Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 14, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Refund of input tax credit in respect of tax paid on purchase of goods utilized for export - Delay in receipt of Convertible foreign exchange - The matter requires further examination - Notices issued - Petitioner asked to show that reasonable steps have been taken by the petitioner to realise the export proceeds. - HC
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Levy of penalty u/s 122(2)(a) of CGST/APGST Act - notice under Section 73(1) within three months prior to the time limit specified in sub-section (10) of Section 73, not issued, which is a requirement to impose penalty - Matter remitted back for making fresh assessment of tax and penalty - HC
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Registration of fresh GST number of the Corporate Debtor - keeping the Corporate Debtor as a going concern - a suo-moto cancellation of GST registration on an earlier occasion by the GST department cannot be a ground to reject a fresh registration application by Company/Corporate Debtor undergoing CIRP under IB Code - Tri
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Seeking grant of Bail - different entities were clubbed to arrive at alleged amount of tax evasion of ₹ 6.31 crores - without discussing the evidence in detail, at this stage, this Court is inclined to grant regular bail to the applicant - Bail granted subject to conditions - HC
Income Tax
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No doubt a party may choose to waive the right to be heard and instead choose to rely only on written submissions - it is the duty of the adjudicating authorities to ensure that the waiver so made is intelligently made and with full knowledge and understanding i.e. with the foreknowledge that the right to be heard 'exists. The record is silent on this aspect. In the facts of the present case there is nothing on record to show that the right to be heard was consciously and knowingly waived. - AT
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Interest free advances given by the assessee to its group concerns - the assessee and its group concerns were paying the taxes at the maximum marginal rate as evident from the income tax acknowledgements of its group companies. Accordingly we hold that there was no loss to the revenue for not charging interest on the amount extended by the assessee as interest-free loan to its group companies. - AT
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Assessment u/s 153A - scope of assessments u/s 153C/ 153A - the additions made in the order passed u/s 143(3) r.w.s. 153C, for the captioned assessment years which are unabated assessments, cannot be made, because same are beyond the scope of assessments u/s 153C/ 153A as the same are without any incriminating documents found during search. - AT
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Revision u/s 263 - Enhancement of valuation of closing stock - assessee could not point out any defect or discrepancy in the recomputation made by Pr. CIT for computation of closing stock by adopting FIFO method. As we have already observed that there is no enquiry by the AO on this issue in the assessment order, therefore, in our considered view, the Ld. Pr. CIT was correct in holding the assessment as erroneous and prejudicial to the interest of the Revenue - AT
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Interest income on fixed deposits received - AO has rightly treated the interest received during the construction period from the money parked as fixed deposits and interest on advance as ‘income from other sources and netting off of capital expenditure from the interest has rightly been disallowed. - AT
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Long term capital gain - air Market Value (FMV) thereof u/s. 48(ii) r.w.s. Expl (iii) r.w.s. 55A - FMV of the assessee's capital asset @ ₹ 400 per sq. yard by applying “thumb rule” would be just and proper in the given facts and circumstances with a rider that the same shall not be treated as a precedent. Ordered accordingly. - AT
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Revision u/s 263 - LTCG - deduction as claimed by the assessee u/s 54F - Pr. CIT was not justified in imposing his view upon the assessing officer on wrong appreciation of facts and not considering the fact that issues raised in the show cause notice u/s 263 of the Act were thoroughly examined by Ld. AO and has duly applied his mind taking one of the permissible view under the law. - AT
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Reopening of assessment u/s 147 - Since the present assessment order is framed on the very same reasons, which were considered by the Tribunal (supra) while quashing the order, once the reasons have not been accepted by the Tribunal, the same cannot be held to be good for the present assessment. - AT
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Exemption u/s. 11 & 12 - commercialization of education - paying huge commission to middle men to bring students to assessee’s institution - It is not a case of broker and commission payment but payment for liasoning which is very much essential in these days and especially considering the number of educational institutions available and also the vast area from where the students come from. This cannot be a reason to conclude that the assessee is carrying on a commercial venture. - There is no question of denial of exemption u/s. 11. - AT
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Penalty levied u/s. 271C - Non deduction of TDS - the provision created at the end of the accounting year has not been credited to the relevant parties to whom the payments has to be made for the reason that it was unquantifiable. Further, assessee has suo moto disallowed the said sum under section 40(a)(ia) for non-deduction of TDS. - Therefore there is a sufficient and reasonable cause for not deducting TDS on the year-end provision. - No penalty - AT
Customs
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Discharge of the accused under the prevention of corruption of act - officers of Central Excise Department - allegation of fraudulent availing the benefit of DEPB (Duty Entitlement Pass Book) Scheme - in the adjudication proceedings, it is not proved that the Accused were in any way guilty of the act of omission/dereliction of duty or acting in an illegal manner. - The claim of the Applicant that there is a miscarriage of justice and as the offence under the Prevention of Corruption Act and the adjudication by the competent authority are parallel and cannot go hand in hand, is liable to be rejected - HC
Corporate Law
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Oppression and mismanagement - The complete exclusion of the petitioner group from the board cannot be justified merely by pointing out that the meeting is a validly convened meeting, that the resolutions were duly approved and therefore the court should not intervene. There is no gainsaying that the principles of equity have been greatly disturbed by the act of the respondent group in removing all the three directors of the petitioner group and assuming 100% control of the board. The petitioners have made out a prima facie case for grant of the interim reliefs. - Tri
Indian Laws
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Dishonor of Cheque - initiation of Criminal Case - Whether a criminal case initiated under Section 138 of Negotiable Instrument Act, after ending in conviction and reach its logical end - when once a Criminal Case registered under Section 138 of the N.I. Act, had handed down the conviction either in the Appeal or in the Revision by the High Court, the question of compounding of the offence(s) thereafter under Section 147 of the N.I. Act by invoking Section 482 Cr.P.C. is not permissible - HC
IBC
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Validity of unilateral changes made to the Resolution Plan - implementation of Resolution Plan - It is for the respondent Banks to take a decision as to whether the petitioner Company should be revived and whether additional money has to be pumped in by them, but this Court cannot give a direction to take forward the conclusions arrived in the Joint Lenders Meeting held on 19th and 27th of March, 2020, to the logical end. - HC
Service Tax
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Rejection of application under SVLDRS - The stand of the petitioner has, as noticed by me at paragraph 9 above, no legal sanction and the interpretation put forth does not merit acceptance.No justification to relegate the petitioner to the authority, particularly seeing as this litigation pertains to an amnesty scheme where proceedings should, as far as possible, be fast tracked and not delayed. - Liberty is granted to the petitioner to approach the authorities seeking some more time to remit the dues contemplated under the revised SVLDRS. - HC
Case Laws:
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GST
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2021 (5) TMI 420
Constitutional vires of Section 16(2)(c) of CGST Act as also Rule 36(4) and 86A(1)(b) of the CGST Rules, 2017 - HELD THAT:- Petitioner informed that there are other petitions pending adjudication before this Court, which raise issues, that are similar to the ones, that subsist in the instant writ petition. Issue Notice.
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2021 (5) TMI 419
Refund of input tax credit in respect of tax paid on purchase of goods utilized for export - Delay in receipt of Convertible foreign exchange - Petitioner also seeks a direction for payment of interest by the respondents - HELD THAT:- The petitioner s claim for refund is pivoted on the provisions of Section 16 of the Integrated Goods and Service Tax Act, 2017 - A perusal of Section 8 of FEMA would show that, it calls upon the concerned person to take reasonable steps for realisation and repatriation of foreign exchange proceeds. In this case, the realisation and repatriation of foreign exchange involves proceeds from goods exported by the petitioner. Furthermore, nothing has been shown by Mr. Singh, which would connect the provisions of Section 8 of the FEMA with Section 16 of the IGST Act. The matter requires further examination - Issue notice.
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2021 (5) TMI 418
Amendment to Section 50 of the CGST Act, 2017 - HELD THAT:- The letter of the Principal Commissioner, Office of the Principal Commissioner of Central Tax, Hyderabad GST Commissionerate, Bhasheerbagh, Hyderabad, is placed on record, which states that the amendment to Section 50 of the CGST Act, 2017 is made effective from 01.07.2017 as per the Finance Act, 2021. Petition closed.
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2021 (5) TMI 416
Levy of penalty u/s 122(2)(a) of CGST/APGST Act - notice under Section 73(1) within three months prior to the time limit specified in sub-section (10) of Section 73, not issued, which is a requirement to impose penalty - HELD THAT:- Learned Counsel for Revenue submitted that he has no objection for setting aside the impugned order and remanding the matter for fresh assessment. The matter is remitted back with a direction that a fresh assessment of tax and penalty shall be made by an authorized officer within four weeks from the date of receipt of a copy of this order - Petition allowed by way of remand.
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2021 (5) TMI 409
Registration of fresh GST number of the Corporate Debtor - keeping the Corporate Debtor as a going concern - HELD THAT:- the RP is managing to run the business operation of the Corporate Debtor as a going concern as per Section 25(1) of IBC, which is the intent of the IB Code, so as to, keep the Corporate Debtor as going concern. In that event, when the Applicant has applied for registration of the GST of the Corporate Debtor, the GST Department supposed to register the same, instead of rejecting on a very flimsy ground ignoring the circular so issued by the Ministry of Finance on 23.03.2020. On perusal of Circular issued by the Ministry of Finance on 23.03.2020, puts forth, that a suo-moto cancellation of GST registration on an earlier occasion by the GST department cannot be a ground to reject a fresh registration application by Company/Corporate Debtor undergoing CIRP under IB Code - The above said circular dated 23.03.2020 is very clear on the issue, that the Corporate Debtor who, is undergoing CIRP is to be treated as distinct person of the Corporate Debtor and shall be liable to take a new registration in each State or Union Territory, where the Corporate Debtor was registered earlier. That apart, under Section 238 of the IB Code, clearly provide that, it will override the provision of other laws. Under such circumstances, the instant application is fit to be allowed. Thus a suo-moto cancellation of GST registration on an earlier occasion by the GST department cannot be a ground to reject a fresh registration application by Company/Corporate Debtor undergoing CIRP under IB Code - application allowed.
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2021 (5) TMI 402
Seeking grant of Bail - different entities were clubbed to arrive at alleged amount of tax evasion of ₹ 6.31 crores - HELD THAT:- Taking into consideration the facts of the case, nature of allegations, gravity of offences, role attributed to the accused, without discussing the evidence in detail, at this stage, this Court is inclined to grant regular bail to the applicant. Taking into consideration that the applicant is in jail since 03.01.2021, investigation is over and the chargesheet is filed and that the present case is based on documentary evidence which may at best attract a punishment maximum up to 5 years, this court has decided to grant bail subject to conditions imposed - the applicant shall deposit an amount of ₹ 2,00,000/before the State Tax Officer and on depositing the aforesaid amount and producing appropriate document with regard to the depositing of the amount the applicant is ordered to be released on regular bail - application allowed.
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Income Tax
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2021 (5) TMI 417
Reopening of assessment u/s 147 - ITD made a submission that during the pendency of this writ petition, the Assessing Officer passed final order of assessment based on the notice issued under Section 148 for reopening of the assessment - HELD THAT:- In the present writ petition, the proceedings dated 30.03.2018 issued by the 1st respondent under Section 148 of the IT Act and the consequential proceedings dated 11.12.2018 passed by the 2nd respondent are under challenge. When the fact remains that pursuant to the impugned notice under Section 148 of the IT Act, re-assessment has already been done and challenging the assessment order, the writ petitioner has already filed it is left open to the writ petitioner to raise all the grounds raised in this writ petition in the other writ petition filed challenging the assessment order. As far as the present writ petition is concerned, the cause arose pursuant to the notice issued under Section 148 of the IT Act did not exist as of now and thus, no further adjudication needs to be entertained and accordingly, the writ petition stands disposed of
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2021 (5) TMI 414
Validity of reassessment proceedings u/s 147 - approval by the concerned / competent authority in a mechanical manner u/s 151 - as argued approval for issue of the notice under section 148 of the Act was granted by the CIT in a mechanical manner and without application of mind and, therefore, reassessment proceeding must be quashed - HELD THAT:- On perusal of the proforma for the approval granted by the PCIT, it is evident that in the relevant column No.13 for satisfaction of the Pr.CIT, he has only mentioned yes . No other information is available on record or provided by the ld. DR, which could establish application of mind by the CIT, while granting sanction/approval for issue of notice u/s 148 of the Act. No other evidence was produced as to substantiate that matter was ever discussed between the Assessing Officer or Addl. CIT and the Learned Pr.CIT for arriving at satisfaction of Learned Pr.CIT on the reasons recorded by the Assessing Officer. Even no evidences whether Ld PCIT examined the material relied upon by the Ld AO for reopening, was produced before us. Mere mentioning of yes for approval, without any other evidence of application of the mind, amounts to mechanical approval by the LearnedPr.CIT. Further in Column No. 7 of the proforma, the section for invoking reassessment has been recorded as 147(b) of the Act. During the relevant period, section 147(b) was no longer in existence. This shows that the Ld. AO has filed the Proforma in mechanically manner and Ld. CIT has also approved the same mechanically. As following case of M/S N.C. CABLES LTD. [ 2017 (1) TMI 1036 - DELHI HIGH COURT] and M/S. MADHU APARTMENT PRIVATE LIMITED [ 2021 (2) TMI 709 - ITAT DELHI] we quash the reassessment proceeding in the case of the assessee. - Decided in favour of assessee.
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2021 (5) TMI 413
Correct head of income - income from other sources or business income or capital receipt - interest accrued on funds and other miscellaneous income - as per AO funds not required immediately by the assessee company for its business purposes and which were invested in fixed deposit and for the advances given to the contactors - assessed the interest income and miscellaneous income (for sale of a scrap) under the head Income from other sources - CIT(A) deleted the addition - HELD THAT:- As relying on own case [ 2017 (9) TMI 1930 - ITAT DELHI] interest incomes are also inextricably linked with the setting up of the power plant and such incomes have gone on to reduce the expenses for setting up of the plant and as there was no surplus funds available with the appellant company, therefore, such income is required to be capitalized to be set off against the pre operative expenses. As such the A.O. is not justified in adding the sum as income from other source u/s 56 - Decided in favour of assessee.
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2021 (5) TMI 411
Violation of principles of natural justice - right to be heard - Rectification u/s 154 - Period of limitation - return is e-filed - bonafide mistakes of ignorance of facts - Rectification of amount received compulsory acquisition of land by the Government - rectified computation of income and proof of payment for compensation made by the District Magistrate (SDM)-cum-Land Acquisition Collector, Sangrur for consideration and necessary action HELD THAT:- Rectification application duly e-filed was not disposed of within the statutory time limit remains unaddressed. Similarly, the reasoning that the application referred to by the AO is a manual application filed later by the Counsel for the appellant cannot be considered to be the original application filed through e-portal appears to be a case of heads you loose and tails also you loose. The submission afforded as an argument cannot be substituted for the original application to the prejudice of the assessee. If there were deficiencies, in the e-filing of the application, these should have been notified to the assessee for correcting the defect. The tax authorities cannot be seen to violate the Statutory time lines at their whims and fancies. The disposal of the appeal in this manner cannot be upheld. Similarly the reasoning that, The manual application signed by the Counsel, is in itself not regular unless it is by way of a reminder with regards to the online application filed also does not address the issues at hand. The issue remains open since it is unclear was it treated as a reminder or a substitution. , in case there were any deficiencies in the rectification application filed by the assessee, then the defect should have been notified and opportunity to correct the same should have been provided. The assessee cannot be subsequently burdened on account of lapses etc. which were never pointed out. The primary issue which thus, remains for consideration is can the rectification order be said to have been passed within the statutory timeline. On the facts as available on record, it appears that the answer is no. However, since the issue has been deflected/obfuscated, it is remanded back for consideration afresh. What would constitute record? - what would constitute the record for a case of rectification like this wherein the return is e-filed? - As limitations of documents only filed on e-portal cannot operate against the citizen taxpayers. The systems set in place for robust tax collection cannot be so used as to deprive the tax paying citizens from getting a fair hearing and seek a proper adjudication on disputed facts. Such an action would be wholly unjustified. The systems and e-portals are still in the process of being fine tuned and still in the process of being perfected. They cannot be presumed to be so sacrosanct and final and thus beyond critical scrutiny. For the purposes of the present proceedings, as will confine myself to holding that every statutory order/decision and relevant facts which went into the decision making of punching the figures on e-portal at the relevant point of time would constitute the record for the purposes of proceedings u/s. 154. All bonafide mistakes of ignorance of facts; misinterpretation and incorrect understanding of relevant statutory provisions etc. applicable at that specific point of time would be covered under this umbrella. The axioms that the mistake is rectifiable only which is patently evident on the face of the record of course remains inviolate what has been elaborated is what would constitute the record. Can written submissions without a conscious waiver be treated as waive of Right to be heard? - In the facts of the present case, it is seen that written submissions had been advanced. It is seen that the submissions were considered but did not find favour with the First Appellate Authority as the order u/s. 154 stood confirmed. From the body of the order, it is not evident whether the assessee was confronted with the fact that its written submissions were not sufficient for relief prayed for and that the assessee was given an opportunity of being heard thereafter. In the eventuality, written submissions of the assessee were found to be insufficient for granting relief and were considered to be not relevant, then the assessee should in all fairness be necessarily confronted with the fact that its claim was not allowable and be given due notice thereof. The purpose being that if the assessee still has something further to say, the opportunity of so saying should have been provided. The arbitrary presumption that the assessee shall have nothing to state cannot be upheld. The due process of law envisages an opportunity of fair representation. As evident from the impugned order assailing which specific ground invoking principles of natural justice has been taken that the right to be heard was not waived off by the assessee by mere making available of the written submissions to the First Appellate Authority. No doubt a party may choose to waive the right to be heard and instead choose to rely only on written submissions - it is the duty of the adjudicating authorities to ensure that the waiver so made is intelligently made and with full knowledge and understanding i.e. with the foreknowledge that the right to be heard 'exists. The record is silent on this aspect. In the facts of the present case there is nothing on record to show that the right to be heard was consciously and knowingly waived. The order cannot be upheld and deserves to be set aside. The impugned order is set aside in toto and restored back to the file of the CIT(A) with a direction to pass a speaking order in accordance with law first on the maintainability of the order itself after giving the assessee a reasonable opportunity of being heard - Appeal of the assessee is allowed for statistical purposes.
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2021 (5) TMI 408
Interest free advances given by the assessee to its group concerns - CIT (A) who deleted the addition made by the AO by observing that the interest free loans and advances were extended as a measure of commercial expediency - no loss to the Revenue for not charging interest by the assessee from the group concerns as the assessee and other group concerns were paying the taxes at the maximum marginal rate - whether the interest free advances were given by the assessee to its group concern as a measure of commercial expediency? - HELD THAT:- The group concern of the assessee have rendered services to the assessee in the year under consideration as well as in the immediate preceding year. The debit notes/invoice issued by these parties are placed on sample basis. Thus from the above, it is clear that the advances were extended by the assessee to the group concern as a measure of commercial expediency. In addition to the above we also find that the assessee and its group concerns were paying the taxes at the maximum marginal rate as evident from the income tax acknowledgements of its group companies. Accordingly we hold that there was no loss to the revenue for not charging interest on the amount extended by the assessee as interest-free loan to its group companies. As decided in DELOITTEE HASKINS SELLS, AHMEDABAD. [ 2019 (10) TMI 349 - ITAT AHMEDABAD] once it is established that there is nexus between the expenditure and the purpose of business, the revenue cannot assume the role to decide as to how much is reasonable expenditure. Apart from this, the Ld. first appellate authority has also noted that the assessee firm had its own funds which were more than the amount of advances given therefore, there was no occasion for the assessing officer to make disallowance on account of interest - Decided in favour of assessee. TDS u/s 194I or 194C - short deduction of TDS - Addition u/s 40(a)(ia) - payments to the Hotels either without deducting the TDS or deducted TDS at the rate lower than the rate prescribed under the Act - HELD THAT:- The assessee in the case on hand has deducted the taxes and also deposited the same but as per the AO same is deducted in wrong section resulting in short deduction. However there the assessee cannot be held in default under section 40(a)(ia) of the Act. Provisions of TDS with respect to the room charges will be applicable where the hotel accommodation was taken on regular basis. The CBDT in its circular number 05 of 2002 dated 30-07-2002 has clarified that where the rooms have been earmarked for a specified rate and for the specified period, then it shall be construed as accommodation available on regular basis. However in the case on hand there is nothing coming from the order of the AO suggesting that the rooms have been earmarked by the assessee for a specified period and specified rate. We hold that there cannot be any disallowance on account of non-deduction of TDS under section 194-I of the Act. Hence we uphold the finding of the learned CIT (A). Thus the ground of appeal of the Revenue is dismissed
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2021 (5) TMI 407
Refund amount remission - jurisdiction as per the Code - whom should the refund amount (ordered to be paid by the Income Tax Department, i.e., revenue) be remitted to? - respondent no.4 is undergoing a Corporate Insolvency Resolution Process, under the Insolvency and Bankruptcy Code, 2016 (Code), before the National Company Law Tribunal - NCLT has appointed a Resolution Professional( RP ) - HELD THAT:- RP is working under the sway of the NCLT, we are of the view that, the petitioner needs to approach the NCLT for appropriate directions. Our initial, albeit prima facie view, that the revenue could take a call on the matter, i.e., as to who is the rightful recipient of the refund has undergone a change in view of what has been brought forth by the RP. That being said, it is not inferred from this, that the RP, is right. The petitioner needs to be heard and the NCLT, as observed above, has the jurisdiction as per the Code to rule on the issue Petitioner Mr. Jolly was granted time to obtain instructions in this behalf. Mr. Jolly has obtained instructions. Mr. Jolly submits that he will withdraw the writ petition, and approach the NCLT with an appropriate application. Mr. Jolly says the only concern that the petitioner has, at this stage, is with regard to the time that may be taken for the resolution of the petitioner s grievance. Given this position, Ms. Satpal says that, if the petitioner were to approach the NCLT, the RP would assist the NCLT in an early disposal of the petitioner s application. Mr. Sharma submits likewise. In these circumstances, the writ petition is dismissed as withdrawn.
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2021 (5) TMI 406
Deductions u/s 80P(2)(a) (i) - assessee with its lending and borrowing involving non-members, whether the society still retains its character as cooperative society or whether it should be treated as a cooperative bank, disentitled to the benefits under section 80P(2)(a)(i)? - HELD THAT:- First, the Assessee has all these years continued with the same set of activities. And this has been accepted by AO. On earlier occasions, until the Assessment Year we are considering (2012-13), this Court has consistently declared that the Assessee continues to be a cooperative credit society entitled to the benefits under section 80P of the IT Act. We see no reason for the AO to take a different stand this Assessment Year. That apart, the Apex Court has put a quietus to the controversy whether the Revenue could go behind the registration certificate of cooperative society and examine its activities to determine its true nature, if any. In Mavilayi [ 2019 (9) TMI 782 - SC ORDER] the enunciation of law is emphatic: the authorities under the IT Act cannot go behind the certificate. Here, indisputably, all the Assessee have been registered as cooperative credit societies. Banking, as understood by the Revenue, has never been its core activity. Their accepting deposits from non-members does not disqualify them from claiming benefits under section 80P of the IT Act. - Decided in favour of assessee.
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2021 (5) TMI 400
Reopening of assessment u/s 147 - notice u/s 143(2) was issued to the assessee on the very same day on which the assessee appeared and furnished copy of ITR in response to notice u/s 148 - HELD THAT:- The notice u/s 143(2) was issued to the assessee on the very same day on which the assessee appeared and furnished copy of ITR in response to notice u/s 148 of the IT Act. As held in various decisions that when the notice u/s 143(2) is issued to the assessee on the very same day on which the assessee filed the return in response to notice u/s 148 stating that the return already filed may be treated as return in response to notice u/s 148, such notice issued u/s 143(2) on the very same day has to be treated as invalid and assessment is vitiated due to non-application of mind by the AO. Therefore, on all counts the reassessment proceedings initiated by the AO and upheld by the CIT(A) in my opinion is not in accordance with the law. Therefore, quash the reassessment proceedings and the grounds raised by the assessee are allowed.
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2021 (5) TMI 399
Assessment u/s 153A - scope of assessments u/s 153C/ 153A - Addition u/s 68 - whether incriminating documents found during the course of search? - HELD THAT:- Hon ble Supreme Court in case of CIT Vs. Sinhgad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] wherein exactly similar legal/technical ground was taken for the first time before the ITAT. Further, the Hon ble Apex Court upheld the order of the Tribunal that addition cannot be made for the assessment years for which there are no incriminating documents found during the course of search in the assessments framed u/s 153C. Seized incriminating material has to pertain to the assessment year in question and have co-relation, document-wise, with the assessment year. This requirement u/s 153C is essential and becomes a jurisdictional fact. It is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in S. 153A. The sequitur of the judgment which can be culled out is that, seized incriminating material has to pertain to the assessment year in question and have co-relation, document-wise, with the assessment year. This requirement u/s 153C is essential and becomes a jurisdictional fact. It is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in S. 153A. This judgment of the Hon ble Supreme Court clearly clinches the issue in favour of the assessee in this case. Thus we hold that the additions made in the order passed u/s 143(3) r.w.s. 153C, for the captioned assessment years which are unabated assessments, cannot be made, because same are beyond the scope of assessments u/s 153C/ 153A as the same are without any incriminating documents found during search. - Decided against revenue.
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2021 (5) TMI 398
Revision u/s 263 - Enhancement of valuation of closing stock - HELD THAT:- CIT has not disturbed or disputed the method of valuation adopted by the assessee i.e. FIFO method but the computation made by the assessee was examined and found to be incorrect because only by including 4th bill to the details of three bills submitted by the assessed, it was observed that after inclusion of 4th bill, of the same period/date, the valuation of closing stock is enhanced to ₹ 2134 per MT instead of 1795 per MT as adopted by the assessee. On being asked by the bench, assessee could not point out any defect or discrepancy in the recomputation made by Pr. CIT for computation of closing stock by adopting FIFO method. As we have already observed that there is no enquiry by the AO on this issue in the assessment order, therefore, in our considered view, the Ld. Pr. CIT was correct in holding the assessment as erroneous and prejudicial to the interest of the Revenue and by directing the AO to modify the assessment order enhancing the addition - Appeal of the assessee is dismissed.
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2021 (5) TMI 394
Addition on account of deposits found made in the assessee's bank account - assessee explained the same as being sourced from sale of land - ownership of the specific land with the assessee/his mother; subsequent sale thereof if any, purchaser as per record denied having paid 'Biyana' in terms of 'Ikrarnama' to the assessee in his statement given to the AO - addition was made in the hands of the assessee - HELD THAT:- The tax authority at least for semi-literate economically depressed agricultural land holders stand in the position of locus parentis as they may not be aware of the manipulative practices and being interested only in receiving the payment, for sale of their land may simply sign on the dotted line. In such transactions, it is the wily purchasers who would take advantage of honest seller who has deposited the entire Sale consideration including that received in cash in their banks. It is not difficult to visualize the motives a purchaser may have to record different amounts in the Sale Deed vis- -vis Agreement to Sell only to escape the rigors of tax laws and reduce Stamp Duty etc., and then, after the Sale stands concluded, to subsequently very conveniently deny the correctness of the Agreement to Sell 'Ikrarnama'. If the document has been signed and signatures are not denied consequences follow. In case, signatures are denied then forensic examination becomes necessary. Hence in such circumstances the correctness of the 'Ikrarnama' cannot be out rightly discarded and the authenticity of the same, including the signatures of the parties need to be forensically examined and the witnesses to the document also would need to be examined. Parties cannot be allowed to treat the document/agreement entered into between them casually or disown them at their convenience as such actions may invite criminal consequences for the crimes of forgery and perjury. In the facts of the present case, the tax authorities therefore need to ascertain and verify whether the signatures on the Agreement to Sell 'Ikrarnama' has been disowned by the purchaser as a forgery. These are all relevant issues for consideration and the tax authorities cannot evade the responsibility to ensure that only correct and due taxes are collected and no taxpayer lacking in proper legal advice/suffering a handicap on account of proper legal advice is burdened with unfair additions and steam rolled in the haste for collection of taxes. In the facts of the present case, it appears on record that the assessee apparently did not have the benefit of proper advice as perjury and forgery are serious issues which cannot be tolerated and treated lightly by a law abiding economic society. The issue, accordingly, in view of the above detailed reasons is set aside back to the file of the CIT(A) who is directed to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard after making necessary enquiries etc. for arriving at a conclusion.
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2021 (5) TMI 390
Interest income on fixed deposits received - capital receipt OR income from other sources - whether pre commencement of expenses can be set off against interest income? - Additions made by the AO, deleted by the CIT(A) - HELD THAT:- In the initial year, the assessee himself had offered it as income from other sources and in the following year it has reduced from the cost of the project up to the interest received on FDR. It is also not clear from the orders of the authorities below as well as submission of the ld. AR that when the fixed deposits were made and advances were given to Pact Securities and Financial Services Ltd. When the Bench asked a specific question to assessee that what was the description of the fixed deposits and advances and utilization of income received on fixed deposits and advances, the ld. AR was unable to give any explanation to the said question. He did not produce any terms and conditions regarding the advances given. We find substance in the written submissions filed by the Ld. DR. Res-judicata does not apply in the Income-tax Act. Earlier the interest was earned from fixed deposits and in this AY the assessee has given some advances to others also and could not respond to our query during the course of hearing. Exercising the powers u/s 254 of the IT Act and relying on the decision of Bombay High Courts full Bench decision in the case of Ahmedabad Electricity CO. Ltd [ 1992 (4) TMI 29 - BOMBAY HIGH COURT] , we observed that section 254 involving the statutory expression may pass such orders as it thinks fit confers widest possible jurisdiction on the Tribunal. AO and the Sr. DR has discussed this issue and facts of the case in detail and has relied on the decision of the Hon ble Apex court in the case of Tuticorin Alkali [ 1997 (7) TMI 4 - SUPREME COURT] . We support and restore the order of the AO and quash the order passed by the CIT(A). AO has rightly treated the interest received during the construction period from the money parked as fixed deposits and interest on advance as income from other sources and netting off of capital expenditure from the interest has rightly been disallowed. In support of our above decision, we rely on the judgements of ITAT, Delhi Special Bench Third Member case in the case of National Thermal Power Vs. IAC[ 1987 (10) TMI 92 - ITAT DELHI-A] As assessee has relied on number of judgements, which are not applicable to the facts of the case of the assessee. We allow the grounds raised by the revenue.
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2021 (5) TMI 389
Long term capital gain - determination of actual date of purchase of the capital asset - Fair Market Value (FMV) thereof u/s. 48(ii) r.w.s. Expl (iii) r.w.s. 55A - assessee's endeavour herein to claim the fair market value of its capital asset as per her registered valuer s report going by sec. 55A(a), its amendment and therefore, this valuation report to have been adopted @ ₹ 1308 per sq. yard as on 1.4.1981 - HELD THAT:- All the assessee's arguments fail to evoke our concurrence. This is mainly for the reason that there is hardly any time gap worth counting between the date of assessee's purchase deed i.e. 1.9.1980 and the statutory clauses of cost of acquisition i.e. 1.4.1981 respectively. And also that her registered valuer s report dt.30.1.2015 does not even make a mention if at all he had even tried to find any comparable case in the concerned Masab Tank locality. This registered valuer s report deserves rejection only on account of these clinching aspect(s). We rather notice that the DVO s report dt.30.3.2016 has duly considered comparable case(s) resulting in average FMV of ₹ 118.05 per sq. yard only. The assessee's legal as well as technical pleas seeking to claim her FMV as per registered valuer s report go against the comparable cases and stand declined for the very reasons therefore. Legislature has used the clinching statutory expressions fair market value only - We find prima facie force in her stand that the purpose of stamp valuation is to collect revenue only than that of the FMV which is required to compute capital gains arising from transfer of a capital asset. The fact also remains that this issue of FMV of a capital asset w.e.f. 1.4.1981 has witnessed many booms and slumps in the intervening time span of four decades as on date. We keep in mind all these aspects and hold that FMV of the assessee's capital asset @ ₹ 400 per sq. yard by applying thumb rule would be just and proper in the given facts and circumstances with a rider that the same shall not be treated as a precedent. Ordered accordingly. This former issue is partly accepted in above terms. Assessee's claim of her husband to have spent ₹ 1,60,000 (₹ 1,40,000 in A.Y. 1989-90 and ₹ 20,000 in A.Y. 1990-91); respectively and that too, when the Assessing Officer had not made any such disallowance - This is a clear cut instance of enhancement u/s.251(1)of the Act without even issuing notice to this effect. We thus reverse the CIT(A) s impugned action on this count alone.
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2021 (5) TMI 388
Revision u/s 263 - unsecured loans addition - HELD THAT:- As carefully perused the questionnaire issued by the assessing officer dated 31.08.2016 and find that in response to question No.15 of this questionnaire assessee filed details of unsecured loans appearing as on 31.03.2014 along with ledger accounts and in some cases copies of income tax returns of various cash creditors. As examined the documents filed by the assessee in response to point 16 of the questionnaire which contains details of loans and advances given to various parties along with ledger accounts of each of these parties and there income tax return. We have also perused written submission filed before the Ld. AO which contained various details of interest earned on loans and advances, party wise details of interest paid in the required format. Before the Ld. AO assessee had also filed submissions regarding unsecured loan, high interest expenditure, and allowability of interest expenditure. It was also claimed by the assessee that entire unsecured and secured loans taken during the year has only been utilized for the business of assessee. Reliance was also placed on the judgment of Hon'ble Apex Court in the case of S.A. Builders Ltd. [ 2006 (12) TMI 82 - SUPREME COURT] contending that the interest on money borrowed and lent to sister concern without charging interest is allowable on the same test as that for allowance of business expenditure viz for the purpose of business allowable if made as a measure of commercial expediency . DR failed to controvert this fact that all these details were very much available before the assessing officer and submissions were duly made by the assessee supported by settled judicial precedence for the claim of interest expenditure - No new enquiry was conducted by Ld. Pr. CIT, in this regard at its own motion as required in the provisions of section 263 of the Act. Thus, this is a case where complete enquiry was conducted by the assessing officer with application of mind and in our considered view, it is not open for Ld. Pr. CIT to order for a fresh enquiry when adequate enquiry has already been done and one of the plausible view has been taken by the assessing officer as permissible under the law. Pr. CIT erred in assuming jurisdiction u/s 263 of the Act in order to substitute his view with that of the assessing officer. - Decided in favour of assessee.
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2021 (5) TMI 387
Revision u/s 263 - examination of issue related to the Capital gain on sale of plot and deduction as claimed by the assessee u/s 54F - HELD THAT:- While completing the proceedings u/s 263 of the Act Ld. Pr. CIT was satisfied with the assessee s claim of deduction u/s 54F(4) of the Act for the deposit in capital gain account scheme as observed in impugned order, accepting that during current proceedings u/s 263 of the Act assessee had duly furnished copy of the certificate from the concerned bank and sample copy of application for withdrawal all amount from the capital gain account scheme. Since the Ld. Pr. CIT is satisfied this issue does not remains live. Applying of the guideline value on the sale consideration shown by the assessee - We observe that almost total consideration as per the sale agreement was received by the assessee during the F.Y.2011-12 and 2012-13. The final consideration as mentioned in the sale deed dated 26.03.2014 was received by M/s. Daksha Homes Pvt. Ltd. Ongoing through various decisions relied on by the Ld. counsel for the assessee, we find that the assessee had rightly shown the sale consideration at ₹ 97,65,000/- and even this aspect has been thoroughly examined by the assessing officer during the course of assessment proceedings of the assessment order - Therefore, so far as, this issue relating to applying of the guideline rate as on 30.03.2012 or 26.03.2014 is concerned, we find that the issue has been thoroughly examined by the assessing officer and has taken one of the plausible view in the light of the settled judicial proceedings which thus leave no room for the Pr. CIT to assume jurisdiction u/s 263. Deduction u/s 54F(1) for the investment in construction of House - As assessee apart from owning one flat also held another house at AH-28 29 which was a joint property owned by appellant with his wife Smt. Sumitra Borad. There was a house on AS-28 and AH-29 was vacate. That initially the entire payment for construction of the original house was made by the appellant duly shown as the investment in the house in the balance sheet. During financial year 2014-15 relevant to A.Y. 2015-16 against the investment of ₹ 41,56,868/- the appellant received ₹ 16,81,609/- from his wife towards her share. The cost of house was reduced to ₹ 24,76,259/-. The said House situated at AH-28 is claimed to be demolished by assessee A.Y.2014-15 and construction of new house started on both plots of land i.e. AH-28 AH-29 for which necessary permission was taken from Municipal corporation. As during the course of assessment proceedings a detailed query letter was issued to the assessee to file various details and in reply to which submissions were filed which also included the details for claim of investment in residential house u/s 54F(1) It is a settled position of law that powers u/s 263 of the Act can be exercised by the Pr. Commissioner/Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and prejudicial to the interest of the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Pr. CIT was not justified in imposing his view upon the assessing officer on wrong appreciation of facts and not considering the fact that issues raised in the show cause notice u/s 263 of the Act were thoroughly examined by Ld. AO and has duly applied his mind taking one of the permissible view under the law. - Decided in favour of assessee.
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2021 (5) TMI 386
Penalty proceedings u/s. 271(1)(c) - Addition on account of interest income from FDRS, on RGCTP and JNNURM projects - As submitted that since the Tribunal has set aside the order passed by the Ld. Pr. CIT passed u/s. 263 of the Act affirming the action of the AO in dropping the penalty proceedings u/s. 271(1)(c) of the Act, the present appeal filed by the Revenue has become infructuous - HELD THAT:- As perused the order dated [ 2019 (5) TMI 1868 - ITAT CHANDIGARH] passed by the Co-ordinate Bench of the Tribunal, whereby the Coordinate Bench has set aside the order passed by the Pr. CIT u/s. 263 of the Act and affirmed the action of the AO in dropping penalty proceedings against the assessee. As pointed out by assessee, since the Tribunal has set aside the order passed u/s. 263 of the Act, directing the AO to initiate penalty proceedings, the order passed by the AO has become void ab initio. Hence, in view of the submissions made by the Ld. Counsel for the assessee in the light of the facts and the circumstances of the case, we dismiss the present appeal holding that the same has become infructuous.
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2021 (5) TMI 385
Reopening of assessment u/s 147 - as argued AO has wrongly assumed jurisdiction under Section 148 of the Act and grossly erred in re-opening assessment which is in violation of mandatory jurisdiction conditions stipulated under the Act - HELD THAT:- As decided in M/S. SUPERSONIC TECHNOLOGIES PVT. LTD. [ 2018 (12) TMI 912 - ITAT DELHI] Tribunal was of the considered view that the re-assessment proceeding was on the basis of non-application of mind on the part of the Assessing Officer and since the re-opening of the assessment was not accepted by the Tribunal, order framed under Section 263 of the Act was quashed. Since the present assessment order is framed on the very same reasons, which were considered by the Tribunal (supra) while quashing the order, once the reasons have not been accepted by the Tribunal, the same cannot be held to be good for the present assessment. Respectfully following the order of the Tribunal (supra) the re-opening of the assessment is held to be invalid and unlawful and accordingly, quash the assessment order. - Decided in favour of assessee.
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2021 (5) TMI 384
Gain on sale of asset - capital gain or business income - assessee-company is engaged into redevelopment of property in co ownership with two other parties - CIT(A) was of the same opinion as that of the Assessing Officer that the said property was held by the assessee as business asset and not as a capital asset - CIT(A) was of the opinion that percentage completion method has been adopted by the Assessing Officer, which is well recognised method AND rejected the assessee s claim for deduction by way of recoupment from other co-owners by holding that it was not substantiated - HELD THAT:- We note that as regards the claim of the assessee that it is not a business venture but a capital asset of the assessee, the same is not based upon convincing material. The assessee s claim is that since inception the assessee has debited all cost of the project as investment and the Revenue has always accepted the same. We find that on the facts and circumstances narrated above the assessee s plea that it is a capital asset and not a business venture has been rightly rejected by the authorities below. The detail of different agreement referred by the authorities below in their orders referred above duly corroborate this aspect. Computation of gain - whether the Revenue can thrust upon the assessee s percentage completion method of accounting that also for the first time? - HELD THAT:- We note that it is undisputed fact that since inception the assessee has capitalised cost of redevelopment - We note that completed contract method and percentage complete method in the extant period were duly recognised method of accounting for construction project. In this regard we may gainfully refer to the decision of Hon'ble Supreme Court exposition in the case of CIT Vs. M/s. Bilahari Investment (P) Ltd. [ 2008 (2) TMI 23 - SUPREME COURT] wherein held percentage completion method and competed contract method are both recognised method of construction project. Also see HYUNDAI HEAVY INDUSTRIES COMPANY LIMITED [ 2007 (5) TMI 196 - SUPREME COURT] . Percentage complete method and completed contract method were both acceptable method and accounting of construction contract in the impugned period. We note that the assessee has all along treated the said project as capitalised item and debited all the expenses to the capital account. This method has been accepted by the Revenue in the past. It is also undisputed that in the current year project is not at all complete. Redevelopment is still in progress. The assessee has also to recoup expenditure from other co-owners. Agreement to sale has not been registered, possession of the property has not been handed over. In these circumstances, assessee cannot be thrust upon percentage of completion method of accounting by the Assessing Officer. Hence, though we do not agree with the assessee that it is not a business project, we agree that the project is incomplete and in substance if assessee wishes to offer for taxation its gain on completion of project i.e. apply completed contract method the same cannot be rejected. This proposition is duly supported by Hon'ble Supreme Court exposition as above. Also percentage completion method has been made compulsory by subsequent insertion of section 43CB of the Act, which is not applicable to the impugned assessment year. This issue is revenue neutral. As and when the contract/project is complete, the gain would be exigible to tax. Thus the effect is only revenue neutral as revenue shall collect necessary taxation when the project is complete. In such circumstances also Hon'ble Supreme Court decision in the case of Union of India Ors v Exide Industries Anr [ 2020 (4) TMI 792 - SUPREME COURT] is in favour of the assessee. Revenue was not justified in applying percentage completion method and computing gains in the current assessment year.
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2021 (5) TMI 382
TP Adjustment - determination of Most Appropriate Method (MAM) for the transfer pricing adjustment of the transactions - benchmarking the international transactions with regard to the AMP expenses, the assessee has opted for Resale Price Method (RPM) whereas the revenue has resorted to Transactional Net Margin Method (TNMM) as the Most Appropriate Method (MAM) - HELD THAT:- This issue has already been covered by the order of the ITAT in assessee's own case for the earlier assessment year 2013-14[ 2017 (5) TMI 1367 - ITAT DELHI ] wherein it was held that RPM was MAM for benchmarking. Since, the matter stands covered in favour of the assessed for the earlier years and in the absence of any material change in the facts of the case brought to our notice, we hereby direct that the adjustment be determined considering as RPM as MAM. Adjustment on protective basis following the BLT method - HELD THAT:- This issue has been squarely covered by the order of the Co-ordinate Bench In the case of M/s. Toshiba India Pvt. Ltd. [ 2017 (12) TMI 125 - ITAT DELHI ] wherein held that the BLT for computing Arm s Length Price of AMP transaction has already been rejected by the Hon ble Delhi High Court in the case of Sony Ericsson [2015 (3) TMI 580 - DELHI HIGH COURT ] and thus adjustment even protective basis cannot be sustained. The decision of the Hon ble Jurisdictional High Court is a binding precedent and the lower authorities cannot disregard it merely because the Revenue has challenged it before the Hon ble Supreme Court. Thus, respectfully following the above decision of the Tribunal, we direct the Ld. AO/TPO to delete the protective addition. Accordingly, we allow the relevant grounds of the appeal of the assessee.
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2021 (5) TMI 381
Exemption u/s. 11 12 - commercialization of education - paying huge commission to middle men to bring students to assessee s institution - next contention is that there was huge surplus earned by assessee which shows that assessee is involved in business activities and hence exemption u/s. 11 should be denied to the assessee - HELD THAT:- Assessee is an education institution and there is no denial by the department that assessee has carried out education activities as predominant activity and in the course of carrying out predominant object of imparting education, the assessee incidentally earned surplus. The reasons as to why the Assessing Officer has concluded that there is commercialization of education is the ground that the assessee is having agents and it is paying commission to them. It is erroneous to state that the assessee has appointed brokers / agents. The assessee is running several educational courses. As the assessee is having admission from all over the country, it is essential to have the services of public relation persons to make people all over, aware of the institution and the courses being offered. These public relation persons familiarize the society at large about the institutions and various educational facilities available and these people are paid certain nominal amounts for the services rendered by them. It is not a case of broker and commission payment but payment for liasoning which is very much essential in these days and especially considering the number of educational institutions available and also the vast area from where the students come from. This cannot be a reason to conclude that the assessee is carrying on a commercial venture. Being so, there was no addition in this regard in these assessment years under consideration. There is no question of denial of exemption u/s. 11. Therefore, the ground raised by the revenue with regard to granting exemption u/s. 11 12 though assessee has paid huge commission to agent/middle men to bring students to the institution is misconceived. Assessee earned surplus in carrying out educational activities - As rightly pointed out by the ld. AR, as held in Queens Education Society [ 2015 (3) TMI 619 - SUPREME COURT] a distinction must be drawn between the making of a surplus and an institution being carried on for profit . No inference arises that merely because imparting education results in making a profit, it becomes an activity for profit. If after meeting expenditure, a surplus arises incidentally from the activity carried on by the educational institution, it will not cease to be one existing solely for educational purposes. The ultimate test is whether on an overall view of the matter in the concerned assessment year the object is to make profit as opposed to imparting education. As noted earlier, the assessee is running 9 institutions and having large number of students and the income expenditure of assessee in these assessment years. Thus, it shows that the surplus earned by the assessee in these assessment years is incidental while carrying out the main objects of the assessee trust. Further, it is noted that surplus generated has been ploughed back for educational purposes only. The dominant objective is to impart education and not to make profits. The surplus arising is incidental. The excess of income by itself does not lead to an inference of profit motive. The entire surplus of the society is redeployed for the objects of the Trust. The objects of the assessee are not doubted and when the objects are genuine, the surplus cannot be treated as a sin. Profitable activity does not necessarily mean that there is a profit motive. It is incorrect to state that the assessee is not existing for educational purposes but is existing for profit. Being so, the assessee being education institution is to be considered to be existing solely for education purposes only. There is no ground with regard to denial of exemption u/s. 11 on account of collection of capitation fees. Being so, the reliance placed by the ld. DR is totally misconceived. Therefore the relevant ground by the revenue is dismissed.
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2021 (5) TMI 380
Addition u/s 14A r.w.r. 8D - HELD THAT:- The assessee's plea of investment being strategic in nature is no more sustainable in view of honourable Supreme Court decision in the case of Maxopp Investment Ltd [ 2018 (3) TMI 805 - SUPREME COURT] . Hence, this ground is dismissed. The assessee's plea that when interest free funds are available, which are more than the impugned investment then no disallowance under section 8D(ii) of the Act is permissible is sustainable on the touchstone of honourable jurisdictional High Court decision in the case of HDFC Bank Ltd.[ 2014 (8) TMI 119 - BOMBAY HIGH COURT] and Reliance Capital Asset Management Ltd. [ 2017 (10) TMI 177 - BOMBAY HIGH COURT] . Hence this ground is allowed. Disallowance under section 8D(iii) only those investments are to be considered which have earned exempt income on the touchstone of ITAT special men decision in the case of Vireet Investment P. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] Disallowance under section 115JB by importing the provisions of section 14A the same is not sustainable on the touchstone of ITAT Special Bench decision in the case of Vireet Investment (P.) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI]
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2021 (5) TMI 379
Penalty levied u/s. 271C - amount of tax allegedly not deducted by assessee - proceedings under section 201(1) - assessee submitted that, as on 31/03/2011, assessee was not in a position to quantify the sums payable to the parties and hence no tax was deducted at source - assessee voluntarily disallowed the said sum u/s 40(a)(ia) of the Act, on account of non-deduction of TDS and that the provision created was not credited to any parties or individuals account, since quantum of payment to the parties was not determinable as on the year-end - HELD THAT:- Liability to levy penalty can be fastened only where the person/assessee do not have good/ sufficient reason for not deducting tax at source. In the present facts of the case, the provision created at the end of the accounting year has not been credited to the relevant parties to whom the payments has to be made for the reason that it was unquantifiable. Further, assessee has suo moto disallowed the said sum under section 40(a)(ia) for non-deduction of TDS. Therefore there is a sufficient and reasonable cause for not deducting TDS on the year-end provision. It is also observed that assessee consistently follows this kind of accounting system for year-end provisions which is subsequently reversed in the subsequent year in the month of April, as and when the bills are received, and the payment is made to the payee by deducting TDS. Further, admittedly, assessee has paid interest under section 201(1A) which further demonstrates there was no malafide intention. We also note that under similar circumstances in assessee s own case reported in own case [ 2005 (1) TMI 609 - ITAT BANGALORE ] coordinate bench of this Tribunal on similar facts deleted penalty as it was unsustainable. Further the decisions relied by the Ld.Sr.DR are distinguishable on facts, and therefore not applicable to the present facts of the case. Based on the above observations we do not find any infirmity in the view taken by the Ld.CIT(A) to delete the penalty levied under section 271C read with 273B of the Act due to existence of reasonable cause for non-deduction of TDS, and therefore, assessee cannot be held to be assessee in default . - Decided against revenue.
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2021 (5) TMI 378
LTCG - gains on sale of transferable development rights (TDR s) - HELD THAT:- We note that in the transaction between assessee and the buyer for sale of TDR, an amount has been paid to the alleged confirming party. Neither assessee is unable to explain the reason why the amount was payable to the confirming party, nor is there is any evidence that is brought on record as to why it necessary for the confirming party to be the part of the agreement. AO issued notice under section 133 (6) to the buyer of TDR, no response was received. However, merely because the buyer did not respond to the queries raised by the Ld.AO and it cannot be a reason to assume that the said amount is income in the hands of assessee. We are therefore remanding this issue back to the Ld.AO. AO shall carry out all necessary investigation as under - AO shall call upon the alleged confirming party and record statements. Needless to say that assessee shall be granted any opportunity of cross-examining the alleged confirming party. AO shall call upon the buyer to seek information in respect of the transaction and to verify the details in accordance with law. Any other enquiries /investigations, deem fit and proper. Based upon the above the Ld.AO shall consider the issue in accordance with law. Needless to say that proper opportunity of being heard shall be granted to the parties concerned in order to assay ascertained the true nature of the said transaction. We may caution the Ld.AO that income has to be taxed in the hands of the person to whom it belongs. Merely on surmises and conjunctures the sale amount cannot be taxed in the hands of any assessee. With the above direction we remand this issue to the Ld.AO to carry out de novo assessment, and to pass detailed order in accordance with law. Grounds raised by assessee stands allowed for statistical purposes.
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2021 (5) TMI 377
Penalty levied under 271(1) - Estimation of income on bogus purchases - HELD THAT:- Disallowance has been made on an estimated basis on account of the non-production of suppliers before the assessing officer. The purchase vouchers were duly produced. No notice to the alleged bogus supplier has been issued by the AO. In these backgrounds in our considered opinion assessee cannot be visited with the rigours of penalty under section 271(1)(c) of the Act. As a matter of fact on many occasions on similar circumstances in quantum proceedings the disallowance itself has been deleted, on the touchstone of case of Nikunj Eximp Enterprises Pvt. Ltd. [ 2013 (1) TMI 88 - BOMBAY HIGH COURT] - assessee cannot be said to have been guilty of concealment or furnishing of inaccurate particulars of income. In this regard we draw support from the decision of Hindustan Steel Ltd. Vs. State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] where in it was held that the authority may not levy the penalty if the conduct of the assessee is not found to be contumacious. We set aside the order's of Ld. CIT-A and delete the levy of penalty. - Decided in favour of assessee.
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2021 (5) TMI 376
Condonation of delay - Penalty u/s 271(1)(c) - assessee's claim for deduction under Sec. 80P(2)(d) of the interest income received denied - HELD THAT:- On a perusal of the records, we find that the assessee society had candidly admitted that the delay in filing of the appeal had arisen because of their bonafide belief that as the quantum assessment was challenged before the CIT(A), thus, the penalty order passed by the A.O u/s 271(1)(c) would therein get merged and no separate appeal was required to be filed. Fact that the assessee had filed its appeal against the quantum assessment order passed by the A.O under Sec. 143(3), dated 02.12.2016 with the CIT(A) well within the prescribed time therein clearly rules out any lackadaisical approach on its part in dealing with its income-tax matters. Rather, there could also be no malafide reason on the part of the assessee in adopting any delaying tactics in filing of the appeal against the order passed by the A.O under Sec. 271(1)(c) As deposed by Shri. Sanjay D. Salvi, Chairman of the assessee society, after learning about the requirement of filing a separate appeal against the penalty order passed by the A.O under Sec. 271(1)(c) the assessee had deposited the requisite appeal fees on 22.08.2017. However, as the appeal was to be electronically filed and digital signatures of the assessee were required, therefore, some time would have been exhausted in doing the needful on the part of the assessee as well as its chartered accountant. We are unable to persuade ourselves to subscribe to the declining on the part of the CIT(A) to condone the delay involved in filing of the present appeal. Apart from that, as the assessee's claim for deduction under Sec. 80P(2)(d) of the interest income received by it from M/s. Saraswat Cooperative Bank Ltd. had been allowed by the CIT(A), thus, the very addition as regards which the impugned penalty under Sec. 271(1)(c) was imposed on the assessee does no more survive. - Decided in favour of assessee.
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2021 (5) TMI 375
Bogus purchases - AO has restricted the disallowance to the profit element embedded in such purchases by estimating the same at 12.5% - HELD THAT:- Considering the fact that the assessee is a trader in ferrous and non ferrous metals, wherein, the profit margin normally expected to be earned varies between 2% to 5%, we are of the view that disallowance @5% of the alleged non genuine purchases would take care of suppression of profit, if any, on account of alleged non genuine purchases. Accordingly, we direct the assessing officer to restrict the disallowance to 5% of the alleged non genuine purchases in both the assessment years under appeal.
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2021 (5) TMI 374
Disallowance of assessee s claim made u/s. 54/54F - Long term capital gains earned by the assessee was invested in purchase of two houses/flats instead of one residential unit - HELD THAT:- It is not in dispute that the amendment in section 54 was made w.e.f. 01.04.2015, which does not fall within the assessment year under consideration. There is nothing on record from the side of Revenue to justify that the said amendment was made applicable with retrospective effect. In such circumstances. As regards the disallowance on the premise of investment in two residential flats, we find that in the case of V.R. Karpaam (Smt.) [ 2013 (8) TMI 477 - ITAT CHENNAI] Tribunal held that a residential house in the context could not be construed as a singular and the meaning given in section 54 would apply to section 54F also. New asset defined in section 54F as a residential house has to be understood in plural. It is not necessary that all residential units should be single door number allotted. Tribunal, following the ratio in CIT v. K.G. Rukminiamma [ 2010 (8) TMI 482 - KARNATAKA HIGH COURT] , allowed the claim of assessee - no justification to discard the claim made by the assessee u/s. 54 of the Act in the present case. We are, therefore, not inclined to sustain the impugned order. - Decided in favour of assessee.
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Customs
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2021 (5) TMI 405
Discharge of the accused under the prevention of corruption of act - officers of Central Excise Department - allegation of fraudulent availing the benefit of DEPB (Duty Entitlement Pass Book) Scheme - mis-declaration of export goods - pieces of cloths irregular in shape declared as ladies nightwear - criminal misconduct - offence under Section 13(1)(d) of Prevention of Corruption Act, 1988 - HELD THAT:- In the case in hand, in the adjudication proceedings, it is not proved that the Accused were in any way guilty of the act of omission/dereliction of duty or acting in an illegal manner. Consequently, the Accused nos. 1 and 2 were exonerated on the same set of allegations as has been made in the present case in the adjudication proceedings that too by an order of Appellate Tribunal. In that view of the matter, the determination in the adjudication proceedings are very much relevant and germane in the matter of prosecution of the Accused nos.1 and 2 on the same set of material in the criminal trial. What can be noticed from the observations made by the Commissioner and thereafter the Appellate Tribunal is the Accused nos. 1 and 2 were exonerated in the adjudication proceedings on merits as the allegations against them of dereliction of duty or acting in an illegal manner were not established. It could be noticed that once the contravention of the provisions of the act by the Accused nos. 1 and 2 in the adjudication proceedings was not established, it has to be inferred that the prosecution of the Accused nos.1 and 2 under the provisions of the Prevention of Corruption Act particularly having regard to the non-satisfaction of necessary ingredients of Section 13(1)(d) of the Act cannot be held to be satisfied. The claim of the Applicant that there is a miscarriage of justice and as the offence under the Prevention of Corruption Act and the adjudication by the competent authority are parallel and cannot go hand in hand, is liable to be rejected - Once the order passed in the adjudication proceedings is not questioned by the Applicants, the Applicants are bound by the same and, that being so, it is not open for the Applicants to open the question for illegality of the orders passed in the adjudication proceedings. No case of exercise of excessive jurisdiction could be made out - Application dismissed.
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Corporate Laws
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2021 (5) TMI 410
Restoration of name of the Company in the Register of Companies maintained by the Respondent - Company has failed to file its Financial Statements and Annual Returns for six Financial Years from 2013-2014 to 2018-2019 - Section 252(1) of the Companies Act, 2013 - HELD THAT:- The Appellant Company has been active since its incorporation and maintains all the requisite papers. However due to the old age of the Directors, they could not manage the day to day affairs of the Company and gradually the Company was shrunk. The Appellant Company did not receive any show cause notice from the Respondent nor any opportunity of being heard was given. With regard to the submissions of the Appellant that the Respondent failed to send the notices, did not give a fair chance to make representations, did not give any opportunity of being heard, we find that the Respondent issued Notice in Form STK-1 and STK-5 dated 19.07.2018. The name of the Company was also published on the website of Ministry on 19.07.2018 as well as in leading newspapers Times of India and Maharashtra Times on 21.07.2018 and in the Official Gazette on 04.08.2018. Finally, the dissolution order was also published on the website of the Ministry vide STK-7 on 12.09.2018. The contentions of the Appellant are thus frivolous and cannot be accepted - Further it is observed that despite the Company being active Appellant it does not have a Bank Account. This prima facie indicates that the Company was not carrying on any commercial activity. However, the Appellant submitted that after complying with all the pending statutory filings, the Company would seek voluntary striking off. Thus, in the interest of justice the name of the Company may be restored in the Register of Companies maintained by the Respondent to accord it an opportunity to complete all pending filings - application allowed.
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2021 (5) TMI 396
Oppression and mismanagement - one director of the company, was intentionally not invited for the board meeting of 20.12.2020 - the three directors passed resolutions to increase their salary without the knowledge of director who was not invited in the meeting - financial statements were signed without obtaining the approval of the board members at a duly convened meeting - AGM conducted by the three directors without the knowledge of Mr. Rahul Modi and without sending any notice to the Mohan Goenka group. HELD THAT:- There is broad admission that the company is a family-owned company. The board representation was 3:1 in favour of the petitioners. The act of Mr. Rahul Modi, the representative of the respondent group, on the board for a single board meeting is the prime cause of the respondents putting motion the legal process for removal of the three directors of the petitioners group. There is no allegation of any financial misdemeanour in the form of siphoning off funds or business of the Respondent No. 1 Company in the requisition for removal of the existing directors representing the petitioners group. There are no merit in the contention of Mr. Joy Saha, learned Senior Counsel for the petitioners, that there must be good reason to overturn an arrangement which appears to have worked satisfactorily for about twenty-one years. The primary reason given - though not the only reason - is the alleged omission to invite the sole representative of the respondent group for one solitary meeting of the board. This is not enough. The complete exclusion of the petitioner group from the board cannot be justified merely by pointing out that the meeting is a validly convened meeting, that the resolutions were duly approved and therefore the court should not intervene. There is no gainsaying that the principles of equity have been greatly disturbed by the act of the respondent group in removing all the three directors of the petitioner group and assuming 100% control of the board. The petitioners have made out a prima facie case for grant of the interim reliefs. List the main CP for hearing on 20.07.2021 for further consideration.
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Insolvency & Bankruptcy
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2021 (5) TMI 412
Maintainability of application - time limitation - case of respondent is that the claim of the Applicant from November 2013 is categorically barred by limitation since there was no communication from the Applicant as per the own admission after 21.09.2016 and the CIRP in respect of the Corporate Debtor was initiated on 05.05.2020 - HELD THAT:- The Applicant has not placed on record any document after 21.09.2016, in order to show that the claim of the Applicant falls within the period of Limitation. It is seen that the CIRP in relation to the Corporate Debtor was initiated on 05.05.2020 and the claim of the Applicant relates to the year 2014. By taking into consideration the provisions of Section 238A of IBC, 2016 is hopelessly barred by limitation as rightly pointed out by Learned Counsel for Respondent and also Learned Counsel for Applicant has not placed on record any document to show that he has obtained any acknowledgment after the year 2016. The Applicant, in the present case, would not be in a position to approach the Civil Court by way of a suit for recovery of money, as the claim amount admittedly falls beyond the prescribed period of limitation and thereby by filing the present Application under Section 60(5) of IBC, 2016, cannot seek to enforce a claim, which is time barred as per the provisions of the Limitation Act, 1963 on the date of initiation of the CIRP itself. Hence, also on the said count, the Application as filed by the Applicant is liable to be dismissed. It is also relevant to refer to the decision of the Hon'ble Supreme Court of India, in the matter of B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [ 2018 (10) TMI 777 - SUPREME COURT] wherein it has held that Limitation Act is applicable since the inception of the Code while posing itself with a query as to whether the Limitation Act, 1963 will apply to Applications that are made under Section 7 and or Section 9 of the Code on and from its commencement on 01.12.2016 to 06.06.2018 (date of amendment of insertion of Section 238-A coming into effect). It was clearly held that the Code could not have been to give a new lease of life to debts which are time barred and have thereby gone to give a finding by taking into consideration the above noted Report that the Limitation Act is applicable from the inception of the Code. The Respondent has rightly rejected the claim made by the Applicant in this regard and as such we are of the view that the rejection order passed by the Respondent does not warrant any interference - Application dismissed.
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2021 (5) TMI 404
Validity of unilateral changes made to the Resolution Plan - implementation of Resolution Plan - HELD THAT:- The conclusions arrived in the Joint Lenders Meeting held on 19th and 27th of March, 2020, have not been taken to the logical end by the respondent Banks either in the form of an agreement/contract and it would mean that there is no contractual obligation between the petitioner and the respondents for enforcement of the conclusions arrived in the Joint Lenders Meeting held on 19th and 27th of March, 2020. If those conclusions are to be acted upon, more money has to be pumped in pursuant to the conclusions and this Court cannot give any mandamus to pump in money to revive the petitioner Company, more so when there is no agreement or contract entered in pursuance of the conclusions which were arrived in the Joint Lenders Meeting held on 19th and 27th of March, 2020. It is for the respondent Banks to take a decision as to whether the petitioner Company should be revived and whether additional money has to be pumped in by them, but this Court cannot give a direction to take forward the conclusions arrived in the Joint Lenders Meeting held on 19th and 27th of March, 2020, to the logical end. This Court is not inclined to interfere with the impugned letter and the writ petition is liable to be dismissed - Petition dismissed.
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2021 (5) TMI 397
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors or not - Existence of debt and dispute or not - HELD THAT:- The Bench notes that the Petitioner has to disclose the type and details of the goods for which a debt has arisen and which is being claimed by the Petitioner. Since the Petitioner had not furnished any details for the provision of goods, this bench while hearing the mater on 27.02.2020, gave one last chance to the Petitioner to submit on affidavit enclosing all the invoices and proof of delivery of the material to the Respondent corresponding to the amount of debt which has been claimed in the Petition. This Bench concludes that there is nothing on record which shows that any outstanding Operational Debt as a claim in respect of provision supply of goods or services by way of invoices or any documents has been proved by the Petitioner. In fact, all the 37 invoices which have been put on record by the Petitioner as due from the respondent has been fully paid and are not outstanding. The additional claim amount raised by way of other charges is frivolous, unsubstantiated, not based on any documentary proof and not even any invoices to that effect has been raised from the Petitioner. Further any claim arising out of Journal entries are unilateral adjustment claims and by no stretch of imagination can be said to be a claim arising out of supply of goods and services. The contention of the Respondent that it had issued those two cheques of about ₹ 4.16 crores and about ₹ 7.76 lakhs was only as security keeping in mind the business relationship between the parties, appears to be tenable. In any case, the dishonor of the cheques is a subject matter of Negotiable Instruments Act, 1881 and only proves that the Respondent is not interested in paying any security deposit to the Petitioner. The Bench is of the view that it does not relate to any outstanding amount due from the Respondent by way of any operational debt. Petition dismissed.
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2021 (5) TMI 395
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- Though there is no specific date of default mentioned but considering the various work orders and invoices against which the payment is due the date of default is varying from December 2017 to Feb 2019 and the present application is filed on 08.08.2019. Hence the application is not time barred and filed within the period of limitation - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The present application is filed on the Performa prescribed under Rule 6 of the Insolvency and Bankruptcy Code, 2016 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 r/w Section 9 of the code and is complete. There exists an operational debt which is due and payable by the corporate debtor. Further with respect to the maintainability of an application, withregards the issue that whether for various claims arising out of separate work orders, single application can be filed by operational creditor - Once the work is complete and final bill is raised, the retention money becomes due and payable. The corporate debtor vide email communication and in its reply to this application had categorically admitted that a sum of ₹ 8,40,000/- is outstanding due and payable to the applicant towards work order ICC-Patna. Though, the corporate debtor has raised dispute prior to issue of the Demand Notice with regards tonon-completion of work on time, defective work and invoices raised, but has itself admitted that retention money is payable - Also, the amount of a debt more than 1 Lakh, which in this case s admitted by the corporate debtor, and the said has become due as per their own statement in their email dated 08.10.2018, leaving no scope for any further adjudication. The application is admitted - moratorium declared.
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2021 (5) TMI 393
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- Perusal of the documents reveal that the petitioner/operational creditor has sent the notice under Section 8 of IBC 2016 which was served on the corporate debtor on 28.09.2019. However, the Whatsapp chats and emails exchanged between the petitioner and the respondent between 23.02.2019 and 19.09.2019 clearly reveal that there is a dispute between the parties on the rat of CFT charged by the petitioner as well as matters relating to excess billing on the part of the petitioner/operational creditor. Further the respondent/corporate debtor vide email dated 16.09.2019 and 18.09.2019 intimated the petitioner/operational creditor about the debit notes of an amount of ₹ 1,01,23,915/- - All these clearly indicate the existence of dispute between the parties prior to the issue of notice under Section 8 of IBC 2016 by the petitioner/operational creditor. In the above circumstances this petition fails and this Tribunal dismisses the petition. Petition dismissed.
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2021 (5) TMI 392
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- In order to allow any application under Section 7 of the Code, the applicant has to proof that the application is maintainable as the applicant is a 'financial creditor', and the debts claimed in the application come within the purview of financial debt as defined under the Code - If the above principle is applied to the case in hand it is clear that in terms of Section 5(8)(f) of the IBC i.e. definition of financial debt, there exist a default on the part of the Corporate Debtor towards the 'Real Estate Allottee and therefore the Applicants herein are the Financial Creditors, and have complied with all requirements under the Insolvency and Bankruptcy Code for filling the present application. It is evident from the record that the application has been filed on the proforma prescribed under Rule 4(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of the Code. It is satisfied that a default amounting to lacs of rupees has occurred within the meaning of Section 4 of the Code and the application under sub-section 2 of Section 7 is complete; and no disciplinary proceedings are pending against the proposed Interim Resolution Professional. Thus, the application warrant admission as it is complete in all respects. Petition admitted - moratorium declared.
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2021 (5) TMI 391
Maintainability of application - initiation of CIRP - Corporate Debtor faield to make repayment of its dues - Operational Creditors or not - existence of debt and dispute or not - service of notice - time Limitation - HELD THAT:- In the present case, since the section 8 notice was duly delivered through speed post at the same address with the report item delivered and thereafter the service of section 9 is returned with a remark Addressee left without instructions. Hence it can be inferred that the service of section 9 is complete. Moreover, the email service is complete. As per Form V, Part IV, the Corporate Debtor is liable to pay an outstanding sum of ₹ 7,82,142/- along with further interest @18% per annum with effect from 10.08.2016 of which the default has occurred on 10.08.2016 - Applicant has filed an affidavit under section 9(3)(b) dated 11.01.2019 affirming that no notice of dispute has been given by the Corporate debtor relating to dispute of the unpaid operational debt - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. The date of default as per Form V occurred on 10.08.2016, and the present application was filed on 01.02.2019, hence the debt is not time barred and the application is filed within the period of limitation - the present application is complete and the Applicant is entitled to claim its dues, which remain uncontroverted by the Corporate Debtor, establishing the default in payment of the operational debt beyond doubt. The application is admitted - moratorium declared.
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Service Tax
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2021 (5) TMI 401
Rejection of application under SVLDRS - Rectification of mistake - Sabka Vishwas (Legacy Dispute Resolution) Scheme SVLDRS, 2019 - As returns filed for the period December, 2015 to June, 2017 contained a short fall in remittance of tax, as a result that the petitioner decided to take advantage of (Scheme), which extended benefits to an errant tax payer, in the settlement of tax, interest and penalty dues under various indirect tax enactments - issue raised on merits is that no opportunity of hearing has been granted to the petitioner prior to the impugned rectification - as per defence reading of Section 127(2) with Section 128 reveals that a notice is called for only in those cases where the estimate arrived at by the Designated Committee exceeds the estimate arrived at by the declarant and in the present case, the impugned notices only constitute rectification of apparent errors for which no notices is required. HELD THAT:- According to the petitioner, the application would have to quantify the tax payable month wise, since the half yearly returns filed take into account the tax payable, per month. This argument has however to be rejected in the light of Section124(1)(c)(iii) as per which computation of tax due is based upon the return filed under the respective indirect tax enactment. The Finance Act, 1994, in terms of which service tax is levied, provides for a half yearly return. The tax dues would thus be as per Section 124(1)(c)(A) and not 124(1)(c)(B) as computed by the petitioner. Section 128 grants power to the Designated Committee to correct an arithmetical or clerical error apparent on the face of record, either suo moto or upon such error being pointed out by the declarant. The impugned rectifications do not fall within the ambit of an arithmetic or clerical error and enhance the quantification of tax dues under Section 127. Hence, a notice ought to have been issued to the petitioner in this matter, prior to revising the SVLDRS. The legal argument of the petitioner is accepted. A conscious of the position that a rectification can be effected only by the Designated Committee and would normally not have undertaken this exercise. Detailed submissions have been heard by me on the nature of the dispute and the difference in computation and I believe that it would not be appropriate that I remand these matters on the technical issue of lack of opportunity. The stand of the petitioner has, as noticed by me at paragraph 9 above, no legal sanction and the interpretation put forth does not merit acceptance.No justification to relegate the petitioner to the authority, particularly seeing as this litigation pertains to an amnesty scheme where proceedings should, as far as possible, be fast tracked and not delayed. These writ petitions are dismissed. Liberty is granted to the petitioner to approach the authorities seeking some more time to remit the dues contemplated under the revised SVLDRS. Such representation, if made, within a period of two (2) weeks from date of receipt of order, shall be disposed after hearing the petitioner, within a period of four (4) weeks from date of receipt of the application.
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Central Excise
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2021 (5) TMI 415
Clandestine removal - whether the demand is based on assumptions and presumptions without any positive evidence? - penalty - HELD THAT:- There are no observation to justify upholding the duty demand, as has been claimed to have made by the learned Commissioner. Since a detailed observation has been made in the impugned order to hold that the charge of clandestine manufacture and clearance is not supported by any positive evidence and is merely based on assumption and presumption, which has not been rebutted, there are no reason to uphold the duty demand. Appeal allowed - decided in favor of appellant.
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2021 (5) TMI 383
Grant of interest on delayed refund - appeal dismissed as being time barred - HELD THAT:- Considering the fact that the claim of interest was not whispered in the order dt. 11.04.2018 of the adjudicating authority, against which the appellant moved an application for payment of interest on 07.05.2019 and it was answered on 29.08.2019; therefore, the intimation/letter dated 29.08.2019 is an appealable order before the ld. Commissioner (Appeals). Against the said order, the appellant has filed an appeal before the ld. Commissioner (Appeals) on 31.10.2019 which is well within the time limit prescribed under the Act. The appeal filed by the appellant before the ld. Commissioner (Appeals) is in time. Therefore, the impugned order qua holding that the appeal is time barred is set aside - Matter remanded back to the ld. Commissioner (Appeals) to decide the issue on merit following judicial pronouncements on the issue - appeal allowed by way of remand.
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Indian Laws
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2021 (5) TMI 403
Dishonor of Cheque - initiation of Criminal Case - Whether a criminal case initiated under Section 138 of Negotiable Instrument Act, after ending in conviction and reach its logical end, shall it be reopened and compounded under Section 147 of Negotiable Instrument Act by invoking Section 482 of Cr.P.C., overriding the embargo under Section 362 of Cr.P.C.? - Compounding of Offences - HELD THAT:- A reading of Sections 4 and 5 of Cr.P.C. clearly shows that enquiry, investigation and trial of the offence(s), whether under the Indian Penal Code or any other Special Act, the procedure(s) under the Cr.P.C. have to be followed, unless Special Act provides the procedure(s) to be followed thereof. In this case, for trial of the offence under Section 138 of the Negotiable Instruments Act, except certain specific deviations made under Sections 140, 142 and 143 of the Negotiable Instruments Act, the provisions under the Cr.P.C. have to be followed. The complaint, appeal and revision petitions are to be filed under the provisions of the Cr.P.C. Sub-section (9) of Section 320 Cr.P.C. provides a specific bar for compounding an offence, except where it is otherwise provided. Further, under Section 320 (5), (6), (7) and (9) of Cr.P.C., there is an embargo for compounding an offence once there is conviction. This is the view of the Supreme Court as well. The substantive law settled in the context of the offences under the IPC, is applicable to the offences triable under the N.I. Act and other special Legislations.Compounding of offences is permissible even at all appellate stages with permission or during the pendency of the revision under Section 401 of the Act. Therefore, not only the offences under the provisions of the Indian Penal Code, but the other offence(s) under the Special Act cannot be compounded, except under Section 320 Cr.P.C.Sections 138 to 142 of the Negotiable Instruments Act were inserted by Banking Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988, with the object of providing a speedy remedy apart from inculcating faith in the efficacy of Banking operations and credibility in business transactions relating to the Negotiable Instruments. Thus, it is an essential facet for the economic development of a country - the offence(s) which are not provided under Section 320 Cr.P.C., cannot be compounded and if it is allowed to be compounded, it will have the effect of acquittal by setting aside the conviction and sentence on the basis of the subsequent compromise entered into between the parties. The present petition filed under Section 482 Cr.P.C. is not maintainable before this Court for reviewing or recalling a judgment, which was already passed by this Court by confirming the conviction and sentence imposed on the respondent/accused, by the trial Court. Such power under Section 482 Cr.P.C. are boundless - the respondent in this case pleaded not guilty before the trial court, appellate Court at the first instance, as well as this Court in the appeal against acquittal, but such a plea was over-turned and he was convicted for having committed the offence under Section 138 of the Negotiable Instruments Act. While so, the present petition seeking to accept the compromise entered into between the parties, is nothing short of an abuse of process of law. Thus, when once a Criminal Case registered under Section 138 of the N.I. Act, had handed down the conviction either in the Appeal or in the Revision by the High Court, the question of compounding of the offence(s) thereafter under Section 147 of the N.I. Act by invoking Section 482 Cr.P.C. is not permissible - petition rejected.
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9911796707
