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Showing 161 to 180 of 1464 Records
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2021 (10) TMI 1305
Seeking grant of regular bail - passing of fraudulent ITC to buyers by way of creating a chain of bogus firms without physical receipt and supply of goods - certain firms which are operating only on paper - offence u/s 132(1)(b) and 132(1)(c)of Central Goods and Services Tax Act and Gujarat Goods and Services Tax Act, 2017 - HELD THAT:- The search was ordered to be conducted at the premises of M/s. Ronak Traders but the unit could not be located and again on 26/02/2021, search was conducted at the premises of M/s Ronak Traders and it was found that the unit is non-existing and it only exists on papers and there was no ITC in their GSTR-2A return which indicates that they had no inward supply and all the payment of GST had been made through ITC only, and accordingly panchnama dtd. 26/02/2021 was drawn and M/s. Ronak Traders passed on entire ITC of ₹ 10.36 crore to another firm namely M/s. S. K. Traders by showing entire supply to them. Therefore, search was conducted on 11/02/2021 at M/s. S. K. Traders premises also and the same was also found to be non-existing and panchnama dtd. 11/02/2021 was drawn.
It is also the case of the prosecution that during the search the assessee was unable to produce any stock register / purchase invoices regarding said stock which is mandatory u/s 35 of CGST Act, 2017. Further, it appears from the affidavit of the prosecution that the investigation is still going on, hence, in these circumstances, it is not deemed fit to exercise discretionary power in favour of the present applicant-accused at this stage therefore following order is passed.
The present application is hereby rejected.
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2021 (10) TMI 1304
Consent order passed by the learned Single Judge - WP call for the records pertaining to the impugned second notice - HELD THAT:- When the Writ Petition came up for hearing before the learned Single Judge, the petitioner's counsel submitted that all the contentions of the petitioner may be left open and that the petitioner has already given her reply to the second respondent for the notices issued to her. The learned Single Judge directed the second respondent to give an opportunity of personal hearing to the appellant and thereafter pass orders in accordance with law. The learned Single Judge also made it clear that all the contentions of the writ petitioner are left open.
Since the appellant/writ petitioner has filed the Writ Appeal as against the consent order passed by the learned Single Judge, the same cannot be entertained by this Court.
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2021 (10) TMI 1303
Validity of Proceedings under Section 142(1) - Scope of Income Tax Settlement Commission as discontinued - HELD THAT:- Income Tax Settlement Commission, which was discontinued in view of the amendment under Section 245 B as stipulated under the Finance Act, 2021 leading to setting up of the Interim Board of Settlement by way of Notification No.91 of 2021 on 10.08.2021 for the purpose of settlement of the cases which were pending before the Income Tax Settlement Commission as on 01.02.2021, when the Income Tax Settlement Commission ceased to operate.
The grievance on the part of the petitioner is with regard to the action of the respondent authority of initiating the proceedings under Section 142(1) of the IT Act. A show cause notice dated 15.09.2021 issued under Section 142(1) of the IT Act by respondent No.4, who according to the petitioner would have no authority or jurisdiction to initiate the proceedings for recovery in wake of the pendency of the matter before the Income Tax Settlement Commission and now before the newly constituted Interim Board of Settlement.
Issue urgent Notice, returnable on 25.10.2021. In the meantime, interim relief in terms of prayer 9(D) is granted.
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2021 (10) TMI 1302
Alteration of rate of Late Payment Surcharge(LPS) payable by the Appellant to the Power Generating Companies under the respective Power Purchase Agreements - notifications dated 01.07.2010 and 03.03.2016 issued by the Reserve Bank of India - 'Change in Law' as defined in the respective Power Purchase Agreements between the Appellant and the Respondent Nos. 2, 3, 4 and 5 - LPS, which admittedly is compensatory in nature, can in law be awarded to the Respondents without any evidence of actual loss (equivalent to the LPS determined at the rate of PLR +2%), particularly when Power Generators are availing working capital loan at much lower rate of interest, based on Base Rate or MCLR? - LPS, which is admittedly compensatory in nature, can in law be awarded in such a manner that it results in unjust enrichment of the Power Generators, especially since the interest is to be paid by compounding monthly?
HELD THAT:- As held by this Court in State Bank of India and Ors. v. S.N. Goyal [2008 (5) TMI 649 - SUPREME COURT] cited by Mr. Singh, the word "substantial question of law" means not only a substantial question of law of general importance, but also any substantial question of law arising in a case between the parties on which the decision in the lis depends. A question of law which arises incidentally or collaterally and has no bearing on the final outcome, will not be a substantial question of law. Whether the question raised is a question of law and if so, whether the question is a substantial question of law is also not determined by the enormity of the stakes involved in the case - In Nazir Mohamed v. J. Kamala and Ors. [2020 (8) TMI 866 - SUPREME COURT], also cited by Mr. Singh, this Court held that, to be "substantial", a question of law must be debatable, not previously settled by the law of the land or any binding precedent, and must have a material bearing on the decision of the case and/or the rights of the parties before it, if answered either way.
On a conjoint reading of Section 125 of the Electricity Act with Section 100 of the Code of Civil Procedure, it is absolutely clear that an appeal to this Court lies on a substantial question of law. The condition precedent for entertaining an appeal Under Section 125 of the Electricity Act, 2003 is the existence of a substantial question - In TUPPADAHALLI ENERGY INDIA PVT. LTD. VERSUS KARNATAKA ELEC. REG. COMM. & ANR. [2017 (1) TMI 1781 - SUPREME COURT], this Court held that the view taken by the Kerala State Electricity Regulatory Commission and APTEL in interpreting of Clause 6(5) of the Power Purchase Agreement as an incentive, being a plausible view, there was no substantial question of law to warrant interference Under Section 125 of the Electricity Act.
Whether the change applicable in respect of interest charged by banks and financial institutions from the Prime Lending Rate to Base Rate and then to MCLR amounts to change in law in terms of the Power Purchase Agreement? - whether there is any substantial question of law involved in this appeal? - HELD THAT:- There can be no doubt that a notification issued by the Reserve Bank of India constitutes law. A Reserve Bank of India notification which alters, modifies, cancels or replaces an earlier notification would tantamount to a change in law. However the notification relating to alteration of the lending rates chargeable by banks and financial institutions are not laws which relate to the Power Purchase Agreements in question, and therefore do not attract, as the case may be, Article 13 of the Stage 1 Agreements or Article 10 of the Stage 2 Agreements - The RBI circulars/guidelines referred to above are admittedly instructions issued to banks and financial institutions and are not applicable to the Appellant or to the Respondent-Power Generating Companies, who are engaged in the business of production, sale/purchase and/or distribution of electricity and not of advancing loans. Moreover, SBAR as defined in the Power Purchase Agreements is admittedly not linked to any RBI guidelines or circulars. The guidelines/circulars are thus not relevant to the issues involved in this appeal.
The definition of SBAR is clear and has been correctly applied by both the forums below. There are concurrent findings of fact that the SBI PLR (i.e. the benchmark reference rate mentioned in the PPA) is still being published and is available. The Court cannot, at this stage of a second appeal Under Section 125 of the Electricity Act reopen the factual question of whether at all PLR rates were being notified by SBI for short term loans - The provision in the Power Purchase Agreement, whereby the parties are to mutually agree on a rate of interest, in case there is no SBI Prime Lending Rate, in itself excludes the applicability of the general provision for Change in Law contained in Article 13 of the Power Purchase Agreement to Late Payment Surcharge.
The object of LPS is to enforce and/or encourage timely payment of charges by the procurer, i.e. the Appellant. In other words, LPS dissuades the procurer from delaying payment of charges. The rate of LPS has no bearing or impact on tariff. Changes in the basis of the rates of LPS do not affect the rate at which power was agreed to be sold and purchased under the Power Purchase Agreements. The principle of restitution under the Change in Law provisions of the Power Purchase Agreements are attracted in respect of tariff - LPS cannot be equated with carrying cost or actual cost incurred for the supply of power. The Appellant has a contractual obligation to make timely payment of the invoices raised by the Power Generating Companies, subject, of course, to scrutiny and verification of the same. Mr. Mukul Rohatgi has a point that if the funding cost was so much lesser than the rate of LPS, as contended by the Appellant, the Appellant could have raised funds at a lower rate of interest, made timely payment of the invoices raised by the Power Generating Companies, and avoided LPS.
The Parties to the Power Purchase Agreements have mutually and consciously agreed to the incorporation of the PLR as notified by SBI from time to time, as the rate for levy of LPS. Therefore, by virtue of the doctrine of incorporation, the PLR as notified by SBI each year gets incorporated in the Power Purchasing Agreements, as binding between the parties. Thus, any other system notified by the Reserve Bank of India by its circulars has no bearing on the terms of the Power Purchase Agreement and cannot be deemed to be incorporated in the Power Purchase Agreement, except in case of mutual agreement between the parties, in the event of absence of SBI PLR, and approved by the MERC - Admittedly, the Appellant has landed itself in its present predicament, due to delay in making timely payments to the Respondent Power Generating Companies. There was no pandemic at the time of filing of the petition before the MERC in 2017 and the Appeal before the APTEL in 2018. It, cannot, therefore be said that the Appellant defaulted in payment of bills by reason of its financial predicament as a result of the outbreak of COVID 19 in India, which was in March 2020.
It is difficult to accept that the Appellant should incorporate in their stereotype Power Purchase Agreements, a provision for payment of LPS at a rate 2% higher than the SBAR, in case of late payment of invoices/bills, without any pre estimation of the loss likely to be suffered by a Power Generating Company, by reason of non payment of bills in time, more so when the Late Payment Surcharge is linked to the rate of interest in respect of specific types of loan, charged by a leading nationalised bank with the largest numbers of branches spread all over the country including in mofussil and rural areas - in this second appeal Under Section 125 of the Electricity Act 2003, which is only to be heard on a substantial question of law, this Court would not embark upon the exercise of making a factual enquiry into the mode and manner in which the Power Generating Companies meet their working capital requirements and interest that individual Power Generating Companies pay to their lenders.
It is now well settled by various decisions of this Court that an Electricity Regulatory Commission such as MERC constituted under the Electricity Act, 2003 has all the trappings of a Court. The MERC is a substitute for a Civil Court in respect of all disputes between licensees and Power Generating Companies - MERC acted within the scope of its power of regulatory supervision in directing the Appellant to make payment of LPS within the time stipulated in the order of MERC. The APTEL rightly upheld the direction. In any case, such a direction cannot be interfered with in exercise of powers Under Section 125 of the Electricity Act which corresponds to the power of Second Appeal Under Section 100 of the Code of Civil Procedure, since the sine qua non for entertaining an appeal is the existence of a substantial question of law.
The Appellant filed an application to bring on record additional facts and documents in the form of queries under the Right to Information Act, 2005 made by one Alka Mehta to the State Bank of India and the responses thereto in an attempt to show that PLR would not apply to short term loans advanced by SBI after transition to the Base Rate/MCLR system. This Court cannot take note of any documents sought to be introduced after the conclusion of hearing - this Court cannot in a second appeal Under Section 125 of the Electricity Act, 2003 interfere with concurrent factual findings arrived at by MERC and APTEL on the basis of facts admitted by the Appellant. The Appellant had been accepting the invoices raised by the Respondent-Power Generating companies and accounts had duly been reconciled by the Appellant. The LPS charged by the Respondent Power Generating Companies was never disputed. Furthermore, this Court cannot look into documents introduced for the first time in this second appeal, which were not tendered in evidence before the MERC or the APTEL. Even otherwise, queries made by one Alka Mehta, a rank outsider as late as on 12th July 2021 or replies thereto cannot be relied upon in evidence, by the Appellant.
There are no grounds to interfere with the judgment and order of the learned APTEL confirming the judgment and order passed by MERC - appeal dismissed.
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2021 (10) TMI 1301
Seeking grant of bail - commission of certain Schedule Offences - collection of huge amount from innocent depositors by floating different alluring schemes in falsely promising them with very high returns and benefits - petitioner is said to have the direct and indirect indulgement in these activity of the Companies and knowingly assisted and became a party in the processed activity connected with the proceeds of the crime - offence under Section 120- B/294/341/406/409/420/467/468/471/506/34 of the IPC read with Section 4/5 & 6 of the Prize Chit and Money Circulation Scheme (Banning) Act, 1978.
HELD THAT:- Section 45 of the PMLA at it presently stands begins with non-obstante clause. Section 45 imposes two conditions for grant of bail to any person accused of any offence under the Act viz., (i) that the prosecutor must be given an opportunity to oppose the application for such bail; (ii) where the move is opposed, the court must be satisfied that there are reasonable grounds for believing that the accused persons is not guilty of such offence and that he is not likely to commit any offence while on bail.
If by the amendment introduced in Section 45 of the PMLA, by Act No. 13 of 2018; the entire Section 45 has been reframed in reviving and resurrecting the requirement of twin-conditions under sub-Section (1) of Section 45 of the PMLA for grant of bail. In view of clear language used in paragraph 46 of the Hon'ble Supreme Court's decision in case of NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. [2017 (11) TMI 1336 - SUPREME COURT], this Court is of the considered view that the amendment in sub-Section (1) of Section 45 of the PMLA introduced after the Hon'ble Supreme Court's decision in case of Nikesh Tarachand Shah does not have the effect of reviving the twin-conditions for grant of bail, which have been declared ultra vires Articles 14 and 21 of the Constitution of India.
The power under Section 438 of Cr.P.C. is an extraordinary power and the judicial discretion is this regard is required to be exercised with due care and caution. Grant or refusal of bail is entirely discretionary and discretion should depend upon the facts and circumstances of each case as also all other surrounding factors as relevant to the particular case on hand. Certain parameters have to be kept in mind while considering or dealing with the application for anticipatory bail - here the Petitioner has faced the custodial interrogation on 08.02.2016, 09.02.2016, 10.02.2016 and 11.02.2016 as has been stated in the counter affidavit filed by the E.D. His detail statement has also been recorded. The properties said to have been so acquired have already been identified in course of investigation as indicated in the list as provided.
The Petitioner has been at large and free for several years and has not even been arrested during the investigation or thereafter by the E.D. Officials. It is not shown nor any material is pointed out to say that the Petitioner has violated any terms and conditions as imposed on him, while granting bail in the CBI case which include more importantly the surrendering his passport and as to his appearance in Court on each date of posting of the case and before the Investigating Officer on Monday of every month until full completion of investigation. If the Petitioner has been enlarged and free for many years and has not been arrested during investigation or taken to custody; the move to suddenly go for his arrest for being incarcerated further merely because of pendency of the PMLA case against him by resisting the prayer, does not appear to be in the direction of serving any purpose of the case where the cognizance has been taken way back on 01.11.2016 and supplementary complaints being also filed the same have been accepted.
It is directed that in the event of arrest of the Petitioner or upon his surrender before the Court in seisin of the case, he shall be released on bail on the conditions imposed - bail application allowed.
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2021 (10) TMI 1300
Refund of service tax paid - erroneous payment of service tax on export of service under the category of Business Auxiliary Service for which, it is claimed that this is an exempted from service tax - rejection on the ground of principles of unjust enrichment - absence of any challenge or assessment or self-assessment in appeal - HELD THAT:- Considering that there are divergent views of this Tribunal in the case of Cadila Healthcare Limited [2021 (4) TMI 1157 - CESTAT AHMEDABAD] and in the case of Karanja Terminal and Logistics Pvt.Ltd. [2021 (2) TMI 300 - CESTAT MUMBAI], therefore, it would be proper to refer the matter to the Larger Bench of this Tribunal to decide the following issue:-
“Whether refund claim of service tax is maintainable in the absence of any challenge or assessment or self-assessment in appeal or not?
The Registrar is directed to place the matter before the Hon’ble President to constitute the Larger Bench for resolution of the above issue.
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2021 (10) TMI 1299
Maintainability of petition - whether as per Section 47 of the Act, 2002 instead of filing the petition under Section 482 Cr.P.C., the petitioner should file revision? - HELD THAT:- Since the learned counsel for opposite parties wants to address on the aforesaid legal submission of learned counsel for the petitioner, for that, he prays some shortest time, therefore, list/ put up this case on 27.10.2021 as fresh in the additional cause list to enable the learned counsel for the opposite parties to address the Court on the point of maintainability.
Learned counsel for the petitioner shall also come prepared on the point of maintainability on the next date.
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2021 (10) TMI 1298
TP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- Assessee is doing business of ITes segment wherein major work is of analytical support and functions with software services as only incidental to and not independent of such analytical functions, thus companies functionally dissimilar with that of assessee need to be deselected.
Also if an extraordinary event has taken place by way of amalgamation that company cannot be considered as a comparable one - See BRINTONS CARPETS ASIA PVT. LTD.case [2019 (4) TMI 56 - ITAT PUNE]
While making the selection of comparables, the turnover filter, has to be the basis for selection. A company having turnover of ₹ 11 crores cannot be compared with a company which is having turnover of ₹ 260 crores which is more than 23 times. See M/S. PENTAIR WATER INDIA PVT. LTD. [2016 (5) TMI 137 - BOMBAY HIGH COURT]
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2021 (10) TMI 1297
Provisional release of goods - Section 110 of the Customs Act, 1962 - HELD THAT:- The Authorities have been directed to decide the application, in accordance with the law within a period of four weeks from the date of receipt of a certified copy of the order of the High Court.
The special leave petition is dismissed.
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2021 (10) TMI 1296
Seeking grant of Bail - economic Offences or not - HELD THAT:- The trial Court is not precluded from granting interim bail taking into consideration the conduct of the accused during the investigation which has not warranted arrest. On this aspect also we would give our imprimatur and naturally the bail application to be ultimately considered, would be guided by the statutory provisions.
It is not as if economic offences are completely taken out of the aforesaid guidelines but do form a different nature of offences and thus the seriousness of the charge has to be taken into account but simultaneously, the severity of the punishment imposed by the statute would also be a factor - SLP disposed off.
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2021 (10) TMI 1295
Permission for withdrawal of petition - Provisional release of goods alongwith the truck - Section 67(6) of the GST Acts read with Rule 140 of the GST Rules - HELD THAT:- Present petition stands disposed of as withdrawn.
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2021 (10) TMI 1294
Delayed Employees contribution towards EPF and ESI - addition u/s 36(1)(va) - AR has pointed to the statement of the deposits made during the year and from that table he has pointed out that though there has been delay in deposit of the PF/ESIC Contributions but all the amounts have been deposited with the appropriate authorities before filing of return of income by the assessee - Scope of amendment - HELD THAT:- Various Benches of the Tribunal at Delhi and other Tribunal have held that the delayed deposits of PF & ESIC but before the date of filing of return is an allowable expenditure and for which reliance was placed on the decision of Hon’ble Delhi High Court in the case of AIMIL Ltd. [2009 (12) TMI 38 - DELHI HIGH COURT]
As far as reliance by Learned DR on the amendment brought out by Finance Act 2021 is concerned, “notes on clauses” to the Finance Bill 2021 clearly states that the amendment will take effect from 1st April 2021 and will apply in relation to the assessment year 2021-22 and subsequent assessment year. In such a situation, we are of the view that the amendment does not apply to the assessment year under consideration. As far as the reliance of Revenue on the decision of Vedvan Consultants Pvt. Ltd.[2021 (8) TMI 1219 - ITAT DELHI] as find that the various division Benches of the Delhi & other Tribunal have held the delayed deposits of PF/ESIC Contributions to be allowable if the same are deposited with the appropriate authorities before filing of return of income by the assessee.
It is settled law that when two judgments are available giving different views, then the judgment which is in favour of the assessee shall apply as held in case of Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME COURT]. Therefore following the decision rendered by Hon’ble Apex Court in the case of M/s. Vegetable Products Ltd. (supra) and AIMIL Ltd. (supra), of the view that no disallowance was warranted in the present case - therefore direct the AO to delete the addition. Thus the assessee’s ground is allowed.
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2021 (10) TMI 1293
Consideration of Resolution Plan - consideration of Resolution Plan which was received belatedly post expiry of 330 days, despite, extending the period of ‘CIRP’ by 45 days - fundamental or vested rights vis-à-vis the CIRP - Appellant/ Second Respondent takes a stand that the ‘impugned order’ passed by the ‘Adjudicating Authority’ had failed to appreciate that the First Respondent/ ‘Prospective Resolution Applicant’s’ Application was a premature one at the moment, since no ‘Resolution Plan’ was approved for the ‘Corporate Debtor’ in ‘CIRP’.
HELD THAT:- In the instant case, the Adjudicating Authority on 08.01.2021 in IA No.1079/2020 in CP (IB) No.184/HDB/7/2019 (filed by the 2nd Respondent/Resolution Professional) had granted another 60 days extension from 08.01.2021 expiring on 08.03.2021 and that the 330 days period was also to lapse on the same day - It transpires that the Resolution Professional had re-issued the Form G on 25.01.2021 because of the perceived increase in value of the Corporate Debtor as per Regulation 36-A read with Regulation 36(B)(7) of IBBI (Insolvency Resolution for Corporate Persons) Regulations 2016. The last date for submission of ‘Resolution Plan’ was on 24.02.2021 and further, that the said date was extended to 01.03.2021, till 06.03.2021 and then, finally till 08.03.2021.
This Tribunal is of the considered opinion that application filed by the Resolution Professional on 03.03.2021 (six days before the expiry of 330 days on 09.03.2021) ought to have been determined by the ‘Adjudicating Authority’, prior to the passing of the impugned order dated 24.06.2021 (uploaded on 09.07.2021), with a view not to give room for complications and to avoid wider ramifications and implications. Unfortunately, such a course was not resorted to, which in the considered opinion of this Tribunal is not a desirable/ palatable one.
Need of Speed - HELD THAT:- It cannot be gainsaid that ‘speed’ is the gist for an effective functioning of the ‘I&B’ Code. As per Section 12(2) of the Code, an application for an extension of ‘Insolvency Resolution Process’ must be made by Resolution Professional, if directed/ instructed in that regard, by means of a Resolution passed by the 75% ‘majority of the Creditors’. The timeline i.e. prescribed is for the reason that liquidation proceedings otherwise should not be for an interminable period, thereby jeopardizing the interest of all Stakeholders in the ‘Corporate Insolvency Resolution Process’.
Observance of Time Frame - HELD THAT:- All the concerned Authorities are necessarily required to adhere to the timeline enunciated in Regulation 40A of the IBBI (Corporate Insolvency Resolution Process for Corporate Persons) Regulations, 2016. No wonder, the I&B Code, 2016 provides for the consequences of the period mentioned in Section 12 coming to an end in the event that the said period is over without the receipt of a ‘Resolution Plan’ or after rejection of a ‘Resolution Plan’ in terms of Section 31.
Adjudicating Authority’s Power - HELD THAT:- The power of the ‘Adjudicating Authority’ to extend further time limit cannot be extended beyond 90 days, which is the maximum period in Section 12 of the I&B Code. Section 12(3) of the Code further enjoins that any extension of CIRP under this Section shall not be granted more than once and Section 12(3) of the Code is to be read with the third proviso to Section 30(4) which mentions that the maximum period of 30 days specified in the second proviso is permissible, as the only exception to the extension of the period not being granted more than once - Undoubtedly, an extension of time limit for CIRP is a grey/ critical arena. In a case, where CIRP is pending and not completed within 330 days within which the Resolution of stressed asset is to take place, only in an exceptional / extraordinary case, the outer time limit of 330 days can be extended with a view to secure the ends of justice.
Effect of Non-Observance of Time Line - HELD THAT:- A Tribunal/ Appellate Tribunal is to follow the requirement and discipline of ‘I&B’ Code, 2016, enacted by the Parliament, to streamline the Resolution of Corporate Insolvencies, of course bearing in mind of the fact that the relevant provisions of the Code are well thought of in ‘public interest’ and to ensure good Corporate Governance. The repercussions in not following the timeline prescribed in IBC are that (i) maximisation of the value assets of the Corporate Debtor will weaken the realisation potential prospect of the Creditors; (ii) The promoters of the Company will remain undischarged from their obligation/liability. The individual who is to proceed against the Company, is suspended from exercising his right for moratorium remains in force till the CIRP period is continuing.
It is to be pointed out that the Tribunal/ Appellate Tribunal are showered with restricted jurisdiction mentioned in the ‘I&B’ Code, 2016 and they cannot function as ‘Courts of Equities’ or exercise plenary powers. In short, they are scrupulously bound by the ‘discipline of statutory provisions’ and they cannot traverse beyond the parameters of law.
Resolution Professional’s Duty - HELD THAT:- A ‘Resolution Professional’ is not to be made liable because his perception is incorrect unless it is unreasonable. He is required to take prudent/ reasonable care in arriving at a subjective judgment based on circumstances that the ‘best price’, to be permitted by him - As per Section 25(h) of the ‘I&B’ Code, 2016 the ‘Resolution Professional’ has a duty to invite ‘Prospective Resolution Applicants’, who satisfy such criteria as may be laid down by him with the approval of ‘Committee of Creditors’, considering the complexity and scale of operations of the ‘Business’ of the ‘Corporate Debtor’ and such other conditions as may be prescribed by ‘IBBI’ to project ‘Resolution Plans’, present such Plan(s) to the ‘Committee of Creditors’ etc. As per Section 30(2) of the I&B Code, the ‘Resolution Professional’ is to examine each ‘Resolution Plan’ received by him and confirm that it meets the requirements mentioned in sub-section (2).
Confidentiality of Plan - HELD THAT:- The ‘Resolution Plan’ furnished by one or the other ‘Resolution Applicant’ is a ‘confidential’ one and it cannot be disclosed to any ‘Competing’ ‘Resolution Applicant’ nor any view can be taken or objection can be asked for from other ‘Resolution Applicants’ in regard to one or the other ‘Resolution Plan’. It cannot be lost sight of that the conduct of ‘Resolution Professional’ is important in deciding whether he is guilty of ‘Misfeasance’ or ‘Fraud’ or any other ‘Serious Irregularity’ in the preparation of ‘Resolution Plan’. As a matter of fact, the ‘Resolution Plan’ ‘is confidential in nature’. No wonder, the Resolution Professional is to act in an expeditious fashion. In short, an ‘Insolvency Professional’ is to perform his duties by facing challenges that he come across during CIRP.
This Tribunal’ considering the entire conspectus of the attended facts and circumstances of the case in an holistic fashion and in view of the fact that as per the ingredients of Section 60(5) of the I&B Code, the facts/ points of law were raised application filed by the First Respondent/ ‘Prospective Resolution Applicant arising out of the impugned order pertaining to the Insolvency Resolution Process (concerning the ‘Corporate Debtor’) and further that the ‘Adjudicating Authority’ is to adhere to the procedural aspect prescribed in relevant sections of the I&B Code, of course depending on the question of priorities/ question of law and facts involved, and this Tribunal, by adhering to the statutory requirements of I&B Code, 2016 directs the Second Respondent/ Resolution Professional to place only the ‘Resolution Plan’ of First Respondent/ Consortium of Prudent ARC Limited & Vizag Minerals and Logistics Pvt. Ltd. (‘Prospective Resolution Applicant’) and the ‘Resolution Plan’ of ‘Sindhu Trade Links Ltd.’ (‘STLL’), which were submitted before the due date, before the ‘Committee of Creditors’ for its consideration and to complete the ‘CIRP’ keeping in mind on 07.11.2019, the C.P.(IB) No.184/7/HDB/2019 was admitted by the ‘Adjudicating Authority’ commencing ‘CIRP’ against the ‘Corporate Debtor’, a timely resolution of stressed assets is a prime factor in the successful working of the Code, the interest of the ‘Stakeholders’ including the ‘Creditor(s)’, effectively balancing within the four corners of ‘Law’, and as per ‘I&B’ Code, 2016 and ‘Regulations’ without any further loss of time.
Appeal disposed off.
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2021 (10) TMI 1292
Vacation of the ex-parte interim order - HELD THAT:- It reveals from the order impugned dated 01.10.2021 that the pleadings are complete and taking note of the grievance which has been projected by the parties, the NCLAT, Principal Bench, at New Delhi has fixed the matter for hearing on 16.11.2021.
It is considered appropriate to observe that if hearing would not have been possible to take place on 16.11.2021, at least their request for vacation of the ad-interim order dated 19.10.2020 may be heard on the aforesaid date.
Appeal disposed off.
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2021 (10) TMI 1291
Revision u/s 263 by CIT - non-verification of cash loan received and repaid - eligible approval granted by the JCIT - search and survey of SRK group and it related parties, of which the assessee is also part, has resulted in to impounding of documents/ books of accounts and evidence related with evidence of undisclosed receipt and expenses in respect of project Radhika Homes - initiation of action under section 153C - PCIT held that AO while recording satisfaction for initiating assessment proceedings shown no reference of seized document/evidence - HELD THAT:- We find the there is no dispute that the AO while passing the assessment order accepted the claims of the assessee in non- speaking order. It is not the case of ld PCIT that the AO is not authorised (empowered) to accepted the return of income in nonspeaking order. We have seen that the AO while passing the assessment order recorded that “the Authorized representative of the assessee vide various order sheet entries have furnished the relevant details and information called for.
After affording ample and adequate opportunities of being heard to the assessee, assessment proceedings have been completed on the basis of the submissions and details collected and in consequence upon the conclusion of proceeding and hearing of evidences, assessment is made by this order”. A perusal of show cause notice under section 263 dated 08.03.2021, clearly demonstrate that the ld PCIT identified all the issues which were the subject matter of the notice under section 142(1)and the questionnaire attached thereto, were issued by the assessing officer, except the issue of initiation of penalty 271D/ 271E .
PCIT in his show cause notice (SCN) under section 263 has accepted that the AO made detailed questionnaire dated 03.12.2018. And on perusal record and details /evidences available on record, the PCIT noted that AO has not made further inquiry. Thus, the ld. PCIT has not made a case that there was “no enquiry” or “lack of inquiry” rather recorded that the AO called detailed inquiry. We find that the ld. PCIT has not specified that what kind of further inquiry was required, when the income disclosed in IDS was duly accepted by higher authority. And the acceptance of IDS was never questioned by Board or other superior authority then PCIT. It is the AO who has to take a conscious decision if any further inquiry is required or not. Furthermore, the assessment order was duly approved by the ld JCIT. There in not finding of ld PCIT that the approval granted by the JCIT is not proper or non-application of proper procedure.
Non initiation of penalty under section 271D/ 271E we find that in case of CIT Vs Suresh G. Shah [2006 (8) TMI 101 - HIGH COURT, GUJARAT] and CIT Vs Parmanand M. Patel [2005 (7) TMI 72 - GUJARAT HIGH COURT] it was held that CIT cannot exercise his jurisdiction under section 263 for the purpose of initiation of penalty proceedings. Other also we find that the assessee has specifically in its reply to the SCN to the ld PCIT has stated that the cash was received only against the booking and no loan or such transaction was undertaken by them. The ld PCIT failed to specify the transaction on which initiation of penalty either under section 271D or 271E was warranted. And on the issues of validity of discloser in IDS, the ld PCIT has not specified that while making declaration the assessee made any misrepresentation of any facts. Once the IDS in all cases were accepted by ld. PCIT, the AO or the Range head no authority to relook or power to revoke or to examine its validity. We further find that the ld PCIT while directing the AO has not himself revoked the IDS nor directed to refund the payment of tax to the assessee. Further, we find that in the IDS the assessee has paid more tax to the revenue then the rate of normal tax, so there is no loss of revenue.
Hon’ble Delhi High Court in CIT Vs Kelvinator of India Ltd [2002 (4) TMI 37 - DELHI HIGH COURT] held that if the AO has adopted one of the course permissible in law, which resulted in loss of revenue or where two view is possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as erroneous order prejudicial to the interest of revenue unless view taken by the AO is not sustainable in law. At the cost of repetition, we may note that the ld PCIT neither in his show cause notice nor in ultimate / final order has held that the order passed by the AO is unsustainable in law. So far as nonverification of CASS (only issue in AY 207-18 only), we find that the ld PCIT raised this issue that the item under the CASS were not verified by the assessing officer. We find that the assessment of this year (AY2017-2018) the assessment has not been made has been made consequent of survey and not under CASS hence, the said identification of such issue is not misplaced. - Decided in favour of assessee.
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2021 (10) TMI 1290
Set off of deficit in mutuality account as eligible for set off as a “loss” against its income from “Other” sources - HELD THAT:- Hon’ble apex court’s landmark decision in Bangalore Club case [2013 (1) TMI 343 - SUPREME COURT] has settled the law that an assessee has to satisfy the three essential ingredients for the purpose of getting mutuality benefit i.e. a complete identity between contributors and participators, their actions to be very much in furtherance to mandate of the club and that there is no scope for any kind of profiteering from the fund created by them which could only be expended or returned to themselves. It has been further made clear therein that it is only section 2(24)(vii) of the Act wherein a specific instance of a mutual organization has been held to be deriving taxable income.
The legislative expression “head” of income must be taken as any of the five heads of income provided u/s. 14 of the Act i.e. salary, income from house property, profits and gains of business or profession, capital gains and income from other sources; respectively. We thus are of the opinion that once the assessee's impugned deficit arising from mutuality account is neither covered in any of the said heads as well nor u/s. 2(24)(vii) defining “income” in the very account, section 71 of the Act would not apply in isolation. We further deem it proper to refer to hon'ble apex court’s recent larger bench decision in Commissioner of Customs Vs. Dilip Kumar & Co [2018 (7) TMI 1826 - SUPREME COURT]that provisions of a taxing statutes have to be strictly construed only.
As in CIT Vs. Hariprasad and Co. P. Ltd.case [1975 (2) TMI 2 - SUPREME COURT] that a loss arising from a head of income not chargeable to tax is not eligible to be set off against a taxable source - As per Kishorebhai Bikabhai Virani case [2015 (2) TMI 807 - GUJARAT HIGH COURT]a loss under an exempt source is not to be carried forward for set off against subsequent year’s income.
CIT(A) had been directed to consider the assessee’s going by the corresponding statutory provisions in light of relevant facts rather than allowing the same on merits. We further make it clear that the assessee had raised the impugned argument for the first time before the learned co-ordinate bench wherein it thought it proper to redirect the same back to the CIT(A) for necessary verification and adjudication. We thus decline the assessee's instant solitary substantive grievance - Decided against assessee.
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2021 (10) TMI 1289
Refund of service tax paid - it is claimed that levy of service tax on ocean freight itself has been held as ultra-vires - HELD THAT:- The judgment of Gujarat High Court in the case of MESSRS SAL STEEL LTD. & 1 OTHER (S) VERSUS UNION OF INDIA [2019 (9) TMI 1315 - GUJARAT HIGH COURT] only after the proceedings concluded by the lower authority i.e. sanctioning authority. This judgment was challenged before the Hon’ble Supreme Court by the Revenue but no stay was granted, since the judgment was not delivered before passing the adjudication order and by the Commissioner (Appeals).
In the interest of justice, the matter needs to be reconsidered in the light of judgment of Hon’ble Gujarat High Court in the case SAL Steel Limited - Appeal allowed by way of remand
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2021 (10) TMI 1288
Seeking a take over by the Resolution Professional/R-2 over the control and management of the affairs of Corporate Debtor from the 3rd respondent - HELD THAT:- The prayer was made because the appeal was pending and if the matter has been taken up for final hearing, that issue in an appropriate manner can be dealt with in the appeal itself - Application disposed off.
Scope of the scrutiny in the present proceedings - impleadment of Bank of Maharashtra - HELD THAT:- The caveat to this expressed by learned counsels for respondents Nos. 1 and 3 is that it would open a pandora’s box and in any case the benchmark of consent of the creditors today is of not 75% but 66% in terms of Section 30, sub- Section (iv) of the Insolvency and Bankruptcy Code, 2016 - learned counsels for respondents Nos. 1 and 3 sought to contend that no creditor de hors the consortium could have invoked the bank guarantee and this is not in the nature of guarantee invoked which is to operate as a bar in terms of Section 29A(h) of IBC. It is also their say that RBL bank was not a part of the consortium and had actually given up their security.
On impleadment of the Bank of Maharashtra as respondent No. 11, it is issued notice to the said respondent returnable on 07.11.2021 - List as part-heard for directions in miscellaneous matters on 09.11.2021.
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2021 (10) TMI 1287
Reopening of assessment u/s 147 - documents satisfactorily to explain the deposits or not shall be set out in the assessment order when it is made de novo - HELD THAT:- The case on hand is a case of non-consideration of support materials and not giving any reason as to why reply is unacceptable, leading to conclusion that the deposits have not been satisfactorily explained. Respondent may have considered, as contended by learned Revenue counsel, but the point remains that it could have been set out if not eloquently articulated in the impugned order as already delineated to supra. Considering the unique facts and circumstances of the case as a one off matter, captioned writ petition is sent back to respondent.
Impugned order dated 28.09.2021 bearing reference DIN & Documen is set aside solely for the purpose of facilitating the respondent to redo the assessment by considering what according to writ petitioner inter-alia support affidavit - The sequitur to the above limb is, though obvious, it is made clear that this Court has not expressed any view or opinion on the merits of the matter.
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2021 (10) TMI 1286
Prayer for two days' time to verify the position and submit a note of the advocate-on-record for the Department about the correct position - HELD THAT:- The cases covered under concerned sub-category have been notified in the chart following the note presented before us. On next date, the Registry shall arrange the cases as per the sub-categories, referred to above, in the manner mentioned in that chart. This chart is acceptable to the learned counsel appearing for the opposite parties.
Further, the common issue involved in all these cases to be dealt with at the outset is about the interpretation of Rule 3(1)(iii) of the Export of Service Rules, 2005.
Matters are set down for final disposal on 23.11.2021 when the stated issue will be dealt at the first instance.
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