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2024 (1) TMI 1460
Jurisdiction of National Green Tribunal (NGT) to issue directions affecting the preparation and finalization of the Shimla Planning Area (SPA) development plan under the Himachal Pradesh Town & Country Planning Act, 1977 (TCP Act) - HELD THAT:- It will be amply clear that the preparation of draft development plan Under Section 18 of the TCP Act, finalization of the same Under Section 19 of the TCP Act by the Director and grant of approval by the State Under Section 20 of the TCP Act are all legislative functions. The provisions enable the delegated legislative body to formulate the provisions which will have a general application to all members of the broadly identifiable classes.
In the case of Tulsipur Sugar Co. Ltd. v. The Notified Area Committee, Tulsipur [1980 (2) TMI 262 - SUPREME COURT], again a challenge was made to the notification issued Under Section 3 of the U.P. Town Areas Act, 1914 on the ground that before issuance of final notification, the principles of audi alteram partem were not followed - this Court held that a declaration Under Section 3 of the U.P. Town Areas Act, 1914 provided for enabling the application of the rest of the provisions of the Act to the geographical area which is declared as a town area. It was thus held that the declaration made Under Section 3 was legislative in character.
It can thus be seen that it is a settled position of law that the exercise of power for the preparation, finalization and approval of development plan is a power exercised by the delegatee for enacting a subordinate piece of legislation. There are no manner of doubt in holding that the aforesaid provisions as contained in the TCP Act provide for exercise of power by a delegatee to enact a piece of subordinate legislation.
Whether the NGT could have issued directions to the legislative body to exercise its legislative functions in a particular manner? - HELD THAT:- In the case of V.K. Naswa v. Home Secretary, Union of India and Ors. [2012 (1) TMI 273 - SUPREME COURT], the Petitioner-in-person had approached this Court to issue directions to the Central Government, through the Ministry of Law & Justice, to amend the law for taking action against a person for showing any kind of disrespect to the national flag or for not observing the terms contained in the Flag Code of India, 2002.
It is a settled law that the Constitution of India does not permit the courts to direct or advise the Executive in the matters of policy or to sermonize qua any matter which under the Constitution lies within the sphere of Legislature or Executive. It is also settled that the courts cannot issue directions to the Legislature for enacting the laws in a particular manner or for amending the Acts or the Rules. It is for the Legislature to do so.
The first order of NGT is liable to be set aside on the short ground that it has transgressed its limitations and attempted to encroach upon the field reserved for the delegatee to enact a piece of delegated legislation. When the TCP Act empowers the State Government and the Director to exercise the powers to enact a piece of delegated legislation, the NGT could not have imposed fetters on such powers and directed it to exercise its powers in a particular manner.
Whether observations in Para 47 of the Mantri Techzone Private Limited [2019 (3) TMI 1924 - SUPREME COURT] would operate as res judicata? - HELD THAT:- This Court, in the case of Dhanwanti Devi [1996 (8) TMI 146 - SUPREME COURT], has held that it is not profitable to extract a sentence here and there from the judgment and to build upon it. It has been held that the essence of the decision is its ratio and not every observation found therein. It has been held that a deliberate judicial decision arrived at after hearing an argument on a question which arises in the case or is put in issue would constitute a precedent.
A perusal of the aforesaid would clearly reveal that, though the directive issued by the State Government Under Section 154 of the MRTP Act was issued in accordance with the directions issued by the NGT, this Court found such exercise not to be permissible in law. This Court held that the complete absence of any reasons as to why the State issued such directions, coupled with the lack of any supporting expert report or input, renders such a directive to be an arbitrary exercise of power. This Court, therefore, disapproved such a directive issued Under Section 154 of the MRTP Act merely on the basis of the directions issued by the NGT and set aside the same.
The NGT could not have directed the delegatee who has been delegated powers under the TCP Act to enact the Regulations, to do so in a particular manner. As a matter of fact, the NGT has imposed fetters on the exercise of powers by the delegatee, who has been delegated such powers by the competent legislature. In any case, it is clear that there were sufficient safeguards under the provisions of the TCP Act inasmuch as an aggrieved citizen was entitled to raise objections, give suggestions and was also entitled to an opportunity of hearing on more than one occasion - Since it is found that the first order of NGT is not sustainable on the ground of encroaching upon the powers of the delegatee to enact a delegated legislation and also amounts to imposing fetters on the exercise of such powers, we do not propose to go into the said issue and we keep the same open to be adjudicated upon in appropriate proceedings.
Whether the NGT was justified in passing the order dated 14th October 2022 when the High Court was seized of the same issue during the pendency of Civil Writ Petition No. 5960 of 2022? - HELD THAT:- This Court, even when a provision in the Constitution enabled the Parliament to make a law thereby excluding the powers of judicial review except Under Article 136 of the Constitution, held that the power of judicial review vested in the High Courts Under Articles 226 and in this Court Under Article 32 of the Constitution, is an integral and essential feature of the Constitution, constituting part of its basic structure and, therefore, the power of High Courts and this Court to test the constitutional validity of legislations can never be ousted or excluded. This Court further goes on to observe that the power vested in the High Courts to exercise judicial superintendence over the decisions of all Courts and Tribunals within their respective jurisdictions is also part of the basic structure of the Constitution.
It would thus reveal that the Constitution Bench of this Court in unequivocal terms has held that the Tribunals will have a power to handle matters involving constitutional issues. This Court held that if it is held that the Tribunals do not have power to handle matters involving constitutional issues, they could not serve the purpose for which they were constituted - The High Court will also have the benefit of a reasoned decision on merits which will be of use to it in finally deciding the matter. The Constitution Bench of this Court clearly holds that all decisions of Tribunals, whether created pursuant to Article 323A or Article 323B of the Constitution, will be subject to the High Court's writ jurisdiction Under Articles 226/227 of the Constitution, before a Division Bench of the High Court within whose territorial jurisdiction the particular Tribunal falls.
The continuation of the proceedings by the NGT during the pendency of the writ petitions before the High Court was not in conformity with the principles of judicial propriety. Needless to state that the High Court of Himachal Pradesh, insofar as its territorial jurisdiction is concerned, has supervisory jurisdiction over the NGT. Despite pendency of the proceedings before the High Court including the one challenging the interim order dated 12th May 2022 passed by NGT, the NGT went ahead with the passing of the second order impugned herein.
It can be seen from the perusal of the orders of the NGT itself that though the NGT was informed about the High Court being in seisin of the proceedings, it went on to hold that the judgment given by it was binding and therefore, the draft development plan, which in its view, was not in conformity with its judgment, was liable to be set aside.
Balancing the need for Development and Protection of the Environment - HELD THAT:- A need for maintaining a balance between the development and protection/preservation of environmental ecology has been emphasized by this Court time and again - It is thus clear that while ensuring the developmental activities so as to meet the demands of growing population, it is also necessary that the issues with regard to environmental and ecological protection are addressed too.
Conclusion - i) The continuation of the proceedings by the NGT during the pendency of the writ petitions before the High Court was not in conformity with the principles of judicial propriety. ii) The power of judicial review vested in the High Courts Under Articles 226 and in this Court Under Article 32 of the Constitution is an integral and essential feature of the Constitution, constituting part of its basic structure and, therefore, the power of High Courts and this Court to test the constitutional validity of legislations can never be ousted or excluded.
Appeal allowed.
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2024 (1) TMI 1459
Rejection of tariff/bid of the Appellant, in terms of Section 63 of the Electricity Act, 2003 - existence of sufficient proof to show that the bid of the Appellant was market aligned - argument of Consumer interest be advanced by the Rajasthan DISCOMS in the facts of the present Appeal or not - HELD THAT:- The High Court in the impugned judgment, relying on the observations of the learned APTEL and the earlier orders of this Court has come to a conclusion that, applying the test of "filling the bucket", the procurers were bound to take supply from the Respondent No. 1-MB Power at the rates quoted by it. On the basis of the judgment of the learned APTEL, the High Court held that the Respondent No. 1-MB Power had a right to supply power since there was a gap of 300 MW between the power procured by the procurers and the ceiling of 906 MW determined by this Court. In these premises, the High Court issued a mandamus directing the Appellants to take supply of 200 MW electricity/power from the Respondent No. 1-MB Power at the rates quoted by it.
It has been held by this Court that unlike Section 62 read with Sections 61 and 64, under the provisions of Section 63 of the Electricity Act, the appropriate Commission does not "determine" tariff but only "adopts" tariff already determined Under Section 63. It has further been held that, such "adoption" is only if such tariff has been determined through a transparent process of bidding, and that, this transparent process of bidding must be in accordance with the guidelines issued by the Central Government - Sections 62 and 63 deal with "determination" of tariff, which is part of "regulating" tariff. It has further been held that, in a situation where the guidelines issued by the Central Government Under Section 63 cover the situation, the Central Commission is bound by those guidelines and must exercise its regulatory functions, albeit Under Section 79(1)(b), only in accordance with those guidelines. It has further been held that, it is only in a situation where there are no guidelines framed at all or where the guidelines do not deal with a given situation that the Commission's general regulatory powers Under Section 79(1)(b) can be used.
The evaluation committee is empowered to consider, as to whether the rates quoted are aligned to the market price or not, and that the evaluation committee shall have the right to reject all the price bids if it finds that the rates quoted are not aligned to the prevailing market price. The orders which are relied upon by the learned APTEL, specifically the order dated 19th November 2018 of this Court, had specifically clarified that the State Commission was to decide the tariff Under Section 63 of the Electricity Act having regard to the law laid down both statutorily and by this Court - The contention that this Court has ordered that the bids quoted by the bidders are to be accepted without going into the question of it being market aligned or not is without substance.
The learned APTEL has grossly erred in holding that the State Commission has no power to go into the question, as to whether the prices quoted are market aligned or not and also not to take into consideration the aspect of consumers' interest.
Applying the principle of literal interpretation, the evaluation committee/BEC would be entitled to reject only such of the price bids if it finds that the rates quoted by the bidders are not aligned to the prevailing market prices. It does not stipulate rejection of all the bids in the bidding process. For example, if in a bidding process, which is in accordance with the Bidding Guidelines and is transparent, 5 bidders emerged. Out of the said bidders, the rates quoted by only 3 bidders are market aligned and the rates quoted by rest of the 2 bidders are not market aligned. In accordance with the Bidding Guidelines, the BEC would be entitled to recommend acceptance of the bids of the first 3 bidders and reject the bids of rest of the 2 bidders whose quoted rates/prices are not found to be market aligned.
The High Court was not justified in entertaining the petition. The Constitution Bench of this Court in the case of PTC India Limited [2010 (3) TMI 1209 - SUPREME COURT] has held that the Electricity Act is an exhaustive code on all matters concerning electricity. Under the Electricity Act, all issues dealing with electricity have to be considered by the authorities constituted under the said Act. As held by the Constitution Bench of this Court, the State Electricity Commission and the learned APTEL have ample powers to adjudicate in the matters with regard to electricity. Not only that, these Tribunals are tribunals consisting of experts having vast experience in the field of electricity. As such, we find that the High Court erred in directly entertaining the writ petition when the Respondent No. 1, i.e., the writ Petitioner before the High Court had an adequate alternate remedy of approaching the State Electricity Commission.
This Court has clearly held that when a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy Under Article 226 of the Constitution of India.
In the present case, the decision-making process, as adopted by the BEC was totally in conformity with the principles laid down by this Court from time to time. The BEC after considering the competitive rates offered in the bidding process in various States came to a conclusion that the rates quoted by SKS Power (L-5 bidder) were not market aligned. The said decision has been approved by the State Commission. Since the decision-making process adopted by the BEC, which has been approved by the State Commission, was in accordance with the law laid down by this Court, the same ought not to have been interfered with by the learned APTEL.
In any case, the High Court, by the impugned judgment and order, could not have issued a mandamus to the instrumentalities of the State to enter into a contract, which was totally harmful to the public interest - the impugned judgment and order passed by the High Court is not sustainable in law and deserves to be quashed and set aside.
Conclusion - i) The appropriate Commission does not act as a mere post office Under Section 63. It must adopt the tariff which has been determined through a transparent process of bidding, but this can only be done in accordance with the guidelines issued by the Central Government. ii) The State Commission and the Bid Evaluation Committee have the power and duty to consider consumer interest and reject bids which are exorbitant and not market aligned. iii) The writ petition was not maintainable before the High Court in presence of efficacious statutory remedies under the Electricity Act.
Appeal allowed.
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2024 (1) TMI 1458
Revision u/s 263 - exemption u/s 54F - Tribunal allowed the appeal of the assessee and set aside the order passed by the PCIT under Section 263 - HELD THAT:- The settled legal position is with regard to exercise of jurisdiction u/s 263 of the Act on the ground that the AO failed to make inquiry which he ought to have made in the given circumstances of a case is no more res integra.
The Hon’ble Supreme Court in the case of M/s. Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] has held that the prerequisite to exercise jurisdiction by the PCIT u/s 263 of the Act is that the assessment order is erroneous and prejudicial to the interest of the Revenue and for that both the conditions are required to be fulfilled.
Hon’ble Supreme Court, in the case M/s. Earth Minerals Company Ltd [2023 (3) TMI 1480 - ORISSA HIGH COURT] dismissing the SLP arising out of the judgement and order of the Hon’ble High Court of Orissa, held that the view taken by the Tribunal was plausible one and not erroneous in law and consequently, no substantial question of law arose.
We are of the view that the findings of fact recorded by the Tribunal in the impugned order cannot be termed as perverse or contrary to the evidence on record. We are convinced that the decision of the Tribunal is correct and requires no interference. No substantial question of law.
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2024 (1) TMI 1457
Refund of IGST - DTA unit supplying goods / services to SEZ - Inordinate delay in obtaining the endorsements - supply for authorized operation or not - Mismatch in the Statement-4, which cannot be relied on - POD was made not at the time of filing applications but at the time of filing reply/personal hearing - it was held in the earlier order by High Court that 'This Court is of the view that both the first and second respondent have committed a serious flaw in the decision making process and therefore, the impugned orders have to be held to be unsustainable.'
HELD THAT:- These writ petitions were allowed and the second respondent was directed to issue refund to the petitioner within a period of thirty days from the date of receipt of a copy of this order. These matters are listed today “for compliance”.
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2024 (1) TMI 1456
Reopening of assessment u/s 147 - validity of unsigned notice - HELD THAT:- This Court has come to the categorical conclusion that the notice u/s 148A(b) is not signed either physically or digitally and the same is illegal, invalid and inoperative and further proceedings pursuant thereto including the order u/s 148A(d) penalty notices, orders, etc., deserve to the quashed.
Shorter period to respond - Minimum period of seven days prescribed u/s 148A(b) as held in the case of Mukesh J. Ruparel [2023 (8) TMI 228 - BOMBAY HIGH COURT] that if notice under Section 148A(b) prescribes a period lesser than a period of seven days as contemplated in the said provision, the said notice would be vitiated resulting in quashment of not only the notice but also the subsequent assessment orders, penalty notices, orders, etc.
In the instant case, it is an undisputed fact that the Notice at Annexure – A dated 21.03.2022 is not signed either physically or digitally but the impugned notice also prescribes a period of six days, which is lesser than the minimum prescribed period of seven days as contemplated u/s 148A(b). In the light of the judgment of this Court in Begur’s case [2023 (11) TMI 1222 - KARNATAKA HIGH COURT] and Mukesh’s case [2023 (8) TMI 228 - BOMBAY HIGH COURT] the impugned notice at Annexure – A and also consequential proceedings, orders, notices, etc. deserves to be quashed by reserving liberty in favour of the respondents to take recourse to such remedies as available in law. Assessee appeal allowed.
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2024 (1) TMI 1455
Levy of penalty u/s 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 - non-filling of Part 'B' of the e-Way Bill - intention to evade tax or not - HELD THAT:- In the present case, the facts are quite similar to one in M/s Citykart Retail Pvt. Ltd.'s case [2022 (9) TMI 374 - ALLAHABAD HIGH COURT] and there are no reason why this Court should take a different view of the matter, as the invoice itself contained the details of the truck and the error committed by the petitioner was of a technical nature only and without any intention to evade tax. Once this fact has been substantiated, there was no requirement to levy penalty under Section 129(3) of the Act.
The orders dated May 1, 2018 and March 15, 2019 are quashed and set aside. The petition is allowed.
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2024 (1) TMI 1454
Seeking grant of bail - Money Laundering - proceeds of crime - wrongfully claiming the scholarship of the students belonging to certain class, who, without completing the concerned course, left the institute - twin conditions as per Section 45 of the PMLA satisfied or not - HELD THAT:- As per record, the Assistant Director, Directorate of Enforcement, had issued summons, bearing No. ECIR/SHSZO/04/ 2019-521, on 29th August, 2023, directing applicant-Hitesh Gandhi, to appear before him, forthwith. On the same day, this notice was received by applicant-Hitesh Gandhi. Thereafter, the statement of applicant-Hitesh Gandhi was recorded under Sections 50 (2) and 50 (3) of PMLA, on 29th August, 2023. The said statement was duly signed by applicant-Hitesh Gandhi. Thereafter, the grounds of arrest were served upon him on 30th August, 2023. Applicant-Hitesh Gandhi not only put his signatures over it, but, he has written “read and understood” over it. Thereafter, he was arrested on 30th August, 2023.
It is not the case of the applicant that he was forced by the ED, to put his signatures and date over the arrest memo, which does not contain the actual date.
The Hon’ble Supreme Court, in a case, titled as Vikram Singh and others versus State of Punjab [2010 (1) TMI 1316 - SUPREME COURT], has distinguished between the words ‘arrest’ and ‘custody’. Although, in the said case, the Hon’ble Supreme Court has discussed the above terms in relation to the provisions of Section 27 of the Evidence Act, however, the said decision has bearing on the merits of the present case, as, the applicant was associated in the investigation, by the ED, prior to his arrest, on 30th August, 2023.
So far as the arguments of the learned senior counsel appearing for the applicant, that only the applicant has been arrested, in the present case, whereas, the other persons, against whom, the allegations have been levelled, have not been arrested, are concerned, considering the stand of the ED that the investigation is still going on, no benefit could be derived from the said fact, as such, the case law relied upon by the learned senior counsel for the applicant, in case titled as State of Madhya Pradesh versus Sheetle Sahai and others, reported in (2009) 8 Supreme Court Cases 617, in no way helps the case of the applicant.
Conclusion - In the present case, the twin conditions, as enumerated in Section 45 of the PMLA, cannot be said to be existing in favour of the applicant, as, at this stage, there are no reasonable grounds for believing that the accused (applicant) is not guilty of such offence and it cannot be said that in case, he is ordered to be released on bail, he is not likely to commit any offence.
The applicant is not able to make out a case for grant of bail, at this stage. Consequently, the bail application is dismissed.
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2024 (1) TMI 1453
Maintainability of petition - petitioner argues that although the order is further appellable to the Tribunal, the Tribunal is currently unavailable, prompting the High Court to entertain the writ petition - HELD THAT:- Let the respondents file affidavit-in-opposition four weeks; petitioner to file reply thereto, if any, within two weeks thereafter.
List this matter for final hearing in the monthly list of April, 2024.
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2024 (1) TMI 1452
Assessment u/s. 144 denying deduction u/s. 80P - Assessee did not file return of income u/s. 139(1) or 139(4) - CIT(A) held that without a valid return of income, deduction u/s. 80P cannot be allowed - HELD THAT:- As for claiming deduction under Chapter VIA under the head, “Deductions to be made in computing total income”, which covers section 80P also, the assessee has to file return of income. However, the assessee did not file return of income at all and therefore the assessee is not eligible for deduction u/s. 80P.
As relying on M/S. NILESHWAR RANGEKALLU CHETHU VYAVASAYA THOZHILALI [2023 (3) TMI 1055 - KERALA HIGH COURT] we hold that the assessee is not eligible for deduction u/s. 80P. Appeal by the assessee is dismissed.
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2024 (1) TMI 1451
Disallowance in the intimation u/s 143(1) - appellant had not deposited the employees’ share of PF and ESIC etc within due date prescribed under respective Statutes, but paid before due date for filing Return of Income under the provisions of section 139(1) - HELD THAT:- We find that an identical issue has been decided in recent decision in CEMETILE INDUSTRIES [2022 (12) TMI 354 - ITAT PUNE] wherein held there is no merit in the contention of linking the date of deposit of the employees’ share in the relevant funds with the date of payment of wages. Section 5 of the Payment of Wages Act simply deals with the ‘Time of payment of wages’. It does not stipulate any time limit for deposit of the employees share in the relevant funds. For that purpose, the relevant Acts give a window for depositing the contribution within 15 days of the last month's salary. Thus, contribution to the relevant fund towards the salary for the month of October-ending should be deposited before 15th November.
We are satisfied that the ld. CIT(A) was justified in sustaining the adjustment u/s 143(1)(a) by means of disallowance made in these cases for late deposit of employees’ share to the relevant funds beyond the date prescribed under the respective Acts.
CPC while processing the return of income under the provisions of section 143(1) cannot travel beyond the return of income and the documents, material accompanied with the return of income.
Appellate Authority and the Tribunal cannot do what the CPC itself cannot do. The fact that there is dispute regarding the quantification of amount of adjustments cannot give rise to the rectification of the intimation u/s 143(1) - Decided against assessee.
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2024 (1) TMI 1450
Classification of Roasted Areca/Betel Nuts (whole or cut) intended to be imported - to be classified under Chapter 8, which covers "edible fruits and nuts," or under Chapter 20, which covers "preparations of vegetables, fruit, nuts or other parts of plants? - HELD THAT:-The processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It does not specifically include the process of roasting. Here it is important to understand the difference between the processes of moderate heat treatment & dehydrating/drying referred in chapter 8 and processes of dry roasting, oil-roasting and fat- roasting referred in chapter 20. The terms dry-roasting, oil roasting and fat-roasting however are not defined in the Customs Tariff Act, 1975.
Chapter 20 of the Tariff covers the Preparations of vegetables, fruit, nuts or other parts of plants. As per Chapter Note 1 (a) to Chapter 20, the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapters 7, 8 or 11. Therefore, vegetable, fruit or nut products or preparations made other than by the processes specified in Chapters 7, 8 or 11 are classifiable in Chapter 20. The processes specified in Chapters 7, 8 or 11 mainly include freezing, steaming, boiling, drying, provisionally preserving and milling. Therefore, any vegetable, fruit, nut or edible parts of a plant which is prepared or preserved by any other process than these are liable to be classified under Chapter 20.
As per HSN Explanatory Notes, heading 2008 covers fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapters or in the preceding headings of this Chapter. Specifying what is included in this heading, the explanatory note states that almonds, ground nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives. Dry-roasting, oil-roasting & fat-roasting, as a process, are very much a part of chapter heading 2008 by virtue of HSN Explanatory Notes. It is also pertinent to observe that none of these processes are mentioned in the chapter note 3 to Chapter 8 of the Customs Tariff Act, 1975 as well as HSN Explanatory Notes to Chapter heading 0802.
The Honourable High Court of Madras in its recent judgement on 01.08.2023 [2023 (8) TMI 492 - MADRAS HIGH COURT], has upheld the classification of Roasted Betel Nuts under CTH 2008 19 20.
Conclusion - The Roasted areca/betel nuts fall under Custom Tariff Heading 2008, specifically under CTI 2008 19 20 'Other roasted nuts & seeds' of Chapter 20 of the First Schedule of the Customs Tariff Act, 1975.
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2024 (1) TMI 1449
Seeking grant of regular bail - Money Laundering - proceeds of crime - predicate offence - applicability of provisions of Section 45 of the PMLA - HELD THAT:- It is true that in some cases the Hon'ble Supreme Court has granted bail despite the provisions of Section 45 of the 2002 Act or Section 37 of the NDPS Act, 1985 in order to do complete justice, but such extraordinary jurisdiction is vested only with the Hon'ble Supreme Court under Article 142(1) of the Constitution of India. A similar point in this regard was raised by a Division Bench of this Court in Daulat Singh v. State of Rajasthan [2014 (4) TMI 1333 - RAJASTHAN HIGH COURT] wherein the Hon'ble Division Bench has held that such an order can be passed by the Hon'ble Supreme Court under the extraordinary jurisdiction conferred by Article 142(1) of the Constitution of India, but such jurisdiction or powers are not available to the High Court or the trial Court.
In the present case, it has not been revealed that the amount received by the accused is not tainted money or he is not aware of the proceeds of crime and he is innocent. The defences taken by the accused can be a subject of consideration. The accused or the companies controlled by him have received a total of Rs 85.12 crores through Bharat Bamb etc. These companies controlled by the accused/applicant have also been fake and disputed, Rs 58.72 crores is still outstanding against the accused/applicant - the conditions mentioned in Section 45 of the Act, 2002 are not being satisfied in this case. There is also no situation that the accused has undergone half the period of maximum imprisonment prescribed for the alleged crime in custody, hence the provisions of Section 436A of the Code of Criminal Procedure are also not applicable in this case.
One of the submissions of the learned counsel for the accused has also been that the other co-accused have been granted bail by the trial court itself, but on this point, the Hon'ble Supreme Court has held in the case of Tarun Kumar vs Assistant Director Enforcement Directorate [2023 (11) TMI 904 - SUPREME COURT] that the principle of equality is not in the form of law and it is not proper to ignore the legal provisions on that basis alone. It is also worth mentioning here that the learned A.S.G. has submitted that it has been decided to challenge the bail granted to the co-accused in the higher court to get it cancelled.
Conclusion - The bail application is dismissed, as the court found no grounds to believe that the accused was not guilty or that the conditions under Section 45 of the PMLA were met.
Bail application dismissed.
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2024 (1) TMI 1448
Denial of final registration u/s. 80G(5) - application was filed beyond the limitation period prescribed under the Act and also extended period of limitation granted by CBDT by various circulars issued from time to time - HELD THAT:- As per Surat Bench of this Tribunal in [2024 (1) TMI 877 - ITAT SURAT] we hereby set aside the impugned order passed by Ld. CIT(E) with a direction to reconsider Form 10AB for final registration u/s. 80G of the Act by giving proper opportunity of being heard to the assessee Trust and also restore the provisional registration already granted to the assessee. Assessee Trust should co-operate by furnishing all required details as mandated under the law for granting final registration u/s. 80G of the Act. Appeal filed by the Assessee is allowed for statistical purpose.
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2024 (1) TMI 1447
Undisclosed cash transaction from undisclosed sources - addition u/s 69A - Addition made on the basis of entries pertaining to the assessee firm based on the excel sheets found in the electronic devices seized during the course of search in the case of Christy group of companies - HELD THAT:- AO has failed to link any cash transactions recorded in excel sheet with any other corroborative evidence which means the cash transactions alleged to be recorded in excel sheet cannot be considered as transactions of the assessee. In this connection, it is necessary to refer to the decision of State of Kerala vs KT Shadulli and Nalla Kandy Yusuf [1977 (3) TMI 160 - SUPREME COURT] where it has been observed that, it is quite possible that the author of the seized documents may have mentioned certain transactions in their books of accounts either to embarrass the assessee or due to animus or business rivalry or such other reasons which could only be established when the department examines such author of the document.
In our considered view unless the AO makes out a case that alleged cash receipts and payment pertains to transactions of assessee which constitute income or expenditure, no addition can be made on the basis of said documents.
The proposition that addition cannot be made merely on the basis of entries in loose sheets found in the premises of a third party without bringing on record independent evidence to corroborate such entries has been reiterated in several decision, like MM Financiers (P) Ltd [2006 (12) TMI 189 - ITAT MADRAS-B], Regency Mahavir Properties [2018 (1) TMI 245 - ITAT MUMBAI] and Monga Metals (P) Ltd. [1999 (6) TMI 47 - ALLAHABAD HIGH COURT]
Also as documents are found in the premises of third party, the presumption as contended in section 132(4A)/292C of the Act is not applicable.
The Hon’ble High Court of Bombay in the case of PCIT vs Umesh Israni [2019 (4) TMI 1947 - BOMBAY HIGH COURT] held that, the entries of the loose papers which were seized were not corroborated with any other evidence on record and no enquiry or verification was made and thus, no additions can be made u/s. 69A of the Act.
Revenue has taken a ground in light of alleged two set of accounts maintained “Tally 1 and Tally 2 by the assessee group and argued that, the appellant is in the practice of replacing the invoices not checked by any Government authorities in the accounted Tally - Ground taken by the revenue is devoid of merits, because the AO neither considered so called Tally 1 and Tally 2, nor made any additions based on said evidences in the assessment order in respect of additions made u/s. 69A of the Act. Therefore, in our considered view the ground of appeal taken by the revenue fails.
Appending two zeros to value recorded in alleged excel sheets, the AO has added two zeros to values recorded to excel sheets for assessment year 2018-19 only - When the bank entries is matching with the books of accounts of the assessee without appending two zeros, the question of appending two zeros to cash entries alone is totally incorrect. Since, the payment through bank noted in seized excel sheets are matching with the corresponding entries found in the bank statement without need to append two zeros, it is considered that the payments through cash found noted in the same excel sheet cannot be construed by adding two zeros to the said amounts. If the payments through cash alone are considered by adding two zeros and the payment through bank are considered in the manner in which they appear in the excel sheets, the totals of the payments column and the receipts column will be grossly different from the total mentioned in the excel sheet. It is therefore clearly evident that, all the amounts mentioned in the excel sheets, regardless of whether they are cash transactions or bank transactions are the actual amounts without suppression of two zeros at the end. Therefore, we are of the considered view that the AO is erred in appending two zeros to the cash transactions appearing in the seized excel sheets and same is untenable.
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2024 (1) TMI 1446
Penalty u/s 43 of Black Money Act - non disclosure of foreign investments in IT return - HELD THAT:- When it is undisputed fact on record that the amount was invested by Shri Nirmal Jain in the name of the assessee, who under bonafide belief has not disclosed in Schedule FA of her return of income, no malafide can be attributed to the assessee and levy of penalty by the AO is not justified. Identical issue has been decided by the co-ordinate Bench of the Tribunal in case of Aditi Avinash Athavankar [2023 (7) TMI 1561 - ITAT MUMBAI]
When father of the assessee has already been slapped with penalty qua the amount invested by him in the name of the assessee by virtue of the order dated 31.07.2023 the assessee who has not disclosed the same under bonafide belief cannot be made to suffer, hence penalty levied by the AO and confirmed by CIT(A) u/s 43 of the BM Act is ordered to be deleted. Appeal of assessee iallowed.
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2024 (1) TMI 1445
Denying exemption u/s 11 - statutory requirement of filing the form No. 10B on or before the filing of return of income was not fulfilled by the assessee trust - condonation of delay in filing of Form 10B was rejected - whether PCIT (Appeals), NFAC was justified in allowing the appeal filed by the assessee thereby condoning the delay in filing the Form 10B? - HELD THAT:- The revenue has not dealt with the said circular nor anything has been brought on record to show that Circular No. 16 of 2022 dated 19-07-2022 cannot be applied to the case on hand.
CIT(Exemptions) while rejecting the application for condonation of delay by order dated 17-08-2020 has referred to the Circular No. 2 of 2020 dated 3.1.2020 which admittedly gives power to condone the delay in filing Form 10B up to a period of 365 days.
CIT (Appeals), NFAC also took note of a decision of Gujarat Oil And Allied Industries [1992 (9) TMI 67 - GUJARAT HIGH COURT] wherein it was held that the filing of the auditor’s report along with return of income has to be treated as procedural provision and therefore, directory in nature. Thus we find that there is no error committed by the Tribunal in dismissing the appeal filed by the revenue. Decided against revenue.
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2024 (1) TMI 1444
Seeking permission to withdraw the petition - Challenge to communication from the GNCTD to the Directorate of Enforcement - seeking to declare impugned Letter as false and incorrect - HELD THAT:- The Writ Petition is disposed of as withdrawn. Pending applications also stand disposed of.
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2024 (1) TMI 1443
Bogus purchases - bogus accommodation bills - estimation of income - hawala transactions from certain parties who were only providing accommodation sale bills - HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court. Hence, the Special Leave Petition is dismissed.
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2024 (1) TMI 1442
Addition u/s 68 - unexplained entries in bank account -as per AO assessee has failed to produce any concrete - CIT(A) deleted addition - HELD THAT:- CIT(A) held that the assessee company has received funds from various concerns as mentioned above and thereafter amounts were transferred to the above mentioned companies/concerns immediately, thus the appellant company is not beneficiary company. CIT(A) also obtained the remand report from the AO and held that the AO has verified the fund flow statement depicting the source of funds and utilization of the same for payments to beneficiaries submitted by the assessee.
CIT(A) held that it was found which established that the Sh. Anand Jain and Sh. Naresh Kumar Jain were operating bank accounts in the names of various concerns/companies through which accommodation entries were being provided and the appellant company was one of such shell concerns. Further the beneficiaries of such accommodation entries were also identified and information to their respective AOs was also disseminated as mentioned in the assessment order as well as the remand report.
Charging of commission is concerned in the case of the assessee, it has been held by the AO in the assessment order that Sh. Anand Jain and Sh. Naresh Jain were entry operators who were managing and controlling various shell concerns including the appellant for providing accommodation entries in lieu of commission and taking that logic there is no question of charging of commission income in the hands of the appellant company arises, since nothing has been earned by the company, being the shell concern.
Since, the commission already stands taxed in the hands of the entry operators in their individual capacity, no separate commission can be charged in the hands of the pass through/ companies floated by the entry operators. As the assessee is found to be one of such pass-through entity, we decline to interfere with the order of the ld. CIT(A) in deleting the commission charged.
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2024 (1) TMI 1441
Reassessment order u/s 148A(d) - the petitioner had not submitted his reply to the Show Cause Notice - specific contention of the petitioner that due to a technical glitch and non-availability of relevant documents, it was not possible for the petitioner to submit a reply/response within the stipulated period - it is contended that during the period between 07.03.2023 and 28.03.2023 petitioner submitted his replies which has not been considered by respondent No.3 in the impugned order, which is contrary to the material on record as well as violative of principles of natural justice and the same deserves to be set aside.
HELD THAT:- A perusal of the material on record will indicate that despite the petitioner having submitted his replies on 21.03.2023 and 25.03.2023 prior to passing of the impugned order on 28.03.2023 as held by this Court in Shankar Reddy’s case [2023 (9) TMI 1673 - KARNATAKA HIGH COURT] and since the impugned order without providing sufficient or reasonable opportunity to the petitioner is violative of principles of natural justice, the respondent No.2 committed an error in not considering the reply which was undisputedly submitted prior to the impugned order and consequently, the impugned order passed u/s 148A(d) deserves to be quashed and the matter be remitted back to the second respondent for reconsideration afresh in accordance with law.
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