The Gujarat High Court upheld the order by the Income Tax Appellate Tribunal (ITAT) that Baroda Cricket Association engaging in international matches is not amounts to commercial activity. Thus, the benefits of exemptions under section 11 and 12 of the Income Tax Act can be allowed.
The Baroda Cricket Association merely held certain demonstration or exhibition matches. It does not provide any training in the game of cricket to novices or any advanced training for persons who are already practised, players. Its activities outside the holding of the exhibition of international matches are limited entirely to its own members. The only contact it has with the public is by way of having them as spectators, on payment of a fee, of matches arranged by it.
The section 11(1)(a) of the Act elaborates as the income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of fifteen per cent. of the income from such property.
And the section 11(ii) of the Act elaborates as for charitable or religious purposes, created before the 1st day of April 1952, to the extent to which such income is applied to such purposes outside India provided that Board, by general or special order, has directed in either case that it shall not include in the total income of the person in receipt of such income.
In the light of the judgment in the case, Commissioner of Income Tax (Exemption) v. Gujarat Cricket Association rendered in Tax Appeals No.268 of 2012 and allied matters, wherein the issue has been decided in favour of the assessee and against the Revenue.
While upholding the ITAT order, the division bench consisting of Justice Harsha Devani and Justice Sangeetha Vishen observed that assessee cricket associations are engaged in educational activities, it is not really material that the assessee has engaged itself in the activities in the nature of trade, commerce or business.
Subscribe Taxscan Premium to view the JudgmentThe Tamilnadu State Appellate Authority for Advance Ruling (AAAR) held that Input tax credit of tax paid by Head office for the furtherance of business, subject to other conditions of eligibility to such credit as per Section 16 of CGST/TNGST Act 2OI7.
SML is engaged in the business of providing medium-sized heavy-duty cranes on rental/ lease/ hire basis to its clients without transferring the right to use the cranes to minimize transportation time and costs. Under GST, SML has obtained registration for 1O locations across India, including its head office (“SML Maharashtra”)
SML branch offices receive inquiries from various customers for supply of cranes on hire charges. SML branch offices negotiate with customers and receive final work orders from customers. The title and ownership of all the different types of cranes along with their components vest with SML Maharashtra. Therefore, on receipt of the final work order, all the SML branch offices, in turn, raise internal work orders on SML, Maharashtra to provide requisite cranes on hire charges along with appropriate support and assistance to various customers across India.
SML Maharashtra discharges IGST on the value of hire charges recovered from the appellant treating the same as inter-state supply of service. Consequently, the recipient i.e. the appellant avails credit of IGST charged/paid by SML Maharashtra on the value of hire charges charged on the invoice. The appellant sought the authority for the advance ruling to determine the admissibility of ITC of the IGST paid by SML Maharashtra in the hands of the appellant.
The Order was rendered by the Tribunal comprising of Ajit Kumar and T.V.Somanathan on an appeal given by SML.
The court observes that there is no reason to restrict the eligibility of ITC credit under Section 16 (2) of the Act of which the input tax credit paid by the SML HO, in the hands of the appellant as it has been substantially brought out that the ‘consideration’ stands paid to the SML HO either by the customer of the Appellant or by setting off against the payables of the appellant to SML HO, in respect of lease/hire of Cranes, etc which is as per the established accounting principles.
Court held that GST paid by the SML Maharashtra on the lease of Cranes, to their distinct personalities, for sub-lease to the ultimate customer is eligible as a credit in the hands of other branches.
Subscribe Taxscan Premium to view the JudgmentThe Customs Excise and Service Tax Appellate Tribunal (CESTAT) of Allahabad set aside the ruling of lower Tribunal and held that if the entire remuneration stands considered by Income Tax Authorities as salary, the same cannot be considered as service, so as pay the service tax.
The Tribunal is comprising of Judicial Member Archana Wadhwa and Technical Member Anil G Shakkarar rendered an Order on an appeal given by M/s Vectus Industries Ltd.
Commission earned by the Managing Director of the appellant company, apart from his fixed salary, is in lieu of services provided by him for promotion of the sales in the market and hence is liable to service tax. The lower authorities have held that the same is a service.
The lower authorities have held that the same is a service and accordingly, service tax to the tune of Rs.19,99,807/- stands confirmed against them for the period from 2012-13 to 2013-14 by raising a show-cause notice on 03.11.2016. The demand confirmed by the Original Adjudicating Authority stands upheld by Commissioner (Appeals) along with upholding the imposition of penalties.
While setting aside and impugned order Tribunal observes that the entire remuneration stands considered by Income Tax Authorities as salary, the same cannot be considered as service, so as pay the service tax and remand the matter to the Original Adjudicating Authority for fresh consideration.
Subscribe Taxscan Premium to view the JudgmentCommerce and Industry & Railways Minister Piyush Goyal chaired a meeting yesterday in New Delhi to review the remaining recommendations of the Baba Kalyani report on the SEZ (Special Economic Zone) policy of India. The meeting was attended by members of the Baba Kalyani group along with representatives from the Department of Revenue, Department of Legal Affairs and legal firms.
Commerce and Industry Minister examined the revamp of the SEZ policy with a view to meeting the global challenges being faced by Indian exporters. Discussions were also held to find a way out for implementation of the remaining recommendations in order to facilitate the ease of doing business in the present global market scenario.
The recommendations which have been completed include a review of specific exclusions proposed in NFE computation in light of Make in India initiative, sharing of duty exempted assets/ infrastructure between units to be allowed against specific approval, and formalization of the de-notification process for enclaves and delinking its present mandatory usage for SEZs purpose only. The other implemented recommendations are support to servicification of manufacturing zone, allowing manufacturing enabling services companies, broad-banding definition of services/allowing multiple services to come together and flexibility to enter into a long term lease agreement with stakeholders in Zones in line with the State policies and the application for constructing minimum built-up area by Developer or Co-developer beyond a period of ten years from the date of notification of the SEZ on merits of each case..
Other changes and initiatives were taken for the SEZs include delegation of powers to Development Commissioner for shifting of SEZ unit from one zone to another, supplies of services in DTA against foreign exchange or Indian Rupees to be counted towards NFE, enable a trust to be considered for grant of permission to set-up a unit in an SEZ, setting up of cafeteria, gymnasium, creche and other similar facilities/ amenities and uniform list of services to SEZ.
The Baba Kalyani led committee was constituted by the Ministry of Commerce and Industry to study the existing SEZ policy of India and had submitted its recommendations in November 2018. The objectives of the committee were to evaluate the SEZ policy and make it WTO compatible, suggest measures for maximizing utilization of vacant land in SEZs, suggest changes in the SEZ policy based on international experience and merge the SEZ policy with other Government schemes like coastal economic zones, Delhi-Mumbai industrial corridor, national industrial manufacturing zones and food, and textile parks.
If India is on the path to become a USD 5 trillion economy by 2025 then the present environment of manufacturing competitiveness and services have to undergo a basic paradigm shift. The success is seen in the services sector like IT and it has to be promoted in other services sectors like health care, financial services, legal, repair, and design services.
The Government of India has set a target of creating 100 million jobs and achieving 25% of GDP from the manufacturing sector by 2022, as part of the flagship Make in India program. Further, the Government plans to increase manufacturing value to USD 1.2 trillion by 2025. While these plans are intended to propel India into a growth trajectory, it requires evaluation of existing policy frameworks to catalyze manufacturing sector growth. At the same time, the policy needs to be compliant with the relevant WTO regulations.
An extension in the implementation of reduced-Value Added Tax (VAT) was announced by The Greek Public Revenue Authority (AADE) for the islands affected by the refugee crisis.
The decision was published in the 23 December 2019 edition of the Official Gazette. A reduction of 30% from the standard VAT rate will be valid for Leros, Lesvos, Kos, Samos, and Chios to 30 June 2020. The VAT regime for the islands can be applied from 1 July 2020.
The five islands have been receiving the largest migrant inflows. The refugee crisis is expected to be continued in 2020. United Nations Refugee Agency (UNHCR) affirmed that around 75000 refugees and migrants arrived onshore in the year 2019.
The previous article was amended to reflect the published tax regime.
As per Federal Tax Authority (FTA), a total of 3.2m applications for VAT refunds were received by the end of 2019, marking an increase of 1.68m applications from mid-2019. On average, the refund applications on a daily basis rose by 2.64 fold.
The VAT refund mechanism was implemented by FTA as from November 2018. As per the regime, the tourists can claim VAT refunds on their purchases made during their visit to the UAE.
For a tourist to claim the VAT refund, the following conditions should be met:
The outlets registered in the scheme can be identified with the posters displayed on their storefronts. Tourists can reclaim the taxes at the spaces allocated by FTA. They will receive their refunds on the submission of the tax invoice along with copies of their passport and credit card at the departure port. They can have their recovered amount either as UAE Dirhams or can have it transferred to their credit card. The system is managed in partnership with a global operator.
The Karnataka High Court has held that the Input Tax Credit ITC claim not shown in the VAT Return cannot be availed through merely filing Form 240.
The Court observed that, When the statutory provision mandates compliance in a particular manner, it should be done in that particular way alone not by any other method.
The petitioners are the dealers registered under the provisions of the Act. The ITC claim of the petitioners based on Form VAT 240 has been rejected by the Authorities. The fulcrum of dispute in these matters revolves around the interpretation of Sections 10[3] and 10[4] of the Karnataka Value Added Tax (VAT) Act, 2003 in as much as the availment of ITC claim by the registered dealer based on the annual audit statement of accounts filed in Form VAT 240 notwithstanding no claim made in the return of turnover filed under Section 35 of the Act.
Justice S. Sujatha observed that all the registered dealers are not required to file such Form VAT 240 but only depending on the total turnover for the year, Form VAT 240 has to be filed. In cases where no such VAT 240 is filed, it would certainly result in discrimination if VAT 240 has to be accepted as the basis for determining the Input Tax Credit (ITC). VAT From 240 cannot replace the “return”.
While dismissing the writ petition Court also said that, When the statutory provision mandates compliance in a particular manner, it should be done in that particular way alone not by any other method. “Expressio unius est exclusion alterius” is the well-settled legal maxim followed by the Courts without any exception. Hence, the Court considered view that no input tax credit can be availed independent of the claim in the returns merely filing Form VAT 240.
Subscribe Taxscan Premium to view the JudgmentThe Kerala High Court ruled that the Circulars issued by the Government Department circulars do not have priority over the decisions of the Supreme Court and High Courts.
Consequently, the High Court refused to entrain the Circular issued by the Central Board of Direct Taxes that explains that for the purpose of Section 80P(4) of the Act, a co-operative bank shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949.
The Court, further upheld that Supreme Court judgment in the case of Mavilayi Service Co-operative the Bank Limited v. Commissioner of Income Tax: 2019 (2) KHC 287: 2019 (2) KLT 597 over the Circular issued. In the relevant case, the Supreme Court has ruled that the Assessing Officer has to conduct an inquiry into the factual situation as to the activities of the assessee society and arrive at a conclusion whether the claim for deduction under Section 80P (4) of the Income Tax Act can be allowed or not.
The Court held that clarificatory circulars issued by Government departments are for guiding the officers. “Such circulars or instructions do bind the department and its officers. But they do not bind the Court in the interpretation of statutory provisions. Circulars issued by a Government department cannot have any primacy over the decision of the jurisdictional High Court”.
The Court further clarified that “when the Supreme Court or the High Court has declared the law on the question arising for consideration, it will not be open to a party to contend that the circular should be given effect to and not the view expressed in the decision of the Supreme Court or the High Court”.
The judgment was rendered in a joint hearing of various appeals filed by Kuthannur Service Co-Operative Bank Limited, Peringottukurussi Service Co-Operative Bank Ltd. and two petitions filed Vadakkenchery Service Co-Op Bank Ltd., against The Income Tax Officer And four other. In the appeal, the appellants argued that the Tribunal has not considered the effect of the Circular issued by the department on the matter.
The petitions were heard by a division bench comprising of Justice C.K.Abdul Rehim and Justice R. Narayana Pisharadi.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Direct Taxes (CBDT) has granted relaxation to eligibility conditions for filing of Income Tax Return Form-1 (Sahaj) and Form-4 (Sugam) for the Assessment Year 2020-21.
In order to ensure that the e-filing utility for filing of return for assessment year (A.Y) 2020-21 is available as on 1st April 2020, the Income-tax Return (ITR) Forms ITR-1 (Sahaj) and ITR-4 (Sugam) for the A.Y 2020-21 were notified vide notification dated 3rd January 2020. In the notified returns, the eligibility conditions for filing of ITR-1 & ITR-4 Forms were modified with an intent to keep these forms short and simple with bare minimum number of Schedules.
Therefore, a person who owns a property in joint ownership was not made eligible to file the ITR-1 or ITR-4 Forms. For the same reason, a person who is otherwise not required to file a return but is required to file a return due to fulfillment of one or more conditions in the seventh proviso to section 139(1) of the Income-tax Act, 1961 (the Act), was also not made eligible to file ITR-1 Form.
After the aforesaid notification, concerns have been raised that the changes are likely to cause hardship in the case of individual taxpayers. The taxpayers with the jointly owned property have expressed concern that they will now need to file a detailed ITR Form instead of a simple ITR-1 and ITR-4. Similarly, persons who are required to file the return as per the seventh proviso to section 139(1) of the Act, and are otherwise eligible to file ITR-1, have also expressed concern that they will not be able to opt for a simpler ITR-1 Form.
The matter has been examined and it has been decided to allow a person, who jointly owns a single house property, to file his/her return of income in ITR-1 or ITR-4 Form, as may be applicable, if he/she meets the other conditions. It has also been decided to allow a person, who is required to file a return due to fulfillment of one or more conditions specified in the seventh proviso to section 139(1) of the Act, to file his/her return in ITR-1 Form.
The Kerala High Court in the case of Abbott Healthcare Pvt Ltd v CST remitted back the matter to Kerala AAR where the Authority did not rule on the issue referred to it for the purpose of seeking a ruling.
The petitioner company is engaged in the sale of pharmaceutical products, diagnostic kits, etc. It places its diagnostic instruments at the premises of unrelated hospitals/laboratories for their use for a specified period without any consideration. The petitioner also enters into Agreements with various hospitals, laboratories, etc., whereunder the arrangement between parties is for supply of medical instruments to the hospital/laboratory concerned, for their use, without any consideration for a specified period and for the supply of specified quantities at prices specified in agreement, through its distributors on payment of applicable GST.
The petitioner had sought a ruling before the respondents Kerala AAR and AAAR on the issue of – whether in the facts of the present case, the provision of specified medical instruments by the Applicant to unrelated parties like hospital(s), Lab (s), for uses without any consideration, constitutes a “supply” or whether it constitutes “movement of goods otherwise than by way of supply” as per provisions of the CGST/SGST Act, 2017?”
The AAR irrespective of answering on the above lines opined that the petitioner was effecting two supplies, namely, of medical instruments and of reagents/calibrators/disposables to be used along with the instrument. Since the instrument supplied had no utility to the customer unless he also bought the reagents/calibrators/disposables, the supply of the instrument and the reagents, etc. had to be seen as naturally bundled to form a composite supply.
A single-judge bench of Justice A.K. Jayasankaran Nambiar held that the findings as regards a composite supply are whole without jurisdiction. The matter is hence remitted back to AAR for fresh consideration.
It was observed that it is only open to AAR to enquire based on terms of the agreement. In the present case, the AAR went beyond the terms of reference in embarking upon an enquiry as to whether supplies under agreement constituted a composite supply.
Subscribe Taxscan Premium to view the JudgmentThe Gujarat High Court set aside Reassessment Notice issued to the amalgamated company which ceased to exist after approval of the composite scheme of arrangement.
The petitioner filed before this court by the petitioner company as well as by three companies viz. Gayatri Mine-Chem Private Limited, Gayatri Integrated Services Private Limited and Gayatri Fillers Private Limited inter alia praying for sanction of the composite scheme of arrangement in the nature of amalgamation with the petitioner company under the provisions of the Companies Act. During the said proceedings before this court, the Regional Director, North-Western Region, Ministry of Corporate Affairs, had filed his affidavit dated 13th May 2015. In response whereof, the additional affidavit was filed inter alia providing the explanation to the issues raised by the Regional Director, Ministry of Corporate Affairs. As per one of the explanations, an objection was invited from the Income Tax Department; however, within the statutory period of 15 days, no objection was raised by the Income Tax Department and it was presumed that the Income Tax Department had no objection to the proposed scheme of arrangement. Thus the court upon being satisfied that the amalgamation under the scheme resulted in three companies. Thereafter Income Tax Department issued a notice indicating that the department has reason to believe that income chargeable to tax.
The division bench comprising of Justice Harsha Devani and Justice Sangeeta K. Vishen on a writ petition filed by Gayatri Microns Ltd.
While relying the decisions in the cases of Dharamnath Shares and Services (P) Ltd. and Khurana Engineering Limited held that once the assessee company gets amalgamated with the transferee company, its independent existence does not survive and therefore it would no longer be amenable to the assessment proceedings court came into a conclusion that it is well-settled proposition of law that upon its amalgamation the transferor company ceases to exist and becomes extinct, and it would no longer be amenable to the assessment proceedings considering the fact that the extinct entity would not be covered within the ambit of the provisions of the Act.
The Court also observed that the notice dated 25th March 2019 issued by the respondent under the provisions of section 148 of the Act for the assessment year 2012-13, being without jurisdiction, is not sustainable.
Subscribe Taxscan Premium to view the JudgmentThe Delhi High Court in the case of Sunder System Pvt Ltd v Union of India held that the SCN to be quashed where it was possible on behalf of the adjudicating authority to adjudicate within the period of limitation.
The writ petition has been filed seeking quashing of adjudication proceeding initiated by the impugned SCN, hearing notice and subsequent corrigendum dated 15.11.2011, 09.08.2017 and 20.09.2017 on the ground that the adjudication proceeding had become barred by limitation in view of the limitation period of one year for adjudication from the date of SCN
The petitioner relies on Circular No. 732/48/2003-CX directing that after the conclusion of personal hearing, it is necessary to communicate the decision immediately or at least one month from the date of the personal hearing.
The respondent, on the other hand, states that in the present case, the delay is not inordinate inasmuch as the Courts have allowed writ petitions only when the delay has been more than 10 years.
The Coram comprising of Justices Manmohan and S.D. Sehgal held that since it was apparent that it was possible for the adjudicating authority to adjudicate upon the SCN issued to the petitioner within a period of one year from the conclusion of arguments, the SCN is liable to be quashed. The writ petition is hence allowed on the short ground of limitation alone.
Subscribe Taxscan Premium to view the JudgmentThe division Bench of the Karnataka High Court has observed that financial stringency would not justify the non-remittance of TDS to the Government, in as much as, it would amount to the utilization of money payable to the appropriate government.
The division bench comprising of Justice Aravind Kumar and Justice Suraj Govindraj rendered this judgment on an appeal petition filed by M/S KBR Infratech Ltd.
On 25.07.2013, a survey came to be conducted under Section 133A of Income Tax Act, 1961 (for short, the Act’) in the business premises of assessee and an order under Section 201(1) of the Act came to be passed on 30.07.2013 enclosing therewith a demand notice. On 02.08.2013, the assessee paid the amount demanded under the notice together with interest as required under Section 201 (1) (A) of the Act.
Subsequently, proceedings under Section 221 of the Act came to be initiated by the issuance of show cause notice to assessee. A reply came to be submitted by the appellant contending that lapse in remittance of the amount collected by way of TDS and retained by the assessee was out of acute liquidity crunch and not deliberate or intentional negligence. Said plea of the assessee did not find favor with the Assessing Officer and as such, assessee came to be rejected and levied a penalty of Rs.77,95,155/-.
The Assessee has preferred this appeal questioning the correctness and legality of the order dated 07.10.2016 passed by Income Tax Appellate Tribunal (ITAT), Bangalore Bench (for the assessment year 2013-14) where under order passed by Commissioner of Income Tax (Appeals)-13, Bangalore dated 14.08.2015 setting aside the levy of penalty of Rs.77,95,155/- came to be modified by restricting the quantum of penalty to Rs.20,55,573/-
While dismissing the appeal court observed that financial stringency is the only plea which was available to assessee in the penalty proceedings is to explain the cause for delay and that would not justify the non-remittance of TDS to the government, in as much as, it would amount to the utilization of money payable to the appropriate government.
Subscribe Taxscan Premium to view the JudgmentThe Appellate Tribunal upheld the decision taken by The WB AAR that Exemption Notification is not applicable to the Appellant’s service of loading, unloading, etc’ after the cargo of yellow peas imported from Foreign Markets the port of entry.
The Appellant provided loading and unloading services to imported raw whole yellow peas and there is no dispute that raw whole yellow peas are agricultural produce covered under serial no. 45 of the Rate Notification and are exempted goods. However, this particular consignment of raw whole yellow peas was harvested in a foreign land and the concerned primary market or the farmers’ market is located in that foreign land.
The Appellate Tribunal comprising of A.P.S Suri and Devi Prasad Karanam has rendered judgement on an appeal made by M/s T.P. Roy Chowdhury & Company Pvt’ Ltd.
The Appellate Tribunal observed that from a combined reading of entry number 54 of the Exemption Notification and definition 2(d) of the Exemption Notification that all services and processes are excluded beyond the primary market.
Elaboration of sec 2(d)”agricultural produce” means airy produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses. For food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for the primary market”
The term primary market in common parlance refers to farmers market like “mandi” “arhat” being a place where the farmers directly sell their product to the buyers like wholesalers, millers, food processing units. etc. The spirit of the legislature was intended to boost the agricultural sector of the home country and not that of a foreign land.
While dismissing the appeal the Appellate Tribunal observes that the primary market in the instant case being, located in foreign shores does not conform to the definition as stated above., Further there is no evidence that the crams have not undergone any type, of treatment before leaving the foreign country from where they have been imported into India and finds no infirmity.
The Government of France on 8 January, 2020 published the guidelines on VAT that affects online platforms. An explanation is provided on the extent to which the reporting obligations will affect the platforms.
The operators of the concerning platforms should register guidelines with the authorities to obtain a number from the identification system of the business directory (SIREN).
As per Article 10 of Law No.2018-898 of 23 October 2018 on the fight against fraud, on occasion of transactions requires to:
1. provide fair, clear and transparent information on tax obligations and social responsibility of people who carry out commercial transactions through it.
2. send electronically to sellers, providers or parties to the exchange or sharing of a good or service who have received, as a user of a platform, sums on the occasion of the transaction with information documenting the following:
3. send electronically to the tax authorities, no later than January 31 of the year following the year for which the information is given, a document summarizing all the information mentioned in (2).
For Guidelines Click here.
The Madhya Pradesh State Government has announced Deepika Padukone starrer movie “Chhapaak’ Tax free in the state.
Chhapaak is an upcoming Bollywood movie directed by Meghna Gulzar and produced by her as well as Deepika Padukone in collaboration with Fox Star Studios. Based on the life of Laxmi Agarwal, it stars Padukone as an acid attack survivor, alongside Vikrant Massey.
The film will be released in India on 10 January 2020.
The Madras High Court in the case of M/s Gemini Edibles and Fats India Pvt. Ltd. v Union of India while making liable the petitioner to pay appropriate social welfare surcharge held that the recovery of SWS cannot be done by making debit from the value of the scrips produced by the petitioner.
The petitioner is engaged in the manufacture and marketing of edible oils and fats for which the petitioner imports goods attracting Customs Duties. The petitioner offset such Customs Duties by procuring scrips under the MEIS and SEIS and utilizing such scrips which he had procured from various exporters who had obtained the same under Chapter 3 of FTP. Customs Duty on Import against MEIS and SEIS scrips has been exempted by way of relevant notifications.
On assessment of an import undertaken by the petitioner, his MEIS and SEIS licenses were debited by the amounts pertaining to SWS for which the petitioner seeked methodology adopted by the authority in deducting such an amount.
The order of the Commissioner of Customs has been challenged wherein and whereby the petitioner was informed that 49.5% (including SWS and BCD) of the goods imported is being debited from Scrips and no excess duty is being collected and thus, the question of refund does not arise.
The petitioner submits that the respondents have instead of debiting only the amount of BCD from the scrips obtained, the respondents have also debited the Social Welfare Surcharge from the scrips which is illegal and arbitrary. Further, in absence of machinery provisions for debiting SWS from the scrips, the revenue ought not to have debited the same from the scrips.
The respondent submits that SWS is not an independent levy but takes the nature and color of the parent levy i.e. BCD. If BCD is exempt, SWS is also exempt. If BCD is a debitable duty credit scrip, SWS shall also be debitable.
The Bench constituting of Justice K. Ravichandrabaabu while referring to the decision of the Apex Court in M/s Unicorn Industries held that SWS levied under Section 110(3) of the Finance Act, 2018 is an independent levy imposed and collected under different enactment i.e. Finance Act, 2018. Further, SWS is intended totally for the different purpose in not taking the color of parent levy i.e. customs duty.
The scope of exemption to such scrips has been held to not be against the payment of duty in toto but against the payment of duty in cash, so as to enable the petitioner to use those scrips for debiting the quantum of duty. Also, the SC in the case of M/s Unicorn has held that when a particular kind of duty is exempted, other types of duty or cess imposed by legislation for a different purpose cannot be said to have been exempted.
Subscribe Taxscan Premium to view the JudgmentThe Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Mumbai, set aside the order of the Commissioner of Appeals, stating that show cause notice issued after expiry of 5 years would be barred by limitation.
The Tribunal quoted the cases, CCE, Ahmedabad-I Vs. M. Square Chemical reported in 2008 (231) ELT 194 (SC) and Ilavia Enterprises Vs. CCE, Jaipur reported in 1997 (91) ELT 26 (SC) to support the Ruling.
The Ruling was made in the case of M/s Aviat Health Care Pvt. Ltd. v. Commissioner of CGST, Belapur. During the EA-2000 audit, the appellant, a manufacturer, and trader of pharmaceutical products was found rendering exempted services during the year 2008-2009. The appellant was also found not maintaining a separate account as provided in the Rule. A show cause notice was issued for recovery along with interest and proportionate penalty. The matter was adjudicated upon, and the duty demand along with interest was confirmed by the Assistant Commissioner, Service Tax, and further confirmed by the Commissioner (Appeals).
The Counsel for the appellant argued that show-cause notice was issued even after the extended period of 5 years of limitation was over as the duty demand for trading activity relates to the financial year 2008-09 and the show-cause notice was issued on 22.04.2014. The appellant also argued that no allegation concerning the suppression of facts with the intent to evade duty was made against the appellant even to invoke an extended period and trading being held as not a service.
However, the Revenue argued that the date of filing of Service Tax return is supposed to be taken into consideration for computation as per provision contained in Section 73(6) for the Finance Act, 1994. The Revenue further contended that since the ST-3 return copy submitted by the appellant indicates that ST-3 return for the disputed period was filed on 22.04.2009, the show-cause notice was well issued within the period of limitation.
The Tribunal ruled that the show-cause notice issued is barred by the period of limitation as it was issued after the stipulated period. The Tribunal also noted that the “extended period can only be invocable under certain contingency primarily when appellant-assessee intended to evade payment of tax”.
The Tribunal also criticized the Officials observing that since no evidence of fraud, collusion, willful misstatement, suppression of fact or contravention of the provision of the Finance Act or Rule was found, what could have prompted the Officials to go beyond the statutorily prescribed 18 months.
The Tribunal also observed that “the respondent-department can travel only backward from the current assessment to the past period and not like the audit people who usually move forward from the year the last audit was closed up to the current assessment/ financial year”.
The Tribunal also quoted Medisary Laboratories P. Ltd. Vs. CCGST, Kolhapur vide final Order No. A/87803/2018 dated 01.11.2018 and observed that “‘trading’ is a pure sale which is subjected to the taxable jurisdiction of the provisional Government and no Service Tax liability accrues from pure sale un-associated with any service component”.
The decision was made by a single bench of the Tribunal consisting of Hon’ble Dr. Suvendu Kumar Pati, Member (Judicial).
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal (ITAT), Pune ruled that that the benefit of the TDS should be given for assessment year for which corresponding income is assessable.
Ruling was rendered by Vice President R.S.Syal and Judicial Member Viswanethra Ravi on an appeal given by M/s. Mahesh Software Systems.
The assessee is engaged in the business of providing software services. It claimed credit for TDS amounting to Rs.8,41,050/- which was not appearing in Form No.26AS. On being called upon to explain as to how the benefit of this TDS was claimed, the assessee submitted that it raised invoice on Ashoka Leyland, Chennai, for Rs.84,10,500/- in March, 2011. Since tax of Rs.8, 41,010/- on the invoice amount was deposited by Ashoka Leyland in April, 2011, they showed it in the succeeding year. The Assessing Officer (AO) did not accept the contention of the assessee by relying on Rule 37BA(1) of the Income-tax Rules, 1962. The ld. CIT (A) also affirmed the assessment order on this point.
The observed that 37BA which is reproduced as under:“Credit for tax deducted at source for the purposes of section 199. (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorized by such authority.
Tribunal ruled that the benefit of TDS is to be given, is governed by sub-rule (3) of Rule 37BA, which unequivocally provides through clause (i) that the ‘credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable’. It is, ergo, abundantly clear from the mandate of Rule 37BA(3)(i) that the benefit of TDS is to be given for the assessment year for which the corresponding income is assessable. Since the income of Rs.84.10 lakh, on which tax of Rs.8,41,050/- was deducted at source, is patently assessable in the year under consideration, we hold that the benefit of the TDS should also be allowed in the same year, namely, the year under consideration. We, therefore, overturn the impugned order and direct accordingly.
Subscribe Taxscan Premium to view the JudgmentThe Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2020 on 6th January 2020.
The amendment clarifies that a person, who is not eligible under the Code to submit a resolution plan for insolvency resolution of the corporate debtor, shall not be a party in any manner to a compromise or arrangement of the corporate debtor under section 230 of the Companies Act, 2013. It also clarifies that a secured creditor cannot sell or transfer an asset, which is subject to the security interest, to any person, who is not eligible under the Code to submit a resolution plan for insolvency resolution of the corporate debtor.
The amendment provides that a secured creditor, who proceeds to realize its security interest, shall contribute its share of the insolvency resolution process cost, liquidation process cost, and workmen’s dues, within 90 days of the liquidation commencement date. It shall also pay the excess of realized value of the asset, which is subject to the security interest, over the number of its claims admitted, within 180 days of the liquidation commencement date. Where the secured creditor fails to pay such amounts to the Liquidator within 90 days or 180 days, as the case may be, the asset shall become part of Liquidation Estate.
The amendment provides that a Liquidator shall deposit the number of unclaimed dividends if any, and undistributed proceeds, if any, in a liquidation process along with any income earned thereon into the Corporate Liquidation Account before he submits an application for dissolution of the corporate debtor. It also provides a process for a stakeholder to seek withdrawal from the Corporate Liquidation Account.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal (ITAT) Bangalore held that the delay in furnishing audit reports has resulted only in the technical venial breach which does not cause any loss to the exchequer.
The ruling was made by a division bench comprising of members Shri B.R Baskaran, Accountant Member, And Smt. Beena Pillai, Judicial Member in the case of Arka Eduserve Pvt. Ltd, Vs The Income-tax Officer. The assessee has filed this appeal challenging the order passed by Ld CIT(A) Bengaluru confirming the penalty levied by the AO u/s 271B of the Act for the assessment year 2014-15 for not furnishing the tax audit reports as required u/s 44AB of the Act.
The assessee filed its return of income and the tax audit report for AY 2014-15 on 30-03-2015. As per the provisions of Sec.44AB of the Act, the tax audit report should have been furnished to the AO before the due date for filing return of income prescribed u/s 139(1) of the Act. In the instant year, the due date was 30.11.2014. In view of the above-said failure, the AO initiated penalty proceedings u/s 271B of the Act.
The assessee submitted that it was under the impression that the tax audit report could be filed any time before 31.3.2015 and the major source of income of the assessee was rental income and the TDS deducted by the tenants were not fully reflected in Form No.26AS, which resulted in delay in filing return of income as well as tax audit report. Not satisfied with the explanations of the assessee, the AO levied a penalty of Rs.1.50 lakhs u/s 271B of the Act. The Ld CIT(A) also confirmed the penalty.
The court held in the light of the order of Cochin bench of Tribunal in the case of Attinkara Electronics vs. ITO (ITA No.601/Coch/2018 dated 01-03-2019) that the audit report was obtained within the due date prescribed u/s 44AB of the Act. The delay has occurred due to a delay in filing the return of income. The assessee has stated that it was under bonafide belief that the audit report could also be filed before 31.3.2015. Hence the view taken by the Cochin bench of Tribunal that the delay in furnishing audit report has resulted only in the technical venial breach which does not cause any loss to exchequer could be applied here also. Accordingly, set aside the order passed by Ld CIT(A) and direct the AO to delete the penalty levied u/s 271B of the Act.
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