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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter September 11, 2024 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws PMLA Service Tax Central Excise Indian Laws Articles LATEST AMENDMENTS IN SEBI RULES & REGULATIONS SEIZURE OF CASH IN GST News India-UAE bond will be the defining friendship, relationship & brotherhood of the decade and beyond: Shri Piyush Goyal. Auction for Sale (re-issue) of (i) ‘7.02% GS 2031’, and (ii) ‘7.46% GS 2073’ Notifications Companies Law G.S.R. 555(E) - dated 9-9-2024 - Co. Law Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024. G.S.R. 554(E) - dated 9-9-2024 - Co. Law The Companies (Indian Accounting Standards) Second Amendment Rules, 2024. G.S.R. 552(E) - dated 9-9-2024 - Co. Law Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2024. Law of Competition F.No.CCI/CD/Comb. Regl./2024 - dated 9-9-2024 - Competition Law The Competition Commission of India (Combinations) Regulations, 2024 (No. 07 of 2024). Highlights / Catch Notes GST Lack of fair hearing before GST penalty order; distinct order for each return - HC dismissed the writ petition as misconceived. The case involves a violation of the principles of natural justice. There was a failure to provide a proper opportunity for a hearing before passing an adverse order u/s 74 of the Central Goods and Service Tax Act, 2017. The court observed that each monthly return filed is separate, and a distinct order can be passed for assessment or penalty, even if the parties, invoices, or ITC claimed appear to be the same. The High Court dismissed the writ petition as misconceived. Visit to Get Source Non-compliance of mandatory Section 83(1), CGST Act leads to arbitrary provisional attachment order; reasons a must. The High Court held that the language of Section 83(1) of the Central Goods and Services Tax Act, 2017 is mandatory and must be followed as it has penal consequences. The impugned order u/s 83(1) should indicate the reasons that weighed with the Commissioner to form an opinion for provisional attachment to protect government revenue interests. Passing an order without recording reasons violates natural justice principles. The matter was remitted to the Commissioner to record reasons in writing for forming such an opinion if deemed fit, failing which the impugned orders cannot be sustained. The petition was allowed by way of remand. Visit to Get Source Tax liability dispute: Interest levy despite credit ledger payment challenged. Court unable to examine merits due to incomplete records. The petitioner contested the levy of interest, claiming tax liability was paid from the credit ledger, precluding interest charges. However, the court observed factual issues requiring detailed scrutiny of records. The petitioner failed to annex the response to the show-cause notice, hindering the court's ability to delve into merits. The statute provides for appellate remedies, with the first appellate authority being functional, albeit the Appellate Tribunal is yet to be constituted. Considering the availability of statutory appellate mechanisms and the need for factual examination, the High Court dismissed the writ petition. Visit to Get Source Tax dispute over GSTR mismatch & excess ITC claims; HC remands case for fresh review after 10% disputed tax paid. The petitioner challenged the order and summary order alleging discrepancies between GSTR-1 and GSTR-3B, and excess availment of Input Tax Credit (ITC). The petitioner agreed to pay 10% of the disputed tax to file reply/objections with supporting documents. The High Court set aside the impugned orders and remanded the matter for fresh consideration, subject to the petitioner paying 10% of the disputed tax within four weeks. The petition was disposed of by way of remand. Visit to Get Source Tax credit denial overruled: Manpower services eligible for ITC as per GST circular. Petitioner challenged denial of input tax credit (ITC) on manpower supply services received during 2017-18 to 2022-23, citing Circular No. 211/5/2024-GST. Court held petitioner entitled to ITC and cannot be deprived or liable for interest due to belated claim, as per circular. Circular supports petitioner's claim, binding on respondents as per KP Varghese judgment. However, as circular issued during pendency, respondent didn't have its benefit earlier. Petition disposed, directing respondent to consider petitioner's objections within three weeks, bearing in mind circular and pass orders accordingly. Petitioner granted liberty to file objections to show cause notice. Visit to Get Source Tax return discrepancy: Court orders fresh hearing after paying 10% disputed amount as security. The High Court set aside the impugned order and remanded the matter back to the respondent authority to pass a fresh order. This was subject to the condition that the petitioner deposits 10% of the disputed tax amount within 30 days as security. The case pertained to discrepancies between the GSTR-1 and GSTR-3B returns filed by the petitioner. The petitioner had already paid tax but sought an opportunity to be heard and expressed willingness to deposit an additional 10% of the disputed tax from the electronic cash register as security. Visit to Get Source Income Tax Tax liability below threshold limits appeal dismissal as per Circular No. 17/2019. The court held that the tax liability arising from the deletion of additions under the remand order would be less than Rs. 1,00,00,000, rendering the appeal non-maintainable as per Circular No. 17/2019. Even if the appeal were allowed and remanded to the Tribunal, the subject matter would be Rs. 50,00,000, below the prescribed monetary limit. Considering the additions disallowed and the return, the tax liability would be less than Rs. 50,00,000, precluding the appeal before the Appellate Authority. Consequently, the court dismissed both appeals in accordance with Circular No. 17/2019, finding them undeserving of acceptance due to the low tax effect. Visit to Get Source Tax Assessment Notice Validity: Faceless Regime Violation Renders Reopening Invalid. Validity of reopening income tax assessment proceedings. The key points are: the Jurisdictional Assessing Officer (JAO) issued the notice for reopening assessment instead of a Faceless Assessing Officer (FAO), violating the statutory scheme u/s 151A(2) of the Income Tax Act. The court held that non-compliance with the faceless assessment scheme, which has the character of subordinate legislation, renders the initiation of proceedings invalid. Both parties agreed that the reopening proceedings would be unsustainable due to the Hexaware judgment. Since the JAO lacked jurisdiction to issue the notice and the issue was time-barred, the writ petition was allowed. Visit to Get Source Petitioner's application for settlement under Income Tax Act to be reconsidered by IBS; High Court quashes rejection order. The High Court quashed the order of the Interim Board for Settlement (IBS) rejecting the petitioner's settlement application u/s 245D(4). The court held that the IBS should consider the application, keeping open all objections/contentions of the revenue, including on the applicable threshold limits under the first proviso to Section 245C(1). The court did not examine the petitioner's challenge to the constitutional validity of these provisions, and all contentions of the petitioner were expressly kept open. The writ petition was disposed of without costs. Visit to Get Source Firm's low profits can't trigger reassessment without seeking explanation beforehand. The High Court held that the Assessing Officer (AO) could not reopen the assessment merely based on a belief that the average gross profit in the assessee's business line should be around 0.5% of the turnover. The court ruled that before concluding the original assessment, the AO should have sought an explanation from the assessee regarding the low net profit declared. Reopening the assessment on this ground amounted to a mere change of opinion, which is impermissible. The court also observed that the AO could have requested the KYC documents if there were doubts about the cash deposits, instead of treating it as a ground for reopening. The court emphasized that reopening must be based on fresh facts or information exposing the untruthfulness of previously disclosed facts, not merely a different inference from the same facts. The court allowed the assessee's petition, concluding that the reopening would amount to an impermissible review. Visit to Get Source Refund interest adjustment: Refund to adjust interest first, then principal. Fair methodology. When calculating interest u/s 244A(1), if a refund is granted earlier, it should be adjusted against the interest component first, and the remaining amount, if any, should be adjusted against the principal refund amount. This follows the same methodology as when part taxes are paid by the assessee, where it is first adjusted against the interest payable and then against the tax due. The CIT(A) rightly directed the Assessing Officer to examine the computation of refund, including interest u/s 244A. The impugned order is upheld, and the appeal is dismissed. Visit to Get Source Tax Authority's Error: Assessment Order Against Non-Existent Company After Merger Nullified. The revenue authorities were aware of the amalgamation of AOK In-house Factoring Services Private Limited with 3i Infotech BPO Limited. The assessing officer passed the assessment order against the non-existent company, which had been delisted and amalgamated with the assessee company. An assessment order passed in the name of a non-existent entity is a nullity and has no legal consequence. Following the judgment in Spice Entertainment Ltd [2011 (8) TMI 544 - Delhi High Court], the assessment order is liable to be quashed. The assessee's appeal is allowed, and the Appellate Tribunal quashed the assessment order as it was passed against a non-existent entity. Visit to Get Source Tax authorities erroneously disallowed deduction for estimated contract losses, ignoring the scientific basis and revenue recognition methodology. The case pertains to the disallowance of a provision for contract losses by the CIT(A) and AO, who erroneously concluded it as an unascertained liability not deductible u/s 37. The provision represents the excess of estimated contract expenditure over estimated contract revenues. The ITAT held that the provision constitutes an ascertained liability/probable loss for the assessee, made on a scientific basis. Both lower authorities erred in appreciating that revenue from the contract was also recognized on a percentage of completion basis. The case laws cited by the assessee support this view. The FLSmidth case is distinguishable as the assessee couldn't explain how contract costs would exceed revenues. However, in the present case, the assessee recognized revenue and expenses on the same methodology, supported by computations, and the provision was reversed in subsequent years. The Triveni Engg case is on similar facts, where the court allowed the deduction for such a provision. Therefore, the impugned provision is an allowable deduction, and the question of adding it to book profits does not arise. The assessee's appeal is allowed. Visit to Get Source Income Underassessment Due to Incorrect Computation and Failure to Verify Evidence. The AO failed to correctly compute the undisclosed income after considering the correct sale value of land as per Form 26AS. The assessee claimed that one of the lands in Form 26AS pertained to "Vaibhav Corporation Pvt. Ltd." and not to him, requiring further verification by the AO. However, the AO failed to make the correct addition u/s 68 and failed to consider the cash deposit, resulting in underassessment of income. The PCIT invoked revision proceedings u/s 263, despite the assessee providing evidence that the sale of property was done by "Vaibhav Corporation Pvt. Ltd." and not by the assessee, including the relevant Form 26AS and a letter from the Sub-Registrar confirming the same. The ITAT held that when such evidence was filed, the PCIT should have dropped the revision proceedings, as incorrect calculation of income is rectifiable u/s 154 and not by invoking Section 263. The ITAT quashed the PCIT's revision order and allowed the assessee's appeal. Visit to Get Source Customs High Court examines jurisdiction over refund claim, directs transfer to Airport authority for competence. The High Court examined the jurisdiction of the Commissioner to process the refund claim for Special Additional Duty (SAD) and the direction to transfer the claim to the jurisdictional Commissioner, Airport. Regarding the jurisdiction, the Court held that the Commissionerates of Seaport and Airport are clearly demarcated, and their charge is restricted to matters within their competence only. There can be no assumption of jurisdiction by officers of one Commissionerate over matters falling within the jurisdiction of the other. Concerning the transfer of the refund claim, the Court ruled that a superior authority can direct the transfer of an appeal from one authority to another based on competence. Since the matter related to a refund from the Airport Commissioner, the matter was rightly directed to be transferred to the Commissionerate Airport. The appeal was disposed of accordingly. Visit to Get Source Custom broker's license penalty violated due process; statements used without cross-exam opportunity. Penalty under Customs Broker Licensing Regulation (CBLR) 2013 for violation of Regulation 17(9). Appellant not directly involved in act or omission by authorized signatory, no allegation of undue financial benefit. Cross-examination opportunity under Regulation 20(4) not provided despite reliance on statements of different persons. As per precedent, adjudication authority ought to have given opportunity for cross-examination before relying on such statements. Proceedings in violation of Regulation 20(4), not sustainable. Appeal allowed by Appellate Tribunal. Visit to Get Source Importer's legal battle over pea import restrictions eased. The appellant challenged the notification extending the restriction on imports of green peas and yellow peas up to 31.12.2018, as the initial restriction was only until 30.06.2018. The Rajasthan High Court initially stayed the operation of the extended notification, which was later upheld by the Supreme Court. Although the imports during 22.10.2018 to 28.12.2018 were held restricted, the Tribunal took a sympathetic view considering the appellant was a regular importer, the gap of three months without restrictions, and the legal challenge. The redemption fine and penalty imposed by the Adjudicating Authority were reduced by the Commissioner (Appeals), and the Tribunal disposed of the appeals filed by the Revenue and the cross-objection filed by the Respondent. Visit to Get Source Worn clothing imports seized for license violation; fines reduced for substantial compliance. Imported old and used worn clothing, though completely fumigated, was considered a restricted item. The Tribunal upheld the confiscation of goods u/s 111(d) of the Customs Act, 1962 due to non-compliance with licensing requirements. However, considering the negligible scope for ascertainment, the Tribunal reduced the redemption fine to 10% of the ascertained value and penalty to 5% to serve the ends of justice. The appellate authority's imposition of redemption fine and penalty on the respondents was found sufficient. The Revenue's appeal against the order was dismissed as no infirmity was found. Visit to Get Source Indian Laws Cheque dishonor case acquittal upheld - plausible defense of investment, not loan. Petitioner failed to prove Rs.14L loan claim. Dishonor of cheque case - accused acquitted - rebuttal of presumption u/ss 118 and 139 of NI Act. Appellate Court has wide powers to re-appreciate evidence in appeal against acquittal but must exercise caution as presumption of innocence strengthened by acquittal order. Supreme Court guidelines on appeals against acquittal followed. Respondent's defense found plausible - cheque given for investment, not loan. Petitioner failed to substantiate Rs. 14 lacs loan claim. Presumption u/s 114 Evidence Act applied against Petitioner for non-production of accounts. No infirmity found in Appellate Court's findings based on preponderance of probabilities. Leave to appeal dismissed. Visit to Get Source PMLA Money laundering law allows authorities to investigate, even after repayment or quashing predicate offence. The court held that the competent authorities under the Prevention of Money Laundering Act (PMLA) cannot be restrained from exercising their statutory powers, even if the predicate offence has been quashed or the victims have received back the money involved. Mere repayment of money or quashment of the FIR in the predicate offence does not absolve the offence of money laundering under the PMLA. The authorities retain the power to summon, investigate, and trace the proceeds of crime under the PMLA. Issuing a writ of mandamus to forbear the authorities from summoning any person under the PMLA would defeat the very purpose and objective of the Act. Therefore, the court dismissed the writ petition seeking to restrain the authorities from invoking the PMLA provisions against the petitioner. Visit to Get Source Service Tax Time-barred service tax refund claim cannot be entertained. Limitation period of one year from relevant date u/s 11B must be adhered to. Service tax refund claim filed beyond statutory limitation period cannot be entertained. Refund application must be filed within one year from relevant date as per Section 11B of Central Excise Act, 1944 made applicable to service tax. Supreme Court's decision in Union of India vs. ITC Ltd. pertains to unjust enrichment principle u/s 11B. Mandamus cannot be issued to direct consideration of time-barred refund claim. Since refund claim was filed after expiry of limitation period u/s 11B, writ petition lacks merits and is dismissed. Visit to Get Source Corporate guarantees sans consideration not taxable, ruling of Supreme Court followed. Corporate guarantees provided without consideration are not taxable under the Finance Act, 1994, as established by the Supreme Court's decision in Commissioner of CGST & Central Excise Vs Edelweiss Financial Services Ltd. The Tribunal held that for taxation u/s 66B, an activity must have a 'provider' and 'consideration' flow, which is absent in such guarantees. Regarding service tax on profit/mark-up, the Tribunal, following the Tiger Logistics case, ruled that profit earned through business activities cannot be considered consideration for service, thus not taxable. The assessee's appeal was allowed, setting aside the demands. Visit to Get Source Central Excise Tax dispute jurisdiction clarified: Petitioners can challenge Revisionary Authority orders before High Court where original adjudication or Authority is located. The High Court held that the petitioners have the option to file writ petitions challenging the orders of the Revisionary Authority either before the High Court within whose jurisdiction the original adjudication occurred or before the High Court within whose jurisdiction the Revisionary Authority is located. The doctrine of merger and the principle of forum conveniens allow the petitioners to choose the appropriate forum. Even if a small fraction of the cause of action arises within the territorial jurisdiction of a High Court, it will have jurisdiction. However, this factor alone may not compel the High Court to decide the matter on merits. Since the Revisionary Authority is located within the territorial jurisdiction of the Principal Seat of the High Court, the petitioners have the right to file the petitions there. The principle of merger dictates that a writ against an appellate order would lie before the High Court within whose jurisdiction the Appellate Authority is located. The High Court held that the present petitions are maintainable before its Principal Seat as the orders of the adjudicating authorities have merged into the impugned orders of the Revisionary Authority located in its jurisdiction. Visit to Get Source Woven plastic bags not in Heading 3923, fall under 6305; no duty on H-Form CENVAT supply. Bags manufactured by weaving HDPE/PP strips are classifiable under Heading 6305 and not under Heading 3923. Heading 3923 covers articles for conveyance or packing of goods but excludes household articles, tableware, toilet articles, containers of Heading 42.02, and flexible intermediate bulk containers of Heading 63.05. The impugned bags, being woven from plastic strips, merit classification under Heading 6305 as per the Gujarat High Court judgment. Even if classified under Chapter 39, no duty is payable on goods supplied against H-Form for CENVAT credit and cum-duty benefit. When the duty itself is not chargeable, interest and penalties are set aside. The appeal is allowed. Visit to Get Source Case Laws: GST 2024 (9) TMI 504 Challenge to order passed by the respondent No. 2 under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 for the Tax Period-July 2017-March 2018 - HELD THAT:- The factual matrix is such that the matter is squarely covered by a coordinate Bench judgment of this Court in MAHAVEER TRADING COMPANY VERSUS DEPUTY COMMISSIONER STATE TAX AND ANOTHER [ 2024 (3) TMI 334 - ALLAHABAD HIGH COURT] where it was held that ' the impugned order cannot be sustained in the eyes of law. It has been passed in gross violation of fundamental principles of natural justice. The self imposed bar of alternative remedy cannot be applied in such facts. If applied, it would be of no real use.' Upon a perusal of record, it appears that the factual matrix is very similar to one in Mahaveer Trading Company. There are no any reason to take a different stand. The impugned order dated 14.12.2023 passed by Deputy Commissioner, State Tax, Sector-2, Kanpur is quashed and set-aside with a direction given to the officer concerned to grant the petitioner another opportunity of filing a fresh reply and thereafter fix a date of hearing and pass a reasoned order - Petition disposed off. 2024 (9) TMI 503 Violation of principles of natural justice - Failure to provide proper opportunity of hearing before passing an adverse order under Section 74 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- It is evident from a perusal of paragraph-6 of the petition that it relates to the separate months for which purchases have been shown and ITC credit claimed. The parties may be the same, the invoices/ITC may look to be the same as they have been issued by same traders, but for every return that is filed, a separate order can be passed for assessment/penalty. The writ petition is dismissed as misconceived. 2024 (9) TMI 502 Provisional attachment of properties - petitioner submits, that the impugned orders are infirm inasmuch as it does not reflect the opinion of the Commissioner - principles of natural justice - HELD THAT:- The language of Section 83(1) of the Central Goods and Services Tax Act, 2017, in our considered opinion is mandatorily to be followed as it visits the petitioner with penal consequences. It was, therefore, necessary that the impugned order under Section 83(1) of the Central Goods and Services Tax Act, 2017, indicate the reasons which weighed with the Commissioner to form an opinion, that for the purpose of protecting the interest of the Government of revenue and order of provisional attachment was necessary. The mandate of Section 83(1) of the said Act enjoins upon the Commissioner to pass an order in writing in that regard, the very purpose of which is to embody the reasons for forming such an opinion, which then can be tested in a challenge raised thereto. However, in absence of any reason for forming such an opinion, in our considered opinion, the impugned orders cannot be sustained. The matter is remitted back to the Commissioner to record reasons in writing for forming such an opinion in case he deems it fit and proper again to do so - petition allowed by way of remand. 2024 (9) TMI 501 Levy of interest - case of petitioner is that he had made payment of its tax liability from the credit ledger and having regard thereto, no interest can be levied on the petitioner - HELD THAT:- From the bare perusal of the show-cause notice in form GST DRC 01 dated 4th December, 2023 for the tax period from April 2021 to March 2022 it transpires although the petitioner claims to have responded to the show-cause and the reflection thereof is available in the impugned order, the petitioner has chosen not to annex such reply. The petitioner however, insists that this Court should go into the merits of the case and by proceeding on the premise that I.T.C. was available to the credit of the petitioner should set aside the order including the demand raised by the respondents in form GST DRC 07 dated 25th January, 2024 - there are factual issues, which may require detailed scrutiny of records. It is noticed that the statute itself incorporates not only one but two several appellate authorities, one right of appeal succeeding another. Though, the Appellate Tribunal under the said Act is yet to be constituted, the first appellate authority is very much functional. The writ petition cannot be entertained and accordingly fails. 2024 (9) TMI 500 Cancellation of registration or petition - cancellation on the ground of not providing an opportunity of hearing as well as such order was passed without assigning any reason for cancellation of the registration of the petitioner - violation of principles of natural justice - HELD THAT:- The Coordinate Bench of this Court in case of AGGARWAL DYEING AND PRINTING WORKS VERSUS STATE OF GUJARAT 2 OTHER (S) [ 2022 (4) TMI 864 - GUJARAT HIGH COURT] has issued the guidelines to the respondent-authorities - The aforesaid judgement was rendered in the year 2022. However, in spite of the above direction issued by this Court, the respondent-authorities without following such directions are issuing cryptic notice and order for cancellation of registration number of the petitioner. In the present matter, order of cancellation of registration is passed without giving any reason by the respondent authorities, and appeal filed by the petitioner under Section 107 of the GST Act is also dismissed - As the Appellate Authority has dismissed the appeal of the petitioner, the respondent authorities will not be able to exercise the revisional power under section 108 of the GST Act. The impugned order passed by the Appellate Authority as well as the order of cancellation of registration are required to be quashed and set aside. Accordingly, the matter is remanded back to the Assessing Officer at the show cause notice stage - Petition partly allowed - matter remanded. 2024 (9) TMI 499 Challenge to order and summary order - alleged discrepancies between GSTR-1 and GST R-B, and the alleged excess availment of Input Tax Credit (ITC) - HELD THAT:- The petitioner would fairly submit that the petitioner is now ready and willing to pay 10% of the disputed tax in the event of providing an opportunity to them to file their reply/objections along with the required documents to substantiate their claim, for which, the learned Special Government Pleader (Taxes) has no serious objection. The orders impugned herein are set aside and the matter is remanded to the respondent for fresh consideration on condition that the petitioner shall pay a 10% of the disputed tax to the respondent within a period of four weeks from the date of receipt of a copy of this order and the setting aside of the impugned order will take effect from the date of payment of the said amount - Petition disposed off by way of remand. 2024 (9) TMI 498 Cancellation of GST registration of the petitioner - no reason specified for cancellation of registration - principles of natural justice - HELD THAT:- On perusal of the show cause notice dated 22nd March 2021 and the order of cancellation of registration on the same date, it is clear that both are cryptic without giving any reason or specifying any reason for cancellation of registration. The case of the petitioner is squarely covered by the decision of this Court in the case of AGGARWAL DYEING AND PRINTING WORKS VERSUS STATE OF GUJARAT 2 OTHER (S) [ 2022 (4) TMI 864 - GUJARAT HIGH COURT] . The show cause notice and the impugned order dated 5th April 2021 are hereby quashed and set aside - Petition allowed. 2024 (9) TMI 497 Violation of principles of natural justice - SCN were required to be placed under the heading of View Notices Orders but the same was not done - HELD THAT:- The GST Authorities have addressed the issue and have re-designed the portal to ensure that View Notices tab and View Additional Notices tab are placed adjacent to one another and under one heading - Admittedly, the impugned SCN was issued before the portal was redesigned. The impugned order is set aside - Petition allowed. 2024 (9) TMI 496 Challenge to SCN - availment of ITC in respect of the manpower supply services received by the Petitioner during the period 2017-18 to 2022-23 - circular No. 211/5/2024-GST, dated 26.06.2024 - HELD THAT:- The petitioner would be entitled to availment of ITC and cannot be deprived of the same or fastened with liability to pay interest on account of his claim having been filed belatedly as can be seen from the circular. The circular completely supports the claim of the petitioner especially in the light of the judgment of the Apex Court in the KP VARGHESE VERSUS INCOME-TAX OFFICER, ERNAKULAM, AND ANOTHER [ 1981 (9) TMI 1 - SUPREME COURT] to the effect that a CBIC circular is binding upon the respondents. However, since the said circular was issued during the pendency of the present petition and the respondents did not have the benefit of the said circular at the time of issuance of the Show Cause Notice, it is deemed just and appropriate to dispose of this petition and direct respondent No. 2 to consider the objections to be filed by the petitioner and proceed further in accordance with law, bearing in mind the aforesaid circular and take appropriate decisions/pass appropriate orders in accordance with law. Liberty is reserved in favour of the petitioner to file his objections to the impugned Show Cause Notice within a period of three weeks, which shall be considered by respondent No. 2, who shall proceed further bearing in mind the observations made in this order and circular No. 211/5/2024-GST, dated 26.06.2024. 2024 (9) TMI 495 Seeking for setting aside the notices - case of the petitioner is that the respondent has resorted to blocking of Input Tax Credit (ITC) in exercise of power under Rule 86A of CGST/IGST Rules, 2017 - HELD THAT:- In view of admitted facts and that the period of one year having lapsed, the blocking of ITC at Annexure-'K' dated 19.05.2023 has been set aside and consequently, the blocking of Credit Ledgers at Annexures-'L', 'L1' and 'L2' dated 20.05.2023, 03.06.2023 and 05.06.2023 are set a side. Petition disposed off. 2024 (9) TMI 494 Challenge to original assessment order and the rejection of the rectification - non-service of order - petitioner was unaware of proceedings because the show cause notice and the order were uploaded in the View Additional Notices are orders tab on the GST portal and not communicated to the petitioner through any other mode - mismatch between the GSTR-3B return and the auto-populated GSTR-2A - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal pertains to a mismatch between the GSTR-3B return and the auto-populated GSTR-2A. The petitioner also placed on record the annual return in Form GSTR-9 and reconciliation statement in Form GSTR-9C. The documents on record disclose that the entire liability towards tax, interest and penalty was appropriated from the petitioner's bank account. In these circumstances, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits. The impugned order dated 26.12.2023 is set aside and the matter is remanded for reconsideration. The petitioner is permitted to submit a reply to the show cause notice within two weeks from the date of receipt of a copy of this order. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and there after issue a fresh assessment order within three months from the date of receipt of the petitioner's reply. Petition disposed off by way of remand. 2024 (9) TMI 493 Violation of principles of natural justice - petitioner was unaware of the impugned orders and the notices that preceded the impugned orders as they were posted in the GST common portal and therefore, the petitioner failed to note the same - HELD THAT:- The Court is of the view that the impugned orders passed during the month of December 2023 and January 2024 are liable to be set aside and the cases be remitted back to the respondent to pass fresh orders on merits after giving an opportunity to the petitioner being re-heard. The impugned orders, which stand quashed, shall be treated as addendum to the notices that preceded the impugned orders. The petitioner shall file a reply within a period of 30 days from the date of receipt of a copy of this order. Petition allowed. 2024 (9) TMI 492 Appeal barred by time limitation - notices that preceded the impugned orders went unnoticed and also the impugned orders that was passed on 20.04.2023, 19.08.2023 and 19.07.2023 for the respective assessment years also went unnoticed - HELD THAT:- The impugned orders are quashed and the matter is remitted back to the respondent to pass fresh order. The impugned orders, which stand quashed, shall be treated as addendum to the notices issued prior to the impugned order. Petition disposed off. 2024 (9) TMI 491 Principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - notice and the impugned order were uploaded in the View Additional Notices and Orders tab on the GST portal and not communicated to the petitioner through any other mode - mismatch between GSTR-3B and the auto-populated GSTR-2A - HELD THAT:- On examining the impugned order, it is clear that the confirmed tax proposal pertains to mismatch between the GSTR-3B returns and the auto-populated GSTR-2A. Such tax proposal was confirmed because the petitioner did not reply to the show cause notice. Therefore, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits, albeit by putting the petitioner on terms. The impugned order dated 07.07.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand. 2024 (9) TMI 490 Discrepancies between the returns of GSTR- 01 and GSTR-3B - petitioner would submit that since the petitioner has already paid, the petitioner may be given one opportunity being heard - petitioner would further submit that the petitioner is willing to deposit another 10% of the disputed tax as a security from his electronic cash register - HELD THAT:- The impugned order is set a side and the matter is remitted back to the respondent to pass fresh order, subject to the petitioner depositing 10% of the disputed tax within a period of 30 days from the date of receipt of a copy of this order. Petition allowed by way of remand. 2024 (9) TMI 489 Rejection of appeal on the ground of time limitation - appeal was presented beyond the condonable period - HELD THAT:- On perusal of the appellate order, it is evident that the delay beyond the condonable period is only 21 days. The petitioner has stated in the affidavit that the tax proposal was confirmed under Section 74 of applicable GST enactments in spite of the fact that the ingredients of Section 74 are not satisfied. By taking this aspect into account and by noticing that the period of delay beyond the condonable period is only 21 days, this writ petition is disposed of by setting aside the appellate order dated 30.03.2024 and consequently directing the 2nd respondent to receive and dispose of the appeal filed by the petitioner on merits without going into the question of limitation. Petition disposed off. Income Tax 2024 (9) TMI 488 Maintainability of appeal on low tax effect - HELD THAT:- The tax liability by virtue of deletion of the additions under the remand order would be less than Rs. 1,00,00,000/- appeal would not be maintainable as per Circular No. 17/2019 and appeal would have to be therefore dismissed. As also pertinent to state here that assuming that this appeal of the department is to be allowed and the matter is remanded to the Tribunal, even then the subject matter of the appeal would Rs. 50,00,000/- and that would also be lesser in Monetary limits than prescribed in Circular No. 17/2019. No useful purpose would be served as the tax effect in this case would be below Rs. 50,00,000/-. As stated here that if the additions disallowed by the Appellate Authority on the basis of the remand order is taken into consideration and the return is taken into consideration, the tax liability on the said sum would actually be less than Rs. 50,00,000/- and the appeal before the Appellate Authority cannot be maintained. We find that the appeals filed by the Department does not deserve acceptance. Accordingly, both the appeals are dismissed in accordance with Circular No. 17/2019. 2024 (9) TMI 487 Assessment proceeding u/s 147/148 during pendency of Writ Petition - availability of alternative remedy u/s 246A - Assessment Order has already been passed during the pendency of the Writ Petition - HELD THAT:- Since the initiation of the proceeding under Section 147/148 of the Income Tax was sought to be challenged in the Writ Petition and meanwhile a final Assessment Order was passed on 24.3.2022 against which an alternative efficacious remedy was available to the Petitioner/Appellant to file an appeal under Section 246A of the Income Act, learned Single Judge is absolutely justified in holding that the Petitioner has an alternative remedy to file an appeal under Section 246A of the Income Act against the said Assessment Order dated 24.3.2022. We, therefore, decline to exercise our writ appellate jurisdiction to interfere with the impugned Order dated 7.10.2023 passed by learned Single Judge which appears to be just and proper. As Appellant prays that one month s time may be granted to file an appeal and meanwhile the interim order passed by this Court may also be extended for a period of one month, which the learned Counsel for the Respondents has also graciously agreed to allow the Appellant to grant one month s time to prefer appeal. We permit the Appellant to file an appeal u/s 246A within a period of one month from today and for the period of one month, the interim order dated 20.12.2023 passed by this Court shall remain in operation. 2024 (9) TMI 486 Faceless assessment of income escaping assessment - Validity of reopening of assessment - notice issued by the Jurisdictional Assessing Officer ( JAO ) and not by a Faceless Assessing Officer ( FAO ) - HELD THAT:- In the present case, it is apparent that the respondent-revenue has not complied with the Scheme notified by the Central Government pursuant to Section 151A (2) of the Act. The Scheme has also been tabled in Parliament and is in the character of subordinate legislation, which governs the conduct of proceedings under Section 148A as well as Section 148 of the Act. In view of the explicit declaration of the law in Hexaware, the grievance of the petitioner-assessee insofar as it relates to an invalid issuance of a notice is sustainable and consequently, the very manner in which the proceedings have been initiated, vitiates the proceedings. Both the parties agree that the proceedings initiated under Section 148 of the Act would not be sustainable in view of the judgment rendered in Hexaware. [ 2024 (5) TMI 302 - BOMBAY HIGH COURT ] As JAO had no jurisdiction to issue the impugned notice and that the issue was time-barred, the Writ Petition is accordingly allowed. 2024 (9) TMI 485 Eligibility of Settlement application u/s 245D(4) - petitioner s settlement application be held to be not maintainable when tested on the provisions of the first proviso of Section 245C (1) (ia) considering the assessment years and amounts as involved by bifurcating the amounts in respect of the search years and the non-search years - HELD THAT:- We are of the opinion that the contention as urged by Mr. Suresh Kumar would be a contention relevant to be urged before the IBS. Certainly, it would be one of the jurisdictional issue and it would be required to be gone into, considering the case of the petitioner in each of the assessment years and subject matter of consideration of the settlement application as made by the petitioner. In the present proceedings, we are concerned with the limited issue on the ground on which the settlement application filed by the petitioner has been rejected by the IBS as noted by us hereinabove which appears to be indisputably covered by the decision of this court in Sar Senapati [ 2024 (4) TMI 204 - BOMBAY HIGH COURT] as also followed in Vishwakarma Developers [ 2024 (8) TMI 366 - BOMBAY HIGH COURT] . We are inclined to allow the petition in terms of the following order : (i) The impugned order dated 29 August, 2023 passed by the Interim Board for Settlement is hereby quashed and set aside. (ii) It is held that the application as filed by the petitioner is liable to be considered by the Interim Board for Settlement. However, keeping open all objections/contentions of the revenue, including on the applicable threshold limits in terms of first proviso to section 245C (1) of the Act. (iii) As we have allowed the petition on the aforesaid limited ground, we have not examined the petitioner s case on the challenge to the constitutional validity of these provisions and in which regard all contentions of the petitioner are expressly kept open. (iv) Writ Petition stands disposed of in the aforesaid terms. No costs. 2024 (9) TMI 484 Reopening of assessment - reassessment based on the report of the DDIT which stated that the net profit declared by the assessee was 0.05% of the turnover and felt that in the line of business of forex dealers in Goa, the average gross profit would be 0.50% of the turnover - cash deposits made in various bank accounts by the assessee company - HELD THAT:- According to us, it was for the AO to have called for explanation on this aspect before conclusion of the assessment proceedings. Thus, the reason that in respect of other dealers in this line of business the average gross profit will be around 0.5% of the turnover cannot be said to be a fresh fact which has come to light which was not previously disclosed or that it is such information with regard to the fact previously disclosed coming into possession of the AO which tends to expose the untruthfulness of those facts. Had it been a case where some fresh facts which come to light were not previously disclosed or some information with regard to the facts previously disclosed coming into possession of the AO which tends to expose the untruthfulness of those facts, in such situation, it would not be a case of mere change of opinion or the drawing of a different inference from the same facts as were earlier available but acting on fresh information. Undoubtedly, the belief is that of the Income Tax Officer, the sufficiency of reasons for forming the belief is not for the Court to judge but it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. We are not persuaded by the arguments of Revenue that the assessee had not made full and true disclosure of the material facts at the time of the original assessment and therefore the income chargeable to tax has escaped assessment. Large cash deposits made in the accounts of the assessee which appear to be on account of unauthorized transactions of forex which are made without requisite KYC of the forex purchasing party - All the relevant registers indicating the cash deposits were placed before the Assessing Officer. In the order under clause (d) of Section 148A, it is mentioned that these cash deposits are made without requisite KYC of the forex purchasing party. The learned counsel for the Revenue was at pains to submit that the assessee was obliged to make a true and complete disclosure including the details of the KYC which the assessee failed to do. In our view, before concluding the assessment, the Assessing Officer could have called for the KYC document if there was any doubt in his mind that large cash deposits were made in the accounts of the assessee on account of unauthorized transactions of forex. As indicated earlier, the sufficiency of reason for forming the belief of the Income Tax Officer is not for the Court to judge but it is open to an assessee to establish that there existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. Though the learned counsel for the Revenue was at pains to urge that the assessee had not made full and true disclosure of the material facts at the time of the original assessment and therefore, the income chargeable to tax has escaped assessment, we are not persuaded to accept this argument in the facts of the present case. The Supreme Court has explained that the purpose and intent of Sections 147 (a) and 148 of the Act is to ensure that a party cannot get away by wilfully making a false or untrue statement at the time of original assessment and when that falsity comes to notice, to turn around and say ' you accepted my lie, now your hands are tied and you can do nothing . No doubt, it would be travesty of justice to allow the assessee that latitude. The test to be applied is as to whether there was reason to believe that the income has escaped assessment and whether the AO has sufficient reason for forming that belief. We have to be mindful of the observations in Kelvinator of India Limited [ 2010 (1) TMI 11 - SUPREME COURT ] which explained the conceptual difference between the power to review and power to reassess. AO has no power to review; he has the power to reassess. But reassessment has to be based on the fulfillment of certain precondition and if the concept of change of opinion is removed, then, in the garb of reopening the assessment, review would take place. Thus, we are satisfied that in the facts and circumstances of the present case, in the garb of reopening the assessment, the review would take place. The petition therefore succeeds and is accordingly allowed. 2024 (9) TMI 483 Short grant of interest u/s. 244A(1) - as per CIT(A) while calculating interest u/s. 244A(1), the refund earlier granted should be adjusted against the interest component and balance if any, should be adjusted against the principal refund amount without any methodology - HELD THAT:- As decided in own case [ 2024 (5) TMI 492 - ITAT MUMBAI] for A.Y. 2004-05 it is not the case of the assessee to claim interest on interest or claim of any interest which is not provided in the act. Assessee is merely saying that when out of the total refund due comprising of interest and the tax, if part of the amount is refunded, it should be adjusted in a similar manner in which when part taxes paid are adjusted by revenue against tax and interest. We find that when part taxes are paid by the assessee, it is first adjusted against the interest payable and then against tax due, similarly when the part refund is granted to the assessee, it should be first adjusted towards the outstanding interest and then against the tax payable. CIT(A), in first appeal has rightly allowed the claim of the assessee in directing the assessing officer to examine the computation of refund including interest u/s. 244A. No fault or any infirmity is found in the impugned order. The impugned order is sustained. The aforesaid points are accordingly determined against the appellant revenue and in favour of the respondent assessee. The appeal is thus, liable to be dismissed. 2024 (9) TMI 482 Validity of final assessment order passed against non-existent entity - assessee company has been amalgamated with the appellant company - name of the company was struck off from the rolls of companies maintained by the Registrar of companies - HELD THAT:- The revenue authorities were aware about the amalgamation of AOK In-house Factoring Services Private limited with 3i Infotech BPO Limited. AO has passed the assessment order against the non-existent company. The assessment order passed in the name of a non-existent entity would be a nullity and no consequence. When the company has been delisted and amalgamated with the assessee company the assessment order passed by AO and confirmed by CIT(A) is nullity. The matter is squarely covered in favour of the assessee and against the Revenue by the Judgment of Spice Entertainment Ltd [ 2011 (8) TMI 544 - DELHI HIGH COURT] Respectfully following the decisions cited above the assessment order liable to be quashed and quashed accordingly - Appeal of assessee is allowed. 2024 (9) TMI 481 Estimation of income - bogus purchases - Restricting addition to the extent @12.5% of the bogus purchases considering profit element embedded - HELD THAT:- We found that the CIT(A) has dealt on the facts and considered the Hon ble High Court decision and took a view. We find in the case of Pooja Paper Trading Co. [ 2019 (3) TMI 62 - BOMBAY HIGH COURT ] and Simit P Sheth [ 2013 (10) TMI 1028 - GUJARAT HIGH COURT ] has considered the profit element embedded in the transaction. CIT(A) took a reasonable view that the only profit percentage has to be added and estimated @ 12.5% of bogus purchases. DR could not controvert the observations of the CIT(A) with any new cogent evidence and material but relied only on the AO order. We find that the CIT(A) has dealt on the facts and considered the profit element in the bogus purchases and also the A.O has not disputed the sales. CIT(A) has relied on the decisions of Hon ble High Court and passed a reasoned order. Accordingly, we do not find any infirmity in the order of the CIT(A) and uphold the same and dismiss the grounds of appeal raised by the revenue. 2024 (9) TMI 480 Revision u/s 263 - additional income as offered by the assessee cash was seized and certain jewellery was found from the assessee and a sworn statement was also recorded from him, on these aspects - revisional power vest with CIT to invoke the provision u/s 69 - suppressed income of the assessee has been assessed as Income from business OR u/s 68 r.w.s 115BBE HELD THAT:- Cash was seized and certain jewellery was found from the assessee and a sworn statement was also recorded from him, on these aspects. The assessee admitted additional income to cover up for the shortfall in cash and jewellery in the return of income which has been accepted by AO. The said income was offered as business income since the assessee was engaged in contract work. During the course of assessment proceedings, AO issued notice u/s 142(1) along with a detailed questionnaire, inter-alia, to furnish explanation of cash seized and jewellery found during the course of search and seizure operations. The assessee furnished the requisite details and explanations vide reply dated 05-04-2021. There is no finding in the assessment order that the assessee failed to furnish any details as called for by Ld. AO. The Ld. AO also considered the sworn statement of the assessee. A finding was also rendered that some gold jewellery belonged to the three daughters of the assessee whereas the remaining Jewellery was purchased out of withdrawals, drawings of earlier years out of agricultural income, rental income and interest income. To makeup for shortfall in cash and Jewellery, the assessee offered additional business income of Rs. 70.60 Lacs. Except for business income and agricultural income, the assessee is not shown to have any other substantial sources of income. Upon these facts, it could very well be said that a plausible view was taken by Ld. AO in the matter with due application of mind. The same could not be said to be opposed to facts or law. Simply because, the revisionary authority holds a different view in the matter, the same could not be a good enough reason to invoke the powers u/s 263 which is as per settled legal position laid down by higher judicial forums. The case law in Pr. CIT vs. Dharti Estate [ 2024 (1) TMI 1197 - GUJARAT HIGH COURT] is on identical set of facts and the same favors the case of the assessee. The case law of Jaipur Tribunal in Smt. Rekha Shekhawat [ 2022 (8) TMI 791 - ITAT JAIPUR] is also on identical lines and supports the case of the assessee. Therefore, in our considered opinion, the revision of the order could not be upheld. By quashing the same, we allow the appeal of the assessee. 2024 (9) TMI 479 Disallowance of provision for contract losses - CIT(A) and AO erred in concluding that the provision for anticipated loss is an unascertained liability not allowable as a deduction u/s 37 - as argued provision represents the excess of estimated contract expenditure over the estimated contract revenues - HELD THAT:- The provision of this year would be nothing but an ascertained liability / probable loss for the assessee. It could not be said that the provision was not made on a scientific basis. In our considered opinion, both the lower authorities have erred in appreciating the fact that revenue from the contract has also been recognized on percentage of completion basis only. The case laws as cited by Ld. AR duly support our view. The case law of FLSmidth v DCIT [ 2023 (1) TMI 177 - MADRAS HIGH COURT] is distinguishable on facts. Upon perusal of Para-28, it is clear that in that case the assessee could not explain as to how the total contract costs would exceed total contract revenue despite being specifically asked to explain. The assessee merely relied on AS-7. However, in the present case, the assessee has recognized the revenue as well as expenses on same methodology. The claim is supported by computations / workings. The provision has been reversed in subsequent years as per estimation made in subsequent year. Therefore, this case law would not render any assistance to the case of the revenue. The case law of Hon'ble Delhi High Court in Triveni Engg Industries Ltd [ 2010 (11) TMI 90 - DELHI HIGH COURT] is on similar facts. The assessee recognized the income from the projects and also made provision for expenses to be incurred up-to the stage of completion. AO termed the provision as contingent liability and accordingly, disallowed the same. However, Hon ble Court confirmed the order of Tribunal allowing such deduction. Therefore, we would hold that the impugned provision would be an allowable deduction. The question of adding the same to Book-Profit do not arise. Assessee appeal allowed. 2024 (9) TMI 478 Revision u/s 263 v/s rectification u/s 154 - AO failed in correctly work out undisclosed income after considering correct sale value of land as per Form 26A - claim of the assessee that one of the land in Form 26AS does not pertain to him but pertains to Vaibhav Corporation Pvt. Ltd. requires further verification at the end of the AO but he failed to make correct addition u/s.68 and failed to consider the cash deposit thereby under assessment of income HELD THAT:- As clearly stated by the assessee with proper records before Ld. PCIT explaining that the sale of property was done by the Vaibhav Corporation Pvt. Ltd. and not by the assessee and relevant Form 26AS that of the company was also produced confirming the TDS @ 1% made by the purchaser of the property. Further from perusal of the Sale Deed, the assessee name is nowhere reflecting in the registered Sale Deed dated 28.03.2019. In addition to this the letter dated 04.01.2024 from Sub Registrar, Vadodara has stated that there was no transaction of the property on 28.03.2019 by the assessee. When such evidences are filed by the assessee before Ld. PCIT, he ought to have dropped the Revision proceedings. However he set aside the issue back to the file of AO for verification which in our considered view against the provisions of section 263 more so when the assessment order is neither erroneous nor prejudicial to the interest of Revenue. Incorrect calculation of income is liable to be rectifiable u/s 154 of the Act and not by invoking Revision proceeding u/s. 263 of the Act. Thus the Revision order passed by PCIT is hereby liable to be quashed. Appeal filed by the Assessee is hereby allowed. 2024 (9) TMI 477 Rejection of approval u/s. 80G(5) - wrong selection of the section code in the application - application filed in Form No.10AB rejected holding it to be infructuous and also barred by limitation, observing that the commencement of activities was much earlier - HELD THAT:- Assessee, being a Trust registered even prior to 31.03.2021 and thereafter applied for registration, as mentioned above on provisional basis. In our considered opinion, though the assessee had committed a mistake in selecting the wrong section code while making an application at the first instance, however, for such a mistake, the permanent registration cannot be denied by the respondent. It cannot be disputed that CBDT extended the due date for filing of Form Nos.10A/10AB under the Act and as on the date, it stood extended till 30/06/2024 by Circular No.07/2024. It occurs to our mind that it would have been better, if the respondent cross-verifies the details submitted by the assessee at the earliest point of time of issuance of provisional certificate and should have issued a notice at that time by pointing out the wrong selection of section code by the assessee, so that the assessee could have rectified the mistake. We, therefore, taking a pragmatic view of the matter, deem it just and proper to remand the issue to the file of the learned CIT(E) to permit the assessee to rectify the mistake in submitting the application form and to consider the application of assessee for grant of permanent registration. Appeal of assessee allowed for statistical purposes. 2024 (9) TMI 476 Denial of exemption claimed u/s. 11 - ROI as well as Form No.10B had been filed by the assessee after the due date specified - HELD THAT:- As far as the delay in filing of Form no. 10B is concerned the CIT(E) has condoned the delay for filing of Form 10B vide his order dated 06/08/2024. Therefore, in our considered opinion, on this issue there should not be any denial of exemption u/s 11 of the Act. Delay in filing of ROI - Section 12A(1)(ba) of the Act stipulates that, to claim exemption u/s 11 of the Act, the return must be filed in accordance with the provisions of section 139(4A). However section 12A(1)(ba) have been inserted w.e.f. 01/04/2018 i.e. applicable w.e.f. A.Y. 2018-19 only and hence the same is not applicable to the year under consideration. Therefore, due to delay in filing of ROI for the year under consideration also, there cannot be any denial of exemption u/s.11 of the Act. Hence we are of the considered opinion that the assessee is eligible for exemption u/s. 11 - Appeal of the assessee allowed. 2024 (9) TMI 475 Disallowance made u/s 14A r.w.s. 8D(2)(iii) - suo moto disallowance made by the assessee - HELD THAT:- If suo moto disallowance of the expenditure has been made by the assessee and basis thereon has been explained by the assessee, then AO ought to have recorded an objective satisfaction with the cogent reasons as to why such disallowance made by the assessee is incorrect and thereafter resort to proceed with the computation mechanism provided in Rule 8D(2) of the Rules. This is mandate of law provided in section 14A(2) of the Act r.w. Rule 8D(1) of the Rules. Since the same is conspicuously absent in the instant case, we hold that the disallowance made by the learned AO under section 14A of the Act deserves to be deleted. Hence, we hold that only a sum being the suo moto disallowance made by the assessee in the return of income under section 14A should be sustained. Accordingly, Ground Nos.1 and 1.1 raised by the assessee are allowed. Disallowance of expenses u/s 14A r.w. Rule 8D of the Rules while computing the book profits under section 115JB - Special Bench of Delhi Tribunal in the case of Vireet Investments Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI ] had categorically held that computation mechanism provided in Rule 8D(2) of the Rules cannot be imputed in the book profit computation under clause (f) of Explanation 1 to section 115JB(2) - direct expenses identified by the assessee in the sum as explained attributable to the earning of exempt income requires to be disallowed. Hence, we direct the learned AO to disallow addition u/s 14A while computing book profits under section 115JB. Nature of expenditure - disallowance of painting expenditure - revenue or capital expenditure - HELD THAT:- As relying in assessee s own case for A.Y. 2008-09 [ 2024 (8) TMI 802 - ITAT DELHI ] we hold that cost of paintings is to be considered as Revenue expenditure and accordingly ground no. 3 is allowed. 2024 (9) TMI 474 Addition of cash credit in the books of the assessee firm u/s. 68 r.w.s. 115BBE - assessee failed to prove the genuineness and source of funds - partners introduced capital through the banking channel - addition in the hands of Partners v/s Partnership firm. HELD THAT:- As decided in Vaishnodevi Refoils Solvex [ 2018 (1) TMI 861 - GUJARAT HIGH COURT] when the Assessing Officer is of the view that creditworthiness of Partners who introduced capital had not been proved in that case, enquiry and additions had to be made in the hands of the Partners and not against Partnership firm. This view of Gujarat High Court was confirmed by Hon ble Supreme Court, [ 2018 (7) TMI 651 - SC ORDER] . Thus the findings arrived by Ld. CIT(A) does not require any interference and further Revenue could not place any materials in support of its ground. Decided against revenue. Customs 2024 (9) TMI 473 Mandamus to issue speaking order in respect of Bills of Entry - petitioner has sent a representation asking the respondent to pass speaking orders, which was not done - alternate remedy under Section 121(b) of the Customs Act, 1962 - principles of natural justice - HELD THAT:- A reference was made to the decision of the Hon'ble Supreme Court in ASSISTANT COLLECTOR OF CENTRAL EXCISE, CHANDAN NAGAR VERSUS DUNLOP INDIA LIMITED AND OTHER [ 1984 (11) TMI 63 - SUPREME COURT ], wherein it has been held 'Surely matters involving the revenue where statutory remedies are available are not such matters. We can use take judicial notice of the fat that the vast majority of the petitions under Article 226 of the Constitution are filed solely for the purpose of obtaining interim orders and thereafter prolong the proceedings by one device or the other. This practice certainly needs to be strongly discouraged.' The petitioner deserves a chance in the light of Section 17(5) of the Customs Act, 1961. As per Section 17(5) of the Customs Act, 1962, where any re-assessment done under sub-section (4) is contrary to the self-assessment by an importer or exporter, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be. Petition allowed. 2024 (9) TMI 472 Demand confirmed against 177 shipping bills - confirmation of demand on the ground that the petitioner has not produced relevant bank realization certificates for the drawback claimed by the petitioner on the export made by the petitioner between 2006-2007 - no clear discussion to the response of the petitioner - violation of principles of natural justice - HELD THAT:- The impugned order is set aside and the case is remitted back to the respondent to pass a fresh order on merits and in accordance with law. It is made clear that the petitioner shall co-operate to the respondent and furnish all the documents in respect of the exports made under the respective shipping bills for which relief was granted to the petitioner under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. This writ petition stands disposed of. 2024 (9) TMI 471 Jurisdiction of Commissioner to process the refund claim - Seeking direction to transfer of the claim to the jurisdictional Commissioner, who was the Commissioner, Airport - Refund of Special Additional Duty (SAD). Jriscition of Refund claim - HELD THAT:- The grievance expressed is as regards the specific observation of the Tribunal to the effect that 'the Commissioners of Customs in Chennai and their A.C./D.C. of Customs have concurrent jurisdiction over the Ports as well as the Airports' - On an appreciation of the Commissionerates and charges stipulated in Clause 7 of Notification No.15/2002, the observation of the Tribunal appears incorrect. The Commissionerates of Seaport and Airport are clearly demarcated and delineated and their charge would be restricted to those matters that fall within their competence only. There can thus be no assumption of jurisdiction by officers of Commissionerate in regard to matters falling with the jurisdiction of the other Commissionerate. The first substantial question of law is thus answered in favour of the Revenue. Transfer of the refund claim - HELD THAT:- It is always open to a superior authority to direct transfer of an appeal from one authority to another based on the competence of the authority to whom it is transferred to hear the matter - In the present case, since the matter related to refund to be obtained from the Airport Commissioner, the matter had rightly been directed to be transferred to the Commissionerate Airport and there ought to have been no quarrel put forth by the Revenue on this aspect - there shall be no adverse repercussions by virtue of the present order, on any matter seeking refund of SAD. The substantial question of law is answered in favour of the respondent assessee. Appeal disposed off. 2024 (9) TMI 470 Penalty under Regulation 22 of Customs Broker Licensing Regulation (CBLR), 2013 - violation of Regulation 17(9) of CBLR, 2013 - cross examination as per Regulation 20(4) of the CBLR, 2013 - whether the Appellant can be penalized for the omissions of its employees as held in the impugned order? - HELD THAT:- It is an admitted fact that as per the finding of the Inquiry officer and the Adjudicating authority, the Appellant is not directly involved in the act or omission on the part of their authorized signatory at Chennai. Further there is no allegation that they have got any undue financial benefits by abetting the illegality as alleged from the importer. Opportunity for extending cross examination as per Regulation 20(4) of the CBLR, 2013 - HELD THAT:- As per the evidence on record, to proceed against the Appellant, statements of different persons were relied by the adjudication authority. As per the judgment of the Hon ble High Court of Telangana in the matter of M/s Shasta Freight Services Pvt Ltd [ 2019 (9) TMI 363 - TELANGANA AND ANDHRA PRADESH HIGH COURT] , Regulation 20(4) of the CBLR is carefully worded. The entitlement of the Customs broker to cross examine is confined only to person examined in support of the grounds forming a basis of proceedings . Thus if statements of different persons were recorded during the investigation, Adjudication authority ought to have given an opportunity for cross examination before relying on such statements. Thus, condition precedent under Regulation 20(4) of the CBLR for considering the request of the Customs Broker for cross examination should have been satisfied. In the present case, the entire proceedings are initiated based on the statement of employees and agents of the importer. Facts being so, to find out the genuiness of the statement, the Inquiry officer/Adjudication authority ought to have extended the opportunity for cross examination as sought by the Appellant. Thus the proceedings in impugned order are in violation of Regulation 20(4) of the CBLR, 2013 and are not sustainable. Appeal allowed. 2024 (9) TMI 469 Reduction of redemption fine and penalty - Importation of Green Peas and Yellow Peas - imports made during the period 22.10.2018 to 28.12.2018 - challenge to notification extending the restriction up to 31.12.2018 - HELD THAT:- In this case the Ld. Authorized Representative has relied on the decision of this Tribunal in the case of M/S SHRI AMMAN DHALL MILL VERSUS THE COMMISSIONER OF CUSTOMS [ 2021 (1) TMI 1110 - KERALA HIGH COURT ]. In the said case the appellant did not challenge the notification and imports took place on 23.06.2020 which was almost two years of the operation of the N/N. 37/2015-2020 dated 28.09.2018. This Tribunal held that the redemption fine with penalty imposed by the Adjudicating Authority is correct. But in this case, the appellant has challenged the notification and after litigation ,initially, the operation of the notification was stayed by the Hon ble High Court of Rajasthan and thereafter the validity of the notification was upheld by the Hon ble Apex Court in the case of UNION OF INDIA AND OTHERS VERSUS AGRICAS LLP AND OTHERS ETC. [ 2020 (8) TMI 705 - SUPREME COURT ]. In the impugned order also, the Ld. Commissioner (Appeal) has considered the submission made by the Respondent and proceeded to hold that redemption of final penalty are on higher side and reduced the redemption from penalty. But it is found that although Ld. Commissioner (Appeal) has reduced the redemption fine and penalty but in the facts and circumstances of the case as appellant being regular importer and as the earlier notification made the restrictions only up to 30.06.2018 which was extended by notification dated 28.09.2018 which means that there is a gap of three months wherein restriction was not in operation for import of green peas. In that circumstances, the appellant has imported the goods from the foreign suppliers which were landed after extending restrictions. Further, the respondent approached the Hon ble High Court and challenged the extention of restriction which was stayed by the Hon ble High Court, in that circumstances, although the goods are restricted as held by the Hon ble Apex Court but for imposing redemption fine and penalty, a sympathetic view is to be taken. The appeal filed by the Revenue and the cross objection filed by the Respondent are disposed of. 2024 (9) TMI 468 Enhancement of redemption fine and penalty - Valuation of imported goods - imported old and used worn clothing, completely fumigated - restricted item or not - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [ 2018 (11) TMI 625 - CESTAT MUMBAI ], wherein this Tribunal has observed ' the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. In the light of the admitted failure to comply with the licensing requirements, we uphold the confiscation of the goods under Section 111(d) of Customs Act, 1962. However, it is our opinion that the ends of justice would be served by reducing the redemption fine to 10% of the ascertained value and penalty to 5%.' The redemption fine and penalty imposed on the respondents by the appellate authority is sufficient to meet the ends of justice. Therefore, the redemption fine and penalty confirmed by the appellate authority are upheld. There are no infirmity in the impugned order and the same is upheld - appeal of Revenue dismissed. Corporate Laws 2024 (9) TMI 467 Seeking interim stay of the LOC and for permission to travel abroad - HELD THAT:- The merits of the opening of the LOC against the petitioner, is a subject matter of challenge in the main Petition, which shall be considered thereunder. By way of the present Application, the permission has been sought to travel to New York and Dubai from 16.08.2024 to 05.09.2024, on the ground that the petitioner intends to meet his daughter in Dubai and also to facilitate the admission of his son in New York. Insofar as meeting the son and daughter are concerned, there is no restriction on the children to travel to India, to meet the parents. For this purpose, there is no need for the petitioner, to travel to Dubai. The learned Special Judge, has rightly observed that no cogent reasons have been given by the petitioner, for travelling abroad. The Judgments which have been relied upon by the petitioner, are of little assistance and need not be considered at this stage, for the simple reason that the purpose for travel itself has not been justified. Application dismissed. PMLA 2024 (9) TMI 466 Seeking quashment of FIR - powers of the authorities to summon - Jurisdiction of the respondents from invoking any provision of PMLA against the petitioner. HELD THAT:- The offence has not been wiped off in entirety in respect of the scheduled offence. The hands of the competent authority under the PMLA cannot be tied. In the event of considering the relief as such sought for in the present Writ Petition, the very objectives of the PMLA will be defeated. The statutory powers conferred on the competent authorities under the PMLA cannot be curtailed or the petitioner is entitled to seek any order in the nature of an injunction restraining the authorities from issuing summon/notice for the purpose of conducting enquiry or to investigate the offence of money laundering under the PMLA. Mere quashment of the F.I.R in respect of the petitioner alone in predicate offence would not wipe off the offence of money laundering and still the authorities are empowered to conduct further investigation, if required, or to trace out proceeds of crime under Section 2(1)(u) of the PMLA. The very objective of the PMLA to prevent money laundering and to provide power for confiscation of property cannot be taken away by issuing a Writ of Mandamus to forbear the authorities from summoning any person under the PMLA. Such an omnibus direction if issued would undoubtedly defeat the very purpose and objective of the PMLA. The present Writ Petition has been filed mainly on the ground that the victims have received money and filed affidavits stating that they have received the money paid by them to the accused or to the institution. Based on the affidavit, the High Court quashed the proceedings in compliance with the directions issued by the Hon'ble Supreme Court of India. Mere repayment of money involved in a crime would not wash away the offence of money laundering under the PMLA, if any committed - The authority of Law conferred under the PMLA to the competent authorities cannot be taken away by issuing a Writ of Mandamus. There are no reasons to consider the relief as such sought for in the Writ Petition since such prayer is not entertainable in law. Hence, the Writ Petition is dismissed. Service Tax 2024 (9) TMI 465 Maintainability of petition - availability of equally efficacious remedy of appeal - Confirmation of service tax in addition to the penalty under Section 76 and 77 (2) of the Finance Act, 1994 - HELD THAT:- It is not required to interfere in the matter. SLP dismissed. 2024 (9) TMI 464 Refund of service tax paid - Direction to respondent to accept the refund application filed by the petitioner in Form R and grant the refund along with interest - relevant date and time limitation u/s 11B of the Central Excise Act, 1944 - Principles of unjust enrichment - HELD THAT:- A refund of service tax paid in excess if any, has to be made within a period of one year from the relevant date as specified under Section 11 B of the Central Excise Act, 1994 as it would apply to a refund of Central Excise duty under Section 11B of the Central Excise Act, 1944. The decision of the Hon'ble Supreme Court in Union of India vs. ITC Ltd., [ 1993 (7) TMI 363 - SUPREME COURT ] which was relied by Division Bench of this Court in the case of M/s.3E Infotech, 11 B/1, 2nd Floor, New Street, Parvathipuram, Nagercoil, Kanyakumari [ 2018 (7) TMI 276 - MADRAS HIGH COURT ] is primarily an authority for unjust enrichment under Section 11B of the Central Excise Act, 1994. A mandamus can be issued only when there is a corresponding statutory duty on the respondent to consider the petitioner s refund claim beyond the period of limitation. Since, refund claims have to be filed beyond the period of limitation prescribed under the Scheme of the Finance Act, 1994, incorporating Section 11B of the Central Excise Act, 1994, no case is made out for issuance of a mandamus. In this petition, refund claim has been filed long after expiry the period of limitation under Section 11-B of the Central Excise Act, 1944 as made applicable to Service Tax under Finance Act, 1994. Therefore, there is no merits in the present writ petition. Petition dismissed. 2024 (9) TMI 463 Monetary limit of appeals - Classification of services - business of in-flight catering services to various Airlines - Airport Service or not - period w.e.f. 1.7.2012 (negative list). Whether these appeals fall within the monetary limit of appeals to be filed by the Department before Tribunal? - HELD THAT:- The amount involved in each appeal is less than Rs.50 lakhs. As per the litigation policy, these appeals fall within the monetary limits. The Ld. A.R has relied upon the decision in the case of CCE and Customs, CGST Jaipur-I Vs M/s.Century Metal Recycling Pvt. Ltd. [ 2024 (3) TMI 1245 - CESTAT NEW DELHI ]. The said decision has been rendered in a customs appeal. On perusal of the circular with regard to litigation policy, it is found that there are no intention on the part of Board to consider that the amount involved in all the appeals filed by the department has to be added together to ascertain the monetary limit. The number of appeals to be filed by a litigant is not a choice but on the basis of the procedure rules. If each appeal filed by department though falls within monetary limit is to be considered on merits by clubbing the amount involved in all the appeals against a particular respondent, it would result in chaos and injustice as there would be no uniformity. If the appeals which fall within the monetary limit and which are above the monetary limit are to be clubbed and taken together on merits only, it would be injustice to the respondent when compared to a single appeal filed by department on the same issue against another assessee in which amount involved is less than Rs.50 lakhs. To avoid such a situation, in our view, the litigation policy has to be given effect to - these four appeals fall within the monetary limit for appeals to be filed by Department before Tribunal. Classification of service - main contention put forward by Revenue is that the services are provided inside the airport and therefore would fall within the definition of Airport Services as under Section 65 (105) (zzm) of the Finance Act, 1944 - HELD THAT:- There is nothing in the definition which says that the services provided in relation to airlines would also be covered in the definition. The definition says that the services provided by Airport Authority or a person authorized by it or any other person having charge of management or control of an airport are taxable under this category. In the present case, the respondent is not authorized by Airport. The original authority has correctly analyzed the definition and also the CBEC circular dt. 17.9.2004 to hold that respondent is not authorized for providing laundry service - the activity would not fall within the definition of Airport Services for the period prior to 1.7.2012. There is no merit in the appeals filed by the Department - The impugned orders are sustained - All appeals are dismissed. 2024 (9) TMI 462 Taxability - providing Corporate Guarantee without any consideration - service tax on profit/mark up. Taxability of providing Corporate Guarantee without any consideration - HELD THAT:- The issue was dealt at length by this Tribunal in the case of Commissioner of CGST Central Excise Vs Edelweiss Financial Services Ltd [ 2022 (2) TMI 1359 - CESTAT MUMBAI ] wherein it was held that any activity must, for the purpose of taxability under Finance Act, 1994, not only, in relation to another, reveal a provider , but also the flow of consideration for rendering of the service. In the absence of any of these two elements, taxability under section 66B of Finance Act, 1994 will not arise. It was held that there is no consideration insofar as Corporate Guarantee issued by respondent on behalf of their subsidiary companies is concerned. This decision of the Tribunal was upheld by the Supreme Court [ 2023 (4) TMI 170 - SC ORDER ] - demand set aside. Taxability of service tax on profit/mark up - HELD THAT:- The issue on taxability of service tax on profit/mark up is no more res integra as the same has been decided in catena of decisions, the latest being the judgment in the case of M/s Tiger Logistics (India) Ltd., vs Commissioner of Service Tax-II, Delhi [ 2022 (2) TMI 455 - CESTAT NEW DELHI ] where it was held that ' To earn this profit, he also takes the risk of being unable to sell. In the appellant s case, if the space on the ships which it bought cannot be sold to its customers fully, or due to market conditions, or is compelled to sell at lower than purchase price, the appellant incurs loss. In a contrary situation, it gains profits. This activity is a business in itself on account of the appellant and cannot be called a service at all. Neither can the profit earned from such business be termed consideration for service.' - demand set aside. Appeal of assessee allowed. Central Excise 2024 (9) TMI 461 Extended period of limitation - jurisdiction of the authorities - question of fact or question of law - Appellant would submit that if the point of limitation involves jurisdiction of the authorities, then, the findings, though mixed in character, raise a substantial question of law - it was held by the High Court that ' The attempt of the Assessee is nothing but to seek a reappreciation and reappraisal of a factual finding with an intention to delay meeting the demand. The attempt of this nature does not result in the Appeal being entertained by this Court. That is because it raises no substantial question of law.' HELD THAT:- The High Court has found that there is no substantial question of law which arises in this special leave petition. The view taken by the High Court is agreed upon - SLP dismissed. 2024 (9) TMI 460 Maintainability of petition - low amount involved in the appeal - Utilisation of CENVAT credit amounting towards payment of BED and SED on the final products - Rule 3 (7)(b) of the CENVAT Credit Rules, 2004 - HELD THAT:- In view of the latest circular of the Ministry of Finance, Government of India dated 06.08.2024, this special leave petition is dismissed owing to the fact that the subject matter of the dispute is less than Rs. 5 Crore, keeping open the question of law, if any, which arises in this matter. Application disposed off. 2024 (9) TMI 459 Doctrine of merger - Forum shopping - Jurisdiction - appropriate forum - requirement to file writ petitions before the High Courts within whose jurisdiction the original adjudication orders were passed - It is respondents contention that petitioners should file writ petitions challenging the orders of the Revisionary Authority before the Madras High Court, Karnataka High Court, Goa Bench of this Court or the Nagpur Bench of this Court. HELD THAT:- The decision of the Four Judge Bench in Sri Nasiruddin [ 1975 (8) TMI 126 - SUPREME COURT ] directly applies to the facts and circumstances of the case at hand. The question in Sri Nasiruddin (Supra) was whether a writ against an appellate order would lie before the Lucknow Bench or the Allahabad Bench of the Hon ble Allahabad High Court in cases where the original lis arose in Allahabad but the seat of the appellate forum was in Lucknow - The Court held that if the cause of action arises wholly or in part at a place within the specified Oudh areas, the Lucknow Bench will have jurisdiction. If the cause of action arises in part within the specified areas in Oudh it will be open to the litigant, who is the dominus litis, to have his forum conveniens. The litigant has the right to go to a Court where part of his cause of action arises. In such cases, it is incorrect to say that the litigant chooses any particular Court. The choice is by reason of the jurisdiction of the Court being attracted by part of cause of action arising within the jurisdiction of the Court. This has been reiterated in Kusum Ingots Alloys Ltd. [ 2004 (4) TMI 342 - SUPREME COURT ] wherein the Hon ble Supreme Court held keeping in view the expressions used in Article 226 (2) of the Constitution of India indisputably even if a small fraction of cause of action accrues within the jurisdiction of the High Court, the High Court will have jurisdiction in the matter. However, even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. Therefore, since the Revisionary Authority is located within the territorial jurisdiction of the Principal Seat of this Court, petitioner has the option to file the petitions here or before the High Court within whose jurisdiction the original adjudication occurred. Petitioners have the right to file the petitions before the Principal Seat of this Court. Hence, on this ground alone, the present petitions are maintainable before the Principal Seat of this Court. Prior to the amendment of Article 226 and the insertion of Article 226 (2), the Hon ble Supreme Court has specifically held that on account of the principle of the doctrine of merger, a writ against an order of the Appellate Authority, would lie only before the High Court within whose territorial jurisdiction the Appellate Authority is located. This principle would continue to hold the field today. Vide the insertion of Article 226 (2), jurisdiction was bestowed upon the High Courts to issue writs to authorities located outside their territorial jurisdiction as long as the cause of action arose within their territorial jurisdiction - this would not in any way denude the powers of the High Court within whose territorial jurisdiction the Appellate Authority is located to issue writs. The fact remains that the appellate order is a significant part of the cause of action for petitioner. The present petitions are maintainable before the Principal Seat of this High Court since the orders of the adjudicating authorities have merged into the impugned orders of the Revisionary Authority who is located in Mumbai. This Court has jurisdiction in the present petitions - the petitions stand adjourned to 6th September 2024 for consideration on merits. 2024 (9) TMI 458 Dismissal of appeal on the ground that there is no justification for the delay - rejection of plea for refund - HELD THAT:- A detailed affidavit setting out reasons for seeking condonation was filed before the CESTAT. The Tribunal however declined to condone the delay dismissing the appeal in limine, as against which the present appeal is filed. On a perusal of the reasons ascribed to the delay as well as for the reason that the petitioner is a Cooperative Society, which agitates the grant of refund of Rs. 32.00 lakhs (approx.), this Writ Petition is allowed setting aside the impugned order of the CESTAT and restoring the matter to the file of the CESTAT. Since the appeal itself is of the year 2007, the date of hearing of the appeal is fixed as 09.09.2024 and the CESTAT is requested to take the appeal in E/Appeal No.394 of 2007 for hearing on that date. Petition allowed. 2024 (9) TMI 457 Denial of benefit of N/N. 8/2003-CE dated 1st March 2003 - exemption to clearances from small-scale industry (SSI) units upto the threshold of the next slab of assessable value for the period from November 2012 to May 2013 - the brandname Kwality used for marketing of cakes and pastries manufactured by them did not belong to the assessee. Recovery of differential duty u/s 11A of Central Excise Act, 1944 along with interest under section 11AA of Central Excise Act, 1944 besides imposing penalty u/s 11AC of Central Excise Act, 1944 - period from October 2010 and March 2011. HELD THAT:- The issue stands settled by the decision of the Tribunal in their case [ 2016 (10) TMI 136 - CESTAT MUMBAI ]. On the last occasion, the Tribunal, taking note of the facts and circumstances, had remanded the matter back to the original authority. Thus, the impugned order is set aside - matter remanded back to the original authority for decision in accordance with the law as settled by judicial determination. 2024 (9) TMI 456 Eligibility of Cenvat credit on the invoices issued by ISD - Duty paying invoices - time limitation. Eligibility of CENVAT Credit - HELD THAT:- The first Appellate Authority has not disputed the veracity of the fact that the credit was availed on the ISD invoices, but again went on the fact that the Adjudicating Authority has given the observation that some do not contain the service tax no. [registration number] while some of them contain the wrong STC No. It is the case of the Appellant that the issue was not whether such ISD invoices were deficient but the issue was whether the service providers such as GTA was required to be registered and required to make payment of service tax or whether registration number of the banks was available or not. The requirements for distributing credit by the ISD unit have been fully met in this case, as evidenced by the invoices provided, which include the registration numbers of service providers along with other details. Therefore, the obligation to provide registration numbers is unequivocally fulfilled. This fact has not been disputed in the impugned orders - Additionally, reliance is placed on the case of M/S RAJENDER KUMAR ASSOCIATESS VERSUS COMMISSIONER OF SERVICE TAX, DELHI-II [ 2020 (11) TMI 621 - CESTAT NEW DELHI] where it was held that once the requirement of relevant rules for issuance of invoices is met, credit cannot be disallowed on the ground that the ISD was not registered. The mandate to obtain ISD registration is not prescribed in law for distribution, and thus, denying the Credit based on allegation that the New Delhi unit was not registered as an ISD unit for three invoices lacks statutory backing and should not impede the Appellant s vested rights. Extended period of limitation - HELD THAT:- Section 11A (1) of the Central Excise Act states that the demand could be raised against the Assessee in cases of default only within a period of one year. The proviso extended the normal period of limitation only in cases where there is fraud, suppression, or misstatement of facts on the part of the Assessee. The Appellant has declared all the relevant details pertaining to availment of credit in the returns filed thereby bringing all the information to the knowledge of the Department - It only stated that the Appellant did not take care properly without alleging that such credit was taken intentionally on incomplete documents. Hence, the extended period cannot be invoked as has been held in the case of COMMNR. OF CENTRAL EXCISE, MUMBAI-III VERSUS M/S. ESSEL PROPACK LTD. [ 2015 (9) TMI 1084 - SUPREME COURT] . The impugned order cannot be sustained and is accordingly set aside - Appeal allowed. 2024 (9) TMI 455 Classification of HDP/ PP Bags - appellants pleaded that even if the product manufactured by them falls under Chapter 39, no duty is payable on goods which were supplied against H-Form - for CENVAT credit - cum- duty benefit - HELD THAT:- The entry 3923 covers articles for conveyance or packing of goods; however, it is important to note that it does not talk about the process of manufacture of sacks; the impugned goods are manufactured by weaving; it is pertinent to note that HSN Explanatory Notes under Heading 3923 clarifies that the Heading excludes inter alia, household articles such as dustbins, and cups which are used as tableware or toilet articles and do not have the character of containers for the packing or conveyance of goods, whether or not sometimes used for such purposes (heading 39.24), containers of heading 42.02 and flexible intermediate bulk containers of heading 63.05. Hon ble High Court of Gujarat in latest judgment in the case of M/s CTM Technical Ltd. [ 2020 (12) TMI 1100 - GUJARAT HIGH COURT ] has gone into the issue in a detailed manner and has come to the conclusion that if the sacks/ bags are woven from plastic strips, they will be classifiable under Heading 6305. The impugned bags and sacks having been manufactured by weaving material derived from HDPE/ PP strips merits classification under Heading 6305 - even otherwise, without prejudice to the above classification, the appellants request for giving benefit of CENVAT credit, export and cum- duty is also acceptable - When the duty itself is held to be not chargeable, the question of interest and penalties does not arise and the same have to set aside. Appeal allowed. 2024 (9) TMI 454 CENVAT Credit - Business Support Service - denial on the ground that the BSS services have no nexus with the output service/manufacturing activities of the appellant - Revenue took a stand after amendment of Rule 2(l) of Cenvat Credit Rules, 2004 with effect from 01/04/2011, wherein Business activities have been excluded from the definition of input service - HELD THAT:- Based on the Show Cause Notice issued by the Revenue to Tata Motors they have classified the entire group of services put together as Business Support Service and have raised their Bills under the category of BSS. There is nothing to indicate that Revenue had any objection towards such classification by Tata Motors and officers were accepting their Returns towards such services. Therefore, as a whole Tata Motors have provided the service of BSS to the Appellant. After this, it is to be concluded as to whether such service has any nexus with the manufacturing/output service of the appellant. This issue has also been considered by this Bench in M/S. HINDALCO INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [ 2023 (6) TMI 457 - CESTAT KOLKATA] where it was held that ' the services rendered by the ABMCPL is rightly classifiable under the category of Business Support Service and ABMCPL has rightly paid Service Tax under the said category. The service tax paid by ABMCPL has been rightly distributed to their group companies, including Appellant. 15. The Appellant has raised the issue of limitation. They stated that the period involved in the Notice is from March 2007 to March 2012 whereas the Show cause Notice was issued on 22.02.2012 and 29.06.2012.' Thus, the issue is no more res integra - the impugned order is set aside - appeal allowed. Indian Laws 2024 (9) TMI 453 Dishonour of cheque - legally enforceable debt or not - acquittal of accused - rebuttal of presumption arising in favour of the Petitioner under Sections 118 and 139 of NI Act - HELD THAT:- Appellate Court has, no doubt, wide powers to re-appreciate the evidence in an appeal against acquittal and come to a different conclusion, on facts and law, but there is no gainsaying that this power must be exercised with due care and caution since the presumption of innocence at the start of the trial is strengthened by acquittal of the accused by a judicial order. The Supreme Court in GHUREY LAL VERSUS STATE OF U.P [ 2008 (7) TMI 951 - SUPREME COURT ] , elucidated and crystallized the principles that the Courts are required to keep in mind as guiding light, when deciding an appeal against a judgment acquitting the accused held that ' The accused is presumed innocent until proven guilty. The accused possessed this presumption when he was before the trial Court. The trial Court's acquittal bolsters the presumption that he is innocent.' It is a settled law that in matters relating to dishonour of cheques, Courts have to consider whether the ingredients of Section 138 of NI Act are made out and whether the accused is able to rebut the statutory presumption under Section 139 of NI Act. In light of the evidence on record, Appellate Court concluded that the defence of the Respondent was a plausible one that he had given the cheque of Rs. 8 lacs for investment and he was able to successfully rebut the presumption under Sections 118 and 139 of NI Act and that no evidence came on record to substantiate that Petitioner had advanced a loan of Rs. 14 lacs to the Respondent. This Court finds no infirmity in this conclusion and in this context, the judgment of the Supreme Court in Kundan Lal Rallaram v. The Custodian, Evacuee Property Bombay, [ 1961 (3) TMI 100 - SUPREME COURT] perused, where the Supreme Court observed that when the creditor failed to produce his account books, the Court can raise a presumption of the fact under Section 114 of the Indian Evidence Act that the evidence if produced would have shown the non-existence of the consideration. Thus, no interference is warranted in the findings and conclusions of the Appellate Court in the impugned judgment dated 09.06.2016, wherein the defence set up by the Respondent was found to be a probable one on the touchstone of preponderance of probabilities and thus no ground for grant of leave to appeal is made out. Petition seeking leave to appeal is hereby dismissed.
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TMI Tax Updates - e-Newsletter September 11, 2024

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GST

Lack of fair hearing before GST penalty order; distinct order for each return - HC dismissed the writ petition as misconceived.

Non-compliance of mandatory Section 83(1), CGST Act leads to arbitrary provisional attachment order; reasons a must.

Tax liability dispute: Interest levy despite credit ledger payment challenged. Court unable to examine merits due to incomplete records.

Tax dispute over GSTR mismatch & excess ITC claims; HC remands case for fresh review after 10% disputed tax paid.

Tax credit denial overruled: Manpower services eligible for ITC as per GST circular.

Tax return discrepancy: Court orders fresh hearing after paying 10% disputed amount as security.

Income Tax

Tax liability below threshold limits appeal dismissal as per Circular No. 17/2019.

Tax Assessment Notice Validity: Faceless Regime Violation Renders Reopening Invalid.

Petitioner's application for settlement under Income Tax Act to be reconsidered by IBS; High Court quashes rejection order.

Firm's low profits can't trigger reassessment without seeking explanation beforehand.

Refund interest adjustment: Refund to adjust interest first, then principal. Fair methodology.

Tax Authority's Error: Assessment Order Against Non-Existent Company After Merger Nullified.

Tax authorities erroneously disallowed deduction for estimated contract losses, ignoring the scientific basis and revenue recognition methodology.

Income Underassessment Due to Incorrect Computation and Failure to Verify Evidence.

Customs

High Court examines jurisdiction over refund claim, directs transfer to Airport authority for competence.

Custom broker's license penalty violated due process; statements used without cross-exam opportunity.

Importer's legal battle over pea import restrictions eased.

Worn clothing imports seized for license violation; fines reduced for substantial compliance.

Indian Laws

Cheque dishonor case acquittal upheld - plausible defense of investment, not loan. Petitioner failed to prove Rs.14L loan claim.

PMLA

Money laundering law allows authorities to investigate, even after repayment or quashing predicate offence.

Service Tax

Time-barred service tax refund claim cannot be entertained. Limitation period of one year from relevant date u/s 11B must be adhered to.

Corporate guarantees sans consideration not taxable, ruling of Supreme Court followed.

Central Excise

Tax dispute jurisdiction clarified: Petitioners can challenge Revisionary Authority orders before High Court where original adjudication or Authority is located.

Woven plastic bags not in Heading 3923, fall under 6305; no duty on H-Form CENVAT supply.

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TMI Tax Updates - e-Newsletter
September 11, 2024