TMI Tax Updates - e-Newsletter
May 21, 2025
Case Laws in this Newsletter:
GST
Income Tax
Benami Property
Customs
Service Tax
Central Excise
Indian Laws
Articles
By: Ishita Ramani
Summary: Private limited companies must prepare comprehensive financial statements for ROC filing, including balance sheet, profit and loss statement, cash flow statement, notes to accounts, and auditor's report. The process involves maintaining accurate financial records, recording year-end adjustments, preparing trial balance, drafting statements, obtaining audit verification, and securing director approval. Careful documentation and adherence to legal requirements are crucial to ensure accurate financial reporting and regulatory compliance.
By: Sunil Ahuja
Summary: A government clarification on Section 74 of the CGST Act, 2017 specifies that tax demands can only be raised when there is concrete evidence of fraud, willful misstatement, or suppression of facts by a taxpayer intending to evade tax. Without proving such elements, issuing demands under an extended period is incorrect. The instruction provides guidance for proper application of the legal provision, offering protection to taxpayers against arbitrary tax assessments.
By: DR.MARIAPPAN GOVINDARAJAN
Summary: The Micro, Small and Medium Enterprises Development Act (MSMED Act) provides a specialized dispute resolution mechanism for micro and small enterprises. The Act overrides the Arbitration and Conciliation Act, 1996, establishing a unique legal framework for resolving payment disputes. The Supreme Court consistently upheld the Act's primacy, emphasizing its special status in protecting MSMEs and providing a specific dispute resolution process through Facilitation Councils with jurisdiction to conduct conciliation and arbitration proceedings.
By: YAGAY andSUN
Summary: The article explains how the greenhouse effect contributes to global warming and climate change. Human activities like fossil fuel burning, deforestation, and industrial emissions have intensified atmospheric heat trapping. This leads to rising temperatures, extreme weather events, and significant global impacts on health, ecosystems, and economies. The text proposes comprehensive solutions involving renewable energy, sustainable practices, policy changes, and individual actions to mitigate climate change risks.
By: YAGAY andSUN
Summary: A comprehensive analysis of global warming reveals its primary causes as fossil fuel combustion, deforestation, industrial emissions, and unsustainable agricultural practices. The eight strategic approaches to mitigate climate change, including transitioning to renewable energy, improving efficiency, protecting forests, transforming transportation, modifying agricultural methods, reducing waste, implementing policy actions, and encouraging individual behavioral changes to decrease greenhouse gas emissions.
By: YAGAY andSUN
Summary: Eco-friendly homes offer a transformative approach to reducing carbon emissions in the construction sector. By utilizing energy-efficient technologies, sustainable materials, and water conservation methods, these homes can significantly decrease environmental impact. However, challenges such as high initial costs, potential greenwashing, and technological dependencies limit their widespread adoption. A holistic approach combining innovation, regulation, and inclusivity is crucial for achieving meaningful carbon neutrality in the built environment.
By: YAGAY andSUN
Summary: The 1.5^0C global warming threshold represents a critical limit for mitigating climate change impacts. At this temperature rise, the world will experience more extreme weather, sea level increases, ecosystem disruption, and agricultural challenges. Crossing this threshold risks triggering self-reinforcing environmental feedback loops, threatening biodiversity, human health, and social stability. The target aims to protect vulnerable populations and prevent irreversible planetary damage, making it a crucial benchmark for global environmental protection.
By: YAGAY andSUN
Summary: Global warming is a long-term increase in Earth's average surface temperature caused primarily by human activities that release greenhouse gases. These gases trap heat in the atmosphere, leading to significant environmental changes. Key causes include fossil fuel burning, deforestation, industrial processes, and agriculture. The effects are wide-ranging, including rising temperatures, melting ice caps, extreme weather events, ecosystem disruption, and potential health risks. Mitigation strategies involve reducing emissions, transitioning to renewable energy, protecting forests, and promoting international cooperation to address this global challenge.
By: YAGAY andSUN
Summary: The article examines the devastating environmental impact of human exploitation of the ocean floor through deep-sea mining, oil and gas extraction, and bottom trawling. These activities are destroying unique marine ecosystems, disrupting biodiversity, and threatening the survival of species that have evolved over millions of years. The text calls for sustainable solutions, including marine protected areas and international cooperation, to preserve these critical underwater habitats and protect both marine life and coastal communities.
News
Summary: Political opposition alleges market regulator's delayed investigation into offshore funds linked to a prominent corporate group. The party claims two Mauritius-based funds potentially violated shareholding regulations, suggesting potential financial misconduct. Despite regulatory warnings about penalties, the funds reportedly seek settlement without admitting wrongdoing. The opposition asserts the investigation has been prolonged, potentially benefiting the corporate group, and suggests potential exposure through international jurisdictions.
Summary: The Department of Economic Affairs amended Rule 8 of the Securities Contracts (Regulation) Rules, 1957, to provide regulatory clarity for brokers. Following a consultation paper and stakeholder feedback, the amendment aims to enhance ease of doing business in the financial sector. The modification addresses evolving market dynamics while maintaining transparency and supporting capital market development.
Summary: Regulatory body issued draft directions on investment by regulated entities in Alternative Investment Funds (AIFs). Proposed key measures include capping single entity's contribution to 10% of AIF corpus, with collective ceiling at 15%. Investments up to 5% allowed without restrictions. If downstream debt investment exists, entities must make 100% provisions. Draft open for public comments until June 8, 2025, with prospective applicability and potential strategic exemptions.
Summary: The Reserve Bank of India canceled the license of a Lucknow-based cooperative bank due to inadequate capital and poor earning prospects. The bank will cease operations effective immediately. Most depositors (98.69%) will receive up to Rs 5 lakh in insurance claims. The RBI determined the bank's continuation would harm depositor interests and public financial stability, prohibiting further banking activities.
Summary: The Supreme Court granted bail to a businessman in a money laundering case, rejecting the notion that an accused must spend a year in jail before bail. The court emphasized there is no mandatory rule for one-year custody, noting the maximum punishment is seven years and the trial is unlikely to start soon due to numerous witnesses. The accused was ordered to surrender his passport and be released within a week under specific conditions, despite prosecution arguments about potential trial interference.
Summary: A businessman under investigation for money laundering allegations filed corruption charges against an Enforcement Directorate officer in Kerala. Official sources claim these charges are an attempt to malign the agency and deflect attention from the ongoing probe. The businessman, previously summoned multiple times, has filed multiple legal petitions that were dismissed. The ED maintains its commitment to transparency and investigating the allegations.
Summary: Bangladesh is preparing to reduce import duties on over 100 goods to create favorable trade conditions with the United States. The interim government provisionally approved duty reductions in response to potential US tariffs. The proposed changes include zero duties on specific items like oil, gas, and military equipment. Simultaneously, the US has reportedly agreed to pursue a Free Trade Agreement, which could provide duty-free access for Bangladeshi exports, particularly in the readymade garments sector.
Summary: Fruit growers in Himachal Pradesh demanded a complete ban on apple imports from Turkiye due to its perceived support for Pakistan. The group argues that Turkiye's stance against India and its drone supply to Pakistan justifies halting imports, which currently average Rs 800-1,000 crore annually. They also called for increased import duties on apples from other countries and urged consumers to avoid Turkiye's produce.
Summary: The Department for Promotion of Industry and Internal Trade extended the implementation timeline for the Safety of Household, Commercial and Similar Electrical Appliances Quality Control Order. The revised order provides relaxations for small enterprises, exempts certain R&D imports, and allows clearance of legacy stock. Effective from March 2026, the order aims to enhance manufacturing standards, restrict substandard product imports, and support consumer safety while promoting domestic manufacturing capabilities.
Summary: A key mango irradiation facility in Mumbai experienced a brief data recording error that caused 12 mango consignments to be rejected by US authorities. Operations were normalized from May 10, with no impact on other approved facilities. India's mango exports to the US are growing, with a 130% increase in export value and continued expansion into global markets under strict agricultural export protocols.
Summary: The Taiwanese president addressed trade tensions with the United States, characterizing them as "frictions between friends" during a speech marking his first year in office. Despite 32% tariffs initially imposed, which were later reduced to 10%, he emphasized continued cooperation and willingness to negotiate. The president highlighted Taiwan's commitment to national defense, openness to dialogue with China, and strategies to attract foreign investment, particularly in semiconductor and technology sectors. He also supported increased economic exchanges with the US while navigating complex geopolitical challenges.
Summary: Tripura government instructed traders to comply with central government's port restrictions on imports from Bangladesh, specifically targeting readymade garments and processed food items. The restrictions were implemented in response to similar curbs placed by Bangladesh on Indian products. Traders expressed concerns about bilateral trade, while local business organizations supported the national interest. Immigration movement through Agartala Integrated Check Post has significantly decreased following recent political changes in Bangladesh.
Summary: The Income Tax department introduced ITR-U, allowing taxpayers to file updated returns within 4 years from the end of the assessment year. Additional tax rates vary based on filing timeline: 25% within 12 months, 50% within 24 months, 60% within 36 months, and 70% within 48 months. In the past 3 years, approximately 90 lakh returns were filed, generating Rs 8,500 crore in additional revenues.
Summary: GeM, India's national public procurement portal, celebrated its 8th incorporation day by highlighting transformative achievements. The platform has onboarded over 10 lakh MSEs, 1.3 lakh artisans, and 1.84 lakh women entrepreneurs. With a threefold user base increase, GeM offers 10,000 product categories and enables cost savings of nearly 10% in government procurement. The platform launched India's first generative AI chatbot and has been adopted across all states, emphasizing inclusive economic growth and digital governance.
Notifications
Companies Law
1.
G.S.R. 317(E) - dated
19-5-2025
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Co. Law
Companies (Accounts) Amendment Rules, 2025
Summary: The Companies (Accounts) Amendment Rules, 2025 modify the existing Companies (Accounts) Rules, 2014 by extending the filing deadline from March 31, 2025 to June 30, 2025. Issued by the Ministry of Corporate Affairs, the amendment is made under specific sections of the Companies Act, 2013, and takes effect upon publication in the Official Gazette.
GST - States
2.
08/2024-State Tax (Rate) - dated
14-5-2025
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Delhi SGST
Amendment in Notification No. 12/2017-State Tax (Rate) dated 30th June, 2017
Summary: The notification amends the Delhi Goods and Services Tax (GST) rate notification by inserting new entries and modifying existing ones. It introduces tax exemptions for services related to electricity metering, research and development, educational board affiliations, and skill development programs. The amendments apply to specific service categories under various headings, with a nil tax rate. The changes will take effect from October 10, 2024.
3.
11/2025-State Tax - dated
3-5-2025
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Himachal Pradesh SGST
Himachal Pradesh Goods and Services Tax (Second Amendment) Rules, 2025.
Summary: The Himachal Pradesh Goods and Services Tax (Second Amendment) Rules, 2025 modifies existing GST rules, specifically rule 164. The amendment clarifies refund restrictions and appeal procedures for tax demands spanning multiple periods. It provides guidance on handling tax-related notices or orders that include partial demands across different time periods, ensuring procedural clarity for taxpayers and administrative authorities.
4.
SO (E). 66 - dated
18-3-2025
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Jammu & Kashmir SGST
Amendment in Notification No. SRO-GST-4 Tax (Rate), dated the 8th of July, 2017
Summary: A government notification amends the Jammu and Kashmir Goods and Services Tax Act by inserting a new entry related to metal scrap taxation. The amendment applies to specific tariff codes and differentiates tax treatment between registered and unregistered persons. The changes are retroactively effective from October 10, 2024, as per the government's official notification.
5.
S.O. 67 - dated
18-3-2025
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Jammu & Kashmir SGST
Amendment in Notification GST-SRO-11 Tax (Rate), dated the 8th of July 2017
Summary: A government notification amends previous GST regulations concerning air transportation services. The amendment specifically addresses passenger transportation by helicopter on a seat-share basis, introducing a 2.5% tax rate with a condition that input tax credit cannot be claimed. The changes are retroactively effective from October 10, 2024, as part of the Jammu and Kashmir Goods and Services Tax Act.
6.
S.O (E). 69 - dated
18-3-2025
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Jammu & Kashmir SGST
Seeks to amend Notification No. SRO-GST-13 Tax (Rate), dated the 8th July, 2017
Summary: A government notification amends the Jammu and Kashmir Goods and Services Tax notification from July 2017. The amendment introduces a new entry regarding rental services for non-residential immovable property, specifying tax implications for unregistered and registered persons. The changes are retroactively effective from October 10, 2024, as part of the state's GST regulatory framework.
Income Tax
7.
49/2025 - dated
19-5-2025
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IT
Income-tax (Nineteenth Amendment) Rules, 2025
Summary: The Central Board of Direct Taxes issued a notification amending the Income-tax Rules, 1962, introducing a new Form ITR-U for updated income tax returns. The form allows taxpayers to update their income within 48 months from the end of the relevant assessment year, with provisions for reporting additional income, correcting previous returns, and paying additional tax based on specified percentages.
Highlights / Catch Notes
GST
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Procedural Defects in GST Assessment Undermine Liability of penalty Determination Under Section 122(2)(b)
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Taxpayer Wins GST Address Amendment Rights with One-Month Window and Guaranteed Input Tax Credit Unblocking
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Tax Dispute Resolved: Petitioner Granted Opportunity to Respond and Challenge Ex-Parte Order Under Section 74(9)
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Manufacturers Win Right to Claim Input Tax Credit Refund for Zero-Rated Exports Despite Previous Circular Restrictions
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Provisional Bank Account Attachment Under Section 83 Quashed Due to Lack of Substantive Revenue Risk Evidence
Income Tax
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Tax Assessment Time Limits Restricted: Information Exchange Must Follow Strict DTAA Protocol for Limitation Period Exclusion
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Taxpayer Wins: Refund Processing Mandated with Verified TDS Credit, Eight-Week Compliance Order
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Taxpayer Wins Challenge Against Transfer Pricing Officer's Arbitrary Rejection of Intra-Group Service Pricing Documentation Under Section 92C(3)
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Tax Authority Validates Income Assessment by Upholding Disputed Bank Account Entries and Rejecting Unsubstantiated Liability Claims
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Tax Appeal Dismissed: 20% Disputed Demand Not Deposited, Refund Adjustment Upheld for Recovering Outstanding Tax Liability
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Transfer Pricing Dispute Resolved: Legislative Omission Invalidates Tax Reassessment Under Section 92BA and 92CA
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Legal Victory: Tax Tribunal Strikes Down Unsubstantiated Income Additions, Upholds Taxpayer Rights Under Section 69
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Corporate Social Responsibility Expenses Upheld as Valid Computation Method for Book Profits Under Section 115JB
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Charitable Organization Wins Tax Exemption Appeal, Proves Inclusive Welfare Beyond Religious Boundaries Under Section 12A
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International Transactions Scrutinized: Transfer Pricing Dispute Resolved with Favorable Operating Profit Margin Analysis and Procedural Clarifications
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Jurisdictional Defect Nullifies Tax Assessment: Procedural Flaws Invalidate Capital Gains Deduction Under Section 127
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Income Accumulation by Charitable Trust Validated: 15% Allowance Confirmed Under Section 11 with Clear Charitable Purpose
Customs
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High Court Quashes Trial Court Order for Lack of Jurisdiction, Nullifies Proceedings Under Constitutional Power of Judicial Oversight
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Customs Duty Dispute: Section 17(5) Proceedings Continue with Mandatory Personal Hearing and Comprehensive Classification Review
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Customs Broker Licence Reinstated: No Liability Found for Exporter's Mis-Declaration of Goods Under Relevant Statutory Provisions
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Customs Valuation Triumph: Evidence Gaps Invalidate Commissioner's Order on Imported Iron Screws from China
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Customs Valuation Dispute: Importer Wins as Authorities Fail to Prove Undervaluation of Motorcycle Inner Tubes Under Section 14
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Judicial Review Rejects Error Claim in Product Classification Dispute, Upholds Original Order's Substantive Findings
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Imported Scrap Penalty Overturned: Precedent Case Leads to Penalty Reversal Under Section 112(b) of Customs Act
DGFT
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Government Updates Export Policy Codes in ITC Schedule-II, Implementing Comprehensive Changes Under Foreign Trade Regulations
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Govt Restricts Precious Metal Imports, Mandates RBI-Nominated Agencies and IIBX for Gold, Silver, Platinum Trading
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Govt Restricts Bangladesh Imports via Land Ports, Mandates Seaport Routes for Specific Goods Under Trade Regulation Act
FEMA
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NGOs with Expired FCRA Registration Can Now Pay Penalties Through Designated SBI Online Portal Under Specific Compliance Guidelines
State GST
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Tax Compliance Clarity: Section 128A MGST Act Explains Eligibility, Payment Processes, and Dispute Resolution Mechanisms
Indian Laws
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Legal Challenge Fails: Cheque Dishonour Case Dismissed After Accused Successfully Rebuts Debt Presumptions Under NI Act Sections 118 and 139
SEBI
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Government Revises Securities Investment Rules, Clarifying Personal vs. Professional Financial Activities Under Rule 8
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SEBI Mandates Independent Internal Audits and Robust Governance Framework for Market Infrastructure Institutions Under New Guidelines
Central Excise
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Manufacturer Cleared of Clandestine Production Allegations Due to Insufficient Evidence in Landmark Excise Duty Case
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Unverified Digital Evidence Fails to Substantiate Sponge Iron Removal Allegations, Revenue Claim Dismissed
Case Laws:
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GST
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2025 (5) TMI 1356 Based on the case law analysis, the SC found critical procedural irregularities in the tax authority's order:The court invalidated the penalty order due to non-compliance with Rule 142(1A) of CGST Rules, which mandates communicating tax details before issuing assessment notices. The penalty under Section 122(2)(b) could not be retrospectively applied to tax periods before 01.01.2021. The order was deemed legally unsustainable due to procedural defects, jurisdictional overreach, and improper application of amended provisions. The court indicated the order should be quashed.
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2025 (5) TMI 1355 The HC examined a tax dispute involving a Show Cause Notice (SCN) under the CGST Act. While upholding the SCN's validity based on a statutory limitation extension, the court set aside the impugned order due to procedural irregularities. The matter was remanded for fresh adjudication, directing the tax authority to provide the petitioner a proper hearing and opportunity to respond, with time granted until 10th July 2025 to file a reply.
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2025 (5) TMI 1354 The HC examined a GST registration cancellation appeal involving procedural and natural justice issues. The Court held that limitation period for appeal begins only upon actual communication of order. Finding non-service of Show Cause Notice violated natural justice principles, the HC exercised writ jurisdiction to restore the appeal for merits adjudication, directing the Petitioner to pay Rs. 20,000 costs. The decision emphasizes procedural fairness and opportunity to be heard.
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2025 (5) TMI 1353 Delhi HC set aside GST registration cancellation order due to procedural irregularities. Court found SCN had incorrect information about reply, and petitioner was not provided field visit report. HC remanded matter to Adjudicating Authority, directing report be shared within two weeks and granting petitioner opportunity to respond. All parties' rights were preserved, with new hearing process mandated.
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2025 (5) TMI 1352 HC disposed of writ petition challenging tax assessment under GST Act. Petitioner contested disallowed input tax credit due to alleged non-existent supplier. Court granted liberty to withdraw petition and pursue statutory appellate remedy, emphasizing alternative remedies available under law.
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2025 (5) TMI 1351 HC allowed writ petition challenging tax assessment appeal rejection. Court found petitioner's delay explanation reasonable and directed appellate authority to consider appeal on merits without referencing procedural delay. The order was set aside, mandating expeditious review in accordance with legal principles.
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2025 (5) TMI 1350 HC allowed petition challenging GST registration amendment rejection. Directed tax authorities to provide opportunity for document submission, personal hearing, and decision within three months. Ordered unblocking of petitioner's blocked Input Tax Credit. Writ petition disposed with specific procedural directives for GST registration amendment process.
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2025 (5) TMI 1349 HC ruled that the GST show cause notice (SCN) was procedurally defective due to ineffective portal communication. The court set aside the adjudication order, directing fresh proceedings with proper notice and opportunity to be heard. The validity of extension notifications was left open, pending Supreme Court resolution in ongoing proceedings. Petitioner was granted opportunity to file replies and participate in hearings.
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2025 (5) TMI 1348 HC examined a GST-related case involving procedural fairness and notice validity. The court found deficiencies in notice communication through the GST portal, compromising the petitioner's right to be heard. While deferring the constitutional validity of a specific notification to the SC, the HC remanded the matter for fresh adjudication, directing proper notice and opportunity for the petitioner to respond. The order preserves all rights pending SC's final decision.
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2025 (5) TMI 1347 HC analyzed a complex GST tax dispute involving procedural challenges to tax notices and notifications. The court set aside demand orders, remanded the case for fresh adjudication, and mandated improved notice communication. While deferring final determination of notification validity to SC, the HC ensured the petitioner's right to be heard by requiring personal hearings and allowing comprehensive reply submissions. The ruling emphasized procedural fairness in tax proceedings.
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2025 (5) TMI 1346 HC dismisses GST refund petition, directing taxpayer to pursue statutory appellate remedy. Court found partial refund order valid, with Rs. 1,31,240/- rejected under Section 54 of CGST Act. Petitioner mandated to file appeal within 8 weeks before appellate authority, which must decide within 4 months. Writ jurisdiction declined due to disputed factual issues requiring detailed examination through established administrative process.
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2025 (5) TMI 1345 HC set aside ex-parte tax order under CGST Act due to inadequate notice communication. Court found procedural irregularities in serving show cause notices electronically without ensuring petitioner's actual awareness. Remanded matter back to tax authority, directing fresh proceedings with proper opportunity for petitioner to respond and submit replies. Recovery proceedings under Section 79 were also halted pending proper adjudication.
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2025 (5) TMI 1344 HC analyzed a GST Act case involving procedural challenges to ex-parte tax adjudication orders. The court found the orders invalid due to lack of natural justice, as the petitioner was not given a proper hearing. The HC quashed the impugned orders and directed the tax authority to reconsider the matter, providing the petitioner an opportunity to present their case and ensuring compliance with relevant GST circulars and principles of fair hearing.
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2025 (5) TMI 1343 The SC ruled that a taxpayer is entitled to refund of unutilized Input Tax Credit (ITC) of GST compensation Cess paid on inputs used in manufacturing exported goods, even when exports are made on IGST payment. The court found that when exported goods are exempt from compensation Cess, the proviso restricting Cess ITC utilization does not apply. The circulars denying such refunds were interpreted narrowly, allowing the taxpayer's refund claim.
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2025 (5) TMI 1342 The HC examined the validity of a provisional attachment under Section 83 of the CGST Act. The Court quashed the attachment order, finding that the respondents failed to provide tangible material justifying the bank account freeze. The attachment was deemed arbitrary and not necessary to protect government revenue, violating statutory safeguards. The Court ordered immediate de-freezing of the petitioner's bank account.
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Income Tax
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2025 (5) TMI 1341 SC allowed the appeal, setting aside HC's order regarding witness statement recording during tax remand proceedings. The court affirmed the Assessing Officer's discretion in questioning witnesses and emphasized the assessee's cross-examination rights. The CIT(A) was directed to proceed independently without being influenced by previous judicial observations, maintaining procedural fairness in tax assessment.
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2025 (5) TMI 1340 SC dismissed the SLP after condoning delay, upholding the HC's previous order without substantial intervention. The court found no compelling reason to modify the existing judicial determination, effectively maintaining the lower court's ruling and concluding the legal proceedings.
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2025 (5) TMI 1339 HC examined the legality of tax reassessment notice under Income Tax Act. The Court found the Assessing Officer's order defective due to lack of recorded reasons for issuing Section 148 notice. The HC quashed the impugned orders, directing the Assessing Officer to decide the case afresh with detailed, objective reasons, emphasizing that failure to provide reasons amounts to denial of justice and renders the order unsustainable.
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2025 (5) TMI 1338 The SC dismissed appeals challenging ITAT's quashing of tax assessment orders. The court held that the reference to Swiss tax authorities for pre-2011 information was invalid under the amended Indo-Swiss DTAA. Consequently, the limitation period for assessment could not be extended, rendering the orders time-barred. The court affirmed the ITAT's decision, emphasizing strict interpretation of limitation periods and the importance of valid information exchange references.
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2025 (5) TMI 1337 HC resolved a tax dispute regarding TDS credit verification for AY 2007-08. The court directed the Assessing Officer to accept TDS certificates from the deductor despite unavailable TRACES portal data. The AO must process the rectification application under Section 154, verify TDS credit through alternative means, and complete refund proceedings within eight weeks. The ruling emphasized documentary evidence over portal limitations and mandated expeditious claim resolution.
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2025 (5) TMI 1336 Legal Case Summary:SC upheld tax authority's reassessment of income for AY 2013-14 under Section 260A of Income Tax Act. The Court rejected ITAT's order invalidating reopening of assessment, finding the Assessing Officer (AO) had independently examined evidence of manipulated share transactions designed to convert unaccounted income into fictitious Long Term Capital Gains. The Court clarified that AO's "reason to believe" requires only justifiable cause, not conclusive legal proof, and can rely on investigation wing information if independently verified.
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2025 (5) TMI 1335 The SC examined transfer pricing adjustment for intra-group services, focusing on compliance with Section 92C(3) of the Income Tax Act. The Court upheld the ITAT's remand, directing the TPO to reconsider the Arm's Length Price determination. The ruling emphasized that the TPO cannot arbitrarily reject the assessee's transfer pricing study without satisfying statutory conditions, and disapproved the CIT(A)'s ad hoc 50% adjustment.
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2025 (5) TMI 1334 The SC examined a tax appeal challenging ITAT's restoration of tax additions related to unsubstantiated bank liabilities. The Court upheld ITAT's decision, finding the Assessee failed to prove the genuineness of claimed liabilities. The Court determined that the addition was factually justified, no procedural violations occurred, and no substantial legal question warranted intervention. The appeal was consequently dismissed.
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2025 (5) TMI 1333 Ruling in Tax Reopening Case:HC invalidated a tax notice under Section 148 for Assessment Year 2018-19, finding the reopening barred by limitation. The court held that recurring intra-group payments to associated enterprises cannot be aggregated as a "singular event" to extend the four-year limitation period. While noting suspicious management fee transactions, the HC emphasized that limitation validity should be assessed separately from substantive tax dispute merits, thereby quashing the notice and subsequent proceedings.
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2025 (5) TMI 1332 The SC examined the legality of an Assessing Officer's adjustment of a tax refund against an outstanding disputed demand. The Court held that the adjustment was lawful since the Assessee failed to deposit the mandatory 20% of the disputed demand as per CBDT guidelines. The refund for AY 2014-15 was correctly applied to settle the full demand and interest for AY 2016-17, as the Assessee did not comply with the pre-condition for staying the demand. The petition was dismissed.
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2025 (5) TMI 1331 HC ruled that a society registered under the Karnataka Souharda Sahakari Act, 1997, qualifies as a "co-operative society" under Section 2(19) of the Income Tax Act. The court upheld the society's exemption from TDS under Section 194A(3)(v), quashed the show cause notice for financial years 2015-16 to 2018-19, and directed the revenue authorities to drop proceedings against the society.
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2025 (5) TMI 1330 Legal heir challenged tax reassessment notices issued to deceased assessee. HC ruled notices were invalid as legal heir was registered on tax portal. Court quashed proceedings under Sections 148A and 148, holding that notices must be directed to legal heir, not deceased person. Department permitted to reissue notices to legal heir if legally permissible, preserving right to reassess income while ensuring procedural compliance.
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2025 (5) TMI 1329 The SC examined the eligibility for special tax deductions under Section 42 of the Income-tax Act in Production Sharing Contracts (PSCs). The Court held that tax authorities correctly denied deductions because the PSCs lacked explicit provisions for such allowances. The Court emphasized that contractual terms govern tax treatment, and parties cannot incorporate external documents or unwritten intentions. The ruling upheld the primacy of the executed PSCs as the definitive accounting regime, rejecting attempts to read in additional tax benefits not formally incorporated in the agreement.
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2025 (5) TMI 1328 TRIB ruling on tax valuation dispute involving residential property. The tribunal found procedural errors in tax assessment, specifically the Assessing Officer's failure to refer property valuation to Departmental Valuation Officer (DVO) despite assessee's valid dispute. The case was remanded for de novo adjudication, with the tribunal directing a fresh valuation and proper hearing of the assessee's submissions under Income Tax Act provisions.
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2025 (5) TMI 1327 The Tribunal allowed the appeal against tax addition under section 56(2)(x) of the Income Tax Act. It found that part payments were made through banking channels before property registration, rendering the stamp duty value addition unjustified. The Tribunal held that the provision could not be applied retrospectively, as the transaction predated the statutory amendment. Consequently, penalty and interest proceedings were also dismissed as academic.
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2025 (5) TMI 1326 The SC/Tribunal addressed disallowance of interest expenses under Income Tax Act. The key ruling held that Rule 8D and section 14A are inapplicable when no exempt income exists. Interest expenses were allowable as business expenditure since borrowed funds were used for wind power plant operations and investments were made from interest-free funds. The Revenue's appeals were dismissed, invalidating disallowances under sections 36(1)(iii) and 37(1).
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2025 (5) TMI 1325 The SC examined the correctness of a revision order under section 263 of the Income-tax Act, focusing on three key issues: AO's inquiry adequacy, business entity conversion impact, and plant machinery eligibility for deduction. The court ruled in favor of the assessee, finding no merit in the Revenue's arguments. The revision order was set aside, affirming the original assessment's validity and the assessee's entitlement to section 80IC deduction.
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2025 (5) TMI 1324 The Income Tax Tribunal addressed penalty provisions under section 270A and 270AA. The key outcome was granting immunity from penalty to the assessee, who paid tax demand within stipulated time and did not appeal the assessment order. Despite procedural delay in filing Form 68, the Tribunal deleted the Rs. 9,07,270/- penalty, emphasizing substantive compliance with statutory conditions and the spirit of the immunity provisions.
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2025 (5) TMI 1323 The SC/Tribunal addressed a tax dispute involving a charitable trust. The key ruling determined that the Assessing Officer incorrectly computed the trust's income by ignoring its full application of funds for charitable purposes. The court directed the AO to assess the trust's income as nil, given that the entire receipts were applied to revenue and capital expenditures, thereby qualifying for exemption under Section 11 of the Income Tax Act.
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2025 (5) TMI 1322 The SC found the reassessment notice invalid due to jurisdictional defects. The Kolkata AO improperly issued a notice with an incorrect PAN after the case was transferred to Ahmedabad AO under section 127. The Tribunal quashed the reassessment order, emphasizing that once jurisdiction transfers, subsequent proceedings by the earlier AO are void. The appeal was allowed, setting aside the tax additions.
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Benami Property
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2025 (5) TMI 1293 SC held that the suit filed in 2007 was not barred by limitation, as the cause of action arose in 2006 when defendant breached the trust by transferring property. The Court rejected the Order VII Rule 11 CPC application, finding that the Benami Transactions Act bar and limitation issues were triable matters requiring full evidence. The plaint disclosed a valid cause of action, and the suit should proceed to trial for comprehensive adjudication.
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Customs
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2025 (5) TMI 1292 HC examined jurisdictional issues arising from a trial court's actions after passing a final decree. The court held that once a court becomes functus officio by consigning a file to the record room, it cannot initiate new proceedings suo moto. The court ruled that jurisdiction cannot be conferred by consent or waiver. Consequently, the HC set aside all orders in the subsequent proceedings as void, affirming that a court lacking jurisdiction cannot validate its own actions.
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2025 (5) TMI 1291 HC ruled on a customs duty classification dispute involving imported goods. The court directed that a comprehensive Show Cause Notice proceeding would resolve the classification issue for all related Bills of Entry. The Petitioner was granted 30 days to file a reply, with the understanding that the adjudication would bind all relevant entries. The court emphasized avoiding multiple proceedings and ensuring procedural fairness through a single, comprehensive order.
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2025 (5) TMI 1290 HC dismissed petition challenging bail order in gold smuggling case. Petitioner argued against bail for 11 kg gold, but respondents maintained only 3 kg recovered. Court found no new circumstances to interfere with magistrate's bail order and upheld original decision, noting offence was bailable.
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2025 (5) TMI 1289 The Tribunal examined a Customs Broker's licence suspension, evaluating the justification under Regulation 16(2) of CBLR, 2018. After comprehensive analysis, the Tribunal found insufficient grounds for suspension, determining the broker had appropriately verified exporter credentials and fulfilled statutory obligations. The SC revoked the suspension, returning the licence, and established that Customs Brokers cannot be held responsible for mis-declarations or retroactive registration cancellations beyond their reasonable verification capabilities.
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2025 (5) TMI 1288 The AT examined a customs valuation dispute involving imported screws, ultimately ruling in favor of the appellant. The tribunal invalidated the department's rejection of declared transaction value due to inadmissible electronic evidence and third-party statements. The court emphasized procedural requirements for statement admissibility, specifically that declarants must be examined and cross-examined. Consequently, penalties were set aside, and the original transaction value was upheld.
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2025 (5) TMI 1287 The SC/Tribunal examined a customs valuation dispute involving motorcycle inner tubes. The key ruling rejected the department's attempt to enhance the transaction value due to insufficient evidence. The court held that mere admission of undervaluation and voluntary payment do not absolve the department from proving valuation discrepancies. Consequently, the original transaction value was upheld, and confiscation, penalties, and enhanced duties were set aside.
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2025 (5) TMI 1286 The SC Tribunal dismissed the application for rectification of Final Order No. 58770, finding no "mistake apparent from the record" under Section 35C(2) of the Central Excise Act. The Tribunal held that the appellant's arguments were a disguised attempt to re-hear the case, which is impermissible. Only a minor typographical error in the authorized representative's name was allowed to be corrected.
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2025 (5) TMI 1285 The SC/Tribunal ruled in favor of the appellant in a customs duty case involving imported scrap. The court absolved the appellant of duty, interest, and penalty based on precedent, finding no distinguishing facts from a prior case. The tribunal held that reassessment after initial assessment's finality was impermissible, no additional duty was payable on scrap, and the Section 112(b) penalty was unsustainable. The decision emphasized consistency and legal principles in customs valuation.
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Service Tax
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2025 (5) TMI 1284 The Tribunal addressed four key issues in tax litigation involving service tax and Cenvat Credit for transportation services. The SC ruled that the appellants were not liable for service tax since their consignment agents had already paid the tax. The extended limitation period was deemed inapplicable due to lack of fraud or suppression. The Cenvat Credit claim was remitted for fresh adjudication, and penalties were set aside for absence of mens rea. The appeals were largely allowed, with the Cenvat Credit matter referred back for document verification.
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2025 (5) TMI 1283 SC upheld that service tax on works contracts is leviable only from 01.06.2007 under the 'Works Contract Service' category. The Appellant was not liable for service tax prior to this date, and their subsequent tax payments under the correct category discharged their tax liability. Partial material supply by the client does not alter the service tax classification. The appeal was allowed with consequential relief.
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Central Excise
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2025 (5) TMI 1282 Outcome of Case Law:The SC invalidated Revenue's allegations of clandestine goods removal due to insufficient evidence. The court ruled that Pen Drive data seized from a third party was inadmissible without proper authentication. Electronic evidence must satisfy statutory conditions under Section 36B. The Revenue failed to provide corroborative evidence like raw material purchases, electricity consumption, and transportation records. Penalties against both appellants were set aside, with only a limited uncontested demand upheld.
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2025 (5) TMI 1281 Tribunal addressed clandestine manufacture allegations in central excise case. Held that private records alone cannot substantiate duty demand without corroborative evidence. Found insufficient proof of unaccounted goods production or removal. Ruled that statements recorded during investigation were inadmissible without proper procedural safeguards. Rejected extended limitation period and penalties against company and directors. Appeal allowed, impugned orders quashed.
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Indian Laws
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2025 (5) TMI 1280 HC analyzed appeals challenging acquittal under Section 138 of Negotiable Instruments Act. Court held that statutory presumptions shift evidentiary burden to accused, who must rebut debt claims on preponderance of probabilities. Despite undisputed cheque signatures, accused successfully demonstrated non-existence of debt through documentary evidence. HC declined to interfere with trial court's acquittal, finding no perversity in original judgment and emphasizing appellate court's limited intervention in such cases.
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