TaxTMI 
TaxTMI 
2022 (2) TMI 602
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..... MAHADEVAN, J. For the sake of convenience, the judgment is divided into the following heads: A. FACTS & NARRATION OF PLEADINGS PARAGRAPHS 1-8 B. ANALYSIS PARAGRAPHS 9-30 C. FINDINGS PARAGRAPHS 31-35 D. CONCLUSION PARAGRAPH 36 A. FACTS & NARRATION OF PLEADINGS 1. Questioning the correctness and legality of the order dated 09.04.2021 passed by the Learned Judge in WP.Nos.35256 of 2019 etc. batch, these intra-court appeals are filed by the appellants / Department. By the order impugned herein, the writ petitions filed by the respondents herein were allowed and thereby the orders dated 26.08.2019, 27.08.2019 and 28.08.2019 passed by the first appellant / Adjudicating Authority in terms of Section 26(3) of the Prohibition of Benami Property Transactions Act, 1988 (hereinafter shortly referred to as 'the Act') were quashed. 2. To determine the issue involved in this batch of cases, it would be necessary to briefly narrate the facts, which are common in all the matters. For the easy reference, this court proposes to discuss the facts in WP.No.35256 of 2019 as done by the learned Judge, which would run thus: 2.1 During the year 2017, a search was conducted in the pre....
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....ause notice dated 14.08.2018 under Section 26 (1) of the Act. The first appellant, after affording sufficient opportunities to the respondent and considering the material evidence placed, passed an order dated 26.08.2019 in terms of Section 26 (3) of the Act, confirming the provisional order of attachment passed by the second appellant inter alia holding that the subject matter of the property is a benami property and the transaction is a benami transaction, in which the respondent is the benamidar of the beneficial owner M/s. Marg Limited. 3. Similar orders were passed by the first appellant confirming the attachment orders passed by the second appellant in the references registered in respect of the other properties belonging to the respective respondent companies, on the same day i.e., on 26.08.2019 and also on 27.08.2019 and 28.08.2019. Challenging the said orders passed by the first appellant, the respondents herein preferred 57 writ petitions before the Learned Judge. 4. Before the Learned Judge, it was mainly contended on behalf of the respondents that the orders dated 26.08.2019, 27.08.2019 and 28.08.2019 passed by the first appellant are barred by limitation. It was furt....
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....09.2019, cannot be construed as the dates of passing of the orders under section 26(3) of the Act. Therefore, the orders dated 26/27/28.08.2019 were passed by the first appellant strictly in accordance with Section 26(7) of the Act and the same cannot be barred by limitation. 6. After hearing the submissions of the learned counsel for both sides, the Learned Judge allowed the writ petitions on the ground that the orders passed by the first appellant will take effect only from the date of communication of the same to the parties. It was also observed that on 17.07.2019, the orders were reserved, but only on 04.09.2019 and 11.09.2019, the copies of the same were certified by the Administrative Officer-cum- Registrar, which would suggest that the orders have not been passed within the time limit as prescribed under Section 26 (7) of the Act. In effect, the Learned Judge, on perusal of the registers maintained by the authorities, held that the orders passed by the first appellant, have not been passed on the dates indicated thereof and accordingly, allowed the writ petitions filed by the respondents herein and set aside the adjudication orders passed by the first appellant. Therefore,....
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.... SCC 603] and The Authorised Officer, State Bank of India vs. Mathew KC [(2018) 3 SCC 85] to drive home the point that when there is a statutorily in-built remedy, which is also an efficacious remedy, the aggrieved party has to only exhaust such remedy and the remedy of writ should be very sparingly invoked. 7.3 It is also contended by the learned Special Public Prosecutor that the writ petitions were filed by the respondents after the expiry of maximum time limit of 45 days as prescribed under Section 46 of the Act for filing statutory appeals. Admittedly, the certified copies of the orders of the Adjudicating Authority / first appellant were served on the respective respondents on 29.10.2019, however, without preferring any statutory appeals as prescribed under Section 46 of the Act, the respondents preferred the writ petitions before this Court from 17.12.2019 onwards and hence, the writ petitions filed after the expiry of 45 days of service of the copies of the orders, ought not to have been entertained by the Learned Judge. In this regard, the learned Special Public Prosecutor referred to the decision of the Honourable Supreme Court in Assistant Commissioner (CT) LTU, Kakinad....
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....performed. The observation of this Court in the above-referred judgment can usefully be quoted below: "The fact that an order for attachment has been passed is not sufficient to establish the factum of attachment. An attachment cannot be said to have been made unless and until the provisions of both the sub-rules of O.21 R.54 have been complied with. When several properties are sought to be attached in pursuance of an order for attachment, there must be proof of affixture on every one of the properties. The mere fact that in pursuance of an order for attachment in respect of a house and lands there was an affixture of the order on the house does not lead to any presumption that the order has been affixed on the lands also. No doubt, when the only evidence is that a particular judicial or official act has been performed and there is no other evidence on record, it may be presumed under S.114, Illustration (e) that that particular act was regularly performed. But when the dispute is whether that act was performed or not, there is nothing in law which enables a Court to presume that that act was a matter of fact performed. It may also be mentioned that it is not obligatory on the pa....
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.... 'AIR 1951 Mad 204 (B)' the learned Judges negatived the contention, that the provision in sub-section. (2) of Section 33- A of the Income Tax Act was not really a provision prescribing the time limit for the exercise of the right of the party aggrieved, but that it imposed only a limit for the exercise of revisional powers by the Commissioner. Sub-section (1) of S.33-A provided that the Commissioner could on his own motion exercise his revisional powers, provided the order had not been made more than one year previously. Sub-section (2) of S.33-A provided for the application by an assessee to the Commissioner the date of the order. The learned Judges explained in - 'AIR 1951 Mad 204 (B)' that the date of the order for purposes of sub-sec (2) of S.33-A." 7.8 The learned Special Public Prosecutor also referred to the decision of the Hon'ble Supreme Court in Raja Harish Chandra Raj Singh v. Deputy Land Acquisition Officer and another [(1962) 1 SCR 676 : AIR 1961 SC 1500] wherein it was held that "date of service of the award has to be reckoned as the date from which the period of limitation commence". In Paragraph 10, it was held as follows: "10. It may, howeve....
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...., this conclusion is obviously right". 7.9 Further, the learned Special Public Prosecutor placed reliance on the decision in The Commissioner of Income Tax, Chennai v. Mohammed Meeran Shahul Hameed passed in Civil Appeal No. 6204 of 2021 dated 07.10.2021, in which, the Honourable Supreme Court set aside the order dated 03.07.2019 passed by the Division Bench of this Court in TCA No. 429 of 2019, holding that "it is not enough that the Authority should pass the order, but it should be communicated to the aggrieved individual in a manner known to law and acknowledgment card should be obtained". The relevant passage of the said judgment is profitably extracted below: "4.3 On a fair reading of sub-section (2) of Section 263, it can be seen that as mandated by sub-section (2) of Section 263 no order under Section 263 of the Act shall be "made" after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. Therefore, the word used is 'made' and not the order 'received' by the assessee. Even the word 'dispatch' is not mentioned in Section 263 (2). Therefore, once it is established that the order under Section....
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....ublic Prosecutor sought to allow these appeals by setting aside the order impugned herein. 8.1 Per contra, Mr. A.L. Somayaji, learned Senior counsel appearing for the respondents would contend that M/s.Marg Limited is a private limited company engaged in the business of real estate and infrastructure development. During the course of such business, a search was conducted in the premises of M/s.Marg Limited and its associated entities. The authorities engaged in such search, recorded the statements of the representative of the respondent companies, besides impounded several documents. Following the search, show cause notices dated 26.04.2018 were issued under Section 24 (1) of the Act by the second appellant alleging that the respondents are benamidars for M/s.Marg Limited, which beneficially owns the properties mentioned therein. It was also alleged in the show cause notices that at the time of purchase of the lands, loans were availed by the respondents from M/s.Great Meera Finlease Private Limited, a Non-banking finance company (NBFC) incorporated solely for the purpose of routing of the funds of marg group of companies and for the purchase of the assets. In effect, it was alleg....
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.... Act and suffer from procedural impropriety. In this context, the learned senior counsel placed reliance on the decision of the Honourable Supreme Court in Hindustan Petroleum Corporation Limited v. Darius Shapur Chenai and others [(2005) 7 SCC 627] wherein in paragraph 8, it was held that "when the decision making process itself is in question, the power of judicial review can be exercised by the Court in the event the order impugned suffers from well-known principles viz., illegality, irrationality and procedural impropriety". 8.3 The learned senior counsel appearing for the respondents also contended that the appellants have not arrived at a subjective satisfaction as regards the transactions alleged to have been benami transactions done by the respondents for and on behalf of the beneficiary namely M/s. Marg Limited; they failed to establish that there is a nexus between the assets held by the respondents and the income generated by M/s. Marg; and in the absence of establishing such nexus, the entire proceedings initiated under the Act by the appellants stand vitiated. In this regard, the learned senior counsel placed reliance on the decision of the Honourable Supreme Court in....
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.... of passing of the order by the Assessing Officer and moreover, a particular page of the order sheet is maintained on a rough sheet (in an unusual manner) different from other pages of the order sheet. Besides this flaw in the records, learned counsel for the Revenue is neither able to point out from the records that the assessment orders were dispatched on April 27, 2007 nor produced the dispatch register to establish that the orders are complete and effective i.e., it is issued, so as to be beyond the control of the authority concerned, within the period of limitation i.e., April 29, 2007. Admittedly, the assessment orders were served on the assessee on April 30, 2007. Hence, we are of the considered opinion that the assessment orders passed are barred by limitation. 10. An identical issue was before this Court in I.T.A. No. 832 of 2008 (dated October 14, 2014) in the case of Maharaja Shopping Complex v. Deputy CIT. This Court following the judgment of the Kerala High Court in the case of Government Wood Works v. State of Kerala, (1988) 69 STC 62 (Ker) has held that in the absence of dispatch date made available to the Court from the records, to prove that the order is issued w....
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....y the use of the mandatory words an obligation is placed on the collector to communicate the award immediately to the person concerned. It is significant that the section requires the Collector to give notice of the award immediately after making it. This provision lends support to the view which we have taken about the construction of the expression "from the date of the Collector's award" in the proviso to Section 18. It is because communication of the order is regarded by the legislature as necessary that Section 12 (2) has imposed an obligation on the collector and if the relevant clause in the proviso is read in the light of this statutory requirements it tends to show that the literal and mechanical construction of the said clause would be wholly inappropriate. It would indeed be a very curious result that the failure of the Collector to discharge his obligation under Section 12 (2) should directly tend to make ineffective the right of the party to make an application under Section 18, and this result could not possibly have been intended by the legislature." 8.7 For the same proposition, as to when an order passed by an authority will take effect, whether from the date ....
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.... Bhatt or His Successors to office [(2011) 334 ITR 25 (Gujarat)] wherein it was held that "date of issuance of notice under Section 148 Income Tax Act has to be reckoned not from the date when it was issued, but on the date when it was actually delivered on the assessee" and in paragraphs 13 to 16, it was held thus: "13. On a plain reading of Section 149, it is apparent that under the said provision, the maximum time limit for issuance of notice under Section 148 is six years from the end of the relevant assessment year. In the present case, the relevant assessment year in each of the petitions is 2003-2004; the impugned notices are dated 31.03.2010; and the said notices were sent for booking to the Speed Post Centre, Ahmedabad, on 07.04.2010. On behalf of the petitioners, it has been contended that the notices which have been dispatched for service only on 07.04.2010, are clearly time barred inasmuch as the date of dispatch would be the date of issue of the notices. Whereas, on behalf of the revenue, it has been contended that the notices were actually signed on 31.03.2010, hence, the said date would be the date of issue and as such, the impugned notices have been issued within ....
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....nt to the speed post centre for booking only on 07.04.2010. Considering the definition of the word issue, it is apparent that merely signing the notices on 31.03.2010, cannot be equated with issuance of notice as contemplated under Section 149 of the Act. The date of issue would be the date on which the same were handed over for service to the proper officer which in the facts of the present case would be the date on which the said notices were actually handed over to the post office for the purpose of booking for the purpose of effecting service on the petitioners. Till the point of time the envelopes are properly stamped with adequate value of postal stamps, it cannot be stated that the process of issue is complete. In the facts of the present case, the impugned notices having been sent for booking to the speed post centre only on 07.04.2010, the date of issue of the said notices would be 07.04.2010 and not 31.03.2010, as contended on behalf of the revenue. In the circumstances, impugned the notices under Section 148 in relation to assessment year 2003-04, having been issued on 07.04.2010, which is clearly beyond the period of six years from the end of the relevant assessment yea....
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....ing Authority has to pass appropriate orders under section 26(3) in accordance with section 26(7), in which, it has been specifically mentioned that 'No order under sub-section 3 shall be passed after the expiry of one year from the end of the month in which the reference under sub-section 5 of section 24 was received'. Thus, it is vivid that the enquiry and the adjudication are time-bound as per the statute. Once the adjudicating authority passes the order under section 26(3), an appeal remedy has been provided under section 46. A further remedy of appeal has also been provided before the High Court under section 49 on a substantial question of law. 12. In the order impugned herein, the Learned Judge has not explained as to why the writ petitions were entertained at the first instance, when the grounds of attack could have been canvassed in the statutory appeal itself. Only if the appeal was not entertained by the appellate authority on the ground that it was after the limitation period, then, the issue would have been arisen for consideration of this Court. Such a scenario never arose and the writ petitions were filed on the basis of mere apprehension. Notwithstanding the issue ....
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....ting Officer, writ petitioners and the beneficial owner. It is further submitted that the said orders which were sent through Post to the respondents / writ petitioners, were returned with the remark 'unserved', as the addresses of the 69 subsidiary companies, who are the benamidars, are one and the same. Thereafter, the first appellant sent those orders to the office of the second appellant and directed them to serve the same on the respondents. Accordingly, the second appellant called the respondents on various times over phone and the respondents' authorised officers, after much persuasion, finally came and collected the orders in person and thus, the orders were served on the respondents on 29.10.2019. 15. It is evident from the order sheets register and file movement register maintained in the office of the authority that the adjudication orders were passed on 26/27/28.08.2019 by the first appellant under section 26(3) of the Act. Since the documents of the public authorities are legally valid and are trustworthy, the genuineness of the same cannot be doubted, in the absence of any conclusive proof to that effect. Therefore, the records produced by the appellants in the form ....
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....meline as prescribed under the Act. As such, the delay in the communication of the order copies to the respondents, which is essentially a delay of about two weeks from the date of passing of the orders on 26/27/28.08.2019 to the dates on which the Registry had booked the order copies for despatch on 12.09.2019 and 13.09.2019, can at best be deemed to be a procedural delay. In this connection, this Court would apply the doctrine of 'substantial compliance' to the facts and circumstances of the case. In the decision of the Hon'ble Supreme Court in Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal and others [(2011) 1 SCC 236], it was held as follows: "Doctrine of substantial compliance and "intended use" 32. The doctrine of substantial compliance is a judicial invention, equitable in nature, designed to avoid hardship in cases where a party does all that can reasonably be expected of it, but failed or faulted on some minor or in consequent aspects which cannot be described as the "essence" or the "substance" of the requirements. Like the concept of "reasonableness", the acceptance or otherwise of a plea of substantial compliance depends upon the facts and ci....
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....pliance with those factors which are considered as essential." 19. That apart, it could be seen from the order impugned herein that the fact that the appeal time of 45 days as mentioned under section 46 of the Act, has to be from the date of orders, whereas the orders were actually communicated/received by the respondents only on 29.10.2019, seems to have weighed in the mind of the Learned Judge to observe that "this fact will also have a bearing on the order being passed within the period of limitation as stated in section 26(7)". For a moment, a scenario may be visualized, where an order which is well within the period of limitation, is passed within 10 months of reference, but same is communicated/received by the party concerned after 45 days from the date of passing of the order, albeit within the period of the said one year statutory limit as imposed by the provisions of the Act. In such an event, in order to give effect and meaning to the provision, it would only have to be interpreted that the appeal period would start running only from 'the date of receipt of the order' and not from 'the date of the order'. Except the same, any other interpretation would result in incongru....
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....t to be acquired it is clear that the said decision ultimately affects the rights of the owner of the property and in that sense, like all decisions which affect persons, it is essentially fair and just that the said decision should be communicated to the said party. The knowledge of the party affected by such a decision, either actual or constructive, is an essential element which must be satisfied before the decision can be brought into force. Thus considered the making of the award cannot consist merely in the physical act of writing the award or signing it or even filing it in the office of the Collector; it must involve the communication of the said award to the party concerned either actually or constructively. If the award is pronounced in the presence of the party whose rights are affected by it can be said to be made when pronounced. If the date for the pronouncement of the award is communicated to the party and it is accordingly pronounced on the date previously announced the award is said to be communicated to the said party even if the said party is not actually present on the date of its pronouncement. Similarly if without notice of the date of its pronouncement, an aw....
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.... the respondent had no means to know about the order of the Taxation Officer rejecting his prayer until and unless he received his letter on October 29, 1964. Within the meaning of Section 15 of the U.P. Motor Vehicle Taxation Act that was the date of the order which gave the starting point for preferring an appeal within 30 days of that date." (emphasis supplied) 22. In Muthiah Chettiar v. I.T. Commissioner, Madras [AIR 1951 Mad 2004], a two-Judge Bench of Madras High Court considered the question whether the limitation of one year prescribed for filing revision under Section 33A(2) of the Income Tax Act, 1922 is to be computed from the date when the order was signed by the Income-tax Commissioner or the date on which the petitioner had an opportunity of coming to know of the order. It was argued on behalf of the department that other provisions of the Act have been amended to provide for appeal within specified time to be counted from the date of the receipt of the order sought to be appealed against, but no such amendment was made in Section 33A and therefore, the period of limitation will start from the date of order. While rejecting the argument, Rajamannar, C.J., referred ....
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.... of appeal to any person aggrieved by, among other orders, (1) an order passed by the Collector (Appeals) under Section 35A and (2) a decision or order passed by the Collector of Central Excise as an adjudicating authority. Such an appeal will have to be filed "within three months from the date on which the order sought to be appealed against is communicated to the Collector of Central Excise or as the case may be the other party preferring the appeal". The Appellate Tribunal also is required to send a copy of the order passed in the appeal to the Collector of Central Excise and the other party to the appeal.... 8. At this stage itself we may state that Sub-section (4) of the Act provides that the adjudicating authority shall file the application before the Tribunal in pursuance of the order made under Sub-section (1) or Sub-section (2) "within a period of three months from the date of communication of the order under Sub-section (1) or Sub-section (2) to the adjudicating authority". 9. The words "from the date of decision or order" used with reference to the limitation for filing an appeal or revision under certain statutory provisions had come up for consideration in a number....
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....d by any authority subordinate to him and pass such order thereon as he thinks fit. The proviso, however, stated that the Commissioner shall not revise any order under that Sub-section "if the order (sought to be revised) has been made more than one year previously". Construing this provision the High Court in Muthia Chettiar case held that the power to call for the records and pass the order will cease with the lapse of one year from the date of the order by the subordinate authority and the ratio of date of the knowledge of the order applicable to an aggrieved party is not applicable for the purpose of exercising suo moto power. Similarly in another decision reported in Viswanathan Chettiar v. CIT construing the time-limit for completion of an assessment under Section 34(2) of the Income Tax Act, 1922, which provided that it shall be made "within four years from the end of the year in which the income, profit and gains were first assessable," it was held that the time-limit of four years for exercise of the power should be calculated with reference to the date on which the assessment or reassessment was made and not the date on which such assessment or reassessment order made und....
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....But if it is a limitation for a competent authority to make an order the date of exercise of that power and in the case of exercise of suo moto power over the subordinate authorities' orders, the date on which such power was exercised by making an order are the relevant dates for determining the limitation. The ratio of this distinction may also be founded on the principle that the government is bound by the proceedings of its officers but persons affected are not concluded by the decision." (emphasis supplied) 24.In Commissioner of Income Tax, Madurai and Others v. Saravana Spinning Mills (p) Ltd. [(2007) 7 SCC 298] it was held by the Hon'ble Supreme Court as under: "27.An order passed by a competent authority dismissing a government servant from services requires communication thereof as has been held in State of Punjab vs. Amar Singh Harika but an order placing a government servant on suspension does not require communication of that order. What is, therefore, necessary to be borne in mind is the knowledge leading to the making of the order. An order ordinarily would be presumed to have been made when it is signed. Once it is signed and an entry in that regard is ma....
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....iod of time requisite for obtaining the order to be appealed against, is excluded. 27. All the above-mentioned judgments are in the context of the period of limitation for filing an appeal and every judgment is an authority only in respect of the context, in which, it was made and in respect of the merits of each case. The principle that an order takes effect only on the date of communication of the order and not immediately on passing of the order, if there is any time lag between the date of passing of the order and the date of actual communication of the order, by itself cannot be understood to have a bearing on the very validity of the orders passed by the Adjudicating Authority under section 26 (3), on the premise that the orders have been passed on 26/27/28.08.2019 within the period as mentioned under sub section 7 of section 26, which was duly recorded in the Register maintained by the authority as 'order is passed accordingly'. Therefore, the delay occurred for preparation of certified copies of the order, after getting notarisation from the Administrative Officer-cum-Registrar, on 04.09.2019 and 11.09.2019 and the same were booked for despatch on 12.09.2019 and 13....
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....made ready and notarized on 04.09.2019 and 11.09.2019 and booked for dispatch on 12.09.2019 and 13.09.2019, cannot be said to be either prolonged or unexplained delay, as held by the Learned Judge. 30. In the decisions relied upon, particularly, in Malayil Hills v. State of Kerala rendered in TRC Nos. 15 and 16 of 1981 dated 07.06.1982, the facts were quite different and the considerable delay of about six months in dispatching the orders was the context, in which, the Bench held that such an unusual delay means that the order will deemed to have been passed only when it has been effectively communicated to the party concerned. However, as already elaborated earlier, in the present case, the proximity of the dates from the date of passing of the orders till their dispatch, especially when the same were in a batch of 69 cases, cannot be said to be an undue delay or that cannot muster the test of legality. Moreover, the intent of the Act and the objects show that it is a penal statute, where the offender cannot be given the opportunity to take unfair advantage of technicalities, when there has been more than substantial compliance of the provisions of the Act. Otherwise, the the pur....