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2023 (12) TMI 1369
Winding up of the respondent on the ground that it had failed to pay his admitted dues - Sections 434 and 439 read with Section 433(b), (e), (f) of the Companies Act, 1956 - HELD THAT:- Since the appellant’s salary slips placed on record are not disputed, it is evident that the TDS was deducted by the respondent and that it was liable to deposit the same with the concerned authorities at the relevant time - Similarly, the appellant also claimed that the respondent has failed to deposit the provident fund as reflected in the salary slips. The deposit of provident fund is also a statutory obligation and the failure to do so would invite proceedings by the concerned authorities.
Insofar as the other claims are concerned, this Court finds no infirmity with the impugned order dated 12.11.2018 holding that the same are subject matter of some controversy. It is settled law that proceedings under Section 433(e) of the Companies Act would lie only in respect of debts that are admittedly due. A company is not liable to be wound up under Section 433(e) of the Companies Act in respect of debts that are disputed. However, the company’s defence as to the claim of an admitted debt must be bonafide and not a moonshine defence.
In the present case, it cannot be accepted that the controversy raised by the respondent is, ex facie, untenable or a moonshine defence. Thus, there are no infirmity with the impugned orders passed by the learned Company Court except to the limited extent that the appellant’s claim regarding TDS and statutory dues has not been included in the admitted dues.
Insofar as the statutory dues regarding provident fund is concerned, it is not disputed that the respondent is liable to deposit the same. The learned counsel for the respondent states, on instructions, that the amount of outstanding provident fund will be paid to the appellant along with interest within a period of four weeks from date, if the same is not deposited with the concerned authorities.
It is clear that there is no dispute as to the payment of the amount of ₹ 2,62,800/-. The learned counsel for the respondent states that this amount would be paid along with the applicable interest. He states that in the event the respondent had not deposited the said amount with the PF authorities, the respondent shall do so within a period of four weeks from date along with applicable interest for the period.
The respondent shall deposit the admitted amount of ₹ 2,62,800/- along with full interest as applicable with the concerned PF authorities within a period of four weeks from today and provide the evidence for the same to the appellant - The respondent shall also pay costs of ₹ 50,000/- to the appellant within the said period - appeal disposed off.
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2023 (12) TMI 1368
Validity of order u/s 201/201(1A) as barred by limitation - TDS not deducted on lease rent to New Okhla Industrial Development Authority (NOIDA) - HELD THAT:- As gone through the provisions of section 201(3) of the Act as it stood at the relevant point of time and applicable to AY 2011-12, wherein it states that assessment for TDS return could not be framed beyond two years from the end of the Financial Year for which the assessment is sought to be framed. Accordingly, assessment framed by the Ld. AO on 28/12/2017 is barred by limitation.
Further, we find that for the regular TDS returns filed by the assessee for AY 2011-12, the erstwhile TDS Officer had already framed an assessment u/s 201/201(1A) of the Act on 15/03/2012 accepting the claim of the assessee. Hence, the assessments stood completed for the AY 2011-12. This assessment was neither reopened by the Ld. AO nor subjected to any revision proceedings u/s 263 of the Act by the Ld. PCIT. While this is so, there is absolutely no need for the Revenue to have framed yet another assessment on 28/12/2017 for AY 2011-12 by taking a divergent stand with regard to applicability of TDS on lease rent paid to NOIDA. When this fact was brought to the notice of the Ld. CIT(A), the Ld. CIT(A) did not even bother to give any finding on the same. Hence, we have no hesitation to hold that the second assessment framed on 28/12/2017 deserves to be quashed as void ab-initio for more than one reason and it is also barred by limitation. Appeals of the assessee are allowed.
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2023 (12) TMI 1367
Reversal of credit - Closure of factory - non receipt of goods accompanying invoices stand admitted by all the three parties - HELD THAT:- The contention which was however addressed by the appellant was that even if credit had been availed albeit fraudulently, the same would stand reversed at the time of issuance of invoices - This understanding of a reversal of credit is what has been answered against the appellant by the CESTAT.
It is thus manifest that the CESTAT was justified and correct in ultimately coming to conclude that reversal of credit would not sustain, at least in the manner as suggested by the appellant.
There are no merit in the appeal. The instant appeal along with pending application shall consequently stand dismissed.
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2023 (12) TMI 1366
Seeking grant of regular bail - illegal trade in psychotropic substances - Contraband item - inadmissible statements - no reasons to believe were recorded in writing - violation of Section 42 of the NDPS Act - HELD THAT:- Section 52-A of the NDPS Act prescribes that upon seizure of psychotropic substances, the officer shall approach the Magistrate, under whose presence and supervision the process of sampling will be conducted and certified to be correct. Though the application under Section 52-A of the NDPS Act has to be made without undue delay, no time limit for the same has been prescribed.
A Co-ordinate Bench of this Court in Arvind Yadav v. Govt. (NCT of Delhi) [2021 (7) TMI 1422 - DELHI HIGH COURT], refused the grant of bail in a case involving commercial quantity of cocaine despite the sampling not being carried out in the presence of a Magistrate.
Recently a Co-ordinate Bench of this Court in SURENDER KUMAR VERSUS CENTRAL BUREAU OF NARCOTICS (CBN) [2023 (8) TMI 1548 - DELHI HIGH COURT] has observed that Section 52-A of the NDPS Act is directory in nature and non-compliance of the same, in itself, cannot render the investigation invalid. Accordingly, the bail application of an accused charged of illegally selling narcotic medicines was dismissed by taking into account that the case involved commercial quantity of such medicines.
There is no mandatory time duration prescribed for compliance of Section 52-A of the NDPS Act. Though it is desirable that the procedure contemplated in Section 52-A of the NDPS Act be complied with at the earliest, mere delayed compliance of the same cannot be a ground for grant of bail. The applicant will have to show the prejudice caused on account of delayed compliance of Section 52-A of the NDPS Act - In the present case, the sampling of the seized psychotropic substances was carried out in the presence of the Magistrate and the accused persons and the samples were directed to be sent for testing. The applicant has failed to show the prejudice caused to him on account of the delayed compliance of Section 52-A of the NDPS Act.
Considering the facts and circumstances including the fact that commercial quantities of psychotropic substances have been recovered at the instance of the applicant, it is not possible to form a prima facie view at this stage, that the applicant is not guilty of the offences or that he would not commit similar offences if released on bail. Therefore, the twin conditions of Section 37 of the NDPS Act are not satisfied and bail cannot be granted to the applicant at this stage.
The present application is dismissed.
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2023 (12) TMI 1365
Penalty u/s 271(1)(c) - addition towards advance for sale of the land from the prospective purchasers - HELD THAT:- As noticed that the AO had specifically stated that the sale deeds as proffered by the assessee for the purpose of substantiating the advance received from prospective buyers was only to the extent of Rs. 5,74,000/-. The sale deeds proffered also did not show any advances having been received by the assessee prior to the execution of the sale deed. The assessee also had a claim that the balances of the advances received were refunded. There was absolutely no evidence proffered to show such refunds.
AO made the addition, which though modified by the First Appellate Authority was restored by the Tribunal and which restoration was upheld by this Court. In the penalty proceedings the Tribunal relied on the First Appellate Authority’s order and confirmed the penalty only with respect to the addition which was disallowed to be treated as advance for sale of land received from prospective buyers.
We find no appeal having been filed by the Revenue against the order of the Tribunal. Hence, the penalty can be only to the extent of that confirmed by the Tribunal, though the entire addition is confirmed in the quantum appeal.
Addition on account of difference of opening balance of capital as per the revised capital account - This court in the quantum appeal has found that this was reflected in the original returns filed before the block assessment and since there was no reopening of the assessment there can be no addition made in the block assessment. The penalty imposed hence has to be deleted.
Disallowance of claim u/s 54B and u/s 54 - The additions were sustained in the assessment order which was interfered with by the First Appellate Authority on the ground that they were declared in the regular return. Tribunal reversed the order of the First Appellate Authority in the quantum appeal and restored the additions made, since they were never claimed in the original return filed. The quantum appeal before this Court also has not dealt with the issue and Tribunal’s order stands confirmed.
Tribunal in the above circumstances found that the penalty is justified on this count also. However, we are of the opinion that if no deduction was claimed in the original return then definitely the capital gains would have been assessed to tax. If such assessment has already been made and deduction is now claimed under Section 54B and 54F in the block return and rejected there is no ground of imposition of penalty. We hence delete the penalty imposed on the ground of a wrong claim of Section 54B and 54F of the Act.
Receipt of gift from the assessee’s brother - AO, FAA , Tribunal and this Court in the appeal from the assessment order found that there is no evidence produced by the assessee to prove the amounts received as gift from his brother. Hence, the penalty imposed is justified and is upheld.
Appeal partly allowed.
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2023 (12) TMI 1364
Validity of Revision u/s 263 - substantial question of law or fact - there were discrepancies in the figure with regard to value of current assets and current liabilities shown in the balance sheet as on 31.03.2008 vis-à-vis the cash flow statement filed before the AO - Whether question of law admitted by this Court may not be treated as the substantial question of law as the ITAT has already answered the query of the appellant and the issue of difference in balance sheet and cash flow are factual issues which have already been considered by the revisional authority under the ambit of Section 263?
HELD THAT:- CIT(A) has dismissed the appeal exparte. Appeal had been filed before the Tribunal and the Tribunal had exparte restored the issue back to the file of CIT(A). CIT(A) also dismissed the appeal for non-compliance. Tribunal in the interest of natural justice had restored the issue to the file of the CIT(A) so that the, assessee could be granted the opportunity to substantiate its case. This clearly shows that the assessee is not interested in showing the reconciliation but is attempting to use technical reasons to avoid the responsibility. This scathing remark from the ITAT showcases the triviality of the matter at hand.
Additionally, the submissions made with regard to the section 255 of the Act showcases the intention of the petitioner to delay the case. While scrutinizing the documents at hand, it is clear that due compliance has been made with respect to the reassessment proceedings and all the subsequent appeals. Additionally, the petitioner has been provided with the regular chances to submit his representation. However, the petitioner has been delaying the same.
The submission of the petitioner cannot be entertained. ITA is hereby dismissed.
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2023 (12) TMI 1363
Entitlement of interest in respect of refunds sanctioned - for what duration/period such interest is payable to the respondent importer?
Whether interest is payable or not? - HELD THAT:- The refund claims filed by the respondent importer on 08.01.2014 is not proper from the angle of completion of documents. Further, such refund claim is also pre-mature in nature, as the assessment finally providing the concessional CVD was extended to the impugned goods on the basis of earlier decision passed in order dated 15.01.2015, by finally assessing the 28 B/Es on 27.03.2018. Further, the angle of unjust enrichment in respect of such refund claims was also examined after the respondent importer submitted additional documents on 30.08.2016. Similarly, in the case of other 2 B/Es, the additional documents were submitted on 27.03.2018 and on 27.04.2018 for completing the submission of proper refund claim. Thus, from these factual evidence also it can be concluded that there is no case of delayed payment of refunds in this case.
In terms of the provisions of Section 27 ibid, read with Customs Refund Application (Form) Regulations, 1995 framed thereunder, the complete refund application was submitted by the Respondent importer only after all the requisite documents evidencing the payment of differential duty, relevant agreements and the sale invoices for the products were produced before the Customs authorities, to demonstrate that the burden of differential duty paid by the importer respondent was not passed on to any other person. Hence, on the factual matrix of the case, it cannot be considered that the refund application in the present case was submitted on 08.04.2014, as claimed by the importer respondent.
The assessment order passed under Section 17 ibid, relates to the import of dietary supplement during the period 01.04.2011 to 30.03.2012; whereas the import of dietary supplements for which refunds has been claimed and sanctioned relates to the subsequent period viz., 31.03.2012 to 18.02.2013. Hence, the above facts clearly prove that the assessment order dated 15.01.2015 finalizing the benefit of concessional rate of CVD cannot form the direct basis for claiming consequential refund sanctioned through orders dated 05.10.2016 and 30.05.2018.
The stand taken by the learned Advocate that there was no dispute in respect of the twin issues determined by original authority, and the dispute is limited to only the point of determining whether the imported dietary supplement is a food or not, cannot be accepted. It is also a fact that the importer respondent did not object to the order dated passed by the Commissioner of Customs (Appeals) by filing an appeal, on the above stand. Hence the same cannot be agitated at this stage. For the same reason, the finding given in the impugned order that the dispute in respect of extending concessional benefit of CVD was finalized by the Commissioner of Customs (Appeals) in his order dated 09.10.2014 is also factually incorrect. Hence, there are no merits in the grounds argued by the learned Advocate on this point.
The impugned order allowing payment of interest claimed on refunds already sanctioned to the importer respondent, is not legally sustainable and hence the same is set aside - appeals filed by the appellant department is allowed by setting aside the impugned order.
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2023 (12) TMI 1362
Validity of reassessment beyond period of limitation - notice issued under Section 148 mentioned only the period of 30 days instead of 90 days as per the provisions u/s 148 - HELD THAT:- As considering the provisions of Sections 148, 148A and 149, the notice u/s 148A(b) shall not be invalid and on that ground, the reassessment proceedings cannot be quashed and set aside.
In the case of Naveen Verma [2011 (2) TMI 248 - PUNJAB AND HARYANA HIGH COURT] in the facts of the case before it, upon issuance of notice u/s 158BD by the AO giving lesser period of 15 days for filing return, notice is duly served, the assessee can either avail of the statutory time for filing of the return irrespective of shorter period mentioned in the notice or can be given fresh opportunity if it is held that the assessee suffered prejudice on account of shorter period mentioned in the notice.
Therefore, not permissible to quash the impugned notice merely on the ground that the period specified u/s 148 when the notice was issued, more particularly, when such notice would relate back to the assessment period, the time period provided for filing return was admittedly for 30 days, admittedly, such period, as may be specified in such notice. Therefore, the period of 30 days mentioned in the notice u/s 148 cannot be said to be fatal to the assumption of the jurisdiction by the AO in the facts of the case. Therefore, this contention raised on behalf of the petitioner is rejected.
Assumption of jurisdiction by the AO while issuance of notice u/s 148A(b) - As notice dated 28th March 2023 along with the Annexures issued under Section 148A(b) of the Act cannot be said to be the notice requiring the assessee to provide an opportunity of hearing to show cause as to why the notice under Section 148 of the Act should not be issued on the basis of the information which suggests that the income chargeable is escaped assessment. The notice is only in the nature of inquiry as contemplated under Section 148A(a) of the Act, which provides that before issuance of any notice under Section 148 of the Act, the Assessing Officer shall conduct an inquiry, if required, with prior approval of the specified authority with respect to the information which states that the income chargeable is escaped assessment. Therefore, though the notice was issued under the provisions of Section 148A(b) of the Act, in fact, such notice is u/s 148A(a) of the Act as the ingredients of notice which requires as per the statutory provisions of Section 148A(b) are not mentioned. AO has not provided any details with regard to income which has escaped assessment, but has called for the details for the period from the Financial Year 2014-15 to 2015-16 without mentioning the income as escaped assessment for the relevant Assessment Year 2016-17.
AO for the first time, in the order passed under Section 148A(d) of the Act has mentioned about bifurcation of the total transaction of Rs. 791.22 Crores out of which credit entries amounting to Rs. 86,63,62,755/- was mentioned pertaining to the period from 1st April 2015 to 27th April 2015 in the Suspicious Transaction Report.
On perusal of the impugned order u/s 148A(d) AO did not consider any of the contentions raised on behalf of the assessee on merits and reiterated only extract from the Suspicious Transaction Report - assessee has been given the entire details of transaction in reply along with the annexures, however, the AO did not consider the same and only observed that the assessee did not adduce any supporting document establishing the identity of the parties, genuineness of transaction and creditworthiness of the counter parties justifying the bank account transactions carried out are related to the business parties of the assessee.
On perusal of the record, it appears that the petitioner – assessee has submitted all the details along with reply filed on 9th May 2023 in such circumstances, in view of the above facts, the impugned assessment order u/s 148A(d) of the Act is not sustainable as the AO has failed to set out any opinion on the basis of the available information and material on record to arrive at the finding that it is a fit case to reopen the assessment under Clause (b) of Section 148A - In the case on hand, we are not required to examine the correctness of the contentions qua the facts of the case as raised on behalf of the petitioner as it would be premature as the case of the petitioner is based upon the legal contentions that the notice u/s 148A(b) is in the nature of notice u/s 148A(a) and that the notice issued u/s 148A(b) is without considering the contentions raised by the assessee in the reply to the notice under Section 148A(b) as per Clause (c) of Section 148A - On perusal of the notice under Section 148A(b) of the Act, it is clearly seen that the annexures do not contain any information, it is a questionnaire requiring the petitioner to provide details as sought for and therefore, it was an intention of the Assessing Officer who was to conduct an inquiry after receiving information from the assessee and therefore, notice is deemed to be the notice under Section 148A(a) of the Act. Thus, there is a gross procedural error from the very inception of the procedure rendering the same is bad in law.
[39] For the reasons recorded as above, as the notice dated 28th March 2023, though stated to be issued under Clause (b) of Section 148A of the Act, the same is, in fact, a notice under Clause (a) of Section 148A of the Act can be treated as such. As the time to issue notice under Section 148A(b) of the Act has already expired, no purpose would be served by issuing direction to the AO to conduct an inquiry considering the reply of the assessee as to whether to issue notice under Section 148A(b) of the Act or not.
The impugned order passed u/s 148A(d) as well as the notice issued under Section 148 of the Act are hereby quashed and set aside.
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2023 (12) TMI 1361
Violation of Human Rights - allegations of sexual harassment - Direction to Petitioner to supply information to the Respondents holding that the information sought by the Respondents does not fall under the exemption provided in the proviso to Section 24 of the Right to Information Act, 2005 - HELD THAT:- Considering the fact that the information requested is only about recruitment rules, thus bearing in mind the various judicial precedents, including the decision of this Court in titled Bimal Kumar Bhattacharya [2018 (3) TMI 1251 - DELHI HIGH COURT] as also the recent order of the Hon'ble Supreme Court in this Court is of the view that this is not a case which would involve any human rights violation and is accordingly not exempted by the proviso to Section 24 of the RTI Act, 2005.
The ED is exempted under section 24 of the RTI Act, 2005 from disclosing the said information. Accordingly, the impugned order dated 27th November, 2019 passed by the CIC is set aside.
In this case, the non-disclosure of information of allegations of sexual harassment, in the opinion of this Court, would fall clearly within the conspectus of human rights violations, as exempted by the proviso to Section 24 of the RTI Act, 2005. In view thereof, the ED is directed to disclose the information sought by the RTI Applicant/Respondent within eight weeks.
Petition disposed off.
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2023 (12) TMI 1360
Dishonour of Cheque - challenge to judgement of conviction and sentence - non-compliance with the conditions to deposit 20% of the compensation amount - Application for suspension of sentence and stay of proceedings based on insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The fundamental facts in this petition is that the application by the petitioners herein are debtors application under section 94 of the Code. It was filed, after they were found guilty for offence under section 138//141 of NI Act. The Hon'ble Supreme Court in Mohanraj case [2021 (3) TMI 94 - SUPREME COURT] had unequivocally held that the proceedings under section 138/141 of NI Act will fall under the scope of moratorium referred in IBC subject to the exceptions mentioned in the Code.
The judgement of Mohanraj case [2021 (3) TMI 94 - SUPREME COURT] is in respect of corporate debtor, which filed application under section 9 of the IBC. In the said judgment, the Hon'ble Supreme Court has held that the proceedings initiated under section 138 of NI Act falls within the scope of Section 14(1)(a) of the Code. In that judgment, at paragraph 102, the Hon'ble Supreme Court has made it clear that interim moratorium in a corporate debtor's application will not extend to the natural persons, who are prosecuted under section 138/141 of NI Act. Section 14 of IBC will apply only to the corporate debtor, the natural persons mentioned in Section 141 of NI Act continue to be statutorily liable.
The Directors as Signatory or Guarantor or Person responsible for the affairs of the company, which has issued cheque to discharge its liability, can not have the advantage of their application to declare them as insolvent as an individual to seek moratorium. If such plea is entertained, then as observed by the Hon'ble Supreme Court, it will lead to absurdity. To demonstrate, for instance, in this case, if the interim moratorium under section 96 is extended to these petitioners, who are the representatives of the company, which is not a corporate debtor facing resolution process under the Code, then the first accused company will stand without a natural person to represent. Being a proceedings with penal action, there can be no substitution for the petitioners as the Directors of the first accused company.
As the Hon'ble Supreme Court held that the moratorium given to the corporate debtor under Chapter II will not cover the individuals, who are the Guarantors of Directors. Similarly, the moratorium given to an individual under Chapter III will not cover the proceedings initiated against them as Directors or Guarantors of any company, which is not a corporate debtor under this Code.
This Criminal Original Petition is dismissed.
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2023 (12) TMI 1359
Seeking grant of interim bail - Money Laundering - bail sought on medical grounds - grievance of the applicant is that the applicant is not being provided proper and appropriate treatment in terms of post-epidural care in the prison premises, and thus, the applicant seeks that he be released on interim bail, in order to get appropriate treatment from Indian Spinal Injuries Centre, Vasant Kunj, Delhi - HELD THAT:- This Court notes that the medical facilities available at the jail dispensary is not able to provide the medical treatment which is required by the applicant, as advised by the doctors concerned in terms of post-epidural care after his spinal surgery. Thus, considering that at this stage, no immediate arrangement can be made by the jail dispensary for ensuring appropriate medical care of the applicant, this Court deems it fit, for the purpose of ensuring that a balance is struck between the right of the prisoners to appropriate medical care and the right of the State to ensure rule of law, to allow the request of applicant to get the required physiotherapy treatment at the Safdarjung Hospital, Delhi. In case, the required medical care is not available at Safdarjung Hospital, Delhi, the applicant may move a fresh application before this Court for being treated at Indian Spinal Injuries Centre, Vasant Kunj, Delhi.
The applicant be admitted to Safdarjung Hospital, Delhi, which is also a referral hospital as per Jail Referral Policy, Delhi for a period of two weeks, within two days of receipt of this order. However, the applicant shall continue to be in the custody of Superintendent of Jail concerned, and the Jail Superintendent concerned shall ensure that appropriate and adequate security is provided/deputed in the hospital since the accused will continue to remain in judicial custody though under treatment in the hospital.
Application disposed off.
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2023 (12) TMI 1358
Dishonour of Cheque - Challenge to the decree for money granted in the suit which was predicated on a dishonoured cheque - defendant resisted the suit contending that he never borrowed any money from the plaintiff - presumption u/s 118 of NI Act - HELD THAT:- No doubt, a strong presumption arises by the force of Section 118, ibid. in a case where the suit is filed based on a negotiable instrument. But, such a presumption is rebuttable. While considering the question as to how such a presumption can be rebutted, the Supreme Court in, BHARAT BARREL & DRUM MANUFACTURING COMPANY VERSUS AMIN CHAND PAYRELAL [1999 (2) TMI 627 - SUPREME COURT] has observed 'Once the defendant showed either by direct evidence or circumstantial evidence or by use of the other presumptions of law or fact that the promissory note was not supported by consideration in the manner stated therein, the evidentiary burden would shift to the plaintiff and the legal burden reviving his legal burden to prove that the promissory note was supported by consideration and at that stage, the presumption of law covered by Section 118 of the Act would disappear.'
The plaintiff has admitted that he has not produced any document to show the lending; he has not produced any document to show that he was in possession of a sum of Rs. 23 lakhs on 04.11.2012, the date of alleged lending; he has not produced any document to show that he was carrying on some business fetching him income on the relevant date; he has admitted that he had no bank account; he has also admitted that he is not an Income Tax assessee. His claim that his mother lent him a sum of Rs. 15 lakhs, has been proved to be false by his own document, viz., Ex.A.12, sale deed, which shows that his mother had sold the property six years ago for a paltry sum of Rs. 4 lakhs.
A reading of the cross-examination of P.W.1 would show that not even a single utterance of him in his proof affidavit and the plaint is true. Undoubtedly, the conduct of the defendant in not lodging a police complaint and not sending a reply to the legal notice militates against him. But, the presumption that is drawn from the silence on the part of the defendant cannot undo the damage done by the plaintiff in his own cross-examination as P.W.1. The evidence in cross-examination of P.W.1 leads us to firmly believe that the presumption under Section 118, ibid., stood rebutted by the force of such evidence of P.W.1 himself.
It is not required to agree with the Trial Court in granting a decree for payment of money - the judgment and decree of the Trial Court are set aside - appeal allowed.
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2023 (12) TMI 1357
Seeking grant of regular bail - application under Section 439 of the Code of Criminal Procedure, 1973 (CrPC) read with Section 36A(3) of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) - right to be searched in the presence of a Gazetted Officer or a Magistrate - non-compliance of Section 50 of the NDPS Act.
HELD THAT:- The contention of learned APP for the State that the question of being search in the presence of the ‘nearest’ Gazetted Officer or Magistrate would arise only if the accused had exercised his option in terms of Section 50 of the NDPS Act, is not tenable.
The right of the accused, as contained in Section 50 of the NDPS Act is mandatory in nature and the same has been emphasized time and again in the various judicial precedents. The co-ordinate bench of this Court, in MOHD. JABIR VERSUS STATE OF NCT OF DELHI [2023 (3) TMI 1529 - DELHI HIGH COURT], has taken note that the word ‘nearest’ has been used in the statute with a certain intention.
The relevance of a notice under Section 50 of the NDPS Act and its mandatory compliance was clearly spelt out by the Hon’ble Supreme Court in State of Punjab v. Balbir Singh [1994 (3) TMI 173 - SUPREME COURT], wherein it was held that 'When such is the importance of a right given to an accused person in custody in general, the right by way of safeguard conferred under Section 50 in the context is all the more important and valuable. Therefore it is to be taken as an imperative requirement on the part of the officer intending to search to inform the person to be searched of his right that if he so chooses, he will be searched in the presence of a Gazetted Officer or a Magistrate. Thus the provisions of Section 50 are mandatory.'.
A perusal of the notice reflects that the word ‘nearest’ does not find any mention as stated hereinabove. The said word is in the language of the section itself. The raiding officer in the present case ought to have given the said option to the applicant. This Court is in agreement that the judgment of co-ordinate bench in Mohd. Jabir to the effect that the word ‘nearest’ has been used in the statute with a certain intention and cannot be ignored by the concerned Investigating Officer at the time of giving notice under Section 50 of the NDPS Act.
As per nominal roll dated 10.05.2023, the applicant has been in judicial custody for 01 year 05 months and 28 days. The investigation in the present case is complete, the chargesheet stands filed and the trial is underway. No useful purpose will be served by keeping the applicant in judicial custody any further.
The applicant is admitted to bail upon his furnishing a personal bond in the sum of Rs. 50,000/- alongwith two sureties of like amount to the satisfaction of the learned Trial Court/Link Court, further subject to fulfilment of conditions imposed - the present application is allowed.
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2023 (12) TMI 1356
Conditional stay order - petitioner has been directed to pay of 20% of the total tax demand raised - Not only the conditional stay on payment of 20% has been granted but the petitioner has also been given facility of payment of 20% in seven equal installments.
HELD THAT:- Petitioner has submitted that the assessment orders after survey under Section 133A of the Income Tax Act had been finalized merely on the basis of the statements of the Director and Managing Director who had retracted later on. This submission does not appear to be correct.
The assessment order would disclose that not only the statements of the Director and Managing Director were taken into consideration but the other incriminating material including the excel sheets and digital datas maintained in the computers and laptops had also been examined before adding the undisclosed income to the returned income of the petitioner. Therefore, no much substance in the present writ petition that the merit of the assessment orders have not been considered while passing the impugned Ext.P5 order granting conditional stay.
The present writ petition is dismissed. The petitioner was granted time to pay the first instalment on or before 25.09.2023, the said time is extended to 30.12.2023 and the last and final installment has to be paid on or before 30.06.2024. Needless to say that the observation made herein will not prejudice the appellate authority to consider the case of the petitioner on merit.
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2023 (12) TMI 1355
Money Laundering - proceeds of crime - provisional attachment order - mis-joinder of parties in the proceedings before the Adjudicating Authority - non-compliance of section 8(1) of PMLA 2002 - Jurisdiction and power of the Adjudicating Authority.
Mis-joinder of parties - HELD THAT:- The proceeds of crime was under the possession and control of the Official Liquidator, but he was not given an opportunity of hearing despite the mandate under section 5(1) of the Act. There are no mandate under section 5(1) that before attachment of the property, the Official Liquidator was required to be heard by the Adjudicating Authority. The provision for hearing is given under section 8(1) of the Act. Section 5(1) provides for attachment against "any person" in possession of proceeds. At the relevant time defendant was in possession of the proceeds. The Competent Authority passed the order of attachment was not having information that an Official Liquidator has been appointed. The information was given only to the Adjudicating Authority - the argument in reference to section 5(1) of the Act of 2002 alleging mis-joinder of parties is not made out. The facts available on records shows a serious allegation against the accused for inviting investments on higher rate of interest and then investors were denied interest and refund of amount. Thus, the accused had cheated the investors.
The apprehensions of the respondent was that proceeds of crime or the property of equivalent value of the proceeds of crime may be transferred or alienated, thus the attachment of the property was made. In view of the aforesaid, ground of misjoinder in reference of section 5(1) is not made out.
Non compliance of section 8(1) of the Act of 2002 - HELD THAT:- As per section 8(1), the Adjudicating Authority remain under obligation to have reasons to believe that any person has committed an offence under section 3 of the Act of 2002 or is in possession of proceeds of crime then to serve a notice of not less than thirty days calling up the person to indicate the source of income, earning or assets out of which he has acquired the property attached under section 5(1) of the Act - The Adjudicating Authority found and recorded reasons to believe that defendant have committed offence under section 3 of the Act of 2002 and accordingly all those persons were given an opportunity of hearing. It is not that Official Liquidator has made an application to provide an opportunity of hearing and has been denied. Rather, it is found that M/s Birla Surya Limited remain unrepresented and it is they who were relevant party to inform about the appointment of Official Liquidator - section 8(1) mandate a notice to a person committed an offence under section 3 of the Act and defendants were alleged to have committed offence and for possession of proceed, it could have been either M/s Birla Surya Limited or the Official Liquidator and not the appellant. It is not that the hearing under section 8(1) is to be given only to a person in possession of proceeds of crime, but also to a person committed the offence under section 3 of the Act and accordingly all the defendants before the Adjudicating Authority, having an allegation for commission of offence under section 3 of the Act of 2002 were necessary party and provided an opportunity of hearing.
The Official Liquidator never came forward to seek an opportunity of hearing and otherwise the appellant said to be not in possession of proceeds of crime cannot make an issue when they alleged to have committed an offence under section 3 of the Act of 2002 and were provided opportunity of hearing. - there are no violation of section 8(1) of the Act of 2002.
Power and jurisdiction of Adjudicating Authority under Sections 8(2) and 8(3) of the Act - HELD THAT:- It is not correct to state that the final conclusions about commission of offence has been drawn by the Adjudicating Authority. The Adjudicating Authority is under obligation to record a finding that properties are involved in money laundering. To find out that a case of money laundering is made out, essentially a prima facie opinion has to be drawn about commission of offence. Otherwise, the question may be raised for formation of opinion of money laundering without an offence - no illegality has been committed by the Adjudicating Authority to record a prima facie opinion about the commission of offence which may generate the proceeds of crime and if laundered, then an offence under section 3 of the Act of 2002. It is however made clear that the prima facie opinion of Adjudicating Authority is not conclusive, rather it would be recorded by the Special Court in criminal case and accordingly the issue is clarified to the extent - there are no reasons to cause interference in the impugned order.
The appeals are disposed of.
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2023 (12) TMI 1354
Money Laundering - obtaining huge loans from financial institutions with outstanding liabilities - siphoning off of funds - reasons to believe - search and seizure conducted under Section 17 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- The reason for search and seizure is to be based on the information that person has committed an act of money laundering or is in possession of proceeds of crime involved therein and so on. The authorized officers then enter and search any building, place and vessel etc. and seize the records and the property etc. The authorized officer may even examine a person on oath which is found to in control of any record or property relevant to the case. The retention of the property would not be beyond a period of 180 days from the date of seizure and freezing. Its continuance would be subject to confirmation of retention by the Adjudicating Authority within the period given above and unless the Adjudicating Authority permits retention of property and documents etc. beyond the period of 180 days, it would be returned to the person concern.
The show cause notice otherwise discloses all the relevant materials to seek retention of the seized material. In the instant case, ECIR was recorded in the year 2019 itself and the search was conducted in the year 2023. The relevant documents are now part of the show cause notice. In the background aforesaid, we do not find that any prejudice is caused to the Appellant on non-service of the copy of the reasons to belief recorded in writing for search and seizure under Section 17(1) of the Act of 2002.
In case of J. Sekar v/s. Union of India & Ors. [2018 (1) TMI 535 - DELHI HIGH COURT], the Division Bench of Delhi High Court has not addressed the issue in reference to Section 17(1) of the Act of 2002 but was in reference in Section 5(1) of the Act of 2002. The provisions may be similar but purpose of the proceedings under two provisions are altogether different. One pertains to the attachment of the property till conclusion of the trial, if the attachment order is confirmed by the Adjudicating Authority. The retention of the documents or property would remain for the period given by the Adjudicating Authority and infact if the investigation is completed followed by the prosecution complaint, justification of retention of documents subsequent to it may require to be addressed by the Adjudicating Authority on merits. It is looking to the facts that if the materials seized became part of the prosecution complaint with a copy thereupon to the Appellant then an appropriate order can be passed by the Adjudicating Authority.
It is not found that copy of reason to believe under Section 20 and 21 of the Act of 2002 was prayed before the Adjudicating Authority thus prayer for it cannot be made for the first time in the Appeal.
There are no reason to cause interference in the impugned order - appeal dismissed.
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2023 (12) TMI 1353
Rejection of revision application on the ground of non-compliance of the order of pre-deposit - whether the Tribunal was justified in directing the petitioner to predeposit the outstanding tax amount in the revisional proceedings filed under Section 75 of the Gujarat Value Added Tax Act, 2003? - HELD THAT:- On conjoint reading of the provisions of the GVAT Act, it is clear that the provisions of Section 75 of the GVAT Act would be applicable in case of an application made to the Tribunal against an order of the Commissioner, not being an order passed under sub-section (2) of Section 73 of the GVAT Act in second appeal under Clause (a) of sub-section (1) of Section 75 of the GVAT Act. Therefore, it is clear that any application made to the Tribunal under Section 75(1)(b) of the GVAT Act would be an application challenging the order against which no appeal is filed under Section 73 of the GVAT Act, which is not an appealable under Section 74 of the GVAT Act as well as no application before the Tribunal could be filed against any order passed by the Commissioner under Section 75(1)(a) of the GVAT Act.
On bare perusal of Section 75 of the GVAT Act, it does not provide for passing any order of pre-deposit as it is provided under Section 73(4) of the GVAT Act. Therefore, the impugned order of the Tribunal dated 21st March 2023 is beyond the scope of Section 75 of the GVAT Act insisting for pre-deposit to entertain the revision applications filed by the petitioner.
The impugned order dated 21st March 2023 passed by the Tribunal, being contrary to the provisions under Section 75 of the GVAT Act, is hereby quashed and set aside - Petition allowed.
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2023 (12) TMI 1352
Service of notice - HELD THAT:- Court notice be issued to the standing/nominated counsel for the State, who will obtain instructions and enter appearance - In case deposit in terms of interim order dated 16.01.2023 is not made, the respondents/authorities will proceed to enforce and execute the impugned judgment.
The Haryana State Pollution Control Board and the concerned authorities for the State of Haryana will carry out site inspection and ensure that no mining activities are being carried. Photographs of the site can be taken and filed. If required, satellite images will also be filed.
Re-list in the month of February 2024.
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2023 (12) TMI 1351
Belated remittance of employees contribution to PF/ESI - Case of the assessee is that belated remittance of employees contribution to PF/ESI would also not to be taxable having regard to sec. 43B provided the same has been paid before the due date of filing of return u/s 139 and aforesaid disallowance is not called for and assessee, prayed for remitting the matter to the file of ld.AO for fresh adjudication
HELD THAT:- We do not find any serious objection to this effect from the ld.DR as against the contention made by the assesee before the authorities below and before us too.
Thus, we find merit in the submission and case made out by the assesee. In that view of the matter, we under the present facts and circumstances of the case find it fit and proper to remit the issue to the file of the ld.AO to consider the details as provided by the assessee as summarized hereinabove and to pass speaking order in favour of the assesee after giving an opportunity of being heard to the assessee and to adduce evidence at the time of hearing the appeal before the ld.AO. Appeal of the assessee is allowed for statistical purposes.
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2023 (12) TMI 1350
Rejection of registration application u/s. 12AB - form filed by the assessee i.e form 10AB rather than form No. 10A - HELD THAT:- We noted that the ld. CIT( E) simpliciter rejected the assessee’s application for registration only on the issue that assessee has not furnished form No. 10AC/10AD and the present application u/s. 10AB of the Act was filed u/s. 12A(1) (ac)(iv) of the Act seeking registration is not maintainable and hence rejected.
We are of the view that assessee has not filed application in form 10A and filed form no. 10AB of the Act which is merely a technical breach which can be cured by allowing the assessee to file application in form 10A of the Act alongwith other details. Hence, we set aside the appeal and the matter is remitted back to the file of the ld. CIT (E) who will allow assessee to file application in form No. 10A along with other required details and the ld. CIT (E) will examine entire aspect relating to registration u/s. 12AB of the Act as well as u/s. 80G of the Act and then will decide the appeal accordingly - Appeal of the assessee allowed for statistical purpose.
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