TMI Tax Updates - e-Newsletter
May 16, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. ISSUANCE OF SHOW CAUSE NOTICES UNDER SECTION 74 OF GST ACT, 2017 IS UNSUSTAINABLE WHEN GSTR-7 IS DULY FILED BY THE SERVICE RECIPIENTS ON THE GST PORTAL

   By: jayaprakash gopinathan

2. NO CAUSE OF ACTION ARISES UNLESS SECTION 95 PETITION IS ADMITTED AGAINST THE PERSONAL GUARANTORS

   By: DR.MARIAPPAN GOVINDARAJAN

3. Legal heir not liable for deceased’s GST dues in absence of business continuity

   By: Bimal jain

4. How to Counter China's Dumping into India?

   By: YAGAY andSUN

5. Building Atmanirbhar Bharat: Reducing Low-End Imports to Boost Make in India

   By: YAGAY andSUN

6. FSSAI Registration & Food Safety License for Vegetables Dealers.

   By: YAGAY andSUN

7. 🔧 ISO 9809 and ISO 11120 – Seamless Steel Gas Cylinders

   By: YAGAY andSUN

8. Noise Pollution Control and Licensing Protocols for Loudspeakers Being Used by Street Hawkers: Roles of CPCB, SPCB, MOEFCC, and Municipal Corporations.Whether Street Hawkers are allowed to use Loudspeakers in Residential Areas to sell their Goods and Merchandises or not?

   By: YAGAY andSUN

9. The Curse of Using ‘Single Use Plastic’.“Wrapped in Convenience, Trapped in Plastic"A world strangled by what we throw away.

   By: YAGAY andSUN

News

1. Himadri inks pact with Aussie firm for lithium tech, says 10-12pc IBC stake talks speculative

2. Money laundering case: Delhi court summons foreign, Indian officials of VIVO

3. Pakistan offers zero-tariff bilateral trade deal to US: report

4. India-US trade agreement talks progressing well: Comm Secy

5. DPIIT Clears 187 Startups For Tax Relief Under Revised Section 80-IAC Framework

Notifications

Income Tax

1. 48/2025 - dated 14-5-2025 - IT

Zero Coupon Bond - Specified bond notified u/s 2(48) of the Income-tax Act, 1961

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2025/ 70 - dated 15-5-2025

Rating of Municipal Bonds on the Expected Loss (EL) based Rating Scale

Highlights / Catch Notes

GST

• GST Registration Cancellation Quashed Due to Vague Show-Cause Notice Violating Principles of Natural Justice

  Case-Laws - HC : HC allowed the writ petition challenging GST registration cancellation. The show-cause notice was found vague and defective, violating principles of natural justice by failing to provide a meaningful opportunity to respond. The cancellation order dated 17.04.2025 was deemed mechanically passed without proper application of mind, thus rendering it invalid. The court emphasized that a show-cause notice must provide a fair opportunity for the affected party to effectively rebut allegations and demonstrate innocence, which was absent in this case. The retrospective cancellation without substantive reasoning was consequently set aside.
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• Tax Levy Challenge Rejected: Complex Fund Expense Dispute Requires Detailed Scrutiny Beyond Writ Jurisdiction

  Case-Laws - HC : The HC dismissed the writ petition challenging tax levy on fund expenses, finding that the complex factual determination regarding establishment charges and service fee classification requires detailed scrutiny beyond writ jurisdiction. The court held that the petitioner's inconsistent positions regarding establishment charges necessitate a comprehensive examination of accounts. While rejecting direct intervention, the HC permitted the petitioner to pursue appellate remedies under CGST Act, 2017, emphasizing that interpretation of service agreements involving factual nuances falls outside summary writ proceedings. The impugned order remains operative, with the petitioner directed to seek redressal through appropriate statutory channels.
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• Tax Order Upheld: Petitioner's Failure to Respond and Engage Leads to Dismissal Under Section 107 of CGST Act

  Case-Laws - HC : HC dismissed the petition challenging tax order, finding the petitioner failed to exercise due diligence in responding to show cause notices and personal hearing opportunities. Despite receiving multiple notices dated 22nd July, 2022 and 3rd August, 2024, the petitioner neither filed replies nor attended hearings. The court held that the administrative authority provided fair opportunity for hearing, and the petitioner's lack of proactive engagement precluded claims of procedural impropriety. The order under Section 107 of CGST Act, 2017 was upheld, and the petition was disposed of without substantive intervention.
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• Ex-parte Order Invalidated: Procedural Fairness Demands Personal Hearing and Proper Notice in Tax Dispute Resolution

  Case-Laws - HC : HC held that ex-parte order violated principles of natural justice by failing to serve show cause notice to the petitioner, thereby denying opportunity of being heard. Strict interpretation of tax statutes mandates procedural compliance, particularly regarding personal hearing requirements. The court emphasized that penal statutes affecting individual rights must be construed narrowly to prevent arbitrary decision-making. Consequently, the impugned order was declared unsustainable, and the petitioner was directed to be afforded a fresh opportunity to present its case before the competent authority.
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• Sada Tambaku Mixed with Lime Deemed Manufactured Tobacco Product, Triggering Higher Tax Rates and Classification

  Case-Laws - AAR : The AAR determined that 'sada tambaku pre-mixed with lime' constitutes a manufactured tobacco product through a mixing process that creates a new product with distinct characteristics. The goods are classifiable under HSN 24039910, attracting GST at 28% and compensation cess at 0.56R per unit for products with declared retail sale price or 160% for other products. The ruling hinged on the transformation of raw tobacco leaves through lime mixing, which renders the product fit for direct consumption and qualifies as manufacturing under CGST Act, 2017, section 2(72), thus moving beyond unmanufactured tobacco classification.
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• Metal Cutting Blades for Chaff Cutters Classified Under Chapter 8208, Attracting 18% GST Based on Specific Heading Rule

  Case-Laws - AAR : AAR ruled that metal cutting blades for chaff cutters shall be classified under Chapter Heading 8208 40 00, attracting 18% GST. Applying Rule 1 of Interpretative Rules, the specific heading for cutting blades for agricultural machines takes precedence over general machinery headings. Note 1(k) of Section XVI excludes articles of Chapter 82, rendering Note 2 to Section XVI inapplicable. The classification is based on the specific nature of the blades as cutting implements for agricultural machinery, thereby mandating classification under the more precise Chapter 82 heading rather than the broader machinery classification.
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• Groundnut Heat-Drying Process Transforms Product, Disqualifies from Original HSN 1202 Classification Based on Compositional Changes

  Case-Laws - AAR : AAR determined that heating groundnuts with shell to reduce moisture content constitutes a roasting process, rendering the product ineligible for classification under HSN 1202. The ruling hinged on the lack of detailed documentation regarding the heating process, potential temperature controls, and infrastructure. The authority found that heat-drying can alter the physical characteristics and composition of goods, effectively transforming the groundnuts beyond their original state. Consequently, the heated groundnuts were deemed not classifiable under the specified harmonized system code.
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• Procedural Defects Cannot Override Substantive Rights: Appeal Allowed with Opportunity to Rectify Technical Errors Under Section 107

  Case-Laws - HC : HC allowed the appeal, finding that procedural irregularities in filing should not defeat the petitioner's substantive rights. The court held that technical defects do not warrant automatic rejection of an appeal, particularly where the delay is within the condonable period under Section 107 of the GST Act. The petitioner was granted an opportunity to rectify the procedural deficiencies in the appeal filing, emphasizing that procedural requirements are meant to facilitate justice, not obstruct it. The court's ruling underscores the principle that technical non-compliance should not supersede the fundamental right to seek judicial remedy.
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Income Tax

• Tax Exemption for Telangana Pollution Control Board Under Section 10(46) Covering Regulatory Income Streams and Government Grants

  Notifications : The GoI notification exempts the Telangana State Pollution Control Board from income tax under Section 10(46) of the Income Tax Act, 1961, covering specified income streams including consent fees, analysis fees, government grants, and interest earnings. The exemption is conditional upon the board not engaging in commercial activities, maintaining consistent income nature, and filing income returns as per statutory requirements. The notification applies retrospectively for financial years 2021-22 through 2025-26, ensuring tax relief for the pollution control board's regulatory and monitoring activities.
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• High Court Overturns ESI and EPF Contribution Disallowance, Mandates Reassessment Under Section 143(3) with Precedent Considerations

  Case-Laws - HC : HC held that the Assessing Officer (AO) erroneously disallowed ESI and EPF contributions under Section 143(1)(a), given the pendency of a Supreme Court matter regarding delayed deposit treatment. The legal issue was unresolved at the time of assessment, and subsequent SC judgment in Checkmate Services clarified the position. The ITAT's reliance on a previous HC order was deemed inappropriate. The prima facie disallowance of contributions under Section 36(1)(va) was set aside, with the decision rendered against the Revenue, mandating reconsideration under Section 143(3) of the Income Tax Act.
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• Legal Battle: Section 153C Reassessment Blocked as Time-Barred, Limitation Period Calculated from Notice Date Not Search Date

  Case-Laws - HC : HC held that for reassessment proceedings under Section 153C, the relevant date is when the Assessing Officer decides to initiate re-assessment, not the search date. The ten-year block is calculated from the end of AY 2024-25, when the notice was issued on 30.03.2024. Consistent with prior judicial precedents, the court found the impugned notice barred by limitation and allowed the petition, setting aside the notice as time-barred.
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• Tax Refund Dispute Resolved: Exemption Recognized, Delay Condoned, Petitioner's Rights Upheld Under Section 119 Provisions

  Case-Laws - HC : HC allowed the petition challenging the rejection of condonation of delay in income tax return filing. The court found the respondent authorities failed to consider that the compensation received was tax-exempt, and the petitioner was entitled to a TDS refund. By invoking Section 119 powers, the court quashed the impugned order, recognizing the legislative intent to prevent unnecessary hardships for assessees in claiming legitimate refunds. The decision emphasizes procedural fairness and taxpayer rights in tax assessment processes.
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• Statutory Dues Outside Resolution Plan Under IBC Section 31 Automatically Extinguished, Clearing Path for Corporate Debt Recovery

  Case-Laws - HC : HC held that statutory dues not included in the Resolution Plan under IBC Section 31 are extinguished, precluding further proceedings for pre-approval period. Income tax demands for specified assessment years were not part of the approved plan, thus automatically discharged. The ruling emphasizes that once a Resolution Plan receives NCLT approval, no subsequent claims can be introduced, ensuring the corporate debtor can restart business with a clean financial slate.
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• Validity of Tax Notices: Delayed Challenge Rejected, Petitioners Granted Alternative Appeal Route Under Procedural Fairness Principles

  Case-Laws - HC : HC dismissed the writ petitions challenging tax notices due to significant delay between notice issuance in June 2023 and petition filing in January 2024. The court exercised judicial discretion to reject the petitions while preserving the petitioners' right to pursue alternative legal remedies. The HC granted liberty to file individual appeals within two months, directing that such appeals would be evaluated on merits without limitation constraints, thereby providing a procedural pathway for potential judicial review of the underlying tax notices.
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• Income Tax Tribunal Rejects Revenue's Challenge to Business Receipts, Affirms Taxpayer's Claim Under Section 69A

  Case-Laws - AT : ITAT dismissed revenue's appeal, upholding CIT(A)'s deletion of addition under Section 69A. The tribunal found no cogent evidence to challenge the assessee's claim regarding bank account credits as business receipts. The decision relied on precedent from Gujarat HC, which cautioned against double taxation when sales realization has already been accepted. The tribunal concluded that since the assessee made sales to the referenced entity and did not make corresponding purchases, the revenue's grounds lacked merit and were consequently rejected.
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• Tax Reassessment Invalidated: Lack of Reasoned Order Under Section 147 Violates Procedural Fairness and Legal Principles

  Case-Laws - AT : In a tax reassessment case, the ITAT quashed the reassessment order under Section 147 due to the Assessing Officer's failure to dispose of the assessee's objections through a reasoned order. The AO did not comply with the Supreme Court's GKN Driveshaft judgment, which mandates addressing objections to assessment reopening via a speaking order. Consequently, the reassessment order dated 31/03/2022 was deemed invalid and passed without jurisdiction, ultimately decided in favor of the assessee and against the revenue.
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• Penalty Notice Defects Invalidate Tax Proceedings: Procedural Fairness and Natural Justice Principles Prevail in Income Tax Assessment

  Case-Laws - AT : ITAT held that the penalty proceedings u/s 271(1)(c) are vitiated due to non-striking of irrelevant limbs in the show cause notice, which violates principles of natural justice. The tribunal found the omnibus notice demonstrated non-application of mind by the Assessing Officer. Despite voluntary disclosure of additional income post-survey, the assessee failed to establish unintentional concealment. Relying on precedent, the tribunal concluded that mere surrender of income does not automatically absolve penalty proceedings. Consequently, the appeal was dismissed, upholding the penalty levied by the lower authorities.
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• Cooperative Society Wins Tax Deduction Battle: ITAT Validates Commission Income and Cash Deposits Under Sections 80P(2)(c) and 80P(2)(d)

  Case-Laws - AT : ITAT upheld the CIT(A)'s decision, allowing deductions under sections 80P(2)(c) and 80P(2)(d) for a cooperative society. The tribunal confirmed the legitimacy of commission income from MSEDCL bill collection and locker rent charges, finding the expenses directly attributable to income and verified through independent audit. Regarding cash deposits during demonetization, ITAT validated the society's documentation, correlating bank statements with MSEDCL collection reports and government circulars. The tribunal found no intentional misstatement and accepted the society's evidence of legitimate cash transactions. Ultimately, the decision was rendered in favor of the assessee, rejecting the revenue's contentions.
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• Precious Metal Trader Wins Tax Challenge: Arbitrary Income Assessment Overturned Under Section 145(3)

  Case-Laws - AT : ITAT adjudicated a dispute regarding tax assessment in a precious metal business. The tribunal found the Assessing Officer (AO) improperly rejected audited books under Section 145(3) without conducting a mandatory special audit under Section 142(2A). The ad-hoc income determination was deemed capricious and irrational, lacking cogent material and expert assessment. Given the complex business nature involving high-value transactions and inventory volatility, the tribunal disapproved the arbitrary income estimation. The matter was remanded to the AO for fresh income determination in strict compliance with legal provisions, with the appeal allowed for statistical purposes.
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• Income Tax Deduction Dispute: Tribunal Orders Detailed Review of Asset Acquisition Costs and Income Application Under Section 11(6)

  Case-Laws - AT : ITAT allowed the appeal for statistical purposes, remanding the case to the AO to verify whether the assessee claimed asset acquisition costs as "application of income" in current or prior years. The Tribunal held that depreciation disallowance under Section 11(6) is permissible only if asset acquisition costs were previously claimed as income application. Based on the assessee's Chartered Accountant certificate and record verification, the Tribunal directed the AO to conduct a comprehensive review and provide relief if no prior income application claim is found, ensuring procedural fairness and compliance with statutory provisions.
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• Income Tax Appellate Tribunal Overturns Tax Assessment, Mandates Fresh Evaluation of Expense Claims Under Section 250(6)

  Case-Laws - AT : ITAT allowed the appeal, setting aside both AO and CIT(A) orders due to procedural irregularities. The appellate authority failed to adjudicate issues on merits as mandated under Section 250(6), and the AO made additions without substantive inquiry into expense claims. The tribunal found no specific defects in the assessee's expense documentation and determined that neither the assessment order nor the appellate order was legally sustainable. The matter was remanded to the AO for a de novo assessment, with the appeal allowed for statistical purposes, ensuring a comprehensive re-examination of the original expense claims and proportionate calculations.
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Customs

• High Court Upholds Petroleum Coke Import Petition, Orders Fresh Review of Advance Authorisation and Mandates Personal Hearing

  Case-Laws - HC : HC allows petition challenging DGFT Notification No.68/2023, setting aside the rejection of Advance Authorisation for Raw Petroleum Coke import. The court remitted the matter to respondents for fresh consideration, directing DGFT to provide personal hearing to petitioners. The ruling emphasizes compliance with CAQM order and Supreme Court precedents, permitting deemed exports to SEZ units. The decision mandates reconsideration of the petitioner's application under Foreign Trade Policy, 2023, with interim relief to supply Calcined Petroleum Coke to SEZ units pending final determination.
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Corporate Law

• Auditor Cleared: Technical Reporting Gaps Do Not Warrant Criminal Prosecution Under Companies Act Section 143

  Case-Laws - HC : HC quashed criminal complaints against individual auditor for alleged non-compliance with Companies Act section 143, finding prosecution malicious. The court determined that failure to specify exact degree of relationship in related party transactions does not constitute a prosecutable offense. The court held that the auditor, joined individually without the audit firm, should not face trial. Consequently, all criminal enquiries and consequential proceedings against the petitioner were set aside, effectively exonerating the individual from potential legal action related to accounting standard violations.
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• Corporate Governance Dispute Dismissed: No Substantial Evidence of Oppression Found in Comprehensive Review of Shareholder Claims

  Case-Laws - Tri : In a dispute involving corporate governance and alleged oppressive conduct, the Tri examined multiple allegations against the Respondent No. 1 Company. After comprehensive review of claims including unauthorized share buy-back, remuneration discrepancies, and potential fraudulent transactions, the Tri found no substantive evidence of oppressive practices. The tribunal determined that the Petitioner failed to establish grounds under Section 213 of the Companies Act, 2013. Key findings included: legitimate employment perquisites, timely insurance policy credits, and no proven benami property transactions. The board's dividend discretion was affirmed, and procedural challenges were deemed time-barred. Consequently, the Tri dismissed the petition, ruling no oppressive conduct was demonstrated.
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IBC

• Corporate Borrowers Fail to Block Insolvency Proceedings Under IBC Section 7 in Loan Dispute Resolution

  Case-Laws - AT : NCLAT rejected appellants' challenge to IBC Section 7 application for corporate insolvency resolution. The tribunal found appellants were direct borrowers, not guarantors, in loan agreements totaling Rs. 5.85 Crores. Despite appellants' claims of financial distress and alleged coercion, the court determined the loan documentation clearly designated them as borrowers. The tribunal dismissed allegations of impropriety, affirming the Adjudicating Authority's decision to initiate corporate insolvency proceedings against the corporate debtor. The appeal was consequently dismissed, upholding the original insolvency resolution order.
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• Corporate Insolvency Resolution: CoC Liquidation Upheld, Appellant Granted Limited Opportunity to Propose Alternative Scheme Under Section 33(2)

  Case-Laws - AT : NCLAT affirmed the Committee of Creditors' (CoC) liquidation resolution under Section 33(2) of IBC. The tribunal found no arbitrariness in CoC's decision to liquidate the corporate debtor. While rejecting the appellant's financial proposal, the court granted liberty to submit a compromise or arrangement scheme under Regulation 2B by 20.05.2025. The appeals challenging the liquidation order were dismissed, with the court noting that the Central Bank's objection to the addendum proposal was already accepted by the adjudicating authority. The decision preserves the CoC's statutory power to liquidate with 66% voting share while providing a limited avenue for the appellant to explore alternative resolution mechanisms.
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Indian Laws

• Judicial Discretion Prevails: Court's Exclusive Power to Recall Witnesses Under Order 18 Rule 17 CPC and Section 165 Evidence Act

  Case-Laws - SC : SC held that under Order 18 Rule 17 CPC and Section 165 of Evidence Act, the power to recall a witness is exclusively within the court's discretion. The court may exercise its inherent jurisdiction under Section 151 CPC to permit a party to recall a witness if circumstances warrant, but such recall is not an automatic right. Cross-examination of a recalled witness requires explicit court permission. The court's primary objective is to discover or obtain proper proof of relevant facts. The Special Leave Petitions were consequently dismissed, affirming the court's broad discretionary power in witness examination.
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• Supreme Court Affirms Cheque Bounce Conviction, Upholds Loan Evidence and Liability Under Section 138 of Negotiable Instruments Act

  Case-Laws - SC : SC upheld the conviction of the accused-respondent for dishonoring a cheque under Section 138 of the Negotiable Instruments Act. The Court found substantial evidence establishing a valid loan transaction, including cheque payments and the accused's failure to rebut the presumption of liability. The High Court's contrary findings were deemed perverse and set aside. The SC restored the lower courts' judgments, sentencing the accused-respondent to a fine of Rs. 16,00,000 or nine months' simple imprisonment in default, with the fine to be paid to the complainant's legal heirs within three months.
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• Legal Victory: Procedural Flaws Nullify Negotiable Instruments Act Conviction, Accused Acquitted with Conditional Bond

  Case-Laws - HC : HC allows criminal petition, acquitting accused of NI Act Section 138 offense. The court found procedural irregularities in prosecution, specifically noting the failure to implead the Society as a party, which prevented vicarious liability. Consequently, the lower court's judgment sentencing the accused to six months imprisonment and Rs. 1.50 lacs compensation was set aside. The accused was directed to furnish a personal bond of Rs. 25,000 with a surety, effective for six months, with provisions for potential Supreme Court appearances. Fine amount, if deposited, shall be refunded after statutory limitation period.
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• TSECL Must Clear Rs.7.88 Crore MSME Payment Within 45 Days, Dispute Resolution Path Opened

  Case-Laws - HC : HC directs TSECL to pay admitted contractual dues of approximately Rs.7.88 crores to MSME petitioner within 45 days, while granting liberty to raise disputed claims before the recently constituted Micro and Small Enterprises Facilitation Council. The court disposed of the writ petition without commenting on the merits of the petitioner's claims, effectively providing a partial relief mechanism for the contractual dispute involving rural electrification works.
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SEBI

• Expanded Professional Qualifications for Credit Rating Agencies' Internal Audit Teams Under SEBI Guidelines

  Circulars : SEBI has modified the internal audit team composition requirements for Credit Rating Agencies (CRAs). The circular expands eligible professional qualifications to include Cost Accountants (ACMA/FCMA) alongside Chartered Accountants (ACA/FCA) and adds Diploma in Information System Security Audit (DISSA) to existing information systems auditor credentials. The modification provides CRAs with a broader pool of qualified professionals for conducting internal audits. The circular is effective immediately, issued under SEBI's statutory powers to protect investor interests and regulate securities markets, specifically invoking Section 11(1) of the SEBI Act and Regulation 20 of SEBI (Credit Rating Agencies) Regulations, 1999.
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• SEBI Mandates Investor Protection Charter for Registrars, Setting Strict Service Timelines and Grievance Resolution Standards

  Circulars : SEBI issued a comprehensive Investor Charter for Registrars to an Issue and Share Transfer Agents (RTAs), mandating enhanced investor protection, transparency, and service standards. The circular establishes standardized timelines for investor service requests, including transmission (21 days), duplicate securities (30 days), and dematerialization (15 days). RTAs must disclose complaint data monthly, implement a grievance redressal mechanism, and provide clear investor rights and responsibilities. The charter introduces an Online Dispute Resolution platform and requires RTAs to disseminate the charter through websites and email, with immediate implementation and rescission of previous circular provisions.
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Service Tax

• Legal Win: Taxpayer Granted Relief Under Sabka Vishwas Scheme Despite Technical Appeal Limitation in Section 121(f)

  Case-Laws - HC : The HC allowed the petition under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, holding that the petitioner cannot be deprived of scheme benefits merely because the appeal filed before the Appellate Tribunal was not covered under Section 121(f) of the Finance Act. The court directed the Designated Committee to consider the petitioner's SVLDRS-1 application under Section 123(b), compute tax dues, grant relief under Section 124(1)(a), and issue the requisite form upon tax payment, thereby ensuring the petitioner's entitlement to the scheme's benefits for cess levied under the relevant Act.
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Case Laws:

• GST

• 2025 (5) TMI 998
  Refund of the input tax credit for the periods prior to 18.07.2022 - validity and applicability of Circular No. 181/13/2022-GST, dated 10.11.2022 - it was held by High Court that The impugned orders of rejection of refund are set aside and the said respondents are required to reconsider the said applications, in terms of Section 54 of the CGST Act and without relying upon the clarification issued in Circular No. 181/13/22-GST, dated 10.11.2022, for non-suiting the petitioners herein. HELD THAT:- It is not required to interfere with the impugned judgment; hence, the present special leave petitions are dismissed.

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• 2025 (5) TMI 997
  Rejection of appeal on the ground of delay - seeking grant of opportunity to the petitioner to rectify the defects - HELD THAT:- Admittedly, the petitioner filed the appeal beyond 90 days but within a condonable period of 30 days under Section 107 of the GST Act. It appears that the petitioner erroneously filed the appeal without enclosing the Condonation of Delay application. Therefore, the second respondent rejected the petitioner s appeal on the ground that the appeal was filed belatedly. This Court in Indian Potash Ltd., Vs. Deputy Commissioner (ST) [ 2024 (6) TMI 364 - MADRAS HIGH COURT] held that an appeal cannot be rejected on the ground of technical defects. No doubt there is procedural irregularity in filing the appeal but such procedural irregularity should not defeat the petitioner s right. As it is well settled that procedure is handmaid of justice, the petitioner should be given an opportunity to rectify the defect. Petition disposed off.

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• 2025 (5) TMI 996
  Validity of arrest of the petitioner under Section 132(1)(c) of the CGST Act, 2017 read with Section 20 of the IGST Act, 2017 - non-compliance with mandatory procedural safeguards under the BNSS, 2023 and the CGST Act - absence of a prior notice under Section 35 of BNSS, 2023 - lack of authorization by the Commissioner as mandated u/s 69 of the CGST Act - violation of principles of natural justice - HELD THAT:- It is not in dispute that Section 41(A) notice is mandatory in case the offence is punishable up to 7 years of imprisonment which is not followed in this case. It is also not in dispute that u/s 132 (1) of CGST Act, 2017, the maximum sentence is of 5 years with fine. It is true that another case is pending against the petitioner before the Court of learned Magistrate, however, in this case also, charge-sheet has been laid. The petitioner has been detained in custody for more than 3 months. In the case of Satender Kumar Antil [ 2022 (8) TMI 152 - SUPREME COURT] , it was directed to the Investigating Agencies and the Courts that (ii) The Investigating Agencies and their officers are duty bound to comply with the mandate of Sections 41 and 41(A) Cr.PC and the directions issued by the Supreme Court in Arnesh Kumar, (2014) 8 SCC 273. Any dereliction on their part has to be brought to the notice of the higher authorities by the Court followed by appropriate action. (iii) The Courts will have to satisfy themselves on the compliance of Sections 41 and 41 (A) Cr.PC. Any non-compliance would entitle the accused for grant of bail. In view of the aforesaid discussion and the law laid down by the Hon ble Apex Court as above, this Court is inclined to grant bail to the petitioner - Accordingly, the petitioner, namely, 1. Sri Aniket Sovasaria shall be released on bail, on furnishing bail bond of Rs.50,000/- with two suitable sureties of the like amount, to the satisfaction of learned Chief Judicial Magistrate, Kamrup(M), Guwahati. Bail application allowed.

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• 2025 (5) TMI 995
  Cancellation of Petitioner s GST registration - petitioner was unaware of issuance of SCN - Violation of principles of natural justice - HELD THAT:- A perusal of the impugned SCN would show that the main reason for cancellation retrospectively is the failure to furnish returns for a period of six months. The Petitioner obviously could not have filed returns for six months as the Petitioner had already applied for cancellation of the GST registration. Therefore this ground, in the opinion of the Court, is not a sustainable ground for retrospective cancellation and the retrospective cancellation deserves to be set aside. On a query from the Court, ld. Counsel for the Petitioner has submitted that the Petitioner s GST registration is not subject matter of any other Show Cause Notice under Sections 73 or 74 of the Act in respect of supply of goods and services. The impugned order is set aside. It is directed that the cancellation of the GST registration will take effect from 14th May, 2024. It is also clarified that any other proceedings qua the GST No. 07ARNPG2347QlZ8 shall not be effected by the order of this Court - Petition disposed off.

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• 2025 (5) TMI 994
  Cancellation of petitioner s GST registration - commodities mentioned in the e-way bills did not match with the registrations and that the functioning of the petitioner was in contravention to the GST Act and Rules - cancellation of registration with retrospective effect, without assigning any valid reason or affording a proper reasonable opportunity to respond - violation of principles of natural justice - HELD THAT:- A bare perusal of the show-cause notice, dated 29.03.2025 of the 2nd respondent does not indicate any charge having been framed by the 2nd respondent against the petitioner in the impugned show-cause notice dated 29.03.2025 issued to the petitioner by the 2nd respondent pertaining to the above referred subject issue pertaining to huge e-ways bills having been raised in March, 2025 about 12 cr+ within 15 to 20 days, therefore, this Court agrees with the main submission put-forth by the learned counsel appearing on behalf of the petitioner that the impugned show-cause notice dated 29.03.2025 issued to the petitioner by the 2nd respondent is very vague and hence, petitioner could not submit his explanation to the said show-cause notice issued to the petitioner by the 2nd respondent, dated 29.03.2025. This Court opines that the plea of the learned Special Government Pleader appearing on behalf of the respondents that a supporting document was enclosed along with the show-cause notice, dated 29.03.2025 giving details of the allegations leveled against the petitioner is however disputed by the learned counsel appearing on behalf of the petitioner, placing reliance on the specific averments made at paragraph No.5 of the affidavit filed by the petitioner in support of the present writ petition, contending that no supporting documents were attached to the show-cause notice for cancellation of registration dated 29.03.2025, as contended by the respondents. The Apex Court in Oryx Fisheries Pvt., Ltd., Vs. Union of India Others [ 2010 (10) TMI 660 - SUPREME COURT ], observed that It is true that the show-cause notice cannot be read hyper technically and it is well settled that it is to be read reasonably. But, while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show-cause notice and prove his innocence. If on a reasonable reading of a show-cause notice a person of ordinary prudence gets the feeling that his reply to the show-cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show-cause notice does not commence a fair procedure especially when it is issued in a quasi- judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. Duly applying the observations of the Apex Court in the judgment and duly examining the contents of the impugned show-cause notice, dated 29.03.2025, it is amply evident and borne on record that admittedly, the impugned show-cause notice, dated 29.03.2025 issued by the 2nd respondent fails the test of fairness and indicates bias. Conclusion - The cancellation order dated 17.04.2025 is passed mechanically, without proper application of mind or on merits, and is consequently set aside. Petition allowed.

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• 2025 (5) TMI 993
  Scope of present petition - Levy of tax on amounts earmarked as fund expenses reimbursable to the Petitioner - case of petitioner is that impugned order wrongly taxes the entire amount earmarked for fund expenses by treating such reimbursements as consideration for supply of services by the Petitioner to the fund - whether the said expenses would constitute part of the management fee or not? - HELD THAT:- Questions such as what are the kind of establishment expenses, which have been incurred and whether they are being incurred by the Petitioner for payment of its own employees or there are any separate service providers being engaged on behalf of the firm, would require a factual determination which is outside the scope of this writ petition. The correspondences itself would show that from time to time, the Petitioner has taken different stands as to how the establishment charge would either be a one-time establishment charge or would it be one-time set up fee, etc. There is no consistent stand on behalf of the Petitioner. The question whether any of the expenses incurred either on actuals or as a lumpsum in percentage terms, would have to be construed as Fee or not and whether it has to be taxed or not would require a scrutiny of the records of the Petitioners. The accounts of the Petitioner would need to be gone into to see as to whether the demand is valid or not. The impugned order is clearly an appealable order under Section 107 of the Central Goods and Services Tax Act, 2017. In the opinion of this Court, the interpretation of such agreements which involves a factual analysis are beyond the scope of writ jurisdiction. There is no inherent lack of jurisdiction. Neither is there any violation of principles of natural justice. Under such circumstances there is no ground for interference with the impugned order in writ jurisdiction - The Petitioner is, however, permitted to avail of its appellate remedy in accordance with law. Conclusion - i) The interpretation of such agreements which involves a factual analysis are beyond the scope of writ jurisdiction. There is no inherent lack of jurisdiction. ii) The question whether any of the expenses incurred either on actuals or as a lumpsum in percentage terms, would have to be construed as Fee or not and whether it has to be taxed or not would require a scrutiny of the records of the Petitioners. The accounts of the Petitioner would need to be gone into to see as to whether the demand is valid or not. iii) The Petitioner is permitted to avail of its appellate remedy in accordance with law. Petition disposed off.

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• 2025 (5) TMI 992
  ITC availed availed without receipt of goods - denial of fair opportunity of hearing - violation of principles of natural justice - HELD THAT:- A perusal of the record would show that there are two show cause notices dated 22nd July, 2022 and 3rd August, 2024 which have been issued. No reply to the Show Cause Notice dated 3rd August, 2024 was filed by the Petitioner even after the notice for personal hearing, which was sent on 8th January, 2025. No reply was also filed to the show cause notice even after the alleged access to the personal hearing was not granted. Beyond that, no effort was made by the Petitioner to either file the reply or file the documents physically or otherwise. The order has been passed on 28th January, 2025 almost two weeks after the date of personal hearing. From the above circumstances it is clear that the Petitioner has not been diligent in filing the reply and attending the hearings. The order is clearly an appealable order under Section 107 of the Central Goods and Service Tax Act, 2017. Considering the fact that (i) The Department has given the show cause notice and the personal hearing notices to the Petitioner; (ii) The Petitioner has not been diligent; the Department cannot be held to blame for not giving a proper hearing. The impugned Order, in the opinion of the Court, does not warrant interference - Petition disposed off.

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• 2025 (5) TMI 991
  Violation of principles of natural justice - Ex-parte order - SCN initiating proceedings was not served or brought to the petitioner s knowledge - denial of opportunity of being heard - HELD THAT:- It is a settled legal principle evolved in a catena of decisions by this Court and the Supreme Court that provisions contained under tax statute have to be very strictly construed the hence provisions providing for a particular pre-requisite like opportunity of oral hearing before passing of final order, have to be complied with by the authority. Authority cannot take it for granted that provisions providing for personal hearing is an empty formalities and representation to notice would suffice the need. In the case of Commissioner of Customs (Import), Mumbai v. Dilip Kumar and Company and others [ 2018 (7) TMI 1826 - SUPREME COURT (LB)] in which the Supreme Court has very clearly observed The penal statute which tends to deprive a person of right to life and liberty has to be given strict interpretation or else many innocents might become victims of discretionary decision-making. Insofar as taxation statutes are concerned, Article 265 of the Constitute prohibits the State from extracting tax from the citizens without authority of law. It is axiomatic that taxation statute has to be interpreted strictly because the State cannot at their whims and fancies burden the citizens without authority of law. In other words, when the competent Legislature mandates taxing certain persons/ certain objects in certain circumstances, it cannot be expanded/ interpreted to include those, which were not intended by the legislature. Thus, the order passed by the assessing officer dated 6th October, 2021 shall be taken to be notice within the meaning of Section 74 of the GST Act, 2017 to enable the petitioner to file his objections and place its documents before assessing officer/ competent authority for its consideration. Conclusion - The impugned order passed without service of notice and opportunity of hearing is unsustainable, and the petitioner must be afforded a fresh opportunity to present its case. Petition disposed off.

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• 2025 (5) TMI 990
  Maintainability of petition - availability of alternative remedy - Provisional release of vehicles - detention of vehicle for transporting goods (20,000 liters of white kerosene) without requisite documents - whether the petitioners had produced documents before the proper officer at the time of hearing? - HELD THAT:- It is noticed that, petitioners have not sought any relief to quash the orders of confiscation. In such circumstances, without any challenge against the orders of confiscation, the provisional release of the vehicle cannot be granted by this Court as Section 130(7) of the CGST Act itself provides that an order of release can be issued by the proper officer himself in accordance with law, provided the conditions therein are satisfied. Further, petitioners can avail the remedy of challenging the orders of confiscation before the appellate authority, in accordance with law. When such alternative remedies are available, remedy under Article 226 cannot be invoked, especially since there are disputed questions of facts. In view of the disputed facts regarding production of documents, it is refrained from directing any release and instead relegate the petitioners to pursue their statutory remedies either under Section 130(7) or under Section 107 of the CGST Act - petition disposed off.

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• 2025 (5) TMI 989
  Challenge to SCN issued in Form GST DRC 1 dated 2nd August, 2024 under Section 74 of the Central/West Bengal Goods and Services Tax Act, 2017 - HELD THAT:- Since, the show cause has already been adjudicated and has culminated in the order in original, the order in original cannot be challenged by way of a connected application as the same gives rise to a separate cause of action. The instant writ petition can be disposed of by permitting the petitioners to challenge not only the show cause but also the adjudication order in original dated 31st January, 2025 in a composite manner in accordance with law, before the appropriate forum,if so advised - Petition disposed off.

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• 2025 (5) TMI 988
  Refund claim - time limitation - refund application filed by the petitioners with compliance of the deficiency memo is rejected only on the ground of limitation considering the deficiency memo as a fresh refund application - HELD THAT:- Issue Notice, returnable on 24th April, 2025.

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• 2025 (5) TMI 987
  Challenge to assessment order passed by respondent no. 3 assessing GST for the months of June-July, 2018 under Section 74 of the GST Act - HELD THAT:- It is emphasized that the provisions of Section 16 (2) (c) of the U.P. G.S.T. Act, 2017 would not be attracted for reason that four places down the chain of transactions, one of the suppliers had not paid GST. It is also emphasized that the tax invoices, GSTR-2A, records of payment through Bank are sufficient to comply with the requirement of Section 16 of the said Act and entitle the petitioner to claim benefit of the input tax credit. So far as the absence of the Toll Plaza receipt is concerned, it is pleaded in paragraph no. 17 of the writ petition that the transaction relates to the year 2018, when every Highway did not have a Toll Plaza and alternate routes/non toll roads were available. It is also argued that the SIB search of the supplier, who was found not to exist at his address was conducted by the respondents after one year of the transaction during which period of time the possibility of a change in the affairs of the supplier cannot be ruled out. Issue notice - List for orders on 25.09.2024 along with a report regarding status of pleadings.

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• 2025 (5) TMI 986
  Classification of the goods viz sada tambaku pre-mixed with lime proposed to be manufactured supplied - rate of GST compensation cess of the goods - whether the process undertaken of mixing the tobacco with lime in a big mixer amounts to manufacture or otherwise? - HELD THAT:- There is no definition for the term unmanufactured tobacco. However, the explanatory notes of HSN 24.01 covers unmanufactured tobacco in the form of whole plants in the natural state or as cured or fermented leaves, whole or stemmed/stripped, trimmed or untrimmed, broken or cut [including pieces cut to shape, but not tobacco ready for smoking]; that tobacco leaves, blended, stemmed/striped cased [sauced or liquored] with a liquid of appropriate composition mainly in order to prevent mould and drying and also to preserve the flavour are covered under this heading - the term chewing tobacco under HSN 24039910, is also not defined. However, the explanatory notes to HSN 24.03 states that chewing tobacco, are usually highly fermented and liquored. Manufacture is defined under CGST Act, 2017 under section 2 (72) to mean processing of raw materials or inputs in any manner that results in emergence of a new product having a distinct name, character and use. The process undertaken by the applicant, as is reproduced in paragraph supra, reveals that raw tobacco is mixed with lime paste in a big mixer consequent to which the same is packed in pouches of appropriate grams for supply. The applicant himself has mentioned that the tobacco leaves are never chewed/used directly but is mixed with lime and then it is consumed. The product of the applicant consequent to the process of mixing with lime is however, fit for consumption directly - the moment the tobacco is mixed with lime and subsequently supplied, it does not remain tobacco as such. It is the applicants own say that tobacco leaves are never chewed/used directly [refer para 3 of Annexure B]. A new product ie tobacco mixed with lime, which can be directly chewed/used, emerges which is a new product having a distinct name, character and use. In-fact it also falls within the ambit of the term chewing tobacco as extracted from the judgement of the Hon ble Supreme Court reproduced supra. Thus, it is concluded that the process undertaken by the applicant leads to manufacture. The moment, the process leads to manufacture, the resultant product of the applicant, sada tambaku pre-mixed with lime moves out of HSN 2401. The product will not merit classification under HSN 2402 also since it deals with Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes. The next HSN heading is 2403, whose description is other manufactured tobacco and manufactured tobacco substitutes; homogenized or reconstituted tobacco; tobacco extracts and essences. Ideally, the product, being manufactured tobacco merits classification under 24039910 under the head chewing tobacco . In terms of the explanatory notes to HSN 24.03, chewing tobacco, are usually highly fermented and liquored. The product is liquored with lime. Even otherwise, the wording used is that they are usually highly fermented and liquored, not mandatorily - highly fermented and liquored - the applicant s product sada tambaku pre-mixed with lime will fall under HSN 24039910 leviable to GST at the rate of 28%. Since it is already held that the product of the applicant sada tambaku pre-mixed with lime will be classifiable under HSN 24039910, Sr. No. 26, 26A, 27 and 27A of the notification No. 1/2017-Compensation Cess (Rate), is applicable. The compensation cess at the rate of 0.56R per unit in respect of the product with declared retail sale price or at the rate of 160% in respect of products other than goods covered under serial No. 26 above, is leviable on the said product of the applicant. Conclusion - i) The goods viz sada tambaku pre-mixed with lime proposed to be manufactured supplied by the applicant is classifiable under HSN 24039910. ii) The goods viz sada tambaku pre-mixed with lime is leviable to GST at the rate of 28% [14% + 14%] in terms of serial No. 15 of Schedule IV of notification No. 1/2017-CT(Rate) dated 28.6.2017 and compensation cess at the rate of 0.56R per unit in respect of the product with declared retail sale price or at the rate of 160% in respect- of products other than goods covered under serial No. 26 above in terms of notification No. 1/2017-Compensation Cess (Rate) dated 28.6.2017.

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• 2025 (5) TMI 985
  Classification of Blades cleared as Spare Parts for being used in Agricultural Machines, viz., Chaff Cutters which is meant and used for Cutting Straw for preparing Animal Feed - to be classified under HSN Heading 8208 40 00 or under HSN Heading 8436 10 00 / 8436 80 90? - HELD THAT:- Ongoing through the description of the goods manufactured by the applicant, it is found that the goods manufactured by the applicant is cutting blades made of metal which is normally used in chaff cutter. According to Rule 1 of the Interpretative Rules classification shall be determined according to the terms of the heading and any relative Section or Chapter Notes . Thus, by applying Rule 1, the impugned goods merit Classification under Heading 82.08, which covers within its ambit cutting blades for agricultural, horticultural or forestry machines instead of Heading 84.36 as note 1(k) of Section XVI specifically excludes articles of Chapter 82 or 83. It is also settled law that a specific heading must be given precedence over the general Heading. Note 2 to Section XVI, which govern classification of parts of machines has been applied by the applicant to classify the impugned product under Heading 84.36 is subject to Note 1 to Section XVI. Since, note 1(k) to Section XVI clearly stipulates that This section does not cover (k) Articles of Chapter 82 or 83 . Once, the Chaff Cutter Blades cleared as Spare Parts are specifically covered by Chapter 82, Note 2 to Section XVI cannot be inyoked for classification in terms of Note 1 (k) to Section XVI. The Chaff Cutter Blades cleared as spare parts merit classification under Chapter 82.08 attracting GST at the rate of 18% and not under Chapter heading 84.36. Conclusion - The blades are classifiable under Chapter Heading 8208 4000 and attract GST rate of 18%.

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• 2025 (5) TMI 984
  Classification of Blades cleared as Spare Parts for being used in Agricultural Machines, viz., Chaff Cutters which is meant and used for Cutting Straw for preparing Animal Feed - to be classified under Chapter Heading 8208 40 00 or under Chapter Heading 8436 10 00 / 8436 80 90? - HELD THAT:- Ongoing through the description of the goods manufactured by the applicant, it is found that the goods manufactured by the applicant is cutting blades made of metal which is normally used in chaff cutter. According to Rule 1 of the Interpretative Rules classification shall be determined according to the terms of the heading and any relative Section or Chapter Notes . Thus, by applying Rule 1, the impugned goods merit Classification under Heading 82.08, which covers within its ambit cutting blades for agricultural, horticultural or forestry machines instead of Heading 84.36 as note 1(k) of Section XVI specifically excludes articles of Chapter 82 or 83. It is also settled law that a specific heading must be given precedence over the general Heading. Note 2 to Section XVI, which govern classification of parts of machines has been applied by the applicant to classify the impugned product under Heading 84.36 is subject to Note 1 to Section XVI. Since, note 1(k) to Section XVI clearly stipulates that This section does not cover (k) Articles of Chapter 82 or 83 . Once, the Chaff Cutter Blades cleared as Spare Parts are specifically covered by Chapter 82, Note 2 to Section XVI cannot be invoked for classification in terms of Note 1 (k) to Section XVI. The Chaff Cutter Blades cleared as spare parts merit classification under Chapter 82.08 attracting GST at the rate of 18% and not under Chapter heading 84.36 Conclusion - The blades are classifiable under Chapter Heading 8208 4000 and attract GST rate of 18%.

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• 2025 (5) TMI 983
  Classification of Blades cleared as Spare Parts for being used in Agricultural Machines, viz., Chaff Cutters which is meant and used for Cutting Straw for preparing Animal Feed - to be classified under Chapter Heading 8208 40 00 or under Chapter Heading 8436 10 00 / 8436 80 90? - HELD THAT:- Ongoing through the description of the goods manufactured by the applicant, it is found that the goods manufactured by the applicant is cutting blades made of metal which is normally used in chaff cutter. According to Rule 1 of the Interpretative Rules classification shall be determined according to the terms of the heading and any relative Section or Chapter Notes . Thus, by applying Rule 1, the impugned goods merit Classification under Heading 82.08, which covers within its ambit cutting blades for agricultural, horticultural or forestry machines instead of Heading 84.36 as note 1(k) of Section XVI specifically excludes articles of Chapter 82 or 83. It is also settled law that a specific heading must be given precedence over the general Heading. Note 2 to Section XVI, which govern classification of parts of machines has been applied by the applicant to classify the impugned product under Heading 84.36 is subject to Note 1 to Section XVI. Since, note 1(k) to Section XVI clearly stipulates that This section does not cover (k) Articles of Chapter 82 or 83 . Once, the Chaff Cutter Blades cleared as Spare Parts are specifically covered by Chapter 82, Note 2 to Section XVI cannot be invoked for classification in terms of Note 1 (k) to Section XVI. The Chaff Cutter Blades cleared as spare parts merit classification under Chapter 82.08 attracting GST at the rate of 18% and not under Chapter heading 84.36 Conclusion - The blades are classifiable under Chapter Heading 8208 4000 and attract GST rate of 18%.

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• 2025 (5) TMI 982
  Classification of groundnuts - mere heating of Ground-Nuts with shell to reduce its water content to make it suitable for storage and transportation makes it in-eligible to be classified under HSN 1202 or not - HELD THAT:- It is observed that heating holds close proximity with roasting. Further, it is found that the applicant has not mentioned the details of the heating process to be adopted by him. He has not mentioned details of equipments etc. that will be used to heat ground nuts in order to remove moisture in a controlled way by maintaining adequate temperature. It is also found that the applicant has not submitted any details of the infrastructure set up or intended to be set up by him in this regard. Heating at sufficient degree becomes roasting and roasted groundnuts is not classified under HSN - 1202 by legislature. Further, it is noteworthy that heat-drying or heating can also bring change in physical appearance, structure and composition to subjected goods. Thus, it is observed that mere heating of Ground-Nuts with shell to reduce its water content is squarely covered under roasting process and therefore, the product so obtained is not covered under HSN 1202. Conclusion - Heating of Ground-Nuts with shell to reduce its water content to make it suitable for storage and transportation makes it in-eligible to be classified under HSN 1202.

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• Income Tax

• 2025 (5) TMI 981
  Claim of Unconditional stay on the proclamation and sale of the immovable property of which the Petitioner is the joint owner - as decided by HC [ 2025 (2) TMI 873 - BOMBAY HIGH COURT] ad interim orders granted earlier can be confirmed if the Petitioner deposits 50% of the demanded amount with the Respondents within eight weeks of today. If no such deposit is made within eight weeks of today, this interim order will stand vacated without further reference to this Court. We order accordingly. We clarify that this interim order only restrains the Respondents from selling the attached property. Based on this interim relief, the Petitioner must not deal with the attached property or otherwise sell, transfer, convey, or create any third-party rights in it. HELD THAT:- As we see no reason to interfere with the impugned order passed by the High Court. Special Leave Petition is, accordingly, dismissed.

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• 2025 (5) TMI 980
  Assessment u/s 143 (1) (a) - disallowance of contribution towards ESI and EPF u/s 36 (1) (va) r/w Section 2(24)(x) - HELD THAT:- As on the date of issuance of intimation order by the AO i.e. on 16.12.2021 u/s 143 (1) (a) of the Act of 1961, the issue as to whether the delayed deposit of employees share of contribution towards Employees State Insurance and Employees Provident Fund, though deposited by the assessee beyond the due date prescribed under the relevant Acts, but before the due date of filing of the return of income u/s 139 (1) of the Act of 1961, could be held as the income of the appellant/assessee u/s 36 (1) (va) read with Section 2 (24) (x) of the Act of 1961 or not or whether it is subject to the provisions contained in Section 43-B of the of the Act of 1961, was highly debatable, which was pending consideration before the Supreme Court in Checkmate Services Pvt Ltd. [ 2022 (10) TMI 617 - SUPREME COURT (LB) ] and subsequently, it was resolved by the Supreme Court by the judgment dated 12.10.2022. Furthermore, the assessee in its audit report had only furnished the details of delayed deposit in Column 20 (b) of the Form No. 3CB and had not shown the same as disallowance. Therefore, the AI has committed a grave legal error in processing the return of the assessee under Section 143 (1) (a) of the Act of 1961, in light of principles of law laid down in the matters of Kvaverner John Brown Engg. (India) Pvt. Ltd. [ 2008 (4) TMI 38 - SUPREME COURT ] and Rajesh Jhaveri Stock Brokers Pvt. [ 2007 (5) TMI 197 - SUPREME COURT ] In the instant case, the ITAT has committed a grave legal error by relying upon the decision rendered by this Court in M/s. BPS Infrastructure [ 2024 (4) TMI 1006 - CHHATTISGARH HIGH COURT ] wherein, this Court has dismissed the appeal preferred by the assessee as barred by limitation summarily without formulating any substantial question of law and as such the substantial question of law formulated herein in this appeal was neither involved, formulated and answered in M/s. BPS Infrastructure (supra). Concludingly, we are of the considered opinion that the AO should not have resorted to the provisions contained u/s 143 (1) (a) of the Act of 1961 and instead could have resorted to the provisions u/s 143 (3) of the Act of 1961, as on the date of issuance of intimation order by the AO, exercising power u/s 143 (1) (a) of the Act of 1961, the subject issue was highly debatable and ultimately, that issue was resolved by their Lordships in the matter of Checkmate Services Pvt Ltd (supra) on a later date. The prima facie disallowance of impugned contribution towards ESI and EPF under Section 36 (1) (va) r/w Section 2(24)(x) of the Act of 1961 made by the AO under Section 143 (1) (a) by order dated 16.12.2021 is hereby set-aside. Decided against the respondent/Revenue.

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• 2025 (5) TMI 979
  Validity of reopening proceedings as barred by limitation - Scope of six-year and ten-year periods - HELD THAT:- Since there is no mandatory requirement for an Assessing Officer of a searched person to record his satisfaction that the assets or documents found during the search belong to a person other than the one searched or contained information regarding such other person. Thus, for the purposes of considering the limitation under Section 153C of the Act, it is apposite to consider the date on which the decision is taken by the Assessing Officer to take steps for initiating re-assessment proceedings as the relevant date. The block of ten assessment years is required to be reckoned from the end of the AY 2024-25 being the assessment year relevant to the financial year in which the impugned notice under Section 148 was issued on 30.03.2024. Concededly, the issue involved in the present case is covered by the earlier decisions of this court in Dinesh Jindal [ 2024 (6) TMI 75 - DELHI HIGH COURT] , KAD Housing Private Limited [ 2024 (11) TMI 433 - DELHI HIGH COURT] and Pankaj Jain [ 2025 (1) TMI 1534 - DELHI HIGH COURT] The present petition is allowed. The impugned notice is set aside as being barred by limitation.

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• 2025 (5) TMI 978
  Rejection of application for condonation of delay in filing the return of income - no genuine hardship was established by the Petitioner, and hence, the Petitioner s application was rejected - HELD THAT:- Considering position in law as explained in painstaking detail in Kalpesh Lakdawala [ 2025 (4) TMI 1492 - GUJARAT HIGH COURT] as held reasoning given by the Respondents authorities while rejecting the application do not commensurate with the facts of the case inasmuch as the Respondents have failed to consider that the compensation received by the Petitioner was exempted from tax and therefore, the Petitioner is entitled to get the refund of the TDS which was deposited by the acquiring body with the Government and for that purpose, the Petitioner is required to file the revised return which can be possible only if the delay in filing such revised return is condoned by exercising the powers vested in Section 119 of the Act. The objection of Section 119 of the Act is to see that the Assessee are even not put to any unnecessary hardships to claim any refund which otherwise is eligible to get. The present petition succeeds and is accordingly allowed. The impugned order passed by the Respondent u/s 119 (2) (b) of the Act is hereby quashed and set aside.

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• 2025 (5) TMI 977
  Validity of final assessment order passed without awaiting the conclusion of proceedings before the Dispute Resolution Panel (DRP) - HELD THAT:- A perusal of the material on record would indicate that so long as the petitioner had filed its objection before DRP, albeit not intimated due to glitches in the website/portal respondent No.1 ought to have awaited the outcome of DRP proceedings and could not have proceeded to pass the impugned assessment order, which deserves to be set aside and necessary directions ought to be issued to the DRP to conclude the proceedings by considering the objections in accordance with law. Petition allowed.

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• 2025 (5) TMI 976
  Income tax demands against company dissolved/Insolvent - HELD THAT:- All the dues including the statutory dues owed to the Central Government, if not a part of the Resolution Plan, shall stand extinguished and no proceedings could be continued in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 of the IB Code. In this case, the income tax dues of the CD for the assessment years 2012-13 and 2013-14 were not part of the approved Resolution Plan. Therefore, in view of sub-section (1) of Section 31, as interpreted by this Court in the above decision, the dues of the first respondent owed by the CD for the assessment years 2012-13 and 2013-14 stand extinguished. Once the Resolution Plan is approved by the NCLT, no belated claim can be included therein that was not made earlier. If such demands are taken into consideration, the appellants will not be in a position to recommence the business of the CD on a clean slate.

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• 2025 (5) TMI 975
  Delay in Approaching High Court with writ petitions - Validity of notices issued u/s 143(2) and 142(1) - Whether delay in approaching this court, writ petition be dismissed on the ground of delay? - HELD THAT:- We find that notices under Section 143(2) and 142(1) of the Income Tax Act, 1961 were issued in the month of June, 2023 and the writ petitions were filed in January, 2024. Therefore, in these circumstances, in exercise of our discretion, we are not inclined to entertain the petitions and the same are, accordingly, dismissed with liberty to challenge the order by taking recourse to appropriate remedy available under the law. If the individual appeal is filed within a period of two months, the appeal shall be decided on its own merit without going into the issue of limitation.

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• 2025 (5) TMI 974
  Addition u/s 69A - assessee neither in the assessment proceedings nor in the appeal proceedings produced any cogent evidences to prove that the amount credited in the bank account pertains to its business receipts - CIT(A) deleted addition - HELD THAT:- After going through various details including the assessment orders referred to by the CIT(A), we do not find any infirmity in his findings. The finding of CIT(A) that M/s Sheetal Exports was actually engaged in normal business during the year under consideration has not been rebutted by the revenue by producing any details or evidence. Hence, there is no reason to differ with the findings of the CIT(A). We also find that in case of Vishal Exports Overseas Ltd [ 2012 (7) TMI 1110 - GUJARAT HIGH COURT] has confirmed upholding the deletion u/s 68 of the Act by observing that when the assessee has already offered the sales realization and such income is accepted by the AO, addition of the same amount once again u/s 68 of the Act would amount to double taxation of the same year. The ratio of the above decision is applicable to the facts of the case because the assessee made sales to M/s Sheetal Exports and did not make any purchases either from M/s Sheetal Exports or M/s Maniprabha Impex Pvt. Ltd. In view of the above facts and the decision cited supra, the grounds of the revenue are dismissed.

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• 2025 (5) TMI 973
  Unexplained cash credit u/s 68 - share capital/ share premium - HELD THAT:- For independent verification of these transactions, the AO issued notice u/s 133(6) of the Act to all the subscribers which were duly complied by these subscribers by furnishing evidences/ details qua the investment made. AO as well as the CIT (A) have not commented on these evidences and have harped on the fact that there was no compliance by the directors of the assessee company to the summons issued u/s 131 of the Act. We have even examined the facts filed before us in the form of ITRs, bank statements, copy of computation of income, Profit and Loss account and balance sheet and find that the subscribers were having sufficient sources to invest in the assessee company. Therefore, we are not in a position to accept the conclusion drawn by the ld. CIT (A) on this issue. Moreover, the addition cannot be made merely on the ground that there was no compliance to the summons u/s 131 of the Act, where the assessee has furnished all the evidences/ details before the AO and there was no verification done by the ld. AO to establish or to bring on record any contrary facts. The case of the assessee find support from a series of cases as referred to above wherein it has been held that where the assessee has furnished all the evidences qua the share transactions and the AO have not carried out any further verification or pointed out any defects in the evidences filed by the assessee, then it is not open to the AO to make addition on the ground that there was no compliance to the summons issued u/s 131 of the Act. Appeal of the assessee is allowed.

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• 2025 (5) TMI 972
  Rejection of application filed in Form No.10AB u/s 80G(5)(iii) and cancelled the provisional registrations - CIT(E) observed that the appellant has not furnished complete details regarding the expenditure incurred for religious purpose - HELD THAT:- AR submitted that the use of the words religious or religion in a few objects of the trust deed does not mean that the trust was not for charitable purpose but was for religious purpose. This is clear from the fact that the trust has not incurred any expenditure which was of religious nature. We find that the appellant has not given any details of actual religious expenditure to the CIT(E). Therefore, the matter is restored to the file of CIT(E) to carry out verification as to whether 5% of the total income of the assessee-trust was spent for religious purpose and thereafter to consider the grant of registration in accordance with law. The appellant should be granted adequate opportunity of hearing before deciding the issue. The appellant is directed to furnish all details needed by the CIT(E) during the fresh proceedings. For statistical purposes, the appeal of the assessee is allowed.

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• 2025 (5) TMI 971
  Assessment u/s 153A - absence of any incriminating material found during the course of search u/s 132 - HELD THAT:- Since the addition in the instant case has been made in absence of any incriminating material found during the course of search and since the assessment is an unabated assessment and the addition is based mainly on the basis of third party statement without any supporting evidence and that too on estimate basis, therefore as relying on Abhisar Buildwell (P.) Ltd [ 2023 (4) TMI 1056 - SUPREME COURT] we hold that the addition made by the Assessing Officer by estimating the commission income in 153A assessment is not in accordance with law. We, therefore, set aside the order of the CIT(A) and direct the AO to delete the addition. Appeal filed by the assessee is allowed.

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• 2025 (5) TMI 970
  Penalty u/s 271(1)(c) - defective notice u/s 274 - non specification of clear charge - HELD THAT:- It is pertinent to note that the notice u/s. 274 r.w.s 274(1)(c) of the Income Tax Act, 1961 dated 20-10-2016 has not at all specified under which limb section 271(1)(c) has been invoked. Thus, the decision of Emerald Meadows [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] and [ 2016 (8) TMI 1145 - SC ORDER] is squarely applicable in the present case. Besides this, the mere disallowance of the claim which otherwise genuine and under bonafide belief, claimed by the assessee, cannot be the criteria for levying penalty u/s. 271(1)(c). Mere rejection of claim cannot be the ground for levying penalty u/s. 271(1)(c) as held in case of CIT vs. Reliance Petro Products Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] . Thus, the penalty imposed u/s. 271(1)(c) of the Act does not survive. Hence filed by the assessee is allowed.

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• 2025 (5) TMI 969
  Denial of Foreign Tax Credit (FTC) - delay in filing of Form No.67 beyond the due date of filing the return - HELD THAT:- We observe that in the case of Duraiswamy Kumaraswamy [ 2023 (11) TMI 1000 - MADRAS HIGH COURT ] has held that filing of Form No.67 read with Rule 128 of the Income-tax Rules, 1962 is only directory in nature and not mandatory. Similar view has also been followed by this Tribunal in the case of Preeti Das [ 2025 (1) TMI 1065 - ITAT PUNE] placing reliance of the judgment of Hon ble Madras High Court in the case of Duraiswamy Kumaraswamy [Supra] . Thus, we allow the claim of FTC claimed by the assessee in Form No.67 and allow the Grounds of appeal Nos. 1, 2 and 3 raised by the assessee. Taxation of dividend income from USA based company - In the income-tax return, assessee has offered this income to tax @25% as per Article 10 of Indo-USA Double Taxation Avoidance Agreement - CPC while processing the return u/s. 143(1)(a) has taxed the said dividend income @30% - HELD THAT:- Article 10, we find that 2(a) is not applicable on the facts of the case and what remains is clause 2(b) which provides that except for the cases covered in 2(a), in all other cases, the dividend is taxable @25% of the gross amount. Since the rate of tax is already prescribed under the Treaty, the same shall prevail over and above the normal tax rate provided under the Act. Therefore, assessee has rightly offered to tax the dividend income @25% and the CPC grossly erred in taxing the dividend income @30% in the given case. Finding of CIT(A) is set aside. The additional ground of appeal raised by the assessee is allowed.

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• 2025 (5) TMI 968
  Revision u/s 263 as barred by limitation - HELD THAT:- Assessment was framed u/s 143(3) read with section 263 of the Act vide order dated 06.03.2023 in which it was not the issue raised by the PCIT in the first round. In fact the issue was with regard to non-deduction of TDS u/s 194C of the Act on freight expenses. Therefore, the said order is neither erroneous nor prejudicial to the interest of the Revenue. We note that the ld. AO after taking into consideration all the evidences and details furnished by the assessee recorded a finding that the provisions of Section 194C of the Act were not applicable. Therefore, the exercise of jurisdiction u/s 263 of the Act by the ld. PCIT vide order dated 27.12.2024 is bad in law. PCIT could have revised the assessment framed u/s 143(3) of the Act dated 05.12.2019, but the same is barred by limitation and therefore, no revision could have been made of the original assessment also. We are inclined to quash the revisionary order passed u/s 263. Appeal of the assessee is allowed.

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• 2025 (5) TMI 967
  Unexplained cash credit u/s 68 - non compliance to the notices issued u/s 133(6) or 131 - HELD THAT:- The addition cannot be made merely on the ground that there was no compliance to the letter issued u/s 133(6) of the Act when assessee has filed all the details/ evidences before the ld. Assessing Officer. We also note that the loan has been repaid partially in the current year and remaining in the subsequent assessment years. When all the ingredients of section 68 were proved, the addition can not be made merely on the ground that there was no compliance to the notices issued u/s 133(6) or 131 of the Act as has been held in decisions Orissa Corporation Pvt. Ltd. [ 1986 (3) TMI 3 - SUPREME COURT ], Orchid Industries Ltd. [ 2017 (7) TMI 613 - BOMBAY HIGH COURT ] and Crystal Networks Pvt. Ltd. [ 2010 (7) TMI 841 - KOLKATA HIGH COURT ]. Appeal of the assessee is allowed.

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• 2025 (5) TMI 966
  Rectification u/s 154 - Addition invoking provisions of section 50C - difference between ready reckoner value adopted for stamp duty and actual consideration received - HELD THAT:- Order u/s 143(1)(a) addition in the hands of assessee u/s 50C of the Act has been challenged by the assessee before Ld. CIT(A) but the appeal is still pending to be disposed off. Subsequently assessee filed an application u/s 154 stating that CPC made an apparent mistake making impugned addition and the assessee succeeded but after some time AO passed another order u/s 154 of the Act reversing the previous order. CIT(A) in the impugned order has not dealt on merits but has observed that as there was no apparent mistake in the return processed u/s 143(1)(A) of the Act no order u/s 154 of the Act was required to be passed and Ld. CIT(A) thus held assessee s appeal as infructuous. The date of the order appealed against is 27.10.2023 but u/s 154 of the Act mentioned in Form 35 filed before CIT(A) is different to the date of order passed u/s 154 on 11.12.2024 and the copy of which is placed on record. We also note that Ld. AO has allowed the assessee s application u/s 154 stating that there is an apparent mistake in the assessment order framed u/s 143(1)(a) but it was subsequently reversed by AO. There is an apparent mistake as appellant mistake has been admitted by Ld. AO. Therefore CIT(A) ought to have dealt with the merits of the case relating to addition u/s 50C of the Act. Since the order for appeal against order u/s 143(1)(a) of the Act is pending before the first appellate authority, we deem it appropriate to remit the issue raised on merits in the instant appeal to the file of Ld. CIT(A). Appeal of the assessee is allowed for statistical purposes.

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• 2025 (5) TMI 965
  Addition made on account of cash deposits - unexplained cash credit u/s 68 read with Section 115BBE - HELD THAT:- Entire details have been filed by the assessee before the lower authorities, which was not appreciated by the lower authorities. There could not be any other better detail that are left in the instant case which was not submitted by the assessee. We find that the assessee had already disclosed the sales which has been accepted by the revenue. After crediting the entire sales, the assessee had declared loss of Rs. 5,25,60,240/-. Hence, fresh addition made in the sum of Rs. 2,24,69,739/- amounts to double addition made by the AO. Hon ble Madras High Court in the case of SMILE Microfinance Limited [ 2024 (11) TMI 1444 - MADRAS HIGH COURT ] had held that the enhanced rate of tax prescribed in section 115BBE of the Act could be made applicable only from AY 2018-19 onwards and not for the earlier years. Thus, we hold that there is no question of application of provisions of Section 115BBE of the Act in the instant case as the cash deposits were duly explained out of cash balance available in the books of the assessee which stood rejected by the lower authorities. Hence, we have no hesitation to delete the addition in the sum of Rs. 2,24,69,739/- and allow the grounds raised by the assessee

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• 2025 (5) TMI 964
  Reopening of assessment u/s 147 - AO treated the return filed on 31/05/2021 as non-est - HELD THAT:- In the present case, in response to the notice dated 30/03/2021, issued u/s 148 of the Act, the Assessee filed his return of income belatedly on 31/05/2021 which has been termed as belated return by the A.O. and ex-parte assessment order has been passed which has been upheld by the Ld. CIT(A). It is found that both the A.O. and the CIT(A) have lost their sight to the CBDT Circular No. 08/2021 dated 30/04/2021, wherein the CBDT has extended last date for filing the return of income in response to Section 148 of the Act till 31/05/2021. Thus, both the authorities have committed error in holding the return filed by the Assessee dated 31/05/2021 in response to the notice u/s 148 as non-est. Therefore, we set aside the orders of the Lower Authorities and remand the matter to the A.O. with a direction to treat the return filed by the Assessee dated 31/05/2021 as valid Return and pass the denovo assessment order in accordance with law. Appeal of the Assessee is partly allowed for statistical purpose.

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• 2025 (5) TMI 963
  Validity of additions made u/s 153C - Addition u/s 68 - HELD THAT:- The onus is on the assessee which has been incorrectly shifted to AO by the CIT(A). Thus, it shall be open to the assessee to place arguments and adduce evidences as may be considered expedient to defend its stand on the subject matter of dispute. As per its captioned cross-objections, the assessee has sought to impugn the jurisdiction assumed u/s 153C of the Act. Complete facts are not available before the Tribunal to support the objections raised. The assessee has not demonstrated before the Tribunal as to how the jurisdiction assumed u/s 153C of the Act is plagued with any infirmity and consequent additions so made are unsustainable in any manner. We are thus not in a position to make comments at this stage. It shall be open to the assessee to raise such plea before the CIT(A) in accordance with law. CIT(A) shall adjudicate the issue raised towards validity of additions made u/s 153C of the Act by passing a speaking order.

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• 2025 (5) TMI 962
  Unexplained investment - contention of the assessee that an affidavit has been filed to submit that part amount belong to other parties - HELD THAT:- The facts mentioned in the affidavit have not been refuted and therefore, should be believed. Reliance has been placed in the case of Senior Bhosale Estate [ 2019 (11) TMI 940 - SUPREME COURT] and Kuldeep Kumar[ 2023 (12) TMI 53 - ITAT JODHPUR] . It is further contention of the assessee that certain turnover declared in return of income ( ROI ) also includes the remaining cash transaction in Kabadi business. Likewise, past years savings adequately covers source of purchase of commercial vehicle. Having regard to the smallness of amount involved and attendant circumstances, the explanation offered cannot be disbelieved and held implausible. When tested on the touchstone of preponderance of probabilities, the explanation offered appears fairly reasonable. The assessee has declared turnover of INR 19,80,000/- and also offered an income of INR 3,87,600/- which encompasses the cash attributable to the extent of INR 4,10,020/- belonging to the assessee. The remaining amount claimed to be belonging to other parties is supported by affidavits of respective parties. In totality, the benefit of doubt needs to go in favour of the assessee. The explanation towards source of purchase of commercial vehicle also appears plausible. Consequently, the additions made by the AO are deleted. Appeal of the assessee is allowed.

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• 2025 (5) TMI 961
  Reopening of assessment u/s 147 - non disposal of assessee objections against reopening - HELD THAT:- AO was under obligation to dispose of the objections raised by the Assessee to reopening the assessment by way of a speaking order before passing the reassessment order provided the Assessee had acted in accordance with the judgment of GKN Driveshaft (India) Limited. [ 2002 (11) TMI 7 - SUPREME COURT ] We note that in the present case the Assessee has acted in accordance with the judgment of the Hon ble Supreme Court in the case of GKN Driveshaft (India) Limited (supra). On the other hand, the Assessing Officer did not dispose off the objections raised by the Assessee to reopening of assessment by way of a speaking order and thus, failed to comply with judgment of the Hon ble Supreme Court in the case of GKN Driveshaft (India) Limited (supra). Therefore, in the facts and circumstances of the present case the reassessment order, dated 31/03/2022, passed under Section 143(3) read with Section 147 of the Act is quashed as having been passed without jurisdiction. Decided against revenue.

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• 2025 (5) TMI 960
  Disallowance of 10AA deduction - treating export freight charges foreign travelling expenses of unit-1 as those of unit-2 - HELD THAT:- We notice that the assessee has submitted the details of the export done by each Unit linking the Export Freight Charges. We further notice that Unit I Unit II are catering to customers in different countries i.e. US and Europe and by maintaining separate set of books these expenses are directly booked in the respective Units. Though the AO has alleged that expenses are diverted to Unit I, the AO did not consider the submissions of the assessee with regard to why the profits of Unit I is less. We also notice that the AO did not examine the breakup of Unit wise expenses towards Freight and Foreign Travel submitted by the assessee. During the course of hearing written submissions were made from the perusal of which it is noticed that for sample invoices from both Unit I II the expenses are clearly identified separately and tracked separately. It is also noticed from the perusal of the submissions that the assessee has provided all the relevant details before the lower authorities to substantiate the claim that the expenses are booked on actual basis and that there is a direct nexus of the expenses to the Unit. No infirmity in the decision of CIT(A) in deleting the disallowance made by the AO towards deduction u/s 10AA. The grounds raised by the revenue in this regard are dismissed. Disallowance u/s 40(a)(ia) towards short deduction of TDS - HELD THAT:- From the perusal of the evidences submitted by the assessee we notice that the AO failed to consider the fact that the assessee has made advance payments to M/s. Hariom Enterprises on which tax has been deducted at source. When the tax deducted on total payments including the advance is considered, we are convinced that there is no short deduction of tax at source by the assessee. We notice that the CIT(A) has considered the above fact as substantiated by the assessee with documentary evidences such as Form 16A Form 26AS and has deleted the disallowance. Therefore we see no reason to interfere with the decision of the CIT(A) in this regard. Appeal of the revenue is dismissed.

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• 2025 (5) TMI 959
  Reassessment proceedings - Transactions in NSEL Exchange as Client Code Modification Transaction for shifting of profit/ loss added to the income of the assessee - HELD THAT:- Where in the course of regular business practice there could be Client Code Modification on sale or purchase of securities by the broker for the purpose of rectifying an error while punching the orders and merely on the basis of the said information without any cogent link of the assessee with its broker cannot be a reason to reopen and it is only mere suspicion or doubt that income has escaped assessment. Thus we hold that there is no infirmity in the order of the ld. CIT(A) in holding that the reassessment is invalid and bad in law. Appeal filed by the revenue is hereby dismissed.

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• 2025 (5) TMI 958
  Penalty proceedings initiated u/s 271(1)(c) - defective notice u/s 274 - as there was non-application of mind by the AO for non-striking of the irrelevant limb and whether the same violates the principles of natural justice - HELD THAT:- As decided in Mohammad Farhan Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] has held that not striking of the irrelevant limb in the notice is not a mere procedural defect but the same would vitiate the entire penalty proceeding. Hon ble High Court also held that even if the assessment order contains the reason for the initiation of penalty, the same cannot be a justification to cure the defect in the penalty proceedings. It was held that non striking of the irrelevant limb is a mandatory condition which when contravened becomes fatal to the revenue. Thus, an omnibus show cause notice would tantamount to non-application of mind and resulting in prejudice caused to the assessee. It is held to be in violation of the principles of natural justice which is ultra virus to Article 14 of the Constitution. Here, in the present case, the revenue has not brought any contradictory facts to disprove that the impugned notice caused prejudice to the assessee. Pertinently, the assessment order is also silent as to the reason for the initiation of the penalty, though the final penalty order passed u/s. 271(1)(c) specifies that the same is for concealment of particulars of income and therefore the penalty proceeding shall be vitiated for the above said reasons. By respectfully following the decisions relied upon by the ld. AR, we hold that the penalty order passed u/s. 271(1)(c) of the Act is bad in law and not sustainable. Allow ground no. 1 raised by the assessee by directing the ld. AO to delete the penalty levied on the assessee Penalty on voluntary disclosure during search action - whether assessee offering additional income, post survey action vide revised return would result in levying of penalty for concealment of income or not? - HELD THAT:- As in the present case in hand, the assessee has offered additional income in all the 3 assessment years post survey and has also not brought anything on record to show that the additional income was not part of bogus transaction as alleged by the department. Further, there could be possibilities of error or discrepancy in the return of income filed by the assessee for one year but there cannot be presumption that in all the three impugned years there was error or mistake in the return of income filed by the assessee, that to not for any meager amount. We would like to place our reliance on the decision of MAK Data Pvt. Ltd. [ 2013 (11) TMI 14 - SUPREME COURT] which was extensively relied upon by the ld. DR, where it was held that surrender of income merely does not absolve the assessee from penalty proceeding unless the assessee has discharged the burden to establish that the concealment was unintentional and not malafide. The explanation 1 to Section 271(1) raises a presumption of concealment, where the assessee if fails to offer an explanation or the explanation offered by him is considered to be false or fails to substantiate that the explanation is bonafide, to the satisfaction of the ld. AO, then it is deemed that the said income has been concealed. In the present case in hand, we do not find any justification in holding that the concealment of additional income declared by the assessee in its revised return is unintentional or is merely an error or mistake crept in in the original return of income filed by the assessee. The assessee has also failed to substantiate the same. We are of the considered view that the penalty levied by the ld. AO and upheld by the ld. CIT(A) holds merit and does not require any interference. Appeal filed by the assessee is dismissed.

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• 2025 (5) TMI 957
  Addition u/s 68 and 69C - unexplained cash credit and unexplained expenditure - HELD THAT:- The share is neither a penny stock in the impugned assessment year, nor the additions made by the AO can be sustained due to the above mentioned reasons. The additions made by the AO under section 68 as well as under section 69C is deleted for the reasons mentioned and the appeal of the appellant allowed on merit. Appeal of the assessee is allowed.

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• 2025 (5) TMI 956
  Addition of commission income and other income of the society allowed as deduction u/s.80P(2)(c) and u/s.80P(2)(d) - CIT(A) allowed the claim of assessee u/s.80P(2)(c) after verifying all the relevant documents and details in respect of the deduction claimed - HELD THAT:- As noted that, the commission income earned by the assessee is towards collection from MSEDCL bills, service rendered by the assessee to its members and customers. The Ld.CIT(A) noted that, the expenses incurred towards the collection of bills of MSEDCL, such as salary of employees, electricity charges, cash insurance, printing charges, computer and painter system maintenance etc. were directly attributable to the income and was verified by the Ld.CIT(A). It is further noted that, the locker rent charges collected from the members were received towards services given to its members for providing locker space in credit society branches throughout the year. Nominal charges were taken from the members which were duly reported in audit report. CIT(A) noted that, the accounts of the assessee separately audited by the Ministry Of Corporation, Maharashtra State, and there is no intentional misstatement or misreporting of information. CIT(A) thus, allowed the claim of assessee u/s.80P(2)(c) after verifying all the relevant documents and details in respect of the deduction claimed correctly. Cash deposits during demonetization period - CIT(A) deleted the addition - AR furnished the summary bank accounts of assessee in which the cash deposited are correlated with the money deposited to the MSEDCLalong with the agreement entered into MSEDCL to render these services. It is noted that, the MSEDCL collection report from 08/11/2016 and 06/12/2016 wherein reconciliation is drawn in respect of the cash deposited by the assessee also reflected in the bank account of MSEDCL account. In our opinion the assessee has established to the hilt doubt the cash collected and deposited during the demonetization as per the mandate of Govt. of Maharashtra during the demonetised period based on the agreement entered into with MSEDCL supported by circulars issued in respect of the that permitted assessee accept electricity bill in specified bank notes. Decided against revenue.

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• 2025 (5) TMI 955
  Addition u/s 68 on account of loan received - genuineness and creditworthiness of the lender not proved - HELD THAT:- Settlement Commission has found that the loan taken from the aforesaid four parties namely, Calmo Estates Private Limited, Dotch Sales Private Limited, Penguin Trading Agencies Limited and Seagold Mercantiles Private Limited are genuine. Once these loans have been found to be genuine in the earlier years, then there is no question of any disallowance of interest in this year. Even in the case of Dotch Sales Private Limited, apart from the fact that Settlement Commission has held the loan taken from Dotch Sales Private Limited to be genuine, we find that documents furnished before us clearly prove the identity, genuineness and creditworthiness of the parties and without any enquiry by the AO, loan taken from such parties cannot be held to be non-genuine. Accordingly, the addition on account of loan and addition on account of interest is deleted. Disallowance of Section 14A under Rule 8D which has been made by the ld. AO on gain of investment made in the partnership firm. It is seen that there was a loss incurred in the previous year from the partnership firm. Once the assessee has not earned any exempt income during the year, then there is no question of any disallowance of 14A. Accordingly, disallowance made u/s.14A on r.w.r 8D is deleted. In the result, appeal of the assessee is allowed. Addition u/s.68 from the loan taken from Dotch Sales Private Limited - In this year assessee has furnished all these details as was filed in A.Y.2017-18, wherein we have found that lender party found has creditworthiness and moreover these parties have been held to be genuine by the Income Tax Settlement Commission in the earlier years. Therefore, the loan during the year is held to be genuine and the addition made by the ld.AO is deleted. Disallowance of interest is also deleted once the loan has been held to be genuine. No disallowance of interest can be made.

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• 2025 (5) TMI 954
  Addition of Commission income from the accommodation entry business by taking the rate of 1.04% for charging of commission income on the turnover of accommodation entries - HELD THAT:- Since commission in the case was settled @ 0.47% for which the AO was directed to follow the directions of the Tribunal, as aforesaid. Hence, respectfully following the decision in the case of assessee s brother Sh. Anand Kumar Jain [ 2023 (5) TMI 1186 - ITAT DELHI ] we set aside the orders of the Ld. CIT(A) in the instant appeal and direct the AO with the similar directions as aforesaid. In the result, this ground of appeal raised by the Revenue is rejected. Whether the impugned amount can at best be treated as obtained out of assessee s undisclosed commission income which has already been brought to tax? - We note that on identical issue, the Tribunal [ 2023 (5) TMI 1186 - ITAT DELHI ] in the case of Sh. Anand Kumar Jain, observed that such receipt form part of accommodation entries and that the AO may verify the same. Following the aforesaid precedent, we direct the AO to verify the same as stated above.

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• 2025 (5) TMI 953
  Rejection of application for registration u/s 12AB - Charitable activity or not? - donations received - HELD THAT:- Full details in respect of donations were not furnished by the assessee trust and only a few receipts as mentioned above which does not contain all the requisite details was furnished and therefore, Ld. CIT, Exemption, Pune was of the view that the source and genuineness of these transactions have remained unproved. CIT, Exemption, Pune on the issue of ration distribution observed that the assessee was required to estimate the value of food grain collected and distributed and also required to disclose it in its financial statements but this was also not done by the assessee. In this regard, we find that in the ground no.6 of appeal the assessee trust himself admitted that even if the activity is undertaken by the assessee trust monetary value is not recorded in the financial statements since the valuation was difficult and whatever food grains was received the same was distributed amongst the beneficiaries. In view of all the above discrepancies/short comings, Ld. CIT, Exemption, Pune was not satisfied about the charitable nature and genuineness of the assessee trust and compliance to requirements of any other law for the time being in force by the trust as are material for the purposes of achieving its objects, therefore, in our opinion the application was rightly rejected by Ld. CIT, Exemption, Pune and we do not see any reason to interfere in the order passed by Ld. CIT, Exemption, Pune. Accordingly, the grounds raised by the assessee are dismissed.

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• 2025 (5) TMI 952
  Rejection of audited books u/s 145 - AO was required to frame the assessment u/s 144 once the books were rejected u/s 145(3) OR assessment u/s 143(3) - AO obligation to direct a special audit under section 142(2A) of the Act after rejecting the books u/s 145(3) HELD THAT:- The appellant is engaged in precious metal business which by very nature is complex for the reason of involving intricate processes, high-value transactions with low margins, and a highly competitive market, demanding careful management of inventory, high volatility in pricing, and everchanging customer needs/experience, high risk of fluctuating cost etc. Admittedly, due to complex nature high-volume transactions involved and insufficiency of inventory the audited books of account financial results of the appellant were rejected. When such audited results are rejected, then the assessing officer not being an expert of accounts, having regard to complexity of business of the appellant was duty bound to invoke direct a special audit u/s 142(2A) of the Act. The outcome of such direction could have to rightly enabled the Ld. AO in deducing taxable income in the manner spirt provided u/s 144 of the Act. The ad-hoc determination of taxable income without such assistance from expert in the present case not only jostled ad-hoc irrational estimations but led to farfetched determination. The said capricious determination of income since based upon ad- hoc estimation of sales/turnover and ad-hoc estimation of gross profit which in turn was devoid of all pivotal information cogent material taken on records and without putting the appellant to notice is inconsonance with the provisions of section 144 of the Act. Therefore respectfully following the former judicial precedents, we disapprove the estimations and resultant determination of income and for the reason deem it fit to remand the matter to the AO for fresh determination of income in accordance with law after complying with the provisions of section 142(2A) of the Act. The appeal in result allowed for statistical purposes

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• 2025 (5) TMI 951
  Validity of reopening of assessment after expiry of 4 years - validity of sanction accorded u/s 151 - as argued Pr. CIT was not the competent authority - HELD THAT:- As evident from the record that at the time of accepting the return of income filed by the assessee, the case was not considered u/s 143(3) of the Act, therefore section 151(2) is applicable for reopening beyond the period of 4 years. From perusal of the above provision of section 151(2) of the Act, it is clearly mentioned that No notice shall be issued u/s 148 of the Act by an AO who is below the rank of Joint Commissioner, after the expiry of 4 years from the end of relevant assessment year, unless the Joint Commissioner is satisfied on the reasons recorded by such AO, that is a fit case for the issue of such notice. Whereas, the AO in this case has obtained sanction by Pr. CIT, Thane. As relying on Ghanshyam Khabrani [ 2012 (3) TMI 266 - BOMBAY HIGH COURT ] the impugned order of Ld. CIT(A) is not legally sustainable because there was non-compliance of the mandatory requirements of section 151(2) of the Act, therefore the notice for reopening the assessment is not legally sustainable in the eyes of law. Assessee appeal allowed.

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• 2025 (5) TMI 950
  Validity of reassessment order passed - notice u/s 143(2) was not issued by AO within prescribed time - denial of claim u/s 54F - HELD THAT:- Issuance of notice u/s 143(2) which is qua the returns filed u/s 139 of the Act shall apply in cases where the returns are filed u/s 148 also, as going by the provisions of section 148, it is clarified that, the provisions of the Act shall, so far as may be, apply accordingly as if such return (u/s 148 r.w.s. 139) were a return required to be furnished under section 139. Adverting the facts of present case, the Return of Income in response to notice u/s 148 was filed by the assessee on 31.03.2021, and the notice u/s 143(2) was issued on 20.11.2021, which in accordance with the applicable provisions of proviso to sub-clause (ii) of section 143(2) was to be issued within 3 months i.e., on or before 30.06.2021, however, the notice was issued on 20.11.2021, beyond the prescribed time as per aforesaid provisions, thus, was barred by limitation. The explanation by the revenue that the notice u/s 143(2) was issued within period of 1 year from the end of the month in which the return was furnished cannot be accepted as the same was not substantiated or supported by any material, decision or the mandatory provisions of the Act. Therefore, undoubtedly, the notice issued u/s 143(2) was beyond the prescribed time under the provisions of section 143(2), which needs to be strictly adhered to by the revenue. In absence of a valid notice u/s 143(2), which was not issued within the prescribed time limit for the purpose of making the assessment is a violation of mandatory provisions of law, therefore, the reassessment impugned order passed u/s 147 r.w.s. 144B of the Act dated 30.03.2022, dehors a valid notice u/s 143(2) is a nullity and liable to be quashed. Decided in favour of assessee.

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• 2025 (5) TMI 949
  Depreciation disallowance u/s 11(6) - double deduction - as argued the appellant has not claimed the purchase value of assets as application of income and hence, the claim of depreciation did not amount to claim of any double benefit - HELD THAT:- Deduction by way of depreciation shall be disallowed only if depreciation is claimed in respect of any assets, acquisition of which has already been claimed as an application of income under this Section 11 of the Act. In the present case, assessee submitted before us that on verification of the records of the assessee, it would become clear that assessee has never claimed application of income towards acquisition of the above assets, either in this year or any of the earlier previous years. Therefore, there is no question of making any disallowance under Section 11(6) of the Act. Assessee had also furnished Chartered Accountant Certificate in support of the above claim that the assessee has never claimed application of income towards acquisition of assets. Thus in the interest of justice, the matter is restored to the file of AO to verify from the case records whether the assessee has claimed cost of acquisition of such assets on which depreciation was claimed towards application of income either in this year or any of the previous assessment years. If, on verification of records it is found that the assessee has not claimed the cost of acquiring the assets as application of income , then relief may be given to the assessee, in accordance with law. Appeal of the assessee is allowed for statistical purposes.

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• 2025 (5) TMI 948
  Lumpsum / ad hoc addition - capital investment made by the assessee, treating the same as undisclosed purchase - HELD THAT:- As we find that necessary supporting documents to substantiate the addition in assets by way of fresh investment are furnished before the Ld. AO, however, the addition was made on account of unexplained investment, whereas referring to the bank statement of the assessee, the source of investment cannot be construed as unexplained at threshold, without considering the entries through banking channel which are claimed to be duly recorded in the books of the assessee. It cannot be said that all the evidence laid are ingenuine or bogus and the transactions is totally through unexplained investments. However, it seems that the assessee was unable to explain the source of investment made to the satisfaction of the Ld. AO, which though as per the narrative in the assessment order does not find to be specifically harped upon by the AO, when the part information was furnished by the assessee. Since the information furnished before us supports the assessee s contention that the investments are made from explained sources subject to verification of such evidence, thus, it would be fair and justified to restore this issue back to the file of Ld. AO for fresh adjudication. Lumpsum / ad hoc addition on account of clerical error made by assessee, treating the same as short term capital gain - HELD THAT:- On perusal of the depreciation chart of the assessee, it is evident that there was no entry in the column SOLD , therefore, the inference that there was a sale of asset during the year under consideration by the AO cannot be subscribed to, in absence of any evidence to prove so, only on the basis of presumption or failure of assessee to furnish the supporting evidence regarding the method of depreciation due to which such change in closing stock viz-a-viz opening stock was occurred. This issue needs further examination / investigation, therefore, in the interest of justice it would be appropriate to set aside the same to the file of Ld. AO for verification and fresh adjudication. Lumpsum / adhoc addition on account of change in the value of opening stock of furniture and fittings - HELD THAT:- Since the issue pertains to clerical error in computation of depreciation, which arises because the assessee was unable to explain the same with supporting evidence before the Ld. AO, the same, thus, is covered by our observations to the issue raised by the assessee in ground no. 6 of the present appeal, therefore, we deem it fit to restore the same back to the file of Ld. AO for verification and fresh adjudication.

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• 2025 (5) TMI 947
  Addition under the head of Discount/claim/shortage/deduction on proportionate basis in compression of last year - HELD THAT:- CIT(A) has not adjudicated the issue(s) arising in appeal on merits and simply dismissed the appeal for non-prosecution wherein the assessment order of the AO was upheld. The learned CIT(Appeals) is obligated u/s. 250(6) to specify points for determination, decision thereon and reasoning for such decision. CIT(Appeals) has not even made any enquiry as to the claim of expenses with respect to shortage/discount/claims/deductions etc.as well no enquiries were made with the parties to whom these expenses were claimed to have been paid or incurred or stood credited, and CIT(A) simply upheld the assessment order passed by the AO. Appellate order passed by CIT(Appeals) is not sustainable in the eyes of law, as this is an order passed exparte in limine without deciding the issues arising in appeal on merits, which is in contravention of Section 250(6). AO s order is also not sustainable, as the AO has made additions based only on the reference to the percentage of expenses vis a vis turnover by comparing the current year with the preceding year of the turnover/sales with these corresponding expenses, without making any enquries to unravel truth. No specific defects are pointed out by the AO with respect to claim of these expenses by the assessee. AO has not made any enquiry with the parties with respect to whom these expenses were claimed to be have been incurred or paid and/or stood credited by the assessee to arrive at the finding that these expenses were not incurred wholly and exclusively for the purpose of business. Thus, in the facts and circumstances of the case, both the orders of the AO as well as CIT(Appeals) are set aside and the matter is restored back to the file of AO for de novo assessment. Appeal of the assessee is allowed for statistical purposes.

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• 2025 (5) TMI 946
  Rejecting the assessee s application seeking registration u/s 12A - assessee was not provisionally registered u/s 12AB which condition was necessary for seeking registration u/s 12A(1)(ac)(iii) - HELD THAT:- The provisions governing seeking and grant of registration to trusts already registered u/s 12A/12AA of the Act were provided u/s 12A(1)(ac)(i) r.w.s 12AB(1)(a) of the Act. While those seeking registration for the first time, whether new or old trusts were first to be granted provisional registration u/s. 12AB(1)(c) of the Act and thereafter required to seek final registration in terms of section 12A(1)(ac)(iii) of the Act. Assessee pointed out that in the case of the assessee, it was an old Trust, which already been granted registration under section 12AA of the Act; that accordingly, as per the provision of new scheme, it was required to seek fresh registration in terms of section 12A(1)(ac)(i) of the Act. However, in the instant case, the assessee has inadvertently filed application under section 12A(1)(ac)(iii) of the Act. As in various decisions of the ITAT holding that mere mistake in making an application for grant of registration under a wrong provision/section was not fatal to the grant of registration, and the ld.CIT had directed to treat the application of the assessee under correct section, and consider the case on merit. Since the application was inadvertently filed by the assessee under an incorrect provision, we direct the ld.CIT(E) to treat the application filed as per the applicable provision and in the light of the same, consider the case of the assesse on merits. Appeal of the assessee is allowed for statistical purpose.

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• Customs

• 2025 (5) TMI 945
  Benefits pertaining to the Special Additional Duty of Customs (SAD) and the Additional Duty of Customs - it was held by High Court that Bearing in mind the findings of fact which have come to be recorded in both the final order of the Tribunal as well as the order-in-original passed by the Commissioner, it is found that the appeal fails to raise any substantial question of law which would warrant consideration. HELD THAT:- As, prima facie, it appears that the High Court has not gone into the questions raised by the petitioner, notice issued returnable after six weeks.

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• 2025 (5) TMI 944
  Rejection of the Petitioners application for Advance Authorisation (AA) for import of Raw Petroleum Coke (RPC) intended for manufacture and supply of Calcined Petroleum Coke (CPC) to Special Economic Zone (SEZ) units - deemed exports or not - entitlement to Advance Authorisation under the Foreign Trade Policy, 2023 - applicability of DGFT Notification No.68/2023 dt.07.03.02024, the revised policy condition 06(b)(iii) import of RPC by on Actual use basis or not - HELD THAT:- The Hon ble Supreme Court in the case of M.C. Mehta Vs. Union of India and Others [ 2018 (11) TMI 1352 - SUPREME COURT ] while hearing interlocutory applications, wherein the Union of India through the Ministry of Environment, Forests and Climate Change filed and affidavit on 08th October, 2018 regarding use of calcined pet coke (CPC) in Aluminium Industry, held that the calcined pet coke (CPC) (domestic as well as imported) can be used as raw-material for anode making in the Aluminium Industry with the revised BIS specifications. In the said order, the Hon ble Supreme Court, based on the report given by the Central Pollution Control Board (CPCB) dated 04.10.2018 observed that as per the BIS guidelines, calciners are permitted to use high sulphur containing raw petroleum coke for making CPC having sulphur content less than 3.5%. While recording the statement of the learned Amicus Curiae the view expressed by the CPCB are also acceptable to EPCA and accordingly disposed of the applications observing that the raw pet coke (domestic and imported) can be used as a feedstock for producing calcined pet coke. In the said order, the applications filed by the petitioner herein seeking certain directions, while considering the affidavit dated 23.08.2018 stating that 11 contracts have been entered into on or before 26.07.2018 for the import of Anode grade raw pet coke. It is pertinent to note that in the Notification No.68/2023, dated 07.03.2024 the authorisation for restricted imports, condition No.3 that Import of RPC by Calciners shall be on Actual User basis and shall not be transferred to any other unit(s) including SEZ unit(s). Export of CPC by Calciners shall not be permitted is contrary to the orders passed by the CAQM, dated 15.02.2024 and also to Clause VI of the Notification dated 07.03.2024 and the Minutes of the Meeting held on 27.03.2024 for allocation for import of raw petroleum coke for CPC manufacturing and Calcined Petroleum Coke for Aluminium Industry for the Financial Year 2024-25. In view of the facts that the respondents earlier permitted the petitioner to export the CPC manufactured by it to SEZ Units and granted advance authorisations to the petitioners on 14.05.2024, 13.08.2024 and 28.10.2024, and in view of the preceding analysis there is no justification in issuing DGFT Notification No.68/2023 dated 07.03.2024 to the extent of revising the policy conditions i.e. 06(b)(iii) import of RPC by calciners and the said revised policy is not in consonance to the CAQM order dated 15.02.2024 passed in pursuance to the Hon ble Supreme Court order in M.C. Mehta and the Minutes of the Meeting held on 27.03.2024, which is again in consonance to interpretation of policy under Chapter-II of General Provisions Regarding Imports and Exports of Foreign Trade Policy, 2023. In the light of the orders passed by the CAQM dated 15.02.2024, pursuant to the order dated 10.10.2023 passed by the Hon ble Supreme Court in the case of M.C. Mehta in W.P. (Civil) No.13029 of 1985 and the Minutes of the Meeting held on 27.03.2024 the Deficiency Letter dated 15.02.2024 is contrary to the CAQM Order and the DGFT Notification which implements the CAQM Order. The petitioner has efficacious remedy of review under Section 16 of the Foreign Trade (Development and Regulation Act), 1992. The impugned rejection letter dated 05.02.2025 bearing File No.09AX04000927AM25 and the Deficiency Letter dated 15.01.2024 bearing File No.09AX04000927AM25 are hereby set aside and the matter is remitted to the respondents authority for fresh consideration with respect to the petitioner s case to the extent of granting entitlement to advance authorisation under Foreign Trade Policy, 2023. The DGFT shall give personal hearing for petitioners grievance. Conclusion - The rejection letter dated 05.02.2025 is not a reasoned order as it fails to consider the explanation given by the Petitioners and the express provisions of the Commission for Air Quality Management (CAQM) Order dated 15.02.2024 which permits deemed exports to SEZ units. The Petitioners are entitled to a fresh consideration of their application for Advance Authorisation with a personal hearing, and pending such consideration, they are permitted to supply CPC to the Vedanta SEZ unit. Petition disposed off.

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• Corporate Laws

• 2025 (5) TMI 943
  Non compliance of section 143 of the Companies Act - violation of Accounting Standard resulting - name of transacting related party and description of relationship between the parties is not mentioned in Annual / Audit Report - partner or partners of the audit firm has or have acted in fraudulent manner or abetted or colluded in any fraud by or in relation to or by the company or its directions or officers - HELD THAT:- According to prosecution not naming relationship between relative attracts offence. Noticably, definition of relative is given in Accounting Standard 18. It defines related party and related party transaction as above. When degree of relative is specifically defined in clause 10.9, in column of relative, there is no requirement of mentioning degree of relative separately or to say relationship of Priyavratra Mafatlal individual having significant influence separately. Thus, prosecution against petitioner is found to be malicious and deserves to be quashed. While examining the questioned complaint in light of aforesaid law, this Court is of the opinion that petitioner who has been joined in individual capacity without joining M/s. Deloitte Haskins as accused, is not needed to be send for facing trial. Thus, the petitions are allowed. The Criminal Complaint dated 14.02.2018 bearing Criminal Enquiry No.147 of 2018 in Criminal Case No.25079 of 2018 and Criminal Complaint dated 14.02.2018 bearing Criminal Enquiry No.162 of 2018 in Criminal Case No.25087 of 2018 pending before the learned Additional Chief Metropolitan Magistrate, Ahmedabad as well as all consequential proceedings initiated in pursuance thereof are hereby quashed and set aside qua the applicant. Direct service is permitted.

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• 2025 (5) TMI 942
  Oppression and mismanagement - Entitlement to an investigation under Section 213 of the Companies Act, 2013 into the affairs of the Respondent No. 1 Company based on alleged fraudulent, oppressive, or unlawful conduct - HELD THAT:- Section 213 of the Companies Act, 2013 empowers this Tribunal to order an investigation into the affairs of the company if, inter-alia, the business of the company is being conducted with intent to defraud its creditors, members or any other person or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive to any of its members or that the company was formed for any fraudulent or unlawful purpose. Remuneration and its accounting in the books - HELD THAT:- This issue has been disputed by the Respondent No. 8 by placing on record a bank certificate evidencing payment of Rs. 1,42,70,000/- to the Petitioner in his Bank Account No. 520101257897859 with Corporate Bank, Pune during February 2019 to April 2019. This revelation is contrary to the assertion of the Petitioner in his petition that the Petitioner has never received the said amounts, classified by the Respondent No 1 Company as the Petitioner s remuneration as a Director, which fact is evident from the Bank Statements of the Petitioner s bank account . The remaining amount out of Rs. 1,80,00,000/- is stated to be payable in the books of the Respondent No. 1 Company, accordingly, no case of fudging the books is made out in this regard. It is relevant to note here that none of the Respondents other than Respondent No. 1 Company holds share in Dishti Vishal Private Limited, and any benefit flown to such company indirectly accrues to the Respondent No. 1 Company in terms of accretion to its share value. Unathorised buy-back of shares was completed by the Respondent No. 1 Company - HELD THAT:- It is relevant to note that such buy-back was carried out by the Respondent No. 1 Company at face value, while the intrinsic value of its shares was much higher than the face value. Accordingly, the buy-back had resulted into reduction of outstanding shares, but the pro-rata share of outstanding shareholders in the reserves of the Respondent No. 1 Company had gone up resulting into increase in the intrinsic value thereof. Accordingly, such buy-back cannot be said to be an act of oppression prejudicial to the interest of its members (remaining) or of the Respondent No. 1 Company. Allegation of personal benefits taken by Respondents is in relation to usage of a car owned by Respondent No. 1 Company by the ex- wife of the Respondent No. 2 and mother of Petitioner and provision of a corporate credit card for her expenses - HELD THAT:- The Respondent No. 2 has clarified that she is employed with the Respondent No. 1 Company in marketing department and said car and credit card has been allotted to her in course of her employment. It is customary to grant perquisites/benefits to the employees by an employer and no adverse inference can be drawn from it - the allegation is arising as the Petitioner has not been granted similar benefits. It is relevant to note that the Petitioner is not in employment of the Respondent No. 1 Company, hence cannot be allowed such benefits. Irregular appointment of Respondent No. 4,5, and 6 as additional directors of the Respondent No. 1 Company on 02.03.2015 and thereafter non-confirmation of their appointment in the AGM - HELD THAT:- It is relevant to note that the Petitioner was a Director when the AGM is claimed to have been held on 30.09.2015 and has also signed the Financial Statement for the FY 2014-15 laid before the AGM for the shareholder s approval. Accordingly, the Petitioner cannot raise this issue in this Petition after a lapse of about 8 years and the said contention is ex facie barred by limitation. Proceeds of Key Man Insurance Policy in the name of the Petitioner purchased by the Respondent No. 1 Company - HELD THAT:- The Respondent No.1 Company has clarified that the benefits of the policy are already being credited to the personal accounts of the Petitioner maintained with the Respondent No. 1 Company till 2021, and from 2022, the receipts of insurance policies are directly being credited to the savings account of the Petitioner by the Insurance Company - The mere non-payment of the money lying to the credit of the Petitioners in the books of the Respondent No. 1 Company cannot be held to be an act of oppression and the Petitioner has remedies available under the civil law in relation to recovery of those amounts. Benami property creation - Respondent No. 1 Company s funds were paid to Dishti Vishal Private Limited as advances, which were in turn utilised by Dishti Vishal Private Limited for funding the purchase of large land parcels in the name of Mr. Suryakant Shantaram Dhamne, who was working as a land labourer in the farm and later on appointed as a director of Dishti Vishal Private Limited - HELD THAT:- The allegation that money given in advances by the Respondent No. 1 Company to Dishti Vishal Private Limited has been utilised for the funding of acquisition of land in the name of Mr. Suryakant Shantaram Dhamne is not corroborated from the facts placed on record. Hence, there are no substance in the unfounded allegation of the Respondent No. 1 Company entering into benami transactions. It is settled law that the shareholders cannot claim the dividend payment as a matter of right and the declaration of dividend is within the powers of the management of the company. Accordingly, non- payment of dividend to shareholders does not constitute an act of oppression. Conclusion - The Petitioner has failed to make out a case of oppression as alleged in the Petition. Petition dismissed.

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• Insolvency & Bankruptcy

• 2025 (5) TMI 941
  Admission of application under Section 7 of IBC - financial debt due from the Corporate Debtor to initiate proceedings under Section 7 or not - HELD THAT:- It is noted that there has been financial arrangement among the Respondent No. 1 and the Appellants along with other borrowers like Prateek Sancheti and the Corporate Debtor who were all classified as borrowers. It is noted that total Rs. 5.85 Crores loans were sanctioned through three loan agreements of Rs. 1.5 Crores dated 19.04.2021 Rs. 1.5 Crores dated 19.04.2021 and Rs. 2.85 Crores dated 15.04.2021. The disbursement of money is not a disputed fact and is taken as such. It is also noted that various properties were mortgaged in favour of the Financial Creditors. It is clear that at all places in the loan agreements, the Appellants have been categorically stated to be borrowers and have signed accordingly. It is also noted that for Sancheti Buildtech Pvt. Ltd./ Corporate Debtor, the Director has signed the agreement and similarly, for M/s Sancheti s Traders it has been signed by partner. It is also noted that this was the standard loan agreement used by the Respondent No. 1 and the printed term the guarantor was struck off as there was no guarantors. Thus, the contention of the Appellants that they were guarantors and not borrowers cannot be accepted. It is observed that all the three loan agreements contained the similar clauses and categorically states that the Appellants and the Corporate Debtor as borrowers and not a guarantors. Thus, the argument of the Appellants on this account stands rejected. As regards, the allegation that the Appellants they were being in financial distress and were lured by the Respondent No. 1 to take excess loan of Rs. 5.85 Crores rather than the requirements of Rs. 4.25 Crores. We do not find any merit in such allegations of the Appellants without any substance. It is illogical to accept that for such substantial loan, the borrowers (Sancheti s Family) and the Corporate Debtor will sign under alleged force of the Respondent No. 1 - It is already noted the allegation that Rs. 1.60 Crores was transferred by the Sancheti s family members in the accounts of Mr. Rounak Ranka and also noted the statement of the Respondents that this money was transferred in the name of Scribbling Shipping Pvt. Ltd. which has nothing to do with the case. Conclusion - The Adjudicating Authority has examined all the facts and the law and came to correct conclusion of passing the necessary order to initiate Corporate Insolvency Resolution Process against the Corporate Debtor. Appeal dismissed.

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• 2025 (5) TMI 940
  Rejection of Resolution plan - liquidation of Corporate Debtor - non-consideration of addendums submitted by the appellant to improve the financial proposal - HELD THAT:- The CoC under Section 33(2) of IBC has a power to take a decision with not less than 66% of the voting share to liquidate the CD. Of course the decision taken by the CoC to liquidate is amenable to judicial review but only on the limited ground that the decision of the CoC is arbitrary. Present is not a case where it can be said that the decision of the CoC to liquidate is arbitrary, the CoC after considering all aspects of the matter has passed a resolution for liquidation of the CD in which we do not find any error warranting any interference. As far as the direction by the adjudicating authority to consider the addendum submitted by appellant in February, 2024. The Central Bank has already filed an application stating that the said proposal cannot be accepted which application has also been allowed by the adjudicating authority which order has become final - The second proviso on which the liquidator relies is a provision where CoC while taking a resolution has recommended to explore a proposal for compromise or arrangement. It is for liquidator to file proposal within 30 days of the order of liquidation. The present is not a case where there is any recommendation under Regulation 39-BA of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The second proviso of Regulation cannot control the provision of Section 2B (1) which is a provision giving a opportunity for submitting a compromise or arrangement under Section 230 of the Companies Act, 2013 - the appellant is fully entitled to submit a scheme compromise or arrangement under Regulation 2 B. Conclusion - The appellant is fully entitled to submit a scheme compromise or arrangement under Regulation 2 B. The appeals challenging the liquidation order dismissed but liberty granted to the appellant to submit a compromise or arrangement scheme under Regulation 2B by 20.05.2025.

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• Service Tax

• 2025 (5) TMI 939
  Rejection of the declarations made by the petitioner in Form SVLDRS-1 filed by the petitioner under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - scope of Appellate Forum as per Section 121 (f) of the SVLDRS - HELD THAT:- The respondent-Designated Committee is formed under the Rule-5 of the Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDRS) Rules, 2019 for short (for short the Rules ) under consist of Principal Commissioner or Commissioner of Central Excise and Service Tax as the case may be and the Additional Commissioner or the joint Commissioner of the Central Excise and Service Tax as the case may be and as per the proviso, there shall be only one such Designated Committee in Commissioner of Central Excise and Service Tax. Therefore, the application filed on-line by the petitioner is required to be considered by the respondent No. 3-Designated Committee as per Rule 5 of the Rules. The SVLDRS is part of the Finance (No. 2) Act, 2019 with an object to reduce the litigation of all other Acts which were subsumed under the GST Act and as per the provisions of Section 122 of the Finance (No. 2) Act, 2019, all the Indirect Tax Enactments are covered for application of the Scheme which included the Act, 1963 also. SVLDRS being a Scheme framed by the Central Government in the Finance Act, the object of the Scheme is to reduce the litigation in view of the coming into force of the GST Act with effect from 01.07.2017 as such litigation was pertaining to the various Indirect Tax Enactments and by this SVLDRS, the tax payers were granted the relief as per the provisions of Section 124 and the petitioner was entitled to the benefit under the Scheme regarding the Cess levied under the Act, 1963 as the Scheme was made applicable to the said Act. Therefore, merely because the Appeal filed by the petitioner before the Appellate Tribunal under the said Act was not covered by the definition of Appellate Forum under Section 121 (f) of the Finance Act, the petitioner cannot be deprived of the benefits of the SVLDRS and the petitioner therefore, is entitled to the benefit of the SVLDRS by application of Section 123 (b) of the Finance Act which provides for tax dues regarding the show-cause notice issued under the Indirect Tax Enactment prior to 30th June, 2019. The respondent-Designated Committee is directed to consider the application filed by the petitioner in Form SVLDRS-1 considering the same under clause (b) of Section 123 of the SVLDRS for computation of tax dues to grant the relief under Section 124 (1) (a) of the SVLDRS for tax dues relating to the show-cause notice and thereafter, grant four weeks time to pay the tax as computed by the petitioner as per Form SVLDRS-1 and on payment of such tax, issue the Form SVLDRS-4 forthwith. Conclusion - The petitioner is entitled to the benefit under the Scheme regarding the Cess levied under the Act, 1963 as the Scheme was made applicable to the said Act. Therefore, merely because the Appeal filed by the petitioner before the Appellate Tribunal under the said Act is not covered by the definition of Appellate Forum under Section 121 (f) of the Finance Act, the petitioner cannot be deprived of the benefits of the SVLDRS and the petitioner therefore, is entitled to the benefit of the SVLDRS by application of Section 123 (b) of the Finance Act which provides for tax dues regarding the show-cause notice issued under the Indirect Tax Enactment prior to 30th June, 2019. Petition allowed.

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• 2025 (5) TMI 938
  Rectification of mistake under Section 86(6A) of the Finance Act, 1994 - Error apparent on the face of record or not - impugned order has failed to consider that the show cause notice had been issued beyond the normal period and was time barred - HELD THAT:- In the instant case, it is seen that the show cause notice was issued on 19.06.2014 invoking the extending period demanding service tax for the period 1.4.2012 to 31.03.2013. As per the proviso to section 73(1), the demand can be raised for a period of five years from the relevant date. The demand in the instant case was for the period 1.4.2012 to 31.03.2013 raised vide show cause notice dated 19.06.2014. Vide the impugned final order, the demand has been upheld for the normal period. There is no error apparent on record. Consequently, the instant application stands dismissed.

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• 2025 (5) TMI 937
  Time limitation - initiation of limitation before Commissioner (Appeals) and also up to which period it can be extended - HELD THAT:- The decision quoted by the Authorized Representative of the Tribunal and also that of the Hon ble Andhra Pradesh High Court is in CHERISH INDIA EXPORTS VERSUS THE ASSISTANT COMMISSIONER OF STATE TAX AND OTHERS [ 2025 (1) TMI 1303 - ANDHRA PRADESH HIGH COURT] is in relation to refund an limitation of the same which deals with date of filing . The same are not relevant for the purpose in hand. Since this Court is concerned with point of limitation and the expression used in the relevant section is presented . This Court finds the decision of the Hon ble High Court of Bombay though in writ petition meets the issue. Interpretation of law done by the Hon ble Bombay High Court is equally applicable in this case. Therefore, appeals are remitted back to the Commissioner (Appeals) to be considered on merits. The appeals are allowed by way of remand.

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• Central Excise

• 2025 (5) TMI 936
  Maintainability of appeal - appropriate forum - Rejection of the applications filed by the appellant (M/s. Zydus Healthcare Limited) for special rate fixation on the ground that they have foregone such option is legally not tenable - HELD THAT:- A bare perusal of section 35G (1) of the Central Excise Act, 1944 clearly reveals that no appeal shall lie before the High Court from any order passed by the learned Tribunal (on or after the 1st day of July, 2003) if it is an order which relates among other things to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment. Since the matter relates to valuation, this High Court has no jurisdiction to entertain or try or determine the issue as sought to be raised by the Commissioner of Central Goods and Service Tax and Central Excise, Siliguri. Liberty granted to the appellant to approach the Hon ble Supreme Court of India for redressal of their grievances, if any, in accordance with law.

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• CST, VAT & Sales Tax

• 2025 (5) TMI 935
  Eligibility for concessional rate of 2% - necessary C-Forms and F-forms have not been filed - goods would fall under entry 60 of the IVth Schedule, to the A.P.VAT Act, attracting tax at the rate of 5% or to be treated as unspecified goods under Schedule-V, which would be amenable to tax at the rate of 14.5%? - HELD THAT:- Weight lifting equipment, is connected to the sport of weight lifting and would therefore qualify to be treated as sports goods, even according to the interpretation placed by the 5th respondent that only goods which are directly associated with a sport can be treated as sports goods. The other goods, such as treadmill, dumbbells, rotators and fit-kit exercise kit cannot be associated with any one specific sport. However, the fact remains that every sports person has to maintain physical fitness and the goods mentioned are used for maintaining such physical fitness. In such circumstances, the goods mentioned above would also answer the description of sports goods as these goods are needed by sports persons to maintain themselves physically and to achieve the necessary physical fitness to participate in any physical sport. Conclusion - The petitioner s goods qualify as sports goods under Entry-60 of Schedule-IV, attracting a concessional tax rate, and the assessment orders denying this classification are set aside with directions for fresh assessment accordingly. The matters are remanded back to the Assessing Officer for passing fresh orders, after treating the goods in question, as goods falling within Entry-60 of Schedule-IV to the A.P. VAT Act - Petition allowed by way of remand.

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• Indian Laws

• 2025 (5) TMI 934
  Jurisdiction and scope of Section 482 CrPC - Release of the money withheld by the Bombay Stock Exchange ( BSE ) as payout for sale of shares - FIR registered under Section 420, 120B of the Indian Penal Code - Appellant received a phone call by a person impersonating himself as their client - investigation revealed that around 72000 shares (worth Rs. 15.90 lakhs) were sold by respondent no. 2. The charge sheet was filed against one Amit Jain, who is said to have made the alleged phone call. HELD THAT:- It is our considered opinion that the High Court has travelled beyond its inherent jurisdiction under Section 482 CrPC, by allowing the petition filed by respondent. The High Court ought not to have made any observations regarding the absence of any role played by respondent no. 2 in the whole transaction because investigation is yet to be completed. The charge sheet itself states that the main accused (Amit Jain) is absconding and the role of respondent no. 2 can only be ascertained once the main accused is arrested. Considering the same, we are of the opinion that the release of the sale value of the concerned shares in favour of respondent no. 2, may cause an irreparable loss to the appellant and vitiate the entire investigation. Moreover, in the present case it is pertinent to note that respondent no. 2 was the main beneficiary of the alleged fraudulent transaction. As has been stated above, the chargesheet in the present case mentions that the role of respondent no. 2 cannot be ruled out. The role of respondent no. 2 has yet to be ascertained and a clear picture would emerge only after the investigation. It is therefore premature to give a clear chit to respondent no. 2 and hold that he is entitled to the sale value of the shares sold by him, especially when the market value is negligible. When the investigation is still underway, releasing the sale value of the shares will frustrate the investigation. Both the Magistrate Court as well as the Revisional Court, have rightly held that the funds in question cannot be released at this stage. The High Court should not have disturbed these findings. Thus, in our opinion, the order dated 25.02.2025, passed by the High Court deserves to be set aside. We make it clear that we make no observations on the merits of the case. The Trial Court is directed to proceed with the trial expeditiously. The appeal is accordingly allowed and the impugned order dated 25.02.2025 is set aside. The sale value of the shares sold by respondent no. 2 (amounting to Rs. 15.90 lakhs) shall be kept with the BSE during the pendency of the trial, meanwhile.

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• 2025 (5) TMI 933
  Cancellation of allotment of the apartment - determination of the amount due and payable by the parties - consequences of non-compliance with procedural directions - complaint filled before the National Consumer Disputes Redressal Commission ( NCDRC) - stay granted by the NCDRC, during the execution proceedings - application for modification rejected - HELD THAT:- This Court, by order dated 20.03.2018, was of the view that the application for modification ought to have been allowed by the NCDRC as no contempt petition had been filed and, accordingly, allowed the appeal and set aside the impugned order. This Court further directed that whatever amount was payable for the original apartment, the same would be payable for the alternate apartment offered, and consequently, stipulated a period of two weeks to execute the agreement between the parties within two weeks as directed by the NCDRC in accordance with the Maharashtra Ownership of Flats Act, 1963 MOFA . Having considered the submissions, the following facts govern the quantification of amount which we are crystallising in order to put a quietus to this matter : (i). The appellant has not provided the relevant documents asked by the respondent relating to the building map, carpet area, relevant NOCs right from the beginning. Neither in any of the communications to the respondent nor in the submissions before us, the appellant has ever stated that it actually provided the documents required by the respondent. (ii). The appellant, being well aware of the stay order dated 19.11.2013 passed by the NCDRC restraining it from creating any third-party rights, in gross violation of the same, proceeded to alienate the original allotted apartment no. 6403 on 24.11.2014 during the pendency of the proceedings before the NCDRC. This alienation has created further complication in the proceedings and has also caused considerable delay in the matter preventing it from attaining finality. (iii). Even after the orders passed by this Court, the appellant has not come forward with the specific carpet area of the original allotted apartment and the alternate offered apartment i.e. 6403 and 6503. (iv). The respondent undoubtedly could not enjoy the possession of the apartment but the fact also remains that the balance consideration of Rs. 3,72,35,401/- remained with the respondent. Simultaneously, we cannot lose sight of the fact that during this period, the appellant has been maintaining the said apartment and paying the essential charges to respective bodies/ associations. As such, there needs to be some adjustment of equities between the parties. In the peculiar facts and circumstances of the case, we direct that the respondent shall pay the following amounts: i) Admitted amount of Rs. 2,15,884/- ii) Amount that the respondent is ready to pay on the direction of the Court Rs. 15,37,126/- iii) Taxes on consideration value Rs. 23,17,990/- iv) Amount of Rs. 1 crore over and above the abovementioned amounts. We make it clear that whatever charges and dues may accrue with respect to the use and occupation of the apartment post the handover of possession, the respondent would be liable to pay such amounts in addition to the above-decided amount. The parties are further directed to get the agreement to sale/sale deed executed within two months after the aforesaid payment is made. The expenses for the stamp duty, registration etc. would be borne by the respondent in accordance with law. The restriction imposed, vide order dated 10.12.2024, regarding structural changes stands discharged. The Miscellaneous Application No. 2426 of 2018 stands disposed of accordingly.

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• 2025 (5) TMI 932
  Right to recall a witness for the purpose of examining, cross-examining, or re-examining the witness under Order 18 Rule 17 of the Civil Procedure Code (CPC) - inherent jurisdiction under Section 151 C.P.C. - Section 165 of the Evidence Act - HELD THAT:- It is true that the power can be exercised by the Court at its own initiative and may even be so done at the instance of a party. Section 165 of the Evidence Act provides that a Judge may in order to discover or obtain proper proof of relevant facts, ask any question he pleases in any form at any time of any witness about any fact relevant. The section further provides that the parties shall not be entitled to make any objection to any such question, nor crossexamine any witness upon any answer given in reply to any such question without the leave of the Court. If the provisions of Order 18 Rule 17 are read along with the provisions of Section 165 of the Evidence Act it is clear that the power to recall and re-examine a witness is exclusively that of the court trying the suit. The parties to the suit cannot take any objection to the question asked nor can they be permitted to cross-examine any witness without the leave of the court. The said rule, in our opinion, makes it abundantly clear that the right to put questions to the witness recalled under Rule 17 is given only to the court and even cross-examination is not ordinarily permitted on the answers given to such questions, without the leave of the court. Under that rule therefore, a witness cannot be recalled at the instance of a party for the purpose of examining, cross examining or re-examining, and that rule is not intended to serve such purpose, and the purpose for which that rule can be invoked is the one that is indicated above. We are of the opinion that if circumstances warrant, an opportunity to a party to re-call a witness for examining, cross examining or re-examining can be granted by a Court in the exercise of its inherent jurisdiction under Section 151 C.P.C. In view of the position of law as explained aforesaid, the Special Leave Petitions stand dismissed.

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• 2025 (5) TMI 931
  Dishonor of cheque due to insufficiency of funds - Offence punishable under Section 138 of the Negotiable Instruments Act, 1881 - cheque-in-question to discharge the liability against a loan taken from the complainant which was used by the accused-respondent to cover the expenses towards his medical treatment - accused acknowledge his signatures on the cheque-in-question - HELD THAT:-The complainant also deposed that he had paid the amounts in question, by providing two cheques, to the accused-respondent and his wife upon their request. The first cheque was for a sum of Rs.1,00,000/- and the other was for a sum of Rs.4,00,000/-. The complainant further asserted that he had advanced a total of Rs.15,00,000/-to the accused-respondent, and towards repayment of this loan, the cheque-in-question was handed over by the accused respondent to the complainant. Thus, the complainant led unimpeachable evidence to establish that the loan amount to the tune of Rs. 15,00,000/- was advanced to the accused-respondent through valid sources and was not merely a money lending transaction as recorded by the High Court. We may note that when the accused-respondent stepped into the witness box and examined himself in defence, he consciously avoided to explain the complainant s version that a part of the amount was paid to him and his wife by the complainant through cheques. The consolidated effect of the following facts, such as : - i. The amounts in question were paid by the complainant to the accused-respondent through valid sources; ii. The cheque-in-question bears the signatures and the handwriting of the accused-respondent; iii. The cheque-in-question was dishonoured upon its presentation with the return memo stating insufficient funds; and iv. The notice issued to the accused-respondent under Section 138 of the NI Act remaining unanswered. Clearly give rise to the presumption under Section 118 read with Section 139 of the NI Act, which the accused-respondent has miserably failed to rebut. The trial Court and the appellate Court provided exhaustive reasoning while convicting and affirming the conviction of the accused-respondent for the offence punishable under Section 138 of the NI Act. However, the High Court took a divergent view holding that the complainant has omitted to adduce sufficient evidence as regards his money lending business and this omission on his part was sufficient to discharge the burden cast upon the accused-respondent. However, we fail to see any rationale behind this reasoning. In the impugned judgment, the High Court proceeded to minutely reappreciate the evidence and has substituted the concurrent findings of fact recorded by the Courts below by its own factual findings without any valid basis and by disregarding the positive evidence available on record, which clearly established that the complainant had paid the amount in question to the accused-respondent through valid sources, with a substantial part of the payment being made by cheques. Thus, we are of the opinion that the judgment rendered by the High Court is based on conjectures and surmises, and the findings recorded therein are perverse on the face of record. Hence, the same cannot be sustained. Consequently, the impugned judgment dated 3rd September, 2021 is hereby set aside, and as a result, the judgments rendered by the trial Court dated 15th November, 2016 and the appellate Court dated 1st August, 2017 are hereby restored. The accused-respondent is sentenced to: - i. A fine of Rs. 16,00,000/- and in the event of default in payment, the accused-respondent shall undergo nine months simple imprisonment. ii. The fine, upon being deposited, shall be paid to the appellants being the legal heirs of the original complainant. iii. The accused-respondent is granted three months time to pay the amount of fine, failing which, he shall be taken into custody to serve the default sentence. Resultantly, the appeal is allowed in these terms.

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• 2025 (5) TMI 930
  Dishonour of cheque - Application under Section 482 of the Cr.P.C. - presumption made under Section 139 of the N.I. Act - legality of summoning order under Section 138 of the Negotiable Instruments Act (N.I. Act) against the proprietor of a sole proprietorship firm - provisions contained under Section 141 of the N.I. Act - Not legally enforceable debt or liability - cheques issued as an advance and with regard to the misutilisation of the said cheque and playing fraud - HELD THAT:- Apparently, two cheques dated 12.03.2024 for an amount of Rs. 16,24,000/- and Rs. 6,01,800 stood drawn by the applicant which lastly on presentation in the Bank on 22.03.2024 stood disordered on 25.03.2024, which was followed by a statutory demand notice on 8.04.2024, which is stated to have been served upon the applicant on 12.04.2024 and a reply whereof was submitted by the applicant to the said statutory demand notice on 22.04.2024 and the complaint was lodged on 7.05.2024. Thus, it becomes evidently clear that there has been procedured compliance of the provisions contained under Section 138 read with Section 142 of the N.I. Act. So far as the argument so sought to be raised by the applicant that the firm has not been summoned, thus the proceedings are bound to fail is concerned, the same is not convincible, particularly in view of the fact that the firm M/s Mark Engineering as per the description given in the complaint and the present complaint is a proprietorship firm. There is a vast difference between proprietorship and partnership, a partnership is an association of more than one person, however, sole proprietorship comprises only one person. Section 141 of the N.I. Act provides for offences by the companies and explanation (a) implies company which means any body corporate and includes a firm or other association of individuals and explanation (b), director in relation to the firm means of partnership in the firm. Importantly, the firm in question is a sole proprietorship firm, thus, the concept of partnership firm and a company would not apply. However, this Court is not required to test the said submissions while adjudicating on the same particularly at a summoning stage. What is relevant is the statutory presumption so made under Section 139 of the N.I. Act which is in the favour of the holder of the cheque. Nonetheless this Court is also not required to go into the aspect of the matter as to whether the cheque which has been dishonoured was any way linked or related to the contract or not which was terminated by the NHAI. This Court at the stage of summoning is not required to delve into the terms of the contract and also quantum of payment made or not and the impact of the cancellation of the contract as it would be at best in a defence or a matter of trial. Accordingly, no case is made out. The application stands rejected .

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• 2025 (5) TMI 929
  Dishonour of cheque - Validity of issuance of pre-cognizance notice and non-bailable warrant of arrest - powers to a Judicial Magistrate to take cognizance of an offence punishable under Section 138 - Scope and applicability of Non obstante clause of Section 142 of the Act - HELD THAT:- In view of the Section 142 of the Act, every offence punishable under the Act shall be compoundable notwithstanding anything contained in the BNSS. The proviso to Section 147 of the Act provides for extension of time in filing the complaint beyond the period upon satisfaction of the Court by the complainant that he had sufficient cause for not making the complaint within the prescribed period. The maintainability of a complaint under Section 138 of the Act is to be addressed by a competent Court in the light of the relevant provisions of the said Section and of the Section 142 of the Act. A Magistrate hearing a complaint under Section 138 of the Act, may under some circumstances, need to have recourse to any applicable provisions of Chapter (xxi) of the BNSS relating to the trial of summons cases by the Magistrates, for example, Sections 279 280 of the Sanhita regarding non-appearance or death of a complainant and withdrawal of the complaint, which is not barred. Section 223 BNSS provides for issuance of pre-cognizance notice to the accused and said provision was not available in the corresponding Section 200 of the repealed Code. Such requirement provided under Section 223 of the BNSS by way of proviso appear to be justice orientated as the same takes care of any legitimate defence of the accused to be appreciated by the Magistrate even at an earliest, while holding a preliminary inquiry and is not barred at all even in respect of complaints under N.I.Act as hereinabove discussed. However, the non-observance of the requirements, provided under Section 223 BNSS, regarding the examination on oath of the complainant/witnesses and the issuance of the pre-cognizance notice shall not render the proceedings invalid. The satisfaction of the competent Court, as regards the maintainability of the complaint, in terms of the accrual of cause of action, is covered under the inquiry phase, preceding the taking of cognizance . A Magistrate while entertaining a complaint under Section 138 of the Negotiable Instruments Act is not barred to have the observance of the provisions providing for pre-cognizance notice. So far as the case in hand is concerned, the learned Magistrate upon satisfying himself regarding to record the service of pre-cognizance notice could have inferred, the forfeiture of the right of hearing by the accused at pre-cognizance stage of the complaint and proceeded ahead on the complaint in accordance with law. There was no need for the Magistrate to compel the appearance of the accused by issuance of a subsequent nonbailable warrant as the pre-cognizance hearing was meant for him which he acquiesced. The Magistrate is within its powers to compel the attendance of the accused after taking cognizance on the complaint and even under such circumstances, the normal approach of the Magistrates should be issuance of summon followed by a bailable warrant if needed and the issuance of the non-bailable warrants should be the last option. Accordingly, the instant petition is disposed of by setting aside the impugned order dated 15.04.2025 regarding issuance of non-bailable warrant of arrest, however, with the direction to the petitioner/accused to appear before the trial Magistrate on the date of hearing that falls next after the uploading of this order, for his participation in the proceedings. It is needless to mention that if the Magistrate is yet to take cognizance on the complaint, the accused is still entitled to pre-cognizance hearing. The complaints under Sections 138 and 141 of the Negotiable Instruments Act need to be treated as priority sector litigation and tried expeditiously as per the mandate of the Act. The competent jurisdictional Courts are expected to make every endeavor that the cheque bounce cases are disposed of expeditiously in furtherance of which object, Alternate Dispute Resolution Mechanism provided under the Legal Services Authorities Act needs to be tried for such cases through the modes of Lok Adalat and Mediation etc, however, without any element of unnecessary delay on that pretext.

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• 2025 (5) TMI 928
  Dishonour of cheque with an endorsement of insufficient funds - Commission of an offence punishable under Section 138 of the Negotiable Instruments (NI) Act - failed to pay the amount despite the receipt of a valid notice of demand - misread and misappreciated the evidence and the statement of the accused recorded under Section 313 of Cr.P.C - cheque issued to M/S Chachoga Handloom Society and not to the bank - HELD THAT:- The learned Courts below erred in holding the accused liable for the commission of an offence punishable under Section 138 of the NI Act and sentencing him to undergo simple imprisonment for six months and to pay of Rs. 1.50 lacs, compensation. Hence, the judgments and order passed by the learned Court below are not sustainable. In view of the binding precedents of the Hon ble Supreme Court, the prosecution of the Society is necessary before the accused can be held vicariously liable. Since Society has not been arrayed as the accused, therefore, the accused cannot be held vicariously liable. Thus, the learned Courts below erred in holding the accused liable for the commission of an offence punishable under Section 138 of the NI Act and sentencing him to undergo simple imprisonment for six months and to pay of Rs. 1.50 lacs, compensation. Hence, the judgments and order passed by the learned Court below are not sustainable. Consequently, the present petition is allowed and the petitioner/accused is acquitted of the commission of an offence punishable under Section 138 of the N I Act. The fine amount, if deposited by the accused, be refunded to him after the expiry of the statutory period of limitation in case no appeal is preferred, and in case of appeal, the same be dealt with as per orders of the Hon ble Apex Court. In view of the provisions of Section 437-A of the Code of Criminal Procedure [Section 481 of Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS)], the petitioner/accused is directed to furnish his personal bond in the sum of Rs.25,000/- with one surety in the like amount to the satisfaction of the learned Registrar (Judicial) of this Court/learned Trial Court, within four weeks, which shall be effective for six months with stipulation that in the event of Special Leave Petition being filed against this judgment, or on grant of the leave, the petitioner/accused, on receipt of notice(s) thereof, shall appear before the Hon ble Supreme Court.

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• 2025 (5) TMI 927
  Withholding of payment of contractual dues under the agreements executed for rural electrification works - MSME - determination of the quantum of admitted dues payable - HELD THAT:- Since the petitioner is an MSME, on the previous date learned counsel for the State was specifically asked to apprise the Court as to whether a Micro and Small Enterprises Facilitation Council has been constituted in the State of Tripura or not. Learned Advocate General informs that vide notification dated 13.07.2021, the Tripura Micro and Small Enterprises Facilitation Council has been constituted by the Department of Industries Commerce, Government of Tripura. It is submitted on behalf of the State and TSECL that petitioner may raise his disputed claim before the Facilitation Council. In view of the aforesaid categorical stand of the TSECL, learned senior counsel for the petitioner submits that the respondents-TSECL may be directed to make the payment of the admissible dues to the tune of Rs.7.88 crores (approximately) within the period of 45 days. He further submits that petitioner may be allowed liberty to raise rest of his claims which are disputed before the Facilitation Council. Thus, the stand taken on behalf of respondents-TSECL on instruction by learned Advocate General, the respondents-TSECL should make the payment of the admissible dues totaling Rs.7.88 crores to the petitioner against the works executed under the above four agreements within a period of 45(forty five) days from today. Petitioner is at liberty to raise rest of his claims before the Facilitation Council. The instant writ petition is disposed of in the aforesaid terms. Let it be made clear that this Court has not made any comments on the claim of the petitioner on merits.

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• 2025 (5) TMI 926
  Proceedings initiated under the provisions of the SARFAESI Act - extra ordinary jurisdiction - seeking direction to the bank to renew the overdraft facilities - proposal for One Time Settlement is pending - issuance of notice under Section 14 of the SARFAESI Act - HELD THAT:- Having heard the learned counsel appearing for the petitioners and the learned counsel appearing for the respondent bank, I am of the view that the petitioners cannot be granted the reliefs sought for in the writ petition. The first relief sought for is for a direction to the respondent bank to consider the proposal for One Time Settlement. A reading of the counter affidavit indicates that the proposal for One Time Settlement was considered and the One Time Settlement was also granted to the petitioners. However, the petitioners failed to remit the amounts within the time specified in the sanction issued by the bank. It is settled law that this Court cannot, in the exercise of jurisdiction under Article 226 of the Constitution of India, direct the bank to extend the time for payment under One Time Settlement even by imposing any additional condition [See State Bank of India V. Sham; 2024 (6) KLT 865]. The other relief sought for by the petitioners is for a direction to the bank to renew the overdraft facilities mentioned in prayer No.(ii). Learned counsel appearing for the petitioners states that the overdraft facilities mentioned in prayer No.(ii) of the writ petition have already been renewed. The third relief sought for by the petitioners is to quash Exhibit P6 notice issued by the Advocate Commissioner as the same effectively prevents the petitioners from seeking statutory remedies. The relief of quashing Exhibit P6 cannot be granted as it is settled that, on issuance of notice under Section 14 of the SARFAESI Act by the Advocate Commissioner, it is open to a borrower to approach the Debts Recovery Tribunal by filing a Securitization Application. Therefore, the contention of the petitioners that the issuance of Exhibit P6 notice by the Advocate Commissioner amounts to a negation of their right to avail statutory remedies also cannot be accepted. The writ petition fails and it is accordingly dismissed. I make it clear that the dismissal of this writ petition shall not prevent the petitioners from seeking statutory remedies, if so advised. Considering the fact that this writ petition has been pending before this Court from 19.01.2024 till today (02.04.2025), it is directed that, if the petitioners wish to avail any statutory remedies, the period from 19.01.2024 till today (02.04.2024) shall be excluded for the purposes of determining any period of limitation within which the petitioners had to avail statutory remedies.

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