TaxTMI 
TaxTMI 
2026 (2) TMI 527
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....aged in construction of road, as a civil contractor. On the basis of information received from Income Tax Department, a Show Cause Notice [SCN] dated 20-12-2020 was issued proposing to demand Service Tax amounting to Rs.12,66,832/- for the year 2015-16 & 2016-17 by invoking extended period of limitation. In the first round of litigation, the jurisdictional Assistant Commissioner vide order dated 28-06-2022 confirmed the demand of Service Tax of Rs.5,06,732/- after granting abatement of 60% under Rule 2A of Valuation Rules and dropped the demand of Rs.7,60,100/-. It also imposed equal penalty under Section 78 of Finance Act, 1994, demanded late fee of Rs.40,000/- and imposed penalty of Rs.10,000/- under Section 77(2) of Finance Act, 1994. ....
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....isions:- (a) Sharma Fabricators & Erectors Pvt. Ltd. Vs. CCE, Allahabad reported in 2017 (5) G.S.T.L. 96 (Tri.-All.). (b) Vasan Traders Vs. CCE & ST, Lucknow reported in 2019 (28) G.S.T.L. 116 (Tri.-All.). (c) Final Order No.70775/2025 dated 06-11-2025 in the case of M/s H. M. Gupta. (d) Final Order No.70810/2025 dated 19-11-2025 in the case of M/s Ajay Kumar Agarwal. 6. It is further submitted that the amount received from M/s Kanwhizz Developers & Infrastructure Pvt. Ltd [Kanwhizz]., during 2015-16 should have been taken as Rs.11,84,144/- instead of Rs.20,67,232/-. He drew my attention to the copy of ledger account of Kanwhizz in the books of the Appellants and also submitted that in the first round ....
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....a 5 of the SCN is reproduced below :- "2. And whereas, information received from the Income Tax Department (third party sources) for the period 2014-15, shows that an amount of Rs.1,02,69,691/- has been declared by the noticee as `total sale of services' in ITR 2014-15, however, as per records, noticee has neither filed ST-3 returns nor paid Service Tax on the gross amount received as sale of services during 2014-15. In the light of said disclosure, the noticee was asked by jurisdictional Range Superintendent, CGST Range Shyam Ganj, Divisioin-1, Bareilly vide letter dated 25-11-2020 and reminder dated 02-12-2020 requesting therein to submit reasons for difference found in the value of services as per ST-3 and ITR for the F/Y 2014-1....
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.... argued that the said Show Cause Notices were not issued by examining the books of account maintained by M/s. Sharma. The Show Cause Notices were based on the presumptions and third party information. He has argued that even when the payments were not made by the clients but the clients booked the expenditure in their books of account they were required to pay the related tax deducted at source to the exchequer and issue a certificate of TDS and incorporate the same in the return called 26AS filed with the Income Tax Authorities and such information cannot be the basis for arrival of the consideration received by the service provider. He has submitted that both the Show Cause Notices were issued without examining the books of account mainta....
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....ng considered the rival contentions and on perusal of record, we find that in the cases of both the Show Cause Notices dated 20-4-2009 & 13-10-2009 there is no whisper of examination of books of account maintained by M/s. Sharma to arrive at the value of consideration received by them. Surprisingly the draft audit report was the relied upon document. It may be worth mentioning here that the purpose of audit report is to point out any discrepancy to the notice for examination by the executive and it is the duty of executive to examine the records and examine the objection raised with reference to the records and facts of the case and take a view whether there is a sustainable case for issue of Show Cause Notice. Such vital aspects of framing....