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2021 (7) TMI 1331
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- In the case in hand, the demand notice was duly delivered prior to the notification dated 24.03.2020.
When all the above provisions under Sections 7, 8, 9 & 10 of IBC are read together, it is observed that, the word ‘default’ is common to all and the right to file an application under any of these Sections 7, 9, 8 or 10 of IBC accrues only when the default has occurred. And in addition to that an application under Section 9 can only be filed, if demand notice is delivered under Section 8 of IBC, 2016, and 10 days’ time is given to the Corporate Debtor to bring to the notice of the operational creditor the existence of dispute, if any - therefore, even if the default has occurred, an application under Section 9 of IBC can only be filed, if an opportunity is given to the Corporate Debtor to file the reply to the demand notice issued - Under such circumstances, a situation may arise, when a person has delivered the demand notice prior to the issuance of notification dated 24.03.2020 but the reply to the demand notice was filed after the issuance of said notification but within ten days from the delivery of the demand notice, as it has happened, in the case in hand.
Whether by issuance of said notification dated 24.03.2020 under proviso to Section 4 of IBC, can a right, which has already accrued to a person, can be taken away by that notification, which is admittedly issued thereafter? - HELD THAT:- Every notification has prospective effect and so far as the filing of application either under Section 7 or 9 or 10 is concerned, it can only be filed, if the default in making payment has occurred, except in the matter of Section 9 of IBC, where Demand Notice is to be delivered after the default.
Under the IBC, a right to apply accrues when default has occurred. Therefore, the application under Section 7 or 9 of IBC can be filed within three years from the date when right accrues, i.e. when the default has occurred. If the statute provides a person to file an application within a prescribed period, when the right accrues, then by exercising delegated powers, an executive can not take away that right and it is also not the intention of the executive - No doubt, it is a well settled principle of law that once a right is vested, it cannot be divested.
Thus, once the default has occurred prior to the issuance of notification dated 24.03.2020 and demand notice was also sent/ delivered prior to that notification, the enhancement of the threshold limit from one lakh to one crore rupees is not applicable in such matters.
When the default has occurred prior to the notification and demand notice was not sent prior to that notification in that case, whether the present notification dated 24.03.2020 is applicable or not? - HELD THAT:- An application under Section 7, 9 or 10 IBC can only be filed, when the default has occurred. Therefore, the intention of the legislature is to give right to an aggrieved person under Section 7, 9 or 10 IBC, only when a default has occurred in making the payment of the dues - Once the default has occurred prior to the issuance of the said notification dated 24.03.2020 then that right cannot be taken away by issuance of that notification.
Even in the matter, in which the default has occurred prior to the issuance of said notification dated 24.03.2020 and no demand notice (as in the case of Section 9) was delivered prior to that notification, in that case too, the said notification is not applicable. rather, the minimum threshold in that case, as per Section 4 of IBC, 2016, is one lakh rupees and not one crore rupees - the notification is applicable only in respect of the default which has occurred on or after 24.03.2020 and not prior to that.
Thus, in the present case, it is noticed that the demand notice was delivered prior to the issuance of the notification dated 24.03.2020. Hence, the said notification dated 24.03.2020 is not applicable in the case of the petitioner.
List the matter for hearing on other issues on 09.08.2021.
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2021 (7) TMI 1330
Maintainability of application - HELD THAT:- In the course of hearing, it is noticed that some CAs are listed for hearing today but it is also noticed that the main Company Petition is of the year 2016. Therefore, instead of taking up the CAs, it is deemed proper to take up the main Petition along with these CAs.
Both the parties are directed to share the soft copy of these documents with the Registry and upload the soft copy on the DMS within two weeks from today. List the matter on 8th September, 2021.
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2021 (7) TMI 1329
Principles of natural justice - applicant submits that though reply from the first respondent has been received but the reply of second respondent has not been served on her till date - HELD THAT:- Since the same is available in the Registry of Chandigarh Bench filed vide Diary No.00019/12 dated 22.02.2021, learned Senior Counsel for the applicant in the CA is permitted to collect a copy of the same from Registry - List IA No.368/2020 on 30.09.2021.
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2021 (7) TMI 1328
Maintainability of application - time limitation - present Application claimed to be filed on 11th March, 2021 i.e. more than two months after the rejection of the claim by the RP - HELD THAT:- There was no need for the CEO of the Company to travel to Kolkata for filing this Application. Even now, the Application has been affirmed at Chennai only. So, this explanation does not hold water.
In any case, the Resolution Plan has been approved by the CoC on 5th June, 2021 and at this late stage, allowing the claim of the Applicant, will not only cause grave prejudice to the completion of the CIRP, it will also be unfair to other similarly situated Creditors, who could not have filed their claim before the date fixed for this purpose.
This is not a fit case for exercising of discretion for condonation of the delay in filing of the claim with the RP - Application dismissed.
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2021 (7) TMI 1327
Failure to provide necessary internet services to all the residents in the area - HELD THAT:- It is prima facie apparent that the applicant had breached the terms of the agreement by not providing internet services to all the residents as agreed by him. In view of the same, the application filed by the applicant i.e Radius Infratel Pvt. Ltd. is dismissed and the respondents are at liberty to provide necessary services through some other agency.
Application stands dismissed.
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2021 (7) TMI 1326
Employee’s contribution to PF and employees contribution to ESI on account of delay in deposit as per concerned statutes - HELD THAT:- As relying on PRO INTERACTIVE SERVICE (INDIA) PVT. LTD. [2018 (9) TMI 2009 - DELHI HIGH COURT] in view of the judgement of the Division Bench of Delhi High Court in Commissioner of Income-Tax versus Aimil Limited, [2009 (12) TMI 38 - DELHI HIGH COURT] the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal.
The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act.- Decided in favour of assessee.
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2021 (7) TMI 1325
Exemption u/s 11 - delay in filing Form No.10 - HELD THAT:- This writ petition is disposed of by granting liberty to the petitioner to file an application before the CBDT under Section 119(2)(b) of the Income Tax Act making prayer for authorising the concerned officers to consider for exemption by condoning the delay in filing Form No.10 for the relevant assessment year. If such application is filed by the petitioner within three weeks from date, the CBDT will consider and dispose of such application within four weeks from the date of receipt of such application in accordance with law with intimation to the petitioner.
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2021 (7) TMI 1324
Revision u/s 263 - only grievance of the appellant/assessee is that the Pr. CIT has wrongly exercised the jurisdiction u/s 263 of the Act directed the AO to pass the assessment order afresh - HELD THAT:- Under section 263 of the Act, the CIT has jurisdiction to call for and examine the record of any proceeding under the Act and if he considers that any order passed by the AO is erroneous in so far as it is prejudicial to the interest of the revenue, to pass order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment after affording an opportunity of being heard to the assessee. So, as per the settled law, in order to exercise jurisdiction u/s 263 of the Act, the CIT has to be satisfied of twin conditions that the order sought to be revised is erroneous and that the order is prejudicial to the interest of the revenue.
In the case of CIT vs. Indo German Fabs [2015 (1) TMI 437 - PUNJAB & HARYANA HIGH COURT] has inter alia held that under section 263 the CIT has power to examine an assessment order to ascertain as to whether it is erroneous and prejudicial to the interest of the revenue, but does not confer jurisdiction to substitute his opinion for the opinion of the AO.
Therefore, u/s 263 of the Act CIT has power to revised only those orders which are erroneous and prejudicial to the interest of the revenue. In the present case, the Ld. CIT has revised the assessment order on the ground that the AO has not taken any adverse view in respect of the payment made to the retiring partner, without pointing out as to how the assessment order is erroneous.
In the case of CIT vs. Krishna Capbox (P) Ltd [2015 (3) TMI 17 - ALLAHABAD HIGH COURT] has held that where the assessing officer passes assessment order after raising queries from the assessee, mere non discussion or non-mention thereof in assessment order could not lead to the assumption that the AO did not apply his mind. Invoking of revisional jurisdictional on the said ground was held unjustified.
We hold that the impugned order is not in consonance with the law laid down by the Hon’ble Courts discussed above. Since the AO had passed the assessment order after making proper enquiry, the Ld. CIT has wrongly exercised the jurisdiction u/s 263 - Appeal of assessee allowed.
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2021 (7) TMI 1323
Validity of reopening of assessment - whether notice under Section 148 could be issued in the name of a deceased? - HELD THAT:- It is a settled principle of law that reopening notice issued in the name of a deceased person is not tenable in the eye of law. Neither the reopening notice under Section 148 issued to a dead person could be continued against legal representatives. Reliance is placed on the judgment passed by the Hon’ble Jurisdictional High Court in the case of Urmilaben Anirudhsinhji Jadeja [2019 (9) TMI 356 - GUJARAT HIGH COURT], MARUTI SUZUKI INDIA LIMITED [2019 (7) TMI 1449 - SUPREME COURT] AND CHANDRESHBHAI JAYANTIBHAI PATEL [2019 (1) TMI 353 - GUJARAT HIGH COURT]
Thus we find no merit in the initiation of the proceeding against the person who died more than three years prior to the date of issuance of notice under Section 148 - Decided in favour of assessee.
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2021 (7) TMI 1322
Seeking release of attached bank account of petitioner - parties jointly submit that after the filing of the present petition, the bank account stands defreezed and, therefore, the grievance of the petitioner stands satisfied - HELD THAT:- The petition is disposed of as having been rendered infructuous.
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2021 (7) TMI 1321
Seeking release of provisionally attached Bank Accounts of petitioner - petitioners had submitted that the petitioners were ready and willing to secure the amount as presently available in these attached accounts - HELD THAT:- Once the stated amount is secured by way of an FDR, the banks will permit the petitioners to operate these accounts, in the normal course of business.
The petition is disposed off.
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2021 (7) TMI 1320
Stay of demand - relief sought to direct the first respondent to entertain the petitioners' appeals on merits without insisting for any pre-deposit amount at the rate of 20% of the demand - HELD THAT:- Under Section 246A of the Income Tax Act, 1961 no such pre-deposit for preferring an appeal is contemplated. Thus, the petitioners are not liable to pay any pre-deposit for the purpose of considering the appeals. If at all the appeals are in order and in accordance with the other procedures contemplated, the said appeals are to be taken on file and to be disposed of on merits and in accordance with law and by affording opportunity to the petitioners as expeditiously as possible. Thus, the petitioners are not liable to make any pre-deposit in view of Section 246A of the Act. It is made clear that if any stay petitions are filed along with the appeals, the said petitions are also to be considered before passing final orders in the main appeals in accordance with law.
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2021 (7) TMI 1319
Validity of Revision of Assessment - input tax credit - opportunity of hearing was not provided to the writ petitioner - violation of principles of natural justice - HELD THAT:- This Court is of the considered opinion that the opportunity, if not provided, certainly a good ground for interference. However, the Appellate Authority is conferred with powers to annul or enhance or reduce or to remand the matter back to the Original Authority for fresh consideration. The proceedings of an appeal is the continuation of original proceedings and opportunity denied may be provided by the appellate authority and such an opportunity is to be availed by the Assessee for the purpose of defending their case. The very legislative intention for providing an appeal is to ensure that the procedural lapses, if any, would be considered and, if at all, the petitioner has no such opportunity, is to be provided to the satisfaction of the appeal in the Appellate Authority and even at that point of time, the assessee is at liberty to avail opportunity and submit their complete defense in order to establish their case.
The powers conferred to the appellate authority to reduce, enhance, annul the assessment or to remand the matter back was taken care of the entire grounds raised by the petitioner, including the ground of violation of principles of natural justice, as it is contended that no opportunity was provided. Thus, entertaining a writ petition and setting aside the assessment as prayed for by the petitioner, deserves no merit consideration by this Court under Article 226 of the Constitution of India. The writ petitioner has to prefer an appeal as contemplated under the Act and Statutes.
Petition disposed off.
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2021 (7) TMI 1318
Application for early hearing of the appeals - HELD THAT:- In view of the reasons as mentioned in the Miscellaneous Applications, the prayer for early hearing of the appeals is allowed.
The appeals to be listed in the next sitting of the Division Bench.
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2021 (7) TMI 1317
Injunction from continuing with the competitive business of the Respondent Company - injunction from approaching the customers and suppliers of the Respondent Company for soliciting business of the Respondent Company - restraint from acting detrimental to the interest of the Respondent Company - HELD THAT:- It is noted that the said interim relief as prayed for is same as final relief and imprudent to consider without full perspective of the case. In view of the allegations and cross allegations, besides apparent noncooperation, it is in the interest of the company and the parties that this matter be heard and decided. This is particularly important in view of the fact that admittedly there was a settlement between the parties in August 2020 which seems to have derailed. In subsequent listing of the case, we have directed the parties to file the replies in both CPs as well as in pending CAs and also to furnish written arguments so that the matter can be heard and disposed of accordingly.
The matter stands admitted.
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2021 (7) TMI 1316
Approval of Resolution Plan - Section 31(1) of I&B Code - direction to Resolution Professional to continue to conduct his hold as Resolution Professional of the Corporate Debtor - implementation of Resolution Plan in the manner set out in the resolution plan - approval of appointment of Monitoring Agent (MA) and Monitoring Committee (MC) from the date of approval of resolution plan - valuation of the assets in relation to the Corporate Debtor - HELD THAT:- From reading of the extracted minutes from the 2nd CoC meeting would reveal the fact that the appointment of the Valuers in relation to the Corporate Debtor was deliberated in the meeting of the CoC and that the name proposed by the IRP was accepted by the CoC and accordingly the valuation was done by those valuers - it is seen from the minutes of the 7th CoC meeting that the third valuer Mr. Vaidya Raman was appointed by the Resolution Professional who visited the premises and conducted the valuation to the non-core assets.
In the present case, it is seen from the minutes extracted from the 6th CoC meeting that RP further apprised the CoC members, that due to significant difference in the value of land and building submitted by the valuers appointed by IRP, the RP had to appoint third valuer in accordance with provisions of Regulation 35 of CIRP Regulations, 2016. Accordingly, the third valuer has submitted his report before the RP and accordingly the fair value and the Liquidation value in relation to the Corporate Debtor was arrived at by the Resolution Professional - it is clear that the RP has arrived at a Fair Value and the Liquidation Value based on the average of all the three valuers and the same has been done in accordance with Regulation 35 of the IBBI (IRPCP) Regulations 2016. Further, the valuation certificate dated September 2019 relied on by the promoter/suspended Director of the Corporate Debtor would be of no relevance as the same was not done in accordance with the Regulations framed under the IBC, 2016.
This Adjudicating Authority finds that there was no error committed by the IRP/RP in so far as appointing the registered valuers in relation to the Corporate Debtor, nor there was any error on the valuation being submitted by those Registered valuers and as a consequence thereof, the objections as raised by all the objectors in relation to the valuation of the Corporate Debtor are overruled - application dismissed.
Non-consideration of Section 12A Application - HELD THAT:- A perusal of the minutes would show that the promoter of the Corporate Debtor has proposed for a 12A settlement only at the 9th CoC meeting, when the Resolution Plan of the Resolution Applicant was about to be put to vote. Further, it is also seen that the Petitioning Creditor viz. Tourism Finance Corporation of India (TFCI) was also kept in dark about the 12A proposal by the promoters and also flagged an issue stating that the letter has been addressed to the CoC and not to them. However, it is seen that the said agenda of proposal to be made under Section 12A was not considered by the CoC and that they proceeded to vote for the Resolution Plan - it is seen that the proposal as projected by the Learned Senior Counsel for the promoters to be made under Section 12A, seems to be only an eye wash and a dilatory tactics to delay the process of CIRP in relation to the Corporate Debtor and that the fact that the proposal has been mooted only during the eleventh hour is to stall the Resolution Plan as moved by the Resolution Applicant - the allegations of the promoters that their Section 12A Application was not considered by the RP and the CoC do not hold any merits and stands overruled.
Procedural Irregularities - HELD THAT:- It is significant to note here that, a statutory provision regulating a matter of practice or procedure will generally be read as directory and not mandatory. Thus, even though the objectors to the Resolution Plan have alleged many procedural irregularities in relation to the conduct of the proceedings in relation to the CoC; however those objectors have miserably failed to establish as to what prejudice has been caused to them in respect of the same. Further, a person who has been inducted as a member of the CoC in its 6th meeting cannot be allowed to question the actions taken by the CoC in the past meetings - the objections as raised by the objectors in relation to the procedural irregularities in relation to the conduct of the Corporate Insolvency Resolution Process, are not so grave in order to defeat the Resolution Plan as filed by the Resolution Professional - Application dismissed.
Related Party - HELD THAT:- This Tribunal is of the considered view that the Applicants are related party in respect of the Corporate Debtor and that the decision of the IRP/RP in categorizing the Applicant viz. M/s. Dharani Finance Limited as "Related Party" of Corporate Debtor is free from all legal infirmities and does not warrant any interference by this Adjudicating Authority. Accordingly, application stands dismissed.
Discrimination in the Resolution Plan - HELD THAT:- The contentions of the Learned Senior Counsel for the objectors that differential treatment are being made to them since they are related party in respect of the Corporate Debtor do not hold any merit in view of the discussions made supra and also the decisions referred in support of the same. Hence the objections raised by the objectors in relation to the said issues are overruled.
Pending Avoidance Application - HELD THAT:- In the present case, a provision is made in the Resolution Plan as to the fate of the avoidance Application pending in relation to the Corporate Debtor and hence the objections raised by the objectors in this regard are required to be eschewed.
Objections by Prospective Resolution Applicant - HELD THAT:- It is evident that M/s. Apex Laboratories Private Limited, is not even an unsuccessful Resolution Applicant but only an intended prospective resolution applicant, who has failed to submit the Resolution Plan within the timelines fixed by the CoC and M/s. Apex Laboratories Private Limited has no vested right that his resolution plan ought to have been considered by the CoC and no challenge can be preferred thereof before this Adjudicating Authority. Hence, in view of the discussions made supra, the objections raised by the Applicant are overruled and as a consequence, application stands dismissed.
Approval of Resolution Plan - HELD THAT:- From the catena of judgments rendered by the Supreme Court on the scope of approval of the Resolution Plan, it is amply made clear that only limited judicial review is available for the Adjudicating Authority under Section 30(2) and Section 31 of IBC, 2016 and this Adjudicating Authority cannot venture into the commercial aspects of the decisions taken by the Committee of Creditors.
The Resolution Plan is hereby approved and is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the "Moratorium" imposed under section 14 of IBC, 2016 shall not have any effect henceforth - Application allowed.
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2021 (7) TMI 1315
Unexplained investment in purchase of the land - Penalty u/s 271(1)(c) - HELD THAT:- Special Leave Petition is dismissed on the ground of delay.
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2021 (7) TMI 1314
Completion of the proceedings - HELD THAT:- The parties are directed to complete the pleadings and file their written submissions not exceeding five pages each within six weeks.
List the matter before the Court on 22nd November, 2021. Interim orders to continue.
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2021 (7) TMI 1313
Seeking grant of bail - availment of wrongful ITC - transfer of fake ITC Bills - dispute is from November 2017 to March 2019 - HELD THAT:- From the investigation done by the Department, it is evident that there was no movement of goods done by the petitioner and fake invoices were generated in order to avail the ITC and in order to pass on the ITC to various entities, the fake bills which were generated by the petitioner is to the tune of ₹ 44 Cr.
The bail application need not be interfered - bail application dismissed.
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2021 (7) TMI 1312
Extension of time for payment of the last installment of Tax under Income Disclosure Scheme, 2016 (IDS) - two instalments were paid by the appellant but there was default in respect of the third instalment - HELD THAT:- The request of the petitioner seeking extension of time to pay the third instalment and continue to avail the benefit under said Scheme was rejected by the High Court.
As petitioner submits that the limited relief that the petitioner seeks is with respect to adjustment of the amounts deposited towards first two instalments so that in the tax liability computed by the Department after revised assessment, appropriate relief can be afforded to the petitioner.
Issue notice limited to the aforesaid question, returnable on 27.08.2021.
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9911796707
