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The High Court held that the petitioner is entitled to interest on the delayed refund. The Court found that the initial refund claim was lodged on 13.06.2016 and pursued through various appellate stages, culminating in the Appellate Tribunal's order on 25.05.2018, which granted consequential relief. The Court reasoned that the Appellate Tribunal's order relates back to the original application date. Therefore, the petitioner became entitled to interest under Section 11BB of the Central Excise Act if the refund was not paid within three months of the application. The Court rejected the revenue's contention that the refund was processed promptly after the formal letter, stating that the delay was significant. It also dismissed the argument of illegal enrichment, finding it untenable. The Court directed the respondents to pay interest on the delayed refund of Rs. 32,26,804/- for three years from 14.09.2016 to 12.07.2018 in accordance with Section 11BB of the Act. The revenue's argument regarding the availability of an alternative remedy was also rejected as inapplicable to the facts, particularly concerning the withholding of interest on untenable grounds.
The High Court dismissed all the petitions. The Court acknowledged the preliminary objections raised by respondent No. 5 regarding maintainability and locus standi. While not delving deeply into the factual aspects due to pending appeals, the Court found substance in the argument that the notification dated 27.11.2018 was not issued in accordance with the Gujarat Panchayats Act, 1993, as it invoked provisions of the repealed Gujarat Panchayats Act, 1961. The Court noted that even if the District Panchayats were divested of powers, it would only change the forum for applications. The Court referred to the Supreme Court's decision in Commissioner of Income Tax, Orissa Vs. Dhadi Sahu, stating that a law changing the forum does not affect pending actions unless clearly intended. The Court expressed concern over the lack of due diligence by government departments in legal matters, leading to litigation. The appeals pending before respondent No. 2 were directed to be decided on merits.
The High Court dismissed all the petitions. The Court acknowledged the preliminary objections raised by respondent No. 5 regarding maintainability and locus standi. While not delving deeply into the factual aspects due to pending appeals, the Court found substance in the argument that the notification dated 27.11.2018 was not issued in accordance with the Gujarat Panchayats Act, 1993, as it invoked provisions of the repealed Gujarat Panchayats Act, 1961. The Court noted that even if the District Panchayats were divested of powers, it would only change the forum for applications. The Court referred to the Supreme Court's decision in Commissioner of Income Tax, Orissa Vs. Dhadi Sahu, stating that a law changing the forum does not affect pending actions unless clearly intended. The Court expressed concern over the lack of due diligence by government departments in legal matters, leading to litigation. The appeals pending before respondent No. 2 were directed to be decided on merits.
The Tribunal held that the impugned notice dated May 17, 2018, issued under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for AY 2016-17, is invalid and cannot be sustained. The reasoning was that the Assessing Officer had consciously decided that there was a violation of Section 11(3)(d) of the Act. However, the trust's argument that CIMS Hospital Pvt. Ltd. does not fall under the categories specified in Section 11(3)(d) was accepted. The Tribunal found that the Assessing Officer could not have formed a belief that income chargeable to tax had escaped assessment solely on the basis of the recorded reasons, as the applicability of Section 11(3)(d) was not established. This view was fortified by the Gujarat High Court's decision in *Dhruv Parulbhai Patel vs. Assistant Commissioner of Income Tax*, which emphasized that reopening notices must be supported by the recorded reasons and not by extraneous grounds. Therefore, the petition was allowed, and the notice was quashed and set aside.
The High Court held that since it is an admitted position that the tax effect involved in the appeal is less than Rs. 50,00,000/-, and in light of CBDT Circular No. 3/2018 dated 11th July, 2018, which stipulates that appeals with a tax effect not exceeding Rs. 50,00,000/- should not be filed before the High Court and is retrospectively applicable to pending appeals, the learned senior standing counsel for the appellant does not press the present appeal. Consequently, the appeal is disposed of as not pressed. The court also noted that if there is any error in the computation of the tax effect or if the circular is not applicable for any reason, the appellant would be at liberty to seek revival of the appeal. No specific issue was left undecided; the appeal was disposed of on a procedural ground.
The High Court held that for unabated assessments under Section 153A(1)(b), additions can only be made if they are based on incriminating documents seized or impounded during the search. In this case, it was an admitted position that scrutiny assessments under Section 143(3) had been completed for the relevant years. The Assessing Officer did not rely on any incriminating material found during the search when framing the assessment under Section 153A. The Revenue's argument that the Special Auditor's report, made under Section 142(2A), considered incriminating documents was found to be factually incorrect. The Special Auditors themselves did not place reliance on the seized material in their report, as the assessee had requested them not to consider explanations related to seized papers, stating it was for the Assessing Officer's consideration. Therefore, the Tribunal's order upholding the Commissioner (Appeals)'s deletion of additions was found to be legally sound. The court found no infirmity in the impugned order, and thus, no substantial question of law arose.
The High Court held that the appeals fail and are summarily dismissed. The court found no infirmity in the ITAT's order. It reiterated the settled legal position that in cases of unabated assessments under section 153A(1)(b), additions cannot be made unless they are based on incriminating documents seized or impounded during the search. The court examined the Special Auditor's report and found that the assessee had explained that any explanation provided regarding seized/impounded material was meant for the Assessing Officer's assessment proceedings and not for the audit. Consequently, the Special Auditors had not placed reliance on the material found during the search in their report. Therefore, the revenue's submission that the Special Auditors had considered incriminating documents lacked factual basis. The court concluded that since the assessment under section 153A was not based on any incriminating material found during the search, the deletion of additions by the Commissioner (Appeals) and upholding by the Tribunal were correct, and no substantial question of law arose.
The High Court held that the appeals fail and are summarily dismissed. The court found no infirmity in the ITAT's order. It reiterated the settled legal position that in cases of unabated assessments under section 153A(1)(b), additions cannot be made unless they are based on incriminating documents seized or impounded during the search. The court examined the Special Auditor's report and found that the assessee had explained that any explanation provided regarding seized/impounded material was meant for the Assessing Officer's assessment proceedings and not for the audit. Consequently, the Special Auditors had not placed reliance on the material found during the search in their report. Therefore, the revenue's submission that the Special Auditors had considered incriminating documents lacked factual basis. The court concluded that since the assessment under section 153A was not based on any incriminating material found during the search, the deletion of additions by the Commissioner (Appeals) and upholding by the Tribunal were correct, and no substantial question of law arose.
The High Court held that it is an admitted position between the parties that the tax effect involved in the appeal is less than Rs. 50,00,000/-. In light of Circular No. 3/2018 dated 11th July, 2018, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, which stipulates that no appeal where the tax effect does not exceed Rs. 50,00,000/- shall be filed before the High Court and has retrospective applicability to pending appeals, the learned senior standing counsel for the appellant (Revenue) did not press the appeal. Consequently, the appeal was disposed of as not pressed. The court also noted that if there is any error in the computation of the tax effect or if the circular is not applicable for any reason, the appellant would be at liberty to seek revival of the appeal. No specific finding was given on the merits of the original dispute.
The High Court held that the petitioners had made out a strong prima-facie case. The court found that the Tribunal and the first appellate authority were not justified in directing the payment of a huge pre-deposit for the admission of the appeal and for staying recovery. The court reasoned that Section 11(7A) of the GVAT Act envisages disallowance of tax credit only if it is established that tax has not been paid in respect of the very goods purchased by a dealer. Input tax credit cannot be disallowed based on a percentage of purchases from a dealer whose registration is cancelled without first establishing non-payment of tax on those specific goods. Furthermore, the court noted that the petitioners did not have the assessment orders of the vendors at the time of the original assessment, thus lacking an opportunity to prove the genuineness of the transactions. Relying on the precedent in Shree Bhairav Metal Corporation v. State of Gujarat, the court quashed and set aside the impugned orders of the Tribunal and the first appellate authority. The matter was restored to the file of the first appellate authority to be heard on merits without insisting on any pre-deposit, with the recovery of demand stayed until the final decision.
The petition is allowed, and the impugned notice dated March 30, 2018, issued under section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for assessment year 2011-12, is quashed and set aside. The Court held that the Rs. 3,00,000/- in question, which was the subject of the earlier proceedings under section 143(3) read with section 153A and added under section 69, had already been taxed. Therefore, it could not be considered as income that had escaped assessment. The Assessing Officer could not have formed a belief that income had escaped assessment, as it had already been assessed. Furthermore, the issue in respect of which reopening was sought was the subject matter of an appeal before the Commissioner (Appeals), whose order had merged with the Assessing Officer's order. The third proviso to section 147 explicitly prohibits reopening of assessment concerning matters that were subject to appeal, reference, or revision. Thus, the assumption of jurisdiction under section 147 lacked validity and was not permissible in law.
The Tribunal noted that it is an admitted position between the parties that the tax effect involved in the appeal is less than Rs. 50,00,000/-. In light of Circular No. 3/2018 dated 11th July, 2018, which mandates that no appeal with a tax effect not exceeding Rs. 50,00,000/- shall be filed before the High Court and has retrospective applicability to pending appeals, the learned Senior Standing Counsel for the appellant (Revenue) did not press the appeal. Consequently, the appeal was disposed of as not pressed. The Tribunal also granted liberty to the appellant to seek revival of the appeal if there was any error in the computation of the tax effect or if the circular was not applicable for any reason. No specific issue was left undecided, as the appeal was withdrawn by the appellant.
The High Court held that the appeal is not pressed by the appellant (Revenue). This decision is based on the admitted fact that the tax effect involved in the appeal is less than Rs. 50,00,000/-. The Court took into account Circular No. 3/2018 dated 11th July, 2018, issued by the Central Board of Direct Taxes. This circular stipulates that no appeal with a tax effect not exceeding Rs. 50,00,000/- shall be filed before the High Court and has been made retrospectively applicable to pending appeals. Consequently, the learned senior standing counsel for the appellant stated that the appeal is not pressed. The appeal is disposed of as not pressed in light of the aforementioned circular. The Court also noted that if there is any error in the computation of the tax effect or if the circular is not applicable for any reason, the appellant can seek revival of the appeal.
The High Court held that the driver of the motorcycle was negligent to the extent of 40% in causing the accident. The Tribunal's finding of complete negligence on the part of the motorcycle driver was set aside. The Court considered the claimant's income to be Rs. 1,10,000 per annum based on income tax returns and agricultural land documents. The claimant's disability was assessed at 50% body as a whole, considering the 100% functional loss of his right eye and partial disabilities to his nasal part and right upper limb. The total compensation was calculated at Rs. 8,25,000, which was then reduced by 40% due to the motorcycle driver's negligence, resulting in a final award of Rs. 4,95,000. The Court directed the respondent No. 3 (presumably the insurer of the tractor trolley) to pay this amount with 9% interest from the date of filing the petition.
The High Court held that the ITAT did not err in upholding the Commissioner (Appeals)'s order restricting the disallowance on account of bogus purchases to 25%. The court noted that the Commissioner (Appeals) had recorded a finding of fact that the assessee had produced goods by utilizing such bulk drugs, and the Tribunal had not disturbed this finding. The proposed questions of law were found to be not substantial, as they did not challenge the concurrent findings of fact or allege perversity. The High Court relied on its own previous decisions in N.K. Industries Ltd. and Vijay Proteins Ltd., which held that when goods are not received from the stated suppliers but from a different source known to the assessee, and there are corresponding sales, disallowing a portion (like 25%) of the purchase price as inflated expenditure is justified. The court clarified that the 25% figure is an estimate and not a fixed standard, but in the given facts, no interference was warranted. The decision in Shoreline Hotel (P.) Ltd. was deemed inapplicable as it involved a different issue (Section 263) and lacked corresponding sales.
The High Court held that the ITAT did not err in upholding the Commissioner (Appeals)'s order restricting the disallowance on account of bogus purchases to 25%. The court noted that the Commissioner (Appeals) had recorded a finding of fact that the assessee had produced goods by utilizing such bulk drugs, and the Tribunal had not disturbed this finding. The proposed questions of law were found to be not substantial, as they did not challenge the concurrent findings of fact or allege perversity. The High Court relied on its own previous decisions in N.K. Industries Ltd. and Vijay Proteins Ltd., which held that when goods are not received from the stated suppliers but from a different source known to the assessee, and there are corresponding sales, disallowing a portion (like 25%) of the purchase price as inflated expenditure is justified. The court clarified that the 25% figure is an estimate and not a fixed standard, but in the given facts, no interference was warranted. The decision in Shoreline Hotel (P.) Ltd. was deemed inapplicable as it involved a different issue (Section 263) and lacked corresponding sales.
The High Court, after hearing the learned counsel for the appellant, observed that the total amount involved in the appeal was very small. Considering the smallness of the amount in dispute, the Court was not inclined to delve into the merits of the controversy. Therefore, the High Court decided to dispose of the appeal without adjudicating on the substantive issues raised. The appeal was left open for the appellant to raise the same in an appropriate case. No specific finding was given on any of the issues, and no operative directions were issued regarding the disallowances themselves.
The High Court held that the ITAT did not err in upholding the Commissioner (Appeals)'s order restricting the disallowance on account of bogus purchases to 25%. The court noted that the Commissioner (Appeals) had recorded a finding of fact that the assessee had produced goods by utilizing such bulk drugs, and the Tribunal had not disturbed this finding. The proposed questions of law were found to be not substantial, as they did not challenge the concurrent findings of fact or allege perversity. The High Court relied on its own previous decisions in N.K. Industries Ltd. and Vijay Proteins Ltd., which held that when goods are not received from the stated suppliers but from a different source known to the assessee, and there are corresponding sales, disallowing a portion (like 25%) of the purchase price as inflated expenditure is justified. The court clarified that the 25% figure is an estimate and not a fixed standard, but in the given facts, no interference was warranted. The decision in Shoreline Hotel (P.) Ltd. was deemed inapplicable as it involved a different issue (Section 263) and lacked corresponding sales.
The High Court held that the reopening of the assessment was invalid and without the authority of law. The Court found that the Assessing Officer, in the reasons recorded for reopening, stated that the assessee had not submitted sufficient details proving the nexus between the course fees and its relevance for business purposes. However, the Court perused the record, including communications dated 19.2.2016 and 26.2.2016, where the petitioner had furnished detailed explanations. These explanations included a Board resolution requiring the director to work for five years post-training, a table showing a significant increase in turnover from Rs.857 lacs to Rs.1200 lacs in three years attributed to the director's enhanced skills, and the director's specialization in marketing for which he was trained. The Court concluded that the petitioner had demonstrated that the expenditure was wholly and exclusively for business purposes and that the company had benefited significantly. Therefore, the Assessing Officer, having considered and accepted these details during the scrutiny assessment, could not reopen the assessment on the same ground, as it constituted a mere change of opinion. The Court relied on the principle that an Assessing Officer cannot sit in appeal over the opinion of his predecessor. Consequently, the impugned notice and assessment order were quashed and set aside.
The High Court held that the appeals filed by the revenue do not give rise to any substantial question of law and are, accordingly, dismissed. The Court noted that the Commissioner (Appeals) had restricted the disallowance to 25% of the bogus purchases based on a finding of fact that the assessee had produced goods by utilizing such bulk drugs, implying corresponding sales. The ITAT had not disturbed this finding of fact. The Court relied on its own previous decisions in N.K. Industries Ltd. vs. DCIT and Vijay Proteins Ltd. v. Commissioner of Income Tax, which held that when there are corresponding sales for bogus purchases, disallowing only a portion (like 25%) is justified. The Court clarified that the quantum of restriction (25%) is an estimate and not a fixed standard, and an estimate cannot give rise to a question of law. The decision in Shoreline Hotel (P.) Ltd. v. Commissioner of Income Tax was distinguished as it involved a different factual matrix and did not involve corresponding sales. Therefore, the ITAT's order, being based on concurrent findings of fact and following jurisdictional High Court precedents, was upheld.
The High Court held that the ITAT did not err in upholding the Commissioner (Appeals)'s order restricting the disallowance on account of bogus purchases to 25%. The court noted that the Commissioner (Appeals) had recorded a finding of fact that the assessee had produced goods by utilizing such bulk drugs, and the Tribunal had not disturbed this finding. The proposed questions of law were found to be not substantial, as they did not challenge the concurrent findings of fact or allege perversity. The High Court relied on its own previous decisions in N.K. Industries Ltd. and Vijay Proteins Ltd., which held that when goods are not received from the stated suppliers but from a different source known to the assessee, and there are corresponding sales, disallowing a portion (like 25%) of the purchase price as inflated expenditure is justified. The court clarified that the 25% figure is an estimate and not a fixed standard, but in the given facts, no interference was warranted. The decision in Shoreline Hotel (P.) Ltd. was deemed inapplicable as it involved a different issue (Section 263) and lacked corresponding sales.
The High Court held that the Settlement Commission committed a flaw in its decision-making process by violating the provisions of section 245D(2C) of the Income Tax Act, 1961. The Commission improperly allowed the CIT (DR) to raise objections to the admission of the application and to supplement the Principal Commissioner's report with oral submissions based on the record and other evidence. This stage, under section 245D(2C), contemplates a decision solely on the basis of the report submitted by the Commissioner. Allowing the CIT (DR) to go beyond the report and raise objections at this threshold stage, and considering material other than the report, also breached the principles of natural justice. Therefore, the impugned order was unsustainable. The Court quashed and set aside the impugned orders and restored the applications to the Settlement Commission at the stage of section 245D(2C) for a fresh decision within fifteen days, without being influenced by the quashed orders.
The High Court held that the Settlement Commission committed a flaw in its decision-making process by violating the provisions of section 245D(2C) of the Income Tax Act, 1961. The Commission improperly allowed the CIT (DR) to raise objections to the admission of the application and to supplement the Principal Commissioner's report with oral submissions based on the record and other evidence. This stage, under section 245D(2C), contemplates a decision solely on the basis of the report submitted by the Commissioner. Allowing the CIT (DR) to go beyond the report and raise objections at this threshold stage, and considering material other than the report, also breached the principles of natural justice. Therefore, the impugned order was unsustainable. The Court quashed and set aside the impugned orders and restored the applications to the Settlement Commission at the stage of section 245D(2C) for a fresh decision within fifteen days, without being influenced by the quashed orders.
The High Court held that the Settlement Commission committed a flaw in its decision-making process by violating the provisions of section 245D(2C) of the Income Tax Act, 1961. The Commission improperly allowed the CIT (DR) to raise objections to the admission of the application and to supplement the Principal Commissioner's report with oral submissions based on the record and other evidence. This stage, under section 245D(2C), contemplates a decision solely on the basis of the report submitted by the Commissioner. Allowing the CIT (DR) to go beyond the report and raise objections at this threshold stage, and considering material other than the report, also breached the principles of natural justice. Therefore, the impugned order was unsustainable. The Court quashed and set aside the impugned orders and restored the applications to the Settlement Commission at the stage of section 245D(2C) for a fresh decision within fifteen days, without being influenced by the quashed orders.
The High Court held that the Settlement Commission committed a flaw in its decision-making process by violating the provisions of section 245D(2C) of the Income Tax Act, 1961. The Commission improperly allowed the CIT (DR) to raise objections to the admission of the application and to supplement the Principal Commissioner's report with oral submissions based on the record and other evidence. This stage, under section 245D(2C), contemplates a decision solely on the basis of the report submitted by the Commissioner. Allowing the CIT (DR) to go beyond the report and raise objections at this threshold stage, and considering material other than the report, also breached the principles of natural justice. Therefore, the impugned order was unsustainable. The Court quashed and set aside the impugned orders and restored the applications to the Settlement Commission at the stage of section 245D(2C) for a fresh decision within fifteen days, without being influenced by the quashed orders.
The High Court partly allowed the appeals. For the deceased Mehul Shantilal Vala, the Court found the Tribunal's income assessment of Rs. 2,000/- per month to be erroneous and fixed it at Rs. 4,000/- per month, applying a multiplier of 18 years (instead of 15) for a 19-year-old deceased, leading to a revised compensation of Rs. 8,64,000/-. For the injured claimant, the Court increased the monthly income from Rs. 1,500/- to Rs. 2,000/- and applied a multiplier of 18 years (instead of 16) for the 56.6% permanent disability, resulting in a revised compensation of Rs. 3,21,920/-. For the third deceased, the Court considered the net monthly income as Rs. 2,250/- (instead of Rs. 1,500/-) and applied a multiplier of 18 years (instead of 16) for a 20-year-old bachelor, leading to a revised compensation of Rs. 2,73,000/-. The insurance company was directed to pay the difference amounts. The rest of the Tribunal's award was confirmed. The ratio is that the Tribunal's assessment of income and application of multipliers should be based on evidence and settled legal principles, particularly regarding age and disability, to ensure just compensation.
The High Court partly allowed the appeals. For the deceased Mehul Shantilal Vala, the Court found the Tribunal's income assessment of Rs. 2,000/- per month to be erroneous and fixed it at Rs. 4,000/- per month, applying a multiplier of 18 years (instead of 15) for a 19-year-old deceased, leading to a revised compensation of Rs. 8,64,000/-. For the injured claimant, the Court increased the monthly income from Rs. 1,500/- to Rs. 2,000/- and applied a multiplier of 18 years (instead of 16) for the 56.6% permanent disability, resulting in a revised compensation of Rs. 3,21,920/-. For the third deceased, the Court considered the net monthly income as Rs. 2,250/- (instead of Rs. 1,500/-) and applied a multiplier of 18 years (instead of 16) for a 20-year-old bachelor, leading to a revised compensation of Rs. 2,73,000/-. The insurance company was directed to pay the difference amounts. The rest of the Tribunal's award was confirmed. The ratio is that the Tribunal's assessment of income and application of multipliers should be based on evidence and settled legal principles, particularly regarding age and disability, to ensure just compensation.
The High Court held that the Settlement Commission committed a flaw in its decision-making process by violating the provisions of section 245D(2C) of the Income Tax Act, 1961. The Commission improperly allowed the CIT (DR) to raise objections to the admission of the application and to supplement the Principal Commissioner's report with oral submissions based on the record and other evidence. This stage, under section 245D(2C), contemplates a decision solely on the basis of the report submitted by the Commissioner. Allowing the CIT (DR) to go beyond the report and raise objections at this threshold stage, and considering material other than the report, also breached the principles of natural justice. Therefore, the impugned order was unsustainable. The Court quashed and set aside the impugned orders and restored the applications to the Settlement Commission at the stage of section 245D(2C) for a fresh decision within fifteen days, without being influenced by the quashed orders.
The High Court held that the impugned order passed by the Settlement Commission was unsustainable. The Court found a flaw in the decision-making process, as the Settlement Commission violated the provisions of Section 245D(2C) of the Act. Specifically, the Commission allowed the CIT (DR) to object to the admission of the application and supplement the Principal Commissioner's report with oral submissions based on the record and other evidence. This was contrary to Section 245D(2C), which contemplates a decision solely on the basis of the report. The Court also noted a breach of the principles of natural justice, as reliance was placed on material other than the report at the Section 245D(2C) stage. The petitions were allowed, the impugned orders were quashed and set aside, and the applications were restored to the Settlement Commission at the stage of Section 245D(2C) to be decided afresh in accordance with law within fifteen days, without being influenced by the findings in the quashed orders.
The High Court held that section 292BB of the Income-tax Act, 1961, applies to situations where a notice has been issued, and there is a contention regarding its service (non-service, late service, or improper service). It does not apply to a situation where no notice has been issued at all. In this case, it was an admitted position that no notice under section 143(2) was issued after the assessee filed its return of income. The Court found that the omission to issue a notice under section 143(2) is not a procedural irregularity and is not curable, making it mandatory to issue such a notice. The Court disagreed with the Punjab and Haryana High Court's decision in Ram Narain Bansal and distinguished the Madras High Court's decision in Venkatesan Raghuram Prasad as a case of defective service, not non-issuance. Therefore, the assessment order passed without a valid notice under section 143(2) is rendered invalid. The Tribunal and the Commissioner (Appeals) did not err in their findings. The appeal was dismissed, and the substantial question of law was answered in favour of the assessee.
The High Court held that the Settlement Commission committed a flaw in its decision-making process by violating the provisions of section 245D(2C) of the Income Tax Act, 1961. The Commission improperly allowed the CIT (DR) to raise objections to the admission of the application and to supplement the Principal Commissioner's report with oral submissions based on the record and other evidence. This stage, under section 245D(2C), contemplates a decision solely on the basis of the report submitted by the Commissioner. Allowing the CIT (DR) to go beyond the report and raise objections at this threshold stage, and considering material other than the report, also breached the principles of natural justice. Therefore, the impugned order was unsustainable. The Court quashed and set aside the impugned orders and restored the applications to the Settlement Commission at the stage of section 245D(2C) for a fresh decision within fifteen days, without being influenced by the quashed orders.
The High Court held that the Settlement Commission committed a flaw in its decision-making process by violating the provisions of section 245D(2C) of the Income Tax Act, 1961. The Commission improperly allowed the CIT (DR) to raise objections to the admission of the application and to supplement the Principal Commissioner's report with oral submissions based on the record and other evidence. This stage, under section 245D(2C), contemplates a decision solely on the basis of the report submitted by the Commissioner. Allowing the CIT (DR) to go beyond the report and raise objections at this threshold stage, and considering material other than the report, also breached the principles of natural justice. Therefore, the impugned order was unsustainable. The Court quashed and set aside the impugned orders and restored the applications to the Settlement Commission at the stage of section 245D(2C) for a fresh decision within fifteen days, without being influenced by the quashed orders.
The High Court modified the award of the Tribunal. While confirming the Tribunal's assessment of the appellant's income (Rs. 1,500/- per month from advocacy and Rs. 1,000/- from agriculture), the Court found an error in the application of the multiplier. Citing *Sarla Verma* and *Reshma Kumari and Others V. Madan Mohan and Another*, the Court held that a multiplier of 17 should be applied for an age group of 26-30 years, instead of the 15 used by the Tribunal. This resulted in an increase in future loss of income from Rs. 1,01,250/- to Rs. 1,14,750/-. Additionally, the Court found the amount awarded for medical expenses, special diet, attendant charges, transportation, and pain, shock, and sufferings to be inadequate, considering the prolonged treatment at various hospitals. Therefore, the total amount under these heads was enhanced from Rs. 15,500/- to Rs. 50,000/-. The total compensation was thus enhanced from Rs. 1,29,250/- to Rs. 1,77,250/-.
The High Court held that the Settlement Commission committed a flaw in its decision-making process by violating the provisions of section 245D(2C) of the Income Tax Act, 1961. The Commission improperly allowed the CIT (DR) to raise objections to the admission of the application and to supplement the Principal Commissioner's report with oral submissions based on the record and other evidence. This stage, under section 245D(2C), contemplates a decision solely on the basis of the report submitted by the Commissioner. Allowing the CIT (DR) to go beyond the report and raise objections at this threshold stage, and considering material other than the report, also breached the principles of natural justice. Therefore, the impugned order was unsustainable. The Court quashed and set aside the impugned orders and restored the applications to the Settlement Commission at the stage of section 245D(2C) for a fresh decision within fifteen days, without being influenced by the quashed orders.
The High Court held that the Settlement Commission committed a flaw in its decision-making process by violating the provisions of section 245D(2C) of the Income Tax Act, 1961. The Commission improperly allowed the CIT (DR) to raise objections to the admission of the application and to supplement the Principal Commissioner's report with oral submissions based on the record and other evidence. This stage, under section 245D(2C), contemplates a decision solely on the basis of the report submitted by the Commissioner. Allowing the CIT (DR) to go beyond the report and raise objections at this threshold stage, and considering material other than the report, also breached the principles of natural justice. Therefore, the impugned order was unsustainable. The Court quashed and set aside the impugned orders and restored the applications to the Settlement Commission at the stage of section 245D(2C) for a fresh decision within fifteen days, without being influenced by the quashed orders.
The High Court partly allowed the appeals. For the deceased Mehul Shantilal Vala, the Court found the Tribunal's income assessment of Rs. 2,000/- per month to be erroneous and fixed it at Rs. 4,000/- per month, applying a multiplier of 18 years (instead of 15) for a 19-year-old deceased, leading to a revised compensation of Rs. 8,64,000/-. For the injured claimant, the Court increased the monthly income from Rs. 1,500/- to Rs. 2,000/- and applied a multiplier of 18 years (instead of 16) for the 56.6% permanent disability, resulting in a revised compensation of Rs. 3,21,920/-. For the third deceased, the Court considered the net monthly income as Rs. 2,250/- (instead of Rs. 1,500/-) and applied a multiplier of 18 years (instead of 16) for a 20-year-old bachelor, leading to a revised compensation of Rs. 2,73,000/-. The insurance company was directed to pay the difference amounts. The rest of the Tribunal's award was confirmed. The ratio is that the Tribunal's assessment of income and application of multipliers should be based on evidence and settled legal principles, particularly regarding age and disability, to ensure just compensation.
The High Court noted that it is an admitted position between the parties that the tax effect involved in the appeal is less than Rs. 50,00,000/-. In light of Circular No. 3/2018 dated 11th July, 2018, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, which stipulates that no appeal where the tax effect does not exceed the monetary limit of Rs. 50,00,000/- shall be filed before the High Court and has been made retrospectively applicable to pending appeals, the learned senior standing counsel for the appellant (Revenue) did not press the present appeal. The appeal is accordingly disposed of as not pressed. The Court also noted that if there is any error in the computation of the tax effect or if the circular is not applicable for any reason, the appellant would be at liberty to seek revival of the appeal.
The Tribunal's finding that the ST driver was solely negligent was upheld. The High Court reasoned that the appellants had not challenged the award in the connected matter (MACP No. 431 of 2006), which also held the ST driver solely negligent, thereby admitting the determination of negligence. Furthermore, the ST driver did not appear in the witness box to prove any contributory negligence, a point supported by Supreme Court decisions in Jiju Kuruvila & Ors vs. Oriental Insurance Co. Ltd. and Sarladevi & Ors. vs. Divisional Manager, Royal Sundaram Alliance Ins. Co. Ltd. The court found no substance in the plea of contributory negligence, as it was based solely on pleadings without supporting evidence. Regarding the quantum of compensation, the court found no reason to reduce it. The Tribunal had considered income-tax returns for the three years prior to the accident to calculate the average income and applied principles from Sarla Verma Vs. Delhi Transport Corporation and National Insurance Co. Ltd. Vs. Pranay Sethi. The court concluded that the award was well-reasoned and based on settled legal propositions, and the fact that the award exceeded Rs. 10 Lakhs was not a ground for interference. The First Appeal was dismissed.
The High Court held that since the tax effect involved in the appeal was less than Rs. 50,00,000/-, and in light of CBDT Circular No. 3/2018 dated 11th July, 2018, which mandates that no appeal with a tax effect not exceeding Rs. 50,00,000/- shall be filed before the High Court and is retrospectively applicable to pending appeals, the appeal would not be pressed by the appellant. The reasoning is based on the explicit terms of the circular and the admitted tax effect. The operative direction is that the appeal is disposed of as not pressed. The court also granted liberty to the appellant to seek revival of the appeal if there was any error in the computation of the tax effect or if the circular was not applicable for any reason.
The High Court held that the appeal is disposed of as not pressed. This decision is based on the admitted position that the tax effect involved is less than Rs. 50,00,000/-. The Court relied on Circular No. 3/2018, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes. This circular stipulates that appeals with a tax effect not exceeding Rs. 50,00,000/- should not be filed before the High Court and has been made retrospectively applicable to pending appeals. Consequently, the learned senior standing counsel for the appellant (Revenue) did not press the appeal. The operative direction is that the appeal is disposed of as not pressed. The Court also noted that if there is any error in the computation of the tax effect or if the circular is not applicable for any reason, the appellant would be at liberty to seek revival of the appeal.
The High Court held that the appeal is not pressed by the appellant (Revenue). This decision is based on the admitted fact that the tax effect involved in the appeal is less than Rs. 50,00,000/-. The Court took into consideration Circular No. 3/2018 dated 11th July, 2018, issued by the CBDT, which mandates that no appeal should be filed before the High Court if the tax effect does not exceed Rs. 50,00,000/-. This circular has also been made retrospectively applicable to pending appeals. Consequently, the learned senior standing counsel for the appellant stated that they do not press the present appeal. The appeal is accordingly disposed of as not pressed in light of the aforementioned circular. The Court also noted that if there is any error in the computation of the tax effect or if the circular is not applicable for any reason, the appellant would have the liberty to seek revival of the appeal.
The High Court held that the tax effect involved in the appeal was less than Rs. 50,00,000/-. In light of CBDT Circular No. 3/2018, which mandates that no appeal with a tax effect not exceeding Rs. 50,00,000/- shall be filed before the High Court and is retrospectively applicable, the learned senior standing counsel for the appellant did not press the appeal. The appeal was accordingly disposed of as not pressed. The Court also noted that if there was any error in the computation of the tax effect or if the circular was not applicable for any reason, the appellant could seek revival of the appeal. No specific finding was made on the merits of the original dispute.
The High Court held that the impugned order of the ITAT was unsustainable. The Court found that the decision in Commissioner of Income Tax-III v. Bhogilal Ramjibhai Atara was squarely applicable. In that case, the court held that Section 41(1) applies only if there is remission or cessation of liability during the relevant previous year, and that the expiry of the limitation period does not extinguish the debt. The High Court noted that the facts of the present case were similar, and the Commissioner (Appeals) was justified in deleting the addition. Furthermore, the Court observed that if liabilities were written off and offered as income in subsequent years, taxing them in the current year would amount to double taxation, which is impermissible. The Court also distinguished the decisions relied upon by the revenue, finding them not applicable to the facts of the case. The appeal was allowed, quashing the ITAT's order and answering the questions in favour of the assessee.
The Tribunal held that the appeal is to be disposed of as not pressed. This decision is based on the admitted position that the tax effect involved in the appeal is less than Rs. 50,00,000/-. The Tribunal relied on Circular No. 3/2018 dated 11th July, 2018, which mandates that appeals with a tax effect not exceeding Rs. 50,00,000/- should not be filed before the High Court and is applicable retrospectively to pending appeals. Consequently, the Revenue's counsel did not press the appeal. The operative direction is that the appeal is disposed of as not pressed. However, the Tribunal granted liberty to the appellant to seek revival of the appeal if there is any error in the computation of the tax effect or if the circular is not applicable for any reason. No issue was expressly left undecided.
The High Court held that since the tax effect involved in the appeal is less than Rs. 50,00,000/-, and in light of CBDT Circular No. 3/2018 dated 11th July, 2018, which mandates that no appeal with a tax effect not exceeding Rs. 50,00,000/- shall be filed before the High Court and has retrospective applicability, the learned senior standing counsel for the appellant (Revenue) does not press the present appeal. Consequently, the appeal is disposed of as not pressed. The Court also noted that if there is any error in the computation of the tax effect or if the circular is not applicable for any reason, the appellant would be at liberty to seek revival of the appeal. No specific finding was made on the merits of the original appeal.
The High Court held that the notice under Section 148 of the Income-tax Act, 1961, issued to the deceased assessee, Shri Brijeshkumar Parsottambhai Ukani, was invalid and lacked jurisdiction. The Court reasoned that a notice under Section 148 is a jurisdictional notice, and its validity is a condition precedent for the Assessing Officer to exercise jurisdiction under Section 147. A notice issued to a dead person is invalid unless the legal representative submits to the jurisdiction without objection. In this case, the legal representative (petitioner) raised an objection to the validity of the notice and did not waive her right to a notice under Section 148. Therefore, the provisions of Section 292B of the Act, which deal with the validity of notices despite minor defects, were not attracted. The Court referred to its own decision in Rasid Lala v. Income Tax Officer, Ward-1(3)(6) (supra) as squarely applicable. The Court concluded that while it is permissible to issue a fresh notice under Section 148 to the legal representative (provided it is not barred by limitation), proceedings cannot be continued based on an invalid notice issued to the deceased. Consequently, the impugned notice and all proceedings pursuant thereto were quashed and set aside.
The High Court held that since the tax effect involved in the appeal was admitted to be less than Rs. 50,00,000/-, and in light of Circular No. 3/2018 dated 11th July, 2018, which mandates that no appeal with a tax effect not exceeding Rs. 50,00,000/- should be filed before the High Court and is retrospectively applicable to pending appeals, the Revenue's counsel did not press the appeal. Consequently, the appeal was disposed of as not pressed. The Court also noted that if there was any error in the computation of the tax effect or if the circular was not applicable for any reason, the appellant would be at liberty to seek revival of the appeal. The ratio decidendi is that appeals falling below the specified monetary threshold, as per the CBDT circular, are to be withdrawn or not pressed.
The Tribunal's finding that the driver of the bus was solely negligent was upheld. The Court re-appreciated the evidence, including the Crime Details Form, panchnama, and the deposition of the eye-witness, Mr. Sharma. The evidence indicated that the bus, a heavier vehicle, hit the Tempo Trax Jeep on its driver's side, not in a head-on collision. The eye-witness testimony supported the fact that the Tempo Trax Jeep was driven at a moderate speed on the left side of the road. The Court also clarified that the statement made by the counsel for respondent No. 6 (insurer of the Tempo Trax Jeep) before the Tribunal did not bind respondent No. 6. Regarding the quantum, the Court recalculated the compensation. The net monthly income was determined after considering the basic salary, site allowance, and deducting 10% for income tax. Future prospects of 50% were added, and 1/3 was deducted for personal expenses. The multiplier of 15 was applied. The total compensation calculated was Rs. 21,18,220/- (Rs. 20,48,220/- for loss of dependency + Rs. 70,000/- for conventional heads). Since Rs. 17,02,940/- was already awarded, an additional sum of Rs. 4,15,280/- with 9% interest was awarded to the claimants.
The Tribunal's finding that the driver of the bus was solely negligent was upheld. The Court re-appreciated the evidence, including the Crime Details Form, panchnama, and the deposition of the eye-witness, Mr. Sharma. The evidence indicated that the bus, a heavier vehicle, collided with the driver's side (right side) of the Tempo Trax Jeep in the middle of the road, not a head-on collision. The eye-witness testimony supported the finding that the Tempo Trax Jeep was driven at a moderate speed on the left side of the road. The statement made by the counsel for respondent No. 6 before the Tribunal was correctly held not to bind respondent No. 6. Regarding quantum, the Court recalculated the compensation. The net monthly income was determined as Rs. 11,379/- (Rs. 15,000/- salary, including Rs. 2,353/- site allowance, minus Rs. 1,268/- 10% income tax deduction). Adding 50% for future prospects resulted in Rs. 17,069/-. After deducting 1/3 for personal expenses (Rs. 5,690/-), the annual dependency was Rs. 1,36,548/-. With a multiplier of 15, the total loss of dependency was Rs. 20,48,220/-. Adding Rs. 70,000/- for conventional heads, the total compensation came to Rs. 21,18,220/-. Since Rs. 17,02,940/- was already awarded, the additional compensation due was Rs. 4,15,280/- with 9% interest. The appeal was dismissed, and the cross-objections were allowed to this extent.
The High Court held that the CBDT ought to have exercised its powers under section 119(2)(b) of the Act and condoned the delay in filing the return of income. The Court found that rendering substantial justice should be the paramount consideration rather than deciding on hyper-technicalities. The Court distinguished the present case from the precedents relied upon by the revenue, such as Deep Narayan Gupta v. CBDT and B U Bhandari Nandgude Patil Associates v. CBDT, noting that in those cases, the delay was either deliberate or lacked sufficient substantiation, unlike the present situation where the original return was filed in time and the subsequent revised return was necessitated by an error in claiming carry-forward losses. The Court quashed and set aside the impugned order of the CBDT and directed that the petitioner's return of income be processed in accordance with law. The petition was allowed.