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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter September 6, 2019 Case Laws in this Newsletter: Income Tax Customs Insolvency & Bankruptcy FEMA PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws TMI SMS Penalty for furnishing inaccurate particulars confirmed as the assessee is a company, which is an AOP consisting of other corporate giants News Exchange Rates Notification No.63/2019 - Customs (N.T.) Notifications Customs 29/2019 - dated 4-9-2019 - Cus Duty of customs incresed by 5 percent, for a period of 180 days, on imports of RBD Palmolein/Palm Oil originating in Malaysia and imported under India-Malaysia Comprehensive Economic Cooperation Agreement 63/2019 - dated 5-9-2019 - Cus (NT) Exchange Rates Notification No.63/2019-Custom(NT) dated 05.09.2019 DGFT 18/2015-2020 - dated 5-9-2019 - FTP Amendment in import policy of Chlorotrifluoroethene (CTFE) under HS Code 2903 77 90 of Chapter 29 of ITC (HS), 2017 – Schedule- I (Import Policy). 17/2015-2020 - dated 5-9-2019 - FTP Amendment in import policy of Iron & Steel and incorporation of policy condition in Chapter 72, 73 and 86 of ITC (HS), 2017, Schedule - I (Import Policy) GST - States 52/2018–State Tax - dated 2-9-2019 - Delhi SGST Notifies that every electronic commerce operator, not being an agent, shall collect an amount calculated at a rate of half per cent of the net value of intra-State taxable supplies 29/2018 – State Tax - dated 2-9-2019 - Delhi SGST Delhi Goods and Services Tax (Seventh Amendment) Rules, 2018 23/2018 – State Tax - dated 2-9-2019 - Delhi SGST Inserts the Explanation in the Notification No. 12/2017- State Tax (Rate), dated the 30th June, 2017 21/2018–State Tax (Rate) - dated 2-9-2019 - Delhi SGST Exempts the intra-state supplies of handicraft good 19/2018-State Tax (Rate) - dated 2-9-2019 - Delhi SGST Seeks to amend Notification No. 2/2017-State Tax (Rate), dated the 30th June, 2017 18/2018-State Tax (Rate) - dated 2-9-2019 - Delhi SGST Seeks to amend Notification No. 1/2017-State Tax (Rate), dated the 30th June, 2017 78/GST-2 - dated 4-9-2019 - Haryana SGST Removal of Difficulty Order under section 172 regarding filing of Annual returns by extending the due date for filing of Annual return / Reconciliation Statement for the Financial year 2017-18 in FORMs GSTR-9, GSTR-9A and GSTR-9C to 30th November, 2019 under the HGST Act, 2017 S.O.90/P.A.5/2017/S.164/2019 - dated 20-8-2019 - Punjab SGST All other powers enabling him in this behalf, the Governor of Punjab, is pleased to appoint the 21st day of June, 2019, Punjab Goods and Services Tax (Fourth Amendment) Rules, 2018 rule 12 of notification No. G.S.R.24/P.A.5/2017/S.164/Amd.(29)/2019, dated the 09th May, 2019. S.O.78/P.A.5/2017/Ss.9 and 15/Amd./2019 - dated 18-7-2019 - Punjab SGST Amendment in the Government of Punjab, Department of Excise and Taxation, Notification S.O.16/P.A.5/2017/S.9/2017, dated the 30th June, 2017. S.O.77/P.A.5/2017/S.9/Amd./2019 - dated 18-7-2019 - Punjab SGST Amendment in the Government of Punjab, Department of Excise and Taxation, Notification No.S.O.35/P.A.5/2017/S.9/2017, dated the 30th June, 2017. S.O.76/P.A.5/2017/Ss.9, 11, 15, 16 and 148/Amd./2019 - dated 18-7-2019 - Punjab SGST Amendment in the Government of Punjab, Department of Excise and Taxation, Notification No. S.O.17/P.A.5/2017/Ss.9, 11, 15 and 16/2017 dated the 30th June, 2017. S.O.75/P.A.5/2017/S.172/2019 - dated 5-7-2019 - Punjab SGST Punjab Goods and Services Tax (Removal of Difficulties) Order, 2019. F.12(46)FD/Tax/2017-Pt-IV-57 - dated 2-9-2019 - Rajasthan SGST Notifies the registered persons required to furnish the details of challans in FORM ITC-04. F.12(46)FD/Tax/2017-Pt-IV-56 - dated 30-8-2019 - Rajasthan SGST CORRIGENDUM - Notification No. F. 12(56)FD/Tax/2017-Pt-IV-I 69, dated the 29th March. 2019. F.12(46)FD/Tax/2017-Pt.-IV-55 - dated 27-8-2019 - Rajasthan SGST Extension of due date for furnishing of annual returns in FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C for FY 2017-18. F.12(56)FD/Tax/2017-Pt-III-53 - dated 20-8-2019 - Rajasthan SGST Amendment in Notification No F.12(46)FD/Tax/2017-Pt-III-06 dated 23.04.2019. F.12(56)FD/Tax/2017-Pt.-IV-44 - dated 31-7-2019 - Rajasthan SGST Amendment in Notification No. F.12(56)FD/Tax/2017-Pt-I-50 dated 29.06.2017 regarding GST rate on hiring of electrically operated vehicles. F.12(56)FD/Tax/2017-Pt.-IV-43 - dated 31-7-2019 - Rajasthan SGST Amendment in Notification No. F.12(56)FD/Tax/2017-Pt-I-40 dated 29.06.2017 regarding GST rate on electrically operated vehicles. F.12(46)FD/Tax/2017-Pt.III-42 - dated 29-7-2019 - Rajasthan SGST Extension of last date for furnishing FORM GST CMP-08. F.24(4)FD/Tax/2019-40 - dated 18-7-2019 - Rajasthan SGST Order regarding reimbursement of SGST payable to the State Government on screening of Hindi film - Super 30. F.12(46)FD/Tax/2017-IV-39 - dated 18-7-2019 - Rajasthan SGST Extension of last date for furnishing FORM GST CMP-08. F.12(46)FD/Tax/2017-IV-38 - dated 18-7-2019 - Rajasthan SGST The Rajasthan Goods and Services Tax (Fifth Amendment) Rules, 2019. G.O. (Ms) No. 121 - dated 27-8-2019 - Tamil Nadu SGST Tamil Nadu Goods and Services Tax (Seventh Removal of Difficulties) Order, 2019 12/2019-TNGST - dated 22-8-2019 - Tamil Nadu SGST Seeks to amend Notification No. VI(1)/327(a-3)/2019, dated 28th June, 2019 G.O. (Ms) No. 114 - dated 20-8-2019 - Tamil Nadu SGST Seeks to amend Notification No. II(2)/CTR/301 (f-3)/2019 dated the 23rd April, 2019 G.O. Ms. No. 109 - dated 31-7-2019 - Tamil Nadu SGST Seeks to amend Notification No. II(2)/CTR/532(d-15)/2017 dated the 29th June, 2017 G.O. Ms. No. 108 - dated 31-7-2019 - Tamil Nadu SGST Seeks to amend Notification No. II(2)/CTR/532(d-4)/2017 dated 29th June 2017 G.o. (Ms) No. 107 - dated 30-7-2019 - Tamil Nadu SGST Seeks to amend Notification No. II(2)/CTR/619(b)/2019 (f-2)/2019 dated the 23rd April, 2019 Circulars / Instructions / Orders FEMA 07 - dated 5-9-2019 Exim Bank's Government of India supported Line of Credit of USD 800 million to the Government of the Republic of Maldives DGFT 30/2015-2020 - dated 4-9-2019 Fixation of Standard Input Output Norms for Food Products (Product Code: ‘E’) Customs 29/2019 - dated 5-9-2019 Eligibility Criteria for availing of DPD Scheme by Importers PUBLIC NOTICE NO. 34/2019 - dated 28-8-2019 IGST Export Refunds — Extensions in SB005 alternate mechanism and revised processing in certain cases including disbursal of compensation Cess PUBLIC NOTICE NO. 33/2019 - dated 28-8-2019 IGST refunds- mechanism to verify the IGST payments for goods exported out of India in certain cases PUBLIC NOTICE NO. - 74/2019 - dated 27-8-2019 Information to be furnished by Importers/ Exporters for assessment purposes PUBLIC NOTICE NO. 72 /2019 - dated 22-8-2019 Incomplete description and misclassification in automobile parts and accessories Public Notice No. 69/2019 - dated 19-8-2019 Clearance of Baggage at Unaccompanied Baggage Centre (Speedy CFS), J.N. Custom House, Nhava-Sheva PUBLIC NOTICE No. 31/2019 - dated 16-8-2019 Recovery of export benefits given under Incentive and Reward Schemes under Chapter 3 of FTP on re-import of exported goods PUBLIC NOTICE NO. 30/2019 - dated 14-8-2019 Clarification regarding applicability of All Industry Rates of duty drawback while fixing Brand Rate of duty drawback in post GST era PUBLIC NOTICE NO. 68/2019 - dated 6-8-2019 Declaration of MEK/2BUTANONE content as part of description in the Bill of Entry in respect of goods falling under CTH 3215, 3402 and 3814 PUBLIC NOTICE NO. 29/2019 - dated 5-8-2019 Procedure in respect of amendment/re-assessment of Warehouse Bill of Entry before Filing Ex-Bond Bill of Enty for Liquid Cargo in bulk Highlights / Catch Notes Income Tax Deemed dividend u/s 2(22)(e) - an advance or loan to to any concern in which such shareholder is a member or a partner and in which he has substantial interest - the proportionate amount of the ‘accumulated profits’ of the lender company worked out on a pro-rata basis of the 22.11% shareholding of the assessee - Additions confirmed - AT Visit to Get Source Revision u/s 263 - capital loss on account of share transactions - An order passed u/s 263 based on a mistake of fact, cannot be sustained. This is not a case of non enquiry or non application of mind. - AT Visit to Get Source Income from other sources - revised return of income filed to reduce the agricultural income - though the assessee claimed lesser amount of the same subsequently, additions considering as income from other sources is justified - AT Visit to Get Source Penalty u/s 271(1)(c) - MAT - Book profit u/s 115JB - The inclusion or otherwise of the capital gains in the capital reserve account directly without routing it through the profit and loss account is a debatable issue and no penalty can be levied basing on that issue. - AT Visit to Get Source Penalty under Section 271(1)(c) - The assessee is not an individual, but a company, which is an association of persons consisting of other corporate giants - the assessee was consciously aware of real position and knowingly furnished inaccurate particulars - levy of penalty confirmed - HC Visit to Get Source Rejection of application u/s 254(2) by the ITAT to re-call the order - order was passed ex-parte - non appearance of assessee - No litigant would stand benefited by not appearing before a court or tribunal or belatedly appearing before a court or tribunal - Ex-parte order set aside - HC Visit to Get Source Reopening of assessment u/s 147 - re-assessment even if in case where return was not scrutinized before the income chargeable to tax has escaped before acceptance originally cannot restore unless the A.O. has reason to believe that the income chargeable to tax has escaped. - HC Visit to Get Source Reopening of assessment u/s 147 - the reopening notice has been issued on the basis of the information obtained during the course of assessment of earlier assessment year u/s 143(3) - Such information can form a valid basis for issuing reopening notice. - HC Visit to Get Source Capital asset u/s 2(14) - whether loan given to its subsidiary in India, by the foreign company constitute capital asset - Held Yes - Revenue has not been able to point out any reasons to understand meaning of the word ‘property’ as given in the Section 2(14) of the Act differently from the meaning given to it u/s 2(e) of the Wealth Tax Act, 1957. - HC Visit to Get Source Power of CIT(A) u/s 251 - new source of income - two additions of the labour charges and sundry creditors made on the basis of the profit and loss account, and balance-sheet filed by the assessee along with his return. Thus, there was no new source of income as claimed by the assessee - Additions confirmed - HC Visit to Get Source Customs Duty of customs incresed by 5 percent, for a period of 180 days, on imports of RBD Palmolein/Palm Oil originating in Malaysia and imported under India-Malaysia Comprehensive Economic Cooperation Agreement Visit to Get Source IGST refunds- mechanism to verify the IGST payments for goods exported out of India in certain cases Visit to Get Source DGFT Fixation of Standard Input Output Norms for Food Products (Product Code: ‘E’) Visit to Get Source State GST Seeks to waive filing of FORM ITC-04 for F.Y. 2017-18 & 2018-19 - details of all the challans in respect of goods dispatched to a job worker Visit to Get Source Indian Laws Arbitration Proceedings - Period of limitation - The period during which the parties were bona fide negotiating towards an amicable settlement may be excluded for the purpose of computing the period of limitation for reference to arbitration under the 1996 Act. However, in such cases the entire negotiation history between the parties must be specifically pleaded and placed on the record. - SC Visit to Get Source IBC Application for withdrawal of CIRP - Application by the promoter / corporate debtor approved by the committee of creditors - even if the asset of the ‘Corporate Debtor’ is held to be proceeds of crime, the Adjudicating Authority cannot reject the prayer for withdrawal of application under Section 7, if the ‘Promoter’ / ‘Director’ or ‘Shareholder’ in their individual capacity satisfy the creditors. - AT Visit to Get Source Central Excise Abatement of duty - manufacture of Pan Masala - closure of the factory - the clearance within two days being only a technical condition, has to be interpreted in a manner leading to justice to the assessee. - AT Visit to Get Source VAT Input tax credit - deemed assessment - if the rights to revise the assessment order is construed as a statutory right under TNVAT Act, the rights do not get extinguished, but the proceedings cannot be commenced after the period of limitation. - HC Visit to Get Source Case Laws: Income Tax 2019 (9) TMI 212 Low tax effect - Monetary limit - HELD THAT:- Tax effect involves in the appeal of the Revenue is below ₹ 50 lakhs. There is no dispute that the Board s instructions or directions issued to the Income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/not pressed the present appeal in view of the aforesaid instruction since the tax effect in the instant appeal is less than the amount of ₹ 50 lakhs. The issue of applicability of the above circular to pending appeals has been decided by the coordinate bench in Dinesh Madhavlal Patel [ 2019 (8) TMI 752 - ITAT AHMEDABAD] Circular No. 17/2019 dated 08/08/2019 will apply to all pending appeals. Therefore the precedent, it is held that the appeal is not maintainable in the instant case as the tax effect is less than ₹ 50 lakhs. Accordingly, it is held that appeal filed by the revenue is not maintainable. We also hastened to add that certain times instances stated in para No. 10 of the CBDT Circular No. 3/2018 dated 11.07.2018 is not discernable from the assessment and appellate orders, therefore, in such cases, we also give liberty to revenue that if such instances comes to their notice than, revenue may file miscellaneous application with such evidences. - Decided against revenue. 2019 (9) TMI 211 Monetary limit - maintainability of appeal - low tax effect - HELD THAT:- Admittedly, the tax effect in the Departmental Appeal is less than ₹ 50 lakhs. Vide Circular No.3/2018 Dated 11th July, 2018 issued by CBDT u/s 268A, it has been directed that the Department shall not file appeal before the Tribunal in case where the tax effect does not exceed the monetary limit of ₹ 20 lakhs. CBDT Vide Circular No.17/2019 Dated 08.08.2019 amended the earlier Circular No.3/2018 (supra) whereby it has been directed that monetary limit for filing the Departmental appeal in Income Tax Cases may be enhanced further through this amendment in para-3 of the Circular mentioned above and accordingly, the monetary limit for filing the appeal before the Appellate Tribunal have been enhanced to ₹ 50 lakhs. Since Circular No.17/2019 Dated 08.08.2019 have been issued to amend its earlier Circular No.3/2018 (supra), therefore, all the conditions of earlier Circular No.3/2018 shall apply accordingly. D.R. in view of the above Board s Circulars did not press the Departmental Appeal. The case of the Department would not fall in the exceptions provided in the above Board Circulars. In the result, the Departmental appeal is not maintainable as the appeal is filed against the Board instructions referred to above and therefore, the appeal of the Department is liable to be dismissed. 2019 (9) TMI 210 Low tax effect - Monetary limit - HELD THAT:- Tax effect involves in the appeal of the Revenue is below ₹ 50 lakhs. There is no dispute that the Board s instructions or directions issued to the Income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/not pressed the present appeal in view of the aforesaid instruction since the tax effect in the instant appeal is less than the amount of ₹ 50 lakhs. The issue of applicability of the above circular to pending appeals has been decided by the coordinate bench in Dinesh Madhavlal Patel [ 2019 (8) TMI 752 - ITAT AHMEDABAD] Circular No. 17/2019 dated 08/08/2019 will apply to all pending appeals. Therefore the precedent, it is held that the appeal is not maintainable in the instant case as the tax effect is less than ₹ 50 lakhs. Accordingly, it is held that appeal filed by the revenue is not maintainable. 2019 (9) TMI 209 Low tax effect - Monetary limit - HELD THAT:- Tax effect involves in the appeal of the Revenue is below ₹ 50 lakhs. There is no dispute that the Board s instructions or directions issued to the Income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/not pressed the present appeal in view of the aforesaid instruction since the tax effect in the instant appeal is less than the amount of ₹ 50 lakhs. The issue of applicability of the above circular to pending appeals has been decided by the coordinate bench in Dinesh Madhavlal Patel [ 2019 (8) TMI 752 - ITAT AHMEDABAD] Circular No. 17/2019 dated 08/08/2019 will apply to all pending appeals. Therefore the precedent, it is held that the appeal is not maintainable in the instant case as the tax effect is less than ₹ 50 lakhs. Accordingly, it is held that appeal filed by the revenue is not maintainable. We also hastened to add that certain times instances stated in para No. 10 of the CBDT Circular No. 3/2018 dated 11.07.2018 is not discernable from the assessment and appellate orders, therefore, in such cases, we also give liberty to revenue that if such instances comes to their notice than, revenue may file miscellaneous application with such evidences. - Decided against revenue. 2019 (9) TMI 208 Monetary limit - low tax effect - HELD THAT:- No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified Circular No. 17/2019 shall also apply retrospectively to pending appeals. In that view of the matter, the appeals filed by the Revenue stand dismissed. 2019 (9) TMI 207 Income from house property - ALV determination - self occupied property or not - property under construction - ex-parte order - HELD THAT:- as the aforesaid final possession letter was never filed by the assessee before the A.O, therefore, the said verification was indispensably required to be done on his part in order to verify the authenticity of the aforesaid claim of the assessee. Accordingly, finding no infirmity in the order of the CIT(A) in context of the issue under consideration, we uphold his view. Seeking determination of ALV property as Nil as self occupied property - Held that:- the A.O while giving effect to our aforesaid directions shall make necessary verification as to whether the aforesaid property viz. Vora Apartment, Ghatkopar, during the year under consideration i.e A.Y. 2009-10 was under the self-occupation of the assessee, or not. Working out the ALV of his property at Wanworie, Pune, on the basis of the municipal valuation - HELD THAT:- As is discernible from the orders of the lower authorities, we find, that the A.O without placing on record any supporting material had after estimating the rate of rent in respect of the property under consideration @ ₹ 20/- per sq. ft. worked out the ALV of the same at ₹ 3,38,160/-. We are unable to persuade ourselves to subscribe to the aforesaid methodology of estimation of the ALV by the A.O. In fact, we find substantial force in the claim of the assessee that the ALV of the aforesaid property ought to have been worked out as per its municipal rateable value . Our aforesaid view is fortified by the case of CIT-12 Vs. Tip Top Typography [ 2014 (8) TMI 356 - BOMBAY HIGH COURT] . Accordingly, we restore the matter to the file of the A.O who is directed to work out the ALV of the aforesaid property viz. Wanworie, Pune, after taking cognizance of the aforesaid judgment of the Hon ble High Court of Bombay in the case of Tip Top Typography Unearned income from let out house property - HELD THAT:- it is the claim of the assessee that the property under consideration had during the year remained let out only for a period of 8 months, and thus, for the said reason the rent for the remaining 4 months was not accounted for as a part of his income in the return of income. As the CIT(A) had in all fairness directed the A.O to re-compute the total income from the property at Mahape, Navi Mumbai, as per the facts on record, therefore, no infirmity does emerge from the said direction. Deemed dividend u/s 2(22)(e) - having 22.11% shareholding - proportionate amount - an advance or loan to to any concern in which such shareholder is a member or a partner and in which he has substantial interest - HELD THAT:- the amount of ₹ 60,50,119/- received by M/s Nishitech System Pvt. ltd. from M/s Sanitech Engineers Pvt. Ltd., as rightly observed by the lower authorities, was clearly hit by the provisions of Sec. 2(22)(e) of the Act. Accordingly, we are of the considered view that the lower authorities had rightly concluded that an amount of ₹ 13,37,681/- i.e the proportionate amount of the accumulated profits (as on 01.04.2008) of the lender company viz. M/s Sanitech Engineers Pvt. Ltd. worked out on a pro-rata basis of the 22.11% shareholding of the assessee with M/s Nishotech Systems Pvt. Ltd. was assessable as deemed dividend u/s 2(22)(e) in the hands of the assessee. 2019 (9) TMI 206 Revision u/s 263 - capital loss on account of share transactions - HELD THAT:- Allegations that the sale of shares transactions was suspicion is not supported by facts. No revision can take place based on mere suspicion. Pr. CIT has not controverted the submissions and evidences filed by the assessee. When the assessee has furnished all the details, including the purchase details and sale details, CIT has not explained, as to how he came to a conclusion that there is an error that caused prejudice to the interest of the revenue. There is no verification or enquiry by the Pr. CIT of the information furnished by the assessee to him. The Pr. CIT has simply set aside the matter to the file of the AO for fresh adjudication, without himself conducting any enquiry into the matter. The law requires the Pr. CIT to himself conduct an enquiry and then only come to a conclusion that the order in question is erroneous and prejudicial to the interest of the revenue. If the Pr. CIT had not applied his mind to the replies, details and evidences filed by the assessee then the order passed, without application of mind or verification is bad in law. We have to necessarily hold that the exercise of power by the Pr. CIT u/s 263 was bad in law. We also find that in her reply, the assessee has stated before the Pr. CIT that the assessee has earned capital gain on the sale of shares of M/s. Goodwill Griha Nirmal Pvt. Ltd., and that she has not incurred any loss as alleged in the said notice. The details were furnished. Despite these explanation and evidences filed, the Pr. CIT had committed a factual error in concluding at page 10 para 5 of his order that the assessee has claimed capital loss on account of share transactions of M/s. Goodwill Griha Nirman Pvt. Ltd.. An order passed u/s 263 based on a mistake of fact, cannot be sustained. This is not a case of non enquiry or non application of mind. The allegation of the Pr. CIT is that the issue requires further verification and investigation. Appeal of the assessee is allowed. 2019 (9) TMI 205 Disallowance under Section 14A - Payment of brokerage expenses - allowable expenditure u/s 37- Membership receipt towards club membership - HELD THAT:- SLP dismissed. 2019 (9) TMI 204 Disallowance u/s 36(1)(iii) - interest incurred for the purpose of making investments in subsidiary companies - HELD THAT:- Since the tax effect involved in the matter is less than two crores as stipulated in the latest CBDT Circular dated 8.8.2019, no interference is called for. The special leave petition is dismissed. 2019 (9) TMI 203 Addition u/s 56(1) - unaccounted money of the assessee company which have been introduced in the garb of share application money - ITAT correctly upholding the decision of the CIT(A) in deleting the addition - HELD THAT:- Since the tax effect involved in the matter is less than two crores as stipulated in the latest CBDT Circular dated 8.8.2019, no interference is called for. The special leave petition is dismissed. 2019 (9) TMI 202 Undisclosed investment / income - additions u/s 69C - ITAT has allowed credit additions made towards undisclosed investment / undisclosed income though the applications of were abated by the Settlement Commission u/s.245HA - Revenue appeal admitted - HELD THAT:- SLP dismissed. 2019 (9) TMI 201 Power of CIT(A) u/s 251 - new source of income - power to consider new source of income which was not dealt by A.O. in assessment order - HELD THAT:- In the present case, the CIT (A) had deleted addition made by AO and had made two additions of the labour charges and sundry creditors on the basis of the profit and loss account, and balance-sheet filed by the assessee along with his return. Thus, there was no new source of income as claimed by the assessee. Case law relied upon by the assessee in case of Sardari Lal Co. [ 2001 (9) TMI 1130 - DELHI HIGH COURT] and Shapoorji Pallonji Mistry [ 1962 (2) TMI 12 - SUPREME COURT] are all distinguishable in the facts of the present case, and the Hon ble Courts in those cases had only dealt with the situation wherein AAC found new source of income and made additions to the income, while in the present case no such addition was made from any new source of income but from the return so submitted by the assessee himself. Issuance of fresh notice of enhancement by the CIT (A) has no relevance, once the order of the Tribunal as well as CIT (A) was set aside by this Court on 10.12.2014 restoring the appeal back to CIT (A) for reconsideration and fixing 31th December, 2014 as last date for the appellant to file all required information and documentary material and to appear before CIT (A) on 05th January, 2015. The question of law raised by the assessee is of no consequence as he, thereafter, had filed the documents before CIT (A) and had appeared, thus, the question of issuance of fresh notice for enhancement does not arise and the CIT(A) rightly decided the question so raised before it. Argument of assessee cannot be accepted so as to restrict the power of Commissioner (Appeals) on the ground of new source of income, as Section 251 clearly envisages the power of the appellate authority for considering and deciding any material arising out of proceedings in which order appealed against was passed. In the present case, all the materials looked upon by the appellate authority was before the assessing authority, as such the Commissioner (Appeals) rightly proceeded to decide the same as it arose out of the proceedings of assessment. The Apex Court has also affirmed that power of Commissioner (Appeals) cannot be restricted and in the case of Jute Corporation of India Ltd. [ 1990 (9) TMI 6 - SUPREME COURT] held that the power of the Commissioner (Appeals) being coterminous with that of the Income Tax Officer, he can do what the Income Tax Officer do and further the section also empowers him to direct the Assessing Officer to do what he had failed to do. The power of the Commissioner is not bridled in any way and the language of the section is plain and simple. The law laid down by the Apex Court in regard to the power of Commissioner (Appeals) exercisable under Section 251 of the Act, we are of the considered opinion that the order of the Tribunal needs no interference and the appeal of the assessee is dismissed. 2019 (9) TMI 200 TDS u/s 194H - addition u/s 40(a)(ia) - commission involved in selling its product through SBPL - HELD THAT:- Tribunal has on facts come to the conclusion that the sale of goods to Sandu Brothers Private Limited was on principal-to-principal basis and not through an agent. Thus no amount of the discount aggregating to ₹ 7.27 crores can be classified as commission. Therefore, section 194H of the Act calling for deduction of tax of such a commission would have no application to the present facts. The Appellant has not been able to show that the finding of fact arrived at by the Revenue on the basis of the terms of the agreement is in any manner perverse, or capable of different interpretation. No substantial question of law 2019 (9) TMI 199 Capital asset u/s 2(14) - Scope of the term Asset / property - interest of every kind - whether loan given to its subsidiary in India, by the foreign company constitute capital asset - transfer in terms of Section 2(47) - HELD THAT:- No application while dealing with the Act. It is also his submission that the reliance upon decision of the Gujarat High Court in CIT v/s. Minor Bababhai [ 1980 (8) TMI 53 - GUJARAT HIGH COURT] is inappropriate, as in that case, the Revenue has accepted that the amount due from the un-secured creditor were in the nature of capital assets. Thus, there was no dispute on the issue of 'capital asset' as in this case. Therefore, this appeal deserves admission. Section 2(14) of the Act has defined the word capital asset very widely to mean property of any kind. However, it specifically excludes certain properties from the definition of 'capital asset'. The Revenue has not been able to point out any of the exclusion clauses being applicable to an advancement of a loan. It is also relevant to note that it is not the case of the Revenue before us that this amount of ₹ 90 lakhs Euros was a loan/ advance income of its trading activity. The impugned order of the Tribunal has considered the meaning of the word property as given in the context of the definition of asset in the Wealth Tax Act to hold property to include the every interest which a person can enjoy. This was extended by the Tribunal to understand the meaning of the word property as found in the context of capital asset under Section 2(14). The Revenue has not been able to point out any reasons to understand meaning of the word property as given in the Section 2(14) of the Act differently from the meaning given to it under Section 2(e) of the Wealth Tax Act, 1957. The Revenue has not been able to point out why the above decision of this Court rendered in the context of capital assets as defined in Section 2(14) of the Act, is inapplicable to the present facts. Nor, why the loan given to M/s. SNISL would not, in the present facts, be covered by the meaning of capital asset as given under Section 2(14) of the Act. As the issue raised herein stands concluded by the decision of this Court in M/s. Bafna Charitable Trust [ 1997 (9) TMI 93 - BOMBAY HIGH COURT] and also by the self evident position as found in Section 2(14) of the Act, the question as framed does not give rise to any substantial question of law. 2019 (9) TMI 198 Reopening of assessment u/s 147 - reopening on the basis of the information obtained during the course of assessment of earlier assessment year under section 143(3) - HELD THAT:- We find that the reopening notice has been issued on the basis of the information obtained during the course of assessment of earlier assessment year u/s 143(3). Such information can form a valid basis for issuing reopening notice. In the facts of the present case, the assessment for the subject assessment year was by virtue of intimation under section 143(1) of the Act. Therefore the Assessing Officer had no occasion to examine the claim of the Petitioner. It is on the basis of tangible information now received that the impugned reopening notice has been issued, as is evident from the reasons recorded. Therefore the reasons do make out a prima facie case that income chargeable to tax for the subject assessment year has escaped assessment. This of-course is subject to the Petitioner's pointing out in the re-assessment proceeding that on merits such addition as proposed is not permissible in law. Petition dismissed. 2019 (9) TMI 197 Reopening of assessment u/s 147 - assessee has booked a paper transactions and delivery of commodities in her case has not taken place and the same is to be disallowed - case was not selected for scrutiny, it is therefore, necessary to verify the transactions with respect to the information received as there is an escapement of income of more than 1 lakh as the transactions do not correspond to the return that if filed - HELD THAT:- From the reasons recorded for reopening the assessment, it is clear that the A.O. wish to verify the transaction with respect to the information received by the department. It is well settled through serious of judgements of this Court that re-assessment even if in case where return was not scrutinized before the income chargeable to tax has escaped before acceptance originally cannot restore unless the A.O. has reason to believe that the income chargeable to tax has escaped. In other-words, for mere verification or for fishing inquiry, reopening of assessment is not permissible. 2019 (9) TMI 196 Condonation of delay - Revision u/s 264 - condonation of delay under section 119 - CIT, Bengaluru dismissed the petitioner s petition on the ground that Assessment order cannot be revised as there is no provision in the Income Tax Act to condone the delay in making any investment in specified bonds as per the provisions of Section 54(EC) - Whether communication dated 13.12.2017 (Annexure F ) is in terms of Section 119(2)(b) read with Circular dated 09.06.2015 or not? - HELD THAT:- Petitioner has not questioned the validity of the Circular which relates to pending application as on 09.06.2015. Petitioner had submitted application on 24.05.2011 before the CBDT and it was pending consideration as on 09.06.2015, the date on which the circular was issued. As long as petitioner has not questioned the validity of para.8 of the circular, petitioner is not entitled for relief sought in the present petition. That apart, conduct of the petitioner is required to be taken into consideration for the purpose of deciding whether petitioner is entitled for the relief in the present petition or not? On 24.08.2005, assessment order was passed. Feeling aggrieved and dis-satisfied in respect of portion of the order, petitioner had filed an application under Section 264 and it was rejected on 21.07.2006. Thus, petitioner had a cause of action with reference to AY 2003-04 on or before 31.03.2010 which is the outer limit in terms of the circular dated 09.06.2015. Petitioner has slept over the matter from 21.07.2006 to 24.05.2011 for which petitioner has not appraised this Court by adducing any documentary evidence so as to examine whether delay could be condoned or not. Even for condoning the delay, para.8 of the circular would be a hurdle which is not questioned by the petitioner. The cited decisions has no assistance to the petitioner having regard to the factual aspect of the present matter. Petitioner has not explained the inordinate delay and laches from 21.07.2006 to 24.05.2011. 2019 (9) TMI 195 Rejection of application u/s 254(2) by the ITAT to re-call the order - order was passed ex-parte - non appearance of assessee - HELD THAT:- Tribunal proceeded on the basis that there was no appearance for the assessee and allowed the appeal filed by the Revenue. To recall the order passed by the Tribunal dated 22.2.2006, the assessee filed a miscellaneous petition on 03.7.2008 and it was rejected by the Tribunal by the impugned order on the ground that the assessee was not able to point out any mistake in the said order. No litigant would stand benefited by not appearing before a court or tribunal or belatedly appearing before a court or tribunal. Therefore, the Courts have held that the bona fides of the parties should be examined before a tough decision is taken. The assessee's appeal was partly allowed by the CIT(A). The Tribunal, while recording that none appeared for the assessee, had not referred to the petition for adjournment filed by the assessee's counsel and proceeded to allow the Revenue's appeal by placing reliance on the decision of the Hon'ble Supreme Court in the case of IPCA Laboratories Vs. DCIT [ 2004 (3) TMI 9 - SUPREME COURT ]. Ex parte order set aside - matter remitted before tribunal for a fresh consideration. 2019 (9) TMI 194 Low tax effect - Monetary limit - HELD THAT:- Appeal is not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.8.2019 issued by the Central Board of Direct Taxes. By the said Circular, the monetary limit for filing or pursuing an appeal before the High Court has been increased to ₹ 1 Crore. It is further submitted that the tax effect in this case is less than the threshold limit, as it is ₹ 81.46 lakhs. The above tax case appeal is dismissed on account of the low tax effect. The substantial questions of law raised are left open. In the event the tax effect is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeal to be heard and decided on merits. 2019 (9) TMI 193 Cost of acquisition in computing capital gains - indexation of interest - HELD THAT:- There may not be any necessity for this Court to decide these two questions namely (i) with regard to interest on borrowed funds for acquiring capital asset and whether it should be treated as cost of acquisition for computing the capital gain and (ii) with regard to indexation of interest, since we affirmed the order passed by the Tribunal remanding the matter to the AO to examine the correctness of the payment of interest. In fact, the AO, while completing the assessment u/s 143 read with Section 147 held that there was no agreement between the lender and the recipients as to the date of repayment, rate of interest, for which, money is lent, etc. AO held that the plea raised by the assessee that they availed the loans from five of their sister concerns at different rates of interest is only an afterthought to reduce the capital gains tax liability. Tribunal remanded the matter for a fresh consideration to examine the genuineness of the transaction. Thus, unless and until the assessee is able to succeed before the AO in the de novo proceedings to be conducted on remand, the question of considering as to whether the interest on borrowed funds should be treated as cost of acquisition and as to whether the assessee is entitled to indexation of interest would not arise. Thus, in our considered view, in the light of our decision to approve the order of remand for examining the genuineness of the loan transactions, the two issues pointed out above have become academic and are not required to be answered at this juncture. Penalty under Section 271(1)(c) - wilfulness on the part of the assessee to declare the land as an agricultural land for the purpose of claiming the benefits - HELD THAT:- When the penalty proceedings were initiated, the AO was fully justified in holding that the assessee was consciously aware of the real position and knowingly furnished inaccurate particulars of income in the revised return. The assessee is not an individual, but a company, which is an association of persons consisting of other corporate giants. Therefore, there is no reason to interfere with the factual finding recorded by the Assessing Officer stating that the assessee was consciously aware of real position and knowingly furnished inaccurate particulars. CIT(A) reversed the order of the AO on the ground that the AO proceeded on the assumption that the assessee was guilty. When the correctness of the same was examined, in our considered view, the Tribunal rightly held that there is a wilful concealment. We find that there is absolutely no ground to interfere with the common order passed by the Tribunal. Since we have already approved the finding recorded by the Tribunal, which is on re-appreciation of facts, we find that the decision in the case of Gem Granites [ 2013 (11) TMI 1375 - MADRAS HIGH COURT] will not be of any assistance to the case of the assessee. 2019 (9) TMI 192 Penalty u/s 271(1)(c) - MAT - Book profit u/s 115JB - capital gain on the sale of shares of Dabur Pharma which was directly credited to the capital reserve account by the assessee should have been entered in the Profit and Loss account and added the same to the income of the assessee u/s 115JB also made an addition and u/s 14A - HELD THAT:- Whether the capital gain that had arisen on the sale of Dabar Pharma share was rightly credited by the assessee to the capital reserve account or rightly rejected by the AO on the ground that it has to be routed through profit and loss account, is a debatable issue. There is no dispute that the accounts of the assessee were prepared in accordance with the provisions of Part II of Schedule VI of the Companies Act and the Hon ble Apex Court in the case of Apollo Tyres, [ 2002 (5) TMI 5 - SUPREME COURT] held in unequivocal terms that the AO while computing the income u/s 115J has only the power of examining whether the books of accounts are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act; that the AO thereafter has the limited power of making the increases and reduction as provided for in the Explanation to the said section and to put it differently, AO does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to Section 115J. It is not the case of the Revenue that the profit and loss account of the assessee was not prepared in accordance with the provisions of Part II of Schedule VI of the Companies Act nor has it been that the same does not contain any certificate by the competent authority under the Companies Act as having been properly maintained in accordance with the provisions of the Companies Act. In such a situation, we are in agreement with the submission of the assessee that the non-inclusion of the capital gains by the assessee in the profit and loss account is not a ground for the AO to levy the penalty. In fact, in DCIT vs. Arundhati Traders P. Ltd. [ 2008 (12) TMI 440 - ITAT MUMBAI] the Tribunal held that once an asset is held as an investment by the Company and reflected as an investment in the balance sheet of the company from year to year, then any gain on sale of such investment is not a link or to profit and gain of business carried on by respective company, and the same could not be adjusted for working out book profit of the company under section 115JB. Similar view is taken by the Hyderabad Bench of the Tribunal in the case of New Oriental Trollers P. Ltd. vs DCIT [ 2010 (7) TMI 1180 - ITAT HYDERABAD]. The inclusion or otherwise of the capital gains in the capital reserve account directly without routing it through the profit and loss account is a debatable issue and no penalty can be levied basing on that issue. Assessee, however, revealed the same by offering it to tax and also in the notes of accounts. It is only a difference of opinion between the Revenue and the assessee as to the treatment given to the capital gain either or not by routing it through the profit and loss account. We, therefore, do not have any reason to sustain the penalty and the same is directed to be deleted. - Appeal of the assessee is allowed. 2019 (9) TMI 191 Application for registration u/s 12A rejected - objects of the assessee-company not found to be charitable in nature - HELD THAT:- At the time of granting of registration under section 12AA of the Income-Tax Act, the CIT(E) is required to satisfy himself about the objects of the Trust or Institution and the genuineness of its activities. The assessee has produced sufficient evidence on record that assessee-company is involved in charitable activities and have also held Seminars and Training Sessions for training of the registered valuers. The decisions relied upon by Assessee squarely apply to the facts and circumstances of the case. The objects as noted above have not been disputed by the CIT(E). Further, in similar assessee s having the same objects, registration under section 12AA have been granted in their favour. These facts, therefore, show that assessee has satisfied the conditions of Section 12AA of the Income Tax Act, 1961. Accordingly there were no justification for CIT(E) to reject the application for registration under section 12A. We set aside the impugned order and direct the CIT(E) to grant registration under section 12A of the Income Tax Act to the assessee within one month from the date of the order. - Decided in favour of assessee. 2019 (9) TMI 190 Income from other sources - revised return of income filed to reduce the agricultural income - failure to prove large agricultural income - HELD THAT:- Assessee has filed revised return of income during assessment proceedings reducing the agricultural income. Though this revised return was not accepted by the assessing officer, but, it would show that assessee has in fact not earned huge agricultural income. The assessee in the earlier year as well as in subsequent years have shown meager agricultural income ranges from ₹ 5 lacs to ₹ 8 lacs only. The assessee did not produce any sufficient documentary evidences before the authorities below to claim huge agricultural income of ₹ 24,78,544/- earned out of small agricultural land holdings. The agreement with Shri Rajesh was executed on 8th June 2017 i.e., after closure of the financial year relevant to assessment year under appeal. Therefore, it is concocted and fabricated by the assessee. Conduct of the assessee in changing stand at different level and claiming lesser agricultural income before the authorities below would clearly show that authorities below were very reasonable in estimating the agricultural income at ₹ 14 lacs, though the assessee claimed lesser amount of the same subsequently. Therefore, authorities below were justified in considering as income from other sources. - Dismiss the appeal of the assessee. 2019 (9) TMI 189 Penalty u/s 271(1)(c) - non specification of charge - Defective notice - HELD THAT:- In this case, the A.O. issued show cause notice for levy of penalty u/s 271(1)(c) which is bad in law as it did not specify in which limb of Section 271(1)(c) the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. The entire penalty proceedings are, therefore, vitiated and no penalty is leviable. On this score itself similar view is taken by Hon ble Karnataka High Court in the case of CIT vs. M/s. SSAs Emerald Meadows [ 2016 (8) TMI 1145 - SC ORDER]. Also see M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT] - Decided in favour of assessee. 2019 (9) TMI 188 Levy of penalty u/s 271(1)(c) - non specification of charge - Defective notice - HELD THAT:- In this case, the A.O. issued show cause notice for levy of penalty under section 271(1)(c) which is bad in law as it did not specify in which limb of Section 271(1)(c) the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. The entire penalty proceedings are, therefore, vitiated and no penalty is leviable. On this score itself similar view is taken by Hon ble Karnataka High Court in the case of CIT vs. M/s. SSAs Emerald Meadows [ 2016 (8) TMI 1145 - SC ORDER]. Also see M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT] - Decided in favour of assessee. 2019 (9) TMI 187 Penalty levied u/s 271(1)(c) - whether there was concealment of income or filing of inaccurate particulars - HELD THAT:- In the instant case, the assessee has furnished all the details to the AO as well as to the Special Auditor appointed by the Department. AO has failed to bring any material to justify that there was concealment of income or filing of inaccurate particulars. In the case of CIT v. Reliance Petroproducts (P.) Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] held that the mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding income of assessee. Merely because assessee had claimed expenditure, which claim was not accepted or was not acceptable to the revenue, that by itself would not attract penalty u/s 271(1)(c) of the Act. Respectfully following the decision in Reliance Petroproducts (P.) Ltd. (supra), we uphold the order of the Ld. CIT(A). - Decided in favour of assessee. 2019 (9) TMI 186 Nature of expenditure - licence fee paid to AE - capital expenditure OR revenue expenditure - HELD THAT:- CIT(A) has brought out clear facts in the light of agreement between the parties that payment of licence fee is for use of brand name of assessee s AE and such royalty has been paid @1% of total sales effected in India. Payment of licence fee is directly linked to sale made by the assessee and hence there is no error in the finding recorded by the CIT(A) that it is in the nature of revenue expenditure. No doubt, in the case of Assam Bengal Cement Co. Ltd vs CIT [ 1954 (11) TMI 2 - SUPREME COURT] clearly stated that wherever enduring benefit is derived, the expenditure is to be treated as capital expenditure. But to decide whether a particular expenditure give s enduring benefit to the assessee or not has to be decided in the light of arrangement between parties. In this case, on perusal of agreement between the parties it is clear that the assessee was agreed to pay 1% royalty on total sales which is periodically linked to sales effected by the assessee, but not a lump sum payment for acquiring any right in intellectual property. AO was incorrect in holding that licence fee paid to AE is in the nature of capital expenditure which gives enduring benefit. CIT(A), after considering relevant facts, has rightly deleted addition made by the AO Disallowance of employees contribution to PF ESIC u/s 36(1)(viia) r.w.s. 2(24)(x) - HELD THAT:- We find that this issue is covered in favour of the assessee by the decision in the case of CIT vs Hindustan Organics Chemical Ltd [ 2014 (7) TMI 477 - BOMBAY HIGH COURT] where it was held that section 43B is not applicable to payments made beyond the due date specified under respective Acts, if such payments have been made on or before due date of filing return of income. In the case of Alom Extrusions Ltd [ 2009 (11) TMI 27 - SUPREME COURT] had considered an identical issue and held that contribution payable by the employer to the PF or any other fund for the welfare of the employees was allowable, if such contribution is paid on or before the due date of filing return of income. In this case, CIT(A) has brought out clear facts to the effect that although the assessee has remitted employees contribution to PF / ESIC after the due date specified under respective Act, but such contribution has been paid on or before due date of furnishing return of income. 2019 (9) TMI 185 Addition u/s 68 - bogus share application money and accommodation entries - Investigation Wing of Mumbai that a search u/s. 132 was conducted in the cases of Praveen Kumar Jain Group were providing accommodation entries - assessee s contention that the assessee has stated that neither statement of Shri P.K. Jain was supplied nor any chance to cross examination was granted by the A.O - HELD THAT:- In the case of Shri Praveen Kumar Jain where Shri P.K. Jain has admitted that he was indulged in providing entries to various companies and assessee has received accommodation entry in the form of share application money/share premium from various paper companies controlled and managed by Shri P.K. Jain. The assessee has specifically requested for the statement of Shri P.K. Jain to the A.O. but ld. A.O. did not supply the same. Since statement of Shri P.K. Jain was not supplied to the assessee on the basis of addition was made and in the absence of said statement assessee could not cross examine to Shri P.K. Jain and same is amount to miscarriage of justice despite of the fact that assessee made a formal request to the lower authorities. In our considered opinion and after considering the aforesaid judgment, no addition can be made on the basis of which violate principle of natural justice. 2019 (9) TMI 184 Reopening of assessment u/s 147 - information received from the Sales Tax Authorities in connection with bogus seller/hawala dealer - HELD THAT:- Assessee submitted his explanation by virtue of letter dated 04.03.2015 but the same was not found justifiable by the AO. AO invoked the power u/s 147/148 of the Act on the basis of information received from the Sales Tax Authorities in connection with bogus seller/hawala dealer. As decided the matter of controversy in the case of Shoreline Hotel P. Ltd. Vs. CIT [ 2018 (9) TMI 1248 - BOMBAY HIGH COURT] in which it is specifically held that the AO has justifiably invoked the power on the basis of information received from the Sales Tax Department. Case CIT invoked the power u/s 263 of the Act but the principle is the same and accordingly, we are of the view that the law settled in the case of Shoreline Hotel P. Ltd. Vs. CIT is quite applicable to the fact of the present case, therefore, we upheld the finding of the CIT(A) on these issues. Accordingly, we are of the view that the AO has rightly invoked the power u/s 147/148 of the Act on the basis of the information received from the Sales Tax Department. Accordingly, we decide these issues in favour of the revenue against the assessee. Addition i.e. 12.5% of the bogus purchase - HELD THAT:- In the settled law in SIMIT P SHETH [ 2013 (10) TMI 1028 - GUJARAT HIGH COURT] the profit embedded to the transaction was taken into consideration and in these cases, the profit embedded to the transaction was to the extent of 12.5%. In the instant case, the profit is very low. Taking into account, all the facts and circumstances, we are of the view that the end of justice would met if the addition be restricted to the extent of 6% of the bogus purchase. Accordingly, we set aside the finding of the CIT(A) on this issue and restrict the addition to the extent of 6% of the bogus purchase. 2019 (9) TMI 165 Penalty u/s 271E - repayment of deposits in cash made by the assessee to her related persons - default u/s 269T - first burden to establish that there existed a loan or advance - HELD THAT:- Since the tax effect involved in this matter is less than ₹ 2 crores, we see no reason to interfere in this matter. The special leave petition is dismissed, leaving all the questions of law open. 2019 (9) TMI 164 Monetary limit - low tax effect - HELD THAT:- Recently, the CBDT vide Circular No.17/2019 Dated 08.08.2019 amended its earlier Circular No.3/2018 (Supra) whereby it has been directed that monetary limit for filing the Departmental appeal in Income Tax Cases may be enhanced further through this amendment in para-3 of the Circular mentioned above and accordingly, the monetary limit for filing the appeal before the Appellate Tribunal have been enhanced to ₹ 50 lakhs. Since Circular No.17/2019 Dated 08.08.2019 have been issued to amend its earlier Circular No.3/2018 dated 11.7.2018 (Supra), therefore, all the conditions of earlier Circular No.3/2018 shall apply accordingly. This view is supported by the ITAT, Ahemedabad A Bench decision passed in the case of Income Tax Officer, Ward 3(2), Ahmedabad vs. Dinesh Madhvlal Patel and 627 others passed in [ 2019 (8) TMI 752 - ITAT AHMEDABAD] CIT(DR) did not controvert the aforesaid proposition. - Decided against revenue. Customs 2019 (9) TMI 183 Demand of Interest - finalization of provisional assessment - petitioner had raised several objections substantiating that they were not liable to pay the demand amount, which were not considered - principles of natural justice - HELD THAT:- The demand notice dated 12.12.2012 is a single line demand, made without consideration of any of the objections raised by the petitioner. As a matter of fact, such demand in the year 2012, has been made on the action which came to be initiated way back in 1998. Originally, when the petitioner was summoned to participate in the enquiry in connection with levy of interest, on 23.11.2007, the petitioner had given various objections which was kept in abeyance unreasonably for more than five years - the second respondent seems to have reopened the issue on 09.01.2012, calling upon the petitioner to participate in the personal hearing. It is the consequence of those proceedings that the petitioner had appeared and given its written submissions on 24.02.2012. The petitioner is not entitled to pay the interest in the impugned demand. This Court is of the view that since the impugned demand is being set aside only on the ground of non-consideration of the objections, it would be appropriate to remand the matter back to the respondents for fresh consideration - petition allowed by way of remand. Insolvency & Bankruptcy 2019 (9) TMI 182 Maintainability of application - Section 12A of the Insolvency and Bankruptcy Code, 2016 - rejection of application on the ground that the Promoter not eligible to file the resolution plan under Section 29A cannot file the application under Section 12A of the I B Code - proceeds of crime - whether Section 29A of the I B Code is applicable to the applicant, if he intends to withdraw the petition under Section 7 or 9, if the Committee of Creditor, approves a proposal with 90% voting share, in terms of Section 12A? HELD THAT:- If any person, including the Promoter / Director is ineligible in terms of any one or more clauses of Section 29A, he/she is not entitled to file any resolution plan individually or jointly or in concert with another. 10. In so far Section 12A is concerned, it relates to withdrawal of the application filed by an applicant under Section 7 or Section 9 of the I B Code, if the Committee of Creditors with more than 90% voting share approves the proposal as is apparent from Section 12A. From Section 12A and the decision of the Hon ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [ 2019 (1) TMI 1508 - SUPREME COURT ] it is clear that the Promoters/Shareholders are entitled to settle the matter in terms of Section 12A and in such case, it is always open to an applicant to withdraw the application under Section 9 of the I B Code on the basis of which the Corporate Insolvency Resolution Process was initiated. 13. In view of the aforesaid provisions of law, we hold that Section 29A is not applicable for entertaining/considering an application under Section 12A as the Applicants are not entitled to file application under Section 29A as resolution applicant . In the present case, the Corporate Insolvency Resolution Process was initiated pursuant to an application under Section 7 filed by the Andhra Bank (Appellant herein). The application under Section 12A having been approved by the Committee of Creditors more than 90% of the voting share, it was not open to the Adjudicating Authority to reject the same and that too on a ground of ineligibility under Section 29A, which is not applicable. Assets of the Corporate Debtor - HELD THAT:- So far the assets of the Corporate Debtor is concerned, if it is based on the proceeds of crime, it is always open to the Enforcement Directorate to seize the assets of the Corporate Debtor and act in accordance with the Prevention of Money Laundering Act, 2002 - However, it will not come in the way of the individual such as Promoter or Shareholder or Director , if he pays not from the proceeds of crime but in his individual capacity the amount from his account and not from the account/assets of the Corporate Debtor and satisfies all the stakeholders, including the Financial Creditors and the Operational Creditors . There is nothing on the record to suggest that the individual property of the Promoter / Shareholder / Director who proposed to pay the amount has been subjected to restraint by the Enforcement Directorate . Therefore, even if the asset of the Corporate Debtor is held to be proceeds of crime, the Adjudicating Authority cannot reject the prayer for withdrawal of application under Section 7, if the Promoter / Director or Shareholder in their individual capacity satisfy the creditors. The order of Liquidation was uncalled for - Appeal allowed. 2019 (9) TMI 181 Maintainability of petition - Initiation of Corporate Insolvency Resolution Process (CIRP) - Corporate Debtor - default in making payment - Section 9 of Insolvency and Bankruptcy Code read with Rule 6 of Insolvency Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT:- This Bench on going through the Petition and after hearing the submissions of the Counsel for the Petitioner came to the conclusion that there is debt and default. This Bench having been satisfied with the Petition filed by the Operational Creditor which is in compliance of provisions of section 9 of the Insolvency and Bankruptcy Code admits this Petition declaring moratorium - Petition admitted - moratorium declared. FEMA 2019 (9) TMI 180 Fastening liability on a director of a company for contravention of the FERA - Offences by companies - Opportunity Notice - HELD THAT:- The adjudication proceedings are being pursued by the ED on the basis that each of the present Appellants was at the relevant time, in charge of , and responsible to NIL for the conduct of its business. There can be no doubt that the above standard for fastening liability on a director of a company for contravention of the FERA, applies to both criminal proceedings that would result following an Opportunity Notice as well as the adjudication proceedings that would follow an SCN/MFA issued under Section 51 FERA. The foundational fact that requires to be shown to exist for proceeding against a person under Section 51 of the FERA read with Section 68 (1) thereof is that such a person was at the relevant time, when the contravention occurred, in-charge of and responsible to NIL for the conduct of its business. A perusal of the adjudication notice in the present case reveals that the allegations in this regard are of a broad general nature without specifically indicating whether in fact the person was in-charge of and responsible to the company for the conduct of its business at the relevant time and was, therefore, liable for such contravention. Both the Opportunity Notice as well as the SCN are identical in this respect. While ED decided not to proceed against these Appellants on criminal side, pursuant to the Opportunity Notice issued to them, thereby implicitly accepting their explanation that they fell outside the scope of Section 68 (1) of the FERA, it seemingly adopted a different standard as far as the adjudication proceedings are concerned. The Court sees no justification for applying a different standard for fastening liability on the Appellants whether the criminal liability consequent upon the Opportunity Notice or civil liability following the SCN. There appears to be no scope for adopting a different yardstick in this regard. Judgments of the learned Single Judge are unsustainable in law. PMLA 2019 (9) TMI 179 Offence under PMLA - in the process of investigation, the Enforcement Directorate requested the banks to stop the withdrawal/transfer in the accounts - the petitioners are at liberty to make deposits in the concerned bank accounts without having the liberty to withdraw or transfer any amount from such bank accounts - HELD THAT:- Having heard the rival contentions of the parties, it would be appropriate to permit the parties to file affidavit. Let affidavit-in-opposition be filed with four weeks from date. Affidavit-in-reply, if any thereto, be filed within two weeks thereafter.The writ petition will be treated as ready for hearing immediately on expiry of the time period stipulated for filing affidavits. The parties are at liberty to mention for early hearing. So far as interim orders are concerned, I find that, there are serious charges of commission of economic offences against the petitioners. It is alleged that, the petitioners are guilty of dealing with the banks and financial institutions fraudulently. It would, therefore, be inappropriate to permit the petitioners to operate the bank accounts in the manner as prayed for, at this stage. Service Tax 2019 (9) TMI 178 Time Limitation - Liability of service tax - Clearing and Forwarding Agent Service - Storage and Warehousing Service - Packing Services Goods Transport Agency Service - HELD THAT:- The contentions raised by the appellant relates to the factual verification, which cannot be done at the level of the Tribunal. Extended period of limitation - HELD THAT:- In the absence of any evidence to the contrary indicating any mala fide on the part of the assessee, the extended period of limitation was not available to the Revenue. However, a part of the demand falls within the limitation period and as such, we have not given any findings on merits on the ground of factual verification. The matter remanded to the Original Adjudicating Authority to deal with the merits of the case for the period falling within the limitation and to re-decide the same after taking into consideration the appellant s contention - appeal allowed by way of remand. Central Excise 2019 (9) TMI 177 Period of limitation for filing an appeal before Commissioner(Appeals) - failure of the Commissioner(Appeals) and CESTAT to follow the directions of the HC - demand of duty - Aluminium Dross - HELD THAT:- The ground of time bar is a technical bar to the maintainability of the appeal before the competent forum and even if beyond a period, the time bar cannot be relaxed by the Appellate Authority itself, but, when once there was an intervention by the High Court under Article 226 of the Constitution of India and the learned Single Judge of this court clearly expressed in the order that a period of approximately six years was to be excluded from the period of limitation, merely because the learned Single Judge did not direct further to decide the Appeal on merits, in our opinion, the learned CESTAT should not have dismissed the Appeal on the same ground without deciding the merits of the Appeal. Even both the first Appellate Authority and the final Appellate Authority ought to have decided the Appeal on merits at least after the intervention of this court under Article 226 of the Constitution of India. The impugned order passed by the first Appellate Authority as well as the Tribunal are set aside and the Appeal is restored to the Commissioner(Appeals) where the parties may appear in the first instance without any further notice on 12.9.2019 and the said Commissioner(Appeals) will decide the appeal on merits, in accordance with law, after giving reasonable opportunity of hearing to both the parties within a period of six months from today - Appeal disposed off. 2019 (9) TMI 176 Refund of CENVAT Credit - payment under protest - time limitation - unjust enrichment - HELD THAT:- It is seen from the impugned order that the original authority, having subjected the refund claim to the twin tests of unjust enrichment and limitation of time, thought it fit to sanction only the claim pertaining to the period between January 2003 and September 2006. The propriety and legality of this claim did not appear to have been challenged by the jurisdictional Commissioner of Central Excise and hence the lack of eligibility to exemption N/N. 74/1993-CE dated 28th February 1993. The first appellate authority has affirmed the decision of the original authority that such payments as were made under protest alone are eligible for refund and none other - there is nothing on record placed by the appellant to contest this finding of operation of bar of limitation. Appeal dismissed. 2019 (9) TMI 175 CENVAT Credit - suppression of facts - Rule 9(1)(bb) of CENVAT Credit Rules, 2004 - Department was of the view that as per Rule 9(1)(bb) of CENVAT Credit Rules, 2004, the challan for availing the credit is not a valid document as the amount was not paid by BPS to the Government and it amounted to suppression of facts with intent to evade payment of duty by the service provider namely BPS - HELD THAT:- In the present case, the service provider though collected the service tax from the appellant has failed to deposit with the Government. The appellant has made arrangements to adjust their dues pending with the service provider and paying the service tax on behalf of the service provider. The letter dated 21.12.2016 issued by the service provider (BPS) to appellant would establish that they have paid the service tax on behalf of BPS after adjusting all the pending dues between parties. Thus, it is very much clear from the facts that the appellant has paid the service tax at the time of paying the service charges - Merely because the service provider failed to deposit the same with the Government, the credit cannot be denied at the end of the service recipient. The Tribunal in the case of M/S LG ELECTRONICS INDIA PRIVATE LIMITED, BHARAT BHUSHAN SHARMA MANAGER VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, NOIDA [ 2016 (11) TMI 21 - CESTAT ALLAHABAD] had occasion to analyse the similar issue and held that non-payment of service tax by service provider cannot be a ground for denying credit at the end of the service recipient. The disallowance of credit is unjustified - appeal allowed - decided in favor of appellant. 2019 (9) TMI 174 Abatement of duty - closure of the factory - Compounded Levy Scheme - manufacture of Kamyab brand Pan Masala and Kamyab brand Zarda factory sealed for 20 days - denial of abatement on the ground that the appellant did not clear the earlier manufactured goods within a period of two days - HELD THAT:- In the absence of any dispute that during the period of abatement, the assessee s factory admittedly remained closed thus earning the abatement in terms of the said Rules and mere clearance of the earlier manufactured goods beyond the period of two days, by itself cannot be adopted for denial of the abatement. The condition of clearance of pre-manufactured goods within a period of two days of the closure of the factory is meant for avoiding any misuse of the facility given to the manufacturers as the goods in question are prone to evasion - However, when it is otherwise established and is not disputed by the Revenue that the substantive condition of the Notification which is the sealing of the machines and consequent closure of the factory stand satisfied, the clearance within two days being only a technical condition, has to be interpreted in a manner leading to justice to the assessee. Denial of abatement is not justified - appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2019 (9) TMI 173 Input tax credit - deemed assessment under Section 22(2) of TNVAT Act - sub-sections (1) and (2) of Section 27 of TNVAT Act - time limitation - HELD THAT:- The arguments advanced by learned Revenue Counsel, may have become acceptable if the first revisional noticed dated 26.09.2017 had not culminated in a revised assessment order after obtaining objections from the writ petitioner dealer. The fundamental and cardinal principle in limitation is that the remedy is barred, but the right is not extinguished. If the rival pleas are tested using this cardinal principle as touchstone, it emerges clearly that if the rights to revise the assessment order is construed as a statutory right under TNVAT Act, the rights do not get extinguished, but the proceedings cannot be commenced after the period of limitation. This Court is left with the considered view that it would be appropriate to set aside the impugned order, but direct the respondent to redo the revised assessment based on the first revisional notice without adding any material or without adding new points to the same. Impugned order set aside - respondent is directed to redo the second revised assessment order - petition allowed by way of remand. 2019 (9) TMI 172 Interest on delayed refund - Section 54(1)(aa) of Gujarat Sales Tax Act, 1969 - relevant time - date of deposit of the tax till the date of the assessment order - excluding the period during which the appeals were pending but the delay was not attributable to dealer - whether the third proviso to Section 54 would be applicable to sub-clause (1)(aa) of Section 54? HELD THAT:- Generally speaking, a proviso is intended to limit the enacted provision so as to except something which would have otherwise been within it or in some measure to modify the enacting clause. Sometimes a proviso may be embedded in the main provision and becomes an integral part of it so as to amount to a substantive provision itself. The third proviso is in context with Section 54(1)(a) and (b). The third proviso will have no application so far as Section 54(1)(aa) is concerned. Explanation 1 to the third proviso makes the picture further clear. Explanation 1 clarifies that if the delay in granting the refund within the period specified in clause (a) or (b) is attributable to the dealer, whether wholly or in a part the period of the delay attributable to him shall be excluded from the period for which interest is payable. If the third proviso as invoked by the respondents is not applicable and could not have been invoked, the entire calculation of the amount by wrongly excluding the period would be incorrect. The entire exercise will have to be undertaken afresh keeping in mind what has been observed by this Court in this judgement, more particularly, the fact that the third proviso could not have been invoked as the same is not applicable - In the peculiar facts of the case and also having regard to the fact that this is a long drawn litigation, this time we direct the Commissioner himself to look into the matter afresh - matter on remand. 2019 (9) TMI 171 Efficacious alternative remedy of appeal - stay on recovery of dues - works contract - deemed sale - Section 34(2) of the Gujarat Value Added Tax Act, 2003 - whether the respondent No.2 committed any error in passing the impugned assessment order? HELD THAT:- It appears from the materials on record that the writ applicant is a Government approved works contractor since 1967. The writ applicant has so far undertaken the works contracts for various government, semi-government and other such entities. It appears that the writ applicant has been consistently following a method of accounting wherein the material used in the contract is marked-up with the gross profit to quantify the deemed sale and on the said deemed sale the tax is worked out at the applicable rate. As against this tax liability, the input tax credit which is available on the purchases and TDS under Section 59B would be reduced so as to work out the net tax liability. It appears from the materials on record that such method of accounting was accepted by the department till the recent past and the assessments for the earlier years were also framed accepting such method. It appears that the respondent No.2 has not considered the tax audit report containing the contract wise information alongwith the details of the allowable expenditure. The same is on record. It also appears prima facie that the figures of the total contract receipts, total purchases and allowable expenditure, though duly computed and quantified, have not been looked into or discussed. The respondent No.2 has observed in his impugned assessment order that the method adopted by the writ applicant is not in accordance with Section 2(30)(c) of the GVAT Act. We also take notice of the fact that as regards the penalty under Section 34(12) of the Act, only a cyclostyle penalty notice without indicating the nature of infraction has been issued. The matter remanded to the respondent No.2 for a fresh consideration with a direction to re-consider the matter, having regard to the materials on record and after hearing the writ applicant. 2019 (9) TMI 170 Validity of revised assessment order - TNGST Act - withdrawal of statutory appeal pending before the second respondent even before filing the application on 29.03.2012 under Samadhan Act by invoking Section 5(1) of Samadhan Act - Section 4 of Samadhan Act. HELD THAT:- There is no difficulty in accepting the submission of learned counsel for writ petitioner that the impugned order is bad for rejecting the Samadhan application of writ petitioner by refusing the settlement on the sole ground that statutory appeal is pending before the second respondent appellate authority. This Court deems it appropriate to set aside the impugned order of the third respondent and remit the matter back to the third respondent for disposal of writ petitioner's Samadhan application dated 29.03.2012 filed under Section 5(1) of Samadhan Act - petition allowed by way of remand. Indian Laws 2019 (9) TMI 169 Appointment of an arbitrator for adjudication of the disputes between the common appellant and the respondent - Section 11(6) of the Arbitration and Conciliation Act, 1996 - whether the Arbitration Applications, on the facts of this case, are barred by limitation? HELD THAT:- Since notice was served to the respondent in 2002, the provisions of the 1996 Act will be deemed to apply to the present Arbitration Applications filed by the appellant. However, it remains to be examined separately whether the aforesaid Applications have been filed within the statutory limitation period - Section 43(1) and (3) of the 1996 Act is in pari materia with Section 37(1) and (4) of the 1940 Act. It is well settled that by virtue of Article 137 of the First Schedule to the Limitation Act, 1963 the limitation period for reference of a dispute to arbitration or for seeking appointment of an arbitrator before a Court under the 1940 Act. The period during which the parties were bona fide negotiating towards an amicable settlement may be excluded for the purpose of computing the period of limitation for reference to arbitration under the 1996 Act. However, in such cases the entire negotiation history between the parties must be specifically pleaded and placed on the record. The Court upon careful consideration of such history must find out what was the breaking point at which any reasonable party would have abandoned efforts at arriving at a settlement and contemplated referral of the dispute for arbitration. This breaking point would then be treated as the date on which the cause of action arises, for the purpose of limitation. The threshold for determining when such a point arises will be lower in the case of commercial disputes, where the party s primary interest is in securing the payment due to them, than in family disputes where it may be said that the parties have a greater stake in settling the dispute amicably, and therefore delaying formal adjudication of the claim. In the present case, the appellant company vaguely stated before this Court that it was involved in negotiation with the respondents in the 14 years preceding the application dated 4.10.1997 before the Settlement Committee. However it did not place on record any evidence to show when it had first made a representation to the respondent in respect of the outstanding amounts, and what was the history of their negotiation with the respondents such that it was only in 1997 that they thought of approaching the Settlement Committee. Further, they have not brought anything on record to show that they were required to proceed before the Settlement Committee before requesting the appointment of an arbitrator. The arbitration clause does not stipulate any such requirement. In the absence of specific pleadings and evidence placed on record by the appellant with respect to the parties negotiation history, this Court cannot accept the appellant s contention that it was only after the respondent s letter dated 18.12.1999 that the appellant could have contemplated arbitration in relation to the outstanding amounts. Even if we were to include the time spent proceeding before the Settlement Committee, the limitation period, at the latest, would have started running from 4.10.1997 which is when the appellant made a representation to the Settlement Committee and the Committee failed to respond to the same. Appeal dismissed - decided against appellant. 2019 (9) TMI 168 Relief of permanent injunction - restraint on respondents/defendants from putting up any construction in the suit property - appointment of advocate to resolve the dispute - main contention of the revision petitioner/plaintiff is that though the respondents/ defendants 2 and 3 are aware of the fact that the suit property belongs to the Central Government, they attempted to tresspass into the suit property - time limitation. HELD THAT:- In the instant case, the revision petitioner/plaintiff did not seek for recovery of possession of the suit property from the defendants, especially when they admitted that the defendants had constructed a building in the suit property. Further more, it is seen from the written statement that the defendants have questioned the title of the plaintiff to the suit property. In such circumstances, it is the bounden duty of the plaintiff to seek for a relief of declaration of their title to the suit property and for recovery of possession of the same from the defendants, which has not been done by the plaintiff in the instant case. As per Article 113 of the Limitation Act, right to sue accrues when there is an accrual of the rights asserted in the suit and an unequivocal threat by the defendant to infringe the right asserted by the plaintiff in the suit and the period of limitation is 3 years - In the instant case, even though the revision petitioner/plaintiff admits that the defendants had completed the construction over the suit property at the time of disposal of petition, they did not file a petition to amend the plaint for inclusion of the prayer for recovery of possession from the defendants. In the instant case, on the date of filing of amendment petition, admittedly the revision petitioner/plaintiff was not in possession of the suit property - On the other hand, the respondents/defendants have put up construction over the suit property and they have also alleged in their written statement that as per the proceedings of the Board of Revenue in G.O.Ms.No.2953, Public Works Department dated 30.09.1947, the suit property was transferred to the Police Department and thus, they have exclusive right over the suit property. Seeking for amendment of the plaint for inclusion of the prayer of mandatory injunction for demolition of the construction is not appropriate and inview of the reasons expressed by me in the preceedings paragraphs, such a relief sought for by the revision petitioner/plaintiff is also barred by limitation - appointment of an advocate commissioner is not also necessary to resolve the dispute between the parties in the instant case. Revision petition dismissed. 2019 (9) TMI 167 International Competitive Bidding - impact of rate of GST on the price - rejection of petitioner s price proposal - grievance of the petitioner is that having submitted a higher total price summary respondent authorities ought to have rejected the same submitted by respondent No. 4 by declaring it unresponsive . HELD THAT:- Ongoing through the terms of the RFP, it is clear that parties submitting the price bid had no option or discretion in respect of the rate at which they could quote GST. None of the bidders could gain any advantage by quoting the rate of GST as per their discretion. The total price summary quoted by the parties, as per the scheme of the RFP was to form the basis of evaluation inter se the parties. As far as the component of GST is concerned, the same was required to be included as applicable . Admittedly, GST at the rate of 12% was applicable for the works in question at the time of evaluation of price bid. The requirement of GST as applicable clearly meant rate applicable. The scheme of the RFP is such that the price summary, insofar as it relates to GST, taxes and levies, is dependent upon the rate applicable. There was no discretion in the bidders or the employer to consider and include GST at a rate other than that which is applicable. Submission of total price summary including GST at a rate other than that which is applicable, therefore was a discrepancy. Likewise, petitioner did not have the option of submitting total price summary containing mounting structure with junction boxes lesser in number than what was required. Submission of such total price summary by the petitioners, therefore also constituted a discrepancy. Authorities were therefore correct in allowing rectification of such discrepancies in total price summary submitted by respondent No. 4 as well as the petitioners, after observing the procedure available in clause 2.21 of the RFP. In fact, if such discrepancies in total price summary were not corrected, the same would have resulted in an incorrect evaluation of total price summary submitted by both parties. This would have been to the detriment of the entire project and public interest. In the instant case, parties, i.e. the petitioner, respondent No. 4 as well as the employer, in the process of evaluation of the total price summary have all considered the provisions of the RFP to allow removal of discrepancy. The three parties in view of the facts taken note of above have acted accordingly and participated in the process and both petitioner, as well as respondent no. 4 have availed opportunity in the process of removal of discrepancy. The parties were thus ad idem in respect of the scope of discretion in the RFP for removal of discrepancy. Accordingly this Court would not find any fault in the action of the PSCL in allowing removal of discrepancy as per the procedure prescribed in the RFP. The discretion exercised by the respondent authorities was as per their bonafide understanding and in furtherance of the objectives intended in Clause 8 of RFP. The discretion to allow removal of discrepancy was as per the procedure prescribed in clause 2.21 of the RFP. This procedure was invoked to allow removal of discrepancy uniformly and without any discrimination in favour of both petitioner as well as respondent No. 4. Result of the exercise/discretion of the authorities is that lowest bidder has come to be selected and as such neither interest nor public purpose has suffered in the process. Petitioners have made no specific allegation of mala fide. In the circumstances there is no occasion for this Court to interfere with the discretion exercised by the authorities rejecting the price proposal submitted by the petitioners - petition dismissed. 2019 (9) TMI 166 Smuggling - white powder/methaqualone - whether the application made under Section 169 of Cr. P.C. can be treated as application made under Section 321 of Cr. P.C.? - HELD THAT:- In the present case, it is unambiguous that the application is made under Section 169 of Cr. P.C. The section itself is quoted by the prosecutor and it is mentioned that since the evidence against the accused is inadequate to adjudge their prosecution, it is respectively prayed that they be released from custody. In Section 169 of Cr. P.C. the discretion to make such application is left to officer in-charge of the police station and he may release the accused on his executing a bond with or without surety and may direct to appear if and when so required - Under Section 321(a) if before charge such withdrawal is made, then the accused shall be discharged in respect of the offence. Under Section 321(b) if it is made after the charge, then it shall be acquittal. Under Section 169 of Cr. P.C. accused is released. Thus, the terms used are to be understood with appropriate meaning, they do not carry same connotations so the effect. In the present case, the order passed by the Learned Magistrate is based on misconception of law and ex facie illegal considering the scope of Sections 169 and 321 of Cr.P.C. Sections 169 and 321 of Cr.P.C. cannot be substituted for each other. They can be invoked in different circumstances and the Court s power after invocation of these two sections are not the same and therefore, it is a fit case to be entertained under writ jurisdiction. It is the application under Section 169 of Cr. P.C. The Learned Judge has also treated the application under Section 169 and therefore, he did not mention a word about giving consent for withdrawal of the accused from the prosecution. Therefore, it is not a mentioning of mere wrong section but it is the application specifically under Section 169 of Cr. P.C. Later the Investigating officer has filed the affidavit and has stated that he did not want to release the accused and therefore, he did not want to move such application under Section 169 of Cr. P.C. The roznama discloses that Investigating officer was not present when this application was moved by the prosecutor. The Learned Judge has accepted the application as it is made by the Learned Prosecutor. Under such circumstances, the application moved by the Prosecutor under Section 169 is illegal and so the order passed therein. The status of the respondents is restored as accused in the said case - respondents/accused are already out of the prison and therefore, in all fairness, no coercive action is to be taken against them for a period of one month from the date of the filing of the complaint.
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