Monthly Digest Of Tax Cases- March 2022

Supreme Court 1. Supreme Court Rules Tata Steel Has Locus Standi To Challenge Denial Of Input Tax Credit To Its Unit Case Title: Tata Steel Ltd Versus The State Of Jharkhand And Ors. A Bench of Supreme Court, consisting of Justices Sanjiv Khanna and Bela M. Trivedi, remanded a matter back to Jharkhand High Court for a fresh decision on Tata Steel's writ petition against the denial of input tax credit to its Naomundi unit. The court held that the High Court was not justified in ruling that Tata Steel had no locus standi to file a writ petition challenging the denial of input tax credit to its unit in Naomundi in respect of the purchases made and utilised by it. Tata Steel being a registered company and thereby a juristic person, the court held that its writ petition could not have been dismissed as not maintainable, despite its units being treated as separate assessees under the Jharkhand Value Added Tax Act, 2005. 2. 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. 3. Banks Exempted From Deducting Tax At Source While Paying Interest To Statutory Corporations : Supreme Court Reiterates Case Name: Union Bank of India v.Additional Commissioner of Income Tax (TDS) Kanpur Citation: 2022 LiveLaw (SC) 278 The Supreme Court has reiterated that Banks are exempted from the mandate of Section 194A of the Income Tax Act, 1961, to deduct tax at the source (TDS), on payment of interest to corporations established by a statute. 4. Supreme Court Remits Tax Appeal Back To Rajasthan High Court, Says High Court Cannot Dispose Of Appeal With A One Paragraph Order Case Title: Principal Commissioner Of Income Tax (Central) Versus M/S. Motisons Entertainment India Pvt. Ltd. The Supreme Court has ruled that a High Court is not justified in disposing of a tax appeal with a one paragraph order without discussing the issues arising for consideration. 5. Whether Product `Nimbooz' Can Be Classified Under Item `Lemonade' Or `Fruit Pulp Or Fruit Juice Based Drinks': Supreme Court To Consider Case Title: Commissioner Of Central Excise Hyderabad-I V. M/S Aradhana Foods And Juices Pvt. Ltd. The Supreme Court recently agreed to consider whether the product `Nimbooz' can be classified under item `Lemonade' and/or as `fruit pulp or fruit juice based drinks' for the purpose of Central Excise levy. 6. States Have Legislative Competence To Levy Tax On Lotteries Run By Other States : Supreme Court Allows Appeals Of Kerala & Karnataka Case Title : State of Karnataka and another vs State of Meghalaya and another and other connected cases Citation : 2022 LiveLaw (SC) 309 In a significant judgement, the Supreme Court has held that State legislatures have the competence to levy tax on the lotteries organized by other states. Holding so, a bench comprising Justices MR Shah and BV Nagarathna allowed the appeals filed by the States of Karnataka and Kerala challenging the judgments of Karnataka and Kerala High Courts which held that they lacked the legislative competence to levy tax on the lotteries organized by other states like Nagaland, Meghalaya and Sikkim. High Courts Delhi High Court 1. Neither Rational Nexus Nor Fresh Material To Believe Escapement Of Income: Delhi High Court Quashes Reassessment Notice Case Title: Kurz India Private Limited Versus Principal Commissioner of Income Tax-5, New Delhi Citation: Citation: 2022 LiveLaw (Del) 174 The Delhi High Court has quashed the reassessment notice issued under Section 148 of Income Tax Act, 1961 on the grounds that the reason to believe was invalid, had no rational nexus to the belief for escapement of income and there was no fresh material on record to initiate reassessment proceedings. 2. Application For Compounding Of Offence Under Section 276CC Income Tax Act Cannot Be Rejected If Conviction Is Set Aside By The Special Judge:Delhi HC Case Title : Jai Singh Goel Versus Chief Commissioner Of Income Tax(Central) Citation: 2022 LiveLaw (Del) 175 A Bench of the Delhi High Court, consisting of Justices Manmohan and Navin Chawla, has ruled that an application seeking compounding of the offence under Section 276CC of the Income Tax Act, 1961 could not be rejected on the ground that the Assessee had not been acquitted of the criminal charges, if his conviction with respect to the given offence has been set aside by the Special Judge, CBI. 3. Delhi High Court: Findings Of Fact Recorded By ITAT Not Perverse, Cannot Be...

Monthly Digest Of Tax Cases- March 2022

Mariya Paliwala

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