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Showing 61 to 80 of 1456 Records
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2024 (1) TMI 1396
Character of the debt given by the Respondent No. 1 to the Corporate Debtor - whether this is a financial debt or a operational debt? - Appellant has submitted that no financial debt was given to the Corporate Debtor but only to the suppliers of goods on behalf of the Corporate Debtor and as such it should be treated operational debt and not financial debt - HELD THAT:- The financial debt means debt along with interest, if any, which is disbursed. From this, it emerges that interest is not sine-qua non, therefore, interest may or may not be payable by the Corporate Debtor and it is understanding between the parties which is significant and relevant to ascertain the existence of time value of money which can be in several forms, other than pure payment of interest.
It further emerges that disbursal of fund is required but the definition does not use the expression that disbursal should be made to the Corporate Debtor only. Hence, it can be implied that any disbursal made on behalf of the Corporate Debtor or at the instructions of the Corporate Debtor may also tantamount to disbursal made to the Corporate Debtor - In the present case undisputedly, the Corporate Debtor used to procure raw material from vendors for which payments were made by the Respondent No. 1, at the instructions of the Corporate Debtor and therefore it assume the character of financial debt.
The intent between the Promoters Group including the Appellant, the Corporate Debtor and the Respondent No. 1 was clear i.e., to provide the working capital to the Corporate Debtor in various forms including for making payments of raw material on behalf of the Corporate Debtor. Raw material is obviously is to be treated as part of working capital and any financial assistance towards working capital cannot be treated as operational debt and has to be taken only as financial debt.
From the various clauses of BSA, SPA and deed of guarantees it becomes clear that these documents were made jointly by the Promoters, the Corporate Debtor and the Respondent No. 1. The Corporate Debtor consented to be party of the agreement. At this stage, the contentions of the Appellant that it was the agreement between only the Promoter Group and the Respondent No. 1 and not with the Corporate Debtor cannot be accepted.
In the present case, it is considered that there is a clear case of financial debt and default which has been rightly appreciated by the Adjudicating Authority in the Impugned Order dated 08.07.2022.
There are no error in the Impugned Order which requires interference - the appeal, devoid of any merit, stand dismissed.
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2024 (1) TMI 1395
Validity of Reopening of assessment u/s 147 - reasons to believe - Addition in respect of all deposits in bank account u/s 68 being unexplained cash credits - assessment was reopened on the basis of information received from DDIT (Investigation) and there were debits and credits entries in the account of the assessee from dubious entities unearthed from investigation and inquiry carried out by the Department -
AO has not issued the statutory notice for informing the change in the incumbency u/s. 129 and validity of jurisdiction of the AO under sections 120, 124 & 127 - HELD THAT:- In this case, original assessment order was passed by DCIT-Central Circle-39, Mumbai. The proceedings u/s. 148 and final re-assessment order dated 21/12/2017 has been passed by DCIT, Central Circle-6(4), Mumbai. In response to the RTI application filed by the assessee it has been informed that Central Circle-39 after restructuring was re-named as Central Circle-6(4) and there was no change of jurisdiction in the case of the assessee. Copy of relevant cadre restructuring has also been enclosed to state that the original change of jurisdiction Central Circle-39 after restructuring was re-named as Central Circle-6(4) and hence, there was no change of the jurisdiction of the assessee. Later on, the assessee’s case was decentralized vide order passed u/s. 127 by PCIT-Central-3 Mumbai to ITO Ward 12(1)(1), Mumbai on 06/07/2020. Copy of PAN history has also been given by the department before us stating that Central Circle-6(4), Mumbai had jurisdiction till 28/11/2020 and later on it was transferred to ward -12(1)(1), Mumbai
Thus, at the time of issuance of notice u/s. 148 and passing of the reassessment order, the jurisdiction lied with Central Circle-6(4), Mumbai only and hence it cannot held that AO lacked jurisdiction or there is any violation of section 120 or Section 124 or Section 127. We do not find any substance and basis for challenging the jurisdiction of the ld. AO by the assessee when the AO who had issued notice u/s. 148 and has passed assessment order had the original jurisdiction upon the assessee. Moreover, assessee had not raised this objection before the ld. AO that he did not have proper jurisdiction which he should have in terms of section 124(3). In so far as ground lack of issuance of notice u/s. 129, is also ill-conceived, because there is no change of incumbent. Accordingly, the grounds No. 1 & 2 as raised by the assessee are dismissed.
Notice issued u/s. 148 is within time limit prescribed u/s 149 or not? - whether notice has been issued on or before 31/03/2017 or post 31/03/2017? - procedure for service by post - HELD THAT:- The notice u/s. 148 was issued and sent through speed post on the registered office and the address mentioned by the assessee on 31st March 2017 which was the date post when limitation ends.
As in the case of R.K. Upadhyaya vs. Shanabhai P. Patel [1987 (4) TMI 5 - SUPREME COURT] has held that service of notice u/s. 148 is not a condition precedent to conferment of jurisdiction of the ITO but it is a condition precedent for making of the order of the assessment.
In the present case the notice has been issued within the time limit prescribed u/s. 149 and therefore, the ground and the objection raised by the assessee is dismissed.
Further, if notice has been issued on the registered address or the address which has been communicated by the assessee to the department and if the same has been sent through registered post or speed post, then in so far as the onus cast upon the AO to send the notice stands discharged.
If the notice has been sent through post with proper address, sent by Registered post with acknowledgement, then the presumption is that delivery of the assessee has been affected. However, here in this case as noted above, the notice sent through speed post returned back with the remark “left”. Even if it is held that notice issued on 31/03/2017 sent through speed post has not been received because postal authority has stated that assessee “left the premise”, then in so far as issue of limitation is concerned which is to be reckoned from the date of issue is valid.
Here in this case the notice sent through speed post may not have been served upon the assessee as it was not found on its registered / official address, then here in this case it has also been brought on record that notices were also sent through ITBA portal on 31/03/2017 and by email which mail assessee received post 12 AM (i.e., 1:02 AM) on 01/04/2017. Even if it is presumed email has been sent post 12 AM, however, the fact of the matter is that once, notice has been issued within time and even if assessee has received the notice on the next date i.e. on 1/04/2017 by electronic media or email which is valid mode of service of notice u/s 282 and 282A, then it is valid service of notice. Accordingly, there is no infirmity in assumption of jurisdiction to pass the reassessment order by the AO. Here the case of the assessee is that notice has been issued post 31st March 2017, which fact we have already discussed and dismissed the assessee’s objection. Thus, it cannot be said that the initiation of proceedings u/s. 148 r.w.s. 149 is bad in law. Accordingly, this ground raised by the assessee is rejected.
Approval u/s. 151 by ld. PCIT Central Circle-3 is mechanical as he has merely stated “yes, I am satisfied. It is a fit case for issue of notice u/s. 148” - The information and inquiry does constitute a tangible material having direct live link nexus that deposits are unexplained and income chargeable to tax has escaped assessment. Thus, it cannot be held that the there was no prima facie belief by the AO that income chargeable to tax has escapement assessment. If reasons are otherwise sustainable in law and the competent authority has given his approval that he is satisfied on such reasons recorded which are based on relevant material indicating escapement of income, then it is sufficient compliance of law u/s. 151. As long as reasons recorded and reason to believe is sustainable, then it is not necessary that the approving authority has to again give his detailed reasons for approving reasons recorded. Thus, approval given by the Ld. PCIT Central Circle-3, Mumbai u/s 151 is in accordance with law and consequently, the ground taken by the ld. Counsel is rejected.
Unexplained deposits - No arguments have been placed by the ld. Counsel and he fairly admitted that no explanation or evidences have been provided by the assessee to explain the deposits or source of deposits or whereabouts of the dubious companies from where money has come before the ld. AO or ld. CIT (A). Even at this stage of second appeal nothing has been filed or explained about the deposits, except for raising various legal issues and grounds which we have rejected. Accordingly, the addition made by the AO is confirmed.
Assessee appeal dismissed.
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2024 (1) TMI 1394
Refusal of application to condone the delay in filing income tax return -petitioner submitted that the petitioner could not file return before the due date for AY 2020-2021, which was extended upto 15.02.2021 because of the COVID-2019 as the father of the petitioner was severely ill and admitted in hospital - entitlement to refund of the amount of the tax deducted at sources higher than the amount of tax payable by the petitioner
HELD THAT:- In view of the recent decision in the case of Pankaj Kailash Agarwal [2024 (4) TMI 549 - BOMBAY HIGH COURT] has held that the legislature has conferred the power to condone the delay to enable the authorities to do substantial justice to the parties by disposing the matter on merits. The routinely passing the order without appreciating the reasons why the provisions for condonation of delay has been provided in the Act, defeats the cause of justice. In the facts of the case also, when the petitioner has preferred an application to condone the delay to get the refund to which he is entitled to, the respondent considering the cause of illness of the father of the petitioner ought to have condoned the delay.
The petition succeeds and accordingly, allowed. The impugned order is hereby quashed and set aside. The respondent is directed to pass a fresh order under Section 119(2)(b) of the Act permitting the petitioner to file the return of income for AY 2020-2021 so as to enable the petitioner to claim the refund in accordance with law.
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2024 (1) TMI 1393
Addition u/s 69B - Addition made behind the back of the appellant on the basis of statements of third party but the opportunity to cross-examine such a person was not granted to the assessee - HELD THAT:- It is evident that the assessee was confronted by the AO with the statements of the third party, on which the assessee has rebutted that such statements are not factually correct and, therefore, the same cannot be used against the assessee, but Ld. AO has discarded such submissions of the assessee without providing the opportunity to cross-examine the third party in the absence of any prayer of the assessee.
To substantiate his contention, the assessee has also submitted that the prime witness, should be called to take his statement to establish the correctness of the fact than has been cropped up from the statements of Third party/Smt. Chutki Bai and Jaswant Kumar Sonant. However, the request of the assessee to cross-examination Mr. Dile Suryavanshi was also considered as unnecessary and a delaying tactic by the assessee, and Ld. AO has culminated the assessment by making the addition u/s 69B.
We have observed that during the assessment proceedings and thereafter before the appellate authority, the assessee was not allowed to substantiate its contentions by way of cross-examination of the parties who have given the statement against the assessee, though no such request was made before the Ld. AO but has raised specific ground before the Ld. CIT(A). The request to call and confront the prime witness Mr. Dile Suryavanshi was also not considered appropriate by the Ld. AO.
Affidavits of such parties were assumed to be afterthought and self-serving documents without confronting the same with the concerned parties. Such proceedings wherein proper opportunity of being heard was not extended to the assessee to explain its case or to substantiate its contentions under the available remedies as per law are against the settled principle of law, in particular when the assessee is saddled with an addition on account of an unexplained investment u/s 69B.
The issue in the present case regarding addition u/s 69B, wherein reasonable opportunity was not afforded to the assessee should be restored back to the files of Ld. AO to adjudicate the same afresh. Needless to say, a reasonable opportunity of being heard shall be provided to the assessee in set aside assessment proceedings. In result ground of the appeal is partly allowed for statistical purposes.
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2024 (1) TMI 1392
Disallowance u/s. 80IA(4)(iii) - new undertaking which is taking up operation and maintenance of industrial park is not approved under Industrial Park Scheme, 2002 & Industrial Park Scheme, 2008 and new firm just came into existence is not approved on or before the specified date as per the provisions of section u/s. 80IA(4)(iii)
Firm was constituted after 31.03.2011, whereas the Industrial Park Scheme, 2002 and Industrial Park Scheme, 2008 provides that deduction is eligible only to those undertakings which were notified between 01.04.1997 and 31.03.2011 - HELD THAT:- No merits in the reasons given by the Assessing Officer to deny deduction u/s. 80IA(4)(iii) of the Act, for the simple reason that the industrial park developed by the assessee company is approved under Industrial Park Scheme, 2002 and the assessee has developed the same within time prescribed under said scheme. Therefore, the date mentioned in section 80IA(4)(iii) of the Act, is qua the date for which the scheme is to be notified and not the actual date of notification of the industrial park. The undertaking and the industrial park of the assessee has been duly approved and notified by the CBDT. The said notified undertaking and industrial park was transferred to the appellant partnership firm as capital contribution. As per provisions of section 80IA(12) of the Act, if the undertaking is transferred and said transfer is not by amalgamation or demerger, the benefit shall be available to the transferee undertaking. Unlike section 80IA(4)(v) of the Act, which stipulates conditions on formation of assessee being an Indian company should be formed before 30.11.2005, no such condition is stipulated in section 80IA(4)(iii) of the Act. Therefore, from the above it is very clear that transfer u/s. 80IA(4)(iii) of the Act, is qua the undertaking and not qua the assessee. Therefore, the reasons given by the Assessing Officer to deny deduction u/s. 80IA(4)(iii) of the Act, with the successor undertaking is not formed within date prescribed under Industrial Park Scheme, 2002 & Industrial Park Scheme, 2008 is not correct and devoid of merits.
Transferor undertaking and transferee undertaking shall be notified as per Industrial Park Scheme - In the present case, transferor undertaking is duly notified, whereas the transferee undertaking is not notified in any of the section. In our considered view, the Assessing Officer is once again failed to understand the provisions of section 80IA(4)(iii) of the Act, in right perspective because as we have stated in earlier part of this order transfer u/s. 80IA(4)(iii) of the Act is qua the undertaking and not qua the assessee. The undertaking owned by the transferor is same undertaking owned by the transferee. It is not a case of the department that the undertaking and industrial park transferred by the transferor is not notified. Further, as per Paragraph 9(4) of the Industrial Park Scheme, 2002 and Paragraph 10 of CBDT notification, if there is a transfer of undertaking, the transferor and transferee should jointly intimate to the DIPP.
In our considered view said compliance is sufficient for the transferee undertaking to claim deduction u/s. 80IA(4)(iii) of the Act for remaining period. This fact is further strengthened by Circular no. 10/2014 issued by the CBDT, where it has been clearly explained the concept of deduction and as per said circular, if an undertaking is transferred to another undertaking other than by way of amalgamation and demerger and in other cases, the transferee undertaking shall be eligible for deduction for remaining unexpired period. Therefore, we are of the considered view that the ground taken by the revenue on this issue fails.
Provisions of section 80IA(4)(iii) restricts the deduction only to the operation and maintenance of industrial park - Government of India has no intention to split the deduction as intended by the revenue. It should be noted that proviso to section 80IA(12) of the Act applies only when there is a transfer of operation and maintenance of industrial park. In the facts of the appellant case, the entire undertaking which developed the industrial park has been transferred and not merely the operation and maintenance alone. Therefore, in our considered view, the reasons given by the Assessing Officer to allow deduction u/s. 80IA(4) of the Act only to operation and maintenance is not in accordance with law.
Exclusion of interest income earned from fixed deposits kept with bank - There is a mandatory requirement of keeping fixed deposits in bank. But fact remains that, said condition is sufficient to hold that interest income earned from fixed deposits is derived from industrial undertaking. In our considered view, it cannot be said that just because there is a condition between the parties for availing loan, any interest income earned from fixed deposits can be said to be derived from an industrial undertaking for the purpose of section 80IA(4).
In order to derive income from an industrial undertaking, there should be direct link between the business activity of the assessee and nature of income earned from industrial undertaking. In the present case, the nature of business of the assessee is to develop, operate and maintain an industrial undertaking and consequently any income derived from said undertaking can be considered as income derived from an industrial undertaking. Therefore, to this extent, we are not in agreement with the arguments of the assessee.
Whether entire interest income should be taxed under the head income from other sources? - The answer is No, because there is a direct link between the funds utilized for keeping fixed deposits in bank and interest income earned from banks. If interest income is to be assessed under the head income from other source, then corresponding interest paid on loan borrowed for the purpose of funds utilized for making fixed deposits also needs to be allowed as deduction.
Therefore, we direct the Assessing Officer to exclude interest income from income derived from industrial undertaking and assess separately under the head income from other source. We also direct the Assessing Officer to allow deduction towards corresponding interest expenditure linked to such income. The Assessing Officer is also directed to exclude interest portion that is relatable to interest income while computing deduction u/s. 80IA(4) of the Act.
Status of the assessee should be that of AOP and not firm - Section 184 of the Act provides the situations under which partnership firm can be treated as AOP. The conditions of section 184 of the Act have been duly complied and same is not under dispute. Further, the MOA of partner companies authorizes to enter into partnership arrangements as required under the Companies Act. Department has also considered the same in the remand report dated 08.12.2017. Therefore, we are of the considered view that the ground taken by the revenue in so far as assessment of the appellant as AOP instead of partnership firm is devoid of merits and thus, rejected.
CIT(A) after considering relevant facts has rightly allowed deduction claimed u/s. 80IA(4)(iii) of the Act, by the appellant in respect of income derived from an industrial undertaking which operate and maintains industrial park developed under Industrial Park Scheme, 2002.
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2024 (1) TMI 1391
Reopening of assessment - validity of the notice issued u/s 148 - disallowance u/s 14A - HELD THAT:- It is not in dispute that the petitioner has issued the dis-allowance u/s 14A of the Act was considered during the course of the original assessment proceedings and after considering the submissions made by the petitioner, AO made dis-allowance u/s 14A r.w.r. 8D.
Merger of orders - Petitioner challenged the assessment order before the CIT (Appeals), the CIT (Appeals) has passed the impugned assessment order holding that the Assessing Officer was justified in making the addition under Section 14A of the Act. Therefore, the issue of dis-allowance under Section 14A of the Act had already merged with the order passed by the CIT (Appeals). In such circumstances, the AO could not have assumed the jurisdiction to issue the impugned notice under Section 148 of the Act on the same ground of dis-allowance under Section 14A read with Rule 8(d) of the Rules.
Therefore, the reasons recorded for reopening of the assessment for the year under consideration is nothing but a change of opinion in absence of any fresh material available on record, which is impermissible.
Assessing Officer has not be able to justify in the reasons recorded that the petitioner has failed to disclose fully and truly all material facts during the course of the original assessment year and admittedly the impugned notice is issued beyond the period of four years for the relevant assessment year. In such circumstances, as per proviso to Section 147 of the act, the respondent would not have any jurisdiction to issue notice for reopening. Decided in favour of assessee.
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2024 (1) TMI 1390
Eligibility Conditions for Compounding - Prosecution u/s 276B - petitioner's failure to pay the tax deducted at source to the credit to the Central Government - HELD THAT:- The petitioner has already deposited the outstanding tax interest and late fees and accordingly, the petitioner was eligible for compounding
Considering the various provisions of the guidelines for compounding the offence, the respondent authority ought to have taken into consideration the fact that the petitioner could not deposit the TDS due to sever financial crisis from the year 2012-2013 on wards.
It is also not in dispute that the respondent has permitted the compounding for assessment years 2013-2014, 2014-2015 and 2016-2017. The respondent has therefore contrary to the provisions of guidelines appears to have rejected the application for compounding filed by the petitioner as the petitioner committed default of failure to pay the tax deducted at source to the credit of the Central Government within prescribed time limit on the same ground, for which such offence was committed for earlier assessment years 2013-2014, 2015-2016 and 2016-2017.
AO could not have held that the petitioner has failed to furnish convincing reason for its default of failure to pay TDS to the credit of the Central Government within prescribed time limit except financial hardships. The financial hardships also remained was the cause for the offences committed for earlier assessment years, which were permitted to be compounded. It is true that the petitioner has committed default continuously for five years for non depositing the TDS and for which, the petitioner is liable for compounding charges para 12 of the guidelines.
Respondent authority therefore ought to have considered the case of the petitioner in terms of para 8.3 of the guidelines by putting stringent conditions for compounding the offence for the year under consideration after following the prescribed procedure of approval as para 10 of the guidelines.
Impugned orders passed u/s 279 (2) are hereby quashed and set aside and the matter is remanded back to the respondent authority to reconsider the application of the petitioner in terms of the guidelines for compounding offence under as per the circular of CBDT dated 14.06.2019.
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2024 (1) TMI 1389
Seeking a declaration that the Google Payments Terms of Service-Seller (IN) posted on 02.06.2022, Payment Policies, Policies relating to Service Fees, Terms and Conditions, posted by the defendants' on its websites/portals/ webpages on various dates, including the Blog-post dated 17.05.2023, all relating to the implementation of Google Play Billing System (GPBS)/User Choice Billing (UCB)/Consumption-Based Model vis-a-vis the Mobile Application as illegal and unenforceable - Seeking rejection of the plaints purportedly under Order VII Rule 11(d) of the Civil Procedure Code, 1908 - HELD THAT:- In the case of Durga Hotel Complex [2007 (3) TMI 379 - SUPREME COURT], the Apex Court observed that “Conceptually, an Ombudsman is only a non- adversarial adjudicator of disputes. He serves as an alternative to the adversary system for resolving disputes, especially between citizens and government agencies. An adversarial adjudication necessarily stands on a higher plane than a settlement of a complaint at the instance of an Ombudsman.” The proceedings before the Ombudsman cannot oust the jurisdiction of the civil court. As per Section 16(2)(e) of the Ombudsman Scheme, the Ombudsman may reject a complaint at any stage, if the complaint requires consideration of elaborate documentary and oral evidence.
Order VII Rule 11(d) of the Code of Civil Procedure, 1908, applies to those cases only where a suit made by the plaintiff in the plaint, without any doubt or dispute, shows that the suit is barred by any law in force. An application for rejection of plaint can be filed if the allegations made in the plaint considered on face value and taken to be correct in its entirety appear to be barred by any law. The power to reject a plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 ought not to be exercised except in a clear cut case. The question of rejection of plaint has to be decided on mere perusal of the plaint. The Court can only look into the plaint filed and the documents submitted by the plaintiff, but cannot look into the defendants' defence.
Under Section 33 of the Act of 2002, the Commission has powers to issue interim directions also. Section 39 of the Act of 2002 provides for execution of orders of the Commission, imposing monetary penalty. If the order of the Commission is contravened, the Commission is entitled to impose penalties under Chapter VI of the Act of 2002. Appeal is also provided against the order of the Commission - the genesis of the plaintiffs' case is that the defendant Google is in a dominant position and by exercising its dominant position has imposed certain conditions, which are unconscionable and hit by Section 23 of the ICA, 1872. The relationship between the parties is not disputed. The same is an accepted position. If a party abuses its dominant position, then the Commission can take cognizance of the same as referred to in Section 4 of the Act of 2002. Under Section 27 of the Act of 2002, the Commission can direct that the agreements shall stand modified to the extent and in the manner as may be specified in the order by the Commission.
The grievance raised by the plaintiffs can be dealt with by the Commission under the Act of 2002 and it is not beyond the purview of the Act of 2002. Some of the plaintiffs have approached the Competition Commission of India under the Act of 2002 and were also granted reliefs. There is no reason for not approaching the Commission once again. In fact, the plaintiffs Matrimony and People Interactive Private Limited had approached the Commission. The pleadings in the plaint also contain the averments of the order passed by the Competition Commission of India holding Google to be a dominant player in the relevant market and that Google abuses its dominant position in contravention of provisions of Section 4 of the Act of 2002.
There are no error committed by the learned Single Judge in rejecting the plaint under Order VII Rule 11(d) of the Civil Procedure Code, 1908 - appeal dismissed.
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2024 (1) TMI 1388
Contravention of the provisions of Sections 3 and 4 of Competition Act, 2002 - Abuse of dominant position by the Opposite Party (OP) in the film exhibition market - controlling more than half of the upscale multiplex screens in India - special treatment to films of powerful and monetarily affluent production houses and constraining the entry of films by independent filmmakers - HELD THAT:- The Commission is of the view that the commercial wisdom of the exhibitors is largely governed by consumer demand and unless harm to competition is apparent, any intervention will only lead to undesirable consequence by taking away the autonomy of such undertaking and substituting the decision of such entity by the decision of the regulator. In the realm of competition law, it is widely understood that firms have an autonomy to choose their trading partners as long as the exercise of such autonomy does not affect the fair functioning of the markets. The Commission in its various orders has upheld the freedom enjoyed by the enterprises in the market subject to compliance of the provisions of the Act.
The Commission is of the view that there must be autonomy available to the exhibitors to deal with movies the way they want, in alignment with their business requirements and subject to provisions of the Act. In this vein, nobody can ask for an absolute right to deal with a particular business. Similarly, there is no absolute right of refusal. This will depend upon the facts and circumstances of each case. Thus, the right to choose a movie for exhibition lies with OP and this freedom cannot be curtailed by compelling it to exhibit the movie of the Informant unless and until it causes any harm to competition.
The Commission is of the opinion that, prima facie, as there appears no discernible competition concern in the matter, it would not be appropriate for the Commission to delve into allegations of abuse of dominant position which requires delineation of relevant market. Accordingly, the Commission does not deem it necessary to delineate the relevant market and undertake further assessment thereupon. With regard to applicability of Section 3(4) of the Act, the Commission is of the view that the existence of an agreement/arrangement between the parties is a sine qua non which aspect is neither captured in the Information nor any material evidence given in relation thereto. Further, the Commission notes that the mere fact that the OP is vertically integrating itself with film production does not per se amount to any contravention of Section 3(4) of the Act.
Prima-facie, no case of contravention of Section 4 of the Act is made out in the facts, circumstances and allegations levelled in the case and the matter is ordered to be closed forthwith under Section 26(2) of the Act. Consequently, no case for grant of relief(s) as sought under Section 33 of the Act arises in the matter.
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2024 (1) TMI 1387
Contravention of provisions of Section 4 of Competition Act, 2002 - taking undue/ illegal advantage of Faster Adoption and Manufacturing of Electric & Hybrid Vehicles Policy (FAME) launched by the Ministry of Heavy Industries and Public Enterprises, through Department of Heavy Industries (DHI) - HELD THAT:- The Commission has perused the Information, material provided by the Informant as well as publicly available information and observes that the gravamen of allegations of the Informant is under-pricing by the OPs of their ETWs so as to avail the demand incentive/ subsidy provided by the Government under the FAME policy, charging for essential components such as charger, software etc. separately from the customer, and consequently foreclosing the benefit of subsidy to other manufacturers whose products actually fall within the price limit set under the FAME policy. The Informant has alleged abuse of dominant position by the OPs in contravention of provisions of Section 4 of the Act.
For an analysis of the case under Section 4 of the Act, the first requirement is to delineate the relevant market as per Section 2(r) of the Act which comprises of relevant product market and relevant geographic market in terms of Section 2 (t) and 2(s) of the Act. The next step is to assess the dominance of OPs in the relevant market so delineated, in terms of the factors enumerated under Section 19(4) of the Act. Once the dominance of an OP is established, the final step is to analyse the allegations pertaining to abuse of dominance in terms of provisions of Section 4 of the Act.
The relevant product market in the instant matter may be delineated as market for manufacture and sale of ETWs. Further, it may be noted that the conditions of demand and supply are generally homogenous across India except differences in taxes imposed/incentives provided by different state governments. Therefore, the relevant geographic market may be delineated as India, and thus, the relevant market in the instant matter may be carved out as market for manufacture and sale of ETWs in India - the Commission notes that there appears to be no single player which is able to exert market power in its favour or appears to demonstrate a position of strength to operate independently of market forces in terms of explanation (a) to Section 4 of the Act, in the relevant market. Therefore, none of the OPs appear to have a dominant position in the relevant market.
The Commission finds that no prima facie case of contravention of the provisions of Section 4 of the Act is made out against any of the OPs in the instant matter. Accordingly, the information is ordered to be closed forthwith in terms of the provisions contained in Section 26(2) of the Act.
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2024 (1) TMI 1386
Refusal to grant approval u/s 12AA - ex parte order passed by the CIT (Exemptions) without giving an opportunity of being heard to the respondent – Trust - denial of principle of natural justice - Tribunal setting aside the order under Section 12AA to the file of the CIT (ExeMption) - HELD THAT- CIT (Exemptions) passed the ex parte order without giving an opportunity of hearing to present his case in detail and only two notices of hearing were issued to the respondent – assessee out of which only one was not complied with, the Tribunal, therefore, in the interest of justice, has set aside the order of rejection passed by the CIT (Exemptions) and remanded the matter for fresh consideration after giving an opportunity of hearing to the respondent – assessee.
In view of the above findings recorded by the Tribunal, we are of the opinion that no questions of law much less any substantial question of law would arise from the impugned order of the Tribunal as the matter is restored to the CIT (Exemptions) to pass a fresh de novo order.
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2024 (1) TMI 1385
Contravention of provisions of Section 4 of Competition Act, 2002 - abuse of dominant position - charging excessive fares - HELD THAT:- The Commission has perused the Information and other material available on record. It appears that the Informant is primarily aggrieved by the exclusivity granted to KSRTC by the Government of Kerala by way of notification for operating buses on the Nilakkal- Pamba route to reach Sabarimala temple as well as charging of exorbitant fares from passengers on the said route. This has been alleged to be in contravention of provisions of Section 4 of the Act.
With regard to grant of exclusivity to KSRTC for operating on certain routes, the Commission notes from the submission of KSRTC that the same has been done by the Government of Kerala, in exercise of powers conferred under the provisions of the Motor Vehicles Act, 1988 for providing adequate, economical and properly coordinated passenger road transport service in the public interest - Commission also notes that the said notification is applicable to both nationalized and non-nationalized routes and has provisions for enhancement of rate of fares for: (a) Ghat roads and; (b) during the festival occasions as mentioned in the schedule appended to the said notification. The Commission further notes that the fares on per kilometer basis are being charged on a uniform basis as per the said notification by both public and private operators.
The Commission is of the opinion that since there appears no discernible competition concern in the matter, it may not be appropriate to delve into allegations of abuse of dominant position.
Prima-facie, no case of contravention of Section 4 of the Act is made out in the facts, circumstances and allegations levelled in the case and the matter is ordered to be closed forthwith under Section 26(2) of the Act. Consequently, no case for grant of relief as sought under Section 33 of the Act arises in the matter.
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2024 (1) TMI 1384
Contravention of provisions of Section 4 of Competition Act, 2002 - abuse of dominance by the Opposite Parties in the market for purchasing pollution dust from induction furnaces - HELD THAT:- The Commission notes that the Informant has alleged abuse of dominance by the OPs in the market for purchase of pollution dust from the induction furnaces, wherein OP- 1, in connivance with OP-2, is making undue profits by extracting zinc from the pollution dust, procured from induction furnaces at low prices vis-à-vis market rate of zinc.
The Commission further observes that there has been entry of atleast two entities that purchase pollution dust. Further, the bills/invoices provided alongwith the Information indicate that the procurement price of pollution dust has increased from Rs. 8 per kg to Rs. 25 per kg. Accordingly, the Commission notes that in the facts and circumstances of the present case, more players coming into the market and increase in procurement prices are indicative of greater competition - The Commission also notes that there is no specific allegation against OP-2 in respect of violation of provisions of Section 4 of the Act.
The Commission is of the prima facie view that there is no competition concern arising in the present matter and therefore, the matter be closed forthwith under Section 26(2) of the Act.
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2024 (1) TMI 1383
Challenge to SCN/assessment orders issued by the respondent - GST Department raising demand of GST on royalty paid to the respondent - Mining Department towards mining lease - HELD THAT:- The petitioner is not in a position to dispute the fact that the issue regarding demand of GST on royalty paid to the respondent - Mining Department towards mining lease has already been decided by this Court in SUDERSHAN LAL GUPTA CONTRACTOR VERSUS UNION OF INDIA, STATE OF RAJASTHAN, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, DEPUTY COMMISSIONER OF STATE TAX, CIRCLE KARAULI, RAJASTHAN [2022 (10) TMI 43 - RAJASTHAN HIGH COURT] and SHREE BASANT BHANDAR INT UDYOG AND ORS. VERSUS UNION OF INDIA; THE STATE OF RAJASTHAN; ASSISTANT COMMISSIONER, SRI GANGANAGAR AND ORS. [2022 (9) TMI 1442 - RAJASTHAN HIGH COURT].
This writ petition is dismissed in terms of the orders passed by this Court in Sudershan Lal Gupta’s case and Shree Basant Bhandar Int Udyog’s case.
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2024 (1) TMI 1382
Dismissal of review petition - HELD THAT:- These appeals were kept pending, as the Review Petitions filed in the case of STATE TAX OFFICER (1) VERSUS RAINBOW PAPERS LIMITED [2022 (9) TMI 317 - SUPREME COURT] on which reliance has been placed were pending. Now, the Review Petitions have been dismissed.
In the light of the decision in the case of State Tax Officer v. Rainbow Papers Limited, the impugned order dated 22nd March, 2022 passed by the National Company Law Appellate Tribunal set aside. It is obvious that these appeals will be governed by the directions issued in the said decision.
Appeal allowed.
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2024 (1) TMI 1381
Challenge to impugned adjudication order/assessment order - opportunity of hearing as contemplated u/s 75(4) of the WBGST/CGST Act was not afforded by the proper officer to the appellant/petitioner before passing the impugned adjudication order/assessment order for the financial year 2021-22 - violation of principles of natural justice - HELD THAT:- The facts could not be disputed by learned State Advocate that an opportunity of hearing as contemplated under Section 75(4) of the WBGST/CGST Act was not afforded by the proper officer to the appellant/petitioner before passing the impugned adjudication order/assessment order for the financial year 2021-22 dated 9.12.2022 under Section 74 of the Act. Thus, non-compliance of statutory mandate under Section 75(4) of the WBGST/CGST Act has been admitted by the State respondents.
On similar set of facts an appeal in PRAPTI CHAKRABORTY VERSUS STATE OF WEST BENGAL & ORS [2023 (8) TMI 1550 - CALCUTTA HIGH COURT] has been allowed by a separate judgment in which it is held that an opportunity of hearing as contemplated under Section 75(4) of the WBGST/CGST Act is the statutory mandate and in absence of compliance of the statutory mandate, the order passed by the proper officer under Section 73 of the WBGST/CGST Act, cannot be sustained. Respectfully following the judgment passed in the aforesaid case, this appeal also deserves to be allowed.
Matter is remitted back to the concerned Assistant Commissioner with a direction to pass an order afresh in accordance with law, after affording reasonable opportunity of hearing to the appellant/petitioner - petition allowed by way of remand.
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2024 (1) TMI 1380
Lack of territorial jurisdiction with the AO - challenge to the territorial jurisdiction of the AO, Ward 19(2)(4), Mumbai, who passed the assessment order - as submitted that the CIT (A) ought to have held that the notice issued by the AO u/s 143(2) of the Act and the consequent assessment order passed u/s 143(3) of the Act are without jurisdiction as per the provisions of Section 120 r.w.s. 124 - HELD THAT:- A conjoint reading of Sections 120 and 124(1) of the Act, with the directions or orders issued by the Board, would indicate that the territorial jurisdiction of the AO is determined on the basis of place where the assessee resides and/or carries on his business or profession. As per notification the jurisdiction of ITO Ward 19(2)(4), Mumbai as notified u/s 120 of the Act extends to Ward D of the Municipal Corporation of Greater Mumbai, excepting the areas set out in the said notification. We, therefore, find that the AO of Ward 19(2)(4), Mumbai lacked territorial jurisdiction to pass the impugned assessment order. As noticed earlier, it is not in dispute that such an objection was raised within the stipulated time and was not dealt with by the AO.
A perusal of order of CIT (A) would also go to show that CIT (A) has not dealt with this aspect, inasmuch as ground nos. 1 and 2 were separate and distinct grounds, than those on merits and thus, the disposal of the grounds on merits cannot “amount to disposal” of grounds nos. 1 and 2 as held by the CIT(A).
It is trite that an order which is passed without jurisdiction (which is an issue which goes to the root of the matter) is non est in the eyes of law.
Considering the fact that at the time of assessment, the appellant-assessee was residing and carrying on her profession at Bangalore, the assumption of jurisdiction by the AO at Mumbai was invalid. The change of address in the records and/or migration of PAN are not strictly relevant in the matter where the jurisdiction is governed by the statutory provisions as contained in Section 120 read with Section 124 of the Act and the notification issued by the Board.
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2024 (1) TMI 1379
Condonation of delay of 288 days in filing this special leave petition - HELD THAT:- It is noted that a similar matter in COMMISSIONER GST AND CENTRAL EXCISE & ANR. VERSUS M/S SHREE BABA EXPORTS [2022 (8) TMI 634 - SC ORDER] has been dismissed by this Court.
Consequently, this special leave petition is dismissed both on the ground of delay as well as the order passed in the aforesaid case.
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2024 (1) TMI 1378
Denial of CENVAT Credit - input services - courier service - vehicle repair service - insurance and photocopy services - credit was denied on the ground that the same are not eligible input services as they have not been used by the appellant directly or indirectly in or in relation to the manufacture of final product and clearance of final product upto the place of removal - HELD THAT:- It is found that during the relevant period the phrase used in the definition of input services “activities relating to business” has been given very widen interpretation by various decisions of the Tribunal. Further, it is found that all these input services on which Cenvat credit has been denied by the Ld. Commissioner have been held as input services on which Cenvat credit cannot be denied.
The Tribunal by its decisions cited above have consistently held that the insurance services for ensuring the assets of the company as well as medical claim of the employees, and courier services, vehicle repair services and photocopy services are having nexus with the manufacture of the final products and these services have been used in relation to the manufacture of final products and its clearance from/upto the place of removal.
The denial of Cenvat credit on impugned input services is not sustainable in law, therefore, the impugned order is set aside and the appeal of the appellant allowed with consequential relief, if any, as per law and hold that they are entitled to Cenvat credit on input services.
Appeal allowed.
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2024 (1) TMI 1377
Challenge to the action of Respondent Banks or Non-Banking Financial Companies, based on a Notification dated 29th May, 2015 issued under Section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 - none of the Respondent Banks/NBFCs have followed the procedure as provided under the said Notification, for identifying the incipient stress undergone by the Petitioners and its consequent due classification in the Special Mention Account - Issuance of notices under Section 13(2) of the SARFAESI Act, 2002 - HELD THAT:- From the perusal of the Notification, it can be seen that the whole process as provided under the said Notification starts from identification of ‘Incipient Stress’ in the account of an MSME and thereafter classifying it in 3 sub-categories provided as per Clause 1(1) of the said Notification. None of the learned Counsels appearing for either the Petitioners or the Respondent Banks/NBFCs have submitted anything about this aspect of ‘identification of incipient stress’. This Court has also on its own endeavored to find out guiding principles on this issue, so that it can be beneficially used. However, no such guidance is found. Faced with such a stonewall of non-availability of any precedent or earlier views, only one choice left and that is to go to the very concept of “incipient stress” as it might have been intended by the legislature. After all, it is one of the Court’s fundamental functions to interpret what is provided by the legislature.
On a conjoint reading of Clause 1(1) and Clause 1(3) of the said Notification, leads to an indisputable interpretation that the said Notification can be pressed into service only and only after the MSME [such as the Petitioners] approaches the Banks/NBFCs with an appropriate application supported by an affidavit of the authorized person placing on record the bundle of facts which lead to the conclusion of incipient stress and only after that, the Banks or NBFCs are required to categorize them as SMA-0, SMA-1 and SMA-2.
Leave granted to the Petitioners to agitate the other issues in their petitions, which may vary on facts, on a case-to- case basis by adopting alternate remedies, as available under law.
Petition disposed off.
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