Three persons were arrested by Surat Police after executing a bogus raid on a textile store and extorted 12 lakh rupees from a businessman. One of the three of them was a Central Goods and Services Tax (CGST) superintendent, while the other two were imposters. The incident occurred on March 30, 2023. One of the…
National Company Law Appellate Tribunal (NCLAT) of Delhi composed of Justice Ashok Bhushan and Justice Barun Mitra upheld the subsequent reduction of the claim by Insolvency Resolution Professional (IRP). The Appellant actually filed the Section 7 application, which was granted. The Appellant submitted a claim for Rs. 6,52,42,330 in response to the IRP’s publication, and…
Institute of Companies Secretaries of India extended the deadline for Unique Document Identification Number (UDIN) Amnesty Scheme 2023 till April 15th 2023. The scheme will be effective till the said date. ICSI UDIN Guidelines, 2019 were approved and issued by the Council of the Institute of Company Secretaries of India in its 261st (Special) Meeting…
Online games are very popular now and the Central Government has made some changes to the technology related laws. As of now, we have the Information Technology Act, 2000. The Central Government (Ministry of Electronics and Information Technology) has notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 to amend…
The Division bench of Delhi Income Tax Appellate Tribunal (ITAT) has recently held that 10 percent Tax Deduction at Source would not applicable on common area maintenance charges. Assesee Paramount Restaurants Pvt. Ltd filed the appeal before the tribunal against the order of the first appellate authority CIT (A) against the assessment order passed under…
The High Court of Orissa refused to frame issues on the deletion of a claim by the assessee in respect of providing for Dam maintenance by Orissa Hydro Power since it was decided against the revenue. M/s. Orissa Hydro Power Corporation Ltd., the petitioner filed an appeal challenging the common order dated 22nd June 2022…
In a significant move, the Supreme Court has held in Income Tax Officer vs Vikram Sujitkumar Bhatia that the Income Tax Assessing Officer can initiate proceedings under Section 153C of the Income Tax Act, 1961 against non-searched persons, even for searches conducted prior to the amendment in 2015, i.e., before The revenue preferred the present…
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has recently held that complete absence of notice could not be cured by invoking Section 292BB of Income Tax Act 1961. Section 292BB of Income Tax Act states that when a notice was issued under any provision of the act shall be deemed to have…
The Delhi Income Tax Appellate Tribunal (ITAT), while deleting orders against Marks and Spencer India recently found that the income tax department derived Arm Length Price (ALP) without resorting to methods prescribed under the Income Tax Rules.
Ravi Sharma, Advocate appeared for assessee and Bhaskar Goswami appeared for the revenue.
Assesee Marks & Spencer (India) Pvt. Ltd. engaged in the wholesale business of procuring and selling branded apparels and accessories including leather products and toiletries.
Under the trading business of the Assessee , it procures branded apparels and accessories from third party suppliers who manufactures for and on behalf of it, for further resale to affiliate joint venture entities in India.
The Assessee had entered into an agreement with Marks and Spencer pic, UK (AE) wherein royalty at 1% o f revenue was paid by the Assessee to AE on account of grant of trademark.
Thereafter Assessee entered into a revised agreement with its AE for license of valuable rights and business services for efficient conduct of business operations of the Assessee in India. For getting the rights assessee pays royalty at 6% on revenue to its AE.
During the course of the assessment TPO disallowed the incremental royalty that is 5% on revenue and proposed an adjustment of INR 11,06,15 ,455. Assessee submitted evidence to justify the payment made by the assessee to its AE. But the TPO rejected the documents furnished by the assessee.
Pursuant to the remand report, the AO confirmed the addition determined by the TPO and confirmed by the Panel, and made final assessment order.
Counsel for the assessee submitted that TPO has disregarded the benchmarking analysis conducted by the assessee.
The tribunal of Dr. B. R. R. Kumar, (Accountant Member) Yogesh Kumar US, (Judicial Member), while allowing the appeal of the assessee, observed that revenue has derived ALP without resorting to any method prescribed as per the Income Tax Rules. The disallowance of 6% during the current year has been merely made on the pretext that in the earlier year, the royalty paid was at 1%.
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The division bench of Delhi High Court consisting Justice Rajiv Shakdher and Justice Tara Vitasta Ganju issued the notice to the respondent side on the petition filed by the petitioner against the issue of notice under section 148A(b) of Income Tax Act, 1961 when the scrutiny assessment was going on. The bench pointed out that…
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that disallowance shall not be made to a chargeable sum paid to a foreign company without deduction of tax.
Jaiprakash Associates Ltd, the assessee challenged the orders of the Commissioner of Income Tax (Appeals)-2, Noida dated 13.03.2020 for the assessment year 2012-13 and dated 16.03.2020 for assessment years 2013-14 and 2014-15 respectively.
It was alleged that the CIT (A) has erred in upholding the disallowance, under clause (i) of s. 40(a) of the Act, of business expenditure being the race-promotion fee paid by the appellant-assessee to Formula One World Championship Ltd of UK (FOWC) without deduction of tax. The disallowance upheld is to the extent of the chargeable sum, comprised within the race-promotion fee, attributable to the PE of FOWC in India.
The appellant-assessee argued that they had a reasonable cause for non-deduction of tax from the race-promotion fee paid to the FOWC. The FOWC had been assessed in respect of its PE in India and had paid the tax on its chargeable income comprised within the aforesaid race-promotion fee.
It was contended that no disallowance could be made on RPC fees since the payee Formula One World Championship Ltd. had already been assessed on relevant income and tax thereon had been paid by Formula One World Championship Ltd. directly.
The CIT(A) observed that no disallowance could be made in respect of RPC fees because the relevant income had been declared and assessed in the hands of the payee and tax thereon had been paid. Further held that disallowance should be restricted to the chargeable sum comprised in the Grossed RPC fess as assessed in the hands of FOWC and directed the disallowance to be restricted to Rs. 501,952,5442/- instead of Rs. 305,822,666/- in Assessment Year 2012-13, Rs. 368,025,412/- instead of Rs. 228,973,487/- in Assessment Year 2013-14 and Rs. 506,415,998/- instead of Rs. 307,349,578/- in Assessment Year 2014-15.
A Coram comprising of Shri N. K. Billaiya, Accountant Member and Shri Yogesh Kumar U S, Judicial Member observed that no part of the RPC fee paid by the assessee is liable to be disallowed under clause (i) of s. 40(a) because the second proviso clause (i) of Section 40(a) has been inserted w.e.f. 1.4.2020 which essentially provides that where the relevant income has been declared by the payee and tax thereon has been paid by him then no disallowance shall be made in the hands of the payer.
It was viewed that the proviso was inserted to remove an anomaly and was therefore curative and declaratory in nature. While allowing the appeal, the ITAT quashed the disallowance/addition made by the A.O. which was sustained by the CIT(A).
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The Maharashtra Appellate Authority of Advance Ruling (AAAR) has ruled that GST is payable on voluntary gratuitous payment from an outgoing member of a housing cooperative society.
M/S Monalisa Co-operative Housing Society Ltd (the ‘Appellant’) is a co-operative housing society registered under the Maharashtra Co-operative Housing Society Act (MCHS Act) having 48 Flats which provides services to its members and charges GST on maintenance charges recovered from its Members.
The Appellant has submitted that when there is a transfer of a flat, the outgoing member makes a gratuitous & voluntary payment to society. The same does not have any implications on outgoing formalities to be completed as per MCHS Act. The Appellant stated that the above contribution made is entirely voluntary and is not at all a consideration received instead of services provided by the Appellant.
The Appellant is also collecting funds from its members for future major repairs and renovation of the premises. Such funds have no immediate utilization purpose. The amount will only be utilized once the Appellant finalizes the bids received for the repairs to be carried out.
The appellant submitted that as per Sec 7 of the CGST Act, 2017, supply should be made during the furtherance of business. A gratuitous payment by an outgoing member cannot be regarded as a consideration but rather in substance as a gift to society as the member is paying of his own volition. The appellant further submitted that such payment cannot be treated as consideration as there is no business transacted and the person acts on his own volition in its entirety.
A gratuitous payment by an outgoing member cannot be regarded as a consideration but rather in substance as a gift to society as the member is paying of his own volition. The voluntary contribution is paid by the outgoing member of his own free will and only for the welfare of the society and society is free to use the fund in any manner as required.
The appellant further contended that the contribution does not pass the test given u/s 2(31) of the CGST Act which states that any consideration received should be in the inducement of supply of services or goods. Since there is no supply of services or goods by society, the entire contribution should not be subject to GST.
MAAR held that the appellant is trying to give a colour of ‘voluntary and gratuitous’ payment for the amount received from a Transferor/Outgoing member which is collected and will be used for carrying out Major Repairs in future as is evident from the Affidavits submitted by the outgoing member Mr Sanjay Sahjwani and Shri Chandresh Thakker, Treasurer of the Appellant Society.
MAAR has observed that considering the Model Bye-Laws No. 7 (e) & 38 (e) (ix) of the Cooperative Housing Societies, the appellant cannot recover an additional amount towards donation or contribution to any other funds or under any other pretext from transferor or transferee by the housing society. Society cannot collect amounts as voluntary donations from the Transferor or Transferee over the premium i.e. Rs. 25,000/- fixed by the society for the transfer of flats.
A Coram comprising of Dr D K Srinivas, MEMBER (Central Tax) Shri Rajeev Kumar Mital, MEMBER (State Tax) held that the contribution by the outgoing member is nothing but Advance amounts paid to the society for services carried out or to be carried out for the members of the Society and is therefore taxable as per the GST Laws.
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The Punjab and Haryana High Court has recently upheld the maintenance order based on the filed Income Tax Returns (ITR) and balance sheets of the family court in a revision petition filed by the assessee-husband.
This revision petition has been filed for setting aside the order dated 17.12.2022 passed by the Family Court granting interim maintenance of ₹15,000 per month to the respondent-wife and ₹12,500 per month to each of the minor children/respondents No.2 & 3, during pendency of the petition filed by them under Section 125 Cr.P.C. claiming maintenance from the petitioner-husband.
Yagsimant Attri, counsel for the petitioner has contended that the petitioner is only working as a mechanic in a firm and does not have sufficient income to pay the high amount of maintenance awarded to the respondents. Besides, he has aged parents living with him, who also need to be taken care of, and the fact has not been considered by the Family Court while awarding interim maintenance, as per the submissions of the assessee representative.
It was also submitted that the respondent-wife herself is MBA, and is earning a handsome salary of ₹50,000 per month. Therefore it was contended that she was not entitled to any maintenance by the Family Court.
The Single Bench of Punjab and Haryana High Court observed that, “The amount of interim maintenance has been granted by the Family Court by taking into account, the income tax returns filed by the petitioner as also the balance-sheets of the firm which are admittedly in his proprietorship, i.e., M/s. Surjit Diesel Service, Gandarpur, Cuttack, Orissa. It was considered that in the ‘Affidavit of Income, Assets and Expenditure’, the petitioner has himself mentioned his monthly income to be ₹1,50,000. The Family Court has also considered that the respondent wife is earning only an amount of ₹14,000 per month as admitted by her, and not ₹50,000 as alleged by the petitioner.”
It was further noted that the petitioner counsel was not in a position to point out any material on record which could indicate the respondent-wife’s income to be more than ₹14,000 per month.
It was thus held by the Punjab and Haryana High Court that the amount of interim maintenance granted by the Family Court cannot be said to be on a higher side.
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In a significant case, the Telangana High Court (HC) held that observations made by the Commissioner while examining the objection raised to provisional attachment of bank accounts under section 83 of the Central Goods and Service Tax (CGST) Act will not influence the assessment proceedings.
The petitioner challenged the legality and validity of the notices dated 14.02.2023 issued by respondent No.1 addressed to the bankers of the petitioner i.e., respondents No.5, 6 and 7 provisionally attaching bank accounts of the petitioner under Section 83 of the Central Goods and Services Tax Act, 2017 (‘the CGST Act’).
Section 83 of the CGST Act enables the ‘Tax Officer’ to attach any property of a ‘Taxable person’ including the bank account when there is pendency of any proceeding under Sections 62, 63, 64, 73 and 74 of the CGST Act, 2017.
It was submitted that the petitioner has deposited more than Rs.5 crores out of the alleged outstanding Goods and Services Tax (GST) to the tune of Rs.8,42,00,000.00. Further, it was stated that under Rule 159 of the Central Goods and Services Tax Rules, 2017, more particularly Sub Rule (5), the petitioner has filed an objection before the 1st respondent against the invocation of power under Section 83 of the Central Goods and Services Tax Act, 2017.
The court directed the respondent to pass an appropriate order under Rule 159 of the Central Goods and Services Tax Rules, 2017 and place the same before the Court on 17.03.2023. Further the Commissioner, Ranga Reddy GST Commissionerate, has passed Order No.1/2023 dated 15.03.2023 under Rule 159(5) of the Central Goods and Services Tax Rules, 2017. At the end of a long narration, Commissioner has released the bank accounts of the petitioner from provisional attachment.
It was argued that in the course of the narration, the Commissioner has made certain observations, which may come in the way of a fair adjudication in the assessment proceedings.
A two-member bench comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji held that observations made by the Commissioner while passing the order dated 15.03.2023 was in the context of examining the objection raised by the petitioner to provisional attachment of bank accounts under Section 83 of the CGST Act and those would not influence the assessment proceedings that may be initiated against the petitioner.
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The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently held that income tax addition could not be made due to misreporting by insurance companies.
Assessee Kamal Binani filed the return on 20.11.2012 declaring total income of ₹.1,60,630/- .Thereafter his case was reopened as per section 147 of the Income Tax Act 1961. While verifying the records the assessing office observed that there is no bank entries of Rupees 6,00,000/- paid in two instalments by the assessee from HDFC bank. Thereafter he proceeded to make the addition under section 68 of the Income Tax Act 1961.
Aggrieved assessee approached CIT(A) raising the issue but the order of CIT(A) against him further assesee filed second appeal before the ITAT.
Bhupendra Shah, counsel for the assessee submitted that, “assessee has not maintained any bank account in Bank of India, Andheri Branch and assessee has submitted all other information along with the bank statements in which assessee has maintained bank account were submitted before tax authorities, the issue raised may be because of misreporting by the insurance company”.
Saurabh Kumar Rai, counsel for the revenue supported the decision of the lower authorities.
The division bench of the ITAT comprising Kuldip Singh, E (Judicial Member) and S. Rifaur Rahman, (Accountant Member) allowed the appeal of assessee and observed that “as far as subscription of insurance is concerned assessee has accepted and brought on record that assessee has in fact made the payment and not through the bank reported by the Insurance Company and it is from the branch in which assessee is maintaining bank account.”
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This weekly round-up analytically summarises the key stories of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reported at tax scan. in, from March 27th to April 1st, 2023.
Non Availment of Cenvat Credit on Capital Goods: CESTAT quashes Service Tax Demand (Harish Tex Mach Pvt Limited vs Commissioner of Central Excise & ST, 2023 TAXSCAN (CESTAT) 356)
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has recently, in an appeal filed before it, quashed service tax demand as there was non-availment of Cenvat credit on capital goods.
The Coram comprising Ramesh Nair, Member (Judicial) and C L Mahar, Member (Technical) observed that even at the subsequent stages of adjudication or before the Commissioner (Appeals), no evidence was brought on record by the Revenue which showed that the appellant had taken any Cenvat credit on the input, input service or capital goods.
“In this position, it is clear that the appellant has not availed Cenvat credit on the capital goods therefore, there is no violation of condition (iii) of the Notification No. 6/2005-ST”, they observed.
Works Contract Service Prior to 01.06.2007 cannot be levied with Service Tax: CESTAT Reiterates Order of SC (Pawan Edifice Pvt Ltd vs C.C.E. & S.T, 2023 TAXSCAN (CESTAT) 353)
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has recently, reiterated the order of the Supreme Court (SC), in an appeal filed before it, wherein it was held the works contract service prior to 01.06.2007 cannot be levied with service tax.
With Saurabh Dixit, the Counsel appearing on behalf of the appellant, having submitted that it is not required in the present case that the appellant should opt for the Works Contract Service, for the reason that, the appellant, right from the beginning, had maintained that they were providing the Works Contract Service, the Coram comprising Ramesh Nair, the Judicial Member and CL Mahar, the Technical Member observed:
“The Supreme Court clearly held in the judgment of L & T, held that Works Contract Service prior to 01.06.2007 cannot be levied with service tax. Since the levy became effective from 01.06.2007, the appellant has correctly obtained the registration and started paying service tax under Works Contract Service.”
“The reason for denial of Works Contract Service by the Commissioner (Appeals) is that the appellant should opt for the Works Contract Service. We are of the considered view that this option can be exercised only when the assessee wishes to shift from one service to Works Contract Service which is not the case here” the Tribunal noted.
No Service Tax on Construction of Complex Services provided by cooperative housing society to its members: CESTAT (Shrinandnagar V Co Operative Housing Society Limited vs C.S.T.-Service Tax – Ahmedabad, 2023 TAXSCAN (CESTAT) 343)
In a recent ruling, the Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT,) has held that, Service Taxis is not leviable on the construction of complex services provided by cooperative housing society to its members.
The housing society having putting forth a claim on the premise that the contractor who undertakes the construction work, would be liable to pay service tax but the society in turn, cannot be said to have supplied any services to its members , a two-member bench comprising Mr Ramesh Nair and Mr C L Mahar observed that in the absence of any indication in the amendment to make it either retrospective or explanation, being merely declaratory or clarificatory in nature, such statutory change cannot be made applicable to the long past events.
No Service Tax liability on hire purchase and Financial Lease Agreement entered prior to 16.07.2001, although Payments were received: CESTAT (M/s Paragon Finance Limited vs Commissioner of Service Tax, 2023 TAXSCAN (CESTAT) 341)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, has recently, ruled that there is no service tax liability on hire purchase and financial lease agreement entered prior to 16.07.2001, although payments were received.
Hearing the submissions of either sides, the Bench of Ashok Jindal, the Judicial Member and K Anpazhakan, the Technical Member observed:
“We find that the service tax has been levied on Banking and Other Financial Services with effect from 16.07.2001. Prior to that, there was no leviable on Banking and Financial Institution Services. Therefore, the agreement, which has been entered by the assessee, with their clients prior to 16.07.2001, when no service tax was leviable, the liability of service tax does not arise against the assessee.”
“We hold that the agreement entered by the assessee prior to 16.07.2001, is notliable to be taxed although the assessee has received the payments later on.” The Tribunal noted.
Grounds on which party may seek Condonation of delay cannot change with passage of time: CESTAT allows Service Tax Refund (M/s Lupin Limited vs Commissioner of Central Tax & Respondent Customs (Appeals) ,2023 TAXSCAN (CESTAT) 342)
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has allowed service tax refund and observed, in an appeal filed before it, that grounds on which party may seek condonation of delay cannot change with passage of time.
The main argument of the learned Counsel for the Appellant being that the SEZ Act, 2005, being a special statute prevails over any other Act, the Tribunal of PV Subba Rao, the Technical Member and Binu Tamta, the Judicial Member, noted that the adjudicating authority should have considered the issue of condonation of delay, taking a wider and liberal approach.
Thus, allowing the refund claims of the appellant, the Bench observed:
“The grounds on which a party may seek condonation of delay cannot change with the passage of time, however, the same needs to be examined in the light of the law prevalent on the point, particularly in the facts of the present case where we are dealing with the special statute of beneficial nature. The Adjudicating Authority took a very conservative approach in taking the view against the condonation of delay.”
No Service Tax liability under Management, Maintenance or Repair Service on Non-Rendering of Service in India: CESTAT (M/s. Dassault Systemes Simulia Private Limited vs The Commissioner, 2023 TAXSCAN (CESTAT) 223)
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has in an appeal filed before it, observed that there can be no Service Tax liability under management, maintenance or repair service, on non-rendering of service in India.
The aforesaid observation was made by the Chennai CESTAT when an appeal was preferred before it by M/s. Dassault Systemes Simulia Private Limited, engaged in the sale of software programme “Abaqus” to various customers, wherein the Coram comprising of P Dinesha, the Judicial Member and Vasa Seshagiri Rao, the Technical Member, observed as below:
“We are of the clear view that the appellant could not have been fastened with the Service Tax liability under management, maintenance or repair service for the reason that there is no document placed on record to negate the appellant’s claim that they have not rendered any service in India and the Revenue has also not been able to place anything on record in their support to establish that the appellant had rendered nothing but management, maintenance or repair service.
CESTAT Sets aside Demand of Service Tax on Ocean Freight Charges (Commissioner of Service Tax vs Kiri Dyes And Chemical Limited, 2023 TAXSCAN (CESTAT) 337)
In a significant ruling, the Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), has set aside the demand for Service Tax on Ocean Freight Charges, wherein while considering the appeal, a single-member bench comprising of Mr Ramesh Nair observed that the issue of whether Ocean Freight/ Sea Transportation service is liable to service tax or otherwise has been decided in the case of SAL Steel Limited.
“Since there is no stay against the said High Court judgment, there is no infirmity in the impugned order which was passed relying on the jurisdictional High Court judgment in the case of SAL Steel Limited.” following the judicial precedent, while upholding the impugned order and dismissing the appeal of the revenue, it noted.
Limitation of one year u/s 11B of Central Excise Act not applicable when Service Tax was paid under Protest: CESTAT (Erweka vs Commissioner of Central Excise & ST, 2023 TAXSCAN (CESTAT) 339)
With Erweka India, the appellant, having filed an appeal before it, the Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), has held that the limitation of one year under section 11b of the Central Excise Act, 1944, is not applicable, when service tax was paid under protest.
The issue involved in the present case being as to whether, the appellant’s refund filed after one year from the relevant date, is hit by limitation in terms of Section 11B of the Central Excise Act, 1944, the Court observed that the letter cannot be said to be an afterthought, thus holding that the Commissioner (Appeals) should have considered this letter and passed a reasoned order on this issue, which he has now failed to do.
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The Authority for Advance Ruling (AAR), Haryana, has recently in an application filed before it, held that the supply of spraying services, is non-taxable under GST.
The aforesaid observation was made by the Haryana AAR, when an application was filed before it by the applicant M/S PI Industries Ltd, who is engaged in the business of manufacturing Agrochemicals.
The application being sought by the applicant in respect of the questions as to whether the supply of spraying services undertaken by the applicant, is covered under the notification no. 12/2017 CT and hence exempt from the payment of tax, and also as to if tax is payable , then whether the applicant can avail input tax credit, of inputs and input services used for undertaking the supply of spraying services, it was submitted by applicant that the activity undertaken by it, which relates to the spraying of agrochemicals provided by it, to the farmers, is covered under Sl. No 54 of the notification no. 12/2017 CT, and under Sl. No 57 of the notification no.9/2017 – integrated tax (rate), dated 26.6.2017, as amended. Hearing the submissions of the applicant, the AAR Panel comprising of Sunder Lal, the CGST member, along with Kumud Singh, the SGST member, ruled that the supply of spraying services undertaken by the applicant, is covered under the notification no. 12/2017 CT and hence exempt from the payment of tax under GST.
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In a significant case, the Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the rejection of the appeal filed by the department since the order under section 129D of the Customs Act, 1962 has to be assumed as passed beyond 3 months as there is no evidence to prove delay in receiving review order.
The Department challenged the order passed by the Commissioner (Appeals) who dismissed the appeals of the Department on the grounds of limitation. It was submitted that the Commissioner (Appeals) has dismissed the appeals on the grounds of limitation holding that the review order as required under Sub Section (2) of Section 129D of the Customs Act, 1962 has been passed beyond the period of three months as envisaged in Sub Section (3) of Section 129D of Customs Act, 1962.
Section 129D of the Customs Act, 1962 provided that whether the values of any goods for assessment of duty shall be enhanced or reduced by the addition or reduction of the amounts in respect of such matters as are specifically provided in this Act.
It was argued that the Commissioner (Appeals) has computed the period of three months from the date of Order-in-Original whereas the period of three months ought to have been computed from the date of receiving the Order-in-Original by the Reviewing Authority.
Further submitted that merely because the office of adjudicating authority and Reviewing Authority is housed in the same building, the Commissioner (Appeals) can’t conclude that the order was received on the same day.
It was further argued by the Department that when the period of three months is computed from the date of receiving the Order-in-Original by the Reviewing Authority, the review orders passed are well within the time prescribed under Sub Section (3) of 129D of Customs Act, 1962.
A Coram comprising of Ms Sulekha Beevi C S, Member (Judicial) Mr M Ajit Kumar, Member (Technical) observed that the Department was not able to provide any evidence as to the date on which the Reviewing Authority received the order passed by the adjudicating authority.
As there was no evidence to substantiate the contention of the Department that the Order-in-Original was received on such dates by the Review Cell, the CESTAT upheld the observation and findings of the Commissioner.
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In a recent case, the Madhya Pradesh High Court (HC)directed the registry to initiate Contempt of Court Proceedings against Advocates who abstain from court work and act disobediently against the order of the Division Bench.
The issue has arisen in respect of a call given by the M.P. State Bar Council asking the members of the Bar in the State of M.P. to abstain from Court work w.e.f 23.03.2023, the Division Bench took suo motu cognizance of the situation and passed the order on 24.03.2023.
All the advocates throughout the State of Madhya Pradesh are directed to attend to their court work forthwith and shall represent their clients in the respective cases before the respective courts forthwith.
As per the judgement, it was stated that if any lawyer deliberately avoids attending the court, it will amount to disobedience of the order and he will be faced with serious consequences including initiation of proceedings for contempt of court under the Contempt of Courts Act.
Without following the writ of mandamus issued by the Coordinate Bench on 24.03.2023, counsel for petitioner Shri Sapan Usrethe and Shri Amaan Haroon Khan, despite being authorized by the petitioner vide Power of Attorney, abstained from Court work.
A Coram Comprising of Justice Sheel Nagu and Justice Virender Singh observed that the act of counsels amounts to disobedience of the writ of mandamus issued on 24.03.2023 in W.P. No. 7295/2023.
The Court directed the Registry to issue a show cause notice to Shri Sapan Usrethe and Shri Amaan Haroon Khan to initiate the proceedings for contempt for disobedience of the order passed by the Division Bench.
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In the case of Kerala Gramin Bank, the Cochin bench of the Income Tax Appellate Tribunal (ITAT) has held that late fee interest under section 234E(1) is not leviable for processing on the period before the amendment.
The petitioner filed an application challenging the applicability or otherwise of the levy of interest under section 234E of the Income Tax Act (‘the Act’) in respect of different Quarters of the financial year 2013-14, in view of the amendment to section 200A(1) of the Act by insertion of clause (c) thereto by Finance Act, 2015 w.e.f. 01.06.2015, enabling processing of levy of fees under section 234E(1) of the Income Tax Act, 1962.
The levy u/s. 234E(1) seeks to subject the delayed filing of a tax deduction at source (TDS) return, to be filed by every deductor quarterly, i.e., within the prescribed time of the end of each quarter, as required by sec. 200(3), to a late filing fee, reckoned on a per-day basis, albeit subject to a cap at the TDS under reference. The processing u/s. 200A(1) in all appeals in the instant case is after 01/6/2015, with the TDS returns themselves being furnished much thereafter.
In Sarala Memorial Hospital v. UOI, it was held that the said amendment to section 200A(1) of the Act is prospective in nature so the said power was not available to the assessing authority before 01.6.2015. Accordingly, processing u/s. 200A(1) could thus validly be made qua fee u/s. 234E w.e.f. 01/6/2015.
In Asst. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] it was clarified that a decision by the jurisdictional High Court shall be binding and lead to rectification where an order inconsistent therewith has been passed; rather, even where the same is before the binding decision by the Hon’ble High Court since it would relate to the period to which it pertains to.
It was evident that no late filing fee could be levied per a processing u/s. 200A(1) for any period prior to 01.6.2015. The TDS returns in the case are themselves filed after 01/6/2015; rather, being so only in view of the law, w.e.f 01/10/2014, enabling so by providing for the filing of a correction statement. Therefore, could be processed only after 31/5/2015, after which date the power of determining the levy u/s. 234E while processing the return is available. The appeals arose u/s. 154 of the Act, denying the assessee’s claim for cancelling such levy.
A Coram comprising of Shri Sanjay Arora, AM & Shri Sandeep Gosain, JM found that the orders by the Revenue authorities as not sustainable in law. The Court allowed the assessee’s appeals since the processing is for a period before 01/6/2015.
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The Punjab and Haryana High Court (HC) in its recent case set aside the order since the 4 days to appear in Income Tax Office was found to be inconsistent with the mandatory time prescribed under section 148A(b) of the Income Tax Act, 1961.
Baljeet Singh, the petitioner submitted that the show cause under Section 148A(b) of the Income Tax Act, 1961, was uploaded on the portal on 21.03.2022 and the petitioner was given 04 days to appear in the office of the respondent(s) on 25.03.2022.
It was argued by the petitioner that as per the provisions of Section 148A(b), 07 days are required to be given for giving a reply to the notice and this provision is mandatory and has not been complied with, by the respondent(s).
As per Section 148A(b) of the Income Tax Act, 1961, the assessing officer must give the person being taxed more than seven days but less than thirty days to explain. The response from the taxpayer will help the income tax officer decide whether or not to send a notice for unreported income.
It was evident that the 4 days given to the assessee are not according to the legal provision and the order passed out of this notice is also invalid.
The two-member bench comprising Justice Ritu Bahri and Justice Amarjot Bhatti allowed the petition and set aside the order and notice under Section 148(b) and consequential notice dated 21.03.2022 under Section 148 of the Income Tax Act, 1961. Further, the liberty is granted to the respondents to proceed, following the law as per Section 148A(b) of the Income Tax Act, 1961, after giving due opportunity to the petitioner.
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