CESTAT Quashes Service Tax Demand Based Solely On Income Tax Data In Form 26AS
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has acknowledged that the service tax demand can’t be based mostly solely on Revenue Tax Information in Kind 26AS with out establishing receipt of consideration.
The Bench of Dr. Rachna Gupta (Judicial Member) acknowledged that “Income can’t elevate the demand on the idea of distinction within the figures mirrored in the ST-3 returns and people mirrored in Kind 26AS with out analyzing the explanations for mentioned distinction and with out establishing that the whole quantity acquired by the appellant as mirrored within the Kind 26AS is the consideration for companies supplied and with out analyzing whether or not the distinction was due to any exemption or abatement”.
The assessee/appellant is engaged in offering Erection, Commissioning and Set up Service and Upkeep or Restore Service to varied phone service suppliers.
Throughout the course of audit of the assessee file for the interval from April 2016 to March 2017 the distinction within the taxable worth proven in ST-3 returns from the revenue booked within the statutory file like stability sheet vis-à-vis job work receipt for the mentioned interval was noticed by the division and the assessee was discovered to haven’t paid service tax on the quantity of the mentioned distinction.
A present trigger discover was issued to the assessee demanding service tax together with curiosity and penalty. The demand was confirmed by the adjudicating authority. An attraction was filed in opposition to the order of adjudicating authority which was rejected.
The assessee submitted that demand of service tax based mostly on the revenue tax returns/any third celebration knowledge is just not sustainable.
The Tribunal noticed that “vide reply to Present Trigger Discover dated 16.07.2021 it was conveyed that the assessee didn’t obtain the fee of the quantity of invoices as a result of some dispute in relation to billing. Division has didn’t produce any proof to falsify the mentioned rivalry. Resultantly, the scenario stays is that there isn’t a quantity of consideration acquired. Therefore the exercise of appellant fails to fall below the scope of definition of service given below Part 66B of the Finance Act, 1994, rendering of exercise has to be quid professional quo of contemplating for it to be known as as taxable service outlined below Part 66B(44) of the Finance Act. In absence thereof, query of leviability of service tax doesn’t come up.”
The Tribunal famous that the one doc based mostly whereupon the demand has been confirmed is from 26AS from Revenue Tax Division.
The bench held that division has didn’t show its case in opposition to the assessee. The reliance of 26AS as the idea of demand is just not permissible.
In view of the above, the Tribunal allowed the attraction.
Case Title: M/s Shree Ganesh Telecom Pvt. Ltd. v. Commissioner (Appeals), Central Items & Service Tax & Central Excise, Indore
Case Quantity: Service Tax Enchantment No. 50211 of 2024
Counsel for Appellant/ Assessee: Pankaj Sethi
Counsel for Respondent/ Division: Anuj Kumar Neeraj
