Delhi High Court To Examine If Audit Objection Can Trigger Reassessment For Period Prior To April 2021

The Delhi High Court is set to examine whether an audit objection can constitute “information” for initiating proceedings under the Income Tax Act, 1961, for a period prior to April 1, 2021.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta observed that the issue raised “seminal questions” requiring determination, particularly in view of the larger legal implications involved.The case arose from a notice issued to the assessee under Section 148A(1) of the Income Tax Act for...

Can ITAT Annul Assessment On Issue Taxpayer Did Not Challenge In Cross-Appeal Delhi High Court Issues Notice

The Delhi High Court has recently issued notice on appeals filed by the Income Tax Department challenging an ITAT order which had annulled certain assessment orders on the ground of non-compliance with the requirements of Section 153C of the Income Tax Act, 1961, despite the assessee not having filed a cross-appeal on that issue.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta was hearing Revenue's challenge in connection with nine assessment years from 2010-11 to 2018-19....

Karnataka High Court Dismisses Income Tax Appeals, As Additions Were Based On Uncorroborated Search Material

The Karnataka High Court has dismissed two Income Tax Department appeals concerning alleged unaccounted fees at an educational trust. It ruled that alleged unaccounted fee additions could not be sustained merely on the basis of loose sheets and similar seized documents in the absence of corroborative material.“Thus, the Revenue has not been able to corroborate the loose sheets and other seized materials on the basis of which the additions have been made. In the absence of any corroborative...

Karnataka High Court Upholds VAT On Swiping Machine Rentals By Axis Bank To Merchants

The Karnataka High Court has recently upheld the levy of VAT on rental charges collected by Axis Bank for card-swiping machines installed at merchant establishments.A Division Bench comprising Justice S.G. Pandit and Justice K. Manmadha Rao dismissed a Sales Tax Revision Petition filed by Axis Bank. “the rental charges collected by the petitioner in respect of EDCT machines constitute consideration for transfer of the right to use goods and are liable to tax under the KVAT Act.”, the court...

Delhi High Court Declines To Rule On GST Penalty For Non-Taxable Persons Amid Proceedings Before Supreme Court

The Delhi High Court has recently declined to examine the question of whether a person who is not a “taxable person” can be penalised under Section 122(1) of the Central Goods and Services Tax Act, 2017, noting that the issue is pending consideration before the Supreme Court.The Division Bench of Justices Anil Kshetarpal and Shail Jain disposed of twelve connected petitions filed by directors and other individuals against penalties imposed under Sections 74, 76(2) and 122(1) of the CGST...

Delhi High Court Dismisses Tax Dept. Appeals Against Suzuki Motorcycle Over AMP Adjustment Using Bright Line Test

The Delhi High Court has dismissed appeals filed by the Income Tax Department against Suzuki Motorcycle India, challenging the Income Tax Appellate Tribunal's rejection of an Advertising, Marketing and Promotion (AMP) adjustment based on the Bright Line TestThe Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta followed the High Court's earlier decisions in Sony Ericsson Mobile Communications India Pvt. Ltd. v. Commissioner of Income Tax and Maruti Suzuki Ltd. v. Commissioner of...

Excise Department Cannot Invoke Extended Limitation For Omission When Facts Were Already Known: Supreme Court

The Supreme Court on Thursday reiterated that the Excise Department cannot invoke the extended limitation period when the relevant facts were already known to it. The court set aside an excise duty demand after finding that the Department knew the manufacturer had cleared the chassis at 110% of its manufacturing cost.A Bench of Justices J.B. Pardiwala and K. Vinod Chandran, however, upheld the Department's position on valuation. It ruled that the additional 10% included in the valuation of the...

Delhi High Court Sets Aside ITAT's Ex-Parte Order Against AAI Over Non-Service Of Hearing Notice

The Delhi High Court has recently held that the Income Tax Appellate Tribunal (ITAT) cannot decide an appeal ex-parte without first ensuring that notice of the hearing has been issued and served on the concerned party.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta allowed an appeal filed by the Airports Authority of India (AAI) and set aside the ITAT's order, which had disposed AAI's appeal on merits in its absence.The Court observed that the Tribunal had committed a...

Delhi High Court Stays Reassessment Proceedings Over Non-Supply Of Material To Taxpayer

The Delhi High Court has stayed reassessment proceedings initiated against an assessee under Section 148 of the Income Tax Act, 1961, after the assessee submitted that the material relied upon by the Assessing Officer (AO) had not been supplied to him.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta issued notice to the Income Tax Department and stayed further proceedings pursuant to notice dated June 29.Reassessment proceedings had been initiated in relation to insurance...

Delhi High Court Rejects Plea Against GST Registration Cancellation Over Failure To Reply To Show Cause Notices

The Delhi High Court has refused to entertain a writ petition challenging the cancellation of a firm's GST registration, noting that the assessee had failed to respond to show cause notices issued to it.Petitioner had approached the Court challenging the order cancelling its GST registration, the subsequent order rejecting its application for revocation of cancellation, and the appellate order passed under Section 107 of the CGST Act.The GST registration was cancelled after the firm was found to...

SaaS Support Does Not Amount To Transfer Of Technology Under India-US DTAA: ITAT Delhi

The Income Tax Appellate Tribunal at Delhi has recently held that payments received by US-based Branch Metrics Inc. from Indian customers for its standard SaaS products do not qualify as Fees for Included Services (FIS) under Article 12(4)(b) of the India-US DTAA.The tribunal found that while customers could use the platform, they were not enabled to apply the technology underlying it, failing the “make available” test under the treaty.A bench comprising Judicial Member Vikas Awasthy and...

Delhi High Court Sets Aside Ex Parte Order Based On Show Cause Notice Uploaded Only On GST Portal

The Delhi High Court recently set aside an ex-parte order passed against a taxpayer under the Central Goods and Services Tax Act 2017, noting that the show cause notice had been uploaded only on the GST portal.The Division Bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar remitted the matter to the Adjudicating Authority for fresh adjudication in terms of the directions passed by the Punjab and Haryana High Court in Luxmi Traders v. Union Territory of Chandigarh &...