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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter September 28, 2024 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Highlights / Catch Notes GST Property re-attachment after legal expiry held invalid, bank accounts to be unfrozen. Petitioners challenged the re-attachment of their third account by the Department after the initial attachment expired by operation of law u/s 83(2) of the Act. The Court held that once the attachment expires, the Department lacks jurisdiction to re-attach the same account. Consequently, the Court directed lifting of the attachment made on 30.08.2024 on petitioners' third account and ordered the account to be defreezed, as the re-attachment was without legal authority. Visit to Get Source GST Rules: Blocking ITC Ledger Only for Available Credit, Not Past Utilization. This is a summary of a court judgment regarding the interpretation of Rule 86A of the Central Goods and Services Tax (CGST) Rules, which deals with the blocking of input tax credit (ITC). The key points are: Input tax credit is a statutory right subject to conditions under the CGST Act. Rule 86A empowers tax authorities to block debit from a taxpayer's electronic credit ledger (ECL) if there is reason to believe the ITC was availed fraudulently or is ineligible. However, the blocking can only be done to the extent of ITC available in the ECL at that time, not exceeding it. The court held that Rule 86A is a drastic power for temporary protection of revenue interests, not for recovery of dues. The words "credit available in the ECL" plainly refer to the credit presently available, not previously availed and utilized ITC. If the tainted ITC is less than the ECL credit, the blocking must be limited to that amount. Authorities must follow procedures u/ss 73/74 of the CGST Act to determine wrongful availment and demand tax, interest or penalty. Rule 86A cannot require replenishing the ECL for past utilization of allegedly inadmissible ITC, as that would amount to recovery. The impugned orders exceeding the available ECL credit. Visit to Get Source Govt's Free Electricity Compensation for Hydro Projects: GST Liability Questioned. GST levy on supply of free power questioned - whether free power supplied as compensation to States for distress caused by hydro power projects can be considered "consideration" for services rendered by States to attract GST. Held: Petitioner's contentions have force that free electricity may not constitute "consideration" but "compensation", raising doubt on leviability of GST. Respondents cannot treat free electricity as consideration for alleged services by State as supplier. Interim stay granted on further proceedings pursuant to Annexure P-1 dated 14.06.2024 considering petitioner is government company and huge liability imposed despite contrary view by Central Excise Department. Matter listed on 18.11.2024. Visit to Get Source Tax recovery challenged, court allows belated appeal with partial stay. The petitioners challenged the attachment of their bank account and steps taken by the respondents pursuant to an order of rectification, alleging irregular recovery before the expiry of the appeal filing period. The court held that since the petitioners had not filed an appeal against the order u/s 73, they cannot invoke extraordinary writ jurisdiction when an efficacious alternate remedy is available. The petitioners were permitted to approach the appellate authority within 15 days, and the authority was directed to condone the delay and hear the appeal within 8 weeks. If the appeal is filed within the prescribed time and 10% of the disputed tax has been recovered or deposited, the orders challenged before the appellate authority shall be deemed stayed, and the order attaching the petitioners' bank account shall not be given further effect. The petition was disposed of accordingly. Visit to Get Source Accused granted bail after probe into tax evasion via bogus firms. Application seeking regular bail granted - accused allegedly formed bogus firms and evaded tax payments - offences u/ss 132(1)(b), 132(1)(c) and 132(1)(l)(l) of GST Act - investigation completed, charge-sheet filed - maximum punishment 5 years, compoundable offence - considering Supreme Court order in Sandeep Goyal case and accused's custody since 04/03/2024 - bail granted on furnishing personal bond of Rs. 1,00,000 with one solvent surety and conditions - bail to remain in force till case disposal. Visit to Get Source Tax credit denial set aside; authorities to consider claim as per court's previous ruling. The High Court set aside the assessment order denying input tax credit to the petitioner u/s 16(4) of the CGST/SGST Acts. It directed the authorities to consider the petitioner's claim for input tax credit in line with the court's previous judgment in M. Trade Links v. Union of India, which had provided directions regarding the interpretation and application of Section 16(4). The court extended the benefit of its earlier ruling in M. Trade Links to the petitioner in this case, effectively allowing the petitioner to claim input tax credit subject to the conditions and guidelines laid down in that precedent. Visit to Get Source Income Tax Legal notice issued to deceased person void, reassessment proceedings quashed due to jurisdictional error. Reassessment proceedings initiated against a deceased person are void, as issuing notice in the name of a deceased individual is a fundamental jurisdictional error, not merely a procedural lapse. Even if the initial notice u/s 148 was issued during the assessee's lifetime, subsequent notices u/s 148A(b) and 148 were issued after the assessee's demise. The assessee's participation cannot be construed as waiver, as the department was informed of the death. Failure to bring legal heirs on record renders the reassessment proceedings invalid. The High Court set aside the reassessment proceedings, deciding in favor of the assessee. Visit to Get Source Tax evasion trial upheld despite no taxable income. Complaint filed u/s 276CC for non-filing of returns. Assessee argued no taxable income and department accepted it. Proviso B of Section 276CC exempts prosecution if tax payable after regular assessment does not exceed Rs. 3,000/-. Principal Commissioner clarified this exemption applies only when regular assessment is framed, which was not done in this case. Court followed Anil Kumar Sinha vs. Union of India and CIT vs. Kerala Chemicals and Proteins Limited judgments, holding assessee does not fall under regular assessment to get exemption under proviso to Section 276CC. Trial already commenced, complainant examined, cross-examination deferred at petitioner's request. Not a fit case for quashing, petitioner to face trial and put forth defense. Visit to Get Source Tax Liability Shift Unlawful: Employer's Default Can't Burden Employees. The mandate of Section 205 is clear that the assessee shall not be called upon to pay taxes himself to the extent tax has been deducted from the assessee's income. The object is that when the obligation to deposit tax is on the employer and the employer defaults, the liability cannot be shifted to the employee who is the beneficiary of the payment. The department foisted the liability on the petitioners without legal warrant, clearly violating Section 205. The impugned demand notices issued to the petitioners stand quashed and set aside for breaching Section 205. However, if there are other tax demands from the petitioners on any other count, those issues are kept open and not adjudicated. Visit to Get Source Trust can pay trustees' fees without losing tax exemption. Depreciation allowed on trust assets. Trust established before enactment of Income Tax Act, 1961 entitled to pay honorarium to trustees as per Memorandum of Association without violating Section 13(1)(c). Assessing Authority erred in denying exemption u/s 11 by treating entire income as taxable. Tribunal rightly allowed depreciation claim following its own precedent. High Court upheld Tribunal's decision granting exemption u/s 11 and allowing depreciation. Visit to Get Source Aircraft leasing income not taxable as royalty under India-Ireland DTAA, overrides domestic law. The High Court examined reassessment proceedings involving income from aircraft leasing treated as royalty under the Income Tax Act and India-Ireland Double Taxation Avoidance Agreement (DTAA). The Assessing Officer held the consideration received by the petitioner was royalty for aircraft use, taxable u/s 9(1)(vi) and the DTAA. The Court found the AO's view unsustainable based on a plain reading of Article 12(3)(a) of the DTAA. It opined invoking Section 9(1)(vi) would be impermissible given the DTAA's express exemption, as DTAAs override domestic legislation being more beneficial to the assessee. Accordingly, the reassessment notice u/s 148 was quashed and set aside. Visit to Get Source Controversy over Corporate Social Responsibility expenses deduction under Income Tax Act. CSR expenses claimed u/s 37(1) were disallowed as the assessee-company failed to prove how expenses like building classrooms, toilets, installing LED lights or planting trees were incidental to its business of rendering engineering/architectural consultancy services. The Tribunal relied on a judgment without considering the applicability of Section 135 of the Companies Act, 2013, dealing with Corporate Social Responsibility (CSR), based on the relevant financial year ending March 31, 2013. The High Court held that the Tribunal's order was incorrect and remitted the matter for a fresh decision after providing an opportunity of hearing to the parties, considering the applicability of Section 135 for the relevant financial year. Visit to Get Source Work progress tracked properly, income offered after completion. Advance receipts not taxable income for that year. Assessee followed system of regularly showing mobilization account and advances received, offering income against bills in subsequent years. Revenue did not previously object to this treatment. CIT(Appeals) and Tribunal deleted additions made by Assessing Officer on account of "Mobilization Advance" for the year. Statements of Samiti members showed lack of full knowledge on work progress, with Sub Divisional Engineer overseeing the matter. Work completion certificates indicated work was completed later and income offered for taxation in subsequent years. Non-commensurate work-in-progress amount of Rs. 69,31,666 did not justify treating advances as income. Assessing Officer added Rs. 2,00,95,900 as unaccounted receipts from Samiti, failing to note it was already shown as liability in books. No instance to interfere with CIT(Appeals) observations. CIT(Appeals) order upholding dismissal of Revenue's grounds was affirmed. Visit to Get Source Unexplained cash credits challenged due to lack of incriminating evidence and improper approval. Validity of assessment u/s 153A regarding unexplained cash credits u/s 68, absence of incriminating material found during search proceedings, and lack of valid approval u/s 153D. The key points are: the assessment proceedings were unabated when the search was conducted; no incriminating material pertaining to the assessment year was found during the search to justify additions u/s 68; statements recorded before or after the search cannot be considered incriminating material; mere observation about investors' financials cannot constitute incriminating material; in the absence of incriminating material, additions cannot be made for unabated assessments; the Assessing Officer continued assessment proceedings and modified the draft order after forwarding it for approval u/s 153D, resulting in material variance from the approved draft order; the final order was passed without valid approval as required u/s 153D, rendering it unsustainable. Visit to Get Source Bogus share capital infusion with unexplained premium rejected as assessee failed to prove credibility. Addition u/s 68 - Bogus share capital and share premium received. The assessee failed to prove the identity and creditworthiness of the subscriber companies and the genuineness of the transactions. The assessee could not justify the huge premium charged nor establish the creditworthiness of the share applicants/shareholders. Most applicants lacked regular income sources or strong financials to justify the investment with huge premium. The assessee did not carry out any valuation to justify the premium charged. The transactions relating to share issuance were not genuine, and the creditworthiness of the creditors was not established. Based on judicial precedents and the CIT(A)'s findings that the applicants were shell companies, the ITAT upheld the CIT(A)'s order treating the addition u/s 68 as valid. Visit to Get Source AO denied rectification u/s 154 for TDS credit difference without hearing assessee, ITAT set aside order & directed allowing TDS credit. The Income Tax Appellate Tribunal (ITAT) held that the Assessing Officer (AO) erred in denying the assessee's request for rectification u/s 154 of the Income Tax Act and allowing credit for the difference in Tax Deducted at Source (TDS) for the assessment year 2019-20. The AO had initially restricted TDS based on Rule 37BA but later rectified the mistake u/s 154, allowing credit for the difference. However, the AO subsequently issued a letter denying the rectification without giving the assessee an opportunity of being heard, which is a mandatory requirement u/s 154(3). The ITAT set aside the order of the Commissioner of Income Tax (Appeals) and directed the AO to give effect to the earlier rectification order allowing credit for the difference in TDS. Visit to Get Source Indian IT company's receipts from US affiliates not taxable as 'fees for included services' under India-US tax treaty. Taxability of receipts as 'fees for included services' under the India-USA Double Taxation Avoidance Agreement (DTAA). The key points are: The Assessing Officer (AO) treated the remittances received by the assessee company from its sister concerns for providing IT support, maintenance services, etc., as 'fees for included services' (FIS) u/s 9(1)(vii)(b) of the Income Tax Act and taxed the same u/s 115A. However, the assessee argued that merely providing complicated services with a nexus to the compensation received does not constitute FIS under the DTAA unless it satisfies the definition of FIS, which involves making available technical knowledge, expertise, skills, know-how, or processes. The Appellate Tribunal agreed with the assessee's argument, stating that for a payment to be considered FIS under Article 12 of the India-US DTAA, the technical knowledge, skills, etc., must remain with the recipient even after the contract ends. The services provided by the assessee, such as centralizing IT services, providing disaster recovery, helpdesk support, and user administration, do not make available any technical knowledge or skills to the recipient. Hence, the receipts cannot be considered FIS under the DTAA and are not taxable in India. The Tribunal also. Visit to Get Source Software income from providing commercial info, not technical services, not 'Fees for Included Services' under tax treaty. Income from commercial information or output generated by accessing the assessee's software does not constitute Fees for Included Services (FIS) under Article 12(4)(b) of the tax treaty. The services provided are not highly technical in nature, as they merely involve transferring commercial information to the end-user without imparting any technical knowledge, design, process, or plan that provides an enduring benefit. The agreement explicitly states that all rights and tests of the application remain with the assessee, and the end-users are not given access to the source code, which constitutes technical knowledge under Article 12(4)(b). The 'make available' clause is not satisfied, as the contract only grants temporary access to the software during the subscription period, and the customer content is deleted upon expiry. The decision is in favor of the assessee. Visit to Get Source Income Tax dept's attempt to reopen case via rectification rejected; limited powers to correct glaring mistakes only. The Tribunal held that in a case involving a requisition u/s 132A of the Act, the jurisdiction to complete the assessment is governed by the provisions of Section 153A. The department's arguments for rectification u/s 254(2) were rejected as they did not point out any mistake apparent on record. The Tribunal observed that the department's contentions required lengthy deliberation and debate, which does not qualify as a mistake apparent from record for rectification. The Tribunal clarified that it has limited powers to rectify apparent and glaring mistakes, and cannot rehear the entire case on merits or revisit its earlier order based on arguments. The department's request for rehearing/review in the garb of rectification through long-drawn reasoning and arguments is neither permissible nor allowed under the Act. The Miscellaneous Application was rejected as the department failed to identify any mistake apparent from record warranting rectification u/s 254(2). Visit to Get Source Customs Customs Duty Revision: Tariff Values Steady for Edible Oils, Up for Silver Forms. Govt. revises the tariff values for import of certain goods including edible oils like crude palm oil, RBD palm oil, crude palmolein, RBD palmolein, crude soyabean oil, brass scrap, gold in various forms, silver in various forms, and areca nuts. The tariff values for edible oils, brass scrap, and areca nuts remain unchanged from the previous notification. However, the tariff value for silver in certain forms has been revised upwards to $1036 per kilogram. Visit to Get Source Customs Extra Duty Deposit refund denial unjustified, Court directs refund after assessment. The High Court held that the rejection of refund claim for Extra Duty Deposit (EDD) paid by the petitioner was unjustified. The EDD amount collected during Special Valuation Branch (SVB) proceedings was not a customs duty u/s 12 of the Customs Act, 1962. It was a deposit eligible for appropriation towards duty liability after final assessment. The amount over the payable duty should be refunded after Bill of Entry assessment, subject to no unjust enrichment u/s 27. The impugned order was set aside, and respondents were directed to complete proceedings within six months. The petition was allowed. Visit to Get Source Customs duty waiver for goods destroyed by fire in SEZ units. Customs duty levied on imported goods destroyed by fire in SEZ units. SEZ units procured duty-free goods indigenously, availing exemptions under SEZ Act, 2005 and Rules, 2006. However, the goods were not used for authorized operations, violating provisions. Remission of customs duty sought. Tribunal consistently held that in case of destruction due to natural causes in SEZ, the unit is entitled to duty remission u/s 23 of Customs Act, 1962. However, appellant did not opt for duty remission by filing appropriate application before the competent authority. Matter remanded to Adjudicating Authority for appellant to file application seeking duty remission u/s 23 of Customs Act, 1962 and relevant rules. Impugned order set aside, appeal allowed for remand to pass fresh order after observing principles of natural justice. Visit to Get Source Corporate Law Judicial, technical appointments for 4 years at NCLAT by Centre under Companies Act. The Central Government, exercising powers u/s 410 of the Companies Act 2013 and Section 3(2) of the Tribunals Reforms Act 2021, has appointed Justice Shri Yogesh Khanna and Justice Shri Sharad Kumar Sharma as Judicial Members, and Shri Jatindranath Swain and Shri Indevar Pandey as Technical Members of the National Company Law Appellate Tribunal for a period of four years from the date of assumption of office, or till attaining 67 years of age, or until further orders, whichever is earliest. Visit to Get Source Companies must file CSR report separately by Dec 31, 2024 for FY 2023-24. Companies are required to file Form CSR-2 separately on or before December 31, 2024, after filing Form AOC-4, AOC-4-NBFC (Ind AS), or AOC-4 XBRL for the financial year 2023-2024. This amendment to Rule 12(1B) of the Companies (Accounts) Rules, 2014 has been introduced through the Companies (Accounts) Amendment Rules, 2024, which came into force on the date of publication in the Official Gazette. The notification exercises powers under various sections of the Companies Act, 2013, related to financial statements, corporate social responsibility reporting, and filing requirements. Visit to Get Source Company feud turns ugly: Rival faction's sneaky petition maneuver backfires due to lack of fair hearing. The amended petition filed by the Respondent amounted to a fresh petition under the guise of an amendment, as it involved a complete redraft of the original petition with additional grounds and reliefs. The amendments were substantial, including the addition of new reliefs, impleading a new party, and introducing additional acts of oppression. As per the Aurosagar Estates case, such substantial amendments require a formal application, granting the opposing party an opportunity to rebut the proposed changes. However, the impugned order did not adhere to the principles of natural justice by allowing the amended petition without providing the Appellant an opportunity to be heard. Consequently, the appeal was disposed of. Visit to Get Source IBC Amends rules: Clearer authorization for insolvency professional, interim role clarification Streamlining corporate insolvency process, updating key regulations for clarity and efficiency. This notification amends the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. It substitutes certain words in regulations 12(3) and 16A(2)(i) for clarity. The proviso in 16A(1) is replaced to clarify the choice of insolvency professional as authorized representative by a financial creditor class. A new proviso is inserted in 16A(2) regarding the interim role of the selected insolvency professional until appointment of the authorized representative. Regulation 40A's table is amended to omit the row for 12(2) and modify the row for 13(1) by removing references to claims verification under 12(2) and the associated timeline. These amendments aim to streamline the insolvency resolution process for corporate persons. Visit to Get Source Corporate insolvency petition admissible on prima facie debt & default sans demand proof. NCLT to proceed further. Petition u/s 7 of IBC maintainable despite lack of evidence to show loan due and payable or record of default or demand letter. Adjudicating Authority only required to ensure existence of debt and default based on record produced. Balance sheets and legal notice of demand prima facie reveal no impediment to admit petition against corporate debtor. Matter remanded to NCLT to proceed further as per law. Appeal allowed. Visit to Get Source Indian Laws Cheque Dishonor Case: Corporate Managers Exonerated from Criminal Liability. Dishonor of cheque case. Petitioners described as managers, wives of directors. Court examined whether petitioners can be arrayed as accused. Held, company is principal accused, directors are accused. No averment in complaint regarding petitioners' role in transaction or functioning of company. No vicarious liability in criminal law. Section 141 of Negotiable Instruments Act requires person to be in charge and responsible for company's business conduct at time of offense. Merely managing company's affairs insufficient. Petitioners' role not established as responsible for company's business conduct. Complaint against petitioners cannot be sustained in absence of specific averments. Petition disposed of. Visit to Get Source PMLA HDB Financial Services permitted Aadhaar authentication for anti-money laundering, adhering to privacy laws. This notification from the Ministry of Finance authorizes HDB Financial Services Limited, a reporting entity under the Prevention of Money-laundering Act, 2002, to perform Aadhaar authentication for the purposes of section 11A of the Act. The Central Government has granted this permission after being satisfied that HDB Financial Services Limited will comply with privacy and security standards under the Aadhaar Act, 2016. The decision was taken in consultation with the Unique Identification Authority of India and the Reserve Bank of India, the appropriate regulator, as it was deemed necessary and expedient. Visit to Get Source Job fraud money laundering case: Bail granted after 15 months despite strict PMLA provisions. Bail application rejected in money laundering case involving collection of large amounts by promising job opportunities, offences under IPC and Prevention of Corruption Act. Main evidence is pen drive seized showing incriminatory material, prima facie deposit of Rs. 1.34 crores in appellant's account. Delay in disposal of cases discussed, existence of scheduled offence necessary for proceeds of crime under PMLA. Higher threshold for bail in certain penal statutes like PMLA to secure objects. Expeditious trial warranted considering stringent bail provisions. Appellant incarcerated for 15 months, trial unlikely to conclude in 3-4 years, amounting to infringement of right to speedy trial under Article 21. Appellant enlarged on bail subject to conditions. Visit to Get Source SEBI Revised SEBI Delisting Norms: Fixed Price Route, Valuation Rules, Holding Cos. Delisting. This notification amends the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021. Key changes include introducing a fixed price delisting process alongside reverse book building, revising floor price calculation, allowing delisting of investment holding companies through a scheme, and modifying counter-offer and escrow account rules. It covers aspects like fixed delisting price, disclosure requirements, tendering mechanism, success conditions, and valuation guidelines for delisting through fixed price or reverse book building. Special provisions are added for delisting investment holding companies pursuant to a scheme, subject to conditions like minimum listed investments, shareholder approval, valuation norms, and relisting restrictions. Visit to Get Source Regulatory bodies to decide on life insurance company's commercial transactions, not courts. Private commercial transactions involving acquisition of shares in a life insurance company were challenged on allegations of fraudulent acts and undue profits. The court held that where a field is regulated and the regulator has addressed or is investigating the transaction, the court should not interfere in writ jurisdiction and allow the regulator to perform its duties. Writ of Mandamus cannot be used for enforcement of private contracts. Examining commercial transactions for reasonableness under Article 226 should be avoided as it would subject every valuation, sale, purchase, merger, acquisition, or demerger to judicial review. If criminality is alleged, appropriate proceedings can be filed. The court found no ground to implead the SEBI Chairperson despite allegations of past professional relationship with a party, as regulators must decide matters per law. Since shareholders approved the transactions and sectoral regulators SEBI and RBI are seized of the matter, the court should not act as a 'super regulator' under Article 226. SEBI and RBI were directed to complete the investigation expeditiously and take further action per law. The rights and contentions of all parties, including the petitioner's locus standi, were left open. Visit to Get Source VAT Local Body Tax (Entry Tax) - Higher tax for imported goods upheld; not discriminatory under Article 304(a). The High Court upheld the constitutional validity of the Chhattisgarh Sthaniya Kshetra me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (Local Body Tax or Entry Tax Act), rejecting the challenge based on Articles 301, 304, and 14 of the Constitution. The Court held that the Act and notification prescribing higher rates on imported goods were not discriminatory under Article 304(a), as the power to impose differential tax rates is a plenary power of the State. The Court relied on the Supreme Court's judgment in Jindal's case, which held that a taxing statute's validity is to be tested only on the anvil of Article 304(a), without the need for public interest or reasonableness scrutiny under Article 304(b). The petitioners failed to establish that the legislation was a colourable exercise of power or fraud on legislative power. The Court also noted that the entire state cannot be declared a local area, and the definition clause in the Act is unambiguous. The argument of higher tax on imported goods violating Article 14 was rejected, citing the Supreme Court's ruling in Malwa Bus Service case that a difference in tax rates alone cannot be considered discriminatory. The petition was dismissed. Visit to Get Source Service Tax Resolving Service Tax Disputes: Exemptions, Reverse Charges, and CENVAT Credits Scrutinized. Various Service tax issues related to different activities undertaken by the appellant. The key points are: service tax demand on operation and maintenance of ropeway and battery-operated vehicles in Science City was set aside as these activities were exempted; demand for operation and maintenance of external coal handling system was remanded for verification of payment already made; service tax under reverse charge mechanism on rent-a-cab, security, works contract, manpower recruitment, and legal services was upheld, but penalty was set aside; service tax demand on operation and maintenance of a bridge was set aside; issues related to denial of CENVAT credit, non-payment of service tax on advances, and reversal of CENVAT credit due to non-payment to suppliers/contractors were remanded for verification of documents and passing an appropriate order regarding eligibility of credit. Visit to Get Source Articles NON-RENEWAL OF FIXED DEPOSITS ARISING OUT OF SEIZED CASH Interest is mandatory to be paid on refundable pre-deposit of an appeal A Guide to Start a Private Limited Company HC grants bail to Accused when co-accused with more serious role already released on Bail Notifications Companies Law S.O. 4196(E) - dated 25-9-2024 - Co. Law Central Government appoints Judicial Members and Technical Members in the National Company Law Appellate Tribunal for a period of four years Customs 63/2024 - dated 26-9-2024 - Cus (NT) Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver Money Laundering S.O. 4240(E) - dated 26-9-2024 - PMLA Central Government Authorization for HDB Financial Services Limited to perform Aadhaar Authentication for the purposes of section 11A of the Money-laundering Act Circulars / Instructions / Orders SEBI - SEBI/HO/AFD/AFD-PoD-3/P/CIR/2024/130 - dated 26-9-2024 Operational Guidelines for Foreign Venture Capital Investors (FVCIs) and Designated Depository Participants (DDPs) Customs - CAVR Review Order No. 01/2024 - dated 25-9-2024 Order for extension of validity of CAVR Order No. 01/2023-Customs under the Customs (Assistance in Value Declaration of Identified Imported Goods) Rules. 2023 in respect of Linear Alkyl Benzene News Central Government Increases Minimum Wage Rates for Workers India and Republic of Uzbekistan sign Bilateral Investment Treaty in Tashkent Data User Conference on Periodic Labour Force Survey (PLFS) 2023-24 Case Laws: GST 2024 (9) TMI 1544 Lifting of the attachment on the third account of petitioner - HELD THAT:- The petitioners stated that once the attachment expires by virtue of operation of law in terms of sub-section (2) of Section 83 of the Act, there is no provision or jurisdiction vested with the Department to once again attach an account. In the circumstances, the attachment made on 30.08.2024 insofar as the third account is concerned is without authority of law and therefore, a direction may be issued for lifting of the said attachment. The application made by the petitioners herein is allowed. It is directed that the attachment made of the third account by the respondent-State (Department) on 30.08.2024 be lifted and the account be defreezed. Application disposed off. 2024 (9) TMI 1543 Interpretation of Rule 86A of the CGST Rules - Blocking of input tax credit - excess of the credit available in their respective ECLs - It is the case of the petitioners that Rule 86A of the Rules does not permit blocking of the ITC, which is unavailable in a taxpayer s ECL - whether Rule 86A of the Rules permits the Commissioner or an officer authorized by him, to block a taxpayer s ECL (Electronic Credit Ledger) by an amount exceeding the credit available at the time of issuance of the said order?. Nature of Input Tax Credit - HELD THAT:- A brief purview of the provisions of the CGST Act clearly indicate that a taxpayer is entitled to ITC only to the extent as provided under the CGST Act and subject to the stipulated conditions being satisfied. There is no cavil that if the conditions as set out under the CGST Act are not satisfied, the registered taxpayer would not be entitled to avail and utilize the ITC in respect of supplies received by it. The right to avail and utilize the ITC is thus a statutory right, which accrues by virtue of the provisions of the CGST Act and is subject to the conditions as set out therein. This right to avail and utilize the ITC is a valuable right. It is, undeniably, an asset, which vests with a taxpayer if the taxpayer satisfies all the stipulated conditions for such entitlement. In a scheme for taxation, which provides for credit for taxes on inputs, the taxpayer would be entitled to such credit subject to complying with all the necessary conditions for validly availing the same. If the conditions for validly availing the same are satisfied, it would vest a right with the taxpayer to utilize the same in accordance with the relevant statute. Undeniably, the said right is a valuable right and a taxpayer cannot be deprived of the same except by a validly enacted statute or rules. It is settled law that legislature has wide latitude in laws relating to economic activities. The legislature is required to be allowed sufficient play in the joints as it has to deal with complex problems - Although, the legislature has a wide discretion and the Courts must defer to the legislative wisdom, the fiscal statutes are not immune from the constitutional framework and must necessarily be compliant with the constitutional guarantees. Rule 86A of the CGST Rules - a drastic power - HELD THAT:- Rule 86A of the Rules falls within Chapter IX of the Rules, and expressly empowers the Commissioner or any other officer authorized by him, not below the rank of Assistant Commissioner, to not allow debit of an amount from the ECL subject to the conditions specified therein being satisfied - Rule 86A of the Rules, is not a provision for recovery of tax or other dues. It enables the concerned authority to take temporary measures for the protection of the interest of revenue - The same is necessarily to be borne in mind while interpreting the provisions of Rule 86A of the Rules. Rule 86A, not condition of grant of exemption/concession - HELD THAT:- An order under Rule 86A of the Rules is premised on the Commissioner or the officer authorized by him, having reason to believe that the available ITC has either been availed fraudulently or is ineligible on account of the circumstances as set out in Clauses (a) and (d) of Sub-rule (1) of Rule 86A of the Rules. An order under Rule 86A of the Rules is not in the nature of a condition to be complied by the taxpayer or a burden to be discharged by it. It is an order passed in exercise of drastic powers that are granted to the concerned authority. Such a power can be exercised only if the conditions set out in Sub-rule (1) of Rule 86A of the Rules are satisfied and the extent of such power is circumscribed by Rule 86A of the Rules. There is some similarity in the language of Section 83 (1) of the CGST Act, which enables the Commissioner to provisionally attach a taxpayer s assets for protecting the interest of the Revenue, with the language of Rule 86A of the Rules. The powers under Sub-section (1) of Section 83 of the CGST Act and under Rule 86A of the Rules, can be exercised only if the concerned authority has reasons to believe that the conditions as stipulated in the respective provisions are satisfied. In M/s S.S. Industries v. Union of India [ 2020 (12) TMI 1120 - GUJARAT HIGH COURT ], the Gujarat High Court had also observed that the provisions of Rule 86A of the Rules are reminiscent to Section 83 of the CGST Act. Principles of interpretation of Rule 86A - HELD THAT:- If there is no credit of input tax available in the ECL, one of the necessary conditions for passing an order under Rule 86A (1) of the Rules would not be satisfied. The fact that the Commissioner (or an officer authorized by him) may have reasons to believe that in the past a taxpayer had availed and utilized ITC by debiting its ECL is not the condition precedent for passing an order under Rule 86A (1) of the Rules - The words credit of input tax available in the electronic credit ledger plainly refers to the credit, which is at the given point of time available in the taxpayer s ECL. If the same had already been utilized in payment of tax, penalties or other dues, or has been refunded, the same would not be available in the ECL. There is no cavil that ITC is availed by a registered person when he files a return and the same is credited in his ECL. The credit of input tax as available in the ECL is then available to the taxpayer for discharging his dues under the CGST Act or in given cases, for seeking its refund. When Rule 86A (1) of the Rules refers to the ITC available in the ECL of a taxpayer (which the Commissioner or the officer authorized by him has reason to believe has been fraudulently availed or is ineligible), it clearly refers to the amount that is lying to the credit of the taxpayer in his ECL. It is difficult for us to accept that the expression available in the electronic credit ledger should be read as the ITC that was available in the ECL sometime earlier, prior to the same being used - In a case where the Commissioner or an officer authorized by him has a reason to believe that the tainted ITC is less than the ITC credited in the ECL, then it would necessarily follow that the order under Rule 86A (1) of the Rules would be confined to such amount as equivalent to the ITC, which the Commissioner or an officer authorized by him has reasons to believe has been fraudulently availed or is ineligible. Circular dated 02.11.2021 relied upon by the learned counsel for the Revenue do not support the contentions advanced by them. On the contrary, the same support the literal construct of Rule 86A of the Rules and also clarify that the amount of debit to be disallowed from the ECL should not be more than the amount of the ITC, which is believed to have been fraudulently availed or is ineligible. However, this would necessarily be subject to the conditions referred to in the opening sentence of Rule 86A (1) of the Rules, which is that the same is available in the ECL of an assessee. Thus, if the amount of the ITC available in the ECL exceeds the amount, which the Commissioner or any officer authorized by him, has reason to believe is ineligible or fraudulently availed, the amount which is blocked (not allowed to be debited) is required to be restricted to an amount equivalent to the fraudulent or inadmissible ITC. Since there is no ambiguity in the plain language of Rule 86A (1) of the Rules, it is not necessary to resort to the rule of purposive interpretation. However, it is found that the aforesaid interpretation is also in conformity with the legislative scheme of the CGST Act and the Rules. An order under Rule 86A (1) of the Rules does not require a prior show cause notice to be issued to a taxpayer as it is by its very nature an emergent provision to immediately block the usage of the ITC credited in the ECL, which the Commissioner or an officer authorized by him has reasons to believe has been fraudulently availed or is ineligible. The concerned authorities are required to proceed to determine whether a taxpayer has wrongly availed or utilized the ITC, under Sections 73 or 74 of the CGST Act and if it is found that the taxpayer has wrongly availed of the ITC the proper officer is required to pass an order to determine the amount of tax, interest or penalty payable. The demand as raised are required to be determined under Sections 73 and 74 of the CGST Act. Rule 86A (1) of the Rules does not contemplate an order, the effect of which is to require a taxpayer to replenish his ECL with valid availment of ITC, to the extent of ITC used in the past, which the Commissioner or an officer authorized by him has reasons to believe, was fraudulently availed or was ineligible. Such an interpretation would in effect amount to construe an order under Rule 86A (1) of the Rules as an order for recovery of tax. This is obvious because the taxpayer would now have to incur a larger cash outflow for payment of taxes as he would be denied utilization of validly availed ITC, which he would require to accumulate to compensate for the ITC availed and utilized which the Commissioner or an officer authorized by him, has reasons to believe was fraudulently availed or was ineligible. The orders impugned in the present petitions are set aside to the extent the impugned orders disallow debit from the respective ECL of the petitioners, in excess of the ITC available in the ECL at the time of passing of the impugned orders - Petition allowed. 2024 (9) TMI 1542 Levy of GST - supply of free power - nothing but consideration towards licensing services rendered by the State Governments - whether supply of free power @ 12% as compensation to the respective states where distress is caused by setting up the hydro power projects, can be subjected to Service Tax or GST? - HELD THAT:- There are force in the contentions of the petitioner that GST is levied on supply of goods and services in lieu of consideration ; that there a serious doubt as to whether the supply of free electricity is in the nature of consideration at all in order to subject it to GST or it is a compensation for distress caused by setting up of the Hydro electric Project ; and that the respondents cannot impose GST on free electricity provided by the petitioner by treating the same as consideration towards the alleged services provided by the State Government as a supplier. Taking into account the fact that the petitioner is a Government Company and huge liability is imposed on it by the respondents, though another department i.e., Central Excise Department of the Government, has taken a diametrical opposite view, pending further orders, there shall be interim stay of all further proceedings pursuant to Annexure P-1, dt. 14.06.2024. List on 18.11.2024. 2024 (9) TMI 1541 Seeking grant of regular bail - operating a web of fake firms by using credentials of various persons - offence punishable under Sections 132 (1) (c) punishable under Section 132 (1) (i) (1) of CGST Act, 2017 - HELD THAT:- Considering the facts and circumstances of the case, the nature of the allegation levelled against the applicant, the fact that similarly situated accused, namely, Hemant Kasera, has already been granted bail by this Court vide order dated 16.08.2024 passed in MCRC No. 4586 of 2024 in similar nature of offence, the applicant is languishing in jail since 04.05.2024 and the charge-sheet/complaint has been filed, the conclusion of the trial is likely to take some time, hence, without commenting anything on merits of the case, regular bail granted to the applicant. Accordingly, the bail application filed on behalf of Applicant - Sandeep Bansal is allowed. If the applicant - Sandeep Bansal furnishes a personal bond in the sum of Rs.1,00,000 with one solvent surety to the satisfaction of the concerned Court, he be released on bail involved in Crime No.05/FIC//GST/2024-25, registered at Police Station Central GST, Raipur, (CG) for the offence punishable under Sections 132 (1) (c) punishable under Section 132 (1) (i) (1) of CGST Act, 2017 - appeal allowed. 2024 (9) TMI 1540 Cancellation of petitioner s GST registration with retrospective effect - no reply to the show cause notice has been submitted - It is the petitioner s case that he has not received a copy of the GSTI field visit report on the basis of which the impugned SCN and the impugned order are founded - violation of principles of natural justice - HELD THAT:- It is material to note that the impugned SCN did not propose cancellation of the petitioner s GST registration with retrospective effect. Thus, the petitioner had no opportunity to respond to any such action. Although, the impugned SCN had mentioned that it required the petitioner to appear before the concerned officer at the appointed date or time, the said impugned SCN did not mention any such date or time. There is merit in the contention of the petitioner that it was not afforded a full opportunity to respond to the impugned SCN and to show cause why its GST registration should not be cancelled with retrospective effect. It is material to note that the impugned order does not indicate any specific reason for cancelling the petitioner s GST registration ab initio. It is considered apposite to grant the petitioner another opportunity to respond to the said action. The impugned order is set aside. The respondents are directed to furnish a copy of the GSTI field visit report to the petitioner. The petitioner is at liberty to file a reply/response to the said impugned SCN, on the assumption that it proposes cancellation of the petitioner s GST registration with retrospective effect, within a period of two weeks thereafter - petition disposed off. 2024 (9) TMI 1539 Seeking initiation of contempt proceedings against the respondent - wilful disobedience of directions of this Court - HELD THAT:- Ex facie, the present contempt petition is not maintainable. This Court vide the aforesaid order directed the respondent to consider the application of the petitioner for cancellation of GST registration in an expeditious manner and preferably within four weeks from the date of such order. In view of the fact that the directions passed in the order dated 13.08.2024 have since been complied with, the present contempt petition is dismissed with liberty to the petitioner to seek relief separately in accordance with law. 2024 (9) TMI 1538 Short payment of Goods and Services Tax - prayer for adjudication of challenge to appellate order - HELD THAT:- The issue stands covered in M/S. MAA TARINI TRADERS, M/S. SURA CONSTRUCTION, M/S. SMT. AMULU PATRO, M/S. THE NATIONAL SMALL INDUSTRIES CORPORATION LIMITED, ASHISH MOHANTY, M/S. V.S.T. TILLERS TRACTORS LIMITED, NIRANJAN PRADHAN VERSUS STATE OF ODISHA OTHERS, JOINT COMMISSIONER OF STATE TAX, ANOTHER, CHIEF COMMISSIONER OF C.T. G.S.T., ODISHA, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC) , DEPARTMENT OF REVENUE, MINISTRY OF FINANCE OTHERS, C.T. G.S.T. OFFICER, CUTTACK-I [ 2024 (2) TMI 1421 - ORISSA HIGH COURT] where it was held that 'The Petitioners are desirous of availing the statutory remedy of Appeal under the said provisions. Apparently, acknowledging the absence of constitution of Appellate Tribunal, in exercise of the power conferred under section 172 of the CGST Act, 2017, the Government of India based on the recommendation made by the G.S.T. Council, has issued Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 on 03.12.2019.' The first Division Bench directed a quantum of deposit with liberty to parties in as much as, petitioner could avail of its remedy upon constitution of the Tribunal and in event petitioner does not do so within time provided upon reconstitution, the department would be free to proceed. The writ petition is disposed of as covered by M/s. Maa Tarini Traders. 2024 (9) TMI 1537 Cancellation of registration of petitioner - appeal was dismissed on the ground of limitation - opportunity of hearing as not provided - order was passed without assigning any reason for cancellation of the registration of the petitioner - violation of principles of natural justice - HELD THAT:- 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. Therefore, 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. However, the registration of the petitioner shall remain suspended till the show-cause notice is decided by the Assessing Officer as per the directions imposed. This petition is partly allowed by quashing and setting aside the impugned order passed by the Appellate Authority as well as order of cancellation of registration and the matter is remanded to the Assessing Officer at show-cause notice stage, however, the registration number of the petitioner shall remain suspended till such show cause notice is disposed of as per the directions given above. 2024 (9) TMI 1536 Attachment of petitioners bank account - challenge to steps taken by the respondents pursuant to an order of rectification - irregular recovery of amount before expiry of appeal filing period - HELD THAT:- Having ascertained that the petitioners, till date, have not preferred any appeal from the order passed under Section 73 of the said Act, in respect whereof, the petitioners had sought for rectification which was turned down by order dated 2nd May 2024, the petitioners cannot be permitted to challenge the aforesaid order dated 7th December, 2023 or the order dated 2nd May, 2024, before this Court by invoking the extra ordinary writ jurisdiction, especially when there is an efficacious alternate remedy available to the petitioners. The petitioners are permitted to approach the appellate authority. In the event, the petitioners approach the appellate authority within a period of 15 days from date, the appellate 2 authority, having regard to the pendency of the writ petition before this Court, shall condone the delay and hear out the appeal on merits with in a period of 8 weeks from the date of filing of the appeal. In the event, the appeal is filed with in the time prescribed here in above, and if it is found that 10 per cent of the tax in dispute has already been recovered from the petitioner or in the alternative if the above amount is deposited as pre-deposit along with the appeal, having regard to the provisions contained under Section 107(7) of the said Act, the orders which shall form subject matter of challenge before the appellate authority, shall be deemed to be stayed and consequentially, the order of attachment of the petitioners bank account issued in Form GST DRC 13 dated 25th June, 2024 shall not be given further effect. Petition disposed off. 2024 (9) TMI 1535 Seeking grant of interim stay - Time Limitation - impugned order passed beyond the period of limitation since the last date for passing the said impugned order was expired on 30.04.2024 itself - HELD THAT:- This Court is satisfied and is inclined to grant an order of interim stay. Accordingly, there shall be an order of interim stay till the next date of hearing. Post this matter after 4 weeks. 2024 (9) TMI 1534 Seeking grant of regular bail - formation of thirteen bogus firms and evasion of payment of tax - offence punishable under Sections 132(1)(b), 132(1)(c) and 132(1)(1)(1) of the GST Act - HELD THAT:- The nature of the allegation levelled against the applicant, further considering the fact that the investigation has been completed and charge-sheet/complaint has been filed before the jurisdictional Court against the applicant, also considering the fact that the maximum punishment provided under the CGST Act is upto 05 years and the same is also compoundable one, also considering the order of the Apex Court in SANDEEP GOYAL VERSUS UNION OF INDIA [ 2020 (5) TMI 240 - SC ORDER ] and the fact that the applicant is in jail since 03.04.2024, hence, without commenting anything on merits of the case, it is required to grant regular bail to the applicant. Accordingly, the bail application filed on behalf of Applicant Hemant Kasera is allowed. If the applicant, Hemant Kasera, furnishes a personal bond in the sum of Rs. 1,00,000/- with one solvent surety to the satisfaction of the concerned Court, he be released on bail involved in Crime No. 01/F.I.C./G.S.T./2024-25 registered at Police Station : Central GST Department, Raipur, District Raipur (C.G.) for the offence punishable under Sections 132(1)(b), 132(1)(c) and 132(1)(1)(1) of the GST Act. Order shall be in force till disposal of the case in the like amount to the satisfaction of the court concerned with the fulfilment of conditions imposed - bail application allowed. 2024 (9) TMI 1533 Short payment of Goods and Services Tax - no Tribunal is functioning - challenge for adjudication of challenge to that part in appellate order, by which he is aggrieved - HELD THAT:- The first Division Bench directed a quantum of deposit with liberty to parties inasmuch as, petitioner could avail of his remedy upon constitution of the Tribunal and in event he or any one of them does not do so with in time provided upon reconstitution, the department would be free to proceed. The writ petition is disposed of. 2024 (9) TMI 1532 Principles of natural justice - seeking direction to additional 9th respondent to consider Ext.P16 in accordance with the law after affording an opportunity of hearing to the petitioner - HELD THAT:- This writ petition will stand disposed of directing the additional 9th respondent to consider and pass orders on Ext.P16 after affording an opportunity of hearing to the petitioner. 2024 (9) TMI 1531 Denial of ITC to the petitioner on account of the provisions contained in Section 16(4) of the CGST/SGST Acts - HELD THAT:- Taking into consideration the directions issued by this Court in M. Trade Links V. Union of India [ 2024 (6) TMI 288 - KERALA HIGH COURT] , this writ petition can be disposed of, setting aside Ext. P1 assessment order to the extent that it denied input tax credit on account of the provisions contained in Section 16(4) of the CGST/SGST Acts and directing that the claim of the petitioner be considered in terms of the directions issued by this Court in M. Trade Links. Exts.P1assessment order is set aside to the extent that it denies input tax credit on account of the provisions contained in Section 16(4) of the CGST/SGST Act and it is directed that benefit of the directions contained in the judgment in M.Trade Links shall also be extended to the petitioner - Petition disposed off. 2024 (9) TMI 1530 Denial of Input Tax Credit for the year 2018-19 - delayed filing of Form GSTR-3B - HELD THAT:- This writ petition will stand disposed of holding that the directions contained in the judgment of this Court in [ 2024 (6) TMI 288 - KERALA HIGH COURT] will apply to the petitioner also, where it was held that 'When the ITC is not an absolute right but is an entitlement subject to the conditions and restrictions prescribed under the Statute, the conditions, restrictions and time limit specified by law form the fulcrum on which the grant of ITC and tax collection for each financial year are balanced. The Scheme of the Act also provides that only tax collected and paid to the government could be given as input tax credit.' Exts. P1 and P2 will stand set aside to the extent of denial of credit on account of belated filing of Form GSTR-3B. The competent among the respondents shall consider the directions contained in the judgment of this Court in M.Trade Links and pass fresh orders considering the factual situation in this case, within three months from the date of receipt of a certified copy of this judgment. Petition allowed. Income Tax 2024 (9) TMI 1529 Assessment against deceased person - as argued despite having been informed that the assessee had expired, respondent have proceeded to initiate action under Section 148 of the Act in the name of the deceased assessee - HELD THAT:- The requirement of issuing notice in the name of a right person and not to a dead person is not merely a procedural requirement but is a condition precedent to the impugned notice being valid in law. Even though, the initial notice under Section 148 was issued during the lifetime of the assessee, the eventual reassessment action was commenced on the basis of notice under Section 148A (b) which resulted in issuance of impugned notice under Section 148 - Admittedly, both the impugned notices are in the name of the deceased person. Since the petitioner had already informed the Department about the death of the deceased, his participation in the reassessment proceedings cannot be regarded as waiver or submitting to the jurisdiction of the Assessing Officer without objection. The notice under Section 148A (b) dated 26.05.2022 therefore suffers from a fundamental jurisdictional error, having been issued in the name of a dead person. Not only this, the proceedings initiated consequent to such notice have also been proposed in the name of a dead person. No steps were taken to bring the legal heirs of the deceased on record even at the time of issuance of final notice under Section 148 of the Act dated 30.07.2022. Reassessment proceeding set aside - Decided in favour of assessee. 2024 (9) TMI 1528 Validity of assessment order passed - Violation of principles of natural justice - petitioner argued that Assessment Orders were passed without allowing document uploads, seeking another opportunity - Also as per Section 144B of the Act, the petitioner is entitled for two draft Assessment Orders which have not been furnished and therefore on this ground also the impugned Assessment Orders are liable to be quashed - HELD YHAT:- There has been a violation of principles of natural justice although the respondents cannot be fully found fault with. Be that as it may, to balance the interest of the parties, the impugned order is set aside and the cases are remitted back to the second respondent to pass a fresh orders on merits in accordance with law, within a period of three months from the date of receipt of a copy of this order. 2024 (9) TMI 1527 Complaint u/s 276CC - assessee not filed returns - as argued petitioner though failed to file his returns within the time stipulated during the said assessment year, he had no taxable income and that has been accepted by the Department by their own proceedings - In case, the returns if the tax payable by him on the total income determined on regular assessment after reducing the advanced tax, if any paid does not exceed Rs. 3,000/- - HELD THAT:- The sanction to prosecute, issued by the Principal Commissioner of Income Tax has dealt this issue and explained that the embargo of Rs. 3000/- in proviso B of Section 276CC of the Income Tax Act applies only in cases where a regular assessment has been framed. However, in the instant case, no regular assessment has been framed for the year in question and therefore relying upon the judgment of Anil Kumar Sinha Vs. Union of India [ 2013 (6) TMI 284 - PATNA HIGH COURT] This Court following the Judgements of Patna High Court rendered in Anil Kumar Sinha Vs. Union of India [SUPRA] and the judgment of CIT Vs. Kerala Chemicals and Proteins Limited [ 2010 (1) TMI 263 - KERALA HIGH COURT] which has clearly dealt with the issue which is now subject matter for consideration holds that the assessee does not fall within the meaning and scope of a regular assessment to get the protection to the proviso to 278 CC of the Income Tax Act. Hence, he has to face the prosecution. Records reveals that the trial in this case has already commenced and the complainant has been examined in chief by P.W.1 and cross examination is deferred at the request of the petitioner. In the said circumstances, it is appropriate for the petitioner herein to face the trial and put forth his defence in the course of trial and seek remedy. Hence, the matter is not fit for quash for the reasons stated above. 2024 (9) TMI 1526 Demand raised on Non-deposit of the TDS amounts by the Employer - as argued that the demand notices issued by respondent No. 1 are invalid as tax was deducted at source by the employer - HELD THAT:- The mandate of Section 205 is absolutely clear that the assessee shall not be called upon to pay taxes himself to the extent to which tax has been deducted from the asessee s income. The object and purpose behind the provision is to the effect that when an obligation to deposit the tax as in the present case, is on the employer and if the employer has defaulted, the liability to pay such tax cannot be shifted so as to be foisted on the employee, who is in fact the beneficiary of the payment to be received from the employer and who would also become the beneficiary of the tax being deposited at source on his behalf. Such is the object of the provision. However, what the department has done is that without a warrant in law, the liability to pay such tax is being foisted on the petitioners, which is clearly in the teeth of Section 205 of the Income Tax Act. Thus, looked from any angle, it was not permissible for respondent No. 2 to raise any such demand against the petitioners. The impugned demand notices issued to the petitioners stand quashed and set aside being in breach of Section 205 of the Income Tax Act,1961. As clarified that if there is any other tax demand from the petitioners on any other count, all issues on the same are expressly kept open, as we have not adjudicated the other issues except the demand notice in relation to the TDS amounts not deposited by the petitioners employers. 2024 (9) TMI 1525 Application u/s 158AB - Procedure where an identical question of law is pending before High Courts or Supreme Court - HELD THAT:- Having perused the provisions of Section 158AB as also Rule 16 of the Income Tax Rules, 1962, as also the record which annexes Form 8A which sets out all the necessary details qua the proceedings as noted hereinabove, in our opinion, the application needs to be accepted as consented by the respondent/assessee. This Miscellaneous Application is accordingly allowed in terms of prayer clauses (a) (b). 2024 (9) TMI 1524 Rejection of Exemption u/s 11 - trust had spent a sum towards one Meenakshi Sundararajan, who is the wife of the founder of the trust - violation of Section 13(1)(c) - HELD THAT:- Tribunal has correctly held that the first issue with regard to the rejection of the claim made by the assessee trust for getting exemption under Section 11 of the Act is concerned, the payment to the said Meenakshi Sundararajan cannot be construed as a violation of Section 13(1)(c) of the Act because the trust was established well before the Act came into force, that is, on 01.02.1961 and the Memorandum of Association of the trust had paved the way for making this amount of honorarium to the trustees. When that being so, it is strictly in consonance with the Memorandum of Association and therefore, it cannot be construed as a violation of Section 13(1)(c). Tribunal has come to the conclusion that the assessee is entitled to claim exemption under Section 11 of the Act. When that being so, the Assessing Authorities' move to treat the entire income as a taxable income is erroneous and therefore, the assessment order passed by the Assessing Authority as confirmed by the CIT (Appeals) has been reversed. Claim of depreciation is concerned, the Tribunal followed its own decision in M/s.Mohamed Sathak Trust [ 2013 (10) TMI 1482 - ITAT CHENNAI ] and also decided the said issue in favour of the assessee. 2024 (9) TMI 1523 Addition u/s 69A - Treatment of cash deposits during demonetization in 2016 as unexplained income - HELD THAT:- The assessment for Assessment Year 2017-2018 was completed on 27.12.2019 u/s 143(3) of the Income Tax Act, 1961 by treating cash deposits was made by the appellant during demonetisation in 2016 as unexplained income u/s 69A. The case of the appellant is that the proceedings initiated pursuant to the notice under Section 143(2) and further notice u/s 142(1) and 11.10.2019 u/s 142(1) were confined to source of cash deposits made during the demonetization period and therefore inclusion of entire cash deposits as unexplained income of the Appellant was unwarranted. The appellant relied on the decision of Purushottam Jhawar, [ 2013 (10) TMI 838 - ANDHRA PRADESH HIGH COURT] rendered in the context of Section 158 BB of the Income Tax Act, 1961as it stood then the decision of the Allahabad High Court in Commissioner of Income Tax (Central), Kanpur vs. Fertilizer Traders, [ 2013 (12) TMI 725 - ALLAHABAD HIGH COURT] and that of this High Court in Principal Commissioner of Income Tax, Central 1, vs. A. Anbukkannan, [ 2019 (5) TMI 1129 - MADRAS HIGH COURT] . We have considered the arguments advanced by appellant. As such, no questions of law much-less any substantial questions of law arises for our consideration in this appeal. Therefore, this tax appeal is without any merits. The dispute relates to cash deposits made by the Assessment during demonetisation which was treated as unexplained income of the appellant. Appeal dismissed. 2024 (9) TMI 1522 Reassessment proceedings on income from aircraft leasing treated as royalty under IT Act and DTAA - AO had proceeded to hold that the consideration received by the writ petitioner would be in the nature of royalty for use of aircraft and thus taxable both in terms of Section 9 (1) (vi) as well as the provisions of the India-Ireland Double Taxation Avoidance Agreement [DTAA]. HELD THAT:- We find that it is the respondent who had proceeded on the premise that the revenue and consideration received was in connection with aircraft leasing and would thus amount to royalty by virtue of the relevant provisions of the DTAA. However, on a plain reading of Article 12 (3) (a) of the DTAA, the view as taken is rendered wholly unsustainable. We are also of the considered opinion that it would be wholly impermissible for the AO to invoke Section 9 (1) (vi) of the Act in light of the express exemption under the DTAA. Insofar as the question of interplay between provisions contained in a domestic legislation and those in the DTAA, we have in Telstra. [ 2024 (7) TMI 1340 - DELHI HIGH COURT] already held that the latter would override being more beneficial to the assessee. Accordingly, and for the aforesaid reasons we find ourselves unable to sustain the reassessment action. Writ petition is accordingly allowed. The impugned notice referrable to Section 148 is hereby quashed and set aside. 2024 (9) TMI 1521 Notice u/s 148 issued by Jurisdictional Assessing Officer w/o jurisdiction - petitioners submits that in terms of Section 151A, consequent upon publication of the notification dated 29th March, 2022 a notice u/s 148 can only be issued through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in Section 148 for issuance of notice, in a faceless manner, to extent provided in Section 144B of the said Act with reference to making assessment or reassessment of total income or loss of assessee - HELD THAT:-Having heard the learned advocates appearing for the respective parties and since, a jurisdictional issue has been raised, the present writ petition should be heard upon exchange of affidavits. Taking note of the prima facie case and the order passed by in the case of Girdhar Gopal Dalmia v. Union of India, [ 2023 (9) TMI 1555 - CALCUTTA HIGH COURT] the impugned notice issued by the Jurisdictional Assessing Officer u/s 148 of the said Act dated 31st March, 2024, is required to be stayed till the disposal of the writ petition or until further order whichever is earlier. Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date. Reply there to, if any, be filed within four weeks thereafter. Liberty to mention upon expiry of the period for exchange of affidavits. 2024 (9) TMI 1520 Stay of recovery of tax demand until the disposal of the appeal by the petitioner before the Commissioner of Income Tax (Appeals) - Since the petitioner is a widow and facing financial problem, she expressed her hardship in paying 20% of the total disputed demand as directed as directed by the third respondent - HELD THAT:- Considering the hardship expressed by the petitioner and the submissions made by the learned standing counsel for the respondents, this Court feels it appropriate to direct the petitioner to pay a sum of Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand only) instead of 20% of the total disputed demand as directed by the 3rd respondent vide impugned order. Accordingly, the petitioner petitioner is directed to pay a sum of Rs. 2,50,000/- within a period of four weeks from the date of receipt of a copy of this order and upon such deposit, the respondents shall stay the recovery of tax demand until the disposal of the appeal filed by the petitioner before the first respondent. This Court, generally at the instance of the learned Standing counsel, adjourns the matters for filing counter affidavits from time to time. In one matter, even after adjourning the matter on seven occasions, still the learned standing counsel sought adjournment on eighth occasion, which prompted this Court to impose the costs. While so, in the present case, it is important to note that Thiru Dr.B.Ramaswamy, learned Senior Standing Counsel appearing for the respondents has filed the counter affidavit immediately on the first day itself when the matter is taken up for admission. This Court places its appreciation on record towards best efforts taken by Thiru Dr.B.Ramaswamy, learned Senior Standing Counsel for the respondents, in filing the Counter affidavit without taking any adjournment, when the matter came up for first hearing and facilitated this Court to dispose of the matter without keeping it pending for want of counter. When the learned Senior Standing Counsel is able to file the counter on the very first day of hearing, this Court is unable to understand as to why the other learned standing counsels are unable to file the counter affidavits in time in their respective matters. Generally, the litigant public is under impression that pendency of the cases is at the instance of the Courts. But the Courts will always take strenuous efforts to dispose of the matters where both the parties have made out the pleadings. Majority of Writ Petitions have been pending for want of counter affidavits and lack of co-operation on behalf of the statutory authorities and the learned standing counsel and Government Pleaders who represent them. There cannot be any excuse for not filing the counter affidavits in time. 2024 (9) TMI 1519 CSR expenses claimed u/s 37(1) - applicability of Section 135 of the Companies Act, 2013 - how the expenses like building classrooms or toilets in U.P. or installing LED lights or planting trees in MECON Colony is incidental to the business of the assessee-company, i.e., rendering engineering/architectural consultancy services, has not been proved by the assessee-company - whether Section 135 of the Companies Act, 2013, which deals with Corporate Social Responsibility (CSR), could be applied to the financial year 2012-13? HELD THAT:- Tribunal by putting reliance on the judgment passed in the case of ACIT Vs. Jindal Power Limited [ 2016 (7) TMI 203 - ITAT RAIPUR] has reversed the findings without considering the applicability of Section 135 of the Companies Act and without making any assessment regarding its applicability based upon the financial year, in the present case, which has ended on 31st March, 2013. This Court, therefore, is of the view that the reference which has been considered by the Tribunal is required to be answered in favour of the Revenue. The aforesaid reference having been answered, the consequence would be that the order passed by the Tribunal is held to be bad in the eyes of law. Accordingly, the order passed by the Income Tax Appellate Tribunal, Kolkata, Ranchi Bench,[ 2023 (2) TMI 1335 - ITAT RANCHI] is quashed and set aside and the matter is remitted to the Tribunal for passing a fresh order in the case after giving opportunity of hearing to the parties. 2024 (9) TMI 1518 Unexplained investment - assessee could not bring anything on record to establish that this unexplained investment was from known source of income - CIT(A) deleted addition - HELD THAT:- We are inclined to agree with the decision of the CIT(A). We also find force in the contention of assessee that where the assessee furnishes a valid explanation for the investment made, the onus cast upon it is discharged. We are of the considered opinion that the decision of the co-ordinate bench in the case of M/s Ambika Enterprises [ 2023 (7) TMI 1401 - ITAT DELHI] relied upon by the assessee, squarely applies. It was held, on the issue of addition of share capital u/s 68 of the Act, that where there is no ambiguity about the identity of the partner and capital introduced from him, in such circumstances, if the AO was of the opinion that the amount is not proved in the hands of the partner, he should have considered it in his individual hands and not in the hands of the firm. We also find that this view is supported by the decision of Metachem Industries 1999 (9) TMI 21 - MADHYA PRADESH HIGH COURT] . We notice that the Tribunal while coming to the conclusion in the case of Ambika Enterprises [supra], has cited the decisions relied upon by the ld. counsel for the assessee as above. No infirmity in the order of the ld. CIT(A). Accordingly, we dismiss the appeal of Revenue. 2024 (9) TMI 1517 Bogus LTCG - sale proceeds fron from sale of shares treated as unexplained income u/s 68 - disallowance of exemption u/s 10(38) - HELD THAT:- We find force in the contention of the counsel on identical set of facts and on identical transactions in identical scrip the coordinate bench had considered the identical issue in the case Sanket Shailendra Modi [ 2022 (12) TMI 1537 - ITAT MUMBAI] thus we direct the AO to delete the impugned addition and allow the claim of the assessee u/s 10(38) of the Act. Decided in favour of assessee. 2024 (9) TMI 1516 TP Adjustment - disallowance of payment made for technical services received from the Associated Enterprise (AE) - assessee could not be able to fetch that project for which the biddings were made and hence the TPO as well as Ld. DRP took a view of the assessee failed to derive any benefit from the technical services and hence the expenses attributable to these bids are not allowable to the assessee - HELD THAT:- We observe that so far as the receipt of services by the assessee from its AE, vis- -vis the project bidding is concerned, there is no quarrel between the assessee and the Department. However, the main averment of the Department is that the assessee failed to derive any benefit from these expenses. We find force in the argument of assessee that the TPO is not empowered to apply benefit test while computing the ALP. It is settled position of law as held by apex court in SA builder [ 2006 (12) TMI 82 - SUPREME COURT] that revenue authorities could not sit in the Arm Chair of the an assessee, when it comes to the business decisions to be taken by an assessee in the interest of business. Thus we direct the AO to delete the addition. Regional support services provided by the assessee - assessee has filed certain additional evidences to rebut the observations made by the DRP - HELD THAT:- After considering the rival submissions, we are of the view that one more opportunity shall be granted to the assessee in the interest of justice to prove his case in respect of regional support services. Therefore, this ground of appeal(number 3) is allowed for statistical purposes. Interest on receivables - We are of the view that the for bench marking the loan transactions rate of LIBOR + 200 points is correct adjustment, in view of the recent decision of this Tribunal in the case of S P Capital (IQ) [ 2024 (9) TMI 1372 - ITAT HYDERABAD] we direct the AO to apply LIBOR + 200 points in this set of transaction. We also observe that the assessee had not disputed the interest receivable transaction as international transaction per se. Therefore, we affirm the view of the Ld. DRP wherein it was held that the impugned transaction is of international transaction and has to be computed having regard to the ALP. Taxability of interest income - case of the TPO that the assessee could not be able to reconcile the mismatch between the 26AS reflecting interest income as well as the profit and loss account showing interest income - We remit this issue to the file of TPO for examining afresh in the light of the new facts brought on record before the bench and decide the issue accordingly. Loans and advances given to employees by the assessee and later written off by the assessee - Assessee fairly agreed that out of Rs. 10.95 Lakhs an amount Rs. 4,15,190/- has been wrongly debited to the profit and loss account and hence the same may kindly be disallowed and for the balance advance the matter may kindly be restored to the file of AO as the assessee is now in possession of the details of the employees with PAN Card and Aadhar Card to prove the identity of the genuineness of the transactions - We are of the view that in the interest of justice, this issue would also go back to the file of TPO for examining afresh. Ground number 8 is allowed for statistical purposes. Security deposit given by the assessee for rental accommodation at the project site - main contention of the learned counsel for the assessee is that the assessee failed to provide the copies of agreements and other related documents before the lower authorities, and hence this disallowance has been made - HELD THAT:- We are of the view that heavens are not going to fall if one more opportunity would be given to the assessee to prove the genuineness of expenses in the shape of security advances given for the purpose of business. Therefore, in the interest of justice, we remit this issue also to the file of TPO for fresh adjudication. 2024 (9) TMI 1515 Accrual of income in India or not - Permanent Establishment [P.E.] in India - attribution of profits - estimation of gross profit attributable to the assessee - HELD THAT:- Respectfully following the decision of the co-ordinate benches in the earlier assessment years [ 2022 (1) TMI 1465 - ITAT MUMBAI] for AY 2017-18, we hold that the assessee does not have a PE in India. Accordingly, Ground Nos. 2, 3 and 4 are decided in favour of the assessee. 2024 (9) TMI 1514 Addition as unaccounted receipts - treated as advance received by the assessee, to the returned income - credibilty of statements of the Members of the Samiti - HELD THAT:- We find that the issue before us covered by the judgment of Narayansingh Gulabsinghji [ 2015 (4) TMI 622 - GUJARAT HIGH COURT] wherein held assessee was following the system regularly showing the mobilization account and the amount of advance were always stated in the subsequent AY against bills in that year and the revenue had not raised any objection for that treatment - when the learned CIT (Appeals) as well as the Tribunal have deleted the additions made by the Assessing Officer on account of Mobilization Advance in the year under consideration, it cannot be said that the learned CIT (Appeals) as well as the learned Tribunal have committed any error. On a perusal of the statements of the Members of the Samiti, it is evident that they did not have full knowledge on the progress of work and that the Sub Divisional Engineer, Rural Water Supply, was looking after the matter. Various work completion certificates clearly denotes that the work was completed subsequently and the income was also offered for taxation in subsequent years. We further find that it is beyond comprehension as to how the non commensurate amount of work in progress amounting to ₹ 69,31,666, convert the advances as an income. The Assessing Officer has ultimately added ₹ 2,00,95,900, as an unaccounted receipts from Samiti. The Assessing Officer has failed to note that the same has already been shown in the books of account by way of liability. Therefore, is it not the case that the receipts are not accounted at all. Consequently, there is no instance to interfere with the cogent observations of the learned CIT(A). Accordingly, the order passed by the learned CIT(A) is upheld by dismissing the grounds raised by the Revenue. 2024 (9) TMI 1513 Validity of assessment u/s 153A - unexplained cash credit u/s.68 - Sustainability of the additions made by the A.O in absence of any incriminating material found in the course of the search proceedings - Non obtaining a valid approval u/s.153D Whether or not assessment proceedings in the case of the assessee company for A.Y.2010-11 were unabated as on the date on which search seizure proceedings u/s. 132 of the Act were conducted on it, i.e. on 24.10.2017? - HELD THAT:- Admittedly, it is an undisputed fact that assessment proceedings in the case of the assessee company for the subject year, i.e. A.Y.2010-11 on the date of search i.e. on 24.10.2017 were unabated. On this aspect, neither anything to the contrary is discernible from the record nor any contention disputing the said factual position had been raised before us by the Ld. CIT-DR or stated in the report filed by the A.O. Whether any incriminating material pertaining to the subject year, i.e. A.Y.2010-11 was found in the course of search seizure proceedings? - We are of a firm conviction that now when the share application money received by the assessee company from the mentioned share applicants is found recorded in its audited books of accounts, and had formed part of its financial statements that were enclosed along with its original return of income for the said year, it is difficult to fathom that as to how the same could be brought within the meaning of Incriminating material found in the course of search proceedings conducted. Rather, the fact that shares were issued by the assessee company to the aforementioned respective share applicants in lieu of the share application money that was received from them much prior to the search and seizure proceedings, therein fortifies the assessee's claim that the share application money that was received from the aforementioned parties could not be held as incriminating material found in the course of search and seizure proceedings conducted on the assessee company on 24.10.2017. Although it is the claim of the department that the assessee company during the year under consideration was in receipt of share application money of Rs.5.75 crore from 2 paper/shell companies but there can be no gainsaying that no incriminating material was found or unearthed during the course of search proceedings which would support the same. In fact, it is not even the case of the department that any incriminating material evidencing receipt of accommodation entries by the assessee company in the garb of share application money/share capital/share premium from the aforementioned investor/subscriber companies was found in the course of the search seizure proceedings conducted on 24.10.2017. Statements of the directors of the investor companies - We are unable to persuade ourselves to subscribe to the aforesaid claim of the department. As the statements of the directors of the investor companies were recorded by the DDIT(Inv.), Unit-IV, Kolkata much prior to the search seizure proceedings conducted on the assessee company on 24.10.2017, therefore, the same cannot be brought within the meaning of incriminating material found or unearthed during the course of search seizure proceedings conducted on the assessee company. Thus, unable to concur with the A.O (as stated in his report dated 08.09.2023)/CIT-DR that the adverse statements of the directors of the investor companies, which were recorded much prior to the search conducted on the assessee company can be brought within the meaning of incriminating evidence found in the course of the search seizure proceedings conducted on the assessee company on 24.10.2017 which, thus, vested jurisdiction with the A.O to make additions while framing the assessment u/s.153A of the Act. Evasive reply of Shri Sanjay Agrawal, director of the assessee company in his statement recorded u/s. 132(4) dated 24.10.2017 and u/s. 131(1A) - We are of a firm conviction that the mere fact that Shri Sanjay Agrawal, director of the assessee company, had in his statement recorded u/s. 132(4) of the Act, dated 24.10.2017 failed to furnish details as regards the investments made by the investor/subscriber companies can by no stretch of imagination render the said statement as incriminating in nature. Also, we find no substance in the claim of the department that as Shri Sanjay Agrawal in his reply to Question No.7 of his statement recorded u/s.131(1A) of the Act dated 29.01.2018, had stated that the share capital/premium was received by the assessee company from Kolkata based investor companies through banking channels, therefore, the same rendered the said statement as incriminating in nature. At the threshold, we may observe that as the aforesaid statement dated 29.01.2018 (supra) was in itself recorded much after conclusion of the search proceedings, therefore, the same cannot be brought within the meaning of incriminating material found in the course of search seizure proceedings conducted on the assessee company on 24.10.2017. Insignificant financials of the investor companies - It is only where any incriminating material is found or unearthed in the course of search proceedings that the requisite jurisdiction to make addition regarding unabated assessment of the assessee company for the subject year would be vested with the A.O. We are of a strong conviction that drawing of adverse inferences regarding the financial credibility of the investor companies by the A.O de-hors finding of any incriminating material in the course of search seizure proceedings would not vest jurisdiction with the A.O to make addition in its unabated assessment for the subject year, i.e. A.Y.2010-11 We are of a firm conviction that as the observation of the A.O that investors/subscriber companies did not have necessary creditworthiness to make investment towards share application money/share capital/share premium cannot be brought within the meaning of incriminating material found in the course of search seizure proceedings conducted on the assessee company on 24.10.2017, therefore, the A.O on the said count itself was divested of his jurisdiction to make any addition while framing assessment in the unabated assessment of the assessee company for A.Y. 2010-11. 74. We, thus, in terms of our aforesaid observations are of the considered view that as held by the Hon'ble Apex Court in the case of Abhisar Buildwell (P) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT ] in absence of any incriminating material found in the course of search proceedings, no addition regarding the unabated assessment of the assessee company for the subject year, i.e. A.Y.2010-11 could have been made. 75. Accordingly, in the backdrop of our aforesaid deliberations, we concur with the Ld. AR that the A.O had wrongly assumed jurisdiction and made an addition u/s. 68 of the Act while framing the assessment u/s. 143(3) r.w.s. 153A. Absence of a valid approval u/s. 153D of the Jt. CIT, Range Central - A.O in the present case before us, had after forwarding the draft assessment order for approval u/s. 153D of the Act to the Jt. CIT on 26.12.2019 not only continued with the assessment proceedings, but had also after receiving the approval of the Jt. CIT, Range-Central, Raipur vide his letter, dated 30.12.2019, tinkered with the said draft assessment order which, thus, had resulted to material variance/difference between the final assessment order and the draft assessment order that was approved by the Jt. CIT. As observed by us hereinabove, it is neither the case of the department that the facts pertaining to continuation of the assessment proceedings after forwarding the draft assessment order for approval of the Jt. CIT, Range-Central, Raipur, i.e. from 27.12.2019 to 28.12.2019 were brought by the A.O to the notice of the Jt. CIT; or any fresh draft assessment order incorporating the aforementioned material facts was forwarded to the Jt. CIT, Range-Central, Raipur for his fresh approval u/s. 153D of the ActOnce the draft assessment order is approved by the Jt. CIT u/s. 153D of the Act, then the A.O thereafter is rendered as functus officio and can only pass the final assessment order as approved by the Jt. CIT. An analogy in support of our aforesaid view can safely be drawn from the judgment of the Hon'ble Apex Court in the case of Panchmahal Steel Ltd. Vs. U.A.Joshi, ITO and another [ 1996 (9) TMI 8 - SUPREME COURT ] In the present case before us not only the A.O had tinkered with the draft assessment order that was approved by the Jt. CIT, Range-Central, Raipur vide his letter dated 30.12.2019 but had also come up with a final assessment order, which as observed by us hereinabove is found to be materially different from the draft assessment order that was approved by the Jt. CIT on 30.12.2019. Thus we are of a firm conviction that as the Jt. CIT, Range-Central, Raipur had no occasion to consider the changes/modifications/alteration carried out by the Dy.CIT(Central Circle)-2, Raipur to the draft assessment order that was approved by him on 30.12.2019; nor was informed of the assessment proceedings that were continued by the A.O after forwarding of the draft assessment order on 26.12.2019, therefore, we concur with the Ld. AR that the final assessment order was passed by the A.O without obtaining the approval of the Jt. CIT, Range-Central, Raipur as required per the mandate of Section 153D of the Act.Accordingly, in absence of a valid approval having been granted by the Jt. CIT, Range-Central, Raipur, based on which, the common final assessment order had been passed by the A.O u/s. 143(3) r.w.s. 153A/143(3) of the Act, dated 30.12.2019, we are of the view that the same cannot be sustained and is liable to be struck down on the said count itself. 2024 (9) TMI 1512 Unexplained money u/s 69A - unexplained cash deposits in bank account - HELD THAT:- On going to the facts of the instant case, the submissions of the assessee along with bank statement filed by the assessee during the course of appellate proceedings before Ld. CIT(Appeals), the income tax returns for various years filed by the counsel for the assessee before us for our perusal, in our considered view, it is a fit case where the addition made by the assessing officer is liable to be deleted. This is for the reason that the assessee is a trader in garments on semi-retail basis and is carrying on business on a small scale. The assessee did not file the return of income for the impugned year under consideration owing to the minor income earned by the assessee as a result of which the taxable income of the assessee was falling below the prescribed taxable limit and hence no tax was payable by the assessee for the impugned year under consideration. Asssessee has also submitted that the assessee could not cause appearance before the assessing officer since the notices were issued at the email address of the erstwhile consultant of the assessee and therefore, the assessee could not respond to such notices. Accordingly, looking into the instant facts, the additions made by the assessing officer directed to be deleted and the appeal of the assessee is allowed. 2024 (9) TMI 1511 Reopening of assessment u/s 147 - deemed dividends addition u/s 2(22)(e) - HELD THAT:- Merely alleging that the entire story made up by the assessee is clearly an afterthought would be of no help to revenue unless the factual evidence brought on record and contention of the appellant are disproved. CIT(A) has been justified in relying on the judgement delivered on similar fact in the case of Pradip Kumar Malhotra [ 2011 (8) TMI 16 - CALCUTTA HIGH COURT ] Therefore, no interference is called for in the decision of the Ld. CIT(A) in holding that the payment of Rs. 3.00 crores on account of security does not fall within the definition of deemed dividends as per the provisions of section 2(22)(e). In view of that matter we find no infirmity or perversity in the decision of the Ld. CIT(A) to the facts on record in quashing the reopening of the assessment u/s 147 of the Act and that payment of Rs. 3.00 crores on account of security does not fall within the definition of deemed dividends as per the provisions of section 2(22)(e) of the Act. Thus, the ground no. 1 and 2 of the department are rejected. Advancement paid by the company to the appellant assessee hit by section 2(22)(e) - In the present case the assessee has leased prime properties at Chandigarh and received an advance rent in respect of the said premises leased out to the company, and such advance was to be later adjusted towards rent payable by the company. In our view, the amount of advance rent received by the assessee from the company would be a commercial transaction and it would certainly fall outside the purview of section 2(22)(e) - The assessee being having substantial interest in the company would not change the character of the transaction. In the present case where we have a situation of contrary views having been expressed by the non-jurisdictional High Courts and there is no decision of M/s Vegetables Products Ltd [ 1973 (1) TMI 1 - SUPREME COURT] where it was held that where the provision is capable of more than one reasonable interpretation and different High Courts have taken different view on the matter, the view which is favourable to the assessee should be adopted. In view of the same, we are inclined to follow the views expressed by Hon ble Karnataka High Court in the case of Smt. Jamuna Vernekar [ 2021 (2) TMI 757 - KARNATAKA HIGH COURT] where it was observed that such loan or advance is given to a shareholder as a consequence of any further consideration which is beneficial to the company received from such a shareholder is a commercial transaction and it is outside the purview of section 2(22)(e) of the Act. In the present case, advance rent or even security was given in lieu of the use of rented premises in terms of lease agreement and therefore, such an advance rent and not even loan cannot be said to be deemed dividend within the meaning of the provision of section 2(22)(e) of the Act. Thus, we hold that advancement paid by the company to the appellant assessee amounting to Rs. 86,01,836/-is not hit by section 2(22)(e) and as such, the said addition is deleted. Thus, the ground. No.1 of the CO. of the assessee is allowed. 2024 (9) TMI 1510 Rejection of registration u/s 12A(1)(ac)(iii) - application made in Form No.10AB of the Income-Tax Rules, section 12A(1)(ac)(ii) had inadvertently been typed on account of typographical error instead of section 12A(1)(ac)(iii) - HELD THAT:- It is evident that the appellant/assessee had committed a technical mistake in preparing the application under Section 12A(1)(ac)(ii) instead of 12A(1)(ac) of the Act. It was also brought to the notice of the Bench that the assessee had filed revised Form 10AB for seeking registration under the correct provisions i.e. Section 12A(1)(ac)(iii) of the Act which could have been considered by the CIT(Exemption). In the light of the latest decisions in Sri Jeyamkonda Choleeswara Soundaranayakai Amman Kumbhabiskheka Mala Kuzhu and Raj Krishan Jain Charitable Trust s cases [ 2024 (6) TMI 1400 - ITAT DELHI ] the typographical error deserves to be corrected. Therefore, it would be appropriate and reasonable if the appeal is remanded back to the file of the CIT(Exemption) for fresh adjudication by considering amended application of the appellant under the required provisions. Appeal is allowed for statistical purposes. 2024 (9) TMI 1509 Addition u/s 68 - Bogus share capital and share premium received - identity and creditworthiness of the subscriber companies and the genuineness of the transactions not proved HELD THAT:- There is no justification for the huge premium charged by the assessee nor the assessee has been able to establish the same before the Ld. AO nor even before the Ld. CIT(A). As discussed above , mere identity of the creditor is not sufficient but the genuineness of the transaction as well as the creditworthiness of the creditor has to be established which the assessee has miserably failed to do. The onus is heavy on the assessee in case of private placement of shares as the details are in the knowledge of the assessee and it ought to have established the creditworthiness of the share applicants/shareholders and the genuineness of the transactions. The directors also failed to appear before the Ld. AO. Most of the applicants are not having any regular source of income except for income under the head income from other sources nor have strong financials to justify the investment with huge premium, as would be evident from Annexure SP which forms part of the order. Neither the applicants are likely to receive any dividend nor the assessee has carried out any valuation to justify the huge premium charged. Accordingly, the transactions relating to issue of shares are not genuine nor the creditworthiness of the creditors has been established. Hence in view of the decision of BST Infratech Ltd. [ 2024 (4) TMI 989 - CALCUTTA HIGH COURT] and others and the discussion made out by the Ld. CIT(A) to demonstrate that the applicants are shell companies, there does not appear to be any justification to interfere with the order of the Ld. CIT(A) and his order is hereby confirmed - Decided against assessee. 2024 (9) TMI 1508 Rejection of claim of the assessee u/s 11 - assessee has not filed audit report in Form 10B along with return of income - CIT(A) rejected the grounds raised by the assessee with the observation that power of condonation of delay in filing Form 10B rest with CIT (Exemptions) only and not with CIT(A) - HELD THAT:- In the present case, the assessee has to file the audit report in Form 10B before the due date as per Rule 12A(1)(b) of the Rules. As observed that the above conditions of filing the Form 10B was relaxed by the CBDT in the earlier assessment years, therefore, it clearly shows that it is only directory in nature and not mandatory, since, it is in compliance with Rules framed for availing the benefit under the provisions of Sec.11. It is held that to be directory in nature. See Shri Chandraprabhuji Maharaj Jain Juna Mandir Rust [ 2019 (8) TMI 363 - MADRAS HIGH COURT] and Savier Kelavani Mandal (P.) Ltd. [ 2012 (9) TMI 1049 - GUJARAT HIGH COURT] . Thus allow the claim made by the assessee and, accordingly direct the Assessing Officer to allow the claim of the assessee u/s 11 of the Act. Decided in favour of assessee. 2024 (9) TMI 1507 Intimation u/s 143(1) restricting TDS based on Rule 37BA of the Income Tax Rules - Rectification of mistake u/s 154 denied and credit of difference TDS could not be given - contention raised is that vide this communique the credit difference TDS for the assessment year 2019- 20 was denied to the assessee, without affording any opportunity to the appellant of being heard - HELD THAT:- There is nothing in the letter dated 23.01.2023 to suggest that the assessee was given any opportunity of being heard for taking up of its rectification application u/s 154 of the Act once again, and before rejecting the same by way of any decision on merits. In the given situation, issuance of notice to the assessee was one of the essential requirements of section 154(3) of the Act to be complied with by the authority. At the cost of repetition, we mention that as submitted before us by Learned AR, no notice came to be issued by the ITO to the assessee for the purpose of any proceedings or before passing of any order or prior to the communique dated 23.1.2023 came to be issued. For the foregoing reasons and findings, we find that once the department had allowed credit of TDS passed u/s 143(1) r.w.s. 154 of the Act realizing its mistake made in the Intimation, and the appeal filed by the assessee before Learned CIT(A) had become infructuous, neither there was any reason for issuance of letter dated 23.01.2023 by the same Assessing Officer, intimating the assessee that its grievance u/s 154 of the Act could not be accepted, and that the assessee could file the appeal against the order u/s 143(1) of the Act, particularly when the assessee had already filed an appeal on receipt of the Intimation, and same had become infructuous with the passing of the order dated 18.01.2023. Impugned order passed by Learned CIT(A) is hereby set aside. We hereby direct the Assessing Officer to give effect to this judgment, and his own order whereby the mistake made in the Intimation issued initially was rectified and the assessee was given credit of TDS. 2024 (9) TMI 1506 Accrual of Income in India - Taxability of receipts as 'fees for included services' under India-USA DTAA - addition on account of receipts from remittances on account of providing IT support services, maintenance services, etc., to its sister concerns in India for the reason that the operations of the assessee company is highly complicated and systems have been codified and methods to be adopted as per business need AO has not accepted the assessee s explanation above that the services rendered by it is not taxable as there is a clear nexus between services rendered and the compensation received by assessee company after going through the recital of service agreement entered into between assessee and its sister concern and treated the total remittances as fee for technical services u/s. 9(1)(vii)(b) of the Act and taxed the same u/s. 115A Main argument of the assessee was that merely providing highly complicated services, as understood by Revenue and the same having nexus with the compensation received by it, by itself will not result in taxing such receipts as fees for included services unless it satisfies the definition of FIS under DTAA between India and USA - HELD THAT:- We are in agreement with the arguments of ld.counsel that in order to constitute a receipt fees for included services [FIS] under Article 12 of India-US DTAA, services rendered must make available technical knowledge, expertise, skill, know how or processes or consist of the development and transfer of a technical plan or technical design. These services rendered by assessee to its sister concern and compensation received on account of the same does not fall in these typical categories mentioned in paragraph 4(b) which includes making technology available nor to be taxable under Article 12 of the tax treaty as FIS, the payment should fit into the terminology make available wherein the technical knowledge, skill etc., must remain with the person receiving the services even after the particular contract comes to an end. Want to back of that, in the present case there is no such clause in the service agreement which we have gone through and substantially reproduced in our order. The nature of services provided by assessee which the company merely centralizes the IT related services to achieve a standardized IT environment and payment towards access to developed standard business / engineering applications, data management by providing disaster recovery / back up services, helpdesk support services, user administration, maintenance of IT infrastructure support services, telecom services do not make available any technical knowledge, experience, skills, etc., to the recipient, since the recipient cannot at any time independently manage the IT environment and requires continuous re-course to the company for the said services. Hence the service provided by the assessee company do not fall within the ambit of fee for included services as defined under Article 12 of India US DTAA and hence, not taxable in India. Since the assessee is not having any PE in India and he is covered by India US DTAA and MOA, the nature of services rendered by the assessee on account of which received the remunerations cannot be described as fee for included services and hence, not taxable in India. We also hold that the amount received cannot be treated as royalty even under the provisions of section 9(1)(vii), because the service rendered cannot constitute technical services so as to cover u/s. 9(1)(vii) of the Act. Hence, we delete the addition and allow this issue of assessee s appeal on merits. Point of reconciliation being difference in figures between Form No.26AS and Form No.15CA - We are of the view that Form No.15CA filed by the banker and the assessee was not in a position to verify the details forming part of Form No.15CA. The assessee has made claim as per Form No.26AS, this is subject to verification. The assessee will be provided necessary details as received by the AO in Form No.15CA and will confront the same to the assessee so that the assessee can peruse the same and provide suitable response and reconcile the figures. In term of the above, this particular verification is restored back to the file of the AO. 2024 (9) TMI 1505 Income deemed to accrue or arise in India - income qualifies as FIS - nature of services is highly technical - DRP to conclude that the report or information generated by access to the software of assessee, can be called Technical as with regard to the nature of services generating FIS - HELD THAT:- In the present case, only commercial information is transferred to the end user and not technical knowledge as required under Article 12(4)(b) to constitute FIS. Clearly, commercial information/output from a technical application does not constitute FIS as there is no technical design, process or plan which has been transferred to the client providing enduring benefit. Clause 2 of agreement clearly mentions all rights and test of Application remains with assessee and end users have not been given source code of the application which constitute technical knowledge an per 12(4)(b). In this context, we find force in the contention of Ld. Counsel, that when no source code was shared with the end users, said end user cannot be said to have been enabled for any enduring benefit. In present case, this test is not satisfied by any stretch as the contract is limited only to grant of access to the software during the subscription period and on the expiry of the subscription period, the access to the software gets terminated and the customer content also stands deleted. Facts the 'make available clause is not satisfied, as erroneously held by the DRP. Decided in favour of assessee. 2024 (9) TMI 1504 Rectification u/s 254 - whether the assessment in a case wherein requisition has been made u/s 132A of the Act, the jurisdiction to complete the assessment is to be governed by the provisions of section 153A of the Act? - HELD THAT:- Admittedly, in the present case, on perusal of the order of tribunal it is discernible that the tribunal had considered the submissions of both the parties and have expressed a positive view on the legal contention raised by the assessee. It is also apparent that the contentions raised in the present MA by the department are explained / clarified under an exhaustive submission. We herein may observe that such lengthy contention which needs to be looked into and dealt with under a long-drawn deliberation and debate, therefore, such arguments does not suggest a mistake apparent from record that can be pointed out for rectification invoking the provisions of section 254(2). Further, the prayer of the department to re-call, reinstitute and rehear the present matter would equate to review, which is absolutely not within the purview / powers of Tribunal conferred upon it by the provisions of section 254(2). Regarding the mandate of law which allows the tribunal to deal with miscellaneous application of the appellant, it is to be appreciated that the tribunal is having limited powers to rectify any apparent and glaring mistake on the face of records. The tribunal is not expected to re-hear the entire case on merits or to revisit its earlier order and to deal with the merits on the basis of arguments by the appellant. We reject the MA filed by the department, wherein a request has been made for rehearing / review of the earlier order of the tribunal in the garb of rectification of mistake by way of long drawn process of reasonings and arguments which is neither permissible nor allowed under the provisions of Act. Since the department has squarely failed in point out any mistake apparent from records which calls for rectification within the provisions of section 254(2) in the impugned order of tribunal, thus, in absence of such preconditions to allow an application under section 254(2) which warrants for rectification of Tribunal's order. The lengthy contentions raised by the department in present MA cannot be accepted at this stage, thus, the same are rejected. Customs 2024 (9) TMI 1503 Imposition of duty and penalty on the appellant on the pilfered goods in terms of Section 45 of the Customs Act, 1962 read with Regulation 6 of Handling of Cargo in Customs Area Regulations - principal contention of the appellant is that the appellant was not a party to the Panchnama and security of the container was the prime responsibility of the CISF deployed at ICD Tughlaqabad - HELD THAT:- As is manifest from a plain reading of Section 45 (2) (b) of the Customs Act, 1962, the custodian is duty bound to not permit such goods to be removed from the customs area, except under and in accordance with the written permission of proper officer or otherwise dealt with. Section 45(3) of the Act provides that the custodian of the imported goods having been in custody is liable to pay duty in case they are pilfered while in custody. Imported Goods are defined in Section 2 (25) as goods brought into India from a place outside. Admittedly, appellant is a Customs Cargo Service Provider. Admittedly, the goods in question had entered the customs area as defined under the Act and were placed in the custody of the appellant - In terms of Section 45 of the Act and the HCCAR , being the custodian of imported goods, appellant was burdened with the responsibility of safe custody of the imported goods. Appellant cannot escape such burden by shifting its responsibility upon the CISF and has therefore been rightly held liable to pay customs duty and penalty as prescribed under Section 45 (3) of the Act and Regulation 6 (1) (j) of HCCAR, 2009. The contentions raised by the petitioner have been duly addressed - the appeal does not raise any substantial question of law. There are no merit in the instant appeal. The appeal shall stand dismissed. 2024 (9) TMI 1502 Rejection of Extra Duty Deposit (EDD) paid by the petitioner as refund claim - time barred in terms of Section 27 of the Customs Act, 1962 - HELD THAT:- There is no justification in the impugned order passed by the respondent rejecting the request of the petitioner for refund of the amount paid by the petitioner pursuant to Circular No.11/2001-Cus dated 23.02.2001 of the Central Board of Indirect Taxes. The amount that was collected by the Assessing Officer in view of the Special Valuation Branch (SVB) proceedings are nothing to deposit and not a customs duty as is contemplated under Section 12 of the Customs Act, 1962, although such deposit were eligible to be appropriated towards the duty liability of the petitioner after final assessment of the Bill of Entry - As such, amount that has been calculated over and above the tax duty payable by the petitioner is to be refunded back only after the Bill of Entries filed are finally assessed and assessment is completed. Needless to state, such refund will be subject to the petitioner satisfying that there will be no unjust enrichment on account of refund in terms of Section 27 of the Customs Act, 1962. The impugned order is set aside with consequential relief. The respondents are directed to complete the proceedings within a period of six months from the date of receipt of a copy of this order - Petition allowed. 2024 (9) TMI 1501 Levy of Customs duty on imported goods destroyed in fire in SEZ units - procurement of duty free goods indigenously by availing exemption in terms of various provisions goods under the SEZ Act, 2005 and SEZ Rules, 2006 - the subject goods for authorized operations not used thereby violating the said provisions - Seeking remission of customs duty - HELD THAT:- This Tribunal has taken a consistent view that in case of any destruction due to natural cause in the SEZ, the SEZ unit is entitled for the remission of duty in terms of Section 23 of Customs Act, 1962. Therefore, as of now there is no dispute on the legal issue that the SEZ unit is eligible for the remission of the customs duty in case the goods is destroyed in the SEZ unit. However, the appellant have not opted for the remission of duty by filing appropriate application before the competent authority. Therefore, for this limited purpose, the matter needs to be remanded to the Adjudicating Authority. Liberty is granted to the appellant to file an appropriate application in terms of Section 23 of the Customs Act, 1962 and rules made thereunder , if any, along with all the relevant documents for seeking remission of duty which shall be disposed of by the competent authority in accordance with law. The impugned order is set aside - Appeal is allowed by way of remand to the adjudicating authority for passing a fresh order after observance of principles of natural justice. Corporate Laws 2024 (9) TMI 1500 Maintainability of amended petition filed by the Respondent without a formal application for amendment - fresh petition in the guise of an amendment - complete redraft of the original petition with additional grounds - HELD THAT:- The amendments were substantial in nature though the learned counsel for the Respondent alleges it to be mere explanatory. Admittedly new reliefs have been added in the amended petition as also a new party being impleaded. Further the additional acts of oppression have also been added for which, of course, an opportunity ought to have been granted to the appellant to rebut such a move. In Aurosagar Estates Private Limited and Ors Vs M.C. Davar Holdings Private Ltd [ 2017 (8) TMI 867 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, MUMBAI ] this Tribunal held ' as the amendment sought with regard to a fresh cause of action which has taken place more than three years back on 15th October, 2012, prayer made in amendment petition being barred by limitation, the Tribunal was not competent to allow the amendment.' Thus, for such substantial amendments, an application ought to have been moved with such proposed amendments and with a liberty to the appellants to rebut such proposed amendments and only thereafter, the amended petition ought to have been brought on record. The impugned order does not adhere to the principles of natural justice as it did not give an opportunity of being heard to the appellant - appeal disposed off. Securities / SEBI 2024 (9) TMI 1499 Commercial transactions undertaken by and between private entities involving acquisition of shares of a life insurance company - Allegations of fraudulent acts and undue profits made by certain entities in the purchase and sale of equity shares of a life insurance company - HELD THAT:- This Court is of the view that where a field is regulated and where an appropriate regulator has either already taken note of and addressed the transaction or is investigating the said transaction, the Court in writ jurisdiction should not interfere. In such a situation, the regulator must be allowed to do its job. Writ of Mandamus being a public law remedy may be issued against a private body discharging public functions, however, it cannot be used for enforcement of purely private contracts between parties. The tendency to examine commercial transactions from the perspective of reasonableness in Article 226 jurisdiction is to be eschewed as it would make every valuation, sale, purchase of shares or property or every merger, acquisition, de-merger, subject to judicial review. If according to the petitioner, there is a criminality involved in the aforementioned transactions, as seems to be unarticulated submission, the petitioner is always at liberty to file appropriate proceedings in accordance with law. This Court also finds that though a personal allegation has been made against Chairperson SEBI, yet neither the writ petition has been amended nor she has been impleaded as a respondent. This Court is of the view that even if the Chairperson of SEBI has had a professional relationship with Max group in the past, it will not take away the Regulator s obligation and duty to decide the matter in accordance with law. Also, if the final decision of SEBI is in any manner influenced or affected because of the alleged erstwhile professional relationship of its Chairperson, the Petitioner shall surely be entitled to agitate the said ground at that stage. Consequently, keeping in view the fact that the Petitioner challenges private commercial transactions between commercial entities as well as the fact that shareholders of the public limited company have approved the transactions and in addition insurance and banking sectors are regulated and the independent sectoral regulators, namely, SEBI and RBI are seized of the controversy, this Court is of the view that it should not act as a super regulator and interfere in exercise of Article 226 jurisdiction. Accordingly, this Court disposes of the present writ petition with a direction to SEBI and RBI to complete the investigation as expeditiously as possible. If, after completion of any investigation, any further action is required to be taken, the same shall be taken by independent sectoral regulators in accordance with law. This Court clarifies that the rights and contentions of all the parties are left open including with regard to the locus standi of the Petitioner and maintainability of the present writ petition. Insolvency & Bankruptcy 2024 (9) TMI 1498 Maintainability of petition filed under Section 7 of the IBC, 2016 - dismissal on the ground that there is no evidence to show the loan given to the Corporate Debtor was due and payable - no record of default or demand letter placed by the Financial Creditor to show debt and default - failure of settlement between the parties - HELD THAT:- The Tribunal was prima facie satisfied the debt is due and not paid on demand, the application needs to be admitted unless it is incomplete, in which case, a notice to be given to the applicant to rectify the defects within seven days of receipt of notice from the Adjudicating Authority, per Innoventive Inds Ltd [ 2017 (9) TMI 58 - SUPREME COURT] . In Shobhnath Ors Vs Prism Industrial Complex Ltd [ 2019 (8) TMI 1700 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] , this Tribunal held the Adjudicating Authority is only required to ensure there is a debt and default on the basis of the record produced before it. On perusing the record, Balance Sheets of the corporate debtor as also the legal notice of demand prima facie reveal there is no impediment to admit the petition under Section 7 of the Code against the Respondent/Corporate Debtor. Matter remanded to the Ld. NCLT to proceed further as per law - appeal allowed. PMLA 2024 (9) TMI 1497 Rejection of bail application - Money Laundering - collection of large amounts by promising job opportunities to several persons in various positions in the Transport Department - offences u/s 120B, 419, 420, 467 and 471 of the Indian Penal Code and Sections 7, 12, 13(2) read with Section 13 (1) (d) of the Prevention of Corruption Act, 1988 - main document relied upon by the ED showing incriminatory material against the appellant is a part of the pen drive seized by the State police from the appellant's premises in connection with scheduled offences. HELD THAT:- There is also prima facie material to show a deposit of cash amount of Rs. 1.34 crores in the appellant's bank account. At this stage, the contention of the appellant regarding the deposit of remuneration received as MLA and agriculture income cannot be accepted in the absence of any prima facie evidence to show the existence of the appellant's cash income as MLA and the appellant's agriculture income. Therefore, at this stage, it will be very difficult to hold that there is no prima facie case against the appellant in the complaint under Section 44 (1) (b) of the PMLA and material relied upon therein. Effect of delay in disposal of cases - HELD THAT:- In the offence under the PMLA, the charge has not been framed. In view of Clause (d) of sub section (1) of Section 44 of PMLA, the procedure for sessions trial will have to be followed for the prosecution of an offence punishable under Section 4 of the PMLA. In view of clause (c) of sub section (1) of Section 44, it is possible to transfer the trial of the scheduled offences to the Special Court under the PMLA. The existence of a scheduled offence is sine qua non for alleging the existence of proceeds of crime. A property derived or obtained, directly or indirectly, by a person as a result of the criminal activity relating to a scheduled offence constitutes proceeds of crime. The existence of proceeds of crime at the time of the trial of the offence under Section 3 of PMLA can be proved only if the scheduled offence is established in the prosecution of the scheduled offence. Therefore, even if the trial of the case under the PMLA proceeds, it cannot be finally decided unless the trial of scheduled offences concludes. In the facts of the case, there is no possibility of the trial of the scheduled offences commencing in the near future - there are no possibility of both trials concluding within a few years. There are a few penal statutes that make a departure from the provisions of Sections 437, 438, and 439 of the Code of Criminal Procedure, 1973. A higher threshold is provided in these statutes for the grant of bail - reference made to Section 45 (1) (ii) of PMLA, proviso to Section 43D (5) of the Unlawful Activities (Prevention) Act, 1967 and Section 37 of the Narcotic Drugs and Psychotropic Substances Act, 1985. The provisions regarding bail in some of such statutes start with a non obstante clause for overriding the provisions of Sections 437 to 439 of the CrPC. The legislature has done so to secure the object of making the penal provisions in such enactments. For example, the PMLA provides for Section 45 (1) (ii) as money laundering poses a serious threat not only to the country's financial system but also to its integrity and sovereignty. Considering the gravity of the offences in such statutes, expeditious disposal of trials for the crimes under these statutes is contemplated. Moreover, such statutes contain provisions laying down higher threshold for the grant of bail. The expeditious disposal of the trial is also warranted considering the higher threshold set for the grant of bail - It is a well-settled principle of our criminal jurisprudence that bail is the rule, and jail is the exception. These stringent provisions regarding the grant of bail, such as Section 45 (1) (iii) of the PMLA, cannot become a tool which can be used to incarcerate the accused without trial for an unreasonably long time. The appellant has been incarcerated for 15 months or more for the offence punishable under the PMLA. In the facts of the case, the trial of the scheduled offences and, consequently, the PMLA offence is not likely to be completed in three to four years or even more. If the appellant's detention is continued, it will amount to an infringement of his fundamental right under Article 21 of the Constitution of India of speedy trial. The appellant shall be enlarged on bail subject to fulfilment of conditions imposed - appeal allowed. Service Tax 2024 (9) TMI 1496 Levy of service tax - renting of immovable property service - Blue Coast sub-leased commercial spaces in the Plaza to the unit holders - marketing and sub-leasing of commercial space in the hotel project of Silver Resort - extended period of limitation - penalty u/s 78A of the Finance Act. Whether Silver Resort rendered renting of immovable property service to the unit holders? - HELD THAT:- The Silver Resort rendered renting of immovable property service to the unit holders. Under the said Agreement DIAL granted the exclusive right and authority to Silver Resort to undertake and implement designing, development, financing construction, ownership, operation and maintenance of Asset Area-3 of the IGI Airport. Silver Resort, in turn entered into a JDA with Blue Coast for joint development of the said project. In terms of this JDA, Blue Coast identified interested unit holders and a tripartite agreement was entered between Silver Resort, Blue Coast and the unit holders for grant of leasehold rights to the unit holders of the commercial units. Blue Coast was entitled to receive consideration from the customers in terms of the tripartite agreement, a part of which was shared with Silver Resort in terms of the JDA. It is on such amount received by Silver Resort that the impugned order has confirmed the demand of service tax by holding that Silver Resort provided renting of immovable property service to the unit holders. In HOME SOLUTIONS RETAILS (INDIA) LTD. VERSUS UNION OF INDIA ORS [ 2011 (9) TMI 46 - DELHI HIGH COURT] , the constitutional validity of sections 65 and 66 of the Finance Act came up for consideration. The larger bench of the Delhi High Court upheld the validity of these two sections. The consequence of termination of the agreement was neither raised nor decided. This decision would, therefore, not help the department - The confirmation of demand of service tax under this part, therefore, cannot be sustained. Whether any service was provided either by Joy Hotel or Blue coast under renting of immovable property service when the lease deed executed between Joy Hotel and the Chandigarh Administration was terminated? - HELD THAT:- In terms of this agreement, Blue Coast identified interested unit holders and a tripartite agreement was entered between Joy Hotel, Blue Coast and the unit holders for the grant of leasehold rights to the unit holders with respect to the commercial units for a consideration. It is on such amount of Rs. 6,50,00,000/- received by Joy Hotel and the consideration received by Blue Coast from the unit holders that the impugned order has confirmed the demand of service tax by holding that Joy Hotel provided renting of immovable property service to Blue Coast, and Blue Coast provided renting of immovable property service to the unit holders. In terms of the lease deed entered between Joy Hotel and the Chandigarh Administration, Joy Hotel was required to get the conversion of such land from industrial to commercial. As the conversion fee was not paid, the lease deed was terminated. The lease deed entered between Joy Hotel and the Chandigarh Administration forms the very basis of the entire transaction between Joy Hotel, Blue Coast and the unit holders. It was terminated and so there is no provision of any service between the parties. The advance amount paid by the unit holders in terms of the tripartite agreement was also refunded by Blue Coast in terms of the Settlement Agreement entered between the parties. Since the lease deed with the Chandigarh Administration has been terminated, subsequent agreements such as agreement between Joy Hotel and Blue Coast, and the tripartite agreement with the unit holders also stands repudiated. The question of rendition of any service by Joy Hotel or Blue Coast does not, therefore, arise. The confirmation of the demand in the impugned order under this part is, therefore, liable to be set aside. The impugned order dated 20.06.2016 is liable to be set aside and is set aside - Appeal allowed. 2024 (9) TMI 1495 100% EOU - Rejection of refund of CENVAT credit - barred by time under section 11B of the Central Excise Act, 1944 - HELD THAT:- The SCN alleges that the documents submitted by the appellant are not sufficient to determine the nature of the service provided and that the input services were not used for output services . The Assistant Commissioner found as a fact that the appellant had produced all the relevant documents, because it is for this reason that the claim of Rs. 21,901/- was sanctioned to the appellant. The remaining amount would also have been sanctioned, but for the fact that it was found that the claim was made beyond the time prescribed and was, therefore, barred by time. Thus, it follows that the claim has been rejected on a ground not stated in the show cause notice. The Assistant Commissioner has rejected the refund claim filed by the appellant by calculating the time limit of one year from the date of invoice of the input services procured by the appellant. It has been repeatedly held that the relevant date under section 11B of the Central Excise Act for calculating the time limit of one year is the date of receipt of payment for export of services. The Notification dated 14.03.2006, under which the refund was claimed by the appellant, also prescribes that the refund application should not be filed more than once for every quarter in a calendar year. A larger bench of the Tribunal in Span Infotech [ 2018 (2) TMI 946 - CESTAT BANGALORE ] examined the issue of limitation in the content of export of service and held that it has to be calculated from the last date of quarter in which the FIRC s are received. The Commissioner (Appeals), however, upheld the view taken by the Assistant Commissioner that the time limit of the one year has to be calculated from the date of invoice when the input services were procured by the appellant - In view of the decision of the larger bench of the Tribunal in Span Infotech, it will not be possible to sustain this view. The impugned order dated 09.08.2012 passed by the Commissioner (Appeals), therefore, deserves to be set aside and is set aside - Appeal allowed. 2024 (9) TMI 1494 Levy of service tax with interest and penalty - banking and other financial services provided by the appellant to the associate enterprise - giving corporate guarantees to various banks/financial institutions on behalf of the associate enterprises for their loan/overdraft facility - HELD THAT:- It is not in dispute that such corporate guarantees were provided by the appellant without any consideration. This is also clear from the SCN which mentions that no commission or interest or fee was charged by the appellant from the associate enterprises for providing corporate guarantee. This issue has now stand settled by a decision of the Tribunal in COMMISSIONER OF CGST CENTRAL EXCISE MUMBAI EAST VERSUS EDELWEISS FINANCIAL SERVICES LTD [ 2022 (2) TMI 1359 - CESTAT MUMBAI] . The department contended that service tax would be leviable on corporate guarantee given for subsidiary company without any consideration. This contention was not accepted by the Tribunal and it was observed '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 is clear that there is no consideration insofar as 'corporate guarantee' issued by respondent on behalf of their subsidiary companies is concerned.' The Civil Appeal filed by the department against the aforesaid order for the Tribunal in Edelweiss Financial Services was dismissed by the Supreme Court and the decision in COMMISSIONER OF CGST AND CENTRAL EXCISE VERSUS M/S EDELWEISS FINANCIAL SERVICES LTD. [ 2023 (4) TMI 170 - SC ORDER] where it was held that 'No effort was made on behalf of the Revenue to assail the above finding or to demonstrate that issuance of corporate guarantee to group companies without consideration would be a taxable service. In these circumstances, in view of such conclusive finding of both forums, we see no reason to admit this case basing upon the pending Civil Appeal, particularly when it has not been demonstrated that the factual matrix of the pending case is identical to the present one.' Thus, the impugned order dated 07.12.2018 deserves to be set aside and is set aside - The appeal is, accordingly, allowed. 2024 (9) TMI 1493 Levy of service tax - operation and maintenance repair of the Ropeway - Activity of maintenance of the battery-operated vehicle and existing road train and prevailing track in the Science City Authority - Operation and maintenance of external coal handling system - Service tax under Reverse Charge Mechanism on Rent a cab, Security Service, Works Contract Service, Manpower Recruitment Service Legal Services - Demand of service Tax on the operation and maintenance repair of the Bridge at Jaleswar - Denial of CENVAT Credit utilized for discharging the Service Tax Liability - non-payment of service tax on advances - Reversal of CENVAT on account of non-payment to supplier/contractor. Operation and maintenance repair of the Ropeway - HELD THAT:- It is observed that the appellant was awarded the right to operate and maintain the ropeway for which a license fee was paid to the respective state governments. A perusal of the agreements executed by the appellant with the respective state governments clearly reveal that the appellant operated the Aerial Ropeway by charging value of tickets from the riders of the ropeway. They paid yearly license fee at specific rate to the respective governments of Sikkim and Jharkhand. Rest of the money earned is appropriated by them for operation and maintenance of the said Ropeway - the appellant has rendered the service of transportation of passengers by Rope Way, which has been specifically exempted from payment of service tax. The activities undertaken by the Appellant by way of transportation of passengers by ropeway was not taxable under any of the category under the positive list and was exempted under Serial No. 23(c) of N/N. 25/2012 ST dated 20.06.2012, under the negative list regime - the demands of service tax confirmed on this count are not sustainable. Activity of maintenance of the battery-operated vehicle and existing road train and prevailing track in the Science City Authority - HELD THAT:- The appellant was entrusted with the task to collect money from the visitors by selling tickets and giving a part of it to Science city authority as royalty. Thus, the money has been collected only for allowing the visitors in to the science city, which is not a taxable service. The said activity was not taxable under any of the category under the positive list and was exempted under Serial No. 23(c) of Notification No.25/2012-ST dated 20.06.2012, under the negative list regime. Accordingly, the demands of service tax confirmed on this count in the both the orders is not sustainable. Operation and maintenance of external coal handling system - HELD THAT:- The activities of the appellant relating to transportation of coal in a specific manner and at a specific point cannot be considered as infrastructural support and maintenance services. In this regard, reliance placed on the Board Circular No. 232/2/2006 CX 4 dated 12.11.2007, wherein it has been clarified that if transportation of coal is undertaken by mechanical systems, such as ropeway system, no service tax would be chargeable. It is further observed that the appellant started paying service tax w.e.f. 01-07-2012 on the entire activity undertaken by them and have paid Rs.42,95,835/-(through Cash of Rs.36,36,634 and CENVAT Credit of Rs. 6,59,201] out of the total demand of Rs.54,12,061/-. However, the adjudicating authority failed to adjust this amount against the demand confirmed. Since there is no service tax payable for the period prior to 01.07.2012 and appropriate service tax has already been paid by the appellant for the period after 01.07.2012, there is no further liability on the appellant. However, the issue is remanded back to the adjudicating authority for verification and confirmation of payment of Rs.42,95,835/- as claimed by the appellant. Service tax under Reverse Charge Mechanism on Rent a cab, Security Service, Works Contract Service, Manpower Recruitment Service Legal Services - HELD THAT:- The appellant claimed that they have already paid the total amount of Service Tax of Rs. 1,45,860/- along with interest of Rs. 44,853/-. It is observed that there is no suppression of facts in this case and the intention to evade payment of tax has not been established. Since the entire demand confirmed in the impugned order is paid along with interest, no penalty imposable on the appellant. Accordingly, the penalty equal to the tax confirmed on this count is set aside. Demand of service Tax on the operation and maintenance repair of the Bridge at Jaleswar - HELD THAT:- It is observed that the said service related to maintenance of bridges and thus are exempted from payment of service tax. Accordingly, the demand confirmed on this count is set aside. Denial of CENVAT Credit utilized for discharging the Service Tax Liability - non-payment of service tax on advances - Reversal of CENVAT on account of non-payment to supplier/contractor - HELD THAT:- It is observed that the appellant has not produced the relevant documents earlier. Now, they claim that they have the documents with them readily and if the issue is remanded back to the adjudicating authority, they will be able to explain the issue. Accordingly, these issues are remanded back to the adjudicating authority for the purpose of verification of the documents and pass an appropriate order regarding eligibility of the credit. Appeals disposed off. 2024 (9) TMI 1492 Levy of service tax - Cargo Handling Services - profit margin made on the freight - liability to pay Service Tax on Commission received as an agent - HELD THAT:- These issues stand settled in the appellant s own case in FLYJAC LOGISTICS VERSUS COMMISSIONER OF GST AND C. EX, CHENNAI SOUTH COMMISSIONERATE [ 2018 (3) TMI 631 - CESTAT CHENNAI] where in the Tribunal observed ' The impugned order infer that these fees/charges are to be attributed to the Cargo Handling Service without identifying the presence of physical handling of cargo by the appellant. We find that there is no evidence to identify the appellant s activities as Cargo Handling Agent . Accordingly, the service tax liability on this account will not survive.''' Further it was held that ' Regarding tax liability under BAS for incentives received from liners, we note that the matter stand settled by the Tribunal decision in the case of BAX GLOBAL INDIA LTD. VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI [ 2017 (9) TMI 1264 - CESTAT CHENNAI] . Following the said ratio, we hold that service tax liability of the appellant on this issue cannot sustain. The matter stands settled in favour of the appellant, on both the issues with regard to Cargo Handling Services and Business Auxiliary Services, in their own case for the different period. Consequently, the impugned order is set aside and the appeal is allowed. Central Excise 2024 (9) TMI 1491 Denial of SSI exemption - denial on the ground that goods cleared by the appellant bore brand name YES and SAFE and both the brand names are not registered in the name of appellant - penalties. Denial of SSI exemption - Demand of central excise duty on clearance of mineral water bearing brand name SAFE - appellant had contended that the brand SAFE was owned by it and it was not owned by any other person - HELD THAT:- The appellant has come out with a categorical case that it purchase the brand SAFE from one Abhay Kumar Jain, proprietor of M/s Siddhi Corporation, Jodhpur under a sales agreement dated 06.06.2008. It is no doubt true that the sales agreement was not registered and that the brand name was not reflected on the site of Trade Make, but the appellant has come out with a case that Siddhi Corporation had not got the brand name registered in its name from the Trade Mark Authority. Merely because the appellant did not get the brand name registered in its own name, it cannot be urged that the exemption cannot be denied for the reason that nothing has been brought on record by the department to show that the brand name is in the name of some other person. Reference can be made to the decision of the Tribunal in Mukur Pharmaceuticals Co. P. Ltd. vs. Commr. of C.Ex., Chandigarh [ 2000 (3) TMI 668 - CEGAT, NEW DELHI] , wherein it was observed ' The onus of proof is on the department to show that the brand name belongs to another person.' Confirmation of the demand on mineral water cleared under the brand name YES during the period from October, 2014 to August, 2016 - appellant contends that mineral water with YES brand was cleared to M/s. Bhagwati Beverages, Jodhpur under an agreement which allows the appellant to process, pack and sell mineral water with brand name YES to them alone and not to consumers or in the market - HELD THAT:- M/s. Bhagwati Beverages clearly knew that the brand name did not belong to the appellant and, therefore, the brand name did not in any way indicate any connection in the course of trade between such specified goods and the appellant. According to the appellant, all the packing materials printed with brand name YES were provided by M/s. Bhagwati Beverages, who in fact sold such packed goods to the customers who know that they were buying mineral water with the brand name YES of M/s. Bhagwati Beverages - appellant would, therefore, be entitled to exemption under the exemption notification dated 01.03.2003. The penalty imposed upon the appellant or upon Tapan Rai or upon Manju Jain cannot also be sustained. The impugned order dated 17.05.2019 passed by the Commissioner (Appeals), therefore, deserves to be set aside and is set aside - Appeal allowed. 2024 (9) TMI 1490 Undervaluation of final product cleared by the appellant - demand based upon the evidences such as the statements of various dealers who had stated that the tiles which are manufactured and cleared by the appellant are sold at a price more than the MRP/RSP declared on such tiles - HELD THAT:- The orders impugned in the instant case were similar in the case to the orders impugned in the cases decided in the decision of Acme Ceramics [ 2014 (3) TMI 164 - CESTAT AHMEDABAD ]. When the matter came up before this bench, the aforesaid decision of Tribunal in the case of Acme Ceramics was doubted and the matter was referred to the Larger Bench - the Larger Bench held that ' It is not permissible to ascertain the retail sale price of goods removed from the place of manufacture, without declaring the retail sale price of such goods on the packages or declaring a retail sale price which is not the retail sale price or tampering with, obliterating or altering the retail sale price declared on the package of such goods after their removal from the place of manufacture, in respect of clearances made prior to 01.03.2008, on which datethe Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 came into force'. It is apparent that the interim order removes the doubts raised by this bench with respect to the decision in case of Acme Ceramics. Consequently, the earlier decision of Tribunal in the case of Acme Ceramics becomes a binding precedent decision that needs to be followed in the instant case. Consequently, following the decision in case of Acme Ceramics the matters are disposed of in identical terms - the demand for the period prior to 01.03.2008 are set aside as also the penalty imposed on the manufacturer assessee and other individuals. For the period post 01.03.2008, the demands are set aside and matters remanded back to the adjudicating authority to reconsider the same. CST, VAT & Sales Tax 2024 (9) TMI 1489 Local Body Tax (Entry Tax) - Constitutional Validity of Chhattisgarh Sthaniya Kshetra me Mal Ke Pravesh Par Kar Adhiniyam, 1976 - seeking quashing of notification dated 04/03/2014 - violative of Article 301 and 304 of Constitution of India and also violative of Article 14 of the Constitution of India - whether the impugned legislation is violative of Article 304 (a) of the Constitution of India? - whether entire State can be declared as local area in light of Judgment of the Hon ble Supreme Court in Jindal s case? - HELD THAT:- The validity of Act of 1976 came up for consideration before this Court in Steel Authority of India Vs. State of Chhattisgarh and others (and other cases), [ 2009 (9) TMI 911 - CHHATTISGARH HIGH COURT] in which this Court upheld the validity of the Act of 1976. The same was subject to challenge by petitioners therein before the Hon ble Supreme Court. After the reference was answered by the Hon ble Supreme Court in Jindal s case (9 Judges). The matter were placed before the regular bench of the Hon ble Supreme Court and liberty was reserved in favour of the petitioners to file a fresh writ petitions in light of Judgment of the Hon ble Supreme Court in Jindal s Case [ 2016 (11) TMI 545 - SUPREME COURT (LB)] . The argument of higher tax being imposed on goods imported from other state is violative of article 14 of Constitution of India cannot hold water in view Malwa Bus Service (Private) Ltd. v. State of Punjab and others [ 1983 (4) TMI 290 - SUPREME COURT] wherein Hon ble Supreme Court held that a difference in the rate of tax by itself cannot be considered to be discriminatory and offensive to the equality clause. The Power to State to grant tax reduction to local goods non discriminating as observed by the Hon ble Supreme Court in Jindal s Case (9 Judges) [ 2016 (11) TMI 545 - SUPREME COURT (LB)] . It has been further observed that constitutional validity of any taxing statute has, therefore, to be tested only on the anvil of Article 304 (a) and if the law is found to be non discriminatory, it can be declared to be Constitutionally valid without legislation having to go through the test or process envisaged by Article 304(b). It has been further observed that suffice to say that a fiscal statute shall be opened to challenge only under Article 304 (a) of the Constitution without being subjected to test of Article 304(b) either in terms of existence of public interest or reasonableness of the levy. Therefore, the validity of the impugned legislation and the notification to be tested on the anvil of Article 304 (a). The Court has to see as to whether the impugned legislation and notification are the tested of Article 304 (a) of Constitution of India. It has to be brought on record that by virtue of any legislation, the party has suffered loss or it is restricted to perform trade and commerce in the given State in which the legislation is enacted. The impugned notification only prescribes the rates on the goods imported from outside and goods inside the State. The notification does not debar the petitioner to trade and commerce inside the State of Chhattisgarh - The power to impose tax is a plenary power with the State subject to the fact that while imposing higher tax rate on the goods imported from outside is not discriminatory. The fact remains as stated above that the notification does not debar the petitioners for trade and commerce in the State of Chhattisgarh. The legislation cannot be declared ultra vires lightly. The taxing statute cannot be challenged only on the ground that the rate of taxation is higher. Until and unless it is said be colourable piece of legislation. It has not been established by the petitioner that the impugned legislation is enacted with colourable exercise of power or it is fraud on the legislative power. The argument was advanced that since there is a higher tax imposed on the goods imported from outside of the state hence it is discriminatory and cannot pass the test of Article 304 (a) of Constitution of India - it is also admitted that entire State is not local area and it is defined in section 2 (d) of definition clause of the Act of 1976. It is to be seen that there is no ambiguity in the definition clause. As to whether the petitioners suffered entry tax at multiple levels has not been substantially demonstrated. Hence, appropriate writ as claimed in this regard cannot be issued. Placing reliance on the judgments of the Hon ble Supreme Court and the discussion made herein, the petition is dismissed. Indian Laws 2024 (9) TMI 1488 Dishonour of cheque - Seeking to set aside Summoning Order - petitioner described as managers and are the wives of the Directors - accused or not - Petitioners' role in the functioning of the company - appellants are busy with the day-to-day affairs of the Company - vicarious liability under Section 141 of the NI Act to the Petitioners. Whether the Petitioner herein, who have been described as managers and are the wives of the Directors, can be arrayed as accused or not? - HELD THAT:- The Principal accused is the company, i.e. M/s RBT Pvt. Ltd., and Accused No.2, 3, 4, 5 6 are the Directors of the Accused No. 1 company; Accused No. 7 8 are the Petitioners herein, who have been described as Managers - There is no averment in the Complaint that the Petitioners herein were involved in the transaction against which the cheques in question were issued. There is no averment in the complaint as to what is the role of the Petitioners herein in the functioning of the company. It is well settled that there is no vicarious liability in the criminal law. Section 141 of the NI Act has an explanation which postulates that if the persons an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. The requirement of sub-section (1) of Section 141 of the NI Act is something different and higher. Every person who is sought to be roped in by virtue of sub-section (1) of Section 141 of the NI Act must be a person who at the time the offence was committed, was in charge of and was responsible to the Company for the conduct of the business of the Company. Merely because somebody is managing the affairs of the Company, per se, he does not become in charge of the conduct of the business of the Company or the person responsible for the Company for the conduct of the business of the Company. For example, in a given case, a manager of a Company may be managing the business of the Company. Only on the ground that he is managing the business of the Company, he cannot be roped in based on sub-section (1) of Section 141 of the NI Act. Petitioners' role in the functioning of the company - appellants are busy with the day-to-day affairs of the Company - HELD THAT:- The allegation that they are in charge of the Company is neither here nor there and by no stretch of the imagination, on the basis of such averment, one cannot conclude that the allegation of the second respondent is that the appellants were also responsible to the Company for the conduct of the business. Only by saying that a person was in charge of the Company at the time when the offence was committed is not sufficient to attract sub-section (1) of Section 141 of the NI Act - On a plain reading, it is apparent that the words was in charge of and was responsible to the Company for the conduct of the business of the Company cannot be read disjunctively and the same ought be read conjunctively in view of use of the word and in between. Thus, what would apply to a Director should also apply to a Manager and in the present case, the Petitioners are only the wives of the Accused No. 3 4 in the complaint. There is nothing in the Complaint which shows that there is any role of the Petitioners herein the day-to-day functioning of the company. In the absence of any specific averment against the Petitioners herein in the complaint, this Court is of the opinion that the complaint against the Petitioners cannot be sustained. Petition disposed off. 2024 (9) TMI 1487 Dismissal from service without inquiry - whether a conviction of an employee under the Negotiable Instruments Act would involve moral turpitude? - HELD THAT:- The Hon ble Kerala High Court (Division Bench) in the case of Saseendran Nair [ 1995 (5) TMI 296 - KERALA HIGH COURT ], has laid that an offence under Section 138 of the Act need not necessarily take within its wings the offence of cheating as per the Indian Penal Code. It has further been held that the question whether the act of issuing a cheque without sufficient funds will involve moral turpitude has to be considered de hors the element of cheating. Reference has also been made to the Corpus Juris Secendum as per which, moral turpitude implies something immoral in itself, regardless of whether it is punishable by law as a crime, since an act may involve moral turpitude even though it is not a crime. It further states that the term moral turpitude does not refer to conduct which, before it was made punishable as a crime, was generally regarded as morally wrong or corrupt, as offensive to the moral sense as ordinarily developed. Though the past conduct may be a relevant consideration in a matter of this nature, when there was no enquiry and the dismissal is only on the account of a conviction by a Court without framing any definite charges, the aforesaid would not be a relevant consideration. This Court is fortified in reaching to the above conclusion in as much as the impugned order of dismissal dated 17.10.2014 does not refer to any past conduct of the petitioner and is issued only on the basis of the conviction of the petitioner in a proceeding under Section 138 of the NI Act. This Court is unable to agree with the procedure adopted for imposing the penalty of dismissal vide the impugned order dated 17.10.2014 and accordingly the same is set aside. Consequently, the petitioner is directed to be reinstated in service. Petition allowed.
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TMI Tax Updates - e-Newsletter September 28, 2024

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GST Rules: Blocking ITC Ledger Only for Available Credit, Not Past Utilization.

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Tax recovery challenged, court allows belated appeal with partial stay.

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Tax credit denial set aside; authorities to consider claim as per court's previous ruling.

Income Tax

Legal notice issued to deceased person void, reassessment proceedings quashed due to jurisdictional error.

Tax evasion trial upheld despite no taxable income.

Tax Liability Shift Unlawful: Employer's Default Can't Burden Employees.

Trust can pay trustees' fees without losing tax exemption. Depreciation allowed on trust assets.

Aircraft leasing income not taxable as royalty under India-Ireland DTAA, overrides domestic law.

Controversy over Corporate Social Responsibility expenses deduction under Income Tax Act.

Work progress tracked properly, income offered after completion. Advance receipts not taxable income for that year.

Unexplained cash credits challenged due to lack of incriminating evidence and improper approval.

Bogus share capital infusion with unexplained premium rejected as assessee failed to prove credibility.

AO denied rectification u/s 154 for TDS credit difference without hearing assessee, ITAT set aside order & directed allowing TDS credit.

Indian IT company's receipts from US affiliates not taxable as 'fees for included services' under India-US tax treaty.

Software income from providing commercial info, not technical services, not 'Fees for Included Services' under tax treaty.

Income Tax dept's attempt to reopen case via rectification rejected; limited powers to correct glaring mistakes only.

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Customs Duty Revision: Tariff Values Steady for Edible Oils, Up for Silver Forms.

Customs Extra Duty Deposit refund denial unjustified, Court directs refund after assessment.

Customs duty waiver for goods destroyed by fire in SEZ units.

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Judicial, technical appointments for 4 years at NCLAT by Centre under Companies Act.

Companies must file CSR report separately by Dec 31, 2024 for FY 2023-24.

Company feud turns ugly: Rival faction's sneaky petition maneuver backfires due to lack of fair hearing.

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Amends rules: Clearer authorization for insolvency professional, interim role clarification Streamlining corporate insolvency process, updating key regulations for clarity and efficiency.

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Cheque Dishonor Case: Corporate Managers Exonerated from Criminal Liability.

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HDB Financial Services permitted Aadhaar authentication for anti-money laundering, adhering to privacy laws.

Job fraud money laundering case: Bail granted after 15 months despite strict PMLA provisions.

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Revised SEBI Delisting Norms: Fixed Price Route, Valuation Rules, Holding Cos. Delisting.

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TMI Tax Updates - e-Newsletter
September 28, 2024