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2023 (4) TMI 1397
Seeking grant of bail - Siphoning of huge public money availed by way of financial assistance from various banks in the name of some shell Companies and puppet Companies - offence punishable under Section 447 of the Companies Act, 2013 - HELD THAT:- This court feels that it is needless to once again harp on the same and it would be suffice to ensure as to whether there is any change of circumstances warranting this court to consider the present bail petition.
The main change of circumstance pleaded by the learned Senior Counsel for grant of bail is filing of a private complaint by the respondent on 9.9.2022 and cognizance having been taken by the court below. True that, as pointed out by the learned Senior Counsel appearing for the petitioner that bail has been granted in respect of the offences punishable under the Prevention of Money Laundering Act, 2002 by the Apex Court in Kiran Prakash Kulkarni vs. Enforcement Directorate and Another [2019 (4) TMI 1973 - SUPREME COURT] observing that charge sheet has been filed and it is true that Section 45(1) of the Prevention of Money Laundering Act 2002, which imposes twin conditions is akin to Section 212(6) of the Companies Act.
In the case on hand, it appears that the investigation so far done by the respondent reveals that the petitioner had indulged in fraud as explained under Section 447 of the Companies Act and the statements recorded from the witnesses so far points out the guilt of the petitioner. According to the respondent the case, being one with high stake, they have widened the investigation and there is every likelihood of bringing home the guilt of the petitioner and in the event of the petitioner being released on bail, he would tamper with the evidence and shatter the entire case of the respondent.
This court has, recently, declined to grant bail, considering the fact that it is a case of economic offence of grave magnitude affecting the society and having arrived at a conclusion that the petitioner has not satisfied the twin conditions imposed under Section 212(6) of the Companies Act for grant of bail for the offence punishable under Section 447 of the Companies Act and also holding that it is highly premature to grant bail to the petitioner.
Conclusion - In cases of serious economic offenses, bail should not be granted unless there is a clear change in circumstances and the accused satisfies the twin conditions under Section 212(6) of the Companies Act.
This court finds that the petitioner is not entitled to grant of bail at this stage. Accordingly, the Criminal Original Petition stands dismissed.
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2023 (4) TMI 1396
Compensation not paid to the majority of the land holdings -Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement - award announced but not paid
Whether the provisions of The Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013 would apply to the cases where CALA had announced the award and the amount deposited by the acquiring agencies with the competent authority prior to 31.12.2014, but the compensation was not paid to majority of the acquired land holdings?
HELD THAT:- It is admitted case that payment to majority of land holdings under acquisition was not made as on 31.12.2014.
The provisions of the 2013 Act or determination of compensation shall apply to acquisition in question. The reliance on the decision of Rajasthan High Court in Gopa Ram's case [2018 (1) TMI 1657 - RAJASTHAN HIGH COURT] by NHAI is of no avail. In that case, the admitted position was that the land owners had received compensation prior to 31.12.2014. The issue that deposit of compensation would tantamount to the payment made to land owners was not involved.
The issue raised that compensation is to be determined only as per factors mentioned in Section 3-G(7) of the 1956 Act is no longer res integra. The Supreme Court in National Highways Authority of India v. Sri P. Nagaraju @ Chelluvaish and another, [2022 (7) TMI 1413 - SUPREME COURT] held that Section 3-G (7) of the 1956 Act provides basic parameters of determination of compensation and after 2013 Act was made applicable to acquisition under the 1956 Act, the factors provided under Sections 26 and 28 of the 2013 Act will also apply.
Thus, beneficial provisions of the 2013 Act would also be applicable to the acquisition in question.
From the perusal of the award passed by CALA and the arbitral award, it is evident that no reasons are recorded. In award of CALA, there is only a passing reference that reports of Tehsildar and Naib Tehsildar were called with regard to potential of the land. Reliance was placed upon the prices fixed by District Price Fixation committee for determination of compensation. From the reading of the arbitral award, it cannot be even made out as to whether the compensation was determined as per the provisions of the 1956 Act, 1894 Act or 2013 Act - It would not be appropriate for this Court under Section 37 of the 1996 Act to comment further on the determination of compensation. Suffice to say, the minimum requirement was that the arbitrator should have dealt with the factors to be considered and given reasons either for applying the said factors or for not adopting them. The non-speaking award is patently illegal being violative of Sections 28(1)(a) and 31(3) of the 1996 Act.
Conclusion - i) The beneficial provisions of the 2013 Act would also be applicable to the acquisition in question. ii) Non-recording of reasons in consonance with Section 31(3) of the 1996 Act results in violation of Section 28(1)(a) of the 1996 Act, rendering the award patently illegal.
The issue raised by learned counsel for the land owners for sustaining the award as the modified relief granted under Section 34 of the 1996 Act was not being pressed has been rendered academic and needs no further expounding - the impugned orders and the award are set aside - Appeal allowed.
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2023 (4) TMI 1395
Dishonour of Cheque - correct interpretation of Section 353(7) (8) of Code of Criminal Procedure, 1973 - Up to what extent Section 465 of Code of Criminal Procedure, 1973 pressed into service?
HELD THAT:- The object and purpose of the statute under which the accused is being tried are also relevant factors while interpreting Sub-section (7) (8) of Section 353 and Section 465. With the introduction of Sections 143 A and 148 of the Negotiable Instruments Act 1881, the legislature has made it clear that the trial in the cases of dishonour of cheques is to ensure that the faith of ordinary citizens dealing with Negotiable Instruments is strengthened. The endeavour of the legislature, while amending the provisions of the Negotiable Instruments Act, is to ensure expeditious disposal of a complaint involving dishonour of cheque. Introduction to Section 143(a), 148 is one of such steps taken by the legislature to ensure that the proceedings under Section 138 of Negotiable Instruments Act, 1881, are tried expeditiously and effectively. While interpreting Section 353(7)(8) of the Code of Criminal Procedure, the Court cannot forget that it deals with complaints under Section 138 of the Negotiable Instruments Act 1881.
The Apex Court, in the case of K.S. Panduranga Vs. State of Karnataka [2015 (8) TMI 1139 - SUPREME COURT] was considering a case where the High Court decided the appeal arising out of conviction under the Prevention of Corruption Act, 1947 on merits in the absence of an advocate of the accused. On the other hand, the Apex Court distinguishing the judgment in the case of Bani Singh Vs. State of U.P. [1996 (7) TMI 562 - SUPREME COURT], held that the Appellate Court could decide a criminal appeal in the absence of counsel for the accused if the counsel remains absent deliberately or shows negligence in appearing.
In the facts of the present case, it appears from the undisputed facts and material on record that the accused was consistently absent during the trial and at the stage of making oral submissions. The learned Magistrate granted the fair opportunity to the accused by adjourning the delivery of judgment on three occasions. If the accused is not remaining present, there is no law which mandates that the Magistrate enforce the presence of the accused by adopting coercive means. Sub-section (7) of Section 353 protects the learned Magistrate from requiring the presence of the accused at the time of delivery of judgment, particularly in the proceedings arising out of Section 138 of the Negotiable Instruments Act, 1881.
Conclusion - The absence of the accused at the time of delivery of judgment in the facts of the case has not resulted in a failure of justice, and in view of Subsection (7) of Section 353 of the Code of Criminal Procedure which protects judgment delivered by the Criminal Court in the absence of any party or its pleader, the Appellate Court was not justified in setting aside the order of conviction and sentence imposed by the learned Magistrate.
The impugned judgment and order passed by the Additional Sessions Judge Greater Mumbai is quashed and set aside - proceeding should be remitted back to the Appellate Court for a decision on merits - Petition allowed.
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2023 (4) TMI 1394
Condonation of delay in filing appeal - sufficient cause for delay present or not - whether the mistake is bonafide or was merely a device to cover an ulterior purpose? - HELD THAT:- Has applicant shown any sufficient cause or has applicant acted not in a negligent manner is something we have to decide by considering the application. In the application, it is stated that on 7th January 2023 the impugned order was passed and the certified copy was applied on 30th January 2023 and delivered on 1st February 2023. No explanation is given for this delay of about 23 days. In paragraph 5, it is simply stated “However, in spite of Applicant/Appellant’s advocate best and sincere efforts, the scrutiny and other connected process could not be completed earlier, the appellant is apologetic for this delay. On merits, the appellant has got a very good case. ” It is also stated that the delay is not deliberate nor intentional. Beyond this, there is no explanation whatsoever to explain why the delay should be condoned.
This does not satisfy the requirement of “sufficient cause” being made. Moreover, it is an appeal filed under Section 37 of the Act and as held by the Apex Court in Executive Engineer V/s. M/s. Borse Brothers Engineers and Contractors Pvt. Ltd. [2021 (3) TMI 1458 - SUPREME COURT (LB)], the object of speedy disposal will be defeated if this Court condones the delay routinely without being satisfied that a sufficient cause is shown.
Conclusion - A "sufficient cause" must be shown to justify condoning delays in filing appeals, particularly in the context of arbitration and commercial disputes, where the objective is to ensure speedy resolution. The interim applications for condonation of delay dismissed, as the applicant failed to provide a satisfactory explanation for the delay.
Both interim applications stand dismissed.
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2023 (4) TMI 1393
Cancellation of the petitioner's registration under the Goods and Services Tax (GST) regime - Non-speaking order - violation of principles of natural justice - HELD THAT:- Bihar Goods and Services Taxes Rules, 2017, GST REG-19 has a specific column where reasons have to be assigned. However, the Assessing Officer seems to be labouring under the belief that when an assessee does not appear or an objection is not filed, no reasons have to be assigned.
The said order cannot be countenanced especially when there is absolutely no reason stated regarding the cancellation of registration.
Notification No. 3 of 2023 has been brought in by the Central Government on the recommendations of the G.S.T. Council wherein if the cancellation has been effected for failure to file returns under clause (b) or clause (c) of Sub-section (2) of Section 29, there is a further period allowed up to 30.06.2023, wherein the registered person can apply for invocation of cancellation. This is also subject to the condition that the return should be filed up to the effective date of cancellation of registration and the payment of tax, interest, penalty and late fee in respect of such returns have also been made.
Conclusion - The cancellation order was set aside due to its non-speaking nature and violation of natural justice. The petitioner was granted the opportunity to seek remedy under the applicable notification.
Petition allowed.
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2023 (4) TMI 1392
Maintainability of petition - availability of alternative remedy - entitlement to benefit of stay of recovery of balance amount of tax in terms of Section 112 (8) and (9) of the B.G.S.T Act upon deposit of the amounts as contemplated under Sub-section (8) of Section 112 - HELD THAT:- The respondent State authorities have acknowledged the fact of non-constitution of the Tribunal and come out with a notification bearing Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019 for removal of difficulties, in exercise of powers under Section 172 of the B.G.S.T Act, which provides that period of limitation for the purpose of preferring an appeal before the Tribunal under Section 112 shall start only after the date on which the President, or the State President, as the case may be, of the Tribunal after its constitution under Section 109 of the B.G.S.T Act, enters office.
Subject to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act. The petitioner cannot be deprived of the benefit, due to non- constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed.
Petiiton disposed off.
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2023 (4) TMI 1391
Rate of GST for works contract services executed prior to 18.07.2022 - applicability of N/N. 11/2017- Central Tax (Rate) dated 28.06.2017, as amended by notification No. 03/2022-Central Tax (Rate) dated 13.07.2022 - Seeking refund of 6% of additional GST paid by them for the contract executed prior to 18.07.2022 - HELD THAT:- The documents submitted by the petitioners in the present writ petitions postulate that some of the departments of the State Government of Chhattisgarh have accepted such claim of the contractors where certain additional burden of money was incurred upon them after coming into force of the GST.
This Court in M/S D.A. ENTERPRISES THROUGH ITS PROPRIETOR DINESH KUMAR MISHRA VERSUS STATE OF CHHATTISGARH THROUGH THE SECRETARY; CHIEF ENGINEER HASDEO BASIN; SUPERINTENDING ENGINEER; EXECUTIVE ENGINEER MANIYARI [2022 (12) TMI 1136 - CHHATTISGARH HIGH COURT] directed the petitioner therein to make a fresh claim showing the difference of tax liability that was incurred at the time of submission of bids and the excess tax paid by him in the light of the introduction of the GST and upon such claim being made, the respondents were directed to forthwith process the same and after due scrutiny and enquiry, the petitioner therein be suitably reimbursed the additional tax burden incurred by him.
Thus, keeping in view the fact that present cases are not distinguishable to that of above case, it would be just and expedient in the interest of justice to direct the petitioners herein as well to follow the process, as has been directed/observed in the aforesaid writ petition. Accordingly, it is directed that the petitioners shall make a fresh claim before the respondent authorities agitating their grievance and upon such claim being made, the respondent authorities shall proceed ahead with the necessary scrutiny and enquiry and thereafter if the petitioners are found entitled to be reimbursed the additional tax liability incurred upon them, they will suitably be reimbursed.
Petition disposed off.
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2023 (4) TMI 1389
Recovery of CENVAT credit availed in respect of the traded goods with interest and penalty - correct formula that reflects the Rule 6 of Cenvat credit rules, 2004 for reversal of Cenvat credit used for manufacture of provided services exempted and taxable services - requirement to reverse any additional amount from the credit received from the input services.
What is the correct formula that reflects the Rule 6 of Cenvat credit rules, 2004 for reversal of Cenvat credit used for manufacture of provided services exempted and taxable services? - HELD THAT:- The formula adopted by the Appellant to arrive at the amount of reversal in terms of Rule 6(3A) of CENVAT Credit Rules, 2004 is correct. Hence, there is no short reversal by the Appellant - Reliance placed in M/S. MERCEDES BENZ INDIA (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2015 (8) TMI 24 - CESTAT MUMBAI] where it was held that 'Rule 6 of the Cenvat Credit Rules is not enacted to extract illegal amount from the assessee. The main objective of the Rule 6 is to ensure that the assessee should not avail the Cenvat Credit in respect of input or input services which are used in or in relation to the manufacture of the exempted goods or for exempted services.'
Whether the appellant was required to reverse any additional amount from the credit received from the input services? - HELD THAT:- During the period in dispute, the Appellant reversed an amount of Rs. 19,03,11,045/- at the ISD level before the distribution of the credit. However, if the allegation of the department is accepted and the Appellant is required to make reversal at the manufacturing unit level, the Appellant would have made the reversal of Rs. 4,78,15,154/- and the Noida unit would have reversed Rs. 11,06,86,024/- accordingly the total reversal of the Appellants would have been Rs. 15,58,01,178/- - The figures are certified by an independent chartered accountant and the certificate is enclosed along with the appeal memo. The certificate issued by the certificate given by the Chartered Accountant prused and it is convinced that Appellant at ISD level has in-fact reversed excess CENVAT credit. That being so the demand of reversal again from the recipient manufacturing units of the appellant cannot be justified, for the reason no inadmissible credit was distributed by the ISD.
Conclusion - i) The formula adopted by the Appellant to arrive at the amount of reversal in terms of Rule 6(3A) of CENVAT Credit Rules, 2004 is correct. Hence, there is no short reversal by the Appellant. ii) Appellant at ISD level has in-fact reversed excess CENVAT credit. The demand of reversal again from the recipient manufacturing units of the appellant cannot be justified, for the reason no inadmissible credit was distributed by the ISD.
Appeal allowed.
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2023 (4) TMI 1388
Discharge of Central Excise duty liability under Section 3 of the Central Excise Act, 1944, instead of Section 3A - application of the provisions of Section 3 and 3A of Central Excise Act, 1944 - entitlement to avail CENVAT/MODVAT credit on inputs used in the manufacture of goods notified under Section 3A of the Act - levy of penalty - extended period of limitation.
Discharge of Central Excise duty liability under Section 3 of the Central Excise Act, 1944, instead of Section 3A - application of the provisions of Section 3 and 3A of Central Excise Act, 1944 - CENVAT Credit - HELD THAT:- The Appellant had worked and paid Central Excise duty pursuant to the clarifications/orders issued by the Commissioner from time to time. Further, the show cause notices had been issued based on the Appellant’s records relating to manufacture and clearance of final products. The entire case for denial of MODVAT/CENVAT had been set up in the show cause notices on the ground that the Appellant had incorrectly paid under Section 3 of the Act instead of 3A thereof - Notification No. 33/97-CE(NT) dated 01.08.1997 and Notification No. 34/97-CE(NT) dated 01.08.1997 imposing restriction on MODVAT availment in respect of goods liable to duty under Section 3A of the Act had no application in the given facts and circumstances. Accordingly there remains no justification for supporting the purported conclusions drawn by the Commissioner that the Appellant should have paid duty under Section 3 of the Act and that it had irregularly availed MODAT/CENVAT on the inputs used in or in relation to the notified final products.
Extended period of limitation - HELD THAT:- There is no material on record to substantiate the charge warranting invocation of extended period of limitation - there are no ingredients for attracting extended period of limitation in terms of Rule 11A of the Act/Rule 57I of the Rules.
Penalty - HELD THAT:- The imposition of penalty under Rule 173Q and Rule 57I of the Rules and Section 11AC of the Act are set aside - in view of the judgement of the Hon’ble Supreme Court in the case of Shree Bhagwati Steel Rolling Mills v. Commissioner of Central Excise [2015 (11) TMI 1172 - SUPREME COURT] no penalty could have been imposed under the proviso to Rule 96ZO(3) of the Rules and Rule 96ZP thereof.
Conclusion - i) Notification No. 33/97-CE(NT) dated 01.08.1997 and Notification No. 34/97-CE(NT) dated 01.08.1997 imposing restriction on MODVAT availment in respect of goods liable to duty under Section 3A of the Act had no application in the given facts and circumstances. ii) There are no ingredients for attracting extended period of limitation in terms of Rule 11A of the Act/Rule 57I of the Rules. iii) The imposition of penalty under Rule 173Q and Rule 57I of the Rules and Section 11AC of the Act are set aside.
The impugned order cannot be sustained and is accordingly set aside - Appeal allowed.
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2023 (4) TMI 1387
Invocation of the "Book Examination Clause" by the respondent - abuse of dominant position in violation of Sections 3 and 4 of the Competition Act, 2002 - unilateral revision of rates by the respondent without appealing the Competition Commission of India's (CCI) decision - HELD THAT:- The petitioner entered into an agreement with M/s Arthur Flury AG. The CORE floated the online global tender on their website for supply of 28 sets of SNS Assembly (Phase Breaks). The petitioner firm also participated in the global tender. The bid was opened on 18.10.2017 and the petitioner's bid was accepted. Consequently, the purchase order was given to the petitioner on 12.1.2018 for supply of 28 sets of SNS Assembly (Phase Breaks) for Rs. 2.31 crores. Admittedly, the said material was supplied by the petitioner firm. Meanwhile, another global tender was published by the CORE and the global bids were opened on 29.11.2017 for supply of 238 sets of SNS Assembly (Phase Breaks). The petitioner firm again participated in the said global tender and it's bid was accepted for supply of 176 sets, out of total tender quantity of 238 sets - Admittedly, in response of the purchase order dated 27.2.2018, the petitioner supplied the entire articles through various Challan-cum-Tax Invoices dated 26.6.2018 but instead of clearing the outstanding amount to the petitioner firm, the second respondent sent a letter dated 17.05.2018 stating that they have invoked “Book Examination Clause” for the present order as well as the previous order of 2013.
The price trend does not support the allegation of abuse of dominant position made by the informant by artificially determining the sale price in terms of the provisions contained in Section 4(2)(a)(ii) of the Act, 2002. In view of the above assessment, the Commission was of the view that the petitioner does not appear to have abused its dominant position in terms of the provisions of Section 4 of the Act, 2002 and no case of contravention of the provisions of Section 4 of the Act, 2002 was made out against the petitioner, accordingly the matter was ordered to be closed in terms of the provisions contained in Section 26(2) of the Act, 2002 - there are no justification to entertain the writ petition to sit in appeal or to upset the findings recorded by the CCI in its order dated 27.8.2018, which was affirmed by the NCLAT in the order dated 23.1.2020 and in the review order dated 13.4.2022.
A Constitutional Bench of Hon'ble Supreme Court in L. Chandra Kumar vs. Union of India [1997 (3) TMI 90 - SUPREME COURT] has held that the power vested in the High Courts to exercise judicial superintendence over the decisions of all courts and tribunals within their respective jurisdictions is also part of the basic structure of the Constitution and the decisions of Tribunals would be subject to the High Court’s Writ jurisdiction under Article 226/227 of the Constitution before a Division Bench of the High Court within whose territorial jurisdiction the particular Tribunal falls.
A careful perusal of Section 53T of the Act, 2002 would show that an appeal to the Supreme Court is provided against “any order passed by the Appellate Tribunal”. Therefore, the appropriate remedy for the respondent was to file an appeal against the judgment and order dated 23.01.2020 passed by the Tribunal before Hon'ble Supreme Court of India in terms of the aforesaid provisions of the Act, 2002 within the period of limitation prescribed therein. Admittedly, the respondent did not prefer any appeal before Hon'ble Supreme Court neither within the period of limitation nor even any delayed appeal was filed after expiry of the limitation period.
Conclusion - Once the respondent/CORE has lost the reference made on similar allegations of excessive pricing on the same material on record before the CCI, which are referred in the impugned orders, and the appeal and review preferred by the CORE before the NCLAT have also been dismissed, the findings arrived by the CCI has attained finality in the event of the order not challenged before Hon'ble Supreme Court in terms of Section 53T of Act, 2002, then the issue involved in the present writ petition stood settled and covered by the order passed by the CCI dated 27.08.2018.
The impugned orders dated 12/13.9.2018 as well as demand notice dated 26.9.2018 are liable to be set aside - Petition allowed.
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2023 (4) TMI 1386
Prohibition of Benami Properties Transactions - Scope of Benami Tansactions (Prohibition) Amendment Act, 2016 - HELD THAT:- On perusal of the order of the Adjudicating Authority and the notice of the Initiating Officer, it is case of alleged benami transaction prior to the date of coming into force of the Amendment Act, 2016. It could not be disputed by the respondents
We find that the appeal is covered by the Judgement of Ganpati Dealcom (P.) Ltd. [2022 (8) TMI 1047 - SUPREME COURT].
Therefore, the order of the Adjudicating Authority confirming the action of Initiating Officer needs to be interfered and accordingly the impugned order and the proceedings initiated by the respondent in reference to the alleged benami transaction of a period prior to the Amendment Act of 2016 are set aside.
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2023 (4) TMI 1385
M.A. filed seeking recall of the order passed u/s 254(1) - disallowance on account of alleged delay in payment of P.F. / E.S.I.C. u/s 36(1)(va) r/w section 2(24) allowed by ITAT - HELD THAT:- While deciding the aforesaid issue, Tribunal following its earlier decision rendered in Kalpesh Synthetics Pvt. Ltd. [2022 (5) TMI 461 - ITAT MUMBAI] allowed the appeal filed by the assessee. Subsequently, the Hon'ble Supreme Court in Checkmate Services Pvt. Ltd. [2022 (10) TMI 617 - SUPREME COURT] held that payment towards employee’s contribution to P.F. / E.S.I.C. after the due date prescribed under the relevant statute is not allowable as a deduction under section 36(1)(va) of the Act.
We find that in ACIT v/s Saurashtra Kutch Stock Exchange [2008 (9) TMI 11 - SUPREME COURT] held that non-consideration of the decision of the Hon'ble Jurisdictional High Court or the Hon'ble Supreme Court can be said to be a “mistake apparent from record” which can be rectified under section 254(2)
We find that in Lakshmi Sugar Mills Co. Ltd. [2012 (6) TMI 39 - DELHI HIGH COURT] held that where the Larger Bench of the Hon'ble Supreme Court overrules its earlier decision on which the Tribunal relied on, the said decision of the Tribunal can be rectified u/s 254(2) of the Act since the decision of the Hon'ble Supreme Court operates retrospectively.
Therefore, we find merit in the present M.A. filed by the Revenue seeking recall of the Tribunal’s order on the basis of the subsequent decision of the Hon'ble Supreme Court in Checkmate Services Pvt. Ltd. [2022 (10) TMI 617 - SUPREME COURT] Accordingly, the order passed in assessee’s appeal is recalled for a fresh hearing of the appeal on merits
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2023 (4) TMI 1384
Writ jurisdiction invoked to challenge the order of assessment HELD THAT:- Appeal u/s 246A of the Act is pending before the appellate authority which is faceless authority - The Court is of the view that the appeal should be decided expeditiously so that the petitioner may not have to negotiate uncertainties in his case.
Therefore, without going into any aspect of the merits of the case of the either side, since the appeal of the petitioner is pending before the competent authority, the appellate authority is directed to deal with and decide the appeal of the petitioner against the assessment order in respect of AY 2019-20 within a period of four months from the date of receipt of this order.
As the appellate authority is faceless, learned advocate for the respondent revenue is directed to ensure that the present order is communicated for its implementation to the authority concerned, who may be dealing with the appeal of the petitioner.
The learned advocate for the writ petitioner submits that the stay granted by this Court may be directed to be continued till the appeal is decided. It transpires from the record that while passing the order dated 30.11.2022, this Court directed the respondent not to take any coercive action.
Since the said interim order has continued, it would be reasonable to accede to the request of the petitioner for extension of the said relief till the appeal of the petitioner is decided. This is in order to ensure that the petitioner is not put in irreversible situation or that the case of the petitioner is not prejudiced only on that count when the appeal of the petitioner is yet to be finally heard and decided on merits.
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2023 (4) TMI 1383
Reopening of assessment u/s 147 - petitioner had not filed the return for the relevant year - HELD THAT:- The notice issued u/s 148A(b) of the Act proceeded on a completely incorrect premise i.e., that the petitioner was a non-filer. In support of the plea that the petitioner had filed its Income Tax Return (ITR), our attention was drawn.
Second, the information concerning the salary received by the petitioner, as also the sale of property, was disclosed in the ITR. It was emphasised that in respect of his ITR, the petitioner received intimation on 20.10.2016 u/s 143(1) of the Act.
Third, the email said to have been received from the buyer of the subject property had not been shared with the petitioner.
In defence of the impugned action, has relied upon the order passed under Section 148A(d) of the Act.
As is evident from order passed u/s 148A(d) of the Act, which has been extracted hereinabove, the AO has not mentioned the date of the email.
As indicated hereinabove, the AO had noted in order passed u/s 148A(d) of the Act that the email is indicative of the fact that the petitioner has received “at least” Rs. 1 crore.
We are unable to appreciate what has been noted in paragraph concerning the amount said to have been received by the petitioner. The email would have either indicated an amount or none at all; the use of the expression “at least” is not understood by us.
Therefore, according to us, the best way forward would be to set aside the impugned notices and order.
As understanding of the relevant provisions of the Act is that since the instant case concerns AY 2016-17 and the limitation under the old regime had not expired as on 01.04.2021, the limitation stands extended.
AO proceeds on the basis that the limitation was expiring on 31.03.2023. Thus, for the foregoing reasons, the impugned notices and the order are set aside.
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2023 (4) TMI 1382
Disallowance of expenses - AO observed that the assessee did not produce books of account i.e. ledger, cash-book, bills, vouchers, evidence or explanation, etc. regarding the development expenses and labour charges - AO disallowed 10% of the total expenditure and also made a reference to TDS wing of the department for non-filing of TDS returns - CIT (A) has deleted the disallowance to the extent of 10% and granted part-relief to assessee - HELD THAT:- The objection of Ld. AO qua this part is very limited i.e. the assessee has not filed TDS return. But for that objection, the AO has taken a separate action and referred the matter to TDS wing which is very clear from the assessment-order. In the circumstance, we agree with CIT (A) that the AO is not justified to make disallowance qua the payment for which the assessee has supplied party wise details and also deducted TDS. Thus, there is nothing wrong in the part-relief granted by Ld. CIT(A). We approve his action. This ground of revenue is, thus, dismissed.
Addition on account of determination of cost of goods sold - CIT(A) deleted addition - HELD THAT:- We agree to his submission that the Ld. CIT (A) has accepted a newer submission of assessee that the impugned expenditure @ Rs. 110/- per square feet was in the nature of “land filling expenditure” whereas the assessee himself claimed the same as “brokerage expenditure” before AO. We find weightage in the submission of Ld. DR that the CIT (A) has accepted this newer submission of assessee without calling any remand-report from Ld. AO. Going further, we agree to Ld. DR’s submission that the CIT (A) has not made any working or calculation to arrive at a finding that claiming higher expenditure in the current year, would reduce the claim of assessee in later years and thereby the exercise would become revenue-neutral. Thorough working of the closing stock / cost of goods sold is required to be made/verified by Ld. CIT (A) and the Ld. AO must be given an opportunity of hearing on this issue. Hence, it would be most appropriate to remand this issue back to the file of Ld. CIT (A) to decide afresh.
Disallowance u/s 40A(3) - payments in cash violating prescribed limit - CIT(A) deleted addition - HELD THAT:- CIT (A) has not uttered any voice on the original claim of clause (g) of Rule 6DD raised by assessee before AO. The Ld. CIT (A) has simply recorded the newer stand of assessee, cited the judicial rulings thereon and deleted the disallowance. In fact, the Ld. CIT (A) has not taken pains to consider (i) that the assessee made a different claim before Ld. AO which was turned down by Ld. AO; and (ii) that the assessee has not given any evidence in support of newer stand taken for the first time before him. That brings us to conclude that the assessee miserably failed to prove on facts as to how the section 40A(3) is not applicable to it. We do not have quarrel with the decisions cited by Ld. CIT (A) but since we do not find credence / strength in the claims of assessee on facts, we do not hesitate in concluding that the assessee has failed to prove the circumstances to come out of the clutches of section 40A(3). Therefore, we are of the view that the disallowance u/s 40A(3) is attracted in this case. We uphold the action of Ld. AO and so also the disallowance made by him. Thus, this ground is allowed.
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2023 (4) TMI 1381
Reversal of input tax credit pursuant to cancellation of selling / purchasing registration - HELD THAT:- Reliance placed in the decision of Apex Court in the case of STATE OF MAHARASHTRA VERSUS SURESH TRADING COMPANY [1996 (2) TMI 451 - SUPREME COURT] and a decision of Division Bench of this Court in the case of THE ASSISTANT COMMISSIONER (CT) VERSUS M/S. BHAIRAV TRADING COMPANY [2016 (9) TMI 1114 - MADRAS HIGH COURT] where it was held that 'The High Court was right in answering the question in favour of the respondents. A purchasing dealer is entitled by law to rely upon the certificate of registration of the selling dealer and to act upon it. Whatever may be the effect of a retrospective cancellation upon the selling dealer, it can have no effect upon any person who has acted upon the strength of a registration certificate when the registration was current.'
The impugned order of assessment is set aside and this writ petition is allowed.
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2023 (4) TMI 1380
Validity of assessment order u/s.153A r.w.s.143(3) as barred by limitation - HELD THAT:- Without adhering to the time limits prescribed both under the Pre Amended Proviso and Post Amended Proviso, the Ld. AO completed the assessment order on 27.02.2015 which is clearly time barred u/s. 153B of the Act. Since in both the situations, the limitation period expires on 31.03.2014, but the Assessing Officer passed the assessment orders only on 27.02.2015 which is clearly time barred.
However our Jurisdictional High Court in the case of Anil Kumar Gopikishan Agrawal [2019 (6) TMI 746 - GUJARAT HIGH COURT] has held that it is the Date of Search that has to be considered to be relevant date for purpose of applying amended provisions of section 153C[1] of the Act. Therefore, we have no hesitation in confirming the findings of the CIT(A) on the issue of assessment order passed as time barred. Thus the Ground Nos. 1 to 3 raised by the Revenue are devoid of merits and against the provisions of law, therefore the same are liable to be dismissed.
Addition of Off Shore Bank Account - As no incriminating document was found during the course of search proceedings. Further it appears that the Income Tax Department is also not sure of its own source of information and the veracity of the information, on which heavy reliance is placed.
It is common knowledge, from the press reports, that the information received by the Department from France was based on stolen unverified/leaked documents. The search undertaken by the Department at various premises of assessee was a shot in the dark to try to recover something to give substance to the unverified data received by it from France. Thus the department was not able to find anything either at the residence or the various business premises of the assessee, relating to the offshore bank account. Decided against revenue.
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2023 (4) TMI 1379
Recovery of outstanding demand u/s. 234E - short payment on account of late filing fee - HELD THAT:- Assessee before us that he has not filed any copy of order under section 200A either before the ld. CIT(A) or before the Hon’ble ITAT. The ld.AR admitted that he has merely filed copy of the justification report downloaded from the Income Tax Systems. Thus, in this case, it is an admitted fact that assessee has filed an appeal before the ld. CIT(A) against a letter issued by AO regarding recovery.
Section 246A of the Income Tax Act specifies the orders against which appeal can be filed before the CIT(A). Recovery Letter issued by the AO or the justification report does not form appealable orders mentioned u/s 246A. Therefore, we agree with the CIT(A) that appeal of the assessee was not maintainable and it was an infructuous appeal.
The order of the CIT(A) dismissing the appeal of the assessee as infructuous, not maintainable is upheld. Since CIT(A) has dismissed the appeal of the assessee as not maintainable, the CIT(A)’s observations regarding merits of the case are outside the scope of the order. We do not intend to comment on the merits of the case.
Ground No. 1 of the assessee is dismissed.
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2023 (4) TMI 1378
Disallowance of depreciation on goodwill - allowability of amortization/depreciation of the goodwill emerged out of amalgamation of two entities with assessee - HELD THAT:- Goodwill falls in the category of “Intangible Assets”, but its advantages must be tangible and assessee has to establish on record that by virtue of “Goodwill” what are the financial and non-financial gains are accruing to him. In this case what we observed, pre-merger and post-merger is simply a consolidation of figures of entities involved and not a percentage growth in terms of sales, profitability, net worth and customer base etc. post-merger. In view of the above discussion and legal history analysed, we are of the considered view that order of Ld. CIT (A) is not sustainable in law and order of AO is restored as found to be based on sound legal logics. In the result Ground Nos. 1&2 of the Revenue is allowed.
Disallowance of Expenses Attributable to Real Estate Project - We found that it’s a settled legal position of law that Legal & Professional Expenses and Marketing and Business Development Expenses are time related expenses and not related to any specific project. As far as Brokerage Expenses are concerned those were incurred only towards “Dosti Ambrosia” which has been completed during the year and revenue is also offered accordingly. For A.Y. 2014-15 also on the similar grounds claim of expenses was allowed by coordinate bench of ITAT, Mumbai [2022 (9) TMI 1641 - ITAT MUMBAI] - As revenue is failed to produce any evidence or argument which differentiates the facts of the of the assessee for current A.Y. vis-à-vis A.Y. 2014-15, we respectfully follow the order of coordinate bench and dismiss the appeal of Revenue on this ground. As these are the revenue expenditure allowable u/s. 37 of the Act, further disallowance of the same and capitalising the same will tantamount to double addition, as on the one hand expenses claimed by the assessee is reduced on the other hand same are capitalised as work-in-progress will enhance the value of inventory and profits will be increased. Hence Ground No. 3 raised by the Revenue is dismissed.
Provisions made for meeting expenses in future - Assessee’s contention that since 49% of the total area is sold and a total consideration is offered to tax and a corresponding cost of construction of the total estimated cost has to be claimed following the “Matching Concept”. Regarding the balance 51% total estimated cost is carried to work-in-progress and will be claimed against the corresponding sales value - HELD THAT:- A lot of water has flown, since this matter reached to us and this issue has already been examined in depth in later years by the department itself. Now the only grievance of the revenue can be of deferment of profits, which also became irrelevant/ academic only on the given facts. Law of land laid down by Hon’ble Apex Court on this issue is very clear that on the issue of deferment of results no reopening or other actions can be taken, if otherwise there is no loss to the revenue. We found force in the arguments of assessee on the pretext of double addition. As on the one hand revenue wants to disallow the provision and on the other hand they want to add the same to WIP of the assessee, it clearly tantamount to double addition. Considering the facts of the matter along with legal principles laid down by Hon’ble High Courts and Apex Court, we found the order of Ld. CIT (A) as sustainable on above grounds and requires no interference from us. In the result Ground No. 4 raised by the Revenue is dismissed.
Addition u/s. 14A - Suo moto addition made by assessee - HELD THAT:- Before making disallowance, the AO has not given any cogent reasons for rejecting the disallowance under section 14A made by the appellant itself and resorting to the provisions of section 14A (2) read with Rule 8D. A perusal of the impugned order reveals that the AO has not properly examined the suo-moto disallowance made by the assessee. Nor has the AO expressed any opinion on the correctness or otherwise of the appellant’s claim in respect of aforesaid expenditure.
Hon’ble Apex Court in the case of M/s Maxopp Investments Limited [2018 (3) TMI 805 - SUPREME COURT] held that the AO needs to record satisfaction before invoking provisions of Section 14A reads with Rule 8D. As far as investments in partnership forms are concerned assessee was only a partner and there is no active involvement at the end of the Assessee. Hence, share of profit received by the Assessee which is exempt u/s 10(2A) cant trigger disallowance provisions of Section 14A. Decided against revenue.
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2023 (4) TMI 1377
Denial of exemption/deduction claimed u/s 11(2) - delay in filing the requisite form - whether the assessee can be denied the benefit of section 11 of the Act merely for the reason that Form-10 was filed belatedly i.e. after filing of return of income? - HELD THAT:- The question in similar facts and circumstances has been answered in the favour of the assessee in the case of Shree Harsaniji Public Charitable Trust [2022 (6) TMI 1153 - ITAT AHMEDABAD] where it was held that the benefit of Section 11 could not be denied merely due to delayed filing of Form 10 if it was submitted before the completion of rconcerned assessment. Appeal of the assessee is hereby allowed.
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