TaxTMI 
TaxTMI 
2019 (5) TMI 263
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.... 70,18,577/- for the period Apr.'08 to Dec.'12. The department rejected the VCES application for the reason that audit was initiated as departmental internal audit team had visited the appellant's Unit on 26.11.2013 and that VCES application cannot be entertained in view of section 106(2) of the Finance Act, 2013. Show-cause notice was issued to the appellant proposing to reject VCES application. After due process of law, the original authority confirmed the rejection, which was later upheld by Commissioner (Appeals). Hence this appeal. 2.0 On behalf of the appellant, the learned counsel Ms. S. Sridevi submitted that the department vide show-cause notice, dated 29.01.2014 proposed to reject the VCES declaration filed based on the basis o....
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....ice was kept closed during that time and whenever there was a necessity the Unit was opened. Therefore, the allegations in the above show cause notice that audit was conducted at the business premises of the appellant is factually wrong. Further, the department has merely relied upon the letter dated 23.01.2014, in which the Additional Commissioner (Audit) informed the lower authority that audit appellant's premises has been conducted on 26.11.2012. However, no copy of the same was served to the appellants despite several requests. 2.4 The appellant submits that no such audit took place on 26.11.2012. The lower adjudicating authority and the lower appellate authority relied upon the letter, dated 23.01.2014 supposed to have been issued b....
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....is evident from the letters of the department that they called for certain documents to conduct an audit. The appellant submits that mere calling of documents to conduct audit does not mean "initiation of audit. It is mandatory that "physical visit of the audit officials should have taken place at the premises of the assessee" in order to reject their application under VCES. In the light of the above, the appellant submits that the order of the lower authority is liable to set aside and the appeal is to be allowed. 3. The learned Authorised Representative for the Revenue Shri L. Nandakumar, AC (AR) supported the findings in the impugned order. He referred to section 106(2) of the Finance Act, 2013 (Amendment) and submitted that as per cl....
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....it was initiated against the appellant and, therefore, the VCES application cannot be entertained. It is stated that on 26.11.2012, they had visited the premises of the appellant. This fact is denied by the appellant. As per the Board's clarification, what constitutes the 'initiation of audit' is clarified as under:- S.No. Issues Clarification 19 In terms of section 106 (2) (b), if a declaration made by a person against whom an audit has been initiated and where such audit is pending, then the designated authority shall by an order and for reasons to be recorded in writing, reject such declaration. As the audit process may involve several stages, it may be indicated as to what event would constitute.- (i) Initiation of aud....