TMI Tax Updates - e-Newsletter
June 10, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Determination of tax - In the instant case, though show cause notice was issued on 06.01.2021, asking the petitioner herein to submit objections, in the considered opinion of this Court, second respondent herein, before resorting to the impugned action, ought to have served on the petitioner the notice of personal hearing, indicating the date of hearing, according to the second limb of sub-Section (4) of Section 75 of the Act. In the instant case, the said mandatory requirement is not complied with. - HC
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Income Tax:
Validity of issuance of notice under Section 153C - The issuance of the invalid notice dated 14.06.2019 does not compromise the assessment proceedings as, the invalid notice is one that does not exist in the eyes of the law and must thus be ignored. The provisions of Section 282 deal with service of notice in general terms and Section 282A with the authentication of notices for service by electronic means. In this case, it is not in dispute that notice dated 30.09.2019 is a valid notice qua the provisions of Sections 282 and 282A read with Rules 127 and 127A. The issuance of notice dated 14.06.2019 does not vitiate the impugned proceedings in any way. - HC
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Income Tax:
Attachment order - recovery proceedings - The impugned letter was issued by the Tax Recovery Officer to the Sub Registrar, seeking certain details, the same would not provide a cause of action for the purpose of moving the present writ petition nor this Court adjudicate all such disputed facts under Article 226 of the Constitution of India. - HC
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Income Tax:
Addition u/s 69A - unexplained cash deposit - CIT(A) when recorded that without borrowing or having opening cash balance, there is no way the cash deposits for the respective years can be explained through salary and by the assessee, missed the aspect of the assessee holding sufficient opening balance for the respective years. With this view of the matter we find it difficult to sustain the impugned orders. - AT
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Income Tax:
Exemption claimed u/s 54B - exemption denied as AO concluded there was no agricultural operation carried out the lands in dispute - the assessee has furnished the necessary details such as affidavit of the party who carried out the agricultural operations as well as form 7/12 along with form 8 which have rejected by the authorities below but without assigning sensible reason and bringing any corroborative evidence on record. - Additions deleted - AT
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Income Tax:
Undisclosed unaccounted expenditure and undisclosed income - By the connotation of "right person", it is meant the person who is liable to be taxed, according to law, with respect to a particular income. And that the expression "wrong person" is obviously used as an antithesis of the expression "right person" only. - We observe that this assessee is the "managing director" in the company. - And that it is this latter entity which the fact is engaged in all the business activity(ies) and has been assessed separately throughout. A company is very a body corporate and a distinct entity apart from its director. - CIT(A) has rightly deleted these twin additions in the assessee/individual's hands - AT
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Income Tax:
Reopening of assessment u/s 147 - undisclosed income - As the assessee in the case before us had at no stage applied for a copy of the reasons to believe on the basis of which its case was reopened, therefore, no fault can be attributed to the A.O in not supplying the same. In the backdrop of the aforesaid facts, finding no substance in the claim of the ld. A.R that the assessment framed u/s 143(3) r.w.s 147 would stand vitiated as the A.O had failed to supply the copy of the reasons to believe to the assessee, we reject the same. - AT
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Corporate Law:
This matter can be referred to arbitration. The parties are at loggerheads since 2006 onwards and have probably approached every judicial forum to seek reliefs. We see that during the process some parties have left for heavenly abode, some have reached super-senior/senior citizen status and those recently getting involved in this unending litigation, are young generation, who should walk the road of living peaceful life rather than wasting time, energy and money on litigations, which can be resolved amicably. - Tri
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Indian Laws:
Dishonor of Cheque - acquittal of the accused - rebuttal of presumption - It is settled that there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden. The accused need to substantiate his case based on preponderance of probabilities. In the case of acquittal, there is double presumption in favour of the accused. An order of acquittal cannot be interfered with as matter of course. An order of acquittal can only be interfered with when there are compelling and substantial reasons for doing so. - HC
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IBC:
Fresh claim after CIRP proceedings - The CIRP is a time-bound process and if the Adjudicating Authority sets the clock back for the reason that the Applicant was not diligent enough in pursuing its claim, it would certainly go against the main objective of the Code - It is wrong on the part of the Applicant to submit that the RP has himself caused unnecessary delay in consideration of the claim of the Applicant, that had been filed even before the Resolution Plan was received by the RP. - Tri
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VAT:
Validity of assessment order - reversal of Input Tax Credit - suppression of sales - mismatch of information - The impugned order is set aside on the ground that no pre-assessment notices have not been served upon the petitioner - HC
Articles
Notifications
GST - States-
F-A-3-33-2017-1-V (35) - dated
3-6-2021
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Madhya Pradesh SGST
Amendment in Notification No. FA-3-32-2017-1-V(41) dated the 29th June, 2017
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F-A-3-18-2019-1-V (36) - dated
3-6-2021
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Madhya Pradesh SGST
Amendment in Notification No. FA-3-18-2019-1-V(40) dated the 17th May 2019
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F A 3-33-2017-l-V-(34) - dated
3-6-2021
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Madhya Pradesh SGST
Amendment in Notification No. F-A3-33-2017-1-V (42), dated the 29th June, 2017
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G.O. Ms. No. 5 - dated
22-3-2021
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Puducherry SGST
Amendment in Notification G.O. Ms. No. 9, dated the 1st April, 2020
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F.12 (1)FD/Tax/2021-13 - dated
2-6-2021
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Rajasthan SGST
Amendment in Notification No. F. 12(56)FD/Tax/2017-Pt-IV-172, dated the 29th March, 2019
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609-F.T. - dated
3-6-2021
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West Bengal SGST
Seeks to make fourth amendment (2021) in the WBGST Rules.
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608-F.T. - dated
3-6-2021
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West Bengal SGST
Seeks to extend specified compliances falling between 15.04.2021 to 30.05.2021 till 31.05.2021 in exercise of powers under section 168A of WBGST Act.
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607-F.T. - dated
3-6-2021
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West Bengal SGST
West Bengal Goods and Services Tax (Third Amendment) Rules, 2021.
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606-F.T. - dated
3-6-2021
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West Bengal SGST
Seeks to extend the due date for filing FORM GSTR-4 for financial year 2020-21 to 31.05.2021.
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03/2021–C.T./GST - dated
3-6-2021
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West Bengal SGST
Seeks to extend the due date of furnishing FORM GSTR-1 for April, 2021.
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02/2021-C.T./GST - dated
3-6-2021
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West Bengal SGST
Seeks to extend the due date for furnishing of FORM ITC-04 for the period Jan-March, 2021 till 31st May, 2021.
Income Tax-
71/2021 - dated
8-6-2021
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IT
Income-tax (17th Amendment) Rules, 2021 - TDS - Statement of deduction of tax under sub-section (3) of section 200.
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70/2021 - dated
8-6-2021
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IT
U/s 35(1) (ii) / (iii) of IT Act 1961 Central Government approved M/s Indian Institute of Technology, Bhilai
News
Case Laws:
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GST
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2021 (6) TMI 301
Release of attached bank properties - Validity of the impugned notice raising a demand for refund of 50% of the amount of the GST which was refunded earlier to the petitioner along with interest (taking the base of which the release of attached bank property was sought) - HELD THAT:- A similar matter in M/S KAMAKHYA POWER SOLUTIONS VERSUS THE UNION OF INDIA, THE COMMISSIONER CENTRAL GOODS AND SERVICE TAX, THE ASSTT. COMMISSIONER CENTRAL GOODS AND SERVICE TAX, THE PRINCIPAL COMMISSIONER CENTRAL GOODS AND SERVICE TAX, ASSAM [2021 (6) TMI 153 - GAUHATI HIGH COURT] is pending before this Court in which this Court had passed an interim order on 09.04.2021 staying a similar demand notice as well restraining action for attachment of the Bank Account of the claimant.
In that view of the matter, similar interim order is passed, directing, the Revenue Authorities, in the interim,not to act upon the aforesaid demand notice dated 01.01.2021 as well as the notice dated 22.04.2021for attaching/freezing the Bank Account of the petitioner. Accordingly, the HDFC Bank authorities as well as the other respondents shall not remit the amount lying in the account of the petitioner to the GST authorities in terms of the notice dated 22.04.2021.
List after three weeks.
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2021 (6) TMI 292
Determination of tax - grant of opportunity of hearing where a request is received in writing - Sub-Section (4) of Section 75 of CGST Act - HELD THAT:- Sub-Section (4) of Section 75 of the Act, in clear and vivid terms, stipulates that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person - In the instant case, though show cause notice was issued on 06.01.2021, asking the petitioner herein to submit objections, in the considered opinion of this Court, second respondent herein, before resorting to the impugned action, ought to have served on the petitioner the notice of personal hearing, indicating the date of hearing, according to the second limb of sub-Section (4) of Section 75 of the Act. In the instant case, the said mandatory requirement is not complied with.
This Court is inclined to set aside the impugned order, dated 09.02.2021 - Petition allowed.
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2021 (6) TMI 290
Grant of Regular Bail - in respect of one of the co-accused, charge sheet was not filed within time - HELD THAT:- The present petition is certainly not at all the Public Interest Litigation. If the investigating agency was not able to conclude the investigation within time there can be a number of reasons for the same. No element of Public Interest is involved in the matter. The Code of Criminal Procedure is a complete code in itself and it provides for safeguards in respect of detention and it also provides for procedure in respect of investigation.
This court does not find any reason to interfere in the matter specially in a public interest litigation in respect of non filing of charge sheet, within time - Admission declined.
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Income Tax
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2021 (6) TMI 289
Addition u/s 69A - unexplained cash deposit - HELD THAT:- When huge cash is available in the hands of the assessee at the end of the financial year 2011-12 and 2012-13 and such cash balance was accepted by the learned AO, therefore, in the absence of any material available with the learned Assessing Officer, he cannot say that no cash was available with the assessee for the alleged deposits in the subsequent assessment years.
There is proper and satisfactory explanation from the assessee in respect of the cash deposits and when the Revenue wants to bring such cash deposits to tax, the burden squarely rests with the Revenue and in the absence of any material in support of such a premise, we find it difficult to accept the reasoning of the learned Assessing Officer to make the addition and for that matter, the reasoning for confirming the addition by the Ld. CIT(A).
CIT(A) when recorded that without borrowing or having opening cash balance, there is no way the cash deposits for the respective years can be explained through salary and by the assessee, missed the aspect of the assessee holding sufficient opening balance for the respective years. With this view of the matter we find it difficult to sustain the impugned orders.
We, accordingly, while allowing these appeals direct the learned Assessing Officer to delete the additions made - Decided in favour of assessee.
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2021 (6) TMI 288
Exemption u/s 80P - Addition made being excess of Bad and Doubtful Debts Recoverable (BDDR) - HELD THAT:- Assessee claimed to have its income exempt u/s 80P(2)(a)(i) upto the assessment year 2006-07 and also creating a provision for bad debts in its accounts. We note that during the year under consideration, the assessee passed on journal entry debiting BDDR balance of ₹ 3,03,50,000/- and reversed the excess provision of ₹ 5,00,000/-.
According to assessee, it was not a taxable income as it was made out of earlier years income which was already offered to taxation. However, the CIT (A) was of the opinion that the assessee is also claiming its income as exempt income u/s 80P(2)(a)(i) of the Act upto 20.06.2007, therefore, the provision made as per RBI guidelines for BDDR attains no significance and it has to be treated as income being an excess provision in the year under consideration.
As rightly pointed out by AR, the provision made under BDDR made out of earlier year’s income which was offered to tax in the earlier year. Therefore, we find force in the arguments of the Ld.A.R. when it was taxed in the earlier years, if the same is taxed in the current year it becomes double taxation. When it was taxed in the earlier year, the addition made by the Assessing Officer as confirmed by the ld.CIT(A) is not justified and it is liable to be dismissed.The order of ld.CIT(A) is not justified and is set aside. Thus, the sole ground raised by the assessee is allowed.
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2021 (6) TMI 287
Disallowance of depreciation, business expenses, non grant of set off of brought forward business loss and unabsorbed depreciation and treating the income shown from business as unexplained cash credit under section 68 - HELD THAT:- Various doubts raised by the assessing officer with regard to the technical capability of the concerned employees for developing software, lack of infrastructure, etc. have not been properly addressed by the assessee. It is a fact on record that in course of assessment proceedings, the assessee has furnished a software development agreement with a US based company, who allegedly entrusted the assessee with developing software.
Assessee has furnished certain documentary evidence including copies of export invoices raised to the foreign buyer, proof of payment received through bank, banker’s certificate, bank statement showing payment received towards export of software, etc. However, neither the bank certificate nor the bank statement have been filed in the paper book or separately furnished before us for enabling us to record a conclusive finding on these evidences.
The aforesaid documentary evidences stated to have been filed before the departmental authorities needs to be thoroughly examined in the context of assessee’s submission regarding development of software for a foreign buyer. As it appears, the departmental authorities have not properly enquired into these aspects by conducting necessary enquiries with the concerned bank or other regulatory authorities, including RBI, since it involves transactions with a foreign party involving repatriation of money from foreign country. One more aspect which has not been examined is, whether the assessee has carried on such software development activity, either with the same client or any other client, in the subsequent assessment years or it is a standalone transaction. If the assessee has continued with such business activity in subsequent years, then assessee’s claim can be accepted. However, all these aspects need to be properly enquired into by the departmental authorities, which appear to have not been done.
We are inclined to restore the issue to the learned Commissioner of Income Tax (Appeals) for fresh adjudication after due opportunity of being heard to the assessee. The assessee is also permitted to bring fresh evidence on record to establish its claim of carrying on the business activity of software development. Learned Commissioner of Income Tax (Appeals) would be free to conduct proper enquiry either by himself or get it done through the assessing officer in terms of our observations hereinabove. Assessee’s claim of deduction towards expenses, depreciation as well as set off of brought forward loss and unabsorbed depreciation would ultimately depend upon the outcome of the issue as to whether the assessee has carried out any business activity or not. In view of the aforesaid, we set aside the impugned order of learned Commissioner of Income Tax (Appeals) and restore the issues back to his file for fresh adjudication in terms of our discussion above and only after providing due opportunity of being heard to the assessee. Grounds are allowed for statistical purposes.
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2021 (6) TMI 286
Addition u/s 14A r.w.r 8D(2)(ii) - sufficiency of own funds - CIT-A deleted the addition - HELD THAT:- We find that the CIT(A) has relied on the facts and the financial statements and the submissions of the assessee, Whereas the assessee has made investments out of the surplus funds and no borrowed funds are utilized for investments and such investments have been made in subsidiaries to have control on the management of the subsidiaries and not to earn any income. Further, the borrowed funds were utilized only for the purpose of normal course of business. We find that the CIT(A) considered the facts, provisions of law, judicial decisions and financial statements and also the investments are made out of the interest free funds
On perusal of the CIT(A)order, we find that the assessee could able to substantiate before the lower authorities on the surplus funds including reserves and surplus and in this assessment year, the assessee has reserves& share capital to the extent of ₹ 1,231.5 crores, whereas the investments are much less than the available surplus balances - See HDFC BANK LTD. VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX-2 (3) , MUMBAI & OTHERS [2016 (3) TMI 755 - BOMBAY HIGH COURT] & THE COMMISSIONER OF INCOME TAX VERSUS RELIANCE UTILITIES & POWER LTD. [2009 (1) TMI 4 - BOMBAY HIGH COURT]
We find that the assessee has sufficient funds for making investments and the A.O has not doubted the availability of the funds but made disallowance invoking the provisions of Sec.14A r.w.r 8D(2)(ii).The Ld. DR could not substantiate or controvert the findings of the CIT(A) with any new cogent material or information but relied only on the order of the A.O. Accordingly, we do not find any merits in the submissions of the revenue and the CIT(A) considered the facts and relied on the judicial decisions and has passed a reasoned order - Appeals filed by the revenue are dismissed.
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2021 (6) TMI 285
Disallowance u/s 14A r.w.r. 8D - Whether no exempt income received by the assessee ? - CIT-A deleted the addition - HELD THAT:- We found that the CIT(A) has relied on the findings in the assessment order and observed that there is no exempt income received by the assessee and relied on the provisions of Sec. 14A r.w.r 8D of the IT Rules.
Further CIT(A) emphasized that the provisions of Sec.14A of the Act shall not be applicable where there is no exempt income received - Accordingly, we are not inclined to interfere with the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue.
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2021 (6) TMI 299
Disallowance of expenditure - assessee had failed to prove that the said expenditure has been incurred by assessee and not in the hands of M/s. VGPL - HELD THAT:- Interest which was incurred was utilized for providing financial assistance to its wholly owned subsidiary of the assessee on account of commercial expediency and the financial assistance was utilized by the wholly owned subsidiary company for its power generating business. In terms of the agreement dated 11.01.2007, interest on the financial assistance given to the wholly owned subsidiary was payable to the assessee from first quarter calendar year 2011 and the same was received.
CIT (Appeals) as well as the tribunal have rightly treated the payment of interest by placing reliance on the decision of 'S.A. BUILDERS VS. CIT (Appeals), CHANDIGARH', [2006 (12) TMI 82 - SUPREME COURT] - The aforesaid finding, which is concurrent in nature does not suffer from any infirmity and cannot be said to be perverse. Therefore, the first substantial question of law is answered against the revenue and in favour of the assessee.
Disallowance u/s 14A - HELD THAT:- CIT (Appeals) has negatived the submission of the assessee and has directed the AO to re-work the disallowance. The aforesaid order has been affirmed in appeal by the tribunal. Therefore, it is not necessary to answer the second substantial question of law.
Disallowance of interest expenditure relating to investment made by the assessee - HELD THAT:- CIT (Appeals) after taking into account the details furnished by the assessee, has recorded the finding that there is a nexus between the loan and the business of the assessee and there is no nexus between interest bearing funds and the investment made in the sister concern of the assessee.
The finding recorded by the CIT (Appeals) that investments are presumed to be made out of surplus funds and the borrowed funds have not been diverted for the purpose of providing interest free financial assistance to its sister concerns has been upheld. The aforesaid concurrent finding of fact does not suffer from any infirmity and cannot be termed as perverse. Third substantial question of law is therefore, answered in the negative and against the revenue.
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2021 (6) TMI 284
Penalty levied u/s 271(1)(c) - bogus purchases - estimation of the income/Gross Profit @15% - A.O has made disallowance of bogus purchases, whereas, on appeal CIT(A) has estimated the income/Gross Profit @15% - HELD THAT:- We are of the opinion, that where the addition is sustained on the estimated basis no penalty u/s 271(1)(c) of the Act can be levied. Accordingly, we considering the facts, circumstances and judicial decisions set aside the order of the CIT(A) and direct the assessing officer to delete the penalty and allow the grounds of appeal of the assessee.
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2021 (6) TMI 283
Reopening of assessment u/s 148 - assessee claimed depreciation of 100% on windmill having capacity of 1.25 mw which was so eligible only if the windmill was put to use for more than 180 days during the relevant previous year - HELD THAT:- As evident that the original return of income stood scrutinized u/s 143(3) wherein assessee' claim of depreciation was duly examined by Ld. AO. The claim was allowed after due application of mind. The requisite documents and details were already furnished by the assessee during original assessment proceedings.
Subsequently, on the basis of existing material as available on record, Ld. AO formed an opinion of escapement of income which was nothing but mere change of opinion. There was no new tangible material which would demonstrate any escapement of income in the hands of the assessee. This being so, the ratio of cited decision was squarely applicable to the facts of the case and Ld. CIT(A) was quite justified in declaring the reassessment proceedings as invalid. Finding no infirmity in the same, we dismiss the appeal.
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2021 (6) TMI 272
Exemption claimed u/s 54B - exemption denied as AO concluded there was no agricultural operation carried out the lands in dispute - as per assessee lands sold were used for the agricultural operations - HELD THAT:- The onus is upon the revenue to prove that the land in dispute was not used for the purpose of agricultural operations by bringing tangible material on record which can be used against the assessee and against the form 7/12 along with form 8 available on record. In the case on hand, the assessee has furnished the necessary details such as affidavit of the party who carried out the agricultural operations as well as form 7/12 along with form 8 which have rejected by the authorities below but without assigning sensible reason and bringing any corroborative evidence on record. Accordingly, we are inclined to reverse the order of the authorities below and direct the AO to delete the addition made by him.
Ground of appeal of the assessee is allowed.
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2021 (6) TMI 271
Assessment passed u/s 143 (3)/144C/92CA (3) - No draft assessment order was passed before passing final assessment order - HELD THAT:- When undisputedly the order passed by the Tribunal in the first round of litigation is to be treated under the provisions contained u/s 92CA(3) and section 144C of the Act and in these circumstances, the TP order is also to be treated u/s 92CA(3) of the Act on the basis of which draft assessment order was required to be passed so as to enable the taxpayer to approach the ld. DRP, if so require. So, assessment order passed by the AO without passing draft assessment order to enable the taxpayer to approach ld. DRP is not sustainable in the eyes of law.
Identical issue has been decided in the cases of Turner International India (P) Ltd. vs. DCIT [2017 (5) TMI 991 - DELHI HIGH COURT], DCIT vs. Control Risks India (P) Ltd. [2017 (7) TMI 1077 - DELHI HIGH COURT] and JCB India Ltd [2017 (9) TMI 673 - DELHI HIGH COURT] whereby final assessment order has been quashed on the ground that no draft assessment order was passed before passing final assessment order.
Procedure adopted in this case by the ld. TPO/AO is unheard of. In these circumstances, we are of the considered view that ld. CIT (A) has rightly quashed the final assessment order. So, finding no perversity or illegality in the impugned order, present appeal filed by the Revenue is hereby dismissed.
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2021 (6) TMI 296
Validity of issuance of notice under Section 153C - non recording of satisfaction by the IO - HELD THAT:- Referring to necessity for recording of satisfaction prior to transfer of files by the Investigating Officer to the AO having jurisdiction over an assessee in the present case, the recording of satisfaction prior to issuance to notice dated 30.09.2019 is apparent from the record and the argument of the petitioner to the contrary is rejected.
In the light of the confirmation furnished now to the effect that the satisfaction had been issued by the IO only on 30.09.2019, notice dated 14.06.2019 was evidently bad in law. According to the petitioner, this fact vitiates all other and subsequent proceedings including the impugned notice dated 30.09.2019.
The satisfaction notes now placed on record make it clear that as in June, 2019, there had been no recording of satisfaction by the IO and thus the issuance of notice under Section 153C on 14.06.2019 was erroneous since it was without satisfaction of the condition precedent.
In fact, notice dated 14.06.2019 which has been placed in the typed set filed by petitioner at page 74 has caught Mr.Srinivas by surprise and it was only after this argument was specifically urged by the petitioner, that additional counter dated 11.02.2021 has come to be filed by R2 accompanied by a typed set containing the two satisfaction notes and note for transfer of files from IO to AO.
Whether the issuance of notice dated 14.06.2019 without compliance of the statutory pre-condition, would vitiate all subsequent assessment proceedings including the impugned notice. R2, in his reply to the petitioner’s rejoinder, reiterates that the procedure followed by the respondents is in accordance with law.
There is no reference in any of the respondents’ pleadings to notice dated 14.06.2019. The respondents thus disavow notice dated 14.06.2019 and their case rests on the position that satisfaction notes were drawn up on 30.09.2019 and it was only parallel and pursuant thereto that the impugned notice under Section 153C dated 30.09.2019 was issued. In this context, attention is drawn to Sections 282 and 282A of the Act as well as Rules 127 and 127A of the Income Tax Rules, 1962 (Rules) to justify the issuance of the impugned notice and to state that proper procedure has been followed.
The issuance of the invalid notice dated 14.06.2019 does not compromise the assessment proceedings as, the invalid notice is one that does not exist in the eyes of the law and must thus be ignored. The provisions of Section 282 deal with service of notice in general terms and Section 282A with the authentication of notices for service by electronic means. In this case, it is not in dispute that notice dated 30.09.2019 is a valid notice qua the provisions of Sections 282 and 282A read with Rules 127 and 127A. The issuance of notice dated 14.06.2019 does not vitiate the impugned proceedings in any way.
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2021 (6) TMI 269
Bogus purchases - gross profit rate earned from bogus purchase - HELD THAT:- We find that in the similar facts and circumstances and on identical situation, the Hon’ble Bombay High Court in the case of Pr.CIT Vs. Mohammad Haji Adam & Co. [2019 (2) TMI 1632 - BOMBAY HIGH COURT] wherein it has been held that no ad-hoc addition at the rate of 10% of bogus purchases is warranted. Rather, the addition should be made to the extent of difference between gross profit rate on genuine purchases and gross profit rate of bogus purchases. For example, if the GP percentage of genuine purchases comes to 8% whereas GP percentage of bogus purchases comes to 10%, then 2% of bogus purchases can be added to the income of the assessee.
Reverting to the facts of the present case and taking guidance from the said judgment of the Hon'ble Bombay High Court in the case of Pr.CIT Vs. Mohommad Haji Adam (supra.), we set aside the order of the Ld. CIT(Appeal) and restore the matter back to the file of the Assessing Officer for undertaking this exercise and finding out the excess gross profit rate earned from bogus purchases and then making the addition accordingly after allowing reasonable opportunity of hearing to the assessee.
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2021 (6) TMI 268
Undisclosed unaccounted expenditure and undisclosed income - addition of income in the hands of assessee or undisclosed and unaccounted income pertains to its company HELD THAT:- The hon'ble apex court's landmark decision in ITO v. Ch. Atchaiah [1995 (12) TMI 1 - SUPREME COURT] held long back that the Assessing Officer can and he must, tax the right person and the right person alone. By "right person" it is meant the person who is liable to be taxed according to law with respect to a particular income. By the connotation of "right person", it is meant the person who is liable to be taxed, according to law, with respect to a particular income. And that the expression "wrong person" is obviously used as an antithesis of the expression "right person" only.
We observe that this assessee is the "managing director" of M/s. VNR Infrastructure Ltd. And that it is this latter entity which the fact is engaged in all the business activity(ies) and has been assessed separately throughout. A company is very a body corporate and a distinct entity apart from its director.
We conclude in these circumstances that the Commissioner of Income- tax (Appeals) has rightly deleted these twin additions in the assessee/individual's hands since corresponding undisclosed and unaccounted income pertains to its company M/s. VNR Infrastructure Limited carrying out the business in its own name. We make it clear while holding so that the Revenue has not even indicated the fact above the company's assessment qua the very income(s). We thus see no reason to reverse the Commissioner of Income-tax (Appeals) detailed findings for these precise reasons.
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2021 (6) TMI 294
Attachment order - recovery proceedings - HELD THAT:- Letter addressed to the Sub-Registrar, Ponneri Taluk, Ponneri, Tiruvellur District, per se, would not provide cause of action for filing the present writ petition.
If at all the petitioner is aggrieved with reference to certain contents in the letter, the petitioner is bound to approach he Competent Authority and submit explanations, objections or documents in order to establish or defend his case.
This Court cannot adjudicate such disputed facts in writ proceedings under Article 226 of the Constitution of India. All such factual disputes are to be adjudicated and resolved before the Competent Authority. Under Rule 11, Schedule II of the Income Tax Act, provides remedy to the aggrieved person and therefore, the petitioner has to avail the remedy by approaching the Authorities Competent in the manner known to law.
The impugned letter was issued by the Tax Recovery Officer to the Sub Registrar, Ponneri Taluk Ponneri, Tiruvallur District, seeking certain details, the same would not provide a cause of action for the purpose of moving the present writ petition nor this Court adjudicate all such disputed facts under Article 226 of the Constitution of India.
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2021 (6) TMI 267
Estimation of income - bogus purchases - CIT-A restricted addition to 12.5% of the bogus purchase - HELD THAT:- CIT(A) has decided the matter of controversy on the basis of the decision of Bholanath Poly Fab Pvt. Ltd. [2013 (10) TMI 933 - GUJARAT HIGH COURT] & CIT Vs. Simit P. Sheth[2013 (10) TMI 1028 - GUJARAT HIGH COURT]
In the instant case, sale is not doubted, therefore, the CIT(A) has restricted the addition to the extent of 12.5% of the bogus purchase we are of the view that CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, we upheld the finding of the CIT(A) on this issue and decide this issue in favour of the assessee against the revenue.
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2021 (6) TMI 266
Reopening of assessment u/s 147 - undisclosed income - assessee argued pendency of an appeal, reference or revision on a particular matter in the case of an assessee - HELD THAT:- Restriction provided in the 3rd proviso to Sec. 147 is qua the assessing or reassessing of income of an assessee involving matters which are subject matter of an appeal, reference or revision in its case. We are unable to agree with the claim of the ld. A.R, that pendency of an appeal, reference or revision on a particular matter in the case of an assessee would preclude the revenue from reopening the case of a third party.
Though the legislature in all its wisdom had in order to avoid parallel proceedings contemplated a restriction by way of a 3rd proviso to Sec.147, but the same, in our considered view cannot be stretched to the extent of reading restrictions on reopening the case of a third party. In fact, if the 3rd proviso to Sec. 147 is construed in the manner it has been projected by the ld. A.R before us, the same would disentitle the revenue from initiating reassessment proceedings in the hands of a third party, within the prescribed period of limitation, on the basis of information gathered in the case of an assessee. We thus not being able to persuade ourselves to subscribe to the aforesaid contention so advanced by the ld. A.R, reject the same.
Whether reasons recorded by the A.O, were insufficient, for arriving at a bonafide belief that the income of the assessee chargeable to tax had escaped assessment? - Material before the A.O was sufficient enough for him to arrive at a bonafide belief that the income of the assessee chargeable to tax had escaped assessment for the year under consideration. At this stage, we may herein observe that what is required at the stage of reopening of a concluded assessment is that the formation of belief by the A.O that the income of the assessee chargeable to tax had escaped assessment should have a nexus with the material available with him. We are unable to subscribe to the claim of the ld. A.R, who had tried to impress upon us that the material available before the A.O prompting the reopening of a concluded assessment should conclusively prove that the income of the assessee had escaped assessment. We thus not finding favour with the claim of the ld. A.R that the A.O had reopened the case of the assessee in the absence of sufficient material, reject the same. The additional ground of appeal No. (a) is accordingly dismissed.
Satisfaction of mandate of sub-section (1) of Sec.151 - We are unable to agree with the claim of the ld. A.R that the satisfaction of the sanctioning authority is not discernible from the records. In our considered view, the CIT-28, Mumbai had in no way fallen short of words to clearly express that as per the reasons recorded by the A.O, he was satisfied that it was a fit case for issue of notice u/s 148 of the Act. The ld. A.R has failed to point out as to how the approval granted by the sanctioning authority could be stamped as grant of approval in a mechanical manner or without application of mind. Insofar the order of the ‘SMC’ bench of ITAT, Delhi in the case of Anurag Vs. ITO, Ward-1(1), Ghaziabad [ITA No.1023/Del/2019, dated 25.11.2019] relied upon by the ld. A.R before us is concerned, the same in our considered view being distinguishable on facts would not assist the case of the assessee. Accordingly, not finding favour with the claim of the ld. A.R that the appropriate authority had failed to record his satisfaction as per the mandate of sub-section (1) of Sec.151 of the Act, we reject the same. The additional ground of appeal No. (b) is accordingly dismissed.
Whether A.O had proceeded with the assessment without providing the assessee a copy of the reasons to believe on the basis of which its concluded assessment was reopened? - Admittedly, in case an assessee applies for a copy of the reasons to believe on the basis of which recourse has been taken to proceedings u/s 147 of the Act, the A.O remains under a statutory obligation to furnish the same before proceeding any further with the assessment. But then, where there is no request by the assessee for supply of the reasons to believe, no obligation in our considered view would be cast upon the A.O to furnish the same. As the assessee in the case before us had at no stage applied for a copy of the reasons to believe on the basis of which its case was reopened, therefore, no fault can be attributed to the A.O in not supplying the same. In the backdrop of the aforesaid facts, finding no substance in the claim of the ld. A.R that the assessment framed u/s 143(3) r.w.s 147 would stand vitiated as the A.O had failed to supply the copy of the reasons to believe to the assessee, we reject the same.
Undisclosed income - The notings in the document as seized from the premises of M/s Pathik Construction i.e the buyer of the property in question clearly points out to the undisclosed consideration that had changed hands.
It is clear from the records that the assessee had purchased/acquired all the rights, interests and benefits in respect of the property in question from Jai Ganesh Co-operative Housing Society Ltd., vide the “Agreement to Transfer and Assign” for a consideration thus it would therefore be beyond comprehension as to how any part of consideration received on a subsequent sale of the said property was not to be accounted for in its hands. In fact, now when the assessee had accounted for the part sale consideration received from M/s Pathik Constructions in its books of accounts, there is no justification on its part to distance itself from the unaccounted sale consideration i.e the onmoney received from the said buyer
Now when the assessee firm i.e M/s Om Developers vide an agreement, dated 15.10.2006 was vested with the interests, rights and benefits in the property in question, therein de hors any material proving to the contrary it would thus be the rightful owner of any consideration received pursuant to a subsequent sale of the property/rights in the property in question. We thus not being able to persuade ourselves to subscribe to the claim of the ld. A.R that the aforesaid amount was paid by M/s Pathik Constructions to Jai Ganesh Co-operative Housing Society Ltd, decline to accept the same.
Accordingly, finding no infirmity in the view taken by the CIT(A) that the cash component of the sale consideration on account of sale of Plot No. 31, Sector 47, Dronagiri, Taluka: Uran, Dist: Raigad had to be taxed in the hands of the assessee firm, therein uphold the same. Assessee appeal dismissed.
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Customs
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2021 (6) TMI 270
Maintainability of appeal - one appeal or multiple appeals - in Order-in -Original 85 bills of entry were challenged - whether one appeal is sufficient or appellant is required to file 84 appeals? - HELD THAT:- In case there are number of bills of entry but for all the Bills of Entry if one order or decision is given then only one appeal will be sufficient. However, as per explanation to the said rule it is clear that when more than one Order-in-Original was passed assessee is required to file number of appeals as many as numbers of Orders-in-Original. In the present case there is no single order covering 84 bills of entry was passed but the 84 bills of entry itself were challenged by filing 84 appeals before the Commissioner (Appeals). In this fact 84 bills of entry are as good as 84 assessment orders. Therefore, the appellant is required to file 84 appeals.
The appellant is directed to file 83 more appeals within a period of 4 weeks from the date of order.
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Corporate Laws
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2021 (6) TMI 281
Approval of the Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016 - HELD THAT:- Upon considering the approval accorded by the members and creditors of both the Petitioner companies to the proposed Scheme, and the affidavit filed by the Ld. Regional Director, Northern Region, Ministry of Corporate Affairs, the report of Department of Income Tax and the Official Liquidator there appears to be no impediment in sanctioning the present Scheme. Consequently, sanction is hereby accorded to the Scheme under Section 230 to 232 of the Companies Act, 2013. The Petitioners shall however remain bound to comply with the statutory requirements in accordance with law.
The scheme is sanctioned - Application allowed.
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2021 (6) TMI 277
Stay on present proceedings - reference of parties to Arbitration in light of mandate of Section 8 of Arbitration and Conciliation Act, 1996 - original agreement is executed but frustrated later on - performance of contract came to an end - Sections 241-242 of The Companies Act, 2013 - HELD THAT:- In case of, BRANCH MANAGER, MAGMA LEASING & FINANCE LTD. AND ANR. VERSUS SMT. POTHURI MADHAVILATA AND ANR.[2009 (9) TMI 592 - SUPREME COURT], it is decided that if the original agreement is executed but frustrated due to repudiation/frustration/breach etc., it is performance of contract that has come to an end, but contract if still valid, arbitration clause operates for the purposes of resolution of disputes - In the amendment in the Arbitration and Conciliation Act of the year 2015, the specific word is mentioned as 'shall'. The power of referral court can be exercised even if there is previous court judgment to the contrary. The court must refer parties to arbitration unless it thinks that a valid arbitration agreement does not exist.
This matter can be referred to arbitration. The parties are at loggerheads since 2006 onwards and have probably approached every judicial forum to seek reliefs. We see that during the process some parties have left for heavenly abode, some have reached super-senior/senior citizen status and those recently getting involved in this unending litigation, are young generation, who should walk the road of living peaceful life rather than wasting time, energy and money on litigations, which can be resolved amicably.
The parties are referred to arbitration as prayed for in the application.
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2021 (6) TMI 275
Approval of Scheme of Merger - seeking directions for convening, holding and conducting of the meeting of the Shareholders - Section 230-232 of the Companies Act, 2013, r/w Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- Based on the prayers made by the Applicant Companies in the present Scheme of Merger, this Bench directs, in accordance to Section 230(5) of the Companies Act, 2013, to issue notices to the Regional Director (Northern Region), Ministry of Corporate Affairs, Income Tax Authorities, RoC concerned and the Official Liquidator.
The authorities are directed to make objection/representations, if any within 30 days from the date of receipt of the notice. In the event that no objections or representations are made within the stipulated timeframe, it shall be presumed that they do not have any objections - The Applicant Companies are directed to place the notice on their website, if any, and also place the same on the notice board of the registered office of Companies.
The Company Petition(s) shall be presented, on or before, 7 days from the date of filing the Chairman's Reports with the registry - Application disposed off.
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Insolvency & Bankruptcy
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2021 (6) TMI 282
Seeking direction to Respondent to consider the claim filed by the Applicant - rejection on ground that the same was submitted way beyond the period of ninety days from the initiation of CIRP - Approval of Resolution Plan - HELD THAT:- The present application was filed on 27.01.2021 and the Resolution Plan was approved by the CoC on 26.02.2021. An application for approval of the Resolution Plan has also been filed by the RP and the same is pending consideration by this Adjudicating Authority - Although, the present application had been filed before the approval of Resolution Plan by the CoC and before the Respondent rejected the claim, and although, the Respondent is at fault for having not replied to the email by the Applicant herein within reasonable time, the Applicant also does not seem to have put in any reminder or follow up with the RP regarding its claim after submitting it. Further, the claim by other two Applicants named hereinbefore, i.e., Dhandhania Brothers Private Limited and RD Fan Limited filed with the RP on 24.12.2020 had also been rejected by the RP on 26.12.2020, had the RP not mistaken Applicant's e-mail to be a repetition of claim as aforesaid, he would have, in all probability, rejected the Applicant's claim too on the same ground that it was filed beyond the stipulated time period.
The CIRP is a time-bound process and if the Adjudicating Authority sets the clock back for the reason that the Applicant was not diligent enough in pursuing its claim, it would certainly go against the main objective of the Code - It is wrong on the part of the Applicant to submit that the RP has himself caused unnecessary delay in consideration of the claim of the Applicant, that had been filed even before the Resolution Plan was received by the RP. The Applicant had filed the claim on 24.12.2020 and the RP had responded to it on 26.12.2020. Since it is not in the powers of the RP to condone the delay, it was Applicant's duty to approach this Adjudicating Authority within reasonable time, especially in a case where the claim with the RP had been submitted by the Applicant's Advocate.
While this Adjudicating Authority appreciates the submission of the Applicant that the timeline is only directory and not mandatory, it cannot mean that the directory provision of the Code can be used to contravene the objective of the Code - Application dismissed.
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2021 (6) TMI 280
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - existence of debt and dispute or not - time limitation - HELD THAT:- The loan amount was duly disbursed to the Corporate Debtor. The requisites of an application under section 7 of IBC are available on record and duly proved.
This is a fit case for admitting the petition, and for initiation of Corporate Insolvency Resolution Process in respect of the Corporate Debtor - petition admitted - moratorium declared.
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2021 (6) TMI 279
Seeking approval of the Resolution Plan - priority of payments of charges of CIRP costs and Operational Costs - Section 31 of the Code read with Regulation 39 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- In respect of compliance of Section 30(2)(a) of the Code, it is seen that there is a provision in the resolution plan at clause 4.1(ii) & clause 8.2 which provides for payment of CIRP costs in priority over payments to any other creditors from the upfront amount brought in by the RA. The Resolution Professional has also confirmed in the compliance certificate given in Form H that the Resolution Plan provides for the payment of Insolvency Resolution Process costs. Be that as it may it is made clear that Insolvency Resolution Process cost shall be paid in its entirety by the resolution applicant in priority to other debts of the corporate debtor - As regards compliance of clause (b) of Section 30(2) of the Code, the Resolution Professional has certified that the resolution plan provides for the payment of the debts of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the operational creditors in the event of a liquidation of the corporate debtor under Section 53.
There appears to be no discrimination in the resolution plan in respective class of creditors, as same treatment is provided to similarly situated each class of creditors - it is seen that clause (b) of sub-section (2) of Section 30 of the Code stands satisfied.
All the requirements of Section 30(2) are fulfilled and no provision of the law for the time being in force appears to have been contravened - It is a well settled proposition of law that commercial and business decisions of CoC are not open to judicial review. Adjudicating Authority cannot enquire into the commercial wisdom of CoC. The ground for rejection is limited to the matter specified under Section 30(2). It is however reiterated that the resolution plan in question meets the requirements specified in Section 30(2) of the Code and the reasoned commercial decision of CoC is neither discriminatory nor perverse.
The requirements as per the Code and regulations have been complied with - It is clarified that Section 30(2)(f) of the Code mandates that the resolution plan should not be against any provisions of the existing law - Resolution Plan is approved - approved 'Resolution Plan' shall become effective from the date of passing of this order.
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2021 (6) TMI 278
Seeking exclusion from CIRP Period - applicant's contention is that the CIRP of Corporate Debtor can end after the submission of Resolution Plan by applicant and its consideration by CoC - HELD THAT:- The period granted has been expired on 4th May, 2021 and that even though more than three weeks expired thereafter, the applicant has not filed the Resolution Plan. When this was brought to the notice of the learned counsel appearing for the applicant, she has stated that at least a short time may be granted to submit the Resolution Plan. The learned counsel for the Resolution Professional stated that if a short period is granted by this Tribunal, the Resolution Professional is ready to accept the Resolution Plan, so that he can place the same before the CoC for its consideration.
In view of the fact that more than one month has already availed by the applicant to submit the Resolution Plan, with the mutual consent of the parties, this I.A is disposed of with a direction to the applicant to submit the Resolution Plan within one week from the date of receipt of this order - Application disposed off.
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2021 (6) TMI 276
Maintainability of appeal - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - time limitation - existence of debt and dispute or not - HELD THAT:- It is beyond doubt that the default has occurred with respect to the payment of the financial debt due to the Applicant. The disbursement of loan by the applicant is nowhere denied and the same is received and admitted by the corporate debtor. The confirmation of the statement of account by the corporate debtor reflecting the debit of the interest payable, on the said loan amount as agreed @10%p.a. confirms the receiving of the financial debt by the corporate debtor. Moreover, in their audited financial statements for the year ending 31.03.2017 & 31.03.2018, the said position of the financial debt is confirmed.
As per Part IV Form 1 it is submitted that the date default is 09.09.2019 and the application is filed on 21.11.2019, which is well within the period of limitation and not barred by law - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - In the present application, the Applicant is entitled to claim its dues, establishing the default in payment of the financial debt beyond doubt. In the light of above facts and records the present application is admitted.
Application admitted - moratorium declared.
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2021 (6) TMI 274
Seeking extension for 40 days beyond the period of 330 days - Resolution Plan was pending for consideration before the CoC - section 60(5) and section 12 of the Insolvency & Bankruptcy Code, 2016 - HELD THAT:- The CoC was directed to consider the Resolution Plan within the extended period of time but from the averments made in the application and the submissions made by the Ld. Counsel on behalf the Resolution Professional, it is seen that the Resolution Plan has not been considered by the CoC as yet and on the similar grounds, the extension of another 60 days beyond 370 days of CIRP period has been prayed by the Resolution Professional.
That only after considering the submission of the Resolution Professional that a Resolution Plan was pending for consideration before the CoC, we had granted extension for 40 days beyond the period of 330 days. But on the basis of the averments made in the application and submissions made by the Ld. Counsel, it is seen that the Resolution Plan can only be placed before the CoC, once the application for claim of the Indian Overseas Bank is decided by this Adjudicating Authority.
Since the applicant through the COC has failed to consider the Resolution Plan pending for consideration within the extended period of 40 days and also could not provide the cogent reasons for not complying with the direction, we are not inclined to extend the CIRP period by another 60 days beyond the period of 370 days.
Application dismissed.
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2021 (6) TMI 273
Issuance of necessary direction to the Resolution Professional for acceptance of the complete claim of the applicant - Creditor in a class - verification of claims cannot be done on the ground that the payment was made in cash and the books of accounts of the Corporate Debtor were not made available by the Suspended Board of Directors of the Corporate Debtor - Section 60(5)(b) of the Insolvency & Bankruptcy Code, 2016 - HELD THAT:- The Regulation 8A(2) of the IBBI Corporate Persons Regulation, stipulates the modes by which, the existence of debt due to a creditor in class may be proved. Further if the records are not available with an information utility, then it can also be proved by other relevant documents including an agreement to sale, letter of allotment, and receipt of payment made - Here in the case in hand, it is not the case of the applicant that he is not a creditor in a class. Only dispute is in respect of the quantum of payment made by him and in support of that he has filed the photo copy of the money receipts issued by the Corporate debtor.
A liquidator under the law is empowered to admit or reject the claim in whole or in part and a time is also prescribed under Regulation 29 of the IBBI Liquidation Regulations to decide the claims, i.e. within 30 days from the last date of the receipt of the claims. The Regulation 29 (1) of the IBBI Liquidation Regulations says that within thirty days from the last date for receipt of claims, the Liquidator may either admit or reject the claim and Regulation 29(2) gives right to the creditor to file an appeal to the Adjudicating Authority against the decision of the liquidator under section 42 of the IB Code 2016 - the legislature has made a provision for appeal against the order of admission or rejection passed by the liquidator and there is no such provision of appeal in case of collation of claims by the IRP/RP is concerned.
The applicant has duly submitted the claim supported with the relevant documents and money receipts issued by the Corporate Debtor but the RP has acted beyond the duty/power vested with him under the law - Application disposed off.
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CST, VAT & Sales Tax
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2021 (6) TMI 297
Maintainability of petition - time limitation - primary contention of the petitioner is that prior to issuance of show-cause notice, the petitioner is entitled for consultation with the Noticee before issuance of show-cause notice in terms of the Circular No.1053/02/2017-CX dated 10.03.2017 - HELD THAT:- The proceedings being at the preliminary stage be concluded at the earliest and also the submission of the learned counsel for revenue that they would not take any coercive steps till adjudication is completed, it would be appropriate to dispose off the matter in the stated manner in order to avoid any procrastination of the proceedings which are at nascent stage. It is made clear that the order passed would not be a precedent to be followed in other matters, while noticing the peculiar facts and contentions raised in the petition and that the order is passed without adverting to the merits of the contention of either parties - It would be appropriate that the show-cause notice dated 22.04.2021 be kept in abeyance. The petitioner in the interrugnum would be afforded an opportunity of personal hearing in terms of the Circular dated 10.03.2017.
Petition disposed off.
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2021 (6) TMI 293
Validity of assessment order - reversal of Input Tax Credit - suppression of sales - mismatch of information - no pre-assessment notices served on the petitioner - HELD THAT:- Though this direction was issued as early as on 01.03.2017 in the case of M/S. JKM GRAPHICS SOLUTIONS PRIVATE LIMITED VERSUS THE COMMERCIAL TAX OFFICER [2017 (3) TMI 536 - MADRAS HIGH COURT] followed by the Commissioner of Commercial Taxes Department issuing a Circular in January, 2018 stating that all assessments involving the issue of mismatch are to be kept in abeyance till such mechanism is set up, nothing has transpired in this regard till date - the completion of assessment need not await the mechanism and have taken a view in other cases that the Department must collate all materials based on which the alleged mismatch is arrived at and furnish the same to the assessee for its response. Once this is done, the assessee is to be heard and a speaking order of assessment is to be passed.
The impugned order is set aside on the ground that no pre-assessment notices have not been served upon the petitioner - petition allowed.
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Indian Laws
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2021 (6) TMI 300
Grant of Regular Bail - Heroin - recovery of pullandas which were seized and sealed with the seal of ‘AK’ - search conducted by the Lady Constable - non-compliance alleged by the learned counsel for the petitioner is of Sections 41 and 42 of the NDPS Act - HELD THAT:- Search of the co-accused Parveen was taken by a lady Constable and the same was to maintain the dignity, however the search was taken in the presence of the ACP concerned and it cannot be said that on that count the search is vitiated. Further, the search has not taken place inside any building, conveyance or place but at the public place and hence, it cannot be said that Sections 41 and 42 of the NDPS Act have been violated. In case the search conducted by the Lady Constable would have been in the absence of senior officers, who were duly authorized to conduct the search, the judgments relied upon by the learned counsel for the petitioner would have been applicable.
The search in the present case was conducted at the instance of the authorized officer, but by the Lady Constable qua accused Parveen as she was a woman in accordance with law.
Once the accused were apprehended, kept in custody throughout the night, FIR registered in the morning at Police Station Crime Branch at Pushp Vihar, one fails to understand why the formal arrest was made at 11:45 a.m. as is evident from the Arrest Memo. Further, the Arrest Memo notes in Column No.2 “his wife being informed”, as also has the right thumb impression of Begum, the wife of the petitioner - the two accused were produced before the learned ASJ who granted one day police custody remand.
The petitioner is directed to be released on bail on his furnishing personal bond in sum of ₹50,000/- with one surety of the like amount subject to the satisfaction of the learned trial Court/duty Magistrate, further subject to the condition that the petitioner will not leave NCT of Delhi without the prior permission of the court concerned and in case of change of residential address and/or the mobile phone number, the same will be intimated to the Court concerned by way of an affidavit - petition disposed off.
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2021 (6) TMI 298
Dishonor of Cheque - insufficiency of funds - validity of demand notice - complainant/respondent in the complaint did not mention as to when the demand notice issued against the petitioner was served upon him - HELD THAT:- Section 138 is a penal provision that prescribes imprisonment upto two years and fine upto twice the cheque amount. It must, therefore, be interpreted strictly, for it is one of the accepted rules of interpretation that in a penal statute, the Courts would hesitate to ascribe a meaning, broader than what the phrase would ordinarily bear. Section 138 is in two parts. The enacting part of the provision makes it abundantly clear that what constitutes an offence punishable with imprisonment and/or fine is the dishonour of a cheque for insufficiency of funds etc. in the account maintained by the drawer with a bank for discharge of a debt or other liability whether in full or part.
The demand notice sent through registered post on 16.03.2016 in ordinary course of business would be deemed/presumed to have been served upon the petitioner on the said date itself in view of the fact that there is no denial thereto the same by the petitioner either before the trial court or this court. The 15 days time stipulated under the Act thus, would be deemed to have commenced with effect from 16.03.2016 and ended on 30.03.2016. The complaint indisputably has been filed on 31.03.2016 upon failure of the petitioner to make payment of the said amount to the complainant within 15 days after receipt of the notice and thus, after the expiry of the period of 15 days the complaint is competent and maintainable as also the proceedings initiated thereupon by the trial court.
Petition dismissed.
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2021 (6) TMI 295
Grant of Bail - Dishonor of Cheque - offences under Sections 138 and 141 of Negotiable Instruments Act - HELD THAT:- The fact remains that there are arguable points involved in this criminal revision petition and further the criminal revision petition is not likely to be taken up for final hearing in the near future and as such, this court is of the considered view that the petitioners herein are entitled to the relief of grant of suspension of sentence.
The petitioners are directed to be enlarged on bail on condition that they shall execute a bond for a sum of ₹ 10,000/- with two sureties each for a like sum to the satisfaction of the Judicial Magistrate-II, Fast Track Court, Coimbatore - Petition allowed.
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2021 (6) TMI 291
Dishonor of Cheque - acquittal of the accused - rebuttal of presumption - preponderance of probability - HELD THAT:- In the case of acquittal, there is double presumption in favour of the accused. Firstly, the presumption of innocence available to him under the fundamental principles of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by the competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the order of acquittal recorded by the trial court. However, the Criminal Procedure Code put no limitation, restriction or condition on exercise of the power of the Appellate Court to review, re-appreciate and reconsider the evidence upon which the order of the acquittal is founded. But it is settled that if two reasonable conclusions are possible on the basis of evidence on record, the Appellate Court should not disturb the finding of acquittal recorded by the court below.
The obligation on the prosecution may be discharged with the help of presumptions of law and presumptions of fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact. There is no quarrel about the above said legal proposition. But, this is a case where the accused has succeeded to bring on record such facts and circumstances - It is settled that there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden. The accused need to substantiate his case based on preponderance of probabilities. In the case of acquittal, there is double presumption in favour of the accused. An order of acquittal cannot be interfered with as matter of course. An order of acquittal can only be interfered with when there are compelling and substantial reasons for doing so. Only in exceptional cases where there are compelling circumstances and the judgment in appeal is found to be perverse, the Appellate Court can interfere with the order of acquittal.
There are no reason to interfere with the order of acquittal by the court - appeal dismissed.
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