Writ – Taxation Law - Exemption under Section 80G – Denial of Renewal – Non-Charitable Use of Funds Not Proven – The Commissioner of Income Tax rejected the petitioner-Trust’s application for continuation of exemption under Section 80G of the IT Act on grounds that the Trust allegedly did not engage in charitable activities and misused funds by making donations to unrelated entities – Held: The denial was based on assumptions and lacked substantial evidence – The Trust’s donations to registered charitable societies, also exempt under Section 80G, could not be held to contravene its objects without proving personal benefits or diversion of funds – Renewal of exemption allowed [Paras 14-18, 20].

Section 12A Registration – Foundation for Charitable Activities – Interference with Exemption Improper Without Revoking Registration – The Trust’s registration under Section 12A(a) was not revoked by the authorities – Once registration is valid, denial of exemption based on alleged deviation from objects is untenable unless supported by substantial evidence of misuse or deviation – Respondents failed to establish that the Trust acted beyond its objectives or for non-charitable purposes [Paras 12-15, 17].

Reassessment under Section 147 – Notice Invalid in Light of Exemption – Reassessment Quashed – The notice for reassessment under Section 147 for the AY 1995-96 was based on the same grounds as the denial of exemption under Section 80G – Since the denial of exemption was found invalid, reassessment notice was also quashed – Held: No substantive grounds existed for reopening the assessment [Paras 8-10, 20].

Charitable Objects and Donations – Ancillary Activities Permissible – Donations Not a Bar to Exemption – Donations made by the Trust to other registered charitable organizations (e.g., Sardarni Uttam Kaur Education Society) were in line with its ancillary charitable objects and were neither prohibited nor demonstrated to benefit trustees personally – Held: Ancillary activities supporting main objects qualify as charitable and do not disentitle exemption [Paras 14-17, 19].

Decision: Writ petitions allowed – Orders denying exemption under Section 80G and reassessment notice under Section 147 quashed – Exemption under Section 80G restored.
 

Dishonour of Cheque – Presumption under Section 139 N.I. Act – Rebuttal by Accused – Acquittal Upheld - The appellant alleged that the respondent borrowed Rs. 5,00,000 and issued a cheque, which was dishonoured for insufficient funds – The appellant argued that the memorandum of understanding executed by the respondent during the pendency of the case admitted the debt and issuance of the cheque – The Trial Court found inconsistencies in the appellant's evidence, including failure to prove the financial capacity and non-examination of key witnesses – The respondent rebutted the presumption under Section 139 N.I. Act by raising plausible defences, including that the cheque was issued as security to a third party – Held: The Trial Court’s findings were upheld, as the complainant failed to prove the loan transaction and legally enforceable debt beyond a reasonable doubt [Paras 7-10].

Memorandum of Understanding (MoU) – Failure to Prove Execution – Impact on Case - The appellant relied on an MoU executed during the pendency of the case, wherein the respondent allegedly admitted the loan – The respondent denied the execution of the MoU, and the appellant failed to examine the attesting witnesses, including a key individual alleged to have facilitated the loan – Held: Non-production of corroborative evidence to establish the execution of the MoU weakened the appellant's case and created doubt regarding the claim of a legally enforceable debt [Paras 8-9].

Financial Capacity of the Complainant – Burden of Proof – Relevance in Section 138 N.I. Act Cases - The appellant's financial capacity to advance the alleged loan was questioned by the respondent – The Trial Court noted that the appellant failed to produce evidence of his financial capacity and gave evasive answers during cross-examination regarding pending criminal cases against him for similar offences – Held: The complainant’s inability to establish financial capacity to advance the loan further undermined his case [Paras 9-10].

Decision - Appeal dismissed – Acquittal of the respondent-accused upheld as the appellant failed to prove the existence of a legally enforceable debt, and the respondent successfully rebutted the presumption under Section 139 of the N.I. Act [Para 10].
 

Matrimonial Law - Interim Maintenance – Husband’s Meager Income Not a Ground for Denial – Obligation of Able-Bodied Husband – Held: Maintenance Upheld – The applicant challenged the Family Court’s grant of ₹4,000 per month as interim maintenance – Held: An able-bodied husband cannot escape his obligation to maintain his wife merely on the ground of low income – The Supreme Court in Rajnesh v. Neha ruled that a husband's limited earnings do not absolve him from paying maintenance – Husband must earn to support his wife [Paras 5, 7].

Adultery as a Ground for Denying Maintenance – Distinction Between Adultery and Emotional Affair – Held: No Bar to Maintenance – The applicant alleged that the wife had a love affair and was therefore not entitled to maintenance – Held: Under Section 125(4) CrPC, maintenance can be denied only if the wife is proved to be living in adultery – Mere love or emotional affection without proof of sexual relations does not constitute adultery – Maintenance rightly granted [Para 6].

Judicial Interpretation – Effect of Restitution of Conjugal Rights on Maintenance – Whether Husband’s Section 9 HMA Petition Bars Wife’s Claim – Held: No – The applicant contended that he had filed for restitution of conjugal rights, which the wife refused, and hence she was not entitled to maintenance – Held: Even if a decree under Section 9 of the Hindu Marriage Act is passed, the wife is still entitled to maintenance unless she voluntarily deserts her husband without reasonable cause (Rina Kumari v. Dinesh Kumar Mahto) – Since no proceedings for restitution were pending, the contention was irrelevant [Para 5].

Allegations of Wife’s Independent Income – Absence of Documentary Proof – Held: No Justification to Deny Maintenance – The applicant claimed that the wife was running a beauty parlour and earning sufficiently – Held: No documentary evidence was produced to establish the claim – Mere allegations without proof cannot be a basis to deny interim maintenance [Para 7].

Public Notice by Husband’s Father Dispossessing Him – Legal Impact on Maintenance Obligation – Held: Irrelevant – The applicant placed reliance on a public notice by his father stating that he had been disowned from family property – Held: The applicant was still residing at the same address, proving that the notice was merely a legal formality with no actual effect – Such notices cannot be used as a shield to avoid maintenance liability [Para 8].

Decision – Criminal Revision Dismissed – Maintenance Upheld – The High Court affirmed the Family Court’s order granting ₹4,000 as interim maintenance, noting that the trial court already considered the maintenance under Section 24 HMA – No interference warranted – Criminal revision dismissed [Paras 9-12].

Income Tax Law – Penalty under Section 271D – Bar of Limitation – Revenue's Appeal Dismissed – ITAT’s Decision Upheld – Limitation for Penalty Proceedings – Distinction Between Initiation and Completion – Section 275(1)(c) of the Income Tax Act, 1961 – Whether initiation of penalty proceedings under Section 271D is time-barred – Held: Penalty proceedings initiated based on a reference by the ITO to the Additional Commissioner must be reckoned from the date of reference (16.11.2016 in this case) – Completion of penalty proceedings was beyond the prescribed limitation period, rendering the penalty order invalid [Paras 6.1–6.9].

Doctrine of Delay and Laches – Absence of Statutory Provision – Courts cannot create limitations – Initiation of penalty proceedings cannot be left to the discretion of authorities, as it defeats legislative intent – Reference by the ITO is the triggering point for initiation of penalty proceedings [Paras 6.4–6.7].

Interpretation of Section 275(1)(c) – Purposive Interpretation – Statutory language does not prescribe limitation for initiating penalty proceedings but emphasizes timely conclusion of proceedings once initiated – Delay in issuing show-cause notice (nearly a year) demonstrates lack of diligence by the Revenue [Paras 6.6–6.7].

Case Law Analysis – Delhi High Court's Interpretation – Turner General Entertainment Networks and Clix Capital Services Pvt. Ltd. analyzed to establish that penalty proceedings are initiated at the first step (reference to competent authority) – Distinguished Grihalakshmi Vision case as fact-specific and not applicable in the present context [Paras 6.2–6.8].

Reliance on CBDT Circular – Departmental View – Circular No. 9/DV/2016 found inapplicable where High Court decisions conflict with departmental interpretation – Legislative amendment recommended for clarity [Para 6.9].

Decision: Questions of law reframed in favor of the Assessee – Initiation of penalty proceedings reckoned from the date of ITO's reference (16.11.2016).
Penalty proceedings held time-barred – Appeal by Revenue dismissed – Costs made easy.
 

Civil Law - Specific Performance – Readiness and Willingness – Non-Compliance – Relief Denied - The agreement holder sought specific performance of a sale agreement executed in 1973 but issued a legal notice to the owners only in 1996, after a delay of 23 years. Readiness and willingness, being distinct and essential elements for seeking specific performance under Section 16(c) of the Specific Relief Act, were not established. The unexplained delay in taking steps to complete the transaction disentitled the plaintiff from claiming specific performance. [Paras 27-28, 36].

Limitation vs. Readiness and Willingness – Suit Within Time but Performance Delayed – While the suit for specific performance was filed within three years of issuing the legal notice (1996), the 23-year delay in initiating any action prior to filing the suit reflected the plaintiff’s lack of readiness and willingness to perform the agreement. Readiness and willingness were to be adjudged based on conduct and attending circumstances, which the plaintiff failed to establish. [Paras 28, 29].

Section 53A of the Transfer of Property Act – Protection Denied - The agreement holder claimed protection under Section 53A to retain possession of the suit property. However, the mandatory condition of demonstrating continuous willingness to perform the agreement was not met. Consequently, the protection under Section 53A was denied, and the agreement holder was directed to vacate and hand over possession of the property to the owners. [Paras 39-42].

Owners’ Rights – Declaration of Ownership and Refund Ordered - The owners, being the legal heirs of the deceased seller, were declared absolute owners of the suit property. The agreement holder was directed to vacate the property and hand over possession to the owners. Additionally, the owners were directed to refund the advance payment of ₹5,000 received under the sale agreement along with 12% interest from the date of the suit till payment. [Paras 42-44].

Discretion in Granting Specific Performance – Principles Reiterated - The court reiterated that specific performance is a discretionary relief and will not be granted where the plaintiff fails to act diligently or demonstrate readiness and willingness to perform contractual obligations. Delay and inaction on the part of the agreement holder disentitled him from claiming specific performance. [Paras 27-28, 36, 40].

Decision: The appeals were allowed. The judgment and decree dated 22/06/2006 passed by the First Appellate Court in RA Nos. 24, 25, and 27 of 2003, as well as the judgment and decree dated 28/01/2003 passed by the Trial Court in OS Nos. 60/1997 and 162/1996, were set aside. The suit for specific performance (OS No. 60/1997) was partly decreed by directing the owners to refund the advance amount of ₹5,000 with 12% interest per annum from the date of the suit till the date of payment. The agreement holder was directed to vacate the suit property and hand over possession to the owners. The suit for declaration (OS No. 162/1996) was decreed by declaring the plaintiffs (owners) as the absolute owners of the suit property and directing the revenue authorities to update the revenue records to reflect the ownership of the plaintiffs.

Civil Law - Specific Performance – Prima Facie Case – Insufficient Evidence – Temporary Injunction Denied - Plaintiffs sought specific performance for agreements involving flats under a Joint Development Agreement (JDA) but failed to demonstrate a prima facie case. The discrepancies between the property descriptions in the agreements and the plaint schedules, coupled with unverified claims of advance payments, undermined the case. Held: Injunction cannot be granted [Paras 10-12].

Temporary Injunction – Identification of Suit Property – Essential for Relief – Lack of Clarity - Plaintiffs failed to identify the properties clearly as there were inconsistencies in flat descriptions and measurements between the plaint schedule and agreements. Held: Lack of identifiable property negates relief [Paras 10-12].

Admissibility of Documents – Insufficient Stamp Duty – Section 34 of the Karnataka Stamp Act - Sale agreements executed on insufficiently stamped paper are inadmissible as evidence without payment of duty and penalty. Held: Agreements lacked admissibility, weakening the plaintiffs’ case [Para 11].

Balance of Convenience – Favors Defendants – Pending Arbitration - Plaintiffs, partners in the developer firm, did not complete the owner's share of construction as required under the JDA and could not show irreparable harm. The disputes were referred to arbitration as per the JDA's arbitration clause. Held: Balance of convenience is against the plaintiffs; injunction denied [Paras 10-12].

Decision: The appeals were dismissed, affirming the trial court’s rejection of the injunction applications.

Criminal Law - Challenging the judgment of acquittal - Abetment to Suicide – Definition under Section 107 IPC – Mens Rea Essential – Acquittal Upheld - The appellant alleged that the respondent-accused took money and gold ornaments from the deceased on the pretext of securing bail for her husband and refused to return them – It was claimed that the respondent's refusal led the deceased to commit suicide – The Trial Court found that there was no instigation or active act by the respondent to abet the suicide – Held: Mere non-return of money and ornaments or a quarrel does not amount to abetment unless there is clear instigation or intent to provoke the deceased to commit suicide – Mens rea is essential to establish abetment [Paras 8-20].

Suicide – Causal Link Between Conduct of Accused and Act of Deceased – Lack of Evidence - The appellant failed to establish a causal link between the respondent’s refusal to return money and the deceased’s suicide – Evidence showed no active or direct act by the respondent amounting to abetment – The Trial Court correctly observed that the deceased had alternative remedies and suicide was not the only option – Held: Acquittal justified as there was no evidence of intent or active instigation by the respondent [Paras 14-20].

Death Note – Failure to Prove Authenticity – Improper Reliance by Trial Court - The Trial Court improperly relied on the contents of a death note (Ex.P2) despite holding that its authenticity was unproven – The note was not proved to be in the handwriting of the deceased – Held: While reliance on the death note was improper, the remaining evidence independently supported the respondent’s acquittal [Paras 8-9].

Supreme Court Precedents – Requirements for Abetment under Section 306 IPC – Applied - Following the precedents in Sanju alias Sanjay Singh Sengar v. State of M.P., (2002) 5 SCC 371 and M. Mohan v. State, (2011) 3 SCC 626, it was reiterated that abetment requires active instigation or direct act with the intent to push the deceased to commit suicide – Mere quarrels or refusal to repay money without intent to incite suicide do not meet the threshold for abetment [Paras 12-18].

Decision - Appeal dismissed – Acquittal of the respondent-accused upheld as the prosecution failed to prove the ingredients of abetment under Section 306 IPC, and no intent or instigation could be attributed to the respondent [Paras 20-21].

Money Laundering – Bail Application – Role in Proceeds of Crime – Applicant sought regular bail after being charged for his involvement in the money laundering activities of the "Mahadev Online Book" betting syndicate – Prosecution alleged that the applicant actively facilitated operations, including managing funds, handling visas for associates, and holding assets linked to proceeds of crime – Held: The applicant's denial of involvement is insufficient to rebut prima facie evidence – Organized and large-scale economic offences require a stricter approach to bail – Bail denied [Paras 6–13].

Economic Offences – Organized Crime – Stringent Scrutiny for Bail – The Court emphasized that economic offences, particularly those involving large-scale money laundering, deeply impact the nation's financial health and society – Held: The applicant’s prima facie role in facilitating illegal betting operations and laundering proceeds of crime makes him ineligible for bail at this stage – Supreme Court precedents in Vijay Madanlal Choudhary v. Union of India and Y.S. Jagan Mohan Reddy v. CBI applied [Paras 10–12].

Money Laundering – Proceeds of Crime – Evidence of Involvement – Evidence revealed the applicant’s active role in managing funds and operations of the betting syndicate, including his association with its promoters – Statements of co-accused and witnesses under Sections 161 and 164 CrPC, along with financial transactions, established prima facie involvement – Held: Material evidence and the nature of organized crime weigh against granting bail [Paras 8–12].

Bail Considerations – Economic Offences – Scope of Judicial Review – The Court clarified that at the bail stage, it does not delve deeply into merits but examines prima facie evidence of involvement – Statements of witnesses, financial transactions, and the applicant's association with promoters established a reasonable case against him – Held: Organized nature of the crime and its severity require rejecting bail to ensure a fair trial and prevent misuse of liberty [Paras 6–12].

Decision: The bail application under Section 483 of Bharatiya Nagarik Suraksha Sanhita, 2023, is rejected. The Court held that prima facie evidence, including the applicant's role in managing funds and facilitating operations for the "Mahadev Online Book" syndicate, sufficiently established his involvement in the alleged offences. The severity of the organized crime and its societal impact necessitated denial of bail to maintain public interest and prevent tampering with evidence [Paras 11–13].
 

Contempt Jurisdiction – Applicability of Section 19 of Contempt of Courts Act – Appeal Maintained – The appellant challenged the order of the Contempt Court imposing costs of ₹50,000 for alleged non-compliance with a prior judgment. Held: The appeal is maintainable under Section 19 of the Contempt of Courts Act when the impugned order is incidental to or inextricably connected with punishment for contempt [Paras 24(a)-(b), 27].

Contempt Proceedings – Premature Coercive Action – Requisite Procedural Safeguards Ignored – Contempt Court imposed costs without framing charges, affording an opportunity to file affidavits, or considering extenuating explanations. Held: Such action violates the procedural requirements under Rule 10 of the Punjab and Haryana High Court Contempt of Court Rules, 1974 [Paras 34-35].

Appealability of Contempt Orders – Principles from Midnapore Case Applied – An appeal lies under Section 19 where an order is connected with contempt punishment or aims to enforce compliance through coercive means. Held: The impugned order is appealable as it indirectly seeks compliance by imposing costs, equating to punitive action [Paras 26-27].

Stay of Compliance Pending Appeal – Need for Judicial Prudence – Contempt jurisdiction is to be exercised sparingly, particularly where appeals or reviews are pending against the primary order. Held: Contempt action must await the outcome of such appellate or corrective proceedings [Paras 18-21].

Decision: The appeal is allowed. The order dated 21/11/2024, imposing costs on the appellants, is quashed. The appellants are discharged from contempt proceedings. Liberty is reserved for the respondent to file a fresh contempt petition if the final decision in the LPA remains unimplemented.