Bombay High Court stays Service Tax demand notice issued to CA based on ITR [Read Order]

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Service Tax - CA - Bombay High Court - Service Tax Demand - Taxscan

The Bombay High Court stayed the Service Tax demand notice issued to CA based on Income Tax Return (ITR).

The petitioner, Amrish Rameshchandra Shah is a Chartered Accountant by profession and a partner in a firm, wherein the Assessee was served with a show cause-cum-demand notice dated December 30, 2020, based on the ITR filed by the firm for the relevant year and the Respondent was of the view that the remuneration received by Assessee from the firm is subject to service tax that has not been paid.

The issue raised was whether show cause-cum-demand notice for recovery of service tax can be issued based on ITR.

Mr. Prakash Shah, counsel for the petitioner submitted that the impugned show cause-cum-demand notice has been issued without jurisdiction. His contention is that the petitioner is a Chartered Accountant by profession and is a partner in a firm. The firm had filed an income tax return and has paid service tax.

Based on the declaration made in the income tax return, a view has been taken by respondent authority that the remuneration received by the petitioner from the firm is subject to service tax and since this has not been paid, impugned show cause-cum-demand notice has been issued.

The division bench of Justice Milind N. Jadhav and Justice Ujjal Bhuyan while directing the respondent authority to file the reply, stayed the show cause-cum-demand notice and listed the matter on  March 15, 2021, for the next hearing.

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