Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 3, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI Short Notes
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
-
Applicability of GST Act - works contract commenced prior to 01.07.2017 and completed partially before 1.7.2017 or payment received partially before 1.7.2017 - Scope of the contract - inclusive of tax / exclusive of tax - Revenue authorities directed to determine the amount of VAT payable for the period prior to 1.7.2017 and GST payable for the subsequent period as per relevant VAT / GST law - HC
Income Tax
-
Computation of their Turnover for the purpose of tax audit u/s 44AB - Speculation Business or Derivatives, futures, and options or Delivery based transactions
-
Taxation of ULIP - In case of ULIP, When the premium payable for any of the year during the tenure of the ULIP either exceed 10% of the sum assured or the annual premium is more than Rs 2,50,000 (Policies issued on or after 01.04.2021), then the whole amount received whether as maturity proceeds or survival benefit or surrender value is taxable under the head "Capital Gain” Sec 45(1B) r.w.r. 8AD
-
Angle Tax - Investment in start-ups from 21 countries - Provision U/s 56(2)(viib) of IT Act 1961 shall not apply in respect of Exemption from any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares - Central Government notif - Notification
-
Angle Tax - Investment in Start-ups Recognized by DPIIT - Provision of section 56(2)(viib) of IT Act 1961, shall not apply to consideration received by a company for issue of shares that exceeds the face value of such shares subject to conditions - Notification
-
Exemption limited increased to Rs. 25,00,000 against Leave encashment by the employees other than an employee of the Government - Income Tax Notification
-
First appellate authority being Joint Commissioner (Appeals) [JCIT(A)] with the Commissioner (Appeals) CIT(A) - Income-tax (Sixth Amendment) Rules, 2023 - Implementation of Changes made by Finance Act, 2023 - Notification
-
Deduction u/s 80G - Provisional approval shall be effective from the assessment year relevant to the previous year in which such application is made - Income-tax (7th Amendment) Rules, 2023 - Notification
-
Exemption to buyers of PSU shares during selloff under strategic disinvestment - Income-tax (Eighth Amendment) Rules, 2023 - Notification
-
Denial of cross-examination process of witness - ACIT restricted cross examination process by denying the questions asked by the Petitioner during cross examination - CIT (Appeal) has specifically directed that as the Evidence Act is the law of the land, the income tax authorities are bound to abide by its provisions. As gone through the directions in the remand order wherein he has allowed the appellant, cross examination of the witnesses whose statements have been utilized by the Assessing Officer in the assessment order. There is no ambiguity in the said directions. - the Revenue directed to conduct cross-examination in accordance with law and the guidelines as referred to hereinabove. - HC
-
Addition u/s 68 - proceeds from the sale of shares by treating the scrips as penny stocks - This is the case wherein the AO merely on the basis of suspicion rejected the claim of the assessee, without establishing any link between the assessee with the entry operators/exit providers, who were allegedly involved in price rigging of shares artificially of the aforesaid companies. - Additions deleted - AT
-
Maintainability of appeal before the ld. CIT(A) - Violation of section 249(4) - non-payment of admitted tax - no appeal is provided against order of the CIT(A) declining to entertain appeal as defective or one not maintainable on account of non-payment of tax during filing of return - CIT(A) directed to adjudication the issue in relation to contravening of section 249(4) - AT
-
Addition u/s 41(1) - long outstanding balances in sundry creditors accounts - AO made the additions, since the assessee has not shown any steps have been taken for recovery, any legal proceedings are pending he concluded that these balances are no longer payable and brought to tax under section 41(1) - the action of the AO is not correct - Addition deleted - AT
-
Short grant of TDS credit - CPC has denied the TDS credit on the ground that amount is not reflected in 26AS - when there such pressing circumstances and Revenue is aware that TDS credit is being claimed under right hands and original deductee is not claiming any TDS and has given declaration that it has neither shown the income nor it will claim in future, then there should be a mechanism to resolve the issues or Revenue should direct the deductor to comply with it. - credit of TDs allowed - AT
-
Salary income - Perquisites - Addition u/s. 17(2)(v) towards insurance premium paid by the employer - any policy to effect an assurance on the life of the assessee shall be treated as a ‘perquisite’ as defined in the Act. - Additions confirmed - AT
-
Unexplained investment - Unaccounted cash for purchase - addition based on the statement / admission of the third party - Mere admission of the third party cannot be a basis for making addition in the hands of the assessee without confronting the assessee about the incriminating material. - AT
-
Reopening of assessment u/s 147 - Bypassing the option to initiate scrutiny assessment u/s 143(3) - The assessment proceedings would cease to be pending either by passing of an order under Section 143(3) of the Act or by expiry of time to issue a notice under Section 143(2) of the Act, to complete an assessment under Section 143(3) of the Act. So long as the above event has not passed, the Assessing Officer cannot render the provision of Section 143(2) of the Act redundant/otiose by issuing a notice for reopening an assessment under Section 147/148 - AT
-
TP Adjustment - specified domestic transaction of project management and supervision - Capitalized expenditure - AO is incorrect in determining the arm’s-length price of specified domestic transaction after omission of clause (i) of Section 92BA - the action of the learned transfer-pricing officer in determining the arm’s-length price of project management and supervision fees at Rs Nil and consequent disallowance of depreciation there on is not correct. - AT
Customs
-
Classification of imported goods - The General Rules for Interpretation of Schedule in Customs Tariff Act, 1975 require that classification should proceed from the heading to the sub-heading and tariff item and that the description in the first of these is critical for proceeding to the next two levels, notwithstanding the conformity, even having all the appearances of being unquestionably so, of an impugned article with description corresponding to a tariff item. - AT
DGFT
-
Export of Rice (Basmati and Non-Basmati) - Requirement of Certificate of Inspection - to EU member states and other European Countries namely Iceland, Liechtenstein, Norway, Switzerland and United Kingdom only will require Certificate of Inspection from EIA/EIC. - Relief granted for 6 months - Notification
Corporate Law
-
Compounding of offences - default in holding Annual General Meeting the company - non-compliance of Section 166/96 of the Companies Act, 1956/2013 - Once the appellant has admitted his default and thereafter approached the Tribunal for compounding the offence there was no ground for the appellant to assail the order of the compounding passed by the NCLT. - AT
Indian Laws
-
Dishonour of Cheque - matter settled in National Lok Adalat - Had the settlement been involuntary or on the basis of fraud, there was no occasion of acting upon such settlement by making payments according to the Memorandum of Understanding signed by both the parties. - the learned Trial Court erred in allowing the applications filed by the respondents, after the matters had been settled between the parties before National Lok Adalat and the same had also been acted upon by the parties. - HC
Service Tax
-
Extended period of limitation - within the same Department the Adjudicating Authority has taken stand that the value of consumables is to be added and the Commissioner (Appeals) has taken stand that the same is not required to be added. Such being the case, it is clear that the issue is that of interpretation. - The confirmed demand for the extended period along with the interest is set aside - AT
Central Excise
-
Levy of interest on the differential duty paid during the relevant period - extended period of limitation - With regard to applicability of period of limitation for recovery of interest incorporated at sub-section (15) in Section 11A of CEA, 1944 with effect from 08.4.2011, the demand of interest can be sustained only for the normal period. - AT
-
Finalisation of provisional assessment - Denial of adjustment of excess payment against the alleged short payment of duty - appellant had passed on the excess amount of duty as CENVAT Credit - There is a categorical finding in the adjudication order that the duty burden has been borne not by M/s. BHEL, but by M/s. BPCL, the consignee of the goods. The refund of the excess payment was not sanctioned for the reason that the duty burden has been passed on to M/s. BPCL attracting the provisions of Rule 7(6) - order of lower authorities sustained - AT
-
Reliance on the statement of the manager of the manufacturer for demand of duty - the presence of documentary evidences prevails over the oral statement which is not put to the test of examination and cross-examination as required under Section 9D. There is no evidence to support the case of the department. - AT
-
Extended period of limitation - earlier show-cause notices were issued on the issue of valuation also which have been adjudged by the Commissioner (Appeals) in favour of the Appellant - issuance of second show cause notice, SCN for the subsequent period invoking the extended period of limitation cannot sustain since the facts were already in the knowledge of the department - AT
VAT
-
Classification of goods - Computer peripherals - LAN Connection Cable - the term peripheral has been given an expansive meaning and is not restricted to input/output devices, as contended by the Revenue. It is also clear that even if the goods in question can have different applications independent of computer, the same would not preclude them from being considered computer peripheral if they are also being used in computer system to expand the capabilities of computer system. - HC
-
Condonation of delay in filing of appeal - Service of order - order was sent to old address - Revenue’s main contention is that the orders were served at the address given by assessee and it is assessee’s duty to intimate the change in the address if any - HC did not find any merit in the contention of the petitioner, revision petition dismissed.
Case Laws:
-
GST
-
2023 (6) TMI 93
Applicability of GST Act - works contract commenced prior to 01.07.2017 and completed partially before 1.7.2017 or payment received partially before 1.7.2017 - Scope of the contract - inclusive of tax / exclusive of tax - jurisdiction of respondent Nos 4 to 8 to either issue notice or to take any coercive steps against the Petitioners under the provisions of the GST Act dated 01.07.2017 - constitutional validity of provisions of Section 7 (3) read with clause 6 of Schedule II of the GST Act - vires of Article 366 (12A), (26A) (29A) (b) (f) the Constitution in view of and settled principles of law laid down by the Hon ble Supreme Court regarding works contract. HELD THAT:- It is an undisputed fact that the Petitioners herein are class-I contractors who have entered into works contract with various State Govt agencies and that the agreements were entered into at a point of time when the KVAT Act and Finance Act 1994 were in force. It is also not in dispute that the Petitioners are either covered under Composition scheme or regular VAT assessment and that on 01.07.2017 when the GST Act was implemented pan India, the said works contract was treated as deemed service and the Petitioners became liable to pay GST. It is this differential tax amount arising out of change in tax regime from VAT to GST which cast an additional tax burden on the Petitioners, which is the subject matter of the present petitions. There are considerable force in the submission made by the learned Senior counsel for the petitioners that the tax component is an independent component which the petitioners do not retain as a profit and is a statutory payment to be made; that looking into the nature of such payment of GST, the respondents/employers are required to honour the same after determining the differential tax burden, especially for the Petitioners who are before this court where works contract were entered prior to 01.07.2017 during KVAT regime and works are completed pre-GST but payments are made post-GST or Contracts entered prior to 01.07.2017 but partly executed pre-GST and balance work executed post-GST or Contracts for which tenders were invited during KVAT regime and finalised after 01.07.2017 under GST regime or contracts which were invited during KVAT regime under old schedule of rates (SR) but finalised under GST regime and that a certain procedure is required to be followed to determine the amount payable by or to the works contractors/Petitioners. Revenue authorities directed to determine the amount of VAT payable for the period prior to 1.7.2017 and GST payable for the subsequent period as per relevant VAT / GST law Petition disposed off with directions.
-
2023 (6) TMI 92
Cancellation of GST registration of petitioner - applicability of Notification dated 31.03.2023 - HELD THAT:- It is seen that this Notification dated 31.03.2023 enables a registered person, whose registration has been cancelled under the provisions of Section 29(2)(b) or (c) of the Central Goods and Services Tax Act, 2017 [CGST Act] on or before 31.12.2022 and who has not filed any application for revocation of cancellation of such registration within the specified time under Section 30 of the CGST Act, to file an application for revocation in terms of the specific procedure notified. In these circumstances, the petitioner will have to make necessary application as provided for in the aforesaid notification. Petition disposed off.
-
2023 (6) TMI 91
Additional tax liability incurred by the petitioner - additional payment on account of the introduction of the GST law - compliance of order of State Government dated 10.10.2018 - HELD THAT:- Reliance placed in the case of M/s D.A.Enterprises v. State of Chhattisgarh and others [ 2022 (12) TMI 1136 - CHHATTISGARH HIGH COURT ] where it was held that The plain reading of the new amended Order of the State Government dated 30.09.2022 would reflect that the State Government has now for the Water Resources Department has taken a decision to ensure that the Additional Tax burden that has suffered by a Contractor in the event of a new tax that is imposed, the additional burden shall be reimbursed to the contract, subject to the Contractor furnishing the details of the difference of the tax liability and the additional tax that was required to be paid by the Contractor. Taking into consideration the judgment of this Court in the case of M/s D.A. Enterprises, the writ petition as of now stands disposed of permitting the petitioner to approach respondents No.2 to 5 in terms of the order of the State Government dated 10.10.2018 (Annexure P-2). The petitioner is also required to produce before the authority concern necessary proof of the additional tax liability incurred on account of the introduction of the GST law within a period of one week.
-
Income Tax
-
2023 (6) TMI 95
Denial of deduction u/s 80P - interest income earned from various cooperative banks - HELD THAT:- The Pune Bench in Rena Sahakari Sakhar Karkhana Ltd. [ 2022 (1) TMI 419 - ITAT PUNE ] that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The payer of interest is also a Co-operative society registered under the Cooperative Societies Act. Respectfully following the decision of the Division Bench, overturn the impugned order and direct to grant deduction u/s.80P(2)(d) on the amount of interest earned from various cooperative banks. Assessee appeal allowed.
-
2023 (6) TMI 94
Denial of cross-examination process of witness - Importance of cross examination of the witnesses whose statements have been utilized by the Assessing Officer in the assessment order - ACIT restricted cross examination process by denying the questions asked by the Petitioner during cross examination - petitioner submits that the petitioner has not been provided complete copies of statements made by the witnesses who are being cross-examined, copy of entire order sheets, remand reports, etc. despite repeated requests - HELD THAT:- After going through the documents available on record it is profitable to refer the order passed by this Court in [ 2023 (2) TMI 1146 - JHARKHAND HIGH COURT] wherein this Court has made it very clear that there is no doubt that the control of the proceedings lies with the Presiding Officer, the Assessing Officer herein, on how to conduct the cross-examination. Adequate guidelines have also been issued by the Appellate Authority as reflected in communication dated 24.01.2023 more particularly the letter No. F. No. 1434 dated 30.12.2022 wherein the CIT (Appeal) has specifically directed that as the Evidence Act is the law of the land, the income tax authorities are bound to abide by its provisions. As gone through the directions in the remand order wherein he has allowed the appellant, cross examination of the witnesses whose statements have been utilized by the Assessing Officer in the assessment order. There is no ambiguity in the said directions. We hereby direct the petitioner to file petition for recall of the witnesses who have been cross-examined and discharged, to put them the question which have been initially discarded by the Assessing Officer.
-
2023 (6) TMI 90
Income deemed to accrue or arise in India - make available clause - Fee received by assessee for technical services rendered to its Associated Enterprises in India - interpretation of Article 12(4) of the DTAA - Whether no transfer of technology in the case of assessee as the make available clause is not satisfied ? - HELD THAT:- As fee paid is for the evaluation of risk factor by the assessee company which is based in USA. As argued that the results of such activities are made available to the other entities with ABB group, we may record the explanation given that the word made available used in portion of the agreement extracted of DRP s directions refers only to the results which the entities in the group companies may use and the same cannot be interpreted or equated to any other technical design or consultancy, the benefit of which the ABB India can derive in perpetuity. He is right in his submission because the services rendered by the assessee is project specific and terminates with submission of bid by the ABB India after making necessary changes or corrections in the bid based on the evaluation report. If the agreement permits the assessee to make available the results for guidance to other entities in the group, the same cannot be attributed as services made available which could be used in perpetuity. The contention urged on behalf of the revenue that opinion tendered by the assessee falls within the parameters made available must fail. - Decided in favour of the assessee.
-
2023 (6) TMI 89
UnexplaIned cash credit u/s. 68 - assessee had obtained accommodation entries in form of loan and advances - AO held that the assessee could not satisfy the conditions of sections 68 of the Act to show the identity, creditworthiness and genuineness of the transaction - allegation against the assessee that it had obtained accommodation entry in form of loan from a party not genuine company [one of the 20 fake companies amongst the group of companies created by one Dalmiya] HELD THAT:- As could be seen from the facts noted and recorded by the appellate authority and the Income Tax Appellate Tribunal, the said party extending loan to assessee has been held to be a genuine party. Its identity, genuineness and creditworthiness were established. When party as found to be a genuine lender, the entire basis for proceedings against the assessee would vanish. Revenue was not justified in proceeding against the assessee on the ground that the loan taken from the said party was unexplained credit and that the lender was not genuine. Since the factual foundation for reopening the assessment of the respondent-assessee is absent, the action taken by the appellant-Revenue against the respondent-assessee cannot be endorsed to. Decided in favour of assessee.
-
2023 (6) TMI 88
Penalty u/s 271(1) (c) - disallowance of Impact Fees, interest on late payment of TDS and payment towards material purchase - HELD THAT:- Issue under consideration is no longer res integra, and the amount Impex Fees paid to SMC is allowable as business expense. Impex Fees is not penal in nature, thus there is no any violation of any law, for that reliance can be placed on the order of Shree Khodiyar Corporation [ 2009 (9) TMI 870 - ITAT AHMEDABAD] Penalty should not be levied on account of technical error which was committed by the assessee and there was no intention to furnish inaccurate particulars of income for that reliance can be placed on the judgment of M/s Price Waterhouse Copers ( P) Ltd [ 2012 (9) TMI 775 - SUPREME COURT] wherein it was held that imposition of penalty would be unwarranted in a case, where the assessee has committed inadvertently and bona fide error and had not intended to or attempted to either conceal its income or furnish inaccurate particulars of income. We delete the penalty sustained by ld CIT(A). Decided in favour of assessee.
-
2023 (6) TMI 87
Addition u/s 68 - proceeds from the sale of shares by treating the scrips as penny stocks - Whether any link between the assessee with the entry operators/exit providers? - HELD THAT:- Despite the Revenue having the information regarding the stockbrokers through whom the shares were sold, there is no evidence on record that even these shareholders were named in the investigation conducted by the Investigation Wing of the Department. AO has not given any adverse comments or drawn adverse inferences on the documentary evidence submitted by the assessee. Revenue has failed to prove with any cogent evidence on record that the assessee was involved in converting his unaccounted money into long-term capital gains and short-term capital gains by conniving with any entry operator/exit provider, who was involved in artificial price rigging of shares. This is the case wherein the AO merely on the basis of suspicion rejected the claim of the assessee, without establishing any link between the assessee with the entry operators/exit providers, who were allegedly involved in price rigging of shares artificially of the aforesaid companies. Direct the AO to delete the impugned addition made under section 68 and accept the plea of the assessee in respect of the long-term capital gains and short-term capital gains earned during the year. Decided in favour of assessee.
-
2023 (6) TMI 86
Foreign Tax Credit (FTC) - amount pertains to the taxes paid by the assessee in USA on the income offered to tax in India - HELD THAT:- CIT(A) had stated that prima facie the contentions of the assessee appears to be correct and directed the AO to verify the factual position of the assessee s plea and to allow the claim of the assessee in accordance with law. The directions of the CIT(A) are clear and we see no reason to interfere with the order of the CIT(A) on the said issue. AO is directed to pass the appropriate orders in compliance with the directions of the CIT(A). Interest u/s 234C - AO s action in levying interest on the assessed income instead of the returned income - HELD THAT:- As in the case of Aishwarya K. Rai Vs. DCIT[ 2009 (1) TMI 860 - ITAT, MUMBAI] had held that interest u/s 234C of the Act is to be levied on the returned income and not on the assessed income - We direct the AO to restrict the levy of interest under section 234C of the Act to the returned income instead of the assessed income.
-
2023 (6) TMI 85
Maintainability of appeal before the ld. CIT(A) - Violation of section 249(4) - non-payment of admitted tax - HELD THAT:- The appeal before the ld. CIT(A) is caused the violation of section 249(4) and the appeal order U/s 250 is caused nullity which will be not maintainable before the bench. Tribunal is without jurisdiction if the first appeal is not maintainable on account of non-payment of admitted tax. In terms of section 249(4)( a ), appeal against such order of the CIT(A) is not maintainable before the Tribunal. The orders against which appeals are maintainable before the Tribunal U/s 253 include an order passed under section 250 of the Act which is an order in appeal passed by the CIT(A) on merits after entertaining the appeal. However, no appeal is provided against order of the CIT(A) declining to entertain appeal as defective or one not maintainable on account of non-payment of tax during filing of return - Assessee had never explained this issue or not made any objections related to this ground of revenue in the written submission. Issue related claim of section 32(1)(iia) for additional depreciation is entirely factual issue. But the appeal order itself caused not maintainable for violation of section 249(4) for non-payment of the admitted tax. So, the other grounds are kept open before the ld. CIT(A) - We remit back the matter to the ld. CIT(A) for adjudication the issue in relation to contravening of section 249(4) of the Act. Appeal allowed for statistical purposes.
-
2023 (6) TMI 84
Late fees levied u/s 234E - interest thereon charged under section 220(2) - whether late fee u/s 234E cannot be charged relating to period of tax deduction prior to 01.06.2015? - HELD THAT:- There is no dispute that the issues involved in these appeals are squarely covered in favour of the assessee by the aforesaid orders in the cases of Shivansh Infraestate Pvt. Ltd. vs. ACIT [ 2022 (8) TMI 439 - ITAT LUCKNOW ], Executive Engineer, Tubewell Division Barabanki vs. Income Tax Officer(TDS)-II [ 2022 (11) TMI 1359 - ITAT LUCKNOW] , Dr. Saumya Singh vs. ACIT [ 2018 (10) TMI 1960 - ITAT LUCKNOW ], Fatheraj Singhvi vs. Union of India [ 2016 (9) TMI 964 - KARNATAKA HIGH COURT ], United Metals vs. Income-tax Officer (TDS) [ 2021 (12) TMI 1349 - KERALA HIGH COURT ] and Additional DIGP vs. Dy. CIT (TDS) [ 2020 (9) TMI 285 - ITAT DELHI ] wherein as held the impugned notices under Section 200A of the Act for computation and intimation for payment of fee under Section 234E as they relate to for the period of the tax deducted prior to 1.6.2015 are set aside. We direct the Assessing Officer to delete the late fees levied under section 234E of the I.T. Act and interest thereon charged under section 220(2) of the I.T. Act - Decided in favour of assessee.
-
2023 (6) TMI 83
Characterization of income - Treating the agriculture income declared by the assessee as Business income - CIT (A) deleted the addition observing that the income derived from similar activities in the past previous years had been accepted by the Revenue without any adverse finding and the same has been treated as agricultural income - HELD THAT:- No valid reason to reverse the findings of the CIT (A) for the reason that in the past assessment years while making scrutiny assessments u/s 143(3) AO has accepted the stand of the assessee that activities of cultivating of sugar cane seeds as agricultural activity and the income derived therefrom is agricultural income. No valid reasons to deviate from the stand taken by the revenue from earlier years as there was no change in facts. Ratio of the decision of Radhasoami Satsang [ 1991 (11) TMI 2 - SUPREME COURT] was rightly applied by the CIT (Appeals). Thus, we sustain the order of the ld. CIT (Appeals) and reject the ground raised by the Revenue. Addition u/s 41(1) - outstanding balances in sundry creditors accounts - CIT (A) following the decision of Sugauli Sugar Works (P.) Ltd [ 1999 (2) TMI 5 - SUPREME COURT] deleted the addition - HELD THAT:- In the absence of the creditor, it is not possible for the authority to come to a conclusion that the debt was barred and had become unenforceable. There may be circumstances which may enable the creditor to come with a proceeding for enforcement of the debt even after expiry of the normal period of limitation as provided in the Limitation Act. The principle that expiry of period of limitation prescribed under the Limitation Act cannot extinguish the debt but it will only prevent the creditor from enforcing the debt is well- settled. Mere entry in the books of account of the debtor made unilaterally without any act on the part of the creditor would not enable the debtor to say that the liability had come to an end. Apart from that that would not by itself confer any benefit on the debtor as contemplated by the section. Therefore, as right in holding that the assessee's unilateral entry in the accounts transferring the amount to the capital reserve account would not bring the matter within the scope of section 41. - Decided against revenue. Addition u/s 14A r.w.r. 8D(2)(iii) - CIT (Appeals) considering the submissions of the assessee that only 0.5% of average value of investments which yielded the exempt income should be considered for the purpose of disallowance under Rule 8D(2)(iii), held that the AO wrongly computed the disallowance and deleted the excess disallowance - HELD THAT:- As in view of the decision of Vireet Investment (P) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] and also the decision of ACB India Ltd. Vs. CIT [ 2015 (4) TMI 224 - DELHI HIGH COURT] only those investments which yielded Tax free dividend income should be considered for disallowance under Rule 8D(2)(iii). Therefore, we see no infirmity in the order passed by the ld. CIT (Appeals). The ground raised by the Revenue is rejected.
-
2023 (6) TMI 82
Penalty u/s 271(1)(b) - non-compliance of notice u/s 142(1) - reasonable cause for non-compliance u/s 273B - HELD THAT:- As no compliance on the date of hearing though notice was sent through Speed Post. However, it is observed that there is no finding by the AOthat any of the above notices was served on the assessee and the assessee did not comply. Even before us no evidence was furnished by the Revenue suggesting that the above notices were in fact served on the assessee and there was no compliance by assessee. Assessee submission that he was attending to his ailing father and no notice was served on him as he was not residing in the premises cannot be brushed aside in view of the death certificate of his father who passed away on 22.02.2018 and medical reports dated 18.05.2017 and 09.08.2017. All this goes to show that there is reasonable cause for non-compliance of the above notices even assuming they were served. This not a fit case for levy of penalty u/s 271(1)(b) - Decided in favour of assessee.
-
2023 (6) TMI 81
Adhoc addition of 20% of mobilization advance u/s 68 r.w.s. 115BBE - CIT(A) deleted the addition observing that details regarding mobilization advances were fully filed before the assessing officer and thus the conclusion of Ld. AO of absence of the evidences was factually incorrect - HELD THAT:- The Bench is of considered opinion that the genuineness, identity and creditworthiness of the parties making mobilization advances was never questioned so no addition could have been made by Ld. AO by invoking provisions of section 68 - there seems to be no justification to make an adhoc disallowance u/s 68 of the Act. Ld. AO was suppose to either accept mobilization advance as a whole on the basis of running account or to a disbelieve the whole. Ad hoc disallowance without pointing out any shortcoming in accounting method or books is not sustainable. On this account alone the ground deserves to be dismissed. AO failed to take into consideration the details of mobilization advances in the form of short term and long term mobilization advances duly matched with the total outstanding mobilization advance - The Bench is not inclined to interfere in the findings of Ld. CIT(A) deleting the addition. Decided in favour of assessee. TDS credit denied - As observed that the claim of assesses was that mobilization advances received during the year on which TDS gets deducted stands offered as income of the same year and stand offered in the form of WIP. CIT(A) has duly taken into consideration the position of mobilization advances received during the year and the fact that when the Ld. AO has given TDS credit in ITNS 150 and therein had disallowed TDS credit to the extent Rs. 2,52,32,908/-. TDS credit cannot be added as income of the assessee as the same leads to double taxation. The cross objection of the assessee claiming TDS of the entire amount 2,52,32,908 /- instead of proportionate credit given by Ld. CIT(A) was not pressed. Disallowance of salary and wages - assessee has violated matching principle of accounting by claiming excess expenditure in proportion to the revenue offered to taxation - CIT-A deleted the addition - HELD THAT:- CIT(A) has rightly concluded that Ld. AO has mistaken in referring to note 23 of the P L account which only reflected the position of opening materials, purchases and closing materials. The position of WIP is not shown in this note but part of Note 24. The method of valuation of WIP has been consistently followed by the assessee over years and has been accepted in preceding as well as succeeding years. The same is also in accordance with accounting standards. Thus, the disallowance on adhoc basis without any rational has been rightly deleted by Ld. CIT(A) and no interference is called for. The ground is decided against the Revenue.
-
2023 (6) TMI 80
Short grant of TDS credit - CPC has denied the TDS credit on the ground that amount is not reflected in 26AS - whether credit of TDS can be allowed to the assessee, i.e., Late Russi Dinshaw Bahadurji having offered the income and have been taxed on the same for the TDS amount - conditions provided in Rule 37BA - in the case of the Trust, nil return was filed and no TDS credit has been filed - HELD THAT:- Deduction is allowed for the amount paid to the Treasury of Central Government which shall be treated as payment of tax on behalf of the person from whose income, the deduction was made where the TDS was deducted on income which has been shown and offered to tax by the assessee, Late Russi Dinshaw Bahadurji even though TDS has been deducted in the case of Deed of Settlement / Trust. There is no provision of Section 199(1) that deduction cannot be allowed on the payment of tax who has offered the income. Rule 37BA which has been framed by the CBDT in terms of section 199(3) provides credit for tax deducted at source for the purpose of Section 199. Here it is a case, the present assessee which is in appeal before us has offered income on which TDS has been deducted and it is not able to receive the credit despite the PAN on which TDS has been deducted has not shown in the return of income and is clearly stated that no credit for TDS is being taken as the income belongs to the assessee and credit should be given there. Thus, in these circumstances, the strict conditions provided in Rule 37BA especially the forms prescribed under the Rules has to be read in the spirit of provision of Section 199(1) which in our opinion should prevail upon the forms and the conditions provided in the Rules. Rules and forms issued should not frustrate the main provisions of the Act, but we are not laying any proposition that the conditions of Rules are not to be adhered to, but when there such pressing circumstances and Revenue is aware that TDS credit is being claimed under right hands and original deductee is not claiming any TDS and has given declaration that it has neither shown the income nor it will claim in future, then there should be a mechanism to resolve the issues or Revenue should direct the deductor to comply with it. Accordingly assessee should be given credit of TDS amount u/s.199(1) and accordingly, the ground raised by the assessee is allowed.
-
2023 (6) TMI 79
Assessment u/s 153C - validity of the notice issued u/s. 153C of the Act and completion of assessment u/s 143(3) r.w.s 153C - scope of curable defect u/s. 292BB - HELD THAT:- Search operation u/s.132 was conducted in the premises of M/s. Apex Frozen Foods Limited and subsequently in the premises of the assessee. AO has issued a notice u/s.153C wherein it was stated that the AO has required the assessee to prepare the true and correct return of the total income in pursuance of the provisions of section 153C r.w.s 153A of the Act for the impugned assessment year. As per the provisions of the Act, consequent to the search, as per the requirement of law, in case the premises of the persons have been searched, then the proceedings to be initiated are by way of issue of notice u/s. 153A of the Act. In the instant case, the documents were seized from the residential premises of the assessee and therefore the Ld. AO ought to have issued notice u/s.153A instead of notice u/s.153C - we find from the written submissions made by the AR regarding the satisfaction note recorded by the AO wherein the AO proposed to issue notice u/s. 153C - the initiation of proceedings u/s.153C in the case of the assessee who is the person searched is not valid. It is not out of place to mention that any defects in notices u/s. 153A / 153C of the Act, whereby the Assessing Officer assumes jurisdiction, are not curable U/s. 292BB of the Act even though the assessee participated in the assessment proceedings without objection. Therefore, it can be safely concluded that in the instant case, since the issue of notice U/s. 153C is invalid and consequently, the assessment order passed U/s. 143(3) r.w.s 153C is bad in law and void ab initio. Assessee appeal allowed. Salary income - Perquisites - Addition u/s. 17(2)(v) towards insurance premium paid by the employer - whether premium paid by the employer on the policy taken on the life of the employee / assessee is a taxable perquisite as defined u/s. 17(2)(v) of the Act or not? - HELD THAT:- Admittedly, the policy is taken by the employer in the name of the employee and cannot be assigned in the name of the employer in a future date. The insurance policy is taken by the employer to protect the interests of the employees even though no immediate benefit is accrued to the employees. From the plain reading of the section 17(2)(v) of the Act, we find that any policy to effect an assurance on the life of the assessee shall be treated as a perquisite as defined in the Act. Therefore, the argument of the Ld. AR has no merits. We are therefore inclined to uphold the order of the Ld. CIT(A) and dismiss this appeal of the assessee.
-
2023 (6) TMI 78
Addition u/s 68 - Bogus LTCG from share transactions - HELD THAT:- AO has failed to appreciate that the shares were originally acquired in the year 1995 which fall outside the period commencing from January 2011 and ending on January 2015 examine/analysed by the Investigation Wing and/or the AO - The shares under consideration were not purchased by the Assessee and were acquired by way of gift during the relevant previous year. Assessment has been framed on the Assessee without carrying out any independent enquiry or investigation by the AO by merely relying upon the report of the investigation, and on the basis of incorrect understanding of the relevant facts. Accordingly, we overturn the findings returned by the AO and CIT(A) that the transactions entered into by the Assessee resulting in Long Term Capital Gains in the hands of the Assessee in respect of shares of M/s Aricent Infra Limited was not genuine transaction and delete addition u/s 68 - Decided in favour of assessee.
-
2023 (6) TMI 77
Unexplained investment - Unaccounted cash for purchase - admission of the third party / addition based on the statement of the third party - HELD THAT:- Except the admission of the vendor, that the assessee had paid unaccounted cash for purchase of villa in Green City Project of Vizag Profiles group, there is no supporting evidence placed before us by the revenue establishing that the assessee has paid extra amount. The revenue authorities has placed one appraisal report, where name of the assessee was mentioned showing that the assessee has paid an amount in cash. Case was reopened and the AO examined the issue and came to conclusion that the assessee has not established an amount therefore, he treated the said amount as unexplained investment. The assessee was not given the copy of the said statement of admission, nor he was given any opportunity for the purpose of rebutting the said statement. Mere admission of the third party cannot be a basis for making addition in the hands of the assessee without confronting the assessee about the incriminating material. M/s Vizag Profiles made a general statement that they have received some amount from the purchasers. Therefore, addition of unaccounted investment in the hands of the assessee cannot be sustained. Decided in favour of assessee.
-
2023 (6) TMI 76
Reopening of assessment u/s 147 - AO jurisdiction to re-open the assessment when normal procedure of assessment of income u/s. 143(3) was available which are otherwise within time - whether the assessment could be reopened by the issuance of notice u/s. 148 of the Act prior to the expiry of time limit for issuance of notice u/s. 143(2)? - HELD THAT:- This issue is no longer res integra in view of the decision of the Hon ble Jurisdictional High Court in the case of Smt Suman [ 2017 (8) TMI 567 - BOMBAY HIGH COURT] time to issue notice under Section 143(3) of the Act had expired, it is only thereafter that the AO could have reason to believe that the income chargeable to tax has escaped assessment. It is in such cases that the Assessing Officer would not be prohibited under Section 147/148 of the Act from seeking to recover tax on income which has escaped assessment. It is clear that no reassessment proceedings can be initiated so long assessment proceedings on the basis of return of income filed by the assessee is pending. The assessment proceedings would cease to be pending either by passing of an order under Section 143(3) of the Act or by expiry of time to issue a notice under Section 143(2) of the Act, to complete an assessment under Section 143(3) of the Act. So long as the above event has not passed, the Assessing Officer cannot render the provision of Section 143(2) of the Act redundant/otiose by issuing a notice for reopening an assessment under Section 147/148 - Decided in favour of assessee.
-
2023 (6) TMI 75
TP Adjustment - specified domestic transaction of project management and supervision - Capitalized expenditure - effect of omission of the clause (i) of Section 92BA - adjustment being disallowance of depreciation - HELD THAT:- We carefully find that that provision of section 40A (2) applies only with respect to the expenditure incurred by the assessee, which are otherwise allowable to the assessee. Here it is not the expenditure but depreciation allowance claimed by the assessee , therefore, it is not hit by provisions of Section 40A (2) of the act. As also enquired whether AO has any power to substitute Actual cost of an assets by the arm s-length price of purchase or acquisition of a capital asset u/s 32 Vis a Vis of Section 43(1) of the act in similar situation. On careful perusal of provisions of section 32 as well as the actual cost u/s 43 (1) for the purpose of claiming of the depreciation, we could not find any provision by which the actual cost incurred by the assessee, if acquired from or created from the associated enterprises can be substituted by the Arm s length price of purchase of such assets. We hold that AO is incorrect in determining the arm s-length price of specified domestic transaction after omission of clause (i) of Section 92BA - Hence, the action of the learned transfer-pricing officer in determining the arm s-length price of project management and supervision fees at Rs Nil and consequent disallowance of depreciation there on is not correct. Ground of the appeal of the assessee is allowed. Disallowance of depreciation on toll road - HELD THAT:- As decided in own case [ 2018 (5) TMI 2064 - ITAT MUMBAI] held that the claim of the assessee for depreciation on license to collect toll being an intangible asset is falling within the scope of Section 32 (1) (ii) of the act. Assessee was allowed depreciation on road constructed by it under built operates and transfer basis [BOT] was considered as an intangible asset . The coordinate bench also allowed the depreciation to the assessee at the rate of 25% thereon. Therefore, AO is directed to delete the disallowance of depreciation on toll roads - Ground of the appeal of the assessee is allowed. Correct head of income - interest on fixed deposits placed under the debt service obligation created by the lenders - income from business OR income from other sources - HELD THAT:- As relying on assessee own case [ 2018 (5) TMI 2064 - ITAT MUMBAI] following the decision of Lok Holdings [ 2008 (1) TMI 365 - BOMBAY HIGH COURT] upheld the order of the learned CIT A holding it to be interest income chargeable under the head business income. Therefore direct AO to consider interest income on fixed deposit as business income. - Ground of the appeal of the assessee is allowed. Short grant of tax credit - HELD THAT:- We direct the assessee to submit the proof before the learned assessing officer about such credit available to the assessee and whether corresponding income has been recorded in the books of account of the assessee for the respective year or not, thereafter, the learned AO may examine the same and decide the issue in accordance with the law. Accordingly, ground is allowed.
-
Customs
-
2023 (6) TMI 74
Classification of imported goods - Renadyl bulk probiotic dietary supplement capsules - to be classified under tariff item 3002 90 30 of First Schedule to Customs Tariff Act, 1975 or not - applicability of concessional rate of duties of customs, extended by notification no. 50/2017-Cus dated 30th June 2017 - extended period of limitation - penalty u/s 112 of CA - HELD THAT:- The concessional rate of duties of customs, extended by notification no. 50/2017-Cus dated 30th June 2017, is available to imported probiotics corresponding to tariff item specified therein; probiotics that are cultures of micro-organisms (excluding yeast) , corresponding to heading 3002 of First Schedule to Customs Tariff Act, 1975, are, doubtlessly, eligible to the benefit thereof which, being the default classification and as set out by the Hon ble Supreme Court in re Hindustan Ferodo Ltd [ 1996 (12) TMI 49 - SUPREME COURT] and in re HPL Chemicals Limited [ 2006 (4) TMI 1 - SUPREME COURT] , may be controverted only by proposing alternative classification established as adhering to the General Rules for Interpretation of Schedule in Customs Tariff Act, 1975. Of itself, mere enumeration in the exemption notification does not render all probiotics , or compounds containing probiotics, to be classifiable within heading 3002 of First Schedule to Customs Tariff Act, 1975. The General Rules for Interpretation of Schedule in Customs Tariff Act, 1975 require that classification should proceed from the heading to the sub-heading and tariff item and that the description in the first of these is critical for proceeding to the next two levels, notwithstanding the conformity, even having all the appearances of being unquestionably so, of an impugned article with description corresponding to a tariff item. It is apparent that probiotics may have been, as seen from the referred notification, legislatively intended to be counted as pharmaceutical product and, as cultures of microrganisms , would not be excluded. In the rulings of United States Customs, the significance of not being amenable to further manufacture has ruled the probiotic products impugned therein to certain inclusion as food supplement of some sort. In the absence of any domestic decisions that are contrary, or distinguishable on the given set of facts, foreign rulings offer sufficient guide insofar as customs assessment, endeavouring for universal uniformity, is concerned - there are no hesitation in holding that the classification adopted in the impugned order does not merit to be interfered with. Consequently, the appropriate rate, corresponding to the said description, in the notification for levy of integrated goods and services tax (IGST) applies. The concessional rate of duty sought for by the appellant in the bills of entry cannot be extended to them. Extended period of limitation - HELD THAT:- All that remains for consideration at this stage is exclusion from recovery under section 28 of Customs Act, 1962 owing to bar on invoking the extended period - there is no evidence of misdeclaration or suppression in the bills of entry filed by the appellant. It is also abundantly clear from our exposition leading to the outcome of upholding the classification sought to be fastened by the customs authorities that this was not so evident as even to speculate, let alone conclude, that the ingredients essential to invoking the extended period of limitation did exist. The demand is, thus, restricted to the normal period of limitation intended by section 28 of Customs Act, 1962 which, with effect from 14th May 2016, is two years from the relevant date. Penalty u/s 112 of Customs Act, 1962 - HELD THAT:- Penalty has been imposed on the appellant under section 112 of Customs Act, 1962 and appears to have been a consequence of the finding that the goods are liable for confiscation under one or the other provision of section 111 of Customs Act, 1962. Of the several elements therein, the sole breach that needs to be considered for evaluation is section 111(m) of Customs Act, 1962 - there are no material particular had been withheld in connection with clearance of the goods for home consumption. Hence, the goods are not liable for confiscation and, consequently, liability for penalty will not arise. Appeal allowed to the extent of setting aside the liability to confiscation and the penalty imposed - the recovery of differential duty is upheld - appeal disposed off.
-
Corporate Laws
-
2023 (6) TMI 73
Seeking grant of Regular Bail - alleged illegal movement of the goods worth Rs. 1,023 crores from the plant without raising invoices inter alia caused wrongful loss to BPSL - Fraud with the intent to injure interest of company punishable under Section 447 of the Companies Act - Siphoning off funds from BPSL in the form of bogus capital advances and routing the same as equity or unsecured loans to related entities of BPSL - Siphoning off funds from BPSL in the form of bogus advances to suppliers - Siphoning of funds through purchase of property through Assurity Real Estate LLP at Mumbai - Fraudulently availing the credit facilities from banks through the instrument of LCs by using false documents and other fraudulent activities punishable under Section 36(c) read with 447 of the Companies Act - Cheating upon the banks liable to be punished under Sections 120B, 417 and 420 of the Indian Penal Code, 1860 - Fraudulent inducement of banks as laid down in Section 36(c) of the Companies Act, punishable under Section 36(c) read with 447 of the Companies Act - Liability for making false representations in the financials for the Financial Year 2017-18, under Sections 129 and 448 read with 447 of the Companies Act - Falsification of books of accounts for not providing true and fair view of financials of BPSL for the financial year 2009-10 to 2016-17, liable for penal action under Section 129, 448 read with 447 of the Companies Act and Sections 211 and 628 of Companies Act, 1956 - Other fraudulent transactions punishable under Section 447 of the Companies Act - liability under Section 447 of the Companies Act, for misuse and fraudulent abuse of the structure of audit committee. HELD THAT:- This Court has to examine the case of the applicant with respect to the twin conditions contained in Sections 212(6)(i) and (ii) of the Companies Act, which are in addition to conditions for bail under Section 439 of the CrPC As mentioned hereinabove, the foundation of the case of the respondent with respect to the present applicant is that he was the Chief Financial Officer and being a Key Managerial Person had signed the financial statements of the year 2013-14 to 2016-17. The entire case of the respondent is primarily on the basis of aforesaid status of the present applicant. The material on record, by way of statements made by the entry operators, co-accused, employees of the companies, documents including the attendance registers of the board meetings as well as meetings of audit committee, as noted in the preceding paragraphs, prima facie indicates to the contrary. Reliance placed by the respondent on the statement made by Dinesh Kumar Behal to show that the present applicant attended the meetings is contradictory to their own documents which are contemporaneous in nature, which shows that the present applicant never attended the board meetings as well as audit committee. The veracity of the statement made by aforesaid Dinesh Kumar Behal will be tested at the time of his examination. The conspicuous absence of the present applicant s name from the attendance registers of board meetings and audit committee will have a bearing for the purposes of deciding the present application. It is pertinent to note that while grave allegations have been made qua the applicant with regard to connivance/conspiring with the promoters and other co accused, but no allegation with regard to his receiving benefits have been made. Admittedly, the evidence in the present case is predominantly documentary in nature and it has been pointed out by learned Senior Counsel, the complaint is accompanied with documents contained in 09 trunks. It is common knowledge that the trial is likely to take a long time. The reliance placed by the respondents on the orders with regard to co-accused Amarjeet Sharma and Alkesh Sharma, dismissing their bail applications by a coordinate bench of this court is misplaced. The aforesaid order of the coordinate Bench was with respect to the contention of the said co-accused with regard to Section 167(2) of the CrPC In any case the present application is being decided on the basis of its own facts. It is further noted that the present applicant was granted interim bail during the pendency of the present bail application and he surrendered in time without misusing the liberty granted. In the present case, in view of the discussion made herein before, this Court is of the opinion that from the material brought on record, the requirements of Sections 212(6)(i) and (ii) of the Companies Act, are satisfied. The applicant is admitted to bail upon furnishing a personal bond in the sum of Rs. 5,00,000/- alongwith two sureties of like amount to the satisfaction of the learned Trial Court/Link Court, further subject to the conditions imposed - bail application allowed.
-
2023 (6) TMI 72
Seeking restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC) - HELD THAT:- The impugned order dated 17.12.2021, the NCLT has rightly held that the Audited Financial Statements of the two immediately preceding Financial Years i.e., 2015-16 and 2016-17 filed by the Appellant Company reflected Zero revenue from its operations and have come to the conclusion that the Appellant Company was neither in operation nor carrying out its business at the time of its name was struck off from the register of Registrar of Companies. There are no merit in the instant Appeal to interfere with the order impugned passed by the NCLT. The impugned order dated 17.12.2021 passed by the National Company Law Tribunal (New Delhi Bench, Court-II) is hereby affirmed - The instant Appeal is hereby dismissed.
-
2023 (6) TMI 71
Compounding of offences - default in holding Annual General Meeting the company - non-compliance of Section 166/96 of the Companies Act, 1956/2013 - HELD THAT:- The fact remains that it was a joint application filed by the applicant alongwith other six persons including the company in question under Section 441 of the Companies Act, 2013. Section 441 of the Companies Act, 2013 deals with the compounding of offences. From the materials on record particularly the application filed before the NCLT which was number as CP 155/441/ND/2020 it is evident that the appellant has admitted default and days of default to the extent of 2905 days was admitted by the appellant. At this juncture it would be apt to reproduce Section 96 of the Companies Act, 2013 which mandate annual general meeting by the company and also consequences for non-compliance of provisions contained in Section 96 or 97 or 98 of the Act. It is also admitted case of the appellant that the appellant has committed default under Section 166 of the Companies Act, 1956 and for such default penalty is prescribed under Section 168 of the Companies Act, 1956. If there is default in holding Annual General Meeting the company and every officer of the company in default shall be punishable with fine. The appellant in the present case himself has admitted default and this was the reason that he was also a joint applicant before the NCLT. Once the appellant has admitted his default and thereafter approached the Tribunal for compounding the offence there was no ground for the appellant to assail the order of the compounding passed by the NCLT. Learned NCLT virtually has allowed the compounding application and as per legal position reduced the penalty. It is evident that as per calculation chart/report of the ROC the maximum fine was to be imposed on the appellant was to the extent of Rs.1,32,65,000/-. However, the Learned NCLT has reduced the said fine to the 1/5th of maximum fine and appellant has been imposed fine of Rs.26,53,000/-. It is further clear from the impugned order that the learned NCLT has taken consistent stand in respect of other defaulting members. No interference required in the impugned order - there is no merits in the appeal - appeal dismissed.
-
Insolvency & Bankruptcy
-
2023 (6) TMI 70
Initiation of CIRP - NCLT admitted the application - pre-existence of dispute - non-compliance with GST Rules - operational debt in default - It is submitted that whether the GST rules were complied or not by the Operational Creditor, did not vitiate the fact that there was an operational debt in default without there any pre-existing dispute raised in respect of that debt. HELD THAT:- Appellant did not file any Written Submissions in fact the order was passed on 04.05.2023 by this Appellate Tribunal that the Parties have to file their Written Submissions within two weeks. Counsel for the Appellant did not file any submissions, till date. The Learned Adjudicating Authority had admitted Section 9 Petition filed on behalf of the Respondent Operational Creditor and initiated CIRP proceedings. There are no irregularities and therefore accordingly there are no merits in this Appeal - appeal dismissed.
-
2023 (6) TMI 69
Resolution Plan implemented - liability for power connection on account of which, the Resolution Applicant was made to pay an additional amount of Rs.40,43,001/- to KSEB for the bills raised for the month of October 2018 - It was submitted by the RP before the Adjudicating Authority that the Resolution Plan does not include this amount of Rs.40 Lakhs but was paid by the Resolution Applicant to keep the Company as a going concern. HELD THAT:- The RP has categorically admitted that this amount which was paid towards the electricity bill was not a part of the Resolution Plan and that the Resolution Applicant had paid this amount of Rs.40 Lakhs for the month of October 2018, only to avoid disconnection of the Power Supply. It is an admitted fact that this electricity bill is for the period when the power was not consumed by the Resolution Applicant. It is also not in dispute that the Appellant/Sole Financial Creditor had received the entire balance payment without any objection. The Resolution Plan has been implemented. The Adjudicating Authority has categorically recorded in the Impugned Order that the Appellant herein had undertaken to return the original Title Deeds after receipt of the balance amount, but have not done so. It is also a matter of the record that the SRA has paid the balance amount of Rs.19,24,678/-. The electricity bills clearly reflect that the arrears as on 30.09.2018, is for the period which was prior to the Resolution Applicant having taken over the Company and, therefore, we do not see any substantial grounds in interfering with the directions given by the Adjudicating Authority that the amount paid by the Resolution Applicant towards the electricity bills, though not a part of the Resolution Plan, be set off from the interest portion of the Sole Financial Creditor. The electricity dues upto the transfer date are the liability of the Appellant and there are no substantial grounds to interfere with the well-reasoned Order of the Adjudicating Authority. This Tribunal is of the earnest view that the subject Title Deeds are to be handed over to the SRA within a week from the date of this Order. Appeal dismissed.
-
2023 (6) TMI 68
Initiation of CIRP for the resolution of an unresolved financial debt - NCLT Admitted to the application - time limitation - it is alleged that though the Financial Creditor had mentioned that the default occurred on 31.03.2014 but the date of default mentioned in part IV of the application filed under Section 7 of the Code is 01.06.2015. HELD THAT:- In the present case, the claim w.e.f. 01.06.2015 till 01.06.2018 was live because the Financial Creditor could have filed a petition under Section 7 of the Code during this period and the occurrence of one time settlement/compromise, initiated at the instance of the Corporate Debtor during this period vide its letter dated 31.01.2018 had revived the period of limitation from 31.01.2018 to 31.01.2021 in terms of Section 18 of the Limitation Act and the application under Section 7 of the Code having been filed on 15.01.2021 is thus within the period of limitation. In the given facts and circumstances of the case Vidarbha Industries Power Limited [ 2022 (7) TMI 581 - SUPREME COURT] , relied upon by the Appellant, is not applicable because there is a clear admission on the part of the Corporate Debtor of the amount of debt due in view of the letter dated 31.01.2018. The Hon ble Supreme Court in the case of M. SURESH KUMAR REDDY VERSUS CANARA BANK ORS. [ 2023 (5) TMI 570 - SUPREME COURT ] has held that it was clarified by the order in review that the decision in the case of Vidarbha Industries was in the setting of facts of the case before this court. Hence, the decision in the case of Vidarbha Industries cannot be read and understood as taking a view which is contrary to the view taken in the cases of Innovative Industries and E.S. Krishnamurthy [ 2021 (12) TMI 683 - SUPREME COURT] . The view taken in the case of Innovative Industries still holds good. There is hardly any merit in these two appeals which do not require any interference and therefore, the present appeals are hereby dismissed.
-
PMLA
-
2023 (6) TMI 67
Seeking grant of Regular Bail - Money Laundering - predicate Offence - siphoning off of funds on the basis of fake/fictitious invoices - main thrust of the petitioner's submission is that the petitioner exercised no control over the affairs of Phoenix FZC; and that he was neither an employee, nor did he hold any key position in the management of the company - HELD THAT:- It cannot be gainsaid that the offence comprised in section 3 of the PMLA is a grave and serious economic offence, and has been couched in the widest of terms. However, before proceeding to consider the rival submissions of the parties, it is necessary to briefly set-out the position of law as enunciated by the Supreme Court as regards the considerations that must inform the grant or denial of bail in matters under the PMLA. In its recent decision in Ashish Mittal vs. Serious Fraud Investigation Office [ 2023 (5) TMI 144 - DELHI HIGH COURT ] , in the context of section 212(6) of the Companies Act, 2013 which contains a provision in pari materia to section 45(1)(i) and (ii) of the PMLA, this court has held that When the public prosecutor opposes a bail plea, he would have to establish foundational facts sufficiently to dislodge the presumption of innocence, and it is only then that the onus of satisfying the stringent twin-conditions would shift onto the accused. To be clear, there is no statutory mandate for the court to depart from the presumption of innocence. Insofar as the ED not having arrested similarly placed co-accused persons; and not even having arraigned some other persons evidently connected with the offending transactions as accused in the prosecution complaint, though these aspects would not be dispositive of a bail plea one way or the other, they are also not wholly irrelevant and the doctrine of parity is not immaterial - insofar as the allegation of the ED as regards the petitioner s conduct is concerned, it would appear that the petitioner has been forthcoming with the investigating agency about information that he did possess about the affairs of Phoenix FZC, as is seen from his statements recorded under section 50 of the PMLA. As regards the ED s submission that the petitioner asked his son to delete e-mails concerning transactions of Phoenix FZC from his e-mail ID [email protected] and forwarded the same to another e-mail ID [email protected], it is observed that such e-mails have subsequently been recovered by the investigating agency and the investigation has not suffered on that count. The prosecution complaint having now been filed, there is no demonstrable risk as to evidence tampering. In the circumstances, for the purpose of grant of regular bail to the petitioner, this court is satisfied that there are reasonable grounds to believe that the petitioner is not guilty of the offence under section 3 of the PMLA. Further, considering that the prosecution complaint has been filed before the learned trial court; that the petitioner has materially co-operated in the investigation; and in view of the nature of the alleged role played by the petitioner in the allegedly offending transactions, this court is also satisfied that the petitioner is not likely to commit any offence under PMLA while on bail. This court is of the view that the petitioner deserves to be granted relief; and is hereby admitted to regular bail pending trial, subject to the conditions imposed - application allowed.
-
Service Tax
-
2023 (6) TMI 66
Valuation of services - photocopying services - whether cost of consumables used in the photocopying services is includible in the assessable value or not, while the Service Tax is to be paid - period involved is April, 2001 to March, 2006 - extended period of limitation - HELD THAT:- Admittedly, the issue as to whether the cost of consumables is includible in the assessable value or not was under dispute and was being litigated in various coordinate Benches of the Tribunal, who have taken varying stands and decisions. The matter had also gone up to the Hon ble Supreme Court and the matter was resolved by way of Larger Bench which shows that even the coordinate Benches were not on the same page on this issue. In the case of Nice Colour Lab vs CCE, Jaipur [ 2013 (5) TMI 201 - CESTAT NEW DELHI ] and Laxmi Colour Lab vs CCE [ 2012 (7) TMI 811 - CESTAT, NEW DELHI ] wherein on identical issues the Tribunals have held that the demand for the extended period does not sustain. Accordingly, he submits that the Appeal may be allowed on limitation. It is seen from the record that even in the Appellant s own case, the Commissioner (Appeals) has agreed with the submissions of the Appellant that they are eligible to get abatement towards the cost of consumables used by them. This would mean that within the same Department the Adjudicating Authority has taken stand that the value of consumables is to be added and the Commissioner (Appeals) has taken stand that the same is not required to be added. Such being the case, it is clear that the issue is that of interpretation. The confirmed demand for the extended period along with the interest is set aside - Assessee is required to calculate and pay the Service Tax for the normal period along with interest. Since the entire issue is on account of interpretational difficulties, all the penalties are set aside - Appeal disposed off.
-
2023 (6) TMI 65
Levy of interest and penalty - entire payment of Service Tax even before the issue of Show Cause Notice - Manpower services - cum-tax benefit in terms of Section 67(2) of the Finance Act, 1994 - HELD THAT:- It is seen that there is no dispute that entire amount of Service Tax as demanded in the Show Cause Notice has been paid by the Appellant even before issue of the Show Cause Notice. It is not known as to whether the Appellant was even made aware of the fact that if the interest is paid by them, the Appellant would get complete waiver of the penalties. It is also seen that the Appellant has claimed that they have not charged the Service Tax on their clients and they have paid the Service Tax based on the quantification done by the Department wherein cum-tax benefit has not been granted. From the Show Cause Notice and Order-in-Original it is seen that the Department has not disputed the appellant s claim that they have not charged/collected the Service Tax from their clients. In such a situation when the Appellant has not charged the Service Tax on their clients they are entitled to the cum-tax benefit in terms of Section 67(2) of the Finance Act, 1994. Matter remanded to the Adjudicating Authority - Appellant should be allowed to get the benefit of cum-tax benefit and the amount of the Service Tax is required to be quantified - Appellant is required to pay the interest on the re-quantified amount of Service Tax from the time the Service Tax was due till the date on which Service Tax liability has been completed by him.
-
2023 (6) TMI 64
Levy of Service tax alongwith interest and penalty - Business Auxiliary services - service of procurement of space on the vessel - HELD THAT:- Reliance placed in the case of GREENWICH MERIDIAN LOGISTICS (INDIA) PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX MUMBAI [ 2016 (4) TMI 547 - CESTAT MUMBAI ] where it was held that The notional surplus earned thereby arises from purchases and sale of space and not by acting for a client who has space or slot on a vessel. Section 65(19) ibid will not address these independent principal-to-principal transactions of the appellant and, with the space so purchased being allocable only by the appellant, the shipping line fails in description as client whose services are promoted or marketed. Therefore, the demands, with interest thereon, and penalties are set aside. There are no merits in the impugned order - appeal allowed.
-
Central Excise
-
2023 (6) TMI 63
Levy of penalty under Section 11AC of the Central Excise Act, 1944 - demand was made on the basis of the return submitted by the assessee and within normal period of time - HELD THAT:- The contention of the appellant before the Tribunal was that the delay in payment on account of financial difficulties and prayed for waiver of the penalty altogether. The learned Tribunal rightly noted that the decision of the Hon ble Supreme Court in UNION OF INDIA AND OTHERS VERSUS DHARMENDRA TEXTILE PROCESSORS AND OTHERS [ 2008 (9) TMI 52 - SUPREME COURT ] and dismissed the appeal. Appeal dismissed.
-
2023 (6) TMI 62
Levy of interest on the differential duty paid during the relevant period - issuance of supplementary invoices enhancing the value declared at the time of clearance of the goods - suppression of facts - extended period of limitation - HELD THAT:- The issue has been settled by the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS M/S SKF INDIA LTD. [ 2009 (7) TMI 6 - SUPREME COURT] , wherein it has been observed that at the time of sale the goods carried a higher value and those were cleared on short payment of duty. The differential duty was paid only later when the assessee issued supplementary invoices to its customers demanding the balance amounts. Seen thus it was clearly a case of short payment of duty though indeed completely unintended and without any element of deceit etc. The payment of differential duty thus clearly came 13 under sub-section (2B) of section 11A and attracted levy of interest under section 11AB of the Act. Extended period of limitation - HELD THAT:- The appellant on payment of differential duty on the supplementary invoices due to revision in prices invariably reflected the same in their ER1 returns filed with the department from time-to-time. Thus, calling for the data by the Revenue again which already mentioned in the respective ER-1 Returns and non-furnishing of the same by the appellant in time, cannot be held as a ground to uphold the suppression of facts in the form of data from the knowledge of the department - it has been observed that on declaration of the differential duty paid by reflecting the same in the relevant monthly returns filed with the department from time-to-time, would not fall within the scope of suppression of fact and accordingly, extended period of limitation was set aside in those cases. With regard to applicability of period of limitation for recovery of interest incorporated at sub-section (15) in Section 11A of CEA, 1944 with effect from 08.4.2011, the demand of interest can be sustained only for the normal period. The impugned order is modified to the extent of confirming recovery of interest for the normal period. Since there is no suppression of fact, the imposition of penalty, in the circumstances of the case, is not warranted. Appeal allowed in part.
-
2023 (6) TMI 61
Denial of adjustment of excess payment against the alleged short payment of duty - denial on the ground that the appellant had passed on the excess amount of duty as CENVAT Credit to M/s. BPCL through Central Excise cenvatable invoices issued under Rule 11 of the Central Excise Rules, 2002 - Rule 7 of the Central Excise Rules, 2002 - HELD THAT:- On a conjoint reading of Rule 7 of the Central Excise Rules, 2002 along with the Instructions given in Chapter 3 of the C.B.E.C. s Excise Manual for Supplementary Instructions issued under Rule 31 of the Central Excise Rules, it is clear that finalization of provisional assessment is required to be done on monthly basis. Finalization of provisional assessment means finalization of an issue or ground and thereafter, finalization of each E.R.-1. It is to be noted that in the scheme of Central Excise, returns are filed on monthly or quarterly basis and assessments are made on monthly or quarterly basis. Therefore, the provisional assessments have to be finalized for every month separately and it is for this reason that Rule 7(4) refers to the month for which the assessment is finalized. As assessment is to be finalized for each and every month separately, the words used in Rule 7(4) are for the month as the differential duty is to be paid for every month. The original adjudicating authority after considering the details as to the clearances made by M/s. BHEL to M/s. BPCL, Kochi, have finalized the provisional assessments on the basis of the clearances made in each month, i.e., as per the E.R.-1 returns filed, and arrived at the shortfall of duty for the period from January 2008 to August 2008 and from June 2009 to July 2010 and the excess payment of duty for the period from September 2009 to May 2009 - In doing so, as above, he has adhered to the instructions given in the C.B.E.C. s Excise Manual for Supplementary Instructions as well as the provisions of Rule 7 of the Central Excise Rules, 2002. For the shortfall, he raised a demand of Rs.10,92,739/- whereas in the case of excess payment to the tune of Rs.11,87,283/-, the original adjudicating authority has ordered for credit into the Consumer Welfare Fund as there is a finding that duty of excise paid to M/s. BHEL had been passed on to M/s. BPCL, Kochi. There is a categorical finding in the adjudication order that the duty burden has been borne not by M/s. BHEL, but by M/s. BPCL, the consignee of the goods. The refund of the excess payment was not sanctioned for the reason that the duty burden has been passed on to M/s. BPCL attracting the provisions of Rule 7(6) - Not only that, M/s. BPCL had availed CENVAT Credit of the excess payment of duty on the basis of Central Excise cenvatable invoices issued under Rule 11 of the Central Excise Rules, 2002. As such, we do not find any error in the order passed by the lower adjudicating authority. The appellant s reliance on the decision of the Hon ble High Court of Karnataka at Bangalore in the case of M/s. Toyota Kirloskar Auto Parts Pvt. Ltd. [ 2011 (10) TMI 201 - KARNATAKA HIGH COURT ] is not applicable to the facts of this case as the issue involved therein was relating to finalization of provisional assessments of related party transactions on the basis of CAS-4 prices. The issue involved in the above case was the demand of interest and the facts are, as such, distinguishable. There are no infirmity in the orders of the lower authorities and accordingly, the appeal is dismissed.
-
2023 (6) TMI 60
Method of Valuation - Section 4 (1) (a) of Central Excise Act, 1944 or Rule 10A of Valuation Rules, 2000? - clearances made to M/s. Mira Textiles Industries (I) Ltd. and M/s. Mohan Breweries under the instructions of M/s. Mira - appellant was getting the kraft paper (raw material) under the cover of Central Excise invoices from M/s.Mira and after availing the credit of craft paper, the same was being converted into carton boxes (finished products) - job-work or not - Department was of the view that amount received by the appellant was only compensation of the expenditure incurred by them and received by them through the sale invoices raised. HELD THAT:- It has to be noted that there is no free supply of raw materials to the appellant by M/s. Mira Textiles and it is actually purchased by raising invoices and paying the value of the raw material along with duty and applicable Sales Tax / VAT. The ownership of the raw material is therefore transferred from M/s. Mira Textiles to the appellant. Such kraft paper is used for manufacture of carton boxes which are finished product and cleared to M/s. Mira Textiles and M/s. Mohan Breweries under the instructions of M/s. Mira Textiles. The department has relied upon a statement of Shri G. Hari Hara Subramanian, General Manager of appellant-company to allege that appellant is a job worker. The documentary evidence in the nature of invoices for purchase of raw materials, invoices for clearances of finished products indicate that the appellant is an independent manufacturer. Documentary evidence prevails over oral statement which is not put to the test of examination and cross-examination as required under Section 9D. There is no evidence to support the case of the department. It clearly shows that the appellant has purchased raw materials and used them for manufacture of carton boxes as an independent manufacturer. Similar issue was considered by the Tribunal in the case of COROMANDEL PAINTS LTD. VERSUS COMMISSIONER OF C. EX., VISAKHAPATNAM [ 2010 (9) TMI 315 - CESTAT, BANGALORE] where it was held that merely indicating the vendors of the raw materials or by giving advance money for procurement of such materials or installing the equipments giving by the SIPL would not render the appellant as a job worker. T he demand cannot sustain. Impugned order is set aside - Appeal allowed.
-
2023 (6) TMI 59
Extended period of limitation - Excisability - manufacture of Cable Jointing Kits which comprises of various components - suppression of facts - extended period of limitation - HELD THAT:- By remanding the matter Tribunal has vide order no A/1008-1010/12/EB/C-II has held that The present demands are made by issuing different show-cause notices on the ground that the appellants were clearing the compounds to independent buyers and also captively consuming the same and therefore the appellants were wrongly paying duty under Rule 8 of the Central Excise Valuation Rules. The provisions of Rule 8 of Central Excise Valuation Rules are applicable when the goods manufactured are captively consumed only. In the order of Commissioner (Appeals) that earlier show-cause notices were issued on the issue of valuation also which have been adjudged by the Commissioner (Appeals) in favour of the Appellant. Revenue has not filed any appeal against this order. Hence assessment proceedings are finalized by the set order - Issuance of another show-cause notice in 2012 invoking extended period of limitation sustained for the reason that entire facts were in the knowledge of department and charge of suppression etc., required for invoking extended period cannot be sustained. Appeal allowed.
-
2023 (6) TMI 58
Recovery of credits which were excluded from the definition of inputs through Explanation 2 of Rule 2(k) of CENVAT Credit Rules, 2004 - finding of the Larger Bench of this Tribunal in Vandana Global Ltd. giving retrospective effect was given to the Notification No. 16/2009-CE(NT) - HELD THAT:- As could be understood the entire dispute is based on the finding of the Larger Bench of this Tribunal in VANDANA GLOBAL LTD. VERSUS CCE [ 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] by which retrospective effect was given to the Notification No. 16/2009-CE(NT) and accordingly Respondent-Department had issued periodic notices demanding recovery of credits which were excluded from the definition of inputs through Explanation 2 of Rule 2(k) of CENVAT Credit Rules, 2004. However, the said judgment of the Larger Bench had been reversed by the Hon'ble High Court of Chhattisgarh in the case of same Vandana Global Ltd., [ 2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT] and learned Counsel for the Appellant Mr. Rajesh Ostwal had rightly drawn our attention to para 5, 6 8 of the judgment that had crystallised the issue by holding that such explanation, being not in the nature of proviso, can be considered to be operative only from the date of its insertion. On going through Annexure A of the show-cause notice and found that along with the items mentioned in the explanation some other items, as pointed out by learned Counsel for the Appellant, are also figuring in the said Annexure A but it would be practically imposable at our end to compute with accuracy and reference to invoices as to if confirmed demand includes also admissible credit of Rs.1,95,91,425/- for which while agreeing with the Appellant s claim that credits in respect of all items including the items explained in Explanation 2 are admissible to the Appellant for the period from February, 2008 to 07.07.2009, non-availability of credits, as indicated in Explanation 2, to the Appellant would be effective from 07.07.2009 to June 2010, which Appellant claims to have not availed while Commissioner confirmed the entire demand including the other credits admissible to the Appellant - it is considered proper that for this limited purpose appeal could be remanded to the Original Authority. For the purpose of computation of the demand in Annexure A of the show-cause notice for the period beyond 07.07.2009 and for consideration of the issue on merit in respect of Annexure B containing list of other credits availed by the Appellant allegedly held in the Order-in-Original as completely inadmissible, re-adjudication is to be done on the basis of relied upon case laws cited by the Appellant here and to be placed before the Commissioner during the remand proceeding. Now coming to the issue in respect of other periods, it is undisputed fact that goods excluded under Explanation 2 annexed to Notification No. 16/2009-CE(NT) were not included by the Appellant as inputs for the purpose of availment of CENVAT Credits but in respect of other items namely concrete railway sleeper, other iron steel items, welding electrodes, Railway track material etc. which were supposed to be admissible credits as the same issues are no more res integra, in view of series of judgments passed in Appellant s own case in M/S. THE INDIA CEMENTS LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE [ 2013 (8) TMI 576 - MADRAS HIGH COURT] . Appeal No. E/85078/2013 is partly allowed and CENVAT Credit availed by the Appellant for the period prior to 07.07.2009 as per Annexure A to show-cause notice is entirely admissible and CENVAT Credit in respect of items shown in Annexure B relating to items referred in Explanation 2 of Rule 2(k) are inadmissible to the Appellant - matter is remanded to the original authority to decide the issue on merit - appeal allowed by way of remand.
-
CST, VAT & Sales Tax
-
2023 (6) TMI 57
Classification of goods - applicable rate of tax - LAN Connection Cable (CAT-5, CAT-6) - taxable under S. No. 3 or 24 of Part A of Entry No. 65 of Schedule-IV or at General Rate as per Schedule-V appended to the Rajasthan Value Added Tax Act, 2003? - HELD THAT:- The word computer system and peripheral is not defined anywhere in the RVAT Act. At this juncture, it would be apt to consider the way in which it has been interpreted by different Courts. In the case of KORES (INDIA) LIMITED VERSUS ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ANTI EVASION [ 2016 (2) TMI 1363 - RAJASTHAN HIGH COURT] , Coordinate Bench of this Court observed that That as a matter of fact, the entry is wider, which includes not only computer printers, but computer peripherals also. This Court finds no justification in the contention raised by the learned counsels for the Revenue, that the word peripherals has to be construed narrowly to limit and include only accessories like, mouse, webcam or keyboard, as computer peripherals, to be taxed @ 4% under the said entry, and not to include therein the Multi Functional Devices. Further, in the case of M/S SHARP BUSINESS SYSTEMS (INDIA) LTD. VERSUS THE ASSISTANT COMMISSIONER ANTI-EVASION, ZONE-I, THE RAJASTHAN TAX BOARD, KAR BHAWAN, THE ASSISTANT COMMISSIONER ANTI-EVASION AND (VICE-VERSA) [ 2017 (5) TMI 1808 - RAJASTHAN HIGH COURT] , Co-ordinate Bench of this Court observed that Merely because FM specifically has not been included in entry 7, is no reason to infer that it will fall in Schedule-V. Once the claim of the assessee is that it fall under entry 7 Schedule- IV, then the revenue has to bring material on record, which has not been brought on record. From the analysis of the aforesaid judgments, it is clear that the term peripheral has been given an expansive meaning and is not restricted to input/output devices, as contended by the Revenue. It is also clear that even if the goods in question can have different applications independent of computer, the same would not preclude them from being considered computer peripheral if they are also being used in computer system to expand the capabilities of computer system. The Entry No. 3 and 24 of Part-A of Schedule IV to the RVAT Act was subsequently amended to specifically include networking items in Entry 3 and networking cables of different types such as Flat Cables, CAT 3 cables, CAT 5 cables, CAT 6 cables in Entry 24. What is significant is that the amendment was brought into force the same day of the introduction of State Budget for the year 2013-2014, wherein while introducing the Budget, the Hon ble Chief Minister specifically acknowledged the difficulties faced by different businesses engaged in the sale of computer related items and resolved to set a clear rate of tax on such items - HSN can only be used for limited purpose of aid and assistance in matters pertaining to RVAT Act as the HSN has not been adopted under RVAT Act and it thus lacks statutory force. In the given case, for the reasons as stated above, it can safely be concluded that the goods in question would fall under Part-A of Schedule IV to the RVAT Act and therefore resort to HSN is not necessary. The question(s) of law framed have to be answered in favour of the petitioner-assessee and against the Revenue - Revision allowed.
-
2023 (6) TMI 56
Condonation of delay in filing of appeal - Service of order - order was sent to old address - Revenue s main contention is that the orders were served at the address given by assessee and it is assessee s duty to intimate the change in the address if any - HELD THAT:- It is relevant to note that the assessee s address mentioned in the memorandum of petition, the application for condonation of delay and written submissions filed before the KAT are the same as mentioned in the postal acknowledgement receipt. This clearly shows that assessee s main contention that he had changed his address is factually incorrect. Therefore, the contention urged by assessee that the orders were sent to his old address is untenable. The learned KAT has analyzed the facts in extenso and rightly recorded a finding that there was no proper explanation for the delay. Assessee has reiterated the same grounds seeking condonation of delay. There are no merit in this revision petition and impugned order passed by the KAT does not call for any interference - Revision Petition is dismissed.
-
Indian Laws
-
2023 (6) TMI 55
Dishonour of Cheque - matter settled in National Lok Adalat - Validity of Award passed in Lok Adalat - the case of the petitioner is that when the matter had already been settled between the parties before the National Lok Adalat in terms of a Memorandum of Understanding/Settlement Agreement entered into between the parties, the learned Trial Court could not have proceeded with the trial by allowing the applications filed by the respondents - HELD THAT:- As far as challenge to an award passed by Lok Adalat is concerned, the Hon ble Apex Court in Bhargavi Constructions v. Kothakapu Muthyam Reddy [ 2017 (9) TMI 1731 - SUPREME COURT ], while following the decision rendered by its Three-judge Bench in SSTATE OF PUNJAB ANR. VERSUS JALOUR SINGH ORS. [ 2008 (1) TMI 960 - SUPREME COURT ], held that an award of Lok Adalat can only be challenged by a party to it by filing a writ petition and that too, on very limited grounds. As far as contentions of learned counsels with respect to applicability of Section 21 of Legal Services Authority Act to an award passed in respect of Section 138 of Negotiable Instruments Act is concerned, the Hon ble Apex Court in K.N. GOVINDAN KUTTY MENON VERSUS C.D. SHAJI [ 2011 (11) TMI 783 - SUPREME COURT ] has categorically held that an award of Lok Adalat in respect of Section 138 of Negotiable Instruments Act is to be treated as a decree under Section 21 of Legal Services Authority Act. In the present case, it is noteworthy that vide order dated 29.08.2017 in CC No. 541812/2016, the learned Trial Court had referred the matter to National Lok Adalat which was to be held on 09.09.2017 for settlement proceedings - Prior to appearing before the National Lok Adalat on 09.09.2017, presumably to save their time, the parties had entered into a Memorandum of Understanding/Settlement Agreement a day prior i.e. on 08.09.2017. Thereafter, the matter was listed before the National Lok Adalat on 09.09.2017 and the settlement agreement dated 08.09.2017 was placed before the learned Presiding Judge, National Lok Adalat (Central), Delhi. It is not disputed that the learned Judge who was preceding over the National Lok Adalat had recorded the statements of both the parties on oath on 09.09.2017 and accordingly, in view of their own unequivocal statements on oath before the National Lok Adalat that they had entered into Memorandum of Understanding out of their own free will, the Memorandum of Settlement was exhibited. The parties had not only entered into an agreement, but had also acted upon it since some payment, as per settlement arrived at before the National Lok Adalat, was also made. This will lead to only one conclusion that the learned Judge, National Lok Adalat had no reason to record incorrect statements of the parties who appeared before him, made their statements on oath, signed their statements and thereafter also acted upon it. Had the settlement been involuntary or on the basis of fraud, there was no occasion of acting upon such settlement by making payments according to the Memorandum of Understanding signed by both the parties. Had that been so, the concerned parties would have made submission before the learned Trial Court either before the date of hearing fixed before the learned Trial Court that their signature have been obtained by fraud, or on the date fixed before the learned Trial Court. This Court is of the opinion that as per Section 21 of Legal Services Authority Act, the award of Lok Adalat which is deemed to be a decree of civil court and is binding on the parties and no appeal against the same is maintainable, as well as the judicial precedents which lay down that a settlement in case of Section 138 Negotiable Instruments Act and the award of Lok Adalat in connection with the same has to be treated as a decree capable of execution by Civil Court, the parties were bound by such decree. The contention of learned counsel for the respondents that the award of Lok Adalat is deemed to be a civil decree and cannot be enforced in respect of Negotiable Instruments Act is no more res integra and has been settled in the judgment of K.N. Govindan Kutty Menon by the Hon ble Apex Court. This Court is of the opinion that the learned Trial Court erred in allowing the applications filed by the respondents, after the matters had been settled between the parties before National Lok Adalat and the same had also been acted upon by the parties. The impugned orders are set aside - Petition allowed.
-
2023 (6) TMI 54
Auction bid - bid applications rejected on the ground of insufficient documents - quotation of highest price of Rs. 589/- as additional charge and the petitioner had quoted Rs. 221/- - no dues certificate from GST authority not submitted - HELD THAT:- On perusal of the endorsement of the committee, it is made clear that opposite party no. 4 had quoted additional charge at the rate of Rs. 589/-, but, so far as its income tax return for the assessment year 2021- 22 is concerned, a clarification was to be given by the competent authority in consultation with the concerned department/authority, and, as regards no dues certificate obtained from the CGST department, confirmation was to be made by the concerned authority. Similarly, it was observed that the petitioner had quoted additional charge of Rs. 221/-, but, however, the no dues certificate obtained from GST portal was needed to be confirmed from the concerned department/authority, if necessary, and, thereafter, the tender would be finalized. If such requirement has to be complied with, pursuant to the observation made on 05.08.2022, without getting such clearance from the respective departments and getting confirmation from the respective authority, as was observed, the authority could not have proceeded with the matter and finalize the tender in favour of opposite party no. 4 on the very same day, i.e., 05.08.2022. Thereby, the entire decision making process of the tendering authority is arbitrary, unreasonable and contrary to the provisions of law. Under these circumstances, this Court, in exercise of the powers conferred under the judicial review, has got jurisdiction to interfere with the decision making process of the tendering authority. In TATA CELLULAR VERSUS UNION OF INDIA [ 1994 (7) TMI 307 - SUPREME COURT] , the apex Court, referring to the limitations relating to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts, noted that there are inherent limitations in the exercise of power of judicial review in contractual matter. As such, it was observed that the duty to act fairly will vary in extent, depending upon the nature of cases, to which the said principle is sought to be applied. It was further held that the State has the right to refuse the lowest or any other tender, provided it tries to get the best person or the best quotation, and the power to choose is not exercised for any collateral purpose or in infringement of Article 14. Since in the instant case opposite party no. 4 has not complied with the conditions, as stipulated in the auction notice, and the committee has decided to make a verification and confirmation from the concerned authorities, instead of doing so, the same could not have been settled in favour of opposite party no. 4. In SACHIN KUMAR AGRAWAL VERSUS STATE OF ODISHA ORS. [ 2023 (5) TMI 1233 - ORISSA HIGH COURT] , this Court already held that once the bid submitted by the petitioner was not incorporated by the bank guarantee or the previous year s income tax return, it was defective one and cannot be entertained as per the tender notice. It was also clarified in the tender notice that in absence of any documents, as enumerated in clauses-1 to 14, the application submitted by the bidder would not be taken into consideration. Therefore, fully knowing the conditions stipulated in the tender notice, the petitioner should not have filed the writ petition for consideration of the bid on the ground that he had quoted higher price than opposite party no.5. If the bid submitted by the petitioner was absolutely void ab initio, in view of non-compliance of the tender conditions stipulated in the tender notice, he is estopped from claiming the benefit, as has been claimed in the writ petition. It is made clear that the decision making process in selecting opposite party no. 4, being arbitrary, unreasonable and contrary to the provision of law, cannot be sustained in the eye of law. Consequentially, the order dated 05.08.2022 so passed by the Tahasildar, Banspal settling the source in favour of opposite party no. 4 and confirmation thereof made by the Sub-Collector, Keonjhar by order dated 20.10.2022 passed in O.M.C.C. Appeal No. 33 of 2022 are liable to be quashed and are hereby quashed. Petition allowed.
|
9911796707
