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2021 (4) TMI 1256
Registry is directed to prepare notice on various statutory authorities - The Petitioner is also directed to file reply affidavit to the observations of aforesaid statutory authorities, if any, well before the next date of hearing with a copy served on the respective authority. Post the case on 24.05.2021.
Admit & Issue notice.
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2021 (4) TMI 1255
Attachment of the property envisaged under Section 132(9B) - HELD THAT:- As the provisional attachment of the property envisaged under Section 132(9B) is of property 'belonging to the assessee', meaning the person/assessee searched. In the light of the confirmation by the Standing Counsel to the effect that the aforesaid two individuals have not been subjected to search and seizure under Section 132, there is no justification for the provisional attachment of their assets. Thus the attachments of the fixed deposits in the name of the two individuals as aforesaid, as per the details furnished in warrant for attachment of properties dated 22.03.2021, will stand lifted forthwith.
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2021 (4) TMI 1254
Fresh public announcement by Liquidator - HELD THAT:- Liquidator fairly submitted that Liquidator is ready to go for fresh public announcement instead of contesting the matter.
The matter is adjourned - List the matter on 16.06.2021.
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2021 (4) TMI 1253
Disallowance u/s 80IB - Commissioner of Income Tax (Appeals) confirming the action of assessing officer in holding that income from housing project in the name of “Hampton Park” belongs to AOP and not in the individual capacity as co-owner - HELD THAT:- We have further noted that the assessee filed appeal against the order of ld.CIT(A) for A.Y. 2011-12 and assessee was allowed deduction under section 80IB of the Act.- Further, while following the order of the Tribunal for A.Y. 2011-12, the assessee was further allowed similar relief in A.Y. 2012-13 [2020 (9) TMI 1198 - ITAT SURAT] For completeness of the order, the relevant part of order passed by the Tribunal for A.Y. 2012-13 [2020 (9) TMI 1198 - ITAT SURAT]].
Considering the decision of the Tribunal on identical set of facts for AY 2011-12,which was further followed in AY 2012-13, wherein no variation in facts is brought to our notice nor any contrary law shown to us, therefore following the decisions of Co-ordinate Bench decision, the appeal of the assessee is allowed with similar observation. - Appeal of assessee allowed.
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2021 (4) TMI 1252
Assessment u/s 153A - bogus LTCG - Addition u/s 68 - Reliance on statement u/s 132(4) - HELD THAT:- As no admission as alleged by lower authorities was made and secondly, the said statement stood retracted immediately on 14/04/2015. Therefore, since the statement stood rejected immediately after making thereof, the same would lose substantial evidentiary value. In such a case, the onus would be on revenue to establish that the earlier admission made was backed up by some cogent / corroborative material on record and the retraction was not valid one. However, we find that there is no such material with the revenue which would corroborate assessee’s statement that the gains were bogus in nature. Any statement on oath, to be valid, has to be supported by corroborative evidences. Thus, the statement made by the assessee, in our considered opinion, could not be considered as incriminating material which would justify additions in the hands of the assessee
Except for statement u/s 132(4), there was no incriminating material. The statement was retracted by the assessee. Therefore, the bench held that addition on the basis of retracted statement, without there being corroborative material would not be sustainable as held in various decisions. Similar are the facts before us. Therefore, applying the ratio of aforesaid decisions, since the additions are not with reference to any incriminating material, the same would not be sustainable in the eyes of law.
The impugned additions are not sustainable in the eyes of law. The assessee had discharged the primary onus of establishing the genuineness of the transactions whereas the onus as casted upon revenue to corroborate the impugned additions by controverting the documentary evidences furnished by the assessee and by bringing on record, any cogent material to sustain those additions, could not be discharged by the revenue. The whole basis of making additions is third-party statement and no opportunity of cross-examination has been provided to the assessee to confront these parties. As against this, the assessee’s position that that the transactions were genuine and duly supported by various documentary evidences, could not be disturbed by the revenue. Hence, going by the factual matrix and respectfully following the binding judicial precedents as enumerated in the order, the additions made by Ld. AO and confirmed by Ld. CIT(A), are not sustainable in the eyes of law. Therefore, we are inclined to delete the same. - Decided in favour of assessee.
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2021 (4) TMI 1251
Classification of goods - tunnel boring machine and its components - eligibility of the said goods for exemption from customs duty - advance ruling application - Secretary to the CAAR, Mumbai pointed out to the applicant that their original application has lapsed and that, if they are still desirous of obtaining an advance ruling, they need to apply afresh - HELD THAT:- The request for advance ruling was filed in the secretariat of the erstwhile AAR, New Delhi on 14.10.2019. No pronouncements were made on the said application within three months as required under the provisions of sub-section 6 to section 28-I of the Act for the reason for non-constitution of the requisite bench. I find it difficult to agree with the assertion of the applicant that the limitation prescribed under law is a mere procedural requirement.
It is a settled proposition of law that any interpretation of law which leads to a manifest absurdity has to be eschewed. Besides, being a creature of statute, I am squarely bound by the four corners of the statute, and therefore, considering the express mandate of the statute, I find no reason to depart from it. The application was transferred to the secretariat of the CAAR, Mumbai in February, 2021.
It is settled law that assessment is a quasi-judicial proceeding requiring application of mind and speaking decisions. I am, therefore, not convinced with the argument that no independent proceeding is pending before any officer of customs, as argued by the applicant.
The application for Advance Ruling rejected.
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2021 (4) TMI 1250
Application for preponing the date of hearing - HELD THAT:- Once it can not be denied that the judgment of the Supreme Court in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [2021 (3) TMI 384 - SUPREME COURT], is applicable to the facts of the present case, no useful purpose would be served by adjourning the matter.
Petition disposed off.
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2021 (4) TMI 1249
Nature of expenditure - Disallowance of community welfare expenses - assessee incurred this expenditure on upkeep of road as per the direction of Deputy Commissioner, Bellary - AO treated the expenditure as capital expenditure - assessee contended that expenditure is revenue in nature allowable u/s. 37(1) - HELD THAT:- In the present case, the assessee being an individual, the restriction imposed under Explanation (2) to section 37 is not applicable to assessee’s case. See M/S GUJARAT NARMADA VALLEY FERTILIZER AND CHEMICALS LTD [2019 (8) TMI 1288 - GUJARAT HIGH COURT]
Disallowance is restricted to the expenses incurred by the assessee under a statutory obligation u/s. 135 of the Companies Act, 2013 and there is thus now a line of demarcation between the expenses incurred by the assessee on discharging corporate social responsibility under such a statutory obligation and under a voluntary assumption of responsibility. As for the former, the disallowance under Explanation 2 to section 37(1) comes into play, but as for latter, there is no such disabling provision as long as the expenses, even in discharge of corporate social responsibility on voluntary basis, can be said to be “wholly and exclusively for the purposes of business”. There is no dispute that the expenses in question are not incurred under the aforesaid statutory obligation. In the present case, the said expenditure is incurred by the assessee on discharging social responsibility so as to earn the goodwill of the society and it is wholly and exclusively for the purpose of business.
The provisions of Explanation to section 37 of the Act cannot be applied. Further, in the present case, the assessee being an individual, and not a corporation under the Companies Act, 2013, Explanation 2 to section 37 cannot be applied so as to deny the voluntary expenditure incurred by assessee towards community welfare. Accordingly, we are of the opinion that the expenditure incurred is wholly and exclusively for the purpose of business of assessee and has to be allowed as business expenditure. Accordingly, this ground of appeal is allowed.
Loss from derivatives – F&O - assessable under the head ‘capital gains’ OR 'business loss' thereby not allowing set off of the same - whether trading in F & 0 derivative is taxable under section 28(i) and not a speculative transaction under section 43(5) - HELD THAT:- When the AO had accepted the income from trading in F&O derivatives as business income in earlier year, specifically in the immediate preceding AY 2015-16, the revenue cannot be allowed to change its view with regard to fundamental aspect of a transaction taken in earlier year, unless it is able to demonstrate change in circumstances in the subsequent assessment year.
In the case of CIT v. Escorts Ltd.[2011 (2) TMI 579 - DELHI HIGH COURT] it was held that the principle of res judicata did not apply to income tax proceedings, the revenue cannot be allowed to change its view with regard to fundamental aspect of a transaction taken in earlier assessment year, unless it is able to demonstrate any change in the circumstances in the subsequent assessment year. It was held that as a fundamental aspect permeating through different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year.
On these reasonings, in the absence of any material change justifying the revenue to take a different view of the matter and if there is no change, it was in support of assessee that the AO is precluded to reopen that issue and take a contrary view of what he has taken in earlier assessment proceedings and taking such a contrary decision should be have been avoided
Whether the assessee is prevented to make such a claim without filing revised return? - Regarding the additional claim made during the assessment proceedings other than the claim made in the return of income u/s. 139, in our opinion, the assessee cannot make additional claim before the AO without revised return - as held by the Hon’ble Supreme Court in the case of Goetze (India) Ltd. [2006 (3) TMI 75 - SUPREME COURT] the appellate authorities are not precluded in entertaining such claim without any revised return. Being so, we do not find any infirmity in making such claim by the assessee before the CIT(Appeals) with regard to treatment of loss from F&O transaction as business loss. Therefore, this ground of appeal is allowed.
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2021 (4) TMI 1248
Seeking immediate release of detenues - subjective satisfaction of legal detention by detaining authority - whether there was any delay in either issuing the order of detention or executing it? - HELD THAT:- In the facts of the present case, it is not disputed that for the entire period from the date of the detention order, until and up to the date of execution of the detention order, the detenue was abroad. It is clear from the affidavits filed by the respondents that efforts were taken to execute the order of detention and that steps as contemplated under Section 7(1)(b) of the COFEPOSA Act were initiated. Under such circumstances, we fail to see how there was any unexplained delay in the execution of the detention order in the instant case - Further, it is trite that an absconding detenue cannot cite a delay in the execution of the order to contend that the detention order must be quashed on that ground.
Whether there was any delay in serving the grounds of detention, in the facts and circumstances of this case? - HELD THAT:- The detaining authority has, in paragraph 26 referred to the bail orders dated 16-2-2016 and 1-6-2016 for the purpose of establishing that the detenue had not stopped prejudicial activities even after the first incident at Bangalore and had continued with such activities. It is also noted that the bail conditions are likely to be relaxed and that they were not sufficient to prevent the detenu from committing prejudicial activities. Apart from contending that certain pages of the 'bail order' are not available in the documents served together with the grounds of detention, there is no pleading or contention regarding the issue. Even assuming that the case put forth by the detenue is correct, we are unable to find that the non-supply of the 4 pages of the bail order has in any manner affected the right of the detenue to make an effective representation. The detenue also did not make a request for the supply of any document. He also did not raise this issue before the advisory board. For these reasons we reject the contention of the detenue that he was not served with clear copies of all the relied upon documents amongst the documents supplied to him - the communication of grounds, in the facts of the present case, satisfies the requirements of Article 22(5) of the Constitution of India.
Whether Ext. P.12 & P.13 representations made by the petitioner, after the matter was considered by the Advisory Board, were expeditiously considered by the authorities concerned? - HELD THAT:- Both the representations have been disposed of with reasonable expedition and that the detention order is not vitiated in any manner on account of the alleged delay in disposal of the Ext. P.12 & P.13 representations.
Period of detention of the detenue - HELD THAT:- The detenue was detained on 12-07-2020 and Ext. P1 order of detention was served on him on 13-07-2020. In Ext. P11 order, the detention is seen confirmed for a period of one year from 22-07-2020. It is stated that this was on account of the fact that on account of the COVID-19 pandemic the detenue was undergoing quarantine for the period from 12/13-07-2020 to 22-07-2020 and therefore that the period of detention should be counted from 22-07-2020 - the detenue having been detained in terms of Ext. P1 order of detention, on 12-07-2020, the period of one year has to be counted with effect from 12-07-2020 and not from 22-07-2020 as stated in Ext. P11 order.
W.P.(Crl.) Nos. 279 & 280 of 2020
Smuggling - Gold - non-supply of certain relied upon documents - HELD THAT:- The law regarding supply of documents requires no re-iteration at our hands. Our summation of the law at the inception of this judgment shows that it is well settled that the detenue has the right to receive all the relied upon documents and also such other documents that may be necessary to enable him to make a proper and effective representation against the order of detention. That said, the question as to whether there was, in fact, a failure to supply any relied upon document is a matter to be determined on a case-to-case basis - Keeping in mind the fact that the law requires only the subjective satisfaction of the detaining authority, and keeping in mind the fact that the jurisdiction to detain under a law providing for preventive detention is 'a jurisdiction of suspicion' we have examined Ext. P4 in WP (Crl.) 279/2020 and Exhibit P3 in WP (Crl.) 280/2020 to determine whether the non-supply of documents requested for therein has prevented the detenues from making a proper representation, which is a right guaranteed under Art. 22(5) of the Constitution.
Substantial delay in the execution of the detention order - HELD THAT:- There is absolutely no delay in the disposal of the various representations detailed.
Petition disposed off.
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2021 (4) TMI 1247
Fraudulent availment of VAT refund - Validity of Provisional Attachment Order - Money Laundering - proceeds of crime - Adjudicating Authority confirmed the attachment for a period of 90 days during the pendency of investigation or pendency of the proceeding before a court under PMLA - HELD THAT:- There are no reason to exercise our jurisdiction under Article 136(1) of the Constitution of India.
The SLP is dismissed.
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2021 (4) TMI 1246
Classification of goods - HDPE Bags or HDPE Woven Sacks - Was the commodity sold by the Petitioner for the period in question, HDPE Bags or HDPE Woven Sacks and correspondingly is the said product exigible to tax @ 4% or 8% respectively?
HELD THAT:- The Revision petition will be heard on the paper books and the records already requisitioned.
List for final hearing on 20th July, 2021.
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2021 (4) TMI 1245
Reopening of assessment quashed - case made out by the Revenue that Tribunal was of the observation that reopening was made on the dictates of the superior authority and without any application of mind by the concerned AO, whereas the same was done on the basis of the information made by the CIT(A), Ahmedabad-V, in regard to the revisionary order under Section 263 in the case of Shri Prabhat Karshanbhai Desai for A.Y. 2009-10 one of the assessee herein - HELD THAT:- It appears that the proceeding under Section 263 of the Act in respect of Shri Prabhat Karshanbhai Desai for A.Y. 2009-10 has been mentioned by the Tribunal in the order dated 27.06.2019.
No observation on merit upon scanning of 263 proceeding is reflecting from the said order particularly the fact as has been placed on record by way of specific statement made by the Revenue in the instant Miscellaneous Application at Page 2 para (i) onwards. Such narration of facts need to be considered in its proper perspective which was not reflecting in the said order passed by the Ld. Tribunal. Thus, we find merit in the application filed by Revenue. In the light of the above observation, the order is, therefore, recalled. Registry is directed to put the matter on board for hearing in due course.
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2021 (4) TMI 1244
When to grant interim order - correct stage of granting the Interim Order - when and where the High Court would be justified in passing an interim order either staying the further investigation in the FIR/complaint or interim order in the nature of "no coercive steps" and/or not to arrest the Accused either pending investigation by the police/investigating agency or during the pendency of the quashing petition Under Section 482 Code of Criminal Procedure and/or Under Article 226 of the Constitution of India pending before the High Court?
HELD THAT:- While dealing with the inherent powers of the High Court Under Section 561-A of the earlier Code (which is pari materia with Section 482 of the Code), it is observed and held that the inherent powers of the High Court Under Section 561 of the earlier Code cannot be exercised in regard to the matters specifically covered by the other provisions of the Code; the inherent jurisdiction of the High Court can be exercised to quash proceedings in a proper case either to prevent the abuse of the process of any court or otherwise to secure the ends of justice; ordinarily criminal proceedings instituted against an Accused person must be tried under the provisions of the Code, and the High Court would be reluctant to interfere with the said proceedings at an interlocutory stage.
In the case of KURUKSHETRA UNIVERSITY AND ORS. VERSUS STATE OF HARYANA AND ORS. [1977 (3) TMI 172 - SUPREME COURT OF INDIA], this Court observed and held that inherent powers Under Section 482 Code of Criminal Procedure do not confer an arbitrary jurisdiction on the High Court to act according to whim or caprice; that statutory power has to be exercised sparingly with circumspection and in the rarest of rare cases - In catena of decisions, this Court has reiterated the parameters for exercise of inherent powers Under Section 482 Code of Criminal Procedure and/or Under Article 226 of the Constitution of India in the matter of quashing the FIR/complaint.
The powers of investigation into cognizable offences are contained in Chapter XIV of the Code of Criminal Procedure. Section 154 deals with information in cognizable offence and Section 156 with investigation into such offence and under these Sections the police have the statutory right to investigate into the circumstances of any alleged cognizable offence - When the High Court would be justified in interfering with the investigation by the police, while exercising the inherent powers Under Section 482 Code of Criminal Procedure and/or Article 226 of the Constitution of India, few decisions of this Court are required to be noticed - In the case of STATE OF ORISSA & ORS. VERSUS UJJAL KUMAR BURDHAN [2012 (3) TMI 649 - SUPREME COURT], it is observed and held by this Court that unless case of gross abuse of power is made out against those in charge of investigation, the High Court should be loath to interfere at early/premature stage of investigation.
Whether the High Court would be justified in granting stay of further investigation pending the proceedings Under Section 482 Code of Criminal Procedure before it and in what circumstances the High Court would be justified? - HELD THAT:- There may be some cases where the initiation of criminal proceedings may be an abuse of process of law. In such cases, and only in exceptional cases and where it is found that non interference would result into miscarriage of justice, the High Court, in exercise of its inherent powers Under Section 482 Code of Criminal Procedure and/or Article 226 of the Constitution of India, may quash the FIR/complaint/criminal proceedings and even may stay the further investigation. However, the High Court should be slow in interfering the criminal proceedings at the initial stage, i.e., quashing petition filed immediately after lodging the FIR/complaint and no sufficient time is given to the police to investigate into the allegations of the FIR/complaint, which is the statutory right/duty of the police under the provisions of the Code of Criminal Procedure - in exceptional cases, when the High Court deems it fit, regard being had to the parameters of quashing and the self-restraint imposed by law, may pass appropriate interim orders, as thought apposite in law, however, the High Court has to give brief reasons which will reflect the application of mind by the court to the relevant facts.
Therefore, even while passing such an interim order, in exceptional cases with caution and circumspection, the High Court has to give brief reasons why it is necessary to pass such an interim order, more particularly when the High Court is exercising the extraordinary and inherent powers Under Section 482 Code of Criminal Procedure and/or Under Article 226 of the Constitution of India. Therefore, in the facts and circumstances of the case, the High Court has committed a grave error of law and also of facts in passing such an interim order of "no coercive steps to be adopted" and the same deserves to be quashed and set aside.
The final conclusions on the principal/core issue are as follows:
i) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into a cognizable offence;
ii) Courts would not thwart any investigation into the cognizable offences;
iii) It is only in cases where no cognizable offence or offence of any kind is disclosed in the first information report that the Court will not permit an investigation to go on;
iv) The power of quashing should be exercised sparingly with circumspection, as it has been observed, in the 'rarest of rare cases (not to be confused with the formation in the context of death penalty).
v) While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint;
vi) Criminal proceedings ought not to be scuttled at the initial stage;
vii) Quashing of a complaint/FIR should be an exception rather than an ordinary rule;
viii) Ordinarily, the courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of activities and one ought not to tread over the other sphere;
ix) The functions of the judiciary and the police are complementary, not overlapping;
x) Save in exceptional cases where non-interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences;
xi) Extraordinary and inherent powers of the Court do not confer an arbitrary jurisdiction on the Court to act according to its whims or caprice;
xii) The first information report is not an encyclopaedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. After investigation, if the investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure;
xiii) The power Under Section 482 Code of Criminal Procedure is very wide, but conferment of wide power requires the court to be more cautious. It casts an onerous and more diligent duty on the court;
xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lal (supra), has the jurisdiction to quash the FIR/complaint;
xv) When a prayer for quashing the FIR is made by the alleged Accused and the court when it exercises the power Under Section 482 Code of Criminal Procedure, only has to consider whether the allegations in the FIR disclose commission of a cognizable offence or not. The court is not required to consider on merits whether or not the merits of the allegations make out a cognizable offence and the court has to permit the investigating agency/police to investigate the allegations in the FIR;
xvi) The aforesaid parameters would be applicable and/or the aforesaid aspects are required to be considered by the High Court while passing an interim order in a quashing petition in exercise of powers Under Section 482 Code of Criminal Procedure and/or Under Article 226 of the Constitution of India. However, an interim order of stay of investigation during the pendency of the quashing petition can be passed with circumspection. Such an interim order should not require to be passed routinely, casually and/or mechanically. Normally, when the investigation is in progress and the facts are hazy and the entire evidence/material is not before the High Court, the High Court should restrain itself from passing the interim order of not to arrest or "no coercive steps to be adopted" and the Accused should be relegated to apply for anticipatory bail Under Section 438 Code of Criminal Procedure before the competent court. The High Court shall not and as such is not justified in passing the order of not to arrest and/or "no coercive steps" either during the investigation or till the investigation is completed and/or till the final report/chargesheet is filed Under Section 173 Code of Criminal Procedure, while dismissing/disposing of the quashing petition Under Section 482 Code of Criminal Procedure and/or Under Article 226 of the Constitution of India.
xvii) Even in a case where the High Court is prima facie of the opinion that an exceptional case is made out for grant of interim stay of further investigation, after considering the broad parameters while exercising the powers Under Section 482 Code of Criminal Procedure and/or Under Article 226 of the Constitution of India referred to hereinabove, the High Court has to give brief reasons why such an interim order is warranted and/or is required to be passed so that it can demonstrate the application of mind by the Court and the higher forum can consider what was weighed with the High Court while passing such an interim order.
xviii) Whenever an interim order is passed by the High Court of "no coercive steps to be adopted" within the aforesaid parameters, the High Court must clarify what does it mean by "no coercive steps to be adopted" as the term "no coercive steps to be adopted" can be said to be too vague and/or broad which can be misunderstood and/or misapplied.
Appeal allowed.
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2021 (4) TMI 1243
Criminal Misconduct - public servant, acting as quasi judicial authority under a statute - allegation against the petitioner is that he passed Annexure-VI order without verifying the back records and without ascertaining the factual position and therefore, he committed criminal misconduct - initiation of criminal proceedings against such quasi judicial adjudication - HELD THAT:- There can be no dispute with regard to the fact that the proceeding under Section 12 of the Act is a quasi judicial proceeding. In fact, it is specifically mentioned in this provision that, for the purpose of Section 199 of the Indian Penal Code, the proceedings taken under this provision shall be deemed to be judicial proceedings - An aggrieved party can file appeal as provided under Section 16(1) against an order passed under Section 12 of the Kerala Land Conservancy Act. Revision against such order is also provided under Section 16(2) of the Act, which states that the Collector may either suo motu or on application revise any decision made or order passed under the Act by an authorised officer.
If a public servant, acting as a quasi judicial authority under a statute passes an order and if such order is in favour of a person other than the Government, any pecuniary advantage obtained by such person by virtue of such order, cannot be the basis for prosecution of the public servant under the PC Act, unless there is an allegation that he was actuated by extraneous considerations or oblique motives in passing the order - to fall within the four corners of sub-clause (ii) of clause (d) of Sub-section (1) of Section 13 of the P.C. Act, the decision/conduct of the public servant must be dishonest amounting to corruption. Mens rea, the intention and/or knowledge of wrong doing, is an essential condition of the offence of criminal misconduct under Section 13(1)(d)(ii) of the P.C. Act. The presumption under Section 20 of the P.C. Act does not apply to the offence under Section 13(1)(d)(ii) of that Act.
The condition precedent to the commencement of investigation is that the F.I.R. must disclose, prima facie, that a cognizable offence has been committed. The right of the police to conduct investigation is conditioned by the existence of reason to suspect the commission of a cognizable offence and they cannot, reasonably have reason so to suspect unless the F.I.R., prima facie, discloses the commission of offence. If that condition is satisfied, the investigation must go on. The Court has then no power to stop the investigation.
The Annexure-I F.I.R., as against the petitioner, is liable to be quashed by invoking the power of this Court under Section 482 of the Code - petition allowed.
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2021 (4) TMI 1242
Deduction u/s 80P(2)(a)(i) - interest income received by assessee is not eligible for deduction u/s 80P(2)(a)(i) of the I.T.Act. as the same is not related to any banking activity - HELD THAT:- The Hon’ble Apex Court in the case of Mavilayi Service Co-operative Bank Ltd. v. CIT [2021 (1) TMI 488 - SUPREME COURT] had held that when the assessee is registered as a Co-operative Society under the respective State Acts, the interest income received for providing credit facilities to its members is entitled to deduction u/s 80P(2)(a)(i) .
We remit the issues raised in this appeal to the file of A.O. The A.O. is directed to examine the deduction u/s 80P(2)(a)(i) of the I.T.Act in the light of the dictum laid down in the case of Mavilayi Service Cooperative Bank Ltd. v. CIT (supra) - Appeal filed by the assessee allowed for statistical purposes.
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2021 (4) TMI 1241
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - assignee of the Financial asset from the original lender - Financial Creditors or not - HELD THAT:- The application filed by the Petitioner seeking orders from the Hon’ble Tribunal in relation to the Majestic Towers Project (Asset owned by Corporate Debtor) to Mazda Estate on the basis on non-concluded contract. This application is necessarily against the Guarantor and seeking relief along with other home buyers to keep one property away from CIRP process. The application filed before Hon’ble NCLT Court III, has no bearing on the present application under section 7 of I & B Code seeking initiation of CIRP against the Corporate Debtor (borrower) in terms of default of non-payment of debt - This Bench is of the considered view that the debt of ₹ 150 crores have sanctioned and disbursed by the original lender and there is a default of payment of instalment of term loan from 30.06.2017 by the Corporate Debtor. Hence the Petition is admitted.
The nature of Debt is a “Financial Debt” as defined under section 5 (8) of the Code. It has also been established that there is a “Default” as defined under section 3 (12) of the Code on the part of the Debtor. The two essential qualifications, i.e. existence of ‘debt’ and ‘default’, for admission of a petition under section 7 of the I&B Code, have been met in this case. Besides, the Company Petition is well within the period of limitation. This petition is admitted.
Petition admitted - moratorium declared.
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2021 (4) TMI 1240
Deduction u/s 10A - Tribunal held that set off of brought forward losses of non eligible unit against the income of the eligible 10A unit is to be allowed and deduction under section 10A should be allowed without reducing the unabsorbed depreciation and brought forward losses of the non 10A unit - HELD THAT:- Issue similar is decided against revenue as decided in M/s. Comstar Automative Technologies Private Ltd[2020 (3) TMI 814 - MADRAS HIGH COURT].
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2021 (4) TMI 1239
Seeking direction to transfer ownership of 153 trucks (subject vehicles) in favour or in the name of the Petitioner - seeking exemption from payment of tax on account of non-use - recovery of tax dues from the corporate debtor in respect of whom an order of liquidation had been passed by the NCLT - waterfall mechanism under Section 53 of the IBC - overriding effect of IBC over other acts - HELD THAT:- The subject vehicles were sold in an auction conducted by the Respondent No. 4 as liquidator who had taken custody and control of the subject vehicles under Section 35 of the IBC. The impugned Demand Notices were thereafter issued in the name of Respondent No. 4 seeking payment of tax under MMVT Act in respect of the subject vehicles. The second impugned demand notice dated 19th June, 2020 claimed the sum of ₹ 4,94,48,347/- under Section 9(3) of the MMVT Act read with Rule 24 of the Maharashtra Motor Vehicles Taxation Rules. It is observed that Rule 24 of the Maharashtra Motor Vehicles Taxation Rules has infact been deleted and thus a wrong provision has been invoked in the second impugned demand notice dated 19th June, 2020 - Further, the impugned Demand Notices were not issued to the Petitioner. The tax dues were stated to be recoverable from the corporate debtor in respect of whom an order of liquidation had been passed by the NCLT on 19th November, 2018.
There are no substance in the submission of the learned AGP for Respondent Nos. 1 to 3 that the statutory dues of Respondent Nos. 2 and 3, which are in respect of the subject vehicles would follow the subject vehicles and the Respondent Nos. 2 and 3 can claim their statutory dues from the purchaser of the subject vehicles - the dues relatable to the subject vehicles belonging to the corporate debtor can only be recovered under the provisions of IBC viz. waterfall mechanism under Section 53 of the IBC and not from the Petitioner as purchaser.
There are no substance in the preliminary issue raised by the learned AGP for the State as to the maintainability of this Petition. Section 14 of the MV Act, 1958 provides "any person who is aggrieved by any order of the Tax Authority, may file an Appeal before such person or authority, in such manner within such time and on payment of such fees as may be prescribed". In the present case the Petitioner is not a person aggrieved as the impugned demand notices had been issued in the name of Respondent No. 4 as liquidator in respect of the subject vehicles. Thus there is no demand for payment of tax made against the Petitioner - Respondent No. 3 is compulsory required to lodge its claim with Respondent No. 4, the liquidator after which the liquidator would verify the same and either admit or reject the claim in full or part. Respondent Nos. 2 and 3 would thus be entitled to payment as per the waterfall mechanism under Section 53 of the IBC. Thus it is the case of the Petitioner that the impugned demand notices could not have been issued by placing reliance on the MMVT Act. The IBC has overriding effect under Section 238 read with Section 53 thereof which will prevail over any demand made under Section 8 of the MMVT Act.
There are no substance in the submissions of learned AGP that the subject vehicles cannot be transferred under Section 50 of the MMVT Act, 1988 till the statutory dues in respect of the subject vehicles are discharged. The recovery under Section 8 of the MMVT Act and registration and transfer under Section 50 of the MMVT Act are two separate an independent functions and as such they cannot be interlinked - In the present case it is clear from the facts on record as well as the provisions of the IBC that it would be necessary for Respondent Nos. 2 and 3 to lodge their claims before the Respondent No. 4 as liquidator of the corporate debtor.
The impugned demand notices which seek payment of the tax dues under the MMVT Act would also require to be quashed and set aside - petition disposed off.
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2021 (4) TMI 1238
Approval of scheme of amalgamation - seeking dispensation of the various meeting - seeking holding and convening of various meetings - sections 230-232 of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding and convening of various meetings issued - directions regarding issuance of notices for such meetings also issued.
Application allowed.
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2021 (4) TMI 1237
Deduction u/s 80-IA - AO held by the Assessing Officer that deduction computed under Section 80-IA of the Act could not be allowed against any source other than business - HELD THAT:- In the case before us, there is no discussion about Section 80-IA(5) by the Appellate Authority, nor the Tribunal and the High Court. However, we have considered the submissions on behalf of the Revenue as it has a bearing on the interpretation of sub-section (1) of Section 80-IA of the Act. We hold that the scope of sub-section (5) of Section 80- IA of the Act is limited to determination of quantum of deduction under sub-section (1) of Section 80-IA of the Act by treating ‘eligible business’ as the ‘only source of income’. Sub-section (5) cannot be pressed into service for reading a limitation of the deduction under sub-section (1) only to ‘business income’. An attempt was made by the learned Senior Counsel for the Revenue to rely on the phrase ‘derived … from’ in Section 80-IA (1) of the Act in respect of his submission that the intention of the legislature was to give the narrowest possible construction to deduction admissible under this sub-section. It is not necessary for us to deal with this submission in view of the findings recorded above. For the aforementioned reasons, the Appeal is dismissed qua the issue of the extent of deduction under Section 80-IA of the Act.
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