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2011 (11) TMI 871
Issues involved: Appeal against order of Ld. Commissioner of Income Tax (Appeals) allowing exemption u/s 10(23C)(vi) of IT Act, 1961 and addition of &8377; 9,55,455/-.
Exemption u/s 10(23C)(vi): The Ld. Commissioner of Income Tax (Appeals) granted exemption u/s 10(23C)(vi) for Assessment Year 2008-09 based on the order of Ld. Chief Commissioner of Income Tax. The entire surplus was deemed exempt, leading to deletion of the addition made by the Assessing Officer. The Revenue appealed against this decision.
Grounds of appeal: The Revenue contended that the exemption u/s 10(23C)(vi) should not have been allowed as an appeal was filed in the Supreme Court. The Ld. Commissioner of Income Tax (Appeals) limited the issue to whether the surplus generated by the assessee is liable for exemption u/s 10(23C)(vi) or not.
Arguments: The assessee's counsel highlighted that the Ld. CCIT had granted approval u/s 10(23C)(vi) which was produced during appellate proceedings, leading to the appeal being allowed. The department filed the appeal to keep the matter alive, but the Tribunal found no infirmity in the Ld. Commissioner of Income Tax (Appeals)'s order and upheld the decision.
Conclusion: The Tribunal dismissed the appeal filed by the Revenue, affirming the decision of the Ld. Commissioner of Income Tax (Appeals) to grant exemption u/s 10(23C)(vi) and delete the addition of &8377; 9,55,455/-.
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2011 (11) TMI 870
Issues involved:
Assessment of total income based on cash deposits as income from undisclosed sources for the assessment year 2011-12.
Detailed Analysis:
1. The appellant filed an appeal against the order of the ld. Commissioner of Income Tax (Appeals) regarding the assessment year 2011-12, where the Assessing Officer assessed the total income at &8377;2,19,20,740/- by adding cash deposits of &8377;2,17,49,200/- as income from undisclosed sources. The ld. CIT(A) granted partial relief, sustaining &8377;91,34,664/- on estimate basis.
2. The appellant contended that the cash deposits were made to facilitate the sale of timber in a relative's business, receiving commission without having income to the extent assessed. The appellant provided bank statements and confirmation letters to support the claim.
3. The ld. CIT(A) observed that the appellant's submissions indicated a pattern where cheques were issued and discounted by recipients to generate cash flow, which was then returned to the appellant for deposit. However, the effective interest rate calculated was unreasonably high, raising doubts about the commercial viability of the transactions.
4. The Tribunal considered the evidence and adopted a different approach, reducing the estimated effective interest rate to 26% of the gross cash deposited. Consequently, &8377;56,54,792/- was sustained as income, granting relief of &8377;1,60,94,408/- to the appellant.
5. The Tribunal found the ld. CIT(A)'s estimation of the effective interest rate to be on the higher side, leading to a revised calculation and partial allowance of the appeal.
6. The judgment was pronounced on 18th November 2022 at Chennai, with the appeal being partly allowed.
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2011 (11) TMI 869
Issues Involved: Appeal against the order of ld. CIT(A)-II, Agra for the Assessment Year 2007-08 regarding the addition of capital subsidy u/s 43(1) of the I.T. Act.
Capital Subsidy Addition Issue:
The Revenue appealed against the deletion of the addition of Rs.7,50,000/- made by the Assessing Officer on account of capital subsidy received by the assessee. The A.O. contended that the capital subsidy should be deducted from the cost of fixed assets, affecting the depreciation calculation. However, the ld. CIT(A) relied on the decision of the Hon'ble Supreme Court in CIT vs. P.J. Chemicals (1994) 210 ITR 830 to argue that section 43(1) does not apply in this case. The Tribunal agreed with the ld. CIT(A) that the capital subsidy need not be reduced, as per the Supreme Court judgment, and upheld the deletion of the addition.
General Grounds Issue:
The Tribunal did not adjudicate on the general nature of ground nos. 2 & 3 raised by the Revenue, as they did not require specific consideration.
In conclusion, the appeal of the Revenue in ITA No.236/Agr/2010 was dismissed by the Appellate Tribunal ITAT Agra, upholding the decision of the ld. CIT(A) to delete the addition of capital subsidy based on the interpretation of section 43(1) of the I.T. Act.
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2011 (11) TMI 868
Issues involved:
The issues involved in the judgment are:
1. Deduction of impact fee paid to Surat Municipal Corporation under Section 37 of the Act.
2. Disallowance of interest on utilization of interest-bearing funds for interest-free loans under Sec. 40A(2)(b) of the Act.
Issue 1: Deduction of impact fee:
The Revenue appealed against the deletion of the addition of Rs. 13,02,923/- for impact fee paid to Surat Municipal Corporation. The assessee argued that the payment was for contravening the plan sanctioned for its construction projects and was a compensatory payment under the Gujarat Regulation of Unauthorised Development Act, 2001. The CIT (A) deleted the addition, citing precedents where similar payments were allowed as deductions. The Tribunal upheld the CIT (A)'s decision, emphasizing that the payment was compensatory and not a penalty for infraction of law.
Issue 2: Disallowance of interest on unsecured loans:
The Revenue challenged the deletion of the disallowance of interest on unsecured loans. The assessee contended that the interest was paid only on opening balances of loans, and there was no diversion of interest-bearing funds for non-business purposes. The CIT (A) found that the AO did not consider all relevant facts and failed to establish a direct nexus between interest-bearing loans and interest-free advances. As the Revenue did not contest this finding, the Tribunal confirmed the CIT (A)'s decision to delete the addition of Rs. 3,50,960/-.
In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the CIT (A)'s decisions on both issues.
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2011 (11) TMI 867
Issues Involved:
1. Whether in every "formal arrest" there is "custody" as embodied in Article 22(2) of the Constitution of India and Section 57 of the Code of Criminal Procedure.
2. Whether the detention of the accused beyond 24 hours from the time of formal arrest without production before a Magistrate is illegal.
3. Whether a Magistrate can pass an order authorizing the detention of the accused either in police custody or judicial custody after the initial 24-hour period.
4. Whether a subsequent valid remand order can cure the alleged illegal detention of the accused in police custody beyond 24 hours.
Detailed Analysis:
1. Formal Arrest and Custody:
The court examined whether a "formal arrest" in prison equates to "custody" as per Article 22(2) of the Constitution and Section 57 of the CrPC. The court clarified that while every arrest involves custody, not every custody involves arrest. A formal arrest in prison does not bring the accused into the physical custody of the police; instead, the accused remains in judicial custody. This distinction is crucial because it affects the requirement to produce the accused before a Magistrate within 24 hours.
2. Detention Beyond 24 Hours:
The court addressed whether the detention of the accused beyond 24 hours from the time of formal arrest without production before a Magistrate is illegal. It was held that since formal arrest does not bring the accused into police custody, the production of the accused within 24 hours is not mandated. The court noted practical difficulties in producing the accused within 24 hours when formal arrest is made in prison, emphasizing that the accused remains in judicial custody and not police custody during this period.
3. Magistrate's Authority Post 24-Hour Period:
The court examined whether a Magistrate can authorize the detention of the accused either in police custody or judicial custody after the initial 24-hour period. It was held that a Magistrate can pass a valid remand order prospectively, even if the accused was in illegal detention for some time. The court relied on precedents, including the Supreme Court's ruling in Sadhwi Pragyna Singh Thakur vs. State of Maharashtra, which clarified that an accused cannot seek liberty on the ground of non-compliance with Article 22(2) once remanded by a Magistrate.
4. Curing Illegal Detention:
The court considered whether a subsequent valid remand order can cure the alleged illegal detention of the accused in police custody beyond 24 hours. It was held that while past illegal detention cannot be cured, a Magistrate can still pass a valid remand order prospectively. The court distinguished the present case from Manoj vs. State of Madhya Pradesh, emphasizing that the latter involved a failure to produce the accused before a Magistrate at all, whereas in the present case, the accused was produced albeit later.
Conclusion:
The court concluded that:
1. Formal arrest in prison does not equate to police custody.
2. There is no legal requirement to produce the accused within 24 hours of formal arrest in prison.
3. A Magistrate can pass a valid remand order prospectively.
4. Past illegal detention does not invalidate a subsequent valid remand order.
The court set aside the impugned order of the Judicial Magistrate and remitted the matter back for passing appropriate orders under Section 167(1) of the CrPC. The respondents were directed to surrender before the Magistrate, failing which non-bailable warrants would be issued.
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2011 (11) TMI 866
Issues Involved:
1. Whether the dishonor of a post-dated cheque given as security constitutes an offense u/s 138 of the Negotiable Instruments Act.
2. Whether suppression of material facts in the complaint warrants quashing of the complaint.
Summary:
Issue 1: Dishonor of Post-Dated Cheque Given as Security
The petitioners sought to quash Criminal Case No. 2088 of 2002, pending in the Court of learned JMFC, Surat, for the offense u/s 138 of the Negotiable Instruments Act. The petitioners argued that the cheque in question was given as security and not for an ascertained debt or liability, thus not constituting an offense u/s 138. They relied on Supreme Court decisions in M.S. Narayana Menon @ Mani v. State of Kerala and Sudhir Kumar Bhalla v. Jagdish Chand & Others. However, the court noted that the cheque was issued under an MOU dated 11.10.2001, on the settlement of accounts, and was for an ascertained amount of Rs. 3 lacs. The court held that even if the cheque was post-dated and given as security, its dishonor on grounds of "insufficient fund" and non-payment despite statutory notice u/s 138 constitutes an offense. The court emphasized the presumption u/s 139 of the N.I. Act that the cheque was issued for discharge of debt or liability, citing M/s. M.M.T.C Ltd. v. M/s. Medchl Chemicals and Pharma (P) Ltd.
Issue 2: Suppression of Material Facts
The petitioners contended that the complaint should be quashed due to suppression of the MOU dated 11.10.2001. The court dismissed this argument, stating that non-mentioning of the MOU in the complaint is not fatal. The essential facts required for an offense u/s 138 were sufficiently stated in the complaint, including issuance, deposit, dishonor of the cheque, service of statutory notice, and non-payment. The court found no merit in the argument for quashing the complaint based on suppression of material facts, referencing S.P. Chegalvaraya Naidu (dead) by L.rs v. Jaganath (dead) by Lr.s.
Conclusion:
The court dismissed the application to quash the complaint, ruling that a case u/s 138 of the N.I. Act is made out. The presumption u/s 139 supports the complainant's case, and the suppression argument was insufficient to warrant quashing. The ad-interim relief granted earlier was vacated.
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2011 (11) TMI 865
Issues involved: Appeal by Revenue against deletion of addition u/s 198 of IT Act.
Summary:
1. Issue 1 - Deletion of addition u/s 198 of IT Act:
The case involved an appeal by the Revenue against the deletion of an addition of Rs. 14,89,650 made by the Assessing Officer (AO) u/s 198 of the IT Act. The assessee derived income from a transportation business through hired vehicles for Monnet Group goods, with two billing systems: "to be billed" and "to pay." The AO deemed the TDS amount of Rs. 14,89,650 as income of the assessee u/s 198. However, the CIT(A) allowed the appeal, stating that the addition was contrary to the provisions of the Act and hence deleted. The Revenue appealed against this decision.
2. Decision:
The Appellate Tribunal held that s. 198 is a machinery provision not related to computation or chargeability of income. Citing the case of Smt. Varsha G. Salunke, it was noted that without charging provisions to tax such deemed income, s. 198 cannot create a charge on certain receipts. The Tribunal also considered the AO's acceptance of the assessee's claim in earlier and later years, as well as refraining from making additions in reassessment proceedings. In light of these facts and the principle of consistency, the Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete the addition u/s 198 of the IT Act.
3. Conclusion:
The appeal filed by the Revenue against the deletion of the addition u/s 198 of the IT Act was dismissed by the Appellate Tribunal, maintaining the decision of the CIT(A) in favor of the assessee.
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2011 (11) TMI 864
Petition for quashing/setting aside initiation of suo motu proceedings by Competent Authority - gross misconduct on the part of the Notary - without application of mind - The State Government has initiated a suo motu proceedings against the petitioner for authenticating two marriage affidavits evidencing solemnization of marriage without verifying the records regarding the age of the girl which constitute gross misconduct/unbecoming on the part of the Notary. The petitioner has been further noticed to show cause within 14 days from the date of receipt of the same as to why action as prescribed under law shall not be taken against him for the aforesaid misconduct. Hence, the present writ petition.
HELD THAT:- In the case at hand, it is nobody's case that the show cause notice has been issued by an authority without having jurisdiction to issue such notice. Moreover, the stand taken by the petitioner in this writ petition is almost similar to the stand taken in his reply letter dated 07.09.2011 (Annexure-3) submitted before the Principal Secretary to Government, Department of Law pursuant to letter dated 27.08.2011 (Annexure-2) which are disputed questions of fact and cannot be gone into by this Court in exercise of power under Articles 226 and 227 of the Constitution. Therefore, this writ petition is disposed of giving liberty to the petitioner to file his reply to the notice of show cause under Annexure-4 within two weeks from the date of receipt of a copy of this judgment. If such reply is filed by the petitioner, the same shall be considered and disposed of by the Competent Authority by strictly following the procedure prescribed under Rule 13 of the Rules, 1956. the writ petition is disposed of.
The functions and transactions of business by Notary as envisaged in Section 8 of the Act, 1952 and Rules, 1956 respectively cannot be done in a routine manner without application of mind; otherwise the very purpose of enacting Section 8 of the Act, 1952 and Rule 11(8) of the Rules, 1956 would be frustrated because sanctity is attached to the certificate of the Notary. Thus, Section 8 of the Act, 1952 and Rule 11(8) of the Rules, 1956 cast an obligation on Notary to apply his mind while discharging his notarial functions and transactions of business.
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2011 (11) TMI 863
Issues involved: Jurisdiction of the Assessing Officer u/s 201 and 201(1A) of the Income Tax Act, 1961.
Summary:
The High Court of Bombay issued a notice to the Petitioner u/s 201 and 201(1A) of the Income Tax Act, 1961, which the Petitioner responded to through various letters. The Petitioner challenged the jurisdiction of the Assessing Officer. The Revenue presented an order from the Supreme Court in a similar case, and both parties agreed to follow the same procedure for determining jurisdiction as directed by the Supreme Court. The High Court directed the First Respondent to decide on the jurisdictional issue as a preliminary matter. If a decision against the Petitioner is made, the Petitioner retains all rights for further legal action. No enforcement steps will be taken for two weeks after communicating the decision. The Petition was disposed of with no order on costs.
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2011 (11) TMI 862
Issues Involved:
1. Deletion of addition of Rs. 2,02,500/- on account of Unexplained Cash Credit u/s 68.
2. Restriction of addition to peak amount of Rs. 6,67,500/- instead of Rs. 15,60,067/- on account of Unexplained Deposits in the undisclosed Bank Account.
3. Non-appreciation of cheque payments versus cash withdrawals.
4. Failure to substantiate the utilization of cash deposits.
5. Acceptance of additional evidence without AO's verification as per Rule 46A (2).
6. Overall justification of CIT(A)'s order.
Summary:
Issue 1: Deletion of Addition of Rs. 2,02,500/- on account of Unexplained Cash Credit u/s 68
The CIT(A) deleted the addition of Rs. 2,02,500/- made by the AO, as the loans were shown to be from family members and friends, and these amounts were consistent in the balance sheets of preceding years. The Tribunal upheld this deletion, noting that the balance sheets were part of the revenue department's record, and no fresh cash credits were received in the assessment year under appeal.
Issue 2: Restriction of Addition to Peak Amount of Rs. 6,67,500/- instead of Rs. 15,60,067/-
The CIT(A) restricted the addition to Rs. 6,67,500/- based on the peak credit theory, considering the re-deposits of cash withdrawals. However, the Tribunal found that the assessee did not provide sufficient evidence to support the peak credit theory and noted that the assessee had denied the existence of the IDBI Bank account during the assessment stage. The Tribunal set aside the CIT(A)'s order and restored the AO's addition of Rs. 11,31,000/- for cash deposits and Rs. 4,29,067/- for cheque deposits, as the additional evidence was admitted in violation of Rule 46A.
Issue 3: Non-appreciation of Cheque Payments versus Cash Withdrawals
The Tribunal noted that the CIT(A) accepted the peak theory without proper evidence or material, and the theory of withdrawal and re-deposit was not established. The Tribunal emphasized that the assessee failed to explain the source of deposits and the theory of peak credit was not applicable.
Issue 4: Failure to Substantiate the Utilization of Cash Deposits
The Tribunal found that the assessee did not provide any evidence to substantiate the utilization of cash deposits for business purposes. The AO's conclusion that the deposits were unexplained investments from undisclosed sources was upheld.
Issue 5: Acceptance of Additional Evidence without AO's Verification as per Rule 46A (2)
The Tribunal highlighted that the CIT(A) violated Rule 46A by admitting additional evidence without providing the AO an opportunity to examine it. The CIT(A) did not record any reasons for admitting the additional evidence, and the conditions of Rule 46A were not satisfied.
Issue 6: Overall Justification of CIT(A)'s Order
The Tribunal concluded that the CIT(A) was not justified in deleting the additions based on the peak credit theory and additional evidence admitted in violation of Rule 46A. The Tribunal restored the AO's order, confirming the additions of Rs. 11,31,000/- for cash deposits and Rs. 4,29,067/- for cheque deposits.
Conclusion:
The appeal of the revenue was partly allowed, with the Tribunal setting aside the CIT(A)'s deletions and restoring the AO's additions. The Tribunal emphasized the importance of adhering to procedural rules and providing sufficient evidence to support claims.
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2011 (11) TMI 861
2G Spectrum Scam case - five bail applications for grant of regular bail - Prevention of Corruption Act, 1988 (PC ACT) - CBI had registered the FIR on the allegations of criminal conspiracy and criminal misconduct against the unknown officials of Department of Telecommunications, Government of India and some unknown private persons/companies and others u/s 120B IPC and u/s 13(2) read with Section 13(1)(d) of the (PC ACT) in respect of allotment of Letters of Intent, Unified Access Services (hereinafter referred to as "UAS") Licenses and 2G Spectrum by the Department of Telecommunications. CBI had filed the first charge sheet in the Court of learned Special Judge. A supplementary charge sheet was filed u/s 120B IPC read with Section 7/11/12 of the PC ACT.
HELD THAT:- the accused are charged of economic offence of huge magnitude and if proved, it may jeopardize the economy of the country, yet at the same time, the Court observed that it cannot lose the sight of the fact that the charge sheet has already been filed and charges have been framed and keeping in view the voluminous nature of documents and the number of witnesses, which are to be examined by the prosecution, it will not be conducive to keep the accused persons incarcerated indefinitely during the period of trial, when there is no serious challenge to their fleeing from the processes of law or tampering with the evidence or not subjecting themselves to such orders as the Court may pass from time to time. It was also contended that the Supreme Court has reiterated the denial of bail to an accused has to be done as an exception and for cogent and sound reasons, as it affects his right to liberty guaranteed under Article 21 of the Constitution. In the light of the aforesaid facts and circumstances, Court allowed the bail applications of all the five accused persons and they are directed to be released on bail on their furnishing a personal bond in the sum of ₹ 5 lakhs each with two sureties for the like amount to the satisfaction of the learned trial Court, subject to the conditions.
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2011 (11) TMI 860
The Bombay High Court allowed a two-week extension for the State Trading Corporation to file a reply in response to a legal matter. Mr. D. G. Dhanure represented the State Trading Corporation in the case.
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2011 (11) TMI 859
Issues Involved: The judgment involves the interpretation of sec. 2(15) of the I.T. Act regarding the charitable status of the assessee and the alleged violations of sec. 13 of the I.T. Act related to investments and dividend declarations.
Interpretation of Charitable Status (sec. 2(15)):
The Revenue contended that the assessee, engaged in the business of developing industrial estates and infrastructure for sale or lease, did not qualify as a charitable institution u/s 2(15) of the I.T. Act. However, the Tribunal referred to previous decisions in the assessee's favor for A.Y. 2005-06 and A.Y. 2006-07, where it was held that the assessee was entitled to exemption u/s 11 of the Act. Citing these precedents, the Tribunal dismissed the Revenue's grounds and upheld the charitable status of the assessee.
Alleged Violations of sec. 13:
The Revenue alleged that the assessee had violated sec. 13 of the I.T. Act by investing income in non-statutory or non-Govt. companies and having a clause in the Memorandum of Articles of Association related to dividend declarations. However, the Tribunal, considering the consistent decisions in the assessee's favor in previous years, dismissed the Revenue's grounds based on sec. 13 as well. The Tribunal decided both appeals in favor of the assessee, following the precedent set by earlier orders.
Conclusion:
The Tribunal, comprising SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER, and SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER, dismissed both appeals by the Revenue against the orders of the CIT(A)-IV, Hyderabad. The Tribunal upheld the charitable status of the assessee under sec. 2(15) of the I.T. Act and rejected the allegations of violations of sec. 13, based on precedents from earlier cases. The orders were pronounced in open court on 22nd November, 2011.
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2011 (11) TMI 858
Issues Involved:
1. Legitimacy of the penalty imposed u/s 271(1)(c).
2. Classification of Birla Index Fund units as investment or stock in trade.
3. Bonafide belief and presentation error in financial statements.
4. Applicability of Accounting Standard 13.
5. Relevance of the Supreme Court decision in Reliance Petro Products P. Ltd.
Summary:
1. Legitimacy of the penalty imposed u/s 271(1)(c):
The appeal was directed against the order of CIT(A)-22, Mumbai, confirming the penalty of Rs. 15 lakhs imposed by the AO u/s 271(1)(c). The AO disallowed the assessee's claim of loss on Birla Index Fund units, treating it as a capital loss rather than a business loss, and imposed the penalty for furnishing inaccurate particulars of income.
2. Classification of Birla Index Fund units as investment or stock in trade:
The AO noted that the assessee had shown the Birla Index Fund units as investment in the balance sheet, consistent with the treatment of other mutual fund units in previous years. The assessee's claim of loss due to diminution in value was disallowed as the units were not treated as stock in trade. The CIT(A) upheld this view, stating that the balance sheet classification could not be amended post-approval by the shareholders and filing with the Registrar of Companies.
3. Bonafide belief and presentation error in financial statements:
The assessee contended that the loss was claimed under a bonafide belief that the units were trade investments, and the classification as investment was a presentation error. The CIT(A) rejected this argument, noting that the units were consistently shown as investments in previous years and the relevant details were not furnished, indicating a deliberate and knowing wrong claim.
4. Applicability of Accounting Standard 13:
The assessee argued that as per Accounting Standard 13, current investments should be valued at cost or market price, whichever is lower, and the loss should be recognized in the profit and loss statement. The Tribunal found this argument unconvincing, noting that the units were long-term investments and should be valued at cost, as per the accounting policies disclosed in the balance sheet.
5. Relevance of the Supreme Court decision in Reliance Petro Products P. Ltd.:
The assessee relied on the Supreme Court decision in Reliance Petro Products P. Ltd., arguing that making an incorrect claim does not amount to furnishing inaccurate particulars. The Tribunal distinguished this case, noting that the assessee's explanation was neither substantiated nor shown to be bonafide, and the relevant details were not furnished. The Tribunal upheld the penalty, referencing the Delhi High Court decision in Zoom Communication (P) Ltd., which emphasized that an unsubstantiated and non-bonafide explanation attracts penalty u/s 271(1)(c).
Conclusion:
The Tribunal dismissed the appeal, upholding the penalty imposed by the AO and confirmed by the CIT(A), concluding that the assessee furnished inaccurate particulars of income by making a wrong claim for the loss on Birla Index Fund units. The order was pronounced on November 18, 2011.
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2011 (11) TMI 857
Issues involved: Appeal against order of CIT(A) regarding claim of deduction u/s 80IB(11) for assessment year 2005-06.
Claim of deduction u/s 80IB(11): The appellant, engaged in providing cold chain facility for agricultural produce, claimed deduction under S.80IB. Assessing officer issued notice u/s 148, questioning the claim. In re-assessment, it was argued that cold chain facility includes a series of facilities from harvesting to distribution, consisting of pre-cooling, cold storage, refrigerated carriers, packing, warehousing, and information management system. Assessee contended that definition in S.80IB(14)(aa) is relevant, not opinions of others. CIT(A) relied on tribunal decisions supporting eligibility of cold chain storage facility for deduction u/s 80IB. Tribunal upheld CIT(A)'s decision, citing Agra Bench's ruling affirmed by Allahabad High Court, dismissing Revenue's appeal.
This summary highlights the issues involved in the legal judgment and provides a detailed account of the arguments and decisions related to the claim of deduction u/s 80IB(11) for the assessment year 2005-06.
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2011 (11) TMI 856
Prayer for CBI enquiry - Gross abuse and misappropriation of National Rural Health Mission (NRHM) funds by the State functionaries - failure to reconstitute State Health Mission and gross irregularities in purchase of various items and failure on the part of the State Government to take effective measures to monitor the implementation of the NRHM - murders of two Chief Medical Officers took place and the death of one Dy. CMO while in judicial custody - CAG has been requested to conduct special State level audit - HELD THAT:- We fail to appreciate that when so many reports were coming forward and one Press Release was issued by the State of U.P. itself taking cognizance of the matter then why effective steps were not taken till date for dealing with such gross irregularities. The State has not been able to explain its aforesaid inaction. The inaction of the State and omission to take necessary steps has not only resulted in committing financial irregularities which the learned Additional Advocate General terms as financial mismanagement but also has deprived the beneficiaries of the laudable scheme which was sought to be implemented for providing medical facilities
The consequence and effect of such inaction and omission on the part of the State have necessarily to be found out for which an independent enquiry by an independent agency as CBI is necessary. This would also be in consonance with the provision of Section 6-A of the CBI Act and para 9.1 of the CBI Manual that provides that where sufficient evidence is not available to register a regular case, preliminary enquiry may be conducted. We are prima facie convinced that gross irregularities - financial and administrative appear to have been committed in the execution and implementation of NRHM including the matter of award of contracts, procurement of goods, articles and etc. at various levels.
We are not inclined to grant the plea of learned Additional Advocate General that we should wait for the CAG Report before considering to entrust the matter to CBI in light of the fact that CAG is conducting a special state level audit more so when statutory audits by CAG were not got conducted, MoU obliged statutory audits by CAG of the funds routed through the MoU. None of the opposite parties have attempted to explain this inaction. Further, the special audit which has been ordered is only with respect to 24 districts for the financial year 2009-10 and 2010-11.
Learned Additional Solicitor General has also rightly pointed out that it is not necessary for this Court to wait for CAG Report as the scope of CAG and CBI being completely different and with the kind of irregularities appear to have been committed in the instant matter coupled with the fact that attempt was made to wash of some evidence, the exigencies of time require that immediate steps be taken to bring to light the persons guilty.
Learned Additional Advocate General has also not been able to explain as to why the State would have waited for the outcome of the CAG Report when it was itself competent to take necessary action. His argument that pending CAG Report, there is no material before this Court is untenable. We also take notice of the fact that the murders of two CMOs (Family Welfare), Dr. V.K. Arya and Dr. B.P. Singh, death of Dr. Y.S. Sachan while in judicial custody (Jail) and financial irregularities committed in the office of CMO, Lucknow all in relation to irregularities in NRHM are already being investigated by the CBI pursuant to the orders of this Court with the consent of the State Government.
The facts and circumstances, aforesaid make out a case for reference to CBI for making a preliminary enquiry in the affairs of NRHM in the entire State of U.P. right from the very inception of the NRHM. We, therefore, direct the Director, CBI to conduct a preliminary enquiry in the matter of execution and implementation of the NRHM and utilization of funds at various levels during such implementation in the entire State of U.P. and register regular case in respect of persons against whom prima facie cognizable offence is made out and proceed in accordance with law. The preliminary enquiry shall be conducted from the period commencing year 2005-06 till date. It is directed that the inquiry be completed within four months. The State Government is directed to hand over and make available all the records as may be required by the CBI and render full support and cooperation to CBI. The Central Government is also directed to render full support as may be asked by the CBI.
We may make it clear that the allegations levelled in the instant petitions have been examined only on prima facie scale and therefore CBI may proceed to conduct preliminary enquiry independent of our observations in accordance with law.
Petitions accordingly stand disposed.
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2011 (11) TMI 855
Issues involved: Appeal against dismissal of petition under Section 482 of the Code of Criminal Procedure seeking quashing of orders dated 18th February 2003 and 9th November 2005, related to a criminal complaint under Sections 406 and 409 of the Indian Penal Code.
Summary:
1. Background: The Appellant, a statutory body, filed a criminal complaint against the Respondents for alleged offenses under Sections 406 and 409 of the Indian Penal Code. The complaint was dismissed in default by the Chief Judicial Magistrate, leading to subsequent dismissal of the application for restoration of the complaint.
2. High Court Decision: The High Court dismissed the petition under Section 482 of the Code, stating that dismissal in default of a private complaint amounts to acquittal of the accused, and since a statutory remedy exists against such an order, the petition cannot be entertained.
3. Appellant's Argument: The Appellant contended that the High Court erred in not exercising its jurisdiction under Section 482 of the Code, emphasizing the serious nature of the charges against the Respondents and the need for a trial on merits. Reference was made to previous court decisions supporting the Appellant's position.
4. Consideration by Supreme Court: The Supreme Court analyzed the scope of the High Court's inherent powers under Section 482 of the Code, emphasizing that these powers should be used to prevent miscarriage of justice or abuse of court processes. The Court found the High Court's decision to reject the petition based on the availability of an alternative remedy as indefensible.
5. Decision: The Supreme Court allowed the appeal, setting aside the impugned judgment and orders of the Chief Judicial Magistrate. The complaint was restored to the file of the Chief Judicial Magistrate for further proceedings, emphasizing the importance of securing the presence of the accused for a fair trial.
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2011 (11) TMI 854
Issues involved: Conviction u/s 138 of Negotiable Instruments Act, Criminal Appeal u/s 374 of CrPC, Challenge to judgments, Compounding of offence.
Conviction u/s 138 of Negotiable Instruments Act:
The applicant-accused was convicted for offences u/s 138 of the Negotiable Instruments Act by the Metropolitan Magistrate and sentenced to imprisonment and fine. The applicant appealed to the City Session Judge, which was dismissed. Both judgments were challenged in the present Criminal Revision Application.
Criminal Appeal u/s 374 of CrPC:
The applicant-accused, dissatisfied with the conviction, filed a Criminal Appeal u/s 374 of the CrPC before the City Session Judge, which was subsequently dismissed by the Additional Sessions Judge, Ahmedabad City.
Challenge to judgments:
Both the judgments convicting the applicant-accused were challenged in the present Criminal Revision Application before the High Court.
Compounding of offence:
The applicant and the complainant reached a settlement where the applicant agreed to pay a certain amount. The complainant confirmed the settlement before the Court. Referring to a Supreme Court decision, the High Court allowed the Revision Application, quashed the previous judgments, permitted compounding of the offence, and acquitted the accused. The fine paid by the accused was treated as costs towards the Government and not refunded to the accused.
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2011 (11) TMI 853
Issues:
The judgment involves the consideration of a Writ Petition seeking a mandamus to declare the respondent's action in not considering the petitioner's tender for maintenance work as illegal and arbitrary.
Details of the Judgment:
1. The petitioner, a Society registered under the A.P. (Telangana Area) Public Societies Registration Act 1350 Fasli, filed a tender in response to a notification for maintenance work. The petitioner's tender was rejected, alleging favoritism towards another agency offering a lower bid. This led to the filing of the Writ Petition challenging the rejection.
2. The respondent, through its Law Officer, contended that only societies registered under specific Acts were eligible to participate, and since the petitioner was not registered under those Acts, their tender was deemed invalid. However, the respondent did not dispute the petitioner's registration under the 1350 Fasli Act, which was repealed by the 2001 Act. The court noted that the registration under the previous Act was deemed to be under the new Act, and the respondent erred in not considering this legal position.
3. The court declared the respondent's action in rejecting the petitioner's tender as illegal and directed them to reconsider the tender along with others in compliance with the tender conditions. Consequently, the Writ Petition was allowed, and an interim order related to the case was vacated.
4. The judgment emphasized the importance of legal provisions regarding registration under different Acts and highlighted the need for authorities to adhere to such provisions while evaluating tenders to ensure fairness and legality in the process.
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2011 (11) TMI 852
Issues Involved:
1. Whether the criminal proceedings could be quashed based on a settlement between the parties.
2. Whether the offences under Sections 354 and 394 IPC are compoundable.
3. Whether the High Court can exercise its power u/s 482 of the Code of Criminal Procedure to quash non-compoundable offences.
Summary:
Issue 1: Quashing of Criminal Proceedings Based on Settlement
The appeal arises from an order by the High Court of Kerala, which dismissed a petition u/s 482 of the Code of Criminal Procedure, 1973, seeking to quash criminal proceedings in FIR No. 6/2010. The High Court held that the offences charged were not 'personal in nature' to justify quashing based on a compromise between the complainant and the appellants. The Supreme Court considered whether the criminal proceedings could be quashed given the settlement between the parties.
Issue 2: Compoundability of Offences under Sections 354 and 394 IPC
Section 320 of the Code of Criminal Procedure lists compoundable offences. An offence u/s 354 IPC is compoundable at the instance of the woman against whom the offence is committed. However, an offence u/s 394 IPC is not compoundable, with or without the court's permission. The Supreme Court noted that while the offence u/s 354 IPC could be compounded, the offence u/s 394 IPC could not be compounded under Section 320.
Issue 3: High Court's Power u/s 482 to Quash Non-Compoundable Offences
The Supreme Court examined whether the High Court could exercise its power u/s 482 to quash the prosecution for non-compoundable offences in light of a compromise. The Court cited several precedents, including *Ram Lal v. State of J&K*, *Ishwar Singh v. State of Madhya Pradesh*, and *B.S. Joshi v. State of Haryana*, which established that the High Court could quash proceedings to prevent abuse of process and secure the ends of justice, even for non-compoundable offences. The Court emphasized that the inherent powers u/s 482 should be exercised with care and caution, only when continuance of the prosecution would be futile.
Conclusion:
The Supreme Court concluded that the incident stemmed from a civil dispute over access to adjacent plots, which had been resolved. The complainant and key witnesses were no longer supporting the prosecution. Therefore, continuing the prosecution would be an abuse of process and a waste of judicial resources. The appeal was allowed, the High Court's order was set aside, and the prosecution in CC 183/2010 was quashed.
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