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2021 (8) TMI 1397 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Violations of disclosure requirements in terms of SAST Regulations and SEBI ‘PIT Regulations 1992’ read with SEBI ‘PIT Regulations 2015’ - SEBI found irregularities in the scrip of the Company - off market transactions - Manner of creating pledge or hypothecation - appellant submitted that the transfer of the shares to the appellant later on would not amount to purchase of shares - HELD THAT:- As per Section 10 of the Depositories Act, 1996 a person in whose name the shares are recorded with the depository is deemed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner. Tribunal considered the provisions of Section 150 of the Companies Act which requires every company to keep a register of its members and enter therein their particulars of shares held by them, as referred to in the section. Further survey of various relevant provisions was taken.
Ultimately, it was held that the submissions that retransfer of the shares by the Bank to the appellant therein would not amount to acquisition of the shares cannot be accepted. It was held that such arguments would mean circumventing Takeover Code and Regulation 58 of the Depository Regulations, which cannot be permitted. It was further found that when the law prescribes course for creation of a pledge of shares, the parties cannot agree to create a pledge contrary to the SAST Regulations. Considering all these facts the contention of the appellants was negativated and the appeal against the order of the respondent SEBI was dismissed.
Taking into consideration all these factors and the law as crystallized, in our view, the submissions of the appellants cannot be accepted. It is an admitted fact that the shares were transferred to the concerned noticees. Thereafter the shares were again transferred in the demat accounts of the appellants in the similar fashion. Appellants have thus violated the provisions of the regulations detailed above. The order of the AO, therefore cannot be faulted.
As regards the issue of delay in launching the proceedings, we find that no plea is taken that the delay has caused any prejudice. Delay simpliciter, if any would not lead us to quash the proceedings initiated by SEBI.
As regards the quantum of penalty, the learned AO has imposed the penalty against the Appellants of Rs. 10 lakh under Section 15H of SEBI Act jointly and severally, under Section 23H of SCRA of Rs. 10 lakh each and Rs. 10 lakh only on the Appellant no. 1 under Section 15A(b) of the SEBI Act. Considering the fact that the violations were made on several occasions as detailed in the impugned order, we do not find any reason to interfere in the impugned order in this regard also.
The appeal is therefore dismissed.
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2021 (8) TMI 1396 - ITAT RAIPUR
Validity of Revision u/s 263 - CIT noted difference of sale consideration and value determined by Stamp Valuation Authority in respect of 12 such persons and that the AO failed to verify and applying the correct law - PCIT set aside the assessment order and directed to verify the sale deed for the year under consideration and pass the assessment order afresh by giving adequate opportunity to the assessee - assessee argued No fair and proper opportunity was given by CIT - HELD THAT:- It is an admitted fact that ld. PCIT issued show-cause notice u/s 263 dated 13/03/2021 for fixing the date of hearing on 31/03/2021. PCIT passed the order on 31/03/2021 itself.
We find that assessee filed copy of reply dated 31/03/2021 before the ld. PCIT.
We find that ld. PCIT has not recorded the contents of reply filed by the assessee. We, instead of going on the merit and demerit of the issues identified by ld. PCIT for revision find that the ld. PCIT passed the order in a hasty manner and without giving fair and proper opportunity. Therefore we deem it appropriate to restore the case back to the file of ld. PCIT to decide the issues identified by him afresh after giving opportunity of hearing to the assessee.
Appeals filed by the assessee are allowed for statistical purpose.
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2021 (8) TMI 1395 - ITAT KOLKATA
Revision u/s 263 - As per CIT there is failure on the part of the AO to assess the income of the assessee u/s. 144/147 of the Act and found it erroneous as it is prejudicial to the interest of the revenue - HELD THAT:- The impugned order has been passed by the Ld. PCIT without affording proper opportunity of being heard to the assessee. Though the three (3) notices were issued by the Revenue fixing the date of hearing, but finally, the adjournment application as part of the record before us, though suggests the request for adjournment on behalf of the assessee before the ld. PCIT made, the same is not reflecting in the order passed by the ld. PCIT dt. 13-03-2020, issued after four(4) days from the date of making such request.
In that event, we find that the principle of natural justice has not been properly adhered to. Therefore, for the ends of justice, we find it fit and proper to set aside the issue to the file of the PCIT with a further direction upon him to adjudicate the matter on merits positively upon granting an opportunity of being heard to the assessee and upon taking into consideration the evidences. Appeal of the assessee is allowed for statistical purpose.
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2021 (8) TMI 1394 - CESTAT ALLAHABAD
Seeking adjournment of appeal - appeal was dismissed on monetary grounds - Revenue informs that there has been an error in the Final Order as the litigation policy was applicable only for central excise and service tax matters and not to Customs matter.
The learned advocate for the assessee mentioned that this appeal arise from same common impugned order wherein the Commissioner (Appeals) has set aside the absolute confiscation of gold which was seized from the appellant. So the appellant assessee is in appeal against the order for penalty and redemption fine whereas Revenue is in appeal against modification of absolute confiscation to simple confiscation.
HELD THAT:- These appeals are adjourned. Both the appeals are tagged together. Put up this matter for further order as and when the bench is available after three months.
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2021 (8) TMI 1393 - MADRAS HIGH COURT
Rejection of petition submitted by the writ petitioner seeking to modify the punishment of removal from service imposed on him into one of compulsory retirement was set aside and certain directions were issued - HELD THAT:- The courts cannot assume the function of disciplinary/departmental authorities and to decide the quantum of punishment and nature of penalty to be awarded, as this function is exclusively within the jurisdiction of the competent authority, but, an exception is carved out therein to the effect that if the co-delinquent is awarded lesser punishment by the disciplinary authority even when the charges of misconduct was identical or the co-delinquent was foisted with more serious charges, then the Court is at liberty to interfere with the punishment. In such case, instead of remitting the matter back, the Court can substitute a suitable punishment.
The writ petitioner is entitled for the similar treatment, that has been extended to N.Subramanian and after passage of time, remitting the matter again to the authorities would not serve any purpose. Thus, directing the authorities to modify the punishment imposed on the writ petitioner to the one that has been imposed on N.Subramanian would meet the ends of justice. Thus, the learned Single Judge rightly set aside the Government Order refusing to extent such benefit to him.
The Writ Appeal is dismissed and the order of the learned Single Judge is confirmed.
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2021 (8) TMI 1392 - SUPREME COURT
Contempt of Court - Wilful Disobedience or not - failure of a party to comply with an undertaking, on the basis of which a conditional order of stay was granted - HELD THAT:- It is true that this Court has held in a series of decisions that the wilful breach of the undertaking given to the Court amounts to contempt of Court under Section 2(b) of the Act. But the Court has always seen (i) the nature of the undertaking made; (ii) the benefit if any, reaped by the party giving the undertaking; and (iii) whether the filing of the undertaking was with a view to play fraud upon the court or to hoodwink the opposite party.
The distinction between an order passed on consent terms and an order passed solely on the basis of an undertaking given to court and the distinction between a person playing fraud on the court thereby obstructing the course of justice and a person playing fraud on one of the parties, was brought out by this Court in BABU RAM GUPTA VERSUS SUDHIR BHASIN [1979 (4) TMI 164 - SUPREME COURT] where it was held that In the instant case, we have already held that there is neither any written undertaking filed by the appellant nor was any such undertaking impliedly or expressly incorporated in the order impugned. Thus, there being no undertaking at all the question of breach of such an undertaking does not arise.
There is no dispute on facts that the mortgaged properties have now been sold and with extraordinary efforts, the Bank has also taken possession. The petitioners have also spent 11 days in custody out of the total period of imprisonment of three months imposed by the High Court. In such circumstances, we think that it is sufficient punishment for the petitioners.
Therefore, the SLP is disposed of upholding the finding of the learned Single Judge and the Division Bench of the High Court that the petitioners are guilty of contempt of court, but reducing the period of sentence from three months to the period of imprisonment already suffered/undergone by the petitioners - application disposed off.
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2021 (8) TMI 1391 - ITAT MUMBAI
Rectification of mistake - mistake being apparent on the face of record - Ground 11 to 13 - Transfer pricing adjustment on account of payment of service fees to Cadbury Holding Limited - method followed by TPO for making adjustment was not a method prescribed under the Act.
HELD THAT:- We find that the related facts and circumstances of the issue raised by the assessee in the grounds no.11 to 13 of the present appeal is materially identical to the issue decided by us vide grounds no.8 to 11, in Para–14, 15 and 16, wherein we have allowed the issue while following the decision of the Co–ordinate Bench of the Tribunal rendered in Kodak India Pvt. Ltd. [2013 (11) TMI 667 - ITAT MUMBAI]. Since the issue raised in these grounds no.11 to 13, are identical to the issue decided by us in grounds no.8 to 11 vide Para–14, 15 and 16, as aforesaid, consistent with the view taken therein, we set aside the impugned order passed by the learned CIT(A) and allow these grounds.
Corporate tax adjustment on account of alleged excess deduction u/s 80-IC of the Act - We notice that the Co–ordinate Bench has accepted the method of allocation with regard to interest, VRS decrease in stock, direct expenses, direct marketing cost and selling & distribution expenses, royalty and technical fees. The bench has remitted back to AO only the other overhead for verification. Now before us, it is brought to our notice that all operational and establishment expenses were uniformly allocated and there is no separate category of “Other Overheads”. Accordingly, we also deem it fit to remit only for limited purpose of verification of aspect of allocation method adopted to the file of the Assessing Officer. Accordingly, the ground raised by the assessee is allowed for statistical purposes.
Misc. application is allowed.
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2021 (8) TMI 1390 - SC ORDER
Addition u/s 14A r.w.r. 8D - exempt income necessarily be earned in the AY in question for the applicability of the said provision - HELD THAT:- Issue notice.
Tag with M/S IL AND FS ENERGY DEVELOPMENT COMPANY LTD. [2018 (5) TMI 2126 - SC ORDER]
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2021 (8) TMI 1389 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Seeking approval of the Resolution Plan approved by the Committee of Creditors which plan was submitted by Respondent No.1 - Whether Resolution Plan has provision to transfer personal properties of the Appellants who had given their personal properties as security in favour of the Corporate Debtor, whom Corporate Debtor took loan?
HELD THAT:- Under Section 61(3) of the IBC that the Resolution Plan as approved by the Adjudicating Authority is in contravention of the provisions of law and there have been material irregularities in exercise of powers by the Adjudicating Authority when it directed the Appellants, that the owners of the premises as mentioned in the judgment shall enter into Tripartite Agreements for transfer of the premises (as mentioned in para 18 of impugned order). In fact, if para 18 is seen, after describing the properties in the chart there is also portion added which says that the Financial Creditors shall be at liberty to proceed against the properties of the Promoters erstwhile Directors/ Guarantors “other than those mentioned above to recover their balance”. This, in the Resolution Plan would be blank cheque given to proceed even with regard to any other property also of the Personal Guarantors.
Thus, without resorting to appropriate proceedings against the Personal Guarantors of Corporate Debtor this is irregular exercise of powers.
The Resolution Plan approved by the Adjudicating Authority is rejected. All actions taken in consequence of the impugned order approving the Resolution Plan shall stand set aside - appeal allowed.
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2021 (8) TMI 1388 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Seeking to increase the authorized share capital without paying any fees / Stamp duty to the RoC - HELD THAT:- The Adjudicating Authority while approving the Resolution Plan has expressly covered the issues as required for the approval of the plan and nowhere such waival is explicitly or implicitly provided for - there are no reason that when a new company takes over and starts at a new slate and take certain management decision then everything cannot be exempted at a later stage as it is a business decision to expand the business and based on those probability of cash inflow, cash outflow is provisioned for.
There are no merits in the appeal - appeal dismissed.
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2021 (8) TMI 1387 - ITAT DELHI
Exemption u/s 11 - AO examined the activity of the assessee and held that it falls under General Public Utility and is charging fees from customers and has obtained Intellectual Property Rights (IPR) from Belgium and transferring through license agreement use of such IPR and un-species, thus covered by the proviso to Section 2(15) - whether assessee’s activities are not within the purview of the section 2(15)? - CIT(A) allowed deduction - HELD THAT:- Revenue could not show us that the above order of the co-ordinate bench has been reversed by the Hon’ble High Court. In view of this the order of the co-ordinate bench in assessee’s own case for earlier year binds - Accordingly, we hold that the assessee is entitled to the benefit of Section 11 and 12 of the Act and there is no infirmity in the order of the ld. CIT (Appeals). Accordingly, ground No. 1 of both the appeals are dismissed.
Claim of the depreciation, despite the assessee has claimed the whole cost of the assets as application of the income at the time of purchase of those assets has been allowed by the ld. CIT (Appeals) following the decision of Indraprastha Cancer Society [2014 (11) TMI 733 - DELHI HIGH COURT] - We do not find any infirmity in the order of the ld. CIT (Appeals) in allowing the claim of depreciation to the assessee for both the years.
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2021 (8) TMI 1386 - DELHI HIGH COURT
Validity of faceless assessment u/s 144B - notice of demand, issued u/s 156 and the notice issued for initiating penalty proceedings u/s 270A - HELD THAT:- As per sub-clauses (b) and (c) of clause (xvi) of Section 5(1) of the 2019 Scheme, read with Section 144B(7)(vii) oblige the revenue, to follow the principles of natural justice, where there is a variation made in the taxable income to the prejudice of the assessee. [See Ritnand Balved Education Foundation vs. National Faceless Assessment Centre [2021 (6) TMI 17 - DELHI HIGH COURT]].
A perusal of the impugned assessment order would show that, variation has been made in the taxable income to the prejudice of the assessee.The record shows that, the assessee had claimed exemptions under Section 11/12 of the Act, and thus, declared its income in the relevant AY i.e., 2018-2019, as “Nil”.
AO via the impugned assessment order has made an addition to the taxable income of the assessee.
In view of this, it is evident that variation was made to declared taxable income of the assessee which, as noticed above, was Nil, albeit, without issuance of a show cause notice-cum-draft assessment order. Admittedly, the assessee had no opportunity to respond to the additions made.
Given these admitted circumstances, the impugned assessment order as also the consequential notices, issued under Section 156 and 270A would have to be set aside.
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2021 (8) TMI 1385 - SUPREME COURT
Restraint from taking possession of the property in the Appellant's possession - eviction from the Secured Asset without due process of law - protected tenant (of secured asset) under the provisions of the Maharashtra Rent Control Act 1999 - HELD THAT:- Procedural mechanism for taking possession of the Secured Asset is provided Under Section 14 of the SARFAESI Act. Section 17 of the SARFAESI Act provides for the right of appeal to any person including the borrower to approach Debt Recovery Tribunal (DRT). Section 17 has been amended by Act No. 44 of 2016 providing for challenging the measures to recover secured debts (for short, "the Amendment"). Under the Amendment, possession can be restored to the borrower or such other aggrieved person. This Amendment has come into force w.e.f. 1st September, 2016.
This Court in HARSHAD GOVARDHAN SONDAGAR VERSUS INTERNATIONAL ASSETS RECONSTRUCTION CO. LTD & ORS [2015 (11) TMI 1315 - SUPREME COURT] has held that right of appeal is available to the tenant claiming under the borrower. In KANAIYALAL LALCHAND SACHDEV VERSUS STATE OF MAHARASHTRA [2011 (2) TMI 1277 - SUPREME COURT] this Court has held that DRT can not only set aside the action of the secured creditor but even restore the status quo ante. Therefore, an alternative remedy was available to the Appellant to challenge the impugned order Under Section 17 of the SARFAESI Act even before the amendment to Section 17 of the SARFAESI Act - However, given that the instant appeal has been pending consideration before this Court from the year 2016, it is proposed to examine the case on merits without directing the Appellant to avail the alternative remedy.
In Harshad Govardhan Sondagar this Court has categorically held that if the tenancy claim is for any term exceeding one year, the tenancy can be made only by a registered instrument.
A Three-Judge Bench of this Court in BAJARANG SHYAMSUNDER AGARWAL VERSUS CENTRAL BANK OF INDIA & ANOTHER [2019 (9) TMI 569 - SUPREME COURT], after considering almost all decisions of this Court, in relation to the right of a tenant in possession of the secured asset, has held that if a valid tenancy under law is in existence even prior to the creation of the mortgage, such tenant's possession cannot be disturbed by the secured creditor by taking possession of the property. If a tenancy under law comes into existence after the creation of a mortgage but prior to issuance of a notice Under Section 13(2) of the SARFAESI Act, it has to satisfy the conditions of Section 65-A of the Transfer of Property Act, 1882. If a tenant claims that he is entitled to possession of a Secured Asset for a term of more than a year, it has to be supported by the execution of a registered instrument.
In the present case, first of all there is a serious doubt as to the bona fide of the tenant, as there is no good or sufficient evidence to establish the tenancy of the Appellant. According to the Appellant, he is a tenant of the Secured Asset from 12.06.2012. However, the documents produced in support of his claim are xerox copies of the rent receipts and the first xerox copy of the rent receipt is of 12.05.2013 which is after the date of creation of the mortgage - even if the tenancy has been claimed to be renewed in terms of Section 13(13) of the SARFAESI Act, the Borrower would be required to seek consent of the secured creditor for transfer of the Secured Asset by way of sale, lease or otherwise, after issuance of the notice Under Section 13(2) of the SARFAESI Act and, admittedly, no such consent has been sought by the Borrower in the present case.
There are no merit in these appeals which are accordingly dismissed.
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2021 (8) TMI 1384 - MADRAS HIGH COURT
Prolonged suspension for more than six years - case of Revenue is that the writ court, after granting a direction to the criminal court to conclude the proceedings in a time bound manner, should not have directed revocation of suspension, as the result of the criminal proceedings itself would give a solution to the issue as to whether the suspension of the petitioner is to be revoked or not - HELD THAT:- Under similar circumstances, a Division Bench of this Court in the case of The Deputy Inspector General of Police, Coimbatore Range, Coimbatore vs. S.Govindaraj, [2011 (11) TMI 875 - MADRAS HIGH COURT] while considering Rule 3(e)(5) of the Tamil Nadu Police Subordinate Services (Discipline and Appeal) Rules, 1955, has categorically held that after a period of six months from the date of suspension, if an incumbent has to be paid 75% of his salary by way of subsistence allowance, such a person could be posted in a nonsensitive post, may be in a far off place.
In the case on hand, the appellants have not followed the regulations laid down under Tamil Nadu Electricity Board Employee's Discipline and Appeal Regulations 9 clause (dd) and (e) - A thorough reading of the said regulations would clearly show that the rule empowers the appellants herein, at any time, to revoke the suspension order. But, the appellants, have failed to consider the request for reviewing the order of prolonged suspension in spite of his representations.
Thus, the learned single Judge has held that an employee cannot be kept under a prolonged suspension just because there is a criminal case pending against him and has categorically came to a conclusion that the subsistence allowance should not be paid to him without extracting any work from him - there are no error or defect in the order of the learned single Judge's observation that the appellants can consider posting the respondent herein/writ petitioner in a non-sensitive post and extract work from the petitioner rather than paying the subsistence allowance for no work.
Appeal dismissed.
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2021 (8) TMI 1383 - SC ORDER
Advance Authorization Scheme - export of items namely “Gold Medallions and Coins" or "Any Jewellery manufactured by fully mechanized process” - HELD THAT:- There are no reason to interfere in the matter. The Special Leave Petition is, accordingly, dismissed.
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2021 (8) TMI 1382 - SC ORDER
Rejection of claim of the petitioner under the Mukhyamantri Kisan Avam Sarvahit Bima on the ground that the claim is time barred - HELD THAT:- In compliance of this Court’s order dated 02.07.2021, the petitioner has paid the sum of Rs. 5 lakhs to the respondent no.1 and has filed proof of making such payment.
Issue notice, returnable in six weeks.
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2021 (8) TMI 1381 - SUPREME COURT
Validity of Status report filed by M/s Grant Thornton, who were appointed as Forensic Auditors - report indicates that the auditors were not provided complete access to all electronic records, including those which were in possession of the Chief Financial Officer, Unitech Limited. - HELD THAT:- The contents of the communication dated 16 August 2021 and the material which has come on the record indicate that, despite the orders of this Court, irregularities are taking place within the precincts of the Tihar Central Jail where the two accused have been lodged. These activities undermine the authority of the Court and will derail the investigation which has been ordered by the Directorate of Enforcement.
It is directed that both the accused, Sanjay Chandra and Ajay Chandra be shifted from Tihar Central Jail to the premises of Arthur Road Jail, Mumbai and Taloja Central Jail, Mumbai, respectively. The video conferencing facility at the Jails to which the accused are being transferred shall be made available so as to enable them to record their presence in the court proceedings where their presence is required.
Copies of the interim and final reports of M/s Grant Thornton, forensic auditors appointed by this Court shall be furnished to the Directorate of Enforcement. Copies of the reports shall be handed over in a sealed cover to Ms Shraddha Deshmukh, counsel assisting Ms Madhavi Divan for onward transmission to the Directorate of Enforcement - List the Special Leave Petition after six weeks, and a status report shall be filed by ED on the investigation.
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2021 (8) TMI 1380 - SC ORDER
Deemed dividend - Partnership firm - purchase of shares in the name of partners - HC [2011 (7) TMI 288 - DELHI HIGH COURT] held that appellant company being beneficial share holder hence loans accepted is added as deemed divided - HELD THAT:- Interlocutory Application is an application for withdrawal of the appeals in light of the Direct Tax Vivad se Vishwas Act, 2020. Application is allowed.
Consequently, Appeals stand dismissed as withdrawn.
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2021 (8) TMI 1379 - ITAT BANGALORE
Depreciation on computers disallowed u/s 40(a)(ia) - HELD THAT:- Issue decided in favour of assessee as relying on Tally Solutions Pvt. Ltd case [2020 (12) TMI 1160 - KARNATAKA HIGH COURT] Section 40(a)(i) and (ia) provides for disallowance only in respect of expenditure, which is revenue in nature, therefore, the provision does not apply to a case of the assessee whose claim is for depreciation, which is not in the nature of expenditure but an allowance. The depreciation is not an outgoing expenditure and therefore, provisions of section 40(a)(i) and (ia) are not applicable.
In the absence of any requirement of law for making deduction of tax out of expenditure, which has been capitalized and no amount was claimed as revenue expenditure, no disallowance under section 40(a)(i) and (ia) would be made.
Depreciation is a statutory deduction available to the assessee on a asset, which is wholly or partly owned by the assessee and used for business or profession. Depreciation is an allowance and not an expenditure, loss or trading liability. Commissioner (Appeals) has held that the payment has been made by the assessee for an outright purchase of Intellectual Property Rights and not towards royalty and therefore, the provision of section 40(a)(i) is not attracted in respect of a claim for depreciation. Decided in favour of the assessee.
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2021 (8) TMI 1378 - CALCUTTA HIGH COURT
Validity of impugned notice - respondents submits that due to mistake on the part of the assessing officer, the impugned notice dated November 12, 2020 has been issued - HELD THAT:- Considering the submissions of the parties and on perusal of the records, this writ petition is disposed of by quashing the impugned notice dated November 12, 2020 and the subsequent notice dated December 18, 2020 without calling for affidavits.
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