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Showing 181 to 200 of 1415 Records
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2023 (4) TMI 1236
Money Laundering - proceeds of crime - forbearing respondent from proceeding further on the ground that the respondent is acting beyond the jurisdiction conferred by the provisions of Prevention of Money Laundering Act, 2002 - contravention of the provisions of FEMA.
After investigation, the Closure Report has been filed by the Investigating Officer before the competent court of jurisdiction.
HELD THAT:- It is informed that the matter is fixed for hearing before the learned Magistrate tomorrow i.e.on 11.04.2023. The parties are directed not to take adjournment in the matter so as to enable the Ld. Magistrate to decide the matter expeditiously.
List the matter in the third week of July, 2023.
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2023 (4) TMI 1235
Validity of order u/s. 143(3) r.w.s.144C(13) without quoting DIN - acceptability of manual final assessment order without DIN - HELD THAT:- On perusal of the order u/s. 143(3) r.w.s.144C(13), it is noted that the order neither contains the DIN in the body of the order, nor contains the fact in the specific format as stated that the communication is issued manually without a DIN after obtaining the necessary approvals. Therefore we are of considered view that the impugned order is not in conformity with CBDT circular.
The contention of the ld DR was that the failure to generate and allocate DIN in this case is a mistake or at best, a defect and/or an omission, which ought not to invalidate the assessment proceedings.
Though there is no specific provision under the Act which mandates quoting of DIN, the intention of the legislature is very clear from the stringent language used in the circular that for the purpose of audit trail DIN is mandatory and without DIN any communication is deemed to have never been issued except for the exceptions contained therein. We are therefore unable to agree with this contention of the revenue. Appeal of assessee allowed.
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2023 (4) TMI 1234
TDS u/s 195 - Royalty - taxability of software receipts - Whether constitutes as taxable income deemed to accrue in India u/s 9(1)(vi)? - income deemed to accrue or arise in India -
HELD THAT:- In view of the order passed in M/S MOL CORPORATION [2023 (5) TMI 1065 - SC ORDER] dismissing the similar Special Leave Petition wherein issue raised by the Revenue is covered against them vide judgment in the case of “Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT], the present Special Leave Petition also stands dismissed.
Pending application(s) shall stand disposed of.
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2023 (4) TMI 1233
TP Adjustment - selection of MAM of the distribution transaction - TNMM v/s RPM - DRP confirmed the findings of the learned TPO that TNMM is the most appropriate method - assessee contending that when once the ITAT concluded in the first round of litigation that the business of the assessee is merely that of a pure distributor, then it is, but natural to conclude that the Resale Price Method (RPM) is the most appropriate method - HELD THAT:- A copy of the order [2020 (12) TMI 458 - ITAT HYDERABAD] in assessee’s own case, considered the functional profile of the assessee in the light of the terms of distribution agreement and held that the assessee is a distributor and not a service provider and also that RPM is the MAM.
Since there is nothing contrary on record, we find it difficult to take a different view for this year under consideration. We, therefore, accordingly set aside the impugned findings of the authorities below on this aspect and restore the issue to the file of AO/ TPO to consider the RPM as the MAM and take a view on the necessity of any adjustment towards ALP for distribution function, after hearing the assessee. Appeal of the assessee is treated as allowed for statistical purposes.
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2023 (4) TMI 1232
Validity of forfeiture order - power of forfeiture was exercised by the Authorized Officer in an arbitrary manner or not - HELD THAT:- Whenever a challenge is laid to an order of forfeiture made by an authorized officer Under Sub-rule (5) of Rule 9 of the Rules by a bidder, who has failed to deposit the entire sale price within ninety days, the tribunals/courts ought to be extremely reluctant to interfere unless, of course, a very exceptional case for interference is set up. What would constitute a very exceptional case, however, must be determined by the tribunals/courts on the facts of each case and by recording cogent reasons for the conclusion reached. Insofar as challenge to an order of forfeiture that is made upon rejection of an application for extension of time prior to expiry of ninety days and within the stipulated period is concerned, the scrutiny could be a bit more intrusive for ascertaining whether any patent arbitrariness or unreasonableness in the decision- making process has had the effect of vitiating the order under challenge - In any event, the underlying principle of least intervention by tribunals/courts and the overarching objective of the SARFAESI Act duly complimented by the Rules, which are geared towards efficient and speedy recovery of debts, together with the interpretation of the relevant laws by this Court should not be lost sight of. Losing sight thereof may not be in the larger interest of the nation and susceptible to interference.
In the present case, undisputedly, payment of 25% of the sale price was made by the contesting Respondent on 15th September, 2017; hence Sub-rule (3) of Rule 9 stood complied with. The contesting Respondent was notified to deposit the balance 75% of the sale price by 29th September, 2017. Admittedly, he could not or did not so deposit till 27th September, 2017, whereupon he prayed for extension of time by 25 days by his request letter of even date, i.e., 27th September, 2017. The Authorized Officer responded favourably and extended the time for deposit by 25 days as prayed by the contesting Respondent, i.e., till 23rd October, 2017. Extension of time till 23rd October, 2017, therefore, was by mutual agreement - a course of action permitted by Sub-rule (4). On 20th October, 2017, the contesting Respondent made a further request for extension of time by 15 days citing pendency of proceedings at the instance of Stallion before the DRT - The contesting Respondent not having deposited the balance amount of sale price by 23rd October, 2018, the mutual agreement for extension of time, thus, lapsed with effect from 24th October, 2017. This resulted in the order of forfeiture being passed by the Authorized Officer in terms of Sub-rule (5).
The transaction fell through by reason of the default or failure of the contesting Respondent to deposit 75% of the sale price by 23rd October, 2017, as per the terms of Rule 9(4). On facts, it is found that the contesting Respondent was arranging for funds when he received the summons from the DRT on 10th October, 2017. It is, therefore, clear that at least till that date, the contesting Respondent was lacking in financial resources to make payment of the entire sale price. Although it is not always necessary for an auction purchaser to arrange for funds and be ready to pay the entire sale price within 15 days of confirmation of sale, since extension of time is contemplated in Rule 9, it is beyond our comprehension why the contesting Respondent while applying for an extension of time on 27th September, 2017 sought for only 25 days' time and not for more time, at least up to the entire period of ninety days, being the maximum time that he could have asked for and made available to him in terms of Rule 9(4). He had also moved the DRT for extension of time, which was not granted.
Also, the terms of the auction notice made it clear that the auction sale would be conducted in terms of the provisions contained in the SARFAESI Act. All prospective bidders were, therefore, put on guard as to what could follow in case of a default or neglect. Notwithstanding the proceedings that were initiated before the DRT by Stallion of which the contesting Respondent became aware on 10th October, 2017, nothing prevented him from making full payment of the balance amount and have the sale certificate issued in his favour. It can be inferred from the facts and circumstances that the contesting Respondent was seeking to buy time - While dealing with a case covered by Rule 9 of the Rules, an order of forfeiture of sale price should not be lightly interfered. The contesting Respondent was not genuinely interested in proceeding with his part of his obligations and we see no arbitrariness in the action of the Authorized Officer in forfeiting Rs. 30,75,000/- being 25% of the sale price.
Whether the High Court was justified in its interference with the forfeiture order on the ground assigned in the impugned judgment and order? - HELD THAT:- The High Court to have committed an error of law in directing refund on the ground that the Bank "should not be permitted to enrich by forfeiting the amount from the writ Petitioner". It is not a question of the Bank's enrichment or deriving any undue advantage that the Court was really concerned with. It seems to have posed a wrong question for being answered.
When does an enrichment or unjust enrichment occur? - HELD THAT:- In SAHAKARI KHAND UDYOG MANDAL LTD. VERSUS COMMISSIONER OF C. EX. & CUS. [2005 (3) TMI 116 - SUPREME COURT], this Court had the occasion to reiterate that unjust enrichment means retention of a benefit by a person that is unjust or inequitable. Unjust enrichment occurs when a person retains money or benefit which in justice, equity and good conscience, belongs to someone else. The doctrine of unjust enrichment, therefore, is that no person can be allowed to enrich inequitably at the expense of another. A right of recovery under the doctrine of unjust enrichment arises where retention of a benefit is considered contrary to justice or against equity.
Yet again, in INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION VERSUS UNION OF INDIA & OTHERS [2011 (7) TMI 1109 - SUPREME COURT], this Court held that a person is enriched if he has received a benefit, and he is unjustly enriched if retention of the benefit would be unjust.
The High Court failed to bear in mind the settled principle of law that the power of judicial review of a writ court will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes, unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. On the pleadings, this was not one such case where the High Court should have interfered.
The question under consideration can also be addressed from a different perspective. In the present case, the Authorized Officer had adhered to the statutory rules. If by such adherence any amount is required to be forfeited as a consequence, the same cannot be scrutinized wearing the glasses of misplaced sympathy. Law is well settled that a result flowing from a statutory provision is never an evil and that a court has no power to ignore that provision to relieve what it considers a distress resulting from its operation. The statute must, of course, be given effect to whether a court likes the result or not - the second question answered by holding that the High Court was not justified in exercising writ jurisdiction and directing a refund of 25% of the sale price.
The order of the High Court stands set aside - appeal allowed.
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2023 (4) TMI 1231
Reopening of assessment - Scope of new provision section 148A - Scope of amendment by the Finance Act, 2021 which has amended Income Tax Act by introducing new provisions i.e. sections 147 to 151 w.e.f. 1st April, 2021 - contention petitioner that the notice dated 02.06.2022 issued under Section 148A(b) of the Act, lost its efficacy after 03.06.2022 - HELD THAT:- As relying on Instruction No.1/2022 dated 11.05.2022 issued by the Central Board of Direct Taxes (CBDT) the extended reassessment notices are deemed to be show cause notices under clause (b) of section 148A of the Act in accordance with the judgment of Hon'ble Supreme Court. [2022 (5) TMI 240 - SUPREME COURT] Therefore, all requirement of new law prior to that show cause notice shall be deemed to have been complied with.
Within 30 days i.e, by 2nd June 2022, the Assessing Officer shall provide to the assessees, in remaining cases, the information and material relied upon for issuance of extended reassessment notices.
The assessee has two weeks to reply as to why a notice under section 148 of the Act should not be issued, on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. The time period of two weeks shall be counted from the date of last communication of information and material by the Assessing Officer to the assessee.
If it is a fit case to issue a notice under section 148 of the Act, the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) of section 148A of the Act shall also be served with the notice u/s 148. If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served on the assessee.
The submission made by petitioner is that the absence of name and designation of the concerned officer, violates the provision of Section 282A of the Act is acceptable.
Having regard to the provisions of the said instruction, in our view, the notice issued u/s 148A(b) of the Act cannot be sustained. It is, accordingly, set aside.
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2023 (4) TMI 1230
Exemption on substantial expansion of unit - recovery of erroneous refund - refund was granted on the basis of any approval, acceptance and assessment relating to the rate of duty - extended period of limitation - HELD THAT:- Respondent submits that this very issue stands raised before the Supreme Court of India as well as several High Courts and stands answered against the revenue. A compilation of the judgments on this issue has been placed before this Court. The same is taken on record.
Compilation of the judgments has been handed over to Mr. Jagpaal Singh, learned counsel for the petitioner who seeks time to examine the same and make submissions - On his request, adjourned.
List on 6th of June, 2019.
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2023 (4) TMI 1229
Prayer for recording of voluntary statements of the Petitioner under Section 70 of the Maharashtra Goods and Service Tax Act, 2017 under the presence of Advocate at visible but not audible distance during interrogation - HELD THAT:- The petitioner’s Advocate permitted to remain present at the time of recording of the petitioner’s statement at a visible, but not at an audible distance. The videography of the said petitioner’s statement also permitted, at the cost of the petitioner. A copy of the said videography shall be handed over to the petitioner after show cause notice is issued to the petitioner.
Petition allowed.
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2023 (4) TMI 1228
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2023 (4) TMI 1227
Seeking permission for presence of the Advocate during the interrogation and recording of statements at visible but not audible distance and for video-graphing the interrogation - HELD THAT:- In the case of Vijay Sajnani vs. Union of India & Ors. [2012 (4) TMI 706 - SUPREME COURT], the Apex Court has directed that during the interrogation of the Petitioners therein, their counsel would be allowed to be present within visible distance but beyond hearing range. The Apex Court while disposing of the writ petition directed that in similar cases, in the event the person (s) summoned under Section 108 of the Customs Act, 1962, wish(es) for similar orders, he (they) may apply to the custom authorities concerned and a similar provision may be made for his/their interrogation in the present of the learned counse - Subsequent decisions of the Apex Court, on which the reliance has been placed by the learned counsel for the Petitioner, has permitted the presence of the Advocate during the interrogation of the Petitioner at visible but not audible distance.
The decisions of the other High Courts have taken a view that the presence of lawyer cannot be insisted as a matter of right. However, the decisions have a persuasive value and is not binding upon this Court.
The direction which has been sought by the Petitioners as regards the presence of the lawyer at visible but not audible distance is an aspect of fair investigation and we do not find any reason to take a different view from the view taken by the Coordinate Benches of this Court - it is not deemed fit to grant the relief of video-graphing.
The presence of the Petitioners’ advocate during the interrogation of the Petitioners is permitted at a visible but not audible distance - petition allowed.
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2023 (4) TMI 1226
Seeking grant of statutory/default bail - non-filing of the charge sheet/report within the prescribed period of 90 days - not permitting CBI for police interrogation - interim bail of the respondent-accused was cancelled on the ground that he did not appear before the Special Court despite specific directions and also did not cooperate with the CBI investigation - HELD THAT:- The facts in the present case are very glaring. Despite the fact that on 16.04.2021, the learned Special Judge allowed police custody of the respondent-accused for seven days i.e., up to 22.04.2021, the respondent-accused got himself admitted in the hospital during the period of police custody, i.e., on 18.04.2021 and obtained interim bail on 21.04.2021 which came to be extended till 08.12.2021 when his interim bail came to be cancelled by the learned Special Judge by observing that the accused has misused the liberty shown to him and during the interim bail he has not cooperated with the investigating agency. At the cost of repetition, it is observed that initial order of grant of seven days police custody attained finality. However, due to the aforesaid reasons of having got the accused himself hospitalised on 18.04.2021 and thereafter obtaining the interim bail on 21.04.2021, the CBI could not interrogate the accused in the police custody though having a valid order in its favour. Thus, the respondent-accused has successfully avoided the full operation of the order of police custody granted by the learned Special Judge. No accused can be permitted to play with the investigation and/or the court’s process.
No accused can be permitted to frustrate the judicial process by his conduct. It cannot be disputed that the right of custodial interrogation/investigation is also a very important right in favour of the investigating agency to unearth the truth, which the accused has purposely and successfully tried to frustrate. Therefore, by not permitting the CBI to have the police custody interrogation for the remainder period of seven days, it will be giving a premium to an accused who has been successful in frustrating the judicial process.
The appellant-CBI is permitted to have the police custody remand of the respondent for a period of four days - Appeal allowed.
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2023 (4) TMI 1225
Validity of faceless assessment u/s 144B - denial of reasonable opportunity of being heard while conducting the faceless assessment - HELD THAT:- In view of delayed compliance made by petitioner/assessee, response to the notice u/s 142(2) and partial response to notice u/s 142(1) and in the face of period of limitation for completion of proceeding coming to an end in the near future, the Revenue by notice afforded two days time to the petitioner/assessee for making his submission.
Thus it is obvious that since all proceedings were conducted faceless including passing of orders, the contention of petitioner of denial of opportunity of physical hearing cannot be countenanced. Moreso, the ground of disabling factor of close down imposed due to Covid 19 pandemic also cannot be treated as good ground. The online proceedings of faceless assessment could have been undertaken even during lock down, unless there was a break down of internet facility, which is not the case herein.
There is no denial of reasonable opportunity of being heard while conducting the faceless assessment by Revenue. Petitioner is relegated to avail statutory remedy of appeal against the order of assessment in accordance with law.
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2023 (4) TMI 1224
Employee’s contribution of PF/ESI on or before the due date prescribed under the relevant PF/ESI - Determination of Due date - assessee said that due has to be reckoned within 15 days from the close of the month in which payment is made to the employee, whereas according to Revenue the contribution has to be deposited within the 15 days from the close of the month for which salary/wages of the employee is due - HELD THAT:- It will be appropriate if the term ‘every month’ specified in Provident Fund scheme, whether it is the month for which salary/wages are due or month of the payment is referred to Relevant Authorities for finding out with reference to any judicial precedent in respect of provisions of the relevant Act.
Accordingly. we restore this issue back to the file of the Ld. Assessing Officer with the direction to find out from the relevant PF authorities about the term ‘every month’ as mentioned in clause 38 of the employees provident fund scheme. Similarly, he may find out from the ESI Authorities. Appeal of the assessee is allowed for statistical purposes.
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2023 (4) TMI 1223
TP Adjustment - international transaction of import of machine parts in the case of the assessee - DRP not allowing Upward Revision towards purchase price of import purchase on difference of arms length price in relation to international transactions though fully explained - HELD THAT:- We agree with the ld.counsel for the assessee that both the amounts of insurance claim and foreign exchange fluctuation need to be added to the operating revenue of the assessee for the purpose of arriving at the ALP of the international transaction. Thus, this contention of the assessee is accordingly allowed.
TP adjustment pertaining to the adjustment of the PLI of comparables which as per assessee ought to have been arrived at by making the same at the transaction level and not at the entity level, as done by the Revenue - We in agreement with the ld.counsel for the assessee that adjustment of the PLI of comparables ought to have been made at the transaction level and not entity level.
AO is directed to verify the computation now submitted by the assessee making adjustment at the transaction level, and if the adjustment was arrived at falls within ± 5% point of the international transaction, no adjustment has to be made to the international transaction of the assessee.
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2023 (4) TMI 1222
Exemption u/s 11/12 - delayed filing of Audit Report in Form 10B - procedural defect - claim made in the return of income, when the audit-report (Form No. 10B) was filed after filing of return but before processing u/s 143(1) - HELD THAT:- We are convinced that the controversy is directly settled in favour of assessee by decision in Savitri Foundation [2022 (8) TMI 1372 - ITAT MUMBAI] as following case of Mumbai Metropolitan Regional Iron & Steel Market Committee [2015 (4) TMI 512 - BOMBAY HIGH COURT] non-filing of Audit Report in Form 10B along with Return of Income is merely a procedural defect which is rectifiable. If the Audit Report was available with the assessee at the time of filing of Return of Income and was not filed due to bona fide reasons the benefit of exemption under section 11 cannot be denied if otherwise assessee is eligible to claim the same - late filing of required documents would not disentitle the assessee from availing benefit of section 11 of the Act.
Thus the assessee can’t be denied the benefit of exemption u/s 11 as claimed in the return of income for mere delay in filing of audit-report. We, therefore, deem it fit to remand this matter back to the file of AO for a fresh assessment. Appeal of assessee is allowed for statistical purpose.
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2023 (4) TMI 1221
Amendment of shipping bill - HELD THAT:- Learned Counsel for the Petitioner has brought to our notice the Advisory issued by the Directorate General of Systems and Data Management dated 11 April 2020 - Respondents will examine the Petitioner’s claim in light of the Advisory issued and inform the Court of the stand to be taken by the Respondents.
List the Petition on 2 May 2023.
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2023 (4) TMI 1220
Investigation by the Special Superintendent of Police, CID, West Bengal and the Commissioner of Police, Kolkata - requirement to file further investigation progress report including action taken against all the offenders who are directly or indirectly involved in defrauding the Government revenue by filing fake cases in the High court by 15th May, 2023 - HELD THAT:- Needless to mention that all the Government authorities including the official concerned of WBGST, CGST, Income Tax and this Court shall cooperate and coordinate with the police authorities in this investigation relating to such a crime committed against the Government and this High Court causing huge revenue loss to the Government.
Let the reports filed today by the police authorities be sealed again and kept with the record - The police authorities concerned shall also try to investigate from the angle as to how many fake writ petitions have already been filed in this Court in past before coming to the notice of this case and already got the order and defrauded the Government causing huge revenue loss.
List this matter on 15th May, 2023 as “Specially Fixed”.
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2023 (4) TMI 1219
Initiation of fresh proceedings - first respondent was seized of the matter and intimation in Form GSTDRC-01 dated 05.03.2021 was issued to which the appellants had submitted their reply dated 08.03.2021 - the said reply was neither considered nor rejected and the matter was kept pending - HELD THAT:- The option which was available to the first respondent was to consider the representation/reply and if not satisfied, could have proceeded to issue show cause notice under Section 74(1) of the Act which option the first respondent did not exercise and the matter was left to linger. Thus, the preliminary proceedings could not have been initiated by the second respondent when proceeding initiated by the first respondent for the very same amount on the very same allegation was not taken to the logical end. When the statutory appeal was pending before the appellate authority, the first respondent had dropped the proceedings. It is very crucial to note that from the final report of the first respondent it is seen that the proceedings was closed by the first respondent only on 24.01.2023. Thus, for all purposes, it is deemed that the first proceedings initiated by the first respondent pursuant to intimation dated 05.03.2021 had attained finality only on 23.01.2022 and on the said date, the appeal as against the second proceedings initiated by the second respondent was already pending before the appellate authority.
The appeal should not be treated to be as time barred, more particularly, when the appellants had responded to the first intimation dated 05.03.2021 and submitted their reply on 08.03.2021, and it was not considered and disposed of. Therefore, the issue as to whether the appellants did not notice the uploading of the Form GST DRC-01 dated 16.09.2021 from the portal or not has become an academic issue and in the peculiar facts and circumstances of the case, the appeal should be decided on merits and in accordance with law.
The appeal is restored to the file and number of the appellate authority with a direction to hear and dispose of the appeal on merits and in accordance with law - Petition allowed.
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2023 (4) TMI 1218
Sustainability of judgment of acquittal - Suppression of income - charge u/ss. 276(C)/277 of IT Act - accused had constructed a costly building at Modipara without disclosing the source of such investment and, thereby, the ITO reopened the assessment proceeding by doubting the correctness of the return so filed by the respondent-accused.
HELD THAT:- Admittedly, this is an appeal against acquittal, which was recorded by the learned trial Court way back in the year 1993 and law is very well settled that in case of acquittal, the presumption of innocence of accused as provided under law, is reinforced and unless there appears miscarriage of justice and compelling reasons, no judgment of acquittal can be interfered with after near about 30 years, more particularly in a case of this nature, where the offences with which the respondent accused was charged. In this case, the appellant was charged for offence u/s 276(C)/277 but offence u/s 276(C) of IT Act can be established by way of evidence that such persons willfully attempted in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act. Similarly, offence U/S.277 of IT Act can be established by way of evidence that such persons made a statement in any verification under this Act or under any rule made there under or delivered an account of statement, which is false, and which he either knows or believes it to be false or does not believe it to be true.
Penalty proceeding was initiated against the Respondent-accused for concealment of the income, but such penalty proceeding was, however, dropped by the Income Tax Authority vide order under Ext.B. This Court does not find any error with the finding of the learned trial Court with regard to the offence U/S. 276(C).
Charge for offence u/s 277 of IT Act, it is alleged that the Respondent accused had furnished wrong and false information by verifying those returns as true knowing or having reason to believe that the information contained in her returns was false.
There is no point by the Income Tax Authority to disbelieve the explanation offered by the respondent-accused for incurring loan which was in fact shown by the accused-respondent in her second return. Further, there is no evidence on record to show that the accused made deliberately or intentionally false statement. It is also found from the evidence on record that the accused-respondent had furnished first return by showing her income as Rs. 8,860/-, but when she was asked, she filed subsequent return showing a loan taken by her from one Mr. Gyan Singh Sandhu and in fact, when there is a provision for filing revised returns which was admitted by P.W. 1 in his evidence and, therefore, adding Rs. 25,000/- to Rs. 8,860/- in the second return would not certainly be considered as a false statement, which was verified by the respondent accused.
On analysis of the evidence on record and scrutinizing the impugned order in this case, this Court does not find any error apparent with the impugned order directing acquittal of respondent-accused warranting any interference by this Court.
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2023 (4) TMI 1217
Issues involved:
The issues involved in the judgment are related to seeking ex-post facto approval for Foreign Direct Investment (FDI) received from foreign companies, rejection of multiple applications by the Foreign Investment Promotion Board (FIPB) and the Department for Promotion of Industry and Internal Trade (DPIIT), communication of reasons for rejection, and the delay in considering the petitioner's application on merits.
Ex-post facto approval application:
The petitioner filed a petition under Article 226 of the Constitution of India seeking direction to grant ex-post facto approval for FDI received from two foreign companies. The petitioner allotted warrants to the foreign companies, which were converted into equity shares. Despite multiple applications for approval, the FIPB rejected them citing reasons related to the source of funds and evidence of investments from known sources of income by investors.
Change in authority and rejection of applications:
The FIPB was abolished, and the power to grant approval for foreign investment was transferred to the DPIIT. The petitioner filed a fourth application in accordance with the new Standard Operating Procedure (SOP) but faced rejection without reasons provided. The petitioner approached the court for communication of rejection reasons, which were later communicated, stating that the proposal was rejected due to a sub-judice matter with the Income Tax Appellate Tribunal (ITAT).
Judicial review and direction for fresh consideration:
The ITAT upheld the order passed by the Commissioner of Income Tax (Appeals), acknowledging the legitimacy of the investors and transactions. The petitioner sought relief from the court due to the DPIIT's hyper-technical approach in rejecting the proposal. The court directed the Competent Authority to consider the petitioner's application on merits, emphasizing that none of the previous rejection orders addressed the application's substance. The court instructed the petitioner to file an application through the National Single Window System (NSWS) for a fresh review within two weeks.
Delay and future course of action:
The court highlighted the prolonged delay in considering the petitioner's application, directing the Competent Authority to decide within three months. Failure to comply may result in the responsible officer's personal presence being called upon. The petition was disposed of, with the petitioner retaining the option to file for revival if the order is not implemented.
Separate Judgment:
No separate judgment was delivered by the judges in this case.
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