Key Takeaways:
- Facts of the Case
- Issues Raised by the Department
- Contentions of the Revenue and Assessee
- Analysis and Ruling given by the Supreme Court
The document provides an analysis of the iron and steel industry in India, with a focus on Tata Steel and Steel Authority of India (SAIL). It discusses the industry background and structure, production and consumption scenarios, export-import trends, and SWOT analyses of Tata Steel and SAIL. Key ratios like EBITDA, debt-equity, return on capital employed, inventory turnover, fixed asset turnover, and adjusted profit after tax margin are presented for Tata Steel and SAIL for 2009 and 2013. The ratios show mostly declining trends from 2009 to 2013. PESTEL and technological factors are also analyzed for the industry.
Hindustan Unilever Limited conducted an IPO in July 1995, paying regular dividends starting in 2001 and undergoing a stock split in 2000. The document discusses how an initial investment of 1 lakh rupees in the 1995 IPO would now be worth approximately 900 times that amount, or 9 crores rupees, due to consistent dividend payouts and stock appreciation over the past 27 years.
The document appears to be a student's organizational study report submitted for their Master's degree. It includes an introduction and declaration section, table of contents, and initial sections on the steel industry profile and JSPL Raipur's organizational structure and functional areas like human resources, marketing, materials management, IT, and vigilance.
EXPLAINING ABT GST CLAUSE, RULES REGULATION
Executive Summary…………………………………………….1
i
Background of GST within and outside India
ii
Preparation for GST
iii
Need for GST
2
Objective of Study……………………………………………....9
i
Benefits and simplification of GST model in India
3
Scope of GST…………………………………………………...16
4
Literature Review……………………………………………...17
5
Research model………………………………………………...18
6
Data Collection………………………………………………...18
i
Dual GST model to be introduced in India
ii
GST Portal
iii
GST Registration, GSTIN
iv
Composition Dealer, Applicability
v
Migration to GST
vi
Penalties of not registering under GST
vii
Multiple Registration under GST
viii
Input tax credit
ix
x
GST software
GST rate comparison existing tax system v/s new tax system
7
xi
GST return procedure
Data Analysis…………………………………………..............37
i
GST calculation
ii
GST benefit to common man
iii
Impact of GST (Overall, On India, Indian Economy)
8
Negative List…………………………………………………...46
9
List of Tax not considered under GST……………………….48
10
Limitation (Why no to GST)………………………………….49
11
Conclusion……………………………………………………...51
12
Recommendation…………………………………………........53
Steel Authority of India Limited (SAIL) is a state-owned steel making company headquartered in Delhi, India. It was founded in 1954 and traces its origins to Hindustan Steel Ltd. SAIL operates steel plants located in several Indian states. Its mission is to be a respected world class corporation through concern for people, consistent profitability, and commitment to excellence. SAIL's vision is to be the leader in Indian steel in quality, productivity, and customer satisfaction. The company produces various steel products including plates, rods, rails and pipes. It has plans to significantly increase production capacity of hot metal, crude steel, and saleable steel by 2022.
This document summarizes exempted services under service tax law in India. It discusses 21 categories of exempted services, including:
1. Services provided to specified international organizations.
2. Various health care services such as those provided by clinical establishments, ambulance services, and common bio-medical waste treatment facilities.
3. Legal, educational, religious, and temporary accommodation services provided under certain conditions.
It provides examples of services that would be considered taxable or exempted under each category, and notes key points regarding the scope and conditions of various exemptions. The presentation aims to rationalize and clarify exemptions under India's complex service tax law.
The document summarizes a merger between Tata Steel and Corus Group. Tata Steel acquired Corus, which was four times larger, for $12 billion, making it India's largest foreign takeover. The acquisition created the world's fifth largest steelmaker and expanded Tata Steel's global presence. Negotiations took place over several months, with Tata Steel increasing its initial offer several times before winning Corus shareholders' approval. The rationale for the deal was to increase Tata Steel's production capacity and access new markets, establishing it as a major global steel producer.
The document provides an analysis of the iron and steel industry in India, with a focus on Tata Steel and Steel Authority of India (SAIL). It discusses the industry background and structure, production and consumption scenarios, export-import trends, and SWOT analyses of Tata Steel and SAIL. Key ratios like EBITDA, debt-equity, return on capital employed, inventory turnover, fixed asset turnover, and adjusted profit after tax margin are presented for Tata Steel and SAIL for 2009 and 2013. The ratios show mostly declining trends from 2009 to 2013. PESTEL and technological factors are also analyzed for the industry.
Hindustan Unilever Limited conducted an IPO in July 1995, paying regular dividends starting in 2001 and undergoing a stock split in 2000. The document discusses how an initial investment of 1 lakh rupees in the 1995 IPO would now be worth approximately 900 times that amount, or 9 crores rupees, due to consistent dividend payouts and stock appreciation over the past 27 years.
The document appears to be a student's organizational study report submitted for their Master's degree. It includes an introduction and declaration section, table of contents, and initial sections on the steel industry profile and JSPL Raipur's organizational structure and functional areas like human resources, marketing, materials management, IT, and vigilance.
EXPLAINING ABT GST CLAUSE, RULES REGULATION
Executive Summary…………………………………………….1
i
Background of GST within and outside India
ii
Preparation for GST
iii
Need for GST
2
Objective of Study……………………………………………....9
i
Benefits and simplification of GST model in India
3
Scope of GST…………………………………………………...16
4
Literature Review……………………………………………...17
5
Research model………………………………………………...18
6
Data Collection………………………………………………...18
i
Dual GST model to be introduced in India
ii
GST Portal
iii
GST Registration, GSTIN
iv
Composition Dealer, Applicability
v
Migration to GST
vi
Penalties of not registering under GST
vii
Multiple Registration under GST
viii
Input tax credit
ix
x
GST software
GST rate comparison existing tax system v/s new tax system
7
xi
GST return procedure
Data Analysis…………………………………………..............37
i
GST calculation
ii
GST benefit to common man
iii
Impact of GST (Overall, On India, Indian Economy)
8
Negative List…………………………………………………...46
9
List of Tax not considered under GST……………………….48
10
Limitation (Why no to GST)………………………………….49
11
Conclusion……………………………………………………...51
12
Recommendation…………………………………………........53
Steel Authority of India Limited (SAIL) is a state-owned steel making company headquartered in Delhi, India. It was founded in 1954 and traces its origins to Hindustan Steel Ltd. SAIL operates steel plants located in several Indian states. Its mission is to be a respected world class corporation through concern for people, consistent profitability, and commitment to excellence. SAIL's vision is to be the leader in Indian steel in quality, productivity, and customer satisfaction. The company produces various steel products including plates, rods, rails and pipes. It has plans to significantly increase production capacity of hot metal, crude steel, and saleable steel by 2022.
This document summarizes exempted services under service tax law in India. It discusses 21 categories of exempted services, including:
1. Services provided to specified international organizations.
2. Various health care services such as those provided by clinical establishments, ambulance services, and common bio-medical waste treatment facilities.
3. Legal, educational, religious, and temporary accommodation services provided under certain conditions.
It provides examples of services that would be considered taxable or exempted under each category, and notes key points regarding the scope and conditions of various exemptions. The presentation aims to rationalize and clarify exemptions under India's complex service tax law.
The document summarizes a merger between Tata Steel and Corus Group. Tata Steel acquired Corus, which was four times larger, for $12 billion, making it India's largest foreign takeover. The acquisition created the world's fifth largest steelmaker and expanded Tata Steel's global presence. Negotiations took place over several months, with Tata Steel increasing its initial offer several times before winning Corus shareholders' approval. The rationale for the deal was to increase Tata Steel's production capacity and access new markets, establishing it as a major global steel producer.
This document is a corporate financial analysis report on Bharti Airtel that was submitted by a group of students. It begins with an introduction to the telecommunications industry in India, outlining key milestones such as the establishment of telephone services in 1881 and the opening of the market to competition in 1996. It then discusses the current state of the fast-growing Indian telecom sector and some of the major players, including Bharti Airtel. The objective of the report is to analyze Bharti Airtel's financial statements over the last three years and compare its performance to industry peers.
The document provides information about the steel industry and Steel Authority of India Limited (SAIL). It discusses the history and growth of the steel industry in India. It then summarizes the vision, core values, and operations of SAIL, including details about the Bhilai Steel Plant such as its establishment, production process, awards received, new products developed, and manpower details. The document also covers human resource management functions at SAIL like recruitment, training, and performance appraisal systems.
Tata steel financial analysis with comments on trend and comparative balances...NIRAV CHAUHAN
Here are the key trends analyzed from the balance sheet data:
- Net worth has shown a consistent increase over the years from Rs. 29,704 crores in 2009 to Rs. 52,216 crores in 2012 indicating growth in the company's equity.
- Total debt levels peaked in 2011 at Rs. 28,301 crores due to loans taken to finance acquisitions but have since declined to Rs. 23,694 crores in 2012.
- Fixed assets have risen from Rs. 20,057 crores in 2009 to Rs. 23,486 crores in 2012 as the company continues to invest in expanding its operations.
- Capital work in progress has increased substantially from Rs. 3,488 crores
ITC was established in 1910 as the Imperial Tobacco Company of India and has since diversified into various industries including hotels, paper, food, and information technology. It remains a leading conglomerate with a market capitalization over 100 crore rupees and is headed by Yogesh Chander Deveshwar. ITC aims to expand into new markets and introduces regular new products while diversifying and differentiating its portfolio through cost controls and distribution networks.
Tata Steel acquired Corus Steel in 2007. The acquisition provided Tata Steel with access to Corus' operations in major European markets as well as its advanced technology and high-value steel product portfolio. It helped Tata Steel become one of the top 10 global steel producers. While Corus struggled with debt and high costs, Tata Steel saw the acquisition as an opportunity to enter new markets at a lower cost than building new plants. The deal created a globally diversified steel producer and provided benefits from synergies between the two companies.
- India is the world's third largest producer of crude steel and is expected to become the second largest producer.
- India's crude steel production grew nearly 5% year-over-year to 8 million tons in May 2016, and total steel production is expected to increase 7% in 2016.
- Tata Steel Limited is an Indian multinational steel company headquartered in Mumbai, and is a subsidiary of the Tata Group. It is one of the largest steel producers in India.
This document provides background information on Tata Steel, including its vision, mission, products, pricing strategies, distribution channels, and promotional strategies. Tata Steel is India's largest private sector steel company with an annual production capacity of 31 million tons. It aims to be a global benchmark for value creation and corporate citizenship through its people, products and services, innovative approach, and ethical conduct. The company produces a variety of finished and semi-finished steel products and uses various pricing, placement, and promotional strategies to market these products.
The document summarizes the Indian steel industry. It states that India is the 5th largest steel producer globally and is projected to become the 2nd largest by 2015-2016. The key players in the industry are Tata Steel, Jindal Steel & Power, Jindal Iron & Steel, Essar Steel, and Steel Authority of India. The industry faces challenges such as delays in land acquisition and lack of infrastructure. The government aims to support the industry through infrastructure development and policies promoting foreign investment and SEZs.
- ITC Limited is an Indian conglomerate founded in 1910 in Kolkata as Imperial Tobacco Company of India. It has diversified into various businesses including cigarettes, hotels, paper, FMCG, IT, and agri business.
- ITC's major brands include Classic, Gold Flake, Navy Cut, Candyman, Bingo, Aashirvaad, Sunfeast, YiPPee!, Mint-o and Fiama di Wills. It operates luxury hotels under the WelcomHotel brand.
- ITC has undertaken various social initiatives like e-Choupal for farmers and contributes 1 rupee from every pack of cigarettes sold to support rural development programs. It employs over 26,
Vocational Training on Bhilai Steel PlantPiyush Verma
B.S.P a unit of steel Authority of India Ltd. Inagurated at 1959 by the President of India Dr. Rajendra Prasad with a production capacity of 1.0 million ton.
B.S.P is Indian sole procedure for rails and heavy steel plates and major producer of structural.
The plant is the sole suppliers of the country’s longest rail tracks of 260 meters. With annual production capacity of 3.153MT
1. Tata Group is a successful conglomerate with 114 companies. Tata Steel is one of its companies and a leading steel producer in India.
2. Tata Steel's vision is to become a global benchmark in value creation and corporate citizenship. It was founded in Jamshedpur, India in 1907 and has since expanded operations globally through acquisitions.
3. As of 2015, Tata Steel employs over 86,000 people worldwide and produces a wide range of steel products. It aims to balance business success with social responsibility through various CSR initiatives.
- Tata Steel, established in 1907 and one of the largest steel producers in the world, acquired Corus Steel in 2007 to expand its global reach. Corus Steel, established in 1999 through a merger and one of the top 10 largest steel producers, was looking for a strategic partner to access lower-cost materials and virgin markets.
- The acquisition allowed Tata Steel to gain access to Corus Steel's mature European markets and technology, while providing Corus Steel access to Tata Steel's lower production costs in India. However, the European steel operations have struggled in recent years due to falling production and sales. While the Indian operations have contributed significantly to profits, the acquisition resulted in debt for Tata Steel and a
The Bofors scandal involved kickbacks paid by Swedish arms manufacturer Bofors AB to Indian politicians and officials in exchange for winning a bid to supply howitzer guns to India in the 1980s. Prime Minister Rajiv Gandhi and others were accused of receiving kickbacks totaling Rs. 400 million. The scandal highlighted significant corruption in defense deals and involved numerous investigations over 18 years and 250 crore Rs., but ultimately resulted in acquittals and an inability to prosecute key figures due to missing documents. It represented one of the worst corruption scandals in India at the time.
This document outlines how imports and exports will be treated under the Goods and Services Tax (GST) implemented in India. It notes that imports of goods and services will be treated as inter-state supplies and Integrated GST (IGST) will be levied on imports. Exports will be treated as zero-rated supplies, allowing traders to export goods without paying IGST up front or claim a refund later. The new GST regime aims to follow the destination principle for taxation and provide full set-off on taxes paid during imports.
The document summarizes various exemptions from GST in India, including:
1. Certain goods like live animals, meat, fish, vegetables and fruits are exempt from GST. Common items like sugar, drugs, fertilizers and national flags are also exempt.
2. Many essential services are exempt, including health care, education services up to higher secondary level, religious ceremonies, charitable activities, and pension schemes.
3. Agriculture-related services like warehousing of farm goods, fumigation, crop services and transport are exempt from GST.
4. The government has power to grant exemptions from GST if deemed necessary for public interest.
This document provides information about Indian Oil Corporation Limited (IOCL), India's largest commercial enterprise. It discusses IOCL's history, vision, mission, values, operations, and financial performance for 2016-2017. Some key details include:
- IOCL was formed in 1964 through the merger of two public sector companies and today has a network spanning the country.
- Its vision is to be a major diversified, trans-national energy company playing a role in India's oil security and public distribution.
- In 2016-2017, IOCL had sales of Rs. 4,38,710 crore and profits of Rs. 19,106 crore.
- It owns and operates 11 of India
The document provides information about Jindal Steel & Power Limited (JSPL), an Indian steel and power company. It discusses JSPL's various product lines including rails, beams, plates, coils, semi-finished steel products, wire rods, TMT bars, ferrochrome, silico manganese, and sponge iron. It provides details on the specifications, applications, and current production levels of these different product categories. The document also includes organizational information about JSPL's marketing office in Kolkata and the key personnel there.
1) Tata acquired Corus, which was 3 times larger than Tata Steel's size, making it the world's 5th largest steel maker and India's largest foreign takeover worth $12.11 billion.
2) The Indian steel industry has contributed significantly to India's economic growth and development over the past century. It employs over half a million people and has a cumulative capital investment of around Rs. 1,00,000 crore.
3) Tata Steel has historically played a leading role in India's steel industry and industrialization. It has undertaken major expansion and modernization programs to become one of the most technologically advanced steel producers globally.
- ITC Limited is a large Indian conglomerate company headquartered in Kolkata, employing over 26,000 people across various businesses.
- Between 1995-96 and 2012-13, ITC saw rapid growth and scale-up of its FMCG businesses, with net revenue increasing from Rs. 2,536 crores to Rs. 29,606 crores - a 17-year CAGR of 15.6%.
- ITC aims to make a significant contribution to India's financial, environmental, and social capital by creating multiple drivers of growth while sustaining leadership in tobacco and focusing on triple bottom line performance.
In an August 10 judgment, the Delhi High Court dismissed New Delhi Television’s plea against Income Tax department’s decision to initiate re-assessment proceedings against the media house for carrying out allegedly bogus transactions during 2008-09 and 2009-10 assessment years.
The Supreme Court of India set aside various High Court orders and ruled that reassessment notices issued under Section 148 of the Income Tax Act after March 2021 would be deemed issued under Section 148A, which was introduced in the Finance Act of 2021. This overrides High Court judgments that had quashed notices issued without following the new procedure under Section 148A. The Supreme Court provided taxpayers an opportunity to respond to the authorities within set timelines and ensured notices are processed under the correct amended provisions, in an effort to balance taxpayer rights and the ability of tax authorities to issue valid notices.
This document is a corporate financial analysis report on Bharti Airtel that was submitted by a group of students. It begins with an introduction to the telecommunications industry in India, outlining key milestones such as the establishment of telephone services in 1881 and the opening of the market to competition in 1996. It then discusses the current state of the fast-growing Indian telecom sector and some of the major players, including Bharti Airtel. The objective of the report is to analyze Bharti Airtel's financial statements over the last three years and compare its performance to industry peers.
The document provides information about the steel industry and Steel Authority of India Limited (SAIL). It discusses the history and growth of the steel industry in India. It then summarizes the vision, core values, and operations of SAIL, including details about the Bhilai Steel Plant such as its establishment, production process, awards received, new products developed, and manpower details. The document also covers human resource management functions at SAIL like recruitment, training, and performance appraisal systems.
Tata steel financial analysis with comments on trend and comparative balances...NIRAV CHAUHAN
Here are the key trends analyzed from the balance sheet data:
- Net worth has shown a consistent increase over the years from Rs. 29,704 crores in 2009 to Rs. 52,216 crores in 2012 indicating growth in the company's equity.
- Total debt levels peaked in 2011 at Rs. 28,301 crores due to loans taken to finance acquisitions but have since declined to Rs. 23,694 crores in 2012.
- Fixed assets have risen from Rs. 20,057 crores in 2009 to Rs. 23,486 crores in 2012 as the company continues to invest in expanding its operations.
- Capital work in progress has increased substantially from Rs. 3,488 crores
ITC was established in 1910 as the Imperial Tobacco Company of India and has since diversified into various industries including hotels, paper, food, and information technology. It remains a leading conglomerate with a market capitalization over 100 crore rupees and is headed by Yogesh Chander Deveshwar. ITC aims to expand into new markets and introduces regular new products while diversifying and differentiating its portfolio through cost controls and distribution networks.
Tata Steel acquired Corus Steel in 2007. The acquisition provided Tata Steel with access to Corus' operations in major European markets as well as its advanced technology and high-value steel product portfolio. It helped Tata Steel become one of the top 10 global steel producers. While Corus struggled with debt and high costs, Tata Steel saw the acquisition as an opportunity to enter new markets at a lower cost than building new plants. The deal created a globally diversified steel producer and provided benefits from synergies between the two companies.
- India is the world's third largest producer of crude steel and is expected to become the second largest producer.
- India's crude steel production grew nearly 5% year-over-year to 8 million tons in May 2016, and total steel production is expected to increase 7% in 2016.
- Tata Steel Limited is an Indian multinational steel company headquartered in Mumbai, and is a subsidiary of the Tata Group. It is one of the largest steel producers in India.
This document provides background information on Tata Steel, including its vision, mission, products, pricing strategies, distribution channels, and promotional strategies. Tata Steel is India's largest private sector steel company with an annual production capacity of 31 million tons. It aims to be a global benchmark for value creation and corporate citizenship through its people, products and services, innovative approach, and ethical conduct. The company produces a variety of finished and semi-finished steel products and uses various pricing, placement, and promotional strategies to market these products.
The document summarizes the Indian steel industry. It states that India is the 5th largest steel producer globally and is projected to become the 2nd largest by 2015-2016. The key players in the industry are Tata Steel, Jindal Steel & Power, Jindal Iron & Steel, Essar Steel, and Steel Authority of India. The industry faces challenges such as delays in land acquisition and lack of infrastructure. The government aims to support the industry through infrastructure development and policies promoting foreign investment and SEZs.
- ITC Limited is an Indian conglomerate founded in 1910 in Kolkata as Imperial Tobacco Company of India. It has diversified into various businesses including cigarettes, hotels, paper, FMCG, IT, and agri business.
- ITC's major brands include Classic, Gold Flake, Navy Cut, Candyman, Bingo, Aashirvaad, Sunfeast, YiPPee!, Mint-o and Fiama di Wills. It operates luxury hotels under the WelcomHotel brand.
- ITC has undertaken various social initiatives like e-Choupal for farmers and contributes 1 rupee from every pack of cigarettes sold to support rural development programs. It employs over 26,
Vocational Training on Bhilai Steel PlantPiyush Verma
B.S.P a unit of steel Authority of India Ltd. Inagurated at 1959 by the President of India Dr. Rajendra Prasad with a production capacity of 1.0 million ton.
B.S.P is Indian sole procedure for rails and heavy steel plates and major producer of structural.
The plant is the sole suppliers of the country’s longest rail tracks of 260 meters. With annual production capacity of 3.153MT
1. Tata Group is a successful conglomerate with 114 companies. Tata Steel is one of its companies and a leading steel producer in India.
2. Tata Steel's vision is to become a global benchmark in value creation and corporate citizenship. It was founded in Jamshedpur, India in 1907 and has since expanded operations globally through acquisitions.
3. As of 2015, Tata Steel employs over 86,000 people worldwide and produces a wide range of steel products. It aims to balance business success with social responsibility through various CSR initiatives.
- Tata Steel, established in 1907 and one of the largest steel producers in the world, acquired Corus Steel in 2007 to expand its global reach. Corus Steel, established in 1999 through a merger and one of the top 10 largest steel producers, was looking for a strategic partner to access lower-cost materials and virgin markets.
- The acquisition allowed Tata Steel to gain access to Corus Steel's mature European markets and technology, while providing Corus Steel access to Tata Steel's lower production costs in India. However, the European steel operations have struggled in recent years due to falling production and sales. While the Indian operations have contributed significantly to profits, the acquisition resulted in debt for Tata Steel and a
The Bofors scandal involved kickbacks paid by Swedish arms manufacturer Bofors AB to Indian politicians and officials in exchange for winning a bid to supply howitzer guns to India in the 1980s. Prime Minister Rajiv Gandhi and others were accused of receiving kickbacks totaling Rs. 400 million. The scandal highlighted significant corruption in defense deals and involved numerous investigations over 18 years and 250 crore Rs., but ultimately resulted in acquittals and an inability to prosecute key figures due to missing documents. It represented one of the worst corruption scandals in India at the time.
This document outlines how imports and exports will be treated under the Goods and Services Tax (GST) implemented in India. It notes that imports of goods and services will be treated as inter-state supplies and Integrated GST (IGST) will be levied on imports. Exports will be treated as zero-rated supplies, allowing traders to export goods without paying IGST up front or claim a refund later. The new GST regime aims to follow the destination principle for taxation and provide full set-off on taxes paid during imports.
The document summarizes various exemptions from GST in India, including:
1. Certain goods like live animals, meat, fish, vegetables and fruits are exempt from GST. Common items like sugar, drugs, fertilizers and national flags are also exempt.
2. Many essential services are exempt, including health care, education services up to higher secondary level, religious ceremonies, charitable activities, and pension schemes.
3. Agriculture-related services like warehousing of farm goods, fumigation, crop services and transport are exempt from GST.
4. The government has power to grant exemptions from GST if deemed necessary for public interest.
This document provides information about Indian Oil Corporation Limited (IOCL), India's largest commercial enterprise. It discusses IOCL's history, vision, mission, values, operations, and financial performance for 2016-2017. Some key details include:
- IOCL was formed in 1964 through the merger of two public sector companies and today has a network spanning the country.
- Its vision is to be a major diversified, trans-national energy company playing a role in India's oil security and public distribution.
- In 2016-2017, IOCL had sales of Rs. 4,38,710 crore and profits of Rs. 19,106 crore.
- It owns and operates 11 of India
The document provides information about Jindal Steel & Power Limited (JSPL), an Indian steel and power company. It discusses JSPL's various product lines including rails, beams, plates, coils, semi-finished steel products, wire rods, TMT bars, ferrochrome, silico manganese, and sponge iron. It provides details on the specifications, applications, and current production levels of these different product categories. The document also includes organizational information about JSPL's marketing office in Kolkata and the key personnel there.
1) Tata acquired Corus, which was 3 times larger than Tata Steel's size, making it the world's 5th largest steel maker and India's largest foreign takeover worth $12.11 billion.
2) The Indian steel industry has contributed significantly to India's economic growth and development over the past century. It employs over half a million people and has a cumulative capital investment of around Rs. 1,00,000 crore.
3) Tata Steel has historically played a leading role in India's steel industry and industrialization. It has undertaken major expansion and modernization programs to become one of the most technologically advanced steel producers globally.
- ITC Limited is a large Indian conglomerate company headquartered in Kolkata, employing over 26,000 people across various businesses.
- Between 1995-96 and 2012-13, ITC saw rapid growth and scale-up of its FMCG businesses, with net revenue increasing from Rs. 2,536 crores to Rs. 29,606 crores - a 17-year CAGR of 15.6%.
- ITC aims to make a significant contribution to India's financial, environmental, and social capital by creating multiple drivers of growth while sustaining leadership in tobacco and focusing on triple bottom line performance.
In an August 10 judgment, the Delhi High Court dismissed New Delhi Television’s plea against Income Tax department’s decision to initiate re-assessment proceedings against the media house for carrying out allegedly bogus transactions during 2008-09 and 2009-10 assessment years.
The Supreme Court of India set aside various High Court orders and ruled that reassessment notices issued under Section 148 of the Income Tax Act after March 2021 would be deemed issued under Section 148A, which was introduced in the Finance Act of 2021. This overrides High Court judgments that had quashed notices issued without following the new procedure under Section 148A. The Supreme Court provided taxpayers an opportunity to respond to the authorities within set timelines and ensured notices are processed under the correct amended provisions, in an effort to balance taxpayer rights and the ability of tax authorities to issue valid notices.
Dear Patron
Here we are with the Thirty second successive issue of our monthly ‘Missive’.
We trust you will enjoy reading this Missive, even while soaking in the contents. We would very much appreciate your feedback which consistently helps us in improving and upgrading the contents.
Thanks and regards,
Knowledge Management Team
This document is a newsletter from Utsav Shah & Associates that provides summaries of recent tax law developments in India. It discusses several Circulars and clarifications issued by the Central Board of Direct Taxes regarding issues like indirect transfers, cash transaction reporting requirements, identification of potential non-filers, and the Direct Tax Dispute Resolution Scheme. It also summarizes several important court judgments dealing with issues such as depreciation of goodwill, attribution of profits to a permanent establishment, and the applicability of Section 14A disallowance.
2015 case review: High ATO auccess rate continuesJoanne Dunne
This document summarizes tax judgments from the Federal Court, Full Federal Court, and High Court of Australia from January to December 2015. It shows that the ATO was highly successful in 2015, winning 76.5% of cases, continuing an improving trend over the past five years due to stronger case selection and management. The summary also analyzes key cases, particularly in financial services, and notes some cases where taxpayers appealed decisions.
The document discusses the tax status of two companies, OPE-PB and OMEL-PB, which operate as branches of non-resident companies in Pakistan. For OPE-PB, amended tax assessments were issued for 2013-2016 and appeals are pending adjudication. No losses are available to be carried forward but pre-CCP expenditures of $3.653 million can be used for future tax adjustments. For OMEL-PB, tax losses, dry hole expenditures, and pre-CCP expenditures are available to be used for future tax adjustments but deferred tax assets have not been fully recognized in financial statements.
The document provides an overview of India's Faceless Assessment Scheme for transparent taxation. Key points include:
1. The scheme aims to eliminate physical interface between taxpayers and tax officers to make assessments more efficient and impartial.
2. Assessments will be conducted by various centralized units - National e-Assessment Centre, Regional e-Assessment Centres, Assessment Units, Verification Units, Technical Units, and Review Units.
3. The procedure involves notices being served by the National Centre and cases assigned to Assessment Units, who may request additional information or verification by other units.
The document discusses an order by the Bombay High Court regarding Vodafone India issuing shares to its non-resident holding company, Vodafone Holdings. The key details are:
1) Vodafone India issued shares to Vodafone Holdings to raise funds for a telecommunications project in India.
2) The tax authorities made a transfer pricing adjustment of over Rs. 1,300 crores regarding the share issuance price.
3) Vodafone India challenged this in the Bombay High Court. The High Court ultimately ruled in favor of Vodafone India, finding that the share issuance was not subject to transfer pricing regulations.
The document provides an overview of India's Faceless Assessment Scheme. Key points include:
1. The scheme aims to make the tax assessment process faceless, paperless, and anonymous through the use of technology.
2. Assessments will be conducted by assessment units organized under National and Regional E-Assessment Centers, removing direct interaction between taxpayers and individual tax officers.
3. Most income tax cases will be eligible for faceless assessment, except for certain sensitive cases involving serious tax evasion.
4. The document outlines the legal provisions, organizational structure, and step-by-step procedures for conducting assessments under the new faceless system.
This document discusses income escaping assessments and best judgment assessments under the Indian Income Tax Act. It provides an overview of the types of assessments, procedures for best judgment assessments, time limits, requirements for income escaping assessments, and key principles from judicial precedents. The key points are:
1) A best judgment assessment can be made if a taxpayer fails to file a return or comply with notices, and the assessment is made based on the assessing officer's best judgment using limited available materials.
2) An income escaping assessment can be made if the assessing officer has reason to believe income has escaped assessment, and notice must be issued and reasons recorded before such an assessment.
3) Time limits for completion of assessments are generally
Dear Patron
Here we are with the Twenty Sixth successive issue of our monthly ‘Missive’.
We trust you will enjoy reading this Missive, even while soaking in the contents. We would very much appreciate your feedback which consistently helps us in improving and upgrading the contents.
Thanks and regards,
Knowledge Management Team
S.P.Nagrath & Co.
The snippet covers judgements on inter corporate loans, issue of shares and indirect transfers.
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We trust you will enjoy reading this Missive, even while soaking in thecontents. We would very much
appreciate your feedback which consistently helps us in improving and upgrading the contents.
TransPrice Times - 16th - 28th February 2018Akshay KENKRE
Dear Members,
We are pleased to present to you ‘TransPrice Times – edition 16th - 28th February 2018’.
This periodical covers key court rulings on Transfer Pricing documentation, attribution of income to a permanent establishment; and advertising, marketing & promotion expenses. Apart from this, recent news relating to Advance Pricing Agreements and OECD updated guidance on Country-by-Country Reporting have been discussed in the periodical.
Thank You and Happy Reading!!
Dear Patron,
Here we are with the Thirty forth successive issue of our monthly ‘Missive’.
We trust you will enjoy reading this Missive, even while soaking in the contents. We would very much appreciate your feedback which consistently helps us in improving and upgrading the contents.
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Knowledge Management Team
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Validity of Notice Issued for Income Escaping Assessment - Analysis of SC Ruling
1. VALIDITY OF NOTICE ISSUED FOR INCOME
ESCAPING ASSESSMENT
NEW DELHI TELEVISION LTD VS. DEPUTY
COMMISSIONER OF INCOME TAX [2020] 116
taxmann.com 151 (SC)
CA Jugal Gala
3. LEGENDS USED
AO Assessing Officer
AY Assessment Year
DRP Dispute Resolution Panel
FY Financial Year
HC High Court
NDTV New Delhi Television Ltd
NNBV NDTV Networks BV
NNIH NDTV Networks International Holdings BV
PCIT Principal Commissioner of Income Tax
SC Supreme Court
TP Transfer Pricing
4. PRESENTATION SCHEMA
Facts of the Case
Issuance of Notice and Issues
Raised
Contentions and
Observations
Final Ruling of the Court Conclusion
6. ORIGINAL ASSESSMENT
*A step-up coupon bond is a bond that pays a lower initial interest rate but includes a feature that allows for rate
increases at periodic intervals.
• NDTV Ltd (the ‘assessee’) is an Indian company engaged in running television channels.
• Assessee had filed a loss return for AY 08-09, which was selected for scrutiny (original assessment)
About the Assessee
• Assessee’s indirect subsidiary in UK (NNLPC), during FY 07-08, had issued step-up coupon bonds*
of $100 million (Rs.405.09 crores), redeemable after 5 years, at a premium of 7.5%
• Assessee had agreed to furnish corporate guarantee for such issue. The same was disclosed by the
assessee in the return but no corporate guarantee fee was charged for the same
• These bonds were redeemed in advance by NNLPC at a discounted price of US$74.2 million which
resulted in a gain on buy back of Rs.128.28 crores (US$100 million – US$74.2 million = US$25.8
million expressed in equivalent amount of INR)
What was the subject matter of original assessment?
• NNPLC had only a small capital of Rs.40 lakhs and did not have any business activities, any fixed
assets, any place of business except a postal address in UK
• NNLPC, a new entrant without any performance record and a loss making company, had invested
in loss making companies and had its share's face value of Rs.40-45 per share and book value in the
negative.
Facts about the counter party (NNLPC)
7. FINAL ORDER OF ORIGINAL ASSESSMENT
NNLPC
HAD
NO
FINANCIAL
WORTH
Though the assessee had not
actually extended any corporate
guarantee, the AO held that NNLPC
had no financial worth, and hence
NNLPC could not have raised such a
huge amount ($100 million) without
NDTV’s assurance.
ARM’S
LENGTH
PRINCIPLE
TO
BE
APPLIED
Accordingly, TP adjustment was made
to impose a guarantee fee to be added
to its income, vide final assessment
order dated 03-08-2012 (for AY 2008-
09)
8. WHY REOPENING OF CASE?
• On 31.03.2015, the AO issued notice u/s 148 stating that the Department has “reasons to believe” that
net income chargeable to tax for AY 2008-09 has escaped assessment
• Reasons communicated by the AO for invoking Sec 148 relied upon the following:
AO’s order for AY 2009-10
proposing addition to income
of assessee on account of
monies raised through
assessee’s few other foreign
subsidiaries including NNLPC
DRP’s order dated 31-12-2013
which held one of the foreign
transaction of assessee to be a
sham and also contended upon
assessee’s guarantee
transaction with NNLPC
Petitions filed by minority
shareholders hinting round
tripping of funds by the
assessee
NNLPC placed under liquidation
The above is elaborated in further slides
1
3
2
9. REVENUE’S ORDERS IN PURSUANT YEARS
For AY 09-10
AO had proposed an addition of
Rs.642 crores on account of
money raised by the assessee
through its other foreign
subsidiaries NDTV BV
Netherlands, NNBV, Netherlands,
NNIH, Netherlands including
NNLPC (UK)
DRP’s order dated
31.12.2013
On consideration of the facts, DRP confirmed the addition
The DRP also came to a conclusion that all transactions with
subsidiaries in Netherlands were sham and bogus
transactions and that the same were done with a view to get
the undisclosed income, for which tax had not been paid, back
to India by circuitous round tripping
Further, the DRP also enhanced the assessee's income by
another Rs.254 crores on account of unexplained unsecured
loans
Though the DRP did not rule out the transaction of “issue of step-up coupon bonds by NNLPC” to be a sham one,
the said transaction was contended upon and the DRP noted that “given the financial strength of NNLPC, it is
doubtful that investors purchased the Step-up coupon bonds only to resell at a loss in November 2009”.
Therefore, the AO inferred that funds received by NNPLC were actually the funds of the assessee as it could be
“naturally inferred” from the fact that it was unnatural for anyone to make such a huge investment in a virtually
non-functioning, loss-making company and thereafter get back only 72% of their original investment.
On petition made
to DRP by assessee
10. OTHER EVENTS RELIED UPON BY AO
The AO made mention of complaints received from a
minority shareholder in which it is alleged that the money
introduced in NNPLC was shifted to another subsidiary of
the assessee in Mauritius from where it was taken to a
subsidiary of the assessee in Mumbai and finally to the
assessee.
The revenue also placed reliance on various other tax
evasion petitions filed by the shareholders of NDTV in 2014
and 2015 raising issues of tax evasion by NDTV by raising
funds amounting to Rs.1100 crores through its foreign
subsidiaries
Further, NNPLC itself was placed under liquidation on
28.03.2011
NDTV Ltd, India
NDTV Network
Plc, UK (NNLPC)
Issues Step-up
Coupon Bonds
Mauritius
Subsidiary
Mumbai
Subsidiary
Indirect Subsidiary
11. CHRONOLOGY OF EVENTS
July 2007
Bonds issued by NNLPC
for which assessee
agrees to give corporate
guarantee
September 2008
Loss Return for AY 08-09
filed by NDTV.
Subsequently, picked up
for scrutiny
November 2009
Bonds prematurely
redeemed at a
discounted price of
$72.4 million
March 2011
NNLPC placed under
liquidation
03-08-2012
Final assessment order
passed for scrutiny
assessment for AY 2008-
09
31-12-2013
DRP order passed with
respect to money raised
by the assessee in its
foreign subsidiaries
1)FY 2014-15
2)Complaints raised by
minority shareholders,
hinting round-tripping of
funds by assessee
31-03-2015
Notice u/s 148 issued to
assessee
August 2017
Petition filed in HC,
Ruled in favour of
Revenue.
13. SECTION 147 and 148 – INCOME ESCAPING ASSESSMENT
Section 148 empowers the AO to issue a notice, to invoke the powers vested with him u/s 147, within the time
frame, as prescribed in section 149. It is to be noted that Sec 147 has to be read parallel with Sec 149 for the time
period of issuance of notice
Sec 147 empowers the AO to assess or reassess such income chargeable to tax which the AO states that he has
“reasons to believe”, has escaped assessment for any AY
However, if earlier, a scrutiny assessment or an assessment u/s 147 was already made, a fresh assessment u/s 147
cannot be made after expiry of 4 years unless such income has escaped assessment by reason of failure on part
of the assessee to “disclose fully and truly all material facts” necessary for his assessment and certain other
instances*
Further, the above mentioned condition shall not apply in a case where any income in relation to any asset
(including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for
any assessment year
Section 147
Section 148
*instant relevant for the case-in-hand is discussed here
14. SECTION 149(1): TIME LIMIT FOR NOTICE U/S 148
Time Limit for issue of
notice u/s 148
- Sec 149(1)
In case of income in
relation to any asset
(including financial
interest in any entity)
located outside India, has
escaped assessment
Notice u/s 148 has to
be issued within 16
years from the end of
relevant AY
Where the income which
has escaped assessment
amounts to or is likely to
amount to >= ₹ 1 lakh
Notice u/s 148 has to
be issued within 6
years from the end of
the relevant AY*
In any other case
Notice u/s 148 has to
be issued within 4
years from the end of
the relevant AY
15. TIME PERIOD UNDER CONTENTION
Assessee was already subject to scrutiny assessment (in original assessment pertaining to AY 08-09)
Therefore, action u/s 147 can be taken only till lapse of 4 years from the end of the relevant AY i.e. by 31-03-2013
On parallel reading of Sec 147 with Sec 149, it is understood that notice for taking action against income escaping
assessment (when scrutiny assessment is made earlier) can be issued beyond 4 years but within 6 years only when
there is failure on part of the assessee to disclose material facts and the income escaping assessment is likely to be
more than Rs.1 lakh
In the case in hand, income escaping assessment due to non-disclosure of material facts on assessee’s part, is
contended to be Rs.405.09 crores (i.e. $100 million raised by bonds in equivalent INR). Hence, the time limit of 6 years
would apply
The notice is issued by AO on 31-03-2015 i.e. exactly within 6 years from the end of the relevant AY 08-09
Further, it is to be noted that in case of income relating to a foreign entity, a limitation of 16 years would apply for the
issue of notice u/s 148.
Hence, in the case-in-hand, if the transaction involving foreign entity is taken into consideration for issuing notice u/s
148, then the AO can issue notice upto 31.03.2025 i.e. 16 years + 31.03.2009 (discussed in detail in further slides)
16. NOTICE U/S 148 FURNISHED BY AO
The AO’s “communication of reasons” of furnishing notice u/s 148 contained the following main
contentions
In view of the facts and circumstances of the assessee and considering the findings of the DRP holding
the funds received by NNPLC as the funds of the assessee under sham transactions, there is reason to
believe that the funds amounting to Rs. 405.09 crores introduced into the books of NNPLC during the FY
2007-08 in the form of Step Up Coupon Bonds pertain to the assessee only. I have therefore reason to
believe that the income of the assessee for AY 2008-09 amounting to at least Rs.405.09 crores has
escaped assessment. It is also recorded that the escapement is due to failure on the part of the
assessee to disclose fully and truly all facts material for assessment.
Contentions of the Assessee to the above notice
Contention Relevance
There was no failure to disclose fully and truly all material
facts necessary to make an assessment.
Hence, limitation of 6 years wouldn’t apply to issue
notice. Notice issued after 4 years is not valid
Proceedings had been initiated on a mere change of opinion
of the AO. Because, earlier AO had treated the transaction
to be genuine by levying guarantee fees and adding it back
to the income of the assessee
Hence, AO did not have “reasons to believe” to
reopen the assessment
17. AO’s DISPOSAL OF REJECTIONS
• The claim of the assessee was disposed off by the AO vide order dated 23-11-2015 wherein, the
AO held that there was non-disclosure of material facts by the assessee and,
• The notice would be within limitation since NNPLC was a foreign entity and income was being
derived through this foreign entity.
• Hence, the case of the assessee would fall within the 2nd proviso of Sec 147 and the extended
period of 16 years would be applicable.
• It is to be noted here that the assessee was put to knowledge of second proviso being invoked
(i.e. which stipulates 16 years time period) only in the “disposal of rejections” and not in the first
notice u/s 148
- Aggrieved, the assessee filed a writ petition in the High Court challenging the notice, where it was held
that the impugned reassessment notice is valid in law and can be sustained.
- The writ petition was dismissed, against which an appeal was preferred to the Supreme Court.
18. SUMMARY OF COMMUNICATION TO ASSESSEE ON
REOPENING OF CASE
First notice dated
31-03-2015
• AO issued notice u/s 148 intimating that he has “reasons to believe” that
assessee’s income pertaining to AY 08-09 has escaped assessment
Assessee’s reply to notice • Assessee requested reasons for issue of notice u/s 148
Communication of
reasons by Revenue on
04-08-2015
• “Assessee is guilty of non-disclosure of material facts with regard to income
escaping assessment and hence notice is issued within time period of 6
years”
Assessee’s objections
• “All facts were known to the Revenue at the time of original scrutiny
assessment”
Revenue’s disposal of
rejections vide order
dated 23-11-2015
• “There was non-disclosure of material facts and since foreign entity is
involved, the provisions of second proviso would apply and thereby the
time period of 16 years applies in this case”
1
2
3
4
5
19. CONTD…
Non-disclosure of material
facts
Income escaping
assessment > 1 lakh
First proviso to
Sec 147 applies
Hence, time limit for issuing notice is 6
years from end of relevant AY (i.e
within 31.03.2015)
Income escaping
assessment relates to
foreign entity
Second proviso to
Sec 147 applies
Sec 149(1)(b)
Hence, time limit for issuing notice is
16 years from end of relevant AY (i.e.
within 31.03.2025)
Sec 149(1)(c)
The following summaries as to how the Revenue contended to take benefit of 6 years and 16 years
First notice u/s 148
Disposal of rejections
20. ISSUES BEFORE THE HON’BLE SUPREME COURT
Whether the revenue had
valid reason to believe that
undisclosed income had
escaped assessment?
Whether the assessee did not
disclose fully and truly all
material facts during original
assessment which led to the
finalization of the assessment
order and undisclosed income
escaping detection?
Whether the notice dated 31-
3-2015 along with reasons
communicated on 04.08.2015
could be termed to be a
notice invoking the provisions
of the second proviso to
section 147 of the Act?
It may be noted that the Court did not have to look into the merits of the allegations made against the assessee
i.e. the genuineness of the transactions
Given the facts of the case, the Hon’ble SC had to decide on the following three issues:
22. Q1: WHETHER THE REVENUE HAD VALID REASON TO BELIEVE
THAT UNDISCLOSED INCOME HAD ESCAPED ASSESSMENT?
• Once the transaction of step-up coupon bonds was scrutinized in detail and been accepted to
be correct, then the revenue cannot re-open the same and doubt the genuineness of the
transaction.
• While the DRP regarded the Netherlands transaction as a sham, transaction of bonds issued
by UK subsidiary (NNLPC) was not questioned.
• Attempt by Revenue to deliberately mix-up transactions relating to the Netherlands subsidiary
with the UK subsidiary is not tenable.
• Hence, there was no fresh material before AO but only a mere change of opinion (i.e. only
because DRP held other foreign transactions of the assessee to be a sham, AO contended the
same for assessee’s transaction with UK subsidiary (NNLPC) without material facts to
substantiate the same)
Assessee’s contention
• At the stage of issue of show cause notice on 31-03-2015, the revenue only has to establish a
tentative and prima facie ground to show that it had “reasons to believe” that income has
escaped assessment
• Only because fresh tangible material (DRP order, complaints of minority shareholders) was
discovered subsequent to the passing of the original assessment order for AY 2008-09, it
cannot be said that the AO did not have reasons to believe that income had escaped
assessment
Revenue’s contention
23. PRINCIPLE PROVIDED
Mere change of opinion of the AO is not sufficient to meet the standard of
'reasons to believe’
However, on perusal of past judicial precedents, it is clear that subsequent
facts which comes to the knowledge of the AO can be taken into account to
decide whether the assessment proceedings can be re-opened or not.
• It was in Dec ‘13 that the DRP in the case of AY 2009-10 raised doubts about the corporate structure
of the assessee and its subsidiaries.
• Tax evasion petitions were filed by minority shareholders in 2014 and 2015
It is opined that the following material disclosed in assessment proceedings
for subsequent years was sufficient to form a prima facie view.
Accordingly, it was held that, in the light of new information, there were
reasons to believe that income had escaped assessment in this case and it
wasn’t a mere change of opinion.
24. Q2: WHETHER THE ASSESSEE DID NOT DISCLOSE FULLY AND
TRULY ALL MATERIAL FACTS DURING ORIGINAL ASSESSMENT?
The case of the assessee was that it
had disclosed all facts which were
required to be disclosed during the
original assessment
The case of the revenue is that the
assessee did not disclose:
• The amount subscribed by each of the
entities and the management structure of
these companies.
• Relationship of the subscribers with the
assessee
• Details of the subsidiaries in its final
accounts, for the relevant period as was
mandatory under Companies Act
25. The assessee had made a disclosure about having agreed to stand guarantee for the transaction by NNPLC, the
factum of the issuance of convertible bonds, the entities which subscribed to the bonds and even their redemption
at a discounted price, before the assessment for AY 2008-09 was finalized.
In other proceedings relating to other subsidiaries (M/s. NDTV Labs Ltd. and M/s. NDTV Lifestyle Ltd), the same AO
had knowledge of addresses and the consideration paid by each of the bondholders.
Where the assessee had obtained an exemption from the competent authority, as prescribed by the Companies Act,
1956, from providing details of its subsidiaries in its final accounts, balance sheets, etc., it cannot be said that the
assessee was bound to disclose this to the AO.
In the given case:
• The assessee had disclosed all primary facts before the AO
• Basis the facts disclosed to him, the AO did not doubt the genuineness of the transaction set up by the
assessee.
• Discovery of facts subsequent to the assessment order cannot lead to the conclusion that there is non-
disclosure of true and material facts by the assessee
• It is for the AO to decide what inferences of facts can be reasonably drawn and what legal inferences have
ultimately to be drawn
PRINCIPLE PROVIDED
In holding as above, the SC differed with the HC’s view, wherein it was held that where the transaction of a
particular AY is found to be a bogus transaction, the disclosures made could not be said to be all "true" and "full".
26. CONTD…
"...It is evident from these facts that second proviso to section 147 is clearly attracted in this case and first
proviso to section 147 is not applicable to facts of this case....
…The second condition that the income should have escaped assessment due to failure on the part of the
assessee to disclose fully and truly all material facts necessary for making assessment is not relevant to
decide issue before the Hon'ble Court”
Revenue before SC There is non-disclosure and hence limitation of 6 years shall apply
Revenue before HC Foreign entity is involved and hence second proviso is invoked and thereby
16 years period would apply
Supreme Court’s say - The revenue cannot now turn around and urge that the assessee is
guilty of nondisclosure of facts.
- Even otherwise, the assessee had fully and truly disclosed all material
facts necessary for its assessment and, therefore, the benefit of the
extended period of limitation of 6 years was not available.
The SC also took note of the Revenue’s contradicting contention before HC and SC:
To quote a portion of the counter-affidavit, submitted in response to the assessee’s objection of
the reasons given by the AO,
27. Q3: WHETHER NOTICE COULD BE TERMED TO BE A NOTICE
INVOKING THE PROVISIONS OF THE SECOND PROVISO TO SEC 147?
CASE
OF
THE
ASSESSEE
No income was derived from the foreign
entity and a loan cannot be termed to be
an asset or an income
CASE
OF
THE
REVENUE
Mere non-naming of the second proviso
in the notice does not help the assessee.
It was urged that even if the source of
power to issue notice has been wrongly
mentioned, but all relevant facts were
mentioned, then the notice can be said
to be notice under the provision which
empowers the revenue to issue such
notice.
- It is to be noted with facts and extracts of notice mentioned earlier, that though AO made mention of assesee’s
transactions with foreign entities, no where in the first notice of Sec 148 issued to assessee, the Revenue had
mentioned of invoking second proviso of Sec 147 (i.e. to take benefit of 16 years because a foreign entity was
involved)
- With regard to this, the assessee contended as to “what if second proviso was invoked” and the Revenue
contended as to “why the first notice implied invocation of second proviso”
- The same is summarised below:
28. PRINCIPLE PROVIDED
There was no mention of any foreign entity in notice sent by AO on 31-03-
2015
• Nothing in such “communication of reasons” from the Revenue’s end indicated that the revenue
was intending to apply the extended period of 16 years.
• It was in the order of rejection that for the first time, a reference was made to the second proviso
by the revenue.
Even after the assessee was specifically asked for reasons, the revenue only
showed that the income escapement was due to the non-disclosure of
material facts.
Assessee must be put to notice of all the provisions on which the revenue
relies upon. He cannot be taken by surprise at the stage of rejection of its
objections or at the stage of proceedings
• The assessee cannot be deprived of this chance while replying to the notice
Had a notice been issued to the assessee stating that it relies upon the second proviso, the
assessee would have had a chance to show that it was not deriving any income from any foreign
asset or that the asset did not belong to it or any other ground which may be available.
30. FINAL RULING
The court
established that
there were
sufficient reasons
to believe on the
part of the AO to
reopen the
assessment
However,
failure of the
Revenue to show
non-disclosure of
facts and the
notice having
been issued after
a period of 4
years*
Appeal allowed.
Ruled in favour of
the assessee
- Further, since Revenue’s first notice u/s 148 was silent on invoking second proviso, the SC held that the same
cannot be invoked to take benefit of 16 years
- However, the Court has not expressed any opinion on whether the revenue could take benefit of the second
proviso or not (i.e. whether extension of loan to a foreign entity can be considered for income escaping
assessment and thereby the benefit of 16 years).
- Therefore, the revenue may issue fresh notice taking benefit of the second proviso if otherwise permissible
under law. Both the parties shall be at liberty to raise all contentions with regard to the validity of such notice.
*Where non-disclosure of all material facts necessary for the assessment, could not be proved, the benefit of
extended period of 6 years was not available to the AO.
32. CURRENT PROVISIONS FOR INCOME ESCAPING
ASSESSMENT
• Vide Finance Act, 2021, various amendments were made in the assessment proceedings as the tax
administration in India is revamping into digitalization
• Amendments (w.e.f. AY 20-21) were also made in relevant sections for initiating action for income
escaping assessment (Sec 147, 148 and 149), notably, the time limit for issuance of notice u/s 148 was
put forward as below
In normal cases Within 3 years from the end of the relevant AY, if
permission granted by Principal Commissioner or
Principal Director or Commissioner or Director
In cases where income escaping assessment,
represented in the form of asset, amounts to Rs.50
lakhs or more
Within 10 years from the end of the relevant AY, if
permission granted by PCIT or Principal Director
General
The amended Sec 149 gave powers to issue notice for income escaping assessment represented in the form of
asset, for cases falling under 3 to 10 years category
It was clarified that asset shall include immovable property, being land or building or both, shares and
securities, loans and advances, deposits in bank account
33. KEY LEARNINGS
Though the underlying transaction which is the subject matter of the notice being issued is hinted to be a sham, it is
not the jurisdiction of the Court to get into its merits and the SC has just ruled out if the notice issued in first
instance itself is valid under the law
Revenue has to be specific in communicating to the assessee with proper mention of the law in order to avoid
ambiguity
As regards the issue of notice invoking second proviso, the Court is silent as to whether the said transaction of
“extending guarantee” can fall within its ambit and it is left to the Revenue to proceed with fresh notice, on its say
Therefore, the veracity of the transaction and the quantum of tax evasion is yet under loggerheads
It is now to be noted that the AO can proceed to issue a fresh notice invoking second proviso because 16 year time
limit ends by 31.03.2025 only. In such a case, the assessee’s transaction, though directly does not relate to income in
relation to a foreign entity, if studied in depth pertaining to round tripping of funds, may eventually be subject to
scrutiny
Since, the newly amended Sec 149 which imposes a new timeline of 3 years or 10 years (subject to certain
conditions) is made effective from AY 2020-21, the same would not be applicable to the case-in-hand which pertains
to AY before 01.04.2021 i.e. AY 08-09.