2020-TIOL-2026-HC-MAD-IT

CIT Vs Lakshmi Vilas Bank Ltd

On appeal, the High Court finds that the issues raised by the Revenue have been settled vide the judgment in the assessee's own case for earlier AY, wherein it was held that the expenditure incurred by the assessee towards broken period is liable to be allowed as revenue expenditure.

- Revenue's appeal dismissed: MADRAS HIGH COURT

2020-TIOL-2025-HC-MAD-IT

Pr.CIT Vs Veena B Jain

On appeal, the High Court acknowledges the assessee's request to seek redressal of the dispute under the Direct Tax Vivaad Se Vishwaas Scheme 2020. Hence it permits withdrawal of appeal. It also directs the authorities concerned to consider the assessee's application under the Scheme and pass appropriate order accordingly.

- Revenue's appeal disposed of: MADRAS HIGH COURT

2020-TIOL-2024-HC-MAD-IT

Naveen Balaji Vs ACIT

On hearing the petition, the High Court directs the assessee to file a petition before the ACMM concerned, seeking cross examination of the relevant witness.

- Criminal petitions disposed of: MADRAS HIGH COURT

2020-TIOL-2023-HC-KAR-IT

Kilara Power Pvt Ltd Vs ITO

Whether waiver of interest by IREDA cannot be considered as withdrawal of provision and is not to be reduced from the book profit - YES : HC

- Assessee's appeal dismissed: KARNATAKA HIGH COURT

2020-TIOL-1490-ITAT-DEL

Zile Singh Vs Pr CIT

Whether according to Exp. 2 to sec. 263 of the Act, any order passed without making due inquiries which should have been made is an order erroneous and prejudicial to the interest of Revenue - YES : ITAT

- Assessee's appeal dismissed: DELHI ITAT

2020-TIOL-1489-ITAT-DEL

MA Projects Pvt Ltd Vs ACIT

Whether the notice issued by the AO is bad in law, if it did not specify under which limb of Sec. 271(1)(c) the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or for furnishing inaccurate particulars of income - YES: ITAT

- Assessee's appeal allowed: DELHI ITAT

2020-TIOL-1488-ITAT-DEL

Ester Industries Ltd Vs DCIT

Whether the assessee is entitled to an opportunity to submit the material, if any, for verification of the entitlement to carry forward short term capital loss - YES: ITAT

- Assessee's appeal partly allowed: DELHI ITAT

2020-TIOL-1487-ITAT-MUM

DCIT Vs ICICI Prudential Life Insurance Company Ltd

Whether only those adjustments which are expressly not prohibited u/s 44 of the Act could be made and depreciation which has been debited in the audited accounts as per the consistently followed and accepted accounting policy need not be disallowed - YES: ITAT

- Revenue's appeal dismissed: MUMBAI ITAT

2020-TIOL-1486-ITAT-MUM

Hellios Tubealloys Pvt Ltd Vs DCIT

Whether AO is required to adopt the profit percentage at 12.5% minus gross profit already declared by the assessee with regard to the disputed purchases - YES: ITAT

- Assessee's appeal partly allowed: MUMBAI ITAT

2020-TIOL-1485-ITAT-MUM

Ganayaka Steel Pvt Ltd Vs ITO

Whether once an appeal is preferred before the CIT(A) then it is obligatory on his part to dispose off the same on merits and the CIT(A) is not vested with any power to summarily dismiss the appeal for non-prosecution - YES: ITAT

- Assessee's appeal allowed: MUMBAI ITAT

2020-TIOL-1484-ITAT-MUM

Thacker & Company Ltd Vs ITO

Whether if the interest income has been accepted to be the Business Income in all the other years, the said treatment should not be disturbed in later year - YES : ITAT

- Case remanded: MUMBAI ITAT

2020-TIOL-1483-ITAT-MUM

Medley Pharmaceuticals Ltd Vs DCIT

Whether when the case of the assessee in earlier year has been accepted under similar facts, there is no reason for the AO to vary from the settled position by estimating the profit in subsequent year - YES: ITAT

- Assessee's appeal allowed: MUMBAI ITAT

2020-TIOL-1482-ITAT-AHM

Zaveri & Company Pvt Ltd Vs DCIT

Whether incomes which are inextricably linked with carrying of business are also derived from business hence eligible for deduction - YES: ITAT

- Revenue's appeal dismissed: AHMEDABAD ITAT

GST - The present petition was filed seeking that directions be issued to the Revenue authorities concerned to issue necessary instructions, directions and orders to the jurisdictional officers to give effect to the rectified GSTR-3B returns filed manually by the petitioner for the months of July to September 2017 after accepting and verifying the same based on the information and supporting documents submitted - The petitioner claims to have submitted the rectified Form and requisite information, but the Revenue had yet not completed the verification process - The petitioner claimed that the CBIC had asked the petitioner to approach the jurisdictional tax authorities as it is them, and not the Board, which is authorised to verify and process the rectified Form GSTR-3B.

Held - Issue notice - Rejoinder affidavit, if any, be filed before the next date of hearing - List the matter on 13th January, 2021: HC

- Case deferred: DELHI HIGH COURT

CX - SCNs alleging excess availment of CENVAT credit was issued on 01.06.2006 and 28.11.2006 to the petitioner - Replies were submitted on 04.09.2006 and 25.01.2007, thereafter, nothing was heard by the petitioner and since no  consequential decision was taken, petitioner was under the bona fide belief that the central excise authorities had accepted its reply/submissions and had given a quietus to the matter -  After about 13 years, petitioner was served with a letter dated 13.08.2019 by the third respondent informing that a personal hearing was fixed on 21.08.2019; letter was followed by subsequent letters dated 23.08.2019 and 04.09.2019 - Being aggrieved by this attempt to revive the SCNs after a lapse of almost 13 years, petitioner filed the present WP on 06.09.2019  seeking a direction to the respondents for a declaration that such delayed adjudication would render the show-cause notices and consequential proceedings null and void - Incidentally, after filing of the Writ petition,  order-in-original was passed on 11.11.2019 confirming the demand of duty of Rs.11,52,281.00 covered by the first SCN and the proceedings initiated under the second SCN dated 28.11.2006 was dropped - Accordingly, an amendment was made by the petitioner to the petition bringing on record the O-in-O dated 11.11.2019 - It is  mentioned in the O-in-O that the two show-cause notices were transferred and kept in call book in view of pendency of department's appeal on similar issue before the Gujarat High Court in the case of the petitioner itself i.e., Tax Appeal No.359 of 2011 - That since the appeal was subsequently disposed of on 17.06.2015 whereafter as per direction of higher authority both the show-cause notices kept in the call book were retrieved for commencement of adjudication proceedings.

Held:  Question for consideration is whether in the facts and circumstances of the case, such delayed adjudication of the show-cause notices would be just, proper and legal? - Ancillary to the above question would be the question as to whether the order-in-original passed pursuant to such adjudication would be legally tenable? - Further question which would arise for consideration is whether such an order passed after filing of the writ petition before the High Court questioning the inordinate delay in adjudication would stand the test of reasonableness and legality? - Court has held that a show-cause notice issued a decade back should not be allowed to be adjudicated upon by the revenue merely because there is no period of limitation prescribed in the statute to complete such proceedings - Larger public interest requires that revenue should adjudicate the show-cause notice expeditiously and within a reasonable period - What would be the reasonable period would depend upon the facts and circumstances of each case but certainly a period of 13 years cannot be termed as a reasonable period - Regarding keeping the show-cause notice in the dormant list or the call book, this Court has held that such a plea cannot be allowed or condoned by the writ court to justify inordinate delay at the hands of the revenue - In any case, such a procedure internally adopted by the respondents is not binding on the Court - In the present case, it is evident that the delay in adjudication of the show-cause notices could not be attributed to the petitioner - The delay occurred at the hands of the respondents - Respondents have kept the show-cause notices in the call book but without informing the petitioner - Upon thorough consideration of the matter, Bench is of the view that such delayed adjudication after more than a decade, defeats the very purpose of issuing show-cause notice - When a show-cause notice is issued to a party, it is expected that the same would be taken to its logical consequence within a reasonable period so that a finality is reached - A period of 13 years, as in the present case, certainly cannot be construed to be a reasonable period - Petitioner cannot be faulted for taking the view that respondents had decided not to proceed with the show-cause notices - An assessee or a dealer or a taxable person must know where it stands after issuance of show-cause notice and submission of reply - If for more than 10 years thereafter there is no response from the departmental authorities, he/it cannot be faulted for taking the view that its reply had been accepted and the authorities have given a quietus to the matter - As has been rightly held by this Court in Raymond Limited ( 2019-TIOL-1864-HC-MUM-CX ) , such delayed adjudication wholly attributable to the revenue would be in contravention of procedural fairness and thus violative of the principles of natural justice - An action which is unfair and in violation of the principles of natural justice cannot be sustained - Sudden resurrection of the show-cause notices after 13 years, therefore, cannot be justified: High Court  [para 18, 21, 23]

CX -  Respondents had not taken any action pursuant to the show-cause notices for long 13 years till issuance of notice for personal hearing on 13.08.2019 - After the petitioner approached this Court by filing the present writ petition on 06.09.2019 with due intimation to the respondents, respondent No.3 went ahead and passed the order-in-original dated 11.11.2019 - Bench fails to understand when the respondents could wait for 13 long years after issuance of the show-cause notices, there could not have been any earthly reason to proceed at such great speed and pass the order-in-original before the Court could adjudicate on the correctness of the action of the respondents - Is it open to the respondents to materially alter the subject matter of the writ petition pending before the Court and then contend that because of such material alteration, the writ petition has become infructuous and that the petitioner should avail the alternative remedy of appeal? - When a matter is brought before the Court or the Court is examining the matter, respondents cannot initiate or proceed with a parallel proceeding on its own to render the court scrutiny redundant - Such an approach is neither acceptable nor permissible - In any view of the matter, when the commencement of adjudication proceedings after inordinate delay of 13 years post-issuance of show-cause notices and submission of reply is held to be untenable in law, any consequential decision or order based on such delayed adjudication would also be rendered invalid - Bench has no hesitation to hold that respondents were not justified in commencing adjudication proceeding 13 years after issuance of the show-cause notices dated 01.06.2006 and 28.11.2006 - Such adjudication proceeding is, therefore, held to be invalid - Consequently, impugned order-in-original dated 11.11.2019 issued by respondent No.3 would also stand interfered with inasmuch as it is set aside and quashed - Writ petition is allowed: High Court   [para 24, 26, 27, 28, 29]

- Petition allowed: BOMABY HIGH COURT 

ST - Petitioner seeks quashing of order dated 22.01.2020 passed by the Designated Committee rejecting its application (declaration) under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and further seeks a direction to the respondents to consider afresh such application (declaration) as per the above scheme - Petitioner filed application (declaration) on 12.12.2019 in SVLDRS-1 form under the category "Investigation, Enquiry or Audit" with further sub-categorization as 'Investigation by Commissionerate' - Petitioner mentioned that the amount of service tax dues was Rs.91,29,094.00 which amount was paid as pre-deposit, therefore, it was mentioned that the amount required to be paid by the petitioner i.e. tax dues less tax relief was 'nil' - Declaration was rejected on the ground of ineligibility - Inasmuch as in the remarks column, it was mentioned that the application (declaration) is rejected as the investigation was still going on and the duty amount was pending for quantification.

Held: It is evident from the submissions made that the proprietor of the petitioner Mr. Govind Ramlu Palle in his statement before the investigating authority recorded on 11.01.2018 in connection with the enquiry proceedings conducted against the petitioner responded to question No.3 as to what was the outstanding service tax liability as on 30.06.2017 by stating that service tax liability of Rs.60 lakhs (approximately) was still outstanding for the period from 2015-2016 to June, 2017 - Referring to the said statement, Superintendent (Anti-Evasion, G-V), CGST and Central Excise, Navi Mumbai wrote to the proprietor of the petitioner on 24.01.2018 reminding him that he had admitted service tax liability of the petitioner at Rs.60 lakhs (approximately) and had promised to discharge Rs.15 lakhs by 15.01.2018 which he had not discharged -  From a conjoint reading of sub sections (1), (2) and (3) of section 127, the picture that emerges is that if the amount estimated by the Designated Committee is equal to the amount declared by the declarant, then the Designated Committee shall issue a statement in electronic form indicating the amount payable by the declarant - However, if the amount estimated by the Designated Committee is higher than the amount declared by the declarant, the Designated Committee shall give an opportunity of hearing to the declarant - In the Circular  1071/4/2019-CX dated 27.08.2019, CBIC has clarified  that in a case which is pending under investigation and audit and where the duty involved is quantified and communicated to the declarant or admitted by the declarant in a statement on or before 30.06.2019, the relief available would be 70% of the duty involved if it is Rs.50 lakhs or less and 50% if it is more than Rs.50 lakhs - Clause (g) of paragraph 10 makes it abundantly clear that cases under an enquiry, investigation or audit where the duty demand has been quantified on or before 30.06.2019 would be eligible under the scheme - The word "quantified" has been defined under the scheme [s.121(r) of Finance Act, 2019] as a written communication of the amount of duty payable under the indirect tax enactment - In such circumstances, Board clarified that such written communication would include a letter intimating duty demand or duty liability admitted by the person during enquiry, investigation or audit etc. - Proprietor of the petitioner in his statement recorded on 11.01.2018 by the investigating authority admitted the service tax liability of Rs.60 lakhs (approximately) to be outstanding for the period from 2015-2016 to June, 2017 and this was corroborated by the departmental authority in the letter dated 24.01.2018 - In a case where the amount estimated by the Designated Committee exceeds the amount declared by the declarant, then a hearing is given by the Designated Committee to the declarant before determining the amount to be paid by the declarant - In a situation where Designated Committee grants hearing to a declarant when the amount estimated by it exceeds the amount declared by the declarant, then it would be wholly inconceivable that before an application (declaration) is rejected on the ground of ineligibility, no hearing is granted to the declarant - As has been held by the Bench in Thought Blurb - 2020-TIOL-1813-HC-MUM-ST , the scheme is a beneficial one with the prime object of unloading the baggage of pending litigations centering around service tax and excise duty - The focus is to unload this baggage of pre-GST regime and thereby allowing business to move ahead but at the same time to also ensure that the administrative machinery can focus fully in the smooth implementation of GST - This is the broad picture which should be kept in mind while considering a declaration seeking amnesty under the scheme - Therefore, a liberal view embedded with the principles of natural justice is called for - The approach should be to ensure that the scheme is successful - Order dated 22.01.2020 is set aside and matter is remanded back to the Designated Committee to consider afresh the application (declaration) of the petitioner dated 12.12.2019 as a valid declaration and grant the consequential relief after giving due opportunity of hearing to the petitioner - entire exercise shall be carried out within a period of six weeks: High Court [para 17, 23, 26, 26.1, 26.3, 27, 30, 31, 32, 33]

- Petition allowed: BOMBAY HIGH COURT

TII

TP - Functional dissimilarity calls for exclusion of comparable for purposes of benchmarking: ITAT

TP - Under-utilization of capacity during starting year of business calls for no ALP adjustment: ITAT

TIOL CORPLAWS

Indian Penal Code - Mere delay in lodging complaint and dispute regarding number of vehicles purchased by complainant cannot by itself be ground to quash FIR: SC

IBC - Earlier correspondence between parties that shows there were disputes amounts to substantial evidence of pre-existing dispute: NCLAT 

SARFAESI Act - When remedy lies in specific legislation can HC interfere u/Art. 226 of Constitution of India: HC

RTI Act - Doubts/queries raised by Applicant fall within purview of information defined u/s 2(f) of RTI Act: FAA

SEBI Act - Despite being granted sufficient time when party fails to recoup funds such conduct violates settlement system: SAT