Income Tax Department finalises ITBA Assessment Module for Selection of Scrutiny cases under CASS [Read Circular]

The Income Tax Department finalized the Income Tax Business Application (ITBA) Assessment Module for Selection of Scrutiny cases under Computer Assisted Scrutiny Selection (CASS).

The CASS 2020 Cycle for ITRs of A.Y. 2019-20 for the current year has been finalized. The Board has approved the parameters for the selection of cases and cases are visible to the Assessing Officers.

“In the cases pertaining to Faceless Assessment Scheme, notice u/s 143(2) has been issued by the prescribed authority and served by National e-Assessment Centre (NeAC) as per the provisions of Faceless e-assessment scheme, 2019. Subsequently, the cases have been assigned to a specific Assessment Unit in a Regional e-Assessment Centre (ReAC) through an automated allocation system for the purpose of e-assessment,” the Income Tax Directorate while addressing the Principal Chief Commissioner and Principal Commissioner of the  Income-Tax said.

In the cases pertaining to Central Charges & International Taxation, notice u/s 143(2) has been issued by the prescribed authority and served on the Assessee electronically. Subsequently, these cases have been directly displayed to the concerned jurisdictional Assessing Officer for carrying out further assessment proceedings.

The service of the notices u/s 143(2), in cases selected for scrutiny, has been made by transmitting the authenticated copy of the notice on the efiling account or email id of the assessee as prescribed in Rule 127(2)(b) of the Income Tax Rules, 1962.

The Assessment Module under ITBA can be accessed by entering the following URL (http://itba.incometax.gov.in.) in the browser. The path for Assessment Module is ITBA Portal, then Modules, Assessment and Worklist. The Assessment Unit can view the delivery status of notices generated/ issued in the Assessment module under ITBA.

Underlying information in respect of the cases of A.Y. 2019-20 selected under CASS 2020 have been made available on Verification Module of Insight Portal and the same can be accessed by Logging in the Insight Portal using the ID and password registered with ITBA Once logged in, on the homepage, click ‘Verification’ from the left sidebar menu, hover mouse over Taxpayer and then select ‘Proceedings’ and then click on the hyperlink given on count of cases u/s 143(2).

Verification Module provides access to a different type of cases that are generated on the basis of approved rules and assigned to the designated user Details of cases selected under CASS are available under case type ‘143(2) The AOS can download Case Summary pdf containing issue, scenario, rationale and information elements by clicking on pdf icon available on case details screen. Further, users can also provide feedback ratings and submit remarks for all scenarios displayed on the screen.

Access to Taxpayer Profile View of Insight Portal, to view information related to PAN of cases that are assigned, has been granted to the Assessing Officers Profile Views shows various information related to taxpayer including Comparative ITR information under Return Profile (TRP), Comparative key values, financial ratios etc. under Financial Profile (TFP), Details of various address, email, mobile numbers under Master Profile (TMP), List of accounts, immovable assets etc under Asset Details (TAD), List of key persons, shareholders, etc under Relationship (TRL), and Third Party Information, Aggregated TDS Payments, Aggregated GST Transactions and other information under Taxpayer Annual Summary (TAS).

The CBDT has mandated the online passing of all scrutiny assessment orders. The online CASS feedback after the completion of the assessment has been made mandatory in ITBA.

Notice u/s. 143(2) in scrutiny cases contain the issue(s) identified for examination. The description of reasons for scrutiny visible to the AO may be different from the issues printed on the notices as the reason for selection visible to the AO contains a detailed description related to the case. The screen for display of reasons for scrutiny display issue for examination printed on notice (visible to assessee), the corresponding reason for scrutiny selection (visible to AO), underlying information element (visible to AO), and hyperlink for the rationale for scenario (visible to AO).

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ITAT rejects Invocation of LOB and allows Indo-UAE Tax Treaty benefits on Shipping Income to Company managed and Controlled in UAE [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench rejected the invocation of Limitation of Benefit (LOB) and allows Indo-UAE tax treaty benefits on Shipping Income to Company managed and Controlled in UAE.

The assessee, Interworld Shipping Agency LLC is a limited company incorporated in the UAE, a tax resident of the UAE, and engaged in the business of services like ship chartering, freight forwarding, sea cargo services, shipping line agents. The uncontroverted stand of the assessee, as noted by the Assessing Officer, is that the assessee charters the ships for use in transportation of goods and containers in international waters, including to Kandla and Mundra ports as indeed other ports in India and elsewhere.

During the relevant previous year, the assessee had received Rs 64,41,25,715 on account of total freight collection, including prepaid collections, which, under section 44B r.w.s. 172, result in a taxable income, computed @ 7.5%, of Rs 4,83,09,429. The assessee, however, claimed that as the assessee is a tax resident of the UAE and as, under the Indo UAE tax treaty, the profits derived by an enterprise of a UAE or India from the operation by that enterprise of ships in international traffic shall be taxable only in the respective jurisdiction, the assessee is not to pay any tax in India. The relief was thus sought under section 90 read with the Indo UAE tax treaty.

The Assessing Officer did take note of the fact that the assessee had taken vessels on the time charter, for transportation of good by ship in the international traffic, as also the assessee’s filing of the commercial license issued by the Department of Economic Development, Government of Dubai, and tax residency certificate.

He, however, noted that as much as 80% of the profits of the assessee entity were to go to one Dimosthenis Lalagiannis, a Greek national. The Assessing Officer was of the view that since this person was a Greek national, it could be safely concluded that the business was not managed or controlled wholly from the UAE. It was also noted that the assessee entity is a partnership firm and not a company. As regards the tax residency certificate, and no objection certificates issued by the Indian income tax authorities in the past, the Assessing Officer was of the view that nothing turns on these certificates as these certificates are obtained on the basis of misrepresentation of facts.

It was also noted that, in terms of the amendments brought about by the Finance Act 2012, the tax residency certificate of a non-resident entity is a necessary but not sufficient condition for the grant of treaty benefits, and, therefore, treaty protection cannot be granted merely on the basis of a tax residency certificate.

Article 29 of Indo UAE tax treaty, which states that “An entity which is a resident of a Contracting State shall not be entitled to the benefits of this Agreement if the main purpose or one of the main purposes of the creation of such entity was to obtain the benefits of this Agreement that would not be otherwise available. The cases of entities not having bona fide business activities shall be covered by this Article”.

The coram headed by the Vice President, Pramod Kumar observed that when an entity is established in 2000, and the relevance of the Indo-UAE tax treaty comes into play only in 2015, it cannot be said that the “main purpose of creation of such an entity was to obtain the benefits” of the Indo UAE tax treaty. Unless the purpose of creating the entity in question is to avail the Indo UAE tax treaty benefits, the LOB clause in article 29 cannot come into play. Such a possibility is simply ruled out on the facts of this case. In any event, it is specifically added in the said LOB clause, that “the cases of entities not having bonafide business activities shall be covered by this article”.

The ITAT held that the assessee company is a resident of the UAE, in terms of requirements of Article 4(1)(b) of the Indo-UAE tax treaty, that the limitation of benefits provisions of article 29 of the Indo-UAE tax treaty cannot be pressed into service in this case, and that the assessee is eligible for treaty protection, in respect of its income earned in India, under the Indo UAE tax treaty. It is not even in dispute, and rightly so, that under the provisions of Article 8(1) of the Indo UAE tax treaty, which provides that “profits derived by an enterprise of a Contracting State from the operation by that enterprise of ships in international traffic shall be taxable only in that State”, the assessee company is protected from taxation of the income in question in India.

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Customs Dept. failed to issue SCN for Recovery of Customs Duty, issue of Admissibility of Interest and its rates doesn’t arise: CESTAT [Read Order]

The Customs, Excises, and Service Taxes Appellate Tribunal (CESTAT), Chandigarh Bench ruled that the Customs Department failed to issue Show Cause Notice for recovery of Custom Duty, so the issue of admissibility of interest and its rates does not arises.

The respondent, M/s. Overseas Warehousing P.Ltd. was appointed as Custodian responsible for the receipt, storage, delivery, dispatch or otherwise handling of imported goods and export of goods in terms of section 45 of the Customs Act, 1962. One importer, namely, M/s. Golden Enterprises filed two bills of entry declared to be Pressed Distillate Oil.

A case was booked by DRI and the said imported goods were detained, seized, and confiscated. After prolonged litigation finally, the matter was decided against the department. Detention Certificate was issued by the department under Regulation 6(1) (l) of Handling of Cargo in Customs Area Regulations, 2009 for waiver of ground rent or demurrage for the period the goods remained detained, seized, and confiscated.

COC was granted by the proper officer for the delivery of the impugned goods to M/s. Golden Enterprises. Subsequent to grant of COC by the department the respondent demanded ground rent from the importer for the period the goods were lying in CFS in spite of issuance of detention of/waiver certificate under Regulation 6 (1) (l) of Handling of Cargo in Customs Area Regulations, 2009 for waiver of ground rent or demurrage.

Department vide letters asked the appellant not to third party liability with specific directions to follow the provisions of Section 48 of Customs Act, 1962.

Aggrieved against the refusal of the department to aggressively pursue the matter of waiver of detention/demurrage and the refusal of the custodian to accept the detention certificate, M/s. Golden Enterprises o filed Civil Writ Petition before High Court. During the pendency of the said petition, the respondent disposed of goods. The importer moved a contempt petition before the High Court upon which the High Court took a very strong view in the matter. The High Court vide order to consider the refund of duty paid by the petition along with interest on the declared value of the seized goods way back in 2013.

For complying with the directions of the High Court the department froze the bank account of the respondent against which he filed a writ petition. High Court vide its order directed the respondent to put Rs.25 lakhs in escrow account and the department will determine the question of admissibility of interest and its rate, if any, after adjudicating the recovery of duty from the respondent after giving the opportunity of hearing.

The sole contention of the Revenue is that the demand of interest against the respondent as per direction of High Court vide order. It is the contention of the Revenue that the importer has deposited duty way back in 2013 but could not enjoy, therefore, the respondent liable to pay duty and interest from 2013.

The coram of Ashok Jindal said that there was no goods in question were in the custody of the custodian in terms of section 47 of the Act then the duty is payable by the custodian but no such notice has been issued to the respondent by the appellant to determine the liability on the respondent. Moreover, it is fact on record that the appellant has enjoyed duty paid way back in 2013 on the goods in question.

The CESTAT observed that the question mark on the person who has received duty, who can duty, who is liable to pay interest thereon and duty has been enjoyed by the appellant themselves how can demand interest from the respondent without determining liability.

“The Revenue’s appeal is only an abuse of process of law as the adjudicating authority has determined duty liability against the respondent. The duty has been enjoyed by the appellant themselves how can demand interest from others. Therefore, I do not find any infirmity in the impugned order and the same is upheld,” the CESTAT while dismissing the revenue’s appeal said.

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Govt. revises Import policy for Tur / Pigeon Peas, Moong & Urad to Free [Read Notification]

The Government has notified the revised Import policy for Tur /Pigeon Peas (Cajanus Cajan), Moong (Beans of the SPP Vigna Radiata (L.) Wilczek) and Urad (Beans of the SPP Vigna Mungo (L.) Hepper) from ‘Restricted’ to ‘Free’.

The import consignments of the items namely Tur /Pigeon Peas, Moong [Beans of the SPP Vigna Radiata, and Urad with Bill of Lading issued on or before 31st October 2021 shall not be allowed by Customs beyond 30th November 2021.

The Government has notified the revised Import policy with immediate effect and for the period up to 31st October 2021.

Firstly, the import policy of Tur /Pigeon Peas (Cajanus Cajan) with the exim code 0713 60 00 has been revised from  ‘Restricted’ to ‘Free’.

Secondly, the import policy of Moong (Beans of the SPP Vigna Radiata (L.) Wilczek) with the exim code 0713 31 90 has been revised from  ‘Restricted’ to ‘Free.

Thirdly, the import policy of Urad (Beans of the SPP Vigna Mungo (L.) Hepper) with the exim code 0713 3110 has been revised from  ‘Restricted’ to ‘Free.

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GST Authorities can’t deny Revocation of GST Registration for alleged incorrect ITC availment: Madras High Court [Read Order]

The Madras High Court ruled that the GST Authorities can not deny Revocation of GST Registration for alleged incorrect availment of Input Tax Credit (ITC).

The petitioner, Ramakrishnan Mahalingam was issued a GST Registration Certificate on August 02, 2018, effective from July 1, 2017. A Show Cause Notice dated July 22, 2019, was issued to the Petitioner, by the State Tax Officer, GST calling upon the Petitioner to show cause as to why the GST registration should not be cancelled since the Petitioner had not filed returns for a continuous period of six months. Thereafter, the GST registration of the Petitioner was canceled on September 16, 2019.

As against the order of cancellation, two applications were filed by the Petitioner for revocation of cancellation of registration under Section 30 of the CGST Act, which were rejected vide order dated July 24, 2020 and September 09, 2020 respectively due to non-compliance of the Petitioner to SCN issued and due to outstanding interest on belated payment of tax dues and for allegedly wrongful claim of ITC respectively.

Subsequently, an appeal before Deputy Commissioner was filed by the Petitioner against the order dated July 24, 2020. However, Respondent rejected the appeal of the Petitioner and issued the deficiency memo, on the grounds that the ITC availed by the Petitioner for various periods was ineligible and further instructed the Petitioner, to remit the amount due in order to have the appeal admitted.

The single judge bench of Justice Anita Sumanth said that registration will not be revived since the petitioner has incorrectly availed that ITC would be putting the cart before the horse. In fact, it is seen that the petitioner has filed monthly returns as well as annual returns for the periods January 2017-18 to September 2019-20 and for financial years 2017-18 and 2018-19 and has also remitted late fee for filing of belated returns.

Thus, and these being the only conditions that are to be satisfied by the petitioner for grant of revocation of registration, the court opined that the cancellation of the registration, in this case, is incorrect and improper.

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All you need to know about Filing of Income Tax Return of Deceased Person and Consequence of Non-Filing

We all know the rules and regulations about filing Income Tax Return when we are alive. However, many of us do not know what the Income Tax rule states in case of the death of the taxpayer. It is common that after the death of the taxpayer, his/her spouse, legal heirs, or family members never filed an IT return. But it is the responsibility of the spouse, legal heirs, or family members to file the IT Return

Section 159 of the Income Tax Act, 1961 elaborates that if a person dies, then his legal representatives shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in a similar manner and to the same extent as the deceased.

The Legal Heir of the deceased are bound to register themselves as the representative of the deceased with the income tax department. They must send a request to the e-filing administrator. Once the request for registration as the legal heir is approved, they can file returns on behalf of the deceased.

Legal heirs will also need to surrender the deceased PAN card. For this, they need to write an application to the assessing officer (AO) under whose jurisdiction PAN is registered. The letter should contain reasons for surrender – the death of the holder, name, PAN, date of birth of the deceased, and a copy of the death certificate.

How to register as legal heir?

The legal heir has to register at the income tax website as a legal heir.  For this, we should know who the legal heir is and the procedure to register as a legal heir on the government income tax website. Registration as a legal heir is mandatory for e-filing of return on behalf of the deceased person. The PAN of both the deceased person and legal heir should be registered in the e-filing portal.

However, if the deceased person PAN is not registered, then the legal heir can register on behalf of the deceased. Following are the steps for the registration of Legal heir:

Step 1 – Go to the income tax department e-filing portal.

Step 2 – Login to e-filing portal using legal heir credentials 

Step 3 – Go to My Account and register as Representative.

Step 4 – Select the type of Request – New Request, Select the Add/Register as representative – “Register yourself on behalf of another person” and Select the category to register as Estate of deceased.

What are the documents required?

The Documents required are Copy of Death Certificate, Copy of the PAN Card of the deceased, Self-Attested PAN card Copy of the Legal heir, Legal Heir Certificate, The size of the zip file must not exceed 1 MB. Click submit and you will get the Acknowledgement from the department with a transaction ID.

What is the Tax liability of the legal heir?

It is noteworthy that Legal heir is not responsible to pay the income tax dues from his own pocket. But he is liable to pay the dues on behalf of the deceased income or assets. The legal heirs are liable up to the extent of the assets that they inherit.

For Example, Mr.X died with an asset as an FD worth Rs.1, 00,000. However, his tax liability is Rs.1, 50,000. In that case, his legal heirs are responsible to pay only Rs.1, 00,000 but not for the remaining dues of Rs.50, 000.

Yet another question that arises is that to what extent the legal heir is responsible for the penalty, fine, or interest on the deceased?

The legal heir is responsible for the tax payable, and also for the other sum i.e. penalty, fine, or interest which the deceased would have been liable had he not died. It means that the penalty proceedings for default by the deceased can also be initiated against the legal heir. However, his liability would be limited to the extent of the assets inherited from the deceased.

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ICSI extends deadline of ECSIN and UDIN Amnesty Scheme, 2021

The Institute of Company Secretaries of India (ICSI) notified the extension of ICSI ECSIN and UDIN Amnesty Scheme, 2021 till May 31, 2021.

The Institute had introduced the ICSI ECSIN Amnesty Scheme, 2021 considering the practical problems and other difficulties being faced by the members due to Covid- 19 pandemic that led to default in certain cases in generation/rectification/revocation of ECSIN. This Amnesty Scheme provided an opportunity to the members for rectification of defaults relating to ECSIN. The Amnesty Scheme was effective from 20th April, 2021 to 15th May, 2021.

Keeping in view the persisting situations in the Country due to COVID 19 whereby members may themselves got affected or some of their family member/close associates may be requiring attention in this difficult time, it has been noticed by the Institute the members were not in a position to avail the benefit under the Amnesty Scheme.

The Institute in view of the unprecedented conditions has decided to extend the ICSI ECSIN and UDIN Amnesty Scheme 2021 till May 31, 2021.

The UDIN Amnesty Scheme, 2021 facilitates the revocation of UDIN not in use, modification in UDIN details, generation of UDIN if missed earlier, completion of online process, no fees, immunity from Disciplinary Proceedings and one time limited period opportunity.

The ECSIN Amnesty Scheme, 2021 helpd in generation of ECSIN if not yet generated, update information, revoke ECSIN if the employment has ceased, rectify the details.

All active ECSIN generated from the effective date of ECSIN Guidelines i.e. 1st October 2019 and to be generated upto the validity of the scheme i.e. 31st May 2021 shall be eligible for the purpose of this Scheme. Other conditions of the Amnesty Scheme shall remain the same.

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ITAT remands matter back to CIT(A) for determining Tax Liability arising on Assessee Trust on premise of Non-Availability of Registration u/s 12A

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench remanded the matter back to CIT(A) for determining tax liability arising on the assessee trust on the premise of non-availability of registration under section 12A of the Income Tax Act, 1961.

The assessee, Ahmedabad Sthanik Trivedi Mevada Brahman Gnati Trust is a society registered under Societies Registration Act, 1960. It was constituted as a society in the nature of public trust and registered under the Bombay Charitable Trust Act, 1950. The said society is created with the object and purpose of ameliorating Trivedi Mevada Brahmin residing in the city of Ahmedabad in the area of education and culture which is defined exhaustively in the trust deed.

The return was filed by the trust claiming exemption under section 11 or 12 which was denied in the intimation processed under section 143(1) in the absence of registration obtained under s.12A of the Act. The CIT(A) has also confirmed the action taken under s.143(1) of the Act for want of registration under section 12A of the Act. It was thus held by the Revenue that income of the unregistered trust is susceptible to be taxed at the maximum marginal rate under section 267B of the Act as applicable to Association of Person (AOP). The status of the assessee was thus reckoned as AOP for the purposes of determination of tax liability.

The coram of Madhumita Roy and Pradip Kumar Khedia found merit in the plea of the assessee for admission of additional evidence. It is a matter of fact that the Income Tax Department itself has issued a certificate under section 12AA of the Act registering the assessee for the purposes of Section 11 or 12 of the Act. The delinquency in non-production of registration before CIT(A) is therefore viewed benignly. The additional evidence in the form of order under section 12AA of the Act is therefore admitted by the Tribunal for adjudication of the dispute.

The ITAT ruled that the order under section 12AA of the Act was not presented before the first appellate authority for its consideration, the ITAT refrained from expressing our view on the merits of the eligibility of deduction under section 11or 12 of the Act. The impugned orders of the CIT(A) are thus set aside and the issue is restored back to the file of the CIT(A) for de novo adjudication in accordance with law after taking into account the order passed granting registration under section 12AA of the Act. It shall be open to the assessee to furnish such evidence and explanations as made deemed necessary towards justification of claim of benefit before the first appellate authority and for the purpose of determination of issue.

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CA/CMA vacancy in Abhinav Sahakari Bank

The Abhinav Sahakari Bank has invited applications for the post of Assistant General Manager.

The Abhinav Sahakari Bank Limited is established in 1976 at Dombivli East opposite Railway Station. Founder, Dr. Dattatraya Madhav Munshi, MA, M.Com., LLM, MBA, Ph.D. started the Bank with a view to a high level of commitment towards the development and progress of the lower and middle-class sections of society.

Qualifications:

Pay scale: Attractive package will be offered to the deserving candidates

Interested candidates fulfilling the eligibility criteria may send their applications with complete details to admin@abhinavbank.com

Job Type: Full Time

Location: Dombivli, Maharashtra.

For more details and to apply, click here:

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Income Tax: PCIT can’t expand Limited Scrutiny while invoking Revisional Jurisdiction, says ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Delhi Bench ruled that the addition against the wife cannot be made solely relying upon statements of the husband recorded under section 131 of Income Tax Act, 1961.

The assessee, Sunita Gadde filed return of income declaring income of Rs.38,82,621/-. In this case information was received that during the course of survey conducted on the above assessee as well as other Group Promoter of Lingaya Group Society, various incriminating documents were found, examined and impounded.

As per investigation reports received, Assessee had paid a consideration of Rs.3.15 crores towards purchase cost of farm house. The seller Smt. Jaya Sharma stated the fact on oath during the course of her deposition under section 131 of the Income Tax Act, 1961, that both have paid Rs.3.15 crores towards purchase cost and out of the total amount of Rs.3.15 crores, Rs.2.10 crores were paid in cash and balance amount of Rs.1.05 crores were paid through cheque. Smt. Jaya Sharma furnished a letter addressed to DDIT (Inv.) that she would pay taxes on that.

Accordingly, reasons were recorded for reopening of the assessment and notice under section 148 was issued. The assessee filed letter before AO intimating that original return filed may be treated as return having filed in response to notice under section 148. The assessee filed objections to the reopening of the assessment before AO which have been rejected.

The assessee has stated that she had purchased the property for Rs.1.05 crores and has not paid any other amount for purchase of this agricultural land. The A.O. did not accept the contention of the assessee in view of the statement recorded of Jaya Sharma under section 131 that assessee and her husband have paid cash to her. The A.O. also noted that husband of the assessee Picheswar Gadde who is also co-owner of 50% share in the property in his statement recorded during the course of survey admitted that he has sold the property to M/s. Mapple Destination Dreambuilt P. Ltd., for an amount of Rs.6.61 crores, out of which, part amount was paid through cash and part was paid through cheque and admitted to pay taxes thereon.

The assessee challenged the addition before the CIT(A) as well as the reopening of the assessment. The assessee also contended before the CIT(A) that no right of cross-examination had been given to the statement of Jaya Sharma which is recorded at the back of the assessee and used against the assessee, therefore, it cannot be read in evidence against the assessee.

The CIT(A) rejected the contention of assessee as well as rejected the contention of assessee that no right of cross-examination has been given to the statement of Jaya Sharma because it is not an absolute right of assessee. The appeal of assessee was accordingly dismissed.

The Coram of O.P.Kant and Bhavnesh Saini clarified that it is well settled Law that any material collected at the back of the assessee or any statement recorded at the back of the assessee cannot be read in evidence against the assessee unless the same is confronted to the assessee and that assessee should be allowed to cross-examine to such statements.

The ITAT observed that the AO has failed to produce Jaya Sharma before assessee for cross-examination on behalf of the assessee particularly when Smt. Jaya Sharma has retracted from her statement.

Therefore, the Tribunal held that it was the duty of the AO to produce Jaya Sharma at the reassessment proceedings to allow cross-examination to her statement on behalf of the assessee, so such statement and material collected at the back of the assessee, cannot be read in evidence against the assessee.

“The statement of the husband of the assessee and Shri Rakesh Sejwal are not relevant to the matter in issue and as such, they cannot be the basis for making any addition against the assessee in the assessment year under appeal. Considering the totality of the facts and circumstances of the case it is clear that there was no basis for the A.O. to make any addition against the assessee of Rs.1.05 crores,” the ITAT added.

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Income Tax: Addition against Wife can’t be made solely relying upon Statement of Husband Recorded u/s 131, rules ITAT

The Income Tax Appellate Tribunal (ITAT), Delhi Bench ruled that the addition against the wife cannot be made solely relying upon statements of the husband recorded under section 131 of Income Tax Act, 1961.

The assessee, Sunita Gadde filed return of income declaring income of Rs.38,82,621/-. In this case information was received that during the course of survey conducted on the above assessee as well as other Group Promoter of Lingaya Group Society, various incriminating documents were found, examined and impounded.

As per investigation reports received, Assessee had paid a consideration of Rs.3.15 crores towards the purchase cost of the farmhouse. The seller Smt. Jaya Sharma stated the fact on oath during the course of her deposition under section 131 of the Income Tax Act, 1961, that both have paid Rs.3.15 crores towards purchase cost and out of the total amount of Rs.3.15 crores, Rs.2.10 crores were paid in cash and balance amount of Rs.1.05 crores were paid through cheque. Smt. Jaya Sharma furnished a letter addressed to DDIT (Inv.) that she would pay taxes on that.

Accordingly, reasons were recorded for reopening of the assessment and notice under section 148 was issued. The assessee filed letter before AO intimating that original return filed may be treated as return having filed in response to notice under section 148. The assessee filed objections to the reopening of the assessment before AO which have been rejected.

The assessee has stated that she had purchased the property for Rs.1.05 crores and has not paid any other amount for purchase of this agricultural land. The A.O. did not accept the contention of the assessee in view of the statement recorded of Jaya Sharma under section 131 that assessee and her husband have paid cash to her. The A.O. also noted that husband of the assessee Picheswar Gadde who is also co-owner of 50% share in the property in his statement recorded during the course of survey admitted that he has sold the property to M/s. Mapple Destination Dreambuilt P. Ltd., for an amount of Rs.6.61 crores, out of which, part amount was paid through cash and part was paid through cheque and admitted to pay taxes thereon.

The assessee challenged the addition before the CIT(A) as well as reopening of the assessment. The assessee also contended before the CIT(A) that no right of cross-examination had been given to the statement of Jaya Sharma which is recorded at the back of the assessee and used against the assessee, therefore, it cannot be read in evidence against the assessee.

The CIT(A) rejected the contention of the assessee as well as rejected the contention of the assessee that no right of cross-examination has been given to the statement of Jaya Sharma because it is not an absolute right of the assessee. The appeal of the assessee was accordingly dismissed.

The Coram of O.P.Kant and Bhavnesh Saini clarified that it is well settled Law that any material collected at the back of the assessee or any statement recorded at the back of the assessee cannot be read in evidence against the assessee unless the same is confronted to the assessee and that assessee should be allowed to cross-examine to such statements.

The ITAT observed that the AO has failed to produce Jaya Sharma before assessee for cross-examination on behalf of the assessee particularly when Smt. Jaya Sharma has retracted from her statement.

Therefore, the Tribunal held that it was the duty of the AO to produce Jaya Sharma at the reassessment proceedings to allow cross-examination to her statement on behalf of the assessee, so such statement and material collected at the back of the assessee, cannot be read in evidence against the assessee.

“The statement of the husband of the assessee and Shri Rakesh Sejwal are not relevant to the matter in issue and as such, they cannot be the basis for making any addition against the assessee in the assessment year under appeal. Considering the totality of the facts and circumstances of the case it is clear that there was no basis for the A.O. to make any addition against the assessee of Rs.1.05 crores,” the ITAT added.

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GST: Form GSTR-2B for April, 2021 to be generated on May 29, 2021, says GSTN

The Goods and Services Tax Network (GSTN) stated that since the last date of filing Form GSTR-1 for April 2021 has been extended up to May 26, 2021, and IFF up to May 28, 2021, the Form GSTR-2B for April 2021 shall be generated on May 29, 2021.

The GSTR-2B statement features details on the import of goods fetched from the ICEGATE system including details of inward supply of goods from Special Economic Zone units/developers. However, It is not included in the released version of GSTR-2B for the month of July but it will be made available soon.

GSTR-2B is an auto-drafted ITC statement that will be generated for every registered person on the basis of the information furnished by his suppliers in their respective GSTR-1/IFF, GSTR-5 (non-resident taxable person), and GSTR-6 (input service distributor). The statement will indicate the availability of input tax credit to the registered person against each document filed by his suppliers.

GSTR-2B is a static statement and will be made available for each month on the 14thday of the succeeding month. For example, for the month of July 2020, the statement will be generated and made available to the registered person on 14th August 2020.

However, due to the Covid pandemic, the last date of filing Form GSTR-1 for April, 2021 has been extended up to May 26, 2021.

The GSTR-2B consists of the Summary statement showing ITC available and non-available for every section, Advisory for every section that clarifies the kind of action that taxpayers must take, Document-wise details such as invoices, credit notes, debit notes, etc. to view and download, Cut-off dates and advisory for generating and using GSTR-2B, and Import of goods and import from SEZ units/developers.

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Creditors can’t initiate proceedings to Recover Claims which are not part of approved Resolution Plan under IBC: NCLAT [Read Order]

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench ruled that Creditors cannot initiate proceedings to recover claims which are not part of the approved resolution plan.

The Corporate Debtor M/s GVR Infra Projects Limited had defaulted in payment of dues/damages/interest, including employees share of contributions, since April 2014, which were deducted from their wages. The total EPF dues up to the date are to the tune of Rs.2,84,69,797/-.

The Adjudicating Authority had vide its Order dated October 15, 2018, initiated CIR Process against the Corporate Debtor ‘GVR Infra Projects Limited’. Under the same, the Interim Resolution Professional (IRP) issued a public announcement inviting claims pending against the Corporate Debtor. The Interim Resolution Professional was subsequently replaced by Respondent, appointed as the Resolution Professional (RP).

The Appellant submitted its claims in Form ‘F’, as suggested by the IRP vide his letter dated December 31, 2018. The claim Form ‘F’ was forwarded to the Resolution Professional on January 7, 2019. The RP, vide an email dated May 10, 2019, asked the Appellant to submit its claim and the supporting documents in Form ‘B’ again. In response to that, the Appellant submitted the claim in Form ‘B’, under protest to RP, along with all supporting documents vide its letter dated May 22, 2019.

The Appellant contended that waving off the Provident Fund dues is not only the violation of Section 11 of the Employees Provident Fund Act (EPF Act), which lays down the priority of charge of Provident Fund dues but also a violation of Section 36 (4) (a) (iii) and Section 30 (2) (e) of the Insolvency and Bankruptcy Code 2016 which lays down that the Provident Fund dues are outside Liquidation Estate.

The Corporate Insolvency Resolution Process against the Corporate Debtor ‘GVR Infra Projects Limited’ was initiated by the Adjudicating Authority vide Order dated October 15 2018. After that, IRP/RP was appointed. During the CIRP under the public announcement, the Appellant submitted the claim in Form ‘B’ for an amount of Rs.1,95,01,301/-about the outstanding Provident Fund dues to RP admitted in total.

The coram of Judicial Member, Justice Venugopal M., and Technical Member V. P. Singh held that once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of the resolution plan by the Adjudicating Authority, all such claims, which are not a part of the resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan.

The NCLAT held that all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be continued.

“The Appellants claim about Provident Fund dues amounting to ₹1,95,01,301/-, which was earlier raised at the time of initiation of CIRP and was later admitted, stood frozen and will be binding (Emphasis supplied) on all the Stakeholders, including the Central Government. After approval of the Resolution Plan by the Adjudicating Authority, all such claims that are not part of the Resolution Plan shall stand extinguished. No person is entitled to initiate or continue any proceeding regarding a claim that is not part of the Resolution Plan,” the NCLAT said.

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Gujarat High Court grants Bail to alleged kingpin of GST Evasion to tune of Rs 6.60 Cr [Read Order]

The Gujarat High Court granted the bail to the alleged kingpin of GST Evasion to the tune of Rs. 6.60 Crores.

The applicant, Suprimkumar Jitendra Kumar Patel was taken into custody on December 4, 2020 at Unjha and then taken to GST Office at Rajyakar Bhawan, Ashram Road, Ahmedabad, and has been shown arrested by the State Tax Officer,, in connection with the alleged offence punishable under sections 132(1)(a) of the CGST Act and the CGST Act by exercising powers under section 69 of the CGST Act and the GST Act. It is alleged that the applicant had generated e­way bills of 16 firms by concealing the identity of the real purchaser and real seller and has caused a huge revenue loss to the tune of Rs.9.60 crores by evading tax.

Advocate Mr.Pandya appearing for the applicant has submitted that the offense is triable by the Court of Magistrate under Section 138 of the CGST and the maximum imprisonment punishable is for five years. He has invited the attention of this Court to the complaint being Case filed before the Court of Additional Chief Metropolitan Magistrate on 04.02.2021. He has referred to the various contents of the complaint and has submitted that in fact, it reveals that the applicant is wrongly roped in all 16 firms, whereas prima facie it appears that the name of the applicant is only disclosed in 04 firms.

It is also submitted that the total amount of evasion of tax of such firms would come to around Rs.1,60,00,000­ and the applicant is ready and willing to deposit some amount as determined by this court. It is submitted that now the investigation is over and hence, the applicant may be released on bail.

Vehemently opposing the present application, learned Public Prosecutor Mr.Mitesh Amin has submitted that in fact, this is a huge scam running into crores of rupees. He has submitted that there are 63 firms connected with the applicant which have forged 1511 bills running into Rs.1,44,00,000­. He has submitted that there is no co­operation of the applicant in the investigation. Learned Public Prosecutor has also invited the attention of this court to the investigation papers and has submitted that though various questions were put to the applicant, no satisfactory answers are given. It is submitted that the FSL had also extracted the data from the mobile of the applicant, wherein the names of various fictitious firms have been revealed, however, the applicant has not given any satisfactory answer to the investigating authority with regard to his involvement with the aforesaid firms. Thus, he has submitted that looking at the role of the applicant and the loss of the tax revenue, he may not be released on bail.

The single judge bench of Justice A. S. Supehia allowed the bail on executing a personal bond of Rs.10,000 with one local surety of the like amount to the satisfaction of the learned Trial Court and subject to various conditions.

Firstly, the petitioner not take undue advantage of liberty or misuse liberty.

Secondly, the petitioner must not act in a manner injurious to the interest of the prosecution.

Thirdly, the petitioner must surrender his passport, if any, to the lower court within a week.

Fourthly, not leave the State of Gujarat without prior permission of the concerned Trial Court.

Fifthly, mark presence before the concerned Police Station on alternate every Monday for initial six months and thereafter, on alternate Monday of every English calendar month, for a period of six months, between 10:00 a.m. and 2:00 p.m.

Sixthly, furnish latest address of residence to the Investigating Officer and also to the Court at the time of execution of the bond and shall not change the residence without prior permission of the Trial Court;

Lasly, deposit an amount of Rs.10,00,000 within a period of 10 days before the trial Court from the date of receipt of writ of this order.

“On depositing the aforesaid amount, the applicant shall be released on bail. The applicant shall file an undertaking that the remaining amount of Rs.30,00,000 shall be deposited within a period of 12 (twelve) weeks. It goes without saying that if the applicant does not abide by the conditions imposed by this Court, the bail will stand automatically cancelled,” the court-ordered.

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Major Relief to SAIL: Cenvat Credit not to be reversed on Waste or by-product generation during manufacturing, rules CESTAT [Read Order]

In a major relief to Steel Authority of India Limited (SAIL) ruled that the Cenvat credit should not be reversed on waste or by-product generation during manufacturing.

The appellant, M/s. Steel Authority of India Limited is an integrated steel plant that manufactures various iron, steel and allied products falling under various Chapter Headings of the First Schedule to the Central Excise Tariff Act, 1985 at its said steel plant in Durgapur, West Bengal. The appellant has five coke oven batteries, each having 78 ovens and one coke oven having a battery of 39 ovens which are used to convert coal into coke. During the process of conversion of coal into coke, at very high temperatures, Coke Oven Gas (CO gas), a very poisonous and harmful gas is generated. Hence it is not permitted to be let out in the air as per environmental law.

Although according to the appellant the provisions of Rule 6(2) & (3) of the Cenvat Credit Rules are not applicable in respect of ammonium sulphate, since it is a byproduct though exempted, in order to avoid any future dispute, the appellant, after coming into force of the provisions of substituted Rule 6(3) and the newly inserted Rule 6(3A) in the Cenvat Credit Rules with effect from April 1, 2008, exercised option in terms of Rule 6(3)(ii) of the Cenvat Credit Rules and reversed cenvat credits on all common inputs used in or in relation to the manufacture of dutiable products and exempted goods, including ammonium sulphate, and paid, by way of reversal, cenvat credit attributable to inputs in or in relation to the manufacture of exempted goods, including ammonium sulphate and CO gas, in terms of Rule 6(3A) of the Cenvat Credit Rules, from the financial year 2008-09 onwards.

Cenvat credit attributable to inputs used in or in relation to the production of the exempted goods were paid by way of reversal. The appellant continued to exercise the said option under Rule 6(3)(ii) for subsequent financial years also. From the year 2009-10, the appellant also included common input services for reversal. There was no common input service used during the earlier years.

A show-cause notice was issued by the Additional Commissioner, alleging that the appellant had manufactured and cleared an exempted product, Coke Oven Gas, falling under Tariff Item 27050000 of the Central Excise Tariff which had been manufactured using different common cenvatable inputs and input services but without maintaining separate accounts as required under Rule 6(2) of the Cenvat Credit Rules and without payment of amounts as required under Rule 6(3)(i) of the Cenvat Credit Rules and called upon the appellant to show cause as to why a sum of Rs. 11,79,415/-, being 5% of the value of the said goods, should not be demanded and recovered from the appellant, along with interest, for the period August 2010 to March 2011 in respect of ammonium sulphate cleared during the said period and why penalty should not be imposed upon the appellant.

The coarm of P.K.Choudhary noted sulphur dioxide, emerging as an inevitable technological necessity during calcinations of ore concentrates for the production of zinc and copper (like coke oven gas in the instant case), was converted to sulphuric acid as a non-polluting measure and sold to fertilizer manufacturers. Given quantity of zinc concentrate resulted in the emergence of zinc sulphate and sulphur dioxide, according to the chemical formula on which the assessee had no control. Though sulphuric acid as an end product (ammonium sulphate in the instant case) was liable to ad valorem duty, under exemption notification, it was liable to nil duty for use in the manufacture of fertilizers.

Therefore, the CESTAT held that sulphuric acid was only a by-product, and conversion of sulphur dioxide (in the instant case ammonium sulphate) to sulphuric acid (mother ammonia liquor in the instant case) could not elevate sulphuric acid to the status of the final product.

The Tribunal deleted the demands of Rs. 11,79,415/- and Rs. 26,94,800/- respectively against the appellant, under Rule 14 of the Cenvat Credit Rules, 2004 and Explanation II of Rule 6(3)(b) of the Cenvat Credit Rules, along with interest thereon under Rule 14 of the Cenvat Credit Rules read with Section 11AB of the Central Excise Act, 1944 and imposing equivalent amount of penalties upon the appellant under Rule 15(2) of the Cenvat Credit Rules.

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GST: Input Tax Credit Refund can’t be denied for Technical Glitches in GSTN Software, says Madras High Court [Read Order]

The Madras High Court ruled that refund of Input Tax Credit (ITC) cannot be denied for technical glitches in GSTN software.

The Petitioner, Tvl. Mehar Tex is an exporter and has made zero-rated sales during the months of October 2017, November 2017, and February 2018. Accordingly, Petitioner stated that he is entitled to refund claims of SGST for the October month, CGST for the November month, and CGST, SGST, and IGST for the February month. However, when the refund applications were uploaded, the entire claim got consolidated and figured under the head SGST alone.

While considering the refund applications, the Respondent, the Assistant Commissioner of GST and Central Excise restricted the refund claim to the extent of the Petitioner’s liability for the respective months only under the head of SGST under Rule 92 of the Central Goods and Services Tax Rules, 2017 and issued notice to show cause as to why refund of CGST and IGST should not be rejected. Subsequently, the Petitioner replied to the show cause notice stating that the entire refund claim got auto-populated under a single head of SGST.

However, the Respondent rejected the refund claims made in respect of  CGST and IGST on the ground that the Petitioner has not furnished any documentary proof in support of his claims.

The issue raised was whether the Petitioner’s claim for refund of CGST and IGST can be denied on the ground that the entire refund amount got consolidated under one head i.e. SGST, due to the technical error and new system of software in GSTN.

The Single Judge Bench of Justice G.R.Swaminathan set aside the order rejecting refund claim of CGST and IGST of the assessee wherein, the entire refund liability of Input Tax Credit got auto-populated under a single head i.e. State Goods and Services Tax instead of SGST, Central Goods and Service Tax and Integrated Goods and Services Tax.

The court held that, if the assessee was otherwise eligible to refund, the refund claim ought not to be denied on the ground of technical glitches and error occurred due to auto-population in Goods and Service Tax Network software. Nothing can be more unfair.

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CBDT notifies Income Tax Exemption to Pension Funds of Various Entities [Read Notification]

The Central Board of Direct Taxes (CBDT) has yesterday issued a notification allowing income tax exemption to various funds under section 10(23EF) of the Income Tax Act, 1961.

The Board, on Thursday issued a catena of notifications allowing exemption to Pension Fund of OMERS Administration Corporation (AC), sovereign wealth fund a.k.a the Ministry of Economy and Finance (of the Republic of Korea), Public Sector Pension Investment Board, Government Employees Superannuation Board, sovereign wealth fund, a.k.a the CDC Group Plc, and the pension fund of the Public Sector Pension Investment Board.

The Governmentlast year set out additional conditions and the relevant procedure for foreign pension funds to obtain the exemption from income tax on certain income from qualifying investments in an Indian infrastructure enterprise, which is available as from financial year 2020-21.

The exemption is subject to the following conditions;

(i) the assessee shall file return of income, for all the relevant previous years falling within the period beginning from the date in which the said investment has been made and ending on the date on which such investment is liquidated, on or before the due date specified for furnishing the return of income under subsection (1) of section 139 of the Act; (ii) the assessee shall furnish along with such return a certificate in Form No. 10BBC in respect of compliance to the provisions of clause (23FE) of section 10, during the financial year, from an accountant as defined in the Explanation below sub-section (2) of section 288 of the Act, as per the provisions of clause (vi) of rule 2DB of the Income-tax Rules, 1962; (iii) the assessee shall intimate the details in respect of each investment made by it in India during the quarter within one month from the end of the quarter in Form No. 10BBB, as per the provisions of clause (v) of rule 2DB of the Income-tax Rules, 1962; (iv) the assessee shall maintain a segmented account of income and expenditure in respect of such investment which qualifies for exemption under clause (23FE) of section 10 of the Act; (v) the assessee shall continue to be regulated under the law of the Government of Ontario, Canada; (vi) the assessee shall be responsible for administering or investing the assets for meeting the statutory obligations and defined contributions of one or more funds or plans established for providing retirement, social security, employment, disability, death benefits or any similar compensation to the participants or beneficiaries of such funds or plans, as the case may be; (vii) not more than ten per cent. of the total value of the assets administered or invested by the assessee are allowed for the purpose other than the purpose listed at clause (vi) provided such assets are wholly owned directly or indirectly by the Government of Ontario, Canada and such assets vest in the Government of Ontario, Canada upon dissolution; (viii) the earnings and assets of the assessee should be used only for meeting statutory obligations and defined contributions for participants or beneficiaries of funds or plans referred to in clause (vi) and no portion of the earnings or assets of the pension fund inures any benefit to any other private person; barring any payment made to creditors or depositors for loan or borrowing [as defined in sub-clause (b) of clause (ii) of Explanation 2 to clause (23FE) of section 10 of the Act] taken for the purposes other than for making investment in India; (ix) the earning from assets referred to in clause (vii) may be used for purpose other than the purpose listed as in clause (viii) provided that the said earnings are credited either to the account of Government of Ontario, Canada or any other account designated by such Government so that no portion of the earnings inures any benefit to any private person; (x) the assessee shall not have any loans or borrowings [as defined in sub-clause (b) of clause (ii) of Explanation 2 to clause (23FE) of section 10 of the Act], directly or indirectly, for the purposes of making investment in India; and (xi) the assessee shall not participate in the day to day operations of investee [as defined in clause (i) of Explanation 2 to clause (23FE) of section 10 of the Act] but the monitoring mechanism to protect the investment with the investee including the right to appoint directors or executive director shall not be considered as participation in the day to day operations of the investee.

“Violation of any of the conditions as stipulated in the said clause (23FE) of section of the Act and this notification shall render the assessee ineligible for the tax exemption. 3. This notification shall come into force from the date of its publication in the Official Gazette,” the notification said.

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Railway liable to pay Service Tax on Licensee Fee collecting from Parking Area Contractors: Madras High Court [Read Judgment]

The Madras High Court held that the Railway is liable to pay service tax to the GST Department by collecting from the contractors in respect of the license fee.

The petitioners are Contractors, who were granted license to run parking areas for vehicles in the Railway premises by the Southern Railway. All the writ petitioners participated in the tender process and were successful in the tender and entered into an agreement with the Southern Railway, agreeing certain terms and conditions stipulated.

The agreement for manning the vehicle parking stand in Railway Stations were admittedly signed by all the writ petitioners, who all are Contractors and all the writ petitioners could pay the license fee as per the terms and conditions.

The writ petitioners had agreed for the terms and conditions stipulated in the agreement and as per the said agreement, the licensee shall pay during the continuance of the license all cesses, rates, water charges, taxes and other charges or taxes in respect of the said premises. Thus, it is made clear and further admitted that they are liable to pay taxes as admissible.

The petitioners informed that the period of license already expired, except in few cases, in respect of all these writ petitions. However, in respect of expired license, the respondent-Southern Railways is not refunding the deposit amount and therefore, they are constrained to move the present writ petitions. The deposits are not refunded on the ground that they are liable to pay CGST/SGST at 18% as per the terms and conditions of the agreement.

The petitioner while relying on Section 32 of the CGST Act and sub-clause (2) to Section 32 which stipulates that “no registered person shall collect tax except in accordance with the provision of this Act or the Rules made thereunder” urged that when there is no provision to collect the GST from the contractors on the license fee, then the terms and conditions of the agreement become null and void and therefore, the conditions imposed in the agreement would not be binding on the contractors.

The petitioners questioned the demand made by the Southern Railway to pay 18% of GST in respect of the license fee granted to the Private Contractors to run parking of vehicles.

The single Judge bench of Justice S.M.Subramaniam said that the provisions of the CGST Act are crystal clear that the services rendered are liable for payment of service tax and more specifically, with reference to Section 7 r/w Schedule II, the services rendered by the Railways to the writ petitioners/contractors and the writ petitioners/contractors to the end-users, are falling within the scope of Section 7 read with Schedule II of the CGST Act and therefore, all the writ petitioners are liable to pay tax, as applicable and as demanded by the Southern Railways.

The court observed that the Southern Railways is liable to pay service tax for the license fee collected from the respective contractors and the respective contractors are liable to pay service tax for the collections made from the end users/customers in respect of the parking slot services. Such contractors are bound to register their name under the CGST Act, by following the procedures contemplated therein.

“It is to be reiterated that the Southern Railways is bound to pay service tax on the license fee collected from the contractors for whom the license is granted to run vehicle parking in the premises of the Southern Railways and such contractors, who all are the licensees, are bound to register their names under the CGST Act and on such registration, they are bound to pay service tax for the parking fee collected from the end-users,” the court said.

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Know 10 MCA Forms providing Waiver of Additional Fee

The Ministry of Corporate Affairs (MCA) has notified that no additional fees shall be levied till July 31, 2021 if the due date for filing falls between April 1, 2021 to 31, May 2021 only in respect of 10 forms.

  1. Form CHG-1

No additional fees shall be levied on Application for registration of creation, modification of charge (other than those related to debentures).

  1. Form CHG-9

No additional fees shall be levied on application for registration of creation or modification of charge for debentures or rectification of particulars filed in respect of creation or modification of charge for debentures.

  1. FORM ADT-1

No additional fees shall be levied in respect of information to the Registrar by company for appointment of auditor.

  1. FORM INC-22

No additional fees shall be levied on notice of Situation or Change of situation of the Registered Office of the Company.

  1. FORM NDH-3

No additional fees shall be levied in respect of Return of Nidhi Company for the half year ended.

  1. FORM FC-4

No additional fees shall be levied in respect of Annual Return of a Foreign Company.

  1. FORM MSC-3

No additional fees shall be levied in respect of Return of dormant companies.

  1. FORM INC-27

No additional fees shall be levied in respect of Conversion of public company into private company or private company into public company.

  1. FORM NDH-2

No additional fees shall be levied in respect of application for extension of time.

  1. FORM-IEPF-3

No additional fees shall be levied in respect of Statement of shares and unclaimed or unpaid dividend not transferred to the Investor Education and Protection Fund.

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Cabinet approves MoU between ICAI and Qatar Financial Centre Authority

The Union Cabinet, chaired by Prime Minister Shri Narendra Modi has approved the signing of the Memorandum of Understanding (MoU) between the Institute of Chartered Accountants of India (ICAI) and the Qatar Financial Centre Authority (QFCA).

The MoU would enhance cooperation between the Institutes to work together to strengthen the Accounting profession and entrepreneurship base in Qatar.

Impact:

ICAI has a strong membership base of over 6000 members in Middle East and Qatar (Doha) Chapter is amongst the most vibrant Chapters of ICAI. ICAI members hold key positions in various private and public companies and are actively involved in support and development of the accounting profession in Qatar. The signing of this MoU would provide an additional impetus to prospects of the ICAI Members in the entire Middle Eastern Region to have better recognition, together with working to support Indian businesses desirous of doing business in Qatar and thus supporting the growth of Qatar and India’s economies.

Benefits:

ICAI has an active Chapter in Doha, Qatar which was established in the year 1981 and is the oldest among the 36 overseas Chapters of the ICAI. The membership of the Chapter has grown steadily since its founding days and presently has over 300 members who hold key positions in various private and public companies and are actively involved in support and development of the accounting profession in Qatar. This MoU will benefit Ministry of Corporate Affairs, Institute of Chartered Accountants of India and Qatar Financial Centre Authority.

Implementation strategy and Targets:

MoU will endeavourto  increase opportunities for members  of ICAI  to provide professional services through setting up practice for providing professional services in the State of Qatar in the areas of assurance and auditing, advisory, taxation, financial services and allied areas.

ICAI   shall   also nurture and develop local Qatar professionals, entrepreneurs and students through a specialized training programme, in collaboration with QFCA.

ICAI and QFCA will work together to explore the opportunities for Indian businesses in Qatar by organizing roundtables, networking events etc., as the case may be mutually agreed. 

ICAI and QFCA shall collaborate on opportunities that may arise in the fields of corporate governance, technical research, and advice, quality assurance, forensic accounting, issues for small and medium-sized practices (SMPs), Islamic Finance, Continuing Professional Development (CPD), and other subjects of mutual interest.

Background:

The Institute of Chartered Accountants of India (ICAI) is a statutory body established by an Act of Parliament of India, The Chartered Accountants Act, 1949′, to regulate the profession of Chartered Accountancy in India. Qatar Financial Centre Authority (QFCA) an independent legal entity established pursuant to Law No. (7) of 2005,is responsible for the development and promotion of the QFC as a world-class on-shore financial and business centre in the State of Qatar.

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Interest Income can’t be included in Total Income of Assessee as Mercantile System of Accounting in juxtaposition to ‘Real Income Theory’: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Pune bench ruled that Interest Income cannot be included in the total income of the assessee as a mercantile system of accounting in juxtaposition to ‘real income theory’.

The assessee, M/s. Nutan Warehousing Co. Pvt. Ltd. is a company engaged in the business of warehouse renting. The return of income was filed declaring total income of Rs.66,41,800/-. During the course of assessment proceedings, the Assessing Officer (AO) observed from 26AS data that the assessee had not shown interest from bank amounting to Rs.26,125/-.

An addition was made on this account, which came to be sustained in the first appeal.

The 26AS data revealed the assessee earning interest income of Rs.26,125/- from Rupee Co-op Bank Ltd., that was not disclosed. The bank had become defunct and no financial transactions were allowed. The RBI, vide its direction dated 21-02-2013, referred to on page 16 of the impugned order, banned the transactions of the bank. Due to such a ban, even the principal amount deposited by the assessee became doubtful of recovery, much less the interest in question that was not received.

The CIT(A) has gone with the accrual concept of income under the mercantile system of accounting and held that the interest once accrued became chargeable to tax notwithstanding its non- receipt.

The coram headed by the Vice President, R.S.Sayal noted that even the principal amount of deposit made by the assessee became irrecoverable. These facts indicate that the assessee did not receive any such interest income from Rupee Co-op Bank Ltd. whose functions were banned by the RBI.

The ITAT ruled that the mercantile system of accounting in juxtaposition to ‘real income theory’ in the facts and the circumstances of the instant case, the inescapable conclusion which follows is that the interest income of Rs.26,125/- cannot be included in the total income of the assessee for the year under consideration. Such an income may be appropriately charged to tax on the regularisation of the operations of the bank coupled with the possibility of receipt of income in foreseeable future. Insofar as the instant year is concerned, the ITAT holds that the interest cannot be charged to tax.

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