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II. Direct Tax Case laws:
1. Marc Bathing Luxuries Ltd. versus Income Tax Settlement Commission
& Anr., WPC NO. 1900/2013, Date of decision: 18th September, 2013, High
Court of Delhi
Held :
Once an application for admission
u/s 245Cis filed before the Hon’ble Settlement Commission, then the said
application must be dealt with in accordance with law, i.e., refer to the
contentions of the petitioners, the contention of the Revenue and then an
objective, considered and a reasoned decision has to be taken. This is only
when the stand of the two sides are fully noticed and considered before an
order under Section 245D(2C) is passed. The petitioners must come clean and be
honest and admit their faults and cannot but declare their true and full
undisclosed income. However, their plea and explanation that their declarations
are genuine and truthful, cannot be rejected without a legitimate and fair
consideration.
The two searches were conducted
in earlier years and not in the period relevant to the Assessment Year 2012-13.
The Settlement Commission’s order has not referred to any specific issues and
documents or made references to the contentions of the Commissioner. Facts
stated are incorrect or that Commissioner had not objected to the stock
reduction is not adverted to. May be the applications deserve dismissal for the
said reasons but full factual position should be noted, before opinion is
formed whether there has been full and true disclosure. There has been error
and failure in the decision making process and the failure vitiates the order
passed.
In view of the above the impugned
setaside and an order of remand was passed. The proceedings directed to be
commenced from the same stage as on the last date of hearing, and the direction
given to rehear the the parties, and a fresh order without being influenced by
the earlier order will be passed. The Settlement Commission will deal with the
application in accordance with law. The effect of the present order is that the
settlement application will be treated as pending and necessary consequences in
law will flow. Merits of the case will be examined, without being influenced by
the present order. Nothing stated in this decision, will be treated as binding
opinion on merits of the case of the parties.
(Please click here to view the Judgment)
2. India Trade promotion Organization vs. CIT, ITA No. 167/2012 &
168/2012, Date of decision: 6th September, 2013, High Court of Delhi.
Whether the Income Tax Appellate
Tribunal was right in denying interest of Rs.1,60,30,495/-, which it is claimed
was payable alongwith the interest on refund U/S 244A?
Held No.
Interest payable under Section
234B and 234C become part of the demand notice issued under Section 156 and it
is on this amount, i.e., the tax payable plus interest payable under Sections
234B and 234C that interest under Section 220(2) is calculated from the date
mentioned in the notice of demand till the date of actual payment. Under
Explanation to Section 140A(1), it is stipulated where the amount paid by an
assessee under self-assessment falls short of the aggregate amount of tax and
interest aforesaid, the
amount paid shall first be
adjusted towards the interest payable and the balance, if any, shall be
adjusted towards the tax payable. The interpretation given by us follows the
same principle, when Revenue defaults and makes part payment of the amount
refundable. The aforesaid interpretation also ensures that the Assessing
Officer/Revenue refund the entire amount, which is due and payable, including
interest payable under Section 244A. It discourages part payment. There is no
other provision under the Act under which an Assessing Officer/Revenue can be
made liable to pay interest when part payment is made and the entire amount,
which is refund able is not paid to the assessee. Otherwise the Assessing
Officer/Revenue can refund the principal amount and not pay the interest
component under Section 244A for an unlimited period with impunity and without
any sanction, which would amount to granting premium to a noncompliance of law.
In the present case, the interest component was withheld for the period ranging
between 9 to 13 years.
(Please click here to view the Judgment)
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