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Showing 61 to 80 of 1230 Records
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2014 (5) TMI 1173
Exemption u/s 11 - disallowance of depreciation - violation of provisions of sec. 13(1)(c) by making payment to the wife (Ms. Meenakshi Sundararajan) of founder of the trust - Held that:- In the present case, the assessee trust has been created on 1.2.1961. This is before the commencement of the Income-tax Act, 1961. As per Clauses 36 to 41 of the Memorandum of Association of the assessee trust, Ms. Meenakshi Sundararajan is entitled for honorarium in rendering services to the benefits of the assessee society. Therefore, as rightly argued by the learned counsel, the payment made to Ms. Meenakshi Sundararajan is covered by the said exemption. - Exemption allowed - Decided in favor of assessee.
Claim of depreciation - double benefit - Held that:- In fact, there is no question of double benefit. An assessee is getting the benefit of application of funds for charitable purposes from the income computed according to normal accounting practices. Accordingly, it is to be seen that there is no clash between providing depreciation allowance and recognizing the application of funds for charitable purposes.
Decided in favor of assessee.
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2014 (5) TMI 1172
Registration under section 12AA denied - non charitable activities - Held that:- As confirmed in JAMMU DEVELOPMENT AUTHORITY case [2013 (11) TMI 1578 - JAMMU AND KASHMIR HIGH COURT] wherein it has been held that the objects like sale and purchase of properties makes the Authority, a commercial organization and in absence of any restriction on application of asset for charitable purpose in the event of dissolution or winding up, the objects pursued by the assessee cannot be said to be a charitable in nature.
We find no merit in the claim of registration made by the assessee under section 12A of the Act and we uphold the order of Commissioner of Income Tax in refusing to grant registration under section 12AA of the Act. Appeal of the assessee is dismissed
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2014 (5) TMI 1171
Addition u/s 40A(3) - argument of the Revenue is that when old gold purchases are made from A and new ornaments sold to B, provisions of Rule 6DD will not be applicable - Held that:- The transaction considered in this case is of same person purchasing new gold ornaments from the assessee against old gold ornaments. In such a case, clause (d) of Rule 6DD clearly applies. The said clause reads that where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assessee to such payee is exempted from the operation of Section 40A(3). Therefore, in the present case, as rightly pointed out by the Commissioner of Income Tax (Appeals), the case of the assessee is protected by clause (d) of Rule 6DD.
The Revenue has raised a contention in the grounds that the assessee may not raise separate bills for purchase of old gold and for sale of new gold ornaments. This view is not correct. There is levy of purchase tax by the State Government on purchase of old gold ornaments. For that matter, the assessee has to keep a separate account of old gold purchase supported by purchase invoices. Likewise, sale of new gold ornaments are again subject to sales tax for which the assessee has to maintain separate sales account supported by sales invoices. - Decided in favour of assessee
Disallowance being hedging loss treated by the assessing authority as speculative loss - Held that:- In the present case, the assessee has entered into a future contract to guard against the loss through future price fluctuations in gold. The assessee is in the business of manufacturing and merchanting of gold. Therefore, the future contract entered into by the assessee is straightaway covered by the first exception provided in clause (a) of Section 43(5). We find that the Commissioner of Income Tax (Appeals) is right in his decision.
Unexplained cash credits - Held that:- The assessee- company has passed journal entries with the concerned amounts, crediting the personal account of the Director and debiting the various expenditure to nominal accounts of the assessee-company. In fact, all the credits reflected in the personal account of the Director of the assessee-company are correspondingly very much reflected on the debit side of different expenditures and nominal accounts of the assessee-company. In that way, these cash credits are self-explaining in the books of accounts itself. There is no basis for the Assessing Officer to treat these credits as unexplained cash credits - Decided in favour of assessee.
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2014 (5) TMI 1170
Reopening of assessment - no opportunity to cross examine - Held that:- A.O. has been heavily carried away by the information of DDIT(Inv) and has ignored the fact that the share application money was received on 22.03.2006 through cheque No. 453639. M/s. Alliance Intermediatories and Network p. Ltd. is assessed to tax. Board’s resolution and confirmation of this company was filed before A.O. All these documents establish the identity of the share applicant and the genuinity of the transaction is also proved on record. The statement of Shri Mukesh Choksi was recorded at the back of the assessee and no opportunity to cross examine him was given to the assessee.
A.O. has not made his independent inquiries and verification to ascertain the correct facts. Therefore, we can safely hold that the assumption of jurisdiction by A.O. u/s 147 r.w.s. 148 is invalid and the assessment so made becomes authorities below initio void. However, we quash the order made u/s 147/143(3) of the Act in question and also hold that the addition of ₹ 5 lakhs in assessee’s hands is not warranted. Accordingly, we allow the appeal by the assessee.
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2014 (5) TMI 1169
Reopening of assessment proceedings u/s 147 - bogus share capital receipt - non independent application of mind by AO - borrowed knowledge - Held that:- The reason recorded by the Assessing Officer were merely on the basis of information received from DDIT (Inv.) Udaipur and Mumbai, therefore, from the so called reason, it was not at all discernable as to whether the Assessing Officer had applied his mind to the information and independently arrived at a belief that on the basis of the material which he had before him the income had escaped assessment, therefore, the reassessment u/s 147 of the Act was not valid and accordingly the same is quashed. - Decided in favour of assessee
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2014 (5) TMI 1168
Addition on account of write off of the principal portion of cash credit loan waived by Banks - Held that:- As decided in assessee's own case A.Y. 2008- 09 [2014 (1) TMI 1840 - ITAT PUNE] the answer would depend upon the purpose for which the said loan was taken. If the loan was taken for acquiring the capital asset, waiver thereof would not amount to any income exigible to tax. On the other hand, if this loan was for trading purpose and was treated as such from the very beginning in the books of account, as per T.V. Sundaram Iyengar and Sons Ltd. [1996 (9) TMI 1 - SUPREME Court] the waiver thereof may result in the income more so when it was transferred to the profit and loss account - CIT(A) has rightly confirmed the addition made by the AO to the extent of waiver to the cash credit loan - Decided against assessee.
Addition on account of section 35(2AB) - approval is not in prescribed Form No. 3CM - Held that:- As decided in assessee's own case A.Y. 2008- 09 [2014 (1) TMI 1840 - ITAT PUNE] the finding of the Ld. CIT(A) are acceptable that if the approval is not in prescribed Form No. 3CM is not a serious discrepancy which should result in disallowance of the deduction to the assessee u/s. 35(2AB) of the Act. In this case, it is not disputed that the assessee has applied to the competent authority for getting the approval/recognition and only after the verification of all the details the Prescribed Authority have issued the approval letter. CIT(A) has rightly allowed the claim of the assessee - Decided in favour of assessee
Addition on account of principal amount of waiver of loan - Held that:- As decided in assessee's own case A.Y. 2008- 09 the nature of the loan which has been waived in one time settlement is not disputed. In our opinion, the assessee’s case is squarely covered by the decision in the case of M/s. Xylon Holdings Pvt. Ltd. (2012 (9) TMI 449 - BOMBAY HIGH COURT) as the amount waived pertains to the term loan which was taken by the assessee for acquition of the assets. CIT(A) rightly deleted the addition made by the Assessing Officer on account of principal amount of waiver of loan.- Decided in favour of assessee
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2014 (5) TMI 1167
Reopening of assessment - legal expenses and charges allowability - expenditure incurred towards filing of patent applications should have been treated as capital expenditure - failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment - Held that:- All material facts with reference to the deductions claimed by the Petitioner in respect of the legal expenses and charges, were disclosed by the Petitioner not only during the original assessment proceedings but also during the scrutiny assessment, which culminated in the assessment order dated 30th December 2008. We therefore find that in fact there had been no failure on the part of the Petitioner to disclose fully and truly all material facts as required under the first proviso to section 147 of the Act.
On a perusal of the reasons for initiating to assessment proceedings, we find that it is not even the case of Respondent No. 1 that any new tangible material was brought to his notice which led him to believe that income had escaped assessment. As stated earlier, all material facts were disclosed by the Petitioner in proceedings that were undertaken under sections 142(1) r/w 143(2), which finally culminated in the assessment order dated 30th December 2008 under section 143(3). It is therefore evident that Respondent No. 1 after passing the original assessment order dated 30th December 2008 has changed his opinion and issued the impugned notice under section 148.
The reasons for the impugned notice as well as the impugned order proceed on the basis that a patent is a capital asset and hence expenditure incurred towards filing of patent applications should have been treated as capital expenditure. Since it was treated as a revenue expenditure, there was computation of excessive loss which resulted in income escaping assessment. Therefore now, despite the fact that in the original assessment order this very expenditure was allowed as a revenue expenditure, Respondent No. 1 now seeks to treat the same as a capital expenditure. This to our mind is nothing but a "change of opinion", and hence Respondent No.1 had no jurisdiction to re-open the assessment proceedings. - Decided in favour of assessee.
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2014 (5) TMI 1166
Penalty u/s 271(1)(c) - voluntary surrender of income - Held that:- In the present case, the assessee did produce all the relevant material in the form of books of account, bank statements, vouchers, sale bills etc. During the course of further enquiry in the assessment proceedings. The assessee voluntarily offered a sum of ₹ 75 lacs for assessment stating that even though all the material existed, yet in order to buy peace it was offering the amount to tax.
The facts of this case are clearly such that the decision in MAK Data (2013 (11) TMI 14 - SUPREME COURT), in the opinion of this Court, cannot be attracted. The assessee at no point seem to have accepted the revenue’s contentions that such claimed expenditure was bogus and that it was not allowable, he offered the amount only to buy peace. There is also no finding by the AO that the appellant had failed to offer an explanation in respect of the income returned or had failed to disclose material particulars. - Decided in favour of assessee.
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2014 (5) TMI 1165
Disallowance u/s 14A r.w.r. 8D - Held that:- The payment of interest amounting to ₹ 2,90,95,369/- to Bank of India on account of loan taken of ₹ 30 crores by the assessee during earlier years, which was evident from the sanctioned letter of Bank of India dated 18.05.2006 addressed to the assessee of the credit facilities and terms & conditions mentioned therein in the annexure attached to the same. Thus, the aforesaid amount of loan of ₹ 30 crores had exclusively been assigned with respect to purchase of wind mill from M/s. Enercon was found undisputed. The assessee has also credited an amount of ₹ 7,56,61,095/- on account of sale of power and has also shown profit of ₹ 4,77,10,734/- in Profit & Loss Account from wind mill business. As observed that the aforesaid interest could not be held to be in any way to be related to the earning of exempt income either directly or indirectly. Disallowance made by the Assessing Officer u/s.14A r.w. Rule 8D(2)(ii) of ₹ 77,78,214/- was allowed out of 1,30,30,180/-. This reasoned finding of CIT(A) needs no interference from our side.
Disallowance of expenditure on helicopter - CIT(A) following the decision of ITAT in assessee’s own case for A.Y. 2005-06, has restricted the disallowance on helicopter expenditure to 1/7th - Held that:- It is true that the onus is on the assessee to substantiate the claim of the assesses. Considering the peculiar circumstances better known to the assessee, there is surrender of claim to the extent of 1/7th of the total claims ₹ 93,96,771/- (i.e. ₹ 66,04,980/- on account of depreciation of vehicles and ₹ 27,91,791/- on account of aviation expenses). At this point of time, in our opinion, the Onus has shifted to the revenue to demonstrate that the said surrender is incorrect and estimations made by the AO are fair within the meaning of section 38(2) of the Act. Fairness is an important factor in matters of quantification of the disallowances, when section 38(2) invoked. The revenue has not done any probe independently to demonstrate that assessee’s offer is unfair and his estimations are fair. The estimations made by the AO, which are confirmed in case of the Cessna Aircraft and altered in case of Bell Helicopter are hereby set aside. Thus e are not inclined to interfere with the finding of CIT(A), who has restricted the disallowance on helicopter expenditure to 1/7th. - Decided against revenue.
Estimation of annual value of let out property at Mumbai - Held that:- The assessee has let out space to the sister concern, which is undisputed fact and is receiving ₹ 10,000/- per month from each sister concern. Therefore, the assessee's property is covered by provisions of clause (b) of section 23(1). This is a fact that assessee's actually rent received or receivable in respect of the said property is not in excess of the ALV computed under clause (a) of section 23(1). AO's decision to invoke a comparable case to the property covered under clause (b) is not in tune with the above referred legal position. It is not also the case of the AO that assessee is covered by the exemptions provided in the Maharashtra Rent Control Act and, therefore, ALV of the property shall be determined on the basis of the comparable cases. In any case, the standard rent is upper limit for determination the ALV as held in the case of Makrupa Chemicals Pvt Ltd (2006 (9) TMI 207 - ITAT BOMBAY-F ) - Decided against revenue
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2014 (5) TMI 1164
Non-payment of dues under a contract for supply of goods - Article 226 of the Constitution - Held that: - in cases like the one in hand, instead of taking recourse to the jurisdiction of the ordinary Civil Court under section 9 of the Code of Civil Procedure Code, 1908, recourse is taken to the writ jurisdiction under Article 226. That is not permissible. The jurisdiction of the Civil Court is intended to provide the ordinary civil remedy for the adjudication of such claims - we see no reason or justification to entertain the petition under Article 226 of the Constitution.
A second writ petition would constitute an abuse of the process of the Court since it had already been expressed by the Division Bench in the earlier proceedings that disputed questions of facts which were raised before the Court, could not be entertained under Article 226 of the Constitution.
It would be inappropriate for the Court to determine the wholly disputed questions of fact which arise in the present proceedings - petition dismissed.
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2014 (5) TMI 1163
Recovery of alleged dues pursuant to a contractual work - outstanding dues of service tax - jurisdiction under Article 226 - Held that: - In the present case, there is nothing on the record which may persuade us to hold that the contract is a statutory contract. The remedy of the contractor, if he is aggrieved by non-payment, would be to either file an ordinary civil suit or if there is an arbitration agreement between the parties, to invoke the terms of the agreement - this Bench in M/s R.S. Associate Vs. State of U.P. & Ors. (Writ-C No.11544 of 2014, decided on 24 February 2014) declined to entertain a petition which had been filed for making payment of bills under a contract - petition dismissed.
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2014 (5) TMI 1162
Validity of Section 3 of the M.P. State Co-operative Societies Act, 1960 - power of State Government to appoint the Registrar of the Co-operative Society, as well as Additional Registrar, Joint Registrar, Deputy Registrar, Assistant Registrar etc. - constitutional validity of proviso added to Section 77(3)(b) and Section 77(6) of the Act - Held that: - the Registrar is discharging pure administrative functions - limited powers are given to the Registrar to entertain certain kinds of disputes and take decision thereupon as well. One such provision is Section 55 of the Act which, inter-alia, provides that regarding terms of employment, working conditions and disciplinary action taken by a Society, if a dispute arises between a Society and its employees, the Registrar or any officer appointed by him (not below the rank of Assistant Registrar) shall decide the dispute. Likewise, Section 64 of the Act provides that the Registrar shall decide the dispute touching upon the Constitution, management or business, terms and conditions of employment of a Society or the liquidation of the Society.
No doubt the Registrar exercising powers under Section 48 of the Bihar and Orissa Cooperative Societies Act is held to be a Court - it does not necessarily follow from that the Registrar exercising such powers has to be necessarily a person with judicial/legal background.
We would like to emphasize the need for appointment of suitable persons not only as Registrar, Joint Registrar etc. but as Chairman and members of the tribunal as well. While discharging quasi-judicial functions Registrar, Joint Registrars etc. have to keep in mind that they have to be independent in their functioning. They are also expected to acquire necessary expertise to effectively deal with the disputes coming before them. They are supposed to be conscious of competing rights in order to decide the case justly and fairly and to pass the orders which are legally sustainable.
The State Government shall, keeping in mind the objective of the Act, the functions which the Registrar, Joint Registrar etc. are required to perform and commensurate with those, appointment of suitable persons shall be made - for appointment of the Chairman and Members of the Tribunal, the selection to these posts should preferably be made by the Public Service Commission in consultation with the High Court.
SLP dismissed.
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2014 (5) TMI 1161
Attack on the Akshardham temple in Gandhinagar - section 120 of Indian Penal Code - It is the case of the prosecution that the confessional statements of the accused persons were recorded by the Superintendent of Police, Sanjaykumar Gadhvi (PW-78), as provided Under Section 32 of the POTA by following the mandatory procedure - constitutional validity of Section 15 of the TADA Act - validity of confessions.
Held that: - adequate time had not been given to any of the accused as they had been in police custody for almost 45 days in each case. We also observe that there is no evidence on record to suggest that the special report envisaged Under Sub-rule (5) of Rule 15 had been submitted to the Magistrate. The confessions cannot, therefore, be taken into account for any purpose.
In the facts and circumstances of the present case the grant of half an hour to the accused to think over before recording their confessional statement cannot be held to be a reasonable period. We do not think that is safe to base conviction on such confessional statements. Further, on the facts of the present case, conviction cannot be maintained on the sole testimony of two police officials - enough time was not given to the accused persons to record their confessional statements, particularly in the present case since they were making confessions after 11 months of the incident.
Neither the police officer recording the confessional statements nor the CJM followed the statutory mandates laid down in POTA Under Sections 32 and 52 while recording the confessional statements of the accused persons, and we hold that the confessional statements made by A-2, A3, A-4 and A-6 Under Section 32 of POTA are not admissible in law in the present case.
Instead of booking the real culprits responsible for taking so many precious lives, the police caught innocent people and got imposed the grievous charges against them which resulted in their conviction and subsequent sentencing.
Appeal allowed - decided in favor of appellant.
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2014 (5) TMI 1160
Denial of natural justice - Whether the High Court is justified in issuing the directionse solely on the ground that non-supply of the advice obtained by the disciplinary authority from the UPSC and acting on the same amounts to violation of principles of natural justice? - Held that:- In view of the aforesaid, we respectfully agree with the decision rendered in S.K. Kapoor's case [2011 (3) TMI 1633 - SUPREME COURT] wherein held although Article 320(3)(c) is not mandatory, if the authorities do consult the Union Public Service Commission and rely on the report of the commission for taking disciplinary action, then the principles of natural justice require that a copy of the report must be supplied in advance to the employee concerned so that he may have an opportunity of rebuttal. Thus resultantly decline to interfere with the judgment and order of the High Court. As a result, the appeal, being devoid of merit, is dismissed.
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2014 (5) TMI 1159
Grant of Additional License - renewal of its certificate of recognition as a trading house - delay in filing application - case of Revenue is that though it is true that the petitioner filed an application for grant of an additional licence on 28-5-1984 but as the application was not accompanied by a trading house certificate and no fresh application was filed after renewal of trading house certificate on 18-2-1992, the petitioner cannot be granted any relief on the basis of applications dated 26-5-1984 or 26-2-1992.
Held that: - The respondents have, in essence, taken a stand that application dated 18-2-1992, though filed within time cannot be entertained as it cannot be construed to be a fresh application filed after receipt of the renewed certificate but is for renewal of an application that was not maintainable.
After a delay of nearly nine long years, certificate of recognition as a trading house, valid from 1-4-1983 to 8-11-1983, was issued, in accordance with the 1983-84 policy, on 18-2-1992. The petitioner, in accordance with rights conferred by Para 203(1) of the 1983-84 policy, allowing the petitioner to apply for an additional licence within two months of renewal, addressed letter dated 26-2-1992, within eight days of issuance of the certificate, to the Joint Chief Controller of Imports and Exports, Ludhiana, informing him that as it has received a trading house certificate on 18-2-1992, and while referring to a letter dated 27-8-1991 and in continuation of earlier letters, prayed that an additional licence be issued at the earliest - A perusal of the letter reveals that though it states that it may be read in continuation of letter dated 27-8-1991, which in turn relates back to application dated 26-5-1984, which as referred to earlier was filed when the application for renewal of the certificate was still pending, clearly prays for grant of an additional licence.
The reasons assigned for rejecting the petitioner’s application are neither tenable nor germane to the controversy in hand but are based upon a perverse and arbitrary attempt to twist facts and misread application dated 26-2-1992 - The respondents have, in our considered opinion and for reasons we are unable to fathom, intentionally and by a technical play of words construed, this letter as a mere letter for revival of application dated 26-5-1984. The letter does not by any words whether specific or inferential pray for revival of application dated 26-5-1984 but instead specifically prays that an additional licence be issued. The use of the words “in continuation” etc. does not raise an inference, as held by the respondents that letter dated 26-2-1992 merely seeks revival of application dated 26-5-1984.
Petition allowed - decided in favor of petitioner.
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2014 (5) TMI 1158
Non-filing of annual return for the year 2013 and the balance sheet for 2012-13 by the transferor and transferee company - Held that:- The said objections stand satisfied in view of filing of annual returns for the year 2013 so also the balance sheet for the financial year 2012-13 by the transferor and transferee company on 7th May, 2014. As regards the second objection the transferee company is ready and willing to increase its authorised share capital and file necessary forms as may be required. Therefore the second objection raised by the Central Government also stands satisfied.
In view of the aforesaid there will be orders in terms of prayers (a) to (j) of the petition.
In the event the petitioners supply a legible computerized print out of the scheme and the schedule of assets in acceptable form to the department, the department will append such computerized print out, upon verification, to the certified copy of the order without insisting on a handwritten copy thereof.
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2014 (5) TMI 1157
Seizure of goods - challenge to the order is founded on the premises that the seizure was made on mere suspicion without any material basis - Held that: - Sub-Section (4) of Section 60 of the Act authorizes the competent authority to seize any goods covered under the Act if it is being transported in contravention of the provisions of Sub-Section (2) of Section 60 of the Act - the Act does authorize the competent authority to seize the goods along with the vehicle for due verification, but the seizure cannot be depend on the ipse dixit of the officer and, in order to make his act of seizure valid, existence of reasonable ground of suspicion is a condition precedent. This apart, no penalty can be raised or assessed on mere suspicion without any material basis.
The certificate, granted by the Forest Officer, shows that the rates, mentioned in the Bill and Form-DIX, were correct. We further find that respondent Commercial Tax Officer, on self assessment, based on surmises, came to the conclusion that the rate quoted was low and, thus, fixed the value of logs at 1000/-per cubit feet in place of ₹ 700/-and ₹ 764/-, which were mentioned in the Bill, without assigning any cogent reason therefore. We too notice that there was no material or basis for coming to the conclusion that the rate, mentioned in the bill, was deliberately kept under valued and was so done to avoid liability of due Sale Tax.
Application allowed.
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2014 (5) TMI 1156
Demanding residue of the unpaid taxes from the petitioners under the Gujarat Tax on Luxuries (Hotels and Lodging Houses) Act, 1977 - Held that:- Since the communication issued by the Collector is only in the form of a show cause notice, we are not inclined to interfere at this stage, leaving it open for the petitioners to approach the Collector. If no reply is filed so far, it would be open for the petitioners to do so latest by 20.5.2014. Collector shall proceed in accordance with law after considering the reply, if any, so filed. If no assessment is made on the returns filed by the petitioners, the same may also be done in accordance with law.
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2014 (5) TMI 1155
Application for modification of the earlier order and permitting the sale of certain assets of the respondent No.1-Company - Held that:- Under Section 10(F) of the Companies Act, appeal has been provided against the order of the Company Law Board to this Court on any question of law arising out of such order. The arguments which have been advanced by the counsel for the appellants reveals that these are the issues relating to fact and not to the pure question of law, therefore, no ground is made out at this stage to entertain the present miscellaneous company appeal.
Considering the nature of grievance which the appellants has raised before this Court and also considering the stand of the respondents before this Court, it is of the opinion that interest of justice would be served in permitting the appellants to file an appropriate application before the Company Law Board raising the grievance which they have raised before this Court, and also permitting the appellants to make a request to the learned Judge appointed by the Company Law Board as Observer- Cum-Facilitator to not to proceed with the sale of the assets of the respondent No.1-Company till the application, if any, in pursuance to the liberty granted by this Court is decided by the Company Law Board.
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2014 (5) TMI 1154
Offence under PMLA Act - eligibility of initiation of the proceedings against the petitioners - eligibility of benefits of all the procedures applicable to the woman - Held that:- Inquiry, investigation, etc., are permissible under Cr.P.C. by the authorities or officers exercising the jurisdiction under P.M.L. Act. It therefore goes without saying that on noticing an offence under P.M.L. Act against the offenders, the case can be tried as provided in Chapter VII of P.M.L.A. Act. Thus, a separate machinery for trial of the offences under P.M.L. Act is provided under Chapter VII as distinguished from adjudication under Section 8 of the Act. To enable such trial, the investigation and inquiry with the assistance of the provisions of Cr.P.C. is permissible.
Looking to the fact that the petitioners are not arrayed as accused, it appears that they are sought to be interrogated to ascertain their complicity in the offence if any. Such action cannot be thwarted at a preliminary stage where only summons have been issued after freezing the accounts of the petitioners. Even if the argument of the petitioners that freezing of the accounts was not permissible that Sections 5 and 17 of P.M.L.A. Act were applicable at this stage is accepted, as noticed in a greater detail, acts under Sections 5 and 17 are only provisional and subject to confirmation by the Adjudicating Authority. Before such adjudication, a notice to the interested person is contemplated under Section 8 of P.M.L. Act and therefore, by convincing the Adjudicating Authority that no offence under Section 3 is committed by the petitioners, the orders defreezing their accounts can be obtained from the such authority. In the facts and circumstances discussed hereinabove, it is difficult to accept the contention that initiation of the proceedings against the petitioners are illegal.
True it is that the vexatious search would expose the authority or officer concerned to prosecution but that in fact is a safeguard provided to the suspects so as to prevent them against unnecessary harassment or inconvenience. In view of such safeguard, at this stage, this Court would not doubt the credentials of the respondents when they are inquiring into or investigating what may turn out to be a serious offence. Further Sections 22 and 23 raise various presumptions against the suspects and Section 24 casts a burden of proof under various situations on the person charged with the offence. Thus, the offence under Section 3 is treated as serious offence and interference by this Court at the preliminary stage may frustrate the purpose and object of the Act.
Further, a bare perusal of sub-section (2) of Section 50 shows that power to summon any person whose attendance is considered necessary as provided in sub-section (2) is vested with various authorities including Assistant Director and therefore, it is misconceived to say that the officer issuing summons being the Assistant Director is not so empowered.
In view of the above discussion, the arguments that without compliance with Sections 5 and 17, Section 16 was the only provision applicable to the respondents, after noticing the material in search under FEMA, also cannot be accepted.
So far as petitioner-Foziya Samir Godil is concerned, being a woman, it is rightly contended by the learned counsel for the petitioners that she is entitled to benefits of all the procedures applicable to the woman under the relevant law and to that extent, the respondents at the threshold shall have to comply with the provisions of law.
The contention that exclusive procedure for summoning a person under Section 50 not providing the safeguards to a woman as under various provisions of Cr.P.C. and therefore, no benefit as is available to the woman under Cr.P.C. can be conferred upon her, is devoid of merits and suffers from misconception of law inasmuch as concededly by virtue of Section 65 of P.M.L. Act, provisions of Cr.P.C. as are not inconsistent with the provisions of P.M.L. Act are applicable to the proceedings under P.M.L. Act and it cannot be said that the provisions providing safeguard to a woman under Cr.P.C. cannot stand with the provisions of P.M.L. Act and therefore, such provisions cannot be said to be inconsistent with P.M.L. Act.
Subject to the aforementioned observations, no substance is found in the petitions
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