Charitable Institutions Not Disqualified From Tax Exemption Merely For Collecting Service Charges: Punjab & Haryana HC

The Punjab and Haryana High Court has held that collecting service charges or generating a surplus does not, by itself, make the activities of a charitable institution commercial or disentitle it from income tax exemption under Section 11 of the Income Tax Act, 1961. Authorities must examine whether charges collected for activities advancing an object of general public utility are on a cost basis, nominally above cost or significantly higher than the cost of providing the services, and whether...

Punjab and Haryana High Court Upholds VAT ITC Restrictions On Cotton Used In Interstate Sales

The Punjab and Haryana High Court on 13 October upheld restrictions on claiming Input Tax Credit (ITC) on cotton and products manufactured from goods specified in Schedule H of the Punjab Value Added Tax Act, 2005, when sold in interstate trade, for periods covered by the 2008 amendment to the Act.A Division Bench comprising Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor dismissed appeals involving Fertichem Cotspin Ltd., Grospinz Fab Ltd. and Modern Rice Mills Ghanaur, while...

Only Commissioner Can Record Reasons To Believe For GST Arrest, Not Inspector: Punjab & Haryana High Court

The Punjab and Haryana High Court has recently ruled that only the Commissioner can record "reasons to believe" before authorising an arrest under Section 69 of the Central Goods and Services Tax (CGST) Act, 2017. Reasons recorded by an Inspector cannot substitute the Commissioner's satisfaction.Justice Shalini Singh Nagpal ruled,"The language used in Section 69 of the CGST Act, leaves no room to doubt that it is the 'Commissioner' and the 'Commissioner', alone, who is required to form an...

Punjab & Haryana High Court Lays Down Guidelines For ITC Reversal Where Supplier Fails To Deposit GST

The Punjab and Haryana High Court has upheld the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax (CGST) Act but held that the provision cannot be used mechanically to make a purchasing dealer reverse input tax credit (ITC) merely because the selling dealer failed to deposit tax with the government.A Division Bench comprising Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor held that Section 16(2)(c), read with Section 155, cannot be treated as a...

GST Authorities Arrest Man Who Appeared On Court's Direction: Punjab & Haryana HC Orders Immediate Release

The Punjab & Haryana High Court has ordered the immediate release of a man arrested by GST authorities after he appeared before them pursuant to the court's direction to cooperate with the investigation.A Bench of Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor observed that Goyal had appeared before the authorities with the documents sought by them. The matter was already pending before the court and was listed for September 29, when the authorities were expected to report on...

Punjab & Haryana High Court Sets Aside PCIT Order Rejecting Delay Condonation In HMT VRS Tax Claim

The Punjab & Haryana High Court on 23 September set aside the Principal Commissioner of Income Tax's (PCIT) rejection of an HMT Limited's employee's request to condone the delay in filing a revised return to claim an additional exemption on VRS compensation.A Division Bench of Justices Deepak Sibal and Sunish Bindlish held that delay in filing a revised income tax return cannot be treated as a standalone test while considering a request for condonation under CBDT Circular No. 9/2015. The...

Vuenow Cloud Storage Investment Case: Punjab & Haryana HC Denies Bail To Founder Sukhwinder Kharour

The Punjab and Haryana High Court has dismissed the regular bail plea of Sukhwinder Singh Kharour, founder and CEO of the Vuenow Group, in a money laundering case linked to the group's alleged “cloud particle” investment model.Justice Sumeet Goel noted a prima facie disparity between the cloud-storage capacity allegedly sold to investors and the actual operational capacity found during searches. The Court also noted prosecution statements indicating that rental payments to earlier investors were...

Income-Tax Authorities Should Take Liberal Approach To Condoning Filing Delays: Punjab & Haryana HC

The Punjab and Haryana High Court has recently observed that income-tax authorities should take a liberal approach while considering requests to condone delays in filing income-tax returns where genuine hardship is shown.A Division Bench of Justice Deepak Sibal and Justice Sunish Bindlish made the observation while setting aside an order of the Chief Commissioner of Income Tax, Panchkula, which rejected a cooperative society's request to condone a 34-day delay in filing its return for assessment...

Employee's Death During Appeal Does Not Nullify Disciplinary Punishment: Punjab & Haryana High Court

The Punjab & Haryana High Court on 2 September held that an employee's death during the pendency of a departmental appeal does not automatically nullify a disciplinary punishment imposed during his lifetime. Justice Sandeep Moudgil dismissed a writ petition filed by Sukhjinder Singh, son of former Punjab State Cooperative Supply & Marketing Federation Ltd. (Markfed) Branch Officer M.S. Cheema, challenging the reduction of his father's pay by two stages for calculating retiral dues over...

Punjab & Haryana HC Strikes Down Section 147A Income Tax Act, Finds Faceless Reassessment Framework Remains Unchanged

The Punjab & Haryana High Court has held that the retrospective insertion of Section 147A could not validate reassessment notices issued by jurisdictional Assessing Officers when the statutory provision governing faceless reassessment under Section 151A remained unchanged.A Division Bench of Justice Deepak Sibal and Justice Rupinderjit Chahal accordingly struck down Section 147A as unconstitutional, holding that the provision did not cure the legal defect identified in earlier judicial...

Punjab & Haryana High Court Disposes Sony India Plea Against 2006 VAT Entry Substitution

The Punjab & Haryana High Court has disposed of a plea filed by Sony India Private Limited concerning its claim for a concessional VAT rate of 4% on Digital Still Image Cameras, holding that the company was not prejudiced by the notification it had challenged.A bench of Acting Chief Justice Ashwani Kumar Mishra and Justice Yashvir Singh Rathor observed that the expression “IT Products”, which formed the basis of Sony's claim for the concessional rate, continued to remain part of Entry No. 60...

Punjab & Haryana High Court Strikes Down Section 147A Income Tax Act As Unconstitutional

The Punjab & Haryana High Court has struck down the newly inserted Section 147A of the Income Tax Act, 1961, holding the provision unconstitutional. The provision was introduced retrospectively to clarify the role of the Jurisdictional Assessing Officer (JAO) in reassessment proceedings.A bench of Justice Deepak Sibal and Justice Rupinderjit Chahal pronounced the decision today. A detailed judgment is awaited.Section 147A was inserted with retrospective effect from April 1, 2021. It provides...