ITAT quashes Reassessment Order based on invalid Re-Assessment Notice issued without Jurisdiction

The Income Tax Appellate Tribunal (ITAT), Delhi bench consisting of Pradip Kumar Kedia, Accountant Member and Yogesh Kumar US, Judicial Member quashed reassessment order framed as result of invalid re-assessment notice.

The assessee-company,Garg Acrylics Ltd. filed its original return of income declaring total income of Rs.3,20,64,950/-. The return of income filed was subjected to scrutiny assessment under Section 143(3). Thereafter, a notice under Section 148 of the Act was issued seeking to reopen the completed assessment. The re-assessment order was consequently finalized after making additions/disallowances on account of bogus purchases amounting to Rs.9,17,83,845/-. The impugned re-assessment order was thus framed determining the re-assessed income at Rs.12,38,48,800/- as against regular assessment under Section 143(3) at Rs.320,64,950/-.The assessee challenged the re-assessment order before the Commissioner of Income Tax (CIT) on two counts, namely, (i) validity of jurisdiction assumed under Section 148 of the Act and (ii) merits of the additions so made in the re-assessment proceedings. The CIT affirmed the action of the Assessing Officer on both counts, i.e., jurisdiction under Section 147/148 as well as merits of the addition towards bogus purchases. Aggrieved by the order of the CIT , the assessee preferred appeal before the Tribunal. The assessee challenged (i) the jurisdiction to issue notice under Section 148 and frame reassessment (ii) the correctness of addition/disallowance towards bogus purchases on merits.

The Tribunal observed “Assessing Officer was obviously not competent to invoke the provision of Section 147 of the Act which are drastic in nature. The assumption of jurisdiction under Section 147 is thus clearly without sanction of law and void ab initio. The consequent reassessment order is thus clearly bad in law. In this view of the matter, the reassessment order framed in consequence of invalid notice issued under Section 148 is requires to be quashed. Having held the impugned re-assessment order framed without fulfilling prerequisites of Section 147 of the Act to be bad in law, we do not consider it expedient to deal with the challenges raised by the assessee on merits of additions, being an infructuous exercise.”

18% GST applicable on Composite Supply under Works Contract: AAR

The Maharashtra Authority of Advance Ruling ( AAR ) has held that 18% GST is applicable on Composite supply under works contract.

The applicant, M/s KPC Projects Ltd., got selected based on their bid by the Uttar Pradesh RajkiyaNirman Nigam Ltd., (UPRNN) a government undertaking for the construction of 200 bedded ESI Hospital in Maharashtra.

The applicant approached AAR for clarification regarding the applicability of tax rate. The applicant submitted that they are providing works contract services in the form as defined under section 2 (119) of the CGST Act, 2017, to UPRNN, which involves services for the installation, fitting out, and construction of the hospital. Since UPRNN is a wholly-owned Government company, in terms of Sr. No. 3 (vi) of Notification 11/2017, as amended, is applicable to its supply and the applicant is eligible for the concessional rate of 12% GST.

The Authority observed that the Notification No. 11/2017 has been further amended by Notification No. 15/2021 and in which the word “a government authority or a government entity” are omitted. Therefore, the impugned service supplied by the applicant to a Government company will not be covered under Sr. No. 3 (vi) of Notification 11/2017.

The Coram of Mr. Rajiv Magoo (Central tax) and Mr. T. R. Ramnani (State tax) has held that “the impugned activity is not covered under Sr. No. 3 (vi) of Notification 11/2017 and therefore the said activity will be covered under the residuary clause (xii) of Sr. No. 3 Notification No. 11/2017 – mentioned above and the rate of GST to be paid by the applicant will be 18% of the taxable value”

Kerala GST dept invites Applications for Amnesty SchemeRead More: https://www.taxscan.in/kerala-gs

The Kerala State GST department has invited applications from traders to avail of the amnesty scheme announced in the state budget 2022. Applications can be submitted online. Businesses can submit options to settle arrears of various taxes like the Kerala Value Added Tax (KVAT), General Sales Tax, Central sales tax, luxury tax, surcharge and Agriculture Income Tax.

As per the scheme announced, there is a 100% waiver on interest and penalties except for KGST arrears after 2005. In the case of KGST defaulters, the penalty has been waived only for arrears after 2005. A 40% waiver will be given to those who remit the arrears in one go and 30% for those who pay up in installments. The amnesty scheme is also applicable for pending cases.

Users can get the arrear details on the GST department’s official website. Businesses should take one-time registration from the department website www.keralataxes.gov.in Separate options can be submitted for each year. Traders can submit options if the arrear details on the website are correct. In other cases, options can be submitted after rectifying the errors. The amount can be remitted online after the taxes offices approve the application.