scn can not issue for 5 years, Service Tax

[jagath jeevan guntu]

can a SCN issue for 5 years report if an audit completed every year

Posts / Replies

[Mahir S]

Yes sir, SCN can surely be issued for 5 years period,even if audit undertaken by the department.

[CS SANJAY MALHOTRA]

SCN can be issued for past 5 years from the relevant date if there happens to be suppression, misrepresentation, element of fraud...Nothing to do with the audit....

Important aspect to consider is the "Non applicability of Extended Period of Limitation". If the assessee quotes some instances that the activity under dispute was in the knowledge of the department or was intimated earlier through any written letter / taken up during Audit / any other facts, then Appellate Authorities can set aside the SCN.....

[YAGAY AND SUN]

Dear Jagath,

In continuation to the reply of Mr. Malhotra, It is now settled legal position that if audit had been conducted every year by the Department, then, liability for last five years cannot be fasten on the assessee. Department cannot ask that such facts were not known to them. This aspect had been dealt in Nahar Spinning Mills matter by the Hon'ble Tribunal.

This is for your kind information.

Regards,

YAGAY and SUN

[CS SANJAY MALHOTRA]

Thanks to YAGAY & SUN for addition thus bringing in the Nahar Spinning validation part also.

[CA ombir Singh Panwar]

if audit is completed of each year then limitation period for issue SCN will be 18 month from the relevant date as it will not be case of suppression of fact or fraud or miss statement.

[MARIAPPAN GOVINDARAJAN]

Yes, correct observation.