The Telangana High Court has granted bail to CA accused of assisting to launder Rs 1,100 cr from Mumbai to Hong Kong.
The petitioner was summoned on 26.11.2021 and his statement was recorded at Delhi Zonal Office and he has admitted to having issued Form 15CB certificates. The quantum of remittances was clearly not in tune with the nature and conduct of Deepak Nayyar and his companies and he knew these were shell entities and took Rs.1,000/- to 1,500/- per certificate to issue bogus certificates. It is stated that these certificates were essential to send FOWR. Petitioner is not disclosing the role played by SBI staff in doing these remittances, which at first glance itself appears completely doubtful. It is further stated that the petitioner has not verified the original business nor the Bills of Entry and the economic rationale of such large payments from paper entities and he is aware of the ultimate objective and further alleged that the petitioner knowingly assisted the other accused persons in the offence of generation of proceeds of crime and its layering and concealment by remitting the same to obscure entities in Hong Kong and thus involved in the offence of money laundering, as such he is liable for punishment under Section 19 of PML Act.
Advocates Abhishek Garg, Apurva M Gokhale of AGS Legal led by Ravichander Senior Advocate on behalf of the accused contended that ED authorities sought for custody of petitioner for five days and that is also completed and now detaining the petitioner in jail will not serve any purpose, as such his case may be considered for grant of bail.
The single bench of Justice Lalitha Kaneganti held that the Petitioner shall be enlarged on bail on his executing a personal bond for a sum of Rs.20,000/- (Rupees twenty thousand only) with two sureties for a like sum each to the satisfaction of the Metropolitan Sessions Judge, Nampally, Hyderabad.
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The Bombay High Court allowed the terminal benefits like pension, gratuity, and other benefits to the Customs and Central Excise Commissioner involved in Corruption. The petitioner, Bhupendra Pal Singh was a member of the Indian Revenue Service (Customs and Central Excise) having been recruited in 1979. Acting on an audit report, the Anti- Corruption Bureau…
This weekly round-up analytically summarizes the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week from January 3 to January 8, 2022. Small Industries Development Bank of India Vs. SIBCO The Supreme Court held that the directions issued by the Reserve Bank of India (RBI) are Statutory…
This weekly round-up analytically summarizes the key stories related to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan.in during the previous week from January 3 to January 8, 2022. Jayesh C Patel Vs. C.C.E. The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no service tax…
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench has quashed the penalty on Customs Broker as revenue failed to establish goods mentioned in shipping bills did not reflect truth of consignment sought to be exported.
The assessee, B. Dhananjayan in this case is a Customs Broker. There was an attempt to export red sanders illegally in the guise of “Polished Granite Slab”; that the Directorate of Revenue Intelligence (DRI), based on the specific intelligence, seized 13.700 MTs of red sanders valued at Rs.5.48 crores from container and based on investigations conducted, they found an elaborate conspiracy in an attempt to smuggle red sanders logs.
Show Cause Notices were issued to seven persons connected with this case. The Adjudicating Authority, while passing the Order-in-Original, has imposed penalty of Rs.10,00,000/- each under Sections 114 and 114AA of the Customs Act, 1962 on the assessee-respondent for not verifying the antecedents of the overseas buyers, correctness of the IE Code and identities of their clients or the functioning of their clients at the declared address by using reliable, independent, authentic documents, data or information, thereby turning a blind eye towards blatant misuse of the Customs Brokers Licensing Regulations, 2013. The assessee-respondent herein preferred an appeal before the First Appellate Authority, who vide impugned order allowed the appeal, thereby deleting the penalties imposed, inter alia holding that the Revenue had not established mens rea to prove that the assessee- respondent herein had directly or indirectly facilitated the smuggling of red sanders; that the Revenue’s investigation had not established that the assessee- respondent herein had created false / incorrect documents for smuggling of red sanders and that there was no evidence to prove that the assessee-respondent herein was involved in the smuggling of red sanders.
The Judicial Member, P. Dinesha held that there was nothing on record to show that the appellant therein had knowledge that the goods mentioned in the shipping bills did not reflect the truth of the consignment sought to be exported and in the absence of such knowledge, there cannot be any mens rea attributed to the appellant or its proprietor.
“The Revenue has not made any attempt to attribute the prior knowledge as to the involvement of the assessee-respondent right from the beginning in the alleged illegal import of red sanders. Further, the Revenue has also not established as to which act or omission on the part of the assessee-respondent herein that rendered the goods in question liable for confiscation, because such act or omission would have to be a deliberate act or omission,” the CESTAT said.
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The Delhi High Court directed the Income Tax Department to reconsider the issue of issuance of the certificate with ‘NIL’ deduction of income tax after granting the opportunity of hearing.
The Petitioner, Coursera Inc. stated that the impugned order dated 27.09.2021 rejecting Petitioner’s application for NIL deduction directing the customers of the Petitioner to withhold tax at the rate of 10% is arbitrary and no reason has been given in the order for arriving at such a conclusion. She states that the Petitioner acts merely as an aggregator of educational institutions making access to various courses easier and that upon successful completion of the course, a certificate to this effect which bears the seal of the institution concerned is awarded to the student.
The Petitioner being a tax resident of the USA has no PE in India and so business profits arising to the Petitioner in India are not liable to tax in India. She also states that the gross receipts of the petitioner can neither be characterised as Royalty nor Fees for included services (‘FIS’) in terms of Article 12 of India- USA Double Tax Avoidance Agreement (DTAA). The Petitioner has not transferred any copyright to its customers as there is no right to commercially exploit the content hosted on the e-platform and/or the services rendered are technical or consultancy in nature. She also submits that the Petitioner has already submitted itself to the Indian Tax jurisdiction by paying Equalisation levy at the rate of 2% in terms of the Finance Act, 2020 and the entire receipts of the Petitioner relates only to the e-commerce activity.
The division bench of Justice Navin Chawla and Justice Abhay Ahuja noted that the Petitioner in its application for a certificate under section 197 dated 23.09.2021 describes itself as an e-platform operator. In the later part of the same application, the petitioner claims itself to be a university for the purposes of Article 12(5)(c) of the DTAA between India and the United States of America. The AO, in the Impugned Order, holds that the Petitioner is not eligible for the benefit of article 12(5) (c) of the DTAA. However, the Impugned Order does not contain any reasoning or discussion on the applicability or otherwise of various sub-articles of the DTAA to the factual situation of the case.
The court while setting aside the impugned order directed the Respondent to pass a de novo reasoned order after taking into account the amendments made to the provisions of section 10(50) of the Act w.e.f. 01.04.2021 i.e. to exclude the receipts of the Petitioner which is subject to withholding tax at source to the extent such receipts are exigible to Equalisation Levy within a period of 4 weeks after granting an opportunity of being heard to the petitioner. It will be incumbent upon the petitioner to furnish to the Assessing Officer the information required by the Assessing Officer expeditiously.
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The Rajasthan Government has notified the extension of the Time Limit of Amnesty Scheme, 2021.
In exercise of the powers conferred by sub-section (2A) of section 174 of the Rajasthan Goods and Services Tax Act, 2017 (Act No. 9 of 2017), the State Government being of the opinion that it is expedient in the public interest so to do, made the amendment department’s notification number F. 12(29) FD/Tax/2021-269 dated 24.02.2021, as amended from time to time, with immediate effect.
In the proviso of existing Explanation (1), the existing expression “up to 31.12.2021” shall be substituted by the expression “up to 31.01.2022”
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The Government has extended the last date for Submitting applications for Scrip-based FTP Schemes.
In supersession of the existing laid down provisions in the Handbook of Procedures, 2015-20 with regard to the last date for submitting online applications for scrip-based claims, the last date for submitting online applications stands revised to 31 January 2022 for the various schemes.
Firstly, for MEIS (for exports made in the period (s) 01.07.2018 to 31.03.2019, 01.04.2019 to 31.03.2020, and 01.04.2020 to 31.12.2020).
Secondly, for SEIS (for service exports rendered for FY 18-19 and FY 2019-20),
Thirdly, for 2 % additional ad hoc incentive (under para 3.25 of the FTP-for exports made in the period 01.01.2020 to 31.03.2020 only)
Fourthly, for ROSCTL (for exports made from 07.03.2019 to 31.12.2020) and for ROSL (for exports made upto 06.03.2019 for which claims have not yet been disbursed under scrip mechanism).
After 31.01.2022, no further applications would be allowed to be submitted and they. would become time-barred. Late cut provisions shall also not be available for submitting claims at a later date.
In supersession of the laid down provisions on the applicable late cut of the HBP, the new late cut for applications submitted up to 31.01.2022.
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The Central Board of Direct Taxes (CBDT) has notified the one-time relaxation for verification of all Income Tax Return (ITR) e-filed for the Assessment Year 2020-21 pending for verification and processing.
In respect of an Income-tax Return (lTR) which is filed electronically without a digital signature, the taxpayer is required to verify it using any one of the modes within the time limit of 120 days from date of uploading the ITR namely through Aadhaar OTP, by logging into e-filing account through net banking, EVC through Bank Account Number, EVC through Demat Account Number, EVC through Bank ATM, by sending a duly signed physical copy of ITR-V through post to the CPC, Bengaluru.
The CBDT noted that a large number of electronically filed ITRs for the Assessment Year 2020- 21 still remain pending with the Income-tax Department for the want of receipt of a valid ITR-V Form at CPC , Bengaluru or pending e-Verification from the taxpayers concerned. In law, consequences of failure to verify the ITR within the time allowed is significant as such an ITR is/can be declared non-est. Thereafter, the consequences for non-filing an ITR, as specified in the Income-tax Act,1961 follow.
It has been decided by the Board to provide one-time relaxation for submission of ITR-V/e-Verification for resolving the grievances of the taxpayers associated with non-verification of ITRs for the Assessment Year 2020-21 and to regularize such ITRs which have either become non-est or have remained pending with Income-tax Department for want of receipt of respective ITR-V Form or pending e-Verification. Therefore, in respect of alllTRs for Assessment Year 2020-21 which were uploaded electronically by the taxpayers within the time allowed under section 139 of the Act and which have remained incomplete due to non- submission of ITR-V Form pending e-Verification, the Board, in exercise of its powers under section 119(2)(a) of the Act, hereby permits verification of such returns either by sending a duly signed physical copy of ITR-V to CPC, Bengaluru through speed post or through EVC/OTP modes as listed in para 1 above. Such verification process must be completed by 28.02.2022.
This relaxation shall not apply in those cases , where during the intervening period , the Income-tax Department has already taken recourse to any other measure as specified in the Act for ensuring filing of tax return by the taxpayer concerned after declaring the return as non-est.
Further, Board also relaxed the time-frame for issuing the intimation as provided in second proviso to sub-section (1) of Section 143 of the Act and directs that such returns shall be processed by 30.06.2022 and intimation of processing of such returns shall be sent to the taxpayer concerned as per the laid down procedure. In refund cases, while determining the interest, provision of section 244A (2) of the Act would apply. It is clarified that this relaxation would be applicable to all such returns which are verified during the extended period.
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The Supreme Court has held that the Money deposited in a bank not held by it as Trustee but it becomes part of banker’s fund payable on-demand with agreed interest rate.
The Appellant, N. Raghavender is aggrieved by the judgment dated 18th June, 2009 passed by Andhra Pradesh High Court, dismissing his criminal appeal against the judgment and order dated 28th March, 2002 of the Special Judge, CBI Cases, Hyderabad whereby he was held guilty of the offences under Sections 409, 420, and 477A of the Indian Penal Code and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 and sentenced to a total of five years of rigorous imprisonment with various fines for each offence. Accused who were also tried along with the appellant, were, however, acquitted of all the charges.
The alleged modus operandi of the accused persons was that the Appellant, in his capacity as a Branch Manager, issued loose-leaf cheques on 23.04.1994 and thereafter, for a sum of Rs. 2,50,000/-, and despite withdrawal of the said amount, the debit was deliberately not entered into the ledger book. After that, another such transaction took place on 30.06.1994 for a sum of Rs. 4,00,000/-, and once again, the debit was not entered into the ledger sheet of the Bank. This was followed by the Appellant issuing another cheque on 30.07.1994, of a closed account for withdrawal of Rs. 3,50,000/-.
The three judge bench of Justice N.V.Ramana, Justice Surya Kant and Justice Hima Kohli held that the Appellant acted brazenly contrary to the norms and internal instructions of the Bank. Although he was clever enough to not trespass into the prohibited area(s) of Sections 409, 420 and 477-A IPC, he ran the risk of causing financial loss to the Bank. Despite his subsequent act of depositing the interest accrued upon the FDRs of B. Satyajit Reddy, from his personal account, and thereby absolving the Bank from such liability, the actions of the Appellant constitute gross departmental misconduct and are unbecoming of a senior Bank Officer.
“In this case the CBI has either adopted a casual and callous approach or there was some hidden pressure to derail a fair investigation. The resultant effect is that though there is a strong suspicion of criminal breach of trust, cheating and/or fabrication of the Bank records against the Appellant, but such suspicion falls short of a conclusive proof to hold him guilty of the criminal charges. The best evidence having been withheld by the prosecution, the benefit of doubt must be extended to the Appellant, for no conviction can be sustained on the basis of conjectures and surmises. Non-production of the records of the Bank also adversely comments on the fairness and independence of the investigation conducted in the instant case,” the Apex court observed.
The court concluded that the prosecution has failed to prove the charges under Sections 409, 420 and 477A IPC against the Appellant beyond reasonable doubt. As a necessary corollary thereto, his conviction under Section 13(2) read with Section 13(1)(d) of the PC Act can also not be sustained. However, the benefit of doubt being extended to him on account of a thin margin between ‘strong suspicion’ and ‘conclusive proof’, shall not entitle him to initiate a second round of lis to seek his reinstatement or to claim other service benefits from the Bank. The Appellant is deemed to be guilty of gross departmental misconduct, for which the punishment of dismissal from service has been adequately awarded. It requires no repetition that standard of proof to establish a misconduct in a domestic enquiry i.e. even preponderance of evidence, is drastically different to those of proving a ‘criminal charge’ beyond any reasonable doubt. The Appeal is accordingly disposed of in the above terms. Bail bonds, if any, furnished by the Appellant stand discharged.
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The Amritsar Bench of Income Tax Appellate Tribunal (ITAT) held that the assessee to claim deduction of employee’s share of ESI & PF if deposited prior to ITR filing.
The assessee, Vinko Auto Industries preferred first appeals before the CIT(A), however, the CIT(A) sustained the additions made by the AO for the respective assessment years under consideration while dismissing both the appeals of the assessee.
The issue involved in the instant appeals relates to the deposit of employees’ contributions qua ESI & PF after the due date as prescribed in the relevant Acts, however, before the due date of filing of return of income u/s.139(1) of the Act, resulting into disallowance of Rs.5,88,203/- for A.Y.2018-2019 and Rs.60,540/- for A.Y.2019-2020 made by the A.O.
The CIT(A) while upholding the disallowance/addition qua employees contributions towards PF & ESI mainly focused on two aspects/determinations non-applicability of the provisions of Section 43B of the Act to the employee’s share qua PF & ESI and applicability of the amended provisions of Section 36(1)(va) and 438 of the Act wherein Explanations have been inserted by Finance Act, 2021. For better clarification and ready reference the Explanations 2 and 5 inserted in sections 36(1)(va) and Section 43B of the Act respectively.
The coram headed by the Vice President N.K.Saini and Judicial Member, N.K.Choudhary held that there is a plethora of judgments in favour of the Assessee’s contention and of the Revenue. The controversy with regard to divergent views of different High Courts, has been settled by the Hon’ble Apex Court in the case of CIT VS. M/s. Vegetables Products Ltd. (88 ITR 192) by laying the dictum that if two reasonable constructions of a taxing provision are possible that construction which favours the Assessee must be adopted.
The ITAT further said that there are no contrary judgements of the jurisdictional High Court against the assessee on the aspect under consideration hence, first determination of the Ld. CIT(A) qua non-applicability of the provisions of Section 43B of the Act to the employee’s share qua PF & ESI, is unsustainable.
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The Income Tax Appellate Tribunal (ITAT), Bangalore bench, while deleting an assessment order held that the omission to serve a notice under section 143(2) of the Income Tax Act, 1961 is not a curable defect for the purpose of applying the provisions of section 292BB of the Act.
The assessee, a partnership firm engaged in the business of real estate, filed its income tax return for the year under consideration declaring taxable income @ Nil (loss of Rs. 26,83,80,898/-. A search and seizure operation under section 132 was conducted in case of Shri Dayananda Pai and group on 12.04.2011 where the office premises of assessee was also covered. In response the notice under section 142(1) dated 30.07.2013, the assessee filed its letter dated 20.09.2013 submitted copy of the return filed on 31.07.2012.
Before the Tribunal, the assessee submitted that 143(2) notice was issued to assessee on 17.10.2013 which is beyond the due date and therefore the assessment order passed is without jurisdiction.
While accepting the above argument, the Tribunal bench comprising Accountant Member Mr. B R Bhaskaran and the Judicial Member Ms. Beena Pillai held that section 292BB of the Act contemplates situations of irregularities wherein the notice has been served to the assessee in time and in accordance with the provisions of this Act.
“The present case assessee has not received the notice under section 143(2) in time and therefore the argument raised by revenue cannot be appreciated,” the bench said.
According to the bench, an omission on part of the Assessing Officer u/s. 143(2) cannot be procedural irregularity and the same is not curable.
“As the notice was not issued within the period of limitation, the empathetic statement of law in the absence of issuance of notice u/s. 143(2) within the period of limitation by the revenue would therefore inure to the benefit of the assessee,” it added.
While quashing the assessment, the Tribunal held that “the Statute make its imperative that notice u/s. 143(2) is to be issued within the period of limitation and any omission or failure would be hit at the root of the jurisdiction applying the principles laid down by the Hon’ble Supreme Court in various judgments. Accordingly, we hold the assessment order passed by the Ld.AO to be bad in law and the same is quashed.”
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The Maharashtra Authority of Advance Ruling (AAR) held that GST under reverse charge mechanism payable on procurement of renting of immovable property services from Special Economic Zones (SEZs).
The applicant, M/s Portescap India Pvt. Ltd. is a SEZ Unit, situated in Maharashtra, is engaged in the manufacture of customized motors in India and exports the said goods. Applicant procures Rental Services from Seepz, SEZ Authority, Mumbai-400096 which is a Local authority. Notification No. 18/2017-LT. (Rate) dated 05.07.2017 exempts services imported by a unit or a developer in the Special Economic Zone (SEZ) for authorized operations, from the whole of the Integrated Tax leviable thereon under Section 5 of the IGST Act, 2017.
The applicant has sought the advance ruling on the issue whether tax is payable, by the applicant, under reverse charge mechanism on procurement of domestic services like renting of immovable property services from SEEPZ SEZ Authority in accordance with Notification No. 13/2017 – C.T. (Rate) & 03/2018-C.T. (Rate) dated 25.01.2018. If, answer to the above point is in the affirmative, then the tax under reverse charge mechanism is required to be paid under which tax head i.e., IGST or CGST and SGST.
The coram of Rajiv Magoo and T.R.Ramnani held that tax is payable, by the applicant, under reverse charge mechanism on procurement of domestic services like renting of immovable property services from SEEPZ SEZ Authority in accordance with Notification No. 13/2017 – C.T. (Rate) & 03/2018-C.T. (Rate) dated 25.01.2018.
The AAR further clarified that the tax will be discharged by them under Integrated Goods and Service Tax (IGST) head.
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The Institute of Chartered Accountants of India ( ICAI ) has invited applications for Empanelment of Chartered Accountant firms/LLPs for the year 2022-2023.
Online Applications are invited from Chartered Accountant firms/LLPs who desire to be empanelled with the office of the Comptroller and Auditor General of India for the year 2022-2023 for considering for appointment as auditors of Companies as per Sections 139(5) and 139(7) of the Companies Act 2013 and of Statutory Corporations/Autonomous Bodies as per the provisions of their respective Acts.
The Online application form along with detailed instructions in this regard will be available on the website www.cag.gov.in from 1 January 2022 to 15 February 2022. The applicant firms/LLPs will have to fill/update the data showing the status of their firm as on 1 January 2022.
After filling/updating the data, the firms/LLPs will be required to generate online acknowledgement letter for the year. If the firms/LLPs fail to generate online acknowledgment letter, their application would not be considered for empanelment.
The firms/LLPs will be required to submit a print out of the acknowledgement letter generated online and also hard copies of the documents in support of their online application to this office by 28 February 2022.
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The Madras High Court directed the GST Authority to issue a discharge certificate in form SVLDRS-4 either manually or electronically.
The petitioner, M/s.S.D.Arun Associates sought the issuance of Writ of Certiorarified Mandamus to call for the records of the respondent relating to the issuance of the impugned form SVLDRS-3 dated 22.05.2020 and quash after considering the payments already made by the petitioner and issue a Discharge Certificate in form SVLDRS-4 in accordance with SVLDR Scheme 2019 within a timeframe as may be fixed by this Court.
The writ petitioner comes under the category ‘Litigation’ as appeals were pending as on 30.06.2019. To be noted, this pertains to service tax. Learned counsel submits that the first respondent in the captioned writ petiton i.e., ‘designated committee’ issued SVLDRS-2 form to the petitioner on 04.02.2021 wherein the tax dues was mentioned as INR 29,94,239/-. It also shows that the amount already paid by the petitioner as INR 19,19,911/- but the balance has been shown as NIL. Learned counsel submits that in the form instead of showing tax relief under SVLDRS scheme as 70% of tax payable INR 10,74,328/- was mentioned.
Writ petitioner took up the matter with the authorities concerned, in the interregnum, the writ petitioner’s appeal was disposed of and the matter is now remanded to the second respondent who is in seizure of the issue. This Court finds that there is a prima facie case to issue notice regarding admission. However as the Revenue counsel who has accepted notice on behalf of respondents has sought time to get instructions, if the second respondent concludes the remanded proceedings in the interregnum, it can lead to an irreversible situation and therefore, the proceedings before the second respondent vide C.No.V/ST/15/63/2015-Adjn dated 12.11.2021 (De novo adjudication) shall be kept in abeyance and remain stayed till next listing.
The single bench of Justice M.Sundar held that the articulation of which has been extracted and reproduced supra, the sequitur is captioned writ petition is allowed and the first respondent shall issue a discharge certificate as sought for in the prayer in the writ petition either manually or electronically within eight weeks from today i.e., on or before 21.01.2022.
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The Gauhati High Court has stayed the reassessment notice for not following new procedure for issuance of notice where Income has escaped Assessment after 31 March 2021.
The petitioner, M/s JSVM Plywood Industries has assailed the impugned notice dated 30.06.2021 issued under section 148 of the Income Tax, 1961 while referring to the said newly inserted provision of section 148A of the Income Tax Act, it is projected that the Assistant Commissioner of Income Tax (respondent no.2) had given a go-bye to the said mandatory provisions which requires the said authority to conduct an inquiry, if required, with prior approval of the competent authority and also to provide an opportunity of being heard to the assesses by issuing a notice to show-cause as to why a notice under section 148 should not be issued.
However, the Department referred to two notifications dated 27.02.2021 and 31.03.2021 issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes by virtue of which in exercise of power conferred by sub-section (1) of section 3 of the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020. By the notification dated 27.02.2021, time-limits for various provisions, but without interfering with the time-limit provided in section 148 of the Income Tax Act, were extended. Accordingly, the said notification is of no relevance in the present case. By notification dated 31.03.2021, the time limit prescribed for compliance of any action including issuance of notice under section 148 was extended till 30.06.2021. Accordingly, it is submitted that the notice under section 148 of the Income Tax Act, which is impugned in this case was issued under the earlier regime of section 148 i.e. as it stood prior to 01.04.2021, was saved and was lawful and sustainable on facts and in law.
The single bench of Justice Kalyan Ray Surana was prima facie of the opinion that for the purpose of interim order, is that by virtue of notifications dated 27.02.2021 and 31.03.2021 issued by the Central Board of Direct Taxes, as referred herein before, though extends the period of limitation in respect of issuance of notice under section 148 of the Income Tax, Act, but the said notification is not found to empower the Central Board of Direct Taxes to put into oblivion the provision of section 148A of the Income Tax Act, which was inserted by virtue of the Finance Act, 2021 and was notified w.e.f. 01.04.2021, as if the said section 148A would not apply till limitation prescribed under section 148 does not lapse or expire.
The court while listing the matter on January 24, 2022 held that stayed the operation of impugned notice dated 30.06.2021 issued under section 148 of the Income Tax, 1961.
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The Chhattisgarh High Court remanded the matter to Authority for GST Refund as supply made as inter-State was subsequently held as intra-State.
The Petitioner-M/s Radhemani And Sons (A Proprietorship Firm) had filed a refund claim of Rs.12,69,255/- as per the provisions prescribed under Rule 89 (1) of Central Goods and Services Tax Rules, 2017 on account of “Excess payment of IGST in February, 2018 in GSTR 3B Return” for the tax period February, 2018 in RFD-01. The said application was filed by the Petitioner on 18.03.2020 and after considering the said application, a show cause notice dated 31.03.2020 was issued by the Deputy Commissioner in Form GST-RFD-08 and since the Petitioner has failed to submit any reply with regard to the said show cause notice, the Deputy Commissioner-cum-Adjudicating Authority has, therefore, rejected the said application of the Petitioner as made under the said provision vide order dated 23.04.2020.
While referring to the circular which is clarificatory in nature of the word “subsequently held”, the petitioner contended that since the said word referred to the aforesaid provisions of Section 77 of the CGST Act, 2017 read with Section 19 of IGST Act, 2017, has been interpreted by observing inter alia that the refund under the said sections is also available when the inter-State or intra-State supply made by a taxpayer, is subsequently found by taxpayer himself as intra-State and inter-State respectively, therefore, the matter may be remitted to the concerned appellate authority for the consideration of his claim/application made under sub-rule (1) of Rule 89 of the Rules, 2017 for refund of Rs.12,69,255/- (Rupees Twelve Lacs Sixty Nine Thousand Two Hundred and Fifty Five only) afresh in the interest of justice.
The single bench of Justice Sanjay S. Agrawal held that the circular dated 25.09.2021 interpreting and/or clarifying the word “subsequently held”, it would, therefore, be appropriate to remit the matter back to the concerned appellate authority. The order impugned is accordingly set aside and the matter is remitted back to the concerned appellate authority with a direction to decide the same afresh in the light of the circular issued on 25th September, 2021 in accordance with law. It is made clear that while disposing of this petition, I have not expressed any opinion on merits of the case and the concerned appellate authority shall decide the same in accordance with law.
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The Karnataka High Court held that the deduction is allowable on expenditure if the purpose of incurring expenditure is to earn income.
The assessee, West Palm Development LLP is engaged in development and purchases, sells, constructs and leases properties. The assessee was sanctioned a loan on 26.09.2008 for a sum of Rs.35 Crores from Union Bank of India. The assessee paid a sum of Rs.33,50,00,000/- to Prestiges Estates Project Limited (PEPPL) as advance towards purchase of properties vide cheques dated 30.09.2008 and 13.10.2008. However, on account of adverse market conditions, the assessee decided to withdraw from the transaction and requested PEPPL to refund the earnest money. PEPPL refunded the earnest money vide cheques dated 23.10.2008 and 29.10.2008. The assessee thereafter lent money to other shareholders and made inter corporate deposits to the tune of Rs.35,62,450/- for which total interest earned was to the extent of Rs.2,02,52,131/- as against an interest of Rs.2,84,47,557/-.
The assessee submitted that deduction for interest paid to Union Bank of India ought to have been allowed under Section 57(iii) of the Act. It is also urged that authorities could not have gone into the motive of the transaction. Alternatively it was urged that if the borrowing is for the purpose of business, the interest paid thereon would be allowable under Section 36(i)(iii) of the Act. It is urged that in any case, the tribunal does not have the power to take back the benefit granted by the Assessing Officer.
The division bench of Justice Alok Aradhe and Justice Anant Ramanath Hegde held that Section 57(iii) of the Act mandates that income chargeable under the head ‘income from other sources’ shall be computed after making a deduction of any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income. Section 57(iii) of the Act does not require that the expenditure incurred is deductible only if expenditure has resulted in actual income. As long as the purpose of incurring expenditure is to earn income, the expenditure would have to be allowed as a deduction under Section 57(iii) of the Act. Under Section 57(iii) of the Act a nexus between the expenditure and income has to be ascertained. The assessee was therefore entitled to deduction under Section 57(iii) of the Act.
The court held that the tribunal exceeded its jurisdiction in disallowing the entire interest expenditure and the power of the tribunal is limited to passing of the order in respect of subject matter of the appeal.
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The Uttar Pradesh Authority of Advance Ruling (AAR) ruled that Input Tax Credit (ITC) available on GST charged by service provider on hiring of bus for transportation of employees to and from workplace.
The applicant, Dr. Willmar Schwabe (I) Private Limited is engaged in manufacture and supply of Homeopathic Medicines and related products in India. The Applicant has entered into an arrangement with ‘Bhati Motors’, pursuant to which the Applicant is availing bus hiring services, on contract basis, for transportation of its employees, to & from the workplace (Noida). The approved seating capacity in such buses can be more than thirteen persons and, in some cases, even less than thirteen persons. The buses hired by the Applicant, where the seating capacity is more than 13 passengers, are non-air conditioned. M/s Bhati Motors is having the contract carriage permit issued by the relevant regulatory authorities in respect of buses deployed for employee transportation service. Further, M/s Bhati Motors is charging GST on supplies made to the Applicant.
The applicant has sought the advance ruling on the issues whether ITC is available to the Applicant on GST charged by service provider on hiring of bus, having seating Capacity of more than thirteen person for transportation of employees to & from workplace; Whether GST is Applicable on amount recovered by the Applicant from employees for usage of bus transportation facility; and ITC is Available.
The coram of Vivek Arya and Abhishek Chauhan ruled that ITC is available to the Applicant on GST charged by service provider on hiring of bus, having seating Capacity of more than thirteen person for transportation of employees to & from workplace only after 01.02.2019. The GST is not Applicable on the amount recovered by the Applicant from employees for usage of bus transportation facility.
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In a major relief to Tata Steels, the Calcutta High Court ruled that state not to deprive legitimate claim to purchase High-Speed Diesel (HSD) oil at concessional rate under Central Sales Tax Act.
The High-Speed Diesel Oil dealers registered under Central Sales Tax Act, 1956, who purchased the said oil during the relevant disputed period from the seller of HSD oil dealers Indian Oil Corporation Limited (IOCL) in West Bengal in course of Inter-State sale, challenging the action of refusal on the part of Respondent State Government of West Bengal in refunding the differential amount of tax collected by it from the petitioners through IOCL in excess of concessional rate of tax on such purchase and the impugned assessment order to the extent of refusal to accept the “C” Forms submitted before the Assessing Officer relating to the said relevant inter-State sale by IOCL to the petitioners, causing the petitioners deprivation of statutory benefit of concessional rate of tax on the relevant purchase of the HSD oil.
The issues raised was whether on the facts and in the circumstances of the case petitioners/purchasing HSD oil dealers who have been denied a refund of excess tax by the Respondent State Government of West Bengal which was admittedly collected by it from the petitioners through the selling oil dealers/IOCL in West Bengal in excess of concessional rate of tax under Section 8 (1) read with Section 8 (3) and 8 (4) of Central Sales Tax Act, 1956 and which were paid under compelling extraordinary circumstances beyond its control of the petitioners, can be called “person aggrieved” and have locus standi to file the instant Writ Petitions.
The single bench of Justice Md. Nizamuddin held that in the instant cases neither petitioners nor IOCL is guilty of any latches and when there is no specific prohibition under the statute against such refund petitioners should not get entangled in the cobweb of procedures and the State should do substantial justice by refunding the amount of tax in question collected by it in excess of statutory concessional rate of tax during the relevant period either to the selling oil dealers/IOCL or to the purchasing oil dealers/petitioners and State should not deprive the legitimate claim of the petitioners to purchase the HSD oil at a concessional rate which is their statutory right under Central Sales Tax Act, 1956, in course of inter-State sale since they have fulfilled the conditions under Section 8 (1) read with 8 (3) and 8 (4) of the Central Sales Tax Act, 1956 by doing what fairness and justice demand of a State and which is the motto of every civilised society.
“Impugned order of assessment passed by the Assessing Officer is set aside to the extent of refusal of acceptance of relevant “C” Forms submitted before him during the impugned assessment proceeding by the HSD oil purchasing dealers/petitioners through the oil selling dealers/IOCL relating to the relevant disputed period which was issued by the purchasing respective State Government, in favor of the petitioners on inter-State sales in question and it shall accept the aforesaid relevant “C” Forms and allow the concessional rate of tax to the petitioners on the basis of the said relevant “C” Forms subject to formal verification of the same,” the court said.
The court further said that the respondent State Government of West Bengal shall within three months from date process and refund the excess amount of tax collected by it from the petitioners oil purchasing dealers in excess of concessional rate of tax through selling dealers/IOCL in West Bengal in course of Inter-State sales in question during the relevant period with interest at the rate of 10% per annum on the basis of relevant “C” Forms submitted by the seller/IOCL during the impugned assessment proceedings, directly to the petitioners instead of refunding the same to the Respondent IOCL after formal verification of the same along with relevant documents and by affording opportunities of hearing to the petitioners and IOCL in course of the said verification and in the alternate it shall refund the said amount to the IOCL after such verification and in that event IOCL shall refund to the petitioners the amounts so refunded within 15 days from the date of receipt of such amount by the Respondent State Government of West Bengal subject to proper indemnification by the petitioners and the Respondent State Government of West Bengal.
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The Uttar Pradesh Authority of Advance Ruling (AAR) ruled that no GST payable on Services rendered under the Contract with State Urban Development Agency, Uttar Pradesh (SUDA) and Pradhan Mantri Awas Yojana (PMAY).
The appellant, M/s Arinem Consultancy Services (P) Ltd. sought the advance ruling on the issue Whether preparation of ‘Detailed Project Report’ (DPR) and providing Project Management Consultancy (PMC) services for projects under Beneficiary Led Construction in Lucknow Cluster under Pradhan Mantri Awas Yojna (Urban) under an agreement with State Urban Development Agency (SUDA) would fall under activities in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India.
The SUDA has been established as a state level nodal agency, under the department for Urban Employment and Poverty Alleviation by Uttar Pradesh Government and as per the information contained in Memorandum of Association, it is clear that SUDA is a part of State Government of UP.
The coram of Vivek Arya and Abhishek Chauhan ruled that the Services rendered under the contract with State Urban Development Agency, Uttar Pradesh (SUDA), and for PMAY are in relation to functions entrusted to Municipalities under Article 243W and to Panchayats under Article 243G of the Constitution of India. Such services would qualify as Pure Service (excluding works contract service or other composite supplies involving supply of any goods)” and accordingly exempt from the payment of GST duly covered in SI. No 3 of Notification No. 12/2017-Central Tax (Rate) dated 28 June, 2017 issued under Central Goods and Services Tax Act, 2017 (CGST/Act), and corresponding notifications issued under Uttar Pradesh Goods and Services Tax Act, 2017 (UPGST Act).
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