Neelam Jadhav, Advocate
S.12A: Charitable or religious trust – Registration – Scope of provisions – the cancellation of registration could have been done only for the previous years in which violation was noticed.
The Assessee was engaged in the space policy and research work and was granted registration u/s. 12A on 28-05-2021. The Commissioner passed an order for cancellation of registration obtained u/s. 12A with retrospective effect. However, Assessee filed a writ petition seeking interim relief for there was a breach of principles of natural justice. The Honorable High Court observed and granted interim relief as cancellation of registration would disable the assessee from accepting contributions/donations and would derail its programs which were in the pipeline, the balance of convenience was in favor of the assessee. Centre For Policy Research v. Pr. CIT, W.P.(C) No. 11270 of 2023, 25/08/2023(Delhi)(HC)
The Revenue filed an SLP, and the Honorable Supreme Court dismissed the same affirming the view of the Honorable High Court that cancellation of registration would disable the assessee from accepting contributions/donations and would derail its programs which were in the process, whereas the balance of convenience was in favor of assessee and therefore interim stay granted to the Assessee is correct. (r.w.s. 12AA and 12AB).
Pr. CIT v. Centre For Policy Research, SLP (CIVIL)Diary No(S). 44698 of 2023, 05/01/2024 (SC)
S. 147: Reassessment order as also penalty notice and demand notice issued in the name of a non-existing entity, despite having been informed to AO about the factum of amalgamation, assessment order and notices were untenable in law.
A notice u/s. 148 dated 30/03/2021 for AY 2013- 14, issued against Elitecore Technologies Private Limited (“ETPL”) based on the Assessing Officer (A.O.) having reason to believe that income chargeable to tax had escaped assessment within the meaning of section 147 of the Act. In response to the same on 28/04/2021 the Petitioner informed the A.O. about the factum of the non-existence of ETPL on account of its amalgamation with Sterlite Technologies Limited with effect from the appointed date i.e. 29/09/2015. Further highlighted that since the notice had been issued in the name of a non-existing entity, the same was non-est and void ab initio and, therefore, the reassessment proceedings were sought to be withdrawn. Without considering the same, the AO issued a show cause notice requiring the non-existent entity i.e. ETPL as to why the proposed variation was not made. An order of assessment was passed u/s. 147 r.w.s. 144B against ETPL followed by a notice for penalty u/s. 274 r.w.s. 271 (1)(c) of the Act. The Honorable High Court observed that, the plea of the revenue that the reassessment proceedings could be initiated for a period before the specified date as per the scheme of amalgamation even against a non- existent entity, was unsustainable, therefore held that, the assessment order and notices were clearly untenable. Sterlite Technologies Ltd. v.Dy. CIT, WP 2855 & 2955 of 2022, dt. 27/03/2023 (Bom)(HC)
The Revenue filed an SLP, and the Honorable Supreme Court dismissed the same affirming the view of the Honorable High Court that demand notice issued in the name of a non- existing entity despite having been informed to AO about the factum of amalgamation, assessment order and notices were untenable in law.
Dy. CIT v. Sterlite Technologies Ltd. SLP (C)No.909 of 2024 dt.08/01/2024 [2024] 158 taxmann.com 242 (SC)
S.153A: Search and seizure – search conducted in the case of husband and documents seized belonged to a company in which the assessee along with her husband was a partner and director, Assessing Officer was justified in issuing notice u/s. 153C to the assessee and make a reassessment. (r.w.s.153C)
A notice u/s. 153A r.w.s. 153C issued to the assessee, the Assessee objected to the said notice on the ground that the search conducted upon her husband did not result in the recovery of any cash, jewelry, or valuable documents relating to her. The Assessing Officer rejected the objections after noticing that documents recovered during the search related to companies in which the assessee was a partner and director necessitating initiation of action u/s.153A, r.w.s. 153C. The lower authority noted that the assessee had a direct connection with the premises searched and documents recovered during the search necessitated initiation of action u/s. 153A, read with section 153C. The High Court held that no substantial question of law arose for consideration and dismissed the appeal filed by the Assessee. K.M. Fathima v. CIT ITA No. 67 OF 2018, dt.11/03/2022 (Kerala)(HC)
The Assessee filed an SLP, and the Honorable Supreme Court dismissed the same by holding that, where the search was conducted in the case of the husband of the assessee and documents seized belonged to a company in which assessee along with her husband was a partner and director and during search of assessee’s husband revealed that documents seized belonged to said companies, case of assessee came within ambit of section 153A and Assessing Officer was justified in issuing notice under section 153C. (Followed Nilamber traders v. CIT [2023] 155 taxmann.com 195 (SC))
K.M. Fathima v. CIT, SLP (CIVIL) DIARY NO. 20671/2022, dt.16/01/2024 (SC)
S. 271(1)(c ): Depreciation – Leased assets – the claim was supported by material on record – penalty could not be imposed merely because the depreciation claim was not acceptable in law.
The assessee had claimed depreciation on leased assets, such claim was backed by the material on record. The Assessing Officer did not agree with the assessee and disallowed the claim. The Honorable High Court observed that it is undisputed that, the assessee had made full disclosure of income and the particulars of income, and made a bonafide claim of depreciation on lease assets. The claim eventually stands legal requirement, the assessee had raised such a bonafide claim by disclosing income and particulars of such income. Merely because a claim is not acceptable in law would not give rise to penalty proceedings. Therefore, the penalty levied on the depreciation claim was deleted. Pr. CIT v. Indusind Bank Ltd. ITA No. 388 & 389 of 2017, dt.22/04/2019 (Bom)(HC)
The Revenue filed an SLP, and the Honorable Supreme Court dismissed the same holding that, depreciation claimed on leased assets and such claim was supported by material on record, penalty u/s. 271(1)(c) could not be imposed merely because the depreciation claim was not acceptable in law.
Pr. CIT v. Indusind Bank Ltd. SLP 27275 of 2019,4/01/2024 (SC)