This annual round-up analytically summarizes the key Direct and Indirect Tax Judgments of the Supreme Court and all High Courts of India reported at Taxscan.in during 2024.
In a recent case, the Calcutta High Court allowed the deduction under section 80-ic(2)(a)(i) of the Income Tax Act for the manufacture of Mouth Freshener ( Pan Masala Without Tobacco )
A division bench comprising Justice Surya Prakash Kesarwani and Justice Rajarshi Bharadwaj observed that the word ‘pan masala’ used in Entry 1 of Part B is not incorporated in Part-A of the 13th Schedule (for the state of Sikkim). Once the Legislature has not included pan masala in Part-A for the State of Sikkim, then it was not open for the ITAT to read the aforesaid entry-1 of Part-B in Entry-1 of Part-A. The finding recorded by the ITAT that the item manufactured by the appellant/assessee is included in tobacco products, is baseless and beyond the provisions of Section 80IC(2) read with the 13th Schedule
The Gujarat High Court has upheld the decision of the Income Tax Appellate Tribunal ( ITAT ) to allow income tax deduction for payment made to clear a mortgage, dismissing the appeal filed by the Principal Commissioner of Income Tax ( PCIT ).
The bench of Justices Bhargav D. Karia and Niral. R. Mehta noted that the findings of the Tribunal indicated that the assessee did not establish a mortgage on the property but instead provided a personal guarantee to Titco Ltd. to discharge the debt. This resulted in a charge over the property, and upon the buyer’s payment directly to Titco Ltd., the mortgage was released based on the assessee’s guarantee.
The Madras High Court set aside the GST ( Goods and Services Tax ) order, however, 10% pre-deposit was imposed with regards to the second issue related to RCM ( Reverse Charge Mechanism ).
The bench of Justice Senthilkumar Ramamoorthy observed that petitioner has placed on record the relevant GSTR 3B, GSTR 1 and GSTR 9C returns. And, upon examining these documents, the court found a prima facie opinion that the amount variation could have been an inadvertent error. Thus, in the interest of justice, the court decided to provide another opportunity on this issue.
A Single Bench of the Delhi High Court remarked that there’s a need for stricter rules against Chartered Accountant ( CA ) firms to improve accountability and transparency.
The court said CAs are important for ensuring the financial system is healthy because they conduct audits and supervise clients. Stricter rules are needed to prevent misconduct, according to the court. The court also said that a consultation is needed to establish how multinational accounting firms can operate in India. The court said these firms can improve India’s accounting practices and provide opportunities for young people. Justice Prathiba M Singh made these comments while dismissing appeals filed by individuals against disciplinary proceedings against ICAI.
In a recent case, the Calcutta High Court Upheld the ITAT order which held that the application of a net profit rate of 8% on gross receipts under contract is valid unless illegality is proven.
A division bench of High Court Justices Surya Prakash Kesarwani and Rajarshi Bharadwaj did not find any illegality in the impugned order of the ITAT. The substantial question of law is answered in favour of the assessee and against the revenue. The appeal filed by the revenue is hereby dismissed.
In a recent ruling, the Gujarat High Court allowed an income tax deduction of Rs. 4 crores under Section 80IA for the captive power plant of M/s Alembic Ltd. at Baroda. The court upheld the decision of the Income Tax Appellate Tribunal ( ITAT ) and dismissed the appeal filed by the Principal Commissioner of Income Tax.
The Coordinate Bench of Justices Bhargav. D. Karia and Niral. R. Mehta found no substantial question of law arising for consideration and dismissed the appeal, thereby upholding the ITAT’s decision to allow the income tax deduction of Rs. 4 crores under Section 80IA for the assessee’s captive power plant at Baroda.
The division bench, comprising Justice K.R. Shriram and Justice Jitendra Jain of the Bombay High Court, quashed the Integrated Goods and Service Tax ( IGST ) refund rejection order and accepted the 25-day delay condonation request, taking into account the nascent stage of the GST regime.
The bench observed, “Our judicial conscience does not permit us to reject this cause shown as bogus, particularly in view of the fact that the petitioner was an individual and the GST regime was at a nascent stage. Moreover, in both orders impugned in the petitions, there is no whisper about the merits of the application.”
The Delhi High Court has ruled that the order of the Income Tax Settlement Commission ( ITSC ) is final and conclusive for the assessment year ( AY ) for which the application was filed.
The bench of Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav observed that the ITSC’s order is deemed conclusive for all matters pertaining to the concerned AY for which the settlement application was accepted and processed by the ITSC. If the Income Tax Department is dissatisfied with the ITSC’s computation of income for the relevant AY, it can only challenge it according to the provisions under Sections 245D(6) and 245D(7) of the Income Tax Act
In a recent ruling, the Madras High Court allowed to rectify the inadvertent error of GSTR 3B returns as claimed by the assessee and also a fresh personal hearing on 10% pre-deposit condition.
The bench of Justice Senthilkumar Ramamoorthy acknowledged the fact that the error was inadvertent while filing the GSTR 3B return for the month of September 2018. It was observed that prima facie, it appeared that there is merit in the contention of the assessee. However, the court decided to put him on terms.
The Gujarat High Court ruled in favor of Bharti Airtel Ltd., determining that the discounts offered to its distributors on pre-paid SIM cards and recharge coupons do not constitute a commission and, therefore, are not subject to tax deduction at source ( TDS ) under Section 194H of the Income Tax Act, 1961.
A division bench of Justices Bhargav D. Karia and Niral R. Mehta stated that Section 194-H of the Act does not apply to the facts and circumstances of the case and that the assessees would not be legally required to deduct tax at source on the income or profit component of the payments.
In a recent ruling, the Madras High Court set aside an income tax assessment order on the grounds that the documents enclosed with an email by the petitioner were not taken into consideration.
The bench of Justice Senthilkumar Ramamoorthy set aside the impugned order, and the matter was remanded for reconsideration. The court directed the respondents to enable the portal and provide access to the petitioner within two weeks.
In a recent case, the Punjab and Haryana High Court allowed regular bail on completion of investigation on the allegation of Value Added Tax ( VAT ) refund worth Rs.24 lacs through forged and fabricated documents.
A single bench of Justice Karamjit Singh without commenting on the merits of the case, allowed the petition and the petitioner was ordered to be released on regular bail subject to his furnishing bail bonds/surety bonds to the satisfaction of the trial Court/Chief Judicial Magistrate/Duty Magistrate concerned.
The Gujarat High Court abated income tax appeals filed by the Commissioner of Customs (Preventive) due to the failure to file a claim during insolvency proceedings
The bench of Justices Bhargav. D. Karia and Niral. R. Mehta observed that under Section 31 and 32A of the IBC, upon approval of the Resolution Plan, the liability of the corporate debtor for past offences is extinguished. The Gujarat High Court held that the tax appeals became infructuous and were abated due to the appellant’s failure to file a claim during the company’s insolvency proceedings.
The Punjab & Haryana High Court HC directed the petitioner to pay arrears of maintenance and monthly maintenance to his son which was ordered to do so. The court found that the petitioner had sufficient income by analysing the Income Tax Returns ( ITR ). The court found that the non-payment of maintenance to the minor son stating the reason as unemployment.
Justice Nidhi Gupta observed that the mother of the respondent is single-handedly taking care of his day-to-day care and provision of amenities, his physical, mental, and emotional well-being, his educational and medical expenses, etc. The petitioner has exhibited a very uncooperative and irresponsible attitude in his categoric refusal to contribute towards the maintenance of his child.
The Calcutta High Court ruled that Rs. 32.42 Crores received for relinquishment of right to Operate Hotel under operating licence is Revenue receipt and not Capital Receipts.
The court set aside the orders passed by the CIT(A) and the ITAT, thus ruling in favour of the Income Tax Department. The bench of Justices Surya Prakash Kesarwani and Rajarshi Baradwaj observed that “..we hold that the sum of Rs. 32.42 crores received by the respondent assessee shall not fall under long term capital gain. The findings recorded by the ITAT that the aforesaid sum of Rs. 32.42 crores constituted long term capital gain is perverse. The impugned order of the ITAT to the extent it relates to the aforesaid sum of Rs. 32.42 crore cannot be sustained, it was held that the receipt in question of Rs. 32.42 crores in the hands of the respondent assessee is revenue receipt and not capital receipt.
The Madras High Court, set aside the unreasoned GST ( Goods and Services Tax ) order issued confirming the tax liability in mismatch between Table 8A data of GSTR 9 and GSTR 2A, granting relief to Ford India.
The bench of Justice Senthilkumar Ramamoorthy observed that the GST proposal was confirmed without any reasoning. Thus, ruled that the impugned order cannot be sustained.
In a significant development, the Supreme Court of India has dismissed a Special Leave Petition ( SLP ) against order of the Bombay High Court, which had set aside the invocation of Section 438 of the Criminal Procedure Code ( currently Section 482 of BNSS ) against a Summons under Section 60 of the Central Goods and Services Tax ( GST ) Act, 2017
The Supreme Court disposed of the Special Leave Petition and any pending applications associated with the case. The court’s decision reaffirms the legal position regarding the non-applicability of anticipatory bail in cases involving summons under Section 69 of the CGST Act, 2017.
The matter was heard by a Vacation Bench of Justice J.B. Pardiwala and Justice Ujjal Bhuyan.
The Supreme Court of India, after a long vacation of 50 days, has taken up the petition of Newclick against the income tax demand. The apex court issued notice to the income tax department.
The Delhi High Court bench of Justices Yashwant Varma and Purushaindra Kumar observed that “As we go through the same, we find that the ITAT has duly applied its mind to the issue of a prima facie case.” Thus, the court dismissed the writ petition and thus, the stay of income tax demand was also dismissed.
The High Court of Delhi dismissed the petitions filed by M/s. Aryan Cargo Express Private Limited and its parent company M/s. Aryan Cargo and Express Logistics Private Limited, directing them to pay the requisite late fees for the filing of belated annual returns and balance sheets. The court held that the companies must comply with the prescribed fees to restore their names in the Registrar of Companies.
The single bench of Justice Subramonium Prasad emphasised that the court’s previous orders did not extend the benefit of the condonation schemes to the Petitioners. The bench noted that while the court had restored the companies’ names, it had explicitly required the payment of requisite fees for filing overdue documents.
In a recent case, the Karnataka High Court upheld the interest allowed on refund of excessively paid sales tax. The Court rejected the petition as there was no merit in any of the contentions raised by the petitioner.
A division bench of Justice S G Pandit and Justice G Basavaraja observed that no question of law would arise for consideration in terms of Section 23(1) of the Act. Under Section 23(1) of the Act, it is open for the petitioner to prefer petition to the High Court against the order of the Tribunal on the ground that the Tribunal has either failed to decide or decided erroneously any question of law.
In a recent case, the Calcutta High Court allowed writ petition as temporary respite to taxpayers awaiting the operationalization of Goods and Service tax ( GST ) Appellate Tribunal.
The single bench of Justice Raja Basu Chowdhury viewed that justice would be sub-served if the petitioner is directed to deposit with the GST authorities the sum equal to 5 % of the remaining amount of tax in dispute, in addition to the deposit already made under sub-section (6) of Section 107 of the said Act. Since the parties agree that the writ petition can be disposed of based on the records available before the Appellate Authority, the court directed the petitioner to enclose all documents filed before the Appellate Authority in a compilation, in the form of a paper book.
The Kerala High Court has viewed that the doctrine ‘he who heard must decide or he who decides must hear’ applies to statutory authorities. The court held that if the income tax officer who hears the case does not render the decision which is gross violation of the principles of natural justice.
The single bench of Justice Murali Purushothaman has observed that Section 148A of the Income Tax Act provides for the opportunity to be heard by the assessee. The court quashed the order, which was not passed by the officer who heard the petitioner’s order.
In a significant ruling, the Kerala High Court held that the time limit for furnishing Goods and Services Tax ( GST ) returns for September month to be treated as 30th November in each financial year with effect from 1.07.2017. Further viewed that in respect of the petitioners who had filed their returns for September on or before 30th November, their claim for ITC should be processed, if they are otherwise eligible for ITC.
In light of precedent, the Single bench of Justice Dinesh Kumar Singh held that the time limit for furnishing the return for September is to be treated as 30th November in each financial year with effect from 01.07.2017, in respect of the petitioners who had filed their returns for September on or before 30th November, and their claim for ITC should be processed, if they are otherwise eligible for ITC.
The Gujarat High Court quashed the Income Tax reassessment proceedings initiated after 4 years on deduction claim under Section 80IA(4)(iv) of the Income Tax Act, 1961.
the division bench of Justices Bhargav D. Karia and Niral R. Mehta observed that the income tax notice for reopening issued beyond the period of 4 years cannot be sustained. It was added that “In that view of the matter, it is not necessary to examine the rival contention with respect to validity or otherwise of the claim for deduction under section 80IA(4)(iv) of the Act.” Subsequently, the challenged income tax notice was set aside and quashed.
Capital Gain deduction under Section 54 of Income Tax Act was provided by the Gujarat High Court based on seized evidence despite non-disclosure of cash transactions. The court reversed the decision of the Interim Settlement Board ( previously Settlement Commission ).
The bench of Justices Bhargav D. Karia and Niral R. Mehta stated that the assessee is entitled to the deduction under Section 54 of the Income Tax provision for the cash transaction involved in the sale and purchase of the property. This entitlement holds valid even if the petitioner did not disclose the cash portion of the transaction in the income tax return or deposit the amount into a bank account.
The Allahabad High Court bar association has announced strike today due to the insulting remarks of the Judges on the lawyers. The Bar has decided to boycott the work today. It was conveyed through a letter to the Chief Justice of the Allahabad High Court.
The Bar decided to abstain from the judicial work on 10th July 2024. For further action, it was informed that the Executive Committee of HBA will again meet at 05:00 pm on July 10. The bar also clarified that the member of the advocate act contrary to the resolution passed by the bar will be canceled after giving him an opportunity by issuing a show cause notice.
In a recent ruling, the Madras High Court set aside the VAT ( Value Added Tax ) order issued after 9 years post Show Cause Notice ( SCN ) issued in the year 2015. The matter was remanded for reconsideration.
The bench of Justice Senthilkumar Ramamoorthy osberved that “The documents on record indicate that no hearings or other developments took place between 2015 and 11.03.2024. Solely on this ground, re-consideration is necessary by providing a reasonable opportunity to the petitioner.
In a significant ruling, the Karnataka High Court directed authorities to refund an amount encashed from a petitioner, who is engaged in the manufacturing and trading of sports goods, due to the non-constitution of the Goods and Services Tax Appellate Tribunal (GSTAT).
It was held by the Single Bench of Justice S R Krishna Kumar that, “In view of the aforesaid facts and circumstances, I deem it just and appropriate to dispose of this petition by directing the respondent to refund the aforesaid amount of Rs.11,21,840/- encashed by the respondent on 01.02.2024 within a period of one month from today.” It was further noted that, “immediately upon the respondent refunding the aforesaid amount.
The Madras High Court allowed the prominent Cement company Ramco Cements against the GST orders issued on multiple issues including the taxability of the sale of second hand or old vehicles.
The bench of Justice Senthilkumar Ramamoorthy found that the show cause notice did not raise issues related to staff welfare expenses and ineligible ITC under sub-section 5 of Section 17 of the applicable GST laws. Consequently, the principles of natural justice were contravened. The show cause notice did address the non-reversal of ITC for exempted supplies, but the impugned order inconsistently concluded that the sale of old/used vehicles is taxable, which is contradictory as argued by the assessee-petitioner’s counsel.
The Allahabad High Court set aside a tax demand order against M/S Jain Medicals, citing the denial of an opportunity for an oral hearing as mandated under Section 75(4) of the U.P. GST Act, 2017.
The bench of Justices Saumitra Dayal Singh and Anish Kumar Gupta observed that “an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”
The Madras High Court directed customs to handle the re-export request of mishipped adult toys found in imported lab bottles. The writ petition sought disposal of representations for re-exporting the toys.
the bench of Justice Senthilkumar Ramamoorthy of the Madras High Court disposed of the matter directing the Customs Officers / Department to consider and dispose of the representation for re-export within eight weeks.
The Gujarat High Court dismissed the appeal filed by the revenue citing that there is no base for initiating proceedings under Section 153C of the Income Tax Act. The court stated that an unsigned excel sheet without corroborative evidence fails as evidence. The bench of Chief Justice Sunita Agarwal and Justice Aniruddha P. Mayee observed that the Income Tax Assessing Officer failed to clarify the document’s nature while initiating action under Section 153C of the IT Act of 1961, disregarding the lack of disclosure of statements from persons referenced in the search related to seized materials, thus rendering the proceedings invalid
In a recent ruling, the Allahabad High Court, in a petition seeking to quash the House Tax Bill directed to file a representation before the UPMC ( Uttar Pradesh Municipal Corporation ) Zonal officer.
The High Court, with Justices Brij Raj Singh and Vivek Chaudhary, allowed the petitioner to submit a detailed representation to respondent no.4, Zonal Officer, Zone II, Municipal Corporation, Aishbagh, Lucknow, including all grievances, along with a copy of the writ petition, annexures, and supporting documents, within one week. Additionally, a certified copy of the court order should accompany the submission.
The Gujarat High Court has ruled that admission fees paid to a charitable educational trust can be considered a corpus donation and are thus eligible for exemption under Section 11(1)(d) of the Income Tax Act, 1961, if there is no evidence to suggest it was a capitation fee.
After examining the case, the bench of Justices Bhargav D. Karia and Niral R. Mehta found that the Tribunal’s decision lacked a detailed analysis of the facts and the trust’s previous practices.
The delay tactics of the GST payer- Resort company was criticised by the Allahabad High Court. After hearing the submissions of the respondent’s counsel, the court had made strong disapproval on the time-buying nature of the assessee.
From the reading of the order, the High Court bench of Justices Shree Prakash Singh and Mrs. Sangeeta Chandra observed that the petitioner was initially issued a notice under Section 73(8) for the deposit of an amount based on wrongly claimed Input Tax Credit ( ITC ).
A Division Bench of the Bombay High Court has deleted the penalty against the Film & Television Producers Guild of India ( FPGI ), while holding that no intention is attributable to evasion of tax, when the issues are debated.
The Bombay High Court Division Bench of Justices Jitendra Jain and K R Shriram deleted the Fine / Penalty of Rs.71,87,500/- confirmed by the Appellate Authority. However, the High Court also upheld the entertainment duty while deleting the penalty due to lack of proper statutory reference for the penalty in the original order and the debatable nature of the issue; further, no evidence suggested that the FPGI intentionally evaded tax.
The Allahabad High Court allowed the company to contest the DGGI’s bank account attachment under Section 83 of the GST Act granting a two – week time to file the objections, where it was alleged that department only served the Form GST DRC-22 to the bank and not to the assessee.
The High Court bench of Justices Arun Kumar Singh Deshwal and Alok Mathur noted that the counsel received a copy of order dated 08.03.2024 from respondent no. 4 and permitted to file objections which may be decided in terms of Rule 159(5) of the GST Rules.
The Delhi High Court has ruled that the Income Tax Settlement Commission ( ITSC ) is not devoid of jurisdiction to make an addition during settlement proceedings, as clearly stated in the settlement terms.
Justices Yashwant Varma and Purushaindra Kumar Kaurav noted that the settlement provisions aim to balance voluntary income disclosure by the assessee with the assessment of income that has escaped.
In a recent case, the Calcutta High Court held that in the absence of a cross-border insolvency framework, Indian courts do not recognize or enforce foreign insolvency judgements from non-reciprocating countries, such as the U.S., and thus are not obligated to stay ongoing suits due to such foreign proceedings.
The single bench of Justice Shampa Sarkar concluded that only orders from reciprocating countries like the UK are executable in India under Section 44-A of the CPC. Further, it was held that the application filed under Section 45 of the Arbitration Act was at the stage of hearing and an injunction was not issued by the Trial Court yet.
The Supreme Court has ruled that Vodafone India is not obligated to deduct income tax TDS ( tax Deduction at Source ) on payments made to the non-resident telecom operators. The bench also condoned the delay of 222 days in favour of the department.
In this Special Leave Petition ( SLP ) filed by the Income tax department, the Supreme Court stated that “During the course of submissions, we realised that this petition is covered by the judgment of this Court in Engineering Analysis Centre of Excellence Private Limited vs. Commissioner of Income Tax and Anr. reported in (2022) 3 SCC 321, which has been followed in other cases also. When this fact was brought to the notice of the learned senior counsel appearing for the petitioners, it was pointed out that in similar matters, this Court has issued notice.”
The bench, led by Chief Justice of India DY Chandrachud and Justices JB Pardiwala and Manoj Misra, ruled that enrollment fees cannot exceed Rs. 750 for general category advocates and Rs. 125 for those from SC/ST categories.
This judgement will have prospective effect, meaning Bar Councils are not required to refund excess enrollment fees collected so far. However, the court allowed SBCs to charge fees for services provided to advocates after enrollment.
The Supreme Court has clarified its stance on State Bar enrolment fees, ruling that any funds collected from lawyers as a prerequisite to enrolment must strictly adhere to the definition of ‘enrolment fee’.
The Court pointed out that Section 24(1) of the Advocates Act specifies the conditions under which advocates can be enrolled on State rolls, explicitly mentioning the permissible amount for enrolment fees.
The Supreme Court has ruled in favour of the PVR Cinemas that Entertainment Tax should be applied solely to the ticket price for cinema or theatre entry, excluding online booking charges. This decision reaffirms the earlier division bench ruling by the Madras High Court.
The Supreme Court upheld that the power to tax mineral rights is constitutionally entrusted to states and cannot be derived by widening the interpretation of Seventh Schedule entries. The MMDR Act does not limit this power, reinforcing the states’ authority to impose taxes on mineral rights and mineral-bearing lands under the relevant entries of List II.
In a significant ruling, the Supreme Court of India has granted state governments the authority to levy additional taxes on mining activities, which is being viewed unfavourably by mining companies. This verdict, delivered by a 9-judge Constitution Bench headed by Chief Justice of India DY Chandrachud, clarifies that states can impose taxes on mines and mineral-bearing lands under constitutional provisions. The ruling has already impacted the stock market, with shares of several leading mining companies experiencing declines.
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