The reason given in the affidavit regarding the arrears outstanding against the assessee is not correct because there were in fact no demands due pursuant to the Tribunal’s order. There is inordinate delay and serious laches on the part of the AO in dealing with the assessee’s application & there is no explanation why the application submitted on 22.06.2009 was taken up for the first time for consideration towards the fag end of FY 2009-10 and rejected on a wrong ground of non-payment of outstanding dues. Such action is in strong>contravention of CBDT’s Circular No.F.No.20/23/67 IT(A-I) which states that application filed by charitable trusts for issuance of Nil/low TDS certificates should be expeditiously processed. The rejection is also in violation of the Court’s earlier order where the department did not raise the stand that the s. 197 certificate could not be issued as the FY was over and instead agreed to consider the issue of the certificate. Obviously the department’s action are not bona fide and does not speak well of its attitude. Mala fides are writ large because new grounds supporting the rejection have been taken in the counter affidavit though such action is not permissible as per Mohinder Singh Gill vs. CEC AIR 1978 SC 851. The Department cannot take advantage of its own inaction and lapses and say that the certificate cannot be issued as the FY is over. Such action would lead to unnecessary complication for the assessee and the parties dealing with it. As held in Dabur India Ltd State of UP AIR 1990 SC 1814, the Govt. cannot be permitted to play “dirty games” with the citizens of the country to coerce them in making payments which the citizens were not legally obliged to make. If any money is due to the Govt., it should take appropriate steps, but it should not take extra legal steps or adopt the course of maneuvering. The Dept. has to be careful in future not to indulge in such avoidable circumstances which create an impression that the intention of the Department is not to help the assessee but to harass them. This matter needs to be inquired into by the concerned CCIT and appropriate action should be initiated against the erring officer

Though the High Court’s order was communicated to the department directing a release of the truck without any conditions, the department wrongly demanded 100% cash security and 100% Bond for the said release. The act of issuing show cause notice to avoid giving release is in direct confrontation with the judicial order of the Court. The plea raised with respect to investigation and confiscation is “absolutely frivolous and ridiculous” and has been raised to save from punishment of contempt. Also, the act of justifying the action and simultaneously tendering unqualified apology is a “double faced stance” which is against the settled principle of law. The Asst/Dy Commissioner, Customs, being a senior officer, should have known his limits and by crossing those limits, he has committed gross contempt. He is accordingly punished with simple imprisonment of three months & fine of Rs. 2,000. Also, as the act may constitute “corrupt practice”, the CBEC may consider prosecuting him

Penalty proceedings are quasi criminal in nature and the Revenue must be put to strict compliance of the legal requirements. The AO erred in imposing penalty without clear findings as to whether there was concealment of particulars of any assets or providing of inaccurate particulars of any assets. The CIT(A) was wrong in invoking Explanation(4) to s. 18(1)(c) which provides that if the net wealth returned is was less than 70% of the assessed wealth, there is a presumption of concealment. As the AO had not invoked the Explanation, the CIT(A) could not have relied on it to confirm the penalty

In Avani Exports, it was held that the amendment is violative for its retrospective operation in order to overcome the decision of the Tribunal, and at the same time, for depriving the benefit earlier granted to a class of the assessees whose assessments were still pending although such benefit will be available to the assessees whose assessments have already been concluded. In other words, in this type of substantive amendment, retrospective operation can be given only if it is for the benefit of the assessee but not in a case where it affects even a fewer section of the assessee. The amendment was quashed to the extent that the operation of the said section could be given effect from the date of the amendment and not in respect of earlier assessment years of the assessees whose export turnover is above Rs. 10 Crore. In other words, the retrospective amendment should not be detrimental to any of the assessee. As the Supreme Court had transferred all the matters to the Gujarat High Court in order to avoid confusion and difficulties in enforcement of conflicting judgments of different High Courts, it would be appropriate to follow the judgment of the Gujarat High Court

The problem is apparent, real and enormous. It has escalated because of Centralized Computerization and problems associated with incorrect and wrong data which is uploaded by both the deductors or payees and the AOs. The issue is of general governance, failure of administration, fairness and arbitrariness. The magnitude of the problem and the number of tax payers adversely affected thereby is apparent from the fact that 43% and 39% of the returns in Delhi zone for the FYs 2010-11 and 2011-12 were defective. Huge demands are created on this count. Every attempt possible has to be made to redress the grievance of the tax payers. The tax payers should not be made to run around, make repeated visits to deductor or the AO. Rejection of TDS, which has been deducted and paid, hurts the assessee and puts him to needless inconvenience, harassment and costs. It gives bad name to the Revenue. The problems faced by tax payers can be broadly classified into two categories. First, failure and difficulties in getting credit of TDS paid and second, adjustment of past demands or arrears of tax from refunds payable

Though in the recorded reasons, the AO alleged that there was no full and true disclosure by the assessee, in the objections order, there is no finding, even prima facie, how the assessee failed to disclose fully and truly all material facts with regard to the allegation of the existence of the PE. It is evident that the question of the assessee having a PE in India had been gone into in the first round. Once that aspect of the matter had been gone into in the earlier round, it was not open to the AO to reagitate it in the second round without any other / fresh material. No such other or fresh material has even been alleged in the reasons in the second round. Re-opening of assessments cannot be done merely on the basis of change of opinion

S. 10A, even after the amendment by the FA 2000 w.e.f. 1.4.2001 is an "exemption" provision and the current years and the brought forward loss suffered by a non-EPZ unit cannot be set-off against the s. 10A unit’s profits (Yokogawa India Ltd 341 ITR 385 (Kar), Hindustan Unilever 325 ITR 102 (Bom) & Black and Veatch Consulting (Bom) referred)

The assessee’s quantum appeal has been admitted by the High Court. If the assessee succeeds in the quantum proceedings, it would not even be necessary to consider the s. 271(1)(c) penalty proceedings and so no prejudice has been caused to the department qua the penalty proceedings. The department’s apprehension that the penalty proceedings may be barred by limitation u/s 275(1A) is not well founded. In any event, the apprehension is set at rest by directing that in the event the proceedings are held to be barred by limitation, this appeal shall stand revived automatically and without further orders of the Court

Though the shares were pledged with IDBI and the assessee did not have physical possession of the share certificates and had also undertaken to IDBI that the shares would not be transferred, there was still a “transfer” u/s 2(47). While there would be a serious question of validity of such transaction in so far as the assessee’s relationship with IDBI is concerned, and the purchaser would not be entitled to transfer the shares in its’ name, these issues were not relevant because the assessee did transfer whatever rights it had in the shares to the purchaser. The Revenue’s argument that the transaction was a “colourable device” and a “paper arrangement” is not acceptable because (i) there is no provision which prevents an assessee from selling loss making shares with a view to offset the loss against other gains and (ii) the transaction with the group company was at the fair value. The fact that the shares were pledged and could not be registered in the purchaser’s name did not establish that transaction was a contrived one (Sakarlal Balabhai 69 ITR 186 (Guj), Azadi Bachao Andolan 263 ITR 706 (SC) & Vodafone 341 ITR 1 (SC) followed)

The Scheme cannot be said to have no purpose or object and that it is a mere device/subterfuge with the sole intention to evade taxes. While it is true that the Scheme may result into tax avoidance, it cannot be said that the only object of the Scheme is tax avoidance. In Vodafone International Holdings B.V 341 ITR 1 (SC) it was held that the Revenue cannot start with the question as to whether the impugned transaction is a tax deferment/saving device but that it should apply the “look at” test to ascertain its true legal nature. The corporate business purpose of a transaction is evidence of the fact that the impugned transaction is not undertaken as a colourable or artificial device. The stronger the evidence of a device, the stronger the corporate business purpose must exist to overcome the evidence of a device. Tax planning may be legitimate provided it is within the framework of law though a “colourable device” cannot be a part of tax planning. It cannot be said that all tax planning is illegal/illegitimate/impermissible. A similar scheme of arrangement involving demerger of passive infrastructure assets of the Company has been sanctioned by the Delhi High Court