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DATE: June 7, 2018 (Date of pronouncement)
DATE: August 29, 2018 (Date of publication)
AY: 2010-11
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CITATION:
S. 159/ 292B: There is no obligation on the part of the legal representatives of a deceased assessee to intimate the death of the assessee or take steps to cancel the PAN registration. A notice issued in the name of a dead person is unenforceable in law. The fact that the Revenue had no knowledge about the death of the assessee does not change the law. The defect is fatal and is not curable u/s 292B. The legal representatives are liable u/s 159 only if proceedings have already been initiated when the assessee was alive and are continued against the legal heirs

Nothing has been placed before this Court by the Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased assessee to immediately intimate the death of the assessee or take steps to cancel the PAN registration.

18. In such circumstances, the question would be as to whether Section 159 of the Act would get attracted. The answer to this question would be in the negative, as the proceedings under Section 159 of the Act can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs

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DATE: August 24, 2018 (Date of pronouncement)
DATE: August 29, 2018 (Date of publication)
AY: 2007-08, 2008-09
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CITATION:
Arrest for recovery of arrears: It is a question of confinement of a person in jail due to non-payment of tax dues. Since the recovery of outstanding dues has been stayed except deposit of specified amount, the TRO is ordered to arrange for release of the assessee immediately on deposit of said amount. Income Tax Authorities are directed to promptly do the necessary formalities including issue of release warrant to the Jail officials on compliance of the directions of the Tribunal

The sole motive of the Department for aforesaid action of putting the assessee in jail is to recover outstanding tax dues which are otherwise impugned before us, however, the Department has failed to recover any amount from the assessee despite putting the assessee behind the bars for 12 days as on today. Whereas by our above directions not only the Department will get recovery of Rs. 20 lacs out of the outstanding dues against the assessee but also the interest of justice will be served so far as the grievance of the assessee is concerned

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DATE: August 28, 2018 (Date of pronouncement)
DATE: August 29, 2018 (Date of publication)
AY: 2008-09
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CITATION:
S. 276B, 279(1), 278E Prosecution for non-deposit of TDS: In the case of default, Mens rea has to be presumed to exist. It is for the accused to prove the contrary and that too beyond reasonable doubt. The plea that default in payment of TDS occurred due to delay by department in refunding excess TDS due to the assessee is not acceptable because amount deducted by way of TDS has to be deposited within prescribed time irrespective of any counter claim of the assessee

The plea of accused that since the complainant department has delayed the refund of TDS, therefore, the default occurred is not maintainable as the amount deducted by way of TDS is to be deposited within prescribed time irrespective of any counter claim of the assessee. CW-1 has stated that the refund takes about six months for processing and accused cannot take benefit of delay in release of the refund amount. Another plea of recession in the hospitality section is also not maintainable as discussed above

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DATE: August 16, 2018 (Date of pronouncement)
DATE: August 28, 2018 (Date of publication)
AY: 2004-05
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CITATION:
S. 147/ 148: The revenue played a subterfuge in trying to cover up its omission and in ante dating the record. The court hereby directs the Chief Commissioner to cause an inquiry to be conducted as to the involvement of the officials or employee in the manipulation of the record, and take strict disciplinary action, according to the concerned rules and regulations. This inquiry should be in regard to the conduct of the concerned AO posted at the time, who issued the notice under Section 147/148 as well as the officers who filed the affidavits in these proceedings

It goes without saying that whilst the “reasons” shown to the court and the petitioner may ipso facto not be faulted, yet the file tells a different story; they were not recorded before the impugned notice was issued. In fact, the revenue played a subterfuge, in trying to cover up its omission, and in ante dating the record, in the attempt to establish that such reasons existed, and this court’s interference was not called for. In these circumstances, this court hereby directs the Chief Commissioner concerned to cause an inquiry to be conducted as to the involvement of the officials or employee in the manipulation of the record in this case, and take strict disciplinary action, according to the concerned rules and regulations. This inquiry should be in regard to the conduct of the concerned AO posted at the time, who issued the notice under Section 147/148 as well as the officers who filed the affidavits in these proceedings. The investigation and consequential action shall be completed within four months

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DATE: July 12, 2018 (Date of pronouncement)
DATE: August 28, 2018 (Date of publication)
AY: 2007-08
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CITATION:
S. 254(2) Time limit for filing MA: Though the Tribunal has no power u/s 254(2) to condone delay in filing the MA, the High Court has power under Articles 226 and 227 of the Constitution of India to do substantial justice by condoning the delay. Injustice was done to the assessee because the Tribunal did not follow the binding judgement in Manjunatha Cotton and Ginning Factory 359 ITR 565 on the issue of levy of penalty u/s 271(1)(c). Accordingly, the delay in fling the MA deserves to be condoned

Though under the provisions of Section 254 the Tribunal cannot go beyond the provisions of the said Section, the fact remains that the petitioner has substantiated that injustice is being done by not following the Division Bench decision of this Court. Therefore, in order to do substantial justice, this Court exercising the power under Articles 226 and 227 of the Constitution of India can condone the delay as held by the Division Bench of this Court in the case of Practice Strategic Communications India Private Limited .vs. C.S.T., Domlur, reported in 2016(45) S.T.R. 47(Kar.)

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DATE: August 21, 2018 (Date of pronouncement)
DATE: August 28, 2018 (Date of publication)
AY: 2010-11
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CITATION:
S. 92 Transfer Pricing: (i) Chapter 10 presupposes the existence of “income” and lays down machinery provision to compute ALP of such income. S. 92 is not an independent charging section to bring in a new head of income or to charge tax on income which is otherwise not chargeable under the Act. If no income has accrued to or received by the assessee u/s 5, no notional income can be brought to tax u/s 92 of the Act (ii) It is a jurisdictional requirement that the AO has to record satisfaction that there is “income” or potential of income. The recording of 'satisfaction' about the existence of an "international transaction" is also essential. This is only within the jurisdiction of the AO and the CIT(A) cannot substitute his satisfaction for that of the AO. Such substitution of satisfaction is impermissible in law as it amounts to curing a jurisdictional defect

We are of the view that since chapter 10 pre-supposes the existence of “income” and lays down machinery provison to compute ALP of such income, if it arises from an „International transaction‟. Section 92 is not an independent charging section to bring in a new head of income or to charge tax on income which is otherwise not chargeable under the Act. Accordingly, since no income had accrued to or received by the assessee u/s 5, no notional income can be brought to tax u/s 92 of the Act

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DATE: August 20, 2018 (Date of pronouncement)
DATE: August 23, 2018 (Date of publication)
AY: -
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CITATION:
S. 80-IC: An assessee who avails of deduction for a period of 5 years @ 100% of profits and gains is entitled to deduction on 'substantial expansion' for remaining 5 Assessment Years @ 25% (or 30% where the assessee is a company) and not @ 100% (Mahabir Industries v. PCIT 256 TM 201 (SC) distinguished)

As pointed out above, once the assessees had started claiming deduction under Section 80-IC and the initial Assessment Year has commenced within the aforesaid period of 10 years, there cannot be another initial Assessment Year thereby allowing 100% deduction for the next 5 years also when sub-section (3), in no uncertain terms, provides for deduction @ 25% only for the next 5 years. It may be asserted again that the assessees accept the legal position that they cannot claim deduction of more than 10 years in all under Section 80-IC

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DATE: August 10, 2018 (Date of pronouncement)
DATE: August 23, 2018 (Date of publication)
AY: -
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CITATION:
Income-tax dues, being in the nature of Crown debts, do not take precedence even over secured creditors, who are private persons. Given s. 238 of the Insolvency and Bankruptcy Code, 2016, the Code will override anything inconsistent contained in any other enactment, including the Income-tax Act

Given Section 238 of the Insolvency and Bankruptcy Code, 2016, it is obvious that the Code will override anything inconsistent contained in any other enactment, including the Income-Tax Act. We may also refer in this Connection to Dena Bank vs. Bhikhabhai Prabhudas Parekh and Co. & Ors. (2000) 5 SCC 694 and its progeny, making it clear that income-tax dues, being in the nature of Crown debts, do not take precedence even over secured creditors, who are private persons

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DATE: July 31, 2018 (Date of pronouncement)
DATE: August 23, 2018 (Date of publication)
AY: -
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CITATION:
S. 40(a)(ii): Education cess is not part of tax. Accordingly, the same is allowable as a deduction and disallowance u/s 40(a)(ii) cannot be made. CBDT Circular referred

That on a plain reading of the above provision of section 40(a) (ii), it is evident that a sum paid of any rate or tax is expressly disallowed by this sub-clause in two cases : (i) where the rate is levied on the profit or gains of any business or profession, and (ii) where the rate or tax is assessed at a proportion of or otherwise on the basis of any such profits or gains. It is evident that nowhere in the said section it has been mentioned that education cess is not allowable. Education cess is neither levied on the profits or gains of any business or profession nor assessed at a proportion of, or otherwise on the basis of, any such profits or gains.

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DATE: August 10, 2018 (Date of pronouncement)
DATE: August 23, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 23(1)(c) vacancy allowance: The words 'property is let' does not mean 'property actually let out'. If property is held with an intention to let out in the relevant year coupled with efforts made for letting it out, it could be said that such a property is a let out property and the same would fall within the purview of s. 23 (1)(c) and be eligible for vacancy allowance. A reasonable approach should be taken on the assesse's attempts to let out and infallible proof should not be demanded

Therefore, it is not at all relevant as to whether the property was let out in past or not. These words do not talk of actual let out also but talk about the intention to let out. If the property is held by the owner for letting out and efforts are made to let it out, that property is covered by clause (c) and this requirement has to be satisfied in each year that the property was being held to let out but remained vacant for whole or part of the year. Above discussion shows that meaning and interpretation of the words ‘property is let’ cannot be ‘property actually let out’. Thus, if a property is held with an intention to let out in the relevant year coupled with efforts made for letting it out, it could be said that such a property is a let out property and the same would fall within the purview of clause (c) of section 23(1)

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