Co-operative Housing Society -A co-operative housing Society is not expected to indulge into profiteering business from its members. Transfer fees cannot be charged under the pretext of “voluntary donation”.-Amount which is accepted above permissible limits towards transfer fee is illegal and taxable as income in the hands of the society- Amount collected was directed to be returned with simple interest @ 8%.

S. 276C : Offences and prosecutions – Wilful attempt to evade tax – Pendency of appeal before CIT(A)-Stay – Alleged bogus purchases -During pendency of stay the criminal prosecution should not be launched and, if it has been already launched, the same shall not proceeded.[S.246 ]

S. 272A : Penalty – Failure to answer questions – Sign statements – Furnish information –When conduct of the assessee is not bonafide , levy of penalty for non compliance of S.131(IA) is held to be valid.[S. 131(1), 131(IA), 133(6)]

S. 271(1)(c) Penalty- Concealment-Appeal-If appeals with reference to the quantum proceedings have been admitted by the Court on substantial questions of law, it means that there were debatable and arguable questions raised and levy of penalty is not justified . Penalty also cannot be levied if the claim was as per judicial precedents prevalent at the time of filing the ROI. Also, there must be a finding that the details supplied by the assessee in its return were incorrect or erroneous or false.

S. 263 : Commissioner – Revision of orders prejudicial to revenue Deduction at source – Commission or brokerage -The incentive paid by the dealers to sub-dealers cannot be equated with commission – Not liable to deduct tax at source- Revision is held to be bad in law .[ S.194H ]

S. 263 : Commissioner – Revision of orders prejudicial to revenue –It is obligates the CIT to give the assessee an opportunity of being heard before passing of order-While the CIT is entitled to consider a point which is not stated in the show-cause notice, he cannot pass the revision order unless the assessee is given the opportunity of being heard- Such an order is untenable in the eyes of law .

S. 206C : Collection at source – Trading -Limitation-Order passed beyond limit of four years is bad in law -Though Section does not impose any limitation period for the AO to hold the assessee to be in default for collection of tax at source, a reasonable time limit of four years has to be read into the statute- Orders passed after this period are beyond the limitation and are void-The fact that the Dept became aware of the default later is irrelevant. The fact that the assessee admitted his liability is also irrelevant- Assessment is held to be bad in law .[ S.191, 201 ]

S. 147 : Reassessment –With in four years- Allotment of shares- less than fair market value of shares –Reasons recorded on the basis of letter from Department of Investigation and tax evasion petition- Failure to disclose material facts as regards issue of shares to the assessee at a price less than Fair Market Value – Reassessment is valid . [ S. 56(2)(vii) 143(1) 143(3), 148 , 151, Companies Act , 1956 S.299 ]

S. 68:Cash credits- Capital gains-Penny stocks-Reliance by AO on statements recorded by the Investigation Wing to conclude that the capital gains are bogus without giving an opportunity of cross examination is a complete violation of principles of natural justice as held in CCE v.Andaman Timber Industries ( 2015 ) 127 DTR 241(SC). The AO has not controverted the evidence of purchase bills, payment of consideration through bank, DEMAT account, allotment of amalgamated shares, sale of shares through stock exchange at prevailing price, payment of STT etc- Addition cannot be made as cash credits.[ S.10 (38),45,115BBE ]

S.68: Cash credits-Capital gains-Penny Stocks-If the transaction is supported by documents like contract notes, demat statements etc and is routed through the stock exchange and if the payments are by account-payee cheques and there is no evidence that the cash has gone back to the assessee’s account, it has to be treated as a genuine transaction and cannot be assessed as unexplained credit, simply because in the sham transactions bank a/c were opened with HDFC bank and the appellant has also received short term capital gain in his account with HDFC bank does not establish that the transaction made by the appellant were non genuine. [ S.45 ]