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TMI Tax Updates - e-Newsletter
November 26, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Highlights / Catch Notes
GST
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Provisions restricting input tax credit on goods/services for construction upheld.
Writ petition challenging validity of Section 17(5)(d) of CGST Act, 2017 and Section 17(5)(d) of TNGST Act, 2017 dismissed. Supreme Court recently upheld validity of said provisions in Chief Commissioner of Central Goods and Service Tax and Others Vs. M/s.Safari Retreats Private Limited. High Court rejected challenge against provisions following Supreme Court's decision declaring law.
Income Tax
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Penalty on concealment deleted due to lack of evidence of deliberate underestimation.
Penalty levied u/s 271(1)(c) for concealment of income was challenged. The Assessing Officer (AO) alleged that the assessee understated turnover and concealed income based on the difference between the original return and the revised return filed pursuant to a notice u/s 148 after a survey. However, the AO failed to record the original returned income and the revised returned income in the assessment order or penalty order, making it impossible to determine the concealed amount. The AO merely made a bald statement about understated turnover without substantiating the deliberate underestimation of income. Mere projected financials found during the survey and recorded statements cannot justify the penalty unless the assessee deliberately suppressed income. The Appellate Tribunal held that since the AO failed to demonstrate deliberate underestimation of income by the assessee, the inference of concealment was unjustified. Consequently, the penalty was deleted in favor of the assessee.
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Company's expenses disallowed, but no penalty as details disclosed; Tribunal upholds disallowance under law.
Disallowance made u/s 43B regarding expenses claimed by the assessee. There was confusion about which limb penalty is to be levied. The disallowance confirmed by the Tribunal u/s 43B is not due to concealment of income by the assessee, who filed all details pertaining to the claimed expenditure. However, certain expenditure could be allowed only on actual payment, leading to disallowance u/s 43B. Regarding the addition on increase in liability, the assessee provided confirmations, and there is no doubt about their veracity. Merely because the addition has been partly confirmed by the Tribunal cannot be a reason to levy penalty. The confirmations filed by the assessee were not verified by the Commissioner of Income Tax (Appeals). Levy of penalty is not a mechanical procedure and requires checks and balances. Additions sustained by the Tribunal is not a fit case to levy penalty u/s 271(1)(c). The assessee's appeal is allowed.
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Tax Penalty Notice Defects: Grounds Must Be Clear.
Defective notice issued u/s 274 read with Section 271(1)(c) for levying penalty. The key points are: The phrases "conceal" and "furnishing of inaccurate particulars" in Section 271(1)(c) carry distinct meanings. Where penalty proceedings are initiated u/s 271(1)(c), the specific ground must be clearly spelled out to provide the assessee a proper opportunity for defense. Penalty proceedings being penal in nature, the charge must be unambiguous. The revenue cannot club both grounds of concealment and furnishing inaccurate particulars. Following judicial precedents, the Tribunal rightly held that the penalty levy u/s 271(1)(c) in the assessee's case was invalid due to the defective notice.
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Taxpayer gets relief under tax dispute resolution scheme despite pending review petition.
Benefit under Direct Tax Vivad Se Vishwas Act, 2020 was considered for a case where no appeal, writ petition, or special leave petition was pending before the appellate forum as on the cut-off date, but a review petition against dismissal of the special leave petition was pending. The court held that even though the scope of a review petition is limited, it partakes the character of pending proceedings. The CBDT circulars clarified that pendency of arbitration proceedings and miscellaneous applications would meet the requirement u/s 2(1)(j) of the Act, even if no appeal was pending. The court ruled that the review petition would also be covered under the "Vivad Se Vishwas Scheme" as the DTVSV Act provides for deviation from strict application of tax laws to achieve its purpose. The impugned order rejecting the declaration was set aside, and the department was directed to accept the revised declaration form and process it under the DTVSV Act, 2020.
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Lack of jurisdiction for AO to invoke Sec 153C without receiving material from searched party, but can reopen under Sec 148A.
The High Court held that the Assessing Officer (AO) lacked jurisdiction to initiate proceedings u/s 153C of the Income Tax Act, as the necessary threshold condition of receiving books of accounts or material from the AO of the searched person was not met. However, the AO was not precluded from initiating proceedings u/s 148A based on the information available through the insight portal, suggesting that the assessee's income had escaped assessment for the relevant assessment year. The case was covered by the Supreme Court's decision in Principal Commissioner of Income Tax v. Abhisar Buildwell (P.) Ltd., which addressed the jurisdictional condition for invoking Section 153C. Additionally, the question of whether Section 153C precludes reopening assessments u/s 147/148 based on information found during a search or requisition concerning another person was also addressed against the petitioner.
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Writ challenging assessment dismissed; assessee availed remedy of appeal, appellate authority to decide illegality contentions.
Writ petition challenging assessment order u/s 147 dismissed. Court held that once assessee has availed alternate remedy of filing appeal, appellate authority bound by jurisdictional High Court's decisions must decide appeal considering assessee's contentions on illegality of assessment order and notice u/s 148 in light of court's interpretation of Sections 151 and 151A. Entertaining writ petitions in such circumstances would require High Court to adjudicate matters pending before appellate authorities, contrary to judicial approach. Assessee directed to pursue pending appeal before appropriate appellate authority.
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Income from house property additions - ALV capped at Rs.8.39L for 2015-16 & 2016-17 based on incriminating emails; unabated years without evidence deleted.
Assessment u/s 153A - computation of income from house property. Additions proposed relate to unabated assessment years from 2013-14 onwards where no incriminating material found during search. Additions for 2013-14 and 2014-15 deleted as no incriminating evidence. For 2015-16 and 2016-17, incriminating emails found regarding commercial exploitation, hence additions upheld. Annual lettable value (ALV) capped at Rs. 8.39 lakhs based on 2016-17 as base year, 30% standard deduction allowed, net ALV of Rs. 5.87 lakhs taxable. Vatika Professional Point property never let out, additions deleted being unabated years without incriminating material. For Gurugram property, municipal value adopted as ALV instead of AO's estimate, as not commercially viable based on records. Where property not let out, ALV estimated at 5% of investment value as per judicial precedents, after standard deduction Rs. 6.65 lakhs added as income.
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Fraudulent employee mishandling led to embezzlement loss deductible u/s 28(i), not Section 37(1) expenses.
Misappropriation of funds by an employee led to the assessee claiming expenses u/s 37(1) of the Act, which were later discovered to be embezzlement. The assessee suffered a loss due to the employee's fraudulent actions. The CBDT Circular No. 35-D states that losses arising from embezzlement are allowable u/s 28(i) of the Act. The revenue contended that the claim should be u/s 28 instead of Section 37(1). The assessee offered the recovered amount of Rs. 229 lakhs to tax but had not recovered the impugned amount during the assessment year. The addition was unjustified as the debited amount, though not fulfilling Section 37(1) expenses, was related to an allowable embezzlement loss. Relying on Bombay Forgings Pvt Ltd and G.G. Dandekar Machine Works Ltd cases, the assessee was eligible for deduction due to embezzlement loss. The Appellate Tribunal ruled in favor of the assessee as the revenue failed to prove recovery during the assessment year.
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Taxpayer challenges legality of vague penalty notice - CIT(Appeals) omission allows ITAT remand for adjudication.
The assessee raised an issue before the CIT(Appeals) which was not adjudicated. The assessee can raise this unadjudicated issue before the Tribunal by way of an application u/r 27 of ITAT Rules, 1963, as per judicial precedents. The issue relates to the legality of the penalty notice issued u/s 274 read with Sections 270A/271AAB, without specifying the relevant limb. Since the CIT(Appeals) did not decide this legal issue, and the assessee raised it for the first time before the Tribunal, the file needs to be remanded to the CIT(Appeals) to consider the preliminary legal issue regarding the validity of penalty proceedings initiated based on the vague notice.
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Tax-free dividend income, interest-free funds disallowance relaxed, TDS exemption for prepaid distributors, 3G spectrum depreciation allowed.
Exempt dividend income earned by assessee. Interest-free owned funds exceeded investments in tax-free securities, disallowance u/r 8D(2)(ii) not warranted. For Rule 8D(2)(iii) disallowance, only investments yielding exempt income to be considered, recomputation directed. No adjustment for section 14A disallowance to book profits u/s 115JB, as not proposed in draft order or directed by DRP. Discount to pre-paid distributors not subject to TDS u/s 194H, no disallowance u/s 40(a)(ia). Depreciation on 3G spectrum allowed u/s 32(1)(ii). Brand royalty payment to AE remanded to TPO/AO for fresh benchmarking. Reimbursement of expenses to AE remanded for substantiation. Additional TDS credit to be granted as per law after verification. Legal terminology from Income Tax Act and Rules used.
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Property renovation costs wrongly disallowed; Revenue authorities overreached.
The assessment order was passed without verifying the allowability of the cost of improvement as per Section 55(1)(b)(2), rendering it erroneous and prejudicial to Revenue's interests. The assessee's claim for cost of improvement, comprising interior work, kitchen appliances, plywood flooring, and tiles, is allowable u/s 55(1)(b)(2) as the expenses were capital in nature, enhancing the property's value. The assessee submitted a valuation report and bank statements as evidence, which the AO examined and accepted. The CIT emphasized the need for a more in-depth inquiry, citing Explanation 2 to Section 263, but Section 263 cannot be invoked merely because the inquiry was not conducted as per the CIT's preference. The AO conducted adequate inquiries, and his acceptance of the cost of improvement was a plausible view. The revisionary proceedings u/s 263 were unjustified as the AO's order was neither erroneous nor prejudicial to Revenue's interests. Consequently, the revisionary order passed by the CIT u/s 263 is quashed, and the assessee's appeal is allowed.
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Charity trust's registration wrongly denied, court orders re-evaluation based on non-profit objects.
The Appellate Tribunal held that the Commissioner of Income Tax (Exemptions) erred in rejecting the trust's registration u/s 12AA. The trust's objects were not found to be profit-oriented, and no activity was conducted against its objects. The events organized by an individual could not be attributed to the trust, especially when no expenses were incurred, as per the Income and Expenditure statements. The Supreme Court's decision clarified that an entity advancing general public utility cannot engage in trade, commerce, or business for consideration. However, the Delhi High Court upheld the constitutional validity of the proviso to Section 2(15), applying where the dominant intention is profit-making. Since nothing suggested the trust's objects were profit-oriented, the order rejecting registration was set aside, and the Commissioner was directed to register the trust in accordance with the law.
Customs
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Battle over Betel Nut Classification: Roasted or Raw for Customs Duty? Court rules in favor of "roasted" status.
The case pertains to the classification of imported areca nuts as "roasted" or "raw" for customs duty purposes. The Advanced Ruling Authority determined that if moisture content is between 10-15%, it would be considered "raw areca nuts", while below 10% would be "roasted areca nuts". The Court examined evidence from farmers cultivating betel nuts, who stated that raw areca nuts must be boiled or roasted to prevent fungal growth and ensure commercial viability. Lab reports confirmed a burning smell, indicating the imported areca nuts were roasted. Despite being imported a year ago, the goods retained their originality, further suggesting they were roasted. The Court concluded that based on the parameters set by the Advanced Ruling Authority and other aspects discussed, the imported areca nuts fell within the category of "roasted areca nuts". The respondent's order classifying them as raw was set aside. The Court directed the respondents to release the imported areca nuts within two working days without demurrage charges and issue a certificate waiving such charges.
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Account freeze for tax (custom duty) evasion without legal order declared illegal.
The High Court held that the action of the respondents in freezing the bank account of the petitioner without any pending proceedings under the Act was illegal and violated the statutory mandate u/s 110(5) of the Act. The communication to the bank did not contain any opinion based on tangible material regarding the necessity to freeze the account for protecting revenue or preventing smuggling. The Court emphasized that the power to provisionally attach a bank account must be exercised through an order in writing recording the opinion, as mandated by law. Mere communication or recording of opinion is not sufficient compliance. The requirement of passing an order in writing is to prevent arbitrary or mala fide exercise of power. Since the initial action of freezing the account was illegal, all subsequent actions based on it were also held illegal. Consequently, the petition was allowed, and the freezing of the petitioner's bank account was declared illegal and inoperative, with directions to release and allow the petitioner to operate the account.
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Seized gold not liable for confiscation due to lack of evidence.
The seized gold lacked foreign inscriptions, embossments, or 99.9% purity, and the seizure memo did not mention the officer's reasonable belief that the gold was liable for confiscation under the Customs Act. The Board's Circular No.1/2017-Cus mandates that seizure orders clearly state the reasons for believing the goods are liable for confiscation. As the seizure memo failed to mention this, and the gold lacked foreign markings or high purity, the seizure was deemed illegal. The appellants provided genuine procurement documents, and the Revenue did not produce evidence of illegal importation. Consequently, the gold was not held liable for confiscation, and no penalties were imposed on the appellants. The Appellate Tribunal ruled in favor of the appellants.
Corporate Law
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Waiver for oppression proceedings in companies: Strict conditions apply.
This is a case dealing with the interpretation and application of Sections 241, 242, and 244 of the Companies Act, 2013, concerning oppression and mismanagement in companies. The key points are: The concept of waiver u/s 244(1)(b) is an exception to the general law and must be strictly and rigidly followed. It grants an exemption from satisfying pre-established conditions for instituting proceedings u/ss 241 and 242. The waiver should not be read as an exception but as an addition to qualifying the conditions of the principal provisions. The Supreme Court has previously elaborated on the meaning of "oppression" under the Companies Act. The Tribunal denied granting a waiver as only one member sought proceedings, which did not meet the requirement of 1/5th of total members u/s 244(1)(b). The use of the word "may" in the proviso to Section 244(1)(b) is directory, not mandatory. Granting a waiver depends on the facts and circumstances of each case and requires a strong case, not merely self-generated allegations. In this case, the appellant had already instituted two civil suits on the same subject matter, further justifying the rejection of the waiver. The Appellate Tribunal dismissed the appeal, finding no merit.
IBC
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Debtor's commercial spaces not excluded from insolvency process; dissenting creditors entitled to refund or alternate option.
Exclusion of commercial spaces from the assets of the Corporate Debtor and the entitlement of dissenting Financial Creditors u/s 30(2)(b) of the Insolvency and Bankruptcy Code (IBC). The key points are: The allotment of commercial spaces and lease deeds do not confer ownership rights on the allottees. The Corporate Debtor continues to own the assets, and the commercial spaces cannot be excluded from the Corporate Insolvency Resolution Process (CIRP). The dissenting Financial Creditors are entitled to either 100% refund of the principal amount within 90 days or an alternate option for commercial space, as per the Resolution Plan. This satisfies the requirement u/s 30(2)(b) of the IBC, and there are no grounds to interfere with the Adjudicating Authority's order approving the Resolution Plan. The rejection of applications seeking exclusion of commercial spaces and registration of sale deeds was upheld. However, the allottees were granted liberty to file appropriate applications for claiming rent subsequent to the commencement of CIRP or as CIRP costs.
Indian Laws
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Resolving Arbitral Tribunal's Mandate Extension: Supreme Court Allows Filing after Expiry, Grants COVID Extension.
The Supreme Court addressed two key issues: 1) Whether an application u/s 29A(4) of the Arbitration and Conciliation Act, 1996 for extension of the Arbitral Tribunal's mandate can be filed after the expiry of its mandate. The Court held that based on the wording of Section 29A(4) and its decision in Rohan Builders, an application for extension can be filed even after the termination of the Tribunal's mandate upon expiry of the statutory and extendable period. 2) Whether an extension should be granted in the present case. The Court held that considering the COVID-19 pandemic, the exclusion of the period from 15.03.2020 to 28.02.2023 from limitation periods, and the parties' agreement to seek extension, there was sufficient cause for granting extension. Accordingly, the High Court's order was set aside, and the civil appeal was allowed.
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Court allows appeal against retrial order for evidence forgery; upholds locus standi & overrules bar on proceedings.
Locus standi of the appellant to prefer the appeal, the applicability of Section 195(1)(b) CrPC, and the correctness of the High Court's order for de novo proceedings against the appellant. The Supreme Court held that the appellant has locus standi as the case involves serious allegations of interference with judicial processes. It ruled that the proceedings were not hit by the bar u/s 195(1)(b) CrPC as the initiation arose from a court order and not a private complaint. Regarding de novo proceedings, the Court stated that the High Court erred in quashing the criminal proceedings and ordering a fresh trial, as the alleged forgery of evidence leading to acquittal warranted further investigation. Consequently, the impugned order was set aside, and the appeal was allowed.
VAT
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Penalty for tax evasion detected in inspection upheld despite subsequent payment before assessment order.
Petitioner cannot evade penalty u/s 22(5) of TNVAT Act, 2006 by paying tax after inspection but before assessment order. Rule 7(9) of TNVAT Rules, 2007 prohibits filing revised return if tax payable is unearthed through inspection or audit. Self-assessment on purported return filed after inspection is not recognized. Tax evasion noticed during inspection and subsequent payment does not absolve penalty u/s 22(5). Decisions on Section 16 of TNGST Act, 1959 are inapplicable due to different provisions. Tax Case Revisions dismissed.
Case Laws:
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GST
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2024 (11) TMI 1109
Challenge to SCN - Section17(5)(d) of the CGST Act, 2017 and Section 17(5)(d) of the TNGST Act, 2017 - HELD THAT:- The validity of the said provisions of both CGST and TNGST Act is concerned, it is brought to our notice by the learned counsel appearing for both sides that, by the recent decision of the Hon'ble Supreme Court in the matter of Chief Commissioner of Central Goods and Service Tax and Others Vs. M/s.Safari Retreats Private Limited and Others [ 2024 (10) TMI 286 - SUPREME COURT] , the Hon'ble Supreme Court has upheld the validity of the said provisions. In view of the said decision where the law has been declared, the challenge that has been made against the said provisions in W.P.No.23572 of 2022 has to be rejected, hence, W.P.No.23572 of 2022 is dismissed. Petition dismissed.
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Income Tax
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2024 (11) TMI 1115
Validity of assessment/re-assessment proceedings against entity as amalgamated/ non existent entity - HELD THAT:- The petitioner entity was amalgamated into MPIDC and liabilities were transferred thereunder. The respondent, in reply, no where stated that the department was not aware with the facts of amalgamation or the petitioner had ever suppressed the amalgamation proceedings, rather, the respondent himself admitted that the after the amalgamation in the year 2018, during the course of 148A proceedings for Assesment Year 2019-20, the assessee has made complete compliance with respect to the notices issued u/s 148A(b) of the Act and accordingly, established that the information flagged for verification for Assesment Year 2019-20 were duly accounted in the audited financial statement of MPIDC. The respondent did not deny the fact that the PAN Number alloted to petitioner entity was surrendered, deactivated after its amalgamation and merged with the MPIDC. Hence, in the instant case as pointed out earlier the fact of amalgamation was well within the knowledge of the assessing officer. In the case at hand, admittedly, the order under Section 148A(d) of Act, has been passed by the respondent against a non existent entity. Therefore, the impugned order is bad in the eyes of law. Decided in favour of assessee.
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2024 (11) TMI 1114
Addition u/s 68 - source and genuineness of the cash deposited was held to be unexplained - cash book produced was rejected by AO -appellant had deposited an amount in old demonetized currency, Partly out of which an amount had been declared by the appellant in PMGKY 2016 scheme and balance old currency was claimed to be deposited out of the cash in hand HELD THAT:- AO was not justified in rejecting the cash book produced before him as fabricated and unreliable without pointing any specific defect therein. He has completely overlooked the comparative figures of sales vis- -vis cash sales as also the percentage of cash sales going down during the year. There appears no abrupt jump in the quantum of cash sales during the year under consideration. The reasons for keeping sufficient cash in hand by a widow lady running a retail liquor business cannot be brushed aside without any cogent reason. Moreover, the assessee was fair enough to disclose almost 50% of the impugned sum under PMGKY rather than squabbling over it also. The amount of cash kept at home which is also to be evident from one seized paper during survey could not be considered unreasonable considering the nature of business. It is also not disputed that the accounts of the assessee have been consistently audited by qualified Chartered Accountant over the years. Besides, there being no other evidence of any other undisclosed source of income, the cash deposits were evidently business receipts which could not be considered as unexplained cash credit liable to be added u/s 68 - Thus, no hesitation in concluding that the impugned amount was incorrectly added to the income without appreciation of all relevant facts of the case and the Ld. CIT(A) was not justified in upholding the addition. The addition made is, therefore, deleted. Assessee appeal allowed.
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2024 (11) TMI 1113
Penalty levied u/s. 271(1)(c) - concealment of income - Difference of income returned in the original return vis- -vis that of the revised return after survey filed pursuant to notice u/s. 148 - HELD THAT:- After having gone through the Assessment Order as well as the penalty order, we couldn t find as to what amount has been concealed by the assessee. AO has not bothered to at least bring on record the original returned income filed by the assessee for AY 2009-10 for AY 2010-11 u/s 139 - AO has merely made a bald statement to the effect that the assessee has understated her turnover and thus, concealed her income and that the assessee s original return failed to reflect the true state of affairs. We find that neither the impugned order of the Ld.CIT(A) nor the Assessment Order/penalty order of the AO, doesn t even spell out as to what amount assessee returned in the original return in both the years. AO/Ld.CIT(A) didn t bother to even point out how much amount the assessee has concealed. Neither the Assessment Order nor the penalty order spells out as to what was the original returned income as well as the revised returned income. Therefore, merely based on projected financials contained in the hard disc found during survey and the statement which would have been recorded u/s. 133A of the Act, can t be the ground for levy of penalty , because, the AO failed to show that the assessee had deliberately under estimated her income. Survey team found the turnover not matching with books maintained by the assessee. Only the profit embedded in turnover can be brought to tax. Unless the assessee while estimating her income has deliberately suppressed her income by under estimating her income, an inference of concealment couldn t have been drawn. Penalty deleted - Decided in favour of assessee.
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2024 (11) TMI 1112
Penalty u/s 271(1)(c) - disallowance made u/s 43B regarding expenses claimed by the assessee - as argued there was a confusion in the mind of AO about which limb penalty is to be levied - HELD THAT:- The disallowance confirmed by this Tribunal is u/s 43B, of the expenditure claimed by the assessee. This disallowance is not due to any concealement of income by the assessee. The assessee had filed all details pertaining to the expenditure claimed by it. However, certain expenditure could be allowed only on actual payment and therefore the disallowance was made u/s 43B of the Act. In respect of the addition on increase in liability, we note that assessee provided details like confirmation regarding the increase in liability. There is no whisper about veracity of the confirmation filed by the assessee before the CIT(A). Merely because the addition has been partly confirmed by the Tribunal cannot be a reason to ipso facto levy penalty. CIT(A) it is discernable that the confirmations filed by the assessee not been verified. Levy of penalty is not a mechanical procedure and has to be issued with lot of checks and balances. Additions sustained by this Tribunal is not a fit case to levy penalty u/s. 271(1)(c) of the Act. Assessee appeal allowed.
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2024 (11) TMI 1108
Penalty u/s 271(1) (c) - defective notice u/s 274 - non specification of clear charge - Assessee had claimed inaccurate expenses - ITAT deleted penalty as notice u/s 274 r.w.s. 271(1)(c), AO has not marked the specified limb for which the penalty notice is issued - HELD THAT:- Two phrases i.e. conceal and furnishing of inaccurate particulars are separate and distinct. Concealment of income and furnishing of inaccurate particulars of income in Section 271(1) (c) of the Act carry different meanings and connotation. On principle where the penalty proceedings are said to be initiated by the Revenue under Section 271(1) (c) of the Act, the specific ground which forms the foundation thereof needs to be spelt out in clear terms. Otherwise, the assessee would not have proper opportunity to put forth his defence. The proceedings for initiating the penalty are penal in nature, which may result in imposition of penalty ranging from 100 to 300% of the taxability and therefore the charge must be unequivocal and unambiguous. Where the charges are either of concealment of particulars of income or furnishing of inaccurate particulars thereof, revenue must specify as to which one of the two is sought to be pressed into service and cannot be permitted to club both. Following the decision of Manjunath Cotton and Ginning Factory [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] and the other decisions of different High Courts, the ITAT rightly held that the levy of penalty u/s 271(1)(c) of the Act in the case of the assessee was not valid. Decided in favour of assessee.
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2024 (11) TMI 1107
Benefit of Direct Tax Vivad Se Vishwas Act, 2020 - Review petition as a pending appeal under DTVSV Act - scheme was intended to give quietus to the tax legislation and collect the disputed taxes by granting waiver of penalty and interest - Applicability of CBDT circulars and clarifications - whether the case of the petitioner would fall within the four corners of Section 2(1)(j). HELD THAT:- Admittedly, as on the cutoff date, no Appeal, Writ Petition or Special Leave Petition was pending before the Appellate Forum. Petitioner has drawn our attention to Clarification dated 22.04.2020, issued by the Central Board of Direct Taxes. As per response to Question-1, the proceedings initiated by the declarant by giving any notice for arbitration, conciliation or mediation are covered under the Act. Response to Question-2 clarifies that the assessee whose case is pending in arbitration, is eligible to apply for settlement under Vivad Se Vishwas , even if no appeal is pending. Reply to Question No. 61 provides that even if the Miscellaneous Application [ MA ] in respect of an appeal which was dismissed in limine was pending on before 31st January 2020, such MA is eligible. As apparent from the CBDT Circulars that pendency of arbitration proceedings and miscellaneous applications in certain cases, as on cutoff date would meet the requirement of Section 2(1)(j), even though no Appeal, Writ Petition or Special Leave Petition may be pending in any Appellate Forum in terms of Section 2(1)(j). It is well settled law that Department is bound by the circulars/instructions and has to comply with the same. The Hon ble Supreme Court has held in the case of Paper Products Ltd. [ 1999 (8) TMI 70 - SUPREME COURT] that circulars/instructions issued by CBE C are binding on the departmental authorities. They cannot take contrary stand and department cannot repudiate a circular on the basis that it was inconsistent with the statutory provision. Thus, the respondent is bound by the circular of CBDT issuing clarification. Even though, the scope of review is limited and statutorily different from an appeal, the jurisdiction of the Court extends to the power to modify, review or recall its own order and that being so, the SLP cannot be said to have attained finality since the review petition was still pending on the cutoff date. Department itself has mellowed down the strict interpretation of Section 2(j) by including the pending arbitration proceedings and miscellaneous applications under the Vivad Se Vishwas Scheme . There is no reason why the pendency of the review petition after the dismissal of the Special Leave Petition should not get covered under Vivad Se Vishwas Scheme . The review petition will also partake the character of pending proceedings and therefore the petitioner should not have been non-suited or treated as ineligible for claiming benefit under DTVSV Act. DTVSV Act, in a sense, provides for a deviation from the strict application of tax laws towards achieving this purpose. If the provision in Section 2(j) and the Board Circular is to be construed in a restrictive manner as is contended by learned counsel for the respondent, the same will run contrary to the scheme of the Act of 2020. We are conscious that review petition has since been dismissed by the Supreme Court but we have to consider the right of the petitioner as on the cutoff date, when admittedly, the review petition was still pending. As on the cutoff date, the possibility of reaching a different conclusion could not have been ruled out. We are therefore unable to persuade ourselves to confine the benefit of the scheme to only such cases where an Appeal, Writ Petition or Special Leave Petition were pending. In our view, petition for review against the orders passed in the SLP would also be covered in the definition of Disputed Tax under Section 2(1)(j), thereby, making them eligible to take benefit of Vivad Se Vishwas Scheme . The remarks/reasons given by the first respondent in the impugned order thereby rejecting the declaration in Form-1 2 filed by the petitioner on 28.01.2021, cannot be sustained, for the said reasons are not in consonance with the scheme of the Act and also do not conform to the intent and purpose of the legislation. Writ petition is allowed and the impugned orderis hereby set aside. The first respondent is directed to accept the revised declaration form filed by the petitioner on 28.01.2021 and process the same in accordance with DTVSV Act, 2020 and pass requisite orders.
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2024 (11) TMI 1106
Validity of assessment u/s 153C or 147/148 - information was received through insight portal from the Investigation Wing to the effect that the petitioner was a beneficiary of accommodation entries provided by one Sh. Joginder Pal Gupta (DAG Group) - HELD THAT:- It is not disputed that in the present case, the AO was not handed over any books of accounts or material by the AO of the searched person (Sh. Joginder Pal Gupta of DAG Group). Thus, the necessary threshold condition for the AO of the Assessee, initiating the proceedings u/s 153C of the Act was not satisfied. Thus, in any event the AO was not precluded from initiating proceedings u/s 148A of the Act on the basis of the information available on the insight portal, which is suggestive of the fact that the petitioner s income for AY 2015- 16 had escaped assessment. The present case is covered squarely by the decision of the Supreme Court in Principal Commissioner of Income Tax v. Abhisar Buildwell (P.) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] as the jurisdictional condition for the AO of the Assessee to assume jurisdiction u/s 153C of the Act was not satisfied The question whether the provisions of Section 153C of the Act precludes recourse to reopening assessments u/s 147/148 of the Act, on the basis of information found during the search conducted u/s 132 or requisition made u/s 132A of Act in respect of another person, is also covered against the petitioner.
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2024 (11) TMI 1105
Reopening of assessment u/s 147 - deemed show cause notice under section 148A(b) - applicability of Section 151 of the provisions of the Act as the sanction has not been granted by the appropriate authority as specified under the said provisions - HELD THAT:- Once the petitioner has availed of an alternate remedy as provided under the Income Tax Act, namely of a substantive appeal being filed, and if the assessment order as also the notices issued to the petitioner prior thereto under Section 148A and under Section 148 are contrary to the substantive provisions of Section 151A and Section 151 of the Act, as interpreted by this Court in Hexaware and Siemens [ 2023 (9) TMI 552 - BOMBAY HIGH COURT] the Appellate Authority as also the Revisionary Authority being bound by the said decisions of the jurisdictional High Court, need to consider such legal position. Thus,the petitioner is not precluded from raising all such contentions, as raised before us in the present proceedings, before the said authority. The proceedings which are pending before the CIT(A) as also the Revisionary proceedings, be decided considering the contentions of the petitioner namely as to whether the impugned assessment order as also the notice under Section 148 of the Act is illegal when tested on the law as declared by this Court in the aforesaid decisions. An approach ought not to be followed that when the appellate authority is already seized with the proceedings, we entertain writ petitions to adjudicate, what can certainly be adjudicated by the appellate authority, considering the said decisions of this Court. As rightly pointed by Mr. Mohanty to entertain writ petitions in such circumstances, would create a situation that all matters which are pending before the Appellate Authority and which are supposed to be decided in accordance with law involving issues on applicability of the decisions of this Court, in disposing of the proceedings would be required to be entertained by this Court. Certainly, such approach cannot be adopted by the Court. We are hence of the opinion that it would be appropriate that the assessee pursues the pending proceedings as filed before the appropriate Appellate Authority. Accordingly, we are not persuaded to entertain the present proceedings which assail the assessment order when appeal is already filed by the petitioner, which is pending.
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2024 (11) TMI 1104
Denial of Foreign Tax Credit - delay in filing Form- 67 - mandatory or directory formality - HELD THAT:- In the present case, the petitioner, who was working in foreign country, had filed his return of income for the assessment years 2019-20, 2020-21 and 2021-22 in India showing the income earned in the foreign country. But due to Covid out break, he inadvertently had not uploaded the Form-67. However, later the petitioner uploaded the Form-67 for all the Assessment Years. The reasons stated by the petitioner appears to be reasonable and further this Court in a similar case reported in Duraiswamy Kumaraswamy [ 2023 (11) TMI 1000 - MADRAS HIGH COURT] held that filing of foreign tax credit in terms of Rule 128 is only directory in nature and not mandatory. In the present cases the petitioner was working in United Kingdom and earned income there. The petitioner filed return of income in India for the assessment years 2019-20, 2020-21 and 2021-22 showing the income earned in the foreign country, in which he claimed TDS credit before United Kingdom, as FTC u/s 90 of the Income Tax Act. But the petitioner uploaded Form 67 with delay, which he suppose to upload while filing the return of income. It is to be noted that Section 90, Section 90A and Section 91 of the Income Tax Act of 1961 have been drafted specifically to avoid the burden of double taxation. In the present case, even though the petitioner had not uploaded Form-67 while filing return of tax, later he uploaded the same with delay and that too due to Covid out break, which appears to be genuine. Therefore this Court is inclined to condone the delay in filing Form 67 and the impugned orders are liable to be set aside.
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2024 (11) TMI 1103
Correct head of income - Gain on sale of shares - 'Short Term Capital Gain OR Business Income - HELD THAT:- CBDT unequivocally accepted that it is possible for the assessee to have two portfolios i.e. an Investment Portfolio and a Trading Portfolio. The income from sale of shares held in investment portfolio is liable to be taxed under the head capital gains and the income from sale of shares held under trading portfolio is subject to tax as Business Income . After examining the documents on record in the instant case, we have already held that the assessee was holding shares under investment portfolio. Accordingly, the assessee rightly offered gain on sale of shares as Short Term Capital Gains. The action of the AO in treating gain on sale of shares as, Business Income is unwarranted and without any basis. The AO completely disregarded the intention of assessee and the accounting treatment. Hon'ble Jurisdictional High Court in the case of CIT vs. Rohit Anand [ 2010 (8) TMI 232 - DELHI HIGH COURT] ; CIT vs. Ess Jay Enterprises P Ltd. [ 2007 (8) TMI 709 - DELHI HIGH COURT] ; CIT vs. Gulmohor Finance Ltd.[ 2008 (2) TMI 867 - DELHI HIGH COURT] in similar set of facts has upheld the order of Tribunal, wherein income from sale of shares was declared by assessee as capital gains, the Revenue re-characterised it as Business Income. On appeal the Tribunal allowed appeal of assessee, accepting gain on sale of shares as capital gains. Appeal of the assessee is allowed.
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2024 (11) TMI 1102
Disallowance u/s. 40(a)(ia) - Sum actually been paid by the assessee to the Maharashtra Government - HELD THAT:- Such payment would not get covered under the TDS Provisions. In so far as payment to Village Level Entrepreneurs is concerned, the assessee has furnished before us documentary evidence to demonstrate that in the year under consideration neither the amount in dispute was paid nor credited to the concerned vendors. Assessee has further demonstrated that as and when, the amount was paid in subsequent years, TDS provisions have been fully complied with. In so far as the amount alleged to have been paid towards various expenses/outsourcing of cost DOP. The assessee has demonstrated before us that though the provision was made for the amount in dispute, however, it was never paid or credited. On the contrary, the provision made was subsequently reversed. No contrary evidence has been brought on record by the Revenue to controvert the aforesaid factual position. In view of the aforesaid, we have no hesitation in holding that the payments made do not attract the TDS provisions in the year under consideration. Therefore, the disallowance made u/s. 40(a)(ia) of the Act is unsustainable. Non deduction of tax at source on payments alleged to have been made on factual verification it is observed that out of the said amount, the assessee has made payment of Rs. 5,000/- only towards payment of telephone bill, whereas, the balance amount was never paid. Thus, in our view, no disallowance even in respect of payment made can be made u/s. 40(a)(ia) - Thus, the AO is directed to delete the disallowance - This ground is allowed.
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2024 (11) TMI 1101
Disallowance of Foreign Tax Credit (FTC) - delay of filing Form No. 67 - rectification order u/s 154 - HELD THAT:- It is an undisputable fact that the assessee has paid taxes in India as well as abroad and the tax paid in the foreign country are eligible to be credited towards the total tax payments. Since the factum is not in dispute, delay in filing cannot prejudice the right of the assessee to claim Foreign Tax Credit (FTC). Keeping in view the specificities of the instant case, the Revenue is hereby directed to accord Foreign Tax Credit (FTC) to the assessee and carry out rectification. Appeal of the assessee is allowed.
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2024 (11) TMI 1100
Disallowance of section 11 exemption - belated filling of form 10B audit report - Revenue s case is that this tax audit report compliance is a mandatory provision for an assessee who claims section 11 exemption - HELD THAT:- The instant issue is no more res-integra in light of ACIT v. Xavier Kelvani Mandal Pvt. Ltd. [ 2011 (6) TMI 863 - ITAT AHMEDABAD] wherein their lordships have already settled the same at rest in assessee s favour and against the department that such a compliance could be even made in first appellate proceedings before the CIT(A)/NFAC. Thus accept the assessee s instant sole substantive grievance in principle and direct the learned CIT(A)/NFAC to read-judicate the lower appeal on merits as per law preferably within three effective opportunities subject to a rider that it shall be the taxpayer s risk and responsibility only to plead and prove all the relevant facts within three effective opportunities in consequential proceedings. Assessee s appeal is allowed for statistical purpose
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2024 (11) TMI 1099
Assessment u/s 153A - computing the income under the head Income from House Property - Addition for unabated assessment years - whether no incriminating material found during the search ? - HELD THAT:- Additions proposed by the Assessing Officer relates back to AY 2013-14 onwards. It is clear from the above information that the assessee has not disclosed any rental income for the abovesaid properties during the AY 2013-14 onwards. It is not clear how the property at Goa was utilised by the family. If these properties were under utilisation of the family members during the AYs 2013-14 to 2015-16, we noticed that all these properties were already disclosed in the Balance Sheet of the Trust dated 31.03.2013. Therefore, the emails found during the search are not an incriminating material for the AYs 2013-14 and 2014-15. Considering the fact that the family has started the discussion of exploring the various options only through email dated 20.02.2015. Accordingly, the assessments u/s 153A for AYs 2013-14 2014-15 are unabated and without any incriminating material, therefore, the addition made in these assessment years are accordingly directed to be deleted. These assessment years are unabated assessment years and no addition can be made without there being any incriminating material. Accordingly, ground no.1 raised by the assessee in AYs 2013-14 2014-15 are allowed and other grounds raised by the assessee are also allowed due to the fact that the legal ground raised in ground no.1 is allowed. The grounds are consequential in nature. Accordingly, the appeals in AYs 2013-14 2014-15 are allowed. Coming to the AYs 2015-16 and 2016-17, we observed that there is trail of emails exchanged by the family members as per which the property under consideration are under commercial exploitation by one of the beneficiaries of the trust. It is a fact on record that the beneficiary has disclosed the income earned from the property in his personal return of income, however it should have been income of the assessee. We cannot say that there is no incriminating material for these assessment years under consideration i.e. 2015-16 and 2016-17. Accordingly, ground no.1 raised in AYs 2015-16 2016-17 are dismissed. Assessment of annual lettable value - trust has utilised the properties at Goa for commercial exploitation and gave the same to one of the beneficiaries - HELD THAT:- Considering the AY 2016-17 as the base year, since the property was exploited fully during this year. The amount lettable value cannot be more than Rs.8.39 lakhs. Therefore, we direct the Assessing Officer to treat the ALV as Rs.8.39 lakhs for both the years and allow the standard deduction of 30% on the above ALV and bring to tax the net ALV at Rs.5,87,300/- to the income for the AY 2015-16 and AY 2016-17 Vatika Professional Point commercial property held by the assessee - As brought to our notice that property under consideration was finally disposed off by the assessee in AY 2025-26 without actually any profit till such time the property was never let out due to various conditions prevailing during the period. Therefore, there is no incriminating material found during the search relating to this property. Accordingly, the additions made by the Assessing Officer from AYs 2013- 14 to 2016-17 are deserved to be deleted and without any incriminating material, considering the fact that these assessment years are unabated. Determination of ALV of property - property at Gurugram - Assessee should have disclosed annual municipal value as rental income as against the ALV adopted by the Assessing Officer which is determined by the AO through commission as per which it was estimated on the information gathered from the properties located in the same vicinity. However, it is only an estimation and as submitted by the beneficiary, it clearly shows that it does not give such rental income. It is also a fact that assessee has not properly exploited the property still the assessee has incurred huge loss. It is not commercially viable from the information available on record. Further there is no material brought on record by the AO that the assessee has exploited the property subsequent to AY 2016-17. Keeping the information available on record, it is not fair to estimate the rental income on the presumption basis. Therefore, we direct the AO to adopt the municipal value of the property as ALV as per municipal valuation and we direct AO accordingly. As per the information available on record, we observed that assessee was not in a position to let out the property on rent and various information available on record clearly show that it was not commercially lettable. It was also brought on record that assessee has disposed off abovesaid properties in AY 2025-26 without letting out the property and absorbing the maintenance charges over the years. After considering the facts on record, it is not appropriate for estimating the income when the property itself was not let out as held in the case of Rustomjee Evershine Joint Venture [ 2023 (7) TMI 1305 - ITAT MUMBAI] and Chalet Hotels Ltd. [ 2023 (10) TMI 837 - ITAT MUMBAI] It was held that ALV may be adopted alternatively keeping the generally expected rent from these properties. As per the information available on record, it is appropriate to estimate the same. We noticed that the assessee has prayed for 2% of the investment. But in actual, the commercial properties fetch 8% to 10% in the Metro Cities. In our view, estimating at 5% of the investment value is appropriate. Accordingly, we direct the Assessing Officer to adopt 5% of the value of investment as ALV for the properties under consideration. After standard deduction, the annual income of Rs.6.65 lakhs may be added as income of the assessee.
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2024 (11) TMI 1098
Validity of Revision proceedings u/s 263 against dead assessee - As per CIT AO had completed the assessment without carrying out the necessary and proper enquiry in respect of tax treatment of interest received on compensation or enhanced compensation - assessee submitted that notice u/s. 263 was given in the name of the deceased person - assessee informed the CIT and thereafter notice was given to the legal heir, but in the final order the PAN Number was mentioned of the deceased person HELD THAT:- It is noted that the Coordinate Bench of Amritar in case of Avtar Singh [ 2023 (8) TMI 1566 - ITAT AMRITSAR] on similar circumstances had held that if the person is deceased and legal heir has been brought on record, mentioning of PAN of the deceased person in the order will render the order a nullity. No contrary decision has been shown to us. Accordingly, respectfully following the precedent of the Amritsar Coordinate Bench, as aforesaid, we quash the order of the Pr. CIT u/s. 263 of the Act. Appeal filed by the Assessee stands allowed.
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2024 (11) TMI 1097
Reopening of assessment u/s 147 - misappropriation of funds by one of the employees of the assessee - HELD THAT:- We note that the assessee claimed the expenses which was not related to the business, but the amount was utilized by the employee in fraudulent way. The assessee suffered the embezzlement of the fund by the employee. The assessee claimed these expenses u/s 37(1) of the Act But on later stage, assessee came to know that these expenses are not a genuine expense, but it is an embezzlement of the fund by one of the employees. AR referred the CBDT Circular No 35-D (XLVII-20) [F.No. 10/48/65-IT(A-I)] dated 24/11/1965 where it is stated that loss arising due to embezzlement is allowable loss U/s 28(i) of the Act. The grievance of the revenue is that the claim of expenses is not under section 37(1), but it will come under section 28 of the Act considering the embezzlement. The assessee had never rectified the head during filing of return of Income in pursuance of notice U/s 148 of the Act. We note that the assessee offered the sum of Rs. 229 lakhs to tax, after recovery of the funds. We find that it is a justified claim for assessee that after receiving all the recovery, the same will be offered to tax. But the impugned amount was not recovered during impugned assessment year. It is only detected in the bank account of employee s wife. Only on the basis of the assumption the addition is unjustified. The debited amount is not fulfilling the purpose of expenses claimed U/s 37(1) of the Act but after all this expense is related to loss due to embezzlement which is allowable expenditure. The assessee is in process of recovery and after recovering the same the realized amount was offered for tax. We respectfully relied on the order of Bombay Forgings Pvt Ltd [ 1993 (9) TMI 99 - BOMBAY HIGH COURT] and G.G. Dandekar Machine Works Ltd [ 1993 (1) TMI 40 - BOMBAY HIGH COURT] In this issue, the assessee is eligible for the deduction due to loss of fund in embezzlement. AO unable to bring any evidence the impugned amount was recovered during impugned assessment year, in our considered view, the addition is unjustified - Decided in favour of assessee.
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2024 (11) TMI 1096
Right of the assessee (respondent) to defend the order of CIT(A) on the issue which was raised but not decided by the CIT(A) - Scope of cross objection - Raising plea before the Tribunal by way of application under Rule 27 of ITAT Rules, 1963 - Penalty proceedings u/s 270A and 271AAB - as alleged vague show cause notice issued u/s 274 r.w.s. 2701A / 271AAB, without specifying the limb under which, he proposed to initiate penalty proceedings under relevant sections - CIT(A) has not adjudicated the legal issue raised by way of written submission - whether the assessee can raise the said plea before the Tribunal by way of application under Rule 27 of ITAT Rules, 1963 or not. HELD THAT:- This issue is no longer res-integra. Hon'ble Madras High Court in the case of CIT Vs. India Cement Ltd. [ 2019 (8) TMI 1485 - MADRAS HIGH COURT] had considered identical issue and held that, once the assessee raised an issue before the CIT(A), which was not adjudicated by the first appellate authority can be deemed to be decided against the assessee and that the assessee was entitled to canvass the said issue before the Tribunal without independently filing the appeal in the light of Rule 27 of ITAT Rules, 1963. Hon'ble Bombay High Court in Peter Vaz and Others Vs. CIT [ 2021 (4) TMI 605 - BOMBAY HIGH COURT] also considered very similar issue and held that Rule 27 of ITAT Rules, 1963 gives a right to the respondent in an appeal before the Tribunal to support the order appealed against on any of the grounds decided against him, even though he may not have appealed against the order. For supporting the order, it is not necessary for the respondent in the appeal to file a memorandum of cross objection challenging a particular finding that is rendered by the trial court against him, when the ultimate decree itself is in his favour. The sum and substance of ratio laid down by various courts is that the respondent can support the order appealed against on any points which has been decided against him by way of application under Rule 27 of ITAT Rules, 1963. Since the question raised by the assessee by way of application under Rule 27 of ITAT Rules, 1963 is purely a legal issue and further, the assessee has taken an argument before the Ld.CIT(A) on this issue by way of written submission, in our considered view, although the Ld.CIT(A) has not decided the issue against the assessee, application filed by the assessee under Rule 27 of ITAT Rules, 1963 is maintainable and thus admitted. Having admitted the application filed by the assessee under Rule 27 of ITAT Rules, 1963, we find that the assessee has challenged the issue of legality of notice issued u/s 274 r.w.s. 270A / 271AAB for both the assessment years for the first time before the Tribunal and the facts with regard to said legal issue are not on record. Since the Ld.CIT(A) has not discussed the issue or decided the issue raised by the assessee and further the assessee has raised the issue for the first time before the Tribunal, in our considered view, first appellate authority should get an opportunity to consider the legal issue raised by the assessee from his perspective and thus, we are of the considered view that, the issue needs to go back to the file of the Ld.CIT(A) for considering the preliminary legal issue raised by the assessee on validity of penalty proceedings initiated on the basis of vague notice issued u/s 274 r.w.s.270A/271AAB.
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2024 (11) TMI 1095
Addition of cash deposits as unexplained money - there was no proof of the assessee carrying on the business of the appellant dealing with stationery and general stores - HELD THAT:- As perused the copy of the statement of the bank account held by the appellant with ICICI Bank. From the perusal of the said statement, it would reveal that there was cash deposits followed by withdrawals as well. Without entering into any controversy, whether the appellant had really carried on the business or not, it would be suffice to hold that the amount withdrawn from the Bank account by cash, should be treated as available for the subsequent deposits in the bank account, in the absence of any evidence on record to show the utilization of the withdrawn amount. Thus, the lower authorities, i.e. the AO as well as the learned CIT (A) should have given the benefit of telescoping of withdrawals against the subsequent deposits. Therefore, the approach adopted by the AO as well as the learned CIT (A) is totally unjustified and unreasonable. In order to meet the ends of justice, we deem it proper to remand the matter back to the file of the AO with a direction that the amount withdrawn from the Bank Account by way of cash should be treated as available against the subsequent deposits and the balance, if any, can be brought to tax and the balance amount, if any, as reduced by the amount of returned income may be brought to tax.
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2024 (11) TMI 1094
Reopening of assessment u/s 148 beyond the limitation period - HELD THAT:- In the present case as it appears to us that before issuance of notices the AO did not get himself satisfied though he may obtain a copy of sale deed from the office of the ADSR, Siliguri to verify the truth. It is apparent from the sale deed filed by the assessee that property in question was not sold by the assessee alone but his two sons were also the vendors of the property. As apparent from the assessment order that the AO had signed the notice u/s 148 of the Act on 31.03.2021 but did not issue the same although the AO had stated in his order that the notice was issued by him on 31.03.2021 but at the same time, AO had stated that as there was no e-mail address registered in the e-filing portal, the notice was served on the assessee on 28.12.2021. Hence, in our view, the notice was issued on 28.12.2021, much after the date of the limitation and accordingly, the issuance of notice is also bad in law. We are in this view that issuance of notice is bad in law. Since issuance of notice is bad in law, hence, all the consequent orders passed thereafter has no legal force and accordingly set aside. Appeal filed by the assessee is allowed.
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2024 (11) TMI 1093
Addition u/s 68 - unexplained cash credit - share capital received from four specific parties - HELD THAT:- In the present case, we observe that no additions have been made in the hands of the four investors, regarding the source of their investment during the course of scrutiny assessments in their respective hands. We are therefore, of the considered view that that if the investments had indeed been confirmed as genuine in the assessments of the respective investors, there would be little justification for the AO/CIT(A) to classify these same investments as bogus in the hands of the company receiving the share capital. Appeal of the assessee is allowed. Revision u/s 263 - assessee had received an amount from certain depositors, which became shareholders at a subsequent stage - HELD THAT:- Since in the preceding paragraphs, we have held that the assessee has been able to substantiate the genuineness of the investors and have directed that no addition is liable to be sustained in the hands of the assessee company u/s 68 of the Act, accordingly, the present appeal of the assessee is also allowed is against the order passed under Section 263. Appeals filed by the assessee are allowed.
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2024 (11) TMI 1092
Addition u/s 14A invoking provisions contained in Rule 8D - AO noted that the Appellant has earned exempt dividend income - HELD THAT:- Where the interest-free owned funds available with the assessee are more than the investments made in the tax-free securities, the presumption would be that investments in tax-free securities have been made out of interest-free own funds and proportionate disallowance of interest u/s 14A of the Act was not warranted on the ground that separate accounts were not maintained by assessee for making investments and for other expenditure incurred for earning tax-free income. In the present case, the Revenue has failed to bring any material on record to rebut the aforesaid presumption which is in the favour of the Appellant given the facts and circumstances of the present case. Accordingly, we accept the contention of the Appellant that no disallowance under Rule 8D(2)(ii) of the IT Rules was warranted in the present case and therefore, addition of INR 406.51 Crores made by the Assessing Officer by disallowing proportionate interest cost is deleted. Disallowance made u/Rule 8D(2)(iii) of the IT Rules - We find that Special Bench of the Tribunal in the case of ACIT Vs. Vireet Investments Pvt. Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] has held that for computing the disallowance under Rule 8D(2)(iii) of the IT Rules only the investments yielding exempt income are to be taken into consideration. Accordingly, we direct the Assessing Officer to recompute the disallowance under Rule 8D(2)(iii) of the IT Rules read with Section 14A of the Act. Adjustment in respect of addition/disallowance u/s 14A to the Book Profits computed u/s 115JB - We find that no such adjustment was proposed in the Draft Assessment Order. The directions received from DRP on 21/09/2017 also do not contain any directions to the AO to make any adjustment to Book Profits computed in terms of Section 115JB of the Act. Accordingly, the adjustment made by the AO in respect of addition/disallowance u/s 14A of the Act to the Book Profits computed under Section 115JB of the Act in the Final Assessment Order is deleted. TDS u/s 194H - Disallowance of discount extended to Pre-paid Distributors u/s 40(a)(ia) - discount extended represented the difference between the Maximum Retail Price (MRP) of the talk-time pre-paid connections; and the price at which these were transferred to the Pre-paid Distributors - AO treated the arrangement between the Appellant and Pre-paid Distributors as a Principal to Agent arrangement instead of Principal to Principal arrangement as claimed by Appellant on the basis of certain clauses of the agreement pertaining to exclusivity, right to inspect, etc. - HELD THAT:- We find that identical issue has been decided by the Mumbai Bench of the Tribunal in the case of the Appellant for the Assessment Year 2009-10 [ 2024 (1) TMI 991 - ITAT MUMBAI] Concluded that tax was not required to be withheld u/s 194H of the Act from the upfront discount offered to Pre-paid Distributors, and consequently, no disallowance could be made under Section 40(a)(ia) of the Act for failure to deduct tax at source. Thus disallowance made u/s 40(a)(ia) of the Act in respect of discount extended to Pre-paid Distributors is deleted. Disallowance of depreciation on 3G Spectrum - Since the right to use 3G spectrum did not itself entitle a company to provide telecom services for which a telecom license was required, the Appellant treated such right as an 'Intangible Asset' for the purpose of Section 32 of the Act and accordingly, tax depreciation per the prescribed rate was claimed on such capitalized cost - HELD THAT:- For the Assessment Year 2011-12 [ 2024 (5) TMI 1490 - ITAT MUMBAI] the depreciation in respect of spectrum charges as claimed by the Appellant was allowed by the Assessing Officer. Subsequently, order of revision was passed under Section 263 of the Act on the ground that depreciation in respect of the 3G spectrum charges was incorrectly allowed to the Appellant by the Assessing Officer and that the Appellant could only be allowed the benefit of amortization. In appeal preferred against the aforesaid order passed under Section 263 of the Act for the Assessment Year 2011-12, the Mumbai Bench of the Tribunal concluded that depreciation in respect of 3G spectrum charges was correctly allowed by the Assessing Officer vide. Vodafone India Ltd. Vs. Principal Commissioner of Income Tax-8 [ 2020 (8) TMI 954 - ITAT MUMBAI] Thus, we direct the AO to allow depreciation in respect of the 3G spectrum charges capitalize by the Appellant under Section 32(1)(ii) of the Act. TP Adjustment made in respect of the payment of brand royalty for obtaining the right to use of Vodafone trademark and trade name - HELD THAT:- we note that during the course of hearing the Appellant had filed a fresh benchmarking study as per the directions of the Tribunal. The Revenue has again objected to the selection of comparables by the Appellant. Further, it was also contended on behalf of the Appellant that the corroborative benchmarking using Transaction Net Margin Method has also not been considered either by the TPO or DRP. Given the aforesaid factual matrix and keeping in view the fact that for the Assessment Years 2011-12 and 2012-13 the issue of benchmarking of the royalty transaction has been remanded back to the file of the TPO/AO we deem it appropriate to remand this issue back to the file of TPO / AO with the directions to decide the issue of transfer pricing adjustment in relation to international transaction of royalty payment afresh after granting the Appellant reasonable opportunity of being heard. Appellant is directed to file before the TPO/AO such documents/details/report as the Appellant may deem fit to support the contention that the royalty payment made by the Appellant to its AE are at arm s length while the TPO is directed to examine the same afresh for determining the ALP and consequent transfer pricing adjustment, if any, as per law. TP adjustment pertaining to reimbursement of expenses - HELD THAT:-We deem it appropriate to grant to the Appellant another opportunity to substantiate its claim that the INR 7,09,65,777/- were incurred in relation to the employees deputed with the Appellant and that the same, having being recovered on cost to cost basis from the Appellant, was at arm s length. The Appellant is directed to furnish relevant documents/details to substantiate its claim. TPO/AO shall grant reasonable opportunity of hearing to the Appellant and shall decide the issue in accordance with law after taking into consideration the details/documents furnished by the Appellant and as per the directions issued by the Tribunal in the case of the Appellant for the Assessment Year 2008-09 [ 2023 (5) TMI 576 - ITAT MUMBAI] . Non-grant of additional credit of TDS as claimed by the Appellant on the basis of TDS Certificates filed during the course of assessment proceedings - AO is directed to grant credit of tax deducted at source as per law after verifying the claim of additional TDS Credit made by the Appellant during the assessment proceedings. Thus, Ground raised by the Appellant are allowed for statistical purposes.
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2024 (11) TMI 1091
Revision u/s 263 - assessment order was passed without verifying the allowability of the cost of improvement as per Section 55(1)(b)(2) and the failure to conduct this inquiry rendered the order erroneous and prejudicial to the interests of the Revenue - assessee s claim for the cost of improvement is allowable u/s 55(1)(b)(2) as the expenses incurred were of a capital nature - HELD THAT:- Capital expenditure u/s 55(1)(2) must be incurred to enhance or improve the value of the property. Such expenditure must be distinguishable from revenue expenditure (e.g., repairs or maintenance), which is generally allowable as a deduction from other heads of income, such as Income from House Property or Business Income. The property in question was purchased by the assessee in FY 2002-03 and was sold in FY 2018-19. Assessee claimed a cost of improvement incurred in FY 2008-09, consisting of interior work, kitchen appliances, plywood flooring, and tiles. These items are typically considered capital in nature as they add permanent value to the property and are incurred to improve the property s condition. Assessee also submitted a valuation report from an independent valuer who personally inspected the property and provided a detailed breakdown of the improvements made. Expenditure was supported by bank statements showing payments made through the banking channel, which the AO examined. As evident from the assessment order that the AO exercised his judicial discretion and adopted a plausible view based on the material on record - AO was satisfied with the evidence submitted and did not find it necessary to call for further documentary proof, such as bills or vouchers, for expenses incurred 14 years ago. CIT, in his order u/s 263 emphasized that the AO should have conducted a more in-depth inquiry into the cost of improvement, especially by asking for bills and invoices. CIT cited Explanation 2 to Section 263 of the Act, which allows revision of an order that is passed without proper inquiry or verification. However, it must be noted that Section 263 cannot be invoked merely because the AO did not carry out the inquiry in the manner the CIT would have preferred. AO had asked for the necessary documents to substantiate the assessee s claim and, after considering the bank statements and the valuer s report, came to a reasoned conclusion. As in the case of Sourabh Sharma [ 2024 (2) TMI 660 - ITAT JAIPUR ] held that if the AO conducts adequate inquiries and adopts one of the possible views, the CIT cannot substitute his own opinion u/s 263 - In the present case, the AO's acceptance of the cost of improvement was a possible view based on the material provided by the assessee, and the CIT s revisionary jurisdiction cannot be invoked simply because the inquiry was not conducted to his satisfaction. We find that the AO conducted adequate inquiries into the assessee s claim for the cost of improvement and took a plausible view based on the documents submitted, such as the valuation report and bank statements. Assessee s claim for the cost of improvement is allowable u/s 55(1)(b)(2) of the Act, as the expenses incurred were of a capital nature. The revisionary proceedings u/s 263 of the Act were unjustified, as the AO s order was neither erroneous nor prejudicial to the interests of Revenue. Accordingly, we quash the revisionary order passed by the learned CIT u/s 263 of the Act, and the appeal of the assessee is allowed.
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2024 (11) TMI 1090
Rejected registration u/s 12AB - Whether any object of the trust has been found to be profit making? - HELD THAT:- CIT(E) relied on decision in Ahmedabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT] wherein it was clarified that the assessee advancing general public utility cannot engage itself in any trade, commerce or business or provide service in relation thereto for any consideration. Section 2(15) of the Act defines charitable purposes . Appellant has pointed out that in the MOA/deed, it has been specifically mentioned that the activities or objects of the trust specified therein would not be to earn profit. In India Trade Promotion Organisation [ 2015 (1) TMI 928 - DELHI HIGH COURT] while upholding the constitutional validity of the proviso to section 2(15) of the Act held that same would apply where the dominant intention of a trust or the institution is profit making. Here, nothing has been brought to our notice from the side of the department to suggest that any of the objects of the trust was found to be profit oriented/making. Whether any activity was conducted by the trust against its objects? - The events were organized by Ms. Ritu Agarwal, it cannot be said that any activity was conducted by the applicant trust against its objects, particularly, and when Learned CIT(E) has clearly mentioned in para 3.2 of the impugned order that no expenses are shown to have been incurred on the said activity, as per Income and Expenditure Account statements submitted before him. This supports the contention raised by the applicant trust that it did not conduct any such activity. We find that CIT(E) fell in error in arriving at the conclusion that activities of the applicant trust were found to be not in accordance with its objects. As a result, the impugned order deserves to be set aside. Accordingly, this appeal is disposed of and the impugned order rejecting prayer of the applicant trust seeking registration u/s 12AA is set aside. CIT(E) to do the needful for registration of the applicant trust in accordance with law.
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2024 (11) TMI 1089
Disallowance of expenses being relatable to exempt income by invoking the provisions of section 14A r.w.s. 8D(ii) - as argued provisions of section 14A of the Act does not apply to the case of assessee as it is in the banking business and the exempt income is business income from banking as the assessee has kept these shares/investments as stock in trade - HELD THAT:- After hearing rival contentions and considering the ratio of the aforesaid decision of Hon ble Supreme Court in the case of South Indian Bank Ltd. [ 2021 (9) TMI 566 - SUPREME COURT] we hold that the provisions of section 14A of the Act would not attract to such income and such income is held by bank being shares and securities as stock-in-trade . In case, stock-in-trade are held as investments then the provisions of section 14A of the Act will apply. Since there is no finding in the order of AO or CIT(A) that the shares and securities held by assessee bank as stock-in-trade and not investment, we principally agreeing with the argument of assessee that this issue is covered but for verification purpose, we remit this issue back to the file of the AO. The AO is directed to first give a finding as regards to the fact that these shares and securities are held as stock-in-trade or as investment in assessee s bank balance sheet and in case, these are held as investment, the AO will recompute the disallowance by applying the provisions of section 14A r.w.rule 8D of the Rules as per law after considering the facts and circumstances of the case. Accordingly issue of assessee s appeal is allowed for statistical purposes. Disallowance of loss on treasury investments being mark-to-market loss - HELD THAT:- As assessee stated that this has been accepted by the AO while framing assessment for the assessment year 2017- 18 and for the purpose of consistency also this should have been accepted by the AO once he accepted the income on the same concept or principle. We noted that this issue stands covered by the decision of Lakshmi Villas Bank Ltd. [ 2006 (2) TMI 99 - MADRAS HIGH COURT] and it is the case of valuation of investment at cost or market value whichever was lower and the difference arising as a result of valuation has to be allowed to the assessee either as loss or income. Hence, we find that the assessee s claim is perfectly alright and hence, the order of AO and that of the CIT(A) is reversed and the claim of assessee is allowed. This issue of assessee s appeal is allowed. Disallowance of deduction claimed on account of interest on delayed payment of service tax - HELD THAT:- As relying on decision of Vegetable Vitamin Foods Co.(P) Ltd. [ 1994 (3) TMI 60 - BOMBAY HIGH COURT] wherein it is held that the deduction claimed u/s. 37(1) of the Act can be allowed being payment made by way of interest on delayed payment of sales tax being purely compensatory in nature and not penal in nature. Thus, we allow the claim of assessee and hence, this issue of assessee s appeal is allowed. Claim of amortization of premium on HTM securities - deduction for perquisite charged in the hands of employees on exercise of ESOPS - HELD THAT:- As we are of the view that all the details and facts are available but none of the authorities below i.e., the AO or CIT(A) has not considered this claim. We admit these two claims and the finding of the AO and CIT(A) on these two issues are set aside and matter remanded back to the file of the AO for adjudicating the same on merits. The AO will adjudicate these two claims after examining the facts and legal position and accordingly, decide these two claims. These two issues are allowed for statistical purposes.
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Customs
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2024 (11) TMI 1088
Import of Roasted areca nuts from Indonesia - Classification of imported areca nuts are roasted or raw. - As per the Advanced Ruling Authority, if the moisture content of the areca nuts is between the range of 10% and 15%, it would be considered as raw areca nuts , whereas, if the moisture content is below 10%, it would be considered as roasted areca nut - HELD THAT:- As per the answers received from the Farmers, who are cultivating the betel nuts (areca nuts) and doing the process of roasting the same, it appears that if the areca nuts are not dried (fruits before peeling) or roasted (after peeling), the same will get affected with fungus. Further, it was informed by the farmers that once the raw areca nuts (before its ripening stage) are peeled out and kept for more than a week, the same will get spoiled and will not become viable to sell it commercially. Hence, in the case of raw areca nuts , it is clear that the same cannot be imported unless and otherwise it is boiled or roasted . In this case, the Lab reports had made it clear that the said Labs have witnessed the burning smell while testing the imported areca nuts, which ultimately proves that the said imported areca nuts are roasted . In this case, though the goods were imported an year ago, still it had not lost its originality and it is in good condition, which ultimately shows that the imported goods are roasted areca nuts . Thus, this Court is of the considered view that as per the parameters determined by the Advance Ruling Authorities and taking into consideration of other aspects as discussed above, the areca nuts, imported by the petitioners, will squarely fall within the parameters of roasted areca nuts . The respondent had failed to consider the aspects, which were discussed above, and passed the order-in-original without even considering the order passed by this Court in M/S. SHAHNAZ COMMODITIES INTERNATIONAL P. LTD., M/S. NEENA ENTERPRISES, M/S. UNIVERSAL IMPEX [ 2023 (8) TMI 492 - MADRAS HIGH COURT ] whereby the order of the Advance Ruling Authorities was confirmed. Therefore, the impugned order passed by the respondent is liable to be set aside. Accordingly, the impugned order passed by the respondents is set aside. In view of the above, this Court directs the respondents to release the areca nuts, imported by the petitioner, within a period of 2 working days from the date of receipt of copy of this order. Further, since the fault is purely on the part of the respondents, they shall release the goods without any demurrage charges. In this regard, the respondents are directed to issue a detailed certificate for waiver of demurrage and container charges.
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2024 (11) TMI 1087
Demand in respect of imports - demand for IGST @ 18% and imposed penalty and interest under Customs Act, 1962 - HELD THAT:- As submission of the petitioner has been considered and appropriate decision has been arrived by the respondents rejecting the objection of the petitioner. Therefore, the invocation of Article 226 of the Constitution of India is not available to the petitioner. The petitioner has to file a Statutory Appeal before the Appellate Commissioner under Section 128(1) of the Customs Act, 1962. This Writ Petition is dismissed. However, liberty is given to the petitioner to file a Statutory Appeal before the Commissioner of Customs (Appeals) within a period of 30 days from the date of receipt of a copy of this order. In case, such appeal is filed, the Appellate Commissioner shall consider the same and dispose it on merits and in accordance with law.
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2024 (11) TMI 1086
Provisional attachment of Bank account - Legality and validity of the action of the respondents in freezing the bank account of the petitioner - HELD THAT:- Without there being any proceedings pending under the Act, the power of attachment could not be exercised on stand alone basis. In the present case, the exercise of power, if we may say so, is in violation of the statutory mandate, as referred under subsection 5 of Section 110 of the Act. The petitioner has assailed validity of communication made by the respondent-authorities to the bank. A perusal of the said communication shows that it contains nothing much less an opinion based on any tangible material to the effect that it has become necessary to freeze the bank account for the purpose of either protecting the interest of revenue or preventing smuggling. The text and tenor of the order is merely a communication and not an order in writing, which is mandated under the law. Though, the petitioner terms it as an order, in our considered opinion, it does not fulfill any legal requirements of an order. It is merely a communication addressed to the bank. The order was required to be in writing and that too recording opinion, as envisaged under the law. In the absence of all those things, communication is merely a communication and not an order at all. We are unable to accept the submission of custom department that while passing the order of provisionally freezing the bank account at the first instance, there is no legal requirement of passing an order. This argument is completely against not only the letter but also spirit of law. The expression order in writing preceding the expression provisionally attach any bank account for a period not exceeding six months clearly shows that the order of provisional attachment has to be by an order in writing and not by other mode. It is well settled principles of law that when power is required to be exercised in a particular manner, as provided under the law, it has to be exercised in that manner alone and not otherwise. The argument that the opinion formed by the authority which may have contained the records and files, is substantial compliance of requirement of law, cannot be accepted. It is not the language of the statue that only recording of opinion is enough. Use of expression by order in writing , reflects the necessity to regulate the exercise of power. Requirement of passing an order in writing is not an empty formality but such provisions have been made by the statue to militate against arbitrary or malafide exercise of power. Once the Court holds that the first action of freezing of account, as communicated to the bank vide order dated 14.03.2024 itself was in breach of law, there is no question of extending any illegal order. Therefore, all subsequent action which has been taken on the basis of the impugned action and order of the respondents must also go. In the result, the petition is allowed. The action of the respondents in freezing the bank account of the petitioner is held illegal and inoperative in law. The result would be that the bank account of the petitioner shall forthwith be released and the petitioner is allowed to operate the account.
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2024 (11) TMI 1085
Seizure of gold at Railway Station - show cause notice was issued based upon the statement of the co-noticee that the goods so seized were of foreign origin and are being illegally imported into the country - HELD THAT:- It is an admitted fact that this gold was having no foreign inscription or embossment or marking and were not having purity of 99.9% and were sized vide seizure memo. Thereafter, the Panchnama was also drawn in the presence of Panchayat and the statement of co-noticee/Shri Rajendra Mishra was recorded, who stated that the gold does not belong to him and the same belong to M/s Ashish Ornaments House. Shri Ashish Kumar Agarwal and Shri Pradumanji Agarwal, the owner of M/s Ashish Ornaments House. In terms of Section 110 (1) of the Customs Act, 1962, the gold can be seized if the proper officer have reasoned to believe that the gold are liable for confiscation under the Customs Act, he may seize the gold, but in the seizure memo, nowhere it is mentioned that he has a reasonable belief that the gold seized in question on reasonable belief is liable for confiscation. We rely on the Board s Circular No.1/2017-Cus dated 08.02.2017, which prescribed that whenever the goods are being seized in addition to Panchnama, the proper officer must also pass an appropriate order (seizure memo/order/etc.) clearly mentioning the reasons to believe that the goods are liable for confiscation. In the seizure memo, nowhere it is mentioned that the proper officer is having reasoned to believe that the seized gold with reasonable belief is liable for confiscation. In that circumstances, the seizure is not legal. In Panchnama also, the gold has been seized, but nowhere it is mentioned that the proper officer is having with reasonable belief that the gold in question is liable to confiscation. In that circumstances, the gold cannot be seized. It is not a case of seizure of gold at Port, Airport or International Border having any inscription/marking or embossment to believe that it is of foreign made and the purity is also less than 99.9%. In that circumstances, the benefit of doubt goes in favour of the appellants and the gold in question cannot he seized. Thus, the appellant who claimed the owner of the gold, has produced the documents of procurement thereof and those documents are found to be genuine. Revenue has not adduced any documentary evidences that the gold in question has been illegally imported. Thus, the gold in question cannot be held liable for confiscation. Accordingly, the same is to be released., no penalties are imposed on the appellants.
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Corporate Laws
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2024 (11) TMI 1084
Seeking an injunction restraining infringement of copyright, piracy of registered design, passing off etc. - whether the filing of a design infringement action could constitute an anti-competitive practice or vexatious/sham litigation, so as to lead to a conclusion that the Plaintiff in the infringement action in the original suit has engaged in abuse of dominance? - HELD THAT:- The potential for the CCI to continue an inquiry after a settlement has been reached, could even jeopardize the settlement, dissuading parties from opting for mediation in the first place. It could lead to a lack of trust in the mediation process, as parties may fear that their efforts to settle disputes amicably would be disregarded. Moreover, settlements in general being agreements voluntarily agreed to between parties, unless there is an extraordinary situation, they cannot be permitted to be reopened so as to ensure FINALITY and CLOSURE . Furthermore, the threat of continued investigations by the CCI could compel parties to engage in prolonged and costly legal battles, defeating the purpose of settlements. The question whether JCB s stance is misleading or not would have been for the High Court to decide, not the CCI. Thereafter, the Information makes an reference to the ad-interim injunction dated 25th November, 2011 granted by the Delhi High Court. The allegation is that the litigation in itself is an overall diabolical and insidious strategy and is a misuse of judicial process. In the entire Information, the repeated allegations are of abuse of judicial process and regulatory process. Details of various hearings in the Delhi High Court are set out in the Information. The consequences of the litigation are set out in the Information and it is argued that JCB abused its dominance in view of the said litigation, which is termed as a predatory litigation - No issues regarding anti-competitive practices were also raised in the information, apart from the allegation of abuse of dominant position in the garb of filed injunction suit and being lead players in the market. In the present dispute also the substratum of the dispute being the design infringement action filed by JCB for protection of its registered designs, the said suit having itself being settled, in the opinion of this Court, the CCI proceeding cannot continue and deserves to be disposed of - This is in line with the decision of the Division Bench in Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission of India Anr. [ 2014 (1) TMI 1954 - DELHI HIGH COURT] where the Court categorically holds that once the settlement is reached, the substratum of the proceedings itself no longer exists. The settlement dated 22nd July, 2021 is taken on record. The impugned order dated 11th March, 2014 under Section 26(1) of the Act is set aside. The proceedings before the CCI in Case No. 105/2013 are accordingly terminated. The order dated 17th September 2014 passed by the ld. Metropolitan Magistrate is also set aside. Any material seized by CCI shall not be used in any other proceedings and be returned to JCB - the application is allowed.
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2024 (11) TMI 1083
Oppression and mismanagement under Sections 241 and 242 of Companies Act, 2013 - seeking a waiver for initiation of the proceedings under Section 244(1)(b) of the Companies Act, 2013 - HELD THAT:- The intention of legislature by introducing the proviso to Section 244 of the Companies Act, to grant a waiver is by way of an exception to the general law. It is not a waiver by conduct or by way of a right. Waiver herein would mean that a person is granted an exemption, in special circumstances from satisfying the pre-established conditions for instituting a judicial proceeding. In that eventuality, the concept of waiver under the proviso to Section 244, has to be strictly and rigidly followed, as it is a waiver by implication of law, which is carving out an exception, to the general provision to litigate, for the reason being that, if the said waiver is not granted, it would amount to that, the apparent legal disabilities to initiate the proceedings, were declined to be granted, due to non-satisfaction of the mandatory pre-conditions contained under Section 244 for initiating proceedings under Section 241 and 242. In this eventuality in the instant case, where the appellant has sought a waiver, by placing his case under Section 244 of the Companies Act, there has had to be an incidental consideration of, as to what would be the elements which would be required to be satisfied to permit the appellant to initiate proceedings under Section 241 of the Companies Act, against the respondents. In the instant case, since the waiver is a concept, added by the proviso to Sub-Clause (b) of Sub-Section (1) of Section 244, the philosophy of waiver shall not be read in exception to the principle provision, but it should be read as to be in addition to qualifying the conditions of the principal provisions of law. At times, the concept of waiver is under either of the circumstances, that, waiver by conduct or waiver by prescription of law. It normally resembles as to be a form of election of a right, but that may not be the case at hand, it is rather not an election, but rather a grant of a right claimed by attracting the proviso, and once it overrides or attempts to or intends to override the principal provision, a very rigid attitude has to be adopted for granting a waiver and that too particularly, when in the instant case where a right to proceed under section 241 was being sought by only one member of the club, that is the appellant herein, which is nowhere near to the prescribed strength of 1/5th of the total number of members as contemplated under Sub-Clause (b) of Sub-Section (1) of Section 244. The Hon ble Apex Court, as back as in 1965 in a matter reported in S. P. Jain versus Kalinga Tubes Limited [ 1965 (1) TMI 17 - SUPREME COURT ], had an occasion to deal with the precepts of oppression and in the said matter the Hon ble Apex Court was dealing with Section 153C in relation to The Indian Companies Act, 1913 and Section 397 in relation to the Companies Act of 1956. The Hon ble Apex Court had elaborately dealt with as to what would the term oppression would actually mean. The Tribunal has taken a view that, a waiver under the proviso could not be granted, because none of the other members have ever raised any grievances and since the proceedings under section 244 was sought by only one member in a company limited by guarantee the waiver under the proviso was denied. The proviso of Section 244 Sub-Section (1)(b) provides that provided that the Tribunal may on an application made to it in its behalf, waive all or any of the requirements specified in Clause (a) or Clause (b), so as to enable the member to apply under Section 241 . The use of word May is directory in nature. The waiver sought for, under the proviso is not an absolute waiver, which could be granted by the Tribunal as a matter of course because that would always depend upon the facts and circumstances of each case and grant of such waiver will be only when there is a strong case made out and not merely based on self-generated allegations. Further in the instant case the appellant has already instituted two Civil Suits, on the same subject matter, as it has been pleaded in his application under Section 244(1) and therefore the waiver has rightly been rejected. There are no merit in the appeal - appeal dismissed.
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Insolvency & Bankruptcy
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2024 (11) TMI 1082
Exclusion of commercial spaces from the assets of the Corporate Debtor - owners of the units allotted, on the basis of allotment of commercial spaces by the CD - dissenting Financial Creditors - entitlement for the amount as per Section 30, sub-section (2)(b) of IBC - sufficient grounds to interfere with the order passed by the Adjudicating Authority, approving the Resolution Plan. Whether the units allotted to commercial space buyers (the Appellant(s) herein), required to be excluded from the assets of the Corporate Debtor? - Whether the Appellant(s) on the basis of allotment of commercial spaces by the CD, by virtue of Lease Deed dated 24.12.2014 in respect to Appellant, the Appellant(s) are owners of the units allotted to them? - HELD THAT:- The Hon ble Supreme Court had occasion to consider a homebuyer s project in Jaypee Kensingston Boulevard Apartment Welfare Association ors. Vs. NBCC (India) Ltd. Ors. [ 2021 (3) TMI 1143 - SUPREME COURT ], where Hon ble Supreme Court has held that Resolution Plan has to comprehensively deals with all the assets and liabilities of the Corporate Debtor and no housing project could be segregated for the reason that the same has been completed or is nearing completion. Thus, by virtue of allotment of commercial space in favour of the Appellant(s), including the Lease Deed dated 24.12.2014, the Appellant(s) cannot claim to have become owners of the commercial spaces. The CD continues to own the assets and the plea of the Appellant(s) that assets be excluded from CIRP of the CD, or the Appellant(s) are owners of the commercial space/ units allotted to them, cannot be accepted. Whether the Appellant(s) being dissenting Financial Creditors, entitled for the amount as per Section 30, sub-section (2)(b)? - Whether the Appellant(s) had made sufficient grounds to interfere with the order dated 30.10.2023 passed by the Adjudicating Authority, approving the Resolution Plan submitting by the SRA? - HELD THAT:- As per Resolution Plan and the order passed by the Adjudicating Authority, the commercial space buyer are entitled for 100% of their principal amount with alternate option for commercial space buyers. Thus, as per the Resolution Plan, the Appellant(s) are entitled either to opt for 100% refund of the principal amount within 90 days or to opt for an alternate option for commercial space, which is part of Resolution Plan. Thus, the Appellant(s) under Section 30, sub-section (2)(b) were entitled for only liquidation value, which according to the Resolution Plan is zero . However, the SRA having offered 100% refund of the principal amount with alternative proposal for commercial space, the entitlement of Appellant(s) as per the Resolution Plan is of 100% refund of the principal amount or the option for alternate commercial space. The law with regard to interference with the commercial wisdom of the CoC approving the Resolution Plan is well settled. The limited ground on which the Adjudicating Authority or the Appellate Tribunal can interfere with the approval of the Resolution Plan is only to examine as to whether the Resolution Plan is in compliance of Section 30, sub-section (2) of the IBC. The present is not a case that Appellant(s) have pleaded or proved any ground that Resolution Plan is in violation of provisions of Section 30, sub-section (2) (b) - the payment offered to the Appellant(s) in the Resolution Plan, does not violate the provisions of Section 30, sub-section (2) (b) - there are no ground to interfere with the order dated 30.10.2023 passed by Adjudicating Authority approving the Resolution Plan. The question is answered accordingly. Whether rejection of IA 3524 of 2020, filed by the Appellant of Company Appeal (AT) (Ins.) No.61 of 2024 and the rejection of IA No.4369 of 2022 and 5253 of 2023 filed by the Appellant(s) of Company Appeal (AT) (Ins.) No.45 of 2024 deserve to be interfered with? - HELD THAT:- The prayer of the Appellant to exclude the commercial space from the Resolution Plan, could not have been accepted, nor any direction could have been issued for registration of Sale Deed. The claim, which was submitted by the Appellant was admitted in the CIRP. In the Appeal filed by Nupur Garg, at Annexure A-10, the list of financial creditors in the class of commercial space buyers has been annexed at page 175, which include the amount of claim submitted and amount of claim admitted by the RP - There has been no consideration of the claim of the rent by the Appellant from July 2019, which was one of the prayers made in the application, we are of the view that ends of justice will be served in granting liberty to the Appellant to file an appropriate application for claim of rent subsequent to commencement of CIRP. It shall also be open for the Appellant to claim the said rent as CIRP cost. However, no concluded opinion expressed for the said claim and it is for the Adjudicating Authority to consider and take appropriate decision. The order of the Adjudicating Authority upheld - appeal dismissed.
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Service Tax
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2024 (11) TMI 1081
Rejection of refund of amount pre-deposited u/s 35F of the Central Excise Act, 1944 - petitioner had earlier suffered an adverse order whereby the service tax demand was confirmed on the reimbursable expenses which was corrected/allowed by CESTAT - HELD THAT:- As per impugned order passed rejecting the claim of the petitioner clearly indicates that the petitioner has not produced any documents to substantiate the tax that was paid on the reimbursable expenses. The claim has not been substantiated by the petitioner. Under the circumstances, no merits in challenge the impugned order. However, one opportunity can be given to the petitioner to produce the documents before the respondents to substantiate that petitioner was indeed entitled for refund of the amount paid by the petitioner. The impugned order is quashed and the case is remanded back to the respondent to pass a fresh order. It is made clear that, it is the last opportunity to the petitioner to substantiate his claim. Since the impugned order was passed in the year 2019, the respondent shall pass order as expeditiously as possible preferably within a period of six months from the date of receipt of copy of this order. Petitioner is directed to cooperate with the respondent.
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2024 (11) TMI 1080
Refund claim on ocean freight - non taxability of service of ocean freight covered by judgment of SAL Steel Limited [ 2019 (9) TMI 1315 - GUJARAT HIGH COURT] on the ground that the matter is pending before the Supreme Court - HELD THAT:- Since the service of ocean freight was held by the Hon ble Jurisdictional High Court of Gujarat[supra} as unconstitutional and appellant was not liable to pay service tax on ocean freight, they are eligible for refund claim without following the refund process under Notification No.12/2013-ST. Revenue s contention that the Revenue s appeal is pending before the Hon ble Supreme Court in the case of SAL Steel Limited [supra] Hon ble Supreme Court decision in the case of Union of India vs. Mohit Minerals Pvt. Limited [ 2022 (5) TMI 968 - SUPREME COURT] as find that there is no stay against the said High Court judgment. In view of this position, I find no infirmity in the impugned order which was passed relying on the jurisdictional High Court judgment in the case of SAL Steel Limited. Accordingly, following the Hon ble Gujarat High Court decision in the case of SAL Steel Limited, the impugned order is upheld and the Revenue s appeal is dismissed Thus, as the ocean freight is not liable to service tax, appellant is eligible for the refund only on the ground of the non taxability of the ocean freight itself. Appellant is eligible for the refund.
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Central Excise
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2024 (11) TMI 1079
Clandestine removal - allegation of shortage of raw material for clearance of the finished goods - Procedural lapses in investigation and stock verification or not - Revenue submits that the respondent, since initiation of the investigation, has only tried to hide their incriminating activities by citing the shortcomings of the Departmental officers and have tried to divert the entire attention towards the allegedly procedural lapses during the investigation - HELD THAT:- It is an admitted position that the investigation which has been carried out, lacks the following of proper procedure. To allege clandestine removal of goods, proper procedure was required to be followed. During the course of investigation, it is a position on the record, that physical verification of the stock was not done; it was only done on eye-estimation basis and the alleged shortage of raw material has not been supported by any tangible evidence. Although allegation of clandestine clearance thereof has been raised by the investigating team, the suppliers of raw material were examined and no discrepancies could be found in the raw materials supplied to the respondent. Before adjudication, the adjudicating authority had sought a report from the jurisdictional Range Officer, who had also not found any discrepancy in the activity of the respondent - Moreover, it has been alleged that the respondent has manufactured the final product and cleared the same clandestinely, but while doing so, the Revenue on the one side alleges that there was a shortage of raw material and on the other side, alleges clandestine clearance of finished goods, all the while without bringing any evidence on record to show as to from where the respondent procured raw materials to manufacture the goods which were alleged to have been cleared clandestinely. The investigating team has not alleged any excess consumption of electricity, shown as to how the goods were transported or as to how much labour was employed. The observations made by the ld. adjudicating authority in the impugned order agreed upon. It is also seen that no tangible evidence in support of the allegation of shortage of raw material for clearance of the finished goods has been brought on record by the Revenue, other than the statement recorded during the investigation of Shri Munnoo Prasad Jaiswal, the authorized signatory of the respondent. The charge of clandestine removal of the goods and shortage of raw materials is not sustainable - There are no infirmity in the impugned order and the same is upheld - the appeal filed by the Revenue is dismissed.
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2024 (11) TMI 1078
Denial of CENVAT Credit on the basis of shortages shown in the Cost and Audit Report - HELD THAT:- Despite the fact that shortage of inputs was noticed and recorded in the Cost Audit Report, Appellant has attributed those shortages to different factors which were bound to happen when theoretical calculation was made without actual physical verification of stock, as there could be wrong entries of input, variation in weighment of input with that of rounded up figures available in the bills or that of wrong accounting but the ground taken for shortages including theft, if noticeable, would lead to different consequence. However, in the instant case, taking note of the percentage of shortages that was noticed for different financial years, when the procurement of material were too large the value of which runs in crores, such negligible shortages could be a natural consequence for which even protection is granted by the Hon'ble Supreme Court, as found in M/s. Maruti Udyog Limited case [ 2004 (6) TMI 155 - CESTAT, NEW DELHI ] that if shortages is very negligible and there is no allegation of clandestine removal or even no proof of excess clearance of final products or inputs as such, availment of credit by the manufacturer need not be interfered with. In Appellant s case except for FY 2009-10 percentage of shortages in rest of years, to which extended period was unnecessarily invoked, since in its preceding 3 years shortages were even much lesser than the shortages noted in M/s. Maruti Udyog Limited case (0.24%), denial of credit to the Appellant was improper - It is required to set aside the order passed by the Commissioner in due obedience to the judicial precedent set by the Hon'ble Supreme Court of India. The order passed by the Commissioner of Central Excise, Pune-I dated 30.10.2013 is hereby set aside - Appeal allowed.
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2024 (11) TMI 1077
Classification of goods - unglazed ceramic wall tiles or burnt clay building bricks/tiles - Department is of the view that the impugned goods manufactured by the appellant are unglazed ceramic wall tiles classifiable under sub-heading 6907 10 90 of Central Excise Tariff Act, 1985, while the claim of the appellant is that their product is burnt clay building bricks/tiles falling under heading 6904 10 00 Roofing tiles tall under heading 6905 10 00 of Central Excise Tariff Act, 1985 - Availability of SSI exemption under Notification No. 1/2011-CE. HELD THAT:- The issues involved in the present case are no more res integra and have been decided by the Appellate Authority as well as by the Adjudicating Authority and also by this Tribunal in favour of the appellant. In this regard, reference made to the decision in the case of M/s Modern Bricks Engg. Works, Derabassi, whereby the Appellate Authority has allowed the appeal of the assessee by vide O-I-A No. 137-138/CE/Appl/Chd-II/2013 dt. 05.04.2013. Similarly, the Appellate Authority allowed the appeal of the appellant in the case of M/s Bharat Bricks Co., Village Fatehpur, Derabassi vide O-I-A No. 198/CE/Appl/Chd-II/2013 dt. 22.05.2013. Further, it is found that the Tribunal vide Final Order No. 61382/2016 dt. 16.09.2016 in the appellant s own case [ 2016 (11) TMI 691 - CESTAT CHANDIGARH] , has allowed the appeal of the appellant. It is also found that the demand for the subsequent period i.e. 01.05.2014 to 31.12.2015, in the appellant s own case, has also been dropped by the Additional Commissioner, Central Excise, Chandigarh-II vide Order-in-Original No. 37-38/CE/2016-17/ADC/CHD-II/SRM dt. 31.03.2017. All these orders passed by the various departmental authorities as well as the Tribunal have been accepted by the Revenue. The impugned orders are not sustainable in law and therefore, the same is set aside - appeal allowed.
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CST, VAT & Sales Tax
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2024 (11) TMI 1076
Imposition of penalty u/s 22(5) of the TNVAT Act, 2006 - petitioner would submit that the petitioner has paid the tax immediately after the inspection for the assessment years and therefore, there was no question of any best judgment assessment involved in the present case - HELD THAT:- The petitioner cannot escape from the penal consequence under Section 22(5) of the TNVAT Act, 2006 merely because the tax was paid after inspection and before the assessment order dated 29.12.2017 was passed under Section 22(5) of the TNVAT Act, 2006. The question of filing a revised return on 31.07.2016 was also not available in view of the Rule 7(9) of the TNVAT Rules, 2007. As per Rule 7(9) of the TNVAT Rules, 2007, only if a return was filed and the dealer finds any omission or error, he can file a revised return rectifying the omission or error within a period of six months from the last day of the relevant period to which the return relates. Revised return cannot be filed if the tax payable is unearthed on account of an inspection or audit or receipt of any other information or evidence by the assessing authority. The question of self assessment on the so called return filed on 31.07.2016 cannot be countenanced. The provision of Section 22(5) of the TNVAT Act, 2006 is clear. The authorities have no discretion to either drop penalty where tax has been evaded. Even if no best judgment has been made, the tax payable by the petitioner after evasion was noticed during inspection has been admitted. The fact remains that the tax was not paid in time and tax has been paid pursuant to the inspection on 15.07.2016. The return that was purportedly filed on 31.07.2016 is not a return recognized under the provisions of TNVAT Rules, 2007. It was not return in the eye of law. The decision rendered by the Hon'ble Supreme Court in the context of Section 16 of TNGST Act, 1959 which was followed by the Division Bench of this Court in Ram Sun Fabi Techs Case [ 2008 (11) TMI 645 - MADRAS HIGH COURT] cannot be applied to the facts of these cases as the provisions are different. These Tax Case Revisions are dismissed.
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Indian Laws
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2024 (11) TMI 1111
Power and jurisdiction to extend the period, after the expiry of the Arbitral Tribunal's mandate - Whether the application filed by the appellant under Section 29A(4) of the Arbitration and Conciliation Act, 1996 for extension of the mandate of the Arbitral Tribunal ought to have been allowed by the High Court? Whether the application for extension can be entertained if it is filed after the expiry of the Arbitral Tribunal s mandate? - HELD THAT:- When must an application under Section 29A(4) be filed - The effect of the provision is that if the arbitral award is not made within 12 months from when the pleadings are completed, extendable by a further 6 months by mutual consent of parties, the Tribunal s mandate will terminate, unless the court either prior or after the expiry of the period, extends it. The wording of subsection (4) clearly and explicitly enables a court to extend the Tribunal s mandate after expiry of the statutory and extendable period of 18 months. The issue is no longer res integra in view of a recent decision of this Court in Rohan Builders [ 2024 (10) TMI 1393 - SUPREME COURT (LB) ] The case squarely covers the issue against him - This Court in Rohan Builders has held that the application for extension of time can be filed even after the expiry of the period in sub-sections (1) and (3). Even if sub-section (4) provides for the termination of the Tribunal s mandate on the expiry of the period, it recognises party autonomy to move an application before the Court for further extension. Thus, the termination of mandate under the provision is only conditional on the non-filing of an extension application, and cannot be taken to mean that the mandate cannot be extended once it expires. The wording of Section 29A(4) and the decision in Rohan Builders clearly answer the first issue in favour of the appellant, i.e., an application for extension can be filed either before or after the termination of the Tribunal s mandate upon expiry of the statutory and extendable period. Whether an extension of time should be granted in the present case? - HELD THAT:- As per Section 29A(5), the decision to extend the time is an exercise of discretion by the court and must be done on sufficient cause being shown, and on such terms and conditions that the court deems fit. The issue is not whether the application under Section 29A(4) is filed within the permissible time for seeking extension, i.e., 12 months, followed by another 6 months at the consent of the parties. The real issue is whether there is a sufficient cause for the Court to extend the period for making of the award. For considering whether there is a sufficient cause or not, it is necessary to take into account the following events. As indicated earlier, even before expiry of the period of 12 months under Section 29A(1), commencing from 09.10.2019 (date of completion of pleadings), the COVID pandemic had started. The period between 15.03.2020 and 28.02.2022 is anyways mandated to be excluded from periods of limitation - thus, it is clear that the reasoning adopted by the High Court in holding that there is a delay of 2 years, 4 months in filing the application is erroneous. The meaning of 'sufficient cause' for extending the time to make an award must take colour from the underlying purpose of the arbitration process. The primary objective in rendering an arbitral award is to resolve disputes through the agreed dispute resolution mechanism as contracted by the parties. Therefore, 'sufficient cause' should be interpreted in the context of facilitating effective dispute resolution. Having taken note of the fact that the pandemic had commenced even before the expiry of 12 months from the completion of pleadings, this Court excluding the period between 15.03.2020 to 28.02.2023 in Re: Cognizance for Extension of Limitation [ 2022 (1) TMI 385 - SC ORDER ], and the agreement between the parties on 05.05.2023 to seek extension of time by filing an application before the Court, it is opined that there is sufficient cause for extension of time. The order and judgment passed by the High Court is set aside - civil appeal allowed.
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2024 (11) TMI 1110
Locus standi of appellant, M.R. Ajayan, to prefer this SLP against the impugned order - proceedings in question to be hit by the bar under Section 195(1)(b) Cr.P.C. or not - Correctness of de novo steps to be taken against the appellant. Whether M.R. Ajayan, appellant in SLP(Crl.)No.4887 of 2024 has the locus standi to prefer this SLP against the impugned order? - HELD THAT:- The locus of a private individual seeking the exercise of jurisdiction of this Court under Article 136 of the Constitution is no longer res integra. This Court in National Commission for Women [ 2010 (7) TMI 1131 - SUPREME COURT ] has observed that an appeal by a private individual can be entertained, both sparingly and after due vigilance, following the exposition of law in Arunachalam [ 1980 (2) TMI 271 - SUPREME COURT ]. Furthermore, in Amanuallah [ 2016 (4) TMI 1474 - SUPREME COURT ], this Court dealt with this issue in detail and observed ' From the material placed on record, it is clear that the appellants have precise connection with the matter at hand and thus, have locus to maintain this appeal.' More recently, similar to the case at hand, in Naveen Singh v. State of U.P. (2- Judge Bench) [ 2021 (3) TMI 1466 - SUPREME COURT ] , while considering the locus of the Petitioner therein, this Court observed that since the allegations concerned tampering with the order of the Court, hence locus is not that important but, in fact, insignificant with the State not carrying forward the matter any further. The locus standi of the appellant in SLP(Crl.)No.4887 of 2024, does not come in the way of this Court hearing the same. The case at hand, which has been quashed by the High Court, involves serious allegations of interference with judicial processes which strike at the very foundation of both dispensation and the administration of justice. Therefore, the first issue is answered in the affirmative as it is incumbent upon this Court to check the correctness of the approach adopted by the High Court, and the locus of the appellant would not come in the way of the same. Whether the High Court has rightly held the proceedings in question to be hit by the bar under Section 195(1)(b) Cr.P.C.? - HELD THAT:- In the instant case, the High Court, on the basis of the above bar on taking cognizance, has quashed the order taking cognizance and proceedings emanating therefrom. This approach was not correct - On a perusal of the FIR, it is clear that based on the letter issued by the Kerala High Court dated 27th September, 1994 and by the District Judge, Trivandrum, the offence was registered against the accused persons. The criminal proceedings clearly do not arise from a complaint by a private individual. The initiation of the present proceedings in the present case, was from the judgment and order dated 5thFebruary, 1991 of the Kerala High Court in Criminal Appeal No. 20 of 1991, in acquitting Andrew Salvatore directing the matter of planting of Mo2 be positively looked into. This was followed by an investigation by the vigilance officer of the Court. Therefore, in the impugned order, the High Court has erroneously observed that there is no judicial order concerning the present proceedings. There is no distinction between a judicial or administrative order by a Court to which that Court is subordinate - the question is answered in the negative. Independent of the above, whether the High Court could have ordered de novo steps to be taken against the appellant? - HELD THAT :- Reference made to the judgment of this Court in Sunita Devi v. State of Bihar Anr. (2-Judge Bench) [ 2024 (5) TMI 1489 - SUPREME COURT ] , wherein it was stated ' An Appellate Court has got ample power to direct re-trial. However, such a power is to be exercised in exceptional cases. The irregularities found must be so material that a re-trial is the only option. In other words, the failure to follow the mandate of law must cause a serious prejudice vitiating the entire trial, which cannot be cured otherwise, except by way of a re-trial. Once such a re-trial is ordered, the effect is that all the proceedings recorded by the Court would get obliterated leading to a fresh trial, which is inclusive of the examination of witnesses.' Applying the above principles to the case at hand, the alleged forgery of evidence in a criminal investigation has resulted in acquittal in the NDPS case and, thereafter, an FIR has been registered, in the circumstance referred to hereinbefore. But then, the interference by the High Court in quashing the criminal proceedings was unwarranted. In view of the above the impugned order is set aside - Appeal allowed.
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2024 (11) TMI 1075
Seeking appointment of a sole arbitrator to adjudicate the disputes between the parties - Section 11 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Since the existence of the arbitration agreement is evident from a perusal of the Agreement, there is no impediment to appointing an independent Sole Arbitrator to adjudicate the disputes between the parties as prayed for, and as mandated in terms of the judgments of the Supreme Court in Perkins Eastman Architects DPC v. HSCC (India) Ltd [ 2019 (11) TMI 1154 - SUPREME COURT] , TRF Limited v. Energo Engineering Projects Ltd, [ 2017 (7) TMI 1288 - SUPREME COURT] , Bharat Broadband Network Limited v. United Telecoms Limited., [ 2019 (4) TMI 983 - SUPREME COURT] and Interplay between Arbitration Agreements under the Arbitration Conciliation Act, 1996 the Indian Stamp Act, 1899, In SBI General Insurance Co. Ltd. v. Krish Spinning [ 2024 (9) TMI 606 - SUPREME COURT] . In the circumstances, since there is no controversy as regards the existence of the arbitration agreement, there is no impediment to appointing a sole arbitrator to adjudicate the disputes between the parties - Ms. Prity Sharma, Advocate (Mob. No. +91 9911028589) is appointed as the Sole Arbitrator to adjudicate the disputes between the parties. Petition disposed off.
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