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CAT, Ahmedabad is not competent to dismiss show cause notice in fake encounter case: Gujarat High Court

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Rajnish Kumar Rai, IPS (Retd.) V. Union of India,

Bench: Honourable Justice Hasmukh D. Suthar

R/Special Civil Application No. 7133 of 2023

Facts of the Case

In a civil petition challenging the order of Central Administrative Tribunal, Ahmedabad Bench (‘CAT’), wherein former IPS officer Rajnish Rai’s (‘petitioner’) application challenging the show cause notice was dismissed. The Division Bench of Vipul M. Pancholi and Hasmukh D. Suthar, JJ., dismissed the petition and said that CAT, Ahmedabad did not commit any error while dismissing the original application and review application filed by the petitioner.

The petitioner was a member of the Indian Police Service (or “IPS”) class of 1992. On March 30, 2017, the officer in question informed the petitioner that two people who claimed to be members of the NDFB(S) cadre had allegedly been killed in a false encounter in the village of Simlaiguri in the district of Chirang, Assam, during the previous night. Therefore, in accordance with procedure, he duly informed regarding the joint operation to ADJ, NE Zone, CRPF, Guwahati, and other competent authorities as per the practice

The petitioner was relocated to Chittoor, Andhra Pradesh, from Shillong. The preliminary investigation against the petitioner was later made known to him. He subsequently filed a petition before the CAT’s Principal Bench in New Delhi, challenging both his transfer and the commencement of a preliminary inquiry against him in the matter of fake encounter. CAT’s Principal Bench dismissed the application on August 9, 2017. The petitioner, who felt aggrieved by the ruling, brought a Writ Petition before the Delhi High Court. A show cause notice with the date December 28, 2021 was sent on the petitioner during the pendency of the proceedings. The Delhi High Court dismissed the petitioner’s writ case ultimately

Later, the petitioner challenged the aforementioned show cause notice issued on December 28, 2021, by filing an application in 2023 before the CAT, Ahmedabad Bench. On February 16, 2023, the CAT, Ahmedabad Bench rejected the aforementioned application. After that, the petitioner filed a Review Application with the CAT in Ahmedabad, which was rejected.  In order to show that the CAT, Ahmedabad Bench has the authority to hear and decide the original application submitted to it, the petitioner challenged the order dated 16-02-2023 and asked the court to direct the CAT, Ahmedabad Bench to hear and decide the aforementioned case on the merits.

Issue

Whether the CAT, Ahmedabad Bench has jurisdiction to entertain the Original Application filed by the petitioner or not?

JUDGEMENT

The Court took note of the petitioner’s case’s facts and found that the petitioner was required to submit an original application against the issuance of the show-cause notice dated 28.12.2021 before the CAT, Principal Bench, New Delhi, after the Delhi High Court had given the petitioner permission to approach the CAT. However, the petitioner filed an application to the CAT in Ahmedabad.

According to the Central Administrative Tribunal (Procedure) Rules, 1987 (the “Rules of 1987”), rule 6(2) specifically states that individuals who have lost their employment due to retirement, discharge, or termination of service may, at their discretion, file an application with the Registrar of the Bench within whose jurisdiction they are ordinarily residing at the time of filing the application. The petitioner’s services were neither terminated nor was he retired in the current instance, according to the Court. There was no presumed resignation in this instance. Rule 6(2) of the Rules of 1987 would not therefore apply in the petitioner’s situation

The Court further stated that because the show-cause notice was issued from New Delhi, the CAT, Ahmedabad, lacked jurisdiction under rule 6(1) of the Rules of 1987. Moreover, the Court ruled that just because the petitioner had received a show cause notice, it cannot be assumed that the respondents have violated or are threatening to violate any of the petitioner’s legal rights as a result of the issuance of the aforementioned show cause notice.

The Court said that the CAT, Ahmedabad, had rightly rejected the review application of the petitioner on the ground that there was no apparent error on the face of the record. The Court also said that the CAT, Ahmedabad has no jurisdiction to entertain the original application filed by the petitioner. Thus, the CAT did not commit any error while dismissing the original application and review application filed by the petitioner

JUDGEMENT REVIEWED BY AMIT ARAVIND

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Emphasizing the importance of “tangible” material in reassessment proceedings and protecting taxpayers’ rights: Bombay High Court

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The High Court of Bombay passed a judgement on 04 May 2023, addressing the validity of a reassessment notice issued by the Income Tax Department. The petitioner sought to challenge the notice, which proposed to reopen the assessment for the Assessment Year 2014-15. The case of CHANCHAL BHAGWATILAL GOKHRU VS. UNION OF INDIA & ANR.  IN WRIT PETITION NO. 2014 OF 2022 which was passed by the division bench comprising of HONOURABLE SHRI JUSTICE DHIRAJ SINGH THAKUR & HONOURABLE JUSTICE G. S. KULKARNI, KAMAL KHATA.

Facts

The petitioner had filed her income tax return for AY 2014-15 on 28th July 2014. The Assessing Officer (AO) subsequently passed an order under section 143(3) of the Income Tax Act, 1961, on 18th November 2016. This order added a specific amount to the petitioner’s total income based on the withdrawal of exemption claimed under section 10(38) of the Act. The petitioner paid the tax on the additional amount as directed by the AO. Furthermore, the petitioner was granted a waiver of penalty for AY 2014-15 on 31st January 2018, based on an application made under section 273A of the Act.

However, to the petitioner’s surprise, a notice under section 148 of the Act was issued on 26th March 2021, proposing to reopen the assessment for AY 2014-15. This notice was issued after a significant gap of four years. In response, the petitioner filed a return of income on 14th April 2021, followed by notices under sections 143(2) and 142(1) on 10th November 2021 and 15th November 2021, respectively. The petitioner provided the requested details and expressed objections to the reassessment through a communication dated 28th January 2022. The objections were disposed of on 11th February 2022. Another notice was issued on 25th February 2022, leading to the filing of the present petition.

Judgment

The court meticulously examined the reasons recorded by the AO for reopening the assessment. The AO primarily relied on the claim made by the petitioner regarding the purchase and sale of shares of penny stock scrips. The AO concluded that the long-term capital gain should be considered as unexplained investment/income from other sources rather than a capital gain, suggesting that the transactions were merely an accommodation entry designed to generate unexplained investment and bogus profits.

However, the court found no indication of the petitioner’s failure to disclose any material facts. It noted that the AO had already considered these transactions during the original assessment proceedings and had added the corresponding amount to the petitioner’s total income. The petitioner had duly paid the tax on this additional income. The court, therefore, found no substance in the AO’s claim that income chargeable to tax had escaped assessment. It emphasized that the mere change of opinion regarding the calculation of tax payable did not provide a valid basis for reopening the assessment. The court reiterated the well-established principle that reassessment proceedings require fresh “tangible material” to justify their validity.

Considering the settled legal position and the facts of the case, the court delivered the following order:

The impugned notice dated 26th March 2021, issued by Respondent No. 2 for AY 2014-15, was quashed, and set aside. All actions taken in furtherance of the notice were prohibited.

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JUDGEMENT REVIEWED BY VETHIKA D PORWAL, BMS COLLEGE OF LAW

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Valid notice is necessary to release land from reservation after ten- year period: Bombay High Court

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 INTRODUCTION

The High Court of Bombay passed a judgement on 04 May 2023 in the realm of land development and town planning, legal provisions play a crucial role in ensuring fair and efficient utilization of resources. The case of MANDAKINI RUPRAO KHANGAR & ORS. VS. THE STATE OF MAHARASHTRA & ORS. IN WRIT PETITION NO. 1700 OF 2019 which was passed by the division bench comprising of HONOURABLE SHRI JUSTICE R.D. DHANUKA & HONOURABLE SHRI JUSTICE SHRIRAM MADHUSUDAN MODAK. One such provision is the Maharashtra Regional and Town Planning Act, 1966, which governs the planning and development of areas in the state of Maharashtra, India. Under this Act, the concept of “lapsing of reservation” holds significance in determining the fate of reserved lands.

FACTS

The case revolves around a plot of land owned by the petitioners in Mohpa, Tahsil Kalmeshwar, District Nagpur Maharashtra, India. Originally, the land was reserved for a weekly market and shops under a development plan published in 1973. However, the authorities failed to take any action to acquire the land for the intended purpose within the specified time frame. Frustrated by the lack of progress, the petitioners issued a purchase notice, contending that the reservation on their land had lapsed due to the inaction of the authorities. They argued that since no acquisition had occurred within the prescribed period, they were entitled to sell the land for any purpose. On the other hand, the respondents challenged the validity of the purchase notice, claiming that it was premature. They pointed to a revised development plan that had been published, which still reserved the land for the same purpose. Therefore, they argued that the purchase notice was invalid. The main question before the court was whether the purchase notice was valid under Section 127 of the Maharashtra Regional and Town Planning Act. This provision set a ten-year period within which the reservation on the land should be implemented. The court had to interpret the provision and consider the impact of the revised development plan on the validity of the purchase notice.

JUDGEMENT:

The primary question before the court was whether the legal fiction of lapsing of reservation, as provided under Section 127 of the Act, would apply in this case. The landowners contended that since more than ten years had passed since the publication of the original development plan in 1973, the reservation should be deemed to have lapsed. They argued that the revised development plan published in 2012 should not affect the counting of the ten-year period.

On the other hand, the respondents argued that the purchase notice issued by the landowners was premature. They contended that the ten-year period should be reckoned from the date of the revised development plan in 2012 and not from the date of the original plan in 1973. They also pointed out that the landowners themselves had been inactive for more than ten years after the initial plan.

After considering the arguments put forth by both parties, the court examined the relevant provisions of the Maharashtra Regional and Town Planning Act, 1966. Section 127 of the Act states that if land reserved for a specified purpose is not acquired within ten years from the date of publication of the final development plan, the owner or any interested person can issue a purchase notice. If the land is not acquired or no steps are taken for acquisition within twenty-four months from the date of the notice, the reservation is deemed to have lapsed.

The court interpreted the Act and its provisions to conclude that a revised development plan, issued under Section 38 of the Act, becomes the final development plan. Therefore, the ten-year period for the application of Section 127 would start from the date of publication of the revised plan. The court emphasized that the reservation would not automatically lapse unless a valid notice is issued under Section 127.

Considering these findings, the court dismissed the petition, stating that the purchase notice issued by the landowners was premature, as it was served after the revised development plan but before the expiry of ten years from its publication. The court upheld the continuation of the reservation and emphasized that a valid notice is necessary to release land from reservation after the ten-year period.

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JUDGEMENT REVIEWED BY VETHIKA D PORWAL, BMS COLLEGE OF LAW

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In our opinion the order passed by the Tribunal warrants no interference. No substantial questions of law arise in the present appeal: Bombay High court

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The High Court of Bombay passed a judgement on 04 May 2023, in a recent legal battle under the Income Tax Act. The case of PR. COMMISSIONER OF INCOME TAX-19 VS. VISHWASHAKTI CONSTRUCTION IN INCOME TAX APPEAL NO. 1016 OF 2018 WITH INCOME TAX APPEAL NO. 1026 OF 2018 two appeals were filed challenging an order passed by the Income Tax Appellate Tribunal (ITAT) in Mumbai. The appeals were related to the assessment years 2009-10 and 2010-11 and were brought forth by a partnership firm engaged in road repairs and construction as a contractor for the Municipal Corporation of Greater Mumbai.

FACTS

The appellant, a partnership firm, filed a return of income for the assessment year 2009-10, declaring a total income of Rs. 37,04,810. During the assessment proceedings, the assessing officer (A.O.) noticed that the firm had claimed purchases totalling Rs. 88,53,059 from various entities. However, suspicions arose when the Sales Tax Department provided information about certain bogus parties, whose TIN matched with those from whom the purchases were allegedly made.

The A.O. issued notices under Section 133(6) of the Act to the parties involved, but there was no compliance. The firm also failed to produce the said parties, and as a result, the A.O. treated the amount of Rs. 88,53,059 as bogus purchases and added it back to the total income. The CIT(A) concurred with the A.O. on the bogus purchases but held that only the profit element embedded in the disputed purchases should be assessed as income, estimating it at 12.5%. The ITAT upheld the CIT(A)’s view and decision.

LAWS INVOLVED

The appeals were preferred under Section 260A of the Income Tax Act, 1961, which allows for appeals against orders of the ITAT. The case involved the interpretation and application of various provisions of the Act, including Section 143(3) and Section 147, which pertain to the assessment of income and reopening of assessments, respectively. Additionally, the decision of the CIT(A) was relied upon, along with the judgment of the Gujarat High Court in CIT v. Bholanath Poly Fab Private. Limited., which formed the basis for the ITAT’s decision.

ARGUMENTS

Two appeals were filed under Section 260A of the Income Tax Act, challenging the order passed by the Income Tax Appellate Tribunal. The appellant, claimed purchases from various entities, which were later flagged as bogus by the assessing officer. The firm argued that the completion of assigned projects for the Municipal Corporation of Greater Mumbai would have been impossible without genuine purchases. The Commissioner of Income Tax (Appeals) agreed partially with the assessing officer’s decision. The ITAT upheld the CIT(A)’s view, treating the purchases as bogus but retaining a portion of the addition. Similar cases were referenced to support the decision. The tribunal found no substantial questions of law and dismissed both appeals.

CONCLUSION

The case discussed highlights the legal implications and complexities surrounding the assessment of purchases made by businesses. While the court acknowledged the presence of bogus purchases, it also considered the practicality of completing assigned works if all purchases were deemed non-genuine. The decision emphasizes the need for a balanced approach when determining the tax implications of disputed purchases. Under Section 260A of the Income Tax Act, both appeals were dismissed, and the ITAT’s decision was upheld.

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JUDGEMENT REVIEWED BY VETHIKA D PORWAL, BMS COLLEGE OF LAW

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optional for the aggrieved workmen either to accept reinstatement in service as helper with all arrears of compensation

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It is optional for the aggrieved workmen either to accept reinstatement in service as helper with all arrears of compensation, he may do so for the period commencing from the date from which his services as a Helper were terminated- Rajasthan High Court

The Rajasthan High Court passed a judgment on 4th of April, 1995 in the case of Ghasi Khan vs Rajasthan State Road Transport ( (1997) IIILLJ 74 Raj, 1996 (1) WLC 379,1995 (1) WLN 588) presided by the Hon. Justice A Madan.

Facts of the case
The petitioner was employed by the respondent Corporation as a driver pursuant to an order dated January 9, 1976 (Annex-1), and in the year 1983, while carrying out official duties for the respondent Corporation, an accident occurred that caused the petitioner to sustain a head injury, leading to hospitalization. As a result, on January 26, 1984, the petitioner had sent a request to the Divisional Mechanical Engineer in Kota, asking to be relieved of his driving responsibilities in accordance with Annex 2. He also asked to be given lighter responsibilities because of his deteriorating health and the accident that prevented him from performing his driving responsibilities effectively.The Divisional Manager of Kota served the petitioner with a show-cause notice on May 10, 1988, asking him to respond as to why his employment should not be terminated in
accordance with Section 2(oo)(c) of the Industrial Disputes Act, 1947 (hereinafter referred to as “the Act”). The petitioner responded by submitting Annexure-7 as his supporting documentation. On July 25, 1989, the respondent-Corporation subsequently served a second show-cause notice on the petitioner. Despite the fact that the petitioner had supplied the Medical Board’s report, which also stated that the petitioner was unfit to perform his job as a driver, the respondent-Corporation paid no attention to it.

Judgment
As a result, the writ petition is granted, the contested order from January 20, 1990 (Annex-11) is revoked and set aside, and the respondents are further instructed to pay the petitioner compensation if they choose not to absorb the petitioner onto the post of helper while maintaining his seniority, pay, and allowances with effect from the date the petitioner’s
service was terminated, which is March 20, 1990. March 20, 1990, and the Corporation should compute the compensation amount in line with the Supreme Court’s instructions.Therefore the appeal was allowed.

Judgment reviewed by Dhruv Kalia

Ghasi_Khan_vs_Rajasthan_State_Road_Transport_on_4_April_1995

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