This weekly round-up analytically summarizes the key stories related to Supreme Court and High Courts reported at Taxscan.in during the previous week from July 17th to July 23rd, 2022.
Re: ERA INFRASTRUCTURE (INDIA) LTD. vs PR. COMMISSIONER OF INCOME TAX – 2022 TAXSCAN (HC) 563
The division bench of the Delhi High Court has held that no retrospective application to explanation to disallowance u/s 14A. The Coram of Mr. Justice Manmohan and Ms. Justice Manmeet Pritam Singh Arora observed that the Memorandum of the Finance Bill, 2022 explicitly stipulates that the amendment made to Section 14A will take effect from 1st April 2022 and will apply to the assessment year 2022-23 and subsequent assessment years.
Re: FUTURE FIRST INFO. SERVICES PVT. LTD vs PR. COMMISSIONER OF INCOME TAX – 2022 TAXSCAN (HC) 564
The division bench of Delhi High Court comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora has held that disallowance under section 40(a)(ia) of the Income Tax Act is not required in case of short deduction of TDS.
Re: M/S MAHALAXMI TEXTILES vs SYNDICATE BANK SURAT MAIN BRANCH – 2022 TAXSCAN (HC) 561
The Gujarat High Court has held that once the bank agrees to sell a property mortgaged with it by a loan defaulter and a third party pays full consideration through a sale agreement, then the Bank can’t refuse to release NOC and title deed.
Re: C. Joseph Vijay vs Assistant Commissioner – 2022 TAXSCAN (HC) 562
In a major relief to the tamil actor Vijay and Music Director Harris Jayaraj, the Madras High Court has last week ruled that he would be liable to pay penalty for delayed payment of entry tax only from January 29, 2019 to December 2021 and not from 2005 on the import of a BMW X5 from the United States.
Re: M/s Vasudeva Adigas Fast Food Pvt. Ltd vs Central Board of Direct Taxes – 2022 TAXSCAN (SC) 156
A two-judge bench of the Supreme Court has upheld the High Court order directing the Central Board of Direct Taxes (CBDT) to accept a belated income tax return after condoning the delay.
Re: M/S J.M.J ESSENTIAL OIL COMPANY VS PR.COMMISSIONER OF INCOME TAX – 2022 TAXSCAN (HC) 558
The Himachal Pradesh High Court has held that acceptance of cash sales by the VAT authorities cannot be a sole ground to prove the genuineness of the transactions in order to remove the penalty under Section 271(1)(c) of the Income Tax Act, 1961.
Re: Santacruz Gymkhana vs State of Maharashtra and Anr. – 2022 TAXSCAN (HC) 557
The Bombay High Court has held that the entertainment duty cannot be levied on Billiard Tables as the services are exclusively provided to the Members of the Club. The division bench noted that the facts are identical to the facts in the case of Gondwana Club Vs. State of Maharashtra and Ors wherein it was held that the members of the club mutually provide the facilities to be used exclusively by themselves and the same are not made available to the general public, even on payment. And therefore, the action of the Entertainment Tax Inspector of initiating proceedings against the petitioner-club for payment of entertainment duty is bad in law.
Re: Vodafone Idea Limited vs The Union of India – 2022 TAXSCAN (HC) 556
In a major relief to Vodafone Idea, a division bench of the Bombay High Court comprising Justices K. R. Shriram & Milind N. Jadhav has held that roaming services and international long-distance services provided by Vodafone Idea to the Foreign Telecom Operators is an Export Of Service for the purpose of the Integrated GST Act, 2017.
Re: PRAKASH INDUSTRIES LTD. & ANR. vs DIRECTORATE OF ENFORECEMENT – 2022 TAXSCAN (HC) 555
The Delhi High Court presided by Mr. Justice Yashwant Varma has quashed the attachment order of property allegedly purchased on wrongful mining of coal. The single bench quashed the attachment and held that “the argument based on possession of the property and the right of the Directorate to consequently attach the same is clearly rendered unsustainable when viewed in light of the fact that those properties are not treated as untainted or permissibly attachable property constituting property equivalent in value to any such tainted properties”.
Re: The Pr. Commissioner of Income vs Kumar Builders Consortium – 2022 TAXSCAN (HC) 553
A division bench of the Bombay High Court comprising Justice Dhiraj Singh Thakur and Justice Abhay Ahuja has upheld an order of the Mumbai ITAT allowing directing the Assessing Officer to work-out the pro rata deduction under Section 80IB(10) of the Act, 1961, in regard to the eligible residential units.
Re: SRI. HIMANSHU GUPTA vs V. NARAYANA REDDY – 2022 TAXSCAN (HC) 554
The single bench of Karnataka High Court presided by Mr. Justice M. Nagaprasanna has held that the power to order interim compensation u/s 143a cannot be passed without complying with principles of natural justice. The single bench observed that though no application is filed by the complainant, the Court may grant interim compensation, but it shall not be without hearing the accused. Passing an order without hearing the accused is trite law that any order both judicial and administrative if entails penal or civil consequences, it cannot be passed without at the outset complying with principles of natural justice.
Re: ACME HEERGARH POWERTECH PRIVATE LIMITED vs CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS & ANR. – 2022 TAXSCAN (HC) 551
A division bench of the Delhi High Court has admitted a petition challenging instruction issued by the Central Board of Indirect Taxes and Customs (CBIC) with regards to the inapplicability of the Manufacturing and Other Operations in Warehouse (no. 2) Regulations, 2019 (MOOWR Scheme) on solar power generating units and stayed the recovery proceedings by the customs officer.
Re: M/S DPJ BIDAR vs UNION OF INDIA – 2022 TAXSCAN (HC) 552
The Karnataka High Court has quashed a circular issued by the Central Board of Indirect Taxes and Customs (CBIC) levying annuity received by the Concessionaires from Highway Authorities. Allowing the petition, the Court held that “the deliberation of GST Council in its meeting held on 06.10.2017 and the notifications issued pursuant thereto clearly exempts the entire annuity being paid to the petitioners towards construction and maintenance of roads. It cannot be construed to have not exempted the annuity (deferred payments) towards construction of roads”.
Re: PANKAJ MAHAJAN vs SERIOUS FRAUD INVESTIGATION OFFICE – 2022 TAXSCAN (HC) 550
The Delhi High Court has granted bail to another Chartered Accountant in connection with the Bhushan Stell case investigated and registered by Serious Fraud Investigation Office (SFIO) in 2019. Granting bail to the accused, Justice Neena Bansal Krishna observed that the role of the petitioner is that of the Stock Auditor wherein the Stock verifications of the documents and statements as submitted by the Company to the Banks was carried out by the accused.
Re: VIPUL AGGARWAL vs INCOME TAX OFFICE – 2022 TAXSCAN (HC) 549
A division bench of the Delhi High Court, while considering a complaint against a Company for non-filing of income tax returns, has held that a “Director” cannot be treated as the “Principal Officer” for the purpose of section 2(35)(a) of the Income Tax Act, 1961 and cannot be prosecuted for the offence of failure to furnish returns of income under section 276CC of the Act.
Re: SH. JAGDEEP SINGH vs OFFICE OF THE COMMISSIONER OF CUSTOMS – 2022 TAXSCAN (HC) 548
The Delhi High Court has admitted a petition challenging two adjudication orders based on a single show cause notice issued by the Office of the Commissioner of Customs (Delhi Airport).
M/S. NOORANI PROPERTIES (P) LTD vs THE COMMISSIONER OF WEALTH TAX – 2022 TAXSCAN (HC) 547
A division bench of the Karnataka High Court consisting of Justices P.S. Dinesh Kumar and Anant Ramanath Hegde has held that the assessee was not liable to pay Wealth Tax with respect to a property, despite transferring possession of the said property to a developer under a Joint Development Agreement.
Re: PRITI NANDA vs COMMSSIONER OF INCOME TAX – 2022 TAXSCAN (HC) 545
A division bench of the Delhi High Court comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora, has recently directed the National Faceless Appeal Centre (NFAC) to expedite the hearing considering the fact that the appeal is not yet listed even after two and half years after its filing and the income tax department has recovered the dues from the assessee.
Re: Gemini Coach Builders vs The Union of India – 2022 TAXSCAN (HC) 544
The single bench of Madras High Court presided by Mr. Justice M. Nirmal Kumar has held that Writ petition challenging Goods and Services Tax (GST) notice u/s 73 and DRC-01A intimation and dismisses petition before passing an order in original. The single bench while dismissing the Writ petition has held that “the show cause notice has been issued, for which, the petitioner has to give reply and thereafter personal hearing would be given, where he can make his submissions along with supporting documents, thereafter only order in original would be passed and it is the procedure as contemplated under law. Hence, this Court is not inclined to entertain the petition”.
Re: SUNIL BHATIA vs SERIOUS FRAUD INVESTIGATION OFFICE – 2022 TAXSCAN (HC) 524
The Delhi High court has recently granted bail to Chartered Accountant (CA) Sunil Bhatia accused in the Bhushan Steel case. The case was registered by Serious Fraud Investigation Office (SFIO) in 2019. Justice Jasmeet Singh has observed that the Applicant was appointed as a stock auditor vide appointment letter dated 29.10.2016 for conducting stock audit of BSL for the year 2016 – 2017. As per the Stock Audit Report dated 15.02.2017 by the applicant firm it pertained to the period 01.04.2016 to 31.10.2016. Hence, the stock audit report did not pertain to the period under investigation.
Re: COMMISSIONER OF SERVICE TAX-1 vs M/S. SURYA VISTACOM PRIVATE LIMITED – 2022 TAXSCAN (HC) 543
A division bench of the Calcutta High Court, while allowing a claim of cenvat credit, has held that the willful misstatement or suppression cannot be alleged based on documents available with the department. Justice T.S. Sivagnanam and Justice Bivas Pattanayak observed that there is no specific allegation or prima facie finding of any wilful misstatement or suppression on the part of the assessee.
Re: B.C. Mohan kumar vs Superintendent of Central Goods & Service Tax – 2022 TAXSCAN (HC) 542
In a significant ruling, the Madras High Court has held that the order for cancelling the GST registration must be a speaking order and the discretion provided to the department in such cases shall not be used blatantly to violate the principles of natural justice.
Re: OMANSH PROPERTIES PRIVATE LIMITED vs CENTRAL BOARD OF DIRECT TAXES & ANR – 2022 TAXSCAN (HC) 531
In a recent ruling, a division bench of the Delhi High Court has refused to quash the re-assessment proceedings against an amalgamated company and asked the latter to co-operate with the proceedings. Upholding the proceedings, the High Court observed that “In the opinion of this Court, the Petitioner should take all its objections in its reply to be filed before the Assessing Officer in the proceedings under Section 148A of the Act. In the event, the time for filing the reply has expired, the Petitioner is given liberty to raise additional grounds by filing a supplementary reply within a week.”
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