TMI Tax Updates - e-Newsletter
December 24, 2022

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs Corporate Laws Insolvency & Bankruptcy Law of Competition PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. ARREST GUIDELINES UNDER GST LAW

   By: Dr. Sanjiv Agarwal

2. ADVISORY COMMITTEE DURING WINDING UP PROCEEDINGS UNDER COMPANIES ACT, 2013

   By: DR.MARIAPPAN GOVINDARAJAN

3. Self-assessment of tax liability during Audit before June 30, 2019 can be consider as ‘Quantification’ under SVLDR Scheme, 2019

   By: Bimal jain

4. TDS Credit shall be given for the assessment year for which income is assessable

   By: Bimal jain

News

1. 9th Session of India Russia Working Group on Modernization & Industrial Cooperation of the India-Russia Intergovernmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation held

2. 656 Startups Supported by Approved Incubators under Startup India Seed Fund Scheme (SISFS)

3. Shri Piyush Goyal meets His Excellency Mr. Tipu Munshi, Commerce Minister, Government of Bangladesh in Delhi

Notifications

Customs

1. 112/2022 - dated 22-12-2022 - Cus (NT)

Customs Tariff (Determination of Origin of Goods under the India-Australia Economic Cooperation and Trade Agreement) Rules, 2022.

GST - States

2. CCT/26-2/2022-23/79/2777 - dated 16-12-2022 - Goa SGST

Supersession of Notification No. CCT/26--2/2018-19/57/469 dated 17th June, 2020

3. 38/1/2017-Fin(R&C)(240)/2017 - dated 15-12-2022 - Goa SGST

Goa Goods and Services Tax (Fourth Amendment) Rules, 2022

4. TGST Notification No. 09/2022 - dated 3-11-2022 - Telangana SGST

Seeks to extend the due date of filing FORM GSTR-3B for the month of September, 2022.

5. 11/2022-State Tax (Rate) - dated 1-11-2022 - Telangana SGST

Seeks to rescinds the notification G.O.Ms.No.250, Dt: 21-11-2017

6. 10/2022-State Tax (Rate) - dated 1-11-2022 - Telangana SGST

Amendment in Notification No. G.O.Ms.No.51, Revenue (CT-II) Department, Dt: 17-05-2022

7. G.O.Ms.No. 111 - dated 15-10-2022 - Telangana SGST

Seeks to amend Notification No. G.O.Ms No104, Revenue (CT-II) Department, Dt. 04-09-2019

Highlights / Catch Notes

GST

• GST Classification Dispute: Both Parties Err in Responses, Proceedings to Restart for Correct Resolution.

  Case-Laws - HC : Classification of manufactured goods - If the appellants had restricted their reply only to the extent query raised, this problem could have been averted. Thus, not only the authority committed a mistake in proceeding to reject all the contentions and then issued the show cause notice, equally the appellants also committed a mistake in mentioning facts which were not required to be done pursuant the query raised by the authority. - The entire proceedings have to be redone in an opposite manner. - HC
  Visit to Get Source

  ---

• Dealer Can Choose Refund or Carry Forward ITC to GST; Portal Open Until 2024 for Decision Flexibility.

  Case-Laws - HC : Refund of ITC - forcing an option to the assessee - It is clear from the narrative thus far that the dealer has two options i.e., refund or carrying forward the ITC to GST regime, the dealer in the case on hand, has opted for the former not the latter. The common portal giving dealer the option for choosing former or latter also is now active till 2024. In such circumstances, the dealer cannot be compelled to opt for one of the two i.e., refund or carrying forward the ITC to GST regime. - HC
  Visit to Get Source

  ---

• Court Allows Amendment of GSTR-1 for Wrong GST Number; Refund and ITC Adjustment Permitted Despite Portal Limits.

  Case-Laws - HC : Refund claim of tax wrongly paid or allowing ITC to the correct party - inadvertent mistake in filling the GST number in the GSTR-1 - seeking permission to rectify the details of the recipient of the service in the form of GSTR-1 - Difficulty in following the Circular as the GST portal did not permit to rectify the defects - As the Circular of the year 2019 restricts only electronic filing and as the contention of the respondents that the claim of the petitioner is barred by limitation is not acceptable, the respondents cannot retain the amount, which was paid by the petitioner. - HC
  Visit to Get Source

  ---

• High Court Rules ARA's Decision Invalid Due to Prior GST Registration Cancellation and Investigation u/s 98(2.

  Case-Laws - HC : Validity of advance ruling - The main plank of argument of learned counsel for petitioner is that even by the date of filing of application before ARA on 15.12.2020, the GST has already cancelled the registration under GST Act of the petitioner - Having regard to the legal position that when investigation has already commenced prior to the filing of application, the ARA shall not admit the application as per proviso to sub-section (2) of Section 98, the ARA should not have admitted the application in the instant case and issued its ruling. Therefore, the said order dated 05.03.2020 is vitiated by law - HC
  Visit to Get Source

  ---

• Petitioner Wins Refund of Unutilized Input Tax Credit; Statutory Provisions Prevail Over Circular Guidelines u/s 54(3) & Rule 89(4).

  Case-Laws - HC : Refund of unutilised input tax credit - non-compliance with the procedure - When the entitlement of the petitioner for refund is not in dispute and the appellate authority has confirmed the claim of the petitioner and the conditions of section 54(3) of the Act and Rule 89(4) of the Rules are complied with, in such facts and circumstances, even if the procedure laid down in the circular for getting refund stands at variance or if it was not observed by the petitioner for nonculpable reasons, the providence and procedure in the circular would not prevail over the statutory prescription under which the right of the petitioner to get refund is established. - HC
  Visit to Get Source

  ---

Income Tax

• Assessment Order Challenged: Assessee Denied Required Response Time, Violating Natural Justice Principles.

  Case-Laws - HC : Validity of assessment order - undue haste in passing the order - the assessee had not been given 5 days time and effectively, they had only 48 hours to submit its reply. With regard to the details regarding the GSTR-1 returns of the other parties is concerned, the assessing officer would state that the portal was kept open. There was nothing on record to indicate that the assessee was put on notice that the portal was kept open and it could do verification so as to reconcile any discrepancy. Thus, we are fully satisfied that there is total violation of principles of natural justice, which would be a good ground to interfere with the assessment order despite an appellate remedy existing over such an order. - HC
  Visit to Get Source

  ---

• Court Stresses Independent Judgment Needed for Provisional Attachment u/s 281B of Income Tax Act.

  Case-Laws - HC : Provisional attachment u/s 281B - mandatory pre-requirement and precondition of recording of formation of opinion - It is trite law that grant of approval should not be a mechanical act and should reflect independent application of mind and this important safeguard of taking prior approval of the Commissioner under Section 281B of I.T.Act is not a mere empty formality and cannot be taken lightly. - HC
  Visit to Get Source

  ---

• Court Rules Tax Consultant's Delay Due to Son's Illness Not Negligence, Overturns Previous Order u/s 80IB(10.

  Case-Laws - HC : Deductions u/s 80IB(10) - delayed filing of return - omission on the part of tax consultant due to severe ill health of his son - We do not find that the omission to file petitioner’s return by the income tax consultant to be an act of negligence. - The very fact that not only the petitioner’s ITR was not filed in time, there were also 28 others whose return filing was delayed beyond the due date. The authorities should refrain from over analysis which leads to paralysis of justice. We are, therefore, of the view that the impugned order dated 7th May 2021 deserves to be set aside and is hereby set aside. - HC
  Visit to Get Source

  ---

• CIT Revises Assessment: Deduction Claim u/s 54B Denied Due to Non-Compliance with Agricultural Use Requirement.

  Case-Laws - AT : Revision u/s 263 by CIT - justification for claim of deduction u/s. 54B - Section 54B of the Act is not applicable, if the land was not used for agricultural purposes in the two years preceding the date of transfer. Thus without applications of the provisions of law, the assessing officer has granted the relief to the assessee which otherwise the assessee is not eligible for the claim of deduction u/s. 54B of the Act. - Revision order sustained - AT
  Visit to Get Source

  ---

• Tax Deduction u/s 80G Upheld for Donations to Ramkrishna Mission Ashram; PCIT's Order Quashed for Ignoring Evidence.

  Case-Laws - AT : Revision u/s 263 - Eligibility of deduction u/s 80G - Deduction u/s 80G for donation made to Ramkrishna Mission Ashram, ld. PCIT took an adverse view for want of donation receipts and certificate of registration of the donee. Assessee has furnished all the relevant documentary evidences to substantiate its claim which ld. PCIT has failed to consider himself. - revision order passed by the ld. Pr. CIT u/s 263 quashed - AT
  Visit to Get Source

  ---

• Payments for Tenant Accommodation Not Rent Under Sec 194I; No TDS Deduction Required, Disallowance Under Sec 40(a)(ia) Unjustified.

  Case-Laws - AT : TDS u/s 194I - compensation paid by the assessee to the tenants towards alternative accommodation not being in the nature of rent as defined in section 194I, there is no requirement for deduction of tax under the said provisions. Therefore, the disallowance made under section 40(a)(ia) of the Act cannot be sustained - AT
  Visit to Get Source

  ---

• Section 274 Notice Invalid: Lacks Specific Charges u/s 271AAB, Resulting in Legal Defect.

  Case-Laws - AT : Penalty u/s 271AAB - Validity of notice issued u/s 274 - Except mentioning the section 271AAB of the Act in the notice, it does not talk anything about the provisions of section 271AAB. Therefore, certainly such notice has a fatal error and technically is not a correct notice in the eyes of law because it intends to penalize an assessee without spelling about the charge against the assessee. - AT
  Visit to Get Source

  ---

• Depreciation Allowed on Leased Asset: Section 32(1) Upholds Lessee's Right to Claim, Additions Deleted by CIT(A.

  Case-Laws - AT : Disallowance of depreciation in respect of asset given on lease - the lessee has been given only right to use the asset for the terms of the lease on payment of specified lease rent for a lease period of 10 years - the assessee is entitled for depreciation on the leased asset as per provisions of section 32(1) - CIT(A) after considering relevant facts has rightly deleted additions made by the AO towards disallowance of depreciation - AT
  Visit to Get Source

  ---

• Challenge to MAT u/s 115JB: Profits not linked to Permanent Establishment taxed, conflicting with treaty provisions.

  Case-Laws - AT : MAT - Book profit u/s 115JB - Action of has the effect not only bringing to tax the profits that are not attributable to the PE but also has the effect of taxing the other items not in accordance with the provisions of other Articles of the treaty. - When the accounts of CSMB do not incorporate the aforesaid five items of income earned by CSSB, the department cannot impose MAT provisions by using the fiction which is contrary to the Banking Regulation Act, 1949. The provisions of Income Tax Act cannot require CSMB to re-write the accounts in a manner different than what is stipulated in the Banking Regulation Act, 1949. - AT
  Visit to Get Source

  ---

• Section 11 of Income Tax Act: Charitable Trusts Must Register to Qualify for Donation Exemption as Non-Taxable Capital Receipts.

  Case-Laws - AT : Exemption u/s 11 - Receipt of donations - If we accept the proposition as canvassed by assessee, then the whole scheme of assessment of charitable institution/trust contemplated in Section 11 to 13 of the Act would become redundant. The arguments of the ld. Counsel for the assessee is that, it is not necessary that a trust/institution should be registered for availing benefit of Section 11(1)(d) of the Act. If an institution has demonstrated that donations were received towards corpus then automatically, it will become a capital receipt which is not taxable. However, we do not agree with these submissions because nowhere in the Act this proposition has been provided. - AT
  Visit to Get Source

  ---

• Land Acquisition Costs for Border Out Posts Not Capital Expenditure, Says Ministry of Home Affairs.

  Case-Laws - AT : Expenditure on Land Acquisition for Border Out Posts (BOPs) - Expenditure as a part of project cost during the course of business - the expenditure done on behalf of MHA (GoI) as project cost was not asset creation in the name of the assessee company, and cannot be treated of capital nature - AT
  Visit to Get Source

  ---

Customs

• Court Upholds 100% Bank Guarantee for Importer Due to Alleged Undervaluation, Citing Section 18(1) and Circular No.38/2016.

  Case-Laws - HC : Release of goods - undervaluation - Having received the findings from the SVB that the Petitioner is undervaluing its import from the related party and differential duty has been estimated at 67.49%, as per the provision of Section 18(1) of the Act read with Circular No.38/2016, bank guarantees to the tune of 100% were correctly insisted upon. There is no error, illegality or lack of power in the Respondents' action in insisting upon the bank guarantee with the loading of 67.49% of the invoice value relying on the investigative findings of SVB. - HC
  Visit to Get Source

  ---

• Customs Broker avoids penalty as Adjudicating Authority fails to justify doubts about goods' declared value u/r 8(1).

  Case-Laws - AT : Imposition of penalty u/s 114 of the Customs Act, 1962 on Customs Broker - undervaluation - in the guise of re-determination of value of goods, the Adjudicating Authority has not given any justifiable reasons except adopting the valuation in terms of Rule 6 ibid. after rejecting the FOB value in terms of Rule 8(1) ibid. Rule 8 authorizes the proper officer to reject the declared value when he has the reason to doubt the truth or accuracy of the same and from a reading of the Adjudication Order, there are no reasons brought on record as to the doubts about the truth or accuracy of the value declared in relation to the export of goods. - No penalty on Customs Broker - AT
  Visit to Get Source

  ---

• Central Government's Inaction on Anti-Dumping Duty Implies Rejection; Matter to be Referred Back for Decision.

  Case-Laws - AT : Non-imposition of anti-dumping duty - intention of the govt. by keeping itself silent for a long period of time - it has to be presumed that the Central Government has taken a decision not to impose anti-dumping duty despite a recommendation having been made by the designated authority for imposition of anti-dumping duty. The matter has, therefore, to be remitted to the Central Government for taking a decision on the recommendation made by the designated authority. - AT
  Visit to Get Source

  ---

• Shipping Bill Amendment Permitted: No Evidence of Non-Conformity Found, Decision-Making Data Transfer Approved.

  Case-Laws - AT : Amendment in the shipping bill - The amendment, which merely has the consequence of data transference for informed decision making on eligibility for reward by competent authority, should have been permitted unless established evidence exists that the goods were not in conformity with details furnished in the shipping bills. No notice to that effect had been issued to enable refuting of such presumption. - Permission granted - AT
  Visit to Get Source

  ---

Corporate Law

• Petitioner Granted Bail in Cheque Misuse Case Under Companies Act Section 212(6) Due to Lack of Arrest.

  Case-Laws - HC : Seeking grant of Regular bail - misuse of cheque discounting facilities - diversion and siphon-off the borrowed funds - section 447 of the Companies Act - Despite having the power under section 212(8) of the Companies Act, to arrest the petitioner in the course of investigation, the investigating officer did not arrest the petitioner, by which it can reasonably be inferred that the officer did not have reason to believe that the petitioner was guilty of any offence punishable under the concerned sections of the Companies Act - The petitioner is entitled to benefit of the proviso to section 212(6) of Companies Act - HC
  Visit to Get Source

  ---

Indian Laws

• Court Rules No Vicarious Liability for Independent Director Without Specific Evidence in Cheque Dishonor Case.

  Case-Laws - HC : Dishonor of Cheque - vicarious liability of the independent Director - In absence of any specific averments or allegations carving out a specific role attributable to petitioner in relation to conduct of business of accused company, merely making bald statements that all the accused persons/directors were incharge and responsible for the day to day affairs of the company, does not suffice to make the petitioner herein vicariously liable for dishonouring of the cheques not signed by him - HC
  Visit to Get Source

  ---

IBC

• Corporate Debtor's debt acknowledgment since 2010 allows Section 7 Application for CIRP, not barred by limitation period.

  Case-Laws - AT : Initiation of CIRP - Period of limitation - Financial Creditors - The material on record shows that the Corporate Debtor has been consistently acknowledging its debt from 31.03.2010 onwards by way of letters in Restructuring Packages, and also by way of communication the Appellant/Financial Creditor for Restructuring, apart from the liability being shown in the Balance Sheets. - The Section 7 Application is not barred by Limitation - AT
  Visit to Get Source

  ---

PMLA

• Courts Urged to Avoid Interfering in Investigations, Except in Cases of Jurisdiction Issues or Abuse of Power.

  Case-Laws - HC : Money Laundering - proceeds of crime - Jurisdiction to investigate - The Apex Court time and again has frowned upon interference into investigations conducted by the Investigation Agency since Courts are not expected to stall investigations, which falls within the exclusive domain of the executive, unless such an investigation is found to be without jurisdiction or there is misuse of power of investigation or such an investigation is an abuse of process of law. - HC
  Visit to Get Source

  ---

• Coram Non-Judice: Cross-Examination Not Standard in Money Laundering Cases, Only for Exceptional Situations.

  Case-Laws - AT : Coram non-judice - Sufficient safeguard has been provided and looking to the nature of proceedings, cross examination cannot be permitted as a rule rather it can be as an exception. A case of exceptional nature is not made out herein. - AT
  Visit to Get Source

  ---

Central Excise

• Court Rules Interest on Refunds Starts from Initial Claim Date, Not Final Submission, per Sections 11-B, 11-BB.

  Case-Laws - HC : Interest on delayed refunds - inordinate delay and latches on the part of the respondent - The respondent completely misdirected itself in coming to the erroneous conclusion that the period of three months would start running from the date of the final submission made by the petitioner and not from the date of submission of the refund claim and this finding, which is not only contrary to the provisions of Section 11-B and 11-BB of the said Act of 1944, but also the circular dated 01.10.2002 - HC
  Visit to Get Source

  ---

• Tuticorin Unit CENVAT Credit Issue: No Duty Demand Confirmation u/s 11A(1); Penal Provisions Not Invoked.

  Case-Laws - AT : CENVAT Credit - duty paying documents - supplementary invoices issued by their Tuticorin unit - suppression of facts or not - It is seen that the demand of duty on the Tuticorin unit was not confirmed by invoking proviso to Section 11A(1). Moreover, though the penal provision of Section 11AC was operative during the period May, 1997 to June, 2000 but the same was neither invoked in the show cause notice nor confirmed in the adjudication order dated 30.03.2017. With this undisputed fact, it is absolutely clear that the duty paid by the appellant is against the duty demand made from the Tuticorin unit for which there is no charge of suppression of fact, fraud, collusion or wilful mis-statement, etc. exist and there was no adjudication on the same - AT
  Visit to Get Source

  ---

VAT

• High Court Rules Porridge, Including Instant, Exempt from VAT and Sales Tax; Tribunal's Denial Overturned.

  Case-Laws - HC : Classification - Porridge / Daliya (cracked wheat) - The Act does not make any distinction between the normal porridge and instant porridge, and the finding arrived by the Tribunal is a fallacy. The intention of legislature was clear that exemption from tax has to be given to the product Porridge whether it was instant Porridge or normal Porridge i.e. Daliya (cracked wheat). - The Tribunal was not correct to read in between and deny the benefit to the assessee as granted by the taxing statute. - HC
  Visit to Get Source

  ---

• Court Invalidates Assessment Order for Ignoring Assessee's Reply; Statutory Requirements Not Met.

  Case-Laws - HC : Validity of assessment order - Reply submitted by the assessee not considered - Though a show cause notice was issued, there is nothing that is articulated in the impugned assessment order to show that the reply was considered. As there is no mention about the reply, this Court is of the considered view that the statutorily imperative requirement does not stand satisfied in the case on hand qua impugned assessment order and that calls for interference. - HC
  Visit to Get Source

  ---

• Saree, patta, dhoti, and gamuchha classified as textile products under VAT and Sales Tax laws for tax purposes.

  Case-Laws - HC : Classification of goods - SAREE, PATTA, DHOTI and GAMUCHHA - When “saree, patta, dhoti, gamuchha” are considered, they are the products of “textile”. They do not lose essential characteristics of fabric. Thus, the expression “textile products including cotton fabrics and ready-made garments” is wide enough to take into its sweep the goods in question. - HC
  Visit to Get Source

  ---

Case Laws:

• GST

• 2022 (12) TMI 1041
  Cancellation of GST registration of petitioner - it is alleged that the appellant was a non-existing dealer - demand of late fee - HELD THAT:- Admittedly, the provision deals with a person, who fails to furnish the returns either under Section 39 or Section 45 or Section 44. In the instant case, the revenue does not state that the appellant failed to furnish its return within the due date. The reason for non-furnishing the return is cancellation of the registration on the ground that the appellant is a non-existing dealer. This order was set aside by the appellate authority holding that the order was passed on a factually incorrect premise. If that be so, the appellant cannot be penalised by demanding late fee. In the facts and circumstances of the case, Section 47 does not stand attracted. The demand of late fee from the appellant @ Rs.5,000/- per return is without jurisdiction and not tenable in the eye of law. It is pointed out by the learned Advocate appearing for the official respondents that unless appropriate direction is given to the concerned respondent, the appellant will not be able to electronically file its return. In the light of the above, the following directions are issued - Petition disposed off.

  ---

• 2022 (12) TMI 1040
  Classification of manufactured goods - preliminary ground on which the show cause notice was challenged is by contending that the authority has pre-decided the issue and the show cause notice is pre-meditated and it is not a show cause notice and consequently no useful purpose would be served in giving reply by the appellants - HELD THAT:- On going through the proceedings of the assessing officer dated 26 th September, 2022 it prima facie appears to be an order and the manner of issuing show cause notice has not been rightly understood by the authority. Partly the appellants have to be blamed because the appellants for the query raised by the authority has misconstrued the scope of the query and proceeded to make elaborate factual submissions as well as relied upon several decisions of the Hon ble Supreme Court and the High Courts. If the appellants had restricted their reply only to the extent query raised, this problem could have been averted. Thus, not only the authority committed a mistake in proceeding to reject all the contentions and then issued the show cause notice, equally the appellants also committed a mistake in mentioning facts which were not required to be done pursuant the query raised by the authority. The entire proceedings have to be redone in an opposite manner. We are conscious of the fact that if the matter is remanded back it will be dealt with by the very same officer but, however, we are confident that the very same officer will have an open mind and issue a show cause notice in a proper manner giving adequate opportunity to the appellants to submit their reply and it is thereafter the show cause notice has to be adjudicated. The manner in which the authority has proceeded to issue the notice dated 26 th September, 2022 does not satisfy the legal requirements. Appeal allowed.

  ---

• 2022 (12) TMI 1039
  Refund claim for excess payment of tax - HELD THAT:- Though there were two issues involved before the learned Appellate Authority, one was whether the recipients of services or goods can apply for refund claim for excess payment of tax or not and this issue was held in favour of the petitioners by the learned Tribunal. Another issue was whether the building purchased by the petitioners from its purchaser, namely M/s. Eveready Industries Limited is taxable under the CGST Act or not and on this issue learned Appellate Authority has held against the assessees/petitioners by elaborate discussion in its order with cogent reasons. There are no reason to interfere with the aforesaid impugned order - this is not a case where the impugned order is without jurisdiction or there is violation of principle of natural justice or there is any procedural irregularity in the matter and/or Constitutional validity of any provisions of law is involved even though no alternative remedy is available - petition dismissed.

  ---

• 2022 (12) TMI 1038
  Deposit during search proceedings - whether the cumulative sum of Rs.1,80,10,000/- deposited on behalf of the petitioner- concern, during search proceedings carried out between 16.02.2022 and 17.02.2022, was a voluntary act or not? - HELD THAT:- The violation of the safeguards put in place by the Act, Rules and by the Court, to ensure that unnecessary harassment is not caused to the assessee, required adherence by the official respondents/revenue, as otherwise, the collection of such amounts towards tax, interest and penalty would give it a colour of coercion, which is not backed by the authority of law. Failure to follow the prescribed procedure will, as in this case, have us conclude that the deposit of tax, interest and penalty was not voluntary - The reason that the officers of the official respondents/revenue have been asked, perhaps, to have the amounts deposited the day after the search is concluded, is, to also give space to the concerned person to seek legal advice, and only thereafter deposit tax, interest and penalty, wherever applicable, upon a proper self-ascertainment. The aforementioned amounts which were deposited on behalf of the petitioner-concern, lacked an element of voluntariness - the official respondents/revenue are directed to return Rs.1,80,10,000/- to the petitioner-concern, along with interest at the rate of 6% (simple) per annum. The interest will run from 17.02.2022 till the date of payment. The writ petition is disposed of.

  ---

• 2022 (12) TMI 1037
  Refund of ITC - option of either seeking refund or carrying forward the ITC to GST regime - provisional refund order has been issued after processing the refund application - HELD THAT:- Considering the facts and circumstances of the case, a counter from Revenue is really not necessary. This Court is of the view that the main writ petition can be disposed of by making a simple order after having heard both sides . It is clear from the narrative thus far that the dealer has two options i.e., refund or carrying forward the ITC to GST regime, the dealer in the case on hand, has opted for the former not the latter. The common portal giving dealer the option for choosing former or latter also is now active till 2024. In such circumstances, the dealer cannot be compelled to opt for one of the two i.e., refund or carrying forward the ITC to GST regime. It is after all an option given to the dealer. In the case on hand, the case of writ petitioner dealer stands buttressed by the provisional refund order made by the same sole respondent and issue of what is referred to as FORM-P clearly quantified the entitlement of writ petitioner at Rs.13,36,741/-. This Court has no difficulty in coming to the conclusion that the impugned notice has been erroneously issued and the same deserves to be interfered with / set aside - Petition disposed off.

  ---

• 2022 (12) TMI 1036
  Refund claim - rejection on the ground that they are time barred - Section 54 of the Central Goods and Services Tax Act, 2017 - Exclusion of certain period during Covid 19 pandemic - HELD THAT:- Section 54 of the Central Goods and Services Tax Act, 2017 deals with refund of tax. Section 54(1) states that if a refund is sought of any tax, then an application has to be made before the expiry of two years from the relevant date - The impugned orders make no reference to which category the Petitioner s claims would fall and what would be the relevant date i.e. starting point for limitation period for the Petitioner s claim for refund. For the purpose of ascertaining whether the limitation period in the Petitioner s case stood extended/ protected by the order of the Hon ble Supreme Court as above, first the relevant date for starting of the limitation will have to be established. The factual position as per the explanation to Section 54 as regards the Relevant Date will have to be determined first and then legal position as laid down in the above decisions can be applied - the impugned orders, to the extent of rejection of the refund claims of the Petitioner for the periods from April 2018 to March 2019 and from April 2019 to December 2019, are liable to be quashed and set aside and the applications for these two periods are to be restored to the file of the concerned Assistant Commissioner. The Assistant Commissioner will examine the case of the Petitioner afresh both on the ground of limitation and on merits - Writ petition is disposed of.

  ---

• 2022 (12) TMI 1035
  Refund claim of tax wrongly paid or allowing ITC to the correct party - inadvertent mistake in filling the GST number in the GSTR-1 - seeking permission to rectify the details of the recipient of the service in the form of GSTR-1 - Difficulty in following the Circular as the GST portal did not permit to rectify the defects HELD THAT:- Admittedly, when Rule 97A of the CGST Rules also permits manual filing, restriction in Circular, dated 18.11.2019, seeking refund by electronic mode only may not be proper. The amounts that were paid by the petitioner furnishing the incorrect details cannot be taken as a tax due to the respondents, legally. When such is the scenario, the respondents cannot contend that the claim, if any, of the petitioner, is barred by limitation - it is very clear that the petitioner cannot be compelled to follow the Circular of the year 2019, which debarred the petitioner from manual filing. The petitioner cannot be compelled to do certain things which are impossible to be performed. The respondents cannot retain the disputed amount, that are paid to them, due to inadvertent error while keying the name of M/s.Vodafone Mobile Services Limited, Kandlakoya village, Medchal Mandal, Telangana State - As the Circular of the year 2019 restricts only electronic filing and as the contention of the respondents that the claim of the petitioner is barred by limitation is not acceptable, the respondents cannot retain the amount, which was paid by the petitioner. The Writ Petition is allowed.

  ---

• 2022 (12) TMI 1034
  Cancellation of registration of petitioner - failure on the part of the petitioner to file returns for a period of six months prior to issuance of the show-cause notice - HELD THAT:- The petitioner preferred appeal but it was rejected for the reasons discussed supra. In that view of the matter and as the GST Tribunal has not been constituted as per the provisions of the Act so as to enable the petitioner to pursue his further legal remedies, in the interest of justice, we consider it apposite to allow the writ petition and remit the matter back to the primary authority i.e., 1st respondent to re-consider the case of the petitioner and after affording a personal hearing to him, pass an appropriate order in accordance with law expeditiously but not later than two weeks from the date of receipt of copy of this order. The writ petition is allowed.

  ---

• 2022 (12) TMI 1033
  Maintainability of petition - validity of order of assessment under Section 50 74 of the Rajasthan Goods and Service Tax Act, 2017 - challenge on the ground that these writ petitions have been filed against the order of assessment though the petitioner has an efficacious and alternative statutory remedy of appeal under Section 107 of the Act - flagrant violation of statutory provisions with regard to issuance of show cause notice - violation of principles of natural justice - HELD THAT:- No case of violation of principles of natural justice is made out by the petitioner. It is not that overnight the orders were passed against the petitioner. A detailed inquiry was made against the petitioner. Summons under Section 70 of the Act were issued on several occasions and opportunity was granted to provide information. According to respondents it raises an issue of disputed questions of fact, as the petitioner only submitted partial information and not the complete information and suppressed details of dispatch of diesel. The petitioner has relied upon several judgments not only seeking to raise issue on the merits of the case but also on the allegation of violation of law and violation of principles of natural justice. None of those judgments come to the aid of the petitioner as in view of the peculiar facts and circumstances of the present case where the petitioner was afforded as many as three opportunities of hearing, he failed to file any reply - in the absence of breach of fundamental rights; violation of principles of natural justice; excess of jurisdiction; or a challenge to the vires of the statute or delegated legislation, the writ petition would not be maintainable. We are not inclined to entertain these writ petitions and to go into correctness of the order of assessment and leave this to be dealt with by the appellate authority in the event the writ petitioner choses to avail his right of appeal as provided under Section 107 of the Act - the objection of maintainability of the writ petitions is sustained and the writ petitions are held to be not maintainable, as the petitioner has an efficacious alternative statutory remedy of filing of an appeal. Petition dismissed.

  ---

• 2022 (12) TMI 1032
  Cancellation of GST registration of petitioner - excess Input Tax Credit (ITC) - Opportunity of hearing to the petitioner and/or without assigning any reason thereof - HELD THAT:- This Court directs the respondent No.4, the Superintendent of State Tax, Government of Tripura to consider the explanation submitted to the show-cause notice within a period of 2(two) weeks from the date of receipt of the copy of this order. In any event, if the explanation is not considered and the final orders are not passed, the suspension order shall stand revoked. The writ petition is accordingly disposed of.

  ---

• 2022 (12) TMI 1031
  Seeking grant of bail - fraudulently claiming and utilizing of the Input Tax Credit on the strength of the invoices/bills received without actual receipt of the goods from certain non-existing firms - HELD THAT:- It is evident that the instant bail application has been filed for quashing of the order of condition No.3 passed on 24.09.2021 and at the time of argument before trial court applicant was agreed with condition No.3 therefore trial court directed to deposit 10% of the amount of Rs.7 crores and 7 lacs in the concerned department, failing which, learned Magistrate may issue warrant for arrest. It is also clear from perusal of the order passed by learned Sessions Judge that applicant made prayer before Sessions Judge while arguing the bail application that he was ready to pay the 10% of Rs.7 crores and 7 lacs and learned Magistrate considered his prayer and granted bail. After getting bail, applicant withdrew himself from argument raised before Sessions Judge. The trial court after considering prayer and granted bail with condition. It appears that court has granted bail after considering submission of applicant. The Hon ble Apex Court in his judgement has passed the order in Chhaya Devi Vs. Union of India and another [ 2021 (4) TMI 980 - SC ORDER ] , which are entirely different from the present case as condition has been imposed on prayer of the applicant, hence, the reliance placed by the applicant over Hon ble The Apex Court judgment, is not applicable in the present case. The bail application of the applicant-Mursaleen Tyagi involved in aforesaid case is hereby rejected at this stage.

  ---

• 2022 (12) TMI 1030
  Seeking reference of the dispute to arbitration - Sections 7 and 8 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Insofar as the grievance of the petitioner as regards impugned endorsement dated 10.08.2022 at Annexure-T rejecting its request to file the GST returns by changing the authorized signatory/e-mail and mobile number and make payments on the ground that till July, 2022, respondent No.3 was filing returns and that he had made irregular payments is concerned, the said issue also would necessarily have to be decided by the Arbitral Tribunal during the course of the arbitration proceedings. However, having regard to the undisputed fact that respondent No.3 had filed GST returns till July, 2022 and the GSTIN and user ID stand in his name, without prejudice to the rights and contentions of both parties before this Court, before GST authorities as well as in the arbitration proceedings and for limited purpose of enabling the returns to be filed on behalf of the petitioner firm, it is deemed just and appropriate to permit respondent No.3 herein to file GST returns on behalf of the petitioner - firm, for which necessary papers would be provided by Sri C.N.Raju and Sri P.S.Biju to respondent No.3. The dispute between the parties pursuant to the order hereby stands referred for arbitration to Arbitration and Conciliation Centre. The Arbitration Centre is directed to proceed with arbitration by constituting an Arbitral Tribunal comprising of the sole Arbitrator i.e., Sri V.V.Angadi, retired District Judge, who shall conduct the proceedings at the Arbitration and Conciliation Centre (Domestic International), Khanija Bhavan, Bengaluru - application disposed off.

  ---

• 2022 (12) TMI 1029
  Validity of advance ruling - main plank of argument of petitioner is that even by the date of filing of application before ARA on 15.12.2020, the GST has already cancelled the registration under GST Act of the petitioner - HELD THAT:- Section 98(2) of the CGST/APGST says that authority may after examining the application and records called for and after hearing the applicant or his authorized representative, by order, either admit or reject the application. Thus, the subsection (2) says that after hearing the petitioner or his authorized representative, the authority may either admit or reject the application. However, for admitting the application of the applicant, a qualification is provided in the form of proviso to the said section. The proviso says that the authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions in the said Act - the proper officer under this Act shall have the power to summon any person either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure. Such enquiry referred to in sub-section (1) shall be deemed to be judicial proceedings within the meaning of section 193 and 228 of the Indian Penal Code. Thus, the proceedings conducted by the investigating authority under the provisions of this Act shall be construed as judicial proceedings as per the CGST/APGST Act. Having regard to the legal position that when investigation has already commenced prior to the filing of application, the ARA shall not admit the application as per proviso to sub-section (2) of Section 98, the ARA should not have admitted the application in the instant case and issued its ruling. Therefore, the said order dated 05.03.2020 is vitiated by law - the order dated 05.03.2020 of ARA and order dated 28.09.2020 of the appellate authority are set aside and the petitioner is given liberty to appear before the appropriate authority and submit his explanation and to take all factual and legal pleas that are permissible under law. This writ petition is allowed.

  ---

• 2022 (12) TMI 1028
  Cancellation of GST registration of petitioner - cancellation on the ground that appeals have been filed belatedly - HELD THAT:- This Court is unable to accept to the request of the petitioner for condonation of the intervening delay as it is incumbent upon the petitioner to ensure statutory compliances within the timelines provided. This batch of writ petitions is thus disposed off. Each writ petition has been considered on the strength of the relevant facts that emanate in that matter - Dehors the conclusions arrived at in the case of the respective petitioners, it is made clear that all petitioners are at liberty to seek restoration of registration in accordance with law and learned Standing counsels would also accede to this position. Petitions dismissed.

  ---

• 2022 (12) TMI 1027
  Transitional Input Tax Credit - striking down / reading down the provisions of Section 140(3) (iv) - vested right to pass on credit already accrued as on 01.07.2017 - grant of credit irrespective of the time limits - HELD THAT:- Though several contentions have been urged by both sides in support of their respective claims, it is relevant to state that during pendency of the present petition, the Apex Court in the case of Union of India and another Vs. Filco Trade Centre Pvt. Ltd. another [ 2022 (9) TMI 514 - SC ORDER] , has held that Goods and Service Tax Network (GSTN) is directed to open common portal for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022. It is deemed just and appropriate to dispose of this petition also in terms of the orders and directions issued by the Apex Court - petition disposed off.

  ---

• 2022 (12) TMI 1026
  Refund of unutilised input tax credit - zero rated supplies - non-compliance with the procedure mentioned in para 3.2 of the Circular dated 04.09.2018 by not debiting the amount of IGST of Rs.21,71,74,611/-, which was available in the balance - HELD THAT:- Section 16 of the Act permits registered person to take credit of input tax credit of GST paid on capital goods and input services subject to such conditions and restrictions and in the manner as prescribed in Section 49 of the Act - Rule 89 of the CGST Rules, 2017, deals with application for refund of tax, interest, penalty, fees or any other amount. Sub-Rule (3) of Rule 89 says that where the application relates to refund of input tax credit, electronic credit ledger shall be debited by the applicant by an amount equal to refund so claimed. It is the uncontroverted fact that petitioner debited the amount equal to the refund claim out of credit of the tax amount lying in its electronic ledger. It is not in dispute that the refund claim application was in accordance with section 54 of the Act and the amount equal to the refund claim was debited from the electronic credit ledger in compliance of Rule 89(4) of the CGST Rules. Therefore, the provisions of law and Rules were complied with by the petitioner. Admittedly, the respondent did not issue any deficiency memo within 15 days as provided in Rule 89(4) of the Rules. Furthermore, the appellate authority had accepted the refund claim of the petitioner on merits and the petitioner s entitlement to refund was not in dispute. When the entitlement of the petitioner for refund is not in dispute and the appellate authority has confirmed the claim of the petitioner and the conditions of section 54(3) of the Act and Rule 89(4) of the Rules are complied with, in such facts and circumstances, even if the procedure laid down in the circular for getting refund stands at variance or if it was not observed by the petitioner for nonculpable reasons, the providence and procedure in the circular would not prevail over the statutory prescription under which the right of the petitioner to get refund is established. Even if the procedure of claiming refund, contemplated in paragraph 3.2 of the Circular could not be adhered to, but on the other hand, there was a substantive right of the petitioner created to claim the refund in law, then non-compliance of the procedure of Circular would only amount to irregularity and not illegality. Petition allowed.

  ---

• 2022 (12) TMI 1025
  Detention of goods alongwith conveyance - interplay and inter se application of Section 129 and Section 130 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- It is directed that the respondents shall release the goods and conveyance of the petitioner, confiscated and detained pursuant to the order No. 161 dated 03.05.2022 passed in FORM GST MOV-11, subject to the conditions imposed. The petitioner deposits the amount of tax of Rs. 1,35,216/- - The petitioner deposits the amount of penalty to the tune of Rs. 1,35,216/- - The petitioner furnishes bond to the tune of Rs. 7,51,204/- towards the amount of fine. Application disposed off.

  ---

• Income Tax

• 2022 (12) TMI 1024
  Validity of assessment order - undue haste and failure to give adequate opportunity to the appellant to put forth its submission - HELD THAT:- As we find that the assessment had been completed by the officer with utmost haste without affording a reasonable opportunity for the appellant to put forth its contentions especially when the allegation was one of mismatch . The undisputed facts are that show cause notice was issued on 14th September, 2022 at 6.31 p.m. communicated to the appellant / assessee via email. The show cause notice is an elaborate show cause notice running to more than 18 pages. In the penultimate page, it has been stated that the appellant / assessee has to give his response through online mode by 17.29 hours on 19th September, 2022. At first blush, it appears that the appellant / assessee has five days time to respond but however, when we look at the calendar, we find that the time granted was only two days, as we have to exclude 14th September, 2022, the date of issuance of show cause notice and 17 th September, 2022 and 18th September, 2022 have to be excluded as they are being Saturday and Sunday and especially on 17 th September, 2022, it was an auspicious day where pujas were being celebrated through the State of West Bengal. This would be sufficient for us to set aside the assessment order on the ground of undue haste and failure to give adequate opportunity to the appellant to put forth its submission. The interim reply given by the appellant / assessee has been verbatim extracted in the order and the assessing officer states that the reply of the assessee is not found acceptable. In paragraph 4.5.3 of the assessment order, the assessing officer says that the show cause notice was served on 14th September, 2022 and five days were given to the assessee to submit its reply. As pointed out earlier, the assessee had not been given 5 days time and effectively, they had only 48 hours to submit its reply. With regard to the details regarding the GSTR-1 returns of the other parties is concerned, the assessing officer would state that the portal was kept open. There was nothing on record to indicate that the assessee was put on notice that the portal was kept open and it could do verification so as to reconcile any discrepancy. Thus, we are fully satisfied that there is total violation of principles of natural justice, which would be a good ground to interfere with the assessment order despite an appellate remedy existing over such an order. Appeal is allowed and the order passed in the writ petition is set aside.

  ---

• 2022 (12) TMI 1023
  Maintainability of appeal before High Court - Intimation of demand made u/s 200A - Income Tax liability demanded from bank of the petitioner - mechanism for redressal of grievances - notices issued by the respondent No. 3 u/s 226 (3) of the Income Tax Act calling upon the Jammu and Kashmir Bank, who holds money for and on account of the Assessee, to make the deposit of the outstanding liability standing against the petitioner - HELD THAT:- There was failure on the part of the petitioner to meet the demand and deposit the outstanding tax. Accordingly, Section 226(3) of the Income Tax Act was pressed into service, and a direction was issued to the banker of the petitioner to pay out of the accounts of the petitioner, a sum equivalent to the Income Tax liability standing against the petitioner. The petitioner in this petition is seeking to contest the demand on merits, in that, it is argued on behalf of the petitioner that the entire Tax deducted at source stood deposited, and, therefore, the demand raised by the respondent no. 3 was non-est in the eye of law. Without going into the merits of the demand and adjudicating the disputed question of facts, we are of the view that the petitioner, if aggrieved by the intimation of demand issued by respondent no. 3 under Sub-Section 1 of Section 200A is well within its rights to file an appeal before the jurisdictional Commissioner (Appeals), and cannot straightway approach this Court by invoking its extraordinary writ jurisdiction under Article 226 of the constitution of India. The notices issued by the respondent, no. 3 under Section 226(3) of the Income Tax Act, are dependent on the sustainability of the demand. When a statute provides a mechanism for redressal of grievances, the person aggrieved must go through the mechanism so provided. He cannot be permitted to rush to invoke the extraordinary writ jurisdiction of the High Court under Article 266 of the Constitution of India, moreso when the statutory mechanism itself provides for filing of statutory appeals and revisions. The legal position in this regard is well settled and does not call for any reiteration. We find this petition which is directed against the notices issued by respondent no. 3 under Section 266 (3) of Income Tax Act, not maintainable in the absence of challenge to the intimation of demand issued under Sub-Section 1 of Section 200A. There is inseparable causal connection between intimation of demand under Sub-Section 1 of Section 200A and recovery proceedings under Section 226 of the Income Tax Act. In the presence of subsistence of cause, the effect cannot be effaced or avoided. As observed above, any order passed by the Income Tax Authority under Sub-section 1 of Section 200A is appealable before the Commissioner (Appeals) and, therefore, it is up to the petitioner to work out his remedy or accept the demand. We find no merit in this petition, and the same is accordingly dismissed.

  ---

• 2022 (12) TMI 1022
  Provisional attachment to protect revenue in certain cases u/s 281B - Orders provisionally attaching the subject fixed deposits of the petitioner for a period of six months - allegation was made by FEMA authorities against the petitioner in the proceedings - HELD THAT:- A perusal of the impugned order will indicate that except for stating that there is likely addition of the amount mentioned in the order, no reasons, much less valid or cogent reasons are assigned by the 1st respondent as to how and why he has formed an opinion that it was necessary to provisionally attach the fixed deposits of the petitioner for the purpose of protecting the interest of the revenue. The requirements and parameters preceding passing of a provisional attachment order came up for consideration before the Apex Court in the case of Radha Krishan Industries case [ 2021 (4) TMI 837 - SUPREME COURT] In the light of existence of a legal mandatory pre-requirement and precondition of recording of formation of opinion which is in pari materia with reasons to believe in Section 281B of the I.T.Act, it was incumbent upon the 1st respondent to arrive at his own satisfaction and not borrowed satisfaction by proper application of mind and consequently, the impugned order which is bald, vague, cryptic, laconic, unreasoned and non-speaking order deserves to be set aside, particularly having regard the undisputed fact that except for stating that he was of the opinion that it was necessary to attach the fixed deposits for the purpose of protecting the interest of the revenue, no other reasons have been assigned by the 1st respondent in the impugned order. A perusal of the impugned order will also indicate that there is no finding recorded as to why a provisional order of attachment had to be passed against the petitioner; it is significant to note that there is no finding recorded by the 1st respondent that the petitioner was a fly by night operator from whom it was not possible to recover the likely demand. The impugned order also does not state that the petitioner was either a habitual defaulter nor that he was not doing any business at all or that the petitioner did not have sufficient funds to satisfy the demand. In other words, in the absence of any reasons as to why and how the demand would be defeated by the petitioner, mere apprehension that huge tax demands are likely to be raised on completion of assessment was not sufficient to constitute formation of opinion and existence of proximate and live link for the purpose and necessity of provisional attachment which implicate the doctrine of proportionality. Under these circumstances also, the impugned order deserves to be quashed. A perusal of the approval also indicates that the same is silent on the aspect of necessity and does not satisfy the jurisdictional precondition / requirement for passing a provisional attachment order. It is trite law that grant of approval should not be a mechanical act and should reflect independent application of mind and this important safeguard of taking prior approval of the Commissioner under Section 281B of I.T.Act is not a mere empty formality and cannot be taken lightly. As stated supra, the approval granted by the 3 rd respondent also reflects complete non-application of mind and is a non-speaking and unreasoned approval which is contrary to law and consequently, the impugned order based on the said approval deserves to be quashed. The contention of the respondents that in addition to the reasons contained in the impugned order, the other material on record comprising of email correspondence, investigation reports, statements recorded during the course of investigation, etc., are sufficient to satisfy the requirements contemplated in law cannot be accepted in view of the well settled legal position as held in Mohinder Singh Gills case [ 1977 (12) TMI 138 - SUPREME COURT] wherein the Constitution Bench held that when the respondent passed the impugned order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in a shape of an Affidavit or otherwise. Orders are not like old wine becoming better as they grow older. Under these circumstances, the said contention of the respondents cannot be accepted. Thus the impugned order passed by the 1st respondent is illegal, arbitrary and contrary to law and the same deserves to be quashed. In the interest of justice, it would be just and appropriate to direct the petitioner not to make payment in the form of royalty or any other form to any entities outside India till conclusion of assessment proceedings by the respondents. However, interest of justice would also be met if the petitioner is reserved liberty to take / obtain overdrafts on the subject fixed deposits and make payments from such overdrafts from the respective banks to foreign entities in accordance with law. During the pendency of the present petition, the 1st respondent passed a draft assessment order under Section 144C(1) of the I.T. Act after concluding the proceedings. It is needless to state that the petitioner would be entitled to contest the said draft assessment order and proceedings pursuant thereto before the respondents.

  ---

• 2022 (12) TMI 1021
  Assessment u/s 153A - Valid approval under Section 153D - Prior approval necessary for assessment in cases of search or requisition - as argued Approving Authority granted approval under Section 153D of the Act in a mechanical manner which vitiated the entire proceedings - HELD THAT:- The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to each assessment year is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment orders under Section 153A. In the instant case, the draft assessment orders in 123 cases, i.e. for 123 assessment years placed before the Approving Authority on 30.12.2017 and 31.12.2017 were approved on 31.12.2017, which not only included the cases of respondent-assessee but the cases of other groups as well. It is humanly impossible to go through the records of 123 cases in one day to apply independent mind to appraise the material before the Approving Authority. The conclusion drawn by the Tribunal that it was a mechanical exercise of power, therefore, cannot be said to be perverse or contrary to the material on record. As the facts are admitted before us, the questions of law framed on the factual issues related to the findings recorded by the Assessing Officer are not open to agitate within the scope of the present appeals being in the nature of second appeal. No substantial question of law arises for consideration before us. Appeals are dismissed being devoid of merit.

  ---

• 2022 (12) TMI 1020
  Reopening of assessment u/s 147 - deemed escapement of income chargeable to tax - principal allegation against the petitioner is that the petitioner, which is a foreign company incorporated under the laws of Mauritius, had sold shares of an Indian company going by the name Bharti Infotel Pvt. Ltd, against which TDS was not deducted - HELD THAT:- There is no dispute that the petitioner/ assessee has not filed its return for AY 2016-2017. Therefore, in our opinion, the objections raised by the petitioner/assessee with regard to the aspects referred to hereinabove, can be dealt with by the AO. We have put this aspect to Ms Sethna; Ms Sethna says that while the matter can be remitted to the concerned AO, she/he should deal with the objections which have been articulated in detail in the writ petition. Apart from anything else, it is Ms Sethna s contention that the broad aspects referred to hereinabove with regard to the fact that the petitioner has in its possession a tax residency certificate, which allows it to take benefit of Article 13 of the DTAA, is a facet which is required to be dealt with by the AO. Given this position taken by the respondents/revenue, as indicated AO will take a decision with regard to whether or not this is a fit case for triggering reassessment proceedings.

  ---

• 2022 (12) TMI 1019
  Deductions u/s 80IB(10) - delayed filing of return - omission on the part of tax consultant due to severe ill health of his son - intimation issued u/s 143 (1) by application of Section 80AC for the reason that the return of income had been filed beyond the time permitted u/s 139 (1) - condonation of delay in filing the application under Section 119 (2)(b) - HELD THAT:- The affidavit of the income tax consultant which has neither been disputed nor controverted by the respondents is sufficient cause for condonation of delay in filing the application under Section 119 (2)(b) of the Act. Besides it is not in dispute that the return for AY 2011-12 was in fact filed by the petitioner albeit 365 days later on 30th September, 2012. That in respect of the other years from 2010-11 to 2013-14 except 2011-12, the income tax authorities have allowed the deduction under Section 80 IB (10) through the petitioner. Substantial injustice would be caused to the petitioner if the order dated 7 th May, 2021 is not set aside. This is clearly a case falling within the phrase genuine hardship . As mentioned above. Technical consideration above cannot come in the way of substantial justice. It is neither an allegation of malafide nor an allegation that the delay has been deliberate. We do not find that the omission to file petitioner s return by the income tax consultant to be an act of negligence. Any person in his situation would have been mentally disturbed. The very fact that not only the petitioner s ITR was not filed in time, there were also 28 others whose return filing was delayed beyond the due date. The authorities should refrain from over analysis which leads to paralysis of justice. We are, therefore, of the view that the impugned order dated 7th May 2021 deserves to be set aside and is hereby set aside. The income tax authority to act accordingly and consider the claim for deduction under Section 80 IB(10) for AY 2011-12 made by the petitioner in accordance with law, as if there was no delay in filing the return. The authorities under the DTVSV Act also to act in accordance with the said findings and amend Form 3 in respect of the amounts to be paid by the petitioner.

  ---

• 2022 (12) TMI 1018
  Maintainability of appeal on low tax effect - Whether case falls within purview of circular of Central Board of Direct Taxes No. 3 of 2018 dated 11.7.2018? - HELD THAT:- In view of the actual extent of the tax effect, it was submitted, the case did not fall within the purview of circular of Central Board of Direct Taxes No. 3 of 2018 dated 11.7.2018 - further submitted that unless the appeal is permitted to be revived and appellant review applicant is permitted to submit on the proposed substantial questions of law, serious injustice would cause to the appellant. The aspect that the appeal was disposed by the court on the ground of low tax effect, whereas factually there was no low tax effect and the disposal of the appeal did not fall within the ambit of circular of the Central Board of Direct Taxes in that regard, can be said to be constituting an error apparent on the face of record justifying the review of the order. In the above view, order [ 2018 (7) TMI 2291 - GUJARAT HIGH COURT] is revived and recalled.

  ---

• 2022 (12) TMI 1017
  Reopening of assessment u/s 147 - validity of order as passed u/s 148A - As contended by the petitioner that it was not given an opportunity of hearing as contemplated under Section 148A(b) before passing the impugned order under clause (d) of Section 148A - HELD THAT:- Though the impugned order at Annexure D records that an opportunity of being heard as per provision of Section 148A(b) of Income Tax Act was provided to the assessee with a prior approval by the competitive authority, the advocate appearing for the respondents is not in a position to state whether the said opportunity was granted or not and there is no material on record to show as to an opportunity of being heard is granted to the petitioner, which is mandatory as per Section 148A(b) of the Act before passing of the impugned order under Section 148A(d) of the Income Tax Act, 1961. Under the circumstances, this is a matter which deserves to be remanded on the short question of petitioner not being given an opportunity of being heard. Hence order under Section 148A(d) and Notice u/s 148 is set aside. - Decided in favour of assessee.

  ---

• 2022 (12) TMI 1016
  Reopening of assessment u/s 147 - reason to believe - Reliance on information received through independent sources - Addition towards commission income - HELD THAT:- No merit in the grounds raised by the assessee, since the case of the assessee was reopened based on information received through independent sources by the A.O about unexplained receipts in the bank account. We, therefore, dismiss. Addition towards undisclosed income computed @0.5% of the bank credit entries carried out in the bank account - A.O has estimated the income based on his observation that the inflow and outflow in the bank account are not akin to any business activity but the same are being carried out for the purpose of earning commission, we, therefore, fail to find any infirmity in the finding of the ld. CIT(A) confirming the addition made by the A.O based on facts and circumstances of this particular case. We, however, like to make it clear that our decision in confirming the finding of ld. CIT(A) of estimating commission income @0.5% of inflow and outflow of funds in the bank account should not be taken as a precedent in other similar cases as this is purely based on the facts of the instant case. Therefore, Ground Nos.3 4 raised on merits are dismissed.

  ---

• 2022 (12) TMI 1015
  Revision u/s 263 - Eligibility of deduction u/s 80G - Deduction u/s 80G for which no evidence in support of payment of donation is produced to ascertain its veracity AND Deduction u/s 80G on account of CSR expenses which is not allowable in terms of Explanation to section 37 of the Act and is required to be added back in the computation of income - HELD THAT:- We note that assessee has rightly claimed deduction of CSR expenses u/s 80G of the Act, more importantly, in the light of the fact that it has suo moto added back the amount of CSR expenditure while computing the income under the head income from business. There is no express provision u/s 80G which prohibits allowance of CSR expenses in the form of donation to approved trust except under two instances referred in section 80G(2)(iiihk) and (iiihl) for contribution to Swacha Bharat Kosh and Clean Ganga Fund respectively. Explanation 2 to section 37(1) which denies deduction for CSR expenses by way of business expenditure is applicable only to the extent of computing business income under Chapter IV-D and it cannot be extended or imported to CSR contribution which was eligible for deduction under Chapter VI. Thus in our considered understanding, donation made by the assessee on account of CSR expenses to a trust which is duly registered u/s 80G(5)(vi) is allowable as deduction u/s 80G - Having so held, which is also fortified by the decision of JMS Mining Pvt. Ltd [ 2021 (7) TMI 907 - ITAT KOLKATA] we find that ld. PCIT has not been able to make out a case on the issue raised by him that the order of ld. AO is erroneous in so far as prejudicial to the interest of the revenue. Deduction u/s 80G for donation made to Ramkrishna Mission Ashram, ld. PCIT took an adverse view for want of donation receipts and certificate of registration of the donee. Assessee has furnished all the relevant documentary evidences to substantiate its claim which ld. PCIT has failed to consider himself. As already noted above, we do not ascribe to the action taken by the ld. PCIT on this issue also. As in the case of DG Housing Projects Ltd [ 2012 (3) TMI 227 - DELHI HIGH COURT] held that in cases of wrong opinion for finding on merit, the CIT has to come to the conclusion and himself decide that order is erroneous, by conducting necessary enquiry, if required and necessary before the order u/s 263 of the Act is passed. In such cases, the order of the AO will be erroneous because the order passed is not sustainable in law and the said finding must be recorded by CIT who cannot remand the matter to the assessing officer to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the order/enquiry made is erroneous. This can happen if an enquiry and verification is conducted by the CIT and he is able to establish and show the error or mistake made by the AO, making the order unsustainable in law. Both on facts and applicable law along with documentary evidences placed on record and judicial precedents relating to the issues raised by the ld. Pr. CIT in invoking the revisionary proceedings, we have no hesitation in quashing the revision order passed by the ld. Pr. CIT u/s 263 of the Act. Accordingly, grounds raised by the assessee are allowed.

  ---

• 2022 (12) TMI 1014
  Addition u/s 69A/68 - unexplained credit - Onus to prove - CIT(A) treated the addition as unexplained money u/s 69A and confirmed the addition - HELD THAT:- Section 68 of the Act deals with unexplained Credit in the books of the assessee and section 69A of the Act deals with unexplained money, bullion, jewellery or other valuable article . Both are entirely different. Though the AO has not mentioned the section 68 of the At in his order, the very fact that he calls it unexplained credit and not unexplained money as done by the ld. CIT(A), while he invoked section 69A of the Act, it proves that the AO invoked section 68 of the Act. We find merit into the contention of assessee that there is no power conferred upon the ld. CIT(A) to assess a particular item under different provision of the Act what the AO had done without giving a specific notice to the assessee regarding such action. Law does not permit for such change of provision of law. As per section 250 of the Act, the ld. CIT(A) is empowered to make further inquiry as he thinks fit or may direct the Assessing Officer to make further inquiry and report to the ld. CIT(A). As per section 251(1)(a) of the Act, in appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment, but there is no such power provided by the law that ld. CIT(A) could change the provision of law qua the item of which assessment was made. Therefore, in the absence of such power, CIT(Appeals) could not have treated the addition made under section 69A of the Act. Therefore, the addition made by the ld. CIT(A) under section 69A of the Act is liable to be deleted. AO found credit in the bank statement and the assessee s husband Shri S. Sekar has furnished confirmation by way of duly notarized affidavit, the assessee has discharged the onus cast upon her. On perusal of the orders of authorities below, both the AO and the CIT(A) failed to discharge their onus by getting the details from the bank under section 133(6) of the Act. Considering the entire facts and circumstances of the case, the addition made by the ld. CIT(A) under section 69A of the Act is deleted.Appeal filed by the assessee is allowed.

  ---

• 2022 (12) TMI 1013
  Revision u/s 263 - Deduction u/s 80P - deducting proportionate amount of interest expense while computing taxable interest from the nationalized banks - HELD THAT:- Interest income received from Nationalized Bank is not eligible for deduction u/s. 80P - In the Case of State Bank of India Vs CIT [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] wherein it was held that interest derived by depositing surplus funds with bank not being attributable to business carried on by society, cannot be deducted under section 80P(2(a)(i). Hence, ground no. 1 is dismissed. Proportionate amount of interest expenses following in the case of Totagars Co-operative Sales Society Ltd. [ 2015 (4) TMI 829 - KARNATAKA HIGH COURT] wherein it was held that net interest income that is interest income reduced by administrative expenses and other proportionate expenses to said income had to be brought to tax u/s 56. Assessee is entitled for deduction of proportionate expenditure which it has incurred and the same needs to be calculated by the Assessing Authority. We therefore deem it fit to remit the matter back to the file of the AO, who will examine the case of the assessee and quantify the proportionate expenditure and pass appropriate orders by giving due opportunity to the assessee. Therefore we partly allow this ground of appeal.

  ---

• 2022 (12) TMI 1012
  Revision u/s 263 by CIT - justification for claim of deduction u/s. 54B and also conditions required to be fulfilled to claim deduction under 54B - HELD THAT:- Though the A.O. asked the assessee to justify the deduction claimed in computation of capital gain along with supporting evidences through notice issued u/s. 143(2) of the Act and the assessee made simple reply without proper evidences and nature of cultivation or any agricultural income derived from the above lands in any other previous assessment years. Thus in our considered opinion, the Assessing Officer has not made necessary inquiry before allowing deduction u/s. 54B but grossly allowed claim made by the assessee. Section 54B of the Act is not applicable, if the land was not used for agricultural purposes in the two years preceding the date of transfer. Thus without applications of the provisions of law, the assessing officer has granted the relief to the assessee which otherwise the assessee is not eligible for the claim of deduction u/s. 54B of the Act. PCIT has invoked the provisions of Section 263 thereby set aside the erroneous assessment order passed by the Assessing Officer and directed the A.O. to pass a fresh assessment order, after allowing adequate opportunities to the assessee in accordance with law following the prescribed procedure and duly examining the issue of allowability of deduction u/s. 54B of the Act. We do not find any infirmity in the order passed by the ld. PCIT - Decided against assessee.

  ---

• 2022 (12) TMI 1011
  Revision u/s 263 - grant of deduction u/s.80P by the AO in respect of interest income earned from other credit cooperative societies or Nationalised banks led to the passing of erroneous assessment orders prejudicial to the interest of the Revenue - HELD THAT:- Coming to the cases of eligibility of deduction u/s.80P(2)(d), the respective assessees are Cooperative credit societies engaged in providing credit facilities to its members. The ld. PCIT has held the assessment order to be erroneous and prejudicial to the interest of the Revenue only on the ground that the claim of deduction u/s.80P on interest income was not in order. As observed that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessees are also Co-operative society registered. Similar view has been taken by the Pune Benches of the Tribunal in several cases including The Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT [ 2022 (12) TMI 959 - ITAT PUNE] Pune Benches of the Tribunal in series of decisions have held that the assessees are entitled to deduction u/s.80P(2)(a)(i)/80P(2)(d) in respect of interest income, we hold that the impugned orders cannot be sustained. All the orders are, therefore, overturned. All the appeals are allowed.

  ---

• 2022 (12) TMI 1010
  Unaccounted income u/s 68 - unexplained share capital and share premium - unaccounted income of the appellant assessee company from Share Capital and Share Premium raised - HELD THAT:- Assessee has successfully discharged its primary onus by explaining the source of share capital and share premium received during the year. In the remand report, AO has confirmed that all the investor companies were PAN holders and has filed the returns regularly. No cash was found to be deposited in the bank accounts maintained by the investor companies. All the companies are regularly filing returns with the Registrar of Companies. Books of account are regularly maintained and duly audited. Companies had sufficient funds and decision of investment was made by Board of Directors. AO has also stated that statement of the director was verified from information contained in paper-book in respective assessment. As observed by the AO that transactions and credit of capital including premium are found in order and there is no deficiency in supporting evidence. The remand report of AO is loud and clear that the source of share capital and share premium has been successfully explained to the best possible extent by the assessee furnishing all evidences and none of them were found to be incorrect and no defect has been pointed out. We fail to find any justification in the finding of ld. CIT(A) confirming the action of the AO making addition u/s 68 - Decided in favour of assessee.

  ---

• 2022 (12) TMI 1009
  TDS u/s 194I - payments made to various members of the society - disallowance u/s 40(a)(ia) - Assessee had made certain payments in respect of compensation for alternative accommodation given to various members of the Housing Society under the development agreement made with the society and the members - HELD THAT:- We find that issue in dispute is squarely covered by the decision of this Tribunal in assessee s own case[ 2022 (4) TMI 1482 - ITAT MUMBAI ] as held that payments made by assessee under no circumstances can be construed to be coming within the meaning of Rent as provided under section 194I. Thus we are of the considered opinion that compensation paid by the assessee to the tenants towards alternative accommodation not being in the nature of rent as defined in section 194I, there is no requirement for deduction of tax under the said provisions. Therefore, the disallowance made under section 40(a)(ia) of the Act cannot be sustained - Appeal file by the assessee is allowed.

  ---

• 2022 (12) TMI 1008
  Penalty u/s 271AAB - Validity of notice issued u/s 274 - whether the notice issued u/s 274 r.w.s. 271AAB of the Act suffers from fatal error and technical defect thereby not providing an opportunity to the assessee to plead his case? - HELD THAT:- For levying penalty u/s 271AAB AO needs to primarily issue notice u/s 274 of the Act so for initiating proceedings u/s 271AAB. From Notice issued to the assessee we find that there is no mention about various conditions provided u/s 271AAB - AO has very casually used the proforma used for issuing notice before levying penalty u/s 271(1)(c) of the Act for the concealment of income or furnishing of inaccurate particulars of income. Except mentioning the section 271AAB of the Act in the notice, it does not talk anything about the provisions of section 271AAB. Therefore, certainly such notice has a fatal error and technically is not a correct notice in the eyes of law because it intends to penalize an assessee without spelling about the charge against the assessee. Respectfully following the judgement of decision of R. Elangovan [ 2018 (4) TMI 1553 - ITAT CHENNAI] and Ravi Mathur [ 2018 (6) TMI 1128 - ITAT JAIPUR] wherein the matter written in the body of the notice issued u/s 274 of the Act does not refer to the charges of provision of section 271AAB of the Act makes the alleged notice defective and invalid and thus deserves to be quashed. Since the penalty proceeding itself has been quashed the impugned penalty stands deleted. Thus the assessee succeeds on legal ground challenging the validity of notice issued u/s 274 r.w.s. 271AAB of the Act. - Decided in favour of assessee.

  ---

• 2022 (12) TMI 1007
  Rectification of mistake u/s 254 - mistake apparent from record - non-consideration of the decision of jurisdictional High Court or of Supreme Court - submitted that ground raised by the assessee challenging the non-issuance of notice under 143(2) was not adjudicated by the coordinate bench of the Tribunal - HELD THAT:- We find that the Hon ble Supreme Court in NTPC [ 1996 (12) TMI 7 - SUPREME COURT] held that legal issue can be raised for the first time before the Tribunal, so long as the relevant facts are on record in the assessment proceedings for that issue. It is evident that the aforesaid decision of the Hon ble Supreme Court was not taken into consideration by the coordinate bench while rendering decision in respect of ground No. 1 raised by the assessee. In ACIT vs Saurashtra Kutch Stock Exchange Ltd.[ 2008 (9) TMI 11 - SUPREME COURT] held that non-consideration of the decision of jurisdictional High Court or of Supreme Court can be said to be a mistake apparent from record , which could be rectified under section 254(2) - Therefore, respectfully following the aforesaid decision in Saurashtra Kutch Stock Exchange Ltd. (supra), we deem it appropriate to recall the findings rendered by the coordinate bench of the Tribunal, in respect of ground No. 1, in the exercise of the power conferred under section 254(2) of the Act. Miscellaneous Applications by the assessee are allowed.

  ---

• 2022 (12) TMI 1006
  Reopening of assessment u/s 147 - addition in respect of shifting of profit - HELD THAT:- As client code has been changed with a few clients which pertain to groups which are apparently related to each other and in one case related to the appellant also cannot be a mere coincidence. Such transactions cannot be held to be genuine as they fail the test of human probabilities. The above finding of the learned CIT(Appeals) is not rebutted by the assessee by placing any contrary material on record. Therefore, see no reason to interfere in the order of the learned CIT(Appeals) and the same is affirmed. - Decided against assessee.

  ---

• 2022 (12) TMI 1005
  Capital gain computation - transfer expenses as per Section 48 - Transfer expenses were not incurred wholly exclusively for the purpose of transfer of shares - HELD THAT:- In the present case, the service of M/s Signal Hills has been utilized for sale of share s of private limited company shares exclusively; further the payment has been made by banking channel as against the invoice raised by M/s Signal hills. There is nothing on record to suggest or no material brought on record by the A.O. to suggest that that transfer expenses were not incurred wholly exclusively for the purpose of transfer of shares held by the Assessee in companies M/s. Knowlarity Communications Pvt. Ltd. (Singapore) M/s. Knowlarity Communications Pvt. Ltd. (India). On the other hand the Ld. CIT(A) has partly agreed with the Assessee by not doubting the transaction per se. By following the ratio laid down by the Jurisdiction High Court in the case of Kausalya Devi [ 2018 (4) TMI 1137 - DELHI HIGH COURT] we are of the opinion that, the expenses incurred by the Assessee is allowable transfer expenses as per Section 48 of the Act and both the Lower authorities have committed an error in disallowing the expense incurred by the Assessee. - Decided in favour of assessee.

  ---

• 2022 (12) TMI 1004
  Unexplained deposits in bank account - assessee stated that the money was withdrawn for the purpose of making investment in house property, however, that could not be materialized - CIT(Appeals) has treated 1/3rd of such sum being available for redeposit - HELD THAT:- As undisputedly the assessee had withdrawn out of his bank account a sum of Rs. 16,44,000/-. Out of this amount the assessee has claimed that he had deposited a sum of Rs. 10,96,500/-. Therefore, the authorities below were not justified in confirming the addition to the extent of Rs. 5,48,500/-. Revenue has not brought any material to suggest that the money as withdrawn by the assessee was utilized for any other purpose. Even if it is presumed that 1/3rd of such amount was utilized for house-hold expenses, still the assessee had 2/3rd of such amount. Therefore, Assessing officer was not justified in making the addition of the entire amount and the learned CIT(Appeals) was not justified in restricting the relief to the extent of 1/3rd of the total amount. Assessee appeal allowed.

  ---

• 2022 (12) TMI 1003
  Revision u/s 263 by CIT - unexplained credits/investment - HELD THAT:- Only assessment order is available and no other details have been filed by the assessee, which could indicate that whether any enquiry has been conducted by the Ld. AO regarding the issues raised/referred in the show cause notice issued u/s. 263 of the Act. Perusal of the assessment order shows that the Ld. AO rejected the book results and estimated the profits. Estimation of profit is an exercise, which is confined to the P L account, but if there are any other credits in the bank account or any expenditure debited to the P L account, which are not in the nature of expenditure then necessary enquiry has to be done about such unexplained credits/investment. Under these given facts and circumstances of the case, we find that since the Ld. AO failed to make any such enquiry in this regard, therefore, we do not find any infirmity in the finding of the Ld. PCIT setting aside the assessment orde u/s. 143(3) to be framed afresh considering the finding given in the impugned order. Thus, all the grounds raised by the assessee are dismissed.

  ---

• 2022 (12) TMI 1002
  Revision u/s 263 - order barred by limitation - Whether date of dispatch be regarded as the date of the order? - HELD THAT:- As per the understanding arrived at with the postal department, a person from the said Department visits the Income-Tax Department on a daily basis for collection of posts, and who again provides a receipt to the despatch clerk in token of his acceptance of the article for post. Needless to add that the said record, evidencing the delivery of the posts to the postal department, which acts as the Revenue s agent for delivery of it s communications, etc., and which would be retained only by its dispatch section, is not available. The despatch register also does not bear either the date of delivery to the postal department or the receipt number/date per which it stands delivered thereto. Further, it is not shown that all the Dak of 31/3/2015, which ranges from serial no. 5248 to 5301, was dispatched along with, i.e., only on 07/4/2015, several days later, which could be the case if the person from the postal department indeed did not visit the Income-tax department all this while. Further still, i.e., in case of non-visit of the concerned person from the postal department, which would require suitable confirmation in this regard being issued by the postal department, dak of the intervening days, i.e., 01/04/2015 to 07/04/2015, i.e., five working days later, would also have been dispatched on the same day, i.e., 07/4/2015, besides requiring a confirming statement from the head of the despatch section, on which he is liable to be questioned. The deposition of the despatch clerk, who would not be only staff in that section, so that his absence, assuming so, would not stall matters, may be required to clarify matters. On this being asked by the Bench, Shri Gotru was unable to even state the name of the concerned staff/clerk; rather, stating that it would not be possible for him to do so. What, then, one may ask, is the basis to say that the IO was indeed received for despatch on 31/3/2015, the date on which it is entered in the despatch register a grossly incomplete record, no basis for entry/s in which is shown, with even the identity of the person maintaining the same being conspicuous by its absence, and nothing to exhibit it as an authenticated document, justifying the entries therein. This Bench has recently passed an order in Suresh Kumar Upadhya Sons [ 2022 (7) TMI 123 - ITAT JABALPUR] similarly received by the assessee on 13/4/2017, i.e., 13 days later, was not considered by the Bench as liable to be construed as not made on the date of the order, i.e., 31/3/2017. This is as the date of dispatch (07/4/2017) could not by itself be regarded as the date of the order, even as explained in CIT v. Mohammed Meeran Shahul Hameed [ 2021 (10) TMI 363 - SUPREME COURT] as claimed by the assessee. No other material was brought on record by the assessee, so that the Tribunal held that the presumption of regularity of official acts u/s. 114(e) of the Indian Evidence Act, shall hold. There could be, it explained, several stages before the despatch of an order. We, in view of the foregoing, hold the impugned revision order as not passed on 31/03/2015, so that it is barred by time u/s. 263(2). The same, as well as the ensuing assessment, disputed by the Revenue, accordingly, fail. It is not necessary therefore to travel to the other Grounds of the Assessee s appeal or that by the Revenue, with, as afore-said, the arguments before us being limited to the status of the revision order as a valid order in law in view of the challenge to it being within the time prescribed by law.

  ---

• 2022 (12) TMI 1001
  Penalty u/s 271(1)(c) - addition was made on basis of undeclared short term capital gain for sale of property - observation made by the revenue during search - revised return was submitted and income was declared before issuance of notice u/s 153A - HELD THAT:- In annexure A-21 in search documents, the said property was not in the list. So it cannot be said the incriminating documents. The assessee revised its return and took the benefit of rectification is mistake apparent from the record. The revised return was submitted and income was declared before issuance of notice u/s 153A. As submitted by assessee the whole issue is depicted in a manner that the said income was declared during revised return before finding by the revenue. So, considering the revised return of the assessee there is no concealment of inaccurate particular of income. He relied on the order of the Coordinate Bench of the ITAT Jaipur. [ 2019 (3) TMI 2008 - ITAT JAIPUR] - Further the ld. Sr. DR has not able to produce any contrary judgment related to the submission of the ld. Counsel. Accordingly, the penalty levied by the ld. is quashed. - Decided in favour of assessee.

  ---

• 2022 (12) TMI 1000
  Penalty u/s 271AAB - Non specification of charge - Penalty imposed on undisclosed income - surrender of income during search - As argued AO did not specify clause of section 271AAB of the Act under which the penalty was initiated i.e. whether it is for clause (a) or (b) or which clause (c) of section 271AAB(1) - HELD THAT:- As evident from the show cause notice u/s 274 read with section 271AAB of the Act that the AO was not clear i.e whether it is for the clause (a) or clause (b) or clause (c) of section 271AAB(1) - Where the ld. CIT(A) and the AO failed to note that the surrendered income is not always undisclosed income. In the present case the assessee declared income which includes surrendered income on 16.01.2017. There is no any doubt or question whether the income disclosed by the assessee is undisclosed income in the terms of definition u/s 271AAB(1) of the Act has to be considered. On perusal of the statement recorded u/s 132(4) we observe that the income incriminating materials were found during the search is admitted and the assessee on all occasions has voluntary surrendered income by simply accepting the figure has stated by the search team. CIT(A) and the AO failed to note that the assessee herself has explained the source of income by stating that out of cash surrender during the search at Rs. 50,000/- was withdrawn from the bank account of the assessee and Rs. 1,00,000/- was withdrawn by husband of the assessee and the remaining was past savings. We observe that as per the specific definition of undisclosed income in explanation (c) to section 271AAB of the Act.,the amount of Rs. 2,22,492/- being the cash available as consequences of her saving and gifts on various occasions cannot be considered as undisclosed income and the source of income explained by the assessee herself. In the statement recorded u/s 132(4) of the Act was not disputed or disproved by the AO. Thus grievance of the assessee is accepted as genuine and as such the order of the ld. CIT(A) sustaining the penalty is hereby quashed. - Decided in favour of assessee.

  ---

• 2022 (12) TMI 999
  Disallowance of depreciation in respect of asset given on lease - the lessee has been given only right to use the asset for the terms of the lease on payment of specified lease rent for a lease period of 10 years - HELD THAT:- We find that the coordinate bench of the Tribunal in assessee s own case in Reliance Corporate IT Park Ltd. [ 2019 (6) TMI 1489 - ITAT MUMBAI] while deciding similar issue in favour of the assessee following the ratio of the Hon ble Supreme Court in the case of ICDS [ 2013 (1) TMI 344 - SUPREME COURT] we are of the considered view that the assessee is entitled for depreciation on the leased asset as per provisions of section 32(1) - CIT(A) after considering relevant facts has rightly deleted additions made by the AO towards disallowance of depreciation, hence, we are inclined to uphold the findings of the Ld CIT(A) and reject the ground taken by the Revenue. Transfer pricing adjustment qua the comparables - benchmarking the international transaction pertaining to provision of ITeS services - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected from final list.

  ---

• 2022 (12) TMI 998
  TP adjustment - comparable selection - functional Dissimilarity - HELD THAT:- When an extra ordinary event takes place by way of amalgamation, then that company cannot be considered as a comparable. Companies functionally dissimilar with that of assessee and with huge turnover need to be deselected from final list. Interest on outstanding receivables - as submitted DRP had bench marked the international transaction by taking the Short Term deposit rate of SBI - HELD THAT:- DRP had restricted the charging of interest for the delayed period after allowing the reasonable period of 30 days. Accordingly, the Assessing Officer / TPO was directed to recompute the interest based on delay period. We do not find any error in the said finding recorded by the DRP. Rate of interest, the assessee had raised the alternative argument of applying the Libor plus as the outstanding amount is receivable in foreign currency - In the present case, the receivable from A.E. was Rs.1,47,99,409/-, which is almost 1/8th of the total turnover of the assessee. In view of the above and respectfully following the decision of Kusum Health Care [ 2017 (4) TMI 1254 - DELHI HIGH COURT] we restrict the levy of interest on outstanding receivables to Libor plus 250 points. The other arguments raised by the Revenue supporting the charging of bank rate interest on the short term deposit is left open to be decided in appropriate case. Accordingly, these grounds are partly allowed.

  ---

• 2022 (12) TMI 997
  Income deemed to accrue or arise in India - referral fees earned by Singapore Branch Office - AO proceeded to bring to tax the referral fee treating it as FTS taxable at 10% as per Article 12 of DTAA between India and Switzerland - Whether not taxable in India u/s.5(2) r.w.s. 9(1)(i) - whether the said fee is taxable in India as fee for technical services u/s.9(1)(vii)? - HELD THAT:- As decided in assessee own case [ 2018 (2) TMI 969 - ITAT MUMBAI] referral activity was undertaken outside India and assessee s Mumbai branch (PE) had no role to play in the performance of the referral activity, the referral fee earned by CSDB could not be construed to be attributable to assessee s PE in India and thus, the DRP rightly applied Article 7 of Indo- Swiss Double Taxation Avoidance Agreement (DTAA) and held the same to be non-taxable in India. The aforesaid conclusion of the DRP is hereby affirmed. - Decided in favour of assessee. Addition of taxability of interest income in respect of transaction between two branches of the same legal entity - HELD THAT:- As in assessee s own case for A.Yrs. 2013-14 and 2014-15 [ 2019 (5) TMI 733 - ITAT MUMBAI] decided tax is not deductible from such interest payable by the PE in India to the overseas head office of a foreign bank and there is no question of making disallowance of such interest expenditure by invoking the provisions of section 40(a)(i) - Decided against revenue. MAT computation u/s 115JB - whether the provisions of Section 115 JB of the Act per se would be made applicable to a foreign company? - HELD THAT:- We find that Article 7(1) of the treaty prescribes that profits that were attributable to the PE would be taxable in India. The manner in which the AO had applied the provisions has the effect of not only bringing to tax the profits that are not attributable to the PE but also has the effect of taxing the other items not in accordance with the provisions of other Articles of the treaty. Five items of income earned by CSSB which was sought to be covered by the ld. AO within the ambit of MAT are not included in the books of accounts drawn up by CSMB in India. Once a particular item is not at all included in the books of accounts which are drawn up in India, how can the same be subject matter of applicability of provisions of Section 115JB of the Act. Reliance in this regard is placed on the decision of Apollo Tyres Ltd. [ 2002 (5) TMI 5 - SUPREME COURT] . When the accounts of CSMB do not incorporate the aforesaid five items of income earned by CSSB, the department cannot impose MAT provisions by using the fiction which is contrary to the Banking Regulation Act, 1949. The provisions of Income Tax Act cannot require CSMB to re-write the accounts in a manner different than what is stipulated in the Banking Regulation Act, 1949. Hence, even on merits, the question of applying the MAT to CSSB s income does not arise. Accordingly, the ground No.4 raised by the Revenue is dismissed.

  ---

• 2022 (12) TMI 996
  TP Adjustment - Software development segment - Comparable selection - application of turnover filter of Rs.200 crores - HELD THAT:- Bangalore Bench of the Tribunal in the case of BORQS Software Solutions Pvt. Ltd.[ 2021 (10) TMI 1351 - ITAT BANGALORE] has considered various judicial pronouncements on this issue including that of the Hon ble High Courts wherein divergent views were taken with respect to the application of different filters. It was held by the Tribunal that application of turnover filter is justified on the basis of classification of companies as per the report of Dun and Bradstreet. As regards the specific plea of the learned DR that if turnover of a comparable company is less or more than 10 times the turnover of the assessee, then it cannot be considered as a comparable company, we find this plea was rejected in the case of Northern Operating Services Pvt Ltd. [ 2019 (2) TMI 1707 - ITAT BANGALORE] We direct the AO / TPO to apply appropriate upper turnover filter and exclude above mentioned seven companies from the list of comparables. R Systems International Limited - The issue is restored to the files of the AO / TPO. The AO / TPO is directed to exclude M/s R Systems International Limited, if it is found the said company has prepared financials for the year ending December 2016. It is ordered accordingly. TP adjustment made under the MSS segment needs fresh TP analysis by the TPO. Accordingly, the issues restored to the files of the AO / TPO for conducting fresh TP study analysis in support services segment of the assessee. It is ordered accordingly

  ---

• 2022 (12) TMI 995
  TP Adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected from final list of comparables. Working capital adjustment - HELD THAT:- We Direct the Ld.TPO to delete the (-)ve Working Capital Adjustment computed under the software development segment. Working Capital Adjustment computed under ITES segment, we direct the Ld.TPO to compute the working capital on actuals. Assessee is directed to provide all necessary details for both the segments in order to compute the Working Capital Adjustment on actuals by the Ld.TPO. Recomputation of deduction u/s. 10AA reducing telecommunication expenses from the export turnover - HELD THAT:- Both sides submitted that this issue is no longer resintegra in lieu of the decision of Hon ble Supreme Court in case of HCL Technologies Ltd. [ 2018 (5) TMI 357 - SUPREME COURT] Accordingly, we direct the Ld.AO / TPO to compute the deduction u/s. 10AA of the Act in accordance with the principles laid down by Hon ble Supreme Court in case of HCL Technologies Ltd.(supra). Disallowance of software expenses u/s. 40(a)(i) - HELD THAT:- AO disallowed the expenses by relying in case of Samsung Electronics Co. Ltd [ 2011 (10) TMI 195 - KARNATAKA HIGH COURT] The Ld.AR submitted that this decision has been reversed by Hon ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt. Ltd [ 2021 (3) TMI 138 - SUPREME COURT] we direct the Ld.AO/TPO to verify the invoices raised against which the payments were made by assessee in the light of principles laid down by Hon ble Supreme Court in the above referred case. The Ld.AO is directed to consider the claim in accordance with law by granting appropriate. Belated remittance of PF/ESI - HELD THAT:- As addition deleted by the Ld.CIT(A) by following the decision in case of CIT vs. Sabari Enterprises [ 2007 (7) TMI 169 - KARNATAKA HIGH COURT] and in the case of Spectrum Consultants India (P.) Ltd. [ 2013 (7) TMI 414 - KARNATAKA HIGH COURT] Subsequently, we note that in case of ESSAE TERAOKA PVT. LTD. [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] is followed same decision and deleted the disallowance made.

  ---

• 2022 (12) TMI 994
  Exemption u/s 11 - Receipt of donations - claim of the assessee was rejected on the ground that exemption u/s 11 of the Act is available to a trust which has been registered u/s 12AA and as the assessee is not registered u/s 12AA the authorities treated the assessee as a regular assessee and did not grant exemption u/s 11(1)(d) - HELD THAT:- The expression income for the purpose of Income Tax, includes voluntary contribution received by a trust created wholly or partly for charitable or religious purposes or an institution established wholly or partly for such purposes. Any donation received by any trust or institution has to be treated as income. However, the scheme of Income Tax u/s 11 to 13 of the Act provides a mechanism for assessment of income from property held by a charitable or religious trust. A perusal of Section 11(1)(d) of the Act would indicate that if any voluntary contribution is being received by a trust or institution with a specific direction that such contribution will be part of corpus then, it will be credited to a separate account meant for construction of building or any infrastructure. In other words, it can be treated as a capital contribution towards the corpus of the trust. Perusal of Section 12A of the Act would indicate that before claiming any exemption from taxability of income u/s 11 or 12 of the Act, the assessee should be registered with the Income Tax Department u/s 12A of the Act. Further Section 12AA of the Act provides a procedure for grant of registration. Since the assessee is not having any registration, the grant/non-grant of such registration is not in dispute, therefore, there is no necessity to make reference to Section 12AA If we accept the proposition as canvassed by assessee, then the whole scheme of assessment of charitable institution/trust contemplated in Section 11 to 13 of the Act would become redundant. The arguments of the ld. Counsel for the assessee is that, it is not necessary that a trust/institution should be registered for availing benefit of Section 11(1)(d) of the Act. If an institution has demonstrated that donations were received towards corpus then automatically, it will become a capital receipt which is not taxable. However, we do not agree with these submissions because nowhere in the Act this proposition has been provided. Decided against the assessee.

  ---

• 2022 (12) TMI 993
  TP Adjustment - Comparable selection - assessee has sought exclusion of Motilal Oswal Investment Advisor Pvt. Ltd. primarily on the ground that it is functionally different from the assessee and secondly it does not qualify RPT filter - HELD THAT:- Notably, while examining the functional similarity of the aforesaid comparable in assessee s own case in assessment year 2009-10, the Tribunal had excluded this company as a comparable. However, while deciding Revenue s appeal [ 2018 (4) TMI 1510 - DELHI HIGH COURT] the Hon ble High Court, remanded the issue relating to comparability of this company to the Tribunal for fresh consideration. The reasons being, the Hon ble High Court was of the opinion that the formula of percentage of RPT being equal to expenses paid to related parties divided by total expenditure multiplied by 100 cannot be applied only to one particular entity without applying the same procedure in respect of all other comparables, as, it may lead to a distorted picture. As could be seen from the foresaid observations of the coordinate Bench, assessee s contention that the RPT filter should be applied only with respect to the total expenditure did not find favour with the Bench. Thus, the claim of the assessee that this company was functionally different and also failed the RPT filter was rejected by the Bench. Basic facts relating to the comparability of this company, being more or less identical in the impugned assessment year, respectfully following the aforesaid decision of the co-ordinate Bench in assessee s own case, we hold that Motilal Oswal Advisors Pvt. Ltd. being comparable to the assessee cannot be excluded. IM+Capitals Ltd., formerly known as Brescon Corporate Advisors be excluded from the list of comparables. M/s Keynote Corporate Services Ltd be excluded as functionally different from the assessee. Working capital and risk adjustment - We agree with the assessee that considering the nature of risk undertaken by the assessee as well as the comparables, adjustment in specific cases has to be made to the margin of the comparables on account of risk profile, however, burden is entirely on the assessee to furnish required details regarding the risk profile of the comparables to ascertain the nature of risk being undertaken by the assessee and the comparables. Since, the required details regarding the risk profile of the comparables are not properly gone into either due to lack of details furnished by the assessee or otherwise, we are inclined to restore this issue to the Assessing Officer for considering assessee s claim of risk adjustment after examining the material on record and in accordance with settled legal principles. Needless to mention, the Assessing Officer must provide reasonable opportunity of being heard to the assessee.

  ---

• 2022 (12) TMI 992
  Expenditure on Land Acquisition for Border Out Posts (BOPs) - Expenditure as a part of project cost during the course of business - expenditure for land acquisition and connection charges for electrification at Border Out Post for the client (Ministry of Home Affairs) during execution of Indo Bangladesh Border Fencing work (IBBE ) - assessee was executing the Border Out Post (i.e. BOP) works for the Ministry of Home Affairs (Gol) - as argued AO has admitted that no title of land was executed in the assessee s favour and expenses were incurred on behalf of the third entity i.e. Ministry of Home Affairs thus added the same stating that it is of capital nature and not allowable as revenue nature - HELD THAT:- As evident that the amount incurred for land acquisition and the assessee Company was executing the Border Out Post (BOP) Works under Phase-11 as per MOU signed in between NPCC and MHA (GoI) on Dt. 14.07.2010. Serial No. 17 of MOU clearly state that, Land Acquisition for al l BOPs will be made by NPCC and cost of the land acquisition shall be included in the cost estimates. BSP will provide necessary help to NPCC in land acquisition and serial No.7 of the same MOU clearly mentioned that NPCC shall hand over the BOPs and allied works after their completion to the designated agency nominated by MHA . The expenditure incurred towards land acquisition compensation was part and parcel of the contact agreement and the same was included in the project cost. The expenditure on service connection charges were paid to Tripura State Electricity Board (TSEB), Agartala for border flood lighting works in the state of Tripura as per MOU signed between assessee and MHA (GoI) dt. 30.09.2009 and the estimates of the expenditure were revised in the 22nd/2010 HLEC meeting held on 17.09.2010 vide agenda item No. IBB/9. It is also evident that the assessee has booked the corresponding income against these expenses in its turnover in the profit and loss account during the year under consideration. Hence, the expenditure done on behalf of MHA (GoI) as project cost was not asset creation in the name of the assessee company, and cannot be treated of capital nature. Therefore on the basis of above facts and legal position, we decline to interfere with the order of the ld. CIT(A) in deleting the addition. Appeal of the Revenue is dismissed.

  ---

• 2022 (12) TMI 991
  TP Adjustment - selection of MAM - lower authorities justification in rejecting the Cost Plus Method as the most appropriate method for purpose of benchmarking the international transactions relating to purchase of raw material - HELD THAT:- The ratio laid down in the case of Vishay Components India (P.) Ltd [ 2019 (2) TMI 1449 - BOMBAY HIGH COURT] wherein, it was held that when a particular method is accepted by the Department to determine the arm s length price of international transactions in the absence of change of facts, the Department should benchmark the international transactions adopting the same method as most appropriate method. In the present case also, it is not the case of the Department that there is difference in facts warranting a different view in the current assessment year regarding the selection of the most appropriate method for the purpose of benchmarking the international transactions. We are of the considered opinion that the AO/TPO/DRP was not justified in rejecting the Cost Plus Method adopted by the assessee for the purpose of benchmarking the international transactions in the absence of difference in the facts of the case. Therefore, we remand the matter to the file of the AO/TPO with a direction to compute the arm s length price of the international transactions by adopting the Cost Plus Method as the most appropriate method de novo after affording due opportunity of being heard to the assessee company.

  ---

• 2022 (12) TMI 959
  Deduction u/s 80P(2)(d) denied - interest earned deposits kept with Goa State Co/op. Bank Ltd . - HELD THAT:- The Pune Bench in Rena Sahakari Sakhar Karkhana Ltd. [ 2022 (1) TMI 419 - ITAT PUNE] held that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessee is also a Cooperative society registered. Ergo, respectfully following the decision of the Division Bench, we overturn the impugned order and direct to grant deduction u/s.80P(2)(d) on the amount of interest earned from Co-operative Banks. Appeal allowed.

  ---

• Benami Property

• 2022 (12) TMI 990
  Benami transaction - joint Hindu family of late karta possessed several immovable properties at Chennai, Madurai and Kumbakonam, apart from the properties owned in Malaysia - Entitlement to legal heirs of late karta of JHF - After the death of plaintiff s father, first defendant started managing the joint family properties in India and in Malaysia and was maintaining the entire accounts - Whether the suit properties are the joint family properties or absolute properties of late P.L.Ramanatha Chettiar ? - HELD THAT:- From this Will, it is clear that the interest in the partnership business and the properties movable and immovable, were bequeathed to his sons and daughters. There is absolutely no mention about the availability of properties which were acquired by him from his ancestors. It is a Will having no description of the properties to be shared. Similarly in Ex.D4 Will, there is no description of the properties sought to be disbursed. Through Ex.D11, whatever the properties possessed by L.P.L.Palaniappa Chettiar, were bequeathed to his sons and the legal heirs of the deceased son. Grievances of the plaintiff is that the first defendant has not acted as per the conditions/clauses in the Will - Because of the first defendant s indifferent attitude, the second defendant, their mother, had to borrow heavy loan to celebrate her marriage. She was not provided with the customary gifts and presents from time to time as per the Chettiar Community. Marriage expenses, gifts and dowry were not properly taken care. Rs.2,00,000/- and jewelleries were also not given. Plaintiff s claim that the first defendant had not acted in compliance to the conditions of the Will is one thing, and the challenge made to the very execution of the Will on the ground that the suit properties are ancestral joint family properties and therefore, the Will executed by their father P.L.Ramanathan @ P.L.Meenatchi Sundaram will bind only in respect of his share and will not extend to whole of the properties is another thing. There is unimpeachable evidence to show that share in item nos.1 and 2 of the suit properties was bequeathed to plaintiff s father P.L.Ramanathan @ P.L.Meenatchi Sundaram through Ex.D11 Will. We have also seen that the properties bequeathed under D11 Will were self acquired properties of L.P.L.Palaniappa Chettiar . When the self acquired property of an individual is bequeathed to his son, son acquires the property only as self acquired property and not as ancestral property. As relying on GOVINDBHAI CHHOTABHAI PATEL AND ORS. VERSUS PATEL RAMANBHAI MATHURBHAI [ 2019 (9) TMI 1681 - SUPREME COURT] held the self acquired property gifted by a father to his son will not be treated as ancestral property, but only as a self acquired property. Therefore, this Court finds that shares which the plaintiff s father P.L.Ramanathan @ P.L.Meenatchi Sundaram got under the Ex.D11 Will, would be treated as his self acquired property and in respect of his self acquired property, he is entitled to bequeath the property through a Will to his son, namely, the first defendant and the first defendant got the properties as self acquired properties. Therefore, through Ex.P4 Will, plaintiff s father P.L.Ramanathan @ P.L.Meenatchi Sundaram had excluded his wife, plaintiff and second defendant from claiming any share in his properties, especially, item nos.1 2 of the suit properties. Thus, this Court finds that the plaintiff is not entitled to claim share in the suit properties claiming that the suit properties are the ancestral joint family properties and she is a co-parcener. Thus, this issue is answered that the suit properties are the self acquired and absolute properties of late P.L.Ramanatha Chettiar and not the joint family properties. Whether there are and were businesses of the family at Kumbakonam run under the name and style of Palaniappan Bankers and Palaniappa Jewellers and whether the first defendant is liable to account for the profits in the said business ? - Though it is claimed in the pleadings that there was business of family at Kumbakonam run under the name and style of Palaniappan Bankers and Palaniappa Jewellers and the first defendant was liable to account for the provisions in the said business, no evidence is produced by either side to show the running of the businesses. Therefore, this Court finds answer to this issue in negative. Whether the plaintiff is in joint possession of the suit properties ? - Whether the Court Fees paid under the Section 37(2) of Court Fees Act is maintainable ? - The evidence available in this case shows that the plaintiff is not in physical possession of any of the suit properties. She resides in U.S.A. and conducts this case through her power of attorney PW1. There is also evidence to show that there are about 272 residential flats in item no.2 of the suit properties. Therefore, this Court finds that the plaintiff is not in possession of the suit properties and Court fee paid under Section 37 (2) of the Court fees Act claiming to be in joint possession is not correct for issue nos.5 6. Whether sale in the name of the ninth defendant is hit by lis pendens? - Before purchasing this property, it is seen that Exs.D2, D10 paper publications were made in the newspaper. After purchasing item no.2 of the suit properties, 8th and 9th defendants had entered into Ex.D4 agreement for sale. It is now claimed by the 9th defendant that 272 residential units had been constructed in the land. The learned counsel for the 9th defendant submitted that the 9th defendant s interest has to be protected as 9th defendant is a bonafide purchaser for value after taking necessary steps by issuing paper publications. No one objected to the purchase by 9th defendant. Ex.D3 sale deed was executed on 10.01.2008 during the pendency of the suit and therefore, it is no doubt that this sale in favour of the 9th defendant is hit by lis pendens. The right of pendente lite purchaser in item no.2 of the suit properties is subject to the right available to the owner of the property. Accordingly, this issue is answered. Whether the suit is barred for non-joinder of proper and necessary parties ? - Now it is found that the claim of partition in item no.1 of the suit properties by defendants 5 to 7 is barred by the Prohibition of Benami Property Transactions Act, 1988. Therefore, the other legal heirs of P.L.Palaniappa Chettiar are not proper and necessary parties to this suit. Similarly, the sale in favour of the 8th defendant and subsequent construction of flats by the 9th defendant had taken place after the institution of the suit. Therefore, the impleadment of the buyers of the flats is not necessary for the reason that the sale transaction is hit by the principle of lis pendens and therefore, they are not proper and necessary parties. Accordingly, this issue is answered. Whether the suit is barred for partial partition ? - Even as per the admitted evidence of PW1, he claims that there are certain other joint family properties, but they are not shown as suit properties. Even in respect of item nos.3 to 5 of the properties, there is no evidence produced to show that these properties are in possession and enjoyment of the family. The defendants have also not given the details of the properties, which are not included. Therefore, it is held that the suit is not hit by partial partition. Suit barred by limitation - The plaintiff has filed the suit presuming that the suit properties are joint family properties and as a co-owner, she is entitled for partition. She had issued Ex.P5 notice before the institution of the suit. There is no plea of ouster taken by the defendants. She has subsisting right as per Ex.D11 Will. Therefore, this suit cannot be held as barred by limitation. Apart from the claim of partition as co-parcener, the plaintiff is also entitled for partition as per clause 4(g) of Ex.D11 Will. - The executors and trustees, namely, R.M.Thenammai and Valliappan @ Palaniappan @ Sinnavalieppan A/L Valliappa Chettiar have every right to enforce the terms of the Will as intended by the testator. Though this Will is not useful to advance the case of the plaintiff for partition, this Will is certainly useful to enforce her claim under the Will, if the executors fail to exercise their duties, responsibilities and powers. As found that item nos.1 2 of the suit properties are the self acquired properties of the first defendant through Ex.P4 Will executed by his father P.L.Ramanathan @ P.L.Meenatchi Sundaram and therefore, this Court finds that the plaintiff is not entitled for the relief of partition or for that matter any other relief. Since the defendants 5 to 7 s claim is barred by the provisions of the Prohibition of Benami Property Transactions Act, 1988, they are also not entitled for claiming partition of their 3/8 share in item no.2 of the suit properties as a counter claim. The suit as well as the counter claim of the defendants 5 to 7 are dismissed.

  ---

• Customs

• 2022 (12) TMI 989
  Release of goods - undervaluation - Demand of bank guarantee for differential duty on of bills of entry for imports of the Petitioner of concentrates of alcoholic beverages from 1 April 2022 onwards - direction to furnish the bank guarantees for differential duty on imports of the Petitioner s products by loading a specified percentage of the invoice value - HELD THAT:- It is not disputed and cannot be disputed that under Section 18(1) of the Act, the authorities have the power to insist upon security in the form of a bank guarantee while clearing the goods on provisional assessment. This power under Customs Act is the main source of power. Section 18(1) lays down the power to seek security during the provisional assessment. It is also not disputed that if the Circulars structure the power under Section 18(1), it has to be exercised within the parameters of the Circulars issued under the Act. There is a difference between the position pending the investigation by SVB and the position after the investigative findings are reached and supplied to the assessing officer. Once the investigative findings are received, the assessing officer will have to proceed to issue a show-cause notice and take necessary steps as per Section 18(1) of the Act. Therefore, we find no merit in the contention of the Petitioner that the position envisaged in Circular No.5/2016 regarding furnishing of an only bond, without any EDD and security, will continue even after the investigative findings are received and show-cause notice is issued. The position after submission of the investigation report by SVB is not covered by Circular No.5/2016, and the contingency is covered under Section 18(1) of the Act and also by sub-clause-6(b)(1) of Clause-3 of Circular No.38/2016. Sub-clause- 6(b)(1) of Clause-3 of Circular No.38/2016 speaks of a 100% of bank guarantee. No position is shown to us that after the SVB submits an investigation report, estimates the differential duty, and records a finding that there has been undervaluation, the power under Section 18(1) of the Act to demand security for differential duty is taken away. Having received the findings from the SVB that the Petitioner is undervaluing its import from the related party and differential duty has been estimated at 67.49%, as per the provision of Section 18(1) of the Act read with Circular No.38/2016, bank guarantees to the tune of 100% were correctly insisted upon. There is no error, illegality or lack of power in the Respondents action in insisting upon the bank guarantee with the loading of 67.49% of the invoice value relying on the investigative findings of SVB. No mandamus can be issued to the Respondents to provisionally assess all future imports of the Petitioner till the adjudication is complete upon only furnishing a bond without insisting on furnishing of the bank guarantee - Since we find no error nor lack of jurisdiction for insisting on bank guarantees towards the differential duty, no direction can be issued to the Respondents to return the bank guarantee, which the Petitioner has submitted. Writ petition dismissed.

  ---

• 2022 (12) TMI 988
  Seeking decision of the representation - HELD THAT:- Though various reliefs have been sought in this petition, the learned Counsel for the Petitioner states that the Petitioner will be satisfied at this stage if the direction is given to Respondent No.2- Directorate General of Foreign Trade to decide Petitioner s representation dated 9 August 2021. The learned Counsel for the Petitioner reiterates that representation is not being decided so far. The learned Counsel for the Respondents, on instructions, states that representation would be decided on its own merits as per law within a period of four weeks from today and the decision would be communicated to the Petitioner. Thereupon, it is open to the Petitioner, if the decision is adverse, to take such steps as are permissible in law. Writ petition is disposed off.

  ---

• 2022 (12) TMI 987
  Maintainability of appeal - rejection on the ground of time limitation - appeal filed beyond the statutory period provided - HELD THAT:- Admittedly, the order-in-original is dated 19.07.2012. However, it is the case of the petitioner that the entity, as against which the order had been passed, had been amalgamated with the petitioner and hence, the assessee, N.R.Chemicals Private Limited, ceased to exist on and from 06.05.2011. Admittedly, the order has been served in the name of the erstwhile entity, to its address. The case of the petitioner to the effect that order had come to its notice only when a detention notice had been issued on 12.03.2019 is acceptable. On 19.06.2019, upon request made by the petitioner, the Deputy Commissioner of Customs has supplied a copy of the order-in-original paving the way for the filing of appeal before the first Appellate Authority - the intervening period is liable to be eschewed in the computation of statutory limitation for filing of appeal. Since the order has been received by the petitioner on 19.06.2019 and the appeal has been filed on 20.06.2019, there is, in my considered view, no delay. The impugned order passed by the 2nd respondent on 05.08.2020 is set aside and the appeal is restored to the file of the 2nd respondent to be heard on merits and in accordance with law - This writ petition is disposed off.

  ---

• 2022 (12) TMI 986
  Imposition of penalty under Section 114 of the Customs Act, 1962 - undervaluation - alleged violation of Regulations 11(n) and 11(d) of the Customs Brokers Licensing Regulations, 2013 - HELD THAT:- Section 114 of the Customs Act, 1962 prescribes imposition of penalty on any person who, in relation to any goods, does or omits to do any act, which act or omission would render such goods liable for confiscation under Section 113, or abets the doing or omission of such an act. Unfortunately, in the case on hand, the only allegation is undervaluation of the goods for which the same were held liable for confiscation under Section 113(i) and 113(ia) of the Customs Act. Here, in the case on hand, in the guise of re-determination of value of goods, the Adjudicating Authority has not given any justifiable reasons except adopting the valuation in terms of Rule 6 ibid. after rejecting the FOB value in terms of Rule 8(1) ibid. Rule 8 authorizes the proper officer to reject the declared value when he has the reason to doubt the truth or accuracy of the same and from a reading of the Adjudication Order, there are no reasons brought on record as to the doubts about the truth or accuracy of the value declared in relation to the export of goods. The Customs Broker, in the facts of this case, cannot be fastened with a liability under the Customs Act, more so having alleged a different violation altogether. The imposition of penalty on the appellant / Customs Broker is bad in law - Appeal allowed.

  ---

• 2022 (12) TMI 985
  Imposition of anti-dumping duty - imports of Dimethyl Formamid originating in or exported from Saudi Arabia and China PR - Central Government did not issue the notification for imposition of anti-dumping duty even though three months had expired from the date of publication of final findings - HELD THAT:- Section 9A of the Tariff Act provides that where any article is exported by an exporter or producer from any country or territory to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose anti-dumping duty not exceeding the margin of dumping in relation to such article. It is under rule 17 of the 1995, Anti-Dumping Rules that the designated authority is required to, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit its final findings to the Central Government - Under rule 18, the Central Government may, within three months of the date of publication of the final findings by the designated authority under rule 17, impose by a notification in the Official Gazette, upon importation into India of the article covered by the final findings, anti-dumping duty not exceeding the margin of dumping as determined under rule 17. In the present case, it is not in dispute that the final findings of the designed authority were published on 11.01.2021. In the appeal, the appellant has stated that an office memorandum was not issued by the Central Government. Learned counsel appearing for the Central Government has also not stated or placed such an office memorandum. The issue that arises for consideration is whether a presumption can be drawn that the Central Government has taken a decision not to impose anti-dumping duty as a decision was not taken within three months by the Central Government from the date of publication of the final findings by the designated authority. On a consideration of the provisions of the Tariff Act and the 1995 Anti-Dumping Rules, it is clear that a presumption can safely to be drawn that the Central Government, by keeping silent for a long period of time, shall be deemed to have taken a decision not to impose anti-dumping duty and such a case would also fall in the category of cases where an office memorandum has actually been issued conveying the decision of the Central Government not to impose anti-dumping duty. It follows from the aforesaid discussion is that it has to be presumed that the Central Government has taken a decision not to impose anti-dumping duty despite a recommendation having been made by the designated authority for imposition of anti-dumping duty - The matter has, therefore, to be remitted to the Central Government for taking a decision on the recommendation made by the designated authority. It has been held by this Tribunal in M/S APCOTEX INDUSTRIES LIMITED AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 2022 (11) TMI 1096 - CESTAT NEW DELHI] and CHEMICAL AND PETROCHEMICALS MANUFACTURES ASSOCIATION (CPMA) VERSUS UNION OF INDIA AND OTHERS [ 2022 (12) TMI 830 - CESTAT NEW DELHI] that reasons have to be recorded by the Central Government when it proceeds to form an opinion not to impose any anti-dumping duty despite a positive recommendation made by the designated authority in the final findings for imposition of anti-dumping duty. Appeal disposed off.

  ---

• 2022 (12) TMI 984
  Non-imposition of anti-dumping duty - imports of colour coated/pre-painted flat products of alloy or non-alloy steel originated in or exported from China PR and European Union - Central Government did not issue a notification for imposition of anti-dumping duty though three months expired from the date of publication of final finding - HELD THAT:- Section 9A of the Tariff Act provides that where any article is exported by an exporter or producer from any country or territory to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose anti-dumping duty not exceeding the margin of dumping in relation to such article. It is under rule 17 of the 1995, Anti-Dumping Rules that the designated authority is required to, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit its final findings to the Central Government. Under rule 18, the Central Government may, within three months of the date of publication of the final findings by the designated authority under rule 17, impose by a notification in the Official Gazette, upon importation into India of the article covered by the final findings, anti-dumping duty not exceeding the margin of dumping as determined under rule 17. Whether a presumption can be drawn that the Central Government has taken a decision not to impose anti-dumping duty as a decision was not taken within three months by the Central Government from the date of publication of the final findings by the designated authority? - HELD THAT:- On a consideration of the provisions of the Tariff Act and the 1995 Anti-Dumping Rules, it is clear that a presumption can safely to be drawn that the Central Government, by keeping silent for a long period of time, shall be deemed to have taken a decision not to impose anti-dumping duty and such a case would also fall in the category of cases where an office memorandum has actually been issued conveying the decision of the Central Government not to impose anti-dumping duty - it has to be presumed that the Central Government has taken a decision not to impose anti-dumping duty despite a recommendation having been made by the designated authority for imposition of anti-dumping duty. The matter has, therefore, to be remitted to the Central Government for taking a decision on the recommendation made by the designated authority. It has been held by this Tribunal in Apcotex Industries [ 2022 (11) TMI 1096 - CESTAT NEW DELHI] and Chemical and Petrochemicals [ 2022 (12) TMI 830 - CESTAT NEW DELHI] that reasons have to be recorded by the Central Government when it proceeds to form an opinion not to impose any anti-dumping duty despite a positive recommendation made by the designated authority in the final findings for imposition of anti-dumping duty. Appeal disposed off.

  ---

• 2022 (12) TMI 983
  Amendment in the shipping bill - legislative design of section 149 of Customs Act, 1962 amenable to stretching beyond that suggested by the phraseology to consider consequences as essential to disposal of requests preferred for amendment - HELD THAT:- The amendment sought by the appellant does not involve change of any of the particulars mandated for inclusion under the authority of section 50 of Customs Act, 1962. Nor is there any plea for alteration of endorsement, if any, made in the shipping bills under the authority of section 51 of Customs Act, 1962. All that the appellant seeks is the substitution of N with Y in these bills and, that too, owing to manual facilitation not available as alternative, solely for the purpose of making shipment particulars accessible to the licencing authority. Cavil of the appellant is that the denial of authorization to alter the option in the impugned shipping bills is improper and discriminatory as several decisions cited supra have held otherwise. The statutorily-mandated inclusions in shipping bills, of any hue, are borne within the regulations for implementation of section 50 of Customs Act, 1962; any other is mere piggyback riding prompted by convenient proximity of transaction of relevance which, in the impugned instances, is the trans-authority seepage of information. The subsequent authority conducts its own post-sanction verification for maintaining the integrity of the scheme without recourse to either the preceding authority or its transactional engagement with exporter. Failure on the part of the appellant to indicate the desired option in the impugned shipping bill has not vitiated the clearance of the goods covered by the shipping bills or of exports having been effected; the only consequence has been the impassability of the data relating to these exports to the electronic space dominated by the authority competent to grant the reward which they claim to be eligible for and which is yet to be determined. It would appear from the contents of the impugned order and the submissions of Learned Authorized Representative that the onus devolving on the applicant to produce documentary evidence of intent to avail the benefit accruing from merchandise exports from India scheme (MEIS) on exports effected by them has drawn sustenance from two public notices issued by the Directorate General of Foreign Trade (DGFT) and without considering the lack of significance therein, by assigning or by implication, to the assessment responsibility, or the gateway positioning, of customs authorities. Neither did the public notices seek to draw upon the statutory power of amendment conferred by the customs statute for regularization within the initial window of opportunity - The amendment, which merely has the consequence of data transference for informed decision making on eligibility for reward by competent authority, should have been permitted unless established evidence exists that the goods were not in conformity with details furnished in the shipping bills. No notice to that effect had been issued to enable refuting of such presumption. Appeal allowed.

  ---

• Corporate Laws

• 2022 (12) TMI 982
  Seeking grant of Regular bail - misuse of cheque discounting facilities - diversion and siphon-off the borrowed funds - fictitious sale of food grain and in creation of accommodation/adjustment accounting entries - section 447 of the Companies Act - HELD THAT:- There is no allegation by the SFIO that during the course of the investigation, the petitioner attempted to destroy evidence or intimidate witnesses, or that she otherwise interfered in the course of investigation - It is apparent that the essence of the allegation against the petitioner is, that being the wife of the main accused Suman Chadha and a director of the company, the petitioner signed various papers, documents and records in her capacity as a co-director, and is therefore an officer who is in default in relation to the affairs of the company within the meaning of section 2(60) of the Companies Act. Despite having the power under section 212(8) of the Companies Act, to arrest the petitioner in the course of investigation, the investigating officer did not arrest the petitioner, by which it can reasonably be inferred that the officer did not have reason to believe that the petitioner was guilty of any offence punishable under the concerned sections of the Companies Act. Even when the report under section 212(12) of the Companies Act was filed, there is nothing on record to show that the investigating officer sought for the petitioner to be remanded to judicial custody - In the opinion of this court, the petitioner s conduct cannot have a worse effect now, than it possibly could have had during the course of investigation, since all the purportedly incriminating evidence and material has already been collected and placed before the learned Special Judge as part of the criminal complaint. The proviso to section 212(6) of the Companies Act cannot be treated as nugatory or dead letter. By way of the proviso, the Legislature has specifically carved-out an exception to the otherwise strict provision for bail, to say that though the twin conditions in section 212(6)(i) and (ii) of the Companies Act must otherwise be satisfied before a person is released on bail, those conditions would not apply inter-alia to a woman. In view of the proviso, it would be anathema to the legislative intent to not grant the benefit of the relaxation to a woman accused. The notion that a person summonsed after cognisance must necessarily be remanded to judicial custody, simply because the allegation relates to a serious offence , must be disabused. Merely because the offence is cognizable and non-bailable, it is not essential that an accused must be taken into custody when the charge-sheet is filed. Bail, it is trite to say, is the rule and not the exception. Arrest at the hands of the investigating officer and remand by the court must not be done on a whim or without reason. The petitioner is entitled to benefit of the proviso to section 212(6) of Companies Act - the court is persuaded to admit the petitioner to regular bail, subject to the conditions imposed. Application allowed.

  ---

• Law of Competition

• 2022 (12) TMI 981
  Issuance of notice under Section 230(5) of the Companies Act - It is submitted that in view of the sole Financial Creditor having approved the scheme, there was no occasion for issuing any notice under Section 230(5) of the Companies Act and Adjudicating Authority had ample jurisdiction to dispense the notice under Section 230(9) of the Companies Act - HELD THAT:- The sole Financial Creditor having approved the scheme, the condition as provided in Section 230(9) were clearly met and the Tribunal can very well dispense with the calling of a meeting of creditor or class of creditors. Present is a case where hundred per cent of the Financial Creditor has approved the scheme. The direction of the Tribunal needs to be set aside and the Adjudicating Authority is required to consider the dispensation of the second motion notice in view of the facts of the present case as per Section 230(9) of the Companies Act, 2013. Appeal disposed off.

  ---

• 2022 (12) TMI 980
  Contravention of the provisions of Section 4 of Competition Act, 2002 - it is alleged that several clauses of the agreement which was entered into between the appellant and Respondent No.2 in the present appeal were violative of provisions of Section 4(2)(a)(i) of the Act - Section 53(B) of the Competition Act, 2002 - HELD THAT:- On examination of the provisions contained in Section 26 of the Act it is evident that the CCI is having a very limited jurisdiction to direct for further investigation that too in a case as per Section 26(5) of the Act if the DG recommends that there is no contravention of provisions of Act then Commission shall invite objections or suggestions and thereafter under sub-section (7) of Section 26 of the Act after consideration of objections and suggestions referred to in sub-section (5) further investigation is necessary only then direct for further investigation. Meaning thereby that purport of Section 26 of the Act is that if after investigation DG submits report disclosing therein violation of the provisions contained in the Act, the CCI is required to pass appropriate order. In a case DG submits a closure report and thereafter under sub-section (5) of Section 26 of the Act, after inviting objections, CCI is satisfied, only then under sub-section (7) of Section 26 of the Act, CCI can issue direction for further investigation. Further investigation as per Act is required in a case of closure not in a case where DG has submitted report showing contravention of provisions of the Act by a party/parties. The Regulation 20 describes procedure about the investigation by the DG, whereas Regulation 20(6) empowers the CCI to direct DG for further investigation. However, in view of Section 26 of the Act it can be concluded that Regulation 20 (6) of CCI(General) Regulations, 2009 can be used in furtherance of exercise of jurisdiction under Section 26(7) of the Act which is required to be invoked in a case where DG under Section 26(5) submits report regarding non contravention of the provisions of the Act. In any event taking shelter of Regulation 20(6) of Regulation 2009 CCI was not authorised to pass an order for further investigation and the same cannot be justified - without going into further detail or delving into merit of the case the order impugned is liable to be set aside since the order is primarily passed on the supplementary investigation report submitted by the DG which was conducted on a void order of the CCI. The matter is remitted back to the CCI to pass order afresh on the basis of the 1st DG Report i.e. Report dated 18.03.2016 submitted by the DG - Appeal allowed.

  ---

• Insolvency & Bankruptcy

• 2022 (12) TMI 979
  Initiation of CIRP - Period of limitation - Financial Creditors - existence of debt and dispute or not - Time Limitation - whether the Adjudicating Authority was justified in dismissing the Application filed under Section 7 of the Code as barred by Limitation and also holding that there was no default? - HELD THAT:- The issue of Limitation is to be tested on the touchstone of the ratio of the Hon ble Apex Court in DENA BANK (NOW BANK OF BARODA) VERSUS C. SHIVAKUMAR REDDY AND ANR. [ 2021 (8) TMI 315 - SUPREME COURT] , wherein the Hon ble Apex Court has clearly laid down that Judgement/decree for money or Certificate of Recovery or Arbitral Award in favour of the Financial Creditor , constitutes an acknowledgement of debt and gives rise to a fresh cause of action, provided it is within three years of the default. In the instant case, it is the main case of the Respondent/ Corporate Debtor that the date of NPA is 2009 and hence has to be construed as the date of default . It is also seen from the Balance Sheets that there has been an acknowledgement of liability upto the years 2018-19. The contention of the Learned Counsel for the Respondent that the Restructuring Letters were sanctioned beyond three years of the date of NPA and therefore is barred by Limitation is untenable as at the cost of repetition we hold that as per the ratio of the Hon ble Apex Court in LAXMI PAT SURANA VERSUS UNION BANK OF INDIA ANR. [ 2021 (3) TMI 1179 - SUPREME COURT] the date of default cannot be strictly construed as the date of NPA. The material on record shows that the Corporate Debtor has been consistently acknowledging its debt from 31.03.2010 onwards by way of letters in Restructuring Packages, and also by way of communication the Appellant/Financial Creditor for Restructuring, apart from the liability being shown in the Balance Sheets. The Section 7 Application is not barred by Limitation, and that there is a debt and default, and the facts of the instant case are squarely covered by the ratio of the Hon ble Apex Court in Dena Bank (now Bank of Baroda) - appeal allowed.

  ---

• PMLA

• 2022 (12) TMI 978
  Money Laundering - proceeds of crime - Seeking cancellation of bail of the opposite party namely, Debabrata Halder - HELD THAT:- The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the Court based on available material on record is required. The Court will not weigh the evidence to find the guilt of the accused which is, of course, the work of Trial Court. The Court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad, the words used in Section 45 of the 2002 Act are reasonable grounds for believing which means the Court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt. In VIJAY MADANLAL CHOUDHARY ORS. VERSUS UNION OF INDIA ORS. [ 2022 (7) TMI 1316 - SUPREME COURT] the Hon ble Apex Court was pleased to emphasise on the issue relating to a delicate balance between the merits of appreciation while deciding a case at the stage of acquittal or conviction and an application for bail. For this purpose the phrase reasonable grounds for believing was also emphasized in relation to the material collected by the prosecution at the time of considering the bail application. Considering that the order passed by the Learned Judge, Special (CBI), Court no.1, Calcutta in ML Case No. 11 of 2022 is in violation of the provisions of Section 45 of the PMLA, 2002, I am of the opinion that the said order calls for interference. Accordingly, the order dated 12.04.2022 granting bail to the accused Debabrata Halder is hereby set aside. Application disposed off.

  ---

• 2022 (12) TMI 977
  Money Laundering - proceeds of crime - forbearing respondent from proceeding further on the ground that the respondent is acting beyond the jurisdiction conferred by the provisions of Prevention of Money Laundering Act, 2002 - contravention of the provisions of FEMA - HELD THAT:- Various contentions were raised on either side on the merits of the case and by pointing out to various provisions under FEMA and relevant regulations. We do not want to deal with any issue touching upon the merits of the case by taking the role of the investigation agency. We have to satisfy ourselves as to whether the respondent is acting within the four corners of PML Act and not misusing the powers of investigation. If we are convinced that the investigation taken up by the respondent is within their powers and there is no misuse of powers, we cannot act as a stumbling block in the further progress of the investigation conducted by the respondent. It is left open to the petitioner Company to submit their explanation to the respondent along with all supporting documents and we expect the respondent to proceed further with the investigation within the scope of PML Act. The Apex Court time and again has frowned upon interference into investigations conducted by the Investigation Agency since Courts are not expected to stall investigations, which falls within the exclusive domain of the executive, unless such an investigation is found to be without jurisdiction or there is misuse of power of investigation or such an investigation is an abuse of process of law. There are no ground to interfere with the investigation conducted by the respondent - petition dismissed.

  ---

• 2022 (12) TMI 976
  Coram non-judice - Seeking stay of the proceeding till such time the coram of Adjudicating Authority, as stipulated under Rule 6 (2) of the Prevention of Money Laundering Act, 2002 is constituted - HELD THAT:- The perusal of the reasons given for cross examination and the questions would show that according to the appellant, most of the witnesses named above have not made any incriminating statement against it, yet the appellant prayed for cross examination of those witnesses. Few of them are even involved in alleged money laundering. The allegations are made mainly in reference to the documentary evidence collected by the Department yet ignored by the appellant. It is further a fact that the cross examination has been sought to prove that applicant had no communication for alleged transactions with M/s. DHFL involved in schedule offence rather appellant is not remotely connected with the offence of money laundering. Those common questions have been referred for majority of the witnesses ignoring the documentary evidence to prove it. The cross examination from the witnesses would be in reference to the documentary evidence for which an opportunity has been given to the appellant to contest the notice by filing reply and documents. The application to seek cross examination was filed even before filing reply to the notice along with the documents. It is otherwise a fact that Mr. Avinash Bhosale is connected with the appellant and an accused in the matter to be cross examined to espouse his own cause, cannot be permitted - the cross examination of witnesses sought by the appellant is for the sake of it and to delay the proceedings before the Adjudicating Authority. The principle of natural justice would apply when some real prejudice is going to be caused out of the action of one party. In the instant case, the appellant has failed to reflect as to what prejudice is going to cause to him if the cross examination of witness is not permitted. It is apart from the fact that the material on record shows that the allegations against the appellant are in reference to the documentary evidence which has not been refuted by the appellant by filing reply. Sufficient safeguard has been provided and looking to the nature of proceedings, cross examination cannot be permitted as a rule rather it can be as an exception. A case of exceptional nature is not made out herein. Thus, we do not find any reason to cause interference with the order of the Ld. Adjudicating Authority - Looking to the scope of attachment proceedings, cross examination can be permitted only as an exception and not as a rule, otherwise it may delay the proceedings, resulting in lapse of proceedings and causing serious consequences even against the accused, if they are forced to disclose their defence at a premature stage. Appeal dismissed.

  ---

• Service Tax

• 2022 (12) TMI 975
  Levy of service tax - various charges such as Computer to Computer Linkage charges, Commission on Public Issue and Inter Settlement charges - appellant acting as Stock Broking Company - HELD THAT:- In the light of decision of this Tribunal in M/S ANAGRAM STOCK BROKING LTD VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2018 (10) TMI 641 - CESTAT AHMEDABAD] wherein the present appellant is also one of the appellants, has decided the same issue in their favour - it was held in the case that the allegation of the department that the demat charges collected by the brokers are banking and financial service, hence taxable, also devoid of merit in as much such charges are collected by the Appellant and paid to the depository participants viz. CDSL/NSDL who are authorised to levy such charges under the Depositories Act, 1996. The issue in hand is no longer res-integra - Appeal allowed.

  ---

• Central Excise

• 2022 (12) TMI 974
  Interest on delayed refunds - inordinate delay and latches on the part of the respondent in not processing the refund claims of the petitioner within the prescribed period of three months from the date of receipt of the applications of the petitioner as contemplated under Section 11-BB of the Central Excise Act, 1944 - HELD THAT:- The question with regard to payment of interest on delayed refunds sanctioned beyond the prescribed period of three months from the date of receipt of an application is no longer res-integra in view of the judgments of the judgments of the Apex Court, this Court and other High Courts - Reliance can be placed in the case of M/S. DEE KAY EXPORTS THROUGH ITS PARTNER SH. BALJINDER SINGH, 24, INDUSTRIAL ESTATE, YAMUNA NAGAR (HARYANA) VERSUS UNION OF INDIA AND OTHERS [ 2019 (11) TMI 244 - PUNJAB AND HARYANA HIGH COURT ], where it was held that From the reading of Section 11BB, it is quite apparent that liability of interest relates back to date of filing application and not date of order passed by one or another authority. As the respondents failed to sanction refund within three (03) months from the date of application, thus they are liable to pay interest for the delayed period. It is clear that in the instant case, in the light of the undisputed fact that the respondent has not sanctioned refund within the prescribed period of three months from the date of submission of the refund request by the petitioner, the respondent would be liable to pay interest in favour of the petitioner on the amounts ordered to be refunded in favour of the petitioner - In the instant case, it is an undisputed fact that the respondent did not pass the refund sanction order within the prescribed period of three months and the delay on the part of the respondent in not passing the refund sanction order cannot be attributed or attributable to the petitioner, particularly when the adjudicatory process had to be mandatorily completed within the period of three months. It is significant to note that merely because there were certain deficiencies/lacunae in the refund claim by the petitioner, the said circumstance cannot be relied upon nor made the basis by the respondent in order to contend that it was entitled to pass the refund sanction order beyond the prescribed statutory period of three months. The respondent completely misdirected itself in coming to the erroneous conclusion that the period of three months would start running from the date of the final submission made by the petitioner and not from the date of submission of the refund claim and this finding, which is not only contrary to the provisions of Section 11-B and 11-BB of the said Act of 1944, but also the circular dated 01.10.2002 - Petition allowed.

  ---

• 2022 (12) TMI 973
  CENVAT Credit - duty paying documents - supplementary invoices issued by their Tuticorin unit - suppression of facts or not - HELD THAT:- It can be noted from the Rule 57AE(1)(i) of Central Excise Rules,1994 that Cenvat credit on supplementary invoices can be denied only if duty become recoverable from the manufacturer on account of any non-levy or short levy by reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any provisions of the Act and Rules made thereunder with intent to evade payment of duty. In the present matter the Learned Commissioner in his impugned order observed that the adjudicating authority having jurisdictional over the supplier unit at Tuticorin, has clearly established that the unit at Tuticorin suppressed facts with intent to evade payment of differential duty before the department conducted Cost Audit and unearthed the evasion. As per the observation of the learned Commissioner, the Tuticorin unit of the appellant had short paid the duty by reason of suppression of fact, fraud, collusion or wilful mis-statement, etc. As per Rule 57AE, the Cenvat credit on the supplementary invoice was allowed however, an exception is provided that if at the supplier s end the duty paid which was earlier short paid or non-paid by reason of suppression of fact, fraud, collusion or wilful mis-statement, etc, the supplementary invoice issued in respect of that duty shall not be admissible for allowing the credit at the recipient s end. Now, the only fact to be verified is that whether the duty paid by the Tuticorin unit of the appellant was short paid or non-paid due to reason of suppression of fact, fraud, collusion or wilful mis-statment, etc. The adjudicating authority in the present case who has passed the impugned order is not competent to decide that whether the duty paid by the supplier unit is due to reason of suppression of fact, fraud, collusion or wilful mis-statement, etc. It is seen that the demand of duty on the Tuticorin unit was not confirmed by invoking proviso to Section 11A(1). Moreover, though the penal provision of Section 11AC was operative during the period May, 1997 to June, 2000 but the same was neither invoked in the show cause notice nor confirmed in the adjudication order dated 30.03.2017. With this undisputed fact, it is absolutely clear that the duty paid by the appellant is against the duty demand made from the Tuticorin unit for which there is no charge of suppression of fact, fraud, collusion or wilful mis-statement, etc. exist and there was no adjudication on the same - it is clear that the duty of Rs.15,06,93,732/- paid by the appellant s Tuticorin unit which was passed on to the appellant s unit by issuing the supplementary invoice is not due to reason of suppression of fact, fraud, collusion or wilful mis-statement, etc. accordingly, the bar provided in Rule 57AE is not applicable in the facts of the present case. Therefore, the appellant is legally entitled for the cenvat credit on the supplementary invoices. Appeal allowed.

  ---

• 2022 (12) TMI 972
  Levy of Central Excise Duty - finishing process of stentering of fabrics sent by M/s. Shrinathji Textiles and removal of such finished fabrics under the delivery slips to various parties from its premises - process amounting to manufacture or not - HELD THAT:- The learned commissioner (appeals) has relied upon the statement dated 05.06.2002 of Mr. Kailash S. Jalan, power of attorney holder of M/s. Shreenathji Textiles, in which he has stated that M/s. JTL has carried out process of stentering etc on the hand bleached/dyed/screen print fabrics sent by M/s. Shreenathji Textiles in the factory of M/s. JTL. However, on perusal of records it transpires that it is not the case in the show cause notice that M/s. JTL carried out process other than stentering nor is there a specific case or evidence referred in the SCN that M/s. JTL carried out processes on the fabric falling under chapter 54 55 of CETA, 1985 which otherwise also do not specifically include stentering as a process amounting to manufacture. In absence of such a case in the SCN and in absence of evidence to show that M/s. JTL carried out process other than stentering of fabrics falling under chapter 52 or carried out process on the fabric falling under chapter 54 or 55, demand of duty as against M/s. JTL cannot be sustained. The entire case of the revenue is that the seized delivery slips are in respect of fabrics subjected to Stentering in the factory of M/s. JTL is based on statements of the Director of M/s. JTL, proprietor and power of attorney holder of M/s. Shrinathji Textiles, some buyers and warehouse keeper. Despite specific direction to consider the plea of the appellants as per this tribunal order dated 25.07.2018, none of these persons have been examined as witness or cross-examination was given by adjudicating authority in terms of section 9D of the Act. It can be seen that statements having not been retracted, as held by the authorities below, is not the exception provided under section 9D of the Act and therefore, their testimony has to be excluded from consideration. It can be seen that excluding the statements, there is no evidence to show that the delivery slips were in respect of fabrics subjected to Stentering in the premises of M/s. JTL. Moreover, Yogesh Shah who is supposed to have written the delivery slips and who is supposed to have supervised, on behalf of M/s. Shrinathji Textiles, the process of stentering at the premise of M/s. JTL, has also not been examined in the investigations and in adjudication - there is otherwise no reliable evidence showing the said quantity of 11,12,820 L meters fabrics was stentered by the appellant in its premise. In the circumstances, duty demand cannot be sustained upon M/s. JTL. Since duty demand cannot be sustained, penalties upon the appellants are also liable to be set aside. Appeal allowed.

  ---

• 2022 (12) TMI 971
  Recovery of CENVAT Credit - mis-declaration of material facts with intent to evade payment of Central Excise Duty - extended period of limitation - HELD THAT:- It is very clear that the appellant had clearly mentioned that though the credit was taken by mistake belatedly, the credit was not availed by the Mill. This fact has been very conveniently ignored by the Adjudicating Authority who has chosen to incorporate at paragraph 5 of the Order-in-Original only the first portion as to the availment by mistake of credit and the non-reversal of the same. Thus, when the credit itself was not taken / availed by the appellant, there is no scope whatsoever to allege wilful or deliberate intention to evade duty. Unfortunately, the First Appellate Authority has also ignored the plea of the appellant, by upholding the findings of the Adjudicating Authority. The demand of duty by invoking the extended period cannot sustain as the Revenue has not been able to justify the same and therefore, the demand, as confirmed in the impugned order, cannot be sustained. When the demand itself cannot be sustained, the penalty imposed also cannot be sustained for the same reason and consequently, the impugned order to this extent cannot be sustained. Appeal allowed.

  ---

• 2022 (12) TMI 970
  CENVAT Credit - denial on the ground of failure to register as ISD - HELD THAT:- The facts of the case are similar to the facts of the case, in the case of PIRAMAL GLASS PVT except for the fact that in case of PIRAMAL GLASS PVT they were two manufacturing units whereas in the appellant s units there are four manufacturing units. Moreover, it is seen that no objection regarding admissibility of Cenvat Credit an such services other than the fact that the same were received in head office has been raised in the proceedings by the lower authorities - non registration as ISD in the current circumstance, where, where no malafides having found, is not a fact that would disentitle them from the Cenvat Credit. Appeal allowed.

  ---

• CST, VAT & Sales Tax

• 2022 (12) TMI 969
  Classification - Porridge / Daliya (cracked wheat) - Entry No. 36 of the Schedule of UPVAT Act excludes instant porridge as the latter sui generis a class of instant food as opposed to natural food - Whether the Tribunal is correct in law in stating that Entry No. 100 in Part-A of Schedule-II of the UPVAT Act is specific in nature and it covers brochures which are nothing but printed material even though brochures are comprehended within the meaning of Books in Entry No. 7 of the Schedule-I of the UPVAT Act and which in law is a specific entry is being taken up first and decided? HELD THAT:- The Constitution Bench of the Hon ble Apex Court in Dilip Kumar [ 2018 (7) TMI 1826 - SUPREME COURT] had cleared the air in regard to concession/exemption/incentive/rebate/subsidy and have dealt the matter in extenso and held, that in the event of any ambiguity in the exemption notification the benefit of such ambiguity should be construed in favour of the revenue denying the benefit of exemption to the subject/assessee - The Apex Court found that it is a settled law that any ambiguity in taxing statute should enure benefit of subject/assessee, but any ambiguity in the exemption clause of exemption notification must be conferred in favour of the revenue. It is clear that the issue in regard to exemption clause is no more res-integra and the Apex Court has settled the question in favour of the revenue, that when there is an ambiguity in exemption notification or exemption clause, the benefit of such ambiguity cannot be extended to the subject/assessee by applying the principal that an obscure and/or ambiguity or doubtful fiscal statute must receive a construction favouring the assessee. Classification - Porridge - The Act does not make any distinction between the normal porridge and instant porridge, and the finding arrived by the Tribunal is a fallacy. The intention of legislature was clear that exemption from tax has to be given to the product Porridge whether it was instant Porridge or normal Porridge i.e. Daliya (cracked wheat). The finding recorded by the Tribunal does not record any substantial finding so as to exclude instant wheat porridge under Entry 36 of Schedule-I of the exempted list of goods, when no distinction has been made by legislature. The Tribunal was not correct to read in between and deny the benefit to the assessee as granted by the taxing statute. The finding recorded by the Tribunal is hereby set aside - the question of law framed thus is answered in favour of the assessee and against the revenue.

  ---

• 2022 (12) TMI 968
  Rejection of the books of accounts of the revisionist - assessment of turnover on best judgment basis on the strength of invoices which were never proved by the Department as pertaining to the revisionist - HELD THAT:- It is a case where various mobile squads had sent certain material to the assessing officer who during the assessment proceedings had issued notice to the assessee to verify the said sale and purchase. There has been denial on the part of the assessee to the said transaction which has been alleged by the assessing authority. The assessing authority found that the assessee has not entered the transaction in his books of accounts and thus held that undisclosed purchase at Rs.2,30,00,000/- was made by the assessee while there was undisclosed sale to the tune of Rs.2,50,00,000/-. The burden to prove the material which was recovered by the various mobile squads was upon the Department and burden could not have been shifted upon the assessee to prove the same. Further, the assessee has denied the transaction having been made by him. Now coming to the question of Section 16 of the Act of 2008, this Court finds that the word used in Section 16 is that where a fact is in the knowledge of the assessee, then during assessment the burden of proving shall lie upon assessee. In the present case, it was the material which was recovered by the various mobile squads which was denied by the assessee and thus was not in his knowledge. Thus Section 16 of the Act of 2008 is not attracted and the argument raised from the revenue side fails - Assessee is entitled to the relief claimed and no tax liability can be fastened upon the assessee by the material which was seized by the mobile squad which remained unproved during the assessment proceedings nor at the first appellate stage. The question of law as framed stands answered in favour of the assessee and against the Department - the revisions stands allowed.

  ---

• 2022 (12) TMI 967
  Validity of assessment order - Short reporting resulting in purported short levy relatable to difference in sales turnover and sale of assets - reasonable opportunity to show cause provided or not - violation of principles of natural justice - HELD THAT:- This Court refrains itself from expressing any opinion or view on this submission as it is statutorily imperative for the respondent to give a reasonable opportunity to the dealer before the impugned assessment order was made. Though a show cause notice was issued, there is nothing that is articulated in the impugned assessment order to show that the reply was considered. As there is no mention about the reply, this Court is of the considered view that the statutorily imperative requirement does not stand satisfied in the case on hand qua impugned assessment order and that calls for interference. Impugned assessment order is set aside solely on the ground that there is nothing in the impugned assessment order to show that the writ petitioner s reply dated 07.03.2018 (reply to 05.02.2018 show cause notice) has been considered whereas it is statutorily imperative to give the dealer a reasonable opportunity to show cause - respondent is directed to consider the reply dated 07.03.2018 given by the dealer and make an assessment order afresh. Impugned demand notice dated 04.11.2022 is set aside for the self-same reasons qua setting aside of the impugned assessment order - petition disposed off.

  ---

• 2022 (12) TMI 966
  Composition/compounding U/s 6 and 6A of VAT Act - when the matter is pending then assessment order U/s 28(2) of the VAT Act can be passed? - HELD THAT:- Having heard learned counsel for the parties and having perused the record what clearly emerges is that an S.I.B. inquiry had been carried on 11.02.2016 on the premises of the revisionist. The revisionist got itself registered as a dealer in March 2016. On the basis of the S.I.B. inquiry the tax of Rs 2.94 lakhs had been imposed which after a series of appeals etc has been reduced to Rs 1.84 lakhs. Admittedly the Government Order dated 18.02.2016 had been issued with respect to such persons like the revisionist. Admittedly the revisionist applied in pursuance to the said Government Order on 07.04.2016 but no order was passed by the competent authority on the said application and the said application remained pending and in the meanwhile the impugned orders have been passed. The Government Order dated 18.02.2016 itself provides that even if application is filed beyond a period of 45 days the competent authority namely the Commissioner could still accept the said application on payment of interest. Admittedly no order has been passed by the competent authority / Commissioner on the application of the revisionist and at the same time the authorities have proceeded to impose tax on the revisionist. Considering that there has been inaction on the part of the authorities concerned in not acting in pursuance to the Government order dated 18.02.2016 and there being no denial that the revisionist did not apply in pursuance to the said Government Order, consequently the revision is allowed and the order impugned dated 18.06.2022 passed by the learned Commercial Tax Tribunal Bench III, Lucknow a copy of which is annexure 1 to the petition, is set aside - the matter is remanded to the respondent no. 1 to consider the appeal afresh keeping in view the observations, the Government Order dated 18.02.2016 and the application of the revisionist submitted in pursuance thereof.

  ---

• 2022 (12) TMI 965
  Classification of goods - SAREE, PATTA, DHOTI and GAMUCHHA - whether SAREE, PATTA, DHOTI and GAMUCHHA fall under Entry Serial No.3 of Part-II of Schedule appended to the OET Act? - HELD THAT:- When saree, patta, dhoti, gamuchha are considered, they are the products of textile . They do not lose essential characteristics of fabric. Thus, the expression textile products including cotton fabrics and ready-made garments is wide enough to take into its sweep the goods in question. The learned OSTT has appropriately held that the Appellate Authority has erred in giving restricted meaning to the expression contained in Entry 3 of Part-II of Schedule appended to the OET Act. The question whether the Division Bench of the Odisha Sales Tax Tribunal, Cuttack is right in law to hold that saree, patta, dhoti and gamuchha do fall under Entry No.3 of Part-II of Schedule appended to the OET Act, is answered in the affirmative in favour of the State of Odisha-Revenue and against the petitioner-dealer.

  ---

• 2022 (12) TMI 964
  Refund of input tax credit (ITC) - claim of ITC had been rejected on the ground that such refund would have to be tested on the anvil of Section 19 of the Act that sets out certain conditions there for - HELD THAT:- The matter was adjourned on 29.11.2022 after directing the learned Additional Government Pleader, who appears for the State, to produce the records relating to and culminating into MoU dated 07.07.2008, entered into between the State of Tamil Nadu and the petitioner. The direction was given specifically to understand the role played by the Commercial Taxes Department in such matters. Today, letter bearing No.7916/C1/2021-2 dated 01.12.2022 is placed before me wherein the Secretary to Government conveys to the Principal Secretary/Commissioner of Commercial Taxes Department the position that refund is liable to be granted by the Commercial Taxes Department under MoU dated 07.07.2022, without reference to the provisions of the law relating to ITC. Mr.Prasanth Kiran, learned Government Advocate, would convey that the Commercial Taxes Department accedes to this position. Nothing further survives in these matter and these writ petitions are allowed.

  ---

• Indian Laws

• 2022 (12) TMI 963
  Dishonor of Cheque - vicarious liability of the Director - section 141 of NI Act - HELD THAT:- In SMS PHARMACEUTICALS LTD. VERSUS NEETA BHALLA [ 2005 (9) TMI 304 - SUPREME COURT ] the Hon ble Supreme Court of India discussed the meaning and purpose of Section 141 as well as the averments required to be made in the complaint under Section 138 r/w 141 of Negotiable Instruments Act, 1881 to fasten the vicarious liability on the persons associated with a company. The prime objective of this Court is to remind all the Metropolitan Magistrates in Delhi to carefully scrutinize all the complaint cases being filed under Section 138 r/w 141 of the Negotiable Instruments Act, 1881 against the accused companies at the pre-summoning stage and make sure that notice be directed only to those directors or employees of the company who satisfy the principles laid down in the aforesaid judgments. Summons must be issued only after giving due consideration to the allegations and the materials placed on record by the complainant. Undeniably, as per the aforesaid legal pronouncements, Managing Director and the Joint Managing Director are deemed to be vicariously liable for the offence committed by the company because of the position they hold in the company. Problem arises in cases where all the persons holding office in the company are sought to be prosecuted by the complainant, irrespective of whether they played any specific role in the incriminating act - One can also not lose sight of the fact that once such innocent persons are summoned, they have no choice but to seek bail and face the ordeal of trial. Many of such persons also approach the High Court under Section 482 Cr.P.C. to seek quashing of the summoning order and the complaint filed against them and this further increases the burden on the already overburdened Courts. Coming to the facts of the present case, a perusal of Form No. DIR-11, dated 19.09.2019, of the accused company K.S. Oils Limited shows that the petitioner was an independent director at the time of commission of the offence. In view of Section 141 of Negotiable Instruments Act, 1881 and Section 149 of Companies Act, 2013 petitioner could have been held vicariously liable only if it was shown that he was incharge of and was responsible for the conduct of the business of the company at the time of commission of offence, and not otherwise - In absence of any specific averments or allegations carving out a specific role attributable to petitioner in relation to conduct of business of accused company, merely making bald statements that all the accused persons/directors were incharge and responsible for the day to day affairs of the company, does not suffice to make the petitioner herein vicariously liable for dishonouring of the cheques not signed by him and there being material on record to show that he was an independent director in the company. Petition allowed.

  ---

• 2022 (12) TMI 962
  Notices service of proceedings - None appeared despite notices - Court directed that the Registry will inform the concerned Officer, who is looking after the litigation instituted against the Union of India to make necessary arrangement to represent the Union of India in the matter - HELD THAT:- As regards the Customs, the authority to receive notice has been specified. As regards the Central Excise, Service Tax and Railways, the same is specified and also as regards the Income Tax, Wealth Tax, Gift Tax and Estate Duty matters, the time upto which the notice will be received is also specified. Since these orders and notices have been issued, we see no reason why the situation which has arisen in the present petition should at all take place. As regards the notice published on the website of the High Court, it refers to the departments other than Income Tax, Direct Tax and Indirect Tax. The learned Counsel for Respondent Nos. 1 to 4/ Union of India states that as regards the Direct and Indirect Taxes for publication of notice, on the same line as one referred above, the matter will be coordinated with the Registry of this Court. Stand over to 5 January 2023.

  ---

• 2022 (12) TMI 961
  Liability to pay Electricity duty - bulk supply of energy or not - specific case of the petitioner is that it is only a consumer of electricity supply and is not the Licensee of the electricity supply - HELD THAT:- The petitioner, who is undisputedly into the business of operating a hotel is not an industrial consumer, therefore the petitioner does not fall under the definition of bulk supply as provided in the said Rules. Accordingly, since the petitioner is not being supplied with bulk supply of energy the petitioner is not an Assessee as defined under the said Rules. Therefore, no liability can be imposed upon the petitioner to pay the electricity duty to the Respondent Department. The impugned assessment orders, all dated 15.02.2020 and subsequent notice of demand for the respective financial years, dated 19.02.2020, are, hereby, quashed and set aside - Petition allowed.

  ---

• 2022 (12) TMI 960
  Seeking seniority and other benefits - Appointments to the post of Member, ITAT without amending the Rules as per the Cabinet Note - specific case is that though the ACC had directed to amend the 1963 Rules, respondents were making appointments to the post of Member, ITAT - HELD THAT:- The applicant ought to have been appointed by operating the wait-list. If that is done, he is entitled to be placed at the end of the list of candidates in the Select List who have joined the service. Once applicant has been appointed pursuant to the directions of the Apex Court, in his position in the waiting list , he shall be entitled for consideration of notional seniority and other consequential benefits. He shall be placed at the end of the last person appointed in the Select List. He shall be entitled for pay only from the date of his assuming charge, which the CAT has rightly granted. Petition dismissed.

  ---