Suresh Shadija Director M/S. Akruti Trexim Private Limited v. Union Of India

NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 125 of 2021 1. S. K. Shadija Global Private Limited Through Its Director SureshShadija, Age 55 Years, S/o. Late D.D. Shadija, R/o. 501, Metro Height,Telibandha, Ring Road No. 1, Raipur, Distt. Raipur (Chhattisgarh), Shadija, Age 55 Years, S/o. Late D.D. Shadija, R/o. 501, Metro Height,Telibandha, Ring Road No. 1, Raipur, Distt. Raipur (Chhattisgarh), 2. Suresh Shadija Director M/s. Akruti Trexim Private Limited, 501, MetroHeight, Telibandha, Ring Road No. 1, Raipur, Distt. Raipur(Chhattisgarh)Height, Telibandha, Ring Road No. 1, Raipur, Distt. Raipur(Chhattisgarh) ---- Petitioners Versus 1. Union Of India Through The Secretary, Department Of Income TaxNew Delhi. New Delhi. 2. M/s. Akash Shadija Global Private Limited Through The DirectorPawan Kumar Shadija, Aged 57 Years, S/o. Late D.D. Shadija, R/o.House No. 18, Samta Colony, Raipur, Distt. Raipur (Chhattisgarh)Pawan Kumar Shadija, Aged 57 Years, S/o. Late D.D. Shadija, R/o.House No. 18, Samta Colony, Raipur, Distt. Raipur (Chhattisgarh) 3. Shri Pawan Kumar Shadija S/o. Late D.D. Shadija Aged About 57Years Director Akash Shadija Global Private Limited, R/o. House No.18, Samta Colony, Raipur, Distt. Raipur (Chhattisgarh)Years Director Akash Shadija Global Private Limited, R/o. House No.18, Samta Colony, Raipur, Distt. Raipur (Chhattisgarh) 4. Smt. Sandhya Shadija W/o. Pawan Shadija Aged About 54 YearsDirector Akash Shadija Global Private Limited, R/o. House No. 18,Samta Colony, Raipur, Distt. Raipur (Chhattisgarh)Director Akash Shadija Global Private Limited, R/o. House No. 18,Samta Colony, Raipur, Distt. Raipur (Chhattisgarh) 5. Principal Commissioner Of Income Tax-1 Raipur, Distt. Raipur(Chhattisgarh)(Chhattisgarh) 6. Commissioner Of Income Tax (DR) Income Tax SettlementCommission, Addl. Bench, Kolkata, West Bengal.Commission, Addl. Bench, Kolkata, West Bengal. 7. The Director Of Income Tax (Investigation) Income Tax SettlementCommission, Additional Bench, Kolkata.Commission, Additional Bench, Kolkata. 8. The Addl. Director Of Income Tax (Investigation) Income TaxSettlement Commission, Additional Bench, Kolkata.Settlement Commission, Additional Bench, Kolkata. 9. The Assessing Officer I.T.O.-2 (1), Income Tax Office, Civil Lines,Raipur (Chhattisgarh)Raipur (Chhattisgarh) ---- Respondents For Petitioners:Shri Kishore Bhaduri, learned Senior Advocate appears along with Shri Sudeep Johri, Advocate.For Respondents 2 to 4:Shri Apurv Goyal, AdvocateFor Respondents 5 & 9:Shri Amit Chaudhari, Advocate. 31.01.2022 Hon'ble Shri Justice Sanjay S. Agrawal Order on Board 1.Challenge to this petition is the order dated 02.02.2018 passed by theIncome Tax Settlement Commission (IT & WT), Additional Bench Kolkata inthe settlement application of the Respondents No. 3 & 4 in case No.CHH/Raipur-PCIT-1/2017-18/110/IT/2100-2107. 9. The Assessing Officer I.T.O.-2 (1), Income Tax Office, Civil Lines,Raipur (Chhattisgarh)Raipur (Chhattisgarh) ---- Respondents For Petitioners:Shri Kishore Bhaduri, learned Senior Advocate appears along with Shri Sudeep Johri, Advocate.For Respondents 2 to 4:Shri Apurv Goyal, AdvocateFor Respondents 5 & 9:Shri Amit Chaudhari, Advocate. 31.01.2022 Hon'ble Shri Justice Sanjay S. Agrawal Order on Board 1.Challenge to this petition is the order dated 02.02.2018 passed by theIncome Tax Settlement Commission (IT & WT), Additional Bench Kolkata inthe settlement application of the Respondents No. 3 & 4 in case No.CHH/Raipur-PCIT-1/2017-18/110/IT/2100-2107. 2.Learned counsel appearing for the Petitioners submits that theRespondents No. 3 & 4, who are Directors of Respondent No.2 – M/s. AkashShadija Global Private Limited, have share capital of 5000 shares each intheir names out of 10 lakh shares and rest of it, i.e., 9,90,000 shares havebeen sold to other companies, namely, M/s Credence Project Private Limited,M/s Desire Vincom Private Limited , M/s Gravity Barter Private Limited andM/s Murlidhar Sales Private Limited to the tune of 4,30,000, 2,70,000,1,70,000 and 1,20,000 respectively, from whom, the Petitioners havepurchased the same in the year 2010 and became major share holders.However, in the year 2016, the Respondents No.3 and 4 have raised adispute before the Income Tax Settlement Commission (IT & WT), Kolkata byfiling an application, wherein the Settlement Commission has passed theorder impugned without noticing the Petitioners. Further contention of thePetitioners is that 4,95,000 shares have been sold to M/s. Akruti TreximPrivate Limited, wherein Suresh Shadija and the Respondent No.3 – ShriPawan Kumar Shadija (both real brothers) are the Directors of the saidCompany (M/s. Akruti Trexim Private Limited) and without disclosing thesematerial facts before the said authority, the order impugned has been passedon the basis of the application filed by the Respondents No. 3 & 4, andtherefore, it is liable to be set aside. 3.It, however, appears from perusal of the record that the Respondents No. 3 & 4 being assessees have moved an application before the SettlementCommission under Section 245-C of the Income Tax Act, 1961 (for short, theAct, 1961) for settlement of their cases on 18.12.2017, who in turn, vide orderdated 21.12.2017, allowed the said application under Section 245D(1) of theAct, 1961 and thereafter called for the report from the Principal Commissionerof Income Tax, Raipur in exercise of the powers enumerated under Section245D(2B) of the Act, 1961. In pursuance thereof, the said authority hassubmitted the report vide letter dated 18.01.2018 and after perusal of the report, the learned Settlement Commission has passed the order impugnedon 02.02.2018 (Annexure P/1) under Section 245D(2C) of the Act, 1961. It isto be noted at this juncture that the order impugned as passed under the saidprovision is preliminary in nature, as reflected from the said provision. Section245D(2C) of the Act, 1961 is relevant for the purpose reads as under :- “Where a report of the [Principal Commissioner orCommissioner] called for under sub-section (2B) has beenfurnished within the period specified therein, the SettlementCommission may, on the basis of the report and within aperiod of fifteen days of the receipt of the report, by anorder in writing, declare the application in question asinvalid, and shall send the copy of such order to theapplicant and the [Principal Commissioner orCommissioner]: Provided that an application shall not be declaredinvalid unless an opportunity has been given to theapplicant of being heard; “Where a report of the [Principal Commissioner orCommissioner] called for under sub-section (2B) has beenfurnished within the period specified therein, the SettlementCommission may, on the basis of the report and within aperiod of fifteen days of the receipt of the report, by anorder in writing, declare the application in question asinvalid, and shall send the copy of such order to theapplicant and the [Principal Commissioner orCommissioner]: Provided that an application shall not be declaredinvalid unless an opportunity has been given to theapplicant of being heard; Provided further that where the [PrincipalCommissioner or Commissioner] has not furnished thereport within the aforesaid period, the SettlementCommission shall proceed further in the matter without thereport of the [Principal Commissioner or Commissioner]:] Provided also that where in respect of an application,an order, which was required to be passed under this sub-section on or before the 31[st] day of January, 2021, has notbeen passed on or before the 31[st] day of January, 2021,such application shall deemed to be valid.]” 4.It, thus, appears from a bare perusal of the aforesaid provision that thevalidity of the application as made by the assessees has been decided while holding it to be valid one as reflected from paras 7 and 8 of the orderimpugned, which read as under :- “7.We have carefully considered the facts and thesubmissions made by both the parties. In view of the abovereply of the applicants, we are of the opinion that prima faciethe applicants have fulfilled all the conditions as laid down inSection 245C of the Act including full and true disclosure ofincome and the manner of earning such income and at thisstage there is nothing adverse to hold the applications asinvalid. As mentioned above, the CIT(DR) has also statedthat the applications may be proceeded with further. Theapplications filed by the applicants for assessment yearunder reference are therefore, treated “not invalid” underSection 245D(2C) of the Act. This is without prejudice to theissues and findings that may arise in the proceedings u/s245D(4). 8.The Secretary/AO shall pursue the matter forsubmission of report under Rule 9 by the Pr. CIT.” 5.After passing of the aforesaid order, the further order is required to bepassed by the Settlement Commission upon examining the records and thereport of the Principal Commissioner or Commissioner under Section 245D(4)of the Act, 1961. The said provision is also relevant for the purpose, reads asunder :- “Section 245D(4) - After examination of the recordsand the report of the [Principal Commissioner orCommissioner], if any, received under: (i)sub-section (2B) or sub-section (3), or (ii)the provisions of sub-section (1) as they stood immediately before their amendment by the Finance Act, 2007, and after giving an opportunity to the applicant and to the[Principal Commissioner or Commissioner] to be heard,either in person or through a representative duly authorisedin this behalf, and after examining such further evidence asmay be placed before it or obtained by it, the SettlementCommission may, in accordance with the provisions of thisAct, pass such order as it thinks fit on the matters covered bythe application and any other matter relating to the case notcovered by the application, but referred to in the report of the[Principal Commissioner or Commissioner].] ” 6.It appears further that the Settlement Commission, in exercise of the aforesaid provision, has already passed an order on 15.01.2019 (Annexure Anjani R-3/1), which has been given to its effect vide order dated 14.03.2019(Annexure R-5/5), even before filing of this petition, yet the same has notbeen challenged by the Petitioners irrespective of the fact that the orderimpugned dated 02.02.2018 (Annexure P/1) has been merged therein. 6.It appears further that the Settlement Commission, in exercise of the aforesaid provision, has already passed an order on 15.01.2019 (Annexure Anjani R-3/1), which has been given to its effect vide order dated 14.03.2019(Annexure R-5/5), even before filing of this petition, yet the same has notbeen challenged by the Petitioners irrespective of the fact that the orderimpugned dated 02.02.2018 (Annexure P/1) has been merged therein. 7.Pertinently to be observed here further that the Petitioner – SureshShadija and Respondents No. 3 & 4 (Shri Pawan Kumar Shadija and Smt.Sandhya Shadija) belong to the same family and it appears to be of theirpersonal dispute as reflected from the proceedings (Annexure P/24) initiatedby the Petitioner on 11.05.2017 before the National Company Law Tribunalunder Sections 58 and 59 of the Companies Act, 2013, which is pendingunder consideration before the Tribunal. It, thus, appears that the petitionershave already approached the appropriate forum for the redressal of theirdisputes. 8. In view of the aforesaid background, I am not inclined to entertain thispetition. The petition is accordingly dismissed.No order as to costs.petition. The petition is accordingly dismissed.No order as to costs. Sd/- (Sanjay S. Agrawal) Judge HIGH COURT OF CHHATTISGARH, BILASPUR Order Sheet WPT No. 125 of 2021 S. K. Shadija Global Private Limited Versus Union Of India Through Video Conference31.01.2022Shri Kishore Bhaduri, learned Senior Advocate appearsalong with Shri Sudeep Johri, counsel for the petitioners.Shri Apurv Goyal, counsel for respondents No. 2 to 4.Shri Amit Chaudhari, counsel for respondents No. 5 & 9.Heard on admission.Order dictated in open Court. Passed, signed and datedseparately.Sd/-(Sanjay S. Agrawal)JudgeAnjani