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Showing 221 to 240 of 433132 Records
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2025 (6) TMI 215
Addition u/s 68 - additions made on account of cash deposited in the bank account of the assessee and Cash received as the gifts at the time of marriage - additions have been made and confirmed by the CIT(A) for want of supporting evidences - HELD THAT:- CIT(A) sustained this addition without verifying the correctness of the explanation of the assessee. If, the assessee is able to demonstrate that the amount so collected was duly transmitted to the bank account of company. In that event, it becomes incumbent upon the tax authority to make further enquiry regarding correctness of the claim of the assessee that the amount pertains to the company.
No such exercise has been carried out by lower authorities. We, therefore, set aside the impugned order on this issue and restore the issue of taxability in the hands of the assessee to the file of the assessing authority to decide it afresh after verifying the correctness of the claim of the assessee that such amount belongs to the company namely M/s. Sewa Developers Pvt Ltd. It is also noticed that a letter by the M/s. Sewa Developers Pvt Ltd is placed on record by the assessee which confirmed the claim of the assessee that the amount was received by the company. Thus, looking to the totality of the facts, the issue is restored to the AO for verification of claim.
Amount as received as a gifts from various persons at the time of marriage -The contention of the assessee has been rejected by the lower authorities purely on the basis that such contention is not supported by any credible evidence and is based upon a concocted story. We do not completely agree with the decision of the lower authorities making and sustaining the addition of the entire amount. It is a common practice that at the time of marriage some gifts in cash or kind is given to the bride groom. Hence such plea of the assessee that he received gifts from the various persons cannot be completely discarded.
Assessee has supplied only list of persons without giving the complete address and details, the gifts received are estimated to be 50% of the gifts claim by the assessee. We, therefore, restrict the addition to the extent of 50% of the total gifts.
Appeal of the assessee is partly allowed for statistical purposes.
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2025 (6) TMI 214
Characterization of receipt - Focus Product Scheme /Focus Market Scheme - whether treated as capital receipt in computing the total income under the normal provision of the Act as well as in computing the book profit u/s 115JB - AR has submitted that government gave the subsidy to enhance Indian export potential in the international market and the subsidy has to be treated as capital in nature and it was excludable from book profit u/s 115JB - HELD THAT:- It is found that the issue of claim of FPS/FMS as capital receipt received foreign trade policy in computing total income has been dealt by the co-ordinate bench of the tribunal in the case of RSWM ltd. [2024 (2) TMI 278 - ITAT DELHI] wherein as held CIT(A) while deleting the addition relied on the Judgment of Nitin Spinners Ltd. [2019 (9) TMI 1154 - RAJASTHAN HIGH COURT] wherein it was held that the subsidy has to be treated as capital in nature and is excludable from book profit u/s 115JB.
Thus, we held that the assessee is entitled for claim of Focus Product Scheme /Focus Market Scheme as the capital receipt in computing the total income. Ground No 1 is decided in favour of the assessee.
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2025 (6) TMI 213
Deduction u/s.80P(2)(d) - interest income received from a Co-operative Bank - whether the co-operative bank was to be treated as co-operative societies for the purpose of allowing deduction u/s.80P(2)(d)? - HELD THAT:- We find that this issue stands settled by the order of Ashwinkumar Arban Co-Operative Society Ltd [2024 (11) TMI 971 - GUJARAT HIGH COURT] wherein it was held that the deduction of u/s 80P(2)(d) of the Act is available to the cooperative societies on the income earned as interest on the investment made with the cooperative bank which in turn, is a cooperative society itself. Decided in favour of assessee.
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2025 (6) TMI 212
Addition u/s. 69A - basis of information obtained from third-party survey proceedings - onus to prove - as alleged that the assessee had received unexplained cash loans through hundis during the relevant previous year - HELD THAT:- It is settled law that for invoking the provisions of section 69A of the Act, the Revenue must establish that the assessee is the owner or possessor of the alleged unexplained money and that such money has not been recorded in the books of account. In the present case, there is no material brought on record by the Assessing Officer to prove the existence of any actual transaction between the assessee and Shri Pravin S. Shah. No copy of the alleged hundi, no date-wise loan record, no signature of the assessee, and no statement of Shri Pravin S. Shah relied upon by the AO has been brought on record or confronted to the assessee. There is also no evidence to show that any money was found in possession of the assessee or routed through its books.
The entire addition is based on generalized information received from a third-party survey and lacks any evidentiary value in the absence of corroboration. It is trite law that documents found in possession of a third party cannot be used against an assessee unless the material is confronted and opportunity of rebuttal, including cross-examination, is granted.
We also note that the CIT(A) relied upon the CBDT Circular No. 20 dated 07.07.1964, which clarifies that for invoking section 69A of the Act, ownership must be clearly established, and the explanation of the assessee must be found unsatisfactory after due inquiry. None of these preconditions were satisfied by the AO in the present case. The addition was made in a mechanical and arbitrary manner without discharging the burden of proof which squarely lay upon the Revenue. Decided against revenue.
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2025 (6) TMI 211
Reopening of assessment u/s 147 as barred by limitation - addition made towards receipt of foreign income pertaining to previous financial year - HELD THAT:- As per clause (b) to sub-section (1) of section 149 of the Act, the time limit for issuing notice under section 148 of the Act is three years, but not more than ten years. We find that the AO issued notice u/s 148 dated 27.04.2021, whereas, on or after 01.04.2021, the AO was required to issue notice under section 148A of the Act. We note that the reassessment notice issued on or after 01.04.2021 under unamended section 148 in the case of Union of India v. Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] held that the such notice should not be set aside, rather deemed to have been issued under substituted section 148A of the Act. Thus, the prayer of the assessee that the notice issued u/s 148 is barred by limitation under section 149 of the Act stands ruled out.
We also note from the assessment order that by following the guidelines of the Hon’ble Supreme Court, the AO issued order u/s 148A(d) of the Act dated 25.07.2022 by obtaining approval of the competent authority and thereafter, issued notice u/s 148 of the Act dated 25.07.2022 and served on the assessee. Thus, we find that the AO has legally initiated the reassessment proceedings as per amended provisions of section 147 of the Act and completed the assessment under section 147 dated 25.03.2023 and the same stands confirmed. Thus, Grounds No. 5 to 7 raised by the assessee are dismissed.
Receipt of foreign income - Assessment of income earned by the assessee, the shortfall due to foreign income declared by the assessee and the information available with the department, the assessee could not furnish any explanation with documentary evidence before the Assessing Officer as well as before the ld. CIT(A). However, before the Tribunal, the assessee furnished copy of calculation of foreign income tallying with Indian ITR and foreign ITR, ITR Form filed in Norway for calendar year 2015 and Indian ITR Form filed for AY 2016-17 (FY 2015-16) and assessee submitted that the Assessing Officer has incorrectly added the income earned in the previous financial year as income of the current financial year and prayed to delete the addition.
We note that the authorities below have no occasion to verify the details furnished by the assessee before the Tribunal. Considering the above facts and circumstances of the case and to meet the ends of natural justice, we deem it proper to remand the matter to the file of the Assessing Officer to examine and decide the issue afresh.
Appeal filed by the assessee is partly allowed for statistical purposes.
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2025 (6) TMI 210
Revision u/s 263 - PCIT has sought revision of the orders passed u/s. 147 by blindly accepting of the contentions made by the assessee explaining the source of cash deposits in her bank account - HELD THAT:- The assessee was also unable to controvert the findings of the PCIT of there being several anomalies in the manner of conducting business noted by the PCIT, which created doubt about the existence of any sports business carried out by the assessee at all.
During the course of hearing, assessee was asked whether the assessee had in the past ever filed return declaring income from sports trading activities, to which he replied in the negative.
No reason to interfere with the orders of learned PCIT holding the assessment orders passed in the case of the assessee u/s. 147 to be erroneous so as to cause prejudice to the revenue since it is an undisputed fact that the Assessing Officer had accepted the assessee’s explanation of the huge cash deposited in her bank account to the tune of Rs. 3.27 crores in different assessment years as arising from her business activities without a shred of evidence on record in this regard. We are in complete agreement with the ld. PCIT that the impugned assessment orders passed by the AO are without any enquiry and we concur with the ld. PCIT that the orders passed by the AO u/s.147 are erroneous causing prejudice to the interest of revenue. Decided against assessee.
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2025 (6) TMI 209
Rejecting registration u/s 12AB and exemption u/s 80G - rejection due to non-filing of required details and documents - appellant has not filed applications with full details and also documents required to accompanied were also not furnished even though notices and reminders were also issued by Ld. CIT(E).
Appellant filed appeals before the ITAT with delay of 536 days stating that the appellant trust request that the delay may be condoned and grant for one more opportunity to the appellant trust so that the trust can present its case before Ld. CIT(E) without taking any further adjournment.
HELD THAT:- It is decided to condone the delay, because the Trust is a very old one and as the objects were genuine and returns of income were regularly filed coupled with the facts that the trustees were aged people who are not conversant with the email communication and remit the file back to Ld. CIT(E) to decide the issues of registration and exemption on merits. The appellant trust is directed not to ask for further adjournment and necessary documents and evidences may be furnished to get approval under section 12AB and exemption under section 80G of the Act.
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2025 (6) TMI 208
Assessment u/s 153A - Difference of incriminating documents extracted from the Hard Disc seized from the premise of the assessee and the income declared by the assessee in return of income - unexplained investment u/s 69 - HELD THAT:- Although out of the search conducted on 03.11.2016 the addition has been made. However, the alleged incriminating material was not found in the search of the assessee, but, was found in the search of an independent and altogether distinct taxable entity and the admissions of that taxable entity if were to be relied qua the assessee, then, the assessments should have been on the basis of the satisfactions recorded for the purpose of section 153C. Thus, on this ground alone the impugned additions deserves to be quashed. There was certainly illegality in invoking the provisions of section 292C of the Act qua this disputed document found at the residence of Mr. Praveen Tyagi and to conclude assessment u/s 153A of the Act.
Contention of the ld. DR to support the observations of the ld.CIT(A) that opportunity to cross-examine was not sought specifically and otherwise relevant materials was shown to the appellant during the course of assessment proceedings do not advance the cause of justice to hold that separate opportunity of cross-examination is not required to be given. In a case where a liability is being created merely on the basis of statement and conduct of another taxable entity, then, by citing the relevant material to the present assessee is not sufficient. Indeed, cross-examination is not an absolute right, but, where before the ld.CIT(A) a specific ground has been raised of not providing opportunity of cross-examination of material witness and the ld. CIT(A) proceeds to call for a remand report, then, certainly, the tax authorities below could have come forward and offered their sole witness for cross-examination.
Certainly, that would have given the assessee an opportunity to put across the case that the flat in regard to which the alleged ‘on money’ payment was made stands cancelled and even the advance amount stands forfeited. Thus, on the basis of the aforesaid discussion, not only on the legal aspect of assumption of jurisdiction u/s 153A, but, otherwise on merits too, we are not inclined to sustain the addition. The grounds No.1 and 3 to 9 as raised by the assessee in its appeal are allowed.
We find that the CIT(A) has primarily benefitted the assessee on the basis of the remand report wherein the AO himself was satisfied with the evidences of the assessee. Now, only because during assessment proceedings the assessee had not provided these evidences in remand report the AO had objected for admission of same, that cannot be the basis for sustaining the addition and, accordingly, the additions deleted by the CIT(A) require no indulgence. The grounds of the Revenue have no substance.
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2025 (6) TMI 207
Seeking a direction to the Customs Department to release the goods being two gold bangles weighing about 58 grams belonging to the Petitioner - detention without issuing a show cause notice (SCN) or granting a personal hearing to the Petitioner - violation of principles of natural justice - HELD THAT:- It is noted that no SCN has been issued in this case as the Customs Department is relying on the standard pre-printed waiver that was obtained from the Petitioner. The validity of such pre-printed waiver of show cause notices and personal hearing has been considered by this Court in various matters, including in Amit Kumar v. The Commissioner of Customs, [2025 (2) TMI 385 - DELHI HIGH COURT] and Mr Makhinder Chopra vs Commissioner of Customs New Delhi [2025 (3) TMI 19 - DELHI HIGH COURT] where it was held that 'This Court is of the opinion that the printed waiver of SCN and the printed statement made in the request for release of goods cannot be considered or deemed to be an oral SCN, in compliance with Section 124. The SCN in the present case is accordingly deemed to have not been issued and thus the detention itself would be contrary to law. The order passed in original without issuance of SCN and without hearing the Petitioner, is not sustainable in law.'
Thus, the law is well settled, that the Customs Department cannot rely on pre-printed waiver of show cause notice as the same would be contrary to the requirement of Section 124 of the Act. In light of the above discussions, it is clear that the continued detention or seizure of goods by the Customs Department would be untenable in law, where the show cause notice or the personal hearing have been waived via a pre-printed waiver.
Conclusion - In the facts of this case, since no show cause notice has been issued to the Petitioner due to a pre-printed waiver, the detention is set aside. The detained articles would be liable to be released to the Petitioner.
Petition disposed off.
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2025 (6) TMI 206
Failure of Customs Broker to fulfil obligations as required under CBLR, 2018 - appellants CB firm had played the role of facilitating fraudulent exports by mis-use of Factory Stuffing permission, forgery of customs documents with the intention of availing undue drawback and other export incentives in a fraudulent manner.
Violation of Regulation 10(a) - allegation is that appellants CB was neither in contact with the exporter nor verified whether the exporter had issued such authorisation to the intermediary - HELD THAT:- The impugned exports involving alleged fake Factory Stuffing Permission were exported through two Shipping Bills No. 2014912 and 2014929 both dated 02.11.2016, which had been duly processed at the port of export by the Customs authorities. Thereafter, voluntary statement from Shri Tarun Jain, proprietor of the export firm M/s Abhinandan Industries was recorded. Subsequently, Shri Lalit Krishna Kotian, Director of the appellants CB firm was called for participating in the investigation only on 05.12.2016 for recording his statements under Section 108 of the Customs Act, 1962. However, the action under CBLR was taken only after passage of long time on 15.12.2022. Further, the allegation against the exporter is that they attempted to avail ineligible export incentives such as Drawback, export incentives upon export of goods and that the appellants CB firm had played active role. However, it is also seen from the submission made by the appellants that they have not been imposed with any penalty on account of such export violations. Thus, it is seen that alleged ineligible availment of export benefits is solely on account of the action taken by the exporter such as filing wrong declaration for claiming ineligible export incentives or the failure on the exporter to obtain export proceeds within a reasonable time frame. There is no role of Customs Broker in the above activities of the exporter.
In the absence of any document to prove the claim of mis-declaration of export goods, the findings given by the learned Principal Commissioner of Customs in the impugned order that the appellants has aided and abetted the exporter in availing ineligible export incentives, is difficult to be proved for fastening such liability on the appellants CB for holding them responsible for violation of Regulation 10(a) ibid.
Violation of Regulation 10(d) - HELD THAT:- In the instant case, the ineligible claim for export incentives was found by the department only on the basis of specific investigation conducted by the CIU of JNCH customs authorities, and hence the appellants CB cannot be found fault for the reason that they did not advise their client exporter to comply with the provisions of the Act - when the customs authorities were not aware of the non-genuineness of the documents, there is no possibility for the appellants CB to be aware of the same, and to bring it to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC) about the mis-declaration of exported goods. Thus, the violation of Regulation 10(d) ibid, as concluded in the impugned order is not sustainable.
Violation of provision of Regulation 10(n) ibid - HELD THAT:- CBIC had issued instructions in implementing the KYC norms for verification of identity, existence of the importer/exporter by Customs Broker in Circular No. 9/2010-Customs dated 08.04.2010, and verification of any two documents among specified documents is sufficient for fulfilling the obligation prescribed under Regulation 10(n) of CBLR, 2018. It is found that in the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department. Thus, there are no legal basis for upholding of the alleged violation of Regulation 10(n) ibid by the appellants in the impugned order on the above issue.
Hon’ble High Court of Delhi has held in the case of Kunal Travels (Cargo) Vs. Principal Commissioner of Customs (I&G), IGI Airport, New Delhi [2017 (3) TMI 1494 - DELHI HIGH COURT], the appellants CB is not an officer of Customs who would have an expertise to identify mis- declaration of goods.
Conclusion - There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revocation of the CB license of the appellants; for forfeiture of security deposit and for imposition of penalty, inasmuch as there is no violation of regulations 10(a), 10(d) and 10(n) ibid, and the findings in the impugned order is contrary to the facts on record.
The impugned order is set aside - Appeal allowed.
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2025 (6) TMI 205
Seeking amendment of Bills of Entry under section 149 of the Customs Act - import of different varieties of fabric - claim CVD exemption in terms of Notification No.30/2004-CX - correction of clerical errors - HELD THAT:- We note, from records that the orders of the adjudicating authority, as discussed in appeal order is well reasoned, coherently amplifying the grounds on which basis, provisions of Section 149 and Section 154 of the Customs Act cannot be resorted to and made applicable to the issue herein. The appellant had themselves filed the import bills in the manner as aforestated. It is apparent that there is no arithmetical or clerical mistake in the assessments so done. The assessment without the claim for exemption benefit, is indeed a consequence of the conscious action taken, at the time of import. Irrespective of the fact of whether it being the right or wrong course of action, it cannot be considered as an error arising from an accidental slip or omission in the decision or order of the assessing authority, hence the question of invoking the provisions of Section 154 for correction of clerical/arithmetical error cannot be applied to in the present matter.
Amendment is no substitute to assessment/re-assessment and cannot replace it, as the two terms apply in different context, have distinct overtones and outcomes in law. Amendment alone of import/export documents may not be sufficient in seeking the desired results. The two terms are not interchangeable. To derive the intended objective, the amended document, if any, would be required to be re-assessed in the light of such an amendment which alone can be done, once the assessment order is set aside by a direction from the superior authority.
Suo moto of one’s own accord, the authority cannot in itself undertake any re-assessment, having been rendered as functus officio. This logic and discourse also seeks to not only bring about the assigned objective and give a meaning to the different provisions of the statute like Section 17 (Assessment/Reassessment related), Section 128/Section 129 (Appeal related, Section 149 (Amendment related) and Section 154 (Correction of clerical errors related), it also defines the individuality and relevance of each of the provisions without reducing any of such a provision to dead wood. Also any interpretation outsmarting one provision against the other is bound to create chaos and confusion.
In view of our findings above, we are of the view that the route sought to be adopted by the Ld. Counsel by seeking amendment in terms of Section 149, that too after a prolonged period of several years for an omission made by them cannot be justified. As discussed above amendment and assessment/re-assessment signify two clearly distinct connotations importing distinct and separate meanings and encompassing different areas of action. We are thus not able to appreciate any merit in the view as canvassed by the Ld. Counsel.
An amendment simplicitor cannot lead to the consequence of demand of duty or a claim for refund, for which the original assessment done is required to be reversed by a process as known to law, as also held by the hon’ble apex court in the ITC Ltd. case, we also would like to put it on record, that the ld. Commissioner has thus completely erred in directing the lower authority to “consider the amendment of the Bill of Entries”.
There is nothing for consideration of the amendment, as merely carrying out the amendment is of no consequence unless the Bills of Entry are re-assessed. None of the earlier assessments have been appealed at all; the outcome of such an amendment continues to hold fort, till such time it is set aside by the appropriate authority and a fresh assessment done revisiting the earlier assessment.
Thus, we are of the view that the order of the ld. Commissioner(Appeals) is not in accordance with law and is therefore set aside.
The appeals filed by the department are allowed.
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2025 (6) TMI 204
Time limitation for issuing SCN - SCN issued after a period exceeding five years from the date of export is barred by limitation under the Customs Act, 1962 - submission of false and fabricated documents - Levy of penalty u/s 114(iii) of the Customs Act, 1962 for excess claim of duty drawback - HELD THAT:- The main allegation against the appellants is that they were involved in submission of false and fabricated documents and filing of false declarations with regard to quantity and value of stainless-steel articles exported in order to claim excess duty drawback. In the case of Mr. R.V. Shanmugam, Proprietor of M/s. Ayyappan Industries and others, it was alleged that with an intention to defraud the Government exchequer, these exports have contravened the provisions of Sec. 50(2) of Customs Act, 1962 read with Rule 12(1) of Drawback Rules and thus becoming liable for penal action under Section 114(iii) of the Customs Act, 1962. However, investigations conducted indicated that no drawback was sanctioned. Post export there was an attempt to reconstruct the Shipping Bills.
These cases can be decided on limitation itself without going into the merits as the fundamental questions raised by the appellants are whether the entire proceedings are barred by limitation and whether the delay caused in adjudication would render the entire proceedings void.
Even on invocation of larger period, the maximum time limit prescribed by the Customs Act is only 5 years for issuance of any Show Cause Notice proposing demand of duty or confiscation or imposition of fine and penalties. Any proceedings initiated under the Customs Act beyond the time limit have to be held invalid and void. In the case of Usha Stud & Agricultural Farms Pvt. Ltd. & Others Vs. Commissioner of Customs, New Delhi [2011 (5) TMI 604 - CESTAT, NEW DELHI], it was held that as the Show Cause Notice was served after expiry of 5 years, the entire proceedings proposing confiscation on the allegation of undervaluation and imposition of penalty held as not legal and proper. Though Section 124 of the Customs Act does not specify time limit, the same cannot exceed the maximum time of limit for 5 years prescribed under Section 28 of the Customs Act, 1962.
Further, it is also seen that in these appeals, the Adjudication has got completed after lapse of 8 years after issuance of the Show Cause Notice which is now a well settled legal position by various Courts that such huge latches would render the entire proceedings void - In the case of Shri Balaji Enterprises Versus Additional Director General New Delhi & Ors. [2024 (12) TMI 1208 - DELHI HIGH COURT] dated 19.12.2024 it has been held that there existed no reason for non-adjudication of the Show Cause Notice and ordered to set aside the same.
In the present appeals, the details of the Shipping Bills are (i) M/s. Ayyappan Industries, Shipping Bill Nos. 806 to 816 dated 18.06.2005 (ii) Shri J.S. Babu Inc. Nos. 743 to 752 dated 14.06.2005 and Nos. 796 to 805 dated 18.06.2005 and (iii) M/s. Samy Metal Industries Nos. 687 to 694 dated 10.06.2005 whereas the Show Cause Notice was issued in 29.09.2011 for the exports effected in June 2005 which is after more than 6 years and whereas the adjudication has happened after lapsing of more than 8 years on 25.03.2019. As such, the Show Cause Notice issued is time barred and the delay caused in adjudication that Show Cause Notice is not reasonable and cannot be justified.
As there are huge latches by unduly delaying the adjudication, and as the Show Cause Notice was issued after elapsing of more than six years period from the time of exports, the impugned Order-in-Original passed by Commissioner of Customs (Preventive), Tiruchirappalli cannot be sustained insofar as the imposition of penalty on the appellants is concerned. And so, penalties imposed on the Appellants in these appeals are ordered to be set aside.
Conclusion - i) Even though Section 124 does not specify a time-limit, the same cannot exceed the maximum time-limit of five years prescribed under Section 28 of the Customs Act. ii) Where the Show Cause Notice is issued beyond the prescribed limitation period and adjudication is delayed unreasonably, the entire proceedings become void ab initio. iii) No penalty can be imposed under Section 114(iii) without establishing that the goods are liable for confiscation under Section 113.
Appeal allowed.
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2025 (6) TMI 203
Levy of customs duty - FOB value on export of iron ore fines considering the same as cum-duty value - HELD THAT:- The issue is no longer res integra as has been decided in catena of rulings against the Appellant/Assessee holding that Cum Duty Value cannot be used for arriving the value for levy of export duty.
Reliance can be placed in SESA GOA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GOA [2018 (3) TMI 1884 - CESTAT MUMBAI] and M/S ESSEL MINING & INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., CUSTOMS &SERVICE TAX, BBSR-I [2017 (4) TMI 87 - CESTAT KOLKATA].
The impugned order upheld - appeal dismissed.
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2025 (6) TMI 202
Initiation of winding up proceedings under Section 271 and 272 of the Companies Act, 2013 against M/s Blackberry Projects Private Limited - sufficient cause to condone the delay in filing the appeal beyond the statutory limitation period prescribed under Section 421 of the Companies Act, 2013 - HELD THAT:- The appellant at two places in para 5 of the IA No. 1324 of 2024 and in list of dates at page 6 and 7 of the appeal paper book has admitted that the copy of the impugned order was communicated to him by the official liquidator on 02.11.2023. If the limitation is counted from the date of the order, more than 200 days have elapsed. Even accepting the best case of the appellant that he had come to know of the impugned order on 02.11.2023, it is found that the appeal has been e-filed on 08.02.2024, which is beyond the period of 90 days. It is noted that in the list of dates, the date of appeal is given as 05.02.2024. The date given in the memo of parties at page 2 of the appeal paper book is 02.02.2024. As per the Registry, the appeal was e-filed on 08.02.2024. The claim of the Learned Counsel for the Appellant that the appeal was filed on 30.01.2024 is not borne out from the records and is not correct.
According to the provisions of Section 421 of the Companies Act, 2013, the limitation for filing of appeal is 45 days which can be extended by a further period not exceeding 45 days, if the Tribunal is satisfied that the appellant was prevented by sufficient cause from filing the appeal within time - Even if the contentions of the appellant are accepted that the impugned order was received by him on 02.11.2023, it is found that there is delay beyond condonable period in filing the present appeal. If the period from 02.11.2023 to 08.02.2024 is counted, it comes to delay of 54 days, beyond the statutory limitation of 45 days.
Conclusion - On seeing the provisions of Section 421 empower this Tribunal to condone the maximum delay of 45 days in filing the appeal, beyond the period of 45 days initially allowed. It is also found that no sufficient cause has been given by the appellant in its IA for condonation of delay. Even otherwise, the period of delay is 54 days, which is beyond the powers of condonation of this Tribunal.
Appeal dismissed.
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2025 (6) TMI 201
Challenge to modification of the 'Appointed Date' in the Impugned Order by the Ld. NCLT without providing any reasons or opportunity to the Appellant and without any objections raised by any authority - violation of principles of natural justice - HELD THAT:- Admittedly the Scheme shall come into operation only upon completion of the conditions given under Clause 35.1, of which conditions under (d) and (f) are yet to be completed. The impugned order though allowed the Scheme but changed the appointed date as to the date of passing of the impugned order - The appellant is aggrieved of the fact while the Ld. NCLT granted permission to the scheme of amalgamation as proposed by the petitioner company and held the scheme of amalgamation shall be binding by the petitioner company its shareholders and creditors yet changed the appointed date in para 14(i) of the impugned order whereas it had no authority to do so.
On perusal of Clauses of the Scheme, more specifically, its Clauses 1.1.2 viz Appointed date; 1.1.3 viz the Effective Date it means the last of the dates on which all the conditions and matters referred to in Clause 35.1 of the Scheme have occurred or have been fulfilled or waived in accordance with this Scheme and that as submitted Clause 35.1 (d) and (f) shall soon be fulfilled and thus any change of the appointed date of amalgamation at this stage would certainly affect calculations made by the companies and would have serious financial implications. Thus the appeal is allowed holding the appointed date shall be date as fixed by the Scheme per Clause 1.1.2 and 1.1.3 read with Clause 35.1 above and it shall not be “from the date of the impugned order” as is mentioned in para 14 of the impugned order by the Ld. NCLT. The impugned order to such an extent is modified.
Conclusion - i) The appointed date shall be the date as fixed by the Scheme per Clause 1.1.2 and 1.1.3 read with Clause 35.1 above and it shall not be 'from the date of the impugned order' as is mentioned in para 14 of the impugned order by the Ld. NCLT. ii) Modification of the 'Appointed Date' without justification or opportunity to the parties, especially when it affects financial and legal outcomes, is impermissible.
The appeal is disposed off.
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2025 (6) TMI 200
Locus standi of suspended board members of the Corporate Debtor to challenge the approval of the Resolution Plan under Section 61 of the Insolvency and Bankruptcy Code, 2016 - Resolution Plan fails to address provident fund dues - specific amount and the manner of distribution has not been provided in the approved Resolution Plan - discretion has been given to the Respondent No. 4 to distribute the such funds to the employees - HELD THAT:- The liquidation value of the Corporate Debtor has been stated to be Rs. 294 Crores, whereas the claims of the Secured Financial Creditor having first charge on the assets of the Corporate Debtor is Rs. 567.93 crores and other Secured Financial Creditor’s having residual charge was the assets of the Corporate Debtor is Rs. 60.37 crores. Thus, after satisfying the claims of these Secured Financial Creditors, no amount remains in the kitty based on the liquidation value of the Corporate Debtor which could have been allocated to other Operational Creditors like workers/ employee as well as Unsecured Financial Creditor.
It is important to understand that the Resolution Plan cannot be approved by the Adjudicating Authority under Section 30 (2) (b) r/w Section 31 of the Code unless a minimum payment is made to the Operational Creditor, dissenting Financial Creditors, which cannot be less than as per Section 53 i.e., related to liquidation value - This Appellate Tribunal in earlier case of Central Bank of India Vs Resolution Professional Of the Sirpur Paper Mills Ltd. & Ors. [2018 (9) TMI 1771 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] has clarified that as long as two or more Financial Creditor's or two or more financial and operational Creditors are not similarly situated then there is no discrimination between them under a Resolution Plan. This makes it clear that the amount provided in the Resolution Plan to Operational Creditor or dissenting Financial Creditors cannot be less than liquidation value of Corporate Debtor.
There is no scope for the Adjudicating Authority or this Appellate Authority to proceed on any equitable assumptions and presumptions to assess the resolution plan on the basis of quantitative analysis. We understand that the power of judicial review in Section 31 of the Code is not akin to the power of a supervision jurisdiction to deal with the merits of the decision of any lower judicial authority. The jurisdiction to decide as to what ought to be the terms of the resolution plan is vested on the CoC alone, who has to take such a decision in its commercial wisdom, while keeping in view the applicable provisions and the specified parameters.
Conclusion - i) The suspended board members do not qualify as persons aggrieved under Section 61 of the Code to challenge the Resolution Plan approval. ii) The Resolution Plan's allocation to employees/workmen, though less than admitted claims, was a valid commercial decision exceeding minimum liquidation entitlements and that discretionary distribution within that class does not violate statutory provisions. iii) The commercial wisdom of the CoC is sacrosanct and not subject to re-assessment by courts or tribunals. iv) The Impugned Order dated 18.12.2023 upheld, dismissing the appeal for lack of merit and locus standi of the Appellants.
There are no error in the Impugned Order. The Appeal devoid of any merit stand rejected.
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2025 (6) TMI 199
Violation of principles of natural justice - preferential transactions under Sections 43 and 44 of the Insolvency and Bankruptcy Code - submission of the Appellant the order is ex-parte cannot be accepted since notices were issued on the application and the Appellants have filed their reply - HELD THAT:- The Adjudicating Authority has categorically held in Para 4.3 the transactions were not made in ordinary course of business. It is relevant to notice that with regard to one transaction where there was explanation, in Para 3.3, it was held to be not covered under Section 43. The Appellant being related party and payments were made from the Corporate Debtor’s account to the Appellant during the look back period, there are no error in the finding of the Adjudicating Authority that payments were not in the ordinary course of business.
Conclusion - The payments made to related parties during the look back period were preferential transactions under Section 43 of the I&B Code, not exempt under the ordinary course of business exception, and must be refunded to the Corporate Debtor. The procedural contention of ex-parte order was rejected.
There is no merit in the Appeals. Appeals are dismissed.
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2025 (6) TMI 198
Seeking a dissolution under Section 54 of the IBC, 2016 - sale of assets of the corporate debtor (CD) was made as a slump sale or as a sale of assets individually - HELD THAT:- When the statute requires endeavour to sell the CD as a going concern and adjudicating authority has observed that decision of the stakeholder’s consultation committee to sale as slump sale was against the objective of the IBC, by making which observation the adjudicating authority has rejected the application for dissolution of the CD filed by the liquidator, no exception can be taken to the order of the Adjudicating Authority.
In the facts of the present case, the orders passed by adjudicating authority rejecting the dissolution application as well as application for liquidator to recall the order granting relief and concession thus need no interference in the exercise of appellate jurisdiction by this Tribunal.
Conclusion - The purchaser's entitlement to reliefs and concessions stands, the sale is effectively a going concern sale, and the liquidator's applications for dissolution and recall of reliefs are rightly rejected.
The order of the adjudicating authority affirmed - appeal dismissed.
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2025 (6) TMI 197
Validity of sale conducted by the Financial Creditor under the SARFAESI Act, 2002, after the commencement of the Corporate Insolvency Resolution Process (CIRP) and during the moratorium period under Section 14(1)(c) of the Insolvency and Bankruptcy Code (IBC) - amendment to Section 13(8) of the SARFAESI Act - HELD THAT:- In the present case, Nagpur Nagrik Sahakari Bank Ltd. issued various public notice for auction and in pursuance of the auction notice issued on 17.11.2019 the successful bidder has submitted its bid on 02.12.2019. Successful bidder after receipt of sale confirmation made the payment on 17.12.2019. The submission which was relied by the Adjudicating Authority of the Suspended Director for allowing the application was that sale was not completed till 03.02.2020, and since CIRP was admitted on 21.01.2020 the sale is in violation of Section 14(1)(c) of the Code.
This Tribunal in its judgment Pratibha Industries Limited [2025 (4) TMI 519 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] has considered the effect of an amendment of Section 13(8) of the SARFAESI Act, 2002, and this Tribunal in the above case had held that relationship between the parties i.e. mortgager and mortgagee for the purposes of redemption exist till date of issuance of notice of sale and in the present case notices for auction under Section 13(8) were issued much prior to commencement of the CIRP.
Appeal allowed.
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2025 (6) TMI 196
Dismissal of application under Section 94(1) of the Code by the Adjudicating Authority as not maintainable - whether the Respondent’s claims persisted post-auction or evaluating compliance with Code’s procedural mandates for personal guarantor insolvency? - HELD THAT:- The guarantee agreement dated 23.09.2013 is stated to be continuing and binding personal guarantee on the part of the Appellant in favour of the Respondent. The guarantee agreement, clause 2, further stated that the guarantee is an additional and without prejudice for any security for application which bank may have from the personal guarantor on the principal borrower and for which of rights and remedies in respect of are reserved. The Clause 3 of the guarantee deed categorically mentioned that the guarantee shall be continuing guarantee and shall not be considered as wholly or partially satisfied or exhausted by any payment from time to time made to the bank or any statement of any account or reason of account being created or any other at any time or from time to time. This clause 3 further states that guarantee shall continue in force notwithstanding the discharge of the principals by operation of law. It is noted that similar rights have been accrued in favour of the Respondent bank in clause 4, 5, 6 etc.
From this, it becomes very clear that the Respondent has absolute right to invoke the guarantee agreement signed by the Appellant despite any operation of law and other factors.
Explanation (b) of Section 19 of the Limitation Act,1963 states “debt” does not include money payable under a decree or order of a court. Thus, we note that the term “debt” in the context of Section 19 of the Limitation Act,1963 specifically excludes any money that is payable under a decree or order of a court. In other words, if a court has already passed a decree or order directing the payment of a certain amount, such an amount is not considered a “debt” for the purposes of Section 19 of the Limitation Act,1963 - the amount was recovered by the Respondent Bank due to auction of mortgaged property as a result of decree passed by Debt Recovery Tribunal-II, Ahmedabad. Thus, in terms of Explanation (b) of Section 19 of the Limitation Act,1963, this recovery would not considered as Debt and therefore does not impact/enhance limitation period as pleaded by the Appellant. In fact, this goes against the cause of the Appellant.
Conclusion - The default by the Corporate Debtor and subsequently notice to Appellant invoking the bank guarantee are undisputed. We also note that the bank has issued guarantee which is in nature of continuing and unconditional guarantee which has been legally invoked by the Respondent Bank. It is further observed that the DRT proceedings are under the Recovery of Debts and Bankruptcy Act, 1993. It is reiterated that the action based on to decree passed by the DRT was in respect of the mortgaged property held by the Respondent. Hence, it cannot be case of the Appellant that such recovery shall extend the limitation for personal guarantee given by the Appellant. The argument therefore submitted by the Appellant are not tenable.
There are no error in the Impugned Order. The Appeal devoid of any merit stand rejected.
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