Inapplicability Of MOOWR Scheme On Solar Power Generating Units: Delhi High Court Says No Coercive Action

Case Title: ACME Heergarh Powertech Private Limited vs. Central Board of Indirect Taxes and Customs and Anr.

The Delhi High Court bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju issued notice and restrained the customs officer from taking any coercive action against the petitioners assailing the legality of Board Instruction No. 13/2022 dated 9.07.2022. The instruction was issued by the CBIC with regards to the inapplicability of the Manufacturing and Other Operations in Warehouse (no. 2) Regulations, 2019 (MOOWR Scheme) on solar power generating units.

Failure To File Income Tax Return | Prosecution U/S 276CC IT Act Not Permissible Without Previous Sanction Of Appropriate Authority: Delhi High Court

Case Title: Vipul Aggarwal versus Income Tax Office

The Delhi High Court has made it clear that a person cannot be prosecuted for the offence under Section 276-CC (Failure to furnish returns of income) of the Income Tax Act, except with the previous sanction of the Principal Commissioner/appropriate authority.

A single judge bench of Justice Asha Menon held, "Since the law provides that without sanction u/s 278B of the IT Act, the Department cannot proceed against a person found liable to prosecute him for the offence under Section 276 CC of the IT Act, the present prosecution must fail qua the petitioner. In the absence of a specific sanction for prosecuting the petitioner, the learned ACMM could not have taken cognizance of the complaint against him and then framed charges against him. The edifice built without foundation must crumble."

Explanation To Section 14A Of Income Tax Act Will Not Apply Retrospectively: Delhi High Court

The Delhi High Court has ruled that the Explanation to Section 14A of the Income Tax Act, 1961, added vide the Finance Act, 2022, cannot be presumed to be retrospective in nature since it is clarificatory in nature and alters the law as it stood earlier.

The Division Bench of Justices Manmohan and Manmeet Pritam Singh Arora held that in view of the law laid down by the Supreme Court in Sedco Forex International Drill. Inc. versus CIT (2005), the amendment to Section 14A, which is "for removal of doubts", cannot be presumed to be retrospective, even if such a language is used, since it alters and changes the law as it prevailed before.

No Section 40(a)(ia) Disallowance In Case Of Short Deduction Of TDS: Delhi High Court

Case Title: Pr. Commissioner of Income Tax-I Versus Future First Info. Services Pvt. Ltd.

Citation: 2022 LiveLaw (Del) 696

The Delhi High Court has held that no disallowance under Section 40 (a)(ia) of the Income Tax Act is called for in the case of a short deduction of TDS and the correct course of action would have been to invoke Section 201 of the Income Tax Act.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that disallowance under section 40A(2)(b) has to be based on cogent material or reasoning by the Assessing Officer.

Bombay High Court

Case Title: Vodafone Idea Limited versus UOI and Ors.

The Bombay High Court has ruled that the international Inbound Roaming Services (IIR) and the International Long Distance (ILD) Services provided by Vodafone Idea to Foreign Telecom Operators (FTOs) is an export of services, and thus, Vodafone Idea is eligible for the refund of the IGST paid by it.

The Bench, consisting of Justices K. R. Shriram and Milind N. Jadhav, observed that Vodafone Idea had entered into agreements with the FTOs and that there was no mention of any agreement with the subscribers of the FTOs. Hence, the Court ruled that the subscribers of the FTO cannot be considered as the recipient of the services and that the said services rendered by Vodafone Idea were supplied to the FTOs.

Karnataka High Court

Case Title: M/s. Noorani Properties (P) Ltd. versus The Commissioner of Wealth Tax and Anr.

The Karnataka High Court has set aside the order passed by the ITAT holding that the assessee was liable to pay Wealth Tax with respect to a property, despite transferring possession of the said property to a developer under a Joint Development Agreement.

The Bench, consisting of Justices P.S. Dinesh Kumar and Anant Ramanath Hegde, observed that the developer had physically obtained possession of the property and that under the Development Agreement, the developer had the power to alienate its portion of the property. Hence, the Court ruled that the order of the ITAT upholding the liability of the assessee to pay Wealth Tax on the said property cannot be sustained.

Case Title: M/s. D.P.J. Bidar-Chincholi (Annuity) Road Project Pvt Ltd.

The Karnataka High Court has quashed the circular issued by the Central Board of Indirect and Customs (CBIC) clarifying that GST is not exempt on the annuity (deferred payments) paid for the construction of roads and allowed the Writ Petition filed by the petitioner.

The single bench of Justice M.I. Arun observed that a circular which clarifies the notification cannot have the effect of overruling the notification.

Calcutta High Court

Case Title: PCIT Versus Sreeleathers

The Calcutta High Court has held that the income tax department cannot unreasonably reject proof submitted by the assessee.

The division bench of Justice T.S. Sivagnanam and Justice Bivas Pattanayak noted that the assessing officer brushed aside the explanation offered by the assessee by stating that merely filing PAN details and a balance sheet does not absolve the assessee from his responsibilities of proving the nature of transactions.

Case Title: Purulia Metal Casting Pvt. Ltd. Versus Assistant Commissioner of State Tax, Purulia Charge & Ors.

The Calcutta High Court bench of Justice Md. Nizamuddin has held that the right to file a statutory appeal is mandatory before initiating any recovery proceeding.

Allahabad High Court

Case Title: M/S Ram Krishna Garg Supplier Versus State Of U.P. And 4 Others WRIT TAX No. - 1064 of 2021

Citation: 2022 LiveLaw (AB) 329

The Allahabad High Court has held that the show cause notice cancelling registration must indicate the reason and the mere mentioning of violation under the CGST Act is not sufficient.

The single bench of Justice Saumitra Dayal Singh has observed that cancellation of registration has the most serious civil consequences. While Section 29(1) of the CGST Act provides for specific grounds for cancellation with effect from the date of the occurrence of certain events, Section 29(2) provides for harsher consequences, including cancellation of registration with a retrospective date. However, a registration may not be cancelled on the mere whims and fancies of the proper officer. It may be cancelled if the registered person contravenes any provision of the Act or Rule or if the person does not furnish returns for three tax periods consecutively or does not furnish returns for six months continuously. The registration can be cancelled if he does not commence business within six months of the grant of registration or he is found to have obtained registration by means of fraud, wilful misstatement, or suppression of facts.

ITAT

Case Title: DCIT Versus M/s. Cummins Sales & Services (I) Ltd.

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) consisting of S.S. Vishwanethra Ravi (Judicial Member) and Inturi Rama Rao (Accountant Member) has held that the benefit of section 72A of the Companies Act, 1956 cannot be availed if the sole idea of the amalgamation was only to avail the benefit of carried forward business losses and unabsorbed depreciation losses as it is not for genuine purpose.

Case Title: M/s. Bigfoot Retail Solution Pvt. Ltd. Versus ACIT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the disallowance on the grounds that the usage of telephone/internet is done for official purposes only.

The two-member bench of Astha Chandra (Judicial Member) and Anil Chaturvedi (Accountant Member) held that all telephones are either installed at office premises or used by officers and employees of the assessee company and usage of telephones and internet is done by employees for official purposes only. The expenses were incurred in the course of business of the assessee company and were not in the nature of personal expenditure.

Case Title: State Bank of India versus The Income Tax Officer

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT)has refused to condone the delay in filing the appeal on the grounds that even during the period of COVID-19, the ITAT was functioning and banking facilities were provided by the State Bank of India (SBI).

The two-member bench of George George K. (Judicial Member) and Laxmi Prasad Sahu (Accountant Member) has observed that the assessee must be well aware of the tax implications. It is the duty of the responsible officer to comply with the notices. The bank's books of accounts are audited by the CA along with the internal auditors. The assessee cannot escape by giving the reason merely as a change of branch manager.

Case Title: AGM Properties P. Ltd. Versus ACIT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that completed assessments could be interfered with by the AO while making an assessment under section 153A only on the basis of some incriminating material unearthed during the course of search. If in relation to any assessment year, no incriminating material was found, no addition or disallowance could be made in relation to that assessment year in the exercise of powers under section 153A of the Income Tax Act.

The two-member bench of Astha Chandra (Judicial Member) and Anil Chaturvedi (Accountant Member) has observed that the assessment for AY 2013-14 was already completed prior to the date of search. The scope of proceedings under section 153A had to be confined only to material found in the course of the search.

Case Title: Karamvir Versus Income Tax Officer, Ward-2(2)

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT)consisting of Saktijit Dey (Judicial Member) and B.R.R. Kumar (Accountant Member) has held that the agricultural land purchased by the assessee in the name of his wife is not eligible for deduction under section 54B of the Income Tax Act.

CESTAT

Case Title: M/s Amba River Coke Ltd. Versus Principal Commissioner of Customs (Preventive)

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the benefit of exemption from payment of countervailing duty (CVD) on the grounds that the process of crushing and screening of iron ore is classified as iron ore fines.

The two-member bench headed by Justice Dilip Gupta (President) and C.J. Mathew (Technical Member) has held that iron ore concentrate refers to an ore that has been subjected to special processes for removal of all or part of the foreign matter, i.e., gangue contained in the ore, with which it naturally occurs.

AAR

Applicant's Name: Myntra Designs Private Limited

The Karnataka Authority of Advance Ruling (AAR) consisting of M.P.Ravi Prasad and T.KIran Reddy has ruled that the sale of internet advertising space (except on commission) is eligible for 18% GST.

AAAR

Appellant's Name: KPH Dream Cricket Private Limited

The Punjab Appellate Authority of Advance Ruling (AAAR)has ruled that the GST is payable on the activity of providing free complimentary cricket match tickets. However, where complimentary tickets are being provided by the appellant to a related person or a distinct person, it shall fall within the ambit of supply on account of Schedule I and the appellant would be liable to pay tax.

The bench of Aruna Narayan Gupta and Kamal Kishor Yadav has observed that the appellant would not be eligible to avail input tax credit in relation to the activity of providing free complimentary cricket match tickets. However, if an activity or transaction is treated as a supply because it is provided by the appellant to a related or distinct person, the appellant is entitled to the input tax credit.