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Showing 461 to 480 of 1574 Records
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2024 (12) TMI 1114
Addition u/s 68 - Assessee not discharged its burden of substantiation of the identity, creditworthiness and genuineness of the transactions involving receipt of share application money - Tribunal justification in deleting the addition - substantial question of law or not? - HELD THAT:- In the present case, the decision of the Second Appellate Tribunal being based on evidence, the same cannot be therefore said to be perverse. It is evident that the Second Appellate Tribunal has specifically held that the genuineness and creditworthiness of the transaction in question has been fully established by the assessee respondent.
In our opinion, the aforesaid finding being a finding of fact, this Court cannot upset such finding of fact in this appeal filed under Section 260A - In fact, the first substantial question of law whether the learned Tribunal erred in law in holding that the assessee had discharged its burden of substantiation of the identity, creditworthiness and genuineness of the transaction involving receipt of share application money being essentially a question of fact is not a substantial question of law.
Second substantial question of law that whether the learned Tribunal was justified in deleting the addition u/s 68 of IT Act of share application money received from M/s. Shantidham Marketing Pvt. Ltd and M/s. Orchid Finlease Pvt. Ltd. is also essentially a question of fact and is not a substantial question of law.
Both the Appellate Authority and the Second Appellate Tribunal has recorded findings in respect of the genuineness of the transaction in question and the creditworthiness of the shareholders concerned based on evidences and materials placed by the assessee and hence, such finding once recorded by both the authorities on the basis of evidence, the same is not liable to be interfered with by the Third Appellate Court, unless an error of law as contemplated under Section 260A of the IT Act is made out.
No question framed by this Court involves any substantial question of law within the meaning of Section 260A of the IT Act, nor any perversity as such is pointed out in the impugned findings and hence, this Court cannot interfere in the impugned finding of fact recorded by the Second Appellate Tribunal. Decided against revenue.
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2024 (12) TMI 1113
Reopening of assessment by invoking section 150 - whether the provisions of Section 150 of the Act were appropriately invoked by the AO for the purpose of reopening the assessment for the AY 2007-08 in respect of the assessee herein? - HELD THAT:- The language of Section 150 (1) of the Act is also relevant for the purposes of determining whether a notice u/s 148 could be issued notwithstanding the period of limitation stipulated u/s 149 of the Act. The non obstante clause of Section 150 (1) of the Act is applicable only where a notice u/s 148 of the Act is required to give effect to any finding or direction contained in any order passed by any authority in any proceedings under the Act.
It is clear that the nature of the findings or directions contemplated are such that a notice u/s 148 of the Act is warranted for the purposes of giving effect to the findings. The findings are required to be dispositive of the issue concerned and only the procedure is required to be involved to give effect to the same.
We are unable to accept that any of the orders passed in the case of Sh. Pawan Kumar Bansal and Sh. Mahesh Kumar Bansal are dispositive of the assessee’s liability to pay tax and therefore, no notice u/s 148 of the Act was warranted for giving effect to any such finding.
We hold that it is clear from the perusal of the order of the Coordinate Bench of this Court [2015 (8) TMI 373 - DELHI HIGH COURT] as well as the order of the learned ITAT, CIT(A) that in none of the orders, there was any finding or direction that the undisclosed income of Rs. 7 crores was required to be assessed to tax in the hands of the assessee, which warranted issuance of notice u/s 148 of the Act to give effect to such finding or direction.
We are thus of the view that in the present case, the learned CIT(A) and the learned ITAT have rightly examined the decisions [2014 (10) TMI 221 - ITAT DELHI] and connected matters, and of Coordinate Bench of this Court in [2015 (8) TMI 373 - DELHI HIGH COURT], and held that there was no finding or direction given by the Courts on the basis of which powers u/s 150 of the Act could have been invoked for issuance of notice u/s 148 of the Act beyond the period stipulated u/s 149 of the Act.
We opine that the conditions set out in Section 150 of the Act were not fulfilled in the present case, and the reassessment proceedings could not have been initiated by the AO by issuing notice under Section 148 of the Act, and the learned ITAT made no error in holding so. Decided in favour of the assessee.
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2024 (12) TMI 1112
Reopening of assessment u/s 147 against non-existent entity -impact of an amalgamation - HELD THAT:- Reassessment action we find that the impugned proceedings are additionally liable to be invalidated on the ground of the same having been framed in respect of a non-existent entity.
We had while dealing with the issue of the impact of an amalgamation and the continuation of proceedings against the amalgamating entity, in International Hospital Limited [2024 (9) TMI 1631 - DELHI HIGH COURT] wherein position in law appears to be well-settled that a notice or proceedings drawn against a dissolved company or one which no longer exists in law would invalidate proceedings beyond repair. Decided in favour of assessee.
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2024 (12) TMI 1111
Revision u/s 263 - as per CIT transfer of shares was clearly a sham and a colourable device - HELD THAT:- Commissioner appears to have taken the view that the transfer of shares was clearly a sham and a colourable device and that it was Genpact India’s motive to avoid the payment of a Dividend Distribution Tax [DDT] u/s 115-O of the Act. On the basis of the aforenoted significant conclusions, the Commissioner came to form the opinion that the view rendered by the AO would merit correction u/s 263.
This led to the respondent-assessee approaching the Tribunal. The Tribunal has, while dealing with the appeal preferred by the respondent-assessee, essentially come to hold that in the absence of the Commissioner having come to conclude that the AO had failed to undertake the requisite inquiry as contemplated, there was no justification for the assessment order being revised. It has ultimately taken note of the precedents rendered on the scope of the power which stands placed in the hands of the Commissioner by virtue of Section 263 and has come to the firm conclusion that the Order-in-Revision was clearly unsustainable. No substantial question of law
Commissioner is clearly rendered unsustainable on a more fundamental plane. As is evident from the extracts of the order passed in revision, the principal allegation appears to have been that the device adopted by Genpact India was intended to avoid the payment of DDT as contemplated u/s 115-O.
Undisputedly, that dividend would have to be one which would have been declared by Genpact India. We are, however, and in the present case, concerned with an assessment proposed to be made in the hands of Headstrong HCS, now known as Genpact Consulting Pte. We thus find ourselves unable to appreciate how a perceived liability in the hands of Genpact India could be viewed or considered as being relevant for the purposes of formation of opinion that the assessment of Genpact Consulting was erroneous and prejudicial to the Revenue.
The appellants have failed to establish that even if the view as expressed by the Commissioner were assumed to be correct, any additional tax liability would have been foisted upon Genpact Consulting.
We take note of an identical position which obtained in the case of Genpact Luxembourg S.A.R.L. [2024 (8) TMI 759 - DELHI HIGH COURT] and which had assailed the initiation of Section 148 proceedings.
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2024 (12) TMI 1110
Delay of 53 days in preferring the appeal - Justifiable reasons for delay - registration u/s 12A - HELD THAT:- Expression ‘sufficient cause’ employed in sub-section (5) of Section 253 of the IT Act must receive a liberal construction so as to advance substantial justice and generally delays in preferring appeals are required to be condoned in the interest of justice where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condonation of the delay.
The party should show that besides acting bona fide, it had taken all possible steps within its power and control and had approached the court without any unnecessary delay. The test is whether or not a cause is sufficient to see whether it could have been avoided by the party by the exercise of due care and attention. (See Balwant Singh v. Jagdish Singh [2010 (7) TMI 556 - SUPREME COURT])
The expression “sufficient cause” necessarily implies an element of sincerity, bona fide and reasonableness.(See Sankaran Pillai v. V.P. Venuguduswami [1999 (7) TMI 717 - SUPREME COURT])
Appellant has explained that on account of wrong advise of his counsel to reapply for registration, he had firstly preferred application afresh u/s 12A of the IT Act for registration and thereafter, due to delay in deciding the second application for registration and realising the mistake, he preferred appeal with a delay of 55 days, that is how the delay in filing the appeal has taken place.
The cause shown for delay in filing the application supported by affidavit remains uncontroverted and it would constitute “sufficient cause” within the meaning of Section 253 (5) of the IT Act. The rejection of application for condonation of delay has serious civil consequences upon the status of the Society, as by rejection of the application of the appellant Society, the Society would not be able to claim tax exemption under the provisions contained in Sections 11 & 12 of the IT Act, and that too in absence of counter-affidavit filed by the Revenue opposing the application for condonation of delay supported by affidavit.
ITAT ought to have condoned the delay in preferring the appeal as there is no allegation that delay in filing the appeal is mala fide or it is deliberate, rather it is bona fide based on wrong advise of his counsel to reapply for registration.
In that view of the matter, the order impugned passed by the Income Tax Appellate Tribunal is set aside and delay of 55 days in preferring the appeal is hereby condoned.
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2024 (12) TMI 1109
Unexplained Cash Credits u/s. 68 - assessee is engaged in the business of computer peripherals who has deposited a sum in Specified Bank Notes (SBNs) post-demonetisation - only reason given by the AO for making the addition is that assessee was not authorised to receive SBNs post-demonetisation - HELD THAT:- As undisputed fact that assessee has shown the books of account including cash book and sales ledger for verification of ld. AO. Source of cash deposit is the sales accounted for by the assessee in his books of account.
Neither the ld. AO nor the ld. CIT(A) made any enquiry with respect to sales shown by assessee out of which cash is deposited. No doubt, the assessee was not authorised to received SBNs after demonetisation, but when assessee has received and deposited the same and also offered the same as his income, no further addition could have been made in the hands of assessee. Here assessee has also shown the nexus of sales and amount of cash deposited.
In the decision of Sreelekha Banerjee [1963 (3) TMI 47 - SUPREME COURT] held that when the assessee has shown sales of SBNs and same remains undisputed, no addition can be made in the hands of assessee. In view of this, we reverse the order of the ld. CIT(A) and direct the AO to delete the addition on account of SBNs deposited by the assessee in his bank account. Ground nos. 1 & 2 of the appeal are allowed.
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2024 (12) TMI 1108
Unexplained unsecured loans u/s 68 - HELD THAT:- Assessee has given the details related to bank statement of all the four parties who are relatives of the assessee as well as the statement showing remittance from USA and Canada including that of confirmation affidavit, bank statement, PAN card details and passport details of all these parties. These aspects were not taken into account by the AO as well as by the CIT(A). Hence, the addition made is not justifiable. Thus, appeal of the assessee is allowed.
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2024 (12) TMI 1107
Approval taken u/s 153D is mechanical - HELD THAT:- As noted that in the present case, the assessee group has 110 assessments for which approval was placed before JCIT on the same date i.e., 29/12/2017 and total assessees were 19 different assessees. The approval is purely mechanical in nature and hence, the assessment is liable to be quashed and, is accordingly quashed.
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2024 (12) TMI 1106
TDS u/s 194C - disallowing ‘Crew Wages Expenses’ made u/s.40(a)(ia) - view of the AO was that on payment of “crew wages expense”, the assessee being a sub-contractor was required to deduct the tax at source as prescribed under sub-section (2) of section 194C. On the other hand, the assessee’s contention is that the assessee has not acted as a sub-contractor but only as a contractor. As per assessee’s contention it was a principal to principal arrangement for providing crew to carry out scrapping activity, so not covered by any of the said contracts.
HELD THAT:- Board’s Circular No. 715 dated 8-8-1995 [215 ITR (Statute 12)] issued by the CBDT, if we examine the issue in hand, then in terms of the provisions of section 194C(2) of the Act conditions to be satisfied are (i) that the assessee should be a contractor, (ii) that the assessee should enter into a contract with a sub-contractor, (iii) that the sub-contractor should carry out any part of the work undertaken by the contractor and (iv) that the payment should be made for the work done. In a case, when a “contract” is assigned, generally the clauses are stringent that the contractor is to be responsible for all the acts and defaults committed.
In the present case as well, when M/s. Western Oversea Ohio INChad granted sub-contract to assessee then the assessee was to deploy his own resources in terms of manpower. Further the assessee was responsible of any legal or financial liability. Assessee was made solely responsible for the execution of the job. These terms, therefore, suggested that the assessee was wholly and exclusively responsible for the acts as also for the defaults, if committed.
The catalogue of criterion must include certain other clauses as well, yet in this case this criterion can be determinative considering the nature of work assigned by the assessee to workers. It is not the case of the A.O. that he happened to be in possession of some material to allege that there existed a specific contract between the assessee and the crew wage workers. Whether the manpower were supplied in pursuance of any sub-contract so as to apply the provisions of section 194C(2)? Nothing has been brought on record.
We, therefore, conclude that in the absence of transfer or pass-over of any contractual responsibility to crew wage worker as a sub-contractor, the assessee being an individual was not responsible for the deduction of tax at source as prescribed u/s. 194C of the IT Act. Consequence thereupon the provisions of section 40(a)(ia) of the Act were incorrectly invoked, hence the view taken by the authorities below are hereby reversed.
Reliance has also been placed before us on the decision of Prashant H. Shah [2012 (6) TMI 535 - ITAT AHMEDABAD] wherein on similar fact, the tribunal held that section 40(a)(ia) has been incorrectly imposed. Thus, the Ground raised by the assessee is allowed.
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2024 (12) TMI 1105
Additions towards cash deposits - genuineness of cash sales and the corresponding cash deposits not proved - HELD THAT:- As emerges from the first appellate order, it is the case of the assessee that source of cash deposits in question bears direct nexus to the cash sales made prior to the deposits. The cash sales are stated to be out of purchase made. The cash sales, when seen in the context, appears quite negligible hovering at less than 10% of the total sales. The assessee is engaged in trading of cloth.
It is common knowledge that such trading do involve cash sales. The assessee in the instant case also contends that the cash sales have been made to the retail shopkeepers who are holding GST registration.
The accounts of the assessee are subjected to statutory audit and other audits. The book results declared by the assessee include cash sales which has given rise to the cash deposits. Significantly, the books of accounts have not been rejected.
Thus, cash sales (less than 10% of the total turnover) stands accepted for the purposes of determination of taxable income. The source of cash deposits thus are clearly attributable to cash sales. Besides, the assessee has also furnished ledger accounts of its main customers where the sales and the payment of cash to the assessee has been confirmed by the corresponding customers.
CIT(A), on analysis of facts, noticed that the assessee has furnished confirmation of more than 40 parties to whom cash sales have been made. Similar cash sales and corresponding cash deposits have been demonstrated in preceding two AYs as well as subsequent AYs. Thus, the cash deposits made are in the ordinary course of carrying of business and cannot be seen with any kind of suspicion as rightly held by the CIT(A). Clearly, the factual matrix, when seen in totality, holds the sway in favour of the assessee and against the Revenue.
The cash deposits thus cannot be seen by applying a different yardstick. Not only sales have been made to GST registered customer, the confirmatory letters also vouches for bonafides of transactions.
AO on the one hand, assessed cash sales and on the other hand also made additions towards cash deposits resulting in double jeopardy and double taxation of the same transaction. The rudimentary accounts principles do not permit such treatment. The additions towards cash deposits has been rightly cancelled and set aside by the Ld. CIT(A). Appeal of the Revenue is dismissed.
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2024 (12) TMI 1104
Capital gain computation - Indexed cost of shares of foreign company deduction while computing the long term capital gain - HELD THAT:- We noticed that the second proviso to section 48 of the Act, which grants indexation benefit, does not distinguish assets into assets held in India and in foreign countries. Accordingly, assessee cannot be denied benefit of cost inflation index in respect of assets held in foreign countries.
Accordingly, we are of the view that the AO was not justified in not granting indexation benefit to the assessee in respect of sale of shares of foreign company. Accordingly, we affirm the order passed by the CIT(A) on this issue. Appeal filed by the Revenue is dismissed.
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2024 (12) TMI 1103
Issuance of a direction upon the respondent-Customs authorities to release the consignment of 700 bags of sugar in favour of the petitioner which was seized - violation of Section 7 (1) (c) of the Customs Act, 1962 - goods perishable in nature - HELD THAT:- On consideration of the limited gamut of facts required to deal with the issue at hand, we are of the considered view that the petitioner should approach the Adjudicating Officer, i.e. the Additional Commissioner/Joint Commissioner, Customs, Agartala with an application in a proper format for release of the perishable goods duly supported with all necessary facts and documents in terms of Section 110 (1-A) of the Customs Act, 1962 within a period of 4(four) days from today. On receipt of such application, the Adjudicating Officer/ Additional Commissioner/Joint Commissioner, Customs, Agartala would take a decision in accordance with law, preferably within a period of 10 (ten) days from the date of receipt of such application after complying with the principles of natural justice.
Petition disposed off.
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2024 (12) TMI 1102
Seeking to challenge an Order-in-Original on the grounds that it violates the principles of natural justice - HELD THAT:- There has been a violation of principles of natural justice since there is no justifiable reason for respondent No. 2 not considering the request for adjournment made by the petitioner’s advocate on 29 October 2024, requesting for the matter to be kept after 11 November 2024 since the advocate was out of town on account of Diwali vacation. There is no reason given by respondent No. 2 why the said adjournment request could not have been acceded to. This rejection was also not communicated to the petitioner. The resultant action is disproportionate. Another opportunity should have been granted - the interests of justice would be met if such an opportunity is given by requiring the petitioner to pay costs.
There has been a violation of the principles of natural justice, and consequently, the impugned order dated 4 November 2024 is required to be quashed and set aside, and the matter is remanded back to the file of respondent No. 2 for giving an opportunity of hearing to the petitioner and after hearing the same pass a reasoned and speaking order - Petition disposed off by way of remand.
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2024 (12) TMI 1101
Maintainability of petition - availability of alternative remedy - Seeking to set aside the impugned order and to release the goods forthwith - violation of principals of natural justice - HELD THAT:- The Apex Court in the case of HINDUSTAN COCA COLA BEVERAGE (P) LTD. VERSUS UNION OF INDIA AND OTHERS [2014 (9) TMI 585 - SUPREME COURT] has held that when the statute provides for statutory appeal, the said remedy is to be availed by the litigating parties. In HAMEED KUNJU VERSUS NAZIM [2017 (7) TMI 1414 - SUPREME COURT] the Apex Court held that any petition under Article 227 of Constitution of India should be dismissed in limine when there is statutory provision of appeal. In another case ANSAL HOUSING AND CONSTRUCTION LTD. VERSUS STATE OF U.P. AND ORS. [2016 (3) TMI 1435 - SUPREME COURT] it is held that when there statutory appeal is provided, then the said remedy has to be availed.
In view of the aforesaid and also looking to the fact of availability of an efficacious alternative remedy of appeal under Section 129-A of the Customs Act, 1962, it is not proper to entertain this petition. Petitioner would be at liberty to avail the alternative remedy in accordance with law, if so advised.
Petition dismissed.
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2024 (12) TMI 1100
Confiscation of the seized goods and vehicles - smuggling - failure to consider the fact that the appellant had purchased the said goods from the farmers of Jaitiya Panchayat, which is located within the territory of India and transportation was made within the permissible limit in the country - HELD THAT:- On 04.04.2018, the officers of SSB intercepted two Vehicles within the territory of India and handed over the vehicles carrying the goods to officers of the Customs Circle at Bettiah on 05.04.2018. The appellant has made the submission that the goods available in the two vehicles were of Indian origin and have also submitted cash receipts duly signed by the farmers evidencing purchase of the goods within the territory of India. It is observed that the investigation has not brought in any evidence to counter the claims made by the appellant that the goods were of Indian origin.
It is observed that these goods are not notified goods under Section 123 of the Customs Act, 1962, and hence the onus is on the Department to prove that the goods are smuggled in nature. The Department has failed to produce any evidence to establish the smuggled nature of the goods. Accordingly, the goods are not liable for confiscation under Sections 111(b) & (d) of the Customs Act, 1962. As the goods are not liable for confiscation, the penalty imposed on the appellant under section 112 of the Customs Act, 1962 is also not sustainable and hence the same is set aside.
The confiscation of the goods viz. Rahar Dal (8500 kgs.) and Urad (8500 kgs.) collectively valued at Rs.7,65,000/- and the penalty imposed on the appellant are set aside - appeal allowed.
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2024 (12) TMI 1099
Restoration of Appeals filed by M/s Himachal Fashion Pvt Ltd against CESTAT Final Order - failure on the part of appelant to appear for hearings - HELD THAT:- The appellant waited for one full year after the withdrawal of the Vakalatnama of the earlier advocate, to approach and appoint a new advocate. Further, when the Final Order was issued on 19.03.2024 which as per the prevalent practice is also uploaded, there are no justifiable reason for the appellants to appoint an advocate on 23.08.2024 to pursue the appeal, merely for filing the present Restoration of Appeal (ROA). This clearly evidences that the appellant and the co-noticee have failed to take interest to agitate their appeals before this Tribunal. When an advocate withdraws his Vakalatnama, it was the responsibility of the appellants to appoint another advocate to represent them during the proceedings of appeal.
Restoration of Appeal (ROA) is not a matter of right of the appellants. It is not to be permitted in routine manner, and is permitted only in exceptional cases where it is inevitable and there are valid reasons for restoring the appeal. In the instant application, the appellant/co-noticee have failed to submit any valid reasons for failing to appear as and when the case was posted for hearing. Adjournments can be sought, but for valid reasons only. However, no valid or justifiable reason has been submitted by the Ld Counsel for failing to appear on the seven opportunities offered to the appellant by this Tribunal.
In the instant case, the Tribunal has decided the case on merits taking into the grounds of appeal from the Appeal Memorandum filed by the appellant and the co-noticee. Further, as per proviso to Section 129B (1A) of the Customs Act, 1962, there was no necessity for CESTAT to offer more than three adjournments. However, this Tribunal had offered seven(7) opportunities but the appellant failed to appear. It is also noted that as per Rule 21 of CESTAT (Procedure) Rules, 1982, CESTAT has powers to pass final order ex-parte if the appellant does not respond to repeated offer for hearings.
Appeal dismissed.
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2024 (12) TMI 1098
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - time limitation - Whether the relevant column in Section 7 Application having not been amended by Respondent No.1, other materials can be looked into for the purposes of finding an acknowledgement within the meaning of Section 18 of the Limitation Act? - it was held by CESTAT that 'The acknowledgement continues in balance sheets as on 31st March, 2016 and 31st March, 2017. Hence, the Application under Section 7 of the IBC filed in 26th December 2018 is well within limitation and has rightly been admitted by the Adjudicating Authority.'
HELD THAT:- It is not required to interfere with the order passed by the National Company Law Appellate Tribunal - The Civil Appeals are dismissed.
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2024 (12) TMI 1097
Challenge to NCLAT judgment on default by a suspended Director - HELD THAT:- It is clear that, all issues which are required to be adjudicated, including the facts, have to be raised and decided before the adjudicating authority, that is, the National Company Law Tribunal.
Appeal dismissed.
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2024 (12) TMI 1096
Non-grant of NOC by ED - legal framework under FEMA, 1999, which governs the issuance of such NOCs as a prerequisite for making ODIs - HELD THAT:- As prima facie the Petitioners’ emphasis on adherence to the valuation norms prescribed under FEMA regulations holds merit. They are correct in pointing out that the rules mandate that valuations must be conducted by Category-I merchant bankers registered with SEBI or overseas merchant bankers accredited by the host country’s regulatory authority. TIL has complied with this requirement by engaging a SEBI-registered merchant banker.
If the Respondents indeed possess cogent material indicating overvaluation or misuse of foreign exchange, they ought to have initiated proceedings under FEMA, 1999, to substantiate these claims. Presently, it is only an allegation of ED that there has been overvaluation. Therefore, at this stage, the valuation conducted by an expert body which is relied upon by the Petitioner has a probative force and is only being doubted by the ED on the grounds of suspicion.
The refusal to grant an NOC must be predicated on clear, cogent, and rational reasons. Mere issuance of summons, absent any formal finding of contravention under Section 4 of FEMA, 1999, or violations of Sections 131 and 132 of the Income Tax Act, 1961, does not meet this threshold. Furthermore, the Court also finds merit in the contention of the Petitioner that the penalty for violations of the provisions of FEMA, 1999 are fiscal in nature and under Section 13 of FEMA, the fiscal penalty would be three times the amount so invested or INR 2 Lakhs in cases where the invested amount is not quantified.
On the other hand, the denial of NOC by ED in the present case, has completely restricted the Petitioners from remitting money abroad to its subsidiaries.
The prolonged investigation without any conclusion, coupled with a lack of action under FEMA, is insufficient to justify the denial of the Petitioners’ right to make further investments. The Petitioners have a legitimate expectation of conducting their business unhindered, particularly in the absence of definitive findings against them. In sum, mere issuance of summons under Section 37 (1) of FEMA, 1999, without any finding of contravention under Section 4 of FEMA, 1999, and the alleged non-compliance with the provisions of Section 131 and 132 of the Income Tax Act, 1961, cannot be a valid ground for denial of the NOC.
It is the Authorised Dealer (bank) who have to ensure that the person making the overseas investment has complied with the conditions prescribed in the FEMA OI Rules, Regulations and Directions. In fact, in the FEMA OI Directions, 2022, under Clause 27, it is provided that the AD shall render themselves liable for penal action under Section 11 and 13 of FEMA, 1999, in case they facilitate remittances without obtaining the requisite documents.
It is also important to take note of Section 10(5) of FEMA, 1999, under which, before undertaking any transaction in foreign exchange the authorised person has to reasonably satisfy themselves that the transaction will not involve and is not designed for contravention of any provision of the Act/Rules/Regulations. These regulatory provisions will continue to apply notwithstanding the issuance of LOC and therefore, safeguard the interest of the State.
Respondents have thus not demonstrated the contravention of FEMA, 1999 with clear basis, in order to deny the NOC. There must be a nexus between the alleged contravention and the proposing investment which has not been established in the present case. Since the Petitioners have, in good faith, complied with regulatory requirements, it is unreasonable to subject them to indefinite uncertainty.
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2024 (12) TMI 1095
Challenge to delay in adjudication proceedings by the respondents - prayer to quash the SCN - HELD THAT:- The explanation of reconstruction is general in nature. Even accepting the same, there is no justification as to why from 2003/2008 till 2014, the Tribunal’s directions could not be complied with. Therefore, even accepting the reasons given by the revenue and in the absence of any explanation for non-adjudication from 2003/2008 upto 2014, continuation of the present proceedings cannot be justified on this ground - Post 2014 till 2024, also there has been no adjudication of the directions given by the Tribunal. The reconstruction reason given cannot go on forever and, therefore, even on this account post 2014, there is no explanation for non-adjudication of the Tribunal’s directions.
Therefore, looked at from any angle in the absence of any justifiable reason for not carrying out the directions of the Tribunal, thereby delaying giving effect to the Tribunal’s order for more than 13/18 years, the impugned show cause notices dated 9 May 2000 are quashed and set aside.
Application disposed off.
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9911796707
