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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter December 28, 2021 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Central Excise Indian Laws Articles HSN Summary Table in GSTR-9 is optional for F.Y. 2020-21 Amendments proposed in Section 129 and 130 of the CGST Act, 2017 notified w.e.f. January 01, 2022 Notified clarification w.r.t recovery of self-assessed tax w.e.f. January 01, 2022 Notified the amendments proposed in Section 74, 107, 151, 152 and 168 of the CGST Act, 2017 w.e.f. January 01, 2022 News NITI Aayog Releases Fourth Edition of State Health Index Notifications Customs 77/2021 - dated 27-12-2021 - ADD Seeks to impose ADD on "Decor Paper" originating in or exported from China PR for a period of 5 years. 104/2021 - dated 27-12-2021 - Cus (NT) Seeks to amend Notification No. 98/2021-CUSTOMS (N.T.), dated 16th December, 2021 GST - States F A 3-43/2017/1/V (89) - dated 16-12-2021 - Madhya Pradesh SGST Amendment in Notification No. FA-3-43-2017-1-V(55) dated the 30th June, 2017 F A 3-42/2017/1/V (88) - dated 16-12-2021 - Madhya Pradesh SGST Amendment in Notification No. F-A-3-42-2017-1-V(53), dated the 30th June, 2017 34491-FIN-CT1-TAX-0002/2021 - dated 10-12-2021 - Orissa SGST Seeks to amend Notification No. 19893-FIN-CT I -TAX-0022/2017, dated the 29th June,2017 34485-FIN-CT1-TAX-0002/2021 - dated 10-12-2021 - Orissa SGST Seeks to amend Notification No. 19873 dated 29.06.2017 bearing S.R.O. No. 306 relating to exemption of intra State supply of services 34479-FIN-CT1-TAX-0002/2021 - dated 10-12-2021 - Orissa SGST Seeks to amend Notification No. 29849-FIN-CT1-TAX-0002/2020, dated the 29th October, 2021 34469-FIN-CT1-TAX-0001/2021 - dated 10-12-2021 - Orissa SGST Odisha Goods and Services Tax (Ninth Amendment) Rules, 2021 Highlights / Catch Notes GST Cancellation of Bail - violation of conditions of Bail - generation of black money and hawala transactions - issuance of fake paper invoices - Section 70 of the CGST Act, 2017 - It cannot be observed to the effect that the applicant/ petitioner had violated the condition no.4 of the order dated 05.12.2020 in as much as investigation in the matter qua any future commission of the offence after 05.12.2020 is still in progress as submitted on behalf of the respondent and presently there are only disclosure statements of two accused - order of cancellation of bail set aside - HC Visit to Get Source Income Tax Benefit of DTVSV Act with respect to certain pending income tax litigations before various appellate levels - pendency of these two criminal proceedings - both the proceedings are cases where prosecution was instituted since in both cases an FIR had been duly lodged. Both cases charge petitioner as having conspired to commit offences under the PC Act, thus casting a shadow on the monies sought to be offered to tax. - The charge against petitioner would have to be read as composite whole as framed and cannot be segregated - HC Visit to Get Source Penalty u/s. 271(1)(b) - assessee failed to give reasons for non-compliance of statutory notice u/s. 142(1) - till the disposal of appeal by the CIT(A) the assessee failed to furnish required evidences, information, documents, vouchers, etc. before the authorities below and in penalty proceedings no reasonable cause was shown for non-compliance of notice issued u/s. 142(1) - Levy of penalty confirmed - AT Visit to Get Source Disallowance on account of depreciation claimed on the cost incurred in relation to the land being non depreciable asset - To our understanding, the impugned expenses were not incurred by the assessee for the acquisition of the land rather cost was incurred for effective functioning of the windmills. Therefore, such cost was directly connected with the functioning of windmill. Thus there was commercial expediency to incur the expenses hence assessee was eligible to claim such expenses. - AT Visit to Get Source Revision u/s 263 by CIT - receipt of share premium - the power of revision u/s 263 does not allow for supplanting or substituting the view of the Assessing Officer. The appreciation of material placed before the Assessing Officer is exclusively within his domain which cannot be interdicted by a superior officer while exercising powers u/s 263 of the Act on the ground that if he had appraised the said material, he would have come to a different conclusion - AT Visit to Get Source Claim of balance additional depreciation on the assets which were put to use in earlier year - Number of days asset put to use - whether machinery is put to use for less than 180 days ? - The very objective of insertion of a new proviso to section 32(1) is that to remove discrimination and therefore it can be safely said that the same is just a curative amendment. Even there is no provision u/s. 32(1) prohibiting the balance additional depreciation in the succeeding year. - AT Visit to Get Source Addition u/s 68 - Bogus share transactions - penny stock purchases - The facts of the case and the evidences clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee exempted u/s 10(38) of the Act on the basis of suspicion, surmises and conjectures. It is to be kept in mind that suspicion how so ever strong, cannot partake the character of legal evidence. - AT Visit to Get Source Depreciation disallowed on the reason that 4 trademarks have been included in the block of assets are not put to use - in relation to block of assets, it is not possible to segregate the each trademark from the block for the purposes of granting depreciation and thereby restricting the claim thereof. Once it is found that the assets are used for business purpose out of particular block, it is not necessary that all the item falling within that block have to be simultaneously used for being entitled to depreciation - AT Visit to Get Source Customs MEIS - Seeking direction to remove the name of the petitioner from the Denied Entity List - benefit of Merchandise Export from India Scheme - The contention that unless and until the petitioner pays up the entire duty and penalty imposed under the orders passed by the DGFT and custom authorities the petitioner cannot claim any export incentive under the new scheme is completely unacceptable. Both the orders are under challenge before the first appellate authorities. Respective statutes require pre-deposit of certain amounts upon which rest of the recoveries would be suspended. - HC Visit to Get Source PIL - There is no prohibition, restriction or regulation to sale, purchase, possession or breeding of the exotic species within India under the provisions of the Customs Act, 1962 or even the Wildlife Act. Seizure of these exotic species would be contrary to the provisions of the Customs Act, 1962 and no such direction can be issued. - HC Visit to Get Source Smuggling - Gold - validity of continued detention of the detenues - COFEPOSA - The detenue was free to produce materials to question the detention made against him and the Advisory Board has no obligation to summon any person or to call for records over and above the files placed before it. The Advisory Board in the instance case has opined that it was necessary to continue the detention. We do not not think that the detenue has been denied the protection either under Article 21 or 22 of the Constitution of India. The detenue did get the opportunity for making an effective representation against his detention - the contention is rejected. - HC Visit to Get Source Levy of penalty u/s 112 of Customs Act on Chartered Accountant (CA) - allegation of fabricating documents and wrongly verifying statements - There are no hesitation to hold a finding that principles of natural justice has not been followed by the Commissioner of Customs (Export-II) and she has flouted the clear direction contained in the remand order to follow principles of natural justice, though passed in respect of the principal importer/appellant - No penalty - AT Visit to Get Source Exemption from levy of Integrated Goods & Service Tax - re-import of parts/engines of aircraft sent outside the country for repair - Appellant is thus entitled to exemption from payment of integrated tax under the Exemption Notification on reimport of repaired parts/ aircrafts into India. - AT Visit to Get Source Indian Laws Dishonor of Cheque - suspended director - Since the petitioner is not a juristic person, but is a natural person, and, though he is a suspended director, yet when he is an erstwhile director of the corporate entity concerned, rather prima facie, at the relevant stage of issuance, was incharge of, and, responsible for the company, and, of the business of the corporate debtor. Therefore, the issuances of summons against him, through the making of the impugned order, does not suffer from any illegality. - HC Visit to Get Source IBC Rejection of claim of wages - Section 40(2) of I&B Code - Some of the Appellants failed to provide any proof of having been appointed in service of employment of the Corporate Debtor and that the benefit accruing to the Appellants shall be subject to documents available on record with the Respondent unless otherwise proven with sufficient evidence that the Appellants were in employment of Corporate Debtor and that the Appellants without properly responding to the communication addressed to them, have now come with the above appeals. This cannot be accepted. - Tri Visit to Get Source PMLA Seeking grant of Anticipatory Bail - Socio-economic criminals are economically sound, therefore, in releasing them on anticipatory bail there is probability of abscondance not only within country but also beyond country. Usually socio-economic offenders abscond to some other country in order to escape themselves from Criminal Prosecution. The status and position of offenders provides opportunity to influence investigation and prosecution. - the instant anticipatory bail application is rejected. - HC Visit to Get Source Case Laws: GST 2021 (12) TMI 1145 Cancellation of Bail - violation of conditions of Bail - generation of black money and hawala transactions - issuance of fake paper invoices - Section 70 of the CGST Act, 2017 - HELD THAT:- It cannot be observed to the effect that the applicant/ petitioner had violated the condition no.4 of the order dated 05.12.2020 in as much as investigation in the matter qua any future commission of the offence after 05.12.2020 is still in progress as submitted on behalf of the respondent and presently there are only disclosure statements of two accused Manish and Vikas against the petitioner qua further alleged commission of offence after 05.12.2020, the condition no.4 of the order dated 05.12.2020 cannot be held to be violated presently. In view thereof though the order dated 22.12.2021 of the learned CMM, New Delhi, PHC setting aside the grant of bail granted vide order dated 05.12.2020 is set aside, it is essential to observe that direction dated 22.12.2021 of the learned CMM, New Delhi whilst disposing of the application seeking cancellation of bail as filed by the respondent herein before the learned CMM, New Delhi after the cancellation of bail granted - Petition disposed off. 2021 (12) TMI 1144 Provisional attachment of current Bank Account - direction to the Respondents to de-freeze the Petitioner s bank account - Section 83 of the CGST Act, 2017 - HELD THAT:- In view of the position of law vis-a-vis Section 83 of the Act, present writ petition is allowed and the respondents are directed to defreeze the petitioner s bank account bearing current bank Account No. 201001178495 maintained with M/s. IndusInd Bank Ltd., Ground Floor, 2w/3, West Patel Nagar, Opp. Metro Pillar No.195, New Delhi-110008. Writ petition stands disposed of. 2021 (12) TMI 1143 Seeking direction to make the payment/reimbursement of the applicable GST - Works Contract executed prior to GST implementation - HELD THAT:- It is deemed proper to direct the respondent No.3- Principal Secretary, Public Works Department, Government of M.P., Bhopal to decide the said representation which will be filed by the petitioner by a speaking order after providing opportunity of hearing to the representative of the petitioner within a period of three months from the date copy of this order is produced before him. Petition disposed off. 2021 (12) TMI 1142 Scope of Advance Ruling - Exempt goods or not - raw water that is supplied through tankers through the Bookwater platform - does the supplier of water through tankers come under supply of raw water or under transport services? - withholding of tax from the suppliers before making payments for the supply of raw water through our platform - transaction through an e-commerce operator - GST Registration applicable for all suppliers through the Bookwater platform - withholding of tax from the suppliers before making payments since the supplies have been made through our digital platform - HELD THAT:- It is evident that advance ruling are decisions on questions specified in sub section 97(2) of the Act in relation to the supply of goods or services undertaken or proposed to be undertaken by the applicant seeking the some. Hence, supplies undertaken or proposed to be undertaken by the applicant alone are covered under the advance ruling as per Section 95(a) of the Act. The Act limits the Advance Ruling Authority to decide the issues earmarked for it under Section 97(2) and no other issue can be decided by the Advance Ruling Authority. Section 52(1) of the Act, provides for collection of an amount calculated @1% on the net value of taxable supplies made through it by other suppliers. Thus, it is evident that the provision itself clearly distinguishes that the e-commerce operator is different from the Suppliers . As per Section 95(a) read with Section 103 (applicability of the Ruling), it is clear that the ruling is applicable to the supply being made or proposed to be made and the ruling extended is binding only on the Supplier who makes such supply, his jurisdictional officer and the concerned officer. In the case at hand, the applicant seeks ruling on the supplies being made through their platform by the Concerned suppliers mentioned at Section 52 and the questions raised are not on the supplies being made or proposed to be made by him. Further, the provision at 97(2)(e) allows this authority to admit questions on determination of the liability to pay tax. The applicant, who is an e-commerce operator, and not the supplier of Raw water and Sewage Evacuation Services, the question raised on the classification of supply, applicability of Notification for such suppliers, is not the question on supplies being or proposed to be undertaken by him. Therefore, there are no hesitation, to hold that the questions raised, do not pertain to the supply of the applicant and are not admissible for ruling as per Section 95(a)/103 read with Section 97(2) of the Act. Further, the applicant has sought ruling as to whether the applicant is to withhold TCS from the suppliers before making Payments to the Concerned suppliers . Section 52 of the Act governs the collection of amount by e-commerce operator in respect of supplies made through Such e-Commerce. The ambit of Advance Ruling do not provide for answering the questions raised on provisions relating to Tax Collected at Source provided under Section 52 of the Act. Further the amount collected as TCS is not in the nature of Tax - the questions are also not covered under the ambit of this authority as per Section 97(2) of the Act. The application are not admitted and the same is rejected. Income Tax 2021 (12) TMI 1141 Benefit of DTVSV Act with respect to certain pending income tax litigations before various appellate levels - HELD THAT:- As here is a clear purpose and intent to the provisions of Section 9(c) of the DTVSV Act which is to ensure that revenue which has been clogged and the income which is being offered to tax is not shadowed by a likelihood of the same having arisen from socio-economic crimes for which prosecution has been instituted. The DTVSV Act does not and cannot be read as providing a window to regularise tainted money. As at this point, noted that the pendency of criminal proceedings against petitioner is an admitted position. The petition itself provides which are the pending criminal proceedings against petitioner. There are two criminal proceedings pending against petitioner wherein petitioner is charged for having conspired (Section 120B of IPC) to commit offences of Cheating (Section 420 of IPC) as also offences under Section 13(1)(d) and Section 13(2) of the IPC Act. The charge against petitioner would have to be read as composite whole as framed and cannot be segregated, as read by Shri Nankani. It is, however, the case of petitioner that despite the pendency of these two criminal proceedings, it would not fall within the ambit of Section 9(c) of the DTVSV Act since in the first proceeding prosecution has not yet been instituted and in the second proceeding, it is not punishable for offences under the PC Act. In our view, both these contentions are misconceived and baseless. At the outset, with respect to the plea of prosecution not having been instituted, this issue stands squarely covered by Sashi Balasubramaniam [ 2006 (10) TMI 147 - SUPREME COURT] wherein the Hon ble Apex Court, whilst considering the provisions of the KVSS and the provisions of Clause 95(iii) thereof, after raising a specific issue as to when is a prosecution said to be instituted, answered the same stating that w ord prosecution assumes significance. The term prosecution would include institution or commencement of a criminal proceeding. It may include also an inquiry or investigation. The terms prosecution and cognizance are not interchangeable. They carry different meanings. Different statutes provide for grant of sanction at different stages - The term prosecution has been instituted would not mean when charge-sheet has been filed and cognizance has been taken. It must be given its ordinary meaning Both the proceedings are cases where prosecution was instituted since in both cases an FIR had been duly lodged, thus casting a shadow on the monies sought to be offered to tax. Also held that benefit of the KVSS 1998 scheme is not to be extended to those against whom a complaint is pending, therefore, this condition cannot be held to be arbitrary. In any event, the submission of petitioner that prosecution can be said to be instituted only upon cognizance being taken is of no use to petitioner as even then cognizance was taken in the second proceeding where chargesheet has been filed. Hence, the said issue would not arise. With respect to the second contention of petitioner, viz., that petitioner is not punishable for offences under the PC Act, the same also is faulty. Therefore, not only would this enquiry arise before the Tax Authority but even assuming such an enquiry were to arise, the same require consideration. Any finding by the Tax Authority on this issue, would amount to deciding on merits the two proceedings under the PC Act referred earlier. In light of the above, both the proceedings are cases where prosecution was instituted since in both cases an FIR had been duly lodged. Both cases charge petitioner as having conspired to commit offences under the PC Act, thus casting a shadow on the monies sought to be offered to tax. 2021 (12) TMI 1140 Reopening of assessment u/s 147 - Whether the reasons to believe has rational connection with the formation of the belief? - live link between the material connecting the notice of the Assessing Officer and the formation of belief regarding escapement of income - HELD THAT:- The reasons as made available to Petitioner merely indicates information received from the DDIT (Investigation), about certain entity entering into suspicious / questionable transactions. The entire information received has been reproduced in the reasons. In the information so reproduced, there is no mention or even a cursory reference to Petitioner. There is no link between the information received from the DDIT and Petitioner. The information / material received is not further linked by any reason to come to the conclusion that Petitioner has indulged in any activity which could give rise to reason to believe on the part of the Assessing Officer that income chargeable to tax has escaped assessment. Recorded reasons even does not indicate the amount which according to the Assessing Officer has escaped assessment. In our view, this is evidence of a fishing enquiry and not a reasonable belief that income chargeable to tax has escaped assessment. Moreover, AO alleges that substantial income (specified as above) chargeable to tax has escaped assessment for AY 2014-15 and accordingly notice under Section 148 of the Act for AY 2014-15 has been issued for the purpose of re-assessment. This shows non-application of mind not only by the Assessing Officer but also the sanctioning authority. If both these persons had read the reasons before putting their signatures, they would have found the error in the assessment year. There is nothing new in the reasons provided on 23/10/2019 save and except the assessment year has been corrected to reflect the correct assessment year in the last paragraph; but at the same time, our view expressed earlier that if only the sanctioning authority has read the reasons and applied his mind to the same, it would have indicated the error in the assessment year and that there is absolutely no link or nexus between the information received from DDIT and Petitioner. Therefore, in our view, the notice u/s 148 issued is set aside - Decided in favour of assessee. 2021 (12) TMI 1139 Reopening of assessment u/s 147 - eligibility of reason to believe - change of opinion - HELD THAT:- Petitioner is correct in its submissions that it is nothing but change of opinion. It is pertinent to note that there was scrutiny assessment under Section 143(3) of the Act. In the reasons recorded indicate the grounds on which re-assessment is sought to be initiated. Paragraph 3.1 starts with the words, During the year, in the submissions furnished by the assessee, it is found that the assessee company had shown 7 outlets but the company showed sales only from 2 outlets, i.e., one at Bandra and other at Colaba, debited expenses on account of 7 outlets. The new Assessing Officer has problem with the earlier Assessing Officer having allowed expenditure relating to all the 7 outlets when sales was shown only from 2 outlets. Paragraph 3.1 ends with the words, . therefore, the said expenditure cannot be allowable as business expenditure during the relevant AY 20120-13 being expenditure not related to the period under consideration . This is certainly change of opinion. Paragraph 3.2 also relates to payment of rent for 5 outlets and repairs and renovation for all the outlets and that paragraph ends as, .. The Assessing Officer has not examined these issues .. . Therefore, it is nothing but change of opinion based on which assessment cannot be re-opened. - Decided in favour of assessee. 2021 (12) TMI 1138 Specified date under the Direct Tax Vivad Se Vishwas Act, 2020 - procedure for the purpose of determination of the tax liability or a declaration which has been made - AA had declined to accept and extent the said benefit vide communication dated 25th January, 2021, on the ground, that as on the specified date , i.e. on 31.01.2020, the Appeal itself was not pending, as it was contemplated under the Act of 2020 - Contention of petitioners was that, since the Appeal was itself pending consideration as per the Act, their claim for determination of the tax liability will fall to be under Sections 3 and 4 of the Act - HELD THAT:- As pendency of a case or an appeal or a petition, as provided under Section 2 of the Act of 2020, has to be rationally considered to be pending, irrespective even if the appeal is pending along with the delay condonation application, and also in league and in agreement with the opinion expressed by the Division Bench that the Gujarat High Court, while dealing with such type of contingency or a situation as it cannot enlarge, the scope by widening its determination of consideration of an appellate jurisdiction by barging into its jurisdiction, to determine the question; as to whether at all the appeal itself was pending consideration at the time when, it was instituted when the Act was enforced w.e.f. 17th March, 2020. So far the argument of the learned counsel for the respondents in the light of the provisions contained under Section 2 (1) (a) (i) is concerned, the said provision would not be attracted in the present case, for the reason being that the said exception, which has been carved out was only on those cases, where the Assessing Officer or an order, which has been passed by the Commissioner Appeals or the Income Tax Appellate Tribunal; in an appeal and the appeal or revision was not pending at the relevant time, but since, in the instant case, no such situation has arrived at because the appeal itself was pending consideration since 2017, along with the delay condonation application, the provisions of (ii) of Section 2 (1) (a) of the Act, would not be applicable. In that view of the matter and for the reasons based on the principles consistently assigned by the law Courts, as already referred above, the Writ Petitions are allowed. The matter is remitted back to respondent No.1 to reconsider the application of declaration under Sections 3 and 4 of the Act of 2020 of the petitioner afresh exclusively on its own merits. 2021 (12) TMI 1137 Penalty u/s. 271(1)(b) - assessee failed to give reasons for non-compliance of statutory notice u/s. 142(1) - HELD THAT:- We note that as rightly pointed by the ld. DR under scrutiny assessment proceedings the AO is required to issue notice u/s. 142(1) of the Act along with questionnaire seeking information regarding the subjects notified under scrutiny. The assessee has to comply the same, failing with the AO has power to exercise its jurisdiction to impose penalty u/s. 271(1)(b) of the Act for failure to furnish returns, comply with notices, concealment of income etc. In the present case, the AO initiated proceedings under clause (b) of sub-section (1) of section 271 of the Act for failure to comply with a notice issued u/s. 142(1) of the Act. As discussed above and also born out from the orders of both the authorities below, we note that till the disposal of appeal by the CIT(A) the assessee failed to furnish required evidences, information, documents, vouchers, etc. before the authorities below and in penalty proceedings no reasonable cause was shown for non-compliance of notice issued u/s. 142(1) - Therefore, we find support in the arguments of the ld. DR that the CIT(A) rightly confirmed the penalty imposed by the AO u/s. 271(1)(b) of the Act for non-compliance on the part of the assessee. Therefore, we find no infirmity in the order of CIT(A) and it is justified. Accordingly, the sole ground raised by the assessee is dismissed. 2021 (12) TMI 1136 Disallowance u/s.14A with rule 8D of Income Tax Rule - HELD THAT:- Admittedly, there was no exempted dividend income received by the assessee and therefore there cannot be any disallowance under the provisions of section 14A read with rule 8D of Income Tax Rule. In holding so we draw support and guidance from the judgment of Corrtech Energy Pvt. Ltd.[ 2014 (3) TMI 856 - GUJARAT HIGH COURT] - we hold that there cannot be any disallowance under the provisions of section 14A read with rule 8D of Income Tax Rule. Accordingly, we do not find any infirmity in the order of learned CIT (A) and thus we uphold the same. Hence the ground of appeal of the Revenue is dismissed. Interest attributable on the amount diverted to non-commercial activities - HELD THAT:- Admittedly, the advance was given by the assessee in the earlier year. Before we touch the issue whether such advance was given for the purpose of the business or not, it is sufficient to note that the own fund being capital and reserve of the assessee at the beginning of the financial year in which amount was advanced stands which is much more than the capital advance as discussed above and this fact is undisputed. Thus it can be safely be presumed that the amount has been advanced by the assessee out of its own fund without involving any borrowed fund. Accordingly, the question of making the disallowance of the proportionate amount of interest on such capital advance does not arise. Hence, we do not find any reason to interfere in the order of the learned CIT (A). Thus we uphold the same. Hence the ground of appeal of the revenue is dismissed. Deduction claimed under the provisions of section 80IA - Initial assessment year - whether the unabsorbed depreciation pertaining to the period prior to the initial assessment year should be first set off against the against the profit of the eligible undertaking for the year under consideration? - HELD THAT:- In the case on hand, the commercial activity started from the assessment year 2009-10. However, the assessee has not chosen the assessment year 2009-10 as the initial assessment year. As such the assessee has chosen the initial assessment year 2012-13 which is within the provisions of law. The issue with respect to the selection of the initial assessment year has been resolved by the CBDT in its circular No. 1 of 2016 dated 15th February 2016.From the above there remains no ambiguity that it is the option of the assessee to choose the initial assessment year. Admittedly, the assessee has chosen the assessment year as the initial assessment year 2012-13 for claiming the deduction under the provisions of section 80 IA. The provisions of subsection 5 of section 80IA of the Act provides that the deduction shall be computed treating the eligible undertaking as the only eligible source of business. Thus, the provision itself provides that the deduction shall be computed without setting off the unabsorbed depreciation of earlier year when undertaking was not eligible. Indeed, the unabsorbed depreciation pertains to the eligible undertaking for the period post commencement of the commercial activities but before the initial assessment year when the units becomes eligible for deduction. This controversy has been answered by the Hon ble Madras High Court in case of Velayudhaswamy Spining Mills (P.) Ltd[ 2010 (3) TMI 860 - MADRAS HIGH COURT] . Thus we hold that the assessee is eligible for deduction under section 80IA of the Act without setting of/adjusting the unabsorbed depreciation of earlier years as alleged by the AO. Hence, we do not find any infirmity in the order of learned CIT (A) and thus we decline to interfere in his order. Thus the ground of appeal of the Revenue is dismissed. Disallowance on account of depreciation claimed on the cost incurred in relation to the land being non depreciable asset - AO during the assessment proceedings found that amount of depreciation claimed by the assessee on the windmill was inclusive of the depreciation on the cost incurred by the assessee for keeping the land open/ vacant near the area where the windmill was located - HELD THAT:- There is no dispute to the fact that the cost/expense was incurred by the assessee to keep the surrounding land where the windmill was installed as open and vacant. It was incurred for the effective functioning and maximum output of the windmill. Admittedly, the cost was incurred by the assessee for the purpose of the business and this fact was not doubted by the authorities below. The assessee has treated such cost as part of the cost of the windmill and therefore, the assessee has claimed the depreciation thereon. To our understanding, the impugned expenses were not incurred by the assessee for the acquisition of the land rather cost was incurred for effective functioning of the windmills. Therefore, such cost was directly connected with the functioning of windmill. Thus there was commercial expediency to incur the expenses hence assessee was eligible to claim such expenses. However we find that the assessee instead of claiming such expenditure separately added the same to the cost of windmill and claiming depreciation on the same which was accepted in the earlier years.- Decided against revenue. 2021 (12) TMI 1135 Addition u/s 56(2)(vii)(b) - difference in the purchase value of the properties as compared to the value fitted by Stamp Duty Authority - applicability of amendment brought to Section 56(2)(vii)(b) of the Act vide Finance Act, 2013 w.e.f. 01.04.2014 - HELD THAT:- The said Act was brought at theeginning of the FY-2013-14 and received assent by the President of India on 10.05.2013 which shows that the Finance Act, 2013 was enacted at the beginning of FY-2013-14 which will be applicable to the AY-2014-15. Therefore, the plea of the ld. Counsel for the assessee that the amended provisions would be applicable for AY-2015-16, in our view, is not correct, hence not tenable. However, the ld. CIT(A) under the wrong presumption went on to hold that the said provisions of Section 56(2)(vii)(b) of the Act were explanatory and hence retrospectively applicable. Though we agree with that, the amended provisions of Section 56(2)(vii)(b) of the Act would be applicable for the assessment year under consideration however, the reasoning given by the ld. CIT(A) in our view, was not correct, rather it was a simple case where the amended provisions of Section 56(2)(vii)(b) of the Act were directly applicable for the assessment year under consideration. In view of the above observations, we do not find merit in these grounds raised by the assessee/appellant and the same are accordingly decided against the assessee. Unexplained investment on purchase of the property - AO noticed that the assessee paid cash amount of ₹6,04,968/- in relation to the purchase of the aforementioned properties - HELD THAT:- During the appellate proceedings before the ld. CIT(A), the assessee argued that no such cash payment has been made for the purchase of the property. However, the assessee failed to submit any explanation regarding the source of the amount paid for the purchase of the property. In view of this, the ld. CIT(A) confirmed the additions made by the AO. Before us, neither anyone appeared nor any document filed to show the source of the cash payment made for the purchase of the property. In view of this, we do not find merit on this issue also. Hence these grounds are also decided against the assessee. 2021 (12) TMI 1134 Assessment u/s 153A - Proof of incriminating material found during the course of search - addition in the hands of the assessee which has been received by the assessee from employer - HELD THAT:- In the instant case, assessment was framed u/s 153A and it is an unabated assessment and no assessments were pending on the date of search initiated upon the assessee. While perusing the assessment order, we find that nowhere the AO has referred any incriminating material found during the course of search relating to the receipt of ₹ 10 lakhs by the assessee and, therefore, it clearly shows that no incriminating material found during the course of search conducted u/s 132 of the Act on 09/11/2017 in respect of receipt from employer. As held by the Hon ble High Court of Delhi in the case of Kabul Chawla, [ 2015 (9) TMI 80 - DELHI HIGH COURT] that if no incriminating material found during the course of search for making addition in the unabated assessment, addition cannot be made. We, therefore, following the above judgment, set aside the order of the CIT(A) and direct the AO to delete the addition of ₹ 10 lakhs received by the assessee from his employer - Decided in favour of assessee. 2021 (12) TMI 1133 Revision u/s 263 by CIT - receipt of share premium - As per CIT AO had failed to enquire into the veracity of the valuation report of shares furnished by the Chartered Accountant. It is a case of total lack of enquiry on the part of AO - distinction between lack of enquiry and inadequate enquiry - HELD THAT:- As specifically brought to the notice of the Assessing Officer that the appellant company issued 47850 preference shares of face value of ₹ 10 per share at premium to M/s. Kumar Sinew Developers Pvt. Ltd., a sister concern of the appellant and received a share premium - The appellant company also issued 1120 equity shares of face value of ₹ 10 per share to ICICI Asset Management Company Ltd. at a premium of ₹ 24,140/- per share and received share premium of ₹ 2,70,36,800/- and report of valuation of shares given by the Chartered Accountant was also furnished. In these circumstances, we do not agree with the ld. CIT-DR that no enquiry was made into the issue of receipt of share premium and the very fact that the Assessing Officer had called for report of valuation of shares given by Chartered Accountant goes to show that Assessing Officer had enquired and had gone into issues of applicability of provisions of section 56(2)(viib) . In the present case, from the observation made by the ld. PCIT in 263 order, it is clear that had the ld. PCIT appraised the report of valuation of shares placed before the Assessing Officer, he would not have accepted the valuation report. This observation, in our considered opinion, cannot be accepted in view of the fact that the power of revision u/s 263 does not allow for supplanting or substituting the view of the Assessing Officer. The appreciation of material placed before the Assessing Officer is exclusively within his domain which cannot be interdicted by a superior officer while exercising powers u/s 263 of the Act on the ground that if he had appraised the said material, he would have come to a different conclusion in view of the law laid down by the Hon ble Supreme Court in the case of Parashuram Pottery Works Co. Ltd.[ 1976 (11) TMI 1 - SUPREME COURT] . valuation of shares is a technical, complex problem, which should be left to the consideration of expert in the field and is surrounded by a number of myths and is not an exact science and is driven, inter-alia, by the purpose of valuation, statutory requirements, business factors, etc.. Valuation, in practice, is guided by a number of approaches as suitably adjusted for subjective circumstances. The report of an expert can be found fault by another expert in the field. Neither the Assessing Officer nor the Commissioner is competent to examine the veracity or the completeness of the valuation report given by an expert. The ld. PCIT cannot come to the conclusion that the report of valuation of shares is unacceptable in the absence of report from another expert. The material on record does not suggest any error in the methodology adopted in the report. The power of revision cannot be exercised to set-aside the assessment order to enable Assessing Officer to conduct another fruitless enquiry to reach the same result which was arrived at earlier, even if the enquiries held that it would be empty formatting as the shares were also issued to unrelated parties i.e. 1120 equity shares of face value of ₹ 10 per share to ICICI Asset Management Company Ltd. at a premium of ₹ 24,140/- as held in the case of CIT vs. Sakthi Charities [ 2000 (2) TMI 75 - MADRAS HIGH COURT] - Assessee appeal allowed. 2021 (12) TMI 1132 Delayed employee's contribution to provident fund - assessee argued contribution been paid before filing of the return.paid before filing of the return - Scope of amendment - HELD THAT:- We find that the issue is covered in favour of the assessee as the assessment year involved is AY 2017-18 and the Explanation-5 inserted by Finance Act, 2021 to section 43B w.e.f. 01.04.2021 is not applicable to the assessment year under consideration. See HARENDRA NATH BISWAS VERSUS DCIT, CIRCLE-29 KOLKATA [ 2021 (7) TMI 942 - ITAT KOLKATA] wherein held that we do not accept the Ld. CIT(A)'s stand denying the claim of assessee since assessee delayed the employees contribution of EPF ESI fund and as per the binding decision of the Hon'ble High Court in Vijayshree Ltd. [ 2011 (9) TMI 30 - CALCUTTA HIGH COURT] of the Act since assessee had deposited the employees contribution before filing of Return of Income. Therefore, the assessee succeeds and we allow the appeal of the assessee. 2021 (12) TMI 1131 Late deposit of employees share of PF ESI which were deposited after the due date but before the due date of filing of return of income - AO made the additions of the impugned amounts for the reasons that the assessee did not deposit the amounts of employees contribution as per the provisions of section 36(1)(va) - HELD THAT:- As decided in RAJA RAM VERSUS THE ITO, WARD 3 AND SANCHI MANAGEMENT SERVICES PRIVATE LIMITED VERSUS THE ITO, WARD 5 (2) , CHANDIGARH [ 2021 (11) TMI 370 - ITAT CHANDIGARH] assessee deposited the contribution of PF ESI belated in terms of section 36(1)(va) of the Act, however, the said deposits were made prior to filing of return of income u/s 139(1). Impugned additions made by the Assessing Officer and sustained by the Ld. CIT(A) on account of deposits of employees contribution of ESI PF prior to filing of the return of income u/s 139(1) of the Act, in both the years under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. - Decided in favour of assessee 2021 (12) TMI 1130 Claim of balance additional depreciation on the assets which were put to use in earlier year - Number of days asset put to use - whether machinery is put to use for less than 180 days ? - Scope of amended provision of section 32(1) - HELD THAT:- As decided in M/S RITTAL INDIA PVT. LTD. (NO. 1) [ 2016 (1) TMI 81 - KARNATAKA HIGH COURT] only 50% of the allowable depreciation i.e. sum equal to 10% of the actual cost of the plant and machinery is allowed because of the fact that the machinery is put to use for less than 180 days in that financial year, this would necessarily mean that the balance 10% additional depreciation can be availed in the subsequent assessment year, otherwise the very purpose of insertion of Clause (iia) would be defeated - beneficial legislation should be given liberal interpretation and that since the additional depreciation is a one-time benefit to encourage industrialization and therefore, the beneficial provision has to be construed reasonably, liberally and purposively to make it meaningful while granting additional allowance. Even in the Explanatory Notes to the Provisions of the Finance Act 2 issued by the CBDT, in Para 13.2 of the said Notes, it has been mentioned that the aforesaid amendment of providing balance of additional depreciation in the immediately succeeding year has been brought to remove discrimination in the manner of allowing additional depreciation on plant or machinery used for less than 180 days in the preceding year. The very objective of insertion of a new proviso to section 32(1) is that to remove discrimination and therefore it can be safely said that the same is just a curative amendment. Even there is no provision u/s. 32(1) prohibiting the balance additional depreciation in the succeeding year. - Decided against revenue. 2021 (12) TMI 1129 Late deposit of employees share of PF ESI which were deposited after the due date but before the due date of filing of return of income - AO made the additions of the impugned amounts for the reasons that the assessee did not deposit the amounts of employees contribution as per the provisions of section 36(1)(va) - HELD THAT:- As decided in RAJA RAM VERSUS THE ITO, WARD 3 AND SANCHI MANAGEMENT SERVICES PRIVATE LIMITED VERSUS THE ITO, WARD 5 (2) , CHANDIGARH [ 2021 (11) TMI 370 - ITAT CHANDIGARH] assessee deposited the contribution of PF ESI belated in terms of section 36(1)(va) of the Act, however, the said deposits were made prior to filing of return of income u/s 139(1). Impugned additions made by the Assessing Officer and sustained by the Ld. CIT(A) on account of deposits of employees contribution of ESI PF prior to filing of the return of income u/s 139(1) of the Act, in both the years under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. - Decided in favour of assessee 2021 (12) TMI 1128 Delay in depositing the employee s contribution towards PF/ESI - same stands duly deposited before the due date of filing the return of income u/s 139(1) of the Act - scope of amendment - HELD THAT:- We find that this tribunal in the case of Nipun Jain [ 2021 (12) TMI 1042 - ITAT AMRITSAR] has deleted the said disallowance on observing that the alleged amount of employee s contribution PF and ESI has been deposited befor the due date of filing return of income prescribed u/s 139(1) - also there is no doubt qua applicability of the amended provisions referred above, prospectively ad second aspect as considered/determined by the ld. CIT(A) qua retrospective application of the amended provisions of Section 36(1)(va) and 43B of the Act wherein Explanations have been inserted by Finance Act, 2021 qua employees share in respect of PF ESI Act, is also unsustainable - Decided in favour of assessee. 2021 (12) TMI 1127 Reopening of assessment u/s 147 - eligibility of reasons to believe - reason to suspect OR reason to believe - HELD THAT:- As in the reasons recorded, there is no allegation that there was any failure on the part of the assessee in not disclosing truly and fully material facts necessary for assessment. Under the circumstances, the assumption of the jurisdiction to reopen the assessment beyond the period of four years in exercise of powers u/s 147 of the Act is bad in law and contrary to the provisions of section 147 of the Act. Under the circumstances, on the aforesaid ground alone, the impugned reassessment proceedings deserve to be quashed and set aside. See SHRI NISHANTKANTILAL PATEL, SMT MUKTABEN NISHANTBHAI PATEL VERSUS INCOME TAX OFFICER, WARD-2 (2) , BHARUCH [ 2021 (2) TMI 531 - ITAT SURAT] The reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year. It is no doubt true that the court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening assessment. The reason for the formation of the belief must be held in good faith and should not be a mere pretence. From our above analysis of reasons recorded in the assessee`s case under consideration, we note that the reasons recorded by the assessing officer falls in the zone of reason to suspect and not reason to believe , therefore we quash the reassessment proceedings. - Decided in favour of assessee. Addition u/s 68 - Bogus share transactions - penny stock purchases - HELD THAT:- We find that there is absolutely no adverse material to implicate the assessee to the entire gamut of unfounded/unwarranted allegations leveled by the AO against the assessee, which in our considered opinion has no legs to stand and therefore has to fall. We take note that ld. DR could not controvert the facts which are supported with material evidences furnished by the assessee. We note that the allegations that the assessee/brokers got involved in price rigging/manipulation of shares must therefore consequently fail. At the cost of repetition, we note that the assessee had furnished all relevant evidences in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. Neither these evidences were found by the AO nor by the ld. CIT(A) to be false or fictitious or bogus. The facts of the case and the evidences clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee exempted u/s 10(38) of the Act on the basis of suspicion, surmises and conjectures. It is to be kept in mind that suspicion how so ever strong, cannot partake the character of legal evidence. CIT(A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed income of the assessee u/s 68 of the Act. We therefore delete the addition - Decided in favour of assessee. 2021 (12) TMI 1126 Reopening of assessment u/s 147 - Valid jurisdiction of ITO Ghaziabad to issue notice - Successor AO power in issuing the notice - AO recorded reasons for reassessment is different from AO who issued a notice u/s 148 - whether the reassessment framed by the AO i.e ITO, Hapur in pursuance to a notice dated 31.03.2016 u/s 148 of the Act, issued by Income-tax Officer, Ghaziabad who did not have jurisdiction over the case of the assessee, is valid one? - HELD THAT:- In the present case, it is an undisputed fact that Assessee is filing the return of income before ITO, Hapur and the ITO, Hapur had jurisdiction over the assessee. The ITO, Ghaziabad who did not have jurisdiction over the assessee, issued a notice u/s 148 of the Act on the basis of AIR/NMS information about cash deposits by the Assessee. Subsequently, ITO Ghaziabad vide letter dated 25.07.2016 transferred the records to ITO, Hapur as the jurisdiction over the assessee was with ITO, Hapur. Thereafter, ITO, Hapur proceeded to complete the assessment without even recording reasons to believe stipulated in section 147 or issuing any notice u/s 148 of the Act and continued the proceedings u/s 148 of the Act and passed order u/s 143(3) r.w.s 147 vide order dated 31.08.2016 on the basis of reasons recorded by ITO, Ghaziabad. Hon ble Gujarat High Court in the case of Hynoup Food Oil Industries Ltd. vs. ACIT [ 2008 (7) TMI 192 - GUJARAT HIGH COURT] has observed that AO recorded reasons for reassessment and AO issued a notice u/s 148 of the Act must be the same person. Successor AO cannot issue notice u/s 148 on the basis of reasons recorded by predecessor AO - in view of the well-settled principle that if a notice under section 148 of the Act has been issued without the jurisdictional foundation u/s 147 of the Act being available to the AO, the notice and the subsequent proceedings will be without jurisdiction and thus, liable to be struck down. - Decided in favour of assessee. 2021 (12) TMI 1125 Exemption u/s 11 - As per AO activities carried out by the assessee company are in the nature of advancement of other general public utility in the nature of trade/commerce/business and therefore, the activities carried out by the assessee cannot be reckoned as attributable to charitable purpose within the meaning to Section 2(15) - HELD THAT:- The Coordinate Bench in assessee s own case for A.Y. 2009-10 to 2011-12 held that the assessee company cannot be said to be conducting affairs solely on commercial lines with a motive to earn profit and consequently proviso to Section 2(15) of the Act does not trigger in the case of the assessee. Such view of the Coordinate Bench has been ultimately affirmed by the Hon ble Jurisdictional High Court in the case of CIT vs. Gujarat Industrial Development Corporation [ 2017 (7) TMI 811 - GUJARAT HIGH COURT] - as assessee was not involved in the activities in the spirit of commercial accommodation and therefore falls within the ambit of definition of charitable purpose contemplated under s.2(15) of the Act. In view ofthe foregoing, we find that the relief sought by the assessee to the extent that the activities carried on by the assessee should be recognized to be of charitable nature requires to be endorsed. - Decided in favour of assessee. Addition on account of deemed rent - deemed rent from various fact/unoccupied plots/shade added to the total income of the assessee - HELD THAT:- Considering the entire aspect of the matter we find that when the appellant has an exempt entity Chapter-3 of the matter would be applicable in its case and not the provision of Chapter-4 of the Act. Therefore, the addition of deemed rent would fall under the head income from house property under Chapter-4 of the Act and therefore, the addition is not sustainable. Considering this aspect the order passed by the Ld. CIT(A) in deleting addition in our considered view is just and proper and so as to warrant interference. Depreciation as per normal commercial principles and rule of accountancy - AO is required to re-examine the issue afresh in accordance with law considering the assessee as a Charitable Institution. 2021 (12) TMI 1124 Set off of MAT credit u/s.115JAA of brought forward from earlier years against tax on total income including surcharge and education cess instead of adjusting the same from tax on total income before charging such surcharge and education cess - HELD THAT:- We find that this issue is no longer res integra in view of the decision of the Hon ble Calcutta High Court in the case of SREI Infrastructure Finance Ltd.,[ 2016 (8) TMI 967 - CALCUTTA HIGH COURT] and CIT vs. Vacment India [ 2014 (10) TMI 787 - ALLAHABAD HIGH COURT] wherein it was categorically held that surcharge and education cess are part of income tax. These High Court decisions were followed by series of the Tribunal decisions across the country and hence, this issue is no longer res integra. Respectfully following the aforesaid decisions, we hold that for the purpose of MAT credit to be carried forward to subsequent years, tax portion should include surcharge and education cess. Respectfully following the same, we do not find any infirmity in the order of the ld. CIT(A granting relief to the assessee. Accordingly, the grounds raised by the Revenue are dismissed. 2021 (12) TMI 1123 Depreciation on purchase of trademark - main argument of the ld.AR is that consideration paid is only related to the trademark for Jealous and it has not related to other trademarks viz., Analyse , Detour JLS - HELD THAT:- we find that the agreement entered for acquisition of four trademarks and not for one trademark. Being so, we are not in agreement with the arguments of the assessee s counsel. Depreciation disallowed on the reason that 4 trademarks have been included in the block of assets are not put to use - It is not the case of the AO that the assets were not put to use at all. The contention of the ld.DR is that only the brand Jealous was put to use in the asst. year under consideration, as such, only this brand is entitled for depreciation and not other 3 brands. All these 4 brands falling under one block of assets and even one of the brads is put to use, it is not possible to restrict the depreciation on the said brand only by stating that a portion of block assets only has been put to use. In our opinion, in relation to block of assets, it is not possible to segregate the each trademark from the block for the purposes of granting depreciation and thereby restricting the claim thereof. Once it is found that the assets are used for business purpose out of particular block, it is not necessary that all the item falling within that block have to be simultaneously used for being entitled to depreciation . In view of this, we are of the opinion that lower authorities are not justified in rejecting the claim of depreciation on the block of these assets and the assessee to be granted depreciation at the prescribed rate for this block of assets. Accordingly, we allow this ground of appeal of the assessee. Customs 2021 (12) TMI 1122 Maintainability of disciplinary proceedings - delayed issuance of the charge-sheet - Should the disciplinary proceedings initiated against the petitioner under rule 14 of the Central Civil Services (Classification, Control and Appeal) Rules and served immediately preceding his retirement on superannuation, be interdicted and nullified on the ground of delay as well as subsequent acquittal in judicial proceedings? HELD THAT:- The petitioner has not specifically argued that issuance of a charge-sheet containing stale charges is arbitrary. However, on facts and in the circumstances, it may not require much application of mind for a sensible person to be inclined to the view that the action complained of is indeed arbitrary. An arbitrary action offends Article 14 and is, thus, void. Since no prejudice is required to be proved for violation of a Fundamental Right, the question of proving prejudice may not arise. However, since issuance of the charge-sheet is not challenged on the ground of arbitrariness, we leave it for a decision in an appropriate case in future as to whether delayed issuance of charge-sheet amounts to arbitrariness in State action and could be nullified on the touchstone of Article 14 without prejudice being proved. Having held that the charge-sheet has been belatedly issued without satisfactory explanation but leaving it aside only for the moment, we now propose to attempt a balancing exercise of the factors for and against the plea that the delay in initiating the disciplinary proceedings should be the ground for quashing thereof - the factors for quashing the delayed charge-sheet far out-weigh the factors against - the proceedings initiated against the petitioner ought to be laid to rest, meaning thereby that the charge-sheet as well as appointment of the Inquiry Officer may not be carried forward. This course of action would be just and proper, more so in the circumstances that nearly a year s time was taken by the disciplinary authority to appoint the Inquiry Officer and also that in the judicial proceedings the petitioner came out unscathed. The upshot of the discussion on delayed issuance of the charge-sheet dated October 23, 2013 is that there being no satisfactory explanation therefor, the respondents cannot be allowed to proceed with such charge-sheet; thus, the petitioner is entitled to succeed in his claim that the disciplinary proceedings including the charge-sheet dated October 23, 2013 and all further orders in connection therewith ought to be set aside. It is directed that the sealed cover be opened and the recommendation of the Departmental Promotion Committee be considered. If the petitioner had been recommended, an order of promotion be issued as Chief Commissioner of Customs and Excise. Such order will take effect from the date the peers of the petitioner were promoted. The petitioner shall not be entitled to any arrears of monetary benefit for such promotion, except that his pension shall be calculated based on the pay that he would have last drawn as such Chief Commissioner. Let the order of promotion be issued within a month - petition allowed. 2021 (12) TMI 1121 Seeking direction to remove the name of the petitioner from the Denied Entity List - benefit of Merchandise Export from India Scheme - HELD THAT:- As is well known, to encourage exports in order to earn foreign exchange and to make the export goods originating from the country cost competitive in international market, the Government of India comes up with the export incentives from time to time which are framed in different mechanisms - The petitioner in the present case is interested in receiving the export benefits under MEIS. The only reason why the petitioner is blocked from making application for such purpose is that on account of alleged past misdeeds, the petitioner has been placed in the denied entity list which would be sufficient to disqualify the petitioner to claim any other benefit of MEIS. Nothing has been brought to the notice from the MEIS scheme suggesting that for any past unrelated events of dispute between the department and the petitioner, export incentive in the presentie would be denied to the exporter - The trade notice pertains to the facility for applying the benefit under MEIS under the system driven approval mechanism. This part is totally procedural and this trade notice cannot decide the rights of the petitioner under the scheme. It may be that for those who are placed in denied list or suspended list, the fast tracked procedure of system driven approval mechanism may not be made available. This is not the same thing as to suggest that such entities for unrelated events could be denied the benefit of export incentives under the scheme if all conditions are satisfied. The contention that unless and until the petitioner pays up the entire duty and penalty imposed under the orders passed by the DGFT and custom authorities the petitioner cannot claim any export incentive under the new scheme is completely unacceptable. Both the orders are under challenge before the first appellate authorities. Respective statutes require pre-deposit of certain amounts upon which rest of the recoveries would be suspended. If the petitioner has no such protection under law, the department can recover the amounts through coercive means and perhaps even from the petitioner's entitlement of intensives under the export promotion scheme in quest. But once this mechanism is statutorily put in place and followed by the assessee, the Government of India cannot seek coercive recovery of the remaining amounts in indirect manner by blocking the export incentives under unrelated schemes and future consignments. It is directed that the respondents shall permit the petitioner to make an application within the time envisaged in the scheme for the incentive under MEIS scheme and consider the same on merits in terms of the provisions made under the scheme - Petition disposed off. 2021 (12) TMI 1120 Confiscation - goods imported without the condition of the registered foreign source when the same were meant for export of for manufacturing export products - HELD THAT:- List this admitted matter for hearing in due course. 2021 (12) TMI 1119 Smuggling - Betel Nuts - proper investigation of matter not carried out - mens rea involved or not - Section 123 of the Customs Act, 1962 - HELD THAT:- Ideally, the Tribunal ought to have assessed the reasons furnished by the Commissioner in the order-in-original and the challenge thrown by the respondent herein to such findings. Instead, the Tribunal gave much credence to the observations of this Court in the order of May 6, 2019 to the effect that when the four suppliers had affirmed affidavits to confirm that they had supplied the goods to the respondent herein, there was little reason to question the same - It is true that the observation is found in the order of May 6, 2019 of this Court. However, such observation of this Court had to be read in the context of the failure of the Tribunal in course of its original order dated March 23, 2018 to indicate that the mind of the Tribunal had been applied to the matters in issue as the limited discussion in the relevant order of the Tribunal did not refer to the challenges on divers counts that the respondent herein carried against the findings on facts rendered by the Commissioner in the order-in-original. In the order impugned, the Tribunal has also observed that no mens rea was involved since the goods would attract 5% duty. That appears to be a matter of conjecture and merely because the goods would have attracted a nominal duty cannot be a brush to sweep aside the cogent findings contained in the order-in-original of the Commissioner without referring to and dealing with the same in the light of the challenge thereto thrown by the respondent herein - The Tribunal is tasked with the duty of assessing the grounds made out in support of an order. In this case the Tribunal appears to have abdicated its authority to decide and dealt with the matter at a superficial level without referring to either the grounds indicated in the order-in-original or the grounds of challenge fashioned by the respondent herein. The order impugned dated December 23, 2019 is found to be exceptionable and same is set aside with a request to the Tribunal to consider the matter afresh uninfluenced by any observations contained in the previous order of this Court or in the present order - matter remanded to the Tribunal for the respondent's appeal before it to be considered afresh in accordance with law - appeal allowed by way of remand. 2021 (12) TMI 1118 Validity of remand of the matter - proper officer for issuance of SCN - Whether the Tribunal was justified in remanding the matter back for a fresh decision when the matter was subjudice before the Hon'ble Supreme Court in light of the stay order passed in M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 2016 (5) TMI 225 - DELHI HIGH COURT] ? - HELD THAT:- Admittedly, the appeal filed by the Revenue as against the decision of the High Court of Delhi in the case of M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 2016 (5) TMI 225 - DELHI HIGH COURT] is pending before the Hon'ble Supreme Court as UNION OF INDIA VERSUS MANGALI IMPEX LTD. [ 2016 (8) TMI 1181 - SC ORDER] . Therefore, if such is the factual position, then the Tribunal ought to have kept the matter pending on its file instead of setting aside the adjudication order and remanded the matter back to the adjudicating authority and await the decision of the Hon'ble Supreme Court. Identical impugned order was tested for its correctness by the Hon'ble Division Bench of this court in COMMISSIONER OF CUSTOMS (PORT) , KOLKATA VERSUS M/S. HALDIA PETROCHEMICALS LTD. [ 2019 (6) TMI 1650 - CALCUTTA HIGH COURT] . The appeal filed by the Revenue was allowed and, consequently, the appeal filed by the respondent before the Tribunal was restored to its file and the Tribunal was directed to await the decision of the Hon'ble Supreme Court. The appeal filed by the Revenue is allowed and the order passed by the Tribunal is set aside and the appeal is restored to the file of the Tribunal with a direction to the Tribunal to await the decision of the Hon'ble Supreme Court in the appeal filed against the decision of the High Court of Delhi in the case of Mangali Impex Ltd. - answered in favour of the Revenue. 2021 (12) TMI 1117 PIL - Smuggling - Validity of Voluntary Disclosure Scheme dated 11-06-2020 introduced by the Wildlife Division, Government of India - It was contended that, the main purpose of the Voluntary Disclosure Scheme was stated to collect stock information for persons who have in their possession exotic live species i.e., exotic live birds and animals within India through such voluntary disclosure . - seizure of all exotic birds and animals found within or being transported through the State of Meghalaya - HELD THAT:- The question of presumption of exotic birds and animals as having been illegally smuggled does not arise since the exotic birds and animals are not notified under Section 123 of the Customs Act. The provision of Chapter IVA of the Customs Act which provides for detection of illegally imported goods and prevention of their disposal thereof comprising of Section 11A to 11G are also inapplicable. Admittedly, the Central Government has not notified the exotic birds and animals in question under Section 11B of the Customs Act. There are safeguards in place to detect the illegally smuggled goods at the point of entry and exit which are regulated under the Customs Act. Even the Foreign Trade Policy and the Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES) aid in prevention of illegal smuggling of exotic species. Neither there is any statutory presumption exist to presume that all the exotic species in the domestic area are imported in India nor there is a legal requirement which compels domestic keeper, breeder or transporter of such exotic species to produce any proof of valid importation or documents establishing his licit acquisition. As already held by the Allahabad High Court in DINESH CHANDRA VERSUS U.O.I. THRU. ADDL. PRIN. CHIEF. CONSERVATOR OF FOREST OTHERS [ 2020 (7) TMI 750 - ALLAHABAD HIGH COURT] , seizure of exotic species in domestic area on mere surmises or merely on the basis of statements recorded by Customs or Wildlife Authorities would be contrary to the provisions of the Customs Act, 1962 or even Wildlife Act. Hence, no such directions to seize exotic species found within or being transported through the State of Meghalaya can be issued. There is no prohibition, restriction or regulation to sale, purchase, possession or breeding of the exotic species within India under the provisions of the Customs Act, 1962 or even the Wildlife Act. Seizure of these exotic species would be contrary to the provisions of the Customs Act, 1962 and no such direction can be issued. Public Interest Litigation is without any merit and is dismissed. 2021 (12) TMI 1116 Smuggling - Gold - validity of continued detention of the detenues - COFEPOSA - material on the basis which the detention order was passed are the statements recorded under Section 108 of the Customs Act - Corroboration of statements - HELD THAT:- The facts and inferences from facts are drawn from the search and seizure and host of other facts mentioned in the grounds. Most of the facts are according to the detaining authority corroborated by the statements of those with whom the petitioners had dealings. We also note that the power under Section 108 of the Customs Act is intended to be exercised by a gazetted officer of the customs department. Section 108(3) enjoins on the person summoned by the officer to serve upon any subject to which he is summoned. He is not excused from speaking the truth on the premise that such statements could be used against him. This requirement is included in the previous or the purpose of including the officer to elicit from the person interrogated. In the instance case, there has been no retraction of the confession statements made under section 108 of the Customs act. In such circumstances, we find nothing wrong in the detaining authority relying on the statements made under Section 108 of the Customs Act as they furnish sufficient and adequate materials on the basis of which the detaining authority can form its opinion. There is no merit in the contention of the learned senior counsel that there has been factual misstatements made about the various voluntary statements given by the detenue under section 108 of the Customs Act, we hold that the same is not acceptable. The copies of the statements dated 14-7-2020 and 29-7-2020 of the detenue were made available by the learned counsel for the Customs. Having gone through the statements, it is not found that there is any factual misstatement recorded in the detention order about the confession statement under Section 108 of the Customs Act. Thus, we repel the said contention. The CCTV footage has no bearing on the decision to detain as it is not primarily based on the said footage. The whole purpose of supplying the copies of the documents relied on is to ensure that the right of the detenue to make a representation against the detention order is not hampered in any manner by the non-supply. In the instant case, no findings are arrived at on the basis of the CCTV footage, and thus, non-supply of the same cannot be of any avail to the petitioner. With regard to the contention that there is no likelihood that the detenues would be enlarged on bail also cannot be accepted as several accused in the connected cases had been granted bail. All that the detaining authority was obliged while passing the order of detention is to be aware of the fact that detenue is in jail and about the chance of detenue being enlarged on bail, that having been done no fault can be found. We therefore, reject this contention. The proceeding of the Advisory Board is different from the proceedings of the judicial or quasi-judicial proceedings, before which there is a lis to adjudicate upon. The Advisory Board cannot be asked to take up the mantle of becoming the legal practitioner for the detenue. The detenue was free to produce materials to question the detention made against him and the Advisory Board has no obligation to summon any person or to call for records over and above the files placed before it. The Advisory Board in the instance case has opined that it was necessary to continue the detention. We do not not think that the detenue has been denied the protection either under Article 21 or 22 of the Constitution of India. The detenue did get the opportunity for making an effective representation against his detention - the contention is rejected. Petition dismissed. 2021 (12) TMI 1115 Levy of penalty u/s 112 of Customs Act on Chartered Accountant (CA) - allegation of fabricating documents and wrongly verifying statements - opportunity of being heard not provided to appellant - HELD THAT:- Imposition of penalty of ₹ 1,00,000/- under Section 112 of the Customs Act is the resultant outcome of such remand order that was re-adjudicated by the Commissioner of Customs (Export-II) and decided on 27.11.2017 without appellant being noticed. Appellant Shri S.L. Agrawal filed an affidavit to the effect that no such show-cause notice for hearing, leading to adjudication order, under challenge in this appeal was served on him and despite direction to learned Authorised Representative, the respondent-department failed to produce any proof of service on the summons on the appellant during the hearing of the adjudication proceeding that had commenced in 2017 without any challenge by the respondent department to the dropping of proceedings against the present appellant in the first adjudication order dated 26.12.2003. There are no hesitation to hold a finding that principles of natural justice has not been followed by the Commissioner of Customs (Export-II) and she has flouted the clear direction contained in the remand order to follow principles of natural justice, though passed in respect of the principal importer/appellant. Appeal allowed - decided in favor of appellant. 2021 (12) TMI 1114 Refund claim of SAD - Time limitation - rejection of claim on the ground that appeals filed by the department are time-barred for the reason that the review order has been passed beyond the time limit of three months as stipulated under sec. 129(D)(3) of the Customs Act, 1962 - HELD THAT:- There is much delay in passing the review order. As per sub-section (3) of section 129D of the Customs Act, 1962, review order has to be passed within three months from the date of receipt or the communication of the order passed by the adjudicating authority. The Commissioner (Appeals) has granted several chances to the department to furnish details with regard to the date of receipt of the order passed by the adjudicating authority. In fact, the date of order of adjudicating authority itself is not furnished in many orders. The department has failed to comply with the directions passed by the Commissioner (Appeals) and thereupon he had no other way but to dispose of the appeals on the ground of limitation. However, the Commissioner (Appeals) instead of dismissing the appeals on limitation has given a further chance to the department to resubmit the appeals after obtaining the details with regard to the date of receipt of order by the reviewing authority. It is explicit that the department has not been able to furnish any details as to the date of receipt of order by the reviewing authority. This Tribunal had also granted several adjournments to the department to obtain these details. Today, when the matter came up for hearing, ld. AR has not been able to place any such details with regard to the date of receipt of the order by the reviewing authority. There are no hesitation to conclude that the review order passed by the department is beyond the time-limit prescribed under sub-section (3) of section 129D of the Customs Act, 1962 and therefore the appeals filed before the Commissioner (Appeals) are time-barred - appeal dismissed. 2021 (12) TMI 1113 Exemption from levy of Integrated Goods Service Tax - re-import of parts/engines of aircraft sent outside the country for repair - effect of notification no. 36/2021-Customs dated 19 th July 2021 and no. 37/2021-Customs dated 19th July 2021 substituting Said duty, tax or cess for Duty of customs - HELD THAT:- The issue has been decided in the case of JET AIRWAYS (INDIA) LTD. VERSUS COMMISSIONER OF CUSTOMS [ 2021 (1) TMI 577 - CESTAT NEW DELHI] where it was held that Appellant is thus entitled to exemption from payment of integrated tax under the Exemption Notification on reimport of repaired parts/ aircrafts into India. Appeal allowed - decided in favor of appellant. Corporate Laws 2021 (12) TMI 1112 Sanction of Composite Scheme of Amalgamation - Section 230-232 with other applicable provisions of the Companies Act, 2013 and read with of the Companies (Compromise, Arrangement, and Amalgamations) Rules, 2016 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of notices also issued. The scheme is approved - application allowed. 2021 (12) TMI 1104 Sanction of Scheme of Merger by Absorption - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- As 14 Transferor Companies are transferring into the Transferee Company and in the interest of the creditors of the Applicant Companies, this Bench directs the Transferee Company to issue Notice of Scheme to all its Unsecured Creditors by Registered Post-AD/Speed Post and by E-mail whose Email IDs are available with the Company and file Consent Affidavits of the Unsecured Creditors at least of the value of 90% at the time of filing of Company Petition. Further, the Bench has observed that since there are 7 (seven) IBC proceedings pending against the Applicant Companies, the list of which has been filed by the Applicant Companies vide Additional Affidavit dated 11.06.2021 annexed as Annexure C , the Applicant Companies are directed to issue notice of Scheme by Registered Post-Ad/Speed Post and Email upon the Petitioners who have filed the Insolvency Proceedings against the Applicant Companies and specific consents of these Petitioners of the IBC Proceedings is to be submitted at the time of filing of Company Petition. Application disposed off. Insolvency & Bankruptcy 2021 (12) TMI 1111 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It appears that goods have been supplied to Corporate Debtor and invoice has been raised dated 16/07/2019 No. GST/1920/0148 for amount ₹ 4,24,145.00 and due to non-payment of remaining due amount by the Corporate Debtor, the Operational Creditor had issued Demand Notice and the same was duly delivered to the Corporate Debtor. The Corporate Debtor did not reply to the demand notice of the Operational Creditor, however paid the amount of ₹ 2,00,000/- out of total due amount. It is further noted that even after sufficient opportunity. The Corporate Debtor chose not to appear and contest this application. Hence, the debt amount is admitted and remains to be paid fully as per invoice dated 16/07/2019. There is no pre-existing dispute for the due amount. The present application is filed well within the limitation period and meets the threshold limit as prescribed under section 41 of IBC. Application admitted - moratorium declared. 2021 (12) TMI 1110 Rejection of claim of wages - Section 40(2) of I B Code - HELD THAT:- On verification of records it is found that the submission of the Respondent that he has not been provided with any order from the appropriate authority in connection with payment of gratuity etc. Since the Appellants have not produced any order of the Labour Court or such authorities the Liquidator on his own cannot decide on disputed liability of them. He can only act on the strength of crystalized claims. It is the settled position of law that the provident fund, the pension fund and the gratuity fund, do not come within the purview of liquidation estate for the purpose of distribution of assets under Section 53 of the Code. Based on this, the only inference which can be drawn is that Pension Fund, Gratuity Fund and Provident Fund can t be utilised, attached or distributed by the liquidator, to satisfy the claims. Section 36(2) of the I B Code 2016 provides that the Liquidator shall hold the Liquidation Estate in fiduciary for the benefit of all the Creditors. The Liquidator has no domain to deal with any property of the Corporate Debtor, which is not the part of the Liquidation Estate. It is clear that in terms of sub-Section (4)(a)(iii) of Section 36 all sums due to any workman or employees from the Provident Fund, Pension Fund and the Gratuity Fund, do not form part of the liquidation estate/liquidation assets of the Corporate Debtor. Some of the Appellants failed to provide any proof of having been appointed in service of employment of the Corporate Debtor and that the benefit accruing to the Appellants shall be subject to documents available on record with the Respondent unless otherwise proven with sufficient evidence that the Appellants were in employment of Corporate Debtor and that the Appellants without properly responding to the communication addressed to them, have now come with the above appeals. This cannot be accepted. The claim of wages cannot be sanctioned unless the statutorily constituted forums either under the Industrial Dispute Act, Payment of Wages Act and Bonus Act have rendered its decision - appeal dismissed. PMLA 2021 (12) TMI 1109 Seeking grant of Anticipatory Bail - property relating on the creation of mortgage/security - fake/bogus loans - no assets were created - loan turned bad NPA in the name of non existing/pseudonymous borrowers without adhering to the prescribed norms and guidelines of the Bank and causing wrongful loss - overriding effect of PML Act over other acts - HELD THAT:- PML Act, 2002 deals with the offence of money laundering and Parliament enacted this law to deal and curb the activities of money laundering. Being a special enactment it has overriding effect on general law. Section 71 of PML Act specially provides that provisions of PML Act shall have overriding effect on any other law time being in force. Thus, it is very clear that provisions of Code of Criminal Procedure will not be applicable until there is no specific provision is given in PML Act, 2002. In case of UNION OF INDIA VERSUS VARINDER SINGH @ RAJA ANR. [ 2017 (7) TMI 1056 - SUPREME COURT] , Supreme court observed that Section 45 of PML Act imposes conditions for grant of bail. Bail cannot be granted without complying with requirements of section 45 of PML Act. Money Laundering being an offence is economic threat to national interest and it is committed by the white collar offenders who are deeply rooted in society and cannot be traced out easily. These kinds of offence is committed with proper conspiracy, deliberate design with the motive of personal gain regardless of the consequences to the society and economy of Country. Hence, for money-launderers jail is the rule and bail is an exception - Socio-economic criminals are economically sound, therefore, in releasing them on anticipatory bail there is probability of abscondance not only within country but also beyond country. Usually socio-economic offenders abscond to some other country in order to escape themselves from Criminal Prosecution. The status and position of offenders provides opportunity to influence investigation and prosecution. This Court finds no merit in the application under Section 438 Cr.P.C. filed by the applicant. Consequently, the instant anticipatory bail application is rejected. Central Excise 2021 (12) TMI 1108 CENVAT Credit - part of opening balance of Cenvat credit relatable to the receipt of capital goods in the previous year - whether (being made partial amount) disallowance for ₹ 2,83,137/- have been rightly made alongwith imposition of equal penalty? - HELD THAT:- There is no discrepancy and the whole confusion has occurred on account of clerical error in the account/store section of the appellant who initially submitted the figures to the audit, wherein this amount of ₹ 2,83,137/- was left out erroneously. Thus, it is found that the show cause notice is misconceived and there is no merit in the allegation of Revenue. Appeal allowed - decided in favor of appellant. Indian Laws 2021 (12) TMI 1107 Conspiracy - introduction of huge share capital through shell/paper companies in the books of the assessee companies - prosecution granted under Section 19 of the Prevention of Corruption Act - HELD THAT:- The materials which been collected during investigation prima-facie reveal that the assessment orders resulting in huge addition of income interalia, against the companies of the petitioner on account of unverifiable investors in the companies through shell companies were passed by the income tax authorities at Kolkata, appeals were also filed, but in absence of stay, orders for attachment of bank accounts were passed. The allegation is that a number of accused persons including the petitioner who is director of the two assessee companies as well as Tapas Kumar Dutta , the Chief Commissioner of Income Tax having jurisdiction for Ranchi and Hazaribagh conspired with each other to get rid of the demand raised at Kolkata in assessment proceedings and in furtherance thereof, the PANs and the records were transferred from Kolkata to Jharkhand , Revision petitions were filed under section 264 of Income Tax Act before Tapas Kumar Dutta during pendency of appeals at Kolkata. Thereafter, pending appeals at Kolkata were sought to be withdrawn by the petitioner but instead of permitting withdrawal, the appellate authority dismissed the appeals. There are materials on record to show that the transfer of PANs and records from Kolkata to Jharkhand was itself a part of the conspiracy as no business or office of the companies actually existed in the place of their transfer to Jharkhand and the transfer was itself a device to facilitate the co-accused Tapas Kumar Dutta to enable him to pass orders in favour of the companies of the petitioner in which the petitioner was a director. The allegations reveal that huge investments were made in the companies of the petitioner by non-existing parties / shell companies - Volumes of transcripts of recorded conversations have been collected which reveal conversation amongst the accused persons although it has been argued by the learned counsel for the petitioner that the conversations do not involve the petitioner. This court is of the considered view that this is not the stage for scrutinizing the transcripts of recorded conversations in order to record any direct or indirect links of the petitioner with the alleged offence. Suffice is to say that there are sufficient incriminating materials and circumstances, collected against the petitioner during investigation, to constitute prima facie case indicating involvement of the petitioner in the alleged offence. This court finds that the learned court below has considered the totality of the materials collected during investigation to find prima-facie case against the petitioner. The petitioner has argued that the Tapas Kumar Dutta had acted as per the Income Tax Act and only remanded the case vide order passed under Section 264 of the Income Tax Act. This court is of the considered view that material on record prima-facie show that Tapas Kumar Dutta had misused his office and the official position to give undue favour to the petitioner in conspiracy with others and is a co-accused in this case for which sanction for prosecution has also been granted. The orders of remand passed under Section 264 of the Income Tax Act have the effect of nullifying the demand raised pursuant to the orders of assessments - the sanction for prosecution of Sri Tapas Kumar Dutta, the then Chief Commissioner of Income Tax, Ranchi has been granted under Section 19 of the Prevention of Corruption Act and a copy of the same has been produced by the opposite party before this court. It is not in dispute that the trial has already commenced. There are no illegality or perversity or material irregularity in the impugned order of refusing to discharge the petitioner and also the impugned order framing charge against the petitioner. This court finds that the impugned orders are well reasoned orders based on materials on record and do not call for any interference in revisional jurisdiction of this court - the present revision petition is dismissed. 2021 (12) TMI 1106 Dishonor of Cheque - Effect of moratorium on proceedings u/s 138 of NI Act - Petitioner is a natural person - suspended director - HELD THAT:- The mandate occurring in Section 14 of the IBC, becoming animated, and, it also enabling the drawing of a further legal sequel, that when Clause- A of Sub Section 14(1) of the IBC, hence prohibits the institution of suits, or continuation of pending suits or continuation of pending proceedings against the corporate debtor. Therefore, statutory coinage carried therein, also covering proceedings drawn under Section 138 of the Negotiable Instruments Act. Hon'ble Apex Court pronounced in case titled as P. MOHANRAJ ORS. VERSUS M/S. SHAH BROTHERS ISPAT PVT. LTD. [ 2021 (3) TMI 94 - SUPREME COURT] taken a view that the moratorium provisions contained in Section 14 of the IBC Code, prohibit the continuation of proceedings drawn even under Section 138/141 of the Negotiable Instruments Act, against the corporate debtor, rather during the subjudice corporate insolvency resolution process. The petition at hand, has been filed by one Vishnoo Mittal, who claims himself to be the suspended Director of the corporate entity, named as M/s Xalta Food and Beverates Pvt. Ltd. The learned counsel for the petitioner submits, that the clout of the moratorium, is omnibus, and, it also indemnifies, and, saves the liability, if any, of the petitioner herein. However, the afore made argument, cannot be accepted by this Court, as the Hon'ble Apex Court in judgment made a candid expostulation of law, that proceedings drawn under Section 138 of the Negotiable Instruments Act, though are covered by Section 14 of the IBC Code, but the afore drawn proceedings cannot rather continue only against the corporate debtor accused, but can continue against the erstwhile director/person incharge, and, responsible for the conduct of the business of the corporate debtor. Since the petitioner is a natural person, and, a suspended Director, and, hence falls within the domain of erstwhile director. Thereupon the immunity, as granted to a corporate debtor, cannot be extended to him. Since the petitioner is not a juristic person, but is a natural person, and, though he is a suspended director, yet when he is an erstwhile director of the corporate entity concerned, rather prima facie, at the relevant stage of issuance, was incharge of, and, responsible for the company, and, of the business of the corporate debtor. Therefore, the issuances of summons against him, through the making of the impugned order, does not suffer from any illegality. Petition dismissed. 2021 (12) TMI 1105 Restraint on invocation of a bank guarantee - alleged short-supply of goods - fraud or irrevocable injury or special equities which would vitiate the entire underlying transaction - HELD THAT:- Courts are usually slow to interfere with the transaction between a bank and the beneficiary which is seen as being independent of the underlying contract between the lender and the supplier unless conditions call for such interference. The three conditions, as accepted in several decisions, are fraud of an egregious nature; special equities or the invocation not being in terms of the bank guarantee. It is sufficient if a party seeking a restraint on the invocation is able to establish any one of the three requirements. The test of special equity or irrevocable injustice is a matter of an assessment by a court on the particular facts presented to it for stay on a notice of invocation. The injury or injustice must be irrevocable, irremediable and irreversible In the present case, the petitioner has satisfied two of the three ingredients, namely special equity and the invocation not being in terms of the guarantee. The clauses in the contract and more particularly the GCC clearly demonstrate that the bank guarantee was furnished towards performance security. There can be no issue with regard to performance since the petitioner has already received 90% of the contract price as discussed above. The invocation letter also demonstrates that there cannot be any performance issue with regard to the supplies effected by the petitioner. The invocation letter does not contain any allegation of a breach of performance obligations by the petitioner. The special equity also stands satisfied by reason of the petitioner facing an immediate and irreversible financial loss if the payment is made by Citibank NA, Dhaka to the respondent No. 1 in terms of the Letter of Invocation. Application disposed off.
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