TMI Tax Updates - e-Newsletter
January 1, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
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GST:
Determination of quantum of pre-deposit for filing of appeal - deposit of 10% of the disputed tax amount - The legislative intent as construed from Section 107(6)(b) of the CGST Act is that aggrieved party has to pre-deposit 10% of the tax liability and it does not extend to penalties, fees or interest when the petitioner has contested the entirety of the tax liability. - HC
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GST:
Demand of GST u/s 73 of CGST Act, 2017 - input mismatch between GSTR 3B return and GSTR 2A statement - Assessee could not represent his case due to non-receipt of communication - Liberty granted to the petitioner to approach the Appellate Authority by way of filing an appeal within a period of thirty days from the date of receipt of a copy of this order - HC
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GST:
Cancellation of petitioner’s GST registration with retrospective effect - In the present case, the petitioner’s GST registration has been cancelled for failure to furnish return for the continuous period of six months. Clearly, this does not warrant cancellation of GST registration for the period during which the returns were filed. - HC
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GST:
Refund of the input tax credit including cess - After this Court had passed an order, the adjudicating authority once again issued a show cause notice dated 07.07.2023. This is impermissible. The respondents were required to pass an order for sanctioning the refund in accordance with the law and not to re-adjudicate the application once again. - HC
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GST:
Anti-Profiteering proceedings - Legality of notice initiated under Rule 129 of the Central Goods and Services Tax Rules, 2017- A mere show-cause notice or charge-sheet does not infringe the right of anyone. It is only when a final order imposing some punishment or otherwise adversely affecting a party is passed, that the said party can be said to have any grievance. - HC
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GST:
Validity of demand of GST on Betting and gambling - actionable claim - the respondents are directed not to take any coercive action against the petitioner pursuant to the show cause notices. However, the petitioner shall respond to the show cause notices and the proceedings may go on which shall be subject to further orders of this Court. - HC
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GST:
Classification of goods - F-18 Products - F-18 products are essentially radioactive isotopes which are used in radiopharmaceutical imaging such as PET scanning. Although they are used as a pharmaceutical product for the diagnosis and detection of various diseases, 18F FDG and other 18F radiopharmaceutical products are compounds of the radioisotope 18F. - The HSN classification and rate of tax applicable on the product under consideration is 2844 @ 18% - AAR
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GST:
Classification of goods - rate of tax - sale of solar driven submersible pump (water pump) - The Solar driven submersible water pump comprising of Solar panel, Controller and submersible pump is a mixed supply and the highest rate of GST will be applicable amongst goods supplied by the applicant. - AAR
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GST:
Scope of Advance Ruling - Applicant - Applicant M/s National Highways Authority of India (NHAI) is receiver of the Goods/Services provided by the MVVNL. In light of subsection (a) provided under Section 95 of CGST Act 2017, only supplier of the services/goods can file Application for Advance Ruling. - AAR
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Income Tax:
Deduction u/s 80IB(10) - Belated filing of ITR - In the instant case, the assessee is a statutory organization created by the State for providing & develop housing infrastructure. It took up a defence of late audit for belated filing of its return of income. The veracity of ground so put forth for late filing of return has not been disputed by the appellant. The assessee deals with public money, the State exchequer. - assessee had a reasonable & bonafide cause for not filing the return of income within the time permitted u/s139(1) - ITAT rightly allowed the deduction - HC
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Income Tax:
Immunity for levy of penalty - If there is a specific finding recorded in the assessment order that the assessee had underreported the income by misrepresenting the facts in the return of its income, then the application u/s 270AA of the Act would not be maintainable, in view of the express bar under Section 270A of the Act. - HC
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Income Tax:
Penalty u/s 271(1)(c) - revised returns were not valid returns u/s 139(5) and that, such returns were not voluntarily filed rather the same were filed only after detection of concealment of income during the course of the survey - this is a case of deliberate omission in the first return and further, the second return filed by the appellant is not a voluntary one, as rightly held by the ITAT - Levy of penalty confirmed - HC
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Income Tax:
Power of CIT(A) to dismiss the appeal in limine ex-parte - Section 251 does not give any power to the ld. CIT (A) dismissing the appeal for non-prosecution. Hence, in the interest of justice, we remit the issue to the file of ld. CIT (A). Ld. CIT(A) shall pass a speaking order on merits after giving the assessee adequate opportunity of being heard. - AT
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Income Tax:
Capital gain - Joint Development agreement (JDA) - Transfer / sale of land u/s 2(47)(v) or not? - - the said execution of land development agreement cannot be a sale of land in favour of the builder within the meaning of section 2(47)(v) as only construction was allowed to be done by the builders after obtaining necessary approvals from competent authorities and, therefore, the capital gain has wrongly been computed and charged to tax. - AT
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Income Tax:
Exemption u/s 11 - charitable activities u/s 2(15) - the ICC is not carrying on any activity of holding meetings, seminars and conferences for business purpose but only in support its main object and it charges from its participants, members and non-members the amount of fee which does not even covers the cost of holding such events. - the ICC is entitled to exemption u/s 11 - AT
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Income Tax:
Revision u/s 263 - There is no quarrel on the point that if the AO has raised the query on this issue of applicability of provision of section 115BBE which was replied by the assessee then question of lack of inquiry does not arise. However, in the case of the assessee the AO has not even taken up this issue despite the income was assessed as income from other sources and therefore, this case does fall in the category of complete lack of inquiry on the part of the AO. - Revision order sustained - AT
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Income Tax:
Validity of reopening of assessment - Reasons were recorded by the Assessing Officer in an arbitrary manner and there is no application of mind by the AO. For example, the reasons stated that assessee has deposited an amount in his bank account to the tune of X amount, whereas the actual amount deposited in the bank account by the assessee was to the tune of Y Amount hence reasons were recorded on arbitrary basis and there is no application of mind by the AO. - AT
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Corporate Law:
Direction for investigation into the affairs of the company - reference the matter of SFIO on the request of the official liquidator - It is not the case of the Official Liquidator that the powers conferred on it by virtue of the aforesaid provisions are inadequate for purpose of detection of the irregularities like the allegation of diversion of funds, etc. that caused it to move this Court for referring the matter to the SFIO. It should not appear to the Court that the Official Liquidator seeks referral of the matter to the SFIO for the reason that it finds itself inadequate to exercise the powers conferred on the Official Liquidator by the aforesaid sections of the Act. - HC
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Corporate Law:
Professional misconduct - Auditor's conflict of interest with the auditee company - In this case the audit done by the EP related to SKNL which was a large public listed company and involved interest of large number of shareholders and other stake holders such as banks, creditors etc. It is critical that the auditor and the EP performed their job with due diligence to give assurance to the investors and stakeholders on true and fairness of the financial statements and thereby protect public interest. Any default on this account impacts and jeopardizes the larger public interest which needs to be considered while determining the quantum of punishment. - NFRA
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IBC:
Qualification of Resolution Applicant - Promotor of the company - Section 29-A which apply to the promoters and exempts them to apply for a plan is not applicable qua any MSME - The statement of the Minister is looked into for purposes of a cut off date that “there is no other specific provision providing for cut off date” which submits that it should be the date of application of making a bid. Thus, to opine that it is the initiation of the CIRP proceedings which is the relevant date, cannot be said to reflect the correct legal view - SC
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Service Tax:
Declared Service - relinquishment charges under section 66E (e) of the Finance Act - charges are in the nature of consideration received towards rendition of the declared service i.e. tolerating of relinquishing access rights - relinquishment charges are not consideration received towards rendition of a declared service under section 66E (e) of the Finance Act. - AT
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Central Excise:
Reversal of cenvat credit - removal of used/rejected capital goods - As the Appellant has not availed any credit on these rejected capital goods cleared as scrap, we hold that the provisions of Rule 3(5) and 3(5A) are not applicable in this case - AT
Articles
Notifications
Case Laws:
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GST
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2023 (12) TMI 1284
Demand of IGST wrongly claimed as refund - proceedings initiated against the petitioner resulting in the order impugned is based on a wrong premise - HELD THAT:- It is not in dispute that pursuant to show cause notice issued to the petitioner, the petitioner only on account of pendency of DBCWP No.4465/2021, choose not to respond to the said show cause notice and put forth his response to the said show cause notice and insisted on the adjudication being deferred only on account of pendency of said petition. Apparently, even when the stay petition was rejected on 07.08.2023, despite such rejection also, no response was filed, however, the authority has passed a detailed speaking order dealing with all possible pleas raised by the petitioner. The submission made pertaining to the entitlement of the petitioner under Section 54 of the Act, which even otherwise is not a jurisdictional aspect, already stands examined and negated by the authority vide impugned order dated 30.10.2023 and the petitioner has to question the validity of said determination in accordance with law including filing of appeal under Section 107 of the Act. Thus, no case has been made out in the writ petition so as to invoke our extra ordinary jurisdiction under Article 226 of the Constitution of India on the settled parameters, based on which, the same can be invoked by this Court despite availability of remedy of appeal. Petition dismissed.
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2023 (12) TMI 1283
Cancellation of petitioner's registration before issuance of the notices - petitioner was not granted any time in the notice so issued in GST ASMT-10 - violation of principles of natural justice - HELD THAT:- Since the petitioner's registration had been cancelled before issuance of the said notices, the petitioner did not file reply to the said show cause notices. Otherwise, the petitioner was not granted any time in the notice so issued in GST ASMT-10 and therefore, there has been violation of the principles of natural justice in passing the assessment order, Ext.P5 - there are substance in the submission advanced by the learned counsel for the petitioner. Notice in Ext.P2 disclosed that it is dated 29.9.2023 and on the very next day, Ext.P3 notice under Section 73 was issued. The petitioner was not afforded any time for filing reply to the notice in GST ASMT-10. There is violation of the principles of natural justice and, therefore, the impugned assessment order, Ext.P5, is unsustainable and the same is hereby set aside. The matter is remanded back to the file of the assessing authority, 1st respondent, to pass fresh a order. Petition allowed by way of remand.
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2023 (12) TMI 1282
Extension of time period for issuance of the show-cause-notice - applicability of provisions of Section 168A of CGST Act - HELD THAT:- Issue Notice returnable on 8th February, 2024 . By way of ad-interim relief, no final order shall be passed by the respondent authority pursuant to the show-cause-notice issued during the period extended by the impugned notification without permission of the Court till the next date of hearing. Direct service is permitted.
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2023 (12) TMI 1281
Determination of quantum of pre-deposit for filing of appeal - deposit of 10% of the disputed tax amount means only tax amount and entire composite amount comprising tax, fine, penalty and fee? - failure to comply the mandate of pre- deposit - HELD THAT:- By isolating a sum equal to ten per cent of the remaining amount of tax in dispute in sub-clause (b), the legislator conveys a focused pre-deposit requirement specifically related to the disputed tax amount. This implies that the legislative design prioritizes the financial commitment associated directly with the primary tax liability being contested. This approach aligns with the legal principle that penalties, fines, fees, and interest are subsequent to the determination of tax. The apex court in the case of PRAKASH NATH KHANNA AND ANOTHER VERSUS COMMISSIONER OF INCOME-TAX AND ANOTHER [ 2004 (2) TMI 3 - SUPREME COURT] , has explained that the language employed in a statute is the determinative factor of the legislative intent. The legislature is presumed to have made no mistake. The presumption is that it intended to say what it has said. Assuming there is a defect or an omission in the words used by the legislature, the Court cannot correct or make up the deficiency. Where the legislative intent is clear from the language, the Court should give effect to it. The appellate authority therefore, was not justified in calling upon the petitioner to deposit 10% of not only tax liability, but, also fine which is imposed by the Enforcement Officer equivalent to the value of the goods. If the order passed by the appellate authority under challenge is accepted, then the condition under clause (b) giving an option to the aggrieved person who disputes the entire tax liability to deposit 10% of the remaining amount of tax in dispute would be defeated. There is no need for the petitioner to deposit any percentage of disputed interest, fine, fee and penalty arising from the impugned order. In essence, the legislative intent as construed from Section 107(6)(b) of the CGST Act is that aggrieved party has to pre-deposit 10% of the tax liability and it does not extend to penalties, fees or interest when the petitioner has contested the entirety of the tax liability. Petition allowed.
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2023 (12) TMI 1280
Demand of GST u/s 73 of CGST Act, 2017 - input mismatch between GSTR 3B return and GSTR 2A statement - Assessee could not represent his case due to non-receipt of communication - HELD THAT:- The main grievance of the petitioner is that the person/consultant, viz., Mr. Paneerselvam and Mr.Sivakumar, who were engaged by the petitioner for filing the returns passed away on 30.04.2019 and 05.02.2022 respectively and hence the petitioner was not in a position to know about the impugned proceedings initiated against them and the consequential orders and hence, the petitioner was not able to file appropriate application and appear before the authorities concerned and put forth their case by way of reply. However, since the learned counsel for the petitioner submitted that the petitioner would be satisfied, if this Court grants liberty to the petitioner to agitate their case before the Appellate Authority by way of Appeal, this Writ Petition is disposed of granting liberty to the petitioner to approach the Appellate Authority by way of filing an appeal within a period of thirty days from the date of receipt of a copy of this order, in which case, the authorities concerned shall entertain the same without insisting upon limitation aspect, if any and dispose of the same, in accordance with law, after affording an opportunity to the petitioner. Petition disposed off.
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2023 (12) TMI 1279
Cancellation of petitioner s GST registration - failure to furnish the return for the continuous period of six months - HELD THAT:- In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017 (CGST Act), a proper officer has a discretion to cancel a GST registration of a tax payer from such date (including retrospectively), as he considers fit. However, the discretion to cancel the GST registration from retrospective effect cannot be exercised arbitrarily or whimsically. Such decision to cancel the GST registration with retrospective effect must be informed by reason. In the present case, the impugned order does not indicate any reason for cancelling the petitioner s GST registration, let alone a reason for doing so retrospectively. Thus, the impugned order is liable to be set aside - In the present case, the petitioner s GST registration has been cancelled for failure to furnish return for the continuous period of six months. Clearly, this does not warrant cancellation of GST registration for the period during which the returns were filed. Petition disposed off.
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2023 (12) TMI 1278
Refund of the input tax credit including cess - petitioner s application was rejected on mere apprehension that its supplier had issued fake invoices - HELD THAT:- This Court had also noted that there are no findings on the basis of the cogent material that the invoices issued by one of the petitioner s suppliers (M/s Shruti Exports) were fake. It was also noticed that there was no allegation that the petitioner had not exported the supplies in respect of which refund of ITC on inputs was claimed. Accordingly, the petition was allowed and the respondents were directed to process the petitioner s claim for refund. An application for refund by a tax payer is required to be examined in entirety. If there are any grounds for requiring further clarification or proof, the concerned officer is at liberty to issue a show cause notice setting out all the grounds on which the application is proposed to be rejected. This affords a tax payer an opportunity to meet the allegations and provide such material to satisfy the concerned officer. Once that exercise is done, the concerned officer has to pass a final order either accepting the tax payer s claim for refund or rejecting it. The reasons for such rejection are required to be clearly stated in the order - A tax payer has an opportunity to appeal against the said order before the Appellate Authority. It is important to note that the Appellate Authority is required to consider the appeal and pass an appropriate order, however, it cannot remand the matter to the concerned adjudicating authority for considering it afresh. In the present case, after this Court had passed an order, the adjudicating authority once again issued a show cause notice dated 07.07.2023. This is impermissible. The respondents were required to pass an order for sanctioning the refund in accordance with the law and not to re-adjudicate the application once again. Application disposed off.
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2023 (12) TMI 1277
Anti-Profiteering proceedings - Maintainability of petition against a mere show-cause notice or charge-sheet - Legality of notice initiated under Rule 129 of the Central Goods and Services Tax Rules, 2017 - HELD THAT:- The reason why ordinarily a writ petition should not be entertained against a mere show-cause notice or charge-sheet is that at that stage the writ petition may be held to be premature. A mere charge-sheet or show-cause notice does not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no jurisdiction to do so. It is quite possible that after considering the reply to the show-cause notice or after holding an enquiry the authority concerned may drop the proceedings and/or hold that the charges are not established. A mere show-cause notice or charge-sheet does not infringe the right of anyone. It is only when a final order imposing some punishment or otherwise adversely affecting a party is passed, that the said party can be said to have any grievance. Thus, no strong case has been made out by the petitioner calling for interdiction of the notice and summons under challenge - petition disposed off.
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2023 (12) TMI 1276
Betting and gambling - whether the petitioner's platform which is used for gaming would fall within an actionable claim amounting to betting and gambling? - validity of Rule 31A of the CGST Rules, 2017 and Section 15(5) of the CGST Act, 2017 - HELD THAT:- In a similar case, the High Court of Gujarat at Ahmedabad in NXGN Sports Interactive Private Limited Versus Union of India [ 2023 (11) TMI 357 - GUJARAT HIGH COURT ] has entertained the petitions by granting the interim order. Since the subject matter involved is identical, the petitioner too would be entitled to similar order. Hence, the respondents are directed not to take any coercive action against the petitioner pursuant to the show cause notices. However, the petitioner shall respond to the show cause notices and the proceedings may go on which shall be subject to further orders of this Court. Issue rule nisi.
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2023 (12) TMI 1275
Seeking release of the confiscated goods and conveyance - transaction was being carried out in contravention of the provisions of Punjab GST Act, 2017 and with intention to evade tax. Counsel for the petitioners submits that the petitioners have financial handicap as such and are not in a position to deposit the amount twice over at one point of time. Accordingly, he prays that directions be issued firstly to refund the amount so that thereafter it can be deposited by the correct person for release of the goods and the vehicle. HELD THAT:- Keeping in view the admitted fact as such and the response filed by the State, the present writ petition is disposed off by issuing directions to the Superintendent, Muktsar Ward I, Central GST/Jurisdictional Officer where the penalty and fine had been wrongly deposited by petitioner No. 1 to refund the said amount within a period of 10 days from the date of receipt of certified copy of the order. Thereafter, if the said amount is deposited by petitioner No. 2, the said goods and the vehicle be released within a period of one week thereafter.
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2023 (12) TMI 1274
Constitutional validity of Rule 96(10)(b) of Central Goods and Service Tax Rules, 2017, / State Goods and Service Tax Rules 2017 - HELD THAT:- The order in UNJHA AGRO COMPANY THROUGH PARTNER JANAK PATEL VERSUS UNION OF INDIA [ 2023 (4) TMI 1268 - GUJARAT HIGH COURT] is perused, wherein, this Court has observed It is an admitted position that other petitions relying the vires of Rule 96(10)(b), have been entertained by this Court and the same are pending consideration. In those petitions, interim relief is granted to those petitioners concerned which is evident from the orders annexed in the compilation of Civil Application. Issue NOTICE, making the same returnable on 21ST JUNE, 2023.
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2023 (12) TMI 1273
Classification of service - business of the civil constructions mainly with the Govt. Departments against the Contracts awarded by them - Whether the company will charge the GST @ 12% or @18% in the case of the contracts executed before the N/N. 03/2022-Central Tax (Rate) dated. 13.03.2022 w.e.f 18.07.2022? HELD THAT:- The Applicant has been awarded the contract of Redevelopment of Carriageway, foothpath, vending zone covering ROW within ABD area of Aligarh Smart City(CW-23) on EPC mode (Pakage-1) at Aligarh by the Aligarh Smart City Limited (ASCL) vide contract agreement dated 23.12. 2021 - The Works contract services provided by the applicant was chargeable to GST @ 12% vide Notification 11/2017 - CT (Rate) as amended dated 28.06.2017. However subsequently vide Notification No 03/2022 dated 13.07.2022, the same was amended and enhanced to 18% w.e.f 18.07.2022. Consequent to the change in rate of tax during an ongoing continuous service, applicable rate of tax is to be decided in terms of provisions contained in Section 14 of the CGST Act, 2017. In cases where advance is received or invoices are raised before 18.07.2022, GST rate applicable is 12% - In cases where advance is received and invoices are raised after 18.07.2022. GST rate applicable is 18%.
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2023 (12) TMI 1272
Classification of goods - F-18 Products - classified under HSN 30063000, leviable to GST at the rate of 12%, in terms of entry no 65 of Schedule II of the Notification No 01/2017, Central Tax (Rate) issued under Central Goods and services Tax Act, 2017 or not - HELD THAT:- It can be seen that F-18 products are essentially radioactive isotopes which are used in radiopharmaceutical imaging such as PET scanning. Although they are used as a pharmaceutical product for the diagnosis and detection of various diseases, 18F FDG and other 18F radiopharmaceutical products are compounds of the radioisotope 18F. Heading 2844 of the Tariff covers radioactive isotopes and their compounds. 18F-FDG being a compound of the radioisotope 18F, it would fall under the heading 2844 - Diagnostic reagents are chemicals used in laboratories to determine specific types of pathogens, metabolic abnormalities, physiological anomalies, and genetic diseases. They're relied upon by medical practitioners to make accurate diagnoses, and can be used in vivo or in vitro in order to detect certain diseases. The Section Note 1(A) specially stipulates that Goods answering to a description in heading 2844 are to be classified in the said heading only. F18 is a radioisotope and Fluorodeoxyglucose (18F-FDG) is a compound. The products being radioactive and compound of the radioisotope 18F, the same merits classification under heading 2844 only although it satisfies the condition mentioned in Chapter 30 i.e diagnostic reagent designed to be administered to the patient. The applicant has also submitted that medicaments are covered under Tariff heading 30 and that the same product has been classified under heading 3006 by some supplies. However, it may be appreciated that the classification of goods are to be guided by the provisions of law and Radioactive chemicals elements and radioactive isotopes are classifiable under ChSh 2844 only and nowhere else. The HSN classification and rate of tax applicable on the product under consideration is 2844 @ 18%.
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2023 (12) TMI 1271
Scope of Advance Ruling - Supply or not - work done by the applicant in Transmission Line under the supervision of MVVNL - levy of GST on MVVNL on the full amount of work done for load sanction of 11 KV lines by applicant - applicant pays GST on the entire value of work done to its contractors and also to MVVNL - payment of same amount of GST on the same transaction to two separate entities - double taxation - HELD THAT:- Applicant M/s Spring Infrastructures is receiver of the Goods/Services provided by the M/s Madhyanchal Vidyut Vitran Nigam Limited. Therefore, it falls under category of Service recipient. In light of point provided under Section 95 of CGST Act 2017, only supplier of the services can file Application for Advance Ruling. Accordingly, the application for consideration/ruling not admitted on merits as applicant does not fall under the definition of supplier under Advance Ruling and cannot get the Advance Ruling under the Act.
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2023 (12) TMI 1270
Classification of goods - rate of tax - HSN Code - sale of solar driven submersible pump (water pump) - supply involves different components - whether the same shall constitute as single supply or together as composite supply or treated as mixed supplies? - HELD THAT:- The applicant has failed to provide technical specification of the supply. It is found that each component is capable of functioning independent of each other. Hence, we find that the supply cannot be treated as single supply. Further, it is observed, there are clear provisions in the GST Act itself as regards composite supply as defined under Section 2(30) and mixed supply under Section 2 (74) of CGST Act, 2017 which deal with situations where supply consisting of two or more taxable goods or services or both is involved. In present case, it is not found either water pump is supplied with solar panel and controller in ordinary course of business and vice versa. Nor is found any principle supply. Each component can supplied separately. Hence, the supply in question cannot be termed as composite supply - So far as the concept of mixed supply is concerned, the same is defined under Section 2(74) of the CGST Act to mean 'two or more individual supplies of goods or services, or any combination thereof made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply'. The supply of each one of the items in question as proposed by the appellant is independent and each one of the items can be supplied separately in the appellant's own case - It is observed that from the definitions it emerges that a supply, consisting of any possible combination of more than one type of goods which are independent of each other in terms of their supply but which are sold together as a bundle simply because the buyer has ordered purchase of such combination of goods, does not constitute a composite supply as the absence of the element of principal supply and natural bundling in the ordinary course of business weighs against the definition of composite supply - the supply of different items namely Solar Panel, Controller and Solar Pump, without anyone of the goods being supplied as principal supply would be covered by the definition of mixed supply of different type of goods. The Solar driven submersible water pump comprising of Solar panel, Controller and submersible pump is a mixed supply and the highest rate of GST will be applicable amongst goods supplied by the applicant.
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2023 (12) TMI 1269
Scope of Advance Ruling - Liability of service tax - Reverse Charge Mechanism - upfront amount charged by the NOIDA Authority (as lease premium) in respect of allotment of plots to the Applicant by way of granting of long term lease of ninety years, for development of commercial infrastructure in an industrial township - scope of supply - long-term lease is in the nature of sale of land - scope of supply under the provisions of CGST Act. HELD THAT:- The activities of the taxpayer being a recipient, are not related to the supply being undertaken or proposed to be undertaken by him. The Applicant M/s Lavish Buildmart Pvt. Ltd. is receiver of the Goods/Services provided by the M/s New Okhla Industrial Development Authority and has admitted in the application dated 28.03.2023 that it falls under category of Service recipient. In light of point provided under Section 95 of CGST Act 2017, only supplier of the services can file Application for Advance Ruling. Accordingly, the application for consideration/ruling not admitted on merits as applicant does not fall under the definition of supplier under Advance Ruling and cannot get the Advance Ruling under the Act.
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2023 (12) TMI 1268
Scope of Advance Ruling - Supply or not - work done by the applicant (NHAI) in shifting the transmission lines for the widening of road under the supervision of MWNL - levy of GST on MWNL on the full amount of work done for shifting the transmission lines by NHAI - NHAI pays GST on the entire value of work done to its contractors and also to MWNL - payment of same amount of GST on the same transaction to two separate entities - double taxation - HELD THAT:- Applicant M/s National Highways Authority of India (NHAI) is receiver of the Goods/Services provided by the MVVNL. In light of subsection (a) provided under Section 95 of CGST Act 2017, only supplier of the services/goods can file Application for Advance Ruling. No ruling can be given in the matter as discussed above. Hence, Advance Ruling No. UP ADRG-17/2022 dated 08.12.2022 is declared void ab-initio in terms of Section 104 of CGST Act.
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Income Tax
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2023 (12) TMI 1267
Deduction u/s 80IB(10) - As original return was filed by the assessee beyond the period prescribed u/s 139(1) of the Act. Hence, deduction u/s 80IB(10) could not be allowed to it in view of bar imposed u/s 80 AC - ITAT allowing certain deductions to the assessee under Section 80IB(10) even though its return of income for assessment year 2006-2007 was filed beyond the period prescribed under Section 139(1) of the Act and the deductions were claimed only in the revised return furnished later - HELD THAT:- As decided in Prakash Nath Khanna and another [ 2004 (2) TMI 3 - SUPREME COURT] Court cannot read anything into a statutory provision which is plain and unambiguous - A statute is an edict of the Legislature. The language employed in the statute is determinative factor of legislative intent. Provisions of Section 276-CC are in clear terms. There is no scope of uncertainty. The interpretation sought to be put on Section 276-CC to the effect that a return filed under Section 139(4) would meet requirement of filing a return under Section 139(1), cannot be accepted. The time within which a return is to be furnished is indicated in Section 139(1) and not in 139(4). That being so, even if a return is filed in terms of Section 139(4), that would not dilute the infraction in not furnishing the return in due time as prescribed under Section 139(1). Otherwise, the use of words in due time would lose their relevance and it cannot be said that the said expression was used without any purpose. Therefore, a return of income filed under Section 139(4) cannot be said to be meeting the requirements of Section 139(1) in context of Section 80AC of the Act, which specifically insists upon filing of return by the due date prescribed under Section 139(1) for availing the admissible deductions. In the instant case, the assessee is a statutory organization created by the State for providing develop housing infrastructure. It took up a defence of late audit for belated filing of its return of income. The veracity of ground so put forth for late filing of return has not been disputed by the appellant. The assessee deals with public money, the State exchequer. Commissioner of Income Tax and the Income Tax Appellate Tribunal have concurrently held on facts after undertaking a lengthy pain staking exercise that the assessee was actually entitled to deductions under Section 80IB(10) of the Act. The specific amount of deduction admissible to it has also been computed. The ground put forth by the assessee for not filing the return of income within the time provided under Section 139(1) having been accepted on facts by the appellant, we in the given facts are inclined to hold, in this case, that the assessee had a reasonable bonafide cause for not filing the return of income within the time permitted under Section 139(1). We are in agreement with the view of the learned ITAT that once in the given facts, the assessee has been held entitled to claim the specifically computed deductions, then it should not be burdened with taxes which it is otherwise not liable to pay under law.
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2023 (12) TMI 1266
Penalty for under-reporting and misreporting of income u/s 270A - application u/s 270AA seeking immunity from imposition of penalty - HELD THAT:- On a perusal of sub-Section (9) of Section 270A it is seen that if there has been misrepresentation or suppression of facts by the assessee, then the application seeking immunity from imposition/payment of penalty under Section 270AA of the Act shall not be maintainable. The assessing authority while examining the application u/s 270AA cannot sit in appeal against its own assessment order to record a different finding than what was recorded in the assessment order. The assessing officer cannot examine the correctness or otherwise of the assessment order while examining the application u/s 270AA of the Act seeking immunity from imposition/payment of penalty, etc. If there is a specific finding recorded in the assessment order that the assessee had underreported the income by misrepresenting the facts in the return of its income, then the application u/s 270AA of the Act would not be maintainable, in view of the express bar under Section 270A of the Act. We do not find that the impugned order rejecting the application of the petitioner under Section 270AA of the Act suffers from any illegality on facts or law. Therefore, the present writ petition is hereby dismissed. Pending interlocutory application, if any, in the writ petition stands dismissed.
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2023 (12) TMI 1265
Penalty u/s 271(1)(c) - revised returns were not valid returns u/s 139(5) and that, such returns were not voluntarily filed rather the same were filed only after detection of concealment of income during the course of the survey conducted in the hospital - as argued appellant filed revised returns admitting additional income after payment of tax in relation thereto - CIT(A) deleted the penalty - ITAT restored the penalty - as submitted that before issuance of show cause notices, the appellant had filed the returns voluntarily showing additional income and there is no concealment or escapement of income to tax and hence, penalty u/s 271(1)(c) inflicted on the appellant, is erroneous and not sustainable in law - AO held that revised return was not a valid return under section 139(5) and accordingly, levied penalty under section 27(1)(c) HELD THAT:- This court is of the opinion that this is a case of deliberate omission in the first return and further, the second return filed by the appellant is not a voluntary one, as rightly held by the ITAT. Therefore, this court does not find any reason to interfere with the order passed by the ITAT. Accordingly, all these Tax Case Appeals are dismissed and the substantial questions of law are answered against the appellant and in favour of the revenue.
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2023 (12) TMI 1264
Validity of reopening of assessment - Period of limitation - procedure u/s 148A - HELD THAT:- In the present case, it is stated that a copy of the notice was sent thorough e-mail on 01.04.2021. Merely because the notice was made ready on 31.03.2021, it cannot be construed that the said notice was issued on 31.03.2021 itself. But the date of dispatch and the notice was issued by e-mail as well as by post is only on 01.04.2021. However, without considering these facts, the AO passed the Assessment Order on 23.03.2022. Therefore, based upon the notice issued u/s 148 on 31.03.2021, the impugned assessment order came to be passed by the respondents, which, in the opinion of this Court it was passed without any authority and the same is barred by limitation and hence the same is liable to be set aside. However, considering the submissions made on behalf of the respondents and in the interest of revenue, without directing the respondents to venture upon issuing fresh notices u/s 148A, in the interest of revenue, this Court feels that the impugned notice under Section 148 of the Act issued to the petitioner, shall be deemed to have been issued u/s 148A of the Act as amended by Finance Act, 2021 and in the light of the law laid down in the case of Union of India and Others Vs. Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT ] Accordingly, while setting aside the impugned assessment order, this Court directs the Assessment Officer to provide necessary documents to the petitioner within 30 days from the date of request made by him so that he can file his reply within two weeks from the date of receipt of the relevant documents.
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2023 (12) TMI 1263
Power of CIT(A) to dismiss the appeal in limine ex-parte - violation of principles of natural justice, on the alleged ground that the appellant was not inclined to prosecute the appeal - TP adjustment - difference in arm's length price of the international transaction of availing testing services entered into by the appellant with the associated enterprises - CIT (A) noted that despite notices, nobody has attended, so he summarily referred to the TPO s order and dismissed the assessee s appeal - assessee submitted that assessee has sought adjournment before ld. CIT (A) who has ignored the same and passed the order dismissing the assessee s appeal for non-prosecution. HELD THAT:- Upon careful consideration, we find that section 251 does not give any power to the ld. CIT (A) dismissing the appeal for non-prosecution. Hence, in the interest of justice, we remit the issue to the file of ld. CIT (A). Ld. CIT(A) shall pass a speaking order on merits after giving the assessee adequate opportunity of being heard. Appeal of the assessee is allowed for statistical purposes.
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2023 (12) TMI 1262
Revision u/s 263 by CIT - failure of the AO to send the case to the TPO - assessee s claim was that there was Specified Domestic Transactions and the payments were made covered u/s 40(A)(2)(b) and for which both the parties are paying similar rate of taxation and no Revenue has been affected - HELD THAT:- We are of the considered view that Instruction No.3/2016 dated 10.03.2016 of CBDT providing for guidelines/implementation of transfer pricing provisions specifically provides that if a case is selected for scrutiny on the basis of transfer pricing risk parameters in respect of International Transactions or Specified Domestic Transactions or both the case has to be referred to TPO by the AO after obtaining the approval of the jurisdictional PCIT or CIT. The failure of Ld. AO to comply with these directions in relevant AY 2014-15 and following them in next AY 2015-16 makes it apparent that Ld. AO has not followed directions of Circular this years without mentioning any reasons for not referring the matter to TPO and that makes the order erroneous and prejudicial to the interest of Revenue irrespective of the fact that the transaction may have resulted into no loss to Revenue for the reason that both the parties were paying tax at similar rate as that is not a justification in TP issue examination by TPO. For remaining grounds for finding the assessment order to be erroneous and prejudicial to the interest of Revenue, we find that assessee had made submissions to Ld. PCIT that the issue was examined by the Ld. AO by raising queries to which assessee had responded by letters dated 29.04.2016, 11.07.2016, 11.08.2016 and 17.08.2016. The order of Ld. PCIT makes it apparent that he has taken note of these submissions of the assessee as made before Ld. AO and as available on the assessment record, but found that enquiry was not detailed without indicating by his own efforts as to where Ld. AO failed to follow the mandate of the Act in accepting the pleas. No separate and reasoning of his own are stated to establish his findings that how the submissions were not otherwise sustainable under the law to hold that assessment order was erroneous and prejudicial to the interest of Revenue. Thus, we are not inclined to interfere in the order of Ld. PCIT with regard to directions of AO to refer the matter to TPO but on other counts the order is not sustainable. Appeal of assessee is allowed partly.
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2023 (12) TMI 1261
Capital gain - Joint Development agreement (JDA) - Transfer / sale of land u/s 2(47)(v) or not? - AO on the basis of said joint development agreement computed the short-term capital gain by taking the value as per stamp valuation authority as deemed sale consideration - HELD THAT:- Mere execution of joint development agreement with the builder would not result in any transfer of land by the assessee as contemplated by the provisions of section 2(47)(v) of the Act as the assessee has not allowed the possession of the plot to be taken away by the builder in part performance of a contract . It is just an agreement for carrying out construction on the plot after obtaining requisite permissions from the Government authorities and then after completion of the project, certain area has to be allotted to the assessee. We find merit in the contention of assessee that the said execution of land development agreement cannot be a sale of land in favour of the builder within the meaning of section 2(47)(v) as only construction was allowed to be done by the builders after obtaining necessary approvals from competent authorities and, therefore, the capital gain has wrongly been computed and charged to tax. No construction has been carried out on the said land due to legal hurdles. Capital gain cannot be assessed on the basis of joint development agreement executed by the assessee during the year as no possession was given to the builder in part performance of the contract but it is only permission to carry out construction on the plot. Considering all appeal of assessee allowed.
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2023 (12) TMI 1260
Reopening of assessment u/s 147 - bogus LTCG - reopening was done on the basis of information received from the Investigation Wing that the assessee has earned long-term capital gain from transfer of shares of Quest Financial Service Limited, which is a penny stock company and the said gain has been claimed as exempt u/s 10(38) - HELD THAT:- The reasons were recorded without application of mind and in a very casual and mechanical manner. AO in the first second para stated that the assessee has taken bogus long-term capital gain through penny stocks. Besides we also note that the ld. AO has stated sometimes in the said reasons recorded his/her . We find merit in the contentions of the A.R. that the reasons have to be read as they are recorded and there has to be an independent application of mind by the AO and a objective satisfaction has to be recorded whereas the AO acted on the borrowed satisfaction which is a clear-cut non-application of mind by the AO. The case of the assessee finds support from the decision of Hindustan Lever Limited vs.- R.B. Wadkar, Asst. CIT [ 2004 (2) TMI 41 - BOMBAY HIGH COURT] wherein it has been held that the reasons have to be read as they are recorded and it cannot be substituted. The Hon ble Court has held that there has to be satisfaction of AO for reopening of the assessment and reopening cannot be made for borrowed satisfaction in a mechanical manner. Thus we quash the reopening of assessment and direct the ld. AO to delete the addition. The appeal of the assessee is allowed on legal issue.
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2023 (12) TMI 1259
Exemption u/s 11 - charitable activities u/s 2(15) - Accumulation of income - CIT(A) has treated activities of meetings, conferences and seminars of the assessee not for charitable purpose and thus denying exemption u/s 11 of the Act in respect of entire receipts of the assessee - HELD THAT:- We note that during the instant assessment year, the receipt form business activities of the assessee from the activities of holdings and organizing meetings, seminars and conferences and the profit as computed by the AO constituted only 2% of such receipts. Therefore we are inclined to hold that the consideration charged by the ICC is just a cost basis and nominally above the cost. However if we allocate the administrative expenses on a rational and scientific basis between the activities of holding meetings, seminars and conferences on the one hand and other charitable receipts such as interest, rental and misc. income on the other , then there would be huge loss from these activities of organizing and holding meetings, seminars and meetings meaning thereby that the assessee has not been even charging from these sponsors, participants, members or non-members which are barely enough to cover the cost of the ICC and therefore it can be reasonable presumed that ICC has provided these activities even below the cost. We are inclined to hold that the ICC is not carrying on any activity of holding meetings, seminars and conferences for business purpose but only in support its main object and it charges from its participants, members and non-members the amount of fee which does not even covers the cost of holding such events. So much so that the administrative and other incidental expenses of holding and organizing such seminars, conferences and meetings are met out of other charitable income received form interest on FDRs, rental and miscellaneous income. Therefore in view of that the ICC is entitled to exemption u/s 11 of the Act as the activities of the advancement of main object is not hit by the proviso to Section 2(15) of the Act even post amendments. Accumulation of income and investment - Provisions of 11(1) provides for accumulation of income of the trust to the extent of 15% of the gross receipts in perpetuity. The institution can retain 15% from the application of income without applying for charitable purpose in which accrued meaning thereby that 15% is indefinite accumulation and the assessee is not obliged to apply the same in subsequent years and can be retained as part of the corpus of the body. AO has accepted which the same. But the institution has to comply with the requirements of section 11(5)(iii) of the Act. The ICC has fully complied with the provisions of section 11(5)(iii) of the Act and kept the funds invested in terms of the said section. So the ld CIT(A) has erred in treating the same as taxable income. But in any case we have allowed the main contentions of the ICC by allowing exemption u/s 11 of the Act on the entire receipts of the ICC. We set aside the order of ld CIT(A) and direct the AO to allow exemption u/s 11 of the Act in respect of entire receipts/income. Consequently ,the grounds of assessee allowed. Depreciation claim of assessee trust - HELD THAT:- The assessee s case is squarely covered by the decision of Rajashthan and Gujrati Charitable Foundation [ 2017 (12) TMI 1067 - SUPREME COURT] in the context of amendment in Section 11(6) of the Act by the Finance (NO.2) Act 2014 w.e.f 01.04.2015 wherein it has been held that up to AY 2015-16 the assessee is entitled to claim the cost of acquisition of fixed asset as application of income and further depreciation thereon in subsequent years. We set aside the order of Ld. CIT(A) and direct the AO to allow the depreciation on fixed asset as application of income/expenses. Addition treating the sale value of motor car as income - cost of car has been treated allowed as application of income when the car was purchased - HELD THAT:- We find that up to AY 2015-16 even if fixed asset purchased by the assessee was claimed as application of income while computing the income, even then it is presumed that WDV is there in the books of account. We have even perused the provisions of Section 11(1)(a) of the Act which provide that if the sale consideration received on sale of assets is utilized for acquiring another asset then the same is treated as having applied for the charitable purposes. The case of the assessee also find support from the decision of Rajashthan and Gujrati Charitable Foundation [ 2017 (12) TMI 1067 - SUPREME COURT] wherein it was held that besides claiming the full deduction of cost of fixed asset in the year and the assessee would be entitled to depreciation thereon. By considering the ratio laid down in the said decision, we are of the view that even if the entire cost has been claimed as application of income even then the assessee is entitled to claim the deduction of WDV from the sales consideration in order to calculate the capital gain. Accordingly we set aside the order of Ld. CIT(A) on this issue and direct the AO to delete the addition. Deduction u/s 11(1)(a) @ 15% on the net income and not on the gross receipt of the ICC - HELD THAT:- We find that accumulation u/s 11 is to be computed on the gross receipts and not the net receipts. The issue settled by the Hon ble Surpeme Court in the case of ACIT vs. A.L.N. Rao Charitable Trust [ 1995 (10) TMI 2 - SUPREME COURT] wherein it has been held that statutory accumulation u/s 11(1)(a) has to be computed on the gross receipts of the assessee - Thus we are inclined to direct the AO to allow the accumulation u/s 11(1)(a) of the Act on the gross receipt of the assessee and not on the net receipt. Accordingly ground raised by the assessee is allowed.
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2023 (12) TMI 1258
Revision u/s 263 - as per CIT AO has not conducted due inquiry on the issue of applicability of provisions of section 115BBE in respect of surrendered income on account of excess stock found during the survey - HELD THAT:- AO has issued a limited query to verify the quantum of surrendered income declared during the proceedings u/s 133A and in reply also the assessee has given details of the total amount of income declared by the assessee. As it is apparent and manifest from the show cause notice issued u/s 142(1) as well as reply filed by the assessee that the AO has not taken up the issue of higher rate of tax u/s 115BBE of the Act while passing the assessment order. The assessment order is completely silent about any such query raised or inquiry undertaken by the AO. During the course of survey proceedings the assessee in the statement has surrendered this amount on account of excess stock and also promise to pay the due tax as per provisions of Income Tax Act. The Authorised Officer of survey though calculated the tax liability on the surrendered amount at normal rate of tax however, if the said calculation is not in accordance with the provisions of the Income Tax Act the same would not be binding on the decision of the AO while passing the assessment order. The surrendered income on account of excess stock was declared by the assessee under the head other sources and the same was assessed by the AO as income from other sources. There is no quarrel on the point that if the AO has raised the query on this issue of applicability of provision of section 115BBE which was replied by the assessee then question of lack of inquiry does not arise. However, in the case of the assessee the AO has not even taken up this issue despite the income was assessed as income from other sources and therefore, this case does fall in the category of complete lack of inquiry on the part of the AO. Pr. CIT has referred and relied upon various decisions including the decision of the jurisdictional High Court in case of CIT vs. Deepak Garg [ 2007 (5) TMI 186 - MADHYA PRADESH HIGH COURT] Accordingly in the facts and circumstances of the case we do not find any error or illegality in the impugned order of the Pr. CIT setting aside the order of the AO on the issue of applicability of the provisions of section 115BBE as there is a complete lack of inquiry on the part of the AO on this issue. The decisions relied upon by the Ld.AR of the assessee will not help the case of the assessee when there is a complete lack of inquiry on the part of the AO. The AO shall consider and decide this issue in accordance with provisions of section 115BBE of the Act after considering relevant facts and in accordance with law. We have not expressed any view on the merits of the issue.Appeal of the assessee is dismissed.
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2023 (12) TMI 1257
Validity of reopening of assessment - addition u/s 69A - mandation of disposing objections of assessee - assessee has demanded during the assessment proceedings, by way of a letter stating that he was filing Income Tax Return regularly and therefore reopening of his case under section 147/148 of the Act, is not valid - HELD THAT:- Assessee had objected reopening of assessment u/s 147/148 of the Act. Therefore, it was the duty of the Assessing Officer to dispose of the objections raised by the assessee in respect of reopening of his case u/s 147/148 of the Act. However, I note that Assessing Officer did not dispose of the objection raised by the assessee, by way of passing speaking order, in writing and therefore re-assessment proceedings should be quashed on this count only. Assessee had objected reopening of assessment u/s 147/148 of the Act. Therefore, it was the duty of the Assessing Officer to dispose of the objections raised by the assessee in respect of reopening of his case u/s 147/148 of the Act. However, we note that Assessing Officer did not dispose of the objection raised by the assessee, by way of passing speaking order, in writing and therefore re-assessment proceedings should be quashed on this count only. Reasons were recorded by the Assessing Officer in an arbitrary manner and there is no application of mind by the AO. For example, the reasons stated that assessee has deposited an amount in his bank account to the tune of Rs. 14,55,300/-, whereas the actual amount deposited in the bank account by the assessee was to the tune of Rs. 21,54,800/- hence reasons were recorded on arbitrary basis and there is no application of mind by the AO. Therefore, respectfully following the binding precedent of Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd [ 2002 (11) TMI 7 - SUPREME COURT] quash the reassessment proceedings. Decided in favour of assessee. Addition u/s 69A - as per AO considering the smallness of the amount of cash deposit a suitable addition, say, @ 5% of the total cash deposit in the bank account of assessee may be sustained in the hands of assessee - HELD THAT:- Admittedly, AO during the assessment proceedings made addition on account of cash deposited aggregating to Rs. 2,64,500/-, as well as amount deposited by cheques is to the tune of Rs. 4,20,355/-. The amount deposited by way of cheques in the bank account is out of known sources, hence addition should not be made in the hands of the assessee, hence addition to the tune of Rs. 4,20,355/- is hereby deleted. Cash deposit it would be in the interest of justice that only profit eliminate @ 5% should be considered on total cash deposits of Rs. 2,64,500/-. Therefore, the Assessing Officer is directed to consider net profit @ 5% of total cash deposits. Accordingly, the addition is restricted in the hands of the assessee to the tune of Rs. 13,225/-. This assessee`s appeal is therefore, partly allowed in above terms.
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2023 (12) TMI 1254
Penalty u/s 271D and 271E - period of Limitation u/s. 275(1)(c) - HELD THAT:- The relevant date, is neither the date of assessment order, as contended by the appellant in Grihalakshmi Visions [ 2015 (8) TMI 1214 - KERALA HIGH COURT ] or the date of initiation of penalty proceedings by issue of notice under section 274 which though can only be by a competent authority, as contended by the Revenue in that case. But the date on which action for imposition of penalty stands initiated. This action is to be understood as the date on which reference is made to the competent authority for initiation of penalty proceedings. In the instant case/s, this is on 01.01.2008, vide letter issued. The limitation period would thus be up to 31.07.2008, being the later of 31.3.2008 and 31.7.2008. The penalty orders are thus not barred by time, i.e., going by the assessee s own case as made out, and we admit with merit. Further, it is nobody s case, nor could possibly be, that reference to the Jt. CIT by the AO on 01.01.2008, being after the completion of the assessment proceedings on passing the assessment order and issue of demand notice on 13/12/2017, is not valid in law inasmuch as it was after 13.12.2017. In a given case, the Joint/Addl. CIT may himself be the AO, in which case he, noticing and recording violation of sections 269SS/T, may, accordingly, propose to initiate penalty, in which case that would be the relevant proceedings. Why, in a given case, penalty proceedings may be initiated at the instance of the first appellate authority. The date of assessment order may thus not be relevant. Shri Raghunathan would before us seek to bolster his case by arguing that the Jt. CIT may well sleep over the matter, issuing notice u/s. 274, in an extreme case, after years, indefinitely postponing the proceedings, and, which cannot be the intent of the Legislature. While this may be a possibility, even if remote, we do not think it necessary to, given the clear language of the provision, seek to decipher or probe the rationale behind prescribing the time of action for initiation of penalty in its wisdom by the Legislature as against that of initiation of penalty , which could well have been so stated had that been the legislative intent. The words action for imposition of penalty has been/is initiated , in s. 275(1)(c), could only be on the reference to the competent authority in the matter, i.e., proposing initiation of penalty u/s. 271D/E of the Act, in collateral proceedings. The sleep over would, rather, defeat the levy of penalty inasmuch as action for the imposition of penalty precedes the date of its initiation.he assessee, for the reasons afore-stated, fails in it s challenge on limitation. We decide accordingly. Reasonable cause u/s. 273B - We have given our careful consideration to the matter, which may have implications beyond the instant case, the financial impact of which, at an aggregate of Rs. 231.24 cr., also emphasised by Shri Raghunath, is not insubstantial. The default being admitted, reference to the enhanced limit of Rs. 2 lakhs, up from Rs. 20,000, in sections 269SS/T, for a PACS, w.e.f. the previous year commencing 01.04.2023, as pointed out by Shri Das, so made, as explained by him, with a view to provide relief to the low income groups in rural areas and facilitate easier conditions of business operations in such areas, may not add any further strength to the Revenue s case; the burden to prove reasonable cause being in any case on the assessee. In our view, looking at the entirety of the facts and circumstances, the assessee deserves to succeed in the conspectus of it s case. Assessee is involved in both, i.e., borrowing, through acceptance of deposits, as well as lending, with the only difference that the members of the public are entitled to deposit their monies as well as borrow monies on becoming nominal members by paying a nominal sum upon filling an application form, permitted by it s governing Act and bye-laws. It is this that led to the denial of deduction u/s. 80P in assessment. The assessee-society, though registered as a PACS under the Kerala Act, is legally dealing with members and non-members, i.e., public at large, without restriction as to area, i.e., at par with a commercial or cooperative bank, excluded from the ambit of ss. 269SS/T. In our view there is thus a reasonable cause for the assessee, who has a past history of operating in such a manner, being so for over three decades post 30.06.1984, i.e., since when sections 269SS/T of the Act are on the statute, for having violated the said provisions, and is thus not liable to penalty under sections 271D/E of the Act in terms of s. 273B. We may also clarify; the same having also been duly considered and factored into our decision, that no doubt at any stage, including before us, has been expressed by the Revenue as regards the maintenance of proper records, including qua KYC, by the assessee. This is as, where so, this would have warranted remanding the matter back to identify such suspected cases inasmuch as there could be a transgression of the provisions of the PMLA, with the assessee using it s status, reach and clout as a bank to deal in illicit money or otherwise with customers without proper antecedents. Appeal of assessee allowed.
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2023 (12) TMI 1253
Assessment u/s 153A - Unexplained share capital - Addition u/s 68 - incriminating material found during search or not? - HELD THAT:- The entire issue stands settled by the judgment of M/s. Abhisar Buildwell P. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT ] wherein held that in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Hence, respectfully following the judgment of Hon ble Apex Court, we hold that no addition can be made in the case of the assessee sans seized material u/s 153A. Hence, keeping in view, the pertinent facts of the case, we affirm the order of the ld. CIT(A) to the extent of non- availability of relevant seized material which could have lead to the addition by the AO, hence, the appeal of the revenue stands dismissed.
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Customs
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2023 (12) TMI 1252
Refund of SAD - SAD had been paid, not in cash, but by utilising the DEPB scrip - HELD THAT:- The said issue came up before the Hon ble Delhi High Court in the case of ALLEN DIESELS INDIA PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2016 (2) TMI 247 - DELHI HIGH COURT] , wherein it was held that Although it is sought to be projected that the circulars which are subject matter of the challenge in the present petitions were issued to streamline the procedure and to remove ambiguities, in fact what the circulars seek to amend is Notification No. 102/2007-Customs itself by introducing an additional condition for being entitled to refund, which condition does not find place in Notification No. 102/2007-Customs. As the issue is no more res-integra in view of the judicial pronouncement of the Hon ble High Court and the Tribunal and the ld. Commissioner (Appeals) has followed the same - there are no infirmity in the impugned order and the same is upheld. The appeal filed by the Revenue is dismissed.
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Corporate Laws
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2023 (12) TMI 1256
Direction for investigation into the affairs of the company - reference the matter of SFIO on the request of the official liquidator - Application filed by an Ex-Director of the Company in liquidation to recall the order passed by this Court - Money Laundering - diversion of funds - HELD THAT:- It is not denied by the Official Liquidator that it has a panel of Chartered Accountants through whom the inspection and inquiries may be ordered. The sole purpose for which the Official Liquidator has sought for referring the matter to the SFIO was for detection of diversion of assets/funds of the company in liquidation. It is not denied by the Official Liquidator that the balance sheet, other books of account and documents are in possession of the official liquidator as well as the statement of affairs filed by the ex-Director on behalf of the company in liquidation. Learned counsel for the applicant is right in saying that there was no material in the Official Liquidator s report to demonstrate that there was any intention of the Ex-Director to defraud the creditors, members or any other person or that the management of the company was guilty of fraud and misfeasance or other misconduct towards the company or towards any of its members and, therefore, referring the matter to the SFIO is uncalled for. As a matter of fact, the allegation against the company in liquidation by the Official Liquidator regarding a web of intrigue employed by the company and other groups of companies for defrauding the investors and creditors and diversion of funds of the company, could have been substantiated by the specific references to the entries made in the balance sheet and other books of account of the company in liquidation, which has not been done. To insinuate that the office of the Official Liquidator does not have the capacity or ability to detect diversion of funds of the company in liquidation, is not acceptable given the fact that a panel of Chartered Accounts is admittedly available to assist the Official Liquidator in discharge of its duties. The provisions of the Act, 1956 and the Act, 2013 though, do not prohibit investigation to be initiated where the company has passed a special resolution for voluntary winding up or where other proceeding for winding of a company are pending before the Tribunal, however, the same may not applicable in the case of the company in liquidation, inasmuch as the winding up order of the company in liquidation was passed by the Court much prior to the report of the Official Liquidator filed before this Court seeking investigation by the SFIO. It is not the case of the Official Liquidator that the powers conferred on it by virtue of the aforesaid provisions are inadequate for purpose of detection of the irregularities like the allegation of diversion of funds, etc. that caused it to move this Court for referring the matter to the SFIO. It should not appear to the Court that the Official Liquidator seeks referral of the matter to the SFIO for the reason that it finds itself inadequate to exercise the powers conferred on the Official Liquidator by the aforesaid sections of the Act. The order dated 13.12.2019 is recalled and the Recall Application No.235 of 2020 is hereby allowed.
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2023 (12) TMI 1251
Interim measure to deposit an amount of Rs. 3.22 crores with the Registrar of Company, Delhi towards fees for delay in filing Form SH-7 - HELD THAT:- This amount has not been deposited. The petitioner has also not taken out any application seeking condonation of delay in making such deposit or permitting him to deposit in instalments. A petition under Article 136 of the Constitution of India has a discretionary element for this Court to consider. Because of the petitioner s conduct, we do not think such discretion ought to be exercised in favour of the petitioner. Otherwise also, we are also not satisfied with the petitioner s case on merit. Petition dismissed.
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2023 (12) TMI 1250
Professional misconduct - Auditor's conflict of interest with the auditee company - Acting as statutory auditor of SKNL while holding or controlling shares of SKNL in violation of section 141 of the Companies Act 2013 section 226(3)(e) of the Companies Act 1956 resulting in failure to maintain independence of auditor - Non-compliance with para 7 to 9 of Standard on Auditing (SA) 705 - penalties and sanctions - HELD THAT:- It is clear that CA Shyam Malpani had violated the Companies Act 1956, the Companies Act 2013, SQC1, SA 220 and SA 705 by performing this audit despite having serious conflict of interest and in not giving appropriate audit opinions. It is therefore concluded that CA Shyam Malpani has committed Professional Misconduct as defined under Section 132 (4) of the Companies Act 2013 in terms of section 22 of the Chartered Accountants Act 1949 (CA Act). As per the clause 7 of Part I of the Second Schedule of the CA Act, an EP is guilty of professional misconduct if he did not exercise due diligence and was grossly negligent in the conduct of his professional duties - Since the EP compromised his independence and failed to recognize and report the pervasiveness of the deficiencies of the financial statements, his conduct undoubtedly falls into the category of lack of due diligence and gross negligence. Therefore, the charge of professional misconduct on the part of the EP on this account is proved. Internationally also, similar cases of Auditor's conflict of interest with the auditee company has been viewed seriously. In this case the audit done by the EP related to SKNL which was a large public listed company and involved interest of large number of shareholders and other stake holders such as banks, creditors etc. It is critical that the auditor and the EP performed their job with due diligence to give assurance to the investors and stakeholders on true and fairness of the financial statements and thereby protect public interest. Any default on this account impacts and jeopardizes the larger public interest which needs to be considered while determining the quantum of punishment. Considering the nature and seriousness of violations and principles of proportionality, in the exercise of powers under Section 132 (4) (c) of the Companies Act, 2013, the sanctions ordered - a monetary penalty of Rupees Five Lakh imposed upon CA Shyam Malpani. In addition, CA Shyam Malpani is debarred for a period of Five years from being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate. Application disposed off.
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Insolvency & Bankruptcy
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2023 (12) TMI 1255
Qualification of Resolution Applicant - Promotor of the company - Application for Resolution Plan dismissed on the ground that the promoters could not have presented the plan - ineligibility to continue as a Resolution Professional - ineligibility to be considered as Board is liquidator of the corporate debtor - whether the appellant had erred in putting up a plan that was not in consonance with law for consideration of the adjudicating authority? HELD THAT:- As per the factual scenario on record, there is no per say disqualification under Section 29A - it is pointed out that the plea based on Section 240A needs the opinion of this Court as there are a number of such cases arising and the orders earlier passed are being followed. The common submission thus, is that while interpreting Section 240A, the reason for carving out an exception in micro, small and medium industries is set out on the date of application for making the bid as the crucial date. The submission is that while for some other aspects the initiation of the CIRP proceedings would be the cut off date, the same would not apply in the case of Section 240A, in view of the statement by the Minister themselves while introducing the amendment Bill. The statement of the Minister is looked into for purposes of a cut off date that there is no other specific provision providing for cut off date which submits that it should be the date of application of making a bid. Thus, to opine that it is the initiation of the CIRP proceedings which is the relevant date, cannot be said to reflect the correct legal view and thus, it is constrained to observe that the law laid down in DIGAMBAR ANANDRAO PINGLE VERSUS SHRIKANT MADANLAL ZAWAR, SHRIKANT MADANLAL ZAWAR, VANDANA GARG LIQUIDATOR M/S PINGLE BUILDERS PVT. LTD., STATE BANK OF INDIA, VIJAYA BANK, M/S SOORAJMULL BAIJNATH PVT. LTD. [ 2021 (7) TMI 456 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] case by the Tribunal is not the correct position in law and the cut off date will be the date of submission of resolution plan - Thus, even on this count, the plan submitted in question will not incur the disqualification. The petition before the Adjudicating Authority would stand restored to National Company Law Tribunal for reconsideration
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2023 (12) TMI 1249
Condonation of delay in filing an appeal before NCLAT - whether the appeal was instituted within limitation? - Maintainability of application under Section 7 of the IBC - HELD THAT:- On the facts of the case, the Court noted that the appeal was barred by limitation as the appellant did not even attempt to secure a certified copy and only relied on the date of uploading the order on the website. Significantly, in the case, there was a pronouncement on the date mentioned on the order and the appellant did not dispute his presence before the NCLT when the order was pronounced in open court. The date on which the limitation begins to run is intrinsically linked to the date of pronouncement. The question that arises in the facts of the present case, therefore, is when is an order deemed to be pronounced. The National Company Law Tribunal Rules, 2016 [NCLT Rules] provide guidance in this regard. Rule 89(1) of the NCLT Rules indicates that when NCLAT registry publishes its cause list, a distinction is drawn between cases listed for pronouncement of orders and other cases. In the present case, the cause list for 17 May 2023 placed on record by the appellant indicates that the case was listed for admission and not for pronouncement. Further, on a specific query of the Court, it is not in dispute between counsel for the appellant and the respondent, that no substantive order was passed on 17 May 2023 by the NCLT. In these circumstances, limitation would not begin to run on 17 May 2023 which was the date on which hearings concluded. As no order was passed before 30 May 2023, there was no occasion for the appellant to lodge an application for a certified copy on 17 May 2023. Time for filing an appeal would commence only when the order appealed from was uploaded since prior to that date no order was pronounced. The period of limitation began to run on 30 May 2023. The 30- day limitation period provided in Section 61(2) of the IBC concluded on 29 June 2023. Though the appeal was filed beyond the period of thirty days, it was within the condonable period of fifteen days - the appeal should be restored to the NCLAT for reconsidering whether the appellant has shown sufficient cause for condoning the delay beyond thirty days. Appeal disposed off.
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2023 (12) TMI 1248
Maintainability of section 9 application - HELD THAT:- The present appeal is dismissed - It is clarified that the impugned judgment and the dismissal of the present appeal will not be construed as an expression of opinion on whether the petition under Section 9 of the IBC is within time.
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2023 (12) TMI 1247
Submission of claim before COC - HELD THAT:- The pleas and contentions of Kamal Kant Dewan and Bharat Food and Agro Products, as well as the contentions of White Water Hospitality Private Limited, will be examined by the adjudicating authority. The impugned judgment set aside - appeal allowed.
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2023 (12) TMI 1246
Dismissal of Section 9 application - pre-existing dispute - HELD THAT:- The email sent by the Corporate Debtor indicate the entire issue raised between the parties, where the Corporate Debtor denied any outstanding amount. Further, the receipt which was claimed by the Corporate Debtor was the receipt of the diamonds received on behalf of the Appellant, which were all before the date when Demand Notice was issued. This indicate that at the time when Demand Notice was issued, there were dispute between the parties. The Adjudicating Authority has rightly rejected the Section 9 application there being a pre-existing dispute - Appeal dismissed.
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2023 (12) TMI 1245
Seeking condonation of delay of 15 days in filing of the appeal - existence of sufficient reasons for delay or not - HELD THAT:- In the present case, the appeal has been filed on the last date i.e. 15th day i.e. 45th day. The reason given in para 3 of the application for condonation of delay appears to be a halfhearted attempt on the part of the Appellant for condonation the delay of 15 days because it is mentioned therein that the appellant took time for procuring relevant documents and as such the counsel for the Appellant could not receive instructions on time. However, in the additional affidavit, the Appellant has mentioned that it had to obtain several documents which could not be procured in time. However, it is not denied that the appeal was filed on 17.04.2023 and then an application was filed on 08.11.2023 for placing on record the additional documents. The Hon ble Supreme Court in the case of National Spot Exchange Limited Vs. Anil Kohli [ 2021 (9) TMI 1156 - SUPREME COURT ] held that the delay beyond the period of 15 days cannot be condoned by the Tribunal and even under Article 142 of the Constitution of India which makes the provision very stringent and lays responsibility on the Appellant to be vigilant enough to file the appeal within the prescribed period. In view of the aforesaid facts and circumstances, there are no merit in the application and the same is hereby dismissed - The application for seeking condonation of delay in re-filing has become infructuous and the same is hereby dismissed. Condonation of delay of 15 days in filing the appeal and for condonation of delay of 162 in refiling the appeal - HELD THAT:- In the present case, the appeal has been filed on the last date i.e. 15th day i.e. 45th day. The reason given in para 3 of the application for condonation of delay appears to be a halfhearted attempt on the part of the Appellant for condonation the delay of 15 days because it is mentioned therein that the appellant took time for procuring relevant documents and as such the counsel for the Appellant could not receive instructions on time - the Hon ble Supreme Court in the case of National Spot Exchange Limited Vs. Anil Kohli, [ 2021 (9) TMI 1156 - SUPREME COURT ] held that the delay beyond the period of 15 days cannot be condoned by the Tribunal and even under Article 142 of the Constitution of India which makes the provision very stringent and lays responsibility on the Appellant to be vigilant enough to file the appeal within the prescribed period - there are no merit in the application and the same is hereby dismissed.
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PMLA
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2023 (12) TMI 1244
Arrest of appellant - HELD THAT:- Even during the course of investigation, the appellant was not arrested. The interim order dated 16th October, 2023 is made absolute on the same terms and conditions - Appeal allowed.
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2023 (12) TMI 1243
Seeking grant of anticipatory bail - Money Laundering - proceeds of crime - statement recorded under Section 50 of the PMLA, 2002 - HELD THAT:- The co-accused persons Shesh Nath Chauha, Ashok Kumar Singh and Pramod Kumar Singh have been granted anticipatory bail in the present case - The complaint states that the applicant was working as a Junior Engineer; the applicant is aged about 63 years and besides the alleged Scheduled offence, he is not involved in any other case. He has already been granted anticipatory bail in the Scheduled offence and three co-accused persons have been granted anticipatory bail in the present case. The applicant is also entitled for anticipatory bail in the present case - In the event of arrest/ appearance of applicant-Ashok Kumar Singh before the learned Trial Court in the aforesaid case crime, he shall be released on anticipatory bail on his furnishing personal bond and two solvent sureties, each in the like amount, to the satisfaction of S.H.O./Court concerned on the conditions imposed - bail application allowed.
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Service Tax
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2023 (12) TMI 1242
Levy of service tax - Declared Service - relinquishment charges under section 66E (e) of the Finance Act - charges are in the nature of consideration received towards rendition of the declared service i.e. tolerating of relinquishing access rights - HELD THAT:- It is well settled that the amount paid in the nature of compensation/damages on account of breach or non-performance of contract would not be considered in lieu of any service and, therefore, would not be leviable to service tax. In view of the decision of the Tribunal in South-Eastern Coalfields Ltd. [ 2020 (12) TMI 912 - CESTAT NEW DELHI] , it has to be held that relinquishment charges are not consideration received towards rendition of a declared service under section 66E (e) of the Finance Act. It would not be necessary to examine the alternative submission made by the learned counsel for the appellant that in any view of the matter, the relinquishment charges recovered by the appellant are part of the electricity transmission service and, therefore, would be covered under the Negative List under section 66D (k) of the Finance Act. The order dated 04.03.2021 passed by the Principal Commissioner cannot be sustained and is set aside - Appeal allowed.
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2023 (12) TMI 1241
Levy of service tax - Declared service or not - Recovery of penalty/liquidated damages recovered from customers and contractors - agreeing to the obligation to recover from an Act or to start an Act or a situation, or to do an Act - HELD THAT:- After considering the various provisions of Indian Contract Act therewith, it has been held that liquidated damages/ compensation for the breach of contract can be awarded to make good the loss or damage which actually arises or which the parties knew when they made the contract, to be likely to result from the breach . Hence it cannot be concluded that sum received is synonymous to tolerating . It is absolutely wrong to say that in breach of contract one appellant tolerates an Act or a situation, hence, the view taken by the Commissioner (Appeals) that the liquidated damages as have been received by the appellants towards consideration for tolerating the Act are leviable to service tax under section 66 E(e) of Finance Act is not at all sustainable. In the fact of both the present appeals, it is found that the facts are almost identical. There appears nothing for us to differ from the above observations in the afore-mentioned final order of the said Tribunal. Respectfully, following those findings it is held that the amount in question cannot be called as consideration towards declared service as defined under Section 66E (e) of the Finance Act. The confirmation of tax demand qua said amount is therefore not sustainable. Appeal allowed.
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Central Excise
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2023 (12) TMI 1240
Refund claim - refund rejected solely on the ground that the TR6 challan, evincing payment of duty, had not been furnished - HELD THAT:- The issue of documentation prescribed under section 11B of Central Excise Act, 1944 for claiming of refunds came before the Tribunal in MAHARASHTRA STATE ELECTRICITY BOARD VERSUS COMMR. OF C. EX., NAGPUR [ 2004 (4) TMI 368 - CESTAT, MUMBAI] and it was held therein that The respondent has no case that the appellants have claimed refund of duty unduly or with any oblique purpose. The appellant is a public body and it can have no oblique motives. The orders of the lower authorities are set aside in so far as the refund claims in question are concerned. The claims are allowed. The issue is the same as that in the dispute of the appellant for similar refund. It would appear that the lower authorities had erred in insisting upon the original document as proof of discharge of duty liability even though available with the central excise authorities - the impugned order is set aside and the application restored to the original authority for fresh determination of the application for sanction in consequence of judicial determination of non-excisability. The appeal is allowed by way of remand.
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2023 (12) TMI 1239
Levy of Central Excise Duty - inclusion of sales tax concession retained by the assesses in the assessable value or not - extended period of limitation - penalty - HELD THAT:- The issue is no more res integra as the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II VERSUS M/S. SUPER SYNOTEX (INDIA) LTD. AND OTHERS [ 2014 (3) TMI 42 - SUPREME COURT ], has held that the sales tax concession retained by the assesses is required to be added in the assessable value for the purpose of levy of Central Excise duty. By relying on the above decision of the Hon ble Supreme Court, we hold that the sales tax concession retained by the Appellant is required to be added in the assessable value for the purpose of levy of Central Excise duty. Since the Appellant has not collected the duty separately from the customers, the amount collected is to be treated as inclusive of duty - the demand for the normal period is to be computed by taking the amount collected as cum-duty. Penalty - HELD THAT:- The appellant cannot be faulted for not including the same in the assessable value. In the impugned order, the adjudicating authority while agreeing that extended period not invocable in this case, imposed penalty equal to the duty confirmed under Section 11AC of the CEA, 1944 - the adjudicating authority has not given any proper finding for imposing penalty under Section 11AC. Accordingly, the penalty imposed under Section 11AC not tenable. Extended period of limitation - HELD THAT:- In the present case, it is observed that the Adjudicating Authority has failed to show any positive act of suppression on the part of the Appellant. The details of VAT collected and retained by the Appellant are reflected in the audited Profit Loss account and balance sheet of the impugned periods. Accordingly, by following the above Circular issued by the Board, it is held that extended period not invocable in this case and for the same reason penalty under Section 11AC of the CEA, 1944 also not imposable. The appeal is disposed by way of remand for calculating the duty, payable for the normal period of limitation, with consequential relief, if any, as per law.
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2023 (12) TMI 1238
Reversal of cenvat credit - used/rejected capital goods on which Cenvat credit has not been taken are cleared as waste and scrap - transaction value as per Rule 3(5A) of the Cenvat Credit Rules - HELD THAT:- On going through the provisions of Rule 3(5) and 3(5A) of the Cenvat Credit Rules. A perusal of these Rules 3(5) and 3(5A) reveal that the expression the capital goods available in Rule 3(5A) refers to the capital goods on which Cenvat credit has been taken - Rule 3(5) provides for a situation where such capital goods are removed as such from the factory or premises of the provider of output service. Rule 3(5A) deals with a situation when such capital goods are cleared as waste and scrap . It is apparent that both the provisions of Rules 3(5) and (5A), are concerned with capital goods on which Cenvat credit has been taken. As the Appellant has not availed any credit on these rejected capital goods cleared as scrap, we hold that the provisions of Rule 3(5) and 3(5A) are not applicable in this case - the demand of duty confirmed in the impugned order is not sustainable. Since, the demand of duty itself is not sustainable, the question of demanding interest or imposing penalty does not arise. The impugned order set aside - appeal allowed.
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2023 (12) TMI 1237
CENVAT Credit - inputs or not - wielding electrodes used in their factory premises towards repairs and maintenance activities - HELD THAT:- The Rajasthan High Court in the case of HINDUSTAN ZINC LTD. VERSUS UNION OF INDIA [ 2008 (7) TMI 55 - RAJASTHAN HIGH COURT ] has held the expression in the manufacture of goods should normally encompass entire process carried on by the dealer, of converting raw materials into finished goods, where any particular process, or activity, is so integrally connected with the ultimate production of the goods, but for that process, manufacturing, or processing of the goods would be commercially inexpedient, goods required in that process would, fall within expression in the manufacturing of goods . The Chhattisgarh High Court in the case of CST, Bilaspur Vs. Singhal Enterprises Pvt. Ltd. [ 2017 (7) TMI 1112 - CHHATTISGARH HIGH COURT ] has held Welding Electrodes used in the manufacturing process are considered as inputs. Since the present issue is squarely covered by the above decisions of the Hon ble High Court, respectfully following them, the present Appeal is allowed.
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Indian Laws
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2023 (12) TMI 1236
Recovery of dues - priority over charges - whether the different departments of the State including Excise and Revenue will have priority over the secured creditors debt? - HELD THAT:- It would be evident from the replies filed by the respondents that they have nowhere disputed the lien of the State Bank of India as per Section 26 D noted and entered in the CERSAI (Annexure P-2), dated 06.03.2013, which clearly establishes the fact that the petitioner-Bank is not only a secured creditor but has created the first charge over the property in question as far as back in the year, 2013. Whereas the charge of respondents No. 1 and 2 had been created and reflected in revenue record vide rapat No. 459, dated 09.07.2015 and that of respondent No. 3 only vide Rapat No. 173, dated 05.02.2018. Once the petitioner is a secured creditor and has moreover created the first charge over the property, then obviously, it has the first right to realise its dues and this question is no longer res integra in view of the authoritative pronouncement of the Hon'ble Supreme Court in Punjab National Bank Vs. Union of India Ors. [ 2022 (2) TMI 1171 - SUPREME COURT] . The legal position has thereafter been reiterated in a recent judgment of this Court in Mankind Life Sciences Private Limited vs. The State of Himachal Pradesh Anr., [ 2023 (10) TMI 867 - HIMACHAL PRADESH HIGH COURT] , wherein it was held [ 2022 (2) TMI 1171 - SUPREME COURT] . This Court is left with no other option, but to allow the instant petition by directing respondents to remove the red entry qua the property in question made in the revenue record i.e. Rapat No. 459, dated 09.07.2015 and Rapat No. 173, dated 05.02.2018 forthwith. The instant petition is allowed.
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2023 (12) TMI 1235
Dishonour of Cheque - rebuttal of presumption - main reason asserted both for dislodging execution of Ext.P1 and lack of consideration is that the similarity of handwriting in it with that in Ext.X1. PW1 has no case that Ext.P1 was in the handwriting of the petitioner - HELD THAT:- The petitioner did not adduce any evidence. It is true that in order to rebut the presumption in respect of a cheque, the accused can rely on the evidence and materials submitted by the complainant. The only thing is that the accused must be able to substantiate his case by preponderance of probabilities. The case set up by the petitioner during the cross-examination of PWs.1 to 3 and also in his answers to the question put to him under Section 313(1)(b) of the Code is that the cheque was issued as a security in respect of the transactions between himself and the 1st respondent - Lack of signature of PW1 in two pages of Ext.P6 does not assume much importance since its execution is proved by the evidence of PW3 and it is in favour of the 1st respondent. It was after considering the aforesaid evidence in detail the courts below concurrently held that the petitioner failed to rebut the presumption available under Section 139 of the N.I. Act in respect of Ext.P1. The power of revision under Section 401 of the Code is not wide and exhaustive. The High Court in the exercise of the powers of revision cannot re-appreciate evidence to come to a different conclusion, but its consideration of the evidence is confined to find out the legality, regularity and propriety of the order impugned before it. When the findings rendered by the courts below are well supported by evidence on record and cannot be said to be perverse in any way, the High Court is not expected to interfere with the concurrent findings by the courts below while exercising revisional jurisdiction. This Court is not expected to substitute the concurrent finding of the court below with a different view unless such findings are perverse and against the evidence - the revision lacks merits and liable to be dismissed - the revision petition is dismissed.
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