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Showing 21 to 40 of 1440 Records
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2022 (2) TMI 1421 - PUNJAB AND HARYANA HIGH COURT
Dishonour of cheque - insufficient funds - legally enforceable debt or not - rebuttal of presumption under Section 139 NIA - mention about a friendly loan in his Income Tax Returns or not? - Section 165 of the Indian Evidence Act, 1872 - HELD THAT:- There is a legal presumption of consideration under section 118(a) of NIA. The court shall presume that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated, or transferred, was accepted, indorsed, negotiated, or transferred for consideration. Thus, the burden is on the accused to rebut such presumption.
The accused had rebutted such presumption in the cross-examination of the complainant when he appeared as CW-1. Such presumption was rebutted by putting questions to the complainant and explaining the circumstances under section 313 CrPC. A perusal of the cross-examination reveals that the complainant admitted that he filled the cheque in his hand, and after that, the accused had put his signatures - the burden was primarily on the complainant to prove the debt amount. It was incumbent upon the complainant to tender in evidence some accounts, ledger, statement, or paper on record whatsoever, but he did not do so. He was silent about the loans being advanced at multiple dates. On being cross-examined, he did admit that the loans were not given on any particular date but various dates. The stand of the accused was that he did take loans on various dates, but every month, the complainant would enhance the amount by one lakh. Thus, the stand of the accused appears to be more probable and truthful than the stand of the complainant.
Although under section 118 NIA, there is a presumption of consideration, the presumption would come only when the legal notice and a complaint mention such considerations. The complainant must explain the debt amount and whether it was legally enforceable debt, or other loans, as stated under section 118 NIA - the burden was on the complainant to precisely mention the principal amount and the interest he calculated. The complainant did not mention the said calculations in any of the aforementioned documents. As such, the complaint lacks material particulars, and it deserves dismissal. It was not even worth taking cognizance.
There is no merit in this application seeking special leave to appeal and accordingly, the same is dismissed.
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2022 (2) TMI 1420 - BOMBAY HIGH COURT
Validity of Rule 35 of the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Rules 2018 - ultra vires to Articles 13, 19(1)(a), 19(1)(g) or not - language of the Name Board - HELD THAT:- There is a definite public purpose that is sought to be achieved by Rule 35 if read correctly. What the Petition wholly fails to recognise is that this requirement is not meant to benefit retail traders but is meant for the convenience and benefit of workers and the public who approaches these retail outlets. These are persons who, in the estimation of the State Government and as a matter of policy, are more likely to be familiar with Marathi as written in the Devanagari script.
There are texts that are in Marathi and these are expressed and written in Devanagari. Indeed, and not to put too fine a point on it, even in this High Court, we permit documents to be produced in the original Marathi in Devanagari script although the language of the High Court is English. We do not insist on translations unless required by a particular Bench or Judge. It is the right of every litigant who comes to this Court to place before the Court a document in Marathi. Translations are made available on request for the convenience of the Court. To say, therefore, that there is some sort of invidious discrimination is equally wholly untrue. If any retailer wishes to carry on a trade or business in Maharashtra it must be subject to such conditions that the Government of Maharashtra seeks to impose uniformly on all. Clearly, there is no discrimination under Article 14.
Rights under Article 19(1)(a) are not, as the Petition quite wrongly puts it, absolute or unfettered. There is Article 19(2) to take into consideration.
Because of the wholly inappropriate and deplorable inclusion of paragraphs 12 to 14 in this Petition, this case is deemed appropriate to make an award of costs against the Petitioners, who are directed to pay an amount of Rs. 25,000/- into the Chief Minister's Relief Fund within one week from today - petition dismissed.
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2022 (2) TMI 1419 - ITAT DELHI
Validity of assessment u/s 144C not following the directions of the DRP by the Assessing Officer follow the directions of the DRP by the Assessing Officer - Existence of Permanent Establishment [PE] - Attribution of profit - HELD THAT:- This Tribunal [2021 (12) TMI 545 - ITAT DELHI] has held the impugned assessment orders as non-est it is mandatory to follow the directions of the DRP by the Assessing Officer failing which the assessment order would become non-est. In our considered view, the Assessing Officer passed the impugned final assessment orders not carrying out the binding directions of the DRP which is a clear violation of the binding provisions of section 144C(13) of the Act. Therefore, in our humble opinion, the impugned assessment orders are non-est. We are of the further opinion that once the assessment orders have been held to be non-est, the ld. CIT could not have assumed jurisdiction u/s 263 of the Act over a non assessment order which can never be erroneous and prejudicial to the interest of the Revenue.
Thus this Tribunal held the impugned assessment order as nonest.
Sublato Fundamento Cadit Opus, meaning thereby, that in case the foundation is removed, the super structure falls.
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2022 (2) TMI 1418 - DELHI HIGH COURT
Money Laundering - Property acquired from proceeds of crime or not - involvement in an international syndicate of laundering the money generated out of drug trafficking in Australia and other countries - continuation of proceeding under PMLA.
HELD THAT:- The offence of money laundering under the PMLA is therefore, layered and multi-fold and includes the stages preceding and succeeding the offence of laundering money as well.
The language of Section 3 clearly implies that the money involved in the offence of money laundering is necessarily the proceeds of crime, arising out of a criminal activity in relation to the scheduled offences enlisted in the Schedule of the Act. Hence, the essential ingredients for the offence of Section 3 of the PMLA become, first, the proceeds of crime, second, proceeds of crime arising out of the offences specified in the Schedule of the Act and third, the factum of knowledge while commission of the offence of money laundering. In the present matter, at the initial stage of proceedings, the Respondents were charged for offences under Section 21/25/29 of the NDPS Act and 420/468/471/120B of the IPC, however, the learned Additional Sessions Judge, Amritsar, observed that material produced before the Court as well as the allegations made against the Respondents were largely made upon suspicion. Though certain material, properties and cash, were recovered and attached/seized but the fact that such properties were obtained through proceeds of crime of drug trafficking could not be established.
In view of the observation that the no scheduled offence was made out against the Respondents, this Court finds that an investigation and proceedings into the PMLA could not have been established against them at the first instance.
A bare reading of the provision of the Cr.P.C. suggests that the Court shall limit itself to the findings, sentence or order passed by the subordinate Court, against which the Revisionist is seeking relief before the Courts concerned, and shall not go beyond the analysis and observations made by the subordinate court. By extension, a limitation and bar is, hence, set out on the scope of the powers that may be exercised by the concerned Court under the provision which precludes the Revisional Court to go into the enquiry of evidence and submissions made before the subordinate Court at the time of passing of the impugned Order, against which the revision is sought.
In the present matter, the Petitioner had filed a Supplementary Complaint based on certain additional documents received by it against the Respondents, including, the Prosecution Report of Commonwealth Director of the Public Prosecution by the Australian Federal Police. The Petitioner based its findings against the Respondents on the said documents and alleged certain facts based on the apprehension that the amount being transferred from the business accounts of the Respondents were proceeds of drug trafficking and hence, was laundered money. Keeping in view all the material, including the abovementioned document, the Additional Sessions Judge was not satisfied that the apprehension and suspicion of the Petitioner was well founded and even for the offences under the NDPS, no recovery was brought on record - It was observed that the additional evidence did not disclose prima facie any material to infer that the accused persons, Respondents herein, were involved in the commission of the offences alleged against them.
Thus, this Court finds force in the argument that since no offences were made out against the Respondents as specified in the Schedule of the PMLA, the offence under Section 3/4 of the PMLA also, do not arise as the involvement in a scheduled offence is a pre-requisite to the offence of money laundering - there is no apparent error, gross illegality or impropriety found in the Order of the learned Additional Sessions Judge.
Petition dismissed.
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2022 (2) TMI 1417 - SUPREME COURT
Suspension order - alleged negligence on the part of the respondent delinquent in handling the keys in inappropriate manner resulted into theft/loss of cash from the cash safe - HELD THAT:- The power of judicial review in the matters of disciplinary inquiries, exercised by the departmental/appellate authorities discharged by constitutional courts under Article 226 or Article 136 of the Constitution of India is well circumscribed by limits of correcting errors of law or procedural errors leading to manifest injustice or violation of principles of natural justice and it is not akin to adjudication of the case on merits as an appellate authority which has earlier been examined by this Court in B.C. Chaturvedi Vs. Union of India and Others [1995 (11) TMI 379 - SUPREME COURT]; H.P. STATE ELECTRICITY BOARD LTD. VERSUS MAHESH DAHIYA [2016 (11) TMI 1749 - SUPREME COURT] and recently by a three Judge Bench of this Court (of which one of us is a member) in DEPUTY GENERAL MANAGER (APPELLATE AUTHORITY) AND ORS. VERSUS AJAI KUMAR SRIVASTAVA [2021 (1) TMI 1312 - SUPREME COURT].
Adverting to the facts of the instant case, the Division Bench has proceeded on the premise that the responsibility was of the Branch Manager along with the Assistant Manager(Cash). Hence, the respondent could not have been held responsible for the lapses of those officers and proceeding on the said foundation, set aside the penalty inflicted upon the respondent delinquent but the record of enquiry clearly manifests that it was a factual error being committed by the High Court while setting aside the domestic inquiry and the consequential punishment inflicted upon the respondent delinquent.
The High Court has exceeded in its jurisdiction while interfering with the disciplinary proceedings initiated against the respondent delinquent and being unsustainable deserves to be set aside - Appeal allowed.
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2022 (2) TMI 1416 - CESTAT KOLKATA
Enhancement of penalty - delayed submission of documents deliberately or with any mala fide intention - HELD THAT:- This is a case of delay in furnishing of certain documents. There is no revenue implication. The department has not been able to establish any deliberate delay or any mala fide intention on the part of the appellant. As and when the appellant could gather the requisite documents they were presented before the assessing officers for finalising the provisional assessments. In fact, out of the 35 Bills of Entry involved, 31 could be finalised.
The adjudicating authority took a fair decision and imposed a nominal penalty of Rs. 20,000/-. This amount has already been paid by the appellant. The order of the Commissioner (Appeals) does not establish any ground for enhancing the penalty to the maximum of Rs. 50,000/- per Bill of Entry yet to be finalised.
In the case of M/S ESSAR OIL LIMITED VERSUS COMMISSIONER OF CUSTOMS [2015 (5) TMI 942 - CESTAT AHMEDABAD], it was held by the Tribunal that when there is some delay in furnishing the documents and there is no revenue implication, penalty is not called for.
Appeal allowed.
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2022 (2) TMI 1415 - ANDHRA PRADESH HIGH COURT
Rival claims of the parties to the petition for having control over the management of NRI Academy of Sciences (NRIAS), which run 1000 bedded Hospital and Colleges including Medical and Nursing Homes.
HELD THAT:- Having given anxious consideration to the subject matter of the writ petition and the nature of the dispute arising between the parties and in view of the consent given by the learned counsel for the parties, it is deemed appropriate to refer the dispute for arbitration.
Accordingly, with the consent of the parties, Sri Justice Devinder Gupta (Retired Chief Justice) is appointed as sole Arbitrator to decide all existing disputes between the parties referable to Section 23 of the Act, 2001 - In view of appointment of Arbitrator with the consent of learned counsel for the parties, the order passed by the learned single Judge is set aside and of all the writ appeals as well as the writ petition are disposed off.
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2022 (2) TMI 1414 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Validity of Resolution Plan - Preferential Transaction - Treatment meted under the Resolution Plan submitted by the Successful Resolution Applicant - distribution mechanism approved by the CoC in its 18th meeting of the members of CoC - abusive treatment being meted out to them under the garb of 'commercial wisdom of the CoC'.
I. Whether the Adjudicating Authority erred in approving the Resolution Plan, which proposes extinguishing claim to the Fixed Deposit Holders without discharging their payments in full, contravenes the statutory provisions of the NHB Act and RBI Act?
II. Whether the NHB Act or RBI Act, as the case may be, mandate the total payment to the Fixed Deposit Holders even though the corporate debtor is undergoing CIRP under the I & B Code, 2016?
III. Whether section 238 of the Insolvency and Bankruptcy Code, 2016, overrides the RBI Act and NHB Act? Is the approved Resolution Plan stipulates extinguishment of the claims to the Fixed Deposits without discharging their payments in full, valid and legal in terms of the Code?
IV. Whether the transactions involving repayment to Fixed Deposits Upon maturity of their deposit would fall within the ordinary course of business for Respondent No. 1, as specified under section 28(1)(k) of the Code?
V. Whether Respondent No. 1 is legally authorised for disbursing loans and investments despite its failure to repay Fixed Deposit holders as per the terms of their deposits?
VI. Whether any payment made against the F.D.'s in terms of their deposits during CIRP would be categorised as a preferential transaction?
HELD THAT:- It is essential to point out that the issues raised in the present Appeal were also raised in the Company Appeals VINAY KUMAR MITTAL, RASHMI SHRIVASTAVA, JESUIT RESEARCH AND DEVELOPMENT SOCIETY, JIV PRAKASH VIDYAPEETH, INDIAN SOCIAL INSTITUTE, THE NAGALAND JESUIT EDUCATIONAL AND CHARITABLE SOCIETY, THE DELHI JESUIT SOCIETY, AMAR SEVA SAMITHI, PRESENTATION SOCIETY OF INDIA, BHOLA DEVELOPERS PVT LTD AND OTHERS VERSUS DEWAN HOUSING FINANCE CORPORATION LTD, RESERVE BANK OF INDIA, COMMITTEE OF CREDITORS OF DEWAN HOUSING FINANCE CORPORATION LIMITED AND OTHERS. [2022 (1) TMI 1412 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI]. These appeals were also filed against the same Resolution Plan by the fixed deposit holders of DHFL, raising the same issues.
We have already decided on the Appeals mentioned above with detailed orders on the issues raised here. Therefore, we do not think it proper to decide again the same issues raised in the present Appeal.
Impugned Order needs no interference - appeal disposed off.
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2022 (2) TMI 1413 - CALCUTTA HIGH COURT
Validity of reopening of assessment - period of limitation - statutory formalities u/s 148A - as argued Income Tax Authority concerned, before issuing the impugned notices u/s 148 have not observed the statutory formalities u/s 148A as prescribed by the Finance Act, 2021 which are applicable with effect from 1st April, 2021 before issuance of notices u/s 148 on or after 1st April, 2021? - HELD THAT:- In view of judgments and orders of this Court in the case of Manoj Jain Vs. Union of India & Ors. [2022 (1) TMI 741 - CALCUTTA HIGH COURT] and in the case of Bagaria Properties and Investment Private Limited & Anr [2022 (1) TMI 742 - CALCUTTA HIGH COURT] all these writ petitions herein are disposed of by allowing the same.
Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void. All the impugned notices under Section 148 of the Income Tax Act are quashed with liberty to the Assessing Officers concerned to initiate fresh re-assessment proceedings in accordance with the relevant provisions of the Act as amended by Finance Act, 2021 and after making compliance of the formalities as required by the law.
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2022 (2) TMI 1412 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Violation of principles of natural justice - impugned order passed without consideration of any of the submissions made by the CoC or the Administrator and contrary to the express provisions of law - Erroneous presumption that National Housing Bank(NHB) is the owner of DHFL's funds or property by Section 16B of the National Housing Bank Act, 1987 (NHB Act) despite that the CoC had made elaborate and detailed submissions before the NCLT.
Whether the Adjudicating Authority erred in holding that NHB is entitled to any rights under section 16 B of the NHB Act after commencement of CIRP against the DHFL when such rights are in direct conflict with the express provisions of the Code? - Is the relationship between DHFL and NHB that of a debtor and creditor, and no special rights can be afforded to NHB other than as a financial creditor? - Whether the Adjudicating Authority erred in holding that the Tagged Receivables are 3rd party assets?
HELD THAT:- The provisions of Section 16B of the NHB Act unequivocally provide that any sums received by the borrowing institution would be received by such borrowing institution in trust for RespondentNo.1, NHB, and would be accordingly, required to be paid to the Respondent, NHB.
In the present case, both the factors stated in Section 16B are satisfied viz. the amounts held in trust by the Corporate Debtor (i) are to the extent of the accommodation granted by this Respondent; and (ii) are remaining outstanding. Accordingly, these are bound to be paid to this Respondent NHB in the plain and unambiguous terms of Section 16B of the National Housing Bank Act - Under Section 16B of the NHB Act, the Corporate Debtor is statutorily deemed to hold these funds as a 'Trustee' for this Respondent NHB. Although it is elementary and a matter of the first principle that a Trustee never has the Trust property for its use or purpose, such funds can be used solely for the Trust, i.e. only to be paid to this Respondent.
In the instant case, being a refinance transaction, the Corporate Debtor availed refinance against a pool of tagged loans. Towards these tagged loans, Respondent ‘NHB’ had already passed on the consideration in the form of refinancing to the Corporate Debtor. Under a clear mandate of Section 16 B(1) of the NHB Act, any realization from the said loans shall be deemed to be held by the Corporate Debtor in trust for the benefit of the refinancing institution, i.e. the Respondent NHB - the Corporate Debtor cannot use these tagged loans or recoveries for its purposes or uses or treat them as its property, disregarding the statutory Provision under Section 16B of the NHB Act. Thus, the realisations under the tagged loans and securities held thereunder are held by the Corporate Debtor only as an intermediary/custodian in trust for the benefit of the Respondent NHB, as it has refinanced these tagged loans.
These amounts are required to be paid to this Respondent NHB. The Corporate Debtor cannot use these realisations for its benefits as if it is the owner of the same when it has availed refinance against these very tagged loans. Ultimately repayments under the loans belong to this Respondent NHB and not the Corporate Debtor. The Corporate Debtor is bound to act as per the mandate of the NHB Act - The actions of the Administrator, who was vested with the management of the Corporate Debtor, cannot be in contravention of the mandate given under clause (e), sub- section (2) of Section 17 of the Code, which envisages that the Administrator will be responsible for complying with the requirements under any law for the time being in force on behalf of the Corporate Debtor and thereby jeopardize the right and entitlement of Respondent NHB or act contrary to the provisions of Section 16 B of the NHB Act.
While dealing with the issue of fixed deposit holders and public deposit holders, it is decided that Insolvency and Bankruptcy Code, 2016 overrides the provisions of the National Housing Bank Act, National Housing Bank directions and the RBI Act. No full payment right exists under the NHB, the RBI Act, or subordinate legislation. Even if it exists, any such right would be wholly repugnant to the provisions of the Code, which provides for a specific manner in priority of payment and sets out the right. The minimum amount a creditor is mandatorily required to be paid in the resolution plan, i.e. the liquidation value - It is also held that section 238 of the IB code overrides the RBI and NHB Act. Therefore the approved resolution plan that stipulates extinguishment of the claims to the FD’s without discharging their payments in full is valid and legal under the Code.
NHB is a development financial institution. It is lending to housing finance institutions. Exposure is not on purely commercial lines like any other commercial bank. NHB is an integral partner in formulating and implementing India's Government's housing and housing finance policies. For example, the exposure norms of RBI applicable to a commercial bank are not relevant to refinance a portfolio of a refinancing institution like NHB - If NHB were to be treated at par with any other financial creditors/commercial lenders, hypothetically, any CIRP against a Housing Finance Companies who had borrowed amounts totalling to NHB's net-worth would lead to a situation where NHB may be forced into liquidation, as it could then legally result in the entire net-worth of NHB being extinguished. This is not and could never have been the legislative intent.
Equating NHB with other financial creditors when the statute places it in a special category of institutions would be a misplaced conclusion and must be avoided. NHB is serving as a development finance institution for the growth of the housing sector in the country. In view of the larger objective behind setting up NHB, it cannot be equated with other Financial Creditors. Hence, NHB is a sui generis financial creditor with vested statutory rights.
This unique mandate of the statute must be respected. Section 16B of the NHB Act provides certain rights to NHB in clear, unambiguous terms, then assuming/suggesting the contrary is a fallacious proposition. There is no conflict, as has been explained already. There is absolutely no inconsistency since the Rule 10 exception applies to sums/assets held in trust under Sec. 16B of the NHB Act for the benefit of NHB, excluding such funds from the moratorium provisions of S. 14 of the Act and Rule 5 of the FSP Rules - Whereas exclusion for section 16B funds and assets has already been provided, starting from the sanction letters to the charge creating documents under which the banks and other lenders are claiming rights. In these circumstances, the argument that the rights of NHB under Section 16B are subject to the charge of other lenders is misconceived.
It is pertinent to mention that in the instant case, funds with the corporate debtor to the extent they relate to the flag loans refinanced by the NHB are clearly impressed with the trust and are held in trust for the benefit of NHB. The DHFL is not the owner of the property, but the property is held in trust. Therefore, Section 238 of the Code is not applicable for the 3rd party assets.
The relationship between the DHFL and NHB is not only that of a debtor and creditor. But the NHB has special rights under Section 16 B of the NHB Act, and these rights are not in conflict with the express provisions of the Code. Therefore Adjudicating Authority has not erred in giving the said findings. Accordingly, there are no reason for interference in the impugned order.
Appeal dismissed.
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2022 (2) TMI 1411 - PUNJAB AND HARYANA HIGH COURT
Seeking enlargement on bail - fraudulent passing on the said Input Tax Credit to different firms/companies by way of merely issuing invoices without actual supply of goods - HELD THAT:- The allegations in the present petition are certainly having high magnitude involving about Rs.128.82 crores. According to the learned Senior Standing counsel, the material witnesses are yet to be examined. The apprehension expressed by the learned Senior Standing counsel that in case the petitioner is released on bail, he may influence the witnesses or abscond from justice cannot be ignored. At this stage, therefore, considering the gravity of the offence and the aforesaid circumstances, this Court is of the considered view that the petitioner is not entitled for the grant of regular bail.
Finding no merit, the petition is hereby dismissed.
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2022 (2) TMI 1410 - MADRAS HIGH COURT
Validity of faceless assessment u/s 144B - Penalty u/s 271(1)(c) - writ petitioner/assessee's request for personal hearing has not been decided - as argued personal hearing is not a matter of right but it is the discretion of the Chief Commissioner or the Director General in charge of the Regional Faceless Penalty Centre - HELD THAT:- The simple point now is writ petitioner's request for personal hearing will be considered in accordance with the said scheme
ORDER:- (a)The impugned order order made by the first respondent is set aside solely on the ground that a decision regarding the writ petitioner/assessee's request for personal hearing has not been decided one way or the other in accordance with the said scheme;
b) though obvious, it is made clear that this Court has not expressed any view or opinion on the merits of the matter and all questions are left open;
c) the first respondent shall now proceed from the stage of objections dated 30.06.2021, decide on the request for personal hearing and complete the penalty proceedings inter alia under Section 271(1)(c) of IT Act and pass orders afresh as expeditiously as the business of the first respondent would permit and in any event within 12 weeks from today i.e., on or before 28.04.2022;
d) The two queries raised in paragraph 9 of the proceedings dated 31.01.2022 are left open and decision regarding the personal hearing will be taken in accordance with standards, procedures and processes if any.
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2022 (2) TMI 1409 - ALLAHABAD HIGH COURT
Seeking grant of regular bail - disobedience of order of court - Concealment of material facts and documents - suicide - dowry case - HELD THAT:- The applicant has no respect to the orders of the Supreme Court as well as this Court. Furthermore, he has not approached this Court with clean hand and filed this application suppressing the material facts in sheer disobedience of the orders of Supreme Court as well as this Court. Therefore, she does not deserve any indulgence by this Court - Time and again the issue of abuse of process of law has come up before the Supreme Court as well as High Courts. The Courts have, over the centuries, frowned upon litigants, who, with intent to deceive and mislead the courts, initiated proceedings without full disclosure of facts.
In ARUNIMA BARUAH VERSUS UNION OF INDIA & ORS [2007 (4) TMI 695 - SUPREME COURT], Supreme Court held that it is trite law that to enable the Court to refuse to exercise its discretionary jurisdiction suppression must of material fact. Material fact would mean material for the purpose of determination of the lis. It was further held that a person invoking the discretionary jurisdiction of the court cannot be allowed to approach it with a pair of dirty hands.
The applicant has misused the process of law by filing successive applications before this Court suppressing the material facts and documents and misled the Court. Honesty, fairness, purity of mind should be of the highest order to approach the court, failing which the litigant should be shown the exit door at the earliest point of time.
The application is rejected with costs, which is quantified at Rs. 25,000/- (rupees twenty five thousand only) to be deposited by the applicant within one month with the Registrar General of this Court, failing which the same shall be recovered from the applicant as arrears of land revenue.
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2022 (2) TMI 1408 - SECURITIES APPELLATE TRIBUNAL MUMBAI
Power of SEBI statutory initiating action against statutory auditor / chartered accountant - appellant who is a statutory auditor / chartered accountant has been prohibited from issuing any certificate of audit and has been restrained from rendering any other auditing services to any listed companies and intermediaries for a period of one year - as alleged company had made wrong misleading or inadequate disclosures to the stock exchange and had understated the outstanding loans and interest and financial changes in the annual returns of 2008-09, 2009-10 and 2010-11 and had violated Section 12A of the SEBI Act read with Regulations 3 and 4 of the PFUTP Regulations.
The stand of the appellant is, that the preparation and presentation of the financial statement and the job to ensure that they are free from material misstatement whether due to fraud or error is the responsibility of the management. The appellant as a statutory auditor was responsible to express an opinion on the financial statement based on the internal audit and was not involved in the preparation of the books of accounts of the company or the misstatement in the balance sheet by the company.
HELD THAT:- In the instant case, the show cause notice alleged that the company did not utilize the IPO proceeds and that it was diverted to different entities in the guise of making payments towards the objects stated in the prospectus. The focus in the show cause notice was to examine the role of the appellant as the statutory auditor with regard to due diligence done by it by certifying the expenditure incurred by the company towards the IPO expenses out of the IPO proceeds. The appellants certified the amount was utilized as per the prospectus. A.O. however found that there were lapses on the part of the appellant and due diligence was not carried out by them while certifying that the IPO proceeds were utilized for the objects stated in the prospectus.
We find that the A.O. has only found that due diligence was not carried out by the appellant. There is no finding that the appellants were instrumental in preparing false and fabricated accounts or have connived in preparation or falsification of the books of account. There is no finding that the appellants had manipulated the books of accounts with knowledge and intention, in the absence of which, there is no deceit or inducement by the appellants. In the absence of any inducement, the question of fraud committed by the appellants does not arise. This Tribunal in Price Waterhouse (supra) has categorically held that a C.A. can be proceeded against them if they are instrumental in preparing false and fabricated accounts otherwise SEBI has no power to proceed against them.
Section 12A(a) & (b) of the SEBI Act is obviously not applicable to the appellant as they are not dealing in the securities. Similarly, Section 12(c) cannot be made applicable because no fraud has been carried out by the appellant. Further, in the absence of connivance, deceit, or manipulation Regulation 3 & 4 of the PFUTP Regulations cannot be made applicable.
Thus when a specific finding has been given by the WTM in the impugned order that the promoters and the directors of the DCHL had a private and discreet arrangement between the company and DCM which was only known to the promoters and directors of the DCHL with regard to the understatement of loans and liabilities in the annual accounts of DCHL, it is clear that the appellant as a statutory auditor was not responsible for the preparation and falsification of the books of accounts, the financials of the company and the balance sheet of the company.
Thus in order to give a finding on collusion, there must be some material which could lead to an inference of collusion. Once a finding is given that the appellant was not involved in the fabrication and fudging of the books of accounts and the balance sheet and if the appellant had no intention or knowledge of such understatement being shown in the financials, the charge of fraud or collusion or connivance with the directors and promoters of the company cannot be levied, only on the ground that he was not diligent or cautious or did not check the outstanding loan details from the banks and through other sources. Lack of due diligence can only lead to professional negligence which would amount to a misconduct which could be taken up only by ICAI.
Thus the impugned order in so far as it relates to the appellant cannot be sustained and is quashed. The appeal is allowed with no order as to costs.
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2022 (2) TMI 1407 - BOMBAY HIGH COURT
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2022 (2) TMI 1406 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Rejection of Section 7 application - right to take remedy before RERA as well as under Section 7 of the Code - Continuing cause of action - time limitation - HELD THAT:- The fact that Appellant was not given possession of the shops by the Corporate Debtor may be ground and reason for filing complaint under Real Estate Regulatory Authority Act before UP RERA which complaint has already been filed by the Appellant and was allowed on 06.03.2019 but for filing Application under Section 7, Application has to be within three years from the date when right to apply accrues. When default of a financial debt was committed on 24.10.2010 as claimed by the Appellant, the right to apply accrue to him and no other date of default having been given in Part-IV, the limitation shall not stop running merely because Appellant claims that he has not been given possession of the shops. The Application was thus clearly barred by time and could not have been entertained by the Adjudicating Authority. The Application having been filed beyond three years from the date when right to apply accrues, the same deserves to be rejected.
Thus, on the complaint filed by the Appellant, an order has been passed by the UP RERA on 06.03.2019 directing for recovery of amount of Rs. 87,38,000/- along with interest/. The Appellant has already filed Execution Application to execute the order dated 06.03.2019 which as per submission of the counsel for the Appellant has already been allowed on 18.11.2021.
There are no reason to interfere with the order passed by the Adjudicating Authority dismissing Section 7 Application filed by the Appellant - appeal dismissed.
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2022 (2) TMI 1405 - AUTHORITY FOR ADVANCE RULINGS, CUSTOMS, MUMBAI
Classification of goods - Echo family devices - to be classified under sub-heading 85176290 or not - Echo (4th Gen.), Model No. L4S3RE; Echo Dot (4th Gen.), Model No. B7W64E; Echo Dot (4th Gen.) with Clock, Model No. B7W644; and Echo Studio (Model No. 02T2V3) are appropriately classifiable under heading 8518 or not - HELD THAT:- The Echo family devices featuring 'Alexa' as discussed in the preceding paragraph 2 and the Apple HomePods featuring "Siri" described in paragraph 8 are indeed near identical devices. Obviously, in the matter of classification of these two kinds of devices of different manufacturers/marketers, a difference of opinion has arisen amongst the two advance rulings authorities. And, as informed by the ld. Counsel of the applicant, the matter has already reached the first statutory appellate level, i.e., the Hon'ble High Court of Delhi. Such being the undeniable facts, I feel it would be improper on my part to create further discordance on this issue which is already sub-judice. Therefore, in my considered opinion, the issue of classification of the 15 Echo family devices, except the device 'Wireless Speaker Device, Model No. P5B83L', which is not an Echo family device, need to await the decision of the Hon'ble High Court of Delhi, which is already seized of the matter in the form of the appeals of M/s. Amazon Wholesale India Pvt. Ltd.
Reliance placed upon the judgment of the Hon'ble High Court of Bombay in the case of TITANOR COMPONENTS LTD. VERSUS COMMISSIONER OF INCOME TAX [2009 (4) TMI 67 - BOMBAY HIGH COURT], wherein it was held that if a similar appeal is pending before the Hon'ble High Court, it would have been proper for the Tribunal to wait till the question of law is adjudicated by the Hon'ble High Court in the appeals pending before it - The ratio of the above judgment was followed by the Larger bench of the CESTAT, Mumbai in the case of C. PINTO VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [2018 (2) TMI 336 - CESTAT MUMBAI]. Further, the Larger Bench of CESTAT, New Delhi in the case of DINKAR KHINDRIA VERSUS COLLECTOR OF CUSTOMS, NEW DELHI [2000 (3) TMI 76 - CEGAT, NEW DELHI] has also held that Judicial propriety require that a co-ordinate bench should not sit over judgment on the order recorded by another bench.
Accordingly, the secretariat is directed to keep track of the progress of the appeals of M/s. Amazon Wholesale India Pvt. Ltd. against the rulings of the CAAR, New Delhi and place these 10 applications for decision as soon as the Hon'ble Delhi High Court decides the appeals of M/s. Amazon Wholesale India Pvt. Ltd. The ruling in respect of 'Wireless Speaker Device, Model No. P5B83L', shall, however, be rendered without awaiting the decision of the Hon'ble Delhi High Court as it is not an Echo family device.
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2022 (2) TMI 1404 - ITAT CHENNAI
Levy of late filing fee u/s 234E - fee levied for the period prior to 01.06.2015 - assessee has filed TDS Quarterly returns in Form 24Q/26Q beyond due date specified under the Act - HELD THAT:- We find that the assessment year involved is prior to 01.06.2015. Therefore, we are of the considered view that the late fee charged by the Assessing Officer under section 234E of the Act, while processing quarterly TDS return under section 200A of the Act, is without any authority and invalid.
Hence, by following the decision of Fatheraj Singhvi v. Union of India [2016 (9) TMI 964 - KARNATAKA HIGH COURT] we are of the considered view that the Assessing Officer cannot levy late fee while processing of TDS return under section 200A of the Act upto the financial year 2014-15. Decided in favour of assessee.
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2022 (2) TMI 1403 - ALLAHABAD HIGH COURT
Seeking grant of bail - murder - allegation of killing the farmers by making indiscriminate firing.
Submission of the learned counsel for the applicant is that incorrect description of the incident is given in the F.I.R. and as a matter of fact, three persons including the driver of the vehicle of the applicant were killed by the protesters and no such incident, as alleged, in the F.I.R. had taken place.
HELD THAT:- Considering the facts and circumstances of the case in toto, it is evident that as per the F.I.R., role of firing was assigned to the applicant for killing the protesters, but during the course of investigation, no such firearm injuries were found either on the body of any of the deceased or on the body of any injured person. Thereafter, the prosecution alleged that the applicant provoked the driver of the vehicle for crushing the protesters, however, the driver along with two others, who were in the vehicle, had been killed by the protesters. It is further evident that during the course of investigation, notice was issued to the applicant and he appeared before the Investigating Officer. It is also evident that the charge sheet has already been filed. In such circumstances, this Court is of the view that the applicant is entitled to be released on bail.
Let applicant - Ashish Mishra @ Monu be released on bail on his furnishing personal bond and two reliable sureties each of the like amount to the satisfaction of the court concerned subject to conditions imposed - application allowed.
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2022 (2) TMI 1402 - ITAT BANGALORE
TP Adjustment - adjustment of notional interest in respect of delayed receivable from its AEs - rate of interest adopted by the TPO - LIBOR + 2% - DRP rejected the contention of the assessee that the adjustment is not required in this regard, since it is not an international transaction - HELD THAT:- As in case of Swiss Re Global Business Solutions India Pvt. Ltd. [2022 (1) TMI 1275 - ITAT BANGALORE] by following the judgment of AMD (India) Pvt.Ltd. [2018 (8) TMI 2094 - KARNATAKA HIGH COURT] held that deferred revenue from AE would constitute independent international transaction and the same needs to be benchmarked independently. Further, it was held by the Tribunal that the rate of interest to be adopted is at LIBOR + 2%.
Thus we direct the A.O. to calculate the interest rate on outstanding receivable from AE by adopting LIBOR + 2%
TP Adjustment to be confined to International transaction only - AR stated that the revenues from the international transaction constitute only 29.85% of the total revenue, therefore, as submitted that the TP adjustment if at all ought to be restricted to that extent - HELD THAT:- The action of the TPO is wholly erroneous and contrary to the provisions of the Act and the Rules made there under. A.O. has to refer the matter to the TPO for computation of ALP only in relation to the international transactions and the TPO is empowered to compute ALP only in respect of the said international transactions. In the case of IKA India (P.) Limited [2018 (10) TMI 49 - ITAT BANGALORE] had decided an identical issue and held that the transfer pricing adjustment is to be limited only to the international transactions entered by the assessee with its AEs.
In the instant case, the assessee claims that the revenue from the international transactions constitute only 29.84% of the total revenue. TPO is directed to rework the TP adjustment only in respect of the international transaction undertaken by the assessee with its AEs.
Disallowance u/s 14A - assessee had made sou moto disallowance for expenditure attributable to earning of exempted income - HELD THAT:- AO has not recorded his dissatisfaction as regards the correctness of the claim made by the assessee. The working of suo moto disallowance is on record.
AO has not pointed out any specific reasons having regard to the accounts of the assessee for rejecting the suo moto disallowance by the assessee. Assessee has sufficient own funds and borrowed funds were not used for the purpose of making investment.
As per the statutory Auditors report (clause No.16 and 17), all the borrowed funds have been utilized for the purpose for which it has been borrowed. Further, on perusal of the financials, it is clear that the assessee has sufficient own funds which exceeds the investments. Therefore as placing reliance on Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT] and Microlabs Ltd. [2016 (4) TMI 219 - KARNATAKA HIGH COURT] we hold that disallowance u/s 14A r.w.Rule 8D(2)(ii) is not warranted in the facts of the instant given case.
Nature of expenditure - Expenditure incurred for treatment of products registration - revenue or capital expenditure - HELD THAT:- As decided in own case, [2021 (12) TMI 1467 - ITAT BANGALORE] the expenses incurred by assessee in respect of Dolenio during the years under consideration towards Mutual recognition process variation, Patent and Trade mark and other registration expenses, are be considered as revenue expenditure, allowable u/s 37(1).
In respect of the Annual fee/license fees paid the ledger account revels that these are recurring in nature, and hence cannot be treated to be one time payment. These are in respect of renewal of licence with the drug authorities in respective countries to continue to hold the licence to export and sell the products developed by assessee.
Accordingly no infirmity in the observation of Ld. CIT(A) to treat the payments to be revenue expenditure allowable u/s 37(1) - Decided in favour of assessee.
Non grant of entire credit of MAT paid by the assessee u/s 115JAA - HELD THAT:- The assessee is entitled to the entire credit available to it as per law. Therefore, the A.O. is directed to grant the appropriate credit available to the assessee.
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