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Showing 201 to 220 of 1182 Records
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2025 (2) TMI 982
Addition u/s 68 - bogus share capital and share premium received from various persons - HELD THAT:- We find that the CIT(A) deleted addition of bogus claim of deprecation, whereas confirmed the addition in respect of bogus entry of share capital and share premium. Once it is established that the increase in assets and liabilities in the balance sheet is on account of bogus entries, the statement with regard to bogus entries on the asset sides having been accepted corresponding effect on the liability side should also have been given.
The affidavit sworn by Chartered Accountant of the assessee is either have to be accepted in whole or rejected in toto. Once it is accepted that there were bogus entries on the assets side and corresponding entire on the liability side should also have been accepted. Taking into consideration entire facts of the case, the addition made on account of bogus share capital and share premium is deleted.
Addition is deleted under the provisions of Income Tax Act, however, we do not subscribe to the unscrupulous method adopted by the assessee for obtaining higher credit facilities from the bank by window dressing balance sheet. The conduct of the assessee is deplorable.
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2025 (2) TMI 981
Powers provided u/s. 12AB for cancelling the registration granted to the assessee u/s. 12A - PCIT (Central) jurisdiction to cancel the registrations u/s 12A/12AA/12AB - ‘specified violation'
HELD THAT:- As going through the above decisions of Maa Jagat Janani Seva Trust [2024 (7) TMI 1020 - ITAT CUTTACK] wherein catena of judgments have been referred and also the ratio laid down in the case of Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd. [2018 (2) TMI 1220 - SUPREME COURT] has been followed, we find that the same is squarely applicable on the facts of the instant case and therefore we are inclined to hold that since there is no express power provided u/s. 12AB(4) of the Act for cancelling the registration granted u/s. 12A, PCIT (Central) grossly erred in issuing show cause notice u/s. 12AB(1) of the Act on 21.07.2023. The said show cause notice is held to be invalid and void ab-initio and therefore finding of ld. PCIT (Central) is reversed and we hold that registration granted u/s. 12A of the Act cannot be cancelled during the proceedings carried out u/s. 12AB(4) of the Act.
Assessee challenging the powers available in section 12AB that the show cause notice issued u/s. 12AA on 20.03.2024 is also invalid - Assessee stated that section 12AA(5) of the Act provides that nothing contained in section 12AA of the Act shall apply on or after 01.04.2021 - As in the instant case the proceedings for cancellation of registration have been initiated on 21.07.2023 and therefore even the registration u/s. 12A cannot be cancelled u/s.12AA of the Act in the instant case because the proceedings have been initiated u/s. 12AB which have been brought into Act w.e.f. 01.04.2021. Therefore, the show cause notice u/s. 12AA of the Act issued on 20.03.2024 for cancelling the registration u/s. 12AA(3) and 12AA(4) of the Act for the period 01.04.2019 to 31.03.2021 is invalid and ab-initio as the PCIT (Central) has issued the show cause notice dated 20.03.2024 in a section already stood discontinued from 01.04.2021 onwards. Thus, the assessee succeeds on this second limb of its legal ground.
In the show cause notice PCIT has referred to ‘specified violation’ committed by the assessee by virtue of which the assessee trust has not applied its income wholly and exclusively for the purpose for which it is established but using it directly or indirectly for the benefits of its trustees and other members of the trust - As sub-section (3) and (4) of section 12AA, there is no mention to any ’specified violation’ but only refers to the genuineness of the activity carried out by a trust or institution, however, PCIT has only referred to some ‘specified violations during F.Yrs. 2019-20 to 2021-22 which was going on under scrutiny by AO. There were only few statements which were recorded during the course of search which are the basis of the alleged allegation and that too have been retracted and apart from that no other evidence and no accounted assets, unaccounted income were found during search at assessee’s premises and therefore they are merely allegations and there is no concrete finding disproving the genuineness of activities of trust. Therefore, even sub-section (3) and sub-section (4) of section 12AA could not have been invoked in absence of any specified violation for the years under consideration.
To conclude we allow the legal ground raised by the assessee and hold that since the show cause notices issued to the assessee on 21.07.2023 and 20.03.2024 are invalid and void ab-initio for want of express powers for cancellation of registration u/s.12A of the Act and also proceedings wrongly started u/s. 12AA of the Act in view of the amendment brought in from 01.04.2021 and lastly the ‘specified violation word being inserted from 01.04.2022 cannot be applied for the alleged violation made from F.Yrs. 2019-20 to 2021-22 and therefore hold that ld. PCIT (Central) grossly erred in cancelling the registration granted to assessee u/s. 12A on 16.02.2001 and also erred in cancelling the registration granted u/s. 12A r.w.s.12AB of the Act granted on 28.05.2021. Thus registration u/s. 12A and 12AB of the Act granted to the assessee trust are restored.
Observation of PCIT based on the seized document, and other loose sheets found during the course of search along with the Pendrive found at the residential premises of Chief Accountant of the assessee trust and proceeding to cancel the registration -As remains uncontroverted that assessee trust is carrying out genuine activities as per its objects forming part of registration certificate granted u/s. 12A/12AB of the Act and running a Medical College, Hospital and Research Centre. Even ld. PCIT has not referred to any other discrepancy in the regular day to day activity of the assessee trust except to the loose documents found during the course of search and that to only pertaining to F.Yrs. 2019-20 to F.Y. 2021-22. Total focus of the ld. PCIT has been around these documents referred in the impugned order but other than these documents nothing wrong has been found in the regular day to day activity of the assessee trust. We also notice that the alleged documents are only confined to the staff salary, doctor salary and capitation fee but the assessee trust is carrying out many more activities and the expenses are of much more magnitude which involves the amount spent towards building construction, medicine, machines, college building and other expenses which are appearing in the audited books of account.
If it is established that the assessee trust/societies is carrying out genuine activities as per the objects for which they have been established, then the issue arising out of any loose paper/documents/ incriminating material alleging that the funds of the society have been misappropriated or there is ambiguity in the claim of expenses, the same can be taken care of at the time of assessing the income and the additions involving such issues can be made but for the remaining income of the society, benefit of exemption u/s. 11 of the Act cannot be denied.
We are inclined to follow the decision of Shri Jairam Education Society [2021 (10) TMI 911 - ITAT INDORE] and the same being squarely applicable on the facts of the instant case hold that PCIT erred in cancelling the registration granted to the assessee u/ss. 12A and 12AB of the Act solely on the ground of alleged documents even when the activities of the assessee trust are found to be genuinely carried out are charitable in nature and are in accordance with the objects of the trust and addition if any emanating out of the seized record can be taken care by the Assessing Officer in the assessment proceeding.
Conclusion:-
PCIT erred in cancelling the registration granted to the assessee u/s. 12A on 16.02.2001 and also erred in cancelling the registration granted u/s. 12A r.w.s.12AB of the Act for period 01.04.2021 onwards. Accordingly registration granted u/s. 12A of the Act and u/s. 12A r.w.s.12AB of the Act stands restored.
Allow the Grounds raised by the assessee observing that since the assessee is carrying out genuine charitable activities as per the objects of the trust the ld. PCIT erred in cancelling the registration u/s. 12A/12AB of the Act based on some statements recorded during the course of search but subsequently retracted and other seized material which were the subject matter of assessment proceedings undergoing at that point of time and therefore even if any addition is made by the AO, the benefits of registration u/s. 12A/12AB of the Act shall continue to be enjoyed by the assessee for the remaining amount of income earned by it.
Assessee succeeds on Ground further because the ‘specified violation’ allegedly made by the assessee trust cannot be said to be justified because the word ‘specified violation’ has been brought into the Act from 01.04.2022 and the alleged violation are based on the documents and details for the F.Yrs. 2019-20 to 2021-22 which are prior to 01.04.2022.
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2025 (2) TMI 980
Reopening of assessment u/s 147 - Notice after the expiry of 4 (four) years - requirements under section 151(ii)(a) - notice was issued under the old provisions of the Act - scope of new provision/scheme introduced by the Finance Act 2021 - HELD THAT:- AO has completed the reassessment proceedings under old provisions of the Act. Since Section 149 of the Act 1961 requires notice to be issued by Income Tax Authority, therefore, in terms of sub Section (1) of Section 282A it has to be signed by that authority and to be issued in paper form or communicated in electronic form by that authority in accordance with procedure prescribed.
Thus, considering the provisions of Section 282 and 282A of the Act, 1961 and the provisions of Section 13 of the Act, 2000 and meaning of the word "issue" NFAC concluded that firstly notice shall be signed by the assessing authority and then it has to be issued either in paper form or be communicated in electronic form by delivering or transmitting the copy thereof to the person therein named by modes provided in section 282 which includes transmitting in the form of electronic record. Section 13(1) of the Act, 2000 provides that unless otherwise agreed, the dispatch of an electronic record occurs when it enters into computer resources outside the control of the originator.
Thus, the point of time when a digitally signed notice in the form of electronic record is entered in computer resources outside the control of the originator i.e. the assessing authority that shall be the date and time of issuance of notice under section 148 read with Section 149 of the Act, 1961.
In this case, it was observed from the copy of Notice u/s 148 filed by the assessee, that the Notice bears the date 31/03/2021 and the Digital Signature of AO shows the date 'Thursday April 1, 2021 2.27 PM' On the foot note of the said notice, following has been written: "If digitally signed, the date of digital signature may be taken as date of document". In view of the above discussion, NFAC concluded that the impugned notice u/s 148 of the Act shall be treated to have been issued on 01.04.2021 as the same has been digitally signed by the AO on 01-04-2021 and in no case, issue of notice can take place before signing of the same either electronically or otherwise.
Thus, in this case, the reassessment notice was held to be issued on 01.04.2021 and accordingly, new provisions of making reassessment, Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as "TOLA"), ratio of Supreme Court Judgement and consequent CBDT Instruction No. 1/2022 dated 11.05.2022 are made applicable by the NFAC.
DR has failed to establish that the order of NFAC is in any way beyond the principles laid down by the Hon’ble Supreme Court in the aforesaid referred in Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] and Ashish Aggarwal [2022 (5) TMI 240 - SUPREME COURT] The question to be examined is not just about the competence of sanction giving authority u/s 151 of the Act, but the larger issue has been examined by the NFAC and rightly decided against the AO.
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2025 (2) TMI 979
Addition on account of alleged payment of on-money by assessee for purchase of residential unit - AO while alleging payment of on money by the assessee to the builder has taken the difference of actual payment made by the assessee to the builder and the registered value of the property - HELD THAT:- Holding such difference as on money is bizarre. The assessee has made payment for purchase of property from declared and proved sources. All the payments to the builders have been made either from loan account or through banking channel from foreign remittances. The assessee in order to substantiate source of payment has placed on record bank statement and loan disbursement details. Hence, to make addition of difference between actual payment and registered value as on money is unwarranted and without any basis, when the entire amount is paid from declared sources through banking channels. The Revenue has not substantiated assessee’s any undisclosed source of income in India for payment of alleged on money. Decided in favour of assessee.
Addition on the basis of directions of the DRP - HELD THAT:- As per Sub-section (13), once the DRP issues directions, the AO shall in conformity with the directions, complete the assessment without providing any further opportunity of being heard to the assessee within one month from the end of the month in which such directions are received.
The scheme of section 144C does not provide option to the DRP to issue directions to the AO to make further enquiries or verification after DRP directions. Section 144C(7) empowers the DRP to conduct enquiries and verifications on the documents furnished by the assessee during DRP proceedings.
DRP cannot cause the AO to verify documents placed before the DRP before passing the Final Assessment Order. DRP has gone beyond its jurisdiction in giving such directions to the AO, hence, addition made by the AO in Final Assessment Order is without jurisdiction. Ergo, addition is directed to be deleted - Decided in favour of assessee.
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2025 (2) TMI 978
Penalty u/s 271(1)(c) - allegation of defective notice - non specification of clear charge - HELD THAT:- AO initiated the penalty proceedings by issuing the notice u/s 274/271(1)(c) of the Act without specifying whether the assessee has concealed ''particulars of income" or assessee has furnished "inaccurate particulars of income", so as to provide adequate opportunity to the assessee to explain the show cause notice. Rather notices in this case have been issued in a stereotyped manner without applying any mind which is bad in law, hence is not a valid notice sufficient to impose penalty u/s 271(1)(c).'
AO has issued notices under section 274 r.w.s. 271(1)(c) of the Act without striking off the irrelevant words the penalty proceedings shows the non-application of mind by the Assessing Officer and is, thus, unsustainable. Appeal of the assessee is allowed.
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2025 (2) TMI 977
Penalty u/s 271(1)(c) - allegation of defective notice u/s 274 -assessee offered undisclosed income in the statement recorded u/s 132(4) of the Act and paid the due taxes while filing return in response to notice u/s 153A - HELD THAT:- Similar issue has already been dealt with by this Bench in its recent decision in the case of Raj Kumar Agrawal [2024 (8) TMI 1531 - ITAT RANCHI] wherein as contested penalty order u/s 271(1) (c) on alleged defective notice issued u/s 274. The Bench after taking note of the facts of the case and proposition of law as emerging from cited decisions above cancelled all the penalty orders.
As in the penalty notice issued u/s 274 r.e.s.271(1)(c) of the Act, the inapplicable words were not struck off, the levy of penalty therefore is vitiated and is held bad in law. Decoded in favour of assessee.
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2025 (2) TMI 976
Expenses incurred under the head "Public Relation Expenses" - expenditure was not allowable as business expense with the meaning of section 37 - HELD THAT:- In the present case, it is not even the plea of the AO that because the order passed by the Tribunal is under challenge before the Higher Courts, therefore till there is finality on the issue, the approach adopted by it in earlier years was followed.
Thus, we, deprecate such an act of the AO, who is not only a tax administrator but is also discharging the quasi-judicial functions under the Act while completing the assessment of the assessee, and therefore, is required to follow the principles of precedence and not simply follow the earlier years’ approach which has already been overruled by a higher judicial forum.
DR could not show any reason to deviate from the aforesaid order and no change in facts and law was alleged in the relevant assessment year. The issue arising in the present appeal is recurring in nature and has been decided in favour of the assessee by the decision of the coordinate bench of the Tribunal for the preceding assessment years. Ground no.1 raised in Revenue’s appeal is dismissed.
TDS u/s 195 - Disallowance made u/s 40(a)(i) - share services expenses paid to BASC, which is situated in Malaysia - HELD THAT:- We find that while considering a similar issue in assessee’s own case for the assessment year 2008-09, the coordinate bench of the Tribunal following the decision of the coordinate bench of the Tribunal in the case of the assessee’s sister concern in DCIT v/s BASF Catalyst India Private Limited [2016 (11) TMI 1765 - ITAT CHENNAI] held that the provisions of section 40(a)(i) of the Act are not applicable to the payment made to BASC for rendering Finance and Accounting and Human Resource services. Ground no.2 raised in Revenue’s appeal is dismissed.
Nature of expenses - Disallowance of expenditure incurred on “Product Registration” - AO following the approach adopted in preceding years disallowed the product registration expenditure after granting depreciation at the rate of 25% - HELD THAT:- We find that the coordinate bench of the Tribunal while considering a similar issue in the assessee’s own case for the assessment year 2008-09, dismissed the Revenue’s appeal and held that the product registration expenditure though is a one-time expenditure in relation to a new product, however, cannot be categorised to be capital in nature. Ground no.3 raised in Revenue’s appeal is dismissed.
Dividend Distribution Tax on the dividend declared and paid - HELD THAT:- The issue arising in the assessee’s cross objection is covered in favour of the Revenue by the decision of the Special Bench of the Tribunal in Total Oil India Private Ltd. [2023 (4) TMI 988 - ITAT MUMBAI (SB)] Accordingly, respectfully following the aforesaid decision of the Special Bench of the Tribunal, the ground raised in the cross objection is dismissed.
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2025 (2) TMI 975
Penalty u/s. 271(1)(c) and u/s. 271AAB of the Act - order u/s 143(3) r.w.s. 153C passed making addition on account of cash expenses on account of bogus purchases expenditure u/s. 69C and bogus labour payment u/s. 69C - HELD THAT:- Irresponsible noting by ld. Assessing Officer despite having findings of the Coordinate Bench on the quantum additions on record, reflects absence of fundamental understanding of judicial discipline, while taking up penalty proceedings. The table produced in impugned penalty order, for all the additions made by the ld. AO have been either reduced to a lower percentage from the percentage at which the addition was made or have been deleted in toto.
As in the case of addition for cash expenses on account of “site expenses”, AO made the addition by applying 50% of the expenses which was reduced by CIT(A) to 35% and was subsequently reduced to 20% by the Coordinate Bench. Similar is the case for other expenses and payments for which additions have been made.
Even the first appellate authority, despite taking record of partial relief to the assessee in terms of the findings as stated above has observed that there appears to be a malafide intention of the assessee and “mens rea” is present in the case. He concluded to uphold the penalty so imposed on account of furnishing inaccurate particulars of income by the assessee.
As noted both by AO and CIT(A), tabulated above that additions sustained are purely on estimate basis. The issue before us is no longer res integra and it is a settled law that in the said factual position, penalty is not imposable on additions sustained on estimate basis. It is an accepted fact that whenever an addition is made on the basis of estimate, penalty u/s. 271(1)(c) is not leviable. There is no scope to levy penalty under the said section. Accordingly, in the given set of facts, the penalty levied u/s. 271(1)(c) is deleted.
Penalty as imposed u/s. 271AAB also deleted as same observations above - Appeal decided in favour of assessee.
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2025 (2) TMI 974
Rectification of mistake u/s 154 - Double taxation of the same interest income - same interest income had already been offered to tax earlier on accrual basis - contention of the Revenue is that the intimation u/s 143(1) was processed as per the details/information stated in the return of income for the AY 2012-2013 and the details of TDS available in form 26AS - HELD THAT:- There was no mistake apparent on record. It is settled legal position that same income cannot be taxed twice in the hands of the Assessee, once on accrual basis and then again on receipt.
Given the peculiar facts and circumstances of the present case, the technicalities ought not to obscure justice. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law.
AO must not take advantage of ignorance of the assessee as to his rights [Circular No. 114 XL-35 of 1955 issued by the Central Board of Direct Taxes, dated 11/04/1955].
Accordingly, we direct the AO to verify that the income as reflected in form 26AS for the AY 2010-2011 and 2011-2012 has been offered to tax as income for the Assessment Year 2010-2011 and 2011-2012, respectively.
In case the on verification, the aforesaid is found to be correct, the AO is directed to recomputed the taxable income of the Appellant for the Assessment Year 2012-2013 by reducing from the aggregate interest income earned by the Appellant on CCDs for the AY 2010-2011, 2011-2012 and 2012-13 the amount of interest income already offered to tax for the Assessment Years 2010-2011 and 2011-12. The Assessing Officer is also directed to grant credit of TDS corresponding to the aforesaid income.
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2025 (2) TMI 973
Addition u/s 43CA - difference between the market value and the agreement value - assessee has sold 12 flats for a total consideration leass than market price of the same as pointed out by the Auditor in the audit report - HELD THAT:- A perusal of the assessment order shows that the dates of booking of 12 flats in question were much prior to the dates of registration. A perusal of the details filed by the assessee in the paper book shows that in all the 12 cases the market value (Govt. value) is more than the agreed value as on the date of booking.
Since there is a long gap between the date of booking and the date of sale, therefore, the market price (Govt. value) has gone up. Merely because the Auditor has mentioned in the audit report that the assessee has sold certain flats which is less than the market value (Govt. value), the same cannot be the basis for addition without looking to the clear provisions of the Act
AO himself has reproduced the details filed by the assessee in the body of the assessment order which clearly shows the gap between the date of booking and the date of agreement. The documents clearly show that the market value i.e. Govt. value as on the date of booking was less than the agreement value as on the date of booking.
As decided in the case of Kolte Patil Developers Ltd. [2024 (8) TMI 748 - ITAT PUNE] where the Tribunal has decided the issue in favour of the assessee by holding that since the assessee has received a part of consideration as advance as per agreement and the sale deeds were made on the basis of agreement value although the market price has gone up by that time, therefore, in view of provisions of sub-sections (3) and (4) of section 43CA, no addition was called for.
Since, admittedly in the instant case the assessee has received a part of the consideration as advance as per the agreement and the sale deeds were made on the basis of such agreement value, although the market price has gone up by that time, therefore, in view of the provisions of sub-sections (3) and (4) of section 43CA of the Act, no addition is called for. Decided in favour of assessee.
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2025 (2) TMI 972
Revision u/s 263 - as per CIT AO has not made any enquiry about the payments made towards supply of machinery by one of the employees - HELD THAT:- Although the specific information was received by the AO, however, the AO has not made any enquiry about the information so received. Further, the tripartite MoU is only a notarized one and not a registered document. Since the Assessing Officer has not made any enquiry with respect to the above transaction especially the role of M/s. Aarti Enterprises in sharing money with the owner of machinery Dr. M.S. Hiremath, who is the specialist doctor with the assessee, therefore, the order passed by the Assessing Officer, in our opinion, has become erroneous and prejudicial to the interest of Revenue.
The argument of the assessee that it will not make any difference since the assessee is enjoying the benefit of sections 12AA and 10(23C)(via) and therefore the same is not prejudicial to the interest of the Revenue cannot be accepted at this point especially when specific information was received by the Assessing Officer. Whether it will have any impact or not, is a subsequent matter only when the same is examined and there is due application of mind.
Detailed reasoning given by the Ld. CIT(Exemption) for invoking the jurisdiction u/s 263 acceptable. Appeal filed by the assessee is dismissed.
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2025 (2) TMI 971
Penalty u/s 271(1)(c) - defective notice u/s 274 - assessee offered undisclosed income during search operation - HELD THAT:- The assessee contested penalty order u/s 271(1) (c) on alleged defective notice issued u/s 274 of the Act. The Bench in the case of Raj Kumar Agrawal [2024 (8) TMI 1531 - ITAT RANCHI] after taking note of the facts of the case and proposition of law as emerging from cited decisions above cancelled all the penalty orders.
Since the issue in hand which basically hinges on the alleged defective show cause notice issued in terms of section 274 of the Act, we direct the AO to delete the penalty imposed on the assessee. Decided in favour of assessee.
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2025 (2) TMI 970
Disallowance of deduction u/s 80P - interest income earned from cooperative banks - HELD THAT:- We observe that the issue is now settled in favour of the assessee in the case of Shree Madhi Vighag Khand Udyog Sahakari Mandli Ltd. [2025 (1) TMI 767 - GUJARAT HIGH COURT] held that where assessee, a cooperative society, earned interest on investment made with a cooperative bank and claimed deduction u/s 80P(2)(d), since cooperative bank was a cooperative society registered under Gujarat State Cooperative Societies Act, assessee was to be allowed to claim deduction under Section 80P(2)(d) - Appeal of the assessee is allowed.
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2025 (2) TMI 969
Condonation of delay in filing the second appeal - misdeclaration and undervaluation of imported Brass Ceramic Cartridges - HELD THAT:- Admittedly, the Appellant had preferred the appeal before the Commissioner (Appeals) and had engaged the said counsel. The notice for personal hearing was served upon the Appellant as also the Counsel, as is evident from the notice dated 08th January, 2020. The Counsel had also attended the hearing. There was no other alternative address, which the Appellant provided, to the Commissioner (Appeals) for service of the order dated 1st June 2020.
Under such circumstances, the Commissioner (Appeals) cannot be blamed for having sent the order to the earlier address of the Appellant. There has been clear lack of alacrity on behalf of the Appellant, who has not bothered to verify as to whether any order was passed by the Commissioner (Appeals) in the appeal preferred at its instance. This Court is of the opinion, that the duty existed, also, upon the Appellant to check if any order was passed in the appeal.
In the overall facts and circumstances, the Department did not have any other option and has exercised its due diligence in accordance with the procedure. As the Appellant did not provide an alternate address and the Counsel failed to inform the Appellant, the Department cannot be held responsible.
Conclusion - The Department had fulfilled its obligations, and the appellant's lack of diligence contributed to the dismissal of the appeal.
The order of CESTAT does not warrant any interference - Appela dismissed.
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2025 (2) TMI 968
Benefit of concessional rate of Counter Veiling Duty (CVD) on the imports - import of cement bags of 50 kgs retail packing instead of in bulk, not declaring the purpose of import - importers have failed to fulfill the conditions stipulated in the Notification No.4/2006-CE as amended - HELD THAT:- In the instant case, it is an admitted fact by the importer that he did not purchase the cement from the manufacturer directly. It was an high sea purchase from third party. No doubt, the Bill of Entry contain details of the manufacturer, but that is not sufficient to claim concession rate of duty. The concessional rule not only mandates that the purchase must be from the manufacturer directly but also specifies the mode of manufacturing and the capacity of the manufacturer. If the reasoning given by the CESTAT to be accepted, then the condition in Clause IB in the notification which imposes condition about the mode of manufacturing and capacity of the manufacturer will become redundant.
To avail concession rate of duty, it should be purchased directly from the manufacturer who had satisfied the conditions mentioned in the notification. In case of High Sea Sales (HSS), it is not the manufacturer who sell the goods contrarily, it is the Middleman or a Trader for commission who sell the goods. Likewise, clearance of goods by the Examiner of Customs Department will not be a ground to set aside the order of withdrawal of duty concession on the ground of mis-declaration if evasion is found subsequently.
The end use of the cement imported is one of the condition for granting concession rate of duty as per Clause IC. In fact the importer has to file a end use declaration at the time of clearance and any violation of the declaration will come to knowledge of the Revenue obviously only after the misuse of the goods imported for a purpose other than for which it was allowed to be imported at concession rate. In this case, the records reveals that, by way of show cause notice, the department had sought for explanation about the Post- Importation actual user confirmation. The importer has admitted that the cement imported was used for manufacturing Ash brick and sold in the local market. Therefore, it is evident that the cement was not used for institutional/industrial purposes.
Conclusion - The CESTAT erred in allowing the benefit of concessional rate of counter veiling Duty (CVD) to the respondent M/s V.V.Minerals despite gross violation of the concession condition.
The Order in Original is upheld - appeal allowed.
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2025 (2) TMI 967
Absolute confiscation of the seized gold - Seeking issuance of an appropriate writ to amend or review the impugned Compounding Order - HELD THAT:- In view of the fact that the delay was only due to financial difficulties and also considering the value of the gold seized i.e., about 1688.22 grams and 1664.18 grams, the Petitioner is permitted to deposit the amount in terms of the order dated 08th May, 2023.
Petition disposed off.
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2025 (2) TMI 966
Levy of penalty under Section 117 of the Customs Act, 1962 - no evidence of forgery by the appellant - vicarious liability of the appellant - HELD THAT:- The finding of the tribunal sustaining the penalty cannot be sustained. By Annexure-C order, the appeal preferred by the employees against the imposition of penalty on the ground of forgery stands allowed and the order of imposition of penalty has been set aside. It is also brought to notice that by Annexure-D, the report filed by the Investigating Officer before the Judicial First Class Magistrate Court-I, Kochi, in Crime No. 1635/2018 of Harbour Police Station, the appellant has been exonerated from the crime.
A perusal of the order impugned reveals that while the tribunal has found that there are no reasons to sustain the allegations in the show cause notice and thereby interfered with the order of cancellation of the license, it has not assigned any reason for nevertheless sustaining the penalty under Section 117 of the Customs Act. Moreover, when the employees against whom the allegations of forgery were made have been exonerated and the penalty imposed against them has been set aside, we find no reason to sustain the findings of the tribunal that penalise the appellant.
The order of the tribunal sustaining the penalty under Section 117 of the Customs Act cannot be sustained - Appeal allowed.
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2025 (2) TMI 965
Classification of imported goods - Aluminium Foil 50 MIC +- 10% - to be classified under CTH 7607 19 91 of Customs Tariff or not - whether the goods imported by the appellant under AAs are permitted for duty free import under Advance Authorization Scheme? - HELD THAT:- It is not disputed that the importer was issued Advance Authorizations for import of raw material viz. Aluminium Foil to Mic +/-10% for export of Alu/Alu Foil (PVC 60 MIC/OPA 25), the final goods have been exported by the appellant and the competent authority i.e. DGFT has also issued the EODCs in this regard. It has to be appreciated that the DGFT functioning under the aegis of the Ministry of Commerce and Industry is responsible for formulating and implementing the Foreign Trade Policy for promoting India’s exports. The Advance Authorization Scheme is one such scheme under which the appellant has imported the raw material subsequent by exported the final products.
The Hon’ble Supreme Court in Titan Medical Systems Private Limited vs. Collector of Customs, New Delhi [2002 (11) TMI 108 - SUPREME COURT] held that 'As regards the contention that the appellants were not entitled to the benefit of the exemption notification as they had misrepresented to the licensing authority, it was fairly admitted that there was no requirement for issuance of a licence that an applicant set out the quantity or value of the indigenous components which would be used in the manufacture. Undoubtedly, while applying for a licence, the appellants set out the components they would use and their value. However, the value was only an estimate.'
In the instant case also, the licensing authority viz. DGFT has accepted the fulfilment of export obligation and issued 7 Export Obligation Discharge Certificates to the appellant. The 8th was pending at the time of hearing. These EODCs discharge the appellants from any further export obligation. That being the position, the Customs authorities cannot deny the benefit of Customs duty exemption under the notifications governing the Advance Licensing Scheme. The customs authorities, if had been of the opinion that the appellant had violated any of the terms and conditions of the licences, the matter should have been referred to the licensing authority for appropriate action rather than demanding duty in the inputs/raw materials.
Conclusion - The appellant correctly availed the benefits under Notification No. 18/2015-Cus, and the customs authorities could not demand duty based on a reclassification of the imported goods.
Appeal allowed.
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2025 (2) TMI 964
Violation of Section 197 (3), 197 (9) of Companies Act and Rule 7 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - effect of amendment to Section 197 (15) of the Companies Act, 2013, which substituted the expression "punishable with fine" with "penalty," - retrospective effect to offenses allegedly committed before the amendment came into force or not - HELD THAT:- The provisions contained in Section 197 (15) was amended vide Companies (Amendment) Act, 2019 by Central Act No. 22/2019. A bare perusal of the amendment Act is sufficient to come to the conclusion that Section 197 (15) has been substituted by the amended provisions. In this context, in the absence of anything to the contrary in the amendment the substitution of Section 197 (15) vide amendment w.e.f. 02.11.2018 would relate back to the date of original provision of the year 2013 and in the light of the undisputed fact that the alleged offences are said to have been committed in the year 2016, it is opined that the amended provision of Section 197 (15) would not apply even in relation to the offences said to have been committed in the year 2016.
Under these circumstances, having regard to the amendment to Section 197 (15) vide amended Act, 2019, Central Act No. 22/2019 w.e.f 02.11.2018, the impugned proceedings as against the petitioner clearly are not maintainable and same deserves to be quashed.
Conclusion - The amendment to Section 197 (15) of the Companies Act, 2013, applies retrospectively, thereby affecting the maintainability of proceedings initiated under the pre-amendment provisions.
The complaint and order of cognizance against the petitioner on the file of the Special Court for Economic Offences, Bengaluru are hereby quashed - Petition allowed.
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2025 (2) TMI 963
Approval of Resolution Plan - viability and feasibility of the plan - principle argument of the Promoter is that the plan is not implementable within 9 months and neither it is viable and feasible - HELD THAT:- Plan is not implementable within 9 months is not an issue which can be decided at the time of approval of the plan. The question that the plan cannot be implemented within 9 months is the question which can be raised after expiry of the period as contemplated in the plan.
In so far as viability and feasibility, it is the commercial wisdom of the CoC to take a decision on viability and feasibility of the plan. The CoC having approved the plan with 100% voting, the CoC deemed to have adverted to the viability and feasibility of the Resolution Plan. The scope of interference in an order approving Resolution Plan is too limited for the Adjudicating Authority and this Appellate Tribunal which is well settled proposition - there are no good ground to interfere in the order approving the Resolution Plan at the instance of the Promoter.
Appellant who is one of the homebuyers has to go with the majority decision of the homebuyers and cannot be allowed to question the approval of the plan which is law settled by the Hon’ble Supreme Court in Jaypee Kensington Boulevard Apartments Welfare Association and Ors. Vs. NBCC (India) Limited & Ors., [2021 (3) TMI 1143 - SUPREME COURT]. The Supreme Court having already held that single homebuyer cannot be allowed to question the approval of the Resolution Plan. He has to sail or sink with the majority decision and in the present case, plan has approved with 100% voting share. Thus on behalf of one lone homebuyer challenge to the Resolution Plan cannot be maintained.
Conclusion - The individual homebuyers cannot challenge the approval of a Resolution Plan when the CoC has endorsed it with a majority vote.
Appeal dismissed.
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