2017 (3) TMI 1104 - AT - Service Tax

Service tax appeal allowed due to lack of corroborative evidence from income tax department.

M/s. Sahil Study Circle Pvt. Ltd. Versus C.C.E. Delhi-II

M/s. Sahil Study Circle Pvt. Ltd. Versus C.C.E. Delhi-II - 2017 (52) S.T.R. 433 (Tri. - Del.) Issues:Confirmation of service tax demand based on income tax department's report.Analysis:The case involved the appellant engaged in providing 'Commercial Training or Coaching Service' facing service tax demand based on information from the income tax department regarding non-payment of income tax for the period 2007-2008. The appellant argued that the income tax demand was set aside by the Income Tax Appellate Tribunal, rendering the service tax demand unsustainable. The Tribunal found that the service tax department proceeded against the appellant solely based on the income tax department's report, without corroborative evidence of non-payment of income tax. Since the income tax demand was set aside by the Income Tax Tribunal due to lack of evidence, the service tax demand could not be sustained. The Tribunal noted the absence of tangible evidence showing the appellant received any unaccounted money for the taxable service, leading to the conclusion that the service tax demand lacked merit. Consequently, the appeal filed by the appellant was allowed, and the impugned order was set aside.This judgment highlights the importance of corroborative evidence in tax proceedings and the need for tangible proof to support service tax demands. It underscores the principle that a demand cannot be confirmed solely based on a report without substantial evidence. The decision also emphasizes the significance of resolving related issues in other tribunals, such as the Income Tax Appellate Tribunal, to impact the outcome of service tax proceedings. Overall, the judgment sets a precedent for requiring concrete evidence to support tax demands and ensuring fair adjudication based on substantiated facts rather than unsubstantiated reports.