The Delhi High Court upheld the decision of the appellate tribunal that the assessee’s failure to file the return at the material time cannot be considered as willful.
That search and seizure operations under Section 132 of the Income Tax Act were conducted in respect of the Standard Watch Group of Concerns. This included search in the premises occupied by the respondent and his brother – premises bearing no. S-511, New Delhi.
The respondent and his brother S. K Gupta were residing on different floors of the same premises. Thereafter, on 21.04.2010, a notice under Section 153A of the Act was issued to the respondent calling upon the petitioner to furnish a return in respect “of the company in which you are assessable for the Assessment Year 2008-09” within sixteen days of the service of the said notice.
Thereafter, a show-cause notice dated 15.11.2010 was issued to the respondent. Subsequently, another notice dated 06.06.2011 under Section 153A of the Act was issued, calling upon the respondent to file a return of income in respect of “the individual/company in which you are assessable for the Assessment Year 2008-09” in the prescribed form within a period of fifteen days from the service of the said notice.
The respondent responded to the said notice and relying upon his response to the earlier show-cause notice (letter dated 12.10.2010, which was filed on 26.11.2010). He stated that the complete records relating to IT Returns including relevant data, photocopies, and relevant documents were in possession of his brother, who was responsible for income tax compliances and filing of income tax returns for the whole family.
The respondent further stated that there were certain disputes between his family and his brother (Shri Suresh Gupta) and the complete records had not been returned by Shri Suresh Gupta to him or his family. He stated that he had no copies of the earlier returns and/or related documents assessee’s failure.
However, he further stated that the return filed earlier be treated as a return in response to the notice under Section 153A of the Act.
The single bench of Justice Vibhu Bakhru observed that in the circumstances, it would be necessary for the respondent to examine all material documents seized during the search and seizure operations before filing the return. The respondent had already indicated his difficulty in doing so in view of the family disputes and had requested for inspection and copies of all documents seized during the raid.
Subscribe Taxscan Premium to view the JudgmentThe Madras High Court has pulled up the Greater Chennai Corporation for not revising the property taxes for nearly 20 years for the safeguarding of political interests.
A Public Interest Litigation has been filed to direct the local bodies to formulate and notify transparent and uniform rules, procedures and applicable rates for determining property taxes by the Assessment authorities in respect of all categories of buildings throughout Greater Chennai Corporation areas. The appellant wants a fair levying and collection of property tax as there are many malpractices by the officials in the levy of property tax and collection.
The division bench comprising of Justice N Kirubakaran and Justice P Velmurugan observed, “It is a known fact that last revision of property tax in Chennai was only during 1998. Though every five years, the property tax has to be revised, the successive Governments deliberately omitted to revise the property tax for their political interest. They are afraid that due to the revision of property tax, their electoral fortunes will be affected. The past and present Governments are not exceptions. As per the statute, if the revision of property tax should have been done during 1998, the subsequent revisions could have been during 2003, 2008,2013 & 2018. The five revisions could have augmented the income of the Chennai Corporation. . . . . .The local body, as well as the Government, should have enough funds for the purpose of providing all the amenities to the citizens. In the absence of sufficient funds, the Corporation is unable to pay the compensation for loss of properties caused due to 2015 deluge. There is a shortage of staff also since the Corporation is not in a position to pay for their salary and therefore, recruitment could not be made. The revision which has been made after 20 years at the instance of this Court is also suspended. The sufferer is only the common man. Hence, steps should be taken by the committee to give the recommendations at the earliest.”
The Commissioner of Corporation, Greater Chennai Corporation and the Secretary, Municipal Administration, and Water Supply Department, Chennai has been directed to appear before the court on 18th February 2020.
The High Court of Delhi has set aside an order passed by the Foreign Exchange Appellate Tribunal on the ground that the evidence on which such penalizing order was passed holds no value if such a statement is retracted.
A search was conducted at the residence of one Sh. Satish Kumar Sharma. An aggregate amount of ₹8,25,000/- and various documents were seized. According to the Enforcement Directorate, the said documents disclosed that certain payments had been made to one Ashish. Inquiries revealed that the telephone connection was corresponding to the telephone number which was installed in the office of M/s Anukampa Tours and Travels (P) Ltd and one Sh. Ashish Jain was employed with the said concern. The business premises of M/s Anukampa Tours and Travels was searched and Indian currency amounting to ₹7,95,000/- and various documents were found in the said premises. According to the Enforcement Directorate, Ashish Jain had stated that the said amount was received from some unknown person under the instruction of a person resident in Dubai. On the next day of the search, he retracted his statement. Though no incriminating documents were found, a show-cause notice was issued initiating proceedings under section 51 of the Foreign Exchange Regulations Act(FERA) violation and an amount of Rs 7,95,000/- was confiscated. The Appellant had stated before the Adjudicating Authority that Ashish Jain had retracted his statement as the same had been recorded forcibly and under coercion but it was not entertained and Penalty of Rs.75,00,000 was imposed.
Justice Vibhu Bakhru while setting aside the order held, “In the present case, neither the Adjudicating Authority (Deputy Director, Enforcement Directorate) nor the appellate authority (Special Director, Appeals) had applied their minds on the question whether the statement made by Ashish Jain was voluntary in view of its retraction on the very next day. In fact, the Tribunal had proceeded on the basis that it was accepted by the Appellate Authority (Special Director, Appeals) that the statement of Ashish Jain had no evidentiary value. This Court is of the view that the statement of Sh. Ashish Jain could not be relied upon as, first of all, it was retracted on the very next day. And, secondly, the statement was very vague and bereft of any particulars, inasmuch as, it did not name or describe any person from whom funds had been received and whom the said funds had been distributed to. . . . The appellant has been deprived of his funds for a considerable period of time. As observed earlier, the confiscation of the amount is wholly illegal and unsustainable. This Court notes that Rule 8 of the Foreign Exchange Management (Encashment of Draft, Cheque, Instrument, and Payment of Interest) Rules, 2000 provides for repayment of interest at the rate of 6% per annum from the date of seizure till the date of payment. Thus, this Court is of the view that the said amount is required to be returned to the appellant along with interest at the rate of 6% per annum. It is so directed.”
Subscribe Taxscan Premium to view the JudgmentThe Gauhati High Court has ordered the revenue department to issue fresh Show Cause notice raising demands for recovery of service tax from BSNL and exclude the “non-taxable” services from the services provided at the Secondary Switching Area (SSA).
The Finance Act, 1994 contains a provision for realizing service tax on some of the services provided by the Secondary Switching Area (SSA) under the BSNL was liable to be taxed @ 5% on gross receipt. On 28-03-2003, the Deputy Commissioner, Central Excise, Guwahati had issued a Show Cause notice addressed to the respondent Bharat Sanchar Nigam Limited (BSNL), Assam Circle, Guwahati and four of its SSAs demanding a sum of Rs. 3,47,49,000/- being the shortfall of service tax recoverable from the department in terms of Section 73(a) of the Finance Act, 1994 as well as for the realization of interest and penalty as per the provision of the said act. In the Show Cause notice dated 28-03-2003, it has been, inter alia, projected that the respective SSAs had failed to pay service tax on the “gross receipt” charged by the service providers. The substantial question of law raised by BSNL in subsequent appeals was whether service tax was leviable on the actual receipts and not on the gross receipts. The BSNL received a favorable judgment for the appellate authority but it was challenged the department before the high court.
Justice Suman Shyam and Justice Hitesh Kumar Sarma agreed with the findings of the appellate authority in this matter and held, “We, however, make it clear that notwithstanding this order, it will be open for the appellant to issue fresh Show Cause notice raising demands for recovery of service tax as may be permissible under the law. Such demand, if any, raised by the appellant, shall clearly specify and exclude the BSNL “non-taxable” services from the gross receipt and also indicate the period as well as the particulars of the SSA to which the same relates to. Upon receipt of such notice, it will be open to the respondent to avail all procedural safeguards as may be permissible under the law. We also make it clear that the order dated 28-08-2008 shall cease to have any effect on the matter.”
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal (ITAT), Kolkata bench has held that the provisions of disallowance under section 40(a)(ia) of the Income Tax Act, 1961 does not apply to the short deduction of tax as it covers only cases of non-deduction of tax. The department, while completing the proceedings against the assessee-Company, has invoked sec.40(a)(ia) disallowance of 1,19,95,048/- on account of non-deduction of TDS under section 194C of the Act on various heads of payments.
The Officer noted that the appellant was liable to deduct TDS of Rs4,08,954 under section 194C of the Income Tax Act from the total expenditure of Rs.2,08,88,541 relating to can outwards, labour charges, car hire charges, security charges, advertisement, and office decoration charges. However, the deduction was made only of Rs.1,61,856 resulting in the short deduction of rupees 2,47,098.
According to section 40(a)(ia), any sum payable to a resident, which is subject to deduction of tax at source, would attract 30% disallowance if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.
Overruling the decisions of the lower authorities, the Tribunal held that this is not an instance of the non-deduction of TDS.
“Learned departmental representative fails to dispute that gong by the Assessing Officer’s(AO) detailed discussion in pages 2 to 3 in his assessment order dated 07.01.2016, the assessee had indeed deducted TDS u/s.194C albeit at a lesser rate followed by three other head(s) of 194-H, 194-I and 194- J involving nil deduction. And also that the Assessing Officer(AO) had disallowed the impugned sum under the first head only. We observe in this factual backdrop that hon’ble jurisdictional high court’s decision in Commissioner of Income Tax vs. S.K. Tekriwal 361 ITR (Cal) holds that the impugned disallowance u/s 40(a)(ia) does not apply in a case involving short deduction of TDS. We, therefore, go by the very reasoning and direct the Assessing Officer(AO) to delete the impugned disallowance,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentIndia’s GST (Goods & Services Tax) Councils practically rewrote the tax code a few months prior without actually changing anything. It decided to just translate it to the current language and, as a result, online casino operators were suddenly on the hook for hundreds of millions of dollars. The gaming industry has been continuously attempting to ask the GST Councils to lighten up, but they never manage to work anything out. They ask for applicable tax rates to be reduced, or for the GST to change the system of how it calculates taxes, but the council just won’t budge. It has recently been discovered that the Group of Ministers (GoM), though a panel only started earlier in 2019, is going to have to take their place and make the call because the GST Councils can’t make a decision.
What are the issues?
Casino companies like comeon and countless others are frequently trying to address India’s GST Council, which is currently having issues figuring out gambling taxes. There are two main problems – one resides on how taxes on lotteries are collected and the other involves how gambling taxes are calculated. The Maharashtra Finance Minister, Sudhir Mungantiwar, built the GoM panel mainly to review the application process of GST rates on the distribution of lottery tickets. State lotteries pay a tax rate of 12%, but private distributors pay 28%. Some have called the differentiating rates unconstitutional or unfair, but the Calcutta High Court has already stated that existing laws allow the structure, adding, “It is the duty of such Council to interpret the rates of tax.”
The plea by the gaming community for a fair, universal rate fell to nothing when the GST Council met a few weeks ago. Most of the members of the council, including Union Finance Minister Nirmala Sitharaman, voted against the pleas of the operators.
The issue being avoided?
There is also a big argument against the GST Council’s current ideal calculation of the tax code. The council assures that the taxes must be paid on the face value of the bet, which the entire casino industry has said isn’t possible. It appears that the council wants to pass over and have the Group of Ministers(GoM) make the call, instead. Pramod Sawant, the chief minister of Goa, said, “There was some issue on GST on gross revenue, which has now been handed to the Group of Ministers for further discussion. It is for the GST council to decide.”
Conclusion.
In the meantime, the casinos are still without proper regulation and India can’t get a better grasp on its gambling-related finances. There is no clarity on when the Group of Ministers(GoM) might consider making a ruling, or if it will pass on the issue and send it back to the GST Council.
The Chennai bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) held that the Service Tax on consideration received by the appellant from the Foreign Service Recipient under Storage and Warehousing services cannot be subject to levy of service tax.
The appellants are engaged in the business of logistics supply, chain management, clearing & forwarding, licensed CHA, etc., and are rendering services at Free Trade Warehousing Zone (FTWZ), as per Authorized operations of Letter of Approval (LOA) issued by the Development Commissioner for providing various logistic services.
On the basis of investigation conducted by DGCEI, that appellant though rendered storage and warehousing services within the FTWZ to clients based abroad as well as Indian clients during the period July 2012 to March 2015 they did not discharge service tax on such services.
They also did not discharge service tax on various other services accounted for by them. SCN was issued proposing to demand service tax on the services provided by them from the Free Trade Warehousing Zone(FTWZ) zone exclusively to foreign-based clients.
After due process of law, the original authority held that the services provided to foreign clients do not qualify as export of services and thus confirmed the demand, interest and imposed penalty. On appeal, the Commissioner (Appeals) upheld the same. Hence this appeal.
The Coram comprising of Judicial Member, Sulekha Beevi C.S and Technical Member, Anil K Shakkarwar delivered the order based on an appeal filed by M/s Broekman Logistics India Pvt Ltd.
The bench observed the overriding effect of section 51, Section 26 provides for exemption of duties and taxes. Section 26, Clause (e) provides for exemption from service tax. Section 51 states that the Act will have an overriding effect notwithstanding anything inconsistent in any other law. This Act thus will override the Finance Act, 1994, as well as the Rules framed thereunder to give effect to the exemption contained in Section 26.
The bench further said that the consideration is received in foreign currency as well as the service recipient is a person placed outside India. The department cannot then contend that there is no export of services. The demand of service tax on consideration received by the appellant from the foreign service recipient under Storage and Warehousing services cannot be subject to levy of service tax under reverse charge mechanism.
Subscribe Taxscan Premium to view the JudgmentThe Madras High Court has held that the liability to pay the interest on delayed tax is an automatic liability but the quantification cannot be unilateral.
The High Court cannot determine the quantity of interest. The case was that after the introduction of GST basically three types of returns are to be filed. GSTR-1 is Returns showing the details for the outward supply of goods or services supplied by the assessee.
GSTR-2: Returns showing the details for the inward supply of goods or services supplied by the assessee. GSTR-3: Returns showing the details of the total purchase and total sale and tax payable and the input tax credit.
The petitioner could not file the monthly returns of his income because of the recession in the market. As a consequence, the Superintendent of Central Excise Duty demanded a sum of money as an interest for the belated payment of tax. The petitioner no doubt was ready to pay the interest in the tax, however, he was not satisfied with the quantification of the interest calculated.
The issue raised in this case was whether the quantification done by the Superintendent of Central Excise Duty is binding of the petitioner or not?
The Single Bench of Justice K. Ravichandra Babu accepted the fact that the liability to pay the interest on delayed tax is an automatic liability but the quantification cannot be unilateral.
However, the writ petition was dismissed on the grounds that the court can not determine the quantification of the interest imposed on the petitioner.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Direct Taxes (CBDT), in order to appreciate and encourage the outstanding work of the Income Tax Officers or officials in e-assessment, Central Board of Direct Taxes (CBDT) will felicitate the Income Tax Officer and the criteria are specified for the purpose of felicitation.
The felicitation started from January 2020 onwards and every month the best performing Income Tax Officer The Central Board of Direct Taxes (CBDT), in order to appreciate and encourage the outstanding work of the Income Tax Officers or officials in e-assessment, Central Board of Direct Taxes (CBDT) will felicitate the Income Tax Officer and the criteria are specified for the purpose of felicitation. achieving excellence in the prime areas such as collection, investigation, audit, administration, and innovation in the organizational functioning will be selected for felicitation.
The Committee of Commissioners will undertake the selection process. The committees will be formed in each region and the name of the officers will be displayed in the respective regions. The following 5 categories of officers will be selected for felicitation:
Apart from monthly selection, at the end of each financial year, the said Committee shall also select one or team of Officers in each of the above-mentioned committees.
Further, these officers will be felicitated on the Income Tax Day, in a public function which is organized in the region and the name along with a photograph of such officers will be displayed on the ‘wall of fame’ in Income Tax Achieve or at any prominent place at NADT every year. Further, the outstanding work of the officers will be documented for the purpose of training.
The outstanding work of the Income Tax Officers will be considered for the inclusion in ‘Let us share’, provided that there must be selected by the committee for this purpose.
Thus for this purpose, various criteria are been fixed such as nomination criteria, eligibility, nomination procedure, selection procedure, etc.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Indirect Tax & Customs (CBIC) has issued an instruction wherein it facilitates 24×7 custom clearance facilities across the nation including designated Sea Ports & Airports because of the coronavirus in the country of China. This condition will remain in operation until the end of May 2020.
The instruction was issued by Vineeta Sinha, OSD (Custom) which was addressed to all the Principle Chief Commissioners and commissioners of customs; all Principle Chief Commissioners and commissioners of Custom and Central Tax.
The Central Board of Indirect Tax & Custom (CBITC) decided to introduce 24×7 hours custom clearance facility because of the ongoing shutdown in China on the account of Coronavirus outbreak.
Further, there is an apprehension that there may be disruption in the supply of raw material or inputs to all the Indian Industries, which are completely dependent on China for the Raw Material. Further, it is also speculated that there may be a dip in the off-take in export to China.
Therefore, this facility was introduced in order to address the congestion or any kind of delay because of the prevailing conditions. Further, CRCL labs will be functioning 24×7 hours so as to make the test results will be made available at the earliest. But the 24×7 hour’s facilities will be in operation till the end of May 2020.
Further, the Central Board of Indirect Tax & Customs (CBIC )through this instruction has requested the Chief Commissioners to immediately work out the arrangement and to deploy the adequate number of officers in order to implement this 24×7 hours facility. The officers must be deployed at seaports or Air Cargo Stations or surge. Most importantly the record pertaining to BEs or SBs which are filed beyond the normal office hours, station-wise and reported to the Board daily at the website namely vineetsinha.irs@gov.in.
The Income Tax Appellate Tribunal (ITAT), Cuttack bench has held that in order to apply the provisions of section 44AD of the Income Tax Act, 1961, there is no requirement that the proprietor of the institution should possess a qualified professional degree.
The assessee was engaged in the medical profession and running a nursing home. The main source of income of the assessee is from the consultancy/services from the treatment of patients which was being given by the doctors/professionals/technicians etc. During the course of assessment proceedings, the Assessing Officer(AO) noted that certain incriminating documents were found and seized from the assessee during the search proceedings. He further noted that the assessee does not submit the books of accounts as mandated under section 44AD of the Income Tax Act.
Before the Tribunal, the assessee submitted that it was not required to maintain any books of accounts and he had filed return as per section 44AD of the Act. It was further contended that the assessee is neither a doctor nor possessed any other professional or technical qualification to be engaged in the medical profession.
The provisions of section 44AD are originally provided to give relief to small taxpayers engaged in any business, except certain businesses provided under section 44AE.
While rejecting the contentions of the assessee, the Tribunal observed that the assessee has maintained various registers and money receipt books containing details of the fee received from patients against the medical services obtained by the patients.
“Therefore, it cannot be said that assessee is not engaged in the medical profession. It is not necessary that the ITAT proprietor of the institution must have a qualified degree. The predominant purpose of service needs to be tested for falling u/s.44AA of the Act, 1961 which is existing in the present case. The Assessing Officer(AO) has calculated the income of the assessee in a detailed manner after verifying from the seized record,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Cochin bench of the Income Tax Appellate Tribunal (ITAT), Cochin bench has held that the expenses incurred by a hotel for its beautification and maintenance are allowable as business expenditure.
The assessee, a three-Star Hotel incurred certain expenses towards the repair and maintenance of the existing building to keep it fit to get renewal of the three-star classification and claimed deduction of such amount in their income tax return. The assessee claimed that they were already having Three Star facility from the year 2006 and the same was to be renewed for a period of five years. In order to continue the same business in the same way, the assessee had to incur these expenses.
The Assessing Officer rejected the claim for expenditure by treating the same as capital in nature.
Citing a catena of decisions, the Tribunal bench observed that by no stretch of imagination can it be said that painting and other incidental expenses are capital expenses.
“In the Hotel industry, huge expenditure has to be incurred with a view to keep the place fit and beautiful so that guests can enjoy the good atmosphere and ambience of the place. Without a good ambience and atmosphere, it would not be possible to attract customers for running the hotel business carried on by the assessee. In this case, though the expenses incurred cannot be allowed as deduction as current repairs certainly expenses would not be a The Cochin bench of the Income Tax Appellate Tribunal (ITAT), Cochin bench has held that the expenses incurred by a hotel for its beautification and maintenance are allowable as business expenditure. and all conditions being satisfied u/s. 37 of the I.T. Act, expenses are to be allowed under the said section. The expenses incurred in a hotel industry may be current repairs which expenses are incurred on a yearly basis and expenditure incurred on a periodical basis,” the Tribunal said.
“On the basis of these expenses incurred, the assessee did not derive a new asset and there was no increase in the total rooms nor there was an increase in the total area of the hotel. The expenditure incurred by assessee such as the painting of the hotel, replacement of floor tiles, glazing works, etc. are nothing but periodical expenditure which a hotel has to necessarily incur for its upkeep and cannot be termed as capital expenditure,” the Tribunal added.
Subscribe Taxscan Premium to view the JudgmentThe Central Board Of Direct Taxes ( CBDT ) has allowed condonation of delay to Charitable Institutions who had to seek the same for the assessment year 2016-2017 onwards on the grounds of Hardship.
The Board had earlier issued Circulars authorizing the Commissioners of Income Tax to admit belated applications of Form 9A and Form 10 and to decide on merit the condonation of delay u/s 119(2)(b) of the Income-tax Act, 1961 (Act).
However, in those cases where the Income Tax Returns have also been filed beyond the due date prescribed under section 139(1) of the Act, the condonation of delay in filing of Form 9A & Form 10 by the Commissioners is not of any help to the assessee, as section 13(9) of the Act stipulates twin conditions of filing of Form 9A/Form 10 and also of filing Return of Income before the due date to the Charitable Institutions.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Indirect Taxes and Customs (CBIC) enabled the option to file GSTR-9 and GSTR-9C for the financial year 2018-19.
GSTR-9 is an annual return to be filed yearly by taxpayers registered under GST. It consists of details regarding the outward and inward supplies made/received during the relevant previous year under different tax heads i.e. CGST, SGST & IGST and HSN codes. Basically, it is a consolidation of all the monthly/quarterly returns (GSTR-1, GSTR-2A, GSTR-3B) filed in that year. Though complex, this return helps in extensive reconciliation of data for 100% transparent disclosures.
GSTR-9C is reconciliation statement which is every registered person whose turnover during a financial year exceeds the prescribed limit of rupees two crores shall get his accounts audited by a chartered accountant or a cost accountant.GSTR-9C is a statement of reconciliation between the Annual Returns in file GSTR-9 for an FY and the figures as per the audited annual Financial Statements of the taxpayer.
It can be considered to be similar to that of a tax audit report furnished under the Income-tax act. It will consist of gross and taxable turnover as per the Books reconciled with the respective figures as per the consolidation of all the GST returns for an FY. Hence, any differences arising from this reconciliation exercise will be reported here along with the reasons for the same.
The late fees for not filing the annual return on the due date are Rs. 200 per day. This implies that the person has to pay Rs. 100 under the CGST Act and Rs. 100 under the SGST Act as a penalty in case of delay. The penalty is subjected to a minimum of 0.25% of the taxpayer’s turnover in the relevant state. There are no fees on IGST yet.
The due date to file GST annual for the Assessment Year 2018-19 is 31st March 2020.
The Madras High Court has applauded the Government for introducing Faceless E-assessment facilities while also cautioning the authorities that not all amounts received by a company during the demonetization period which is huge and explained in nature cannot be concluded as unaccounted money.
The Assessee Salem Sree Ramavilas Chit Company Pvt. Ltd. contended that the Deputy Commissioner had erroneously concluded that the petitioner has not properly explained the deposit of cash amounting Rs.67,37,500/- collected during the demonetization into their account and had claimed the source of cash deposit during demonetization as the accumulated cash balance as on 08.11.2016 wrongly. The Deputy Commissioner had also concluded that the petitioner had not properly explained the source and the purpose of huge cash along with party wise break up as was requested vide under Section 142(1) of the Income Tax Act, 1961.
Justice C. Saravanan while allowing the writ petition held, “The Government of India has introduced E-Governance for the conduct of assessment proceedings electronically. It is a laudable step taken by the Income Tax Department to pave way for an objective faceless E-assessment without human interaction. At the same time, such proceedings can lead to erroneous assessment if officers are not able to understand the transactions and statements of accounts of an assessee without a personal hearing. The respondent should have to be therefore at least called for an explanation in writing before proceeding to conclude that the amount collected by the petitioner was unusual……. Under these circumstances, the impugned order is set aside and the case is remitted back to the respondent to pass a fresh order within a period of sixty days from date of receipt of a copy of this order. The petitioner shall file additional representation if any by treating the impugned order as the show cause notice within a period of thirty days from the date of receipt of a copy of this order. Since the Government of India has done away with the human interaction during the assessment proceedings, it is expected that the petitioner will clearly explain its stand in writing so that the respondent assessing officer(AO) can come to an objective conclusion on facts based on the records alone. It is made clear that the respondent will have to come to an independent conclusion on facts uninfluenced by any of the observations contained herein.”
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Direct Taxes (CBDT) has recently amended the definition of ‘unauthorized colonies tax relief under the newly inserted rule 11UAC wherein it was clarified that ‘unauthorized colony’ shall have same meaning as assigned to it in section 2(b) of the NCT of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Act, 2019.
Rule 11UAC was inserted to provide that provisions of Sec. 56(2)(x) shall not be applicable to any immovable property received by a resident of the unauthorized colony.
Unauthorized colonies are the residential colonies constructed without seeking the required permission for the layout or building plans. Consequently, conveyance deed for these colonies is not registered by the registrar/sub-registrar unless these are regularised by the Government.
Last year, the Central Government introduced new legislation to regularise 1,728 unauthorized colonies as per which, the ownership rights of residents in these unauthorized colonies shall be recognized. The Central Board of Direct Taxes (CBDT) had also issued a notification to exempt these residents from any tax liability that may arise under Section 56(2)(x) from such a regularization process. This was introduced after the Supreme Court decision in case of Suraj Lamp & Industries (P.) Ltd. v. the State of Haryana wherein it was held that the transaction of purchase and sale of properties in these colonies is evidenced by a Power of attorney, possession letters, etc. which does not convey any title in the property.
“unauthorized colony” shall have the same meaning as assigned to it in clause (b) of section 2 of the National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Act, 2019 (45 of 2019)’,” the Central Board of Direct Taxes (CBDT) tax relief Notification said.
Section 56(2)(x) of the Income Tax Act, 1961 provides that where any person receives money, immovable property or specified movable property from any person without or for inadequate consideration then the money or difference between the value of property so received and actual consideration thereof is chargeable to tax as income from other sources in the hands of the recipient, subject to certain conditions.
Subscribe Taxscan Premium to view the JudgmentIn the case of M/s M.C. Punjwani vs. Commissioner of Custom, Mumbai Export I, the Custom, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai held that the purpose of compounding of offence against the payment of compounding amount is to prevent litigation and encourage early settlement of the dispute.
The appellant has committed the offence pertaining to the importation of Stainless Steel Plates, which was utilized for the purpose of manufacturing thread protectors for the pipes to be supplied to O.N.G.C. and the benefit of exemption was claimed. Further later on, on the basis of the investigation undergone it was discovered that as required by the license, the threads protectors were not made of stainless steel. Further, it was discovered that the applicant was engaged in the smuggling of the S.S. Plates, and also produced false consumption certificates. The appellant wants to compound the offence against payment of compounding amount.
The issue raised in this case was whether the compounding of offenses against the payment of compounding amount can be done or not?
The Custom, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai comprising of Hon’ble Mr. Ajay Sharma, a Judicial Member in the light of the guidelines issued by Circular dated 2009 held that compounding of offence against the payment of compounding amount is to prevent litigation and encourage early settlement of a dispute. Further, it was held that the application which was filed by the applicant i.e. M/s M.C. Punjwani for compounding falls within the four corners of the circular dated 2009 and as a consequence, the application was allowed by the tribunal. Therefore, the impugned order of the commissioner was set aside.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Indirect Taxes and Customs (CBIC) issued a notice inviting the suggestions, views, comments, etc. from the stakeholders for the purpose of Faceless e-Assessment. For the purpose of facilitation of the matters, the members were requested to give suggestions, views, comments, etc. on the concept of paper before March 3, 2020, on the website namely dircus@nic.in and uscus.dor@gov.in.
Further, the general public and the trade at large were also informed through this notice that the Central Board of Indirect Taxes and Customs (CBIC) is planning to launch Faceless e-Assessment pertaining to the imported goods.
The concept of Faceless e-Assessment is a step towards modernizing the custom administration, with the objective of reducing the burden of compliance for the EXIM community and further to increase the transparency, efficiency, development, and maintenance of the functional specialization, enhance the quality of assessment practices and various other efficiencies.
Faceless e-Assessment is introduced by the Central Board of Indirect Taxes and Customs (CBIC) in order to:
Faceless e-Assessment will further work in the following areas for the improvement of:
The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai held that Cenvat Credit permissible on renting of premises outside the manufacturing factory unit.
The appellant is a manufacturer of “piston ring” having its factory at Satpur Industrial Estate, Nasik. It had availed Cenvat Credit on tax paid for renting of immovable property at Delhi and Mumbai Branch offices.
During the period March 2010 to March 2013 Cenvat Credit amounting to Rs. 33,21,270/- was held, in the EA 2000 audit, to be inadmissible. Appellant was put to show cause notice, was demanded such duty along with interest and equivalent penalty and adjudication order confirm the same with 50% penalty u/s Rule 15(2) of CCR 2004 read with section 11 AC(1)(b) of the Central Excise Act with reduced penalty option by 25% u/s 11 AC(1)(c) in case payment of penalty was made within 30 days and reversal of Rs. 14,55,273/- of Cenvat Credit was also adjusted against total demand as well as appropriated.
Appellant’s unsuccessful attempt before the Commissioner (Appeals) has brought the dispute to this Forum.
The appellate tribunal includes Judicial Member, Suvendu Kumar Pati pronounced the order based on an appeal filed by Anand I Power Ltd.
The Appellant’s contented that he was using the rented premises for “marketing” purposes which are in conformity to Rule 2(l) of Cenvat Credit Rules that clearly covers “advertisement or sales promotion” within the definition of input services.
It was observed by the tribunal that the Commissioner (Appeals) had rejected the appellant’s appeal on the ground that sale of goods that had taken place from the immovable property taken on the rent was situated away from the place of removal.
The Judicial Member further observed that the appellant had acknowledged having registered as an ISD and availing total credit on renting services in the factory was not convincing as the rented premises were used for marketing and sale of goods manufactured in both the units of appellant’s factory.
The Tribunal further noted that the appellant had not disclosed about availing of such Cenvat Credit on renting services in its ER-1 Returns and ultimately he endorsed the findings of the adjudicating authority in confirming the demand, interest, and penalty.
Subscribe Taxscan Premium to view the JudgmentThe Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that the society formed to impart training to the State Govt employees are eligible for income tax exemption under section 12AA of the IT Act, 1961.
Before the authorities, the assessee-Trust claimed that it is registered under Bombay Public Trust Act, 1950 and it is also registered under the Societies Registration Act, 1860 on 01.03.2008. according to them, the trust exists solely for education and the advancement of general public utility and not for profit and activities of the trust are genuine. It was also submitted that the trust is disseminating training which ultimately benefited the public at large.
However, the department rejected the registration merely on the ground of non-furnishing of documents/information by the assessee to study the bona-fides of the objects of the assessee’s Trust.
While allowing the contentions of the assessee, the Tribunal held that the assessee responded to the queries raised by the Ld. CIT(Exemption) and uploaded the requisite documents/information on the ITBA portal of the Department.
The State Government took a view that the finding recorded by the Ld. CIT(Exemption) that the registration cannot be granted for the assessee as it is involved in imparting the training to the employees of the state govt, is incorrect and contrary to the law.
“The State Government Employees working with state govt. belongs to various states of the society and they are not restricted to one religion, caste or creed. If there is an improvement in their workmanship and the managerial skill then it will indirectly benefit the public and also to the Government. In view of the above, we are of the opinion that the assessee is entitled to get relief claimed before us and accordingly, we direct the Ld. CIT(Exemption) to issue the registration certificate from the date of application u/s.12AA of the Act. Thus, the grounds raised by the assessee in this appeal are allowed,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Tripura High Court has directed the state government to grant reimbursement of Value Added Tax(VAT) as per the State Government Scheme which ensured so for Commercial Productions in the state.
The petitioner, Brite Rubber Processor Pvt. Ltd is a company engaged in the manufacture and sale of rubber. For the industrial development of the State of Tripura, Tripura Industrial Investment Promotion Incentive Scheme, 2007 was formulated as per which certain categories of the industrial enterprises commencing commercial production in Tripura would be eligible for reimbursement of the commodity taxes, including Tripura Value Added Tax(TVAT), Central Sales Tax and Purchase Tax paid by the enterprise either for purchase of inputs or for finished products as per applicable provisions. Attracted by the said announcement of the State Government TVAT, the petitioner set up its industrial unit investing an amount of Rs.3,82,00,000/- for processing and manufacturing Indian Standard Natural Rubber at Industrial Growth Centre, Bodhjung Nagar, The petitioner periodically presented claims for reimbursement of the incentives as per the said scheme before the concerned department of the State of Tripura. These incentives, however, were not paid. According to the petitioner, the total amount of such incentives up to the assessment year 2013-14 comes to Rs.2,48,25,659/-. The representatives of the Company had also approached the Government authorities on various occasions for release of the said amount and incentives, however, to date no fruitful result had come out.
Therefore the appellants had approached the High Court of Tripura pleading to grant of reimbursement of Value Added Tax(VAT) paid by the petitioner under the Tripura Value Added Tax(TVAT) Act,2004 for short for the period from 2008-09 to 2013-14 and a further direction that such incentives be released in favour of the petitioner.
Chief Justice Akhil Kureshi and Justice Arindam Lodh, while allowing the petition held, “ It is directed that the respondents shall process the claims of the petitioner for reimbursement of the Value Added Tax(VAT) and other taxes as per the Tripura Industrial Investment Promotion Incentive Scheme, 2007 and pay to the petitioner such sum as found admissible out of the claims of the petitioner for said assessment years. Such payment, however, shall carry no interest till the date of filing of the petition after which the amount will be paid along with simple interest @ 7% per annum till actual payment. These directions shall be carried out within a period of four months from today.”
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