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    Summary of IT Decisions

    1. Madras High Court in BNY Mellon Technology Private Limited[1] - The time limit prescribed for TPO to complete assessment before 60 days prior to the last date to complete assessment under section 153 is mandatory in nature and the word ‘prior to’ should be interpreted differently from the word ‘to’:

    The facts in the case were that the last date for completion of assessment in the said case is 31.12.19 after extending the time limit by 12 months on account of referring the case to TPO. Accordingly, as per section 92CA(3A), the TPO had to pass the order before 60 days prior to the last date on which the time limit for assessment expires. TPO actually passed the order in 01.11.19. To determine the validity of the TPO’s order, the question has arisen whether the last date on which the time limit for assessment expires is 31.12.19 or 01.01.20 thereby deciding whether last date for passing order by TPO is 01.11.19 or 31.10.19.

    The revenue has drawn attention to the General Clauses Act, 1897 and contended that where the word ‘to’ is used in an act for determining the time limit, it shall be interpreted as ‘up to that date’ and such date shall be included. Therefore ‘the date before 60 days prior to the last date of assessment ‘would mean 60 days calculated by including 31.12.19 also and hence the last date for TPO’s order would be 01.11.19 by leaving the AO a period of 60 days to complete his assessment.

    SBS Wiki E Journal February 2023

    In this 103 edition, we have authored articles around interesting issues. The article on GST implications on issues arising from arbitration award is a must read. This article deals with the GST implications based on the nature of amount that is involved in the awards. For ease of understanding, we have framed the article dealing with five different issues.

    The next article is Part II of the series dealing with ‘All About Recognized Provident Fund, Approved Superannuation Fund and Gratuity Fund’. We cover the ASF and Gratuity Funds aspects in this part. Hope you will find it interesting.

    We have also collated certain important judgments under direct tax and indirect tax laws, provided our comments wherever necessary.

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    SBS Wiki Budget Special Edition 2023

    We bring you our detailed analysis of the recent budget proposals. Like every Indian, I have expected many changes in this budget, especially, being a pre-election year budget. But this budget appeared to me, as if, something more can be done, but has not. The macro-economic indicators project that the country is going to post good growth in the coming years.

    Before leaving you to the detailed analysis, I would like to touch certain proposals which attracted my interest. The first is the introduction of new appellate authority under the provisions of Income Tax Act to clear the pending cases before the existing appellate authorities. This would improve the speed of the disposal of cases and definitely a welcome move. The next one is the changes brought to the new tax regime. Allowance of standard deduction and reduction of surcharge makes it bit attractive. It appears to me that the over a period of time, the old regime would be discontinued. The increase of exemption for leave encashment is also a positive move.

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    Summary of IT Decisions


    1. SC in Pioneer Overseas Corporation[1] - Merely raising a dispute before any authority cannot be a ground not to levy interest or waive interest under Section 220(2A) of ITA:

    A SLP was filed by the assessee with respect to waiver of interest under Section 220(2A) of ITA. The petitioner contended that appropriate authority has rejected the application for waiver of interest, which was later confirmed by High Court. The petitioner stated that as the dispute was pending for Mutual Agreement Procedure (MAP) resolution which was culminated in the year 2012 and the liability to pay tax arose then and therefore, they are entitled for waiver of interest.

    The Supreme Court stated that merely raising the dispute before any authority cannot be a ground not to levy interest or provide waiver under Section 220(2A). The Court stated that if that would be a reason, then every assessee would dispute pretending to be a bonafide litigant and seek waiver of interest and accordingly the petition requires to be set aside. The Court upheld the judgment of High Court and stated that interest under Section 220(2) is mandatory.

    Summary of GST Decisions


    1. Delhi High Court in Vallabh Textiles[1] - Payments made during Investigation having no colour of voluntariness, should be refunded to the assessee, since they are collected without following procedure of law:

    A search was carried out by the tax authorities on the petitioner from 16th February to 17th February 2022. During the course of search, the petitioner has paid tax amounting approximately to Rs 1.8 Crore. The said payments were made between 01:28 AM to 07:03 AM on 17th February 2022. The petitioner stated that the said payments were not made voluntarily but only on the coercion of the tax authorities. The tax authorities contend that since payments were made vide DRC-03 challans, the allegation of coercion is an afterthought.

    The Court after going through the submissions made by both the parties, has stated that Rule 142(1A) of CT Rules[2] clearly provides that the proper officer has to issue DRC-04 acknowledging the payment of tax made by person and in the facts it is clear that although the payments were made in DRC-03, no document has been placed by revenue (tax authorities) that they have accepted the payment. Hence, the stand taken by the revenue that the payments are voluntary payments and not out of coercion is required to be set aside. Further, the court stated the fact that the said taxes were paid in the early morning hours during search also indicate the payment is out of coercion.

    The Court stated that the tax authorities have violated instructions in Instruction No 01/2022-23 dated 25.05.22 issued by CBIC (dealing with the subject of deposit of tax during the course of search, inspection or investigation) and has not adopted the principles laid by Gujarat High Court in Bhumi Associate vs Union of India (MANU/GJ/0174/2021). In Bhumi Associate (supra), it was clearly stated that there should not be any tax payment during the search. Even if it is voluntary payment, the same should be after the closure of search. The Court stated that the said guidelines were violated and accordingly asked the tax authorities to refund the tax along with interest.  


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