TMI Tax Updates - e-Newsletter
December 23, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
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GST:
Validity of SCN issued u/s 73 of the CGST Act, 2017 - since the proceeding has been initiated under Section 73 of the Act, the very provision of Section 73 of the Act starts with the words where it appears to be for the authority concerned which by itself means that at the time where the authority appears to found it necessary for initiating the proceedings, there ought to had been some material, information or even sort of a complaint available with them as regards the suspicious transactions or the alleged evasion of tax made by the petitioner. - HC
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GST:
Seizure of goods - Absence of proper documents for movement of goods - levy of IGST or CGST+SGST - Levy of penalty - gold ornaments - The aforesaid two grounds viz. non possession of valid delivery challan along with document substantiating the stand of the petitioner that it was sent for approval at the time of seizure of the goods and payment of tax and penalty voluntarily deposited by the petitioner at the time of release of the goods are sufficient reasons to dismiss the case of the petitioner - HC
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GST:
Denial of right of second appeal - denial on account of the failure of the appropriate Government to constitute the tribunal - The petitioner shall deposit 20% of the disputed tax liability in addition to the earlier deposit before the assessing authority (which is 10% of the disputed tax amount). Subject to the aforesaid deposit, the recovery proceedings of the balance amount shall remain stayed till the decision of this writ petition - HC
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GST:
Cancellation of G.S.T. registration of the petitioner - contention of the learned senior counsel is that immediately on receipt of the said show cause notice, the petitioner had immediately taken necessary steps and have filed entire returns up till date - GST registration directed to be restored - HC
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Income Tax:
Reopening of assessment - allegation of undisclosed source of purchase of property - If the Assessing Officer has to say that there are two properties purchased, either erroneously the figure of Rs. 35 lakhs is doubled and shown as Rs. 70 lakhs in the AIS, or the Assessing Officer should provide the details of the second property, which according to the Assessing Officer, petitioner has purchased but has failed to disclose resulting in an escapement of income. An assessee cannot prove negative. - HC
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Income Tax:
Revision u/s 264 - Seeking revision since the payment of interest in excess of 12% to a partner disallowed in the hands of partnership firm - Under the Income Tax Act, the firm and the individual partners are different entities. The disallowance of expenditure in the case of one entity does not entitle the other entity (recipient) to claim deduction of the disallowed expenditure. In this case assessee has actually received interest and obtained benefit to that extent. In view of the above, the petition u/s. 264 of the assessee considered devoid of any merit and hereby rejected. - HC
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Income Tax:
Disallowance of deduction u/s 80-GGA - even though the Revenue has claimed that Navjeevan Charitable Trust has been involved in a bogus transaction of accommodation entry and the learned CIT(A) has also made various allegations against the assessee in the impugned order, however in the present case the impugned addition is based on the denial of deduction under section 80-GGA of the Act merely on the basis of subsequent withdrawal of notification u/s 35-AC of the Act and there is no material available on record to support the findings of the learned CIT(A). - Deduction allowed - AT
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Income Tax:
Levy of penalty u/s 271AAB - assessee has inflated his agricultural income, which would have been otherwise offered under any other head of income - any disclosures made in the course of search and statement recorded u/s.132(4) itself cannot be construed as “undisclosed income” as per the definition provided in the Act. There is no incriminating material found by the Revenue on the alleged additional income offered by the assessee. - AT
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Income Tax:
Income surrendered during survey - Levy of higher rate of tax u/s 115BBE - the income surrendered during the course of survey cannot be brought to tax under the deeming provisions of section 69B and the same has to be assessed to tax under the head “business income”. In absence of deeming provisions, the question of application of section 115BBE doesn’t arise and normal tax rate shall apply. - AT
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Income Tax:
Deduction u/s 80IA (4) - Contractor v/s Developer - As assessee has undertaken the projects of infrastructure facility as envisaged under the provisions of section 80 IA(4A) of the Act in the capacity of the developer, we are inclined to hold that the assessee who is only engaged in the activity of development of infrastructure facility is eligible to claim the deduction u/s 80IA(4). - AT
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Income Tax:
Computation of deduction u/s 80IB/80IC - allocation of advertisement expenses to the eligible units in the ratio of turnover of eligible units to the total turnover of the assessee - Assessee has relied on the decision of the coordinate bench for A.Y. 2001-02 which has held that the assessee has itself allocated 50% corporate expenses including advertisement expenses of head office as per the rate of turnover of the eligible unit to the turnover of the assessee company which was duly certified by a Chartered Accountant. The co-ordinate bench has accepted the allocation made by the assessee - AT
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Income Tax:
Scope of applicability of MAT u/s 115JB - Considering amendments and the provisions existing prior to 01.04.2013, we notice that prior to 01.04.2013 the type of companies other than those which are required to prepare their financial statements in accordance with provisions of Part ‘2’ & ‘3’ of Schedule VI of Companies Act were not brought into the ambit and there was no clarification in the said provision. However, subsequent to the amendment by 01.04.2013 onwards, the remaining companies have also been brought into the ambit of Section 115JB of the Act. - AT
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Customs:
Disposal of seized goods - In the present case the gold jewellery belonging to the petitioners has been dealt, disposed of and sold in patent disregard to the basic principles of law as Articles 14 and 300A of the Constitution would ordain. This apart, even the provisions of the Customs Act stand violated - nce the action of the respondents is held to be void, ab initio, illegal and unconstitutional, there can be no second opinion that the rights of the petitioners in regard to illegal seizure would be required to be restituted. - HC
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Customs:
Contempt of court - Continuous, repeated, deliberate and wilful disobedience by the respondents (DRI officials) - Evidently, the SCN arising out of the main file is under a cloud and once the very foundation is on a sticky wicket, the purported prosecution is not fathomable. The purported prosecution entails a heavy burden on the entire justice delivery system at a huge cost, time and efforts on the part of the Court after Court. - This Court finds the respondents guilty of committing patent breach of the directions passed by this Court and holds them guilty for committing a civil contempt under Section 2(b) read with Section 11 and 12 of the CC Act. - HC
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Customs:
Valuation of iron ore fines - ‘Fe’ content - It is thus evident that the CRCL test report is not only cryptic, but it is also not clear whether the same was in accordance with the prescribed standards. The fact that the sample was tested nearly two months after its drawal and had not been stored in accordance with the prescribed conditions, the reliability of the test result, therefore is not only doubtful but also unreliable - AT
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Customs:
Revocation of licensed courier - software was so designed under the instructions of respondent. GSTIN field showing Aadhaar number was directed by the respondent himself to be kept constant while software was developed. The edit option was with the respondent. He has failed to upload the correct edited information. Thus respondent cannot be allowed to take shelter of plea of “software error”. Thus, the alleged/impugned act was not merely lack of due diligence but was intentional misconduct. - AT
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Indian Laws:
Dishonour of Cheque - vicarious liability - If the petitioner was not responsible for affairs of the accused no. 1 despite being promoted as Additional Director of the accused no. 1, it can only be established and proved in accordance with law during the trial of the complaint under section 138 of NI Act. The petitioner has not placed or submitted any document which can reflect that the petitioner has never participated in conduct of business of the accused no. 1. - HC
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Indian Laws:
Dishonour of Cheque - legality of judgment of acquittal - It was duly proved that the cheque was issued in discharge of the legal liability - The learned Trial Court did not consider the presumption attached to the cheque and the suggestions made to the complainant and his witnesses. It had taken a view which could not have been taken by any reasonable person. The judgment of the learned Trial Court proceeds in ignorance of the settled position of law and the same is liable to be interfered with even in an appeal against the acquittal. - HC
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Indian Laws:
God did not punish Adam, banishing him from Paradise, without hearing him. If principles of natural justice applies to Almighty, all the more it applies to his frail creatures. Therefore, the test is not whether the parties are heard and examined, but, whether there is a transfer of judicial power from the State to a body and that body is clothed with the power of adjudication of a lis. - HC
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IBC:
Power of NCLT where CIRP stayed - Validity of Direction to the Resolution Professional to immediately handover the management of the Corporate Debtor to the CEO/Management of the Corporate Debtor - It is for the RP to take decision in its wisdom as to how the Corporate Debtor should be allowed to continue as a going concern without taking any steps in the CIRP - The Adjudicating Authority committed error in passing the order - AT
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IBC:
Re-determination of the CIRP - The direction to CoC to redetermine the CIRP cost after approval of the Resolution Plan by the CoC is unsustainable - The audited Report was obtained by Resolution Professional to satisfy himself and to obtain a confirmation of his determination of the CIRP cost by an Auditor, which having been done, no further approval of the CoC was required for payment of CIRP Cost - AT
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IBC:
Approval of Resolution Plan - Scope of the remand back proceedings - The Adjudicating Authority on 06.09.2022 while disposing off application u/s 30(6) allowed the Resolution Professional to accept new Resolution Plans from unsuccessful Resolution Applicants and even previously non-participating entities who may want to submit a Resolution Plan for the Corporate Debtor. - The said order of NCLT set aside - AT
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PMLA:
Money Laundering - illegal transfer of funds out of India as import payments using forged Bill of Entries, Invoices, etc. - the Division Bench of this Court has now granted bail to the respondent/accused. In these circumstances, the trial Court shall determine the consequences of bail order, including the effect of non-execution of bail bond. - HC
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Service Tax:
Levy of service tax - rental income - liability of Waqf Board - The petitioner is statutory body. As per the Wakf Act, 1955 the petitioner has to maintain the finances of the wakf institutions by exercising superintendence over the manager of the wakf/mutawalli and even in audit of the accounts of wakf properties. Further, Section 58 of the Wakf Act contemplates that the petitioner is liable in case of default by mutawalli who refuses or fails to pay any revenue, cess, or tax due to the Government or any local authority. In this statutory prescription, the petitioner’s claim that it has no concern is found untenable - HC
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Service Tax:
Levy of service tax - amount retained by the appellant from fees of the Doctor on account of infrastructure support to the doctor - the issue is settled in favour of the assessee, therefore, demand on this count is not sustainable. - AT
Articles
Notifications
Customs-
65/2023 - dated
21-12-2023
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Cus
Reduce AIDC on crude soya, sunflower and palm oils - Seeks to further amend No. 49/2021-Customs, dated the 13th October, 2021 to extend the end date to 31st March, 2025
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93/2023 - dated
21-12-2023
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Cus (NT)
Rate of exchange of one unit of foreign currency equivalent to Indian rupees - Supersession Notification No. 90/2023-Customs(N.T.), dated 7th December, 2023
FEMA-
FEMA 14(R)/2023-RB - dated
20-12-2023
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FEMA
Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023
GST - States-
16/2023-State Tax (Rate) - dated
21-12-2023
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Delhi SGST
Amendment in Notification No. 17/2017- State Tax (Rate), dated the 30th June, 2017
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17/2023-State Tax (Rate) - dated
20-10-2023
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Gujarat SGST
Amendment in Notification No. 1/2017-State Tax (Rate) dated the 30th June, 2017
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16/2023-State Tax (Rate) - dated
20-10-2023
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Gujarat SGST
Amendment in Notification No. 17/2017-State Tax (Rate), dated the 30th June, 2017
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15/2023-State Tax (Rate) - dated
20-10-2023
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Gujarat SGST
Amendment in Notification No. 15/2017-State Tax (Rate) dated the 30th June, 2017
SEBI-
SEBI/LAD-NRO/GN/2023/162 - dated
21-12-2023
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SEBI
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2023
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SEBI/LAD-NRO/GN/2023/161 - dated
21-12-2023
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SEBI
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Seventh Amendment) Regulations, 2023
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2023 (12) TMI 996
Cancellation of GST registration of petitioner - SCN do not specify the alleged fraud or the misstatement alleged to have been made by the petitioner - HELD THAT:- It is trite that a show cause notice must clearly set out the allegations on the basis of which an adverse action is proposed, to enable the noticee to meaningfully respond to the same. Clearly, the SCN in the present case fails to satisfy the said standard - The impugned order is also not informed any reason and it merely mentions that the same has been issued in reference to the SCN. It is noticed that the petitioner s registration has been cancelled with retrospective effect from 23.05.2023. Neither the SCN nor the impugned order provides any reasons for doing so. The respondent is directed to forthwith restore the petitioner s GST registration - The SCN as well as the impugned order are set aside - Petition allowed.
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2023 (12) TMI 995
Validity of assessment order - proceedings initiated against a dead person - HELD THAT:- The fact remains that the impugned assessment order came to be passed against the dead person, which is non-est in law and hence, it is liable to be set aside. Therefore, this Court is of the considered view that the petitioners shall construed the notice issued by the respondent dated 06.07.2022 as a notice issued to them as on date. Further, the petitioners are directed to file a reply to the said notice within a period of 6 weeks from the date of receipt of copy of this order. Thereafter, the respondent is directed to pass appropriate orders after providing opportunities to the petitioner for personal hearing. The impugned order is set aside - appeal allowed.
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2023 (12) TMI 994
Validity of SCN issued u/s 73 of the CGST Act, 2017 - invocation of the extraordinary jurisdiction of this Court contending that the Show Cause Notice is vague - HELD THAT:- A plain reading of the Show Cause Notice itself would give a clear indication that the Show Cause Notice lacks necessary information, source and the materials on the basis of which the authority concerned found the necessity for issuance of the Show Cause Notice. The Show Cause Notice, from the plain reading, seems to be one which has been issued in a mechanical manner without application of mind and without any cogent sufficient materials available or even the basic scrutiny or the investigation which were required for the authority concerned in reaching to the conclusion that certain transactions which have been carried on by the respondents appear to have been the transactions where there is evasion of tax or where there is suppression of material facts or atleast there was reasonable suspicion on the transactions so made by the petitioner. This Court also finds sufficient force in the submissions made by the learned counsel for the petitioner when they say that since the proceeding has been initiated under Section 73 of the Act, the very provision of Section 73 of the Act starts with the words where it appears to be for the authority concerned which by itself means that at the time where the authority appears to found it necessary for initiating the proceedings, there ought to had been some material, information or even sort of a complaint available with them as regards the suspicious transactions or the alleged evasion of tax made by the petitioner. Ex. P1 Show Cause Notice, dated 29.09.2023 would not be sustainable as they are bereft of facts and materials and the same deserves to be and is accordingly set aside/quashed - Petition allowed.
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2023 (12) TMI 993
Seizure of goods - Absence of proper documents for movement of goods - levy of IGST or CGST+SGST - Levy of penalty - gold ornaments - goods meant for sale on approval basis for which delivery challan was issued by the supplier - person in charge of the goods could produce only a delivery note which was not a valid document for movement of goods - HELD THAT:- The goods which are taken for supply on approval basis can be moved from the place of business of the registered supplier to another place within the same State or to a place outside the State on a delivery challan along with the e-way bill wherever applicable and the invoice may be issued at the time of delivery of goods. For this purpose, the person carrying the goods for such supply can carry the invoice book with him so that he can issue the invoice once the supply is fructified. The provisions of law does not provide for any substitute to the prescribed delivery challan. The Circular dated 18.10.2017 issued by the Department of Revenue, Central Board of Excise and Customs also indicates that there is no substitute for the prescribed delivery challan. Therefore, non-possession of prescribed delivery challan at the time of seizure of the goods weakens the case of the petitioner. The record also reveals that after seizure of the goods, the owner of the goods appeared before STO seeking release of goods on the plea that the goods in question were for sale on approval basis and therefore accompanied by a delivery note along with a letter from the consignor certifying that the goods were for sale on approval basis but the said letter was misplaced by the courier agency. In the absence of valid delivery challan as prescribed under the rules, tax and penalty was imposed upon the petitioner under Section 129 of the Act. The record further reveals that the petitioner had voluntarily agreed in writing to pay tax and penalty as is also evident from the perusal of order passed by the STO. Payment of tax and penalty by the petitioner clearly indicates that the person in charge of the goods was not having a valid delivery challan when the goods were intercepted by the State Taxes Officer. In so far as the contention of the learned counsel for the petitioner that the petitioner was made to sign on the blank papers under duress is concerned, the declaration supra indicates that same has not been signed under protest, as such, the plea of the learned counsel for the petitioner is only an afterthought - Once the petitioner in terms of the declaration declared himself as an owner and accepted the liability of tax and penalty then he is estopped in raising such kind of allegations against the respondents that too without any reasonable justification. The aforesaid two grounds viz. non possession of valid delivery challan along with document substantiating the stand of the petitioner that it was sent for approval at the time of seizure of the goods and payment of tax and penalty voluntarily deposited by the petitioner at the time of release of the goods are sufficient reasons to dismiss the case of the petitioner - there are no infirmity in the impugned orders - petition dismissed.
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2023 (12) TMI 992
Denial of right of second appeal - denial on account of the failure of the appropriate Government to constitute the tribunal - denial of a statutory right - inconsistency of some interim orders passed by this Court as regards the amount of pre-deposit - HELD THAT:- One line of interim orders contemplates deposit of 30% of the amount out of which 10% which is deposited before the first appellate authority is liable to be adjusted. The Uttar Pradesh Goods and Services Tax Act as well as the Central Goods and Services Tax Act contemplate pre-deposit of certain amounts i.e. 10% of the of the disputed tax liability before the first appellate authority. In addition to that, 20% of the disputed tax liability is liable to be deposited before the second appellate authority at the time of institution of the appeal - In congruent facts, identical interim orders are liable to be granted, otherwise an anomalous situation will be created where similarly situated persons will be accorded differential treatment leading to discrimination and violation of Article 14 of the Constitution of India. The second aspect which requires to be given weight is that the assessee cannot be faulted for what is essentially a failure of the Government. The statute contemplates deposit of 10% plus 20% of the disputed tax liability before the first and second appellate authorities respectively. By imposing a demand of 50% in these matters, the assessees will be penalized for no fault of theirs - The grant of interim orders in the aforesaid manner made in the said orders passed by this Court balances the interests of revenue as well as the rights of the assessees. However, it needs to be clarified that it is always open to the Court to grant interim orders which are at variance with the aforesaid orders in peculiar facts and circumstances of a particular case while exercising writ jurisdiction in the interests of justice. The petitioner shall deposit 20% of the disputed tax liability in addition to the earlier deposit before the assessing authority (which is 10% of the disputed tax amount). Subject to the aforesaid deposit, the recovery proceedings of the balance amount shall remain stayed till the decision of this writ petition - List after six weeks.
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2023 (12) TMI 991
Cancellation of G.S.T. registration of the petitioner - contention of the learned senior counsel is that immediately on receipt of the said show cause notice, the petitioner had immediately taken necessary steps and have filed entire returns up till date - HELD THAT:- Though the Department has been granted couple of opportunities to seek instructions, the only oral instructions received by the learned counsel for the Department is to the extent that the order of cancellation does not seem to be on the grounds which were otherwise there in the show cause notice, dated 02.07.2020, but on the ground of the petitioner having fraudulently availed I.T.C. to the tune of Rs. 31 Crores. The learned senior standing counsel for the Department in this regard referred to the correspondence received from the Department, dated 30.05.2023. Taking into consideration the submissions made by the learned senior counsel for the petitioner that after the show cause notice having been issued, taking advantage of the circular of the Government of India extending the time of furnishing the returns, the returns have already been filed by the petitioner within the extended period of time, it is found difficult to sustain the impugned order (Annexure-P1), dated 25.08.2023. On this very ground alone, the impugned order, therefore, is not sustainable and the same deserves to be and is accordingly set-aside/quashed. The respondent authorities are directed to forthwith restore the G.S.T. registration of the petitioner. Petition allowed.
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2023 (12) TMI 990
Violation of principles of natural justice - manpower supplying service - whether proper tax along with applicable interest had been deposited by the petitioner on the Indian component for payment or not? - HELD THAT:- Mr. Deepak Kakkar, Advocate accepts notice for Mr. Tejinder K. Joshi, Sr. Standing Cousnel, for respondents No. 1 to 3. To come up for service of respondent No. 4 on 13.02.2024.
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2023 (12) TMI 989
Recovery of penalty pursuant to the order impugned - no Tribunal is constituted - HELD THAT:- Reading the order would indicate that the author of the order had opined that the petitioner should inform the authority if any appeal or stay application has been filed against the OIA dated 31.07.2023 and whether the Appellate Authority has granted stay of the order. It is the case of the authority that if no stay of recovery of dues has been granted, the petitioner is called upon to pay the dues in question. Issue NOTICE returnable on 07.12.2023.
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Income Tax
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2023 (12) TMI 988
Offence punishable u/s 276-B r/w 278-B of IT Act - statutory requirement of service of notice as contemplated by Section 2(35)(b) -to principal officer - as contented petitioner is not the principal officer under Section 2(35) of the I.T. Act, and he was never served with any notice treating him as a principal officer as required under clause (b) of Section 2(35) to initiate a prosecution under sections 276-B read with 278-B - HELD THAT:- The term person is defined under section 2(31) of the I.T. Act and includes a company. As per sub-section (35) of Section 2 of the I.T. Act, principal officer with reference to a local authority or a company or any other public body or any association of persons or any body of individuals, means (a) the secretary, treasurer, manager or agent of the authority, company, association or body, or (b) any person connected with the management or administration of the local authority, company, association or body upon whom the Assessing Officer has served a notice of his intention of treating him as the principal officer thereof. In order to treat a person as a Principal Officer as defined under section 2(35)(b) of the I.T. Act, he must be a person connected with the management or administration of the company, and Assessing Officer must have served upon him a notice of his intention of treating him as the principal officer of the company. In the present case, it is not the case of respondent No. 1 that the notice as contemplated by Section 2(35) of the I.T. Act has been served upon the petitioner. Although, the petitioner is not classified under Section 2(35)(a) as an individual who can be treated as a principal officer without notice, but he falls under the category of persons specified under Section 2(35)(b), where he can be treated as a principal officer only upon service of notice to prosecute him under the purview of Sections 276-B and 278-B of the I.T. Act. Though the Department claimed that it sent the notice to the assessee company and its directors, the fact remains that it was never delivered to the petitioner. Further, the record does not indicate that the Department took any steps to ensure the delivery of the notice before initiating prosecution. Since the Department did not comply with the mandatory condition as enumerated in Section 2(35)(b), this Court finds it difficult to accept the contention of respondent No. 1/Department that it followed all necessary procedures before initiating prosecution against the petitioner. Additionally, a bare perusal of the Order shows that before issuing the process, the learned Magistrate did not take into consideration the relevant provisions of the I.T. Act and determine whether the mandatory notice u/s 2(35)(b) of the I.T. Act was delivered to the accused or not. Needless to state that an order of issuance of process is not an empty formality and requires the Magistrate to apply his mind before issuing the process. Passing orders of issuance of a process without appreciating the statutory provisions and cautiously examining the material on record may put the wheels of criminal law in motion and summon an innocent individual to stand trial. Such orders are liable to be quashed and set aside. This Court is satisfied that the statutory requirement of service of notice as contemplated by Section 2(35)(b) of the I.T. Act is not complied with. This non-compliance goes to the root of the matter and dents the prosecution against the petitioner.
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2023 (12) TMI 987
Reopening of assessment - Sales consideration shown double / twice in AIS - allegation of undisclosed source of purchase of property - As per AO the the assessee has purchased two properties and purchase consideration is more than sale consideration of property - Petitioner has been candid in admitting that though the residential flat sold during the year was a short term capital asset and petitioner was liable to pay tax thereon, petitioner did not pay any tax on short term capital gain because petitioner was advised that as the flat was a residential flat and in the same year petitioner had purchased another flat, no income was chargeable to tax - HELD THAT:- On the working of the short term capital gain for the flat sold, the Assessing Officer came to a finding that taxable capital gain was Rs. 13,64,000/-. But strangely in the impugned order dated 29th March 2023 issued under Section 148A(d) of the Act, the Assessing Officer proceeded further on the basis as regards the two immovable properties purchased by the assessee, the assessee has submitted that, she has purchased only one property for the consideration of Rs. 35,00,000/- . What we find difficult to digest is even in the notice issued u/s 148A(b) or the information annexed thereto, nowhere does it state petitioner has purchased two properties for Rs. 70 lakhs. Petitioner has provided documents to justify that petitioner has purchased only one property for Rs. 35 lakhs and also has explained the source of funding. If the Assessing Officer has to say that there are two properties purchased, either erroneously the figure of Rs. 35 lakhs is doubled and shown as Rs. 70 lakhs in the AIS, or the Assessing Officer should provide the details of the second property, which according to the Assessing Officer, petitioner has purchased but has failed to disclose resulting in an escapement of income. An assessee cannot prove negative. If the Assessing Officer has any positive information about the details of the second property allegedly purchased, the Assessing Officer was duty bound to apply his mind and confront petitioner with those documents. Simply relying on what the AIS states and passing an order is not something which this Court can accept. As we agreed to entertain this petition only in view of this undertaking given by Mr. Phadke that assessee will pay the capital gain payable and will not raise the issue of limitation under Section 149(1)(b) of the Act. The impugned order to the extent of Rs. 35 lakhs remaining as unexplained is hereby quashed and set aside. AO shall give effect to this order and provide computation of income to petitioner within four weeks of this order being uploaded and as per the undertaking given, petitioner shall pay the amount as computed within four weeks thereafter. Even if petitioner feels the computation is wrong, the amount will be paid and thereafter, petitioner may take such steps as advised in accordance with law to impugn the computation of income.
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2023 (12) TMI 986
Adjustment of refund against challan filled under VsV Scheme - calculation of interest u/s 244A - credit of the said challan was not given in Form 3 Form 5 under VsV as the challan was not visible on the PAN of assessee due to the fact that assessee deposited the challan on incorrect PAN - As argued interest u/s 244A will not be allowed to assessee on the amount of the refund as the delay in issue of refund is attributable to assessee and also the matters is settled under VsV 2020 - HELD THAT:- Revenue are agreeable to refund the money after giving credit qua the same in the challan which concededly requires correction. The amount to be credited and thereafter remitted to the petitioner/assessee would be Rs. 25 lakhs, even according to the respondents/revenue. However, the respondents/revenue have indicated that interest under Section 244A of the Income Tax Act, 1961 [in short, the Act ] would not be paid to the petitioner/assessee. Assessee, says that insofar as the proceedings under Direct Tax Vivad Se Vishwas Act, 2020 [in short, 2020 Act ] are concerned, they are positioned at the stage of acceptance of Form-3. Also albeit on instructions also states that the petitioner/assessee will be agreeable to correction of the challan and receipt of Rs. 25 lakhs, sans the interest. Therefore, the writ petition is disposed of with a direction that the concerned authority will progress the matter under the 2020 Act, as per law, from the stage at which it is presently positioned. n so far as correction of the challan is concerned, steps in that behalf will be taken by the respondents/revenue and consequential refund of Rs. 25 lakhs would be made. This exercise will be completed within three (3) weeks of the receipt of a copy of the order passed today.
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2023 (12) TMI 985
Deduction with regard to liquidated damages - CIT(A) examined the material on record and returned a finding of fact that the respondent/assessee had infact suffered damages to the extent of the provisions made in the preceding AY - CIT(A) found that the respondent/assessee had to make supplies to BSNL and MTNL. Since, there was a delay in making the supplies, liquidated damages were adjusted by the said entities against the invoices raised by the respondent/assessee - HELD THAT:- The Tribunal, was not impressed with the arguments advanced on behalf of the appellant/revenue, and hence sustained the findings returned by the CIT(A) with regard to the liquidated damages suffered by the respondent/assessee. We may note that there is nothing brought on record to suggest that the findings returned by the CIT(A) are perverse. Thus, having regard to the orders passed by the CIT(A) and the Tribunal, according to us, no substantial question of law arises for our consideration. Appeal closed.
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2023 (12) TMI 984
TP Adjustment - building design services rendered by assessee - assessee had taken recourse to the ratio of operating profit and total cost in arriving at the PLI - Tribunal justification in rejecting the Profit Level Indicator (PLI) (which is a ratio of operating profit to total cost) adopted by the AO - as submitted that since separate segmental accounts were not available, it was difficult to segregate the cost incurred by assessee in the deployment of employees concerning AEs and non-AEs - HELD THAT:- As assessee had maintained segmental accounts, and accounts vis-a-vis salary expenditure were maintained project-wise, the employees deployed with regard to the transactions entered with AEs were identifiable. The conclusion arrived at by the DRP that common employees were allocated was a finding that did not emerge from the record. The Tribunal evidently was of the view that the employees deployed with AEs and non-AEs were identifiable as the accounts were maintained project-wise.The view taken by the DRP that hourly worksheets of employees were not maintained was unsustainable, as there was no such requirement in law. This conclusion was reached by the Tribunal also for the reason that salaries to employees were not paid on an hourly basis. Given the aforesaid findings of fact, in our view, the Tribunal correctly concluded that the PLI had been properly computed by the respondent/assessee. Tribunal justification in rejecting M/s Korus Engineering Solutions Pvt. Ltd. as a comparable - According to us, the DRP made no attempt to establish as to how Korus was functionally comparable with assessee. It is for this reason perhaps that the Tribunal stated that the information which was obtained from the website of Korus was sketchy and therefore Korus could not be used as comparable to benchmark international transactions entered into between the respondent/assessee and its AEs. Having regard to the foregoing, we are of the opinion that the Tribunal has returned findings of fact and adopted the correct approach qua both issues, and hence no interference is called for with the impugned order. No substantial question of law arises.
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2023 (12) TMI 983
Reopening of assessment u/s 147 - Capital Gains arising out of the sale in respect of Thiruporur land - A Power of Attorney was executed by the Petitioner and petitioner states that she has not received any amount subsequent to the execution of Power of Attorney - as apart merely because the Sale Deed was executed by the Power Agent, it will not create any liability for payment of Capital Gains for the Assessment Year 2017-2018. It is because the petitioner received entire sale consideration at the time of execution of Power of Attorney itself - HELD THAT:- This Court is of the considered view that since the petitioner has taken a stand that the entire amount of sale consideration was received on 16.12.2015 that would be the date for receipt of the sale consideration by the petitioner either for a sum of Rs. 50,00,000/- (Rupees Fifty Lakhs only) or a sum of Rs. 1,04,64,000/- (Rupees One Crore Four Lakhs Sixty Four Thousand only) as alleged by the Respondents. In view of the admission of this aspect by the Petitioner by virtue of oral submission and by virtue of filing of the additional affidavit, this Court is of the considered view that the Impugned Notice of the 1st Respondent dated 31.03.2022 as well as Impugned Assessment Order dated 29.03.2022 are liable to the set aside. Accordingly, the same are set aside. It is made clear that in the event if the petitioner takes a different stand in future that any of the Capital Gains arising out of the sale of the Thiruporur property has to be considered for Assessment Years 2017-18 in which case, the Respondents are at liberty to initiate proceedings against the Petitioner. Since, the matter is pending before the Appellate authority pertaining to the Assessment Year 2016-17, the Appellate authority shall consider this aspect with regard to the receipt of sale consideration and decide the same for the Assessment Year 2016-17.
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2023 (12) TMI 982
Revision u/s 264 - Seeking revision since the payment of interest in excess of 12% to a partner disallowed in the hands of partnership firm - HELD THAT:- Under the Income Tax Act, the firm and the individual partners are different entities. The disallowance of expenditure in the case of one entity does not entitle the other entity (recipient) to claim deduction of the disallowed expenditure. In this case assessee has actually received interest and obtained benefit to that extent. In view of the above, the petition u/s. 264 of the assessee considered devoid of any merit and hereby rejected. Therefore, there is no scope for interfering with the Impugned Order in the present writ petition.
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2023 (12) TMI 981
Unaccounted land transactions carried out - Incriminating documents in the form of duly written and signed Sauda Chithi found and seized during the search and seizure action carried out by the Department - ITAT Deleted the addition - substantial question of low or fact - Whether ITAT is justified in deleting the addition of relying upon, the decision of Shri Pravinchandra Dahyabhai Umrigar [ 2022 (5) TMI 1479 - ITAT SURAT] without appreciating the fact that addition was made on the basis of incriminating documents, showing unaccounted land transactions carried out by the assessee, found and seized during the course of search proceedings? HELD THAT:- As decided in the case of Shri Pravinchandra Dahyabhai Umriger [ 2022 (5) TMI 1479 - ITAT SURAT] the sauda chithi is a dumb document as far as the assessee is concerned. Hence, the additions cannot be made on the basis of such dumb documents. High Court must make every effort to distinguish between a question of law and a substantial question of law. In exercise of powers under Section 260A, the findings of fact of the Tribunal cannot be disturbed. It has to be kept in mind that the right of appeal is neither a natural nor an inherent right attached to the litigation. Being a substantive statutory right, it has to be regulated in accordance with law in force at the relevant time. The conditions mentioned in Section 260A must be strictly fulfilled before an appeal can be maintained under Section 260A. Such appeal cannot be decided on merely equitable grounds. A finding of fact may give rise to a substantial question of law, inter alia, in the event the findings are based on no evidence and/or while arriving at the said finding, relevant admissible evidence has not been taken into consideration or inadmissible evidence has been taken into consideration or legal principles have not been applied in appreciating the evidence, or when the evidence has been misread. See Madan Lal Vs. Mst. Gopi Anr. [ 1980 (8) TMI 204 - SUPREME COURT] , Narendra Gopal Vidyarthi Vs. Rajat Vidyarthi [ 2008 (12) TMI 724 - SUPREME COURT] . We have gone through the observations made by the Tribunal while passing impugned common order. We have also considered the submissions canvassed by learned Standing Counsel for the revenue. If the facts of the present case are examined on touch stone of the decisions rendered by the Hon ble Supreme Court as observed hereinabove, we are of the opinion that the present appeals do not involve any substantial question of law.
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2023 (12) TMI 980
Deduction u/s 11(1) denied - corpus donation received - contention of the assessee is that the Trust received donation of Rs. 4,69,603/- and credited the same in the income and expenditure account under the head donation in cash or kind and specifically it was transferred to the Milan Mandir Building Fund, as the said donation was received for Milan Mandir Building Fund - HELD THAT:- Considering assessee submission that this is not case of transferring the funds to other funds and in fact the assessee trust have transferred the donation in the event for which it was received in respect of directly credited the fund in the balance sheet, the assessee has first credited it to income and expenditure account and subsequently transferred the said fund to the fund account for which it has received the said amount. In the balance sheet also, the same is reflected in the specific fund i.e. fund related to Milan Mandir Building Fund. Such donation received for the specific purpose i.e. Milan Mandir Building Fund and also invested for the said purpose/said fund as per the provisions of section 11(1)(d) r.w.s. 11(5) in the schedule bank for which the assessee has submitted the bank account therefore this aspect was not taken into consideration by the CIT(A). CIT(A) is doubting that there is a signature only one trust of income and expenditure account and no signature of any trustee on balance sheet is not justifiable for disallowing the genuineness of the funds. Thus, the Assessing Officer as well as the CIT(A) was not justified in making the addition. Appeal of the assessee is allowed.
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2023 (12) TMI 979
Disallowance of deduction u/s 80-GGA - donation made by the assessee to Navjeevan Charitable Trust - claim of the assessee that at the time of making of aforesaid donation Navjeevan Charitable Trust was duly approved u/s 35-AC - HELD THAT:- As under section 80-GGA assessee is entitled to claim a deduction in respect of any sum paid in the previous year to a public sector company, local authority, association, or institution approved by the National Committee for carrying out any eligible project or scheme under section 35-AC. Further, Explanation-1 to section 80-GGA(2)(bb) further provides that the deduction to which the assessee is entitled of any sum paid to the aforesaid authority shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee the approval granted has been withdrawn or the notification notifying the eligible project or scheme referred to in section 35-AC has been withdrawn. Section 35-AC of the Act provides that expenditure incurred by an assessee by way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project or scheme be allowed as a deduction. Since the relevant provisions of the Act, applicable to the present case, specifically debars denial of deduction claimed by the assessee merely on the ground of subsequent withdrawal of approval or notification under section 35-AC of the Act, therefore we find no merits in denial of deduction under section 80-GGA of the Act in the present case. Further, even though the Revenue has claimed that Navjeevan Charitable Trust has been involved in a bogus transaction of accommodation entry and the learned CIT(A) has also made various allegations against the assessee in the impugned order, however in the present case the impugned addition is based on the denial of deduction under section 80-GGA of the Act merely on the basis of subsequent withdrawal of notification u/s 35-AC of the Act and there is no material available on record to support the findings of the learned CIT(A). Accordingly, the impugned order upholding the denial of deduction claimed under section 80-GGA of the Act is set aside. As a result, grounds raised in assessee s appeal are allowed.
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2023 (12) TMI 978
Levy of penalty u/s 271AAB - assessee has inflated his agricultural income, which would have been otherwise offered under any other head of income - Whether additional income declared in the return of income cannot be termed as undisclosed income ? - difference between undisclosed income or concealed income - assessee replied that the addition was made on account of estimation of yield of cotton crops grown during that period, which by no means can be termed as undisclosed income as there is no nexus between additional income declared by the assessee and seized materials by the department - HELD THAT:- A plain reading of the explanation and definition of undisclosed income clearly shows that the undisclosed income could be represented money, bullion, jewellery or other valuable articles or things or any unrecorded entry as per documents found or any false entry recorded in the books of accounts, etc. There is no such reference of money, bullion, jewellery or any other items mentioned in the above definition of undisclosed income were mentioned either in the assessment order or in the penalty order by the A.O. The assessee s offer of additional income, which does not amount to undisclosed income as per the above definition. The A.O. has not brought on record any material which points to the undisclosed income as defined u/s. 271AAB. Whereas CIT(A) in his order refers to the questions stated in the statements recorded u/s. 132(4) of the Act, namely assessee s son marriage expenses. In our considered view, any disclosures made in the course of search and statement recorded u/s.132(4) itself cannot be construed as undisclosed income as per the definition provided in the Act. There is no incriminating material found by the Revenue on the alleged additional income offered by the assessee. Thus the levy of penalty u/s. 271AAB is against the provisions and inbuilt definition in the Act. Therefore the same is not sustainable in law. We hereby delete the levy of penalty levied u/s. 271AAB(1)(b) - Decided in favour of assessee.
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2023 (12) TMI 977
Legality of second revision notice of 263 order passed by Ld. PCIT - subsequent revision of original assessment order on another issues - Scope of the first notice for revision u/s 263 of the Act cannot be enhanced by way of issuance of subsequent notice by Principal CIT - Whether once the assessee has satisfied the Ld. PCIT that the assessment order is not erroneous and prejudicial to the interest of the Revenue with respect to reasons recorded in the first notice, then whether the PCIT is permitted to revise the original assessment order on another issue, not forming part of the initial notice, on the basis of which 263 proceedings were initiated? HELD THAT:- We agree with the contention of the Ld. D.R. that there is no specific prohibition under Section 263 of the Act which prohibits the Ld. PCIT to give a finding with respect to any other aspect of the assessment order, if from the records it is find that the assessment has over-looked this issue. Admittedly in this case, the Assessing Officer had no plausible reason to explain the lack of inquiries with respect to non-deduction of TDS under Section 194C of the Act and there was no reason why disallowance under Section 40(a)(ia) of the Act was not made while framing the impugned assessment year. Further, in absence of any specific restriction on the powers of Ld. PCIT during the course of 263 proceedings itself, which were admittedly not barred by jurisdiction i.e. the second notice dated 04.02.2022 was not barred by period of limitation of two years as prescribed under Section 263 of the Act, we find no infirmity in the order of Ld. PCIT under Section 263 of the Act, so as to call for any interference. Appeal of the assessee dismissed.
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2023 (12) TMI 976
Revision u/s 263 - as per CIT AO had not conducted any inquiries or verification in respect of cash deposit after 11.11.2016 in HDFC bank account at the time of finalization of assessment, which is against the Explanation 2 of Section 263(1) - HELD THAT:- It is clearly seen from the SFT returns filed by the assessee u/s. 285BA of the Act, every cash transaction is reflected with the name of the person, with full postal address, nature of transaction and the amount of transaction, the same are placed before us by both Banks. As further seen from notices issued u/s. 142(1) that various details called for by the A.O. in above notices were duly complied with by the assessee by furnishing the details and also clarified with further details as requested by the AO. Thus in our considered opinion, the AO has made necessary enquiries before passing the assessment order. The other contention of the Ld. PCIT that the A.O. failed to verify the cash deposits in HDFC Account - The assessee also produced the bank statement of the above account, during the demonetization period. Perusal of the same clearly shows that there were no cash transaction in the above current account as alleged by the Ld. PCIT, whereas the entire transactions were done through either cheque or NEFT mode. So the very basis of invoking 263 on the ground that the cash deposits in HDFC Bank itself, is baseless. AO has made detailed enquiry before passing the assessment order on the cash transaction during the demonetization period. PCIT partially looking into the assessment records and initiated the Revision proceedings on the ground that the assessee failed to submit evidences in support of the cash deposits, which is factually incorrect. PCIT failed to consider the other reply letters filed by the assessee. Unless both the ingredients i.e order must be erroneous in nature; and the error must be such that it is prejudicial to the interest of Revenue are present in a given case, it is not legally permissible for a Commissioner to initiate suo motu proceeding under section 263 of the Act, the same has been upheld by Hon'ble Supreme Court in case of Malabar Industrial Co. Ltd[ 2000 (2) TMI 10 - SUPREME COURT] An assessment cannot be revised if there is no jurisdictional error in the order or if it has been passed after due application of mind or in case, where PCIT has a view different from that taken by A.O. Therefore we have no hesitation in quashing the Revision order passed by the Ld. PCIT. Thus the Grounds raised by the assessee are hereby allowed.
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2023 (12) TMI 975
DRP direction without quoting Mandatory DIN - whether the subsequent generation of DIN will suffice as the requirement of the CBDT Circular which mandates quoting of DIN in the body of communication/order? - HELD THAT:- On perusal of the directions of the DRP it is very much clear that there is no mention of DIN generated for the said directions. In the letter dated 13.09.2023 the DRP stated that directions were up-loaded on system on 7.06.2022 for which a DIN was generated by the system but whereas no such DIN which was generated on 7.06.2022 was mentioned in the body of the directions. Generation of DIN for the directions of the DRP was separately communicated through letter dated 17.06.2022. Whether the subsequent generation of DIN will suffice as the requirement of the CBDT Circular which mandates quoting of DIN in the body of communication/order came up for consideration before the jurisdictional High Court in Brandix Mauritius Holdings Ltd. [ 2023 (4) TMI 579 - DELHI HIGH COURT] Communication/order passed in violation of the Circular of the CBDT without mentioning the DIN in the body of the order or without taking prior approval from the Chief Commissioner/Director General of Income Tax when there are exceptional circumstances in not quoting the DIN in the body of the order such communication/order was held to be invalid and shall be deemed to have never been issued. See ASHOK COMMERCIAL ENTERPRISES VERSUS ASSISTANT COMMISSIONER OF INCOME TAXATION CENTRAL CIRCLE 2 (4) MUMBAI [ 2023 (9) TMI 335 - BOMBAY HIGH COURT] As the Revenue could not show us any exceptional circumstances for not quoting the DIN number in the DRP order, we hold that the DRP order is invalid and consequently the final assessment order passed by the AO u/s 143(3) r.w.s.144C(13) of the Act pursuant to such invalid directions is deemed to have never been issued and thus bad in law.
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2023 (12) TMI 974
Royalty receipts - amount received from Indian entity - characterizing payment received by the assessee during the relevant previous year as royalty and taxing at 10% of gross receipts - submissions of the assessee is that amount is received by the assessee towards providing facilities to Volvo Indian entities and by such arrangement they (Indian entities) do not use or obtain a right to use the copy right in any of the software/business software/ application owned and executed by the assessee - HELD THAT:- The Hon ble Delhi High Court in the case of EY Global Services Ltd. [ 2021 (12) TMI 571 - DELHI HIGH COURT] following the judgment of Engineering Analysis Centre of Excellence (P) Ltd. [ 2021 (3) TMI 138 - SUPREME COURT] held that payment received for providing access to computer software to its member firms located in India, does not amount to royalty liable to be taxed in India under the provisions of the Income Tax Act, 1961 and the India-UK DTAA . Thus the authorities below committed an error in taxing the impugned receipts as royalty . Grounds raised by the assessee are allowed.
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2023 (12) TMI 973
Validity of final assessment order based on draft assessment order - Draft assessment order passed coupled with the Notice of demand u/s 156 and followed by notice u/s 274 rws 271(1)(c) - HELD THAT:- According to the provisions of Section 144C (1) AO is required to pass draft of the assessment order in case of impugned assessee. But here draft assessment order is accompanies with Notice of demand u/s 156 and followed with a show cause notice for levy of penalty u/s 274 r.w.s. 271 (1) (c) of the Act. Both Notice of demand and penalty proceedings are further followed by subsequent communication. Therefore, it is merely not an error but for all practical purposes, the AO passed the final assessment order instead of Draft Assessment order. In penultimate paragraph also AO mentions section 144 (13) of the Act. Both the draft assessment order and the demand notice are dated 30-11-2018. Now the issue is squarely covered against the revenue in case of Cisco Systems Services B.V [ 2023 (3) TMI 416 - KARNATAKA HIGH COURT] held that it is settled that demand notice stems out of an order of assessment and it is enforceable. It meets the assessee with civil consequences. The argument on behalf of the Revenue that the demand notice was not enforced is fallacious and noted only to be rejected. Mistake which the ACIT has done in passing the final order at the stage of draft order is not curable u/s 292B. Thus draft assessment order passed coupled with the Notice of demand u/s 156 of the Act and followed by notice u/s 274 rws 271(1)(c) of the Act makes the draft order as final. Thus, the draft assessment order dated 30-11-12018 passed by ld AO is invalid and further as the final assessment order is based on an invalid order, same is also quashed. Adjustment of international transaction of payment of royalty for use of trade marks to AES - As assessee has already withdrawn grounds No 10 to 13 of the appeal, respectfully following decision of coordinate bench in [ 2019 (8) TMI 1011 - ITAT PUNE] A.Y. 2008-09, we hold that total income of the assessee shall be the amount of returned income and added thereto amount of income agreed by the assessee in MAP proceedings.
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2023 (12) TMI 972
Income surrendered during survey - excess stock u/s 69B r.w.s. provisions of section 115BBE - nature and source of such unrecorded transactions and the necessary nexus with assessee s business - HELD THAT:- No doubt, these transactions were not recorded at the time of survey thus qualify as unrecorded transactions satisfying one of the essential conditions, at the same time, the assessee has provided the necessary explanation about the nature and source of such unrecorded transactions and the necessary nexus with assessee s business has been established, thus, it cannot be said that these are unexplained transactions thus, doesn t satisfy the second condition for invoking the deeming provisions of section 69B of the Act. There is no physical distinction between the accounted stock and unaccounted stock. No such physical distinction was found by the Revenue either. We therefore find that the difference in stock so found out by the authorities has no independent identity and is in terms of value terms only and thus part and parcel of entire stock, therefore, it cannot be said that there is an undisclosed asset which existed independently and thus, what is not declared to the department is receipt from business and not any investment as it cannot be co-related with any specific asset and the difference should thus be treated as business income. In light of aforesaid discussion and in the entirety of facts and circumstances of the case, the income of Rs 50 lacs surrendered during the course of survey cannot be brought to tax under the deeming provisions of section 69B and the same has to be assessed to tax under the head business income . In absence of deeming provisions, the question of application of section 115BBE doesn t arise and normal tax rate shall apply. The AO is thus directed to assess the income of Rs 50 lacs under the head Income from Business/profession and apply the normal rate of tax. Assessee appeal allowed.
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2023 (12) TMI 971
Deduction u/s 80IA (4) - Contractor v/s Developer - assessee, a public limited company, is engaged in the business of development of infrastructure and other projects i.e., irrigation canal, road construction, water sewerage system etc. - AO held that the assessee, in the development of infrastructure project worked as work contractor and not as developer for which it received time to time payment from Government authorities for the work executed and invoice were accordingly issued, thus disallowed the claim of the assessee - HELD THAT:- Admittedly, the assessee has claimed deduction u/s 80IA(4) on 13 different projects of infrastructure facilities which has been disallowed by AO. On appeal by the assessee, CIT(A) allowed the claim of deduction by following the order of the predecessor CIT(A) in own case of the assessee from A.Y. 2004-05 to 2011-12 and 2013-14. CIT(A) also given categorical finding that there were no new projects. As such, the deduction on all the 13 projects were claimed in earlier years (in between 2004-05 to 2011-12). At the outset, we note that the revenue was in appeal before this tribunal in own case of the assessee on the same issue in A.Ys. 2008-09 to 2011- 12 [ 2023 (7) TMI 1081 - ITAT AHMEDABAD] The coordinate bench of this tribunal vide order dated decided the issue of deduction under section 80IA(4) of the Act in favour of the assessee stating if the literal meaning is drawn from the word of the developer and accordingly the deduction of the benefit given under section 80 IA of the Act is denied, then the object for which the provisions of section were brought under the statute will be defeated. Therefore, the provisions of section 80IA (4) of the Act should be read in such a way that the object of the statute should not be defeated. As assessee has undertaken the projects of infrastructure facility as envisaged under the provisions of section 80 IA(4A) of the Act in the capacity of the developer, we are inclined to hold that the assessee who is only engaged in the activity of development of infrastructure facility is eligible to claim the deduction u/s 80IA(4). Decided against revenue. Additional income offered in the survey proceedings - CIT(A) held that additional income was agreed to be offered on account of unverifiable business expenses therefore the business income will stand increase by such amount on which the assessee will be eligible to claim deduction u/s 80IA - HELD THAT:- We find that the addition of ₹18 crores was made on account of unverifiable expenses which were recorded in the books of accounts. As such, the expenses recorded in the books of accounts to the tune of ₹18 crores were not supported by the proper documentary evidence. Therefore, the assessee agreed to disclose such income in the income tax return. Admittedly, the addition made on account of unverifiable expenses is going to enhance the income of the assessee. Admittedly, the assessee has two categories of the project being eligible and non-eligible for deduction for deduction under section 80 IA(4) of the Act. Undeniably, the income of both the category of the project being eligible and non-eligible will enhance but the deduction under section 80 IA(4) of the Act on account of enhancement of income will be limited to the eligible projects as also observed by the ld. CIT-A in his order. Thus, we do not find any reason to interfere in the finding of the learned CIT-A. Hence, the ground of appeal of the revenue is hereby dismissed.
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2023 (12) TMI 970
Eligibility for deduction u/s 80P(2)(a)(i)/80P(2)(d) - interest income received - income of cooperative society engaged in carrying on the business of banking and providing credit facilities to its members - assessee is primary agricultural cooperative society - CIT(A) allowed deduction u/s 80P(2)(a)(i) and no deduction has been allowed u/s 80P(2)(d) on the interest/dividend income earned by the assessee on the investments made with the cooperative banks/scheduled banks - HELD THAT:- Assessee has received interest/dividend from cooperative societies and interest and dividend from cooperative banks - As per sec. 80P(2)(d) if the assessee has received interest/dividends from the cooperative society from its investments with any other cooperative society, the assessee is eligible for deduction, since, in this case the assessee had submitted statement of facts before the CIT(A) but the interest/dividend from cooperative society received by the assessee was not considered and examined. During the course of assessment proceedings, the assessee has also not brought into notice of the AO, therefore, for the limited purpose for determining the source issue is remitted back to the AO and if it is found that these income satisfies the requirement of sec. 80P(2)(d) of the Act, then it has to be allowed. Accordingly, this issue is remitted back for the verification to the AO and the assessee has to show the necessary proof of evidence for substantiating its case. We further note from the statement of facts that the assessee has received interest and dividend, from the cooperative banks. If the AO finds otherwise, the AO shall follow the judgment of Totgars Co-operative Sales Society[ 2017 (7) TMI 1049 - KARNATAKA HIGH COURT] accordingly the assessee will not be eligible for deduction u/s 80P(2)(d) on such interest income received after giving necessary cost for earning interest income. The AO is directed to give reasonable opportunity of being heard to the assessee. The assessee is also directed to produce necessary documents for sustaining its case and avoid to unnecessary adjournments for early disposal of the case. Deduction u/s 80P(2)(a)(i) - deposits in the bank account in view of the interest received on deposits - As assessee has submitted detailed written submissions vide letter dated 25/11/2019, which has been incorporated by the AO at para No.7.4, in which it has been stated that as per Karnataka Cooperative Society Rules 1960 and the orders passed by the Registrar of Co-operative Society it is mandatory for cooperative societies to maintain as specified percentage of deposits received from the members in savings bank account and also to maintain specified percentage of such deposits as investments/deposits in banks and he has also relied on other rules, therefore, the amount has been deposited in the bank account in view of the interest received on such deposits should be treated as attributable to the business income of the assessee and allowed deduction on such interest u/s 80P(2)(a)(i). This argument of the ld. AR of the assessee is not acceptable because the interest income received by the assessee is not from the activity of carrying on the business of banking or providing credit facilities to its members as per section 80P(2)(a)(i) Disallowance under various heads towards provisions made in the profit and loss account - Since, we have noted that the assessee has been allowed deduction by the CIT(A) u/s 80P(2)(a)(i) of the Act on the profits earned from the business of the assessee. The ld.AR of the assessee relied on Circular/notification No.37/2016 dated 02/11/2016 for any disallowance made under the profit and loss account of business or profession and if the assessee is eligible for deduction under Chapter IVA, then the deduction should be allowable as per the eligibility of the Chapter VIA of the I. T. Act. However, the ld.AR of the assessee could not establish before us that these provisions made were out of the business profit earned by the assessee during the year, therefore, this issue is also remitted back to the AO for verification that the provisions made by the assessee are part of the business profit of the current year or not. If it is found in order then the assessee is to be given benefit of the Circular cited supra. Accordingly this issue is allowed for statistical purpose.
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2023 (12) TMI 969
Computation of deduction u/s 80IB/80IC - allocation of advertisement expenses to the eligible units in the ratio of turnover of eligible units to the total turnover of the assessee - HELD THAT:- The assessee has relied on the word derived from as per the provision which according to the assessee relates to the expenses which have direct nexus pertaining to the eligible units for claiming deduction u/s. 80IB/80IC of the Act. The Revenue, on the other hand, has contradicted the same by stating that this interpretation of the assessee is not to be considered and only the allocation in proportion to the turnover of the eligible units to the proportion of the total turnover of the assessee company should be allocated for determining the profit eligible for deduction u/s. 80IB/80IC - Assessee has relied on the decision of the coordinate bench for A.Y. 2001-02 which has held that the assessee has itself allocated 50% corporate expenses including advertisement expenses of head office as per the rate of turnover of the eligible unit to the turnover of the assessee company which was duly certified by a Chartered Accountant. The co-ordinate bench has accepted the allocation made by the assessee and directed the ld. A.O. not to make any further allocation for computation of deduction u/s. 80IB of the Act. Decided in favour of assessee. Nature of expenses - advertisement expenses incurred on brand building - revenue or capital expenditure - HELD THAT:- As decided in Asian Pains (India) Ltd. [ 2016 (11) TMI 258 - BOMBAY HIGH COURT] wherein it was held that the expenditure incurred for advertisement in respect of a brand is to be seen whether the same was for a business which is to be commenced or which is for an ongoing business. Further, it held that the expenditure for advertisement of a brand of an existing ongoing business is in the nature of maintaining the brand and not for creation of a brand We hold that the expenditure incurred towards Brand Building is for the maintenance of the existing business and not for commencement of a new business and the same is held to be revenue expenditure in nature. Hence, ground raised by the assessee is allowed. Addition offered by the assessee in respect of impact of section 145A of the Act on inventories - assessee has offered tax as per the tax audit report clause 12B which is the difference between cenvat credit on closing inventories and cenvat credit on opening credit - assessee has contended that the tax auditor has inadvertently failed to consider the fact that while computing adjustment u/s. 145A the purchase and sales which also have to be adjusted as it was recorded in the note and mere adjustment in the value of opening and closing stock in isolation is contrary to the provision of section 145A of the Act as per the revised guidance note - HELD THAT:- As this additional ground raised by the assessee requires factual verification, we deem it fit to remand this issue back to the file of the ld. A.O. for verification of the facts. Hence, the additional ground raised by the assessee is allowed for statistical purpose. Accrual of income - exclusion of the amount of retention money included in sales, since the same has not accrued during the year, in computing total income under the normal provisions of the Act - HELD THAT:- We direct the ld. A.O. to decide this ground after verification of the facts as when the retention money has accured based on the decision of the Hon'ble Bombay High Court in the case of CIT vs. Associated Cables Pvt. Ltd . [ 2006 (8) TMI 135 - BOMBAY HIGH COURT] . The ground raised by the assessee is allowed for statistical purpose. Disallowance u/s. 14A read with Rule 8D - HELD THAT:- It is admitted fact that the assessee has offered the dividend income received out of the investment made in foreign company and the interest income out of the investment in Unit Trust of India and Krishna Bhagya Jala Nigam Ltd. The ld. CIT(A) has rightly directed the ld. A.O. to recompute the disallowance u/s. 14A of the Act on the basis of the decision of Godrej Boyce and Manufacturing Co.Ltd. [ 2010 (8) TMI 77 - BOMBAY HIGH COURT] where the assessee has mixed fund consisting of own fund and borrowed funds. We do not find any infirmity in the order of the ld. CIT(A) in directing the ld. A.O. to recompute the disallowance u/s. 14A of the Act. We, therefore, dismiss ground raised by the Revenue.
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2023 (12) TMI 968
Applicability of Section 115JB on the assessee Govt. company - scope of amendment brought in Section 115JB of the Act by Finance Act, 2012 effective from 01.04.2013 - HELD THAT:- We observe that the assessee company is a Government undertaking owned by Central Government and the State of Bihar West Bengal and the activities are governed by Damodar Valley Corporation Act, 1948, Central Legislation. Section 115JB(1) of the Act which provides special provisions for payment of tax by certain companies. We notice that prior to the amendment brought in by 01.04.2013 Section 115JB(2) of the Act read as Every assessee being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Part 2nd 3rd of Schedule VI to the Companies Act, 1956 (1 of 1956) . Considering amendments and the provisions existing prior to 01.04.2013, we notice that prior to 01.04.2013 the type of companies other than those which are required to prepare their financial statements in accordance with provisions of Part 2 3 of Schedule VI of Companies Act were not brought into the ambit and there was no clarification in the said provision. However, subsequent to the amendment by 01.04.2013 onwards, the remaining companies have also been brought into the ambit of Section 115JB of the Act. Hon'ble Jurisdictional High Court while dealing similar question of law in the case of the assessee for AY 2010-11 [ 2021 (12) TMI 1475 - CALCUTTA HIGH COURT ] held that prior to the amendment brought in Section 115JB of the Act by Finance Act, 2012 effective from 01.04.2013 Section 115JB of the Act was not applicable on the categories of companies like that of the assessee but post-amendment it is applicable by virtue of the amendment effective from 01.04.2013 providing that certain companies such as Insurance, Banking, Electricity which are allowed to prepare the profit and loss account in accordance with the Sections specified in their regulatory Acts, post 01.04.2013, are required to prepare profit and loss account in accordance with Schedule VI of the Companies Act for the purpose of computation of book profit under Section 115JB of the Act. Hon'ble Court has further, held that the said amendment effective from 01.04.2013 in Section 115JB of the Act is neither declaratory nor classificatory but are substantive and significant legislative changes applicable prospectively. As the years under consideration are AY 2012-13, AY 2016-17, AY 2017-18 AY 2018-19 and therefore, we are of the considered view that post-amendment with effect from 01.04.2013, the assessee company falls under the provisions of Section 115JB of the Act. Thus, the Revenue fails to succeed in its appeal for AY 2012-13 but for the remaining appeals for assessment years AY 2016-17, AY 2017-18 AY 2018-19, finding of ld. CIT(A) is set aside and the issue is decided in favour of the Revenue.
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Customs
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2023 (12) TMI 967
Seizure of petitioners gold jewellery and its disposal - Violation of Customs Act and the rights guaranteed to the petitioners under Article 300A read with Article 14 of the Constitution of India - legality of action of the respondents to sell / dispose of the gold jewellery of the ownership of the petitioners, as seized from them, without notice to the petitioners, and before an order of confiscation under Section 111 of the Customs Act, 1962 - HELD THAT:- It is not in dispute that on 14 January 2018 the petitioners arrived in India and were apprehended at the Mumbai Airport. The jewellery belonging to the petitioners which were gold bangles came to be seized by the Customs officials - The power of the Customs Authorities to seize the goods is conferred by Section 110 of the Customs Act and its application was subject matter of debate in the present proceedings - On a plain reading of Section 110 of the Customs Act, it is quite clear that it is a provision in relation to seizure of goods, documents and things. It provides that if the proper officer has a reason to believe that any goods are liable to confiscation under the Customs Act, he may seize such goods. What manner Section 110 of the Customs Act would be applicable to the seizure of the petitioners gold jewellery as seized on 14 January 2018? - HELD THAT:- There is something more fundamental in the present proceedings inasmuch as on 14 January, 2018 the gold jewellery in question was seized from the petitioners. Sub-section (2) of Section 110 provides that where any goods are seized under sub-section (1) and no notice in respect thereof is issued under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. Thus, the seizure having taken place on 14 January, 2018, six months period was to end on 14 July, 2018, however, what is significant is that a show cause notice for confiscation of such gold came to be issued to the petitioners on 6 July, 2018, however, the same was never served on the petitioners in a manner known to law - On a plain reading of Section 124 what would be implicit is that an order confiscating any goods or imposing any penalty can be passed only after the owner of the goods is issued a notice in terms of the said provisions interalia informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty and an opportunity of making a representation in writing is given to him within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty and a reaonsable opportunity of being heard. Sub-section (1A) of Section 110 cannot be read as absolute entitlement or authority with the proper officer to dispose of the items like gold in the absence of any cogent reasons, which would attract the ingredients of sub-section (1A) of Section 110. Such reasons as falling under sub-section (1A) are required to be intimated to the owner of the goods for the reason that ultimately the disposal of the goods would entail serious consequences of affecting the constitutional rights of the owner of the goods guaranteed under Article 300A of the Constitution, as the owner would be deprived of his property. This would be the basic requirement of law the proper officer dealing with any goods, which are merely seized and not confiscated would be required to be followed. It is well settled that the provisions of Article 300A of the Constitution are available to any person including a juristic person and not confine to only citizen and that the illegal seizure would amount to the owner being deprived of his right of property as contained under Article 300A of the Constitution of India. In the present case the gold jewellery belonging to the petitioners has been dealt, disposed of and sold in patent disregard to the basic principles of law as Articles 14 and 300A of the Constitution would ordain. This apart, even the provisions of the Customs Act stand violated not only in taking away the substantial statutory rights as the law would guarantee to the petitioners, on seizure of the petitioners gold jewellery but also in the manner in which the gold jewellery has been disposed of. In the present case, it is difficult to imagine as to what could be the reason for the Customs Officers to dispose of the goods hurriedly and with such lightening speed and by throwing to the wind the norms of fairness and reasonableness. This is not acceptable even from the reading of the provisions of Section 110. Any reading of Section 110 otherwise than what has been discussed, would amount to foisting draconian, reckless and/or unfettered authority on the Customs Officers conferring a licence to commit illegality - such substantive provisions of the Customs Act cannot be rendered nugatory, by recognizing unguided and unfettered powers being conferred under Section 110 on the Customs Officers, to dispose of the seized property, till the orders of any confiscation attains finality, unless there are strong reasons which would justify any such action when tested on such constitutional and legal parameters, and that too on the satisfaction of the officers to be reached only after hearing the owner of the property. There are no manner of doubt that the petition needs to succeed. The question, however, is as to what can be the relief which can be granted to the petitioners in these circumstances, when there is no iota of doubt, in regard to illegality which has been committed by the respondents in depriving the petitioners of their valuable rights to property - the principles of law which would be required to be applied, is that once the action of the respondents is held to be void, ab initio, illegal and unconstitutional, there can be no second opinion that the rights of the petitioners in regard to illegal seizure would be required to be restituted. It is declared that the action on the part of the Assistant Commissioner of Customs in disposing of / selling the gold jewellery belonging to the petitioners subject matter of the present proceedings, is illegal and unconstitutional - The respondents are directed, to restore to the petitioners, equivalent amount of gold namely 1028 gms. and / or to compensate the petitioners by making payment of amounts equivalent to the market value of the said gold, as on date. Petition disposed off.
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2023 (12) TMI 966
Contempt of court - Continuous, repeated, deliberate and wilful disobedience by the respondents ( DRI officials ) - violation of stay order granted by this Court against launching of any kind of civil as well criminal prosecution with respect to the subject matter - possession of unsold gold jewellery brought back from a Trade Exhibition in a foreign country weighing about 51172 grams - prohibited goods or not - HELD THAT:-The manner in which the proceedings after proceedings are being foisted upon the petitioner and others besides the company in question, leave a lasting impression that there is a repeated, deliberate and contumacious attempt by the respondents officers to corner them from all angles, evidently to harass and prosecute the petitioner by whatever means in terms of purported action by intentionally over-reaching the directions of this Court. It goes without saying that the sanction accorded under Section 137 of the Act appears to be hit by the dictum propounded by the Supreme Court in the case of Canon India Pvt. Ltd. v. Commissioner of Customs [ 2021 (3) TMI 384 - SUPREME COURT] in which it was held that the DRI officers are not customs officers, and therefore, not proper authority in law to initiate proceedings under the Act. In the process, evidently again, the respondents appear to have been instrumental in the initiation of proceedings against the petitioner and others connected with the company besides the company itself by other agencies including the DGFT as well as the Central Bureau of Investigation [CBI]. There was a categorical direction by this Court vide order dated 12.04.2021 that no coercive process shall be initiated pursuant to SCN and the main file in question bearing No. F.No. DRI/HQ-G/338/VI/ENG-2/INT-NIL/2019 dated 26.09.2019. The filing of the complaint before the Court of learned CMM for initiating action under different provisions of the Act is based on sanction accorded by respondent No.1 arising from the same main file and by deliberately suppressing the directions and orders passed in favour of the petitioner. Evidently, the SCN arising out of the main file is under a cloud and once the very foundation is on a sticky wicket, the purported prosecution is not fathomable. The purported prosecution entails a heavy burden on the entire justice delivery system at a huge cost, time and efforts on the part of the Court after Court. This Court finds the respondents guilty of committing patent breach of the directions passed by this Court and holds them guilty for committing a civil contempt under Section 2(b) read with Section 11 and 12 of the CC Act. Let notice be issued to the respondent officials for the next date of hearing i.e., 14.02.2024 to show cause as to why they should not be punished under Section 2 (b) read with Section 11 and 12 of the CC Act for being in gross violation of the directions of this Court dated 12.04.2021.
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2023 (12) TMI 965
Levy of penalties under section 112 of the Customs Act, 1962 - possession of contraband or not - HELD THAT:- On going through the statements of the appellants which were recorded during the course of investigation, the appellants themselves have admitted that one Ayub Bhai has told them that the vehicle is carrying 120 pieces of gold which were kept in fuel chamber secretly concealed in the said vehicle. The said fact was in the knowledge of the appellants and at the time of interception of the vehicle, the appellants have made statement that they were not carrying any contraband goods with them, which shows that the mala fides of the appellants, in that circumstances, the penalty is rightly imposed by the adjudicating authority to meet the ends of justice and to teach a lesson to the appellants not to involve in such activities in future. There are no infirmity in the impugned order for imposing penalty on the appellants. The impugned order qua imposing penalties on the appellants of Rs.10.00 Lakhs and Rs.1.00 Lakh respectively, is upheld - Appeal dismissed.
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2023 (12) TMI 964
Recovery of amount refunded erroneously - export of goods - IGST paid at the time of export and the goods have been exported on payment of Customs duty - applicability of CBEC Circular F.No.390/Misc./30/2023-JC dated 02.11.2023 - HELD THAT:- It is not disputed by both sides that it is a case of refund of IGST and the appeal is filed under the Customs Act,1962 for erroneously refund of duty paid to the respondent. Admittedly, there is no refund of Customs duty involved in this case, it is a refund of IGST, which is not governed by the Customs Act, 1962. Therefore, this appeal is not maintainable under the Customs Act, 1962. The Revenue has filed this appeal in terms of Section 54 (3) of the CGST Act, 2017. Section 54 (3) of the CGST Act, 2017 is not applicable to the facts and circumstances of the case as it is a case of refund of input tax credit. Further, there is no other case is pending with regard to the respondent in litigation, therefore, on litigation seeking also, the respondent succeeds. There are no merit in the appeal filed by the Revenue, accordingly, the same is dismissed.
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2023 (12) TMI 963
Valuation of iron ore fines - Fe content - Value of iron ore fines was to be determined on the basis of Certificate of Inspection and Quality (CIQ) analysis - Fe content in iron ore fines exported - consequent determination of value for purposes of levy of export duty - whether the CRCL report can be accepted and the assessment of the export goods carried out based thereon? - HELD THAT:- In the present case, it nowhere comes on record that the sample of Customs House Laboratory were drawn in strict adherence to the BIS Standards, as also contained in the Board s Circular. Moreover, the sample is alleged to be drawn by the Customs Officer at the back of the appellant and without the knowledge of the exporter, which is against the statutory mandates provided under Section 144 of the Customs Act, 1962 - Since the report of the Customs Lab is cryptic and incomplete without showing the BIS Standard and protocol and method of testing, it is noticed that the appellant sought to cross examine the Customs Officer who had drawn the sample and the Chemical Examiner who had tested the sample. It is thus evident that the CRCL test report is not only cryptic, but it is also not clear whether the same was in accordance with the prescribed standards. The fact that the sample was tested nearly two months after its drawal and had not been stored in accordance with the prescribed conditions, the reliability of the test result, therefore is not only doubtful but also unreliable - It is also noted that the Board s Circular- 12/2014-Cus clearly states that the sample is to be drawn in accordance with the BIS standards. The coordinate bench of the Tribunal in M/s. Vedanta Ltd. Vs. Commissioner of Customs (Preventive) Bhubeneshwar [ 2023 (8) TMI 947 - CESTAT KOLKATA ] had held in that case that the samples were required to be tested as early as possible and had held the inordinate delay of over a hundred days as unforgivable. There are no legal substance in the order of the learned Commissioner (Appeals), and are of the view that the learned Commissioner was in error of law in passing the impugned judgement - appeal allowed.
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2023 (12) TMI 962
Revocation of licensed courier - no documents pertaining to KYCs (Know Your Customers) and POD (proof of delivery) were found - violation of Rule 12 (iv) of Regulation of CIER, 2010 - Adherence to the provisions laid in the Notification No.07/98-Customs (NT) dated 9.11.1998 or not - HELD THAT:- The respondent has failed to verify the correctness of IEC code and even identity of its clients. The respondent was aware of the use of same Aadhaar Number for all BOEs still the Authorized Courier nor to verify the said Aadhaar Number or did not verify the antecedent, correctness of Import Export Code (IEC) number, identity of its client. Further, the respondent during the time of uploading of the Bill of Entry failed to take note that the data entered was not correct - The respondent did not even bother to inform the said mistake to the Customs department, despite that KYC details filed by him in the Bills of Entry was not the same as was reflected in those Bills of Entry. Accordingly, the respondent has contravened the provisions of Regulation 12(1) (v) of CIER.2010. It is also observed that to ascertain as to whether the imported goods indeed reached the declared importers, a verification of genuineness of the PODs (Proof of Deliveries), submitted by the authorized courier and KYC was carried out by the Commissioner of Customs, ACC (Export), New Delhi through the jurisdictional Commissionerate(s) - Failure of delivery of the consignment to the consignee or denial of receipt of the consignment by the consignee that the addresses were found bogus during verification of genuineness of the PODs, proves that the imported goods were never destined to the consignees named in the BOEs and have been intentionally diverted. Respondent gave no information about the said mistake to the department nor ever took the plea that it was happening due to software error. From said statements above, it becomes clear that software was so designed under the instructions of respondent. GSTIN field showing Aadhaar number was directed by the respondent himself to be kept constant while software was developed. The edit option was with the respondent. He has failed to upload the correct edited information. Thus respondent cannot be allowed to take shelter of plea of software error . Thus, the alleged/impugned act was not merely lack of due diligence but was intentional misconduct. The verification report sufficiently established the fact that the respondent has imported consignments in the name of consignees who were not even aware of the fact that their identity has been misused by the respondent i.e. courier company for import purpose. The report is held cogent evidence to show that authorized courier has failed to verify the correctness of IEC code and even identity of its clients. As observed above, it was done intentionally by the respondent, hence is wrongly held to be the mere act of negligence. There is sufficient evidence on record to hold that the above said Regulations have been violated by the respondent. The violation invite revocation of courier licence as per Regulation 11. But the original adjudicating authority despite acknowledging the alleged violations has merely imposed penalty. Since the alleged act is proved to be intentional act of the respondent, mere imposition of penalty of Rs.50,000/- (fifty thousand) is disproportionate punishment - the prayer made by the appellant-department is accepted for revocation of courier registration of the respondent for committing intentional fraud while importing several goods in the name of those being gifts from Non Resident Indian (NRI) to their family member residing in India, which otherwise were not imported by them nor were meant for them. The findings under challenge are hereby set aside and the appeal of Department is hereby allowed.
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Insolvency & Bankruptcy
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2023 (12) TMI 961
Auction sale under the SARFAESI Act, 2002 - legitimacy of the transaction resulting from sale of the subject property through auction - Sale concluded while commencing the resolution process - HELD THAT:- The Liquidator (now representing the Corporate Debtor in liquidation), the erstwhile Director/Promoter of the Corporate Debtor as also the Bank does not dispute the factual position that the sale stood concluded before declaration of moratorium. No reason was cited to demonstrate as to why the sale certificate would be held illegal. No case has been made out on behalf of the respondents about any defect or default in forwarding the sale certificate in terms of Section 89(4) of the Registration Act, 1908. On the other hand, all the three respondents have concurred at the time of hearing on the point that the sale stood concluded. The present appeal shall stand allowed to the extent the properties in question are concerned. These properties cannot be treated to be liquidation assets of the Corporate Debtor for the purpose of further steps to be taken in the liquidation proceeding. The impugned order is set aside.
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2023 (12) TMI 960
Validity of Direction to the Resolution Professional to immediately handover the management of the Corporate Debtor to the CEO/Management of the Corporate Debtor - Power of NCLT where CIRP has been stayed - HELD THAT:- It is noticed that the Appeal filed by Mr. Navin Kumar Upadhyay- Respondent No.1 before the Hon ble Supreme Court challenging the order dated 16.12.2021 of this Tribunal is already pending. It is open for the Respondent No.1 herein who is Appellant before the Hon ble Supreme Court to pray such order as may be advised - it is also noticed that after the order of the Hon ble Supreme Court dated 25.02.2022 staying the CIRP, Resolution Professional has also filed an application before the Hon ble Supreme Court seeking certain directions and clarifications which application was directed by the Hon ble Supreme Court to be heard along with the hearing of the appeal which application is still pending and no order has been passed by the Hon ble Supreme Court. When the Appeal before the Hon ble Supreme Court filed by the Respondent No.1 is still pending, the Adjudicating Authority ought to have stayed his hands to issue any direction to hand over the management of the Corporate Debtor to the ex-management and the Adjudicating Authority ought to have relegated to parties to approach the Hon ble Supreme Court for any further order or direction. It is for the Resolution Professional to take decision in its wisdom as to how the Corporate Debtor should be allowed to continue as a going concern without taking any steps in the CIRP, in view of the interim order passed by the Hon ble Supreme Court dated 25.02.2022. Respondent No.1 virtually seeks his reinstatement of the post which is clear from the prayer made in IA No.4138-4139 of 2023 which has not been entertained in this Appeal and the Adjudicating Authority also ought to have stayed his hands from passing any order on the application filed by the parties which relates to CIRP of the Corporate Debtor. The Adjudicating Authority committed error in passing the order dated 30.05.2023. Application IA No.2403 of 2023 filed by Respondent No.1 as well as Application IA No.964 of 2023 filed by Resolution Professional before the Adjudicating Authority ought not to have entertained due to pendency of the Civil Appeal No.2662 of 2022 filed by the Respondent No.1 before the Hon ble Supreme Court. The order dated 30.05.2023 passed in IA No.2403 of 2023 and IA No.964 of 2023 set aside - appeal allowed.
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2023 (12) TMI 959
Validity of Resolution Plan - classification as made in Resolution Plan between payment to employees, is discriminatory and violative of provisions of Section 30, sub- section (2) of the Code or not - issuance of directions for redetermination of the CIRP cost by the CoC - withholding payment of CIRP cost to the Appellant, which payment was directed subject to appropriation towards amount found recoverable from such promoters/ KMPs in avoidance application, violative of Section 30, sub-section (2) of the Code or not - issuance of direction to CoC to pursue the avoidance application pending for adjudication before the Adjudicating Authority. Whether there is any discrimination in Resolution Plan in making payments to employees of the Corporate Debtor differently from those whose dues are upto Rs.10 lakhs and those whose dues are more than Rs.10 lakhs? - HELD THAT:- It is not the case of the Appellant that amount proposed to the Operational Creditor in the category of employees is less than the amount, which they would have received in event of liquidation of the Corporate Debtor. Hence, there are no error in the distinction of payment as contained in paragraph 3.3.2 of the Resolution Plan. The distribution to the employees, whose liquidation value was NIL falls within the commercial wisdom of the CoC and the said clause of Resolution Plan cannot be impugned on the said ground, nor the said proposal for payment is violative of Section 30, sub-section (2) (b) of the Code. Whether the Adjudicating Authority erred in issuing directions for redetermination of the CIRP cost by the CoC? - HELD THAT:- In the present case, it has not been shown that CIRP cost, which has been determined by the Resolution Professional for running the business of the Corporate Debtor was required approval of CoC under Section 28 of the Code. The Adjudicating Authority by the impugned order in paragraph 6.2 has held that CoC shall be competent to determine the quantum of CIRP cost payable under the Plan. When the Plan has been approved by the CoC, which included payment of the CIRP cost and it is not shown that CIRP cost determined by the Resolution Professional required any approval under Section 28, there are no reason for redetermination of the CIRP cost by the CoC. The direction to CoC to redetermine the CIRP cost after approval of the Resolution Plan by the CoC is unsustainable - The audited Report was obtained by Resolution Professional to satisfy himself and to obtain a confirmation of his determination of the CIRP cost by an Auditor, which having been done, no further approval of the CoC was required for payment of CIRP Cost - the directions issued by the Adjudicating Authority empowering the CoC to redetermine CIRP cost deserves to be set aside and is hereby set aside. Whether the direction of Adjudicating Authority to withhold the payment of CIRP cost to the Appellant, which payment was directed subject to appropriation towards amount found recoverable from such promoters/ KMPs in avoidance application, is violative of Section 30, sub-section (2) of the Code and unsustainable? - HELD THAT:- The determination of CIRP cost and payment of CIRP cost to those who found entitled to receive the payments is an independent process from any recovery from Promoters/ KMPs, consequent to avoidance application filed by Resolution Professional under the provisions of the Code, including Section 66 of the Code. The directions, which were issued by the Adjudicating Authority in paragraph 6.5 was to withhold the claim of Promoters/ KMPs, falling for adjudication and before releasing the amount payable to such Promoters/ KMPs amount was directed to be detained and was made subject to appropriation towards amount found recoverable from such Promoters/ KMPs towards CIRP cost - The avoidance applications, which are pending before the Adjudicating Authority may also be expeditiously considered and decided, so as to not withhold the receipt of the payment by such Promoters/ KMPs for a long period. Whether the Adjudicating Authority erred in issuing direction to CoC to pursue the avoidance application pending for adjudication before the Adjudicating Authority? - HELD THAT:- After approval of the Resolution Plan, the Adjudicating Authority is fully empowered to issue any direction, as to how the avoidance applications has to be pursued and direction to pursue the avoidance applications by the CoC as issued therein is fully justifiable and does not warrant any interference at the instance of the Appellant. Appeal allowed in part.
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2023 (12) TMI 958
Approval of Resolution Plan - Scope of the remand back proceedings - The Adjudicating Authority on 06.09.2022 while disposing off application u/s 30(6) allowed the Resolution Professional to accept new Resolution Plans from unsuccessful Resolution Applicants and even previously non-participating entities who may want to submit a Resolution Plan for the Corporate Debtor. - HELD THAT:- The opinion of all member of the CoC as were represented in meeting dated 13.12.2023 in the minutes of meeting was also noticed, no useful purpose shall be served in issuing notice to other members of the CoC for the purposes of this appeal - liberty reserved to any of the member of CoC who may feel necessity to file an application, if so advised. The order of this Tribunal dated 09.02.2023 noticed, where this Court has disapproved the request to send matter again to CoC to reconsider the Resolution Plans. This Tribunal has directed the Adjudicating Authority to consider the plan approval application and decide the same within a period of three months. The impugned order has directed the matter to be taken before the CoC, which was not approved by this Tribunal in order dated 09.02.2023. Insofar as merits of the plan, it was to be examined by the Adjudicating Authority and take a decision in accordance with law. It is further observed that no purpose shall be served in prolonging the matter by the Adjudicating Authority by sending the matter to CoC and obtain opinion of CoC. The order impugned is unsustainable and is set aside. In result of setting aside the impugned order all consequential actions are also unsustainable. Subsequent actions including meeting of CoC conducted in consequence to the impugned are set aside - appeal allowed.
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PMLA
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2023 (12) TMI 957
Money Laundering - illegal transfer of funds out of India as import payments using forged Bill of Entries, Invoices, etc. - Disallowance of prayer of the applicant for an order under Section 267 of the Code of Criminal Procedure, 1973 for the production of respondent No. 1/original accused in a case being investigated by the applicant - HELD THAT:- It is apparent that the Division Bench of this Court granted bail to the respondent/accused in Criminal Writ Petition No. 1153 of 2023 on 5.12.2023. However, the bail bond has not been executed to date. According to Sections 441 to 444 CrPC, the accused cannot be released on bail unless a valid bond of the accused and surety are obtained in terms of the bail order. When the impugned order was passed, the bail order in favour of the respondent/accused did not exist. However, the Division Bench of this Court has now granted bail to the respondent/accused. In these circumstances, the trial Court shall determine the consequences of bail order, including the effect of non-execution of bail bond. The criminal application stands disposed off.
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2023 (12) TMI 956
Money Laundering - grant of bail - whether the period of house arrest cannot be taken into consideration for computing the total period of custody of the Petitioner and it needs to be excluded? - HELD THAT:- It is by now well settled and recognized principle of law that, prolonged custody amounts to infringement or violation of Article 21 of the Constitution of India of an accused. There is no debate that, incarceration in custody for long period without trial or completion of trial affects personal liberty guaranteed under Article 21 of the Constitution of India of an accused. In the present case, as per the submissions of the learned senior counsel for the Petitioner, admittedly the Petitioner is in custody for more than five years and eight months. The trial Court has not yet framed charge in the case and the likelihood of completion of trial of the Petitioner in the present case within reasonable time is very bleak The maximum sentence prescribed under Section 3 of the PMLA is 7 years. The period of incarceration undergone by the Petitioner has exceeded the substantial part of the prescribed sentence. It appears that, the Petitioner has already completed 3/4 of his sentence, if convicted and sentenced for minimum punishment of 7 years. The fact on record remains that, the Petitioner is in custody/house arrest for last more than five years and eight months for an offence wherein the maximum punishment prescribed is seven years. The Petitioner is released on bail during the pendency of the present Petition on fulfilment of conditions imposed - bail application allowed.
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Service Tax
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2023 (12) TMI 955
Levy of service tax - rental income, compensation amounts received and the legal expenditure displayed on the official Website of Telangana Waqf Board - petitioner-Waqf Board claimed that it has no property nor given any property for lease/rent for commercial purpose - jurisdiction of respondent No. 3 to pass impugned order - time barred by the period prescribed in Section 73(1) of the Act or not - HELD THAT:- The relevant assessment years in the impugned proceedings are between 2014-15 to 2017-18. Indisputably, from April, 2014 to 02.06.2014 as the State was united the jurisdiction was with the Principal Commissioner, Visakhapatnam. The petitioner is not disputing that after 02.06.2014 the respondent No. 3 is having jurisdiction to conduct proceedings over the disputed issue. It is not the case of the petitioner that the properties referred to in the impugned proceedings and the order are not within the territorial limits of the State of Telangana and within jurisdiction of the respondent No. 3 - the location of the tax payer is crucial to determine the jurisdiction. As the petitioner and the related properties are situated within the jurisdiction of the respondent No. 3 by the date of institution of proceedings we find no discrepancy of jurisdiction of the respondent No. 3 in the proceedings. The other essential contention put-forth is that, as part of cause of action is time barred, the entire proceedings shall fail is also not found acceptable, since the tax liability and its effect is distinct for every assessment period and each lapse would give rise to separate cause of action - Further as the limitation is a mixed question of fact and law, to arrive at just conclusion fact finding is essential, therefore appropriate jurisdiction for scrutinizing the relevant material, would be the appeal. In addition, though the petitioner has asserted that a part of time barred cause of action would effect rest of the period has remained unsubstantiated with any legal position. The petitioner is statutory body. As per the Wakf Act, 1955 the petitioner has to maintain the finances of the wakf institutions by exercising superintendence over the manager of the wakf/mutawalli and even in audit of the accounts of wakf properties. Further, Section 58 of the Wakf Act contemplates that the petitioner is liable in case of default by mutawalli who refuses or fails to pay any revenue, cess, or tax due to the Government or any local authority. In this statutory prescription, the petitioner s claim that it has no concern is found untenable. That apart though the petitioner asserted that the services are exempted from the tax no such material has been placed for consideration. Be that as it may, it is open for the petitioner to place the relevant material before the appellate authority and claim. The contention of the petitioner as to the jurisdiction has no merit and in absence of tenable grounds for judicial review under Writ Jurisdiction, the extraordinary jurisdiction cannot be exercised - petition dismissed.
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2023 (12) TMI 954
Recovery of service tax alongwith interest - sale and renting of space for advertising purposes from 01.05.2006 onwards - invocation of extended period of limitation. Liability of appellant to pay service tax - HELD THAT:- The appellant is a statutory corporation formed under Road Transport Corporation Act, 1950 and is an instrumentality of the State Government and is operating its buses for the convenience of travelling public within and outside the state of Himachal Pradesh. Further, the corporation is not directly engaged in advertising business and does not possess expertise as an advertisement consultant - In order to prove the payment of service tax, the appellant has also placed on record the affidavit of one Mr. Parveen Bansal, Director of M/s Pisces Communications Pvt. Ltd. alongwith the copies of Challan in order to establish the payment of service tax of Rs. 16,19,883/- in the Government Treasury. They have also placed on record the copies of various challans evidencing the payment of service tax by M/s Pisces Communications Pvt. Ltd. Since, the service tax of Rs. 16,19,883/- stands deposited by the agent of the appellant, the same cannot be demanded again from the appellant - the demand of service tax alongwith interest and penalty is not sustainable in law and therefore the same is set aside. Extended period of limitation - HELD THAT:- Since the appellant is a State Government Undertaking it cannot be inferred that they had an intention to evade payment of tax - the coordinate bench of the Tribunal in the case of M/S GD GOENKA PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX, DELHI SOUTH [ 2023 (8) TMI 995 - CESTAT NEW DELHI] has considered in detail the issue of limitation and what is required to be proved by the Revenue in order to invoke the extended period of limitation to confirm the demand - extended period of limitation cannot be invoked. The impugned order is not sustainable in law on merit as well as on limitation and therefore, the same is set-aside - appeal of the appellant allowed.
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2023 (12) TMI 953
Levy of service tax - amount retained by the appellant from fees of the Doctor on account of infrastructure support to the doctor - non compliance of the procedure of Rule 6(3A) can lead to a demand under Rule 6(3) despite the fact the appellant have reversed the amount in terms of Rule 6(3A) of Cenvat Credit Rules or not - extended period of limitation. Whether the appellant is liable to pay service tax on the amount retained from the fees received on behalf of the doctors for treatment of patient? - HELD THAT:- This issue is no longer res-integra as in the various judgments, it has been held that the part of the amount of doctor s fees retained by the respondent towards infrastructure support is not liable to payment of service tax - reliance can be placed in M/S SIR GANGA RAM HOSPITAL VERSUS COMMISSIONER OF SERVICE TAX, NEW DELHI [ 2020 (11) TMI 536 - CESTAT NEW DELHI] and M/S SIR GANGA RAM HOSPITAL, BOMBAY HOSPITAL MEDICAL RESEARCH CENTRE, APPOLLO HOSPITALS, M/S MAX HEALTH CARE INSTITUTE LTD VERSUS CCE DELHI-I, CCE ST INDORE, CCE ST RAIPUR, CST NEW DELHI AND CST DELHI VERSUS M/S INDRAPRASTHA MEDICAL CORPORATION LTD [ 2017 (12) TMI 509 - CESTAT NEW DELHI] - thus, the issue is settled in favour of the assessee, therefore, demand on this count is not sustainable. Whether demand of cenvat credit is sustainable under Rule 6(3) on the ground that the appellant have not followed the procedure such as intimation to opt for Rule 6(3A) was not given? - HELD THAT:- There is no dispute that the appellant have correctly paid the amount as required under Rule 6(3A) of Cenvat Credit Rules, 2004. The only lapse on the part of the appellant is that they have not given intimation to the department for opting of this option - merely for a procedural lapse when the amount was correctly paid under Rule 6(3A), no demand is sustainable - reliance can be placed in M/S. CRANES STRUCTURAL ENGINEERS VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2016 (8) TMI 387 - CESTAT BANGALORE] - it is settled that once the amount prescribed under Rule 6(3A) was paid by the appellant, no further demand is sustainable. Hence, the demand on this count is also not sustainable. As regard the issue raised on limitation, since the entire case has been decided on its merit, the aspect of limitation not taken up and the same is left open. The demand is not sustainable, hence, the impugned order is set aside - Appeal allowed.
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2023 (12) TMI 952
Issuance of second SCN invoking extended period of limitation - Recovery of service tax alongwith interest and penalty - Manpower Recruitment or Supply Agency Service - HELD THAT:- The present SCN dt. 22.4.2013 has been issued for the very same period. The work sheet enclosed along with SCN in page 51 of the paper book shows that the figures for the present demand under MRSA service have also been obtained from ST-3 returns of the very same period filed by the appellant. It is brought out from these returns, that in the returns the appellant had declared exempted services for certain amounts. The present demand is raised under MRSA services and not WCS on the basis that these amounts shown as exempted are taxable under MRSA services as it involves supply of labour. The work orders issued by M/s.Comtech, M/s.Espee Tech M/s.D.R Associates show that the work orders are for executing welding, fabrication works at site - the department would have come across the figures declared as exempted services , while perusing the ST-3 returns for issuing earlier SCN by invoking extended period. Therefore all information when available before the department a second show cause notice alleging suppression of facts cannot sustain. The department when equipped with all facts as declared in the ST-3 returns ought to have initiated proceedings on all grounds in the first SCN itself. In regard to work order issued by M/s.Comtech to the appellant for whom welding, fabrication for ship building works were carried out a letter dt. 03.07.2008 is issued by M/s.L T Ltd. (customer) stating that the activity does not involve rendering of services and would fall under manufacture as under Section 2(f) of Central Excise Act, 1994. So also, on perusal of the work orders, the activity rendered by the appellant for the other two customers appears to be identical - The appellant is a sub-contractor of M/s.Comtech, M/s.DR Associates and M/s.Espee Tech. The issue as to whether sub-contractor is liable to discharge service tax was under litigation. During the relevant period, The Board vide its Circular No.23/3/97-ST dt. 13.10.1997, TRU letter F.No.341/18/2004-(pt) dt. 17.12.2004 had clarified that sub contractor is not required to pay service tax. The second show cause notice issued invoking extended period on the basis of very same ST-3 returns filed by appellant cannot sustain and requires to be set aside - the SCN is time barred. The impugned order is set aside - Appeal allowed.
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2023 (12) TMI 951
Refund of service tax paid - appellant was not able to furnish lorry receipts giving the details of Invoice/Shipping bill issued by the transporters - non-compliance with the condition in Notification No.17/2009-ST dt. 7.7.2009 - HELD THAT:- The department has given the details of the transportation charges in the SCN itself. The appellant has also furnished a Chartered Accountant certificate certifying the correlation with the transportation charges as well as the shipping bills. There is no dispute that these charges were paid by the appellant for export of goods. The non-production of lorry receipts is only a procedural infraction for which the substantive right of refund claim cannot be rejected. In the appellant's own case, the Commissioner (Appeals) for a different period has allowed the refund claim observing that the non-production of lorry receipt is a procedural infraction and that when the appellant as furnished Charted Accountant certificate, the same has to be accepted. The department cannot take a different view in similar situation of the same appellant for a different period. The rejection of refund claim on procedural grounds cannot be justified - the appellant is eligible for refund - the impugned order is set aside - appeal allowed.
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Central Excise
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2023 (12) TMI 950
Clandestine removal - paints and varnishes - manufacture of goods bearing the brand names REAL and NICE of another person - ineligible to grant SSI exemption - suppression of facts - extended period of limitation - HELD THAT:- Apparently and admittedly there is no retraction to the admissions that appellants were engaged in clearances/sale of manufactured goods without proper invoices. The fact of having any assignment deed to have been executed in November 2010 was not brought to the notice of the investigation team at the time of search on 13.09.2011. The said assignment deed bears notarization of 24.11.2011 (as recorded by Commissioner (Appeals) in Para 9 of the order under challenge) i.e. the date after the searches were conducted in the appellant s premises. Thus there are no infirmity in the order of the adjudicating authorities below when the said assignment deed as is stated to have been executed in favour of M/s. Real Industrial Coating (Appellant No. 1) to be an afterthought. The department has been meticulous in checking the records about brand names/trade marks from the portal for the purpose as is maintained by Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, Controller-General of Patent Designs and Trade Mark as recorded in Para 11 of the order under challenge. It is on record that during the period of investigation also the portal was still recording Shri Gulshan Kumar Matta as the brand owner instead of Shri Rambaksh Matta of M/s. Real Industrial Coating - there are no infirmity with the findings of authorities below that the brands REAL and NICE were the brands of a different person/third party than the manufacturer in the present case i.e. M/s. Real Industrial Coating was not the owner of these brands - the said exemption has rightly been denied to the appellants. It is also observed that all the appellants herein while being examined during the investigation have admitted that the goods in question were cleared without the cover of proper invoices. 40% of the goods thereof were sold and purchased on kacchi parchis. The said kacchi parchis were recovered from all the premises as were searched during investigation and were taken on record as relied upon documents. Those documents are held to be the sufficient corroboration to the said admission of the appellants which apparently has never been retracted - The appellants have failed to produce any document which may corroborate the authenticity of the assignment deed of 27.11.2010. No evidence is produced to falsify the website extracts - there are no reason to differ when these admissions have been accepted as the sufficient proof of appellants alleged guilt - In the light of the said admission the present becomes a case of suppression of fact, fraud and collusion. Hence, the department has rightly invoked the extended five years period of limitation. The show cause notice is dated 09.07.2015. The period of limitation (2 or 5 years, as the case may be) has to reckon from the relevant date, as is apparent from Section 11A(1)(a) and Section 11A(4) of Central Excise Act. As per Section 11A(3) of Central Excise Act, the period for issuing show cause notice shall be computed from the date of receipt of information to Central Excise Officer, about payment of duty, in writing, which shall be the date of filing returns - there are no reason to differ from the findings of the adjudicating authorities below that the show cause notice is issued prior the relevant date for the said period. Hence, the order to that extent is also sustainable. The order under challenge is held sustainable - Appeal dismissed.
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2023 (12) TMI 949
Wrongful re-credit of CENVAT credit while availing the exemption under the Notification No.56/2002 - recovery of erroneous refund - levy of penalty. It is the case of the Revenue that learned Commissioner has erred in as much as he did not impose penalty equivalent to the duty evaded in terms of Section 11AC. HELD THAT:- Whereas the Commissioner has confirmed the demand of wrongfully availed credit of Rs.1,05,61,543/- under Section 11A and imposed penalty of Rs.20,39,919/-. Reasoning given by Commissioner was that the time under which the issue was under Stay can be excluded. We are of the opinion that Section 11AC does not provide for any such exclusion. Penalty under Section 11AC is related to the amount of duty evaded. Learned Commissioner could not have upheld the invocation of Section 11AC and imposed reduced penalty. The wordings of the Section 11AC are clear and therefore, there is no scope for any doubt in this regard. The penalty is required to be imposed equal to the duty evaded or credit wrongfully availed or duty erroneously refunded. The impugned order is modified to the extent of increasing the penalty imposed under Section 11AC from Rs.20,39,919/- to Rs.1,05,61,543/-. The appeal is, accordingly, allowed.
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Indian Laws
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2023 (12) TMI 948
Dishonour of Cheque - present complaint was filed without appreciating that the petitioner was not responsible for the conduct of the business of the Company at the relevant time - complaint does not contain any specific allegation against the petitioner to attract sections 138 and 141 of the NI Act - violation of principles of natural justice - HELD THAT:- Section 141 of the NI Act provides for a constructive liability which is created by a legal fiction. Section 141 of the NI Act being a penal provision should receive strict construction and compliance. If the accused played insignificant role in the affairs of the company, it may not be sufficient to attract the constructive liability under section 141 of the NI Act. The petitioner is claiming that he was appointed as the Regional Sales Manager in the accused no. 1 with effect from 01.10.2015 vide offer letter dated 28.05.2015 at a monthly salary of Rs. 50,000/-. The accused nos. 2 and 3 are the first director of the accused no. 1 as per Memorandum of Association. If the petitioner was not responsible for affairs of the accused no. 1 despite being promoted as Additional Director of the accused no. 1, it can only be established and proved in accordance with law during the trial of the complaint under section 138 of NI Act. The petitioner has not placed or submitted any document which can reflect that the petitioner has never participated in conduct of business of the accused no. 1. The petitioner cannot be absolved from his liability qua the cheques in question by merely pleading that he was not responsible for day to day affairs and conduct of the business of the accused no. 1. The arguments advanced by the counsel for the petitioner are without any legal support. The present complaint cannot be dismissed qua the petitioner. The present petition alongwith pending application is accordingly dismissed.
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2023 (12) TMI 947
Dishonour of Cheque - Insufficient Funds - legality of judgment of acquittal - existence of legally enforceable debt or not - accused had issued the cheque in discharge of the liability of Surinder Singh and the learned Trial Court erred in ignoring this position - HELD THAT:- The absence of any agreement will not make the case of the complainant doubtful - the cross-examination of the complainant or his witness was insufficient to rebut the presumption and it was duly proved on record that the accused had issued a cheque in discharge of his liability. Learned Trial Court erred in holding otherwise. Hem Chand (CW-1) stated that the cheque(Exhibit C-1) was deposited with the bank. The cheque was dishonoured due to insufficient funds. He admitted in his cross-examination that the account of the accused was closed. It is apparent from the statement of this witness that the cheque was dishonoured due to insufficient funds, was not challenged in the cross-examination and has to be accepted as correct. Testimony of this witness will not make the case of the complainant suspect because the cheque was drawn on Oriental Bank of Commerce and the official of the said bank specifically stated that the cheque was dishonoured due to insufficient funds. Therefore, the next requirement that a cheque was dishonoured due to insufficient funds has been duly established - The complainant stated that he issued the legal notice (Ext. C-3) asking the accused to make the payment within 15 days. Postal receipts (C-4 and C-5) and acknowledgement (C-6) corroborates his testimony. The acknowledgement shows that the registered cover was returned after delivery; therefore, it is duly proved that legal notice was duly served. It was duly proved that the cheque was issued in discharge of the legal liability, which was dishonoured due to insufficient funds and the accused had not made the payment despite receipt of a valid notice of demand - the complainant has proved all the ingredients for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act. The learned Trial Court did not consider the presumption attached to the cheque and the suggestions made to the complainant and his witnesses. It had taken a view which could not have been taken by any reasonable person. The judgment of the learned Trial Court proceeds in ignorance of the settled position of law and the same is liable to be interfered with even in an appeal against the acquittal. The present appeal is allowed.
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2023 (12) TMI 946
Seeking immediate action in furtherance to the lock and seal notice and demolish the unauthorised construction of the building - HELD THAT:- When the matter is taken up for hearing, the learned Standing Counsel appearing for the Chennai Corporation/3rd respondent would state that the building in question is now under lock and seal and to settle scores between the parties, they have to approach the appropriate Forum. Seeking to contribute funds for completing the construction of the unfinished apartments and also to compensate the home buyers for the inordinate delay in completion of the construction and for other reliefs - HELD THAT:- It has been stated that though M/s. Vasavi Builders /25th respondent herein is a partnership firm, most of the financial transactions of Vasavi Builders with that of the Home Buyers were exercised in the Account of M/s.Vasavi Housing and Infrastructure Limited. Further, Section 60(3) of Insolvency and Bankruptcy Code 2016 clearly states that any case relating to the Corporate Debtor pending in any Court or Tribunal shall be transferred to the Adjudicating Authority (NCLT Chennai) dealing with the Insolvency Resolution Process or Liquidation Proceedings of such Corporate debtor. In the present case, the connected proceedings are pending before National Company Law Tribunal, therefore, any further action can be settled before NCLT. Petition closed.
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2023 (12) TMI 945
Professional misconduct - power of High Court to revise an order passed by the Council under Section 22 A of the Chartered Accountants Act, 1949 - HELD THAT:- A reading of the case of RADHEY SHYAM ANR JAGDISH PRASAD VERSUS CHHABI NATH ORS IQBAL KAUR ORS [ 2015 (7) TMI 376 - SUPREME COURT ] would to a conclusion that all Courts and Tribunals which are functioning in the territorial jurisdiction of this Court are subordinate to it. The control and working of the Subordinate Court while exercising their statutory appellate or revisional authority are subject to the jurisdiction of the Court under Article 227 of the Constitution of India. Despite the curtailment of the power of this Court to revise an order pursuant to the amendment to Section 115 of Code of Civil Procedure under Act 46 of 1999, the power of this Court to exercise superintendence and control over courts and tribunals and exercise revisional jurisdiction continues to be recognised by virtue of Article 227 of Constitution of India. Being a Constitutional Court, the power is inherent, as it were. An adjudication implies that there is a lis before the Court of Tribunal and the Tribunal decides the same after hearing both the parties. The mere fact that the parties are heard does not make a body - a Tribunal. Principles of natural justice have grown to such an extent that even without a body being a Tribunal, it has been called upon to comply with the principles of natural justice. The basis of this principle is attributed to the Act of the Almighty. God did not punish Adam, banishing him from Paradise, without hearing him. If principles of natural justice applies to Almighty, all the more it applies to his frail creatures. Therefore, the test is not whether the parties are heard and examined, but, whether there is a transfer of judicial power from the State to a body and that body is clothed with the power of adjudication of a lis. In case on hand, a professional misconduct not being a lis, the Board of Discipline cannot be held to be a Tribunal within the meaning of Article 227 of the Constitution of India. Consequently, it is not amenable to my revisional jurisdiction. Therefore, the Civil Revision Petition is dismissed as not maintainable.
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