Notice of Service tax for 16-17 for Labor supply

[Rohit Singh]

I am looking for a view/feedback/contact in Income Tax department (PrayagRaj).. My brother has got a fine of 24 lacs (initial 6.7 lacs in 2022 notice and then double fine plus some other fee and interest) for 2016-17 and I have studied all his notices and tried to understand taxation using ChatGPT and reading all the rules/ nuances around Service Tax/ VAT to GST, referenced in notices.

For 2016-17, his income tax was declared at Rs 4.5 lacs and in 2022, initial notice never detailed on Tax criteria. He builds houses by providing design/Labor/material handling.

[KASTURI SETHI]

The following judgements can be helpful to you :-

(i) Demand is based on Income tax Portal. No fraud, suppression present. Extended period cannot be invoked.-------CESTAT Kolkata in the case of Balajee Machinery - 2022 (8) TMI 704 - CESTAT KOLKATA

(ii) Demand cannot be confirmed on the basis of Form 26AS without proper basis---CESTAT Chandigarh reported as in the case of Raj Mohan, Yamuna Nagar Vs. Commissioner, ST, CGST, Panchkula - 2022 (8) TMI 832 - CESTAT CHANDIGARH Issue mismatch between ST-3 Returns and Form 26AS/Income Tax Returns.

[Rohit Singh]

Hi Kasturi Sethiji.. Thanks a ton and I admire your energy to answer in so much details. Seems you are using your knowledge, experience, to simplify tax jargons of many else they will fall prey to complex taxation law and fear of Tax departments (leading to corruption and bribe etc). Will read the cases.

[KASTURI SETHI]

Sh. Rohit Singh Ji,

You appear to be a qualified person. If transactions are genuine with documentary evidence  and you are strong on merits, contest the case  without being a  victim of phobia of the department. I am of the view that honesty and integrity exist in the department. All is not bad. Be optimistic to win the case  ON MERITS.

AI Summary

Reliance on Form 26AS or tax portal records cannot alone sustain a service tax demand; contest on documentary merits.
Reliance solely on income tax portal entries or Form 26AS is inadequate to sustain a service tax demand; the extended assessment period cannot be invoked absent proven fraud, suppression or concealment. Where transactions are genuine and supported by documentary evidence, the appropriate response is to contest the demand on merits, challenging the evidentiary basis of third party data and the absence of a demonstrated concealment.