Income Tax Law Updates:
Hon’ble MP High Court held that the Division bench of Madhya Pradesh High Court was considering department’s appeal when ITAT had given relief to the assessee by holding that there could not have been penalty u/s 271(1)(c) in respect of an amount of Rs 5.18 crores which was claimed as capital receipt while filing return of income but was not accepted till high court level and was adjudicated to be revenue receipt. The High court accepting arguments of the assessee that this is a debatable issue and adjudicated it, therefore, it cannot be held that the assessee concealed the particular of the income.
Hon’ble Supreme Court held that the order passed by the CIT(A) has rightly held that the obligation of deducting tax is distinct from payment of tax. The appellant cannot claim ignorance about the travel plans of its employees as during settlement of LTC Bills the complete facts are available before the assessee about the details of their employees’ travels. Therefore, it cannot be a case of bonafide mistake, as all the relevant facts were before the Assessee employer and he was therefore fully in a position to calculate the ‘estimated income’ of its employees. The contention of Shri K.V. Vishwanathan, learned senior advocate that there may be a bonafide mistake by the assessee-employer in calculating the ‘estimated income’ cannot be accepted since all the relevant documents and material were before the assessee- employer at the relevant time and the assessee employer therefore ought to have applied his mind and deducted tax at source as it was his statutory duty, under Section 192(1) of the Act.
Hon’ble ITAT held that the transaction between assessee company and its Executive Directors is on account to meet the urgent financial requirements of the company. Accordingly, it cannot be considered and there exist reasonable causes for accepting the money in cash from the Executive Directors of the company who are responsible for day-to-day affairs of the company. In our opinion, in this case, levy of penalty u/s 271D of the is unwarranted. Accordingly, we inclined to delete the penalty levied by the AO confirmed by Ld. CIT(A).
Hon’ble ITAT held that the provisions relating to furnishing of a revised return is provided u/s 139(5) of the Act, which entitles an assessee to furnish a revised return if he discovers any omission or any wrong statement in the original return hitherto filed, however the very fact that, for the impugned assessment year, this right or entitlement of revision was given to an assessee who has filed his original return either u/s 139(1) or in pursuance of notice u/s 142(1) of the Act, this by necessary implication means that, such a right was denied and not at all available to the assessee who has filed the return u/s 139(4) of the Act, this view has been historically held by the Hon’ble Supreme Court in much celebrated case of “Kumar Jagdish Chandra Sinha Vs CIT” (Supra). Thus, in the case before us, the appellant filed his original return otherwise than u/s 139(1) or 142(1), the revised return filed u/s 139(5) of the Act became non-est in the eyes of law, consequently the claim of capital loss made by the appellant in his revised return.
Kanhaiya Lal Lalwani Vs ITO (ITAT Jaipur) ITA No. 95/JP/2022 Date of Order: 15-09-2022
Hon’ble ITAT Jaipur held that it is noted that the cost of acquisition of plot as per the assessee was Rs. 555/- purchased on 16-04-1999 and thereafter addition/ improvement of Rs.3,41,000/- was made. In my view, if these benefits were allowed to the assessee then in that eventuality the capital gain arose on the sale of immovable property could have been below taxable limit. It is noteworthy to mention that the provisions of Section 273B of the Income Tax Act, 1961 categorically mentions that penalty u/s 271F is not leviable in case the assessee proves that there was a reasonable cause for not filing the return of income during the year under consideration, as per provisions of Section 139 of the Act.
Goods and Services Tax Law Updates:
AAR RULING: Reimbursement of tree cut compensation amount paid to farmers and land owners during the course of execution of work is not chargeable to GST as the Applicant qualifies to be a Pure Agent and Reimbursement of land compensation amount paid to farmers and land owners during the course of execution of work is chargeable to GST as the Applicant does not qualifies to be a Pure Agent.
AAR RULING: The applicant is having his place of business in the state of Telangana and is seeking a ruling on his liability to obtain a registration in other states where he is executing to contracts including installation, testing and commissioning of antennas. In this connection it is inform that under section. 96 of the CGST Act, the authority for advance ruling constituted under the provisions of a state goods and services Act shall be deemed to be the authority for advance ruling of that state. As seen from this provision there is a territorial nexus between the authority for advance ruling of a state and its geographical boundary. Therefore, this advance ruling authority constituted under the Telangana State Goods and Services Act cannot give a ruling on the liability arising under the CGST Act or SGST Act in a different state. Therefore, the application is Rejected.
AAR RULING: The expenditure made towards corporate responsibility under section 135 of the Companies Act, 2013, is an expenditure made in the furtherance of the business. Hence the tax paid on purchases made to meet the obligations under corporate social responsibility will be eligible for input tax credit under CGST and SGST Acts.
AAR RULING: The activity of O&M of Mansi Wakal dam Project on ESCO Model and O&M work by the applicant is to be undertaken/being undertaken for a Govt. Department. In this activity of Composite supply of goods and services the applicability of GST will be as under:–
(a) Composite supply of goods and services where supply of goods is below 25% out of total value of supply then GST will be NIL.
(b) Composite supply of goods and services where supply of goods is more than 25% of the total value of supply then GST will be @12% (SGST 6% + CGST 6%).
Updates from Other Laws:
The Apex Court on Friday upheld the amended Employees’ Pension Scheme (EPS), which caps the basic salary of an employee at Rs 15,000 a month for the pension component derived from it to be calculated. A Bench comprising Chief Justice of India Uday Umesh Lalit, Justice Aniruddha Bose, and Justice Sudhanshu Dhulia has allowed the appeals of the Employees’ Provident Fund Organisation and the Union government challenging the judgments of the High Courts of Kerala, Rajasthan, and Delhi, which had quashed the EPS Amendment of 2014.
Supreme Court held that no borrower can, as a matter of right pray for a grant for the benefit of one time settlement scheme and writ of mandamus cannot be issued by the High Court in exercise of Article 226 of the Constitution of India, directing the financial institution/bank to positively grant a benefit of OTS to a borrower.
Hon’ble Supreme Court held that it is true that so long as the amount is in the hands of a bribe giver, and till it does not get impressed with the requisite intent and is actually handed over as a bribe, it would definitely be untainted money. If the money is handed over without such intent, it would be a mere entrustment. If it is thereafter appropriated by the public servant, the offence would be of misappropriation or species thereof but certainly not of bribe. The crucial part therefore is the requisite intent to hand over the amount as bribe and normally such intent must necessarily be antecedent or prior to the moment the amount is handed over. Thus, the requisite intent would always be at the core before the amount is handed over. Such intent having been entertained well before the amount is actually handed over, the person concerned would certainly be involved in the process or activity connected with “proceeds of crime” including inter alia, the aspects of possession or acquisition thereof. By handing over money with the intent of giving bribe, such person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime. On a bare perusal of the complaint made by the Enforcement Directorate, it is quite clear that the respondent was prima facie involved in the activity connected with the proceeds of crime. The view taken by the High Court that the respondent cannot be held liable for the offence under the PML Act is thus completely incorrect.
Weekly Newsletter Income Tax, GST and Other Law [2nd Week, November 2022] GST Updates, Income Tax Updates, Tax India Updates
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