2026-VIL-910-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Extended period of limitation under Section 73 of Finance Act, 1994 - Invocation solely on basis of third-party TDS/ITR data - Whether a demand under Section 73 of the Finance Act, 1994 can be validly raised by invoking the extended period of limitation solely on the basis of third-party TDS/ITR data – HELD – The invocation of the extended period of limitation under the proviso to Section 73(1) is not a matter of course but a penal exception to the normal period that must be founded upon clear evidence of fraud, collusion, wilful mis-statement, or suppression of facts with intent to evade payment of tax. The onus of establishing such ingredients rests squarely on the Revenue and must be discharged through cogent evidence brought out in the Show Cause Notice itself. TDS certificates or Form 26AS are at best starting points for inquiry and are not conclusive proof of taxable service rendered or service tax liability - Service tax and income tax operate under separate and independent statutory regimes, and income reflected in income tax returns does not, without more, constitute evidence of provision of taxable services under the Finance Act, 1994. The requirement for invoking the extended period is that there must be a positive act attributable to the assessee demonstrating an intent to evade tax liability, and mere non-payment standing alone does not suffice. Where amounts are openly disclosed in financial records and income tax returns with corresponding income tax liability discharged, no allegation of wilful suppression is tenable – Further, the CBIC has itself instructed that SCNs should not be issued indiscriminately based on ITR-TDS data differences and that proper verification of facts must precede issuance of such notices - The impugned Order-in-Appeal is set aside and the appeal is allowed
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