Pre-Show Cause Notice Consultation Not An Empty Formality, Mandatory When Demand Is Over ₹50 Lakhs: Bombay High Court

The Bombay High Court has held that pre-show cause notice consultation is not an empty formality; mandatory before the show cause notice (SCN) in demands above Rs. 50 lakhs. The question before Justices M.S. Sonak and Advait M. Sethna was whether a pre-consultation notice would be mandatory before issuing show cause notices where the tax demand exceeds Rs. 50 Lakhs. The bench opined that ….The requirement of a pre-consultative process cannot be dismissed as some empty formality....

Proceedings For Conciliation & Arbitration Under MSME Act Cannot Be Clubbed: Bombay High Court

The Bombay High Court has set set aside two ex-parte orders passed by the Micro and Small Enterprises Facilitation Council (MSEFC), Daman holding that the council acted in breach of mandatory two stage procedures under the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act”). The court remitted the matter for fresh arbitration in accordance with law. A bench led by Justice N.J. Jamadar held that “If the appellant had not submitted its reply at the conciliation...

Mere Registration Of FIR Or Pendency Of Proceedings Before DRT Does Not Bar Reference To Arbitration: Bombay High Court

The Bombay High Court bench of Justice Advait M. Sethna has held that the disputes between Mangal Credit and Fincorp Limited and Ulka Chandrshekhar Nair are arbitrable under the Arbitration and Conciliation Act, 1996 (Arbitration Act) even though allegations of fraud and forgery were raised and a criminal was filed in which no progress has been made. The Court further held that “Merely because the Respondent has chosen to attack the Mortgage Deeds which contain the arbitration clause...

Denial Of Re-Testing Of Seized Goods Must Be Occasional And Recorded In Writing: Bombay High Court

The Bombay High Court has held that re-testing of seized goods is a trade facilitation measure, not to be denied in the ordinary course. Justices M.S. Sonak and Advait M. Sethna stated that "...Ultimately, such denial must be only occasional and that too, on reasonable grounds to be recorded in writing. The guidelines emphasised that this facility of re-testing is nothing but a trade facilitation measure, which, generally, will not be denied in the ordinary course…" The ...

Individual Flat Owners Forming Cooperative Society Are Bound By Arbitration Clause Contained In Sale Agreement: Bombay High Court

The Bombay High Court bench of Justice N.J. Jamadar has observed that when individual flat owners form a cooperative society to enforce rights created in favour of the individual members under the Agreements for Sale, the society cannot claim that it is not bound by the arbitration clause contained in those Agreements. The argument that it is not a signatory to the Agreements for Sale is untenable and such society is not a third party to the arbitral proceedings. Facts Respondent ...

Pending Proceedings Under Omitted CGST Rules 89(4B) & 96(10) Lapse In Absence Of Savings Clause: Bombay High Court

The Bombay High Court has held that all pending proceedings under the omitted CGST Rules 89(4B) & 96(10) lapse in the absence of a savings clause. The bench agreed with the assessee/petitioners that the provisions of Section 6 of the General Clauses Act are not attracted and therefore the pending proceedings can claim no immunity or protection. Unless the Respondents can establish that Section 6 of the General Clauses Act, 1897, applies or that there was any savings clause in...

Income Tax Act | Payment To Consulting Doctors Appointed On Probation Is Not Salary; TDS Deductible U/S 194J, Not U/S 192: Bombay High Court

The Bombay High Court has held that payments to consultant doctors are not salary. Hence, TDS is deductible under section 194J and not under section 192 of the Income Tax Act. Justices B.P. Colabawalla and Firdosh P. Pooniwalla stated that there does not exist an employer-employee relationship between the assessee and consultant doctors, and the payments made to them by the assessee come under the purview of section 194J of the Income Tax Act. Section 194J of the Income Tax Act,...

Income Tax Act | Draft Assessment Order Not Permissible U/S 144C(1) When TPO Makes No Variation: Bombay High Court

The Bombay High Court has held that a draft assessment order is not permissible under section 144C(1) of the Income Tax Act when the TPO (transfer pricing officer) makes no variation. Section 144C(1) of the Income Tax Act, 1961, provides that the Assessing Officer should forward a draft of the proposed assessment order to the eligible assessee if any variation of the income or loss returned is proposed to be made which affects the assessee negatively. Justices B.P. Colabawalla and...

S. 149 Income Tax Act | Reassessment Beyond Limitation Period Is Valid Where 'Bogus' Royalty Payments Exceed ₹50 Lakh: Bombay High Court

The Bombay High Court has stated that reassessment beyond 3 years is valid where bogus royalty expenses exceed Rs. 50 lakhs. Justices Bharati Dangre and Nivedita P. Mehta upheld the reassessment proceedings initiated beyond three years, in the present case, where the alleged bogus royalty expenses exceeded 50 Lakhs. The bench opined that Section 149(1)(b) of the Income Tax Act is a jurisdictional fact which must be established prior to reopening of assessment on the ground that...

Tax Liability Under JDA Arises Only Upon Conveyance Of Property, Not On Execution Of Agreement: Bombay High Court

The Bombay High Court held that tax liability under JDA (joint development agreement) arises only upon conveyance of property, not on execution of agreement. The bench consists of Justices Bharati Dangre and Nivedita P. Mehta stated that no liability actually fell upon the assessee at the time when JDA was entered into, as the liability arises only upon the conveyance of the property. The assessee developer becoming the owner of the property for which the JDA was executed....

Right To Travel Abroad Can't Be Curtailed Solely On Grounds Of Pending Tax Prosecution: Bombay High Court

The Bombay High Court has stated that facing tax prosecution does not automatically bar an accused from foreign travel. Justice S.M. Modak stated that, "It is true right to travel abroad is recognized as a fundamental right. Merely because a person is facing with prosecution, it does not mean that he cannot travel abroad till the time the investigation is under progress or criminal case is pending." The respondent is an accused in connection with a File registered with the...

AO Can Determine Annual Value Of Property Higher Than Municipal Rateable Value U/S 22 Income Tax Act: Bombay High Court

The Bombay High Court stated that the assessing officer (AO) can determine the annual value of the property higher than the municipal rateable value under Section 22 of the Income Tax Act. Section 22 of the Income Tax Act, 1961 deals with the "taxability of 'Income from House Property”. It says the annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the...