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Showing 41 to 60 of 84 Records
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1970 (9) TMI 79
Issues Involved:
1. Substitution of legal representatives in misfeasance proceedings under Section 543 of the Companies Act, 1956.
2. Applicability of Section 543 to legal representatives of deceased directors.
3. Limitation period for misfeasance proceedings.
4. Nature and scope of misfeasance under Section 543.
5. Applicability of Civil Procedure Code provisions to misfeasance proceedings.
Detailed Analysis:
1. Substitution of Legal Representatives in Misfeasance Proceedings:
The primary issue was whether the legal representatives of a deceased director could be substituted in ongoing misfeasance proceedings. The court held that the substitution was permissible. The judgment emphasized that the liquidator's right to proceed against the legal representatives survives, subject to the limitation that any order for repayment or restoration would be limited to the assets of the deceased delinquent officer.
2. Applicability of Section 543 to Legal Representatives:
The court examined whether Section 543 of the Companies Act, 1956, which deals with misfeasance proceedings, could be applied to the legal representatives of a deceased director. The court noted that Section 543 does not create a new right but provides a summary procedure for enforcing existing rights. It was held that the section deals with breaches of fiduciary duty, and the cause of action survives the death of the director. The court concluded that the legal representatives could be substituted in the proceedings.
3. Limitation Period for Misfeasance Proceedings:
The court addressed the issue of limitation, noting that the application under Section 543 must be made within five years from the date of the winding-up order, the first appointment of the liquidator, or the misapplication, retainer, misfeasance, or breach of trust, whichever is longer. In this case, the winding-up order was made on January 8, 1958, and the application was made on January 2, 1963, within the permissible period.
4. Nature and Scope of Misfeasance under Section 543:
The court elaborated on the nature of misfeasance, stating that it involves an act in the nature of a breach of trust that results in actual loss to the company. The court cited various authorities to support the view that misfeasance proceedings are aimed at restoring the company's lost assets due to the directors' breaches of fiduciary duty. The court emphasized that the section provides a summary mode of enforcing rights that could otherwise be enforced through ordinary legal proceedings.
5. Applicability of Civil Procedure Code Provisions to Misfeasance Proceedings:
The court discussed the applicability of certain provisions of the Civil Procedure Code (CPC) to misfeasance proceedings. It was noted that the provisions of Order 22, Rule 1 of the CPC, which state that the death of a plaintiff or defendant does not cause the suit to abate if the right to sue survives, should be applied to misfeasance proceedings under Section 543. The court referenced the Bombay High Court's decision in Vadilal Chatrabhuj Gandhi v. Thakorelal Chimanlal Munshaw, which held that misfeasance proceedings are similar to suits and fall within the scope of Section 141 of the CPC.
Conclusion:
The court ordered the substitution of the legal representatives of the deceased director in the ongoing misfeasance proceedings, limited to the assets of the deceased in their hands. The court also granted the official liquidator's application for other incidental and ancillary reliefs, with costs to be borne from the assets of the company in liquidation.
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1970 (9) TMI 70
Issues Involved:
1. Issue of fresh capital without permission.
2. Applicability of the Monopolies and Restrictive Trade Practices Act, 1969.
3. Compliance with sections 372, 395, 391 to 394, and 393(1) of the Companies Act, 1956.
4. Alleged abuse of process by the petitioner.
5. Interests of shareholders of the petitioner company.
6. Nature of the order dated 30th April, 1970.
7. Disclosure requirements under section 391(2) of the Companies Act.
Detailed Analysis:
1. Issue of Fresh Capital Without Permission:
The court acknowledged that the scheme envisages the issue of fresh capital by Kohinoor, which requires the consent of the Controller of Capital Issues under the Capital Issues (Control) Act, 1947. The court noted that the permission was not yet obtained but decided to sanction the scheme, leaving it to the petitioner to obtain the necessary permission, which was expected to be granted given the circumstances.
2. Applicability of the Monopolies and Restrictive Trade Practices Act, 1969:
The court examined whether the Monopolies and Restrictive Trade Practices Act, 1969, applied to Kohinoor. It found no evidence that Kohinoor's assets exceeded twenty crores of rupees or that it was interconnected with other undertakings to meet this threshold. Therefore, the Act did not apply, and the scheme could be sanctioned without contravening its provisions.
3. Compliance with Sections 372, 395, 391 to 394, and 393(1) of the Companies Act, 1956:
The court held that section 391 is a complete code in itself for schemes of compromise and arrangement. It rejected the contention that the scheme violated section 372, as the issue of shares by Kohinoor was not an investment of funds but an exchange of shares. The court also found that the scheme did not need to comply with section 395, as it was a valid scheme under section 391. The court confirmed that all statutory provisions, including section 393(1), were complied with.
4. Alleged Abuse of Process by the Petitioner:
The court dismissed the argument that Kohinoor's purchase of Navjivan shares shortly before proposing the scheme constituted an abuse of process. It found the purchase legitimate and aimed at rejuvenating Navjivan, which was in financial distress.
5. Interests of Shareholders of the Petitioner Company:
The court found no merit in the contention that the scheme ignored the interests of Kohinoor's shareholders. The scheme was approved by a significant majority of Kohinoor's shareholders, including major institutional investors like the Life Insurance Corporation and the Unit Trust of India, indicating that their interests were considered.
6. Nature of the Order Dated 30th April, 1970:
The court clarified that the order dated 30th April, 1970, was not interlocutory but a final order sanctioning the scheme. The reservation made for the Central Government's representation was only to consider further directions if necessary, not to reconsider the sanction itself.
7. Disclosure Requirements Under Section 391(2) of the Companies Act:
The court found that all necessary disclosures, including the latest financial position of Navjivan and the auditors' report, were made. The court rejected the contention that the petitioner failed to disclose the outcome of any investigation by the Central Government, noting that the Central Government itself would have the relevant information.
Conclusion:
The court confirmed its order dated 30th April, 1970, sanctioning the scheme of compromise and arrangement between Navjivan and its creditors and members, sponsored by Kohinoor. The scheme was found to be fair, reasonable, and in compliance with all statutory provisions. The court also provided directions for marginal adjustments due to the time elapsed and addressed the petitioner's concerns regarding potential appeals. Costs were awarded to the Central Government and other parties involved.
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1970 (9) TMI 62
Whether the court has only to consider the correctness of the view of the High Court refusing to grant the certificate?
Held that:- It would be a futile exercise if we come to the conclusion that the view taken by the High Court on the merits of the case is true, still to certify the case for appeal. The proposed appeal only involves the question about the maintainability of the execution proceeding commenced by the plaintiff and against the company in liquidation without leave of the High Court which has ordered the company to be wound up. We entertain no doubt that the High Court was right in the view it has taken on the merits and the contentions raised. We do not think that we will be justified in certifying an appeal in which the only question which may be urged is the one on which we have expressed our opinion against the appellant. The appeal fails and is dismissed
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1970 (9) TMI 61
Whether the exchange was entitled to retain the balance after satisfying the debts, liabilities and engagements of the appellant to the other members or to the exchange?
Held that:- If the company is permitted to retain the balance of the amount after satisfying the debts, liabilities and engagements of the shareholder, the transaction would not be different from one purchasing the share of the defaulting shareholder for a value equal to the amount of his obligations. That would be plainly illegal. We are, therefore, unable to agree with the High Court that the exchange was entitled to retain the balance after satisfying the debts, liabilities and engagements of the appellant to the other members or to the exchange.
The decree passed by the High Court is set aside and the case remanded to the High Court for determining the extent of the liabilities of the appellant to the exchange not only in respect of the transactions with Johurmull Daga but in respect of all other outstanding liabilities of the appellant to other members of the exchange and to the. exchange which are. enforceable under the articles. The appellant is entitled to receive from the exchange the balance remaining due after deducting the aggregate amount or value of the obligations. He will be entitled to interest on the balance at the rate of 6% per annum from the date of the institution of the suit. Parties will bear their own costs throughout.
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1970 (9) TMI 59
Issues Involved:
1. Liability of directors for malfeasance and misfeasance.
2. Assessment of damages.
3. Apportionment of liability among directors.
4. Evidence of company operations post-partition.
Detailed Analysis:
1. Liability of Directors for Malfeasance and Misfeasance:
The judgment addresses a petition filed under Sections 542 and 543 of the Companies Act, 1956, alleging malfeasance and misfeasance by three directors of the company. The directors, who were closely related, were found to have managed the company and its assets without proper accounting. The company judge fixed their liability at Rs. 26,600, with varying amounts for each director. The directors' plea that the vehicles were taken to Pakistan during communal disturbances was rejected due to lack of evidence.
2. Assessment of Damages:
The court assessed the damages using a "rule of thumb" due to the unavailability of company books. The vehicles, which were purchased from the U.P. Government and fitted with gas plants, were sold, and the proceeds were unaccounted for. The judge adopted a low measure of Rs. 500 to Rs. 1,000 per vehicle, considering them as junk, to assess the sale proceeds and profits. This approach was seen as lenient but necessary due to the lack of better data.
3. Apportionment of Liability Among Directors:
The judgment discusses the apportionment of liability among the three directors. The company judge made Mulkh Raj and Dewan Chand liable for Rs. 10,000 each and Gian Chand for Rs. 6,600. However, the court held that the directors were jointly and severally liable for the entire amount, as they acted in concert and were entrusted with the company's assets. The principle of joint and several liability was emphasized, drawing from the precedent in Peninsular Locomotive Co. Ltd. v. H. Langham Reed.
4. Evidence of Company Operations Post-Partition:
The directors claimed that the vehicles were taken to Pakistan, but the court found no evidence to support this. Evidence showed that taxes were paid on the company's vehicles for years after partition, and the vehicles were operational. The directors failed to produce evidence to account for the vehicles, leading the court to conclude that the company continued its operations post-partition.
Conclusion:
The court dismissed the appeal by the directors and partly allowed the cross-appeal by the official liquidator and judgment-creditor, making the directors jointly and severally liable for Rs. 26,600. The judgment emphasizes the directors' fiduciary duty and their failure to account for the company's assets, leading to their liability for damages.
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1970 (9) TMI 55
Whether the directors acted in the interest of the company?
Whether they acted on a wrong principle?
Whether they acted with an oblique motive or for a collateral purpose?
Held that:- The discretion of the directors is to be tested as the opinion of fair and sensible men in the interest of the company. In the present case, the directors did not act bona fide nor did they act in the general interest of the company. On the contrary, they acted upon a wrong principle and for the oblique motive of squeezing out Firodia. The in scapable conclusion is that the directors acted arbitrarily and unjustifiably.
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1970 (9) TMI 38
Issues Involved:
1. Applicability of Section 123 of the Customs Act in criminal trials.
2. Burden of proof under Section 123 of the Customs Act.
3. Legitimacy of the seizure of watches and the accused's connection to them.
4. Sufficiency of evidence to prove lawful importation of the seized watches.
Issue-wise Detailed Analysis:
1. Applicability of Section 123 of the Customs Act in criminal trials:
The first submission was that the Chief Presidency Magistrate erred in applying Section 123 of the Customs Act to a criminal trial. Section 123 shifts the burden of proof to the accused to show that seized goods are not smuggled. The court referenced the Sea Customs Act of 1878 and its amendments, including Section 178A, which similarly shifted the burden of proof. The court noted that the Supreme Court had recognized the applicability of Section 178A in criminal trials in multiple cases. The Customs Act of 1962, which replaced the Sea Customs Act, included Section 123, mirroring Section 178A. The court concluded that Section 123 is applicable in criminal trials and is not confined to adjudication proceedings, as it was intended to address the special difficulties in detecting customs offences.
2. Burden of proof under Section 123 of the Customs Act:
The court clarified that the burden on the accused under Section 123 is not as stringent as the burden on the prosecution in a criminal trial. The accused is required to prove their case by a preponderance of probability, similar to civil proceedings, rather than beyond a reasonable doubt. The court cited Supreme Court rulings that supported this interpretation, emphasizing that the accused's burden is to establish a probable explanation rather than an irrefutable one.
3. Legitimacy of the seizure of watches and the accused's connection to them:
The accused denied any connection with the seized watches, claiming they belonged to one Premabhai Chibabhai, who was allowed to store them in the flat. The court found that the Chief Presidency Magistrate had rightly rejected this defense, as the evidence did not support the accused's claim. The court noted that the watches were seized under a reasonable belief that they were smuggled, based on the circumstances of the seizure, including the lack of documentation and the manner in which the watches were stored.
4. Sufficiency of evidence to prove lawful importation of the seized watches:
The court examined the evidence related to the importation and transportation of the watches. The accused had produced various transport certificates and invoices to support the claim that the watches were lawfully imported. The court found that the Chief Presidency Magistrate had not fully considered the evidence and had equated the burden of proof on the accused with that of the prosecution. The court analyzed the specific categories of watches and concluded that the accused had sufficiently discharged the burden of proof for each category, showing that the watches were lawfully imported.
Conclusion:
The court allowed the appeal, setting aside the conviction and sentence of the accused. The court held that the accused had satisfactorily discharged the burden under Section 123 of the Customs Act, proving that the seized watches were lawfully imported. The accused was acquitted of the charges, and the bail bond was ordered to be canceled.
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1970 (9) TMI 37
Breach of the licence - Held that:- The view of the High Court does not seem to be sustainable on the statutory language and on the Import Control Policy of which the respondents were fully aware. Their own application is proof positive of their awareness of the true position and the breach of the conditions of the licence on their part was deliberate. Indeed, as observed earlier, the permission for the import of the second press was apparently sought with the object of its resale. Breach of conditions for import of goods is a serious matter because it prejudicially affects our country's national economy. The import licence for the second press having, in our view, been sought on false representation with the object and purpose of its resale the breach of the licence was, therefore, fully intended and designed. The respondents are guilty of malpractices and of abuse of the import licence with the object of making money. We, however, think that in view of the fact that this litigation has been pending since a long time it would meet the ends of justice if we impose merely fine and do not sentence anyone to imprisonment. The final result is that the order of the High Court is set aside and accused Nos. 1, 2, 3 and 5 are convicted under Section 120-B, I.P.C. and Section 5 of the Imports & Exports Act, 1947 read with Clause 5 of the Import Control Order 1955 and each of the accused Nos. 2, 3 and 5 are sentence to pay a fine of ₹ 2,000/- under each count. Accused No. 1 who is the principal culprit and who was sentenced by the trial court to imprisonment and fine is sentenced to pay a fine of ₹ 5,000/- under each count. In default of payment of fine the defaulting accused persons will undergo rigorous imprisonment for three months. The Company is convicted only under Section 5 of the Imports & Exports Act read with Clause 5 of the Import Control Order and sentenced to pay a fine of ₹ 2,000/-.
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1970 (9) TMI 36
Whether on the facts of this case the mare "Jury Maid" can be considered as a "pet animal" within the meaning of that expression in the notification issued by the Government of India, Ministry of Commerce and Industries, Import Trade Control Public Notice No. 1-I.T.C. (PN)/61, dated 2nd January, 1961?
Whether the expression "prohibition" contained in Section 111(d) of the Customs Act, 1962 (which will hereinafter be referred to as the Act) includes prohibition of imports coupled with a power to permit importation under certain conditions?
Held that:- There is no evidence to show that "Jury Maid" was tamed. That apart the "Jury Maid" was not fondled or treated with fondness by the appellant. He obtained that animal on lease for certain specified purpose. In respect of that animal he had only a business connection. We entirely agree with those observations and reject the contention of the appellant that "Jury Maid" was a pet animal.
What clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to "any prohibition imposed by any law for the time being in force in this country" is liable to be confiscated. "Any prohibition" referred to in that section applies to every type of "prohibition". That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression "any prohibition" in Section 111(d) of the Customs Act, 1962 includes restrictions. Merely because Section 3 of the Imports and Exports (Control) Act, 1947 uses three different expressions "prohibiting", "restricting" or "otherwise controlling," we cannot cut down the amplitude of the word "any prohibition" in Section 111(d) of the Act. "Any prohibition" means every prohibition. In other words all types of prohibitions. Restriction is one type of prohibition. From Item (I) of Schedule I, Part IV to Import Control Order, 1955, it is clear that import of living animals of all sorts is prohibited. But certain exceptions are provided for. But none the less the prohibition continues. Appeal dismissed.
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1970 (9) TMI 35
Issues:
1. Interpretation of Section 11 of the Central Excise Act regarding recovery of sums due to the Government.
2. Application of U.P. Zamindari Abolition and Land Reforms Act in relation to attachment and sale of properties.
Detailed Analysis:
1. Interpretation of Section 11 of the Central Excise Act:
The petitioner sought a mandamus to prevent the sale of properties other than excisable goods and to sell detained goods first. The court examined the provisions of Section 11 of the Central Excise Act, emphasizing that the officer empowered to recover dues has discretion in choosing the method of recovery. The court held that the officer may deduct the amount from money owed by the person or recover it by attaching and selling excisable goods. The court ruled that if the goods are not saleable, the officer can opt for other methods of recovery. The court concluded that the discretionary use of methods under Section 11 does not warrant interference in writ jurisdiction.
2. Application of U.P. Zamindari Abolition and Land Reforms Act:
The petitioner argued that the Collector could not attach and sell properties as per Annexure R.1 since the Land Revenue Act provisions were deleted by the U.P. Zamindari Abolition and Land Reforms Act. The court clarified that the U.P. Act only applies in specific areas, and in areas where it does not apply, the Land Revenue Act provisions remain valid. The court examined the location of the properties mentioned in Annexure R.1 and determined that they were in an area not covered by the U.P. Act. Therefore, the court held that the Collector had not erred in issuing the attachment and sale order for the properties listed in Annexure R.1.
Conclusion:
The court dismissed the writ petition, stating that the grounds raised by the petitioner lacked merit. The court upheld the discretionary powers of the officer under Section 11 of the Central Excise Act and clarified the application of the U.P. Zamindari Abolition and Land Reforms Act in property attachment cases. The judgment emphasized the discretionary nature of recovery methods and the specific application of laws based on geographical areas.
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1970 (9) TMI 34
Validity of a warrant issued by Assistant Collector, Central Excise, Allahabad, authorising the Superintendent, Central Excise, Varanasi to enter certain premises, search the same and seize the documents therefrom challenged
Held that:- In the notifications which were issued applying, inter alia, Section 105(1) and Section 110 of the Customs Act, 1962 no such changes have been made as can possibly fall within the meaning of the word "alterations".Objection was taken only with regard to the word "alterations" but that word must be understood in the sense in which it was open to the legislature to employ it legitimately and in a constitutional manner. No question is thus involved of delegation, either of any essential legislative functions or any change of legislative policy.
It is unnecessary to mention the other provisions because a comparison of the recognised formulae with the text of Section 12 of the Act shows that the provisions of the Sea Customs Act, 1878 were not meant to be incorporated in the Act and were only to be applicable to the extent notified by the Central Government for the purpose of the duty leviable under Section 3. It was in these circumstances that it was held that section 129 of the Sea Customs Act, 1878 could not be made applicable so as to whittle down the substantive right of appeal conferred by Section 35 of the Act. The previous notification under the Sea Customs Act, 1878 stood superseded and no question survives with regard to the validity of the notification issued in 1963 and amended in 1965. Appeal dismissed.
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1970 (9) TMI 33
Whether seniority list must be quashed?
Held that:- The High Court was right in observing that the proviso was intended to neutralise the effect of the minimum service rule in determining seniority in the grade of Assistant Commissioners. Rule (iii) is not intended, contrary to all notions of justice and fair-play, to confer upon an officer, who was junior in the list of Income-tax Officers and who could not be considered for promotion on an earlier occasion, a right to be placed in the list of Assistant Commissioners above an officer senior to him in the list of Income-tax Officers and who was promoted before him.
If respondents Nos. 6 to 34 had been considered and selected for promotion when Nadkarni and Karnik were promoted after their officiation period was over, they could not have been placed in the list of Assistant Commissioners above Nadkarni and Karnik. The circumstance that respondents Nos. 6 to 34 were not considered because they had not completed the specified minimum period of gazetted service and were considered and promoted later did not, when they were promoted, confer upon them the privilege of being placed in the list of Assistant Commissioners above Nadkarni and Karnik. We, accordingly, agree with the High Court that the seniority list must be quashed. Appeal dismissed.
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1970 (9) TMI 32
Issues Involved:
1. Validity of the Commissioner's jurisdiction under section 33B of the Indian Income-tax Act, 1922, after its repeal.
2. Validity and propriety of the orders passed by the Commissioner for the assessment years 1956-57 to 1961-62 under section 33B.
Issue-wise Detailed Analysis:
1. Validity of the Commissioner's Jurisdiction Post-Repeal of the Indian Income-tax Act, 1922:
The primary question was whether the Commissioner of Income-tax could validly exercise jurisdiction under section 33B of the Indian Income-tax Act, 1922, after its repeal on April 1, 1962. The court referred to its previous judgment in Income-tax Reference No. 100 of 1967 (Smt. Aparna Roy v. Commissioner of Income-tax (Cal)), where it had answered this question in the affirmative. The court reiterated that the reasons for this conclusion were detailed in that judgment and should be referred to for a comprehensive understanding.
2. Validity and Propriety of the Orders Passed by the Commissioner:
The second issue was whether the orders for the assessment years 1956-57 to 1961-62 passed by the Commissioner under section 33B were valid and proper. The court examined the argument presented by Dr. Pal for the assessee, who contended that the order was illegal under section 5(7C) of the Indian Income-tax Act, 1922. The argument was based on the fact that the show-cause notice was issued by one Commissioner (Mr. Vallibhoy) and the order was passed by another Commissioner (Mr. Palekar) after the former ceased to have jurisdiction.
Facts and Arguments:
- The show-cause notice under section 33B was issued on August 8, 1963, by Mr. Vallibhoy.
- The assessee replied on August 29, 1963, without providing the necessary evidence.
- Mr. Vallibhoy was succeeded by Mr. Palekar, who assumed charge on September 2, 1963, and passed the order on September 3, 1963.
- The assessee requested a short adjournment for three days but did not appear on the hearing date (September 3, 1963).
Legal Provisions and Interpretation:
- Section 5(7C) of the Indian Income-tax Act, 1922, allows a succeeding authority to continue proceedings from the stage left by the predecessor, provided the assessee does not demand reopening or rehearing.
- The court noted that the assessee did not demand reopening or rehearing before the proceedings were continued by Mr. Palekar.
- The court emphasized that the primary mandate of section 5(7C) permits the succeeding authority to carry on the proceedings unless the assessee demands otherwise.
Case Law and Precedents:
- The court referred to several cases, including Calcutta Tanneries (1944) Ltd. v. Commissioner of Income-tax [1960] 40 ITR 178 (Cal), where it was held that the assessee loses the right to reopen proceedings if not demanded under section 5(7C).
- The court also cited decisions from the Punjab and Haryana High Court, Mysore High Court, and Rajasthan High Court, which supported the view that the succeeding officer could continue the proceedings without a fresh hearing if the assessee did not demand it.
Conclusion:
- The court concluded that the order under section 33B by Mr. Palekar was valid, legal, and proper.
- The court answered both questions in the affirmative and in favor of the revenue.
- The costs were to be paid by the assessee.
Final Judgment:
Both questions were answered in the affirmative, upholding the validity of the Commissioner's jurisdiction and the propriety of the orders passed under section 33B. The court emphasized that the assessee's failure to demand reopening or rehearing under section 5(7C) meant that the succeeding authority's actions were legitimate. The costs were awarded against the assessee.
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1970 (9) TMI 31
Assessee is a company manufacturing, among other things, medicines. Before May, 1959, the assessee used also to manufacture serum. The assessee appears to have suffered loss of income from the production of serum for a considerable number of years as a result of which the assessee finally decided to stop the manufacture of serum with effect from May, 1959. As a consequence of this stoppage certain animals which were kept by the assessee for the manufacture of serum became actually useless to it for its business. The assessee, therefore, sold away these animals. By reason of this sale the company suffered a loss - company claimed deduction of the said sum u/s 10(2)(viii) of the Indian Income-tax Act, 1922 – it could not be said that the animals had become useless on the closure of the assessee's business before the assessee was entitled to deduction of loss
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1970 (9) TMI 30
Whether, the penalty imposed on the assessee under section 27 1 (1)(a) for the assessment years 1960-61 and 1961-62 is liable to be cancelled - no force in the contention that the registration certificate being issued only on March 26, 1962, the assessee had an obligation to file a return under section 22(1). As we pointed out earlier, the certificate will have effect for the year of assessment and must therefore apply not only in regard to the assessment proceedings but in regard to the proceedings relating to the filing of the return - We, therefore, answer the question referred to us in the affirmative, that is, in favour of the assessee and against the department
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1970 (9) TMI 29
Issues: Lack of opportunity to be heard during revision by the Commissioner of Income-tax.
The judgment by the High Court of Orissa addressed the issue of natural justice and the right to be heard during a revision by the Commissioner of Income-tax. The court noted that despite written submissions being entertained, it was crucial for the party to have an opportunity for oral arguments. The judges emphasized that oral arguments allow for an interchange of thoughts between the judge and the advocate, which is essential for a fair decision-making process. The court highlighted that written submissions cannot replace oral arguments, especially in administrative tribunals functioning similarly to judicial officers in open court. The judges referred to a Supreme Court decision in Dwarka Nath v. Income-tax Officer, which established the principle that oral arguments are integral to the principles of natural justice, even in cases where the revision is filed by the party. The court cited its own previous decisions to support this position.
The High Court concluded that the Commissioner of Income-tax should have set a date for a hearing to allow the party to present their case through a counsel. Since this opportunity was not provided in the case at hand, the court quashed the impugned order and remanded the case to the Income-tax Commissioner for proper disposal of the revision application in accordance with the law and the observations made in the judgment. The writ application was allowed, and no costs were awarded in the circumstances. Judge B. C. Das concurred with the decision.
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1970 (9) TMI 28
Issues:
Recovery of income-tax dues under the Orissa Public Demands Recovery Act, 1963 (1963 Act) despite the existence of the Income-tax Act, 1961 (1961 Act).
Analysis:
The petitioner, a partner in a registered firm, challenged the initiation of recovery proceedings under the 1963 Act by the Certificate Officer, arguing that the tax dues should be recovered following the procedure outlined in the 1961 Act. The petitioner contended that the specific modes of recovery provided in the 1961 Act exclude the applicability of the 1963 Act for income-tax recovery. The court examined the provisions of the 1961 Act, particularly Section 222, which sets out the procedure for recovery of tax dues. It noted that the 1961 Act provides a comprehensive mechanism for recovery, including appointing a receiver for managing the assessee's properties. The court highlighted that the absence of a similar provision in the 1963 Act creates a potential for discrimination if two different modes of recovery are allowed.
The court emphasized that when a statute specifies a particular mode of recovery for a certain demand, that mode must be exclusively followed for recovery. In this case, the court found that the procedure prescribed in the Second Schedule of the 1961 Act should have been followed by the Certificate Officer, who was also recognized as the Tax Recovery Officer. The court concluded that the petitioner's contention regarding the correct procedure for recovery under the 1961 Act was valid. Consequently, the court allowed the writ application, quashed the proceedings initiated under the 1963 Act, and directed the Certificate Officer to proceed in accordance with the recovery procedure outlined in the Second Schedule of the 1961 Act. The judgment was delivered unanimously by the judges, with Justice Das concurring with the Chief Justice's decision.
In summary, the judgment clarifies that the specific modes of recovery provided in the 1961 Act for income-tax dues exclude the applicability of the 1963 Act. The court's decision underscores the importance of adhering to the prescribed procedure for recovery as outlined in the relevant statute to prevent any potential discrimination in the recovery process.
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1970 (9) TMI 27
Business of deep sea fishing with the help of trawlers and selling the same - proper construction of the expression "any profits and gains derived from a ship" occurring in section 80J of the Income-tax Act, 1961 - applicability provisions of section 80J(1) of the profits and gains from fishing using ships
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1970 (9) TMI 26
Opportunity of being heard to assessee before commissioner - no material considered without assessee's knowledge - held that tribunal was justified in maintaining the order of the CIT under section 33B of the Indian Income-tax Act, 1922, setting aside the assessments and directing the Income-tax Officer to make fresh assessments
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1970 (9) TMI 25
Application by the CIT for grant of a certificate, u/s 66A(2) of the Indian Income-tax Act of fitness of the case for an appeal to the Supreme Court - plea of private importance is open to an assessee whose private interest are affected and not to the department - leave to appeal to SC not granted
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9911796707
