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December 2022

(A) Appeal to High Court — Powers of High Court — Has power to consider question of jurisdiction even if not raised before Tribunal.
(B) Penalty u/s 271(1)(c) — Concealment of income or furnishing inaccurate particulars thereof — Notice — Validity — Notice must clearly specify nature of offence — Notice which is vague is not valid.

By K. B. Bhujle, Advocate
Reading Time 2 mins
56. Ganga Iron and Steel Trading Co. vs. CIT
[2022] 447 ITR 743 (Bom.)
Date of order: 22nd December, 2021
Ss. 260A and 271(1)(c) of ITA,1961

(A) Appeal to High Court — Powers of High Court — Has power to consider question of jurisdiction even if not raised before Tribunal.

(B) Penalty u/s 271(1)(c) — Concealment of income or furnishing inaccurate particulars thereof — Notice — Validity — Notice must clearly specify nature of offence — Notice which is vague is not valid.

Penalty u/s 271(1)(c) of the Income-tax Act, 1961, imposed by the AO, was upheld by the Tribunal. In the appeal before the High Court, the assessee raised the following question of jurisdiction for the first time:

“Whether the show-cause notice dated February 12, 2008 issued to the appellant without indicating that there was concealment of particulars of income or furnishing of incorrect particulars of such income would vitiate the penalty proceedings or whether such notice as issued can be held to be valid?”

The Bombay High Court admitted the question, decided the case in favour of the assessee and held as under:

“i)   An appeal u/s. 260A can be entertained by the High Court on the issue of jurisdiction even if that issue was not raised before the Appellate Tribunal.

ii)    A penal provision, even with civil consequences, must be construed strictly. And ambiguity, if any, must be
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45. Subsidy in the nature of remission of sales tax given to promote industries is capital in nature and not chargeable to tax. Further, a subsidy under a retention pricing scheme is eligible for deduction u/s 80IB of the Act.

(A) Double taxation avoidance — Deduction of tax at source — Effect of section 90 — Provisions of DTAA applicable wherever more beneficial to assessee — Contract between Indian company and American company — Provisions of DTAA more beneficial for purposes of deduction of tax at source — Provisions of DTAA applicable — Definition in DTAA of technical services more beneficial to assessee — Tax not deductible at source as payment to American company by way of reimbursement of employees of American company seconded to it.
(B) Deduction of tax at source — Certificate for deduction at lower rate or nil deduction — Difference between sections 195 and 197 — Application u/s 195 to be made by person making payment.