Ltd. [ 2022 (1) TMI 419 - ITAT PUNE] wherein as held as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. Decided in favour of assessee. 2024 (4) TMI 486 Delay in filling appeal before ITAT - Delay of 68 days involved in filing of the appeal - HELD THAT:- In the present case, we observe that though there is an inordinate delay of 68 days involved in filing of the present appeal but the assessee had not filed any application seeking condonation of delay and this kind of conduct should be deprecated. Also, as observed in the case of Ramlal, Motilal and Chotelal Vs. Rewa Coalfields Ltd.( 1961 (5) TMI 54 - SUPREME COURT] that seeker of justice must come with clean hands, therefore, now when in the present appeal the assessee appellant had failed to come forth with any application for condonation elaborating in the backdrop of sufficient reason that would justify condonation of the substantial delay involved in preferring of the captioned appeal, therefore, we decline to condone the same and, thus, without adverting to the merits of the case dismiss appeal of the assessee as barred by limitation. Appeal of the assessee is dismissed Customs 2024 (4) TMI 485 Validity of Show Cause Notices issued for revision of the assessable value and customs duty - Undervaluation and Mis-declaration of the goods imported - bypass the normal Customs Channels and clear the imported goods into domestic area by resorting to gross undervaluation and thereby defrauding the government exchequer by evading the payment of higher customs duty - demand for differential Customs Duty - confiscation - reasons to believe - Penalty under the provisions of Section 112(a) (b)/114A and 114AA - No independent inquiry / investigation with respect to goods imported - No opportunity of Personal Hearing - HELD THAT:- The SCNs i.e. SCN dated 09.02.2022 read with Corrigendum dated 11.02.2022 and SCN 14.02.2022 have been adjudicated by the Ld. Commissioner ex parte vide the impugned OIO MUN-CUSTOM- 000- COM-14-23-24 dated 20.09.2023 without affording any opportunity of Personal Hearing to the Appellant by applying the said value as proposed in the SCN dated 08.09.2021 i.e. the first S.C.N to the subject Bills of Entry and accordingly, have confirmed the entire demand along with interest and has also imposed penalty equal to the confirmed duty. In addition, penalty u/s 114AA has also been imposed. It is further found that DRI has been stated to have developed an intelligence to the effect that one M/s Zip Zap Exim Pvt. Limited ( M/s ZZEPL ), a trading unit in Special Economic Zone, Kandla (Gujarat) ( KASEZ ) was importing Knitted Polyester Fabrics and various other Electrical goods and subsequently, clearing the same into DTA to various DTA importers including the Appellant by resorting to gross undervaluation. On the basis of said purported intelligence, an investigation was conducted and after completion of the same, a show cause notice dated 08.09.2021 was issued to M/s ZZEPL other DTA buyers including the Appellant proposing rejection of value declared by said SEZ Unit and demanding differential duty along with interest from DTA buyers (including the appellant) with respect to respective imported goods. Said show cause notice dated 08.09.2021 is yet to be adjudicated as per verification got done through Authorized Representative, which has revealed that matter was still to be adjudicated in that show cause notice. However, the learned Adjudicating Authority, has adopted the value proposed to be re-determined in the said SCN and confirmed the demand accordingly. Thus, determination of value proposed in the SCN is done u/s 28 (8) by depending on a show cause notice which has yet to be adjudicated. This is erroneous as value proposed in SCN dated 08.09.2021 the first S.C.N cannot be made basis to raise and confirm the demand in the present case without adjudication. Thus, entire demand confirmed in the present case vide impugned show cause notices on the basis of alleged value proposed in another show cause notice dated 08.09.2021, is bad in law. It is nothing but putting the cart before the horse. Perhaps it is a fit case, where common adjudicating authority for two jurisdictions should have been appointed by the C.B.I.C. An allegation which is yet to be decided in a show cause notice cannot be made evidentiary basis to sustain demand in another. A weak foundation of allegation alone in one matter cannot lead to strong edifice of sustainable evidence in another matter. Debile fundamentum fallit opus applies in the present case. An allegation which has not faced judicial scrutiny does not merit to be treated as authoritative evidence. We therefore, find that order cannot be sustained, same is set aside. Matter is remanded to be heard along with or after decision in show cause notice dated 08.09.2021 i.e. first S.C.N acquires sufficient evidentiary value and after due observance of natural justice in the impugned S.C.Ns and providing various relied upon materials to the appellant and after considering on submissions including made on the point of limitation vis-a-vis of corrigendum by the appellant. Impugned order is set aside and appeals are allowed by way of remand in above terms. Appeals allowed by remand. 2024 (4) TMI 484 Validity Of Order-in-Appeal - Seeking amendment in the bills of entry u/s 149 of the Customs Act, 1962 (CA 62) - refund of excess duty paid - Re-classifying the goods by changing the CTH - Import of Electronic Parts of Lighting Equipment - erroneously declared under a wrong CTH 85122010/20 - same parts were imported earlier under the correct CTH 85129000 - HELD THAT:- In the instant case the request for amending the CTH declared in the Bill of Entry would finally result in a refund. This would make it necessary to calculate the duties payable afresh. The redetermination of duty as a principle, would include determining the import permissibility of the revised CTH in terms of the EXIM policy and any other laws regulating imports/exports, determining duties now leviable on the goods on import (Basic, Additional, Anti-dumping, Safeguards etc.). Permissibility of various benefits under different schemes or applicability of any exemption notification benefits etc. The goods may require the value to be re-fixed based on the Tariff Values fixed for the changed CTH or to be scrutinized for the basis of duty calculation changing from specific duty to ad-valorem duty etc. Its only after this process is complete that the duty liability, which is required to be paid by the importer as per the revised CTH can be determined and the refund claim examined along with unjust enrichment etc. Hence the administrative action of amending the CTH in the BE would virtually amount to an order of reassessment by the same proper officer after the original assessment done had concluded the determination of the liability of the importer to pay duty and the goods have been cleared from Customs controls. Once assessment is concluded it should not be administratively tinkered with either at the behest of the importer or of the department, without it being challenged in appeal. It is also to be mentioned that although rectification of mistakes or clerical errors are permissible u/s 154 of the Customs Act, the Appellant has not used that provision to alter / rectify the BE. Hence the Appellant himself acknowledges that the change sought to be made in the BE is not merely an error or mistake. Rightly so as the amendment request is not for only one Bill of Entry but for Bills of Entry filed over a period of time. Even a bonafide error made over a period of time would be in the nature of negligence which in common parlance means and implies a failure to exercise due care, expected of a reasonable prudent person. If the goods are not available for verification or examination or testing as embodied in Section 17(4), the reassessment cannot be permitted. However, once a decision is taken by the proper officer to verify / examine or test goods, then, as per the rule of prudence in law, appellate power is not to be exercised by an Authority for the purpose of substituting one s subjective satisfaction with another, without there being any specific reason for such substitution. There are 3 methods provided in the Customs Act, for any modification or amendment to be made in any Bill of Entry. Hence an amendment application u/s 149 of Customs Act, 1962 can be filed to revise the classification in the Bill of Entry. We find that the present issue arises with an aim of the Appellant getting a refund of excess duty perceived to have been paid. From the inception of the Customs Act the assessment of imported goods was done by the proper officer . It is the Appellants contention that the Apex Court in ITC Ltd [ 2019 (9) TMI 802 - SUPREME COURT] , has categorically observed that self-assessment could be modified either u/s 128 or under relevant provisions of the Act. According to them on a plain reading of the provisions of Section 149, it is clear that a Bill of Entry can be authorised to be amended even after the imported goods have been cleared for home consumption on the basis of documentary evidence that was in existence at the time the goods were cleared. The Appellant s claim to amend a document under the said section is not disputed. The question is whether an amendment facility permitted u/s 49 is among the relevant provisions of the Act that empowers and can be used as the route to review and undo the assessment already made, which assessment order as per the Hon ble Supreme Court s judgment in Flock India [ 2000 (8) TMI 88 - SUPREME COURT] , is in the nature of execution of a decree/order . From the discussions above regarding the impact of a change of CTH declared in the Bill of Entry on the assessment already made, it appear that as per the Hon ble Supreme Court s judgement discussed above the request for change in CTH and consequently of a final assessment could only be made before a superior authority in appeal. In the light of the ratio of the judgments of the Hon ble Madras High Court in the case of Stanley Engineered Fastening India Pvt Ltd v. CC [ 2023 (3) TMI 846 - MADRAS HIGH COURT] and Bharti Airtel v. UOI [ 2022 (2) TMI 154 - MADRAS HIGH COURT] , the impugned order is set aside and the matter is remanded to the proper officer. He is directed to process the request of the appellant dated 13.9.2019 for amendment of the BE s as per section 149 of CA 62. On being satisfied he should re-assess the impugned goods to duty by passing a speaking order. After the re-assessment order is issued the appellant will be eligible to claim consequential refund, if any, as per law. The lower authority shall follow the principles of natural justice and afford a reasonable opportunity to the appellant to state their case both orally and in writing if they so wish, before finalizing the matter. The appellant should also co-operate with the adjudicating authority in completing the process expeditiously and in any case within ninety days of receipt of this order. The appeal is disposed of accordingly. 2024 (4) TMI 483 Jurisdiction of this Tribunal to entertain appeal - Jurisdiction u/s 129A of Customs Act, the proviso (a) to sub-clause 1 - Confiscation of goods - Indian currency/Goods - Baggage Rules - HELD THAT:- It is clear that the appellant was traveling back from Bali to India, however, had forgot his hand bag at Bali Airport along with INR 4,34,000/- therein. It is apparent that the Indian Currency of INR 4,34,000/- was handed over in India by the airlines staff to the appellant on 09.07.2019 in presence of the customs authorities. Since, the Currency was in excess of the permissible limit of Rs. 25,000/- per person as provided under FEMA vide Notification dated 29.12.2015, that amount over and above Rs. 25,000/- i.e. Rs. 4,09,000/- (INR) was proposed to be confiscated under Section 111 read with Section 113 of the Customs Act with the proposal of imposing penalty on the appellant under Section 112 (a) and 112 (b) (i) and 114AA of Customs Act, 1962. The appellant had kept currency in his baggage which he was supposed to bring into India but forgot the baggage having Indian currency/Goods in said Baggage at Bali airport. The said Baggage when was brought to India and was inspected it was found carrying INR of value more than permissible one. The order confiscating the same has been passed specifically under Section 111 (L), considering the recovered currency being beyond permissible limit (Prohibited) as Goods imported in Baggage without a declaration required under Section 77 of Customs Act. The very perusal shows that the context of confiscation of Indian Currency in the present appeal, is one recovered from Baggage which the appellant has failed to declare under Section 77 of the Act. The penalty has also been imposed under Section 111D and 113D due to import being contrary to the prohibition imposed under FEMA is sufficient to hold that the context of the present appeal is Baggage . In terms of Section 129A, sub-clause (a) of the proviso therein, the appeal in such case has to be filed before the Revisional Authority and is not maintainable before this Tribunal. The decision of Calcutta High Court in Vinod Kumar Shaw 2010 (12) TMI 1335 - CALCUTTA HIGH COURT] case is observed to not to be applicable to the given set of circumstances. The said decision has categorically held that question of jurisdiction is relatable to the question of fact. When the case proceeds on the basis of Baggage it has to be understood whether the subject matter is Baggage or not. The subject matter before Calcutta High court was held to be Indian currency simpliciter whereas in the present case the subject matter is the confiscation of Indian currency not only under Section 111D also under Section 111 (L) but that too beyond permissible limit currency being imported/exported in Baggage . Thus, present is the appeal against an order which has been passed with respect to Currency i.e. goods improperly exported and improperly imported as Baggage. Hence, this Tribunal is held to have no jurisdiction to try the impugned appeal - appeal disposed off. 2024 (4) TMI 482 Failure to re-export the goods after re-import - Benefit of exemption from customs duty - Change of Notification in the bill of entry - Recovery of Drawback - Exports leather shoes - goods returned for repair of the shoes - failed to comply with the condition of re-exporting the goods - Whether the appellant is eligible for the benefit of Notification No.94/96 although they have not claimed the said benefit at the time of import of goods - HELD THAT:- From the facts, it can be seen that that the appellant had intended to re-export the goods after repair of the shoes. However, they could not fulfil this requirement and thereafter sold the goods locally. They then requested the department to extend to them the benefit of Notification No.94/96. The department has not considered the same observing that the appellant has availed drawback and claimed benefit of Notification No.158/95 at the time of import of the goods. On similar set of facts, the Tribunal in the case of Olam Agro India Ltd.[ 2024 (2) TMI 317 - CESTAT AHMEDABAD] had considered the very same issue and held that the appellant would be eligible for alternate beneficial notification. The decision of the Hon ble Supreme Court in the case of Share Medical Care [ 2007 (2) TMI 2 - SUPREME COURT] held that assessee cannot be denied the benefit of alternate notification when it is eligible at the time of import of the goods. Following the cited decisions (supra), we are of the view that the appellant is eligible for the benefit of Notification No.94/96. However, it is made clear that the appellant has to pay back the drawback claimed by them along with interest. The impugned order is set aside. Appeal is allowed with consequential relief, if any, on the condition that appellant has to pay back drawback claimed. 2024 (4) TMI 481 Classification - Imported goods from Korea - gold coins (other than legal tenders) - fall under CTH 7114 1910 as claimed by the appellant Or under CTH 7118 9000 as claimed by the department - exemption from payment of Customs duty - rejection of exemption under notification dated 31.12.2009, as amended by notification dated 31.12.2016 - recovery of differential duty with interest - Whether the imported gold coins can be called as the Prohibited Goods merely for want of letter issued by Reserve Bank of India - HELD THAT:- The goods in question apparently and admittedly are gold coins. As the terms suggest these are the articles crafted out of precious metal hence appears to be subject matter of CTH 7114. Simultaneously these articles specifically are coins and coins are precisely mentioned under CTH 7118. Thus it becomes the point of interpretation as to which CTH entry suits the impugned goods more. Hon ble Apex Court in the case of Commissioner of Central Excise, Shillong vs. Wood Craft Products Ltd.[ 1995 (3) TMI 93 - SUPREME COURT] and also in a later decision in the case of L.M.L Ltd. vs. Commissioner of Customs [ 2010 (9) TMI 12 - SUPREME COURT] has held that for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from HSN. Entry at CTH 7114 covers all articles of Gold. The word article has also not been defined under any of the Notes to Chapter 71. Again the dictionary meaning has to be relied upon. As per Oxford Dictionary article is a particular item or object and include household articles. Cambridge Dictionary also define article to mean as an object, a particular thing specially one i.e. one of several things of a similar type or a thing similarly placed. As per Merriam Webster dictionary article is a thing or a person of a particular and distinctive kind of class. Thus, it becomes clear that goods in question, (gold coins) being an object/ a thing of particular kind, hence are nothing but the articles. Keeping in view the entire discussion about Chapter Notes, explanatory notes, the General Rules of Interpretation and the description of respective entries under CTH 7114 and 7118, it becomes clear that gold coins are such articles of gold which are in the form of coin, but being the coins of non legal tender, these cannot be covered under CTH 7018. These being articles of precious metals are therefore held to be covered under CTH 7114. This issue is otherwise no more res-integra as has been decided by this Tribunal s Principle Bench in the case of Abans Jewels Pvt. Ltd. vs. Principal Commissioner of Customs, ACC (Import) [ 2022 (4) TMI 1370 - CESTAT NEW DELHI] and also by the Regional Bench of Hyderabad as well as of Bangalore in the case of Sri Exports [ 2019 (5) TMI 82 - CESTAT BANGALORE] . Accordingly, the above formulated question No. 1 stands decided in favour of the importer and against the Department. As far as goods imported and classified under CTH 7114 1910 are concerned, in terms of the Schedule I of the ITC (HS), the same were freely importable without any restrictions prior to the issuance of the Notification No. 25/2017 dated 25.08.2017. Vide the said Import Policy, the Articles of gold were allowed to be imported free whereas coins of any metal other than gold, though were freely importable but were subject to RBI regulations. Thus Import Policy of 2017 clarifies that since the goods in question were though coins but of gold, no prohibition is at all applicable upon these coins which were merely articles of gold. Both these documents are sufficient to hold that gold coins in question were not restricted . Only such coins as are classified under CTH 7118 were restricted. As already held above that impugned gold coins are classified under CTH 7114 the RBI can issue regulations u/s 58 of the Reserve Bank of India Act, 1934 or section 47 of the foreign Exchange Management Act, 1999. The exemption as availed by the appellant under Notification No. 152/2009-Customs dated 31.12.2009 as amended by Notification No. 66/2016 Cus. dated 31.12.2016, is held to be very much available to the appellant. We are of the opinion that Commissioner (Appeals) has wrongly relied upon the decision of Hon ble High Court of Delhi in the case of Khandwala Enterprises Pvt. Ltd. vs. Union of India [ 2019 (11) TMI 740 - DELHI HIGH COURT] . Accordingly we hold that Adjudicating Authority below has wrongly interpreted the said decision. In-fact has wrongly applied the same to the facts of the present case despite that the facts are not identical. Thus both these questions (No. 2 3) also stands decided in favour of appellant holding that the gold coins imported by appellant are not the restricted goods and that the appellant is entitled for the exemption from payment of customs duty in terms of Notification No.66/2016-Cus dated 31.12.2016. Corporate Laws 2024 (4) TMI 480 Oppression and Mismanagement - Validity of the Lease Deed - Doctrine of Res Sub-Judice - Appellants argued that the Tribunal overstepped its jurisdiction by setting aside the lease deed while its validity was under scrutiny in a civil court - HELD THAT:- The bedrock of this case is the lease deed dated 26.08.2019, executed pursuant to the resolution dated 23.08.2019 which is not only contrary to the provisions of Section 188(1) of the Act r/w Rule 15 of the companies (Meeting of board and its powers) Rules 2014 but also clause 36(ii) of the AoA as on 23.08.2019, which provides that the board of directors shall not, without consent of 100% members of the company, in duly convened general meeting can lease and dispose of the property of the company by way of lease etc. and that the consent of 100% members of the company in a duly convened general meeting is conspicuous by its absence. There are no traces of the alleged oral settlement which has been made the basis of the lease, the terms of which are more against the company (R1) than its favour, therefore, these are unconscionable terms and conditions which would attract the provisions of Section 241 and 242 of the Act. Moreover, the Appellant did not deliberately implead Rohit Agarwal and Shobhit Agarwal as parties to the present appeal though they were respondents in the main petition only in order to conceal the fact that Shobhit Agarwal who is the son of Appellant No. 1 (Ajay Kumar Agrawal), is a partner of Appellant No. 3 (TX Homes LLP) whereas as per Section 188 r/w 2(76) of the Act and Rule 4 of Companies (Specification of Definition Details) Rules, 2014, the lease deed would not have been executed in favour of the related party. The power under Section 241 and 242 of the Act would include the power to set aside the lease deed which has been executed on behalf of R1 in violation of mandatory provisions of the Act, AoA and terms and conditions of the impugned lease deed are against the very interest of R1 and is oppressive, therefore, the lease deed has rightly been set aside by the Tribunal. Thus, it is a fit case in which the Tribunal has interfered and set aside the registered lease deed and as such, the impugned order does not call for any interference by this Court, the same is hereby upheld - appeal dismissed. 2024 (4) TMI 479 Rightful owners of 4000 shares or not - Exercise of jurisdiction under Section 8 of the Arbitration and Conciliation Act - HELD THAT:- Language of Section 8 of the Arbitration and Conciliation Act has inherent restrictions. The Section puts a bar on the courts not to go outside the contours of Section 8 and the Court can only exercise jurisdiction to see if there is a valid clause and whether the dispute is arbitrable. Thus to give a finding at this stage to the effect R1 and R2 are owners of 4000 shares, which in fact is the main relief claimed in the Company Petition, the Ld. NCLT certainly had travelled beyond its jurisdiction. There was no occasion for Ld. NCLT to delve into the issue of ownership of 4000 shares in an application under Section 8 (Supra) and the said question would arise only when the maintainability of the main case would be decided. Thus though the appellant forego their claim to challenge dismissal of its application under Section 8 of the Arbitration and Conciliation Act but the observations in the impugned order so far as it relate to the declaring of the ownership of 4000 shares was never warranted at this stage and is set aside. This issue needs to be decided by the Ld. Tribunal at an appropriate stage and this order be not construed as an expression/opinion on merits upon the ownership of shares which fact shall be now decided by the Ld. NCLT on facts and law. Appeal disposed off. Insolvency & Bankruptcy 2024 (4) TMI 478 Rejection of Section 7 Application filed by the Appellant (homebuyers) on the ground of non-compliance of Section 7, sub-section (1), 2nd Proviso - decree-holder is class of Financial Creditor or not - HELD THAT:- The judgment of the Hon ble Supreme Court in Kotak Mahindra Bank [ 2022 (6) TMI 13 - SUPREME COURT ] itself clearly provides that a person, who has a recovery certificate, which is akin to Decree, is entitled to file Section 7 Application as Financial Creditor. Whether the debt is fructified in a Decree or not, if debt is a financial debt it gives right to Financial Creditor to initiate proceedings under Section 7. The judgment of the Hon ble Supreme Court in Vishal Chelani [ 2023 (10) TMI 949 - SUPREME COURT ] has been relied by the Adjudicating Authority. It is relevant to notice the facts and ratio of the judgment of Vishal Chelani, which has been relied by the Adjudicating Authority. Vishal Chelani and other were Homebuyers, who had filed their claim on the basis of order passed by UPRERA. They filed claim in Form-CA in the category of Homebuyers. The RP informed the Appellants that they should file their claims in Form-C as a Financial Creditor. The Appellants filed an Application before the Adjudicating Authority, claiming that they should be treated as Homebuyers and they be permitted to file claim in Form-CA, which Application was rejected. The allottees in Vishal Chelani s case were Applicants, who had also got order in their favour from RERA, but it was held by the Hon ble Supreme Court that their status as a Financial Creditor does not change and they were entitled to file their claim in Form-CA as a Financial Creditor . The above judgment of the Hon ble Supreme Court, which was relied by the Adjudicating Authority, clearly supports the submission of learned Counsel for the Appellant. The Appellant cannot be said to go out of the definition of allottees merely because they have an order in their favour by RERA and the Appellants submission that they should be treated in a different category, i.e., category of Decree Holder and are not required to comply with Section 7, sub-section (1), 2nd Proviso cannot be accepted - Thus, Homebuyers, whether they have an order or Decree from the RERA or who do not have any Decree or order from RERA, belong to same category of allottees and no distinction can be made on the said ground. The Appellants are allottees within the meaning of the Code and as a Financial Creditor, when they have filed the Application under Section 7, they were required to comply with Section 7, sub-section (1), 2nd Proviso and Adjudicating Authority did not commit any error in rejecting their Application due to non-compliance of Section 7, sub-section (1), 2nd Proviso. There is no merit in the Appeal and the Appeal is dismissed. 2024 (4) TMI 477 Admission of petition under Section 7 of the IBC - initiation of CIRP of Corporate Debtor in its capacity as Corporate Guarantor - Allegations of forged mortgage deeds / contract of guarantee - Whether the instant Section 7 application filed by Shri Rahul Dodeja on behalf of Respondent No.1 suffered from any infirmity as it is the case of the Appellant that this instant petition has been filed by a person on the basis of Power of Attorney without any supporting Board Resolution of the Financial Creditor and hence not maintainable? - Doctrine of indoor management - HELD THAT:- Noticing Rule 4(1), an application against the Corporate Debtor under Section 7 of the IBC requires to be made in Form 1 accompanied with relevant documents and records. In the present case, looking at the Form 1 of Section 7 in Part - I filled in by the Financial Creditor, it has been clearly stated at Sl. No.5 that A copy of the Power of Attorney dated July 8, 2019 authorising Mr. Rahul Dodeja to act on the behalf of the petitioner is annexed herewith and marked as Exhibit 2 as is placed at page 90 of the Appeal Paper Book ( APB in short). On looking at the Power of Attorney, it is noticed that the same has been issued pursuant to Board Resolution of 12.03.2019 empowering Mr. Rahul Dodeja to file the Section 7 application as is seen at page 103 of the APB. It is found that Mr. Rahul Dodeja had been provided general authorisation by the Yes Bank by way of Power of Attorney pursuant to a Board Resolution to file necessary applications for commencement of legal proceedings not only against the Borrower but also against their Hypothecators/Mortgagors/Guarantors. Given this position, it is clear that Section 7 application was filed in the present case by a duly authorised person on behalf of the Financial Creditor and thus objection raised by the Appellant in this regard are misconceived and hence not sustainable. Doctrine of indoor management - Tenability of the Deeds of Guarantee in question in the context of the allegation levelled by the Appellant that they were products of fraud and fabrication - HELD THAT:- This doctrine proceeds on the premise that third parties who enter into a contract with any company is protected against any irregularities in the internal procedure of the company. Persons transacting with companies are entitled to assume that internal company rules have been complied with even if they are not. In other words, the company s indoor affairs are to be treated as the company s outlook - In extending this doctrine to the facts of the present case, it is found that the Adjudicating Authority held that there was clearly no requirement for Yes Bank to look into the company s internal workings. The Yes Bank enjoyed the right to infer that the Board Resolution authorizing the signing of the Deeds of Guarantee was legitimately passed and that the Corporate Debtor was consequently bound by the Deed of Guarantee even if the internal requirements and procedures had not been complied with by the Corporate Debtor. Thus, in the given circumstances, when there is no cognisance which has been taken by any court of law, civil or criminal, of the Deeds of Guarantee being forged and fabricated, in all fairness, the Respondent No. 1 is fully protected in proceeding on the assumption that the signing and execution of the Guarantee Deeds has taken place in good faith and is therefore a valid and legal document - As regards the alleged handwriting expert s opinion which has been adverted attention to by the Appellant to establish forgery, the Adjudicating Authority in exercise of summary jurisdiction is not expected to scrutinise such opinions and rely upon the assessment contained therein and more so when the opinion has been disputed as not being an independent third-party opinion. There are no error on the part of the Adjudicating Authority to have desisted from entering into the realm of contractual disputes as it would tantamount to judicial overreach. Deed of Guarantee was required to be obtained before the disbursement of loan in terms of Section 127 of The Indian Contract Act,1872 or not - HELD THAT:- From a plain reading of the Section 127, the word done has a clear and unambiguous meaning denoting an act that has ended. Hence, when the legislature has actually used the word done , which in its ordinary sense denotes any act that has been completed, it must be assumed that the intention of the legislature is to include anything done by the lender for the benefit of the borrower in the past to be valid consideration. Hence, the only plain and natural meaning that could be deciphered would be that any act that has been completed for the benefit of the borrower would constitute consideration. In case of a conflict between the section and its illustration, the latter must give way to the former. It can thus be positively concluded that an act done for the benefit of the principal debtor in the past would constitute a valid consideration for an agreement of guarantee with the surety. The contention of the Appellant that Section 127 of the Contract Act necessitated the disbursement of loan to precede the Deed of Guarantee also does not hold good in view of a catena of judgements passed by the various Hon ble High Courts wherein it has been held that the language of Section 127 was clear and unambiguous to also cover past transactions and past promises prior to giving a guarantee or surety - thus, it is not necessary that grant of loan to the principal debtor by the creditor must be necessarily contemporaneous with the execution of Guarantee Deeds and hence the legality and subsistence of the present Deeds of Guarantee cannot be questioned on this ground. These Mortgage Deeds purportedly created a charge against the property located in Kerala and since an exclusive charge had already been created in respect of the charged property in favour of IFCI Ltd, it could not have been charged to Yes Bank without permission of IFCI. It is also the case of the Appellant that they had disputed and objected to the creation of charge in respect of the mortgage property and had sent an email in this regard to MCA on 21.09.2019. It is therefore the case of the Appellant that reliance by the Adjudicating Authority on the mortgage deeds is erroneous - It is significant to note that these Deeds of Mortgage were executed in furtherance of the Deed of Guarantee. Moreover, the Deeds of Mortgage contained the signature and the common seal of the Appellant besides bearing the stamp of registering authority thereby authenticating its execution. Since, neither the charge nor the modification thereof was disputed by the Appellant either with the MCA or before any appropriate legal forum at an earlier stage and the mortgage deeds were executed in furtherance of the Deed of Guarantee and the notice for invocation of the Corporate Guarantee was issued, there are no reasons to disagree with the findings of the AA that the liability of Corporate Debtor cannot be done away even if their irregularity in the execution of the mortgage deed or creation of mortgage without NOC from existing mortgagee i.e. IFCI pointed out by the Corporate Debtor is believed . Whether in the facts of the present case, Section 7 petition could have been admitted against the Appellant in their capacity as Corporate Guarantor? - HELD THAT:- It has been contended by the Respondent that there is no bar on the Financial Creditor to proceed against the principal borrowers and the Corporate Guarantor simultaneously. It is their case that the liability of a Corporate Guarantor is coextensive with the principal borrower and therefore the Financial Creditor is at liberty to require the performance by the Guarantor to discharge its liability and obligations - This issue has been squarely covered by the judgement of the Hon ble Supreme Court in Laxmi Pat Surana vs UOI [ 2021 (3) TMI 1179 - SUPREME COURT] . In terms of the Laxmi Pat Surana judgment of the Hon ble Supreme Court, when the Corporate Debtor gives a guarantee in respect of a loan transaction, the right of the Financial Creditor to initiate action against the Corporate Guarantor gets triggered the moment the principal borrower commits a default. In other words, when default is committed by the principal borrower, the amount becomes due against both the principal borrower and the Corporate Guarantor and hence both become liable to pay the amount when the default is committed. Thus, the default by the principal borrower and the guarantor arises on the same date, unless, the terms of contract of guarantee provides that the liability of the guarantor would arise in terms of the Deed of Guarantee. In the present facts of the case, the Yes Bank had invoked the guarantee vide notice dated 26.08.2019 and 20.11.2019, therefore, the defaults had arisen on the issue of the demand notice as contemplated in the Deeds of Guarantee. The company petition under Section 7 which was filed against the principal borrowers has already been admitted by the Adjudicating Authority and presently undergoing CIRP. In the present case, notice has been duly served upon the Corporate Guarantor demanding payment and there being a clear default on the part of the Corporate Guarantor to clear the outstanding due, the Adjudicating Authority has rightly admitted the Corporate Debtor in its capacity as Corporate Guarantor into CIRP. The Adjudicating Authority has rightly admitted the Section 7 application for initiation of the CIRP process after coming to the correct conclusion that Respondent No.1 has successfully proved the financial debt and default on part of the Corporate Debtor as Corporate Guarantor. There are no reason to interfere in the impugned order passed by the Adjudicating Authority. Appeal dismissed. PMLA 2024 (4) TMI 476 Money Laundering - Seeking grant of bail - appellant has been in custody for more than five years between the period - 2011 and 2018, in the predicate offence - HELD THAT:- Keeping in view the period of custody undergone, the present appeal is accepted and the appellant - Ram Binod Prasad Sinha is directed to be released on bail during the pendency of trial in ECIR no. 03/2018 registered for the offence(s) punishable under Section 4 of the PMLA, before the Court of Additional Judicial Commissioner-XVII-cum-Special Judge, CBI, Ranchi, subject to conditions imposed. The impugned judgment is set aside and the appeal is allowed. Service Tax 2024 (4) TMI 494 SVLDRS - Quantification of liability - Prayer for issuance of Discharge Certificate after allowing the petitioner opportunity to pay up the requisite amount under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - short payment of service tax - HELD THAT:- It is no longer res integra that a Circular issued by CBIC, here under Section 133 (1) of the Scheme would bind the Revenue Authorities insofar as it is beneficial to the assessee/declarant. In UCO BANK, TAMIL NADU INDUSTRIAL INVESTMENT CORPORATION LTD. VERSUS COMMISSIONER OF INCOME-TAX [ 1999 (5) TMI 3 - SUPREME COURT ], an issue arose as to the binding effect of circulars issued by CBIT under the Income Tax Act, 1961. It was held in the case that The officers, therefore, were asked to intimate to all the companies that if the loans were repaid before 30th of June, 1955 in a genuine manner, they would not be taken into account in determining the tax liability of the shareholders to whom they may have been advanced despite the new section. This circular was held by this Court as binding on the Revenue, though limiting the operation of Section 12(1B) or excluding certain transactions from the ambit of Section 12(1B). It was so held because the circular was considered as issued for the purpose of proper administration of the provisions of Section 12(1B) and the court did not look upon this circular as being in conflict with Section 12(1B). Once, the audit party had recorded the admission of the petitioner with respect to the quantum of duty admitted to be payable by it, that admission recorded in writing may have amounted to a written communication. However, no independent adjudication is required to be made on the point, in view of clarification made by the CBIC. Plainly, the CBIC itself has remedied the situation to include admissions recorded during the course of audit within the meaning of quantified , as defined under Section 121 (r) of the Scheme. Seen in that light, the declaration made by the petitioner was with respect to amount quantified prior to 30.06.2019. Therefore, the petitioner s declaration was maintainable. It ought to have been dealt with on its own merits. It may not have been rejected for reason of show cause notice issued after the cut-off date, i.e. 15.7.2019. The order dated 31.12.2019 passed by the Designated Committee is set aside. The matter is remitted to the Designated Committee to pass an appropriate order treating the petitioner s declaration to be in accordance with law with respect to amount quantified before the cut-off date i.e. 30.06.2019 - petition allowed by way of remand. 2024 (4) TMI 475 Classification of service - Works Contract service - erection, commissioning or installation service - exemption from service tax under N/N. 25/2012 (S.No. 12), dated 20.6.2012 - period October 2010 to March 2015 - HELD THAT:- Appellant are required to erect poles and for this purpose, dig pits, prepare concrete base as per specifications and install the poles. The appellant was not required to supply the poles but it was required to provide the materials towards construction of the base. It also required the appellant to ensure that the quality of the materials used were as specified. Thus, there was use of materials in these contracts though not supply of poles themselves. In this case, since the appellant was required to use cement and concrete as per the contracts, they squarely fall under the definition of works contracts under section 65B (54) of the Finance Act. Therefore, the SCN, the OIO and the impugned order were incorrect in assuming that they were not works contracts. The demand, interest and penalties in the impugned order therefore, cannot be sustained. The impugned order is set aside - appeal allowed. 2024 (4) TMI 474 Recovery of Service Tax - Business auxiliary services - sale and purchase of cargo space - demand of service tax on the difference between the amounts shown in the TDS certificates issued by the airlines to the appellant and the amounts on which the appellant had paid service tax - HELD THAT:- If the cargo space is sold by the airlines to the appellant, and by the appellant to the exporter, there is no privity of contract between the airlines and the exporter. The appellant gets the cargo space on that flight and pays the airlines for it. There is another contract between the appellant and the exporter whereby the appellant sells a part of the cargo space which it had bought to the exporter and the exporter pays the appellant. In such an arrangement, the appellant is not acting as an agent of the airlines but as an independent business acting on its own account. Since the appellant buys the cargo space in bulk, the airlines offers a better price and the appellant sells the cargo space at a higher price to the exporter and earns a profit. Neither is the appellant a service provider nor is the airlines a service recipient in such an arrangement and no service tax can be levied. This issue is no longer res integra and it was decided so in COMMISSIONER OF SERVICE TAX, MUMBAI VERSUS GREENWICH MERIDIAN LOGISTICS (I) PVT LTD [ 2013 (8) TMI 453 - CESTAT MUMBAI] , M/S. TIGER LOGISTICS (INDIA) LTD. VERSUS COMMISSIONER OF SERVICE TAX-II, DELHI [ 2022 (2) TMI 455 - CESTAT NEW DELHI] and M/S BHATIA SHIPPING PRIVATE LIMITED VERSUS COMMISSIONER OF SERVICE TAX-I, MUMBAI [ 2022 (1) TMI 1175 - CESTAT MUMBAI] . In these appeals, it is not in doubt that the appellant was buying and selling cargo space on airlines and it has been specifically recorded so in the impugned order dated 1.3.2016. The Commissioner, however, confirmed the demand under the erroneous impression that unless the buyer becomes a permanent owner of the cargo space, this arrangement amounts to rendering a taxable service and accordingly confirmed the demand. The demands for the subsequent periods were confirmed on the same grounds. The impugned orders cannot be sustained and need to be set aside - appeal allowed. 2024 (4) TMI 473 100% EOU - Refund of the unutilized cenvat credit - Rule 5 of the Cenvat Credit Rules, 2004 - denial of refund on the ground that the appellant has not established the nexus of input services with the output services provided by them - rejection of refund also on the ground that there was mismatch of the figures of the refund claims and the cenvat credit as disclosed in the relevant ST-3 returns - rejection of some amount of refund on the ground that the premises is unregistered - interest on delayed refund - CENVAT Credit - nexus with output service. Denial of refund on the ground that the appellant has not established the nexus of input services with the output services provided by them - HELD THAT:- The definition of input service prior to 1.4.2011 had wide ambit as it included the words activities relating to business . Further, in case of output services provider as per first limb of definition of input services as given in Rule 2(l ) of CCR 2004, it is merely sufficient to establish that input services were used for providing output services. The first limb of the definition does not use the words directly and merely says inputs used for providing output services . The finding of the Commissioner (Appeals) that the appellant has not established that input services were directly used for providing output service is adding words into the definition of input service and therefore not acceptable. The appellant therefore is eligible for the refund of credit of input service prior to 1.4.2011. The finding of the adjudicating authority that the refund is not eligible for the reason that the input service did not have nexus with the output service is set aside. Denial of refund on the ground of difference in the amount of the cenvat credit disclosed in the ST-3 returns and the refund of credit filed by the appellant for the relevant period - HELD THAT:- On perusal of records, it is not forthcoming as to which of the services this difference in amount is spread over. For this reason, it is opined that the matter requires to be remanded. In case the appellant is able to furnish that they have availed these input services of higher amount, the original authority is directed to consider as per law and as per findings rendered in this order. Rejection of some amount of refund on the ground that the premises is unregistered - HELD THAT:- The Hon ble Karnataka High Court in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX [ 2011 (9) TMI 450 - KARNATAKA HIGH COURT] has held that credit cannot be denied for the reason that the premises is not registered. Following the same, we are of the view that rejection of refund claim on this grounds is not justified - there is difference in amounts as reflected in the ST-3 returns as well as refund claim as discussed above, the entire matter requires to be remanded to the adjudicating authority to reconsider afresh, the claims which have been rejected. Interest on delayed refund - HELD THAT:- There is difference in the amount of the refund claim and the amount of credit disclosed in the ST-3 returns. All these require much correlation and consideration by the adjudicating authority. For these reasons, we do not find any ground to grant interest as there is not much delay in sanctioning refund. The issue of interest on delayed refund is held against the appellant and in favour of the Department. The matter is remanded to the adjudicating authority for reconsideration in above terms within a period of three months from the date of receiving this order. The impugned orders are set aside. The appeals are allowed by way of remand to the adjudicating authority. CENVAT Credit - input service - having nexus with output service or not - Renting of Immovable Property Services (Parking Service) - Air Travel Agency Service - Photography Service - Management Consultancy Service - Commercial or Coaching Service - Event Management Service - Supply of Tangible Goods service - out of pocket expenses - Security agency services - Pandhal Shamina Services - HELD THAT:- The services described in the table furnished by appellant do not fall under the exclusion clause of definition of input services (post-1.4.2011). The department therefore cannot reject the refund alleging that the services do not have nexus with output services - For this period post-1.4.2011 also, there is difference in the amount of refund claim as well as the amount of credit disclosed in the ST-3 returns. For these reasons, these appeals also require to be remanded to the adjudicating authority for reconsidering the issue of refund. In such consideration of the matter, the original authority is directed to verify the invoices as well as the services of the air travel agency service, photography services, as to whether these are used for personal consumption. If they are used for the activity of the company the appellant would be eligible for credit - appeals also stand allowed by way of remand to the adjudicating authority. Appeals allowed by way of remand. 2024 (4) TMI 472 Recovery of service tax - declared service - commercial or industrial construction service [CICS] - construction of a Metrology Block for the National Physical Laboratory, New Delhi [NPL] - NPL, an institute under CSIR and an authonomous body registered under the Societies Act, 1860, can be considered as a commercial concern/government authority or not - demand raised on the appellant for period prior to merger (for the amount received by M/s. N.N. Company, a proprietorship firm) can be excluded from computation of tax liability or not - exclusion of value of goods transacted on payment of VAT - Extended period of Limitation - levy of Penalty. Whether NPL, an institute under CSIR and an authonomous body registered under the Societies Act, 1860, can be considered as a commercial concern/government authority? - HELD THAT:- The Commissioner did not accept the contention of the appellant that construction of metrological building was for non commercial purposes. The Commissioner found that NPL was engaged in activities like measurement, calibration, testing of devices/instruments and equipments and scientific and technical consultancy services on payment basis. It was also registered with the service tax department for providing scientific and technical consultancy services. The Commissioner, therefore, found as a fact that NPL was a commercial concern/organization established by Council of Scientific and Industrial Research. Thus, the construction services provided by the appellant to NPL upto 30.06.2012 qualified as taxable service under CICS - the Commissioner held that NPL was not set up by an Act of Parliament or a State Legislature and, therefore, was not a governmental authority under the Exemption Notification. Whether the demand raised on the appellant for period prior to merger (for the amount received by M/s. N.N. Company, a proprietorship firm) can be excluded from computation of tax liability? - HELD THAT:- The Commissioner found that the amount of rent received from immovable property prior to merger of the appellant with M/s. N.N. and Company could not be assessed in the hands of the assessee - with regard to renting of immovable property for the period after merger the Commissioner held the overall values of services are more than Rs. 10 lacs and hence threshold exemption is not available to them under Notification No. 8/2008 dated 01.03.2008 and therefore I hold that they are liable to pay Service Tax amounting to Rs. 9,891/-, Rs. 9,891/-, Rs. 12,948/-, Rs. 12,948/- and Rs. 12,948/- for the period 2010-11, 2011-12, 2012-13 and 2014-15 respectively on such taxable services of Renting of Immovable Property amounting to Rs. 96,030/-, Rs. 96,030/-, Rs. 1,04,760/- and Rs. 1,04,760/- for the said period. Whether value of goods transacted on payment of VAT needs to be excluded and benefit of the Exemption Notification can be extended? - HELD THAT:- It was held by Commissioner that though the assessee has failed to produce records to indicate that they had opted for the Compositin scheme before 30.11.2011, I observe taht the assessee cannot be denied a substantial right for procedural lapses. Accordingly, I allow benefit of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 as amended to the assessee. Thus, the assessee is liable to pay Service Tax on the taxable services provided by them @4.12% (including cesses) from October 2011 to March 2012 and @ 4.944% (including cesses) for the period April 2012 to June 2012. Whether the extended period was rightly invoked and whether, penalty could be imposed? - HELD THAT:- The Supreme Court in M/S CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING, NATHPA HP VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [ 2007 (8) TMI 11 - SUPREME COURT] held that The expression suppression has been used in the proviso to Section 11A of the Act accompanied by very strong words as fraud or collusion and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11-A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct - The only relief that can be granted to the appellant is regarding the extended period of limitation under the proviso to section 73(1) of the Finance Act in so far as it relates to the first show cause notice dated 21.04.2014. The matter is, therefore, remitted to the assessing officer only to calculate the demand covered by the first show cause notice which falls in the extended period of limitation so that this demand can be excluded with consequential penalty from the total demand confirmed by the Commissioner. The rest of the demand confirmed by the Commissioner in the impugned order dated 28.02.2017 is confirmed - appeal allowed by way of remand. 2024 (4) TMI 471 Classification of service - sale of space and time for advertisement service or not - agreement for sponsorship with M/s.SPIC Ltd. - HELD THAT:- The very same issue was considered by the Tribunal in the case of appellant in THE TAMILNADU CRICKET ASSOCIATION VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI [ 2018 (2) TMI 235 - CESTAT CHENNAI] , the Tribunal had analyzed the facts of the case and came to the conclusion that the activity does not fall under the category of sale of space or time for advertisement and there is advertisement carried out. The agreements are more akin to sponsorship service. During the relevant period the sponsorship services for sports was excluded from the levy of service. The Tribunal after appreciating the facts had held that the amount received as per sponsorship agreements for boxes and stands are not leviable to tax under Sale of Space for Advertisement and requires to be set aside. The demand cannot sustain and requires to be set aside - Appeal allowed. Central Excise 2024 (4) TMI 470 Amendment in cause title - Valuation - whether or not the amounts collected by the appellants as Sales Tax from the customers but not paid to the State Sales Tax authorities should be included in the assessable value for the purpose of levy of Central Excise duty - HELD THAT:- M/s.Tata Steel Limited does not have any objection in respect of the application moved for amendment of cause title registered as I.A. No. 39029/2024 and therefore, the said application is allowed. Application allowed. 2024 (4) TMI 469 Process amounting to manufacture or not - re-packing of various excisable goods (herbal and cosmetic products), affixing the brand names owned by them in their premises - Illegality of duty liability under Section 4 of the Excise Act - HELD THAT:- This Tribunal in M/S WWS SKY SHOP (P) LTD. VERSUS CCE, INDORE [ 2018 (1) TMI 1734 - CESTAT NEW DELHI] , while relying upon Board s Circular No. 354/285/2011-TRU dated 08.12.2011 has already held that since there is no value addition made by the appellant after receiving the goods from the respective manufacturers till the time these are sold to the consumers that the activity done by the appellant does no amount to manufacture. The bare perusal makes it clear that as per Section 4, the duty of excise on excisable goods has to be assessed including the price actually paid to the manufacturer for the goods sold and the money value of additional consideration, if any, following directly or indirectly from the buyer to the assessee in connection with the sale of such goods. Thus, this section is applicable only qua the person who is the manufacturer of the goods and charges something extra for some additional activity done prior the sale of the goods manufactured by him. It is already confirmed on record that the activity done by the appellant does not amount to manufacture. It has also been held and confirmed that appellant is not the manufacturer of the goods sold by him - irrespective the method of how those products are manufactured by the manufacturer, the activity done by the appellant before putting those products to the actual consumers are not held to be the activity of manufacture. The question of the activity of the appellant to be excisable does not at all arise. Nothing additional is brought on record to have the different opinion. Hence, these findings are affirmed. Hence, even for sake of Section 4, the value for the appellant s activity cannot be included in the value of the excisable goods. Otherwise also, the duty liability on excisable goods is that of the manufacturer. It is an admitted fact on record that the manufacturer i.e. M/s. Davo Laboratories nor M/s. Balchem Laboratories are authorized have discharged their respective eligible liability. No question for sustaining the demand even under Section 4 at all arises. Though the department has relied upon the decision in M/s. Davo Laboratories own case in a departmental appeal titled as Commissioner of Central Excise, Bhopal Vs. Davo Laboratories [ 2016 (11) TMI 7 - CESTAT NEW DELHI ], wherein the Ayurvedic Preparations Roop amrit and Complete Solutions are denied to be considered as Ayurvedic medicines on the ground that both the products are most commonly used for enhancing personal appearance and beauty i.e. cosmetic. The said decision is not applicable as far as duty liability on these products qua the appellant under Section 4 of Central Excise Act is concerned. The demand confirmed even under Section 4 of Central excise Act, 1944 set aside - appeal allowed. 2024 (4) TMI 468 CENVAT Credit - inputs or not - MS angles, shapes, sections and channels etc., used for erection of Unipoles /hoardings which are fixed to the earth and on which the appellant/assessee displays advertisement - HELD THAT:- The issue herein is squarely covered by the precedent order in appellant s own case of this Tribunal in M/S UNI ADS LTD VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, HYDERABAD II (VICE-VERSA) [ 2019 (8) TMI 70 - CESTAT HYDERABAD] , wherein similar dispute has been held in favour of the appellant and against the Revenue. It is further found that the exclusion clause in Explanation (2) of Rule 2(k) of CCR was introduced w.e.f. 07.07.2009, vide Notification No. 16/2009- CE. From plain reading of the exclusion clause, it is evident that exclusion is applicable in case of a manufacturer having a factory and such exclusion is not applicable in the case of the appellant who is a provider of output services. The impugned order is set aside - appeal allowed. CST, VAT & Sales Tax 2024 (4) TMI 467 Rejection of branch transfer / Stock transfer of Goods - movement of the goods from the manufacturing unit of the respondent at Navi Mumbai in the State of Maharashtra to the branch offices in other States - sale taking place during the course of inter-State trade or commerce or whether it was a case of branch transfer by the respondent to its branches at Ahmedabad, Delhi, Coimbatore, Bangalore, Chennai, Cochin, Hyderabad and Visakhapatnam? - burden of proof - HELD THAT:- What transpires from the decision of the Supreme Court in Hyderabad Engineering [ 2011 (3) TMI 1427 - SUPREME COURT] is that for a sale to be in the course of inter-State trade or commerce under section 3(a), there must be a sale of goods and such sale should occasion the movement of the goods from one State to another. To find out whether a particular transaction is a inter-State sale or not, it is essential to see whether the movement of the goods from one State to another is a result of a prior contract of sale. Under section 6A, if the dealer claims that the movement of such goods from one State to another was occasioned by reason of transfer of such goods by him to any other place of his business and not by reason of sale, then the burden of proving that the movement of goods was so occasioned shall be on the dealer. The mode of discharge of this burden of proof has also been provided in the form of a declaration in form F . However, if the department does not take advantage of the presumption under section 3(a), but shows a positive case of sale in the course of trade or commerce to make it liable to tax under section 6, the declaration in form F under section 6A would be of no avail. When the sale or agreement to sell causes or has the effect of occasioning the movement of goods from one State to another, irrespective of whether the movement of goods is provided for in the contract of sale or not, or whether the order is placed with any branch office or any head office which resulted in the movement of goods, if the effect of such a sale is to have the movement of goods from one State to another, an inter-State sale would ensue and would result in exigibility of tax under section 3(a). The Supreme Court in Hyderabad Engineering held that when the sale has the effect of occasioning the movement of goods from one State to another irrespective of whether the movement of goods is provided for in the contract of sale or not or whether the order is placed with any branch office or head office which resulted in movement of goods, it would be a case of inter-State sale resulting in exigibility of tax under section 3A of the CST Act. In Ashok Leyland [ 2004 (1) TMI 365 - SUPREME COURT] , the Supreme Court held that where the purchaser places an order for manufacture of goods as per his specification, a presumption can be raised that agreement to sell had been entered into. MSTT was, therefore, not justified in restricting the stand of the respondent to just three transactions for which material had been placed by the State as it is not the case of the respondent that in other transactions, the process had changed. What follows from the aforesaid factual position stated by the respondent before CESTAT is that the movement of the goods had occasioned from the factory of the respondent to the branch offices because of the orders placed by the customers at the branch offices of the respondent - thus, it has to be held that the Deputy Commissioner was justified in holding that the transaction in the present case was not a case of branch transfer but of inter-State sale and MSTT committed an error in holding that except for three transactions worth Rs. 53,21,459/-, the remaining transaction would be of branch transfers. In view of the provisions of section 22B(1) of the CST Act, a direction would, therefore, have to be issued to the Deputy Commissioner to ascertain whether any additional amount is required to be deposited by the respondent and if so to recover the same from the respondent. A further direction is issued to the States to transfer the refundable amount to the State of Maharashtra - appeal allowed. Indian Laws 2024 (4) TMI 466 Sale of mortgaged (scheduled) properties which was to be conducted by the Authorized Officer (Respondent No.2) of the Respondent-Bank - default in repayment of loan by the Borrower - HELD THAT:- This Court has clearly held that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. It has been held that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. The Court clearly observed that, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by this Court. In the present case, it can clearly be seen that though it was specifically contended on behalf of the appellant herein that the writ petition was not maintainable on account of availability of alternative remedy, the High Court has interfered with the writ petition only on the ground that the matter was pending for sometime before it and if the petition was not entertained, the Borrower would be left remediless - the High Court has failed to take into consideration the conduct of the Borrower. It is further to be noted that, though the High Court had been specifically informed that, on account of subsequent developments, that is confirmation of sale and registration thereof, the position had reached an irreversible stage, the High Court has failed to take into consideration those aspects of the matter. The High Court ought to have taken into consideration that the confirmed auction sale could have been interfered with only when there was a fraud or collusion. The present case was not a case of fraud or collusion. The effect of the order of the High Court would be again reopening the issues which have achieved finality. Thus, the High Court has grossly erred in entertaining and allowing the petition under Article 226 of the Constitution - impugned order set aside - appeal allowed. 2024 (4) TMI 465 Time limitation - Refusal to condone the delay in challenging the Order passed by the Competent Authority and Administrator, SAFEM(FOP)A, 1976 and NDPS Act, 1985, New Delhi - HELD THAT:- A perusal of the judgments in CHHATTISGARH STATE ELECTRICITY BOARD VERSUS CENTRAL ELECTRICITY REGULATORY COMMISSION AND OTHERS [ 2010 (4) TMI 1031 - SUPREME COURT] and M/S. PATEL BROTHERS VERSUS STATE OF ASSAM AND OTHERS [ 2017 (1) TMI 330 - SUPREME COURT] show that if a special Act provides for a special period of limitation then Sections 4 to 28 of the Limitation Act cannot be made applicable and, therefore, there is no power in the Appellate Tribunal to condone the delay. In the facts of the present case, admittedly the last date for filing the appeal had expired on 04.08.2023 and the appeal was filed on 20.09.2023 and, therefore, the Appellate Tribunal Could not have condoned the delay between 04.08.2023 and 20.09.2023. It is equally well settled that the High Courts while exercising jurisdiction under Article 226 of the Constitution of India cannot go beyond the framework of a statute. This Court does not find any reason to interfere with the Order dated 21.11.2023 passed by the Appellate Tribunal refusing to entertain the appeal filed by the Petitioner herein beyond the prescribed period of limitation. The writ petition is dismissed.
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TMI Tax Updates - e-Newsletter April 15, 2024

Articles

1. Modified ITR for Business Reorganization from June 2016 to March 2022 possible until June 30, 2024... taxpayer to communicate to JAO by 30th April 2024

2. Importance of Decision-Making information in SMEs: Harnessing the Power of Data-Driven Decision-Making

3. Characteristics and Qualities of Perfect Trademark

4. RECENT DEVELOPMENTS IN GST

5. Tax Authorities cannot retain the tax deposited under the cancelled GST registration

Notifications

1. 09/2024 - dated 12-4-2024 - CGST

Circulars / Instructions / Orders

1. GADT/PndC/APLN/4/2021-PandC - dated 3-4-2024

Highlights / Catch Notes

GST

Supreme Court Clarifies Limited Immunity for GST Officers Acting in Good Faith Under General Clauses Act.

Court Rules Pre-Deposit for Appeals Excludes Interest on Disputed Tax; Recovery Proceedings Halted Pending Resolution.

Natural Justice Breach: Order Overturned for Ignoring Petitioner's Detailed Reply, Case Sent Back for Reevaluation.

High Court Overturns CESTAT Order on Ocean Freight Tax Refund; Upholds Jurisdictional Precedence in Constitutional Matters.

Taxpayer Wins Right to Carry Forward Excess Payment as Input Tax Credit; Court Orders Reevaluation by Revenue Authorities.

Petitioner Allowed to Apply for Delay Condonation Due to Ill Health; Court Directs Evaluation of Reasons for Late GSTR-3B Filing.

GST Assessment Overturned for Violating Natural Justice; Court Orders Reconsideration with Proper Hearing.

Attachment Order Overturned Due to Procedural Error, Ensuring Petitioner's Right to Object and Personal Hearing Restored.

Income Tax

Income Tax Settlement Annulled Due to Incomplete Disclosure; ITSC Exceeded Jurisdiction, Annulled Claims and Immunity.

Tax Authority Must Reconsider Delayed Refund Claim Due to Administrative Oversights and Procedural Errors, Rules Court.

Court Strikes Down CBDT Circular Clause Extending Approval Time for Section 80G(5) as Unconstitutional and Arbitrary.

Court Rules Differential Treatment of Trusts for Section 80G Approval Unconstitutional; No Inherent Right to Extensions.

High Court rules Pr.CIT can't revise assessment orders with prior approval u/s 153D, affirming ITAT decision.

Court Voids Order Over Flawed Notice: Improper Service, Wrong Account, Bias; Petitioner Must Object Timely to Avoid Reinstatement.

Currency Exchange Business Deemed Legitimate; Tribunal Removes Cash Deposit Addition, Moots Jurisdiction Issue.

Tribunal Affirms Airport Service Deductions, Validates Government Incorporation, Upholds Concession Fee Provision Decision.

Tribunal Removes Tax Penalty Against Minor, Citing Lack of Guardian Consent and No Additions in Quantum Proceedings.

Tribunal Overturns PCIT's Section 263 Jurisdiction; Original Assessment Order Reinstated, No Errors Found.

Tribunal Recognizes Triplex Flat as Single Residential Unit, Overturning Tax Exemption Rejection by Assessing Officer.

Tribunal Confirms Cooperative Society Can Deduct Interest Income from Investments with Cooperative Banks u/s 80P.

Appeal Dismissed: Tribunal Enforces Strict Time Limits, Rejects 68-Day Delayed Filing Due to Lack of Justification.

Customs

Tribunal Remands Case for New Hearing Due to Procedural Injustices in Mis-declaration, Undervaluation of Goods.

Tribunal Allows Amendment of Bills for Duty Refunds; Criticizes Lower Authorities for Ambiguity in Customs Duty Reclassification.

Tribunal Rules Currency in Baggage as Goods; Lacks Jurisdiction on Appeals Involving Baggage Goods Import/Export.

Tribunal Rules on Re-Export Failure: Appellant Must Repay Drawback with Interest Despite Intention to Re-Export.

Tribunal Rules Imported Korean Gold Coins Exempt from Customs Duty Under Comprehensive Economic Partnership Agreement.

Corporate Law

Lease Deed Voided by Tribunal for Violating Company Laws Despite Ongoing Civil Court Case; Jurisdiction Dispute Rejected.

Appellate Tribunal Rules NCLT Exceeded Authority on Arbitration Agreement and Share Ownership Dispute.

Indian Laws

Court Upholds Tribunal's Decision, Rejects Late Appeal Due to Missed Deadline and Lack of Justification.

Court Rules Confirmed Sale of Mortgaged Property Valid; Borrower's Redemption Rights Extinguished, No Fraud Found.

IBC

Tribunal Dismisses Homebuyers' Petition for Non-Compliance with Insolvency Code's Threshold Requirements.

Corporate Guarantor Faces Insolvency Process as Tribunal Rejects Forgery Claims; Past Consideration Validates Guarantee.

Service Tax

Petitioner's Duty Liability Acknowledged Before Deadline; Court Rules Final Audit Report Date Irrelevant to Declaration Validity.

Cargo Space Transactions Ruled as Sales, Not Taxable Services, Overturning Tax Demands on Appellant's Activities.

Appellate Tribunal Rules Sponsorship Services for Sports Events Exempt from Tax, Dismisses Tax Demand.

VAT

Tribunal Overturns Tax Demand, Emphasizes Need for Specific Evidence in Stock Transfer Cases.

Case Laws:

GST

Income Tax

Customs

Corporate Laws

Insolvency & Bankruptcy

PMLA

Service Tax

Central Excise

CST, VAT & Sales Tax

Indian Laws

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TMI Tax Updates - e-Newsletter
April 15, 2024