2018-TIOL-601-HC-MUM-IT
Tax Recovery Office Vs Stock Exchange: BOMBAY HIGH COURT (Dated: March 26, 2018)
Income Tax - Claim of recovery - Fixed deposit - Outstanding tax demand & TDS.
The Revenue preferred petition challenging the communication received by him from the Stock Exchange in respect of the defaulting member. The said communication informed the Revenue that the surplus available with the Stock Exchange to the extent of Rs.2,33,56,874/- on account of the defaulting member out of the auction proceeds of his membership right were refunded to him. The Revenue contended that the sale proceeds of the membership rights of the defaulting member was subject to their prior rights hence, the tax dues were payable by the said defaulting member.
Therefore, the said petition was admitted on 1st February, 2018 and the Stock Exchange was directed to deposit an amount of Rs.2,12,65,925/- (net of TDS) with the Prothonotry and Senior Master, High Court, Bombay within a period of two weeks from 1st February, 2017. Consequently, on 14th February, 2018 the Stock Exchange had deposited a sum of Rs.2,33,07,565/- with the Prothonotary and Senior Master which was inclusive of interest after deducting TDS.
On Writ, the HC held that,
Whether HC can direct Prothonotary and Senior Master for premature withdrawal of fixed deposit, when all the claim of recovery from the Stock Exchange or its defaulting member is already paid to the Department - YES: HC
++ the Revenue tendered an affidavit of the Tax Recovery Officer which states that the outstanding income tax demand against the defaulting member as on 16th March, 2018 is Rs.92,60,770/-. The affidavit further states that if the said amount of Rs.92,60,770/- is paid to the Revenue, then it has no further claim of recovery either from the Stock Exchange or from the defaulting member. Thus, the petition itself would come to an end;
++ the Prothonotary and Senior Master, High Court, Bombay is directed to prematurely withdraw the fixed deposit in the aggregate of Rs. 2,33,07,565/- made by the Prothonotary and Senior Master. On withdrawal, the Prothonotary and Senior Master will pay an amount of Rs.92,60,770/- out of the said amount of deposit made by the Stock Exchange to the Revenue on its making an application to the office of the Prothonotary and Senior Master. The balance amount of the deposit would be paid over to the Stock Exchange on its making an application to the Prothonotary and Senior Master for return of the same.
Revenue's Notice of Motion disposed of
2018-TIOL-599-HC-MUM-IT
SBI Dfhi Ltd Vs ACIT : BOMBAY HIGH COURT (Dated: March 23, 2018)
Income Tax - Sections 115JB & 271(1)(c).
Keywords - Concealment of income - Inaccurate particulars & Unabsorbed depreciation.
The Assessee-company preferred the present notice of motion alongwith a stay of the operation of the order passed by the Tribunal wherein it was stated that the AO was justified in levying penalty u/s 271(1)(c) on assessee's claim for unabsorbed depreciation in the computation of its' book profit u/s 115 JB.
On appeal, the HC held that,
Whether satisfaction of AO with regard to one of the breaches mentioned u/s 271(1)(c) for initiation of penalty proceedings, permits him for levying penalty for the other breach too - NO: HC
Whether mere admission of an appeal will automatically pave way for grant of stay of an order under challenge - NO: HC
++ the Tribunal has imposed a penalty u/s 271(1)(c) on what appears to be prima facie an issue of interpretation of Sec. 115JB. It is true that no appeal was filed by the Assessee in quantum proceedings, as according to the Assessee, the amount was small and in any case it was only an issue of timing difference. In any case, penalty proceedings are different from quantum proceedings and requirements of Sec. 271(1)(c) must be satisfied before any party is visited with penalty. The order has upheld penalty without having given a clear finding as to whether penalty which is being upheld is on account of concealment of particulars of income or furnishing inaccurate particulars of income. There is no mention in the said order of what particulars of income had been concealed or what particulars of income had been inaccurately furnished. All facts were made available, but only the method of assessment at book profits u/s 115JB differed in view of interpretation of law. Thus, prima facie, penalty u/s 271(1)(c) would not be imposable on issue of interpretation;
++ the notice initiating penalty proceedings, prima facie discloses non application of mind as it does not strike off which of the two necessary ingredients for imposition of penalty namely; concealment of particulars of income or furnishing inaccurate particulars of income would apply in the facts of this case. Prima facie, the said issue seems to be covered in favour of the Assessee by the decision of this Court in the case of Samson Perinchery, which in turn followed the decision of the Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory & Ors. In the said cases, the Court has taken a view that concealment of particulars of income or furnishing inaccurate particulars of income in Sec. 271(1)(c) carries different meaning. Therefore, prima facie, this Court is of the view that the satisfaction of the AO at the time of initiation of penalty proceedings, must indicate which of the two i.e. concealment of particulars of income or furnishing inaccurate particulars of income applies to the facts of this case or in the alternative, it must indicate that both apply to the facts of the case. This is not having been done, prima facie, the said order is not sustainable;
++ the appeal has been admitted as the said issue gives rise to substantial question of law. The mere admission of an appeal would not necessarily lead to a stay of the order passed by the Tribunal. However, on these facts, the order of the Tribunal so challenged cannot at this stage form the basis of commencing and or supporting prosecution. The same should await the final disposal of the appeal.
Assessee's Notice of Motion allowed
2018-TIOL-598-HC-MUM-IT
Pr.CIT Vs Jawahar Hiranand Bhatia : BOMBAY HIGH COURT (Dated: March 19, 2018)
Income Tax - Sections 143(2), 143(3) & 292BB.
Keywords: Non service - Notice - Procedural irregularity - Scrutiny assessment.
The Assessee, an individual, filed its return for the relevant AY. The case of the Assessee was selected for scrutiny and the AO accordingly finalised the assessment. However, the Assessee contended that scrutiny notice u/s 143(2) was not served upon him within the time provided in the proviso of the Act. Therefore, being aggrieved, the Assessee filed appeal before the CIT(A). However, the matter rolled out before the tribunal, which allowed the appeal filed by the Assessee and set aside the assessment made by the AO.
On hearing the parties, the High Court held that,
Whether scrutiny assessment without timely notice as required by section 143(2) is valid - NO: HC
Whether therefore, non-service of such notice cannot be termed as mere procedural irregularity - YES: HC
++ a service of notice under Section 143(2) of the Act is a sine qua non for completion of assessment under Section 143(3) of the Act. The Apex Court in the case of Hotel Blue Moon has held that service of notice under Section 143(2) within the prescribed time is a mandatory for making an assessment under Section 143(3) of the Act. Thus, non service of notice under Section 143(2) of the Act cannot be considered to be a mere procedural irregularity. In this case, admittedly, the notice is served beyond the period as prescribed in Section 143(3) of the Act. Further, the grievance of the Revenue that as the assessee had participated in the assessment proceedings and raised the objection of non service of notice under Section 143(2) of the Act only at the end of the assessment proceedings, it must be deemed that the objection is waived. In support, attention is invited to Section 292 BB of the Act. However, the proceedings in the absence of service of notice, within the prescribed time will not be saved by Section 292BB of the Act as the proviso thereto very clearly states that if an objection is raised before the completion of assessment proceedings, then, a notice would not be deemed to have been validly served upon the assessee within time provided under the Act.
Revenue's appeal dismissed
2018-TIOL-597-HC-PATNA-IT
Dr Gitanjali Kumari Vs CIT : PATANA HIGH COURT (Dated: February 13, 2018)
Income Tax - Writ - Deceased assessee - Legal heir - Refund.
The instant writ petition was filed by the widow of deceased Assessee praying that the cheque issued for refund of Rs.68,070/- in the name of her late husband be re-issued after correcting the name so that she could reap the benefit of refund as the legal heir and successor to the estate of her late husband. The Assessee was an income tax payee and after his death with regard to income derived by him, a return was filed for the relevant AY and the same was signed and submitted after his death by his wife. Thereafter, the return was processed and the department ordered a refund of Rs.68070/- in the name of Assessee. Thereafter, the wife of the Assessee filed representation for re-issuance of the cheque in her name, but the same was not considered.
On hearing the parties, the High Court held that,
Whether if the wife of the deceased assessee submitted all the relevant documents to prove her claims, she is entitled to refund issued in the name of her deceased husband - YES: HC
++ on the wife of deceased Assessee filing all relevant documents along with a certified copy of this order supported by her own affidavit indicating the fact about the death of her husband, annexing a photo copy of the death certificate and an undertaking to the effect that if the cheque is issued in her name any complication arises in future she will refund the amount, the Revenue shall re-issue the cheque for Rs.68070/- in the name of the wife of the Assessee. In case, the she is entitled to statutory interest on such amount, the authority shall consider the same and grant the interest on the said amount to her in accordance to law.
Writ petition allowed
2018-TIOL-596-HC-MAD-IT
Wabco India Ltd Vs DCIT : MADRAS HIGH COURT (Dated: March 20, 2018)
Income Tax - Writ - Section 163(1)(c).
Keywords: Show cause notice - Writ Jurisdiction.
The Assessee-company filed the instant writ petition to issue a Writ of Certiorari and to call for the records on the file of the Revenue and to quash the notice issued u/s 163(1)(c) of the Act, where the Assessee was asked to show cause as to why for the purpose of Sections 160 to 163 of the Act, the Assessee should not be treated as the agent in terms of the provisions of Sections 163(1)(c). However, the Assessee contended that such notice was without jurisdiction as the provisions of Sections 163(1)(c) of the Act were not satisfied. According to the Assessee, to treat a person in India as a representative assessee or agent of a non-resident, the non-resident must be in receipt of any income from or through such person, in India and that in it's case, M/s.Clayton Dewandre Holdings Limited was not in receipt of any income from it.
On hearing the parties, the High Court held that,
Whether there is any need for the Writ Court to interfere with a mere show cause notice issued u/s 163(1)(c) - NO: HC
++ there is no merit in the writ petition and accordingly, the same is liable to be dismissed. The assessee shall give his reply to the show cause notice dated 09.01.2018, within a period of six weeks from the date of receipt of a copy of this order and on receipt of the same, the Revenue shall decide the matter, on merits and in accordance with law, after giving due opportunity of personal hearing to the assessee and also taking into consideration the reply to be submitted by it independently, without taking into consideration the averments stated in the counter affidavit filed in the writ petition.
Assessee's writ petition dismissed
2018-TIOL-585-HC-KERALA-CX
N J Constructions Vs CCE : KERALA HIGH COURT (Dated: March 26, 2018)
CX - COD - Assessee cannot be termed to have acted with diligence - They did not respond to SCN, failed to appear for personal hearing and challenged the order on grounds of ignorance of law - Then when the Tribunal allowed fresh consideration on terms, the condition imposed was not complied - The assessee now challenge the terms imposed as onerous and unreasonable after about three years when the liability of interest would have doubled or tripled the demand as applicable at this point, if an imposition is made - Further, Supreme Court had directed deposit of about 1/3rd of the amount in the plaint claim - Here, the Tribunal directed payment of less than 1/4th of the amount demanded - Court do not discern any unreasonableness, in the condition imposed - There is sufficient cause to condone the delay or interfere with order passed - Hence, the delay condonation application as also the appeal are dismissed - Even then, if assessee complies with the condition of deposit as directed by the Tribunal within two months, the Department would re-do the matter and would also look at whether the contention that the liability itself would not survive is applicable in the case of the assessee or not: HC
Appeal dismissed
2018-TIOL-584-HC-MUM-ST
Allied Transport Vs UoI : BOMBAY HIGH COURT (Dated: March 26, 2018)
ST - Petitioner engaged in transportation service of transporting commercial and passenger vehicles and chassis from its customers premises and deliver them at the regional sales offices and other destinations of customers - The petitioner also engages drivers for this purpose - The services falls under category of 'GTA' - Revenue alleged that the services rendered are classifiable under "Support Services of Business and Commerce" and not under GTA under FA, 1994 - There was a delay of 563 days in first appeal and delay in the second appeal was of 472 days - The appellate authority found that this delay could not have been condoned by him given the clear position in law and no assistance can be derived from Section 5 of Limitation Act, 1963 - It is this very view which the CESTAT confirmed in its order - If the cause shown does not lack bona fides, then, the litigant can seek discretionary relief - Pertinently, in this case, whenever the petitioner was aggrieved and dissatisfied by ordersinoriginal, he promptly approached the appellate authorities - When he approached the authorities in earlier cases and aggrieved by order styled as orderinoriginal dated 8th November 2011 and sought condonation of delay, the Tribunal granted it - However, in present case, Tribunal and the appellate authority could not have condoned the delay - Though this writ petition is filed, the conduct of petitioner is not such as would enable it to seek any discretionary and equitable relief; moreso, when court have noted that the order cannot be termed as exparte simply because the petitioner was not present or that no legal or factual submission could be canvassed by him or on its behalf - This is a clear case where the authorities called upon the petitioner to remain present and repeatedly - They also called upon the petitioner to produce documents and file reply to the SCNs - For both, filing a reply and for making oral arguments, opportunities were given but they have not been availed of - Therefore, none of these authorities acted perversely or in contravention of principles of natural justice, so their orders, therefore, cannot be interfered in writ jurisdiction: HC
Writ petition dismissed
2018-TIOL-583-HC-KERALA-ST
Thannirangad Service Co-Operative Bank Ltd Vs DCCE : KERALA HIGH COURT (Dated: March 5, 2018)
ST - The petitioner challenged Exts.P1 and P2 orders without making pre-deposit provided for under section 35F of the Act - The appeals were consequently rejected on that ground, without going into the merits of matter - Exts.P3 and P4 are the orders passed by Appellate Authority - Ext.P5 appeal preferred by petitioner against Ext.P3 order is still pending and Ext.P6 appeal preferred against Ext.P4 order has now been disposed of by Appellate Tribunal in terms of Ext.P7 order, permitting the petitioner to make the pre-deposit and directing the Appellate Authority to decide the appeal on merits, if the petitioner makes the pre-deposit - In Ext. P7 order passed by Appellate Tribunal, there is no time limit prescribed for making the pre-deposit - As such, no further direction is required for the petitioner to make the pre-deposit in relation to the appeal preferred against Ext. P2 order - However, in so far as petitioner has not made a predeposit till date and have expressed willingness to make the pre-deposit, it is directed that further proceedings pursuant to the impugned notices shall be deferred for a period of ten days so as to enable the petitioner to make the pre-deposit: HC
Writ petition disposed of
2018-TIOL-582-HC-MAD-CUS
Apollo Hospitals Enterprise Ltd Vs UoI : MADRAS HIGH COURT (Dated: March 9, 2018)
Cus - Petitioner is running a Hospital in Chennai and other places and for said purpose and in order to give their patients latest medical facilities, imported medical equipment - Said equipment was imported availing Customs Duty exemption Notfn 64/88 - Being satisfied that petitioner comply with the conditions stipulated in said Notfn, DGHS issued a Certificate known as CDEC, based on which Customs Department permits the petitioner to clear the goods without payment of Duty - According to petitioner, they imported various medical equipments and their application for issuance of CDEC were not considered by DGHS, but were rejected without affording an opportunity to the petitioner - In these circumstances, petitioner filed Writ Petitions challenging the said orders - This Court, by order dated 08.06.2001 set aside the proceedings of DGHS and remitted the matter back to assessee for fresh consideration - As against order passed, 2nd respondent filed a writ appeal and by order dated 05.04.2004, the Division Bench of this Court granted an order of interim stay - It is also fairly admitted by respondents 1 & 2 that they have not taken any steps to restore the Writ Appeal, which was dismissed for nonprosecution on 15.10.2008 so far, therefore, as on today, the order passed in W.P. dated 08.06.2001 has become final - Impugned order dated 02.09.2008 is set aside and the matter is remitted back to 2nd respondent for fresh consideration: HC
Writ petition allowed
2018-TIOL-581-HC-KERALA-CUS
Yogesh Trading Company Vs Assistant Commissioner : KERALA HIGH COURT (Dated: March 13, 2018)
Cus - The challenge against Exts.P1 and P2 notices is on the ground that the same are issued without complying with the directions issued by Appellate Tribunal in Ext.P3 order and this Court in Ext.P8 judgment - Since it was contended by petitioner that proper enquiry was not conducted by competent authority before making huge additions on that ground in their turnover, Appellate Tribunal ordered the assessing authority to pass fresh orders after conducting an independent enquiry - It is seen that later when the petitioner complained that steps are being taken to complete assessments without providing them the copies of materials proposed to be used against them, Court, in terms of Ext.P8 judgment, directed the assessing authority to provide copies of all such materials - If as a matter of fact, the assessing authority has issued the impugned notices without complying the directions issued by Tribunal in Ext.P3 order and this Court in Ext.P8 judgment, it is for the petitioner to challenge the assessment orders on that ground before the appellate authority - At every stage of assessment process, the petitioner cannot approach this Court invoking Article 226 of the Constitution pointing out violations if any, in directions, or infractions of statutory provisions - It is relevant to note that the subject matter of this case pertains to assessments of the petitioner for year 2002-03 - The materials on record indicate beyond doubt that the petitioner could successfully drag the assessment proceedings for about fifteen years by instituting one or other proceedings - This writ petition is yet another attempt on the part of petitioner to prolong the assessment proceedings: HC
Writ petition dismissed
