Tax Cases Weekly Round-Up: 17 July To 23 July, 2022

Delhi High Court Inapplicability Of MOOWR Scheme On Solar Power Generating Units: Delhi High Court Says No Coercive Action Case Title: ACME Heergarh Powertech Private Limited vs. Central Board of Indirect Taxes and Customs and Anr. The Delhi High Court bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju issued notice and restrained the customs officer from taking any coercive action against the petitioners assailing the legality of Board Instruction No. 13/2022 dated 9.07.2022. The instruction was issued by the CBIC with regards to the inapplicability of the Manufacturing and Other Operations in Warehouse (no. 2) Regulations, 2019 (MOOWR Scheme) on solar power generating units. Failure To File Income Tax Return | Prosecution U/S 276CC IT Act Not Permissible Without Previous Sanction Of Appropriate Authority: Delhi High Court Case Title: Vipul Aggarwal versus Income Tax Office The Delhi High Court has made it clear that a person cannot be prosecuted for the offence under Section 276-CC (Failure to furnish returns of income) of the Income Tax Act, except with the previous sanction of the Principal Commissioner/appropriate authority. A single judge bench of Justice Asha Menon held, "Since the law provides that without sanction u/s 278B of the IT Act, the Department cannot proceed against a person found liable to prosecute him for the offence under Section 276 CC of the IT Act, the present prosecution must fail qua the petitioner. In the absence of a specific sanction for prosecuting the petitioner, the learned ACMM could not have taken cognizance of the complaint against him and then framed charges against him. The edifice built without foundation must crumble." Explanation To Section 14A Of Income Tax Act Will Not Apply Retrospectively: Delhi High Court The Delhi High Court has ruled that the Explanation to Section 14A of the Income Tax Act, 1961, added vide the Finance Act, 2022, cannot be presumed to be retrospective in nature since it is clarificatory in nature and alters the law as it stood earlier. The Division Bench of Justices Manmohan and Manmeet Pritam Singh Arora held that in view of the law laid down by the Supreme Court in Sedco Forex International Drill. Inc. versus CIT (2005), the amendment to Section 14A, which is "for removal of doubts", cannot be presumed to be retrospective, even if such a language is used, since it alters and changes the law as it prevailed before. No Section 40(a)(ia) Disallowance In Case Of Short Deduction Of TDS: Delhi High Court Case Title: Pr. Commissioner of Income Tax-I Versus Future First Info. Services Pvt. Ltd. Citation: 2022 LiveLaw (Del) 696 The Delhi High Court has held that no disallowance under Section 40 (a)(ia) of the Income Tax Act is called for in the case of a short deduction of TDS and the correct course of action would have been to invoke Section 201 of the Income Tax Act. The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that disallowance under section 40A(2)(b) has to be based on cogent material or reasoning by the Assessing Officer. Bombay High CourtRoaming Services And International Long Distance Services Provided By Vodafone Idea To Foreign Telecom Operators Is An Export Of Service: Bombay High Court Case Title: Vodafone Idea Limited versus UOI and Ors. The Bombay High Court has ruled that the international Inbound Roaming Services (IIR) and the International Long Distance (ILD) Services provided by Vodafone Idea to Foreign Telecom Operators (FTOs) is an export of services, and thus, Vodafone Idea is eligible for the refund of the IGST paid by it. The Bench, consisting of Justices K. R. Shriram and Milind N. Jadhav, observed that Vodafone Idea had entered into agreements with the FTOs and that there was no mention of any agreement with the subscribers of the FTOs. Hence, the Court ruled that the subscribers of the FTO cannot be considered as the recipient of the services and that the said services rendered by Vodafone Idea were supplied to the FTOs. Karnataka High CourtDeveloper Put In Possession Of The Property Under The Development Agreement, Assessee Not Liable To Pay Wealth Tax: Karnataka High Court Case Title: M/s. Noorani Properties (P) Ltd. versus The Commissioner of Wealth Tax and Anr. The Karnataka High Court has set aside the order passed by the ITAT holding that the assessee was liable to pay Wealth Tax with respect to a property, despite transferring possession of the said property to a developer under a Joint Development Agreement. The Bench, consisting of Justices P.S. Dinesh Kumar and Anant Ramanath Hegde, observed that the developer had physically obtained possession of the property and that under the Development Agreement, the developer had the power to alienate its portion of the property. Hence, the Court ruled that the order of the ITAT...

Tax Cases Weekly Round-Up: 17 July To 23 July, 2022

Mariya Paliwala

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