2019-TIOL-472-HC-GUW-IT + Case Story
PR CIT Vs OIL INDIA LTD: GAUHATI HIGH COURT (Dated: February 20, 2019)
Income tax - Sections 80IC & 263
Keywords - erroneous order - merger with appellate order - mineral based industry - revisionary jurisdiction - seperate oil well
The assessee company while filing its return claimed deduction u/s 80IC(2)(b)(iii) in respect of its 59 oil wells, by describing itself as a mineral based industry. The AO rejected this claim, though on a different ground that though each oil well was claimed to be an undertaking, a combined Form in 10CCB was filed instead of separate Form in respect of each oil well. Even though the issue as to whether the assessee was a mineral based industry, was not specifically analyzed, the AO assumed it to be correct and proceeded further, but rejected the claim on the technical non-compliance of filing separate Forms. On appeal, the CIT(A) granted benefit of deduction u/s 80IC. When this was the position, the CIT assumed jurisdiction u/s 263 indicating that the AO had not applied his mind on the basic issue as to whether the assessee was actually a mineral based industry or not. The assessee opposed this action, questioning the authority of CIT to initiate a revision u/s 263 when the said issue had already been concluded on the consideration made by the CIT(A). It was further contended that the revision u/s 263 was permissible only in respect of an issue which was not considered earlier before the CIT(A) and wherein the order passed by AO was erroneous & prejudicial to the interest of Revenue.
The CIT however, on adverting to the issue, held that assessee was not a mineral based industry. Accordingly, the AO was directed to modify the assessment in terms of the order passed in the said proceeding u/s 263. Pursuant thereto, the AO modified the assessment order and rejected the claim of assessee u/s 80IC. Not satisfied, the assessee preferred another appeal against such modified assessment order, which was however rejected by the CIT(A). The matter ultimately reached Tribunal, wherein the proceedings u/s 263 were set aside. However, no independent consideration as to whether the assessee was a mineral based industry or not, was not made by the ITAT.
On appeal, the HC held that,
Whether when in the revision proceedings, the CIT accepts that the concerned undertaking had sought for deduction u/s 80IC claiming to be a mineral based industry and such claim was disallowed AO but allowed by the CIT(A), the issue stands concluded and there will be no scope for re-examination in the jurisdiction u/s 263 - YES: HC
Whether when the order of AO has merged in the Appellate order passed by the CIT (A), then there is no scope for re-examination of said issue in a revision u/s 263 - YES: HC
++ a perusal of the provisions as contained u/s 263 would indicate that it provides for the Commissioner to call for and examine the records of any proceeding under the Act and, if he considers that any order passed therein by the AO is erroneous and it is prejudicial to the interest of Revenue, the Commissioner may after giving the assessee an opportunity of being heard, and after making such inquiry, pass order thereon including to enhance or modify or cancel an assessment and direct fresh assessment. In the present facts, the provision as contained in Clause (c) would also become relevant since apart from the Commissioner having the power to invoke the jurisdiction u/s 263, it is clarified that he can invoke such powers only in respect of erroneous portion of the order of AO causing prejudicial interest to the Revenue and such portion of the order not being a part of the consideration in any appeal, having been filed in respect of such assessment order to the CIT(A) and the matter not being concluded therein. Therefore, in the instant facts, what is also required to be taken note of is whether in the Assessment Order and the order passed by the CIT (A) in respect of the said assessment, the issue as to assessee claiming to be a mineral based industry was also an issue which was raised and taken note of in the proceedings whereunder the deduction was sought. In order to take note of the same, a close scrutiny of the assessment order would disclose that deduction u/s 80IC was an issue which had arisen for consideration since the deduction was sought on that basis. It is against the conclusion of AO in not allowing the deduction which was claimed u/s 80IC, the assessee was before the CIT(A), who took note of the claim for deduction as provided u/s 80IC and, in that light, having considered each oil well as an enterprise, has given the benefit of the deduction as claimed u/s 80IC, by concluding that each oil well produces crude oil and natural gas and therefore it satisfies also one of the tests for the purpose of claiming the benefit of Section 80IB & 80IC;
++ the counsel for assessee in order to substantiate the contention that the power u/s 263 cannot be invoked when the order of AO has merged in the order in appeal, has relied on various decision. On the other hand, the counsel for Revenue has relied on the decision of Supreme Court in the case of Commissioner of Income Tax, Gujarat-I, Ahmedabad –Vs.- Shri Arbuda Mills Ltd., Ahmedabad - 2002-TIOL-901-SC-IT-LB, wherein on the issue of merger, it has been held that the powers of Commissioner u/s 263 shall extend to such matters as has not been considered and decided in the appeal. From the decisions cited on either side, the law as enunciated would be clear that in order to consider the position as to whether the order of AO had merged in the order of CIT(A) and, in that context, whether the subject matter which was the issue in the assessment proceedings as also in the appellate proceedings before the CIT(A), and that in the revision proceedings before the CIT is the same, the facts involved in each case will have to be taken note so as to arrive at a conclusion whether the invocation of power u/s 263 to revise such assessment order is in respect of the same subject matter and the issue which had concluded in the assessment as also the appellate proceedings. The Assessment Order discloses that the claim for deduction as contemplated u/s 80IC was disallowed since the AO was of the view that the wells regarding which claim for deduction was made cannot be considered as 'undertaking' or 'enterprise' and despite claiming that wells to be independent production centre, single Form 10-CCB was submitted. The CIT(A) however, accepted that each oil well appear to satisfy the test and it was further held that each oil well produces crude oil and natural gas and, therefore, it satisfies also one of the tests for the purpose of claiming benefit of Section 80IB and 80IC;
++ now, a perusal of the revision proceedings u/s 263 discloses that the very issue which was considered by the CIT(A) and concluded was reopened, which is indicative by the observation of CIT, wherein he has stated that the perusal of the record shows that the AO had not examined or applied his mind on the basic issue as to whether the assessee is actually a mineral based industry or not. As noticed, the question of considering the wells of assessee as an undertaking was not accepted by the AO though the claim of mineral based industry was not rejected. Whether such acceptance was erroneous and whether the CIT(A) has committed an error in allowing the claim will lose its relevance when it is to be noticed only to the extent of finding out whether the same issue could have been examined in a subsequent revision proceeding u/s 263. When in the revision proceedings, the CIT accepts during the course of the order that the assessee had claimed deduction u/s 80IC claiming to be a mineral based industry and in that background when the claim was disallowed AO but allowed by the CIT(A), the issue would stand concluded and there would be no scope for re-examination in the jurisdiction u/s 263, as the assessment order has merged in the appellate order. The matter not having been examined in the same manner or to the same extent and depth is immaterial. In that view, the revision proceedings u/s 263 in the present context was not sustainable. In the instant case, it is noticed that the Assessment Officer had in fact disallowed the claim. Even if the order was erroneous in so far as considering or not considering the aspect of mineral based industry, the same did not suffer from the second vice of causing financial prejudice to the revenue, which was in fact disallowed by the AO but ultimately allowed by the CIT(A) which in any event cannot be corrected in a revision proceeding u/s 263.
Revenue's appeal dismissed
2019-TIOL-471-HC-MUM-IT
PR CIT Vs NATIONAL HEALTH AND EDUCATION SOCIETY: BOMBAY HIGH COURT (Dated: February 22, 2019)
Income tax - Sections 192, 194C, 194J, 194H & 201(1)
Keywords - employer employee relationship - fees for professional services - hospital based consultants - reimbursements - TDS compliance
During the year under consideration, a survey was conducted for verification of proper TDS compliance by the assessee society. During the course of survey, after recording the statement of Deepak Samant, Director (Finance) on oath and considering various other evidences, the AO inter alia held that the Hospital Based Consultants were employees of the assessee society and therefore tax was required to be deducted u/s 192 before making payments to them. He further held that payments made to Hinduja TMT/Hinduja Global Solution Ltd. required deduction of TDS u/s 194J and not u/s 194C. Since the assessee had deducted tax u/s 194C, the AO brought the difference to tax. Thereafter, the AO further held that the drug handling charges paid to M/s Saxsons Biotech, the assessee ought to have deducted TDS u/s 194H. The AO came to this conclusion because he was of the opinion that M/s Saxsons Biotech had acted as an agent of the assessee and was paid a commission for that purpose. Finally, the AO passed an order u/s 201(1) treating the assessee as in default for non compliance of proper TDS provisions. The matter ultimately reached ITAT, where the assessee was given part relief.
Hence, the Revenue Department preferred present appeal, submiting that the AO as well as the CIT(A) had taken note of the salient features of the terms of the employment of these Consultants and after taking these features as well as the other terms of the employment into consideration, came to the conclusion that such HBCs would fall in the category of employees of the assessee, though it could be said that they were in the category of fixed period / part time contract employees of assessee. Similarly, it was submitted that the payments made to two entities Hinduja TMT/Global Solution Ltd towards call centre expenses, would be fees for professional or technical services and therefore deduction of TDS had to be done u/s 194J and not u/s 194C. It was similarly submitted that the charges paid to Saxson Biotech were in the nature of a commission and therefore TDS was liable to be deducted u/s 194H and not u/s 194C.
On appeal, the HC held that,
Whether payment made to Hospital based consultants who are employed on a contractual basis in the hospital drawing variable pay, can be treated as salary warranting TDS deduction u/s 192 - YES: HC
++ as far as Hospital based consultants are concerned, it is found that this issue is squarely covered by a Division Bench decision of this Court in case of Commissioner of Income-tax (TDS Pune) (ITXA No.140 of 2013) - 2015-TIOL-392-HC-MUM-IT wherein this Court was considering whether the Tribunal was correct in holding that there exists no relationship of employer and employee between the assessee i.e., Grant Medical Foundation and the Consultant doctors employed in the hospital. After perusing the law on the subject, this Court answered the said question in favour of assessee and against the revenue. This being the case, this first issue is answered accordingly;
Whether payments found to have been made for works contract in relation to providing the customer information pertaining to the hospital and fixing appointments, does not involves technical skill and hence attracts TDS only u/s 194J and not u/s 194C - YES: HC
++ as far as payment made to Hinduja Global is concerned, it is found that the CIT(A) has examined the payments made to Hinduja TMT/Global Solution Ltd. towards call centre expenses. He noted that the work done by these two entities includes primarily providing the customer information pertaining to the hospital and fixing appointments. The appointment list contains the names of various Departments/Consultants. The call centre gives appointments and also gives instructions to callers, if any. HTMT Global Solutions also also gives information about the clinics, labs, blood bank, report availability, home services, ambulance services, admission and billing, hospitality and general enquiry etc. For all this, Hinduja TMT/Global Solution Ltd., raise an invoice on a monthly basis as per the terms of the contract. While examining all this material, the CIT(A) came to the conclusion that from all these activities it was evident that the services involved were not of a technical or professional nature. He therefore took the view that these services were in the nature of a 'works contract' and accordingly deleted the demand of tax raised by AO u/s 201(1) on merits. This action of CIT(A) was confirmed by the ITAT. Since these factual findings does not suffer from any perversity, it does not give rise to any substantial question of law;
Whether charges paid by a hospital to the supplier for purchasing radioactive drugs which are not ordinarily available in the market, can be construed as commission requiring deduction of TDS u/s 194H - NO: HC
++ as far as Drug Handling Charges paid by the assessee to M/s Saxsons Biotech, is concerned, the CIT(A) noted that M/s Saxsons Biotech arranges a particular drug, which is not ordinarily available in the market. It is a radioactive material required in nuclear medicine treatment and it is supplied to the assessee at a particular price. The charges invoiced by the supplier includes the cost of material, freight charges, customs duty, the clearing & forwarding charges, delivery charges etc. The invoice raised by M/s Saxsons Biotech consist of two parts, one is of actual cost of the material supplied and the other is for the service charges on which tax is deducted u/s 194C. On going through the findings given by the CIT(A) as well as the ITAT on this issue, this Court is fully satisfied that in the facts of the present case, the assessee correctly deducted TDS u/s 194C. It is found that in the present case, there was no question of payment of any commission to Saxsons Biotech which supplied the radioactive drug used by the assessee in Nuclear Medicine Treatment. The facts and as recorded by the authorities would clearly show that the drug supplied by Saxsons Biotech to the assessee was invoiced by Saxsons Biotech in the manner set out earlier. This being the case, there was no question of such a payment being in the nature of commission that would require deduction of TDS u/s 194H;
Whether payments made by hospital on actual cost basis without any markup, to certain trust/institutions for their employees who had rendered services to the hospital in key managerial positions, are in the nature of reimbursements, and hence requires no TDS deduction u/s 194J - YES: HC
++ as far as payments made to Hinduja Foundation for its employees who had rendered services to the assessee in key managerial positions, is concerned, it was the case of assessee that these payments are to be treated as a reimbursement and not as payment towards professional fees which would require TDS u/s 194J. The CIT(A) noted that the Hinduja Foundation charges the salaries and other allowances to the assessee on actual basis and there is no further markup paid by assessee to the Hinduja Foundation. The personnel deputed by Hinduja Foundation to assessee are all highly qualified persons who are deputed to man senior management positions of the assessee hospital. The fact that the Hinduja Foundation charges only the actuals from the assessee can be appreciated because Hinduja Foundation is also a trust. All the personnel were on the pay-roll of the Hinduja Foundation and they got all the benefits from the Foundation. In turn, the Foundation raised a debit note towards actual cost of employment and accordingly the assessee made the payments to the said Foundation and which was therefore clearly in the nature of reimbursement. It was in these circumstances, the ITAT concurred with the findings of CIT(A) and opined that the payments made by assessee to the Foundation were not in the nature of FTS. This Court found that the authorities are fully justified in coming to the conclusions that the payments made by assessee to the Foundation was in the nature of reimbursement and not in the nature of any technical or professional services which required deduction of TDS u/s 194J.
Revenue's appeal dismissed
2019-TIOL-469-HC-MUM-IT + Case Story
PUJA C KHANDELWAL Vs ACIT: BOMBAY HIGH COURT (Dated: February 06, 2019)
Income Tax - Brokerage charges - Withdrawal of claim
THE assessee, an individual, filed return for the relevant AY. On assessment, the AO passed order making additions on two counts. The first was a sum of about Rs 89.19 lakhs which were disallowance of brokerage charges paid by the assessee. The other was of about Rs 12.01 crores towards certain purchases. On appeal, the CIT(A) called for a remand report. While submitting the same, the AO issued notices to the parties to whom the assessee claimed to have had paid brokerage. The assessee conceded before the AO that such payments were not genuine. Thus the assessee withdrew the dispute regarding the additions made on account of brokerage charges. Regarding the additions made on account of purchases, the CIT(A) gave full relief to the assessee, while sustaining the disallowance of brokerage charges.
The assessee then approached the Tribunal, contesting such disallowance. The Tribunal however, gave only partial relief and sustained disallowance of about Rs 61.71 lakhs on this count. Such findings were based on the rationale that the assessee had been given a full opportunity to present submissions and had consented to withdraw the ground of challenge before the CIT(A) in this regard. Hence the present appeal.
On appeal, the High Court held that,
Whether any claim revoked before the CIT(A) can be resurrected before the Tribunal, more so where the assessee fails to show any mistake of fact or law which led to withdrawal of claim before the former - NO: HC
++ during the remand proceedings, the assessee was confronted with material suggesting that the brokerage payments were not genuine. The assessee gave a statement conceding to the same and later on before the CIT(A) withdrew the entire claim. Once having withdrawn the claim from the appellate authority, it was not open for her to challenge the order based on such concession, before the Tribunal. In the appeal memo also, no grounds are made out suggesting any mistake of law on facts which led the assessee to give such concession. When the assessee by withdrawing the claim did not invite any decision from CIT(A), it cannot be understood as to under what circumstances, she could have filed appeal against the order of the CIT(A) recording that such ground is not required to be examined on merits. Hence the appeal is not maintainable.
Assessee's appeal dismissed
2019-TIOL-468-HC-AHM-VAT
GANESH PROTEINS Vs ACST: GUJARAT HIGH COURT (Dated: January 18, 2019)
Gujarat Value Added Tax Act, 2003 - Writ - Section 45(7)
Keywords - Attachment of bank account - Cash credit account - Debtor-creditor relationship
THE assessee-company owns three bank accounts, which were attached by the Commercial Taxes Department during the relevant AY. The assessee claimed that the account attached was a cash credit account, which enabled the it to borrow money from the bank for purposes of its business. It also claimed there to be no debtor-creditor relationship between the bank and the assessee.
In writ, the High Court held that,
Whether attachment of cash credit bank accounts is sustainable, where such account only enables an assessee to borrow money from the bank & does not entail a debtor-creditor relationship between the two - NO: HC
++ through the petition was filed challenging the order made under section 45(7) of the Gujarat Value Added Tax Act, 2003 whereby three bank accounts of the assessee were attached, for the purpose of granting interim relief, the request qua the cash credit account is being considered only;
++ in Kaneria Granito Ltd. v. Assistant Commissioner of Income Tax, the writ court categorically held that a cash credit account would be in the nature of borrowing by the assessee from the bank, and that the bank and the assessee, therefore, do not have the debtor-creditor relationship. Under the circumstances, when no amount lying in the cash credit account belongs to the petitioner, the question of attaching such account under section 45(7) of the Gujarat Value Added Tax Act, 2003 does not appear to be justified. Hence the Department is directed to lift the attachment of the bank account.
Assessee's writ petition partly allowed
2019-TIOL-467-HC-ALL-VAT
SA PRODUCTS Vs STATE OF UP: ALLAHABAD HIGH COURT (Dated: February 14, 2019)
VAT - Writ - bank guarantee - detention order - seizure of goods
The assessee dealer had preferred the present petition challenging the challenging the detention order and consequential notice issued by the Commercial t6ax Department. The counsel for assessee submitted that the assessee had already paid the required tax for the goods which were being transported. In fact more tax amount had been deposited and the authorities without proper application of mind have seized the goods alongwith the vehicle. It was also submitted that e-way bill was not required to be submitted for the same as the goods were valuing below Rs.50,000/-.
On the other hand, the Revenue's counsel contended that the correct position was that the assessee had not paid the tax for the Tobacco bags and the tax which was deposited by the assessee was only with respect to the Pan Masala. Moreover, in the seizure memo, the quantity of goods was much more than mentioned in the tax invoice. It was further contended that in case the assessee wanted to get all the goods and vehicle released, then it had to submit a Bank Guarantee of the valuation of the amount of applicable tax, interest & penalty payable.
On Writ, the HC held that,
Whether when owner of goods furnishes security in the form of Bank Guarantee equivalent to the amount of applicable tax, interest & penalty payable, then Commercial tax authorities can consider the release of goods detained from such dealer - YES: HC
++ a perusal of the provision of release of goods under Rule 140, shows that in case the owner of goods furnishes the security in the form of Bank Guarantee equivalent to the amount of applicable tax, interest and penalty payable, the authorities can consider the release of goods & vehicle. In view of the same, the case is disposed of with the observation that assessee shall furnish the security in the form of Bank Guarantee as before the authority concerned. The concerned authority, thereafter may consider the release of goods and the vehicle and pass appropriate orders expeditiously say within a period of ten days thereafter. In case the assessee is aggrieved by the order passed by the authority concerned, he is at liberty to challenge the same before the appropriate Forum.
Case disposed of
2019-TIOL-466-HC-PATNA-VAT
USHA INTERNATIONAL LTD Vs CCT: PATNA HIGH COURT (Dated: January 30, 2019)
Bihar Value Added Tax - Engaging new legal counsel - Review petition - Withdrawal of appeal
THE assessee-company filed the present petitions seeking review of an order passed by the High Court in its case. The assessee claimed that it sought to withdraw its matter, but was unaware of the listing of its appeal. It also claimed to have given no instructions to its counsel. Thus the assessee expressed shock and dismay upon learning that its matter was dismissed as withdrawn. Upon enquiring with the counsel, it was learned that the counsel had stopped appearing in the matter and the case was being handled by the counsel's son. Hence the assessee claimed there to be an error apparent on record, considering that the presence of the counsel's son in the matter was incorrect.
On hearing the petitions, the High Court held that,
Whether review of High Court's orders is permissible based on mere claims by an assessee that a new counsel appointed, acted beyond the scope of instructions given by the assessee - NO: HC
++ considering the findings of the Division Bench dismissing the assessee's case, any leniency in accepting the plea of the petitioner company would not only amount to diluting the view of the earlier Division Bench of this Court, it is also likely to set a bad precedent as any litigant may approach this Court through a new set of lawyer for review of the order making a vague statements that he had not instructed to his Advocate(s) to withdraw the appeal. The sanctity of Court’s order is to be preserved. Hence the averments made in the review petitions merit being quashed.
Assessee's review petitions dismissed
2019-TIOL-465-HC-MAD-IT
C KRISHNAMURTHY Vs ITO: MADRAS HIGH COURT (Dated: January 09, 2019)
Income Tax - Sections 36(1)(vii) & 37(1)(1)(vii)
Keywords - Bad debts - Money received by stock broker - Trading loss
THE assessee, an individual, filed return for the relevant AY, declaring bad debt of about Rs 12.06 lakhs. On assessment, the AO held that such bad debts were not allowable u/s 36(1)(vii). Subsequently, the Tribunal upheld such findings. It was also held that money receivable by a stock broker from clients, if unrecovered, did not qualify as trading loss and so could not be allowed as bad debt u/s 37(1)(vii). The assessee then filed a Miscellaeneous Application seeking that the Tribunal's order be quashed. The same was dismissed on grounds that the assessee's Authorized Representative (AR) did not appear on the specified date. While the AR was unable to appear on health grounds, the representative appointed by him also failed to appear. Thus the Tribunal proceeded to quash the application on merits, rather than grant an adjournment, as had originally been planned by the assessee's AR. Thus the present appeals.
On appeal, the High Court opined that the assessee's conduct was not deliberate or wilful & that the assessee was not guilty of unnecessarily prolonging the matter by repeatedly seeking adjournments. Hence the court adopted a liberal approach and directed that the Tribunal's order be recalled and the assessee's case be restored before it.
Assessee's appeals allowed
2019-TIOL-464-HC-MUM-IT
PR CIT Vs HASSAN ALI KHAN: BOMBAY HIGH COURT (Dated: February 18, 2019)
Income tax - actual beneficiary - issuance of bank draft - presumption u/s 292C - seizure during raid
The assessee is an individual. During the search operation at the residence of one Kashinath Tapuriah, three bank drafts of Union Bank of Switzerland were found and seized. One bank draft was for payment of 2 Million US$ drawn in favour of one Pan Asian Distribution Ltd, payable at Singapore. Another draft was for a sum of Rs.2 Million US$ drawn in favour of the Assessee, payable in India. The AO therefore added Indian Rupees, equivalent of such sums in the hands of assessee. The issue eventually reached to the Tribunal, wherein the the addition in relation to bank draft in the name of assessee stood confirmed. Whereas, addition in connection with the bank draft in favour of the Pan Asian Distribution Ltd., was deleted.
On appeal, the HC held that,
Whether mere letter issued by the Bank would establish a relation between the payable amount and an individual, particularly when the beneficiary mentioned in the draft was a limited company - NO: HC
++ it is notice that, the search was not conducted at the premises of assessee but at the residence of the third party from where, the bank drafts were recovered. The draft in question did not contain name of assessee as payee but of Pan Asian Distribution Ltd. It was in this background that, the Tribunal refused to accept the Revenue's contention that, the Assessee was beneficiary of this payment. The Tribunal noted that, there was no material on record to suggest that, such a company did not exist nor there was any evidence of any link between the said Company and the Assessee. The Tribunal, therefore, observed that the presumption as referred to u/s 292C in such a case would not arise. Entire issue is thus factual;
++ the Revenue's counsel however, vehemently contended that, during the search operation, Revenue Authorities had found a document in the nature of letter from the bank, pointing out that, the last date for presentation of the draft in question had expired and that the assessee should get the draft revalidated. He submitted that, no such letter would have been written by the bank, unless the assessee was the beneficiary of the payments. In the opinion of this Court, mere letter from the bank would not establish a relation between the payable amount and the assessee, particularly when the draft was in favour of a limited company. As recorded, documents were not seized from the possession of assessee but during the raid from a third party. No question of law, therefore arises.
Revenue's appeal dismissed
2019-TIOL-463-HC-MUM-IT
SAPANA C RANADIVE Vs ACIT: BOMBAY HIGH COURT (Dated: February 21, 2019)
Income tax - Writ - Rule 68-B
Keywords - auction of property - interest on tax dues - limitation period
The present assessee is granddaughter of late Sudhir Hendre and his wife Manik Hendre. According to the assessee, the grandparents had died intestate and she was daughter of Jagdish Hendre, the son of the late couple who had predeceased his parents. Since the assessee's grandparents were assessees in default, the Income Tax Department had raised sizable tax, interest & penalty dues against them concerning several assessment years of the past. As the dues could not be recovered, the Department first attached as many as six immovable properties of the assessee's grandparents. Later on, the Department was in the process of putting such properties to the auction sale.
Hence, the assessee had approached this Court and challenged the auction proceedings, contending that the proposed sale was hit by the limitation period prescribed under Rule 68B of the second schedule of the Income Tax Act. It was also contended that there was no clarity about the total dues of the Department from the assessee's grandparents. On the other hand, the case of the Department was that the period of limitation prescribed under Rule 68B would apply from the date the Department computed and ordered payment of interest on the assessees' tax & penalty dues.
On Writ, the HC held that,
Whether the period of limitation prescribed under Rule 68B would commence from the date when the Department has ordered payment of interest on assessees' tax & penalty dues - NO: HC
++ it would prima facie appear that the auction proceedings are being conducted after several years of the Department ordering assessment of the properties. Dues of the deceased assessees' had arisen in relation upto the A.Y 1999-2000. A serious question of the action of Department being within the period of limitation under Rule 68B would arise. Prima facie, this Court does not think that the Departmental authorities are correct in contending that such period would commence only after the computation of interest and order asking the assessees to pay such interest is passed. In that view of the matter, the petition may be adjourned for further hearing and by way of adinterim relief, the auction of the properties in question is stayed.
Case deferred
2019-TIOL-462-HC-MUM-IT
PR CIT Vs BANK OF INDIA: BOMBAY HIGH COURT (Dated: February 05, 2019)
Income Tax - Sections 156, 244(1)(b) & 244A
Keywords - Refund of tax paid in excess - Self-assessment
THE assessee is a public bank. It filed paid tax for the relevant AY, the assessee deposited tax based on self-assessment. Such tax was later refunded to it, with which the assessee claimed interest u/s 244A. On assessment, the AO claimed that the assessee was ineligible for such interest. Thereafter, the Tribunal held that interest u/s 244A is to be allowed on the self assessment tax refunded to the assessee. Hence the Revenue's appeal contesting such grant of interest, on grounds that the self-assessment tax was paid voluntarily and not pursuant to a demand notice u/s 156.
On appeal, the High Court noted that the issue at hand stood settled in the assessee's favor, in the decision of the Delhi High Court in Engineers India Ltd., wherein it was held that that the assessee therein was entitled to interest u/s 244A on refund of excess tax paid after self-assessment. Following such findings, the Tribunal's findings were sustained.
Revenue's appeal dismissed
2019-TIOL-592-CESTAT-MUM
TWIST ELECTRONICS Vs CCGST & CE: MUMBAI CESTAT (Dated: December 13, 2018)
ST - Commissioner(A) dismissing appeal on the ground that there was a delay of 360 days in filing the appeal - As per proviso to section 35(1) of the CEA, 1944, the Commissioner(A) is not vested the power to condone the delay beyond three monthsin addition to the statutory period of three months in filing the appeal before him - in view of the apex court decision in Singh Enterprises - 2007-TIOL-231-SC-CX holding that beyond the statutory period prescribed, no power is vested under the statute, therefore, no merit in the appeal, hence dismissed: CESTAT [para 3]
Appeal dismissed
2019-TIOL-591-CESTAT-MUM
VENOGOPAL FOODS PVT LTD Vs CCE: MUMBAI CESTAT (Dated: January 22, 2019)
CX -Sugar syrup utilized by the appellant in the manufacture of biscuits cannot be considered as 'excisable' within the meaning of s.2(d) of the CEA, 1944 - no duty liability - Tribunal decision - 2019- TIOL-110-CESTAT-MUM in appellant's own case followed - appeal allowed: CESTAT [para 4, 5]
Appeal allowed
2019-TIOL-590-CESTAT-MUM
SJS POLYMERS Vs CCE: MUMBAI CESTAT (Dated: December 13, 2018)
CX - Allegation that the partnership firm, a ‘first stage dealer' of plastic ropes had generated fictitious invoices for facilitating availment of CENVAT credit by entities named therein without corresponding procurement of goods described therein - penalty imposed of Rs.87,08,253/- under rule 26 of CER, 2002 - appeal to CESTAT.
Held: There is no record of any investigation having been pursued with the recipients on record to ascertain receipt of goods at the destination - appellant had produced statements as well as extracts from the books maintained by the recipients as evidence of genuineness of the transaction that was alleged to be fictitious - certification issued by the Octroi authorities is not only limited to a few of the invoices but the certification itself lacks sufficient clarity to be treated as a sample validating the allegations against all other invoices - insofar as penalty imposed u/r 26 is concerned, it is clear from the rules that confiscability of goods is an essential pre-requisite for imposition of penalty - in the instant dispute, there is no allegation that the impugned goods did not come into possession of the appellant - on the contrary, the entire case has been built around the goods not having passed into the possession of the buyers named in the 703 invoices and, therefore, the goods are not offending even if sold to buyers who are not on record - in the absence of any offence in relation to the goods that are alleged to have been not supplied to persons on record, rule 26 of CER cannot be invoked - impugned order is liable to be set aside on this count - appeal allowed: CESTAT [para 5, 7, 9]
Appeal allowed
