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2022 (2) TMI 1417
Suspension order - alleged negligence on the part of the respondent delinquent in handling the keys in inappropriate manner resulted into theft/loss of cash from the cash safe - HELD THAT:- The power of judicial review in the matters of disciplinary inquiries, exercised by the departmental/appellate authorities discharged by constitutional courts under Article 226 or Article 136 of the Constitution of India is well circumscribed by limits of correcting errors of law or procedural errors leading to manifest injustice or violation of principles of natural justice and it is not akin to adjudication of the case on merits as an appellate authority which has earlier been examined by this Court in B.C. Chaturvedi Vs. Union of India and Others [1995 (11) TMI 379 - SUPREME COURT]; H.P. STATE ELECTRICITY BOARD LTD. VERSUS MAHESH DAHIYA [2016 (11) TMI 1749 - SUPREME COURT] and recently by a three Judge Bench of this Court (of which one of us is a member) in DEPUTY GENERAL MANAGER (APPELLATE AUTHORITY) AND ORS. VERSUS AJAI KUMAR SRIVASTAVA [2021 (1) TMI 1312 - SUPREME COURT].
Adverting to the facts of the instant case, the Division Bench has proceeded on the premise that the responsibility was of the Branch Manager along with the Assistant Manager(Cash). Hence, the respondent could not have been held responsible for the lapses of those officers and proceeding on the said foundation, set aside the penalty inflicted upon the respondent delinquent but the record of enquiry clearly manifests that it was a factual error being committed by the High Court while setting aside the domestic inquiry and the consequential punishment inflicted upon the respondent delinquent.
The High Court has exceeded in its jurisdiction while interfering with the disciplinary proceedings initiated against the respondent delinquent and being unsustainable deserves to be set aside - Appeal allowed.
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2022 (2) TMI 1416
Enhancement of penalty - delayed submission of documents deliberately or with any mala fide intention - HELD THAT:- This is a case of delay in furnishing of certain documents. There is no revenue implication. The department has not been able to establish any deliberate delay or any mala fide intention on the part of the appellant. As and when the appellant could gather the requisite documents they were presented before the assessing officers for finalising the provisional assessments. In fact, out of the 35 Bills of Entry involved, 31 could be finalised.
The adjudicating authority took a fair decision and imposed a nominal penalty of Rs. 20,000/-. This amount has already been paid by the appellant. The order of the Commissioner (Appeals) does not establish any ground for enhancing the penalty to the maximum of Rs. 50,000/- per Bill of Entry yet to be finalised.
In the case of M/S ESSAR OIL LIMITED VERSUS COMMISSIONER OF CUSTOMS [2015 (5) TMI 942 - CESTAT AHMEDABAD], it was held by the Tribunal that when there is some delay in furnishing the documents and there is no revenue implication, penalty is not called for.
Appeal allowed.
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2022 (2) TMI 1415
Rival claims of the parties to the petition for having control over the management of NRI Academy of Sciences (NRIAS), which run 1000 bedded Hospital and Colleges including Medical and Nursing Homes.
HELD THAT:- Having given anxious consideration to the subject matter of the writ petition and the nature of the dispute arising between the parties and in view of the consent given by the learned counsel for the parties, it is deemed appropriate to refer the dispute for arbitration.
Accordingly, with the consent of the parties, Sri Justice Devinder Gupta (Retired Chief Justice) is appointed as sole Arbitrator to decide all existing disputes between the parties referable to Section 23 of the Act, 2001 - In view of appointment of Arbitrator with the consent of learned counsel for the parties, the order passed by the learned single Judge is set aside and of all the writ appeals as well as the writ petition are disposed off.
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2022 (2) TMI 1414
Validity of Resolution Plan - Preferential Transaction - Treatment meted under the Resolution Plan submitted by the Successful Resolution Applicant - distribution mechanism approved by the CoC in its 18th meeting of the members of CoC - abusive treatment being meted out to them under the garb of 'commercial wisdom of the CoC'.
I. Whether the Adjudicating Authority erred in approving the Resolution Plan, which proposes extinguishing claim to the Fixed Deposit Holders without discharging their payments in full, contravenes the statutory provisions of the NHB Act and RBI Act?
II. Whether the NHB Act or RBI Act, as the case may be, mandate the total payment to the Fixed Deposit Holders even though the corporate debtor is undergoing CIRP under the I & B Code, 2016?
III. Whether section 238 of the Insolvency and Bankruptcy Code, 2016, overrides the RBI Act and NHB Act? Is the approved Resolution Plan stipulates extinguishment of the claims to the Fixed Deposits without discharging their payments in full, valid and legal in terms of the Code?
IV. Whether the transactions involving repayment to Fixed Deposits Upon maturity of their deposit would fall within the ordinary course of business for Respondent No. 1, as specified under section 28(1)(k) of the Code?
V. Whether Respondent No. 1 is legally authorised for disbursing loans and investments despite its failure to repay Fixed Deposit holders as per the terms of their deposits?
VI. Whether any payment made against the F.D.'s in terms of their deposits during CIRP would be categorised as a preferential transaction?
HELD THAT:- It is essential to point out that the issues raised in the present Appeal were also raised in the Company Appeals VINAY KUMAR MITTAL, RASHMI SHRIVASTAVA, JESUIT RESEARCH AND DEVELOPMENT SOCIETY, JIV PRAKASH VIDYAPEETH, INDIAN SOCIAL INSTITUTE, THE NAGALAND JESUIT EDUCATIONAL AND CHARITABLE SOCIETY, THE DELHI JESUIT SOCIETY, AMAR SEVA SAMITHI, PRESENTATION SOCIETY OF INDIA, BHOLA DEVELOPERS PVT LTD AND OTHERS VERSUS DEWAN HOUSING FINANCE CORPORATION LTD, RESERVE BANK OF INDIA, COMMITTEE OF CREDITORS OF DEWAN HOUSING FINANCE CORPORATION LIMITED AND OTHERS. [2022 (1) TMI 1412 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI]. These appeals were also filed against the same Resolution Plan by the fixed deposit holders of DHFL, raising the same issues.
We have already decided on the Appeals mentioned above with detailed orders on the issues raised here. Therefore, we do not think it proper to decide again the same issues raised in the present Appeal.
Impugned Order needs no interference - appeal disposed off.
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2022 (2) TMI 1413
Validity of reopening of assessment - period of limitation - statutory formalities u/s 148A - as argued Income Tax Authority concerned, before issuing the impugned notices u/s 148 have not observed the statutory formalities u/s 148A as prescribed by the Finance Act, 2021 which are applicable with effect from 1st April, 2021 before issuance of notices u/s 148 on or after 1st April, 2021? - HELD THAT:- In view of judgments and orders of this Court in the case of Manoj Jain Vs. Union of India & Ors. [2022 (1) TMI 741 - CALCUTTA HIGH COURT] and in the case of Bagaria Properties and Investment Private Limited & Anr [2022 (1) TMI 742 - CALCUTTA HIGH COURT] all these writ petitions herein are disposed of by allowing the same.
Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void. All the impugned notices under Section 148 of the Income Tax Act are quashed with liberty to the Assessing Officers concerned to initiate fresh re-assessment proceedings in accordance with the relevant provisions of the Act as amended by Finance Act, 2021 and after making compliance of the formalities as required by the law.
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2022 (2) TMI 1412
Violation of principles of natural justice - impugned order passed without consideration of any of the submissions made by the CoC or the Administrator and contrary to the express provisions of law - Erroneous presumption that National Housing Bank(NHB) is the owner of DHFL's funds or property by Section 16B of the National Housing Bank Act, 1987 (NHB Act) despite that the CoC had made elaborate and detailed submissions before the NCLT.
Whether the Adjudicating Authority erred in holding that NHB is entitled to any rights under section 16 B of the NHB Act after commencement of CIRP against the DHFL when such rights are in direct conflict with the express provisions of the Code? - Is the relationship between DHFL and NHB that of a debtor and creditor, and no special rights can be afforded to NHB other than as a financial creditor? - Whether the Adjudicating Authority erred in holding that the Tagged Receivables are 3rd party assets?
HELD THAT:- The provisions of Section 16B of the NHB Act unequivocally provide that any sums received by the borrowing institution would be received by such borrowing institution in trust for RespondentNo.1, NHB, and would be accordingly, required to be paid to the Respondent, NHB.
In the present case, both the factors stated in Section 16B are satisfied viz. the amounts held in trust by the Corporate Debtor (i) are to the extent of the accommodation granted by this Respondent; and (ii) are remaining outstanding. Accordingly, these are bound to be paid to this Respondent NHB in the plain and unambiguous terms of Section 16B of the National Housing Bank Act - Under Section 16B of the NHB Act, the Corporate Debtor is statutorily deemed to hold these funds as a 'Trustee' for this Respondent NHB. Although it is elementary and a matter of the first principle that a Trustee never has the Trust property for its use or purpose, such funds can be used solely for the Trust, i.e. only to be paid to this Respondent.
In the instant case, being a refinance transaction, the Corporate Debtor availed refinance against a pool of tagged loans. Towards these tagged loans, Respondent ‘NHB’ had already passed on the consideration in the form of refinancing to the Corporate Debtor. Under a clear mandate of Section 16 B(1) of the NHB Act, any realization from the said loans shall be deemed to be held by the Corporate Debtor in trust for the benefit of the refinancing institution, i.e. the Respondent NHB - the Corporate Debtor cannot use these tagged loans or recoveries for its purposes or uses or treat them as its property, disregarding the statutory Provision under Section 16B of the NHB Act. Thus, the realisations under the tagged loans and securities held thereunder are held by the Corporate Debtor only as an intermediary/custodian in trust for the benefit of the Respondent NHB, as it has refinanced these tagged loans.
These amounts are required to be paid to this Respondent NHB. The Corporate Debtor cannot use these realisations for its benefits as if it is the owner of the same when it has availed refinance against these very tagged loans. Ultimately repayments under the loans belong to this Respondent NHB and not the Corporate Debtor. The Corporate Debtor is bound to act as per the mandate of the NHB Act - The actions of the Administrator, who was vested with the management of the Corporate Debtor, cannot be in contravention of the mandate given under clause (e), sub- section (2) of Section 17 of the Code, which envisages that the Administrator will be responsible for complying with the requirements under any law for the time being in force on behalf of the Corporate Debtor and thereby jeopardize the right and entitlement of Respondent NHB or act contrary to the provisions of Section 16 B of the NHB Act.
While dealing with the issue of fixed deposit holders and public deposit holders, it is decided that Insolvency and Bankruptcy Code, 2016 overrides the provisions of the National Housing Bank Act, National Housing Bank directions and the RBI Act. No full payment right exists under the NHB, the RBI Act, or subordinate legislation. Even if it exists, any such right would be wholly repugnant to the provisions of the Code, which provides for a specific manner in priority of payment and sets out the right. The minimum amount a creditor is mandatorily required to be paid in the resolution plan, i.e. the liquidation value - It is also held that section 238 of the IB code overrides the RBI and NHB Act. Therefore the approved resolution plan that stipulates extinguishment of the claims to the FD’s without discharging their payments in full is valid and legal under the Code.
NHB is a development financial institution. It is lending to housing finance institutions. Exposure is not on purely commercial lines like any other commercial bank. NHB is an integral partner in formulating and implementing India's Government's housing and housing finance policies. For example, the exposure norms of RBI applicable to a commercial bank are not relevant to refinance a portfolio of a refinancing institution like NHB - If NHB were to be treated at par with any other financial creditors/commercial lenders, hypothetically, any CIRP against a Housing Finance Companies who had borrowed amounts totalling to NHB's net-worth would lead to a situation where NHB may be forced into liquidation, as it could then legally result in the entire net-worth of NHB being extinguished. This is not and could never have been the legislative intent.
Equating NHB with other financial creditors when the statute places it in a special category of institutions would be a misplaced conclusion and must be avoided. NHB is serving as a development finance institution for the growth of the housing sector in the country. In view of the larger objective behind setting up NHB, it cannot be equated with other Financial Creditors. Hence, NHB is a sui generis financial creditor with vested statutory rights.
This unique mandate of the statute must be respected. Section 16B of the NHB Act provides certain rights to NHB in clear, unambiguous terms, then assuming/suggesting the contrary is a fallacious proposition. There is no conflict, as has been explained already. There is absolutely no inconsistency since the Rule 10 exception applies to sums/assets held in trust under Sec. 16B of the NHB Act for the benefit of NHB, excluding such funds from the moratorium provisions of S. 14 of the Act and Rule 5 of the FSP Rules - Whereas exclusion for section 16B funds and assets has already been provided, starting from the sanction letters to the charge creating documents under which the banks and other lenders are claiming rights. In these circumstances, the argument that the rights of NHB under Section 16B are subject to the charge of other lenders is misconceived.
It is pertinent to mention that in the instant case, funds with the corporate debtor to the extent they relate to the flag loans refinanced by the NHB are clearly impressed with the trust and are held in trust for the benefit of NHB. The DHFL is not the owner of the property, but the property is held in trust. Therefore, Section 238 of the Code is not applicable for the 3rd party assets.
The relationship between the DHFL and NHB is not only that of a debtor and creditor. But the NHB has special rights under Section 16 B of the NHB Act, and these rights are not in conflict with the express provisions of the Code. Therefore Adjudicating Authority has not erred in giving the said findings. Accordingly, there are no reason for interference in the impugned order.
Appeal dismissed.
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2022 (2) TMI 1411
Seeking enlargement on bail - fraudulent passing on the said Input Tax Credit to different firms/companies by way of merely issuing invoices without actual supply of goods - HELD THAT:- The allegations in the present petition are certainly having high magnitude involving about Rs.128.82 crores. According to the learned Senior Standing counsel, the material witnesses are yet to be examined. The apprehension expressed by the learned Senior Standing counsel that in case the petitioner is released on bail, he may influence the witnesses or abscond from justice cannot be ignored. At this stage, therefore, considering the gravity of the offence and the aforesaid circumstances, this Court is of the considered view that the petitioner is not entitled for the grant of regular bail.
Finding no merit, the petition is hereby dismissed.
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2022 (2) TMI 1410
Validity of faceless assessment u/s 144B - Penalty u/s 271(1)(c) - writ petitioner/assessee's request for personal hearing has not been decided - as argued personal hearing is not a matter of right but it is the discretion of the Chief Commissioner or the Director General in charge of the Regional Faceless Penalty Centre - HELD THAT:- The simple point now is writ petitioner's request for personal hearing will be considered in accordance with the said scheme
ORDER:- (a)The impugned order order made by the first respondent is set aside solely on the ground that a decision regarding the writ petitioner/assessee's request for personal hearing has not been decided one way or the other in accordance with the said scheme;
b) though obvious, it is made clear that this Court has not expressed any view or opinion on the merits of the matter and all questions are left open;
c) the first respondent shall now proceed from the stage of objections dated 30.06.2021, decide on the request for personal hearing and complete the penalty proceedings inter alia under Section 271(1)(c) of IT Act and pass orders afresh as expeditiously as the business of the first respondent would permit and in any event within 12 weeks from today i.e., on or before 28.04.2022;
d) The two queries raised in paragraph 9 of the proceedings dated 31.01.2022 are left open and decision regarding the personal hearing will be taken in accordance with standards, procedures and processes if any.
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2022 (2) TMI 1409
Seeking grant of regular bail - disobedience of order of court - Concealment of material facts and documents - suicide - dowry case - HELD THAT:- The applicant has no respect to the orders of the Supreme Court as well as this Court. Furthermore, he has not approached this Court with clean hand and filed this application suppressing the material facts in sheer disobedience of the orders of Supreme Court as well as this Court. Therefore, she does not deserve any indulgence by this Court - Time and again the issue of abuse of process of law has come up before the Supreme Court as well as High Courts. The Courts have, over the centuries, frowned upon litigants, who, with intent to deceive and mislead the courts, initiated proceedings without full disclosure of facts.
In ARUNIMA BARUAH VERSUS UNION OF INDIA & ORS [2007 (4) TMI 695 - SUPREME COURT], Supreme Court held that it is trite law that to enable the Court to refuse to exercise its discretionary jurisdiction suppression must of material fact. Material fact would mean material for the purpose of determination of the lis. It was further held that a person invoking the discretionary jurisdiction of the court cannot be allowed to approach it with a pair of dirty hands.
The applicant has misused the process of law by filing successive applications before this Court suppressing the material facts and documents and misled the Court. Honesty, fairness, purity of mind should be of the highest order to approach the court, failing which the litigant should be shown the exit door at the earliest point of time.
The application is rejected with costs, which is quantified at Rs. 25,000/- (rupees twenty five thousand only) to be deposited by the applicant within one month with the Registrar General of this Court, failing which the same shall be recovered from the applicant as arrears of land revenue.
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2022 (2) TMI 1408
Power of SEBI statutory initiating action against statutory auditor / chartered accountant - appellant who is a statutory auditor / chartered accountant has been prohibited from issuing any certificate of audit and has been restrained from rendering any other auditing services to any listed companies and intermediaries for a period of one year - as alleged company had made wrong misleading or inadequate disclosures to the stock exchange and had understated the outstanding loans and interest and financial changes in the annual returns of 2008-09, 2009-10 and 2010-11 and had violated Section 12A of the SEBI Act read with Regulations 3 and 4 of the PFUTP Regulations.
The stand of the appellant is, that the preparation and presentation of the financial statement and the job to ensure that they are free from material misstatement whether due to fraud or error is the responsibility of the management. The appellant as a statutory auditor was responsible to express an opinion on the financial statement based on the internal audit and was not involved in the preparation of the books of accounts of the company or the misstatement in the balance sheet by the company.
HELD THAT:- In the instant case, the show cause notice alleged that the company did not utilize the IPO proceeds and that it was diverted to different entities in the guise of making payments towards the objects stated in the prospectus. The focus in the show cause notice was to examine the role of the appellant as the statutory auditor with regard to due diligence done by it by certifying the expenditure incurred by the company towards the IPO expenses out of the IPO proceeds. The appellants certified the amount was utilized as per the prospectus. A.O. however found that there were lapses on the part of the appellant and due diligence was not carried out by them while certifying that the IPO proceeds were utilized for the objects stated in the prospectus.
We find that the A.O. has only found that due diligence was not carried out by the appellant. There is no finding that the appellants were instrumental in preparing false and fabricated accounts or have connived in preparation or falsification of the books of account. There is no finding that the appellants had manipulated the books of accounts with knowledge and intention, in the absence of which, there is no deceit or inducement by the appellants. In the absence of any inducement, the question of fraud committed by the appellants does not arise. This Tribunal in Price Waterhouse (supra) has categorically held that a C.A. can be proceeded against them if they are instrumental in preparing false and fabricated accounts otherwise SEBI has no power to proceed against them.
Section 12A(a) & (b) of the SEBI Act is obviously not applicable to the appellant as they are not dealing in the securities. Similarly, Section 12(c) cannot be made applicable because no fraud has been carried out by the appellant. Further, in the absence of connivance, deceit, or manipulation Regulation 3 & 4 of the PFUTP Regulations cannot be made applicable.
Thus when a specific finding has been given by the WTM in the impugned order that the promoters and the directors of the DCHL had a private and discreet arrangement between the company and DCM which was only known to the promoters and directors of the DCHL with regard to the understatement of loans and liabilities in the annual accounts of DCHL, it is clear that the appellant as a statutory auditor was not responsible for the preparation and falsification of the books of accounts, the financials of the company and the balance sheet of the company.
Thus in order to give a finding on collusion, there must be some material which could lead to an inference of collusion. Once a finding is given that the appellant was not involved in the fabrication and fudging of the books of accounts and the balance sheet and if the appellant had no intention or knowledge of such understatement being shown in the financials, the charge of fraud or collusion or connivance with the directors and promoters of the company cannot be levied, only on the ground that he was not diligent or cautious or did not check the outstanding loan details from the banks and through other sources. Lack of due diligence can only lead to professional negligence which would amount to a misconduct which could be taken up only by ICAI.
Thus the impugned order in so far as it relates to the appellant cannot be sustained and is quashed. The appeal is allowed with no order as to costs.
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2022 (2) TMI 1407
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2022 (2) TMI 1406
Rejection of Section 7 application - right to take remedy before RERA as well as under Section 7 of the Code - Continuing cause of action - time limitation - HELD THAT:- The fact that Appellant was not given possession of the shops by the Corporate Debtor may be ground and reason for filing complaint under Real Estate Regulatory Authority Act before UP RERA which complaint has already been filed by the Appellant and was allowed on 06.03.2019 but for filing Application under Section 7, Application has to be within three years from the date when right to apply accrues. When default of a financial debt was committed on 24.10.2010 as claimed by the Appellant, the right to apply accrue to him and no other date of default having been given in Part-IV, the limitation shall not stop running merely because Appellant claims that he has not been given possession of the shops. The Application was thus clearly barred by time and could not have been entertained by the Adjudicating Authority. The Application having been filed beyond three years from the date when right to apply accrues, the same deserves to be rejected.
Thus, on the complaint filed by the Appellant, an order has been passed by the UP RERA on 06.03.2019 directing for recovery of amount of Rs. 87,38,000/- along with interest/. The Appellant has already filed Execution Application to execute the order dated 06.03.2019 which as per submission of the counsel for the Appellant has already been allowed on 18.11.2021.
There are no reason to interfere with the order passed by the Adjudicating Authority dismissing Section 7 Application filed by the Appellant - appeal dismissed.
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2022 (2) TMI 1405
Classification of goods - Echo family devices - to be classified under sub-heading 85176290 or not - Echo (4th Gen.), Model No. L4S3RE; Echo Dot (4th Gen.), Model No. B7W64E; Echo Dot (4th Gen.) with Clock, Model No. B7W644; and Echo Studio (Model No. 02T2V3) are appropriately classifiable under heading 8518 or not - HELD THAT:- The Echo family devices featuring 'Alexa' as discussed in the preceding paragraph 2 and the Apple HomePods featuring "Siri" described in paragraph 8 are indeed near identical devices. Obviously, in the matter of classification of these two kinds of devices of different manufacturers/marketers, a difference of opinion has arisen amongst the two advance rulings authorities. And, as informed by the ld. Counsel of the applicant, the matter has already reached the first statutory appellate level, i.e., the Hon'ble High Court of Delhi. Such being the undeniable facts, I feel it would be improper on my part to create further discordance on this issue which is already sub-judice. Therefore, in my considered opinion, the issue of classification of the 15 Echo family devices, except the device 'Wireless Speaker Device, Model No. P5B83L', which is not an Echo family device, need to await the decision of the Hon'ble High Court of Delhi, which is already seized of the matter in the form of the appeals of M/s. Amazon Wholesale India Pvt. Ltd.
Reliance placed upon the judgment of the Hon'ble High Court of Bombay in the case of TITANOR COMPONENTS LTD. VERSUS COMMISSIONER OF INCOME TAX [2009 (4) TMI 67 - BOMBAY HIGH COURT], wherein it was held that if a similar appeal is pending before the Hon'ble High Court, it would have been proper for the Tribunal to wait till the question of law is adjudicated by the Hon'ble High Court in the appeals pending before it - The ratio of the above judgment was followed by the Larger bench of the CESTAT, Mumbai in the case of C. PINTO VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [2018 (2) TMI 336 - CESTAT MUMBAI]. Further, the Larger Bench of CESTAT, New Delhi in the case of DINKAR KHINDRIA VERSUS COLLECTOR OF CUSTOMS, NEW DELHI [2000 (3) TMI 76 - CEGAT, NEW DELHI] has also held that Judicial propriety require that a co-ordinate bench should not sit over judgment on the order recorded by another bench.
Accordingly, the secretariat is directed to keep track of the progress of the appeals of M/s. Amazon Wholesale India Pvt. Ltd. against the rulings of the CAAR, New Delhi and place these 10 applications for decision as soon as the Hon'ble Delhi High Court decides the appeals of M/s. Amazon Wholesale India Pvt. Ltd. The ruling in respect of 'Wireless Speaker Device, Model No. P5B83L', shall, however, be rendered without awaiting the decision of the Hon'ble Delhi High Court as it is not an Echo family device.
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2022 (2) TMI 1404
Levy of late filing fee u/s 234E - fee levied for the period prior to 01.06.2015 - assessee has filed TDS Quarterly returns in Form 24Q/26Q beyond due date specified under the Act - HELD THAT:- We find that the assessment year involved is prior to 01.06.2015. Therefore, we are of the considered view that the late fee charged by the Assessing Officer under section 234E of the Act, while processing quarterly TDS return under section 200A of the Act, is without any authority and invalid.
Hence, by following the decision of Fatheraj Singhvi v. Union of India [2016 (9) TMI 964 - KARNATAKA HIGH COURT] we are of the considered view that the Assessing Officer cannot levy late fee while processing of TDS return under section 200A of the Act upto the financial year 2014-15. Decided in favour of assessee.
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2022 (2) TMI 1403
Seeking grant of bail - murder - allegation of killing the farmers by making indiscriminate firing.
Submission of the learned counsel for the applicant is that incorrect description of the incident is given in the F.I.R. and as a matter of fact, three persons including the driver of the vehicle of the applicant were killed by the protesters and no such incident, as alleged, in the F.I.R. had taken place.
HELD THAT:- Considering the facts and circumstances of the case in toto, it is evident that as per the F.I.R., role of firing was assigned to the applicant for killing the protesters, but during the course of investigation, no such firearm injuries were found either on the body of any of the deceased or on the body of any injured person. Thereafter, the prosecution alleged that the applicant provoked the driver of the vehicle for crushing the protesters, however, the driver along with two others, who were in the vehicle, had been killed by the protesters. It is further evident that during the course of investigation, notice was issued to the applicant and he appeared before the Investigating Officer. It is also evident that the charge sheet has already been filed. In such circumstances, this Court is of the view that the applicant is entitled to be released on bail.
Let applicant - Ashish Mishra @ Monu be released on bail on his furnishing personal bond and two reliable sureties each of the like amount to the satisfaction of the court concerned subject to conditions imposed - application allowed.
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2022 (2) TMI 1402
TP Adjustment - adjustment of notional interest in respect of delayed receivable from its AEs - rate of interest adopted by the TPO - LIBOR + 2% - DRP rejected the contention of the assessee that the adjustment is not required in this regard, since it is not an international transaction - HELD THAT:- As in case of Swiss Re Global Business Solutions India Pvt. Ltd. [2022 (1) TMI 1275 - ITAT BANGALORE] by following the judgment of AMD (India) Pvt.Ltd. [2018 (8) TMI 2094 - KARNATAKA HIGH COURT] held that deferred revenue from AE would constitute independent international transaction and the same needs to be benchmarked independently. Further, it was held by the Tribunal that the rate of interest to be adopted is at LIBOR + 2%.
Thus we direct the A.O. to calculate the interest rate on outstanding receivable from AE by adopting LIBOR + 2%
TP Adjustment to be confined to International transaction only - AR stated that the revenues from the international transaction constitute only 29.85% of the total revenue, therefore, as submitted that the TP adjustment if at all ought to be restricted to that extent - HELD THAT:- The action of the TPO is wholly erroneous and contrary to the provisions of the Act and the Rules made there under. A.O. has to refer the matter to the TPO for computation of ALP only in relation to the international transactions and the TPO is empowered to compute ALP only in respect of the said international transactions. In the case of IKA India (P.) Limited [2018 (10) TMI 49 - ITAT BANGALORE] had decided an identical issue and held that the transfer pricing adjustment is to be limited only to the international transactions entered by the assessee with its AEs.
In the instant case, the assessee claims that the revenue from the international transactions constitute only 29.84% of the total revenue. TPO is directed to rework the TP adjustment only in respect of the international transaction undertaken by the assessee with its AEs.
Disallowance u/s 14A - assessee had made sou moto disallowance for expenditure attributable to earning of exempted income - HELD THAT:- AO has not recorded his dissatisfaction as regards the correctness of the claim made by the assessee. The working of suo moto disallowance is on record.
AO has not pointed out any specific reasons having regard to the accounts of the assessee for rejecting the suo moto disallowance by the assessee. Assessee has sufficient own funds and borrowed funds were not used for the purpose of making investment.
As per the statutory Auditors report (clause No.16 and 17), all the borrowed funds have been utilized for the purpose for which it has been borrowed. Further, on perusal of the financials, it is clear that the assessee has sufficient own funds which exceeds the investments. Therefore as placing reliance on Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT] and Microlabs Ltd. [2016 (4) TMI 219 - KARNATAKA HIGH COURT] we hold that disallowance u/s 14A r.w.Rule 8D(2)(ii) is not warranted in the facts of the instant given case.
Nature of expenditure - Expenditure incurred for treatment of products registration - revenue or capital expenditure - HELD THAT:- As decided in own case, [2021 (12) TMI 1467 - ITAT BANGALORE] the expenses incurred by assessee in respect of Dolenio during the years under consideration towards Mutual recognition process variation, Patent and Trade mark and other registration expenses, are be considered as revenue expenditure, allowable u/s 37(1).
In respect of the Annual fee/license fees paid the ledger account revels that these are recurring in nature, and hence cannot be treated to be one time payment. These are in respect of renewal of licence with the drug authorities in respective countries to continue to hold the licence to export and sell the products developed by assessee.
Accordingly no infirmity in the observation of Ld. CIT(A) to treat the payments to be revenue expenditure allowable u/s 37(1) - Decided in favour of assessee.
Non grant of entire credit of MAT paid by the assessee u/s 115JAA - HELD THAT:- The assessee is entitled to the entire credit available to it as per law. Therefore, the A.O. is directed to grant the appropriate credit available to the assessee.
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2022 (2) TMI 1401
Reopening of assessment u/s 147 - deduction u/s 80IA disallowed - notice after four years from the end of relevant assessment year - as per AO deduction could not be allowed on old existing infrastructure facility, as such, the assessee does not fulfil the requisite condition for claiming deduction u/s 80IA - HELD THAT:- As there was no failure on the part of the assessee in disclosing fully and truly all necessary for assessment as the assessing officer fully and extensively examined the whole of the claims while finalising the assessment. The AO solely relied on the material information available on record.
As assessment order passed by AO was the subject-matter of appeal before CIT(A) and principle of merger would apply. Moreover, there is no tangible material before the AO to reopen the assessment.
Thus, we hold that the action of AO for re-opening is not valid as the original scrutiny assessment was the subject-matter of appeal before Ld. CIT(A) and again appeal before Tribunal, moreover, the action of Assessing Officer is based on “change of opinion” on similar set of fact. Moreover, it was overreaching to the decisions of the superior authorities on the similar set of fact on similar issues. Therefore, the re-opening is held as invalid and subsequent action initiated thereof are void ab initio.
Disallowance of 10% ad hoc expenses for earning income from other source (interest income) - There is no dispute on the fact that the AO disallowed ad hoc expense @ 10% by taking view that no nexus was proved in the setting aside proceedings and that the assessee again failed to prove the nexus with the expense qua the interest income earned. Before us the assessee could not substantiate the cross- examination made the submission that same expense is certainly incurred. In the absence of any nexus, we are unable to concur with the submission of Ld. Sr. counsel for the assessee. Therefore, we affirm the order of Ld. CIT(A). In the result of assessee’s appeal is dismissed.
Penalty levied u/s 271(1)(c) - HELD THAT:- As in quantum appeal we have set aside the assessment order by holding as invalid and based on change of opinion thereby accepted the appeal of assessee, therefore, the addition of disallowance under section 80IA does not survive, therefore penalty levied u/s 271(1)(c) has no leg to stand.
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2022 (2) TMI 1400
Seeking quashing of Case Crime No. 540 of 2019 registered at P.S. Hazratganj, District Lucknow, Uttar Pradesh - petitioners have not been named as accused in the crime - HELD THAT:- The petitioners not being named as accused in the said crime or the case now registered by the CBI on the basis of the said crime, cannot be permitted to ask for quashing of the proceedings concerning some other persons (accused) - it is not required to examine the correctness of the relief claimed under Section 438 of the Criminal Procedure Code at the instance of the petitioners herein.
This special leave petition is disposed of.
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2022 (2) TMI 1399
Jurisdiction of executing court to entertain and decide the execution proceedings - Section 44A of the Code of Civil Procedure, 1908 (CPC) - HELD THAT:- It could be well said that the ground that the dispute is not ‘commercial dispute’ and consequentially the Commercial Court lacks inherent jurisdiction to execute the decree, falls flat. It is deprecable that despite the above findings of the Division Bench, the very ground is raised and re-raised in yet another present proceedings. Be as it may. Repeating the litigation on the same grounds under different pretext and different context tantamount to abuse of process of law.
In VADODARA MAHANAG SEVA SADAN FORMALY KNOWN SS MUNICIPAL CORPORATION VERSUS MS KHURANA ENGINEERING LTD. [2018 (9) TMI 2128 - GUJARAT HIGH COURT], the petitioner Corporation had challenged order of the Commercial Court in relation to the award of the arbitrator for which the execution petition was filed before the Commercial Court. The contention was raised on behalf of the petitioner that though the application for setting aside the arbitral award may be pending before the Commercial Court, the execution petition of the contractor would not be competent as it was for the amount below Rs.1 Crore.
It was observed that since the award was enforceable in terms of the Code of the Civil Procedure in the same manner as it was the decree of the Court, “the Court having jurisdiction over the subject matter could be the court competent to execute it as per the Section 38 of the CPC.
Coming to the facts of the present case, it is the decree of English Court, the reciprocating territory, is being executed under Section 44A, CPC. This provision in the CPC, 1908, provides for Execution of decrees passed by the Courts in reciprocating territory. It provides that certified copy of a decree of any superior Courts of any reciprocating territory is filed in the district court, the decree may be executed as if it has been passed by the district court. Sub section (2) of Section 44A provides for filing of certified copy regarding satisfaction of decree to the extent of such satisfaction or adjustments. Sub section (3) says that as per the provisions of Section 47 shall as from filing of the certified copy of the decree apply to the proceedings of a district court for executing a decree under this Section. The execution can be refused if it is shown that the decree falls within any of the exception in Section 13.
In the present case, it is the money decree passed by England Commercial Court upon adjudication of commercial dispute and now sought to be executed under Section 44A which is deemed in law to be the decree as if it has been passed by district court. Upon conjoint reading of Section 44A and Section 38 CPC, it could be certainly deduced that the decree passed by the English Commercial Court can be executed by the commercial court when presented under Section 44A of the CPC - When the execution is filed from the decree of commercial court, the ‘commercial dispute’ continues to exists. In the execution proceedings initiated to execute the decree of the commercial court, the characteristics of the ‘commercial dispute’ is not lost, rather the dispute continues in the same nature, that is the ‘commercial dispute’.
There remains hardly any substance in the submission that since the provisions relating to execution were not amended while amending certain provisions of CPC as per the Section 16 of the Commercial Courts Act, the commercial court does not have the jurisdiction to try and decide the execution petitions. Merely because there is no amendment in relation to the execution provisions brought about and certain other provisions of CPC were amended to be applied to the commercial suits, it would not mean or imply that the commercial court does not have the power to execute.
A clear position of law emerges that commercial court does have the jurisdiction to try and decide the execution applications arising from the judgment and decree passed by the commercial court - the impugned order dismissing the application Exhibit 65 and refusing to hold that the commercial court does not have the jurisdiction to entertain and decide execution proceedings books no error whatsoever - petition dismissed.
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2022 (2) TMI 1398
Unexplained cash credits u/s. 68 - Bogus Share Capital and Share Premium received by the Appellant - onus to prove - HELD THAT:- The assessee has issued shares at premium of his 990 which was based on the valuation report by independent valuer by using the method of discounted cash flow which has been recognized under the provision of law and the same has also not been controverted by the AO except stating that valuation has been made on basis of future expected profit. Furthermore, we also find that the basis of the valuation for determining the premium on the share has nowhere been doubted by the AO during the assessment proceedings. Based on the above, we note that the value of the premium cannot be doubted.
Whether the principles laid down by the Hon’ble Supreme Court in the case of Pr. CIT v. NRA Iron & Steel (P.) Ltd. [2019 (3) TMI 323 - SUPREME COURT] are applicable to the present facts of the case? - The finding of facts would bind only the parties to the decision itself and it is the ultimate decision that binds. Where facts are distinguishable, such as assessee has replied and clarified all the doubts like non-service of summons on the directors of the investing companies due to change of address, existence of the investing companies on the portals of MCA/ROC and with the Income Tax Department long after investment, providing DIN of directors of investing companies and their other particulars, providing reasons for charging huge premium, adequate creditworthiness on the basis of assets, source of immediate availability of funds for investment, etc., then this decision in NRA Iron & Steel (P.) Ltd. (supra) cannot be applied as Admittedly, the assessee in the case on hand has sufficiently furnished the details of the parties
As we are of the view that the assessee company has sufficiently discharged its onus cast under section 68 of the Act with respect identity of the investor companies, credit worthiness and genuineness of the transaction. Therefore we direct the AO to delete the addition made by him. Decided in favour of assessee.
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