Tax Annual Digest 2024

SARFAESI Act | Charge Of Secured Creditor Will Precede Over The Charge Based On Dues Of Sales Tax: Gujarat High CourtThe Gujarat High Court has reiterated that the charge of the Secured Creditor will precede over the charge of an Unsecured Creditor.The ruling came in a writ petition whereby the core issue raised was - 'Who will have the first charge over the property in question i.e. Secured Creditor or the State / Central Government (Crowns debt) on account of non-payment of dues of the Sales Tax department?'Therefore, the Court opined, "being the Secured Creditor, the Banks were enjoying priority in terms of Section 26 E of the SARFAESI Act."Reopening Of Assessment Inspired From 'Review' & 'Change Of Opinion' By Subsequent AO Is Deprecated: Madras HC While setting aside the order disposing of assessee's objection for re-opening of assessment pursuant to the issue of notice u/s 148 of the Income tax Act, 1961 and the consequent reassessment order, the Madras High Court held that there is no scope for re-opening of the assessment, since the reasons cited for same was inspired from change of opinion of the Assessing officer.A Single Judge Bench of Justice C. Saravanan observed that “there is no case made out for reopening the Assessment that was completed earlier. Reopening of the Assessment was inspired from a review and a change of opinion by the subsequent officer. Such practice has been deprecated and frowned upon by the Courts. Tax Exemption Can't Be Denied To Govt's Helicopter Pilots Trainer For Non-Furnishing GSTIN: Karnataka High CourtThe Karnataka High Court has held that tax exemption cannot be denied to the government's helicopter pilot trainer merely for non-furnishing goods and service tax identification numbers (GSTIN) initially.The bench of Justice B. M. Shyam Prasad has observed that the GSTIN of the recipient organization was not furnished initially, is able to be furnished later, and demonstrates that its services of imparting training to the helicopter pilots were totally sponsored and borne by the Central Government or the State Government.Income Tax: Denial of 80lA Benefit In 4th Year Of Assessment, U-Turn By Department Is Not Justified: Delhi High CourtThe Delhi High Court has held that the Principal Commissioner Income Tax (PCIT) wrongly invoked jurisdiction under Section 263 of the Income Tax Act and fell in error by taking a U-turn in the fourth assessment year, thereby denying the benefit of Section 80IA of the Income Tax Act.The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that no material was brought on record by the PCIT to show that merely by migration from Internet Protocol-Virtual Private Network (IP-VPN) to National Long Distance-International Long Distance (NLD-ILD) license, a new and different “undertaking” of the assessee within the meaning of Section 80IA(4)(ii) came into existence.Employee Accepted Salary After TDS Deduction, Employer Responsible For Non-Deposit: Delhi High CourtThe Delhi High Court has held that the employee accepted salary after TDS deduction and the employer is responsible for non-deposit of TDS.The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that the petitioner/employee, having accepted the salary after the deduction of income tax at source, had no further control over it in the sense that thereafter it was the duty of his employer, acting as a tax collecting agent of the revenue, to pay the deducted tax amount to the Central Government in accordance with law.Service Tax Not Payable On Demat Or Depository Charges: CESTATThe Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable on demat or depository charges collected from sub-brokers.The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that demat or depository charges are collected by the sub-brokers and paid to the depository participants who are authorised to levy such charges under the Depositories Act, 1996. Investment In Shares In Indian Subsidiary 'Capital Account Transaction', Not Income: Delhi High CourtThe Delhi High Court has held that investment in shares by a company in its Indian subsidiary is a “capital account transaction” which does not give rise to any income. Therefore, the same cannot be treated as income for taxation.Placing reliance on the earlier decision of Delhi High Court in Nestle SA v. Assistant Commissioner of Income Tax, the bench comprising of Acting Chief Justice Manmohan and Justice Mini Pushkarna held “It is settled law that investment in shares in an Indian subsidiary cannot be treated as 'income' as the same is in the nature of “capital account transaction” not giving rise to any income.” S. 80IA(4) Deduction Available To Assessee Engaged In Developing Infrastructure Projects Like Roads, Canals: Gujarat High CourtThe Gujarat High Court has allowed the deduction under Section 80IA(4) of the Income Tax Act to the...

Tax Annual Digest 2024

Pankaj Bajpai

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