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II. Direct Taxes Case Laws:
1. M/s Indus Towers Ltd. Vs. ACIT, W.P.(C.) No. 10289/2019, Date of Pronouncement: 04.03.2020, Delhi High Court
Whether
a petitioner invoking the discretionary extraordinary writ jurisdiction
of the Court is expected to approach with clean hands. Held: Yes
Where
any relief from recovery of tax demand raised and there is gross
suppression & misstatement, which led to a false projection of the
outstanding liability due from the petitioner, then merits would be
allowed to the assesse. Held: No
Brief Facts:
The issue is, whether, in terms of the O.M. dated 29.02.2016, the
petitioner is required to deposit 20% of the demand raised by the
respondent of Rs. 690.73 crore, or 20% of the tax on the amount in
dispute. The submission of learned senior counsel for the petitioner is
that 20% of the tax on amount in dispute. Considering that the court
restrained the respondents (i.e. Revenue) from taking any coercive
action against the petitioner for recovery of the demanded amount. This
is subject to the condition that the petitioner shall not seek any
adjournment of the hearing of the appeal pending before the CIT (A).
After that, the learned senior standing counsel for the respondent
revenue has, firstly, submitted that the petitioner disobeyed the
direction of this Court inasmuch, as, the petitioner sought adjournments
before the CIT (A) on two occasions. Further, the issue raised is that
of gross suppression and misstatement by the petitioner, which led to a
false projection of the outstanding liability/ refund due from/ to the
petitioner.
Held:
Considering the fact, the Hon’ble Delhi High Court held that the
petitioner could not have disregarded the condition imposed upon it by
us in our order dated 23.09.2019, and continued to enjoy the stay
granted by us due to pendency of the appeal for the earlier assessment
year. Further, on second issue, the court has observed that If the
petitioner were to be fair to the Court, the petitioner would have
reflected the amount of Rs. 2,247,073,334/ – which was the minimum tax
liability of the petitioner, assuming that its return based on the
consolidated financial statement, were to be accepted. Similarly, if the
said amount would have been reflected, it would have completely changed
the equation that was projected before us by the petitioner.
Thus,
the Hon’ble court further held that “the petitioner has invoked the
discretionary extraordinary writ jurisdiction of this Court, the
petitioner was expected to approach this Court with clean hands, which,
unfortunately, we find is completely lacking in the present case. We
are, therefore, not inclined to exercise our discretionary writ
jurisdiction in favour of such a petitioner.”
Accordingly, the Writ Petition dismissed with costs of Rs. 5 lakh.
(Please click here for judgment)
2. PCIT Vs. National Stock Exchange, I.T.A. No. 1171 of 2017, Date of Pronouncement: 03.03.2020, Bombay High Court
Penalty
levied under Section 105(a) of the Securities Transaction Tax (STT)
falling under Chapter VII of Finance (No.2 ) Act, 2004, Where the
assessee had failed to collect the STT or had failed to pay such STT to
the credit of the Central Government, it would not ipso-facto lead to
imposition of penalty: Held Yes
Whether
the assessee is required to be provided reasonable opportunity of
hearing to prove that there was reasonable cause for such failure: Held
Yes
Brief Facts:
In the present case, the penalty was levied under Section 105(a) of
the Securities Transaction Tax (STT) falling under Chapter VII of
Finance (No.2 ) Act, 2004 in view of the failure of the assessee to
discharge its statutory liability to collect the STT at prescribed
rates under section 100(4) of the Securities Transaction Tax (STT)
falling under Chapter VII of Finance (No.2) Act, 2004. However, the
Hon’ble Bombay High Court in Income Tax Appeal No.1187 of 2017, has
already affirmed the view taken by the Tribunal in the case of assesse
that the respondent was not liable for any alleged short deduction of
STT and therefore, no fault can be prescribed to the respondent and
to hold the respondent to be in default for short collection of STT
and accordingly, penalty on the same was also deleted by the ITAT. As
results, this appeal has been preferred by the Revenue under Section
260A of the Income Tax Act, 1961 against the order passed by the Income
Tax Appellate Tribunal.
Held:
The Hon’ble High Court Held that as observed by the Hon’ble Supreme
Court, the expression ‘penalty’ is a word of wide significance, but in
substance penalty is in the nature of punishment. Therefore, before
imposing penalty the Assessing Officer must come to the conclusion that
there was deliberate defiance of the law or wilful contravention of the
law by the assessee. Merely because in the assessment order the
Assessing Officer comes to a conclusion that the assessee had failed
to collect the STT or had failed to pay such STT to the credit of the
Central Government, it would not ipso-facto lead to imposition of
penalty. Once such a conclusion is reached, the assessee is required to
be provided reasonable opportunity of hearing and during the hearing
if the assessee can prove that there was reasonable cause for such
failure, no penalty shall be imposed.
Therefore, the appeal of the revenue is dismissed.
(Please click here for judgment)
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