Tag: HC

HC: Lawyers not obliged to verify client instructions

New Delhi: Delhi High Court on Thursday noted that advocates are bo-und by the instructions of their clients and are under no legal obligation to ve-rify their truthfulness, as it is to be de-cided by the court hearing the matter.

Dismissing a complaint lodged by a man against three lawyers who ap-peared for his opponent in court, HC emphasised that the duty of the lawy-er is to submit the case as per instruc-tions, which was done in the present matter. “We may also record that an advocate is bound by the instructions given to him by his client,

and it does not form part of his duty to verify the truthfulness or veracity of such in-structions, especially for the reason that the assertions made by the parti-es before the court in the form of plea-dings or setting up a case are to be de-cided by the learned court concerned in the proceedings and not by the la-wyers representing the respective

parties,” a bench of Chief Justice DK Upadhyay and Justice Tushar Rao Gedela said. The court agreed with the conclusions of the Bar Council of Delhi (BCD) and a single-judge bench of HC that there was no misconduct by the advocates who represented the opposite party against the litigant, Chand Mehra.

On the basis of the contents of the complaint lodged by the appellant (Mehra) against the respondents, no case of professional misconduct is made out. Further, if the complaint made by the appellant is to be acted upon and proceeded with for taking action against the respondents, the same will result in undermining the duties which an advocate owes to his client,” the court pointed out.

Mehra moved HC against a 2023 BCD order that dismissed his compla-int on the grounds that he and the 3 la-wyers had no professional relations-hip as they represented the opposite party in a cheque-bounce matter.

Bombay High Court Rules in Favor of Real Estate Company: ₹9.92 Crore Refund

Bombay High Court Directs BMC to Refund ₹9.92 Crore to Real Estate Company

In a recent development, the Bombay High Court has ruled that tax deducted at source (TDS) cannot be levied for land acquisition compensation. The court directed the Brihanmumbai Municipal Corporation (BMC) to refund an amount of ₹9.92 crore to the Bombay Real Estate Development Company.

This decision stems from Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which unequivocally provides that no income tax or duty shall be levied on any award or agreement made under the Act. The bench, comprising of Justice MS Sonak and Justice Kamal Khata, emphasized that the only exception to this rule would be the acquisition made under Section 46 of the Act, which does not apply to the BMC’s acquisition of 9,302 square metres of land at Poisar, Kandivali. This land belonged to the construction company and was intended for the construction of a cemetery.

The court noted that the exemption under Section 96 of the Act clearly applied in this case, and thus the BMC should not have deducted the TDS from the compensation amount paid to the petitioner. This ruling came as a result of a petition filed by the Bombay Real Estate Development Company, challenging the BMC’s decision to deduct TDS after the civic body took over the land in November 2022. The BMC had agreed to a price of ₹99.19 crore for the land but only transferred ₹89.27 crore, citing the deduction of approximately ₹9.92 crore as TDS.

As per the High Court’s directive, the BMC is required to file a correction statement with the Income Tax authorities within 30 days, declaring that the amount of ₹9.92 crore was not liable to be deducted. Subsequently, the Income Tax authorities have been instructed to process the correction statement in order to refund the deducted amount to the company.

This ruling sets a significant precedent in ensuring fair compensation for land acquisition and upholding the provisions of the Land Acquisition Act, 2013.

Bombay High Court Imposes Rs 4 Crore Cost on Patanjali for Trademark Infringement

Bombay High Court Imposes Rs 4 Crore Cost on Patanjali for Breach of Interim Order

The Bombay High Court recently brought down the hammer on Patanjali Ayurved Ltd, slapping them with a staggering cost of Rs 4 crore for violating a 2023 interim order. The order had explicitly prohibited the company from peddling its camphor products in connection to a trademark infringement lawsuit lodged by Mangalam Organics Ltd.

In a scathing judgment, Justice R I Chagla singled out Patanjali for a “wilful and deliberate” disregard of the court mandate, leaving no room for doubt regarding their intention to flout the order. The court’s decision stemmed from a petition filed by Mangalam Organics Ltd, seeking contempt action against Patanjali for continuing to market their camphor products in defiance of the restraining order.

Notably, the court instructed Patanjali to fork out the hefty sum within two weeks, adding to the Rs 50 lakh directed earlier in the month. The timeline set by the court underscored the gravity of the situation, emphasizing the repercussions awaiting failure to comply. The legal tussle originated in August 2023, when the high court, through an interim order, barred Patanjali from vending or promoting their camphor products, following allegations from Mangalam Organics of copyright infringement.

In a dramatic turn, Rajneesh Mishra, director of Patanjali, submitted an affidavit in June 2024, tendering an unconditional apology and committing to honor the court’s directives. However, the court took a dim view of these developments, especially in light of Mishra’s claim in the affidavit regarding the substantial supply of the contentious camphor product post-injunction.

While the court contended that there were grounds to consider imprisonment for Mishra, it opted against such a ruling, mindful of the implications for his personal freedom. However, the court didn’t pull any punches, warning that failure to cough up the eye-watering sum of Rs 4 crore within the stipulated two weeks would result in immediate detention for Mishra.

This resounding judgment serves as a stark reminder of the far-reaching consequences of flouting court orders, particularly in intellectual property disputes. It remains to be seen how this hefty penalty will impact both the litigants and the larger legal landscape.

SC Dismisses Income Tax Dept Appeal Against HC Stay on Proceedings Under FCRA

The Supreme Court has dismissed the Income Tax (I-T) Department’s appeal against a stay granted by the Delhi high court in favour of the 50-year old, reputed think tank, Centre for Policy Research (CPR) in respect of cancellation of its registration under Section 12A of the Income Tax Act.

“In view of the fact that the order impugned is interim in nature, we are not inclined to interfere with the impugned judgment passed by the high court,” LiveLaw reports a division bench of Justices P.S. Narasimha and Aravind Kumar as saying.

Established in 1973, Centre for Policy Research, or CPR, one of India’s most respected and oldest think tank and research centres, has been targeted on multiple scores, and scholars and academics globally have protested moves that appear shrouded in talk of irregularities, but smack of vendetta appear to be well in sync with democratic backslide that has squeezed civil society in the extreme.

In March last year, in an open letter, top academics from universities in the US, the UK, Europe, and Australia had said they are “shocked and dismayed” at the government action. Calling CPR “one of India’s oldest and most esteemed policy research institutions”, the signatories say it has a “reputation for excellence that is second to none among international scholars”. Signatories included Adam Tooze, Daniel Honig, Christophe Jaffrelot, Alpa Shah, Filippo Osella (who was deported from India despite having a valid visa) and others.

CPR’s Foreign Contribution (Regulation) Act (FCRA) licence was suspended last year, crippling its ability to ensure funding for research. Questions were then asked if research done by CPR on the ecology, impacting on the mega business group perceived to be close to Prime Minister Modi and the Bharatiya Janata Party, Adani could be linked with the Modi government’s actions against the think tank. The IT department’s notice to CPR had prominently cited CPR’s “ties with an NGO in Chhattisgarh that has been associated with protests against mining in Hasdeo. What the notice, however, did not state is that Hasdeo is the site of a massive Adivasi movement against the Adani Group for over a decade.”

CPR had moved the Delhi high court of Delhi against the I-T department’s order, which sought to cancel its registration under Section 12A with retrospective effect, thereby taking away its tax exemption status, reports LiveLaw. It was represented by senior advocate Arvind P. Datar, who argued that cancellation of registration could have been ordered only for the previous year in which the violation was noticed, and if at all, for “subsequent previous years”. It was urged that the impugned order cancelled registration for several financial years, while dealing with “issue-wise” purported violations, which infracted Section 12AB(4)(ii) of the Act.

Datar had also raised the issue of “violation of principles of natural justice” before the high court, contending that CPR was not given the opportunity to cross-examine persons whose statements were recorded by the revenue and relied upon in its order. “Further, it was highlighted that in connection with a show cause notice, no personal hearing was granted.”

The Delhi high court will hear the case next on January 16.

Income Tax Department to move SC against HC ruling on validity of orders

The Income Tax (IT) Department is likely to file an appeal in the Supreme Court (SC) against a Delhi High Court (HC) ruling which declared any IT assessment order issued without Document Identification Number (DIN) has no legal standing.

The Delhi HC, in April, had upheld the provisions of a 2019 Central Board of Direct Taxes (CBDT) circular which had made DIN mandatory for documents issued.

As per a CBDT circular dated August 14, 2019 issued by the CBDT, any communication by any Income Tax Authority (ITA) without DIN shall be treated as invalid and shall be deemed to never have been issued.

“At max, the non-generation of a DIN in the IT order is a technical glitch. There have been several instances, where due to technical difficulties the DIN was not mentioned in the order. However, with the Delhi HC ruling, several orders that were issued in the passed are not legally valid,” a government source said.

“We (IT Department) are mulling to file an appeal in the Supreme Court. The process for filing the appeal is getting finalised, some expert opinions are being sought,” the source said.

Before the Delhi High Court, the IT Department had submitted that failure to generate and allocate DIN is a mistake or at best, a defect (that can be covered under section 292B of the IT Act), which ought not to invalidate the assessment proceedings.

However, the HC observed that the argument that recourse can be taken to Section 292B of the Act, is “untenable”, in view of to the phraseology used in paragraph 4 of the CBDT 2019 circular.

Amit Maheshwari, Partner- Tax, AKM Global, explained, “The Delhi HC ruling affirms two important legal positions, one that circulars issued by CBDT are absolutely binding / mandatory in nature and the tax department cannot deviate from the methodology prescribed by CBDT in garb of pleading a mistake or an omission. Secondly, the High Court has held non-compliance of CBDT circular is a jurisdictional error and cannot be cured by resorting to section 292B.”

Saurrav Sood, Practice Leader – International Tax and Transfer Pricing at SW India, said, “taking advantage of this (Delhi HC) judgement, the courts have been flurried with various writs by the taxpayers, where such DIN is missing. It is to take care of such interpretation that Department may be contemplating to challenge the order of High Court, since in case of time barring notices/order, DIN cannot be applied later to validate such order.”