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Showing 1 to 20 of 1372 Records
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2023 (1) TMI 1372 - DELHI HIGH COURT
Validity of notice issued u/s 148A - assessment order triggered on account of a notice issued u/s 148 [i.e., the old regime] - scope of new regime - petitioner, says that the impugned order and notices cannot be sustained, because revenue have already passed an assessment order u/s 147 r.w.s. 144B of the Act - HELD THAT:- In our view, prima facie, the impugned order and the notices are unsustainable as the respondents/revenue have already passed an assessment order, qua which an appeal is pending with the CIT(A).
Issue notice. In case instructions are received to resist the writ petition, counter affidavit will be filed before the next date of hearing.
List the matter 03.02.2023. In the meanwhile, the AO is restrained from continuing with the assessment/reassessment proceedings which have been triggered on account of the impugned order and notice.
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2023 (1) TMI 1371 - ITAT JODHPUR
Disallowance made u/s 143(1) - failure to pay the employee’s contribution of PF/ESI within the prescribed due dates as per Section 36(1)(va) - Assessee submits that the assessee has filed written submission along with tax audit report but the ld. CIT(A)/NFAC has grossly erred in sustaining the addition in respect of delay payment of contribution employees towards PF and ESI, where the addition is not on account of disallowance on expenditure indicating in the audit report but not taken into account computing in the total income in the return as per section 143(1)(a)(iv)
HELD THAT:- We note that the assessee seeks to raise certain legal grounds. Hence, we are of the view that all issues may be restored to the file of the AO for examine the issues that may be urged by him. Accordingly, we set aside the order of the ld. CIT(A) and restore all issues to the file of the Ao for verification and fresh hearing by providing adequate opportunity to the assessee. Thus the appeal of the assessee is allowed for statistical purposes as per direction mentioned above. Appeals of the assessee are allowed for statistical purposes.
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2023 (1) TMI 1370 - ITAT MUMBAI
Validity of assessment passed u/s 143(3) r.w.s. 144C as barred by limitation - need for issuance of draft order u/s 144C(1) - According to CIT(A), since there was no variation in the returned income by the assessee/foreign non-resident company (eligible assessee), the AO ought not to have passed the draft assessment order and should have straight away proceeded to pass the assessment order - HELD THAT:- We note that though the assessee herein is an eligible assessee u/s 144C(1) of the Act, however the condition required to be satisfied for issuance of draft order u/s 144C(1) of the Act has not been satisfied because there was no variation of returned income which is prejudicial to the interest of the assessee.
Therefore, we find that the aforesaid condition prescribed u/s 144C(1) of the Act was not satisfied. Therefore, the AO ought to have passed the assessment order u/s 143(3) of the Act within the limitation time prescribed u/s 153(1) of the Act i.e. within the twenty one (21) months from the end of the assessment year i.e. on or before 31st December, 2016. And since the assessment order was framed on 7th Feb, 2017, the action of the AO is barred by limitation. No infirmity in the impugned order of the Ld. CIT(A). Therefore, we confirm the action of the Ld. CIT(A) and decline to interfere with the order of the CIT(A). Hence the appeal of the revenue is dismissed.
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2023 (1) TMI 1369 - GUJARAT HIGH COURT
Recovery of dues - priority of dues - whether the dues of secured financial institution will have priority over State tax dues or not? - HELD THAT:- In the instant case, it is an undisputed fact that respondent No.1 – Bank of Baroda is a secured creditor. Therefore, the Bank has valid first charge over the properties in question by way of mortgage and has first right to sell the same in view of priority under Section 26E of the Act and recovered its dues from it. The petitioners are the bona fide purchasers, purchased the properties in question from the public e-auction held by the bank and paid full and total sale consideration to the bank and the bank has issued sale certificate in favour of the petitioners and also handed over the peaceful and vacant possession to the petitioners. Indisputably, the charge created by respondent No.3 – State Authority is later point of time. Therefore, the debts due to Bank of Baroda – a secured creditor shall be paid in priority over other debts/taxes payable to the State Government. The petitioners have no concern with the dues of the State Authorities.
Moreover, now it is well settled legal position that the mortgagor bank has priority to recover the dues against any charges of the State Government or Central Government, more particularly the mortgage is created prior to the registration of such charge by the Authority.
It is held that the SARFAESI Act is meant for enforcement of security interest which is created in favour of the secured creditor – financial institution, and provides specific mechanism / provision for the financial assets and security interest. Any other provision(s) would not defeat the provision of Section 26E of the SARFAESI Act and also the object and purpose of the SARFAESI Act.
This Court holds that the petitioners are the bona fide purchasers and are the absolute owners of the properties in question with legal and valid title. Consequently, the sale deed registered by the Authority concerned is legal and valid document - the present petition is partly allowed.
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2023 (1) TMI 1368 - CALCUTTA HIGH COURT
Assessment barred by limitation - as argued only the disputed purchase cases related issue was restored by the Income Tax Appellate Tribunal, therefore, provisions of section 153(3)(ii) is applicable in this case where no time limit is applicable - tribunal had noted the factual position and held assessment made on the respondents/assessee is barred by limitation but revenue seeks to take advantage of Section 153(3)(ii) - HELD THAT:- As very same contention was raised by the revenue before the CIT (Appeals) who after noting the facts held that the provisions of Section 153(3)(ii) of the Act are not attracted in the facts and circumstances of the case on hand placing case of W.C. Shaw Pvt. Ltd. [2005 (1) TMI 318 - ITAT CALCUTTA-B].
Thus we find that both the Commissioner of Income Tax (Appeals) as well as the Tribunal had taken note of the factual position and held the assessment to be barred by time. Hence, we find there is no substantial questions of law arising for consideration in this appeal.
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2023 (1) TMI 1367 - ITAT INDORE
Revision u/s 263 against order passed u/s 153A - PCIT is of the opinion that since the AO did not disallow cash payments made by the assessee, neither disallowed the exemption of agricultural income considering the fact that the assessee was engaged in Real Estate business was not involved in the agricultural activities, thus making assessment order is erroneous so far it is prejudicial to the interest of the Revenue
HELD THAT:- We find that the order impugned passed by the PCIT whereby and whereunder the order passed by the Ld. AO under Section 143(3) r.w.s. 153A of the Act has been sought to be revised is not sustainable due to lack of jurisdiction in invoking Section 263 of the Act by the Ld. PCIT for this particular reason that the order sought to be revised has already been passed by the Ld. ACIT upon prior approval from the ACIT, Indore under Section 153D of the Act and therefore, the same cannot be revised without having any revised decision and/or directions of the ACIT under Section 153D of the Act.
We, therefore, respectfully relying upon the ratio laid down in the case of Shri Ramamoorthy Vasudevan [2018 (11) TMI 1874 - ITAT PUNE] quash the impugned order under Section 263 of the Act passed by the Ld. PCIT (Central), Bhopal. Assessee’s appeals are allowed.
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2023 (1) TMI 1366 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI (LB)
Condonation of delay in filing appeal - assets of the land holding companies, i.e., subsidiary of the Corporate Debtor can be treated to be assets of the Corporate Debtor or not - lease lands could have been dealt and the Resolution Plan could legally contain a clause for transfer of the lease hold rights by the Appellant or not - assets of the subsidiary companies can be dealt with in Corporate Insolvency Resolution Process of holding Company or not - Appellant was required to be made party to the CIRP proceedings and heard before approval of any resolution plan dealing with the Project land or not - Resolution Professional acted within the ambit of I & B Code in giving a certificate that Resolution Plans submitted by Roma Unicon Designex Consortium and Alpha Corp Development Private Limited are in accordance with the provisions of the Code or not - Appellant was aware of the development carried out by the Corporate Debtor on the lease land before commencement of the CIRP of the Corporate Debtor or not.
Time Limitation - HELD THAT:- Reference made to the Judgement of Hon’ble Supreme Court passed in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2022 (1) TMI 385 - SC ORDER]. By the said order, the Hon’ble Supreme Court held that in computing the period of limitation for petitions/applications/appeals/suits, the period from 15/03/2020 to 28/02/02022 shall stand excluded. Hon’ble Supreme Court further held that in case where the limitation would have expired during the period 15/03/2020 to 28/02/2022 notwithstanding the actual balance period of limitation, all person shall have a limitation period of 90 days i.e. from 01st March, 2022 to 29th May, 2022. As per the judgement of the Hon’ble Supreme Court, the period of limitation for filing the Appeal expiring between 15th March, 2020 to 29th May, 2022 and appeal having been filed within 90 days period as provided by the said order, the Appeal Company Appeal (AT) (Insolvency) Nos.180, 629 & 630 of 2022 55 cannot be held to be barred by time. The objection regarding the limitation is overruled.
Whether in the CIRP proceedings of the Corporate Debtor, i.e. Earth Infrastructures Limited, the assets of the land holding companies, i.e., subsidiary of the Corporate Debtor can be treated to be assets of the Corporate Debtor? - Whether, in the Resolution Plans submitted by the Successful Resolution Applicants, i.e., Roma Unicon Designex Consortium and Alpha Corp Development Private Limited, the assets of the subsidiary, i.e., lease lands could have been dealt and the Resolution Plan could legally contain a clause for transfer of the lease hold rights by the Appellant in favour of Successful Resolution Applicant without there being any prior permission from the Appellant? - Whether assets of the subsidiary companies can be dealt with in Corporate Insolvency Resolution Process of holding Company? - HELD THAT:- The Judgement of this Tribunal in NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY VERSUS MR. NILESH SHARMA RESOLUTION PROFESSIONAL OF DREAM PROCON PVT. LTD., VICTORY ACE SOCIAL WELFARE SOCIETY [2022 (3) TMI 600 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH, NEW DELHI] does not help the Respondents in the present case. In Nilesh Sharma case, the Adjudicating Authority directed the NOIDA Authority to participate in the CIRP Process and file its claim in the Insolvency Resolution Process whereas in the present case neither the Appellant were asked to participate in the CIRP nor file their claim rather they were informed by the Resolution Professional only after approval of the Resolution Plan. It is further to be noted that the Judgement do not consider the provisions of Section 18 hence can not be held to be a binding precedent holding that assets of a subsidiary can be included in the assets of holding company.
The Judgement of this Tribunal in “Nilesh Sharma” case thus is still under scrutiny by the Hon’ble Supreme Court. However, Hon’ble Supreme Court has granted liberty to Resolution Professional including Resolution Applicant and Others, if required, so as to find out some amicable solution between all parties including the lessee within the ambit of IBC.
The law is well settled that subsidiary company and the holding company are separate entities. Learned Counsel for the Appellant in the above reference has relied on Judgement of the Hon’ble Supreme Court in MRS. BACHA F. GUZDAR, BOMBAY VERSUS COMMISSIONER OF INCOME-TAX, BOMBAY [1954 (10) TMI 2 - SUPREME COURT]. It was held by the Hon’ble Supreme Court that shareholder does not acquire any interest in the assets of the company by purchasing shares of company.
Thus the Corporate Debtor, who was lead member of the Special Purpose Company, was contemplated to be separate entity and the contention of the Respondent that both should be treated to be one entity cannot be accepted. It is further relevant to notice that Learned Counsel for the Respondents have also contended that Corporate Veil of the land holding company be pierced and should be lifted in the facts of the present case which will make it clear that it is the corporate debtor which is behind the land holding companies. Lifting of Corporate Veil between the subsidiary and parent company have been legally accepted proposition.
The Judgement of the Hon’ble Supreme Court in JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE ASSOCIATION & ORS. VERSUS NBCC (INDIA) LTD. & ORS. [2021 (3) TMI 1143 - SUPREME COURT] is also to be noticed on another aspect of the matter. In the above case, the Corporate Debtor was granted lease of the land by Yamuna Expressway Industrial Development Authority which was also constituted under Section 3 of Uttar Pradesh Industrial Area Development Act, 1976. It has provided land for execution of various projects by JAL/JIL under the concession agreement. It was observed by the Hon’ble Supreme that Resolution Plan could have modified the terms of contract but the same could not have been carried out without the approval and consent of the authority concerned - the judgement of the Hon’ble Supreme Court fully supports the view which we are taking in the present matter that without the approval of the Appellant, the leased land could not have been included in the Resolution Plan nor there could have any direction by the Adjudicating Authority to transfer the lease land without the approval of the Appellant.
The transfer of land thus is statutorily governed and terms and conditions lays down by authority are statutorily protected. Resolution Plan which contains provisions for transfer of the project of the land contrary to the terms and conditions of the lease deed under which the project land was leased out to the land holding company is contrary to the terms and conditions of the lease deed as well as Section 7 of the UP Industrial Area Development Act, 1976. Resolution Plan thus was clearly in breach of the provisions of the 1976 Act which can not be sustained - Explanation to Section 18(1)(f) clearly contemplates that assets of subsidiary company are entirely different from assets of the holding company and principle of lifting of veil cannot be invoked contrary to statutory prescription as in the present case that is Section 18(1)(f).
Resolution Plan could have contained the provision obligating the Appellant to transfer lease hold right in favour of SRA or any third entity or not - HELD THAT:- Resolution Plan could not have contained clause for transfer of land without there being any approval of the Appellant for such transfer. Further direction to the Appellant to transfer while waiving of its entitlement and charges is clearly contrary to the terms and conditions of the lease and not in a public interest - In the present case, in the Information Memorandum, it clearly gives the details of status of the project land which indicates that no project is complete. The apartment as contemplated in 2010 Act are not even in existence in the facts of the present case hence there is no question of applicability of Section 5 - The present is not a case where any apartment has been transferred in favour of the allottees. The submission made on behalf of the SRA relating to 2010 Act are misconceived.
Whether the Appellant was required to be made party to the CIRP proceedings and heard before approval of any resolution plan dealing with the Project land? - HELD THAT:- The Appellant’s case in these Appeals are that Appellant was not issued any notice by the Adjudicating Authority for participation in the CIRP Process. From the facts, it is clear that the Resolution Professional wrote a letter asking certain information from the Appellant and thereafter only informed about the approval of the Resolution Plan, at no point of time the Appellant was asked to participate in the CIRP Process of the Corporate Debtor. The Resolution Plan which was approved by the Committee of Creditors on 26.08.2019 clearly has dealt with the lease land of the NOIDA Authority. Resolution Professional was well aware that Appellant has its dues on the lease land which have not been paid so far. It was incumbent on the Resolution Professional to inform the Appellant about the Resolution Plan which have been received in the CIRP Process of the Corporate Debtor - It is to be noted that the Corporate Debtor was lead shareholder of the land holding company in case of Earth Towne Infrastructures Pvt. Ltd. it being 98% shares and with regard to other two land holding companies it had 100% shareholding. In the CIRP Process of such corporate debtor, the Appellant was necessary party and without they being before the CIRP Process the land leased out by them could not have been made subject matter of the Resolution Plan - Appellant was required to be made party to the CIRP Process before approval of any resolution plan dealing with project land.
Whether, Resolution Professional acted within the ambit of I & B Code in giving a certificate that Resolution Plans submitted by Roma Unicon Designex Consortium and Alpha Corp Development Private Limited are in accordance with the provisions of the Code? - HELD THAT:- The Resolution Professional was well aware that the project land is a leased out land which has been leased out by the Appellant to the land holding companies which fact has been clearly mentioned in the Information Memorandum. Information Memorandum also mentions few facts regarding the lease rent. Resolution Professional in his submission has also submitted before us that Resolution Professional has shared the details of the dues of the Appellant to the Resolution Applicants. When the Resolution Professional is aware that project land does not belong to the Corporate Debtor how he permitted the said lease land to be part of resolution plan is question which is unanswered.
The development right in the project under which the developer is entitled to carry on development is not akin to any ownership/lease hold right in the leased land. Resolution Professional has certified the Resolution Plan that it is in accordance with I&B Code which clearly deals with the project land that is lease land in its entirety. The Resolution Professional did not communicate to the appellant about the receiving of the Resolution Plan and the nature of resolution plans which have been received nor invited attention of the Appellant that Appellant’s dues are not being taken care in resolution plan.
The Resolution Professional did not act within the ambit of the Code while certifying that Resolution Plan submitted by Roma Unicon Designex consortium and Alpha Corp Development Private Limited is in accordance with the provisions of the Code - Registry is directed to forward the Copy of this Order to IBBI to examine the work and conduct of RP and take such action as it may deem fit and proper.
Whether Appellant was aware of the development carried out by the Corporate Debtor on the lease land before commencement of the CIRP of the Corporate Debtor? - HELD THAT:- The lease deed clearly cast an obligation on the Appellant to monitor the implementation of the project. It has been the case of the association of allottees that they have time and again brought to the notice of the Appellant about the misdeeds of the corporate debtor. Reference to BuilderBuyers meeting held on 20th May, 2016 has also been made - The allottees has brought into the notice of the Appellant about the grievances which they were facing due to delay in the project causing financial distress and mental distress to them.
The Appellant was well aware that the development on the project land is being carried out by the Corporate Debtor. Further it is observed that the fact that appellant was aware that the corporate debtor is carrying out development in the project land is not akin to their knowledge of terms and conditions of Resolution Plan which was submitted in the resolution process of the corporate debtor - The knowledge by the Appellant of carrying out development by the corporate debtor cannot be read as their consent to transfer the land in favour of the Successful Resolution Applicant or any other person.
What is the way out in the facts and circumstances of the present case? - HELD THAT:- Looking to the stage at which the projects are as on date and looking to the fact that allottees have paid hundreds of crores rupees in the above three projects to the Corporate Debtor and waiting for possession of the flat for last several years, we have to find out ways and means to save the interest of the allottees as well as the interest of the Appellant - It shall be open for the Appellant to enter into an arrangement with the Resolution Applicant and Flat Buyer Associations for payment of dues and thereafter it may permit transfer of the land so ultimately allottees be given rights and the projects can be developed by the SRA.
The Appellant shall recalculate the dues and communicate to the Resolution Professional and Flat Buyers Associations without charging any penal interest within 15 days. Fresh Resolutions Plans so submitted will be considered and examined by the RP and be submitted before CoC for fresh consideration and approval. The application of Resolution Plan may be filed for approval of the plan, thereafter.
Appeal disposed off.
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2023 (1) TMI 1365 - UTTARAKHAND HIGH COURT
Prayer to quash the cancellation of GST Registration order - fulfilment of dues under the GST Act pending - HELD THAT:- It is submitted by the learned counsel for the petitioner that the issue is covered by the Division Bench judgment of this Court in VINOD KUMAR VERSUS COMMISSIONER UTTARAKHAND STATE GST AND OTHERS [2022 (7) TMI 128 - UTTARAKHAND HIGH COURT] wherein this Court has held that the Commissioner is not an adjudicating authority, and, therefore, appeal u/s 107 of the Uttarakhand GST Act, 2017 shall not lie to the Commissioner.
We dispose of the writ petition giving liberty to the petitioner to file an application before the State Tax Officer, Rudrapur, Sector-2, Uttarakhand ventilating his grievances and if the petitioner pays dues under the GST Act pending against him, then his application for restoration of GST registration may be considered liberally.
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2023 (1) TMI 1364 - MADHYA PRADESH HIGH COURT
Levy of IGST - ocean freight for services supplied by a person located in non-taxable territory - constitutional validity of N/N. 8/2017-Integrated Tax (rate) dated 28th June and entry 10 of the N/N. 10/2017 Integrated Tax (Rate) dated 28 June, 2017 - HELD THAT:- Keeping in view of the judgment in Union of India Vs. Mohit Minerals Pvt. Ltd [2022 (5) TMI 968 - SUPREME COURT], the petitioner is not liable to pay IGST on ocean freight for services supplied by a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India.
The impugned notification No. 8/2017-Integrated Tax (rate) dated 28th June and entry 10 of the Notification 10/2017 Integrated Tax (Rate) dated 28 June, 2017 are quashed as being ultra vires.
Petition disposed off.
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2023 (1) TMI 1363 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Permission for withdrawal of appeal - Appellant submits that he may be permitted to withdraw since he has filed the appeal questioning the order of the Adjudicating Authority which prohibited him to proceed with the challenge process - HELD THAT:- The prayer is accepted and the Appellant is permitted to withdraw the appeal without prejudice to any of the contention of either of the parties.
Appeal dismissed as withdrawn.
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2023 (1) TMI 1362 - DELHI HIGH COURT
Challenge to order against acquittal passed by the learned Metropolitan Magistrate - presumption of innocence - benefit of doubt - The case's origin traced back to a marriage in 2001, followed by allegations of dowry harassment and cruelty, leading to various legal proceedings, including FIR registration, charge framing, and acquittals at different judicial level - HELD THAT:- It is well settled that in an appeal against acquittal, the scope of the learned Appellate Court is to the extent that the judgment of acquittal should not be ordinarily interfered with unless the findings in such judgment are shown to be arrived at by incorrect or perverse appreciation of material on record and the law. This settled position of law with respect to the scope of the learned Appellate Court qua an appeal against the acquittal has been considered in a catena of judgments by the Hon'ble Supreme Court.
In Basheera Begam v. Mohd. Ibrahim, [2020 (1) TMI 1681 - SUPREME COURT] the Hon'ble Supreme Court has held When there is circumstantial evidence pointing to the guilt of the accused, it is necessary to prove a motive for the crime. However, motive need not be proved where there is direct evidence. In this case, there is no direct evidence of the crime.
The petitioner had challenged the order of acquittal passed by the learned Metropolitan Magistrate before the learned Sessions Court, and the latter, after examining the records of the case found no anomaly in the impugned judgment and agreed with the view taken by the learned trial Court. In these circumstances, the presumption of innocence qua the respondent has been reinforced twice over.
This Court finds that the learned trial Court as well as the learned Appellate Court has carefully scrutinized the evidence on record and has dealt with each and every issue raised by the petitioner/complainant. The views taken by both the courts below are possible. From the evidence, it is clear that not only the allegation of demand of dowry qua the respondent were vague but the discrepancy in the allegations of harassment and cruelty were substantial to give benefit of doubt to the respondent and acquitting him.
There is no ground made out to interfere with the judgment passed by learned Metropolitan Magistrate and the judgment of the learned Appellate Court dated 21.02.2018, upholding the acquittal of the respondent by the learned trial Court - Petition dismissed.
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2023 (1) TMI 1361 - TELANGANA HIGH COURT
Irregular availment of input tax credit based upon fake and fraudulent invoices - Seeking for issuance of Writ of Mandamus in the nature of restraint order to respondent No. 3 to not to interfere with the liberty and peaceful life of the petitioner and not to issue further summons under the provisions of Section 41-A of Cr.P.C - HELD THAT:- No strong case is made out by the petitioner calling for interference to the summons issued as has been sought for. Nonetheless, from the materials placed, there appears to be documents which would reveal that the petitioner otherwise is a physically challenged person. Therefore, it would not be justified in the said circumstances expecting the petitioner to be subjected to interrogation on day-to-day basis which may cause great inconvenience and hardship to the petitioner.
Considering the statement of the learned counsel for the Department that there are around 151 taxpayers who are said to have involved in availing fraudulent passing on input tax credits, the investigation may take some time. That of the 151 taxpayers, the petitioner being consultant of 122 tax payers, his presence for investigation also would be required in respect of each of the tax payers case is concerned.
Petition disposed off.
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2023 (1) TMI 1360 - KARNATAKA HIGH COURT
Application for discharge under Section 245(2) of Cr.P.C. - learned Magistrate dismissed the application for discharge stating that the various contentions raised by the petitioners-accused can be considered after full-fledged trial, and the same was confirmed by the learned Sessions Judge - HELD THAT:- At para 4 of the complaint lodged by the respondent, it is alleged that the petitioners accused by making use of the fabricated purchase orders have availed the benefits under the Notification No. 21/2002-Cus dated 1.03.2002. However, along with the complaint, the respondent has not placed any material to substantiate the allegations that the petitioners accused by making use of the fabricated purchase orders availed the benefit under the said notification. More so in the backdrop that the alleged fabricated documents were seized from the office of the accused, which implies that, the said documents were not made use of for claiming the benefits. Hence, in the absence of any material the cognizance taken by the learned Magistrate is impermissible.
The continuation of the criminal proceedings against the petitioners-accused will be an abuse of process of law, since the probability of the conviction of the petitioners-accused is remote and bleak.
The impugned proceedings on the file of The Special Court for Economic Offences, Bengaluru, is hereby quashed - Criminal petition is allowed.
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2023 (1) TMI 1359 - ITAT MUMBAI
TP Assessment order passed in the name of non-existing amalgamating company - assessment order passed in the name of company that ceased to exist from the date of amalgamation - HELD THAT:- As fact of amalgamation was brought to the notice of the AO, TPO, CIT and further the Assessee also mentioned before the learned CIT (A) in the form no.35 as well as in the statement of facts. Despite this, the assessment order, transfer pricing order and notice under Section 156 of the Act was passed in the name of non-existing company.
Thus we hold that Assessment order passed in the name of non existing amalgamating entity, instead of amalgamated company, despite due notice to all the authorities in time , is invalid and hence, quashed.
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2023 (1) TMI 1358 - ORISSA HIGH COURT
Rejection of bail - alleged commission of offences under Section 20(b)(ii)(C) of NDPS Act - HELD THAT:- Taking into account that the co-accused, who has since been released on bail has not surrendered, this Court is constrained not to entertain the bail application of the petitioner.
It is stated that the petitioner is in custody since 16.06.2020 and considering that his father undergone surgery, as stated, learned Court in seisin is called upon to expedite the trial in respect of the present accused, who is in custody without waiting for the other coaccused, who has failed to surrender.
Application disposed off.
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2023 (1) TMI 1357 - PATNA HIGH COURT
Seeking grant of Regular bail - murder - allegation of killing the daughter of the informant on account of nonfulfillment of the demand for dowry by hanging her from a fan - HELD THAT:- Considering the fact that a general and omnibus allegation has been levelled against the accused persons, but the main accused person appears to be the husband of the deceased victim lady whereas, the petitioner is the elder brother-in-law of the deceased victim lady, it is deemed fit and proper to direct for release of the petitioner on bail, immediately upon surrender by the husband of the deceased victim lady before the learned trial court, subject to such conditions as may be deemed fit and proper to be imposed by the learned court of Judicial Magistrate-1st Class, Buxar in connection with Koran Sarai P.S. Case No. 18 of 2021.
Petition disposed off.
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2023 (1) TMI 1356 - ITAT BANGALORE
TP Adjustment - re-computing the margin by treating ESOP expenses as operating in nature - HELD THAT:- We note that the Ld. AO/TPO has not considered the ESOP agreement between the employees and the AE. Unless the expenditure has been incurred by the assessee, it cannot form part of margin computation. What we understand from the submission of the assessee is that the assessee before us has only played the role of deducting the TDS on the discount the employees have received in the ESOP scheme of the AE. However this needs verification of the ESOP agreement. We therefore remand this issue back to the Ld. AO to verify the agreement and the ESOP scheme having regards to the financials of the assessee. The Ld. AO/TPO is directed to consider the issue in accordance with the view taken by this Tribunal in case of Radysis India [2023 (3) TMI 598 - ITAT BANGALORE]
Comparable selection - HELD THAT:- Assessee is a captive service provider that renders technical assistance services in the areas of software development and application to its AEs, thus selection of comparables should match with functional profile of assessee.
We therefore deem it appropriate to remit them to the Ld. AO/TPO. The Ld. AO/TPO shall look into the functional profile of the comparables and verify the same with that of the assessee. If they are functionally found to be similar with that of assessee, the same may be considered in accordance with law, considering the turnover limit of Rs. 1 to 200 Crores.
Exclude Exilant Technologies Pvt. Ltd., Tech Mahindra Ltd., Larsen & Toubro Infotech Ltd., Mindtree Ltd., Nihilent Ltd., Persistent Systems Ltd., Wipro Ltd., Tata Elxsi Ltd., for exceeding turnover limit of Rs. 200 crores.
Thirdware Solutions Ltd., to be excluded from the final list as present assessee before us is a captive service provider catering to the needs and at the direction its AE under the SWD segment. As there is no segmental details available, we cannot consider this company to be a good comparable as the entire revenue is catagorised under one head i.e., ‘Revenue from Operation’. Even on RPT filter we note that this company has RPT of more that 25% which does fails the filter applied by the Ld.TPO.
Exilant Technologies Pvt. Ltd - We are not able to appreciate the arguments of the Ld.AR regarding no segmental details available. It is also not possible to ascertain the expenditure incurred by this comparable on research and development as the schedules to the account is not there. We therefore remand this company back to the Ld.TPO to verify the above details. Admittedly this comparable has not been considered during A.Y 2017-18. In the event, there are any new materials obtained by the Ld.TPO, the same must be shared with the assessee. After considering the objections and scrutinising the functional similarities, the Ld.TPO shall then consider this comparable if at all it fits into all the necessary criteria.
We also note that, merely because this company is into software development, cannot be a reason to consider its inclusion. Needless to say that proper opportunity of being heard must be granted to assessee.
B. Tech Mahindra Ltd. - Admittedly, the turnover of this comparable is more than 200 crores. We have already considered and excluded comparables for failing the turnover filter by following the observations of Coordinate Bench of this Tribunal in assessee’s own case. Following same principles, we direct the exclusion of Tech Mahindra Ltd. from the final list.
Elveego Circuits Pvt. Ltd. company is in the business of Chip and semiconductor design services where as the assessee before us is into basic SWD services of coding an documentation, Testing and quality assurance, software patches and maintenance. There is no similarity between the functions performed by the assessee vis-à-vis that of this company. We therefore at the threshold reject this company being functionally not similar with that of the assessee.
ThreeSixty Logica Testing Services Pvt.Ltd and Black Pepper Technologies Pvt.Ltd - AR submitted that these companies earns revenue for Information technology services and Software development services for which segmental details not available - We remand this company to the Ld.AO/TPO to consider the objections raised by the assessee against its inclusion and to consider the same in accordance with law.
Aptus Software Labs Pvt.Ltd and Great Software Laboratory Pvt.Ltd. - AR submitted that these companies earns revenue for Information technology services - We remand this company to the Ld.AO/TPO to consider the objections raised by the assessee against its inclusion and to consider the same in accordance with law.
Non granting of WCA and risk adjustment to the assessee - As relying on HUAWEI TECHNOLOGIES INDIA (P.) LTD. [2018 (10) TMI 1796 - ITAT BANGALORE] AO was not justified in denying adjustment on account of working capital adjustment. In the light of the decision referred to above, the assessee is entitled to working capital adjustment. The assessee is directed to provide the working capital adjustment for year under consideration The TPO is accordingly directed to allow the same as per law.
Risk adjustment, sought by the assessee, the details will have to be furnished before the Ld.AO/TPO by the assessee itself establishing the differences in the risk. Only then the same could be computed. We are therefore of the view that in the event the assessee is able to file documents/evidences to establish the differences in the risk, the Ld.TPO may consider it and compute is accordance with law.
Appeal filed by the assessee stands partly allowed.
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2023 (1) TMI 1355 - CALCUTTA HIGH COURT
Seeking to invoke the inherent powers of this Court under Section 401 read with Section 482 Cr.P.C. for recalling, quashing of the proceedings pending before the learned Metropolitan Magistrate, 9th Court, Calcutta - defective products and their replacements - HELD THAT:- The Magistrate was wrong in his findings/reasons that as the accuseds had not entered their appearance (meaning personal appearance) before the court, the application under Section 205 Cr.P.C. be dismissed - the said powers of a Magistrate can be exercised at any stage of proceedings or throughout the said proceedings and as such the said prayer can be considered right from the stage of commencement of the proceedings even at the stage of issuing summons and the accused need not appear personally.
Admittedly the Arbitration clause has not been invoked by the parties. The opposite party has chosen to put the criminal law into motion by initiating the proceedings in this case, alleging breach of contract/trust by the petitioners. The parties to the agreement still have the option to use the Arbitration clause or may seek relief from the appropriate forum, the dispute being civil in nature and also a commercial dispute being given a criminal colour to pressurize the petitioners.
In the present case there is no case against the petitioners that they dishonestly induced the complainant to deliver any property. There was neither any inducement nor any delivery of property as required. As such an essential ingredient required to constitute an offence under Section 420 IPC being prima facie not present, the offence alleged cannot be held to be proved against the petitioners/accused.
From the petition of complaint, no such materials has been produced to prima facie show that the petitioners intentionally with knowledge cheated the complaint. The dispute between the parties is regarding defective products and their replacements (within time). As such the ingredient required to constitute the said offence under Section 418 IPC is also absent against the petitioners - The Supreme Court in Mitesh Kumar J. Sha vs. The State of Karnataka & Ors. [2021 (10) TMI 1423 - SUPREME COURT] while considering an appeal against an judgment and order of the High Court of Karnataka in an application under Section 482 of the Cr.P.C. wherein the prayer of the petitioners for quashing of proceedings of offence punishable under Section 406, 419, 420 read with Section 34 of the IPC was dismissed, held existence of dishonest or fraudulent intention has not been made out against the Appellants. Though the instant dispute certainly involves determination of issues which are of civil nature, pursuant to which Respondent No. 2 has even instituted multiple civil suits, one can by no means stretch the dispute to an extent, so as to impart it a criminal colour.
In the instant case, cognizance has been taken and process has been issued (including attachment and warrant of arrest) by the Magistrate concerned - The materials in the present case including the written complaint clearly shows that there was no dispute from the year 2012 to 2017 (initial period). The ingredients of 'entrustment', dishonest intention leading to delivery of property and cheating with knowledge to cause wrongful loss are not on record. The dispute is clearly civil in nature, may be even a commercial dispute but the ingredients required to constitute the criminal offences alleged are totally absent.
In the Present case there is no substance in the allegations and no material exists to prima facie make out the complicity of the applicants in cognizable offences. As such the proceedings in this case should be quashed by exercising its inherent powers for ends of justice and to prevent the abuse of process of the court.
The criminal revisional application stand allowed.
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2023 (1) TMI 1354 - SUPREME COURT
Challenge to summon order - vague summon order - Neither does the summoning order name the Manager or the Chief Manager, JIPL, who have been summoned to stand trial Under Section 406 of the Indian Penal Code, 1860 - HELD THAT:- Criminal breach of trust would, inter alia, mean using or disposing of the property by a person who is entrusted with or otherwise has dominion. Such an act must not only be done dishonestly, but also in violation of any direction of law or any contract express or implied relating to carrying out the trust.
However, in the instant case, materials on record fail to satisfy the ingredients of Section 405 of the Indian Penal Code. The complaint does not directly refer to the ingredients of Section 405 of the Indian Penal Code and does not state how and in what manner, on facts, the requirements are satisfied. Pre-summoning evidence is also lacking and suffers on this account. On these aspects, the summoning order is equally quiet, albeit, it states that "a forged demand of Rs. 6,37,252.16p had been raised by JIPL, which demand is not due in terms of statements by Shubhankar P. Tomar and Sakshi Tilak Chand". A mere wrong demand or claim would not meet the conditions specified by Section 405 of the Indian Penal Code in the absence of evidence to establish entrustment, dishonest misappropriation, conversion, use or disposal, which action should be in violation of any direction of law, or legal contract touching the discharge of trust.
In the present case, the ingredients to constitute an offence Under Section 420 read with Section 415 of the Indian Penal Code are absent. The pre-summoning evidence does not disclose and establish the essential ingredients of Section 415 of the Indian Penal Code. There is no assertion, much less legal evidence, to submit that JIPL had engaged in dishonesty, fraud, or intentional inducement to deliver a property. It is not the case of Respondent No. 2 - complainant that JIPL had tried to deceive them, either by making a false or misleading representation, or by any other action or omission; nor is it their case that JIPL had offered any fraudulent or dishonest inducement to deliver a property. As such, given that the ingredients of Section 415 of the Indian Penal Code are not satisfied, the offence Under Section 420 of the Indian Penal Code is not made out.
The assertions made in the complaint and the pre-summoning evidence led by Respondent No. 2 - complainant fail to establish the conditions and incidence of the penal liability set out Under Sections 405, 420, and 471 of the Indian Penal Code, as the allegations pertain to alleged breach of contractual obligations. Pertinently, this Court, in a number of cases, has noticed attempts made by parties to invoke jurisdiction of criminal courts, by filing vexatious criminal complaints by camouflaging allegations which were ex facie outrageous or pure civil claims - The requirement of Section 204 of the Code is that the Magistrate should carefully scrutinize the evidence brought on record. He/she may even put questions to complainant and his/her witnesses when examined Under Section 200 of the Code to elicit answers to find out the truth about the allegations. Only upon being satisfied that there is sufficient ground for summoning the Accused to stand the trial, summons should be issued.
The High Court, while dismissing the petition filed Under Section 482 of the Code, failed to take due notice that criminal proceedings should not be allowed to be initiated when it is manifest that these proceedings have been initiated with ulterior motive of wreaking vengeance and with a view to spite the opposite side due to private or personal grudge - The inherent powers of the court can and should be exercised in such circumstances. When the allegations in the complaint are so absurd or inherently improbable, on the basis of which no prudent person can ever reach a just conclusion that there is sufficient wrong for proceeding against the Accused, summons should not be issued.
The order of the High Court, the summoning order and the order issuing non-bailable warran passed by the Additional Chief Judicial Magistrate, Court No. 8, Ghaziabad, Uttar Pradesh are set aside and quashed - Appeal allowed.
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2023 (1) TMI 1353 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Approval of Resolution Plan - plan has not been allocated any amount - no consideration in the plan about the claim of the Appellant – Operational Creditor - HELD THAT:- The Para 30(ii) extracts Form H submitted by the Resolution Professional which clearly indicate that the Liquidation value of the Appellant is Nil. Even the Operational Creditors that is Government whose verified claim is Rs.295.18 Crores ware paid Nil. We do not find any error in the order by which no amount was allocated to the Appellant. The requirement for the obligation for payment of amount to the Operational Creditor is under Section 30(2)(b). It is not shown that there is any breach of provisions of the Section 30(2)(b).
As per the law as exist today, the Operational Creditors are only entitled for minimum of the liquidation value and there being no breach of any of the provisions of the Code - There are no reason to interfere with the impugned order - appeal dismissed.
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