TMI Tax Updates - e-Newsletter
September 5, 2020

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax CST, VAT & Sales Tax Indian Laws

TMI SMS

• Levy of Anti Dumping Duty - DA terminated investigation - Orders of HC for initiating investigation, Contempt proceedings, replacement of DA set aside - SC

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Articles

1. RETROSPECTIVE AMENDMENT: A TRIUMPH OF BUREAUCRATIC OBSTINACY OVER GOOD SENSE?

   By: SIDDARTH MALHOTRA and YOGESH HARJAI

2. GST update on taxability of Assignment of leasehold right in immovable property

   By: Pradeep Jain

News

1. The Fifteenth Finance Commission hold discussions with its Economic Advisory Council

2. In the auto sector, we should move towards global dominance: Shri Piyush Goyal

3. First ever Virtual Buyer Seller Meet for loose diamonds commences

4. Shri Piyush Goyal says country’s Exports and Imports are showing positive trends; Trade deficit is narrowing

Notifications

Customs

1. 84/2020 - dated 3-9-2020 - Cus (NT)

"Exchange Rates Notification No.84/2020-Custom (NT) dated 03.09.2020 [Effective from 04th September, 2020]

2. 40/2020-Customs (N.T./CAA/DRI) - dated 31-8-2020 - Cus (NT)

Appointment of CAA by DGRI

GST - States

3. 24617- FIN-CT1-TAX-0002/2020 - dated 2-9-2020 - Orissa SGST

Notification to extend the due date for filing FORM GSTR-4 for financial year 2019-2020 to 31.10.2020

4. G.O. Ms. No. 40 - dated 19-8-2020 - Puducherry SGST

Lieutenant-Governor, Puducherry, on the recommendations of the Council, hereby makes the following further amendment in the notification of the Commercial Taxes Secretariat, Government of Puducherry issued vide G.O. Ms. No. 34, dated the 5th August, 2019.

5. S.O. GST-1/2020/12 - dated 25-8-2020 - Punjab SGST

Amendment in Notification No. GST-1/2020/11 dated the 24th August, 2020

6. S.O. GST-1/2020/11 - dated 24-8-2020 - Punjab SGST

Payment of taxes for discharge of tax liability as per FORM GSTR-3B

7. F.12(46)FD/Tax/2017-III-230 - dated 4-9-2020 - Rajasthan SGST

Seeks to amend notification No.F12(46)FD/Tax/2017-Pt-V-177 dated 18th May, 2020

8. F.12(46)FD/Tax/2017-III-229 - dated 4-9-2020 - Rajasthan SGST

Seeks to extend the due date for filing FORM GSTR-4 for the Financial Year 2019-20 to 31.10.2020

Circulars / Instructions / Orders

Customs

1. 39/2020 - dated 4-9-2020

Customs procedure for export of cargo in containers and closed bodied trucks from ICDs/CFSs through Land Customs Stations (LCSs)

Highlights / Catch Notes

GST

• Goods Release u/s 129(1)(a) Requires Overturning Prior 129(1)(b) Order for Tax Payment Compliance.

  Case-Laws - HC : Detention order - A close scrutiny of Section 129 (1)(a) of the Act indicates that if the owner come forward to pay the tax payable on such goods equal to 100% of the tax payable, then Section 129 (1)(a) of the Act is attracted. But when already the appellants have passed an order u/s 129 (1)(b) of the Act, by rejecting the documents tendered by the person in charge, until and unless that order is set aside, no order can be passed u/s 129 (1)(a) of the Act. - HC
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• Petitioner Seeks Permission to File Form TRAN-1 for Transitional Credit; GST Council Must Recommend CENVAT Credit Approval.

  Case-Laws - HC : Permission to file Form TRAN-1 - transitional credit - if the petitioner’s assertion is found to be correct, the GST Council shall issue necessary recommendation to the Commissioner to enable the petitioner to get the benefit of CENVAT credit within the stipulated time as stipulated by the Union of India. - HC
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Income Tax

• High Court Criticizes ITAT's Decision for Lack of Reasoning in Deleting Additions on Transportation Expenses.

  Case-Laws - HC : Allowability of transportation expenses - ITAT directed deletion of additions made by the AO - The Tribunal has not assigned any reasons on the issues raised before it and has not given any reasons in support of its conclusion. The order passed by the Tribunal is cryptic and suffers from the vice of non application of mind. - HC
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• Court Rules Reassessment u/s 147 Invalid Due to Procedural Errors; Deductions u/s 80-IA Involved.

  Case-Laws - HC : Reopening of assessment u/s 147 - Deduction u/s 80-IA - Without any application of mind, the Assessing Officer re-opened the assessment under the pretext that income has escaped assessment and passed the reassessment order under Section 147, which is a patent error committed by the Assessing Officer. - HC
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• Court Orders Reconsideration of 20% Disputed Tax Payment; Authorities Must Avoid External Influences in Decision-Making.

  Case-Laws - HC : Stay petition - payment of 20% of the disputed demand - As a creature of the statute, on whom the discretionary power is conferred, the authority cannot abdicate his responsibilities by acting on the dictates of another who has no role to play under the statutory scheme - first appellate authority directed to pass fresh orders in the matter after hearing the petitioner - HC
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• Income Tax Assessment Void: Firm Non-Existent on Search Date, PAN Possession Irrelevant, Section 153A Invoked Incorrectly.

  Case-Laws - AT : Assessment u/s 153A - the firm was not in existence and was ceased to exist on the date of search and mere holding a PAN does not alter the legal position that the firm was not in existence and accordingly, the assessment framed u/s 143(3) r.w.s. 153A of the Act is void and ab initio. - AT
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• Penalty u/s 271AAA Deleted Due to Defective Notice; Assessing Officer Failed to Query Income Origin.

  Case-Laws - AT : Levy of penalty u/s 271AAA - Defective notice - the Assessing Officer has not confronted the assessee to substantiate the manner in which the additional income was earned in the absence of such query. It cannot be inferred that the assessee failed to substantiate the manner which additional income was earned - Penalty deleted - AT
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• Ruling: Section 234E Late Fee Cannot Be Levied for TDS Returns Filed Before June 1, 2015.

  Case-Laws - AT : Levy of late filing fee u/s 234E - Late filing of TDS return - Amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. - AT
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• Assessee's Request to Delete Expense Addition Rejected; Must Follow Legal Principles Over Tax Timing Discrepancy.

  Case-Laws - AT : Disallowance on account of provision for expenses - The alternative request of the assessee to delete the addition on the ground that the assessee has offered the same for tax in subsequent assessment year, is also rejected because the issue in dispute is to be decided in accordance with law and not according to the choice of the assessee when he offer for tax. - AT
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• Assessing Officer's Rejection of Assessee's Disallowance u/s 14A Implies Dissatisfaction Without Needing Explicit Documentation.

  Case-Laws - AT : Disallowance u/s 14A - when he rejected the disallowance computed by the assessee, that in itself is dissatisfaction with the claim of the assessee of disallowance. It is not necessary that such dissatisfaction has to be recorded in explicit words, when the it is evident from the implied action of the Assessing Officer. - AT
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Customs

• Supreme Court Overturns High Court Orders in Anti-Dumping Duty Case, Dismissing Contempt Proceedings Against Designated Authority.

  Case-Laws - SC : Seeking levy of Anti Dumping Duty - DA terminated the investigation, on the ground that appellant failed to prove any injury to Domestic industries - HC directed the DA to initiate inquiry / investigation - Contempt proceedings initiated against the DA for failure to make necessary inquiry - Both the orders of HC set aside - SC
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• Court Rules Goods at Port Should Be Released Despite Petitioner's Misleading Claims Against Foreign Exporter.

  Case-Laws - HC : Retention of goods after arriving at Port - Dispute in title of goods - the petitioner herein lodged their contentions and contended that the goods should not be released to the second respondent herein - It is quite possible that the petitioner has been misled by the foreign exporter. But then, that cannot be a ground for directing the first respondent (customs authorities) to retain the goods. - HC
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• Supreme Court Decision Supports Provisional Release of Used Rubber Tyres Amid Import Status Uncertainty Under 2016 Rules.

  Case-Laws - HC : Provisional release of goods - Used Rubber Tyre Cut in Two Pieces - Once the application of the Schedule VI of the 2016 Rules is ruled out, the only question is whether the import of the goods is free or restricted. Under either case, in view of the decision of the Hon'ble Supreme Court in Atul Automations, provisional release is very much permissible. - HC
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• Court Exempts Appellant from Burden of Proof on Gold Confiscation u/s 123 of the Customs Act, 1962.

  Case-Laws - AT : Absolute Confiscation - Gold - old and used Mobile Phone - Indian Currency - Claim of innocence and bonafide - Recovery of the gold from the appellant has not been proved and hence, he was not required to discharge the burden u/s 123 of the Customs Act, 1962. - AT
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• Court Orders Immediate Import Without Bank Guarantee for Appellant's Goods in Duty Dispute.

  Case-Laws - AT : Classification of imported goods - Provisional assessment - onerous condition of furnishing 100% bank guarantee on the Appellant for the differential duty amount - Revenue is directed to allow the import of consignments of the Appellant without insisting on any Bank Guarantee with immediate effect. - - AT
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Corporate Law

• NCLT Requires Consent from All Counsel for Physical Hearings to Ensure Fairness and Prevent Rights Infringement.

  Case-Laws - HC : Proceedings in NCLT - part physical and part virtual hearing - infringement of Fundamental Rights - if the Tribunal wants to go for physical hearing of any particular matter, it may go for it, but, at the same time, it must seek the consent of all the learned counsel appearing in the litigation and only thereafter, it may proceed. However, it should not happen that one set of lawyers would appear before the Tribunal physically and the Tribunal would take up the matter, hear those lawyers and decide the matter without the consent of the other set of lawyers appearing for the different parties. Such practice is bound to create hue and cry. - HC
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• Court Rules No Property Deprivation Over Unclaimed Dividends Transferred to IEPF; Article 300-A Not Applicable.

  Case-Laws - HC : Dividend declared but not claimed for more then 7 years - the petitioner is an 81 year old woman who was not aware even about the existence of the shares until recently on 2019 - the shares were acquired by her son who died on 1993 - transfer of such amount to Investor Education and Protection Fund (IEPF) - No deprivation of property is taking place, under the Impugned Provisions, and as such Article 300-A is not attracted in this case. - HC
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Indian Laws

• Court Rules Anticipatory Bail Unavailable Post-Trial in Cheque Dishonor Cases u/s 438 CrPC.

  Case-Laws - HC : Dishonor of cheque - Grant of anticipatory bail - Since the criminal prosecution has crossed the stage of trial, appeal and revision and reached the finality, the person who is found guilty have no right to file anticipatory bail petition for modification invoking 438 of Cr.P.C - HC
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• Acquittal possible in cheque dishonor cases if accused rebuts presumption of enforceable debt; security cheques require proof of settlement.

  Case-Laws - HC : Dishonor of Cheque - acquittal of the accused - rebuttal of presumption - If any cheque is given in security, then presumption of legally enforceable debt or liability exists which has to be rebutted by the accused to the extent that full amount due and payable to the complainant has been paid or otherwise. - HC
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IBC

• Debt Converted to Capital Loses Financial Creditor Status in Insolvency Cases: Key Impact on Creditor Rights.

  Case-Laws - AT : Initiation of CIRP - Financial Debt - Converion of Debt into Capital - Once the ‘Debt’ is converted into “Capital” it cannot be termed as ‘Financial Debt’ and the Appellant cannot be described as ‘Financial Creditor’. - AT
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Service Tax

• Service Tax on Rent-a-Cab Services: Entire Rental Amount Taxed as Deemed Sale, No Extra Tax Under Finance Act 1994.

  Case-Laws - AT : Levy of Service tax - Rent-a-cab Service - deemed sale or not - Agreements/contracts of ‘lease’ are, acknowledgedly, taxable as ‘deemed sale’; it is not the case of Revenue that any portion of the consideration for ‘lease’ is not ‘deemed sale’. As the entire rental is subject to tax as ‘deemed sale’, there is no scope for any portion thereof to be leviable to tax by the Union and, thereby, under Finance Act, 1994. - AT
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• Court Permits Corrected SVLDRS Application Submission for Petitioner Due to Initial Filing Error, Orders Reasoned Decision.

  Case-Laws - HC : Rejection of benefit of SVLDRS - mistake of not mentioning the penalty - filing of details in the wrong column i.e. filing details in the column 9.1 instead of column 9.4 - petitioner allowed to submit an application before the respondent authorities for the correction to be made in the information provided in the Form SVLDRS-1 as regards the disclosure of the dues from them and upon such application being made, the respondent authorities would pass a reasoned speaking order thereon. - HC
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• Appellant in Guest House Case Failed to File Service Tax Returns; Claimed Bona Fide Non-Liability Belief.

  Case-Laws - AT : Non-filing of ST-3 returns - Bonafide belief - business of maintenance/house keeping of NTPC guest house - the appellant assesse should have intimated the Department by filing either NIL ST-3 Returns or an intimation explaining the reasons for non-filing of service tax returns. Similarly, the adjudicating authority should have called for the details and further when an appeal was already pending before the first Appellate Authority for the period April, 2006 to March, 2008, they should have waited for final outcome of the Appellate Order. - AT
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VAT

• High Court Quashes VAT Rate Change on Fuel; Requires Amendment u/s 75 of PVAT Act, Not Section 31.

  Case-Laws - HC : Power to increase the rate of tax (VAT) on Petrol and Diesel by way of Notification - A general and omnibus alteration to the rate of tax of this nature would have to be effected only by way of amendment to the Schedule itself under Section 75 and not by issuance of a Notification under Section 31 of the PVAT Act - Notification quashed - HC
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• Court Highlights Importance of Accurate Representation in Stay Applications During Appeals in Tax Collection Cases.

  Case-Laws - HC : Stay of recovery of dues, pending the appeal - When substantial rights of parties are involved, it is not open to the 1st respondent to (i) mention wrong facts while dealing with stay application filed by the petitioner. (ii) ignore the points urged by the petitioner for seeking stay of collection of tax and (iii) dismiss the say application without giving any valid reasons, why the petitioner is not entitled to grant stay pending appeal before the Telangana State VAT Appellate Tribunal. - HC
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• TNVAT Rule 8(2): Freight and pumping charges separately itemized in invoices are exempt from VAT. Structure invoices accordingly.

  Case-Laws - HC : Valuation - Levy of tax and penalty - Rule 8(2) of TNVAT Rules 2006 - when the freight charges and pumping charges have been separately shown in the invoices without including the same in the cost of the goods, the tax cannot be levied on the same. - HC
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• High Court Affirms Only Assessing Officer Can Condon Delay in Refund Applications u/r 47, Not Deputy Commissioner.

  Case-Laws - HC : Power to condone the delay in filing of refund application - The prescription as found in Rule 47 specifically empowers the Assessing Officer to condone the delay in filing the statement (application) or other documents referred to in clauses (i) to (iv). When a clear prescription has been made as per the statutory provision, Section 20A has no application and in such circumstances, the Deputy Commissioner cannot usurp the powers of the Assessing Officer who has been conferred with the power to condone delay in filing applications. - HC
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Case Laws:

• GST

• 2020 (9) TMI 165
  Permission to file/upload statutory appeal on the GST web portal under section 107 of the GST Act, 2017 - pre-requisite amount not deposited - HELD THAT:- Sri Vikash Kumar, learned Standing Counsel-XI appearing for the State, states that if the petitioner deposits the amount towards tax, interest, fine, fee and penalty as admitted by him and also a sum equal to 10% of the remaining amount of tax in dispute arising from the impugned order, the concerned authority will allow access to the petitioner for uploading the statutory appeal on the GST Web Portal as is required under Section 107 of the Central Goods and Services Tax Act, 2017/ Bihar Goods and Services Tax Act, 2017. If the petitioner complies the undertaking as given before this Court within a period of four weeks from today, we direct the appellate authority to hear the appeal through virtual mode on account of circumstances arising from the current Pandemic Covid-19 and decide it expeditiously, preferably within a period of three months from the date of its filing - Petition disposed off.

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• 2020 (9) TMI 164
  Direction to the 3rd respondent to consider and pass orders on appeal expeditiously, and to keep in abeyance recovery steps for the balance amounts recoverable from the petitioner pursuant to penalty order - HELD THAT:- The Writ petition is disposed off with a direction to the 3rd respondent to consider and pass orders on Ext.P11 appeal within six weeks from the date of receipt of a copy of this judgment, after hearing the petitioner, either through physical hearing or through video conferencing as the case may be.

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• 2020 (9) TMI 163
  Transitional Credit - Form TRAN-1 in compliance of Section 140 of Central Goods and Services Tax Act, 2017 - time limitation - HELD THAT:- Issue decided in the case of OBELISK COMPOSITE TECHNOLOGY LLP, VERSUS UNION OF INDIA, THE SECRETARY TO THE GOVT. OF INDIA, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE [ 2019 (12) TMI 1162 - RAJASTHAN HIGH COURT ] where it was held that considering the fact that the Union of India and the Finance Department have extended the period contemplated under Rule 1A of Rule 117 till 31st December, 2019, we grant liberty to the petitioner to make an application before GST Council (through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer) for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith. Accordingly, liberty is granted to the petitioner to make an application before GST Council through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith and if the petitioner s assertion is found to be correct, the GST Council shall issue necessary recommendation to the Commissioner to enable the petitioner to get the benefit of CENVAT credit within the stipulated time as stipulated by the Union of India. Petition disposed off.

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• 2020 (9) TMI 162
  Detention order - Confiscation of goods alongwith the conveyance - arecanut - Section 129 (3) of CGST Act - HELD THAT:- Until and unless the validity of the order is either upheld or quashed, no other ancillary relief can be given to the petitioners. When it is the specific contention of the Government that the goods which have been carried in conveyance is not belonging to the respondents and they are not the owners, then under such circumstances, the learned Single Judge ought not to have passed the order under Section 129 (1) (a) of the Act. A close scrutiny of Section 129 (1)(a) of the Act indicates that if the owner come forward to pay the tax payable on such goods equal to 100% of the tax payable, then Section 129 (1)(a) of the Act is attracted. But when already the appellants have passed an order under Section 129 (1)(b) of the Act, by rejecting the documents tendered by the person in charge, until and unless that order is set aside, no order can be passed under Section 129 (1)(a) of the Act. Without expressing anything on the merits of the case, the impugned order is not in consonance with the provisions of law. Firstly he has to say whether the orders passed by respondent - Government are in accordance with law or not. Then, if it is not in accordance with law, he has to set aside the same, then pass the suitable order. By keeping pending those orders, whatever order has been passed is not sustainable in law. It appears to be contrary to each other. The matter is remitted to the learned Single Judge for considering afresh all the points and to pass an order in accordance with law - Appeal allowed by way of remand.

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• 2020 (9) TMI 161
  Permission to file Form TRAN-1 - transitional credit - validity of Rule 117 of the CGST Rules - HELD THAT:- Issue decided in the case of OBELISK COMPOSITE TECHNOLOGY LLP, VERSUS UNION OF INDIA, THE SECRETARY TO THE GOVT. OF INDIA, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE [ 2019 (12) TMI 1162 - RAJASTHAN HIGH COURT] where it was held that considering the fact that the Union of India and the Finance Department have extended the period contemplated under Rule 1A of Rule 117 till 31st December, 2019, we grant liberty to the petitioner to make an application before GST Council (through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer) for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith. Accordingly, liberty is granted to the petitioner to make an application before GST Council through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith and if the petitioner s assertion is found to be correct, the GST Council shall issue necessary recommendation to the Commissioner to enable the petitioner to get the benefit of CENVAT credit within the stipulated time as stipulated by the Union of India. Petition disposed off.

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• 2020 (9) TMI 160
  Profiteering - purchase of apartment - allegation that the benefit of Input Tax Credit (ITC) not passed on - contravention of section 171 of CGST Act - penalty - HELD THAT:- The Respondent has benefited from the additional ITC to the tune of 1.99% of the total turnover in respect of the project PARKWEST-EMERALD during the period from July, 2017 to April, 2019 which he was required to pass on to the buyers of the flats of the above project by commensurately reducing the prices of the flats which he has not done and hence he has violated the provisions of Section 171 (1) of the CGST Act, 2017. Accordingly, as per the provisions of Section 171 (2) of the above Act read with Rule 133 (1) of the CGST Rules. 2017 the profiteered amount is determined as Rs. 9,67,330/- which also includes the GST on the base profiteered amount of Rs. 8,63.687/- in respect of the above project. Since, the Respondent has already passed on an amount of Rs. 31,823/- to the Applicant No. 1 which was due to him, hence, no further benefit is to be passed on to the above Applicant. These buyers are identifiable as per the documents placed on record and therefore, the Respondent is directed to pass on an amount of Rs. 9,67,330/- to the flat buyers mentioned in the above Annexure along with the interest 18% per annum in terms of Section 171 (1) read with Rule 133 (3) (b) of the above Rules from the dates from which the above amounts were collected by him from them till the payment is made, within a period of 3 months from the date of passing of this order as per the details mentioned in Annexure-21 attached with the Report dated 31.01.2020. The Respondent has also availed benefit of ITC of 3.62% of the total turnover in respect of the project PARKWEST-MAPLE during the period from July, 2017 to April, 2019 which he was required to pass on to the flat buyers of the above project which he has failed to do and hence the provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondent and thus an amount of Rs. 3,03,94,113/- inclusive of GST @ 12% on the base amount of Rs. 2,71,37,601/- is determined as the profiteered amount as per the provisions of Section 171 (2) and Rule 133 (1) - These buyers are identifiable as per the documents placed on record and therefore, the Respondent is directed to pass on the amounts of Rs. 3,03,19,184/- and Rs. 74,929/- to the other flat buyers and the Applicant No. 2 respectively along with the interest @ 18% per annum in terms of Section 171 (1) read with Rule 133 (3) (c) of the above Rules from the dates from which the above amounts were collected by him from them till the payment is made Within a period of 3 months from the date of passing of this order as per the details mentioned in Annexure-22 attached with the Report dated 31.01.2020. This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the flats of the above projects commensurate with the benefit of ITC received by him as has been detailed above. Since the present investigation is only up to 30.04.2019 any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the Respondent. The concerned Commissioner CGST/SGST shall ensure that the above benefit is passed on to the eligible flat buyers. In case the above benefit is not passed on by the Respondent the above Applicants or any other buyer shall be at liberty to approach the Karnataka State Screening Committee to initiate fresh proceedings against the Respondent as per the provisions of Section 171 of the CGST Act, 2017. Penalty - HELD THAT:- The Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his above projects in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus resorted to profiteering. Hence, he has committed an offence for violation of the provisions of Section 171 (1) during the period from 01.07.2017 to 30.04.2019 and therefore, he is apparently liable for imposition of penalty under the provisions of the above Section - However, perusal of the provisions of Section 171 (3A) under which penalty has been prescribed for the above violation shows that Section 171 (3A) has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, 2019 and it was not in operation during the period from 01.07.2017 to 30.04.2019 when the Respondent had committed the above violation and hence, the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively. Accordingly, notice for imposition of penalty is not required to be issued to the Respondent.

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• 2020 (9) TMI 159
  Profiteering - purchase of villa - allegation that benefit of ITC not passed on by way of commensurate reduction in price - contravention of section 171 of CGST Act - Penalty - HELD THAT:- It has been revealed that the Respondent has not passed on the benefit of input tax credit to his buyers w.e.f. 01.07.2017 to 30.06.2018 and hence, the Respondent has violated the provisions of Section 171 (1) of the CGST Act, 2017. Penalty - HELD THAT:- Since no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 30.06.2018 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) also cannot be imposed on the Respondent retrospectively. Accordingly, the notice dated 05.07.2019 issued to the Respondent for imposition of penalty under Section 122 (1) (i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped.

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• 2020 (9) TMI 100
  Infringement of Fundamental Rights - HELD THAT:- Petitioner agrees that the petitioner shall appear at the office of Directorate General of Goods and Service Tax at Delhi as and when called. He shall also appear before the concerned officer at Indore after forty-five days from today. Petition disposed off.

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• Income Tax

• 2020 (9) TMI 158
  Demands order passed under Section 143(1) - Set off/ adjust refund against demands for next assessment years - HELD THAT:- There was no response to the adjustment of demand by the petitioner, yet the objections had been filed in writing with the AO on 29th May, 2020 as well as online with the Centralized Processing Centre by the petitioner before the impugned order was passed. Consequently, as the impugned order dated 03rd July, 2020 has been passed under Section 143(1) of the Income Tax Act, 1961 in violation of principles of natural justice i.e. without dealing with the objections filed by the petitioner either before the Assessing Officer or before the Centralized Processing Centre, the same is set aside. The AO is directed to decide the petitioner s objections to adjustment of refund arising out of assessment year 2019-20 afresh within a period of six weeks by way of a reasoned order after giving an opportunity of hearing to the petitioner. All rights and contentions of the parties are left open. It is made clear that in the event the objections filed by the petitioner are not decided within the stipulated period, the petitioner shall be entitled to release of refund amounting to Rs. 11,23,33,263/- with applicable interest, if any, forthwith.

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• 2020 (9) TMI 157
  Allowability of transportation expenses - allowable business expenses u/s 37(1) - Disallowance u/s 40A(3) as payments made to transporters on a particular day exceeds Rs. 20,000/- - ITAT directed deletion of additions made by Assessing Officer as well as Commissioner of Income Tax (Appeals) - HELD THAT:- Tribunal has neither assigned any reasons nor has disclosed any basis for directing deletion of additions made by the assessing authority as well as Commissioner of Income Tax (Appeals) except confirming the addition of Rs. 31 Lakhs made by the assessing authority. It is also pertinent to mention here that the Tribunal has not assigned any reasons on the issues raised before it and has not given any reasons in support of its conclusion. The order passed by the Tribunal is cryptic and suffers from the vice of non application of mind. Whether Tribunal was correct in holding that the disallowance was not justified even though the same was contrary to Section 40a(ia)? - Second substantial question of law framed by a bench of this court is no longer respondent integra and is covered by a decision of the Supreme Court in Calcutta Exports Company [ 2018 (5) TMI 356 - SUPREME COURT] and the same does not require any adjudication. Therefore, the same is answered in favour of the assessee and against the revenue. Though we are conscious of the legal principle that finality has to be attached to all legal proceedings, but in the peculiar facts of the case since, factual adjudication is required so far as substantial question of law Nos.1 and 3 are concerned, which has not been done by the Income Tax Appellate Tribunal, which is the final fact finding authority, we are left with no option but to set aside the order passed by the Income Tax Appellate Tribunal insofar as it pertains to substantial questions of law No.1 and 3 and remit the matter to the Tribunal for decision afresh on issues covered by substantial question of law Nos.1 and 3. Therefore, it is not necessary for us to answer the substantial questions of law No.1 and 3.

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• 2020 (9) TMI 156
  Accrual of income - Actual oweners of income - Application of income / Diversion of Income - Addition of interest from the deposits made for and on behalf of PHRC alleging there was no obligation to pay interest to PHRC by the appellant - Tribunal not allowing the claim of interest - singular contention that the Tribunal while deciding the appeal has failed to consider the terms and conditions of the agreement and therefore, the matter be remitted to the Income Tax Appellate Tribunal for decision afresh. - HELD THAT:- It is not necessary for us to examine on merits the substantial questions of law framed by a bench of this court. Admittedly, it is the contention of the assessee that under the relevant clauses of the agreement, the interest earned on capital bond was required to be paid to Prestige Holiday Resorts Company Ltd. However, the Tribunal while passing the impugned order has failed to consider the terms and conditions of the agreement. The impugned order passed by the Income Tax Appellate Tribunal is therefore, set aside and the matter is remitted to the Tribunal for decision afresh in accordance with law pertaining to Assessment years 1997-98 to 2000-01, 2002-03 to 2004-05.

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• 2020 (9) TMI 155
  Reopening of assessment u/s 147 - Deduction u/s 80-IA - department had taken a view that the income earned by the Assessee will be treated as income from the house property and not income from the business or profession, so as to become eligible for deduction under Section 80IA - HELD THAT:- We are unable to understand as to how the department has taken such a view against the Assessee when the main object of the company is to construct, maintain and lease out of the Software Technologies Park and the main income of the Assessee was lease rentals. As perused the entire order passed by the Assessing Officer under Section 147. But, we are unable to find anything in the order as to what was the object of the assessee company etc., It shows that the Assessing Officer, without application of mind, had passed the re-assessment order, with assumption, presumption and surmise, which will not be permissible under any of the statute. We also tried to find something in statutes to support the finding of the Assessing Officer, but found none. Both the CIT(A)-VI and the Tribunal have thoroughly scrutinised the entire facts and passed the order. The original assessment order was passed by the AO after taking into consideration of all the material facts. During the course of the re-assessment proceeding also, the AO has not found any tangible material by which income has escaped from the assessment. Without any application of mind, the Assessing Officer re-opened the assessment under the pretext that income has escaped assessment and passed the reassessment order under Section 147, which is a patent error committed by the Assessing Officer. Under these circumstances, we do not find any merit in all these three appeals filed by the Revenue and the same are liable to be dismissed on the above said point also. Non-payment of interest - relevant assessment year - HELD THAT:- Assessee had paid the interest within the relevant assessment year and all these facts have been disclosed by the Assessee to the Assessing Officer. After taking into consideration all these aspects, the Assessing Officer had passed the original assessment order. Therefore, we do not find any merit in the submissions of the learned counsel on the basis that the deduction was granted without payment of any interest during the relevant financial year and hence, the appeal is liable to be dismissed well on this point also. Limitation for reopening the assessment under Section 147 - HELD THAT:- The notice under Section 148, for reopening of the assessment was issued on 17.03.2010 for the assessment year 2003-04. If at all, if the department intended to reopen the assessment under Sections 147 and 148, it should have issued the notice under Section 148 within four years from the end of the relevant assessment year. In the present case, after completion of the period i.e., on 31.03.2008, the department issued a notice under Section 148 for re-assessment. Therefore, we are of the view that the re-opening of the assessment for the assessment year 2003-04 was beyond the period of limitation - Assessee appeal allowed.

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• 2020 (9) TMI 154
  Stay petition - payment of 20% of the disputed demand - HELD THAT:- We find force in the contention of the petitioner that while passing Ext.P6 stay order, the first appellate authority was virtually acting under dictation, in that the first appellate authority felt compelled by the CBDT instructions relied upon in his order, to insist on a payment of 20% of the disputed demand, pending disposal of the appeal. When there was a specific direction in Ext.P5 judgment of this Court to the appellate authority to consider the stay application on merits, the appellate authority ought to have considered the stay application as directed by this Court, and without placing any reliance on the instructions issued by the CBDT directing the application to be decided in a particular way. It is obligatory on statutory authorities who are entrusted with quasi judicial powers under a statute, to adjudicate on issues without being bogged down by executive instructions that direct them to exercise their discretion in any particular manner. As a creature of the statute, on whom the discretionary power is conferred, the authority cannot abdicate his responsibilities by acting on the dictates of another who has no role to play under the statutory scheme. Also find force in the contention of the learned counsel for the petitioner that the appellate authority did not hear him while passing Ext.P6 stay order, and that this was a further act in contravention of the directions of this Court in Ext.P5 judgment. Quash Ext.P6 order and direct the first appellate authority to pass fresh orders in the matter after hearing the petitioner, either through a physical hearing or through video conference.

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• 2020 (9) TMI 153
  TP Adjustment - applicable rate for computing interest on outstanding receivables - interest shall be charged at LIBOR plus rate and not at the prevailing SBI Base rate as per held by the AO - HELD THAT:- As observed that the submissions of the Ld. DR and the calculations given during the hearing are not tenable as it has not considered the calculations given by the assessee before the TPO/Assessing Officer/DRP. Calculations given by the Ld. DR at this juncture will not appropriate as the case of the assessee is regarding outstanding receivables and the principal of Techbooks International [ 2020 (7) TMI 620 - ITAT DELHI ] will not apply in the present case. In this present assessment, the assessee has given all the details which was reproduced by the Transfer Pricing Officer (TPO) it its order and without discussing calculations and the evidences produced by the assessee, simplicitor made adjustment. There was no contrary facts given by the TPO in consonance with the evidence produced by the assessee before the TPO. Calculation given by the DR in his submissions is not in-consonance with the actual figures and the calculations considered by the TPO as well as the DRP at the time of assessment proceedings. The facts of the assessee s case are identical in the present year to that of A.Y. 2010-11 which is already decided by the Hon ble Delhi High Court [2017 (4) TMI 1254 - DELHI HIGH COURT] in assessee s favour. No distinguishing facts were pointed out by the Ld. DR. - Decided in favour of assessee.

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• 2020 (9) TMI 152
  Penalty u/s 271(1)(b) - failure to comply with notices issued under section 142(1) at the assessment proceedings - as submitted that the A.O. in the assessment orders in absence of assessee passed the ex- parte Orders under section 153A/144 and determined the income of assessee on estimate basis - HELD THAT:- Assessee was prevented by sufficient cause in not filing the appeals within the period of limitation and assessee has a bonafide explanation for not filing the appeals within the period of limitation and further for substantial cause of justice, when additions stand deleted by the Ld. CIT(A), penalty is not leviable. Even if assessee may not be strictly able to support the explanation for condonation of delay, we are of the view that for taking a pragmatic view in the facts and circumstances explained above, the delay shall have to be condoned. In view of the above, we condone the delay in filing the appeals before the Tribunal in all the above years. Since the additions on merit have already been deleted by the Ld. CIT(A) and no further appeals are pending as per contention of the Ld. D.R. on merit, therefore, there may not be a default on the part of the assessee and at best it could be considered as a technical default, for which, in our view, penalty should not be levied by the authorities below for failure to comply with the notices under section 142(1) - We set aside the Orders of the authorities below and cancel the penalty under section 271(1)(b) - Decided in favour of assessee.

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• 2020 (9) TMI 151
  Assessment u/s 153A - assessment against a non-existing entity/person - HELD THAT:- The framing of an assessment against a non-existing entity/person goes to the root of the matter, which is not a procedural irregularity, but a jurisdictional defect as there cannot be any assessment against a dead person. A similar view has been expressed by the Hon ble Karnataka High Court in the case of Intel Technology India Pvt. Ltd. [2015 (5) TMI 614 - KARNATAKA HIGH COURT] where it was held that framing of an assessment on a non-existing entity or a person is not a procedural irregularity but a jurisdictional defect, which cannot be cured by invoking the provisions of section 292B of the Act. In this case, there is no doubt of whatsoever with regard to the fact that the firm M/s. R.R. Gold Palace was not existent at the time of search and even at the time of framing assessment u/s 143(3) r.w.s. 153A of the Act. The assessee has informed the A.O. the fact of non-existence of the firm by way of a letter dated 14.8.2014 when the A.O. issued notice u/s 153A of the Act in the name of the assessee for filing return of income and opposed issuance of notice on non-existing entity. Although the assessee has filed return in response to notice issued u/s 153A of the Act, but such return has been filed under protest in order to comply with statutory provisions of the Act. Therefore, we are of the considered view that the firm was not in existence and was ceased to exist on the date of search and mere holding a PAN does not alter the legal position that the firm was not in existence and accordingly, the assessment framed u/s 143(3) r.w.s. 153A of the Act is void and ab initio. CIT(A) after considering the relevant facts has rightly quashed assessment order passed by the A.O. as null and void. We do not find any error or infirmity in the order of the CIT(A) and hence, we are inclined to uphold the findings of the CIT(A) and dismiss the appeal filed by the revenue.

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• 2020 (9) TMI 150
  Addition u/s 68 - assessee could not discharge the onus cast upon him to prove the genuineness of the transactions, identity of the creditors and also creditworthiness of the loan creditors - HELD THAT:- In the original assessment proceedings also, the assessee could not substantiate the identity, creditworthiness and genuineness of the transactions. As observed from the loan confirmations that the assessee has not provided complete address so that the revenue officers can make correspondence with the loan creditors. The address provided is incomplete like house no. street, area etc. has not been given creditworthiness of the loan creditors and genuineness of the transactions was also not proved and the entire loan was received in cash below Rs. 20,000/- by the assessee. Even the PAN number is also not provided in many cases. Merely submission of confirmations from loan creditors is not sufficient, it is also noticed that it is incomplete also as observed above. - Decided against assessee.

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• 2020 (9) TMI 149
  Revision u/s 263 - Pr.CIT cannot exercise his jurisdictional power u/s.263 if the assessee s appeal is pending before the CIT(A) - HELD THAT:- As relying on ACC LIMITED, CEMENT [ 2020 (7) TMI 369 - ITAT MUMBAI ] Pr.CIT cannot exercise his jurisdiction if the issue was a subject matter of an appeal before the CIT(A), hence, the ld. Pr.CIT is not justified in directing the AO to modify the assessment order and accordingly, we quash the order passed by the Pr.CIT u/s.263 of the Act. Thus, the ground raised by the assessee is allowed.

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• 2020 (9) TMI 148
  Levy of late filing fee u/s 234E - legality of intimations / orders passed u/s 200A levying fee u/s 234E for late filing of TDS/TCS returns / statements, prior to the amendments made by Finance Act 2015 w.e.f. 01.06.2015 - Scope of amendments in sec 200A - Whether fee u/s 234E is not leviable before 01.06.2015, i.e., the date when clause (c) was inserted in section 200A(1) for the computation of the said fees at the time of processing? - HELD THAT:- No doubt the provisions of section 234 E have been held to be constitutionally valid which is not the dispute before us. So far as the argument of Ld. DR on rule of consistency is concerned, the same in our opinion is not absolute but in the present case we are faced with a situation which has been considered by our coordinate benches and there is no subsequent development to depart there from. Moreover, our coordinate Benches have followed one approach in view of conflicting decision of different High Courts in the absence of any decision of the Jurisdictional High Court. So far as the levy of fee u/s. 234E for defaults of period in filing TDS/TCS statements / returns even for the period prior to 1.06.2015 is concerned, as mentioned earlier there are conflicting decisions by different High Courts and there is no decision on this issue by the jurisdictional High Court. While Hon ble Karnataka High Court is in favour of the assessee holding that the amendments brought in statute w.e.f. 01.06.2015 are prospective in nature and hence notices issued u/s. 200 A of the Act for computation and intimation in payment of late filing fee u/s.234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable, the Hon ble Gujarat High Court has decided the issue against the assessee and in favour of the revenue. After considering the above conflicting decisions, the coordinate benches of the Tribunal are taking the view that when there are conflicting decisions, the decision in favour of the assessee should be followed in the light of decision of Hon ble Supreme Court in the case of Vegetables Products Limited [ 1973 (1) TMI 1 - SUPREME COURT] CIT(A) is not justified in confirming the late fee levied by the AO u/s. 200 A r.w.s. 234 E since the defaults are prior to 1.06.2015. Accordingly we set aside the order of the Ld. CIT(A) and the fee levied u/s. 234 E and interest there on u/s. 220 (2) is directed to be deleted. - Decided in favour of assessee.

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• 2020 (9) TMI 147
  Levy of late filing fee u/s 234E and interest u/s 220(2) - Late filing of TDS returns / statemetn - fee u/s 234E before 01.06.2015, i.e., the date when clause (c) was inserted in section 200A(1) for the computation of the said fees at the time of processing - scope of amendment - conflicting decisions on issue - HELD THAT:- No doubt the provisions of section 234 E have been held to be constitutionally valid which is not the dispute before us. So far as the argument of Ld. DR on rule of consistency is concerned, the same in our opinion is not absolute but in the present case we are faced with a situation which has been considered by our coordinate benches and there is no subsequent development to depart there from. Moreover, our coordinate Benches have followed one approach in view of conflicting decision of different High Courts in the absence of any decision of the Jurisdictional High Court. So far as the levy of fee u/s. 234E for defaults of period in filing TDS/TCS statements / returns even for the period prior to 1.06.2015 is concerned, as mentioned earlier there are conflicting decisions by different High Courts and there is no decision on this issue by the jurisdictional High Court. While Hon ble Karnataka High Court is in favour of the assessee holding that the amendments brought in statute w.e.f. 01.06.2015 are prospective in nature and hence notices issued u/s. 200 A of the Act for computation and intimation in payment of late filing fee u/s.234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable, the Hon ble Gujarat High Court has decided the issue against the assessee and in favour of the revenue. After considering the above conflicting decisions, the coordinate benches of the Tribunal are taking the view that when there are conflicting decisions, the decision in favour of the assessee should be followed in the light of decision of Hon ble Supreme Court in the case of Vegetables Products Limited [ 1973 (1) TMI 1 - SUPREME COURT] No justification in confirming the late fee levied by the AO u/s. 200 A r.w.s. 234 E since the defaults are prior to 1.06.2015. Accordingly we set aside the order of the Ld. CIT(A) and the fee levied u/s. 234 E and interest there on u/s. 220 (2) is directed to be deleted. - Decided in favour of assessee.

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• 2020 (9) TMI 146
  Late filing fee u/s 234E - Late filing of TDS returns / statement - intimations / orders passed u/s 200A - diversified views - conflicting decisions - contention of the assessee that fee u/s 234E is not leviable before 01.06.2015, i.e., the date when clause (c) was inserted in section 200A(1) for the computation of the said fees at the time of processing - scope of amendment - HELD THAT:- No doubt the provisions of section 234 E have been held to be constitutionally valid which is not the dispute before us. So far as the argument of Ld. DR on rule of consistency is concerned, the same in our opinion is not absolute but in the present case we are faced with a situation which has been considered by our coordinate benches and there is no subsequent development to depart there from. Moreover, our coordinate Benches have followed one approach in view of conflicting decision of different High Courts in the absence of any decision of the Jurisdictional High Court. So far as the levy of fee u/s. 234E for defaults of period in filing TDS/TCS statements / returns even for the period prior to 1.06.2015 is concerned, as mentioned earlier there are conflicting decisions by different High Courts and there is no decision on this issue by the jurisdictional High Court. While Hon ble Karnataka High Court is in favour of the assessee holding that the amendments brought in statute w.e.f. 01.06.2015 are prospective in nature and hence notices issued u/s. 200 A of the Act for computation and intimation in payment of late filing fee u/s.234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable, the Hon ble Gujarat High Court has decided the issue against the assessee and in favour of the revenue. After considering the above conflicting decisions, the coordinate benches of the Tribunal are taking the view that when there are conflicting decisions, the decision in favour of the assessee should be followed in the light of decision of Hon ble Supreme Court in the case of Vegetables Products Limited [ 1973 (1) TMI 1 - SUPREME COURT] CIT(A) is not justified in confirming the late fee levied by the AO u/s. 200 A r.w.s. 234 E since the defaults are prior to 1.06.2015. Accordingly we set aside the order of the Ld. CIT(A) and the fee levied u/s. 234 E and interest there on u/s. 220 (2) is directed to be deleted. - Decided in favour of assessee.

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• 2020 (9) TMI 145
  Disallowance of bogus liabilities - assessee has failed to bring any evidence on record to support his claim to prove the nature of liabilities, party names, etc. - unascertained trade liabilities - Revenue contended that the deletion has been made by the ld. CIT (A) without providing an opportunity of being heard to the AO for verifying the submissions made by the ld. AR for the assessee - HELD THAT:- CIT(A) has neither himself examined the documents nor he has got the same verified from the AO by calling remand report rather accepted the contention of the ld. AR for the assessee as a gospel truth and proceeded to delete the addition. So, we agree with the contentions raised by the Revenue that the deletion has been made without giving an opportunity of being heard to the AO for verifying the submissions/evidence filed by the assessee. So, in these circumstances, we deem it necessary to remit the issue back to the ld. CIT (A) to decide afresh in accordance with law after providing an opportunity of being heard to the assessee as well as AO, hence ground no.1 of AY 2012-13 is determined in favour of the Revenue for statistical purposes. Disallowance @ 25% on account of bogus expenditure claimed under the head bogus liabilities - Addition no supporting voucher/evidence has been produced by the assessee - HELD THAT:- Bare perusal of the findings returned by the ld. CIT (A) goes to prove that disallowance @ 25% made by the AO has been restricted to 10% merely on the basis of whims and fancies and without perusing any record. No doubt, disallowance has been made by the AO also purely on ad hoc basis but on failure of the assessee to support the claim with any voucher/evidence. In these circumstances, the ld. CIT (A) was not expected to restrict the disallowance to 10% also on ad hoc basis. So, we deem it necessary to set aside the issue to the ld. CIT (A) to decide afresh in accordance with the law by providing opportunity of being heard to the parties. So, ground no.2 of AYs 2012-13 2014-15 is determined in favour of the assessee for statistical purposes.

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• 2020 (9) TMI 144
  Levy of penalty u/s 271AAA - Defective notice - income voluntarily disclosed income u/s 132(4) - tax due on the additional income was also paid by the appellant - HELD THAT:- Finding of the assessing officer cannot be sustained in view of the binding precedence coupled with the facts that the notice initiating penalty u/s 271AAA is not in accordance with law. Moreover, the Assessing Officer has not confronted the assessee to substantiate the manner in which the additional income was earned in the absence of such query. It cannot be inferred that the assessee failed to substantiate the manner which additional income was earned. We, therefore, direct the Assessing Officer to delete the penalty. - Decided in favour of assessee.

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• 2020 (9) TMI 143
  Levy of late filing fee u/s 234E - intimation issued under section 200A of the Act and / or order passed under section 154 of the Act in charging late fees payable under section 234E - charging of fees payable u/s 234E prior to amendment to section 200A(1)(c) of the Act vide Finance Act, 2015 w.e.f. 01.06.2015, while processing the TDS returns - whether where the return for the TDS deduction was filed under respective sections of the Act, for the period prior to 01.06.2015 though belatedly, but no late filing fee can be charged under section 234E of the Act - amendment brought in by the Finance Act, 2015 w.e.f. 01.06.2015 by way of insertion of clause (c) to section 200A(1) of the Act is clarificatory or is prospective in nature and is not applicable to the pending assessments? HELD THAT:- Undoubtedly, the provisions of section 234E were inserted by the Finance Act, 2012, under which the liability was imposed upon the deductor in such cases where TDS statements / returns were filed belatedly to pay the fees as per said section. The amendment was brought in by the Finance Act, 2015 w.e.f. 01.06.2015 and such an amendment where empowerment is given to the Assessing Officer to levy or charge the fees cannot be said to be clarificatory in nature and hence, applicable for pending assessments. The Hon ble Supreme Court in CIT Vs. Vatika Township Pvt. Ltd. [ 2014 (9) TMI 576 - SUPREME COURT] has explained the general principle concerning retrospectivity and have held that of the various rules guiding how a legislation has to be interpreted, one established rule is that unless contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. Idea behind the rule is that current law should govern current activities . It cannot be said that insertion made by section 200A(1)(c) of the Act is retrospective in nature, where the Legislature was aware that the fees could be charged under section 234E of the Act as per Finance Act, 2012 and also the provisions of section 200A of the Act were inserted by Finance (No.2) Act, 2009, under which the machinery was provided for the Assessing Officer to process the TDS statements filed by the assessee. The insertion categorically being made w.e.f. 01.06.2015 lays down that the said amendment is prospective in nature and cannot be applied to processing of TDS returns / statements prior to 01.06.2015.We also find support from the decision in Sri Fatheraj Singhvi Ors [2016 (9) TMI 964 - KARNATAKA HIGH COURT] wherein the Hon ble Court had quashed the intimation issued under section 200A of the Act levying the fees for delayed filing of the TDS statements under section 234E - intimation raising demand prior to 01.06.2015 under section 200A of the Act levying section 234E of the Act late fees is not valid. The provision under which a new enabling power is being given to charge fees under section 234E of the Act while processing TDS returns / statements and such power is to be applied prospectively. In any case, the Parliament itself has recognized its operation to be prospective in nature while introducing clause (c) to section 200A(1) of the Act and hence, cannot be applied retrospectively. Amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. - Decided in favour of assessee.

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• 2020 (9) TMI 142
  Reopening of assessment u/s 147 - notice on the deceased assessee - HELD THAT:- We find that there is no subsequent notice u/s 148 which was issued by the AO on the legal heirs of the deceased assessee and therefore, the provisions of section 159 cannot be invoked in the instant case. In any case, the limitation for issue of notice u/s 148 had expired on 31.03.2016 and beyond such limitation period, no notice can be issued in the name of the legal Heirs. It is a settled legal proposition that the notice issued u/s 148 in the name of the deceased assessee is a nullity in the eyes of law. Consequently, the present reassessment proceedings initiated by issuance of notice in the name of the deceased assessee and consequent reassessment proceedings is hereby quashed for want of jurisdiction - See LATE SHRI BHURA RAM VERSUS THE ITO WARD 7 (2) , JAIPUR [ 2019 (12) TMI 1101 - ITAT JAIPUR] When the notice issued under section 148 against the deceased person as well as the assessment framed by the AO in the name of the deceased assessee then the impugned assessment order passed by the AO is invalid for want of valid notice as well as the assessment framed against the dead person. - Decided in favour of assessee.

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• 2020 (9) TMI 141
  Disallowance u/s 14A - Assessee reported dividend income as exempted under section 10(34) of the Act and made sumo disallowance against the said exempt income - HELD THAT:- In view of decision MAXOPP INVESTMENT LTD. [ 2018 (3) TMI 805 - SUPREME COURT] operation of the Rule 8D of the Rules , the action of the Assessing Officer of invoking Rule 8D of Income-tax Rules in the year under consideration (i.e. assessment year 2007-08), is not justified. Expenditure on assets which may yield exempt income as well as taxable income, need to be apportioned towards both the exempted and non-exempted income. Certain interest expenditure towards investment in mutual fund clearly needs to be disallowed, which the assessee has not considered in its suo-motu disallowance. No such breakup of proportionate expenses towards exempted and non-exempted income from investment in mutual funds has been provided either lower authorities or before us. In absence of any such working provided by the assessee, it is not possible for us to quantify the proportionate disallowance out of the interest expenditure incurred for investment in Mutual funds. Hon ble Delhi High Court in the case of Joint Investment Company Private Limited [ 2015 (3) TMI 155 - DELHI HIGH COURT] has restricted the disallowance under section 14A to the extent of the exempted income. Following the finding above CIT(A) has restricted the disallowance u/s 14A of the Act in the case of the assessee to the extent of excepted income. Deemed dividend u/s 2(22)(e) - CIT- A deleted the addition - HELD THAT:- It is undisputed that assessee is not a shareholder in RSL from which it has obtained a loan. The addition of deemed dividend can be made only in the hand of the shareholders and not otherwise. Thus, we do not find any infirmity in the finding of the Ld. CIT(A), where he has followed binding precedent of ANKITECH PVT LTD. OTHERS [ 2011 (5) TMI 325 - DELHI HIGH COURT] . Accordingly, the finding of the Learned CIT(A) on the issue in dispute is upheld. The ground of the appeal of the Revenue is accordingly dismissed. Disallowance of expenses on Stock Appreciation Right (SAR) written off - HELD THAT:- The issue-in-dispute of SAR expenses as revenue in nature is covered in favour of the assessee. Respectfully following the decisions of own case [2017 (5) TMI 59 - ITAT DELHI] and M/S. RELIGARE SECURITIES LTD. [ 2018 (3) TMI 1529 - DELHI HIGH COURT] we set aside the order of the learned CIT(A) and delete the addition of Rs. 50,29,087/- on the issue. The grounds of the appeal are accordingly allowed. Computation of disallowance under section 14A of the Act read with rule 8D - HELD THAT:- Before the Ld AO, the assessee made disallowance according to its own method of disallowance , which was not accepted by the Ld AO and invoked the Rule 8D of the Rules. In our opinion, when he rejected the disallowance computed by the assessee, that in itself is dissatisfaction with the claim of the assessee of disallowance. It is not necessary that such dissatisfaction has to be recorded in explicit words, when the it is evident from the implied action of the Assessing Officer. Accordingly, we dismiss the plea of the assessee that dissatisfaction was not recorded by the Assessing Officer while invoking the Rule 8D of Rules.Accordingly, we reject the grounds raised by the assessee challenging the disallowance sustained by the Ld. CIT(A). As far as grounds of Revenue is concerned, in our opinion, the action of the Ld. CIT(A) in following the decision of the jurisdictional High Court is in accordance with law and we do not find any error in the same. Accordingly, we also reject the grounds raised by the Revenue challenging the disallowance under section 14A of the Act deleted by Ld CIT(A). Disallowance on account of provision for expenses - HELD THAT:- Provisions of stock appreciation right (SAR) for which separate addition was also made by the Assessing Officer has been deleted in view of the issue covered in the favour of the assessee by the decision of the Coordinate bench of the Tribunal in and the Hon ble High Court. Therefore, in our opinion making further addition on the ground of unascertained liability is not justified. Provision made for leave travel allowance -The assessee has not provided any justification as how the estimate of Rs. 45,48,172/- was made for leave travel allowance of the employees, whereas actually amount paid to the employees was only of the Rs. 24,24,401/-. In view of the facts, we agree with the finding of the Ld. CIT(A) in disallowing the excess provision made by the assessee. Similarly, we agree with the finding of the Ld. CIT(A) in respect of the provision for medical reimbursement and other allowances. The alternative request of the assessee to delete the addition on the ground that the assessee has offered the same for tax in subsequent assessment year, is also rejected because the issue in dispute is to be decided in accordance with law and not according to the choice of the assessee when he offer for tax. However, the assessee is at liberty to make request for rectification in the subsequent assessment year in accordance with law. The ground No. 1 of the appeal of the Revenue is accordingly dismissed and the additional ground No.4 of the appeal of the assessee is also dismissed.

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• 2020 (9) TMI 140
  Exemption u/s 11 - entitlement for registration u/s 12AA rejected - income/funds of the society have been diverted for the benefit of interested parties i.e. the members and not for the charitable activities for public at large and attract proviso to section 13(1)(c) - CIT(E) has rejected the application purely on the ground that certain payments on account of salary, vehicle rent, house rent were made by the assessee society to the specified persons - HELD THAT:- There is no prohibition under the law to hire services of related persons. But under the guise of hiring services the funds of society should not be diverted. It would be incumbent upon the Ld. CIT(E), while considering the application for registration under section 12AA of the Act to make such enquiries to satisfy himself regarding genuineness of activity of the trust, whether the activity so carried out are as per objective of trust and such activity is in conformity with provision of law. In the case in hand ld. CIT(E) had not given any finding regarding activity of the society. Benefit of section 11 12 would not be available if any part of such income or any property of the trust or the institution (whenever created or established) is during the previous year used or applied directly indirectly for the benefit of any person referred to sub-section (3) of section 13 of the Act. It is therefore, can be safely construed that where the revenue authority finds that during the previous year, the assessee has applied any part of its income or any property of the trust or the institution directly or indirectly for the benefit of any person referred to in sub-section (3). It can decline the assessee society benefit of section 11 12 of the Act Considering the submissions of the assessee material placed on record and respectfully following the decision of MODERN DEFENCE SHIKSHAN SANSTHAN [ 2007 (2) TMI 255 - ITAT JODHPUR] . We set aside the impugned order of Ld. CIT(E) and restore the application for seeking registration u/s 12AA to the file of Ld. CIT(E) considered in the light of the case laws as relied by the assessee. Appeal filed by the assessee is allowed for statistical purposes.

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• Customs

• 2020 (9) TMI 139
  Seeking levy of Anti Dumping Duty - Designated Authority (DA) terminated the investigation, on the ground that appellant failed to prove any injury to Domestic industries - HC directed the DA to initiate investigation - Contempt proceedings initiated against the DA for failure to make necessary inquiry / investigation - HC has also issued directions for replacement of DA - normal Butanol or N-butyl alcohol - scope of the term like article - Rule 14(b) of the Rules of 1995. HELD THAT:- Section 9A of the Customs Tariff Act and the procedure prescribed by the Rules of 1995, clearly disclose an intent that investigations should be completed within pre-determined time limits and the levy itself (which can be specific to foreign exporter or country or combination of both-) cannot be more than five years which may, after due review in accordance with prescribed procedure, before expiry of the said period, be extended by another period not more than five years. These timelines are crucial; the DA is duty bound to follow them. The analysis of the particular market behaviour by the allegedly offending foreign exporters, involves sifting of a great deal of evidence, such as manufacturing capacity, financial abilities, overall capacity of the country in the like field, prices, and the margin of acceptable delinquent behaviour, as well as domestic capacity, efficiency, etc, while determining if an injury exists, the margin of such injury and its likely duration. Keeping the imperative of completion of investigation within a pre-determined timeline, the guidelines contained in the Manual of Operation for Trade Remedy Investigations (Period of Investigation and Injury Investigation period) as to the contemporaneousness of the data necessary to carry out the investigation, assume importance - The rationale for these guidelines is self-evident: any investigation carried out for past periods would in all likelihood, result in minimal levy. For instance, if in 2020, investigation is initiated for the period 2013-14, with the object of determining anti-dumping, even if injurious behavior is found, the levy can be only of limited duration. Further, to levy duty for the period after findings are rendered, the POI would yield stale results, and cannot justify levy for later periods. Keeping this in mind, the DA, apparently in the present case, having regard to Para 5.9 required Andhra Petro to furnish relatively contemporary data. Such an action cannot be termed as arbitrary. In this court s opinion, the impugned orders were plainly erroneous in chastising the DA, and even directing his replacement, for what appears to be his adherence to prescribed procedure. Access to judicial review is a valuable right conferred upon citizens and persons aggrieved; the Constitution arms the High Courts and this court with powers under Articles 226 and 32. At the same time, barring exceptional features necessitating intervention in an ongoing investigation triggered by a complaint by the concerned domestic industry, judicial review should not be exercised virtually as a continuous oversight of the DA s functions. This court has cautioned more than once, that judicial review is to be exercised in a circumspect manner, especially where final findings are rendered by the DA. This court is of the opinion that the impugned orders issuing specific directions for anti-dumping investigation into articles imported from EU, the order, initiating contempt proceedings against the DA and order for replacement of DA have to be set aside - appeal allowed.

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• 2020 (9) TMI 138
  Retention of goods after arriving at Port - Dispute in title of goods - the petitioner herein lodged their contentions and contended that the goods should not be released to the second respondent herein - section 49 of CA - HELD THAT:- The second respondent herein was the original importer. It is true that certain documents had been enclosed by the petitioner in the typed set of papers. It is noted that all the original documents are only with the second respondent. The learned Standing counsel submitted that as per Section 49 of the Customs Act 1962, the Customs authority cannot retain the goods beyond a period of 60 days. The Customs authorities are not concerned with the civil claims which the petitioner may have against the foreign exporter. As far as the first respondent is concerned, they have no difficulty in releasing the goods to the second respondent, as the second respondent has complied with all the formalities. The petitioner probably has been given a short shrift by the foreign exporter. It is quite possible that the petitioner has been misled by the foreign exporter. But then, that cannot be a ground for directing the first respondent to retain the goods. The first respondent cannot retain the goods, till the issue is decided by the civil Court. The petitioner cannot have any claim against the respondents. It is seen that there was transaction only between the petitioner and the foreign exporter. The foreign exporter is not before this Court. Petition dismissed.

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• 2020 (9) TMI 137
  Provisional release of goods - Used Rubber Tyre Cut in Two Pieces - misdeclaration of the imported goods - restricted goods or not - allegation that the importer has mis-declared the cargo in order to circumvent the import restriction imposed by the extant Foreign Trade Policy - Section 110A of the Customs Act, 1962 - HELD THAT:- While the petitioners would claim that the import is free, the original stand of the respondents was that it is restricted. In other words, when the seizure took place, the debate centered on the question whether the import is restricted or free and nothing else. A mere look at the seizure mahazar would indicate that it was not the stand of the respondents that the import of the goods in question is prohibited. In the written arguments filed by the learned standing counsel, it has been mentioned that though the petitioners claim that the imported used tyres are with two cuts in the bead wires, an inspection by the authorities, it was found that the said imported used tyres are without any cuts. The contention that the imports have been made without authorisation/license from DGFT has been reiterated in the written arguments. If that be so, the question is whether the request for provisional release of the goods can be opposed. The 2016 Rules contain as many as 8 schedules. Schedule 3 is in two parts. Part A contains a list of hazardous wastes applicable for import and export with prior informed consent. Part B contains the list of other wastes applicable for import and export and not requiring prior informed consent. Schedule VI sets out hazardous and other wastes prohibited for import. It is not the case of the respondents that the imported goods in the case on hand fall under Schedule VI. Once the application of the Schedule VI of the 2016 Rules is ruled out, the only question is whether the import of the goods is free or restricted. Under either case, in view of the decision of the Hon ble Supreme Court in Atul Automations [ 2019 (1) TMI 1324 - SUPREME COURT] , provisional release is very much permissible. The petitioners are entitled to provisional release of the goods under Section 110A of the Customs Act, 1962 - Petition allowed.

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• 2020 (9) TMI 136
  Jurisdiction - power to issue SCN - violation of the Foreign Trade Policy or misuse of SFIS scheme or of SFIS credits or not? - HELD THAT:- The respondents have the power, jurisdiction and authority to issue the aforesaid show cause notice for the alleged breach of Foreign Trade Policy and wrongly availing the benefits under Served from India Scheme (SFIS) The objections articulated by learned counsel for the petitioner are of a nature which can be taken before the authorities, and do not call for a departure from the general principle that a writ petition will not be entertained against issuance of a show cause notice. As the show cause notice is yet to be decided or adjudicated upon by the concerned respondents authorities, we are not expressing any opinion on the merits of the case. The petitioner has to give reply of the show cause notice to the concerned respondent authorities and if the respondents decide any issue against the petitioner, the petitioner is not remediless. This is a premature writ petition - petition dismissed.

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• 2020 (9) TMI 135
  Revocation of CHA License - forfeiture of security deposit - imposition of penalty - HELD THAT:- The issue raised in the present appeal is squarely covered by the decision of a Coordinate Bench of this Court in KVS CARGO VERSUS COMMISSIONER OF CUS. (GENERAL) , NCH, NEW DELHI [ 2019 (4) TMI 398 - DELHI HIGH COURT] . He has no objection to the present appeal being disposed of today itself. The present appeal cannot be entertained and is dismissed.

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• 2020 (9) TMI 134
  Absolute Confiscation - Gold - old and used Mobile Phone - Indian Currency - Claim of innocence and bonafide - cross-examination of witnesses - Section 108 of the Customs Act, 1962 - HELD THAT:- The authorities below proceeded on the basis of assumption of recovery of gold from the possession of the appellant. The appellant wanted cross-examination of the witnesses named in the BSF Seizure Memo, which has not been granted. The factum of recovery as has been mentioned in the BSF Seizure Memo and the statement of the appellant contained in the said Memo has been disputed by the appellant. Before the Customs Authority while giving statement under Section 108 of the Customs Act, 1962, the appellant in his statements dated 04-04-2016 and 05-04-2016 repeatedly stated that he is not involved in any illegal smuggling activity. He did not know any person whose names are appearing in the BSF Seizure Memo. Recovery of the gold from the appellant has not been proved and hence, he was not required to discharge the burden under Section 123 of the Customs Act, 1962. As there is no claimant of the gold, the confiscation of gold handed over by the BSF Personnel to the Customs Authority is justified. Regarding seizure and confiscation of Mobile Phone and Indian currency, since the illegal importation of gold by the appellant has not been proved, the confiscation of the said old and used Mobile Phone valued at Rs. 200/- and Indian currency of Rs. 6,000/- cannot be made. Adjudicating Authority proceeded on the basis of probability that the Indian currency may be the advance received for smuggling of gold. The learned Commissioner did not give any finding on this point but upheld the confiscation - Appeal allowed - decided in favor of appellant.

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• 2020 (9) TMI 133
  Provisional assessment - onerous condition of furnishing 100% bank guarantee on the Appellant for the differential duty amount - Classification of imported goods - carbonated fruit drinks such as Big Cola, Big Orange Cola, Big-lemon and other similar products - whether classifiable under Tariff Item 2202 99 20 of the Customs Tariff Act, 1975? - applicability of Sl.No.48 under schedule 2 as Fruit Pulp or Fruit Juice based drinks in Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017 - HELD THAT:- The Appellant s products are seasonal and competitive in market. As pointed out by the counsel for the Appellant, already substantial part of the season has been lost by the appellant due to the inability to comply with the conditions of provisional assessment put forth by the department, particularly the furnishing of 100% Bank Guarantee. Once the assessment of the identical products has already been decided by the Commissioner (Appeals) in favour of the appellant vide the OIA dated 08.06.2020, I see no justification in ordering to furnish 100% Bank Guarantee. Revenue is directed to allow the import of consignments of the Appellant without insisting on any Bank Guarantee with immediate effect. The respondent Revenue is expected to adhere to this order in letter and spirit, without causing any further loss of business to the Appellant - appellants shall be permitted to release the goods on condition of their executing Indemnity Bond agreeing and undertaking to pay the amount of differential duty as may be imposed on them by the Customs authorities while making the final assessment, instead of bank guarantee. Appeal allowed.

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• 2020 (9) TMI 132
  Rectification of mistake - mistake apparent on the record or not - charges under Regulation 10(d) of CBLR mainly based on statements placed on record - HELD THAT:- It has emerged that there is no statement which has not been supplied to the appellant and the charges made in para 7.2 of the Show Cause Notice is not based on any statement. It was presumed by appellants and this Court at the time of earlier decision that charge in para 7.2 of Show Cause Notice is based on statement. Since remand has been made with direction to to decide after supplying a copy of a non existing statement, it cannot be implemented as it is. It is seen that the order states that the only evidence that might exist in the favour of Revenue could be in the non existing statement which appellant and Tribunal assumed to be existing. The order already observes that there is no evidence to support the charge made under Regulation 10(d) of CBLR, 2018 except for this non existing statement. Therefore, there is clearly an apparent mistake in the order. Moreover, the order in the present form cannot be acted upon as there is no statement that can be provided to the applicant. ROM application allowed.

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• Corporate Laws

• 2020 (9) TMI 131
  Initiation of Inquiry - case of the respondents is that the inquiry or investigation under Section 212 of the Act, will in no way affect the functioning of the company or its employees and its reputation, as contended by the petitioner - company. Whether the inquiry initiated by the Central Government and the report dated 24.02.2020 submitted by the 5th respondent - Registrar of Companies, is in conformity with Section 206(4) of the Act? - HELD THAT:- Since the petitioner submitted a detailed reply dated 03.02.2020, and it has also invited an order of this court dated 14.02.2020 in W.P.No.3143 of 2020, directing the respondents to proceed with the inquiry under Section 206(1) of the Act by duly taking into consideration the explanation submitted by the petitioner - company on 03.02.2020, and the 5th respondent in compliance with the directions of this court submitted inquiry report under Section 208 by duly considering the detailed reply submitted by the petitioner; the said report cannot be challenged on the ground of denial of opportunity of being heard, or procedure envisaged under Section 206(4) is not followed - the issue is answered in the affirmative, in favour of the respondents. Whether the opinion formed by the 2nd respondent for ordering investigation into the affairs of the petitioner - company, is in consonance with Section 212(1) (a) and ( c ) of the Act? - HELD THAT:- The 5th respondent initiated inquiry under Section 206 of the Act and issued notices and the petitioner also filed a detailed reply dated 03.02.2020 and at during that stage, the 2nd respondent vide order dated 10.01.2020 directed the 5th respondent to conduct full-fledged inquiry under Section 206(4) of the Act and submit report. And this court vide order dated 14.02.2020 directed the respondents to conclude the inquiry under Section 206(1) of the Act by duly taking into consideration the reply submitted by the petitioner on 03.02.2020. Accordingly, the 5th respondent, by considering the reply of the petitioner dated 03.02.2020, concluded the inquiry under Section 206(4) of the Act and submitted report dated 24.02.2020, and this court, while considering the first issue, held that initiation of inquiry by Central Government and report submitted by 5th respondent are in conformity with sub-section (4) of Section 206 of the Act. The said report formed the basis for passing the impugned order dated 27.02.2020, ordering investigation by SFIO into the affairs of the company, and the investigation is also ordered in public interest. There are prima facie circumstances justifying the action taken by the 2nd respondent in forming opinion with regard to necessity for ordering investigation into the affairs of by the company by SFIO, as large public interest is involved - issue is answered in the affirmative. Petition dismissed.

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• 2020 (9) TMI 130
  Proceedings in NCLT - part physical and part virtual hearing - Maintainability of application - infringement of Fundamental Rights - learned Single Judge declined to entertain the writ application essentially on the ground that none of the fundamental rights or any legal rights of the appellant herein could be said to have been infringed by the NCLT in adopting a particular mode of hearing - the learned Single Judge rejected the writ application by imposing costs of Rs. 10,000/-. Whether the learned Single Judge committed any error in rejecting the writ application? HELD THAT:- The Supreme Court in UNION OF INDIA VERSUS DEBTS RECOVERY TRIBUNAL BAR ASSOCIATION [ 2013 (2) TMI 381 - SUPREME COURT] has held that Article 227 of the Constitution stipulates that every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction. This power of superintendence also extends to the administrative functioning of these courts and tribunals - It is expected that all the High Courts shall keep a close watch on the functioning of DRTs and DRATs, which fall within their respective jurisdictions. The High Courts shall ensure a smooth, efficient and transparent working of the said Tribunals. It would have been appropriate in the larger interest of justice for the learned Single Judge to dispose of the petition by issuing appropriate directions in exercise of power under Article 227 of the Constitution rather than outright rejecting the writ application and that too with costs of Rs. 10,000/-. The materials on record do indicate that there is a acute problem faced by many lawyers in the NCLT at Ahmedabad as regards the mode and manner of the functioning of the Courts. It goes without saying that the procedure that may be followed must be consistent, and at the same time, should be reasonable so as not to put anyone in difficulty. If the Court No.2 of the NCLT at Ahmedabad has been very consistent with the mode of hearing, then we see no good reason why the Court No.1 should give any reason for the lawyers to redress so many grievances. In any form of administration, some difficulties are bound to be experienced, but, some rational approach should be adopted, by which, the difficulties are eased and no scope is left for anyone to complain. The reasoning assigned by the learned Single Judge in the impugned order that there is no contemporaneous record to indicate that part physical and part virtual hearing is going on before the Tribunal, prima facie, appears to be erroneous - if the Tribunal wants to go for physical hearing of any particular matter, it may go for it, but, at the same time, it must seek the consent of all the learned counsel appearing in the litigation and only thereafter, it may proceed. However, it should not happen that one set of lawyers would appear before the Tribunal physically and the Tribunal would take up the matter, hear those lawyers and decide the matter without the consent of the other set of lawyers appearing for the different parties. Such practice is bound to create hue and cry. Appeal disposed off.

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• 2020 (9) TMI 129
  Time Limitation for issuance of SCN - case of respondent is that once the respondent had knowledge of the offence, the respondent issued the show cause notices during February, 2005 and filed the complaints during July, 2005. Hence, the complaints have been filed well within the limitation period - HELD THAT:- In the present case, no date was mentioned in the complaints as to when inspection under Section 209 A of the Companies Act, 1956, was conducted. Hence, it is presumed that the date on which the balance sheets have been filed is the date of knowledge of making the false statements. The balance sheets have been filed on 31.03.2001 and 31.03.2002 respectively, hence, the respondent had knowledge of the alleged irregularities under the Companies Act during March, 2001 and March, 2002 respectively, itself, however, they issued the show cause notices only during February, 2005 and filed the complaints during July, 2005. The maximum punishment for the offence under Section 628 of the Companies Act, 1956, is imprisonment for two years and shall also be liable to fine. Hence, the complaints should have been filed within a period of three years from the date of knowledge of making false statements - In the present case, though the respondent had knowledge of the alleged irregularities under the Companies Act during March, 2001 and March, 2002 respectively, they issued the show cause notices only during February, 2005 and filed the complaints during July, 2005, which is beyond the period of three years. Hence, the complaints are clearly barred by limitation. There is no hesitation to allow these criminal original petitions - petition allowed.

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• 2020 (9) TMI 128
  Dividend declared but not claimed for more then 7 years - the petitioner is an 81 year old woman who was not aware even about the existence of the shares until recently on 2019 - the shares were acquired by her son who died on 1993 - transfer of such amount to Investor Education and Protection Fund (IEPF) - Validity of of Section 124 (6) of the Companies Act, 2013 and Rule 6 and 7 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 - violative of Article 14, 21 and 300 A of the Constitution of India or not - It is the contention of the petitioner that Section 124 of the Companies Act, 2013 corresponds to Section 205 A of the Companies Act, 1956 - It is the contention of the petitioner that failure to claim dividends cannot amount to divesting the rights in the shares which is property. HELD THAT:- In the instant case, the petitioner is an 81 year old woman who was not aware even about the existence of the shares until recently on 2019. Since the shares were acquired by her son who died on 1993 in Oman, the petitioner had no way of knowing the shares on her own. Therefore, the shares were dormant for more than 7 years and in such a case, the shares are also unreasonably transferred to IEPF where the shareholder had actually died and the claimants were unaware of their existence. The procedure for transfer of shares is onerous as the Claimant/legal heir of the claimant is forced to undergo an ordeal of procedure to get back their own property. The procedure given under the Rules after the amendment is not in conformity with the substantial due process and fairness, as mentioned above, the Section and the Rules are manifestly arbitrary - Neither the Section nor the rules provide for any checks and balances and effective adjudicative mechanism through which its civil right in shares can be divested. It is an essential facet of law and matter of fundamental policy in India that a person, whose rights are affected, ought to be heard. Therefore, the lack of such opportunity and effective mechanism by itself renders the section and the rules arbitrary and unconstitutional. A time limit of 7 years was imposed for claiming any dividend due to a shareholder, after which the money would instead be used by the IEPF, for fulfilling its various objectives. Parliament in its infinite wisdom felt that money owed to careless shareholders ought to be put to good use, i.e. used for the purposes of the IEPF. In this manner, the right of the shareholder, to recover dividend in respect of his forgotten investments was curtailed. A shareholder could only recover dividend for upto 7 years, from the date on which he made an application to the company. The present Petition seeks to challenge, Section 124(6) of the 2013 Act, and the rules made thereunder. It is the case of the Petitioner, that the provisions related to the transfer of shares to the IEPF, i.e. 124(6), and the rules made thereunder, deprive a person of their right to property and are violative of Article 300-A of the Constitution of India. It is further the case of the Petitioner that the provision and the rules made thereunder, are onerous and are manifestly arbitrary - It is settled law that Article 300-A ensures that no person shall be deprived of their property, except in accordance with law. The protection offered under this Article ensures that an executive fiat cannot result in the deprivation of property, and that law must be made by the appropriate legislature, to deprive a person of their property. Article 300A, is attracted to those situations where the property of a person is acquired only by an executive fiat, and not on the basis of any law, validly made. It is the case of the Petitioners that the impugned provisions deprive them of their property, and are violative of Article 300-A of the Constitution of India. This argument is liable to be rejected because there is no actual deprivation of property taking place. There is no doubt that as a result of the impugned provisions, the shares on which dividend is unclaimed for more than 7 years are to be transferred to the IEPF, but that does not amount to deprivation of property.This is for two reasons. Firstly, under Section 124(6), there is no statutory vesting of the shares so transferred to the IEPF. Section 124(6), only contemplates a transfer of shares to the IEPF, and does not confer ownership of the shares on IEPF. This position is reflected in the proviso to Setion 124(6), which provides that a person shall always be permitted to re-claim his shares, from the IEPF. Secondly, the Rules prescribed under Section 124(6), provide for a procedure for the refund of the shares so transferred to the IEPF.Rule 7, of the IEPF Rules, 2016 a procedure is prescribed for the refund of the shares by the IEPF to the owner of the shares. Thus, no deprivation of property is taking place, under the Impugned Provisions, and as such Article 300-A is not attracted in this case. Petition dismissed.

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• 2020 (9) TMI 127
  Sanction of scheme of arrangement between the petitioner-company and its equity shareholders - petitioner states that the scheme of arrangement has been filed by the petitioner-company pursuant to the advice of the Bombay Stock Exchange to the petitioner by its letter dated August 22, 2013 - whether the scheme as presented can be construed as a scheme of arrangement under section 391 of the Companies Act, 1956 or under section 230 of the Companies Act, 2013? HELD THAT:- The term arrangement envisaged by sections 391-394 of the Companies Act, 1956 as also sections 230-232 of the Companies Act, 2013, is a term capable of the widest import, is not res integra. The Legislature, in its infinite wisdom, deliberately did not get down to the task of marking delimiters to the term arrangement , aware as it was that arrangements can take on multiple hues and a bewildering assortment of forms. It is limited only by human ingenuity in finding solutions to corporate problems. Therefore, to make it conform to set parameters would be to do injustice to the statutory provisions, and this is certainly not what the lawmakers intended. In the light of settled position in law on the import of the term arrangement , which is of wide ambit and import, there is no basis to hold that the scheme as filed by the petitioner does not constitute as an arrangement between the petitioner-company and its members within the meaning of sections 391-394 of the Companies Act, 1956 or section 230-232 of the Companies Act, 2013. There are no restrictive covenants built into the language of sections 391-394 of the Companies Act, 1956 or sections 230-232 of the Companies Act, 2013 that would inhibit our considering the present scheme to satisfy the requirements of an arrangement within the meaning of those sections. Even if the scheme purports to rectify and regularise the allotments already made by the petitioner, there is no reason why the scheme should not be treated as an arrangement between the company and its shareholders. Objections of the RD and of the shareholder holding 0.00012 per cent. of the paid-up share capital of the petitioner-company - HELD THAT:- The RD s objection is more on the procedural aspects than anything else. Procedural niceties would not be sufficient to deter us from considering the scheme. The RD has not raised any objection as regards any illegality in the scheme, or that it is against public policy, and therefore we overrule the said objections. Objections of the shareholder holding fifteen shares in the petitioner-company - HELD THAT:- Having held that the scheme envisaged is an arrangement for the purposes of sections 391-394 of the Companies Act, 1956 and sections 230-232 of the Companies Act, 2013, it is now necessary to determine whether the objector has the necessary locus to object to the scheme - The admitted position is that the objector holds fifteen shares, representing 0.00012 per cent. of the paid-up share capital of the petitioner-company. This is below the threshold of ten per cent. stipulated in section 230(4) of the Companies Act, 2013. However, even so, we have proceeded to consider the objections. On being questioned by the Bench as to how rejection of the scheme will benefit him, Mr. Ashish Lalpuria stated that if the present scheme is rejected, then it is possible the petitioner-company may come out with a proposal in the future to buy-back the shareholding from the public. This is purely speculative. We are not inclined to leave any loose ends. Therefore, the objection cannot be sustained even on merits. Having thus repelled the last vestiges of challenge, we notice from the material on record that the scheme appears to be fair and reasonable and does not violate any provisions of law and is not contrary to public policy or public interest. BSE Ltd., has stated in its letter dated September 15, 2015 that there are no adverse observations. In the absence of anything inherently abhorrent in the scheme, we see no reason why the scheme should not have the imprimatur of this Tribunal.

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• 2020 (9) TMI 126
  Scheme of amalgamation - Dispensation of meeting of the equity shareholders of both the applicant-companies and convening the meeting of unsecured creditors of applicant transferee company - HELD THAT:- Meetings of equity shareholders, of the applicant-transferor company are hereby dispensed with. There are no secured and unsecured creditors - Meetings of equity shareholders and secured creditors of the applicant transferee company are hereby dispensed with. Meeting of unsecured creditors of the applicant-transferee company shall be convened and held at the registered office of the transferee company at Kapdai Faliya, Gandevi Road, Devsar, Taluka-Gandevi, Bili mora District, Navsari-396 380 on August 10, 2020 at 11.00 a.m. for the purpose of considering and if thought fit approving the proposed scheme of amalgamation with or without modifications - At the aforesaid meetings of unsecured creditors of the applicant transferee company voting shall be carried out through ballot/polling paper at the venue of the meeting. Application allowed.

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• Insolvency & Bankruptcy

• 2020 (9) TMI 124
  Payment of AGR Dues - Exclusive privilege of establishing, maintaining, and working telegraphs - before initiation of insolvency proceedings, most of the telecom service providers who are under the insolvency proceedings had applied to the Department of Telecommunications to grant permission for trading of licence. The Central Government objected on the ground that it would not be possible for it to grant permission - Whether spectrum can be subjected to proceedings under the Code? HELD THAT:- Following directions issued: (i) That for the demand raised by the Department of Telecom in respect of the AGR dues based on the judgment of this Court, there shall not be any dispute raised by any of the Telecom Operators and that there shall not be any re assessment. (ii) That, at the first instance, the respective Telecom Operators shall make the payment of 10% of the total dues as demanded by DoT by 31.3.2021. (iii) TSPs. have to make payment in yearly instalments commencing from 1.4.2021 up to 31.3.2031 payable by 31st March of every succeeding financial year. (iv) Various companies through Managing Director/Chairman or other authorised officer, to furnish an undertaking within four weeks, to make payment of arrears as per the order. (v) The existing bank guarantees that have been submitted regarding the spectrum shall be kept alive by TSPs. until the payment is made. (vi) In the event of any default in making payment of annual instalments, interest would become payable as per the agreement along with penalty and interest on penalty automatically without reference to Court. Besides, it would be punishable for contempt of Court. (vii) Let compliance of order be reported by all TSPs. and DoT every year by 7th April of each succeeding year.

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• 2020 (9) TMI 123
  Scope of the I B Code - initiation of CIRP - Financial Debt - Converion of Debt into Capital - Corporate Debtor failed to make repayment of its debt - Financial Creditor or not - existence of debt and dispute or not - HELD THAT:- As seen from the impugned order of the Adjudicating Authority had observed that the investment is not a Financial Debt . The Adjudicating Authority had also touched upon the subject of violation of Advocates Act, 1961 and the Bar Council of India Rules for professional conduct and ethics for Lawyers and is not happy with the Advocate becoming the Power of Attorney Holder and affirming Affidavit on behalf of the Appellant - This Tribunal has noticed the submissions advanced on both the sides meticulously and is of the view that the Application under Section 7 of the I B Code, 2016 cannot be rejected on the ground that the same set was filed by the Power of Attorney Holder . The delay has also been condoned by this Appellant Tribunal vide its order dated 24.01.2020. The Appellant case is that she and her late husband has invested huge amount in the Corporate Debtor, and she is a senior citizen. The Corporate Debtor has failed to provide audited profit loss account for the years 2013-14 till date to the Appellant, it seems that the Corporate Debtor is suffering from several irregularities. However, the provisions of Section 7 of the I B Code, 2016 provides for initiation of the CIRP by Financial Creditor; only and that too, if there is a Debt and Default . Once the Debt is converted into Capital it cannot be termed as Financial Debt and the Appellant cannot be described as Financial Creditor . The grievance of the Appellant does not fall under the provision of Insolvency and Bankruptcy Code, 2016 - Appeal dismissed.

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• 2020 (9) TMI 122
  Threatening and obstructing Liquidator from taking action in respect of the property - Appellant states that the Appellant has even paid property tax and thus, he claims that the Appellant is entitled to protect his possession - HELD THAT:- In law, possession would require two elements one, corpus and the other is animus . Even if corpus is there, but animus to hold property by way of a confirmed right or title does not appear to be there. Merely being on property does not give title. The letter is not based on any resolution of Trust. The Appellant does not show that he is in possession as owner or tenant, or licensee as such. Only giving property to manage school at the place would not be sufficient for the Appellant, to claim possession, when the Corporate Debtor goes in liquidation. There are no error in the Impugned Order where it directs that the Appellant will not disturb or obstruct the possession of Liquidator with regard to the property concerned. However, it appears to us that the direction passed by the Adjudicating Authority quashing Civil Suit, is not legal - Even if such bar is there, it is not appropriate for the Adjudicating Authority to quash the concerned suit which is filed in the Civil Court. It would be for the Liquidator to move the concerned Civil Court pointing out the provision of IBC or to move the District Court in the hierarchy for quashing of the Suit concerned. As regards the argument of the learned Counsel for the Appellant that the Liquidator has in the MA claimed rent in the prayer and so the Liquidator accepts that the Appellant should be treated as person liable to pay rent. What appears from the records and facts is that the Liquidator claimed that the Appellant should pay the rent for use of the Wada property . Appeal allowed in part.

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• Service Tax

• 2020 (9) TMI 125
  Levy of Service tax - Rent-a-cab Service - deemed sale or not - empowerment vested in the adjudicating authority to expand the scope of the taxable service by encroaching on taxing power vested in the several states by parliamentary enactment. HELD THAT:- Impliedly, neither did the taxing powers vested in the Union extend either to sale or deemed sale nor did all of the several deemed sales incorporated in the constitutional amendment include some component that was not deemed sale outside the pale of taxation in List II in the Constitution of India. The impugned order has erred in presuming so. In works contracts , there is an aspect that is beyond the taxing powers of the states which could, under Parliamentary sanction, be taxed by the Union. In both sales and services , the taxable event is determined by the existence of buyer/recipient and seller/provider with the conclusion of the contractual obligation as the definitive event to be taxed. In the absence of concurrent jurisdiction, the vivisection of such enumerations in Article 366 (29A) of the Constitution of India alone can confer the authority under List I of the Seventh Schedule in the Constitution of India. Agreements/contracts of lease are, acknowledgedly, taxable as deemed sale ; it is not the case of Revenue that any portion of the consideration for lease is not deemed sale . As the entire rental is subject to tax as deemed sale , there is no scope for any portion thereof to be leviable to tax by the Union and, thereby, under Finance Act, 1994. The scope for subjecting lease rental to tax, as proposed in the show cause notice, cannot sustain in the absence of a valid machinery provision recognized in the taxing statute - Appeal allowed - decided in favor of appellant.

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• 2020 (9) TMI 121
  Rejection of benefit of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - mistake of not mentioning the penalty - filing of details in the wrong column i.e. filing details in the column 9.1 instead of column 9.4 - HELD THAT:- It is an admitted position of the parties that the petitioner does not come within the purview of the exceptions provided in sub clauses (a) to (h) of Section 125, meaning thereby that petitioners are otherwise eligible to make a declaration under Scheme 2019. The only issue before the Court would be whether the claim of the petitioner for the benefit under Scheme 2019 would stand rejected as because of the aforesaid mistake of not mentioning the penalty or a different view can also be taken in the matter - Admittedly the Finance Act, 1994 wherein, Scheme 2019 has been incorporated does not provide for any provision for re-submitting an application claiming the benefit under the scheme. In the instant case, the mistake made by the petitioner was that they had stated in clause 9.1 about the undisclosed dues instead of stating it in clause 9.4. By stating the required information in clause 9.1 instead of clause 9.4 it cannot be said that by making the mistake, the petitioner had claimed an undue benefit which they are otherwise are not entitled under the law - it is an agreed position of the parties that the petitioner may make an application to the appropriate respondent authorities to consider the claim of benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 by allowing the petitioner to make necessary correction in the information provided as regards the earlier penalty imposed on them. It is further agreed that upon such application being made, the authorities would pass an appropriate order thereof as per their discretion. This writ petition stands disposed of by requiring the petitioner to submit an application before the respondent authorities for the correction to be made in the information provided in the Form SVLDRS-1 as regards the disclosure of the dues from them and upon such application being made, the respondent authorities would pass a reasoned speaking order thereon.

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• 2020 (9) TMI 120
  Non-filing of ST-3 returns - Bonafide belief - business of maintenance/house keeping of NTPC guest house - Contravention of provisions of Section 70 of the Finance Act, 1994 as amended read with Rule 7 of Service Tax Rules, 1994 - period from April, 2008 to September, 2008 and October, 2008 to March, 2009 - HELD THAT:- The appellant assesse was registered with the Service Tax Authorities and was filing the ST-3 Return right from April, 2006 to March, 2008. Thereafter, the appellant entertained a view that they are no more liable to pay service tax and stopped filing ST-3 Returns without giving any intimation to the Department. It is my considered view that the appellant assesse should have intimated the Department by filing either NIL ST-3 Returns or an intimation explaining the reasons for non-filing of service tax returns. Similarly, the adjudicating authority should have called for the details and further when an appeal was already pending before the first Appellate Authority for the period April, 2006 to March, 2008, they should have waited for final outcome of the Appellate Order. Matter remanded to the adjudicating authority to decide the matter in denovo proceeding after calling for the details from the appellant assesse and also wait for the order of the first Appellate Authority in an appeal, which is pending for the period April, 2006 to March, 2008 - appeal allowed by way of remand.

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• CST, VAT & Sales Tax

• 2020 (9) TMI 119
  Seizure order - penalty order - Section 129 (3) of UPGST Act - HELD THAT:- The goods which are eatable items i.e. Supari and the vehicle are seized since 14th December, 2018 and to protect the interest of revenue, this Court deem it appropriate to direct the petitioner to deposit the entire assessed tax i.e. sum of Rs. 1,84,000/- plus penalty to the extent of Rs. 10,00,000/- with the seizing authority/ assessing authority and will furnish the security for the remaining penalty amount other than cash bank guarantee or bank draft to the satisfaction of seizing authority. List this petition before appropriate Court on 20.10.2020.

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• 2020 (9) TMI 118
  Power to increase the rate of tax (VAT) on Petrol and Diesel by way of Notification - grievance of the petitioner is that the amendment made under G.O.Ms.No.24 dated 27.05.2020 constitutes an excess of power insofar as the provision invoked, Section 31, only provides for the reduction of the tax rate by notification and not an increase , which is what has been done in the present case. HELD THAT:- The rates of tax on petrol and diesel have been altered across the board and ostensibly, in public interest . The notification does not refer to or address a specific class of assesses/transactions and no conditions are imposed upon satisfaction of which the amended rate would apply. A general and omnibus alteration to the rate of tax of this nature would have to be effected only by way of amendment to the Schedule itself under Section 75 and not by issuance of a Notification under Section 31 of the PVAT Act - Though the 2017 amendment to the rate of petrol and diesel from 21.5% and 17.15% to 22.15% and 18.15% respectively was also only by way of Notification under Section 31 and was in force till the present impugned amendment, this does not per se invalidate a subsequent illegitimate and unauthorised levy. Except for some differences in detail, the amendment of schedules in the VAT enactments extracted above, uniformly require that the notification for amendment once made, be placed before the House within the timeframes stipulated therein for deliberation and ratification. It was thus incumbent upon the respondents to have followed the proper procedure for amendment of schedules set out under Section 75 of the PVAT Act and the invocation of Section 31 in the above circumstances is contrary to law. Impugned Notification quashed - Petition allowed.

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• 2020 (9) TMI 117
  Exemption from payment of Sales-tax on sale of Finished Products under the Notification- S0 No.: 479 dt. 22.12.1995 and Notification-S 0 No.: 57 dt.02.03.2000 issued under the Industrial Policy, 1995 - petitioner fairly concedes that with the passage of time, present petition has become infructuous inasmuch as there is change with respect to the position of law - HELD THAT:- This issue can be agitated by the petitioner first with the appropriate authority and thereafter before the appropriate forum in accordance with law. Petition disposed off.

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• 2020 (9) TMI 116
  Stay of recovery of dues, pending the appeal - Principles of Natural Justice - ex-parte order - suo motu power of revision - exemption on turnover - stock transfers covered by F-Forms - HELD THAT:- In XEROX INDIA LTD. VERSUS GOVERNMENT OF AP. AND OTHERS [ 2007 (8) TMI 697 - ANDHRA PRADESH HIGH COURT ] , it was held that while deciding the application for stay, the authority was exercising quasi-judicial function, and therefore even though he was not expected to pass a judgment like a regular court, it was his bounden duty to record some reasons indicating the application of mind to the factors which are relevant for passing or refusing an order of stay in the matter of levy and collection of taxes and an order which is silent on consideration of the relevant factors is liable to be set aside. When substantial rights of parties are involved, it is not open to the 1st respondent to (i) mention wrong facts while dealing with stay application filed by the petitioner. (ii) ignore the points urged by the petitioner for seeking stay of collection of tax and (iii) dismiss the say application without giving any valid reasons, why the petitioner is not entitled to grant stay pending appeal before the Telangana State VAT Appellate Tribunal. Petition allowed.

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• 2020 (9) TMI 115
  Valuation - allegation that the freight charges and pumping charges have been separately shown in the invoices without including the sale and sale price - Levy of tax and penalty - Rule 8(2) of TNVAT Rules 2006 - HELD THAT:- Hon ble Division Bench of this Court, in a recent decision M/S. LARSEN TOUBRO LIMITED VERSUS STATE OF TAMIL NADU REP. BY THE JOINT COMMISSIONER (CT) [ 2019 (1) TMI 711 - MADRAS HIGH COURT ] had held that the cost of freight and delivery or cost of transportation cannot be included in the sale price, where they are separately charged and when the freight charges and pumping charges have been separately shown in the invoices without including the same in the cost of the goods, the tax cannot be levied on the same. This clarification of the Division Bench was made pursuant to the impugned orders passed in the present writ petitions, which has not been brought to the notice of the authorities. Petition disposed off.

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• 2020 (9) TMI 114
  Validity of assessment order - time limitation - period of limitation for making assessment expired - HELD THAT:- Lockdown on account of COVID-19 pandemic commenced in Hyderabad from 21-03-2020 and continued upto first week of July, 2020. These factors undoubtedly disabled the petitioner from filing objections to the show cause notice issued by 1st respondent for production of records and books of accounts - Therefore when the representative of the petitioner met the officials of the 1st respondent on 10-06-2020 requesting further time, the same ought to have been taken into account by 1st respondent and adequate time should have granted to the petitioner to file objections and produce records and books of account. It is unfortunate that even the request of the petitioner through e.mail dt.01-06-2020 to the Office of the Commercial Tax Department requesting them to provide new login credentials in the VAT portal to retrieve the information uploaded by the petitioner such as monthly returns and supporting documents, was not acted upon by the respondents. There has been a gross violation of principles of natural justice, which has caused serious prejudice to the petitioner - the matter is remitted back to the 1st respondent for fresh consideration - Petition allowed by way of remand.

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• 2020 (9) TMI 113
  Power to condone the delay in filing of refund application - Whether the power to condone the delay in filing an application for refund under Section 13 of the Kerala Value Added Tax Act, 2003 is regulated by the prescription under Rule 47 of the Kerala Value Added Tax Rules, 2005 or only to be considered by the Deputy Commissioner under Section 20A of the Act? HELD THAT:- Section 20A has been brought in by an amendment made to the KVAT Act with effect from 01.04.2008. Section 20A is an enabling provision, where the Deputy Commissioner has been conferred with the power to condone the delay in applications for refund under the Act and the Rules if limitation is provided. This enabling provision would be applicable only in circumstances where no other officer has been specifically conferred with the power to condone the delay in filing an application for refund. Section 13 speaks of refund being permitted in such manner and subject to such conditions as has been prescribed . The prescription as found in Rule 47 specifically empowers the Assessing Officer to condone the delay in filing the statement (application) or other documents referred to in clauses (i) to (iv). When a clear prescription has been made as per the statutory provision, Section 20A has no application and in such circumstances, the Deputy Commissioner cannot usurp the powers of the Assessing Officer who has been conferred with the power to condone delay in filing applications. Section 20A, in view of the conferment of power to condone delay, by the statutory rules, on the Assessing Officer, is inapplicable to the applications made under Section 13. Decided in favor of assessee.

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• Indian Laws

• 2020 (9) TMI 112
  Dishonor of Cheque - permission to file affidavit of chief examination - the applicant has filed this petition under Section 482 of Cr.P.C. on the ground that learned trial Court has wrongly interpreted the case-laws - Section 145 of N.I. Act - HELD THAT:- No doubt by virtue of Section 145(1) of Negotiable Instruments Act, it is only the complainant who is permitted to give evidence on affidavit and that affidavit can be considered during whole trial as evidence. Section 145(2) of Negotiable Instruments Act permits the parties to request the trial Court for calling the witnesses for cross-examination personally. This Court is of the view that the complaint case is pending since 2014 and the applicant has filed a detailed affidavit of evidence before the trial Court which can be used as examination-in-chief of the applicant. If the respondent who is complainant therein wants to crossexamine the applicant, he can apply before the trial Court for calling the applicant for cross-examination. In case the applicant failed to appear before the trial Court for cross-examination, the Court may proceed further presuming that the applicant intentionally not appearing before the Court for cross-examination and the value of such affidavit can be considered at the time of final adjudication of the case. Petition allowed.

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• 2020 (9) TMI 111
  Grant of Interim Bail - Smuggling - Methamphetamine - Coccaine - Applicant seeks bail on the ground of deteriorating conditions in the Mandoli Jail, where it is stated that there is a severe spread of the pandemic - Sections 8, 21, 22, 27A and 29 of NDPS Act, 1985 - HELD THAT:- The Senior Medical Officer admits that the Applicant is suffering from skin allergies. There is no response to the specific plea of the mother in her affidavit where it has been stated that due to the skin allergy, she has been given medicines in jail and she has suffered a negative reaction to them. Further, considering the situation of the pandemic as also various news articles published from time to time about the spread of COVID-19 even in the jail, the threat of the pandemic is a serious threat. The Applicant is a permanent resident of Goa with deep roots in society as is clear from her mother s affidavit as also the petition filed by her grandfather - In the nominal roll, the jail conduct of the Applicant is found satisfactory. There are no other cases pending against the Applicant. The statement given by the Applicant under Section 67 has been retracted by her affidavit. However, this Court is not inclined to go into the validity or otherwise of the said statement at this point. The present petition is only seeking interim bail in order to enable the Applicant to meet her family. Considering the overall facts and circumstances of this case, this Court is inclined to give interim bail to the Applicant - Interim bail granted.

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• 2020 (9) TMI 110
  Jurisdiction - imposition of condition of deposit of 50% of amount of compensation - introduction of section 148 of NI Act - relevant date - HELD THAT:- In present case, not only complaint as well as appeal was preferred before the insertion of Section 148 of NI Act, but impugned order was also passed before that. In the present case, trial Magistrate has imposed compensation to be paid to complainant with default clause of imprisonment of one year in case petitioner fails to pay the compensation, within four weeks. Sction 138 of NI Act empowers the Court to levy a fine which may extend twice the amount of cheque, as referred supra, and further in view of pronouncement of Apex Court in Suganthi Suresh Kumar s case, referred supra, the trial Magistrate is also empowered to award any sum as compensation under Section 357 Cr.P.C. and in case, petitioner choses to serve the sentence in default, even then amount of compensation would be recoverable under Section 421 Cr.P.C. read with Section 431 of Cr.P.C., irrespective of the fact that there is default clause in order for non-payment of compensation within 4 months. Petitioner, in alternative, has also prayed to permit him to deposit the amount directed by Appellate Court, in installments on such terms and conditions as may be deemed proper. Complaint was decided and petitioner was convicted on 30.5.2015 and thereafter impugned order was passed on 30.6.2015. Now, we are in June 2020. The cheque amount was of Rs. 6 lacs, whereas compensation imposed by the trial Court is double thereof i.e. Rs. 12 lacs. At the time of passing of order, condition of deposit 50% of amount of Rs. 6 lacs was imposed about 5 years back. Therefore, prayer of petitioner to grant him time to deposit the amount in installments is concerned, that has also lost force after lapse of 5 years - However taking a lenient view, liberty is granted to petitioner to make such prayer before the Appellate Court and if such prayer is preferred before the First Appellate Court, the same shall be considered by the Appellate Court. Petition dismissed.

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• 2020 (9) TMI 109
  Grant of anticipatory bail - guilty and convicted under Section 138 r/w.142 of Negotiable Instruments Act - HELD THAT:- A perusal of the case records indicates that after suffering conviction at the hands of the trial Court and the same being confirmed by the appellate Court the petitioner herein preferred Crl.R.C.No. 2012 of 2002. On 19.12.2006 Hon ble Justice A.Selvam (as he then was) after discussing the facts of the case, has expressed his opinion that the sentence of imprisonment in default of payment of fine cannot be imposed since the conviction is under Section 138 of the N.I, Act, which does not provided Sentence of imprisonment in default of payment of fine. So taking into consideration the provisions under the Criminal Procedure Code, particularly Section 30, the learned Single Judge has requested the Registry to place the papers before the Honourable Chief Justice to post the matter before the larger bench to decide the case. It is absolutely correct that there is no revision pending before the High Court on the day when the complainant filed miscellaneous petition in Crl.M.P.No. 4295 of 2018 seeking to issue Non Bailable Warrant to secure the convict - Since the criminal prosecution has crossed the stage of trial, appeal and revision and reached the finality, the person who is found guilty have no right to file anticipatory bail petition for modification invoking 438 of Cr.P.C, the representation made across the bar and in the anticipatory bail petition that Crl.R.C is pending before this Court is factually not correct. The anticipatory bail petition is liable to be dismissed.

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• 2020 (9) TMI 108
  Dishonor of cheque - whether the petitioner/accused in the present case has succeeded to rebut the presumption arising in favour of the respondent/complainant in terms of Section 118 read with Section 139 of the Negotiable Instruments Act? HELD THAT:- From the evidence and materials adduced by the parties, it is manifest that the petitioner has not disputed the issuance of cheque in question and the signature found therein. As such, the presumption lies in favour of the respondent that the cheque in question was issued by the petitioner for legally enforceable liability. In such circumstances, the petitioner has to rebut the same through preponderance of probability, whereas the oral evidence adduced by him would only disclose the fact that there were money transactions between the two. Though he replied to the legal notice issued by the respondent, the contents of the same were not substantiated by any oral or documentary evidence. Further, nothing has been elicited from the cross examination of P.W.1. That apart, the petitioner has not subjected himself to witness box, which is fatal to his case. In the considered opinion of this Court, a mere denial of the averments made by the respondent is not sufficient for rebutting the presumptions arising in his favour and it is for the petitioner to demonstrate that there exists preponderance of probabilities that the cheque in question was not issued towards discharge of any legally enforceable debt/liability, but the petitioner has failed to do so. On the other hand, the respondent has proved his case that the petitioner committed the offence under Section 138 of the Negotiable Instruments Act - Hence, the trial Court has rightly convicted the petitioner for the same and the same was also affirmed by the Appellate Court. Criminal Revision Case stands dismissed.

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• 2020 (9) TMI 107
  Dishonor of Cheque - acquittal of the accused - rebuttal of presumption - Section 138 of the Negotiable Instruments Act - whether the cheque was given in security or not and its effect? HELD THAT:- If any cheque is given in security, then presumption of legally enforceable debt or liability exists which has to be rebutted by the accused to the extent that full amount due and payable to the complainant has been paid or otherwise. Here in the case in hand, accused did not discharge the onus lying over her and she could not rebut the presumption as per Section 118 and Section 139 of the Act. Mohsin did not enter into witness box and he could have been the witness who could have elaborated the intention of the parties. Although agreement to sell and issuance of cheque were admitted by the accused and rightly so because she signed those instruments, and therefore, it was herculean task for her to discharge the onus. Nevertheless she failed even otherwise. In the cumulative analysis, it is established that trial Court erred in passing the impugned judgment regarding acquittal in favour of the accused i.e. respondent - impugned judgement set aside. Appeal allowed.

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• 2020 (9) TMI 106
  Dishonor of Cheque - offence u/s 138 of NI Act - Refusal to permit and to add the said company as accused No.3 in the complaints filed under Section 138 of Negotiable Instruments Act - HELD THAT:- The amendment of the nature sought for in present petitions, cannot be permitted and therefore this Court is not inclined to entertain present petitions, as no infirmity or illegality is noticed in the impugned orders. Petition dismissed.

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• 2020 (9) TMI 105
  Leave sought under Sub-Section (4) of Section 378 of the Code of Criminal Procedure, 1973 - respondent acquitted of the charge under Section 138 of the Negotiable Instruments Act - HELD THAT:- It does not stand to the reason that somebody would repay the amount of issuance of cheque after such a serious matrimonial dispute with the daughter of the complainant. Furthermore, as recorded by the trial Court, the Bank Official examined on behalf of the accused deposed to that the impugned cheque is non CTS Cheque and that cheque book issued reflects two names i.e. Manish Kanubhai Vora and Dhara Manish Vora. Dhara Manish Vora appears to be ex-wife of the present accused and the disputed cheque leaf from the cheque book appears to have been issued in the year 2012. Therefore, by leading evidence through the cross examination of the complainant, as also producing his own witnesses, the accused has been successful to rebut the presumption. By leading evidence, the accused is successful in showing that the consideration and debt did not exist or under the peculiar circumstance of the case, the non- existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. Since the accused is successful in rebutting the presumption then it is for the complainant to prove that existence of the debt and he is capable of lending money to the tune of Rs. 3,05,000/-, as claimed by him. Considering the evidence brought on record, the complainant is working as Security Guard and earning Rs. 6,000/- per month. While cross examining the complainant, the complainant has tried to explain that he had borrowed the money from his brother and other relatives and then it was lent to the accused. However, it is nothing but an afterthought which is not reflected either in the complaint or in the notice or even in the examination in-chief of the complainant. Thus, it is clear that the judgment of acquittal recorded by the learned trial Judge after considering the evidence minutely, requires no interference under any circumstance. The application seeking special leave to appeal stands rejected.

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• 2020 (9) TMI 104
  Dishonor of Cheque - Section 138 of Negotiable Instruments Act - suit for recovery of money with interest and costs - whether the plaintiff is entitled to decree as prayed for? - HELD THAT:- This Court is of the considered opinion that the plaintiff has established the fact that the defendant has admitted that he has issued a cheque for Rs. 17 lakhs. The cheque was presented by the plaintiff for encashment and was returned with an endorsement that the defendant has issued a stop payment instruction. On verification, the plaintiff came to understand that sufficient funds were not available in the accounts of the defendant. This being the facts which are all admitted between the parties and in respect of other contention, there must be a proof to establish the same. In the absence of any clinching evidence, to disprove the said basic facts, the Trial Court has rightly proceeded with a finding that the plaintiff is entitled for the relief of recovery of money. On perusal of the entire findings, arrived by the Trial Court, which is in consonance with the document and evidence, this Court is of the opinion that there is no perversity or infirmity as such so as to interfere with the findings of the Trial Court - Appeal dismissed.

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• 2020 (9) TMI 103
  Dishonor of Cheque - section 138 of NI Act - permission to cross examine the complainant - Section 145(2) of Negotiable Instrument Act - HELD THAT:- From perusal of the impugned order, it does not appear that the learned Magistrate tried the case against the respondent under the procedure of summary trial. Under the provision of Section 145(2) of N.I. Act the respondent/accused has liberty to make an application for recalling the witness for cross-examination on plea of defence. The applicant has not filed the plea of defence of accused recorded by the trial court, therefore, it cannot be said that there is no probable defence is available to the respondent/accused for cross-examination of the complainant. This court is of the view that the trial court has not committed any error in allowing the application under Section 145(2) of N.I. Act to permit the respondent/accused for recalling the complainant for his cross-examination, hence, there is reason available to interfere with the impugned order - Petition dismissed.

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• 2020 (9) TMI 102
  Dishonor of Cheque - offence punishable under Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT:- From the statement of the complainant-Nanuram and documentary evidence available on record, it is duly proved that the applicant has committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881, therefore, this Court is of the view that the trial Court as well as the appellate Court have not committed any error in convicting the applicant for commission of offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and there is no ground available for warranting any interference in the concurrent findings recorded by the courts below. Thus, the conviction of the applicant recorded by the courts below is hereby affirmed. Period of sentence - HELD THAT:- The applicant has already suffered more than 15 days of jail sentence out of two months SI and he has already deposited the compensation amount of Rs. 6.0 Lacs before the trial Court and now the complainant/respondent has no grievances with the applicant, therefore, it will be appropriate to reduce the custodial sentence of the applicant to the period already undergone by the applicant. This revision petition is partly allowed and the order of awarding compensation amount of Rs. 6.0 Lacs to the respondent/complainant is hereby affirmed, however, the custodial sentence of the applicant is reduced to the period already undergone by him - appllicant is in jail, the Registry of this Court is directed to arrange for issuance of release warrant of applicant -Rajesh Kumar.

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• 2020 (9) TMI 101
  Maintainability of revision petition - Dishonor of cheque - application filed under Section 6 Rule 17 CPC - HELD THAT:- It is evident from the record that petitioner- accused did not raise any objection before the learned revisional court about the maintainability of the revision. So, only on the ground of maintainability, this petition cannot be allowed - Therefore, petitioner-accused cannot raise such type of objection before this court. It is also evident that proceedings under Section 138 of N.I. Act is at initial stage so, respondent/complainant filed a petition for amendment and that petition can be allowed for complete justice. Petition dismissed.

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