Delhi High Court Quashes Section 153C Income Tax Order, Says Satisfaction Note Was Recorded After Limitation Period

The Delhi High Court has quashed a tax assessment against a company, holding that proceedings initiated on the basis of material found during search proceedings were barred by limitation.The Division Bench of Justices Dinesh Mehta and Aditi Choudhary observed that the satisfaction note in the case was recorded on June 25, 2021, corresponding to AY 2022-23, whereas the impugned order dated March 30, 2023 concerned AY 2010-11.Petitioner argued that the impugned order had been passed beyond the...

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...

Gujarat High Court Rejects Writ Plea, Finds GST Officer Was Authorised To Verify Vehicle Carrying Goods

The Gujarat High Court has rejected Shreeji Steel's writ challenge to GST confiscation proceedings after finding that the officer who physically verified its vehicle was authorised under Rule 138B of the CGST Rules.A bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati also held that the company had an alternative statutory remedy of appeal under Section 107 of the CGST Act. The court observed, “Upon examination of the documents on record, we find that there is no violation of the said...

Gujarat High Court Upholds ₹23.77 Crore Income Tax Relief For Adani Infrastructure Services

The Gujarat High Court has ruled in favour of Adani Infrastructure Services Pvt. Ltd., upholding the deletion of a ₹23.77 crore income tax disallowance. The court found that the company's interest income exceeded its interest expenditure and that the borrowed funds were advanced in a back-to-back transaction.The dispute concerned a disallowance under Section 14A of the Income Tax Act read with Rule 8D(2)(ii). Section 14A deals with expenditure incurred in relation to income that does not form...

Bagasse-Generated Electricity Sold To State Utility Not Liable For 6% CENVAT Reversal: CESTAT Mumbai

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that electricity generated from bagasse and sold to a state electricity authority cannot attract the 6% payment under Rule 6(3) of the CENVAT Credit Rules, 2004.The tribunal observed that “electricity produced from bagasse and sold to electricity authority of State Government cannot be subjected to payment of amount equal to 6% of the value of electricity sold by them under Rule 6(3)”.A Bench comprising...

Municipal Commissioner Cannot Alter Property-Tax Categories Without State Sanction: Gujarat High Court

The Gujarat High Court has ruled that a Municipal Commissioner cannot use a carpet-area cut-off to move commercial properties from one property-tax category to another without prior State Government approval.A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati quashed a March 27, 2015, office order issued by the Bhavnagar Municipal Corporation, which treated shops and showrooms with a carpet area of more than 35 square metres as NU-1 properties. NU-1 properties carry a...

Madras High Court Sets Aside Customs Broker Suspensions, Says 'Immediate Action' Must Be Timely

The Madras High Court has set aside the suspension of licenses of 11 Customs Brokers, holding that the power to order “immediate suspension” cannot be exercised after an unexplained or substantial delay.Justice Hemant Chandangoudar held that while “immediate” does not mean that the suspension must be ordered instantaneously, the Customs authorities must act with reasonable promptness once the material necessary for taking action is available.The Court was hearing a batch of writ petitions filed...

Purchase Order Date Cannot Determine Import Date For Project Import Duty Benefit: Madras High Court

The Madras High Court has ruled that a purchase order placed with a foreign supplier before registration of a project contract does not, by itself, determine whether imported goods qualify for the Project Import benefit. The relevant date is when the goods are imported into India, subject to the other requirements under the Project Import Regulations, 1986.“The mere fact that a purchase order was placed before registration of the project contract cannot, by itself, determine the date of...

Income Tax | Delhi High Court Quashes Section 153C Notice As Time-Barred, Relies On Ojjus Medicare Ruling

The Delhi High Court has quashed a notice issued under Section 153C of the Income Tax Act for Assessment Year (AY) 2016-17, holding that the notice was issued beyond the prescribed limitation period.The Division Bench of Justices Dinesh Mehta and Aditi Choudhary allowed the writ petition filed by Preeti Chadha, challenging the notice dated July 25, 2022, issued under Section 153C of the Act pursuant to a satisfaction note recorded by the Assessing Officer on June 16, 2022.Petitioner contended...

GST Order Must Disclose Factual Basis For Statutory Ingredients, Not Merely Reproduce Provision: Delhi High Court

The Delhi High Court has held that an adjudication order invoking Section 74 of the Central Goods and Services Tax (CGST) Act must disclose the factual basis on which the statutory ingredients of the provision are said to have been satisfied.The Division Bench of Justices Anil Kshetarpal and Bharat Parashar observed that mere reproduction of the statutory language, without supporting particulars, would not demonstrate the requisite application of mind.It thus set aside an order confirming a...

Cinema Operator Cannot Use State-Set Ticket Price Limits To Avoid Passing On GST Cut To Consumers: GSTAT Delhi

The GST Appellate Tribunal (GSTAT), Principal Bench at Delhi, has held that a cinema operator cannot rely on State Government price regulations to avoid passing on the benefit of a GST rate reduction to viewers.A single member coram of Judicial Member Justice Mayank Kumar Jain, observed that the orders relied on by Alankar Cinema did not prohibit it from reducing ticket prices after GST on cinema tickets was cut from 18% to 12% from January 1, 2019. The tribunal observed, “In the absence of...

ITAT Mumbai Upholds Capital Gains Exemption After Two Adjacent Flats Amalgamated Into One

The Income Tax Appellate Tribunal (ITAT) at Mumbai held that amalgamation of two adjacent flats into a single residential unit can qualify for capital gains exemption where the earlier flat loses its independent existence. A Bench of Judicial Member Pawan Singh and Accountant Member Girish Agrawal dismissed the appeal filed by the Deputy Commissioner of Income Tax-6(1)(2), Mumbai against the order of the Commissioner of Income Tax (Appeals) and upheld the exemptions claimed by Amit...