MM TAX CLUB

The Calcutta High Court recently imposed ₹20,000 as personal costs on an income tax Assessing Officer (AO), Bitan Roy, after the Court found that he had issued an assessment notice to a company that no longer existed after its amalgamation with another entity in 2019. [Orbit Projects Private Limited Vs Income Tax Officer, Ward 5(1), Kolkata & Ors.]

Justice Md. Nizamuddin also found that this was not the first time that AO Roy had issued such a notice to the same non-existing entity.

Rather, it was noted that earlier, in March 2022, the High Court had quashed another notice under Section 148 of the Income Tax Act, 1961 which was issued by the same officer to the same non-existing entity.

The AO’s repeated lapse was not taken well by the Court.

“…. in spite of quashing of such notice by this court on earlier occasion, again the assessing officer has issued the impugned notice dated 27th May, 2022 against the very same non-existing entity. Such conduct reflect, total non-application of mind by the Assessing Officer, namely Bitan Roy, Ward No.V(1), Kolkata, and rather it is contumacious also and in total disregard and defiance of earlier of the order of this court,” the Court said in its March 2 order.

This led Justice Nizamuddin to quash the challenged notice and impose personal costs of ₹20,000 on Roy, which was ordered to be recovered from his salary and paid to the petitioner-company.

This was not the first time that AO Roy found himself at the receiving end of the Court’s ire.

Last month, Justice Nizamuddin imposed costs of ₹10,000 on the same officer for a Section 148 notice issued to another assessee, Silvertoss Vanijya Private Limited.

The Silvertoss case concerned an assessment notice issued to the company by the AO, despite the High Court having quashed similar assessment proceedings in November 2021.

Justice Nizamuddin had criticised the AO for his non-application of mind in the November 2021 order as well.

In the February 8, 2023 order passed subsequently, the judge went on to observe,

“Conduct of the officer as appears that he is not mentally in a position to discharge his duty and that the reason best known to him as appears from his conduct that he is harassing the petitioner by inviting for this unnecessary litigation and cost of which is to be incurred by the petitioner and by the Government also from public exchequer for defending such type of cases.”

This aspect was also factored in by the judge in his March 2 order.

The Court has now also directed that the matter be communicated to the higher authorities for necessary steps.

“Let a copy this order be communicated to the Principal Chief CIT, West Bengal and Sikkim, by the office of the Ministry of Law and Justice, who will take note of this order about the affairs going on in his department and take necessary steps", the latest order stated.

Advocates Avra Mazumder, Ramesh Patodia, Megha Agarwal, and Samrat Das appeared for the petitioner-company. Advocate Smita Das De appeared for the respondents.

The Governor, Reserve Bank of India (RBI) today launched the Mission ‘Har Payment Digital’ on the occasion of the Digital Payments Awareness Week (DPAW) 2023. This is part of RBI’s endeavour to make every person in India a user of digital payments. DPAW 2023 will be observed from March 6 to 12, 2023. The campaign theme is “Digital Payment Apnao, Auron ko bhi Sikhao” (Adopt digital payments and Also teach others).

Digital payments offer benefits of speed, convenience, safety and security. The existing infrastructure has made digital payments available and accessible, but it is necessary to create more awareness which can increase acceptance and enhance adoption. While launching the mission “Har Payment Digital”, the Governor appealed to all the stakeholders – banks, non-banks, payment system operators, digital payment users, etc. – to adopt digital payments and teach others about the merits of using digital payments. This would encourage every person to become a digital payment user.

During the DPAW 2023, Regional Offices of the RBI will be conducting awareness and outreach programmes which will also form part of ‘Jan Bhagidari’ events under the Indian G20 presidency. Similar initiatives will be undertaken by the bank and non-bank payment system operators.

The Reserve Bank will also initiate a ‘75 Digital Villages’ programme in observance of 75 years of Independence. Under this programme, Payment System Operators (PSOs) will adopt 75 villages across the country and convert them into digital payment enabled villages.

CBI ARRESTS AN ABSCONDING ACCUSED ON ARRIVAL IN NEW DELHI AFTER DEPORTATION FROM FIJI IN A CASE RELATED TO MULTI-THOUSAND CRORE FINANCIAL SCAM

The Central Bureau of Investigation has arrested an absconding accused on his arrival in New Delhi in a case related to multi-thousand crore Chit Fund Scam. The accused was brought back to India upon being deported from Fiji. The said accused was absconding in this case since its inception. The Trial Court had issued an open dated Non-Bailable Warrant of Arrest against him, and a Red Notice was also got published through INTERPOL. This arrest is the result of initiatives taken by CBI during ‘Operation Trishul” last year, when request for issuance of Interpol Red Notice against him was sent. A request for his deportation was pursued through NCB, Suva (Fiji). A CBI team brought him back to India upon being deported from Fiji.

The said accused, then Director & shareholder of a private company, was alleged to be actively associated with the affairs of the said Company and was also present in the Board Meetings where all the important decisions were taken. It was further alleged that he conspired with other Directors of the said private company to operate the collective investment scheme illegally without any statutory approval.

The arrested accused is being produced today before the Designated Court at Rouse Avenue District Courts, New Delhi.

CBI had registered the case on 19.02.2014 against then Chairman/CMD & Promoter Director of a private company and others including the said private company, other private company & then Directors of these private companies after conversion of a Preliminary Enquiry registered earlier on the directions of the Hon’ble Supreme Court of India to enquire into the said allegations. The enquiry revealed prima-facie evidence of said private company having raised investments of several thousand of crores by issuing bogus land allotment letters to induce the investors. It was revealed that when the said company, on being directed by the Hon’ble High Court of Punjab & Haryana to wind up the scheme and to refund the investors, a similar fraudulent scheme was operated under the name of other/second private company. Funds collected from new investors of this second company were used to repay the earlier investors of first private company to stave off criminal prosecution. Funds have been raised by the two companies through a vast network of lakhs of commission agents spread all over the country who were being paid hefty commissions for luring the investors. It was further alleged that the accused i.e. Promoter / Directors of said private companies & others illegally collected huge funds amounting to thousands of crore from 5.5 crore Investors(approx) across the country under the garb of sale & purchase of agricultural land and promise of high returns. These schemes were running illegally and both the companies were allegedly engaged in fraudulent activities including forgery in their day-to-day operations.

A series of searches were conducted by CBI during February, 2014 at the office premises & residences of Directors and other suspected places in Delhi, Jaipur(Rajasthan), Chandigarh, Punjab & Haryana, which led to recovery of huge records & data relating to deposits from public and their mis-utilisation & diversion of funds, besides other incriminating documents. Investigation also revealed that the accused fraudulently diverted the alleged funds collected under the aegis of Jaipur based private company for purported investment in Australian companies. It was also alleged that 132.99 mn AUD(approx) found to have been diverted to Australian Companies.

During investigation, CBI had earlier arrested four accused including then CMD & Promoter Director of Chandigarh based private company; then MD & Promoter Director of Jaipur based private company and two then Directors of said Jaipur based Company on 08.01.2016. It was then found during investigation that none of the land allegedly had marking of plots and none of the land was found in the name of said companies at Delhi, NCR, Madhya Pradesh, Rajasthan, Andhra Pradesh, even though the same was shown allotted by them to its investors. The investors had not allegedly received any plot / land allotment letter from the company and almost all the investors to whom the company had allotted the land were unpaid. Most of the land was either non-existent or Govt. land or not sold by the owner. It was also alleged that there were more than 23 lakh enrolled commission agents and out of them, more than 1700 were top level field associates and several of these top level commission agents used to get monthly commission in lakhs of rupees. A chargesheet was filed against the accused including private companies on 07.04.2016.

To investigate the role of other accused / suspects in this multi thousand crore financial scam, which had adversely affected the interests of millions of investors, further investigation of the case was continued.

  During further investigation, 11 accused (all private persons) from Delhi, Chandigarh, Kolkata, Bhubaneshwar etc. were arrested on 22.12.2021.

A Supplementary Chargesheet against 27 accused including 03 private companies was filed on 31.12.2021 before the Court of Special Judge, CBI Cases, Rouse Avenue District Court Complex, New Delhi. Of those named in Supplementary Chargesheet include 11 accused (all private persons) arrested by CBI. It was alleged that the accused were the co-conspirators in this scam, who aided the prime accused and others in illegally operating investment schemes for earning quick & easy money, inducing investors to invest their funds in such investment schemes which offered lucrative returns to the investors and thereafter in diversion of such funds through dubious means with the motive of misappropriation.