Category: High Court

Archive for the ‘High Court’ Category


M/s Indira Industries vs. PCIT (Madras High Court)

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DATE: June 14, 2018 (Date of pronouncement)
DATE: June 21, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 263 Revision (show-cause notice): A Writ Petition to challenge a s. 263 notice is maintainable if the authority issuing the show-cause notice lacks jurisdiction and if the notice is clearly barred by law. As per Alagendran Finance 162 Taxman 465 (SC), the two year limitation period stipulated u/s 263(2) runs from the date of the original assessment and not from the date of reassessment when the s. 263 notice deals with issues which are not subject matter of reassessment proceedings (MAK Data 358 ITR 593 (SC) & Malabar Industrial Co 243 ITR 83 (SC) distinguished)

When a notice under Section 263 raises new issues, which are not subject matter of the re-assessment proceedings, then the two year period contemplated under Sub-section (2) of Section 263 would begin to run from the date of assessment and not from the date of re-assessment. In other words, the ratio laid down in Alagendran Finance 162 Taxman 465 (SC), particularly as elucidated in Paragraph 15 of the Alagendran Finance case, is to the effect that the two year limitation period stipulated under Section 263(2) will run from the date of assessment only and not from the date of reassessment when the Section 263 notice does not deal with the same subject as in assessment and when it deals with other issues which are not subject matter of reassessment proceedings

PCIT vs. Texraj Realty P.Ltd (Gujarat High Court)

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DATE: June 12, 2018 (Date of pronouncement)
DATE: June 20, 2018 (Date of publication)
AY: 2011-12
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CITATION:
S. 68: Addition of undisclosed income cannot be made on the basis of (a) entries in dairy found during survey & (b) admission of director in s. 133A survey if assessee has filed a retraction and alleged that the entries/ statement were recorded under pressure. A s. 133A statement is merely information simplicitor and not evidence per se. Addition cannot be sustained if the Dept has not investigated the matter and find material to support the addition

The Tribunal in its detailed order noted that the directors during the course of survey, had retracted the statements by filing affidavits. They also claimed that the diaries were created under the pressure of the survey party. The Tribunal noted decision of the Supreme Court in case of Paul Mathews & Sons v Commissioner Of Income Tax reported in [2003] 263 ITR 101 (Ker) and of Supreme Court in case of The Commissioner Of Income Tax vs M/S.S.Khader Khan Son reported in (2012) 25 taxmann.com 413 (Supreme Court), in which, it was highlighted that the statement under section 133A of the Act was not on oath and would have at best a coroborative value

Pesak Ventures Ltd. vs. DCIT (ITAT Delhi)

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DATE: June 19, 2018 (Date of pronouncement)
DATE: June 20, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 159/ 163/ 176: While a notice/ order on a dead person/ wound-up company is a nullity, this is subject to the condition that the department is made aware of the death/ winding-up. If the legal representative, either voluntarily or in response to a notice issued against the deceased but served upon his agent, allows the assessment proceedings to continue against the deceased/ wound-up company without any objection and lets the AO make an assessment order, it would not be open for him to take a plea at the appellate stage, as a last resort or as an afterthought, that the proceedings taken and the assessment order made against the deceased/ wound-up company are nullity. In such cases, the assessment is liable to be set-aside for a fresh assessment in accordance with law instead of its annulment

In the instant case before us, we have observed that compliance of the assessment proceeding before the Assessing Officer has been made from time to time by the persons authorized in this behalf and proceedings have not been challenged due to lack of jurisdiction. According to the available records, the validity of the jurisdiction has been challenged for first time before the Ld. DRP. In view of the above circumstances, following the finding of the Hon’ble Gujarat High Court in the case of CIT Vs. Sumantbhai C Munshaw (1981) 128 ITR 142 the assessment order should not be nullified

Maharashtra State Road Transport Corporation vs. CST (Bombay High Court)

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DATE: November 13, 2017 (Date of pronouncement)
DATE: June 15, 2018 (Date of publication)
AY: -
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CITATION:
S. 254: While deciding an application for stay of demand, the Appellate Tribunal can only consider the prima facie case of merits. It cannot give a final finding on the merits and decide the appeal itself

The approach of the Appellate Tribunal is completely erroneous. What was heard before the Appellate Tribunal was the application for stay. There was no occasion for the Appellate Tribunal to go into the merits and decide the appeal itself by holding that it was devoid of any merits

Zuari Foods and Farms Pvt. Ltd vs. ACIT (Bombay High Court)

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DATE: March 13, 2018 (Date of pronouncement)
DATE: June 13, 2018 (Date of publication)
AY: 2011-12
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CITATION:
S. 147: Law on reopening of assessments within four years and beyond four years explained with reference to all important case laws. Strictures passed against the AO for making comments which are highly objectionable and bordering on contempt and for being oblivious to law. As the very same ACIT had passed series of orders reopening assessments in ignorance of legal position, a compilation of judgments on reassessment proceedings should be furnished to the Commissioner to study the same. The position of law regarding the writ remedy is so settled, that it is understood even by the law students

The above observations made by the Assistant Commissioner of Income-Tax are highly objectionable and are bordering on contempt. We however, give him the benefit of doubt of being oblivious to law. We had, in fact, in an earlier Writ Petition No. 1000 of 2017, after noticing that the very same Assistant Commissioner of Income Tax had passed series of order reopening assessments in ignorance of legal position, had requested the learned Standing Counsel to furnish the compilation of judgments of reassessment proceedings to the learned Commissioner to study the same. The position of law regarding the writ remedy is so settled, that it is understood even by the law students

CIT vs. Sudev Industries Limited (Delhi High Court)

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DATE: May 31, 2018 (Date of pronouncement)
DATE: June 13, 2018 (Date of publication)
AY: 1995-96
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CITATION:
S. 282/ 292B: Entire law on "service of notice" and difference between "issue" and "service" of notice explained. S. 147 proceedings are initiated when the notice is "issued". Though "service" of notice u/s 147/148 is not a mere procedural requirement, but a condition precedent for initiation of proceedings, the service upon a person who was not authorized to receive notice does not render the proceedings null and void if the assessee complied and entered appearance

A company being a juristic and a legal person, service cannot be in person on the Company, and has to be affected by sending the notice to the registered office or at the place of business. In the context of the present case, we would only observe that the object and purpose of service of notice was to inform and make the company aware that proceedings under Section 147/148 of the Act had been initiated. Initiation of proceedings under Section 147/148 of the Act was upon recording of reasons to believe and upon necessary approvals. Initiation to this extent was valid and not disputed and challenged.

CIT vs. L&T Finance Ltd (Bombay High Court)

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DATE: June 4, 2018 (Date of pronouncement)
DATE: June 11, 2018 (Date of publication)
AY: 1995-96, 1996-97, 1997-98
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CITATION:
S. 271(1)(c) Penalty: Merely using the words that there is concealment of income and / or furnishing inaccurate particulars of income is not sufficient. The same should be particularized by the AO with a finding as to what particulars of income has been concealed or what particulars of income are inaccurate. The words 'concealment' or giving 'inaccurate particulars of income' have to be read strictly before penalty provisions u/s 271(1)(c) of the Act can be invoked. Zoom Communication 371 ITR 570 (Del) distinguished

Mere using the words that there is concealment of income and / or furnishing inaccurate particulars of income would not in the absence of same being particularized, lead to imposition of penalty. It is only when the specified officer of the Revenue is satisfied that there has been concealment of particulars of income or furnishing inaccurate particulars of income that the occasion to explain the conduct in terms of Explanation I to Section 271(1)(c) of the Act would arise

Sunrise Academy of Medical Specialities (India) Private Limited v. ITO (Kerala High Court)

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DATE: May 22, 2018 (Date of pronouncement)
DATE: May 31, 2018 (Date of publication)
AY: 2015-16
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CITATION:
S. 143(2) Limited scrutiny: The CBDT Circulars which restrict the right of the AO in limited scrutiny cases apply only in cases where the AO seeks to do comprehensive scrutiny to find if there is potential escapement of income on other issues. However, if the s. 143(2) notice seeks information on whether the share premium is from disclosed sources and is correctly offered to tax, the AO can also inquire into whether the premium exceeds the FMV and is taxable u/s 56(2)(viib)

In a case of this nature, the assessee cannot be heard to contend that the assessing officer has exceeded its jurisdiction in the matter of passing the impugned order merely for the reason that the funds received by them in the form of share premium have been assessed as provided for under Section 56(2)(viib) of the Act. The circulars relied on by the petitioner have no application to the facts of this case and the same would apply only in cases where the assessing officer needs to take the case of the assessee for a comprehensive scrutiny on a finding that there is potential escapement of income on other issues

PCIT vs. Manzil Dineshkumar Shah (Gujarat High Court)

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DATE: May 7, 2018 (Date of pronouncement)
DATE: May 29, 2018 (Date of publication)
AY: 2009-10
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CITATION:
S. 147: Even a s. 143(1) assessment cannot be reopened without proper 'reason to believe'. If the reasons state that the information received from the VAT Dept that the assessee entered into bogus purchases "needed deep verification", it means the AO is reopening for doing a 'fishing or roving inquiry' without proper reason to believe, which is not permissible

It is equally well settled that the notice of reopening can be supported on the basis of reasons recorded by the Assessing Officer. He cannot supplement such reasons. The third principle of law which is equally well settled and which would apply in the present case is that reopening of the assessment would not be permitted for a fishing or a roving inquiry. This can as well be seen as part of the first requirement of the Assessing Officer having reason to believe that income chargeable to tax has escaped assessment. In other words, notice of reopening which is issued barely for making fishing inquiry, would not satisfy this requirement

PCIT vs. Nova Technocast Pvt Ltd (Gujarat High Court)

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DATE: April 9, 2018 (Date of pronouncement)
DATE: May 26, 2018 (Date of publication)
AY: -
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CITATION:
S. 9/ 40(a)(i)/ 195: Explanation 2 to s. 195(1) inserted by Finance Act 2012 with retrospective effect from 01.04.1962 has bearing while ascertaining payments made to non-residents is taxable under the Act or not. However, it does not change the fundamental principle that there is an obligation to deduct TDS only if the sum is chargeable to tax under the Act. If the conclusion is arrived that such payment does not entail tax liability of the payee under the Act, s. 195(1) does not apply

It is indisputably true that such explanation inserted with retrospective effect provides that obligation to comply with subsection [1] of Section 195 would extend to any person resident or non-resident, whether or not non-resident person has a residence or place of business or business connections in India or any other persons in any manner whatsoever in India. This expression which is added for removal of doubt is clear from the plain language thereof, may have a bearing while ascertaining whether certain payment made to a non-resident was taxable under the Act or not. However, once the conclusion is arrived that such payment did not entail tax liability of the payee under the Act, as held by the Supreme Court in the case of GE India Technology Centre P. Limited [Supra], sub-section [1] of Section 195 of the Act would not apply

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