Supreme Court and High Court Weekly Round Up

Top Stories Supreme Court and High Court Weekly Round Up By Aiswarya Krishnadas – On January 14, 2024 3:15 pm – 25 mins read This weekly round-up analytically summarizes the key tax judgments of the Supreme Court and all High Courts reported at Taxscan.in during the previous week from January 06 to January 12, 2024, the last week of 2024. Challenge on Condonation of 987 days Delay in filing Income Tax Appeal: Supreme Court issues Notice for Hearing COMMERCIAL TAX OFFICER & ORS. vs K V SAI RAM CITATION:   2024 TAXSCAN (SC) 131 The two-judge bench of Justice Abhay S Oka and Justice Ujjal Bhuyan issued notice returnable on 01.03.2024. Further held that In the meantime, there shall be a stay of the operation of the impugned order. The Supreme Court issued notice for hearing in a challenge on condonation of 987 days delay in filing Income Tax appeal. The challenge arose out of the impugned final judgment and order passed by the

High Court of Andhra Pradesh. Delhi HC directs to initiate GST Proceedings only after giving proper SCN containing complete details with respect to ITC RS WIRES INDUSTRIES vs SALES TAX OFFICER CITATION:   2024 TAXSCAN (HC) 149 In a recent case, the Delhi High Court directed the initiation of proceedings only after issuing a proper Show Cause Notice (SCN) containing complete details regarding Income Tax Credit (ITC). The writ petition was filed by RS Wires Industries against the show cause notice issued by the respondent under Section 29 of the Goods and Services Tax Act. The court observed that the show cause notice dated 18.04.2022, seeking cancellation of registration, provided the reasons for cancellation as “Wrongful availment or utilization of Input Tax Credit (details notice enclosed).”

However, the court noted that neither the show cause notice nor the order rejecting the revocation application contained any details or reasons regarding the alleged wrongful availment or utilization of input tax credit.  After analyzing the facts and arguments of both parties, a division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja allowed the writ petition and directed  respondent to initiate appropriate proceedings in accordance with law after giving a proper show cause notice containing complete details. Failure to Deduct TDS due to Lack of Awareness: Supreme Court Upholds Allahabad HC Order, Dismisses SLP NARENDRA DEV UNIVERSITY OF AGRICULTURE AND TECHNOLOGY vs COMMISSIONER, COMMERCIAL TAX, U.P. CITATION:   2024 TAXSCAN (SC) 127 The Supreme Court of India has upheld the judgment of the High Court of Judicature at Allahabad, Lucknow Bench, regarding the failure to deduct Tax

Deducted at Source (TDS). The dismissal of the SLPs by the Supreme Court emphasises the position that an awareness gap regarding TDS obligations does not constitute a valid ground for interference. It also clarified that a lack of awareness or understanding of tax deduction requirements is not a valid excuse for non-compliance. In conclusion, the two-judge bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan of the Supreme Court upheld the Allahabad High Court Order and dismissed the Special Leave Petitions filed by the petitioner Opportunity to contest Cancellation of GST registration with Retrospective Effect Not  Provided: Delhi HC  Directs To Cancel GST  Registration  from 08.02.2021 SHREE SHYAM METALS vs THE COMMISSIONER OF GOODS AND SERVICE TAX DELHI EAST & ANR. CITATION:   2024 TAXSCAN (HC) 150 In a recent case, the Delhi High Court, while directing the cancellation of Goods and Service Tax (GST) registration from 08.02.2021, observed that the revenue did not provide the petitioner with an opportunity to contest the cancellation with retrospective effect. After analyzing both parties’ facts and arguments, a division bench of Justice Vibhu Bakhru and Justice Anoop Kumar Mendiratta directed the effective date of cancellation to be 08.02.2021. The bench clarified that if the respondents seek retrospective cancellation before this date, a show cause notice must be issued, stating reasons and allowing the petitioner a fair opportunity to be heard.

Delhi HC quashes Reassessment Order passed  after lapse of Four Years without applying Independent Mind by AO AKUM DRUGS AND PHARMACEUTICALS LIMITED vs DEPUTY COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 151 In a significant case, the Delhi High Court quashed the reassessment order passed after the lapse of four years, emphasizing the Assessing Officer’s failure to apply an independent mind. The writ petition was filed by Akum Drugs And Pharmaceuticals Limited against the notice dated 02.08.2017 issued under Section 148 of the Income Tax Act for Assessment Year (AY) 2011-12. The court observed that the reassessment proceedings were triggered based on audit objections, highlighting the Assessing Officer’s failure to apply an independent mind. After analyzing both parties’ facts and arguments, a division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia concluded that the petitioner had genuinely disclosed all material facts. Delhi HC directs to allow cancellation of GST registration  on  date of application filed by petitioner

INDOTECH MAGNETICS vs COMMISSIONER OF DELHI GOODS AND SERVICE TAX & ANR CITATION:   2024 TAXSCAN (HC) 152 In a recent case, the Delhi High Court directed the cancellation of Goods and Service Tax (GST) registration on the date of the application filed by the petitioner. The petitioner, Indotech Magnetics, was registered with the GST authority effective from 16.07.2023. The petitioner claims to have conducted business under the name ‘M/s Indo Tech Magnetics.’ After analyzing both parties’ facts and arguments, a division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja directed the cancellation of the petitioner’s GST registration, effective from 29.05.2020—the date of the petitioner’s application seeking cancellation. Tax Exemption cannot be Denied to Government’s Helicopter Pilots Trainer on Non-Furnishing of GSTIN: Karnataka HC M/S HATSOFF HELICOPTER vs THE STATE OF KARNATAKA CITATION:   2024 TAXSCAN (HC) 153 In a recent decision the Karnataka High Court observed that tax exemption cannot be denied to government’s helicopter pilots trainer on non-furnishing of GSTIN. A Single Judge Bench comprising Justice BM Shyam Prasad observed that “This Court is of the considered opinion that, especially in the peculiarities of this case, the third respondent, to sustain the proposed demand, had to examine whether failure to furnish the details of the GSTIN, notwithstanding the other circumstances, could justify denial of exemption.”

Charge of Secured Creditor Precedes Over Charge on Dues of Sales Tax under SARFAESI Act: Gujarat HC MADHAVIBEN JITENDRABHAI RUPARELIYA vs STATE OF GUJARAT CITATION:   2024 TAXSCAN (HC) 154 The Gujarat High Court observed that the charge of secured creditor precedes over charge on dues of sales tax under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act). A Single Bench of Justice Nirzar S Desai observed that “The Banks issued Sale Certificate and, therefore, the present set of petitions are required to be decided on the basis of decisions cited by the petitioners wherein the bonafide purchaser had preferred petitions seeking direction to mutate their names in the revenue records or to quash the charge or to declare that the Secured Creditor will have first charge over the property as against State Government (Crowns Date) and, therefore, decision of the Hon’ble Supreme Court in the case of Kotak Mahindra Bank is in different context and, therefore, the same would not be applicable in the facts of the case.” Appeal on Disallowance u/s 40A(i) of Income Tax Act: Supreme Court refuses to Condone Delay in absence of Satisfactory

Explanation PRINCIPAL COMMISSIONER OF INCOME TAX vs M/S BOEING INDIA PVT. LTD CITATION:   2024 TAXSCAN (SC) 129 The Supreme Court dismissed the Special Leave Petition on the grounds of delay. The two-judge bench refused to condone the delay in the absence of a satisfactory explanation. Considering the SLP, Justice B V Nagarathna and Justice Augustine George Masih held that “There is a huge delay of 325 days in filing this Special Leave Petition. We are not satisfied with the explanation offered by the petitioner. Hence, the special leave petition is dismissed on the ground of delay.” Mandatory Allocation of “DIN” While Communicating Notice, Order, Summon: Supreme Court Stays HC Order till Final Adjudication THE COMMISSIONER OF INCOME TAX vs BRANDIX MAURITIUS HOLDINGS LTD CITATION:   2024 TAXSCAN (SC) 130 The Supreme Court stayed the High Court’s observation on Mandatory Allocation of “DIN” While Communicating Notice, Order, and Summon. The appeal arose out of the impugned final judgment and order passed by the High Court Of Delhi at New Delhi. The bench comprising Justice B V Nagarathna and Justice Augustine George Masih issued notice to the respondent. Mr. Vaibhav Niti, counsel, accepted the notice on behalf of the respondent. Delhi HC quashes Reassessment Order passed  after lapse of Four Years without applying Independent Mind by AO AKUM DRUGS AND PHARMACEUTICALS LIMITED vs DEPUTY

COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 151 In a significant case, the Delhi High Court quashed the reassessment order passed after the lapse of four years, emphasizing the Assessing Officer’s failure to apply an independent mind. The writ petition was filed by Akum Drugs And Pharmaceuticals Limited against the notice dated 02.08.2017 issued under Section 148 of the Income Tax Act for Assessment Year (AY) 2011-12. The court observed that the reassessment proceedings were triggered based on audit objections, highlighting the Assessing Officer’s failure to apply an independent mind. After analyzing both parties’ facts and arguments, a division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia concluded that the petitioner had genuinely disclosed all material facts. Kerala HC directs to Dispose Income Tax Appeal and Stay Application Expeditiously Within 4 Months Kerala HC directs to Dispose Income Tax Appeal and Stay Application Expeditiously Within 4 Months [Read Order] The Kerala High Court directed the Income Tax department to dispose Income Tax appeal and stay the application expeditiously within 4 Months. Considering the said prayer, the single judge bench of Justice

Dinesh Kumar Singh disposed of, with a direction to the 4th respondent to consider and dispose of the pending appeal and stay application expeditiously, preferably within four months. Hiring of Motor Vehicle or Cranes not Sale of Goods when Control is Retained by Contractor, VAT not Leviable: SC M/s. K.P. Mozika vs Oil and Natural Gas Corporation Ltd. & Ors CITATION:   2024 TAXSCAN (SC) 123 The Supreme Court of India in a significant ruling observed that the hiring of motor vehicle or cranes is not ‘Sale of Goods’ when control over the equipment is retained by the contractor and hence VAT is not leviable. A Two-Judge Bench comprising Justices Abhay S Oka and Justice Rajesh Bindal observed that “Accordingly, we allow all the appeals of the assessees by holding that the contracts are not covered by the relevant provisions of the Sales Tax Act and of the VAT Act, as the contracts do not provide for the transfer of the right to use the goods made available to the person who is allowed to use the same. Taxability of Capital Gains under India-Singapore DTAA: SC issues Notice to Blackstone Capital Partners Singapore ASSISTANT COMMISSIONER OF INCOME TAX vs BLACKSTONE CAPITAL PARTNERS VIFDI

THREE PTE. LTD. CITATION:   2024 TAXSCAN (SC) 124 The Supreme Court Bench of Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar has issued notice to Blackstone Capital Partners Singapore, in revenue appeal against the Delhi High Court decision that quashed proceedings and reassessment on capital gains, considering the India-Singapore Double Taxation Avoidance Agreement (DTAA). It was observed earlier by the Delhi High Court Division Bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora, the respondent-revenue cannot go behind the TRC issued by the other tax jurisdiction as the same is sufficient evidence to claim treaty eligibility, residence status, legal ownership and held that no income chargeable to tax has escaped assessment in the present case. No Sales Tax or VAT on Hiring of Motor Vehicles/Cranes by ONGC when Control rests with Contractor: Supreme Court M/s. K.P. Mozika vs Oil and Natural Gas

Corporation Ltd. & Ors CITATION:   2024 TAXSCAN (SC) 123 In a recent landmark decision, the Supreme Court clarified that the hiring of motor vehicles and cranes by ONGC from contractors is deemed a service, exempt from Sales Tax or Value Added Tax (VAT). The ruling emphasised that for a transaction to be considered the sale of goods, the transfer of the right to use must include both possession and control. The Two-Judge Supreme Court Bench of Justice Abhay S. Oka and Justice Rajesh Bindal, held that, “Essentially, the transfer of the right to use will involve not only possession, which may be granted at some stage (after execution of the contract), but also the control of the goods by the user. When the substantial control remains with the contractor and is not handed over to the user, there is no transfer of the right to use the vehicles, cranes, tankers, etc. Whenever there is no such control on the goods vested in the person to whom the supply is made, the transaction will be of rendering service within the meaning of Section 65(105)(zzzzj) of the Finance Act after the said provision came into force.” Norms Committee  have no power  to prohibit the production of any particular product by an EOU under the EOU Scheme:

Delhi HC sets aside Report of Norms Committee M/S MARBLE ART & ANR vs UNION OF INDIA & ORS CITATION:   2024 TAXSCAN (HC) 132 The Delhi High Court set aside the report of the Norms Committee as they have no power to prohibit the production of any particular product by an Export Oriented Unit (‘EOU’) under the EOU Scheme. A single judge bench of Justice Navin Chawla observed that the Norms Committee refused to determine the Wastage Norms on the ground that the products sought to be manufactured by the petitioner would result in a high quantity of waste of raw materials.  The Norms Committee further opined that such activities would not be commercially viable and, in any case, should not be allowed in the EU.  Employee cannot be penalized when employer failed to perform his duty to deposit  TDS  with  revenue: Delhi HC HARSHDIP SINGH DHILLON vs UNION OF INDIA CITATION:   2024 TAXSCAN (HC) 148 In a significant case, the Delhi High Court, while allowing the petition, held that the employee could not be penalized when the employer failed to perform his duty to deposit Tax Deduction at Source. After analyzing the facts and arguments, a division bench of Justice Girish Kathpalia and Justice Rajiv Shakdher held that since the petitioner accepted salary after deduction of income tax at source, it is his employer who is liable to deposit the same with the revenue authorities. On this count, the petitioner cannot be burdened. Therefore, the bench allowed the writ petition. Penalty cannot be Imposed if there is no Intention to Evade Tax for Typographical Errors in E-Way Bill: Allahabad HC M/S.

HINDUSTAN HERBAL COSMETICS vs STATE OF U.P. AND 2 OTHERS CITATION:   2024 TAXSCAN (HC) 143 The Allahabad High Court observed that the penalty cannot be imposed if there is no intention to evade tax for typographical errors in E-Way Bill. A Single Bench of Justice Shekhar B. Saraf observed that “In the present case, instead of ‘5332’, ‘3552’ was incorrectly entered into the e-way bill which clearly appears to be a typographical error. In certain cases where lapses by the dealers are major, it may be deemed that there is an intention to evade tax but not so in every case. Typically when the error is a minor error of the nature found in this particular case, I am of the view that imposition of penalty under Section 129 of the Act is without jurisdiction and illegal in law.” GST ITC Refund cannot be Rejected Merely on Non-Supply of Authenticated Document: Delhi HC PROPRIETOR MR. ASHWANI MITTAL vs THE COMMISSIONER OF CENTRAL

GOODS AND SERVICES TAX AND ANR CITATION:   2024 TAXSCAN (HC) 137 The Delhi High Court in a recent decision observed that the GST input tax credit (ITC) refund cannot be rejected merely on non-supply of authenticated document. A Division Bench comprising Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “In our view, the appellate authority appears to have misconstrued the submission of the petitioner. Case of the petitioner is that petitioner had uploaded documents, however, the system did not register the documents which were uploaded from the end of the petitioner. The appellate authority records that petitioner had not submitted any documents which were submitted alongwith the reply.” Rajasthan HC quashes Time Barred Issuance of Income Tax SCN and Proceedings u/s 148A(b) Bijendra Singh Son Of Shri Nandram vs Income Tax Officer CITATION:   2024 TAXSCAN (HC) 141 The Rajasthan High Court set aside the order passed against the appellant on the charge that the income chargeable to tax for the assessment year 2015-16 has escaped assessment under the purview of Section 147 of the Income Tax Act, 1961. The two-member bench of the Rajasthan High Court, comprising Ashutosh Kumar and Arun Bhansali, observed that “the authority, while passing the order under Section 148A(d) of the Act of 1961, in a wholly mechanical manner rejected the plea and proceeded to issue notice under Section 148 of the Act of 1961. Thereafter, proceedings were sought to be converted into a notice under Section 69A read with Section 115 BBE of Income Tax Act of 1961, which action also is wholly impermissible.

Once the notice under Section 148A of the Act of 1961 is found to be barred by limitation, no further proceedings could be initiated under any of the provisions of the Income Tax Act, 1961, and the purported exercise of jurisdiction pursuant to the notice under Section 148A of the Income Tax Act, 1961 could not be initiated or proceeded with.” The bench rejected the revenue’s claims and set aside the order against the appellant. The court granted the writ petition filed by the petitioner. Notice u/s 274 of Income Tax Act should be issued before period of limitation: Delhi HC PR. COMMISSIONER OF INCOME TAX -7 vs THAPAR HOMES LTD CITATION:   2024 TAXSCAN (HC) 142 In a recent decision the Delhi High Court observed that the notice under Section 274 of the Income Tax Act, 1961 should be issued before the period of limitation. A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “Therefore, in our opinion the impugned order requires no interference. Given the aforesaid position, the appeal is closed as no substantial question of law arises for consideration.” GST Registration can be Cancelled with Retrospective Effect only where such Consequences are Intended and Warranted: Delhi HC SHARDA METAL WORKS THROUGH ITS PROPRIETOR MR.DILIP KUMAR vs THE COMMISSIONER CENTRAL GOODS AND SERVICES TAX CITATION:   2024 TAXSCAN (HC) 144 The Delhi High Court in a significant ruling observed that the GST registration can be cancelled with retrospective effect only where such consequences are intended and warranted. A Division Bench comprising observed that

“Although, we do not consider it apposite to examine this aspect but assuming that the respondent’s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted.” Imposition of Excise Duty on Incineration of Lean Gas used in Generation of Electricity: Calcutta HC Quashes Ex Parte Order M/s Himadri Speciality Chemical & Anr. Vs The Commissioner of Central Excise CITATION:   2024 TAXSCAN (HC) 146 The Calcutta High Court quashed an exparte order passed in the matter concerning the imposition of excise duty on incineration of Lean Gas used in the generation of electricity. A Single Bench of Justice Md Nizamuddin observed that “Tt appears from record that several opportunities were given to the petitioner to file objection/reply to the impugned show cause notice and for hearing before passing the impugned adjudication order, but since it is the case of the petitioner that it had immediately filed this writ petition against the impugned show cause after receipt of same, petitioner thought it proper to not to give any reply to the same or to participate in the impugned proceeding and all the legal and factual points in challenging the impugned show cause and adjudication order it has taken in this writ petition, supplementary affidavit, and in course of hearing of the same against the impugned show cause notice and order-in-original could not be taken before the adjudicating authority, I am inclined to set aside the aforesaid impugned ex parte adjudication.” Investment in Shares of Indian Subsidiary ‘Capital

Account Transaction’ is not Income: Delhi HC A Division Bench of the Delhi High Court ruled that the investment in the shares of an Indian subsidiary ‘Capital Account Transaction’ is not income. The Court of Acting Chief Justice Manmohan and Justice Mini Pushkarna observed that “It is settled law that investment in shares in an Indian subsidiary cannot be treated as ‘income’ as the same is in the nature of “capital account transaction” not giving rise to any income. In Nestle SA Versus Assistant Commissioner of Income Tax, this Court held that the allegation of the Revenue that the investment in the shares of Indian subsidiary amounted to ‘income’ is flawed.” No Interference by Writ Court for notice u/s 73 of UPGST Act unless there is Inherent Lack of Jurisdiction or Complete Absence of Relevant Material: Allahabad HC M/S Mgs Palace vs State Of U.P. And 4 Others CITATION:   2024 TAXSCAN (HC) 138 In a significant ruling the Allahabad High Court observed that there cannot be any interference by the Writ Court for notice under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 (UPGST Act) unless there is inherent lack of jurisdiction or complete absence of relevant material. A Division Bench comprising Justices Manjive Shukla and S.D. Singh observed that “The satisfaction required to be recorded in terms of Section 61(3) of the Act is primarily subjective. Unless inherent lack of jurisdiction or complete absence of relevant material is alleged and established, no interference may be warranted in exercise of extraordinary jurisdiction of this court under Article 226 of the Constitution of India. Rs.19,000 Crores Cognizant Tax Case: Supreme Court Directs Madras HC to Dispose Appeal within 6 Weeks M/S COGNIZANT TECHNOLOGY SOLUTIONS

INDIA PVT vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (SC) 122 In the matter involving Cognizant Technology, the Supreme Court has instructed the Madras High Court to consider the appeal and dispose of it preferably within a span of 6 weeks, starting from the judgment date of January 8, 2024. Also, directed the company to pay an amount of Rs. 2,956 Crores to the government. The bench consisting of Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar expressed their reluctance to intervene in the High Court’s order but proposed certain modifications. Final Hearing on GST on Online Money Gaming Soon: Supreme Court Issues Notice in E-Gaming Federation Writ Petition M/S E-GAMING FEDERATION & ANR. vs UNION OF INDIA & ORS. CITATION:   2024 TAXSCAN (SC) 121 In a significant development, the Supreme Court of India heard the Writ Petition, presented by M/s E-Gaming Federation & Anr. against the Union of India & Ors. and issued notice to the Central Government to address the imposition of 28% GST on online money gaming, horse racings and casinos Notably, to streamline the proceedings, Ms. Charanya Lakshmikumaran and Mr. Chandrashekhar were designated as nodal counsel. They are tasked with compiling submissions, pleadings, documents, and precedents in electronic form, aligning with the Circular dated August 22, 2023, regulating submissions in larger Bench cases. The case is currently set to be listed before the Supreme Court Division bench of Chief Justice Dhananjaya Yeshwant Chandrachud, Justice J B Pardiwala and Justice

Manoj Misra on April 2, 2024. Deduction u/s 80IA(4) of Income Tax Act available to Company engaged in Developing Infrastructure Projects like Roads, Canals: Gujarat HC THE PRINCIPAL COMMISSIONER OF INCOME TAX vs MONTECARLO CONSTRUCTION LTD CITATION:   2024 TAXSCAN (HC) 139 In a significant ruling the Gujarat High Court observed that the deduction under Section 80IA(4) of the Income Tax Act, 1961 is available to a company engaged in developing infrastructure projects like roads, canals. A Division Bench comprising Justices Bhargav D Karia and Niral R Mehta observed that “Interim payment to the tune of estimated contract value in respect of the development work done for each month after retention and other adjustments were to be made, security deposit was to be paid by the assessee, there was a penalty for delay, procurement of the material was the responsibility of the assessee, procurement of land for camp, for shop, labour camp etc. also the employment of qualified engineers, action and compensation in respect of bad work, defect liability of the accidents to persons in relation to Workman Compensation Act, indemnity insurance of the workmen employed.” Setback to Amway: Delhi HC rules Coconut Oil Sold as Hair Oil, not classifiable as Edible Oil under DVAT Act AMWAY INDIA ENTERPRISES PRIVATE LIMITED vs

COMMISSIONER, VAT, DELHI & ORS CITATION:   2024 TAXSCAN (HC) 145 In a major setback to Amway India Enterprises Private Limited, the Delhi High Court ruled that the coconut oil sold as hair oil, not classifiable as edible oil under the Delhi Value Added Tax Act, 2004 (DVAT Act). A Division Bench comprising Justices Amit Mahajan and Vibhu Bakhru observed that “Thus, in view of the admitted fact that the coconut oil is sold by the appellant in small packs; is displayed in the category of hair care; the manner in which it is to applied on hair; and the purpose for which it is purchased by the consumer leaves no manner of doubt that the coconut oil sold by the appellant is wrongly sought to be classified under Entry 25 of the Third Schedule of the DVAT Act.” Madras HC quashes Non-Speaking Order of NFAC in Appeal against Addition u/s 115BE, remands matter Sohan Raj Khanted Guvanthraj vs Commissioner of Income Tax (Appeals) CITATION:   2024 TAXSCAN (HC) 140 A single judge of the Madras High Court set aside an order against an assessee. The Court questioned the application of mind of the Assessing Officer in fixing the liability of the Asseessee. Senthil Kumar Ramamoorthy, in a single judge judgment of the court observed that the appellate authority has drawn the conclusion that the inferences and findings of the assessing officer are acceptable. The court observed that  there is nothing to indicate that the appellate authority independently applied its mind and observed that the conclusions are in the nature of ipse dixit and no supporting reasons are discernible.  The Court set aside the impugned order Delay of More than 4 years: SC dismisses SLP filed by Income Tax Dept CIT (INTERNATIONAL TAX) vs BHARTI AIRTEL LIMITED CITATION:

2024 TAXSCAN (SC) 120 The Supreme Court dismissed the special leave petition (SLP) filed by the Income Tax Department as there was delay of more than 4 years A Two-Judge Bench comprising Justice Sanjiv Khanna and Justice Dipankar Datta observed that “Delay condoned. In view of the huge delay of more than four years, which the High Court has refused to condone, we are not inclined to issue notice in the present special leave petition and hence, the same is dismissed.” Payment of Interest u/s 55 of JVAT Act: SC directs to Pay Interest at 6% on Refund Amount THE STATE OF JHARKHAND & ORS vs M/S KIRLOSKAR BROTHERS LIMITED CITATION:   2024 TAXSCAN (SC) 119 The Supreme Court of India directed to pay the interest at 6% on refund amount in the matter regarding payment of interest under Section 55 of the Jharkhand Value Added Tax Act, 2005 (JVAT Act). A Two-Judge Bench comprising Justice BV Nagarathna and Justice Augustine George Masih observed that “We find that there has been a continuing lapse on the part of the petitioners herein. In the circumstances, we find that the interest of justice would be sub-served, if interest @ 6% on the refund amount is directed to be paid w.e.f. 26.04.2023 till the date of realisation in the instant case. It is needless to observe that the aforesaid refund amount with interest shall be paid within a period of four weeks from today without seeking any extension of time either before this Court or before the High Court.” Delay of 781 days in filing Appeal against Assessment Order due to Covid Pandemic: SC stays Order of AP HC COMMERCIAL TAX OFFICER & ORS vs B PADMAVATHI CITATION:   2024 TAXSCAN (SC) 118 The Supreme Court stayed the application of the order passed by the Andhra Pradesh High Court in the matter regarding the Delay of 781 days in filing appeal against Assessment order due to Covid pandemic. A

Division Bench of the High Court noted that “This writ petition is allowed and the impugned order dated 09.08.2023 passed by the 4th respondent is set aside and the delay in filing the appeal is condoned on condition of petitioner depositing Rs.5,000/- with the High Court Legal Services Committee and also make a deposit of 75% of the disputed tax less the amount if any already deposited by him, within two (2) weeks from the date of receipt of copy of this order, upon which, the 4th respondent shall admit the appeal and dispose of the same in accordance with governing law and rules expeditiously.” CAT-5/CAT-6 Cables falls in Category of “Computer System and Peripherals”: SC dismisses SLP filed by Commercial Tax Officer COMMERCIAL TAX OFFICER vs RASHI PERIPHERALS PVT. LTD. CITATION:   2024 TAXSCAN (SC) 117 In a recent decision the Supreme Court of India ruled that CAT-5/CAT-6 cables falls in Category of “Computer System and peripherals” and thereby dismissed the Special Leave Petition (SLP) filed by the Commercial Tax Officer A Two-Judge Bench comprising Justice Abhay S Oka and Justice Ujjal Bhuyan observed that “Having heard the senior counsel for the petitioner, we concur with the view taken by the High Court that CAT-5/CAT-6 cables will fall in the Category of “Computer System and peripherals” which is specified in the

Entry No. 3 right from its inception. Hence, no case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India.” Delhi HC quashes Order Cancelling GST Registration with Retrospective Effect MS RS WIRES INDUSTRIES THROUGH PROPRIETOR RAJENDER SINGH vs SALES TAX OFFICER CLASS II AVATO WARD 63 ZONE CITATION:   2024 TAXSCAN (HC) 133 The Delhi High  Court quashed the order cancelling Goods and Service Tax (GST) registration with retrospective effect. It was noted that a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. A division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and warranted. The Court quashed the show cause notice and the impugned orders being bereft of requisite details and reasons.  The petition is allowed. Fresh Assessment Order under Income Tax Act passed without Revising Penalty Proceeding: Kerala HC directs to Revise Penalty P.M.ABDUL NAZEER vs THE ASSISTANT COMMISSIONER OF INCOME

TAX CITATION:   2024 TAXSCAN (HC) 135 The Kerala High Court directed to revise the penalty imposed under the Income Tax Act, 1961 as a fresh assessment order was passed without revising the penalty proceedings. The Income Tax Appellate Tribunal had modified the assessment orders and remanded the matter to the assessing officer vide order for passing a fresh assessment order. A single judge bench of Justice Dinesh Kumar Singh disposed of the present writ petition with a direction to the respondent to revise the penalty orders in light of the fresh/revised assessment orders passed regarding the assessment year 2008-09 to 2014-15 on remand. It was held that the petitioner should be afforded an opportunity of hearing as provided under Section 75(1)A before revising the penalty orders. NCLAT cannot Direct NCLT to Admit Petition u/7 of IBC without Evaluating Rival Contentions on Merits: SC Maneesh Pharmaceuticals Ltd vs Export Import Bank of India and Ors CITATION:   2024 TAXSCAN (SC) 116 In a recent decision the Supreme Court of India ruled that the National Company Law Appellate Tribunal (NCLAT) cannot direct the National Company Law Tribunal (NCLT) to admit petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) without evaluating the rival contentions on merits. A Three Judge Bench comprising Chief

Justice Dr Dhananjaya Y Chandrachud, Justice J B Pardiwala and Justice Manoj Misra observed that “The order of the NCLAT, properly construed, dealt with the issue as to whether the debt was barred by limitation. A passing reference in the order of the NCLAT to whether the debt was in dispute must be read in the context of the nature of the appeal which arose from an order of the NCLT that the debt was barred by limitation. Hence, it would be inappropriate to read the order of the NCLAT as concluding the issue in regard to whether the application under Section 7 was or was not liable to be admitted. A stray observation in the order of the NCLAT cannot be regarded as a conclusive determination on merits.” Statutory Set Off or Insolvency Set Off not applicable to CIRP under IBC: SC BHARTI AIRTEL LIMITED AND

ANOTHER vs VIJAYKUMAR V. IYER AND OTHERS CITATION:   2024 TAXSCAN (SC) 115 The Supreme Court in a recent decision has held that the statutory set off or insolvency set off is not applicable to Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). A Two-Judge Bench comprising Justice Sanjiv Khanna and SVN Bhatti observed that “The bank guarantees were returned and accordingly Airtel entities became liable to pay the balance amount in terms of the letters of understanding. The amounts have become payable post the commencement of the Corporate Insolvency Resolution Process. For the same reason, we will also reject the argument that by not allowing set-off, new rights are being created and, therefore, Section 14 of the IBC will not be operative and applicable.” BCI Gains No Benefit from Delaying in Filing Form 10: Delhi HC Orders Income Tax Commissioner to Accept Form 10 after Condoning Delay BAR COUNCIL OF INDIA vs COMMISSIONER OF INCOME TAX (EXEMPTION) CITATION:   2024 TAXSCAN (HC) 136 In a significant ruling, the Delhi High Court has quashed the order issued by the Commissioner of Income Tax (Exemption) and directed the authorities to accept Form No. 10 submitted by the Bar Council of India (BCI) after condoning the delay. The bench stated that ‘We are unable to decipher from the impugned order as to what those “reasons to believe” were which led the respondent to arrive at a conclusion that the petitioner had no intention to file Form 10 within the due date. Mere failure to claim accumulation cannot be read as “reasons to believe” that the petitioner did not intend to file Form 10.’ Completed Assessment can be Reopened only if Incriminating Material is found during Search u/s 132 of Income Tax Act: Delhi HC SHYAM SUNDER JINDAL vs ASSISTANT COMMISSIONER OF INCOME TAX

CITATION:   2024 TAXSCAN (HC) 131 In a recent decision, the Delhi High Court ruled that the completed assessment can be reopened only if incriminating material is found during search under Section 132 of the Income Tax Act, 1961. A Division Bench comprising observed that “The absence of incriminating material has persuaded us to take this view. As indicated hereinabove, no incriminating material, even according to the respondent/revenue, was found during the search. Furthermore, the material on which the respondent/revenue relied on was not of a quality that would persuade us to hold that the stand taken by the appellant/assessee, which is, that he did not maintain an account with the Geneva branch of HSBC Bank, was incorrect.” Supreme Court to hear challenges against Retrospective Imposition of 28% GST on Online Gaming Companies The Supreme Court has issued notices in response to pleas filed by online gaming companies Head

Digital Works and Games 24/7 challenging the government’s decision to retrospectively imposing 28% Goods and Services Tax (GST) on the total value of bets placed, rather than on the gross gaming revenue. The top court has agreed to hear all the cases pertaining to the taxation of all the online gaming companies together. In the 50th GST Council meeting held on July 11, 2023, the GST Council recommended levying 28% GST on the full face value on Online Gaming, Casinos & Horse racing, irrespective of whether these activities are considered games of skill or games of chance. This led to an outrage in the gaming industry. Resultantly, the GST Council vide its 51st meeting,  stated that the decision will be enforced from Oct. 1, 2023, and will be reviewed after six months of its implementation. Gujarat HC Quashes Assessment order for Violation of Section 144B of Income Tax Act DHVANIL HEMENDRA RESHAMWALA vs INCOME TAX OFFICER CITATION:   2024 TAXSCAN (HC) 130 The Gujarat High Court quashed an assessment order for violation of section 144B of the Income Tax Act, 1961. The division bench of Justice Biren Vyshnav and Justice Nisha M.Thakore observed that the specific circumstances of this case, the contested final assessment order dated 30.03.2022, issued by the respondent authorities, was deemed non-existent. Bonafide Delay in filing ITR:

Himachal Pradesh HC allows deduction u/s 80IB(10) of Income Tax Act to H.P. Housing & Urban Development Authority Pr. Commissioner of Income Tax, Shimla vs M/s H.P. Housing & Urban Development Authority CITATION:   2024 TAXSCAN (HC) 129 The Himachal Pradesh High Court allowed deduction under Section 80IB(10) of the Income Tax Act, 1961 to H.P. Housing & Urban Development Authority as there was bonafide delay in filing income tax returns (ITR). A Division Bench comprising Chief Justice M.S. Ramachandra Rao and Justice Jyotsna Rewal Dua observed that “In the instant case, the assessee is a statutory organization created by the State for providing & develop housing infrastructure. It took up a defence of late audit for belated filing of its return of income. The veracity of ground so put forth for late filing of return has not been disputed by the appellant. The assessee deals with public money, the State exchequer. The Commissioner of Income Tax and the Income Tax Appellate Tribunal have concurrently held on facts after undertaking a lengthy & pain staking exercise that the assessee was actually entitled to deductions under Section 80IB(10) of the Income Tax Act.” Relief to Mitsubishi Electric India: SC dismisses Appeal filed by Customs Dept THE COMMISSIONER OF CUSTOMS CHENNAI II vs M/S MITSUBISHI ELECTRIC INDIA PVT. LTD CITATION:   2024 TAXSCAN (SC) 112 In a major relief to Mitsubishi Electric India, the Supreme Court dismissed the appeal filed by the Customs Department. A Two-Judge Bench of Justice Abhay S Oka and Justice Ujjal Bhuyan observed that “Delay in filing the civil appeal is condoned. Considering the quantum of tax effect, we decline to entertain this appeal and the same is dismissed. However, the question of law is left open to be decided in appropriate case.” Disallowance of Claim of Loss on Revaluation of Securities: SC Condones Delay in SLP filed by Income Tax Dept against Syndicate Bank THE COMMISSIONER OF INCOME TAX & ANR vs SYNDICATE BANK CITATION:   2024

TAXSCAN (SC) 113 The Supreme Court condoned delay in the special leave petition filed by the Income Tax Department in the challenge regarding the disallowance of claim of loss on revaluation of securities. A Two-Judge Bench of Justice Abhay S Oka and Justice Ujjal Bhuyan observed that “Delay condoned. Issue notice. To be heard along with SLP(Civil)No.13668 of 2020 and other connected matters.” Relief to Canara Bank: SC dismisses SLP filed by Income Tax Dept with Delay of 261 days THE COMMISSIONER OF INCOME TAX LTU & ANR vs CANARA BANK CITATION:   2024 TAXSCAN (SC) 111 In a relief to Canara Bank, the Supreme Court dismissed a special leave petition (SLP) filed by the Income Tax Department with a delay of 261 days. A Two-Member Bench comprising Justice BV Nagarathna and Justice Augustine George Masih observed that “There is gross delay of more than 261 days in filing this special leave petition. The SLP (C) Dy. No. 48323/2023 arising from the same common order has also been dismissed on the ground of delay. Following the same, this special leave petition also stands dismissed on the ground of delay keeping open the questions of law, if any, which arises in the matter Forward Contracts not by way of Trading in Foreign Exchange Derivatives: SC dismisses SLP filed by Income Tax Dept THE PR. COMMISSIONER OF INCOME

TAX-3 vs EMMSONS INTERNATIONAL LTD CITATION:   2024 TAXSCAN (SC) 110 The Supreme Court dismissed a special leave petition (SLP) filed by the Income Tax Department, challenging the order of the Delhi High Court regarding forward contracts not by way of trading in foreign exchange derivatives. A Two-Judge Bench of Justice Abhay S Oka and Justice Ujjal Bhuyan observed that “Delay condoned. No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is, accordingly, dismissed.” Addition of Capital Gains by Scrutiny Assessment u/s 143(3) r.w.s 147 of IT Act: SC Condones Delay in SLP filed by Income Tax Dept ASSISTANT COMMISSIONER OF INCOME TAX & ORS vs NOSHIR DARABSHAW TALATI CITATION:   2024 TAXSCAN (SC) 109 The Supreme Court condones delay in the special leave petition (SLP) filed by the Income Tax Department while allowing the exemption from filing certified copy of judgment. A Two-Member Bench comprising Justice Abhay S Oka and Justice Ujjal Bhuyan observed that “Delay condoned. Application (IA No.264425/2023) for exemption from filing certified copy of the impugned judgment is allowed. Leave granted.” To Read the full text of the Order CLICK HERE Challenge on Constitutional Validity of Circular imposing Central Tax on

Intra-State Supply of Services: SC directs to Approach HC ZONASHA ESTATES AND PROJECTS vs UNION OF INDIA & ORS CITATION:   2024 TAXSCAN (SC) 108 The Supreme Court directed the petitioner, Zonasha Estates and Projects, to approach the High Court by invoking the writ jurisdiction in the matter regarding challenge on the constitutional validity of the Circular imposing central tax on intra-State supply of services. A Two-Judge Bench comprising Justice BV Nagarathna and Justice Augustine George Masih observed that “We are not inclined to entertain this Writ Petition filed under Article 32 of the Constitution of India. Hence, the same is dismissed reserving liberty to the petitioner herein to file a Writ Petition under Article 226 of the Constitution of India before the High Court, if so advised.” To Read the full text of the Order CLICK HERE Benefits of Amnesty Scheme can be avail even after Appeal under GST is Rejected on Limitation: Madras HC M/s. Cholaa Tapes vs The Additional Commissioner (Appeals) CITATION:   2024 TAXSCAN (HC) 128 The Madras High Court has held that the benefit of the amnesty scheme can be avail even after an appeal under Goods and Service Tax (GST) is rejected on limitation. A Single bench of Justice Krishnan Ramasamy observed that in the event, that any appeal is rejected by the respondent on the aspect of limitation, still the assessees are entitled to availing Amnesty Scheme.  Therefore, the petitioner is directed to avail of the Amnesty Scheme, in which case, the respondent shall consider the same and pass orders by the scheme and law. Order demanding GST passed under Misconceptions that imported goods as Timber instead of Bone Meal: Madras HC quashes GST Order Jose Bone Products vs The Assistant Commissioner

CITATION:   2024 TAXSCAN (HC) 127 The Madras High Court has quashed the order demanding Goods and Service Tax (GST) Order which was passed under misconceptions that imported goods as timber instead of bone meal. The court directed to grant time to the petitioner to file a reply and pass appropriate orders after providing the opportunity of a personal hearing. It was a settled law that any order had to be passed only after providing an opportunity for a personal hearing. A single bench of Justice Krishnan Ramasamy the petitioner had passed the impugned order under the misconception that the petitioner had imported timber, which is contrary to the business of the petitioner. Confiscation of Digital Multifunction Equipment due to Non-payment of Enhanced Customs Duty: Madras HC directs to Release Goods on payment of Duty M/s.Atul Commodities Private Limited vs The Commission of Customs CITATION:   2024 TAXSCAN (HC) 126 The Madras High Court directed the Commissioner of Customs to release the confiscated Digital Multifunction Equipment due to Non-payment of Enhanced Customs Duty. The court held that the goods can be released on payment of customs duty. A single bench of Justice Krishnan Ramasamy directed the respondents to consider the plea of the petitioners to release the goods by way of provisional release on the condition that, the petitioner shall pay/deposit the enhanced duty amount. On receipt of such enhanced duty amount paid by the petitioners, the goods in question shall be released within three (3) weeks.

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