#HighCourt Archives - Prime Legal

7 Aug

IT Act| AO’s Attempt To Get Reopening Assessment Approved Is Just Rubber-Stamped: Delhi High Court

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Blog #delhi, #delhicourt, #delhihighcourt, #HighCourt, #itact

Title: Manujendra Shah v. Commissioner of Income Tax and Anr.
Decided on: 18th July, 2023

+ W.P.(C) 12677/2018

CORAM:HON’BLE MR. JUSTICE RAJIV SHAKDHER HON’BLE & MR. JUSTICE GIRISH KATHPALIA

Introduction

The Delhi High Court quashed a reassessment notice issued under the Income Tax Act, ruling that the proceedings were initiated without proper application of mind. The reassessment was based on the incorrect invocation of Section 50C of the Income Tax Act and the erroneous determination of the market value of the land as on April 1, 1981, for the computation of capital gain. The Court found that the Assessing Officer (AO) and the Principal Commissioner of Income Tax (PCIT) failed to properly consider the relevant provisions and materials before reopening the assessment.

Facts

The Assessee, an individual, filed a return of income for the Assessment Year (AY) 2011-12, disclosing long-term capital gain (LTCG) of Rs. 1.47 crore from the sale of six parcels of land. The Assessee declared the full value of consideration (FVC) as Rs. 20.26 crore and the cost of acquisition (COA) as Rs. 17.77 crore, claiming an exemption of Rs. 1 crore under Section 54EC.

The Revenue initiated reassessment proceedings, alleging non-disclosure of the actual FVC of Rs. 5.32 crore, which was below the circle rate specified by the stamp valuation authority. They also invoked Section 50C and questioned the COA of Rs. 17.77 crore, claiming an escapement of income amounting to Rs. 18.56 crore.

The Assessee approached the High Court, contending that the AO did not possess relevant material before initiating the reassessment proceedings.

Analysis

The Delhi High Court observed that Section 50C clearly stipulates that the FVC should be taken as the circle rate fixed by the stamp valuation authority while calculating capital gain under Section 48 of the Act. In this case, there was no dispute that the Assessee had already calculated capital gains based on the circle rate of Rs. 20.26 crore. Hence, the invocation of Section 50C was inapplicable as the capital gain was already computed using the circle rate.

The significant difference in LTCG between the AO and the Assessee was due to the difference in the COA. The AO based the COA on inputs claimed by the DCIT (Central Circle), Dehradun, using a rate of Rs. 8 per square meter, while it was claimed that Rs. 10 per square meter should have been used.

The High Court noted that the AO failed to apply his mind to the inputs from DCIT (Central Circle) and did not provide any reason for adopting the rate of Rs. 8 per square meter instead of Rs. 10 per square meter for calculating COA.

Held

The Delhi High Court held that there was complete non-application of mind by the AO, both in the applicability of Section 50C and in failing to secure the relevant material from DCIT, Dehradun, for determining the market value of the land as on April 1, 1981, which forms the basis of COA. Consequently, the reassessment proceedings were quashed.

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Written by- Ankit Kaushik

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7 Aug

The Conversion of the Ordnance Factory Board Into Corporations Is in the National Interest: Delhi High Court Dismisses PIL

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Blog #delhi, #delhihighcourt, #dismiss, #HighCourt, #majoor, #majoorunion, #PIL, #union

Title: Bharatiya Pratiraksha Mazdoor Sangh v. Union of India & Anr.

Decided on: 3rd August, 2023

+ W.P.(C) 8056/2022 and C.M. Nos. 24455/2022, 24456/2022 & 13262/2023

CORAM: HON’BLE THE CHIEF JUSTICE SATISH CHANDRA SHARMA & HON’BLE MR. JUSTICE SANJEEV NARULA

Introduction

The Delhi High Court recently dismissed a Public Interest Litigation (PIL) challenging the Centre’s decision to convert the Ordnance Factory Board (OFB) into seven corporations. The Division Bench of Chief Justice Satish Chandra Sharma and Justice Sanjeev Narula opined that the move to corporatize the OFB is in the national interest and does not violate any constitutional rights guaranteed to citizens. The Court’s decision came in response to a PIL filed by the Bharatiya Pratiraksha Mazdoor Sangh (BPMS), a federation of trade unions representing workers in defense installations, including the Ordnance Factory Board.

Facts

The BPMS filed a PIL against a Gazette notification issued by the Government of India on October 1, 2021, which proposed the conversion of the Ordnance Factory Board (OFB) into seven major corporations. The petitioner federation raised several grievances in the writ petition, claiming that the workers’ views were ignored, there was an abuse of power by the government, arbitrariness, and a violation of Article 14 of the Constitution. The petitioner argued that the government’s action suppressed the constitutional rights of government servants and silenced their voices. The petitioner sought to quash the Gazette notification, restrain the respondents from implementing it further, and seek appropriate orders in the interest of justice.

Analysis

The respondents, representing the Government of India, justified the policy decision, stating that it aimed to enhance functional autonomy, efficiency, and production in the interest of the nation. They assured that the service conditions and retiral benefits of existing OFB employees would be safeguarded as Central Government employees, and their pension liabilities would continue to be borne by the government. However, despite the government’s efforts to explain the benefits and protect the interests of the employees, the BPMS expressed its intention to go on an indefinite strike. In response, the government enacted the Essential Defence Services Act to ensure an uninterrupted supply of ordnance items to the armed forces and maintain essential defence services.

Held

The Delhi High Court, after a thorough consideration of the arguments, held that the government’s policy decision to convert OFB into seven corporate entities was in the national interest and aimed to enhance functional autonomy, efficiency, and innovation in Ordnance Factories. The Court emphasized that the power of policy-making lies solely with the executive, and the Courts cannot bind the government to its policy decisions taken in public and national interest. Moreover, the Court observed that the decision does not violate any constitutional rights guaranteed to citizens. It is well-established that Courts should not interfere with policy decisions made in the national interest. Therefore, the PIL was dismissed as the interests of the employees had been adequately protected by the government.

Written by- Ankit Kaushik

Click here to view Judgement

4 Aug

Delhi High Court Upholds Eviction Order Against Son for Harassing Father: Senior Citizen Cannot Be Expected To Knock Door Of Civil Courts

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Blog #delhi, #delhihighcourt, #dismissed, #HighCourt, #seniorcitizen

Title: Ashish Randev & Anr. vs The State (Govt. Of Nct Of Delhi)
Decided on: 21st July, 2023

+ W.P.(C) 7554/2022 & CM APPL. 23192/2022

CORAM: HON’BLE MR. JUSTICE SUBRAMONIUM PRASAD

Introduction

The Delhi High Court recently dismissed a Writ Petition filed under Article 226 challenging an order of eviction passed by a District Magistrate in Delhi and affirmed by the Divisional Commissioner, GNCTD (Appellate Authority) under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007. The case involved protecting the old parents from harassment at the hands of the son and the daughter-in-law. The Court emphasized the objective of the Act to provide inexpensive and speedy protection to senior citizens from ill-treatment and non-maintenance by their children or legal heirs.

Facts

The petition was filed by a 90-year-old partially blind and deaf man, along with his 84-year-old wife, seeking eviction of their son and daughter-in-law from the ground floor of their property. The elderly couple alleged harassment from their son and daughter-in-law over the right to reside on the ground floor, which was also occupied by a school run by the old man’s daughter and wife. Due to the COVID-19 pandemic, the school was closed, and the elderly couple, who were bedridden, wanted to reside on the ground floor. However, the son and daughter-in-law objected to this arrangement.

The Tribunal for Maintenance and Welfare of Parents and Senior Citizens directed the eviction of the son and his wife from the property. The appellate authority upheld this decision, which led the son to approach the Delhi High Court, challenging the eviction order.

Analysis

The Delhi High Court emphasized the objective of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, which is to provide inexpensive and speedy protection to senior citizens from ill-treatment and non-maintenance by their children or legal heirs. The Court observed that the Act aims to safeguard the life and property of senior citizens, ensuring they have a shelter over their head and can sustain themselves independently without interference from their children or legal heirs. The Court further reiterated that senior citizens should not be forced to engage in legal battles to obtain possession of their property, and the Act is meant to protect their rights without the need for prolonged litigation.

Held

The High Court upheld the orders of the Tribunal and the Appellate Authority, stating that the District Magistrate was well within its rights under the Delhi Maintenance and Welfare of Parents and Senior Citizens (Amendment) Rules, 2016, to pass an eviction order for protecting the elderly parents from harassment by their son and daughter-in-law. The Court dismissed the Writ Petition and affirmed the eviction order, ensuring the protection of the elderly couple’s property and well-being. The Court emphasized that the Act provides an effective remedy to senior citizens to seek eviction of children or legal heirs from their property when they refuse or fail to maintain them.

Written by- Ankit Kaushik

Click here to view Judgement

2 Aug

IBC | It Is Not Arbitrary To Send A Demand Notice To A Personal Guarantor In Line With Rule 7(1)

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Blog #arbitration, #delhi, #delhicourt, #education, #HighCourt, #IBC

Title: Vineet Saraf v. Rural Electrification Corpn. Ltd.
Decided on: 21st July, 2023

+ W.P. (C) 3293 of 2023

CORAM: HON’BLE MR. JUSTICE Purushaindra Kumar Yadav

Introduction

The case of Vineet Saraf v. Rural Electrification Corpn. Ltd. involves a writ petition filed by the petitioner to challenge an impugned demand notice issued by the respondent under Rule 7(1) of the Insolvency and Bankruptcy Application to Deciding Authority for Insolvency Resolution Procedure for Personal Guarantors to Corporate Debtors Rules, 2019. The petitioner, acting as a personal surety for a debt backed by a corporate guarantee, initiated a Corporate Insolvency Resolution Process against FACOR Power Ltd. The resolution process resulted in a Resolution Plan approved by NCLT, Cuttack, and upheld by NCLAT and the Supreme Court. The petitioner contended that the respondent had promised to transfer the entire debt and related rights to FACOR Power Ltd. The respondent, on the other hand, argued that the financial creditors retained the right to pursue securities, citing continuous personal guarantees and third-party collateral provided as security for the debt. The respondent issued a demand notice based on the petitioner’s personal guarantee, which was contested by the petitioner.

Facts

The petitioner, a personal guarantor, challenged the respondent’s demand notice under the 2019 Rules, arguing that the respondent had assigned all obligations to FACOR Power Ltd. without excluding personal guarantees. The petitioner claimed that this assignment hindered the use of his guarantee. The Court emphasized the distinction between an unconditional release and a commitment not to sue, stating that a reserve clause in a deed that releases the primary borrower protects the creditor’s right to pursue action against the guarantor.

Analysis of Court Order

Justice Purushaindra Kumar Yadav of the Delhi High Court’s Single Judge Bench rejected the petitioner’s argument that the guarantor had a legal right to be heard at a later stage. The Court opined that granting the petition would violate the procedural requirements of the Insolvency and Bankruptcy Code of 2016 and deprive the respondent of the opportunity to present their case before the relevant NCLT. The Court set down important guidelines for consideration but left the decision on the case’s merits to NCLT.

Held

The Delhi High Court denied the writ petition and refused to issue a writ of prohibition, emphasizing that it was not appropriate to create private commercial law to demonstrate the respondent’s lack of jurisdiction. The Court’s decision reiterated that the petitioner’s argument of having the right to be heard at a later stage was insufficient to proceed with the petition. The issue was left to NCLT’s determination based on the merits of the case.

Written by- Ankit Kaushik

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2 Aug

Authorise OBC Candidate To Attend Interview For Senior Resident Doctor Position: Delhi High Court To AIIMS

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Blog #AIIMS, #Allowed, #Candidate, #delhi, #delhihighcourt, #HighCourt, #OBC #Interview

Title: J. Vinutha V. All India Institute of Medical Sciences – AIIMS & Anr.
Ordered on: 31^st June, 2023

+ W.P.(C) 9958/2023

CORAM: HON’BLE MR. JUSTICE CHANDRA DHARI SINGH

Introduction

The petitioner filed a writ petition under Article 226 of the Constitution of India seeking several reliefs, including setting aside the rejection of her candidature from the OBC category to the unreserved category during the selection process for the post of Senior Residents/Senior Demonstrators. The petitioner also challenged the subsequent scrutiny done by the respondents after the issuance of the admit card and conducting the Computerized Examination (Stage-I). Additionally, the petitioner sought disclosure of marks and ranks scored by candidates in the Computerized Examination (Stage-I) and permission to participate in the Interview (Stage-II) scheduled for 2nd August 2023.

Facts

The petitioner applied for the post of Senior Resident in Conservative Denistry & Endodontics as a member of the OBC (NCL) category. She submitted her OBC caste certificate in the online application, but the respondents communicated via email that the certificate was not in the prescribed format. The petitioner resubmitted the certificate as per the prescribed format on the same day but received another rejection notification from the respondents. The respondents then issued an admit card on a provisional basis, and the petitioner appeared for the Recruitment Test (Stage-I). Subsequently, the results were declared, but marks and ranks were concealed, and the respondents rejected the petitioner’s candidature for the OBC category, stating that the certificate was submitted after the cut-off date.

Courts analysis and decision

The petitioner’s case raises important issues regarding the rejection of her candidature based on technical grounds related to her OBC caste certificate. The Court took note of the fact that the petitioner’s OBC status was not in dispute, and the certificate was issued by a competent authority. Despite this, the rejection of her candidature solely on the grounds of a technicality was found to be unfair and arbitrary.

The Court’s analysis considered the principle of equity and justice and emphasized that an overly rigid and hyper-technical approach should not be adopted in matters concerning caste certificates. It cited precedents from various High Courts and the Supreme Court that have consistently emphasized the need for a practical and reasonable approach while dealing with such issues.

In granting interim relief, the Court sought to protect the petitioner’s rights and interests by allowing her to participate in the Interview (Stage-II) scheduled for 2nd August 2023. This decision was based on the Court’s prima facie view that the rejection of the petitioner’s candidature was unjustified and required further consideration.

The Court also directed the respondents to file a counter affidavit within three weeks, giving them an opportunity to present their viewpoint. The petitioner was granted the right to file a rejoinder, if necessary, within two weeks after receiving the counter affidavit.

Overall, the Court’s holding reflected a balanced approach, ensuring that the petitioner’s rights were safeguarded and that her case would be heard with due consideration. The matter was scheduled for further consideration on 4th September 2023, indicating the Court’s commitment to resolving the issue in a fair and just manner.

Written by- Ankit Kaushik

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