TMI Tax Updates - e-Newsletter
April 29, 2025

Case Laws in this Newsletter:

GST Income Tax Service Tax

TMI Short Notes

1. Determination of tax liability which no tax is payable under the provisions of the Act : Clause 190 of the Income Tax Bill, 2025 Vs. Section 110 of the Income-tax Act, 1961

  Bills:

2. Definition for the operation of the General Anti-Avoidance Rule (GAAR) : Clause 184 of Income Tax Bill, 2025 Vs. Section 102 of Income-tax Act, 1961

  Bills:

3. Legislative tool curbing aggressive tax planning and abusive tax avoidance Scheme : Clause 183 of the Income Tax Bill, 2025 Vs. Section 101 of the Income-tax Act, 1961

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4. Procedural Safeguards and the Scope of GAAR : Clause 183 of Income Tax Bill, 2025 Vs. Section 100 of Income-tax Act, 1961

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5. Curbing aggressive tax avoidance strategies : Clause 182 of the Income Tax Bill, 2025 Vs. Section 99 of the Income-tax Act, 1961

  Bills:

6. Continuation and refinement of the General Anti-Avoidance Rule : Clause 181 of the Income Tax Bill, 2025 Vs. Section 98 of the Income-tax Act, 1961

  Bills:

7. Statutory backbone of India's General Anti-Avoidance Rule (GAAR) : 180 of the Income Tax Bill, 2025 Vs. Section 97 of the Income-tax Act, 1961

  Bills:

Articles

1. Detention of Goods & Provisional Release Process under Section 129

   By: Lokesh Aggarwal

2. LOAN AGAINST FIXED INCOME – NOT A BUSINESS INCOME

   By: DR.MARIAPPAN GOVINDARAJAN

3. Legal Consequences of Ignoring Pvt. Ltd ROC Filing Requirements

   By: Ishita Ramani

4. Inverted Duty Structure (IDS) under GST: How to Claim Refund

   By: YAGAY andSUN

5. Moradabad Brass Products/Handicrafts - Lets buy it to support our Artisans.{VOCAL for LOCAL}[One District One Product]

   By: YAGAY andSUN

6. High Court Slams GST Department Over Denial of Hearing: Upholds Natural Justice in Merino Industries Case

   By: YAGAY andSUN

7. Andhra Pradesh High Court Rules in Favor of Dodla Dairy: Flavoured Milk Classified under Tariff Heading 0402, Not 2202

   By: YAGAY andSUN

8. Jaisalmer Handicraft Items:  Let’s Buy it to Support our Artisans.[Vocal for Local]{One District One Product}

   By: YAGAY andSUN

9. Dhokra Art – Let’s Buy it to Support our Tribal Artisans[Vocal for Local][One District One Product]

   By: YAGAY andSUN

10. Glass handicraft ProductsVocal for LocalOne District One Product (ODOP)

   By: YAGAY andSUN

11. 🚦 New Rules for Radar Speed Measurement Equipment

   By: YAGAY andSUN

12. ✅ ISO 45001: Occupational Health and Safety Management Systems

   By: YAGAY andSUN

13. ISO 14001: Environmental Management System (EMS)

   By: YAGAY andSUN

14. ISO 50001 Energy Management Systems (EnMS).

   By: YAGAY andSUN

News

1. Auction for Sale (re-issue) of (i) ‘6.64% Government Security 2027’ and (ii) ‘New Government Security 2035’

2. India and Bhutan hold 6th Joint Group of Customs (JGC) Meeting in Thimphu, Bhutan, on 24th-25th April 2025

3. Building a robust ecosystem for Green and Sustainable Finance in India (Valedictory address delivered by Shri M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India - April 17, 2025 - at Credit Summit 2025 organised by the Bharat Climate Forum at New Delhi)

4. With China and US at intense economic odds, nations are being forced to choose sides

5. India: A partner in progress and prosperity (Keynote Address by Shri Sanjay Malhotra, Governor, Reserve Bank of India - April 25, 2025 - at the US-India Economic Forum organised by the Confederation of Indian Industry (CII) and US India Strategic Partnership Forum (USISPF), Washington DC)

6. Prime Minister Shri Narendra Modi addresses participants during 15th tranche of Rozgar Mela held simultaneously at 47 locations nationwide through Video Conferencing

7. APEDA and the Government of Odisha organises Capacity Building Programme to ‘Boost Agricultural Exports from Odisha’ in Bhubaneswar

8. India Led with Compassion During COVID-19, Sharing 300 Million Vaccines Globally: Union Minister of Commerce & Industry Shri Piyush Goyal

9. BJP MP Hema Malini demands special economic package for better infra in Mathura

10. Compelling need for ending tax terrorism, brazen corporate favouritism: Cong on World Bank report

11. Sharpening inequality now firmly embedded in nature of country's economic growth: Cong

12. Income Tax employee, mastermind of extortion-cum-dacoity, held after over a year on the run

13. Delhi court sends I-T Dept officer, CA to 3-day custody for 'sabotaging' faceless assessment scheme

Notifications

GST - States

1. G.O.Ms.No.108 - dated 28-3-2025 - Andhra Pradesh SGST

State Tax Notification for waiver of the late fee

2. G.O.Ms.No.107 - dated 28-3-2025 - Andhra Pradesh SGST

Andhra Pradesh Goods and Services Tax (Amendment) Rules, 2025

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/57 - dated 28-4-2025

Timelines for collection of Margins other than Upfront Margins – Alignment to settlement cycle

GST - States

2. TRADE CIRCULAR No. 11/2025 - dated 28-4-2025

Various issues related to availment of benefit of Section 128A of the WBGST Act, 2017

Customs

3. Instruction No. 06/2025 - dated 26-4-2025

Closing of the Integrated Check Post Attari for all types of incoming and outgoing passengers and movement of goods

Highlights / Catch Notes

GST

• Interim Relief Granted: Tax Notifications Challenged on Natural Justice Grounds, Coercive Actions Restrained

  Case-Laws - HC : HC granted interim relief to petitioner challenging tax notifications, restraining respondents from taking coercive action. The court found a prima facie case of violation of natural justice principles due to non-service of show cause notice and denial of personal hearing. Multiple high courts have divergent views on the validity of the notifications, with some striking them down and others upholding them. The Supreme Court is currently adjudicating related matters. Interim protection was granted, directing respondents not to take adverse actions against the petitioner pending final resolution of the legal issues.
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• Legal Proceedings Against Deceased Person Invalidated: Show Cause Notice Quashed Due to Procedural Irregularities Under Rule

  Case-Laws - HC : HC ruled that proceedings initiated against a deceased person are legally invalid. The show cause notice and subsequent order issued to the deceased proprietor were procedurally incorrect, as legal proceedings cannot be commenced against a deceased individual. The court held that while authorities may proceed against legal representatives, the existing proceedings were fundamentally flawed. The writ petition challenging the notice was consequently allowed, rendering the entire proceeding from the show cause notice stage null and void. The decision emphasizes the principle that legal actions must be directed appropriately and cannot be sustained against a deceased person's estate without proper legal representation.
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• Legal Challenge Succeeds: GST Seizure Invalidated Due to Lack of Substantive Evidence and Procedural Gaps

  Case-Laws - HC : HC allowed the petition challenging goods seizure during transit. The court found no legal basis for seizure under GST Act, as authorities failed to establish tax evasion intent or document discrepancies. The goods were being transported from Meerut to Kanpur, intercepted at Basti solely due to an alternate route, without any substantive evidence of procedural violations. The court emphasized that absent specific statutory provisions mandating route declaration, the seizure was unwarranted. All accompanying documents were verified as genuine in quality and quantity, further invalidating the administrative action. The ruling underscores procedural propriety and protects taxpayer rights against arbitrary administrative interventions.
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• Ex Parte Tax Assessment Invalidated: Procedural Defect in Notice Service Violates Natural Justice Principles, Order Set Aside

  Case-Laws - HC : HC set aside ex parte assessment order due to violation of natural justice principles. The order was passed without proper service of show cause notice, as notices were uploaded in an obscure portal column rendering them effectively unnoticed by the petitioner. The Deputy Commissioner's rejection of appeal on limitation grounds was overruled. The HC remanded the matter for fresh consideration, with the petitioner willing to pay 15% of disputed tax. The procedural defect in service of notice fundamentally invalidated the original assessment, ensuring the petitioner's right to fair hearing was reinstated.
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• Tax Appeal Dismissed: Strict Adherence to Limitation Period Bars Judicial Review Under Statutory Remedy Provisions

  Case-Laws - HC : HC dismissed the writ petition challenging tax assessment orders, finding the appeal time-barred under the 2017 Act. The appellate authority correctly rejected the appeal filed beyond the prescribed limitation period, with no power to condone delay beyond one month. Relying on Supreme Court precedent, the HC held that where statutory remedy is foreclosed by limitation, judicial review under Article 226 is impermissible. The petitioner failed to demonstrate jurisdictional error or violation of natural justice principles, resulting in outright dismissal of the petition.
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• GST Exemption for Rice Milling By-Products: Conversion Charges and Estimated Value Not Considered Taxable Consideration

  Case-Laws - HC : HC ruled that GST cannot be levied on the value of by-products (broken rice, husk, and bran) generated during paddy milling for public distribution system (PDS). The court applied precedent from a prior case (Shiridi Sainath Industries) and determined that the conversion charges and estimated value of by-products do not constitute taxable consideration. The impugned assessment orders dated 25.10.2024 and 24.10.2024 were consequently set aside, effectively exempting the milling service provider from GST on retained by-products.
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• Legal Victory: Tax Evasion Arrest Upheld, Bail Granted After Careful Review of Procedural Compliance and Cooperation

  Case-Laws - DSC : DSC ruling on petitioner's lawful arrest in tax evasion matter. Despite allegations of procedural irregularities, court found arrest memo valid, with proper grounds explained to accused and her father. Authorization order under Section 69 was signed by accused and witnesses. Court determined further judicial custody unnecessary, noting revenue adequately secured and accused's willingness to cooperate. Considering gender and nature of offense, bail application granted, allowing petitioner's release, with understanding that investigation may continue. Arrest deemed legally sound, but continued detention deemed unwarranted.
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Income Tax

• Tax Exemption for Mysore Palace Board Under Section 10(46) Covers Specified Income Sources with Strict Non-Commercial Compliance

  Notifications : The GoI notification under Section 10(46) of IT Act 1961 exempts 'Mysore Palace Board' from income tax for specified income sources, including palace property proceeds, board fees, government agency rent, and bank deposit interest. The exemption is conditional upon the board not engaging in commercial activities, maintaining consistent income nature, and filing income returns. The notification applies retrospectively for AY 2024-25 to 2025-26 and prospectively for AY 2026-27 to 2028-29, covering FY 2023-24 to 2027-28. The board's tax exemption is subject to strict compliance with specified conditions and maintains the organization's non-commercial status.
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• Tax Reassessment Upheld: Undisclosed Offshore Transactions Trigger Reopening of Assessment Under Section 147

  Case-Laws - HC : HC upheld tax reassessment proceedings for AY 2009-2010, finding valid jurisdictional grounds for reopening assessment. The court determined that information about bogus loan transactions routed through tax haven entities was obtained post original assessment, justifying reopening under Section 147. The petitioner's failure to disclose material facts about circuitous fund transfers through offshore companies in Cyprus and Mauritius constituted sufficient reason for reassessment. The HC rejected challenges to reassessment, emphasizing the revenue's objective to bring escaped income to tax, and dismissed the petition challenging the reassessment notice.
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• Taxpayer Challenge Dismissed: Valid Reassessment Proceedings Upheld Under Existing Statutory Provisions

  Case-Laws - HC : HC upheld the reassessment proceedings against the taxpayer, finding the AO's reopening of the assessment valid. The court determined that the statutory provisions do not mandate the AO to explicitly point out the assessee's default at the notice stage. The procedural requirements were followed, including furnishing reasons upon request and allowing objections. The court rejected challenges to the reassessment, emphasizing that the procedural steps were consistent with established judicial precedents. The impugned orders were sustained, with the court noting the lower court's non-speaking order was vulnerable but ultimately maintaining the reassessment notices.
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• Tax Authorities Must Accept Revised Return When Legitimate Compensation Received After Original Filing Prevents Timely Disclosure

  Case-Laws - HC : HC allowed the petition challenging tax authorities' rejection of revised income tax return. The court found that the petitioner received land acquisition compensation after the original return filing, which prevented timely disclosure. The authorities failed to consider the compensation was tax-exempt and the petitioner was legitimately prevented from including it in the original return. The HC quashed the previous order and directed tax authorities to condone the delay in filing the revised return and process it in accordance with law, ensuring the petitioner can claim TDS refund.
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• Jewellery Seizure Invalidated: Tax Authorities Ordered to Immediately Release Improperly Detained Assets Without Conditions

  Case-Laws - HC : HC held that respondents must release seized jewellery immediately, as retention lacks legal authority. The seizure was deemed unauthorized since no outstanding tax liability existed for the relevant assessment year. The court found respondents' contention to retain jewellery for recovering tax dues from subsequent years untenable, particularly given statutory amendments to Section 132B effective 01.04.2022. Consequently, the HC directed unconditional release of the jewellery to the petitioner, emphasizing the respondents acted without jurisdiction in prolonged retention beyond the specified assessment period.
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• Reopening of Tax Assessment Upheld: Valid Notice Issued Within Prescribed Limitation Period Under Section 148A(b)

  Case-Laws - HC : HC dismissed the writ petition, holding that the Assessing Officer (AO) had valid jurisdiction to reopen assessment for 2020-21. The AO issued notice u/s 148A(b) on 28.03.2024, which was within the prescribed three-year limitation period. The court found that the first notice dated 28.03.2024 was crucial for determining the limitation timeline, and the subsequent notice on 22.04.2024 was immaterial. The petition was deemed premature, with liberty granted to the petitioner to participate in the assessment proceedings and cooperate with the revenue authorities.
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• Legal Battle Over Capital Gains: Partner's Land Exemption Upheld, Firm Taxed Only on Owned Structures and Machinery

  Case-Laws - AT : ITAT partially allowed revenue's appeal. The tribunal upheld that additional evidence was admitted in violation of Rule 46A, but this did not materially impact the case's outcome. The land in question belonged to a partner, not the firm, thus long-term capital gains could not be charged to the firm. The tribunal directed the AO to compute gains only from building structures and plant machinery owned by the firm. The assessment proceedings were found valid, and the cross-objections were dismissed. The ultimate relief granted to the assessee was maintained, with the revenue's appeal being partly allowed on procedural grounds.
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• Tax Dispute Resolved: ITAT Scrutinizes Unexplained Expenditures, Validates Loans, and Reduces Disputed Financial Entries

  Case-Laws - AT : ITAT adjudicated multiple tax-related issues involving unexplained expenditures and financial transactions. The tribunal comprehensively examined seized documents, bank deposits, and unsecured loans. Key holdings include: deletion of additions related to a third-party diary and bank deposits recorded in the assessee's balance sheet; rejection of revenue authorities' claims of unexplained sources. Regarding unsecured loans, ITAT found the loans genuine based on provided affidavits, despite lenders' non-response to notices. Partial confirmations were made for unexplained expenses in seized documents and agricultural expenditure, where the assessee failed to substantiate alternative explanations. The tribunal substantially reduced the original additions made by the Assessing Officer, providing nuanced relief to the assessee across various contested financial entries.
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• Retailers' Incentives Upheld: No TDS Liability Found as Genuine Business Expenditure Confirmed by Tribunal Ruling Decision

  Case-Laws - AT : ITAT allowed the taxpayer's appeal, rejecting the AO's disallowance of commission and sales incentives. The tribunal found no principal-agent relationship exists between the company and retailers, rendering TDS provisions under section 194H inapplicable. The tribunal emphasized that the AO erroneously questioned the expenditure's genuineness based on outdated inquiries conducted years after the relevant financial year. The tribunal concluded that the taxpayer provided sufficient documentary evidence, including party confirmations, to substantiate the expenditure's authenticity. Consequently, the tribunal overturned the AO's disallowance and held that the expenditure was legitimate and not a tax avoidance mechanism.
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• Foreign Company Can Offset Permanent Establishment Losses Against Technical Services Income Under Section 71 of Income Tax Act

  Case-Laws - AT : ITAT ruled that a foreign company with Permanent Establishment (PE) in India can set off PE losses against Foreign Technical Services (FTS) income under section 71 of the Income Tax Act. Despite section 115A(3) restricting expenditure deductions, the tribunal found no explicit prohibition on loss set-off. The assessee is permitted to adjust inter-head income streams, as both income sources fall under the business category. The decision relies on treaty interpretation principles and allows the taxpayer to apply beneficial provisions of the domestic tax law in the absence of specific treaty provisions governing loss set-off.
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• Transfer Pricing Dispute Resolved: ITAT Mandates ALP Recalculation and Comparables Adjustment Under Precise Procedural Guidelines

  Case-Laws - AT : ITAT adjudicated transfer pricing dispute, directing significant procedural adjustments. The tribunal found computational discrepancies in Arm's Length Price (ALP), mandating TPO to recalculate transfer pricing adjustment of INR 11,96,41,940. Specifically, ITAT instructed exclusion of MPS Limited from comparables list due to functional dissimilarities and directed inclusion of R. Systems International Limited after functional comparability assessment. Additionally, the tribunal mandated AO to grant full credit for Dividend Distribution Tax (DDT) upon verification of submitted challans and recompute potential interest under Section 115P, effectively resolving multiple taxation-related contentions through precise administrative directions.
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Customs

• Travelers Can Carry Limited Agarwood Products Internationally Without Export Permits Under CITES Resolution Conf.13.7

  Circulars : The CBIC issued Instruction No. 05/2025-Customs clarifying CITES regulations for international travelers carrying agarwood products. Per CITES Resolution Conf.13.7 (Rev.CoP17), individuals may transport personal effects including up to 1 kg wood chips, 24 ml oil, and two sets of beads/prayer beads from Appendix II species without requiring export permits. Customs authorities are instructed to sensitize officers about these allowable limits for dead specimens, parts, or derivatives of agarwood products during international travel, ensuring compliance with international wildlife trade regulations while facilitating personal transportation of specified quantities.
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PMLA

• Govt Amends PMLA to Empower Indian Cyber Crime Coordination Centre with Enhanced Financial Intelligence Sharing Powers

  Notifications : The GoI issued a notification amending the Prevention of Money-laundering Act (PMLA) notification from 2006 by inserting a new entry (27) to include the Indian Cyber Crime Coordination Centre (I4C) as an authorized entity for information sharing under section 66(1)(ii). The amendment enables I4C to access and exchange financial intelligence data, expanding the scope of information sharing mechanisms in combating financial crimes and cyber-related money laundering activities. The modification was made by the Ministry of Finance, Department of Revenue, with the directive that such information exchange is necessary in public interest.
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Service Tax

• Service Tax Assessment Order Invalidated Due to Excessive Time Delay Beyond Statutory One-Year Limitation Period

  Case-Laws - HC : HC ruled that the service tax assessment order issued after a substantive delay of five years and ten months was time-barred under Section 73(4B) of the Finance Act, 1994. The Revenue failed to demonstrate exceptional circumstances justifying the prolonged delay beyond the prescribed one-year limitation period. Consequently, the impugned order imposing service tax liability, interest, and penalty was quashed, with the court emphasizing that the statutory time limitation cannot be arbitrarily extended without compelling justification. The application challenging the delayed assessment was allowed, effectively nullifying the tax demand.
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Case Laws:

• GST

• 2025 (4) TMI 1524
  Seeking quashing of impugned order - GST levy on mining activity effective 01.07.2017 - HELD THAT:- Counsel on behalf of both the parties are agreed that the present impugned order dated January 25, 2025 may be quashed and the matter may be remitted to the Adjudicating Authority for granting an opportunity of hearing to the petitioner to place its case before the Adjudicating Authority. The impugned order dated January 25, 2025 is quashed and set-aside with a direction upon the Adjudicating Authority to pass a fresh order in accordance with law, after granting an opportunity of hearing to the petitioner - Petition disposed off.

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• 2025 (4) TMI 1523
  Levy of GST - clear case of employer-employee relationship, which is apparent from the application of the provisions relating to employees under the Income Tax Act, 1961 - HELD THAT:- As only a show cause notice has been issued, the petitioner can raise all pleas and contentions before the authority which had issued the show cause notice. The same will be examined effectively and fairly. Application disposed off.

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• 2025 (4) TMI 1522
  Extension of time limit for issuance of Show Cause Notice (SCN) - Violation of principles of natural justice - alleged non-service of the show cause notice and denial of personal hearing - Challenge to N/N. 56/2023-Central Tax dated 28th December 2023 and N/N. 56/2023-State Tax dated 16th January 2024 issued u/s 168A of the Central Goods and Services Tax Act, 2017 (CGST Act) read with Section 168A of the Maharashtra Goods and Services Tax Act, 2017 - HELD THAT:- The issues raised in this Writ Petition are pending adjudication in several other Writ Petitions, including Writ Petition No. 5146 of 2024 [ 2025 (3) TMI 173 - BOMBAY HIGH COURT] and Writ Petition No.5471 of 2024 [ 2025 (3) TMI 250 - BOMBAY HIGH COURT] . Hon ble Gauhati High Court has in fact already struck down these Notifications. Though on this issue, the Telangana High Court has held in favour of the Petitioner before it, the Telangana High Court came to the conclusion that because of the order of the Hon ble Supreme Court in Re-Cognizance for extension of limitation [ 2022 (1) TMI 385 - SC ORDER] , the assessment was not time barred. This order of the Telangana High Court has been challenged before the Hon ble Supreme Court, and which is pending adjudication. Once these are the facts, the Petitioner has not only made out a case for admission but also for grant of interim relief. As far as interim relief is concerned, that in similar matters (including one before the Nagpur Bench of this Court), this Court has directed the Respondents not to take coercive action against the Petitioner. Here also, since one of the issues is whether the Notifications dated 28th December 2023 and 16th January 2024 are valid or otherwise, and whether the impugned order could have been passed [especially if the said Notifications are set aside], there is a strong prima facie case is made out for granting interim relief to the Petitioner. Conclusion - The show cause notice was never properly served on the Petitioner and the impugned order has been passed without giving a personal hearing to the Petitioner. Hence, there is a clear breach of principle of natural justice which itself makes the impugned order vulnerable to challenge. Petition disposed off.

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• 2025 (4) TMI 1521
  Challenge to order passed under section 73 of the GST Act as well as the order dated 02.12.2024 whereby the appeal was decided without giving any opportunity of hearing - violation of principles of natural justice - HELD THAT:- Finding both the orders to non-compliance of mandatory requirement of under Section 75(4) of the GST Act, as such, both orders dated 27.12.2023 and 02.12.2024 are quashed. The matter is remanded to the assessing authority to pass a fresh order in accordance with law after giving an opportunity of hearing. Petition allowed.

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• 2025 (4) TMI 1520
  Violation of principles of natural justice - no opportunity of hearing was granted prior to passing of the order under section 73 of the Act - dismissal of appeal on the ground of time limitation - HELD THAT:- The said cannot be termed as compliance of the mandatory requirement under section 75(4) of the GST Act. This issue is also covered by the judgment of this court in the case of Mahaveer Trading Company vs. Deputy Commissioner, State Tax and Anr. [ 2024 (3) TMI 334 - ALLAHABAD HIGH COURT] where it was held that the impugned order was passed in gross violation of fundamental principles of natural justice by denying the petitioner an opportunity of hearing. The matter is remanded to the assessing authority to pass a fresh order in accordance with law after giving an opportunity of hearing - Petition allowed by way of remand.

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• 2025 (4) TMI 1519
  Violation of principles of natural justice - no opportunity of hearing was granted prior to passing of the order under section 73 of the Act - dismissal of appeal on the ground of time limitation - HELD THAT:- The said issue with regard to grant of personal hearing was dealt with in Bharat Mint and Allied Chemicals vs. Commissioner Commercial Tax [ 2022 (3) TMI 492 - ALLAHABAD HIGH COURT] where it was held that the impugned order dated 9.11.2021 could not be sustained due to the lack of a proper opportunity of personal hearing . The matter is remanded to the assessing authority to pass a fresh order in accordance with law after giving an opportunity of hearing - Petition allowed by way of remand.

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• 2025 (4) TMI 1518
  Seeking clarification from the Chief Secretary of the State of Goa, taking note of the conundrum as to whether the refund should come from the Department of Customs or the State Tax Department - HELD THAT:- The desired clarification dated 15.04.2025 under the signature of the Chief Secretary received, where it is categorically stated by him that the Deputy Commissioner of State Tax, Panaji Ward is the Refund Sanctioning Authority (RSA) in respect of all registered taxable persons under the jurisdiction of Panaji Ward. The Chief Secretary has also set out the procedure to be followed by referring to the circular issued by the Government of India, Ministry of Finance, Department of Revenue. The prompt action on the part of the Chief Secretary, Government of Goa is appreciated as now clarity can be accorded to the grievance of the Petitioner. The Application filed online today in terms of the procedure that has been set out in the circular dated 18.11.2019 issued by the Government of India, we expect the Deputy Commissioner of State Tax i.e. Respondent No. 1 to decide the said Application within a period of eight weeks from today - petition disposed off.

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• 2025 (4) TMI 1517
  Initiation of proceedings and issuenace of SCN against a deceased person - Liability of legal representative u/s 93 - HELD THAT:- It is clear from the facts that the show cause notice and order both were uploaded on the portal and the same, was accordingly, not known to the legal heirs of the proprietor of the firm. The wife of Mr. Surendra Kumar has also expired and the writ petitioner, who is the son of Mr. Surendra Kumar, has filed this writ petition challenging the show cause notice and order on the ground that the same were passed against a person who was deceased. Furthermore, since information had been provided to the authorities with regard to death of the deceased person, the very initiation of the show cause notice was bad in law. It is inherent that proceedings cannot be initiated against a person who is deceased. Thus, proceedings cannot be initiated against the legal heirs of the deceased or against the estate of the deceased. However, it was open to the authorities to proceed in proper manner against the legal representative/heirs of the deceased proprietor and having failed to do so, the entire proceedings initiated from the stage of show cause notice is bad in law. Conclusion - The proceedings cannot be initiated against a person who is deceased. Also, proceedings cannot be initiated against the legal heirs of the deceased or against the estate of the deceased. Petition allowed.

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• 2025 (4) TMI 1516
  Cancellation of Petitioner s Goods and Service Tax registration retrospectively with effect from 01st July, 2017 - HELD THAT:- Considering the nature of the matter and the reason for belated filing of returns for a few months, the retrospective cancellation would be too harsh a measure. This Court is of the opinion that the impugned order cancelling the GST registration of the Petitioner retrospectively deserves to be set side. The retrospective cancellation of the GST registration of the Petitioner is set aside - Petition disposed off.

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• 2025 (4) TMI 1515
  Belated filing of returns under Section 39 of of the WBGST/CGST Act, 2017 and the consequential effect of Section 16(4) of the said Act - HELD THAT:- Admittedly, in this case, it may be seen that having regard to the provisions contained in Section 16(4) of the said Act and the petitioner having filed the returns in form GSTR-3B beyond the due date as provided in Section 16(4) of the said Act, not only the input tax credit availed by the petitioner was reversed but the petitioner was also saddled with interest under Section 50 of the said Act. Admittedly, in this case, the returns having been filed within such extended dates, by operation of law the mischief of Section 16(4) cannot apply and accordingly, the aforesaid order dated 28th June, 2024 can no longer be enforced and the same is accordingly set aside and quashed. Petition disposed off.

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• 2025 (4) TMI 1514
  Cancellation of registration of the petitioner with retrospective effect - previous orders whereby the amendment applications were allowed, not taken note of by proper officer - Violaton of principles of natural justice - HELD THAT:- The show cause notice dated 16th June 2020 that the same has been issued on the ground that the registration has been obtained by means of fraud, willful mis-statement or suppression of facts. Unfortunately, despite the respondents from time to time allowing the amendment applications as noted above, have purported to cancel the registration of the petitioner by a cryptic order dated 17th May 2024. No reasons whatsoever had been assigned. The order impugned does not reflect the fact that the proper officer had taken note of its previous orders whereby the amendment applications were allowed. Having regard thereto, the order dated 17th May 2024 cannot be sustained and the same is accordingly set aside. The matter is remanded back to the proper officer - petition disposed off.

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• 2025 (4) TMI 1513
  Seizure of goods in transit - seizure on the ground that the goods were transported via a route different from the one disclosed in the accompanying documents - HELD THAT:- It is admitted that the goods were in transit from Meerut to Kanpur, but the same were intercepted at Basti on the ground that the goods in question are being transported on a different place than disclosed in the accompanying documents. No other discrepancy whatsoever has been pointed by the authorities at any stage of the proceedings below. Neither any finding has been recorded that the goods in question are different than mentioned in the accompanying documents. Once the authorities have failed to record any finding regarding intention of evasion of tax on the part of the petitioner and therefore, no adverse inference can be drawn against the petitioner. Further, the record shows that there is no such provision under the GST Act which empower the authorities to seize the goods if the goods in transit were on a different route. Under the GST Act, no provision has been made for declaration of the route during the transition of the goods. In absence of any such declaration, the goods ought not to have seized. The record further reveals that at the time of detention of the goods, the goods in question were in transit along with all the proper documents wherein no discrepancy whatsoever was found by the authorities and therefore, once the documents accompanied with the goods in question were found to be genuine in terms of quality and quantity, the same ought to not have been seized by the authorities. Petition allowed.

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• 2025 (4) TMI 1512
  Maintainability of petition - availability of alternative remedy - Demands due to excess availment of Input Tax Credit - levy of penalty - HELD THAT:- A perusal of the impugned order would show that there is a detailed discussion as to the nature of services which the Petitioner has provided and the reasons as to why the department is of the opinion that the higher rate of tax would be applicable. The question as to whether there was fraud and wilful-misstatement of fact on behalf of the Petitioner or not would require an analysis of the facts and various returns which were filed by the Petitioner, which cannot not be done in a writ petition - In fact the impugned order is clearly an appealable order under Section 107 of the CGST Act and the Appellant ought to be relegated to the appropriate appellate remedy so that all the issues which have been raised today can be raised before the Appellate Authority. The Court is of the opinion that the nature of the matter and the records that would be required to be perused in a challenge to the impugned order, would not be the scope in a petition under Article 226 of the Constitution of India - The Petitioner is accordingly relegated to the appellate remedy under Section 107 of the CGST Act. Petition disposed off.

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• 2025 (4) TMI 1511
  Violation of principles of natural justice - non-communication and denial of opportunity to the Petitioner - Condonation of delay in filing an appeal - Cancellation of GST registration - HELD THAT:- Under Section 107 of the Act, the limitation prescribed for challenging an order is three months from the date on which the said decision or order is communicated to the concerned persons. In the present case, however, a substantial demand has been raised against the Petitioner and for whatever reason, the Petitioner has not had an opportunity to either file a reply or to attend a personal hearing. The Petitioner ought to have been a little more cautious with the proceedings. In fact, the address of the Petitioner which is mentioned in the memo of parties is also the old place in Delhi. However, ld. counsel for the Petitioner submits that the Petitioner has now shifted to Noida. Since the grounds for seeking permission to file the appeal against the order was that the Petitioner did not have knowledge of the SCN and the subsequent proceedings arising therefrom, this Court, while exercising jurisdiction under Article 226 of the Constitution of India is of the opinion that an opportunity ought to be afforded to the Petitioner to assail the order on merits - Accordingly, let the Petitioner file an appeal before the Appellate Authority under Section 107 of the Act within a period of 30 days. Petiton disposed off.

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• 2025 (4) TMI 1510
  Waiver of pre-deposit - whether the requirements mandated in terms of Section 107 (6) of the Act for pre-deposit can be waived or not? - HELD THAT:- In terms of the provisionof Section 107, insofar as the admitted tax, interest or penalty is concerned, the entire amount would have to be deposited. In so far as the disputed amount is concerned, 10% of the tax would have to be deposited as a pre-deposit along with the appeal. The said provision does not, in the opinion of this Court, give discretion for waiver of the pre-deposit. In any event in Diamond Entertainment [ 2019 (9) TMI 1104 - DELHI HIGH COURT] in the context of the Excise Act, the Court has clearly observed that the petitioner must comply with the mandatory pre-deposit requirement to prosecute its appeal before the CESTAT. In view of the settled legal position, the prayer for waiver of pre-deposit cannot be entertained. However, if there is any amount lying with the Government entities which the Petitioner wishes to rely upon as being part of the pre-deposit, the Petitioner is free to make such a prayer before the concerned Appellate Authority. It is also submitted on behalf of the Petitioner that Rs. 20 lakhs is also lying with the Department out of a total of Rs. 64 lakhs which is to be deposited by the Petitioner. This submission may also be made before the concerned Appellate Authority. The Petitioner is accordingly relegated to the Appellate authority under Section 107 of the Act. All contentions are left open. The petition is disposed of.

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• 2025 (4) TMI 1509
  Challenge to assessment order - order of assessment for the year 2022-2023 was passed without providing sufficient opportunity to the petitioner - violation of principles of natural justice - HELD THAT:- This Court, after considering the submissions of both parties, remands the matter back to the respondent for fresh consideration. The respondent is directed to review the petitioner s case, taking into account the concerns raised regarding the TDS credit mismatch and to pass appropriate orders on merits and in accordance with law, after giving due opportunity of hearing to the petitioner, within a period of four months from the date of receipt of a copy of this order. Petition allowed.

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• 2025 (4) TMI 1508
  Impermissible multiple or triple taxation - third demand for the same taxable period - Violation of principles of natural justice - Demand of GST by state authorities while demand was already raised by Central GSt authorities - HELD THAT:- This Court finds that the impugned order was passed without proper consideration of the overlapping demand for the same period, as well as the failure to provide the petitioner with adequate notice of the order, which was issued ex-parte through the GSTN portal. Furthermore, the issue of triple taxation raised by the petitioner requires further examination. This Court concludes that the principles of natural justice were not fully adhered to and as such, the impugned order is set aside. The matter is remitted back to the respondent for a fresh consideration, including a detailed examination of the issues raised by the petitioner, such as the overlap in demand, the method of communication and the triple taxation issue. Petition allowed by way of remand.

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• 2025 (4) TMI 1507
  Period of limitation for issue of Show cause notice u/s 73 - Challenge to N/N. 56/2023- Central Tax, issued by the first respondent on 28.12.2023, G.O.(Ms)No.1 of the Commercial Taxes and Registration (B1) Department and the assessment order passed by the fifth respondent - Violation of principles of natural justice - HELD THAT:- Upon considering the submissions made by the learned counsel for the petitioner and the learned Government Advocate for the respondents 3 to 5 and having regard to the materials on record, this Court is of the view that the impugned notifications issued under Notification No.56/2023-Central Tax, dated 28.12.2023 and G.O.(Ms)No.1, dated 02.01.2024, as well as the assessment order dated 26.04.2024, are valid and issued in accordance with the provisions of the CGST Act, TNGST Act and the constitutional framework. This Court finds that the exercise of powers under Section 168A of the CGST Act and Section 168A of the TNGST Act was done appropriately, with due consideration of the exceptional circumstances. Furthermore, the respondents have acted within their jurisdiction and have not violated the principles of natural justice or the petitioner s fundamental rights under Articles 14 and 19(1)(g) of the Constitution of India. The writ petition is hereby dismissed.

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• 2025 (4) TMI 1506
  Failure to pre-deposit before filing of appeal - Reasonable cause - appeal dismissed due to non-compliance of mandatory pre-deposit requirement as prescribed under Section 107(6) of the CGST Act, 2017 - Challenge to N/N. 56/2023- Central Tax, issued by the first respondent on 28.12.2023, G.O.(Ms)No.1 of the Commercial Taxes and Registration (B1) Department, issued by the third respondent on 02.01.2024 and the assessment order passed by the fifth respondent - HELD THAT:- This Court is of the opinion that the petitioner s failure to deposit the pre-deposit amount at the time of filing the appeal was due to inadvertence. In the interest of justice, the petitioner is directed to deposit the required pre-deposit amount within a period of two weeks from the date of receipt of a copy of this order. Upon receipt of such payment, the appellate authority is directed to restore the appeal on file and pass appropriate orders on merits and in accordance with law, after giving due opportunity of hearing to the petitioner, within a period of three months thereafter. Petition disposed off.

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• 2025 (4) TMI 1505
  Seeking direction for the respondents to decide the Rectification Application under Section 16(5) of the CGST Act, 2017 - HELD THAT:- Without entering into the merits of the matter and in view of the averments made in Paragraph No.16 of the affidavit-in-reply filed on behalf of the respondents, the petition is disposed of so as to enable the Respondents to process the Rectification Application filed by the petitioner as per the provision of Section 16(5) of the CGST Act, 2017. The petition is accordingly disposed of at this stage.

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• 2025 (4) TMI 1504
  Condonation of delay of 108 days in filing the appeal against the assessment and rectification orders - HELD THAT:- In the present case, as rightly contended by the learned counsel for the respondents that nothing prevented the petitioner from filing an appeal immediately after passing of the assessment order. But on the other hand, the learned counsel for the petitioner submitted that in case the rectification petition was considered, there is no need for the petitioner to file an appeal. This Court is of the view that the reasons assigned by the petitioner for the delay in filing the appeal appears to be genuine. Hence, this Court is inclined to set aside the impugned order passed by the 1st respondent dated 13.03.2025 and condone the delay of 108 days in filing the Appeal before the 1st Respondent. Petition disposed off.

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• 2025 (4) TMI 1503
  Service of SCN - Challenge to order passed by the respondent u/s 73 of the CGST /TNGST Act, 2017, along with the summary of order - impugned order were not uploaded under the usual column, View Notices and Orders, but under different column, View Additional Notices and Orders - Violation of principles of natural justice - HELD THAT:- Admittedly, there is no dispute on the aspect that the impugned Assessment Order passed by the respondent dated 26.04.2023 is an ex parte order, as the petitioner has not been heard before passing the same, since, all the notices/communications, which culminated in the impugned assessment order have been merely uploaded in the GST Portal through on-line service that too, not under the usual column, View Notices and Orders, but under different column, View Additional Notices and Orders , therefore, neither the petitioner nor the erstwhile Chartered Accountant was aware of such notices being uploaded under the said different column, however, upon verification of the Portal by a new Chartered Account, it was informed to the petitioner that various notices and orders were issued by the respondent herein, immediately thereafter, the petitioner has instructed his Chartered Accountant to prefer Appeal against the impugned order. However, when the petitioner challenged the impugned assessment order and preferred Appeal, the Deputy Commissioner dismissed the Appeal on the ground that the same has been filed beyond the condonable period of limitation, which necessitated the petitioner to approach this Court. This Court is inclined to set aside the impugned assessment order passed by the respondent/assessing officer, as the same suffers from violation of principles of natural justice. Thus, once the order is passed in violation of principles of natural justice, this Court cannot impose any condition. However, considering the fact that the petitioner is also ready and willing to pay 15% of the disputed tax, in the event, the impugned assessment order is set aside - the matter is remanded to the respondent for fresh consideration. Petition allowed.

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• 2025 (4) TMI 1502
  Violation of principles of natural justice - non-communication of show cause notices and absence of personal hearing - HELD THAT:- There is no dispute on the aspect that notices, which culminated in the impugned order were merely uploaded in the GST portal, which were unnoticed by the petitioner as the petitioner had no occasion to view the Portal then and there, hence, the petitioner could not file reply or appear for the personal hearing. However, the first respondent passed the impugned orders without even affording any opportunity of hearing to the petitioner, which are nothing but an ex parte order, as the same suffers from violation of principles of natural justice. Thus, once the orders are passed in violation of principles of natural justice, this Court cannot impose any condition requiring the petitioner to make any deposit, however, considering the fact that 22% of the disputed tax has already been paid by the petitioner and the petitioner has voluntarily come forward to deposit Rs. 15,000/-, this Court is inclined to set aside the impugned order and remand the matter for fresh consideration. Petition allowed.

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• 2025 (4) TMI 1501
  Legality, validity and propriety of order - appeal dismissed on the ground of time limitation - Power of the appellate authority to condone the delay - HELD THAT:- In the instant case, as per the facts submitted by the petitioner in memo of writ petition, the appeal against the assessment orders dated 13.06.2023 19.05.2023 was filed on 26.10.2023, which is admittedly beyond the period of limitation prescribed under the Act of 2017. Nowhere, it has been stated in the memo of petition by the petitioner that at any point of time, request was made by the petitioner for condoning the delay. Even otherwise, in view of Section 107 (4) of the Act of 2017, the Appellate Authority had no power to condone the delay, after expiry of one month beyond the prescribed period of limitation. Hence, the Appellate Authority has rightly rejected the appeal filed by the petitioner after expiry of the limitation period prescribed under the Act. It would also be relevant to refer the judgment delivered by the Hon ble Apex Court in the case of Assistant Commissioner (CT) LTU, Kakinanda Ors. Vs. Glaxo Smith Kline Consumer Health Care Limited, [ 2020 (5) TMI 149 - SUPREME COURT ], where the question before the Hon ble Apex Court was as to whether the High Court could have entertained the writ petition under Article 226 of the Constitution of India on the ground that the statutory remedy of appeal against that order stood foreclosed by law of limitation. The Hon ble Supreme Court after examining the question with regard to the maintainability of the writ petition after expiry of statutory limitation period has given a clear verdict that under the circumstances, where the assessee had failed to avail the remedy of appeal within limitation, the High Court cannot entertain the writ petition and the same deserve to be rejected at the threshold. The petitioner has also not come out with a case that the order passed by the assessing authority was either without jurisdiction or was passed in violation of principles of natural justice. Petition dismissed.

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• 2025 (4) TMI 1500
  Challenge to notice - apprehension of the petitioner is that though the petitioner is only running a courier service and has no connection with the goods, it would be mulcted with the tax and penalty that has already been levied and which is now demanded under the impugned Form GST MOV 09 - HELD THAT:- It is clear that no tax or penalty is being demanded from the petitioner under the impugned proceedings. Accordingly, this Writ Petition is closed, by recording the said pleadings and holding that no tax or penalty would be payable by the petitioner under the impugned notice.

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• 2025 (4) TMI 1499
  Levy of GST on the conversion charges and on the estimated value of the by-products, treating them as consideration for milling - Milling of paddy for distribution of rice under PDS - HELD THAT:- The judgment of the Division Bench of this Court in SHIRIDI SAINATH INDUSTRIES VERSUS DEPUTY COMMISSIONER OF SERVICES TAX (INTERNATIONAL TAXATION) [ 2021 (1) TMI 175 - ANDHRA PRADESH HIGH COURT] , would be squarely applicable to these cases also and no G.S.T. can be levied on the value of the broken rice, husk bran retained by the petitioners, after completion of the milling of the paddy entrusted to them by the 2nd respondent-Civil Supplies Corporation. These Writ Petitions are allowed setting aside the impugned assessment orders, dated 25.10.2024 24.10.2024.

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• 2025 (4) TMI 1498
  Lawful arrest of petitioner or not - failure to explain grounds for arrest when she was co-operating - alleged crime relates to tax evasion completely on documentary evidence - violation of principles of natural justice - HELD THAT:- During her judicial custody it appears no any inquiry conducted with her. It is stated by the applicant that applicant has no intention to avoid payment of GST amount. It appears that, the revenue is adequately secured. Thus it appears further custody of applicant is no more required. The arrest memo shows that accused was arrested on 29.03.2025 at 10:30 am hours and produced before court on the same day and sought her judicial custody. The grounds of arrest were explained to the accused and her father. The authorisation/order of arrest stated all the details of the case and grounds of arrest and delegated the powers to arrest under Section 69 of the Act. It bears signature of the accused and panch witnesses. Thus it cannot be said that the arrest is illegal. The further investigation if any will take its long time. The accused is prepared to furnish bail. The offence is triable by this court. Accused is a female. Considering the nature of offence she is entitle to be released on bail. Bail application allowed.

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• Income Tax

• 2025 (4) TMI 1497
  Rectification of mistake - penalty notice passed u/s 221(1) imposing penalty on account of filing wrong return - As decided by HC [ 2024 (9) TMI 28 - PUNJAB AND HARYANA HIGH COURT] petitioner was having full knowledge of having filed return in the wrong format. More so, as he had also filed return for the AY 2014-15 in the ITR Form 7, which was later on revised by him and ITR was filed under Form No.5 subsequently. Once he has himself corrected his ITR for the subsequent AY 2014-15, there was no occasion for the petitioner not to correct his ITR for AY 2013-14. Be that as it may, the petitioner has remedy in terms of Section 154 of the Act as above for seeking necessary rectifications HELD THAT:- Having heard parties and having gone through the materials on record and more particularly the High Court having reserved the liberty for the petitioner to move an application for rectification u/s 154 of the Act, we find no good reason to interfere with the impugned order. If any application is preferred by the petitioner in terms of Section 154 of the Act, the same shall be decided at the earliest in accordance with law.

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• 2025 (4) TMI 1496
  Income escaping assessment u/s 147 - proceedings were initiated after the expiry of four years - Bogus loan transaction of debentures - information is received through FT TR that the loan received from Flirasca Holding Private Limited is located in Cyprus and Mauritius, tax havens countries and on an analysis of the bank statement of these entities it is observed that funds have been transferred through circuitous route to the Petitioner-Company by way of loan. HELD THAT:- Admittedly, in the reasons recorded and reproduced above, there is no statement alleging failure on the part of the Petitioner to disclose fully and truly all material facts necessary for the assessment. However, merely because this statement is not there in the reasons recorded, it does not mean that this condition is not satisfied if on a perusal of the reasons recorded it can be culled out that there is a failure on the part of the Petitioner to disclose fully and truly all material facts necessary for the assessment. On a perusal of the reasons recorded and reproduced above, the failure on the part of the Petitioner to disclose fully and truly all material facts necessary for the assessment can be culled out even in the absence of any statement to that effect in the reasons recorded. In the reasons recorded it is stated that information is received through FT TR that the loan received from Flirasca Holding Private Limited is located in Cyprus and Mauritius, tax havens countries and on an analysis of the bank statement of these entities it is observed that funds have been transferred through circuitous route to the Petitioner-Company by way of loan. The money is received by the Petitioner through the layering of various offshore entities, and based on the intelligence available, these tax haven entities have an intimate connection with the Petitioner and its Director, and undisclosed funds have been routed by the Petitioner itself through layering via various offshore entities in tax haven countries. In our view, based on these reasons, which are recorded, it can very well be culled out that there is a failure on the part of the Petitioner to disclose fully and truly all material facts necessary for the assessment. The circuitous movement of funds through various companies located in tax havens have not been disclosed in the course of the original assessment proceedings. Therefore, in our view, even though there is no statement of any allegation of failure to disclose fully and truly all material facts necessary for the assessment, same can be culled out on a reading of the reasons recorded. Therefore, the contention raised by the Petitioner that in the absence of any statement in the reasons recorded that there is any failure to disclose fully and truly all material facts necessary for the assessment the impugned proceedings are bad is to be rejected. In the extraordinary jurisdiction under Article 226 of the Constitution of India, the Court is not required to examine the sufficiency of the reasons but whether the reasons prima facie indicate that any income has escaped assessment. In our view, based on the reasons as recorded, which in turn, is based on information received post conclusion of the original assessment proceedings as reproduced above, it cannot be said that no prudent person could have formed a belief that any income has escaped assessment by failure on the part of the Assessee to disclose fully and truly material facts necessary for the assessment. Since the petitioner had questioned the compliance with the jurisdictional parameters for reopening, we directed the Respondents to place on record the precise information based on which the reopening was proposed. Therefore, in our view, no prejudice was caused to the Petitioner by our directions. In any case, this direction was limited to ascertain whether the same was available at the time of the original assessment proceedings or was it post-conclusion of the original assessment proceedings. Merely because the date of receipt of information is not noted in the reasons recorded, the assumption of jurisdiction cannot be faulted. The reopening as evident from the reasons recorded is initiated after conclusion of the assessment proceedings wherein the revenue has the information about unexplained money of the petitioner being routed through various companies located in tax haven countries. This information was not available at the time of the assessment proceedings and, therefore, was not examined during the original assessment proceedings. In the original assessment proceedings, what was perhaps examined was only receipt of money from Flirasca Holding Company Limited and not the routing of the said money through various layered companies which, according to the information received, is the unexplained money of the Petitioner. Further, it is important to note that this information was received post conclusion of the assessment proceedings, as evident from the letter dated 28 March 2016. Condition specified in first proviso to Section 147 of the Act would not be applicable in a case where subsequently it is found that the transaction which was examined is non-genuine or bogus. For the purpose of assumption of jurisdiction, certainly the submission made by the Petitioner cannot be accepted. This is more so, looking at the purport and objective of the reassessment proceedings to bring to tax income which has escaped assessment and any interpretation which would be contrary to such an objective is required to be rejected in the facts of the present case. Based on the objection raised by the Petitioner, a feeble attempt was also made before this Court that in the proceedings before the Income-tax Settlement Commission (ITSC), the said authority had observed that no further enquiry is needed on the loan transaction of Rs. 403 crore from Flirasca Holding Company Limited. In the objection, the Petitioner had admitted that the application before the ITSC was not for AY 2009-2010. The present proceedings impugned in the petition relate to AY 2009-2010. Therefore, the objection raised by the Petitioner on the basis of the ITSC order cannot prevent the revenue from initiating reassessment proceedings for AY 2009-2010. In any case, we have not been shown any such order of ITSC and in what context the observations were made. Therefore, based on such argument we cannot nip the proceedings at the threshold. Therefore, in our view, based on the above analysis and reasoning, the present petition, challenging the reassessment proceedings initiated by notice dated 30 March 2016, is required to be dismissed, and is hereby dismissed.

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• 2025 (4) TMI 1495
  Validity of reopening of assessment - Reason to believe - whether the AO was justified in proposing to reopen the search assessments earlier made beyond the period of four years? - HELD THAT:- What is to be answered is whether the assessee by furnishing the Information had disclosed all the primary facts before the assessing officer and whether the assessee s duty stood discharged. At the first blush, it looks as if the assessee had nothing more to do and that it was for the assessing officer to arrive at the requisite inferences. The statutory provision does not stipulate that at the stage of issuing notice u/s 148 of the Act, the authority must point out the default on the part of the assessee. If such were to be the requirement, the Hon ble Supreme Court would not have held that the assessee can demand furnishing of reasons. In the case on hand, pursuant to the request made by the assessee, reasons were furnished. The assessee offered its objections. The objections were rejected. All these steps had to be taken before proceeding with the reassessment. Challenging the rejection order, writ petitions were filed. When the course of action adopted by the assessee as well as the assessing officer are in consonance with GKN Driveshafts [ 2002 (11) TMI 7 - SUPREME COURT ] decision, the question of quashing the impugned proceedings on the basis of Fenner [ 1998 (11) TMI 66 - MADRAS HIGH COURT ] decision by the Madras High Court which was rendered in 2000 does not arise at all. Single Judge extracted the rival contentions and the decision of Asianet Star Communications Pvt. Limited [ 2019 (6) TMI 356 - MADRAS HIGH COURT ] dealing with the issue of change of opinion was cited. With due respect, we have to observe that the order allowing the writ petitions is non-speaking. It is vulnerable on that sole ground. Probably, that was why, the erudite Senior Counsel appearing for the assessee trained his guns on the notices and the rejection orders passed by the assessing officer instead of supporting the order passed by the learned Single Judge. For the foregoing reasons, the orders impugned in the writ petitions are sustained.

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• 2025 (4) TMI 1494
  Calculation of block periods for assessment u/s 153C - AO dropped the proceedings initiated against the Assessee u/s 153A under the process of initiating fresh proceedings u/s 153C - ITAT, following the decision of this Court in Ojjus Medicare Pvt. Ltd [ 2024 (4) TMI 268 - DELHI HIGH COURT] held that AY 2012-13 falls outside the block of ten assessment years, which could be reopened pursuant to a notice issued under Section 153C of the Act. HELD THAT:- Concededly, in terms of the said decision, the block of ten years for which assessments could be reopened is required to be construed from the end of the assessment year relevant to the financial year in which the satisfaction note under Section 153C of the Act was recorded by the AO. As noted above, in the present case, the AO had recorded its satisfaction note under Section 153C of the Act on 29.09.2021 and therefore, the period of ten years for which the assessments could be reopened under Section 153C of the Act read with Section 153A of the Act are required to be reckoned from the end of the AY 2022-23. Concededly, AY 2012-13 falls beyond the block of ten years that are required to be reckoned from the end of the AY 2022-23. No infirmity with the view of learned ITAT in finding that the AO s assumption of jurisdiction under Section 153C of the Act in respect of AY 2012-13 is invalid. Decided against revenue.

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• 2025 (4) TMI 1493
  Reopening of assessment u/s 147 - petitioner had not furnished confirmation from the shareholders subscribing the capital in the ongoing assessment - HELD THAT:- The assessment of the petitioner was finalized u/s 143 (3). Thereafter the petitioner filed revised return correcting the clerical error in claiming the depreciation. On the basis of the revised return the assessment proceedings were initiated but dropped on 19.03.2015, considering that there cannot be two assessment for an assessment year and the issues on merit were not gone into. The objection that while dropping the assessment proceedings vide order dated 19.03.2015 the AO had not taken cognizance of the information given by DGIT was rightly rejected. There was no occasion for AO to go into any other issue after holding that the proceedings cannot continue in view of assessment having already been completed. The contention that the proceedings were initiated merely on receipt of information from the investigation wing and without application of mind, lacks merit. On receipt of material from the investigation wing a preliminary enquiry was held by the AO. Issuance of notice under Section 133 (6) revealed that the transaction pertained to Assessment Year 2012-13 and not to 2013-14. There is a tangible material available with the AO to make basis for having reasons to believe that there is escaped assessment. The AO is not required to finally concluded on the relevancy of the material and to hold that it is sufficient and ultimately would result in making an addition. In case of Micro Marbles Private Limited [ 2023 (1) TMI 282 - RAJASTHAN HIGH COURT] the notice under Section 148 and the proceedings consequent thereto were quashed for failure of the department to supply the information received from the investigation wing and documents being relied upon. In case of Kohinoor Hatcheries Pvt. Ltd [ 2016 (9) TMI 208 - ANDHRA PRADESH HIGH COURT] from the questionnaire issued during the assessment proceedings it was evident that there was full and true disclosure of the material facts by the assessee. In the case in hand the claim of the petitioner that during assessment the confirmation from the shareholder and subscribers was produced and considered has been factually found wrong. Decided against assessee.

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• 2025 (4) TMI 1492
  Delay in filing the revised return of income - Condonation of Delay u/s 119(2)(b) - Petitioner was awarded the compensation for compulsory acquisition of the land in question by the Surat Municipal Corporation as per the award passed by the Civil Judge, Senior Division under the provisions of the Land Acquisition Act, 1894 - HELD THAT:- Petitioner received the compensation in the month of September 2021 after the order of determining the share of the Petitioner passed by the Court on 04.09.2021. The Petitioner therefore could not show the amount of compensation in the original return filed on 04.01.2021. The Petitioner therefore was prevented by sufficient cause to claim the refund of the amount of tax deducted at source by the Surat Municipal Corporation at the time of deposit of the compensation with the Court. The reasoning given by the Respondents authorities while rejecting the application do not commensurate with the facts of the case inasmuch as the Respondents have failed to consider that the compensation received by the Petitioner was exempted from tax and therefore, the Petitioner is entitled to get the refund of the TDS which was deposited by the acquiring body with the Government and for that purpose, the Petitioner is required to file the revised return which can be possible only if the delay in filing such revised return is condoned by exercising the powers vested in Section 119 of the Act. The objection of Section 119 of the Act is to see that the Assessee are even not put to any unnecessary hardships to claim any refund which otherwise is eligible to get. Respondents-authorities were required to consider the facts of the case more particularly when the Petitioner admittedly has not received the compensation till the due date of filing of return on 31.05.2021 and when the Petitioner received such compensation, the delay in filing the revised return is required to be condoned so that the Petitioner gets the refund of the TDS deposited by the acquiring body in the Government, as such compensation received by the Petitioner is not taxable under the provisions of the Act. Order passed by the Respondents u/s 119 (2) (b) of the Act is hereby quashed and set aside and the Respondents are directed to pass the fresh order to condone the delay in filing the revised return by the Petitioner so as to process the same in accordance with law by the AO.

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• 2025 (4) TMI 1491
  Release of Seized Jewellery - Assessment was completed - Outstanding Demand of subsequent year - Seeking directing the respondents to released the seized jewellery - HELD THAT:- Respondent is required to release jewellery which is retained by order in absence of any outstanding liability to be paid by petitioner no.3 regarding AY 2014-2015 and therefore, such jewellery could not have been retained for recovery of any outstanding demand for any subsequent assessment years of the petitioner no.3. Retention of jewellery is therefore, without any authority and jurisdiction and is required to be released forthwith in favour of petitioner no.2. The contentions raised on behalf of the respondents to retain the jewellery for recovery of outstanding tax dues of the petitioner no.3 is not tenable as the section 132B was amended to include the amount of the liabilities determined on completion of the assessment or reassessment or re computation with effect from 01.04.2022 by Finance Act, 2022 and prior thereto the provision existed as reproduced herein above qua completion of assessment under section 153A only. Therefore, respondents are not justified in retaining the jewellery for recovery of outstanding liability of subsequent assessment year other than the A. Y. 2014-15 as there is no outstanding liability to be discharged by the petitioner no. for A.Y. 2014-15. The respondents are directed to release the seized jewellery forthwith which is retained by the respondents illegally and without jurisdiction in favour of petitioner no.2.

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• 2025 (4) TMI 1490
  Reopening of assessment u/s 147 - AO has jurisdiction to undertake assessment for the year 2020-21 before 01.04.2024 or not? - HELD THAT:- Perusal of the dates and event it is evident that AO had issued notice u/s 148A Clause (b) on 28.03.2024 which is much earlier to the time-limit stipulated, i.e. within three years. Petitioner s contention that for the purpose of limitation number of days is required to be counted from the date of notice dated 22.04.2024. It is to be noted that notice dated 22.04.2024 was issued pursuant to the petitioner s reply to the notice dated 28.03.2024, i.e. reply dated 31.03.2024. There was no occasion for the Revenue to issue notice on 22.04.2024, if the petitioner s contention in reply to the notice dated 31.03.2024, in particularly, therefore, proceedings have been initiated by issuing notice on 28.03.2024. If proceedings commenced on 28.03.2024 insofar as issuing notice u/s 148A Clause (b) which is the relevant and crucial date for the purpose of taking note of limitation period. Combined reading of 5th and 6th Proviso, it is crystal clear that delay is required to be taken note of with reference to notice. In the present case notice means first notice issued on 28.03.2024 and it is within the time-limit stipulated and AO has jurisdiction. The present writ petition is pre-mature. Accordingly, the present writ petition stands disposed of reserving liberty to the petitioner to participate in the process undertaken by the Revenue in the light of impugned order and notice and co-operate.

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• 2025 (4) TMI 1489
  Addition being 8.0% of the turnover of contract Receipts - admittedly there was non-compliance on the part of the assessee in not maintaining the books of accounts in respect of it s contractual business - HELD THAT:- We observe that this is the first year of the assessee s contractual business, in which he has earned income from carrying out contractual work and also rental income on account of hiring of Plant and Machinery. For this year, the assessee did not file return of income and has not maintained any books of accounts, being the assessee s first year of business. For the succeeding assessment years, the assessee has been regularly filing return of income and also maintaining duly audited books of accounts. For A.Y. 2012-13, the assessee has declared net profit rate of 2% approximately on total turnover of 5.65 crores. For A.Y. 2013-14 the assessee has declared approximately 2% net profit rate on total turnover of Rs. 7.01 crores approximately. For A.Y. 2013-14, there was a regular assessment in the case of the assessee, wherein the aforesaid return of income was accepted by the Tax Department, though there were some minor disallowances on account of certain expenditures, for which the assessee was unable to provide supporting documentation. Accordingly, in the interest of justice, the net profit rate is directed to be restricted to 5% of the total turnover declared by the assessee, for the impugned assessment year. Appeal of the assessee is partly allowed.

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• 2025 (4) TMI 1488
  Addition of long term capital gain - CIT(A) deleted addition - whether CIT(A) was violative of Rule 46A of the Income Tax Rules because the additional evidence had been admitted without giving an opportunity to the ld. AO? HELD THAT:- It does appear from the order or the ld. CIT(A), that before acting upon the additional evidences presented before him i.e. the copy of the Khatauni and a certificate dated 29.09.2016, the ld. CIT(A) did not offer an opportunity to the ld. AO to consider these evidences in remand proceedings. Therefore, his actions appear to be in violation of the Rule 46A. However, in our opinion, this will not materially impact the fate of the case because these evidences were only supporting evidences with regard to facts that had already been placed before the ld. AO in the form of the sale deed. That sale deed showed that the land in question, which formed part of the auctioned assets, belonged to Smt. Shakuntla Devi, the partner of the firm and not to the firm. In view of the same, the firm could not be charged long term capital gain on alienation of an asset which did not belong to it. The only gains attributable to the firm could be on account of building structure and plant and machinery which were owned by the firm and depicted in its schedule of fixed assets. For the same, the ld. AO was required to arrive at the figures of amounts realized on sale of building structure and plant and machinery and compute the profits on the sale of the same after deducting the written down value as it stood in the books of the assessee. No other amount could be taxed in the hands of the assessee as capital gains, for assets which did not belong to it. In the circumstances, we are inclined to agree with the ultimate decision of the ld. CIT(A) in granting relief to the assessee. Therefore, the appeal of the Revenue on the actual grant of relief i.e. ground no. 1 is dismissed. Appeals on ground nos. 2 and 3 with regard to the entertaining of additional evidences in violation of Rule 46A of the Income Tax Rules are upheld. Thus, the appeal of the Revenue is partly allowed. Reopening of assessment - Information that was available with the ld. AO, coupled with the fact that the assessee had not filed a return of income earlier gave rise to a valid, reason to believe that the income had escaped assessment - In considering the material available before the ld. AO and subsequently before the Addl CIT, Range-1, Bareilly, and considering that at that point of time, the amendments to the act that provided for seeking the explanation of the assessee before issuance of notice under section 148, had not yet come into play, we see no infirmity in the initiation of the assessment proceedings or the approval given to the said assessment proceedings by the Addl CIT, Range-1, Bareilly. Thus, it cannot be said that the assessment proceedings were void ab initio or that the approvals were given mechanically. Assessee has appeared before the ld. AO in response to the notice issued by him. Therefore, in view of the provisions of secton 292B and 292BB, the notice cannot be said to be invalid or the proceedings vitiated on account of service of an incomplete notice. We, therefore, also cannot conclude that the assessment proceedings were illegal, bad in law or without jurisdiction. Therefore, even while we have held that the addition was not sustainable in the hands of the assessee, the grounds raised in the Cross Objection are not found to be maintainable

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• 2025 (4) TMI 1487
  Addition on account of oil and fuel expenses - addition only on the ground that there was certain differences between the original return and the revised return filed by the assessee, wherein the amount of depreciation claimed in revised return of income and original return of income and a similar difference was there in the oil and fuel expenses i.e. as per the revised return of income and as per the original return of income, there was an increase in the fuel and oil expenses - HELD THAT:- Though the assessee furnished before the AO the bills and vouchers supporting the said expenses and also the reasons for difference in the amount of depreciation, however, the AO without going into those evidences, made an adhoc disallowance out of the total oil and fuel expenses as claimed by the assessee in the profit and loss account by bench marking the same on the basis of previous year s percentage of oil and fuel expenses to the turnover and also considered the increase of 3% in the cost of diesel surcharge. In our opinion, the said estimation of disallowance by the AO is based on the presumption and surmises without there being any valid basis. We note that the total turnover of the assessee during the impugned assessment year. We further note that there was escalation in the prices of diesel as on 01.04.2011 from Rs. 37.75 to Rs. 48.63 as on 01.04.2013, which is approximately around 28%. Thus, the basis adopted by the AO is devoid of appropriate basis and accordingly sustenance of addition by the ld. CIT(A) is also wrong and cannot be accepted. Disallowance on account of truck running expenses - HELD THAT:- We note that the AO has not made any objective examination of the expenses when the assessee has not produced the bills and vouchers as claimed by the AO. We find merit in the contention of the assessee that the increase in toll tax and other road expenses which have enhanced these expenses during the year considerably whereas the disallowance by the AO was totally on incorrect basis by merely comparing with the current year s expenses with the preceding year expenses. AO disallowed on account of finance charges paid for acquisition of self-occupied property - HELD THAT:- We find that the interest incurred in the acquisition of flat which is under self-occupation has to be dealt with in accordance with the provisions of Section 24(b) of the Act. Undisputedly, the assessee has paid interest on house loan to HDFC bank. Therefore, we set aside the order of the ld. CIT(A) and direct the AO to allow the interest paid to HDFC Bank on house loan u/s.24(b) of the Act, subject to ceiling as has been prescribed under the Act. Accordingly, ground NO.3 is allowed. TDS u/s 194A - Disallowance on account of non-deduction of tax u/s.40(a)(ia) - AO disallowed Interest paid to STF Co. Ltd - HELD THAT:- We find merit in the contention of the assessee that the amount was paid on account of interest charges to the listed companies who offered to tax by them and, therefore, no disallowance is called for u/s.40(a)(ia). In our opinion, this issue needs to be verified at the end of the AO as to whether these companies have offered the tax in their income tax returns. Accordingly, the issue is restored to the file of the AO. The assessee shall be provided sufficient opportunity of hearing by the AO while deciding the issue. This ground of appeal of the assessee is allowed for statistical purposes. Disallowance on the basis of list of secured loan takens from various banks - there was a difference in the statement of unsecured loan taken from Kotak Mahindra Bank which the assessee could not explain and accordingly the same was added by the AO to the income of the assessee and also confirmed by the CIT(A) - HELD THAT:- After considering the rival submissions of the parties and perusing the material available on record, we find that the assessee has filed a letter dated 28.03.2016 along with supporting evidences reconciling the said amount. The same requires verification at the end of the AO and accordingly we restore this issue also to the file of the AO with direction to decide the same after providing sufficient opportunity of hearing to the assessee.

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• 2025 (4) TMI 1486
  Limited scrutiny - Unexplained investments on account of sundry debtors - HELD THAT:- As entire business transactions including trading and investments in shares are bogus/non-genuine. Therefore, such finding, being broad, is held falling within the following parameters of limited scrutiny: i. Low income in comparison to very high investments. ii. Low income in comparison to high loans/advances/investment in shares iii. Large increase in investment in unlisted equities during the year Therefore, the issue raising scope of limited scrutiny is decided against the assessee and in the favour of the Revenue. Unexplained investments on account of sundry debtors being fictitious - AO in the assessment order passed in this case, has held that the entire business transactions including trading and investments in shares are bogus/non-genuine. Therefore; in such circumstances, the AO should have taken pains to gather various details of real beneficiaries for passing such information to the AOs of beneficiaries for remedial measure. Once the AO has held the assessee s business as non-genuine, then the accommodation entry, if any, given through the Profit Loss account and Balance Sheet should have been taxed in the hands of the beneficiaries as per the law. We find merit in the arguments of the Ld. Counsel as the anomalies/ contradictions/factual inconsistencies pointed out by him, prima-facie, are convincing. When the AO had not held the sundry debtors existing as on 31.03.2014 as bogus/fictitious in the scrutiny assessment order of the AY 2014-15 even after questioning the same cannot be held as bogus/fictitious in subsequent order of the relevant year. AO has not given specific finding pointing out any bogus transaction in the relevant year with the help of any corroboratory evidence. We find that the AO on one hand has held that the entire business transactions including trading and investments in shares are bogus/nongenuine, then no addition on account of purchases and sales treating then real and genuine can be made in the hands of the assessee. We are not able to persuade ourselves that how such contradictions will go together. As far as the addition on account of sundry debtors is concerned, we are of the considered view that the same cannot be taxed in the relevant year even if it is fictitious in nature. The current year sale of the shares has not resulted any sundry debtor. The assessment order does not pin-point say any adverse material regarding the sale of shares. Revenue has not brought any material on the record to demonstrate that the trading of shares is non-genuine. Therefore, the addition cannot be sustained. Accordingly, the addition is deleted.

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• 2025 (4) TMI 1485
  Reopening of assessment u/s 147 - Addition u/s 69A - genuine sale consideration received as unexplained money and declared as Long Term Capital Gain in return - HELD THAT:- Reasons recorded by the AO is without application of mind and without verification of his own records, whether the assessee filed the Return of Income or not. Thus the basis of recoding reason to believe of escapement assessment is nothing but the reproduction of the Investigation Wing report of the department and independent application of mind and verification of record by the AO. There is no failure on the part of the assessee in declaring the LTCG and claim of exemption u/s 10[38] in the original Return of Income filed by the assessee. The very reopening of assessment itself is invalid in law based on the borrowed satisfaction from investigation wing of the department. As relying on Mumtaz Haji Mohmad Memon [ 2018 (10) TMI 366 - GUJARAT HIGH COURT] we have no hesitation in quashing the reassessment notice issued by the AO as invalid in law for not recording independent reason for escapement of income after verification of the facts of the assessee s case. Consequently, the reassessment order is hereby quashed. Appeal filed by the assessee is hereby allowed.

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• 2025 (4) TMI 1484
  Deduction u/s 80G - donations made as part of its Corporate Social Responsibility (CSR) obligations - HELD THAT:- We are of the view that the CIT(A) s conclusion - though acknowledging the inapplicability of clauses (iiihk)/(iiihl) - is contrary to the legislative structure and fails to appreciate the scope and autonomy of section 80G within Chapter VI-A. In light of the legislative intent behind Explanation 2 to section 37(1), of the Act the structure and operation of Chapter VI-A, judicial consensus from Co-ordinate Benches and full compliance by the assessee with the conditions of section 80G, we hold that the assessee is entitled to deduction u/s 80G. The disallowance made by the AO and sustained by the CIT(A) is hereby directed to be deleted. Appeal of the assessee is allowed.

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• 2025 (4) TMI 1483
  Disallowance u/s 80P(2)(d) - interest income from Co-operative banks - HELD THAT:- It is pertinent to note that only the Sabarkantha District Central Co-operative Bank Ltd. is a registered co-operative society and therefore the component which is an interest received on deposits are allowable as deduction u/s. 80P(2)(d). As regards, the Dena Gujarat Gramin Bank, AR could not point out whether this was registered cooperative society or not and after taking into account the submission of the AR. It is found that the said Dena Gujarat Gramin Bank is not co-operative society, question of the interest received from the said Dena Gujarat Gramin Bank will not be eligible for deduction u/s. 80P(2)(d). Appeal of the assessee is partly allowed.

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• 2025 (4) TMI 1482
  Addition on account of Club Expenses - HELD THAT:- We find merit in the submissions/arguments/contentions of the AR. AO had not demonstrated the club expenditure as non-business expenditure. It seemed that the AO had disallowed this expenditure by nomenclature of the expenditure only. We do not see any justification therein. Therefore, the same is allowed as business expenditure. Disallowance of exchange rate difference - HELD THAT:- The tax treatment of foreign exchange gains or losses differs from its accounting treatment. For tax purposes, the revenue transactions resulting foreign exchange gains/losses are taxable/deductible being revenue in nature. Here, in the present case, the expenditure was allowed in the preceding AY as per the claim but not the exchange rate fluctuation in the relevant year though the same was crystalized/materialized in the relevant year. AO has not raised any doubt on the claim of expenditure of US $ 39,000/- in the preceding year. The encashment of said cheque, which happened in the relevant year resulting further expenditure due to the exchange rate difference was not allowed on the reasoning that it pertained to the prior period. We are of the considered view that this expenditure is held to have crystalized in the relevant year and thus, it has to be allowed as business expenditure. We therefore, delete the disallowance on this score. Loss on closure of the stores - HELD THAT:- The only requirement which has to be seen is that the expenditure is of revenue nature and not capital nature. There are series of decisions wherein the Hon ble High Courts and Hon ble Supreme Court that has laid down the principle that if an expenditure is incurred for doing the business in a more convenient and profitable manner and has not resulted in brining any new asset into existence then such expenditure is allowable business expenditure. It is also pertinent to note that in the case in hand, the expenditure has been incurred; prima-facie, for assets in respect of the existing business and are capital in nature. However, this issue is restored back to the AO for verification and doing needful. If the expenditure is of revenue in nature, then the same has to be allowed as business expenditure u/s 37(1) and if new assets have come into existence on which depreciation have been claimed in preceding year(s), then this loss has to be dealt through the Block of assets (WDV) showing sale value of the abandoned assets as NIL and allowing depreciation on the reduced WDV as per the law. In view of the above observations, the issue is being remitted to the AO for deciding it afresh as per the law. Taxability of interest on the income tax refund - The dispute before us is confined to the quantum of interest and not the taxability of it per se. Therefore, this issue is remitted back to the AO for verification and taxing the actual amount of interest paid by the income tax Department on the refund u/s 244A of the Act during the relevant year.

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• 2025 (4) TMI 1481
  Levy of penalty u/s 271(1)(b) - non-compliance of notice issued u/s 142(1) - HELD THAT:- Hon ble Supreme Court, in the case of Hindustan steel Ltd.[ 1969 (8) TMI 31 - SUPREME COURT] has held that an order-imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. We have taken note of the fact that the assessee has ensured regular compliance of the statutory notices after August, 2018. Thus, it appears that the provisions of Section 271(1)(b) have been used by the AO as a deterrent to ensure timely compliance. We are satisfied with the reasons of non-compliance of the notice issued u/s 142(1) as there is no deliberate defiance of law or is guilty of conduct contumacious or dishonest or act in conscious disregard of the legal obligation. We therefore, hereby set aside the impugned order and delete the penalty. Appeal of the assessee is allowed.

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• 2025 (4) TMI 1480
  LTCG - Indexed cost of construction - Evidence (Proof) of expenditure incurred on construction - CIT(A) deleted the additions against cost of construction - HELD THAT:- Perusal of the order of the Ld. CIT(A) reveals that the remand report was called out by the appellate authority but the AO was failed to submit the report. CIT(A) has examined the issue that the assessee has furnished the valuation report issued by a government approved valuer who estimated the cost of construction. The assessee also filed the additional evidence before the appellate authority on which remand report was called out from the AO. CIT(A) has examined the issues in the correct prospective and rightly allowed the appeal of the assessee. The reasoning and findings of the CIT(A), while granting relief is on proper appreciation of law expounded by the judicial dicta. No reason to interfere with the findings of the CIT(A). Appeal of the revenue is liable to be dismissed.

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• 2025 (4) TMI 1479
  Addition u/s 69A - suo-moto taking the bank deposits as turnover and estimating the profit @ 8% - assessee has not furnished complete details of bank deposits, the same is added to the total income of the assessee as unexplained money u/s 69A - HELD THAT:- Legal heir of late assessee has furnished evidence to show that, prior to his death, assessee was running a Kirana business which had a turnover that had been verified by the VAT authorities in the course of an assessment. Non-compliance before the AO is explained by the illness and subsequent demise of the assessee during the period of assessment. Therefore, the lack of explanation furnished before the AO in the given circumstances of the case, should not be viewed as an attempt to evade notices but has to be seen in the light of the circumstances that befell the assessee and his family. Since, the total amount of cash deposit and even the total amount of credits in the said bank account are well below the turnover of the late assessee s business, and since the AO has verified this in the course of remand proceedings and not recorded any adverse comments, when given the opportunity to do so, we are of the opinion that the CIT(A) is justified in accepting the request of the assessee s legal heir to assess the income from the said business @ 8% of gross receipts in view of the provisions of section 44AD. Appeal of the Revenue is dismissed.

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• 2025 (4) TMI 1478
  Surcharge applicable on income as clubbed with highest rate of income tax against the provisions given in chapter ii, 1st Schedule part 1 of Finance Act, 2022 - CIT(A) NFAC erred in law to invoke the provision section 164 r.w.s 2(29C) HELD THAT:- As surcharge @ 10% only should have been applied as the income was below Rs. 1 Crore. For A.Y. as the total income was only Rs. 24,78,407, therefore, no surcharge was leviable. Hence, the appeals are allowed for both the assessment years and the AO is directed to apply the surcharge @10% for A.Y. 2022-23 as the income did not exceed Rs. 1.0 Crore and apply NIL surcharge for A.Y. 2023-24 as the income did not exceed Rs. 50,000/-. Hence Ground Nos. 1, 2 and 3 are allowed.

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• 2025 (4) TMI 1477
  Denying the benefit of exemption claimed u/s 10(23C) (iiiad) - funds collected by the assessee trust towards building and repair development expenditure - HELD THAT:- We find that the issue as to whether the funds collected by the assessee trust towards building and repair development expenditure has already been decided in the case of Vidya Bharati Society for Education Scientific Advancement[ 2020 (1) TMI 559 - ITAT KOLKATA] Thus, we set aside the order passed by CIT(A) and direct the AO to recomputed the income of the assessee after excluding the building and repair development expenditure from the gross receipts and allow exemption u/s.10(23C)(iiiad) of the Act. Thus, appeal of the assessee is allowed.

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• 2025 (4) TMI 1476
  Unexplained expenditure on election - Post Search Assessment u/s 153A - expenditure recorded in a diary seized during search in the name of a third party and the assessee denied ownership or connection with the diary - HELD THAT:- The diary found with the assessee was in the name of Third party/Mr. Alok Tiwari, that it contained details of expenses incurred during election and the source of these expenses remained unverified by the Department, the only conclusion which can be drawn is that the diary belonged to Third party/Mr. Alok Tiwari and the said expenses were incurred by him. We do not agree with the CIT (A) that applying the provisions of section 132( 4A) and section 292C of the Act, the diary is to be attributed to as belonging to the assessee and addition to be confirmed in the hands of the assessee. The addition made in the hands of the assessee is therefore directed to be deleted. Addition made on account of cash found deposited in the bank account of the assessee - source of the same remained unexplained - AO made addition of the peak of the bank deposits while the CIT (A) rejected the addition made of the peak balance and on the basis of data available with him, extracted from the Balance Sheet of the assessee, reworked the availability of cash with the assessee and accordingly noted that an partly deposited in the bank account of the assessee remained unexplained - HELD THAT:- We have gone through the contents of the Balance Sheet, which was placed before us in a paper book at page number 21-24. The said Balance Sheet, we have noted, records the opening and closing balances of both the bank accounts in which the Revenue authorities have noted cash to be deposited by the assessee. Considering the fact that both the bank accounts are recorded in the balance sheet of the assessee, there can be no case with the Revenue of the cash found deposited therein being from unexplained sources .As long as the cash and bank balances are recorded in the Balance Sheet of the assessee, it is simple accounting, that all the transactions recorded therein are duly accounted for in the books of the assessee and therefore are from accounted sources. The addition therefore made by the Revenue authorities, we hold, is without any basis and is therefore directed to be deleted. Unsecured loans from different persons found to be not genuine - Not allowing credit for redeposit of surplus business funds in bank account and the addition sustained - HELD THAT:- The only reason for holding the loans ingenuine was the fact that the said persons could neither be produced by the assessee for examination nor did they respond to notices issued by the AO with regard to the same. This is not sufficient for treating the impugned loans as not genuine. Undoubtedly the assessee had furnished the names and details of all persons from whom the loans had been taken and had also given their affidavits. In this regard no infirmity has been pointed out as such in the affidavits furnished by the assessee of these persons. Merely because the said persons did not respond to notices issued by the AO cannot be read adversely against the assessee and neither does it establish that the loans were not genuine. As we find that the assessee had duly discharged its onus of establishing the genuineness of the loan by furnishing all details of the lenders and also their affidavits. Addition deleted. Addition of entries of expenses and investments found recorded in seized document BK 2 treating them to be unexplained - HELD THAT:- The findings of the CIT (A) noted, is a detailed finding who has considered all the contentions of the assessee and after dealing with all of them has given part relief to the assessee.The original edition made by the AO was to the tune of Rs.20,23,567 /-which the Ld. CIT(A), after considering each and every argument and contention made before him and corraborating it with the documents on record, has confirmed to the extent of Rs.12,75,317/- which he noted to have remained unexplained. In the absence of any assistance on behalf of the assessee on this factual issue we are left with no option but to confirm the order of the Ld. CIT(A) upholding the addition. Unexplained expenditure incurred through the employee Rajan Dubey for the purchase of fertilizer for agriculture - HELD THAT:-CIT(A), we have noted,has confirmed the addition since the assessees explanation of having made the payment out of his available cash balance was not substantiated through any cash book and the assessee, as per its Balance Sheet,was found to have only nominal cash balance of 3000 odd rupees. We find no merit in the ground raised by the assessee seeking deletion of the impugned addition in the absence of any assistance from the assessee controverting the findings of the AO and Ld.CIT(A).

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• 2025 (4) TMI 1475
  Validity of reopening of assessment - notices issued u/s 148 challenged on the basis that same are beyond the limitation period prescribed u/s 149 - HELD THAT:- Similar issue pertaining to the challenge against notices issued u/s 148 for the assessment year 2015-16 on the basis that same are beyond the limitation period prescribed u/s 149 of the Act has been decided in favour of the taxpayers after noting the submission of the Revenue before the Hon ble Supreme Court in Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB)] , wherein it was conceded by the Revenue that for the assessment year 2015-16, all notices issued on or after 1st April, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ( the TOLA ). We find that in Pratishtha Garg [ 2024 (12) TMI 1540 - DELHI HIGH COURT] allowed the writ petition filed by the taxpayer and set aside the notice issued u/s 148. Thus, the re-assessment notice issued u/s 148 of the Act for the assessment year 2015-16 is barred by limitation. Decided in favour of assessee.

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• 2025 (4) TMI 1474
  Delay of 445 days in filing the appeal by the assessee against the order passed u/s 263 - as submitted appellant was not aware of the order passed by the PCIT - HELD THAT:- AO has passed order u/sec.143(3) r.w.s 263 on 30.03.2022 and served on the appellant. In fact, the appellant has claimed in it s petition that, after receipt of the order from the Assessing Officer dated 30.03.2022, the appellant-company has filed RTI application on 07.04.2022 before the learned PCIT to obtain necessary information. From the above facts, it is undisputedly clear that, the appellant was aware of the proceedings before the learned PCIT u/sec.263 of the Act and also participated in the proceedings by filing relevant evidences. Therefore, reasons given by the appellant in the petition for condonation of 445 days delay that, the appellant was not aware of the order passed by the learned PCIT u/sec.263 dated 29.03.2021 till the AO passed his consequential assessment order u/sec.143(3) r.w.s 263 on 30.03.2022 is devoid of merit and contrary to the facts available on record. Therefore, we are of the considered view, that the reasons given by the appellant for delay in filing appeal does not come under sufficient and reasonable cause Appellant claims that the Managing Director of the company was suffering from cancer and he was admitted to M.S. Ramaiah hospital at Bangalore - Although, the claim of the appellant that it s Managing Director was suffering from cancer and was admitted in hospital, but, the fact remains that when the Director of the company was in hospital, the appellant company has filed appeal against the order passed by the learned PCIT u/sec.263 the Act on 16.08.2022 which is evident from the date of admission into the hospital and date of death of the Managing Director. Further, in a company there are more than one Directors and in case one Director or Managing Director is not able to attend any proceedings because of illhealth or for some other reasons, but, the other Director can very well attend the proceedings. Therefore, in our considered view, the reasons given by the appellant in the petition that due to ill-health of the Managing Director of the company, the appeal could not be filed on or before the due date is devoid of merits and does not come under reasonable and sufficient cause going by the facts available on record. Therefore, on this reason, the delay of 445 days cannot be condoned. Arguments of the appellant in light of Covid-2019 pandemic period if we exclude the delay covered in the order of Hon ble Supreme Court, then, the actual delay is 79 days and, therefore, considering the short delay of 79 days, the appeal may be admitted in the interest of justice - Once there is a delay, it is the duty of the appellant to explain the total delay including the delay covered under Covid period and delay not covered under Covid period. Therefore, even if we exclude delay covered by the Covid period, still there is a delay 79 days, which could not be explained by the appellant with sufficient reasons . Therefore, we are of the considered view that, the reasons given by the appellant on this account also cannot be accepted. As the reasons given by the appellant in the petition for condonation of delay, does not come under sufficient and reasonable cause for condonation of huge delay a 445 days in filing the appeal before the Tribunal. Deduction u/sec. 80IA(4) applicability to the constituent of the JV Consortium - assessee had not directly entered into agreement with Central/State Governments or any Local Authority or Statutory Body, but, entered into agreement through JV/Consortium and, therefore, the Assessing Officer disallowed the claim of deduction u/sec.80IA(4) of the Act to the assessee - HELD THAT:- We note that contracts awarded to JVs and whether the assessee can claim the same as a constituent of the above JVs, the coordinate bench of ITAT, Visakhapatnam in the case of Transstory (India) Ltd [ 2011 (7) TMI 810 - ITAT VISAKHAPATNAM] held that the constituents of JVs are eligible to claim deduction u/s 80IA. Decided in favour of assessee. Deduction u/s 80IA - AO after examining the submissions of the assessee, allowed the 80IA deduction only to the extent of assessee-company s proportionate share with respect to the works executed through JV/Consortium and disallowed excess claim - HELD THAT:-The assessee-company had executed 100% project-work in respect of the above 02 projects. Since the back-to-back agreement entered into by the assessee company with JV/Consortium with respect to their proportionate share of project works in the above 02 projects are not verified either by the AO or by the CIT(A), we deem it appropriate to remit the issue back to the file of AO to the limited extent of examining the issue of back-to- back agreements with the JV/Consortium for execution of proportionate share of JV/Consortium project works by the assessee-company in respect of 02 projects and if the assessee-company furnishes relevant agreements with respect to completion of the project works to be done by the JV/Consortium by the assessee-company, then, the Assessing Officer is directed to allow the deduction claimed by the assessee-company u/sec.80IA of the Act. Needless to say, the Assessing Officer should provide adequate opportunity of being heard to the assessee. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

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• 2025 (4) TMI 1473
  TDS u/s 194H - Addition u/sec.40(a)(ia) - disallowance of commission and cash incentives paid to the retailers on non deduction of TDS - HELD THAT:- In the present case, there is no dispute with regard to the fact that, the appellant-company has paid sales incentives to the retailers on behalf of the Principal s and the same has been reimbursed by the Principal to the appellant-company. Since there is no Principal and Agent relationship between the appellant-company and the retailer traders, the provisions of sec.194H cannot be applied. Therefore, in our considered view, the AO is erred in invoking the provisions of sec.194H and consequently, disallowed the expenditure u/sec.40(a)(ia) of the Act for non-deduction of tax on such payments. Disallowance of expenditure on the ground that the appellant-company failed to prove genuineness of the expenditure by filing relevant evidences - HELD THAT:- AO has completely erred in coming to the conclusion that, the expenditure incurred by the appellant-company is non-genuine only on the basis of enquiry conducted during the course of assessment proceedings, because, the AO conducted enquiries in the year 2010, whereas, the appellant-company carried-out business in the year 2007-2008 and there is almost more than 03 years gap between the business conducted by the appellant-company and the enquires conducted by the AO. Since the assessee has filed relevant evidences and argued that the license period is only for a period of 1-2 years and as and when the license period is over, the retailers will discontinue business and not available in the given address, in our considered view, going by the nature of business of the assessee and the trade practice, the Assessing Officer cannot disbelieve the arguments of the assessee only on the ground that notices issued u/sec.133(6) of the Act are returned un-served by the postal authorities. We are of the considered view that, when the assessee has filed various evidences including confirmation from the parties to prove the genuineness of expenditure, in our considered view, merely for the reason of non-service of notice, adverse inference cannot be drawn against the genuine expenditure incurred by the appellant-company. Therefore, we are of the considered view that the Assessing Officer is erred in coming to the conclusion that the assessee has designed tax avoidance method for payment of tax which is nothing but a colourable device.

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• 2025 (4) TMI 1472
  Loss of PE against the FTS income earned by the assessee - whether the two steam of income to be treated as one income for the taxation purpose? - as submitted that PE also belongs to the same entity, therefore, the assessee should be allowed to claim the set of inter head adjustment - HELD THAT:- We observed that the assessee has PE in India and during the current year, the PE has no offshore supply and it has attributed expenses for running the same in India, therefore, it has declared loss attributing to its PE in India. Assessee is a foreign company taxable in India to extent of the income earned or sourced by it in India. We noticed that the assessee has two sources or stream of income, one is from the services to its clients through its PE and another is by providing services to its clients directly. We noticed that the first stream falls under the Art.7 and the other under Art.12 of the DTAA. However, both stream of income falls under the head business as far as the assessee is concerned. It is only classification and inter play between the two articles of the DTAA. There is no dispute as far as the classification of income is concerned. The AO has accepted that the loss claimed by the assessee is attributable to the PE and the FTS earned by the assessee is from the other services provided directly. In the given case, no doubt the assessee has declared loss in the PE and at the same time, the income earned by it falls under FTS, as far as assessee is concerned it has earned the above income or loss sourced thru India. Therefore, the provisions of section 71 are applicable. Just because the income is chargeable to tax under special provisions and also TDS is collected, it does not change the determination of income under the Act. The Provisions of section 44DA and 115A are applicable or not and how it will impact the income declared by the assessee has to be analysed. As per the provisions of section 44DA, the income of Royalty or FTS earned by the assessee through its PE is concerned, the same is chargeable to tax under this provisions and it is chargeable to tax on gross basis. In the given case, the assessee has earned the FTS directly without the assistance of its PE. Therefore, the above section has no application. Coming to the provisions of section 115A, the provisions starts with the words, Where the total income of connotes the meaning that first we have to determine the total income and if the above total income includes the FTS as per the provisions of section 115A(1)(b) then the relevant FTS has to be excluded from the above income and then chargeable to tax at the specified rate (as per section 115A(1)(b)(B) of the Act). We observe that as per the provisions of section 115A(3) of the Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under the sections 28 to 44C and 57 of the Act in computing the income referred in section 115A(1) of the Act. If there is any loss in the PE, the same can be set off against the Gross income of FTS. Provisions of section 115A(3) does not allow any expenditure or allowance, the set off of loss is to be allowed or not? - It is clear that the legislature specifies the restrictions specifically in the statute. Therefore, the provisions of sec.115A is silent, hence, the assessee is eligible to set off of the loss of its PE against the income earned through other sources in India under the provisions of section 71 of the Act. As noticed a reported decision of the coordinate bench in the case of Foramer S.A [ 1994 (11) TMI 177 - ITAT DELHI-B] has considered the issue of allowability of depreciation, when the rate of depreciation and allowability of the same are not prescribed under the Treaty, the assessee may choose to apply the relevant provisions contained in the provisions of the Act applicable in the contracting state and also it was held that the a foreign national governed by avoidance of double taxation treaty is entitled to ask for application of provision of the Income Tax Act, to the extent they are more beneficial to that assessee. Similarly in this case, the issue involved is the issue of allowability of Set off of intra head of income, the similar provisions are not present in the relevant treaty, in case of absence of relevant provisions of set off, the assessee has liberty to follow the provisions of Income Tax Act, which is beneficial to it. In the absence of any provision of set off in the treaty, the relevant findings of the coordinate bench applicable to the present case mutatis mutandis. Decided in favour of assessee.

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• 2025 (4) TMI 1471
  Denial of deduction u/s 80-IB(10) - profits from a housing project - A.Y. 2008-09 - HELD THAT:- In assessee s own case for the assessment year 2007-08, it is evident that the claim of deduction u/s 80-IB(10) was allowed to the assessee only in respect of Wing-A to Wing-F of the housing project Aakash Nidhi , while in respect of Wing-G of the aforementioned housing project the claim of the assessee u/s 80-IB(10) was denied. Therefore, in the absence of any distinguishing facts pertaining to the claim of deduction u/s 80IB(10) in respect of housing project Aakash Nidhi in the present case, respectfully following the settled position in the assessee s own case AO is directed to grant the deduction u/s 80-IB(10) to the assessee proportionate to the profits earned from Wing-A to Wing-F of the housing project Aakash Nidhi . Accordingly, Ground No. 1 raised in assessee s appeal is partly allowed. Deduction claimed u/s 80-IB(10) was denied as so many flats were sold to the spouses of the existing flat owners - A.Y. 2010-11 - We are of the considered view that whether the flats were allotted to the spouse of the existing flat owners or the same were allotted to the major children of the flat owners requires verification. Therefore, we deem it appropriate to restore this aspect of the issue to the file of the jurisdictional AO for necessary examination of the details placed reliance upon by the assessee. Exemption u/s 80IB(10) on proportionate basis - housing project Aakash Nidhi comprising of seven buildings, namely Wing-A to Wing-G - HELD THAT:- Insofar as the claim of the assessee in respect of Wing-A to Wing-F deduction under section 80-IB(10) of the Act is allowed respectfully following the settled position in assessee s own case for the assessment year 2007-08. Further, insofar as the claim of the assessee in respect of Wing-G of the housing project Aakash Nidhi , we deem it appropriate to restore the issue to the file of the jurisdictional AO for de novo adjudication in light of the decision of the Hon ble Jurisdictional High Court in Vandana Properties [ 2012 (4) TMI 54 - BOMBAY HIGH COURT ] Same flat has been sold twice by the AO - Having considered the submissions of both sides, we deem it appropriate to restore this aspect of the issue also to the file of the jurisdictional AO for necessary verification to examine whether the same flat was re-sold or reallotted by the assessee. It is further directed that if, upon examination, it is found that the assessee merely re-allotted the same flat due to non-fulfilment of allotment conditions by the earlier allottee, then the AO is directed to grant deduction under section 80-IB(10) of the Act to the assessee in respect of the balance deduction claimed by the assessee in the year under consideration.

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• 2025 (4) TMI 1470
  Addition u/s 68 - unexplained cash - CIT(A) deleted addition instead making estimation of net profit of 4% of turnover - as per revenue assessee failed to discharge the onus to prove the identity, creditworthiness and genuineness of the parties to whom cash sales were made during the year - HELD THAT:- Since the assessee failed to prove the identity, creditworthiness and genuineness of the impugned bank deposits, the AO was justified in invoking the provisions of section 68 of the Act. Quantification of the addition - GP estimation - CIT(A) held that once the book results have been rejected by the AO, only the profit element there in could be added. Accordingly, he applied a flat rate of 4% of the total turnover - As decided in M/s ISMT Limited [ 2021 (12) TMI 549 - ITAT PUNE ] wherein it was observed that once the books of accounts of an assessee are rejected by the A.O under Sec. 145(3) of the Act, then he cannot rely upon on the same books of account for the purpose of making any addition, and the only course of action available with him is to determine the income by application of a flat rate of profit by taking into consideration the business conditions of the assessee as in comparison to profits disclosed by other assessee s in the similar line of business. CIT(A) has taken a very pragmatic view of the entire matter. His conclusion as stated above is based on correct appreciation of facts of the case which are in consonance with judicial findings as well. We therefore, hold that he has correctly appreciated the facts and his conclusion and application of the net profit on the total turnover being the addition, does not need any interference.

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• 2025 (4) TMI 1469
  Incorrect computation of Transfer Pricing Adjustment - HELD THAT:- We note that as per the final Assessment Order, ALP was determined at INR.438,44,64,758/- as against the actual sales of INR.426,48,22,811/-. As the difference between the aforesaid two amounts, which comes to INR.11,96,41,940/-, should have been added as APL Adjustment Whereas transfer pricing addition has been made. Therefore, we find merit in the contention of the Assessee that the actual transfer pricing adjustment challenged by way of Ground. TPO had selected final list of comparables consisting of four comparables - MPS Limited as functionally dissimilarities and in absence of segmental data, MPS cannot be taken as a comparable. Therefore, respectfully following the decision of the Tribunal in the case of the Appellant for the AY 2017-2018, we direct the AO/TPO to exclude MPS Limited from the list of comparables. Inclusion/exclusion of R. Systems International Limited - We direct the Assessing Officer/TPO to include R. Systems in the list of comparable after examining the functional comparability keeping in view that TNMM has been adopted as the most appropriate method. Short grant of credit for Dividend Distribution Tax (DDT) - On perusal of the said application we find that the Appellant has filed before the AO copy of challans for deposit of DDT. Accordingly, the AO is directed to grant credit of DDT after verification of the aforesaid challans as per law and re-compute consequential interest under Section 115P of Act, if any, and thus, dispose off the aforesaid rectification application.

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• Service Tax

• 2025 (4) TMI 1468
  Time limitation for issuance of SCN - impugned order issued after a substantive delay of approximately five years and ten months which is hit by Section 73 (4B) of the Finance Act, 1994 - HELD THAT:- In Kanak Automobiles Private Limited case [ 2024 (4) TMI 1223 - PATNA HIGH COURT] , the learned co-ordinate Bench has agreed to the said submission to the extent that the period of limitation is not absolute period stated in clause (b) of sub-section (4B) of Section 73 of the Act of 1994, but then a question arises as to whether a duty has been cast upon the Department to show that it was not possible to pass an order determining the amount within one year from the date of notice in respect of cases falling under the proviso to sub-section (1) or the proviso to sub-section (4A) of the Act of 1994. This Court has taken a view that in an appropriate case, this would be a matter of fact which would be required to be looked into in the context of a particular case. There is a consistent view on this point that the time frame of six months/one year as mentioned in Section 73 (4B) cannot be extended for an inordinate period. In this case, it is over five years and the Revenue has failed to explain as to how such a delay has taken place. Conclusion - i) The impugned order-in-original imposing service tax liability, interest, and penalty was passed beyond the prescribed limitation period and is therefore liable to be quashed. ii) The Revenue failed to demonstrate that it was not possible to pass the order within the one-year period prescribed by Section 73(4B). Application allowed.

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