TMI Tax Updates - e-Newsletter
May 15, 2025

Case Laws in this Newsletter:

GST Income Tax Insolvency & Bankruptcy PMLA Central Excise CST, VAT & Sales Tax

TMI Short Notes

1. Examining Renewal Provisions for Tonnage Tax in Indian Shipping Taxation : Clause 231(10)-(11) of Income Tax Bill, 2025 Vs. Section 115VR of Income-tax Act, 1961

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2. Duration and Cessation of Tonnage Tax Option : Clause 231(8)-(9) of the Income Tax Bill, 2025 Vs. Section 115VQ of the Income-tax Act, 1961

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3. Procedural framework for opting into the tonnage tax scheme : Clause 231(1)-(7) of Income Tax Bill, 2025 Vs. Section 115VP of Income-tax Act, 1961

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4. Legal and Practical Implications of Excluding Tonnage Tax Profits from Book Profits in Indian Shipping Taxation : Clause 228(16) of the Income Tax Bill, 2025 Vs. Section 115VO of the Income-tax Act, 1961

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5. Capital Gains taxation on Qualifying Ships : Clause 229(8) to (10) of the Income Tax Bill, 2025 Vs. Section 115VN of the Income-tax Act, 1961

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6. Loss Set-Off and Apportionment in the Shipping Industry : Clause 230(2)-(4) of the Income Tax Bill, 2025 Vs. Section 115VM of the Income-tax Act, 1961

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7. Exclusion of Deductions and Loss Set-Off under the Tonnage Tax Regime : Clause 230(1) of the Income Tax Bill, 2025 Vs. Section 115VL of the Income-tax Act, 1961

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8. Depreciation and Asset Classification under Tonnage Tax : Clause 229(1)-(7) of the Income Tax Bill, 2025 Vs. Section 115VK of the Income-tax Act, 1961

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9. competitive taxation structure for shipping companies : Clause 228(14) and (15) of the Income Tax Bill, 2025 Vs. Section 115VJ of the Income-tax Act, 1961

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10. Simplified and concessionary method of taxation based on the net tonnage of qualifying ships, rather than on actual profits : Clause 228(1)-(13) of the Income Tax Bill, 2025 Vs. Section 115VI of the Income-tax Act, 1961

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Articles

1. FCRA Act & Rules – An Introduction

   By: YAGAY andSUN

2. FCRA Compliance Checklist for NGOs

   By: YAGAY andSUN

3. Legal Entity Identifier (LEI) in the Context of Indian Corporates

   By: YAGAY andSUN

4. Legal Entity Identifier (LEI) – Detailed Overview

   By: YAGAY andSUN

5. Global Trade Hit by Protectionism Amid Tariff War

   By: YAGAY andSUN

6. What India Can Learn from Israel in Managing Its Water Crisis.

   By: YAGAY andSUN

7. Grey Water Management in the Context of India’s Underground Water Crisis

   By: YAGAY andSUN

News

1. Top 10 Trailblazers Empowering the Next Generation

2. PayU Receives Final Authorization from The RBI to Operate as an Online Payment Aggregator

3. Coal import drop of 9.2 pc in Apr-Feb helps save Rs 53,138 cr in foreign exchange

4. Got sanction to prosecute Lalu in land-for-jobs money laundering case: ED to court

5. Changes in Periodic Labour Force Survey (PLFS) from 2025

6. CCI approves the proposed acquisition of shareholding in EPL Limited by Indorama Netherlands B.V.

7. CCI approves the proposed combination involving investment of ~13% of the limited partnership interests by AIPCF VIII A-TE Funding L.P. in Perseus Parent L.P

8. Competition Commission of India approves acquisition by the Knowledge Realty Trust of certain entities belonging to Blackstone Group and/or Sattva Group

9. CCI approves the combination inter alia envisaging demerger of MDO Business of Thriveni Earthmovers into Thriveni Earthmovers and Infra; and acquisition of shares of Thriveni Earthmovers and Infra by Lloyds Metals and Energy

10. Bharati Cement ED arrested in Andhra liquor scam

11. Trump administration rescinds curbs on AI chip exports to foreign markets

12. Customs officials seize painting by Pakistani artist at Delhi's IGI Airport

13. CBI arrests five accused including a Commissioner of Income Tax, Hyderabad and four others immediately after handing over bribe of Rs. 70 Lakh meant for said Commissioner

14. Advisory on Appeal withdrawal with respect to Waiver scheme

Notifications

Income Tax

1. 47/2025 - dated 13-5-2025 - IT

Exemption from specified income U/s 10(46) of IT Act 1961 – ‘Telangana State Pollution Control Board’

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/67 - dated 14-5-2025

Investor Charter for Registrars to an Issue and Share Transfer Agents (RTAs)

2. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2025/68 - dated 14-5-2025

Composition of the Internal Audit team for CRAs

3. SEBI/HO/AFD/AFD-PoD-1/P/CIR/2025/066 - dated 13-5-2025

Extension of timeline for complying with the certification requirement for the key investment team of the Manager of AIF

Customs

4. Instruction No. 10/2025 - dated 13-5-2025

Arrest Report and Incident Report (where arrest not made) – revised formats

Highlights / Catch Notes

GST

• Zero-Rated Exports: Merchant Exporters Win Relief from Compensation Cess, Ensuring Smooth Working Capital Flow Under GST

  Case-Laws - HC : HC held that supplies to merchant exporters qualify as zero-rated export under IGST Act. While petitioners are technically liable to pay 160% Compensation Cess in absence of specific exemption notification, the court recognized this creates unnecessary working capital blockage. The levy is essentially revenue neutral since merchant exporters can claim full refund under sections 16 and 54(3) of GST Act. The matter was remanded to GST Council to consider granting exemption from Compensation Cess for export supplies, aligning with existing GST/IGST exemptions. Petition allowed with directions to review the Compensation Cess levy mechanism for export-oriented supplies.
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• Fraudulent Tax Credit Claims Rejected: Partial Cooperation Insufficient to Secure Pre-Arrest Bail

  Case-Laws - HC : HC denied pre-arrest bail application involving fraudulent Input Tax Credit (ITC) claims. Despite petitioner's partial cooperation with investigating authorities and appearing after interim bail, the court rejected the anticipatory bail. The court noted the prima facie evidence of ineligible ITC amounting to Rs. 3.42 Crores, which is below the Rs. 5 Crores threshold. The application was deemed non-maintainable, with a directive for the petitioner to fully cooperate in the ongoing investigation. The bailable nature of the offense and absence of immediate arrest risk were key considerations in the court's reasoning.
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• Tax Fraud Writ Dismissed: High Court Upholds Rs. 56.2 Crore ITC Penalty Order Against 527 Firms for Contradictory Claims

  Case-Laws - HC : HC dismissed writ petition challenging tax penalty order involving alleged fraudulent Input Tax Credit (ITC) of Rs. 56.2 crores across 527 firms. The Court found no violation of natural justice, noting the petitioner's contradictory statements and lack of arbitrary administrative action. The impugned order was deemed appropriate, with the Court declining to interfere under Article 226 jurisdiction, emphasizing the need for circumspection when large-scale tax fraud is alleged. Petition was consequently rejected, upholding the Department's findings and penalty order.
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• Tax Authority's Power Affirmed: SGST Jurisdiction Validated Under Section 6(2)(b) for Comprehensive Tax Proceedings Review

  Case-Laws - HC : HC determined the jurisdictional authority of SGST to initiate and adjudicate tax proceedings. The court held that under Section 6(2)(b) of CGST Act, the DGST Department must reconsider the prior appellate order and reassess the show cause notice and subsequent impugned order. The impugned order was set aside, with instructions to place the Commissioner's (Appeals-I) order before DGST for fresh consideration and comprehensive review of the underlying tax matter.
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• Tax Authorities Cannot Double-Levy When Self-Assessed Returns Already Filed Under Section 37 of GST Act

  Case-Laws - HC : HC held that Section 75(12) of WBGST & CGST Act, 2017 cannot be invoked when self-assessed tax under Section 37 is already included in returns under Section 39. The court quashed the demand notice raised by tax authorities, finding that alternative legal provisions under Sections 65, 66, 67, 73, or 74 should have been pursued if discrepancies were identified. The consequential demand for tax period 2020-21 was set aside, effectively ruling in favor of the petitioner and invalidating the original order dated 20th December, 2024.
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• Taxpayer Wins Appeal: GST Return Filing Reinstated with Opportunity to Rectify Outstanding Tax Compliance

  Case-Laws - HC : HC allows petitioner's appeal challenging registration cancellation, remanding matter to respondent at show-cause notice stage. Petitioner directed to file belated GST returns from April 2020 onwards, paying outstanding tax, interest, and penalties. Respondent-Authority must consider submitted returns, with discretion to pursue appropriate legal proceedings excluding non-filing of returns for over six months. Original cancellation order and subsequent appellate orders quashed, providing procedural relief while maintaining regulatory compliance obligations.
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• GST Registration Dispute: Voluntary Compliance and Remedial Actions Prevail, Section 29(2)(c) Interpretation Highlights Procedural Flexibility

  Case-Laws - HC : HC adjudicated a GST registration cancellation dispute, finding that while the petitioner initially failed to comply with statutory filing requirements under section 29(2)(c), subsequent remedial actions were significant. The court recognized the petitioner's voluntary compliance by paying outstanding GST, interest, and penalties, and demonstrating willingness to adhere to regulatory mandates. Consequently, the HC quashed the show cause notice and cancellation order, effectively reinstating the petitioner's registration, thereby balancing procedural compliance with principles of natural justice and providing an opportunity for rectification.
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• GST Registration Restored: Procedural Flaws Invalidate Cancellation Order Despite Non-Compliance with Statutory Filing Requirements

  Case-Laws - HC : HC quashed GST registration cancellation order due to procedural irregularities. Despite petitioner's non-compliance with GST Act by failing to file returns for six consecutive months, the court found a violation of natural justice principles. The petitioner demonstrated willingness to rectify defaults by paying outstanding GST, interest, and penalties. The court set aside the show cause notice and subsequent orders, effectively reinstating the petitioner's GST registration while mandating future compliance with statutory requirements.
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• Tax Authority Ordered to Reconsider ITC Reversal Notice After Procedural Fairness Violation and Improper Double Recovery Attempt

  Case-Laws - HC : HC held that the tax authority improperly issued a show-cause notice demanding reversal of Input Tax Credit (ITC) without considering the petitioner's prior voluntary reversal. The non-speaking order violated principles of natural justice by seeking double recovery of tax. The court remanded the matter, directing the authority to issue a fresh order focusing on potential interest or penalty for late ITC reversal, and provide the petitioner an opportunity to be heard. The order emphasizes procedural fairness and prevents excessive tax recovery, mandating a comprehensive review of actual tax compliance before imposing additional financial burden.
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• Tax Appeal Dismissed: Case Remanded for Fresh Hearing with Full Opportunity to Present Evidence and Challenge Original Order

  Case-Laws - HC : HC dismissed the appeal involving tax computation for the period 1st April 2018 to 31st March 2019, where the original order was passed ex parte due to non-response to show cause notice. Despite time limitation challenges, the court determined that remanding the matter to the appellate authority would be most appropriate. The HC noted the electronic availability of records and the potential for more efficient factual assessment by the appellate authority. Consequently, the petition was disposed of by remanding the case back to the appellate authority for substantive merit-based adjudication, effectively providing the petitioner an opportunity to present their case and challenge the original tax order.
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• Accused Granted Bail Due to Procedural Lapses in Arrest, Violation of Constitutional Rights Highlighted in Detailed Order

  Case-Laws - HC : HC granted bail to the petitioner after finding procedural irregularities in arrest. The court observed non-compliance with Sections 41/41A of Cr.P.C. and Sections 47/48 of BNSS, specifically the failure to communicate grounds of arrest and "reasons to believe" to the accused. Noting substantial investigation progress and unnecessary custodial interrogation, the court held that the arrest violated constitutional safeguards under Articles 21 and 22(1). The absence of Document Identification Number in authorization documents further strengthened the bail application. Bail was granted subject to standard conditions, emphasizing procedural compliance in law enforcement actions.
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• Procedural Fairness Prevails: GST Appeal Overturned Due to Lack of Adequate Hearing Opportunity Under Section 107

  Case-Laws - HC : HC held that principles of natural justice were violated as petitioner was not provided adequate opportunity of hearing. The appeal's rejection under Section 107 of GST Act was deemed improper due to procedural unfairness. The appellate authority's order dated 19.03.2024 and tax determination order dated 08.02.2021 were set aside. Petitioner was directed to submit detailed explanation within six weeks, and the authority was mandated to complete further proceedings within two months of receiving the explanation. Petition allowed with specific procedural directives.
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• Job Work Classification Dispute Escalates: Technical Disagreement on GST Treatment Triggers Formal Appellate Review Under Section 98(5)

  Case-Laws - AAR : The AAR encountered conflicting interpretations regarding the classification of job work under Section 2(68) of the CGST Act and the nature of service supply under Section 7(1A) read with Schedule-II. Due to fundamental disagreements between authority members on the tariff classification and applicable GST rate, the matter was formally referred to the Appellate Authority in Jaipur as per Section 98(5) of the CGST Act, 2017, without reaching a definitive substantive ruling on the underlying legal questions presented by the applicant.
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Income Tax

• Challenging Tax Reassessment: Section 148 Notice Invalidated Due to Lack of Jurisdictional Grounds and Insufficient Evidence

  Case-Laws - HC : HC determined the invalidity of a Section 148 notice challenging the Assessing Officer's (AO) assumption regarding material advances and closing stock discrepancies. The court found that the AO erroneously interpreted material advances as an indication of understated closing stock, despite the advance being already accounted for in the revenue bill. The AO lacked jurisdiction to reopen the assessment based on information already examined during the original assessment. Consequently, the HC quashed the reassessment notice, ruling in favor of the assessee and determining that the purported stock variation could not substantiate claims of escaped income.
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• Assessee's Claim for Debtors' Expenditure Rejected Due to Lack of Substantive Evidence Under Section 260A

  Case-Laws - HC : HC rejected the assessee's claim for expenditure under 'debtors' head, finding insufficient evidence to support alleged trade practice of cash discounts. The Tribunal's findings were upheld, determining that the payments included non-revenue items like loan repayments and investments. The court concluded that without substantive proof of legitimate business expenditure, the original assessment stands. Appeals under Section 260A were dismissed, with questions answered in favor of the Revenue and against the assessee, affirming the Tribunal's original determination of non-allowable expenditure.
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• Cooperative Society Wins Tax Deduction Claim, Challenges Strict Interpretation of Return Filing Delay Under Section 80P(2)(a)(i)

  Case-Laws - HC : HC allowed the petition challenging the denial of deduction under Section 80P(2)(a)(i). The court found that the tax authority erroneously rejected the society's application to condone a two-day delay in return filing without adequately considering genuine hardship. The respondent failed to recognize the temporary administrative changes and ignored the CBDT circular providing discretionary powers to condone minor delays. The HC directed the respondents to pass a fresh order within twelve weeks, condoning the two-day delay and processing the income return, thereby enabling the petitioner to claim the statutory deduction.
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• Assessing Officer's Assessment Reopening Invalidated Due to Lack of Substantive Evidence and Jurisdictional Grounds

  Case-Laws - HC : HC held that the Assessing Officer (AO) lacked valid jurisdictional grounds for reopening the assessment. Despite having territorial jurisdiction, the AO failed to establish a substantive reason to believe income had escaped assessment. The notice was deemed invalid as it was based solely on information from an insight portal without concrete evidence connecting the alleged accommodation entries to the petitioner's audited accounts. The court found the reopening notice constituted a fishing inquiry without demonstrating a prima facie case of income escaping assessment, thereby rendering the reopening notice legally untenable and unsustainable.
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• Tax Penalty Proceedings Require Contemporaneous Satisfaction During Assessment, Cannot Be Retrospectively Justified or Reconstructed

  Case-Laws - HC : HC held that penalty proceedings initiated under two sections simultaneously are valid, but satisfaction must be recorded during assessment proceedings. The AO cannot record reasons for penalty after proceedings conclude. The tribunal's order quashing the revisional authority's directive was upheld, effectively ruling against the revenue. The core legal principle emphasizes that procedural satisfaction for imposing penalties must be contemporaneous with assessment proceedings, not retrospectively constructed. The decision reinforces strict procedural compliance in tax penalty impositions, ensuring that administrative discretion is exercised within prescribed temporal boundaries.
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• Tax Reassessment Invalidated: Section 148 Notice Struck Down as Mere Opinion Change Without New Material Evidence

  Case-Laws - HC : HC ruling on tax reassessment for AY 2014-2015: The court held that the reassessment notice under Section 148 was invalid. The AO's reopening of assessment was deemed a mere change of opinion rather than discovery of new material, as the original assessment was based on search operation materials. The court found that the materials used for reopening were already part of the original assessment proceedings. Consequently, the court set aside the reassessment notice dated 31.03.2021 and the order rejecting objections dated 21.02.2022, effectively allowing the writ petition and invalidating the reassessment proceedings.
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• Income Tax Reassessment Order Invalidated: Improper Reopening of Minor's Income Violates Procedural Norms Under Section 147

  Case-Laws - AT : ITAT held that the re-assessment order under section 147 r.w.s. 144B was invalid. The AO improperly reopened the minor son's income in the father's hands despite clear evidence that the income was already clubbed in the mother's income tax return. The tribunal found the reassessment proceedings procedurally flawed, as the AO failed to verify the submitted documentation and disregarded the assessee's explanation regarding income clubbing. Consequently, the tribunal quashed the re-assessment proceedings, deleted the addition made by the AO, and allowed the assessee's appeal, emphasizing that the reassessment was contrary to legal provisions.
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• Short-term capital loss with STT can offset short-term capital gains without STT under section 70(2), tribunal clarifies tax calculation rules

  Case-Laws - AT : The ITAT held that under section 70(2), short-term capital loss paid with STT can be set off against short-term capital gains not subject to STT, without further classification. Referencing prior judicial precedents, the tribunal found the Assessing Officer erroneously added short-term capital gains already computed by the assessee. The tribunal directed the AO to correctly calculate the assessee's income and levy tax accordingly, allowing the assessee's appeal grounds 1-4 and confirming the setoff of capital losses across different STT scenarios.
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• Tax Deduction Upheld: Scientific Research Capital Expenditure Allowed Under Section 35(1)(iv) Despite Weighted Deduction Disallowance

  Case-Laws - AT : ITAT upheld CIT(A)'s decision, allowing normal deduction u/s 35(1)(iv) for R&D capital expenditure disallowed under weighted deduction u/s 35(2AB). The tribunal found the issue consistent with the assessee's previous year's case, affirming that capital expenditure on scientific research at an approved R&D facility remains deductible even if not qualifying for enhanced deduction. Revenue's appeal grounds were comprehensively dismissed, maintaining the lower appellate authority's reasoning and providing tax relief to the assessee.
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• Tax Gains Triumph: ULIP Policy Surrender and Multiple Property Sales Exemption Validated Under Sections 45 and 54

  Case-Laws - AT : ITAT adjudicated two key tax matters involving a taxpayer's ULIP policy and residential property capital gains. The tribunal held that the LIC Market Plus-1 Policy constitutes a capital asset, rendering gains from its surrender taxable under "Capital Gains" rather than "Income from Other Sources". Additionally, the tribunal ruled that capital gains from multiple residential property sales can be invested in a single residential property, allowing the taxpayer's exemption claim under section 54. The tribunal found the assessee complied with statutory requirements by constructing a new house within three years and depositing capital gains in a prescribed scheme account. Consequently, the tribunal allowed the assessee's appeals, directing the Assessing Officer to grant the claimed section 54 exemption and recognize the capital gains treatment for the ULIP policy surrender.
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• Software Cost Allocations Not Royalty: International Tech Services Payments Exempt from Indian Taxation Under Established Precedent

  Case-Laws - AT : ITAT held that cost allocations for SUN/SAP software, GST scoping, and IT service charges do not constitute royalty or Fees for Technical Services (FTS). The tribunal found these receipts do not involve transfer of technical knowledge, skill, or experience, and therefore cannot be taxed in India. Following precedent from Supreme Court's Engineering Analysis Centre of Excellence case, the tribunal directed the Assessing Officer to delete additions made towards these cost allocations, rejecting revenue's contentions that these payments qualify as taxable technical services or royalty under Article 13 of the tax treaty.
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• Income Tax Tribunal Strikes Down Unsubstantiated Income Additions, Directs Fresh Assessment with Procedural Fairness and Proper Verification

  Case-Laws - AT : ITAT allows assessee's appeals, directing AO to delete multiple additions to income. The tribunal found no merit in additions related to flat purchase, advances, and unexplained investments. Specifically, the court determined that the AO made additions without establishing clear factual basis, incorrectly invoked statutory provisions, and estimated undisclosed income without cogent supporting material. The matter is partially remanded for fresh assessment, with the AO directed to verify facts, provide opportunity to the assessee, and charge correct income. The assessee is instructed to remain cooperative during proceedings and not seek frivolous adjournments.
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Customs

• Anti-Dumping Duty Imposed on Chinese Titanium Dioxide Imports to Protect Domestic Manufacturing Sector from Unfair Trade Practices

  Notifications : The GoI imposed anti-dumping duty on Titanium Dioxide imports from China PR after determining dumped exports causing material injury to domestic industry. The duty ranges from USD 460 to USD 681 per metric ton, depending on the specific producer, and will be levied for five years from the notification date. The duty applies to Titanium Dioxide under specific tariff items, with exclusions for specialized applications in food, pharmaceuticals, skincare, textiles, and nano-grade materials. The measure aims to protect domestic manufacturers by counteracting unfair trade practices and mitigating economic harm from subsidized Chinese imports.
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• Customs Enforcement Mandates DIGIT ID Inclusion in Arrest and Incident Reports for Comprehensive Documentation and Tracking

  Circulars : The CBIC issued Instruction No. 10/2025-Customs mandating the inclusion of DIGIT ID in Arrest Reports and Incident Reports for customs enforcement actions. The revised reporting formats (Annexure-I and Annexure-II) require comprehensive details including personal information, offence specifics, seizure particulars, and modus operandi. Reports must be electronically submitted to designated CBIC officials, with previous instructions remaining unchanged. The new format aims to standardize and enhance information tracking in customs investigation and enforcement proceedings.
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IBC

• Corporate Debt Recovery Confirmed: Audited Financials Validate Rs. 2.5 Crore Claim Under Insolvency Resolution Process

  Case-Laws - AT : NCLAT dismissed the appeal, affirming the financial debt of Rs. 2.5 Crores against the corporate debtor. The tribunal held that the default was established through audited financial statements dated 31.01.2019, which predates the Section 10A exemption period. The information utility record and financial statements conclusively proved the debt, and the liquidator was legally authorized to initiate Corporate Insolvency Resolution Process (CIRP) proceedings. The court rejected appellant's contentions regarding lack of written documentation and challenged the liquidator's right to pursue legal recovery, ultimately upholding the financial creditor's claim.
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• Corporate Director's Appeal Denied: Resolution Professional Protects Plan Integrity by Requiring Confidentiality Undertaking Under Insolvency Code

  Case-Laws - AT : NCLAT dismissed the appeal involving a suspended corporate director's request for a resolution plan copy. The appellate tribunal ruled that the resolution professional (RP) was justified in requesting an undertaking preventing the appellant and related parties from submitting a competing resolution plan, given that the appellant's brother was simultaneously preparing a plan submission. The tribunal found the RP's precautionary measure reasonable to protect confidential information and prevent potential conflicts of interest in the insolvency proceedings. The appeal was consequently rejected, upholding the RP's discretionary decision to safeguard the resolution plan's integrity.
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• Resolution Professional Appointment Upheld: Personal Guarantors Cannot Challenge Procedural Steps in Insolvency Proceedings

  Case-Laws - AT : NCLAT dismissed the appeal challenging the appointment of a Resolution Professional (RP) under Section 95 and Section 97 of the Insolvency and Bankruptcy Code. The Tribunal held that personal guarantors lack standing to challenge RP appointment as a procedural step, and their rights are safeguarded by the ability to file objections against the RP's report. The proceedings from Sections 95 to 100 do not have adjudicatory effect, and the appointment process remains exclusively within the Adjudicating Authority's discretion. The appeal was deemed non-tenable, with the original RP appointment order being upheld as statutorily compliant.
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PMLA

• Properties Attached Under PMLA Remain Seized Despite Mortgage, Ownership Claims Upheld on Proceeds Equivalent Basis

  Case-Laws - AT : The AT examined the attachment of properties under PMLA in a money laundering case. The tribunal held that properties can be attached even if mortgaged, as the appellants retain potential transfer rights. The ED's attachment was deemed valid since the original proceeds of crime were untraceable, and the attached properties represented equivalent value. The tribunal emphasized that PMLA's objective is to reach proceeds of crime regardless of nominal ownership. The court rejected arguments for property release or substitution, noting the fraud's quantum exceeded attached property values. Ultimately, the appellate tribunal dismissed the appeal, affirming the enforcement agency's attachment proceedings and maintaining the properties' status under PMLA's broad interpretative framework.
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SEBI

• SEBI Grants Extended Deadline for AIF Investment Team Certification Requirements Until July 31, 2025

  Circulars : SEBI extended the timeline for Alternative Investment Funds (AIFs) to comply with key investment team certification requirements from May 9, 2025 to July 31, 2025. The extension applies to existing AIF schemes and pending scheme applications as of May 10, 2024. The certification requirement mandates at least one key personnel obtain the NISM Series-XIX-C: Alternative Investment Fund Managers Certification Examination. This extension aims to provide regulatory flexibility and ease compliance for the AIF industry, implemented through a circular issued under SEBI's statutory powers to protect investor interests and regulate securities markets.
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VAT

• Supreme Court Validates Purchase Tax Provisions, Confirms State's Right to Levy Tax on Goods from Exempt Dealers

  Case-Laws - SC : SC upheld the constitutional validity of purchase tax provisions under Sections 5A and 7A of Kerala and Tamil Nadu General Sales Tax Acts. The Court determined that purchase tax is leviable on goods purchased from exempt dealers where no sales tax was originally paid, subject to specific conditions regarding goods' use, disposal, or dispatch. The levy is distinct from sales tax and represents a valid exercise of state legislative power. The Court rejected arguments challenging the tax's constitutional legitimacy, affirming that purchase tax can be imposed independently of sales tax exemptions. The appellants' contentions were dismissed, and the purchase tax provisions were deemed legally sound and enforceable.
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• Amnesty Scheme Interpretation Favors Petitioner: Strict Procedural Compliance Overrides Literal Reading of Vera Samadhan Yojna, 2019

  Case-Laws - HC : HC allowed the petition challenging the rejection of an application under Vera Samadhan Yojna, 2019. The court found the respondent's literal interpretation of the Amnesty Scheme inappropriate, particularly given the lack of prior intimation about interest shortfall. The HC quashed the order rejecting the application, directed restoration of the Amnesty Scheme benefits to the petitioner, and ordered refund of Rs. 4,78,833/- recovered from the petitioner's bank account, with 9% per annum interest from the date of recovery until repayment.
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• Tax Assessment Petition Partially Allowed: Procedural Flaws Identified, Remanded for Fresh Evaluation of 2017-18 Tax Year

  Case-Laws - HC : HC allowed the tax assessment petition partially, setting aside the revisional order for tax years 2014-15, 2015-16, and 2016-17, while remanding the matter for fresh assessment for 2017-18. The court found procedural irregularities in the original assessment, specifically noting the Revisional Authority's failure to adequately address legal questions raised and lack of substantive assessment documentation. The remand directs the Assessing Authority to conduct a comprehensive reassessment for the April-June 2017 period in compliance with TVAT Act provisions, ensuring proper evaluation of turnover and potential penalties.
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Case Laws:

• GST

• 2025 (5) TMI 925
  Seeking grant of bail - offence under Clauses (c), (f) and (h) of Section 132(1) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- In a case like this, the appellant has been denied the benefit of bail at all levels, including the High Court and ultimately, he was forced to approach this Court. These are the cases where in normal course, before the Trial Courts, the accused should get bail unless there are some extra ordinary circumstances. By setting aside the impugned order dated 24th January, 2025 of the High Court of Judicature for Rajasthan, Bench at Jaipur, bail is granted to the appellant. The appellant shall be immediately produced before the Trial Court and the Trial Court shall enlarge him on bail on appropriate terms and conditions till the conclusion of the trial. Appeal allowed.

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• 2025 (5) TMI 924
  Rejection of appellant s second application for bail - offences u/s 132(1)(b), 132(1)(i) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Bearing in mind the fact that the offence with which the appellant has been charged carries a maximum punishment of five years of imprisonment and the appellant has been in custody for almost eighteen months, we do not consider it appropriate to keep the appellant in custody any further pending trial. The appellant may be admitted to an order for release on bail. The appellant shall be released on bail subject to such terms and conditions as may be imposed by the trial court - Appeal allowed.

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• 2025 (5) TMI 923
  Legality, and validity of the N/N. 13/2022 dated 5-7-2022 N/Ns. 9 and 56 of 2023 dated 31-3-2023 28-12-2023 respectively - HELD THAT:- The issue that falls for the consideration of this Court is whether the time limit prescribed for adjudication of show cause notice and passing order under Section 73 of the GST Act and SGST Act (Telangana GST Act) for financial year 2019-2020 could have been extended by issuing the Notifications in question under Section 168-A of the GST Act. Issue notice on the SLP as also on the prayer for interim relief.

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• 2025 (5) TMI 922
  Maintainability of petition - availability of alternative remedy - Levy of penalty u/s 74 read with Section 122(1) of the Central Goods and Services Tax Act, 2017 - Availment of fake Input Tax Credit (ITC) without any supply of goods or services - HELD THAT:- Considering the fact that the Petitioner s son has already availed of the appellate remedy under Section 107 of the CGST Act in respect of the same very impugned order dated 30th January, 2025, this Court is of the opinion that the present writ petition ought not to be entertained, especially considering the seriousness of allegations against the Petitioner. It is well settled in various decisions of the Supreme Court that petitions under Article 226 of the Constitution of India would be liable to be entertained only in case of persons who come with clean hands and not in favour of the persons who present twisted facts or misrepresent the true and correct picture on record. Under these circumstances, this Court is of the view that the present writ petition is not liable to be entertained. If the Petitioner wishes to urge any other issues, the same can be considered in the appeal, if the Petitioner chooses to avail of the appellate remedy under Section 107 of the CGST Act. The present petition is, accordingly, dismissed with costs of Rs. 50,000/- to be deposited with the Delhi High Court Bar Association within four weeks.

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• 2025 (5) TMI 921
  Levy of GST in form of compensation Cess at the rate of 160% on branded tobacco products i.e. scented/flavoured chewing tobacco manufactured by the petitioners for export through merchant exporters which are subject to GST at 0.1% as per N/N. 40/2017 and 41/2017 dated 23/10/2017 - export of goods - zero rated supply - HELD THAT:- There is no dispute between the parties regarding the supply of goods by the petitioners to merchant exporters to be considered as export of goods in the hands of the petitioners and therefore, provision of section 16 of the IGST Act would also apply to the supplies made by the petitioners to merchant exporters as zero rated supply. As per N/N. 42/2001 dated 26.06.2001, conditions and procedure for export of excisable goods are prescribed without payment of duty. Similarly, after the GST Act coming into force, the basic concept of export of goods without payment of duty or tax is continued and as per Circular No. 37/11/2018-GST dated 15.03.2018 supply of goods to merchant exporters is considered as an export of goods in consonance with decision of Hon ble Apex Court in case of Amritsar Sugar Mills Co. Ltd. [ 1965 (12) TMI 110 - SUPREME COURT] and in case of Lord Krishna Sugar Mills [ 1966 (3) TMI 66 - SUPREME COURT] , wherein it is held that in a transaction of taking goods out of Utter Pradesh, in facts of the case to a place out of India more than one supply can qualify as export supply and therefore, supply by the petitioners to the merchant exporters would qualify as export supply. It is also required to be noted that even if the petitioners are saddled with payment of Compensation Cess at the rate of 160%, merchant exporters shall get refund of the same as per the provisions of section 16 of the IGST Act read with section 54 (3) of the GST Act and therefore, such payment of Compensation Cess would be revenue neutral and in such circumstances, levy of Compensation Cess at the rate of 160% on supply of goods to merchant exporters by the petitioners would not be sustainable as held in case of Coca-Cola India Pvt. Ltd. [ 2007 (4) TMI 17 - SUPREME COURT] . Government of India issued N/N. 40/2017 dated 23.10.2017 while exercising powers conferred by sub-section (1) of section 11 of the CGST Act on recommendation of the GST Council to exempt intra-State supply of taxable goods by a registered supplier to a registered recipient for export, from so much of the central tax leviable thereon under section 9 of the GST Act, as in excess of the amount calculated at the rate of 0.05 per cent, so far as levy of CGST is concerned and similar notification is issued by the State Government resulting into payment of maximum tax at the rate of 0.01%. Similar Notification is also issued being Notification No. 41/2017 while exercising powers under section 6 of the IGST Act to grant exemption on IGST leviable upon export in excess of amount calculated at the rate of 0.1% meaning thereby that maximum 0.1% IGST is payable - However, no notification is issued by the Central Government or State Government under the Compensation Cess Act and therefore, the petitioners are made liable to pay Compensation Cess at normal rate i.e. 160% on the supply of goods to merchant exporters for export. It is true that in absence of any notification, the respondent authorities were justified in passing the impugned order for levy of Compensation Cess at the normal rate of 160% on the supply made by the petitioners to merchant exporters. However, considering the provisions of section 11 of the Compensation Cess Act, which provides for applicability of provisions of CGST and IGST Act, mutatis mutandis for levy of Cess as per section 8 of Compensation Cess Act, notification issued under the provisions of GST and IGST Act are required to be applied for levy of Cess also - when there is no revenue loss, there is no purpose of levy of Compensation Cess at the normal rate of 160% as the same is required to be refunded to the merchant exporter on export of goods as per provisions of section 54 (3) of the GST Act read with section 16 of the IGST Act. There is a fallacy in reasoning of the adjudicating authority that as option is given to assessee either to avail benefits of Exemption Notification No. 40/2017 and Notification No. 41/2017 or to pay tax at normal rate, the petitioners are liable to pay Compensation Cess at normal rate only in absence of any such notification or option being given by the Government. When there is no recommendation by GST Council to grant exemption from payment of Compensation Cess at par with GST and IGST on supply of goods for export or supply to merchant exporter, we also strongly urge the GST Council to consider the issue of granting exemption from levy of Compensation Cess at par with GST and IGST as recommended by it in 22nd Meeting so as to see that there is no working capital blockage for manufacturer or exporters including EOUs due to requirement of upfront payment of Compensation Cess at normal rate on supply of goods by the petitioners to merchant exporters for export which ultimately is required to be refunded considering the fact that no tax is leviable on the export of goods. The impugned action of levy of Compensation Cess at the rate of 160% on the supply of goods i.e. branded tobacco products by the petitioners to merchant exporters for export is required to be kept in abeyance and the matter is referred to GST Council to decide the issue as to whether exemption is required to be granted on levy of Compensation Cess on supply of goods to merchant exporters for export at par with exemption granted for levy of GST and IGST in excess of 0.1% so as to enable the petitioners to avail input tax credit or refund as the case may be as per the provisions of section 16 (3) of the IGST Act read with section 54 (3) of the GST Act. Conclusion - i) The supplies made by the petitioners to merchant exporters qualify as export of goods under section 2(5) of the IGST Act and therefore, are zero-rated supplies under section 16 of the IGST Act. ii) In absence of a notification exempting Compensation Cess on supplies to merchant exporters, the petitioners are liable to pay Compensation Cess at the normal rate; however, such levy causes working capital blockage and is ultimately a revenue neutral exercise as refunds are claimable by merchant exporters. Petition allowed by way of remand.

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• 2025 (5) TMI 920
  Rejection of the Rectification Application by the respondent without assigning reasons - opportunity of hearing also not provided - violation of principles of natural justice - HELD THAT:- It is an admitted fact that the petitioner had made a Rectification Application. The order of rectification, which is impugned, would indicate that for the reasons given in the annexure to the said order, the Rectification Application is rejected. A perusal of the order does not also indicate that there had been no error apparent on the record to reject the rectification. There is also no reasonings as to why there is no error apparent on the face of the record. For this reason, the impugned order dated 28.03.2025 is liable to be set aside. The principles of natural justice had been in-built by way of the 3rd Proviso to Section 161. If pursuant to a Rectification Application, if a rectification is made and if it adversely affects the assessee, 3rd Proviso contemplates an opportunity of hearing to be given. However, when a Rectification Application is made at the instance of assessee and the rectification is being sought to be rejected without considering the reasons for rectification or by giving reasons as to why such rectification could not be entertained, it is also imperative that the assessee should be put on notice. Conclusion - The order of rectification passed by the respondent dated 28.03.2025 is contrary to the provisions of Section 161 and in that aspect, the same alone is set aside. Petition allowed.

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• 2025 (5) TMI 919
  Seeking grant of pre-arrest bail - bailable or non-bailable offence - fraudulent availment of Input Tax Credit (ITC) - protection of the right to life and liberty under Article 21 of the Constitution - HELD THAT:- It is an admitted position that the petitioner appeared before the Investigating Officer after obtaining the order of interim pre-arrest bail, though initially he tried to appear through his engaged counsel after receiving the Notice under Section 70 of the CGST Act. Further it is seen that after the preliminary investigation and analysis of the GST Returns from the available data, it was found that prima facie the petitioner filed ineligible ITC amounting to approximately Rs. 3.42 Crores during the relevant financial period which were predominantly based on invoices received from mainly two entities, namely, M/S Nilima Hardware and M/S P.S Enterprise. It is also an admitted fact that after obtaining the order of interim pre-arrest bail, the petitioner appeared before the Investigating Officer and extended his co-operation in further investigation of this case - However, as submitted by the learned Standing Counsel, GST, it is seen from the Case Diary that the petitioner did not extend his full co-operation in the preliminary investigation made by the Office of the GST. But, presently, there cannot be any situation or circumstances to hold that there is any apprehension of arrest of the present petitioner when admittedly the case falls under the bailable offence and the ineligible ITC amounts to approximately Rs. 3.42 Crores which is less than Rs. 5 Crores. The present anticipatory bail application is not maintainable in the present form and accordingly, the same stands rejected at this stage with a direction to the present petitioner to extend his full cooperation in the further investigation of the case. Conclusion - The anticipatory bail application is not maintainable at the current investigative stage, the offence is bailable, and the petitioner had no reasonable apprehension of arrest. This anticipatory bail application stands disposed of.

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• 2025 (5) TMI 918
  Demand arising from TDS credits deposited under an old GST registration number instead of the new GSTIN issued post-CIRP - HELD THAT:- Considering the nature of the matter i.e., it is a question of reconciliation of TDS deposited by certain clients of the Petitioner in the wrong GSTIN No. This Court is of the opinion that the Petitioner ought to be granted an opportunity to present its case before the Adjudicating Authority in the interest of justice. Accordingly, the impugned order is set aside. The Petitioner is directed to appear before the Adjudicating Authority on 10th June, 2025. If the Petitioner wishes to file any additional documents, it may do so through the portal. The said additional documents shall also be taken into consideration and a comprehensive adjudication shall be undertaken by the Adjudicating Authority. Petition disposed off.

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• 2025 (5) TMI 917
  Challenge to SCN - SCN specified a lesser amount than the demand raised by Assistant Commissioner - time limitation - HELD THAT:- A look at the notice issued under Section 73 of the Act would reveal that on point no. 4, the indications were made that as per the balance sheet, there were sundry creditors to the tune of Rs. 4,15,36,270/-, based on which the petitioner was required to produce the ledger account else, it was indicated that action in accordance with law would be taken. As the show cause notice was specific pertaining to the discrepancies noticed and had provided opportunity to produce documents, non quantification of the demand in the show cause notice and ultimately raising the demand while passing the order, cannot be said to be in violation of provisions of Section 75(7) of the Act inasmuch as once the discrepancy pertaining to the amount was pointed out, subject to production of documents, the determination made would always be treated as forming part of the notice. The plea sought to be raised that under Section 73 of the Act, no documents can be determined, is ex-facie baseless. If the plea as sought is accepted, the indication made in point no. 4 pertaining to sundry creditors to the tune of Rs. 4,15,36,270/- without seeking further opportunities if the demand was raised, the same would have been in violation of principles of nature justice and the very fact that the petitioner choose not to supply the requisite material, essentially is an admission regarding the discrepancy as pointed out in the notice and, therefore, it cannot be said that either the documents cannot be demanded or on failure to produce documents, demand cannot be raised - both the pleas sought to be raised based on scope of Section 73 of the Act and violation of provisions of Section 75(7) of the Act, cannot be countenanced. Conclusion - i) The demand of Rs. 52,48,621/- raised under Section 73 was not in violation of Section 75(7) despite exceeding the amount in the show cause notice. ii) The Assistant Commissioner was within his authority to require documents and raise demand based on non-production. There are no reason to exercise jurisdiction under Article 226 of the Constitution of India. The petition is, therefore, dismissed leaving it open for the petitioner to agitate the issue on merits before the appellate forum.

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• 2025 (5) TMI 916
  Fraudulent availment of Input Tax Credit (ITC) - reply of petitioner was not considered and no personal hearing was given prior to passing of the impugned order - violation of principles of natural justice - HELD THAT:- This Court in the present writ petition is exercising jurisdiction under Article 226 of the Constitution of India and when there is an allegation of such large-scale fraud, to the tune of more than Rs. 56.2 crores, being committed with the involvement of a total of 527 firms including the Petitioner Firm, the Court has to be circumspect in exercise of its powers - This Court notices a pattern in which such persons, who had either availed of fraudulent ITC or have enabled the availment of fraudulent ITC repeatedly have challenged orders imposing penalty under Section 74 of the Central Goods and Services Act, 2017 before this Court, invoking the writ jurisdiction, on some technical grounds. There is also no arbitrary exercise of power by the Department, which would require exercising of writ jurisdiction. As is evident from the impugned order, various persons and entities including that of the Petitioner have either facilitated availment of or in fact availed ITC, by entering into arrangements with the main proponent, Mr. Karan Kumar Agarwal - having seen the hearing notices, the screenshot of the portal and the reply of the Petitioner Firm along with the statement of the Director of the Petitioner Firm, which is recorded in the impugned order, the Court is not inclined to entertain the present writ petition. Prima facie, considering the contradictory stand taken in the reply and the statement of the Petitioner s Director, the stand of the Department cannot be held to be incorrect or untenable. The impugned order does no warrant interference by this Court, in exercise of writ jurisdiction - Petition dismissed.

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• 2025 (5) TMI 915
  Jurisdiction of State Goods and Services Tax (SGST) authority (DGST Department) to initiate and adjudicate proceedings - HELD THAT:- In light of the rationale of Section 6 (2) (b) of the CGST Act, it is clear that the DGST Department shall be required to consider the order dated 3rd April, 2025 passed by the appellate authority and shall accordingly reconsider as to whether the SCN dated 27th November, 2024 as also the consequent impugned order dated 27th February, 2025 will sustain in view of Section 6 (2) (b) of the CGST Act. The impugned order is accordingly set aside. Let the order of the Commissioner (Appeals-I), CGST dated 3rd April, 2025 be placed before the DGST Department so that the matter can be considered afresh - Petition disposed off.

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• 2025 (5) TMI 914
  Recovery of dues payable by the petitioner, by invoking the provisions of Section 75(12) of the WBGST CGST Act, 2017 - discrepancies in the returns filed by the petitioner - HELD THAT:- Having regard to the explanation provided under Section 75(12) of the said Act, the expression self-assessed tax shall include tax payable in respect of the details of outward supplies furnished under Section 37 of the said Act which are not included in the return furnished under Section 39 of the said Act. Admittedly, in this case it would transpire that the self-assessed tax of the petitioner under Section 37 of the said Act has been included in the returns under Section 39 of the said Act. It is not the case of the respondents that the self-assessed tax furnished under Section 37 of the said Act has not been included in the returns under Section 39 of the said Act. Once, the self-assessed tax as per Section 37 is included in the return furnished under Section 39 of the said Act, Section 75(12) of the said Act can no longer be invoked as is clear from the above explanation. Further a bare perusal of the notice issued in ASMT 10 dated 20th September, 2024 would in no uncertain terms disclose that the returns filed by the petitioner in Form GSTR1 had been included in Form GSTR-3B. It would also transpire from the order impugned that the respondents have proceeded to determine late fees and interest by proceeding to demand the same from the date of filing of return under Section 39 of the said Act in Form GSTR-3B. The respondents could not have invoked the provisions of Section 75(12) of the said Act, nor could the respondents claim that the demands made by the respondents are based on admission made by the petitioner. Further, having regard to the provisions of the said Act as provided in Section 61(3) of the said Act, in case the explanation furnished by the petitioner is found unacceptable there is no option but to initiate appropriate action under the provisions of Section 65 or 66 or 67 or 73 or 74 of the said Act and not Section 75(12) of the said Act. Since the order dated 20th December, 2024 has been set aside the consequential demand raised by the respondents in Form GST DRC 07 dated 6th January, 2025 for the tax period 2020-21 stands quashed - Petition disposed off.

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• 2025 (5) TMI 913
  Issuance of SCN u/s 74 of the West Bengal GST/CGST/IGST Act, 2017 invoking the extended period of limitation - HELD THAT:- Upon going through the provisions of the said Act and noting the explanation provided in Section 74A of the said Act, it is opined that the petitioners have been able to make out an arguable case. The writ petition shall be heard. However, taking note of the fact that an adjudication order has already been passed, the petitioners should be put to terms. Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date. Reply if any thereto, be filed within four weeks after the summer vacation - Liberty to mention.

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• 2025 (5) TMI 912
  Wrongful availment of Input Tax Credit on the basis of certain differences in the returns filed by the Petitioner - challenge to N/Ns. 56/2023-Central Tax dated 28th December 2023 and 56/2023-State Tax dated 11th July 2024 - no reply has been filed to the SCN by the Petitioner and it appears that the Petitioner has missed the SCN - Violation of principles of natural justice - HELD THAT:- This Court is of the opinion that since the Petitioner has not been afforded an opportunity to be heard and the said SCN and consequent impugned order have been passed without hearing the Petitioner, an opportunity ought to be afforded to the Petitioner to contest the matter on merits. The impugned order is set aside. The Petitioner is granted 30 days time to file the reply to SCN. Upon filing of the reply, the Adjudicating Authority shall issue to the Petitioner, a notice for personal hearing - petition disposed off.

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• 2025 (5) TMI 911
  Rejection of petitiner s appeal on the ground of delay in preferring the Appeal by the petitioner as well as order of cancellation of registration dated 14th July, 2022 passed by the respondent No. 2 - cancellation of registration of petitioner - non-filing of returns for continuous period of six months - HELD THAT:- Without entering into the merits of the matter, the impugned order dated 14.07.2022, Appellate Order dated 24.01.2024 as well as the Order of rejection of revocation application dated 15th March, 2024 filed by the petitioner are hereby quashed and set aside and the matter is remanded back to the respondent No. 2 at the show-cause notice stage and the petitioner is directed to file belated returns as per the provisions of Section 39 of the GST Act from April, 2020 onwards till date and the respondent-Authority is directed to consider such returns if the petitioner pays the outstanding tax, if any, along with interest and penalty. It would be open for the respondent-Authorities to take appropriate proceedings in accordance with law except non-filing of returns for more than six months. Petition disposed off.

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• 2025 (5) TMI 910
  Challenge to initiation of proceedings by the respondents by issuing a show cause in Form GST DRC 01 dated 4th April, 2024 - levy of GST - economic surplus or profit earned by the petitioner as the brand owner of alcoholic liquor for human consumption - HELD THAT:- Prima facie, it would transpire that the petitioner is seeking for a declaration that the economic surplus earned and retained by the petitioner as brand owner of alcoholic liquor for human consumption is not liable to GST. In this context, it may be noted that in the preservice tax regime by Circular dated 30th October, 2009 the Government had clarified that the surplus earned by the brand owner being in the nature of business profit does not fall within the purview of direct tax and accordingly not be chargeable to service tax. Having regard thereto, and without trying to pre-adjudicate the show-cause, the petitioner has been able to raise a jurisdictional issue and accordingly the writ petition is admitted for being heard - Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date. Reply thereto, if any, be filed within four weeks thereafter. Liberty to mention.

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• 2025 (5) TMI 909
  Cancellation of registration of petitioner - non-filing of returns for a continuous period of six months - suspension of registration without giving an opportunity of hearing and without recording any reasons - violation of principles of natural justice - HELD THAT:- The petitioner has failed to comply with the provisions of the GST Act and as such, the registration of the petitioner was liable to be cancelled as per section 29 (2) (c) of the GST Act. However, it is also pertinent to note that the petitioner has paid the GST along with interest and penalty and the petitioner is also ready and willing to abide by the provisions of the GST Act and the Rules, as stated at bar by learned advocate for the petitioner and the petitioner has also showed willingness to file an undertaking to that effect. Impugned show cause notice dated 09.11.2022 and impugned order dated 16.02.2023 are hereby quashed and set aside - petition allowed.

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• 2025 (5) TMI 908
  Cancellation of GST registration due to non-filing of returns for a continuous period of six months - petitioner was not provided an effective opportunity of hearing - violation of principles of natural justice - HELD THAT:- It is apparent that the petitioner has failed to comply with the provisions of the GST Act and as such, the registration of the petitioner was liable to be cancelled as per section 29(2)(c) of the GST Act. However, it is also pertinent to note that the petitioner has paid the GST along with interest and penalty and the petitioner is also ready and willing to abide by the provisions of the GST Act and the Rules, as stated at bar by learned advocate for the petitioner and the petitioner has also showed willingness to file an undertaking to that effect. Impugned show cause notice dated 12.10.2022 and impugned orders dated 09.11.2022 and 18.09.2023 are hereby quashed and set aside - Petition allowed.

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• 2025 (5) TMI 907
  Validity of SCN issued - reversal of ITC - Non-speaking order - violation of principles of natural justice - HELD THAT:- On perusal of the material available on record as well as the affidavit-in-reply filed on behalf of the respondent, it is not denied that the petitioner has reversed the Input Tax Credit prior to issuance of the show-cause notice. It also appears that only because the petitioner could not file the reply to the show-cause notice pointing out such facts, resulted into passing the impugned Order-in-Original under Section 73 of the GST Act on the ground that the petitioner did not reverse the Input Tax Credit within the time prescribed under Section 39 of the GST Act. However, in view of the amended provisions of Section 16 (5) of the GST Act, the petitioner is entitled to file returns for claiming Input Tax Credit for financial years 2017-18 to 2020-21 but in the facts of the case, the petitioner has incorrectly claim the Input Tax Credit on the exempted goods which was required to be reversed as per proviso to Section 39 (9) of the GST Act, however, the petitioner has reversed such Input Tax Credit beyond the time prescribed under Section 39 (9) of the GST Act and therefore, the respondent-Authorities without considering the fact that the petitioner has already reversed the Input Tax Credit has again asked the petitioner to reverse the Input Tax Credit resulting into double payment of tax by the petitioner, instead, respondent-Authorities ought to have issued the show-cause notice for interest or penalty to be levied for late reversal of the Input Tax Credit by the petitioner as per the provisions of Section 50 of the GST Act. Be that as it may, in the facts of the case as the petitioner has not filed any reply in spite of providing sufficient opportunity by the respondent-Authority and considering the fact that there was already reversal of the Input Tax Credit, the respondent-Authority without verifying the data available on the GSTN portal has passed the impugned order relying only upon the provisions of Section 39 (9) of the GST Act. The impugned show-cause notice which ought to have been issued for the purpose of levy of interest or penalty for late reversal of Input Tax Credit by the petitioner and not for availing of the Input Tax Credit by the petitioner on the exempted goods. In such circumstances, the respondent-Authority was either required to pass an order to recredit the Input Tax Credit already reversed by the petitioner with retrospective effect or to charge only interest and penalty as per the provisions of the GST Act. Conclusion - The reversal of ITC beyond the prescribed time should attract interest and penalty but not double recovery of tax. The authorities must consider actual reversal effected before issuing demand and ensure compliance with principles of natural justice. The mode of service by uploading on portal, while statutorily valid, must be balanced against the right to effective notice and hearing. The matter is remanded to the respondent-Authority to pass a fresh de-novo order after providing an opportunity of hearing to the petitioner in accordance with law and consider the amount deposited by the petitioner accordingly - Petition allowed by way of remand.

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• 2025 (5) TMI 906
  Prayer for a direction upon the respondents not to impose or demand goods and service tax in respect of the first R.A. Bill raised by the petitioner in connection with the execution with the contract dated 14th March, 2024 - HELD THAT:- It is noted that since the nature of job covered under the contract is not exempted under the provisions of CGST/WBGST Act, 2017, the petitioner cannot evade the liability to make payment of GST. However, as per Sections 12 and 13 of the said Act, the time of supply of goods and the time of supply of services has been specifically provided and it has also been indentified that the liability to pay tax on goods and services shall arise at the time of supply as determined in accordance with the provisions of Sections 12 and 13 of the said Act. Having regard thereto, and having regard to the provisions contained in Section 31 of Sub-Sections (4) and (5) of Section 31 of the said Act, though the obligation to file returns is with the petitioner, however, the municipality also cannot evade liability to make payment of GST, if such GST is included in the invoices. This Court has, however, not gone into the issue as to whether the contract is a fixed rate contract and whether the tax component is required to be factored into the payment terms itself. It is for the parties to decide the same as per the contractual terms. At this stage there is no scope to grant any relief to the petitioner apart from the clarification as aforesaid being provided - Petition disposed off.

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• 2025 (5) TMI 905
  Challnenge to SCN for cancellation of registration dated 24.11.2023 and the order of cancellation of registration dated 12.12.2023 - SCN and the order of cancellation of registration do not contain the digital or physical signature of the proper officer - HELD THAT:- In M/S. BIGLEAP TECHNOLOGIES AND SOLUTIONS PVT. LTD. AND OTHERS VERSUS THE STATE OF TELANGANA AND OTHERS [ 2025 (3) TMI 111 - TELANGANA HIGH COURT ], this Court already opined that a valid document must contain the signature, name and designation of the officer. It is surprising in the manner the impugned show cause notice and the order of cancellation of registration are issued without mentioning the signature and name and no signature of the Superintendent is appended. Thus, both the impugned show cause notice and the order of cancellation of registration are set aside. Liberty is reserved to the respondents to proceed against the petitioner in accordance with law - petition disposed off.

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• 2025 (5) TMI 904
  Dismissal of appeal on the ground of time limitation - explanation for the delay not properly considered - HELD THAT:- It would transpire that the original order passed by the proper officer on 28th March 2024 for the tax period from 1st April 2018 to 31st March 2019 was based on a show cause which was not responded to by the petitioner. The explanation given by the petitioner and the challenge to such order is yet to be tested out as the matter was also not adjudicated by the appellate authority since the same was barred by limitation. Today, the petitioner has approached this Court insisting that the petitioner has a statutory remedy. The petitioner has been prevented from availing the same by reason of the appellate tribunal not being constituted. Having regard thereto, ordinarily this Court would be required to hear out this matter on merits, however, since the matter concerns computation of tax, if the matter is heard by the appellate authority at the first instance, it will be far more convenient to decide the factual issues considering the fact that the records are available on the portal which can be directly assessed by the appellate authority on the contrary for this Court to decide the matter the entire records which are only available electronically on the portal, would be required to be downloaded for being produced. Conclusion - In the fitness of things and considering the marginal delay, it would be proper to remand the matter back to the appellate authority for adjudication on merit. In the fitness of things and considering the marginal delay, it would be proper to remand the matter back to the appellate authority for adjudication on merit - Petition disposed off by way of remand.

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• 2025 (5) TMI 903
  Seeking grant of bail - compliance with mandatory procedural safeguards, including the provisions of Sections 41, 41A of the Cr.P.C. and Sections 47, 48 of BNSS or not - HELD THAT:- It is seen that there is no dispute in regards to the Arrest Memo issued by the respondent authorities by complying all necessary formalities under Section 69 of the CGST Act. But it is the issue raised by the petitioner that there was no proper compliance of Section 41/41A of Cr.P.C. which are mandatorily required to be followed. From the view expressed by the Hon ble Supreme Court in case of Radhika Agarwal [ 2025 (2) TMI 1162 - SUPREME COURT (LB)] , it is evident that though the CGST is a special enactment, but the same cannot be considered as a complete Code in itself as regards to the provision of search, seizure and arrest and as stated above, the provision of Code of Criminal Procedure would be applicable unless it is expressly or impliedly barred by the provision of the said Act. But, here in the instant case, it is seen that there is no compliance of Section 41/41A of Cr.P.C., which is mandatorily required to be followed as per the guideline of Hon ble Supreme Court in the cases of Arnesh Kumar Vs. State of Bihar [ 2014 (7) TMI 1143 - SUPREME COURT] and reiterated in Satender Kumar Antil Vs. CBI [ 2022 (8) TMI 152 - SUPREME COURT] . More so, there was also no compliance of Sections 47/48 of BNSS at the time of arrest made by the respondent authorities which is in violation of Article 21 22(1) of the Constitution of India and the ratio laid down by the Hon ble Supreme Court in the cases of Vihaan Kumar Vs. State of Haryana, [ 2025 (2) TMI 1104 - SUPREME COURT] , and Prabir Purkayastha Vs. State (NCT of Delhi), [ 2024 (5) TMI 1104 - SUPREME COURT] . Coming to the communication of reasons to believe , it is seen that admittedly the reasons to believe was duly recorded in the file at the time of issuing Authorization Letter of Arrest. It is also an admitted fact that it is an internal and confidential document when the arresting authority will record their reasons to believe before issuing any Authorization Letter - there is no compliance of Section 41/41A Cr.P.C., viz- a-viz the Grounds of Arrest, was also not communicated which are mandatorily required to be furnished and in the same time, the reasons to believe , as recorded by the authority concerned, was also not communicated to the present accused/petitioner which may be a grounds for consideration of bail. There is sufficient progress in the investigation of the case and most of the relevant documents are also found to be collected by the I.O. during investigation, it is found that further custodial interrogation of the present petitioner may not be necessary for the interest of investigation and therefore, this is a fit case to extend the privilege of bail to the accused/ petitioner. Conclusion - i) The reasons to believe should be furnished to the arrestee to enable him to exercise his right to challenge the validity of arrest. Exceptions are available in one-off cases where appropriate redactions are permissible, but the onus to justify redaction lies on the Department of Enforcement and the court is the final arbiter. ii) The absence of Document Identification Number (DIN) in the Authorization Letter and Grounds of Arrest, which are mandatory as per Circular No. 122/41/2019-GST, renders such documents invalid and is a good ground for granting bail. The petitioner is granted bail subject to conditions imposed - bail application allowed.

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• 2025 (5) TMI 902
  Levy of penalty u/s 129(3) of the CGST Act - transportation was in contravention of the provisions of the CGST/ SGST Act - petitioner submitted that after filing of this writ petition, the temporary ID has now been re-opened and therefore petitioner can access the communications from the appellate authority - HELD THAT:- Since the main grievance projected by the petitioner stands redressed by the temporary ID having been renewed/ reopened, the 2nd respondent must consider the appeal in a time bound manner and dispose of the same, after granting an opportunity to rectify the defects, if any. Petition disposed off.

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• 2025 (5) TMI 901
  Violation of Principles of natural justice - opportunity of hearing not provided - rejection of petitioner s appeal solely on the ground of delay under Section 107 of the GST Act - HELD THAT:- Principle is fairness and reasonableness of procedure and Judicial Review has been elaborately considered by the Hon ble Supreme Court in the case of Madhyamam Broadcasting Limited Vs. Union of India Ors. [ 2023 (7) TMI 1010 - SUPREME COURT] . This decision would assist the case of the petitioner in not providing copy of the notice timely through fair mode. On this short ground petitioner has made out a case so as to interfere with the order of the appellate authority dated 19.03.2024 as well as order of determination of tax dated 08.02.2021 and are set aside. Petitioner is now aware of the show cause notice and reminders, therefore, petitioner is hereby directed to furnish detailed explanation/ reply within a period of six weeks from the date of receipt of this order. Thereafter, the concerned authority shall proceed to pass further orders insofar as determination of tax, if any, and in accordance with law. The above exercise shall be completed by the official respondents within a period of two months from the date of receipt of petitioner s explanation/ reply to the show cause notice/ additional show cause notice etc. Petition allowed.

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• 2025 (5) TMI 900
  Job work as per the provisions of Section 2 (68) of the CGST Act or not - supply of service u/s 7 (1A) read with Para 3 of Schedule-Il of the CGST Act - tariff classification of the supply made by the Applicant - applicable rate of GST on the said supply - divergent views among the members. HELD THAT:- Since both members of this authority have divergent views on the application filed by the applicant, the matter is referred to Appellate Authority, Jaipur in terms of Section 98 (5) of the CGST Act, 2017.

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• Income Tax

• 2025 (5) TMI 899
  Validity of Notice issued u/s 148 - difference in the Material Advance and the amount of closing stock of raw material disclosed in the profit and loss account by the petitioner - HELD THAT:- On perusal of the RA Bill No. 3, it appears that the petitioner has received the Material Advance being the 75% of Average Product Procure Rate which was accounted for in the RA Bill by setting of the similar Material Advance received in the RA Bill No. 2 amounting to Rs.2,46,05,994/-. Thus, by considering the Material Advance, the respondent-Assessing Officer has jumped to the conclusion that there is understatement of the closing stock which otherwise also would be an opening stock for the subsequent assessment year and can never result into any escaped income. AO could not have assumed the jurisdiction to re-open the assessment on the basis of the information which is already available on record and considered during the regular course of assessment by the then AO by wrongly interpreting the material advanced equivalent to the closing stock of the raw materials. Notice hereby quashed and set aside. Decided in favour of assessee.

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• 2025 (5) TMI 898
  Revision u/s 263 - Disallowance u/s 80P (2) (d) - interest earned - ITAT deleted addition - HELD THAT:- As correctly held by ITAT PCIT erred in holding that the order passed by AO as erroneous and prejudicial to the interest of the Revenue on account of allowability of interest earned by the assessee from cooperative banks, coupled with the fact when the AO had made due enquiries on this issue, during the course of original assessment proceedings. PCIT by the Revision order u/s. 263 denied the benefit of deduction u/s. 80P (2) (d) being received from Cooperative Banks. Since the issue herein also identical with the decision rendered [ 2023 (9) TMI 547 - ITAT AHMEDABAD ] applying the same ratio, this appeal filed by the Assessee is hereby allowed.

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• 2025 (5) TMI 897
  Allowable expenditure on Debit under the head debtors - seized loose papers relied upon - Tribunal has come to the conclusion that debt/payment under the head debtors shown on payment side in loose papers A-15 is not an allowable expenditure because it is neither a back date claim nor can be considered as a discount and commission HELD THAT:- Tribunal considering the material available on record and in absence of any evidence to support the contention of the assessee that there is general trade practice in the line of business of allowing cash discount of 30% to 40% to the traders, has rightly come to the conclusion that debt under the head debtors in loose papers A-15 is not allowable expenditure and the amount shown on payment side of the loose papers also includes payments other than revenue expenditure such as repayment of term loan, payments to a new investment etc. and all payments are not relating to the expenditure and therefore the Tribunal has rightly come to the conclusion that merely because the credit side on the receipt side includes the sales then payments to debtor also is not required to be considered as an expenditure. We are of the opinion that there is no addition made by the Assessing Officer while computing the unaccounted sales but the AO has not allowed the claim made by the assessee for the payment shown under the head debtors which is upheld by the Tribunal on the basis of facts emerging from the records and therefore while considering the appeal u/s 260A of the Act, the findings of fact arrived at by the Tribunal are not required to be interfered when the same are not found to be perverse in the facts of the case. The appeals therefore being devoid of any merit are accordingly dismissed and the questions which are admitted are answered accordingly in favour of the Revenue and against the assessee.

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• 2025 (5) TMI 896
  Denial of deduction u/s 80P(2)(a)(i) - Application to condone the delay in filing the return u/s 139 (1) for two days rejected - petitioner did not furnish the documentary evidence showing that the person who was handling the affairs was ill - HELD THAT:- Circular issued by the CBDT, respondent no. 2 could not have rejected the application filed by the petitioner society u/s 119 (2) (b) of the Act more particularly when the reasons for which the petitioner society could not file return of income within prescribed period of time as per the provision of Section 139 (1) of the Act due to genuine hardship on account of health problems of the person who was handling the affairs of the petitioner society. The respondent no. 2 set aside the reasons given by the petitioner society on the ground that the petitioner society did not produce any corroborative evidence such as medical certificate or proof of treatment or hospital admission and discharge etc. of Mr. Rameshbhai Khristi ignoring the resolution passed by the petitioner society appointing temporarily Mr. Mukundbhai B. Vaishnav. Respondent no. 2 also did not consider the fact that Mr. Mukundbhai B. Vaishnav was not aware of the return filing provisions and therefore there as a delay in filing the return of income more particularly when filed the return of income to avail deduction u/s 80P (2) (a) (i) of the Act was made mandatory with effect from 01/04/2018 i.e. for the assessment year 2018-19-the year under consideration. Respondent no. 2 ought to have condone the delay for filing the return of income as deduction under Section 80P (2) (a) (i) of the Act could not have been denied which was otherwise available to the petitioner. It is also pertinent to note that return of income was filed late by only two days for the year under consideration. In view of the Circular no. 13 of 2023 issued by the CBDT to condone the delay in filing the return while exercising the powers u/s 119 (2) (b) of the Act, respondent no. 2 has committed an error in rejecting the application to condone the delay so as to enable the petitioner to avail the benefit of deduction u/s 80P (2) (a) (i) of the Act. Thus, the petition succeeds. The respondents are directed to pass fresh de-novo order by condoning the delay of two days in filing the return of income within a period of twelve weeks from the date of receipt of copy of this order so as to process the return of income.

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• 2025 (5) TMI 895
  Reopening of assessment u/s 147 - reason to believe - AO Ward 2 (1) (1), Ahmedabad jurisdiction to issue the notice for reopening - information made available on the insight portal regarding the alleged accommodation entries received by the petitioner in the bank account from Kushal Ltd, who was alleged to be an accommodation entry provider. HELD THAT:- AO, Ward 2 (1) (1), Ahmedabad would have equal jurisdiction to issue the notice for reopening and thereafter, he may transfer the case after obtaining permission from the higher authorities to the proper jurisdiction. It cannot be said that the respondent did not have jurisdiction to issue the notice for reopening upon receipt of the information, more particularly, when the petitioner has not informed the respondent with regard to the change of jurisdiction as averred in the additional affidavit-in-reply filed on behalf of the respondent as extracted here-in-above. Petitioner never informed about the change in PAN of the petitioner due to change of name to the respondent-Assessing Officer and as such, the impugned notice dated 31.10.2017 was issued in name of the petitioner, by the respondent for reopening of AY 2017-18 dated 31.10.2017. As in case of Abhishek Jain [ 2018 (6) TMI 211 - DELHI HIGH COURT] has also relied upon the decision in case of S.S. Ahluwalia [ 2014 (3) TMI 624 - DELHI HIGH COURT] to come to the conclusion that the notice in the facts of the said case, cannot be said to be without jurisdiction in view of the provision of section 124(1) of the Act which provides that the AO would have jurisdiction over the areas in terms of the directions issued as per the provision of section 120 of the Act. Therefore, there cannot be said to be lack of jurisdiction of the respondent-Assessing Officer while issuing impugned notice as the respondent, after change of name cannot be said to have, different territorial jurisdiction and all Assessing Officers within the same territorial jurisdiction are authorized to take action in accordance with law. Validity of reasons to believe - It appears that the respondent has failed to take into consideration the details of the accommodation entries alleged to have been taken by the petitioner from Kushal Ltd where the search has been conducted. No evidence much less a single evidence, was referred while recording the reasons vis-a-vis the alleged bogus accommodation entry obtained by the petitioner for the year under consideration. We are therefore, of the opinion that merely because name of the petitioner appears in the insight portal in connection with any search operation carried out, then it is the duty of the respondent-Assessing Officer to have material to have a live nexus with the information made available on the insight portal and the assessment records of the petitioner to form a bona fide belief that the income has escaped assessment. It appears that AO has issued the impugned notice for reopening only to make fishing and roving inquiry on the basis of information in the insight portal making allegations of credit entries in the books of accounts of the petitioner which is duly audited and income is offered to tax by filing the return of income. It cannot be said that AO could have formed a reasonable belief to arrive at prima facie conclusion on the basis of the information made available on the insight portal for assumption of the jurisdiction to issue the impugned notice for reopening of the assessment. Thus, impugned notice is not tenable in the eye of law as per the settled legal position as AO could not have formed a reason to believe to assume jurisdiction in absence of details of nature of transaction, date of transaction and any live nexus of the information with the transactions recorded and audited as per the books of accounts of the petitioner to come to even prima facie conclusion that the income has escaped assessment.

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• 2025 (5) TMI 894
  Revision u/s 263 - initiation of penalty proceedings under an incorrect section - AO initiated penalty proceedings u/s 271(1)(c) and the same para the penalty proceedings u/s 271AAB of the Act were also initiated by issuance of notice u/s 274 of the Act. Whether initiation of penalty proceedings under two sections by A.O. by recording satisfaction for one section makes the order erroneous and prejudicial to interest of revenue and revisional authority can direct A.O. to initiate penalty proceedings under other section after recording satisfaction? HELD THAT:- Section 271 of the Act stipulates that the penalty may be imposed by the officers mentioned in section being satisfied during the course of proceedings that the ingredients of one of the clause (a) to (d) exist in the case. The five judges Bench of the Supreme Court in the case of S.V. Angidi Chettfar [ 1962 (1) TMI 10 - SUPREME COURT] dealing with Section 28 of the Indian Income Tax Act, 1922 (which is para-materia to Section 271 of the Act) held that satisfaction of the officer has to be during course of the proceedings and it cannot be arrived at after the conclusion of proceedings. In the present case, the A.O. recorded satisfaction for initiating penalty proceedings under Section 271AAB of the Act and initiated proceedings both under 271AAB and 271(1)(c) of the Act. The penalty proceedings under Section 271(1)(c) of the Act were vitiated for non recording of the satisfaction by the A.O. during the course of the assessment proceedings. It is a case of non recording of satisfaction u/s 271(1)(c) of the Act and not case of wrong mentioning of section as A.O. initiated proceedings under both the sections but recorded satisfaction for one section. Revisional order directing A.O. to initiate penalty proceedings u/s 271(1)(c) of the Act by recording independent satisfaction is not justified as reasons cannot be recorded after culmination of proceedings. The order of the tribunal quashing the order of the revisional authority is upheld. Decided against revenue.

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• 2025 (5) TMI 893
  TP Adjustment - disallowance of management fees as claimed by the assessee - CIT(A) noted that the order passed by the TPO for the immediate preceding year, i.e., AY 2012-13 was challenged by way of an appeal before CIT(A) and the appeal filed by the assessee was allowed HELD THAT:- It is not in dispute that the said order has attained finality, as the revenue could not prefer an appeal on account of the appeal being dismissed on the ground of low tax effect. Be that as it may, we find that the TPO though selected CUP as the method for benchmarking in such a situation, he failed to cite even a single comparable company with a similar comparable service. Despite the assessee having submitted the detailed nature of service received and benefit obtained by it, we find that the order passed by the [CIT(A)] to be an elaborate order considering all the facts and figures placed before it. Ultimately the appeal was partly allowed. The revenue carried the matter by way of appeal to the learned Tribunal and we find that the learned Tribunal re-appreciated the factual position and dismissed the appeal filed by the revenue. Thus, it is relevant to note that Tribunal has recorded a specific factual findings that the claim of management fee expenses has been accepted by the department and no addition has been made for the same in the assessment year 2014-15 and assessment year 2015-16. That apart, we find that the learned Tribunal has also taken note of the decision of the other High Courts and that of the Coordinate Bench of the learned Tribunal. Thus, we find that the learned Tribunal has upon re-appreciation of the factual position rightly dismissed the appeal filed by the revenue and we find no good ground to interfere with the said order.

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• 2025 (5) TMI 892
  Reopening of assessment - basis of the materials collected during search and seizure operation - period of limitation - reason to believe or mere change of opinion - HELD THAT:- The assessment was carried out at the first instance on the basis of the materials collected during search and seizure operation including the ledgers/cash book of different years found in the tally data of the petitioner and also the appraisal report based thereupon. Appraisal report was placed before the AO to examine the claim. If the same material formed the basis of the AO to pass the original assessment order, the reopening of the assessment by issuance of notice u/s 148 of the Act would be a mere change of opinion of the AO and not a case of reason to believe on basis of the material which has subsequently come to his notice and/or which the assessee failed to truly and fully disclose during assessment proceedings. This is a case where the assessee had not submitted any books of account, ledgers, bills, vouchers or supporting evidence and the AO proceeded to assess his returns on the basis of the materials collected during search and seizure operation including the appraisal report based upon that. Therefore, reopening of assessment on the ground that the income liable to tax has escaped assessment as per the ingredients of Section 147 either on account of failure to truly and fully disclose the full details of the income derived by the petitioner or on the basis of materials subsequently coming to the notice of the Assessing Officer are not satisfied. Therefore, the initiation of the reassessment proceedings by issuance of notice u/s 148 following the provisions of Section 147 is bad in law. The first issue is answered accordingly. Whether initiation of the proceedings was barred by limitation as provided u/s 149 (1) (b)? - We are satisfied that as per the existing provisions of Section 149 (1) (b) which stood amended by the Finance Act of 2021 with effect from 01.04.2021, the reassessment proceedings could be initiated beyond the period of four years up to six years counted from the end of the concerned assessment year i.e. 31.03.2015 up to 31.03.2021. Petitioner has wrongly interpreted the provisions of Section 149 (1) (b) in that regard as the relevant provisions of the Act quoted above do squarely indicate otherwise. As such, the notice u/s 148 was not barred by limitation. Whether the PCIT was competent to grant permission for initiation of reassessment proceedings ? - We are once again clear in our mind that as per the provisions of Section 151 which stood before its amendment by the Finance Act of 2021 with effect from 01.04.2021, PCIT was fully competent to accord permission for reopening of assessment beyond the period of four years as prescribed under Section 149 (1) (b). Petitioner has laboured under a misconception of law in that regard. Therefore, the issue is answered in favour of the revenue. Whether the notice u/s 148 uploaded on the portal on 01.04.2021 was beyond the period of limitation as the Assessing Officer was bound to issue notice for reopening assessment till 31.03.2021 and as such the same is bad in law ? - Division Bench of the Jharkhand High Court in case of Prakash Lal Khandelwal [ 2023 (3) TMI 1054 - JHARKHAND HIGH COURT ] had the occasion to examine the use of the expressions in different provisions of the Income Tax Act in the context of the language used in Section 153 (3). It was held that making of order , issue of order and uploading of order on web portal or communication of order are all different acts or things. In the facts of the said case, it was held that Section 153 (3) regulates only making of order. There is no restriction or limitation period prescribed under Section 153 (3) for issue of order , uploading of order on web portal or communication of order . The opinion of the Apex Court as laid down in the case of CIT versus Mohammed Meeran Shahul Hameed [ 2021 (10) TMI 363 - SUPREME COURT ] while interpreting Section 263 of the Income Tax Act, 1961 which uses similar expression like Section 153 (3) was also referred to and relied upon. The learned Court after going through the provisions of the Act, the opinion of the Apex Court, dispelled the contention of the petitioner that though the assessment order was dated 31.03.2021 but since it was uploaded on the next day i.e. 01.04.2022 the same was barred by limitation. It opined that different expression used by the Legislature at different places has certainly a different objective. Making of the order and communication of the order are two different things. Even the circular No.19 of 2019 dated 14.08.2019 relevant to the issue in the said case and relied upon by the assessee stipulated communication of the order and not making of the order as it said that every communication relating to assessment, appeal, order, etc. shall have a DIN on the body of the order. On facts, in the present case, it is undisputed that the Assessing Officer had digitally signed the notice under Section 148 of the Act on 31.03.2021 at 7.01 p.m. As such, it was not barred by limitation though it may have been uploaded on the portal on 01.04.2021. The instant issue is, therefore, answered against the assessee in favour of the revenue. We are of the considered opinion that the reopening of the assessment of the petitioner for the assessment year 2014-2015 as per the impugned notice dated 31.03.2021 under Section 148 following the provisions of Section 147 of the Act was bad in law. The materials relied upon by the Assessing Officer were not such which had subsequently come to his notice rather they were very much part of the assessment proceedings i.e. the appraisal report based on the search and seizure operation. The impugned notice dated 31.03.2021 and the order rejecting his objection dated 21.02.2022 are accordingly set aside. WP allowed.

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• 2025 (5) TMI 891
  Reassessment proceedings - registration u/s 12A denied - Form 10 under Section 11(2) was cumulatively filed for five years instead of individually - HELD THAT:- Writ petition can be disposed of directing the competent among the respondents to consider and pass orders on Ext.P10 application filed under Section 119(2)(b) of the Act, after affording an opportunity of hearing to the petitioner, as expeditiously as possible, and at any rate, within a period of one month from the date of receipt of a certified copy of this judgment. Pending consideration of the matter, any demand arising out of Ext.P8 (as confirmed by Ext.P9) shall remain suspended.

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• 2025 (5) TMI 890
  Rectification u/s 254 - sole basis of the assessee s plea is that the Tribunal ought to have remanded the matter to the AO instead of the CIT(A), which according to the assessee, constitutes a mistake apparent from record - HELD THAT:- In our considered view, this contention cannot be sustained under the limited scope of section 254(2), which empowers the Tribunal only to rectify errors that are self-evident, patent, and manifest from the record. A review or reconsideration of reasoning or conclusion reached in the appellate order cannot be undertaken in the garb of rectification. The Bench in para 5 and 7 of the order has already recorded a categorical finding that the appeal before the CIT(A) was dismissed in limine without deciding the grounds on merits, and that there was no speaking order passed on any of the grounds of appeal. This decision was taken after appreciating the entirety of facts, rival contentions, and legal framework. It cannot be said that there is any mistake apparent from record in arriving at such a conclusion. In the guise of this Miscellaneous Application, the assessee essentially seeks a review of the decision rendered on merits. It is settled law that section 254(2) does not vest the Tribunal with power to review or re-appreciate evidence or arguments with a view to arrive at a different conclusion. We find no merit in the present application.

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• 2025 (5) TMI 889
  Taxability of interest received by the assessee - assessee is a Resident Welfare Association and had filed return of income in the status of AOP - HELD THAT:- We find that identical issue was considered in the case of Belaire Condominium Association [ 2018 (5) TMI 240 - ITAT DELHI ] as held that interest income of the assessee therein is not liable to tax. Decided against revenue.

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• 2025 (5) TMI 888
  Short-term capital loss (on which STT was paid) set off against short-term capital gains (on which STT was not paid) - HELD YTHAT:- As per the provisions of section 70(2) of the Act, the short-term capital loss can be set off against gain from any other capital asset. Section 70(2) of the Act does not make any further classification between the transactions where STT was paid and the transactions where STT was not paid. The emphasis of the AO on the term similar computation also only refers to the computation as provided under sections 48 to 55 of the Act. We find that while deciding a similar issue, in iShares MSCI EM UCITS ETF USD ACC [ 2024 (6) TMI 148 - ITAT MUMBAI ] following the decision of Rungamatee Trexim (P.) Ltd. [ 2008 (12) TMI 759 - CALCUTTA HIGH COURT] allowed the set off of short-term capital loss (on which STT was paid) against the short-term capital gains (on which STT was not paid). We find that the AO, while making the impugned additions, added the short-term capital gains which were already considered by the assessee while computing its total income amounting to Rs. 1309,50,27,488/-. Accordingly, the AO is directed to correctly compute the income of the assessee and levy the tax as per law. As a result, grounds no.1 to 4 raised in assessee s appeal are allowed.

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• 2025 (5) TMI 887
  Addition made on account of cash deposits during the demonetization period - assessee s argued that deposits represented genuine cash sales as recorded in the books of accounts and income tax returns. HED THAT:- On perusal of the cash book, we find that the said cash sales are duly reflected as receipts thereon and there is absolutely no negative cash balance with the assessee, meaning thereby the cash deposits made during the whole year including the demonetization period is squarely covered and explained out of cash balance available with the assessee. To the extent of sales made by the assessee, the stocks of home d cor items had been duly reduced. The assessee had furnished the sale invoices, purchase invoices, stock registers, VAT returns (both original and revised) cash book, entire books of accounts before the learned AO. None of these documents and records were even rejected by the learned AO. The assessee had filed revised VAT returns for the third quarter only to change the input tax credit figure thereon. The sales figure in original VAT returns and revised VAT returns remain unchanged. The sales made by the assessee had not been doubted by the revenue. Hence the revenue having accepted the sales made by the assessee, ought not to have made separate addition on account of cash deposits by treating it as unexplained. Otherwise, the same would amount to double addition made by the learned AO. On this count itself, the addition made on account of cash deposits deserves to be deleted. Appeal of the assessee is allowed.

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• 2025 (5) TMI 886
  Addition on account of director s remuneration on the basis of seized treating the same as bogus expenditure - HELD THAT:- Based on the statement of Smt Reenyu Goel, the AO made an addition which stood confirmed by the Learned CITA. Merely because a particular expenditure has been reflected in the books of the Assessee company, it does not become an allowable deduction. The Learned AO in the instant case had doubted the genuinity of the expenditure per se by placing heavy reliance on the statement of Smt Reenu Goel under section 132(4) of the Act. Hence, the onus is on the Assessee to prove that Smt Reenu Goel was indeed a director of the Assessee company, and she was paid director s remuneration for the services rendered. The Assessee company is also duty bound to prove the nature of services rendered by Smt Reenu Goel and the business nexus thereon. None of these facts were proved in the instant case except stating that the said sum of Rs 3 lakhs being reflected in the books of accounts of the Assessee company. Accordingly, we do not deem it fit to interfere in the order of the Learned CITA confirming the treatment of the Learned AO by treating expenditure to be bogus. Accordingly, the grounds raised by the Assessee are dismissed.

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• 2025 (5) TMI 885
  Unexplained money u/s 69A - Assessee submitted that the authorities below have accepted cash sales and taxed the income thereon - HELD THAT:- We have considered the nature of the business of the Assessee and also past history of cash sales and the cash deposit in the bank account. The entire sales made by the Assessee are reflected in the cash book and sales account which are supported by documentary evidence maintained in ordinary course by the Assessee and at no point of time, the stock register maintained by the Assessee has been disputed. The audited books of account of the Assessee were accepted and sales which are duly reflected in the books of account are offered for taxation by reflecting the same in the trading and profit and loss account of the Assessee. Thus, in our considered opinion the Lower authorities committed error in making/ addition on account of cash deposit arising out of the sale proceeds and the same will amounts to double taxation. We find no reason to sustain the addition made by the A.O. which has been upheld by the Ld. CIT(A). Accordingly the impugned addition is hereby deleted. Appeal of the Assessee is allowed.

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• 2025 (5) TMI 884
  Revision u/s 263 - cash deposit in the bank account - Validity of reassessment proceedings - HELD THAT:- After verifying the reply and the document produced by the Assessee, AO made no addition on account of cash deposit in the bank account and passed assessment order u/s 147/143(3) of the Act on 13/11/2018. Further, it is also contended by the Assessee that the Assessee has deposited the cash of Rs. 9,00,000/- on 07/02/2011. Thus, it is clear that, A.O. made proper enquiry and it is not the case that no enquiry has been made by the AO to invoke the provision of Section 263 by the PCIT. Thus, in our considered opinion, invocation of provision of Section 263 was nothing but fishing and rowing enquiry. Accordingly, the impugned order of the PCIT is hereby quashed. Appeal of the Assessee is allowed.

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• 2025 (5) TMI 883
  Disallowance u/s 40(a)(ib) - equalization levy for online advertisement - assessee pleaded that on bare perusal of the audited financial statements, it clearly reveals that assessee has not paid any consideration to a non resident for any advertisement or any other services on which equalization levy is deductible HELD THAT:- We find that assessee s submissions were not considered at all by the ld NFAC. NFAC is directed to considered all those submissions together with documentary evidences, if any, and pass an order de novo in accordance with law qua the issue of disallowance u/s 40(a)(ib) of the Act. The assessee is permitted to file fresh evidences, if any, in support of its contentions. All the evidences submitted by the assessee shall have to be admitted by the ld NFAC and the issue to be adjudicated afresh in accordance with law. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

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• 2025 (5) TMI 882
  Unexplained credits appearing in the bank account - HELD THAT:-AO was not correct in treating the entire cash deposits and credit entries in the bank account as income of the assessee without taking into account the debit transactions. Assessee has submitted that a detailed explanation in respect of cash deposits and credit transactions have been prepared which will be filed in the set aside proceeding. We, therefore, deem it proper to set aside the matter to the file of the JAO with a direction to allow another opportunity to the assessee to explain the source of cash deposits and the credit entries appearing in the bank accounts. The ground is allowed for statistical purpose.

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• 2025 (5) TMI 881
  Denial of exemption u/s 54F - No construction activity has been shown by the assessee - period of 3 years have already elapsed - HELD THAT:- Determination of cost of acquisition as on 01.04.1981 based on the valuation report of ld DVO in the case of Manjeet Singh is not correct. AO had indeed noted that the case was referred to DVO u/s 55A of the Act in the case of assessee itself for determination of cost of acquisition as on 01.04.1981. AO is directed to adopt the said valuation report for the purpose of determination of cost of acquisition as on 1.4.1981 for assessee herein. On perusal of the decision of Goetze India [ 2006 (3) TMI 75 - SUPREME COURT] referred by ld DR, we find that the appellate authority can always entertain a claim even though the same is not made in the return. Hence, we direct the ld AO to examine the claim of exemption u/s 54B and 54F of the Act afresh in accordance with law and uninfluenced by earlier observations made in the order. The assessee is at liberty to furnish fresh evidences, if any, in support of his contentions. With these directions, grounds raised by the assessee on merits are allowed for statistical purposes.

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• 2025 (5) TMI 880
  Addition on account of estimated cash sales of gold and silver during demonetization period - CIT(A) deleted addition - HELD THAT:- The sales actually made by the assessee in cash as well as credit have been duly reflected by the assessee in its profit and loss account and in the income tax return. Hence, any addition made on account of cash sales with or without any basis including estimated additions would only result in double addition. Hence, we do not find any infirmity in the order of the ld CIT(A) in deleting the addition. Addition made u/s 69C - treating interest paid as unexplained expenditure - - CIT(A) deleted addition - HELD THAT:- The sales actually made by the assessee in cash as well as credit have been duly reflected by the assessee in its profit and loss account and in the income tax return. Hence, any addition made on account of cash sales with or without any basis including estimated additions would only result in double addition. Hence, we do not find any infirmity in the order of the ld CIT(A) in deleting the addition. Appeal of the revenue is dismissed.

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• 2025 (5) TMI 879
  Reopening of assessment on the basis of approval granted by PCIT in mechanical manner without application of mind - information received from ITO Inv. Unit-1 Kolkata - unexplained cash credit u/s 68 - HELD THAT:- There is no satisfaction recorded by the AO for formation of belief and the AO has done only reproduction of the information received and concluded on that basis. We note from the above that the AO has not applied his independent mind to the information received from ITO (Inv.), Kolkata. We observe that the information received was extracted in the reasons recorded as they were received even without verifying the same whether those were correct or not and the assessment was reopened u/s 147. We also observe that there was total non-application of mind by the AO to the information received and he has only acted on the basis of borrowed satisfaction to reopen the assessment which is not permissible under the Act. In our opinion, the AO has to exercise powers as conferred upon him by section 147 r.w.s. 148 of the Act with great care and caution as by exercising the reassessment jurisdiction u/s. 147, the AO unsettles the already completed assessment putting the assessee to a huge inconvenience and harassment. In the present case, the AO has incorrectly reopened the assessment by not even verifying the facts that there was no such bank account of the assessee with ICICI Bank. Therefore, reopening of assessment is void ab initio and invalid in the eyes of law on the ground of non-application or independent application of mind to the information received from the wing as well as on barrowed satisfaction. Even on merit the case of the assessee is strong. The amounts have been received against sale of investments that were acquired in earlier year and duly disclosed in books of accounts and the returns of income. We note that the assessee in support of sale submitted copies of invoices, ledger of parties, bank statement highlighting receipt, names, addresses and PANs of the purchasers and their bank statements. There were no immediate cash deposits into their account. No defects have been found in the evidences adduced by the assessee. As such the assessee duly discharged its onus to prove the genuineness of the transactions. Moreover since the amount has been received against sale of investments, the purchase of which has been accepted and therefore, the amount received against sales cannot be doubted. The addition on account of Unexplained cash in hand was for the reason that the Ld. AO missed to consider the cash withdrawals from IDBI bank. Furthermore, a cash flow statement duly certified by a Chartered Accountant was also filed in remand proceedings, certifying that the assessee had made cash withdrawal from account at IDBI bank and also reconciled the cash in hand as on 31.03.2009. No adverse remarks have been made by Ld. AO. Considering these facts, we are of the considered opinion that the even the addition on merit has been wrongly sustained by the ld CIT(A). Appeal of the assessee is allowed.

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• 2025 (5) TMI 878
  Validity of reopening of assessment - Approval obtained by non specified authority - HELD THAT:- Since the facts of the instant case are identical to the facts in the case of Hareshkumar Dungarmal Jain [ 2025 (2) TMI 1179 - ITAT PUNE] therefore, respectfully following the same, we hold that since in the instant case notice u/s 148A(d) of the Act has been issued on 27.07.2022 which is beyond the period of three years from the relevant assessment year and the approval has been granted by the PCIT for reopening of the case instead of Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, therefore, such approval being not in accordance with law, we hold that the entire re-assessment proceedings are vitiated. Appeal filed by the assessee is allowed.

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• 2025 (5) TMI 877
  Validity of assessment order passed u/s 153C r/w section 143(3) as barred by limitation - Scope of six-year and ten-year periods - HELD THAT:- AO of the assessee assumed jurisdiction on the date when the AO of the searched person handed over books of account or documents or assets seized (in short incriminating material ) to the AO of the assessee. In the present case, the said date is undisputedly 29.06.2021. Thus, in the case of assessee the year of search would be 2021-22 relevant to AY 2022-23. As per the provisions of section 153C(1) AO if satisfied that books of accounts for the document seized or requisitioned have a bearing on the determination of the total income of other person for six assessment years immediately preceding assessment year relevant to previous year in which search is conducted or requisition is made, he can proceed to open assessments for such six assessment years immediately preceding assessment year. The assessment year 2012-13 clearly falls beyond the period of six years. Hence, assessment is barred by limitation. Even, if period of 10 years is to be reckoned in accordance with the amendment by the Finance Act, 2017, the impugned assessment year falls beyond the period of ten years. We find that coordinate Bench in the case of MG Fincap (P) Ltd. [ 2024 (7) TMI 1634 - ITAT DELHI] in an identical case wherein assessment was made for AY 2012-13 u/s. 153C of the Act on the basis of information received consequent to search in the case of Rakesh Jain Group and Prahlad Kumar Agrawal, following the decision rendered in the case of Pr. CIT vs. Ojjus Medicare Pvt. Ltd. Ors. [ 2024 (4) TMI 268 - DELHI HIGH COURT] held that the assessment year 2012-13 falls beyond the relevant assessment year and held the assessment made in 2012-13 u/s. 153C of the Act beyond limitation. Decided in favour of assesee.

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• 2025 (5) TMI 876
  Validity of re-assessment order passed u/s 147 r.w.s. 144B - addition u/s. 56(2)(vii)(b)(ii) of the Act - Clubbing of minor son s income - assessee categorically explained that the minor son s income was clubbed with the return of income filed as per clause (a) of Explanation to section 64 of the Act, in the hands of the mother, therefore, reopening of minor son s income in the hands of the father [assessee herein] is not proper in law. HELD THAT:- The income-tax return filed by the mother on 08.08.2015, wherein the minor son s income is also shown by her. The assessee also explained in his reply letter dated 27-01-2022 to the show cause notice, produced copy of the Purchase Agreement dated 19-01-2015; Axis Bank statement of minor son from 01-01-2015 to 31-03-2015 wherein claimed the acquisition of property was loan taken from his uncle who is the Proprietor of Bhansali Associates. Without verification of the above details and records furnished by the assessee, the ld.AO proceeded with re-assessment proceedings on the wrong assessee viz. the father [assessee herein] which is against the provision of law. Further the clubbing of income in the hands of the mother, was also informed by the assessee before the lower authorities, the AO had not taken cognizance of the same and proceeded with re-assessment proceedings, which is clearly against the provisions of law. Therefore, the entire re-assessment proceedings itself is bad in law and the same is liable to be quashed. Consequently, the addition made by the AO is hereby deleted. Appeal of the assessee is hereby allowed.

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• 2025 (5) TMI 875
  Reopening of assessment u/s 147 - allegation of fresh material and is mere change of opinion - loss claimed by the assessee on trading shares of a penny stock company - HELD THAT:- Information available in insight portal which was collected in some other cases and nowhere, it was established that the assessee was part of the beneficiary. AO has failed to appreciate the fact that the assessee was having closing stock of 16155 shares of Stampede Capital Ltd. however, the AO has included this stock in the sale and loss thereon. Clearly there is no basis with the AO to support the allegation that the transaction of purchase and sale of shares of M/s Stampede Capital Pvt. Ltd made by the assessee were bogus. The assessee has been able to discharge the onus casted upon it to prove the genuineness of the transactions and was accepted by the Department in the order passed u/s 143(3), therefore, now alleging the same as bogus is nothing but mere change of opinion. Assessee appeal allowed.

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• 2025 (5) TMI 874
  TP adjustment on outstanding receivable from AE - international transaction or not? - HELD THAT:- Adjustment made by the TPO towards interest on receivables, which is well within the definition of international transaction. Therefore, we are in agreement with the ld. Sr. DR to the extent that the interest on outstanding receivables to AE is an international transaction. Assessee contended that it had not charged any interest on receivables from third parties - Assessee has not demonstrated whether similar services were provided to the other unrelated parties where no interest was charged. Thus this issue needs to be examined by the AO/TPO and if it is found that similar services were rendered to unrelated parties from whom no interest was charged on outstanding receivables, no notional interest is required to be imputed in the hands of the assessee on the outstanding receivable from AE s. With these directions, we deem it fit to restore this entire issue to the file of ld. AO/ TPO for de novo adjudication in accordance with law. Needless to mention that reasonable opportunity be given to the assessee of being heard with liberty given to the assessee to file additional evidences, if any, in support of its contentions. Appeals filed by the assessee is partly allowed.

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• 2025 (5) TMI 873
  Disallowance of deduction@ 200% u/s 35(2AB) in respect of the R D expenditure claimed - CIT(A) s action of allowing the normal deduction for the balance capital expenditure u/s 35(1)(iv) which was not allowed for weighted deduction u/s 35(2AB) of the Act by the DSI - HELD THAT:- We find this particular issue to be squarely covered in the favour of the assessee by the decision rendered in their own case for AY 2018-19 [ 2025 (3) TMI 1153 - ITAT CHENNAI] wherein it was held that, the deduction for capital expenditure incurred by the assessee for scientific research at its approved R D facility, if not approved for weighted deduction u/s 35(2AB) is otherwise allowable as normal deduction u/s 35(1)(iv) of the Act. No reason to interfere with the reasoning given by the Ld. CIT(A) for deleting the impugned disallowance made by the AO. Overall therefore, all the grounds raised by the Revenue are dismissed.

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• 2025 (5) TMI 872
  Addition based on report of DVO as obtained in co-owners case - HELD THAT:- AO should form an opinion that value so claimed by assessee is less than its Fair Market Value (FMV). Only in such a scenario, the value so claimed by assessee is less than its Fair Market Value in the opinion of AO, matter can be referred to valuation officer. In a scenario, where the value so claimed by the assessee is more than its fair market value, the matter could not be referred to the valuation officer. It was ultimately held that the AO was not empowered to refer the matter to the valuation officer, even as per the erstwhile provisions of section 55A(a) prior to amendment by the Finance Act, 2012. Considering the decision of Gauranginiben S. Shodhan Ind. [ 2014 (2) TMI 78 - GUJARAT HIGH COURT] and Puja Prints [ 2014 (1) TMI 764 - BOMBAY HIGH COURT] and respectfully following the same hold that reference made to the DVO by AO Officer for determination of Fair Market Value was not valid, so no reliance can be made on his report. Therefore, the addition based on such report of DVO, which is obtained in co-owners case, is not legally sustainable. Thus, the assessee succeeded on legal plea. No contrary facts or law is brought to my notice to take other view. In the result, the grounds of appeal raised by the assessee are allowed.

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• 2025 (5) TMI 871
  Disallowance u/s.14A r.w. Rule 8D - CIT(A) deleted addition - HELD THAT:- As respectfully following the decisions of the coordinate benches in earlier years [ 2023 (1) TMI 63 - ITAT MUMBAI ] we hold that the decision of Ld. CIT(A) deleting the disallowance u/s 14A Rule 8D is justified. We, therefore, are not inclined to interfere with the order of Ld. CIT(A) Addition u/s 5 - long-term loans and advances wherein provisions for doubtful loans were shown - As no interest from this loan was declared in the income, Ld. AO asked the assessee to show cause as to why the interest calculated @9% on this amount should not be treated as income u/s 5 - HELD THAT:- As per consolidated order for AY 2018-19, AY 2017-18 and AY 2016-17 [ 2023 (1) TMI 63 - ITAT MUMBAI ] Decision of Ld. CIT(A) to delete the addition u/s 5 is justified and therefore upheld. Accordingly, the appeal of the revenue on this ground is dismissed.

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• 2025 (5) TMI 870
  Revision u/s 263 - AO overlooked alleged discrepancy in stock amount and overlooked the fact of whether, condition to claim deduction u/s 80IB(10) had been fulfilled by assessee or not - HELD THAT:- Admittedly coordinate bench of this Tribunal in assessee s case for the year under consideration [ 2022 (4) TMI 31 - ITAT MUMBAI ] held that 263 has been wrongly invoked on the issue of closing stock. The assessing officer in the OGE passed to the 263 order has made addition only on this issue. We therefore hold that, addition deserves to be deleted as this issue gets merged with the order of this Tribunal under such circumstances, the addition deserves to be deleted. Appeal filed by the assessee is allowed.

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• 2025 (5) TMI 869
  TDS credit claimed in the return of income only on the basis that the same did not appear in the 26AS of the Appellant - Income from the trust being included and taxed in the assessee s return - HELD THAT:- Admittedly, the income of the trust has been clubbed in the hands of the assessee, and the department has accepted and taxed this income in the hands of the assessee. Hence, the assessee is entitled to claim credit for the TDS deducted on this income Return of trust could not be filed due to technical difficulties as the pop-up on the screen advised the trust as under: Under this scenario, filing of ITR 5 is not required. The share of income should be reflected in the personal return of income. Print out of relevant screenshot showing the above message from the department has also been filed by the assessee. Under these circumstances, there is no reason why the assessee should not be given credit for the TDS relevant to the income of the trust, which has been clubbed in the hands of the assessee. We, therefore, direct the jurisdictional AO to allow the credit to the assessee in respect of TDS on the income of the trust which has been taxed in the hands of the assessee. Appeals of the assessee are allowed.

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• 2025 (5) TMI 868
  Assessment u/s 10(3) of the Black Money - period of limitation - as argued if notice u/s 10(1) dated 16.02.2021 is taken for considering the limitation, then the assessment order is not time barred as per section 11(1) of the Act - HELD THAT:- As first notice issued u/s 10(1) of BMA is similar to the second notice issued u/s 10(1) dated 16.02.2021. We further observe that both the aforesaid notices in substance are similar. Further even if we consider section 7(1) of BMA which speaks of the tax authority who succeeds another authority as a result of change in jurisdiction or for any other reason, shall continue the proceedings from the stage at which it was left any other reason. Therefore, as per mandate of the Act, the tax authority DDIT/ADIT, Salem as a result of change in jurisdiction, if any, ought to have continued the proceedings u/s 10(1) of the BMA initiated by his predecessor from Chennai vide notice dated 07.01.2019 and the assessment order should have been passed on or before 31.03.2021. Furthermore, if we consider the Order passed the Hon ble Supreme Court in Suo Motu Writ Petition [ 2022 (1) TMI 385 - SC ORDER] extending limitation due to Covid-19 pandemic, then also the limitation to pass assessment order was till 28.05.2022 (i.e; 01.03.2022 + 90 days). However, in this case, the assessment order was passed on 25.03.2023. We are of the considered view that the assessment order dated 25.03.2023 is hopelessly time barred hence, we set aside the assessment order passed u/s 11(1) dated 25.03.2023.

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• 2025 (5) TMI 867
  Characterization of receipts - taxability of the gains arising from the surrender of LIC policy under the head Income from Other Sources instead of Capital Gains - HELD THAT:- ULIP is a combination of insurance and investment product, wherein part of the premium paid is invested in various fund options, such as equity, debt, or a mix of both. Therefore, ULIP has all the attributes of a capital asset, though now specifically included in the definition of the term provided u/s 2(14) of the Act. Thus, the fact that the ULIP is now treated as capital asset under section 2(14) of the Act further substantiates the claim of the assessee that the accretion on the surrender of ULIP is taxable under the head Capital Gains , since the legislature has also now recognised the fact that the ULIP is a capital asset. As evident from the record that the yearly premium payable exceeds the monetary limit provided in the 4th and 5th proviso to section 10(10D) of the Act. We find that similar findings were rendered in Mihir K Jhaveri [ 2023 (8) TMI 276 - ITAT MUMBAI] - Accordingly, we do not find any merit in the aforesaid submission of the learned DR. Thus, we are of the considered view that the LIC Market Plus-1 Policy, in which the assessee invested, comes under the purview of capital asset , and therefore the income accrued to the assessee from the surrender of the said policy is taxable under the head Capital Gains . Accordingly Ground raised in assessee s appeal is allowed. Disallowance of exemption claimed u/s 54 - assessee has sold two residential properties and invested the capital gains in one residential flat - HELD THAT:- We find that while deciding the issue whether the exemption u/s 54 of the Act will be available, in case capital gain arising from the sale of more than one residential house is invested in one residential house, the coordinate bench of the Tribunal in Ranjit Vithaldas [ 2012 (7) TMI 586 - ITAT MUMBAI] held that there is no restriction that capital gain arising from sale of more than one residential house cannot be invested in one residential house. No merit in the findings of the lower authorities that since the assessee has sold two residential house properties, the exemption u/s 54 of the Act is not available to the assessee. As the assessee has been found to have constructed a new house property within a period of 3 years from date of transfer of the original asset, and since the amount of capital gains was also deposited by the assessee in the Capital Gains Scheme Account in compliance with the provisions of section 54(2) we are of the considered view that the assessee rightly claimed exemption u/s 54 of the Act. Accordingly, the AO is directed to grant the exemption claimed by the assessee under section 54 of the Act. Ground No.3 raised in assessee s appeal is allowed.

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• 2025 (5) TMI 866
  Penalty imposed u/s 271(1)(c) - case was reopened for reassessment u/s 147 and the addition resulted subsequently on account of bogus purchases and gross profit was estimated @ 12.5% and the addition was thus made on estimation basis - HELD THAT:- We are not convinced by the conclusion of the Ld. AO which has been confirmed by the CIT(A) that when the addition was made on the estimation basis, it would fall within the mischief of Sec. 271(1)(c) of the Act making it a case of concealment of income or furnishing inaccurate particulars of income by the assessee. Moreover, we respectfully follow KP SANGHVI SONS LLP case [ 2024 (2) TMI 1552 - ITAT MUMBAI] and are of considered opinion that the revenue has failed to show that the assessee has concealed the particulars of income or has furnished inaccurate particulars of such income and thus the case of the assessee is not covered u/s 271(1)(c) of the Act. Accordingly the penalty imposed on accepting addition made on estimation basis is not sustainable - Appeal of assessee allowed.

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• 2025 (5) TMI 865
  Royalty receipts - receipts towards access cost allocation towards SUN software and SAP / GSAP software application - HELD THAT:- As relying on assessee s own case for AY 2012-13 [ 2025 (3) TMI 705 - ITAT MUMBAI ] we hold that the amount received towards access cost allocation towards SUN software and SAP / GSAP software application cannot be treated as royalty and the addition made in this regard is not sustainable. Treatment of cost allocations in respect of SUN / GSAP maintenance charges do not qualify as FTS - We have while considering the issue of SUN / GSAP application charges being treated as Royalty, have already held that the said receipts are not in the nature of Royalty by following the decision of the Hon ble Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt. Ltd.(supra). Accordingly the receipts towards maintenance of the SUN / GSAP application in our considered view will not fall within the purview of clause (4) of Article 13. Therefore the revenue s contention that the receipt towards maintenance is FTS in nature is not tenable. Further from the perusal of DRP order we notice that the DRP has observed that the nature of receipts are similar to BSS receipts which we have already held does not fall within FTS since the same does not make available technical knowledge, experience, skill, know-how or processes. Therefore on that count also we are of the view that the revenue s contention is not sustainable. Accordingly we direct the AO to delete the addition made towards SUN / GSAP maintenance charges treating the same as FTS. Treatment of cost allocations in respect of GST scoping charges as FTS - GST scoping / customisation receipts are incurred towards modifying the existing systems especially the billing module to comply with GST regulations and the said services are carried out by third party service providers. The assessee has made payments towards the same which is allocated to the Indian AE who paid the same to the assessee. In our view the impugned receipts are not towards any services rendered by the assessee which makes available any technical knowledge or skill and cannot be treated as FTS. We have while considering the issue of receipts towards SUN/GSAP application have held the same as not in the nature of Royalty. The GST scoping / customisation receipts are incurred as an enhancement to the existing systems the same do not fall with Clause (4) of Article 13 since the receipts towards the application is held to be not royalty. Thus, we hold that the treatment of GST scoping / customisation receipts as FTS is not correct and the addition made in this regard is liable to be deleted. Treatment cost allocations in respect of IT service and local project costs as FTS - From the perusal of the orders of the lower authorities we notice that the revenue has held the impugned services to be similar to BSS and accordingly held the same to FTS. We have already held that the receipt towards BSS services are not in the nature of FTS. Further our findings with respect to GST scoping / customisation charges with regard to actual services being rendered by third party and that by rendering of IT services the assessee does not make available any technical knowledge or skill is also to relevant. Accordingly we hold that the treatment of IT services is not in the nature of FTS and cannot be taxed in India.

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• 2025 (5) TMI 864
  TP Adjustment - comparable selection - Manipal Digital Systems Private Limited - HELD THAT:-Functions performed by Manipal Digital Systems Private Limited are not comparable to assessee. Hence, we are of the opinion that Manipal Digital Systems Private Limited is not comparable to the assessee, accordingly, we direct AO/TPO to delete it. CES Limited functionally non-comparable to assessee. It is also observed in the case of Vodafone Global Services Private Limited [ 2023 (4) TMI 1417 - ITAT PUNE] has held that CES Limited is not comparable to Vodafone Global Services Private Limited as CES Limited have mixed functions, as BPO/KPO. In these facts and circumstances of the case, we direct the Transfer Pricing Officer to exclude CES Limited as CES Limited is not comparable to assessee. MPS Limited is not comparable to the assessee due to extraordinary events of amalgamation and dissolution, hence we direct the AO/TPO to exclude it. Access Healthcare Services Private Limited has specifically mentioned in the Annual Report that it is doing Medical Billing and Revenue Cycle Management. Ld.AR based on Google search, filed a note on activities performed under Revenue Cycle management and pleaded that Revenue Cycle management needs specialized knowledge hence it is a KPO. However, it is observed that said note was not filed before the TPO/DRP. Therefore, the DRP/TPO had no opportunity to analyze the submission of the assessee on the issue of Revenue Cycle management. We deem it appropriate to set aside the issue of Comparability of Access Health Care Services P Ltd to the TPO for de-novo adjudication. The Assessee shall file all the details before the TPO. The TPO shall provide opportunity to the assessee. TPO shall try to find the exact function of Access Health Care Services P Ltd. Accordingly, this issue is set aside to TPO.

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• 2025 (5) TMI 863
  Disallowance of management fees u/s 40A(2)(a) - assessee is a listed company engaged in the business of manufacturing of ride control products and components thereof and its flagship company is Anand Group which has more than 19 companies in auto component manufacturing. Anand Automotive Private Limited (AAPL) is engaged in business of providing management and corporate services to group companies including the assessee - HELD THAT:- The assessee challenged the addition before the ld. CIT(A) who followed his own order for AY 2017-18 which was challenged before the Tribunal and the Coordinate Bench [ 2023 (5) TMI 1440 - ITAT MUMBAI] has deleted the disallowance assessee has brought on record the entire details of management services rendered by AAPL group company, along with copies of invoices raised and also ledger account of management fee in books of account, which has been duly examined. The assessee company has also brought on record detailed quantification of services rendered by group company, but the AO without questioning the same on merit merely proceeded to made the addition on ad hoc basis by way of estimation and guess work which is not sustainable in the eyes of law. DR for the revenue has failed to dispute the legal proposition mooted out by the coordinate bench of Tribunal in case of Spicer India pvt. Ltd [ 2017 (4) TMI 908 - ITAT PUNE] wherein, identical services were also taken from AAPL @2.85% of sales of the assessee. Moreover, expenditure has to be examined with the businessman s stand point and revenue authority cannot sit in the chair of the businessman to decide as to availing of any services to run its business. Appeal filed by the revenue is dismissed. Deduction u/s 80G - claim denied on expenses disallowed on account of CSR - HELD THAT:- We are of the considered view that the Coordinate Benches have been consistently taking the stand that 80G deduction cannot be denied. The facts of the case in hand show that the assessee has submitted the receipts of the donees evidencing the eligibility of deduction u/s 80G As following case Ericsson India Global Services (P) Ltd. [ 2024 (3) TMI 306 - ITAT DELHI ] we do not find any reason to interfere with the findings of the ld. CIT(A). The decision relied upon by the ld. D/R Agilent Technologies (International) (P.) Ltd [ 2023 (12) TMI 1090 - ITAT DELHI ] is on different reasoning as the Co-ordinate Bench was of the opinion that CSR expenses cannot be allowed u/s 37(1) of the Act, therefore, no deduction is allowed u/s 80G, whereas in the case in hand, assessee has claimed deduction u/s 80G and not u/s 37(1). Appeals of the revenue are dismissed.

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• 2025 (5) TMI 862
  Addition on-money paid from undisclosed sources for purchase of flat at Chitragupt Nagar, Jaipur based on agreement for purchases of said flat - HELD THAT:- Based on the facts it is not clearly established that the assessee while vacating the possession of the property occupied gives the money for purchase of flat is against the common sense and therefore, the ld. AO has made the addition without bringing correct facts on record and therefore, we do not see any merit to sustain the addition and therefore, we direct the ld. AO to delete that addition. Based on these observations ground no. 1 raised by the assessee is allowed. Addition of advances given - Identity, genuineness and creditworthiness of the concerned person was not proved - HELD THAT:- Advance of loan given by the assessee cannot be termed as unexplained money as per the above definition but can be termed as unexplained money. Therefore, the invocation of the section while making the addition was wrong. Not only that it is not the case of section 69 of the Act as the source of advance has been noted down along with the noting of the advance made at page no. 61 of the seized diary and internal page 7 of the paper book. The amount was advanced out of the money received from Mausi sa has been accepted by the ld. AO as not pertaining to the appellant-assessee vide Table 1, Sr. no. 16 and page no. 19 of the assessment order. As per cash flow statement there was a receipt of Rs. 2 lac on 14.12.2012 from Mausi sa and out this amount Rs. 1 lac was advanced to Shri Bhanu Pratap and Rs. 50,000/- to Shri Ram Chandra Saini. Considering the discussion on facts we see no reason to sustain the addition and therefore, we direct the ld. AO to delete the addition. Based on this observation, ground no. 2 raised by the assessee is allowed. Investment in land through a sale agreement made which includes cash payment as an unexplained investment u/s 69 - HELD THAT:- As payment was made by the assessee merely based on the statement made by the assessee. But the ld. AR of the assessee submit that once the source of that money is explained the addition is not warranted. To support that contention the assessee also filed the affidavit too. Thus, the bench noted that the correct income should be taxed in the hands of the assessee and thus, the Bench is of the view that lis between the parties has to be decided on merits so that nobody s rights could be scuttled down without providing opportunity of being heard to the assessee. Considering that peculiar aspect of the matter we deem it fit to remand the matter to the file of the ld. AO who will consider the factual aspect of the matter as raised by the assessee after due verification of the facts and charge the correct income in the hands of the assessee after affording due opportunity to the assessee. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during proceedings before the ld. AO. Undisclosed interest income - HELD THAT:- AO has estimated the income as undisclosed interest income for an amount without any basis and cogent supporting material available on record and seized and therefore, in the search assessment without placing anything on record from the seized material that the assessee has earned any interest the same cannot be added. Considering that aspect of the matte we direct the ld. AO to delete that addition.

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• Insolvency & Bankruptcy

• 2025 (5) TMI 861
  Rectification of inadvertent typographical error - impermissible review of the earlier order, which the Adjudicating Authority is not empowered to undertake - HELD THAT:- The Appellant failed to refer to any material on record on the basis of which it can be held that Appellant was entitled for extinguishment of personal guarantees, including third party guarantees. The present was a sale of CD in liquidation as a going concern. There being no foundation for grant of relief of extinguishment of personal guarantees, the same was obviously held to be a typographical error by the Adjudicating Authority. The Adjudicating Authority passed the earlier order dated 10.05.2024 and is fully empowered to correct any typographical error by using its inherent powers. When a Court is satisfied that inadvertent typographical error has been committed, the Court is fully empowered to correct such inadvertent typographical error. The Appellant cannot be allowed to take advantage or benefit of any error in judgment, which has occurred inadvertently. Conclusion - There is no error in the order dated 04.10.2024, rectifying the inadvertent typographical error in the order dated 10.05.2024. Appeal dismissed.

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• 2025 (5) TMI 860
  Entitlement to suspended director of a corporate debtor for copy of resolution plan - HELD THAT:- The present is a case, the brother of the Appellant Joginder Singh has expressed intention to submit a plan who was also allowed time to file a plan by 03.02.2025, which is noticed in the Company Appeal (AT) (Insolvency) No. 619 of 2025 decided today. When the brother of the Appellant was submitting a plan, the RP was well within his rights to ask the Appellant to give undertaking that neither the Appellant nor any of related party shall submit the resolution plan. Giving the resolution plan to Appellant who was suspended director when his brother was intending to file resolution plan would have been opening the all relevant facts and the copy of the resolution plan. Hence, RP was right in asking the undertaking which was never given by the Appellant. Appeal dismissed.

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• 2025 (5) TMI 859
  Seeking initiation of CIRP - default committed by the Corporate Debtor in repayment of a financial debt - default falls within restricted period under Section 10A of IBC - record of default of in the records of the information utility - conclusive proof of the debt and default - liquidator of the alleged financial creditor has filed a petition for recovery of the amount and not for resolution of the Corporate Debtor against the regulations of the Code. Financial debt - Appellant conceded that Rs. 2.5 Crores might has been disbursed but not as loans and advances, since there is no contract or written document/ agreement for the same - HELD THAT:- The loans and advances have been clearly reflected in the audited financial statement of the Corporate Debtor which is adequate to establish that the money disbursed was indeed given as a loan. There is no law or provisions in the Code which requires that there has to be written contract or documentation to establish the loan. The reflection of the same in audited financial statements as well reflection in information utility i.e., National E-Governance Services Ltd., is good enough proof of financial debt. Hence, on this account, the arguments of the Appellant is rejected. The money disbursed of Rs. 2.5 Crores to the Respondent No.1 by Respondent No.2 indeed was a financial debt. Alleged default falls within restricted period under Section 10A of the Code - HELD THAT:- As regard, the alleged default falling in 10A exempted period of the Code, since one of the legal notice was issued by the Counsel of the Respondent No. 2 to the Corporate Debtor on 20.07.2020 and as such, as per the Appellant the same falls within the exempted period of 25.03.2020 to 25.03.2021 in terms of Section 10A of the Code - it is noted that in Part IV of Form I, filed along with application under Section 7 of the Code, under which default of Rs. 2.5 Crores was reflected as on 31.01.2019. It is a fact that other demand letter/ legal notice was issued on 20.07.2020, however, the original debt of default as reflected in Part IV is 31.01.2019 which is not covered under the exempted period in terms of Section 10A of the Code. Record of default of in the records of the information utility is a conclusive proof of the debt and default or not - HELD THAT:- The Rs. 2.5 Crores has been categorically reflected in the audited financial statements of the Corporate Debtor in the balance sheet as on 31.03.2020 as well as on 31.03.2022. This is good enough evidence of establishing the fact of debt payable to the Financial Creditor. The mere fact that the same was also been reflected in the record of the information utility (NESL) will not dilute the debt granted by the Financial Creditor to the Corporate Debtor and this recorded transaction of loan with the information utility is only as additional evidence of debt and default. In fact, the additional information as evident by the record of the information utility establishes the claims of the Financial Creditor. Thus, the contention of the Appellant in this regard stands rejected. Liquidator of the alleged financial creditor has filed a petition for recovery of the amount and not for resolution of the Corporate Debtor against the regulations of the Code - HELD THAT:- The Appellant pleaded that the role of the liquidator is limited in settling the assets available with entity under liquidator and should have taken action for the timely conclusion of liquidation process including selling non readily realizable assets including book debts through auctions based on valuation reports. It is the case of the Appellant that the alleged claims of Rs. 2.5 Crores payable by the Corporate Debtor should have been auctioned by the Respondent No. 2 rather than initiating CIRP proceeding against Corporate Debtor/ Respondent No. 1. In this connection, it is noted that the Respondent No. 2 / Liquidator had specifically taken approval of the Adjudicating Authority for instituting legal proceedings on behalf of the Respondent No. 2 including filing an application under Section 7 of the Code. Conclusion - The Respondent No. 2 is well within his rights to take any legal action including filing Section 7 application for recovering the recoverable dues from any entity like the Respondent No. 1 herein. It cannot be the case of the Appellant that the Respondent/ Liquidator should not have taken legal recourse for clear default by the Respondent No. 1. The Respondent No. 2 / Liquidator was within his right and was rather obligated under the Code and relevant regulations to do so. Appeal dismissed.

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• 2025 (5) TMI 858
  Admission of section 7 application - financial debt exceeding the threshold prescribed under Section 7 of the Insolvency and Bankruptcy Code, 2016 - existence of debt and default or not. Whether there has been debt of more than Rs. 1 Crore to meet the threshold as stipulated under Section 7 of the Code and whether there has been default by the Corporate Debtor? - HELD THAT:- The money indeed was disbursed by the Financial Creditor to the Corporate Debtor as well as to supplier of the machinery i.e., Respondent No. 4 based on the instruction of the Corporate Debtor. It is also fact that the total money disbursed was more than Rs. 1 Crore. We observe that the Corporate Debtor vide letter dated 18.01.2012 advised the Financial Creditor to disbursed an amount of Rs. 45,11,110/- to the account of the Corporate Debtor and Rs. 1,12,40,024/- in favour of Respondent No. 4. The necessary documentations have been annexed in the appeal. Thus, the money was paid as a loan by the Respondent No.1/Financial Creditor to the Corporate Debtor /Respondent No. 2 and therefore it is clearly established that the said amount meet the threshold criteria as stipulated under Section 7 of the Code. Whether there has been default or not? - HELD THAT:- It need to be appreciated that the proper and legally enforceable loan agreement was executed between the Financial Creditor and the Corporate Debtor. It is reiterated that the money was transferred by the Financial Creditor in the accounts of the Corporate Debtor and in the accounts of the machine supplier i.e. Respondent No. 4 at the instructions of the Corporate Debtor. Hence, the arguments of the Appellant that there has been connivance between the Respondent No. 1 and Respondent No. 4 and therefore, alleged financial debt cannot be legally enforced, is not tenable. The Impugned Order clearly establish the facts regarding debt and default which are basic ingredients to admit application under Section 7 of the Code. Conclusion - i) The arbitral award dated 21.02.2018 which crystallized the outstanding amount payable by the Corporate Debtor of Rs.1,42,95,144 along with interest @12% which constitutes a financial debt under Section 5(8) of the Code, and the non-payment of this award amount amounts to a default. ii) The Impugned Order clearly establish the facts regarding debt and default which are basic ingredients to admit application under Section 7 of the Code. Appeal dismissed.

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• 2025 (5) TMI 857
  Appointment of a Resolution Professional (RP) under Section 97 of the Insolvency and Bankruptcy Code, 2016 (I B Code) in proceedings initiated against personal guarantors under Section 95 of the Code - HELD THAT:- Apparently, the ground as pleaded and argued seem to be very logical enough because of the alleged defects which have been claimed to have chanced in the appointment of the Resolution Professional allegedly to be in violation of Sub-Section (4) of Section 97 to be read with Sub-Section (3) of Section 97 of I B Code. But the fact remains that the Appellant admits the fact that there had been a credit facility extended to the Corporate Debtor of which the Appellant was a personal guarantor and that the account was declared as a Non-Performing Asset on 29.08.2022, the Financial Creditor initiated proceeding under Section 95 of I B Code. This and the ground behind Section 95 proceedings have not been challenged by the Appellants. The stages of the proceedings from Section 95 to Section 100 do not have any adjudicatory effect and since it would be inclusive of Section 97 in itself, the entire cause agitated by the Appellant in the Company Petition as well as in the Company Appeal cannot be subjected to a judicial scrutiny either by the NCLT or this Appellate Tribunal as against the order passed by the NCLT. It is exclusively on the aforesaid ground that the Learned Tribunal has observed that since the entire exercise of powers of appointment of a Resolution Professional is being exclusively vested with the Learned Adjudicating Authority and particularly, the personal guarantor has got no role to play till the stage under Section 100 is achieved, and accordingly hold that the proceedings drawn by the Appellant by way of the aforesaid Company Petition is not tenable. Since, as per the Impugned Order under challenge and even as per Sub-Section (6) of Section 97, all rights of the Appellant are safeguarded by filing an objection against the report to be submitted, they cannot be said to be aggrieved persons by any of the actions taken up to the stage of Section 97 of I B Code. Conclusion - The appointment of the Resolution Professional under Section 97 of the I B Code in proceedings initiated under Section 95 against personal guarantors is a procedural step exclusively vested in the Adjudicating Authority. Personal guarantors do not have a right to challenge this appointment prior to the adjudicatory stage under Section 100. The impugned order appointing the RP was valid and in accordance with the statutory provisions. Appeal dismissed.

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• PMLA

• 2025 (5) TMI 856
  Money Laundering - attachment of properties acquired by the appellants prior to the period of the alleged predicate offence - proceeds of crime - attachment of properties which are already mortgaged with the banks and the physical possession of the same is also taken over by the mortgagee bank - absence of any apprehension for transfer or alienation of the said mortgaged property - Release of the attached properties, which are stated to be attached as value thereof by way of deposit of FDR. Attachment of properties acquired by the appellants prior to the period of the alleged predicate offence - proceeds of crime - HELD THAT:- There are no force in the first argument when the proceeds out of crime was not available with the appellant rather vanished and siphoned off, the property of equivalent value has been attached. Whether the properties which are already mortgaged with the banks and the physical possession of the same is also taken over by the mortgagee bank cannot be attached, in absence of any apprehension for transfer or alienation of the said mortgaged property? - HELD THAT:- As per Section 2(1)(za) of PMLA, 2002 defines Transfer as it includes sale, purchase, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien. Thus, even if the said properties are mortgaged with the bank or financial institution, even then, the appellants/mortgagors can transfer the said property by any other mode, without discharging the loan liability by any of the aforesaid means, without execution of any sale deed i.e. by way of taking more loan, if the value of the property is more than the amount of loan; can be gifted to any person along with rights and liabilities; the possession can be handed over to any third party by way of lease of any period (without knowledge to the ED and the mortgagee bank) etc. - the fact cannnot be ignored that proceeds of crime are already misappropriated/laundered by the appellants and were not available/traced during investigation of this case by ED. The attached properties were attached by ED as value thereof, in absence of direct/indirect proceeds of crime. Thus, any attachment under PMLA cannot be equated with type of attachment under SARFAESI, Act, on account of mortgage of the property. The purpose of attachment proceedings is to protect the property, till the conclusion of trial. In the present case, the prosecution complaint has been filed by the ED against the appellant, as pointed out by Ld. Counsel for the respondent. Once the prosecution complaint for commission offence u/s-3 punishable u/s 4 of PMLA is filed, wherein the attached properties are mentioned for purpose of confiscation, in case of conviction, then it becomes the case property, and hence, now it is the prerogative of the concerned court to decide the rival claims of the parties, if any. Release of the attached properties, which are stated to be attached as value thereof by way of deposit of FDR - HELD THAT:- In absence of any specific rule under PMLA for substitution of immovable property, this Appellate Tribunal cannot grant such permission to the appellants. Even otherwise, the total quantum of fraud is much more than the properties attached by ED, hence, the question of any substitution does not arise. It is correct that ED cannot investigate and file complaints qua the offence of benami properties under PBPT Act, but certainly, the properties can be attached under PMLA, if it is revealed that the said properties are purchased by beneficial owner in the name of benamidar in pursuance to conspiracy by committing a fraud on the bank on the shoulder of a benamidar. In the landmark case of Vijay Madanlal Chaudhary Ors. v. Union of India Ors. [ 2022 (7) TMI 1316 - SUPREME COURT (LB)] , the Hon ble Supreme Court of India has categorially observed that the objective of the PMLA, 2002 is to reach the proceeds of crime in whosoever s name they are kept, or by whosoever they are held. Hence, this issue is also decided in favour of the respondent ED and against the appellants. Conclusion - i) The expression proceeds of crime envisages both -tainted property as well as untainted property with it being permissible to proceed against the latter provided it is being attached as equal to the value of any such property or property equivalent in value held within the country or abroad. However, both the italicised categories would be liable to be invoked in cases where the actual tainted property cannot be traced or found out. ii) The definition of proceeds of crime is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property. If the property is taken or held outside the country, even in such a case, the property equivalent in value held within the country or abroad can be proceeded with. Appeal dismissed.

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• Central Excise

• 2025 (5) TMI 855
  Clandestine removal - demand baed on statements recorded and documents seized during investigation - admissible evidences or not - HELD THAT:- In this case the case of clandestine removal has been booked against the appellant on the basis of certain loose papers recovered during the course of investigation, on the basis of certain hard disk containing in the Computer Process Unit were recovered during the course of investigation and various statements cannot be recorded during the course of investigation. The charge of clandestine removal of goods is a serious charge and to prove clandestine removal of goods, this Tribunal in the case of Arya Fibres Pvt. Ltd. versus Commissioner of Central Excise, Ahmedabad II [ 2013 (11) TMI 626 - CESTAT AHMEDABAD] has laid down the test to verify the alleged clandestine removal of goods, and it was held that There should be corroborative evidence by way of statements of purchasers, distributors or dealers, record of unaccounted raw material purchased or consumed and not merely the recording of confessional statements. It is found that in this case, the name of the buyers are very much available with the Revenue, but no investigation was conducted with the alleged buyers by the Revenue to prove their case. Moreover, the name of transporters were also mentioned in the invoices, no investigation was conducted at the end of the transporters whether they have transported the goods or not. Further to manufactures, such a huge quantity of goods cleared without payment of duty, the production capacity of the appellant is required to be ascertained. Moreover, for manufacture of such a huge quantity, how much raw material procured by the appellant and from where, how much electricity has been consumed by the appellant, how much labour charges have been paid by the appellant no investigation was done to that effect. All these things are required to allege clandestine removal of goods. Further, how the payments of clandestine removal of goods is received by the appellant and how the payment of raw material made by the appellants. These efforts have not been made by the Revenue. Moreover, the case has been booked on the basis of kacha receipt during the course of adjudication and various statements recorded during the course of investigation. The statements recorded during the course of investigation are not admissible evidence to allege clandestine removal of goods. The charge of clandestine removal of goods on the basis of documents recovered during the course of investigation without corroboration are not relied upon documents - In the absence of any corroborative evidence to allege clandestine removal of goods, it is found that charge of clandestine removal of goods is not sustainable against the appellant and the same is on the assumption and presumptions, therefore, the duty cannot be demanded on the basis of assumptions and presumptions. Except the admitted demand by the appellant, rest of the demand is dropped. Consequently, no penalties imposable on the appellant. The appellant is required to pay admitted amount of duty along with interest, if not already paid. The currency seized during the course of investigation is required to be released to the appellant. Conclusion - i) Clandestine removal must be proved by tangible, corroborated evidence, not mere assumptions or internal records. ii) Statements recorded during investigation are inadmissible without examination and cross-examination under Section 9D. iii) Demand of duty, interest, and penalty cannot be sustained on the basis of uncorroborated evidence and procedural lapses. iv) Admitted and paid duty amounts must be accepted, but unsubstantiated additional demands must be dropped. Appeal disposed off.

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• CST, VAT & Sales Tax

• 2025 (5) TMI 854
  Interpretation and constitutional validity of purchase tax provisions under Section 5A of the Kerala General Sales Tax Act, 1963 and Section 7A of the Tamil Nadu General Sales Tax Act, 1959 - purchase of goods by the appellants from dealers who were exempted from payment of tax by virtue of notifications or exemptions issued under the Kerala Act or the Tamil Nadu Act - purchase which is liable to tax within the meaning of Section 5A of the Kerala Act or Section 7A of the Tamil Nadu Act? - purchase tax, as imposed by Section 5A of the Kerala Act or Section 7A of the Tamil Nadu Act, is a tax in the nature of manufacture or consignment tax or an inter-state levy, and therefore ultra vires the Constitution and beyond the legislative powers of the state legislature. HELD THAT:- The legal position is that exemption from payment of tax at the time of sale is a pre-condition for attracting Sections 5A and 7A respectively. Further, the fact that in case the goods were not exempt from payment of tax at the time of sale and the goods would have attracted tax at the first point of sale, is immaterial and inconsequential. Levy of purchase tax is governed by the provisions and stipulations of Sections 5A or 7A. They are independent and in a way constitute charging sections. Purchase tax is leviable on and payable by the purchaser. However, the legislations do not levy the purchase tax to tax the transaction of the sale and purchase twice. Instead, it levies purchase tax only where no sales tax was payable on the sale. Further, purchase tax has not been made leviable in all situations, except in three situations, namely, (a) where the goods on which no tax is paid were used in manufacture; or (b) where the goods were despatched out of the State other than by way of inter- State trade or commerce; or (c) where the goods are disposed of in a manner other than sale within the State. However, the need to satisfy the conditions do not change the nature of the charge, which is, tax on purchase. The challenge to the constitutional validity must be rejected on the basis of the ratio elucidated by this Court in Kandaswami [ 1975 (7) TMI 123 - SUPREME COURT] , Hotel Balaji [ 1992 (10) TMI 240 - SUPREME COURT] and Devi Dass [ 1994 (4) TMI 312 - SUPREME COURT] . The contention of the appellant-assessees that the constitutional validity of the impugned provisions was not examined while deciding Kandaswami ought to be rejected, even if we would accept that the question of constitutional validity was not directly addressed. Hotel Balaji specifically upholds the constitutionality of the impugned provisions, disagreeing with the opinion/ratio expressed in Goodyear [ 1989 (10) TMI 52 - SUPREME COURT] . It is also recorded that purchase tax is levied on the purchase of goods on which no tax has been paid on account of any exemption as a result of which the seller is not required to collect and pay sales tax. The decision whether or not to levy purchase tax is a prerogative and power of the State Legislature. As noticed above, the liability to pay is distinct from levy of tax. The contention that purchase tax payable under Section 7A at the rates mentioned under Sections 3 and 4 should be treated as exempt in view of the GO issued under Section 17 is untenable. The GO refers to the tax payable at the time of sale, that is, the sales tax. The GO does not grant exemption from payment of purchase tax. The grant of exemption being for the purpose of payment of sales tax, it does not follow that purchase tax would not be payable when conditions of Section 7A are satisfied. Further, it would be contradictory or rather nugatory to argue that the rate of tax specified in the Schedule should be taken as nil as no payment is to be made on the sale amount as sales tax. If this argument is accpeted, it would defeat the very purpose and objective of enacting Section 7A of the Tamil Nadu Act. Section 7A is only attracted where the sales tax is not payable, which means there should be an exemption notification under Section 17 or exemption under the Third Schedule, read with Section 8 of the Tamil Nadu Act. The argument that the rate applicable under Section 7A would be the effective rate and not the rate mentioned in the Schedule must be rejected. The exemption in the present case relates only to payment of sales tax and not purchase tax - It must be remembered that excise duty and customs duty are payable by the importer or the manufacturer. There is no reverse levy in the case of customs duty or the excise duty in terms of the two enactments. Purchase tax can be levied and payable, even the sales tax is not payable. Conclusion - i) The purchases from exempt dealers or of exempt goods are liable to purchase tax under Sections 5A and 7A, subject to the stipulated conditions regarding use, disposal, or dispatch of goods. ii) The constitutional validity of Sections 5A and 7A is upheld, rejecting the contention that the purchase tax is a consignment or manufacture tax or an inter-State levy beyond State power. Appeal dismissed.

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• 2025 (5) TMI 853
  Challenge to assessment order - non-consideration of explanation provided by the applicant/revisionist - principles of natural justice - HELD THAT:- On a pointed query put to the counsel for the revisionist as to where any ground has been taken in the grounds so taken in the grounds of appeals filed before the authorities below, he could not show any such ground, rather he that material evidence and documents have not been considered. Even before this Court, no such pleadings have been raised in the present revision that in spite of specific pleadings being made, pressed or argued, the same has not been considered, rather he tried to refer his written argument so submitted before the tribunal. The argument raised by the counsel for the revisionist can be accepted, but on the contrary, the record shows that the first appellate authority party allowed the appeal, which will go against the interest of the revisionist. Once the argument of counsel for the revisionist is accepted that the orders have been passed without considering the material available on record, since the Revenue has not preferred any appeal against the order impugned, this Court refrain itself for going into it, on the basis of argument raised by the counsel for the revisionist. Conclusion - The general contention of non-consideration of evidence is insufficient to overturn the impugned orders, especially when the appellate authorities had partly allowed the revisionist s appeals. The impugned orders do not call for any interference by this Court - Petition dismissed.

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• 2025 (5) TMI 852
  Rejection of application filed by the petitioner No. 1-Company under Vera Samadhan Yojna, 2019 - rejection on the ground that the petitioner No. 1-Company has not paid the full amount against the outstanding amount intimated to the petitioner No. 1-Company - HELD THAT:- It would be germane to refer to the Amnesty Scheme, 2019 which is a benevolent Scheme for recovery of the old outstanding dues in pending Appeals to reduce the cost of litigation of the Government. As per the provisions of the Clause 8 of the Amnesty Scheme, the petitioner was required to give the benefit of the Scheme on payment of the first installment being 10% of the total outstanding dues to be paid before 15th March, 2020 and remaining 90% to be paid from April, 2020 in eleven equal installments. Clause 8(4) of the Scheme provides that if the monthly installment is not paid within time, then such installment can be paid with 1.5% interest per month before the 20th Day of the next month. The petitioner has not paid the 6th and 7th Monthly installments within the due date and therefore, the petitioner did not pay the interest amount of Rs. 1,175.07/- as per the Amnesty Scheme - The respondent-Authority therefore, on the ground that the petitioner did not pay the 6th and 7th monthly installments with interest, literally interpreted the provisions of Clause 8(4) of the Amnesty Scheme and rejected the Application of the petitioner on the ground that full amount is not paid. Such literal interpretation of benevolent Scheme could not have been made by the respondent-Authority without giving any intimation to the petitioner for outstanding amount of interest, if any, to be paid. The impugned order dated 23rd February, 2022 could not have been passed rejecting the application filed by the petitioner under the Amnesty Scheme. Conclusion - The petitioner is entitled to the benefit of the Amnesty Scheme despite the shortfall in interest payment, due to lack of prior intimation and the benevolent nature of the Scheme. The impugned order dated 23rd February, 2022 is hereby quashed and set aside and the respondents are directed to give the benefit of the Amnesty Scheme to the petitioner and refund the amount of Rs.4,78,833/- which was recovered subsequently from the attached Bank Account of the petitioner after adjustment of the interest amount of Rs. 1,175.07/- along with interest at the rate of 9% per annum from the date of such recovery till the date of payment of such refund amount to the petitioner - Petition allowed.

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• 2025 (5) TMI 851
  Challnege to revisional order passed by the Commissioner of Taxes under the TVAT Act, 2004 for the assessment years 2014-15, 2015-16, 2016-17 and 2017-18 (up to June 2017) - reopening of assessment for the year 2014-15 beyond five years without issuance of notice under Section 31(1) of the TVAT Act, 2004 - HELD THAT:- The petitioner has been able to make out sufficient grounds to interfere in the matter. The Revisional Authority has also failed to decide the question of law which was raised in the revision petition i.e. determination of a fresh turnover beyond the returns without rejection of the returns of the petitioner for the above periods April to June, 2017 or reflecting any exercise as to whether the turnover was increased relying on the same materials produced by the Assessee along with his returns. The assessment order dated 29th July, 2019 does not reflect any exercise undertaken or any material relied upon to undertake the best judgment assessment for the financial year 2017-18. The matter therefore, requires to be remanded for a fresh assessment for the relevant year 2017-18 including on the question of penalty. Petitioner has not been able to dispute that notices for assessment proceedings for the relevant year 2017-18 were issued on 13.02.2019 which was well within the period of five years prescribed for assessment under Section 33 of the TVAT Act. Conclusion - The common impugned revisional order dated 15th October, 2022 is set aside so far as it relates to tax periods 2014-15, 2015-16 and 2016-17 whereas the same stands interfered to the extent that the matter is remanded to the Assessing Authority for carrying out a fresh assessment proceeding for the year 2017-18, tax periods April to June, 2017 in accordance with law. Petition allowed by way of remand.

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