Judgments
High Court of Delhi
Chabbras Associates vs Hscc India Limited & Anr.
MANU/DE/0258/2023
18.01.2023
Arbitration
Procedure prescribed in the Agreement before invocation of the Arbitration Agreement necessarily needs to be followed
Present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an Arbitrator for adjudicating the disputes that have arisen between the parties with respect to the Contract dated 18.09.2018 for Construction of Phase-II works comprising Director's Residence, Type II, III, IV and V Residential quarters for National Institute of Animal Biotechnology (NIAB) at Hyderabad.
The learned counsel for the Respondents submits that, the present petition is premature as the Petitioner has not followed the procedure prescribed for appointment of an Arbitrator. Drawing reference to Clause 25 of the General Conditions of Contract ('GCC'), he submits that prior to invoking arbitration, the petitioner has to raise its disputes with the Reviewing Authority, and if it is dissatisfied with its decision, approach the Appealing Authority. If the Petitioner still is dissatisfied with the decision of Appealing Authority, the Petitioner has to raise its dispute with the Dispute Redressal Committee ('DRC'). It is only where the Petitioner or the Respondent is dissatisfied with the decision of the DRC, that arbitration can be invoked.
A reading of the above Clause clearly shows that, before invoking the arbitration, the parties have agreed to the dispute resolution mechanism, where the dispute is first referred to the Reviewing Authority, thereafter to the Appealing Authority and finally to the DRC. It is only where either of the parties is dissatisfied with the decision of the DRC that such party can invoke arbitration. Even the notice invoking arbitration has to give a reference to the decision of the Appealing Authority.
In Sushil Kumar Bhardwaj v. Union of India, this Court has held that the procedure prescribed in the Agreement before invocation of the Arbitration Agreement necessarily needs to be followed, as Section 11 of the Act can be invoked only where the parties have failed to act under the prescribed procedure. The petitioner itself having failed to act in accordance with the prescribed procedure, cannot invoke the remedy of Section 11 of the Act. In view of the above, the present petition is dismissed as being premature.
Tags : Dispute Appointment Arbitrator
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Income Tax Appellate Tribunal
Milind Madhukar Edake vs. Income-Tax Officer
MANU/IP/0043/2023
18.01.2023
Direct Taxation
Reasons for the formation of the belief must have rational connection with or relevant bearing on the formation of the belief
The assessee is a resident individual engaged in Multi-Level-Marketing on agency basis, had filed return of income ["ITR"] for AY 2011-12 declaring total income of ₹3,76,966 under presumptive taxation under Section 44AD of the Income Tax Act, 1961. On the basis of annual information return ["AIR"] observing the cash deposits into saving bank account of the assessee, the learned AO invoked the reassessment jurisdiction by issue of notice under Section 148 and eventually framed the assessment by bringing to tax the entire cash deposits of ₹47,63,510 as unexplained investment under Section 69 coupled with net commission income after allowing 50% deduction under Section 44AD of the Act. When matter travelled before first appellate authority ["FAA"] in an appeal, the Learned CIT(A) reiterating the findings confirmed the action of Ld. AO.
The reasons recorded in present case at best can be treated to be reason to suspect which is not sufficient for reopening the case under Section 148 of the Act. While recording the reasons to believe merely relying upon financial information cannot be treated as good enough to reopen the case. There can be multiple capital sources of cash deposits available to the assessee and unless and until it is brought out in the reasons to believe as to how the cash deposits represent income or investment from undisclosed sources same cannot give justification to reopen the case under Section 148 of the Act. The requirement of application of mind is missing in the present case on the face of reasons recorded, thus the cardinal principle of taxation that all receipts are not income and all income are not taxable income applies squarely to present facts.
It is a well settled law that, the reasons for the formation of the belief must have rational connection with or relevant bearing on the formation of the belief. Whereas in the absence of nexus between the prima facie inference arrived in the reasons recorded and information vis-a-vis material much less tangible, credible, cogent and relevant to form a reason to believe could not be made a basis to assume jurisdiction, hence cannot be relied upon; thus the proceedings initiated are purely based on surmises, conjectures and suspicion and therefore, the same are without jurisdiction; that the reasons recorded are highly vague, far-fetched and cannot by any stretch of imagination lead to conclusion of escapement of income which deserve to be quashed. Appeal allowed.
Tags : Assessment Tax Levy
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Income Tax Appellate Tribunal
Darshan Kumar Gupta, New Delhi vs. Income Tax Officer
MANU/ID/0076/2023
18.01.2023
Direct Taxation
Assessing Officer is bound to supply reasons of reopening of assessment
In present case, the assessment was reopened under Section 147 of the Income-tax Act, 1961 and an assessment under Section 143(3) read with Section 147 of the Act was framed vide order. The Assessing Officer assessed income at Rs. 27,30,548 after making addition of Rs. 22,71,048 in respect of capital gain. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who after considering the submissions dismissed the appeal of the assessee. Now the assessee is in appeal before this Tribunal.
The assessee submitted that the reopening of the assessment is invalid and is contrary to the judicial pronouncements. He contended that despite request for supply of the reasons recorded for reopening of the assessment, the Assessing Officer did not supply the reasons. He submitted that the basis of reopening is ill founded.
As per the assessment order the case was reopened on the basis of the information relating to purchase of DDA flat at Dwarka in auction conducted by the learned Receiver appointed by the Hon'ble High Court during the financial year 2010-11. Verification of source of acquisition was the basis for reopening of the assessee. The assessee had stated that the investment was made out of the sale-consideration of two properties which he had sold.
Assessing Officer was required to supply reasons of reopening of assessment. The assessee has a legal right to file objections against the re-opening of assessment. Non supply of reasons deprived the assessee from this valuable legal right to raise objection against the reasons for reopening of assessment. The issue relates to the assessment year 2011-12 and it would be too late to restore the matter for supply of reasons to the assessee. The Assessing Officer ought to have supplied the reasons. The reopening of assessment is not justified in the facts and circumstances of the present case.
Since the action of Assessing Officer is contrary to ratio laid down by the Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. Income Tax Officer & others, wherein it was clarified that when a notice under Section 148 of the Act is issued, the proper course for the noticee is to file return and if so desires, to seek reason for issuing notices. The Assessing officer is bound to furnish reasons within a reasonable time. Undisputedly, in the present case the reasons were not furnished to the assessee. Therefore, he could not file any objection. Impugned order is set aside. Appeal of assessee is allowed.
Tags : Assessment Re-opening Validity
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Supreme Court
Hewlett Packard India Sales Pvt. Ltd. (Now HP India Sales Pvt. Ltd.) Vs. Commissioner of Customs (Import), Nhava Sheva
MANU/SC/0042/2023
17.01.2023
Customs
When customs authorities wanted to classify the goods differently, the burden of proof to showcase the same is on them
The Appellants imported certain units of the Concerned Goods and classified them under 'Tariff Item 8471 50 00' as per the prevalent self-assessment procedure. During subsequent examination by the Custom Authorities, the Concerned Goods were classified under 'Tariff Item 8471 30 10', which was later confirmed by the Assistant Commissioner of Customs and Commissioner of Customs (Appeal). These findings were further affirmed by the Customs, Excise and Service Tax Appellate Tribunal ('CESTAT'), vide the impugned judgments.
Both sides have not disputed the findings of the adjudicating authorities except in respect of the aspect of portability of Concerned Goods. Hence, the only limited question that falls for consideration before us in these proceedings is whether the Concerned Goods are 'portable' or not under 'Tariff Item 8471 30 10'.
The Concerned Goods are not portable for the reasons that- Firstly, the diagonal dimension of the Concerned Goods being minimum of the length of 18.5 inches and the same needs to be transported along with the power cable as well as the applicable stand in most cases if it is to be mounted and; secondly there being no protective case designed by the markets for daily transport for these Concerned Goods. Such requirements make the Concerned Goods unable to be carried around easily during daily transit. The Concerned Goods are not 'portable'.
Since the customs authorities wanted to classify the goods differently, the burden of proof to showcase the same was on them, which they failed to discharge. Hence, under the prevalent self-assessment procedure, the classification submitted by the Appellants must be accepted. The impugned orders which classified the Concerned Goods under 'Tariff Item 8471 30 10' is set aside. It is directed that valuation of the Concerned Goods for levy of the duty be determined under the initially declared 'Tariff Item 8471 50 00'. Appeal allowed.
Tags : Import Goods Classification
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Income Tax Appellate Tribunal
Nandkishor Education Society vs. Income-Tax Officer
MANU/IP/0048/2023
17.01.2023
Direct Taxation
Voluntary contributions specifically received towards corpus of the trust cannot be brought to tax
The only issue emanates for consideration is as to whether the CIT(A) justified in confirming the addition made by the AO on account of corpus contribution treating the same as revenue receipts in the facts and circumstances of the case.
The assessee is a society registered under the Bombay Public Trust Act, 1950. The assessee operates blood bank under the name and style as "Arpan Blood Bank" in various districts of Maharashtra. The assessee conducts donor's camps at various places to collect the blood and to preserve it in good condition for which it requires to maintain laboratory with modern equipments with well trained staff. It was submitted that, the assessee received voluntary donations for specific purpose. The assessee made entries to that effect in the Balance sheet as capital receipts. There is no dispute with regard to filing of details of list of donors, sample vouchers and other details in support of its claim.
Both the authorities below disallowed corpus donations as revenue receipts in view of the fact that the assessee has no registration under Section 12AA of the Income Tax Act, 1961 (IT Act). The learned AR referred to the decision of Co-ordinate Bench of the Tribunal in the case of Serum Institute of India Research Foundation and argued that irrespective of having registration under Section 12AA of the IT Act, the voluntary contributions specifically received towards corpus of the trust cannot be brought to tax.
The facts in the case of Serum Institute of India Research Foundation are similar to the facts of the case on hand. In the present case, as is evident from the impugned order that the assessee claimed a fund of Rs.54,50,000 as donation to the corpus of the assessee. The AO held that, the assessee is not eligible for exemption as the assessee not having registration under Section 12AA of the IT Act. Admittedly, the voluntary donations received for specific purpose forming the corpus of assessee's trust for directly made to the Balance sheet as the capital receipt. Therefore, when the donations forming the corpus of the assessee's trust received with specific purpose are capital in nature. Thus, the corpus specific voluntary donations are not taxable in the case of unregistered trust also and in view of the same the order of CIT(A) is not justified. Therefore, the denial of exemption for not having registration under Section 12AA of the IT Act resulted into disallowance therein is deleted. The appeal of assessee is allowed.
Tags : Exemption Denial Legality
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Supreme Court
The Union of India (UOI) and Ors. Vs. Rajib Khan and Ors.
MANU/SC/0040/2023
16.01.2023
Service
Different educational qualification and experience prescribed for appointment is a valid basis to grant different pay scales
The Respondents are working as the Nursing Assistants in various hospitals under the establishment of Border Security Force. All of them were being paid the 'Hospital Patient Care Allowance'. According to the original writ Petitioners, they were entitled to the Nursing Allowance like it was being given to the Staff Nurse. Therefore, a writ petition was filed before the High Court.
The claim of the original writ Petitioners claiming Nursing Allowance at par with the Nursing Staff was opposed by the Appellants containing that, they are being paid the special allowance known as 'Hospital Patient Care Allowance' and are not entitled to the Nursing Allowance at par with Staff Nurses as they are not qualified as a Staff Nurse. However, the learned Single Judge negated the objection of the Appellants-BSF by observing that the duties performed by the writ Petitioners are the similar duties performed by the Staff Nurses. Learned Single Judge observed that educational qualification cannot be a ground for denial of Nursing Allowance. Consequently, the learned Single Judge allowed the writ petition. The appeal preferred by the Appellants before the Division Bench of the High Court has been dismissed by the impugned judgment and order. Hence, the present appeal.
A short question which is posed for consideration before this Court is whether in a case where the educational qualifications for the post of Nursing Assistant and Staff Nurse are different, still the Nursing Assistants shall be entitled to the Nursing Allowance at par with the Staff Nurses?
In the case of Punjab State Cooperative Milk Producers Federation Limited v. Balbir Kumar Walia and Ors., it is observed and held by this Court that, different educational qualification and experience prescribed for appointment can be a ground to have different pay scales/pay structures.
In the case of Director of Elementary Education, Odisha and Ors. Vs. Pramod Kumar Sahoo, it is observed and held that nature of work may be more or less the same but the scale of pay may vary based on academic qualification or experience which justifies classification. It is further held and observed that inequality of men in different groups excludes applicability of the principle of 'equal pay for equal work' to them. In the case before this Court, this Court upheld the classification based upon the higher educational qualification for grant of higher pay scale to a trained person or a person possessing higher qualification.
In the present case the respective Nursing Assistants are being paid 'Hospital Patient Care Allowance'. The Nursing Assistants in the BSF neither have relevant experience for appointment as Staff Nurse nor they possess any educational qualification for appointment as Staff Nurse. Therefore, the case of Nursing Assistants cannot be compared with that of the Staff Nurses as both carry different educational qualification. Under the circumstances, the High Court has committed a serious error in holding and directing that the Nursing Assistants serving in the Assam Rifles/BSF are entitled to Nursing Allowance at par with the Staff Nurses.
The impugned judgment and order passed by the learned Single Judge as well as the Division Bench of the High Court holding and directing that the original writ Petitioners - Nursing Assistants shall be entitled to Nursing Allowance at par with the Staff Nurse is quashed and set aside. Appeal allowed.
Tags : Pay-scale Direction Legality
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