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2022 (10) TMI 1239
Application of Review/Revision under Section 129A / 129B(2) of Customs Act 1962 - enhancement of value of imported goods - HELD THAT:- Section 129B(2) does not provide for review of an interim order passed for the purpose of referring the matter to Hon’ble President for constitution of a Larger Bench on account of divergent views expressed by the Tribunal in its order earlier. For this reason itself, this application should be dismissed.
The basic ground which the applicant/appellant stated in the application is that there is no evidence to show that the appellant herein has ever agreed to the assessed value. Accordingly the case of the applicant/appellant is distinguishable and should have been decided by the same Bench.
This matter is referred to the Hon’ble President for constitution of Larger Bench only to resolve the dispute which is observed in terms of contrary decisions referred to by the Commissioner (Appeals) - application dismissed.
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2022 (10) TMI 1238
Revision u/s 263 - Voluntary Retirement Scheme expenditure - With regard to early separation scheme, Ld. DIT by relying heavily on the letter issued by CBIT to all the Chief CIT’s to consider the facts of the cases and disallow the schemes involving voluntary retirement where the expenditures are incurred which increases the nature of treatment, benefits of enduring nature which can be classified as capital in nature - HELD THAT:- We observe that the Hon'ble Jurisdictional High Court decided and held the similar issue in favour of the assessee in the case of CIT v. Bhor Industries Ltd [2003 (2) TMI 20 - BOMBAY HIGH COURT] wherein the Voluntary Retirement Scheme expenditure allowed as revenue expenditure based on the criteria commercial expediency. These expenditure does not have enduring nature. Further, we observe that Ld. DIT has observed in his order that Hon'ble High Court decision was not accepted by the revenue and an SLP has been filed before Hon'ble Supreme Court. Since the matter has not reached finality, therefore this expenditure on VRS is not allowable expenditure. We are not inclined to accept the arguments proposed by the Ld. DIT and at that point of time or even now there was no decision contrary to the decision of Bhor Industries Ltd., (supra) is submitted before us or any contrary decision brought to our notice by the revenue. Therefore, we are inclined to accept the submissions made by the assessee that this expenditure on early separation scheme is favorable to the assessee on merit. Therefore, Ground No. 2 raised by the assessee is accordingly, allowed.
Addition u/s 40(a)(ia) - Payment made to visa and master card - We observe that Ld. DIT observed from the record that assessee has not made the payments to visa and Master card and failed to deduct TDS for the fourth quarter. Therefore, it is disallowable u/s. 40(a)(i) of the Act. At this point of time, we observe from the submissions made by the Ld. AR that no doubt assessee has deducted TDS and remitted to the exchequer but there is several amendments and judicial precedents as well as several amendments had been made in section 40(a)(i) and 40(a)(ia) of the Act as per which when payee declares the income in its return of income and offered to tax the payer is considered to be assessee not in-default. In the present case, we observe that the payees i.e., visa and master card entered into MAP under DTAA between India and USA Treaty and accordingly, they declared the income and paid the relevant taxes including the current assessment year. The assessee has submitted relevant information and brought to our notice filed before us which contains certificate issued in this regard which clearly shows that the payees have declared the income and paid the due taxes. Since the payee has complied with the relevant rules the assessee cannot be held as assessee-in-default. Even though this development happened in the subsequent year, the revenue is properly compensated. Accordingly, provision as held in section 40(a)(ia) are fully satisfied. However, the above said amendments were not made u/s. 40(a)(i) of the Act.
As held in the case of Celltick Mobile Media (India) (P.) Ltd [2021 (3) TMI 1121 - ITAT MUMBAI] it is clear that the amendment provision u/s. 40(a)(i) retrospective in nature. Therefore, the provisions of section 40(a)(ia) are equally applicable u/s.40(a)(i) of the Act, with that above discussion we are inclined to accept the first proposition made by the assessee and accordingly, Ground No.3 raised by the assessee is allowed and we do not wish to consider the proposition No. 2 raised by the assessee at this point of time.
Deduction u/s. 36(1)(viia) claimed during current Assessment Year - in earlier years the assessee had incurred losses and no deduction u/s. 36(1)(viia) was claimed by the assessee in earlier years - We observe that Ld. AR of the assessee submitted that the provisions made to determine the deductibility requirement u/s.36(1)(vii) has to be on the opening balance of the provision not on the closing balance of the provision as suggested by the Ld. DIT.
Calculation submitted before us clearly indicates that assessee has calculated the bad debts allowable based on the provisions made by them in the earlier Assessment Years to the extent they have made the claim for actual bad debts after adjusting the relevant deduction u/s. 36(1)(viia) of the Act.This issue already settled by now that u/s.36(1)(vii) of the Act, assessee is allowed to claim the deduction only to the extent of the provisions already made in the books of accounts. Therefore, provision already made clearly suggest that the provision has to be made in the earlier year i.e., opening balance of provision balance alone should be considered for determining the deduction u/s. 36(1)(vii) of the Act. Therefore, this issue is also covered in favour of the assessee on merit and also the Assessing Officer has considered and dealt with this deduction in detail which we infer from the submissions made by the assessee.
Determining the book profits u/s.115JA - DIT observed that assessee has failed to adjust provisions of section u/s. 36(1)(vii) and u/s. 36(1)(viia) of the Act in determining the book profits u/s. 115JA of the Act, and according to him they are unascertained liability - We observe that the deduction claimed u/s. 36(1)(vii) and u/s. 36(1)(viia) are not unascertained liability rather the provisions are recommended by Reserve Bank of India which has to be considered as an ascertained liability, rather the reduction of the value of the assets and which has an impact on the carryforward value assets in the Balance Sheet. On merit this issue also covered in favour of the assessee.
At the time of hearing, Ld. AR filed additional Ground as well as submitted before us that the provision of section 115JA are not applicable in the case of the banking companies by referring to various case laws including the Hon'ble Jurisdictional High Court decisions. It is clear from the decision of the various High Courts that the provisions of section 115JA are not applicable to the banking companies prior to the amendment made in the Finance Act, 2012. Considering with the above discussion, we are inclined to accept the submissions of the assessee and the issue raised by the Ld. DIT relating to 115JA is also in favour of the assessee on merit.
Thus all the issues raised by the Ld. DIT in revision proceedings are covered in favour of the assessee on merit and as per the section 263 of the Act in order to initiate the proceedings there has to be a finding that the order passed by the Assessing Officer is not only erroneous as well as prejudicial to the interest of the Revenue. Decided in favour of assessee.
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2022 (10) TMI 1237
Denial of claim u/s 80P by prima facie adjustment u/s 143(1)(a)(v) - HELD THAT:- Amendment has been introduced in section 143(1)(a)(v) of the Act to provide that the claim of deduction u/s 80P of the Act can be denied to the assessee, in case the assessee does not file its return of income within the time prescribed u/s 139(1) of the Act with effect from 01-04-2021 and does not apply to the impugned assessment year i.e. assessment year 2019-20 relevant to financial year 2018-19. Accordingly, in our considered view, denial of claim under section 80P of the Act would not come within the purview of prima facie adjustment under section 143(1)(a)(v) of the Act, for the simple reason that the section was not in force during the period under consideration i.e. assessment year 2019-20.
Whether the case of the assessee would fall within the purview of prima facie adjustment u/s 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return? - The case of the assessee would also not fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return). We also observe that the counsel for the assessee has filed copies of orders passed by Commissioner (Appeals), NFAC in many other cases of cooperative societies having similar issues, in which it has been held that section 143(1)(a)(ii) of the Act does not deal with disallowance of deduction for deed filing of return of income and also the said adjustment is not permissible u/s 143(1)(a)(v) of the Act.
We note that the instant case, there was a few-month delay in filing the return of income by the assessee for the assessment year 2019-20 and return of income was filed within due date permissible u/s 139(4) of the Act, in which the claim for deduction u/s 80P of the Act was made. Therefore, looking into the totality of facts, we are of the view that claim of deduction u/s 80P of the Act cannot be denied to the assessee only on the basis that the assessee did not file return of income its return of income within due date u/s 139(1) - Appeal of the assessee is allowed.
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2022 (10) TMI 1236
Denial of claim u/s 80P within the purview of prima facie adjustment u/s 143(1)(a)(v) - HELD THAT:- The claim of deduction u/s 80P of the Act cannot be allowed the assessee, if the assessee does not file its return of income within the due date stipulated u/s 139(1) of the Act w.e.f. assessment year 2018-19 onwards. However, we also note that amendment has been introduced in section 143(1)(a)(v) of the Act to provide that the claim of deduction under section 80P of the Act can be denied to the assessee, in case the assessee does not file its return of income within the time prescribed u/s 139(1) of the Act with effect from 01-04-2021 and does not apply to the impugned assessment year i.e. assessment year 2019-20 relevant to financial year 2018-19. Accordingly, in our considered view, denial of claim u/s 80P of the Act would not come within the purview of prima facie adjustment u/s 143(1)(a)(v) of the Act, for the simple reason that the section was not in force during the period under consideration i.e. assessment year 2019-20.
Whether the case of the assessee would fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return)? - The case of the assessee would also not fall within the purview of prima facie adjustment u/s 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return). We also observe that the counsel for the assessee has filed copies of orders passed by Commissioner (Appeals), NFAC in many other cases of cooperative societies having similar issues, in which it has been held that section 143(1)(a)(ii) of the Act does not deal with disallowance of deduction for deed filing of return of income and also the said adjustment is not permissible under section 143(1)(a)(v) of the Act.
We note that the instant case, there was a few-month delay in filing the return of income by the assessee for the assessment year 2019-20 and return of income was filed within due date permissible u/s 139(4) in which the claim for deduction u/s 80P of the Act was made.
Therefore, we are of the view that claim of deduction u/s 80P of the Act cannot be denied to the assessee only on the basis that the assessee did not file return of income its return of income within due date u/s 139(1). Therefore, in the interests of justice, we are restoring the case to the file of the CIT(Appeals) for fresh adjudication on merits of the case after giving due opportunity of hearing to the assessee. Appeal of the assessee is allowed.
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2022 (10) TMI 1235
Priority/out of turn hearing of the appeals pending with Commissioner of Income Tax (Appeals) - HELD THAT:- The appeals have been filed as recently as on 15.05.2022 and in the impugned order R1 categorically conveys that the docket of the CIT (Appeals) has a large number of high demand cases and thus, the authority finds no justification for permitting the petitioner to jump the queue.
This Court is disinclined to override the administrative decision taken by the authorities as the authorities would be best positioned to appreciate the management of their docket and the pendency of matters before them.
Suffice it say that the petitioner is at liberty to approach the appellate authority after elapse of some time to request him to re-visit the request for early hearing. Such request, if and when made, shall be considered by the appellate authority at his discretion bearing in mind the guidelines that require priority to be accorded for matters challenging high piched assessments as the appeals of the petitioner have been designated as appeals involving high piched assessments on 27.09.2022.
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2022 (10) TMI 1234
Seizure of gold chains - Confiscation - appeal filed after the period of 60 days prescribed in section 128 of the Act, even beyond the period of 30 days, upto which the delay can be condoned - notice issued requiring him to produce evidence regarding filing of appeal and the order, failure to produce such evidence would result in the gold being sold in auction u/s 150 of the Customs Act, 1962 - HELD THAT:- The incident had occurred on 3/6/2014 and the confiscation order was issued on 7/3/2014. Admittedly, appeal against that order was filed highly belatedly resulting in Ext. P4 order dated 18/6/2015. The petitioner did not challenge Ext. P4 order for a long period of seven years and was prompted to action only when served with Ext. P5 notice proposing to sell the confiscated gold. As there is inordinate delay on the petitioner's part, this court will not be justified in entertaining and granting the relief sought in this writ petition.
In the result, the writ petition is dismissed.
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2022 (10) TMI 1233
Territorial Jurisdiction - respondent's application under Order VII Rule 11 of the Code of Civil Procedure, 1908 was allowed and the plaint filed by the appellant was directed to be returned - seeking dismissal of the suit under Order VII Rule 11(d) of the CPC on the ground that the appellant had instituted the said suit without complying with the mandatory provisions of pre-institution mediation under Section 12A of the Commercial Courts Act, 2015.
Whether the impugned order directing return of the plaint for want of territorial jurisdiction is erroneous? - HELD THAT:- It is trite law that an objection regarding territorial jurisdiction of a court, raised by way of an application under Order VII Rule 10 of the CPC, is to be decided on a demurrer, that is, by accepting all statements made in the plaint to be true. Thus, the examination for the purpose of an application under Order VII Rule 10 of the CPC is limited to the averments made in the plaint and the documents filed by the plaintiff.
In D. RAMACHANDRAN VERSUS R.V. JANAKIRAMAN & ORS. [1999 (3) TMI 656 - SUPREME COURT], the Supreme Court observed It is well settled that in all cases of preliminary objection, the test is to see whether any of the reliefs prayed for could be granted to the appellant if the averments made in the petition are proved to be true. For the purpose of considering a preliminary objection, the averments in the petition should be assumed to be true and the court has to find out whether those averments disclose a cause of action or a triable issue as such. The court cannot probe into the facts on the basis of the controversy raised in the counter.
The appellant claims that the respondent is clandestinely selling its infringing goods within the territorial jurisdiction of the Court. The appellant also alleges that defendant has been advertising, soliciting and selling its goods within the jurisdiction of the Court through interactive websites. In addition, it is claimed that the defendant is carrying on business activity in Delhi by advertising its products in a trade magazine, which is circulated within the jurisdiction of the Court. In addition, the appellant claims that the respondent is also carrying on its business within the territorial jurisdiction of this Court - Plainly, if the aforesaid averments are accepted as correct, the respondent's application under Order VII Rule 10 of the CPC is liable to be rejected.
In a given case, it may be apparent that a plaintiff has no real prospect in succeeding in his claim. In such circumstances, it would be open for a Commercial Court to consider rendering a summary decision under Order XIII-A of the CPC, if an application seeking such judgment is filed. The court is also required to evaluate the averments made in the plaint while considering grant of interim relief in an application under Order XXXIX Rules 1 and 2 of the CPC. However, for the purpose of an application under Order VII Rule 10 of the CPC, the Court must proceed on the basis that the averments made in the plaint are correct - the impugned order, to the extent it allows the respondent's application under Order VII Rule 10 of the CPC and directs return of the plaint, cannot be sustained and is, accordingly, set aside.
Whether the plaint is liable to be rejected on account of failure on part of the appellant to exhaust the remedy of pre-institution mediation as required under Section 12A of the Commercial Courts Act, 2015? - HELD THAT:- The question whether the provisions of Section 12A of the Commercial Courts Act, 2015 are mandatory, is no longer res integra. In Patil Automation Private Limited and Ors. v. Rakheja Engineers Private Limited [2022 (8) TMI 1494 - SUPREME COURT], the Supreme Court has authoritatively held that the provisions of Section 12A of the Commercial Courts Act, 2015 are mandatory and failure to comply with the same would entail rejection of the plaint. However, in the present case, the question whether the provisions under Section 12A of the Commercial Courts Act, 2015 are mandatory or not is not in issue; the point for consideration is whether the provisions of Section 12A of the Commercial Courts Act, 2015 are applicable to the suit instituted by the appellant.
This Court is of the view that the question whether a suit involves any urgent interim relief is to be determined solely on the basis of the pleadings and the relief(s) sought by the plaintiff. If a plaintiff seeks any urgent interim relief, the suit cannot be dismissed on the ground that the plaintiff has not exhausted the pre-institution remedy of mediation as contemplated under Section 12A(1) of the Commercial Courts Act, 2015.
This Court is unable to accept that it is necessary for a court to read in any procedure in Section 12A of the Commercial Courts Act, 2015, which makes it mandatory for a plaintiff to file an application to seek leave of the court for filing a suit without exhausting the remedy of pre-institution mediation, irrespective of whether the plaintiff seeks urgent interim relief or not.
In Patil Automation Private Limited and Ors. v. Rakheja Engineers Private Limited, the Supreme Court had considered the import of Section 12A of the Commercial Courts Act, 2015 in the context of the suits, which did not contemplate any urgent interim relief - It is apparent from the above that the Supreme Court was also of the view that compulsory mediation is foisted only on a plaintiff who does not contemplate urgent interim relief. It is implicit that it is only the plaintiff, that can contemplate the relief that it seeks in a suit. And, pre-institution mediation is necessary only in cases where a plaintiff does not contemplate urgent interim relief.
In the present case, indisputably, the plaintiff has sought urgent interim reliefs. Thus, it is not necessary for him to have exhausted the remedy of pre-institution mediation as contemplated under Section 12A(1) of the Commercial Courts Act, 2015.
The cross-objections are unmerited and, accordingly, dismissed.
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2022 (10) TMI 1232
Reopening of assessment u/s 147 - allegation of reopening as bad in law - Violation of principle of natural justice - Addition u/s 68 - HELD THAT:- On a perusal of case records, it is apparently evident that, on the basis of large financial transaction undertaken by the assessee and in the absence of ITR, the Ld. AO invoked the provisions of section 147 of the Act by service of notice u/s 148 dt 30/03/2015 and eventually culminated the assessment - FAA finding no force in the contention of the appellant dismissed the ground as reason for re-opening is the non-filing of the Return by the Appellant. It is only during the course of Assessment proceedings, that the Appellant/Director of the company had clearly state that, she had no knowledge of the company, its activities and the financials as they were handled by her Late husband and nobody attended the proceedings that the AO was compelled to complete the Assessment 144 of I.T. Act, 1961. The reply of the Director, was received by the Assessing officer by speed post on 9.03.2016. Thus, the contention of the Appellant has no legs to stand on, and is, therefore, unacceptable.
Violation of principle of natural justice - As assessment order emanates that, the assessee was well informed the grievance for rebuttal through notices u/s 148, 142(1) and 144 of the Act and in response thereto the director/Appellant preferred a written submission, considering the same in the light of evidential material and keeping in mind that the assessee has failed to ITR till that date, the assessment proceedings were concluded. Whereas from the records it also apparent that, the Ld. FAA in an appellate proceedings before him granted a reasonable opportunity to the assessee company to support of its legal as well meritare grounds raised and considering the representation of Ld. AR put forth before him through written submission, the addition made u/s 68 of the Act was confirmed, thus ex-facie contention of the appellant fails, resultantly the ground number 2.
Inapplicability of provisions of section 68 - Admittedly, neither during the assessment proceedings, nor in the course of appellate proceedings including the present one, the assessee company could adduce any evidential material to satisfactory establish the nature and sources of credits entered in the books of accounts, moreover the appellate failed to produce the books before the Ld. TAB to substantiate the exact sum of cash credit availed by it, consequently the claim of the appellant fails and the ground of the present appeal.
Restricting addition to “Peak Credit” - The legal position in seeking the benefit of ‘peak credit’ as explained in “Bhaiyalal Shyam Behari [2005 (1) TMI 424 - ALLAHABAD HIGH COURT] is that, the assessee has to make a clean breast of all the facts within its knowledge concerning the credit entries in the accounts, further has to explain with sufficient evidential detail the source of all the deposits as well as the corresponding destination of all payments therefrom the accounts, thus the assessee should be able to show that money has been transferred through banking channels from the bank account of creditors to the bank account of the Assessee, the identity of the creditors and that the money paid from the accounts of the assessee has returned to the bank accounts of the creditors in discharging the primary onus fastened u/s 68 of the Act, in the event of failure to do so, the application of peak credit theory calls out.
We take note that there is no factual finding of either of the Ld. TAB that the assessee is the owner of the entire deposit made in the bank account so question of money belonging to the assessee does not arise and, therefore, applying peak credit fails, consequently prayer to restrict addition to peak credit deserves to be rejected, ergo we order accordingly.
Levy of interest u/s 234B & 234C is consequential and mandatory in nature and the Ld. AO has no discretion in the matter of charging of interest, and we find this proposition has been rightly upheld in the case of “Anjum H Ghaswala” [2001 (10) TMI 4 - SUPREME COURT] therefore the claim of the appellant company being contralegem deserves to be rejected, ergo we uphold the action of the Ld. TAB in charging the said interest.
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2022 (10) TMI 1231
Murder of wife and four minor daughters - oral evidence on record - principles of law relating to appreciation of circumstantial evidence - analysis of the incriminating circumstances relied upon by the Trial Court and the High Court discovery of weapon of offence and bloodstained clothes - extra judicial confession - motive - false explanation offered by the accused appellant as an additional link - injuries in the body of accused appellant - HELD THAT:- None of the pieces of evidence relied on as incriminating by the courts below, can be treated as incriminating pieces of circumstantial evidence against the accused. Realities or truth apart, the fundamental and basic presumption in the administration of criminal law and justice delivery system is the innocence of the alleged accused and till the charges are proved beyond reasonable doubt on the basis of clear, cogent, credible or unimpeachable evidence, the question of indicting or punishing an accused does not arise, merely carried away by heinous nature of the crime or the gruesome manner in which it was found to have been committed. Though the offence is gruesome and revolts the human conscience but an accused can be convicted only on legal evidence and if only a chain of circumstantial evidence has been so forged as to rule out the possibility of any other reasonable hypothesis excepting the guilt of the accused.
In SHANKARLAL GYARASILAL DIXIT VERSUS STATE OF MAHARASHTRA [1980 (12) TMI 194 - SUPREME COURT], this Court cautioned "human nature is too willing, when faced with brutal crimes, to spin stories out of strong suspicions". This Court has held time and again that between “may be true” and “must be true” there is a long distance to travel which must be covered by clear, cogent and unimpeachable evidence by the prosecution before an accused is condemned a convict.
It is by far now wellsettled for a legal proposition that it is the duty of the court to see and ensure that an accused put on a criminal trial is effectively represented by a defence counsel, and in the event on account of indigence, poverty or illiteracy or any other disabling factor, he is not able to engage a counsel of his choice, it becomes the duty of the court to provide him appropriate and meaningful legal aid at the State expense. What is meant by the duty of the State to ensure a fair defence to an accused is not the employment of a defence counsel for namesake. It has to be the provision of a counsel who defends the accused diligently to the best of his abilities - The presence of counsel on record means effective, genuine and faithful presence and not a mere farcical, sham or a virtual presence that is illusory, if not fraudulent.
The conviction of the accused appellant under Section 302 of the IPC is set aside. He is acquitted of the charge framed against him. He shall be set at liberty forthwith if not required to be detained in connection with any other offences - Appeal allowed.
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2022 (10) TMI 1230
Denial of Permanent Commission (PC) in the Indian Navy - disclosure of sensitive information - whether the Armed Forces Tribunal (AFT) could have adjudicated on the validity of the selection proceedings when relevant material was disclosed only to the AFT in a sealed cover? - HELD THAT:- This court observed that the right to disclosure is not absolute. Portions that involve information on third-parties or confidential information on the securities market may be withheld by SEBI. The court directed that the Board is duty bound to disclose parts of the investigative report that concern the specific allegations that have been levelled in the show cause notice. However, the court also observed that it does not entitle a person to whom the notice is issued to receive unrelated sensitive information. The court held that it must first be prima facie established by SEBI that the disclosure of the information would affect third party rights. Once a prima facie case of sensitivity is established, the onus would then shift to the appellant to prove that the information is necessary to defend his case appropriately.
The elementary principle of law is that all material which is relied upon by either party in the course of a judicial proceeding must be disclosed. Even if the adjudicating authority does not rely on the material while arriving at a finding, information that is relevant to the dispute, which would with ‘reasonable probability’ influence the decision of the authority must be disclosed. A one-sided submission of material which forms the subject matter of adjudication to the exclusion of the other party causes a serious violation of natural justice. In the present case, this has resulted in grave prejudice to officers whose careers are directly affected as a consequence.
The non-disclosure of relevant material to the affected party and its disclosure in a sealed-cover to the adjudicating authority (in this case the AFT) sets a dangerous precedent. The disclosure of relevant material to the adjudicating authority in a sealed cover makes the process of adjudication vague and opaque. The disclosure in a sealed cover perpetuates two problems. Firstly, it denies the aggrieved party their legal right to effectively challenge an order since the adjudication of issues has proceeded on the basis of unshared material provided in a sealed cover. The adjudicating authority while relying on material furnished in the sealed cover arrives at a finding which is then effectively placed beyond the reach of challenge. Secondly, it perpetuates a culture of opaqueness and secrecy. It bestows absolute power in the hands of the adjudicating authority. It also tilts the balance of power in a litigation in favour of a dominant party which has control over information - The measure of nondisclosure of sensitive information in exceptional circumstances must be proportionate to the purpose that the non-disclosure seeks to serve. The exceptions should not, however, become the norm.
The AFT has not had the benefit of considering the objections of the appellants to the manner in which the exercise was carried out by the authorities. The objections of the appellants noted above would have been set out before the AFT if the material was disclosed to the appellants. The failure to disclose relevant material has caused substantial prejudice to the appellants. This case exposes the danger of following a sealed cover procedure.
The AFT carried out a painstaking exercise while disposing of the OAs but there has been a clear breach of the principles of natural justice - the AFT should be directed to reconsider the entire matter afresh - appeal allowed.
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2022 (10) TMI 1229
Recovery proceedings - attachment made of 50% of the share of R3 in the property in question - claim of ownership of the property - void sale agreement - claim of the petitioner that the property in question has been sold to him is in direct contravention to the statutory provisions as well as the Rules, seeing as there was an attachment of the property that was validly made, subsisting at the time of the avowed transfer of the property - HELD THAT:- This Court is unaware as to whether there was any encumbrance registered upon the property. In any event, the fact that the property was under attachment is not in dispute. A copy of the ITCP has been placed on record by the revenue counsel.
R3 has filed a counter where she brings to light disputes between the petitioner and R3 in regard to the transfer of the property itself. Thus, the petitioner and R3 would proceed on the basis of their rival claims to the property.
In such circumstances, the appropriate remedy is under Rule 11 of the second schedule which sets out the procedure for recovery of tax - Hence, it is for the TRO to look into the claim of ownership of the property and, in fact, the impugned communication, a mere notice, is precisely to such effect. Learned counsel for the petitioner would express apprehension that the TRO has pre-determined the issue, since at paragraph 2 he proceeds on the basis that the transfer had taken place for inadequate consideration, and when there were tax arrears.
The apprehension expressed by petitioner may be allayed by directing R2 to approach the matter with an open mind, hear the petitioner and R3 by issuance of prior notice, take their submissions into account and passing an order thereafter, in accordance with law and bearing in mind all relevant rules in this regard. WP dismissed.
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2022 (10) TMI 1228
Revision u/s 263 quashed by ITAT - revision initiated on failure of AO to completely verify the authenticity of other expenses - HELD THAT:- Tribunal after going through the assessment file and the documents as well as the order sheet was of the opinion that the AO after going through the entire records was satisfied that the assessee had filed necessary details towards the amounts paid by them for transportation charges. Tribunal found that the AO had conducted enquiry by issuing notice under section 133(6) of the Act. Tribunal applied the decision of Max India Ltd.,[2007 (11) TMI 12 - SUPREME COURT] and allowed the appeal filed by the assessee.
We find that the entire matter is factual and Tribunal has reappraised the factual position and was satisfied that the Assessing Officer did conduct an enquiry before completing the assessment.
Thus, we find that the twin tests which are required to be fulfilled for invoking the power u/s 263 of the Act as laid down in the case of Malabar Industrial Co. Ltd. vs. CIT, [2000 (2) TMI 10 - SUPREME COURT] do not stand fulfilled. Decided against revenue.
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2022 (10) TMI 1227
Cancellation of GST registration of the petitioner - petitioner has not filed Return in GSTR 3B for more than six months - HELD THAT:- In view of the fact that this Court has been consistently following the directions issued in the case of TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. [2022 (2) TMI 933 - MADRAS HIGH COURT] and the Revenue/Department has also accepted the said view as evident from the fact that no appeal has been filed in any of the matters, this Court intends to follow the above order of this Court.
In view of the same, this Court feels that the benefit extended by this Court in the earlier orders referred to above in Suguna Cutpiece Centre's case, may be extended to the Petitioner.
Petition disposed off.
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2022 (10) TMI 1226
Striking out the name of the company - HELD THAT:- The issue is covered by the decision in the case of LEKA CONSULTING SERVICES PRIVATE LIMITED VERSUS NATIONAL COMPANY LAW TRIBUNAL CUTTACK AND ANOTHER [2021 (12) TMI 1484 - ORISSA HIGH COURT] where it was held that Petitioner might approach the Tribunal to contend that impugned order be amended on the Tribunal not having allowed his client to adduce evidence of the company being in operation, in context of the report having said that his client may be put to strict proof. If the Tribunal is satisfied, it may amend impugned order.
Application disposed off.
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2022 (10) TMI 1225
TP Adjustment - comparable selection - Turnover filter should have an upper limit - HELD THAT:- Tribunal has excluded the comparable companies based on the upper turnover filter of Rs. 200 crores. In assessee's case from the table submitted, it is evident that the turnover all 10 comparable companies is more than Rs. 200 crores. Therefore respectfully following the M/S BORQS SOFTWARE SOLUTIONS PVT. LTD. case [2021 (10) TMI 1351 - ITAT BANGALORE] we hold that the companies having more than 200 crores turnover need to be excluded. We accordingly direct the TPO to exclude these companies while re-computing the ALP.
Inclusion of Akshay Software on the ground that the company has incurred significant foreign branch expenditure - remit the issue of to the AO/TPO to consider the comparability of this company afresh while recomputing the ALP.
Include I2T2 India Limited as a comparable while re-computing the ALP.
TPO rejected the inclusion of Evoke Technologies Ltd. on the basis that the financials of the company has also included the financials of the financial branch which is un-audited and therefore the data is unreliable - e notice that the coordinate Bench in the case of Mindteck India Ltd [2022 (6) TMI 1334 - ITAT BANGALORE] has considered the issue of inclusion of Evoke Technologies P. Ltd wherein held comparability of this company was remanded to the TPO for fresh consideration. We are of the view that the comparability of this company has to be remanded to the TPO for fresh consideration in the light of the decision brought to our notice as above
Addition made on account of receipt of fixed assets received free of cost/on loan basis - DRP has upheld the addition mainly on the ground that the assessee has not produced invoices and other relevant documents to substantiate that the assets have been received on loan basis/free of cost and also no evidence was produced that the assets have been returned to the lender - HELD THAT:- With regard to assets received from Quantum data International, the assessee had submitted before the DRP that the customs has wrongly recorded the assets received as replacement for defective assets imported earlier as assets received free of cost. This fact has not been considered or verified by the DRP - we remit the issue back to the AO to verify the invoices and other relevant documents that would substantiate the assessee's claim and decide the issue in accordance with law - This ground is allowed for statistical purposes.
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2022 (10) TMI 1224
Seeking protection from arrest (anticipatory bail) for the alleged offence u/s. 132 of the Central and Maharashtra Goods and Services Tax Act - Availment of irregular ITC - whether the gravity and seriousness of the accusations would require custodial interrogation? - HELD THAT:- Admittedly, there is no final adjudication at the instance of the Department and all the documents required for the purpose of investigation, are already in possession of the respondent and not only this, a sum of Rs.2.22 crores has been paid to the Department though under protest, to establish the bonafides. The investigation being based on documents, the Department has failed to make out any case for custodial interrogation, particularly when the GST Portal has all the supporting documents including the sales and input invoices and even all books of accounts are also filed with the Ministry of Corporate Affairs. The investigation and inquiries are initiated in December 2021, but still there is no crystallization of the accusations barring the show cause notice being issued. In any case, even on conviction, the maximum punishment that would be imposed would be imprisonment upto five years.
The present case arises out of a tax dispute and the interest of the respondent no.1 can always be protected on the claim being adjudicated and the tax payer being directed to pay the tax. Moresoever, the offence under the GST Act, except with the limited exception of previous conviction are compoundable. Primarily, the GST is a revenue statute to collect the tax on every transaction of supply of goods or services or both and imposition of penalty is prima facie ancillary purpose of the statute.
The order passed by the Addl. Sessions Judge, Mumbai, rejecting the Anticipatory Bail Application, perfunctory in nature as except recording that the nature of offence being economic one, the same is rejected. A balance has to be struck between the principle of liberty and the right of the Department to investigate. The learned Judge has recorded a prima facie finding that the applicants are actively involved in the act of availing ITC without actual movement of goods or services, and therefore, the protection is denied. There is no discussion about the need for custodial interrogation of the applicant and whether the custody would be warranted when the offence is punishable with an imprisonment of less than 7 years.
In the event of their arrest, the Applicant no.1 Narendra Amrutlal Patel and applicant no.2 Ashok Girdharilal Mewani shall be released on bail on furnishing P.R. bond to the extent of Rs.50,000/- each with one or more sureties of the like amount and other conditions imposed - application allowed.
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2022 (10) TMI 1223
Condonation of delay of 380 days in filing of the appeal before the Tribunal - eligible reasons for delay - HELD THAT:- In a case, where, for the reasons beyond the control of the petitioner, the appeal could not be filed, then the Courts are well equipped with power to condone the delay, if the petitioner explains the delay in filing of the appeal with a reasonable cause. However, there is no law or mandate in the Act, to condone the delay in each and every case. But, it depends upon facts of each case and the reasons given by the parties for condonation of delay. Therefore, one has to go by the facts of its own case and the reasons given by the petitioner for condonation of delay.
In this case, on perusal of reasons given by the assessee for delay in filing of the appeal, we find that although it appears, the assessee is not deriving any benefit by not filing the appeal within the due date prescribed under the Act, but, from contents of petition filed by the assessee, we could easily make out a case that the assessee has made an afterthought to file the appeal against the order of the CIT(A). Therefore, in our considered view, for these vague reasons, such huge delay of 380 days in filing of the appeal, cannot be condoned.
We are of the considered view that the assessee has failed to make out a prima facie case for condonation of delay of 380 days in filing of the appeal before the Tribunal. Further, the reasons given by the assessee in the affidavit does not come under reasonable cause as prescribed under the Act, for condonation of delay. Decided against assessee.
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2022 (10) TMI 1222
Benami transaction - Beneficial owner of property - Provisional attachment order - scope of Amendment Act of 2016 - Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - HELD THAT:- The issue raised in these petitions is squarely covered by the judgment of this Court in Union of India & Anr. vs. Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT] as held Section 2 (9) (A) and Section 2 (9) (C) are substantive provisions creating the offence of benami transaction. These two provisions are significantly and substantially wider than the definition of benami transaction under Section 2 (a) of the unamended 1988 Act. Therefore, Section 2 (9) (A) and Section 2 (9) (C) can only have effect prospectively. Central Government has notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016. Therefore, these two provisions cannot be applied to a transaction which took place prior to 01.11.2016.
As petitioners contends that review of the said judgment is pending.
Since as of now the issue stands covered by the judgment in the case of Ganpati Dealcom Pvt. Ltd.(supra), we dismiss these special leave petitions for the same reasons and ground.
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2022 (10) TMI 1221
Withdrawal of permission for export of non-basmati rice by notification dated 15.10.2007 - subsequent withdrawal of notification - case of the petitioners is that the abrupt change in the policy is arbitrary and highhanded, affecting the vested rights of the petitioners and as such requires to be set aside - HELD THAT:- The 2nd respondent having accepted, in principle, the requirement of protecting the persons who had already acted on the existing policy, could not have restricted the protection to only the three categories mentioned in the impugned notification. As can be seen in the present case, the petitioners in all the three cases, acting on the basis of the existing policy, had entered into contracts with third parties outside India and had also procured the broken rice necessary to execute such contracts, even before the policy was changed.
Prima of facie, a case is definitely made out for the petitioners to be allowed to export the broken rice which has already been procured by them and which is presently stored at various ware houses, even before 08.09.2022.
In the circumstances, there shall be an interim direction to the respondents to permit the petitioners to export the broken rice stored by the petitioners at the ware houses before 08.09.2022 - Post on 27.10.2022, for counter.
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2022 (10) TMI 1220
Assessment of trust - Unverifiable donation - unverifiable/ bogus contribution to corpus fund - addition made by AO by invoking the provisions of section 68 and section 115 BBC - CIT(A) deleted addition accepting genuineness and creditworthiness of the of the donors - HELD THAT:- CIT(A) while deleting the addition has noted that if a person receives donation and maintains the record of identity and address of the donors and then such donation cannot be considered to be anonymous donation as defined in subsection (3) of Section 115BBC of the I.T. Act, 1961. He further held that requirement of Section 115BBC is not at par with onus on the assessee-trust casted under section 68 i.e., to prove creditworthiness of the donors. He has given a finding that since the assessee-trust has maintained and disclosed name and address of the donors during the assessment proceedings and which were accepted by the A.O. in the original assessment order, therefore, the provisions of Section 115BBC would not be applicable to the facts of the case.
CIT(A) further noted that details of the names and addresses of the donors has not been proved to be wrong or those persons have not donated to the assessee-trust. He, therefore, held that for these reasons also the donation received by the assessee-trust cannot be considered to be anonymous donation by virtue of sub-section (3) of Section 115BBC of the I.T. Act, 1961. Before us, no fallacy in the findings of the CIT(A) has been pointed out by the Revenue. In such a situation, we find no reason to interfere with the order of the Ld. CIT(A) and thus, the grounds raised by the Revenue are dismissed.
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