Bombay High Court (Maharashtra And Goa) Weekly Roundup: February 28 To March 6, 2022

Shashikala Surendra Ambade & Ors. Versus The State of Maharashtra & Ors

Dr Anand Teltumbde vs National Investigation Agency

Pavan Morarka Versus The Assistant Commissioner of Income Tax – 2(3), Mumbai

Yohan Tengra vs State of Maharashtra

Larsen & Toubro Limited Versus Girish Dave, Director of Income-tax (International Taxation)

HDFC Bank Ltd. Versus Assistant Commissioner of Income-tax-2(3)

Tata Capital Financial Services Limited Versus Assistant Commissioner of Income Tax Circle 1(3)(1) and Ors.

Jawahar Hiralal Mehta v. The State of Maharashtra

Shalaka Infra-Tech India Pvt. Ltd. & Anr. Versus The Union of India & Ors

Rashtriya Shikshan Sangh and others vs State of Maharashtra

Pr. Commissioner of Income Tax Versus Indofil Industries Limited

Vivek Mehta & Anr. v/s. KaRRs Designs & Developments & Ors.

Ravindra Hemraj Dhangekar V/S Ganesh Madhukar Bidkar & Ors.

ROUND UP

1. Bombay High Court Pulls Up District Officials For Destroying Farmers' Crops For Mahashivratri Celebrations

Case Title: Shashikala Surendra Ambade & Ors. Versus The State of Maharashtra & Ors.

Citation: 2022 LiveLaw (Bom) 56

The Bombay High Court, restrained local State and Civic body officials in Kolhapur district from using any part of the field of a farmer for the festival of Mahashivratri on which the farmer had grown soyabean crop.

The authorities submitted that an entry in the petitioner's land records (7/12 extract) endorsed that during the Mahashivratri festival, the authorities would take possession of the petitioners' land for a period of 15 days for the festivities.

"We do not understand under which provision of law, such an endorsement is made/allowed and how the plot of the petitioners can be taken away for a period of 15 days especially when the petitioners are growing soyabean crop on the said field. Even if this practice has been adopted in the past, the same cannot be relied upon as a precedent and the Court is required to stop such practice once it is opposed by the petitioners," the court order noted.

2. Bhima Koregaon: Bombay High Court Allows Anand Teltumbde To Visit Nonagenarian Mother For 2 Days Following Brother's Death In An Encounter, Directed to Spend Night in Custody

Case Title: Dr Anand Teltumbde vs National Investigation Agency

Citation: 2022 LiveLaw (Bom) 57

Three months after his brother's demise in an encounter, the Bombay High Court permitted Dalit scholar Anand Teltumbde to meet his nonagenarian mother in Chandrapur on March 8 and 9, 2022 under escort protection.

The court partly allowed the application and directed Teltumbde to be taken to Chandrapur by police escorts by the afternoon of March 8, 2022. However, he has not been permitted to spend the night at home and will be taken in custody in the closest prison.

3. Reopening Of Income Tax Assessment Can't Be Allowed On Grounds Of Future Contingencies: Bombay High Court

Case Title: Pavan Morarka Versus The Assistant Commissioner of Income Tax – 2(3), Mumbai

Citation: 2022 LiveLaw (Bom) 58

The Bombay High Court held that the reopening of Income Tax Assessment cannot be allowed on grounds of future contingencies.

The division bench noted that the entire exercise of reassessment is only contingent on a future event and a consequence that may endure upon the decision of the Tribunal, that again if the Tribunal were to hold against the Revenue. A reopening of an assessment under Section 148 cannot be justified on such a basis. There has to be a reason to believe that income has escaped assessment.

4. Despite High Court Nudge, Maharashtra Govt Refuses To Withdraw Restrictions On Unvaccinated Using Local Trains

Case Title:Yohan Tengra vs State of Maharashtra

Citation: 2022 LiveLaw (Bom) 59

The Bombay High Court disposed of two PILs after the Maharashtra government said that it won't withdraw restrictions imposed on individuals on the basis of their vaccination status from boarding local trains, visiting malls or places of employment.

"In our order dated February 22, we have observed that the state, in previously issuing orders restricting travel by public transport, had imposed restrictions in a manner which had no sanction of... Having regard to gross violations in imposing restrictions since August 10, 2021, it would have been better for us to strike down the further orders passed by the state government…However, we had reposed hope and trust that SEC would take a decision which is reasonable and not in derogation of fundamental rights of citizens protected by article 19 (1) (d). We are mistaken."

5. Payments Towards Charter Hire Of Tugs, Barges Made To Non-Resident Assessee Assessable U/S 44BB: Bombay High Court

Case Title: Larsen & Toubro Limited Versus Girish Dave, Director of Income-tax (International Taxation)

Citation: 2022 LiveLaw (Bom) 60

The Bombay High Court held that the payments made towards charter hire of tugs and barges made to non-resident assessee in execution of contract with Oil and Natural Gas Corporation Ltd (ONGC) are assessable under Section 44BB of Income Tax Act and are entitled to special dispensation.

The bench said that the payments made by the ONGC and received by the non-resident assessees or foreign companies under the contracts were more properly assessable under the provisions of Section 44BB and not under Section 44D of the Act.

6. Relief To HDFC Bank: Bombay High Court Quashes Reassessment Notice As Jurisdictional Condition Not Satisfied

Case Title: HDFC Bank Ltd. Versus Assistant Commissioner of Income-tax-2(3)

Citation: 2022 LiveLaw (Bom) 61

In a major relief to the HDFC Bank, the Bombay High Court quashed the reassessment notice as the jurisdictional condition for invoking the power under section 147 of the Income Tax Act was not satisfied.

The division bench observed that once, it is held that the jurisdictional condition for invoking the power under section 147 is not satisfied for a particular assessment year, the notice for reopening cannot be sustained. Then, it does not matter that the assessee did not assailed the notice for reopening in respect of preceding or succeeding years.

7. 'Reasons To Believe' Ought To Spell Out All Reasons, Grounds For Reopening Income Tax Assessment: Bombay High Court Comes Down Heavily On Income Tax Dept

Case Title: Tata Capital Financial Services Limited Versus Assistant Commissioner of Income Tax Circle 1(3)(1) and Ors.

Citation: 2022 LiveLaw (Bom) 62

The Bombay High Court has come down heavily on the Income Tax Department for not being transparent with tax payers in sharing the requested information basis of reopening action.

The division bench relied on the judgement of the Delhi High Court in case of Sabh Infrastructure Ltd. vs. Assistant Commission of Income Tax wherein the guidelines has been laid down on reopening cases for assessing officers (AO) for strict compliance.

As per the guidelines, while communicating the reasons for reopening the assessment, the copy of the standard form used by the Assessing Officer for obtaining the approval of the Superior Officer should itself be provided to the assessee. This would contain the comment or endorsement of the Superior Officer with his name, designation and date. In other words, merely stating the reasons in a letter addressed by the Assessing Officer to the assessee is to be avoided.

8. Sections 126 & 127 Of MRTP Act Require Expeditious Acquisition Of Land Reserved, Failing Which Reservation Lapses: Bombay High Court

Case Title: Jawahar Hiralal Mehta v. The State of Maharashtra

Citation: 2022 LiveLaw (Bom) 63

The Bombay High Court held that sections 126 and 127 of the Maharashtra Regional & Town Planning Act, 1966 ( "MRTP Act") require expeditious acquisition of the land reserved. Section 127 gives time to either acquire the land or take steps for acquisition within a period of twenty-four months from the date of service of notice by the land owner for purchase.

A bench noted that if Respondents failed to acquire the land within the stipulated period, then as per the provisions of section 127 (1) of the MRTP Act, the reservation clamped on the said land "automatically lapses".

9. Issue Norms As To How Many Times Summons Can Be Issued During Investigations: Bombay High Court Directs GST Dept

Case Title: Shalaka Infra-Tech India Pvt. Ltd. & Anr. Versus The Union of India & Ors.

Citation: 2022 LiveLaw (Bom) 64

The Bombay High Court directed the Goods and Service Tax (GST) Department to issue norms as to how many times summons can be issued during investigations.

The division bench of Justice S.M.Modak and Justice R.D.Dhanuka ordered the Department/respondents to indicate as to how many time summons were issued by the respondents to the petitioners, for what purpose and the progress of the investigation during this period. Affidavit shall also indicate as to when the investigation would be completed by the respondents against the petitioners.

10. Executive Power Of State Under Article 162 Constitution Not Available When Field Of Law Is Occupied By Legislative Act: Bombay High Court

Case Title: Rashtriya Shikshan Sangh and others vs State of Maharashtra

Citation: 2022 LiveLaw (Bom) 65

The power of the State Government to issue executive directions is confined to filling up the gaps or covering the area which otherwise has not been covered by the existing statutory rules, and such instructions or orders must be subservient to the statutory rules, the Bombay High Court ruled while quashing a decision to shut down three Ashram Shalas.

"The Government cannot supersede statutory rules by administrative instructions. Still, if the rules are silent on any particular point, the Government can fill the gaps by framing Rules and issuing instructions not inconsistent with the already-framed rules."

11. Disallowance Can't Be Made On Failure Of Assessee To Deduct TDS If Employee's Commission Shown As Part Of Salary Income: Bombay High Court

Case Title: Pr. Commissioner of Income Tax Versus Indofil Industries Limited

Citation: 2022 LiveLaw (Bom) 66

The division bench of Justice Amit B.Borkar and Justice K.R.Shriram ruled that section 192 of the said Act, unlike other TDS provisions, requires deduction of tax at source under the head "Salary only at the time of payment and not otherwise".

The issue raised was regarding disallowance under Section 40(a)(ia) of the Income Tax Act. The Assessing Officer had noted that respondent/assessee had made a provision for commission for the Chairman and the Managing Director (CMD) of the Company at the year end but not deducted TDS under Section 194H Income Tax Act. The commission was paid to the CMD in the subsequent year, i.e., during the Assessment Year 2010-2011 after deducting TDS.

12. Courts Need Not Hold Up Arbitration At Pre-Appointment Stage Over Insufficiency Of Stamp Duty: Bombay High Court

Case Title: Vivek Mehta & Anr. v/s. KaRRs Designs & Developments & Ors.

Citation: 2022 LiveLaw (Bom) 67

Bombay High court considered whether the arbitration should be held up at the pre-appointment stage and pre-reference stage or whether party should be left to follow the procedures post reference and be left to agitate their respective challenges.

"The ratio is clear viz. least interference at the pre-appointment stage."

13. Nominated Councillor Cannot Be Appointed As Leader Of The House : Bombay High Court

Case Title: Ravindra Hemraj Dhangekar V/S Ganesh Madhukar Bidkar & Ors.

Citation: 2022 LiveLaw (Bom) 68

A division bench of Justices AA Sayed and SG Dige observed that under section 19-1A of the Maharashtra Municipal Corporation Act, 1949 (MMC Act) only an elected councillor, directly elected at Ward elections, is eligible to be appointed as 'Leader of the House.'

"If the intention of the Legislature was to treat both the categories of Councillors equally and to include even a nominated Councillor to be eligible to be appointed as Leader of the House under section 19-1A, the said section would have simply said 'Councillor' and not 'elected Councillor'."