TMI Tax Updates - e-Newsletter
April 6, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Law of Competition PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. GST- WHETHER TIME LIMIT FOR AVAILING INPUT TAX CREDIT (ITC) UNDER SECTION 16(4) IS EXHAUSTIVE?

   By: RAMESH JENA

2. GST registration cannot be cancelled with retrospective unless satisfied with sufficient reasons

   By: Bimal jain

3. INTERNATIONAL AND NATIONAL LEGAL FRAMEWORKS FOR CORPORATE GOVERNANCE IN HEALTHCARE

   By: Sankalp Mirani

4. TAXABILLITY OF PERSONAL GUARANTEE AND CORPORATE GUARANTEE IN GST

   By: DR.MARIAPPAN GOVINDARAJAN

5. GST Registration not to be cancelled based on incorrect field visit report

   By: Bimal jain

News

1. DPIIT organises Workshop on ‘Integration of Economic/User Ministries/Departments on PM Gatishakti National Master Plan’

2. Monetary Policy Statement, 2024-25 Resolution of the Monetary Policy Committee (MPC) April 3 to 5, 2024

3. Functionalities to file commonly used ITRs enabled by CBDT on 1st April, 2024

Notifications

Customs

1. 27/2024 - dated 4-4-2024 - Cus (NT)

Rate of exchange of one unit of foreign currency equivalent to Indian rupees–Supersession Notification No. 24/2024-Customs(N.T.), dated 26th March, 2024

DGFT

2. 03/2023 - dated 5-4-2024 - FTP

Supply of essential commodities to the Republic of Maldives during 2024-25

GST - States

3. 193747/2024/02(120)/XXVII(8)/2023/CTR-16 - dated 27-2-2024 - Uttarakhand SGST

Amendment in Notification No. 531/2017/ 9(120) /XXVII(8)2017 dated the 29th June, 2017

4. 193744/2024/02(120)/XXVII(8)/2023/CTR-15 - dated 27-2-2024 - Uttarakhand SGST

Amendment in Notification No. 528/ 2017/9(120)/XXVII (8)/2017 dated the 29th June, 2017

5. 193742/2024/02(120)/XXVII(8)/2023/CTR-14 - dated 27-2-2024 - Uttarakhand SGST

Amendment in Notification No. 526/2017/9(120)XXVII(8)/2017 dated the 29th June, 2017

6. 193734/2024/02(120)/XXVII(8)/2023/CTR-12 - dated 27-2-2024 - Uttarakhand SGST

Amendments in the notification of the Government of Uttarakhand, Finance Section-8, No.525/ 2017/9(120)/XXVII(8)/2017 dated the 29th June, 2017

Highlights / Catch Notes

GST

• Challenge to CGST Time Extension for Show Cause Notice Amid Covid-19; Court Halts Enforcement Pending Review.

  Case-Laws - HC : Validity of extension of time limit for issuance of SCN under GST Act - The petitioner challenged a notification issued under Article 226 of the Constitution of India, which extended the time limit under Section 73(10) of the CGST Act for certain financial years. The petitioner argued that the conditions precedent for the notification were not met, as their time limit for examining the annual return had already expired before the notification's issuance. The CGST standing counsel justified the extension of timelines citing the challenges posed by the Covid-19 pandemic. The court issued a notice for further examination of the issues raised and decided to halt the enforcement of the assessed amount against the petitioner until further orders, considering similar ongoing cases in other courts.
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• Firm's GST Registration Revived: Court Allows 30-Day Window for Revocation Amid Non-Filing Issues, Subject to Penalties.

  Case-Laws - HC : Cancellation of registration of Firm - The case involved a challenge to the cancellation of the petitioner's firm's GST registration due to non-filing of returns for a continuous period. The petitioner sought relief from the High Court to quash the cancellation order. Despite arguments from the opposing counsel regarding the lapse of statutory time limits, the Court recognized the importance of allowing businesses opportunities for restoration and revocation of registration. Consequently, the Court granted the petitioner permission to file an application for revocation of cancellation within 30 days, subject to payment of statutory penalties or fines.
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• Court Rules Lack of Show Cause Notice Violates Natural Justice; Orders Quashed, Case Sent Back for Fair Process.

  Case-Laws - HC : Violation of principles of natural justice - mandatory SCN was not served - provisional attachment of property - The respondent defends the legality of the actions, asserting compliance with relevant provisions. However, the High Court finds in favor of the petitioner, ruling that the absence of a show cause notice renders subsequent proceedings void. Emphasizing the importance of procedural fairness and adherence to due process, the Court quashes the impugned orders and notices, including the provisional attachment of the petitioner's bank account. The matter is remitted back to the Adjudicating Authority for further proceedings in accordance with the Court's directives.
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• Technical Glitch Violates Natural Justice: Wrong Email Address Denies Fair Hearing, Court Overturns Decision.

  Case-Laws - HC : Violation of principles of natural justice - technical glitch - Despite the Department's submission that the petitioner had been informed in advance about the correct email address, the notices were still sent to the wrong address due to an error. Consequently, the High Court finds that the petitioner was not afforded a fair opportunity for a personal hearing, primarily due to technical errors in the communication process. - Therefore, the High Court sets aside the OIO on the grounds of violating principles of natural justice.
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Income Tax

• Court Protects Vested Rights Against Retrospective Legislative Changes; Invalidates Extra Eligibility Criteria.

  Case-Laws - HC : Ceasure of income tax settlement commission - restriction to the filing of the application before the Interim Board for Settlement - The Court found that the retrospective legislative changes could not negate the petitioner's vested rights to file a settlement application, particularly when such applications were made before the enactment of the Finance Act, 2021. It was held that the administrative actions and notifications that imposed additional eligibility criteria, not rooted in the Act, were invalid. - The Court quashed the contested notice and notification, directing that the petitioner's application be considered and disposed of in accordance with the law.
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• Penalty Overturned: Court Finds No Evidence of Concealment or Excess Consideration in Tax Settlement Case.

  Case-Laws - HC : Penalty imposed by the Settlement Commission u/s 271(1)(c) - The petitioner argued against the penalty, citing lack of mens rea and the absence of evidence showing awareness or receipt of any excess consideration. The court examined the disclosures made by the petitioner, discrepancies in stamp duty valuation, and the petitioner's explanation regarding ignorance of the sale deed executed by the Power of Attorney holder. Ultimately, the High Court found that the element of concealment was not established, especially considering the lack of independent evidence showing receipt of excess consideration. Consequently, the court set aside the penalty imposed by the Settlement Commission.
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• Reassessment Invalid: Court Rules Notices and Orders Unsustainable Due to Lack of Jurisdictional Pre-conditions.

  Case-Laws - HC : Validity of Reopening of assessment based on order passed u/s 263 - The Court found that the reassessment proceedings lacked the satisfaction of jurisdictional pre-conditions and were based solely on an order that had been set aside by the Income Tax Appellate Tribunal. Therefore, the notices and order issued by the Assessing Officer to reopen the assessment could not be sustained. The Court emphasized that once a query is raised during the assessment proceedings and answered by the assessee, it is deemed to have been considered and accepted by the Assessing Officer.
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• Petition for Delay Condonation in Tax Return Denied; Court Finds No Genuine Hardship, Cites Late Filing History.

  Case-Laws - HC : The case involved a petitioner seeking relief under Article 227 of the Constitution regarding the rejection of their application for condonation of delay in claiming a significant loss in their income tax return. Despite arguments citing genuine hardship and procedural lapses, the High Court upheld the decision of the respondent authority. The Court interpreted Section 119(2)(b) of the Income Tax Act, finding that the delay could not be condoned as the petitioner had not made the claim belatedly. Moreover, the petitioner's failure to demonstrate genuine hardship and their habitual late filing of returns further weakened their case.
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• Court Overturns Pre-Deposit Orders; Calls for Reassessment of Stay Applications Following NASSCOM Principles.

  Case-Laws - HC : Stay of demand - direction to depositing 40% of the outstanding demand - The court found the stance of requiring a 20% pre-deposition as a precondition for stay consideration, as adopted by the respondents, to be legally unsound. Further, it was highlighted that the PCIT exacerbated the petitioner's burden by demanding a 40% deposit without assessing the merits or hardship entailed. The High Court quashed the orders dated 22 November 2021 and 27 February 2024, remanding the matter to the AO for fresh consideration of the stay applications in accordance with the legal position elucidated in the NASSCOM judgment and without prejudice to the merits of the petitioner's challenge.
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• Sections 153A, 153C of Income Tax Act Override Regular Assessment; Section 153C Applies to Third-Party Seized Material.

  Case-Laws - HC : Reopening of assessment v/s assessment u/s 153C - The High Court concludes that both Sections 153A and 153C have an overriding effect on regular provisions for assessment or reassessment under Sections 139, 147, 148, 149, 151, and 153. - The High Court clarifies that Section 153C applies when seized material relates to or belongs to a person other than the one on whom the search was conducted or requisition made. The Court emphasizes that Section 153C does not render Section 148 redundant but rather provides a specific procedure in certain cases. It asserts that the Department can resort to Section 148 when there is no incriminating material found during the search or requisition.
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• Tribunal Supports Best Judgment Assessment but Rejects Unexplained Cash Credit Addition, Calls for Fair Income Estimation.

  Case-Laws - AT : Rejection of the books of accounts - best judgment assessment u/s 144 - addition of the sales made in cash on account of unexplained cash credit u/s 68 - While the rejection of books of accounts was upheld, the tribunal disagreed with the addition of unexplained cash credit under section 68, emphasizing the necessity for a fair and scientific estimation of income. They directed the Assessing Officer to delete the addition made under section 68, highlighting inconsistencies in the assessment process.
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• Tribunal Confirms Deductions for Storage Tanks, Allows Share Issue Expenses, and Analyzes Exempt Income Expense Allocation.

  Case-Laws - AT : Deduction u/s. 80IA(4)(i) on storage tank MDI and storage tank EDA - By affirming the eligibility for deductions u/s 80IA(4) for the specialized storage tanks, the tribunal underscored the broader interpretation of infrastructure facilities in the context of port operations. The decision to allow share issue expenses under section 35D reiterates the acceptance of capital nature expenses pre-business commencement. Meanwhile, the nuanced approach in dealing with section 14A disallowances reflects the tribunal's acknowledgment of the complexity surrounding the allocation of expenses towards earning exempt income.
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• Tribunal Condones Appeal Delay, Criticizes Tax Officer and CIT(A) for Inadequate Investigation; Orders Fresh Review.

  Case-Laws - AT : Condonation of delay filling appeals - The Tribunal, after thorough analysis, decided to condone the delay, considering the principle of substantial justice. It also found shortcomings in the AO's actions, including inadequate investigations and discrepancies in assessments. Additionally, it criticized the CIT(A) for not properly considering additional evidence and not adjudicating on the merits of the case. Ultimately, the Tribunal set aside the order of the CIT(A) and remanded the case for a fresh adjudication, allowing the appeal for statistical purposes.
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Customs

• Tribunal Dismisses Revenue's Appeal for Penalty on 'Sweet Pearl P200' Classification Due to Insufficient Proof.

  Case-Laws - AT : Levy of penalty - Bill of Entry for clearance of ‘Sweet Pearl P200’ classified under 29054900 - Revenue reclassified the goods under 21069060 - The burden of proof was on Revenue to justify the reclassification, which they failed to do adequately. The Tribunal upheld the appellant's classification, emphasizing the importance of Revenue's burden of proof and the correctness of the proposed classification. The appeal by Revenue for imposing a penalty was dismissed.
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• Tribunal Rules Insufficient Evidence for Confiscation of Mosquito Repellents, Garments, and HCFC Gas Cylinders.

  Case-Laws - AT : Smuggling - Absolute Confiscation - The Appellate Tribunal found that the Customs department failed to prove that the mosquito repellents and ladies garments were smuggled items. The department did not provide sufficient evidence to establish the smuggled nature of these goods. Additionally, these items were not listed as prohibited items under Section 123 of the Customs Act, 1962. Therefore, the Tribunal ruled that these goods cannot be confiscated. - Regarding the green-colored refrigerant gas cylinders containing HCFC gas, the Tribunal acknowledged that these were restricted items but not prohibited items. Merely stating that the goods could only be manufactured in China was deemed insufficient to justify their confiscation. Hence, the Tribunal held that the HCFC gas cannot be confiscated.
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• Importer Over-Declared Value Due to Supplier Error; Tribunal Overturns Confiscation and Penalties, No Deception Found.

  Case-Laws - AT : Confiscation of goods - Redemption fine - Imposition of penalty - Valuation dispute - The case involved the importation of machinery where the foreign supplier mistakenly shipped an incorrect quantity of machines. The appellant declared the assessable value based on the purchase order without knowledge of the error. The Tribunal noted that the importer had no knowledge of the mistake and had actually over-declared the assessable value, indicating no intention to deceive. Therefore, it overturned the confiscation of goods, redemption fine, and penalty imposed.
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• Tribunal Rules in Favor of Appellant: Misdeclared Goods Abandoned, Redemption Fine Overturned, Duty Re-credit Granted.

  Case-Laws - AT : Seeking Permission to abandon the goods and remission of duty - The case involved the misdeclaration of goods where the appellant received Stone Chips instead of Aluminium Alloy Ingots. They sought permission to abandon the goods and remission of duty, which was initially granted by the Adjudicating Authority. However, the Commissioner (Appeals) imposed a redemption fine, which the Tribunal deemed unjustified as the goods were abandoned, not redeemed. The Tribunal also granted the appellant's request for re-credit of duty, affirming their entitlement due to the incorrect shipment received.
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• Tribunal Overturns Penalties for Customs Broker in Unauthorized Document Case, Citing Lack of Contraband Knowledge.

  Case-Laws - AT : Levy of penalty on Customs Broker - Accepting documents without proper authorization - The Department argued that this constituted abetment of the export of prohibited goods. - While the appellants were found to have violated certain Customs Regulations by failing to verify exporter details and accepting documents without proper authorization, the tribunal concluded that they had no knowledge of the contraband concealed in the cartons. As a result, the penalties imposed on the appellants were deemed unjustified and were set aside.
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• Goods Classified as Electronic Toys, Not Data Processing Machines, Affecting Duty Rate Despite Technological Claims.

  Case-Laws - AT : Classification - Rate of duty - Toy or not - Goods claimed to be ‘automatic data processing machine’ in heading 8471 - Bureau of Indian Standards (BIS) - Despite the appellant's assertions of technological advancements and regulatory approval, the Tribunal ultimately determines that the goods should be classified as electronic toys based on their primary function of providing amusement and entertainment.
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• Tribunal Overturns Order on Aluminium Powder Valuation; Case Sent Back for Further Review on Undervaluation Claims.

  Case-Laws - AT : Valuation - Imported 20 MT of Aluminium powder 99.7% - The Department contended that the declared value was low, considering it a related party transaction due to the overseas supplier's connection to the appellant. The appellant argued that they paid duty under protest and provided evidence such as details of contemporaneous imports, which were not considered by the authorities. The Tribunal found merit in the appellant's arguments, particularly noting the lack of detailed explanation for the enhancement of value. Consequently, they set aside the impugned order and remanded the matter to the adjudicating authority for reconsideration.
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Corporate Law

• Illegal Share Transfers and Director Appointment: Criminal Proceedings to Continue Despite NCLT Findings Overturn.

  Case-Laws - HC : Maintainability of Criminal proceedings - illegal allotment of shares - illegal appointment of petitioner as a director and transfer of shares - The court highlighted the distinct domains of the NCLT and criminal courts, stressing that findings in civil adjudications (NCLT) do not automatically negate criminal prosecutions. - The court scrutinized the allegations of digital signature misuse, unauthorized share transfers, and surreptitious changes in directorship. It found that these allegations, supported by evidence collected during the investigation, merited closer examination under criminal law, contrary to the trial court's decision which leaned heavily on NCLT findings. - n a pivotal move, the High Court set aside the trial court's order, remanding the matter for a fresh evaluation.
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• Appellant's Bid-Rigging Denial Overturned; Tribunal Upholds Commission's Anti-Competitive Findings.

  Case-Laws - AT : Anti-competitive agreements - Cartelisation - While other parties admitted to the contravention, the appellant denied involvement and challenged the Commission's decision. They argued that they only submitted bids for three tenders without colluding with other cartel members. However, evidence presented, including confessions from cartel members and appellant's employees, suggested their active participation in bid rigging activities. Despite the appellant's claim of merely receiving information from the cartel, the Tribunal found their continuous receipt of emails without protest indicative of their tacit agreement with cartel activities. The Tribunal dismissed the appeal, affirming the Commission's decision based on the evidence presented.
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IBC

• Tribunal Dismisses Application Citing Genuine Dispute Over Debt, Upholds Prior Decision Against Insolvency Code Use.

  Case-Laws - AT : Dismissal of Section 9 application - pre-existing dispute - The Tribunal examined the evidence, including email correspondences, and concluded that a debtor-creditor relationship existed between the parties. Moreover, the Tribunal found that there was a genuine pre-existing dispute regarding the alleged debt, which precluded the application of the Insolvency and Bankruptcy Code. As a result, the Tribunal upheld the decision of the Adjudicating Authority to dismiss the petition.
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PMLA

• CEO Denied Anticipatory Bail in Money Laundering Case Due to Serious Charges and Non-Compliance with Court Summons.

  Case-Laws - HC : Seeking grant of anticipatory bail - Money Laundering - The allegations against the applicant, as CEO of a company, included signing agreements facilitating fund transfers, implicating him in money laundering activities. Despite the applicant's arguments regarding his role as a director and the timing of amendments to PMLA provisions, the court found a prima facie case against him. It emphasized the broad scope of PMLA provisions and the continuing nature of money laundering offenses. Additionally, the court highlighted the liability of directors for offenses occurring during their tenure. Due to the seriousness of the allegations, failure to prove innocence, and non-compliance with court summons, the court dismissed the application for anticipatory bail.
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Service Tax

• Appellant's Delayed Invoicing Not Suppression; Service Tax Paid on Finalization, Demand for Suppression Deemed Unsustainable.

  Case-Laws - AT : Taxability - advance payments - The Tribunal observed that the appellant failed to issue invoices/bills upon receiving payments for the services provided, as mandated by the Service Tax Rules. However, it was found that the appellant paid the service tax upon the finalization of the services contracted with government departments, implying no evasion of service tax occurred. - The Tribunal noted that the appellant’s failure to issue invoices in a timely manner did not amount to suppression of facts, as the service tax was ultimately paid. Therefore, the demand based on suppression was found to be unsustainable.
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Central Excise

• Tribunal Denies Cenvat Credit Refund Claim Due to Non-Registration and Post-Deadline Duty Payment.

  Case-Laws - AT : Refund claim lying in cenvat credit on CVD and BCD paid by the appellant - The Tribunal observed that the appellant wasn't registered under the Central Excise Act, 1944, during the relevant period. Therefore, they were not eligible for cenvat credit under the existing law. Despite transitional provisions permitting credit transfer on the appointed day (01.07.2012), the appellant had paid duties after this date. Hence, they were ineligible for the credit prayed for under transitional provisions. The Tribunal upheld the rejection of the refund claim, citing the conditional nature of the import and its exclusive use for export as per Foreign Trade Policy.
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• Tribunal Rules Discounts Must Be Considered in Goods' Assessable Value, No Intent to Evade Duty Found.

  Case-Laws - AT : Valuation of goods - admissibility of discounts - adjustment of list price by giving different rebates / discounts referred to as Movement Plan Rebate (MPR) - The Tribunal upheld the appellant's contention that discounts passed on to buyers and known at the time of clearance should be considered for determining the assessable value. Additionally, they ruled in favor of the appellant regarding the limitation on demand, citing the absence of intent to evade duty and the non-disclosure of rebate adjustments in filed returns.
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Case Laws:

• GST

• 2024 (4) TMI 216
  Challenge to assessment order - discrepancy between the GSTR 1 statement and the GSTR 3B returns - imposition of 100% penalty by invoking Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017 - HELD THAT:- On perusal of the impugned order, it is evident that the tax liability was arrived at by noticing the discrepancy between the GSTR 7 and 1 returns, on the one hand, and the GSTR 3B returns on the other. Penalty has been imposed at 100% of the tax dues by invoking Section 74. It is also noticeable that the petitioner remitted a sum of Rs. 3,00,000/- on 12.04.2023, which is prior to the date of issuance of the impugned order. This sum represents about 10% of the total tax dues. The petitioner has agreed to remit a further sum of Rs. 3,00,000/-, which would aggregate to about 20% of the tax dues. In the overall facts and circumstances, since the petitioner was not heard before the impugned order was issued, the interest of justice warrants the provision of an opportunity to the petitioner. The impugned order dated 19.04.2023 is set aside subject to the condition that the petitioner remits an additional sum of Rs. 3,00,000/- towards the tax demand within three weeks from the date of receipt of a copy of this order - Petition disposed off.

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• 2024 (4) TMI 215
  Validity of extension of time limit for issuance of SCN under GST Act - Validity of N/N. 09/2023-CT dated 31.03.2023 - Notification challenged on the ground that the conditions precedent provided in explanation to Section 168(A) was not present on the date when the notification was issued - HELD THAT:- As final order has already been passed and taking note of the fact that similar issues are being examined by various Courts of the Country, the Court is inclined to provide that till further orders of the Court, the recovery of the amount assessed against the petitioner shall not be enforced. List on 10. 05. 2024.

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• 2024 (4) TMI 214
  Violation of principles of natural justice - the impugned order does not take into consideration the reply submitted by the petitioner and is a cryptic order - under declaration of output tax - excess claim Input Tax Credit [ITC] - ITC claimed from cancelled dealers - returns defaulters and Tax non-payers - HELD THAT:- The observation in the impugned order dated 30.12.2023 is not sustainable for the reasons that the reply filed by the petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was unsatisfactory, incomplete and not duly supported by adequate documents. He merely held that the reply is not duly supported by adequate documents, clear and unsatisfactory which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. Further, if the Proper Officer was of the view that the reply is not clear and unsatisfactory and if any further details were required, the same could have been specifically sought from the petitioner. However, the record does not reflect that any such opportunity was given to the petitioner to clarify its reply or furnish further documents/details. The matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 30.12.2023 is set aside - Petition allowed by way of remand.

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• 2024 (4) TMI 213
  Retrospective cancellation of GST registration of petitioner - notice does not specify any cogent reason - principles of natural justice - HELD THAT:- The SCN and the impugned orders are bereft of any details and accordingly the same cannot be sustained. Neither the Show Cause Notice, nor the orders spell out the reasons for retrospective cancellation - SCN also does not put the petitioner to notice that the registration is liable to be cancelled retrospectively. Accordingly, the petitioner had no opportunity to even object to the retrospective cancellation of the registration. In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, it is not considered apposite to examine this aspect but assuming that the respondent s contention is required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. The SCN dated 29.09.2022 and impugned orders dated 13.10.2022 and 11.10.2023 cannot be sustained and are accordingly set aside - GST registration of the petitioner is restored - Application disposed off.

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• 2024 (4) TMI 212
  Cancellation of registration of Firm - failure to furnish the returns for a continuous period of six months - seeking to avail the option under section 30 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The primary object behind the GST Act is levy and collection of tax on intra State supply of goods or services and the matters connected therewith or incidental thereto. Now the cancellation of registration shall ensue serious civil consequences for the petitioner and his entire business shall come to a standstill. The provisions under sections 30, 45, 46, 47 etc. are intended at providing opportunity to the defaulter Firm so as the Firm continues its business. Therefore, a liberal approach is required to be taken in the matters like the present proceeding notwithstanding the period prescribed under section 30 of the GST Act having been lapsed. Having thus examined the materials on record, it is opined that a permission to the petitioner to file an application under section 30 of GST Act can be granted subject to the petitioner making payment of statutory penalty/fine, if any, for moving the application under section 30 of the GST Act. The present writ petition succeeds to the extent that the petitioner may file an application under section 30 of the GST Act within a period of 30 days and the period of limitation shall be counted from the date of this order.

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• 2024 (4) TMI 211
  Violation of principles of natural justice - mandatory SCN was not served - provisional attachment of property - HELD THAT:- The Central Board of Indirect Taxes and Customs has issued Master Circular No. 1053/2/2017-CX setting out detailed guidelines for the authorities under the Act as to how a show cause notice under Section 11A of Central Excise Act, 1944/ Section 73 of the Chapter V of the Finance Act, 1994 should be issued. In accordance with Section 6 thereof and Section 27 of the Bihar and Orissa General Clauses Act, 1917, the said circular will apply in the case of issuance of show cause notice under the Act - It further transpires from record that an admission in the hands of the answering deponent has been made to the effect that no opportunity of hearing was extended to the Petitioner. It is a settled proposition of law that any proceeding which has civil and penal consequences, principle of natural justice has to be read into before issuing a final order. From record it appears that the order impugned is dated 14.07.2020, which has never been served upon the petitioner in the manner prescribed under the Act and that too during the Covid-19 period. The power to attach the bank account has to be only by way of an order passed by the Commissioner in order to protect the interest of government revenue and the cash credit account not being as asset of the petitioner, the same could not have been attached in any eventuality. The exercise of power purportedly under Section 79 is nothing else, but a misuse of power vested in the authority under the Act. The respondents have failed to say and satisfy as to how the authority of law has been followed and when the petitioner has never been extended any opportunity of hearing before passing of the order complained of, nor have been communicated before attachment of the bank account. Now it is a settled principle of law that any authority has to follow the principle of natural justice and in the instant case the alleged show cause notice in terms of DRC-01 has been issued under Rule 142 of JGST Rule 2017, demanding tax, interest and penalty. However, from record it would transpire that the summary show cause notice in terms of Rule 142 (1) has not been complied with which is mandatory under Section 73/74 of JGST Act 2017. It is clear from the plain language of Section 83(2) of the CGST Act that the operation of an order provisionally attaching the bank account would cease to be operative after the expiry of the statutory period of one year. As stated hereinabove at best only the interest can be recovered from the petitioner for delay filing of return but demand of the entire amount is illegal and liable to be quashed and set aside. The impugned order/notice dated 14.07.2020 and subsequent GST DRC-07 dated 16.07.2020, are hereby, quashed and set aside. Consequently, the letter of attachment/ freezing bank account of the petitioner being account no. 07180500010245 with the UCO Bank, Tata Kandra Rd. Dist. Saraikela-Kharsawa, Jharkhand, is also quashed - matter is remitted back to the Adjudicating Authority to issue statutory notice to the petitioner and pass a fresh order with respect to interest after verifying the records after following due process of law strictly in accordance with the provisions of the Act. Application allowed.

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• 2024 (4) TMI 210
  Violation of principles of natural justice - deprivation of the right of personal hearing or not - notices for personal hearing not served - technical glitch - HELD THAT:- It appears to be a case where because of technicalities, the notices for personal hearing seems to have not been served upon the petitioner and he has not been provided with a fair opportunity of personal hearing. The Order-in-Original dated 28.11.2023, to the aforesaid extent deserves to be set aside and it is ordered accordingly. However, the impugned order is interfered with only on the ground of it being violative of principles of natural justice. The petitioner is directed to enter appearance before the authorities concerned on 07.03.2024 for personal hearing. Thereafter, the authorities concerned shall proceed further and pass appropriate fresh order in accordance with law. It is made clear that there shall be no necessity for issuance of any further notice in this regard to the petitioner by the Department. Petition allowed.

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• Income Tax

• 2024 (4) TMI 209
  Delay in filling appeal before Supreme court - Denial of principles of natural justice - Assessee permitted to file revised returns - Claim for benefit of Section 10(38) - additions u/s 68 and 69 - Assessee not claiming exemption u/s 10(38) at the stage of the assessment proceedings Assessee turned around and make such claim of wanting to cross-examine persons make adverse statements against the Assessee at the stage of the appeal before the ITAT - As decided by HC [ 2023 (2) TMI 392 - ORISSA HIGH COURT] ITAT was justified in accepting the plea of the Assessee that the failure to adhere the principles of natural justice went to the root of the matter. HELD THAT:- There is gross delay of 303 days in filing this special leave petition. The explanation offered is not sufficient in law to condone the delay. Hence, the application seeking condonation of delay is dismissed. Consequently, the special leave petition is also dismissed keeping open the question of law, if any. In doing so, we have also followed the earlier order of this Court in DIPANSU MOHAPATRA [ 2024 (3) TMI 217 - SC ORDER]

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• 2024 (4) TMI 208
  TDS u/s 194I OR 194C - External Development Charges ( EDC ) paid to Haryana Urban Development Authority ( HUDA ) - As decided by HC[ 2023 (4) TMI 399 - DELHI HIGH COURT] Petitioners in these petitions were required to deduct TDS from EDC under Section 194-I HELD THAT:- Following the order passed in the case of Joint Commissioner of Income Tax vs. M/s Experion Developers Private Limited [ 2024 (2) TMI 894 - SC ORDER] and the order passed in Principal Commissioner of Income Tax (Central III) and Anr. vs. BPTP Limited [ 2021 (2) TMI 623 - SC ORDER] this special leave petition also stands dismissed.

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• 2024 (4) TMI 207
  Delay filling appeal before SC - Addition u/s 40A(3) - payment in cash - purchase of stock in trade - Decision of the Third Member of ITAT confirmed - HC held [ 2022 (7) TMI 339 - CALCUTTA HIGH COURT] revenue does not state that any cash transaction took place. HELD THAT:- There is gross delay of 521 days in filing this special leave petition. The explanation offered is not sufficient in law so as to condone the said delay. In the circumstances, the application seeking condonation of delay is dismissed. Consequently, the special leave petition also stands dismissed.

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• 2024 (4) TMI 206
  Income accrued / taxable in India - Royalty u/s 9(1)(vi) r.w.a.12 of the Indo US DTAA - licensing of software products of Microsoft in the Territory of India by the Respondent - whether taxable in India as Royalty u/s 9(1)(vi) of the Act read with Article 12 of the Indo US DTAA? As decided by HC [ 2022 (3) TMI 482 - DELHI HIGH COURT] issue raised in the present appeals is no longer res integra as the Supreme Court in Engineering Analysis Centre of Excellence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT] as held that amounts paid by resident Indian end-users/distributors to nonresident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and were not liable to deduct any TDS u/s 195 HELD THAT:- There is gross delay of 636 days in filing this special leave petition. We note that the issues raised in this special leave petition have been answered by a judgment by in Engineering Analysis Centre of Excellence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT] Thus, following the aforesaid order/judgment, the special leave petition stands dismissed both on the ground of merits as well as on delay. In doing so we have also followed the order passed in M/S. GRACEMAC CORPORATION [ 2023 (8) TMI 98 - SC ORDER]

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• 2024 (4) TMI 205
  Income taxable in India - PE in India - Liaison Office in India - income directly or indirectly attributable to the branches/offices taxable in India or not? - whether no income is liable to attributable in India even MIPL is taken as Dependent Agency PE to the assessee in India? - As decided by HC [ 2022 (11) TMI 1346 - DELHI HIGH COURT] Liaison office of the assessee did not constitute a Permanent Establishment AND MIPL is not performing additional function and in absence of material, it cannot be taken as dependent agency PE to the assessee liable to tax in India. HELD THAT:- There is gross delay of 395 days in filing this special leave petition. Nevertheless we are not inclined to interfere in the matter. Hence, the special leave petition also stands dismissed on the ground of delay as well as on merits.In doing so, we are following our earlier order in M/S MITSUI AND CO. [ 2018 (7) TMI 141 - SC ORDER] saying evidence produced by the AO does not show that the LOs of the Assessee carried on any activity which was not incidental and auxiliary in nature. With the consistent position in this regard continuing since 1977-78, in the absence of any evidence to suggest a change in the circumstances, there was no warrant for the AO and the CIT (A) to take a different view of the matter. - Decided in favour of assessee

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• 2024 (4) TMI 204
  Ceasure of income tax settlement commission - restriction to the filing of the application before the Interim Board for Settlement - Validity of the applications filed before the Settlement Commission - Effect/applicability of notification of the Finance Act, 2021 - Option to withdraw pending application - whether petitioner having made a valid application under Section 254C of the Act had a vested right of adjudication on the said application? HELD THAT:- When the Board itself feels that the date as prescribed in Section 245C(5) of the Act is required to be extended, there is no doubt that the provisions of Section 245C(5) of the Act are required to be read down. With respect to the impugned notification, the question in the present case is not of reading down of the notification, but the question is whether the notification goes beyond the provisions of the Act. If the notification goes beyond the provisions of the Act, then to that extent, the notification is clearly invalid and liable to be quashed. If, however, it is held that the notification does not impose a further condition de-hors the provisions of the Act, then the date of eligibility in the said notification is required to be read down to save it from being quashed. Therefore, the principles laid down by the Hon ble Apex Court in Shanmugavelu [ 2024 (2) TMI 291 - SUPREME COURT] , in our view, clearly support the case of petitioner. Retrospective legislation cannot affect the vested rights. When the Department has extended the last date from 1st February 2021 to 30th September 2021, it can only extend the deadline but cannot introduce a new concept of eligibility as on 1st February 2021 which is not there in the Act itself. Though the CBDT relaxed the rigours of the provisions of the Act for the benefit of assessees, it is not open to the CBDT to put in new rigours or impediments to the rights of an assessee in a Press Release or a notification which is contrary to the provisions of the Act. Though the legislature has the power to make laws with retrospective effect, that power cannot be used to deprive a person of an accrued right vested in him under a statute or under the Constitution. Sub-section (5) of Section 245C of the Act, even though inserted with retrospective effect from 1st February 2021, can be given effect to only after the date when the assent of the Hon ble President of India was received to promulgate the Finance Act, 2021. Sub-section (5) of Section 245C of the Act provides that no application shall be made under this section on and after 1st February 2021. Petitioner had already made the application on 18th March 2021 when sub-section (5) was not in the statute and hence, petitioner had made the valid application as per the provisions of the Act. The purport of sub-section (5) is not to make an application already filed after 1st February 2021 as invalid but it should be read as no application shall be made after 1st February 2021 once the assent of the Hon ble President of India has been received. But before receipt of the assent any application made by an assessee will not be hit by sub-section (5) of Section 245C of the Act. In the circumstances, the notice is hereby quashed and set aside and the impugned notification in so far as it seeks to make only those assessees eligible to file application before the Settlement Commission who were eligible as on 31st January 2021 is held invalid; and the application filed by petitioner before respondent no. 3 to be considered and disposed in accordance with law.

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• 2024 (4) TMI 203
  Penalty imposed by the Settlement Commission u/s 271(1) (c) - Power of Attorney holder executed the sale deed of immovable property but return of income filed by the petitioner did not include the capital gains arising therefrom, to any extent - as submitted no element of mens rea was alleged or established as neither the petitioner was aware of the sale of his property nor he has received any consideration through any mode nor the Revenue has made any allegations in that regard., also there is no evidence whatsoever of any amount having been received in excess of disclosed consideration HELD THAT:- In the first place, the assessee may never have been charged of practising concealment of material particulars of his income qua the proposed revision of Stamp Duty beyond Rs. 24,50,000/-. That liability came to be settled at Rs. 80,43,000/-. Since those facts had not unfolded, they were not known to the petitioner. Consequently, he could not have been saddled with a penalty for non-disclosure of such facts. The petitioner may never have been saddled to perform an impossible duty. A fact that was not know known to the petitioner may never have been disclosed by him. Second, as to imposition of penalty, corresponding to Stamp Duty assessed on value of sale consideration suffice to note that assessee had furnished explanation with respect to the same. According to the assessee, he was not aware of the sale deed executed by his Power of Attorney holder By observing conduct of the petitioner as contumacious and that he had clearly furnished inaccurate particulars, the Settlement Commission may never have substituted the requirement of reasoning with adjectives or by recording simple conclusion not supported by reasoning or finding as may lead to such conclusions. It was legally permissible to the Settlement Commission to consider imposition of the penalty under Section 271(1) (c) of the Act, yet in the facts of the present case, element of concealment of income was not established. Merely because addition may be made on the quantum side by invoking Section 50 C of the Act, it did not itself establish that such estimated consideration had actually passed on to the petitioner . Therefore, no conclusion of concealment may have arisen solely occasioned by that estimation of income by way of capital gains made by the Settlement Commission. In absence of any independent evidence to establish receipt of extra consideration and in absence of any finding to reject the fact explanation furnished by the petitioner, both as to ignorance of the sale deed executed by his Power of Attorney and also with respect to the actual consideration received, element of concealment was not established in the present case. Accordingly, the writ petition succeeds in part. The levy of penalty u/s 271(1)(c) of the Act under the order dated 27.10.2010 passed by the Income Tax Settlement Commission, is set aside. Decided in favour of assessee.

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• 2024 (4) TMI 202
  Validity of Reopening proceedings - jurisdiction to issue the notice u/s 148A(b) - Petitioner has been filing returns as a Non-resident - notice was issued by Respondent No. 1, Assistant Commissioner of Income Tax, Circle-32(1), Mumbai - information relies on the statement recorded during the course of search and seizure action conducted u/s 132 in the case of one Ashwin Kumar Mali - Assessee allegedly had entered into fictitious loan transactions with SEPL, which provides accommodation entries, which suggest income chargeable to tax has escaped assessment HELD THAT:- Petitioner replied by a letter in which Petitioner denied having any financial transaction. Petitioner explained that he had only taken loanwhich has also been repaid during the next financial year and since the amount was below Rs. 50,00,000/- and the assessment was being reopened after the expiry of three years from the end of relevant assessment year, under the provisions of Section 149(1)(d) of the Act no notice under Section 148 of Act could be issued. Petitioner also brought to the notice of Assessing Officer ( AO ), i.e., Respondent No. 1 that Petitioner has been an NRI since last six years and has been filing his Income Tax Returns as NRI and even the e-filing portal shows Petitioner s residential status as Non-resident . Hence, the jurisdiction would lie with Income Tax Officer (International Taxation), Ward-3(2)(1). In effect Assessee/Petitioner informed Respondent No. 1 that he had no jurisdiction to issue the notice under Section 148A(b) of the Act. AO has, in our view, taken an unacceptable stand that Assessee has not proved with substantial evidence and documents and has not been able substantiate his claim as an NRI. We also fail to understand what evidence Assessee has to show when Assessee makes the statement that in the income tax returns filed by him, his residential status appears as Non-resident . So also, in the income tax portal, his residential status shown as Non-resident . In fact the intimation under Section 143(1) of the Act issued to Assessee for AYs 2019-2020, 2021-2022, 2022-2023 and 2023-2024, all show the residential status of Petitioner as Non-resident . Therefore, we would not hesitate to observe that the stand taken by the AO is a dishonest stand. Respondent No. 1 thereafter passed the impugned order u/s 148A(d) in which, according to us, the AO has accepted that he had no jurisdiction, but because there was no time to mitigate the PAN at the stage it was, he went ahead and has issued the reassessment notice. Since in the affidavit-in-reply a stand is taken that the file can be transferred now to the AO who had jurisdiction over Petitioner, Dr. Shivram submitted, relying on Commissioner of Income Tax v. M.I. Builders (P.) Limited [ 2013 (7) TMI 654 - ALLAHABAD HIGH COURT] that the notice issued by Non-jurisdictional Assessing Officer is invalid, no records can be transferred when the proceedings were invalid ab-initio and such transfer cannot validate any proceedings taken in continuation thereof. This Court in Pavan Morarka [ 2022 (2) TMI 1094 - BOMBAY HIGH COURT] has held that a notice issued by an officer who did not have jurisdiction over Assessee, would be invalid. The fact that Petitioner has been filing returns as a Non-resident, cannot be disputed. The fact that the Income Tax Officer (International Taxation) would be the AO who had jurisdiction over Petitioner, cannot be disputed. Respondent No. 1 has also in effect admitted that he has no jurisdiction over Assessee, but he issued the notice because the information and PAN of Assessee were transferred to the charge of Respondent No. 1 at the fag end of March 2023 for issuing notice under Section 148A(b) of the Act and it was getting time barred by limitation on 31st March 2023 - We are not satisfied with the explanation offered of shortage of time and that still cannot give jurisdiction to the AO, who did not have jurisdiction. Reassessment proceedings set aside - Decided in favour of assessee.

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• 2024 (4) TMI 201
  Validity of Reopening of assessment based on order passed u/s 263 - reason to believe - scope of change of opinion - HELD THAT:- No notice can be issued u/s 148 of the Act unless there is information with the AO that income chargeable to tax has escaped assessment. The only information forming the origin of reason to believe escapement of income from assessment is contents of the order passed by the CIT. In the light of the aforesaid admitted position, as on date the order passed by the CIT does not survive, as being set aside by the ITAT, the very basis of the AO to reopen assessment and assume jurisdiction is misplaced and unjustifiable. Attempt to reopen assessment is based on a change of opinion or not? - Petitioner provided all the details as sought vide its reply dated 6th August 2018, which followed another letter by the AO seeking further information. Petitioner by its letter dated 26th September 2018 furnished further information as additionally sought by the AO. Thus, it is evident that Petitioner had disclosed completely and fully all relevant information to the satisfaction of the AO and the assessment order was passed. Be that as it may, the impugned notice is, in any case, based on the contents and findings of the CIT (International) Mumbai in his revision order, which order is already set aside by the ITAT. That the order passed by ITAT is subjected to a challenge before this Court does not aid the Department since there is no order passed by this Court staying the effect of the order. On the contrary, the AO himself has given effect to the ITAT order and passed an Order Giving Effect ( OGE ) to the ITAT order. In this view of the matter, the impugned notice is nothing but a change of opinion by the AO and as held in Aroni Commercials Limited [ 2014 (2) TMI 659 - BOMBAY HIGH COURT] a reopening based upon change of opinion is impermissible in law. We agree with the submissions that if change of opinion concept is given a go by, that will result in giving arbitrary powers to the AO to reopen assessments. It would in effect sanctify powers to review which he does not possess. We have no hesitation in holding that the notices issued u/s 148A(b), order passed u/s 148A(d) and notice issued under Section 148 of the Act to reopen the assessment for AY 2016 17 cannot be sustained. Decided in favour of assessee.

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• 2024 (4) TMI 200
  Power of CBDT u/s 119 to condone the delay in claiming loss - petitioner filed his return of income for the year 2015-16 belatedly u/s 139(4) - denial of carry forward the loss arising out of the derivative transaction as the same was not claimed in the return of income and added this amount to the income of the petitioner raising a demand on the said income. HELD THAT:- If the petitioner had made a claim belatedly then delay in making such claim can be condoned by the respondent no. 1 for purpose of permitting the petitioner to claim loss, so as to carry forward in the next year for set off. On perusal of the return of income along with the computation of income placed on record it is apparent that the petitioner has not made any claim for the loss incurred by the petitioner out of derivative transactions for Assessment Year 2015-16. It is also pertinent to note that at the time of assessment proceeding also the petitioner has not sought to file a revised return of income, claiming the carry forward of loss for the AY 2015-16. Assessment Order u/s 143(3) of the Act is already passed by the AO on 15.12.2017 for Assessment Year 2015-16. Therefore the Assessment for Assessment Year 2015-16 for all intents and purpose has come to an end and has achieved finality. Therefore, while exercising the jurisdiction under Section 119(2)(b) of the Act, the respondent no. 1 could not have condoned the delay to claim the loss to be carried forward when the same was not even claimed by the petitioner in the original return of income. Section 139(3) of the Act provides for filing return of income so as to enable the assessee to carry forward if the return is filed within time as per Section 139(1) of the Act. Therefore, there was no question to condone the delay to carry forward such loss by the petitioner, moreover, the petitioner has also failed to show any hardships, much less any genuine hardship for filing the return of income for Assessment Year 2015-16 belatedly on 29.03.2016. It is also appearing from the impugned order passed by the respondent no. 1 that the petitioner is habitual in late filing the return of income from Assessment Year 2011-12 to 2017-18 in the month of March of the relevant Assessment Year only. No interference is called for in the impugned order passed by the respondent no. 1 under Section 119(2)(b) of the Act. The petition therefore being devoid of any merit is accordingly dismissed.

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• 2024 (4) TMI 199
  Disallowance u/s 14A - as per tribunal addition cannot exceed the exempt income earned by the assessee - HELD THAT:- Revenue submitted that Questions a, b and c of the proposed questions would be taken care of by the questions which are already admitted by this Court in [ 2022 (6) TMI 1468 - GUJARAT HIGH COURT] in case of the respondent. Accordingly, the following question is admitted - Whether in the facts and in the circumstances of the case and in law the Appellate Tribunal has erred in holding that disallowance under section 14A of the Act cannot exceed the exempt income earned by the assessees? Disallowance of losses booked in penny stocks - there was a price fluctuation in the stock exchange - whether CIT(A) and the Tribunal have committed an error by setting aside the addition made by the AO as the assessee failed to prove the genuineness of such transaction before the AO? - HELD THAT:- As considered the concurrent findings of fact arrived at by the CIT(A) and Tribunal and are in complete agreement with such findings to the effect that the assesse has proved the genuineness of the transactions and established on online trading platforms that it had no control whatsoever on share prices and thus, incurred losses in shares of Alang Industries Gas Ltd. It was also found by both the authorities that the assessee sold only the part of the shares and remaining shares have been held by the assessee in the subsequent assessment year also. With regard to shares of Kappac Pharma Ltd., it was rightly held by the Tribunal that since the market rate was lower, the assessee had incurred business loss though the shares are not sold. No substantial question of law.

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• 2024 (4) TMI 198
  Stay of demand - direction to depositing 40% of the outstanding demand - pre-condition for the consideration of application for stay - HELD THAT:- PCIT, rather than examining the challenge raised by the petitioner to the assessment orders and evaluating the prima facie merits of the challenge has in one sense placed it under a harsher burden of depositing 40% of the outstanding demand as opposed to the direction framed by the second respondent, which had merely insisted upon the petitioner depositing 20% as a pre-condition for the consideration of its application for stay. In any view of the matter, we find that both the authorities have failed to deal with the aspect of prima facie merits, likelihood of success and undue hardship. The impugned orders are consequently rendered wholly unsustainable on the aforesaid score alone. We accordingly allow the instant writ petition and quash the impugned orders passed by the second and first respondents respectively. The matter shall consequently stand remitted to the board of the AO which shall examine the applications for stay afresh and bearing in mind the legal position as enunciated in NASSCOM [ 2024 (3) TMI 773 - DELHI HIGH COURT]

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• 2024 (4) TMI 197
  Validity of reopening assessment - non service of notice - as alleged petitioner was not provided with an opportunity before re-opening the assessment - A notice was sent to the address registered with the petitioner s PAN and also to the address shown as the petitioner s residential address in her sale deed but petitioner claims that she is not residing in any of these addresses and has failed to avail the opportunity. It is the case of the petitioner that she purchased an immovable property at Chennai for a sale consideration on the file of the Sub Registrar, Neelangarai, Chennai and of the total sale consideration, part sum was sourced through housing loan from ICICI Bank and the balance sum was received from her husband, who was a tax non-resident living abroad and earning income from consultancy assignments from Muscat, Oman and Atyrau, Kazakhstan. According to her, these are foreign source income having no tax liability in India. It is her further case that she is a Home Maker and since she purchased the property without earning any taxable income, she did not file any returns at that time and now, pursuant to the proceedings, she has filed the returns. HELD THAT:- Be that as it may, the issue is at the stage of enquiry and the petitioner would be provided with an opportunity of personal hearing. The arguments advanced by the petitioner has to be considered at the time of enquiry by the respondent. In view of the above position and in view of the decision of the Hon ble Supreme Court in Anshul Jain s case ( 2022 (10) TMI 3 - SC ORDER] this writ petition stands disposed of, with liberty to the petitioner to approach the respondent along with required materials. The respondent shall consider the case of the petitioner, the points raised by her in the reply and thereafter, pass appropriate orders, on merits

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• 2024 (4) TMI 196
  Reopening of assessment v/s assessment u/s 153C - Applicability of Sections 153C and 148 of the Act in case of seizure of material in search or requisition of books-documents relating to assessee other than on whom the search was conducted or requisitioned made - Petitioner contented basis of issuance of notice u/s 148 is the material seized during the search conducted on Manihar Group the proceedings should have been initiated u/s 153C HELD THAT:- The reasons supplied in case in hand for initiation of proceedings u/s 147/148 are based on the incriminating material and documents including Pen Drives seized during the search carried out of the Manihar Group and the statements recorded during proceedings. From the information received the AO noticed that the loan advanced and interest earned thereon were unaccounted. The basis for initiation of Section 148 proceedings is the material seized relating to or belonging to the petitioner, during the search conducted of Manihar Group. In the case where search or requisition is made, the AO u/s 153A mandatorily is required to issue notices to the assessee for filing of income tax return for the relevant preceding years. AO assumes jurisdiction to assess/reassess total income by passing separate order for each assessment. In cases of the person other than on whom search was conducted but material belonging or relating such person was seized or requisition, the AO has to proceed u/s 153C. The two pre-requisites are that the AO dealing with the assessee on whom search was conducted or requisition made, being satisfied that seized material belongs or relates to other assessee shall hand over it to AO having jurisdiction of such assessee. Satisfaction of AO receiving the seized material that the material handed over has a bearing for determination of total income of such other person for the relevant preceding years. On fulfillment of twin conditions the AO shall proceed in accordance with the provisions of Section 153A. Special procedure is prescribed under Section 153A to 153D for assessment in cases of search and requisition. There cannot be a quibble with the proposition that the special provision shall prevail over the general provision. To say it differently the provisions of Section 153A to 153D have prevalence over the regular provisions for assessment or reassessment under Section 143 147/148. Section 153A and 153C starts with non-obstante clause. The procedure for assessment/reassessment in Section 153A, 153C in cases of search or requisition has an overriding effect to the regular provisions for assessment or reassessment under Sections 139, 147, 148, 149, 151 153. The language of explanation 2 to new Section 148 is akin to Section 153A and Section 153C. Corollary being that after seizing of operational period of Section 153A to 153D, the cases being dealt thereunder were circumscribed in the scope of newly substituted Section 148. Department has not set up a case that for initiating proceedings u/s 148 it had material other than the material seized during the search of Manihar Group. The contention was that though the material with regard to unaccounted loan advanced by the petitioner was received, the earning of interest on unaccounted loan was derivation of the AO from the material received. The submission is that the derived conclusion cannot be acted upon u/s 153C. The submission lacks merit and shall defeat the concept of single assessment order for each of relevant preceding years for assessing total income in case of incriminating material found during search or requisition. The argument that by enactment of Section 153A to 153D has not eclipsed Section 148 does not enhance the case of respondent to initiate the proceedings u/s 148. On fulfillment of two conditions for invoking Section 153C the proceeding in accordance with Section 153A are to be initiated. The operating field of and Section 153A to 153D and Section 148 are different. Applicability of Section 153C in cases where the seized material related to or belonged to person other than on whom search is conducted or requisition made does not render Section 148 otiose. Section 148 shall continue to apply to the regular proceedings and also in cases where no incriminating material is seized during the search or requisition. The argument that Section 153C can be invoked in case there is incriminating material for all the relevant preceding years and otherwise Section 148 is to be resorted to, is misplaced. On satisfaction of the twin condition for proceedings under Section 153C, the AO has to proceed in accordance with Section 153A. Notice is to be issued for filing of the returns for relevant preceding years and thereupon proceed to assessee or reassessee the total income . As not obligatory on the AO to make assessment for all the years, the earlier orders passed may be accepted. But once there is incriminating material seized or requisitioned belonging or relatable to the person other than on whom search was conducted, Section 153C is to be resorted to. Supreme Court in the case of Abhisar Buildwell P. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] while dealing with the provisions of Section 153A held that in case of absence of incriminating material seized during the search, the department is not remediless for reassessing the unabated assessment on the basis of material received from the other sources and can proceed u/s 148. The decision does not support the contentions raised that Section 148 is rendered redundant if Section 153C is to be resorted to in the facts of the present case. If the Department has chosen not to proceed u/s 153C, no right is created to the petitioner for getting the notice under Section 148 quashed. Moreover, learned Single Judge was not having the benefit of the decision of Abhisar Buildwell P. Ltd. (supra). The appeal against the order was dismissed having rendered infructuous in view of the subsequent developments that the assessment order was passed. The decision of the Madras High Court in the case of Saloni Prakash Kumar [ 2023 (10) TMI 207 - MADRAS HIGH COURT] is of no help to the respondents. The High Court held that Section 153C does not preclude issuance of notice u/s 148. The field of applicability of two sections was not the issue before the Court. The notices issued u/s 148 and the impugned orders are quashed.

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• 2024 (4) TMI 195
  Rejection of the books of accounts - best judgment assessment u/s 144 - addition of the sales made in cash on account of unexplained cash credit u/s 68 - HELD THAT:- Before us, the assessee has not challenged the action of the authorities below with respect to the rejection of the books of accounts made by them under the provisions of section 145(3) of the Act. In simple words the decision of the authorities below for rejecting the books of accounts has reached to the finality and no interference to this effect is required to be made. It is the trite law that once the books of accounts have been rejected, the only resort available to the revenue is to determine the income of the assessee in the manner provided under section 144 of the Act to the best of the judgment. The Hon ble Supreme Court in Kachwala Gems [ 2006 (12) TMI 83 - SUPREME COURT] held that rejection of books of account under section 145 justified and best judgment assessment under section 144 of the Act needed. As in the case of CIT Vs. Dhiraj R. Rungta [ 2014 (4) TMI 711 - GUJARAT HIGH COURT] held that once rejection of books of account is justified under section 145 of the Act, no other addition can be made referring the same set of books to the income of the assessee. How to make the best judgement in the manner provided under section 144 of the Act after rejecting the accounts under the provisions of section 145(3) of the Act ? - When the books are rejected, a lump sum addition is made to the original return of income. Such addition may be based on estimate of turnover and profit rate or disallowance of claims, expenditure, etc. as held in case of CIT v. Pilliah Sons [ 1966 (10) TMI 35 - SUPREME COURT] - After rejecting book results, the Assessing Officer has to determine the income in reasonable and scientific manner after considering the results/ performance of the earlier years or some comparable cases. In the present case, what we find is this that the AO after rejecting the books of accounts has not estimated the income but has treated the amount of cash sales deposited during the demonetization period in the bank as unexplained cash credit which is against the spirit of the law as discussed above. First of all, the provisions of section 68 of the Act cannot be applied to the amount shown as sales in the books of accounts otherwise it is going to lead to the double addition which is undesirable. In holding so, we draw support and guidance from the judgement of CIT vs. Vishal exports overseas Ltd [ 2012 (7) TMI 1110 - GUJARAT HIGH COURT] wherein the order of the ITAT was upheld that the sales cannot be treated as unexplained cash credit under section 68 of the Act. AO in the present case is treating the amount of cash deposits during the demonetisation period as sales and unexplained cash credit under section 68 of the Act which is contrary to the spirit of the provisions of law. As such the AO should have reduced the alleged amount of unexplained cash credit from the total sales and the balance sales should have been made subject to tax on some estimation basis. But the AO has not done so. Therefore, we are of the view that such addition made by the AO and confirmed by the learned CIT-A in the given facts and circumstances is not sustainable. We uphold the rejection of the books of accounts made by the authorities below but with the direction not to treat the amount of cash sales as unexplained cash credit under section 68 of the Act.

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• 2024 (4) TMI 194
  Denial of benefit provided u/s 11(2) on the reasoning that the form 10 was not filed along with the return of income - HELDTHAT:- Admittedly, the form 10 was filed by the assessee claiming the exemption u/s 11(2) of the Act after the due date of return filing but before the completion of the assessment. The Hon ble High Court of Gujarat in the case of ACIT v/s. Stock Exchange Ahmedabad[ 2012 (10) TMI 706 - GUJARAT HIGH COURT] has held that the assessee is entitled for the benefit of u/s 11 of the Act if the form 10 is filed before the completion of the assessment. Thus we hold that the assessee cannot be denied the benefit of section 11(2), merely on the reasoning that form 10 was filed by the assessee belatedly in the given facts and circumstances. Decided in favour of assessee. Amount accumulated in the earlier year has not been shown as income under the provision of section 11(3) - grievance of the revenue that the assessee has re-accumulated the fund which was to be treated as income under the provision of section 11(3) - HELD THAT:- This finding of the revenue is contrary to the facts available on record. From the above form 10, it is clearly spelt out that the fund was accumulated out of the current year gross receipt. Thus, it can be safely inferred that the accumulated amount in the earlier year has not been reaccumulated in the year under consideration. In view of the above, we set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition made by him. Hence, the ground of appeal of the assessee is hereby allowed.

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• 2024 (4) TMI 193
  Disallowance u/s 14A - as argued no expense has been incurred to earn such exempt income - assessee has suo-moto disallowed expenses to the extent exempt income earned during the year - HELD THAT:- Since the exempt income earned has already been offered for tax by the assessee, no disallowance in this regard is called for. Accordingly, following the above precedent in the case of Cheminvest Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] has held that disallowance under section 14A should be restricted to the exempt income earned we set aside the orders of the authorities below and decide the issue in favour of the assessee. Allowance of depreciation on Canter used for supply of goods to customers - @ 15% OR @ 30% - AO made the disallowance on the ground that the assessee was not engaged in the business of running the vehicles on hire, hence, allowed depreciation on canters @ 15% - HELD THAT:- It is undisputed that vehicles used are not hired for running but were used for assessee s own business. There is no hire income shown in the profit and loss account to reflect any hire charges received. In these circumstances, in our considered view, authorities below have passed well-reasoned order which does not require any interference on our part. Accordingly, we affirm the same on this issue. Decided against assessee.

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• 2024 (4) TMI 192
  Unexplained money u/s 69A - cash and jewellery seized by the department in search u/s 132 in the premises of partnership firm of the assessee as well as on assessee - basis of seizure was the statement of the accountant - HELD THAT:- Only submission that could be adduced by Ld. AR was that the income should be spread over the period during which it was earned. However, in the absence of any acceptable working shown to us, these submissions could not be accepted. The assessee has failed to even substantiate the fact that the income was earned over several years. Therefore, the orders of lower authorities, to that extent, find our concurrence. The cross-objection filed by the assessee stand dismissed. Addition of Jewellery - Arguments of Ld. Sr. DR that the CBDT instructions would apply only for seizure of the jewellery and not for source of the same could not be accepted. It has consistently been expressed by various High Courts that the quantities of jewellery as specified in the said circular could be considered as reasonable quantities considering the customs prevailing in Hindu Society. The source to that extent could not be questioned. It is also pertinent to note that the assessee, in sworn statement u/s 132(4), has attributed the jewellery as belonging to his wife, his brother s daughter, his wife s sister and his mother-in-law. It was also stated that his wife had brought 800 grams of jewellery as Streedhan during wedding. The same has not been questioned by Ld. AO and as such this fact remains uncontroverted. This fact alone would support the adjudication of Ld. CIT(A) that the impugned addition could not be sustained. Therefore, we concur with the same and dismiss the appeal of the revenue.

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• 2024 (4) TMI 191
  Deduction u/s. 80IA(4)(i) on storage tank MDI and storage tank EDA - AO s allegation is that storage tank is devoid of loading and unloading facility and same are not within the premises of Kandla Port Trust and held that MDI storage tank, for which assessee has claimed deduction is not an enterprise - assessee submitted that that there is difference in the nature of business in case of MDI storage tank and other tanks at the Tank Farm - as submitted full nomenclature of MDI means DiphenylMethane Disocyanate chemical product and chemical MDI needs to be stored in a separate tank built at the Port with insulation cover to maintain temperature and pressure and Nitrogen gas for 24 hrs X 7 days to ensure the Tank is free from moisture as the chemical if comes into contact with moisture may react adversely producing hazardous gases. Not only the Tank, the supply and delivery pipelines are also insulated. HELD THAT:- Hon ble Supreme Court of India [ 2018 (5) TMI 359 - SUPREME COURT] upheld the judgement of Container Corporation of India Ltd [ 2012 (5) TMI 260 - DELHI HIGH COURT] Other High Courts namely Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd [ 2018 (1) TMI 1666 - BOMBAY HIGH COURT] and Madras High Court in the case of CIT -Vs- A.L. Logistic Pvt. Ltd. [ 2015 (1) TMI 401 - MADRAS HIGH COURT] held that looking to the facilities provided by the Container Freight Stations, the CFS is an Inland Port as it carries out the functions of warehousing, customs clearance and transport of goods from its location to sea-port and vice versa by rail or by trucks in containers and the eligible to claim deduction u/s. 80IA[4] of the Act. Respectfully following the above judicial precedents, we are of the considered view that the assessee herein has complied with all the provisions of section 80IA(4)(i) of the Act and is eligible to claim deduction on storage Tank MDI and storage Tank EDA - Decided in favour of assessee. Amortization of share issue expenses u/s. 35D - A.O. disallowed the same on the ground that assessee company is a Private Limited company and has made expenses in relation to normal issue of shares not for public issue and expenses has been done after startup of business and are not related to expansion of undertaking or setting up of new unit - HELD THAT:- This issue is held in favour of the assessee by the Co-ordinate Bench in assessee s own case [ 2019 (1) TMI 2043 - ITAT RAJKOT] wherein as held that said expenses has been incurred before the commencement of business and same are in the capital in nature. In our considered opinion, assessee has rightly claimed its amortization. - Decided in favour of assessee. Disallowance u/s. 14A r.w.s. 8D - assessee was not able to show one to one relation from its bank account that the investment was made entirely from its own funds - CIT(A) deleted addition - HELD THAT:- This issue is held in favour of the assessee by deleting the addition made u/s. 14A by the Co-ordinate Bench in assessee s own case in [ 2019 (1) TMI 2043 - ITAT RAJKOT] as held that no disallowance can be made u/s. 14A as no interest bearing funds has been deployed to earn exempt income. And ld. A.O. had not demonstrated any nexus between the earning of exempt income for such income. Therefore, in our considered opinion, ld. CIT(A) has rightly granted relief to the assessee. Disallowance made u/s 8D(iii) are confirmed by lower authorities because assessee has not been able to prove one to one nexus of interest free funds as well as investment in securities because such investment require bank charges, clerical work and time of directors. Decided partly in favour of assessee. Disallowance of warehousing charges - addition on the alleged ground that the same is excessive in nature as compared to payment made other parties - CIT(A) deleted addition - HELD THAT:- As decided in assessee s own case in [ 2019 (1) TMI 2043 - ITAT RAJKOT] payment made to persons other than persons covered u/s. 40A(2)(b) were comparable and interalia payment to the persons covered u/s. 40A(2)(b) was not excessive either in comparison to the other independent parties as well as to the market rate which can assumed as to nearer to the rates at which the said third parties are being paid. Therefore, in our considered opinion, ld. CIT(A) has rightly granted part relief to the assessee. Disallowance in connection with the windmills - HELD THAT:- This issue is also held in favour of the assessee by following Jurisdictional High Court Judgement in the case of Parry Engineering Electronics Pvt Ltd [ 2014 (12) TMI 752 - GUJARAT HIGH COURT] the Co-ordinate Bench in assessee s own case [ 2019 (1) TMI 2043 - ITAT RAJKOT] held that the installation of windmill and the civil structure and the electric fittings are so closely interconnected and linked as to form the common plant. As already noted, the legislature has provided for higher rate of depreciation of 80 per cent on renewable energy devises including windmill and any specially designed devise, which runs on windmill. The civil structure and the electric fitting, equipment are part and parcel of the windmill and cannot be separated from the same. The assessee s claim for higher depreciation on such investment was, therefore, rightly allowed. Addition u/s. 41(1)(a) - cessation of liabilities - HELD THAT:- This issue is held against the assessee by the Co-ordinate Bench in assessee s own case in [ 2019 (1) TMI 2043 - ITAT RAJKOT] wherein as held assessee could not submit any explanation that why these amounts had been shown outstanding for such a long period and what steps have been taken by the assessee to recover these amounts and even before us assessee could not explain about the list in details. Therefore, we dismiss this ground of appeal by the assessee.

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• 2024 (4) TMI 190
  Estimation of income - bogus purchases - CIT(A) restricting the addition to 12.5% - HELD THAT:- As observed that the Hon ble Settlement Commission has not discarded the evidentiary value of the statement of Shri Rajesh Doshi who has admitted to the modus operandi of availing bogus purchase bill. Assessee has not raised this contention that Shri Rajesh Doshi was neither an employee nor a partner and that the assessee had not transacted with the said person before the Hon ble Settlement Commission and the fact that Shri Rajesh Doshi has also not denied the transaction between him and the assessee. The assessee has failed to rebut the said statement of Shri Rajesh Doshi by any documentary evidence neither before the lower authorities nor before us. Thus no infirmity in the order of the ld. CIT(A) in making an addition on the gross profit margin @ 12.5% on the alleged bogus purchase where the sales are not in dispute. Decided against assessee and revenue. On-money received - unaccounted income from sale of flats along with the modus operandi of receiving such on-money by cash - seized material relied upon by the ld. A.O. during the search and seizure action - FAA deleted the impugned addition by relying on the order of the Hon ble Settlement Commission in the case of sister concern of the assessee - HELD THAT:- Assessment order has not specified any details as to what was the seized material that was available before the ld. A.O. It is also pertinent to point out that the remand report sought for by the ld. CIT(A) was also not furnished by the ld. A.O. for the reason that the assessee has failed to co-operate. We also have observed that the retracted statement of Shri Daxesh Parmar, Shri Rajesh Doshi was also not in record for our consideration. The ld. CIT(A) has placed reliance on the order of the Hon ble Settlement Commission which again was not placed on record. In order to fill the lacuna, we hereby deem it fit to remand this issue back to the file of the ld. CIT(A) for proper adjudication after duly seeking for the remand report and duly considering the same on the merits of the case - Ground raised by the Revenue is allowed for statistical purpose.

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• 2024 (4) TMI 189
  Validity of assessment u/s 153A - At the time of search, assessment proceedings u/s. 143(3) for the impugned assessment year was in progress before the Ld. AO - HELD THAT:- Second proviso to section 153A(1) provides for abatement of pending assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years on the date of initiation of search u/s. 132 - The impugned assessment year is a year which falls within the period of six assessment years considering the date of search as 22.09.2011. Admittedly, the assessment proceedings u/s. 143(3) were pending at the time of initiation of search. Thus, the proceedings u/s. 143(3) got abated. There was no occasion for the AO at Bengaluru to pass assessment order in terms of the second proviso to sec. 153A(1) and, therefore, is non-est. Since the assessment order passed by the AO u/s. 143(3) is held to be non-est, the instant appeal by the revenue is infructuous. Appeal by the revenue is dismissed as infructuous. Assessment proceedings u/s. 153A r.w.s. 143(3) by the AO after the transfer of file from Bengaluru jurisdiction to Kolkata jurisdiction, pursuant to conduct of search are based on the original assessment made by the AO u/s. 143(3) even though it got abated - As assessee propounded that the case is squarely covered by the decision of Abhisar Buildwell [ 2023 (4) TMI 1056 - SUPREME COURT] by referring to non-availability of incriminating material for the addition/disallowance made in the said assessment. The said proposition of the Ld. Counsel is rejected at the threshold because the impugned assessment year is an abated assessment year as already observed and held while disposing the appeal of the revenue dealt above. Disallowance made u/s. 14A read with Rule 8D - As argued AO without any discussion on the said disallowance has borrowed the same from the order passed u/s. 143(3) and, therefore, no such disallowance is warranted as the assessment u/s. 143(3) is held to be non-est - HELD THAT:- CIT(A) has rightfully given the direction for recomputing the disallowance u/s. 14A which is in consonance with the decision of REI Agro Ltd. [ 2014 (4) TMI 713 - CALCUTTA HIGH COURT ] which had upheld that Rule 8D(2) can be applied only in respect of investment which actually yielded dividend income during the year. We do not find any reason to interfere with the finding and decision arrived at by the Ld. CIT(A) on this issue. Accordingly, ground of the assessee are dismissed. Upward adjustment made to book profit on account of disallowance of expenditure computed u/s 14A of the Act r.w.r. 8D - HELD THAT:- Placing reliance on the decision of Jayshree Tea Industries Limited [ 2014 (11) TMI 1169 - CALCUTTA HIGH COURT] , we hold that the provisions of section 115JB clause (f) to explanation (1) applies as claimed by the revenue for the purpose of computing the book profit. Accordingly, the disallowance as computed by the AO in terms of the directions noted above is liable to be taken into account. TP Adjustment - export to subsidiary - adjustments made in respect of transfer pricing have been borrowed from the assessment made u/s. 143(3) which has been held to be non-est - HELD THAT:- AO does not have the jurisdiction to propose any transfer pricing adjustment in case where he has not made any reference to the TPO. Therefore the additions made by the AO towards transfer pricing adjustment for which both, assessee and revenue are in appeal, are not tenable and deleted. Accordingly, transfer pricing adjustment made by the AO in the impugned assessment u/s. 153A read with section 143(3) are not in compliance with the provisions contained in section 92CA of the Act read with aforesaid CBDT Instruction. AO has simply incorporated the suggestion and adjustment made by the Transfer Pricing Officer vide order dated 31.10.2011 which has no locus standi and is non-est. Decided in favour of assessee.

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• 2024 (4) TMI 188
  Condonation of delay filling appeals - application for admission of Additional Evidence under rule 46A - Addition u/s 69 made on difference in 26AS statement and return of income - HELD THAT:- We are of the opinion that admittedly the Assessee failed to comply notices issued by the Assessing Officer, but the Assessing Officer also failed to carry out necessary investigations and to understand the facts in totality. Assessing Officer always have access to the return of income of the assessee for earlier years. The AO has not bothered to study the details shown in the Balance sheets of earlier years. The aim of the Assessment Proceedings is to assessee the correct income of the Assessee. Also, the ld.CIT(A) has not adjudicated each and every ground raised by the Assessee on merits. CIT(A) also failed to consider the documents filed by the Assessee under Rule 46A. In these facts and circumstances of the case, we are of the opinion that substantial justice is more important than the technical delays . On identical facts in the case of Gupta Emerald Mines (P.) Ltd. [ 2023 (10) TMI 1287 - SC ORDER] , the Hon ble Supreme Court has condoned the delay of the assessee and set aside the order of the ITAT .In the case of Gupta Emerald Mines P Ltd the Appellant claimed that Appellant had not received the copy of the order of the CIT(A). Also in HINDALCO INDUSTRIES LIMITED [ 2024 (1) TMI 1039 - BOMBAY HIGH COURT] principle of advancing substantial justice is of prime importance, while considering the question of condonation. Thus we condone the delay in filling the appeal. CIT(A) has to decide the appeal on merit and CIT(A) does not have any power to dismiss appeal for non-prosecution.In these facts and circumstances of the case we set aside the order of the CIT(A) to CIT(A) for de-novo adjudication after giving opportunity to the assessee. Appeal of the assessee is allowed for statistical purpose.

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• 2024 (4) TMI 162
  Stay of demand - assessees may be accorded interim protection subject to deposit of 20% of the total outstanding demand failing which they would be treated as an assessee in default - HELD THAT:- Ultimate application that was filed before the Principal Commissioner and which had in turn referred to the original stay application which had been moved before the Assistant Commissioner. However, and in our considered opinion, there clearly appears to have been a laxity on the part of the petitioner to have directly raised the contentions noticed briefly by us hereinabove before the Principal Commissioner. That authority has thus been deprived of the opportunity to examine the issues of prima facie case or undue hardship in the context of the challenges which have been raised to the computation of fair market value by the AO. We are of the opinion that the ends of justice would warrant the petitioner being accorded the liberty to move the Principal Commissioner afresh raising such contentions as may be chosen and advised. Any application in this respect that may be moved shall be decided by the Principal Commissioner without being influenced by the orders dated 26 May 2022 and 12 February 2024. Writ petition stands disposed of in terms of the above. The orders impugned before us shall abide by the fresh decision which the Principal Commissioner shall now take in terms of our directions contained in para 11 of this order.

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• Customs

• 2024 (4) TMI 187
  Classification of imported goods - Quicklime - Tribunal held that the imported goods quicklime would be appropriately classifiable under Customs Tariff Item 2522 10 00 and not as other under the Customs Tariff Item 2825 90 90, as claimed by Revenue - HELD THAT:- We are not inclined to interfere with the judgment and order passed by the Custom Excise Service Tax Appellate Tribunal, West Zonal Bench at Mumbai on 20-10-2023 in Custom Appeal Nos. 85377/2020 and 86172/2021 in Final Order No.A/87057-87058/2023. The Civil Appeals are dismissed accordingly.

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• 2024 (4) TMI 186
  Application for discharge u/s 245(2) of CrPC - learned Magistrate dismissed the application for discharge - High Court held that in the absence of any material the cognizance taken by the learned Magistrate is impermissible - HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court. Hence, the Special Leave Petition is dismissed.

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• 2024 (4) TMI 185
  Petition against dismissal order of Learned Single Judge - Appeal filed belatedly after the period of condonation in terms of Section 128 of the Customs Act - HELD THAT:- While the approach of the appellant before this Court itself was more than seven years after the order of appellate authority, the appellant did not even approach the First Appellate Authority within the time permitted under the Customs Act. It is trite that when the statute prescribes a period of limitation for approaching the appellate authority and the assessee does not approach the appellate authority within the time granted under the statute, the scheme of finality accorded to the statutory orders cannot be ignored by the High Court when exercising the jurisdiction under Article 226 of the Constitution of India. That apart this Court cannot also ignore the long delay in approaching this Court under Article 226 of the Constitution of India. Thus in any view of the matter, we see no reason to interfere with the judgment of the Learned Single Judge. The writ appeal fails and is therefore dismissed.

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• 2024 (4) TMI 184
  Classification of goods - Levy of penalty - Bill of Entry for clearance of Sweet Pearl P200 classified under 29054900 - Revenue reclassified the goods under 21069060 - Burden Of proof - HELD THAT:- We find that it was Revenue which disputed the classification declared by the appellant and hence, the initial burden is on the Revenue to disprove the case of the appellant. The burden is also on the Revenue to justify the reclassification made under 21069060. From the impugned order, we find that the Revenue sought opinions of two experts i.e. EIA and Central Food Laboratory, Mysore but they appear to have been not considered. It is the further case of the appellant that it has been classifying Maltitol crystals / sweet pearl under the very same CTH 2905 4900 since 2004 and hence, as ruled by the Hon ble Supreme Court in a catena of decisions including the following cases, when the Revenue challenges the classification declared by the importer, the onus is always on the Revenue to establish that the item in question falls under the taxing category as claimed by them A perusal of the impugned order reveals that it is the case of the Revenue that the goods in question being artificial sweetener and a food ingredient used in the manufacture of chewing gum merits classification as a food flavouring material under CTH 2106. Sweet pearl is a flavour enhancer but the impugned order does not discuss the properties of a flavour enhancer and how the goods in question fit into the said description. Thus, we are of the clear view that the classification declared by the appellant deserves to be upheld since Revenue has not justified reclassification of the impugned goods under CTH 2106 and therefore, we set aside the impugned order and allow the appeal with consequential benefits, if any, as per law. Revenue has also preferred an appeal against the impugned order on the ground that the adjudicating authority has erred in not imposing equal penalty u/s 114A of the Customs Act, 1962, since the adjudicating authority has confirmed the duty demand u/s 28 of the Customs Act, 1962. However, as we have set aside the duty demand as confirmed by the original authority vide impugned order, we do not see any merit in the Revenue s appeal for imposing equal penalty in terms of sec. 114A. Therefore, the department s appeal is dismissed.

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• 2024 (4) TMI 183
  Misdeclaration of value of goods - Confiscation of goods - Redemption fine - Imposition of penalty - Whether, the Assessable Value for the third machines can be revised on account of the compensation paid by the foreign supplier - HELD THAT:- The appellant had ordered two pieces each of two different machines and the foreign supplier by mistake and sent three pieces of one machines and one piece of the other machine. We find that the it is undisputed fact that the importer had no knowledge about the mistake committed by the foreign supplier. Thus, it can be seen that the importer had in fact declared Assessable Value in excess of the value of goods actually received by US $ 20,000/- as a result of a mistake committed by the foreign supplier. In this background, we do not think that there was any malafides on the part of the importer. Following the decision in BANSAL INDUSTRIES [ 2004 (1) TMI 250 - CESTAT, CHENNAI] , we do not find that there is any merit in invoking Section 111 and 112 in the instant case. Consequently, the confiscation of goods, imposition of redemption find and imposition of penalty u/s 112 cannot be sustained and the same is set aside. As regard, revision of Assessable Value for one machine from US $ 39,000/- to US $ 38,000/-, the said aspect has not been challenged by appellant in their appeal memorandum nor are there any assertions in their written submission. Therefore, the said issue has not been disputed by appellant. Appeal is allowed in above terms.

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• 2024 (4) TMI 182
  Seeking Permission to abandon the goods and remission of duty - Bills of Entry declaring the goods as Aluminium Alloy Ingots but shipment contained Stone Chips - Claim for re-credit duty, debited from Advance Authorisation Scrips - Abandoned the goods - confiscation - redemption fine - Penalty - HELD THAT:- In the present case, the goods having been abandoned there is no situation of redeeming the goods. The Adjudicating Authority has ordered for confiscation of the goods only because the goods have been abandoned. In such situation, the goods are taken into possession by the Central Government and disposed of in accordance with law. The goods can be taken into possession only if confiscated. The Adjudicating Authority has ordered for confiscation only to facilitate the custody of goods to the Central Government. The Commissioner (Appeals) has misconceived the provisions under Customs Act, 1962, that as there is confiscation of goods, redemption fine has to be imposed. When the appellant has abandoned the goods, there is no requirement to give option to redeem the goods. When the goods are not being redeemed and abandoned, the goods have to taken custody by the Central Government. In such situation of confiscation, imposition of redemption fine does not arise. Again, even though Adjudicating Authority has imposed penalty of Rs.30,000/-, there is no finding rendered as to the offence committed by the importer. Instead, it has been categorically stated that no offence is committed by the importer. The appellant has paid the penalty and does not contest the same. So, the observation made by the Commissioner (Appeals) that since goods have been confiscated and penalty imposed, redemption fine has to be imposed is erroneous. Further, there is no appeal filed by the Department against the order of the Adjudicating Authority who refrained from imposing redemption fine. The Commissioner (Appeals) ought not to have imposed redemption fine in an appeal filed by the importer. Thus, the redemption fine of Rs.19 Lakhs imposed by the Commissioner (Appeals) is not justified and requires to be set aside, which I hereby do. Appellant has requested for re-credit of the duty - The appellant having not imported Aluminium Alloy Ingots is not liable to pay such duty. The appellant had placed order for Aluminium Alloy Ingots and they have not received the goods. However, the duty was debited in the Scrips. The appellant is therefore eligible for re-credit of duty that in the Advance Authorisation Scrips. The impugned order is modified to the extent of setting aside the redemption fine and also setting aside the order directing re-credit of duty applicable to Stone Chips. The appellant is eligible for re-credit of duty that has been debited and applicable to Aluminium Alloy Ingots. It is made clear that as the appellant has not contested the penalty, the same is not disturbed. The appeal is allowed in above terms with consequential reliefs, if any, as per law.

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• 2024 (4) TMI 181
  Smuggling - Absolute Confiscation - levy of penalties - 2060 numbers of green coloured refrigerant gas cylinders believed to be containing HCFC Gas - 5280 packets of Mosquito Repellents - 4800 pieces of Ladies garments - old and used TATA Trucks, which were allegedly used for transportation of the said goods - burden to prove - HELD THAT:- It is found that the mosquito repellents and ladies garments in question are of foreign origin or smuggled one has to be proved by the Revenue. However, the Revenue has failed to prove that the same are smuggled in nature. From the investigation conducted, it is not forthcoming as to how the Revenue has alleged that the impugned mosquito repellents and ladies garments are smuggled ones. Further, the above said items are not notified items under Section 123 of the Customs Act, 1962 - As the Revenue has failed to establish the smuggled nature of the goods in question, the impugned mosquito repellents and ladies garments cannot be confiscated. HCFC gas confiscated from the godown of the appellant - it is the allegation of the Revenue that the same is a restricted item and was manufactured only in China - HELD THAT:- It is found that the goods in question are restricted items, but not prohibited items. In these circumstances, the onus lies on the Revenue to prove that the said goods were smuggled in nature, which the Revenue has failed to prove. Merely saying that the goods in question can only be manufactured in China cannot form the basis for absolute confiscation of the said goods recovered during the course of investigation. Therefore, we hold that the said HCFC gas cannot be confiscated. The order of confiscation of the goods in question is set aside - As the goods in question are not liable for confiscation, therefore, no penalty can be imposed on the appellants. The impugned order set aside - appeal allowed.

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• 2024 (4) TMI 180
  Levy of penalty on Customs Broker - Accepting documents without proper authorization - The Department argued that this constituted abetment of the export of prohibited goods. - Smuggling - Pseudoephedrine and Ketamine Hydrocholoride - concealment of prohibited drugs in cartons containing Pomegranate fruits - violation of the provisions under CHALR / CBLR Regulations - violation of provisions of Customs Brokers Licensing Regulations - HELD THAT:- On perusal of the impugned order, the original authority has recorded findings for imposing penalty on appellant viz. G. Seenivasan who is the CHA. It has been categorically stated by the adjudicating authority that there is no evidence to show that the appellant G. Seenivasan had knowledge that the cartons contained prohibited items. Thus, it can be seen that the investigation has not brought out that appellant Sri G. Seenivasan had any knowledge about the attempt to export the contraband items. In such circumstances, the penalty imposed u/s 114 (i) of the Customs Act, 1962 is not justified. Violation of provisions of Customs Brokers Licensing Regulations - The proceedings having been initiated under CBLR Regulations for revoking the license and the license having already been revoked, I am of the view that the penalty imposed u/s 114 (i) of the Customs Act, 1962 is not legal and proper, and harsh on the appellant. Penalty imposed on the appellant - The penalty of Rs.50,000/- has been imposed by the Department on Shri S. Murugaram. Since it is clearly brought out that Sri S. Murugaram had no knowledge that contraband items were concealed in the cartons, I find that the penalty of Rs.50,000/- imposed on him is liable to be set aside. Thus, the impugned order to the extent of imposing penalty on the appellant viz. G.Seenivasan and Rs.50,000/- on the appellant viz. S. Murugaram u/s 114 (i) of the Customs Act, 1962 is to be set aside. The appeals are allowed with consequential relief, if any.

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• 2024 (4) TMI 179
  Classification - Rate of duty - Goods claimed to be automatic data processing machine in heading 8471 - Bureau of Indian Standards (BIS) - shipping marks, viz., Emotix Miko - re-classified to take advantage of lower rate of duty - differential duty - confiscation - interest - Import goods as plastic toys with motor corresponding to tariff item 9503 0030 - HELD THAT:- It is on record that the imported goods consists of components that do not, by a long stretch, find fitment within products of chapter 95 of First Schedule to Customs Tariff Act, 1975. There is no finding in the impugned order that the composition of the impugned goods is not a combination of a central processing unit and units for input and output. We are informed, without rebuttal, the there is some hardware within that processes oral query for response as sound, motion or image and, therefore, not exactly beyond the scope of coverage within the claimed heading. In the absence of such controverting within rule 1 and rule 3 of General Rules for Interpretation of the Import Tariff in Customs Tariff Act, 1975, a finding of conformity of description corresponding to the proposed tariff item that is not followed by resort to rule 3 of General Rules for Interpretation of the Import Tariff in Customs Tariff Act, 1975 places the exercise by the adjudicating authority in serious jeopardy and motivated by intent to deny duty benefits any which way. It is admitted that MIKO 1 was declared as toy but there is no ground to hold fast to the conviction that a subsequent variant, even if conforming to another description, must continue to be classified against an erroneous tariff item. The impugned order has referred to the rejection of application for registration of MIKO 2 under Electronics and Information Technology (Requirements of Compulsory Registration) Order by Bureau of Indian Standards (BIS) owing to expert opinion of Ministry of Electronics and Information Technology (MeitY). It is on record that the registration was subsequently incorporated. It is also contended that MIKO 2 and MIKO 3 are more akin than MIKO 1 is to MIKO 2. None of this alters the onus that devolves on customs authorities in terms of the decisions of the Hon ble Supreme Court in re HPL Chemicals and in re Hindustan Ferodo. The lack thereof places the findings in the impugned order in serious jeopardy. The description of the imported goods is not just toys made of plastic. That it has capabilities endowed by technological development does set it apart from a toy and, even if does conform to toy, it was necessary to show that the goods do not contain the essentials enumerated in tariff item 8471 4190 of First Schedule to Customs Tariff Act, 1975. Such finding is glaringly deficient in the impugned order. The classification adopted in other countries may not be a guide for assessment in India when the dispute has its genesis in perceived evaporation of duty; it is inevitable that identical duty rates marginalizes declaration relevance. Reliance thereto will not suffice for the purpose. We fail to perceive the dearth of complexity that may justify shift of classification from within heading 8471 to heading 9503 of First Schedule to Customs Tariff Act, 1975. The findings are conjectures and assumptions that are not backed by authoritative texts, notes or definitions in law or even logical sequencing. These are not tenable in a classification exercise. The impugned order has not established the primacy of heading 9503 of First Schedule to Customs Tariff Act, 1975 nor the inappropriateness of heading 8472 of First Schedule to Customs Tariff Act, 1975. The rules of engagement enunciated by the Hon ble Supreme Court for altering classification has not been followed by the adjudicating authority. The facts, indelibly clear, does not controvert conformity with the essential requirements set out in note 5(A) in chapter 84 of First Schedule to Customs Tariff Act, 1975 There is no finding that the impugned goods, by incorporating or working in conjunction with automatic data processing (ADP) machines , performs the function of toys which should be the consummation of resort to note 5(E) in chapter 84 of First Schedule to Customs Tariff Act, 1975 and such finding is well-nigh impossible in the absence of any authoritative guidance on toys and its intended functions. A thought process conditioned by one s own childhood or parenting experience is not a tenable substitute. Even if this note comes into play insofar as the impugned goods are concerned, the impossibility of appending toys renders the claimed classification to be the only one remaining in the ring. Consequently, the classification claimed must remain. The impugned order is set aside to allow the appeal.

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• 2024 (4) TMI 178
  Valuation - Imported 20 MT of Aluminium powder 99.7% - enhancement of value - duty paid under protest - Non speaking order - appellant waived the show cause notice as well as Personal Hearing - HELD THAT:- There is no detailed discussion as to how the enhancement has been arrived at by the assessing authority. For this reason we are of the considered view that the matter has to be remanded to the adjudicating authority for re-considering the assessment of the imported goods. The appellant is at liberty to furnish details of contemporaneous imports before the adjudicating authority who shall look into these evidences also. In the result, the impugned order is set aside. The appeals are allowed by way of remand.

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• Corporate Laws

• 2024 (4) TMI 177
  Maintainability of Criminal proceedings - Violation of principles of natural justice - facts as mentioned in the chargesheet as well as other material placed on record were not taken into consideration - illegal allotment of shares - illegal appointment of petitioner as a director and transfer of shares by misusing the digital signatures of the petitioner - HELD THAT:- Without going into the details of the present case, this Court is of the considered opinion that the learned Trial Court while passing the impugned order did not take into consideration the facts as mentioned in the chargesheet as well as other material placed on record by the Investigating Officer. So far as the reliance placed by respondent no. 2 to 4 on the judgment of Hon ble Supreme Court in Satish Mehra [ 1996 (7) TMI 555 - SUPREME COURT ] is concerned, it is relevant to note that the said judgment has been overruled by the Hon ble Supreme Court in STATE OF ORISSA VERSUS DEBENDRA NATH PADHI [ 2004 (11) TMI 564 - SUPREME COURT ], wherein it has been recorded in our view, clearly the law is that at the time of framing charge or taking cognizance the accused has no right to produce any material. Satish Mehra case holding that the trial court has powers to consider even materials which the accused may produce at the stage of Section 227 of the Code has not been correctly decided. So far as the ground that the petitioner did not specifically deny the execution of the MoU in the proceedings before the learned NCLT is concerned, it is pertinent to note that the rejoinder filed on behalf of the petitioner before the Company Law Board was placed on record wherein in paragraph 2 thereof, it was categorically stated that the MoU is a forged and fabricated document and does not bear the true signatures of the petitioner. It is also pertinent to note that the material placed by the Investigating Officer along with the chargesheet filed before the learned Trial Court was not placed on record before the learned NCLT. The impugned order dated 17.08.2019 passed by the Learned Trial Court is set aside. The matter is remanded back to the learned Trial Court for fresh consideration on the point of charge. The learned Trial Court shall give opportunity to the parties and thereafter pass appropriate orders in accordance with law - Petition allowed.

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• Law of Competition

• 2024 (4) TMI 176
  Anti-competitive agreements - Cartelisation - allegation is that appellant wrongly clubbed with members of the Cartel without any application of mind by the Commission - contravention of the provisions of Section 3(3)(a), 3(3)(c) and 3(3)(d) read with Section 3(1) of the Competition Act - HELD THAT:- In STATE OF MAHARASHTRA VERSUS KAMAL AHMED MOHAMMED VAKIL ANSARI ORS. [ 2013 (3) TMI 731 - SUPREME COURT ] it was held in a proceeding under the Competition Act, the strict rules of evidence are not applicable. Admittedly, all the statements are made by witnesses who were the authors/recipients of the emails and have confirmed their interaction with each other. Admittedly the appellant had never challenged the correctness of statements made by the other members and never sought a permission to cross examine them. All the evidence has been construed holistically by the Commission before giving its justification. The oral statements and the email are completely consistent with each other. Moreso in view of the very definition of cartelisation in Section 2(c ) of the Act, even an attempt to rig a bid is sufficient to attract the provision. In alleged anti-competitive conduct in the Beer Market in India, suo Motu Case No.6 of 2017 and in Federation of Corrugated Box Manufacturers of India etc, Case No.24 of 2017, it has clearly been held in bid rigging cases mere exchange of information is sufficient to attract the provisions of the Act. The Appellant argued it had never sent any such email and only received such emails and mere receipt of the emails does not amount to exchange of emails, is not acceptable. The appellant continuously received emails for over five years without any protest and never requested the cartel to stop sending such emails to it. This itself indicates a meeting of mind. More importantly, the evidence shows all the parties had access to the user name and password to the email id [email protected], hence it cannot be concluded the appellant was never a part of the Cartel. The appeal and all pending applications are dismissed.

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• Insolvency & Bankruptcy

• 2024 (4) TMI 175
  Dismissal of Section 9 application - Appellant and Respondent are having relationship of Corporate Debtor and Operational Creditor or not - pre-existing dispute between the parties which will disallow initiation of CIRP proceedings or not. Whether in the instant case, the Appellant and Respondent are having any relationship of Corporate Debtor and Operational Creditor? - HELD THAT:- The facts of the case clearly bring out that the Appellant was acting on the referral instructions of the Respondent and was issuing the air tickets on the basis of the credit card the customers details provided by the Respondent. The Respondent had also given the undertaking that if any debit note comes against those tickets, then they will be responsible. The plea of the Respondent that they are not having any debt and the Appellant is not an Operational Creditor as they were not supplying any goods or services to the Respondent is not tenable. It is concluded that there is a relationship of operational creditor and corporate debtor between the Appellant and Respondent. Whether there is any pre-existing dispute between the parties which will disallow initiation of CIRP proceedings? - HELD THAT:- Respondent was undertaking the responsibility for issuance of the debit notes and when ADMs were issued by the airlines, a debt arises and the unconditional undertakings will act as an acknowledgment of debt towards the Appellant - When the demand notice was issued under Section 8 of the IBC, 2016 on 22.08.2018, it was disputed in its reply by the Respondent vide letter dated 08.09.2018. There are police complaints also on record. It had become a criminal case. Thus it had become a dispute and is not a spurious, hypothetical or illusory dispute. From the correspondence on record, it can be clearly made out that there is a pre-existing dispute. The Adjudicating Authority has gone into the circumstances of their business dealings and have come to the conclusion that the dispute raised by the respondent is plausible and not a patently feeble legal argument. Thus, when the Appellant received the reply to Section 8 demand notice raising a dispute, the Section 9 petition could not have been proceeded under I B Code against the respondent. For CIRP under Section 9 of IBC, 2016 to be initiated, the Appellant is required to prove that the debt is due, it has not been paid and the debt is an undisputed debt. In this particular case, there is no record to suggest that there is any contract entered into between the parties but there is a evidence of pre-existing dispute. The ingredients laid down under Section 9 read with the requirements laid down by the judicial pronouncement are not fulfilled. Therefore, in the present case owing to the pre-existing dispute between the parties, the Adjudicating Authority has rightly rejected the Section 9 Application. There are no error in the orders of the Adjudicating Authority - appeal dismissed.

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• PMLA

• 2024 (4) TMI 174
  Seeking grant of anticipatory bail - Money Laundering - scheduled offence - Proceeds of crime - execution of Joint Venture Agreement and also a supplementary Agreement, according to which, a sum of Rs. 46 Crores was transferred to Suresh Narayan Vijaywargiya - existence of reasonable grounds to believe that applicant is guilty or not - seeking anticipatory bail on the ground that as Section 447 of the Companies Act was included in the schedule appended to the PMLA by way of amendment dated 19.4.2018 - HELD THAT:- A perusal of Explanation (ii) to Section 3, reflects that the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime. The aforesaid section covers all the activities within its scope till the person is being directly or indirectly benefitted by the proceeds of crime - The Apex Court in the case of Vijay Madanlal Choudhary and others Vs. Union of India and others [ 2022 (7) TMI 1316 - SUPREME COURT] has also held that provision of Section 45 are applicable to the bail applications under Sections 438 and 439 of Cr.P.C. Section 45 of the PMLA specifically provides that the offences under the Act are non-bailable and cognizable and no person accused of an offence under the Act is entitled for bail unless the Public Prosecutor is given a liberty to oppose the application and the Court is satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail - In the present case, the complaint prima facie discloses commission of offence by the applicant as well as co-accused, therefore, this Court does not find any reasonable ground to believe that the present applicant is not guilty of crime. The present applicant cannot claim parity only on the ground that the present applicant also cooperated with the Investigating Agency. This contention of the applicant is also liable to be rejected, inasmuch as, upon filing of the complaint, when the applicant was issued a bailable warrant to appear before the trial Court, the applicant did not appear before the trial Court and therefore, the trial Court rejected the application of the applicant for anticipatory bail - merely because the applicant appeared before the Investigating Agency on a singular date, the same does not entitle him to be released on anticipatory bail while claiming parity with co-accused S.N. Vijaywargiya. As this Court is not satisfied that there is no reasonable ground to believe that the applicant is guilty, no case for grant of anticipatory bail to the applicant is made out taking into consideration the nature of accusation against the applicant - application dismissed.

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• 2024 (4) TMI 163
  Seeking grant of anticipatory bail - Money Laundering - bail sought on the ground that the applicant is sick and infirm within the meaning of proviso to Section 45 of the PMLA - HELD THAT:- In the present case, the applicant is aged about 83 years and seeking relief of anticipatory bail in terms of proviso to Section 45 of the PMLA. Proviso to Section 45 of PMLA provides that the person who is under the age of sixteen years or is a woman or is sick or infirm or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees, may be released on bail, if the special Court so directs - The All India Institute of Medical Sciences, Bhopal constituted a Medical Board. The Medical Board consisting of the experts of the fields of General Medicine, Orthopedics, Opthalmology and Cardiology examined the present applicant and accordingly, the report dated 29.1.2024 was submitted. As per the said report, the applicant has been found to be suffering with Ishemic Heart Disease (IHD) since 2015 with preserved EF, Hypothyroidism since 10 years and well controlled with medication and Bilateral Knee Osteoarthritis with Lumbar Spondylosis. The conclusion as mentioned in the Medical Report dated 29.1.2024 reveals that morbidities are under control with treatment and did not require any acute or active intervention at the point of examination. The medical report suggested that the applicant requires oral medication for the above health conditions with periodic evaluation. The aforesaid report is based on the opinion of the experts of different fields as mentioned hereinabove after subjecting the applicant to a thorough examination. Though the report does not suggest that any hospitalization is required at present, however, it has been opined that the difficulty in the movement of the present applicant is due to old age and Bilateral Osteoarthritis knee joints. It is discernible from the record that the present applicant is a person aged about 83 years. He has been examined by the Medical Board consisting of the experts of different fields. The Medical Board found that the applicant is suffering with aforesaid morbidities, though the Board has suggested that the said disorders can be kept under control with the aid of oral medication but the Medical Report also suggests periodic evaluation of the applicant s health. In the present case, in view of the aforesaid report of the Medical Board, it cannot be said with full proof that the applicant is hale and hearty and is in the state of suffering incarceration at the age of 83 years. Therefore, this Court is of the considered view that in terms of the proviso contained in Section 45 of the PMLA, the applicant is entitled to be enlarged on anticipatory bail under the following exceptional circumstances:- i. The applicant is aged about 83 years, ii. The applicant is suffering from Ishemic Heart Disease (IHD) since 2015 with preserved EF, Hypothyroidism and Bilateral Knee Osteoarthritis with Lumbar Spondylosis. iii. The applicant appeared before the respondent upon receiving the summons on two occasions i.e. on 5.9.2023 and 27.10.2023. iv. The complaint was filed against the applicant on 8.11.2023 i.e. within 10 days of applicant s appearance before the respondent on 27.10.2023. Taking into consideration, the aforesaid exceptional circumstances, this Court deem it proper to enlarge the applicant on anticipatory bail - Application allowed.

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• Service Tax

• 2024 (4) TMI 173
  Non-payment of Service tax - commercial rental income under immovable property service (RIPS) - Construction Service (CS) and Commercial Complex Service (CCS) - period from September 2008 to September 2009 - levy of penalty u/s 76 and 77 of FA - HELD THAT:- The Principal Bench of CESTAT in the case of M/S KRISHNA HOMES VERSUS CCE, BHOPAL AND CCE, BHOPAL VERSUS M/S RAJ HOMES [ 2014 (3) TMI 694 - CESTAT AHMEDABAD] has held the agreements entered into by a builder/promoter/developer with prospective buyers for construction of residential units in a residential complex against payments being made by the prospective buyers in instalments during construction and in terms of which the possession of the residential unit, is to be handed over to the customers on completion of the residential complex and full payment having been made, are to be treated as works contracts, it has to be held that during the period of dispute, there was no intention of the Government to tax the activity in terms of such contracts a builder/developer with prospective customers for construction of residential units in a residential complex. Such works contracts involving transfer of immovable property were brought within the purview of taxable service by adding explanation to Section 65(105)(zzzh) w.e.f. 1.7.2010, and therefore, it has to be held that such contracts were not covered by Section 65(105)(zzzh) during the period prior to 1.7.2010. To tax a particular service, the liability under that head shall only be prospective and not applicable for any period prior to that date, i.e. 01.07.2010 as in the case on hand. Hence, service tax could not be levied under works contract service prior to 01.07.2010; and the levy could only be under CRCS/CCS simplicitor as the case may be. Further, as held by the Hyderabad Bench of the Tribunal in COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, VISAKHAPATNAM - I VERSUS M/S PRAGATI EDIFICE PVT LTD (VICE-VERSA) [ 2019 (9) TMI 792 - CESTAT HYDERABAD] , after 1.6.2007, the chargeability to works contract arises only if it is a composite contract and under construction of complex service if it is a service simplicitor - appeals insofar as with grounds relating to CCS and CRCS are concerned allowed. Penalty under RIPS - HELD THAT:- The issue involved interpretation in as much as, the High Court of Delhi held that there was no liability to service tax insofar as the renting of immovable property was concerned and therefore, an amendment was brought in, to overcome the above judgement. Further, even as on date the issue is pending before Hon ble Apex Court. Hence, it is a fit case where provisions of Section 80 of the Finance Act, 2012 could be exercised. The penalties imposed on the appellant also cannot sustain - the impugned order set aside - appeal allowed.

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• 2024 (4) TMI 172
  Taxability - advance payments - failure to issue invoice/bill on receipt of certain payments towards the value of taxable services, even in case where these payments were received as advance - non-payment of service tax - Consulting engineer services - point of taxation Rules - HELD THAT:- From the facts of the case it is clear that appellant has failed to pay the service tax at the time when it became due. As per the said rule undisputedly when the appellant raised the invoice in respect of these i.e. on completion of the project or at any time, they were making proper accountal and payment of service tax for which reason there is no discrepancy noted in the balance sheet, ST-3 return and from Form 26AS. Nothing has been brought on record as to the effect that service tax in respect of these payments received have not been paid. The entire case against the appellant is that they have not paid service tax at the time as determined under Rule 3 of Point of Taxation Rules, 2011. Even if the allegations made in the show cause notice and in the impugned orders are to be accepted but the service tax on the entire taxable value has been paid on finalization of the service contract with the Government Departments. There cannot be any short/nonpayment of service tax - No exercise has been undertaken in the present case to correlate the payments received as advances, in case of completion of stage, even in case of continuous supply with final invoice issued on completion of the projects. Such a re-conciliation is necessary to determine the tax short paid, if any. In any case if the tax has been found to be paid against the entire value of contract/project undertaken by the appellant, there cannot be any further demand of service tax. In the case of M/S VODAFONE DIGILINK LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX [ 2019 (7) TMI 521 - CESTAT NEW DELHI] it was held that Since the point of taxation has not occurred under any of the clauses of the said Rule 3, the liability to pay service tax has not arisen. To undertake the exercises of re-conciliation, the matter needs to be remitted back to the Original Adjudicating Authority for recording specific findings in the matter - Appeal allowed by way of remand.

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• 2024 (4) TMI 171
  Recovery of CENVAT Credit alongwith interest and penalty - CENVAT Credit - duty paying documents - demand on the sole ground that the appellant had not followed the ISD Procedure for passing on the Cenvat Credit by their Head Office - HELD THAT:- There is no allegation in respect of goods on which Cenvat Credit has been taken as having not been received, the utilization within the factory is also not disputed. Admittedly, all the original documents have been produced by the Appellant, before the Adjudicating Authority at a later date. Since the Appellant has clearly claimed that they have only one unit and there was no possibility of taking the Cenvat Credit in different units when the vendor has raised the invoice in the name of head office, there are no reason as to why the said submission was not taken up for consideration by the Adjudicating Authority. The Gujarat High Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS DASHION LTD [ 2016 (2) TMI 183 - GUJARAT HIGH COURT] has held that even in the absence of any ISD Challan in such cases, Cenvat Credit cannot be denied. The CBIC Circular No.1063/2/2018-CX dated 16/02//2018 has accepted the decision of the Hon ble High Court of Gujarat. The demand is set aside - appeal allowed.

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• 2024 (4) TMI 170
  Recovery of service tax alongwith interest and penalty - Business Auxiliary service - non-filing of ST-3 returns within the prescribed time limit - non-payment of late fee for delayed filing of ST-3 returns - Extended period of Limitation - period April 2011 to March 2012 - HELD THAT:- In the impugned order, the Commissioner (Appeals) relied on the decision of this Tribunal in Surendra Singh Rathore to hold that the settled legal position is that the activities of the appellant are chargeable to service tax and, therefore, upheld the demand. It needs to be pointed out that even as per the self assessment by the appellant in its ST-3 returns, the appellant had rendered business auxiliary services; the amount received for these services and the tax payable were also indicated. There was no doubt in the minds of either the appellant or the officers that the settled legal position was that the activities of the appellant were exigible to service tax. It is for this reason that the appellant had obtained service tax registration, self-assessed the amount of service tax payable and had also filed ST-3 returns accordingly. However, the appellant failed to deposit the service tax. It is not open for the appellant to now say that his activities did not amount to rendering taxable services at all when his own self assessment was to the contrary. It is also not in dispute that the appellant had delayed filing of ST-3 returns and had not paid the appropriate late fee, as required under the rules. It is found that the demand of service tax with interest, the late fee and the penalties imposed on the appellant are correct and proper and call for no interference. The impugned order is upheld and the appeal is dismissed.

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• Central Excise

• 2024 (4) TMI 169
  Refund claim lying in cenvat credit on CVD and BCD paid by the appellant - rejection on the ground of non compliance by the appellant to the export obligation in terms of EPCG License of advance authorization for import of the capital goods by the appellants - time limitation - rejection also on the ground that refund claim filed after the expiry of period mentioned in the Section 11B of the existing law (CEA, 1944). Non compliance by the appellant to the export obligation in terms of EPCG License of advance authorization for import of the capital goods by the appellants - HELD THAT:- The appellant had not deposited the duty during the existence of the Central Excise Act, 1944. Resultantly, the question of appellant becoming entitled to cenvat credit under the existing law does not at all arise. Section 140 and 142 of CGST, Act no doubt all the transitional provisions permits for tax or duty or refund of amount credit lying in stock on the appointed day (01.07.2012) however, subject to following two conditions:- (i) the assessee should have become eligible for the said credit under existing law; (ii) the said credit should have been transferred to electronic ledger - Since the duty in the present case has been paid after the said appointed day, the question of impugned credit being available to the appellant under the existing law is absolutely redundant,giving only one inference that on the appointed day, the appellant was not eligible for the cenvat credit as has been prayed to be refunded under the garb of the transitional provisions. The amount in question since has been paid after introduction of CGST, Act 2017 but for the Bill of Entry of the year 2010 (dated 10.09.2010) on account of failure of compliance with the export obligation under advance authorization license, the cenvat credit of such duty which is paid under the present CGST Law, cannot be made available to the assessee in the light of the transitional provisions of new CGST, Act. More for the reason, the appellant was notregistered under Excise Department.The appellant is not eligible even under Section 172 of the GST Act. Time Limitation - refund claim being filed after the expiry of period mentioned in the Section 11B of the existing law (CEA, 1944) - HELD THAT:- Apparently and admittedly the claim has been filed under Section 11B of the existing law, the period prescribed therein is one year from the relevant date.Present is the case of claiming refund of credit on CVD and BCD paid. The imports in question was of the year 2010, CVD/BCD were paid after 10 years in the year 2019. Therefore, the refund claim has been filed after 2 years for payment of duty in the year, 2021. The refund claim is apparently barred by time - seeing the impugned refund was absolutely online, the benefit of said decision cannot be extended in favour of the appellant. The refund claim is held to have rightly been rejected. The impugned order is sustained - Appeal dismissed.

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• 2024 (4) TMI 168
  Clandestine removal - onus to prove - cross-examination of witnesses - retraction of statements - Revenue s case is primarily dependent upon the documents Collection Books (diary), forwarded by the Income Tax after seizure and a photocopy of seized by the Central Excise department during the course of panchnama at the factory on 12.01.2012 - HELD THAT:- From the plain reading of section 9D, it can be seen that it is not a discretion or choice of the adjudicating authority whether to allow or not to allow the examination in chief and or cross examination of witness. In the present case, since the witness have categorically denied the statement it become incumbent on the adjudicating authority to conduct the examination in chief and thereafter allow the cross examination of the witnesses to the appellant. Without carrying out the process as envisaged under Section 9D, the adjudication is not fair, therefore the matter needs to be remanded to the adjudicating authority for passing a fresh order after conducting the examination in chief and thereafter allowing the appellant to cross examine the witnesses whose statements were relied upon. It is also made clear that despite all efforts of cross examination it the cross examination is not completed or partly completed, the adjudicating authority is not precluded to proceed with the adjudication on the basis of records. The impugned order set aside - appeal allowed by way of remand.

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• 2024 (4) TMI 167
  Valuation of goods - undervaluation - Across-the-Board Rebate (ABR) - admissibility of discounts - adjustment of list price by giving different rebates / discounts referred to as Movement Plan Rebate (MPR) - period from May 2008 to April 2012 - Extended period of limitation - HELD THAT:- It can be seen from the wordings as used in Section 4(1) that the assessable value is the transaction value at which goods are sold by an assessee for delivery at the time and place of removal, whereas transaction value is the price actually paid or payable for the goods. In the instant case, as the goods are not sold from the factory gate and the depot / BSO is the actual place of sale, the assessable value would therefore be required to be determined in terms of Section 4(1)(a) of the Act in accordance with the provisions of Section 4(1)(b) ibid., read with Rule 7 of the Valuation Rules, which caters to sale of goods from a depot to non-related buyers and price being the sole consideration for sale - the BSOs allow discounts to final customers beyond the price circulars that are duly known to the appellant at the time of removal of goods from the factory (conveyed through the internal communications of the CMO). Such discounts are allowable as deduction from the price of the goods for the purpose of determination of duty due thereon. In terms of Rule 7 of the Valuation Rules, any discount given at the time of clearance of goods ought to be allowed for assessment of goods transferred to the BSO when the same is passed on to the final customers - with reference to an Across the Board Rebate (equivalent to MPR), this Tribunal in the appellant s own case STEEL AUTHORITY OF INDIA LTD. VERSUS COMMISSIONER OF C. EX., RAIPUR [ 2005 (11) TMI 10 - CESTAT, NEW DELHI] had held The law with regard to the valuation of the goods is that the goods should be assessed at the net price, i.e. minus the discount, to Central Excise duty. In the present case, it is clear that the valuation adopted by the appellant was only more than the net realisation at the depot stage. The rebate as was known by way of MPR and uniformly passed on would be required to be taken note of for determination of the assessable value. There is a complete similarity in the factual matrix of the appellant s own case, with the present issue at hand inasmuch as the CMO determined the ABRs (in the present case, MPRs) and indicated the same to the plant as well as depots. The goods were sold from the depots after allowing such ABRs (in the present case, MPRs) indicated on the face of the invoice. Also, the Chartered Accountant s certificate furnished both in the said case and the present case referred to supra, establishes that the cumulative value of the ABRs (in the present case, MPRs) allowed from the depot exceeded the ABRs (or MPRs) as claimed by the appellant. The Hon ble Apex Court s decision in the case of M/S. PUROLATOR INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI III [ 2015 (8) TMI 1014 - SUPREME COURT] has also upheld the admissibility of discounts that were passed on to the buyers and were known at the time of clearance of goods as eligible deduction for the purpose of determination of the assessable value. There are no sustenance in the order of the Ld. Commissioner under challenge herein - impugned order set aside - appeal allowed.

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• CST, VAT & Sales Tax

• 2024 (4) TMI 166
  Illegal attachment and withdrawal from bank account by respondents to recover the arrears of VAT dues of another company - it was held by High Court that There is no question of lifting the corporate veil treating that the proprietor of petitioner entity and the assessee M/s.Shree Ganesh Jewellery House Limited as one and the same or as entities which are connected or related - HELD THAT:- There are no reason to interfere with the impugned judgment passed by the High Court. Hence, the Special Leave Petition is dismissed.

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• 2024 (4) TMI 165
  Levy of tax under Section 4A of the Entry Tax Act - extraction of coal and the work of coal extraction - manufacture or not - HELD THAT:- The issue raised by the applicant needs to be adjudicated. Therefore, the Commercial Tax Tribunal is called upon to make a reference elaborating the facts and question of law and refer the same to this Court. The Tax Case is disposed of.

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• Indian Laws

• 2024 (4) TMI 164
  Conscious possession of contraband item - poppy seeds - facts not put to the appellant during his examination - Section 313 of Cr.P.C. - violation of principles of natural justice - HELD THAT:- The circumstance against the appellant that he visited the railway station and enquired with the station supervisor about the contraband parcels has not been put to the appellant during his examination under Section 313 of Cr.P.C - Even the alleged circumstance that the railway receipt was in the appellant s name has not been put to him in his statement under Section 313 of Cr.P.C. The circumstances on which the prosecution relied upon against the appellant were not put to him in his examination under Section 313 of Cr.P.C. Even the question No. 15 does not incorporate any specific circumstance against the accused - the circumstances alleged against the appellant will have to be kept out of consideration. There is no other material on record to connect the appellant with the offence. The incident is of May, 2001, and therefore, it will be unjust to subject the appellant to further examination under Section 313 of Cr.P.C. at this stage, nearly twenty-two and half years from the date of the alleged recovery of the contraband. As the only material circumstances pleaded by the prosecution against the appellant were not put to him, a serious prejudice has been caused to the appellant s defence. The appellant has undergone incarceration of five and a half years. If, after the lapse of more than twenty-two years, he is again subjected to examination under Section 313 of Cr.P.C., it will cause prejudice to him. Therefore, the failure to put two relevant circumstances to the appellant in his examination under Section 313 Cr.P.C. will be fatal to the prosecution case. Hence, on this ground, the appellant s conviction cannot be sustained. The impugned judgments of the Trial Court and High Court are set aside only insofar as the present appellant is concerned - Appeal allowed.

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