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The Central Government has notified the following classes of persons who need not file return of income merely because they fall under the following relevant clauses of the provisions of the first proviso to section 139:-
(Vide Notification No. 146/2001 [F.No. 142/42/2001 –TPL], dated 11/6/2001)
Compulsory Filing Returns under 1 by 6 scheme
The Central Board of Direct Taxes has specified the following places as the places of pilgrimage and travel to such places shall not be regarded as travel to any foreign country for the purposes of the said sub-section of section 139 :-
(Vide Notification No. 147/2001 [F.No. 142/42/2001 – TPL], dated 11/6/2001)
Compulsory Filing Returns under 1 by 6 scheme
The Central Board of Direct Taxes has specified that the expression "travel to any foreign country" in the said sub-section to section 139 shall not include travel to the following neighbouring countries, namely :-
| (a) Bangladesh; | (d) Nepal; |
| (b) Bhutan; | (e) Pakistan; |
| (c) Maldives; | (f) Sri Lanka. |
(Vide Notification No. 148/2001 [F.No.142/42/2001 – TPL], dated 11/6/2001)
Permanent Account Number
The Central Government has specified the following dates from which the provisions of the said sub-section shall apply in respect of the following class or classes of persons, namely :-
(Vide Notification No. 150/2001 [F.No.142/39/2001 –TPL], dated 11/6/2001)
Profit on sale of residential house property
The assessee claimed exemption on the grounds that within two years of sale of earlier property he had constructed house property for purpose of his residence. However, the assessee had himself stated that property was not worth occupying and uninhabitable. It was also found that construction was of garage and servant quarters. It was held that in view of accepted statement of assessee that building was not worth occupying and was uninhabitable, denial of exemption to assessee was in order.
[ D.P.Mehta v/s CIT 116 Taxman 611 ( Del ) ]
Registration of Partnership Firm
The assessee-firm, carrying on business of construction of multistoreyed residential buildings, was constituted by partnership deed dated 19/5/1969. The deed dated 19/5/1969 referred to an earlier deed of partnership dated 1/5/1969 under which there were eight partners, viz., seven individuals and one private limited company. Of the seven individuals, six were described as land-owners with a total share of 26 per cent in profits of firm. In deed of partnership dated 19/5/1969, three minors were admitted to benefits of partnership. Both the deeds referred to an agreement dated 27/3/1969 whereunder price of plot on which multi-storeyed buildings were to come up was fixed which as to be paid to six land owners. Agreement was actually between builder promoters on one hand and landowners comprising eight individuals on the other. Out of the landowners group, two individuals did not become partners in firm as they had executed release deeds. The assessing officer refused to grant registration to assessee-firm for reasons, inter alia, that business of construction on plot and sale of apartments was in actuality carried on by company on its own behalf and not on behalf of firm, and that two land owners who figured in agreement dated 27/3/1969 did not become partners. The Tribunal, having regard to various clauses in deed of partnership and manner in which business of assessee-firm was carried on by managing partners had concluded that a genuine firm had come into existence. It was held that the above finding of Tribunal was finding of fact and in arriving at it, the Tribunal had taken into consideration all material factors and principles of law laid down by Supreme Court in case of K.D. Kamath & Co. v. CIT [1971] 82 ITR 680 and, therefore, all essential conditions necessary to form partnership of partners were present in instant case and assessee-firm was entitled to registration under the Act.
[ CIT v/s Riviera Apartments Construction Co – 116 Taxman 622 ( Del ) ]
Purchase of immovable properties by the Central Government
The transferor, a retired Government servant, wanted to settle down in Bangalore where he had entered into agreement to purchase property. He therefore, entered into an agreement to sell his Delhi property which was ordered to be purchased by the Government. However, while considering sale instances / factors as to whether property had sufficient parking space or not and adjustment had been given to parking space and that servant quarters at terrace were authorized or not were not taken into consideration. It was held that since appropriate authority failed to consider above factors and fact that property was being sold under special circumstances, its order to purchase immovable properties was vitiated.
[ Appropriate Authority v/s Ms. Shashi Sehgal 116 Taxman 636 ( SC ) ]
Exemptions to Foreign Technicians
The Applicant was resident of USA and had been on regular employment with SAP, Singapore. She was deputed to SAP India as its President for a period of two years. Her duties as President of SAP India included co-ordinating customization of SAP software to suit customers requirement and training personnel in connection with high-end technology operations of SAP India. She held a masters degree in mechanical engineering and had 25 years of work experience in information technology. It was held that the applicant will qualify as ‘Technician’ in accordance with section 10(5B) and accordingly, taxes paid by employer on behalf of applicant would be exempt from taxation under section 10(5B) for period of forty-eight months commencing from date of arrival in India.
(Ms. Ruth Connolly v/s CIT – 116 Taxman 711 (AAR-New Delhi))
Purchase of immovable property by Central Government
Certain property situated in New Delhi was offered to be sold for Rs.23.50 lakhs. Rejecting the transferor’s plea that he was desperate to sell his property in order to go abroad and settle with his daughter in USA and sale instances considered by the Appropriate authority were incomparable, the Appropriate Authority passed order for purchase of property in question. The order was quashed by the High Court after considering various aspects. It was held that value of property either with reference to apparent consideration or fair market value determined by Appropriate Authority was not of such magnitude as to call for any interference.
(DCIT v/s Express Towers ( P ) Ltd 116 Taxman 638 ( SC ))
Purchase of immovable properties by the Central Government
It was held that where factor that property in question was under litigation initiated by step brother of transferor in which title of transferor had been challenged, was ignored by appropriate authority while passing order under section 269UD, said order was rightly held to be vitiated.
(Appropriate Authority v/s R C Chawla – 116 Taxman 640 ( SC ))
Exemptions to Foreign Technicians
The Applicant was resident of Singapore and was employed with CCIPL as Managing Director. CCIPL was set up to market and distribute products of its US-based holding company in India. As Managing Director, his responsibilities included overseeing day-to-day operations of company, accountability to customers for technical performance of products and financial performance, etc. The Applicant held master’s degree in computer science and had vast experience in field of information technology. He also satisfied residence criteria as per duration of his stay in India. It was held that the applicant will qualify as ‘Technician’ in accordance with section 10(5B) and, accordingly, tax paid by employer on behalf of applicant be exempt from taxation for a period of forty-eight months commencing from date of arrival in India.
(Balu Doraiswamy v/s CIT 116 Taxman 713 ( AAR – New Delhi ))
Double Taxation Relief - Agreement with Mauritius
The applicant was a collective investment vehicle like a mutual fund. It had set up its business in Mauritius. It had made investments in three Indian companies and, hence, would have had income in the form of dividends, interest and capital gains from its investments. The Custodian was entitled to conduct all activities pertaining to transactions relating to settlement and delivery of securities within the premises of the Custodian. The Custodian would open and maintain account with Bank of India for that purpose. It was held that the applicant was entitled to be treated as resident of Mauritius as defined in agreement for avoidance of double taxation between India and Mauritius and, hence, was entitled to benefits of the said treaty. It was further held that applicant-company being resident of Mauritius would be liable to pay tax on income which is derived in India. It was also held that since purchase of shares of companies in India is part of the company’s business operations, gain from sale of such shares was business profit. It was held that, in absence of the applicant-company having a place of management or branch or office or a factory or a workshop in India, it can not be treated as having a ‘permanent establishment’ in India. It was held that profits, if and when made by company, will have to be taxed as business profits in Mauritius and not in India in view of article 7 of the treaty between India and Mauritius. It was held that the applicant would have to file return of income-tax in India even if it was entitled to exemptions and deductions under it and also benefit of treaty between India and Mauritius.
(XYZ / ABC Equity Fund v/s CIT 116 Taxman 719 ( AAR – New Delhi ))
Willful attempt to evade tax, etc
The Respondents applied for stay of criminal proceedings in cases filed for offences punishable under the Income Tax Act on ground that appeals against assessments were pending before appellate authorities and Tribunal. The Magistrate allowed work of recording evidence to proceeding, but stayed passing of order about framing of charges, discharge or acquittal of accused during pendency of appeals before Income Tax authorities. The High Court passed interim order staying proceedings in criminal cases. It was held that since ultimate result of proceedings before appellate authorities would have a definite bearing on cases alleged against respondents, High Court was justified in passing interim order and its order called for no interference.
(CIT v/s Bhupen Champak Lal Dalal 116 taxman 746 ( SC ))
Salary - Perquisites
The assessee, a technician in an Italian company, worked in an Indian company, which deducted tax at source on all payments made by it to the Italian company. The Assessing Officer construed remittances as indicating payment of tax-free salary to assessee and on that basis grossed up salary and demanded tax. The assessee was not an employee of the Indian company and was not paid any salary by the Indian company. As per agreement, the Indian company paid specified amounts to the Italian company which paid salary to assessee in Italy. It was held that therefore, view taken by Assessing Officer was perverse and Tribunal was right in law in holding that there could be no grossing up of income on tax basis. It was further held that the ITO erred in law in treating tax paid by company as perquisites taxable in hands of the assessee.
(CIT v/s Marco Brandolin – 116 Taxman 768 ( Mad ))
Return of losses
The Assessing Officer refused to allow carry-forward loss claimed by the assessee-company on the ground that no business activity was carried on by it during assessment year in question and that return had been filed in response to notice under section 148. It was held that applying ratio of Supreme Court’s judgement in CIT v. Kulu Valley Transport Co. (P.) Ltd. [1970] 77 ITR 518, return filed under section 139(4) has to be treated as return within time contemplated under section 139(1) with all its consequences and since return in instant case was filed before expiry of time provided under section 139(4), not withstanding issue of notice under section 148, the assessee was entitled to benefit of determination of loss and carry forward to subsequent assessment year. It was further held that provision of section also contemplates determination of loss in pursuance of return filed under section 139 and not necessarily under sub-section (1) or (2) of Section 139 and, therefore, it can safely be said that return contemplated under section 80 includes return filed under sub-section (4). It was further held that therefore, the Tribunal was justified in allowing carry-forward and set-off of loss to the assessee even though return was filed in response to notice issued under section 148.
(CIT v/s B.V.R. Glucose Products Ltd – 116 Taxman 786 (AP))
Penalty for concealment of income
The High Court held that difference between income assessed and income returned being more than 20 per cent, explanation to section 271 (1) (c) became applicable and assessee having failed to discharge onus being cast on assessee by virtue of said Explanation, the Assessing Officer was justified in imposing penalty. It was held that judgement of the High Court did not call for any intereference.
(CIT v/s B.A. Balasubramaniam & Bros. Co. – 116 Taxman 842 (SC))
Deductions u/s 80 I
It was held that question as to whether Tribunal was justified in law in upholding order of Commissioner (Appeals) in directing Assessing Officer to include interest income in gross total income while computing deduction under section 80-I, was a question of law.
(CIT v/s Abhijit Iron Processors ( P ) Ltd 116 Taxman 843 (SC))
Carry-forward and set-off of losses
The High Court upheld the Tribunal’s decision that section 79 would not apply to unabsorbed depreciation and development rebate. It was held that one of the conditions for applicability of section 79 is that there should be change in shareholding of company. It was also held that since revenue had not been able to show a finding recorded by any authority regarding change of shareholding of company, revenue’s appeal was liable to be dismissed.
(CIT v/s Concord Industries Ltd – 116 taxman 845 (SC))
AssessmentHeld deduction claimed under sections 80HHE and 80GG can be disallowed as a prima facie adjustment in case of non-submission of audit report along with return. However, if report is furnished subsequently, rectification should be carried out to the extent permitted by Board in Circular No.669, dated 25-10-1993
[ ITO v. Smt. Mandira P. Vakharia (Kar.) 117 Taxman 236 Kar. ]
Assessing Officer, while processing return under section 143(1)(a), treated certain income returned under head ‘Long term capital gains’ as income from ‘adventure in the nature of trade’ – Held above action of Assessing Officer was not a prima facie adjustment permissible under section 143(1)(a) – [ Amir Uddin v. ITO (MP) 117 Taxman 71 MP. ]Block Assessment
After search and seizure of materials and documents and special audit under section 142(2A), Assessing Officer made certain additions as undisclosed income – Tribunal held that undisclosed income was not on basis of any search material but on basis of change of opinion based on report of special auditors - Held assessment of ‘undisclosed income’ as defined in section 158B(b) is only relatable to material found as a result of search – Held Tribunal was, therefore, justified in its view that section 158BA had no application to facts of case –
[ CIT v. Ravi Kant Jain (Delhi) 117 Taxman 28 Delhi ]
Business Allowance
Deduction of interest payable by assessee to Calcutta Municipal Corporation on outstanding municipal taxes was disallowed by invoking section 43B – Tribunal, however, held that said interest could not be treated as an adjunct or part of municipal taxes and, therefore, section 43B could not be invoked for disallowing outstanding interest –Held interest being compensatory in character and not tax, section 43B was wrongly applied to disallow it
CIT v. Orient Beverages Ltd. (Cal). 117 Taxman 106 Cal.
Business expenditure
Assessee treated expenditure incurred on demolishing existing compound wall and rebuilding same as revenue in nature. Replacement included removal of existing foundation and replacing it with new foundation. This resulted in effacing old asset and bringing into existence a totally new asset which gave enduring benefit. Held expenditure incurred was capital in nature.
[ Senapathy Synams Institutions (P.) Ltd. v. CIT (Kar.) 117 Taxman 216 Kar.]
Business Income
Tribunal held that interest on fixed deposits, temporary loans and arrears of sales deposit were to be considered as business income and were not taxable under head "Other sources’ – Held referable questions of law arose from order of Tribunal
[ CIT v. Haribhai Estate (P) Ltd. (SC) 117 Taxman 10 (SC).]
Capital Gains
Assessee firm was dissolved and all its assets were takenover by one partner at book value – Assessing Officer took market value of assets so transferred for purpose of capital gains tax as per section 45(4) – Held in view of Supreme Court’s decision in A.L.A. Firm v. CIT [1991] 189 ITR 285 / 55 Taxman 497, asset had to be valued upon dissolution of firm at market value and, therefore, income-tax authorities were right in computing market value as determined by District Registrar which was not even disputed and as said fair market value was proper and appropriate – Held assessee – firm’s claim that consideration that was received by assessee – firm should be treated as fair market value was rightly rejected.
[ Rajlaxmi Trading Co. v. CIT (AP) 117 Taxman 50 A.P.]
Commissioner ( Appeals ) - Form of Appeal and Limitation
Assessee filed appeal on 2-4-1976 – Though advance tax had been paid by assessee entire tax due on returned income was paid on 8-3-1977 – AAC heard appeal on several dates, 4-11-1997 being last date by which time assessee had paid entire tax due – AAC finally refused to entertain appeal on ground that tax due had not been paid by 2-4-1976, i.e. date on which appeal was filed – On none of dates on which appeal was heard, deficiency in appeal was pointed out – Held in view of fact that assessee had deposited tax due before issuance of show – cause notice, and in view of proviso to section 249(4) Tribunal was correct in law in holding that after deposit of amount of tax, requirement of section 249(4) should be taken as having been fulfilled and appeal should have been heard on merits.
[ CIT v. Rama Body Builders (Delhi) 117 Taxman 68 Delhi. ]
Legal representative
Refund payable to petitioner following his assessment was adjusted against outstanding dues of his late father by relying on section 159(4) – Held department can only recover outstanding dues of late father out of assets belonging to late father which by virtue of law of inheritance or by testamentary succession have gone in hands of son and it is obligatory upon department to first prove that what is being paid to son is infact dues of his late father. Held since what was being claimed by petitioner was his own money out of his individual assessment case and had no connection with assets of his father, adjustment of refund payable to petitioner against outstanding dues of his father was unjustified.
[ Hasmukh Lal v. ITO (MP) 117 Taxman 231 M.P. ]
Penalty
Held Complaint under section 276 DD, instituted before trial court on 6-4-1989 against respondent for accepting cash deposits in contravention of provision of section 269SS was dismissed by Tribunal as well as Additional Sessions Judge in revision proceedings in view of omission of section 276 DD with effect from 1-4-1989. Held there was no ground for interference with order of dismissal of complaint.
[ ITO v. Jindal Enterprises (Punj. & Har.) 117 Taxman 156 Punj. & Har. ]
Plant
Held in view of Supreme Court’s decision in Scientific Engg (P) Ltd. v. CIT [1986] 157 ITR 86 / [1985] 23 Taxman 66, assessee was entitled to depreciation on project report
[ CIT v. Harsha Tractor Ltd. (Delhi) 117 Taxman 201 Delhi.]
The Department of Company Affairs has clarified that Special Directors appointed under section 16(4) of Sick Industrial Companies ( Special Provisions ) Act, 1985 shall not be liable to be disqualified for appointment as directors by virtue of section 274(1) (g) of the Companies Act, 1956.
(Vide General Circular No. 11/2001, Dated 25/5/2001, issued by the Department of Company Affairs)
SUPREME
COURT OF INDIA
G.B. PATTANAIK AND R.P. SETHI, JJ.
CRIMINAL APPEAL NO. 235 OF 1998
Penalty for wrongful withholding of property
The High Court quashed criminal proceedings instituted by the appellant-company against the accused-respondent under section 630 of the Companies Act for continuing to utilize property given to him as a director of company after he ceased to be director since 1991 on basis of observation made by the Civil Court in a suit for injunction filed by appellant to the effect that property in question had not been delivered to accused as director of company. It was held that pendency of civil proceedings before any Civil Court would not be a ground for quashing of criminal proceedings to frame charge against accused even though assertions in complaint petition together with material produced by complainant constituted an offence. It was further held that the High Court exceeded its jurisdiction u/s 482 of the Code of Criminal procedure, 1973 in quashing the impugned criminal proceedings since the High Court was possibly not entitled to look to several documents purported to have been filed by accused in civil proceedings and rely on some orders / observations made thereunder. (Maratt Rubber Ltd v/s J. K. Maratukalam – 32 SCL 171 (SC)
Securities and Exchange Board of India
Minimum 25 % to be offered to public in case of IPOThe Central Government has amended the Securities Contracts (Regulation) Rules, 1957 vide the Securities Contracts (Regulation) Amendment Rules, 2001 which have come into force on the date of their publication in the Official Gazette. In the Securities Contracts (Regulation) Rules, 1957, in rule 19, sub-rule (2), for the clause (b), the following shall be substituted, namely :-
"(b) At least 10% of each class or kind of securities issued by a company was offered to the public for subscription through advertisement in newspapers for a period not less than two days and that applications received in pursuance of such offer were allotted subject to the following conditions :
- minimum 20 lakh securities (excluding reservations, firm allotment and promoters contribution) was offered to the public;
- the size of the offer to the public i.e., the offer price multiplied by the number of securities offered to the public was minimum Rs.100 crores; and
- the issue was made only through book building method with allocation of 60% of the issue size to the qualified institutional buyers as specified by the Securities and Exchange Board of India :
Provided that if a company does not fulfill the conditions, it shall offer at least 25% of each class or kind of securities to the public for subscription through advertisement in newspapers for a period not less than two days and that applications received in pursuance of such offer were allotted :
Provided further that a recognized stock exchange may relax any of the conditions with the previous approval of the Securities and Exchange Board of India, in respect of a Government Company within the meaning of section 617 of the Companies Act, 1956 (1 of 1956) and subject to such instructions as that Board may issue in this behalf from time to time.
Explanation : For the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed have been or are agreed to be taken up by the Central Government, a State Government, development or investment agency of a State Government, a State Government, development or investment agency of a State Government, Industrial Development Bank of India, Industrial Finance Corporation of India, Industrial Credit and Investment Corporation of India Limited, Life Insurance Corporation of India, General Insurance Corporation of India and its subsidiaries, namely, the National Insurance Company Limited, the New India Assurance Company Limited, the Oriental Fire and General Insurance Company Limited and the United Fire and General Insurance Company Limited or Unit Trust of India, the total subscription to the securities, whether by one or more of such bodies, shall not form part of the ten per cent or twenty per cent of the securities, as the case may be, to be offered to the public."
(Vide
Notification No. GSR 415 (E), dated 7-6-2001,
issued by the Department of Economic Affairs)
Intermediaries not to render any investment advice about any security
The intermediaries registered with SEBI often give investment advice to the public in the publicly accessible media. The intermediary sometimes may have an interest in the securities in respect of which the advice is given and therefore a possible conflict of interest may arise. Therefore, in exercise of its powers under section 30 of the Securities and Exchange Board of India Act, 1992, the Board has notified the SEBI (Investment Advice by Intermediaries) (Amendment) Regulations, 2001 on 29/5/2001. With effect from 29/5/2001, the intermediaries regulated by SEBI or any of its employees shall not render any investment advice about any security in the publicly accessible media unless a disclosure of his / employees’ or his dependent family members’ interest in the said security has been made while rendering such advice. Further, the intermediaries shall appoint a Compliance Officer responsible for monitoring the compliance by the intermediary of the Act, rules, regulations, notifications, guidelines etc. The intermediary / Compliance Officer contravening the provisions of the regulations shall be liable for action under the concerned regulations and the SEBI Act.
(Vide
Press Release [Ref. No. Pr 92/2001], dated 7/6/2001,
issued by the Legal Department, SEBI)
Mutual Funds to disclose large unit holdings in the Scheme which are over 25% of NAV & Payment of commission / brokerage to associate entities
SEBI has directed mutual funds to disclose large unit-holdings in the scheme which are over 25% of the NAV. The information on the number of such investors and total holdings by them in percentage terms, shall be disclosed in the allotment letters after the initial public offerings and also in the annual and the half-yearly results.
SEBI has clarified that payments of brokerage / commission by mutual funds to their associate entities on subscription of units should not be made and the mutual funds which have made such payments to the associates or to the agents or distributors in the past should reimburse the amounts paid to the respective schemes. The mutual funds shall report its compliance to SEBI within 30 days along with the details of the amount of commission reimbursed to the scheme(s).
(Vide
MFD/CIR No. 3/211/2001, dated 30/4/2001,
issued by the Mutual Funds Department, SEBI)
Issue of public advertisement on cancellation of Sub-broker registration
SEBI has directed that in the event of cancellation of sub-broker registration, the affiliated broker shall ensure that investors / general public are informed about cancellation of registration of his / their sub-brokers and also advise them not to deal with such cancelled sub-brokers. A public advertisement to that effect may be issued in a local newspaper where the sub-broker’s Registered Officer, Head Office / Corporate Office is situated and another in English daily newspaper with wide circulation.
(Vide SMD/DBA II/ CIR – 31/2001, dated 31/5/2001, issued by the Secondary Market Department, SEBI)
RBI has advised authorised dealers to watch closely realisation of export bills and in cases where bills remain outstanding beyond the due date for payment or 6 months from the date of export, the matter should be promptly taken up with the concerned exporter. If the exporter still fails to arrange repatriation of the export proceeds, within six months or seeks extension beyond six months, the matter should be reported to the Reserve Bank in the prescribed manner.
In terms of the amendments made in the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, vide Notification No. FEMA 36/2001 – RB, dated February 27, 2001, enclosed to A.P. (DIR Series) Circular No. 28, dated March 30, 2001, units in Special Economic Zones (SEZs) have been permitted to realize and repatriate the full export value of goods or software to India within twelve months from the date of export. However, as regards follow up of outstanding export proceeds, authorized dealers should send a statement in Form XOS containing the details of all export bills outstanding beyond six months from the date of shipment irrespective of the location of the exporter / unit. In case of units located in Special Economic Zones (SEZs), authorized dealers should indicate "SEZ" in the remarks column of XOS statement.
(Vide
A.D. (DIR Series) Circular No. 35, dated 11/6/2001,
issued by the Exchange Control Department, RBI)
Acquisition by Central Government of Foreign Exchange
The Appellant, a Malaysian citizen of Indian origin, came to India in September 1981 and continued to stay here since then. His Malaysian passport also expired on 13/5/1984. Since he did not repatriate his funds retained in foreign accounts within the prescribed period, the Adjudicating Officer found him guilty of contravening of provisions of section 14 and imposed penalty of Rs.5 lakhs. It was held that mere duration of a person’s stay in India would not conclusively determine his legal status of being a person resident in India in terms of section 2 (p). It was further held that legal status of a person has to be judicially determined on basis of objective and independent evidence. It was also held that all circumstances indicated that at least from 13/5/1984, the appellant had been staying in India with requisite intention so as to acquire status of a person resident in India in terms of section 2 (p) (iii) (d), and, therefore, at the relevant time he was a person resident in India, and he having continued to hold foreign exchange in foreign banks had violated provisions of section 14. It was also held that in view of Explanation contained in the Central Government’s notification dated 15/6/1977, appellant would have to be treated as a person permanently resident in India as he was admittedly a person of Indian origin even though he might claim to be a foreign citizen. It was held that the appellant could not be believed to be not aware of foreign exchange regulations when he must have been remitting expenses of his children’s education in India and was having an NRE account in India. Accordingly, the imposition of penalty on appellant was justified.
(N.K.R. Arunachalam Chettiar v/s Director of Enforcement – 32 SCL 151 ( FERAB))
The Appellant defaulted in repaying money invested by respondent in its Monthy Investment Scheme. It was held that since appellant had failed to pay amount admittedly deposited with it on maturity of said scheme, there was deficiency of service on part of appellant and respondent was entitled to refund of said amount -
(G.P.
Forests Development (India) Ltd v/s Harinder Singh – 32 SCL 196
(Punjab State Consumer Disputes Redressal Commission))
Deficiency in Service
The Children Gift Growth Fund Scheme started by appellant as per section 21 of Unit Trust of India Act which respondent joined in name of his grand-children, was suspended in terms of clause (33) of said scheme. The contribution sent by respondent was not accepted. It was held that suspension was consistent with the provisions in the said scheme. It was also held that the appellant was not barred by principle of promissory estoppel in taking impugned step of suspension of said scheme. It was also held that insofar as benefit of bonus and dividend would accrue to child in respect of contribution already made and on maturity on attaining age of 21 years and child would be eligible to get amount, along with aforesaid bonus as well as dividend, it had to be held that there was no deficiency of service.
(Unit
Trust of India v/s Joseph Kunju – 32 SCL 199
( Kerala State Consumer Disputes Redressal Commission))
Chartered accountant, was holding certificate of practice and was in full - time salaried employment with certain company. He failed to disclose particulars of said employment in but, imparted training and granted certificate of training to articled clerks in contravention of statutory provision. It was held, that in view of his admission of allegations against him and infraction of law involved, he was guilty of professional misconduct and council’s recommendation for removal of respondents name from Register of Members for six months was justified.
[ Council of Institute of Chartered Accountants of India v. C.M. Mehrotra (Delhi) 117 Taxman 171 Delhi ]
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