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Showing 41 to 60 of 16398 Records
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2023 (12) TMI 1264
Validity of reopening of assessment - Period of limitation - procedure u/s 148A - HELD THAT:- In the present case, it is stated that a copy of the notice was sent thorough e-mail on 01.04.2021. Merely because the notice was made ready on 31.03.2021, it cannot be construed that the said notice was issued on 31.03.2021 itself. But the date of dispatch and the notice was issued by e-mail as well as by post is only on 01.04.2021. However, without considering these facts, the AO passed the Assessment Order on 23.03.2022.
Therefore, based upon the notice issued u/s 148 on 31.03.2021, the impugned assessment order came to be passed by the respondents, which, in the opinion of this Court it was passed without any authority and the same is barred by limitation and hence the same is liable to be set aside. However, considering the submissions made on behalf of the respondents and in the interest of revenue, without directing the respondents to venture upon issuing fresh notices u/s 148A, in the interest of revenue, this Court feels that the impugned notice under Section 148 of the Act issued to the petitioner, shall be deemed to have been issued u/s 148A of the Act as amended by Finance Act, 2021 and in the light of the law laid down in the case of Union of India and Others Vs. Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT]
Accordingly, while setting aside the impugned assessment order, this Court directs the Assessment Officer to provide necessary documents to the petitioner within 30 days from the date of request made by him so that he can file his reply within two weeks from the date of receipt of the relevant documents.
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2023 (12) TMI 1263
Power of CIT(A) to dismiss the appeal in limine ex-parte - violation of principles of natural justice, on the alleged ground that the appellant was not inclined to prosecute the appeal - TP adjustment - difference in arm's length price of the international transaction of availing testing services entered into by the appellant with the associated enterprises - CIT (A) noted that despite notices, nobody has attended, so he summarily referred to the TPO’s order and dismissed the assessee’s appeal - assessee submitted that assessee has sought adjournment before ld. CIT (A) who has ignored the same and passed the order dismissing the assessee’s appeal for non-prosecution.
HELD THAT:- Upon careful consideration, we find that section 251 does not give any power to the ld. CIT (A) dismissing the appeal for non-prosecution. Hence, in the interest of justice, we remit the issue to the file of ld. CIT (A). Ld. CIT(A) shall pass a speaking order on merits after giving the assessee adequate opportunity of being heard.
Appeal of the assessee is allowed for statistical purposes.
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2023 (12) TMI 1262
Revision u/s 263 by CIT - failure of the AO to send the case to the TPO - assessee’s claim was that there was Specified Domestic Transactions and the payments were made covered u/s 40(A)(2)(b) and for which both the parties are paying similar rate of taxation and no Revenue has been affected - HELD THAT:- We are of the considered view that Instruction No.3/2016 dated 10.03.2016 of CBDT providing for guidelines/implementation of transfer pricing provisions specifically provides that if a case is selected for scrutiny on the basis of transfer pricing risk parameters in respect of International Transactions or Specified Domestic Transactions or both the case has to be referred to TPO by the AO after obtaining the approval of the jurisdictional PCIT or CIT. The failure of Ld. AO to comply with these directions in relevant AY 2014-15 and following them in next AY 2015-16 makes it apparent that Ld. AO has not followed directions of Circular this years without mentioning any reasons for not referring the matter to TPO and that makes the order erroneous and prejudicial to the interest of Revenue irrespective of the fact that the transaction may have resulted into no loss to Revenue for the reason that both the parties were paying tax at similar rate as that is not a justification in TP issue examination by TPO.
For remaining grounds for finding the assessment order to be erroneous and prejudicial to the interest of Revenue, we find that assessee had made submissions to Ld. PCIT that the issue was examined by the Ld. AO by raising queries to which assessee had responded by letters dated 29.04.2016, 11.07.2016, 11.08.2016 and 17.08.2016.
The order of Ld. PCIT makes it apparent that he has taken note of these submissions of the assessee as made before Ld. AO and as available on the assessment record, but found that enquiry was not detailed without indicating by his own efforts as to where Ld. AO failed to follow the mandate of the Act in accepting the pleas. No separate and reasoning of his own are stated to establish his findings that how the submissions were not otherwise sustainable under the law to hold that assessment order was erroneous and prejudicial to the interest of Revenue.
Thus, we are not inclined to interfere in the order of Ld. PCIT with regard to directions of AO to refer the matter to TPO but on other counts the order is not sustainable. Appeal of assessee is allowed partly.
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2023 (12) TMI 1261
Capital gain - Joint Development agreement (JDA) - Transfer / sale of land u/s 2(47)(v) or not? - AO on the basis of said joint development agreement computed the short-term capital gain by taking the value as per stamp valuation authority as deemed sale consideration - HELD THAT:- Mere execution of joint development agreement with the builder would not result in any transfer of land by the assessee as contemplated by the provisions of section 2(47)(v) of the Act as the assessee has not allowed the possession of the plot to be taken away by the builder in part performance of a contract . It is just an agreement for carrying out construction on the plot after obtaining requisite permissions from the Government authorities and then after completion of the project, certain area has to be allotted to the assessee.
We find merit in the contention of assessee that the said execution of land development agreement cannot be a sale of land in favour of the builder within the meaning of section 2(47)(v) as only construction was allowed to be done by the builders after obtaining necessary approvals from competent authorities and, therefore, the capital gain has wrongly been computed and charged to tax.
No construction has been carried out on the said land due to legal hurdles. Capital gain cannot be assessed on the basis of joint development agreement executed by the assessee during the year as no possession was given to the builder in part performance of the contract but it is only permission to carry out construction on the plot. Considering all appeal of assessee allowed.
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2023 (12) TMI 1260
Reopening of assessment u/s 147 - bogus LTCG - reopening was done on the basis of information received from the Investigation Wing that the assessee has earned long-term capital gain from transfer of shares of Quest Financial Service Limited, which is a penny stock company and the said gain has been claimed as exempt u/s 10(38) - HELD THAT:- The reasons were recorded without application of mind and in a very casual and mechanical manner.
AO in the first second para stated that the assessee has taken bogus long-term capital gain through penny stocks. Besides we also note that the ld. AO has stated sometimes in the said reasons recorded “his/her”. We find merit in the contentions of the A.R. that the reasons have to be read as they are recorded and there has to be an independent application of mind by the AO and a objective satisfaction has to be recorded whereas the AO acted on the borrowed satisfaction which is a clear-cut non-application of mind by the AO.
The case of the assessee finds support from the decision of Hindustan Lever Limited –vs.- R.B. Wadkar, Asst. CIT [2004 (2) TMI 41 - BOMBAY HIGH COURT] wherein it has been held that the reasons have to be read as they are recorded and it cannot be substituted. The Hon’ble Court has held that there has to be satisfaction of AO for reopening of the assessment and reopening cannot be made for borrowed satisfaction in a mechanical manner.
Thus we quash the reopening of assessment and direct the ld. AO to delete the addition. The appeal of the assessee is allowed on legal issue.
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2023 (12) TMI 1259
Exemption u/s 11 - charitable activities u/s 2(15) - Accumulation of income - CIT(A) has treated activities of meetings, conferences and seminars of the assessee not for charitable purpose and thus denying exemption u/s 11 of the Act in respect of entire receipts of the assessee - HELD THAT:- We note that during the instant assessment year, the receipt form business activities of the assessee from the activities of holdings and organizing meetings, seminars and conferences and the profit as computed by the AO constituted only 2% of such receipts.
Therefore we are inclined to hold that the consideration charged by the ICC is just a cost basis and nominally above the cost. However if we allocate the administrative expenses on a rational and scientific basis between the activities of holding meetings, seminars and conferences on the one hand and other charitable receipts such as interest, rental and misc. income on the other , then there would be huge loss from these activities of organizing and holding meetings, seminars and meetings meaning thereby that the assessee has not been even charging from these sponsors, participants, members or non-members which are barely enough to cover the cost of the ICC and therefore it can be reasonable presumed that ICC has provided these activities even below the cost.
We are inclined to hold that the ICC is not carrying on any activity of holding meetings, seminars and conferences for business purpose but only in support its main object and it charges from its participants, members and non-members the amount of fee which does not even covers the cost of holding such events. So much so that the administrative and other incidental expenses of holding and organizing such seminars, conferences and meetings are met out of other charitable income received form interest on FDRs, rental and miscellaneous income.
Therefore in view of that the ICC is entitled to exemption u/s 11 of the Act as the activities of the advancement of main object is not hit by the proviso to Section 2(15) of the Act even post amendments.
Accumulation of income and investment - Provisions of 11(1) provides for accumulation of income of the trust to the extent of 15% of the gross receipts in perpetuity. The institution can retain 15% from the application of income without applying for charitable purpose in which accrued meaning thereby that 15% is indefinite accumulation and the assessee is not obliged to apply the same in subsequent years and can be retained as part of the corpus of the body.
AO has accepted which the same. But the institution has to comply with the requirements of section 11(5)(iii) of the Act. The ICC has fully complied with the provisions of section 11(5)(iii) of the Act and kept the funds invested in terms of the said section. So the ld CIT(A) has erred in treating the same as taxable income. But in any case we have allowed the main contentions of the ICC by allowing exemption u/s 11 of the Act on the entire receipts of the ICC.
We set aside the order of ld CIT(A) and direct the AO to allow exemption u/s 11 of the Act in respect of entire receipts/income. Consequently ,the grounds of assessee allowed.
Depreciation claim of assessee trust - HELD THAT:- The assessee’s case is squarely covered by the decision of Rajashthan and Gujrati Charitable Foundation [2017 (12) TMI 1067 - SUPREME COURT] in the context of amendment in Section 11(6) of the Act by the Finance (NO.2) Act 2014 w.e.f 01.04.2015 wherein it has been held that up to AY 2015-16 the assessee is entitled to claim the cost of acquisition of fixed asset as application of income and further depreciation thereon in subsequent years. We set aside the order of Ld. CIT(A) and direct the AO to allow the depreciation on fixed asset as application of income/expenses.
Addition treating the sale value of motor car as income - cost of car has been treated allowed as application of income when the car was purchased - HELD THAT:- We find that up to AY 2015-16 even if fixed asset purchased by the assessee was claimed as application of income while computing the income, even then it is presumed that WDV is there in the books of account. We have even perused the provisions of Section 11(1)(a) of the Act which provide that if the sale consideration received on sale of assets is utilized for acquiring another asset then the same is treated as having applied for the charitable purposes.
The case of the assessee also find support from the decision of Rajashthan and Gujrati Charitable Foundation [2017 (12) TMI 1067 - SUPREME COURT] wherein it was held that besides claiming the full deduction of cost of fixed asset in the year and the assessee would be entitled to depreciation thereon. By considering the ratio laid down in the said decision, we are of the view that even if the entire cost has been claimed as application of income even then the assessee is entitled to claim the deduction of WDV from the sales consideration in order to calculate the capital gain. Accordingly we set aside the order of Ld. CIT(A) on this issue and direct the AO to delete the addition.
Deduction u/s 11(1)(a) @ 15% on the net income and not on the gross receipt of the ICC - HELD THAT:- We find that accumulation u/s 11 is to be computed on the gross receipts and not the net receipts. The issue settled by the Hon’ble Surpeme Court in the case of ACIT vs. A.L.N. Rao Charitable Trust [1995 (10) TMI 2 - SUPREME COURT] wherein it has been held that statutory accumulation u/s 11(1)(a) has to be computed on the gross receipts of the assessee - Thus we are inclined to direct the AO to allow the accumulation u/s 11(1)(a) of the Act on the gross receipt of the assessee and not on the net receipt. Accordingly ground raised by the assessee is allowed.
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2023 (12) TMI 1258
Revision u/s 263 - as per CIT AO has not conducted due inquiry on the issue of applicability of provisions of section 115BBE in respect of surrendered income on account of excess stock found during the survey - HELD THAT:- AO has issued a limited query to verify the quantum of surrendered income declared during the proceedings u/s 133A and in reply also the assessee has given details of the total amount of income declared by the assessee. As it is apparent and manifest from the show cause notice issued u/s 142(1) as well as reply filed by the assessee that the AO has not taken up the issue of higher rate of tax u/s 115BBE of the Act while passing the assessment order. The assessment order is completely silent about any such query raised or inquiry undertaken by the AO.
During the course of survey proceedings the assessee in the statement has surrendered this amount on account of excess stock and also promise to pay the due tax as per provisions of Income Tax Act. The Authorised Officer of survey though calculated the tax liability on the surrendered amount at normal rate of tax however, if the said calculation is not in accordance with the provisions of the Income Tax Act the same would not be binding on the decision of the AO while passing the assessment order.
The surrendered income on account of excess stock was declared by the assessee under the head ‘other sources’ and the same was assessed by the AO as income from other sources. There is no quarrel on the point that if the AO has raised the query on this issue of applicability of provision of section 115BBE which was replied by the assessee then question of lack of inquiry does not arise. However, in the case of the assessee the AO has not even taken up this issue despite the income was assessed as income from other sources and therefore, this case does fall in the category of complete lack of inquiry on the part of the AO.
Pr. CIT has referred and relied upon various decisions including the decision of the jurisdictional High Court in case of CIT vs. Deepak Garg [2007 (5) TMI 186 - MADHYA PRADESH HIGH COURT] Accordingly in the facts and circumstances of the case we do not find any error or illegality in the impugned order of the Pr. CIT setting aside the order of the AO on the issue of applicability of the provisions of section 115BBE as there is a complete lack of inquiry on the part of the AO on this issue. The decisions relied upon by the Ld.AR of the assessee will not help the case of the assessee when there is a complete lack of inquiry on the part of the AO. The AO shall consider and decide this issue in accordance with provisions of section 115BBE of the Act after considering relevant facts and in accordance with law. We have not expressed any view on the merits of the issue.Appeal of the assessee is dismissed.
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2023 (12) TMI 1257
Validity of reopening of assessment - addition u/s 69A - mandation of disposing objections of assessee - assessee has demanded during the assessment proceedings, by way of a letter stating that he was filing Income Tax Return regularly and therefore reopening of his case under section 147/148 of the Act, is not valid - HELD THAT:- Assessee had objected reopening of assessment u/s 147/148 of the Act. Therefore, it was the duty of the Assessing Officer to dispose of the objections raised by the assessee in respect of reopening of his case u/s 147/148 of the Act. However, I note that Assessing Officer did not dispose of the objection raised by the assessee, by way of passing speaking order, in writing and therefore re-assessment proceedings should be quashed on this count only.
Assessee had objected reopening of assessment u/s 147/148 of the Act. Therefore, it was the duty of the Assessing Officer to dispose of the objections raised by the assessee in respect of reopening of his case u/s 147/148 of the Act. However, we note that Assessing Officer did not dispose of the objection raised by the assessee, by way of passing speaking order, in writing and therefore re-assessment proceedings should be quashed on this count only.
Reasons were recorded by the Assessing Officer in an arbitrary manner and there is no application of mind by the AO. For example, the reasons stated that assessee has deposited an amount in his bank account to the tune of Rs. 14,55,300/-, whereas the actual amount deposited in the bank account by the assessee was to the tune of Rs. 21,54,800/- hence reasons were recorded on arbitrary basis and there is no application of mind by the AO.
Therefore, respectfully following the binding precedent of Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd [2002 (11) TMI 7 - SUPREME COURT] quash the reassessment proceedings. Decided in favour of assessee.
Addition u/s 69A - as per AO considering the smallness of the amount of cash deposit a suitable addition, say, @ 5% of the total cash deposit in the bank account of assessee may be sustained in the hands of assessee - HELD THAT:- Admittedly, AO during the assessment proceedings made addition on account of cash deposited aggregating to Rs. 2,64,500/-, as well as amount deposited by cheques is to the tune of Rs. 4,20,355/-. The amount deposited by way of cheques in the bank account is out of known sources, hence addition should not be made in the hands of the assessee, hence addition to the tune of Rs. 4,20,355/- is hereby deleted.
Cash deposit it would be in the interest of justice that only profit eliminate @ 5% should be considered on total cash deposits of Rs. 2,64,500/-. Therefore, the Assessing Officer is directed to consider net profit @ 5% of total cash deposits. Accordingly, the addition is restricted in the hands of the assessee to the tune of Rs. 13,225/-. This assessee`s appeal is therefore, partly allowed in above terms.
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2023 (12) TMI 1256
Direction for investigation into the affairs of the company - reference the matter of SFIO on the request of the official liquidator - Application filed by an Ex-Director of the Company in liquidation to recall the order passed by this Court - Money Laundering - diversion of funds - HELD THAT:- It is not denied by the Official Liquidator that it has a panel of Chartered Accountants through whom the inspection and inquiries may be ordered. The sole purpose for which the Official Liquidator has sought for referring the matter to the SFIO was for detection of diversion of assets/funds of the company in liquidation. It is not denied by the Official Liquidator that the balance sheet, other books of account and documents are in possession of the official liquidator as well as the statement of affairs filed by the ex-Director on behalf of the company in liquidation.
Learned counsel for the applicant is right in saying that there was no material in the Official Liquidator’s report to demonstrate that there was any intention of the Ex-Director to defraud the creditors, members or any other person or that the management of the company was guilty of fraud and misfeasance or other misconduct towards the company or towards any of its members and, therefore, referring the matter to the SFIO is uncalled for.
As a matter of fact, the allegation against the company in liquidation by the Official Liquidator regarding a web of intrigue employed by the company and other groups of companies for defrauding the investors and creditors and diversion of funds of the company, could have been substantiated by the specific references to the entries made in the balance sheet and other books of account of the company in liquidation, which has not been done. To insinuate that the office of the Official Liquidator does not have the capacity or ability to detect diversion of funds of the company in liquidation, is not acceptable given the fact that a panel of Chartered Accounts is admittedly available to assist the Official Liquidator in discharge of its duties.
The provisions of the Act, 1956 and the Act, 2013 though, do not prohibit investigation to be initiated where the company has passed a special resolution for voluntary winding up or where other proceeding for winding of a company are pending before the Tribunal, however, the same may not applicable in the case of the company in liquidation, inasmuch as the winding up order of the company in liquidation was passed by the Court much prior to the report of the Official Liquidator filed before this Court seeking investigation by the SFIO.
It is not the case of the Official Liquidator that the powers conferred on it by virtue of the aforesaid provisions are inadequate for purpose of detection of the irregularities like the allegation of diversion of funds, etc. that caused it to move this Court for referring the matter to the SFIO. It should not appear to the Court that the Official Liquidator seeks referral of the matter to the SFIO for the reason that it finds itself inadequate to exercise the powers conferred on the Official Liquidator by the aforesaid sections of the Act.
The order dated 13.12.2019 is recalled and the Recall Application No.235 of 2020 is hereby allowed.
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2023 (12) TMI 1255
Qualification of Resolution Applicant - Promotor of the company - Application for Resolution Plan dismissed on the ground that the promoters could not have presented the plan - ineligibility to continue as a Resolution Professional - ineligibility to be considered as Board is liquidator of the corporate debtor - whether the appellant had erred in putting up a plan that was not in consonance with law for consideration of the adjudicating authority?
HELD THAT:- As per the factual scenario on record, there is no per say disqualification under Section 29A - it is pointed out that the plea based on Section 240A needs the opinion of this Court as there are a number of such cases arising and the orders earlier passed are being followed.
The common submission thus, is that while interpreting Section 240A, the reason for carving out an exception in micro, small and medium industries is set out on the date of application for making the bid as the crucial date. The submission is that while for some other aspects the initiation of the CIRP proceedings would be the cut off date, the same would not apply in the case of Section 240A, in view of the statement by the Minister themselves while introducing the amendment Bill.
The statement of the Minister is looked into for purposes of a cut off date that “there is no other specific provision providing for cut off date” which submits that it should be the date of application of making a bid. Thus, to opine that it is the initiation of the CIRP proceedings which is the relevant date, cannot be said to reflect the correct legal view and thus, it is constrained to observe that the law laid down in DIGAMBAR ANANDRAO PINGLE VERSUS SHRIKANT MADANLAL ZAWAR, SHRIKANT MADANLAL ZAWAR, VANDANA GARG LIQUIDATOR M/S PINGLE BUILDERS PVT. LTD., STATE BANK OF INDIA, VIJAYA BANK, M/S SOORAJMULL BAIJNATH PVT. LTD. [2021 (7) TMI 456 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] case by the Tribunal is not the correct position in law and the cut off date will be the date of submission of resolution plan - Thus, even on this count, the plan submitted in question will not incur the disqualification.
The petition before the Adjudicating Authority would stand restored to National Company Law Tribunal for reconsideration
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2023 (12) TMI 1254
Penalty u/s 271D and 271E - period of Limitation u/s. 275(1)(c) - HELD THAT:- The relevant date, is neither the date of assessment order, as contended by the appellant in Grihalakshmi Visions [2015 (8) TMI 1214 - KERALA HIGH COURT] or the date of initiation of penalty proceedings by issue of notice under section 274 – which though can only be by a competent authority, as contended by the Revenue in that case.
But the date on which action for imposition of penalty stands initiated. This action is to be understood as the date on which reference is made to the competent authority for initiation of penalty proceedings. In the instant case/s, this is on 01.01.2008, vide letter issued. The limitation period would thus be up to 31.07.2008, being the later of 31.3.2008 and 31.7.2008. The penalty orders are thus not barred by time, i.e., going by the assessee’s own case as made out, and we admit with merit.
Further, it is nobody’s case, nor could possibly be, that reference to the Jt. CIT by the AO on 01.01.2008, being after the completion of the assessment proceedings on passing the assessment order and issue of demand notice on 13/12/2017, is not valid in law inasmuch as it was after 13.12.2017.
In a given case, the Joint/Addl. CIT may himself be the AO, in which case he, noticing and recording violation of sections 269SS/T, may, accordingly, propose to initiate penalty, in which case that would be the relevant proceedings. Why, in a given case, penalty proceedings may be initiated at the instance of the first appellate authority. The date of assessment order may thus not be relevant. Shri Raghunathan would before us seek to bolster his case by arguing that the Jt. CIT may well ‘sleep’ over the matter, issuing notice u/s. 274, in an extreme case, after years, indefinitely postponing the proceedings, and, which cannot be the intent of the Legislature.
While this may be a possibility, even if remote, we do not think it necessary to, given the clear language of the provision, seek to decipher or probe the rationale behind prescribing the time of ‘action for initiation of penalty’ in its wisdom by the Legislature as against that of ‘initiation of penalty’, which could well have been so stated had that been the legislative intent. The words ‘action for imposition of penalty has been/is initiated’, in s. 275(1)(c), could only be on the reference to the competent authority in the matter, i.e., proposing initiation of penalty u/s. 271D/E of the Act, in collateral proceedings. The ‘sleep over’ would, rather, defeat the levy of penalty inasmuch as action for the imposition of penalty precedes the date of its initiation.he assessee, for the reasons afore-stated, fails in it’s challenge on limitation. We decide accordingly.
Reasonable cause’ u/s. 273B - We have given our careful consideration to the matter, which may have implications beyond the instant case, the financial impact of which, at an aggregate of Rs. 231.24 cr., also emphasised by Shri Raghunath, is not insubstantial. The default being admitted, reference to the enhanced limit of Rs. 2 lakhs, up from Rs. 20,000, in sections 269SS/T, for a PACS, w.e.f. the previous year commencing 01.04.2023, as pointed out by Shri Das, so made, as explained by him, with a view to provide relief to the low income groups in rural areas and facilitate easier conditions of business operations in such areas, may not add any further strength to the Revenue’s case; the burden to prove reasonable cause being in any case on the assessee.
In our view, looking at the entirety of the facts and circumstances, the assessee deserves to succeed in the conspectus of it’s case.
Assessee is involved in both, i.e., borrowing, through acceptance of deposits, as well as lending, with the only difference that the members of the public are entitled to deposit their monies as well as borrow monies on becoming nominal members by paying a nominal sum upon filling an application form, permitted by it’s governing Act and bye-laws. It is this that led to the denial of deduction u/s. 80P in assessment.
The assessee-society, though registered as a PACS under the Kerala Act, is legally dealing with members and non-members, i.e., public at large, without restriction as to area, i.e., at par with a commercial or cooperative bank, excluded from the ambit of ss. 269SS/T. In our view there is thus a reasonable cause for the assessee, who has a past history of operating in such a manner, being so for over three decades post 30.06.1984, i.e., since when sections 269SS/T of the Act are on the statute, for having violated the said provisions, and is thus not liable to penalty under sections 271D/E of the Act in terms of s. 273B. We may also clarify; the same having also been duly considered and factored into our decision, that no doubt at any stage, including before us, has been expressed by the Revenue as regards the maintenance of proper records, including qua KYC, by the assessee. This is as, where so, this would have warranted remanding the matter back to identify such suspected cases inasmuch as there could be a transgression of the provisions of the PMLA, with the assessee using it’s status, reach and clout as a bank to deal in illicit money or otherwise with customers without proper antecedents. Appeal of assessee allowed.
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2023 (12) TMI 1253
Assessment u/s 153A - Unexplained share capital - Addition u/s 68 - incriminating material found during search or not? - HELD THAT:- The entire issue stands settled by the judgment of M/s. Abhisar Buildwell P. Ltd. [2023 (4) TMI 1056 - SUPREME COURT] wherein held that in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Hence, respectfully following the judgment of Hon’ble Apex Court, we hold that no addition can be made in the case of the assessee sans seized material u/s 153A.
Hence, keeping in view, the pertinent facts of the case, we affirm the order of the ld. CIT(A) to the extent of non- availability of relevant seized material which could have lead to the addition by the AO, hence, the appeal of the revenue stands dismissed.
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2023 (12) TMI 1252
Refund of SAD - SAD had been paid, not in cash, but by utilising the DEPB scrip - HELD THAT:- The said issue came up before the Hon’ble Delhi High Court in the case of ALLEN DIESELS INDIA PVT. LTD. VERSUS UNION OF INDIA & ORS. [2016 (2) TMI 247 - DELHI HIGH COURT], wherein it was held that Although it is sought to be projected that the circulars which are subject matter of the challenge in the present petitions were issued to streamline the procedure and to remove ambiguities, in fact what the circulars seek to amend is Notification No. 102/2007-Customs itself by introducing an additional condition for being entitled to refund, which condition does not find place in Notification No. 102/2007-Customs.
As the issue is no more res-integra in view of the judicial pronouncement of the Hon’ble High Court and the Tribunal and the ld. Commissioner (Appeals) has followed the same - there are no infirmity in the impugned order and the same is upheld.
The appeal filed by the Revenue is dismissed.
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2023 (12) TMI 1251
Interim measure to deposit an amount of Rs. 3.22 crores with the Registrar of Company, Delhi towards fees for delay in filing Form SH-7 - HELD THAT:- This amount has not been deposited. The petitioner has also not taken out any application seeking condonation of delay in making such deposit or permitting him to deposit in instalments.
A petition under Article 136 of the Constitution of India has a discretionary element for this Court to consider. Because of the petitioner’s conduct, we do not think such discretion ought to be exercised in favour of the petitioner. Otherwise also, we are also not satisfied with the petitioner’s case on merit.
Petition dismissed.
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2023 (12) TMI 1250
Professional misconduct - Auditor's conflict of interest with the auditee company - Acting as statutory auditor of SKNL while holding or controlling shares of SKNL in violation of section 141 of the Companies Act 2013 & section 226(3)(e) of the Companies Act 1956 resulting in failure to maintain independence of auditor - Non-compliance with para 7 to 9 of Standard on Auditing (SA) 705 - penalties and sanctions - HELD THAT:- It is clear that CA Shyam Malpani had violated the Companies Act 1956, the Companies Act 2013, SQC1, SA 220 and SA 705 by performing this audit despite having serious conflict of interest and in not giving appropriate audit opinions. It is therefore concluded that CA Shyam Malpani has committed Professional Misconduct as defined under Section 132 (4) of the Companies Act 2013 in terms of section 22 of the Chartered Accountants Act 1949 (CA Act). As per the clause 7 of Part I of the Second Schedule of the CA Act, an EP is guilty of professional misconduct if he "did not exercise due diligence and was grossly negligent in the conduct of his professional duties" - Since the EP compromised his independence and failed to recognize and report the pervasiveness of the deficiencies of the financial statements, his conduct undoubtedly falls into the category of lack of due diligence and gross negligence. Therefore, the charge of professional misconduct on the part of the EP on this account is proved.
Internationally also, similar cases of Auditor's conflict of interest with the auditee company has been viewed seriously.
In this case the audit done by the EP related to SKNL which was a large public listed company and involved interest of large number of shareholders and other stake holders such as banks, creditors etc. It is critical that the auditor and the EP performed their job with due diligence to give assurance to the investors and stakeholders on true and fairness of the financial statements and thereby protect public interest. Any default on this account impacts and jeopardizes the larger public interest which needs to be considered while determining the quantum of punishment.
Considering the nature and seriousness of violations and principles of proportionality, in the exercise of powers under Section 132 (4) (c) of the Companies Act, 2013, the sanctions ordered - a monetary penalty of Rupees Five Lakh imposed upon CA Shyam Malpani. In addition, CA Shyam Malpani is debarred for a period of Five years from being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate.
Application disposed off.
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2023 (12) TMI 1249
Condonation of delay in filing an appeal before NCLAT - whether the appeal was instituted within limitation? - Maintainability of application under Section 7 of the IBC - HELD THAT:- On the facts of the case, the Court noted that the appeal was barred by limitation as the appellant did not even attempt to secure a certified copy and only relied on the date of uploading the order on the website. Significantly, in the case, there was a pronouncement on the date mentioned on the order and the appellant did not dispute his presence before the NCLT when the order was pronounced in open court.
The date on which the limitation begins to run is intrinsically linked to the date of pronouncement. The question that arises in the facts of the present case, therefore, is when is an order deemed to be pronounced. The National Company Law Tribunal Rules, 2016 [NCLT Rules] provide guidance in this regard. Rule 89(1) of the NCLT Rules indicates that when NCLAT registry publishes its cause list, a distinction is drawn between cases listed for pronouncement of orders and other cases.
In the present case, the cause list for 17 May 2023 placed on record by the appellant indicates that the case was listed for admission and not for pronouncement. Further, on a specific query of the Court, it is not in dispute between counsel for the appellant and the respondent, that no substantive order was passed on 17 May 2023 by the NCLT. In these circumstances, limitation would not begin to run on 17 May 2023 which was the date on which hearings concluded. As no order was passed before 30 May 2023, there was no occasion for the appellant to lodge an application for a certified copy on 17 May 2023. Time for filing an appeal would commence only when the order appealed from was uploaded since prior to that date no order was pronounced.
The period of limitation began to run on 30 May 2023. The 30- day limitation period provided in Section 61(2) of the IBC concluded on 29 June 2023. Though the appeal was filed beyond the period of thirty days, it was within the condonable period of fifteen days - the appeal should be restored to the NCLAT for reconsidering whether the appellant has shown sufficient cause for condoning the delay beyond thirty days.
Appeal disposed off.
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2023 (12) TMI 1248
Maintainability of section 9 application - HELD THAT:- The present appeal is dismissed - It is clarified that the impugned judgment and the dismissal of the present appeal will not be construed as an expression of opinion on whether the petition under Section 9 of the IBC is within time.
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2023 (12) TMI 1247
Submission of claim before COC - HELD THAT:- The pleas and contentions of Kamal Kant Dewan and Bharat Food and Agro Products, as well as the contentions of White Water Hospitality Private Limited, will be examined by the adjudicating authority.
The impugned judgment set aside - appeal allowed.
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2023 (12) TMI 1246
Dismissal of Section 9 application - pre-existing dispute - HELD THAT:- The email sent by the Corporate Debtor indicate the entire issue raised between the parties, where the Corporate Debtor denied any outstanding amount. Further, the receipt which was claimed by the Corporate Debtor was the receipt of the diamonds received on behalf of the Appellant, which were all before the date when Demand Notice was issued. This indicate that at the time when Demand Notice was issued, there were dispute between the parties.
The Adjudicating Authority has rightly rejected the Section 9 application there being a pre-existing dispute - Appeal dismissed.
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2023 (12) TMI 1245
Seeking condonation of delay of 15 days in filing of the appeal - existence of sufficient reasons for delay or not - HELD THAT:- In the present case, the appeal has been filed on the last date i.e. 15th day i.e. 45th day. The reason given in para 3 of the application for condonation of delay appears to be a halfhearted attempt on the part of the Appellant for condonation the delay of 15 days because it is mentioned therein that the appellant took time for procuring relevant documents and as such the counsel for the Appellant could not receive instructions on time. However, in the additional affidavit, the Appellant has mentioned that it had to obtain several documents which could not be procured in time. However, it is not denied that the appeal was filed on 17.04.2023 and then an application was filed on 08.11.2023 for placing on record the additional documents.
The Hon’ble Supreme Court in the case of National Spot Exchange Limited Vs. Anil Kohli [2021 (9) TMI 1156 - SUPREME COURT] held that the delay beyond the period of 15 days cannot be condoned by the Tribunal and even under Article 142 of the Constitution of India which makes the provision very stringent and lays responsibility on the Appellant to be vigilant enough to file the appeal within the prescribed period. In view of the aforesaid facts and circumstances, there are no merit in the application and the same is hereby dismissed - The application for seeking condonation of delay in re-filing has become infructuous and the same is hereby dismissed.
Condonation of delay of 15 days in filing the appeal and for condonation of delay of 162 in refiling the appeal - HELD THAT:- In the present case, the appeal has been filed on the last date i.e. 15th day i.e. 45th day. The reason given in para 3 of the application for condonation of delay appears to be a halfhearted attempt on the part of the Appellant for condonation the delay of 15 days because it is mentioned therein that the appellant took time for procuring relevant documents and as such the counsel for the Appellant could not receive instructions on time - the Hon’ble Supreme Court in the case of National Spot Exchange Limited Vs. Anil Kohli, [2021 (9) TMI 1156 - SUPREME COURT] held that the delay beyond the period of 15 days cannot be condoned by the Tribunal and even under Article 142 of the Constitution of India which makes the provision very stringent and lays responsibility on the Appellant to be vigilant enough to file the appeal within the prescribed period - there are no merit in the application and the same is hereby dismissed.
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