Category: High Court

Archive for the ‘High Court’ Category


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DATE: April 9, 2021 (Date of pronouncement)
DATE: April 14, 2021 (Date of publication)
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CITATION:
The DTVSV Act, 2020 is an Act to provide for resolution of disputed tax and matters connected therewith or incidental thereto. The emphasis is on disputed tax and not on disputed income. From a plain reading of the provisions of the DTVSV Act, 2020 and the Rules set out above, it emerges that the Designated Authority would have to issue Form 3 as referred to in section 5(1) specifying the amount payable in accordance with section 3 of the DTVSV Act. In the case of the declarant who is an eligible appellant not falling under section 4(6) nor within the exceptions in section 9 of the DTVSV Act, 2020, which fact appears to be undisputed

Before Hon’ble High Court, the Petitioner challenged the arbitrary and unreasonable action of the Designated Authority (Respondent No.2) in rejecting the declarationfiled under the DTVSV Act. It was argued before the Hon’ble High Court that thePetitioner’s case doesn’t fall under any of the disqualifications mentioned in section 9 of the DTVSV Act, 2020 and therefore, the Designated Authority has no power to reject the application without assigning any reason for the same. It was submitted before the Hon’ble Court that the Petitioner has satisfied all the conditions to make the declaration under the DTVSV Act, 2020 and therefore, he is eligible to seek all the benefits under the said Act. On the other hand, the department argued that the declaration of the Petitioner is not valid as there cannot be any disputed tax in the absence of any disputed income. Thus, the declaration of the Petitioner has been rightly rejected

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DATE: March 25, 2021 (Date of pronouncement)
DATE: March 27, 2021 (Date of publication)
AY: 2018-19
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CITATION:
S. 11/ Form No.10B: Under Circular No.2 / 2020 dated 03.01.2020, the CBDT has delegated the power to the CIT to admit belated applications in filing Form No.10B for AY 2018-19 and onwards for a period of only upto 365 days. There is no error or infirmity in this stand. Fixing a period of one year’s delay i.e., 365 days of delay for condonation of delay in filing Form No.10B for AY 2018-19 and onwards cannot be said to be arbitrary or irrational. However, there is also nothing in s. 119(2)(b) preventing or precluding the CBDT from passing a special order in any given case from condoning the delay in filing Form No.10B beyond 365 days despite passing a general order. The Petitioner should approach the CBDT which will deal with the claim on merit and in accordance with law

We do not find any error or infirmity in the view taken by the CBDT vide Circular No.2 / 2020 or by the Commissioner while passing the impugned order dated 19.02.2020. Fixing a period of one year’s delay i.e., 365 days of delay for condonation of delay in filing Form No.10B for the assessment year 2018-19 and onwards cannot be said to be arbitrary or irrational. Therefore the general order passed by the CBDT in this regard under section 119(2)(b) cannot be faulted. However, there is also nothing in section 119(2)(b) preventing or precluding CBDT from passing a special order in any given case from condoning the delay in filing Form No.10B beyond 365 days despite passing a general order

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DATE: March 25, 2021 (Date of pronouncement)
DATE: March 27, 2021 (Date of publication)
AY: 2015-16
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CITATION:
Vivad se Vishwas Act: The CBDT's answer to question No.73 that the ineligibility u/s 9(a)(ii) relates to an assessment year and if for that assessment year a prosecution has been instituted, then the taxpayer would not be eligible to file declaration for the said assessment year even on issues not relating to prosecution would not only be illogical and irrational but would be in complete deviation from section 9(a)(ii). On a literal or purposive interpretation, the only exclusion visualized under the said provision is pendency of a prosecution in respect of tax arrear relatable to an assessment year as on the date of filing of declaration and not pendency of a prosecution in respect of an assessment year on any issue. To hold that an assessee would not be eligible to file a declaration because there is a pending prosecution for the assessment year in question on an issue unrelated to tax arrear would defeat the very purport and object of the Vivad se Vishwas Act

The prosecution against the petitioner has been initiated under section 276-C(2) of the Act because of the delayed payment of the balance amount of the self-assessment tax. Such delayed payment cannot be construed to be a tax arrear within the meaning of section 2(1)(o) of the Act. Therefore such a prosecution cannot be said to be in respect of tax arrear. Because such a prosecution is pending which is relatable to the assessment year 2015-16, it would be in complete defiance of logic to debar the petitioner from filing a declaration for settlement of tax arrear for the said assessment year which is pending in appeal before the Tribunal.

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DATE: March 25, 2021 (Date of pronouncement)
DATE: March 27, 2021 (Date of publication)
AY: -
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CITATION:
Customs Act: It is a settled proposition that when a law requires a thing to be done in a particular manner, it has to be done in the prescribed manner and proceeding in any other manner is necessarily forbidden. An order is vitiated if it is passed in violation of the principles of natural justice. Where there is a breach of principles of natural justice, existence of an alternate remedy of appeal would be no bar to exercise of jurisdiction under Article 226 of the Constitution of India

In the light of the discussions made above, we are of the unhesitant view that the impugned order in original is clearly unsustainable in law being in violation of the principles of natural justice as well as the statutory provisions as alluded to hereinabove. In the circumstances, relegating the petitioner to the forum of appeal does not arise. Consequently, we set aside the impugned order in original dated 23.09.2020 and direct that the proper officer may proceed with the matter afresh, if he is so inclined, by following the mandate of section 124 of the Customs Act and Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. We further direct that respondent No.2 shall assign the hearing to a proper officer other than respondent No.3, who had passed the impugned order in original

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DATE: February 12, 2021 (Date of pronouncement)
DATE: March 3, 2021 (Date of publication)
AY: -
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CITATION:
S. 153A, 153C search assessments: (i) A statement recorded u/s 132(4) has evidentiary value but cannot justify the additions in the absence of corroborative material. (ii) The statement also cannot, on a standalone basis, constitute 'incriminating material' so as to empower the AO to frame a block assessment u/s 153A (iii) If the statement was recorded in the course of search conducted in the case of a third party, and assuming the statement is construed as 'incriminating material belonging to or pertaining to a person other than person searched', the only legal recourse available to the department is to proceed in terms of S. 153C of the Act by handing over the same to the AO who has jurisdiction over such person. An assessment framed u/s 153A on the basis of alleged incriminating material (being the statement recorded under 132(4) of the Act) is not valid. The Assessee also had no opportunity to cross-examine the said witness (All imp judgements referred)

Now, coming to the aspect viz the invocation of section 153A on the basis of the statement recorded in search action against a third person. We may note that the AO has used this statement on oath recorded in the course of search conducted in the case of a third party (i.e., search of Pradeep Kumar Jindal) for making the additions in the hands of the assessee. As per the mandate of Section 153C, if this statement was to be construed as an incriminating material belonging to or pertaining to a person other than person searched (as referred to in Section 153A), then the only legal recourse available to the department was to proceed in terms of Section 153C of the Act by handing over the same to the AO who has jurisdiction over such person. Here, the assessment has been framed under section 153A on the basis of alleged incriminating material (being the statement recorded under 132(4) of the Act). As noted above, the Assessee had no opportunity to cross-examine the said witness, but that apart, the mandatory procedure under section 153C has not been followed.

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DATE: August 5, 2019 (Date of pronouncement)
DATE: January 27, 2021 (Date of publication)
AY: 1994-95
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CITATION:
S. 482 CrPC: Prosecution launched in 2008 u/s 276C, 277 & 278B of the Income-tax Act, 1961 for alleged tax evasion in AY 1994-95 deserves to be quashed because the assessee has paid the tax and the penalty & also taking into account the year in which the alleged offence was committed. The assessee has been paying income-tax regularly & has not been prosecuted for any false disclosure either earlier or thereafter. It would only be in the nature of harassment to the petitioners, and an abuse of the process of the Court, if this case is allowed to be continued. (Note: The Supreme Court has directed issue of notice on the Dept's SLP)

This Court, in a number of cases, has defined the scope and ambit of the powers under Section 482 Cr.P.C. A High Court, exercising its power under the aforesaid section, has an inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent the abuse of the process of the Court. It has been clarified that the inherent powers of the Court under Section 482 Cr.P.C. can be exercised to give an effect to an order under the Cr.P.C., to prevent the abuse of the process of the Court and to otherwise secure the ends of justice. No doubt, a caution has been laid that such powers are to be exercised sparingly, carefully and with much circumspection, but in a case of this kind, where the entire liability has been paid to the Government and there has not been any loss to the public exchequer, allowing this case to be continued after eleven years would only be an abuse of the process of the Court.

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DATE: December 8, 2020 (Date of pronouncement)
DATE: January 23, 2021 (Date of publication)
AY: 2014-15
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CITATION:
S. 2(24)(iia)/ 56(2)(vii)/160(1)(iv): (i) A private discretionary Trust has to be assessed in the status of an "individual" as the beneficiaries are individuals. It cannot be assessed as an "AOP" even though there are multiple trustees & beneficiaries. Even a non-human juristic entity can be assessed as an "individual". The fact that in the return filed in Form ITR-5, the status is that of a "trust" is irrelevant. Consequently, the contribution received by the assessee is assessable as "income" us 56.

(ii) U/s 260A, it is only the appellant who is entitled to raise a question of law. The respondent has no right to challenge a point which is decided against him by the Tribunal. The appellant cannot be worse of in its appeal at the instance of the respondent who has not filed an appeal over such finding of the Tribunal.

The authority on examining the factual position found that the assessee has adopted a ingenious method for the purpose of circumventing the provisions of the Act by accepting the gift on behalf of the individuals thereby acting as a conduit. Unfortunately, the Tribunal did not examine this aspect of the matter but proceeded on a different footing which we decline to approve. The Tribunal placed reliance on the decision of the Delhi Tribunal in Mridu Hari Dalmia Parivar Trust. We find that the said decision could not have been applied to the facts of the instant case, more particularly, when the Assessing Officer in the said case held that the assessee is an AoP. Furthermore, the finding rendered by the Tribunal with regard to the effect of insertion of clause (x) in Section 56(2) with effect from 01.04.2007 could not have been rendered in isolation without reference to the factual details where the beneficiaries were identified and therefore, the Tribunal erred in reversing the finding of the CIT(A) that the assessee has to be assessed as an “individual”. Therefore, we hold that the assessee Trust is a representative assessee as it represents the beneficiaries who are identified individuals and therefore to be assessed as an “individual” only. Consequently, the contribution of Rs.25 Crores is to be assessed as income under Section 56(1) under the head ‘income from other sources’.

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DATE: January 15, 2021 (Date of pronouncement)
DATE: January 23, 2021 (Date of publication)
AY: 2020-21
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CITATION:
Extension of Due Date for filing RoI and TAR: Power exercised by the CBDT u/s 119 is discretionary. On careful consideration of the order passed by the CBDT on 11.01.2021, we are of the considered view that it cannot be said that CBDT had failed to exercise its discretion or that it acted in an arbitrary or unreasonable manner in refusing to grant further extension of the due dates. We therefore do not find any good ground to invoke our writ jurisdiction under Article 226 of the Constitution of India to direct CBDT for further extension of the due dates

We find from the order dated 11th January, 2020 passed by the CBDT under section 119 of the Act that across the board three extensions of the due dates have been granted. In so far filing of tax audit report is concerned, the original due date was 30th September, 2020, which was first extended to 31st October, 2020, thereafter to 31st December, 2020 and now to 15th January, 2021. In respect of filing of income tax return in those cases where tax audit report is required to be filed the original due date was 31st October, 2020 which was first extended to 30th November, 2020, thereafter to 31st January, 2021 and finally to 15th February, 2021. Thus, we find that CBDT had considered the evolving situation in the country and thereafter, had extended the due dates on three occasions. Now CBDT says that filing of audit reports and income tax reports cannot be delayed indefinitely. Therefore, a line has been drawn that no further extension of the due dates would be granted.

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DATE: January 13, 2021 (Date of pronouncement)
DATE: January 14, 2021 (Date of publication)
AY: AY 2019-20
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CITATION:
Extension of due date for filing ROI: (i) The CBDT has vide order dated 11.01.2021 decided not to grant further extension of time. The Court cannot go into the issues which weighed with the CBDT in taking the decision and substitute the same with its own view. Interference by the Court, at this point of time, in matters relating to the Revenue may have far reaching implications. It may upset the entire functioning of the Government and may lead to undesirable results. (ii) However, the CBDT may consider issuing an appropriate circular taking a lenient view as regards the consequences of late filing of the Tax Audit Reports as provided u/s 271B of the Act. We leave it to the better discretion of the CBDT.

It is the case of the CBDT that it has declined to exercise its power under Section 119 of the Act as the conditions for exercise of such power do not exist. It is the case of the Revenue that the issue of hardship was dealt with considerably at the relevant point of time and that is the reason why three times the time limit came to be extended. The Board has now thought fit in the interest of the Revenue not to extend the time period any further. There are so many vital issues which the Revenue needs to keep in mind before taking such decision. The question is whether this Court should go into all such issues which weighed with the CBDT in taking a particular decision one way or the other and substitute the same with that of this Court on the ground that if the time limit is not extended, then the people at large would be put immense hardships? Interference at the end of this Court, at this point of time, in the matters relating to the Revenue may have far reaching implications. This Court may find it very easy to issue a writ of mandamus, as prayed for, saying that if the time limit has been extended in the past on three occasions, then why not for one last time upto 31st March 2021. However, such a line of reasoning or approach may upset the entire functioning of the Government and may lead to undesirable results.

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DATE: January 8, 2021 (Date of pronouncement)
DATE: January 9, 2021 (Date of publication)
AY: -
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CITATION:
Though the CBDT has extended the due dates for filing the ITR & TAR to 10.01.2021 & 15.02.2021 due to the Covid-19 pandemic situation, it should look into the question of further extension bearing in mind that the time period for the officials of the tax department has been extended upto 31.03.2021. Some extension deserves to be considered in accordance with law.

We are of the view that the respondent No.1 – Union of India, Ministry of Finance should immediately look into the issue, more particularly, the representation dated 12th October 2020 at Annexure : I of the paper book (page 108) and take an appropriate decision at the earliest in accordance with law. We, accordingly, direct the respondent No.1 to do so. While taking an appropriate decision, the Union shall bear in mind the observations made by this High Court in the two above noted judgements, more particularly, the observations of the Supreme Court in the case of Vaghjibhai S. Bishnoi (supra) that the powers given to the CBDT are beneficial in nature to be exercised for proper administration of fiscal law so that undue hardship may not be caused to the taxpayers. The purpose is of just, proper and efficient management of the work of assessment and the public interest. One additional aspect needs to be kept in mind before taking any appropriate decision that the time period for the officials of the tax department has been extended upto 31st March 2021 having regard to the current covid19 pandemic situation. If that be so, then some extension deserves to be considered in accordance with law. Let an appropriate decision be taken by 12th January 2021.