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2022 (6) TMI 1454 - CESTAT NEW DELHI
Seeking directions to the Revenue to implement the Final Order dated 25 January 2018 passed by this Tribunal in its favour - HELD THAT:- It is found from the records and from the Final Order, that the refund applications covering various periods were filed and were rejected by the Assistant Commissioner and such rejections were upheld by the Commissioner (Appeals). By the Final Order dated 25 January 2018 held that the appellant was entitled to the refund claimed in these applications and allowed the appeal with consequential relief. It was incumbent upon the Revenue to implement the Final Order and give the refund. Therefore, the Assistant Commissioner was wrong in stating that again a Refund Application must be filed within one year of the Final Order. If he had read the Final Order even once, it would have been clear to him that the Refund applications were filed long ago under Section 11B and it was their rejection which was the subject matter of the Final Order.
It is found appropriate to direct the Principal Chief Commissioner Of Chief Commissioner of Central Goods & Services Tax (Delhi Zone) C.R. BUILDING, I.P. ESTATE, NEW DELHI-110109 in whose jurisdiction all the divisions and Commissionerates of the Zone fall to direct the appropriate officer to sanction the refund along with appropriate interest forthwith.
Application allowed.
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2022 (6) TMI 1453 - CESTAT ALLAHABAD
Application for modification of the order dated 12 September, 2019 passed by the Tribunal disposing of the appeals - HELD THAT:- It is not in dispute that an Appeal has been filed before the Allahabad High Court against the aforesaid order of the Tribunal. This apart, this application has been moved after a period of almost two and a half years from the date of passing of the order. Not only that, the Tribunal has passed several orders on Miscellaneous Applications filed by the Appellant under Rule 41 of the CESTAT (Procedure) Rules, 1982 - The present application, therefore, deserves to be dismissed. It is, accordingly, dismissed.
Rectification of mistake - HELD THAT:- An application for Rectification of Mistake can be moved within six months from the date of order as is contemplated under Section 129B of the Customs Act. The application, therefore, cannot be entertained. It is, accordingly, rejected.
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2022 (6) TMI 1452 - ITAT DELHI
Assessment u/s 153A - bogus purchases - whether ‘satisfaction’ has not been recorded by AO of the searched person and when there was no incriminating document was found? - books of accounts of the company were rejected u/s 145(2) and a substantive addition was made in the hands of M/s. Orient Craft Ltd. and a Protective Assessment was made in the hands of assessee - addition @ 5% on account of alleged commission/brokerage as business income - HELD THAT:- Appreciating the matter on record it can be observed that in ITAT order [2021 (9) TMI 1408 - ITAT DELHI] dated 24.09.2021 in ITA No. 3312/Del/2019 for assessment year 2015- 16 and [2021 (10) TMI 86 - ITAT DELHI] ITA No. 3311/Del./2019 for assessment year 2014-15 the substantive additions in the hands of M/s. Orient Craft Ltd. have been deleted.
It can be observed that as been held that M/s. Orient Craft Ltd. has proved that the material was purchased from vendors involved and payments have been made through banking channel. It was further held that the voluminous documentary evidences filed by M/s. Orient Craft Ltd. clearly established the genuineness of purchase of fabric from the present assessee / appellant.
That being so there is no force in the contention of the Ld. DR that if substantive additions are deleted then as per orders of ld. CIT(A) the protective assessment in the hands of present assessee / appellant will still revive. In fact the findings arrived by the Tribunal in case of M/s. Orient Craft Ltd. are to the effect that the purchases made from the present assessee were genuine therefore, the Bench is of firm view that protective additions in the hands of the assessee/ appellant was never sustainable.
In the light of aforesaid facts and circumstances the order of Ld. CIT(A) making additions on account of alleged commission / brokerage as business income is not sustainable.
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2022 (6) TMI 1451 - ITAT MUMBAI
Unexplained cash credit u/s 68 - onus to prove - share subscription monies received by the assessee alleging that the source of source companies were name lenders having no creditworthiness and the Directors of such companies had not attended the summons - HELD THAT:- The phraseology of Section 68 of the Act is clear. The Legislature has laid down that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income tax as the income of the assessee of that previous year. In this case, the Legislative mandate is not in terms of the word 'shall' be charged to income-tax as the income of the assessee of that previous year. The Supreme Court while interpreting similar phraseology used in Section 69 of the Act has held that in creating the legal fiction, the phraseology used therein employs the word "may" and not "shall". Thus, the un-satisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as the income of the assessee as also held by the Supreme Court in the case of CIT v. Smt. P. K. Noorjahan [1997 (1) TMI 6 - SUPREME COURT]
Onus to prove - Although the summons issued u/s 131 of the Act remained unserved/non-complied, the assessee had furnished all documentary evidences including copies of confirmations, PAN Card, IT Acknowledgement, financial statements and bank statements of all these shareholders. Having regard to these documents and taking into account the judgments rendered in the cases of Ami Industries (I) Pvt. Ltd. [2020 (2) TMI 269 - BOMBAY HIGH COURT] and PCIT vs NRA Iron & Steel Pvt. Ltd. [2019 (3) TMI 323 - SUPREME COURT] the Tribunal held that the assessee had discharged its primary onus of establishing the identity of the investors, proving their creditworthiness and establishing the genuineness of the transactions - thus we thus hold that the assessee had discharged the burden cast upon it under the substantive Section 68 of the Act.
Whether the additional burden cast upon the assessee under proviso to Section 68 of the Act was discharged or not? - CIT(A) had examined the details and documents concerning RGIL and thereafter arrived at a conclusion that the source of source viz., RGIL was an actual and existing company which was engaged in active business of import and export having substantial turnover and overdraft facilities, packing credit etc. from the Bank. Hence, with regard to the amounts mentioned in Column (B) above, the Ld. CIT(A) found that the ‘source of source’ of this share capital originated from the coffers of RGIL which had paid these amounts to the shareholders from its Overdraft/Packing Credit Accounts or proceeds received from sale of goods or maturity of fixed deposits; and therefore the Ld. CIT(A) held that these amounts could not be treated as unexplained monies of the assessee company which we concur on the basis of the uncontroverted facts as noted by Ld. CIT(A). Before us, the Ld. CIT-DR was unable to point out any infirmity in these findings of facts as decided by the Ld. CIT(A) and therefore we do not see any reason to interfere with the order of the Ld. CIT(A) deleting addition made u/s 68 Partly.
Balance amount mentioned in Column (C) of the above Table, the Ld. CIT(A) had held that the bodies corporate from whom the shareholders had received monies, out of which they had subscribed to the share capital of the assessee, were paper companies engaged in the business of providing accommodation entries - The general yardstick adopted by the Ld. CIT(A) across all the twelve (12) shareholders mentioned in Column (C) above was that, the source of source of the remaining sum also received from two group entities did not emanate from the coffers of RGIL but was received from unrelated bodies corporate, and therefore he treated it to be bogus, alleging the source of source to be paper companies is found to be on erroneous assumption/basis in as much as it is found to be not based on any material or evidence. As we have noted earlier in Paras 15(i) to (xvi) above, the documents placed on record evidenced the “source of source” of the investment made by the share subscribers in the assessee’s share capital viz., the PAN, Certificate of Incorporation, bank statements of the ‘source of source’ etc. It is thus noted that source of money from which these share subscribers could subscribe in assessee was clearly discernible. AR has therefore rightly pointed out that the assessee had discharged its initial burden of substantiating the “source of source” of funds, and no specific infirmity had been pointed out therein by the lower authorities. At the time of hearing, even the Ld. CIT-DR was unable to pin-point any defect in these evidences placed on record in support of source of source of funds in the paper book.
After the assessee had discharged its burden by furnishing the above documents in support of the source of source of funds, in compliance with proviso to Section 68 of the Act, then the onus of disproving or finding defects in these documents shifted to the Revenue. It was then the duty of the Revenue to bring on record cogent material/evidence, which would show that the source of source of funds was unreliable or not genuine, which we find has not been done by them.
CIT(A) could not have abdicated from his duty, if he harbored a suspicion that, what was apparent was not real. It is further noted that the Ld. CIT(A) was unable to point out any defect in the documents furnished by the assessee to discharge the burden to prove the “source of source” as required as per proviso to Section 68 of the Act and that of the shareholders. Therefore, his conclusion that the source of source of funds qua Rs. 6,22,05,000/- were unexplained or represented unaccounted monies of the assessee cannot be sustained
Thus unable to find any fault in the conduct of the assessee, who had not only discharged its burden of substantiating the identity, genuineness and creditworthiness of the shareholders, but also the source of source of funds in accordance with proviso to Section 68 of the Act. Thereafter, it was for the Revenue to bring on record cogent/credible evidence to show that the evidences/material furnished by assessee in support of nature & source and even the source of source of funds of share subscribers were defective/colourable. We however note that the lower authorities failed to undertake any such exercise, except for casting aspirations’ by airing their suspicion based on conjectures and surmises. Hence, as the source of source, is found to be flowing through regular banking channel from various remittances by corporate entities in the course of their business dealings, the additional burden laid upon the assessee/share-subscribers under the proviso to section 68 of the Act is held to have been discharged/satisfied. Decided in favour of assessee.
Addition u/s 56(2)(viib) - valuation methodology - assessee had furnished a valuation report from a Chartered Accountant, as per which value per share was Rs. 51,135/- and as per assessee since the premium of Rs. 49,900/- was lower than the FMV, no addition was warranted u/s 56(2)(viib) - whether the AO could have legally rejected the valuation methodology followed by the assessee and changed it to some other method? - HELD THAT:- The option to choose the valuation method is with the issuer company and there is no enabling provision empowering the AO to reject and change the valuation method adopted by a company. Having held so, it is necessary to clarify that the AO however can indeed verify the manner of application of the valuation method pursued by the issuer company, and point out any mistakes, errors or infirmities therein. In the present case at hand, the Ld. CIT-DR was unable to point out any mistake in the manner of application of valuation method followed by the Chartered Accountant. We thus countenance the action of the Ld. CIT(A) in disagreeing with the action of the AO and upholding the valuation method followed by the assessee and thereby deleting the protective addition made by the AO u/s 56(2)(viib) of the Act. Where the assessee adopts a certain valuation methodology under the Act and rules thereunder, the AO cannot subsequently change the valuation method adopted by the assessee. See Vodafone M-Pesa Ltd. v. Principal Commissioner of Income Tax [2018 (3) TMI 530 - BOMBAY HIGH COURT]
Advances/deposits received by the assessee - The facts available on record shows that, the first source of the entire deposits/advances had been established in as much as the identity of the lenders, their creditworthiness and genuineness of the transaction was proved by the assessee as per the requirement of law as discussed. Hence, if the Ld. CIT(A) doubted the respective sources of these creditors [i.e. to extent of Rs. 79,00,000/-], then the correct course of action was to proceed against the creditors rather than the assessee because the assessee has discharged the burden as required by law [ section 68 of the Act] and the assessee cannot be expected to do more than what the law prescribed -the assessee was not required as per the law in force at that time, to explain the source of monies of the creditors. Consequently, the basis on which the addition was sustained partly u/s 68 of the Act by Ld. CIT(A) is held to be unsustainable.
As decided in Rohini Builders [2001 (3) TMI 9 - GUJARAT HIGH COURT] wherein the Court has held that onus of the assessee (in whose books of account credit appears) stands fully discharged if the identity of the creditor is established and actual receipt of money from such creditor is proved. In case, the Assessing Officer is dissatisfied about the source of cash deposited in the bank accounts of the creditors, the proper course would be to assess such credit in the hands of the creditor (after making due enquiries from such creditor).
When when full particulars, inclusive of the confirmation with name, address, PAN, IT returns, balance sheet & profit and loss account in respect of all the lenders were furnished and that it has been found that the loans were received through cheques then the AO was not justified in making addition u/s 68 - See Apex Therm Packaging (P) Ltd. [2013 (12) TMI 1541 - GUJARAT HIGH COURT]
We are of the considered view that the addition made by the AO u/s 68 of the Act was untenable both in law and on facts. Assessee appeal allowed.
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2022 (6) TMI 1450 - ITAT MUMBAI
Faceless appeals procedures - Validity of order passed by the National Faceless Appeals Centre (NFAC) with no oppourtnity provided to present case - whether NFAC has erred in not granting an opportunity to the appellant bank to present the case through the video conferencing as specified under the Faceless Appeals Scheme 2020, provided u/s 250 (6B) of the Income Tax Act? - HELD THAT:- In the Hon'ble Supreme Court's five-judge constitutional bench's landmark judgment, in the case of CIT v. Vatika Townships Pvt Ltd. [2014 (9) TMI 576 - SUPREME COURT] the legal position in this regard has been very succinctly summed up by observing that "(i)f a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect"
Hon'ble Supreme Court has observed that "This (the foregoing analysis) exactly is the justification to treat procedural provisions as retrospective", that, "In Government of India & Ors. v. Indian Tobacco Association [2005 (8) TMI 113 - SUPREME COURT] the doctrine of fairness was held to be a relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation" and that "The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in the case of Vijay v. State of Maharashtra & Ors. [2006 (7) TMI 648 - SUPREME COURT] - It was held that where a law is enacted for the benefit of the community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature." Their Lordships also noted that this retrospectively being attached to benefit the persons, is in sharp contrast with the provision imposing some burden or liability where the presumption attaches towards prospectivity. What logically follows from the law so settled by a constitutional bench of the Hon'ble Supreme Court, is that when an opportunity of presenting the case, through the video conferring in the faceless appeal proceedings, is now available to every taxpayer, on-demand, the same must also be held to be admissible in the proceedings, if so demanded by the assessee, in the old rules as well.
Thus we deem it fit and proper to remit the matter to the first appellate authority after giving an opportunity for a personal hearing, in terms of rule 12 of the Faceless Appeals Rules 2021, for adjudication de novo in accordance with the law and by way of a speaking order. Ordered, accordingly.
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2022 (6) TMI 1449 - ITAT MUMBAI
Jurisdiction of Additional CIT or JCIT without any independent order u/s. 120(4)(b) u/s. 127 - Jurisdiction of the Addl. CIT/JCIT for conducting the assessment proceedings and passing the draft / final assessment order in the absence of an order issued in writing u/s. 120(4)(b) pursuing the Addl. CIT/JCIT with the powers to perform the functions of “the Assessing Officer” -
HELD THAT:- We find that in the instant case while the assessment proceedings u/s. 143(3) of the Act was initiated by issue of notice u/s. 143(2) of the Act by the ACIT, the draft and final assessment orders for both A.Yrs. 2009-10 and 2010-11 were passed by the Addl. CIT / JCIT without any independent order u/s. 120(4)(b) u/s. 127 of the Act.
From the chronology of events, we find that assessee had repeatedly asked the ld. AO to produce such orders passed u/s. 120(4)(b) and u/s. 127 of the Act passed, if any. Despite giving sufficient time to the ld. DR to produce those orders, no such orders were produced by the ld. DR before us for both the assessment years.
We find under similar facts and circumstances, this Tribunal had indeed admitted the additional grounds raised by the assessee after a long gap of 10 years or 15 years, as the case may be, and adjudicated those additional grounds and allowed the assessee’s appeal by quashing the assessments framed for want of orders u/s. 120(4)(b) and u/s. 127 in cases TATA SONS LTD. VERSUS ACIT CIR. 2 (3) , MUMBAI [2016 (10) TMI 1228 - ITAT MUMBAI], M/S. TATA COMMUNICATIONS LTD [2019 (8) TMI 1446 - ITAT MUMBAI], TATA COMMUNICATIONS LTD. [2022 (3) TMI 218 - ITAT MUMBAI].
We find that all the oral and written arguments of the ld. DR have been met in detail by the ld. AR before us as detailed supra. The issue in dispute is already addressed by the various decisions of the Tribunal which are reproduced in the ld. AR's rebuttal referred to supra. The same are not reiterated herein for the sake of brevity. As stated earlier, the issue is already settled by various decisions of the Tribunal in favour of the assessee.
We hold that in the absence of separate order passed u/s. 120(4)(b) and order u/s. 127 of the Act, the Additional CIT / JCIT had no power to perform the functions of an Assessing Officer u/s. 2(7A) of the Act for both the years under consideration. Accordingly, the assessment orders framed by them are hereby quashed. Assessee appeal allowed.
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2022 (6) TMI 1448 - PUNJAB AND HARYANA HIGH COURT
Applicability of Factories Act 1948 or Indian Penal Code - occupier and manager or not - serious injury while operating the machinery - HELD THAT:- It is apparent that the Revisional Court has failed to appreciate the submissions advanced by the petitioners and has chosen to not address the admissibility of the evidence available along with the final report and has rather proceeded on a presumption that all such aspects shall be examined at the stage of trial. Forcing a person to undergo criminal prosecution without noticing as to whether any criminal case is made out against a person on the strength of the material and evidence collected by the prosecution itself is a perpetuation of injustice. A Court of law cannot refuse to examine the existence of prima facie evidence and as to whether such evidence would support the continuation of proceedings against the petitioner or not on a pretext that such issue is to be examined at the stage of trial. A plea of defence cannot be looked into by the Revisional Court especially when such plea is sought to be established by any other evidence or document which is yet to be proved in accordance with law. The said aspect however does not apply to the evidence collected by the Investigating Agency and sought to be relied upon by the agency for proving its case against an accused.
The Revisional Court has not properly appreciated the evidence available on record and its admissibility in law along with necessary ingredients required for prosecuting a person for commission of the offence in question.
Petition allowed.
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2022 (6) TMI 1447 - PATNA HIGH COURT
Validity of reassessment proceedings - mandation of giving period being “not less than” seven days - as argued petitioner was not afforded adequate opportunity inasmuch as no opportunity of filing reply within seven days, as contemplated u/s 148A - HELD THAT:- We notice that in the instant case, notice was issued on 23rd of March, 2022, directing the petitioner to respond on or before 30th of March, 2022. No doubt, petitioner did respond but then the obligation cast upon the officer to afford “7 clear days”, as is so stipulated in the section was never afforded to the petitioner. The language of the section is unambiguously clear. There is a mandate to the officer to provide opportunity to the petitioner of filing response and such period being “not less than” seven days.
We notice that the respondent authority passed the order on 31st of March, 2022, which also only exhibits undue haste in passing the order against the assessee.
Accounting for all the attending facts and circumstances, the order dated 31.03.2022, passed by respondent no.2, namely, the Deputy/Assistant Commissioner of Income Tax, Circle-1, Patna is set aside with the authority to issue a fresh notice within 15 days in terms of Section 148 of the Income Tax Act, 1961 and complete the appropriate proceedings in accordance with law.
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2022 (6) TMI 1446 - ITAT PUNE
Maintainability of appeal by the Revenue before the tribunal - Monetary limit - rejection on low tax effect - HELD THAT:- As we find from the records that the tax effect in the instant appeal is Rs. 44,50,978/- only as per the relevant column in Form 36 herein. We thus quote the CBDT’s circular No. 17/2019 dated 08-08-2019 revising upward the monetary limits for filing of appeals by the department in Income-tax cases before various appellate forums.
The earlier circular No. 03/2018 dated 11-07-2018 had fixed monetary limit for filing of appeals by the Revenue before the tribunal at Rs. 20.00 lakhs which stands enhanced in the Circular dated 08-08-2019 to Rs.50.00 lakhs qua all pending appeals as well. All these facts have gone unrebutted from the Revenue side. We accordingly reject it’s instant appeal.
Revenue’s appeal is dismissed for involving lower than the prescribed tax effect in above terms.
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2022 (6) TMI 1445 - CALCUTTA HIGH COURT
Validity of assessment post insolvency - Application filed by the Financial Creditor u/s 7 of the Insolvency And Bankruptcy Code, 2016 (IBC) before the National Company Law Tribunal, Kolkata was admitted for initiating the Corporate Resolution Process in respect of the assessee company. The NCLT by an order dated March 13, 2019 declared moratorium for the purposes referred to in Section 14 of the IBC.
Since the moratorium has already been declared the instant appeal becomes infructuous and the same stands accordingly dismissed without, however, any order as to costs.
The substantial questions of law raised in the instant appeal in respect of these appeals are left open.
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2022 (6) TMI 1444 - ITAT AMRITSAR
Exemption u/s 10(23C) - Violation of provisions of sections 13(1)(c), 13(2)(a), 13(2)(b), 13(2)(d) and 13(2)(g) - assessee trust made advances [interest free] to two persons who were trustees and settlers - HELD THAT:- In instant case the assessee is imparting education and has set up a College for Bachelor in Education and is duly recognized by the Jammu University. All its income is routed through the said University where the students are allotted by the said University. All the expenses have been incurred on the objects of the institution for education and no part thereof has been incurred on any other object whatsoever.
In the present case, the AO while rejecting the exemption claimed by the trust u/s 10(23C) (iiiad) has invoked the provisions of sections 13(1)(c), 13(2)(a), 13(2)(b), 13(2)(d) and 13(2)(g) of the Act. In this connection it is pertinent mention that section 13 starts with the words, ‘Nothing contained in section 11 or section 12 shall operate as to’.
This shows and makes it clear that the provisions contained in section 13 govern section 11 and section 12 of the Act and not section 10. These provisions are contradictory to each other. Section 13(1)(c) applies to application of income and property to specified persons. Sections 13(2)(a), 13(2)(b), 13(2)(d) and 13(2)(g) govern the provisions of lending, property made available for use, any service is made available and if any income is diverted respectively. The AO and the Ld. CIT(A) has not come to any conclusive finding as to what particular clause has been violated and as to how the same has been violated. In the absence of any such findings by the AO, the withdrawing of exemption was not in accordance with law.
In the above view, we hold that the Ld. CIT (Appeals), was not justified, in confirming the finding of the AO against law, regarding rejecting the exemption claimed of the Assessee Trust under section u/s 10(23C) (iiiad) - Decided in favour of assessee.
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2022 (6) TMI 1443 - ITAT AMRITSAR
Unexplained deposit in the foreign bank account - ownership of the alleged bank account or the alleged disputed deposits - as argued assessee was not a beneficiary of the said account and that assessee’s name was struck off from the account when M/s Soverign Holding Private Ltd became owner of this foreign bank account - HELD THAT:- Since, this account was opened by the Sh. Rajinder Singh Chatha as a main beneficial owner of account and that the name of assessee i.e. Joginder Singh Chatha was struck off from the account 11th April, 2004 then by no stretch of imagination assessee can be held liable to pay tax for the deposit in the above said bank account in the A.Y 2006-07 & 2007-08. Over and above, Sh. Rajinder Singh Chatha has paid all the taxes on the outstanding amount in this impugned bank account to the revenue authority of U.K under Specific Disclosure Facility of all the irregularities in UK as per the certificate of C.A. of Sh. Rajinder Singh Chatha i.e. M/s Stonegate Trinity LLP filed in this regard as above.
We accept the grievance of the assessee as genuine and accordingly, we hereby delete the addition made by the Ld. Assessing Officer and confirmed by CIT appeals. Decided in favour of assessee.
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2022 (6) TMI 1442 - CESTAT AHMEDABAD
Waiver of penalty - penalty waiver sought on the ground that there were divergent views and subsequently issue has been settled by the Larger Bench decision in the case of M/S. WIPRO LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE BANGALORE-III [2018 (4) TMI 149 - CESTAT BANGALORE] - HELD THAT:- It is found that there were divergent views and the issue finally settled by the Larger Bench in the case of Wipro Ltd. - Moreover, the demand in the present case is within a normal period of one year therefore the provisions of Rule 15(1) is not invokable as there is no suppression of facts, willful misstatement, fraud or collusion etc. on the part of the appellant hence the appellant is not liable to penalty. Accordingly, the demand of Cenvat credit along with interest is maintained and penalty is set-aside.
Appeal allowed in part.
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2022 (6) TMI 1441 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Fraudulent GDR issue - fraudulent scheme was devised by the Company and its Directors - Vintage was the only entity which subscribed the entire 1.17 million GDRs of the Company by obtaining a loan from EURAM Bank - Penalty and restraint orders against company and directors - HELD THAT:- In the instant case, the copies of the loan agreement, pledge agreement was obtained from an authenticated source and, therefore the existence of the original document cannot be disputed and, in any case, the appellants especially the Company and Managing Director had copies of these documents if not the original and, therefore, it does not lie in their mouth to contend that the copies annexed to the show cause notice cannot be relied upon.
In any case, we are of the opinion that if copies of the documents and/or its contents thereof are relied by SEBI and the same is disputed by the appellants regarding its existence or its contents then the onus is upon the appellants who disputes it to prove that the document is forged or its contents are manipulated and its signatures are not of their Directors. The onus is upon the appellants and not upon SEBI.
Appellants contended that they were not aware of the pledge agreement and, therefore, the question of disclosing it to the stock exchange did not arise - Since we have already held that the appellants were aware of the pledge agreement non-disclosure of the pledge agreement invited penalty which the AO has rightly penalised the appellants.
Company furnished wrong information to SEBI regarding the subscribers to the issue. The list provided by the Company indicated that a number of subscribers had subscribed to the GDR issue which upon investigation was found to be false and that only one entity had subscribed to the GDR issue. The contention that the Company had only forwarded the letter that was given by the Merchant Banker cannot be accepted. The responsibility at the end of the day is of the Company and, in our opinion, filing false information was solely the responsibility of the Company and cannot be diverted to the Merchant Banker.
A feeble attempt was made contending that there were two dates on the loan agreement, namely, 16th August, 2010 and 26th August, 2010 and, therefore, doubted the authenticity of the said document. In the first blush the argument appeared to be attractive but upon a closer scrutiny of the document we find that the loan agreement was sent by EURAM Bank to Vintage on 16th August, 2010. This offer of a loan agreement was accepted by Vintage when they placed their signature on 26th August, 2010. Thus, we do not find any discrepancy doubting the authenticity of the loan agreement.
Penalty - As excessive penalty imposed upon the Company does not make any sense. In the instant case, there are 70,000 public shareholde Rs. Penalising the Company with such heavy penalty is infact penalising the shareholders which is not justifiable especially for a running company. Money raised through GDRs has been received by the Company and has not been misappropriated. The same has been utilitised for the purpose for which the GDR was issued, namely, for the Company’s subsidiary which fact has not been disputed. Thus, it is not a case of defalcation of the funds.
Even though the appellants had misled the investors into believing that the GDR was successful whereas there was only one subscriber. Further, the loan agreement, pledge agreement was not disclosed to the shareholders and to the stock exchange. Such scheme was totally fraudulent. If the Company had not given security for the loan taken by Vintage then Vintage could not have subscribed to the GDRs and, consequently, the GDR issue would have failed. Thus, by entering into the pledge agreement for facilitating subscription of its GDRs, we are of the view that the appellant had played a fraud on the securities market and misled the investors by creating a false impression and, thus, violated Section 12A of the SEBI Act and Regulations 3 and 4 of the PFUTP Regulations.
Directions so issued under Section 11 and 11B of the SEBI Act and the penalty so imposed under Section 15HA are disproportionate and does not commensurate with the violation in view of the directions given in similar matters by the respondent.
A penalty of Rs. 10,00,000/- has been imposed on the Directors only on the strength that they were signatories to the board resolution. In Mr. Gurmeet Singh vs. SEBI [2021 (9) TMI 1519 - SECURITIES APPELLATE TRIBUNAL MUMBAI] and other connected appeals this Tribunal has held that merely being a signatory to a resolution does not mean that these Directors were part of the fraudulent scheme that the respondent was required to show some other evidence to show that these Directors were also part of the fraudulent scheme. Thus the imposition of penalty is excessive.
Consequently, while affirming the order of the WTM and AO of the aforesaid violations committed by the appellants we reduce the debarment period of the Company and the Managing Director from five years to three years. The other Directors have already undergone the debarment period and, therefore, no further order is required to be passed. In so far as the penalty imposed by the AO is concerned, the penalty against the Company is reduced to Rs. 25 lakhs. The penalty against the Managing Director is affirmed. The penalty imposed against the remaining Directors is reduced from Rs. 10,00,000/- to Rs. 2,00,000/-. The appeals are partly allowed. In the circumstances of the case, parties shall bear their own costs.
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2022 (6) TMI 1440 - GAUHATI HIGH COURT
Seeking grant of Interim Bail - Money Laundering - siphoning off of the funds - criminal conspiracy - HELD THAT:- Undoubtedly, the instant case is of serious nature of economic offence involving a large interest of the State. However, in view of pendency of the instant case, he has been deprived of the benefit of annual leave entitlement during the continuation of serving out the life imprisonment awarded against him and others in connection with Special NIA Case No.01/2009.
In the absence of certainty in commencement of trial and completion of further investigation in the case at the earliest and prolonged detention of him in judicial custody, this Court is of the considered opinion that in order to enable him to avail the benefit of his annual leave, he may be granted the liberty of interim bail only - it is provided that the accused petitioner namely, Mohet Hojai shall be released on interim bail of Rs.50,000/- (Rupees Fifty Thousand) with 02 (two) sureties of like amount to the satisfaction of the learned Special Judge, Guwahati , Assam.
The interim bail allowed subject to conditions imposed.
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2022 (6) TMI 1439 - GUJARAT HIGH COURT
Validity of Revision u/s 263 - PCIT held AO had passed the assessment order without making disallowance u/s 40(a)(ia) on payment made to labour contractor and payment made to various person in cash in excess of Rs. 20,000/- - Tribunal allowed the appeal of assessee quashing and setting aside the order passed by PCIT - HELD THAT:- We note that during the assessment proceedings, assessee had submitted before assessing officer (AO), the cash payment register and explained each of the item of proposed addition as per show cause notice of assessing officer. The cash payment register wherein payment has been explained to the assessing officer.
AO having gone through the cash payment register and explanation of each item, did not make the addition. Therefore, we note that assessing officer has examined this issue during the assessment stage and has taken a possible view and therefore, he did not make the addition. Hence, so far this issue is concerned, the order passed by the assessing officer, is neither erroneous nor prejudicial to the interest of the Revenue.
Thus in view of settled legal position with regard to invoking of section 263 of the Act, 1961, we are of the opinion that there is no infirmity in the impugned order passed by the Tribunal so as to give rise to any substantial question of law.
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2022 (6) TMI 1438 - CESTAT KOLKATA
Refund claim of excess duty paid - Issuance of two Notifications No.22/2014 and 24/2014 modifying the rates of duty on Motor Spirit (MS) and High Speed Diesel (HSD) - date on which the notification came into effect - HELD THAT:- Hyderabad Bench of the Tribunal in the case of ONGC Ltd. & Others [2020 (3) TMI 700 - CESTAT HYDERABAD] have held vide Final Order No.A/31085- 31087/2019 that both the conditions mentioned in Section 5A(5) have to be fulfilled for any notification to come into force. In this case, the second condition was not fulfilled during the relevant period and therefore, the exemption notifications had not come into force. Consequently, the appellants were not required to pay duty at the enhanced rate during the relevant periods and therefore, any excess duty which they paid was refundable.
The Appellant’s argument that the applicability of Notifications would be from the date of publication in the Gazette in terms of Section 5A of the Central Excise Act, 1944 is correct, legal and proper. Therefore, the impugned orders cannot be sustained and therefore are set aside - Appeal allowed.
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2022 (6) TMI 1437 - TELANGANA HIGH COURT
Interest on account of delayed filing of GST returns - HELD THAT:- Against the notice dated 29.03.2022, petitioner has filed representation dated 18.04.2022 before respondent No.5 as well as subsequent representation dated 28.04.2022 addressed to respondent No.3 - Without entering into the rival contentions, it would be in the interest of justice if the above representations of the petitioner are considered by the respondents.
The respondent No.3 Commissioner of Central Tax and Customs, Hyderabad GST Commisionerate, Hyderabad directed to consider the representations of the petitioner dated 18.04.2022 and 28.04.202, after giving an opportunity of hearing to the petitioner. Let the above decision be taken by respondent No.3 within a period of 30 days from the date of receipt of a copy of this order.
Petition disposed off.
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2022 (6) TMI 1436 - SUPREME COURT
Principle of estoppel and acquiescence - preference over statutory service Rules prescribing the procedure for promotion of Class-IV employees to Class-III working in the Banaras Hindu University BHU, Varanasi, a Central University or not - HELD THAT:- The only test required for eligible candidates was to pass in the departmental test i.e. the test of simple English, Hindi and Arithmetic. Thus, if an eligible candidate passes in the written test of simple English, Hindi and Arithmetic and also passes in the type test, would be entitled to be placed in the seniority list for promotion - In the present case, the Board of Examiners comprising of large number of Members changed the entire procedure and they established a completely new procedure. They awarded 20 marks for the type test treating it to be compulsory, 60 marks for the written departmental test of simple English, Hindi and Arithmetic with 20 marks for each subject and further introduced an interview of 20 marks. Thus, the merit list was to be prepared on the total 100 marks as distributed above.
In the case of M/S. TATA CHEMICALS LTD. VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) JAMNAGAR [2015 (5) TMI 557 - SUPREME COURT], it has been laid down that there can be no estoppel against law. If the law requires something to be done in a particular manner, then it must be done in that manner, and if it is not done in that manner, then it would have no existence in the eye of the law.
The impugned judgment of the Division Bench dated 29.07.2016 is set aside and the judgment of the learned Single Judge dated 26.08.2011 is restored - Appeal allowed.
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2022 (6) TMI 1435 - BOMBAY HIGH COURT
Validity of reopening of assessment - notice against dead [assessee] - HELD THAT:- Respondents[ revenue] has not controverted the factum of the death of late Smt. Niranjana Kalyanji Tanna and, therefore, we have no hesitation in holding that the notices impugned are invalid and non est in the eyes of law and cannot therefore be upheld. WP allowed.
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