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TMI Tax Updates - e-Newsletter October 3, 2022 Case Laws in this Newsletter: GST Income Tax Benami Property Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles GIST OF JUDICIAL PRONOUNCEMENTS ON ‘SEARCH’ UNDER GST News ₹1,47,686 crore gross GST revenue collected in the month of September 2022 Unified Logistics Interface Platform (ULIP) receives tremendous response as 13 organisations sign Non-Disclosure Agreement (NDA) to access data on ULIP Shri Sunil Barthwal assumes charge as Secretary, Department of Commerce CBDT extends due date for filing of various reports of audit for the Assessment Year 2022-23 under the Income-tax Act, 1961 Notifications Central Excise 31/2022 - dated 30-9-2022 - CE Effective Rate of Duty of excise - Basic Excise Duty on Unblended Petrol and Diesel, in order to promote Blending in the country - extend the date for additional duty for unblended fuels - Seeks to further amend No. 11/2017-Central Excise. Customs 86/2022 - dated 30-9-2022 - Cus (NT) Land Customs Stations and Routes for import and export of goods by land or inland water ways - Substituted entries for Bangladesh - Amendment in Notification No. 63/1994-Customs (N.T.) dated the 21st November, 1994 85/2022 - dated 30-9-2022 - Cus (NT) Rate of exchange of one unit of foreign currency equivalent to Indian rupees - Pound Sterling - Seeks to amend Notification No. 78/2022-CUSTOMS (N.T.), dated 15th September, 2022 84/2022 - dated 30-9-2022 - Cus (NT) Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver GST - States 59/GST-2 - dated 30-9-2022 - Haryana SGST Notification for notifying 01.10.2022 as the date on which provisions of sections 2 to 15 except section 13 of the HGST (Amendment) Act, 2022 shall come into force under the HGST Act, 2017 58 /GST-2 - dated 30-9-2022 - Haryana SGST Notification for notifying 05.07.2022 as the date on which provisions of section 13 of the HGST (Amendment) Act, 2022 shall come into force under the HGST Act, 2017 GST-1022/C.R.40/Taxation-1 - dated 26-9-2022 - Maharashtra SGST Mr. M.Ram Mohan Rao has been appointed as member of Advance Ruling Authority in the place of Mr. Rajiv Ranjan. 09/2022-State Tax - dated 22-9-2022 - Maharashtra SGST Seeks to notify the provisions of section 13 of Maharashtra Goods and Service Tax (Amendment) Act, 2022. SEZ S.O. 4576 (E) - dated 27-9-2022 - SEZ Multi-Product Special Economic Zone - Central Government de-notifies an area of 516.3049 hectares, thereby making resultant area as 1136.7881 hectares specified SEZ. Circulars / Instructions / Orders SEBI SEBI/HO/IMD/IMD-I DOF1/P/CIR/2022/132 - dated 30-9-2022 Two-Factor Authentication for transactions in units of Mutual Funds SEBI/HO/IMD/IMD-I DOF1/P/CIR/2022/133 - dated 30-9-2022 Circular for Portfolio Managers SEBI/HO/DDHS/DDHS-RACPOD2/P/CIR/2022/134 - dated 30-9-2022 Amendment to guidelines and extension of timeline for implementation of Standardized industry classification by Credit Rating Agencies (CRAs) Income Tax 19/2022 - dated 30-9-2022 Extension of timeline for filing of various reports of audit for the Assessment Year 2022-23 Highlights / Catch Notes GST Refund claim - time limitation - As per the circular, the last date for filing refund application in FORM GST RFD-01 would be 23.09.23 (two years from date of notification). In case, the adjudicating authority holds that the transaction as an inter-State supply and if ‘A’ pays IGST in respect of transaction on 10.05.2019, the last date for filing refund application would be 23.09.2023. - HC Visit to Get Source Pre-deposit before filing of an appeal - Utilisation of credit available only in the Electronic Cash Ledger - Since in the present petitions, the amounts payable are towards output tax, it is held that Petitioners may utilise the amount available in the Electronic Credit Ledger to pay the 10% of Tax in dispute as prescribed under Sub-section (6) of Section 107 of MGST Act. - HC Visit to Get Source Maintainability of petition - appealable order or not - Levy of interest under Section 50 along with penalty under Section 122(2) of the Central Goods and Service Tax Act, 2017 - restriction on ITC - Since an appeal provision is available, it is in the fitness, it would be just and proper, the petitioner avails the remedy of appeal where all the issues can be agitated. - HC Visit to Get Source Income Tax Deduction u/s 43B - Section 43B of the Act does not speak about the electricity charges. Nowhere it is mentioned in the Section or proviso to it that unpaid electricity charges are not deductable. Revenue cannot interpret the provisions of Section 43B of the Act in its favour, since the provisions of Section do not incorporate the electricity charges - HC Visit to Get Source Validity of Reopening of assessment u/s 147 - order passed u/s 148A - It may be true that, the Petitioner would be having number of opportunities to explain his stand in the proceedings to be initiated under Section 148 of the Act, i.e., after filing of the assessment, but the argument of the learned Counsel for the Petitioner that the Petitioner could not be put to such a ordeal, at this stage, more so, when the Order came to be passed without verifying the records, cannot also be brushed aside. - matter restored back - HC Visit to Get Source Levy of penalty u/s. 271B - failure to get his books audited and furnish Audit Report u/s. 44AB - Section 271B as extracted above further throws light on the legislative intent as it specifically provides that no penalty "shall’ be imposed if the assessee proves "that there was reasonable cause for the said failure". - the explanations offered by the assessee have been ignored by the AO and CIT(A) - Penalty deleted - AT Visit to Get Source Deemed income - Addition u/s 41(1) - cessation of liability - amount due to partnership firm - The said adjustment of transferring the loan into the capital is between the assessee and the partnership firm. Had the assessee treated it as a part of the capital in the preceding year when the amount was actually withdrawn from the partnership firm, the present situation would not have arrived. - AT Visit to Get Source Deduction u/s 10B - ordinarily, what profit the assessee might have expected to arise - AO had not brought on record any material to demonstrate that the assessee company had indulged in an arrangement with its foreign AE to produce the assessee more profits than ordinarily, what profit the assessee might have earned arising out of such business, and the AO had not indicated any material evidence to disclose any such arrangement between the assessee company and its AE. - AT Visit to Get Source Customs Onus and power of custodian - validity of auction of goods - seized goods - LED bulbs - cosmetic items - despite not obtaining the BIS certificate and NOC from the Assistant Drug Controller declaring the goods fit for Human consumption and not hazardous for human health, the custodian moved ahead by auctioning the goods that were prohibited for sale making the entire process in contravention to The Customs Act, 1962. - Action of custodian sustained - HC Visit to Get Source Levy of penalty - mis-declaration of description of imported goods - Having found that the appellant had no intention, the Commissioner (Appeals) has still proceed to confirmed a reduced penalty under section 114AA upon the appellant - It is found that this cannot be sustained because once the intention is lacking, no penalty can be imposed upon the appellant under section 114AA. - AT Visit to Get Source Classification - used mild steel (MS) plates imported - demolition of six ‘petrochemical tanks’ in the United Kingdom by M/s GK Middle East FZC, Ajman - the eligibility for the benefit of the exemption notification as well as not being subject to the restriction prescribed in the Foreign Trade Policy on the import of used goods is established. - AT Visit to Get Source Indian Laws Dishonor of Cheque - presumption of debt - when the complainant himself comes up with a document to establish the existing debt or liability, the question of raising presumption under Section 139 does not arise because in such a case the complainant does not depend upon the statutory presumption - When said document is disputed by the accused and the accused admitted his signature on some other documents produced by the complainant during his cross examination, court is required to obtain expert opinion comparing the said two documents for just decision of the case- HC Visit to Get Source VAT Reassessment of tax - the order of assessment, was not in existence on the date of issuing notice for reassessment under Section 22 (1) of the Act of 2005. Therefore, the Assessing Officer was jurisdiction-less to initiate reassessment proceedings under Section 22 (1) of the Act of 2005 and the order of reassessment ultimately passed is without jurisdiction and without authority of law - HC Visit to Get Source Case Laws: GST 2022 (10) TMI 46 Refund claim - time limitation - whether the application made by the petitioner is barred by limitation and whether all the documents as required are filed along with the said refund applications? - Section 54 of CGST Act - HELD THAT:- Section 54 of the CGST Act, 2017 deals with Refund of Tax . It is also not in dispute that the said application must be made within a period of two years from the relevant date in such form and manner prescribed. But, at the same time, it is to be noted that the Government of India, Ministry of Finance issued a Circular dated 25.09.2021 on this aspect. The subject in the said Circular relates to Refund of Tax specified in Section 77(1) of CGST and Section 19(1) of IGST Act. A reading of the Circular No.162/18/2021-GST and Column No.3 of 4.3 relating to refund claim, it is clear that if A has paid tax under a correct head before issuance of Notification No.35/2021-Central Tax, dated 24.09.2021, the last date for filing refund application in FORM GST RFD-01 would be 23.09.23 (two years from date of notification). In case, the adjudicating authority holds that the transaction as an inter-State supply and if A pays IGST in respect of transaction on 10.05.2019, the last date for filing refund application would be 23.09.2023. Since the issue involved relates to period of limitation in filing the refund application, coupled with the documents to be filed, it would be just and proper, in our view, to remand the matter back to the authority i.e. third respondent/Assistant Commissioner Central Tax, to deal with the refund application in the light of the Circular No.162/18/2021-GST dated 25.09.2021, issued more particularly with regard to the applicability of the Circular issued by the Government, and then pass orders in accordance with law. The writ petition is disposed off. 2022 (10) TMI 45 Maintainability of appeal - adverse report was not furnished to the appellant - effective opportunity of hearing was not granted to the appellant by the appellate authority - principles of natural justice - HELD THAT:- Admittedly, as against the impugned order as on date there is no other remedy available under the Act since the Tribunal has not been constituted. Therefore, the appellant had to necessarily approach the learned writ court for challenging the said order - when such is the position, the learned writ court would have to examine as to the correctness of the order passed by the appellate authority as the writ petition is the first judicial forum, which will test the correctness of the order passed by the statutory appellate authority. If there is an adverse report drawing certain conclusions against the appellant, then such material should be furnished to the appellant so as to enable to put forth the contentions and place all relevant facts. It appears that the representation given to the appellate authority on 19.07.2022 has not been considered and the copy of the adverse report has not been furnished. The appellant should be directed to pay a portion of the liability to be entitled to fresh opportunity of hearing. The appellant is also directed to pay the concerned authority a sum of Rs. 15 lacs within a period of six weeks from the date of receipt of the server copy of this order - Appeal disposed off. 2022 (10) TMI 44 Maintainability of petition - availability of alternative remedy - Jurisdiction - whether authority does not have jurisdiction to issue the show cause notice? - HELD THAT:- The issue relating to the jurisdiction of the authority can very well be raised before the appellate authority and it is the mixed question of fact and law, which can be canvassed by the appellants before the appellate authority. Therefore, we are of the view that the learned Single Bench rightly refused to entertain the writ petition on the ground of availability of alternative remedy, which, in our view, is not only efficacious but also effective as well. In the light of the above, while dismissing the appeal and affirming the order passed by the learned Writ Court, the appellants are directed to file the appeal before the concerned appellate authority in physical form within a period of five weeks from the date of receipt of the server copy of this judgment and order and raise all contentions before the appellate authority - appellants are granted liberty to move before the appellate authority by way of an interlocutory application to lift the lien created on the appellants bank account by the original authority. Appeal disposed off. 2022 (10) TMI 43 Constitutional Validity of Levy of GST on Royalty - GST on the reverse charge basis on the royalty of the mining extraction - HELD THAT:- We are bound by the final orders passed by Co-ordinate Benches of this Court in the cases of Udaipur Chambers of Commerce and Industry Others Vs. The Union of India Another [ 2017 (10) TMI 975 - RAJASTHAN HIGH COURT ], M/s Mateshwari Minerals Another Vs. Union of India Another [ 2021 (7) TMI 1379 - RAJASTHAN HIGH COURT ], M/s Shivalik Silica Vs. Union of India Others [ 2022 (3) TMI 1369 - RAJASTHAN HIGH COURT ] and RAJASTHAN SMALL MINES (CHEJAPATTHAR) LEASE HOLDERS ASSOCIATION VERSUS STATE OF RAJASTHAN [ 2022 (4) TMI 1451 - RAJASTHAN HIGH COURT] where it was held that The royalty being consideration certainly places assignment of right to use natural resources deposited in the leased area as a service as defined under Section 65-B(44) of the Act of 1994, according to which, any activity carried out by a person for another for consideration is a service. The prayer of the petitioners to entertain the petition on the same issue on the basis of interim order passed in the case of Shree Basant Bhandar INT Udyog Vs. Union of India [ 2022 (7) TMI 565 - RAJASTHAN HIGH COURT ] and similar interim orders passed in other cases cannot be accepted. Once we are faced with final order passed on one hand and interim orders on the other, we have to follow the final verdict of Co-ordinate Bench of this Court. Petition disposed off. 2022 (10) TMI 42 Pre-deposit before filing of an appeal - Utilisation of credit available only in the Electronic Cash Ledger - Whether, an Appellant, to comply with the requirements of Sub-section 6 of Section 107 of the Maharashtra Goods and Services Tax Act, 2017 (MGST Act) of paying a sum equal to 10% of the amount of Tax in dispute arising out of the impugned order, can pay the amount utilising the credit available in the Electronic Credit Ledger? HELD THAT:- Petitioner having to pay 10% of the Tax in dispute under clause (b) of Sub-section (6) of Section 107, can certainly utilise the amount of ITC available in the Electronic Credit Ledger. Sub-section (4) of Section 49 provides the amount available in the Electronic Credit Ledger may be used for making any payment towards output tax under the MGST Act or IGST Act subject to certain restrictions or conditions that may be prescribed. Sub-rule (2) of Rule 86 of MGST Rules provides for debiting of the Electronic Credit Ledger to the extent of discharge of any liability in accordance with the provisions of Section 49 of the MGST Act - any payment towards output tax, whether self-assessed in the return or payable as a consequence of any proceeding instituted under the MGST Act can be made by utilisation of the amount available in the Electronic Credit Ledger. Hence, a party can pay 10% of the disputed Tax either using the amount available in the Electronic Cash Ledger or the amount available in the Electronic Credit Ledger. Since in the present petitions, the amounts payable are towards output tax, it is held that Petitioners may utilise the amount available in the Electronic Credit Ledger to pay the 10% of Tax in dispute as prescribed under Sub-section (6) of Section 107 of MGST Act. The Appeal is restored to file on the undertaking of Petitioner that it shall debit the Electronic Credit Ledger within one week of this order getting uploaded towards this 10% payable under Section 107(6)(b) - petition disposed off. 2022 (10) TMI 41 Maintainability of petition - appealable order or not - Levy of interest under Section 50 along with penalty under Section 122(2) of the Central Goods and Service Tax Act, 2017 - restriction on ITC - HELD THAT:- A perusal of Section 50 of CGST Act, 2017 shows that there was an amendment to Section 50 of the CGST Act, which came into effect from 01.06.2021. A reading of Section 50 of CGST Act coupled with the amendment would show that every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen percent, as recommended by the Government. Whether the authorities were right in directing the petitioner for payment of interest on the disputed tax and the penalty thereof? - HELD THAT:- Since an appeal provision is available, and taking into consideration the findings given by the Assessing Authority, more so, when the finding by the Assessing Authority is to the effect that the assesse is under an obligation to restrict input tax credit to the extent of exempt supplies every month and reverse the same in their GSTR-3B returns, but failed to do so and utilized such ineligible credit to discharge output tax liability, withholding the payment of tax by the due date, coupled with the finding given with regard to payment of interest, it is in the fitness, it would be just and proper, the petitioner avails the remedy of appeal where all the issues can be agitated. The writ petition is disposed of. 2022 (10) TMI 40 Maintainability of application - rectification of mistake - error apparent on the face of record or not - Classification of services - manpower supply service - services rendered to government institutions/entities/authorities - Educational Institutions or not - HELD THAT:- The Applicant is engaged in supply of Manpower services to various organisations/institutions like Indian Institute of Astrophysics, Indian Academy of Sciences, National Dairy Research Institute, National Institute of Oceanography, National Institute of Technology Goa, Raman Research Institute, SJB College of nursing, Central University of Karnataka, National Assessment and Accreditation Council, National Institute of Fashion Technology and BGS Global Institute of Medical Science. The manpower supplied by the applicant is in the nature of security guards, housekeeping staff and catering staff. But these manpower services are not provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. There is no error/ apparent mistake on the face of the record, in the order and hence the instant application is not valid and is liable for rejection, in terms of section 98(2) of the CGST Act 2017 - the instant application filed by the applicant for rectification of mistake in the Advance Ruling Order is hereby rejected. Income Tax 2022 (10) TMI 39 Deduction u/s 43B - additional charges and interest payable to the A.P. State Electricity Board for the delayed payment of consumption charges - whether it does not fall within the purview of fee and hence it is deductable as expenditure notwithstanding non-remittance of the same before the date stipulated U/s.43B ? - HELD THAT:- This issue is squarely covered by a decision of this Court reported in CIT v. Andhra Ferro Alloys (P) Ltd. [ 2013 (2) TMI 530 - ANDHRA PRADESH HIGH COURT] . In the said decision, a Division Bench of this Court had examined the contours of Section 43B and held that non-payment of such disputed electricity charges to the APSEB cannot be termed as fees and that the Revenue has to give deduction to the said amount. Tribunal while allowing the Appeal held that the electricity charges partake the nature of statutory liability and accordingly will have to be allowed as deduction irrespective of whether or not the same has been paid and notwithstanding that the assessee has disputed any liability to pay any part of such charges. Section 43B of the Act does not speak about the electricity charges. Nowhere it is mentioned in the Section or proviso to it that unpaid electricity charges are not deductable. Revenue cannot interpret the provisions of Section 43B of the Act in its favour, since the provisions of Section do not incorporate the electricity charges - such electricity charges are in the nature of statutory liability and the Revenue has to allow them as deduction irrespective of whether or not the same has been paid and notwithstanding that the assessee has disputed any liability to pay any part of such charges. Assessee entitled to grant of deduction of the expenditure not having been recorded in the books of accounts much less claimed as a deduction in the return under the I.T. Act - HELD THAT:- As the issue was settled by the Supreme Court in National Thermal Power Company Limited v. Commissioner of Income Tax [ 1996 (12) TMI 7 - SUPREME COURT] which was explained by the Supreme Court in Goetze (India) Ltd. V. Commissioner of Income Tax [ 2006 (3) TMI 75 - SUPREME COURT] . This issue cropped up again before the Supreme Court in Wipro Finance Limited v. CIT [ 2022 (4) TMI 694 - SUPREME COURT] wherein it has been clarified that there is no bar for an assessee to set up a fresh claim before the Tribunal though such a bar may operate against the revenue. 2022 (10) TMI 38 Exemption u/s 11 - CIT(A) justification in allowing depreciation on an asset already treated as application of income - HELD THAT:- The issue has been concluded by this Court in the Case of Institute Of Banking Personnel Selection (IBPS) [ 2003 (7) TMI 52 - BOMBAY HIGH COURT] held that normal depreciation can be considered as a legitimate deduction in computing the real income of the assessee on general principles or under section 11(1)(a) of the Income Tax Act The Court rejected the argument on behalf of the revenue that section 32of the Income Tax Act was the only section granting benefit of deduction on account of depreciation. Income of a Charitable Trust derived form building, plant and machinery and furniture was liable to be computed in normal commercial manner although the Trust may not be carrying on any business and the assets in respect whereof depreciation is claimed may not be business assets. In all such cases, section 32 of the Income Tax Act providing for depreciation for computation of income derived from business or profession is not applicable. However, the income of the Trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the Trust. This view was noticed with approval by the Hon ble Supreme Court in the case of Commissioner of Income Tax-III, Pune v. Rajasthan Gujarati Charitable Foundation Poona [ 2017 (12) TMI 1067 - SUPREME COURT] Appeal dismissed. 2022 (10) TMI 37 Reopening of assessment u/s 147 - validity of order passed by AO u/s 148A(d) - violation of natural justice - HELD THAT:- Ultimately, the explanation offered by the assessee was rejected and notice u/s 148 of the Act was issued. In our considered view, the stand taken by the assessing officer to deny an opportunity of personal hearing is not tenable. If credible information is available with the department such information has to be disclosed to the assessee so as to afford them an effective opportunity of submitting a reply. Having not done so, the proceeding is in violation of principles of natural justice. During the course of submission appearing for the appellant submitted that notice issued under Section 148A(b) of the Act is barred by limitation. The learned Advocate was candid enough to state that such a ground was not raised by the assessee while their reply to the show-cause notice nor heard before the learned Single Bench. In any event, the limitation being a question of law and touching upon the jurisdiction of the authority to initiate proceedings, it could be raised at any stage of the proceedings and it will not preclude the assessee from doing so, even at the appellate state before us. As we are fully satisfied that there has been violation of natural justice we are inclined to set aside the order passed by the assessing officer under Section 148A(d) and restore the matter back to the file of the assessing officer with certain directions. 2022 (10) TMI 36 Validity of Reopening of assessment u/s 147 - order passed u/s 148A - as contented primary condition u/s 149 to issue a notice is not satisfied, as the AO was not in possession of books of account or other documents to find out the income chargeable to tax, escaped the assessment amounts or that the amount is likely to cross Rs.50,00,000/-. - whether the Order passed under Clause (d) of Section 148A warrants interference? - HELD THAT:- It may be true that, the Petitioner would be having number of opportunities to explain his stand in the proceedings to be initiated under Section 148 of the Act, i.e., after filing of the assessment, but the argument of the learned Counsel for the Petitioner that the Petitioner could not be put to such a ordeal, at this stage, more so, when the Order came to be passed without verifying the records, cannot also be brushed aside. The issue is fortified by the fact that, in respect of information furnished under CIB, the Petitioner was able to explain the deposits made in the assessment year 2015-16, which tallied with the figures mentioned in the notice. The Order under challenge is set-aside and the matter is remanded back to the first Respondent with a direction that a fresh notice be given, disclosing the details of the second bank account if any with Andhra Bank or in any branch of Andhra Bank, where cash deposits are made within a period of one week or 10 days from the date of receipt of the Order, fixing a time limit for reply and, thereafter, proceed further in accordance with law. It is needless to mention that an opportunity of hearing be given, if requested. 2022 (10) TMI 35 Revision u/s 263 - As per CIT, assessee should not be allowed deduction for purchase price of shares as it was purchased from undisclosed income and the entire sale proceeds should have been declared by the assessee under IDS2016 and the AO has not made any enquiry on these aspects - HELD THAT:- A.O. has verified the facts of sale of shares and the IDS2016 opted by the assesee and took a possible view. We respectively fallow the judicial precedence of Mrs. Manisha Ajay Shah [ 2020 (10) TMI 660 - ITAT MUMBAI] and find that the order passed by the Pr.CIT cannot be sustained and is quashed and allow the grounds of appeal of the assessee. 2022 (10) TMI 34 Bogus LTCG - Disallowance of claim of exemption u/s. 10(38) - Addition u/s 68 - HELD THAT:- As decided in Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT] assessee had opportunity to prove that there was no manipulation at the other end and whatever gains the assessee has reaped was not tainted. This has not been proved or established by any of the assessee. The tribunal being the last fact finding authority was required to go deeper into the issue as the matter have manifested large scale scam. Thus, the orders of the tribunal are not only perfunctory but perverse as well. The exercise that was required to be done by the tribunal is to consider the totality of the circumstances because the transactions are shown to be very complex, the meeting of minds of the players can never be established by direct evidence and therefore the surrounding circumstances was required to be taken note of by the tribunal which exercise has not been done. Assessing Officers as well as the Commissioner (Appeals) have adopted an inferential process which is found to be a process which would be followed by a reasonable and prudent person. The Assessing Officers and the Commissioner (Appeals) have culled out proximate facts in each of the cases, took into consideration the surrounding circumstances which came to light after the investigation, assessed the conduct of the assessee, took note of the proximity of the time between the buy and sale operations and also the sudden and steep rise of the price of the shares of the companies when the general market trend was admittedly recessive and thereafter arrived at a conclusion which is a proper conclusion - Decided against assessee. 2022 (10) TMI 33 Penalty u/s 271(1)(c) - Defective notice u/s 274 - Non specification of charge - HELD THAT:- Hon'ble jurisdictional High Court in the case of Manu Engineering Works [ 1978 (9) TMI 18 - GUJARAT HIGH COURT] while considering the question of law whether Tribunal was right or holding the order of Inspecting Assisting Commissioner of Income-tax imposing penalty under section 271(1)(c) r.w.s. 274(2) of the Act, was without jurisdiction and illegal in cancelling the same held that while issuing notice as to penalty order, it was held that it is incumbent upon the IAC to come to a positive finding as to whether there was concealment of income or whether any inaccurate particulars of such income. Hon'ble Bombay High Court in recent Full Bench decision in the case of Mohd. Farhan A. Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] held that whether the Assessing Officer recorded satisfaction for imposing penalty one or other or both held that primary burden lies upon the Revenue. Considering the fact that no specific charge while initiating the penalty was mentioned by the assessing officer. The Assessing Officer levied the penalty under section 271(1)(c) for furnishing inaccurate particulars, and thereafter Ld. CIT(A) confirmed the penalty on account of concealment of particulars of income. Thus, the order of lower authorities committed error in levying the penalty under section 271(1)(c). Thus, in our view the penalty order which was modified by Ld. CIT(A) the impugned order is not sustainable. Thus, the assessee succeeds on primary submission 2022 (10) TMI 32 Condonation of delay in filling the appeal with the CIT(A) - assessee was pursuing suo motto rectification proceedings by the Assessing officer in respect of chargeability of Tax u/sec115BBE - HELD THAT:- Delay in filing the appeal before the CIT(A) is not an wanton Act but due to the alternative remedy pursued. We found that the assessing officer has issued notice U/sec 154 of the Act dated 11.10.2018 and the assessee has filed reply on 22.10.2018 and finally the A.O. has passed rectification order U/sec154 of the Act dated 18-06-2019 and whereas, the assessee has filed an appeal with the CIT(A) on 27.07.2019. Further as per Form no 35, the assessee has mentioned date of the service of order on 10-12-2017 in respect of order U/sec143(3) of the Act passed on 4-12-2017. The assessee was perusing the su-motto rectification proceedings u/sec154 of the Act with the Asseessing officer. We find the A.O. has issued notice U/sec 154 of the Act on 11-10-2018. Therefore we find that the assessee was perusing the proceedings before A.O. hence the time period from 11-10-2018 to the date of filling of the appeal by the asseesse against the Order U/sec143(3) of the Act with the CIT(A) on 20-07-2019 can be considered as reasonable cause and we condoned the delay. Assessee has received the order U/sec 143(3) of the Act on 10-12-2017 and therefore we are of the opinion that the assessee should explain the reasonable cause for delay for the period till date of notice issued by the A.O in suo-motto rectification proceedings i.e.11-10-2018. We considering the facts, circumstances and the delay as discussed above restore the disputed issue to the file of the CIT(A) to consider the application explaining the reasonable cause on the delay for the period 10-12-2017 to 11-10-2018 and adjudicate afresh on merits considering the material evidences filed in course of hearing, further, the assessee should be provided adequate opportunity of hearing and cooperate in submitting the information but early disposal of appeal and allow the grounds of appeal of the assessee for statistical purpose. 2022 (10) TMI 31 Addition u/s 68 - Unexplained cash deposits made in a bank account of the appellant - HELD THAT:- In the present case, the assessee has admitted that a cash totaling was deposited to his bank account during the year under consideration, but the assessee could not explain the nature and source of the cash deposited in the bank account. As per the list of the investors provided by the assessee, out of 280 persons as many as 89 persons to whom enquiry letters were issued by the A.O have denied having any transaction with the assessee and the remaining persons have either not replied to the letters issued to them or returned unserved to the A.O. Even in the second round after the remand, the assessee has provided the very same details and old addresses of the parties but the assessee has not able to provide the identity, creditworthiness and genuineness of the transaction. Since the assessee has miserably fail to prove the case of the assessee even after providing the opportunity by the Tribunal. As relied by the assessee are concerned, in the present case, there is no material to show that the assessee is a merely an entry operator and the amount has been later transferred to the actual owners and in view of the fact that assessee could not prove the transaction by getting confirmation from the respective investors and in the absence of proving the subsequent cash flow, the judgments relied by the AR are not applicable to the present case. - Decided against assessee. 2022 (10) TMI 30 Levy of penalty u/s. 271(1)(c) - Valid notice u/s 274 - non specification of charge - Non independent application of mind by AO - HELD THAT:- In the instant case, the AO initiated the penalty under section 271(1)(c) of the Act for concealment of income and furnishing inaccurate particulars of Incomeand thereafter issued the notice u/s 274 r.w.s. 271(1)(C) of Act for concealment of the particulars of income or filling of inaccurate particulars of income but without specifying any particular limb and finally vide penalty order dated 23.09.2015 imposed the penalty for concealment of the particulars of income. In the case of Manjunatha Cotton Ginning Factory [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] observed where the Assessing Officer proposed to invoke first limb being concealment, then the notice has to be appropriately marked. The Hon'ble High Court also held that the standard proforma of notice under section 274 of the Act without striking of the irrelevant clause would lead to an inference of non-application of mind by the Assessing Officer and levy of penalty would suffers from non-application of mind. The penalty provisions of section 271(1)(c) of the Act are attracted, where the Assessee has concealed the particulars of income or furnished inaccurate particulars of such income. It is also a well-accepted proposition that the aforesaid two limbs of section 271(1)(c) of the Act carry different meanings. Therefore, it is imperative for the Assessing Officer to specify the relevant limb so as to make the Assessee aware, as to what is the charge made against him so that he can respond accordingly. - Decided in favour of assessee. 2022 (10) TMI 29 Disallowance u/s 14A r.w.r. 8D - suo moto disallowance made by assessee - HELD THAT:- There is force in the contention of the ld counsel that only those investment are required to be considered for the purpose of the calculation under Rule 8D, which had yielded the exempt income. In the present case the dividend income is received in investment in subsidiary companies only as is evident - The provision for investments is certainly not considerable for computing average value of investment which yielded the exempt income during the year. Apart from this there is also substance in the contention of Assessee that the AO had failed to record satisfaction before making any disallowance beyond the suo moto disallowance. At the same time the Assessee's own funds are established to be more than the value of investments yielding exempt income. CIT(A) has failed to appreciate the aforesaid contention. Accordingly, ground is sustained in favour of the Assessee. Valuation of land - Admission of the additional evidence of the Assessee u/s 250(4) - HELD THAT:- Once the ld CIT(A) has admitted the valuation report in regard 313 sq mts. of land, then it was not justified to uphold addition in regard 313 sq mts of land on basis that Assessee had failed to furnish the same before the AO. Thus, it is fit case to transmit back the issue to the ld CIT(A) to take into consideration the valuation report in respect of 313 sq mts of land and determine the issue again. The ground is decided in favour of the Assessee for statistical purposes. 2022 (10) TMI 28 Revision u/s 263 by CIT - case of the assessee was selected for limited scrutiny under CASS to examine interest expenses, sundry creditors other expenses claimed in the Profit Loss Account - HELD THAT:- All the three aspects of limited scrutiny were duly examined and verified by Ld. AO and certain addition was made after perusal of all the evidences. Therefore, it would not be correct to say that the assessment was framed without due verification or examination. No error could be found in the assessment order which would justify revision of the order. In such a case, Explanation-2 to Sec.263 would have no application. Observations of CIT that the assessee did not furnish adequate details of other expenses of Rs.32.04 Crores are not correct. The observation that there was fall in the Net Profit rate and therefore, the income should have been estimated @8%, is also without any basis. As seen that the assessee s books were subjected to Tax Audit and no defects could be pointed out by Ld. AO in the books of accounts maintained by the assessee. Hence, there is no justification for rejection of books of accounts. Assessee s income could not be estimated u/s 44AD since the turnover is beyond threshold limit of Sec. 44AD. The assessee s books were audited and there could be various reasons for fall in the net profit rate. However, even otherwise, this aspect was beyond the scope of limited scrutiny. Last allegation of CIT that the payment to collectorate was not genuine, we find that this payment is being made by the assessee since past several years which has been allowed by higher judicial authorities in earlier years. Nevertheless, the assessee had filed sufficient evidences and explanation during the course of assessment proceedings in support of claim of this payment. The same was duly considered and accepted by Ld. AO with due application of mind. The acceptance of the claim could not be termed as erroneous. It is not a case wherein no inquiries were made by Ld. AO. Rather the case was selected for limited scrutiny to examine and verify three aspects which were duly examined and verified by Ld. AO. Secondly, this explanation is subjected to satisfaction of primary conditions of Sec.263 i.e., the order should be erroneous as well as prejudicial to the interest of the revenue. Upon perusal of assessment order, we do not find any error in the same and unable to accept this plea of Ld. CIT-DR.- Decided in favour of assessee. 2022 (10) TMI 27 Denial of exemption u/s 11 - whether nature of receipts is from the services rendered to the builders and developers for smooth development of residential and commercial building in slum areas and therefore, these activities are directly hit by the proviso to section 2(15)? - HELD THAT:- Lower authorities have not examined whether these receipts arose on carrying out of the activities integral to assessee s functions or its principal objects or as to whether the same was necessary for furtherance of objects for which the assessee was established. In fact, the continuation of principal / main activity and the direct correlation between the two is relevant to decide whether assessee s case fall within the category of advancement of any other object of general public utility . Therefore, we remand this issue also to the file of AO for de novo adjudication after necessary examination of the aforesaid aspects. We further direct the assessee to provide details as may be required by the AO for complete adjudication of aforesaid aspects. Since, various aspects pertaining to section 2(15) of the Act have been remanded to the AO for de novo adjudication and once the assessee satisfies those aspects, it can be said to be eligible to claim exemption u/s 11 - The ground raised by the assessee pertaining to denial of exemption u/s 11 is also remanded to the file of AO for de novo adjudication in light of the conclusion reached in the remand proceedings. In these appeals, revolve around assessee s claim of exemption u/s 11 of the Act, therefore, these grounds are also remanded to the AO for de novo adjudication. Accordingly, all the grounds raised by the assessee, in these appeals, are allowed for statistical purpose. 2022 (10) TMI 26 TP Adjustment - Adjustment made in the international transaction of `Payment of Royalty for use of technology - HELD THAT:- There is no difference in technology supplied by Cummins Inc. which is used for manufacturing the products meant for sale in domestic market and foreign market. On domestic sales the assessee paid Royalty which is 0.89%; and on export sales the assessee paid Royalty which is 6.13%. Whereas, the view point of the TPO is that the assessee paid royalty on goods meant for sale to its AEs at higher rates so as to reduce its income and the consequential tax incidence in India and accordingly segregated the royalty on domestic sale and exports for separate benchmarking, AR has pitched for aggregating both to be processed as a single transaction for the ALP determination. AR submitted that this issue was also raised before the DRP through objection no.3. On a perusal of the directions of the DRP, it is seen that the assessee did take up this issue by means of objection no.3 as has been mentioned at page 29 of the Direction. The assessee also tendered its explanation in support of the objection. Though the DRP decided the larger issue and upheld the TPO s view in segregating the Royalty transaction from the others in the overall Manufacturing segment, but inadvertently omitted to adjudicate the issue of segregation of domestic sale-based and export-based royalty payment raised through objection no. 3. We are of the considered opinion that the ends of justice would meet adequately if the impugned order on this specific issue is set-aside and the matter is restored to the file of the DRP for limited purpose of disposing of the assessee s objection no.3. Needless to say, the assessee will be allowed reasonable opportunity of hearing in such fresh proceedings. Disallowance of expenses u/s.14A - HELD THAT:- As observed that similar issue came up for consideration before the Tribunal in the assessee s appeal for the A.Y. 2013-14. A copy of the order has been placed - Relevant discussion has been made at page 8 onwards of the order and eventually the matter has been restored to the file of the AO for deciding it in conformity with the decision taken by the Tribunal in the assessee s own case for the A.Y. 2013-14. As the facts are admittedly similar, respectfully following the precedent, we set-aside the impugned order on this score and remit the matter to the file of the AO for deciding it in conformity with the directions given by the Tribunal in its order for the A.Y. 2012-13. Disallowance of additional depreciation - HELD THAT:- As seen that this issue also came up for consideration before the Tribunal in the case of the assessee for the A.Y. 2013-14. Relevant discussion has been made at page 12 of the order. The Tribunal has followed its own order for the A.Y. 2012-13 in allowing the assessee s claim in respect of such additional depreciation. As the facts and circumstances are mutatis mutandis similar, respectfully following the precedent, we allow this ground of appeal. Capital gain - Addition u/s.50C - provisions of section 50C should not be applied for making addition on account of difference between the stamp value and the declared full value of consideration, the assessee requested for a reference to the DVO - HELD THAT:- A difference between the full value of consideration declared by the assessee and the stamp value of the land sold by the assessee. Section 50C, in such circumstances, contemplates that such difference should be brought to tax - an option has been given to assessee to seek the valuation of the property from the DVO. The assessee did exercise this option and the DVO determined the valuation of the land, leading to addition of Rs.3.50 crore. It is seen that the objections raised by the assessee before the DVO, though considered by the DVO, but remained to be adjudicated by the DRP. It goes without saying that the DVO s report is not sacrosanct inasmuch as it is open to adjudication by the higher authorities. If the assessee convinces the higher authorities that the DVO erred in correctly valuing the property, the valuation can be suitably adjusted. Turning to the facts of the instant case, it is seen that though the assessee raised objections before the DRP about certain deficiencies/inconsistencies in the DVO s report, but the same were not adjudicated by the DRP. It would be meet the ends of justice if the impugned order on this count is set-aside and the matter is restored to the file of the DRP for disposing of the assessee s objections against the DVO s report. Needless to say, a reasonable opportunity of hearing will be accorded to the assessee. Disallowance of deduction on Education Cess and Secondary higher education cess has to fail in view of the statutory amendment carried out to section 40(a) with retrospective effect covering the year under consideration - AR was fair enough to accept this position. This ground is, therefore, not allowed. 2022 (10) TMI 25 D is allowance of interest u/s 36(1)(iii) on the ground that the interest bearing funds had been diverted for the purpose of making loans and advances to the sister concerns or related parties - AO was of the opinion that the appellant company had diverted the interest bearing funds for the purpose of advancing interest free loans to the promoters and directors or related parties, therefore, the AO had resorted to the proportionate disallowance of interest u/s 36(1)(iii) - HELD THAT:- We find from material on record that the interest free funds available with the appellant company as on 31.03.2012 stood at Rs.55,08,18,101/- as against the interest free loans made to related parties at Rs.24,34,86,276/-. Therefore, the presumption has to be drawn that the interest free loans were made out of the interest free funds in terms of the law laid down in the case of CIT vs. Prem Heavy Engg. Works (P.) Ltd. [ 2005 (4) TMI 32 - ALLAHABAD HIGH COURT] and case of CIT vs. Tin Box Co. [ 2002 (11) TMI 75 - DELHI HIGH COURT] - Thus, once the presumption is drawn that the appellant made interest free loans to the related parties, no disallowance of interest u/s 36(1)(iii) is warranted. We direct the Assessing Officer to delete the addition made u/s 36(1)(iii) of the Act. Accordingly, the grounds of appeal no.2 and 3 filed by the appellant stand allowed. Exclusion of a sum shown in the Profit Loss Account as part of sales, offered to tax, on the ground that this income does not belong to the appellant - HELD THAT:- Keeping in view the principle that no income can be taxed, even if the income was offered to tax by mistake, the additional ground of appeal is admitted. However, we remand this additional ground of appeal to the file of the Assessing Officer with the direction that the same may be deleted in the hands of the appellant on due verification, it is found that the same income was offered to tax in the hands of Mr. Kruti Jain and income had not accrued to the appellant. Thus, the additional ground of appeal filed by the assessee stands partly allowed. Addition on account of difference in valuation of closing stock - HELD THAT:- The value of advance given for purchase of land was never claimed as deduction. There is no bar under law to correct the state of affairs to real picture. The Hon ble Supreme Court in the case of CIT vs. British Paints India Ltd. [ 1990 (12) TMI 2 - SUPREME COURT] held that there is no estoppel on the part of the Assessing Officer to follow the method in the earlier years and further held that it is not only the right but duty of the Assessing Officer to consider whether or not books of account disclosed true state of accounts and correct income can be deduced therefrom. Therefore, the action of the Assessing Officer by bringing to tax the amount by altering the valuation of the closing stock alone is against the settled principle of law and accounting principles. We are of the considered opinion that there is neither suppression of income nor distortion of chargeable taxable income for the year under consideration on account of omission to include the value of advance given to purchase of land as a part of closing inventory for the reason stated above. We reverse the findings of the lower authorities on this issue and direct the AO to delete the addition on account of alleged difference valuation of closing stock - Decided in favour of assessee. 2022 (10) TMI 24 Levy of penalty u/s. 271B - assessee has failed to get his books audited and furnish Audit Report u/s. 44AB - Scope of words may and shall - HELD THAT:- Parliament has used the words may and not shall , thereby making their intention clear in as much as that levy of penalty is discretionary and not automatic. The said conclusion is further justified by Section 273B of the Act namely penalty not to be imposed in certain cases . A careful reading of Section 273B encompasses that certain penalties shall be imposed in cases where reasonable cause is successfully pleaded. It is seen that penalty imposable u/s 271B is also included therein. By the said provisions, the Parliament has unambiguously made it clear that no penalty shall be imposed, if the assessee proves that there was a reasonable cause for the said failure . As noticed, if the statutory provision shows that the word shall has been used in Section 271B, then the imposition of penalty would have been mandatory. Section 271B as extracted above further throws light on the legislative intent as it specifically provides that no penalty shall be imposed if the assessee proves that there was reasonable cause for the said failure . Jurisdictional High Court in the case of Sachinam Trust . [ 2009 (3) TMI 186 - HIGH COURT OF GUJARAT] also held that the appropriate expression to be considered for deciding the applicability of the provisions of section 44AB would be the term 'gross receipts', the assessee, carrying on the business of financing, bona fidely believed that gross receipts of interest, and not gross amount of advances, would constitute the basis for ascertaining the limit of Rs. 40 lakhs so as to attract section 44AB, the assessee could be said to have a reasonable cause for not getting its accounts audited under section 44AB, and as such no penalty could be imposed on the assessee. In the facts of the present case, it is seen that the explanations offered by the assessee have been ignored by the Assessing Officer as well as Ld. CIT(A) on the ground that the Guidance Note issued by the ICAI is not binding on the Income Tax Authorities whereas the Hon ble Supreme Court and Co-ordinate Bench of the Tribunal recognizes the same and applicable in the case of the assessee. We have no hesitation in deleting the penalty levied u/s. 271B of the Act. - Decided in favour of assessee. 2022 (10) TMI 23 Assessment u/s 153A - deduction claimed u/s 80IA(4) - HELD THAT:- Delhi High Court in the case of Pr. CIT v. Jaypee financial services Ltd [ 2021 (2) TMI 1186 - DELHI HIGH COURT] held that where AO during the course of post search proceedings under Section 153A against assessee-share trader found certain evidences showing client code modification done by assessee which were not for genuine reasons and, accordingly, made addition on account of such client code modification, since impugned addition was not made by AO based on any incriminating material found during search against assessee and assessment was not pending on date of search, impugned addition was unjustified and same was to be deleted. The Department has not been able to produce any material to suggest / substantiate that the assessment order was passed on the basis of any incriminating material found during the course of search. In the instant case, we observe that from the facts placed on record, there was no incriminating material found during the course of search on the basis of which deduction claimed under Section 80IA(4) was disallowed by the Ld. Assessing Officer and also confirmed by Ld. CIT(Appeals). In view of well settled proposition of law that completed assessment can be interfered by the Ao while making assessment u/s 153A only on the basis of some incriminating material unearthed during the course of search documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made in the course of original assessment, we are of the considered view that in the instant facts, the Ld. CIT(A) has erred in facts and in law in upholding the additions - Decided in favour of assessee. 2022 (10) TMI 22 Mismatch of turnover between the one reported in Form 26AS with the one disclosed by the assessee in the audited profit loss account - HELD THAT:- We are of the considered view that the alleged addition was wrongly made by ld. AO on the basis of some arithmetical mistakes made while examining the turnover details of the assessee and ld. AO failed to establish that the appellant has actually received the said sum over and above the turnover disclosed in the books of account. Thus, no interference is called for in the finding of ld. CIT(A) and ground no. 1 raised by the Revenue is dismissed. Addition invoking the provisions of Section 41(1) - substantial increase in the capital in a year due to cessation of liability - HELD THAT:- The assessee being the partner in the firm can withdraw the sum from the partnership firm if needed. Such amount withdrawn from the partnership firm of which genuineness is not in doubt can be utilized by the assessee for any of its purpose including the one for business. The assessee has never claimed the alleged amount as any deduction or allowance against the revenue during the year or in the past. The assessee still remains the partner in the partnership firm M/s. Baba Baidyanath Constructions which is regularly filing the income tax return and the copies of the same for AY 2013-14, 2015-16 are placed in the paper book. The said adjustment of transferring the loan into the capital is between the assessee and the partnership firm. Had the assessee treated it as a part of the capital in the preceding year when the amount was actually withdrawn from the partnership firm, the present situation would not have arrived. We are of the considered view that ld. AO was not justified in invoking the provisions of Section 41(1) of the Act on the alleged transaction and thus, we fail to find any infirmity in the finding of CIT(A) deleting the said addition. Thus, ground no. 2 raised by the Revenue stands dismissed. Addition invoking the provisions of Section 68 - HELD THAT:- We find that the assessee being a partner of M/s. Baba Baidyanath Constructions which is regularly filing income tax return, the assessee in order to procure contracts in the business in his individual name withdrew the sum from the partnership firm and utilized the same showing it as its own capital. We fail to find any merit in the finding of ld. AO invoking provisions of Section 68 even after accepting that the assessee being a partner in the said firm, has withdrawn the amount from the capital account of the firm and utilized it as a capital in its own business and explained the source of the alleged sum in all aspects of identity, genuineness and creditworthiness. Under these facts, there remains no possibility to invoke the provisions of Section 68 - CIT(A) has rightly appreciated the facts and deleted the addition and thus, the finding of CIT(A) do not call for any interference. Revenue challenging the addition is also dismissed. 2022 (10) TMI 21 Revision u/s 263 - As per CIT-A assessee has diverted interest-bearing fund to non-commercial purposes without charging any interest thereon - HELD THAT:- There was no question with respect to the diversion of interest-bearing loan for noncommercial purposes. Thus, in the absence of any query, assessment order can be held as erroneous insofar prejudicial to the interest of revenue. It is also significant to note that, the assessee before us is a partnership firm and whatever capital is owned by the partnership firm belongs to the partners on which the firm generally bears the interest expenses. Thus, we are of the view that generally the partnership firm does not have any interest free fund with it. Therefore, it appears to us that the assessee cannot be given the benefit that it (the assessee) has given advances out of its own interest free funds and reserves. Thus to our understanding, this aspect as pointed out by the learned PCIT was supposed to be verified by the AO during the assessment proceedings. But the same has not been done by the AO, accordingly we do not find any infirmity in the observation of the learned PCIT. Differences in the import purchases, payment of custom duty and ITS data/CBES - Assessee before the learned PCIT has categorically submitted that the information provided in ITS data/CBES data was not pertaining to the year under consideration and therefore based on that no adverse inference can be drawn against the assessee. The submission of the assessee has not been controverted by the learned PCIT. From the finding of the Ld. PCIT, reproduced above, we find that there was no tangible material referred by the PCIT highlighting the differences between the value of purchases and the custom duty as discussed above. Based on this we hold that the learned PCIT has assumed the jurisdiction on this issue on wrong assumption of facts. Thus on this count, the assessment order framed under section 143(3) of the Act cannot be categorized as erroneous insofar prejudicial to the interest of revenue. No verification of the contribution made by the assessee towards the Provident fund - There was no query raised by the AO during the assessment proceedings with respect to the delay in the payment of the contribution towards the PF which is subject to the conditions of section 36(1)(v)/36(1)(va) read with section 43B of the Act. Thus, on this count as well, we are of the view that the order framed under section 143(3) of the Act suffers from infirmity so far the necessary facts were not verified by the AO during the assessment proceedings. In view of the above, after considering the facts in totality we confirm the order of the learned PCIT in part as discussed above. Hence, the ground of appeal of the assessee is allowed in part. 2022 (10) TMI 20 Unexplained investment u/s 69 - No link between the withdrawals and the deposits of cash in bank - assessee submitted that he was acting as intermediary i.e. broker in land trading nearby area of his native place and claimed that there was an opening brought forward cash balance - AO adopted the peak credit method and made and addition - HELD THAT:- No force in the argument of the assessee for the reason that the assessee having not filed the Return of Income for the present Assessment Year 2011-12. The assessee had only furnished cash book for the Assessment Years 2010-11 2011-12 and no Income Tax Return was filed by the assessee for AY 2009-10 2010-11 to justify the cash balance is brought forward for the earlier years. From the Return of Income filed for the Assessment Year 2011-12 it is seen that the assessee has shown only income from other sources and no other income. The assessee could not establish the cash withdrawals to crack the real estate deal. Thus the assessee has not established the entire cash deposit in Nutan Nagrik Sahkari Bank Ltd.. Assessing Officer seems to have taken a reasonable approach and considering the circumstances of the case made a least peak credit as unexplained investment u/s 69 of the Act which does not require any interference in the absence of material evidence before any of the Lower Authorities. In the above circumstances, the grounds of appeal raised by the assessee are hereby rejected and the appeal filed by the assessee is hereby dismissed. 2022 (10) TMI 3 Validity of reopening of assessment - Re-opening notice u/s 148A(d) - notices have been issued, after considering the objections raised by the petitioner. If the petitioner has any grievance on merits thereafter, the same has to be agitated before the Assessing Officer in the re-assessment proceedings. HELD THAT:- Under the circumstances, the High Court has rightly dismissed the writ petition. No interference of this Court is called for. The present Special Leave Petition stands dismissed. Pending applications stand disposed of. 2022 (10) TMI 2 Reopening of assessment u/s 147 - validity of order passed u/s 148A(d) - violation of principles of natural justice or in contrary to any provision of law or is a non-speaking order or there is any procedural irregularity in passing the aforesaid impugned order - HELD THAT:- AO has passed a detailed order after issuing formal notice u/s 148A(b) of the Act. Thereafter petitioner was given opportunity to file response to the same. Petitioner had filed response to the same which was taken into consideration by the respondent assessing officer but petitioner is not satisfied with the reasoning given and conclusion arrived at by the respondent assessing officer in rejecting the response of the petitioner to the notice u/s 148A(b) of the Act. In view of discussion made above and in addition that mere passing an order under Section 148A(d) of the Act is not an assessment order or demand itself and petitioner will still have ample opportunity and scope in the proceeding after issuance of notice under Section 148 to make out a case of dropping of Section 147 proceeding of the Act. We are not inclined to entertain this writ petition and accordingly the writ petition as dismissed. 2022 (10) TMI 1 Deduction u/s 10B - whether or not the benefit of exemption u/s 10B can be granted to an assessee, registered under STPI as 100% EOU in respect of profits derived from business of development of software and sale to the HSBC subsidiary companies? - HELD THAT:- It is undisputed fact that both the units of the assessee company are registered under STPI as 100% EOU. There is also no dispute that all other necessary conditions precedent for availing benefit u/s 10B were complied with by the assessee company. The dispute is only with regard to whether a mere registration with STPI as 100% EOU is sufficient enough for claiming deduction u/s 10B of the Act. We find that this issue was examined by the CBDT and the CBDT issued a clarification dated 09.03.2009 as corrected by Corrigendum No.178 dated 08.05.2009, to clarify that the Board of Approval to grant the approval u/s 14 of Industrial Development and Regulations Act, 1951 has been delegated to Development Commissioner and, therefore, the same shall be considered valid for the purpose of exemption u/s 10B. Approvals issued by STPI directors having Board of approvals satisfied the conditions of approval as envisaged under Explanation 2(iv) of section 10B of the Act. The decision of the Hon ble Delhi High Court in the case of CIT vs. Regency Creations Ltd. [ 2012 (9) TMI 627 - DELHI HIGH COURT] was held to be incorrect by the Ahmedabad Bench of the Tribunal in the case of M/s Hitech Infosoft [ 2018 (10) TMI 1099 - ITAT AHMEDABAD] and the recently the Hon ble Calcutta High Court in the case of PCIT vs. Wizard Enterprises (P.) Ltd [ 2022 (1) TMI 794 - CALCUTTA HIGH COURT] after referring to the CBDT s clarification dated 09.03.2009 had upheld the exemption u/s 10B even in the absence of approval from Board of Approvals u/s 14 of Industrial Development and Regulations Act, 1951. In the above circumstances, we are of the considered opinion that the assessee is entitled for deduction u/s 10B of the Act, on registration with STPI as 100% EOU. Accordingly, the order of the ld. CIT(A) on this issue is reversed. Deduction u/s 10A though no such claim was made in the return of income claiming exemption under the provisions of section 80IA(10) - HELD THAT:- The provisions of section 80IA(8) and 80IA(10) have been bodily lifted and incorporated into the body of provisions of section 10B(7) of the Act. The provisions of section 80IA(8) and 80IA(10) have application only in respect of domestic transactions involving transfer of goods and services of eligible business for transfer of any business carried on by the assessee and vice-versa. When the provisions of a particular section of the same Statute are incorporated in the provisions of another section, all that we have to do is to read the provisions plainly and apply the interpretation, if any ambiguity exists. In the present case, as stated supra, the provisions of section 80IA(8) and 80IA(10) have application only in respect of domestic transactions and the language of the provisions of section 80IA(8) and 80IA(10) is very clear and offer no ambiguity as to scope of operating of said provisions, therefore, the provisions of section 10B(7) of the Act have application only in respect of domestic transactions. In the present case, admittedly there is no domestic transactions attracting the provisions of section 80IA(8) and 80IA(10). We find that the AO had not brought on record any material to demonstrate that the assessee company had indulged in an arrangement with its foreign AE to produce the assessee more profits than ordinarily, what profit the assessee might have earned arising out of such business, and the AO had not indicated any material evidence to disclose any such arrangement between the assessee company and its AE. In the case of CIT vs. HP Global Soft Ltd. [ 2012 (4) TMI 397 - KARNATAKA HIGH COURT] held that in the absence of any material indicating existence of an arrangement, the AO was not justified in invoking the provisions of section 80IA(9) analogous to provisions of sections 80IA(8) and 80IA(10). Therefore, upshot of the above discussion is that in the absence of any material demonstrating the existence of any arrangement between the assessee and its foreign AE to produce the assessee more profits than ordinarily, what profit the assessee might have expected to arise out of such business and resort to provisions of section 10B(7) of the Act cannot be made to restrict the amount of deduction u/s 10B(7) and also provisions of section 10B have no application in respect of international transactions entered into between the assessee and its foreign AE. In the present case, the AO had not brought any material indicating the existence of an arrangement between the assessee company and its foreign AE, as a result of which more profits than ordinarily have been produced to the assessee company and therefore, the provisions of section 10B(7) r.w.s. 80IA have no application to the present case - CIT(A) has rightly deleted the addition made by the Assessing Officer, we do not find any illegality or perversity in the findings of CIT(A). Accordingly, the appeal filed by the Revenue stands dismissed. Benami Property 2022 (10) TMI 19 Constitutional validity - Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - Benami property transaction - Scope of Amendment Act of 2016 Punishment of imprisonment for offence - HELD THAT:- Supreme Court in M/S. GANPATI DEALCOM PVT. LTD. [ 2022 (8) TMI 1047 - SUPREME COURT] observed that once Sections 3 and 5 of the Benami Property Act were declared as unconstitutional, it would mean that the Amendment Act of 2016 would in effect create new provisions and new offences as the offences under Section 3(1) for the transactions entered into between 05.09.1988 (when the original Act received the presidential assent) and 25.10.2016 (when the Amendment Act of 2016 was notified), the law cannot retroactively invigorate a still-born criminal offence. Thereafter, it was categorically held that the Amendment Act of 2016 containing criminal provisions would be applicable only prospectively. Criminal provisions under the Benami Property Act were arbitrary and incapable of application, the law through the 2016 amendment could not retroactively apply for confiscation of those transactions entered into between 05.09.1988 to 25.10.2016 as the same would amount to punitive punishment. It has declared that the Amendment Act of 2016 is not merely procedural but prescribes substantive provisions. Therefore, concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to coming into force of the 2016 Amendment Act i.e., 25.10.2016. As a consequence, all such transactions or confiscation proceedings shall stand quashed. Supreme Court has also clarified that in rem forfeiture provision under Section 5 of the Amendment Act of 2016 being punitive in nature can only be applied prospectively and not retroactively. In view of above, impugned order dated 27.04.2022 passed by respondent No.1 is hereby set aside. Customs 2022 (10) TMI 18 Onus and power of custodian - validity of auction of goods - seized goods - LED bulbs - cosmetic items - failure to provide the BIS certificate - goods not fit for Human consumption - HELD THAT:- The Principal Commissioner/Commissioner may withdraw any lot from auction or tender at any time or cancel the same at any stage, prior to the delivery of the goods. Furthermore, Permission/NOC is required to be taken by the buyer from the concerned authorities, as specific for respective items. The respondent No.1 or the custodian in the present case were unable to furnish the required documents for the delivery of the disputed items. Though the custodian can discharge/clear the uncleared items, it shall be permitted only by acquiring the permission of a proper authority - In the present case, despite not obtaining the BIS certificate and NOC from the Assistant Drug Controller declaring the goods fit for Human consumption and not hazardous for human health, the custodian moved ahead by auctioning the goods that were prohibited for sale making the entire process in contravention to The Customs Act, 1962. Appeal allowed - decided in favor of appellant revenue. 2022 (10) TMI 17 Condonation of delay of 351 days in filing the instant appeal - HELD THAT:- The reasons assigned in the affidavit filed in support of the application are satisfying - the delay in filing the instant appeal is condoned - application allowed. 2022 (10) TMI 16 Misdeclaration of export goods or not - 141.74 Carat of cut and polished diamonds - whether declarations made in the Shipping Bill were truthful or not - contravention of provisions of Section 50(3) of the Customs Act, 1962 or not - HELD THAT:- There is absolutely no explanation as to why Respondent No.2 did not even consider it necessary to reply to Petitioner s request to return the diamonds, though Respondents seem to have no problem with those diamonds. In Paragraph 33 of the Reply, it is stated that Section 118(b) of the Customs Act, 1962 permits them to confiscate the balance 110.55 Carat also because they were all in the same package. If that was the position, then there is no reason why those diamonds were not included in the show-cause notice as proposed to be confiscated. Therefore, it is nothing but an afterthought to get over the allegation of inaction on the part of Respondent No.2. Mr. Mishra, in fairness, states that since those 110.55 Carat diamonds have not even referred to in the show-cause notice as liable to confiscation either under the provisions of Section 118(b) of the Customs Act, 1962 or under any other provision, prima facie, appeared to be returnable to Petitioner. Petition is disposed with the direction to Respondent No.2 to consider Petitioner s letter dated 14th July 2022, copy whereof is annexed to Petition and marked as Exhibit B , within two weeks from today. 2022 (10) TMI 15 Reduction in the quantum of redemption fine and penalty - mis-declaration of description of imported goods - rejection of declared value - redetermination of value - confiscation of imported goods - HELD THAT:- In this case, the invoice value was correctly rejected by the Adjudicating Authority for the reason the goods which were imported were completely different from those which were declared. The price declared in the invoice was for LED TVs whereas what were imported were smart LED TVs. Further, what was declared was 740 pieces and what was actually imported was 742 pieces. During investigation, the appellant has submitted five letters to the Department accepting the re-determination of the duty and agreeing to pay the differential duty along with applicable fine and penalty on the re-determined value. It further waived the issuance of the show cause notice. Based on the information and evidence produced in the form of files before the appellant by the officers, the appellant has voluntarily suggested/accepted that the price of smart LED TVs imported by it must be U.S. $ 163 per unit - It is not open for the appellant to question that the price having accepted the same and further having undertaken to pay the differential duty accordingly. Therefore, even the reduction of the assessable value to U.S. $ 147.5 by the Joint Commissioner does not appear to be correct. Nevertheless, this reduction has not been assailed by the Revenue and is said to be based on another value found in another case of M/s Mittal Impex - the redetermination of the assessable value and consequently the determination of the duty liability by the Adjudicating Authority as upheld by the Commissioner (Appeals) in the impugned order is correct and calls for no interference. Confiscation of the goods under section 111 (m) of the Customs Act - HELD THAT:- Any goods which do not correspond in respect of value or in any other particular with the entry made under the Customs Act are liable for confiscation under this section. It is undisputed that both the nature of the goods imported and the quantity of the goods imported did not correspond to the declaration made in this case. Further, the value declared was also much lower and was, even according to the documents produced by the appellant, not the price of smart LED TVs which were imported - there are no infirmity in the confiscation of the imported goods under section 111 (m) or in giving the option of redemption under section 125 by the Original Authority. While fine of Rs. 10,00,000/- was imposed by the Original Authority it was reduced to Rs. 5,00,000/- by the Commissioner (Appeals) in the impugned order. This reduction of fine has not been assailed by the Revenue. We, therefore, find no infirmity in both the confiscation of the goods and also in the imposition of redemption fine of Rs. 5,00,000/-. The specific finding of the Commissioner (Appeals) was that the appellant had, on his own, sought recall of the Bill of Entry and, therefore, had no malafide intention. There is no appeal by the Revenue against this finding. Having found that the appellant had no intention, the Commissioner (Appeals) has still proceed to confirmed a reduced penalty under section 114AA upon the appellant - It is found that this cannot be sustained because once the intention is lacking, no penalty can be imposed upon the appellant under section 114AA. The appeal by the appellant is partly allowed to the extent that the penalty imposed under section 114AA is set aside. The remaining part of the impugned order is, however, upheld - Appeal allowed in part. 2022 (10) TMI 14 Classification of goods - determination of the appropriate rate of duty - used mild steel (MS) plates imported upon procurement of these after demolition of six petrochemical tanks in the United Kingdom by M/s GK Middle East FZC, Ajman - Valuation of Customs Duty - HELD THAT:- On scrutinising heading 7208 of First Schedule to Customs Tariff Act, 1975, within which the impugned order has placed the goods imported by the appellant, it is seen that the description, Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated , has been sub-classified at the eight digit level for one item and, for all other items, as seven enumerations in coils and four enumerations for those not in coils , at six digit level and the adopted item lies with the first of these but, nonetheless, comprising flat-rolled products hot rolled in coils without any explanation for concluding that the plates were presented as coils. Clearly, the classification adopted in the impugned order does not relate to the description of the product as imported and presented. Not only is the revised classification inappropriate but there is also no reason for the classification sought for in the bills of entry to be substituted in view of its appropriateness; the impugned goods have industrial significance only as waste and scrap which is the feedstock for melting in furnaces - the eligibility for the benefit of the exemption notification as well as not being subject to the restriction prescribed in the Foreign Trade Policy on the import of used goods is established. Appeal allowed. 2022 (10) TMI 13 Refund of SAD - denial of refund of SAD in respect of sizes of aluminum foil which were not appearing in the import bills of entry on which SAD was paid - HELD THAT:- The appellant has not been able to satisfy why the size of aluminum foil mentioned in domestic sale in respect of which refund of SAD has been claimed did not figure in their import details. In absence of any evidence to that effect, the appellant has failed to establish that goods on which SAD refund has been claimed are the same goods on which SAD was paid. There is no merit in the appeal. The same is dismissed. Insolvency & Bankruptcy 2022 (10) TMI 12 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- It is abundantly clear that the Corporate Debtor had acknowledged its obligation under OTS for an amount of Rs. 2.50 Crore as is evident from the order of the Hon ble Division Bench in INTERNATIONAL ASSET RECONSTRUCTION COMPANY PVT. LTD. VERSUS M/S ECLAT INDUSTRIES LTD., THE STATE OF BIHAR THROUGH ITS CHIEF SECRETARY, DEPARTMENT OF INDUSTRIES, INDUSTRIES DEVELOPMENT COMMISSIONER, DIRECTOR, OFFICE OF THE DIRECTORATE OF TECHNICAL DEVELOPMENT DEPARTMENT OF INDUSTRIES, BANK OF BARODA (OPERATING AGENCY) THROUGH ITS CHIEF MANAGER, CANARA BANK THROUGH ITS CHIEF MANAGER, PATNA [ 2017 (11) TMI 2004 - PATNA HIGH COURT] . It looks that no further appeal was filed by the Corporate Debtor challenging the decision. The contention of the Corporate Debtor is found to be incorrect, in view of the factual position stated hereinabove and which is supported by number of documents. It is a clear case, where, despite opportunities given to the Corporate Debtor to pay the balance amount of OTS, the Corporate Debtor failed to pay the balance amount and the OTS was revoked by the Bank, as is evident from the letter dated 23.07.2014. It is also clear from the documents shown above, the Corporate Debtor was merely seeking extension, one after another and this could not continue for all times to come as the Financial Creditor was required to invoke its remedy under law within the period of limitation and which clearly happened in the present case. There are no hesitation to hold that the present application which was filed before this Adjudicating Authority on 12.12.2019 is well within the period of limitation as is shown from the facts, dates and documents above, the limitation period from time to time stood extended. The present petition made by the Financial Creditor is complete in all respects as required by law. The Petition establishes that the Corporate Debtor is in default of a debt due and payable and that the default is more than the minimum amount stipulated under section 4 (1) of the Code, stipulated at the relevant point of time. Application admitted - moratorium declared. PMLA 2022 (10) TMI 11 Freezing of proceeds of crime - reasons to believe recorded for retention of the property under Section 20 of the PMLA - HELD THAT:- The appellants are entitled to an opportunity before the learned Single Judge and to file the requisite documents along with affidavit-in-opposition. The order of the learned Single Judge is interlocutory in nature, therefore, the conclusions drawn therein and findings recorded therein are only tentative in nature. The appeal is disposed off by setting aside the last sentence of paragraph 21 of the order of the learned Single Judge which states WPA 17454 of 2022 is disposed of in terms of the above and permit the appellants to file affidavit-in-opposition within two working weeks from today before the learned Single Judge in WPA 17454 of 2022 and thereafter, affidavit-in-reply be filed within two working weeks - appeal disposed off. 2022 (10) TMI 10 Money Laundering - proceeds of crime - reverse burden on the suspect - offence under section 3 punishable under Section 4 of Prevention of Money Laundering Act, 2002 - HELD THAT:- Money laundering is the process of conversion of such proceeds of crime, dirty money to make it appear as legitimate money. As the Act deals with socio-economic offence, it deviates from the beaten track of the common law on the burden of proof. In fact Section 24 of the Act casts a reverse burden on the suspect. In any proceeding relating to the proceeds of crime under the Act, the Authority or Court shall presume that such proceeds of crime are involved in money laundering unless the person charged with the offence of money laundering under Section 3 proves to the contrary. The offence of money laundering is threefold including the stages of placement, whereby the criminals place the proceeds of crime to the general and genuine financial system, layering, whereby such proceeds of crime are spread into various transactions within the financial system and finally, integration, where the criminals avail the benefits of crime as untainted money. There are serious allegation of proceeds of crime and transferring the money to one company to another, the case is made out against the petitioners. There is no illegality in the orders by which the petitioners have been summoned - Petition dismissed. Service Tax 2022 (10) TMI 9 Taxability - amounts expended for meeting operational costs of overseas offices - payments received for arranging and operating of outbound tour services - period up to March 2012 - scope of the expanded definition of section 65(115) of Finance Act, 1994 - HELD THAT:- The change in the statutory provision has added elements to the activity that makes for being tour operator and, in both the unamended and amended version, entirety of performance in India is the criterion for subjecting the consideration to tax. That is the only conclusion that can be arrived at from perusal of Export of Service Rules, 2005 which categorizes the scheme of export in terms of the enumeration of taxable service in section 65(105) of Finance Act, 1994. Insofar as service taxable under section 65(105)(n) of Finance Act, 1994 is concerned, it did not appear to have dawned on the adjudicating authority that Export of Service Rules, 2005 does not base the exemption on place of the customer. The assumption that payment, if any, was received in local currency from Indian tourists is also not evidenced by any details in the show cause notice or subsequent ascertainment in the impugned order which has, but for the tabular presentation of taxable value/tax and the final confirmation of demand, not referred to the service rendered or disaggregation of value of services ineligible to be considered as exports. Appeal allowed - decided in favor of assessee. Central Excise 2022 (10) TMI 7 CENVAT Credit - capital goods - Welding Electrodes - case of appellant is that welding electrodes are used for fabricating Steel Formers (size: Diameter 1100mm Height 2350mm with 16mm rods as Spiders inside) which are consumed in its induction furnace - levy of penalty - HELD THAT:- In view of the decision of the Hon ble Calcutta High Court in CCE., KOLKATA-IV VERSUS HINDUSTAN ENGINEERING INDUSTRIES LTD. [ 2010 (12) TMI 393 - CALCUTTA HIGH COURT] , which is the jurisdictional High Court of this Bench, and particularly in the absence of any contrary decision holding the field, the issue regarding admissibility of Cenvat Credit on Welding Electrodes has to be decided in favour of the appellant, as the same being no longer res integra. Levy of penalty - HELD THAT:- In light of the undisputed fact that the Appellant was regularly filing the periodic statutory Returns disclosing therein the factum of availment of credit as impugned herein, to the satisfaction of the jurisdictional Authorities, the demand in the present case is barred by limitation and therefore, the penalty on the Appellant is not imposable under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Act. Also, the Show Cause Notice in the present case having been issued purely on the basis of the AG Audit objection, without any independent investigation, is not sustainable in law. Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2022 (10) TMI 6 Reassessment of tax - liability towards tax, interest and penalty - business of manufacturing and selling pan masala - Section 9 (2) of the Central Sales Tax Act, 1956 read with Section 22 (1) of the Chhattisgarh Value Added Tax, 2005. Case of petitioner is that without there being an order of assessment, the respondent authority erred in passing an order of reassessment under Section 22 (1) of the Act of 2005. HELD THAT:- The provisions of Section 22 of the Act of 2005 would show that period prescribe for exercising jurisdiction by the Commissioner is to start from the date of order of assessment or from the date of judgment or order of Court or Tribunal. The language used in Section 22 of the Act of 2005 is plain and unambiguous that the Commissioner can exercise jurisdiction under Section 21 (1) only when there is an order of assessment and therefore, the statute provides different period of limitation. The Court has further held that in order to invoke Section 22 (1) of the Act of 2005, there must be an order of assessment by the Assessing Officer in contradistinction to Section 22 (1) of the Act of 2005, which is a deemed assessment. After recording that held, thus the jurisdictional fact and condition precedent for invoking provisions of Section 22 (1) of the Act of 2005 i.e. the order of assessment, was not in existence on the date of issuing notice for reassessment under Section 22 (1) of the Act of 2005. Therefore, the Assessing Officer was jurisdiction-less to initiate reassessment proceedings under Section 22 (1) of the Act of 2005 and the order of reassessment ultimately passed is without jurisdiction and without authority of law and de hors the provisions contained in Section 22 (1) of the Act of 2005, as such, it deserves to be quashed. It is clear that there was no order of assessment, which is a condition precedent to invoke jurisdiction under Section 22 (1) of the Act of 2005 in the case of present petitioner also. In absence of there being any order of assessment, respondent No.4 Commercial Tax Officer, Rajnandgaon was not having any jurisdiction to pass the orders of reassessment under Section 22 (1) of the Act of 2005 and therefore, the same are liable to be quashed - petition allowed. 2022 (10) TMI 5 Classification of goods - rate of tax - Aviation Turbine Fuel (ATF) - eligibility for concessional rate of tax - Section 84 of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- The petitioner will appear before the Assessing Officer on Thursday, the 29th of September, 2022, without awaiting any further notice in this regard, along with a copy of reply dated 29.02.2012 and other materials, if any, in support of its claim of concessional rate of tax. The petitioner should be heard in full and a speaking order passed in this regard determining the appropriate rate of tax on ATF within a period of 8 weeks from date of personal hearing - Petition allowed. Indian Laws 2022 (10) TMI 8 Application for appointment on compassionate ground - application rejected stating that due to veracity of vacancies request for compassionate appointment could not be acceded - HELD THAT:- The fact remains that the employee died in the year 1994 and the wife of the employee was provided with an appointment on compassionate ground. She served and subsequently, she also died. Thereafter, the writ petitioner submitted an application and withdrew the same and re-submitted after a lapse of about two years. Thereafter, the brother of the writ petitioner also submitted an application seeking compassionate appointment after rejection of the application submitted by the petitioner. Pertinently, the brother of the writ petitioner originally submitted no objection to provide appointment to the writ petitioner. Subsequently, the petitioner filed an affidavit of no objection to provide employment to his brother. All contradictory facts and circumstances reveals that the petitioner is not eligible for the compassionate appointment, more over, several years lapsed from the date of death of the deceased employee and at this length of time seeking compassionate appointment cannot be extended to the writ petitioner. Writ petition dismissed. 2022 (10) TMI 4 Dishonor of Cheque - existence of legally enforceable debt or not - burden to prove - rebuttal of presumption - Section 139 of the Negotiable Instrument Act - HELD THAT:- Section 139 of the Negotiable Instrument Act raises a rebuttable presumption that the holder of a cheque received the cheque for the discharge of any debt or other liability. Section 139 speaks of presumption of law. It is needless to say that such presumption is rebuttable and onus lies on the drawer to rebut it by adducing cogent evidence to the contrary - It is held by the Hon ble Supreme Court in BIR SINGH VERSUS MUKESH KUMAR [ 2019 (2) TMI 547 - SUPREME COURT ] that the presumption under Section 139 of the Negotiable Instruments Act is not in conflict with human right of presumption of innocence of accused which prosecution is required to dislodge by proving its case against the accused beyond reasonable doubt. Thus primary burden is on the prosecution to prove the ingredients of offence under Section 138 of the Negotiable Instrument Act beyond reasonable doubt. Only when the complainant discharges his/her burden, onus shifts upon the accused to rebut the presumption available in favour of the complainant under Section 138 of the Negotiable Instruments Act - The witness on behalf of the complainant unequivocally stated that the said name of Soumen is appearing in Exhibit-2 which was issued is not related to Chandra Gold. At the same time, PW1 stated in his cross examination that the signature of the accused/petitioner appears on the left side bottom of Exhibit-2. During cross examination of the accused three numbers of bills were confronted on behalf of the complainant with whom he admitted the signature on the said bills. This Court is not unmindful to note the provision contained in Section 20 of the Negotiable Instruments Act. However, when the complainant himself comes up with a document to establish the existing debt or liability, the question of raising presumption under Section 139 does not arise because in such a case the complainant does not depend upon the statutory presumption - where the complainant comes up with a document claiming to be executed by the accused confirming his existing debt or liability, complainant is under obligation to prove the said document beyond any reasonable doubt. When execution of the said document is disputed by the accused and the accused admitted his signature on some other documents produced by the complainant during his cross examination, court is required to obtain expert opinion comparing the said two documents for just decision of the case. The complaint cannot raise any objection pleading, that statutory presumption under Section 139 is available in favour of the holder of the cheque. The instant revision is allowed.
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