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The High Court dismissed all the appeals. Regarding Question (a), the Court found that the ITAT had correctly held that HBCs were not employees and Section 192 was not applicable. The Court agreed with the ITAT's finding that the relationship was not one of employer-employee. For Question (b), the Court found that the ITAT had correctly held that TDS was deductible under Section 194C, not 194J, for payments to Hinduja TMT/Hinduja Global Solutions Ltd. The Court found no substantial question of law. On Question (c), the Court was satisfied that the assessee correctly deducted TDS under Section 194C for drug handling charges paid to M/s Saxsons Biotech, as there was no commission involved, and the payment was for the supply of radioactive drugs. Thus, Section 194H was not applicable. For Question (d), the Court found that the payments made to Hinduja Foundation for its employees were reimbursement of actual costs and not professional fees, as confirmed by the CIT(A) and ITAT. Therefore, TDS under Section 194J was not required. The Court found no substantial question of law. Regarding Question (e), the Court deemed it academic in light of the decisions on the other questions and left it undecided.
The High Court dismissed all appeals. Regarding Question (a), the Court found no substantial question of law as the ITAT's decision on HBCs not being employees was based on facts. For Question (b), the Court agreed with the ITAT that payments to Hinduja TMT/Global Solutions Ltd. were for services covered under Section 194C, not Section 194J, as they were not fees for professional or technical services. On Question (c), the Court held that drug handling charges paid to Saxsons Biotech for radioactive drugs were correctly treated under Section 194C, as there was no commission involved, and the supply was invoiced directly. For Question (d), the Court upheld the ITAT's finding that payments to Hinduja Foundation for deputed employees were pure reimbursement of actual salaries and allowances, not fees for professional services, as the Foundation charged only actuals without markup. Regarding Question (e), the Court deemed it academic in light of the decisions on other issues and left it undecided.
The High Court dismissed all the appeals. Regarding Question (a), the Court found that the ITAT and CIT(A) had considered the facts and concluded that HBCs were not employees, and the payments were not salary. The Court found no substantial question of law. Regarding Question (b), the Court agreed with the ITAT and CIT(A) that payments to Hinduja TMT/Hinduja Global Solutions Ltd. were for services rendered and correctly taxed under Section 194C, not 194J. No substantial question of law arose. Regarding Question (c), the Court was satisfied that TDS was correctly deducted under Section 194C for drug handling charges paid to Saxsons Biotech, as there was no commission involved. The Court found no substantial question of law. Regarding Question (d), the Court found that payments to Hinduja Foundation for deputed employees were pure reimbursement of actual costs, not professional fees, and thus correctly treated as such by the ITAT and CIT(A). No substantial question of law arose. Regarding Question (e), the Court deemed it academic in view of the findings on other issues and left it undecided.
The High Court held that the ITAT's findings on questions (a) to (d) did not give rise to substantial questions of law. Regarding question (a), the court found that the ITAT and CIT(A) had considered the facts and correctly concluded that HBCs were not employees, thus Section 192 was not applicable. For question (b), the court agreed that payments to Hinduja TMT/Global Solutions were correctly treated under Section 194C. On question (c), the court found that the drug handling charges were for the supply of goods and not commission, thus correctly covered under Section 194C and not 194H. For question (d), the court upheld the finding that payments to Hinduja Foundation were for reimbursement of actual salaries of deputed personnel and not professional fees, making Section 194J inapplicable. Regarding question (e), the court deemed it academic in light of the decisions on the other issues and left it undecided. Consequently, all appeals filed by the Revenue were dismissed.
The High Court dismissed all the appeals filed by the Revenue. Regarding Question (a), the Court found no substantial question of law, implicitly upholding the ITAT's decision that HBCs were not employees. For Question (b), the Court found no substantial question of law, agreeing with the ITAT that payments to Hinduja TMT/Global Solutions Ltd. were correctly taxed under Section 194C. On Question (c), the Court was satisfied that the assessee correctly deducted TDS under Section 194C for drug handling charges paid to M/s Saxsons Biotech, as there was no commission involved but a supply of goods, thus no substantial question of law arose. For Question (d), the Court found that the payments to Hinduja Foundation for its employees were indeed reimbursements of actual costs of employment and not fees for professional services, confirming the ITAT's decision and finding no substantial question of law. Regarding Question (e), the Court deemed it academic in light of the findings on the previous issues and left it undecided, stating it would be considered in an appropriate case. The operative direction was that all appeals were dismissed.
The High Court held that the sanction order granted by the Principal Commissioner of Income Tax under Section 151(1) was bad in law due to a non-application of mind to the reasons recorded by the Assessing Officer. The Court noted a significant discrepancy: the reasons recorded by the AO focused on the activities of the Himanshu Verma Group in providing accommodation entries, whereas the sanction order incorrectly stated that the assessee itself was engaged in providing such entries. Furthermore, the sanction order mentioned siphoning of funds from public limited companies to private limited companies, a fact not supported by the AO's recorded reasons, which only referred to private limited companies used by the Himanshu Verma Group. The Court reiterated that granting sanction under Section 151 is not a mechanical act and requires due application of mind to safeguard assessees from unwarranted reopening. Since the sanction order demonstrated a lack of application of mind, the impugned notice under Section 148 was quashed and set aside. The petition was allowed.
The High Court dismissed the petition. The Court held that the amended Section 142(2A) allows the Assessing Officer to direct a special audit not only based on the complexity of accounts but also on the multiplicity of transactions, specialized nature of business activity, and the interest of revenue. The Court noted that the Assessing Officer had identified several complex issues, including related party transactions, warehouse rent, and technological agreements, which warranted a special audit. The Court also referenced judgments from the Gujarat High Court and its own previous decision concerning the same assessee, clarifying that the previous decision was not on merits and that the amended provisions of Section 142(2A) provide broader grounds for directing a special audit. The Court found no merit in the petitioner's contention that transfer pricing scrutiny precluded a special audit, stating that the Transfer Pricing Officer's role is distinct. The Court concluded that the Assessing Officer had sufficient grounds under the amended Section 142(2A) to order the special audit and that the principles of natural justice were not violated.
The High Court held that the notice of reopening was invalid. The Court found that the assessee had made a full and true disclosure of primary facts. The AO's reasons were based on material already on record, and there was no new or additional information that came to light after the original assessment. The Court reiterated that the assessee's obligation is to disclose primary facts, and the subsequent inference or legal interpretation is the AO's responsibility. The AO's expectation for the assessee to voluntarily disallow expenditure under Section 40(a)(i) or add back foreign taxes was not a basis for alleging a lack of full and true disclosure. Since the reopening was beyond four years and based on existing records, the notice was set aside. The Court did not find it necessary to examine the second contention regarding income escaping assessment.
The High Court held that the ITAT's order dated August 10, 2017, was flawed because it failed to address Ground No. 5 of the petitioner's rectification application. This ground concerned the rejection of additional evidence by the Commissioner of Income Tax (Appeals) without justification. The Court noted that this omission was evident from the impugned order and was not disputed by the revenue. Therefore, the Court directed the ITAT to decide the issue raised in Ground No. 5 of the petitioner's rectification application, dated November 30, 2016, and pass an order thereon after adhering to the principles of natural justice. No other grievance was considered.
The High Court allowed the petition and set aside the impugned notice. The Court found that the Assessing Officer's belief that income had escaped assessment was not sustainable. The assessee had filed its annual report, audited accounts, and balance sheet, which reflected the payments in question. The Court held that the assessee's responsibility is to disclose primary facts, and what inferences are to be drawn from these facts is the Assessing Officer's jurisdiction. The Court noted that the Assessing Officer's reasons for reopening were based on material already on record and did not involve any additional or alien material. The Court also found that the issue of IT Domain cost was not examined during the original assessment, thus it was not a case of change of opinion. The Court did not find merit in the contention regarding the date of sanction.
The High Court, while not inclined to consider the merits of the substantive appeals as they were pending before the Commissioner of Appeals, acknowledged the delay in filing the appeals and the petitioners' status as agriculturists. Considering these factors and the monetary claims involved, the Court passed an equitable order. The order dated 02.04.2018 passed by the Commissioner of Income Tax on the stay application was set aside. This was conditional upon the petitioners depositing 25% of the amount assessed by the Assessing Officer before the Commissioner of Appeals within six weeks. Upon this deposit, the attachment of the petitioners' bank accounts would be released. The Court directed the Commissioner of Appeals to expeditiously decide the application for condonation of delay and, depending on that decision, the appeals themselves. Parties were directed to appear before the Commissioner of Appeals on 04.03.2019, and the Commissioner was to decide the condonation of delay application within three months from that date.
The High Court held that the appeals should be answered in favour of the assessee. Regarding the first limb of Section 2(22)(e), the Court noted that the assessee company was not a beneficial owner of any shares in the creditor companies. The common shareholder was 'Sunjewels India Pvt. Ltd.', which held substantial stakes in both the assessee and the creditor companies. However, the loans were given by the creditor companies to the assessee company, not directly to 'Sunjewels India Pvt. Ltd.'. Therefore, the CIT(A) and ITAT were justified in holding that the case did not fall under the first limb of Section 2(22)(e). Concerning the second limb of Section 2(22)(e), the Court clarified that it applies when creditor companies advance loans to a concern in which the assessee company is a member or partner and has a substantial interest. In this case, the loans were given by the creditor companies to the assessee company, not to any concern in which the assessee company had a substantial interest. Thus, the second limb was also not attracted. The Court distinguished the case from the Supreme Court's reference to a larger bench in National Travel Services, as the factual matrix in that case was different. The Court found no fault with the findings of the CIT(A) and ITAT.
The High Court held that the petition was without merit and dismissed it. The Court reasoned that the Settlement Commission's jurisdiction is comprehensive, aiming for finality and conclusiveness in the entire assessment process. Once an assessee approaches the Settlement Commission, its jurisdiction is exclusive, and the Assessing Officer's role is limited to giving effect to the Commission's order. The Court referred to the decision in Shalibhadra Developers (supra) which held that upon filing an application for settlement, the Assessing Officer is divested of jurisdiction, and it vests solely in the Settlement Commission. The Court emphasized that there can only be one order concerning an assessment, either by the Assessing Officer or by the Settlement Commission. Therefore, the Principal Commissioner, in revising an order giving effect to the Settlement Commission's order, was encroaching upon the exclusive jurisdiction of the Settlement Commission. The Court found no merit in the petition and dismissed it, rejecting the request for a certificate of substantial question of law.
The High Court held that the word 'tax' in Section 179(1) of the Income Tax Act, 1961, includes penalty and interest. The Court reasoned that the explanation added to Section 179, which clarifies that 'tax due' includes penalty and interest, is clarificatory in nature and reflects the original intention of the Parliament. The Court found that the legislature intended for directors to be jointly and severally liable for all amounts due from the company, including penalty and interest, when the company's tax liability cannot be recovered. The non-obstante clause in Section 179 further supports this interpretation, overriding provisions of the Companies Act. The Court distinguished the cited cases, stating their facts were different and did not apply to the current situation. Therefore, the Court found no reason to interfere with the order passed by the respondent authority. The petitions were dismissed.
The High Court held that the Civil Court rightly rejected the ad-interim relief and had no jurisdiction to try and entertain the suit. This was based on the revenue's contention that Section 293 of the Income Tax Act, 1961, clearly bars suits in Civil Courts to set aside or modify any proceedings or orders made under the Act. As the suit challenged assessment proceedings under Section 147, the bar under Section 293 was applicable. Regarding the prayer to restrain Respondent Nos. 3 and 4 from construction activities, the Court noted that such a prayer did not appear to have been made before the trial court, and even if it had been, no ad-interim relief could be granted without making out a prima-facie case. Consequently, the Appeal was dismissed as being without merit. The Civil Application was disposed of as nothing survived in view of the dismissal of the Appeal.
The High Court held that the impugned notice of reopening of assessment was invalid. The Court found that during the original scrutiny assessment, the Assessing Officer had called upon the assessee to justify the expenditure towards the provision for warranty. The assessee had provided a detailed representation explaining the genuineness of the claim. Following this exercise, the Assessing Officer passed the assessment order, which did not disallow the expenditure, thereby accepting the assessee's claim. The Court reasoned that in the absence of any tangible material outside the assessment record, it was not open for the Assessing Officer to reopen the assessment on the same ground. Such an attempt would be based on a mere change of opinion, which is impermissible, even after the amendments to Section 147 of the Income Tax Act, 1961, as held by the Supreme Court in CIT v. Kelvinator of India Ltd. Therefore, the impugned notice was quashed and set aside. The Court explicitly stated that it was not required to comment on the validity of the petitioner's claim of expenditure itself, as the focus was solely on the validity of the reopening.
The High Court held that the impugned notice for reopening of assessment, issued beyond a period of four years from the end of the relevant Assessment Year, could not be sustained. The Court found that the first proviso to Section 147 of the Income Tax Act, 1961, which requires income to have escaped assessment due to the assessee's failure to disclose fully and truly all material facts, was not satisfied. The reasons recorded by the AO clearly established that the AO had identified an error within the assessment records and referred to similar additions in a subsequent assessment year, which were confirmed by the CIT(A). However, the AO did not refer to any material outside the assessment records to form the belief that income had escaped assessment. Therefore, the impugned notice was set aside. The petition was disposed of accordingly.
The High Court held that the Assessing Officer (AO) had failed to apply his mind to the material before him, leading to a lack of tangible material to form a belief that income had escaped assessment in the hands of the petitioner, Akshar Builders and Developers (AB&D). The court noted that the information from the investigation wing suggested cash payments to AD, while the notice of reopening was issued against AB&D. The AO's attempt to bridge this gap by suggesting that AD and AB&D were the same entity was not supported by the fact that both entities had distinct identities, different partners, and separate PAN numbers, which the revenue did not dispute. The court found that the AO had issued the notice to a wrong person, demonstrating a total lack of application of mind and reliance on erroneous information. Consequently, the impugned notice of reopening was set aside. The court reiterated that even when an assessment is accepted under Section 143(1), the AO must have a genuine reason to believe income has escaped assessment and cannot proceed mechanically or on incorrect information. The petition was disposed of accordingly.
The High Court, while acknowledging the Petitioner's past conduct and the dismissal of its earlier writ petition, held that the present petition challenging the ITAT's December 18, 2018 order presented a fresh cause of action. The Court decided to hear the matter on merits. The Court noted that the ITAT had initially found a prima facie case for the Petitioner and granted a conditional stay. Despite the Petitioner's failure to fulfill the conditions or get them modified, the Court recognized that not protecting the Petitioner at this stage could severely impact its educational and medical institutions. Therefore, the Court aimed to put the Petitioner back to the position as on November 10, 2017. The Court directed the Petitioner to deposit a total of Rs. 20 crores (including the Rs. 1,11,37,877/- payable by the Government of India) within six weeks. Upon fulfillment of this condition, there would be a stay against further recoveries until the final disposal of the Petitioner's appeals before the ITAT. The bank accounts and other attachments would be revoked once the conditions are met. The ITAT was directed to expedite the hearing of the appeals, preferably within six months. The Petitioner was also directed to cooperate for the early disposal of the appeals. The Petitioner was advised to approach the Co-ordinate Bench regarding the funds payable by the Government of India.
The High Court held that the appeal was without merit and dismissed it. The Court noted that the CIT(A) and ITAT had examined the factual aspects and concluded that there was no failure on the part of the assessee to disclose fully and truly all material facts as contemplated under the first proviso to Section 147 of the I.T. Act, 1961. The Court found these findings to be purely factual and not perverse. Therefore, the questions of law proposed by the revenue did not give rise to any substantial question of law requiring consideration under Section 260A of the I.T. Act, 1961. The Court also referred to the principles laid down in judgments like Hindustan Lever Ltd. and Prashant S. Joshi, emphasizing that reasons recorded by the A.O. for reopening must be clear, unambiguous, and based on evidence, and cannot be supplemented by affidavits or oral submissions. Since the reasons recorded by the A.O. did not allege any failure on the part of the assessee to disclose material facts, the reassessment notice and order were liable to be set aside.
The High Court held that no substantial questions of law arise from the ITAT's order. Regarding the repairs and renovations, the Court found no infirmity in the concurrent findings of the CIT (Appeals) and ITAT that the expenditure was revenue in nature. The Court reasoned that the nature of the repairs (dismantling tiles, laying stones, plastering, painting, waterproofing, replacing tiles and plumbing) did not result in a substantial advantage of an enduring nature. The Court distinguished Ballimal Naval Kishore by noting that the expenditure here was for repairing existing assets, not for bringing into existence a new asset or obtaining a new advantage. The Court also cited Empire Jute Co. Ltd. vs. CIT, Ooty Dasaprakash, Lake Palace Hotels and Motels P. Ltd., and Cama Hotels Ltd. to support the view that repairs and renovations, even if improving profitability or facilitating trading operations without touching fixed capital, are revenue expenditure. For the UPS depreciation issue, the Court found that the ITAT's reliance on CIT vs. BSES Yamuna Powers Ltd., Pentair Water India (P) Ltd. vs. ACIT, and Macawber Engineering System (I) P. Ltd. vs. ACIT, which held UPS to be a component/equipment connected with computers eligible for 60% depreciation, did not give rise to a substantial question of law.
The High Court held that the omission of Section 3A of the Central Excise Act, 1944, without a saving clause, does not affect proceedings where action had already been initiated. This was based on the Supreme Court's decision in M/s Shree Bhagwati Steel Rolling Mills, which followed its earlier ruling in M/s Fibre Boards (P) Ltd. The Court found that the CESTAT's view conflicted with this Supreme Court precedent. Consequently, Excise Appeal No. 4 of 2007, challenging the allowance of the assessee's appeal, was allowed. Regarding penalty enhancement, the Court referred to M/s Shree Bhagwati Steel Rolling Mills, where the Supreme Court held that Rules 96ZO, 96ZP, and 96ZQ, insofar as they imposed a mandatory penalty equivalent to the amount of duty, were ultra vires and violative of Articles 14 and 19(1)(g) of the Constitution. Therefore, Excise Appeal No. 3 of 2007, seeking penalty enhancement, was dismissed. The CESTAT's order allowing the assessee's appeal was quashed, and the assessee's appeal was restored to the CESTAT for disposal on merits, leaving all contentions open except those based on the omission of Section 3A.