Taxsutra Database Insight: Flashback 2022 - An Eventful Year 'for the Revenue'
Issue No. 270 / January 10th, 2023
Dear Professionals,
The year 2022 will be remembered forever in the tax jurisprudence primarily for Supreme Court judgments on - Reassessment & Charitable Institutions. There were several other Supreme Court judgments that left a lasting impression viz., Apex Labs, Wipro, Checkmate, etc. It was indeed an extraordinary year as the Apex Court gave quietus to long-pending issues affecting the industries at large. Taxsutra Databasepresents 27 rulings by the Supreme Court to sum up the distance we have traversed on myriad legal issues as we look forward to finality on numerous other questions pending before the Supreme Court. With devoted tax benches, it cannot be gainsaid that the day of harmony in tax law will come sooner than later.
“Taxsutra Database”, a true Income-tax research tool, is an archive of over119115+Income Tax Rulings reported across ITR, CTR, Taxman, DTR, ITD, TTJ, and ITR (Trib) and also includes recent ‘unreported handpicked rulings of SC, HC & ITAT’. It is a completely integrated service with the following features:
a) Comprehensive coverage of all latest cases powered by an advanced search engine to provide a seamless user experience;
b) Effective search results supported by active filters around Court Level, Location, Case Numbers and Citation;
c) Enhanced search feature, using the Unique Bulls Eye Application, by including "Exact words", "Any of these", "none of these" options.
d) Judicial “forward & backward reference”
The Taxsutra Database comes at a very special Annual Subscription price of 4200+ GST AND includes an annual license to the Taxsutra Library.
The Updated Return was introduced by the Finance Act, 2022 to enable the taxpayers to make good their disclosures or failure in filing of ITR within the time frame already provided in the Income Tax Act. Opting for filing the Updated Return can save taxpayers from multi-pronged legal consequences
Mr. Prashant Upadhyay and Mr. Varun Fitter (Partners, Shah Mehta & Bakshi, Chartered Accountants) elaborate on various advantages entailed in filing an Updated Return from the perspective of income-tax and GST laws. The authors discuss the implications of filing an Updated Return on penalty and prosecution related provisions. They also explain how the income-tax and GST bill can drastically go down on filing of Updated Return. Given the legal framework on exchange of information, the authors are of the view that an Updated Return can save tax payers from legal battles under PF, ESI, labour welfare laws too.
Click here to read the article, "Shades of Updated Return"
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Key Takeaways from Handpicked Rulings
1) ITAT: Form 67 filing mandatory, not directory, for claiming FTC – Visakhapatnam ITAT denies foreign tax credit by invoking the Rule 128(9) of the IT Rules; ITAT notes that the Assessee realised the filing of Form 67 only after the scrutiny was initiated and filed it with a delay of more than two years without any valid and reasonable cause; ITAT observes that use of the word “shall” in Rule 128(9) signifies that it is mandatory in nature and not directory; Thus, holds that as per the Rule, Form 67 shall be furnished on or before the due date specified for furnishing the return of income under Section 139(1)………..Click here to read and download ITAT Order
2) ITAT: Mere entries in firm's books cannot alter ownership; Upholds colourable device plea – ITAT holds that mere entries in the books of accounts of partnership firm, the Assessee cannot claim that the transferred property was owned by the partnership firm; The Assessee cannot change ownership and character of the transaction of purchase and sale entered into in individual capacity; ITAT upholds CIT(A) order that the attempt is a colorable device obviously to circumvent Sec.50C (43CA) not being in existence in impugned year); Holds Assessee liable to capital gains tax but only to the extent of his share of 50%.............Click here to read and download ITAT Order
3) ITAT: Trust doesn't lose complete exemption, only 'diverted' amount taxable – Mumbai ITAT holds that the Assessee-Trust loses the exemption only to the extent of violation of Section 13 and not on the whole of the income; Notes that as per an amendment to the provisions by the finance act 2022 w.e.f 1-4-2023 which provides that a part of income is applied directly indirectly for the benefit of specified persons then only such part of income shall be excluded from the operations of provisions of Section 11 and 12 of the Act and consequently it should be included in the total income of the trust; ITAT directs AO to make an independent enquiry in accordance with the law that whether the 10th floor has been utilized by the trustees for their direct or indirect benefit and if on enquiry the AO finds that the property was used for the director indirect benefit of the specified persons ……….Click here to read and download ITAT Order
4) SC: Dismisses Assessee's SLP against disallowance of bonus or commission paid to directors - SC dismisses assessee’s SLP against Delhi HC order, observes that there is a concurrent finding of fact by the AO, CIT (Appeal) and ITAT which has been duly affirmed by the High Court, disallowing the payment of bonus to two Directors of the company; SC holds that no case to interfere with the impugned order passed by the HC is made out; HC upheld the ITAT order by holding that there was no substantial question of law as AO and CIT(A) had given a concurrent finding that the assessee has paid the bonus to avoid payment of dividend distribution tax; HC, while dismissing the appeal, observed that if we take the analogy in case of …………..Click here to read and download SC Order
5) ITAT: Disallowance of TDS Credit by rectification order not sustainable – ITAT discards rectification order disallowing TDS credit claimed on the basis of Form 26AS & Form 16A; Holds rectification proceedings u/s 154 can be done only in the cases where there is a mistake apparent from record and no debatable issue is involved; Assessee filed her return of income on the basis of record generated by the Department itself i.e., Form No 26AS and Form No 16A; The Revenue disallowed the TDS credit by passing a rectification order; ITAT exclaims how the documents that formed the basis of claiming TDS credit processed and issued by the Revenue itself can have a mistake apparent from record; ITAT observes …………………Click here to read and download ITAT Order
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About Taxsutra Database!
“Taxsutra Database”, a true Income-tax research tool, is an archive of over119115+Income Tax Rulings reported across ITR, CTR, Taxman, DTR, ITD, TTJ, and ITR (Trib) and also includes recent ‘unreported handpicked rulings of SC, HC & ITAT’. It is a completely integrated service with the following features:
a) Comprehensive coverage of all latest cases powered by an advanced search engine to provide a seamless user experience;
b) Effective search results supported by active filters around Court Level, Location, Case Numbers and Citation;
c) Enhanced search feature, using the Unique Bulls Eye Application, by including "Exact words", "Any of these", "none of these" options.
d) Judicial “forward & backward reference”
The Taxsutra Database comes at a very special Annual Subscription price of 4200+ GST AND includes an annual license to the Taxsutra Library.
Taxsutra Database Bulletin: Rulings on TDS Proceedings, Sec.68 Addition, Expert's Views on Withholding Tax-Refund & More...
Issue No. 268 / Oct 20th, 2022
Dear Professionals,
We are glad to present to you the 268th edition of ‘Taxsutra Database Bulletin’, where we keep you updated with current trends in the tax arena!
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Expert Column
More frequently than not, we come across writ petitions challenging withholding of tax refund by the Revenue after processing of return. The issue is crucial given the mandate for revenue collection and on the other hand, the need for running the businesses smoothly. The legal battles against withholding of refund by the Revenue evolved differently with the insertion of Section 241A to put a check on Revenue's powers to withhold refund.
Mr. K. Senguttuvan (Partner, SAPAA Law Firm), Ms. S. Keerthana (Lead Associate) and Ms. S. Akarshana (Trainee Associate) discuss the development of the legal framework on withholding of refund - from the rigorous Section 143(1D) to a reasonable Section 241A. They analyse various rulings from different High Courts expounding on the necessity and significance of reasons to be recorded for withholding the refund and insufficiency in mere notice without proper reasons. They bring out the peculiarity of Delhi High Court judgment in Cooner Institute and remark that in the absence of compliance as per Section 241A, any blocking of refund would be bad in law and encouraging such practice would defeat the intention of law makers.
Click here to read the article, "Catching Missed Bus for Withholding Refund by Equity - Justifiable?"
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Key Takeaways from Handpicked Rulings
1) SC : Commission paid to non-resident agents not liable to TDS; Affirms HC order - SC dismisses Revenue's SLP against Bombay HC ruling that confirmed ITAT's order deleting the addition under Section 40(i)(ia) on account of TDS-default on the commission of paid to foreign agents; During AY 2010-11, Assessee-Company made payment in the nature of commission to non-resident agents; Revenue noted that payment was in the nature of commission were liable to tax deducted at source and since the Assessee failed to deduct the same, made disallowance of Rs. 5.07 Cr under Section 40(a)(ia) towards payment of commission to foreign agents; Similarly, Revenue also made a disallowance of Rs. 34.85 Cr under Section 40(a)(ia) for failure to deduct tax at source towards payment of demurrage to non-resident buyers of iron ore ……………..Click here to read and download SC order
2) SC: Remands HC order allowing unclaimed benefit of Sec.10(20) as erroneous - SC allows Revenue's SLP setting aside Rajasthan HC ruling which granted benefit under Section 10(20) to the Assessee, with a direction to consider the appeal afresh; Observes that Assessee never claimed the benefit of Section 10(20) and hence, HC erred in granting the benefit without adjudication of appeal on merits; Assessee- a statutory corporation, engaged in providing housing services claimed benefit of exemption under Section 11 and 12 but did not claimed deduction under Section 10(20) of the Act; Revenue denied the exemption under Section 11 and 12 on the ground that the activities carried out by the Assessee are not charitable in nature as per Section 13(8) read with Section 2(15) and accordingly, denied the exemption……………..Click here to read and download SC order
3) SC: Dismisses Revenue's SLP against SBI over taxability of NPA interest - SC dismisses Revenue's SLP against Rajasthan HC ruling wherein it was held that interest on non-performing assets ('NPA') not taxable on accrual basis in view of RBI norms relating to income recognition and assets classification; SC notes that Rajasthan HC relied on Gujarat HC ruling in Shri Mahila Sewa Sahakari wherein it was held that the banking company is not liable to pay tax on NPA interest on accrual basis in view of RBI norms and the provisions of Chapter IIIB of RBI Act have overriding effect qua other enactments including the Income Tax Act; Also noted that the coordinate bench dismissed Revenue's SLP against Shri Mahila Sewa Sahakari ruling on the ground that RBI Guidelines and relevant act restrains banking companies to recognise income from NPA on accrual basis; Accordingly, SC dismisses Revenue's SLP……………..Click here to read and download SC order
4) ITAT: Upholds Sec.68 addition basis Settlement Commission findings in related cases - ITAT dismisses Assessee's appeal, upholds CIT(A) order making addition under Section 68 on account of unexplained loan received by the Assessee from the lender company by relying on findings of Settlement Commission already on record in case of the related group of concerns; Also holds that Assessee was also involved in activity wherein unaccounted money was laundered and re-introduced in the garb of unsecured loan through bank accounts of creditors; For AY 2011-12, Revenue initiated reassessment proceedings in pursuance to search under Section 132 conducted at the premises of Radheshyam Agarwal Group with whom Assessee was connected alleging that Assessee received certain amount of Rs.1 Cr from Karnimata Commerce P. Ltd. (lender company) in form of loan whose genuineness and creditworthiness seems doubtful ………….Click here to download the ITAT order
5) ITAT: Assessee liable for Sec.201 proceedings prior to 2012 amendment, despite tax paid by payee - ITAT dismisses Assessee’s appeal, holds that the Assessee is not eligible to benefits under Section 201(1) as amended via insertion of a proviso vide finance Act, 2012 providing that if it is proved that the payee has paid the tax, then the Assessee who failed to deduct tax at source will not be deemed to be an Assessee in default, since the same is not applicable to the relevant AY 2009-10 and is applicable from July 1, 2012; Further opines the first proviso to Section 201(1) was further amended by Finance Act, 2019, with effect from Sep 1, 2019, to restrict the benefit under proviso to Section 201(1) to the resident payee only, thus upholds the assessment order holding Assessee to be Assessee in default under Section 201(1) for non-deduction of TDS on payment to non-residents under Section 195 and liable to interest under Section 201(1A); Assessee, for AY 2009-10, purchased a land property from four Non Resident Indians for a total consideration of Rs.2 Cr; Revenue noted that Assessee did not deduct tax under Section 195 on the said payment to non-residents, thus initiated proceedings under Section 201(1) holding Assessee to be Assessee in default and levied ……………. Click here to read download ITAT Order
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About Taxsutra Database!
“Taxsutra Database”, a true Income-tax research tool, is an archive of over119115+Income Tax Rulings reported across ITR, CTR, Taxman, DTR, ITD, TTJ, and ITR (Trib) and also includes recent ‘unreported handpicked rulings of SC, HC & ITAT’. It is a completely integrated service with the following features:
a) Comprehensive coverage of all latest cases powered by an advanced search engine to provide a seamless user experience;
b) Effective search results supported by active filters around Court Level, Location, Case Numbers and Citation;
c) Enhanced search feature, using the Unique Bulls Eye Application, by including "Exact words", "Any of these", "none of these" options.
d) Judicial “forward & backward reference”
The Taxsutra Database comes at a very special Annual Subscription price of 4200+ GST AND includes an annual license to the Taxsutra Library.
3) [TS-6446-HC-2021(MADRAS)-O]affirmed in[TS-6012-HC-2021(MADRAS)-O] on writ petition on the ground of availability of alternate remedy, onus is on the assessee to establish the genuinity of the transaction and the source of the investment.
1) ITAT : Services pertaining to leadership skills by non-resident, not FTS - ITAT allows Assessee's appeal and holds that sum paid to non-resident on account of services pertaining to training and developing leadership skills cannot be considered as fees for technical services within the meaning of Section 9(1)(vii) and not chargeable to tax in India; Assessee-company engaged in the business of rendering BPO services; During AY 2016-17, Assessee made payment to a Hong Kong based entity of USD2100 fee for training and developing soft skills and deducted tax at source under Section 195; Subsequently, Assessee filed appeal before CIT(A) under Section 248 and claimed refund of TDS paid on the ground that sum paid to non-resident was not taxable in the hands of non-resident in India as it does not have PE in India; CIT(A) dismissed the appeal on the ground that even though non-resident does not have PE in India but the sum paid by the Assessee pertains to training fees which fall within the ambit of Fee for Technical Service (FTS) and is taxable in India; Before ITAT, Assessee relies on coordinate bench ruling in Lloyds Register and contends that payment of training services does not amount to FTS under the Act; Also relies on ………….. Click here to read and download ITAT Order
2) ITAT: Accrued Interest on NPA for Coop Bank to be taxed in the year of recovery irrespective of accounting method - ITAT partly allows Assessee' appeal, holds that accrued interest on NPAs is to be taxed in the year of recovery irrespective of method of accounting Assessee follows as RBI guidelines does not distinguish between a banking company or cooperative society engaged in banking activities; Assessee is a co-operative society carrying on the business of banking activities including credit and deposit facilities; For AY 2013-14, Revenue made a disallowance of Rs. 6.36 Cr under Section 40(a)(ia) on account of deduction of tax at source on interest paid on various deposits; Revenue also made addition of Rs. 52.20 Lacs on account of accrued interest on NPA on the ground that Assessee follows mercantile system of accounting and the accrued interest on NPA should be taxed in the year under consideration; CIT(A) confirmed the disallowance of Rs.1.72 Cr out of disallowance of Rs.6.36 Cr made by Revenue which includes interest paid on saving bank accounts, compulsory deposits, recurring deposits and FDRs of non-members and also confirmed the addition of Rs.52.20 Lacs on account of accrued interest on NPA on the ground that Assessee is a NBFC and not a banking entity………….Click here to read and download ITAT Order
3) ITAT: Deletes Sec.40(a)(i) disallowance of reinsurance premium ceded to non-resident since not taxable in India - ITAT holds that Cholamandalam MS General Insurance (Assessee-company) is not liable to deduct tax at source under Section 195 on reinsurance premium ceded to non-resident reinsurer, as no income accrued or arose or deemed to accrue or arose in India, accordingly deletes disallowance under Section 40(a)(i); For the AYs 2005-06 to 2010-11, 2013-14 and 2014-15, Revenue disallowed reinsurance premium ceded by Assessee-company (A General Insurance company) to non-resident re-insurers (NRRI) under Section 40(a)(i) for non-deduction of tax under Section 195, holding that income of NRRI accrued/arose in India or deemed to have been accrued or arose in India, which was confirmed by CIT(A) except in cases where specific exclusion of reinsurance premium ceded to NRRIs was provided in DTAA between India and other countries; ITAT rejects Revenue’s reasoning to hold that income accrued/arose in India, explains that except for payment to Indian brokers in a few cases ……………. Click here to read and download ITAT Order
4) HC: Quashes reassessment notice for lack of sanction u/s 151 - HC allows Assessee’s writ petition holds the time to issue notice may have been extended by TOLA but that would not amount to amending the provisions of Section 151; HC set aside the notice issued u/s 148, rejects revenue reliance of TOLA, notes that relaxation Act provisions will not be applicable; Concludes that four years had expired from the end of the relevant assessment year, as provided u/s 151(1), it is only the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner who could have accorded the approval and not the Additional Commissioner of Income Tax…………….. Click here to read and download HC Judgment
5) HC: College providing training to bank officials & incidental services eligible as 'educational institutions' under Sec.10(23C)(vi) - HC allows Assessee's appeal and directs CCIT to consider Assessee's application for exemption under Section 10(23C)(vi); Holds that a training college providing incidental services pertaining to consultancy and assisting banking institutions in appraisal programmes would qualify for exemption under Section 10(23C)(vi) and the said incidental activities would also fall in the category of education; During AY 2014-15, Assessee submitted application seeking exemption under Section 10(23C)(vi); CCIT rejected the said application on the ground that the exemption under Section 10(23C)(vi) could only be granted to an entity engaged solely for educational purpose and Assessee's activities stipulated in memorandum involved assistance services to banking institutions in the matter as appraisal programmes, conducting morale, productivity studies and consultancy services and cannot be said to be meant solely for educational purpose; ITAT upheld the order of CCIT; Before HC, Assessee contends that an approval was sought from DDIT (Exemption) in the year 2008 to amend memorandum of association and the copy of the same was also furnished but no approval is granted till date; Also contends that its activities meant solely for education purposes and not for the purpose of profit and any surplus results incidental from activity carried on by it will not cease to be one existing solely for educational purpose; While Revenue contends that the if the objects clause were deleted in the amended memorandum of association, the same would have been a part of application seeking exemption under Section 10(23C)(vi) and accordingly. ………….. Click here to read and download HC Judgment
6) HC : Quashes reassessment initiated beyond 4 years based on audit objection as pre-condition not satisfied - HC allows Assessee's writ petition, holds that statutory pre-condition stipulated in proviso to Section 147 has to be complied before initiating reassessment proceedings beyond the period of 4 years from the end of the relevant AY and the burden cast upon the Revenue by virtue of the said proviso must be first discharged before availing benefit of the Explanation to Section 147; Assessee entered into a scheme of amalgamation duly approved by court and accordingly merged the assets and liabilities including method of accounting; During AY 2012-13, Assessee filed revised return declaring loss of Rs. 30.6 Cr under regular provisions and after making upward and downward adjustment set forth in Section 115JB including brought forward loss of Rs.30.65 Cr and depreciation of Rs.18.05 Cr computed the adjusted book profit as nil for the purpose of MAT provisions; Revenue rejected the income declared by Assesee and the methodology adopted for computation of book profit and also added expenses attributable to exempt income which lead to increase in taxable book profit for the purpose of Section 115JB;…………Observes that there is no dispute with regard to disclosure of all material including computation of tax under provisions of MAT made by Assessee during the original assessment and there is no allegation in the reasons itself to the effect that there is any incomplete disclosure or false statement made at the time of assessment which justify the assumption of jursidction beyond 4 years; Remarked that "the reasons proceed on the basis that the methodology for computation is errorenous which premise, as noticed earlier, does not appear to be correct as the financials disclose the availability of depreciation. In such circumstances, the assumption of jurisdiction under Section 147 is held to be bad in law"; Also observes that reassessment proceedings initiated by Revenue merely on the basis of audit objection and without satisfying the requirement of independent 'reason to believe' that income has escaped assessment is bad in law; Accordingly, allows Assessee's Writ Petition and quashed reassessment proceedings….……….. Click here to read and download HC Judgment
7)ITAT: Assessment made by relying on Sec.132(4) statements, on standalone basis, not sustainable - ITAT holds that statements recorded during the course of search cannot be used on a standalone basis to make additions in the post-search assessments; ITAT deletes additions made in the post-search assessments for AYs 2008-09 to 2010-11 and 2012-13 as an addition made on ad hoc basis where the assessment had attained finality and were not abated by virtue of Section 153A; Finds that the additions were not based on any incriminating material found during the course of search proceedings, but only on the statements of key persons recorded during the course of search; Remits the matter pertaining to AYs 2011-12, 2013-14 and 2014-15 back to Revenue with a direction to decide the matter afresh after considering the additional evidences admitted in the present case; Assessee-Individual, a proprietor and a director of few companies ………….. Click here to read and download ITAT Order
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About Taxsutra Database!
“Taxsutra Database”, a true Income-tax research tool, is an archive of over118680+ Income Tax Rulings reported across ITR, CTR, Taxman, DTR, ITD, TTJ, and ITR (Trib) and also includes recent ‘unreported handpicked rulings of SC, HC & ITAT’. It is a completely integrated service with the following features:
a) Comprehensive coverage of all latest cases powered by an advanced search engine to provide a seamless user experience;
b) Effective search results supported by active filters around Court Level, Location, Case Numbers and Citation;
c) Enhanced search feature, using the Unique Bulls Eye Application, by including "Exact words", "Any of these", "none of these" options.
d) Judicial “forward & backward reference”
The Taxsutra Database comes at a very special Annual Subscription price of 4200+ GST AND includes an annual license to the Taxsutra Library.
Taxsutra Database Bulletin: Expert's views on Search & Seizure, Rulings on bogus loans, post-search assessment & more...
Issue No. 266 / Aug 26th, 2022
Dear Professionals,
We are glad to present to you the 266th edition of ‘Taxsutra Database Bulletin’, where we keep you updated with current trends in the tax arena!
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Expert Column
Mr. S. Ramanujam (Chartered Accountant) in this article analyses the recent Madras HC ruling on various questions pertaining to search and seizure. The author is of the view that with searches becoming frequent nowadays and covered extensively by the media, it is pertinent that the taxpayers are aware of their rights. He shares his views on various aspects of the judgment that upheld the constitutionality of retrospective amendments made in the search and seizure regime. He also throws light on observations made by the Court while remanding the matter back to the Revenue on validity of search warrant, purpose of special audit etc.
1) ITAT: Non-existence of lenders, clear indication of loan being prima facie bogus - ITAT allows Revenue's appeal, sets aside CIT(A) order and remands back the issue to AO to identity, creditworthiness and genuineness of the transaction; ITAT notes that the persons who have given loan are not present at their address which clearly shows the lack of genuineness of the transactions and receipt of the amount in their bank accounts immediately before giving the loans further cast doubt of the creditworthiness; Before the ITAT, Revenue submitted that this is a classic case of routing of unaccounted money in circuitous manner and merely a transaction having been routed through a banking channel does not prove that the transaction is sacrosanct; The Unavailability of the parties is a clear sign of the transactions not being genuine; ITAT observes that CIT(A) has observed ………………………..Click here to read download ITAT Order
2) ITAT: The word "assess" in section 153A of the Act is relatable to abated proceedings (i.e., those pending on the date of search) and the word "reassess" to completed assessment proceedings - ITAT holds that a completed assessments can be interfered by the AO while making the assessment u/s 153A of the Act only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment; ITAT further holds that in so far as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment u/s 153A merges into one and only………………………..Click here to read download ITAT Order
3) HC: Admits Revenue's appeal on whether royalty paid for minerals is 'tax' for Sec.43B - Bombay HC admits Revenue's appeal on whether royalty payable on mineral extraction is in the nature of tax for the purpose of Section 43B of the Act; Observes that the issue pertaining to nature of royalty is pending for reference to SC bench of nine judges, thus, the Revenue's appeal requires admission; Assessee-Company, engaged in the business of mining, processing and sale of mineral ore was subjected to disallowance of the unpaid amount of royalty by invoking Section 43B and treating royalty payment as "Tax" falling within the scope of the said section; CIT(A) upheld the disallowance and relied on Shanti Saroop ruling wherein it was held that royalty is not a payment of the nature covered within the meaning of Section 43B and observed that royalty is more akin to rent or compensation payable to an owner by the occupier or lessee of land for its use or exploitation of the resources; ITAT relied on SC ruling in Kesoram Industries wherein it was held that royalty is not tax and observed that royalty could not be disallowed under Section 43B of the Act.………………………. Click here to read and download HC admission copy
4) HC : Set aside Sec.148A(d) order, directs Revenue to reconsider Assessee's reply - HC sets aside order under Section 148A(d) and directs Revenue to reconsider the reply of Assessee in pursuance to show cause notice under Section 148A(b) and material placed before it; Also directs Revenue to pass appropriate order under Section 148A(d) by assigning valid reasons to show that it is fit case to issue or not to issue notice under Section 148; Holds that order under Section 148(d) cannot be passed in a mechanical manner without appreciating material available on record and reply of the Assessee; show cause notice was served upon to the Assessee alleging income escaped assessment on ground that alleged bogus transactions with a company were not disclosed in the return of income; Assessee filed reply and explained the nature of alleged transactions and contended that the alleged transactions were duly reflected in return of income; Revenue rejected the objections of the Assessee and held that the case is fit for issuance of notice under Section 148 of the Act, accordingly passed order under Section 148A(d); Before HC, Assessee contended that the order under Section 148A(d) is passed in a mechanical manner without application of mind; Also contended that Revenue did not considered the material placed before it or the averments made in reply to show cause notice and order under Section 148A(d) is passed without assigning any appropriate reason; While, Revenue contended that order under Section 148A(d) is passed after considering the material placed before it by the Assessee and the present case is only at the stage of initation of enquiry as to whether income has escaped assessment ………………………..Click here to read download HC Order
5) HC : Sets aside Sec.148A(d) order passed without considering objections; Directs Revenue to apply its mind - Gujarat HC sets aside the order under Section 148A(d) and directs Revenue to apply its mind and pass an appropriate order dealing with all the objections raised by the Assessee in pursuance to show cause notice under Section 148A(b) of the Act; Holds that there is an obligation cast upon the Revenue in accordance with Section 148A(d) to consider the case not only on the basis available of the materials on record, but also the reply of the Assessee; Assessee-Individual was served with a show cause notice for AY 2018-19 alleging escapement of income on account of non-disclosure of transactions of Rs.180 Cr with respect to accounts in Social Cooperative Bank; Assessee denied the allegation on the ground that one bank account in which transaction of Rs.66 Cr was carried belong to the HUF, the alleged transactions carried out cannot be assessed in the hands of the Assessee in his individual capacity and the other bank account in which transaction of Rs.101 Cr was related to the business of the Assessee carried out in its proprietary concern "Shree Trading Co.' and the same was reflected in the books of the proprietary concern along with the return of income; Revenue rejected Assessee's submission on the ground that requisite documentary evidences were not submitted and accordingly passed order under Section 148A(d) and considered alleged transactions being unexplained and ………………………..Click here to read download HC Order
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About Taxsutra Database!
“Taxsutra Database”, a true Income-tax research tool, is an archive of over118600+ Income Tax Rulings reported across ITR, CTR, Taxman, DTR, ITD, TTJ, and ITR (Trib) and also includes recent ‘unreported handpicked rulings of SC, HC & ITAT’. It is a completely integrated service with the following features:
a) Comprehensive coverage of all latest cases powered by an advanced search engine to provide a seamless user experience;
b) Effective search results supported by active filters around Court Level, Location, Case Numbers and Citation;
c) Enhanced search feature, using the Unique Bulls Eye Application, by including "Exact words", "Any of these", "none of these" options.
d) Judicial “forward & backward reference”
The Taxsutra Database comes at a very special Annual Subscription price of 4200+ GST AND includes an annual license to the Taxsutra Library.
Mr. Prashant Upadhyay and Mr. Varun Fitter (Partners, Shah Mehta & Bakshi, Chartered Accountants) elaborate on various advantages entailed in filing an Updated Return from the perspective of income-tax and GST laws. The authors discuss the implications of filing an Updated Return on penalty and prosecution related provisions. They also explain how the income-tax and GST bill can drastically go down on filing of Updated Return. Given the legal framework on exchange of information, the authors are of the view that an Updated Return can save tax payers from legal battles under PF, ESI, labour welfare laws too.
Mr. K. Senguttuvan (Partner, SAPAA Law Firm), Ms. S. Keerthana (Lead Associate) and Ms. S. Akarshana (Trainee Associate) discuss the development of the legal framework on withholding of refund - from the rigorous Section 143(1D) to a reasonable Section 241A. They analyse various rulings from different High Courts expounding on the necessity and significance of reasons to be recorded for withholding the refund and insufficiency in mere notice without proper reasons. They bring out the peculiarity of Delhi High Court judgment in Cooner Institute and remark that in the absence of compliance as per Section 241A, any blocking of refund would be bad in law and encouraging such practice would defeat the intention of law makers. 
Mr. S. Ramanujam (Chartered Accountant) in this article analyses the recent