Budget Highlights (Key Features) 2015-2016

 

Section 11A, read with sections 5A and 11AC, of the Central Excise Act, 1944, sections 73 and 78 of the Finance Act, 1994

Excise & Customs : Question of suppression of material facts is germane to both issues i.e., invocation of extended period of limitation and levy of penalty; hence, Tribunal order upholding extended period while setting aside penalty was remanded back
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[2015] 54 taxmann.com 95 (Punjab & Haryana)
HIGH COURT OF PUNJAB AND HARYANA
Universal Timber Corporation
v.
Commissioner of Central Excise, Panchkula*
RAJIVE BHALLA AND B.S. WALIA, JJ.
CENTRAL EXCISE APPEAL NOS. 59,63 AND 70 OF 2014†
DECEMBER  9, 2014
Section 11A, read with sections 5A and 11AC, of the Central Excise Act, 1944, sections 73 and 78 of the Finance Act, 1994 and Section 28 and 114A of the Customs Act, 1962 - Recovery - Of duty or tax not levied/paid or short-levied/paid or erroneously refunded - Invocation of Extended Period of Limitation - Assessee claimed exemption and informed department about it - Department found that assessee was not eligible for exemption and denied same invoking extended period and also levied penalty - Tribunal upheld extended period but set aside penalty on ground that there was no suppression of facts - Assessee argued that since Tribunal recorded positive finding about no suppression of facts, extended period could not also be invoked - Department argued that since extended period was upheld and since there was suppression, penalty should be levied - HELD : While setting aside penalty, Tribunal recorded a positive finding that there is no suppression of relevant facts - Question of suppression of material facts is germane to both issues i.e., assumption of jurisdiction by Assessing Authority to re-assess and penalty - Having held that there is no suppression of material facts while deciding question of penalty, Tribunal was required to apply this finding to legality of assumption of jurisdiction to re-assess duty - In view of contradiction, matter was remanded back to Tribunal for adjudication afresh [Paras 7 to 9] [Matter remanded]

Section 42 of the Odisha Value Added Tax Act, 2004 - Assessment - Audit assessment

CST & VAT: Odisha VAT - Where Competent Authority conducted audit at business premises of assessee and submitted Audit Visit Report to Assessing Authority on 12-12-2006 and Assessing Authority issued on assessee a notice dated 23-8-2007 and later he passed assessment order under section 42 on 18-6-2008, order of assessment was barred by limitation
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[2015] 54 taxmann.com 36 (Orissa)
HIGH COURT OF ORISSA
Chandrika Sao
v.
Sales Tax Officer, Balasore, Range, Balasore*
I. MAHANTY AND B.N. MAHAPATRA, JJ.
W.P. (C) NO. 165 OF 2009
NOVEMBER  26, 2014
Section 42 of the Odisha Value Added Tax Act, 2004 - Assessment - Audit assessment - Period 1-4-2005 to 30-11-2006 - Competent Authority after conducting audit at business premises of assessee for tax period 1-4-2005 to 30-11-2006 submitted Audit Visit Report to Assessing Authority on 12-12-2006 for completion of audit assessment under section 42 - Assessing Authority issued on assessee a notice dated 23-8-2007 enclosing Audit Visit Report - Thereafter Assessing Authority passed assessment order under section 42 on 18-6-2008 - Whether in view of provisions of section 42, order of assessment was clearly barred by limitation - Held, yes [Para 10][In favour of assessee]

Section 28(i), read with section 56, of the Income-tax Act, 1961 - Business income

IT : Where a company was permitted to commercially exploit property belonging to assessee and to use facilities thereon supplied by assessee, income received by assessee would constitute its business income
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[2015] 54 taxmann.com 20 (Karnataka)
HIGH COURT OF KARNATAKA
Black Pearl Hotels (P.) Ltd.
v.
Deputy Commissioner of Income-tax, Circle-11(1) Bangalore*
N. KUMAR AND B. MANOHAR, JJ.
IT APPEAL NO. 8 OF 2009†
OCTOBER  14, 2014
Section 28(i), read with section 56, of the Income-tax Act, 1961 - Business income - Chargeable as (Lease rent) - Assessment year 2002-03 - Whether where assessee was in business of taking land, putting up commercial buildings thereon and letting-out such building with all furniture, notwithstanding fact that assessee had constructed building and also provided other facilities and there were two separate rental deeds, for two types of activities, income received by assessee would not fall within heading of 'Income from House Property' - Held, yes [Para 8] [In favour of assessee]

Section 145 of the Income-tax Act, 1961 - Method of accounting - Estimation of income

IT: Where Tribunal without assigning any cogent reasons reversed finding of Commissioner (Appeals) that revenue had not produced material in support of its claim that assessee had shown lesser gross profit, matter was to be re-adjudicated
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[2015] 54 taxmann.com 59 (Gujarat)
HIGH COURT OF GUJARAT
Bhaktiprasad Nagori Timber & Plywood (P.) Ltd.
v.
Assistant Commissioner of Income-tax*
K.S. JHAVERI AND K.J. THAKER, JJ.
TAX APPEAL NO. 122 OF 2001†
DECEMBER  1, 2014
Section 145 of the Income-tax Act, 1961 - Method of accounting - Estimation of income (Gross profit) - Assessing Officer noticed that assessee claimed lesser gross profit as compared to its books of account and accordingly, made addition - Commissioner (Appeals) deleted addition on ground that revenue had not produced any relevant material in support of its claim - Whether where Tribunal reversed said findings of Commissioner (Appeals) without assigning cogent reasons, matter was to be remanded back - Held, yes [Para 7][In favour of assessee/Matter remanded]

Section 283 of the Companies Act, 2013/section 456 of the Companies Act, 1956

CL: Where while recalling order of winding up at instance of respondents, Court had directed respondents to pay charges for security of assets of respondent company by way of reimbursement to official liquidator, respondents by not reimbursing expenses were in palpable non-compliance and consequent compounded contempt of order of Court
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[2015] 54 taxmann.com 105 (Rajasthan)
HIGH COURT OF RAJASTHAN
Official Liquidator
v.
Charanjit Pal Jindal
ALOK SHARMA, J.
SB CO. APPLICATION NOS. 84 OF 2005 & 28 OF 2013
DECEMBER  12, 2014
Section 283 of the Companies Act, 2013/section 456 of the Companies Act, 1956 read with rule 9 of the Company (Court) Rules, 1959 - Winding up - Custody of company’s properties - An order for winding up of respondent company had been passed - Court recalled order of winding up at instance of respondents and directed that during pendency of reference before BIFR, assets of company shall remain in custody of official liquidator and expenses incurred in regard there-to towards security etc., would be borne by respondents - Respondents initially paid security expenses incurred by official liquidator, however, after certain time, in-spite of repeated reminders they did not pay due amount - They contended that material lying in premises of property had been stolen and wasted and properties were found to be in a reprehensible state and thus official liquidator was not entitled to claim reimbursement of expenses for safeguarding of company property - Whether since issue of official liquidator being responsible for 'loss' of 'material' of company from its two sites was sought to be generated on vague assertions without any semblance of specifics, respondents were in palpable non-compliance and consequent compounded contempt of order of Court and thus liable to pay outstanding amount to official liquidator - Held, yes [Paras 12, 13 & 14]

Delay need not be explained date-wise/mechanically reasons advanced for delay should evince bona fides

Excise & Customs : While considering application seeking condonation of delay, application cannot be asked as to what transpired during original time-limit i.e. from receipt of order till due date; appellate authority can only seek explanation of delay from due date till date of actual filing of appeal
Excise & Customs : Delay need not be explained date-wise/mechanically; reasons advanced for delay should evince bona fides and should be sufficient to warrant condonation
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[2014] 51 taxmann.com 329 (Calcutta)
HIGH COURT OF CALCUTTA
Universal Paper Mills Ltd.
v.
Commissioner of Central Excise, Haldia Commissionerate*
INDIRA BANERJEE AND ANINDITA ROY SARASWATI, JJ.
CEXA NO. 10 OF 2013†
GA NO. 1673 OF 2013
JULY  24, 2013
Section 35B of the Central Excise Act, 1944 read with section 86 of the Finance Act, 1994 and section 129A of the Customs Act, 1962 - Appeals - Condonation of Delay - Appellate Tribunal - Assessee received order of Commissioner (Appeals) on 29-10-2009 and filed appeal thereagainst on 26-5-2010, as against due date of 29-1-2010 - Assessee claimed that since its factory was usurped by rival shareholder groups in January 2010, it came to know of said order in April 2010 and sought condonation of delay - Tribunal denied condonation on ground that assessee could not explain what transpired during original time-limit from 29-10-2009 to January 2010 - Assessee argued that Tribunal could not ask what transpired between original time-limit from 29-10-2009 to 29-1-2010; Tribunal can only seek explanation of delay viz. from 30-1-2010 to 26-5-2010 - HELD : Assessee was required to explain delay from 29-1-2010 onwards and not from 29-10-2009 onwards - Delay need not be explained date-wise/mechanically; reasons advanced for delay should evince bona fides and should be sufficient to warrant condonation - Tribunal should have taken note of consequences of usurpation of an office and consequential misplacement of records and files - Hence, matter was remanded back to consider explanation of delay only from 29-1-2010 onwards [Paras 18 to 24] [In favour of assessee]
Circulars and Notifications : Notification No.67/95-CE dated 16-3-1995

Filing of applications for rectification of mistakes before Tribunal

Service Tax : In view of section 86, of Finance Act, 1994, section 35C, of Central Excise Act, 1944 dealing with filing of applications for rectification of mistakes before Tribunal, is applicable to service tax; hence, such applications are maintainable under service tax as well
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[2014] 51 taxmann.com 442 (Madras)
HIGH COURT OF MADRAS
Fairline Worldwide Express
v.
Commissioner of Central Excise, Pondicherry*
D. MURUGESAN AND N. KIRUBAKARAN, JJ.
C.M.A. NO. 3302 OF 2011†
DECEMBER  8, 2011
Section 86, read with section 65(33), of the Finance Act, 1994, Rule 3 of the Export of Services Rules, 2005, section 35C of the Central Excise Act, 1944 and section 129B of the Customs Act, 1962 - Appeals - Rectification of Mistakes/Review - Appellate Tribunal - Period from 15-3-2005 to 15-6-2005 - Assessee, a courier agency, provided services in relation to delivery of documents outside India and claimed that it was export of service - Tribunal held in favour of revenue relying upon provisions of rule 3(2) of Export of Services Rules, 2005, as amended from 16-6-2005 - Assessee filed an application before Tribunal for rectification of mistake on ground that since period involved was prior to 16-6-2005, law amended with effect from 16-6-2005 could not be applied - Tribunal held that there is no provision for application for rectification of mistake under service tax law - HELD : In view of section 86, section 35C of Central Excise Act, 1944 dealing with filing of applications for rectification of mistakes before Tribunal, is applicable to service tax - Hence, matter was remanded back to Tribunal for disposal of application on merits [Paras 6 to 9] [In favour of assessee]

Section 11, read with section 13, of the Income-tax Act, 1961 - Charitable or religious trust

IT : Where will in question, transferring shares in a foreign company in favour of trust, was under legal dispute, there was no violation of section 11(5)
IT : Advance paid for raising a memorial by trust could not be treated as an investment covered under section 11(5)
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[2014] 52 taxmann.com 98 (Delhi)
HIGH COURT OF DELHI
Director of Income-tax (Exemption)
v.
Khetri Trust*
SANJIV KHANNA AND V. KAMESWAR RAO, JJ.
IT APPEAL NO. 162 OF 2001†
JULY  17, 2014
Section 11, read with section 13, of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under (Investment under section 11(5)) - Assessment year 1991-92 - One 'R' by a will bequeathed his entire property including shares in a foreign country to assessee-trust - However, said will of 'R' was under challenge in probate proceeding and same was pending adjudication - Commissioner (Appeals) held that there was no violation of section 11(5) as till will was probated and it was affirmed that will was genuine, trust would not acquire legal right on foreign shares - Whether there was no infirmity in impugned order - Held, yes [Paras 6,9 and 10] [In favour of assessee]
Section 11, read with section 13, of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under (Investment under section 11(5)) - Assessment year 1991-92 - Assessee trust paid a sum as advance to 'B' company for raising a memorial of a person - Said project, however, was not completed because of ongoing legal dispute - Appellate authorities held that since intent and purpose behind said payment was not investment, there was no violation of section 11(5) - Whether there was no infirmity in impugned order - Held, yes [Paras 7 and 10] [In favour of assessee]
Rohit Madan and P. Roychaudhuri, Advocates for the Appellant. Piyush Kaushik, Advocate for the Respondent.

Section 54, read with sections 50 and 51, of the Uttar Pradesh Value Added Tax Act, 2008

section 54(1)(14) on ground that column No. 6 of Form No. 38 was not filled up and Tribunal after recording a finding that there was no intention of assessee to evade payment of tax deleted penalty, order of Tribunal could not be interfered with, unless finding was perverse
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[2014] 52 taxmann.com 212 (Allahabad)
HIGH COURT OF ALLAHABAD
Commissioner of Commercial Tax
v.
Dabur India Ltd.*
SURYA PRAKASH KESARWANI, J.
SALES/ TRADE TAX REVISION NO. 441 OF 2014
STRE NOS. 442 TO 445, 447, 448, 450
451, 453, 455, 463 TO 465, 467
507 TO 509 OF 2014
SEPTEMBER  25, 2014
Section 54, read with sections 50 and 51, of the Uttar Pradesh Value Added Tax Act, 2008 and rules 54, 55 and 56 of the Uttar Pradesh Value Added Tax Rules, 2008 - Offences and penalties - Whether non filling up of column No. 6 of Form No. 38 cannot be sole ground to impose penalty under section 54(1)(14) - Held, yes - Assessing Authority had imposed penalty upon assessee under section 54(1)(14) on ground that column No. 6 of Form 38 accompanied with goods under transport was not filled up and left blank - Tribunal after recording a finding that there was no intention of assessee to evade payment of tax deleted penalty - Whether order of Tribunal could not be interfered with, unless finding was perverse or it was based on consideration of irrelevant material or non consideration of relevant material - Held, yes [Para 15] [In favour of revenue]

Section 241, read with sections 242, 100, 101 and 169 of the Companies Act, 2013/Section 397

CL: Where number of litigations involving petitioner and his Group were continuing before BIFR, AAIFR and other Courts/Forums, removal of petitioner and other directors of his Group from directorship and appointment of 2 new directors from respondents Group had resulted in creation of new majority in management of respondent No. 1 Company which was oppressive in terms of section 397
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[2014] 51 taxmann.com 322 (CLB - New Delhi)
COMPANY LAW BOARD, NEW DELHI BENCH
Vijay Julka
v.
Supriya Pharmaceuticals Ltd.
DHAN RAJ, MEMBER
C. P. NO. 99 (ND) OF 2013
AUGUST  25, 2014
Section 241, read with sections 242, 100, 101 and 169 of the Companies Act, 2013/Section 397, read with sections 398, 402, 169, 171, 172 & 284 of the Companies Act, 1956 - Oppression and mismanagement - Petitioners alleged that EGMs were convened by respondent Nos. 2 to 4 without following statutory procedure laid down in Act and resolutions passed by respondents for removing petitioner and other directors from directorship of respondent No. 1 Company were in contravention of section 284 - Whether in absence of notice of EGMs to petitioner and his Group directors, they did not get liberty to make their representations before shareholders in said EGMs and hence, provisions of section 284 were not duly complied with - Held, yes - Whether petitioner was one of two promoters of respondent No. 1 Company and number of litigations involving petitioner and his Group were continuing before BIFR, AAIFR and other Courts/Forums, therefore, removal of petitioner and other directors of his Group and appointment of 2 new directors from respondents Group had resulted in creation of new majority in management of respondent No. 1 Company and hence, this act was oppressive in terms of section 397 - Held, yes [Para 7.4]