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Showing 181 to 200 of 1183 Records
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2021 (6) TMI 1003
Assessment of trust - depreciation allowable as application of income on charitable objects - Double deduction - HELD THAT:-Substantial questions of law that are raised in the above appeal were already decided in M/s.National College Council, Teppakulam, Tiruchirapalli [2021 (4) TMI 469 - MADRAS HIGH COURT] Substantial questions of law, which have been framed in these appeals, have been answered against the Revenue as relying on RAJASTHAN AND GUJARATI CHARITABLE FOUNDATION POONA [2017 (12) TMI 1067 - SUPREME COURT]. - Decided against revenue.
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2021 (6) TMI 1002
Dishonor of Cheque - proceeding under Section 482 of the Code of Criminal Procedure - adjudication of this Court is that if the applicant is not a signatory to the subject cheque then would a proceeding under Section 138 lie against him? - Section 141 of the NI Act - HELD THAT:- Two private individuals cannot be said to be "other association of individuals". Therefore, there is no question of invoking Section 141 of the NI Act against the appellant, as the liability is the individual liability (may be a joint liabilities), but cannot be said to be the offence committed by a company or by it corporate or firm or other associations of individuals. The appellant herein is neither a Director nor a partner in any firm who has issued the cheque. Therefore, even the appellant cannot be convicted with the aid of Section 141 of the NI Act. Therefore, the High Court has committed a grave error in not quashing the complaint against the appellant for the offence punishable under Section 138 r/w Section 141 of the NI Act. The criminal complaint filed against 8 the appellant for the offence punishable under Section 138 r/w Section 141 of the NI Act, therefore, can be said to be abuse of process of law and therefore the same is required to be quashed and set aside.
The impugned judgment and order dated 21.08.2019 passed by the High Court refusing to quash the criminal complaint against the appellant for the offence punishable under Section 138 read with Section 141 of the NI Act is hereby quashed and set aside - this Court is of the considered opinion that the proceedings under Section 138 of the Negotiable Instruments Act cannot be permitted to continue against the present applicant.
Appeal allowed - decided in favor of appellant.
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2021 (6) TMI 1001
Grant of Anticipatory Bail - defalcation in accounting of input tax credit - false and fabricated invoices so to take advantage of input credit, without supply of goods - HELD THAT:- This court has no reason to doubt the undertaking given by Sri Mathur that unless and until after receiving evidence and documents produced by the applicant, if satisfaction is arrived in terms of their being any suppression of fact or mis-statement or improper availment of input tax credit, no action is warranted to be taken to arrest the applicant.
Application dismissed.
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2021 (6) TMI 1000
Dishonor of Cheque - reliability or genuineness or otherwise of the allegations made in the F.I.R. - Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT:- The power of quashing of the criminal proceeding should be exercised very sparingly and with circumspection and that too in a rarest of rare case. The Court is not justified in embarking upon the inquiry as to the reliability or genuineness or otherwise of the allegations made in the F.I.R. or the complaint and that extraordinary or inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim and caprice - In the instant case, the applicants have placed their reliance on some extraneous/defence material.
In the instant case, respondent no. 2 has not disputed about filing of the complaints against deceased Selvakumar s/o Govindaraj for having committed the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. We have carefully gone through those five complaints which are part of the record. We are surprised to note that the allegations have been made against deceased Selvakumar alone with the specific contention that he is the proprietor of M/s. Shreejith Traders and in that capacity, he has issued the cheques for the balance amount as referred in the present F.I.R. - In the case of State of Haryana and Others v. Bhajan Lal and Others, [1990 (11) TMI 386 - SUPREME COURT], in para 102, the Supreme Court has given the categories of cases by way of illustrations wherein such quashing power under Section 482 of Cr.P.C. could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice.
The Supreme Court has considered the intention of cheating right from the inception and further held that the offence of cheating prima facie made out and no ground to quash the F.I.R. Thus, we find that the facts and circumstances of the said case cannot be made applicable to the facts and circumstances of the present case - the F.I.R. lodged by respondent no. 2 is nothing but an abuse of the process of the court and the same is necessary to be quashed and set aside in the interest of justice.
The criminal application is allowed.
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2021 (6) TMI 999
Maintainability - requirement with the pre-deposit or security - restraint on Respondent from making coercive recovery in relation to the subject matter of the petition - bone of contention raised by petitioner is that the Tribunal could not have taken into consideration the turnover of the petitioner for both the accounting years for the purpose of determining the amount of pre-deposit - Section 67 of the Gujarat Value Added Tax Act, 2003 - HELD THAT:- From the bare reading of the subsection (4) of Section 73, it clearly transpires that an Appeal before the Appellate Authority against the order of assessment would not be ordinarily entertained unless such an appeal is accompanied by satisfactory proof of payment of the tax in respect of which an appeal has been preferred. Of course, the Appellate authority may if it deems fit for the reasons to be recorded in writing entertain the Appeal by granting relaxation in payment of tax in respect of which the Appeal is preferred as mentioned therein.
The petitioner has challenged the order passed by the Tribunal directing it to pay 15% of the tax dues instead of 25% as directed by the First Appellate Authority. Apart from the fact that the First Appellate Authority had exercised the discretion in favour of the petitioner as contemplated under Section 73(4) of the GVAT Act by directing the petitioner to make payment of 25% of the tax dues instead of entire tax dues, for entertaining the Appeal, however the first appellate authority dismissed the Appeals on account of non-payment of the said pre-deposit amount, the Tribunal also passed the impugned order exercising its discretion by granting stay against the recovery of tax dues by directing the petitioner to pay 15% instead of 25% of the tax dues, while admitting the Second Appeals. Such an order of the Tribunal being interim and discretionary in nature, no statutory or legal right of the petitioner could be said to have been infringed, which would warrant interference of this Court under Article 226 of the Constitution of India.
It is well settled position of law that the High Court will ordinarily not entertain the petition under Article 226 of the Constitution of India, involving recovery of taxes, cess, fees or other types of public money. It cannot be gainsaid that any stay of an action initiated by the State or its authorities for the recovery of taxes etc. would have serious implication on the authorities in discharging their constitutional and legal obligations - The Tribunal has not committed an error in taking into consideration the turnover of sales and purchase of the petitioner, while passing the impugned order. It transpires that the details of sales and purchase of the petitioner were taken into consideration by the Tribunal with a view to ascertain the financial position of the petitioner. The Tribunal has considered the relevant aspects namely the financial position of the petitioner and has exercised its discretion to the extent of granting the stay against the recovery of the dues by directing the petitioner to deposit 15% of the tax dues instead of 25% as directed by the first Appellate Authority.
Petition dismissed.
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2021 (6) TMI 998
Violation of principles of natural justice - validity of assessment order - effective opportunity of personal hearing of the assessee - HELD THAT:- No time was granted by the authority and it is understood by the learned counsel appearing for the petitioner that the petitioner and the respondent officer were in touch telephonically with the further requirements that were sought for by the Assessing Officer to complete the assessment - The consultant of the petitioner was affected by COVID-19, as a result that the petitioner was unable to procure and produce the details sought for by the officer. In support of this submission, medical records have been filed at page Nos.58 & 59 of the typed-set. This documents are not in dispute. The impugned order has come to be passed on 30.03.2021 without affording an opportunity of personal hearing.
This is an assessment which, in terms of Section 27 of the Act, which requires an effective opportunity of personal hearing of the assessee. Courts have consistently interpreted the phrase 'effective opportunity' to mean and include an opportunity of personal hearing as well. In this case, since admittedly the petitioner has not been heard in person, the impugned order has been passed in violation of principles of natural justice and without affording adequate opportunity of personal hearing to put forth its case - petition allowed.
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2021 (6) TMI 997
Recovery proceedings - Attachment of property - ownership over the property in respect of which the petitioner is now seeking to exercise an exclusive right as an owner - case of the petitioner is that the property in question which has been attached by the impugned notice dated 22.03.2007 was transferred in his favour under a Family Settlement Deed - as submitted that the petitioner is not only in possession of the property but is also receiving rents from the tenants and therefore the question of attaching the property under the provisions of Section 226(3) of the Income Tax Act, 1961 does not arise - HELD THAT:- As per section 281 of the Income Tax Act, 1961 where, during the pendency of any proceeding under the Act, or after completion thereof, before service of notice under Rule 2 of the Second Schedule, any assessee creates any charge of his assets in favour of any other person or part of the possession by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever, such charge or transfer is void as against any claim in respect of any tax or any other sum payable by an assessee as a result of completion of the said proceedings or otherwise.
Since Section 158 BD of the Income Tax Act, 1961, proceedings were pending for the Block Assessment Period from 01.04.1988 to 15.12.1998, all transfers are void under Section 281 of the Income Tax Act, 1961.
In the facts of the case what is evident is that, the so-called transfer of undivided share in the land by the two brothers namely the paternal uncles of the petitioner in favour of the petitioner’s father has not been proved. Such transfer would been contrary to Section 281 inasmuch as notice under Section 158BD had been initiated against Late Milapchand Dadha and Sons (HUF) as early as 09.07.2001.
The so-called family arrangement pursuant to which transfers were allegedly affected are to be declared as void. As far as, the arrears of tax from M/s.Dadha Estates (P) Ltd is concerned, it is not clear on what basis the Income Tax Department had issued the impugned notice inasmuch as the said company is not the owner of the property.
Encumbrance Certificate dated 20.02.2009 filed along with the typed set of papers seems to indicate that the same property is under a charge in favour of Andhra Bank. M/s.Dadha Brothers Ltd and the petitioner’s father are shown to be party to the transactions and defaulted and proceedings were initiated before the Debt Recovery Tribunal, Hyderabad in O.A.No.146 of 1996 by the lending bank and they were default of ₹ 82,58,660/- and that a Recovery Certificate dated 10.04.2002 had been issued.
These factors raises serious doubt as to the ownership over the property in respect of which the petitioner is now seeking to exercise an exclusive right as an owner. There are several disputed questions of facts which remain unanswered and there it cannot be unravelled in the course of a summary proceedings under Article 226 of the Constitution of India.
The petitioner has to therefore necessarily approach a civil court in accordance with law to establish his rights, if any, over the property.
Petitioner is fighting a proxy battle for and on behalf of the Coparcenors Milapchand Dadha and Sons (HUF) of which his father and his paternal uncles were Coparcenors and by virtue of his birth in the family, the petitioner alone became a Coparcenor.
No reasons to interfere with the proceedings initiated by the respondent/Income Tax Department inasmuch as not only the late Milapchand Dadha and Sons (HUF) is in arrears of tax to the Income Tax Department but also the said company which had put the construction of the Dadha Complex, at New No.365, Mint Street, Sowcarpet, Chennai-600 079 was in arrears of tax. That apart, there is Recovery Certificate issued for the same property in favour of Andhra Bank in O.A.No.146 of 1996.
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2021 (6) TMI 996
Dishonor of Cheque - acquittal of the accused - insufficiency of funds - cross-examination of appellant - wrong interpretation adopted by the learned Magistrate - rebuttal of presumptions - Section 142 of the Negotiable Instruments Act - HELD THAT:- The answers given by the accused in reply to questions under Section 313 of the Cr.P.C., are not per se evidence; they are not on oath; the prosecution does not get opportunity to verify the correctness of such statements, unless the accused takes oath and enters the box under Section 315 of the Cr.P.C., they do not get opportunity to cross examine. Here the counsel for the first respondent did not cross examine the appellant, when he took oath and gave evidence as PW1. Secondly, no evidence is tendered by the first respondent in support of his version that the cheque was given only in consideration of ₹ 50,000/-.
The learned Magistrate has gone estray in acquitting the first respondent. Having regard to the circumstances he should not have been acquitted. After having admitted that the Ext. P1 cheque was issued by him, in the absence of a plausible and satisfactory explanation, the trial court ought to have drawn the presumptions under Sections 118 and 139 of the Act. The court went wrong in taking the statement given by first respondent under Section 313 of the Cr.P.C. as gospel truth and acquitting him from liability. That finding requires interference in appeal.
The first respondent is found guilty and convicted under Section 138 of the N.I. Act and sentenced to pay a fine of ₹ 2,50,000/- in default to undergo simple imprisonment for six months. When realised, the amount shall be paid as compensation to the appellant - Appeal allowed - decided in favor of appellant.
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2021 (6) TMI 995
Dishonor of Cheque - acquittal of the accused - legally enforceable liability or not - rebuttal of presumption - Sections 118 and 139 of the Act - HELD THAT:- It is trite that merely for the reason that the accused had admitted his signature on a negotiable instrument, its execution cannot be assumed. In order to draw the presumptions under Sections 118 and 139 of the Act, either the execution of the cheque should be admitted or it has to be proved that it was executed and issued in discharge of a legally enforceable liability. Here the first respondent does not admit the execution of the cheque.
A perusal of Ext. P9 shows that the actual consideration of the vehicle was ₹ 33,900/-. It is evident from Ext. P10 also. The margin money was ₹ 6,800/-. The loan amount, that is the amount actually lent by the appellant, was ₹ 27,100/-. So the total amount found payable by the first respondent was ₹ 39,295/- which includes FC amount, may be financial credit amount, of ₹ 12,195/-. The first respondent was liable to pay a total amount of ₹ 39,295/- in 36 instalments at the rate of ₹ 1092/-. The documents produced by the parties indicate that the first respondent was never regular in repayment of the amount. However, at least in alternate months he has paid amounts. Till 17.07.2007, though intermittently, he paid an amount of ₹ 16,433/-, which includes the defaulted instalment interest. But the last remittance has not been reckoned by the appellant. Secondly, ₹ 12,195/- shown payable by the first respondent includes interest for the entire period of 36 months, during the period of the entire hire purchase agreement.
There is substance in the finding of the trial court that it was not supported by consideration and therefore the appellant is not entitled to draw the presumptions under Sections 118 and 139 of the Act - it is obvious that sufficient reasons are not made out by the appellant to interfere with the judgment under attack - Appeal dismissed.
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2021 (6) TMI 994
Dishonor of Cheque - insufficiency of funds - acquittal of the accused - rebuttal of presumptions - Sections 118 and 139 of Negotiable Act - HELD THAT:- Exts. D5 and D6 were highlighted by the respondent to indicate the prevaricating stands taken by the appellant before the trial court and the civil court. When examined as PW1 before the trial court, the appellant stated that the Ext. P1 was brought prepared and signed before him. But before the civil court he said that the entire entries in Ext. P1 cheque were inserted before him. So, on this aspect also the appellant has taken different stands. In the circumstances, the trial court cannot be found fault with for disbelieving such a version
The 1st respondent has no case that he had any monetary transaction with the appellant, but has stated specifically in Ext. D1, that the Ext. P1 was handed over to Surendran without incorporating the name of the payee and putting the date and that, Surendran had facilitated it to misuse the same. The presumptions under Sections 118 and 139 of the Act can be drawn in favour of the complainant only if the execution of the cheque is admitted or proved. Here, the 1st respondent has denied its execution and has given his own version as to how the document had come into existence. Exts. D2 and D3 documents have to be appreciated in this context. Admittedly the 1st respondent and DW1 had some vehicle deal, they jointly owned a Tempo Traveller and an agreement like Ext. D2 was executed while they had parted company. DW1 also admitted that an amount of ₹ 1,92,500/- was due to him, while executing such an agreement two cheques drawn on Punjab National Bank were handed over to him, for ₹ 1,92,000/-. It is the common case that the transaction between DW1 and the 1st respondent has come to an end.
The appellant has failed to make out an offence under Section 138 of the Act. Thus the impugned judgment does not warrant interference in appeal - Appeal dismissed.
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2021 (6) TMI 993
Disallowance u/s 14A read with Rule 8D - HELD THAT:- It is not in dispute that the question of law framed by this appeal has already been considered by Division Bench of this Court in Commissioner of Income-Tax and another vs. Sabari Enterprises [2007 (7) TMI 169 - KARNATAKA HIGH COURT]
As perused the judgment rendered in the aforesaid case and we find that the reasons set out therein to disallow the contention of the revenue are just and proper and do not call for any reconsideration. - Decided in favour of assessee.
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2021 (6) TMI 992
Principles of natural justice - ex-parte judgement - suit for recovery - pronote and receipt was stated to have been returned to the respondent at the time of compromise - Order 9 Rule 13 read with Section 151 CPC - notice of the application under Order 21 Rule 66 CPC - HELD THAT:- Respondent had duly proved another pronote and receipt dated 06.06.2014 in favour of Amardeep Kaur, the original of which was produced before the said Court. The said pronote and receipt was stated to have been returned to the respondent at the time of compromise by Amardeep Kaur.
Respondent has indeed successfully proved that he had sufficient reason for not appearing before the trial Court as has been averred. Apprehension raised by learned counsel for the petitioner that such a finding would prejudicially affect the petitioner at the time of trial of the suit is unfounded, as it is abundantly clear that learned trial Court shall proceed to decide the matter on the basis of evidence to be led before it by the respective parties. Whether or not the present transaction was a part of compromise arrived at between the petitioner and the respondent, is clearly the subject matter of trial and shall be decided accordingly by the learned trial Court on the basis of evidence, which would be produced before it.
Petition dismissed.
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2021 (6) TMI 991
Dishonor of Cheque - Requirement to deposit of the amount as provided under Section 148 of Negotiable Instruments Act - HELD THAT:- In the instant case, the trial Court has Awarded fine of ₹ 1,80,00,000/- along with simple imprisonment for two years and at the same time, has Awarded compensation of ₹ 1,50,00,000/- by invoking Section 357 of the Criminal Procedure Code - The language of Section 138 of the Act provides for the punishment with imprisonment for a term which may be extended to two years or with fine, which may extend to twice the amount of the Cheque or with both. Therefore, the word used in Section 138 is "fine" and therefore, discretion is available to the Court under Section 148 to impose condition for preferring an Appeal to deposit minimum of 20% of the "fine" or "compensation" Awarded by the trial Court.
The Court is of the opinion that in a given facts of the case, where accused person is facing convictions in 9 complaints and in each of these complaints, accused has faced conviction, wherein fine is separately imposed and compensation is also separately imposed, therefore, considering the financial crunch that the accused will have to face in this trying time, the Court deems it fit to directed the accused to deposit 20% of compensation instead directing to deposit 20% of the fine imposed. The Court has also taken into consideration the submission made on behalf of the accused regarding financial inability to arrange for such huge deposits in these Appeals.
Considering the overall fact situation, where the accused person is ordered to pay fine of ₹ 1,80,00,000/- in one of the 9 complaints and similar amount ordered to be paid as fine over and above this, an amount of ₹ 1,50,00,000/- Awarded as compensation under Section 357 of the Criminal Procedure Code and what has been brought on the record of this case regarding decree issued by the Commercial Court in Commercial Civil Suit No. 43 of 2919 dated 09.12.2020 holding the plaintiff Company to entitle to recover ₹ 4,50,25,000/- with accrued rate of interest at the rate of 6% from 26.10.2012 till realization of the full amount, in the facts of this case, the Court does not deem it fit to enhance the amount of deposit to more than 20% of the compensation Awarded and hence, no interference on that count.
Application dismissed.
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2021 (6) TMI 990
Money Laundering - illegal diversion of funds - schedule offence - supply of Gold Bullion or there was only paper transaction - Section 33 of the Sale of Goods Act - HELD THAT:- In the case at hand, the picture is totally different. The criminal Court can independently come to a conclusion that the 22 fixed deposits were proceeds of crime and they were projected as untainted money from MJPL (A3) and Suresh Khatri (A4). The other distinguishing feature in this case is that, the total proceeds of crime is ₹ 318.75crores, out of which, the 22 fixed deposits represent only ₹ 143crores and for the balance amount which has gone into the kitty of MJPL (A3), they can be prosecuted as abettors of the offence of money laundering committed by KGPL (A1). Lastly, the order of the Adjudicating Authority in this case, has not attained finality and the same is pending before the Tribunal and therefore, on this ground too, the criminal prosecution cannot be quashed.
In a simple private complaint case, the Magistrate may not have any materials dehors the sworn statement of the complainant to take cognizance of the offences alleged in the complaint. In such cases, it will be desirable, if the Magistrate passes an order giving reasons for taking cognizance of the offence and issuing process. In this case, along with the complaint, the Enforcement Directorate has filed 56 documents and also the statements recorded under the PML Act, in support of the allegations in the complaint - The prosecution has to prove the offence, by adducing evidence and this opportunity has to be given to the prosecution in this case too.
The prosecution of MJPL (A3) and Suresh Khatri (A4) cannot be said to be unfounded - Petition dismissed.
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2021 (6) TMI 989
Jurisdiction - power of Adjudicating Authority to interfere before the quasi-judicial determination - locus standi to challenge the inclusion of DSKL in the CIRP - necessary party to application - due date to file EOI is a commercial decision or not.
Whether the Adjudicating Authority does not invest with the Jurisdiction to interfere before the quasi-judicial determination is made, under Section 31 of IBC? - HELD THAT:- In the present case, Adjudicating Authority, while deciding the Application I.A No. 1029 of 2020, has exercised the jurisdiction under Section 60 (5) (c), which empowers to decide “any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the Corporate Debtor or Corporate Person under this Code”. Thus, before approval of the Resolution Plan the Adjudicating Authority can entertain or dispose of the question of priorities or any question of law or facts, arising out of or in relation to CIRP or Liquidation proceedings - the argument of Ld. Counsel for Pankaj Joshi that the Adjudicating Authority has no jurisdiction to entertain and decide the Application cannot be agreed upon.
Whether GIACL did not have locus standi to challenge the inclusion of DSKL in the CIRP? - HELD THAT:- Admittedly, DSKL requested to submit EOI after one month of due date and the same was rejected in the 7thCoC meeting held on 03.04.2020 and the decision was communicated to the DSKL on 09.04.2020. After lapse of two months DSKL again made attempt to become a part of CIRP before that four eligible Applicants including GIACL were short listed as Prospective Resolution Applicants. Therefore, there was a competition between these four Prospective Resolution Applicants but the RP has tried to induct DSKL in the CIRP in violation of the provisions of Regulation 36-A (6) of the Regulations 2016 - We are unable to convince with the Ld. Counsel for DSKL and Pankaj Joshi that GIACL did not have the locus standi to challenge the inclusion of DSKL in the CIRP. Ld. Adjudicating Authority has rightly entertained the Application I.A No. 1029 of 2020 and decided the same.
Whether ‘DSKL’ was a necessary party to the Application I.A. No. 1029 of 2020? - HELD THAT:- DSKL has no vested right because, the right has already been extinguished when DSKL has failed to submit EOI till last date and subsequently, the request for submitting EOI after due date was also rejected by the CoC in view of Regulation 36-A of Regulations 2016. Therefore, DSKL has no right to contest the Application as in the Application the actions of RP& CoC are questioned - The question for the consideration before Adjudicating Authority was that, whether the actions of RP and CoC are justifiable in the present facts of this case - we are not convinced with the argument of Ld. Counsel for DSKL that the Ld. Adjudicating Authority has not given reasonable opportunity of hearing and thereby violated the principle of natural justice.
Whether to allow DSKL after due date to file EOI is a commercial decision? - HELD THAT:- In view of Regulation 30A, withdrawal was not permitted. In that context, Hon’ble Supreme Court held that this Regulation has to be read along with the main provision of Section 12A which contains no such stipulation. Therefore, it held that this stipulation can only be construed as directory depending on the facts of each case. It is not ruled, that Regulation 36–A is not in consonance with any of the provision of the IBC or Regulation 36-A is not mandatory in nature. Thus, this Judgment also does not support the case of DSKL. The second limb of argument, that the word “shall” has to be read as “may” since no consequence of noncompliance are provided, is not acceptable as Regulation 36-A (6) itself provides that EOI received after the time specified shall be rejected - to allow DSKL after due date at the instance of Pankaj Joshi to file EOI is not a commercial decision.
Pankaj Joshi has suppressed the fact that he himself has overturned the decision of 7thCoC meeting and permitted DSKL to submit its EOI. Pankaj Joshi also misguided the CoC that ‘he is not required to take express permission from the CoC to issue a request for Resolution Plan to an eligible Prospective Resolution Applicant’. This is not the position in this case the request for submission of EOI after due date was rejected by the CoC then there is no question to issue a request for resolution plan to DSKL - Pankaj Joshi in 09th CoC meeting canvassed the case of DSKL and when one of the CoC Members proposed to publish fresh Form ‘G’ then he suggested that this is impracticable and delayed the CIRP - the decision taken in 09th Meeting of the CoC was not transparent, fair and was under the influence of Pankaj Joshi.
Whether the adverse remarks in Para 54 of the impugned order are baseless and uncalled for? - HELD THAT:- Mr. Pankaj Joshi has failed to explain that his actions are bonafide. It is expected from a Resolution Professional that he must act in a fair and balanced manner without getting influenced by the conflicting interest of the parties. In the present case, Mr. Pankaj Joshi suppressed material facts and misguided the members of CoC to achieve the desired decision in favour of DSKL - the adverse remarks and observations made in the Para 54 of the impugned order are not baseless and uncalled for and on the other hand, for appreciating the materials on record and to decide the matter, such observations are necessary.
Appeal dismissed.
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2021 (6) TMI 988
Exemption u/s 11 - eligible for registration under section 12A - nature of activity of promotion of welfare and recreational activities of the police personnel - Charitable activity u/s 2(15) - Only objection is that the aims & objects of standing order No. 270 of Commissioner of police, Delhi clearly establish that the primary objective of the appellant club is to provide benefit to its members of Delhi police personnel only and not to public at large or general public and, therefore, it violates the provisions of section 2 (15) - HELD THAT:- In AP Police Welfare Case [1983 (3) TMI 19 - ANDHRA PRADESH HIGH COURT] held that insofar as public employment is concerned and in particular the government formed by, for and of the people is the employer, even it is to be taken in a restrictive sense, and the employer is the representative of the public or the people - in the ultimate analysis, it is the public that is the employer; qui facit per alium facit per se, and so, to the service rendered by the employees in the public employment, the beneficiaries are the public. On this test the court reached a conclusion that AP Police Welfare Association which is a charitable in its objects, as is quite apparent from the very objectives laid down under the rules framed thereunder, is a body that would constitute “a section of the public” and so, the fund founded for the benefit of such section should be treated as charitable in its object, attracting thereby the exemption from the exigibility to tax.
It is clear that the issue involved in this matter is no longer res Integra and is squarely covered by the judicial decisions for a long time. In the absence of any change in the facts or law holding the field, we find it difficult to take a different view or not to follow the binding precedent of the higher judicial fora.
We accordingly, following the same, hold that the appellant, the Delhi Police Welfare And Recreational Club Fund is charitable in its objects and is a body that constitutes a section of the public, and so, the fund founded for the benefit of such section should be treated as charitable in its objects, attracting thereby the exemption from the exigibility to tax. With this view of the matter, we set aside the impugned order passed by the ld. CIT(E) and hold that the appellant is eligible for registration under section 12 A of the Act and direct its registration thereunder accordingly. - Appeal of the assessee is allowed.
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2021 (6) TMI 987
Deduction u/s 10A - whether the expenditure incurred in foreign currency is required to be excluded from the export turnover or not when the assessee is exporting only software? - HELD THAT:- As decided in own case [2014 (1) TMI 1751 - ITAT BANGALORE] assessee is in the business of exporting computer software and therefore the expenses incurred in foreign exchange cannot be said to be one incurred by the assessee in connection with providing technical services outside India. The assessee does not claim exclusion of telecommunication charges or insurance attributable to the delivery of software outside India. The claim for exclusion from the export turnover is made by the assessee only in respect of expenses incurred in foreign currency in providing technical services outside India.
We however do not have the break-up of the item of expenditure incurred in foreign currency outside India. A copy of the agreement between the Assessee and Robert Bosch, Germany titled software project agreement (SPA) has been filed before us. We do not know as to whether the entire export turnover is in relation to this client alone or there were other clients for whom the Assessee rendered computer software development services. A perusal of the SPA filed before us shows that the Assessee agreed to carry out software development work for Robert Bosch Germany at Germany also. The terms of the agreement for rendering services on-site at clauses-5.2 to 5.2.6 of the agreement does not involve rendering of any technical services. The question as to whether the entire expenditure incurred in foreign exchange outside India relates to providing technical services outside India cannot be decided in the absence of the required information as stated above. If the claim of the Assessee that the entire expenditure incurred in foreign exchange outside India does not relate to providing technical services outside India, then the same cannot be excluded from the export turnover.
Whether the amount deducted from export turnover is also required to be deducted from total turnover or not? - Since this issue is related to computation of deduction u/s 10A, this issue also restored to the file of the Ld. CIT(A) with the direction to follow the decision rendered in the case of Tata Elixi Ltd. [2016 (3) TMI 460 - KARNATAKA HIGH COURT] and also decision rendered in the case of HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT].
Deduction of unrealized from the export proceeds, while computing deduction u/s 10A on the ground that the same has not been realised within a period of 6 months - Ld. A.R. invited our attention to Master Circular No.9/2008-09 dated 1st July, 2008 issued by RBI. The Ld. A.R. submitted that the RBI has granted “general permission” to realize the export proceeds within a period of 12 months from the date of export on or after 1st September, 2004. We notice that the Ld. CIT(A) has not adjudicated this aspect. Accordingly, we restore this issue also to his file for examining the same afresh by considering the circular issued by RBI.
Claim of foreign tax credit - Since this is a legal ground and all facts are available on record, we admit the same. Since this issue requires examination at the end of AO, we restore this issue to the file of the A.O. for examining the claim of the assessee in accordance with law.
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2021 (6) TMI 986
Revision u/s 263 - period of limitation - Whether assessee is ‘an agent’ of the state government of Maharashtra? - HELD THAT:- Only exception for extending the stipulated time period for giving effect to the order passed by the Pr. CIT u/s 263 can be found in the ‘first proviso’ to sub-section (5) of Sec. 153 of the Act, which contemplates, that in a case effect is to be inter alia given by the A.O to an order passed under Sec. 263, wholly or partly, otherwise than by making a fresh assessment or reassessment, the period therein specified can be extended in a case where a request is made by the A.O to the Pr. CIT or CIT, that for reasons beyond his control, it is not possible for him to give effect to such order within the stipulated time period, pursuant whereto, on satisfaction of the Pr. CIT or CIT an additional period of six months to give effect to the order may be allowed. However, as in the case before us the Pr. CIT had directed the A.O to frame a de novo assessment, therefore, the ‘first proviso’ to sub-section (5) of Sec. 153 and the extension therein contemplated would not be applicable.
As such, in the case before us the de novo assessment as had been directed by the Pr. CIT vide his order passed u/s 263, dated 31.03.2021, without any choice, has to be framed by the A.O within a period of twelve months from the end of the financial year in which order u/s 263 was passed by the Pr. CIT. We find, that the legislature in all its wisdom had expressly vide ‘Explanation 1’ to Sec. 153 of the Act carved out certain circumstances wherein the period involved is to be excluded for computing the period of limitation.
Although, we find, that as per clause (ii) of “Explanation 1” to Sec. 153 of the Act, the period during which the assessment proceedings are stayed by an order or injunction of any court, the period therein involved is to be excluded for the purpose of computing the limitation for framing the assessment, reassessment and re-computation as envisaged in the said statutory provision, however, no such exclusion has been carved out by the legislature in all its wisdom in a case where the assessment proceedings are stayed by an order passed by the Tribunal. Accordingly, it is in the backdrop of the aforesaid mandate of law that we shall herein deal with the request of the assessee for restraining the A.O from framing the de novo assessment in pursuance to the order passed by the Pr. CIT u/s 263, dated 31.03.2021.
Adverting to the claim of the assessee that it has a good case on merits, without expressing any opinion, we prima facie find substantial force in the same, for the reason, that the issue involved in the present appeal, viz. as to whether or not the assessee is ‘an agent’ of the state government of Maharashtra, as claimed by the ld. A.R is squarely covered by the respective orders passed by the Tribunal in the assessee’s own case, wherein the respective orders passed by the Pr. CIT-15, Mumbai u/s 263 of the Act, involving identical facts are stated to have been set-aside by the Tribunal.
Though, we remain conscious of the fact that circumscribed by the prescribed time limitation for framing of an assessment pursuant to an order passed by the Pr. CIT u/s 263 of the Act, there is an innate limitation on staying of the assessment proceedings, but then, at the same time we cannot also remain oblivious of the fact that in case the aforesaid request of the assessee is rejected at the threshold, the same may result to multiplicity of litigation which could otherwise have been avoided. We, thus, adopting a cautious but not a pedantic approach, though, refrain from restraining the A.O from proceeding with the assessment proceedings, however, at the same time, in all fairness herein direct him not to pass the assessment order giving effect to the order passed by the Pr. CIT u/s 263 for a period of three months from the date of this order or till the disposal of the appeal filed by the assessee before us i.e against the order passed by the Pr. CIT u/s 263, dated 12.03.2021, whichever is earlier.
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2021 (6) TMI 985
Penalty u/s 271(1)(c) - defect in the show causer notice issued under section 274 - non specification of charge - excess claim of deduction u/s 36(1)(viia) in respect of provision for bad and doubtful debt relating to rural branches as AO observed that certain branches in respect of which the assessee had claimed the deduction, do not qualify as rural branches - HELD THAT:- AO has issued a generic show cause notice in a printed form without mentioning the specific charge by striking off the inapplicable words. Thus, the show cause notice issued under section 274 r.w.s section 271(1)(c) is a vague and omnibus notice revealing complete non-application of mind by the assessing officer. Thus, as relying on SMT. KAUSHALYA AND OTHERS [1995 (1) TMI 25 - BOMBAY HIGH COURT] penalty order passed under section 271(1)(c) of the Act, has to be declared as invalid.
Thus respectfully following the Full Bench decision of Mohammed Farhan A Shaikh vs DCIT [2021 (3) TMI 608 - BOMBAY HIGH COURT] we hold the impugned order passed under section 271(1)(c) of the Act as invalid and without jurisdiction due to defect in the show cause notice issued under section 274 r.w.s. 271(1)(c) of the Act. Thus, the penalty order passed in pursuance thereto, being vitiated, has to be quashed. Accordingly, we uphold the decision of learned Commissioner (Appeals) in deleting the penalty imposed under section 271(1)(c) - Decided in favour of assessee.
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2021 (6) TMI 984
Revision u/s 263 - period of limitation - case of the assessee was selected for limited scrutiny under CASS for specific issues viz. (i) contract receipts/fees mismatch; (ii) sundry creditors; and (iii) sales turnover mismatch - as submitted by assesee Pr. CIT had blatantly traversed beyond the limited scope of jurisdiction vested with him u/s 263 - HELD THAT:- As in the case before us the Pr. CIT had directed the A.O to frame a de novo assessment, therefore, the ‘first proviso‘ to sub-section (5) of Sec. 153 and the extension therein contemplated would not be applicable. As such, in the case before us the de novo assessment as directed by the Pr. CIT vide his order passed u/s 263, dated 31.03.2021, without any choice, has to be framed by the A.O within a period of twelve months from the end of the financial year in which the order u/s 263 was passed by the Pr. CIT. We find, that the legislature in all its wisdom had expressly vide ‘Explanation 1‘ to Sec. 153 of the Act carved out certain circumstances wherein the period involved is to be excluded for computing the period of limitation.
Although, we find, that as per clause (ii) of ―Explanation 1’ to Sec. 153 of the Act, the period during which the assessment proceedings are stayed by an order or injunction of any court, the period therein involved is to be excluded for the purpose of computing the limitation for framing the assessment, reassessment and re-computation as envisaged in the said statutory provision, however, no such exclusion has been carved out by the legislature in all its wisdom in a case where the assessment proceedings are stayed by an order passed by the Tribunal. Accordingly, it is in the backdrop of the aforesaid mandate of law that we shall herein deal with the request of the assessee for restraining the A.O from framing the de novo assessment in pursuance to the order passed by the Pr. CIT u/s 263, dated 31.03.2021.
Adverting to the claim of the assessee that it has a good case on merits, without expressing any opinion, we prima facie find substantial force in the same, for the reason, that the contention of the assesee is supported by the judgment of India Advantage Fund–VII [2017 (2) TMI 722 - KARNATAKA HIGH COURT] wherein it was observed that once the trust deed provided that benefits amongst the beneficiaries were to be shared proportionate to their investments, then, the shares of the beneficiaries were to be held as determinate.
We remain conscious of the fact that circumscribed by the prescribed time limitation for framing of an assessment pursuant to an order passed by the Pr. CIT u/s 263 of the Act, there is an innate limitation on staying of the assessment proceedings, but then, at the same time we cannot also remain oblivious of the fact that in case the aforesaid request of the assessee is rejected at the threshold, then, the same may result to multiplicity of litigation which could have been otherwise avoided. We, thus, adopting a cautious but not a pedantic approach, though, refrain from restraining the A.O from proceeding with the assessment proceedings, however, at the same time, in all fairness herein direct him not to pass the assessment order giving effect to the order passed by the Pr. CIT u/s 263 of the Act, dated 31.03.2021 for a period of three months from the date of this order or till the disposal of the appeal filed by the assessee before us i.e against the order passed by the Pr. CIT u/s 263, dated 31.03.2021, whichever is earlier. Application filed by the assessee is allowed
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