Tax Cases Weekly Round-Up: 12 February To 18 February 2023

Delhi High Court Delhi High Court Stays Reassessment Order Based On Internal Audit Objection Case Title: Kum Kum Kohli Versus ACIT The Delhi High Court has stayed the reassessment order based on an internal audit objection. The division bench of Justice Rajiv Shadher and Justice Tara Vitasta Ganju has observed that the expression "any audit objection" was introduced only by the Finance Act, 2022, although with effect from April 1, 2012. Prior to the amendment, the expression obtained in Explanation 1(ii) appended to Section 148 referred to the "Comptroller and Auditor General of India." Notification Under S. 5 of FTDR Act Can’t Be Applied Retrospectively To Refuse Advance Authorization To Importer: Delhi High Court Case Title: Jindal Exports and Imports Pvt Ltd vs. Director General of Foreign Trade & Ors. The Delhi High Court has ruled that a notification issued under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act), which empowers the Central Government to formulate and announce the foreign trade policy, cannot be applied retrospectively by the Central Government. Bombay High Court No Reason For AO To Believe Income Chargeable To Tax Escaped Assessment: Bombay High Court Case Title: Late Bharat Jayantilal Patel Versus Deputy Commissioner of Income Tax The Bombay High Court has held that the development agreement permitted construction on the land only as a licensee, which did not have the effect of transmitting possession in favor of the licensee as per Section 53A of the Transfer of Property Act. The division bench of Justice Dhiraj Singh Thakur and Justice Kamal Khata has observed that there was neither any tangible material nor any reason for the assessing officer to believe that "any income chargeable to tax had escaped assessment,". The action of the assessing officer, therefore, would be without jurisdiction. Absence Of Material: Bombay High Court Quashes Reassessment Proceedings Case Title: Konark Life Spaces Versus Assistant Commissioner of Income -Tax The Bombay High Court has quashed the reassessment proceedings as the issue of "large loans and advances" was not only raised during the scrutiny assessment but also responded to by the assessee. The division bench of Justice Dhiraj Singh Thakur and Justice Kamal Khata has observed that between the date of the order of assessment, which is sought to be reopened, and the date of the formation of the opinion, nothing new happened. There is neither new information on hand nor reference made to any new material on record. CBDT Circular Disallowing Expenses Incurred On Granting Freebies To Doctors, Not Applicable To A/Y 2008-09: Bombay High Court Case Title: Abbott India Ltd versus Assistant Commissioner of Income Tax & Ors. The Bombay High Court has ruled that the CBDT Circular, dated 01.08.2012, as per which the expenses incurred in granting freebies to medical practitioners is inadmissible under Section 37 of the Income Tax Act, 1961, since it is prohibited by law, would not be applicable to the assessment year 2008-09. Active PAN In Name Of Amalgamating Company, Would Not Justify Reassessment Proceedings Against It: Bombay High Court Case Title: CLSA India Private Limited versus Deputy Commissioner of Income Tax & Ors. The Bombay High Court has reiterated that once the revenue department is aware about the amalgamation and had knowledge regarding the non-existence of the amalgamating entity, an assessment order passed against such amalgamating entity would be void and not merely a procedural defect. Madras High Court State GST Authority Can’t Prosecute If The Central Authority Has Already Initiated Action: Madras High Court Case Title: Tvl Metal Trade Incorporation Versus The Special Secretary Citation: 2023 LiveLaw (Mad) 51 The Madras High Court has held that the State Authority cannot prosecute the petitioner once again as the Central Authority has already initiated action against the petitioner in respect of the very same subject matter. Karnataka High Court No GST Applicable On Supply Of Vouchers: Karnataka High Court Case Title: M/s Premier Sales Promotion Pvt Ltd versus Union of India & Ors. The Karnataka High Court has ruled that vouchers do not fall under the category of goods and services and therefore, the issue and supply of vouchers would not attract GST. The bench of Justices P.S. Dinesh Kumar and T.G. Shivashankare Gowda remarked that vouchers, including Gift Vouchers and Cash Back Vouchers, are mere instruments accepted as consideration for supply of goods or services, which have no inherent value of their own. Payroll Services By IBM Philippines Not FTS, TDS Not Liable To Be Deducted: Karnataka High Court Case Title: Director of Income Tax Versus IBM India Citation: 2023 LiveLaw (Kar) 65 The Karnataka High Court, while dismissing the appeal ...

Tax Cases Weekly Round-Up: 12 February To 18 February 2023

Mariya Paliwala

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