2023 - (12) - Case Laws

❯

❯❯

0 / 200

Expand Note

Add to Folder

No Folders have been created

Are you sure you want to delete "My most important" ?

NOTE:

Open Link

Case Laws

All › 2023 › 2023 (12)

Showing Results for :

Reset Filters

Results Found:

Page of 76

Press 'Enter' after typing page number.

1101 to 1120 of 1518 Results

Show AI Text Quick Glance by AI Headnote

2023 (12) TMI 118 - CESTAT KOLKATA Central Excise

AI TextQuick Glance (AI)Headnote

Tribunal Rules in Favor of Appellant Due to Revenue Neutrality; No Suppression of Facts Found, Eligible for Relief.
The Tribunal allowed the appeals, finding that the proceedings were revenue neutral since the duty paid by the Appellant was eligible as Cenvat Credit for the receiving unit. It was determined that there was no suppression of facts, as all necessary data was available to the Department, and the Show Cause Notice was issued late. The decision was based on previous rulings that in cases of revenue neutrality, suppression does not apply. The Appellant was deemed eligible for consequential relief according to the law.

Revenue neutrality - Cenvat credit - assessable value in related party/parent subsidiary transfers - limitation and suppression in revenue neutral casesRevenue neutrality - Cenvat credit - assessable value in related party/parent subsidiary transfers - Whether proceedings demanding differential duty on gear boxes cleared by the subsidiary to its parent were sustainable when duty paid by the subsidiary was availed as Cenvat credit by the parent unit. - HELD THAT: - The Tribunal held that where duty paid by the supplying unit is eligible to and actually availed as Cenvat credit by the receiving unit, the dispute over additional excise demand becomes revenue neutral. Applying the principle from earlier decisions of the Tribunal, the adjudication challenging the assessable value adopted by the subsidiary (cost plus 15%) could not be sustained because the tax incidence, if any, was neutralised by the credit mechanism available and availed by the parent unit. The Tribunal accepted the appellants' contention that the duty paid by the subsidiary had been utilized as Cenvat credit by the parent and, on that basis, treated the proceedings on merits as liable to be set aside.Appeals allowed on merits; differential demand set aside as proceedings were revenue neutral.Limitation and suppression in revenue neutral cases - Cenvat credit - Whether the show cause proceedings were barred by limitation or vitiated by alleged suppression where department had access to monthly returns. - HELD THAT: - The Tribunal found that the Show Cause Notice was issued belatedly despite the department having the relevant data through regular monthly returns. In circumstances where the matter is revenue neutral because the receiving unit availed Cenvat credit, the element of 'suppression' does not arise. On that factual and legal basis, the Tribunal concluded that the demand could not be sustained on limitation grounds and the confirmed demand required setting aside.Appeals allowed on limitation; confirmed demand set aside for being time barred and not involving suppression.Final Conclusion: Both appeals allowed: the demands were set aside on the dual grounds that the dispute was revenue neutral because the parent availed Cenvat credit and that the show cause proceedings were belated and could not be sustained for suppression; appellants entitled to consequential relief as per law.

2023 (12) TMI 103 - JHARKHAND HIGH COURT Income Tax

AI TextQuick Glance (AI)Headnote

Issues Involved:
1. Legality and jurisdiction of the notice issued under Section 148 of the Income Tax Act, 1961.
2. Applicability of the time limit prescribed under Section 149 of the Income Tax Act.
3. Distinction between search and survey operations under the Income Tax Act.

Summary:

1. Legality and Jurisdiction of the Notice Issued Under Section 148 of the Income Tax Act, 1961:
The petitioners challenged the jurisdiction for issuance of notice under Section 148 of the Act, arguing that the notices were issued on a factually incorrect premise and beyond the prescribed limitation period. The court examined the legislative intent behind the Finance Act, 2021, which aimed to reduce the time limit for ordinary cases to three years and introduced a threshold amount for invoking an extended time limit of ten years. The court found that the notices were issued based on information obtained from search and seizure operations, which suggested that income chargeable to tax had escaped assessment.

2. Applicability of the Time Limit Prescribed Under Section 149 of the Income Tax Act:
The court noted that under the old provisions, the Assessing Officer could assess six assessment years in the case of a search. The Finance Act, 2021, expanded this to ten years under certain conditions. The court concluded that the notices issued under Section 148 for the assessment year 2013-14 were within the jurisdiction as they fell within the ten-year period from the end of the relevant assessment year. The court emphasized that the first proviso to Section 149 stipulates that notices can be issued if they could have been issued under the old provisions of Sections 153A and 153C.

3. Distinction Between Search and Survey Operations Under the Income Tax Act:
The petitioner argued that since only a survey was conducted in the case of Devika Constructions, the ten-year period should not apply. The court rejected this argument, stating that Section 153C(2) of the Act clearly explains that the Assessing Officer shall issue notice and assess or reassess the total income of such other person in the same manner as provided in Section 153A. The court found no distinction between search and survey in this context and upheld the notices issued.

Conclusion:
The court held that the Assessing Officer was justified in reopening the assessment for the assessment year 2013-14 for both petitioners, as they had taken the previous sanction of the competent authority. There was no illegality in the initiation of reassessment proceedings by issuing notices under Section 148 of the Income Tax Act. Consequently, both writ applications were dismissed without interfering with the respective show-cause notices.

Reassessment notices under Section 148 valid despite time-bar claims when third-party search yields assessee documents
The Jharkhand HC upheld the validity of reassessment notices issued under Section 148 for AY 2013-14, rejecting the petitioner's contention that the notices were time-barred. The court held that where search was conducted on a third party and documents relating to the assessee were seized, the 10-year limitation period under Section 149 applied. The court clarified that Section 153C(2) permits assessment in the same manner as Section 153A, and distinguished between survey and search was irrelevant. The AO was justified in reopening assessment with proper sanction from competent authority. Petition dismissed.

Reopening of assessment by notice under Section 148 - limitation for reassessment and scope of amended Section 149 - deeming provision for information where search or survey conducted (Explanation 2 to Section 148) - interplay between Section 153A/153C and amended reassessment regime - requirement of prior approval of specified authority for issuance of notice - income escaping assessment represented in the form of assetReopening of assessment by notice under Section 148 - limitation for reassessment and scope of amended Section 149 - deeming provision for information where search or survey conducted (Explanation 2 to Section 148) - interplay between Section 153A/153C and amended reassessment regime - Notice issued under Section 148 for A.Y. 2013-14 is within jurisdiction and not time-barred. - HELD THAT: - The Court examined the amended provisions (post Finance Act, 2021 and subsequent amendments) and their interaction with pre-amendment provisions applicable to search/survey. Having regard to Explanation 2 to Section 148, where a search or a survey (on or after 01.04.2021) yields books/documents/assets relating to the assessee, the Assessing Officer is deemed to have information suggesting income has escaped assessment for the three assessment years preceding the previous year in which the search/survey is conducted. The first proviso to amended Section 149 operates to permit issuance of a Section 148 notice for assessment years beginning on or before 01.04.2021 if such a notice could have been issued under the pre-amendment scheme of Sections 153A/153C. In the present cases, a search/survey event occurred on 09.06.2022; seized documents (NKK01) contained entries showing accommodation loans to the petitioner company for the years relevant to A.Y. 2013-14 which were not reflected in the books and the return showed 'NIL' liability. Those seized materials and enquiries by the investigating officer constituted sufficient material falling within the expanded concept of "asset" and entries in books of account, enabling the Assessing Officer, with prior sanction, to invoke the extended ten-year period. On this basis the Court concluded that the Assessing Officer did not act beyond limitation or jurisdiction in issuing notices under Section 148 for A.Y. 2013-14. [Paras 8, 9, 11, 13]The notices under Section 148 for A.Y. 2013-14 are not time-barred and the Assessing Officer was justified in reopening the assessments.Deeming provision for information where search or survey conducted (Explanation 2 to Section 148) - interplay between Section 153C and Section 153A - assessment of a third person on account of seized documents - A survey (or seizure of documents from a searched person) that yields documents relating to a third person permits assessment of that third person in the same manner as under Section 153A, and the extended ten-year period is applicable. - HELD THAT: - The Court held that Section 153C(2) mandates that where documents or assets seized/requisitioned in respect of one person pertain to another person, the Assessing Officer having jurisdiction over that other person shall issue notice and assess/reassess in the manner provided under Section 153A. The statutory scheme treats the assessment of such other person as governed by the same conditions (including the extended period for years beyond six up to ten where assets/incriminating material revealing escaped income of the requisite magnitude exist). Therefore, the fact that Devika Constructions was subject to survey (and the seized documents at the searched premises related to it) does not negate application of the extended limitation; the Assessing Officer was right to proceed under Section 148 read with the relevant deeming and proviso provisions. [Paras 12, 13]Difference between search and survey does not preclude invocation of the extended period; assessment proceedings against the third party (Devika Constructions) were competently initiated.Final Conclusion: Writ petitions challenging the Section 148 notices for A.Y. 2013-14 were dismissed. The Court held that, on the material seized and in view of the amended reassessment provisions and their interaction with Sections 153A/153C and Explanation 2 to Section 148, the reopening for ten years was within jurisdiction; therefore no interference with the show-cause notices was warranted.

2023 (12) TMI 72 - BOMBAY HIGH COURT GST

AI TextQuick Glance (AI)Headnote

Issues involved:
The issues involved in the judgment are related to the demand of inadmissible input tax credit under Section 74 of the Central Goods and Services Tax Act, 2017 (CGST Act), imposition of penalties, dropping of demands, and the statutory remedy of appeal available to the petitioner.

Demand of Inadmissible Input Tax Credit:
The adjudicating officer passed an order dropping the demand against the petitioner for inadmissible input tax credit amounting to Rs. 20,63,46,994 under Section 74 of the CGST Act. The penalty under Section 74 was also dropped, but a penalty of the same amount was imposed under Section 122(1)(vii) of the CGST Act. The order directed the appropriation of the penalty amount from the total amount paid by the petitioner.

Statutory Remedy of Appeal:
Both counsels agreed that the petitioner has the statutory remedy of an appeal under Section 107 of the CGST Act to challenge the order-in-original. The petitioner intended to challenge the penalty imposed by the adjudicating officer. The High Court decided that further adjudication was not necessary, and the petitioner was permitted to file an appeal within four weeks from the date of the judgment.

Order of the High Court:
The High Court ordered that the respondents should not take any coercive action for four weeks based on the adjudicating officer's order. The respondents were directed to refund appropriate amounts to the petitioner after retaining 10% of the penalty amount for filing the statutory appeal. The refund was to be made within four weeks, and the petitioner was not required to make any further deposit. The High Court also allowed the petitioner to claim interest on the deposit of input tax credit in the appellate proceedings.

Conclusion:
The High Court disposed of the petition by allowing the petitioner to file an appeal against the order-in-original. The respondents were directed to refund the appropriate amounts to the petitioner, retaining a portion for the statutory appeal. The High Court kept all contentions of the parties on the appellate proceedings open and permitted the petitioner to claim interest on the deposit of input tax credit in the appeal. No costs were awarded in this matter.

Tax Credit Appeal Allowed: Petitioner Granted Four-Week Window to Challenge Penalty Under Section 107 of CGST Act
HC resolved tax credit dispute by permitting petitioner to file appeal under Section 107 of CGST Act within four weeks. Respondents directed to refund amounts while retaining 10% penalty, with no coercive action allowed. The court preserved petitioner's right to challenge penalty and claim interest on input tax credit deposit in appellate proceedings.

Availability of statutory appeal - stay of coercive action pending filing of appeal - refund of amounts subject to retention as pre-deposit - appropriation and retention of deposited amounts as pre-deposit for appeal - claim for interest on deposited amounts to be urged in appealAvailability of statutory appeal - stay of coercive action pending filing of appeal - Petitioner permitted to file statutory appeal against the order-in-original dated 17 November, 2023 and respondents restrained from taking coercive action for a limited period to enable filing of the appeal. - HELD THAT: - The Court noted that a statutory remedy by way of appeal under the CGST Act is available to the petitioner against the adjudicating officer's order dated 17 November, 2023 and accepted the petitioner's statement that he intends to file such an appeal within four weeks. In view of this, further adjudication of the writ petition was not called for and, to enable the petitioner to avail the statutory remedy, the respondents were directed not to take any coercive action for four weeks from the date of the order. The direction is interlocutory and strictly time limited to allow commencement of appellate proceedings. [Paras 3, 4]Petitioner granted four weeks to file the statutory appeal; respondents restrained from taking coercive action for that period.Refund of amounts subject to retention as pre-deposit - appropriation and retention of deposited amounts as pre-deposit for appeal - Respondents directed to refund amounts to the petitioner pursuant to the adjudicating officer's order, after retaining a specified portion as pre-deposit for the appeal, and to refund in the manner of original deposit within a specified time. - HELD THAT: - The Court observed that consequential refunds arise from the adjudicating officer's order dropping the demand under Section 74 and that the petitioner should be permitted to receive those refunds while ensuring maintainability of the appeal. Accordingly, the respondents were directed to refund appropriate amounts after retaining 10% of the specified sum towards pre-deposit for filing the statutory appeal. The Court further directed that, because that amount is being retained for the appeal, no further deposit would be required from the petitioner, subject to any appropriate order the Additional Commissioner may pass. The refunds were ordered to be made within four weeks and in the manner in which the amounts were originally deposited. [Paras 4]Respondents to refund appropriate amounts within four weeks after retaining 10% as pre-deposit; no further deposit required from petitioner for appeal maintainability, subject to any further order by the Additional Commissioner.Claim for interest on deposited amounts - availability of appellate remedies for ancillary claims - Petitioner permitted to pursue claim for interest on the deposit of input tax credit in the appellate proceedings; the question of interest is not adjudicated in the writ petition. - HELD THAT: - The Court recorded the petitioner's stated intention to assert a claim for interest on the deposited input tax credit and expressly permitted the petitioner to urge that claim before the appellate forum. The Court did not decide the entitlement to interest on the deposit and left all contentions regarding appellate proceedings open for determination in the appeal. [Paras 4, 5]Petitioner may raise claim for interest in the appeal; the writ court did not decide the entitlement to interest.Final Conclusion: Writ petition disposed of by permitting the petitioner to file the statutory appeal within four weeks; respondents restrained from coercive action for that period and directed to refund appropriate amounts within four weeks after retaining 10% as pre-deposit for the appeal; entitlement to interest and other appellate contentions left open for the appellate forum.

2023 (12) TMI 71 - BOMBAY HIGH COURT GST

AI TextQuick Glance (AI)Headnote

Issues Involved:
The petition under Article 226 of the Constitution of India assails the order dated 26 July, 2023 passed by the State Tax Officer, Nodal Division-12, Mumbai directing the petitioner to pay tax, interest, and penalty.

Issue 1: Breach of Principles of Natural Justice

The petitioner contended that the impugned order was illegal due to a breach of natural justice as no hearing was granted. The petitioner had requested a personal hearing in the reply submitted but was only informed of the hearing two days in advance. Despite intending to attend, the petitioner could not appear, and the State Tax Officer proceeded to pass the order without granting a final opportunity.

Issue 2: Jurisdiction of State Tax Officer

The petitioner argued that the State Tax Officer lacked jurisdiction to levy demands under the IGST Act. The petitioner sought to have the impugned order quashed and set aside, requesting a proper hearing and a lawful decision by the State Tax Officer.

Judgment:

After hearing arguments from both parties and reviewing the record, the court found merit in the petitioner's contentions. It was noted that the petitioner had requested a personal hearing, and the failure to appear on one occasion should not have led to the assumption of disinterest without a valid reason. The court observed that no written notice was issued adjourning the proceedings, and the impugned order did not consider the petitioner's case adequately.

In light of the above, the court decided to quash and set aside the impugned order dated 26 July, 2023. The proceedings were remanded to the State Tax Officer for a decision in accordance with the law after granting the petitioner a proper opportunity for a personal hearing. The petitioner was directed to appear before the authority on 8 December, 2023, and the State Tax Officer would set a suitable date for the hearing. The court emphasized that if the petitioner failed to appear despite notice, the State Tax Officer could proceed and pass an appropriate order. All contentions of the parties were expressly kept open, and the matter was disposed of with no costs incurred.

Tax Order Quashed: Procedural Flaws Invalidate State Tax Officer's Decision, Ensuring Fair Hearing for Petitioner
HC allowed the petition challenging a tax order due to procedural irregularities. The court quashed the State Tax Officer's order for violating natural justice principles, specifically the lack of adequate hearing opportunity. The case was remanded for a fresh hearing, directing the petitioner to appear on 8 December, 2023, with all legal contentions preserved and no cost imposed.

Principles of natural justice - opportunity of personal hearing - quash and remand - State Tax Officer's duty to pass appropriate order after hearingPrinciples of natural justice - opportunity of personal hearing - Impugned demand order violated principles of natural justice by not affording a personal hearing to the petitioner. - HELD THAT: - The Court found that the petitioner had clearly indicated an option for personal hearing in Form GST DRC-06 and was informed by telephone of an intended hearing date. In these circumstances, the mere non-appearance on the tentative date without any written notice or adjournment could not be treated as a waiver of the right to be heard. The impugned order also failed to consider the petitioner's reply to the show cause notice. For these reasons the order was held to be in breach of natural justice and unsustainable. [Paras 5]Impugned order quashed and set aside for non-compliance with principles of natural justice.Quash and remand - State Tax Officer's duty to pass appropriate order after hearing - Whether the matter should be remanded for fresh consideration after affording a personal hearing and consequent directions. - HELD THAT: - In the interest of justice the Court remanded the proceedings to the State Tax Officer with directions to grant the petitioner a personal hearing and then pass an appropriate order in accordance with law. The Court directed the petitioner to appear initially on a specified date and required the officer to fix a hearing date thereafter, obtain the petitioner's acknowledgement of attendance, and proceed to decide the matter. The Court also recorded that if the petitioner, despite notice or undertaking, fails to appear, the officer may proceed further and pass an order in accordance with law. All contentions were kept open for fresh adjudication. [Paras 6]Proceedings remanded to the State Tax Officer for fresh decision after affording a personal hearing; procedural directions issued regarding appearance and further course.Final Conclusion: The petition is disposed by quashing the demand order for breach of natural justice and remanding the matter to the State Tax Officer to decide afresh after granting a personal hearing in accordance with the directions issued; all contentions reserved.

2023 (12) TMI 47 - CESTAT MUMBAI Service Tax

AI TextQuick Glance (AI)Headnote

Issues involved: Classification of services under taxable categories, eligibility of Cenvat Credit on manufactured goods used for services, ownership of goods supplied, denial of Cenvat benefit.

Classification of services under taxable categories: The appellants entered into agreements with Municipalities/Municipal Corporations for energy conservation measures and maintenance services, classified under "Scientific and Technical Consultancy Services" and "Maintenance and Repair Service". The audit wing observed the appellants manufactured LED Lights, leading to a dispute over Cenvat Credit eligibility.

Eligibility of Cenvat Credit on manufactured goods: The department objected to the appellants availing Cenvat Credit on LED Lights manufactured by them, arguing they cannot claim credit on their own finished goods as inputs for taxable services. The department also contended that since the ownership of the goods remained with the Municipality/Corporation, the appellants could not benefit from the service tax or Central Excise duty paid on those goods.

Ownership of goods supplied: The department held that the appellants' manufactured goods could not be considered as inputs for their services as ownership transferred to the Municipality/Corporation after the contract period. This led to the denial of Cenvat Credit on the LED lightings and fixtures by the department.

Denial of Cenvat benefit: The appellants argued that since they were registered for manufacturing excisable goods and providing taxable services, availing Cenvat Credit on manufactured goods used for services was justified. They contended that the denial of Cenvat benefit on LED lights, fixtures, and control panels by the department was unwarranted.

The Tribunal examined whether the disputed goods should be considered as inputs for Cenvat Credit eligibility based on Rule 2(k) of the CENVAT Credit Rules, 2004. The definition of "input" includes goods used for providing any output service. The disputed goods, LED lightings, fixtures, and control panels, were used by the appellants for providing taxable services to the Municipality/Municipal Corporation. Ownership was deemed irrelevant in determining Cenvat Credit eligibility, as long as the goods were used for providing the output service and taxes were duly paid. The Tribunal concluded that the impugned orders denying Cenvat Credit on the manufactured goods for services were not sustainable. Therefore, the appeals were allowed in favor of the appellants, with consequential benefits as per law.

CENVAT credit allowed on LED lights and fixtures used for taxable output services under Rule 2(k)
CESTAT Mumbai allowed the appeal regarding CENVAT credit on LED lights, fixtures and control panels. The department denied credit claiming these finished goods couldn't be treated as inputs for taxable output services. The tribunal held that under Rule 2(k) of CENVAT Credit Rules, 2004, all goods used by service providers for output services qualify as inputs. Since disputed goods were used for providing taxable services to municipalities and service tax was discharged, they constituted valid inputs. Ownership criteria is irrelevant for determining CENVAT eligibility as no statutory restriction exists requiring ownership establishment for goods used in output services.

Input as defined under Rule 2(k) of the CENVAT Credit Rules, 2004 - goods used for providing any output service - usage-test for eligibility of Cenvat credit - ownership of goods not determinative for Cenvat eligibilityInput as defined under Rule 2(k) of the CENVAT Credit Rules, 2004 - goods used for providing any output service - ownership of goods not determinative for Cenvat eligibility - usage-test for eligibility of Cenvat credit - Whether goods manufactured and cleared by the appellants and used in providing taxable services qualify as 'inputs' for availing Cenvat credit and whether ownership of such goods is a determinative criterion for eligibility. - HELD THAT: - The Tribunal noted that Rule 2(k) of the CENVAT Credit Rules, 2004 defines 'input' to include all goods used for providing any output service. The admitted facts establish that the appellants manufactured LED lights, fixtures and control panels, paid appropriate Central Excise duty on clearance, and used those goods in supplying the taxable output services (Scientific and Technical Consultancy Services and Maintenance and Repair Service) to Municipalities/Municipal Corporations. Applying the statutory definition, the Tribunal held that goods used by a service provider in furnishing the output service fall within the scope of 'input' and are thus eligible for Cenvat credit, provided the goods were liable to tax or duty. The Tribunal further rejected the Revenue's contention that ownership of the goods on expiry of the contract precludes credit, observing that the CENVAT statute requires only that goods be used for provision of the output service and be subject to tax or duty; there is no statutory embargo requiring the service provider to retain ownership. The determinative criterion is the usage of the goods in the provision of the service (the usage-test), not legal ownership. [Paras 7, 8]The impugned orders denying Cenvat credit were set aside and the appeals allowed, holding that the disputed goods used in provision of the taxable services qualify as 'inputs' and ownership is not a bar to availment of Cenvat credit.Final Conclusion: Appeals allowed; Cenvat credit admissible on LED lights, fixtures and control panels manufactured and used by the appellants for providing taxable output services, ownership of the goods not a disqualifying factor.

2023 (12) TMI 40 - CESTAT KOLKATA Central Excise

AI TextQuick Glance (AI)Headnote

ISSUES PRESENTED AND CONSIDERED

1. Whether the demand for duty on goods allegedly removed without payment of duty after availing CENVAT credit is sustainable in view of the discrepancies in supporting documents and the appellant's challenges to quantities and valuation.

2. Whether the Commissioner (Appeals) properly exercised appellate scrutiny in accepting certain discrepancies and recalculating the duty demand accordingly.

3. Whether the appellant is entitled to reduction of penalty and, if so, on what conditions and quantum.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Sustainability of the duty demand for goods removed without payment of duty after availing CENVAT credit

Legal framework: The proceedings arise from an assessment/demand for duty where goods were alleged to have been removed without payment of duty after availing CENVAT credit; the adjudicatory process involved issuance of a show cause notice, confirmation of duty and penalty in original adjudication, and appellate revision.

Precedent Treatment: No prior judicial authorities or precedents were invoked or considered in the impugned order or the Tribunal's order reproduced in the record.

Interpretation and reasoning: The Commissioner (Appeals) examined the appellant's submissions and documentary material (working sheet and road challans). The Commissioner (Appeals) accepted the appellant's challenge to specific additions in the adjudicating authority's Annexure (disparities in numbers for certain picture tubes) and excluded those figures from the computation. The Commissioner (Appeals) retained the rest of the Annexure calculations because the appellant did not dispute the valuation used; thus the valuation figures were treated as accepted. The Tribunal observed that the Commissioner (Appeals) had "already considered all the disparities pointed out by the Appellant" and that the appellant no longer disputed valuation.

Ratio vs. Obiter: Ratio - the demand is sustainable to the extent that it is supported by accepted figures and undisputed valuation; where specific item counts were successfully disputed and lacked supporting basis, those items were excluded from the demand. Obiter - none additional on evidentiary standards beyond application to the facts.

Conclusions: The Tribunal upheld the reduced duty demand as computed by the Commissioner (Appeals), finding no infirmity in the appellate order's treatment of discrepancies and valuation. The duty demand confirmed in the impugned order is sustained.

Issue 2: Adequacy of appellate scrutiny and acceptance of documentary discrepancies

Legal framework: Appellate authority's duty is to re-examine the evidence and computations of the original adjudicating authority and to modify demand where the original computation is unsupported by documents or is otherwise erroneous.

Precedent Treatment: No precedents cited or applied.

Interpretation and reasoning: The Commissioner (Appeals) scrutinized annexures and working sheets provided by the appellant and specifically accepted that there was "no supporting documents for adding" certain quantities in Annexure-A2. By amending Annexure-A1 and providing an adjusted table reflecting accepted quantities and values, the Commissioner (Appeals) demonstrated itemized appellate consideration rather than blanket reversal or affirmation. The Tribunal endorsed this approach, noting that the appellate authority "has already dealt with all the issues in the impugned order."

Ratio vs. Obiter: Ratio - where an appellant successfully demonstrates lack of documentary basis for specific additions, the appellate authority may exclude those additions and recompute demand; such targeted scrutiny is sufficient to remedy over-assessment. Obiter - none beyond the factual application.

Conclusions: The appellate scrutiny was adequate and properly resulted in modification of the demand. The Tribunal found no grounds to interfere with the Commissioner (Appeals)'s fact-specific adjustments.

Issue 3: Entitlement to reduction of penalty and conditionality of reduced penalty

Legal framework: Post-adjudication, penalty may be reduced by the authority on specified grounds; the Tribunal applied a conditional reduction mechanism linked to prompt payment of the confirmed duty and interest.

Precedent Treatment: No precedents cited or applied regarding penalty reduction.

Interpretation and reasoning: The Tribunal held that the appellant is entitled to a reduced penalty of 25% of the duty confirmed, conditional upon payment of the demand (duty plus interest) by a specified date (on or before 31.12.2023). The Tribunal expressly provided that failure to pay by that date will result in the penalty reverting to the full amount (Rs.1,08,182/- as stated). This operates as an incentive-linked mitigation rather than an unconditional waiver.

Ratio vs. Obiter: Ratio - penalty may be mitigated to 25% of the confirmed duty where the appellant pays the duty and interest by the specified deadline; non-compliance restores the full penalty. Obiter - procedural or equitable considerations underpinning the choice of 25% but not elaborated in reasoning.

Conclusions: The Tribunal upheld the conditional reduction of penalty to 25% subject to timely payment of duty and interest; non-compliance will result in imposition of the original penalty amount.

Cross-References and Integrated Conclusions

1. The Tribunal's upholding of the amended duty demand is directly linked to the Commissioner (Appeals)'s factual findings excluding unsupported additions and accepting undisputed valuation; see Issue 1 and Issue 2 above.

2. The penalty conclusion (Issue 3) is contingent on the appellant's compliance with the duty payment affirmed under Issue 1; the Tribunal's order integrates assessment outcome and penalty mitigation into a single operative directive.

Appeal Reduces Duty Demand and Lowers Penalty; Appellant Has Deadline to Pay Reduced Penalty by 31.12.2023.
The appeal resulted in a reduction of the duty demand from Rs.2,39,986 to Rs.1,08,182 by the Commissioner (Appeals), who found no need for further interference. The valuation aspect was not contested by the Appellant, leading to the modification of the demand. Additionally, the Appellant was granted a reduced penalty of 25% of the confirmed duty if paid by 31.12.2023. Failure to meet this deadline would result in the penalty amounting to Rs.1,08,182. The appeal was resolved on these terms, with the decision pronounced in open court.

Duty demand for removal of goods without payment of duty after availing CENVAT credit - valuation accepted by the appellant - upholding assessment on appeal - reduction of penalty on payment within prescribed timeDuty demand for removal of goods without payment of duty after availing CENVAT credit - valuation accepted by the appellant - upholding assessment on appeal - Whether the Commissioner (Appeals) order reducing the duty demand to the amended figures should be upheld. - HELD THAT: - The Tribunal noted that the Commissioner (Appeals) examined the discrepancies pointed out by the appellant, accepted certain disputed quantities as incorrect and amended Annexure A1 accordingly. The Commissioner (Appeals) found that the appellant did not dispute the valuation used in Annexure A2, and calculated the demand on the remaining accepted figures, thereby reducing the demand to the amount in the impugned order. The appellant accepted that valuation is not in dispute. On this basis the Tribunal found no infirmity in the impugned order and upheld the demand confirmed by the Commissioner (Appeals). [Paras 2, 3]Impugned order reducing the demand as per amended Annexure A1 is upheld.Reduction of penalty on payment within prescribed time - Whether the appellant is entitled to a reduced penalty and on what terms. - HELD THAT: - The Tribunal held that the appellant is entitled to a reduced penalty of 25% of the duty confirmed provided the appellant pays the duty confirmed along with interest on or before the date specified by the Tribunal. The order specifies that if the appellant makes payment with interest by that date, the reduced penalty of 25% shall apply; failure to comply will result in the penalty of the full amount as confirmed. [Paras 4]Appellant entitled to reduced penalty of 25% of the confirmed demand if duty with interest is paid by the specified date; otherwise the full penalty confirmed shall stand.Final Conclusion: The appeal is disposed of by upholding the Commissioner (Appeals) order reducing and confirming the duty demand as amended; the appellant may avail reduced penalty of 25% by paying the confirmed duty with interest on or before the date specified, failing which the full penalty as confirmed will apply.

2023 (12) TMI 38 - SECURITIES APPELLATE TRIBUNAL, MUMBAI SEBI

AI TextQuick Glance (AI)Headnote

Board can appoint independent director above 75 without prior shareholder approval under Regulation 17(1A)
The Securities Appellate Tribunal, Mumbai held that a board of directors can appoint a person above 75 years as additional non-executive independent director without prior shareholder approval through special resolution. The appointment must be subsequently approved by shareholders within three months or by the next AGM, whichever is earlier. The Tribunal ruled that Regulation 17(1A) of LODR Regulations should be read harmoniously with Companies Act provisions, allowing board appointment subject to later shareholder ratification. BSE and NSE penalties for alleged regulatory violation were deemed improper as the company complied by obtaining shareholder approval within the prescribed timeframe.

Appointment of an additional director - special resolution for persons above seventy-five years - prior approval versus subsequent ratification - Regulation 17(1A) of the LODR Regulations - Regulation 17(1C) of the LODR Regulations - Section 161(1) of the Companies Act, 2013 - Section 152(2) of the Companies Act, 2013 - conjoint reading/harmonious construction of company law and listing regulationsAppointment of an additional director - special resolution for persons above seventy-five years - prior approval versus subsequent ratification - Regulation 17(1A) of the LODR Regulations - Regulation 17(1C) of the LODR Regulations - Section 161(1) of the Companies Act, 2013 - Section 152(2) of the Companies Act, 2013 - conjoint reading/harmonious construction of company law and listing regulations - Appointment of a person aged over seventy-five as a non-executive director by the board as an additional director is permissible if subsequently approved by members by a special resolution within the period prescribed by Regulation 17(1C); penalty for non-compliance quashed. - HELD THAT: - The Tribunal observed that Section 152(2) contemplates appointment of directors by the company in general meeting whereas Section 161(1) permits the board to appoint an additional director who holds office up to the next annual general meeting. Regulation 17(1A) prescribes that appointment or continuance of a non-executive director who has attained the age of seventy-five years requires a special resolution and an explanatory statement. Regulation 17(1C) requires shareholder approval for appointment to be taken at the next general meeting or within three months from the date of appointment, whichever is earlier. Reading these provisions harmoniously, Regulation 17(1A) does not convert the special resolution requirement into a condition precedent to any board appointment; instead, a board may appoint an additional director (including a person above seventy-five) whose appointment must be approved by members by way of special resolution within the period specified by Regulation 17(1C). In the present case the board appointed the person as an additional director and the members approved the appointment by special resolution within three months, hence the appointment complied with the statutory scheme and the fines levied by the stock exchanges for alleged breach of Regulation 17(1A) could not be sustained. [Paras 18, 19, 22, 23, 24]Impugned orders imposing fines for alleged violation of Regulation 17(1A) quashed; appointment valid as ratified within prescribed period.Final Conclusion: The appeals are allowed; the orders of BSE and NSE imposing fines for alleged breach of Regulation 17(1A) are quashed as the board appointment was validly ratified by a special resolution within the period mandated by Regulation 17(1C); no order as to costs.

2023 (12) TMI 31 - ITAT RAIPUR Income Tax

AI TextQuick Glance (AI)Headnote

Revenue's appeal dismissed on construction expenses, deemed dividend timing, derivative transactions, and documentation requirements
ITAT Raipur dismissed revenue's appeal on multiple grounds. The tribunal upheld CIT(A)'s deletion of construction expense provision addition, finding AO misread the provision date as FY 2013-14 instead of actual FY 2014-15. Regarding deemed dividend under section 2(22)(e), ITAT confirmed directors' advances constituted deemed dividend but ruled section 40(a)(ia) disallowance inapplicable for AY 2014-15 as amendment expanding scope to "any sum" became effective from AY 2015-16. The tribunal held commodity derivative transactions were business transactions, not speculative, being conducted through recognized stock exchange. Project completion method was approved as valid accounting method. Addition under section 68 was deleted as assessee provided required documentation and AO failed to pursue proper inquiries before making assumptions.

Deemed dividend under section 2(22)(e) - disallowance under section 40(a)(ia) - percentage completion method (AS-7) versus project/completed contract method (AS-9 / project completion method) - speculative transaction versus business loss under section 43(5)(e) and section 73 - cash credit / unexplained credit under section 68 - onus of proof under section 68: identity, creditworthiness and genuinenessProvision for construction expenses - Deletion of addition of Rs. 5,00,000 made by AO by disallowing provision for construction expenses - HELD THAT: - The Tribunal accepted the appellate authority's finding that the provision of Rs. 5,00,000 was created in the subsequent year (31/03/2015) and not in the year under consideration; the assessing officer had misread the ledger and made the disallowance on incorrect facts. On the record (ledger entries) and in absence of any contrary material, the deletion by the CIT(A) is correct and requires no interference. [Paras 9]Addition deleted; revenue's ground rejected.Deemed dividend under section 2(22)(e) - disallowance under section 40(a)(ia) - Deletion of addition of Rs. 1,34,83,176 made by AO for non-deduction of tax on alleged deemed dividend and related disallowance under section 40(a)(ia) - HELD THAT: - The Tribunal upheld the approach of the CIT(A). Although the AO treated certain balances with directors as loans/advances attracting section 2(22)(e), the appellate forum concluded that the assessing officer had not established the legal foundation to sustain the disallowance under section 40(a)(ia) for the year (the widened phrase 'any sum' became applicable only from 01.04.2015). Following precedents and on literal reading of the amendment, the Tribunal agreed that disallowance under section 40(a)(ia) could not be invoked for the relevant year and the AO's action in invoking that provision was beyond mandate of law; consequently the revenue's challenge was dismissed. [Paras 20, 21, 22]Deletion by CIT(A) sustained; revenue's ground dismissed.Speculative transaction versus business loss under section 43(5)(e) - application of section 73 - Deletion of addition of Rs. 56,15,450 treating loss on currency derivatives as speculative (AO had disallowed as speculative loss / bogus claim) - HELD THAT: - The Tribunal concurred with the CIT(A) that the assessee's derivative transactions were executed through an authorised broker on a recognised exchange and contract notes and transaction evidence were on record. In view of section 43(5)(e) (eligible transactions on a recognised exchange) and consistent judicial authorities, such transactions are not to be treated as speculative; absent cogent material to dislodge the contemporaneous documentary evidence and where AO's adverse inference rested on non-response to third party notices without further corroboration, the CIT(A)'s deletion of the addition was proper. [Paras 29]Addition deleted; revenue's challenge rejected.Cash credit / unexplained credit under section 68 - onus of proof under section 68: identity, creditworthiness and genuineness - Deletion of addition of Rs. 2,11,21,389 treated by AO as unexplained credit under section 68 - HELD THAT: - The Tribunal agreed with the CIT(A) that the assessee had discharged the primary onus by producing PAN/ITRs, bank statements, ledger confirmations, audited accounts and evidence of receipt and repayment through banking channels. The assessing officer did not undertake independent enquiries (for example under sections 133(6)/131) or produce corroborative material to rebut those documents. On settled law, once the assessee discharges its initial burden, the burden shifts to the Revenue to bring contrary material; in absence of such material and given the AO's reliance on inapposite precedents and mere surmise, the addition under section 68 could not be sustained. [Paras 8, 41, 42]Addition deleted; revenue's ground dismissed.Percentage completion method (AS-7) versus project/completed contract method (AS-9 / project completion method) - Deletion of addition made by AO by applying AS-7 (percentage completion method) to recognise revenue instead of the project completion method followed by the assessee - HELD THAT: - The Tribunal endorsed the CIT(A)'s conclusion that project completion method (one of the recognised accounting methods) had been consistently followed by the assessee and accepted by the department in earlier years. AS-7 permits both percentage completion and completed contract (project completion) approaches in appropriate circumstances; absent prohibition in the Income-tax Act and without any cogent material showing that the chosen method was erroneous or produced non-neutral results, the AO was not justified in substituting the assessee's accepted accounting policy. The AO's estimate lacked application of the certified percentage-completion calculations and was revenue neutral over project life; the CIT(A)'s deletion of the addition was sustained. [Paras 33, 34, 35, 37]Addition deleted; revenue's ground dismissed.Final Conclusion: Both departmental appeals are dismissed. The Tribunal affirms the orders of the CIT(A) deleting the additions/disallowances challenged by the Revenue: (i) deletion of provision for construction expenses; (ii) deletion of addition relating to alleged deemed dividend/non-deduction and related invocation of section 40(a)(ia) for the year; (iii) deletion of the disputed derivative loss treated as speculative; (iv) deletion of unexplained credit under section 68; and (v) rejection of AO's application of AS-7 in place of the assessee's consistently followed project completion method.

2023 (12) TMI 30 - ITAT BANGALORE Income Tax

AI TextQuick Glance (AI)Headnote

AO cannot apply section 69A after accepting business income calculated on total turnover from same books
The ITAT Bangalore held that the AO incorrectly applied section 69A to treat reported sales as unexplained money after accepting the business income calculated on total turnover. The assessee, a gold and silver trader, had cash seized by police, which was claimed as personal savings and loans. The AO found minor defects in sales bills but accepted the books of accounts and business income. The tribunal ruled that once the AO accepted the returned income based on total turnover, the same turnover cannot be treated as unexplained money under section 69A without rejecting the books of accounts.

Estimation of sales - Application of provisions of section 69A read with section 115BBE - Treatment of seized cash as unexplained money - Acceptance of return and impermissibility of double taxation by recharacterising same turnover as unexplained money - Rejection of books of account and applicability of section 145(3) - Admissibility of additional evidence and procedure under Rule 46A of the Income tax RulesEstimation of sales - Treatment of seized cash as unexplained money - Application of provisions of section 69A read with section 115BBE - Acceptance of return and impermissibility of double taxation by recharacterising same turnover as unexplained money - Rejection of books of account and applicability of section 145(3) - Whether the Assessing Officer was justified in treating a portion of the cash seized as unexplained money and bringing it to tax under section 69A/115BBE after estimating genuine sales at a lower figure while simultaneously accepting the assessee's return based on the declared turnover. - HELD THAT: - The Tribunal recorded that cash of Rs. 1.48 crores was seized and that the assessee produced books, registers and returns during investigation and assessment. The AO accepted the return under section 139(1) and the business income computed by the assessee based on total turnover, yet in the same assessment treated a part of the turnover as not genuine and assessed it u/s 69A, without rejecting the books of account and without invoking section 145(3). The Tribunal held that once the AO accepted the returned income calculated on the basis of total turnover, it was not open to him to treat that same turnover as unexplained money under section 69A. The AO's mechanical re characterisation of sales as unexplained money despite acceptance of accounts was found to be incorrect. The Tribunal also noted that the AO had not applied section 145(3) before making estimates. Relying on the principle that unexplained investment cannot be made out where books and turnover are accepted, and following the reasoning in Mahesh Kumar Gupta v. ACIT as relied on in the order, the Tribunal concluded that section 69A did not apply and the entire sales declared by the assessee constituted business sales. Because the Tribunal determined that entire sales were business receipts, it did not require adjudication of the remaining grounds raised in the appeals. [Paras 16, 17, 18]The addition under section 69A (and consequent charging under section 115BBE) is not sustainable; the entire sales declared by the assessee are held to be business sales and section 69A will not apply.Final Conclusion: The revenue appeal is dismissed; the assessee's cross objection is partly allowed by holding that the entire cash corresponds to business sales for AY 2021-22 and that the AO could not treat the accepted turnover as unexplained money under section 69A.

2023 (12) TMI 19 - DELHI HIGH COURT Customs

AI TextQuick Glance (AI)Headnote

Petition for Transport & Marketing Assistance Scheme to be decided by DGFT in 12 weeks; additional docs allowed in 3 weeks.
The HC directed that the petition seeking incentives under the Transport and Marketing Assistance Scheme be treated as a representation to be decided by the DGFT within twelve weeks. The Petitioner was allowed to submit additional documents within three weeks. The Court did not express any opinion on the merits, leaving all parties' rights and contentions open. The writ petition was disposed of with these directions and liberties granted.

2023 (12) TMI 1136 - KARNATAKA HIGH COURT GST

AI TextQuick Glance (AI)Headnote

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

1. Whether the petitioner's failure to include GSTIN on invoices justifies the denial of tax exemption under Notification No. 12/2017 dated 28.06.2017.

2. Whether the petitioner's services qualify as intra-state or inter-state supplies under the IGST Act, considering the absence of GSTIN and PAN on invoices.

3. Whether the petitioner is entitled to a refund of the pre-deposit made during the appellate proceedings.

ISSUE-WISE DETAILED ANALYSIS

1. Denial of Tax Exemption Due to Absence of GSTIN

Relevant Legal Framework and Precedents:

The legal framework involves Notification No. 12/2017, which provides tax exemptions for services where the expenditure is borne by the Central or State Government. The CGST/KGST Act, 2017, and the IGST Act, 2017, govern the requirements for tax invoices, including the necessity of GSTIN.

Court's Interpretation and Reasoning:

The Court noted that the absence of GSTIN on invoices was a significant factor in denying the exemption. However, the Court emphasized that the exemption's applicability should also consider the nature of the services and the funding source.

Key Evidence and Findings:

The petitioner provided training services to defense establishments, which were funded by government entities. The invoices lacked GSTIN, leading to the denial of exemption.

Application of Law to Facts:

The Court opined that the failure to include GSTIN should not automatically result in exemption denial, especially if the petitioner can later demonstrate compliance with exemption conditions.

Treatment of Competing Arguments:

The petitioner argued that the absence of GSTIN should not negate the exemption if other conditions are met. The respondents contended that GSTIN is essential for determining the place of supply and eligibility for exemption.

Conclusions:

The Court concluded that the third respondent must reconsider the exemption eligibility, considering the petitioner's ability to provide GSTIN and demonstrate government funding.

2. Determination of Intra-state vs. Inter-state Supply

Relevant Legal Framework and Precedents:

Section 12(5) of the IGST Act determines the place of supply based on the recipient's location. The absence of GSTIN and PAN influences whether a supply is classified as intra-state or inter-state.

Court's Interpretation and Reasoning:

The Court highlighted that the absence of GSTIN led to the classification of services as intra-state, impacting the tax liability under KGST/CGST instead of IGST.

Key Evidence and Findings:

The petitioner provided services to establishments in various states, but the lack of GSTIN on invoices resulted in the classification of supplies as intra-state.

Application of Law to Facts:

The Court considered whether the petitioner's services should be deemed inter-state, given the defense establishments' locations and the services' nature.

Treatment of Competing Arguments:

The petitioner argued for inter-state classification, while the respondents maintained that the absence of GSTIN necessitated intra-state classification.

Conclusions:

The Court determined that the classification should be re-evaluated, considering the petitioner's ability to provide GSTIN and the services' nature.

3. Entitlement to Refund of Pre-deposit

Relevant Legal Framework and Precedents:

The CGST/KGST Act outlines the conditions for refunds, including pre-deposits made during appeals.

Court's Interpretation and Reasoning:

The Court did not explicitly address the refund entitlement but implied that the reconsideration of tax liability could impact the pre-deposit status.

Key Evidence and Findings:

The petitioner made a pre-deposit of 10% of the disputed amount during the appeal process.

Application of Law to Facts:

The Court's decision to remand the case for reconsideration suggests potential adjustments to the pre-deposit based on the final tax liability determination.

Treatment of Competing Arguments:

The petitioner sought a refund, while the respondents focused on the procedural correctness of the initial tax assessments.

Conclusions:

The entitlement to a refund will depend on the outcome of the reconsideration by the third respondent.

SIGNIFICANT HOLDINGS

The Court held:

"The petition is allowed-in-part and the impugned order-in-appeal dated 30.09.2023 is quashed and the proceedings are restored to the third respondent to reconsider the merits of the petitioner's response in the light of this Court's observation."

Core Principles Established:

The necessity of GSTIN on invoices should not automatically negate tax exemptions if other exemption conditions are met and can be demonstrated subsequently.

Final Determinations on Each Issue:

The Court quashed the impugned orders and remanded the case for reconsideration, emphasizing the need to evaluate the petitioner's eligibility for exemptions and the classification of services based on the newly provided GSTIN information.

GST exemption for defense training services restored after authorities failed to justify denial despite missing GSTIN details
The Karnataka HC partially allowed a petition challenging a GST recovery notice for training services provided to defense establishments. The petitioner imported bulk simulator training services for helicopter pilots from Indian Air Force, Army, Navy and other defense establishments across Delhi, Jharkhand and Uttar Pradesh. Tax authorities denied exemption benefits due to absence of GSTIN and PAN details in invoices, despite the services being exempt. The HC found that authorities failed to adequately consider whether missing GSTIN details justified denial of exemption, given the peculiar circumstances and exempt nature of training services. The recovery notice dated 17.10.2023 was quashed and proceedings restored for reconsideration.

Denial of exemption for failure to mention GSTIN on tax invoice - place of supply under Section 12(5) of the IGST Act - exemption for services to Central/State Government under Notification No.12/2017 dated 28.06.2017 - mandatory particulars on tax invoice / bill of supply - reopening and reconsideration of assessment on furnishing of GSTIN post noticeDenial of exemption for failure to mention GSTIN on tax invoice - mandatory particulars on tax invoice / bill of supply - Quashing of the order-in-appeal and recovery notice insofar as they sustained demand without examining whether failure to mention the recipient's GSTIN justified denial of exemption - HELD THAT: - The High Court found that the appellate authority concluded that absence of GSTIN on invoices rendered them non-compliant with GST invoicing requirements and, on that basis, denied exemption. The Court held that, given the peculiar facts that the recipients were government/defence establishments outside Karnataka and the supplies (training services) were undisputedly exempt under the Notification No.12/2017, the appellate authority ought to have examined whether non-mention of GSTIN alone could lawfully justify denial of the exemption. The Court emphasised that the question of denial could not be sustained without considering whether the necessary details and the nature of sponsorship by the Central/State Government established entitlement to the exemption, and that the authorities had not carried out that inquiry before upholding the demand. For these reasons the appellate order and consequential recovery notice were quashed to the extent they rested on the observed omission without the requisite adjudication of entitlement to exemption.Impugned order-in-appeal dated 30.09.2023 and recovery notice dated 17.10.2023 quashed in part; appellate order set aside for failure to examine whether omission of GSTIN justified denial of exemption.Place of supply under Section 12(5) of the IGST Act - reopening and reconsideration of assessment on furnishing of GSTIN post notice - exemption for services to Central/State Government under Notification No.12/2017 dated 28.06.2017 - Remand to the appellate authority to reconsider on merits whether exemption applies where GSTIN was not initially furnished but may be demonstrable subsequently and whether services were fully funded by Central/State Government - HELD THAT: - The Court directed that on restoration of the proceedings the appellate authority must reassess the claim by considering the actual place of supply in light of Section 12(5) of the IGST Act and by verifying any GSTIN details or other documentary evidence subsequently furnished by the petitioner. The authority is required to decide whether the supplies to defence and government establishments-if shown to be sponsored and borne entirely by the Central or State Government-fall within the exemption under Notification No.12/2017 and whether post-facto production of GSTIN or PAN/TAN affects the entitlement. The Court remanded the matter for fresh consideration of these factual and legal aspects rather than deciding them itself.Proceedings restored to the third respondent for fresh adjudication of entitlement to exemption and determination of place of supply after considering any GSTIN or supporting material now furnished.Final Conclusion: Petition allowed in part: the High Court quashed the impugned appellate order and the recovery notice to the extent they were sustained without examining whether omission of GSTIN justified denial of exemption, and restored the matter to the appellate authority for fresh consideration of the petitioner's entitlement to exemption (including any GSTIN furnished and whether the services were borne by Central/State Government) for the tax periods 2018-19 to 2021-22.

2023 (12) TMI 983 - MADRAS HIGH COURT Income Tax

AI TextQuick Glance (AI)Headnote

Reassessment notice set aside as petitioner admitted receiving land sale proceeds in 2015, not 2017-18
Madras HC set aside reassessment notice and assessment order for AY 2017-18 regarding capital gains from land sale. Petitioner executed power of attorney and claimed entire sale consideration was received on 16.12.2015, before the relevant assessment year. Court accepted petitioner's admission that sale proceeds were received in 2015, making AY 2017-18 assessment invalid. However, court clarified that if petitioner changes stance, revenue authorities can initiate fresh proceedings. Matter remains pending before appellate authority for AY 2016-17 to determine actual receipt date of sale consideration.

Reopening of assessment under Section 148 - chargeability of capital gains based on date of receipt - operation of Section 50C in computation of capital gains - protective assessment - principles of natural justiceReopening of assessment under Section 148 - chargeability of capital gains based on date of receipt - principles of natural justice - Validity of the notice dated 31.03.2022 under Section 148 and the consequent assessment order dated 29.03.2022 for AY 2017-18 - HELD THAT: - The Court held that the re-opening and assessment for AY 2017-18 were unsustainable because the petitioner admitted that the entire sale consideration was received on 16.12.2015. Receipt of the sale consideration on that date renders the income chargeable to AY 2016-17 and not AY 2017-18; merely executing a sale deed later by the power of attorney holder does not create a fresh liability for AY 2017-18. Having accepted the petitioner's stand (both orally and by affidavit), the Court found the impugned notice and assessment liable to be set aside. The Court also noted the contention regarding issuance of a show-cause/draft assessment and natural justice, and disposed the proceedings by setting aside the impugned notice and order. [Paras 7, 8, 9]Impugned notice dated 31.03.2022 and assessment order dated 29.03.2022 for AY 2017-18 set aside.Operation of Section 50C in computation of capital gains - protective assessment - chargeability of capital gains based on date of receipt - Proceedings in respect of AY 2016-17 to be examined by the appellate authority with regard to date of receipt and computation of capital gains - HELD THAT: - The Court observed that the Revenue contested valuation and invoked market value under Section 50C while asserting a larger capital gain, and that assessment/appeal for AY 2016-17 is pending. Given the petitioner's admission that consideration was received on 16.12.2015, the Court left open the question of taxability for AY 2016-17 and directed that the appellate authority consider the issue of receipt of sale consideration and compute capital gains for AY 2016-17 accordingly. The Court recognised that assessments for both years had been framed, in part, to protect revenue interest, but refused to sustain the reassessment for AY 2017-18 where the petitioner had admitted receipt earlier. [Paras 9]Appellate authority shall decide the pending appeal for AY 2016-17 taking into account the receipt of sale consideration; respondents remain free to initiate proceedings if the petitioner later takes a different stand.Final Conclusion: Writ petition allowed; notice dated 31.03.2022 and assessment order dated 29.03.2022 for AY 2017-18 set aside. The appellate authority is directed to consider the question of receipt of sale consideration and computation of capital gains in the pending appeal for AY 2016-17; respondents may act if the petitioner alters her stand in future.

2023 (12) TMI 551 - KERALA HIGH COURT Income Tax

AI TextQuick Glance (AI)Headnote

Court Dismisses Petition Challenging TDS Late Fee Due to 10-Year Delay; Upholds Section 234E of Income Tax Act.
The HC dismissed the writ petition challenging late fee intimations for not filing TDS statements on time, citing an inordinate delay of over ten years in filing the petition. The court upheld the applicability of Section 234E of the Income Tax Act, 1961, which imposes a late fee for such delays, as it was the law in effect when the notices were issued. The court rejected arguments based on subsequent amendments, affirming that the law at the time of notice issuance governs the case.

Late fee under Section 234E - failure to deliver statement under Section 200(3) - retrospective effect of statutory amendment - laches and inordinate delay in writ petitionsLaches and inordinate delay in writ petitions - Writ petition dismissed for inordinate delay and laches in challenging intimations issued in 2013 and 2016. - HELD THAT: - The Court found that the petitioner approached the High Court more than ten years after the intimations in Exhibits P-1 to P-5 were issued (in 2013 and 2016). The delay and laches in bringing the challenge were held to be a sufficient ground for dismissal. The Court treated the prolonged unexplained delay as fatal to the petition's maintainability and concluded that the writ petition was liable to be dismissed on this ground. [Paras 1, 4]The writ petition is dismissed on the ground of gross delay and laches.Late fee under Section 234E - failure to deliver statement under Section 200(3) - retrospective effect of statutory amendment - Validity of intimations for late fee under Section 234E and rejection of the petitioner's contention based on a subsequent amendment to Section 200A. - HELD THAT: - The Court examined the legal position prevailing on the dates when the intimations were issued and held that Section 234E, inserted by the Finance Act, 2012 with effect from 01.07.2012, governed levy of late fee for failure to deliver the statement within the time prescribed by Section 200(3). The petitioner's submission that an amendment to Section 200A effective from 01.06.2015 rendered the intimations incorrect was rejected because subsequent amendments without retrospective effect cannot be applied to notices issued earlier. The determinative legal standard was the law existing on the date of issuance of the intimations, namely Section 234E. [Paras 2, 3, 4]The intimations charging late fee under Section 234E were valid as per the law in force when issued; the contention based on the later amendment to Section 200A is rejected.Final Conclusion: The writ petition challenging intimations for late fee relating to Assessment Year 2012-13 is dismissed both for inordinate delay and on merits: the late fee under Section 234E was leviable as per the law in force when the notices were issued, and a subsequent non retrospective amendment does not affect those intimations.

2023 (12) TMI 528 - MADRAS HIGH COURT Money Laundering

AI TextQuick Glance (AI)Headnote

Issues: (i) Whether prosecution under the Prevention of Money Laundering Act, 2002 could proceed when the alleged predicate offence had been notified as a scheduled offence only later. (ii) Whether prosecution for possession of disproportionate assets under the Prevention of Corruption Act, 1988 and prosecution for money-laundering under the Prevention of Money Laundering Act, 2002 amounted to double jeopardy or subsumption of one offence within the other. (iii) Whether the Special Court was required to conduct an inquiry under Section 202(2) of the Code of Criminal Procedure, 1973 before issuing summons on a complaint under the Prevention of Money Laundering Act, 2002. (iv) Whether a certificate for appeal to the Supreme Court was warranted.

Issue (i): Whether prosecution under the Prevention of Money Laundering Act, 2002 could proceed when the alleged predicate offence had been notified as a scheduled offence only later.

Analysis: The offence of money-laundering is an independent offence concerned with the process or activity connected with proceeds of crime. The relevant date is the date on which the person indulges in or continues to indulge in dealing with such proceeds, and not the date on which the scheduled offence was committed. The question whether the accused dealt with the proceeds of crime is a factual matter for trial.

Conclusion: The prosecution was maintainable and the issue was not fit for discharge at the threshold.

Issue (ii): Whether prosecution for possession of disproportionate assets under the Prevention of Corruption Act, 1988 and prosecution for money-laundering under the Prevention of Money Laundering Act, 2002 amounted to double jeopardy or subsumption of one offence within the other.

Analysis: The ingredients of the two offences are distinct. Possession of disproportionate assets may be complete even if the illegal money has been spent, whereas money-laundering is made out when a person directly or indirectly attempts to indulge in, assists in, or is actually involved in a process or activity connected with proceeds of crime and projects it as untainted property. The two enactments operate in different fields and one is not subsumed in the other.

Conclusion: The plea of double jeopardy was rejected and the two prosecutions were held to be distinct.

Issue (iii): Whether the Special Court was required to conduct an inquiry under Section 202(2) of the Code of Criminal Procedure, 1973 before issuing summons on a complaint under the Prevention of Money Laundering Act, 2002.

Analysis: The Special Court under the Prevention of Money Laundering Act, 2002 is empowered to take cognizance directly on a complaint by the authorised authority. Since cognizance is not taken by a Magistrate and there is no committal process, the procedure under Section 202(2) of the Code of Criminal Procedure, 1973 does not apply. The authorities relied on by the petitioner were held to be in a different context.

Conclusion: No mandatory inquiry under Section 202(2) of the Code of Criminal Procedure, 1973 was required before issuance of summons.

Issue (iv): Whether a certificate for appeal to the Supreme Court was warranted.

Analysis: The questions raised were already covered by binding Supreme Court authority, and the cited decision on benami property was found factually inapplicable. No unanswered substantial question of law arose for certification.

Conclusion: The request for a certificate for appeal was declined.

Final Conclusion: The revision and original petition were held to be without merit, and the connected miscellaneous petitions were closed.

Ratio Decidendi: Money-laundering under the Prevention of Money Laundering Act, 2002 is an independent and continuing offence based on dealing with proceeds of crime, and a Special Court under that Act may take cognizance directly without the Section 202(2) inquiry applicable to committal-based proceedings before a Magistrate.

Money-laundering is an independent offence; later scheduling of the predicate offence and Section 202 inquiry do not bar prosecution.
Money-laundering under the Prevention of Money Laundering Act, 2002 is an independent and continuing offence concerned with dealing in proceeds of crime, so prosecution may proceed even if the predicate offence was notified as a scheduled offence later, and the relevant date is when the accused dealt with the proceeds. Possession of disproportionate assets under the Prevention of Corruption Act, 1988 and money-laundering under the PMLA have distinct ingredients and operate in different fields, so a double jeopardy objection does not arise. A Special Court under the PMLA may take cognizance directly on a complaint by the authorised authority, and Section 202(2) CrPC inquiry is not mandatory before issuing summons.

Offence of money-laundering as independent offence - Proceeds of crime - Continuing offence - Double jeopardy not attracted between PC Act and PMLA offences - Special Court may take cognizance without committal - Section 44 PMLA overrides CrPC cognizance/committal procedure - Section 202(2) Cr.P.C. inapplicable to PMLA complaintsOffence of money-laundering as independent offence - Proceeds of crime - Continuing offence - Petitioner liable to be prosecuted under Section 3 of PMLA notwithstanding that the predicate offence was committed earlier, subject to factual determination whether he dealt with proceeds of crime after notification as a scheduled offence. - HELD THAT: - The Court applied the principle that the offence under Section 3 of the PMLA is an independent offence concerned with processes or activities connected with the proceeds of crime (concealment, possession, acquisition, use, or projecting as untainted property). The relevant date is when the respondent indulges in the process or activity connected with proceeds of crime; consequently even if the predicate criminal activity occurred earlier, continuing possession or dealing with proceeds after the relevant notification may attract PMLA liability. Whether the petitioner in the present facts has indulged in such dealing is a question of fact for trial. [Paras 8]PMLA prosecution under Section 3 is not barred merely because the predicate offence pre-dates its scheduling; factual inquiry at trial is required to determine dealing with proceeds.Double jeopardy not attracted between PC Act and PMLA offences - Prosecution under Section 3 of PMLA in addition to prosecution under Section 13(1)(e) of the PC Act does not amount to double jeopardy. - HELD THAT: - The Court held that the ingredients of the offence under Section 13(1)(e) of the PC Act (possession of disproportionate assets and inability to account) are different from the ingredients of Section 3 of the PMLA (process or activity connected with proceeds of crime). A public servant may be guilty under the PC Act even if illegally spent money is exhausted, whereas PMLA targets dealing with proceeds of crime and continuing possession or concealment. Given the distinct statutory elements, prosecuting under both statutes is not prohibited as double jeopardy. [Paras 9]The plea of double jeopardy is untenable; the two offences are distinct and separate.Certificate for appeal under Article 134A refused - Request for a certificate to appeal to the Supreme Court under Article 134A(b) was refused. - HELD THAT: - The Court refused to grant a certificate for appeal because the legal question relied upon by the petitioner is already covered by the Supreme Court's decision in Vijay Madan Lal Choudhary and a pending review petition does not justify issuance of a certificate. The purported conflict with the decision in Ganpati Dealcom was held not to be a comparable or conflicting precedent in the facts of this case. [Paras 10]No certificate for appeal under Article 134A(b) issued; petition does not raise an unanswered substantial question of law.Special Court may take cognizance without committal - Section 44 PMLA overrides CrPC cognizance/committal procedure - Section 202(2) Cr.P.C. inapplicable to PMLA complaints - Summons and proceedings by the Special Court under PMLA do not require a prior inquiry under Section 202(2) Cr.P.C.; Section 44 of PMLA permits Special Courts to take cognizance without committal. - HELD THAT: - The Court examined Section 44 of the PMLA and concluded it is an exception to the general cognizance/committal scheme under the Cr.P.C. A Special Court constituted under the PMLA may take cognizance of an offence under Section 3 on complaint by an authorized authority without committal, and shall try offences in accordance with Cr.P.C. as applied to a Sessions Court. Therefore the proviso to Section 202(2) Cr.P.C., which contemplates Magistrate-stage inquiry and production/examination of witnesses when cognizance is by a Magistrate for a Sessions-triable offence, has no application where the Special Court itself takes cognizance under the PMLA scheme. [Paras 13, 14, 18]No obligation to conduct a Section 202(2) Cr.P.C. inquiry before issuing summons in a complaint taken cognizance of by a PMLA Special Court; the Criminal Original Petition challenging summons is dismissed.Final Conclusion: Both the Criminal Revision Case and Criminal Original Petition are dismissed: (i) prosecution under Section 3 PMLA is maintainable subject to trial-level factual determination of dealing with proceeds; (ii) double jeopardy does not bar concurrent proceedings under the PC Act and PMLA; (iii) no certificate for appeal to the Supreme Court is granted; and (iv) Section 202(2) Cr.P.C. inquiry is inapplicable to complaints cognizable by a PMLA Special Court under Section 44, hence summons are sustained.

2023 (12) TMI 222 - MADRAS HIGH COURT Income Tax

AI TextQuick Glance (AI)Headnote

Issues Involved:
The issues involved in this case pertain to challenging a Notice dated 16.03.2022 and subsequent orders dated 31.03.2022 and 28.03.2023 issued by the respondents. The main contentions revolve around the petitioner's request for the statement and documents relied upon by the respondents, as well as the opportunity to cross-examine a key individual, Naresh Jain.

Request for Statement and Documents:
The petitioner's counsel argued that the proceedings against the petitioner were solely based on the statement of Naresh Jain, yet the relevant documents were not provided to the petitioner. The petitioner sought a direction from the Court to compel the respondents to furnish the said statement and documents for review.

Opportunity for Cross-Examination:
Furthermore, the petitioner requested an opportunity to cross-examine Naresh Jain, emphasizing that the proceedings were initiated based on his statement. The petitioner contended that without such an opportunity, the fairness of the proceedings would be compromised.

Legal Considerations and Response:
The Senior Standing Counsel for the respondent argued that the reliance on documents obtained from various sources based on Naresh Jain's statement rendered cross-examination unnecessary, citing legal precedent from Telestar Travel Pvt Ltd vs. Special Director of Enforcement (2013) 9 SCC 549. The respondent assured that the relevant documents would be provided to the petitioner.

Court's Analysis and Decision:
After considering the submissions from both parties and examining the materials on record, the Court noted that the respondent primarily relied on documents sourced from Naresh Jain's statement. The Court concluded that the petitioner was entitled to receive copies of these documents to prepare a detailed reply.

Final Order:
The Court set aside the impugned order dated 28.03.2023 and remitted the matter back to the respondent for re-consideration. The respondent was directed to provide the relied-upon documents to the petitioner within 30 days, after which the petitioner was instructed to file a reply. Subsequently, the respondent was to pass an appropriate order after a personal hearing for the petitioner. The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed accordingly.

Petitioner entitled to receive all documents obtained from witness statement despite respondent's claim of non-reliance on oral testimony
The HC held that the petitioner was entitled to receive copies of documents obtained based on a witness statement, even though the respondent claimed not to rely on the oral statement itself but only on documents derived from it. In proceedings concerning bogus LTCG through penny stock transactions, the court found that since the respondent relied on documents obtained from various sources based on the witness statement, the petitioner must be provided these documents to enable filing a detailed reply. The respondent's counsel acknowledged that some relied-upon documents had not been provided and agreed to furnish them promptly.

Right to receive documents relied upon - cross-examination unnecessary where oral statement not relied upon - remand for reconsideration after disclosure and hearing - opportunity of personal hearingRight to receive documents relied upon - Petitioner entitled to copies of documents obtained from various sources based on the statement of Naresh Jain which were relied upon in the assessment proceedings. - HELD THAT: - The Court found that the respondents had relied upon documents collected from various sources on the basis of the oral statement of Naresh Jain and that some of those documents were not furnished to the petitioner. Furnishing those documents is necessary to enable the petitioner to file a detailed reply. The learned Senior Standing counsel for the respondent conceded that certain relied-upon documents were not provided and undertook to supply them. In these circumstances the Court concluded that the petitioner must be supplied the documents obtained based on Naresh Jain's statement so that she may meaningfully respond before any final order is passed. [Paras 12, 13]Respondent directed to provide the documents obtained from various sources based on the statement of Naresh Jain to the petitioner within 30 days.Cross-examination unnecessary where oral statement not relied upon - Cross-examination of Naresh Jain was not necessary where the authorities did not rely upon his oral statement but on documents obtained as a consequence of that statement. - HELD THAT: - The Court recorded the parties' submissions and referred to the principle in Telestar Travel Pvt. Ltd. v. Special Director of Enforcement that where an oral statement is not utilized as evidence, cross-examination of the declarant is not required. The respondents asserted that they relied upon documentary material corroborating the information derived from the statement and did not depend on the oral statement itself. The petitioner accepted that if only documents are relied upon, cross-examination is not required, but sought disclosure of those documents. The Court accepted that cross-examination of Naresh Jain was not necessary in the circumstances. [Paras 9, 10, 11]Court held that cross-examination of Naresh Jain was not required where the oral statement was not relied upon as evidence.Remand for reconsideration after disclosure and hearing - opportunity of personal hearing - Impugned assessment order dated 28.03.2023 set aside and remitted for fresh consideration after furnishing of documents and opportunity for the petitioner to reply and for personal hearing. - HELD THAT: - Having directed disclosure of the relied-upon documents, the Court remitted the matter to the respondent to reconsider the impugned order. The petitioner was required to file a detailed reply within 30 days of receiving the documents, failing which consequences against her would follow. Thereafter the respondent was directed to pass an appropriate order in accordance with law after providing the petitioner a personal hearing. The Court expressly confined its order to setting aside and remitting the impugned assessment order dated 28.03.2023 and declined to express views on other reliefs sought in the petition. [Paras 13]Impugned order dated 28.03.2023 set aside and remitted to the respondent for reconsideration after disclosure, filing of reply by the petitioner, and a personal hearing.Final Conclusion: Impugned assessment order dated 28.03.2023 is set aside and remitted for fresh consideration; respondents to furnish relied-upon documents obtained from sources based on Naresh Jain's statement within 30 days; petitioner to file reply within 30 days thereafter; respondent to pass appropriate order after providing personal hearing.

2023 (12) TMI 159 - MADRAS HIGH COURT GST

AI TextQuick Glance (AI)Headnote

Tax Appeal Granted: Partial Bank Account Unfreeze Allows Petitioner to Challenge Demand and File Statutory Appeal Within 4 Weeks
HC allowed petitioner's appeal against tax demand, granting liberty to file statutory appeal before Deputy Commissioner within 4 weeks. Court directed partial bank account unfreeze, permitting 10% withdrawal to facilitate appeal filing. Interim relief provided without imposing costs, addressing ITC recovery demand and related penalty concerns under TNGST Act.

Recovery of input tax credit and penalty under Section 73 of the TNGST Act - statutory appeal - entertain appeal and decide on merits - freezing of bank account - interim withdrawal for filing appealStatutory appeal - entertain appeal and decide on merits - Petition disposed of with liberty to the petitioner to file the statutory appeal and direction to the Deputy Commissioner to entertain and decide the appeal on merits. - HELD THAT: - The writ petition challenging the order confirming demand of recovery of input tax credit, interest and penalty was not adjudicated on merits by this Court because the petitioner has an available statutory remedy. The petition is therefore disposed of by granting the petitioner four weeks' time to file the statutory appeal before the Deputy Commissioner, Tirunelveli. Upon filing within the stipulated period the Deputy Commissioner is directed to admit and adjudicate the appeal on its merits without being influenced by the pendency of this writ petition.Writ petition disposed; petitioner permitted to file statutory appeal within four weeks and Deputy Commissioner directed to entertain and decide the appeal on merits.Freezing of bank account - interim withdrawal for filing appeal - The question of freezing of the petitioner's bank account is to be decided by the Deputy Commissioner, with an interim direction permitting limited withdrawal for filing the appeal. - HELD THAT: - The Court declined to decide the legality or propriety of the bank account freeze and remitted that issue to the Deputy Commissioner for determination in the course of the statutory appeal or separate proceedings before him. As an interim, facilitative measure to enable the petitioner to prosecute the statutory appeal, the Deputy Commissioner is authorised to permit the petitioner to withdraw 10% of the amount required for filing the appeal from the frozen bank account within four weeks. This interim permission is limited to enabling the filing of the appeal and does not constitute an adjudication on the merits of the freezing.Freezing of bank account remitted to the Deputy Commissioner for decision; interim permission to withdraw 10% for filing the appeal within four weeks.Final Conclusion: The writ petition is disposed of by permitting the petitioner to file the statutory appeal within four weeks; the Deputy Commissioner, Tirunelveli, shall entertain and decide the appeal on merits. The issue of the frozen bank account is remitted to the Deputy Commissioner, who may, as an interim measure, permit a 10% withdrawal from the account to enable filing of the appeal. No costs.

2023 (12) TMI 1107 - KARNATAKA HIGH COURT Central Excise

AI TextQuick Glance (AI)Headnote

Adjustment of excess pre-deposit under the Sabka Vishwas Scheme was permitted against another pending legacy demand.
Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, an excess pre-deposit made by the same declarant against one demand could be adjusted against liability under another pending demand relating to the same subject matter, because the Scheme contained no express bar on such adjustment. The Court relied on the departmental circular stating that deposits made during enquiry, investigation, audit, or appellate proceedings may be deducted or adjusted while computing the amount payable. Since the declarant sought adjustment, not refund, the excess deposit was treated as available for set-off against the second demand.

Adjustment of excess pre-deposit - Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDR) - no refund under SVLDR - mutual adjustment across assessment periods - administrative circular clarification - strict construction of fiscal statutesAdjustment of excess pre-deposit - mutual adjustment across assessment periods - Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDR) - Whether excess pre-deposit made by the declarant in relation to one period could be adjusted towards a demand for another period under the SVLDR framework. - HELD THAT: - The Court held that the petitioner, having availed the relief under SVLDR for the earlier period and thereby resulting in an excess pre-deposit, was entitled to have that excess adjusted against a subsequent demand for a different period. Although SVLDR and its rules do not provide for refund of excess deposits, the absence of an express prohibition on consolidating declarations or on adjusting amounts between demands for the same declarant and same subject matter meant that such mutual adjustment could not be disallowed. The court placed weight on the administrative clarification which recognized that amounts paid as deposits or pre-deposits that could not be appropriated earlier may be deducted/adjusted when issuing the statement indicating the amount payable by the declarant. The tribunal and departmental orders confirming demands for different periods did not preclude adjustment of an excess arising under SVLDR in respect of the earlier period towards the later reduced demand. [Paras 8, 9, 10]Excess pre-deposit attributable to the declared SVLDR liability for 2011 - 2015 could be adjusted against the subsequent demand for 16.09.2015 to 30.06.2017; the writ court's direction to adjust and issue a discharge certificate was upheld.No refund under SVLDR - administrative circular clarification - strict construction of fiscal statutes - Whether the fact that SVLDR rules do not provide for refund precludes administrative adjustment of excess deposits across periods. - HELD THAT: - The Court recognized that Rule 130(1)(b) of the SVLDR Rules does not permit refund, and that principle of strict construction of fiscal statutes is a relevant interpretive guideline. However, the Court found that the explicit bar on refund did not automatically forbid administrative adjustment of excess deposits when an assessee did not seek refund but only sought appropriation against another liability. The departmental circular (No. 1074/07/2019-CX dated 12.12.2019) clarified that deposits made after show cause notice but prior to adjudication, which remain unappropriated due to pendency, may be deducted/adjusted when issuing the statement of amount payable. In these circumstances, and given absence of a specific statutory prohibition on mutual adjustment between periods for the same declarant and commodity, the court concluded adjustment was permissible despite no refund provision. [Paras 8, 9, 10]Absence of an express refund mechanism in SVLDR does not preclude administrative adjustment of excess deposits across periods where the declarant seeks appropriation rather than refund; the departmental clarification supports such adjustment.Final Conclusion: Writ appeal dismissed; the High Court's order directing adjustment of the excess amount deposited under SVLDR against the subsequent demand and issuance of a discharge certificate is upheld, and the interim order granted earlier stands vacated.

2023 (12) TMI 1190 - SC Order Income Tax

Quick Glance (AI)Headnote

Special Leave Petition dismissed with liberty to raise the issue again if an adverse final High Court order is passed.
Delay was condoned and the Supreme Court declined to interfere in the matter, dismissing the Special Leave Petition. Liberty was reserved for the petitioner to raise the issue again if an adverse final order is passed by the High Court against it, and the pending applications were disposed of.

2023 (12) TMI 1186 - TELANGANA HIGH COURT Income Tax

AI TextQuick Glance (AI)Headnote

Relief under s.119(2)(b) permits liberal condonation of delay; rejection of condonation and assessment order quashed
HC allowed the writ, set aside the impugned order rejecting the application for condonation of delay under s.119(2)(b), and quashed the consequential assessment-related order. The court held s.119(2)(b) permits a liberal approach to condone delay, noting the entity was registered under s.12A, the return and audited report (though belatedly uploaded) were filed well before the assessment order, and the authority should have allowed the condonation. Respondent is directed to pass an appropriate consequential order in accordance with law.

Condonation of delay under Section 119(2)(b) of the Income Tax Act - directory nature of audit report/Form 10B - substantial compliance - avoidance of genuine hardship - non-speaking/cryptic order - quashing of consequential ordersCondonation of delay under Section 119(2)(b) of the Income Tax Act - non-speaking/cryptic order - avoidance of genuine hardship - Impugned order dated 31.07.2023 rejecting the application for condonation of delay in filing Form 10B for AY 2017-18 was arbitrary, cryptic and required to be set aside. - HELD THAT: - The Court examined the impugned order and found it to be cryptic and non-speaking, not dealing with the grounds advanced under Section 119(2)(b). Section 119(2)(b) confers a discretionary and liberal power to condone delay to avoid genuine hardship. On the facts, the return was filed within time, the audit report was prepared on 20.09.2017 and was uploaded belatedly but well before the assessment order dated 24.09.2021. Given the statutory purpose of Section 119(2)(b) and the absence of reasoned consideration in the impugned order, the Court concluded that the rejection was unsustainable and interference was warranted. The Court therefore set aside the impugned order and directed the authority to pass consequential orders in accordance with law. [Paras 14, 15, 16, 17, 22]Impugned order rejecting condonation application quashed; application for condonation of delay allowed; respondent directed to pass consequential order in accordance with law.Directory nature of audit report/Form 10B - substantial compliance - Non-filing/late filing of the audit report in Form 10B is procedural and, on substantial compliance, cannot automatically defeat entitlement to exemption under Section 11. - HELD THAT: - Relying on established precedent and the legislative purpose, the Court treated the requirement to furnish the auditors' report as procedural and directory. The Court noted authorities holding that substantial compliance suffices and that the auditor's report may be furnished at a later stage, including before assessment, if sufficient cause is shown. On the facts, the audit report was prepared within time and uploaded well before the assessment order; accordingly denial of exemption merely on the ground of belated uploading without reasoned consideration was inappropriate. [Paras 18, 19, 20, 21, 22]Requirement to file Form 10B treated as directory; substantial compliance found on the facts and the late filing did not justify denial of exemption without reasoned exercise of discretion.Final Conclusion: Writ petition allowed. Impugned order dated 31.07.2023 rejecting the condonation application set aside; consequential orders quashed; application for condonation of delay in filing Form 10B for AY 2017-18 allowed and respondent directed to pass appropriate consequential order in accordance with law.

2023 (12) TMI 1051 - MADRAS HIGH COURT GST

AI TextQuick Glance (AI)Headnote

GST input tax credit blocked by non-functional GSTR-2 and portal limits on GSTR-3B; manual returns allowed, orders quashed.
Denial of belated ITC and rejection of returns was challenged on the ground that the statutory mechanism to claim ITC through GSTR-2 was not operational, and the online portal prevented filing of GSTR-3B unless output tax was paid, thereby obstructing ITC claims. The HC held that, absent notification/enabling of GSTR-2 and given the portal's technical restriction, the taxable person could not be faulted for non-filing; physical filing evidenced bona fides and there was no revenue loss since tax liability was paid. Consequently, the impugned orders were quashed and the matter remitted, with directions to permit manual filing of returns to enable ITC claims even where output tax is unpaid.

Claim of Input Tax Credit - form and manner of claiming ITC under Rule 60 - non notification of Form GSTR 2 and its consequence - use of GSTR 3B to avail input tax credit - absence of an enabling mechanism prejudicing the assessee - permissibility of manual filing where electronic facility is not provided - non speaking order - remand for reconsideration of ITC claimClaim of Input Tax Credit - form and manner of claiming ITC under Rule 60 - non notification of Form GSTR 2 and its consequence - use of GSTR 3B to avail input tax credit - Entitlement to claim and retain ITC where Form GSTR 2 (prescribed under Rule 60) was not notified and the assessee had filed GSTR 3B physically/otherwise to account for ITC for the specified financial years. - HELD THAT: - The Court accepted the petitioner's contention that Rule 60 prescribes Form GSTR 2 for specifying inward supplies for ITC but that the Form GSTR 2 was not made available by GSTN; in that factual setting the absence of the statutorily prescribed enabling mechanism (GSTR 2) meant the assessee could not reasonably be expected to comply electronically. The Court observed that where the statutory/portal mechanism required for a taxpayer to claim credit is not available, the assessee should not be prejudiced and reliance on the recorded GSTR 3B filings (including physically tendered returns) cannot be the sole basis to deny legitimately entitled credit. The Court noted that the respondents' order failed to deal with this specific contention and that precedents of this Court and other High Courts support not denying ITC where there is no enabling mechanism for electronic claim. Applying that reasoning to the financial years in dispute, the Court concluded that the disallowance on the ground of belated claim without addressing non notification of GSTR 2 and portal constraints was unsustainable.Impugned orders disallowing ITC on the stated ground quashed; petitioner entitled to have ITC claim reconsidered in light of non notification of GSTR 2 and related portal constraints.Absence of an enabling mechanism prejudicing the assessee - permissibility of manual filing where electronic facility is not provided - non speaking order - Whether the authorities could sustain the assessment/order without addressing the petitioner's plea about lack of electronic facility and while issuing a non speaking order. - HELD THAT: - The Court found that the assessing authority did not deal with the petitioner's specific contentions that (a) GSTR 2 was not notified and hence electronic filing under the prescribed form was impossible, and (b) practical portal constraints prevented online filing of GSTR 3B where outward tax payment was not enabled. The order under challenge was held to be non speaking in that it did not meet or answer these determinative contentions. In view of the absence of an effective mechanism on the portal and the failure of the authority to consider the petitioner's bona fide explanations (including physical submissions), the Court held that the respondents could not rely on those technical non compliances to deny credit without fresh consideration.The orders were set aside for being non speaking and for failure to consider the enabling mechanism plea; authorities directed to permit manual filing where portal facility is absent and to reconsider the ITC claims.Remand for reconsideration of ITC claim - remand for reconsideration - Whether the matter should be remitted to the assessing authority for fresh consideration of the ITC claim and, if so, on what terms. - HELD THAT: - The Court remitted the matter to the respondents for fresh consideration because the assessing order had confirmed proposals without addressing crucial legal and factual contentions about non notification of GSTR 2 and portal limitations. The Court directed that the petitioner be permitted to file manual/belated returns when the petitioner claims ITC but cannot electronically file/pay output tax due to portal constraints, and that the authorities accept and examine such returns; if on reconsideration the returns are otherwise in order and in accordance with law, the ITC claim should be allowed. The remand contemplates adjudication on merits after affording the petitioner an opportunity to place records and for the authority to decide afresh.Matter remitted to authorities for reconsideration; respondents directed to permit manual filing and to accept belated returns and allow ITC if returns are in order.Remedy by way of writ where enabling mechanism absent - Maintainability of writ petitions despite availability of alternative appellate remedy where the grievance arises from absence of an enabling mechanism on the statutory portal. - HELD THAT: - Although the respondents contended that an alternative remedy by appeal was available, the Court entertained the writ petitions because the challenge related to the systemic absence of an enabling mechanism (non notification of Form GSTR 2 and portal incapacity) which, if left unaddressed, would cause irreparable prejudice to taxpayers. The Court exercised its discretionary jurisdiction and granted relief by quashing the impugned orders and directing remedial measures rather than relegating the petitioner to the appellate forum alone.Writ petitions allowed; Court exercised jurisdiction to grant relief given the systemic portal/notification issues and potential prejudice to the assessee.Final Conclusion: Impugned orders dated 16.08.2022 quashed. Petitioner permitted to file manual/belated returns for the relevant financial years (2017-2018 and 2018-2019) where the statutory Form GSTR 2 was not notified or portal constraints prevented electronic filing; matter remitted to authorities to reconsider the ITC claims afresh and allow the credit if returns and records are in order.

Page of 76

Press 'Enter' after typing page number.

1101 to 1120 of 1518 Results

Case Laws

All › 2023 › 2023 (12)

All Case Laws

Showing Results for :

Reset Filters

Page of 76

Press 'Enter' after typing page number.

1101 to 1120 of 1518 Results

No Records Found

Case Laws

All Case Laws

Showing Results for : Reset Filters

Topics

Acts Income Tax

➔Previous Next ➔

Contact Us At :

FAQs :

Most Asked Video Tutorials :

Submit Feedback/Suggestion :

Case Laws

Case Laws

Topics