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Direct Tax Vivad Se Vishwas Act| Delay Can Be Condoned In Unforeseen Circumstances: Allahabad High Court

CASE TITLE: Digvendra Pratap Singh vs. Union Of India And 2 Others [Writ Tax No. – 1510 of 2022]

DECIDED ON: 11.08.2023

CORAM: Hon’ble Siddhartha Varma,J. Hon’ble Arun Kumar Singh Deshwal,J.

INTRODUCTION

Last Friday, the Allahabad High Court granted permission to the petitioner to avail benefits under the Direct Tax Vivad Se Vishwas Act, 2020, even though their application under the Act was submitted three days after the stipulated period. The Court clarified that granting a condonation of delay in exceptional situations does not automatically extend the scope of the scheme.

The Parliament introduced the Direct Tax Vivad Se Vishwas Act, 2020 (referred to as the 2020 Act) with the aim of resolving disputes related to taxes, providing taxpayers relief from interest and penalties on outstanding taxes. As per the provisions of the 2020 Act, individuals wishing to settle contested tax amounts are required to submit a declaration under section 4 of the Act to the designated authority. Upon receipt of this declaration, the Authority is responsible for issuing a certificate to the declarant containing details of the tax arrears and the payable amount. Subsequently, the payment must be made by the deadline determined by the Ministry of Finance.

FACTS

For the Assessment Year 2010-11, the petitioner fulfilled the requirement by submitting their declaration on 5.6.2020 as mandated under Section 4 of the 2020 Act. The declaration certificate issued by the designated authority in Form-III, as outlined in Section 5 of the Act, was also uploaded on the portal by 9.11.2020. The petitioner was obligated to make a payment of Rs. 18,67,137/- on or before 31.12.2020.

The Ministry of Finance extended the deadline for payment under the scheme through various notifications. On the final deadline, which coincided with a Sunday, the petitioner delivered a check. However, due to the day being a Sunday, the payment receipt was issued on 3.11.2021. Subsequently, the petitioner was disqualified from availing benefits under the 2020 Act due to the three-day delay.

The Chairman of the Central Board of Direct Taxes declined the petitioner’s request for condonation of the delay, citing the notification that established the last deposit date as 31.10.2021, with no room for further extension.

The petitioner’s representative argued that unforeseen and external circumstances, along with legal hindrances, should be considered when granting an extension for depositing the remaining amounts. Reference was made to the case of Shekhar Resorts Ltd. vs. Union of India and others, where the Supreme Court held that condoning a delay in the presence of a legal obstacle does not constitute an extension of the scheme but rather a remedial measure.

The respondent’s counsel, however, relied on the case of M/s Ken Computek Pvt. Ltd. vs. Designated Committee (SVLDRS) and others, wherein the Supreme Court observed that the prescribed deadline for depositing the balance of tax under the 2020 Act scheme cannot be prolonged.Top of Form

 

CASE ANALYSIS AND DECISION

The bench, consisting of Justices Siddhartha Verma and Arun Kumar Singh Deshwal, noted that in a similar factual scenario, the Supreme Court in the case of Shekhar Resorts Ltd. vs. Union of India and others, as well as the Delhi High Court in I.A. Housing Solution Pvt. Ltd. vs. Principal Commissioner of Income Tax-4, had granted the petitioner the benefit of the scheme. Consequently, the petitioner was entitled to the benefit, as they had demonstrated good faith by submitting the check on the final day. The incident that caused the delay was an unforeseen event beyond the petitioner’s control.

In regard to the decision referenced by the Respondent, the Court held:

“While in the judgment of M/s Ken Computek Pvt. Ltd. vs. Designated Committee (SVLDRS) and others, delivered in SLP (C) No. 2116 of 2023, the Supreme Court did not address the issue of condoning delay in exceptional circumstances, it only observed that the benefits of the scheme cannot be extended beyond the timeline prescribed by the scheme.”

In line with this, the writ petition was granted and accepted.

approving bail, leading to the dismissal of the defendant’s bail plea.

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Allahabad HC Denies Bail To 19 Y/O ‘Lashkar-e-Taiba Associate’ Accused Of Promoting Arms Acquisition Through WhatsApp

CASE TITLE: Inamul Haq Alias Inamul Imtiyaz vs. State of U.P [CRIMINAL MISC. BAIL APPLICATION No. – 7241 of 2023]

DECIDED ON: 09.08.2023

CORAM: Hon’ble Pankaj Bhatia,J.

INTRODUCTION

Last week, the Allahabad High Court declined to grant bail to a 19-year-old individual who was reportedly linked to the ‘Lashkar-e-Taiba’ group. The person had been apprehended by the Anti-Terrorist Squad (ATS) of the Uttar Pradesh Police the previous year on charges of disseminating animosity, advocating sentiments against India, and assisting in the procurement of weapons through WhatsApp groups.

In light of the accusations directed at the individual named Inamul Haq, also known as Inamul Imtiyaz, Justice Pankaj Bhatia’s panel noted that even though the freedom to practice and promote religion is safeguarded by Article 19, the nature of the allegations outlined in the First Information Report (FIR) indicates that the accused cannot be considered exempt from the provisions of the second part of Section 121-A IPC.

FACTS

Reportedly, the First Information Report (FIR) was filed against the accused under Sections 121-A and 153-A of the Indian Penal Code (IPC) and Section 66 of the Information Technology (IT) Act. The accusations revolved around his alleged creation of a WhatsApp group where he shared literature with potential jihadi connotations and uploaded videos of a similar nature.

The FIR also detailed that the individual in question confessed to aspiring to become a jihadi and acknowledged his affiliation with the Lashkar group. According to the FIR, he claimed to have maintained a WhatsApp group for approximately 15-16 years, comprising 181 members, including 170 from Pakistan, 3 from Afghanistan, and 1 each from Malaysia, Bangladesh, and India. Furthermore, he was accused of actively promoting arms acquisition and propagating the group’s ideology based on religious biases.

In his bid for bail, the accused approached the High Court, with his representative (Advocate Shivam Yadav) contending that the allegations in the FIR did not prima facie establish his involvement under Section 121-A IPC. It was argued that he had been in custody since March 14, 2022, and the offenses attributed to him were punishable by a maximum of five years’ imprisonment. Conversely, the state’s legal representative opposed his bail application, citing the allegations detailed in the FIR.

Against this context, the Court initially examined Section 121A IPC (Conspiracy to commit offenses punishable by section 121). The Court additionally observed that the accusations against the accused and the contents of the FIR indicated that he managed two WhatsApp groups primarily composed of foreign nationals. These groups were allegedly involved in promoting arms procurement and advancing the group’s agenda based on religious biases.

CASE ANALYSIS AND DECISION

Given these charges leveled against the defendant, the Court determined that the accused cannot be deemed to have violated the second portion of Section 121-A IPC. As a result, due to the seriousness of the accusation, the Court concluded that there was no basis for approving bail, leading to the dismissal of the defendant’s bail plea.

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In A Rare Tiebreaker, Allahabad High Court Grants Interim Protection To Indiabulls Officers In FIRs By Shipra Group

CASE TITLE: Reena Bagga and Another vs. State of UP and 2 Others [Criminal MISC. Writ Petition No. – 11837/2023] and Himri Estate Pvt. Ltd. and 4 Others v. State of UP and 2 Others [Criminal MISC. Writ Petition No. – 11838/2023]

DECIDED ON: 08.08.2023

CORAM: Hon’ble Samit Gopal, J.

INTRODUCTION

Resolving divergent opinions concerning the suspension of the First Information Report (FIR) lodged by the Director of Shipra Estate against officials of Indiabulls Housing Finance Ltd. concerning disagreements related to a loan facility they had utilized, the Allahabad High Court has determined that without affording time for the Advocate General and the complainant’s legal representative to seek guidance, it is an appropriate situation to offer provisional safeguard.

Justice Samit Gopal, who was assigned the case as the third judge following a division in the bench of Justices Vivek Kumar Birla and Rajendra Kumar-IV, has ruled in favor of the officers of IHFL.

FACTS

The officers of IHFL expressed their discontent with the proliferation of legal actions stemming from a solitary loan transaction. Justice Kumar declined to grant immediate relief, citing the hasty progression of the matter and the lack of time afforded to the Additional Government Advocate (AGA) to gather guidance. He opined that the appropriate course was to allow the AGA the necessary time for instruction before delivering a consequential verdict that might adversely impact the opposing party.

On the contrary, Justice Birla supported the interim protection for the petitioners, drawing on the precedent set by Gagan Banga vs. Samit Mandal & another (2023). In this case, similar FIRs were under consideration, and the Supreme Court had granted protection to the financial institution and its officers.

The case was elevated to the Chief Justice’s attention, who subsequently delegated it to a third judge to solicit an opinion.

Currently, Justice Gopal has aligned with Justice Birla’s perspective, expressing:

“After reviewing the Supreme Court’s ruling in the matter of Gagan Banga vs. Samit Mandal & another: Contempt Petition (Civil) No. 774 of 2023 in Criminal Appeal No. 463 of 2022, along with the decision rendered by a Division Bench of this Court in Criminal Misc. Writ Petition No. 10893 of 2023 (Neeraj Tyagi and another vs. State of U.P. and 3 others), and considering the nature of the incident pertaining to financial institutions or money lenders pursuing recovery actions for their legitimate debts, with the proceedings adhering to the same trajectory, it is a suitable scenario to extend interim protection to the petitioners.”

In light of Shipra Group’s failure to fulfill its loan obligation to IHFL, Shipra Mall, an asset of the Shipra Group, was auctioned by IHFL. Himri Estate emerged as the successful bidder and acquired the mall.

Representative Mohit Singh of Shipra Group lodged several FIRs against IHFL officers and Himri Estate Pvt. Ltd. He alleged that the sale of Shipra Mall was illicit due to its undervaluation, resulting in substantial state revenue loss. Moreover, he claimed that specific officers were illicitly obtaining land in the vicinity, labeling them as land mafia from Delhi and NCR.

Conversely, the Additional Advocate General, representing the State, contended that given the potential sentences being less than 7 years, the petitioners needn’t fear arrest, thus negating the necessity for interim protection at this stage.

Additionally, the Informant’s legal counsel argued that the allegations against the petitioners extended beyond Shipra Mall to encompass illegally occupied lands held by the petitioners.

CASE ANALYSIS AND DECISION

The Court noted that the matter pertained to financial dealings involving loans, their non-repayment, and the subsequent auction of assets owned by the borrower.

In response to the argument put forth by the learned Additional Advocate General that the petitioners are unlikely to be arrested and any proceedings would adhere to the directives of the Supreme Court as referenced by him, the Court clarified that the interim order’s scope extends beyond solely preventing the arrest of the petitioners; it encompasses other aspects as well, as per the Court’s determination.

The case is scheduled to be heard before the division bench on August 11, 2023.

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In Most Cases, Women File False FIRs Under POCSO/SC-ST Act Using It As A Weapon To Grab Money From State: Allahabad HC

CASE TITLE: Ajay Yadav vs. State Of U.P. And 3 Others 2023 LiveLaw (AB) 254 [CRIMINAL MISC ANTICIPATORY BAIL APPLICATION U/S 438 CR.P.C. No. – 7907 of 2023]

DECIDED ON: 10.08.2023

CORAM: Hon’ble Shekhar Kumar Yadav,J.

INTRODUCTION

The Allahabad High Court made a remark on Thursday stating that it is regrettable that currently, a significant number of cases involve women submitting untrue FIRs under the POCSO/SC-ST Act with the intention of exploiting it as a means to extract funds from the government. The Court emphasized the need to halt this trend.

The Court highlighted the trend of these baseless FIRs, which are primarily aimed at securing monetary gains from the government. This practice has the harmful consequence of tarnishing the reputation of innocent individuals within the community.

FACTS

The recent statement from the Allahabad High Court lamented the unfortunate trend where a significant number of women are currently submitting false FIRs under the POCSO/SC-ST Act, utilizing it as a strategy to obtain financial gains from the government. The Court expressed its concern about this practice and emphasized the need for its cessation.

The Court observed that these fabricated FIRs are primarily aimed at extracting money from the government, leading to the detrimental consequence of tarnishing the reputation of innocent individuals within society.

Addressing the prevailing issue of increasing instances of sexual violence, the bench of Justice Shekhar Yadav further remarked, “Considering the widespread and consistently growing occurrences of such acts, I believe that it is essential for both the State of U.P. and the Union of India to recognize the gravity of this matter.” This observation was made while granting anticipatory bail to a rape accused.

The accused was alleged to have committed rape against the victim in 2011, yet the FIR was filed in March 2019, approximately 8 years after the purported incident. In his pursuit of anticipatory bail, the accused’s legal counsel argued that the victim had not provided a reasonable explanation for the significant delay in lodging the FIR. The defense contended that the accused had been falsely implicated in an attempt to harass him, asserting that the alleged incident never occurred as described in the FIR.

The defense also highlighted that the victim herself had admitted to engaging in a physical relationship with the accused, indicating her consent and confirming her age as over 18 years. Additionally, it was brought to the court’s attention that a co-accused had already been granted anticipatory bail, prompting the defense to request the same relief for the accused in question.

CASE ANALYSIS AND DECISION

After considering the content of the First Information Report (FIR) and the arguments presented by the accused’s legal representative, the Court made an observation that there exist significant inconsistencies in the victim’s statements recorded under Sections 161 and 164 of the Criminal Procedure Code (Cr.P.C.).

The Court also highlighted that according to the details provided in the FIR, it was stated that the accused engaged in a physical relationship with the victim in 2012. However, in the statement given under Section 161 of the Cr.P.C., the victim asserted that the accused had such a relationship with her in 2013.

Given these circumstances, the Court issued a directive specifying that if it is determined that the FIR filed by the victim is unfounded, then a proper inquiry will be conducted and criminal proceedings under Section 344 of the Cr.P.C. will be initiated against the victim. Additionally, the Court mandated that any financial assistance provided to the victim by the State will be reclaimed from her.

In a recent incident last month, the Allahabad High Court imposed a fine of Rs. 10,000 on a woman who openly admitted to submitting a false FIR against four men, falsely accusing them of rape and unnatural sexual acts against her.

The Court further emphasized that the act of filing FIRs containing fabricated and grave allegations of rape cannot be condoned. Such a practice must be handled with a firm approach, according to the Court’s statement, as it necessitates a severe response.

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Ineligibility Of Arbitrator As Per S.12(5) Arbitration Act Can’t Make Arbitration Clause Itself Invalid: Allahabad High Court:

CASE TITLE: M/S Bansal Construction Office v. Yamuna Expressway Industrial Development Authority And 2 Others 2023 LiveLaw (AB) 250 [Arbitration And Conciliation APPL.U/S11(4) No. – 142 of 2019]

DECIDED ON: 04.08.2023

CORAM: Hon’ble Ashwani Kumar Mishra,J.

INTRODUCTION

The Allahabad High Court has ruled that the complete arbitration arrangement will not become void solely due to the fact that the process of selecting the arbitrator, as outlined in the agreement, is prohibited by Section 12(5) of the Arbitration and Conciliation Act, 1996.

FACTS

The Court ruled that the inclusion of Section 12(5) in the Arbitration and Conciliation Act, 1996 was intended to introduce principles of fairness and autonomy in the arbitrator selection process. Consequently, the presence of an arbitration clause in a contract cannot be interpreted in a strict manner that would exclude the possibility of arbitration itself.

The applicant was granted a contract for constructing roads near Usmanpur village, which was completed by June 30, 2017. Payments were disbursed by the authority based on ongoing bills. However, deductions were made in the final bill, leading to a dispute.

The applicant repeatedly requested the appointment of an arbitrator, which the YEIDA (Yamuna Expressway Industrial Development Authority) denied, citing that the arbitration clause was invalidated by Section 12(5) of the 1996 Act. According to Clause 33 of the contract, only the Chief Executive Officer of YEIDA is eligible to arbitrate in this matter.

Section 12(5) of the Act states that irrespective of any contrary agreements, an individual cannot be appointed as an arbitrator if they have any affiliations with either party or their legal representatives as outlined in the Seventh Schedule of the Act, unless both parties provide written consent.

The applicant’s legal representative divided the arbitration agreement into two parts: one pertaining to the dispute’s referral to an arbitrator, and the other outlining the procedure for such reference. It was further argued that the statutory provision of Section 12(5) should take precedence over the contractual autonomy granted by the arbitration agreement.

Furthermore, it was emphasized that the possibility of arbitration shouldn’t be denied solely due to a statutory provision overriding the arbitrator appointment method outlined in the agreement.

The respondent’s counsel countered that since the CEO of YEIDA couldn’t appoint an arbitrator due to Section 12(5), arbitration couldn’t be pursued at all. Citing a previous ruling by the Court in Arbitration Application No. 54 of 2017, it was argued that Section 12(5) prevented the arbitrator from arbitrating any dispute. Additionally, in the absence of a specific clause recording consent from both parties, arbitration reference couldn’t be initiated.

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CASE ANALYSIS AND DECISION

The Court noted that it is essential to interpret the arbitration clause “in a manner that reveals the genuine intention of the parties,” despite its wording seeming to exclude arbitration under Section 12(5).

In the ongoing case, when selecting an arbitrator, none of the parties involved can maintain authority while disregarding the arbitration process itself. Clause 33 of the contract in question would be secondary to the influence of Section 12(5) of the Act.

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