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Showing 241 to 260 of 1266 Records
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2012 (10) TMI 1036
Issues involved: Appeal against refusal of registration u/s 12A of the Act by the Director of Income Tax (Exemption), Mumbai.
Summary:
1. The assessee, incorporated as a company under section 25 of the Companies Act, aimed to promote biomedical education and research in India. The application for registration u/s 12A was rejected by the DIT (Exemption) on the grounds of premature application and non-compliance with necessary requirements.
2. The assessee contended that immediate charitable activities were not expected upon formation, citing legal precedents. The Tribunal directed the DIT (E) to grant registration if other conditions were met, disagreeing with the rejection of the application.
3. The Tribunal considered the conditions for granting registration u/s 12AA, emphasizing the genuineness of activities and the charitable nature of the institution. The association being formed for charitable purposes under sec 25(1) of the Companies Act, prima facie qualified for registration under section 12A.
4. Legal precedents highlighted that registration u/s 12A is a pre-condition for availing benefits under sections 11 and 12, focusing on the charitable nature of the trust's objects rather than immediate charitable activities.
5. In light of legal decisions and the reasons provided by the DIT (Exemptions), the Tribunal held that the refusal of registration u/s 12A was unjustified. The DIT was directed to grant registration, with a reminder that lack of genuine charitable activities could lead to cancellation of registration.
6. The appeal by the assessee was allowed, and registration under section 12A of the Act was directed to be granted by the DIT (Exemption).
Judges: B. R. Mittal (Judicial Member) and Rajendra (Accountant Member)
Date: 10th October, 2012
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2012 (10) TMI 1035
Addition u/s 14A - deduction under section 80IB on direct trading of mustard oil - addition after resorting the provision of section 145(3) - disallowance on account of interest expenses - disallowance under section 80IA on Wind Mills - addition under section 40A - addition on account of interest expenditure.
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2012 (10) TMI 1034
Genuineness of purchase of shares - notice u/s.153A - Held that:- Since the assessee was not able to satisfy the revenue authorities with the distinctive numbers of the original shares which were subsequently dematerialised and sold, the lower authorities had doubted the genuineness of the transactions. It is the submission of the learned counsel for the assessee that he is in a position to demonstrate before the AO that the consolidated share certificates received on purchase of the shares in physical form were subsequently splitted into smaller denomination and the splitted shares were sent for dematerialisation and the shares bearing the same distinctive numbers were later sold. In other words, the distinctive number of the shares sold and the shares purchased are the same.
Therefore, we, in the interest of justice, deem it proper to restore the issue to the file of the AO with the direction to give an opportunity to the assessee to substantiate with evidence to his satisfaction that the assessee has infact sent the consolidated share certificates to the respective companies for splitting and the distinctive numbers of such splitted share certificates which has gone to the DMAT account and subsequently sold are same. We accordingly restore the issue to the file of the AO for deciding the issue afresh in the light of our above observations and in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
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2012 (10) TMI 1033
Issues Involved:
1. Validity of jurisdiction assumed by the AO under Section 153C of the Income Tax Act.
2. Addition of Rs. 12.50 crores on account of alleged investment in property out of undisclosed income.
3. Reliability of evidence received through anonymous fax.
4. Importance of statements recorded under Section 132(4) of the Income Tax Act.
5. Opportunity to cross-examine witnesses.
6. Adjustment of closing balance receivable from certain individuals against alleged cash payment.
7. Proper opportunity to adduce evidence and cross-examine parties.
8. Detailed submissions not considered properly by CIT(A).
Issue-wise Detailed Analysis:
1. Validity of Jurisdiction Assumed by AO under Section 153C:
The Tribunal examined whether the Assessing Officer (AO) validly assumed jurisdiction to frame the assessment under Section 153C. The search was conducted on entities of the Piyush Group, and documents were found and seized. The AO issued a notice under Section 142(1) and framed the assessment determining a total income of Rs. 12,45,77,500/-. The assessee contested the jurisdiction, arguing that no satisfaction was recorded by the AO, a mandatory requirement for assuming jurisdiction under Section 153C. The Tribunal, however, upheld the validity of the assessment, noting that the same AO held jurisdiction over all Piyush Group cases, including the assessee company. The Tribunal found that the AO recorded satisfaction on 28.8.2009 before issuing the notice under Section 142(1) and thus, the assessment was validly framed under Section 143(3) read with Section 153C.
2. Addition of Rs. 12.50 Crores on Account of Alleged Investment in Property:
The AO made an addition of Rs. 12.50 crores, alleging that the assessee paid this amount in cash over and above the sale price of Rs. 5.50 crores for a property in Faridabad. The addition was based on documents received through fax and statements recorded during the assessment proceedings. The Tribunal found that the documents received through fax were not reliable as they were not corroborated by original documents or authenticated sources. The Tribunal also noted that the statements of Harish Singla, recorded under Section 132(4), initially denied any cash payment but later contradicted this in subsequent statements. The Tribunal held that the subsequent statements were not reliable as they were not made under oath and were recorded without giving the assessee an opportunity to cross-examine Singla.
3. Reliability of Evidence Received Through Anonymous Fax:
The Tribunal held that the fax message received from anonymous sources could not be considered valid evidence in the absence of the original agreement. The fax message was deemed unreliable and not enforceable legally or contractually. The Tribunal emphasized that a mere photocopy of a document could not be considered reliable unless the original document was brought on record.
4. Importance of Statements Recorded Under Section 132(4):
The Tribunal highlighted the evidentiary value of statements recorded under Section 132(4) during the search proceedings. It noted that Harish Singla's initial statements under Section 132(4) denied any cash payment, and these statements carried more weight as they were made under oath. The Tribunal found no valid reason for Singla's subsequent contradictory statements, which were recorded without confronting him with his earlier statements.
5. Opportunity to Cross-examine Witnesses:
The Tribunal criticized the AO for not providing the assessee an opportunity to cross-examine Harish Singla regarding his subsequent statements. It held that using these statements adversely against the assessee without cross-examination was unjust.
6. Adjustment of Closing Balance Receivable from Certain Individuals:
The AO alleged that the closing balance receivable from certain individuals was adjusted against the alleged cash payment for the property. The Tribunal found no evidence to support this claim and noted that the amounts shown as receivable were not sufficient to justify the alleged cash payment of Rs. 12.50 crores.
7. Proper Opportunity to Adduce Evidence and Cross-examine Parties:
The Tribunal noted that the assessee was not given a proper opportunity to present evidence or cross-examine the parties involved. It emphasized the importance of fair proceedings and criticized the AO for not adhering to this principle.
8. Detailed Submissions Not Considered Properly by CIT(A):
The Tribunal found that the CIT(A) did not properly consider the detailed submissions made by the assessee. It noted that the CIT(A) relied on conjectures and surmises without substantial evidence.
Conclusion:
The Tribunal concluded that the AO failed to establish beyond doubt that the property was purchased for Rs. 18 crores with Rs. 12.50 crores paid in cash. It set aside the orders of the authorities below and directed the AO to delete the addition of Rs. 12.50 crores. The appeal was partly allowed.
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2012 (10) TMI 1032
Addition u/s 69 - addition of the amounts directed by the AO, were the documents obtained by the income tax authorities in the course of a search conducted in the premises of Manav Rachna Group - Held that:- The claim of on money transactions has not at all proved in this case. As held the onus is that of revenue to prove the same and as clearly found by us above the revenue has failed to do so the same. See CIT Versus. M/s INDICATION INSTRUMENTS LTD. & vice versa [2010 (9) TMI 1112 - ITAT DELHI]
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2012 (10) TMI 1031
Issues:
The issues involved in the judgment are the conditional waiver of pre-deposit order by the Tribunal, the appellant's request for adjournment due to counsel's illness, and the subsequent vacation of the interim order by the Tribunal.
Conditional Waiver of Pre-deposit Order:
The appellant raised the question of law regarding the Tribunal's error in vacating the previous conditional waiver of pre-deposit order. The Tribunal had initially granted partial relief to the appellant in the form of conditional pre-deposit of &8377; 29,00,000/- and waiver of the balance amount. However, prior to the final hearing date, the appellant's counsel fell ill and requested an adjournment, which was rejected by the Tribunal. The Tribunal justified its decision by stating that the appellant had no right to seek adjournment in such a situation, citing relevant judgments. Despite the appellant's awareness of the hearing date, the Tribunal vacated the stay order and directed the appellant to make the deposit of the rest of the duty demand within eight weeks. The High Court found the Tribunal's order to be extremely prejudicial and harsh, especially considering the circumstances of the counsel's illness and lack of persistent default or adjournment requests by the appellant. Consequently, the High Court set aside the Tribunal's order and allowed the appeal with no costs imposed.
Adjournment Request Due to Counsel's Illness:
The appellant's counsel fell ill a few days before the final hearing date, leading to a request for adjournment. Despite the reasonableness of the request and the lack of persistent default or adjournment history by the appellant, the Tribunal rejected the application and vacated the interim order. The High Court considered the circumstances and concluded that the Tribunal's decision to vacate the stay and demand immediate payment of the duty was harsh and oppressive. The High Court, therefore, set aside the Tribunal's order and allowed the appeal without imposing any costs on the appellant.
Vacation of Interim Order by Tribunal:
The Tribunal, upon receiving the adjournment request due to the counsel's illness, deemed it an abuse of process of law and vacated the stay order granted earlier. The Tribunal directed the appellant to make the deposit of the remaining duty demand within eight weeks to protect the revenue's interest. The High Court, after reviewing the facts and the Tribunal's reasoning, found the vacation of the stay order and immediate payment demand to be unjust and oppressive. As a result, the High Court set aside the Tribunal's order and allowed the appeal, ruling in favor of the appellant without imposing any costs.
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2012 (10) TMI 1030
Sale of ESOP shares - LTCG or STCG - Date of acquisition - date of allotment - Held that:- The undisputed fact is that the assessee acquired the right in the form of employees stock option plan (ESOP) from Gillette Co. ESOPs are cashless. The assessee surrendered these rights and obtained certain amount, being the difference of the price of shares between the date of grant and the date of surrender. On these facts, in our opinion the issues are covered in favour of assessee by the decision of the Delhi Bench of the Tribunal in the case of Abhiram Seth (2011 (9) TMI 186 - ITAT, New Delhi)wherein held that the right of shares constitute capital assets and the gains should be taxed as “Long Term Capital Gains” as the holding period is more than 3 years. - Decided in favor of assessee.
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2012 (10) TMI 1029
Disallowance of communication, travel and onsite expenses - Determination of Arms Length Price for international transactions - Held that:- decision of the Hon’ble Karnataka High Court in the case of Tata Elxsi and the CIT(A) has followed the same in granting relief from disallowance u/s 10A to the assessee - Decided in favor of assessee
Held that:- No bench marking for super profit making companies is prescribed by the law - as long as two companies are functionally similar, they are to be considered as comparables - The factor of loss in the parent company would not be a guiding factor for making any adjustment to the ALP of the international transaction - If the parent company is making any losses, then the said company to claim the losses in accordance with the laws of the country in which it is taxable - the working capital adjustment is accordingly allowed for statistical purpose - Partly in favor of revenue
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2012 (10) TMI 1028
Profit on sale of shares - busniss income or capital gain - Held that:- Looking to the relevant factors including the amount of share holding of the assessee, the volume and the frequency of the purchase and sale of shares etc., it cannot be stated that the assessee was in the business of trading of shares. More significantly, we find that the assessee had sold shares only worth ₹ 83,712/- during the year under consideration inviting short term capital gain. As against that, bulk of the shares were held by the assessee for a long period of time inviting long term capital gain for a total sum of ₹ 53,84,239/-.
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2012 (10) TMI 1027
Issues Involved:
The judgment involves appeals from two different orders of CIT(A), Jalandhar, for the assessment years 2001-02 & 2002-03.
ITA No.522(Asr)/2011 - Assessment Year 2001-02:
The assessee challenged the reassessment order on grounds including incorrect jurisdiction assumption and levy of interest u/s 234. The AO issued notice u/s 148 more than five years after the end of the assessment year. The reasons recorded for the notice incorrectly stated that the assessee had not filed a return, which was factually incorrect. The income alleged to have escaped assessment was below the limit specified in section 149(1)(b). The Tribunal found in favor of the assessee, citing legal precedents and quashed the reassessment proceedings.
ITA No.523(Asr)/2011 - Assessment Year 2001-02:
Similar to the previous appeal, the assessee contested the reassessment order on various grounds. The AO issued the notice u/s 148 based on incorrect reasons and without proper jurisdiction. The Tribunal found that the income alleged to have escaped assessment was below the threshold specified in section 149(1)(b). The reassessment proceedings were quashed in favor of the assessee.
Conclusion:
Both appeals were allowed in favor of the assessee, as the Tribunal found that the reassessment notices were issued based on incorrect reasons and fell outside the jurisdictional limits specified in the relevant section. The appeals were decided in a consolidated order, and the reassessment proceedings were quashed.
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2012 (10) TMI 1026
Deduction u/s. 80IA - Formation of a new plant by splitting up of the existing business - whether the new undertaking is identifiable undertaking separate and distinct from the existing business - Held that:- generation of power unit is separate and distinct undertaking for which separate approval was obtained and recognised by the IREDA and it cannot be said that splitting of existing business structure. - Deduction u/s 80IA allowed by following earlier decision in assessee's own case [2012 (2) TMI 483 - ITAT HYDERABAD]- Decided in favor of assessee
Deduction of cost of steam - whether value can be attributed to steam - Tax evasion by inter-unit transaction of sale of steam at inflated rate - Held that:- steam produced by the assessee is eligible unit is a by-product and income from sale of steam is the income derived from industrial undertaking - deduction u/s 80-IA is allowable - Assessee to furnish necessary records for the purpose of determining the value of the steam produced and transferred to sugar unit - Decided partly in favor of assessee
Interim order of the Appellate Tribunal for Electricity - Held that:- Assessee is not the party to the proceedings - Electricity fixed rate ₹ 3.25 p.u in place of which ₹ 3.48 p.u is adopted by the assessee - AO to disallow ₹ 0.23 and calculate the disallowance based on the units supplied by the assessee to Sugar and Cement units - Decided in favor of revenue
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2012 (10) TMI 1025
Deduction u/s 10A - TPA - Comparability analysis - functional dissimilarity - analysis of functions performed - assessee engaged in providing Information Technology (IT) enabled back office services and contract software development services to COLT Group of companies.
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2012 (10) TMI 1024
Issues involved: Impugned first appellate order on deletion of penalty u/s 271D of the Income-tax Act, 1961.
Summary:
The Revenue challenged the first appellate order deleting a penalty u/s 271D of the Income-tax Act, 1961. The issue revolved around whether the share application money received constituted a loan or deposit, triggering the penalty provision. The assessee relied on a decision of the Hon'ble jurisdictional High Court of Delhi, while the Revenue cited a judgment from the Hon'ble Madras High Court. The AO held the share application money as a loan or deposit, but the assessee argued it was share capital. The CIT(A) ruled in favor of the assessee, following the Delhi High Court decision. The Tribunal upheld the CIT(A) decision, noting a divergence in judicial opinion on the nature of share application money. The Revenue's appeal was declined by the Delhi High Court, affirming the Tribunal's decision. Consequently, the appeal was dismissed, and the first appellate order was upheld based on similar facts and issues as the Delhi High Court case.
Order pronounced on 8th October, 2012.
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2012 (10) TMI 1023
Grant of registration to assessee u/s 12AA - Held that:- Object of Section 12AA of the Act, is to examine the genuineness of the objects of the Trust, but not the income of the Trust for charitable or religious purposes. The stage for application of income is yet to arrive i.e. when such Trust or Institution files its return. Therefore, we find that the judgments referred to by the learned counsel for the appellant are not applicable to the facts of the present case arising out of the question of registration of the Trust and not of assessment
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2012 (10) TMI 1022
Issues involved: Appeal by Revenue u/s 35G of Central Excise Act challenging Tribunal's order on service tax for coaching services received abroad by employees.
Question a: Whether Tribunal rightly considered Circular No.59/8/2003, Section 65 of Finance Act, and Service Tax Rules in case of M/s. Maersk (I) Ltd.?
Question b: Whether Tribunal correctly confirmed Commissioner's order without considering GATS agreement regarding service tax liability on training services consumed in business activities?
Question c: Whether Tribunal erred in dismissing appeal when services were received by Maersk employees abroad and reimbursed by Maersk, thus incurring the cost?
Summary: The appeal concerned service tax demand on coaching services abroad for employees of the respondent. The demand was based on Sections 65(105)(zzc) and 66A of the Act. The Assistant Commissioner confirmed the demand and imposed penalties. The Commissioner (Appeals) later held no service tax was payable as services were fully performed outside India. The Tribunal upheld this decision, stating coaching was availed by employees, not the respondent. The appellant did not challenge the decision for the period before 18.04.2006 but argued for tax liability post that date. However, the Court held that coaching services performed abroad and reimbursed by the respondent did not attract service tax under Rule 3(ii) of Taxation of Service Rules. The appeal was dismissed as no substantial questions of law were raised.
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2012 (10) TMI 1021
Expenditure in relation to income which does not form part of Total Income - Whether expenditure (including interest paid on funds borrowed) in respect of investment in shares of operating companies for acquiring and retaining a controlling interest therein is hit by section 14A of the Income tax Act, 1961 inasmuch as the dividend received on such shares does not form part of the total income.
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2012 (10) TMI 1020
Issues involved: Seizure of goods for undervaluation under different sections of U.P. Value Added Tax Act, correctness of seizure proceedings, burden of proof on revenue for undervaluation.
Issue (a): The Tribunal affirmed seizure u/s 48 but authorities proceeded u/s 50.
The High Court found that the value of seized goods was based on local market value, leading to the conclusion of undervaluation. The revisionist argued for valuation based on market rate at the place of purchase. Citing a precedent, it was held that the crucial value under Section 48 is the market value where the transaction occurred, not where the goods were detained. As the goods were transacted from Kerala and seized in Fatehpur, the Tribunal's conclusion of undervaluation was deemed unjustified. The Tribunal's decision was set aside, and the revision was allowed.
Issue (b): Statutory authorization for seizing goods on grounds of undervaluation.
The question arose whether officials can seize goods under Section 50 for undervaluation in Form 38 and tax invoice, despite lack of statutory authorization. The High Court's decision focused on the market value at the place of transaction, not seizure location, rendering the Tribunal's seizure affirmation incorrect.
Issue (c): Correct description of goods in Form 38 for seizure proceedings.
The Tribunal held that the applicant failed to describe goods correctly in Form 38, justifying seizure. However, the High Court found the Tribunal's findings on undervaluation to be flawed, leading to the setting aside of the proceedings.
Issue (d): Validity of Tribunal's findings on undervaluation.
The Tribunal's findings on undervaluation were deemed perverse and based on irrelevant considerations. The High Court concluded that the revenue failed to prove undervaluation, leading to the setting aside of the proceedings.
Issue (e): Burden of proof on revenue for undervaluation.
In assessing whether the revenue discharged its burden of proving undervaluation, the High Court found the Tribunal's conclusions to be erroneous. The Tribunal's decision was set aside, and the revision was allowed.
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2012 (10) TMI 1019
Estimating gross profit - rejection off books of accounts - Held that:- The assessee being a developer of the project, profit in his case, will arise on transfer of title of the property and receipt of any advances or booking amount cannot be treated as trading receipt of the year under consideration. The Tribunal further noted that such method of accounting followed by the assessee had been accepted by the revenue in earlier years. The Tribunal was, therefore, of the opinion that the Assessing Officer's decision to reject the book results during the year under consideration was not justified.
We are of the opinion that the Tribunal committed no error. If as per the accounting standard available, the assessee was entitled to claim the entire income on completion of the project and if such accounting standard was accepted by the revenue in the earlier years, in the present year, the Assessing Officer could not have taken a different stand and that too, without hearing the assessee.
Tribunal is right in law and on facts in deleting the addition in respect of deemed dividend under section 2(22)(e)
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2012 (10) TMI 1018
Winding up - Invoking Sections 433 and 434 of the Companies Act, 1956 - Held that:- The payment on the basis of concept of back to back basis, if accepted, then, it is only after that receipt of the payment by the Respondent/company from HAL, the Company is liable to make the payment, after receipt of the certified bills from the Petitioner or subject to the documentation as required. The interpretation of words “subject to material cost and reconciliation” itself is a matter which cannot be read in isolation without reading the other provisions of the contract. Therefore, in all, if there is serious question of even interpretation of the contract between the parties and unless that is adjudicated, not inclined to accept the case of the Petitioner to grant the prayers so made in the Petition, specifically when there is nothing on record to show that the Respondent/company, pursuance to this agreement/contract, has received the payment and they are deliberately avoiding to make the payment inspite of the undertaking and the bond so given. The Petitioner failed to satisfy that the Respondent company deliberately and intentionally neglecting to pay the agreed and due amount.
As the amount so claimed, as the same itself cannot be the basis for granting relief so prayed at this stage of the proceeding. Let the amount be received by the company and be payable after settling the account in accordance with the terms and conditions.
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2012 (10) TMI 1017
Issues involved: Seizure of garlic of third country origin loaded in trucks, confiscation of vehicles, imposition of penalties, non-receipt of original show-cause notice dated 24.08.2009 by the appellants, non-service of the show-cause notice resulting in violation of natural justice, provisional release of a vehicle to a party not made a party in the addendum to the show-cause notice.
Seizure of Garlic and Confiscation of Vehicles:
The trucks loaded with garlic of third country origin were intercepted and seized by Customs for violation of provisions of Customs Act, 1962. The garlic and the trucks were placed under seizure under Section 110 of the Customs Act, 1962. Later, a show-cause notice was issued on 24.08.09. The seized garlic was absolutely confiscated, and the vehicles were confiscated under Section 115 of the Customs Act, 1962 with an option to redeem on payment of redemption fines. Penalties were also imposed on the owners of the vehicles. The appellants challenged the confiscation of vehicles and imposition of penalties before the Tribunal.
Non-Receipt of Original Show-Cause Notice:
The appellants contended that they did not receive the original show-cause notice dated 24.08.2009, which was not detailed in the adjudication order by the Commissioner. The Department reported that while the copy of the show-cause notice was available, it could not be ascertained whether it was served on the appellants. The absence of the original show-cause notice was argued to result in a violation of the principle of natural justice, making the impugned order legally flawed.
Provisional Release of Vehicle and Party's Status:
One of the appellants, Smt. Meera Devi, owner of a confiscated vehicle, had the vehicle provisionally released to her but was not made a party in the addendum to the show-cause notice. The appeal was filed to safeguard her interests, as it was unclear whether she was made a party in the original show-cause notice. The confiscation of her vehicle was challenged as contrary to the law, and it was argued that she should have been included in the proceedings.
Judgment:
After considering the arguments and perusing the records, the Tribunal found that the non-service of the original show-cause notice dated 24.08.2009 resulted in gross injustice to the appellants. Additionally, the failure to include Smt. Meera Devi as a party in the proceedings raised concerns. The Tribunal set aside the order of confiscation of vehicles and imposition of penalties, remanding the cases to the Commissioner for a fresh determination. The Commissioner was directed to serve a copy of the show-cause notice dated 24.08.2009 on all appellants, allowing them to file necessary replies and providing a reasonable opportunity for a hearing. Both parties were permitted to produce necessary evidence in the fresh proceedings. All appeals were disposed of accordingly.
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