Income Tax Appellate Tribunal

Shri Rakesh Pandey, Mirzapur vs. Income Tax Officer

MANU/IW/0052/2021

18.08.2021

Direct Taxation

Unless specified by statute itself, procedural law operates retrospectively

Present Miscellaneous Application(MA) is filed by assessee seeking rectification of mistake , which as per assessee is apparent from record and has crept in the appellate order passed by Income Tax Appellate Tribunal, Allahabad, U.P. ("Tribunal").

The assessee vehemently submitted that, the appellate order was passed by Tribunal on 2nd February, 2016, which is prior to amendment made by Finance Act, 2016 which is applicable from 1st June, 2016, and hence in the instant case , old limitation period of four years will be applicable as the Tribunal passed appellate order prior to amendment made by Finance Act, 2016 reducing limitation period to six months which is effective from 1st June, 2016 .

Section 254(2) of the 1961 Act was amended by Finance Act, 2016 w.e.f. 1st June, 2016 reducing limitation period for filing of MA for seeking rectification of mistake apparent from record in the tribunal order to six months from the end of month in which appellate order which is sought to be rectified was passed by tribunal. The earlier limitation for filing MA under Section 254(2) was four years. This amendment is procedural in nature and it is well settled that the assessee does not have any vested right in procedure. It is also well settled that, if the special statute provides for limitation, then the said special statute will govern the same and the limitation as is provided under the general statute governing limitation viz. Limitation Act, 1963 shall not have applicability.

It is also pertinent to mention that provisions of Section 253(5) of the 1961 Act vests powers with tribunal to condone delay in filing of appeals or memorandum of cross appeals beyond limitation period as provided under Section 253(3) or 253(4) of the 1961 Act, provided sufficient cause is shown , but no such powers to condone delay are vested with tribunal while dealing with MA filed under Section 254(2) of the 1961 Act seeking rectification of mistakes apparent from record in the appellate order passed by tribunal.

The assessee does not have vested rights in the procedure and no claim can be made that the assessee be governed by earlier un-amended provisions, unless the statute itself specifically provides for it. Thus, unless specified by statute itself, procedural law operates retrospectively. While making amendment to Section 254(2) by Finance Act, 2016 effective from 01.06.2016, the statute has not provided for any saving clause in the amended provision and hence new period of limitation shall be applicable to the instant case. However, it is also trite law that if the amended provision provide too short period to make the working of provision nugatory , then reasonable period has to be provided.

In view factual matrix of the instant case, the MA ought to have been filed by assessee latest by 30th November, 2016. The assessee has filed the MA on 20th January, 2017 which is clearly time barred keeping in view amended provisions of Section 254(2), and hence, present MA is not maintainable and is liable to be dismissed on the grounds of maintainability itself.

Tags : Miscellaneous Application Time period Maintainability

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Supreme Court

Hemraj Ratnakar Salian vs. Hdfc Bank Ltd. and Ors.

MANU/SC/0538/2021

17.08.2021

Banking

If the tenancy claim is for any term exceeding one year, the tenancy can be made only by a registered instrument

Present appeals are directed against the Orders passed by the Chief Metropolitan Magistrate, rejecting the Application filed by the Appellant herein for restraining HDFC Bank, the first Respondent herein, from taking possession of the property in the Appellant’s possession. HDFC Bank had granted financial facility to Respondent nos.2 and 3 (‘the Borrowers’) of Rs. 5,50,00,000. On 3rd April, 2013, the Borrowers had mortgaged a property (“the Secured Asset”) in favour of the Bank with an intention to secure the said credit facility.

The accounts of the Borrowers were declared as non¬ performing assets (NPA). The Bank issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”) to the Borrowers. It is the case of the Appellant that, he is a tenant of the Secured Asset on a monthly rent of Rs. 20,000 since 12th June, 2012 with an increase of 5% every year. He has been paying rent regularly to his landlord since inception of his tenancy.

The Appellant filed application before the Magistrate seeking protection of his possession of the Secured Asset as the Magistrate was ceased with the petition under Section 14 of SARFAESI Act filed by the Respondent no.1 -Bank. Vide Order, the intervention application of the Appellant was dismissed by the Magistrate holding that, there was no registered tenancy placed on record by the appellant.

In Harshad Govardhan Sondagar v. International Asset Reconstruction Co. Ltd. & Ors., this Court has categorically held that, if the tenancy claim is for any term exceeding one year, the tenancy can be made only by a registered instrument. In the present case, there is a serious doubt as to the bona fide of the tenant, as there is no good or sufficient evidence to establish the tenancy of the Appellant. According to the Appellant, he is a tenant of the Secured Asset from 12th June, 2012. However, the documents produced in support of his claim are xerox copies of the rent receipts and the first xerox copy of the rent receipt is of 12th May, 2013 which is after the date of creation of the mortgage. It is pertinent to note here that the Borrowers have not claimed that any tenant is staying at the Secured Asset. At the time of grant of facility, third¬ party valuers had also confirmed that the Borrowers were staying at the Secured Asset.

The Appellant has pleaded tenancy from 12th June, 2012 to 17th December, 2018. This is not supported by any registered instrument. Further, even according to the Appellant, he is a “tenant¬in¬sufferance”, therefore, he is not entitled to any protection of the Rent Act. Even if the tenancy has been claimed to be renewed in terms of Section 13(13) of the SARFAESI Act, the Borrower would be required to seek consent of the secured creditor for transfer of the Secured Asset by way of sale, lease or otherwise, after issuance of the notice under Section 13(2) of the SARFAESI Act and, admittedly, no such consent has been sought by the Borrower in the present case. There is no merit in present appeals. Appeals dismissed.

Tags : Registered instrument Requirement Tenancy claim

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Supreme Court

Lachhmi Narain Singh (D) Through LRs & Ors. Vs. Sarjug Singh (Dead) Through LRs. & Ors.

MANU/SC/0536/2021

17.08.2021

Property

Genuineness of property transaction cannot be doubted merely because thumb impression was affixed instead of signature

Present appeal arises out of the judgment and order of the High Court whereby the appeal filed by the probate applicant was allowed in his favour by concluding that, the Will favouring Sarjug Singh was not cancelled. Thus, the appellate Court reversed the Trial Court’s decision which held that, the applicant is disentitled to get the Will probated as the same was revoked. The High Court to give the impugned verdict against the objectors, disbelieved the registered deed of cancellation dated 2nd February, 1963 (Exbt C) whereby, the Exbt 2 Will, was revoked by the testator.

Plea regarding mode of proof cannot be permitted to be taken at the appellate stage for the first time, if not raised before the trial Court at the appropriate stage. This is to avoid prejudice to the party who produced the certified copy of an original document without protest by the other side. If such objection was raised before trial Court, then the concerned party could have cured the mode of proof by summoning the original copy of document. But such opportunity may not be available or possible at a later stage. Therefore, allowing such objection to be raised during the appellate stage would put the party in a jeopardy and would seriously prejudice interests of that party.

The key characteristic of thumb impression is that every person has a unique thumb impression. Forgery of thumb impressions is nearly impossible. Therefore, adverse conclusion should not be drawn for affixing thumb impression instead of signing documents of property transaction. Therefore, genuineness of the Cancellation deed cannot be doubted only due to the fact that same was not signed and Rajendra as a literate person, affixed his thumb impression. The testator’s thumb impression was proved to be genuine by the expert.

The Trial Court was right in holding that testator was medically fit and had cancelled the Will himself. It is also seen that, the evidences of the relevant OWs have withstood the scrutiny of the Trial Court and those have remained unshaken and should be trusted. In view of the omission of the probate applicants to raise objection regarding mode of proof before the trial Court, present Court find merit in the case of the objectors. Impugned order of High Court is set aside. Appeal allowed.

Tags : Genuineness Property Transaction Thumb Impression

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Supreme Court

The Oriental Insurance Company Limited Vs. Kahlon (Deceased) through his Legal Representative Narinder Kahlon Gosakan and Ors.

MANU/SC/0531/2021

16.08.2021

Motor Vehicles

A motor accident claim petition does not abate even after the death of the injured claimant

The original claimant was severely injured in a motor accident on 2nd May, 1999. He filed a claim for compensation under Section 166(1)(a) of the Motor Vehicles Act, 1988. The Motor Accidents Claims Tribunal awarded him a sum of Rs. 1,00,000 only with 9% interest. Dissatisfied, the original claimant preferred an appeal before the High Court. Unfortunately, he was deceased on 6th November, 2015 during the pendency of the appeal, not attributed to the injuries suffered in the accident. The daughter of the claimant, who was an unmarried girl aged 21 years at the time of the accident, was substituted in the appeal. The High Court substantially enhanced the compensation.

The Act is beneficial and welfare legislation. Section 166(1) (a) of the Act provides for a statutory claim for compensation arising out of an accident by the person who has sustained the injury. Under Clause (b), compensation is payable to the owner of the property. In case of death, the legal representatives of the deceased can pursue the claim.

Property, under the Act, will have a much wider connotation than the conventional definition. If the legal heirs can pursue claims in case of death, there is no reason why the legal representatives cannot pursue claims for loss of property akin to estate of the injured, if he is deceased subsequently for reasons other than attributable to the accident or injuries under Clause 1(c) of Section 166 of Act. Such a claim would be completely distinct from personal injuries to the claimant and which may not be the cause of death. Such claims of personal injuries would undoubtedly abate with the death of the injured.

The Appellant has a statutory obligation to pay compensation in motor accident claim cases. This obligation cannot be evaded behind the defence that it was available only for personal injuries and abates on his death irrespective of the loss caused to the estate of the deceased because of the injuries.

The Appellant is therefore directed to pay to Respondent No. 1 within a period of four weeks Rs. 28,42,175 along with interest @ 9% p.a. from the date of filing of the claim petition, till its realisation. Appeal partly allowed.

Tags : Enhancement Compensation Legality

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High Court of Delhi

Madan Lama Vs. Narcotics Control Bureau

MANU/DE/1651/2021

16.08.2021

Narcotics

While granting bail, the Court has to keep in mind not only the nature of the accusations, but the severity of the punishment

Present is a petition under Section 439 of Code of Criminal Procedure, 1973 (CrPC) for grant of regular bail in Sessions Case registered at Narcotics Control Bureau for offences under Sections 8, 20(b) and 29 of Narcotic Drugs and Psychotropic Substances Act, 1985 ("NDPS Act").

In Ram Govind Upadhyay v. Sudarshan Singh, the Supreme Court has held that, grant of bail though being a discretionary order -- but, however, calls for exercise of such a discretion in a judicious manner and not as a matter of course. Order for bail bereft of any cogent reason cannot be sustained. The grant of bail is dependent upon the contextual facts of the matter being dealt with by the court and facts, however, do always vary from case to case. The nature of the offence is one of the basic considerations for the grant of bail -- more heinous is the crime, the greater is the chance of rejection of the bail, though, however, dependent on the factual matrix of the matter. While granting bail the court has to keep in mind not only the nature of the accusations, but the severity of the punishment, if the accusation entails a conviction and the nature of evidence in support of the accusations.

The Petitioner being a citizen of Nepal has no roots in society and can be considered a potential flight-risk. Thus he satisfies the factor that there exists the danger of him absconding or fleeing from justice, if released on bail. Furthermore, if the Petitioner is released on bail, it cannot be ruled out that he will not indulge in such activities again. The Petitioner has indulged in offences under the NDPS Act and the same cannot be equated with the offences under the IPC or other offences. The harmful effects of drugs on an individual and on the society have been researched extensively and are well known. The purpose of enacting the NDPS Act was to curb this menace. This purpose must be kept in mind while considering the grant of bail in matter pertaining to the NDPS Act.

The Petitioner is also alleged to have committed an offence which is punishable up to ten years of imprisonment. Furthermore, the case herein is different from the case of Haresh Rawal, who was granted bail vide order as charges have are yet to be framed in the instant case and the chances of the Petitioner jumping bail cannot be ruled out as he is not the resident of India. In the facts and circumstances of the present case, present Court does not feel that this is a fit case for grant of bail. The application is dismissed.

Tags : Bail Rejection Legality

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Customs, Excise and Service Tax Appellate Tribunal

WMW Metal Fabrics Limited vs. Commissioner, CGST -Jaipur I

MANU/CE/0107/2021

16.08.2021

Goods and Services Tax

State cannot enrich itself unjustly, when no duty was liable to be paid by Appellant

The Appellant is engaged a manufacture of Galvanized Transmission and Communication Tower Plants. A refund claim for an amount of Rs.2,01,262 was filed by the Appellant on 29th November, 2018 against the cash amount deposited in their Personal ledger Account (PLA) account, for payment of duty as shown in their current account on 30th June, 2017 and was also shown in their ER-1 Return for the month of June, 2017. However, a show cause notice was served upon the Appellant proposing rejection of the said refund claim as it appeared to be hit by the limitation of period of one year from the relevant date i.e. the date of account current balance as on 30th June, 2017. The rejection was initially confirmed vide Order-in-Original. Appeal thereof has been rejected by the Order under challenge.

It is an admitted fact that, Appellant was having account current/ PLA for payment of duty. It also cannot be disputed that the purpose of such account is that the money deposited by the assessee in such account has to be debited there-from as and when the duty for clearance of goods is required to be paid by the assessee i.e. against a liability that has to reckon in future. The amount in question was not at all the amount of duty or interest it was rather appellants own amount which either could be utilized by him while discharging his duty liability else the appellant was entitled to get the refund thereof.

There is a distinction between the amount appropriated towards duty and amount deposited for payment of a duty. In a former case, duty which has been levied and paid subsequently becomes the property of the Government and no person would be entitled to get it back unless there is a provision of law to enable that person to get the duty already appropriated back from the State or the Government. In the latter case, however, when an amount has been deposited to PLA Account to be appropriated towards duty which may fall due in future and there having no appropriation, the property in money does not pass to the Government unless the goods are cleared and the duty is levied and such money lying deposited in PLA cannot be utilized. It shall be the money of assessee.

It is also the fact that, on 1st July, 2017, the new Act of Goods and Service Tax Act (GST) was rolled down. Section 142 (3) of the said Act permits the refund of any amount other than duty, tax, interest or Cenvat Credit has to be paid to the assessee in cash. Accordingly, the amount in question was Appellant's own money and he was fully entitled to get the refund of the same that too in cash. This amount cannot been made subjected to any other appropriation. Nor the time limit under Section 11B of CEA can be invoked, when such money is sought to be refunded.

In the case of Indian Oil Corporation Ltd. vs. CCE, it has been held that, when there was no duty liability of the Appellant but some amounts stands deposited by him, the same has to be refunded back to the Appellant without raising any issue of limitation. It was specifically held therein that, state cannot enrich itself unjustly, when no duty was liable to be paid by the Appellant.

It is held that, Commissioner (Appeals) has wrongly invoked the Section 11 B of Section 11B of Central Excise Act, 1944 (CEA) and the concept of limitation embodied in the said section. Order is accordingly, set aside. Appeal stands allowed.

Tags : Refund Time bar Eligibility

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Income Tax Appellate Tribunal

Anwar Sultana Educational Trust Vs. CIT (E), Chandigarh

MANU/IS/0009/2021

16.08.2021

Direct Taxation

Exemption under Section 11 of IT Act can be availed by institutions which are genuinely engaged in 'charitable activities’

Present appeal of the assessee society is directed against the order passed by the CIT(E), Chandigarh whereby he rejected the application filed for registration under Section 12AA(1)(b)(ii) of the Income Tax Act, 1961 (IT Act). The appellant society has been in operation since 28th May, 2016 and filed an application in the office of CIT(E) on 1st February, 2017 for seeking registration under Section 12AA of the IT Act.

It is admitted fact that the main Object of the applicant trust are to impart education among the society without any caste, creed and Colour. The trust deed submitted before the Learned CIT was quite explanatory of the fact that, the trust was created for imparting education.

Learned CIT(E), while passing impugned order seems to be under hurry in passing ex parte order in 2nd round and further to understand the definition of 'charitable activities' de hors requirement of law would only enable an institution to be granted registration under section 12AA of the IT Act as once registration is granted, the entire income of the institution would become exempt. The said view, in the light of precedents referred above is wholly opposed to law. Under section 12AA of the Act, the Commissioner is entitled to see that whether the objects are charitable in nature, which term has been well defined in the Act and also to see whether the activities are genuine or not. The genuineness of activities would mean to see that activities are not camouflage, bogus, artificial and whether these are in accordance with the objects of the institution. The scope of enquiry does not extend beyond that point.

Exemption under Section 11 of IT Act can be availed by institutions which are genuinely engaged in 'charitable activities’. However, benefit of section 11 of IT Act is subject to application of income for charitable activities and the Assessing Officer is well entitled to see whether such application has been made and other conditions of Section 11 of IT Act have been complied. In view of the peculiar facts and circumstances of the case, the order under appeal is unsustainable and thus reversed. The Learned CIT(E) is directed to grant registration to the Appellant.

Tags : Registration Rejection Legality

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