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Showing 81 to 100 of 1548 Records
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2021 (9) TMI 1470 - ITAT DELHI
Denial of natural justice - CIT-A did not afford reasonable opportunity on the innocuous appellant to furnish documentary evidence and other details as desired necessary by him - HELD THAT:- A perusal of the record shows that there is nothing on record to show that any such opportunity was granted by the CIT(A) . It is well settled that in case an adjudicating authority finds the written submissions are not sufficient and complete then necessarily the First Appellate Authority should put this deficiency to the notice of the appellant. Without any specific communication to this effect, it cannot be said in all fairness that an effective opportunity of being heard has been granted to the assessee. Once it is seen that the submissions were without supporting documentary evidences then in an effective representation such an opportunity necessarily needs to be provided. No such effort appears to have been done.
Thus it of the view that since there is nothing available on record to show that the right to be heard was waived off by the assessee, let alone consciously waived off a fair opportunity of being heard effectively has not been made available - in the interests of substantial justice it is deemed appropriate to set aside the impugned order directing the assessee to place full facts, evidence alongwith supporting claims before the First Appellate Authority. It is made clear that the Ld. CIT(A) shall entertain the fresh evidences and pass an order in accordance the law - Appeal of the assessee is allowed for statistical purposes.
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2021 (9) TMI 1469 - MADRAS HIGH COURT
Money Laundering - provisional attachment order - property purchased in the name of the company was acquired out of the proceeds of crime as defined in Section 2(1) (u) of the PMLA, 2005 - HELD THAT:- On admission of the writ petition and granting an order of Interim stay, notice was given to the counsel for the Directorate of Enforcement and he entered appearance on 13.03.2012. Further, it is evident that the Directorate of Enforcement had knowledge about the interim order of stay. In spite of the stay order, the Deputy Director filed original complaint in O.C.No.129 of 2012 on the file of the Adjudicating Authority on 15.03.2012. Further, in the original complaint, the Deputy Director did not make the Indian bank as a party as interested party in the property.
The provision of Section 8(2) of the PMLA Act makes it obligatory on the part of the Adjudicating Authority to hear the interested party i.e., the Indian bank. Unfortunately, the Adjudicating Authority, without impleading and ordering notice to the Indian Bank, confirmed the attachment by an order 26.06.2012 during the pendency of the Writ Petitions and during the operation of the stay order.
The Hon'ble Apex Court has repeatedly held that any proceeding initiated, conducted or concluded in violation of an order of interim stay or injunction is non-est in the eye of law and the Adjudicating Authority should have waited till the disposal of the writ petitions or till the order of stay passed by this court is vacated. The action of the Adjudicating Authority despite having the knowledge of interim order of stay is clearly in defiance of the said interim order of stay. Therefore, the whole proceedings are vitiated and even the order dated 26.06.2012 passed during the pendency of the writ petitions shall be illegal and liable to be set aside as null and void.
Appeal dismissed.
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2021 (9) TMI 1468 - MADRAS HIGH COURT
Principles of natural justice - no proper enquiry - non speaking order - HELD THAT:- Appellant submitted that after the orders of the learned single Judge, the Government has sent a communication to the appellant to send a representation, based on which the representation has already been sent. Admittedly, no appeal has been preferred by the respondents/State.
In reply, the learned Government Advocate appearing for the respondents would submit that the representation of the appellant is pending before them and that they will take a decision within a period of three weeks from the date of receipt of a copy of the judgment and order shall be passed and decision shall be communicated to the appellant within a period of two weeks thereafter.
Appeal disposed off.
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2021 (9) TMI 1467 - ITAT BANGALORE
TP Adjustment - MAM selection - rejection of Comparable Uncontrolled Price (CUP) method adopted by the assessee Price and wrongly adopting Transaction Net Margin Method (TNMM) disregarding prices quoted by London Metal Exchange ("LME") which is a global benchmark for commodity pricing - HELD THAT:- As seen from the details of international transactions, the assessee is importing raw material from its AE and also making exports of products to the customers in accordance with the Purchase Order which is carried out by Wieland group. Thus, import as well as export transactions are interlinked and closely linked. The price of export is not free from the impact of the import price. Therefore, the international transactions in respect of import of raw material has direct bearing on export of goods.
TPO has applied TNMM by taking entire turnover of the assessee and then proposed an adjustment being the difference between the net margin of assessee as well as comparable price. Since these international transactions are closely linked and rather inter-dependent having a bearing on each other, therefore, for the purpose of determining the ALP it is appropriate to take composite transaction and apply TNMM as the most appropriate method. CUP is no doubt a preferable method of determining ALP as it leaves no scope of any possible variations in the process of computing ALP.
When transactions are relatable and interrelated, then if a particular transaction out of the composite transactions cannot be tested under CUP method, then it is not proper to apply separate methods for determining the ALP for each of the transaction, particularly when international transactions are closely linked and inter-depending having direct bearing on the price of each other. Therefore, we are of the considered opinion that in the given facts and circumstances of the case, the TNMM would be the most appropriate method for determining the ALP of international transactions entered into by the assessee with AE. We do not find any infirmity in the order of the DRP on this issue and the same is confirmed.
TPO not considered the underutilization of manufacturing capacities and the resulting idle costs while computing the assessee’s margins - AR submitted that assessee’s request for adjustment of capacity utilization while computing operating margins under TNMM has not been considered by the revenue authorities - HELD THAT:- The assessee has not furnished sufficient data pertaining to capacity utilisation of comparable companies so as to determine the material difference existing between the assessee and comparable. Hence, we remit this issue to the file of TPO with a direction to the assessee to furnish necessary data pertaining to capacity utilisation of comparable companies and for fresh adjudication of the issue by the TPO.
Selection of comparables by the TPO and application of filters - Manufacturing activities filter / Functional similarity filter - HELD THAT:- It is not necessary for the comparable company and the taxpayer to cater to the same industries in order to be functionally comparable. TNMM does not require strict product comparability such as the difference in thickness of the copper and copper alloy products produced.The import filter objection has been dealt with in detail.
Application of Foreign currency expenditure filter / Imports filter - HELD THAT:- It is noted that the consumption of raw materials is there in all of the comparable companies. The TPO has narrowed down to industries engaged in copper and its alloys. If copper and alloys are available in foreign markets much cheaper than the local markets, the comparables must have imported the raw materials from abroad. If the raw materials were much cheaper in India, the prudent assessee must have procured them locally instead of importing them. Hence, it goes to show that the cost of raw materials was not a differentiating factors whether one industry imports or not. Functional issues of each comparable are important here. The DRP compared each of the five companies with details and finally concurred with the findings of the TPO. Being so, we find no infirmity in the same and accordingly uphold the order of DRP.
Disallowance of IT Support and Maintenance charges as prior period expenses - AO disallowed the claim of expenditure relating to the earlier years - HELD THAT:- From the details furnished by the assessee, it is observed that all these expenses are from the related group concerns and assessee has not produced any evidence to show that these expenses actually crystallized during the current year, except invoices from its AE. No evidence for negotiations or finalization of terms is produced. We don't find any such negotiations are required for the sharing of expenditure as much of the expenses are in the nature of Information Technology services made available to the assessee in India. Apparently, no TDS was effected. There is no dispute that these expenses are related to earlier period and there is no substantiation that these are crystallised during the current AY except for the raising of invoices by the AE which is within the ambit of the assessee. Accordingly, the expenditure is not relatable to this year, as the same is crystallized this year. Hence we confirm the directions of the DRP.
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2021 (9) TMI 1466 - ITAT LUCKNOW
Reopening of assessment u/s 147 - reason to believe on the basis of AIR information - Cash Deposits of the appellant bank accounts - addition was made on the basis of G.P. ratio - HELD THAT:- Addition has been made on the basis of net profit ratio to the turnover. The Hon'ble Bombay High Court in the case of Black & Veatch Prichard Inc. [2016 (4) TMI 1365 - BOMBAY HIGH COURT] following the judgment of Jet Airways [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] has decided the issue against the Revenue wherein held as agreeable with the submissions which has been urged on behalf of the assessee that s. 147(1) as it stands postulates that upon the formation of a reason to believe that income chargeable to tax has escaped assessment for any assessment year, the AO may assess or reassess such income "and also" any other income chargeable to tax which comes to his notice subsequently during the proceedings as having escaped assessment. The words "and also" are used in a cumulative and conjunctive sense. To read these words as being in the alternative would be to rewrite the language used by Parliament. Our view has been supported by the background which led to the insertion of Expln. 3 to s. 147. Parliament must be regarded as being aware of the interpretation that was placed on the words "and also" by the Rajasthan High Court in Shri Ram Singh [2008 (5) TMI 200 - RAJASTHAN HIGH COURT] Parliament has not taken away the basis of that decision. While it is open to Parliament, having regard to the plenitude of its legislative powers to do so, the provisions of s. 147(1) as they stood after the amendment of 1st April, 1989 continue to hold the field.
However, Hon'ble Supreme Court has admitted the SLP filed by the Revenue. However, mere admission of SLP by the Hon'ble Supreme Court will not amount to overruling of its earlier judgment in the case of Jet Airways(Supra).Ground No.1 of the appeal of assesseeis allowed
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2021 (9) TMI 1465 - ITAT DELHI
TP adjustment in respect of royalty and commission - HELD THAT:- It is also not in dispute that the commission sales by the assessee constitutes only about 0.42% of the total revenue of the assessee whereas 99.58% of income is from trading of chemicals, as pleaded by the assessee - TPO compared the rate of commission charged by the assessee to one AE with the rate of commission charged by the assessee to other AEs. Such an exercise is not permissible under the provisions of section 92F(ii) read with section 92 of the Act, as has been held by the co-ordinate Bench in the case of assessee for the assessment year 2013-14 since the TPO was supposed to compare the controlled transaction with other uncontrolled transactions.
We are of the considered opinion that the orders of the authorities below do not stand the test of judicial scrutiny in so far as the adjustment on the aspect of royalty and commission are concerned and since there is no change in the facts and circumstances of the case from the assessment year 2013-14, while respectfully following the findings of the Tribunal in the order [2018 (5) TMI 946 - ITAT DELHI] we hold that the adjustment in respect of royalty and commission cannot be sustained and the same shall be deleted.
Interest on receivables - AO was of the opinion that any delay beyond the credit period shall be bench marked as an international transaction and by applying the same - AO calculated the interest chargeable on receivables by taking the credit period as 30 days and TPO suggested adjustment - HELD THAT:- It is not the case of the Revenue that even in respect of non-AEs also, the assessee is charging any interest. It is the policy of the assessee, as submitted that the assessee does not charge interest either from AEs or non-AEs and accordingly does not pay interest from AEs. Assessee demonstrated that as on 31.03.2016, a sum was receivable from AEs whereas the sum was payable by the assessee, resulting in net payable as per their books. There is nothing contrary to this averment made by the assessee with reference to the books. In Kusum Health Care Pvt. Ltd. [2017 (4) TMI 1254 - DELHI HIGH COURT]
We are of the considered opinion that the authorities below are not justified in making adjustment on account of interest receivable and therefore, impugned adjustment on account of interest receivable is directed to be deleted. Consequently, the appeal of the assessee deserves to be allowed.
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2021 (9) TMI 1464 - ITAT MUMBAI
Disallowance u/s 14A - Necessity to record satisfaction - HELD THAT:- Although, the CIT(A) had observed that the possibility of use of services of staff, office and establishment relating to the proprietary business of the assessee for making investments in shares and mutual funds could not be ruled out, however, we find, that he too had failed to record his satisfaction that having regards to the accounts of the assessee, it was not possible to accept the correctness of the assessee‘s claim that no disallowance of any expenditure was called for u/s 14A.
Assessee had maintained separate books of accounts for his activity of making investments in shares and mutual funds. Accordingly, in case the A.O; or the CIT(A) in exercise of his powers which are coterminous with that of an A.O, sought to disallow the claim of the assessee that no expenses could be attributed to earning of the exempt dividend income by him, then, there was an innate obligation cast upon them to have recorded the requisite satisfaction that having regard to the accounts of the assessee, as placed before them, it was not possible to generate the requisite satisfaction with regards to the correctness of the aforesaid claim of the assessee. We are afraid that as there is a clear lapse on the part of the lower authorities in validly assuming jurisdiction for dislodging the assessee‘s claim that no disallowance u/s 14A was called for in his hands, therefore, the disallowance worked out by the A.O u/s 14A r.w. Rule 8D(2)(iii) which thereafter had been sustained by the CIT(A) cannot be upheld and is liable to be vacated. The Ground of appeal no.1 is allowed in terms of our aforesaid observations.
Claim of ‘education cess‘ on the tax payable by him should have been allowed while computing his income for the year under consideration - HELD THAT:- Claim of the Ld. A.R that unlike “rates” and “taxes” the amount paid by an assessee towards “Education Cess” or any “other cess” viz. the Secondary and Higher Education Cess is not a disallowable expenditure u/s 40(a)(ii) we find that the said issue is squarely covered by the recent order of the Hon‘ble High Court of Bombay in the case of Sesa Goa Limited [2020 (3) TMI 347 - BOMBAY HIGH COURT] therein conclude that “Education Cess” and the Secondary and Higher Education Cess is not disallowable as a deduction u/s 40(a)(ii) of the Act. Accordingly, we herein restore the issue to the file of the A.O with a direction to give consequential effect to our aforesaid observations. The additional ground of appeal raised by the assessee is allowed in terms of our aforesaid observations.
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2021 (9) TMI 1463 - ITAT DELHI
TP adjustment to back office support service segment - Comparable selection - TPO made adjustment to transaction of merchanting trade of Agri-comodities and provision of back office support services - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected.
Addition of outstanding receivable - Classifying the international transaction of merchandising trade as a finance arrangement - assessee has alternatively requested to take interest rate of 2.74%, which the assessee had used to pay interest on advance received from associated enterprises - As per DR assessee has paid money out of Indian rupees and, therefore, suffered loss on interest in Indian Rupees and, thus, learned TPO justified in holding the arrangement as financial arrangement and benchmarking invoking the SBI prime lending rate +300 basis point - HELD THAT:- Since the payment from ‘LD Asia’ was received after a delay of 65 days, it is in international transaction in the nature of outstanding receivable simpliciter without any allegation of arrangement of colluded finance transaction. TPO has though alleged it as financial arrangement to benefit AE, but benchmarked it is outstanding receivable. But in both ways, the currency of transaction is US Dollar. In first way, it is US Dollar have been sent to AE; in second way, US Dollar was outstanding to be received for 65 days. Neither the loan has been given in Rupees, nor outstanding was to be received in Rupees.
Benchmarking of the transaction we agree with the learned Counsel of the assessee that in view of transaction of sale in US dollar, adjustment for interest should be benchmarked on the basis of currency of transaction following the decision of Cotton Naturals (I) P Ltd [2015 (3) TMI 1031 - DELHI HIGH COURT] accordingly the Learned TPO is directed to recompute the adjustment. The ground No. 4 of the appeal is dismissed, however, the alternative ground 4.1 is allowed for the statistical purposes.
Disallowance u/s 14A - Whether addition should be made on average investment and not on turnover? - HELD THAT:- During the year under consideration, assessee has made purchase and sale of mutual funds of huge amounts and, therefore, incurring of expenditure for earning exempt income cannot be denied in terms of section 14A of the Act. However, if Rule 8D of the Rules is invoked, there would not be any disallowance in view of no opening and closing stock value of mutual funds. In the circumstances, we accept the alternative claim of the assessee to restrict the disallowance to the extent of exempted income following the decision of Joint Investment Private Limited [2015 (3) TMI 155 - DELHI HIGH COURT] and accordingly direct to restrict the disallowance to the amount of ₹ 94,929/-. The ground of the appeal of the Revenue is accordingly allowed partly.
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2021 (9) TMI 1462 - ITAT DELHI
Disallowance of expenses as no business activity was carried out by the assessee during the year under consideration - difference between commencement of the business and setting off of the business - HELD THAT:- The project cost in relation to a project comprises of cost of land and cost of development rights, borrowing cost, construction and development cost. In relation to land, the entire cost of land and development rights, stamp duty registration charges and other incidental expenses have to be capitalized. With relation to the borrowing cost, the interest directly related to the project is to be capitalized.
All the direct costs relating to the construction and development of the specific project have to be capitalized. The construction cost includes conversion cost, municipal sanction fee, expenses incurred, site labour cost, cost of material, cost of hiring plant & machinery, cost of designs and claims of the third party. The general administrative cost, advertisement, brokerage, selling cost, depreciation of the vehicles and office expenditure are part of the revenue expenditure and need not be capitalized.
There is difference between commencement of the business and setting off of the business. All the expenses incurred pre-commencement are to be treated as pre-operative expenses and the expenses incurred which do not form the part of the “work in progress” (WIP) like office expenses, salaries, advertising, travelling expenses which are incurred for running of the business operations are to be treated as revenue expenditure. Hence, the disallowance made by the AO is liable to be obliterated. Appeal of the assessee is allowed.
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2021 (9) TMI 1461 - BOMBAY HIGH COURT
Validity of assessment order passed as prejudicial to petitioner - respondent no.3 has noted that a show cause notice alongwith draft assessment order was issued on 21st April 2021 but petitioner failed to provide any documentary evidence or even respond to the said show cause notice - HELD THAT:- At Exhibit “L” to the petition is a copy of the reply to the show cause notice. In the said exhibit, a print out of the e-proceedings response acknowledgment from the Income Tax Department is also annexed which confirms that the reply to show cause notice alongwith various annexures have been submitted on 27th April 2021. Therefore, respondent no.3 has erred in stating that petitioner did not even respond to the show cause notice. It is, therefore, also obvious that respondent no.3 has not considered the reply filed by petitioner before passing the assessment order.
In the circumstances, the assessment order dated 29th April 2021 impugned in this petition is quashed and set aside. Consequently, the demand notice dated 29th April 2021 u/s 156 of the Income Tax Act, 1961 is also quashed and set aside. The question of issuance of any other consequential notice will not arise.
The matter is remanded for de novo consideration. The concerned authority may pass such order as he may deem fit in accordance with law. We will hasten to add, we have not made any observations on the merits of the case.
We have to note that in the affidavit in reply filed by one Manoj Kumar, Income Tax Officer, Mumbai and affirmed on 12th August 2021, there is no denial of the fact that reply has been filed to the show cause notice. According to affiant, the Income Tax Business Application (ITBA) does not show any response of assessee to the notice. The least we would have expected the Officer, who has affirmed the affidavit, is to diligently go through the portals of the Income Tax Authorities particularly, when petitioner has annexed to the petition the e-proceedings response acknowledgment and not file a wishy washy reply.
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2021 (9) TMI 1460 - ITAT BANGALORE
DRP power to condone the delay in filing objections by the assessee before the Panel - AR admitted that there was a delay in filing the objections before the DRP by 3 days (the assessee has to file objections before the DRP u/s 144C(2)(b) within 30 days from the date of receipt of draft assessment order) - HELD THAT:- DRP derives its authorities and powers from the provisions of section 144C and its procedures are governed by Income Tax (Dispute Resolution Panel) Rules, 2009. The provisions of the Act or Rule do not give power to the DRP to condone any delay in filing the objections by the assessee before the Panel. If the Legislature had intended to give such powers, it had been expressly implied as in the case of powers with the CIT(A) u/s 249(3) of the I.T.Act and ITAT u/s 253(5) of the I.T.Act. Therefore, we are of the view that the DRP does not have powers to condone the delay of filing objections by the assessee before the Panel. See INNO ESTATES PRIVATE LIMITED [2018 (9) TMI 222 - MADRAS HIGH COURT] - we hold that the DRP has no power to condone the delay in filing objections by the assessee before the Panel.
ITAT power to hold that the assessment order is barred by limitation - In this case, the final assessment order dated 30.09.2016 was not pursuant to the direction of DRP. Therefore, the correct course open for the assessee would have been to file an appeal before the CIT(A) and pursue the said issue. The Hon’ble Madras High Court in the case of Inno Estates (P.) Ltd [2018 (9) TMI 222 - MADRAS HIGH COURT] had also decided the above issue indirectly. In the case considered by the Hon’ble High Court, the Advocate for the assessee submitted that the appeal would lie to the ITAT u/s 253(1)(d) of the I.T.Act and not before the CIT(A) u/s 246(1)(a) of the I.T.Act. This contention of the Advocate was rejected by the Hon’ble Madras High Court. The Hon’ble Madras High Court directed the assessee to file an appeal to the CIT(A) instead of ITAT
The plea of the assessee that the assessment order is barred by limitation, is not entertained on account of the reason that ITAT does not have jurisdiction for the same. Tribunal in the case of Yokogawa India Ltd. [2021 (4) TMI 151 - ITAT BANGALORE] relied by the assessee will not have application, since the ITAT has not considered the judgment of Hon’ble Madras High Court, cited supra. As regards the DR’s reliance on the ITAT order in the case of Himalaya Drug Co. v. DCIT (supra), we are not taking note of the same, since we have no jurisdiction to consider the plea of limitation on facts of this case. It is ordered accordingly.
Appeal filed by the assessee is dismissed.
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2021 (9) TMI 1459 - GUJARAT HIGH COURT
Restructuring of financial assistance to MSME sector - Seeking direction to Respondent to implement the Restructuring Package already granted by the Respondent to the Petitioner No.1 - seeking direction to Respondent not to take any further action under the Securitisation Act and to maintain Status Quo in the matter against the Petitioners and the Properties in question.
It is the case of the petitioners that though the respondent-Bank issued the sanctioned letter for restructuring on 30th March, 2021 as per the notice issued under Section 13(2) of the SARFAESI Act, the account was classified as NPA account as on 27th February, 2021.
HELD THAT:- Having heard the learned advocates for the respective parties and considering the material on record as well as the provisions of the SARFAECI Act, it appears that the respondent-Bank has issued the sanctioned letter dated 30th March, 2021 permitting the restructuring of the existing facility provided to the petitioner No.1.
As per the circular issued by the Reserved Bank of India on 6th August, 2020 which provides for restructuring of advances to MSME sector stipulates that the restructuring of the borrower account is required to be implemented by March 31, 2021 - On perusal of the Circular, it is clear that the respondent-Bank has issued the sanctioned leter on 30th March, 2021 which is prior to the last date i.e. March 31, 2021. The interpritation of the respondent-Bank therefore is not legal and tenable by interpriting the circular that the restructuring of the borrower account is to be implemented by March 31, 2021 means all the formalities are required to be completed by March 31, 2021. Once respondent-Bank has issued the sanction letter of March 30, 2021, it would mean that the restructuring of the borrower acount is implemented subject to the fulfilment of the terms and conditions of the sanction letter.
It is apparent from the contents of the letter dated 06.07.2021, the respondent-Bank has not stated as to which of the terms and conditions as per the sanction letter of the restructuring is not fulfilled by the petitioners - In view of the facts and taking into consideration the fact about the issuance of the sanction letter dated 30th March, 2021 as well as considering the RBI circular dated 6th August, 2020, it cannot be said that the restructuring of the borrower account is not implemented by March 31, 2021.
The impugned action of respondent-Bank to cancel the sanction letter dated 30th March, 2021 as well as the letter dated 6th July, 2021 informing the petitioners about such cancellation are hereby quashed and set aside - petition allowed.
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2021 (9) TMI 1458 - CALCUTTA HIGH COURT
Prayer for issuance of a writ of quo-warranto - validity of nomination of respondent No. 2 as the Chairman of the Committee on Public Accounts - seeking direction to the respondent No. 1 to appoint/nominate member of the opposition party as Chairman of the Committee on Public Accounts.
Disqualification petition - HELD THAT:- The objective and purpose of Tenth Schedule is to curb the evil of political defections motivated by lure of office, which endangers the foundation of our democracy. The disqualification takes places from the date when the act of defection took place. The constitutional authorities who have been conferred with various powers are in fact coupled with duties and responsibilities to maintain the constitutional values. In case they fail to discharge their duties within time, it will endanger the democratic set up. Even for decision of the petitions filed for disqualification of a member by the Speaker, the Courts have to intervene and specify the timeline. A Speaker in discharge of his constitutional duties is expected to be neutral. The power of the Speaker to adjudicate upon an application filed for disqualification of a member of Assembly has been held to be quasi-judicial in nature, which is subject to judicial review by the Courts. It is because of inaction of the Speaker that this Court has been approached in this avoidable litigation. In the case in hand, petition filed for disqualification of the respondent No. 2 with allegations of his defection from BJP to AITC is pending before the Speaker since June 17, 2021. Three months period expired on September 16, 2021.
Rules of procedure and conduct of business in the West Bengal Legislative Assembly, Constitution of Committees and importance - HELD THAT:- A perusal of the various Rules of Business with reference to the working of the Committees and the work to be discharged by them and the powers conferred on them clearly establish the importance thereof. Hon'ble the Supreme Court has opined that the Committees constituted by the legislative bodies perform a key role in the functioning and working of the Houses as there is more reasonable and applied discussion in these Committees. Effective working of the Committees is a prelude to the core working of the Assemblies. The Committees are in fact an extension of legislature itself and do informed work. These Committees are consisted of Members of the Assembly having affiliation to different parties. It is a participative process in the democratic set up. The importance of the Committee on Public Accounts is evident from the fact that Rule 302 of the Rules of Business provides for proportional representation. The Chairperson has to be appointed by the Speaker. It is not the power to be exercised by the Assembly - Even if in the present case the declaration of the names of the Members of the Chairpersons of the Committees was made in the Assembly, this cannot be termed to be proceedings in the Assembly as it was merely a declaration made by the Speaker in the presence of all the Members. It was not subject matter of discussion amongst the Members in the Assembly. There may be some Committees constituted by the State Assemblies or the Parliament but the case in hand is different.
Constitutional Convention - HELD THAT:- The fact remains that the Chairman was declared keeping in view the convention and noticing all the facts. Nothing was pointed out at the time of hearing that the constitutional convention as was admitted in the declaration and as could be seen to be passing the three-question test applied in the case of Supreme Court Advocates-on-Record Association And Others's [2015 (10) TMI 2687 - SUPREME COURT] is in contravention to any of the provisions of Constitution of India. Rather it is in aid thereof to maintain the constitutional values and healthy democracy. There was no dispute raised by either of the parties on the principle of law that the constitutional convention are binding and enforceable.
Judicial Review - HELD THAT:- In the case in hand as is evident from the facts on record there is failure on the part of the Speaker to discharge his constitutional duty coupled with established admitted constitutional conventions. Apparently he has worked on dictates. Finally, he was caught in the web knitted by him. On one hand, he was fair enough to state in the declaration made by him that there is a rich and healthy tradition in the Assembly of having a Member of the opposition as the Chairman of the Public Accounts. The tradition was being followed for a period of 54 years or so. Keeping in view that tradition, the Speaker appointed a Member of the opposition party as the Chairman of the Committee on Public Accounts. However, now the aforesaid declaration is sought to be explained that it is not necessary to have a Member of opposition party as the Chairman of the Committee on Public Accounts. In fact, he was not even required to be impleaded as respondent in the petition to answer the pleadings as the contents of the declaration made by him are sufficient. Any denial by the respondent No. 2 is meaningless.
The protection given in Article 212(2) is to the officer or the member of the legislature in discharge of his duties. Both the clauses of Article 212 operate in different fields. Clause (1) talks about challenge to the proceedings whereas Clause (2) grants protection to the officers. While challenging inaction of an authority, may be constitutional authority, he need not be impleaded as party to the proceedings however, still his action can be challenged - It is not a case of procedural irregularities, which could debar this Court from entertaining the petition in terms of Article 212 of the Constitution of India. It is a case of blatant illegality. Firstly, the Speaker was required to decide the petition filed before him for disqualification of the respondent No. 2 having defected from BJP to AITC, as a result of which his membership to the Assembly itself was in doubt. In case the respondent No. 2 does not remain the Member of the Assembly, there was no question of he being even the Member of the Committee what to talk of its Chairman.
Quo-warranto - HELD THAT:- Before a writ of quo-warranto can be issued the primary question is to be decided is whether the person concerned is a usurper of a Public Office. If the answer to the question that respondent No. 2 is holding a public office, this Court can examine the prayer for issuance of a writ of quo-warranto, otherwise not - the word "Public Officer" has been defined in Code of Civil Procedure to include every officer in the service or pay of the Government or remunerated by the fee or commission for performance of any duty. In the case in hand, it cannot be denied that the Members of the Legislative Assembly get their salaries from the public exchequer. That means from the public exchequer.
In the case in hand, the allegation of the petitioner is that the respondent no. 2 had defected from BJP to AITC. A petition for disqualification was pending before the Speaker before even he was nominated as the Chairman of the Committee on Public Accounts. The disqualification is from the date when the act of defection took place. Failure on the part of the Speaker to adjudicate upon that petition despite the maximum period provided therefor having expired, is creating more trouble as a result of which the interference of this Court has been called for. In fact, the respondent No. 1 should have first decided the petition for disqualification of the respondent No. 2 and thereafter, considering his eligibility, should have taken steps to appoint him as the Chairman of the Committee on Public Accounts.
Maintainability of PIL - HELD THAT:- Maintainability of PIL in the present case will not be an issue as constitutional issues have been raised by the petitioner.
The issue pertaining to disqualification of the respondent No. 2 as Member of the Legislative Assembly is co-related with him being the Chairman of the Committee on Public Accounts. A petition filed for his disqualification is pending before the Speaker for the last more than three months, the maximum period fixed in Keisham Meghachandra Singh's case [2020 (1) TMI 1174 - SUPREME COURT] for decision thereof.
Adjourned to October 07, 2021. In case of failure this Court will decide further course of action to be taken in the matter.
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2021 (9) TMI 1457 - SC ORDER
Validity of the retrospective amendment to Section 143(1A) - whether the retrospective effect given to the amendment would be arbitrary and unreasonable inasmuch as the provision, being a penal provision, would operate harshly on assessees who have made a loss instead of a profit, the difference between the loss showed in the return filed by the assessee and the loss assessed to income tax having to bear an additional income tax at the rate of 20%? -
HELD THAT:- It is common ground raised in M/S. SATI OIL UDYOG LTD. & ANOTHER [2015 (3) TMI 854 - SUPREME COURT] as held that the issue raised in this appeal is squarely answered by this Cour Section 143 (1A) can only be invoked where it is found on facts that the lesser amount stated in the return filed by the assessee is a result of an attempt to evade tax lawfully payable by the assessee. The burden of proving that the assessee has so attempted to evade tax is on the revenue which may be discharged by the revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has, in fact, attempted to evade tax lawfully payable by it. Subject to the aforesaid construction of Section 143 (1A), we uphold the retrospective clarificatory amendment of the said Section and allow the appeals.
As the fact situation is similar, it is urged that this appeal may be disposed of on the same terms.
Consequently, we hold that the additional tax levied on the appellant cannot be lawfully recovered. Hence, the demand raised by the Department is set aside.
Accordingly, this appeal is allowed.
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2021 (9) TMI 1456 - ITAT HYDERABAD
Reopening of assessment u/s 147 - Reason to believe - Change of opinion - HELD THAT:- We are in Assessment Year 2010-11 wherein the AO had framed his section 143(3) regular assessment followed by recording of the foregoing reasons culminating in issuance of section 148. This impugned reopening therefore has been initiated beyond the specified period of four years from the end of the relevant assessment year in light of section 147(1) 1st proviso.
The said proviso stipulates that such a reopening would only be initiated if it is found that the assessee had not disclosed all the relevant particulars “fully” and “truly” before the AO in the first round.
CIT DR to dispute that the AO’s sole reopening reason has placed reliance on the assessee's books only regarding “reversal on account of cancellation and price revision”.
We therefore quote hon’ble Bombay high court’s landmark decision in Hindustan Lever Limited Vs. R.B. Wadekar[2004 (2) TMI 41 - BOMBAY HIGH COURT] that an AO’s reopening reasons have to be read on standalone basis; as it is, without any scope of further improvement at a latter stage by way of addition, deletion or substitution therein. We thus quote that to conclude that the impugned reopening has been rightly quashed by the CIT(A) as a mere change of opinion only. Revenue’s appeal is dismissed.
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2021 (9) TMI 1455 - PUNJAB AND HARYANA HIGH COURT
Seeking grant of regular bail - only argument raised by learned counsel for the petitioner is that the co-accused have been released on bail by the Additional Sessions Judge, Panipat - HELD THAT:- A perusal of the order dated 12.03.2021 reveals that the argument of the co-accused being granted bail was also raised by the learned counsel for the petitioner in CRM-M-298-2021 and the same did not find favour of this Court for granting bail to the present petitioner. The order passed by this Court was challenged in Special Leave to Appeal (Crl.) No.3887 of 2021 which was dismissed as withdrawn on 28.05.2021. No change in circumstances since the dismissal of the second petition for grant of regular bail vide order dated 12.03.2021 has been pointed out and canvassed.
This is not a fit case for grant of regular bail to the petitioner. Accordingly, the present petition is dismissed.
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2021 (9) TMI 1454 - ORISSA HIGH COURT
Revocation of cancellation of registration - Revenue is ready to consider the application of the assessee - HELD THAT:- the delay in Petitioner’s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner’s application for revocation will be considered in accordance with law.
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2021 (9) TMI 1453 - RAJASTHAN HIGH COURT
Maintainability of petition - HELD THAT:- Granting liberty to the petitioner to approach the NCLT with regard to the orders passed by the authority under the RIICO Disposal of Land Rules, 1979, in terms of Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - It would be open for the RP appointed under the Insolvency and Bankruptcy Code, 2016 to raise all submissions including extension of moratorium period before the NCLT.
Petition disposed off.
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2021 (9) TMI 1452 - SC ORDER
Deduction u/s 80IA on Internet services and internet telephone - reconstitution - change in shareholding - Revenue argued business was formed by splitting up and reconstruction of business already in existence or by transfer of old Plant & Machinery - Pattern of shareholding - Once the assessee is able to show that it has used new plants and machinery which has not been previously used for any purpose and the new undertaking is not formed by splitting up or reconstruction of business already in existence - HELD THAT:- We see no reason to interfere with the impugned judgment and order passed by the High Court. The Special Leave Petition is dismissed.
Pending applications shall stand disposed of.
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2021 (9) TMI 1451 - SUPREME COURT
Regularization of adhoc employees - eligibility for pensionary benefits - HELD THAT:- The pensionary benefits which are being disbursed to the appellants shall not be disturbed. Likewise, the pensionary payments which are being disbursed to the respondents shall be paid over in accordance with law - No recoveries shall be made of any nature whatsoever from the appellants
Insofar as the companion appeals are concerned, as recorded earlier, CWP No 16925 of 2003 and CWP No 4490 of 1994 were instituted on the basis of the observations of the Single Judge in Malook Singh’s case. That aspect has been duly clarified both in the Letters Patent Appeal and by the Single Judge in the judgment dated 5 January 2011. Hence, no further directions are required in the companion appeals. Both sets of appeals are disposed of.
Appeal disposed off.
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