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25 Jul

Delhi High Court Dismissed the petition seeking overturn the order passed by Income Tax Appellate Tribunal

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Title: THE PR. COMMISSIONER OF INCOME TAX -CENTRAL -1 vs VALLEY IRON & STEEL CO. LTD.

Date of decision: 18.07.2023

+ ITA 913/2019

CORAM: HON’BLE MR JUSTICE RAJIV SHAKDHER

HON’BLE MR JUSTICE GIRISH KATHPALIA

Introduction

Delhi High Court Dismissed the petition seeking overturn the order passed by Income Tax Appellate Tribunal as the Assesee filed a return with nil gains and never had filed a revised return.

Facts of the case

The respondent/assessee suffered significant losses as a result of the floods in Himachal Pradesh and was forced to use the Corporate Debt Restructuring Scheme (“CDR”) to restructure the debts it had obtained from banking institutions, which were its lenders.

A working capital loan became a working capital term loan (“WCTL”) due to CDR, and the accumulated interest became a fund interest term loan (“FITL”).

The respondent/assessee filed a Return of Income (“ROI”) for the AY in question on November 30, 2014.The respondent/assessee updated the first ROI on September 1, 2016, (the online submission was submitted on August 29, 2016).The revision in the ROI was triggered by a revision in the tax audit

A disallowance under Section 43B of the Act was included in the original tax audit report, however it only amounted to Rs. 6,08,64,813/-. The disallowance was suo motu increased to Rs. 48,18,93,419 in the updated tax audit report.The AO first questioned the disallowance under Section 43B of the Act in a notification dated November 21, 2016, which was issued according to Section 142(1) of the Act. report, which was carried out on 26.08.2016. The tax audit report was revised by the Chartered Accountant of the respondent/assessee suo motu.

Analysis of the court

It is obvious that the assessee/respondent increased the disallowance according to Section 43B of the Act from Rs. 6,08,64,813/- to Rs. 48,18,93,419/- on their own initiative. This course correction was carried out with the submission of a revised tax audit report on August 26, 2016, which resulted in the filing of a corrected return both physically and electronically. On August 29, 2016, a revised ROI was submitted electronically. On September 1, 2016, a physical filing of the amended ROI was made.

The Tribunal stated that there is no disputing the fact that the AO initially raised a particular concern over the disallowance under Section 43B of the Act via a notification dated November 21, 2016, issued under Section 142(1) of the Act. Therefore, as rightly asserted by respondent it was not the case that the respondent/assessee made a course correction after the disallowance under Section 43B of the Act was incorrectly entered in the tax audit report, as observed by the AO.

Furthermore, there is no disputing the fact that the Gujarat High Court rendered decisions at the pertinent period that supported the respondent/assessee. For convenience’s sake, the order dated August 31, 2006 in Commissioner of Income Tax v. Gujarat Cypromet Ltd. appellant does not contest the fact that the Gujarat High Court’s position was only overturned by the Supreme Court on February 21, 2019, in a decision published in Commissioner of Income-tax, Ahmedabad v. Gujarat Cypromet Ltd., (2019) 103 taxmann.com 346 (SC). Given the above, it cannot be claimed that the respondent/assessee did not willingly increase the disallowance under Section 43B of the Act.

According to us, the Madras High Court decision in Gangotri Textiles Ltd. v. Deputy Commissioner of Income Tax, Corporate Circle 2, Coimbatore, (2020) 121 taxmann.com 171 (Madras), on which Appallant has relied, is distinguishable on the basis of facts.

Reading the Madras High Court decision would reveal that the assessee hid its profits that resulted from the sale of the subject windmills and land. In reality, the assessee had submitted a return with “nil” capital gains.

The assessee never submitted a corrected return, and only after the case was brought before the Tribunal did it finally acknowledge that such a sale had indeed occurred.

The Supreme Court’s ruling in MAK Data (P) Ltd. v. Commissioner of Income-tax-II, (2013) 38 taxmann.com 448 (SC), is also notable because it involved documents such as share application forms, bank statements, and memoranda of association for corporations, among others, that were discovered during a survey carried out in accordance with Section 133A of the Act.

In our opinion, the Madras High Court’s and the Supreme Court’s rulings in the cases of Gangotri Textiles Ltd. and MAK Data (P) Ltd. were made in contexts that were distinct from the one that arose in the current case.

Thus, for the forgoing reasons, we are not inclined to interdict the decision of the Tribunal. According to us, no substantial question of law arises for our consideration. The appeal is, accordingly, closed.

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Written By – Shreyanshu Gupta

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24 Jul

Delhi High Court dismissed the petition filed seeking impugning of an order by Debt Recovery Appellate Tribunal (DART) for not complying to the conditions

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Title: SZF EXPORTS PVT. LTD. & ANR. versus PUNJAB NATIONAL BANK & ANR.

Date of Decision: 17.07.2023

+ W.P.(C) 9408/2023

CORAM: HON’BLE MR. JUSTICE VIBHU BAKHRU

HON’BLE MR. JUSTICE AMIT MAHAJAN

Introduction

Delhi High Court dismissed the petition filed seeking impugning of an order by Debt Recovery Appellate Tribunal (DART) for not complying to the conditions of making the necessary pre-deposit.

Facts of the case

The petitioners have brought this case to contest an order made on July 14, 2023, in Miscellaneous Appeal No. 113/2023, SZF Exports Pvt. Ltd. & Anr. v. Punjab National Bank, by the Debts Recovery Appellate Tribunal, Delhi (hereinafter “the DRAT”).

The petitioners filed the aforementioned appeal in response to an order dated 22.06.2023, issued by the Debts Recovery Tribunal (hereafter “the DRT”). In that order, the DRT expressed the preliminary opinion that the respondent bank’s actions in accordance with the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter “the SARFAESI Act”) were not irregular.

The DRT had further denied the petitioners’ request to prevent the responding bank and court receiver from seizing the subject property. There is no disputing that the petitioners used the credit facilities and failed to repay them, as the Ld. DRT had acknowledged. In essence, the petitioners feel wronged by the property’s auction. The petitioners claim that Rule 9(1) of the SARFAESI Security Interest (Enforcement) Rules, 2002 (hereafter referred to as “the Rules”) was broken by the auction. According to the petitioners, the aforementioned Rule mandates that the auction buyer pay 25% of the total auction price (including any earnest money put) within 24 hours after the sale.

Analysis of the court

Rule 9(3) of the Rules’ straightforward wording makes it obvious that the deadline for paying 25% of the selling price must be calculated starting with the sale of an immovable property. The first phrase of Rule 9(3) of the Rules, “on every sale of movable property,” makes this clear. In this instance, the auction took place online on the MSTC platform on June 8, 2023.

Respondent No. 2 (hereinafter referred to as “the auction purchaser”) had entered the bidding process and had made the highest bid of 6,60,38,000/-. We do not see any merit in the petitioners’ claim that the property auction procedure was faulty. After having said the foregoing, it is important to note that the impugned decision, which the DRAT made denying to hear the petitioners’ appeal, is not based on the merits but rather on the claim that the petitioners had broken the requirement to pay the required pre-deposit. We don’t see any reason to change the contested order. Concededly, the petitioners’ chosen appeal could not be considered by the DRAT unless they made the required predeposit. It is common knowledge that the appellant has no legal entitlement to be given further time to make the deposit.

The necessary pre-deposit was reportedly not made. Consequently, we believe that the petitioners’ appeal was properly denied. This Court has also been told that PNB has acquired ownership of the disputed property.

The petition cannot be awarded any remedy. The identical is rejected.

Written By – Shreyanshu Gupta

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22 Jul

Delhi high Court quashed the FIR against the petitioner as the parties have voluntarily without any fear, force and coercion, and have decided to give quietus to the proceedings.

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Title: SH. MANOJ BISWAS AND ANR. versus STATE OF NCT OF DELHI AND ANR.

Date of Decision:17th July, 2023

+ CRL.M.C. 4808/2023

CORAM: HON’BLE MR. JUSTICE DINESH KUMAR SHARMA

Introduction

Delhi high Court quashed the FIR against the petitioner as the parties have voluntarily without any fear, force and coercion, and have decided to give quietus to the proceedings. It was a matrimonial dispute which has been amicably settled.

Facts of the case

The current appeal was submitted under Section 482 of the Criminal Procedure Code in an effort to have the case FIR No. 571/2019, which was filed at PS New Ashok Nagar under Sections IPC 498A/406/506/34 IPC, quashed as a result of a resolution. According to the case’s briefly stated facts, the petitioner No. 1 husband and respondent No. 2 wife were wed on February 5, 2018, in accordance with Hindu rituals and traditions. However, various temperamental issues and disagreements developed between the parties, and as a result, the parties have been living apart since 16.06.2019. There is one male child, Pranav Biswas, born on December 31, 2018, out of wedlock.

The parties agree that the party violating the conditions will be subject to contempt proceedings in the event of a breach, violation, or intentional or deliberate disobedience. The parties additionally concur that the defaulting party will return any advantages, rights, and benefits that have accrued in its favour, putting the parties back in the position they were in prior to the parties’ reaching such a settlement agreement.

the husband and wife have agreed that after their statements have been recorded in the first motion petition but before their statements have been recorded in the second motion petition, the wife will withdraw her current petition under Section 125 Cr.PC and complaint under Section 12 of the DV Act from the relevant courts. It is claimed and agreed upon by the parties that the respondents must file a quashing petition pursuant to section 482 Cr.P.C. within 15 days after the marriage’s dissolution date, and the wife must assist in the quashing.

Analysis of the court

According to the provisions of the agreement, the Petitioner No. 1 was required to pay the Respondent No. 2 a total of Rs. 3,00,000 in order to fully and completely resolve their differences. The first Rs. 1,90,000 was previously paid, and the second Rs. 1,10,000 was paid today using a demand draught with DD No. 460743 dated July 14, 2023, drawn on the Central Bank of India and delivered to respondent No. 2.

It is important to note that the current agreement will not influence the child’s future legal rights.

Respondent No. 2 is present and claims that she entered into the settlement willingly and without being coerced, threatened, or under any other duress. IO has correctly named the parties.

The Apex Court has often ruled that in marriage disputes, if the parties have peacefully resolved the issue between themselves, courts must support that decision. B.S. Joshi v. State of Haryana, (2003) 4 SCC 675, and Yashpal Chaudhrani and Others v. State (Govt. of NCT Delhi) and Another, 2019 SCC OnLine Del 8179, may be used as authority.

Considering that the parties reached a settlement willingly and without coercion, fear, or other pressure, I believe there would be no use in continuing the trial. Instead, they have chosen to put an end to the proceedings. It was a marital disagreement that was peacefully resolved.

The case FIR No. 571/2019 filed at PS New Ashok Nagar under Sections IPC 498A/406/506/34 IPC and all further procedures are invalidated in light of the aforementioned arguments.

Written By – Shreyanshu Gupta

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20 Jul

Delhi High Court Dismissed the Writ petition and upheld the verdict of the tribunal on the ground of DDA Authority and uniformity for the purpose of selection

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Title: KULDEEP KUMAR MALHOTRA AND ORS. versus DELHI DEVELOPMENT AUTHORITY AND ORS.

Date of decision: July 14, 2023

+ W.P.(C) 9319/2023, CM APPLs. 35472/2023, 35473/2023 & 35474/2023

AND

+ W.P.(C) 9320/2023, CM APPLs. 35480/2023, 35481/2023 & 35482/2023

UMA SHANKER BHARTI versus DELHI DEVELOPMENT AUTHORITY AND ORS

CORAM: HON’BLE MR. JUSTICE V. KAMESWAR RAO

HON’BLE MR. JUSTICE ANOOP KUMAR MENDIRATTA

Introduction

Delhi High Court Dismissed the Writ petition and upheld the verdict of the tribunal. whereby the Tribunal has dismissed the O.A. filed by the petitioners herein being bereft of any merit.

Facts of the case

The petitioners in this case are ex-servicemen who left the Indian Army after serving their regular term.

After their retirement, they were employed as Typists/Clerks on a contract basis at various times throughout the years 2010–2012 by the respondent, the Delhi Development Authority (abbreviated as “DDA”).

The letter of appointment stated that the contract may be cancelled at any moment, but the original term of employment was extended from six months to one year on a consolidated salary.

The petitions have been submitted in opposition to the termination notice of June 7, 2022. The O.A. also included a remedy for the cancellation of the policy dated December 5, 2018. The petitioners’ argument before the Tribunal was that they were bound by a policy that was announced on December 30, 2017, which stated that the age restriction would not be greater than 65 years, while they were employed as Typist/Clerk. There was a clause, nevertheless, that stated that even this age restriction of 65 may be eased in the public interest under meritorious and extraordinary circumstances.

The policy for 2018 was also contested on the grounds that it was released without the permission of a competent authority. Apart from that, they argued that the respondent DDA could not have violated the law established by the Supreme Court in the case of State of Haryana v. Piara Singh, (1992) 4 SCC 118, by implementing the policy of 2018. In that case, the Court categorically held that contractual employees cannot be replaced by another group of contractual employees, which the respondent intends to do by implementing the policy of 2018.

The respondents’ position, however, was that the petitioners had no authority over the appointment when they appeared before the Tribunal. This is especially true in light of the conditions outlined in their initial contract, which stated that their services might be terminated at any moment.

Apart from that, the contract employees can’t be hired for an indefinite amount of time because they were hired for a specific task. Additionally, the policy, which is general in nature and applies to everyone, cannot be challenged because the DDA is a government organisation. The Supreme Court’s ruling in the matter of Harsh Ajay Singh v. Union of India, W.P.(C) 11011/2022 has been relied upon.

The Tribunal rejected the O.As. filed by the petitioners.

Analysis of the court

The petitioners, who are ex-service members who resigned from the Indian Army, were first hired by the DDA for a six-month stint as typists/clerks. They lasted for approximately 12 years in accordance with that. According to the DDA’s 2017 guideline, their engagement may have lasted another 65 years. The DDA is within its rights to implement the new policy it has set for the employment of consultants and advisors, which includes engagement as typists and clerks.

The DDA claims that the policy is necessary to draw in new talent. Aside from that, they contend that the petitioners are not prohibited from being hired as consultants or advisors if that is what is deemed appropriate. If such is the case, it cannot be argued that the DDA’s policy, which mandates the engagement of consultants/advisors every five years, is arbitrary given that their attention has not been given. The petitioners’ reliance on the Piara Singh decision (above) is not appropriate given the facts of these instances since the engagement complies with the 2018 policy and is not, therefore, a temporary appointment. In other words, it is an ongoing process whosoever found fit for being engaged, shall be engaged and everyone will have equal opportunity for engagement.

The DDA actually created the 2018 policy, and it is within its rights to do so for the purpose of allowing the engagement of Consultants/Advisors. They support their claims with the fact that the Indian government has established one. In that regard, this approach has created uniformity for the selection of consultants and advisors. We concur with the Tribunal’s judgement as stated in paragraphs 21 through 24, which we have copied above. These writ petitions and associated applications are dismissed in light of the conversation we just had.

Written By – Shreyanshu Gupta

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20 Jul

Delhi High Court set aside the Show cause notice and allowed the writ of mandamus as DG’s displeasure is not a penalty stated in Rule11 of the CCS (CCA) Rules, 1965

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Title: RAJDEEP CHOWDHARY Versus UNION OF INDIA AND ORS.

Reserved on: April 25, 2023

Pronounced on: July 14, 2023

+ W.P.(C) 8135/2019

CORAM: HON’BLE MR. JUSTICE SURESH KUMAR KAIT

HON’BLE MS. JUSTICE NEENA BANSAL KRISHNA

Introduction

Delhi High Court set aside the Show cause notice and allowed the writ of mandamus directing the promotion of petitioner to the post of Deputy Commandant, if found eligible.

Facts of the case

The petitioner asserts that while employed by the 66th Battalion of the BSF as Assistant Company Commandant, he was also administratively searching for two more platoon jobs. An FIR with the number 306/2012, under Sections 8/221/29/25 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) was filed in Jaisalmer, Rajasthan on August 8, 2012, alleging the arrest of four civilians in Jaisalmer City with 8 kg of heroin and $4.35 million in Indian currency that had been smuggled from Pakistan during the previous night of August 4, 2012, to August 5, 2012.

Inspector General (IG) (Head Quarter), BSF, Jodhpur directed a staff court of inquiry to look into how the heroin entered the specified region. Nothing indicated any carelessness or laziness on the part of those in charge.

The Deputy Inspector General (DIG) SHQ, BSF advised the IG (HQ) that the investigation was finished and that no one should be held accountable until the investigation is over or the incidence has been verified by the police in light of the aforementioned inquiry report dated 6.11.2012.

The IG (HQ) on 30.05.2013 advised action against the petitioner for his involvement in failing in appropriate dominance, disregarding the report dated 06.11.2012 and suggestion of the DIG (SHQ) dated 10.12.2012. The petitioner herein was one of six BSF employees who were subject to the disciplinary process, and the DIG, BSF, recorded evidence against them on December 14, 2013.

After reviewing the material, the relevant DIG wrote his observations dated 09.04.2015 and noted that there was no evidence to support the accusation brought against the petitioner.

In the current appeal, the petitioner expresses his unhappiness about receiving a show cause notice from the DIG on May 12, 2016, even though the DG had already made the statements indicated above on April 9, 2015.

Analysis of the court

This Court notes that a staff court of inquiry was launched against the petitioner and other BSF officials in response to the filing of FIR No. 306/2012 under Sections 8/221/29/25 of the NDPS Act, and in an opinion dated November 6, 2012, it was determined that no one in charge acted carelessly or laxly.

Being dissatisfied with the recommendations, the IG recommended action against the petitioner and ROE and Addl. ROE were recorded. Although the petitioner was advised to be dismissed for the relevant offence in the Court of Enquiry dated 10.12.2012 and Recommendations dated 09.04.2015, he was still served with a Show Cause Notice dated 12.5.2016 for a preliminary intended transfer of the DG’s dissatisfaction. The petitioner submitted a response on May 18, 2016, in response to the aforementioned Show Cause Notice from May 12, 2016, and on June 24, 2016, he submitted a request asking for a promotion from April 1, 2014. However, the petitioner’s 18 May 2016 reply to the aforementioned Show Cause Notice of 12 May 2016 was denied by decision dated 22 July 2017 and he was informed of the DG’s “Displeasure”.

Now, the issue that has to be decided by this Court is whether the petitioner may be denied the promotion owing to the DG’s “displeasure”, especially after the case brought against him has been recommended to be dropped. This Court has reviewed the Minutes of DPC Meeting dated 19.02.2014 and 19.02.2015, where the “pendency of ROE” and not “displeasure” is cited as the grounds for continuing the petitioner’s case.

The petitioner bases his argument on the ruling in O.P. Nimesh (Supra), in which the petitioner, a DIG (Medical) in the BSF, requested promotion to the rank of IG (Medical) effective the day his subordinate received promotions. In the aforementioned matter, this Court made notice of two reasons for consideration: first, the DPC had indicated that the petitioner had received two grades below benchmark in the DPC’s APAR for the year 2012–2013; second, the DG’s “displeasure” statement was also cited in detail.

Both the petitioner in O.P. Nimesh (Supra) and the petitioner in front of this court have cited an OM from the Ministry of Home Affairs dated March 27, 2015, which states that “displeasure” is not a penalty stated in Rule 11 of the CCS (CCA) Rules.

In O.P. Nimesh (Supra), this Court held that “displeasure” was not a barrier to the petitioner’s promotion there and ordered the respondents to hold a review DPC and evaluate the petitioner’s case in accordance with the rules because the aforementioned OM dated 27.03.2015 had already been notified when DPC in the said case was held on 15.07.2015.

In our perspective, the petitioner was originally given the all-clear in 2012 itself. However, disciplinary process against the petitioner started on June 8, 2013, and the DIG made statements stating on April 9, 2015 that there was no proof shown against the petitioner based on the evidence presented. Reading through copies of the minutes from the DPC meetings on 19.02.2014 and 19.02.2015 reveals that his case was not taken into consideration for promotion because of the phrase “Due to pending ROE.”

Relevantly, the petitioner received the DG’s “displeasure” via a show cause notice from the DIG on 12.05.2016. In his reply on 05.06.2016 to the aforementioned Show Cause Notice from 12.05.2016, the petitioner conveyed the DG that there was no direct or indirect implication against him in the FIR in question. However, vide order dated 22.07.2016, the DIG rejected petitioners request dated 24.06.2016 conveying him DG’s “displeasure”.

The OM dated 27.03.2015, which specifies that “displeasure” is not a penalty stated in Rule11 of the CCS (CCA) Rules, 1965, has previously been made known. Moreover, “displeasure” has not been recorded against the name of the petitioner in the minutes of meetings that were conducted on February 19 and 20, 2014 and 2015, respectively. Additionally, respondents have not proven that the petitioner’s APARs in 2014 and 2015 fell short of the benchmark, which would have prevented him from being promoted.

The DPC played a significant role in assessing the cases of applicants for promotion, as observed by the Honourable Supreme Court and this Court in a number of rulings. A applicant’s overall effort, performance, and assiduity must also be taken into consideration in addition to the APARs for the pertinent years, particularly when a candidate is being overlooked while his or her juniors are receiving promotions.

In our considered opinion, petitioner case stood deferred for promotion in the years 2014 and 2015 due to pendency of ROE and having been given clean chit, he deserves to get promotion from the date it actually became due to him.

In view of above-said, the present petition is allowed. In the light of OM dated 27.03.2015, the Show Cause Notice dated 12.05.2016 and order dated 22.07.2016 conveying “displeasure” by the respondents, are set aside. Naturally, if the petitioner meets the requirements, he will be elevated from Assistant Commandant to Deputy Commandant with effect from April 1, 2014, the date his juniors were promoted, and will get all related perks.

Written By – Shreyanshu Gupta

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