Weekly Round-Up Tax Cases: March 27 - April 2, 2022

Supreme Court Immunity Under Income Declaration Scheme Available Only To The Declarant; Can't Be Extended To Another Assessee : Supreme Court Case Title : Deputy Commissioner of Income Tax (Central) Circle 1(2) versus M/s MR Shah Logistics Private Ltd Citation : 2022 LiveLaw (SC) 323 The Supreme Court has found fault with a Gujarat High Court judgement for extending the immunity under the "Income Declaration Scheme" (IDS) to an assessee who was not the declarant under the scheme. High Courts Delhi High Court 1. Non Specification Of Penalty Provisions In Penalty Notice And Denial Of Immunity; Delhi High Court Holds That Assessee Is Eligible For Immunity, Says Tax Payer Should Be Incentivised Case Title: Schneider Electric South East Asia (HQ) PTE Ltd Versus Assistant Commissioner Of Income Tax, International Taxation, New Delhi And Ors. Citation: 2022 LiveLaw (Del) 257 The Delhi High Court has ruled that the action of income tax authorities denying the benefit of immunity from penalty under Section 270AA of Income Tax Act to the assessee on the ground that penalty was initiated under Section 270A for misreporting of income is arbitrary since the penalty notice issued by the authorities failed to specify the limb under which the penalty proceedings were initiated. The Bench, consisting of Justices Manmohan and Dinesh Kumar Sharma, held that since the authorities had failed to specify whether action was taken against the assessee for "underreporting" or "misreporting" of income under Section 270A of the Act, the order of the income tax authorities denying immunity from imposition of penalty was erroneous and arbitrary. 2. Disputed Tax Demand, Pre-Condition To Deposit 20 % Of The Disputed Tax For Stay Of Recovery Proceedings, Can Be Relaxed In Appropriate Cases: Delhi High Court Case Title: Tata Teleservices Limited versus Commissioner of Income Tax, International Taxation Citation: 2022 LiveLaw (Del) 259 The Delhi High Court has ruled that requirement of payment of twenty per cent of disputed tax demand is not a pre-requisite in all cases for putting recovery of demand in abeyance during the pendency of the first appeal. The Bench, consisting of Justices Manmohan and Dinesh Kumar Sharma, held that the order of the income tax authority disposing of assessee's application for stay against recovery of disputed tax demand without considering the issues of prima facie case, balance of convenience and irreparable injury to the assessee was a non-reasoned order. Madras High Court 1. Serious Allegations Of Availing Fraudulent GST ITC In Electronic Credit Ledger: Madras High Court Refuses Refund Of Amount Case Title: M/s.MNS Enterprises Versus The Additional Director General Directorate of GST Intelligence Citation: 2022 LiveLaw (Mad) 122 The Madras High Court bench of Justice C. Saravanan refused to grant a refund of the amount lying in the assessee's electronic cash ledger on the grounds that there were serious allegations against the assessee for having an availed fraudulent input tax credit (ITC) in the electronic credit ledger on the strength of a bogus and fictitious input tax invoice for discharging GST liability with no supply. 2. No Wilful Evasion Of Tax - Madras High Court Quashes Prosecution Under Section 276C (2) Of Income Tax Act Case Title: S.P. Velayutham Versus The Assistant Commissioner Of Income Tax, Chennai Citation: 2022 LiveLaw (Mad) 124 The Madras High Court has ruled that prosecution under Section 276C (2) of the Income Tax Act for wilfully attempting to evade payment of tax cannot be initiated against an assessee who merely defaults to pay tax on time under the Act. The Single Bench of Justice N. Sathish Kumar held that in the absence of mens rea to avoid payment of tax, a "wilful attempt" to evade tax cannot be attributed to assessee in order to prosecute him under Section 276C (2). Bombay High Court Bombay High Court Quashes Reassessment Notice Against Tata Communications Transformation Services Case Title: Tata Communications Transformation Services Versus Assistant Commissioner of Income Tax | Writ Petition No. 1334 Of 2021 Citation: 2022 LiveLaw (Bom) 114 The Bombay High Court bench of Justice N.J. Jamadar and Justice K.R. Shriram has quashed the reassessment notice against the Tata Communications Transformation Services. The court held that Section 297 of the Income Tax Act, 1961, provides a saving clause for the applicability of various provisions of the 1922 Act, even though the Act itself has been repealed. In the absence of such a saving clause for the applicability of erstwhile Sections 147 to 151 of the Income Tax Act, 1961, the amended provision would apply from 1st April, 2021. Kerala High CourtNon Release Of Seized Documents, Based On Pendency Of The SLP In The Supreme Court By IT Department, Is Illegal: Kerala High...

Weekly Round-Up Tax Cases: March 27 - April 2, 2022

Mariya Paliwala

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