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Income Compliance Calender for the month of June 2023

Income Compliance Calender for the month of June 2023

Complying with tax-related compliance proposed by the Indian government is mandatory for taxpayers in India. Non-compliance with due dates of income tax-related rules may result in imposing of heavy penalties by the government for taxpayers in India. Given below are all the Income Tax related compliances for June 2023. This article will aid in providing information of all the required compliances, thus making your life a little bit easier this year. Below are the due dates of Income Tax for June 2023.

DatePeriodForm No.Compliance
7 June 2023May, 2023TDS Payment​​Due date for deposit of Tax deducted/collected for the month of May, 2023. However, all sum deducted/collected by an office of the government shall be paid to the credit of the Central Government on the same day where tax is paid without production of an Income-tax Challan
14 June 2023 April, 2023 section 194-IA Due date for issue of TDS Certificate for tax deducted under section 194-IA in the month of April, 2023
14 June 2023April, 2023section 194-IB Due date for issue of TDS Certificate for tax deducted under section 194-IB in the month of April, 2023
14 June 2023April, 2023section 194M ​Due date for issue of TDS Certificate for tax deducted under section 194M in the month of April, 2023
14 June 2023April, 2023section 194S ​Due date for issue of TDS Certificate for tax deducted under section 194S in the month of April, 2023 Note: Applicable in case of specified person as mentioned under section 194S  
15 June 2023May, 2023Form 24GDue date for furnishing of Form 24G by an office of the Government where TDS/TCS for the month of May, 2023 has been paid without the production of a challan
15 June 2023March, 2023Form 16A​Quarterly TDS certificates (in respect of tax deducted for payments other than salary) for the quarter ending March, 2023
15 June 20232024-25Advance tax​First instalment of advance tax for the assessment year 2024-25
15 June 20232022-23Form 16​Certificate of tax deducted at source to employees in respect of salary paid and tax deducted during Financial Year 2022-23
15 June 2023May, 2023Form no. 3BB​Due date for furnishing statement in Form no. 3BB by a stock exchange in respect of transactions in which client codes been modified after registering in the system for the month of May, 2023
15 June 20232022-23Form No. 64D​Furnishing of statement (in Form No. 64D) of income paid or credited by an investment fund to its unit holder for the previous year 2022-23
29 June 20232022-23Form No. 3CEK section 9A​Due date for e-filing of a statement (in Form No. 3CEK) by an eligible investment fund unde​r section 9A in respect of its activities in financial year 2022-23 ​
30 June 2023May, 2023section 194-IADue date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA in the month of May, 2023​
30 June 2023May, 2023section 194-IB​​Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IB in the month of May, 2023
30 June 2023May, 2023section 194MDue date for furnishing of challan-cum-statement in respect of tax deducted under section 194M in the month of May, 2023
30 June 2023May, 2023section 194S​Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194S in the month of May, 2023 Note: Applicable in case of specified person as mentioned under section 194S  
30 June 20232022-23 ​Return in respect of securities transaction tax for the financial year 2022-23
30 June 2023March 31, 2023​TDS Return-Form 24Q & 26QQuarterly return of non-deduction of tax at source by a banking company from interest on time deposit in respect of the quarter ending March 31, 2023
30 June 20232022-23Form No. 64C​Statement to be furnished (in Form No. 64C) by Alternative Investment Fund (AIF) to units holders in respect of income distributed during the previous year 2022-23
30 June 2023March 31, 2023section 35AC(4)/(5)Report by an approved institution/public sector company under section 35AC(4)/(5) for the year ending March 31, 2023
30 June 20232022-23form No. 64B​Due date for furnishing of statement of income distributed by business trust to its unit holders during the financial year 2022-23. This statement is required to be furnished to the unit holders in form No. 64B
30 June 20232022-23CHALLAN NO./ ITNS 285​Furnishing of Equalisation Levy statement for the Financial Year 2022-23
30 June 2023Note: The deadline has been extended from March 31, 2023, to June 30, 2023, vide press release, dated 28-03-2023 
Deadline for linking PAN with Aadhaar to avoid PAN becoming inoperative  
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Tax consultant failed to comply with tax requirements; ITAT returns the issue to CIT(A)

Tax consultant failed to comply with tax requirements; ITAT returns the issue to CIT(A)

Fact and issue of the case

The appeal filed by the assessee is against the order passed by the Ld. CIT(Appeals), National Faceless Appeal Centre (in short “NFAC”), Delhi on 27.10.2022 for A.Y. 2018-19.

The grounds of appeal raised by the assessee are as under:

The order passed u/s. 250 on 27.10.2022 for A.Y. 2018-19 by NFAC Delhi dismissing the appeal on the ground of limitation is wholly illegal, unlawful and against the principles of natural justice.

The Ld. NFAC has grievously erred in law and or on facts in not allowing opportunity to further explain the reasons for delay in filing appeal before NFAC. Therefore there was gross violation of principles of natural justice & equity.

The NFAC has grievously erred in law and on facts in holding that there was no sufficient cause for delay in filing appeal before NFAC and thereby dismissing the appeal on limine and confirming the assessment.

That in the facts and circumstances of the case as well as in law, the NFAC ought not to have held that there was no sufficient cause for delay in filing appeal before NFAC. On the contrary when explanation with evidence was asked for in the notices issued u/s 250 from time to time without disputing the explanation give for the delay in SOF, the delay should be deemed to have been condoned.

The NFAC has erred in law and on facts in upholding the assessment u/s 143(1) at Rs. 10,39,251/-. It is, therefore, prayed that the order passed by NFAC rejecting to condone delay in filing the appeal should be set aside and be directed to consider the appeal on merits of the case.”

The assessee is a registered cooperative housing society under Gujarat Cooperative Act, 1961 registered on 04.11.2011. It maintains regular books of accounts and other record which was subject to cooperative audit. The assessee society filed its return of income on 11.10.2018 declaring total income at Rs. NIL as the assessee declared the surplus income were explained at Rs. 10,39,251/- and claimed the same as exempt on the principle of mutuality. The return was processed under Section 143(1) on 13.05.2019 determining the total income at Rs. 10,39,251/- due to adjustment of income replaced by Rs. 10,39,251/- as total income against the NIL income. The assessee filed rectification application under Section 154 of the Act on 29.06.2019 stood rejected vide order under Section 154 of the Act dated 06.07.2019 confirming the adjustment made under Section 143(1) of the Act vide intimation dated 13.05.2019.

Being aggrieved by the rectification order passed under Section 154 of the Act the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee.

The Ld. A.R. submitted that there was a delay of 217 days in filing appeal before the CIT(A) in respect of the assessee’s tax consultant has not taken any remedial action and the assessee society was not aware about the order passed by the CPC. And therefore, there was a delay of 217 days prior to Covid period which is 06.08.2019 to 14.03.2022. The Ld. A.R. submitted that when the assessee society came to know the same after the Covid period the assessee society appointed another tax consultant / Chartered Accountant after the change of office bearers of the society and made enquiries of the I. T. Portal to ascertain the latest tax position. At that time the assessee society came to know that the outstanding demand and orders was released by the Revenue. The Ld. A.R. submitted that the CIT(A) has not condoned the delay and dismiss the appeal on the limitation itself and not decided on merits. The Ld. A.R. submitted the issue on merit is related to exempt income claimed by the assessee.

Observation of the court

The Ld. D.R. submitted that the assessee has not explained the delay properly before the CIT(A) and relied upon the decision cited by the CIT(A) in its order.

Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the tax consultant of the assessee has not followed all the tax demands and the necessary submissions made to the Revenue Authorities during the pre-covid period i.e. 06.08.2019 to 14.03.2020. The earlier officer bearers of the society also has not taken cognizance or the precaution to ascertain the latest tax position. Therefore, in the interest of justice it will be appropriate to condone the delay of 217 days as the assessee has explained the reasonable cause for delay in filing the appeal before the CIT(A). Therefore, it will be appropriate to remand back the issues contested by the assessee society on merit to the file of the CIT(A) (NFAC) for proper adjudication of the issues on merit. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice.

In result, appeal of the assessee is partly allowed for statistical purpose.

Conclusion

In the result, appeal of the assessee is allowed and ruled in favour of the assessee

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Large companies’ tax teams spend the majority of their time on compliance

Large companies’ tax teams spend the majority of their time on compliance

According to a Deloitte poll released on Tuesday, tax teams at major corporations spend an average of 70% of their time on tax compliance and desire the cross-utilization of data gathered by multiple government agencies to reduce the need for reporting. According to the poll, TDS compliance is a burden for firms, and reporting under tax requirements may be made simpler to improve reconciliation.

A reduction in IT compliance by using filings made by taxpayers under other rules, such as GST, annual return filing with MCA, and FEMA, was highlighted by two-thirds of survey respondents and 84% of businesses with a turnover of above Rs 6,400 crore.

Companies having a revenue of between Rs 500 and Rs 3,000 crore valued computer-based scrutiny selection and quick refund and return processing. 129 tax specialists responded to the poll.

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Rent is liable to TDS at 10% under Section 194-I, whereas CAM is only subject to TDS at 2% under Section 194C

Rent is liable to TDS at 10% under Section 194-I, whereas CAM is only subject to TDS at 2% under Section 194C

Fact and issue of the case

The present appeal has been filed by the assessee against the order of ld. CIT(A)-38, Delhi dated 20.08.2020.

Following grounds have been raised by the assessee:

That on the facts and circumstances of the case, the ld. CIT(A) has grossly erred in treating the CAM charges as rent charges and confirming a total demand of Rs.29,28,215/- u/s 201(1)/201(1A) of the Income Tax Act, 1961.

That on the facts and circumstances of the case, the ld. CIT(A) has grossly erred in confirming demand thereon u/s 201(1) of Rs.15,43,276/- towards short deduction of TDS on CAM charges by confirming CAM charges as rent charges and enforcing to deduct TDS u/s 194I on whole amount instead of TDS u/s 194C.

That on the facts and circumstances of the case, the ld. CIT(A) has grossly erred in confirming of demand u/s 201(1A) of Rs.13,84,939/- towards interest on short deduction of TDS on CAM charges.”

Brief facts of the case are that a survey u/s 133A(2A) of the Income Tax Act, 1961 was carried out in the case of Ambience group by the ACIT(TDS)-73(1), New Delhi on 12.02.2018 for the purposes of verification of compliance of TDS provisions. A survey action was carried out at two malls namely Ambience Gurgaon and Vasant Kunj revealed that, the Mall owners have collected/recovered expenses in the form of Common Area Maintenance Charges (CAM) on which TDS was made at 2% u/s 194-C by the payers. On the basis of findings of survey, notice was issued, in response to which requisite details were furnished regarding CAM Charges. As per AO, tax should have been deducted at 10% on CAM charges u/s 194-I instead of 2% u/s 194C and accordingly a show cause notice was issued.

The assessee submitted that the separate invoices for lease expenses and CAM charges have been raised and the area for which CAM charges are paid has not been in sole or exclusive use or possession of the assessee. However, the AO rejected the explanation of the assessee on the ground that in the agreement, super area is also specified which includes common area of the complex. Then the AO has referred to the various circumstances where CAM is paid and as per the assessee, TDS u/s 194-I is applicable only in the cases where CAM is paid to the same party or group concern on the basis of same lease agreement. The AO observed that, in the case of assessee CAM charges are variable and linked with the lease agreement.

Thereafter, the AO has referred to the provisions of section 1941 including Explanation below it, wherein rent has been defined as “Rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any (b) building or (c) land appurtenant to a building (including factory building) or (h) fittings, whether or not any or all of the above are owned by the payee. On the basis of this provision, the AO was of the view that the definition of rent is very broad. To support his case, the AO relied upon various decisions.

Observation of the court

The assessee relied upon the judgments of Hon’ble Supreme Court in Japan Airlines Company Ltd. Vs. CIT, (377 ITR 372), CIT Vs. Singapore Airlines Ltd. and Associated Hotels of India Ltd. Vs. R.N. Kapoor, AIR 1959 SC 1262.

After having considered the submissions of the assessee, the ld. CIT(A) held that undisputedly there is single lease agreement for payment of rent as well as CAM charges. The ld. AR has submitted that payment of CAM charges is nothing but reimbursement of common area maintenance expenses incurred by the lessor on general maintenance, electric, water and security services etc. Further, it has been claimed that, the common area is outside the area which is leased out to the assessee. These arguments are not acceptable because the common area and other services provided by the lessor are also enjoyed by the appellant along with the specified area. As per the same agreement, the appellant is required to pay lease rent as well as CAM charges. It is also noticed that there is no distinction between CAM charges and lease rent payments except, for raising separate invoices. The Explanation below section 194-I which defines “Rent” takes into its ambit any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any (b) building or (c) land appurtenant, to a building (including factory building) or (h) fittings, whether or not any or all of the above are owned by the payee and hence it is clear that any payment even for use of any building and land appurtenant, there to including furniture/fittings is part of rent. CBDT vide circular No. 715 dated 08.08.1995 (Question No. 24) has also clarified that there is composite arrangement for use of premises and provision of manpower, such agreement in essence is for taking premises on rent and hence provisions of section 1941 are-applicable. This view also gets support from the decision of Hon’ble High Court in the case of Sunil Kumar Gupta Vs ACIT (2016) 389 ITR 38 (P & H), in which it is held that where the agreement provides that the owner of the premises shall pay for common facilities, then it is reasonable to presume that the same is factored into the rent payable by the lessee. However, if maintenance charges etc. are stipulated to be payable by the lessor, it must form part of rent for the purposes of computing income from house property. In the case before hand, the CAM charges are paid by the lessor and the appellant has no control on actual expenditure to be incurred by the lessor. In view of above mentioned factual and legal position, thus it is clear that the CAM charges paid by the appellant are part of rent liable for TDS u/s 194-I.

Thus, we hold that rent is subjected to TDS @ 10% u/s 194-I and CAM charges u/s 194-C @ 2%. Hence, the appeal of the assessee is hereby allowed.

In the result, the appeal of the assessee is allowed.

Order Pronounced in the Open Court on 28/02/2023.

Conclusion

In the result, appeal of the assessee is allowed and ruled in favour of the assessee

Read the full order from here

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A simple change in opinion is insufficient to justify reconsidering an assessment under Section 148

A simple change in opinion is insufficient to justify reconsidering an assessment under Section 148

Fact and Issue of the case

The assessee has filed this appeal challenging the order dated10.08.2022, passed by Ld.CIT(A),National Faceless Appeal Centre(NFAC), Delhi and it relates to the AY 2013-14. The Assessee is aggrieved by the decision of Ld.CIT(A) in dismissing the appeal of the Assessee under wrong impression that the Assessee has settled the dispute under Vivad se Vishwas scheme. The Assessee has also raised a legal ground challenging the re-opening of the assessment u/s 148 of the Act. Accordingly, he prayed the legal ground may kindly be heard and the adjudicated by the bench. The assessment for the year under the consideration was originally completed by the Assessing Officer u/s 143(3) of the Act  on 18.06.2016. In the return of income the Assessee had claimed software expanses of 2.61 crore, as revenue expenditure. The Assessing Officer held that the software expanses are capital in nature and the accordingly, disallowed the above said claim. However, the Assessing Officer allowed depreciation thereon@ 60%, which amounted to Rs.1.57 crore. The Assessee had challenged the above said disallowance by filing appeal before Ld.CIT(A). In fact, the Assessee had settled above said  dispute under VSV scheme.

The Assessing Officer re-opened the assessment by issuing notice u/s 148 of the Act on 09.03.2020, that is after expiry of four years from the end of the present assessment year. The reason for re-opening is that the depreciation on software expenses should have been allowed @ 25% instead of 60% in the original assessment order and it has resulted in excess of allowance of depreciation resulting in escapement of income.The Ld. AR submitted that the Assessing Officer completed the reassessment by disallowing excess depreciation of Rs. 91.71 lacs.

the Assessing Officer has examined the issue of allowing depreciation on software at the time of original assessment proceedings and he has taken the conscious decision to allow depreciation @ 60%. The re-assessment proceeding has been initiated only to restrict the rate of depreciation to 25%, which is mere change of opinion. Accordingly, the Ld AR contended that the Assessing Officer was not justified in re-opening the assessment on mere change of opinion. In support of this contention the Ld.AR placed reliance on the decision rendered by Hon’ble High Court of Bombay in the case of Indian Energy Exchange Ltd vs. ACIT. Accordingly, the assessee prayed the impugned re- opening assessment order may be held as bad.

Observation of the Tribunal

The Tribunal has rival contentions and perused the record. We notice that the only reason for reopening of assessment is to revise the rate of depreciation allowable on the software capitalized by the AO. As noticed earlier, the AO had allowed depreciation @ 60% in the original assessment proceedings and the reopening of assessment was done only to restrict the rate of depreciation to 25%. The question is whether the decision of AO to revise the depreciation can be said to be mere change of opinion. If the answer is Yes, then the reopening of assessment is liable to be quashed. If the answer is No, then the reopening of assessment is justified.

The tribunal notice that an identical issue has been examined by the jurisdictional Bombay High Court in the case of Indian Energy Exchange Ltd (supra). In this case also, the AO reopened the assessment to restrict the depreciation rate to 25% as against 60% originally allowed on software. Facts being identical, following the above said decision of the jurisdictional High Court, we hold that the assessing officer has reopened the assessment of the year under consideration on mere change of opinion only and the same is not permitted under the law.

Accordingly, the tribunal hold that the reopening of assessment is bad in law and accordingly the impugned assessment order is liable to be quashed. Accordingly, we quash the orders passed by the tax authorities.

Conclusion

The tribunal ruled in favour of the assessee and held that officer has reopened the assessment of the year under consideration on mere change of opinion only and the same is not permitted under the law.

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It is not appropriate to deny a deduction under Section 80P if a return is not filed by the deadline set out in Section 139(1)

It is not appropriate to deny a deduction under Section 80P if a return is not filed by the deadline set out in Section 139(1)

Face and Issue of the case

The assessee is a Co-operative Society duly registered under the Gujarat Co-operative Societies Act vide Registration No. 1460/1955 dated 19.08.1955. The assessee is engaged in the business of providing credit facilities (financing) to its members only. The assessee has earned interest income from its members and from its investments with other Co-operative Society. The assessee filed its Return of Income on 30.11.2020 belatedly u/s. 139(4) of the Act, claiming deduction u/s. 80P of Rs.7,83,615/-. The Return of Income filed by the assessee was processed by the Centralized Processing Centre, Bengaluru vide Intimation u/s. 143(1) dated 28.12.2020 thereby denying the benefit of claim of deduction under section 80P for the reason that the Return of Income was not filed within the due date prescribed u/s. 139(1) of the Act. Thus the CPC, Centre demanded a sum of Rs. 3,50,420/- as tax payable by the assessee.

Aggrieved against the same, the assessee filed an appeal before CPC Centre claiming that there was no provision in section 143(1)(a) to make adjustment to the returned income by disallowing u/s. 80P, if the returned income is not filed within the due date specified u/s. 139(1) of the Act. Further there was an amendment in section 143(1)(a)(v) in the Finance Act, 2021 w.e.f. 01.04.2021 such disallowances is possible under the 143(1) proceedings only from the Assessment Year 2022-23.

In support of the same, the assessee relied upon Mumbai Tribunal decision in the case of New Ideal Cooperative Housing Society Ltd. vs. ITO in ITA No. 2681/Mum/2019 dated 03.02.2021 wherein it was held that adjustments made to the returned income by denial of deduction u/s. 80P(2)(d) and 80P(2)(c)(ii) did not fall in any other adjustments prescribed in Section 143(1) of the Act and that a Co-operative society will not get exemption was not something which was a subject matter of adjustment u/s. 143(1)(a) of the Act and the appeal of the assessee was liable to be allowed.

The Ld. NFAC after considering the submissions of the assessee dismissed the appeal of the assessee. Aggrieved against the same, the assessee is in appeal.

Observation of the Tribunal

The Tribunal has given the thoughtful consideration and perused the materials available on record. It is apparent from the Ld. NFAC order when the assessee has clearly pointed out the amendment in Section 143(1) made by Finance Act, 2021 which is not applicable for the present assessment year 2019-2020. However the same was not been considered by the Ld. NFAC and erroneously dismissed the assessee’s appeal.

The Co-ordinate Bench of this Tribunal in Lunidhar Seva Sahakari Mandali Ltd. (cited supra) considered the above amendment and respectfully following the Co-ordinate Bench decisions, we have no hesitation in holding that the assessee  cannot  be denied the deduction u/s. 80P of the Act on the ground that the assessee did not file the Return of Income within the due date prescribed u/s. 139(1) of the Act under proceedings made u/s. 143(1) of the Act for the Assessment Year 2019-20. In the result, the appeal filed by the Assessee is hereby allowed

Conclusion

The tribunal was ruled in favour of the assessee and dismissed the appeal

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Notice was sent to the wrong address, so its validity cannot be assumed

Notice was sent to the wrong address, so its validity cannot be assumed

Fact and issue of the case

The writ petitioners approached this Court in W.P.(T) No.4329 of 2021 against the garnishee notice dated 30th September 2021 issued under Section 79 of the Central Goods & Services Tax Act, 2017 whereby the respondent Deputy Commissioner (Preventive), Central Goods & Services Tax and Central Excise, Ranchi had frozen the bank account of the petitioners. The writ petition was disposed of without going into the merits of the case since the petitioners had approached the appellate authority on 29th September 2021 against the order-in-original dated 18th December 2018 and immediately on the next date i.e. 30th September 2021 the impugned garnishee notice had been issued during pendency of the appellate proceedings. By order dated 3rd November 2021 passed in the said writ petition the petitioners were granted liberty to move the authority who had issued the garnishee notice and pray for its recall. It was also left open to the petitioners to approach the appellate authority for expeditious disposal of appeal. The appeal has been dismissed on grounds of limitation as being beyond the statutory limit of 60 days prescribed under Section 85 of the Finance Act, 1994 and also beyond the condonable period of 30 days under Section 85(3A) of the Finance Act, 1994 vide impugned order dated 23rd December 2021 passed by the Commissioner (Appeals), Central Goods & Services Tax and Central Excise, Ranchi (Annexure-10).

In the present writ petition the petitioners have not only challenged the appellate order, but also sought quashing of the show-cause notice dated 6th August 2017, the order-in-original dated 18th December 2018 and the garnishee notice dated 30th September 2021 whereby the bank accounts of the petitioners have been attached for realization of tax dues towards service tax, penalty and interest. However, during course of submission learned counsel for the petitioners has, for the present, confined his challenge to the impugned appellate order. He submits that the documents obtained under RTI (Annexure-11) on 24th January 2022 along with the relevant page of dispatch register from the office of the Principal Commissioner, CGST & Central Excise, Ranchi shows that though the track consignment report of speed post showed item delivered on the applicant on 21st December 2018, but the copy of the relevant page of dispatch register at serial no.5

Observation by the Tribunal

The tribunal has considered the submissions of learned counsel for the parties and taken note of the relevant materials relied upon from the pleadings on records. We have also gone through the impugned appellate order. The appeal has been rejected by the Commissioner (Appeals), Central Goods & Services Tax and Central Excise, Ranchi only on the point of limitation since it was preferred after almost 2 years and 9 months on 29.09.2021. Under Section 85 of the Finance Act, 1994 the statutory limit of 60 days is prescribed for preferring an appeal. The delay, if any, is condonable up to 30 days beyond the period of 60 days under Section 85(3A) of the Act. However, two facts emerge from the pleadings on records which cannot be ignored: first that the certified copy of the impugned order was provided to the appellant on 19th December 2020 by the Adjudication Branch of Central Goods & Services Tax and Central Excise, Ranchi which means that by that time the relaxation of limitation period as per the directions of the Apex Court in Suo Motu Writ Petition (Civil) No. 03/2020 had commenced due to the COVID lockdown. The other fact which emerges from the information obtained under RTI vide Annexure-11 from the office of the Principal Commissioner, Central Goods & Services Tax and Central Excise, Ranchi dated 24th January 2022 is that the booking journal or the track consignment report of the speed post does not contain the complete address of the petitioner. The relevant details at serial no.5 of the booking journal are extracted

The address of the petitioner is shown at the cause title in the appellate order as also in the order in original which is M/s Global Construction (A Proprietorship Firm), having its office at Qr. No.1304, Sector-1/C, Bokaro Steel City, P.O. and P.S. Bokaro, District Bokaro (Jharkhand), PIN 827001. As such, it is apparent that notices were issued on incorrect or inadequate address and that too of the Proprietor of M/s Global Construction. The presumption of proof of service of notice is a rebuttable piece of evidence and the track consignment report having an incomplete address of the petitioner, valid service of notice of the order in original cannot be presumed. Section 27 of the General Clauses Act as quoted at paragraph-6 of the impugned appellate order also provides that service shall be deemed to be effected by properly addressing, prepaying and posting it be registered post. Petitioners have therefore rightly contended that it could not have approached the appellate authority earlier. In such circumstances, we are satisfied that the grounds of rejection of the memo of appeal are not tenable on facts. Accordingly, the appellate order is set aside. The matter is remanded to the appellate authority to consider afresh in accordance with law. The instant writ petition is allowed. Let it be made clear that we have not gone into the merits of the case of the parties so far as the imposition of tax, penalty and interest is concerned.

Read the full order from here

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Conclusion

The tribunal has ruled in favour of the assessee and dismiss the appeal

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It is not possible to classify commission on sales as income from an advertising agency

It is not possible to classify commission on sales as income from an advertising agency

Fact and issue of the case

This appeal has been filed by M/s. Drishty Communication private Ltd. Against demand of Service Tax. 2. The appellants were engaged in providing services as advertising service to get customize and were registered “The Indian Newspaper Society” (INS). They were remitting 85% of the total amount received from their customers on getting space/time from media agencies or news papers or various publications. They were retaining the 15% of the remaining amount as their commission. The appellants were paying Service Tax on the said commission amount. A Show Cause Notice were issued to the appellant seeking to classify the service provided by them under definition “Advertising Agency Service” taxable service under Section 65(105)(e) of the Finance Act 1994.

The notice alleged that one M/s. Surya Publicity was one of their sub­agent who had not obtained Service Tax registration and was not paying Service Tax, as they were claiming benefit of the threshold exemption under Notification No. 06/2005-ST dated 01.03.2005 with effect from 01.04.2005. The appellant had consequently not charged and paid any Service Tax for the services rendered to their sub agent M/s. Surya Publicity. The notice alleged that although the services provided by the sub agent M/s. Surya Publicity to their client/customers were exempted by way of said Notification, the services provided by the appellant to M/s. Surya Publicity were not exempted as the appellant were not exempted under said notification. Learned Counsel have argued that the appellant has not provided any services to their client. It has been argued that it is only the sub agent M/s. Surya Publicity which provided the services to their client and since appellant has not provided service, there is no question on payment of any Service Tax.

Observation of the court

The Tribunal has considered rival submissions. We find that in the instant case M/s. Surya Publicity was providing Advertising Services to its client. M/s. Surya Publicity was not discharged any service tax liability as the same was liable for the levy of Service Tax. M/s. Surya Publicity was purchasing time and space in the newspaper / media companies through the appellant. The amount paid by M/s. Surya Publicity to the appellant for purchase of time M/s. Surya Publicity to the appellant for purchase of time and space was sought to be tax by revenue under the category of Advertising Service. It is seen that no evidence has been placed from record to establish that the appellant were providing “Advertising Agency Services.” The role of appellant was limited to being an intermediary in the sale of space/ time for media agency on commission basis. In this regard the decision of Tribunal in case of H.K Associates is relevant. In the said decision following has been held.

The issue to be decided is whether M/s. H.K. Associates have rendered the services of advertising agency to KBPL. It is not disputed that actual work of painting on the walls/advertisements were undertaken by various parties to whom M/s. H.K. Associates have paid the amount as mentioned earlier. No evidence have been relied upon to hold that M/s. H.K. Associates have conceived, designed, prepared the advertisements in question.

The amounts paid to M/s. H.K. Associates have been accounted under the category of advertisement and sales promotion expenses by KBPL. A portion of the sum so received was spent on advertisement by H.K. Associates. These facts alone cannot lead to an inference that M/s. H.K. Associates have rendered the services as advertising agency and the entire amount of about Rs. 9 crores received from KBPL has to be treated as representing payment for rendering advertising services.

We have also perused the notes given in the balance sheets of KBPL. For example, in the balance sheet for the year 1999­2000, a sum of Rs. 4,88,23,638/- is accounted as advertisement and sales promotion expenses. In the schedule Q to the balance sheet relating to the head “other expenses”, there is a ‘note’ which clarifies as under :- “Commission on sales amounting to Rs. 1,19,77,790.27 paid to M/s. Harmeet Kandhari & Associates, belonging to a relative of the directors of the company, has been clubbed with the Advertisement & Sales Promotion expenses.” Similar clarifications appear in the balance sheets for the other years as well. Whether commission of sales could be treated as advertisement and sales promotion expenses is a debatable point. However, this is not an issue to be decided by us. It suffices to say that the terms of the agreement produced and the entries in the balance sheets of manufacturing company and those of M/s. H.K. Associates support the claim by the learned advocate for the parties. The balance sheet of M/s. H.K. Associates also mentions these amounts only as commission on sales.

In view of the above, we find merit in the appeal of M/s. H.K. Associates and accordingly, allow the same. Inasmuch as the appeal of main party M/s. H.K. Associates is allowed on merit, the question of enhancement of penalty on M/s. H.K. Associates and imposition of penalties on other three parties as prayed for in the other appeals by the department does not arise.” The aforesaid decision of Tribunal has been upheld by Hon’ble Apex Court as reported in 2010 (19) STR J111 (S.C). In view of aforementioned CBEC clarification and the decision of tribunal in similar circumstances the demand cannot be upheld, and is therefore set aside. The appeal is consequently allowed.

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Conclusion

The tribunal has ruled in favour of the assessee and dismiss the appeal

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Standard

Once the TDS Element is reflected in Form 26AS, the AO is unable to claim that the parties are not real

Once the TDS Element is reflected in Form 26AS, the AO is unable to claim that the parties are not real

Fact and issue of the case

1. Briefly stated, the facts of the case are that the assessee is engaged in the business of real estate. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has claimed large sales promotion expenses in its profit and loss account. Therefore, the assessee was asked to produce the details regarding large sales promotion expenses.

2. The assessee did not furnish complete details. Therefore, once again, the assessee was asked to produce entire details with regard to large sales promotion expenses. The assessee was also asked to give details party-wise that per party how many flats were booked and how much payment was made for booking flat with documentary evidences and  to justify the claim of such large sales promotion expenses amounting to Rs. 1,03,94,138/-.

S. No.Name of the partyStatusTotal amount of transaction(in Rs)Nature of expense
1.M/s wonder Media Inc.Returned Undelivered5,48,610/-Advertising through Hoarding Flex,Leaflet canopy,etc.  
2.M/s KP Ad Agency  Returned Undelivered9,65,076/-Advertising through Hoarding Flex,Leaflet canopy,etc.  
3.M/s The Transaction PointReturned Undelivered6,80,000/-Commission on sale of flat  
4.M/s Mathur Associates the property junctionsReturned Undelivered10,20,000/-Commission on sale of float  
1  32,13,686/- 

3. As is evident from the above chart, letter issued u/s 133(6) of the Act returned unserved. However, later on, confirmations were received from M/s The Transaction Point and M/s Mathur Associates. But the Assessing Officer found that M/s Mathur Associates has confirmed Rs. 12,68,688/- instead of Rs. 10,20,000/- and The Transaction Point confirmed Rs. 7,64,047/- instead of Rs. 6,80,000/-.

4. In respect of other payments, the Assessing Officer was of the view that the assessee could not prove the genuineness of the parties and, therefore, the same remained unverifiable and disallowed Rs. 32,13,686/-.

5. The assessee carried the matter before the ld. CIT(A) but without any success.

6. Before us, the ld. counsel for the assessee drew our attention to the ledger account received from M/s Mathur Associates and The Transaction Point and pointed out that in addition to the commission income, there is an element of Service Tax which has been added to the commission income and which is cause for difference in the amount confirmed by the parties and claimed by the assessee.

Observation by the Tribunal

1. The Tribunal has given thoughtful consideration to the orders of the authorities below and have carefully considered the documents referred to hereinabove. We find force in the contention of the ld. counsel for the assessee. Confirmation of accounts from M/s Mathur Associates and The Transaction Point clearly show that in addition to commission, there is an element of Service Tax mentioned in the account and the allegation of the Assessing Officer that the amount confirmed by the parties differ from the amount claimed by the assessee does not hold any water in as much as the difference is because of the Service Tax.

2. In so far as advertisement expenses are concerned, exhibits clearly explain the transaction wherein complete details have been furnished along with TDS details.

3. Once TDS element is reflected in Form No. 26AS, the Assessing  Officer cannot allege that the parties are not genuine. Moreover, full details are available on record. Therefore, we do not find any reason in sustaining the disallowance. Findings of the ld. CIT(A) are set aside and the Assessing Officer is directed to delete the impugned disallowance.

4. In the result, the appeal of the assessee in ITA No. 4523/DEL/2019 is allowed. The order is pronounced in the open court on 30.11.2022.

Read the full order from here

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Conclusion

The tribunal has ruled in favour of the assessee and dismiss the appeal

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Standard

Date of TDS payment would be the day the cheque was given to the banker

Date of TDS payment would be the day the cheque was given to the banker

Fact and issue of the case

This appeal is filed by the assessee for assessment year 20 12-13 against the order of the ld. Commissioner of Income Tax (Appeals)-30, New Delhi, dated 19.04.2019. 2. The assessee has raised the following substantive ground of appeal:-

This appeal is filed by the assessee for assessment year 20 12-13 against the order of the ld. Commissioner of Income Tax (Appeals)-30, New Delhi, dated 19.04.2019. 2. The assessee has raised the following substantive ground of appeal:-

Aggrieved by the order dated 19/04/20 19 passed by the Ld. CIT(A) the assessee has preferred the present appeal on the grounds mentioned above. 6. The Ld. Counsel for the assessee vehemently submitted that the TDS has been deposited to the bank well within the time i.e. on 31/07/2013 itself, but due to the negligence of the bank the same has not been credited on the very same day but the same has been credited on 01/08/2013. Therefore contended that, non-crediting the TDS amount due to the negligence of the bank, the assessee should not be penalized. Therefore, sought for cancellation of interest charged u/s 201 of the Act. Per contra, the Ld. DR has relied on the orders of the Lower Authorities. There is no dispute that the assessee had deposited an amount of Rs. 3,39,98,973/- vide Challan Serial No. 01003 which included an amount of Rs. 23,72,020/- on account of interest for 5 months starting from 01/03/2013 to 31/07/2013 against the same the TDS return was filed on 27/08/2013. The said amount has been tendered on 31/07/2013 by way of cheque by the assessee, which has not been credited by debiting the bank account of the But the amount has been debited from the account of the assessee on the very next day i.e. 01/08/2013. The Ld.CIT(A) was of the opinion that there is no provision in law which provide any leniency with regard to the working out of interest and interest u/s 201(1) / 201(1 A) of the Act is mandatory in nature.

Tribunal of the court

The tribunal has deliberated at length on the issue under consideration before us in the backdrop of the facts and the aforesaid judicial pronouncements. In terms of our aforesaid observations, we are of the considered view that as the assessee had admittedly tendered the cheque with the bank e. State Bank of India, Branch: Bandra Kurla Complex, Mumbai well within the stipulated ‘due date’, therefore, it cannot be held as being in default for the delay on the part of the bank or the clearing house in making the remittance of the said amount to the Government Account. We thus in the backdrop of our aforesaid deliberations, not being able to persuade ourselves to subscribe to the view taken by the lower authorities that the assessee was to be treated as being in default for delay in deposit of the amount of TDS, thus set aside the order of the CIT(A) and delete the interest of Rs. 37,510/-levied by the A.O under Sec. 201(1A) of the Act. The appeal of the assessee is allowed. Upon perusal, we find that it was held by the bench that CBDT Circular No. 261, dated 08.08.1979 issued by the CBDT, unless withdrawn or amended, would hold the ground and would be binding on the revenue.

Further, the payment would be deemed to have been made on the date the cheque was handed over to the banker and the date of payment was to be taken as the date of presentation of the cheques by the assessee. It also supports the proposition that the payment would relate back to the date of presentation of cheque unless the cheque is dishonored. The binding decisions cited by the assessee before Ld. CIT(A) also supports the said proposition. Similar view has been taken by Bangalore Tribunal in ITO V/s Broadcom Communication Technology Pvt. Ltd. (ITA Nos. 895 & 900/ Bang/2014 dated 11/09/2015). No contrary decision is on record. Respectfully following the ratio of all these decisions, we hold that payment of TDS by the assessee would relate back to the date of presentation of cheques by the assessee to the banker. Accordingly, TDS-CPC, Ghaziabad is directed to revise the aforesaid intimation by taking the date of tender of cheques by the assessee as the actual date of payment and re-compute interest payable by the assessee, if any. The interest demand u/s 220(2) being consequential in nature, may also be recomputed. Resultantly, the appeal stands allowed to the extent indicated in the order.”. In the instance case, there is One day delay in debiting the amount from the Assessee’s bank account which is apparently due to the mistake to the banker. Further by relying on the ratio laid down in the case of Standard Chartered Bank (Supra) we are of the opinion that the payment of TDS by the assessee would relate bank to the date of presentation of the cheque i.e. on 31/07/2013 by the assessee to the banker. Therefore, the interests levied by the Revenue authorities are deserves to be waived off. Accordingly, we allow the Grounds of Appeal of the assessee. In the result, the appeal filed by the assessee is allowed.

Conclusion

The tribunal has ruled in favour of the assessee and dismiss the appeal

Read the full order from here

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