Supreme Court and High Courts Weekly Round Up

This weekly round-up analytically summarises the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week from November 14 to November 19, 2022. THE COMMISSIONER OF INCOME TAX vs RADISSON HOTEL INTERACTION INCORPORATED-2022 TAXSCAN (HC) 900 The Delhi High Court granted relief to Radisson Hotel Interaction Incorporated and reiterated that Receipts of assessee from various activities of hotel management constitute ‘Fee for Technical Services.A Bench consisting of Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that “Accordingly, no substantial question of law arises for consideration in the present appeal and the same is dismissed. However, it is clarified that the orders passed in the present appeal shall abide by the final decision of the Supreme Court in the aforesaid Civil Appeal.” Darshan Comtrade Pvt Ltd vs .Principal Chief Commissioner of GST and Central Excise-2022 TAXSCAN (HC) 898 The Madras High Court released bank account of defaulter attached under Section 83 of the Central Goods and Service Tax Act, 2017 (CGST) on lapse of one year from date of attachment. The petitioner in the writ petition is Darshan Comtrade Pvt Ltd Represented by its Managing Director Akshardham.A Bench consisting of Dr Justice Anita Sumanth observed that “In light of the aforesaid, there is no further embargo on the operation of the bank account and on the petitioner resuming operations in that regard. This writ petition stands disposed with the above observationa.” VIDISHA SINGHAL vs INCOME TAX OFFICER WARD 29(1) DELHI & ORS-2022 TAXSCAN (HC) 896 While considering a writ petition, a division bench of the Delhi High Court has asked the Assessing Officer to amend the pre-consultation notice under section 148A(b) of the Income Tax Act on ground of mistakes.After hearing arguments from both sides, Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that “Keeping in view the aforesaid statements, the impugned order passed under Section 148A(d) and the impugned notice issued under Section 148 of the Act are set aside and the Assessing Officer is directed to issue an amended notice under Section 148A(b) of the Act along with the incriminating material in its possession to the assessee within two weeks. The assessee is given liberty to file a reply to the amended notice within fourweeks. The Assessing Officer is, thereafter, directed to decide the matter afresh within a further period of four weeks in accordance with law.” BASF INDIA LTD vs STATE OF KARNATAKA-2022 TAXSCAN (HC) 897 A division bench of the Karnataka High Court, while quashing a sales tax demand, has held that the open purchase orders are only standing offers and do not constitute a confirmed ‘Agreement to sell’ and movement of goods are mere stock transfers.A division bench of the High Court has held that based on the Investigation Report, the Department issued proposition notices for reopening the assessment proceedings and concluded the proceedings by rejecting ‘F- forms’ on the Stock Transfer turnover on the ground that Inter-state movement of goods from the manufacturing unit at Mangaluru to various depots in other States was against pre-existing Contract and amounted to Inter-State sale liable to tax under Section 3 of the CST Act. S. Jagathrakshakan vs Deputy Director-2022 TAXSCAN (HC) 895 The Madras High Court has quashed a case registered under the Prevention of Money Laundering Act (PMLA) by the Enforcement Directorate (ED) against DMK MP S Jagathrakshakan.The Madras High Court quashed an ECIR (Enforcement Case Information Report) filed against S. Jagathrakshakan,who represents the Arakkonam constituency. The ECIR was registered by Enforcement Directorate (ED) against him under the Prevention of Money Laundering Act, 2002 on June 12, 2020, based on two FIRs filed by the CB-CID. The CB-CID accused, the MP of usurping properties owned by the Chrome Leather Company, and filed the two FIRS in 2016 in connection with the case. Smt. Jamna Devi W/o Shree Kalu Ram vs Income Tax Officer- 2022 TAXSCAN (HC) 894 A division bench of the Rajasthan High Court has held that the non-communication of order by the counsel to the assessee constitute “reasonable cause” for the delay in the filing of the appeal.Granting relief to the assessee, a division bench of Justice Vijay Bishnoi and Justice Vinod Kumar Bharwani observed that “Having heard learned counsel for the parties and after taking into consideration of the averments made in the application (CMCC No.97/2022) under Section 5 of the Limitation Act as well as the arguments of learned counsel for the respondent-Income Tax Officer, we are of the opinion that the delay caused in filing the present income tax appeal is satisfactorily explained by the appellant-assessee and the said delay is bonafide.” M/s Polyflex (India) Pvt. Ltd vs Commissioner of Income Tax-2022 TAXSCAN (SC) 201 A two-judge bench of the Supreme Court, on Thursday held that a manufacturer of ‘polyurethane foam’ used for manufacturing of car seats would be eligible for income tax deduction under section 80-IB of the Income Tax Act, 1961.Upholding the order of the High Court, the bench comprising Justice M R Shah and Justice M MSundresh observed that the assessee is manufacturing polyurethane foam and supplying the same in different sizes/designs to the assembly operator, which ultimately is being used for car seats. CALCUTTA UROLOGY RESEARCH CENTRE PVT. LTD vs COMMISSIONER OF INCOME TAX-2022 TAXSCAN (HC) 893 The Calcutta High Court (HC) directed AO to calculate the profit estimated in its entirety when AO failed to follow the direction by ITAT to estimate net profit.Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya observed that the miscellaneous applications were filed before the tribunal for clarification/rectification of the main order passed by the tribunal dated 17th January 2014 and the assessee before filing the applications before the learned tribunal sought leave from this Court to file such application which leaves was granted by order dated 6th August 2014. SMT. SUNITA W/O BHARATKUMAR AITAWADE vs SMT. VIDYA W/O SAGAR AITAWADE-2022 TAXSCAN (HC) 892 The Karnataka High Court ruled that Any person who is not director of the company on the date of issuance of the cheque is not liable under Section 138 of the Negotiable Instruments Act. The petitioners in the present appeal are Sunita and Vidya.Allowing the criminal petition, a Single Bench consisting of Justice Hemant Chandragoudar observed that “The cheque in question was issued on 01.08.2019. The petitioners, who were the Directors of the Company, ceased to be the Directors of the Company with effect from 22.03.2017 which is evident from the Form No.DIR-12 issued by Registrar of the Companies and the same has remained uncontroverted.” GUJARAT NATURAL RESOURCES LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX-2022 TAXSCAN (HC) 886 The Gujarat High Court has held that reopening of assessment alleging income escapement even after verification of relevant material is not valid.Justice N V Anjaria and Justice Bhargav D Karia allowed the petition and set aside the impugned notice dated 26.3.2018 issued under section 148 of the Income Tax Act, 1961 seeking to reopen the assessment in respect of the assessment year 2011-2012. The Gujarat High Court(HC) has held that reopening of assessment alleging income escapement even after verification of relevant material is not valid. PR.COMMISSIONER OF INCOME TAX vs M/S PGF LTD-2022 TAXSCAN (HC) 891 A Division Bench of the Delhi High Court dismissed appeal in the absence of incriminating material for an order passed under Section 153A of the Income Tax Act, 1961. The respondent in the present appeal is M/s PGF Ltd.Dismissing the appeal, the Bench consisting of Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that “It is to be noted that the Appellant-Revenue has not placed reliance or even referred to any statement recorded under Section 132(4) of the Income Tax Act, 1961. No such statement has been produced before this Court. Therefore, in the facts of the present case, the issue does not arise for consideration unless it can be demonstrated by the Appellant-Revenue that the statements recorded under Section 132(4) disclose some incriminating material on the basis of which orders under Section 153A have been passed.” Parshvanath Finvest Private Limited vs Income Tax Department-2022 TAXSCAN (HC) 890 A division bench of the Gujarat High Court, while considering a writ petition challenging the issue of re-assessment notice under section 148 of the Income Tax Act, 1961 issued in person not in accordance with the faceless scheme, has stayed the proceedings temporarily.The division bench has held that “Learned counsel for the respondent No.1 prays for and is allowed one month’s time for filling counter affidavit. Two weeks thereafter is allowed to learned counsel for the petitioner to file rejoinder affidavit. List for admission/final disposal immediately after six weeks along with D.B. Civil Writ Petition No.16435/2022. Till the next date of listing, further proceedings pursuant to the impugned notice dated 27.07.2022 (Annexure-11) shall remain stayed.” M/s.Esveeaar Distilleries Private Limited vs Assistant Commissioner-2022 TAXSCAN (HC) 889 The Andhra Pradesh High Court while recently considering a writ petition, held that the services by way of job work in relation to manufacture of alcoholic liquor for human consumption should pay 18% GST under the Central GST Act, 2017. The division bench of the High Court held that, alcoholic liquor for human consumption does not constitute food or food product falling within Chapters 1 to 22 of First Schedule of Customs Tariff Act, 1975 hence the petitioner cannot demand for the respondent pay of tax 5% instead of 18% MITTAL INTERNATIONAL vs ASSISTANT COMMISSIONER OF INCOME TAX-2022 TAXSCAN (HC) 887 The Delhi High Court (HC) held that the notice issued pointing to income escapement in the form of stock/bills of entry for import on deactivated PAN is not valid. Mittal International, the petitioner challenged the impugned order passed under Section 148A(d) of the Income Tax Act, 1961 (‘Act’) and notice issued under Section 148 of the Income Tax Act.The Delhi HC comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora viewed that interest of justice would be served if the petitioner is allowed to file a supplementary reply to the notice issued under Section 148A(b) of the Income Tax Act. RAJASTHAN GLOBAL SECURITIES PVT LTD vs ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 19(1)-2022 TAXSCAN (HC) 888 The Delhi High Court (HC) held that the notice issued u/s 148 of the Income Tax Act,1961 to a non-existing company is null.The Delhi High Court comprising of Justice Manmohan and Justice Manmeet Pritam Singh Arora viewed that not only the notice was issued in the name of the transferor company but the impugned order under Section 148A(d) of the Income Tax Act, as well as the notice under Section 148 of the Income Tax Act, have been issued on the PAN of the transferor company. ANIRUTHAN vs UNION OF INDIA & ORS-2022 TAXSCAN (SC) 200 A two-judge bench of the Supreme Court comprising the Chief Justice has dismissed a writ petition challenging the appointment of Vice-Presidents of the Income Tax Appellate Tribunal (ITAT). The grievance of the petitioner, Mr. Aniruthan was that the procedure for selection was contrary to the decision of this Court in Roger Mathew vs South Indian Bank Limited and Others. A bench comprising the Chief Justice and Justice J.B. Pardiwala observed that the High Court has entered upon the submission which was urged by the petitioner. GUJARAT NATURAL RESOURCES LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2 (1)(1) -2022 TAXSCAN (HC) 886 The Gujarat High Court quashed re assessment order as there was due explanation of ground of receipt of share application money.A Division Bench of the Court consisting of Justice N V Anjaria and Justice Bhargav D Karia observed that “Recollecting the relevant facts and aspects of this case as highlighted above, the ground of receipt of share application money from the four entities alleged to be unexplained by the Assessing Officer to proceed to exercise powers of reassessment, was the very issue considered by the Assessing Officer by calling for the relevant information in that regard in course of regular assessment undertaken for the year under consideration. IBIBO GROUP PRIVATE LIMITED vs DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 10(1)-2022 TAXSCAN (HC) 885 The Delhi High Court stayed re assessment order passed against IBIBO Group, an online travel agency. The writ petition has been filed challenging the order passed under Section 148A(d) of the Income Tax Act, 1961, and the notice issued under Section 148 of the Income Tax Act.A Division Bench consisting of Justice Manmohan and Justice Manpreet Pritam Singh Arora ordered that “Though, the Assessing Officer is permitted to pass the reassessment order yet the same shall not be given effect to and shall be subject to further orders to be passed by this Court.” RAJU SAKTHIVEL Vs CBI ACB GUWAHATI-2022 TAXSCAN (HC) 884 The Gauhati High Court has granted bail to a Commissioner of Service Tax (Appeals) who is involved in a case registered by the Central Bureau of Investigation (CBI) for allegedly demanding bribe for passing a favourable order to the assessee.Granting bail to the accused, the Court held that “having regards to above, and also having regards to the nature of accusation and the punishment prescribed for the same, as well as the submission of learned Advocates of both sides, more specially the period of detention, and further keeping in mind the dictum of Hon’ble Supreme Court in Satender Kumar Antil (supra), I am of the considered opinion that further custodial detention of the accused seems to be unwarranted herein this case, and it is a fit case where the privilege of bail can be extended to the accused.” Kulamani Parida vs State of Odisha-2022 TAXSCAN (HC) 883 While quashing the criminal proceedings against a Chartered Accountant in a bank fraud case, the Orissa High Court has held that the certification of charge sanction form 17 with the Registrar of Companies cannot attribute criminal liability to the CA since he was discharging his professional duties towards the client. Singapore Airlines Ltd vs C.I.T. -2022 TAXSCAN (SC) 199 In a significant ruling having an impact against the airlines, the Supreme Court has held that TDS under section 194H of the Income Tax Act, 1961 is attracted in the case of Supplementary Commission amounts earned by the travel agent and therefore, the Airlines are liable to deduct TDS. The bench comprising Justices Surya Kant and MM Sundresh while upholding the Delhi High Court judgment has overruled the Bombay High Court judgment in CIT v. Qatar Airways. DEEPAK KAPOOR vs PRINCIPAL COMMISSIONER OF INCOME TAX-2022 TAXSCAN (HC) 881 The Delhi High Court has held that re-assessment based on an error committed by the Assessing Officer( AO) is not permissible when Income Tax deduction is allowed after verification.Justice VibhuBakhru and Justice Amit Mahajan of the HC observed that the assessment cannot be reopened only for the reason that the AO has changed his view on the question of the fair market value or whether the amount paid by the assessee to his sisters was deductible from the total consideration. The HC held that “it is impermissible to the AO to seek to reopen the assessment to review its decision regarding the fair market value of the Property or deduction on account of the amount of ₹19,20,00,000/- paid by the assessee to his sisters or the expenses incurred by him. “ Abi Egg Traders vs Assistant Commissioner-2022 TAXSCAN (HC) 880 While delivering an assessee-friendly ruling, the Madras High Court has directed the GST department to process the ITC claim since the same was rejected solely on the ground of inadvertent error.Justice Anita Sumanth observed that “Nowhere in the counter nor in the course of the oral arguments before me, does Ms.Lydia, learned standing counsel dispute the entitlement of the petitioner to the refund. In fact, she would fairly accede to the position that the error is bonafide and reiterate that the petitioner is, in fact, entitled to the refund of ITC seeing as the export was not liable to tax.” HARINDER SINGH BEDI vs UNION OF INDIA-2022 TAXSCAN (HC) 879 In a significant ruling, the Madhya Pradesh High Court, while dismissing a writ petition, has held that the notice under section 148A(b) of the Income Tax Act, 1961 cannot be challenged through a writ petition since the Act provides for a statutory remedy for the same.Dismissing the writ petition, the Court held that “In view of the aforesaid, this Court refrains to interfere in the impugned orders/notices passed by the authorities as the same is issued in pursuance to judgments passed by the Hon’ble Supreme Court. The present petition is held to be not maintainable in view of the law laid down by the Hon’ble Supreme Court in the case of KunishettySatyanarayan (supra) and in view of availability of alternative efficacious remedy to the petitioner.”Support our journalism by subscribing to TaxscanPremium. Follow us on Telegram for quick updates.

Supreme Court and High Courts Weekly Round Up

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