Income Tax Appellate Tribunal

Kalyan Educational Society Vs. Commissioner of Income Tax-Durgapur

MANU/IK/0183/2020

31.07.2020

Direct Taxation

At the time of registration, authority must satisfy that, the objects are charitable in nature and activities being carried out are genuine

Present appeals preferred by the Assessee are against the separate orders of Commissioner of Income-tax (CIT) denying registration under Section 12AA of the Income-tax Act, 1961 and denial of approval under Section 80G of the Act. The Learned CIT, was of the opinion that, Assessee was receiving donation connected with the admission of the students and therefore, it has to be treated as collection of Capitation fees as held by the Hon'ble Supreme Court in TMA Pai Foundation Vs. State of Karnataka.

The Assessee is a registered society registered under the West Bengal Societies Registration Act, 1961 on 2nd February, 2005 and as per the MOA of the society, the Assessee is running educational institution not for profit. Since the activity of imparting education as well as 'Education' falls within the definition of charitable purpose, and the establishment of an educational institution is an activity of charity and expenditure incurred in establishing the educational institution, namely, acquisition of land, construction of building, etc. are all application of income for charitable activity, the said income would be construed as if it was generated in the course of carrying on the charitable activity. Therefore, such receipt/income received in the course of carrying on charitable activity was also eligible for exemption, provided the same was applied or set apart for educational purposes.

The Learned CIT misdirected himself by the wrong assumption that, Assessee has collected Capitation fees from the students for admission, which act of Assessee according to him was akin to sale of seats, which fact when contested and denied by the Assessee, the Learned CIT without even conducting a preliminary enquiry on this issue, however, stuck to his impression/assumption that, Assessee was indulging in Collection of Capitation Fees.

It is settled law that, at the time of registration, the authority need to satisfy himself that, the objects are charitable in nature and the activities being carried out are genuine, meaning thereby that the activities are in consonance for achieving the charitable objects and nothing else. Since, present Tribunal have seen from the objects of the Assessee society that "education" one of the main objects which is a charitable object/activity and the genuineness of the society stands established by the Assessee which is running educational institutions, which imparts engineering courses and is recognised by the All India Council for Technical Education as well as established Polytechnic College, present Tribunal is of the considered opinion that, Assessee society was eligible for grant of registration under Section 12AA of the Act.

The Learned CIT/the competent authority is directed to grant registration under Section 12AA of the Act. And regarding grant of approval for registration under Section 80G of the Act, is concerned, matter remitted back to Learned CIT/competent authority to examine whether the Assessee satisfies the conditions stipulated under Section 80G (5) read with Rule 11AA. Appeal of Assessee is partly allowed.

Tags : Registration Denial Legality

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Supreme Court

Rama Nand and Ors. Vs. Chief Secretary, Govt. of NCT of Delhi and Ors.

MANU/SC/0579/2020

06.08.2020

Service

Promotion includes advancement to a higher pay scale without moving to a different post

The Appellants were all working as Telephone Operators with the Delhi Fire Service ("DFS"). On account of reorganisation of the wireless communication system, ninety-six posts of Radio Telephone Operators were sought to be created in terms of a letter dated 29th August, 1983. Six Radio Operators were already operating as such, while twenty-seven Telephone Operators, in the pay scale of Rs. 260-400 were sought to be deployed as Radio Telephone Operators ("RTOs") in a higher pay scale. The reorganisation scheme was approved on 10th October, 1983 by the Municipal Corporation of Delhi.

The Telephone Operators had to go through a training and to be deployed as RTOs, a further condition was imposed of 5 years regular service, though it is alleged by the Appellants that the same was not part of the letter dated 29th August, 1983. An important development took place on 9th October, 1999 whereby the Department of Personnel and Training, Government of India issued an Office Memorandum introducing an Assured Career Progression ("ACP") Scheme, by which a decision was taken to grant two financial upgradations after completion of 12 and 24 years of regular service respectively. It is the case of the Appellants that, they were entitled to get their first financial upgradation as on 9th August, 1999 or on completion of 12 years of service in the DFS as Telephone Operators/RTOs, but that the same were denied to the Appellants since the Respondents treated their conversion of the aforesaid posts as a promotion.

The limited controversy which arises for adjudication in the present case is whether the deployment of the Appellants as RTOs would amount to a promotion or whether it was a mere reorganisation and the Appellants were entitled to the ACP separately in terms of the ACP Scheme.

The benefits of ACP Scheme cannot be held applicable to the Appellants and consequently, the High Court was right in interfering with the order of the CAT. The consequence of reorganisation of the cadre resulted in not only a mere re-description of the post but also a much higher pay scale being granted to the Appellants based on an element of selection criteria. At the threshold itself, there is a requirement of a minimum 5 years of service. Thus, all Telephone Operators would not automatically be eligible for the new post. Undoubtedly, the financial emoluments, are much higher. The Appellants had to go through the rigorous of a specialised training. All these cannot be stated to be only an exercise of merely re-description or reorganisation of the cadre.

In view of decision of Supreme Court in case of Bharat Sanchar Nigam Limited v. R. Santhakumari Velusamy and Ors., and as per sub-para (i) of para 29 of same, promotion may include an advancement to a higher pay scale without moving to a different post. In the present case, there is a re-description of the post based on higher pay scale and a specialised training. It is not a case covered by sub-para (iii), as canvassed by learned Counsel for the Appellants, where the higher pay scale is available to everyone who satisfies the eligibility condition without undergoing any process of selection. The training and the benchmark of 5 years of service itself involve an element of selection process. Similarly, it is not as if the requirement is only a minimum of 5 years of service by itself, so as to cover it Under Sub-para (iv). Appeals dismissed.

Relevant

Bharat Sanchar Nigam Limited v. R. Santhakumari Velusamy and Ors. MANU/SC/1037/2011

Tags : Promotion Pay scale Entitlement

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High Court of Delhi

Abhijit Mishra vs. Union of India & Ors.

MANU/DE/1528/2020

06.08.2020

Civil

A judgment may be open to review if there is a mistake or an error apparent on the face of the record

Present Review Petition has been preferred by the original writ Petitioner seeking review of the order passed by present Court in writ petition which was preferred as a PIL Review Petition for the benefit of advocates. The writ petition was dismissed vide order dated 29th July, 2020. The issue involved in present case is regarding power of Court to review its order under Order 47 Rule 1 of Code of Civil Procedure, 1908 (CPC).

The present case is a PIL preferred by the party in-person for including Advocates in the definition of the word “professional” under the Micro, Small and Medium Enterprises Development Act, 2006. Present Court is of the view that, the advocates are capable of filing their own litigation, if they wish to do so. On this point itself, present Court dismissed the writ petition as a PIL.

Under Order 47 Rule 1 of CPC, a judgment may be open to review, if there is a mistake or an error apparent on the face of the record. An error which is not self-evident and has to be detected by a process of reasoning can hardly be said to be an error apparent on the face of the record justifying the Court to exercise its power of review under Order 47 Rule 1 of CPC.

In exercise of the jurisdiction under Order 47 Rule 1 of CPC, it is not permissible for an erroneous decision to be “reheard and corrected”. A review petition, it must be remembered has a limited purpose and cannot be allowed to be “an appeal in disguise”.

In view of the aforesaid facts, reasons and judicial pronouncements, there is no reason to entertain present review petition as there is no error, much less an error apparent on the face of the record, in order dated 29th July, 2020. The Review Petition is accordingly dismissed.

Tags : Review Jurisdiction Powers

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Supreme Court

Gangadhar Vs. State of Madhya Pradesh

MANU/SC/0575/2020

05.08.2020

Narcotics

A fact can be said to have been proved, if it is established beyond reasonable doubt and not on preponderance of probability

The Appellant assails his conviction under Section 8C read with Section 20(b)(ii)(c) of the Narcotics Drugs and Psychotropic Substances Act, 1985 ("the NDPS Act"). The Appellant was held to be the owner of the House in question from which the ganja was recovered, relying upon the voters list of 2008 rejecting his defence that, he had sold the house to co-accused on 12th June, 2009. Co-accused has been acquitted in trial. Learned Counsel for the Appellant submitted that, the conviction based on a mere presumption of ownership of the house, without any finding of conscious possession was unsustainable.

The presumption against the Accused of culpability under Section 35 and Section 54 of the NDPS Act to explain possession satisfactorily, are rebuttable. It does not dispense with the obligation of the prosecution to prove the charge beyond all reasonable doubt. The presumptive provision with reverse burden of proof does not sanction conviction on basis of preponderance of probability. Section 35(2) of NDPS Act provides that, a fact can be said to have been proved, if it is established beyond reasonable doubt and not on preponderance of probability.

The stringent provisions of the NDPS Act, such as Section 37, the minimum sentence of 10 years, absence of any provision for remission do not dispense with the requirements of prosecution to establish a prima facie case beyond reasonable doubt after investigation, only where after which the burden of proof shall shift to the accused. The gravity of the sentence and the stringency of the provisions will therefore call for a heightened scrutiny of the evidence for establishment of foundational facts by the prosecution.

The Appellant had produced the sale agreement, with promptness. It was never investigated for its genuineness by the police and neither was the panchayat records verified. The panchayat records are public documents and would have been the best evidence to establish the ownership and possession of the house. The voters list entry of 2008 being prior to the sale is of no consequence. It is not without reason that, the co-accused had absconded.

The Appellant was held guilty and convicted in view of his name being recorded as the owner of the house in the voters list 2008, ignoring the fact that sale agreement was subsequent to the same on 12th June, 2009. The prosecution cannot be held to have proved that Exhibit P-18 was a fabricated and fictitious document. No appeal has been preferred by the prosecution against the acquittal of the co-accused.

In view of the nature of evidence available, it is not possible to hold that, the prosecution had established conscious possession of the house with the Appellant so as to attribute the presumption under the NDPS Act against him with regard to recovery of the contraband. Conviction could not be based on a foundation of conjectures and surmises to conclude on a preponderance of probabilities, the guilt of the Appellant without establishing the same beyond reasonable doubt.

The police investigation was very extremely casual, perfunctory and shoddy in nature. The Appellant has been denied the right to a fair investigation, which is but a facet of a fair trial guaranteed to every Accused under Article 21 of the Constitution of India, 1950.

Normally, present Court in exercise of its jurisdiction under Article 136 of the Constitution does not interfere with concurrent findings of facts delving into appreciation of evidence. But in a given case, concerning the liberty of the individual, if the Court is satisfied that, the prosecution had failed to establish a prima facie case, the evidence led was wholly insufficient and there has been gross mis-appreciation of evidence by the Courts below bordering on perversity, present Court shall not be inhibited in protecting the liberty of the individual. The conviction of the Appellant is held to be unsustainable and is set aside. The Appellant is acquitted. Appeal is allowed.

Tags : Conviction Evidence Credibility

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High Court of Delhi

Vaishali Sharma vs. Union of India & Ors.

MANU/DE/1529/2020

05.08.2020

Direct Taxation

A liberal interpretation has to be given to the Scheme, 2019 to allow the businesses to make a fresh beginning

Present writ petition has been filed challenging the order dated 26th February, 2020, whereby the Respondents have rejected the declaration dated 29th December, 2019 filed by the Petitioner in Form SVLDRS-1 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (Scheme, 2019).

Learned counsel for Petitioner states that, the Petitioner pursuant to summons dated 14th May, 2018 had admitted her liability in the context of services rendered in lieu of commission earned from Herbalife India Private limited on 18th May, 2018 itself. Accordingly, Petitioner filed a declaration dated 29th December, 2019 under the SVLDR Scheme, but the same has been rejected on the sole ground that, the demand was neither quantified nor communicated to the Petitioner on or before 30th June, 2019.

Learned counsel for Petitioner states that, as the Petitioner had admitted her liability on 18th May, 2018 itself, the demands stood quantified. Learned counsel for Petitioner submits that, paras 4(a) and 10 (g) of the Central Board of Indirect Taxes and Customs Circular dated 27th August, 2019 provides for relief under the Scheme for cases under investigation and audit where the duty involved had been admitted by the Assessee/declarant in a statement on or before 30th June, 2019.

In the opinion of present Court, a liberal interpretation has to be given to the Scheme as its intent is to unload the baggage relating to legacy disputes under the Central Excise and Service Tax and to allow the businesses to make a fresh beginning. Since, it is the Petitioner's case that she had admitted her liability to pay service tax on 18th May, 2018 itself, present Court is of the view that, the Respondents should have given an opportunity of hearing to the Petitioner before rejecting the declaration dated 29th December, 2019 under the Scheme, 2019.

Consequently, the impugned order dated 26th February, 2020 is set aside and the designated committee is directed to decide the Petitioner's application after giving an opportunity of hearing to the Petitioner. Petition disposed off.

Tags : Declaration Rejection Validity

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High Court of Himachal Pradesh

Harsh Anand Vs. State of Himachal Pradesh and Ors.

MANU/HP/0643/2020

04.08.2020

Criminal

High Court has inherent power to quash criminal proceedings even in cases which are not compoundable and where the parties have settled the matter between themselves

By way of present petition filed under Section 482 of Code of Criminal Procedure, 1973 (CrPC), prayer has been made on behalf of the Petitioner for quashing and setting aside FIR under Section 380 of Indian Penal Code, 1860 (IPC) registered at Police Station alongwith consequential proceedings pending before learned Chief Judicial Magistrate, on the basis of compromise entered inter se Petitioner and Respondent No. 3.

The FIR sought to be quashed in the instant proceedings, on basis that, before the criminal proceedings pending before learned Court below could be taken to its logical end, Petitioner entered into compromise with Respondent No. 3, whereby both the parties resolved to settle their dispute amicably inter se them.

At this stage, it would be relevant take note of the judgment passed by Hon'ble Apex Court in Narinder Singh and others versus State of Punjab and another, whereby the Hon'ble Apex Court has formulated guidelines for accepting the settlement and quashing the proceedings or refusing to accept the settlement with direction to continue with the criminal proceedings. The Hon'ble Apex Court has returned the findings that, power conferred under Section 482 of the CrPC is to be distinguished from the power which lies in the Court to compound the offences under Section 320 of the CrPC. No doubt, under Section 482 of the CrPC, the High Court has inherent power to quash criminal proceedings even in those cases which are not compoundable and where the parties have settled the matter between themselves, however, this power is to be exercised sparingly and with great caution.

Careful perusal of the judgment suggests that, such a power is not to be exercised in the cases which involve heinous and serious offences of mental depravity or offences like murder, rape, dacoity, etc. Such offences are not private in nature and have a serious impact on society. Apart from this, offences committed under special statute like the Prevention of Corruption Act or the offences committed by Public Servants while working in that capacity are not to be quashed merely on the basis of compromise between the victim and the offender. On the other hand, those criminal cases having overwhelmingly and predominantly civil character, particularly arising out of commercial transactions or arising out of matrimonial relationship or family disputes may be quashed, when the parties have resolved their entire disputes among themselves.

In the case at hand also, offence alleged to have been committed by the Petitioner does not involve offence of moral turpitude or any grave/heinous crime, rather same is a petty offence, as such, present Court deems it appropriate to quash the FIR as well as consequential proceedings thereto, especially keeping in view the fact that, the Petitioner and complainant have compromised the matter inter se them, in which case, possibility of conviction is remote and no fruitful purpose would be served in continuing with the criminal proceedings.

Prayer made in the petition can be accepted. Consequently, in view of the facts of present case as well as law laid down by the Hon'ble Apex Court, FIR under Section 380 of IPC registered at Police Station alongwith consequential proceedings pending before learned Chief Judicial Magistrate, is quashed. Petitioner is acquitted of the charges framed against him in the said FIR/proceedings. Petition disposed off.

Relevant

Narinder Singh and others versus State of Punjab and another MANU/SC/0235/2014

Tags : FIR Compromise Quashing of

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Income Tax Appellate Tribunal

Hindumal Balmukund Investment Co. Pvt. Ltd. Vs. The Pr. Commissioner of Income Tax-1, Pune

MANU/IP/0122/2020

03.08.2020

Direct Taxation

Where Assessing Officer has accepted a particular contention/issue without any enquiry or evidence, the order is erroneous

Present appeal preferred by the Assessee emanates from the order of the learned principal Commissioner of Income Tax-1, for the assessment year 2014-15 passed under Section 263 of the Income Tax Act, 1961. The crux of the grievance of the Assessee is against the revisionary jurisdiction assumed by the learned principal Commissioner of Income Tax under Section 263 of the Act.

The Learned principal Commissioner of Income Tax, on analyzing the facts and circumstances of the case vis-à-vis assessment order held that, relevant facts in present case were not at all examined by the Assessing Officer. Since no reasons were provided for his decision in the assessment order and therefore, the assessment order was set aside being held to be erroneous in so far as it is prejudicial to the interest of the Revenue.

The legal principle common is that, whenever the Quasi-Judicial Authority is making any decision on the given facts, there must be nexus between the reasons given by the Quasi-Judicial Authority with regard to the documents on record for which finally he arrives at that decision. The decision must reflect the reasoning of the Officer. In this case, in the assessment order, the entire exercise is missing. Merely extraction of submissions cannot justify that the Assessing Officer has applied his mind.

The Supreme Court in the case of Rampyari Devi Sarogi vs. CIT and Tara Devi Aggarwal v. CIT has been held that, where Assessing Officer has accepted a particular contention/issue without any enquiry or evidence whatsoever, the order is erroneous and prejudicial to the interest of the Revenue.

The Assessing Officer while accepting the documents has not conducted any specific enquiry as to the facts of the case. There is no iota of evidence brought on record by the Assessing Officer justifying that, there was mistake committed by the assessee vis-à-vis his filing of original as well as revised return of income.

In present case, the Assessing Officer has only done the work of extraction of submissions of the Learned AR and nothing else and therefore, in fact the Assessing Officer has not formed any view. When no view has been taken, no enquiry has been conducted, when no reasons on facts has been placed on record, the order of assessment is bound to be erroneous in so far as prejudicial to the interest of the revenue. The order passed under Section 263 of the Act by the Learned principal Commissioner of Income Tax is upheld. Appeal of the Assessee is dismissed.

Tags : Revisionary jurisdiction Erroneous Legality

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