TMI Tax Updates - e-Newsletter
April 23, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Validity of “summary of the order” - the Commissioner of State Tax Department are directed to issue appropriate guidelines/circular/notification elaborating therein the procedure which is to be adopted by the State Tax authorities regarding the manner of issuance of Show Cause Notice, adjudication and recovery proceedings, so that proper procedure is followed by the State Tax authorities in conduct of the adjudication proceedings, as huge revenue of the State is involved and it would be in ultimate interest of the Respondent-State of Jharkhand itself that the adjudication proceedings are conducted after following due procedure and process of law. - HC
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GST:
Seeking direction of exemption from personal appearance pursuant to summons issued to the petitioner - All such procedure as laid down therein will have to be followed by the respondents while recording the statement of the petitioner pursuant to summons issued under Section 70 of the Act of 2017. - HC
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Income Tax:
Mandatory filing of ITR - In case the turnover exceeds ₹ 60 Lacs (10 Lacs in case of profession) or TDS exceeds ₹ 25,000 or aggregate deposits in saving account exceeds ₹ 50 lacs - New Rule 12AB - Income-tax (Ninth Amendment) Rules, 2022
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Income Tax:
Validity of Reopening of assessment u/s 147 - respondent passed the order rejecting the said objections, on the premise that there are fresh tangible materials available at the hands of the assessing officer to reopen the assessment under section 147 - the learned Judge has granted liberty to the appellant to file reply/representation as to why the completed assessment proceedings deserves to be confirmed. Such a conclusion arrived at by the learned Judge, in our opinion, does not require any interference. - HC
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Income Tax:
Deemed dividend u/s 2(22)(e) - transaction between EIL and group companies - the CBDT has also taken a view vide CBDT Circular No. 19/2017 dated 12.06.2017 stating that where loans and advances are in the nature of commercial transactions, would not fall within the ambit of word ‘ advance’ in section 2(22) (e). - AT
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Income Tax:
Revision u/s 263 - Cash transaction which, inter alia, had formed one of the reason for reopening of the assessee's case, we find that the AO after duly verifying the bank statements of the assessee, had concluded that there were no such transactions carried out by the assessee during the year under consideration. - AT
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Income Tax:
Stay on realization of outstanding demand - the Assessing Officer may pursue the assessee for paying a part of the demand. However, no coercive action shall be taken by the Assessing Officer for recovery of the demand till the date of hearing of the appeal - AT
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Customs:
Revocation of Customs Broker License - The SCN did not even supply a copy of the communication from the DGARM to the appellant, let alone the details of its inquiries which led to the conclusion that the exporters did not exist. The entire case, therefore, is not built on conclusive evidence. - The Commissioner found it proper to deprive the appellant and its employees of their livelihood in such a casual and callous manner. The impugned order cannot be sustained and needs to be set aside. - AT
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Corporate Law:
Seeking restoration of name of company in the Register of Companies - Company had not filed their `Balance Sheet(s)’ and Annual Return(s)’ for more than 12 years - the `right to seek restoration’ of the name of the `company’ (to be entered in the `Register of Companies’) is not wiped out, as long as `twenty years’ have not lapsed, etc. - it is just and proper to restore the Appellant / Company’s name and that the failure / negligence / omissions on the part of the `Appellant’/`Company’ in not filing the `Statutory Annual Returns’ and `Financial Statements’ in time, can be saddled with a levy of costs, to prevent an aberration of justice and to promote substantial cause of justice. - AT
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Indian Laws:
Dishonor of Cheque - rebuttal of evidence - source of income/capacity to lend - The accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent material namely by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. - HC
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IBC:
Initiation of CIRP - here is a case wherein the allegedly unpaid invoice already stands paid in the records of the Operational creditor himself, charging of the interest where no provision exists and all this being bereft of any worthwhile documentation Such matters serve as poor examples of the treatment of the IBC as an ad-hoc recovery mechanism and that too without adducing any substantive logic and fulfillment of the necessary documentation as required by the code provisions. - Tri
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Service Tax:
Refund of service tax paid - SEZ - In this case, the head office is located in Gurugram and it is not an SEZ unit. A portion of the services received in Gurugram are for the authorised operations of the appellant in its SEZ unit in Indore and to that extent, the ISD invoice issued by the head office distributes the service to the appellant. Since it is a service rendered for the authorised operations of the appellant to the extent indicated in the ISD invoice, to that extent, service tax cannot be charged in view of section 26 of the SEZ Act. The service tax paid to that extent needs to be refunded to the appellant. - AT
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Central Excise:
100% EOU - demand of differential duty - excess DTA clearance, over and above their DTA Sale Entitlement - when 100% EOU has submitted the permission to sell goods manufactured by them in DTA in accordance with para 9.9 of the Exim Policy, the Government cannot go beyond such permission and dispute the value of clearance allowed by the Competent Authority which in that case is Development Commissioner. - value of deemed export have also to be included for computing (FOB) value of exports - AT
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VAT:
Seeking to lift attachment of Bank Accounts - recovery of dues payable by the Company - when it comes to recovering the dues from the company towards liability incurred under the Act, the Department cannot proceed against the individual Director of the Company. It is not in dispute that the bank account is the personal account of the Director. - The attachment so far as the Current Account maintained with IDBI Bank stands hereby lifted - HC
Articles
Notifications
Customs-
34/2022 - dated
21-4-2022
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Cus (NT)
Rate of exchange of one unit of foreign currency equivalent to Indian rupees - Supersession Notification No. 32/2022-Customs(N.T.), dated 7th April, 2022
GST - States-
47/2021-GST - dated
16-3-2022
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Assam SGST
Seeks to exempt taxpayers having Aggregate Annual Turnover upto ₹ 2 crores from the requirement of furnishing
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FTX.56/2017/Pt-V/75 - dated
24-1-2022
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Assam SGST
Assam Goods and Services Tax (Fifth Amendment) Rules, 2021
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FTX.56/2017/Pt-V/70 - dated
24-1-2022
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Assam SGST
Seeks to rationalize late fee for delay in filing of return in FORM GSTR-4. [FTX.56/2017/Pt-II/97 dtd. 01/02/2018]
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FTX.56/2017/Pt-V/69 - dated
24-1-2022
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Assam SGST
Seeks to amend Notification No. FTX.56/2017/Pt-I/449 dated the 19th August. 2020
Income Tax-
41/2022 - dated
21-4-2022
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IT
Special court designates in the State of Tamil Nadu for the purpose of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act u/s 280A of IT Act and 84 of Black Money Act.
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40/2022 - dated
21-4-2022
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IT
U/s 280A(1) of IT Act 1961, Central Government, in consultation with the Chief Justice of the High Court of Patna designates Special Court in the Patna.
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39/2022 - dated
21-4-2022
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IT
U/s 280A(1) of IT Act 1961, Central Government, in consultation with the Chief Justice of the Delhi High Court, designates Special Court in the Tis Hazari Court, Delhi
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38/2022 - dated
21-4-2022
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IT
U/s 280A(1) of IT Act 1961, Central Government, in consultation with the Chief Justice of the High Court of Rajasthan designates Special Court in the Rajasthan
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37/2022 - dated
21-4-2022
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IT
Income-tax (Ninth Amendment) Rules, 2022
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34/2022 - dated
19-4-2022
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IT
U/s 280A(1) of IT Act 1961, Central Government, in consultation with the Chief Justice of the High Court of Kerala designates Special Court in the Kerala
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32/2022 - dated
19-4-2022
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IT
U/s 280A(1) of IT Act 1961, Central Government, in consultation with the Chief Justice of the High Court of Allahabad designates Special Court in the Uttar Pradesh
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2022 (4) TMI 1027
Provisional attachment of the bank accounts of the petitioner - case of petitioner is that mandatory provisions of Rule 159 of CG ST Rules, 2017 have not been followed at all - Section 83 of the CGST Act, 2017 - HELD THAT:- Put up as a fresh case before the appropriate Bench on 27.04.2022 .
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2022 (4) TMI 1026
Validity of summary of the order as contained in Form-GST DRC 07 dated 11.09.2020 - Rule 142(1) of the GST Rules - specific case of the petitioner is that no show cause notice was ever issued to the petitioner and even in the summary of the show cause notice, no time line was provided as to when the petitioner was to submit its reply - Whether the very initiation of the adjudication proceeding without issuance of show cause notice is void ab initio and any consequential adjudication order passed thereto is nonest in the eye of law? - HELD THAT:- The said issue has already been settled by a decision of Coordinate Bench of this Court in the case of M/s NKAS Services Private Limited Vs. State of Jharkhand and ors, [ 2021 (10) TMI 880 - JHARKHAND HIGH COURT ]. In the aforesaid matter of NKAS Services Pvt. Ltd., in respect of an identical situation where only a Summary of Show Cause Notice was issued and Adjudication Order was passed pursuant thereto, this Court has observed that the impugned show cause notice as contained in Annexure-1 does not fulfill the ingredients of a proper show-cause notice and thus amounts to violation of principles of natural justice, the challenge is entertainable in exercise of writ jurisdiction of this Court. The present case is squarely covered by the aforesaid decision of this Court and the law laid down in the case of NKAS Services Pvt. Ltd. is fully agreed upon and, accordingly, it is held that the Adjudication Order is non est in the eye of law, as the same has been passed without issuance of proper show cause notice and, thus, amounts to violation of principles of natural justice. From the facts of the present proceedings, it would transpire that on 14th March, 2020, Form GST DRC 01 was issued without specifying any date of hearing and, thereafter, straightaway, an Adjudication Order was allegedly passed on 13th August, 2020 fastening liability of tax, interest and penalty upon the Petitioner. From the order sheet, it is evident that no opportunity of personal hearing was granted to the petitioner and the purported Adjudication Order was passed on 13.08.2020 i.e. on the first date itself after issuance of the summary of show cause notice. This itself clearly reveals that the entire adjudication proceedings have been carried out in stark disregard to the mandatory provisions of the GST Act and in violation of the principles of natural justice and, thus, the Adjudication Orders, allegedly dated 13.08.2020, are liable to be quashed and set aside on this ground also. There is serious lacuna in the proceeding conducted under the JGST Act which has ultimately entailed adverse consequences upon the petitioner. Vide our order dated 10th March, 2022, we have directed respondent Nos. 3 and 4 to appear before us with complete records and has further communicated our order to the Commissioner, State Tax Department also so that the matter can be looked at from the level of the Commissionorate as it reflects on the Tax Administration within the State - the Commissioner of State Tax Department are directed to issue appropriate guidelines/circular/notification elaborating therein the procedure which is to be adopted by the State Tax authorities regarding the manner of issuance of Show Cause Notice, adjudication and recovery proceedings, so that proper procedure is followed by the State Tax authorities in conduct of the adjudication proceedings, as huge revenue of the State is involved and it would be in ultimate interest of the Respondent-State of Jharkhand itself that the adjudication proceedings are conducted after following due procedure and process of law. The summary of show cause notices, both dated 14.03.2020, Adjudication Order Dated 13.08.2020 and summary of orders, both dated 11.09.2020, issued against the petitioner in both the writ petitions, are hereby, quashed and set aside - Application allowed.
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2022 (4) TMI 1025
Request for enabling of filing of GST TRAN-1 - Input tax credit - it is alleged that neither there is attempt to file Tran-1 return nor there are any technical glitches at the time of filing TRAN-1 return at GSTN common portal - HELD THAT:- Since the input tax credit equivalent to cash meant for being used for discharging the tax liability, transition of the input tax credit cannot be restricted or denied merely because there were technical difficulties. In case, the respondents are unable to permit the petitioner to file TRAN-1 belatedly, they have to credit the corresponding amount in the electronic cash register of the petitioner, provided such credit remained unutilized on the cut-off date. This Writ Petition is disposed off, by directing the respondents to verify whether indeed the petitioner had any input tax credit on the date of the accident i.e., 01.12.2016. The monthly returns, which would have been filed for the months of October and November 2016 would show the quantum of unutilized input tax credit on input service tax and capital goods credit. Petition disposed off.
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2022 (4) TMI 1024
Seeking direction of exemption from personal appearance pursuant to summons issued to the petitioner - Section 70 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Taking note of the directions issued by Their Lordships in the Hon ble Supreme Court in the case of PARAMVIR SINGH SAINI VERSUS BALJIT SINGH OTHERS [2020 (12) TMI 1222 - SUPREME COURT], would observe that even in the matter of issuance of summons under Section 70 of the Act of 2017 for personal appearance and recording of statement, certain procedure has to be followed as stated therein. All such procedure as laid down therein will have to be followed by the respondents while recording the statement of the petitioner pursuant to summons issued under Section 70 of the Act of 2017. The allegation with regard to high handed action against son of the petitioner could not be subject matter of this petition - Petition disposed off.
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2022 (4) TMI 1023
Right to utilize the credit balance in the personal ledger account - words 'cenvat credit' so mentioned under Section 140 of the Central Goods and Service Tax Act, 2017 and 'Tax Credit' in the Trans-I form covers the credits available in PLA account for necessary credit under the Central Goods and Service Tax Act, 2017 - HELD THAT:- Without commenting anything on merits of the claim of the petitioner, since the petitioner is willing to pursue his application for refund before the competent authority, writ petition is disposed of. Petition disposed off.
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2022 (4) TMI 983
Service of SCN - no reference of the adjudication order in the order sheet - it is submitted that adjudication order has been passed separately and kept along with record - HELD THAT:- It transpires from submission that no proper show cause notice was issued under Section 74(1) of the JGST Act though a summary of show cause notice was issued in Form GST DRC-01 on 14th March, 2020 and the next order is drawn on 14th August 2020 when DRC-07 i.e. summary of the order has been ordered to be issued. It has been recorded in the order dated 10.03.2022 that the summary of the order in Form GST DRC-07 issued on 11th September, 2020 Annexure-23 refers to the adjudication order as dated 11.09.2020, whereas the adjudication order is dated 13th August, 2020. Let the matter be listed under the heading for orders on 31.03.2022.
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Income Tax
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2022 (4) TMI 1020
Exemption u/s 54 - investment in residential property under the allotment deed registered - HELD THAT:- The judgement passed by the Coordinate Bench in the matter of Shriniwas R. Desai [ 2014 (1) TMI 883 - ITAT AHMEDABAD] wherein it was held that there is no restriction on the buyer from incurring any construction expenditure on improvisation or supplementary work of ready-made unit. The additional expenses so incurred would be eligible for qualifying investment u/s 54. Taking into consideration the entire aspect of the matter particularly when the assessee has incurred expenditure for making the new property habitable within the stipulated time as framed by the provision of law and particularly when such expenditure has not been doubted by the authorities below respectfully relying upon the ratio laid down by the Coordinate Bench as narrated hereinabove the assessee is found to be entitled to the exemption as the expenditure incurred. The order of addition made by the authorities below is, thus, found to be devoid of any merit and, thus, deleted. Assessee s appeal is, therefore, allowed.
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2022 (4) TMI 1019
Disallowance of labour charges at 7.38% - HELD THAT:- There is no appearance from the side of the assessee despite notice. As such we are proceeding to dispose of the appeal ex parte qua the assessee. It is seen that the disallowance out of Labour charges was sustained for the A.Y. 2008-09 at 7.38%. A categorical finding has been recorded that the assessee accepted such an order and did not agitate it in further appeal before the Tribunal. Admittedly, the expenses under the head Labour Charges, both - Others and Job work , were not properly supported by vouchers. Considering the entirety of the facts and circumstances of the instant case, we are satisfied that the disallowance sustained by the ld. CIT(A) at 7.38% is just and fair. We, therefore, uphold the impugned order on this score. Ad hoc disallowance of various expenses at 10% - AO observed that the assessee incurred certain expenses, like, Telephone, Travelling, Factory expenses, Machine maintenance, Petrol expenses, Vehicle repair etc., which were not properly supported by vouchers - HELD THAT:- As the expenses incurred by the assessee under the respective heads, taken note of by the AO at last page of his order, were either not supported by proper vouchers or had personal element. Considering the fact that the disallowance has been sustained at 10% in the earlier years, we approve the view taken by the ld. CIT(A). Invocation of provisions of section 145(3) - HELD THAT:- In view of the fact that the expenses were not properly vouched and were made on the basis of self-prepared vouchers, we are satisfied that the AO was justified in invoking the provisions of section 145(3) of the Act. This ground fails. Assessee appeal is dismissed.
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2022 (4) TMI 1022
Reopening of assessment u/s 147 - recorded reason that the expenditure on account of payment in question as referral to doctors being an expense prohibited by law and is disallowable under explanation 1 to Section 37 (1) - HELD THAT:- Considering the submission of the parties, aims and object of the amended Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, Explanation 1 to Section 37 (1) of the Income Tax Act, 1961, Circular No. 5/2012 dated 1st April, 2012 issued by Central Board of Direct Taxes and the judgment of the Hon ble Supreme Court in the case of M/s Apex Laboratories Pvt. Ltd.[ 2022 (2) TMI 1114 - SUPREME COURT] our answer is in negative to the question as to whether Petitioner hospital is eligible and entitled to get deduction on expenditure by way of commission to the doctors as referral to doctors for referring patients for treatment in its hospital as business expenditure under Section 37 (1) of the Income Tax Act, 1961? It is not entitled for deduction on such expenditure as a business expenditure and in view of the relevant regulations of amended Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 under which receiving of the same by the medical practitioner is prohibited and violation of which invites punishment and disciplinary proceedings against doctors. In my considered opinion petitioner being a participant in an act which is an offence and is prohibited by law is not entitled for any deduction under Section 37 (1) of the Income Tax Act, 1961, and the aforesaid nature of expenses are disallowable under Explanation 1 to Section 37. Legality and validity of initiation of impugned proceeding for reopening of assessment under Section 147 and issuance of notices under Section 148 - Admittedly after expiry of four years from the end of relevant assessment year on the selfsame material facts which were already available before the assessing officer at the time of regular assessment and without recording of any omission or failure on the part of the petitioner to disclose fully and truly any material fact necessary for assessment before the assessing officer in course of regular assessment proceeding - in the facts and circumstances of the case initiation of the impugned proceeding under Section147 of the Income Tax Act, 1961, is bad and not sustainable in law and is liable to be quashed. Thus since condition precedent for invoking Section 147 of the Income Tax Act, 1961, for reopening of assessments after expiry of four years from the end of relevant assessment years has not been fulfilled and the impugned reopening of assessment is on mere change of opinion, the impugned notices under Section 148 of the Income Tax Act, 1961 in both the Writ Petitions relating to assessment year 2011-12 and 2012-13 are held as bad and not sustainable in law - Decided partly in favour of assessee.
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2022 (4) TMI 1018
Disallowance of claim of exemption of profit on sale/redemption of investment - HELD THAT:- This issue also stands squarely covered in favour of the assessee in the light of the Hon ble Calcutta High Court decision for A.Y. 2005-06 in the case of National Insurance Co. Ltd. [ 2017 (3) TMI 1054 - CALCUTTA HIGH COURT] wherein it has been held that in view of the deletion of Rule 5(b) and having regard to the legislative intent specified in the CBDT circular No. 528/1988 (being binding on the Tax Department), the profits on sale of investments should not be taxed. The Pune Bench of the Tribunal has taken cognizance of the said decision while passing order for A.Y. 2009-10 and 2010-11 - Before us, the ld. D.R also fairly accepted that this issue has been consistently held in favour of the assessee by its own order and that the view stipulated in the judgment of the Hon ble Calcutta High court is also in support of the assessee. Respectfully following the aforesaid judicial pronouncements Ground No. 1 of the assessee s appeal is allowed while ground No. 2 of the Department s appeal is dismissed. Disallowance of contribution to environment relief fund u/s 43B - HELD THAT:- The assessee is covered in favour of the assessee in view of the decision by the Coordinate Bench Pune in assessee s own case, the lead year being A.Y. 2006-07 [ 2019 (1) TMI 1332 - ITAT PUNE ] The said appeal was filed by the assessee in the second round of proceedings before the Tribunal, wherein in earlier round the matter was set aside to the file of the A.O. In the second round of assessment proceedings, the ld. A.O continued with disallowance u/s 43B of the Act. The CIT(A) upheld the order of the A.O. However, the Tribunal decided this issue in favour of the assessee vide its order dated 21-1-2019 [ 2019 (1) TMI 1332 - ITAT PUNE ] Disallowance of Risk Inspection Charges - Sr. Counsel submitted that on a conjoint reading of the orders of the Tribunal for A.Y. 2008-09, 2009-10, 2010-11 and 2011-12 there were no evidences of payments to Mr. S.K. Gupta and Mr. Sandeep Sitani and thus no disallowance was made and that further no disallowance can be made on an adhoc basis by the revenue authorities - HELD THAT:- That in the Tribunal s order for A.Y. 2009-10 [ 2017 (9) TMI 1981 - ITAT PUNE ] the Tribunal gives a categorical finding that there is merit in the plea of the assessee that in the absence of any adverse evidences collected during the year no disallowance can be made in the hands of the assessee in the instant assessment year. This signifies that there cannot be any disallowance on adhoc basis. Taking totality of the facts and circumstances and the rationale imbibed in the decision of the Tribunal in assessee s own case for other assessment years, we hold that no disallowance on adhoc basis is permissible in the realm of direct tax statutes. Hence, the disallowance of ₹ 5.00 crores made on adhoc basis by the A.O which was restricted by the ld. CIT(A) is hereby deleted. Hence, ground No. 3 of assessee s appeal is partly allowed and the ground No. 6 of the Department s appeal is dismissed. Disallowance made u/s 14A - Suo moto disallowance - HELD THAT:- Even if the assessee had made a suo moto disallowance that itself should not preclude the said assessee to make a prayer before the judicial forum that no disallowance be made. Before us, the ld. D.R accepted that the issue is covered in favour of the assessee by its own order of the Tribunal in earlier assessment years.A.O could not have travelled beyond sec. 44A of the Act in the First Schedule of the Act. Respectfully following the principles laid down by the Hon ble Delhi High Court in the case of Principal CIT Vs. Oriental Insurance Co. Ltd [ 2020 (3) TMI 507 - DELHI HIGH COURT] - Ground No. 3 to 5 of the Department s appeal are dismissed. Deduction in respect of Education Cess - HELD THAT:- As per Finance Act 2022, Education Cess is included as a tax component and is chargeable to income-tax. Health and Education Cess is to be levied at the rate of four percent on the amount of income tax so computed, inclusive of surcharge wherever applicable, in all cases. Thus, the previous position of claiming deduction on education cess now no longer holds good. In fact, as per clause 13 of the Finance Bill 2022, an amendment to sec. 40 of the Act has taken place, as effected now, by inserting new Explanation (3) to sub-clause (ii) of clause (a) of the said section to clarify that for purposes of sub-clause (ii) the term tax shall include and shall be deemed to have always included any surcharge or cess, by whatever name called, on such tax. This amendment shall take effect retrospectively from 1st April 2005 and will, accordingly apply in relation to the assessment years 2005- 06 and subsequent assessment years. In view thereof, we hold education cess is not allowed as deduction and it has to be charged to income-tax. The additional ground raised by the assessee is dismissed.
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2022 (4) TMI 1017
Deemed dividend u/s 2(22)(e) - AO's action in considering the commercial and business transaction between EIL and group companies which were undertaken by EIL for the purpose of carrying on its business as payment by way of loans and advances for the purpose of section 2(22)(e) - HELD THAT:- All these loans and advances given to different companies by other companies are in the nature of loans and advances out of commercial consideration and business expediency. The co-ordinate Bench has given detailed reasons which stated that company has purchased land in the name of related companies for the purpose of setting up Wind farm and therefore, there is loan and advances in the land holder companies for business purposes. While holding so, the co-ordinate Bench also relied on several judicial precedents as well as CBDT Circular No. 19/2017 dated 12.06.2017. Further, following the same decision of co-ordinate Bench in assessee s own case for AY 2012-13 [ 2021 (12) TMI 1335 - ITAT MUMBAI] ITAT has also deleted the identical addition. Departmental Representative could not show us any reason that how those decisions are not applicable in case of assessee for this year. Further, the CBDT has also taken a view vide CBDT Circular No. 19/2017 dated 12.06.2017 stating that where loans and advances are in the nature of commercial transactions, would not fall within the ambit of word advance in section 2(22) (e). In view of the above facts, respectfully following the decision of co-ordinate bench in assessee s own case for earlier years as well as circular of CBDT, we hold that the addition made in the hands of the assessee on substantive basis is not sustainable. The orders of the lower authorities are reversed and AO is directed to delete the deemed dividend under section 2(22)(e) - The grounds no. 1 to 3 of the appeal are dismissed.
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2022 (4) TMI 1016
Income from house property - Rental Income on property let out - rent received is after increment @ 15% and that the original rent as per agreement was reduced on account of surrender of area by the tenant. A copy of surrender lease agreement was filed - HELD THAT:- Even then the learned AO/CIT(A) alleged that the assessee did not prove that the surrender of the leased area was agreed to by both the parties. This cannot be accepted. The assessee brought to the notice of the learned AO/CIT(A) that the surrendered area is still in its possession and could not be let out to any other party as the Mall could not get success. The veracity of this assertion could be ascertained but nothing has been done. The assessee has all along declared the rent receipt on the basis of 32634.41 sq. ft. area occupied by the tenant Reliance Mediaworks Ltd. which has been accepted by the predecessor learned AO in the assessment order framed under Section 143(3) for the assessment year 2012-13 The assessee categorically denied receipt of rent over and above what is reflected in its books of accounts. Nothing has been brought on record to contradict the version of the assessee either by the learned AO or by the learned CIT(A). We, therefore, hold that rental income which has not been received by the assessee cannot be brought to tax. Accordingly, we delete the impugned addition made by the learned AO which has been confirmed by the learned CIT(A). - Decided in favour of assessee.
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2022 (4) TMI 1015
Employees contribution to EPF beyond due date by invoking Section 36(1)(va) - HELD THAT:- In our opinion, the CIT(A) already deleted the addition made on this count in para 4.2 of this order being so this ground of appeal is infructuous accordingly the same is dismissed. Accrual of income - Service Tax collected and not remitted to the Government account constituted as income - whether the assessee actually collected and received the amount and kept with him without depositing to Government exchequer.? - as argued assessee has not collected above service tax and only on collection, it should be payable to the Government exchequer - HELD THAT:- As we have to see whether the assessee has actually collected service tax and kept it with him, without remitting the same to the Government exchequer. AO recorded the finding that the assessee has actually collected the service tax from it customer and not remitted to the Government exchequer. Contrary to this, the Ld.AR made a plea that it has not been actually verified by the AO and without examining, the AO took a decision that it has been collected and same was confirmed by the CIT(A) in the ex-parte order. In our opinion, it has to be verified in the light of judgement of Hon ble Bombay High Court in the case of CIT Vs. Ovira Logistics P. Ltd [ 2015 (4) TMI 684 - BOMBAY HIGH COURT] Accordingly, we remit this issue to the file of AO to examine whether the assessee actually collected and received the amount and kept with him without depositing to Government exchequer. If the assessee actually received from its customers and kept it without depositing the same within due date of filing of return of income u/s.139(1) of the Act, then only the AO has to invoke the provisions of Section 43B and bring that amount to tax.- Appeal of assessee is treated as partly allowed for statistical purposes.
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2022 (4) TMI 1014
PE in India - Income deemed to accrue or arise in India - attribution of income arising from the contracts - Whether Project office of the assessee in India is its fixed place of business and Permanent Establishment as defined under Article 5(2)(c) of the Double Taxation Avoidance Agreement between India and the UAE? - HELD THAT:- AO merely followed the grounds of assessment on the basis of previous years assessments which have been set aside by the Hon'ble Delhi High Court in assessee's own case for the A.Y. 2007-08 to 2009-10. Hon'ble High Court [ 2016 (2) TMI 47 - DELHI HIGH COURT] has held that the question framed in the appeals preferred by the Revenue essentially pertains to the attribution of income arising from the contracts in question for the purpose of taxing the same under the Act. In the present case, we have concluded that the Assessee does not have a PE in India in terms of the DTAA, thus, the question of splitting the business profits of the Assessee arising from the contract into profits attributable to India and profits attributable to the Assessee overseas does not arise. Same has been relied by the Coordinate Benches in following years and so also by Ld. FAA. Accordingly, there is no substance in the grounds of appeal filed by revenue. The appeal of the revenue is dismissed.
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2022 (4) TMI 1013
Revision u/s 263 - CIT initiating proceedings on the basis of audit objection - reopening of assessment u/s 147 - though the assessee as per information gathered by the Assessing officer had carried out cash transactions and was in receipt of contract payments, however, he had failed to file his return of income for the year under consideration - HELD THAT:- As facts reveals beyond doubt that the AO had in the course of the assessment proceedings applied his mind as regards the reasons on the basis of which the case of the assessee was reopened by him and, had only after finding the claim/explanation of the assessee in order and to his satisfaction accepted the same. As observed by us, AO had duly verified the aforesaid claim of the assessee that his contract receipts/turnover qua the contractor, viz. M/s. Shafi Ahmed and had only after vetting the said claim on the basis of the latter's confirmations that were placed on his record and the bank statements of the assessee which duly supported his aforesaid claim, had accepted the same. Cash transaction which, inter alia, had formed one of the reason for reopening of the assessee's case, we find that the AO after duly verifying the bank statements of the assessee, had concluded that there were no such transactions carried out by the assessee during the year under consideration. We are unable to persuade ourselves to subscribe to the view taken by the Pr. CIT that the Assessing Officer had summarily accepted the claim of the assessee on the aforesaid issue in question. In our considered view, as the Assessing Officer while framing assessment vide his order passed u/s. 147 r.w.s. 143(3) had carried out necessary verifications, the same, even if are to be held to be inadequate would by no means justify the invoking of the revisional jurisdiction by the Pr. CIT u/s. 263 - On the basis of our aforesaid deliberations, we are unable to concur with the view taken by the Pr. CIT that de hors necessary verifications on the part of the AO as regards the reasons on the basis of which the case of the assessee was reopened u/s. 147 of the Act, his order passed u/s. 147 r.w.s. 143(3) of the Act was rendered as erroneous in so far it was prejudicial to the interest of the revenue within the meaning of Explanation-2 to Section 263 - Appeal of assessee allowed.
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2022 (4) TMI 1012
TP Adjustment - determination of Arm's Length Price of payment of Management Service Fee to Associated Enterprises (AE) - HELD THAT:- TPO has specifically mentioned that there are no changes in facts and circumstances of the issue. In the absence of any distinguishing feature in the facts of the immediately preceding year [ 2020 (3) TMI 175 - ITAT PUNE] vis- -vis the current year, respectfully following the precedent, we hold the international transaction of payment of management services fees was at ALP. - Decided in favour of assessee.
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2022 (4) TMI 1021
Validity of Reopening of assessment u/s 147 - proof of fresh tangible materials available at the hands of the assessing officer to reopen the assessment under section 147 - HELD THAT:- The assessment for the year 2014-15 in respect of the appellant firm was completed under section 143(3) on 07.10.2016. Subsequently, the respondent reopened the assessment under section 147 by issuing notice under section 148 of the Act, to which, the appellant filed its objections on 12.07.2021. Thereafter, as per the order of this court in [ 2021 (8) TMI 1294 - MADRAS HIGH COURT] at the instance of the appellant, the respondent passed the order rejecting the said objections, on the premise that there are fresh tangible materials available at the hands of the assessing officer to reopen the assessment under section 147 - The said order was put to challenge before the learned Judge[ 2022 (1) TMI 1230 - MADRAS HIGH COURT] which was dismissed, by the order dated 10.01.2022 impugned herein. We find no reason to interfere with the order of the learned Judge [ 2022 (1) TMI 1230 - MADRAS HIGH COURT] even prior to the passing of final order in the re-assessment proceedings. Judge has pointed out in the order impugned herein that the respondent has only indicated the reasons and justifications for reopening the assessment and has not come to a definite conclusion as to whether any case has been made out for re-computing the income of the appellant. Judge has granted liberty to the appellant to file reply/representation as to why the completed assessment proceedings deserves to be confirmed. Such a conclusion arrived at by the learned Judge, in our opinion, does not require any interference.
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2022 (4) TMI 1011
Stay on realization of outstanding demand - demand in dispute as a result of disallowance made under section 40(a)(ia) due to alleged non-compliance with the provisions of section 194D - HELD THAT:- As the issue in dispute appears to be covered in favour of the assessee by a number of judicial precedents. Therefore, we are inclined to grant expeditious hearing of the corresponding appeal of the assessee. Accordingly, with the consent of both the parties, Registry is directed to fix the appeal for hearing on 28.04.2022. Paper-books, if any, shall be filed by the parties sufficiently ahead of the date of hearing of the appeal, in accordance with the extant rules. Since, the date of hearing of the appeal is announced in the open court in presence of both the parties, issuance of separate notice for hearing to the parties is dispensed with. As regards the impugned demand, the Assessing Officer may pursue the assessee for paying a part of the demand. However, no coercive action shall be taken by the Assessing Officer for recovery of the demand till the date of hearing of the appeal, i.e., 28.04.2022. It is made clear, in case of any unnecessary adjournment being sought by the assessee, the interim protection granted to the assessee will be vacated and the assessee will also lose the benefit of early hearing of appeal.
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2022 (4) TMI 1010
Penalty u/s 271(1)(c) - AO failed to establish exact services provided by commission agent and claim of expenses was in connection with the business - HELD THAT:- It is settled law that penalty proceedings u/s 271(1)(c) of the Act is separate and independent. We are conscious of facts that in the quantum assessment, the addition has been upheld up to the stage of Tribunal. Facts remained the same that initial basis of disallowance of commissions payment is that it was on higher side comparative to the earlier year. Before the AO the assessee filed details of the commission s recipient, their PAN and the details of TDS deducted on payments of such commissions. No separate and independent investigation was carried out by the AO. So far as objections ld. DR for revenue that assessee failed to prove the services rendered by commission recipient, in our view those facts may be relevant for allowing/disallowing the commission payment, however, same is not relevant as far as levy of penalty under section 271(1)(c) is concerned. As in CIT vs. Reliance Petroproducts (P) Ltd.[ 2010 (3) TMI 80 - SUPREME COURT ] held that mere filing in incorrect claim which is not acceptable to AO would not lead to levy of penalty. Thus, in view of the above discussions, the grounds of appeal raised by the assessee is allowed.
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2022 (4) TMI 1009
Exemption u/s 11 - registration under section 12AA - proof of charitable activity u/s 2(15) - Whether applicant does not have intention even to start charitable/religious activities? - HELD THAT:- On perusal of audit account, it was noted that for Financial Year 2013- 14 to 2016-17, the assessee has not carried out any activities as per the objects of the trust. The assessee has neither carried out any charitable/religious activities nor established corpus to undertake the charitable activities. Thus, it clearly indicates that the applicant does not have intention even to start charitable/religious activities. No details were provided and were verification of the objects as per the trust deed. Therefore, the genuineness of the activities were not established. On the aforesaid observation that the assessee were to furnish documentary evidence to satisfy the genuineness of activities and that those activities are in consonance with the objects of the trust or institution. Accordingly, the ld. CIT(E) rejected the application vide order dated 28.02.2018. Admit by order of the ld. CIT(E), the assessee has filed present appeal before this Tribunal. None appeared of the assessee despite, the service of notices through registered post one more occasions. Therefore, we left no option accepted the hearing the submission of ld. Commissioner of Income tax-departmental representative (Ld. CIT-DR) for revenue and to decide the appeal on the basis of material available on record. We find merit in the submission of ld. CIT-DR for the revenue that assessee failed to prove necessary evidence to prove the genuineness of activities, if any carried out by the assessee in accordance with objects. Moreover, on perusal of the audited account for three preceding year source that assessee has not carried out any activities as per the object of the trust. Therefore, in view of the aforesaid observations, we do not find any merit in the grounds of appeal raised by the assessee. - Decided against assessee.
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2022 (4) TMI 1008
Exemption u/s 80P - Denying the exemption as principle of mutuality is absent in the cooperative society due to distinction in the rights of ordinary members and the nominal members - HELD THAT:- We find that assessee has submitted the details in support of claim of deduction U/sec 80P of the Act. The A.O. has observed that it is a mutually aided cooperative society and activities are confined to members only. Whereas the assessee being a cooperative society provided services to its nominal members who does not have equal rights compared to ordinary members and the concept of mutuality principle is nullified. CIT(A) was not satisfied with explanations of the assessee on the concept of mutuality and relied on the the Hon ble Supreme Court decision in the case of Citizen Cooperative Society [ 2017 (8) TMI 536 - SUPREME COURT] We considering the facts, circumstances and the ratio of the Hon ble Supreme Court decision do not find any infirmity in the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the assessee.
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Customs
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2022 (4) TMI 1006
Valuation - inclusion of amount paid in the nature of payment of royalty, in the transaction value or not - condition of sale or not - HELD THAT:- It is seen that there is no agreement between the appellant or the foreign supplier. It is then difficult to understand whether the royalty is a condition for sale of the imported goods. In the present case, the appellant contends that they have made provision for royalty but they have not actually paid any amount and that the amount was reversed in the year 2014 15. The learned counsel for the appellant has produced the financial statements for the respective years. They have also furnished the Chartered Accountant s certificate. Besides these, the entries in the ledger / books of accounts have to be examined. The matter requires to be remanded to the adjudicating authority who shall look into the aspect whether the appellant has paid royalty to the foreign supplier or not. In case, the appellant has not paid such amount, there is no question of including the same in the transaction value. Appeal allowed by way of remand.
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2022 (4) TMI 1005
Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - risky exporters involved in IGST refund frauds, whose exports were processed by the appellant as the Customs Broker - contravention of provisions of Regulation 10(n) of Customs Broker Licensing Regulation - HELD THAT:- In this case, there are no details in the SCN or in the inquiry report or in the impugned order as to how the DGARM came to the conclusion that the exporters did not exist and how after considering the defence submissions, the Commissioner came to a conclusion that the appellant had violated Regulation 10(n) of CBLR, 2018. This case has been made and the licence has been revoked not only taking the alleged communication from DGARM as conclusive proof that the exporters did not exist but also inferring from it that the appellant has not conducted the verification as per Regulation 10(n) of CBLR, 2018. The SCN did not even supply a copy of the communication from the DGARM to the appellant, let alone the details of its inquiries which led to the conclusion that the exporters did not exist. The entire case, therefore, is not built on conclusive evidence. The Commissioner found it proper to deprive the appellant and its employees of their livelihood in such a casual and callous manner. The impugned order cannot be sustained and needs to be set aside. The respondent shall restore the Customs Broker licence of the appellant within 10 days of receiving a copy of this order - Appeal allowed - decided in favor of appellant.
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2022 (4) TMI 1007
Maintainability of parallel proceedings - challenge primarily on the ground that simultaneous proceedings were initiated both under Regulation 20(2) and Regulation 22 of the Customs House Agents Licensing Regulations, 2004 - violation of principles of natural justice - HELD THAT:- The facts on record indicate that the petitioner had indulged in large scale fabrication of documents including the bill of entries and had appropriated huge amount and thus, violated the conditions of the licence and the provisions of the Customs House Agents Licensing Regulations, 2004. Under these circumstances, the petitioner was issued with a show cause notice, which culminated in the impugned order dated 13.08.2012. There are inculpatory statements of one of the importers that the petitioner Company had acted as Customs House Agent for clearance of the imported consignments and that the petitioner Company had indulged in fabrication of documents to evade the customs duty. The facts on record also indicate that there was evasion of duty to the extent of ₹ 5.52 lakhs as per the strength of fake documents generated by the petitioner. Therefore, there is no merit in the Writ Petition particularly, in the light of the fact that there is an admission of guilt by the Managing Director of the petitioner on 07.07.2011 - liberty granted to the petitioner to file a statutory appeal before the CESTAT within a period of 30 days from the date of receipt of a copy of this order. Petition dismissed.
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Corporate Laws
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2022 (4) TMI 1004
Seeking restoration of name of company in the Register of Companies - Section 252 (3) of the Companies Act, 2013 - HELD THAT:- Taking note of the fact that the Appellant / Company although, prepared the Financial Statements and got the same audited, but could not file the same for the Financial Year beginning from 2006-2007 till 2019-2020 (vide paragraph 7.3 of the instant Comp App (AT) No. 51 of 2022), keeping in mind yet another prime fact that the Appellant / Company had admitted its Bonafide mistake on its part, in non-filing of Balance Sheet and Annual Return and added further that the company is ready and willing to furnish all relevant documents for the defaulted financial year(s) before the Respondent/ROC, West Bengal with `Delay Fees that are applicable and in the teeth of settled legal position that the `right to seek restoration of the name of the `company (to be entered in the `Register of Companies ) is not wiped out, as long as `twenty years have not lapsed, etc., is of the considered view that on the basis of facts and circumstances of the entire conspectus of the present case, that it is just and proper to restore the Appellant / Company s name and that the failure / negligence / omissions on the part of the `Appellant /`Company in not filing the `Statutory Annual Returns and `Financial Statements in time, can be saddled with a levy of costs, to prevent an aberration of justice and to promote substantial cause of justice. The name is ordered to be restored - application allowed.
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2022 (4) TMI 1003
Application for condonation of delay of 1332 days - Seeking restoration of petition - ex-parte order or not - HELD THAT:- It is settled position that the Law of Limitation is founded on public policy to ensure that the parties seek their remedy without restoring to dilatory tactics. The Hon ble Supreme Court in ESHA BHATTACHARJEE VERSUS MANAGING COMMITTEE OF RAGHUNATHPUR NAFAR ACADEMY AND OTHERS [ 2015 (1) TMI 1053 - SUPREME COURT ] has also held that increasing tendency to perceive delay as a non-serious matter requires to be carved. Applicant submits that the Order passed by this Bench on 13/07/2017 was ex-parte but it is found from the records made available that the order of July 13, 2017 was not an ex-parte order as submitted by the petitioner. The attendance sheet of this Bench for hearing on 13.07.2017 annexed with shows the presence of the learned Advocates representing the Applicant/Petitioner. The other ground mentioned by the Applicant in the condonation application is that because of illness in her family, the applicant was unable to pursue or take steps in the said CP. But on the other hand it is found from the records made available from the Respondents that the Applicant was perusing other proceedings going on in different Fora including the Hon ble High Court at Kolkata and Gauhati, Civil Court at Jorhat and NCLT, Guwahati Bench, during the period from 2018 to 2021. There are no convincing reasons submitted by the Applicant to condone the inordinate delay of 1332 days - application dismissed.
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2022 (4) TMI 1002
Sanction of scheme of Amalgamation - Sections 230 and 232 of the Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening and dispensation with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed.
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Insolvency & Bankruptcy
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2022 (4) TMI 1001
Seeking liquidation of the Corporate Debtor - liquidation sought on the ground that there is no business activity carried on by the Corporate Debtor - HELD THAT:- After perusing the minutes of the COC meeting held on 23.02.2022, it is found that there is no business activity carried on by the Corporate Debtor. The Corporate Debtor filed its annual report with ROC up to FY 2009- 10. The realizable value of assets of Corporate Debtor is Nil. The CoC has also resolved by 100% voting share to liquidate the Corporate Debtor even before the expiry of the insolvency resolution process period. When no security is there and resolution has been passed in the CoC with 100 % voting share, it is not worth to continue the CIRP and increase the cost of the CIRP. Section 33(2) of the Code empowers the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where the resolution professional, at any time during the CIRP but before confirmation of the resolution plan, intimates the Adjudicating Authority of the decision of the CoC approved by not less than sixty-six percent of the voting share, to liquidate the Corporate Debtor. The Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with sub-section (1) thereof - application allowed.
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2022 (4) TMI 1000
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Corporate Applicant - existence of debt and dispute or not - HELD THAT:- The Reply filed by the Respondent No. 4 is devoid of any substance and merit. The submissions made by the Respondent No. 4 are denied to the extent that they are contrary to and/or inconsistent with the averments and/or submissions made in this Rejoinder and the Application. The Corporate Applicant has filed the Insolvency Application in compliance with all the requirements under Section 10 of the Code, read with IBBI (Application to Adjudicating Authority) Rules, 2016. As per section 10(3) of the Code, the Corporate Applicant is required to comply with the following requirements, which have been duly complied. As long as the application is complete and in line with the Code, the application under section 10 should be allowed. Application admitted - moratorium declared.
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2022 (4) TMI 999
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtor - existence of debt and dispute or not - Lack of proper documents - HELD THAT:- It is pertinent to mention that as per Annexure A the Applicant (Financial Creditor) has executed a Power of Attorney in the name of Mr. Dashrath Pandurang Sadaye to appear and to cause any proceeding against any person, firm, society, company, corporation, association or body corporate for adjudication as insolvent or bankrupt or for winding up. However, the Letter of Authority dated 10/12/2020 authorising Mr. Sudhir Kumar Senapati, Advocate to act on behalf of the Financial Creditor has been signed by one Mr. R.L. Chauhan, Deputy General Manager, SAMB. Kolkata. It is not clear as to who is the Authorized Representative for the Financial Creditor. The affidavit filed in support of the CP(IB)/46(KB)2021 is signed by Mr. Dashrath Pandurang Sadaye, whereas the authorization given to the Ld. Counsel is by another person. Hence, this Petition lacks proper authorisation from the Financial Creditor. Since the Application is incomplete, the Resolution Professionals' Report in this matter at this stage, need not be called for. In taking the decision, the fact is also noted that the Interim Moratorium in case of section 95 application kicks in from the date of the filing of the application. It should not appear that an incomplete application can also ensure that the interim moratorium should kick in from the date of filing, else wrong signals could be sent out to others. Petition dismissed.
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2022 (4) TMI 998
Seeking for replacement of the Interim Resolution Professional by a Resolution Professional - Section 22(3)(b) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The provisions of Section 22 of the Code require that the CoC would be competent to replace the IRP by another RP by a majority vote of not less than 75% of the voting share of the Financial Creditors. The CoC resolution dated 09.02.2022 is supported by 100% voting share as the Punjab National Bank is the sole Financial Creditor present in the CoC and the other members of the CoC do not have any voting rights. A copy of the Resolution dated 09.02.2022 along with minutes of the CoC meeting are annexed with the Application marked as ANNEXURE-A. The instant Application is filed through Mr. Devendra Kumar Pandey who is conversant with the facts of the case. He is a duly constituted attorney and is authorized to sign and verify the Application and to do the needful on behalf of the Applicant and by a General Power of Attorney dated 29.11.2011, the Special Committee of the Board of Directors of the Applicant Bank, constituted under Board Resolution No. 92 dated 22.03.2010, appointed Mr. Devendra Kumar Pandey, as an attorney in the said Power of Attorney, including, inter alia, the power to institute suits, to file appeals, revisions, writs, legal proceedings and defend the same. A Copy of the Power of Attorney dated 22.03.2010 is annexed with the Application marked as ANNEXURE-E. Shri Purshotam Gaggar is hereby appointed having Regd. IBBI/IPA-001/IP-P00487/2017-18/10875 as the RP of the CD replacing the present IRP Mr. Vakati Balasubramaniam Reddy with immediate effect i.e. from today as approved by the COC with 100% voting Payment of fees of outgoing RP - HELD THAT:- The COC is directed to clear the dues of the outgoing RP and CIRP cost as per the provisions of the Code. Application admitted.
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2022 (4) TMI 997
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - threshold monetary limit involved - HELD THAT:- The applicant is totally silent why the Operational Creditor did not file the case even after there was no reply by the corporate Debtor within 10 days from the receipt of the notice. The Operational Creditor has filed this application under Section 9 of the IBC only on 18/2/2022. The applicant is totally silent about the time taken for filing the Insolvency Proceedings (this application) i.e., about 1 year and 11 months. In the instant case, the case was filed on 18/2/2022 for a debt amount of ₹ 7,78,708/- which is less than the threshold amount as fixed by the aforesaid notification. In addition to that the applicant is claiming an amount of ₹ 6,00,000/-, it is not relevant to the facts to be considered against the present Corporate Debtor, they cannot do so for initiation of CIRP against the present Corporate Debtor. Application dismissed.
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2022 (4) TMI 996
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Non-performing asset - existence of debt and dispute or not - HELD THAT:- This Application was filed on 19.10.2021 and notice was issued to the parties. When the matter was listed for admission on 30th November 2021 Adv. Peer Mohammed Khan appeared through Video Conferencing and stated that he represents the Corporate Debtor and has undertaken to file the vakkalath. He has also taken time to file a reply statement. The matter was adjourned to 20th December 2021. However, none appeared for the Respondents and no vakkalath has been filed. Thus, this Tribunal directed the Financial Creditor to issue fresh notice to the Corporate Debtor and the matter was adjourned to 19th January 2022 - The learned counsel for the Financial Creditor stated that the proof of publication has already been filed by him. However, the Corporate Debtor did not appear, and hence the Corporate Debtor was set ex-parte vide order dated 08th March 2022. In the absence of Corporate Debtor, reliance placed on Section 5 (7) and (8) of Insolvency and Bankruptcy Code, 2016 to satisfy the definition of Financial Creditor and Financial Debt. Further, reliance placed on Section 7 of the Code to determine whether the process for initiation of CIRP was followed by the Operational Creditor or not. It also appears that the claim amount in this application is ₹ 1,08,58,311.16/- which satisfies the minimum requirement of ₹ 1 Crore to file an Insolvency Application. Therefore, in all counts, the instant Application deserves to be admitted. Application admitted - moratorium declared.
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2022 (4) TMI 995
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- The operational creditor has not denied that they were to invest as per the agreement/MOU which was last revised on 08.09.2017, the only ground taken in the pleadings and more particularly the emails is regarding existence of outstanding dues of the Corporate Debtor to the Operational Creditor. It is the case of the Corporate Debtor that due to nonpayment of the agreed amounts; they were put into financial difficulties. Initially the investment was to happen during the period 2012 to 2015 which was later shifted as per MOU between the parties to 2017 and 2018 and even that could not materialize. Annexure 1 (page-8 to 12 of application) provides the details of various invoices and debit notes which are said to be due and payable by the Corporate Debtor. The first date is 13.06.2017 and the last date of invoice/debit note is 18.03.2019. These dates mentioned supra are much later than the MOU dates which were 15.02.2012 and 08.09.2017. There exists a dispute between the parties which is much prior to issuance of the From-III Demand Notice by the operational creditor to the corporate debtor which relates to not investing the amounts in the share capital of the Corporate Debtor and not honoring their financial and contractual commitments and the differences in the accounts which are evident from the reconciliation statement filed by the Operational Creditor that invoices are disputed. Further, as per the decision of the Supreme Court in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited [ 2017 (9) TMI 1270 - SUPREME COURT] , this Tribunal need not be satisfied as to whether the said defense is likely to succeed or not and also need not examine the merits of the dispute. The fact that dispute truly exists between the parties in fact is sufficient for this Tribunal to reject the Application, so long as the said defense is not spurious, hypothetical or illusory. Thus, by perusing the documents filed by the parties, it is manifestly clear that the Corporate Debtor raised disputes much prior to the issuance of Form 3 Demand Notice and filing of this present application, this Adjudicating Authority is of the view that there exist a dispute between the parties even before the issuance of the Demand Notice and as such the present Application filed by the Operational Creditor is liable to be dismissed. Application dismissed.
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2022 (4) TMI 994
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Service of demand notice - statutory notice issued under Form -3 has been served without any annexures as mandated under the code - existence of debt and dispute or not - debt is more than or equal to the threshold limit under section 4 or not. Service of Demand Notice - HELD THAT:- The demand notice has been received by the corporate debtor is also not in doubt, as there is a reply by him to the subject notice on 24.01.19, acknowledging the receipt of the notice on 12.01.2019, albeit it is not an acceptance of the amount claimed but points out a deficiency in the claimed amount vis- -vis the invoices attached - The invoice which is said to be in default as attached with the notice under section 8 bears the no. BBRNKR/00212/12-13 dated 19.02.2013 and is amounting to ₹ 1,02,236/-, while the other invoice bearing no. BBRNKR/0057/17-18 dated 30.06.2017 for ₹ 525/-. However, the total of these two invoices works out to ₹ 102761/- only as against the claimed amount of ₹ 3,99,034.52 in Part IV of the Application in Form -5. Notwithstanding the difference in the amount claimed thus, the notice has been sent and received by the corporate debtor. Pre-existing dispute or not - HELD THAT:- There is virtually no correspondence from both sides that could throw some light on the issue of pre-existing dispute vis- -vis raising of a claim or even asking for payment by the operational creditor - Given the law laid down by Hon'ble Supreme Court in MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [ 2017 (9) TMI 1270 - SUPREME COURT ] the court held that mere 'existence of a dispute' is not enough and the Court has defined a 'genuine dispute' as bona fide and truly existing before the receipt of the demand notice/invoice, as the case may be, and that the grounds of its existence must be real and such conflict of claims or rights should be apparent from the reply to Demand Notice as contemplated by Section 8(2) of the Code. This not being so in the instant case, no ground of pre-existing dispute has been made out by the corporate debtor, as the Corporate Debtor disputed it for the first time through the reply to the demand notice dated 24.01.2019 which was after the prescribed 10 days period. As such, there is prima facie no existence of a pre-existing dispute. Whether the operational debt is due and payable? - HELD THAT:- There is nothing on record to show that the operational creditor had also been systematic and persuasive in asking for payment of its outstanding claim and has chosen to file the application without any in-house reconciliation and has chosen to casually include the oldest and the latest invoice in the demand notice in Form 3 of Rule 5. Whereas there is no provision for the payment of interest included either on the invoices or even in the agreement, the same has been claimed @18% impromptu without any basis - here is a case wherein the allegedly unpaid invoice already stands paid in the records of the Operational creditor himself, charging of the interest where no provision exists and all this being bereft of any worthwhile documentation Such matters serve as poor examples of the treatment of the IBC as an ad-hoc recovery mechanism and that too without adducing any substantive logic and fulfillment of the necessary documentation as required by the code provisions. The instant petition made by the Operational Creditor under Section 9 of the Code, seeking initiation of CIRP in respect of the corporate debtor, is rejected on the grounds of failure to produce the proof as required under Section 9(2)(e) - petition dismissed.
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2022 (4) TMI 982
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Existence of debt and dispute or not - proper reply to demand notice, received or not - when Reply submitted by Corporate Debtor was not within 10 days from the receipt of the notice under Section 8, whether the Corporate Debtor is precluded to raise the issue of Pre-Existing Dispute before the Adjudicating Authority? - HELD THAT:- Looking into the scheme of Section 9(5)(ii) which provides that the Adjudicating Authority can reject the Application if- notice of dispute has been received by the Operational Creditor or there is a record of dispute in the information utility . The above provision indicates that even if no notice of dispute has been received, and there is record of dispute in the Information Utility the Application under Section 9 is to be rejected by the Adjudicating Authority. The above provision clearly indicates that even in absence of notice of dispute, Adjudicating Authority can reject the Application if there is record of dispute in the Information Utility. It goes without saying that record of dispute in the Information Utility can very well be pointed out by the Corporate Debtor before the Adjudicating Authority when notice is issued under Section 9. Further in Reply to Section 9 Corporate Debtor can bring the material to indicate that there are pre-existing disputes in existence prior to issuance of demand notice under Section 8. Thus, mere fact that Reply to notice under Section 8 (1) having not been given within 10 days or no reply to demand notice having been filed by the Corporate Debtor does not preclude the Corporate Debtor to bring relevant materials before the Adjudicating Authority to establish that there are pre-existing dispute which may lead to the rejection of Section 9 application. The matter is remanded back to the Adjudicating Authority to consider the Application afresh - appeal allowed by way of remand.
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PMLA
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2022 (4) TMI 993
Money Laundering - conspiracy to obtain loan - fake documents - siphoning off the funds for personal use - scheduled offence - proceeds of crime - maintainability of criminal prosecution that has been launched by the Enforcement Directorate under Section 3 r/w 4 of PMLA - HELD THAT:- In this case, there is no shred of material to show that A8 to A15 had committed any criminal activity at all. A8 had purchased lands for his business from A4, A6 and A7 through their power agent Ayyappan and thereafter, he sold those lands to A9 to A15 for a valuable consideration. In this case, 166 acres of land is not the subject matter of crime. The subject matter of the criminal activity is obtaining the loan of ₹ 15 crores from GTFL by submitting forged documents. Therefore, the proceeds of the crime is ₹ 15 crores. A fraction of the sum of ₹ 15 crores viz., ₹ 1.07 crores was invested by Srinivasan in real estate by purchasing lands in the name of A4, A6 and A7. Thereafter, A4, A6 and A7 sold the lands through their power agent Ayyappan to Gunaseelan (A8) who in turn sold the lands to A9 to A15. It is most pertinent to state here that the FIR for the 'scheduled offence' was registered by the CBI only on 06.10.2010 and these sale transactions had taken place much before that. Therefore, by no stretch of imagination, the purchasers of the land could be expected to anticipate that the land that they are intending to purchase must have been purchased by their vendors with monies generated by a criminal activity. The prosecution of A8 to A15 for the offence under Section 3 r/w 4 of PMLA in C.C. No.62 of 2016 is an abuse of process of law - Petition allowed.
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2022 (4) TMI 992
Money Laundering - provisional attachment of land - creation of first encumbrance on the subject land - proceeds of crime - offences under Sections 3 and 4 of the PML Act - HELD THAT:- The ingredients for fastening criminal liability u/s.3 r/w 4 of the PML Act against Naidu Amrutesh Reddy are absent in the impugned complaint. To recapitulate the facts, even according to the Enforcement Directorate, Naidu Amrutesh Reddy had paid ₹ 4.33 crores to Suruli Andavar, who was not the actual owner, for purchasing the subject land and had the sale registered as Document No.6266/2011. It is not the case of the Enforcement Directorate that Naidu Amrutesh Reddy sold the said subject land to someone, knowing full well that he has no title to it, obtained the sale consideration of ₹ 4.33 crores via the said criminal activity and projected the amount as an untainted. Petition allowed.
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Service Tax
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2022 (4) TMI 991
CENVAT Credit - input services - transportation expenses from the factory to the gateway port - packing and forwarding expenses - CHA services - banking and financial services - terminal handling charges etc. - place of removal - HELD THAT:- The appellant is registered with the Service Tax Department and they had applied for refund of service tax of ₹ 1,11,244/- under Notification No. 41/2012-ST, with refund application filed in form A-1 on 19.08.2013. As it is the scheme of the Government not to export taxes, to nullify the service tax suffered by the appellant exporter, they are entitled to refund of service tax paid in the course of manufacture and export of their goods - Further, it is found that Government of India in IN RE : NOV SARA INDIA (P) LTD. [ 2013 (7) TMI 102 - GOVERNMENT OF INDIA] , had clarified that in case of export of goods on CIF/CF basis, the place of removal is the port of export. It is found that the Court below has refused refund of service tax as it appeared to them that the place of removal is the factory gate of the appellant manufacturer. Considering the facts and circumstances and taking notice of the clarification by the Government of India with regard to place of removal in the case of export, it is held that the appellant is entitled to refund of service tax paid on the services received in course of export like - terminal handling charges, transportation of goods from factory to ICD and from ICD to gateway port of export, CHA services and banking financial services, clearing and forwarding services, used by the appellant as an exporter, comprised in the amount of refund claim of ₹ 1,11,244/-. The Adjudicating Authority is directed to grant the refund within a period of 45 days from the date of receipt / service of a copy of this order alongwith interest under Section 11BB of the Central Excise Act - appeal allowed - decided in favor of appellant.
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2022 (4) TMI 990
Recovery of Service tax - amount received by the appellant in the form of reimbursement expenses - taxable amount or not - HELD THAT:- The demand of reimbursement expenses as was proposed by the Show Cause Notice has already been dropped. The findings have been confirmed by the Commissioner (Appeals). No appeal has been preferred by the Department, thus said findings have attained finality. Taxability - amount of discount received by the appellant from M/s. Obsurge Biotech Ltd. - applicability of negative list of service Section 66D of the Act - HELD THAT:- It is observed that the Adjudicating Authority has proceeded on the presumption that the amount in question has been obtained as consideration received for providing the taxable service. There is no denial that the appellant was providing taxable service but the impugned amount is the amount of discount. Hence, it was for the adjudicating authority to first decide whether the amount is towards the consideration of service provided as of pure agent. That Commissioner (Appeals) has held that cash discount since is given on the sales value, hence it is part of the given purchase - Commissioner (Appeals) in paragraph 7 of the order has specifically mentioned that the amount of discount is not related with the service. Still applying section 66 D of Service Tax Act for confirming the service tax on this amount, is therefore held to be a wrong finding. As relied upon by the learned Counsel of the appellant clause 11 of the agreement of the appellant with its client, the amount discounted is to be 2.5% of the sale value. Hence the said amount cannot be considered as the amount of consideration for providing any taxable service by the appellant to its clients - The issue is otherwise no more res integra. This Ahmadabad Bench of this Tribunal in the case of M/S. TRADEX POLYMERS PVT LTD VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2011 (12) TMI 398 - CESTAT, AHMEDABAD] has held that incentives like cash discounts cannot be considered as amount for providing taxable service - demand of service tax on the amount of discount received by the appellant has wrongly been confirmed by the adjudicating authority. Same is accordingly liable to be set aside. Levy of Service Tax - pure agent services - amount of commission received by the appellant - HELD THAT:- There is no denial on the part of the appellant that it was rendering the taxable service as that of pure agent by entering into the agreement with M/s. Obsurge Biotech Ltd. The agreement clarifies that the amount received as commission was very much the part of the amount of consideration received for providing the said services. However, as brought to notice the Notification No. 33/2012 dated 20.6.2012, it is observed that the exemption from payment of service tax has been provided to small scale providers i.e. the one whose value of taxable service in the proceeding year had not exceeded ₹ 10 lakh. From the table as given in the order above it is clear that year 2013-14 is the preceding year for 2014-15 when the value of taxable service rendered was less than ₹ 10 lakh. Hence the exemption of said Notification shall definitely be available to appellant from paying service tax on the value of taxable service received by him in the year 2014-15 - However, with reference to the demand of service tax for year 2013-14, there is no data about the taxable income received by appellant in the preceding year of Financial year 2013-14 (financial year 2012-13). In absence of any documents for the same, the benefit of exemption in the above said notification from payment of service tax cannot be extended for the amount of commission received by the appellant during the financial year 2013-14 - to the extent demand stand confirmed i.e. on the amount of commission of ₹ 8,66,472/-. The order under challenge is upheld to that extent. Appeal allowed in part.
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2022 (4) TMI 989
Refund of service tax paid - input services provided for authorised operations of its unit in the SEZ, Indore - claims were partly rejected for not meeting the requirements under the exemption notifications - benefit of N/N. ST-40/2012 dated 20.6.2013 and ST-12/2013 dated 1.7.2013 - meaning of 'authorised operation' and 'prescribed' - HELD THAT:- 'Authorised operations' under the SEZ Act are those operations of a developer authorised by the Board under sub-section (2) of Section 4 or those operations of a unit authorised by the Development Commissioner under sub-section (6) of section 9. As per section 2(e), Board means the Board of Approval constituted under sub-section (1) of section 8 - If a developer has to enjoy the exemptions available under section 26 of the SEZ Act, its operations should be authorised by the Board under section 4 and it should meet the manner, terms and conditions laid down under the SEZ Rules. Similarly, if a unit located in the SEZ has to enjoy the exemptions available under Section 26, its operations must be authorised by the Development Commissioner under Section 9 and it should meet the manner, terms and conditions prescribed under the SEZ Rules. In these appeals there is no dispute that the operations of the appellant were authorised by the Development Commissioner under the SEZ Act nor is any allegation that any of the conditions laid down in Rules 22 and 31 were violated. While the SEZ Act itself provides for exemption from service tax (as well as Central Excise duty and Customs duty), exemption notifications were also issued by the Government under the respective laws. These exemption notifications were also issued with some conditions. Thus, there is duplication inasmuch as the goods and services provided to authorised operations of developers and units in the SEZs are exempted from Customs duty, Central Excise duty and the service tax by the SEZ Act itself (subject to the manner which may be prescribed) and there are also exemption notifications under the respective tax laws which are also subject to some conditions. The exemption notifications in dispute in this case are service tax exemption notifications ST-40/2012 dated 20.6.2013 and ST-12/2013 dated 1.7.2013. This authority of law to levy and collect taxes is in the form of charging sections of the Acts- such as Section 3 of the Central Excise Act, 1944, Section 12 of the Customs Act, 1962 and Sections 66, 66Aand Section 66B of Chapter V of the Finance Act, 1994 (for collection of Service Tax). While section 66 provides for levy of service tax on forward charge basis by the service provider, section 66A provides for charge of service on reverse charge basis by the service recipient in certain cases. Section 66B provides for levy of service tax on all services other than those in the negative list after 2012. The levy and collection of these taxes and duties are further modified by some machinery provisions of these Acts, including those which enable the Government to issue exemption notifications - Central Excise duty leviable under section 3 at the rates specified in the Central Excise Tariff gets reduced to the extent any exemption notification is issued under section 5A of the Central Excise Act - Section 26(1) of the SEZ Act is inconsistent with the three charging sections viz., Section 3 of the Central Excise Act, 1944, Section 12 of the Customs Act, 1962 and Sections 66, 66A and 66B of Chapter V of the Finance Act, 1994. In addition to the general principle of a specific law (pertaining to SEZ) prevailing over the general law (levying customs, central excise or service tax) and the later enactment (such SEZ Act, 2005) prevailing over the earlier enactments (Central Excise Act, 1944, Customs Act, 1962 and Finance Act, 1994), in the SEZ Act, the Parliament has explicitly resolved this inconsistency between the laws. Section 51 of the SEZ Act states that the provisions of SEZ Act override any other provisions of other laws. The charge of excise duty under Section 3 of the Central Excise Act, the charge of Customs Duty under section 12 of the Customs Act and the charge of service tax under sections 66, 66A and 66B of the Finance Act, 1994 will not apply to goods and services supplied to developers and units for authorized operations in the SEZ areas by virtue of the overriding provisions of the SEZ Act. Any exemption notifications and conditions therein are therefore, redundant because, the Parliament itself has, through section 51 of the SEZ Act, overridden the charge in the other laws. Usually when a service is rendered to a manufacturer or to a service provider, an invoice is raised in its name. Some services, however, are provided at the head office of the assessee. The head office usually is a corporate or registered office which neither manufactures any goods nor provides any services by itself. Only its field units do so. The Service Tax law considers the services provided in the head office as input services to the field units and permits the head office to distribute proportionately, the service rendered at the head office to the field formations. For this purpose, the head office needs to register as an ISD and thereafter it can distribute the service rendered at the head office to the field formations. This enables the field offices which indirectly profit from these services to take CENVAT credit on the strength of the ISD invoices. In this case, the head office is located in Gurugram and it is not an SEZ unit. A portion of the services received in Gurugram are for the authorised operations of the appellant in its SEZ unit in Indore and to that extent, the ISD invoice issued by the head office distributes the service to the appellant. Since it is a service rendered for the authorised operations of the appellant to the extent indicated in the ISD invoice, to that extent, service tax cannot be charged in view of section 26 of the SEZ Act. The service tax paid to that extent needs to be refunded to the appellant. The head office could not have claimed the refund for two reasons. Firstly, it is not an SEZ unit nor does it have any authorised operations. Secondly, the head office would have paid service tax on the total input service invoice and only a portion of which it is distributed to the appellant through an ISD invoice. The appellant is, therefore, entitled to the refund. Levy of service tax - service tax denied on the ground that the goods were transported from the SEZ unit, i.e., beyond the factory gate after the goods have been removed - HELD THAT:- As per the CENVAT Credit Rules, credit of input services on transportation of goods from the place of removal was allowed for some time and thereafter, it was restricted to transportation of goods up to the place of removal. Thus, no CENVAT credit of service tax paid on outward transportation of goods was allowed. However, as far as SEZ units are concerned, so long as the service is for authorised operation of the SEZ unit, there is no scope for making any distinction based on the place of removal under section 26 of the SEZ Act. Refund can be denied or service tax can be charged only if the service is not for authorised operations of the SEZ unit. There is no such allegation in the present case. The denial of refund of service tax to the appellant in these five appeals is not sustainable - Appeal allowed - decided in favor of appellant.
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Central Excise
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2022 (4) TMI 988
100% EOU - demand of differential duty - excess DTA clearance, over and above their DTA Sale Entitlement - inclusion of deemed exports made, in the FOB Value of exports for the purpose of DTA Sale Entitlement in terms of Circular dated 7.4.2000 - whether the quantification of DTA sale value in the SCN without adjusting the advance DTA sale allowed by the DC is correct or not? - HELD THAT:- The department has refused to include the deemed exports for DTA sale entitlement on the basis of Board circular dt. 7.4.2000. Needless to say that Board circular is not binding the Tribunal. The issue whether the deemed exports made by the appellant has to be included for determination of DTA sale entitlement has been considered in various decisions. In COMMR. OF C. EX. CUS., SURAT-II VERSUS SABNAM SYNTHETICS LTD. [ 2010 (2) TMI 1136 - GUJARAT HIGH COURT] , the Hon ble High Court had occasion to consider an identical issue, where reliance was placed in the case of Ginni International Ltd. v. Commissioner of Central Excise, Jaipur [2001 (9) TMI 165 - CEGAT, COURT NO. IV, NEW DELHI], where the Tribunal has held that when 100% EOU has submitted the permission to sell goods manufactured by them in DTA in accordance with para 9.9 of the Exim Policy, the Government cannot go beyond such permission and dispute the value of clearance allowed by the Competent Authority which in that case is Development Commissioner. Thus, it is clear that value of deemed export have also to be included for computing (FOB) value of exports. Following the same, the demand raised alleging that appellant has exceeded DTA sale entitlement is without any basis. The demand cannot sustain on merits. Extended period of limitation - HELD THAT:- The entire details are available in the records. Further they have made several requests before the Development Commissioner showing their clearances and to include the deemed exports for computing DTA sale entitlement - first SCN for the period 1999-2000 issued invoking the extended period cannot sustain and has to be held as time-barred. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2022 (4) TMI 987
Condonation of delay in filing petition - requirement of pre-deposit conditions - validity of assessment orders - attachment of bank accounts - HELD THAT:- As rightly pointed out by the learned counsel for the petitioner, if appeal is filed, the pre-deposit condition would be imposed only in respect of the due payable by the petitioner against the tax demand and not penalty or interest. Therefore, this Court feels that, if the petitioner comes forward to pay 50% of the tax demand, i.e., 50% of ₹ 1,70,25,921/-, approximately ₹ 85,00,000/- within a time frame on condition that, one out of the three Banks viz., ICICI Bank, Shevapet Branch, Salem, State Bank of India, Tolstoy Marg, New Delhi and Axis Bank, Worli Branch, Mumbai, if attachment made in Axis Bank, Worli Branch, Mumbai can be lifted for the period of two weeks enabling the petitioner to pay this ₹ 85,00,000/-, that could be a workable arrangement, based on which, the petitioner can approach the Appellate Authority challenging all these impugned assessment orders by filing regular appeal, where, the pre-deposit conditions can be waived in view of the payment of the 50% of the amount now is directed to be paid by virtue of this order of the Court. The respondents are hereby directed to lift the attachment made against the petitioner's account lying at Axis Bank, Worli Branch, Mumbai forthwith. On such lifting of attachment, the petitioner shall deposit a sum of ₹ 85,00,000/- being 50% of the tax demand for the assessment years referred to above, to the extent of ₹ 1,70,25,921/-, within a period of one week Petition disposed off.
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2022 (4) TMI 986
Seeking to lift attachment of Bank Accounts - recovery of dues payable by the Company under the Act, 2003 - power of authority under the Value Added Tax Act, 2003 to attach any private movable or immovable property of a Director of a Company including the bank account of the Director - HELD THAT:- This Court has made it very abundantly clear that Section-86 of the Act pertains to the offence by companies and contains certain provisions where for the offence of the company, every person who at the time the offence was committed was in-charge of, and was responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence. In essence, this provision makes the person in-charge of the company responsible for the offence vicariously liable for the criminal action, for which, the company may have been charged. However, when it comes to recovering the dues from the company towards liability incurred under the Act, the Department cannot proceed against the individual Director of the Company. It is not in dispute that the bank account is the personal account of the Director. The attachment so far as the Current Account maintained with IDBI Bank, Durga Das Nagar, Pali, Rajasthan stands hereby lifted - Application allowed.
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2022 (4) TMI 985
Seeking to call for records of the assessment order - seeking direction to respondent to proceed with the revision of assessment after the completion of the adjudication under the Central Excise Act, 1994 - HELD THAT:- The demand preceded pre-assessment notices, which were issued based on the information gathered from the respondent's counterpart in the Central Excise Department. The fact remains that the Central Excise Department has confirmed the demand proposed in the show cause notice issued under Section 11 A of the Central Excise Act, 1944. The records of the Central Excise Department would indicate the quantum of manufacture and therefore they are relevant for arriving at the sales turn over, which has been suppressed by the petitioner. Hence, p rima facie there is no merits for interference at this stage. These writ petitions are dismissed by giving liberty to the petitioner to file a statutory appeal before the Deputy Appellate Commissioner within a period of 30 days from the date of receipt of a copy of this order. The Deputy Appellate Commissioner shall however keep the proceedings pending and await for the orders to be passed by the CESTAT, Chennai, in the statuary appeal filed by the petitioner against the orders determining the demand, which would give the correct indication of the turn over, which has escaped assessment - petition dismissed.
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Indian Laws
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2022 (4) TMI 984
Dishonor of Cheque - rebuttal of evidence - source of income/capacity to lend - stand of petitioner is that the respondent had no source of income to lend such a huge sum of ₹ 8,00,000/- to the petitioner - HELD THAT:- Honourable Supreme Court of India in TEDHI SINGH VERSUS NARAYAN DASS MAHANT [ 2022 (3) TMI 797 - SUPREME COURT ] held that in the case under Section 138 of the Negotiable Instruments Act, the complainant need not show the first instance that he had capacity to lend the loan. The proceedings under Section 138 of the Negotiable Instruments Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the Courts were right in held on those lines. The accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent material namely by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross-examination of the witnesses of the complainant. Ultimately it becomes the duty of the Courts to consider carefully and appreciate the totality of the evidence and then, come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence. The petitioner can very well examine his side witnesses to disprove the case of the respondent herein - Criminal Revision Case is allowed.
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