CASE LAWS
2017-TIOL-01-SC-IT
LIBERTY MARINE SYNDICATE PVT LTD Vs PR CIT: SUPREME COURT OF INDIA (Dated: December 30, 2016)
Income Tax - Sections 131, 132, 133A, 153A, 143(2) & 142(1)
Keywords: search and seizure - assessment in case of search – undisclosed assets & alternate remedy
Whether there is any pre condition attached for issue of a notice to assessee before invoking the jurisdiction conferred u/s 132 - NO: SC
Whether in such case, issuance of notice u/s 153A is justified, if assessee's premises is searched upon failure of assessee to comply with notices issued u/s 143(2) & 142(1) - YES: SC
The assessee company is dealing with export of iron ore and fines. Income Tax Department conducted a survey u/s 133A at its registered office premises. Search was also conducted and no undisclosed assets or income were found in the course of search and seizure. Notice U/s.153A for AYs 2009-10 to 2014-15 was issued against the assessee.
A writ had also been filed impugning the notice issued u/s 153A, where it was held that issuance of notice was not necessary before invoking the jurisdiction conferred on the I-T Authorities under the provision of Section 132.
The Apex Court did not find any merit in the petition of the assessee and accordingly, dismissed the SLP.
Assessee's petition dismissed
2017-TIOL-24-HC-P&H-IT
CIT Vs PUNJAB INFRASTRUCTURE DEV BOARD: PUNJAB AND HARYANA HIGH COURT (Dated: December 20, 2016)
Income Tax - Sections 194C, 201 & 201(1A).
Keywords - 'such tax', failure to deduct TDS, interest & principal sum
The assessee is a Board, wholly controlled and managed by the Government of Punjab. The assessee entered into a contract with a party for achieving its objects under the Punjab Act under various models such as the Build Operate and Transfer, Design Build Operate and Transfer and Operation and Management models. Under these models-contracts the payments are made to private parties referred to as concessionaires. The AO held that the assessee was liable to deduct tax at source on the payments made and having failed to do so, attracted interest u/s 201(1A). On appeal, the CIT(A) held that the assessee was not liable to deduct tax at source at all and accordingly deleted the levy of interest u/s 201(1A).
On appeal, the HC held that,
Whether the amendment in Sec 201(1A) vide FA, 2010 nullifies the liability to pay interest for TDS default - NO: HC
++ it is seen that Supreme Court in Hindustan Coca Cola Beverage P. Ltd. vs. Commissioner of Income Tax 2007-TIOL-144-SC-IT, held that even if the deductee assessee has paid the tax dues, it would not alter the liability to charge interest u/s 201(1A) till the date of payment of taxes by the deductee assessee. It was further held that the same would not even affect the liability for penalty u/s 271C. Thus, even prior to the amendment on 1st July, 2012, the liability to pay interest under Section 201 (1A) was there even in cases where the deductee assessee had paid the tax dues. The language of Section 201 is clear and unqualified. It indeed does not permit an assessee to decide for itself what the liability of the deductee assessee is or is likely to be. That is a matter for the assessing officer who assesses the returns of the deductee assessee. The section does not distinguish between cases where an assessee is in a position to determine the tax liability of the deductee assessee and cases where it is not in a position to do so;
++ the words "such tax" refer to the liability for the principal sum of the tax. The liability for interest is provided for separately in sub section (1A). The language of section 201 draws a distinction between tax and interest thereon. The proviso only specifies that in the event of the conditions of clauses (i) to (iii) thereof being complied with the person referred to in the main part of sub section (1) shall not be deemed to be an assessee in default "in respect of such tax". The proviso does not specify that the persons referred to in the main part of sub section (1) shall not be deemed to be assessees in default in respect of the interest on such tax. The liability of a person to pay interest under sub section (1A) as the main part stood prior to the amendment by Finance Act, 2010 w.e.f. 1st July, 2010 or upon the said amendment makes no difference. The only thing is that the liability to pay interest would be in accordance with sub section (1A) as it stood at the relevant time and for the assessment year concerned. The impugned order of the Tribunal is therefore set aside and the matter is remanded for a decision on the assessee's main contention that Section 194C is not applicable.
Case Remanded
2017-TIOL-23-HC-UKHAND-IT
MARUTI SAH AND BROTHERS Vs ITO: UTTARAKHAND HIGH COURT (Dated: December 26, 2016)
Income Tax - Sections 142(1), 143(2), 143(3), 147 & 148
Keywords - writ - reasons to believe - reopening of assessment - income from other sources & opportunity of being heard.
The assessee, an AOP, derives income from retail liquor trade and no other source. Maruti Nandan Sah was its Principal Member. Assessee received notice to file return u/s 148. A few days later, assessee had received another letter whereby it was asked to file their ITR for A.Y. 2009-10 in response to notice issued u/s 148. Assessee submitted that "the Original return filed on 30.03.2010 may be treated as the return filed in response to the above-mentioned Notice". According to assessee, the reasons recorded for reopening assessment were solely and purely related to the reasons recorded for reopening the assessment of another assessee, Maruti Nandan Sah, an individual, u/s 147 and were in no manner related or even connected to assessee AOP. The assessee, in response to the aforesaid letter, to the reasons recorded therein and to notice u/s 142(1), preferred objections and brought on record the erroneous legal and factual position taken by the Revenue in recording the reasons for issuing the notice u/s 148.
On appeal, the HC held that,
Whether the option of writ remedy can be exercised even if there is no violation of principles of judicial procedure and the assessee being given hearing opportunity - NO: HC
++ in the present case, it is found that required notice has been sent and reasons for issuance of notice/initiation of proceeding have also been disclosed to assessee. The argument of assessee regarding receipt of query letter by Maruti Nandan Sah can also be looked into by AO. Required sanction was also obtained from competent authority. In such situation, the Court is not inclined to entertain the writ petition for quashing the notice issued u/s 148. Rather, it will be appropriate for the petitioner to approach the AO and reply to the notice. It is always open for the petitioner to take all the pleas before AO which he has taken before the Court. It is not the case of the petitioner that the Authority has not proceeded as per relevant provisions of the Act or is proceeding in the mater in defiance of the fundamental principles of judicial procedure, or has not/is not providing proper opportunity of hearing to the petitioner.
Assessee's writ dismissed
