TaxTMI Updates e-Newsletter
Aug 07,2020

Government Entity - concessional GST rate for construction services to Government Entity - works contract - composite supply - construction services - applicable rate of tax 18% (9% CGST + 9% SGST)

Government Entity - concessional GST rate for construction services to Government Entity - works contract - construction services - applicable rate of tax 18% (9% CGST + 9% SGST) - Whether services provided by the applicant to M/s Odisha Power Transmission Corporation Limited (OPTCL) qualify as services to a "Government Entity" and the rate of GST applicable to such services. - HELD THAT: - The Authority examined the definition of "Government Entity" as inserted into the notification and applied it to OPTCL. OPTCL is a wholly owned government company, was vested with transmission business by a statutory transfer scheme, is notified as the State Transmission Utility and a deemed transmission licensee under the Electricity Act, 2003; accordingly OPTCL falls within the definition of "Government Entity" in the relevant notification. The services rendered by the applicant are execution of EPC works for substations and associated lines and, by statutory definition, constitute a "works contract" and a composite supply treated as service under Schedule II. The Authority found that the works are for commercial/business use by OPTCL (industrial nature), and therefore do not qualify for the concessional rate provided under the entry for works predominantly for non-commercial uses or certain specified non-commercial structures. For the period 01.07.2017 to 31.03.2019 the services fall under entry (ii) of S. No. 3 (composite supply of works contract) attracting 18% (9% CGST + 9% SGST). After omission of that entry w.e.f. 01.04.2019, the services fall under the residual entry (xii) of S. No. 3 and continue to attract tax at 18% (9% CGST + 9% SGST).

Services to OPTCL are services to a "Government Entity", but the EPC/works contract services are commercial in nature and attract GST at 18% (9% CGST + 9% SGST) for the periods indicated.

Final Conclusion: OPTCL is a "Government Entity" within the notification, but the EPC works executed by the applicant are industrial/commercial works contract services and do not qualify for concessional rates; they attract GST at 18% (9% CGST + 9% SGST) (01.07.2017-31.03.2019 under entry (ii), and from 01.04.2019 under the residual entry).

Taxability of food supplied to hospitals on outsourcing - Classification as outdoor catering versus restaurant/canteen - Exemption for health care services by a clinical establishment - Applicability of reduced GST rate for supplies to institutions on contractual basis - Condition of non-availability of input tax credit for reduced rate - Temporal application of GST rates based on notifications and GST Council decisions

Taxability of food supplied to hospitals on outsourcing - Exemption for health care services by a clinical establishment - Supply of food by the applicant to hospitals on an outsourcing/contractual basis is taxable under GST and not covered by the exemption granted to health care services provided by a clinical establishment. - HELD THAT: - The Authority examined whether the exemption for health care services by a clinical establishment (entry relied upon in Notification No. 12/2017) covers food supplied to in patients when that food is provided by a person other than the clinical establishment pursuant to a contract. Relying on the terms of the notification and Circular No. 32/06/2018, the Authority held that the exemption applies only where the clinical establishment itself provides the food as part of health care services to in patients. Where supply is made by an external supplier under contract (as in the applicant's case, who manages the canteen and is paid by the hospital), the service is not exempt and GST is therefore payable. [Paras 11, 12]

GST is payable on the applicant's supply of food to hospitals on outsourcing/contractual basis; exemption for clinical establishments does not apply to outsourced supplies.

Classification as outdoor catering versus restaurant/canteen - Applicability of reduced GST rate for supplies to institutions on contractual basis - Temporal application of GST rates based on notifications and GST Council decisions - Condition of non-availability of input tax credit for reduced rate - The applicable GST rate on the taxable supply depends on the temporal scope of notifications and GST Council decisions: (a) for the initial period the supply attracts the higher rate applicable to outdoor catering; (b) subsequent amendments brought such institutional contractual supplies within the reduced rate entry subject to the non availability of input tax credit. - HELD THAT: - The Authority analysed the sequence of notifications and GST Council deliberations. Early entries and the Council's decision treated supplies made at the premises of the customer by an outsourced supplier as falling within the description of outdoor catering, attracting a higher rate (initially 18% as reflected in the ruling for the earlier period). Later amendments and the GST Council's subsequent decisions reclassified supplies to institutions on contractual basis (including canteens/mess/cafeteria of hospitals) under the reduced entry for restaurant/institutional supplies, subject to the condition that input tax credit on inputs used in making such supplies has not been taken. Applying these changes to the applicant's facts, the Authority concluded that the rate applicable changed with effect from the dates indicated in the notifications and rulings. [Paras 17, 20, 22, 23]

For the period 01.07.2017 to 26-07-2018 the supply attracts the earlier higher rate (18% - CGST 9% + SGST 9%); from 27.07.2018 onwards the supply is taxable at the reduced rate subject to the non availability of input tax credit (5% - CGST 2.5% + SGST 2.5% as specified).

Final Conclusion: The Authority ruled that the applicant's outsourced supply of food to hospitals is taxable; the applicable rate is time dependent - 18% for 01.07.2017 to 26-07-2018 and 5% from 27.07.2018 onwards, provided input tax credit on inputs used in supplying the service has not been taken.

Input tax credit - Section 17(5)(d) exclusion of input tax credit for goods or services received for construction of immovable property (other than plant and machinery) - Immovable property includes land and buildings - Explanation excluding building from "plant and machinery" - Notwithstanding override of Section 16(1) by Section 17(5)

Input tax credit - Section 17(5)(d) exclusion of input tax credit for goods or services received for construction of immovable property (other than plant and machinery) - Immovable property includes land and buildings - Explanation excluding building from "plant and machinery" - Whether input tax credit of GST paid on lease premium, annual lease rentals and maintenance charges paid to the lessor for lease of land is admissible to the applicant - HELD THAT: - Sections 16 to 19 govern entitlement to input tax credit but Section 17(5) carves out situations where credit is not available and begins with a non obstante clause capable of overriding Section 16(1). Clause (d) of Section 17(5) bars input tax credit in respect of goods or services received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account, including when such goods or services are used in the course or furtherance of business. The General Clauses Act definition of "immovable property" includes land and things attached to the earth, and the lease agreement shows the applicant acquired land on lease for construction of a building to be used for its laboratory. The explanation to Section 17(5) defines "plant and machinery" and expressly excludes buildings. On the facts, the lease premium, annual rentals and maintenance charges relate to land/activities for construction of immovable property on the applicant's own account and therefore fall squarely within the exclusion in Section 17(5)(d). The applicant's contentions and cited authorities were held inapposite to these facts and statutory scheme, and accordingly input tax credit on the referred charges is barred. [Paras 8, 9]

Input tax credit on lease premium, annual lease rentals and maintenance charges paid for lease of land used for construction of immovable property on the applicant's own account is not admissible under clause (d) of Section 17(5).

Final Conclusion: Advance Ruling: The Authority holds that GST paid on lease premium (one time), annual lease rentals and maintenance charges in relation to the leased land-used for construction of a building on the applicant's own account-does not qualify for input tax credit under clause (d) of Section 17(5).

Classification of goods by tariff heading - Loss of essential characteristics by processing - Distinction between animal feed and raw material/inputs for animal feed - Interpretation of Chapter and Section Notes of the Customs Tariff - Exemption notification applicability to feeds versus inputs - Applicable GST rate as per rate notifications read with tariff classification

Classification of goods by tariff heading - Loss of essential characteristics by processing - Distinction between animal feed and raw material/inputs for animal feed - Interpretation of Chapter and Section Notes of the Customs Tariff - Applicable GST rate as per rate notifications read with tariff classification - HSN classification and GST rate applicable to the product 'poultry meal' manufactured by the applicant - HELD THAT: - The Authority examined the manufacturing process and observed that chicken wastages are cooked, dried and powdered, producing a product used as an input by animal/aqua feed manufacturers. Chapter Note to Chapter 23 requires that goods obtained by processing animal materials to such an extent that they have lost the essential characteristics of the original material may fall in Chapter 2309, but the Authority found that the applicant's product is a flour/meal of meat offal and is appropriately classifiable under Chapter Heading 2301, specifically sub-heading 2301 10 90 (others). The Authority distinguished between finished animal feed and raw materials/inputs for feed, relying on the Larger Bench holding that inputs for animal feed are different from animal feed, and held that the product is not covered by the exemption entry for feeds. Having classified the product under 2301 10 90, the Authority held that the supply attracts GST at 5% (2.5% CGST + 2.5% SGST) as per the rate notification schedule applicable to that tariff entry. [Paras 8]

The product 'poultry meal' is classifiable under Chapter Sub Heading 2301 10 90 and attracts GST at 5% (2.5% CGST + 2.5% SGST).

Classification of goods by tariff heading - By product classification - Applicable GST rate as per rate notifications read with tariff classification - HSN classification and GST rate applicable to the product 'poultry fat' supplied by the applicant - HELD THAT: - The Authority noted that 'poultry fat' emerges as a by product during processing. The Tariff contains entries for fats not rendered (heading 0209) and for rendered/extracted fats (heading 1501). Given that the applicant supplies rendered/extracted poultry fat obtained during manufacture, the product is classifiable under Chapter Sub Heading 1501 90 00. Under the rate notification schedule, poultry fat so classified attracts GST at 12% (6% CGST + 6% SGST/UTGST). [Paras 8]

The product 'poultry fat' is classifiable under Chapter Sub Heading 1501 90 00 and attracts GST at 12% (6% CGST + 6% SGST/UTGST).

Final Conclusion: Advance Ruling: 'Poultry meal' is classifiable under Chapter Sub Heading 2301 10 90 and taxable at 5% (2.5% CGST + 2.5% SGST); 'Poultry fat' is classifiable under Chapter Sub Heading 1501 90 00 and taxable at 12% (6% CGST + 6% SGST/UTGST).

Section 171 of the CGST Act, 2017 - obligation to pass on benefit of tax rate reduction - commensurate reduction in prices - profiteering - investigation under Rule 129 of the CGST Rules, 2017 - determination and deposit of profiteered amount under Rule 133 of the CGST Rules, 2017 - deposit in Consumer Welfare Funds where recipients are not identifiable

Section 171 of the CGST Act, 2017 - obligation to pass on benefit of tax rate reduction - commensurate reduction in prices - The GST rate on the product was reduced and the legal obligation to pass on the benefit to recipients by way of commensurate reduction in price applied to the Respondent. - HELD THAT: - The Authority found that the Central Government reduced the rate of GST on primary cells and primary batteries (HSN-8506) from 28% to 18% with effect from 15.11.2017 and that the product supplied by the Respondent fell under that HSN. Section 171 requires any reduction in the rate of tax to be passed on to recipients by a commensurate monetary reduction in price; there is no alternative mechanism to satisfy that obligation. The Authority therefore proceeded on the basis that the Respondent was required to reduce his prices in absolute terms upon the rate reduction. [Paras 8, 9, 19]

The reduction in GST rate applied to the Respondent's product and he was legally obliged under Section 171 to pass on the benefit by way of commensurate reduction in prices.

Profiteering - comparison of pre- and post-rate reduction base prices - The Respondent did not pass on the benefit of the GST rate reduction and profiteered; the profiteered amount was determined as Rs. 1,57,200/-. - HELD THAT: - The DGAP analysed invoice-wise outward supplies and compared average base prices for the pre-reduction period with actual invoice-wise base prices after 15.11.2017. The analysis showed that base prices for affected Duracell battery items were increased post-reduction, resulting in higher sales realization despite the lower tax rate. Item-wise computations were aggregated to a net profiteered amount. The Authority accepted the DGAP's methodology and computation and found contravention of Section 171. [Paras 10, 12, 21]

The Respondent contravened Section 171 and the profiteered amount is fixed at Rs. 1,57,200/-.

Determination and deposit of profiteered amount under Rule 133 of the CGST Rules, 2017 - deposit in Consumer Welfare Funds where recipients are not identifiable - The Respondent was directed to deposit the determined profiteered amount with interest into the Consumer Welfare Funds in absence of identifiable recipients, and to reduce prices going forward. - HELD THAT: - Relying on Rule 133, the Authority directed the Respondent to deposit the profiteered amount of Rs. 1,57,200/- along with interest at 18% from the date of collection until deposit. Since recipients could not be identified, the deposit was ordered to be made into the Central and concerned State Consumer Welfare Funds in a 50:50 ratio. The Respondent was also directed to reduce prices of his products in accordance with the reduction in the rate of tax. [Paras 21]

The Respondent must deposit Rs. 1,57,200/- with interest @18% into the Central and State CWFs (50:50) and reduce prices as required.

Penalty under Section 171(3A) of the CGST Act, 2017 - effect of payment on liability for penalty - No penalty under Section 171(3A) was imposed because the Respondent paid the profiteered amount along with interest. - HELD THAT: - The Respondent furnished evidence of payment of the profiteered amount and interest to the Consumer Affairs Department and Central Consumer Welfare Fund. Having paid the entire determined amount together with interest, the Authority recorded that the Respondent was apparently not liable for imposition of penalty under the cited provision. [Paras 22]

Penalty under Section 171(3A) was not imposed as the Respondent paid the determined amount and interest.

Final Conclusion: The Authority held that the GST rate reduction from 28% to 18% applied to the Respondent's Duracell battery supplies and that he failed to pass on the benefit, thereby profiteering. The profiteered amount was fixed at Rs. 1,57,200/-, for deposit with interest @18% into the Central and State Consumer Welfare Funds (50:50), the Respondent was directed to reduce prices going forward, and no penalty was imposed as the amount and interest have been paid.

Violation of principles of natural justice - legitimate expectation - personal hearing - setting aside assessment order for breach of natural justice - remand for fresh hearing by video conferencing

Violation of principles of natural justice - legitimate expectation - personal hearing - Assessment order passed prior to the date fixed for personal hearing was vitiated for breach of principles of natural justice and legitimate expectation. - HELD THAT: - The show cause notice issued to the assessee expressly fixed a date for personal hearing. That clear stipulation created a legitimate expectation that the assessee would be heard on the stated date and that any assessment order would follow the hearing. An order of assessment dated earlier than the scheduled hearing date undermines that expectation and amounts to a violation of the principles of natural justice. The Revenue's explanation that the scheduled date was a typographical error and that the hearing had in fact occurred on an earlier date was not accepted as a sufficient answer to cure the breach. Consequently the impugned assessment order was set aside and the matter remitted for fresh personal hearing. [Paras 4, 5]

Impugned assessment order set aside for breach of natural justice; matter remitted for fresh personal hearing and fresh assessment in accordance with law.

Remand for fresh hearing by video conferencing - Direction for mode, date and timeline for conducting the remanded personal hearing and completion of assessment. - HELD THAT: - Having set aside the assessment, the Court directed that the respondent officer conduct the personal hearing by video conferencing on the specified date and time, as preferred by the parties. The Court further directed that an order of assessment be passed within four weeks from the conclusion of that personal hearing, and otherwise in accordance with law. These directions limited the remand to a fresh hearing and completion of the assessment thereafter within the timeline fixed by the Court. [Paras 5]

Personal hearing ordered by video conferencing on the fixed date and assessment to be passed within four weeks from conclusion of that hearing.

Final Conclusion: Writ petition allowed; assessment for 2017-18 set aside for breach of natural justice and remitted for a fresh personal hearing by video conferencing with directions to complete and pass the assessment within four weeks of that hearing.

Set-off of unaccounted receipts and payments - telescoping / peak-credit theory - unexplained investment under section 69B - unexplained expenditure and section 69C (proposed amendment context) - allowability of unexplained/unaccounted expenditure as business loss under section 37 - perversity of appellate fact-finding - block assessment proceedings

Set-off of unaccounted receipts and payments - telescoping / peak-credit theory - unexplained investment under section 69B - Whether the assessee was entitled to set off gross unaccounted payments against unaccounted receipts for computing unexplained investment - HELD THAT: - The Court examined the material and found that the assessee failed to furnish primary facts or corroborative evidence showing availability of funds from the alleged unaccounted receipts; substantial sums were already protectively taxed in companies and therefore prima facie not available for the assessee's investments; timings of receipts and investments (many occurring in different years and after the block period) showed lack of nexus. The Tribunal relied on a generic presumption of cash-flow/peak-credit without applying those principles to the facts; it reversed the Assessing Officer's detailed factual findings by applying law in the abstract. On the evidence it was not reasonable to treat subsequent payments as necessarily made from earlier unaccounted receipts or to telescope the entries. Accordingly the Assessing Officer's refusal to allow set-off was upheld. [Paras 8]

Answered in negative - set-off disallowed; order of Tribunal reversed in favour of Revenue and against the assessee.

Allowability of unexplained/unaccounted expenditure as business loss under section 37 - real-income / hypothetical-income principle - onus of proof in unaccounted transactions - Whether unexplained and unaccounted cash investment which did not result in tangible benefit was allowable as expenditure under section 37 as business loss - HELD THAT: - The Court reviewed the Assessing Officer's findings that there was no evidence of payment of the claimed amount to the third party and that the payee denied receipt. The Tribunal had remanded one major claim for fresh adjudication despite absence of corroborative seized-material or independent evidence; it drew inferences and presumptions contrary to documentary record. The Court held that the foundational factual proposition - that the assessee in fact made the alleged payment so as to have suffered a business loss - was not established by admissible or corroborative material and that the assessee bore the onus to prove the payment and loss. In these circumstances remand and allowance based on mere assumption was impermissible and the Assessing Officer's additions could not be set aside. [Paras 11]

Answered in negative - claim of Rs. 2.93 crores (and related unexplained investments) not allowable as business loss; order of Tribunal reversed in favour of Revenue and against the assessee.

Perversity of appellate fact-finding - onus to identify creditors and corroborate payments - block assessment proceedings - Whether the Tribunal's deletions in respect of the Amrakadam (Vejalpur) and Sangvilla land deals were perverse or contrary to evidence on record - HELD THAT: - The Court compared the Assessing Officer's documentary findings from seized papers and recorded statements with the Tribunal's conclusions. The Tribunal accepted the assessee's limited disclosures (e.g., lists of names or broker explanations) and shifted the investigative burden to Revenue, holding that the information was sufficient and deletions were justified. The High Court found those inferences to be unreasonable and perverse: identification of persons by mere area-name was inadequate, seized jottings and admissions could not be treated as inconclusive without proper factual basis, and the Tribunal had disregarded cogent documentary material. On the record the Tribunal's deletions could not be sustained. [Paras 14]

Answered in negative - Tribunal's deletions on Amrakadam and Sangvilla were perverse; decision affirmed in favour of Revenue and against the assessee.

Final Conclusion: All three referred questions are answered in favour of the Revenue and against the assessee: the claim for set-off of unaccounted receipts and payments was rejected; the claim to treat unexplained/unaccounted cash investment as an allowable business loss was disallowed; and the Tribunal's deletions in respect of the two specified land deals were held to be perverse and unsupported by the evidence.

Section 14A disallowance - Rule 8D computation - Assessing Officer's satisfaction under Section 14A(2) - voluntary disallowance - attribution of managerial and administrative expenses to exempt income - prima facie opinion and issuance of show cause notice

Assessing Officer's satisfaction under Section 14A(2) - prima facie opinion and issuance of show cause notice - voluntary disallowance - Whether the Assessing Officer recorded the requisite satisfaction under Section 14A(2) before invoking Rule 8D and rejecting the assessee's voluntary disallowance. - HELD THAT: - The Court examined the assessment record, the show cause notice and the assessment order to determine if the AO had formed a prima facie view and recorded reasons before invoking Rule 8D. The issuance of the show cause notice itself evidenced a prima facie opinion by the AO that the assessee's computation of expenses attributable to exempt income required scrutiny. The AO reviewed the assessee's reply (stating a voluntary disallowance of specified expenditure) against the books of account and, noting the scale of investments held, the exempt income earned and the nature of managerial involvement, recorded reasons why the voluntary disallowance was not acceptable. The Tribunal and CIT(A) independently examined the correctness of those findings. On that basis the High Court held that the AO had recorded sufficient satisfaction in relation to the accounts and reasons before applying Rule 8D, and therefore followed the procedure mandated by Section 14A(2). [Paras 19, 20, 21, 23, 29]

The Assessing Officer had recorded the requisite satisfaction before invoking Rule 8D; the procedure under Section 14A(2) was complied with.

Rule 8D computation - Section 14A disallowance - attribution of managerial and administrative expenses to exempt income - Whether the disallowance computed under Rule 8D and confirmed by the CIT(A) and Tribunal calling for attribution of managerial/administrative expenses to exempt dividend income warranted interference. - HELD THAT: - The AO applied the computation envisaged by Rule 8D after rejecting the assessee's approximate estimate of expenses attributable to exempt income. The AO's conclusion was based on account particulars showing substantial investments (a significant portion of total assets) and the role of managerial staff/directors in investment decisions; the CIT(A) and Tribunal reviewed the assessee's working and found the voluntary estimate to be unsubstantiated and meagre in relation to the dividend income and investment portfolio. The High Court accepted the concurrent findings that a reasonable proportion of management expenses could be attributed to earning dividend income, and that the Rule 8D computation as applied did not call for interference. [Paras 7, 9, 26, 28, 29]

The disallowance made under Rule 8D and affirmed by the lower authorities is sustained; no interference is warranted.

Final Conclusion: The tax appeal is dismissed; the Tribunal's order confirming the disallowance under Section 14A read with Rule 8D is upheld and the substantial question of law is answered against the assessee.

Concealment of income - penalty under section 271(1)(c) - completion of sale and receipt of consideration - mens rea and actus reus - burden of proof on Revenue to establish concealment - application of judicial precedent in penalty cases

Concealment of income - penalty under section 271(1)(c) - completion of sale and receipt of consideration - mens rea and actus reus - burden of proof on Revenue to establish concealment - application of judicial precedent in penalty cases - Validity of imposition of penalty under section 271(1)(c) for alleged concealment of capital gains where consideration was not realised in the assessment year owing to banking restrictions and payment was received in a later year. - HELD THAT: - The Tribunal examined whether the ingredients for levy of penalty under section 271(1)(c)-viz., concealment of income or furnishing inaccurate particulars-were established. The material on record showed that the sale deed was executed on 17.08.2010, cheques were to be presented in October 2010, but the cheques could not be honoured because the issuing bank was put under RBI restrictions w.e.f. 24.09.2010 and was in a critical condition; payment in fact came to the assessee only in July 2014. The Revenue produced no evidence to contradict these facts or to show actual receipt of the consideration in the relevant year. In absence of evidence of receipt or of any deliberate act to conceal income, there was neither mens rea nor actus reus on the part of the assessee. The Tribunal applied the principle that the Department must bring material to indicate actual concealment and relied on the approach of the apex court in K.C. Builders (extracted) and subsequent authority, which indicate that penalties cannot be sustained without adequate material proving concealment. Having considered the totality of facts and lack of contrary evidence, the Tribunal concluded that the charge of concealment was not made out and the imposition of penalty was not justified. [Paras 6, 8]

Penalty under section 271(1)(c) deleted and assessee's appeal allowed.

Final Conclusion: On the facts, where consideration for the sale was not realised in the relevant year due to bank restrictions and Revenue failed to produce evidence of concealment or receipt, the Tribunal held that penalty under section 271(1)(c) could not be sustained and directed its deletion.

Allowability of expenditure where amount shown as advance and not debited to profit and loss account - allowability of contingent liability on payment under section 43B - allowability of interest on loans taken and advanced to subsidiary as business expenditure - notional interest on inter-company advances - set-off of interest income against corresponding interest expenditure

Allowability of expenditure where amount shown as advance and not debited to profit and loss account - allowability of contingent liability on payment under section 43B - Deletion of addition of Rs. 15,50,466 being amount paid towards sales tax demand shown as advance and not charged to P&L - HELD THAT: - The amount paid pursuant to court directions was shown in the balance sheet as an advance under Current Assets and was not debited to the profit and loss account. The Tribunal held that where an amount is reflected only as an advance and not claimed as an expenditure in the P&L, an addition cannot be made as an expenditure disallowance. Alternatively, even if treated as a contingent liability, the provision permitting allowance on payment (section 43B) applies and supports allowance in the year of payment. On these bases the addition made by the authorities below was found without merit and directed to be deleted. [Paras 10, 11]

Addition of Rs. 15,50,466 deleted; Ground No.2 allowed.

Allowability of interest on loans taken and advanced to subsidiary as business expenditure - notional interest on inter-company advances - Whether interest disallowance of Rs. 49,50,000 and notional interest addition of Rs. 35,12,122 in respect of loans taken (from bank) and treated as advanced to subsidiary are sustainable - HELD THAT: - The Tribunal accepted the assessee's case that the loan ultimately related to the subsidiary which generated power supplied to the assessee for its manufacture of cement and thus constituted a business transaction conferring direct benefit on the assessee. Applying the principle in S.A. Builders Ltd., the interest attributable to funds advanced to the subsidiary could not be disallowed where the arrangement was for business purposes. Further, the ledger entries showed that interest payable to the bank was simultaneously reflected as interest receivable from the subsidiary and no net interest deduction had been claimed in the P&L; the account was set off entry-to-entry. On this factual basis there was no merit in making additions for actual or notional interest in the hands of the assessee. [Paras 13, 14, 17, 18]

Grounds Nos.3 to 5 allowed; disallowance and notional interest additions deleted.

Set-off of interest income against corresponding interest expenditure - Deletion of addition made on account of difference in gross interest receipts where interest received from subsidiary was set off against interest payable to bank - HELD THAT: - The Assessing Officer compared TDS records with interest admitted and made an addition. The Tribunal found that the interest received from the subsidiary was effectively paid to the bank and the assessee had not claimed a net interest deduction because the interest receipt and interest payable were set off in the accounts. Consequently, if interest income were added, the equivalent interest expenditure should also be allowed, resulting in nil net income; the AO's standalone addition was therefore not sustainable. [Paras 19, 20]

Addition on account of interest income deleted; Ground No.6 allowed.

Final Conclusion: The Tribunal allowed the appeal for Assessment Year 2006-07, deleting additions relating to the sales tax advance, the disallowance and notional interest on loans advanced to the subsidiary, and the addition for interest receipts, and directed consequential relief.

Omission versus repeal of a statutory provision - effect of omission on pending proceedings - applicability of Section 6 of the General Clauses Act - requirement of a saving clause for continuance of proceedings - reference to Transfer Pricing Officer rendered invalid by omission of clause (i) of section 92BA

Omission versus repeal of a statutory provision - applicability of Section 6 of the General Clauses Act - requirement of a saving clause for continuance of proceedings - Legal consequence of omission of clause (i) of section 92BA w.e.f. 01.04.2017 and whether pending revision proceedings under section 263 could be sustained. - HELD THAT: - The Tribunal held that clause (i) of section 92BA was 'omitted' with effect from 01.04.2017 and, in the absence of any saving clause or re-enactment covering the same field, such omission must be treated as obliteration of the provision as if it never existed for the purposes of continuing pending proceedings. Reliance was placed on the reasoning in Rayala Corporation and Kolhapur Canesugar Works and subsequent Supreme Court authority distinguishing omission from repeal; Section 6 of the General Clauses Act applies to repeals (or where a saving is provided), but not to an unconditional omission. Consequently, where a provision is unconditionally omitted without a saving clause, proceedings pending at the time of omission cannot be continued under that provision and must lapse. The Tribunal also surveyed later Supreme Court decisions and explained that those authorities do not negate the principle that omission without a saving clause defeats continuance of proceedings unless there is re-enactment or a statutory saving provision. Applying this legal principle, the Tribunal concluded that revision action under section 263 taken after 01.04.2017 insofar as it proceeded on the basis of clause (i) of section 92BA was invalid. [Paras 4, 5, 22]

Clause (i) of section 92BA having been unconditionally omitted w.e.f. 01.04.2017 and there being no saving clause or re-enactment, pending proceedings under that clause could not be validly continued; Section 6 of the General Clauses Act does not apply.

Effect of omission on pending proceedings - reference to Transfer Pricing Officer rendered invalid by omission of clause (i) of section 92BA - Validity of the Principal Commissioner of Income-Tax's exercise of jurisdiction under section 263 to direct reference to the TPO for specified domestic transactions reported under the now-omitted clause (i) of section 92BA. - HELD THAT: - Applying the principle that an unconditional omission extinguishes the provision for continuance of proceedings in the absence of a saving clause, the Tribunal found that the show cause and revisional order under section 263 issued after omission could not validly rest on clause (i) of section 92BA. Since clause (i) is treated as never having existed post-omission, any jurisdictional exercise predicated on that clause (including directions to refer specified domestic transactions to the TPO) is null and void. The Tribunal noted coordinate decisions to the same effect and observed that Revenue produced no contrary material to distinguish those precedents. [Paras 5, 22]

The Principal CIT's order under section 263 insofar as it relied upon clause (i) of section 92BA (and directed reference to the TPO) is quashed as void ab initio.

Final Conclusion: Appeal allowed. In view of the unconditional omission of clause (i) of section 92BA w.e.f. 01.04.2017 and absence of any saving or re-enactment, the revisional action under section 263 that proceeded on that clause (including reference to the TPO) is invalid and is quashed.

Scope of assessment under Section 153A - Requirement of incriminating material for interference in completed assessments - Distinction between abated and non-abated assessments - Addition under Section 68 - Search under Section 132 and its evidentiary nexus with post-search assessments

Infructuous appeal - Proceedings under Section 148 - Whether the assessee's appeals (ITA Nos. 1754 & 1755/Del/2017) were rendered academic and liable to be dismissed as infructuous. - HELD THAT: - The Tribunal recorded that the CIT(A) had decided the substantive issue in favour of the assessee but had directed initiation of proceedings under Section 148. Those reassessment proceedings were thereafter initiated and pursued to the CIT(A) and the Tribunal. As the earlier grounds in the captioned appeals became academic in light of subsequent proceedings, the Tribunal dismissed the assessee's appeals as infructuous. [Paras 3]

Assessee's appeals dismissed as infructuous.

Scope of assessment under Section 153A - Requirement of incriminating material for interference in completed assessments - Distinction between abated and non-abated assessments - Addition under Section 68 - Whether additions made under Section 68 in assessments completed under Section 153A could be sustained in the absence of any incriminating material, where the proceedings were non-abated. - HELD THAT: - Applying the principles laid down by the Hon'ble Delhi High Court in Kabul Chawla, the Tribunal analysed the scope of Section 153A which permits fresh computation of total income for the years covered by search but requires that interference with completed assessments be founded on incriminating material discovered during search or other relevant post-search material that can be related to the seized material. The Court emphasised the distinction between abated and non-abated assessments and held that while Section 153A empowers the AO to assess/reassess, such exercise cannot be arbitrary and must have relevance or nexus with seized material. In the present cases the record showed no incriminating material and the proceedings were non-abated; applying Kabul Chawla, the Tribunal concluded that the additions under Section 68 were not warranted. [Paras 14, 15]

Additions under Section 68 deleted; Revenue's appeals dismissed.

Final Conclusion: For Assessment Years 2010-11 and 2011-12 the Tribunal held that in the absence of incriminating material and on application of the Kabul Chawla principle the additions under Section 68 could not be sustained; accordingly the Revenue's appeals are dismissed, while the assessee's earlier appeals were dismissed as infructuous.

Applicability of section 56(2)(vii) to transactions involving immovable property - definition of "property" under explanation to section 56(2)(vii) as capital asset - exclusion of stock-in-trade from "capital asset" under section 2(14) - CBDT Circular No.1 of 2011 para 13.4 - section 56(2)(vii) not to apply to stock-in-trade - obligation to refer disputed stamp duty valuation to Valuation Officer under section 50C principles - raising of legal grounds at appellate stage when supported by assessment record - diversion of interest-bearing funds and disallowance of interest - availability of interest-free funds as defence to hypothetical/notional interest disallowance

Applicability of section 56(2)(vii) to transactions involving immovable property - definition of "property" under explanation to section 56(2)(vii) as capital asset - exclusion of stock-in-trade from "capital asset" under section 2(14) - CBDT Circular No.1 of 2011 para 13.4 - section 56(2)(vii) not to apply to stock-in-trade - Deletion of addition under section 56(2)(vii) in respect of plots of land shown as stock-in-trade - HELD THAT: - The Tribunal held that the term "property" in clause (b) of section 56(2)(vii) is defined by the Explanation to mean specified capital assets. Section 2(14) excludes stock-in-trade from the definition of "capital asset". Consistently, CBDT Circular No.1 of 2011 (para 13.4) clarifies that section 56(2)(vii) applies to property in the nature of capital assets and not to stock-in-trade, raw material or consumable stores. Here the assessee had, in its books and return, shown the plots as part of closing stock and debited purchase to the profit and loss account. The Assessing Officer's order applied DLC rates without considering whether the lands were capital assets; the Tribunal found the factual record (books of account, schedule G and return) supported the assessee's stance that the plots were stock in trade. On that basis the Tribunal sustained the CIT(A)'s deletion of the addition. The Tribunal also noted that where an immovable is held to be a capital asset, the AO should, if stamp duty valuation is disputed, proceed as per the principles of referral to the Valuation Officer under section 50C; but that contingency did not arise once the assets were found to be stock in trade.

Addition under section 56(2)(vii) deleted as the plots are stock-in-trade and not "property" within the meaning of the Explanation to section 56(2)(vii)

Diversion of interest-bearing funds and disallowance of interest - availability of interest-free funds as defence to hypothetical/notional interest disallowance - section 40A(2)(b) and related-party consideration in disallowance - Deletion of disallowance of interest by reason of alleged diversion of interest-bearing funds to related parties - HELD THAT: - The Tribunal examined the confirmed disallowance of a portion of interest on the ground that advances were made to parties alleged to be related and interest-bearing funds were diverted. The assessee's ledger and balance sheet showed substantial interest free unsecured loans from the Karta and members of the HUF which exceeded the advances in issue. The Tribunal followed the principle that where own interest free funds are available and sufficient to cover the advances, notional interest disallowance is not justified. The Tribunal also observed that the Assessing Officer had not doubted the genuineness of the transactions. Relying on the factual position and relevant precedent of the jurisdictional High Court, the Tribunal deleted the disallowance confirmed by the CIT(A). The Tribunal did not resolve the related party classification issue on contested facts but disposed the disallowance on the availability of interest free funds defence.

Disallowance of interest deleted

Final Conclusion: The appeal filed by the revenue is dismissed and the assessee's cross objection is allowed: the addition under section 56(2)(vii) was correctly deleted as the lands were stock in trade, and the disallowance of interest for alleged diversion of interest bearing funds is deleted on the facts that sufficient interest free funds were available.

Reopening of assessment: reasons to believe under Section 147 - notice under Section 148 and jurisdictional satisfaction - reliance on investigation/survey reports as tangible material - treatment of payments to shell/ non existent entities as bogus expenditure - application of Section 144A directions in verification

Reopening of assessment: reasons to believe under Section 147 - notice under Section 148 and jurisdictional satisfaction - reliance on investigation/survey reports as tangible material - Validity of reopening assessment for AY 2011-12 by issuance of notice under Section 148 - HELD THAT: - The Tribunal held that the Assessing Officer validly reopened the assessment. The AO received specific information from the Investigation Wing based on survey and spot verification in the case of M/s Altius Finserve Pvt. Ltd., which referred expressly to payments made by the assessee and to large unexplained debits to certain entities. The AO recorded reasons reproducing the investigation findings and added his own application of mind by referring to the assessee's accounts and noting lack of other income for the year; thus there was a nexus between the information and the belief of escapement of income. The Tribunal applied the settled principle that at the reopening stage the AO need only have prima facie material to form a belief and that the sufficiency or correctness of such material is not to be tested at that stage. The report of the Investigation Wing was held capable of constituting tangible material and the AO was found to have formed a reasonable belief in good faith to invoke Section 147/148. Consequently the challenge to the validity of reopening was rejected. [Paras 11, 12]

Reopening of assessment by notice under Section 148 is valid and the ground challenging its validity is rejected.

Treatment of payments to shell/ non existent entities as bogus expenditure - application of Section 144A directions in verification - Whether payments characterised as business counseling charges to M/s Avron's Consultancy Services Pvt. Ltd. and M/s Sarvottam Advisory Pvt. Ltd. are genuine or liable to be disallowed as bogus expenditure - HELD THAT: - On merits the Tribunal upheld the conclusion of the AO and the CIT(A) that the payments were not genuine. Field enquiries and spot verifications reproduced in the record established that the two payee entities were not traceable at the stated addresses, showed negligible or no operating presence, and their directors could not be located. Summons and notices issued under Sections 133(6) and 131 returned unserved or elicited no cooperative responses; further inquiries directed under Section 144A also failed to substantiate the existence or services of those entities. The assessee's contemporaneous documentation (invoices, banking entries, TDS compliance) and post hoc affidavits were held insufficient in the face of these enquiry reports, and the affidavits were characterised as afterthoughts or self serving. Applying the principle that mere paper formalities do not constitute proof where the counterparty lacks real existence, the Tribunal concurred that the AO justifiably treated the payments as accommodation/bogus entries and confirmed the disallowance. [Paras 13, 14]

The disallowance of business counseling charges paid to the two non traceable entities is confirmed; the grounds on merits are dismissed.

Final Conclusion: The Tribunal dismissed the assessee's appeal: the reopening of assessment for AY 2011-12 was held valid and the addition disallowing payments to the two non existent entities as bogus expenditure was upheld.

Penalty for concealment of particulars of income and furnishing inaccurate particulars - requirement of assessing officer's clear satisfaction before issuing penalty notice - invalidity of penalty notice for failure to specify the applicable limb of the provision - quashing of penalty proceedings as void ab initio where notice and penalty order pertain to different limbs

Penalty for concealment of particulars of income and furnishing inaccurate particulars - requirement of assessing officer's clear satisfaction before issuing penalty notice - invalidity of penalty notice for failure to specify the applicable limb of the provision - Validity of the penalty proceedings and penalty order under section 271(1)(c) in view of a notice that did not specify the limb of the provision and an order levying penalty on a different/ additional limb. - HELD THAT: - The Tribunal admitted additional grounds challenging the validity of the notice and examined the notice dated 27/03/2014 and the assessment and penalty orders. It found that the Assessing Officer issued a printed form notice without striking out or indicating the specific limb of section 271(1)(c) under which he had arrived at satisfaction to initiate proceedings. The assessment order likewise did not record a clear satisfaction identifying the applicable limb, and the penalty order proceeded to levy penalty for both concealment of particulars of income and furnishing inaccurate particulars. The Tribunal applied the established proposition that penalty proceedings must be initiated under the limb in respect of which the AO has formed clear satisfaction before issuing the notice, and that initiating proceedings under one limb and levying penalty under another vitiates the proceedings. On these facts the AO had not recorded the requisite clear satisfaction and the notice and order were internally inconsistent; accordingly the penalty order was illegal and liable to be quashed. The Tribunal therefore set aside and deleted the penalty levied under section 271(1)(c). [Paras 9, 10]

Penalty proceedings initiated by the AO were quashed and the penalty levied under section 271(1)(c) deleted for want of a clear satisfaction and for failure of the notice to specify the applicable limb; the appeal is allowed.

Final Conclusion: The appeal is allowed: the penalty order under section 271(1)(c) is quashed and the consequential penalty deleted because the Assessing Officer failed to record the requisite clear satisfaction and issued a notice that did not specify the applicable limb, rendering the penalty proceedings invalid.

Deemed income on issue of shares under Section 56(2)(viib) - valuation of unquoted shares - choice of method under Rule 11UA - Discounted Cash Flow method - power of Assessing Officer to change valuation method - requirement to compute fair market value in accordance with prescribed method

Deemed income on issue of shares under Section 56(2)(viib) - valuation of unquoted shares - choice of method under Rule 11UA - Discounted Cash Flow method - power of Assessing Officer to change valuation method - Whether the Assessing Officer could reject the assessee's valuation of shares by the Discounted Cash Flow method and adopt an alternative valuation for computing fair market value and making an addition under Section 56(2)(viib). - HELD THAT: - The assessee adopted the Discounted Cash Flow (DCF) method, a method recognised under the rules framed for computing fair market value. The AO rejected the DCF valuation as unrealistic (observing that projected revenues and EBITDA were not achieved subsequently) and adopted a market price observed from certain related-party transactions to treat premium received as income under Section 56(2)(viib). The Tribunal examined the statutory scheme and binding precedents and held that where the statute and rules prescribe methods for computing fair market value and the assessee has adopted one of the recognised methods, the AO is not entitled to substitute a different method of valuation of his own choice. The Tribunal relied on earlier decisions which establish that an assessing authority cannot, by re choosing a valuation method or by relying on subsequent performance to repudiate projections, effectively alter the method mandated by the legislative framework or force a different basis of valuation. Applying that principle, the Tribunal concluded that the AO (and the CIT(A)) erred in changing the valuation approach and in bringing the entire premium to tax; the valuation challenge should not have been resolved by adopting an alternate market price instead of following the prescribed/selected valuation method. [Paras 7, 8, 9, 11, 12]

The AO was not entitled to change the valuation method adopted by the assessee; the addition made under Section 56(2)(viib) is set aside and the AO is directed to delete the addition.

Final Conclusion: The appeal is allowed: the Tribunal set aside the addition of the share premium treated as income under Section 56(2)(viib) on the ground that the Assessing Officer could not substitute the valuation method adopted by the assessee and directed deletion of the addition.

Mistake apparent on the record - remedy under section 254(2) for rectification of Tribunal order - obligation to deduct tax at source - disallowance under section 40(a)(ia) - expenditure wholly and exclusively for the purpose of business - retrospective/declaratory operation of proviso to section 40(a)(ia)

Mistake apparent on the record - obligation to deduct tax at source - disallowance under section 40(a)(ia) - Rectification under section 254(2) of the Tribunal's order insofar as it upheld disallowance of settlement payment to an ex-employee for failure to deduct tax at source. - HELD THAT: - The Tribunal found that the payment to the ex-employee partook the character of a commission and therefore attracted the obligation to deduct tax at source; non-deduction led to disallowance under section 40(a)(ia). The miscellaneous application alleged that binding precedents (including the jurisdictional High Court decision relied upon by the assessee) were not considered and that the payment was in bona fide belief compensation not commission. The Appellate Tribunal examined the order and recorded that it had considered the cited authorities, that the facts of those authorities were not applicable to the present case and thus were not discussed at length, and that it is not obliged to discuss every decision cited where the bench considered them irrelevant. The bench concluded that the assessee had not demonstrated a prima facie mistake apparent on the record warranting rectification under section 254(2), and that what the assessee sought was a review of the Tribunal's merits decision which is impermissible under section 254(2). [Paras 5]

Application to rectify the Tribunal's finding on the disallowance for non-deduction of TDS is dismissed for want of any mistake apparent on the record.

Mistake apparent on the record - expenditure wholly and exclusively for the purpose of business - fringe benefit tax and evidentiary effect on deductibility - Rectification under section 254(2) of the Tribunal's order insofar as it disallowed gifts and related expenses as personal and not deductible under section 37(1). - HELD THAT: - The Tribunal recorded categorical findings that expenditures characterized as gifts and rewards to employees, dealers, customers and others were personal in nature and not incurred wholly and exclusively for the purpose of business. The assessee contended that payment of fringe benefit tax or decisions of coordinate benches entitled it to deductibility, but the Tribunal considered the averments and the case law relied upon and reached its factual and legal conclusion. The bench observed that the miscellaneous application amounted to a request for review of the Tribunal's decision on merits rather than the pointing out of any prima facie mistake apparent on the face of the record; mere non-consideration of every cited coordinate decision does not constitute a manifest error where the Tribunal found those authorities inapplicable. [Paras 6]

Application to rectify the Tribunal's disallowance of gifts and related expenses is dismissed as not disclosing any mistake apparent on the record.

Final Conclusion: The miscellaneous application under section 254(2) seeking rectification of the Tribunal's order is dismissed in toto; the Tribunal's findings on (i) disallowance for non-deduction of TDS on the settlement payment and (ii) disallowance of gifts and related expenses are held not to suffer from any mistake apparent on the record.

Allowability of prior period expenses crystallised and paid in the relevant assessment year - treatment of purchases alleged to be bogus where production and sales accepted - addition limited to profit element embedded in undisclosed/undetermined purchases - allowability of Employees' (workmen) contribution paid within statutory/grace period under section 36(1)(va) read with section 2(24)(x) - treatment of provision for wealth-tax, gratuity and leave encashment in computation of book profit under section 115JB - carry forward and set-off of accumulated losses and unabsorbed depreciation on amalgamation under section 72A and effect of BIFR/CBDT directions

Allowability of prior period expenses crystallised and paid in the relevant assessment year - Prior period expenses of Rs. 60,509/- which crystallized, were billed and paid during the assessment year 2011-12 are allowable in that year. - HELD THAT: - The Tribunal found that although the expenditures related to earlier years, the bills were received, the amounts crystallized and were paid in the assessment year 2011-12. Given these facts, and having examined the submissions and documents placed on record, the Tribunal directed the Assessing Officer to allow the claimed prior period expenses in the assessment year in which they materialized and were paid. [Paras 9]

Rs. 60,509/- on account of prior period expenses is allowable in A.Y. 2011-12; AO to give effect.

Treatment of purchases alleged to be bogus where production and sales accepted - addition limited to profit element embedded in undisclosed/undetermined purchases - Additions on account of alleged bogus purchases amounting to Rs. 8,62,86,046/- were not sustainable in full where the Assessing Officer accepted production and sales and assessee produced bills, bank payments, stock and production registers; addition reduced to a percentage representing the profit element. - HELD THAT: - The Tribunal held that the Assessing Officer primarily relied on third party/excise enquiries without adequately examining the assessee's contemporaneous records (purchase bills, weighment slips, cheque payments, stock and production registers) nor questioning the production and sales which remained undisputed. In such circumstances, the AO's blanket disallowance of the entire purchase value was unjustified. Applying the principle that where purchases are not disproved but some misgivings exist, only the profit element should be taxed, the Tribunal restricted the addition to 4% of the disputed purchases to cover profit embedded in the transactions and deleted the balance. [Paras 15, 18, 20]

Addition restricted to 4% of Rs. 8,62,86,046/- (profit element); balance amounts deleted.

Allowability of Employees' (workmen) contribution paid within statutory/grace period under section 36(1)(va) read with section 2(24)(x) - Employees' contribution (PF/ESI) paid within the statutory/grace period is allowable under section 36(1)(va) read with section 2(24)(x). - HELD THAT: - The Tribunal noted jurisdictional High Court precedent and that the employees' contribution had been deposited by the assessee before the due date for filing the return, or within the statutory/grace period. On this basis and following existing law, the CIT(A)'s deletion of the AO's disallowance was upheld. [Paras 27]

Disallowance of Rs. 3,03,447/- deleted; CIT(A)'s order upheld.

Treatment of provision for wealth-tax, gratuity and leave encashment in computation of book profit under section 115JB - Provision for wealth-tax and actuarially determined provisions for gratuity and leave encashment are not required to be added back in computing book profit under section 115JB. - HELD THAT: - The Tribunal accepted that the Explanation to section 115JB refers expressly to income-tax and does not require addition of wealth-tax provision; accordingly the AO erred in adding wealth-tax provision to book profit. Further, provisions for gratuity and leave encashment reflected actuarial valuation and were treated as ascertained liabilities, not contingent/unascertained liabilities, and therefore were not to be added back. The CIT(A)'s deletions were therefore sustained. [Paras 30, 33]

Additions for provision for wealth-tax, gratuity and leave encashment deleted; CIT(A)'s order upheld.

Carry forward and set-off of accumulated losses and unabsorbed depreciation on amalgamation under section 72A and effect of BIFR/CBDT directions - Accumulated losses and unabsorbed depreciation of the amalgamating company are allowable to the assessee under section 72A in terms of the sanctioned BIFR scheme and related CBDT considerations; the CIT(A)'s allowance following a coordinate bench decision is sustained. - HELD THAT: - The Tribunal followed the coordinate-bench decision in the assessee's own case, holding that the special provisions of section 72A (and the BIFR-sanctioned scheme and CBDT directions as applied) govern carry forward and set-off on amalgamation and, in the facts of this case, require allowance of the accumulated losses and unabsorbed depreciation claimed. The AO's disallowance was set aside in line with the earlier Tribunal direction. [Paras 36, 38]

Claim of unabsorbed depreciation, depreciation and brought forward losses aggregating to the amount claimed is to be allowed; CIT(A)'s order (and coordinate bench) upheld.

Final Conclusion: The assessee's appeal is partly allowed: prior period expenses of Rs. 60,509/- are allowed; additions for alleged bogus purchases reduced to 4% of disputed purchases and the balance deleted; other deletions by the CIT(A) (employees' contribution, provisions for wealth-tax, gratuity and leave encashment, and carry forward of accumulated losses/unabsorbed depreciation under section 72A as per the sanctioned BIFR scheme) are sustained. The revenue's appeal is dismissed.

Retrospective operation of the first proviso to section 12A(2) - applicability of registration under section 12AA to earlier assessment years for which proceedings are pending - exemption under section 11 for receipts applied to charitable objects (including corpus donations) - proviso protecting against initiation of proceedings under section 147 merely for non-registration

Retrospective operation of the first proviso to section 12A(2) - applicability of registration under section 12AA to earlier assessment years for which proceedings are pending - proviso protecting against initiation of proceedings under section 147 merely for non-registration - Whether the benefit of registration granted under section 12AA attaches retrospectively to earlier assessment years for which assessment/reassessment proceedings were pending, by virtue of the first proviso to section 12A(2). - HELD THAT: - The Tribunal followed the coordinate-bench decision in the assessee's own case and related precedents, holding that the first proviso to section 12A(2) must be construed as retrospective in operation so as to extend the benefit of registration to earlier assessment years in respect of which assessment or reassessment proceedings were pending on the date of registration. The Tribunal applied principles of purposive and harmonious construction, noted the remedial character of the proviso and the explanatory circular, and observed that registration under section 12AA, once granted, operates as a fait accompli so that the Assessing Officer cannot further probe the objects of the trust for the years covered. The Tribunal also noted that the second proviso prevents action under section 147 merely for non-registration, and that no adverse finding was recorded by revenue on the charitable nature of activities. Following these conclusions, the Tribunal upheld the CIT(A)'s extension of registration benefit to the relevant earlier years. [Paras 5, 7]

The first proviso to section 12A(2) is retrospective in operation and the registration under section 12AA is to be applied to earlier assessment years for which proceedings were pending; the CIT(A)'s order extending the benefit of registration is confirmed.

Exemption under section 11 for receipts applied to charitable objects (including corpus donations) - treatment of donations specifically directed to form part of corpus - Whether the assessee's receipts (donations for construction of an old age home) and the expenditures (amortised lease rent and depreciation on leasehold land) are eligible for consideration as application of income for charitable purposes and hence exempt under section 11. - HELD THAT: - Having held that registration benefit applies to the relevant years, the Tribunal accepted the CIT(A)'s finding that the assessee's activities are charitable in nature and that the donations in question were capital/corpus in character (received for construction of an old age home) and thus not taxable as income. Consequently, expenditures incurred for charitable objects (including amortisation and depreciation which had been disallowed by the AO) are to be treated as application of income for charitable purposes. The Tribunal found no dispute as to genuineness or utilisation of the donations on remand and therefore dismissed the revenue's grounds challenging deletion of the additions and disallowances. [Paras 5, 6]

The donations are capital/corpus in nature and exempt under section 11; the disallowances relating to amortised lease rent and depreciation are not sustainable and are deleted.

Final Conclusion: Following the coordinate-bench precedent in the assessee's own case, the Tribunal held that the first proviso to section 12A(2) operates retrospectively so that registration under section 12AA is to be applied to earlier assessment years with pending proceedings; on this basis the assessee's receipts (corpus donations) and related expenditures qualify for exemption/acceptance as application of income for charitable purposes, and the CIT(A)'s order in favour of the assessee is confirmed, rendering the technical challenge to reopening academic.

Qualified Institutional Buyers (QIB) as part of the public - offer made to public - deduction under section 35D - QIP / SEBI-ICDR Chapter VIIIA and public shareholding - deferred revenue expenditure - one-fifth write off - a section of the public qualifies as public

Qualified Institutional Buyers (QIB) as part of the public - offer made to public - deduction under section 35D - QIP / SEBI-ICDR Chapter VIIIA and public shareholding - deferred revenue expenditure - one-fifth write off - Whether allotment of shares to QIBs under a QIP amounts to an issue offered to the public for the purposes of section 35D and whether the issue related expenditure is deductible (one fifth) under section 35D. - HELD THAT: - The Tribunal followed its earlier decision in Deccan Chronicle Holdings Ltd., holding that QIBs constitute a class of investors within the larger investor community and therefore fall within the meaning of "public" for the purposes of section 35D. The listing obligations and SCRR definitions, and the SEBI ICDR provisions (including Chapter VIIIA/Reg. 91B and Reg. 82) which permit increasing public shareholding through issues to QIBs, were examined and held to indicate that QIBs form part of public shareholding. The Tribunal applied the established principle that a section of the public qualifies as public (as recognised in Nitta Gelatine and Andhra Chamber of Commerce) and accepted that issue expenditure attributable to funds used for the undertaking is revenue in nature and eligible for deduction; accordingly the claim for deferred revenue expenditure and one fifth write off under section 35D was allowed. The Tribunal therefore set aside the CIT(A)'s disallowance and allowed the assessee's grounds disallowing denial of deduction. [Paras 6, 7]

The allotment of shares to QIBs under the QIP is treated as an offer to the public for the purposes of section 35D and the issue expenditure is eligible for deduction (including the one fifth write off as claimed).

Pronouncement of orders - Rule 34(5) exception - extension of limitation period due to COVID 19 / judicial orders - Whether the delay in pronouncing the order beyond 90 days was excused and the order could lawfully be pronounced later. - HELD THAT: - The Tribunal noted the delay in pronouncement and examined the impact of the COVID 19 lockdown and consequent judicial directions. Having regard to the nationwide lockdown, the Supreme Court's extension of limitation and the Bombay High Court's orders extending timelines and the functioning restrictions, the Tribunal held that the exception to the 90 day limit under Rule 34(5)(c) is attracted. The unprecedented disruption of judicial work and the specific extensions/orders cited justified pronouncement after expiry of the 90 day period. [Paras 8]

The delay in pronouncement is excused under the exception in Rule 34(5) in view of COVID 19 related extensions and orders, and the order is lawfully pronounced.

Final Conclusion: The Tribunal allowed the appeal for AY 2010 11, set aside the CIT(A)'s disallowance and held that the QIP allotment to QIBs amounts to an offer to the public for the purposes of section 35D, entitling the assessee to the claimed deduction; the delay in pronouncement was held excused by COVID 19 related judicial directions.

Unpublished price sensitive information - trading window closure - compliance officer duty to administer the code of conduct - Clause 4 of Schedule B to the PIT Regulations, 2015 - Regulation 9(1) of the PIT Regulations, 2015 - materiality test for unpublished price sensitive information - penalty under Section 15HB of the SEBI Act

Compliance officer duty to administer the code of conduct - trading window closure - Clause 4 of Schedule B to the PIT Regulations, 2015 - unpublished price sensitive information - materiality test for unpublished price sensitive information - Whether the Noticee violated Clause 4 of Schedule B read with Regulation 9(1) of the PIT Regulations, 2015 by failing to close the trading window when UPSI existed - HELD THAT: - The Adjudicating Officer found that the Noticee was the Company Secretary and Compliance Officer during the investigation period and thus had the statutory duty to administer the code of conduct including closure of the trading window. The disclosure made on April 05, 2017 about the acquisition by a subsidiary was within the ambit of unpublished price sensitive information because it related to a corporate acquisition which the announcement itself indicated would help grow the company's fixed income advisory business. The AO applied the guiding principle in the Note to Regulation 2(1)(n) - whether the information, if published, is likely to materially affect the price - and observed a price spike on the next trading day, supporting price sensitivity. A perusal of the Term Sheet showed that major terms (including consideration and payment mechanism) were already specified and Clause 11 indicated binding intent; accordingly the AO held that the UPSI crystallised on signing of the Term Sheet and thus existed during the period alleged. Independently, since the Noticee admitted that the trading window was not closed and the responsibility to do so rested on him, the AO concluded that the Noticee failed to close the trading window when required under Clause 4 of Schedule B read with Regulation 9(1). The AO also rejected contentions that the transaction was immaterial or merely a technical/ordinary-course activity, finding that the announcement did not disclose ancillary financial parameters that the Noticee later relied upon and that the form and substance indicated a corporate acquisition with potential price impact. [Paras 21, 24, 28, 30, 31]

The Noticee violated Clause 4 of Schedule B read with Regulation 9(1) of the PIT Regulations, 2015 by failing to close the trading window when UPSI existed.

Penalty under Section 15HB of the SEBI Act - factors under Section 15J and Rule 5 of the Adjudication Rules - repetitive nature of default - Whether the Noticee is liable to penalty and the quantum of penalty - HELD THAT: - Having found a contravention of the PIT Regulations, the AO held that the Noticee is liable under Section 15HB of the SEBI Act. In assessing quantum, the AO considered the statutory factors in Section 15J and Rule 5 - disproportionate gain/unfair advantage, loss to investors, and repetition. The investigation did not quantify gain or investor loss and no trading by designated persons during the UPSI period was recorded, but the AO relied on the Noticee's disclosed practice of selectively closing the trading window and evidence that the Noticee had not regularly closed the window for event-based disclosures. The AO found this practice amounted to repeated non-compliance and rejected the submission that the breach was merely technical. Having weighed the mitigating and aggravating aspects, the AO imposed a monetary penalty deemed commensurate with the lapse. [Paras 33, 34, 41, 42, 45]

Penalty of Rs. 5,00,000 is imposed on the Noticee under Section 15HB of the SEBI Act.

Final Conclusion: The Adjudicating Officer held that the Noticee, as Compliance Officer, failed to close the trading window despite the existence of unpublished price sensitive information relating to a subsidiary's acquisition; the contravention of Clause 4 of Schedule B read with Regulation 9(1) of the PIT Regulations, 2015 was established and a penalty of Rs. 5,00,000 under Section 15HB of the SEBI Act was imposed.

Rectification/modification of categorization under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - relief under Section 124(1)(a)(i) of the Scheme - direction to decide representations after opportunity of hearing - judicial review by writ for enforcement of statutory/administrative duty

Rectification/modification of categorization under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - relief under Section 124(1)(a)(i) of the Scheme - direction to decide representations after opportunity of hearing - Respondent No.2 directed to decide the petitioner's representations seeking amendment of the declaration's categorization and claim to relief under the Scheme after giving opportunity of hearing. - HELD THAT: - The writ petition challenged the administrative non-decision on representations dated 29 January 2020, 31 January 2020 and the email of 24 June 2020 seeking correction of an initial declaration filed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and entitlement to relief claimed under the Scheme. In view of the limited nature of the grievance and absence of final adjudication by respondent No.2, the Court exercised supervisory jurisdiction to direct the authority to decide the pending representations. The Court mandated that the decision be taken after affording the petitioner an opportunity of hearing and within a fixed time-frame, thereby leaving the substantive rights and contentions of the parties open for adjudication in accordance with law. The authorised representative was directed to appear on a specified date and produce a notarised power of attorney to facilitate the hearing. [Paras 7, 8]

Petitioner's representations to be decided by respondent No.2 after hearing within three weeks; authorised representative to appear on the specified date with notarised power of attorney; rights and contentions of parties left open.

Final Conclusion: Writ petition disposed with a direction to respondent No.2 to decide the petitioner's pending representations seeking correction of categorization and claim under the Scheme after giving an opportunity of hearing within three weeks; administrative steps specified to facilitate the hearing; substantive issues left open for determination by the authority.

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - admission of liability during investigation/audit - quantified and communicated demand - written communication of duty demand - natural justice - opportunity of hearing before rejection of declaration - liberal interpretation of remedial scheme

Natural justice - opportunity of hearing before rejection of declaration - Impugned rejection of the SVLDRS-1 declaration was set aside for lack of opportunity of hearing to the petitioner. - HELD THAT: - The Court found that the respondents rejected the petitioner's declaration without giving any personal hearing or notice despite the petitioner's assertion that she had admitted liability on 18th May, 2018. The Court emphasised that a liberal approach is warranted for the Scheme's objective of resolving legacy disputes and that the respondents ought to have provided the petitioner an opportunity to be heard before rejecting the declaration. Consequently, the impugned order dated 26th February, 2020 was set aside and the matter remitted to the designated committee for reconsideration after affording hearing. [Paras 10, 11]

Rejection set aside; designated committee directed to decide afresh after giving the petitioner an opportunity of hearing.

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - admission of liability during investigation/audit - quantified and communicated demand - written communication of duty demand - liberal interpretation of remedial scheme - Eligibility under the Scheme (whether the petitioner's earlier admission/quantification suffices) was not finally adjudicated but remanded for fresh consideration by the designated committee after hearing. - HELD THAT: - The Court noted the petitioner's contention that she had admitted liability on 18th May, 2018 and that payments were made in 2018, and referred to the Circular's statements that duties 'quantified and communicated' or 'admitted by the person' on or before 30.06.2019 are eligible. While observing that a liberal interpretation should be given to the Scheme, the Court did not decide the factual or substantive question of eligibility on merits. Instead, it directed the designated committee to reconsider the declaration and determine eligibility in accordance with the Scheme and the Circular, after providing the petitioner an opportunity of hearing and to pass a reasoned order within the prescribed timeframe. [Paras 9, 11]

Matter remitted to the designated committee to decide eligibility under the Scheme after hearing the petitioner and passing a reasoned order by the stipulated date.

Final Conclusion: The petition succeeds to the extent that the rejection of the petitioner's SVLDRS-1 declaration is set aside for want of hearing; the designated committee is directed to reconsider the declaration afresh, afford the petitioner an opportunity of hearing and pass a reasoned order within the timeframe specified by the Court.

Banking & other financial services - reverse charge mechanism - recipient of service - consideration - valuation of taxable service under Section 67 - service tax on import of services - departmental trade notice non binding in law

Recipient of service - reverse charge mechanism - Whether the Appellant Bank was the recipient of services allegedly provided by foreign banks and liable to pay service tax under the reverse charge mechanism. - HELD THAT: - The Tribunal examined the operational flow of export collections and the contractual/operational relationships between exporter, Indian bank (Appellant) and foreign/ intermediary banks. It found that the Appellant merely facilitated remittances on behalf of the exporter, routed documents through banking channels, and did not receive any service from the foreign banks. The Appellant neither contracted with nor paid consideration to the foreign banks; foreign bank charges were deducted at source from export proceeds and borne by the exporter/importer as per contractual allocation. On these facts the Appellant cannot be treated as the service recipient for the foreign banks' activities; accordingly the reverse charge could not be fastened on the Appellant. The Tribunal rejected reliance on the Trade Notice and certain interim tribunal orders as determinative in the present factual matrix. [Paras 34, 41, 50]

Appellant Bank was not the recipient of services of the foreign banks and therefore not liable to pay service tax under the reverse charge mechanism.

Consideration - valuation of taxable service under Section 67 - Whether the foreign bank charges constituted 'consideration' attributable to the Appellant Bank for valuation and levy of service tax. - HELD THAT: - The Tribunal applied the statutory test under Section 67 and the settled jurisprudence that only amounts which are consideration for the taxable service and flow to the service provider can form part of the value. Reliance was placed on precedents explaining that a nexus is required between the amount charged and the taxable service, and that obligations or conditions under a contract do not ipso facto become consideration. On the facts, no consideration flowed from the Appellant to the foreign banks and the foreign bank charges were not payable by the Appellant; hence they could not be included in the Appellant's taxable value or taxed under reverse charge. [Paras 36, 37, 38, 41]

Foreign bank charges did not constitute consideration from the Appellant Bank to the foreign banks and thus could not be valued for service tax under Section 67 as part of the Appellant's liability.

Departmental trade notice non binding in law - banking & other financial services - Whether the Trade Notice dated February 10, 2014 and the decisions relying on it justified sustaining the demand against the Appellant. - HELD THAT: - The Tribunal observed that the Trade Notice was founded on prima facie/interim views of certain benches and cannot override statutory tests of service, consideration and recipient status. The Madras High Court's scrutiny of the same Trade Notice demonstrated that departmental circulars are not binding and must yield to the statutory scheme and factual matrix. The Tribunal held that the Trade Notice and the cited decisions did not assist the Department in light of the factual finding that the Appellant did not receive the service or pay consideration. [Paras 44, 45, 46]

The Trade Notice and the decisions founded on it did not sustain the demand against the Appellant in the facts of this case.

Final Conclusion: The impugned order confirming service tax, interest and penalty was set aside: the Appellant Bank was neither the recipient of services rendered by the foreign banks nor did any consideration flow from it to those banks, and therefore no liability to pay service tax under the reverse charge mechanism arose for the period October, 2010 to March, 2015; the appeal is allowed.

Franchise service - representational right - amended definition of "franchise" w.e.f. 16.06.2005 - supply of tangible goods for use - interest under section 75 of the Finance Act - penalty under section 76 of the Finance Act - penalty under section 78 of the Finance Act

Franchise service - representational right - amended definition of "franchise" w.e.f. 16.06.2005 - supply of tangible goods for use - Whether the agreements between Siti Cable and local cable operators qualified as "franchise" service under the amended definition and thus attracted service tax for the period 16.06.2005 to 31.03.2008. - HELD THAT: - The Tribunal examined the amended definition of "franchise" (which requires that the franchisee be granted a representational right to provide services identified with the franchisor) and the terms of the agreements. It held that the core requirement is grant of a representational right by which the franchisee represents the franchisor and loses its separate identity for the external world. Applying the test to the agreements, the Tribunal found the arrangements recorded a right to use Siti Cable's network assets and equipment, recurring payments characterised as consideration for use of assets, explicit retention of ownership and control of assets by Siti Cable, obligations on the local operator to maintain equipment, and limited licence to use the Siti logo as incidental to the broadcasting business. The agreements did not vest the cable operators with a representational right or require them to represent themselves as Siti Cable in the manner demanded by the case-law; there was no significant control over the operators' method of operation or an obligation that subsumed the operators' identity into Siti Cable's. On these determinative facts the Tribunal concluded that the transactions did not constitute "franchise" services and therefore the demand framed under that head for 16.06.2005 to 31.03.2008 could not be sustained. [Paras 24, 33, 44]

The confirmed demand under "franchise" service for the period 16.06.2005 to 31.03.2008 is set aside.

Interest under section 75 of the Finance Act - penalty under section 76 of the Finance Act - penalty under section 78 of the Finance Act - Whether interest and penalties imposed along with the demand under "franchise" service were sustainable. - HELD THAT: - The Principal Commissioner had held that interest under section 75 follows once a short levy is sustained, and had imposed penalty under section 76 while declining to impose penalty under section 78 for reasons noted. Because the Tribunal has set aside the substantive demand under "franchise" service, the legal consequences tied to that demand could not survive. The Tribunal therefore held that the confirmation of interest under section 75 and penalty under section 76 must also be set aside; consequentially, the Department's appeal seeking imposition of penalty under section 78 failed once the underlying demand was quashed. [Paras 13, 44]

The confirmation of interest under section 75 and penalty under section 76 is set aside; the Department's claim for penalty under section 78 is dismissed as the demand has been vacated.

Final Conclusion: The Tribunal allowed the assessee's appeal, set aside the demand and attendant interest and penalty confirmed under the "franchise" service for the period 16.06.2005 to 31.03.2008, and dismissed the Department's appeal for imposition of penalty under section 78.

Condonation of delay - reasonable cause for delay - receipt versus dispatch of order - power to condone delay under Section 85(3A) of the Finance Act, 1994 - remand for decision on merits after affording opportunity - application of principles of natural justice

Condonation of delay - reasonable cause for delay - Delay in filing the appeal before the Tribunal (application for condonation of 289 days). - HELD THAT: - The Tribunal examined the affidavits and documents filed by the director, a consultant and the official liquidator which described loss of business, resignation and relocation of employees, shifting of premises and assets, and ongoing voluntary liquidation proceedings. The Tribunal found these explanations to be satisfactory and held that there was no intentional or deliberate delay in filing the appeal. Reliance placed by the respondent on evidence of dispatch of the Order-in-Original did not displace the appellant's explanation. Applying a liberal approach to condonation, the Tribunal concluded that the delay was satisfactorily explained and therefore condoned the delay in filing the appeal before the Tribunal. [Paras 5]

Delay of 289 days in filing the appeal is condoned and the condonation application is allowed.

Receipt versus dispatch of order - power to condone delay under Section 85(3A) of the Finance Act, 1994 - remand for decision on merits after affording opportunity - application of principles of natural justice - Whether the Commissioner (Appeals) erred in refusing to condone 24 days' delay in filing the appeal before him and in dismissing the appeal on that ground, and consequent remedy. - HELD THAT: - The Tribunal found that the Department had only proved dispatch of the Order-in-Original and had not established receipt by the appellant. The appellant's evidence and affidavits explained non-receipt and the difficult circumstances during the relevant period. The Tribunal held that the Commissioner (Appeals) ought to have condoned the short delay of 24 days and that his rejection of the appeal on the stated ground was unsustainable. In view of these findings the Tribunal exercised its supervisory jurisdiction to condone the 24-day delay and remanded the matter to the Commissioner (Appeals) for fresh adjudication on merits, directing that the Commissioner (Appeals) decide the appeal within one month after receipt of the certified copy of the order, after following principles of natural justice and affording adequate opportunity to the appellant. [Paras 9]

Delay of 24 days before the Commissioner (Appeals) is condoned; appeal is remanded to the Commissioner (Appeals) to be decided on merits in accordance with natural justice within one month.

Final Conclusion: The Tribunal condoned the delay in filing the appeal to the Tribunal and also condoned a 24 day delay before the Commissioner (Appeals); the Tribunal set aside the Commissioner (Appeals)'s dismissal on time bar grounds and remanded the appeal to the Commissioner (Appeals) for fresh decision on merits after affording the appellant adequate opportunity, to be completed within one month.

Conditional exemption under Section 5A(1) - Applicability of Section 5A(1A) - Option to avail or not avail a conditional exemption - Irregular Cenvat credit and Rule 6(1) of the Cenvat Credit Rules - Appropriation under Section 11D of the Central Excise Act

Conditional exemption under Section 5A(1) - Applicability of Section 5A(1A) - Option to avail or not avail a conditional exemption - Irregular Cenvat credit and Rule 6(1) of the Cenvat Credit Rules - Whether Notification No. 65/95-CE grants an absolute exemption attracting Section 5A(1A) and thereby renders the Cenvat credit availed by the appellant irregular under Rule 6(1). - HELD THAT: - Notification No. 65/95-CE is framed subject to four conditions (manufacture in a workshop; workshop within the factory; use within the factory; use for repairs or maintenance of machinery). Those conditions must be satisfied for the notification to apply, and therefore the notification is not an unconditional or absolute exemption. Section 5A(1) permits exemptions either "absolutely" or "subject to such conditions", and Section 5A(1A) applies only where an exemption is granted absolutely. Because Notification No. 65/95-CE is conditional, Section 5A(1A) does not apply; an assessee therefore has the option to avail or not to avail the conditional exemption. The Tribunal relied on precedent treating conditional notifications as permitting an option to pay duty and, if duty is paid, permitting availment of Cenvat credit. Applying that principle, the appellant, having paid duty on the goods instead of availing the conditional exemption, was entitled to claim Cenvat credit; the finding of irregular credit under Rule 6(1) in the impugned order is unsustainable. [Paras 7]

Notification No. 65/95-CE is conditional; Section 5A(1A) is inapplicable and the appellant was entitled to avail Cenvat credit on duty paid, hence the finding of irregular availment under Rule 6(1) is set aside.

Appropriation under Section 11D of the Central Excise Act - Whether the Commissioner was justified in appropriating amounts under Section 11D in respect of duties allegedly paid on goods covered by Notification No. 65/95-CE. - HELD THAT: - Section 11D(1) and (1A) require that a person has "collected any amount in excess of the duty assessed or determined and paid" or "collected any amount as representing duty" on wholly exempt or nil-rated goods. The record does not disclose material establishing that the appellant collected any such excess amount or any amount representing duty on goods which were wholly exempt or nil-rated. Further, because Notification No. 65/95-CE is conditional and the appellant elected to pay duty rather than avail the exemption, it cannot be said that the appellant collected amounts representing duty on wholly exempt goods. Consequently, the statutory conditions for appropriation under Section 11D are not shown to be satisfied and the appropriation in the impugned order is unsustainable. [Paras 8]

No material supported invocation of Section 11D; the appropriation of the amounts under Section 11D is erroneous and set aside.

Final Conclusion: The impugned order of the Commissioner dated 30.08.2012 is set aside; appeals allowed and consequential relief granted to the appellant.

Escaped assessment - period of limitation - pre-revision notice under Section 27(1)(a) - determination to the best of its judgment - surprise inspection

Escaped assessment - period of limitation - pre-revision notice under Section 27(1)(a) - surprise inspection - Validity of the notice issued on 28.08.2018 under Section 27(1)(a) as barred by limitation in respect of assessment year 2010-2011 (deemed assessment date 30.06.2012). - HELD THAT: - The Court held that the Assessing Authority, if of the view that part of the turnover had escaped assessment, was required to determine the escaped turnover and assess tax within the statutory limitation period. The cutoff for the deemed assessment dated 30.06.2012 is the relevant point for computing the limitation. Even assuming a six-year limitation, the period expired on 30.06.2018. The pre-revision notice was issued only on 28.08.2018, after the expiry of the six-year period. The respondent's reliance on a later surprise inspection (said to have occurred in 2015 or 2016) did not justify recomputing the limitation from the date of inspection; nothing prevented the Authority from initiating action within the limitation period following the inspection. As the notice was issued after lapse of the limitation, the impugned proceedings were unsustainable on that ground.

Impugned proceedings quashed on the ground of limitation; writ petition allowed.

Final Conclusion: The notice and consequent assessment proceedings in respect of the 2010-2011 assessment (deemed assessment date 30.06.2012) were quashed as barred by the statutory period of limitation; the writ petition is allowed and connected petition closed with no costs.