The judgement in Sun Engineering had to be confined to a case where the issue had attained finality in the original proceedings. Such an issue could not be permitted to be agitated by the assessee in reassessment proceedings. However, as the facts showed that the issue had not attained finality in the original proceedings, there was no bar in the assessee raising such issues in the reassessment proceedings.
On facts, the assessee had rendered support services to its subsidiaries and some employees of the latter had worked under the guidance of the assessee, but the work so done by the employees was for the business of the Indian subsidiaries and not for the assessee. There is a distinction between business of the foreign company and that of its Indian subsidiaries. What was done by the employees of the Indian subsidiaries was running the business of the Indian subsidiaries with the guidance of the assessee. The work done by the employees of Indian subsidiaries did not mean that these employees were doing business of the foreign principal unless the work so done by these employees entitled the assessee for rewards of the work so done. The situs and manner of rendering of services, by anyone other than the employees or sub-contractees of the foreign principal, cannot govern whether or not the foreign principal will have a PE in India.
Where the ITO conducted a survey u/s 133A of the Act on the premises of the Petitioner, a practicing Chartered Accountant, and impounded books of account /documents belonging to the Petitioner and retained such books of account/documents and the Petitioner filed a Writ Petition to challenge the same, HELD, allowing the Petition:
Where the assessee was a stock broker but it was consistently following the practice of holding some shaes as ‘stock in trade’ and other shares as ‘investments’ and the question arose whether the profits on the sale of shares held as investments constituted a capital gain or business profits, HELD
Though the issue and service of notice relates to procedural law S. 292-BB takes away the valuable right of an assessee to challenge the validity of assessment during the course of appellate proceedings and creates a new disability on the assessee by debarring him from challenging the validity of the same;
(4) Consequently, s. 292-BB cannot be construed to be retrospective and has to be applied prospectively in respect of AY 2008-09 and subsequent years.
In CIT vs. Suresh N. Gupta 297 ITR 322, the Supreme Court held that the Provio to s. 113 (which imposes surcharge on block assessments), though inserted only with effect from 1.6.2002, was applicable to searches conducted prior to that date as it was ‘clarificatory’ and ‘curative’ in nature.
HELD, however, by another Division bench that as the said proviso was introduced with effect from 1.6.2002, i.e. with prospective effect “we are of the opinion that keeping in view the principles of law that the taxing statute should be construed strictly and a statute, ordinarily, should not be held to have any retrospective effect, it is necessary that the matter be considered by a larger Bench”.
Under the Right to Information Act, the Court is required to provide information as to the assets declared by the Judges
In Shruti Colorants a Division Bench held that where there was a delay in filing Appeals u/s 35G of the Central Excise Act (= s. 260A of the IT ACT), the Court had no power to condone the delay by taking recourse to s. 5 of the Limitation Act.
This view is incorrect because by virtue of s. 29(2) of the Limitation Act, where a statute is silent, the provisions of s. 5 of the Limitation Act applies and the Court has power to condone delay.
Accordingly, Shruti Colorants is overruled.
Where the AO issued a show-cause notice alleging that the Appellant was not an “new undertaking” eligible for deduction u/s 10B but in the assessment order denied deduction on the different ground that the activity of the assessee did not constitute “manufacturing” without considering any of the several judgements on the issue, HELD that arbitrariness was writ large on the face of the assessment order and that the same had to be quashed by the Court by exercise of its extraordinary powers under Article 226 of the Constitution even though the assessee had alternative remedies of appeal against the said order.
Though s. 275(1) (c) provides that the limitation for levy of penalty shall be “after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later”, in a case where the initiation of action for imposition of penalty is not in the course of some proceedings (e.g. penalty u/s 271B for failure to get accounts audited u/s 44AB and non-filing of audit report), the first part of s. 275(1)(c) would have no application and it is only the period of limitation prescribed in the second part which would apply. Since only one period of limitation would be applicable, the expression “whichever period expires later” would have to be read as that very period of limitation.