TaxTMI Updates e-Newsletter
Aug 16,2019

Input Tax Credit migration/transition - provisional ITC claim - adjustment of ITC against assessed liability - verification under Rule 121 of TNGST Rules, 2017 - reopening of assessment under Section 84 of TNVAT Act - finality of ITC claim upon verification

Input Tax Credit migration/transition - provisional ITC claim - adjustment of ITC against assessed liability - finality of ITC claim upon verification - Whether the writ petitioner's Tran 1 ITC claim (provisional migration) can be adjusted against the tax liability determined in the impugned assessment - HELD THAT: - The Court recorded that the petitioner had filed Tran 1 to transition Input Tax Credit into the GST regime but had scaled down the amount claimed for migration. The revenue submitted that the Tran 1 claim was provisional and that any adjustment against the assessed liability would be subject to quantification and verification. The Court accepted that adjustment is permissible only after completion of the verification/quantification process and directed that the verification under the Rules must be carried out expeditiously. While the petitioner accepts the quantum of tax quantified in the impugned order, its grievance is limited to the non adjustment of the portion of ITC given up for migration; the Court therefore stayed implementation of the impugned order pending the verification outcome and held that the tax liability will be treated as paid, part paid or unpaid depending on that outcome. [Paras 11, 12, 13, 14, 15]

Adjustment of the provisional Tran 1 ITC claim against the impugned assessment is permissible but subject to completion of verification/quantification; the respondent is directed to complete verification under Rule 121 of the TNGST Rules expeditiously and the impugned order is kept in abeyance until such verification is completed.

Verification under Rule 121 of TNGST Rules, 2017 - reopening of assessment under Section 84 of TNVAT Act - Remand for verification and effect on the impugned order - HELD THAT: - The Court directed the respondent to undertake the verification exercise contemplated by Rule 121 of the TNGST Rules in respect of the Tran 1 ITC entries and any supporting documentation, observing that the verification will determine what portion of the provisional claim is allowable for adjustment. Pending completion of that verification, the impugned revised assessment order is to be held in abeyance. The Court further directed that on completion of verification the respondent shall communicate the outcome and its impact on the impugned order to the petitioner within ten working days under due acknowledgement. The remand is for quantification/verification and not for re adjudication of the correctness of the assessment figures accepted by the petitioner. [Paras 11, 13, 14, 15]

Verification under Rule 121 is ordered; the impugned order is kept in abeyance until verification is completed and the respondent must communicate the verification outcome within ten working days of completion.

Final Conclusion: Writ petition disposed directing the respondent to complete verification under Rule 121 of the TNGST Rules expeditiously and to communicate the result within ten working days; the impugned assessment order is stayed pending verification and the question of adjustment of the provisional Tran 1 ITC shall be determined on completion of that process.

Release of seized goods and conveyance - deposit of tax and penalty as condition for release - applicability of Sections 129 and 130 of the Goods and Services Tax Act, 2017

Release of seized goods and conveyance - deposit of tax and penalty as condition for release - annexure evidencing payment - Whether the seized truck and goods should be released pending disposal of the petition in view of deposit of tax and penalty by the writ applicant. - HELD THAT: - The writ applicant, engaged in transport business, claimed ownership of the seized truck and goods. The record shows that the applicant deposited amounts towards tax and penalty and produced receipts (Annexure H). Having regard to the deposit evidenced on the record and the pendency of the writ petition, the Court directed immediate release of the truck and the goods seized under the provisions of the GST Act. The Court recorded receipt of the payments and ordered release without deciding the larger question regarding the applicability of Sections 129 and 130, which remain under consideration.

The respondents are directed to immediately release the seized truck and goods in view of the deposit of tax and penalty evidenced by the receipts (Annexure H).

Final Conclusion: Pending adjudication of the writ petition on merits (including questions regarding applicability of Sections 129 and 130 of the GST Act, 2017), the High Court ordered immediate release of the seized truck and goods on account of the deposit of tax and penalty by the writ applicant.

Mandatory nature of CBDT instructions - reference to Transfer Pricing Officer u/s 92CA - assessing officer's duty to refer in transfer pricing cases - application of Instruction No.3/2003 to transfer pricing proceedings - remand for administrative compliance and reference to TPO

Mandatory nature of CBDT instructions - assessing officer's duty to refer in transfer pricing cases - application of Instruction No.3/2003 to transfer pricing proceedings - Whether the AO's failure to refer the computation of arm's length price to the Transfer Pricing Officer in accordance with Instruction No.3/2003 rendered the transfer pricing adjustments bad in law? - HELD THAT: - The Court held that Instruction No.3/2003 issued by the CBDT frames procedural mandates governing references to the TPO, including the AO's obligation to form a prima facie belief from available sources (such as Form No.2CEB) and, where applicable, to refer cases exceeding the prescribed threshold to the TPO. The Tribunal correctly concluded that by not making the reference the AO breached these mandatory instructions. The appellate court found no error in the Tribunal's conclusion that transfer pricing adjustments made in contradiction to the mandatory CBDT instructions were legally unsound. The Court therefore endorsed the Tribunal's view that the Assessing Officer's non-compliance with Instruction No.3/2003 vitiated the transfer pricing adjustments made by him. [Paras 7]

The Assessing Officer breached the mandatory CBDT instructions by not referring the matter to the TPO, and the transfer pricing adjustments made without such reference were bad in law.

Reference to Transfer Pricing Officer under Section 92CA - remand for administrative compliance and reference to TPO - Whether the Tribunal should have remitted the matter to the Assessing Officer for making the reference to the TPO instead of disposing the appeal by merely setting aside the transfer pricing adjustments? - HELD THAT: - Although the Tribunal set aside the transfer pricing adjustments as contrary to the CBDT instructions, the Supreme Court observed that the Tribunal ought to have acceded to the Departmental Representative's submission and remitted the matter to the Assessing Officer so that the Assessing Officer could take appropriate administrative steps, including making a reference to the TPO under Section 92CA(1), with the requisite approvals. The Court clarified that remediation of the Assessing Officer's lapse is an administrative act for the Assessing Officer and the Commissioner to undertake; accordingly the appropriate course was restoration to enable compliance with Instruction No.3/2003 and the statutory scheme under Section 92CA. [Paras 8, 9]

The matter is to be remitted to the Assessing Officer to take appropriate steps, including making a reference to the TPO in terms of Instruction No.3/2003 and Section 92CA.

Final Conclusion: The appeal is allowed in part: the Court upheld that the Assessing Officer's failure to refer to the TPO violated mandatory CBDT instructions and rendered the transfer pricing adjustments unsound, but directed that the matter be remitted to the Assessing Officer to take appropriate steps, including reference to the TPO under Section 92CA, in accordance with Instruction No.3/2003.

Notice under Section 143(2) - Framing of assessment under Section 143(3) - Deemed validity of notice under Section 292BB - Absence of notice versus infirmity in service - Curable procedural defect

Notice under Section 143(2) - Framing of assessment under Section 143(3) - Curable procedural defect - Effect of non-issuance of notice under Section 143(2) on the validity of assessment completed under Section 143(3). - HELD THAT: - The Court considered earlier precedent in Assistant Commissioner of Income Tax v. Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT] and concluded that issuance of notice under Section 143(2) is a statutory requirement which cannot be treated as a curable purely procedural defect where no such notice was in fact issued. The Tribunal and High Court findings that, in the absence of any notice under Section 143(2), the reassessment/regular assessment stood vitiated were held to be correct. The Court therefore affirmed that complete non-issuance of the mandatory notice cannot be cured by treating the omission as a mere irregularity. [Paras 4, 5, 8, 10]

Non-issuance of notice under Section 143(2) rendered the assessment invalid and the Tribunal and High Court were correct in so holding.

Deemed validity of notice under Section 292BB - Absence of notice versus infirmity in service - Whether Section 292BB cures complete absence of notice under Section 143(2) where the assessee participated in proceedings? - HELD THAT: - The Court analysed Section 292BB and held that its legal fiction operates only where a notice has emanated from the department but suffered infirmities in service (not served, not served in time, or served in an improper manner). Section 292BB is not intended to, and does not, validate a situation of complete non-issuance of notice. Accordingly, participation by the assessee does not convert a non-existent notice into a deemed valid notice under Section 292BB; the provision only cures defects in service of an existing notice. [Paras 6, 9, 10]

Section 292BB does not cure complete absence of notice; it only validates infirmities in service of a notice that has been issued by the department.

Final Conclusion: The appeals were dismissed. The Court upheld the Tribunal and High Court conclusions that absence of notice under Section 143(2) invalidated the assessment, and that Section 292BB does not cure a complete non-issuance of notice.

Slump sale - undertaking as a going concern - treatment of excluded assets in a slump sale - capital gains treatment where individual asset values cannot be determined - deemed transfer of a capital asset - application of binding precedent

Slump sale - undertaking as a going concern - treatment of excluded assets in a slump sale - Transfer of the assessee's fertilizer and fibre units in the relevant year qualified as a slump sale. - HELD THAT: - The tribunal found, as a matter of fact, that the fertilizer and fibre businesses were transferred as going concerns: land, buildings, plant and machinery, raw materials, licences, technology, trademarks, employees and current liabilities relating to the businesses were transferred and the consideration was fixed as a single "slump price" without allocation to individual assets. Only bank balances and an outstanding insurance claim were excluded. The court held that the exclusion of those limited items did not prevent the transaction from being a transfer of the undertaking as a going concern and therefore a slump sale within the statutory meaning. The finding that the sale was bona fide and that the transferred asset was a collection of assets constituting the undertaking was treated as a plausible factual conclusion not to be disturbed.

The transfer was a slump sale of the fertilizer and fibre undertakings.

Capital gains treatment where individual asset values cannot be determined - deemed transfer of a capital asset - application of binding precedent - Where the aggregate consideration for the slump sale could not be allocated among individual assets (including intangibles), the gain could not be computed for capital gains taxation and the rule in PNB Finance Ltd. governed the outcome. - HELD THAT: - Section 45 treats profits from transfer of a capital asset as chargeable to tax. The court accepted the tribunal's factual finding that the collection of assets included intangibles whose cost of acquisition could not be ascertained. Applying the binding Supreme Court authority in PNB Finance Ltd. (and relevant precedents distinguishing cases where individual asset values can be determined), the court held that, given the impossibility of apportioning the lump-sum consideration to individual assets for computation of capital gain, the charging provision could not be applied to compute capital gains in the ordinary manner. The ratio of the cited precedent was held to be applicable on the facts, and no interference with the tribunal's conclusion was warranted.

The gain on the slump sale was not chargeable to capital gains tax because the cost of acquisition of the constituent assets, including intangibles, could not be determined for computation.

Final Conclusion: Appeal allowed: the transfers of the fertilizer and fibre undertakings (assessment year 1993-94; financial year 1992-93) were held to be slump sales and, on the facts that precluded allocation of the lump-sum consideration among constituent assets, the amounts were not assessable as capital gains.

Additional depreciation under Section 32(1)(iia) - generation of electricity as manufacture or production of an article or thing - electricity as 'goods' - entitlement of power generators to additional depreciation prior to statutory amendment - effect of the Finance Act, 2012 amendment including power generation within Section 32 - plants and machinery used in captive power plants

Additional depreciation under Section 32(1)(iia) - generation of electricity as manufacture or production of an article or thing - plants and machinery used in captive power plants - Assessee entitled to additional depreciation on plants and machinery installed in its captive power plant for A.Y. 2006-07. - HELD THAT: - The Tribunal's conclusion that generation of electricity falls within the ambit of "manufacture or production of any article or thing" was accepted. The court relied on the Supreme Court's Constitution Bench finding that electricity has the characteristics of "goods" (State of Andhra Pradesh v. NTPC Ltd.) and subsequent judicial decisions (including the Delhi High Court in NTPC Sail Power Co. (P.) Ltd. and coordinate tribunal decisions) holding that electrical energy is an "article or thing" for the purposes of additional depreciation. The Finance Act, 2012 amendment (w.e.f. 01.04.2013) expressly including power generation in Section 32 was noted but held not to negate the pre-existing settled legal position; rather, the amendment reinforces the view that generation of electricity is akin to a manufacturing process. Precedents such as decisions of High Courts and the Tribunal applying the NTPC ratio were held to support allowing additional depreciation to entities generating electricity, including captive power plants. Applying these authorities, the Tribunal rightly allowed the assessee's claim for additional depreciation on the plants and machinery in the captive power plant. [Paras 8, 9, 11]

Claim for additional depreciation under Section 32(1)(iia) on plants and machinery of the captive power plant allowed; revenue's appeal dismissed.

Final Conclusion: The High Court dismissed the Revenue's appeal, upholding the Tribunal's allowance of additional depreciation to the assessee for the captive power plant for A.Y. 2006-07, applying the position that generation of electricity constitutes manufacture or production of an article or thing and is eligible for additional depreciation.

Addition to income - explanation of source of funds - source of the source - appellate interference with findings of fact - substantial question of law - challenge to approval under section 151 of the Income Tax Act

Addition to income - explanation of source of funds - appellate interference with findings of fact - Whether the Tribunal was justified in upholding additions while allowing part relief of Rs.5,00,000 as explained - HELD THAT: - The Tribunal reviewed the factual material and accepted that while certain credits (gifts and borrowings) were not satisfactorily explained and hence upheld, the claim of accumulated savings and agricultural income warranted some allowance. On the material before it the Tribunal treated Rs.5,00,000 as explained and deleted that portion of the addition. The High Court found no reason to disturb these concurrent findings of fact recorded by the Tribunal and the CIT(A), noting absence of legal error in the approach adopted by the Tribunal. [Paras 4, 5]

Tribunal's partial relief by deleting Rs.5,00,000 of the addition is sustained and the balance addition is upheld.

Source of the source - explanation of source of funds - Whether the assessee was under no obligation to explain the "source of the source" - HELD THAT: - The contention that the assessee need not explain the "source of the source" was considered but did not persuade the Tribunal. The Tribunal and CIT(A) made factual findings on genuineness and adequacy of explanations furnished for various credits. The High Court, on review, declined to treat this contention as raising a substantial question of law and found no infirmity warranting interference with the factual conclusions reached below. [Paras 4, 5]

The plea that there was no obligation to explain the "source of the source" is not accepted as a substantial question of law and does not warrant upsetting the Tribunal's factual findings.

Substantial question of law - challenge to approval under section 151 of the Income Tax Act - Whether the Tribunal erred in not deciding the ground challenging the approval under section 151 - HELD THAT: - The appellant contended that the Tribunal failed to adjudicate a challenge to the approval under section 151. The High Court observed that the questions raised did not amount to substantial questions of law requiring interference. The Court found no merit in treating the omission as a ground for setting aside the Tribunal's order and therefore declined to entertain the contention as a distinct substantial legal issue. [Paras 4, 5]

Challenge to the Tribunal's decision regarding approval under section 151 is not treated as a substantial question of law and does not justify interfering with the Tribunal's order.

Final Conclusion: The High Court found no legal error in the Tribunal's order, upheld the Tribunal's factual findings (deleting only Rs.5,00,000 of the addition), declined to treat the contentions raised as substantial questions of law, and dismissed the appeal.

Disallowance of carry forward of unabsorbed depreciation - prospective operation of statutory amendment - binding precedent

Disallowance of carry forward of unabsorbed depreciation - prospective operation of statutory amendment - binding precedent - Validity of the deletion by the CIT(A) and Tribunal of the addition made by the Assessing Officer disallowing carry forward of unabsorbed depreciation in light of a clarification that the legislative amendment operated prospectively. - HELD THAT: - The Revenue challenged the Tribunal's upholding of the CIT(A)'s deletion of an addition disallowing carry forward of unabsorbed depreciation, relying on an argument that a circular clarified the amendment to the Finance Act was prospective. The High Court held that the question was no longer res integra in view of the Court's earlier decision in General Motors Pvt Ltd v. Deputy CIT, which governs the legal principle on the point relied upon by the Revenue. Applying that binding precedent, the Court found no error in the Tribunal's conclusion to delete the addition and declined to entertain the Revenue's contention further. [Paras 3, 4]

Tax appeal dismissed and the Tribunal's order upholding deletion of the addition sustained.

Final Conclusion: The High Court dismissed the Revenue's appeal for assessment year 201314, holding the legal question settled by earlier precedent and therefore affirming the deletion of the addition by the Tribunal.

Business expenditure under Section 37 - expenditure for welfare of members - application of binding/co ordinate bench and High Court precedents - treatment of promotional/goodwill gifts as business expenditure

Business expenditure under Section 37 - expenditure for welfare of members - application of binding/co ordinate bench and High Court precedents - Deletion of addition made on account of disallowance of payment of Education Fund - HELD THAT: - The Court recorded that the first two substantial questions raised by the revenue fall for decision under the principles applicable to business expenditure under Section 37 and relate to payments made for members' welfare. The Assessing Officer had treated the payment as an appropriation for the benefit of owner members and not an allowable business expense. The CIT(A) and the Tribunal, however, followed earlier decisions, including the coordinate bench decision in ITA No.3242/Ahd/2010 for A.Y.2007 08 and the Gujarat High Court decision in Karjan Cooperative Cotton Sales Ginning & Pressing Society (199 ITR 17), holding that expenditure incurred to maintain good relations with members and generate goodwill is incurred wholly and exclusively for the purpose of business and therefore allowable. Respectfully following those precedents, the Tribunal upheld deletion of the addition. [Paras 5]

Addition made on account of payment of Education Fund deleted; appeal dismissed on this ground following precedent.

Business expenditure under Section 37 - treatment of promotional/goodwill gifts as business expenditure - application of binding/co ordinate bench and High Court precedents - Deletion of addition made on account of disallowance of claim of payment to Members Welfare Fund - HELD THAT: - The Assessing Officer disallowed the claimed Members Welfare Fund expenditure as an appropriation for the benefit of member owners. The CIT(A) relied upon the cooperative principle that the bank was obliged to maintain good relations with its members and on the Gujarat High Court authority in Karjan Cooperative (supra) and a coordinate ITAT decision, concluding that such expenditure is for keeping alive goodwill and continuity of business and thus deductible under Section 37. The Tribunal concurred and dismissed the revenue's appeal on this head. [Paras 5]

Addition in respect of Members Welfare Fund deleted; Tribunal and High Court follow precedent in favour of assessee.

Business expenditure under Section 37 - treatment of promotional/goodwill gifts as business expenditure - application of binding/co ordinate bench and High Court precedents - Deletion of addition made on account of disallowance of Special Long Term Finance Fund - HELD THAT: - The CIT(A) deleted the addition after applying the jurisdictional High Court authority in Daskroi Taluka Cooperative & Sales Union Ltd. (126 ITR 413), which treated expenditure on presenting articles to members to preserve image, generate goodwill and ensure continuity of business as incurred wholly and exclusively for business. The Tribunal affirmed the CIT(A)'s reliance on that decision and allowed the expenditure as deductible. [Paras 6, 7]

Addition relating to Special Long Term Finance Fund deleted; Tribunal's order affirmed.

Business expenditure under Section 37 - treatment of promotional/goodwill gifts as business expenditure - application of binding/co ordinate bench and High Court precedents - Deletion of addition made on account of disallowance of investment depreciation - HELD THAT: - The CIT(A) considered the facts alongside the decision in Daskroi Taluka (126 ITR 413) and held that the facts differed only in form of gift distribution but were akin in substance to expenditure held to be for business purpose. The Tribunal affirmed that conclusion and deleted the disallowance. The High Court found no reason to interfere with the Tribunal's application of the cited precedent. [Paras 6, 7]

Addition relating to investment depreciation deleted; appellate orders upheld.

Final Conclusion: The revenue's appeal is dismissed; the Tribunal's affirmance of the CIT(A)'s deletions (in reliance on binding/co ordinate ITAT and Gujarat High Court precedents) is upheld for A.Y 201314.

Dismissal of appeal on ground of low tax effect - applicability of CBDT Circular No.3/2018 - exception for Revenue Audit objection - Board's Circular No.21/2015 and retrospective withdrawal of departmental appeals - remand for fresh consideration on merits

Dismissal of appeal on ground of low tax effect - applicability of CBDT Circular No.3/2018 - exception for Revenue Audit objection - Whether the Income Tax Appellate Tribunal was correct in dismissing the Revenue's appeal for A.Y 2010-11 on the ground of low tax effect despite the case being reopened on the basis of a revenue audit objection - HELD THAT: - The Tribunal dismissed the Revenue's appeal relying on CBDT Circular No.21/2015 and its retrospective effect, treating the matter as having low tax effect (paras 2 and 5). The High Court accepted the Revenue's contention, supported by counsel's submission, that the case was reopened pursuant to a revenue audit objection and therefore falls within the specific exceptions listed in Clause 10 of CBDT Circular No.3/2018. Clause 10(c) of Circular No.3/2018 requires that adverse judgments relating to matters where a revenue audit objection has been accepted by the Department be contested on merits irrespective of the monetary tax effect (para 7). Given this mandate, the Tribunal should have examined the merits of the appeal instead of dismissing it for low tax effect; dismissal under the earlier circular could not override the exception contained in Circular No.3/2018 applicable to audit-objection cases (paras 6-8). Having found the exception applicable, the Court resolved the substantial question of law in favour of the Revenue and concluded that the Tribunal's order could not stand without adjudication on merits. [Paras 5, 6, 7, 8, 9]

The Tribunal's order dismissing the appeal as having low tax effect is quashed and set aside; the question of law is answered in favour of the Revenue and the matter is remitted to the Tribunal for fresh consideration on merits.

Final Conclusion: Appeal allowed; impugned Tribunal order set aside and matter remitted to the Income Tax Appellate Tribunal for fresh adjudication on merits in light of the audit-objection exception in CBDT Circular No.3/2018.

Disallowance under Section 14A in relation to exempt income - application of Rule 8D - no exempt income - non-invocation of Section 14A - concurrent findings of fact - substantial question of law

Disallowance under Section 14A in relation to exempt income - application of Rule 8D - no exempt income - non-invocation of Section 14A - concurrent findings of fact - Whether disallowance under Section 14A read with Rule 8D could be made when no exempt income was earned by the assessee for the assessment year. - HELD THAT: - The High Court examined the concurrent findings recorded by the Assessing Officer, the Commissioner (Appeals) and the Tribunal that the assessee had neither earned exempt income nor incurred expenses referable to exempt income in the year under consideration. Relying on the reasoning in the High Court's decision in Correctech Energy Private Limited and related authorities, the Tribunal and the lower appellate authority held that Section 14A applies only where expenditure is incurred in relation to income which does not form part of total income, and therefore, absent any claim or receipt of exempt income there was no basis to allocate or disallow expenditure under Section 14A or to apply the formula in Rule 8D. The present Court found no jurisdictional error in adopting those concurrent factual findings and the legal conclusion drawn therefrom, and held that no substantial question of law arose warranting interference with the concurrent conclusion that Section 14A/Rule 8D was not invocable in the facts of the case.

The concurrent conclusion that no disallowance under Section 14A/Rule 8D was warranted in the absence of exempt income is upheld and not disturbed.

Final Conclusion: The Tax Appeal is dismissed; the Court declines to interfere with the concurrent findings that Section 14A read with Rule 8D was not applicable when the assessee did not earn exempt income for the assessment year 2014-15.

Reassessment under Section 147/148 of the Income Tax Act - Explanation 3 to Section 147 - reason to believe - discovery of new material in survey under Section 133-A - continuity of partnership/identity of assessee after reconstitution - scope and limitation on reassessment grounds

Reassessment under Section 147/148 of the Income Tax Act - Explanation 3 to Section 147 - scope and limitation on reassessment grounds - discovery of new material in survey under Section 133-A - Validity and scope of reassessment proceedings initiated after survey-discovered material and applicability of the principle in Jet Airways/Lark Chemicals regarding assessment on grounds not stated in the original notice. - HELD THAT: - The Court observed that Explanation 3 to Section 147 permits the Assessing Officer to assess or reassess issues which come to his notice subsequently during the proceedings, but this power is subject to the substantive conditions of Section 147. The Jet Airways exposition - that reassessment on subsequently noticed issues is permissible only if the original basis for reopening is sustained and that the Assessing Officer cannot abandon the original basis and proceed on a different independent ground without fresh notice - cannot be invoked in the present facts because no reassessment order has yet been passed. What exists at present are notices and reasons assigned based on material discovered during a survey under Section 133-A; these reasons (that correct books were not produced and manufacturing claimed at Haridwar was in fact being carried out at Meerut/Delhi) remain to be tested in the reassessment proceedings. Consequently, the legal limitation explained in Jet Airways operates only at the stage of making an assessment/reassessment order; it is not applicable to invalidate the issuance of notices premised on newly discovered material where reassessment has not yet been completed. [Paras 15, 16]

The notices issued for reassessment based on material discovered in the survey are not invalidated on the basis of the Jet Airways principle at this stage; the reasons assigned must be tested in proceedings since no reassessment order has been passed.

Continuity of partnership/identity of assessee after reconstitution - reassessment under Section 147/148 of the Income Tax Act - Whether the reassessment proceedings (notices) are invalid because they relate to a different firm purportedly constituted after the relevant assessment years. - HELD THAT: - The Court found that the firm remained, in practical control and dominant partnership, the same family concern despite reconstitution. The reconstitution merely altered partner composition superficially while the dominant partners continued to be the same persons; accordingly, the argument that reassessment is sought against a different entity was rejected as unsustainable on the record before the Court. The Court also observed that contentions on identity and change of firm remain open to be agitated before the assessing authority and that its remarks do not prejudice the authority's adjudication. [Paras 17, 18, 19, 20, 21]

The plea that reassessment relates to a different firm is not accepted; the firm is treated as essentially the same for the purposes of the proceedings, subject to adjudication by the assessing authority.

Final Conclusion: Writ petitions dismissed. The High Court declined to quash the reassessment notices issued for AYs 2005-06 to 2008-09: the legality of reassessment based on survey-discovered material must be tested in the assessment proceedings, and the contention of a different firm post-reconstitution was not accepted on the record before the Court.

Deemed dividend under section 2(22)(e) - requirement that recipient must be a shareholder to attract deemed dividend treatment - distinction between gratuitous advance and advance given for consideration (payment of interest) - use of statements recorded during search and seizure as basis for additions requires independent corroboration of production and sale - deletion of additions where assessee proves inter se accounting treatment and absence of evidence of manufacture/sale

Deemed dividend under section 2(22)(e) - requirement that recipient must be a shareholder to attract deemed dividend treatment - distinction between gratuitous advance and advance given for consideration (payment of interest) - Deletion of addition treated as deemed dividend under section 2(22)(e) in assessments for AY 2010-11 and AY 2011-12 - HELD THAT: - The Tribunal held that section 2(22)(e) cannot be invoked against a borrower company which is not itself a shareholder of the lending company. Where the loan is not gratuitous but is given against consideration (interest was charged and paid/payable), the payment does not amount to a distribution falling within the ambit of deemed dividend. The Tribunal applied binding and persuasive decisions of higher fora including the jurisdictional High Court (Pradip Kumar Malhotra) and other tribunals and High Courts which establish that (i) the definition of dividend in clause (e) applies to loans/advances to shareholders (registered or beneficial in the manner required by the provision) and (ii) advances given in return for consideration beneficial to the lending company are not gratuitous advances attracting deemed dividend treatment. On the facts, the assessee was not a shareholder of the lender, interest was charged on the loan, and no infirmity was found in the CIT(A)'s deletion of the addition. The Tribunal therefore upheld the CIT(A)'s order and dismissed the Revenue's grounds on this issue. [Paras 15]

Addition under section 2(22)(e) deleted; Revenue's appeals on this issue dismissed.

Use of statements recorded during search and seizure as basis for additions requires independent corroboration of production and sale - deletion of additions where assessee proves inter se accounting treatment and absence of evidence of manufacture/sale - Deletion of addition made on account of alleged sale of unaccounted finished goods for AY 2011-12 - HELD THAT: - The Tribunal found that additions based solely on disclosure statements during search cannot be sustained unless there is independent evidence proving production of finished goods and their sale. The Assessing Officer's computation relied on an input/output conversion to infer finished goods production and a sales figure, but no documents or seized papers corroborated manufacture of Ferro Alloys or their sale. The assessee had carried out an audit of raw materials before the search, the chairman's disclosure was accepted as part of a larger group disclosure, and the assessee produced records (including ER-6) and explained the treatment of shortages. Absent material evidence of manufacture and sale, and in view of binding precedent that suspicion without corroboration is insufficient, the Tribunal upheld the CIT(A)'s deletion of the addition. [Paras 22]

Addition on account of alleged sale of unaccounted finished goods deleted; Revenue's appeal on this issue dismissed.

Final Conclusion: Both appeals filed by the Revenue (relating to deemed dividend additions under section 2(22)(e) for AY 2010-11 & 2011-12 and alleged unaccounted sales for AY 2011-12) are dismissed; the CIT(A)'s deletions are upheld.

Apportionment of royalty between capital and revenue - treatment of royalty as revenue expenditure and capitalisation of a portion with allowance of depreciation - allowability of additional depreciation where plant and machinery put to use for less than 180 days - claim under section 35(2AB) and alternative claim under section 35(1)(iv) - binding effect of coordinate-bench decisions and judicial discipline in follow-up years

Apportionment of royalty between capital and revenue - treatment of royalty as revenue expenditure and capitalisation of a portion with allowance of depreciation - binding effect of coordinate-bench decisions and judicial discipline in follow-up years - Whether the royalty paid to the foreign collaborator should be apportioned as 25% capital expenditure (eligible for depreciation) and 75% revenue expenditure, as held by the CIT(A) and followed by the Tribunal in assessee's earlier years. - HELD THAT: - The Tribunal noted that the identical controversy had been adjudicated by a Co ordinate Bench in the assessee's own earlier assessment years, which, following the decision in Southern Switchgear Ltd., directed apportionment of royalty into 25% capital and 75% revenue with appropriate depreciation on the capitalised portion. The CIT(A) applied that binding coordinate bench precedent; no distinguishing features were shown by the Revenue. In view of judicial discipline and the previously rendered consistent decision, the Tribunal found no reason to interfere with the CIT(A)'s order. [Paras 5, 6]

CIT(A)'s direction to treat 25% of the royalty as capital expenditure and 75% as revenue expenditure (with depreciation on the capitalised portion) is upheld; the corresponding grounds in both Revenue and assessee appeals are dismissed.

Allowability of additional depreciation where plant and machinery put to use for less than 180 days - binding effect of coordinate-bench decisions and judicial discipline in follow-up years - Whether the balance/additional depreciation carried forward from earlier year is allowable to the assessee under the relevant provisions, as allowed by the CIT(A). - HELD THAT: - The Tribunal observed that the CIT(A) followed the Co ordinate Bench decision in the assessee's earlier year and the decision of the Hon'ble Jurisdictional High Court in Brakes India Ltd., accepting the view that where additional depreciation arises from plant put to use for less than 180 days, the coordinate decisions entitled the assessee to the claimed additional depreciation in the subsequent year. The Revenue did not establish any distinguishing reason to depart from that precedent. Applying judicial discipline, the Tribunal declined to interfere with the CIT(A)'s allowance. [Paras 7, 8]

CIT(A)'s direction to allow the additional depreciation as claimed is upheld; Revenue's grounds on this issue are dismissed.

Claim under section 35(2AB) and alternative claim under section 35(1)(iv) - Whether the assessee's expenditure qualifies for deduction under section 35(2AB) and, alternatively, whether the expenditure is allowable under section 35(1)(iv); and whether the matter requires fresh adjudication. - HELD THAT: - The Assessing Officer disallowed the claim under section 35(2AB) for want of DSIR approval in Form 3CL; the CIT(A) confirmed that disallowance but did not consider the assessee's alternative plea under section 35(1)(iv). The assessee sought remand for verification and re adjudication in light of the Hon'ble Jurisdictional High Court's decision in M/s. Tube Investments of India. The Tribunal found that the AO had not adjudicated the alternative claim under section 35(1)(iv) and therefore restored the issue to the file of the AO for reconsideration and re adjudication in accordance with the cited High Court authority. [Paras 9, 10]

Ground remitted to the Assessing Officer for fresh adjudication on the alternative claim under section 35(1)(iv) and verification in line with the Jurisdictional High Court authority; assessee's ground is partly allowed for statistical purposes.

Final Conclusion: Applying coordinate bench and Jurisdictional High Court precedents, the Tribunal dismissed the Revenue's appeals and upheld the CIT(A)'s apportionment of royalty and allowance of additional depreciation; the assessee's appeals were partly allowed for statistical purposes by remanding the deduction claim under section 35 for fresh adjudication by the Assessing Officer in accordance with the cited authority.

Unexplained cash credit under section 68 - Credit without inflow of cash - not taxable as cash credit - Journal entries / notional entries versus real cash transactions - Onus to prove identity and genuineness of shareholders - Precedential application of Jatia Investment - no real cash flow

Unexplained cash credit under section 68 - Credit without inflow of cash - not taxable as cash credit - Journal entries / notional entries versus real cash transactions - Deletion of addition made under section 68 in respect of share capital and share premium credited in assessee's books. - HELD THAT: - The Tribunal accepted the factual finding that shares (including premium) were issued by the assessee in lieu of shares held by other companies and that these transactions were recorded by journal entries without any actual receipt or inflow of cash. On that basis the assessing officer's treatment of the credited share capital and premium as unexplained cash credit under section 68 was not sustainable. The CIT(A) relied on the Calcutta High Court decision in Jatia Investment to hold that where no real cash passes and entries are notional, the question of unexplained cash credit does not arise; the Tribunal found that precedent to be squarely applicable to the facts. The Revenue's authorities were held distinguishable: in those decisions there was either real banking/cheque transactions or different transactional character (bogus trading liability), and the Tribunal noted no material was placed on record to show actual cash inflow in the present case. Having regard to the documentary material considered by the CIT(A) and the absence of any real cash entry in the cash book or bank account, the Tribunal upheld the deletion of the addition under section 68.

Addition made by the AO under section 68 in respect of share capital and share premium deleted; appeal of the Revenue dismissed.

Final Conclusion: The Tribunal upheld the CIT(A)'s deletion of the addition under section 68 since the credited share capital and share premium arose from book entries in lieu of shares with no actual cash inflow, and the Jatia Investment ratio was held applicable; the Revenue's appeal is dismissed.

Income from business and profession - income from other sources - discontinued business - deemed receipt on discontinuance - deduction for bad debts under Sec. 36(2) - remand for verification of supporting particulars

Income from business and profession - income from other sources - discontinued business - deemed receipt on discontinuance - Treatment of interest received on advances as business income under the provision dealing with sums received after discontinuance of business. - HELD THAT: - The assessee received interest on advances amounting to the sum specified and contended that, being receipt after discontinuance of banking business, such interest falls within the deeming provision for sums received after discontinuance. The Tribunal examined the text of the provision which deems sums received after discontinuance to be income of the recipient in the year of receipt if such sums would have been included in total income had they been received before discontinuance. Applying that provision to the facts that the bank had ceased carrying on banking activities, the Tribunal held that the interest in question must be assessed as business income and not as income from other sources. The lower authorities failed to apply the deeming provision relating to discontinued business and therefore erred. [Paras 3, 4, 5]

The appeal on this issue is allowed; the interest is to be assessed as income from business and profession under the provision relating to sums received after discontinuance of business.

Deduction for bad debts under Sec. 36(2) - remand for verification of supporting particulars - Allowability of investment written off as bad debt claimed by the assessee and whether the claim meets the conditions for deduction under Sec. 36(2). - HELD THAT: - The assessee wrote off an amount claimed as investment/bad debt relating to a fixed deposit with a bank in liquidation and asserted no probability of recovery. The Assessing Officer disallowed the claim on the ground that the assessee's banking licence was cancelled; the CIT(A) found that the assessee had not demonstrated that the deposit was made in the ordinary course of business nor shown income from it in earlier years. The Tribunal examined the record and the statutory requirement that a debt written off must have been taken into account in computing income in the year of write-off or an earlier year, or must represent money lent in the ordinary course of banking or money lending business. Observing that the assessee had not furnished supporting evidence that the income from the deposit had been offered earlier or that the deposit met the conditions of Sec. 36(2), the Tribunal did not decide the claim on merits but directed that the matter be restored to the file of the CIT(A) for fresh adjudication after examination and verification of relevant supporting details to be furnished by the assessee. [Paras 6, 7, 8]

The ground is allowed for statistical purposes and remanded to the CIT(A) for fresh consideration and verification of the supporting particulars; no final decision on allowability on merits was recorded by the Tribunal.

Final Conclusion: The appeal is partly allowed: the Tribunal held that the interest received after discontinuance is assessable as business income under the deeming provision and allowed the appeal on that point; the claim of bad debt write off was not decided on merits and the matter is remanded to the CIT(A) for verification of supporting evidence and fresh adjudication.

Transfer pricing - arm's length price - comparability analysis - Transactional Net Margin Method (TNMM) - tested party selection - consistency rule - transfer pricing adjustment

Consistency rule - tested party selection - arm's length price - transfer pricing adjustment - Application of a consistent methodology adopted in subsequent assessment years for determining arm's length margins and direction to the Transfer Pricing Officer to adopt the same for AY 2011-12 - HELD THAT: - The Tribunal examined subsequent orders of the Transfer Pricing Officer for assessment years 2012-13 and 2015-16, wherein margins of the overseas associated enterprises were accepted and a minimum margin rule was applied (1% in earlier year and 0.5% in the latest order). Observing that the methodology had been accepted by both parties in later years and noting parity of facts, the Tribunal held that the rule of consistency warranted adoption of the same approach for the year under consideration. In exercise of its appellate power the Tribunal directed the TPO to adopt the margin of 0.5% for the assessee's AEs as taken in the latest order and to compute the transfer pricing adjustment accordingly; the assessee was directed to furnish the working. This direction operates as a mandate to apply the consistent tested-party/minimum-margin methodology and to work out the adjustment afresh. [Paras 6]

Ld. TPO directed to adopt the same methodology as in the later order and to accept AE's margin at 0.5% for computing TP adjustment; assessee to provide working.

Comparability analysis - Transactional Net Margin Method (TNMM) - transfer pricing adjustment - Contest over inclusion/exclusion of specific comparable entities and the proposed adjustment of Rs.77.09 lacs rendered infructuous by adoption of consistent methodology - HELD THAT: - Revenue challenged the inclusion by the DRP of four comparable entities and sought exclusion; revenue also sought upholding an admitted adjustment of Rs.77.09 lacs based on benchmarking with overseas tested parties. The Tribunal found that, having directed adoption of the consistent tested party/minimum margin methodology (0.5% AE margin) and remitted computation to the TPO, grounds relating to selection or exclusion of particular comparables and the earlier computed adjustment become academic. Consequently, there was no need to adjudicate those contentions on merits. [Paras 7]

Revenue's appeal dismissed; assessee's cross-objections partly allowed for statistical purposes as the remaining grounds are rendered infructuous by the directive on methodology.

Final Conclusion: The appeal by the revenue is dismissed. The Transfer Pricing Officer is directed to adopt, for AY 2011-12, the consistent tested party/minimum margin methodology applied in the later order and to compute the transfer pricing adjustment accepting the AEs' margin at 0.5%; the assessee to provide the computation. Other challenges to comparables and the admitted adjustment are rendered infructuous.

Refund application - mandamus to administrative authority - finality of appellate order - provisional release on compliance with terms

Refund application - mandamus to administrative authority - finality of appellate order - Consideration and disposal of the refund application dated 05.10.2018 by the second respondent - HELD THAT: - The writ petitioner, having earlier secured provisional release of imported machinery on compliance with conditions and thereafter obtained a final order of the appellate authority (CESTAT) which has attained finality, filed a refund application dated 05.10.2018. The petitioner complained of inaction by the officer entrusted with processing the refund. In view of the limited and procedural nature of the petitioner's prayer and the finality of the appellate decision, the Court exercised its supervisory jurisdiction to direct the administrative respondent to consider and dispose of the pending refund application within a stipulated short time frame. The direction is remedial and limited to consideration and passing of an order on the application without expressing any view on the merits of the claim. [Paras 6, 8]

The second respondent is directed to consider the refund application dated 05.10.2018 and pass a reasoned order thereon within four weeks from receipt of a copy of this order.

Final Conclusion: Writ petition disposed by directing the administrative respondent to consider and decide the refund application dated 05.10.2018 within four weeks; no costs.

Jurisdiction to quash disciplinary proceedings - disciplinary authority's exclusive power to decide disciplinary proceedings - remand for fresh consideration by the disciplinary authority

Jurisdiction to quash disciplinary proceedings - disciplinary authority's exclusive power to decide disciplinary proceedings - Adjudicating Authority/ NCLT does not have jurisdiction to quash disciplinary proceedings initiated by the IBBI; the power to continue, close or pass orders in such disciplinary proceedings vests with the IBBI as the Disciplinary Authority. - HELD THAT: - The Tribunal held that once IBBI initiates disciplinary proceedings on the basis of evidence on record, it is for the Disciplinary Authority (IBBI) to determine whether to continue or close the proceedings and to pass appropriate orders in accordance with law. Absent any statutory power conferred on the Adjudicating Authority (NCLT) to quash such proceedings, the NCLT cannot itself quash disciplinary proceedings even if the proceeding was initiated at the instance of, or following a recommendation by, the Adjudicating Authority. The Tribunal observed that expunction of an earlier adverse observation by the Adjudicating Authority may constitute a ground for the IBBI to close proceedings, but that does not confer on the Adjudicating Authority the power to quash proceedings initiated by IBBI. [Paras 3, 6]

The portion of the impugned order quashing the disciplinary proceedings is set aside; the Adjudicating Authority/NCLT lacks jurisdiction to quash disciplinary proceedings initiated by IBBI.

Remand for fresh consideration by the disciplinary authority - The matter is remitted to the IBBI for passing an appropriate order taking into account the reference made by the Adjudicating Authority and the subsequent acceptance of explanation by the Resolution Professional. - HELD THAT: - Having set aside the quashing of proceedings, the Tribunal remitted the matter to IBBI to consider afresh and pass appropriate orders in light of the Adjudicating Authority's initial direction to inquire and the later expunction of its observation after the Resolution Professional furnished an explanation. The Tribunal indicated that, given the expunction, it is expected that IBBI may record a closure of proceedings if warranted, but left the final decision to the disciplinary authority. [Paras 7]

The matter is remitted to IBBI to pass appropriate orders, taking into consideration both the Adjudicating Authority's initiation reference and the subsequent acceptance of the Resolution Professional's explanation.

Final Conclusion: The Tribunal allowed the appeal in part by setting aside the NCLT's quashing of the disciplinary proceedings and remitting the matter to the IBBI to decide the proceedings afresh; the appeal is disposed of with no costs.

Reference of substantial question of law - deletion of statutory provision - maintainability of remedy under a repealed provision - effect of a larger bench overruling a division bench - academic nature of proceedings where precedent has changed

Deletion of statutory provision - maintainability of remedy under a repealed provision - reference of substantial question of law - Whether a direction to the Tribunal to refer a substantial question of law under the provision relied upon could be granted when that provision (Section 35H of the 1944 Act) had been deleted at the time the Tax Case was filed. - HELD THAT: - The Court noted that although Section 83 of the Finance Act, 1994 contemplates the enabling provisions of Section 35H of the Central Excise Act, 1944, Section 35H had been deleted. The Tax Case was filed in 2010 when the provision for reference no longer existed. Consequently, the prayer for a direction to the Tribunal to refer a substantial question of law under the deleted provision could not be entertained. The Court expressly refrained from pronouncing on the merits of the petitioner's underlying contentions, confining its conclusion to the legal consequence of the deletion of the statutory provision relied upon.

Direction to the Tribunal to refer a substantial question of law under the deleted provision could not be granted; the prayer was not entertainable.

Effect of a larger bench overruling a division bench - academic nature of proceedings where precedent has changed - Whether the petitioner was entitled to relief from this Court in circumstances where the Tribunal's earlier division bench decision against the petitioner had been overruled by a larger bench in subsequent proceedings. - HELD THAT: - The Court observed that the Tribunal's division bench judgment rejecting the petitioner's claim had been overruled by a larger bench in Larsen and Toubro Ltd. v. Commissioner of Income Tax, and the appeals were remitted for fresh disposal. In light of that larger bench decision, the Court considered the issue before it to be prima facie rendered academic and declined to grant the specific relief sought from this Court. The Court did not adjudicate the substantive claim but recognised that the change in authoritative tribunal precedent altered the legal position relevant to the petitioner.

The matter is rendered academic by the larger bench decision; no substantive relief was granted by this Court, but the petitioner is at liberty to pursue available remedies in light of the larger bench ruling.

Final Conclusion: The petition is disposed of: the Court declined to direct the Tribunal to refer a substantial question of law because the statutory provision relied upon had been deleted and because the Tribunal's earlier decision against the petitioner has been overruled by a larger bench; the petitioner is permitted to pursue such remedies as may be open in law in view of the larger bench decision.

Refund of service tax - unjust enrichment - shifting of tax burden to service recipient - Mafatlal principle - claim barred where service tax recovered from customers

Refund of service tax - unjust enrichment - shifting of tax burden to service recipient - Whether the petitioner is entitled to refund of service tax paid where the tax was deposited by the petitioner but recovered from its customers and no refund application was filed by those customers. - HELD THAT: - The petitioner's claim related to service tax deposited for the period 2007-16. It was accepted on the material record that the tax, though deposited by the petitioner, was realised from its customers and that no refund applications were filed by those customers. The statutory authority applied the legal principle laid down by the Supreme Court in Mafatlal, namely that where the burden of a tax has been shifted to the recipient, allowing a refund to the person who originally paid would result in unjust enrichment. In those circumstances, the authority correctly concluded that the petitioner could not benefit from a refund because that would amount to unjust enrichment of the petitioner at the expense of the ultimate payers who did not claim refund.

The writ petition is dismissed and the order rejecting the refund claim is sustained on the ground that the refund would result in unjust enrichment where the service tax burden had been shifted to customers and no refund was claimed by them.

Final Conclusion: The High Court dismissed the petition and upheld the statutory authority's order rejecting the petitioner's refund claim for the period 2007-16 on the ground that the tax had been passed on to customers and a refund to the petitioner would amount to unjust enrichment pursuant to the Mafatlal principle.

Condonation of delay for approaching wrong forum - binding precedent - revisional jurisdiction under Rule 18 of the Central Excise Rules, 2002 - requirement of statutory fee for revision application - judicial review of administrative orders

Condonation of delay for approaching wrong forum - binding precedent - revisional jurisdiction under Rule 18 of the Central Excise Rules, 2002 - requirement of statutory fee for revision application - Validity of the order dismissing revision applications on grounds of delay and non-payment of fee in light of Supreme Court precedent condoning delay for approaching wrong forum and whether the revisional authority could summarily distinguish that precedent. - HELD THAT: - The Court found that the revisional authority and the Additional Secretary impermissibly rejected the explanation for delay-which was reliance upon the Supreme Court's decision in M.P. Steel Corporation-without proper application of binding precedent. The rejection of the explanation as a matter that "cannot be accepted as a general rule on the basis of relying upon decision" amounted to a cavalier and unsustainable approach. The dismissal on the additional ground of non-payment of a nominal fee was treated as trivial when it operated to deny a statutory remedy without adjudication on merits. Consequently, the impugned order could not be sustained. The matter is returned to the revisional authority to be heard and decided on merits, subject to the authority satisfying itself about compliance with the statutory fee requirement in accordance with law. [Paras 6, 7, 8]

Impugned order set aside; revisional authority directed to hear and decide the revision applications on merits after satisfying itself regarding payment of the requisite fee.

Final Conclusion: Writ petition allowed. The order dismissing the revision applications for delay and non-payment of fee is set aside and the matter is remitted to the revisional authority for fresh adjudication on merits, with liberty to ensure compliance with the statutory fee requirement.

Principles of natural justice - opportunity of hearing - fairness of procedure - reassessment under Section 25(1) of the Kerala Value Added Tax Act, 2003 - power to call for books and documents - remittal for fresh consideration

Principles of natural justice - opportunity of hearing - reassessment under Section 25(1) of the Kerala Value Added Tax Act, 2003 - power to call for books and documents - Ext.P3 assessment order is unsustainable for violation of principles of natural justice by failing to consider the petitioner's request to summon books and by not giving an effective opportunity of hearing before determining tax liability. - HELD THAT: - The Court examined Ext.P3 within the scope of judicial review and held that while authorities exercising powers under Section 25 must act fairly and reasonably, fairness is tested on the facts. The petitioner had filed Ext.P2 requesting that books of accounts and invoices be called from listed dealers and suppliers to verify the genuineness of movement of goods; that request was not considered and no express opportunity to be heard was given before concluding reassessment. The failure to consider the petitioner's volunteered request and to afford a hearing amounted to a denial of procedural fairness in the reassessment process and rendered Ext.P3 violative of the principles of natural justice. [Paras 5]

Ext.P3 set aside as violative of principles of natural justice.

Remittal for fresh consideration - opportunity of hearing - power to call for books and documents - The matter is remitted for fresh consideration with directions to afford the petitioner a hearing and to consider Ext.P2 requesting summons for books and invoices. - HELD THAT: - The Court directed that the petitioner appear before the second respondent on the specified date with all supporting documents, and that the second respondent consider and dispose of Ext.P2 in accordance with law expeditiously. The remand requires the authority to address the petitioner's request and to adjudicate the reassessment afresh after giving an opportunity to be heard and, if warranted, procuring and examining the books and invoices from suppliers/dealers. [Paras 6]

Matter remitted to second respondent for fresh consideration; petitioner to appear with documents and second respondent to consider and dispose of Ext.P2.

Final Conclusion: Ext.P3 assessment order dated 29.04.2019 set aside for breach of natural justice; matter remitted to the assessing authority for fresh adjudication after affording the petitioner a hearing and considering the request to summon relevant books and invoices.