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TMI Tax Updates - e-Newsletter August 13, 2021 Case Laws in this Newsletter: GST Income Tax Service Tax CST, VAT & Sales Tax Indian Laws Articles THE LIMITED LIABILITY PARTNERSHIP (AMENDMENT) BILL, 2021 – PART I News 2 held by CGST Officials for input tax credit fraud of more than ₹ 10 crore NITI Aayog Releases Handbook to Guide EV Charging Infrastructure in India Notifications Customs 66/2021 - dated 11-8-2021 - Cus (NT) Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver GST - States F A 3-12-2021-1-V(53) - dated 10-8-2021 - Madhya Pradesh SGST Madhya Pradesh Goods and Services Tax (Amendment) Rules, 2021 F.1-11 (91)-Tax/GST/2021(PART) - dated 19-7-2021 - Tripura SGST Seeks to extend the due date for furnishing of FORM ITC-04 for QE March, 2021 to 30.06.2021. 415/2021/01(120)/XXVII(8)/2021/CT-23 - dated 19-7-2021 - Uttarakhand SGST Amendment in the notification No.330/2020/5(120)/xxvii(8)/202,/CT-13 dated 20th May,2020 412/2021/01(120)/XXVII(8)/2021/CT-20 - dated 19-7-2021 - Uttarakhand SGST Amendment in notification of the Government of Uttarakhand, Finance Section-8, ll6/20l8/5(12O)XXVII(8)/20l7/CT-4 dated 31st January, 2018 Circulars / Instructions / Orders GST - States 157/13/2021 - dated 6-8-2021 Clarification regarding extension of limitation under GST Law in terms of Hon’ble Supreme Court’s Order dated 27.04.2021. 110/2021-GST - dated 29-7-2021 Clarification regarding extension of limitation under GST Law in terms of Hon'ble Supreme Court's Order dated 27.04.2021. FEMA 09 - dated 12-8-2021 Exim Bank's Government of India supported Line of Credit (LoC) of USD 100 million to the Government of the Republic of Mauritius Customs Instruction No. 17/2021 - dated 11-8-2021 Strict implementation of the Import Policy i.r.t. Transmission apparatus incorporating reception apparatus (ITC HS Code - 8525 60 00), by the Customs Authorities Highlights / Catch Notes GST Exemption from GST - The Indian Institute of Infrastructure and Construction [IIIC] qualifies to be classified as an educational institution as defined under clause (y) of Paragraph 2 of Notification No. 12/2017 CT (Rate) and accordingly the courses conducted in the institution are eligible for exemption from GST - AAR Visit to Get Source Classification of goods - Roasted / salted / roasted and salted Cashew nuts are classifiable under Customs Tariff Heading 2008.19.10 and roasted / salted / roasted and salted Ground nuts and other nuts are classifiable under Customs Tariff Heading 2008.19.20 and is liable to GST at the rate of 12% - AAR Visit to Get Source Classification of goods - Jack fruit chips and Banana chips (salted and masala varieties) made out of raw as well as ripe banana and sold without BRAND NAME - The Jackfruit Chips and Banana Chips are classifiable under Customs Tariff Heading 2008.19.40 and liable to GST at the rate of 12% - AAR Visit to Get Source Cancellation of anticipatory bail granted - while granting anticipatory bail to the respondents, this Court specifically ordered that if the respondents / accused failed to comply with the conditions imposed by this Court, the anticipatory bail granted to the respondents shall stand automatically cancelled. Even till today, the respondents did not comply the conditions as imposed by this Court. Accordingly, the Anticipatory Bail petitions filed by the respondents stand dismissed. The petitioners are at liberty to proceed in accordance with law as against the respondents. - HC Visit to Get Source Income Tax Validity of reopening of assessment u/s 147 - Addition u/s 68 - The function of the assessing authority at this stage is to administer the statute and what is required is a reason to believe and not to establish fact of escapement of income and therefore, looking to the scope of Section 147 as also sections 148 to 152 of the Act, even if scrutiny assessment has been undertaken, if substantial new material is found in the form of information on the basis of which the assessing authority can form a belief that the income of the petitioner has escaped assessment, it is always open for the assessing authority to reopen the assessment. - HC Visit to Get Source Disallowance of donation made to All India Gems & Jewellery Trade Federation - The payment was voluntary and not under compulsion. Even otherwise, as rightly pointed out by Ld. D.R., there is no material to show that the donation was made under compulsion. On the contrary, the above said extract taken from the application form show that the donation was given to the Federation recognising the value in its bringing not only to trade but also to education and well being of the community. - AT Visit to Get Source Deduction u/s 80IB(10)(a) - As well established that the project of the assessee was completed before the cutoff date as per the provisions by the Act i.e. 31.03. 2012. The AO has chosen to ignore all these facts and made the addition on the basis of interpretation of statute by holding that the date of completion is 21.12.2013 i.e. the date of letter of Joint Secretary, GDA ignoring the fact that this letter is not a completion certificate issued by the GDA. This letter itself mentions the date of completion as 21.02.2011. This date of letter has been erroneously taken by AO as ' the completion date. - CIT(A) rightly granted the benefit of deduction - AT Visit to Get Source Addition u/s 68 - In the given case, AO has not carried out any useful investigation but merely followed the previous pattern of investigation and completed the assessment on preconceived notion that the parties are bogus without really verifying the real aspect - the assessee has clearly given the details of suppliers and parties with whom the assessee has made purchases and sales to Revenue authorities, not only the address but also the PAN details, sales tax details, bank details, etc., AO cannot verify one aspect of identifying the parties and neglecting the other important aspect of identification and comes to conclusion which itself is not proper. - Additions deleted - AT Visit to Get Source Assessment u/s 153A - benefit of exemption u/s 11 - Bogus purchases - even if the benefits of section 11 is denied than too there can be no income of the appellant trust on which tax can be collected from it in view of the provisions of section 10(23C)(vi) of the Act considering the approval granted to the appellant trust. - after giving effect to exemption under provisions of section 10(23C)(vi) there cannot be any income of the appellant trust which can be charged to tax as the total income of the Appellant society is exempted - AT Visit to Get Source Appointment of respondents 4 and 5 to the office of the Vice President of the Income Tax Appellate Tribunal - principal objection of the petitioner is that these interim orders of the Apex Court do not apply to an appointment made on 22.01.2020 - The petitioner has completely failed to establish that the appointments are contrary to the relevant parent Act or the rules framed thereunder. Accordingly, there is no merit in the petitioner’s challenge - HC Visit to Get Source Indian Laws Dishonor of Cheque - legally enforceable debt or not - The complainant upon whose shoulder the burden of proving the alleged existence of legally enforceable debt was reverted, could not able to discharge the same. This aspect both the Trial Court and the Sessions Judge's Court failed to notice. On the other hand they were carried away by the fact that the accused was the drawer of the cheques in question which came to be returned unpaid when presented for realization and proceeded to hold that accused is guilty of the alleged offence. - HC Visit to Get Source Service Tax Provision of services to SEZ unit - man power supply service - Section 51 of SEZ Act, 2005 is to have an overriding effect. The denial of the benefit of exemption by relying upon procedural requirement of a notification would be against the provisions laid down in the SEZ Act - the demand of service tax under Man power service cannot sustain. - AT Visit to Get Source VAT Recovery of Sales Tax Dues - Cancellation of Auction - Department accepted the said property as one of the securities at the time of granting registration - As an intending purchaser, the appellant was required to exercise due diligence and make thorough verification and cannot turn around and say that it is for the Department to verify all the facts. - No relief granted - HC Visit to Get Source Validity of recovery notice - charge and priority over the other claims against the property - Admittedly, there is no necessity for registration of a security bond as the appellant is irrevocably bound herself to the dues payable by the firm at the time when the registration was applied by the husband of the appellant. Therefore, it will be too late in the day for the appellant to state that the property cannot be proceeded against, that it is her individual property and that the provisions of the TNGST Act, 1959 do not specifically provide for recovery of arrears of sales tax from a person, who is not a dealer/defaulter. - HC Visit to Get Source Case Laws: GST 2021 (8) TMI 495 Exemption from GST - educational courses which are conducted in Indian Institute of Infrastructure and Construction (IIIC) - Applicability of N/N. 12/ 2017-Central Tax (Rate) dated 28-06-2017 - HELD THAT:- The exemption provided under the entries under item (a), (b) and (c) of Si No. 69 of the said notification is in respect of services provided by the National Skill Development Corporation or a Sector Skill Council approved by the National Skill Development Corporation or an assessment agency approved by the Sector Skill Council or the National skill Development Corporation. Admittedly, the applicant does not come under the category of any of the above specified entities. The applicant has not produced any evidence to show that the applicant is approved as a training partner by the National Skill Development Corporation or the Sectoral Skill Development Council in relation to (i) the National Skill Development Programme implemented by the National Skill Development Corporation; or (ii) a vocational skill development course under the national Skill Certification and Monetary Reward Scheme; or (iii) any other Scheme implemented by the National Skill Development Corporation and the courses conducted at IIIC come under any of the specified categories - Thus, the courses conducted at IIIC are not eligible for exemption as per entry at S1 No. 69 of the Notification No. 12/2017 CT (Rate) dated 28-06-2017. Courses conducted by IIIC are approved by the Government of Kerala - HELD THAT:- The term educational institution under sub-clause (ii) covers institutions providing services by way of education as a part of curriculum for obtaining a qualification recognised by any law for the time being in force. The conduct of degree courses by colleges, universities or institutions which lead to grant of qualifications recognized by law would be covered. The Government of Kerala by G.0.(MS) No. 20/2012/ LBR dated 03.02.2012 of the Labour and Rehabilitation Department accorded administrative sanction to register a company in the name of Kerala Academy for Skills Excellence [KASE] under Section 25 of the Companies Act, 1956 to act as apex entity to initiate, regulate and co-ordinate focused skill development for different industrial domains - Government of Kerala further decided to create a centralised agency to co-ordinate the skill development activities performed by different departments and by G.O.(P) No. 47/2018/Labour dated 28.05.2018 of the Labour and Skills Department created a State Skill Secretariat and ordered that the Kerala Academy of Skills Excellence which is functioning as the State Skill Development Mission shall function as the State Skill Secretariat. Business Advisory Committees [BAC] were also ordered to be set up in various sectors to actively advice the skill secretariat with respect to the skill development activities in the concerned sector. Taking in to consideration the fact that IIIC has initiated action to get affiliation under various Universities and that no formal recognition has been given to IIIC and the courses conducted there, the Government declares that IIIC, Chavara is a Government - owned institute and the courses that are being conducted in the said institute are approved by the Government. In view of the declaration that IIIC is a Government - owned institute and the approval of the courses conducted by IIIC by the Government of Kerala, IIIC has attained the status of an institution providing services by way of education as a part of a curriculum for obtaining a qualification recognized by law. Consequently, IIIC qualifies to be classified as an educational institution as defined under sub-clause (ii) of clause (y) of Paragraph 2 of the Notification No. 12/2017 CT (Rate) dated 28.06.2017. The courses conducted in Indian Institute of Infrastructure and Construction is exempted from GST as per entry at Si No. 66 of Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017. 2021 (8) TMI 494 Tax liability of applicant - discount received through credit notes issued by the M/s. Hindustan Unilever Ltd., (First Supplier) - 1st proviso to Section 34 of CGST Act, 2017 - applicability of advance ruling given by the Hon'ble Kerala Authority for Advance Ruling IN RE: M/S. SANTHOSH DISTRIBUTORS [ 2019 (11) TMI 223 - AUTHORITY FOR ADVANCE RULING, KERALA] , is applicable to this applicant with respect to the credit notes given after supply - commercial credit notes or not - validity of value taken by the applicant is the invoice value prior to the discount - validity of monthly submission of GST return for the year 2017-18 on the basis of discount concepts - mismatch between the tax payment in Form 3B under CGST Rules and the GSTR 2A of the applicant, with respect to discount - steps to be taken by the applicant to safeguard applicant's interest in compliance with the provisions of GST law. Is there any further tax liability to the applicant on the discount received through credit notes issued by the M/s. Hindustan Unilever Ltd., (First Supplier)? - In the light of the 1st proviso to Section 34 of CGST Act, 2017, is there any tax liability on the applicant for the discount received on the basis of credit notes issued by the First Supplier? - HELD THAT:- Sub-section (3) of Section 15 of the CGST Act clearly specifies the circumstances under which and the conditions subject to which any discount can be deducted / excluded for determining the taxable value of a supply. From the facts as stated by the applicant it is seen that the discount received through credit note is a post - supply discount. However, the applicant has not stated whether such discount is established in terms of an agreement entered into at or before the time of such supply. The applicant has neither produced the copy of the agreement entered into by them with the supplier nor disclosed any details of the agreement. Though the applicant has produced a copy of the credit note issued by the supplier, the credit note does not contain any particulars whereby the nature and purpose of the discount and the circumstances under which the credit note was issued could be discerned - in the absence of necessary information regarding the passing over of discount by the supplier through the credit notes, this authority cannot issue any ruling on the above questions. Other issues are not in respect of any matter that is specified in Section 97 (2) of the CGST Act. This authority being a creature of statute has to function within the limits of the jurisdiction conferred on it. Accordingly, the jurisdiction of this authority does not extend to issue rulings on the rest questions. 2021 (8) TMI 493 Classification of goods - HSN Code - chips made from Jackfruit, Banana (both raw as well as ripe banana), Banana chips (masala), Potato, Tapioca, Chembu and Pavakka and sold without BRAND NAME - classifiable as NAMKEENS and are covered by HSN Code 2106.90.99 and taxable under Entry 101A of 1st Schedule of Central Tax (Rate) Notification 1/2017? - roasted and salted / salted / roasted preparations such as of Ground nuts, Cashew nut and other seeds - when sold without a brand name can they be classified under HSN 2106.90.99 and taxed under Entry 101A of Schedule 1 of Central Tax (Rate) Notification 1/2017? HELD THAT:- Any vegetable, fruit, nut or edible parts of plant which is prepared or preserved by any other process than these are liable to be classified under Chapter 20. Chapter Heading 2008 of the Customs Tariff covers all roasted and fried vegetable products. Frying and roasting are two popular cooking methods that both use high temperature. It is not *necessary that both the conditions are to be cumulatively satisfied for classifying a product under the category of roasted and fried products. When according to chapter notes and description of tariff items the products are classifiable under specific headings of Chapter 20 they cannot be classified under Heading 2106 as food preparations not elsewhere specified or included. Applying the principles of interpretation in Rule 2 of the General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975 the Jackfruit Chips, Banana Chips, Tapoica Chips, Potato Chips, Chembu Chips and Pavakka Chips (Bittergourd) (Whether salted/ masala or otherwise) are classifiable under Tariff Heading 2008 19 40 of the Customs Tariff Act, 1975. Regarding classification of roasted /salted / roasted and salted Cashew nuts, Ground nuts and other nuts there are specific headings under Chapter 20 that covers the products. Accordingly, roasted /salted / roasted and salted Cashew nuts are classifiable under Tariff Heading 2008 19 10, and other roasted /salted / roasted and salted nuts and seeds are classifiable under 2008 19 20 of the Customs Tariff Act, 1975. All the products that fall under Chapter Heading 2008 of the Customs Tariff Act, 1975 attract GST at the rate of 12%. 2021 (8) TMI 492 Classification of goods - banana chips (made out of both raw as well as ripe banana) sold without BRAND NAME - classifiable as NAMKEENS and are covered by HSN code 2106.90.99 and taxable under Entry 101A of Schedule I of Central Tax (Rate) Notification No.1 of 2017? - Sharkarai Varatty sold without BRAND NAME - classifiable as SWEET MEAT and are covered by HSN Code 2106.90.99 and taxable under Entry 101A of schedule I of Central Tax (Rate) Notification No.1 of 2017? - roasted and salted / salted / roasted preparations such as of ground nuts, cashew nut and other seeds sold without a brand name - classified under HSN 2106.90.99 and taxed under Entry 101A of Schedule 1 of Central Tax (Rate) Notification No.1 of 2017? - salted and masala chips of potato and tapioca classifiable as namkeens and when sold without a brand name - classified under HSN 2106.90.99 and taxed under Entry 101A of Schedule I of Central Tax (Rate) Notification 1 of 2017? HELD THAT:- Any vegetable, fruit, nut or edible parts of plant which is prepared or preserved by any other process than these are liable to be classified under Chapter 20. Chapter Heading 2008 of the Customs Tariff covers all roasted and fried vegetable products. Frying and roasting are two popular cooking methods that both use high temperature. It is not necessary that both the conditions are to be cumulatively satisfied for classifying a product under the category of roasted and fried products. When according to chapter notes and description of tariff items the products are classifiable under specific headings of Chapter 20, they cannot be classified under Heading 2106 as food preparations not elsewhere specified or included. Applying the principles of interpretation in Rule 2 of the General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975 the Banana Chips, Sharkara Varatty, Tapioca Chips and Potato Chips (Whether salted/masala or otherwise) are classifiable under Tariff Heading 2008 19 40 of the Customs Tariff Act, 1975. Regarding classification of roasted /salted / roasted and salted Cashew nuts, Ground nuts and other nuts there are specific headings under Chapter 20 that covers the product - Accordingly, roasted /salted / roasted and salted Cashew nuts are classifiable under Tariff Heading 2008 19 10 and roasted / salted / roasted and salted Ground nuts and other nuts are classifiable under Customs Tariff Heading 2008.19.20 and is liable to GST at the rate of 12% as per Entry at SI No. 40 of Schedule II of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. All the products that fall under Chapter Heading 2008 of the Customs Tariff Act, 1975 attract GST@ 12%. 2021 (8) TMI 491 Classification of goods - Jack fruit chips and Banana chips (salted and masala varieties) made out of raw as well as ripe banana and sold without BRAND NAME - covered by HSN code 2106.90.99 and taxable under Entry 101A of schedule of Central Tax (Rate) Notification No.1 of 2017 or otherwise? - Sharkara Varatty sold without BRAND NAME - classifiable as SWEET MEATS and covered by HSN code 2106.90.99 and taxable under Entry 101A of Schedule of Central Tax (Rate) Notification 1/2017 - roasted and salted / salted / roasted preparations such as of Ground nuts, Cashew nut and other seeds are NAMKEENS when sold without a brand name - classified under HSN 2106.90.99 and taxed under Entry 101A of Schedule 1 of Central Tax (Rate) Notification No.1/2017 or otherwise? - salted and masala chips of Potato and Tapioca are classifiable as Namkeens when sold without a brand name - classified under HSN 2106.90.99 and taxed under Entry 101A of Schedule 1 of Central Tax (Rate) Notification No.1 of 2017? HELD THAT:- Any vegetable, fruit, nut or edible parts of plant which is prepared or preserved by any other process than these, are liable to be classified under Chapter 20. Chapter Heading 2008 of the Customs Tariff covers all roasted and fried vegetable products - Frying and roasting are two popular cooking methods that both use high temperature. It is not necessary that both the conditions are to be cumulatively satisfied for classifying a product under the category of roasted and fried products. Since according to chapter notes and description of tariff items, the products are classifiable under specific headings of Chapter 20 and hence they cannot be classified under Heading 2106 as food preparations not elsewhere specified or included. Applying the principles of interpretation in Rule 2 of the General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975 the Jackfruit Chips, Banana Chips, Sharkara Varatty, Tapoica Chips and Potato Chips (Whether salted/ masala or otherwise) are classifiable under Tariff Heading 2008 19 40 of the Customs Tariff Act, 1975. Regarding classification of roasted /salted / roasted and salted Cashew nuts, Ground nuts and other nuts there are specific headings under Chapter 20 that covers the products. Accordingly, roasted /salted / roasted and salted Cashew nuts are classifiable under Tariff Heading 2008 19 10 and other roasted /salted / roasted and salted nuts and seeds are classifiable under 2008 19 20 of the Customs Tariff Act, 1975. Thus, all the products that fall under Chapter Heading 2008 of the Customs Tariff Act, 1975 attract GST at the rate of 12%. 2021 (8) TMI 474 Seeking direction to the respondents to defreeze the bank account - attachment of bank account without issuing notice - Section 83 of the CGST Act, 2017 - HELD THAT:- A plain reading of Rule 159(5) of Central Good Services Tax Rules, 2007 clearly shows that after provisional attachment of the property, the applicant ought to have approached the Commissioner. However, in the present case, the petitioners without availing the efficacious alternative remedy, have approached this Court. There are no cause of action has arisen in favour of the petitioners to invoke the inherent jurisdiction of this Court by way of filing the instant petition. Petition dismissed. 2021 (8) TMI 473 Principles of natural justice - ex-parte order - compliance with the pre-deposit - HELD THAT:- The order is found to be absolutely cryptic in nature, without assigning any reason, more so with regard to the imposition of penalty. As such, purely on a limited ground, the impugned order passed by respondent no.3, namely the Joint Commissioner of State Taxes, Patna South Patna West Circle, Patna as contained in Annexure-4, is set aside with further directions imposed. Petition disposed off. 2021 (8) TMI 471 Cancellation of anticipatory bail granted - non-compliance with the condition within the time stipulated by this Court - HELD THAT:- While imposing the condition by this Court specifically stated that if any of the condition failed to be complied with by the respondents / accused, the petition for anticipatory bail shall stand dismissed. Though the learned counsel for the respondents/ accused submitted that writ petition was filed challenging the initiation of proceedings under GST Act and the same was allowed, aggrieved by the same, the petitioners have filed writ appeal and it is pending before the Hon'ble Division Bench of this Court. However, while granting anticipatory bail to the respondents, this Court specifically ordered that if the respondents / accused failed to comply with the conditions imposed by this Court, the anticipatory bail granted to the respondents shall stand automatically cancelled. These criminal original petitions are disposed of. Income Tax 2021 (8) TMI 488 Validity of Assessment Order u/s 143(3) r.w.s.144B - HELD THAT:- As final assessment order has been passed in violation of principles of natural justice inasmuch as the petitioner did not have a reasonable opportunity to file a reply to the Show Cause Notice and draft assessment order dated 09th June, 2021, as the portal of the Respondent was not working between 1st June, 2021 and 17th June, 2021 i.e. the last date of filing the reply to the Show Cause Notice-cum-draft assessment order. The impugned assessment order dated 18th June, 2021 is set aside and the matter is remanded back to the Respondent for passing a fresh assessment order in accordance with law and after considering the Petitioner s reply. Petitioner is directed to file its reply to the Show Cause Notice and draft assessment order dated 09th June, 2021 on the portal of the Respondent within ten days. Respondent in turn is directed to facilitate the filing of the said reply on the portal on behalf of legal heir of the deceased-assessee. 2021 (8) TMI 487 Rectification application u/s 154 - seeking direction to the respondents to allow the TDS credit on the basis of the TDS certificates issued by the tenants in the name of the Petitioners for the Assessment Year 2009-10 - HELD THAT:- Keeping in view the fact that the rectification applications filed by the petitioners have not been decided till date and the TDS certificates issued by the tenants in the name of the petitioners have allegedly not been credited to the accounts of the petitioners on account of wrong PAN numbers mentioned by the tenants, this Court in compliance with the directions given by the learned predecessor Bench in Court On its Own Motion vs. Commissioner of Income Tax [ 2013 (3) TMI 316 - DELHI HIGH COURT ] directs the AO to take remedial measures as mentioned in the said judgment as well as to decide the rectification applications filed by the petitioners in accordance with law within twelve weeks. 2021 (8) TMI 486 Validity of reopening of assessment u/s 147 - Addition u/s 68 - HELD THAT:- AO has found that the petitioner company has not fully and truly disclosed all material facts necessary for assessment for the reason that the petitioner has concealed the facts to channelize the unaccounted funds into assessee company. Therefore, there is clear failure on the part of the assessee to fully and truly disclose all the facts necessary for assessment proceeding under section 143(3) of the Act. Thus, we are of the considered view that it cannot be said that there is no reason to believe that the income chargeable to tax has escaped assessment because such exercise of reopening has been made only after due inquiries and recording of statements of concerned persons, as referred to herein above, and on having found prima facie material, impugned notice is issued to the petitioner. The function of the assessing authority at this stage is to administer the statute and what is required is a reason to believe and not to establish fact of escapement of income and therefore, looking to the scope of Section 147 as also sections 148 to 152 of the Act, even if scrutiny assessment has been undertaken, if substantial new material is found in the form of information on the basis of which the assessing authority can form a belief that the income of the petitioner has escaped assessment, it is always open for the assessing authority to reopen the assessment. AO has reason to believe that the income chargeable to tax has escaped assessment and the basis for formation of such belief is several inquiries and the investigation by the Investigation Wing. The reasons for the formation of the belief by the Assessing Officer in the instant case, appear to have a rational connection with or relevant bearing on the formation of belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. Accordingly, no interference is called for at the hands of this Court in this petition under Article 226 of the Constitution of India - Decided against assessee. 2021 (8) TMI 484 Revision u/s 263 - CIT against a decision of the AO dropping the reopening proceedings after issuing notice u/s 148 and after receiving the reply/objections of the assessee - whether or not there was change in beneficial interest in terms of Section 10A(9) - whether the twin ingredients which are required to be satisfied cumulatively for the exercise of power under Section 263 of the Act stood satisfied? - HELD THAT:- CIT had no jurisdiction to invoke his power u/s 263 to examine the correctness of the decision taken by the Assessing Officer dropping the reopening proceedings after issuance of notice under section 148 of the Act and after considering the objections filed by the assessee. In fact to the said extent, the Tribunal was right in its opinion - we do not agree with the finding of the Tribunal wherein the Tribunal has made an observation that issuance of notice under section 148 of the Act was an administrative decision and dropping of the proceedings after verifying the details was also an administrative decision. This observation is incorrect because the decision to be taken before issuance of notice for reopening should be based upon the cogent reasons and the AO who issues notice should record his satisfaction and this cannot be termed as purely an administrative decision but there is a quasi-judicial application of mind required before issuance of notice under Section 148 - Likewise after receiving the objections from the assessee if the AO seeks to sustain his prima facie view and reject the objections submitted by the assessee, then also he is required to apply his mind and pass an order, the correctness of which can be questioned in a proceedings under Article 226 of the Constitution of India. Therefore, to that extent, we do not agree with the finds of the Tribunal. Assessee had submitted an explanatory note clearly explaining the organization structure and established before the Assessing Officer that during 2000-01, Barry-Wehmiller Company Inc. acquired 100% shares in Marquip International Inc. and this does not change the shareholding pattern of the assessee Company and the parent Company continued to be the Mauritius Company with 100% equity. These facts were taken note of and the Assessing Officer had dropped the reopening proceedings. Thus, it is on an opinion formed by the Assessing Officer and after being satisfied that there is no case made out for reopening and after recording that the ownership or beneficial interest of the Company has not changed and continued to be with Mauritius Company and therefore, Section 10A(9) of the Act is not attracted and accordingly, proceedings under Section 147 of the Act was dropped. Unless and until the twin tests which are required to be satisfied that the assessment should be not only erroneous but prejudicial to interest, the power under section 263 of the Act should not have been invoked apart from the fact that this was not a case where such a power was exercised to revise the original assessment. Therefore, the Tribunal was right in coming to the conclusion that the shares were transferred only to comply with the legal requirements and the beneficial ownership was never transferred. Hence, we find that the order passed by the Tribunal does not call for any interference. - Decided in favour of assessee. 2021 (8) TMI 481 Amount written off as incurred in the course of assessee's business - Validity of Security deposit written off as irrecoverable as a revenue expenditure - HELD THAT:- Assessee by treating the expenditure as business expenditure, the Tribunal took note of the fact that the AO and the CIT (Appeals) have not disputed the details regarding the income and expenditure furnished by the assessee and the AO only concluded that, since the security deposit is in the nature of a capital expenditure, the same cannot be allowed as a business loss. Though the Commissioner of Income Tax (Appeals) had rendered a finding that the transaction itself was a sham transaction, the Tribunal rightly noted that the Assessing Officer has not disputed or doubted the genuineness of the transaction. Tribunal noted that the income and expenditure from business was accepted by the Revenue authorities for the earlier years treating the business activity of dehydrated vegetables as a separate and discontinuation of the business of the assessee, is not a correct view taken by the authorities when the assessee has considered both the business activities as its business and offered the income and expenditure for the earlier years, which was accepted. No substantial question of law. 2021 (8) TMI 480 Deduction u/s 80 HHC - separate books of account are maintained with respect to export and other units - Whether Tribunal was right in holding that the assessee is entitled for deduction u/s 80 HHC by reckoning with the profit of the export unit alone and ignoring the losses of the other units without considering the decision of the Apex Court in the case of Ipca Laboratories [ 2004 (3) TMI 9 - SUPREME COURT] - HELD THAT:- As the facts of the case in Ipca Laboratories Ltd. were entirely different and couched in a different manner and there was no separate account maintained as in the case on hand. This factual position has been clearly brought out by the Commissioner of Income Tax (Appeals) in the order dated 10.09.2008 and the fact that the assessee was maintaining separate Books of Accounts for the export unit and the trading division, has not been disputed by the Assessing Officer. In such circumstances, the decision in the case of Chamundi Textiles (Silk Mills) Ltd. [ 2012 (6) TMI 317 - MADRAS HIGH COURT] would clearly apply to the facts and circumstances of the case on hand. - Decided against revenue. Addition u/s 40A(3) - cash payments made towards the purchase of shrimp feed - HELD THAT:- Commissioner of Income Tax (Appeals) considered the legal issue and found that, what was purchased was undoubtedly a fish or fish product, which will fall within the scope of Rule 6DD(f)(iii) and if it is so, no disallowance under Clause (a) of Sub-Section (3) of Section 40A shall be made and no payment shall be deemed to be the profits and gains of business or profession under Clause (b) of Sub-Section (3) of Section 40A. This aspect has been factually brought out by the Commissioner of Income Tax (Appeals) as well as the Tribunal. - Decided against revenue. 2021 (8) TMI 477 Appointment of respondents 4 and 5 to the office of the Vice President of the Income Tax Appellate Tribunal - principal objection of the petitioner is that these interim orders of the Apex Court do not apply to an appointment made on 22.01.2020 - HELD THAT:- Upon perusal of the minutes of the Search-cum-Selection Committee meeting on 08.04.2019, it is clear that the Search-cum-Selection Committee took into account the interim order of the Supreme Court in KUDRAT SANDHU VERSUS UNION OF INDIA AND ANR. [ 2018 (3) TMI 643 - SUPREME COURT] which was part of the ROJER MATHEW VERSUS SOUTH INDIAN BANK LTD. OTHERS [ 2019 (11) TMI 716 - SUPREME COURT] batch, and proceeded to record that the said interim order mandated that all appointments made pursuant to the selection by the interim Search-cum-Selection Committee shall abide by the conditions of service as per the old Act and the Rules. Thus, it is evident that the interim Search-cum-Selection Committee acted strictly in accordance with the interim orders passed in Rojer Mathew as subsequently recorded in MADRAS BAR ASSOCIATION VERSUS UNION OF INDIA ANR. [ 2020 (12) TMI 3 - SUPREME COURT] . The petitioner has completely failed to establish that the appointments are contrary to the relevant parent Act or the rules framed thereunder. Accordingly, there is no merit in the petitioner s challenge - Petition dismissed. 2021 (8) TMI 470 Denial of exemption u/s 54F - property in question was in the name of assessee s father and the assessee was staying along with his family on the first floor of the building for the last more than 10 years - HELD THAT:- Here is a case in which the assessee correctly showed a sum of ₹ 60 lakhs as full value consideration for the transfer of capital asset and deposited the said amount in Capital gain account scheme for exemption of claim u/s 54F. Considering the totality of the facts and circumstances of the case, it is evident that the amount of ₹ 60 lakhs was received by the assessee as consideration for transfer of his right to occupy the property. As such, we are unable to give any other colour to the transaction, which has been accepted by the Department as such in the hands of the assessee s father. Even if for a moment, it is accepted that the sum of ₹ 60 lakhs was received by the assessee from his father not towards consideration for transfer of right to occupy the property, at the most, it would amount to a gift in his hands, which is again not chargeable to tax. The authorities below have characterized ₹ 60 lakhs as income chargeable to tax under the head Income from other sources . However, no specific clause of section 56 of the Act has been brought to our notice encompassing the prevailing situation within its purview. We, therefore, overturn the impugned order and hold that the assessee rightly computed long term capital gain of ₹ 60 lakhs and then claimed exemption u/s 54F of the equal amount. - Decided in favour of assessee. 2021 (8) TMI 469 Disallowance of depreciation claimed on tenancy rights - HELD THAT:- Depreciation has been claimed on the written down value as on 01.04.2009 which means that depreciation was claimed in earlier years also. We find that this is not the initial year of claim of depreciation. In our considered opinion, unless claim is disturbed in the initial A.Y of the claim, the same cannot be disturbed in the subsequent A.Y if the facts are same. As relying on HINDUSTAN COCA COLA BEVERAGES PVT. LTD. [ 2011 (1) TMI 30 - DELHI HIGH COURT] we direct the Assessing Officer to delete the addition - Decided in favour of assessee. 2021 (8) TMI 468 Penalty u/s 271(1)(c) - defective notice - non specification of charge - HELD THAT:- As in the notice issued u/s 274 r.w.s 271(1)(c) there was no specific charges as relates to concealment of income or furnishing of inaccurate particulars of income. From the notice dated 20/06/2014 (A.Y. 2006-07) produced by the Ld. AR during the hearing, it can be seen that the Assessing Officer was not sure under which limb of provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. Besides that the Assessment Order also did not specify the charge as to whether there is concealment of income or furnishing of inaccurate particulars of income in assessee s case - we are taking up the contention of the assessee that there is no particular limb mentioned in the notice issued under Section 271(1)(c) r.w.s. 274 of the Act. This issue is squarely covered by the decision of the Hon ble Supreme Court in case of M/s SSA Emerald Meadow.[ 2016 (8) TMI 1145 - SC ORDER] - thus inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s 271(1)(c) is not sustainable and has to be deleted. - Decided in favour of assessee. 2021 (8) TMI 467 Penalty u/s 271C - non-deduction of tax at source on the interest accrued on bank deposits of the customers - penalty has been levied in view of liability raised under section 201(1) and 201(1A) of the Act by the Assessing Officer for holding assessee in default for non-deduction of tax at source on interest paid/accrued on bank deposits of customers - HELD THAT:- We are of the opinion that when the foundation of levy of penalty under section 271C has been demolished, the penalty levied under section 271C cannot survive. Accordingly, we cancel the penalty levied by Joint/Additional Commissioner of Income-tax, in both the assessment years, i.e., AY 2014-15 and 2015-16. The grounds of the appeal of the assessee raised in both appeals are accordingly allowed. 2021 (8) TMI 466 Nature of expenses - repair expenses - revenue or capital expenditure - assessee is engaged in the business of manufacture and sale of gold, silver and platinum jewellery and other precious metal and stones - HELD THAT:- We notice that the assessee has incurred expenses for repairing the flooring, renovating the distributors and customers display area and waste mitigation and production process systems. Admittedly, these expenses have been incurred on the building taken on lease. Though these expenses can be considered as renovation expenses, yet we notice that it has not resulted in creation of any capital asset attracting Explanation 1 to section 32. See M/S. ANUSH SHARES AND SECURITIES PVT LTD. [ 2015 (7) TMI 1224 - MADRAS HIGH COURT] - thus we set aside the order passed by Ld CIT(A) and direct the A.O. to delete the disallowance. Disallowance of donation made to All India Gems Jewellery Trade Federation - AO disallowed 50% of the donation paid by the assessee, impliedly allowing the deduction u/s 80G of the Act @ 50%, also confirmed by CIT-A - HELD THAT:- The assessee has furnished copies of receipts given by the Association acknowledging receipt of ₹ 15.25 lakhs - All the receipts clearly show that the payment have been received by All India Gems Jewellery Trade Federation towards donation. The assessee has furnished a copy of application form for participating in the PMI programme - The payment was voluntary and not under compulsion. Even otherwise, as rightly pointed out by Ld. D.R., there is no material to show that the donation was made under compulsion. On the contrary, the above said extract taken from the application form show that the donation was given to the Federation recognising the value in its bringing not only to trade but also to education and well being of the community. Hence, it is clearly proved that the donation is a general donation made by the assessee to the association/federation. We confirm the order passed by Ld. CIT(A) on this issue. Appeal filed by the assessee is partly allowed. 2021 (8) TMI 465 Assessment u/s 153A - MAT computation u/s 115JB - CIT(A) confirming the action of the DCIT not allowing the exclusion of the Sales Tax Subsidy from the Book Profits for the purpose of MAT Computation - HELD THAT:- This issue of claim of the assessee that the sales tax subsidy being a capital receipt should be reduced from book profit computation u/s 115JB was subject matter of assessee s appeal with ITAT in the course of regular assessment for AY 2006-07. The assessee had raised this issue by way of CO and ITAT has duly decided this issue in favour of assessee - the present case before us is assessment u/s 153A of the Act pursuant to search and assesee is himself claiming that this is a case of non abated assessment. It is noted that assessee has not made any such claim in the return filed pursuant to notice u/s 153A - It has also not filed any revised return in this regard. The claim was rejected by Ld.CIT(A) on the touchstone of Hon ble Rajasthan High Court decision in the case of Jai Steel India [ 2013 (6) TMI 161 - RAJASTHAN HIGH COURT ] that in case of non abated assessment fresh claim cannot be allowed. We do not find any infirmity in the order of Ld.CIT(A). Hence, we uphold the same. 2021 (8) TMI 464 Deduction u/s 80IA(4)(iii) - claim denied as there ought to be 4 tenants in the industrial park of assessee, whereas in this case there is only three tenants - HELD THAT:- The assessee had constructed multistoried buildings for the purpose of developing infrastructure facilities as approved by the Ministry of Commerce and Industry. As mentioned earlier, the test to be applied is the functional test, i.e., the unit must be physically independent with independent facilities and instrumentation, power connection, door number and the facility of functioning independently, i.e., every unit must be in a position to carry on its activities without depending upon other units even though all the units are situated under the same roof but in different floors. The assessee has to successfully satisfy the above stated functional test of an independent unit, which has not undertaken by the A.O. nor the CIT(A) in this case. Even for A.Y. 2004-2005, though the A.O. in his remand report, had stated that the case of the assessee and of Primal Projects Private Limited are identical had not entered a factual finding of the claim of the assessee that each of the five floors in the industrial park is separate and independent units, capable of function on its own. Therefore, the assessee has to factually establish that it has 4 units or more and that no unit has occupied more than 50% allocable area. No unit should occupy more than 50% of the allocable area, whereas in this case one tenant, namely M/s.I-Flex Solutions is occupying more than 50% of the total constructed area - The criteria relating to restriction of leasing of allocable area to any particular tenant is redundant in view of the functionality test prescribed in the case of CIT v. M/s.Primal Projects Pvt. Ltd. [ 2020 (11) TMI 778 - KARNATAKA HIGH COURT ]- we are of the view that the matter needs to be examined afresh by the A.O. Accordingly, the cases are restored to the files of the A.O. The A.O. is directed to come to a factual finding that assessee s claim of five floors of the industrial park are independent and separate units as prescribed in the judgment of Hon ble High Court in the case of CIT v. M/s.Primal Projects Private Limited. The assessee is directed to co-operate with the revenue for expeditious disposal of the matter - Appeals filed by the Revenue are allowed for statistical purposes. 2021 (8) TMI 463 Deemed dividend addition u/s 2(22)(e) - amount received from Brahmand System Private Limited -HELD THAT:- The undisputed fact is that vide agreement to sell dated 16.5.2003, entered into between the assessee and the company Brahmand System Private Limited, the assessee agreed to sell the property situated at Haryana to the said company and the sale consideration was fixed at a sum of ₹ 98 lakhs out of which Brahmand System Private Limited advance ₹ 78 lakhs as earnest money and part payment. There is no dispute in so far as this agreement is concerned. The observation of the Assessing Officer that the purpose of the advance or loan is immaterial is contrary to the CBDT Circular No. 19/2017 dated 12.06.2017 - thus we are of the considered view that the business transaction of ₹ 78 lakhs cannot be treated as deemed dividend u/s 2(22)(e) of the Act. We, accordingly, direct the Assessing Officer to delete the addition Addition on account of 5% of car expenses - HELD THAT:- This issue was not seriously contested by the ld. AR and, therefore, the same is dismissed. 2021 (8) TMI 462 Disallowance of deduction u/s 80IB(10)(a) - Revenue contended that, assessee had not fulfilled the condition required u/s 80IB(10) as per which the assessee had to obtain the Project Completion Certificate from the prescribed authority within a period of 5 years from the end of the financial year in which the project was first approved i.e. on or before 31.03.2012, and the same was applied for on 29.08.2012 and obtained on 21.12.2013 - HELD THAT:- Registration of the units in the name of the ultimate customers is being registered by the GDA who is also the competent authority to issue the Completion Certificate in the case of the assessee. GDA has clearly mentioned that the project was completed on 21.02.2011 vide the aforementioned letter therefore it establishes the fact that the project was in fact completed much before the cutoff date of 31.03.2012. It is also a fact that this letter dated 21.02.2013 is not a formal completion certificate issued by the GDA. This letter mentions the date of completion as 21.02.2011. The date of this letter has been erroneously taken by AO as the completion date. Further in respect of the observations of the AO that assessee has not applied for completion certificate in time it is seen from the documents available on record that the assessee has applied for the project completion certificate with the authority vide its letter dated 30.11.2011 after duly completing the work on 21.02.2011. The apartments would be registered only when the project completion certificate is obtained by the assessee. Since, the prescribed authority has accepted the project completion on 21.02.2011 therefore first registry of the project was done by the authority in favor of ultimate buyer' s on 21.02.2011. During the Financial Year 2010 - 11, 5 of the units got registered in favor of the customers of the NEO project by the assessee company and another 291 units in Financial Year 2011-12 out of total units of 346 i.e. the majority of the units i.e. around 86% of the total units got registered in the names of ultimate customers before the end of financial year 2011-12 which is also the cutoff date for getting the project completion certificate. As well established that the project of the assessee was completed before the cutoff date as per the provisions by the Act i.e. 31.03. 2012. The AO has chosen to ignore all these facts and made the addition on the basis of interpretation of statute by holding that the date of completion is 21.12.2013 i.e. the date of letter of Joint Secretary, GDA ignoring the fact that this letter is not a completion certificate issued by the GDA. This letter itself mentions the date of completion as 21.02.2011. This date of letter has been erroneously taken by AO as ' the completion date. AO held that since this letter is dated 21.12.2013, the completion of the project is beyond the prescribed period u/ s 80-IB and not from the date mentioned in the letter i.e. 21.02.2011. As the action of the revenue is incorrect on the facts of completion certificate, we decline to interfere with the order of the ld. CIT(A). - Decided against revenue. 2021 (8) TMI 461 Benefit of exemption u/s. 54F - assessee has not invested the net consideration in the capital gain account scheme within the time stipulated for filing return of income u/s. 139(1) - HELD THAT:- We agree with the contention of the ld. AR that even though the assessee has not deposited the consideration received on sale of long term capital asset in the capital gain account scheme within the due date prescribed u/s. 139(1) of the Act, the assessee is entitled for exemption u/s. 54F of the Act if the assessee has invested the net consideration in accordance with the provisions of section 54F of the Act in acquiring or construction of new residential house. Therefore, the contention of the ld. DR that the assessee has not deposited the amount in the capital gain account scheme as stipulated and not entitled to the benefit of exemption, even though she has invested the money in construction of new residential house is not correct. Assessee invested in the construction of new house, not in her name but in the construction of new residential house in the name of spouse - This issue has already been decided in the case of P.R. Seshadri [ 2009 (7) TMI 814 - KARNATAKA HIGH COURT] and held that if the assessee invested the net sale consideration in the time allowed in construction of new house in the landed property owned by the assessee s spouse, that will not disentitle the claim of deduction u/s. 54F. There should be direct nexus of investment by the assessee in the residential house owned by assessee s spouse. In other words, if it was given for some other purpose to her husband and if there is no nexus between the these two, then exemption u/s. 54F cannot be granted. However, the lower authorities have not examined the exact amount of net consideration invested in the construction of new residential house and the time limit in which it was invested by the assessee. In our opinion, these facts are to be examined by the AO so as to grant deduction u/s. 54F. We are inclined to remit the issue to the file of the AO to verify whether the claim of amount invested in the construction of new house on the landed property owned by the assessee s spouse has actually been invested therein - Appeal by the assessee is partly allowed for statistical purposes. 2021 (8) TMI 460 Disallowance of 20% of the Misc. other expenses - HELD THAT:- A perusal of the assessment order itself reveals that the assessee had furnished the requisite documents/evidences relating to the incurring of the expenditure. But the Ld. AO without examining those documents and without pointing out any error in those documents has simply made the ad hoc 20% disallowance, which is not justifiable in the eyes of law. The aforesaid disallowance made by the AO is, therefore, set aside/deleted. This ground is allowed in favour of the assessee. Difference between the income reported by the assessee as compared to TDS information in Form 26AS - HELD THAT:- As assessee invited our attention to the relevant part of the assessment order and the relevant documents filed and submitted that the income declared by the assessee is much more than that is decipherable from Form 26AS. Assessee has submitted that the assessee has taken into account all the income as depicted in Form 26AS. The Learned Counsel has submitted that the assessee may be given opportunity to reconcile the figures of income as compared to the information in Form 26AS. DR has not objected to the same. This issue is, accordingly, restored to the file of the Ld. AO with a direction to verify the contention of the assessee from the accounts of the assessee and decide the issue afresh as per law. 2021 (8) TMI 459 Expenditure claimed in respect of employee's contribution - disallowance of expenditure claimed on account of the employee's contribution to ESI EPF - HELD THAT:- The issue for consideration in this case is with regard to allowability of employee's contribution made towards EPF ESI. Considering the material available on record and submissions of the assessee, the assessee ought to have been given opportunity for furnishing the relevant evidences in the interest of principles of natural justice - we set aside the order of Ld. CIT(A) and restore the grounds to CIT(A) for the decision afresh after considering the evidences furnished by the assessee. Thus, grounds raised by the assessee in this appeal are allowed for statistical purposes. 2021 (8) TMI 458 Enlarging scope of limited scrutiny - rejecting the books of accounts of the assessee and estimating the income - CIT- A directed re-compute the net profit of the assessee at 8% in place of 6.54% as returned by the assessee - HELD THAT:- We do not agree with the contention of the Ld. Sr. D.R. on this issue for the reasons that if there is deficiency in vouchers or bills supporting the inference of the expense, this in our view cannot make accounts maintained by the assessee to be incorrect or incomplete. At the most, the expenses to the extent they are not supported by the vouchers can be regarded to be non-genuine and can be disallowed by the AO while computing the income of the assessee, but it cannot give the power to the AO to hold that the accounts are not correct or incomplete i.e. for the said reason only the AO cannot resort to reject the books of accounts of the assessee. FAA [Ld. CIT(A)] has ventured to do so (rejection of books of account) by assuming incorrect facts and misdirected himself by stating that the assessee has not produced the books of accounts before the AO/himself, whereas the AO has categorically observed that the assessee has produced cash books, ledgers and other documents called for by him. And in this context, it is noted that the Ld. CIT(A) has deleted the addition of ₹ 1.48 crores by relying on the veracity of the cash book submitted by the assessee before him. As findings of the Ld. CIT(A) on this issue shows non-application of mind and exposes per-se contradiction of facts. Therefore, the assumption drawn by the Ld. CIT(A) to re-compute the net profit of the assessee at 8% in place of 6.54% as returned by the assessee needs to be interfered with because it has no sanction of law and we set aside the same. Therefore the assessee succeeds. So, the direction of Ld. CIT(A) to re-compute the income of the assessee at 8% of the net profit of the gross receipt is canceled. - Decided in favour of assessee. 2021 (8) TMI 457 Nature of expenditure - Expenditure incurred on Research Development - revenue or capital expenditure - CIT(A) upheld the action of the AO holding that the assessee did not file any supportive details to verify the claim of expenditure and, therefore, the disallowance was sustained by him - HELD THAT:- Although full details were available before the AO, however, the AO was of the view that the expenses have the nature of creating enduring benefit and, therefore, it squarely falls under capital in nature. CIT(A), without going through the various details filed before the AO had dismissed the appeal filed by the assessee on the ground that the assessee failed to file the supportive details to verify the claim of expenditure. In other words, he has not gone through the details filed before him. Considering all we deem it proper to restore the issue to the file of the CIT(A) with a direction to verify the details already on record and decide the issue as per fact and law by passing a speaking order on the issue of capital or Revenue nature of the expenses. While doing so, he shall give due opportunity of being heard to the assessee. I hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 2021 (8) TMI 456 Reopening of assessment u/s 147 - HELD THAT:- There should be a failure on the part of the Assessee to disclose fully and truly all the material facts necessary for that assessment for that particular assessment year. In this case, the reasons recorded clearly indicates that, there is no such finding recorded by the Assessing Officer for the reopening of the assessment. Considering the proviso to Section 147 of the Act and also by following in the case of Commissioner of Income Tax and Another Vs. Foramer France [ 2000 (8) TMI 45 - ALLAHABAD HIGH COURT] and in the case of Fenner (India) Limited Vs. Deputy Commissioner of Income Tax [ 1998 (11) TMI 66 - MADRAS HIGH COURT] , we hold that the reopening is not valid. - Decided in favour of assessee. 2021 (8) TMI 455 Addition u/s 68 - Huge difference in purchase and selling price of rice - sham transaction - discharge the primary onus of the assessee or not? - HELD THAT:- Assessee was dealing in Rice contracts in the area Naya Bazaar, Delhi, which functions as mandi/local market and there are chances of movement of buyers and sellers over the period. In the given case, the tax authorities have verified the existence of parties after eight years of transactions. The Courts have held that after lapse of reasonable time, the findings after lapse of such reasonable time is not trustable and chances of migration is proved. In the given case, the investigation is carried out after lapse of eight years, which is after lapse of considerable time. When we considered the present issue under dispute, the Revenue authorities allege that the assessee is carrying on three types of transactions and in order to avoid tax on the huge income earned by the assessee in the insurance division and elevator division, the assessee had indulged in the trading of Rice transactions in order to book the fictitious losses to avoid the tax. When we look at the above proposition, what benefit the assessee might have gained by this way. As assessee has given all the relevant details of all the parties along with the confirmations still the Revenue doubts the identity and genuineness then it is they who has to prove that the assessee has indulged in the activities to avoid tax. In the given case, the Revenue has not brought any material in support of their belief and applied assumptions merely on verification of address aspect of identification. In the given case, AO has not carried out any useful investigation but merely followed the previous pattern of investigation and completed the assessment on preconceived notion that the parties are bogus without really verifying the real aspect - the assessee has clearly given the details of suppliers and parties with whom the assessee has made purchases and sales to Revenue authorities, not only the address but also the PAN details, sales tax details, bank details, etc., AO cannot verify one aspect of identifying the parties and neglecting the other important aspect of identification and comes to conclusion which itself is not proper. Therefore as held in the case of Dwakadhish Investment (P) Ltd. [ 2010 (8) TMI 23 - DELHI HIGH COURT] that any matter the onus of proof is not a static one, though the initial burden of proof lies on the assessee, yet once they proves the identity of the parties by furnishing the PAN details or income tax assessment numbers and the genuineness of the transactions in their books and making payments by account payee cheques or drafts then the onus of proof would shift to the Revenue. Just because the creditors could not be found at the address given, it would not give the Revenue the right to invoke the provisions of section 68 of the Act. One must not loose the sight of the fact that it is the Revenue which has all the powers and wherewithal to trace any person. Assessee has given all the relevant details of all the parties along with the confirmations still the Revenue doubts the identity and genuineness then it is they who has to prove that the assessee has indulged in the activities to avoid tax. In the given case, the Revenue has not brought any material in support of their belief and applied assumptions merely on verification of address aspect of identification. - Decided in favour of assessee. 2021 (8) TMI 454 Penalty u/s 271(1)(c) - addition u/s 68 - HELD THAT:- We find that the Coordinate Bench of Tribunal [ 2018 (5) TMI 2079 - ITAT DELHI] has remanded the matter pertaining to the addition made u/s. 68 of the Act to the file of AO for fresh adjudication as per the directions contained therein. Thus the addition is yet to be finalized. Sub Clause (iii) of Section 271(1)(c) provides mechanism for quantification of penalty. Assessee would be directed to pay a sum in addition to taxes, if any, payable by him, which shall not exceed three times the amount sought to be evaded by reason of concealment of income or furnishing of inaccurate particulars of income. In other words, quantification of penalty is dependent upon the additions made to the income of the assessee. Thus until the issue regarding the determination of income is finalized, penalty u/s. 271(1)(c) of the Act cannot be imposed upon the assessee. In the present case, the addition to the income is yet to attain finality. In such a situation, there cannot be any question of levying of the penalty u/s. 271(1)(c) - Appeal of the assessee is allowed. 2021 (8) TMI 453 Assessment u/s 153A - benefit of exemption u/s 11 - Bogus purchases - HELD THAT:- All the relevant ingredients necessary to prove the purchases are genuine has been filed by the assessee. Weighing slips are also annexed in the paper book along with other documents. Certificate from Architect and contractor supporting the purchase of CTD bars have been filed. The facts that the building has been constructed is not in dispute as there is an approved plan of building by Nagar Nigam Bhopal. Complete quantitative details along with bills and bank statement is on record. We note that total 841910.76 kg CTD bars were used for the construction of building, out of which around 73% of the CTD bars were purchased from these two parties. Since the construction has been done is on record and has not been objected or adversely commented in any manner by both the lower authorities and it is an established fact that construction of the building cannot be done without iron and steel which is crucial and major components of construction cost, the alleged disallowance seems to be made merely on assumption basis as there is no direct evidence to show that any such disallowance was even called for. On merits the assessee deserve to succeed as the documents filed before lower authorities and before us, are sufficient enough to demonstrate that the alleged purchase from M/s. Prateek Enterprises and M/s Saluja Enterprises are genuine and CTD bars purchased through bills issued by both these concerns have been utilized in the construction of the building of the society. Thus, Ld. AO was not justified in making addition - Finding of Ld. CIT(A) is set aside and the grounds raised by the assessee for A.Ys. 2006-07, 2007-08 2008-09 challenging this issue of bogus purchase are allowed. Assessement u/s 153A - As regards the legal issue raised by the assessee that no addition was called for since no incriminating material relating to the alleged bogus purchase was found during the search u/s 132 of the Act at assessee premises, additions made only on the basis of 3rd party information and opportunity of cross examination was not provided, we observe that this is an admitted fact that the Ld. AO doubted the genuineness of the purchase of CTD bars from M/s Prateek Enterprises M/s. Saluja Enterprises on the basis of the investigation carried out by the investigation wing independently and the information was forwarded to the Ld. AO. No incriminating material has been referred by the ld. AO during the assessment proceedings which was found during the course of search. Assessment year 2006-07 2007-08 are non-abated assessment since the time limit of issuance of notice u/s 143(2) of the Act expired before the date of conduct of search. For such non-abated assessment additions could be made only if incriminating material is found during search proceedings as held by Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] . Thus, in view of the judgment of Delhi High Court in the case of Kabul Chawla (supra) the addition for A.Y.2006-07 2007-08 deserves to be deleted. Denial of natural justice - We find that the assessee was not provided any opportunity to cross examine these two parties which certainly defies the principles of nature justice as the information of the 3rd party has been used against the assessee. The decision of Coordinate Bench Mumbai in the case of ACIT vs. Tristar Jewellery Export Pvt. Ltd [ 2015 (12) TMI 1366 - ITAT MUMBAI ] supports this view that the assessee should be provided an opportunity of cross examination, if addition in its hands is based on 3rd party information. Unexplained payment - Documents filed by the assessee towards incurring construction expenses during the year and the bills issued by Mr. Anees khan has not been claimed to be bogus by the revenue authorities except for the payment of ₹ 17 lac. The alleged sum has been paid through banking channel and tax has been deducted at source. CIT(A) ought to have appreciated the transaction between Anees Khan and assessee society in entirety. We, are thus satisfied with the transactions between assessee society and Mr. Anees Khan contractor and are of the considered view that alleged sum of ₹ 17,00,000/- is part of the construction cost incurred during the year and has been rightly disclosed under the head of construction expenses in the audited books. The inference drawn by both lower authorities alleging that this sum of ₹ 17 lac is not incurred for the objects of the society has no merits. Thus, the finding of Ld. CIT(A) is set aside and ground no.1 (1.1 to 1.4) raised by the assessee for A.Y. 2009- 10 is allowed. Addition for the alleged benefit given to M/s. Siddharth Kapoor Infrastructure Pvt. Ltd. (in short SKIPL) in violation of section 13(1)(c) - HELD THAT:- As the alleged sum is not a payment to SKIPL but actually it is in the nature of loan by assessee society to the other group society AESS which is running education institution and is registered u/s 12AA of the Act and the same being not in the nature of investment and deposit is not hit by the provision of section 13(3) of the Act and thus no addition/disallowance of the said sum was called for by the Ld. AO. We, thus, set aside the finding of Ld. CIT(A) and delete the addition and allow ground no.2 (2.1 to 2.4) raised by the assessee. Encashment of FDR - It is clear from the audit report that the part of the proceeds of FDRs has been given as loan to HTPL and interest has been charged thereon and it is also an established fact that the HTPL is providing services of giving school buses to the assessee society. The remaining portion of the FDR encashment is given to M/s Ayushmati Education Society and this fact is proved with the necessary ledger account and financial statements placed on record in the paper book. We also note that Ld. AO made addition for notional interest on the sum advanced to HTPL - We are also of the view that Ld. CIT(A) has rightly deleted both these additions on observing that there was no unsecured loan given to HTPL during A.Y. 2009-10 and for the advance/loans given during A.Y. 2010-11. Assessee society has already charged interest which is duly reflected in the books of account. Though Ld. CIT(A) has rightly deleted both these additions but revenue has not challenged this issue of addition of notional interest before us. Exemption u/s 11 denied - If there is some mis-utilization or mismanagement of the income/fund of the charitable society, the exemption u/s 11 of the Act cannot be denied to the assessee trust on the remaining income. Thus, it is clearly established that only the relevant income falling within the mischief u/s 13(1)(c)/13(1)(d) will lose the benefit of exemption under section 11 of the Act and the balance of the total income of the trust will remain eligible for the benefit of exemption under section 11 of the Act . Accordingly this common issue raised by the Revenue for A.Y. 2009-10 2010-11 against the benefit of exemption u/s 11 of the Act allowed by the ld. CIT(A) is dismissed. Relevant grounds raised pertaining to this issue in the three assessment years stands dismissed. Denial of benefits of Section 10 (23C) (vi) - We find that in the instant case the Ld. Assessing officer without giving intimation or recommendation to the Central Government or the prescribed authority to withdraw the order under Section 10 (23C) (vi) of the Act issued to Appellant, has directly denied the benefits of Section 10 (23C) (vi) of the Act in the assessment proceeding, and this finding of Ld. AO is in contravention to 1st Proviso to Section 143 (3) of the Act. CIT (Appeals) failed to appreciate that the income of Appellant society for the year under consideration was exempt u/s 10 (23C) (vi) of the Income tax Act, 1961 and the appellant had specifically mentioned the factum of availability of such exemption in its return of income and has also made submission before the Ld assessing officer regarding exemption u/s 10(23C)(vi). Thus, Ld CIT (A) and LD AO failed to take into consideration that after giving effect to exemption under Provisions of section 10(23C)(vi) there cannot be any income of the appellant trust which can be charged to tax. In view of exemption been already granted u/ s 10(23C)(vi) there can't be any income of the appellant trust which is liable to tax even ignoring the Provisions of section 11 of the Act. Therefore, even if the benefits of section 11 is denied than too there can be no income of the appellant trust on which tax can be collected from it in view of the provisions of section 10(23C)(vi) of the Act considering the approval granted to the appellant trust. Therefore, after giving effect to exemption under provisions of section 10(23C)(vi) there cannot be any income of the appellant trust which can be charged to tax as the total income of the Appellant society is exempted and hence the addition of ₹ 1,99,21,499/ sustained by the Ld CIT (A) is uncalled for and the same is set aside. Common ground no.1 raised by the assessee for A.Y. 2009-10 2010-11 is allowed. 2021 (8) TMI 452 Levy of penalty u/s. 271(1)(c) - additions/disallowances which were suo motu surrendered by the assessee - HELD THAT:- Hon'ble Delhi High Court in the case of PCIT vs. Harsh International Pvt. Ltd. [ 2020 (12) TMI 1082 - DELHI HIGH COURT] has held that concealment of income can be levied only in cases where the concealment has been proved. It has further observed that if the quantum order itself has been challenged before the Hon'ble High Court and the High Court has framed substantial question of law in appeal then it would show that the alleged concealment is not final and the issue is disputable and the penalty levied by AO in such cases cannot survive. We are of the view that the ratio of the aforesaid decision would be squarely applicable to the facts of the present case. In such a situation, relying on the aforesaid decision in the case of Harsh International Pvt. Ltd. (supra), we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue are dismissed. 2021 (8) TMI 451 Deduction u/s 54F - denial of claim for the reasons that the assessee had not furnished the return of income for the instant assessment year either u/s 139(1) or u/s 139(4) - assessee deposited the Long Term Capital Gain earned, in LTCG account scheme in the bank and also utilized the same - HELD THAT:- Although the assessee had not filed the return of income under section 139(1) of the Act but deposited the total sale consideration from residential plot held as LTCG asset in the bank account and also utilized the same for purchase of the house within the time allowed- deduction claimed under section 54F of the Act by the assessee cannot be denied on the sole ground that no return of income was filed by the assessee under section 139(1) of the Act. Respectfully following the aforesaid referred to orders by the Coordinate Benches of the ITAT, are of the view that the A.O. was not justified in denying the claim of the assessee for deduction under section 54F of the Act and the Ld. CIT(A) was not justified in confirming the action of the A.O. therefore, the addition made by the A.O. and sustained by the Ld. CIT(A) is deleted. - Decided in favour of assessee. Service Tax 2021 (8) TMI 490 Condonation of delay of 191 days in filing appeal - HELD THAT:- There is no sufficient explanation for the delay. Consequently, the civil appeal is dismissed on the ground of delay. 2021 (8) TMI 485 Legality and validity of re-initiation of adjudication proceedings after eight years - time limitation - Section 73(4B)(b) of the Finance Act, 1994 - HELD THAT:- In view of the order-in-original passed by the Adjudicating Authority and the demand having been dropped against the Petitioner, no further order is required to be passed in the present petition, as the grievance of the Petitioner stands satisfied - It is made clear that the questions of law raised in the present petition including the period of limitation stipulated in Section 73(4B)(b) of the Finance Act, 1994 for determining the amount of Service Tax due under Section 73(2), are kept open. Petition disposed off. 2021 (8) TMI 472 Maintainability of petition - availability of alternative remedy - appealable order or not - Levy of Service Tax - royalty and allied charges paid by the Petitioner on the minerals extracted by it by virtue of granting of mining lease by the Government in its favour - HELD THAT:- If the order impugned is appealable, the Petitioner is relegated to approach the appropriate forum in accordance with law. At this point of time, Mr. J. Sahoo, learned Senior Advocate for the Petitioner contended that the Petitioner has no objection to approach the appropriate forum under the provisions of law, but the pre-condition of entertaining the appeal is to deposit 75% of the demanded amount, which will cause prejudice to the Petitioner. Therefore, the Petitioner has approached this Court by filing the present writ petition. As the matter is pending before the Apex Court for adjudication, whether service tax is leviable on the royalty collected from the Petitioner for winning of minerals and, as such, an interim order has been passed by the Apex Court to that extent, it is open to the Petitioner to bring all these facts before the appellate forum by filing interlocutory application seeking waiver of predeposit of the amount for entertaining the appeal. If such application is filed, the appellate authority shall consider the same taking into consideration the orders passed by the Apex Court and pass appropriate order in accordance with law. Petition disposed off. 2021 (8) TMI 450 Valuation of taxable service - clearing and forwarding services - inclusion of reimbursable charges received from the customers in the taxable value - man power supply service - taxability of packaging activity done by the appellant. Inclusion of reimbursable charges received from the customers in the taxable value - HELD THAT:- It is brought out from facts that the appellant has not included the charges in the nature of electricity, diesel generator charges, fuel charges, telephone charges, water charges, stationery chargers etc. incurred for providing clearing and forwarding services in the taxable value. These are actual reimbursements made to the appellants by their customers - reliance can be placed in the case of INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. VERSUS UOI. ANR. [ 2012 (12) TMI 150 - DELHI HIGH COURT] - Since the activity of packing and repacking is a manufacturing activity the demand of service on such activity cannot sustain. Demand under man power supply service - HELD THAT:- Admittedly, the services were provided to service recipient situate in SEZ. It is also brought out that as per Notification NO.40/2012-ST dated 20.06.2012, the service tax is exempted - Only because the appellant did not produce the above documents, the exemption as per Notification No.40/2012-ST was denied and the department has demanded service tax. It is seen from Annexure to the reply of SCN that the appellant has produced the document Form A2 along with reply. Section 51 of SEZ Act, 2005 is to have an overriding effect. The denial of the benefit of exemption by relying upon procedural requirement of a notification would be against the provisions laid down in the SEZ Act - the demand of service tax under Man power service cannot sustain. This issue is found in favour of the appellant and against the respondent. Packing and repacking services - demand of service tax under BSS - HELD THAT:- The demand of service tax under Business Support Service on the activity of packing and repacking cannot sustain and requires to be set aside which we hereby do. It is also to be stated that definition of Business Support Service as contained in Finance Act, 1944 does not mention such activity of packing/repacking. For these reasons, the demand cannot sustain. Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2021 (8) TMI 489 Validity of assessment order - whether the cooling equipments imported by the petitioner are exempted from payment of entry tax under the provisions of the Tamil Nadu Tax on Entry of Goods into Local Areas Act, 2001? - HELD THAT:- In the present case, admittedly, the petitioner has imported 3 Nos.217 tons refrigerating equipment of compression type with screw compressor, the Compressor has already incorporated in the Amendment Act No.51 of 2002 and water cool and exchanger compressor and Marley SR 175 cooling towers 3 Nos., the word 'Air-Conditioner' is not mentioned in the invoice and that will not dis-entitle the State from imposing entry tax in accordance with the provisions of the said Act. Though the word 'air-conditioner' is not mentioned in the invoice issued by the manufacturers, the equipments and the utilisation of the equipments are only for air conditioning the business premises of the petitioner, who is running a Textile Shop. Therefore, the equipments imported, admittedly, are installed or commissioned and utilised for the purpose of air conditioning the business premises and therefore for all purpose, the equipments imported are the air-conditioners, within the meaning of Scheduled Goods under the Entry Tax Act. The learned counsel for the petitioner states that the entry tax as demanded had been paid. In view of the belated payment of tax, penalty was also imposed. However, the petitioner is at liberty to approach the Competent Authority if they are otherwise eligible for reduction or waiver of penalty under the provisions of the Act. Petition dismissed. 2021 (8) TMI 483 Recovery of Sales Tax Dues - Cancellation of Auction - Intended purchaser - The appellant is before us contending that the auction should not have been cancelled on the ground that the property was never owned by the Co-operative Spinning Mills and without prejudice to such contention, it is submitted that the refund of the amount collected from the appellant should have been directed to be refunded with commercial penal interest - HELD THAT:- It may be true that the Commercial Taxes Department accepted the said property as one of the securities at the time of granting registration under the provisions of the Tamil Nadu General Sales Tax Act, but that may not be a ground which will inure in favour of the appellant who voluntarily participated in the auction sale and therefore, as an intending purchaser, the appellant was required to exercise due diligence and make thorough verification and cannot turn around and say that it is for the Department to verify all the facts. The Doctrine of Caveat Emptor stares at the appellant. The learned Single Bench was right in refusing to grant the relief sought for and it is equally right in directing the amount paid by the appellant to be refunded and also with regard to the rate of interest. The appellant is a Charitable Trust and has a huge establishment in Vellore and it is also represented that it is doing several charitable activities. If that is so, the appellant can be gracious enough to give up the claim for interest payable by the Government, because, the Government Exchequer is greatly strained due to Covid-19 Pandemic and it is common knowledge that several philanthropists, industrialists, Charitable Trusts, individuals, Government servants have come forward to voluntarily contribute to the Government to enable them to tackle the pandemic situation. Appeal dismissed. 2021 (8) TMI 482 Validity of recovery notice - charge and priority over the other claims against the property of a registered dealer - Section 24(2) of the TNGST Act, 1959 not invoked - HELD THAT:- Explanation I to Rule 24(15-A) of the said Rules would be relevant for the purpose of this case. It states that where the security is furnished in the form of immovable property, the person furnishing it may, in any town, to which Sub-Section (f) of Section 58 of the Transfer of Property Act, 1882 is applicable, mortgage such property to the Government by deposit of title deeds, that in other cases, the security should be by means of registered mortgage of the immovable property and that the security bond should be in Form XIX-B and should be filed in duplicate, the original of which should bear appropriate adhesive non judicial stamps or court fee stamps - The statutory form as stipulated in Form XIX-B states that the applicant, who is the husband of the appellant herein filed an application for registration before the respondent under the TNGST Act, 1959 and the Registering Authority directed the appellant's husband to furnish security as required under Section 21 of the TNGST Act, 1959. Admittedly, there is no necessity for registration of a security bond as the appellant is irrevocably bound herself to the dues payable by the firm at the time when the registration was applied by the husband of the appellant. Therefore, it will be too late in the day for the appellant to state that the property cannot be proceeded against, that it is her individual property and that the provisions of the TNGST Act, 1959 do not specifically provide for recovery of arrears of sales tax from a person, who is not a dealer/defaulter. The terms and conditions of the bond read along with Explanation I to Rule 24(15-A) are lucid and will clearly state that the respondent had enough jurisdiction to proceed in terms of the security bond for recovery of tax arrears payable by the said firm. Appeal dismissed. 2021 (8) TMI 478 Maintainability of petition - appellate remedy not exhausted - invocation of Section 23 of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- This Court is of the considered opinion that even at the first instance, the petitioner is expected to exhaust the appellate remedy contemplated under the provisions of the TNVAT Act and no writ petition needs to be entertained before exhausting the appellate remedy. Even otherwise also, the petitioner is bound to prefer an appeal on merits and adjudicate the merits with reference to the documents and evidenced made available, as the appellate authority is the final fact finding authority. This being the factum, the petitioner is at liberty to prefer an appeal before the jurisdictional appellate authority under the provisions of the TNVAT Act and in the event of filing any such appeal in a prescribed format by complying with the provisions of the TNVAT Act, the appellate authority shall entertain the same by condoning the delay, if any, adjudicate the appeal on merits and in accordance with law by affording opportunity to the writ petitioner and dispose of the same as expeditiously as possible. Petition disposed off. Indian Laws 2021 (8) TMI 479 Dishonor of Cheque - payment of amount of compensation awarded by the trial Court - Principles of natural justice - refusal to entertain cross-examination of respondent-accused - HELD THAT:- On perusal of Sections 143A(5) and (6), it clearly reveals that the amount of compensation awarded by the trial Court if not deposited by the accused, then it may be recovered as if it were fine under Section 421 of Cr.P.C., and if it is after completion of the trial, if any fine is imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973, shall be reduced by the amount paid or recovered as interim compensation. Section 143A(5) is exception to the Section 143A(1) of the N.I. Act. Section 143A(1) empowers the order for interim compensation of at least 20% of the cheque amount to be paid within sixty days from the date of order and the same may be recovered as if it a fine under Section 421 of Cr.P.C., as per Section 143A(5) of the N.I. Act. On perusal of the order passed by the trial Court and First Appellate Court for the purpose of non payment of the interim compensation, the right of cross-examination cannot be denied by the trial Court - The First Appellate Court has also considered the aspect holding that the right of cross-examination cannot be denied. It is also pertinent to note under Section 143A(4) empowers that if the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant. Such being the case, if the accused is not permitted to cross-examine the complainant, the interim order cannot be considered as the final order until completion of trial. Therefore, directing the accused to deposit 20% of the compensation though it is mandatory but it is recoverable by the complainant as if it is fine recovered under Section 421 of Cr.P.C. - Petition dismissed. 2021 (8) TMI 476 Dishonor of Cheque - legally enforceable debt or not - alleged acquaintance of the accused with the complainant - rebuttal of presumption - Sections 138 and 139 of the N.I. Act - HELD THAT:- The complainant has failed to mention as to when the alleged loan was given and when the cheque in question is said to have been given by the accused to her. Admittedly there are no documents with respect to the alleged loan. She has not even stated as to why no documentation of the alleged loan was made by the parties. Admittedly the accused was not a person well known to her rather as stated by the complainant herself, he was introduced to her only from the alleged sister of the accused. On the other hand the accused as D.W.1 has stated that the cheque in question was given to his cousin sister by name Anitha with whom his relationship has been strained. Further P.W.1 in her cross examination also could not identify the accused. Admittedly the complainant could not able to reveal the name of said alleged sister of the accused who according to her introduced the accused to her. According to the complainant, the loan was given to the accused for construction of a building complex by name 'Gajanana Tower'. The accused as D.W.1 has stated in his evidence that the construction of the said building Gajanana Tower had been completed in the year 2001 and he had sold the said building in the year 2005 itself - the question of he availing loan from the complainant to put up a construction does not arise. The complainant upon whose shoulder the burden of proving the alleged existence of legally enforceable debt was reverted, could not able to discharge the same. This aspect both the Trial Court and the Sessions Judge's Court failed to notice. On the other hand they were carried away by the fact that the accused was the drawer of the cheques in question which came to be returned unpaid when presented for realization and proceeded to hold that accused is guilty of the alleged offence. The revision petition is allowed. 2021 (8) TMI 475 Dishonor of Cheque - insufficiency of funds - stop payment of cheque was ordered - rebuttal of presumption - preponderance of probabilities - section 138 of NI Act - HELD THAT:- The two cheques at Exs.P1 and P2 for a sum of ₹ 2,00,000/- and ₹ 5,00,000/- respectively both dated 22.01.2013 were drawn by the accused. It is also not in dispute that those cheques when presented for realisation came to be returned unpaid with the banker's endorsement as 'exceeds arrangement' with respect to the cheque for an amount of ₹ 2,00,000/- and with a reason of 'insufficiency of funds' with respect to the cheque for an amount of ₹ 5,00,000/- as could be seen from exhibits P3 to P5. It is also not in dispute that after the dishonour of the cheques, the complainant got issued a legal notice to the accused as per Ex.P7 to which the accused sent a reply as per Ex.P10 - these undisputed facts would form a presumption in favour of the complainant about the existence of a legally enforceable debt under Section 139 of the N.I. Act. However, the said presumption is rebuttable. Even though the alleged 'stop payment' instruction is shown to have been given on 22.06.2012, it cannot be ignored of the fact that the cheques in question are dated 22.01.2013 which means that they have been drawn subsequent to the alleged 'stop payment' instruction. Even though the accused has also stated that he had filed a police complaint against the complainant on 07.06.2012 but admittedly the police, except issuing an endorsement in form 76A as can be seen at Ex.D3 have not filed any charge-sheet against the complainant. Further the accused has produced a copy of the application said to have been filed by him for housing loan and also statement of account at Exs.D4 and D7 respectively. But they also do not prove that the alleged balance amount of ₹ 7,00,000/- has been paid by the accused to the complainant in cash. Thus the attempt made by the accused to show that he has cleared the alleged outstanding liability of ₹ 7,00,000/- to the complainant by paying the said amount in cash could not be established by him. As such, the presumption that was formed in favour of the complainant becomes crystallised and accused could not succeed in rebutting the said presumption formed in favour of the complainant even by making out a case of preponderance of probabilities. The Trial Court has convicted the accused for the alleged offence which was further confirmed by the Sessions Judge's Court - the trial Court has sentenced the accused to pay a fine of ₹ 10,00,000/-, in default of payment of fine amount, to undergo simple imprisonment for a period of six months. It has further ordered that, out of the total compensation/fine amount, a sum of ₹ 5,000/- shall to be remitted to the State as fine. The Criminal Revision Petition is partly allowed. 2021 (8) TMI 449 Scope of judicial review on the policy decisions - Seeking to direct the National Disaster Management Authority (NDMA)/Central Government/State Governments to provide ex gratia monetary compensation of ₹ 4 lacs or notified ex gratia monetary compensation to the families of the deceased persons who have succumbed to the pandemic of Covid-19, in view of Section 12 of DMA 2005 - seeking to direct the respondents/State Governments to fulfill their obligation(s) to take care of victims of the calamity and their family members - seeking an appropriate direction to the respondents State Governments to issue any official document stating cause of death, to the family members of the deceased who died due to Covid-19; and iv) to direct the respondents Union of India and others to provide social security and rehabilitation to the victims of Covid-19. HELD THAT:- The Disaster Management Act, 2005 has been enacted for prevention and mitigation effects of disasters and for undertaking a holistic, coordinated and prompt response to any disaster situation. It has been enacted on disaster management to provide for requisite institutional mechanisms for drawing up and monitoring the implementation of the disaster management plans, ensuring measures by various wings of Government. With the above aim and object, DMA 2005 has been enacted. The DMA 2005 provides for setting up of a National Disaster Management Authority under the Chairmanship of Hon ble Prime Minister. It also provides for constitution of State Disaster Management Authorities under the Chairmanship of the Chief Ministers and District Disaster Management Authorities under the Chairmanship of District Magistrates. It also provides for concerned Ministries or Departments to draw up department-wise plans in accordance with the national disaster management plan. In Section 12 of DMA 2005, the word shall is used twice. The intent of the legislature by using the word shall twice is very clear and the same can be in tune with the Statement of Objects and Reasons for enactment of DMA 2005 and the functions and powers of the National Authority. One of the Objects and Purposes is mitigation . As per Section 6(1) and Sub-section 2(g) of Section 6, the National Authority shall have the responsibility for laying down the policies, plans and guidelines for disaster management and recommend provision of funds for the purpose of mitigation - As per the settled proposition of law laid down by this Court in a catena of decisions, when the language of the provision is plain and unambiguous, statutory enactments must ordinarily be construed according to its plain meaning. The beneficial provision of the legislation must be literally construed so as to fulfil the statutory purpose and not to frustrate it. Guidelines for ex gratia assistance on account of loss of life due to Covid-19 pandemic, while recommending other guidelines for the minimum standards of relief, it can be said that the National Authority has failed to perform its statutory duty cast under Section 12 and therefore a writ of mandamus is to be issued to the National Authority to recommend appropriate guidelines for ex gratia assistance on account of loss of life due to Covid-19 pandemic while recommending guidelines for the minimum standards of relief to be provided to persons affected by disaster/Covid-19 pandemic as mandatory under Section 12 of DMA 2005. Whether a writ of mandamus can be issued directing the Central Government/National Authority/State Governments to pay a particular amount by way of ex gratia assistance, more particularly ₹ 4 lacs, as prayed by the petitioners? - Whether the Court can/may direct to pay a particular amount by way of ex gratia assistance? - HELD THAT:- There is a need to focus simultaneously on prevention, preparedness, mitigation and recovery, which calls for a different order of mobilization of both financial and technical resources. The Government is required to and as so stated in the counter affidavit and as submitted by Shri Mehta, learned Solicitor General, a huge fund is required for the purpose of creating the infrastructure, hospitals, ventilators, oxygen, testing, vaccination etc. According to the Central Government, the Government has bonafidely and in the larger public interest has decided the priorities and focused simultaneously on prevention, preparedness, mitigation and recovery. According to the official figure, the pandemic has caused more than 3,85,000 deaths, the same is likely to increase further. It cannot be disputed that these deaths have affected the families from all classes the rich and poor, professionals and informal workers, and traders and farmers. It has also affected the kins as well as elderly members, old parents. Many have lost the sole bread earner. However, at the same time, and as observed hereinabove, the impact and effect of the present pandemic/disaster would be different from the other disasters/natural disasters for which ex gratia assistance is provided. There shall not be any justification to provide for the same/similar amount by way of ex gratia assistance as provided in the case of other disasters/natural disaster, i.e., ₹ 4 lacs. Seeking to issue appropriate direction to the respondents State Governments to issue an official document stating Covid-19 related as cause of death, to the family members of the deceased who died due to Covid-19 - HELD THAT:- It is required to be noted that it is the duty of the every authority to issue accurate/correct death certificates stating the correct and accurate cause of death, so that the family members of the deceased who died due to Covid-19 may not face any difficulty in getting the benefits of the schemes that may be declared by the Government for the death of the deceased, who died due to Covid-19. In the death certificate also, if a person has died due to Covid-19 and/or any other complications/disease due to Covid-19, it should be specifically mentioned in the death certificate. Prayer to issue an appropriate direction directing the respondents State Governments to fulfil their obligation to take care of the victims of the calamity and their family members - HELD THAT:- The prayer sought is too vague. Even otherwise, considering the counter affidavit filed on behalf of the Union of India it demonstrates the various reliefs declared by the Union Government. As such, no mandamus can be issued directing the respondents State Governments to declare a particular policy/relief/relief package in general and the same shall be within the domain of policy decision and would have financial implications also. Seeking to issue appropriate direction directing the respondents Union of India and others to provide social security in the form of insurance - HELD THAT:- The Union Government may look into the same and cover them also who might have been left out and who can be said to be in direct contact of dead bodies of Covid-19 patients. Even, Shri Tushar Mehta, learned Solicitor General has also stated at the Bar that the Union Government/appropriate authority shall look into the same.
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