Tax
Rejection Of Application For Voluntary Cancellation Of GST Registration Didn't Contain Reasons: Bombay HC Quashes Rejection Order
The Bombay High Court ruled that since the revocation orders for registration cancellation on petitioner's application were passed contrary to principles of natural justice, all the subsequent proceedings initiated thereafter, which are consequential, shall be quashed.“Before the revocation of cancellation of registration, the Petitioner was not supplied with the documents on the basis of which its application for cancellation of registration was rejected, which is contrary to the principles of...
Failure Of AO To Conduct Enquiry, Summarily Disallowing Expenses Was Mechanically Endorsed By CIT(A) & ITAT: Bombay HC Quashes Assessment
Observing that a mechanical approach & tactically equitable approach of convenience cannot be endorsed, the Bombay High Court quashes the ITAT's order, upholding an ad-hoc disallowance of 10% of expenses alleging as bogus purchases despite returning a firm finding that the AO's order was untenable, The High Court outlined that once a categorical observation is rendered by the last fact-finding authority i.e. the ITAT, then the AO's order that was not based on any cogent &...
Notice Issued U/S 148A(B) Of Income Tax Act Against Dissolved Firm Is Not Valid: Gujarat High Court
The Gujarat High Court stated that notice issued under section 148A(b) of the Income Tax Act, 19861 against dissolved firm is not valid. The Division Bench of Justices Bhargav D. Karia and Mauna M. Bhatt was dealing with a case where the Assessing Officer/respondent issued an impugned notice under Section 148A(b) of the Income Tax Act, 1961, in the name of the partnership firm and also passed an order under Section 148A(d) of the Income Tax Act against the same firm, which had already...
Rectification Order Not Sustainable If It Fails To Provide Reasons Justifying Exercise Of Rectification Power: Kerala High Court
The Kerala High Court stated that rectification order is not sustainable if does not provide any reason justifying exercise of power of rectification. The Bench of Justice Gopinath P. observed that “….personal hearing notice does not indicate that any reason justifying the exercise of power of rectification was pointed out to the assessee. Therefore, the assessee is right in contending that the rectification order cannot be sustained in law.” Section 161 of the Central Goods and...
Taxpayer Can't Make Fresh Claim Of Deduction U/S 80IA In Response To Notice U/S 153A After Search In Unabated Assessment: Hyderabad ITAT
The Hyderabad ITAT ruled that the assessee cannot make a fresh claim of deduction under Chapter VI-A of the Income Tax Act, for the first time, in the return of income filed in response to notice issued u/s 153A, pursuant to search conducted u/s 132 of the Act, in unabated/completed assessment as on the date of search. However, in case of abated assessments, like the AO who can make an assessment based on incriminating materials and any other information made available to him, ...
Dept Can't Justify Retention Of Refund Claim On Account Of Having Been Deposited Voluntarily By Taxpayer: Delhi HC
The Delhi High Court held that when the payment of refund was delayed, the assessee automatically becomes entitled to interest u/s 42 of the DVAT Act. After the assessee succeeds in vindicating its stand that its claim for refund was correct, it would follow that that the assessee would be refunded the amount claimed and interest would be payable, added the High Court. The High Court held so while referring to the statutory time frame constructed by Section 38(3)(a)(ii) of the DVAT...
Failed To Comply With S.23(4) Of MVAT Act Along With Non-Application Of Mind & Legal Malafide: Bombay HC Quashes Assessment, Imposes 50K Cost On Dept
While considering a case where the Commercial tax department has flagrantly breached the statutory provisions of Sec 23(4) of the MVAT Act, the Bombay High Court ruled that assessment order passed by Commissioner of Sales tax is vitiated by total non-application of mind. Since a strong prima facie case is made out about manipulating the date of passing the assessment order, the High Court found that such manipulation was to create an impression that the order was made within the...
S. 68 Of Income Tax Act Not Attracted When There Is No Unexplained Amount In Bank Statement: Gujarat High Court
The Gujarat High Court stated that there cannot be any income escapement by the assessee if there is no unexplained amount in the bank statement on record. The Bench of Justice Bhargav D. Karia and Mauna M. Bhatt observed that “the reason given by the Assessing Officer for alleged escapement of Rs.3,25,00,000/- is not sustainable since there is no unexplained amount in the bank statement on record since the assessee did not retain the amount of Rs.3,25,00,000/- and as such the...
Credit Cannot Be Blocked In Electronic Credit Ledger If Sufficient Balance Not Available: Gujarat High Court
The Gujarat High Court stated that there cannot be any blocking of the credit in electronic credit ledger if there is no sufficient balance available. The Division Bench, comprising Justices Bhargav D. Karia and Niral R. Mehta, was hearing a case where the assessee contested the blocking of Input Tax Credit (ITC) amounting to ₹2,44,05,567 in its electronic credit ledger. Rule 86A of CGST Rules, 2017 empowers the Commissioner or authorized officer to restrict debit of fraudulently...
Exporter Is Eligible For Duty Drawback Once Export Proceeds Are Realized Within Stipulated Period As Per FEMA: Delhi HC
Finding that the payments were received by the bank from third parties, specifically named in the tripartite agreement, which was backed by a firm irrevocable purchase order, the Delhi High Court ruled that duty drawback could not be denied to an exporter. Since the e-BRCs were issued by the DGFT after verification from the bank confirming the receipt of payments, the High Court held that payments made to local supplier through banking channels, could not be regarded as non-existence, ...
S.27A Customs Act | Interest On Delayed Refund Is Payable After Three Months Of Date Of Refund Application, Not From Date Of Order: Bombay HC
Pointing that the Department has delayed the refund on customs duty that was due & payable to assessee for almost ten years, the Bombay High Court ruled that such action of Department in avoiding the payment of interest on delayed refund by raising frivolous pleas, cannot be sustained. Referring to Supreme Court decision in Union of India Vs. Hamdard (Waqf) Laboratories [AIR 2016 SC 1124], the High Court reiterated that the liability of the Revenue to pay the interest u/s 11BB, ...
Revenue Shared With Franchise Doesn't Attract TDS Liability U/S 194-I If No Actual Services Were Rendered: Delhi ITAT
The Delhi ITAT ruled that TDS u/s 194-I has no application on the franchise fee, if the franchisee/collaborator does not render any service, and claim of expenditure is nothing but sharing of revenue in accordance to the agreement undertaken by the parties. Section 194I of Income tax Act imposes an obligation for TDS deduction on persons (other than individual/HUF who are not subject to audit) making rental payments to resident Indians above a specified limit i.e., 2.40 lacs in a year. ...