TMI Tax Updates - e-Newsletter
May 3, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Law of Competition PMLA Service Tax Central Excise Indian Laws

TMI Short Notes

1. Special Taxation of Non-Resident Sportsmen and Entertainers : Clause 211 of the Income Tax Bill, 2025 Vs. section 115BBA of the Income-tax Act, 1961

  Bills:

2. Special Tax Regimes for Gaming and Gambling Incomes : Clause 194 (Table: S. No. 1) of Income Tax Bill, 2025 Vs. Section 115BB of Income Tax Act, 1961

  Bills:

3. Special concessional tax regime for new manufacturing co-operative societies in India : Clause 204 of the Income Tax Bill, 2025 Vs. Section 115BAE of the Income Tax Act, 1961

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4. Concessional tax regime for resident cooperative societies in India : Clause 203 of the Income Tax Bill, 2025 Vs. Section 115BAD of the Income Tax Act, 1961

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5. Introducing a new tax regime with revised tax slabs and by eliminating various exemptions and deductions : Clause 202 of Income Tax Bill, 2025 Vs. Section 115BAC of the income tax Act, 1961

  Bills:

6. Concessional tax regime for new manufacturing domestic companies : Clause 201 of the Income Tax Bill, 2025 Vs. Section 115BAB of the income tax Act, 1961

  Bills:

Articles

1. FILING OF APPEAL BEFORE GOODS AND SERVICES TAX APPELLATE TRIBUNAL – PART III

   By: DR.MARIAPPAN GOVINDARAJAN

2. Top Tax Deductions Every Kerala Small Business Should Claim

   By: Shehin Rasid

3. How OPC Annual Return Affects Your Business?

   By: Ishita Ramani

4. Detailed Legal Analysis: Definition of 'Ganja' Under the NDPS Act and Recent Judicial Interpretation.(NDPS Act read with Rules made thereunder)

   By: YAGAY andSUN

5. What Are the Documents Required for Assignment of Trademark?(Intellectual Property Rights){Part 2 of 2}

   By: YAGAY andSUN

6. 🔷 ASSIGNMENT OF TRADEMARK – LEGAL NOTE(Intellectual Property Rights){Part – 1 of 2}

   By: YAGAY andSUN

7. Industry 4.0 and the Transformational Growth of the MSME Sector in India – A Supportive and Critical Analysis.

   By: YAGAY andSUN

8. A Legal Analysis on Customs Classification of Parts and Components under the Customs Tariff Act, 1975  

   By: YAGAY andSUN

9. Indian Weddings – Music and Applicable Laws of Intellectual Property Rights.

   By: YAGAY andSUN

10. Emerging Patent Landscape of Nano pharmaceuticals in India: Unlocking Precision Drug Delivery within the Legal Framework of the Patents Act and WIPO Provisions.

   By: YAGAY andSUN

11. Liability for failure to realise and repatriate export proceeds under FEMA. 

   By: YAGAY andSUN

12. Understanding Patents under the Patents Act, 1970 (as amended from time to time).

   By: YAGAY andSUN

13. Registration under Patent Laws of India - Step-wise Procedure, Documents Required, Precautions, Legal and Regulatory Framework, Application Form Number, Legal Research, etc.

   By: YAGAY andSUN

News

1. GST revenue hits record high of Rs 2.37 lakh cr in April; FM says it reflects economic resilience

2. White House will unveil Trump's 2026 budget, his first since returning to power

3. RBI shuffles portfolios of dy guvs; Poonam Gupta gets monetary policy dept charge

4. India’s Total Exports Grow by 6.01% to Reach Record $824.9 Billion in 2024–25, Up from $778.1 Billion in 2023–24:RBI Report.

5. National Herald PMLA case: Delhi court issues notice to Sonia Gandhi, Rahul

6. Govt notifies ITR-3 for individuals/HUFs having income from biz, profession

7. RBI data: Rs 2000 notes worth Rs 6,266 cr still in circulation after withdrawal 2 yrs ago

8. PM Modi commissions Vizhinjam seaport; says it will bring economic stability to Kerala, India

9. Lucknow court declares Shine Group promoter fugitive economic offender

10. Union Minister of State for Finance Shri Pankaj Chaudhary presides over the 69th Foundation Day of Directorate of Enforcement (ED), in New Delhi, today

11. India and EU Reaffirms Commitment to Conclude Ambitious FTA by the End of 2025, Deepen Strategic Trade Ties.

12. ET GCC Growth Summit 2025 to Spotlight India's Next Wave of Innovation in Pune

13. Do not make hasty arrests; make hawala operators reporting entity under PMLA: ASG Raju to ED

Notifications

Customs

1. 32/2025 - dated 28-4-2025 - Cus (NT)

Seeks to Amend Notification No. 58/2021-Customs (N.T.), dated the 1st July, 2021 - Agreements or Arrangements on 'Cooperation and Mutual Administrative Assistance (CMAA) in Customs matters' of India with other countries - Provisions of the said section 151B of Customs Act shall apply to the agreement or arrangement.

Income Tax

2. 41/2025 - dated 30-4-2025 - IT

CBDT has notified the ITR-3 Form for Assessment Year 2025–26 under the Income-tax (13th Amendment) Rules, 2025

SEBI

3. SEBI/LAD-NRO/GN/2025/246 - dated 30-4-2025 - SEBI

Securities Contracts (Regulation) (Stock Exchanges And Clearing Corporations) (Third Amendment) Regulations, 2025.

4. SEBI/LAD-NRO/GN/2025/244 - dated 29-4-2025 - SEBI

Securities And Exchange Board Of India (Listing Obligations And Disclosure Requirements) (Second Amendment) Regulations, 2025.

Highlights / Catch Notes

GST

• GST Demand Notice Upheld: Petitioner's Delayed Challenge Rejected Due to Procedural Non-Compliance Under Section 73

  Case-Laws - HC : HC dismissed the writ petition challenging a GST demand notice under Section 73 of the GST Act. The court found no merit in the petitioner's challenge, noting the delayed response to the show cause notice, lack of valid explanation for delay, and failure to pursue alternative appellate remedies. The court held that the petitioner cannot frustrate the adjudicatory process by belatedly approaching the court after failing to respond within the prescribed timeline, and rejected the contention of lack of hearing opportunity.
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• GST Show Cause Notice Resolved: Petitioner Granted 15-Day Window to Rectify Portal Details Without Further Extensions

  Case-Laws - HC : HC ruled on a GST-related Show Cause Notice (SCN) involving jurisdictional and procedural issues. The court granted a singular opportunity for the petitioner to correct GST portal details within 15 days, with clear directives that no further extensions would be provided. The SCN, originally issued to multiple addresses, will be adjudicated by the Commissionerate, North. The petitioner relinquished any jurisdictional challenges, and the writ petition was disposed of, mandating compliance with specified conditions to avoid potential future legal complications.
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• Judicial Review Invalidates Goods Detention Order Due to Procedural Inconsistencies in HSN Code Verification Process

  Case-Laws - HC : HC quashed detention order of goods after determining no substantive discrepancy existed between physical verification report (MOV-04) and accompanying documents. The court found procedural irregularities in goods identification, specifically highlighting that HSN Code manual entry requires precise verification. Rejecting subsequent attempts to challenge goods description post initial verification, the court emphasized administrative consistency and procedural fairness. Relying on established judicial precedent, the court determined the detention was unwarranted, thereby allowing the writ petition and directing release of detained goods.
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• GST Demand Upheld: Appellant's Challenge Rejected Due to Procedural Lapses and Unsubstantiated Tax Credit Claims

  Case-Laws - HC : HC dismissed writ appeal challenging GST demand and penalty. The court found no merit in appellant's contentions regarding tax credit mismatch and procedural irregularities. Appellant failed to rectify erroneous return filing prior to show cause notice and attempted to circumvent statutory remedy by invoking writ jurisdiction. The court upheld the lower court's order, preserving appellant's right to file statutory appeal before appropriate appellate authority and deposit 10% of demanded duty and penalty.
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• GST Registration Cancellation Order Overturned: Procedural Flaws and Lack of Evidence Invalidate Administrative Action

  Case-Laws - HC : HC quashed GST registration cancellation order due to procedural irregularities. The court found that no proper notice was served to the petitioner and the verification report lacked substantive evidence to support registration cancellation. Critical procedural defects, including failure to provide adequate notice and absence of concrete material proving business non-operation, rendered the original administrative order unsustainable. The court directed reconsideration of the matter, effectively reinstating the petitioner's GST registration and emphasizing principles of natural justice in administrative proceedings.
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• Legal Challenge Fails: Tax Assessment Order Upheld After Comprehensive Review of Procedural Compliance and Administrative Fairness

  Case-Laws - HC : HC dismissed the writ petition challenging a tax assessment order under BGST Act, 2017. The court found no procedural irregularity in the administrative order and held that the petitioner was not denied a fair hearing. While rejecting the challenge to the order, the court granted liberty to the petitioner to pursue alternative legal remedies as per applicable statutory provisions. The petition was disposed of without interfering with the original administrative determination.
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• Suppliers Win Partial Relief in GST Registration Dispute, Procedural Validity Upheld Under Section 168A

  Case-Laws - HC : HC adjudicated a GST dispute involving retrospective cancellation of suppliers' registrations and input tax credit reversal. The court found the respondents' invocation of Section 168A to extend order-passing timelines under Section 73(9) was procedurally valid. Despite petitioner's argument of no force majeure conditions and challenging the notifications, the court noted the petitioner had disclosed invoices, ledgers, and e-way bills demonstrating good faith transactions. The court partially acknowledged the petitioner's submissions, particularly regarding acceptance of explanations for two suppliers. The matter was adjourned until 28th April, 2025, with the impugned order remained stayed pending further judicial review.
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• Statutory Notice Defect Invalidates Tax Proceedings, Mandates Corrective Action Within 3 Months Under CGST Section 73

  Case-Laws - HC : HC allowed the writ petition in part, finding that the notice issued under Section 73 of CGST Act, 2017 did not comply with statutory requirements for providing thirty days' response time. The court set aside the impugned actions dated 30.11.2023 and remanded the matter to the authority to issue a corrigendum to the 29.09.2023 notice, extending the reply and hearing timelines in strict accordance with Section 73(8). The authority must complete this exercise within three months from the order date, with remaining contentions left open for future adjudication.
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• GST Input Tax Credit Challenge Rejected: No Procedural Prejudice Found in Credit Rectification Dispute

  Case-Laws - HC : HC dismissed petition regarding GST input tax credit rectification. The court found no procedural prejudice to the petitioner, who was fully aware of the case against it involving inter-mingling of IGST and Cess input tax credits for February and March 2018. Referencing SC precedent, the court held that when a fair hearing would not alter the ultimate conclusion, no legal duty to provide additional notice exists. The petitioner failed to demonstrate substantial prejudice from the procedural approach, and the audit report sufficiently outlined the case. Consequently, the petition was dismissed without merit.
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• Exporters Win Partial Relief: Tax Refund Challenge Succeeds with Procedural Safeguards Under Natural Justice Principles

  Case-Laws - HC : The HC partially allowed the petitioner's writ petition challenging the refund rejection order for export goods. The court found that the Joint Commissioner of State Tax exercised quasi-judicial functions improperly by considering extraneous materials while rejecting the refund. The original order dated 05.12.2023 was treated as a show-cause notice, directing the petitioner to submit explanatory documents within eight weeks. The Joint Commissioner was mandated to pass a detailed speaking order addressing the petitioner's contentions and adhering to Supreme Court principles of natural justice. The appellate authority's order was set aside, and the refund rejection order was converted into a fresh show-cause notice for reconsideration.
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• Taxpayer Wins Challenge to Tax Order, Gains Substantive Review After Procedural Defect in Service Notice

  Case-Laws - HC : HC allows taxpayer's challenge to tax determination order under CGST/KSGST Acts. The court found that service of show cause notice and tax order through an additional notices tab did not constitute proper legal service. The HC held that the appellate authority improperly dismissed the appeal on technical delay grounds. Consequently, the court directed the appellate authority to review the appeal on substantive merits, effectively treating the appeal as timely filed and providing procedural relief to the taxpayer.
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Income Tax

• Scheme Declaration Upheld: Petitioner's Rights Preserved Despite Non-Disclosure, Authority Directed to Process Application

  Case-Laws - HC : HC allows petitioner's challenge to DTVSV Scheme declaration rejection. The court found the non-disclosure of pending writ petition was immaterial and directed the Designated Authority to process the declaration. The authority must determine the payable amount in accordance with DTVSV Scheme provisions, using the original declaration date of 23.12.2024. The court emphasized that the petitioner's waiver of rights and commitment to withdraw the writ petition upon certificate issuance were valid. The ruling effectively mandates the administrative authority to proceed with the declaration processing without technical objections.
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• Income Tax Tribunal Strikes Down 37% Surcharge for Taxpayer with Income Below Rs. 5 Crore Threshold, Correcting Excessive Tax Levy

  Case-Laws - AT : ITAT held that surcharge cannot be levied at 37% when assessee's total income is Rs. 3,48,040/-, which is significantly below the Rs. 5 crore threshold for maximum surcharge rate. The tribunal determined that surcharge is only leviable when income exceeds Rs. 50,00,000, and the maximum 37% surcharge applies only if income exceeds Rs. 5 crore. Consequently, the CPC's imposition of 37% surcharge was erroneous, and the appeal by the assessee was allowed, effectively canceling the excessive surcharge.
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• Intangible Asset Depreciation Claim Upheld: Reasonable Approach Validates Tax Assessment Under Section 263

  Case-Laws - AT : ITAT adjudicated a tax dispute regarding depreciation claim on intangible assets. The tribunal held that the assessee's depreciation claim on intangible assets under development was legally sustainable. The court emphasized that not every revenue loss constitutes prejudice to revenue interests. Citing SC precedents, the tribunal confirmed that when an AO adopts a permissible approach and takes a reasonable view, the assessment cannot be considered erroneous. The tribunal quashed the CIT's order under Section 263, ruling that the depreciation claim on goodwill was allowable and did not cause revenue prejudice. Consequently, the assessee's appeal grounds were fully allowed, maintaining the original depreciation claim.
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• Tax Dispute: No Interest Income Recognition for Non-Performing Assets During Insolvency Proceedings Under Section 4

  Case-Laws - AT : ITAT adjudicated a tax dispute concerning interest income from a non-performing debt. The tribunal determined that no interest income could be recognized when the debtor was declared an NPA and undergoing insolvency proceedings. The key legal principle established was that taxation must be based on realistic income probability, not hypothetical earnings. The tribunal upheld the lower appellate authority's decision, rejecting the assessee's claim to recognize interest income on an accrual basis. Additionally, the tribunal denied TDS credit since no corresponding income was declared, citing precedent that TDS cannot be claimed without corresponding income recognition. The order effectively deleted the interest amount of Rs. 3,60,00,000/- and dismissed the assessee's grounds for TDS credit.
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• Interest-Free Subsidiary Loan Validated: Commercial Expediency Recognized, Foreign Service Payments Exempt from Taxation Under Specific Conditions

  Case-Laws - AT : ITAT upheld the assessee's claim of commercial expediency in providing an interest-free loan to its subsidiary, rejecting the CIT(A)'s narrow interpretation. The tribunal directed the AO to delete the disallowance of interest, recognizing that commercial expediency is not limited to supporting loss-making entities. Regarding payments to foreign nationals, the tribunal ruled that services rendered by non-residents with stay less than 120 days are not taxable in India. The AO's disallowance of payments was overturned, with the tribunal finding no requirement for TDS or section 195(2) certificate, as the payments were not chargeable to tax in India. The decision substantially favored the assessee's tax treatment.
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• Capital Account Dispute Resolved: Tribunal Rejects Mechanical Tax Additions Without Substantive Evidence

  Case-Laws - AT : ITAT adjudicated two key issues involving capital account and sundry creditors. The tribunal found material misunderstandings by the Assessing Officer regarding capital account balances, distinguishing between personal and business balance sheets. Regarding sundry creditors, the tribunal determined the change was merely nomenclature without substantive financial alteration. ITAT comprehensively set aside CIT(A)'s order, directing the Assessing Officer to delete both contested additions. The tribunal critically emphasized proper fact appreciation and rejected mechanical additions without substantive evidence. The final outcome was decisively in favor of the assessee, effectively nullifying the disputed tax assessments.
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• Tax Authorities Lose Challenge: Full Interest Deduction Allowed for Business Expenditure Under Income Tax Rules

  Case-Laws - AT : The ITAT quashed reassessment notices u/s 148 for AY 2014-15 and 2016-17 as time-barred, finding the notices were issued beyond the prescribed limitation period. The tribunal held that interest expenditure incurred for business purposes must be fully deducted in the year of expenditure, rejecting the AO's attempt to apportion interest between sales and work-in-progress. Applying the percentage of completion method and relying on ICDS IX provisions, the tribunal concluded that once development plans are obtained and units can be sold, interest capitalization ceases. The tribunal emphasized that when ICDS provisions conflict with the Income Tax Act, the Act's provisions prevail. Consequently, the revenue's appeal was dismissed, allowing the full interest expenditure deduction for the assessee.
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• Range Head's Tax Assessment Authority Invalidated: No Proper Jurisdictional Order Under Section 120(4)(b) Renders Proceedings Null

  Case-Laws - AT : The ITAT held that the assumption of jurisdiction by the Range head (Addl. CIT, Range-1, Raipur) to perform Assessing Officer functions under section 2(7A) without an order under section 120(4)(b) was invalid. The tribunal found no legal basis for the range head's jurisdiction, referencing the Jindal Power Ltd. case. The revenue's reliance on CBDT instructions and Notification No. 6/2009 was rejected as insufficient to confer legitimate jurisdictional authority. Consequently, the assessment order dated 03.02.2014 framed under section 144 was quashed due to lack of inherent jurisdictional competence.
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• Strict Interpretation of Section 2(22)(e) Prevails: Investment Not Deemed Dividend, Tax Addition Rejected

  Case-Laws - AT : ITAT ruled in favor of the assessee, rejecting deemed dividend assessment under section 2(22)(e). The tribunal distinguished between investment and advance, emphasizing strict interpretation of tax provisions. Factual findings by CIT(A) remained unchallenged by revenue, and no ingredients of deemed dividend were satisfied. The tribunal found no loan or advance received by the assessee from the referenced entities. Consequently, the assessing officer's addition was set aside, and the assessee's appeal was allowed, affirming the legal principle that fictional tax provisions must be construed narrowly.
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Customs

• Government Updates Customs Tariff Values for Edible Oils, Metals, and Areca Nuts Effective May 2025 Under Notification 33/2025

  Notifications : The GoI's MoF issued Notification No. 33/2025-Customs (N.T.) amending tariff values for various commodities under Customs Act, 1962. The notification establishes new tariff values for edible oils (palm oil, palmolein, soya bean oil), brass scrap, precious metals (gold and silver), and areca nuts, effective 01 May 2025. Key modifications include updated tariff values per metric ton or per kilogram for specified goods, with tariff values ranging from $1064 per 10 grams for gold to $6970 per metric ton for areca nuts. The amendment provides revised reference prices for customs valuation purposes, ensuring current market-aligned assessment of imported commodities.
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• Government Amends Customs Tariff for Rice Imports, Introduces New Tariff Items with Nil Duty Effective May 2025

  Notifications : The GoI's Ministry of Finance issued Notification No. 28/2025-Customs amending prior customs notifications to align with changes in the Second Schedule of the Customs Tariff Act. The amendments specifically modify customs tariff classifications for various rice categories, including parboiled and semi-milled rice, introducing new tariff items 1006 30 11, 1006 30 19, 1006 30 91, and 1006 30 99. The notification establishes Nil customs duty for these specified rice categories and will come into force from 1st May, 2025, effectively updating the existing customs duty framework for rice imports and classifications.
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• Chemical Tariff Codes Updated: Precise Classification and Anti-Dumping Duty Refinements Implemented for Specific Substances

  Notifications : The GoI's MoF issued Notification No. 08/2025-Customs (ADD) amending three prior customs notifications to update tariff classification codes for specific chemical substances. The amendments modify tariff codes for entries in Notifications No. 31/2021, 60/2021, and 12/2022-Customs (ADD), expanding and refining the classification of chemical compounds across multiple HS code categories. The modifications aim to align customs classifications with current regulatory standards, with the changes taking effect from 1st May, 2025, ensuring precise categorization of chemical imports and associated anti-dumping duty assessments.
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• Customs Tariff Notification Expands CVD Applicability for Multiple Tariff Classifications Under Section 3808

  Notifications : The GoI Ministry of Finance issued Notification No. 02/2025-Customs (CVD) amending previous CVD notification by substituting specific Customs Tariff classification figures from "3808 91 99, 3808 93 90 or 3808 99 90" to expanded classification codes "3808 91 93, 3808 91 99, 3808 93 91, 3808 93 99, 3808 99 12, 3808 99 91 or 3808 99 99" under powers conferred by Customs Tariff Act, 1975. The amendment will come into effect from 1st May, 2025, aligning with Finance Act, 2025 provisions and expanding the scope of countervailing duty applicability for specific tariff classifications.
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• Successful Challenge to Adjudication Order Allows Full Refund of Deposited Amount Under Section 27 of Customs Act

  Case-Laws - AT : CESTAT allowed the appeal, holding that the refund claim arising from a successful challenge to an adjudication order constitutes consequential relief exempt from time limitation under Section 27 of Customs Act, 1962. The tribunal determined that amounts paid under protest during investigation are refundable without time bar restrictions, particularly when the appellant successfully overturned the original order. The Commissioner's rejection of the refund claim was deemed unsustainable, and the appellant was entitled to recover the deposited amount of Rs. 5,00,000 as the payment was made under protest and should be treated as a deposit rather than duty payment.
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• Directors Not Automatically Liable for Company's Export Defaults Without Specific Proof of Direct Responsibility and Procedural Compliance

  Case-Laws - HC : HC held that the director cannot be personally liable for company's export obligation defaults without specific allegations demonstrating direct responsibility. The court found procedural irregularities, including failure to issue proper show cause notices after company's liquidation in 1998 and lack of evidence establishing director's direct culpability. Fundamental principles of natural justice were violated, and the respondent's orders imposing personal liability were consequently set aside. The court emphasized that mere directorship does not automatically create personal liability, requiring clear proof of direct involvement in the company's non-compliant conduct.
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• Customs Broker License Revocation Partially Overturned: Regulatory Compliance Violations Mitigated Under Regulation 10(d)

  Case-Laws - AT : CESTAT adjudicated a customs broker license revocation case involving regulatory non-compliance. The tribunal found violations of Customs Broker Licensing Regulations, specifically Regulation 10(d), for failing to exercise due diligence and adequately advise the importer. The original penalty of complete security deposit forfeiture and Rs. 50,000 penalty was substantially mitigated, reducing security deposit forfeiture to 15% and penalty to Rs. 10,000. The appellate tribunal partially allowed the appeal, recognizing procedural lapses while moderating the punitive measures, thereby balancing regulatory enforcement with proportionate disciplinary action against the customs broker.
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• Customs Valuation Overturned: Free Replacement Goods Not Grounds for Reassessment Under Rule 46 with Full Sale Value Restoration

  Case-Laws - AT : CESTAT allowed the appeal, finding that re-determination of customs value for replacement goods was unjustified. The tribunal held that original goods were cleared at declared value, and replacement goods provided free of charge should not trigger valuation reassessment. The department improperly auctioned goods without appellant's knowledge while an appeal was pending. The tribunal directed restoration of sale value and set aside the original order, emphasizing that supplier list price cannot be arbitrarily used for valuation without sufficient rationale.
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• Customs Valuation Dispute: Tribunal Strikes Down 13% Value Enhancement as Unlawful and Procedurally Incorrect

  Case-Laws - AT : CESTAT adjudicated a customs valuation dispute, finding the re-assessment of imported goods' value unlawful. The tribunal determined that the enhancement of value by 13% "on account of SVB loading" lacks legal basis, as no such provision exists in the Customs Act or valuation rules. The assessment was conducted without recording reasons for transaction value rejection and without following prescribed valuation rules sequentially. The tribunal held that both the Assessing Officer's re-assessment and the Commissioner (Appeals)' order were procedurally and substantively incorrect. Consequently, the impugned order was set aside, and the appeal was allowed, effectively nullifying the unauthorized value enhancement.
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IBC

• Legal Notice Served to Key Managerial Personnel Validates Operational Debt Claim Under Section 8 of Insolvency Code

  Case-Laws - SC : SC held that service of demand notice by Operational Creditor to Key Managerial Personnel at Corporate Debtor's registered office constitutes valid statutory notice under Section 8 of IBC. The appeal was allowed, setting aside previous orders and remanding the matter to NCLT for fresh adjudication on merits. The court emphasized that the demand notice explicitly called upon the Corporate Debtor to pay operational debt within ten days, and the issue of contract novation and precise default date requires detailed examination by NCLT through comprehensive evidentiary analysis.
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• Employer's Provident Fund Contributions Deemed Trust Property, Survive Insolvency Resolution Beyond Corporate Debtor's Assets

  Case-Laws - HC : HC held that Provident Fund (PF) dues, comprising both employee and employer contributions, are not corporate debtor assets subject to insolvency resolution. The employer holds these funds in trust for employees, with statutory obligations under EPF Act. PF claims survive the resolution plan and remain payable, as they fall outside the Insolvency and Bankruptcy Code's scope. The court emphasized workers' dues primacy, determining that employer's PF contributions constitute a trust property for employees, irrespective of actual deposit in the fund account. Consequently, the petition was dismissed, affirming the respondents' right to claim PF dues.
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Indian Laws

• Digital KYC Must Ensure Full Accessibility for Persons with Disabilities, Mandating Inclusive Design and Alternative Verification Methods

  Case-Laws - SC : The SC held that digital KYC processes must be universally accessible for persons with disabilities. The Court issued comprehensive directions to RBI and other authorities to ensure inclusive digital infrastructure, mandating accessibility standards, alternative verification methods, and grievance redressal mechanisms. Key directives include developing accessible websites, providing sign language interpretation, allowing alternative identification methods, and establishing dedicated helplines. The ruling emphasizes digital access as a constitutional imperative under Article 21, requiring proactive state intervention to secure dignity and equal participation for marginalized populations. The writ petitions were disposed of without costs.
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• Consumer Protection Act Sections Validated: Legislative Framework Upheld for Robust Consumer Rights and Grievance Mechanisms

  Case-Laws - SC : SC upheld the constitutional validity of Sections 34(1), 47(1)(a)(i), and 58(1)(a)(i) of the Consumer Protection Act, 2019, rejecting claims of manifest arbitrariness and violation of Article 14. The Court dismissed the writ petition challenging pecuniary jurisdictions of consumer commissions based on value of goods and services. The judgment emphasizes legislative competence in prescribing tribunal jurisdictions and underscores the importance of institutional effectiveness, directing the Central Consumer Protection Council and Authority to conduct surveys and review mechanisms for efficient consumer grievance redressal.
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• GRT Hotels Wins Auction Bid for Property, SC Validates Sale Process Under SARFAESI Act Section 31

  Case-Laws - SC : SC upheld the auction's validity under SARFAESI Act, confirming GRT Hotels as the successful bidder. The court directed Edelweiss ARCL to facilitate peaceful possession transfer to GRT Hotels within one month and authorized Edelweiss to withdraw the deposited funds. While acknowledging Edelweiss's claim of a higher outstanding debt, the court focused on procedural compliance and accepted the highest available bid. The special leave petition was disposed of, with consequential directions for asset transfer and fund release, without delving into the detailed debt quantum.
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PMLA

• Enforcement Directorate Granted Continued Probe Rights in Money Laundering Case, Allowed to Utilize Existing Evidence and Pursue Broader Investigation

  Case-Laws - HC : HC permits Enforcement Directorate to continue money laundering investigation under PMLA, allowing utilization of documents and statements obtained during search and seizure. While specific petitioner's case remains pending appellate review, the investigating agency can proceed with inquiry against other accused and persons. The court emphasizes that PMLA investigations are continuous processes and judicial intervention should be minimal, especially at early investigative stages, unless there is manifest procedural abuse. The application is disposed of, enabling the investigation to move forward in accordance with legal provisions.
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• Banks Lose Challenge to Property Attachment in Money Laundering Probe, Provisional Order Upheld Under PMLA Sections 8(5)-8(8)

  Case-Laws - AT : AT affirmed provisional attachment of properties mortgaged by appellant banks in money laundering case. The tribunal recognized potential collusion between bank officials and loan recipients during 2010-2017. Banks were permitted to file claims under PMLA sections 8(5) to 8(8), with liberty to seek property auction and proportionate distribution of outstanding liabilities. The Adjudicating Authority's reasonable belief based on recorded statements and documents substantiated the provisional attachment order. Excess auction proceeds will be deposited as FDR with ED pending trial outcome. Appeal was disposed of, maintaining the original attachment order.
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• Adjudication Reveals Substantial Penalty Reduction for Bank's Cash Transaction Reporting Violations Under PMLA Section 12(1)(b)

  Case-Laws - AT : AT adjudicated a money laundering case involving failure to file Cash Transaction Reports (CTRs) for interconnected transactions exceeding Rs. 10 lakhs monthly. The tribunal reduced penalties from initial assessments, imposing a consolidated penalty of Rs. 50,000 for non-reporting of 9 CTRs and an additional Rs. 10,000 for ineffective internal transaction monitoring mechanisms. The ruling affirmed contravention of PMLA Section 12(1)(b) and PML Rules, while adopting a relatively lenient approach by substantially mitigating the original penalty quantum. Appeal was disposed of with directed monetary penalties against the appellant bank.
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SEBI

• SEBI Revamps Depository Regulations with Cooling-Off Periods for Directors and Stricter Governance Protocols

  Notifications : SEBI amended the Depositories and Participants Regulations, 2025, introducing significant governance modifications for depositories. The amendment establishes new provisions regarding non-independent director appointments and public interest director transfers, mandating a cooling-off period for inter-depository appointments. Specifically, non-independent directors can be appointed to recognized stock exchanges or clearing corporations only after a predetermined cooling-off period, with prior SEBI approval. Public interest directors are now subject to similar inter-organizational transfer restrictions, ensuring regulatory compliance and preventing potential conflicts of interest in financial institutional governance.
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Service Tax

• Tax Authority's Extended Limitation Period Upheld: Suppressed Transactions and Non-Cooperation Justify Investigative Actions Under Service Tax Rules

  Case-Laws - HC : HC finds no jurisdictional error in the tax authority's invocation of extended limitation period. The petitioner, who surrendered service tax registration, failed to disclose transactions in ST-3 and did not cooperate during investigation. The court prima facie determines that the taxing authority's view of suppression is justified, as critical facts emerged only through investigation. The demand-cum-show cause notice and subsequent order remain valid, with no interference warranted on jurisdictional grounds. Application disposed of accordingly.
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• Legal Practitioner Wins Service Tax Exemption for Professional Income, Preserving Tax Rights for Other Revenue Streams

  Case-Laws - HC : HC ruled in favor of the petitioner, a legal practitioner, quashing the service tax demand notice for income derived from legal services. The court held that as an individual lawyer, the petitioner is exempted from service tax levy on professional income. However, the department retains the right to assess and levy service tax on income from house property, as disclosed in the petitioner's income tax returns. The writ petition was disposed of with specific directions allowing potential future taxation on non-legal income sources.
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• Tax Relief Scheme Prevails: Technical Portal Issues Cannot Negate Taxpayer's Good Faith Compliance with SVLDRS

  Case-Laws - HC : HC allowed the petition challenging tax authority's actions under SVLDRS. The court found technical portal glitches prevented timely payment did not invalidate the petitioner's compliance. Consequently, the court quashed the impugned notices blocking the petitioner's bank account and directed respondents to accept the payment made and issue a discharge certificate within four weeks, relying on precedential judgment in a similar case involving procedural technicalities in scheme implementation.
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• Foreign Parent Company Royalty Payments Taxed Under Reverse Charge Mechanism Despite Revenue Neutrality Claims

  Case-Laws - AT : CESTAT upheld the service tax demand on royalty payment to foreign parent company under Reverse Charge Mechanism. The tribunal rejected the appellant's revenue neutrality defense, finding it insufficient to nullify the tax demand. While acknowledging substantial compliance by the appellant, who paid the unpaid service tax before the show cause notice, the tribunal modified the penalty from maximum permissible to Rs. 10,00,000. The core legal principle affirmed was that revenue neutrality cannot be a generic defense against statutory tax obligations. The appellate order was largely sustained with a partial modification of the penalty quantum.
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Central Excise

• Manufacturer Faces Duty Penalties for Undeclared Goods Production Involving Clandestine Removal of Excisable Materials

  Case-Laws - AT : CESTAT upheld duty and penalty demand against manufacturer for clandestine goods removal. The tribunal found substantial evidence through private records, managing director's admissions, and corroborative dealer statements demonstrating unaccounted production and clearance of excisable goods. Despite appellant's objections regarding self-incriminating statements, the tribunal determined preponderance of probability sufficiently established clandestine manufacture and irregular credit availment. The evidence, including unrecorded raw material usage and undeclared sales proceeds, substantiated the department's allegations. Consequently, the appeal was dismissed, confirming the original adjudicating authority's order with minimal modifications.
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• Pre-Budget Stock Exempted from Additional Excise Duty: Retrospective Levy Rejected, Manufacturers Protected from Unexpected Financial Burden

  Case-Laws - AT : CESTAT adjudicated a dispute regarding Additional Excise Duty (AED) imposed on pre-budget stock. The tribunal followed established judicial precedents affirming that new levies cannot be retrospectively applied to goods manufactured before the levy's introduction. Based on consistent rulings by SC and various HCs, the tribunal held that AED cannot be imposed on existing stock at the time of levy's implementation. The appellant was exempted from paying AED on finished goods manufactured prior to the new levy, with the duty's applicability contingent upon goods' removal from the factory after the levy's introduction. Consequently, the impugned order was set aside, and the appeal was allowed.
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Case Laws:

• GST

• 2025 (5) TMI 150
  Cassification of services provided by the petitioner to foreign affiliates under the Integrated Goods and Services Tax Act, 2017 (IGST Act) - pre-sale and post-sale services provided by the Petitioner to its Foreign Affiliates is in the nature of intermediary under Section 2 (13) of the IGST Act or not - petitioner is an intermediary or not - refund of unutilized Input Tax Credit (ITC) - export of services or not - HELD THAT:- A perusal of the customer services agreements clearly indicates that the same expressly restricts the petitioner from acting as an agent and precludes it from entering or negotiating contracts for sale of products; the services provided by the petitioner is on principal-to-principal basis on the petitioner s own account and the petitioner is not acting in the capacity of an agent or broker coupled with the fact that the agreements specifically provide and stipulate that agency was not being created under the Agreements, thereby leading to the unmistakable / sole conclusion that the necessary ingredients constituting the petitioner as an intermediary was clearly not fulfilled in the facts and circumstances of the instant case. Section 2 (13) of the IGST Act defines intermediary makes it clear that the same requires two distinct services i.e., one between the principal and third person and the second between agents / intermediary and principal; it follows therefrom that where a person himself performs the main supply as a sub-contract, he cannot be construed or treated as an intermediary between two parties; this aspect has been clarified at paragraph 3.5 of the aforesaid Circular which states that the supplier of main service sub-contracts the same to sub-contractors, such sub-contractors providing such main service on their own account cannot be deemed to be arranging or facilitating the main supply between the supplier and customers, as a result of which, such sub-contractors would not qualify as an intermediary . In the instant case, the main supply of customer support services to be provided by the foreign affiliates is entirely sub-contracted to the petitioner who provides customer support services and accordingly, there is only one main supply which is being supplied and the necessary ingredients of two existence of two distinct supplies is neither satisfied nor fulfilled; as stated supra, that apart from the fact that there is no privity of contract between the petitioner and Amazon consumer entities / selling partners, operating and selling goods to end customers of the Amazon consumer entities, there is also no privity of contract between the petitioner and end customers and as such, the contentions urged on behalf of the respondents cannot be accepted on this ground also. It is pertinent to note that in order to constitute an intermediary , it is imperative that the nature of the second service from the agent to the principal ought to be that of arranging or facilitating the service between principal and third person and the activity undertaken by the intermediary should satisfy the natural meaning of the terms arranging or facilitating , the provision of another person s service, especially when performance of the very service cannot be construed or treated to fall within the scope of the phrase arrange or facilitate the same service - in the instant case, the material on record clearly establishes that the petitioner cannot be said to be facilitating or arranging supply of services, since the meaning of facilitation / arrangement cannot be extended to cover the subject agreements, where the petitioner himself undertook to perform / execute the main service, particularly when the main service allegedly being facilitated separately / independently by the petitioner has not been identified by the respondents whose contention cannot be accepted on this ground also. Conclusion - The petitioner is not an intermediary under Section 2 (13) of the IGST Act in terms of the Circular dated 20.09.2021 and the Customer support services provided by the petitioner to foreign affiliates qualify as export of service under Section 2 (6) of the IGST Act and consequently, the impugned orders and show cause notice deserve to be quashed. The impugned Order-in-Appeal at Annexure-A dated 04.01.2024 passed by the 1st respondent insofar as it relates to rejection of the refund claim of the petitioner pertaining to the issue of intermediary / intermediary services is hereby quashed - The impugned show cause notice at Annexure-M dated 01.09.2022 issued by the respondents seeking recovery of refund sanctioned in relation to customer support services in favour of the petitioner is hereby quashed - petition allowed in part.

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• 2025 (5) TMI 149
  Refund of unutilized input tax credit - refund application filed by the petitioner was rejected by the impugned order dated 24.08.2023 relying upon Circular dated 10.11.2022 on the ground that new formula can apply only to refund applications filed after 05.07.2022 - it was held by High Court that The impugned order dated 24.08.2023 is hereby quashed and set aside. The Circular No. 181/22 dated 10.11.2022 so far as it clarifies that the amendment is not clarificatory in nature is quashed and set aside and it is held that the Notification No. 14/2022 is applicable retrospectively as the amendment brought in Rule 89 (5) of the Rules is curative and clarificatory in nature and the same would be applicable retrospectively to the refund or rectification applications filed within two years as per the time period prescribed under section 54 (1) of the Act. HELD THAT:- No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is, accordingly, dismissed.

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• 2025 (5) TMI 148
  Seeking release of goods under protest - issuance of Form- GST MOV-09 - penalty order under Section 129 of the GST Act, 2017 - HELD THAT:- From perusal of the record, it is apparent that the amount was deposited by the petitioner under protest, as is reflected from Annexure-4 contained in the Form-GST DRC-03. Once the amount has been deposited under protest and even if the same was not deposited under protest, the authorities cannot shy away from passing order of penalty under Form GST MOV-09. Unless the penalty order is passed by the authorities, the parties are deprived of challenging the action of the respondents and therefore, they cannot be deprived of their right to file appeal. Consequently, the petition is allowed . The order dated 28.11.2024 (Annexure-7) is quashed and set aside and the respondent No. 3 is directed to pass an order in Form GST MOV- 09.

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• 2025 (5) TMI 147
  Compliance of the Show cause notice with the statutory provision - Section 73 of the Central/West Bengal Goods and Services Tax Act, 2017 - delay in uploading the demand in Form GST DRC-07 on the portal - rectification application under Section 161 - opportunity of hearing - HELD THAT:- In this case, it would be apparent from the above that a show cause had been issued and the petitioner did not respond to the said show cause within the time specified in the show cause. Having regard thereto, I am of the view that the aforesaid contention raised by Mr. Ray, in Court is an afterthought, especially when the response to the show-cause was filed more than two months after the date for filing the response had expired. No explanation for the delayed response was noted in the rectification application. There appears to be no valid ground for invoking Section 161 of the said Act. The petitioner has an alternative remedy in the form of an appeal, the petitioner however, chose not to invoke such remedy and after more than a year from the date of passing of the order under Section 73 of the said Act, the instant writ petition has been filed that too after more than a month from the date of the order of rejection of the rectification application. Although Mr. Ray would contend that the respondents had decided the petitioner s rectification application without giving an opportunity of hearing, I am of the view that in the given facts the same cannot justify the petitioners belatedly approaching this Court. The petitioner cannot be permitted to frustrate the adjudicatory process as provided for in the scheme of the said Act. The writ petition fails and the same is accordingly dismissed.

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• 2025 (5) TMI 146
  Show Cause Notice (SCN) issued on multiple addresses - Section 74 of the Central Goods and Services Tax Act, 2017 - original SCN not received and also not uploaded on the GST portal - confusion caused qua the addresses - HELD THAT:- It is made clear that if the email is received and the personal hearing is not attended, no further opportunity shall be granted to the Petitioner Federation. Only one opportunity is being granted in the unique facts of this case. The limitation in respect of passing of the order pursuant to the SCN, shall not apply in the facts of this case as well. The Petitioner is directed to get all its details corrected on the GST portal within 15 days failing which the Department would not be blamed for future notices being sent at the wrong address. Insofar as, the SCN having been issued by the Commissionerate West, in view of the East Patel Nagar address, the Petitioner gives up its challenge, if any, to the jurisdiction. The said show cause notice shall now be adjudicated by the Commissionerate, North in terms of the Karol Bagh address of the Petitioner. The writ petition stands disposed of in above terms. Pending applications, if any, are also disposed of.

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• 2025 (5) TMI 145
  Detention of goods on incorrect grounds - goods in conveyance were different from those mentioned in accompanying documents, despite the physical verification report (MOV-04) indicating no discrepancy between the goods and the documents - HELD THAT:- On a pointed query put to the State that as soon as H.S.N. Code is fed in the column of description of goods as per invoice, whether the goods appear as per the code or it has to be fed, the answer was in negative i.e. the goods have to be fed manually. The purpose of filling MOV-04, at the time of physical verification, is to find the correctness of the goods in transit from the accompanying documents and if the officer while preparing the MOV-04 did not find any change or difference in goods that of mentioned in the accompanying documents, the same cannot be permitted at a later stage for taking a different stand, as mentioned in the present case. In view of the facts as stated above as well as in the light of the judgment in the Jitendra Kumar Vs. State of U.P. and Another [ 2024 (1) TMI 73 - ALLAHABAD HIGH COURT] , the impugned order cannot be sustained in the eyes of law and the same is hereby quashed. The writ petition is allowed , accordingly.

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• 2025 (5) TMI 144
  Validity of issuance of a Summary of Show Cause Notice (GST DRC-01) without issuance of a formal Show Cause Notice under Section 73(1) of the Central Goods and Services Tax Act, 2017 (CGST Act) - HELD THAT:- The issue raised in Construction Catalysers Pvt. Ltd. [ 2024 (10) TMI 279 - GAUHATI HIGH COURT] ] and the present petition is similar and therefore, the determination made in Construction Catalysers Pvt. Ltd (supra), shall accordingly cover the present petition and as agreed to by the learned counsel for the parties, the present writ petition stands disposed of by setting aside the impugned order dated 28.04.2024 and the summary of show cause notice dated 13.12.2023 in terms of the determination and conclusion arrived at para 29 of Construction Catalysers Pvt. Ltd (supra).

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• 2025 (5) TMI 143
  Demand of differential Input Tax Credit (ITC) - imposition of interest and penalty f or the commission of the offence under Section 122(2)(a) r/w Section 73(9) of CGST /TNGST Act 2017 and Section 20 of IGST Act, 2017 - issuance of Form GST DRC - 07 - HELD THAT:- From perusal of the assessment order, we find that the reply of the assessee / the appellant herein been considered and found neither the judgments relied by him is applicable to his case nor the contention that the mismatch was due to payment under different head wrongly is correct. The respondent herein, after discussing the law and the facts of the case, at paragraph 10 of the order, had assigned reason for not accepting the explanation given. In the order, the assessee is informed about the right of appeal available to him under the statute. While so, when alternate efficacious remedy provided under the statute, the appellant, without availing the remedy under the statute by filing the appeal after deposit of 10% of the duty and penalty demanded, to circumvent the condition, had approached the High Court invoking the writ jurisdiction. We also find that, the statute provides for rectifying the defective or erroneous filing of return under wrong provision/ Form. The appellant had not come forward either prior to the show cause notice or after it or during the detailed scrutiny of his account to rectify the account. Only after the issuance of Show Cause Notice, taking cue from the judgment of the High Court and the circulars issued regarding limitation for rectification, a defence of wrong payment and withdrawal is put forth. Even now, the appellant is not left without remedy. The Learned Single Judge has preserved his right of appeal and the grounds of appeal to be tested before the Appellate Authority. Therefore, we find no reason to interfere in the order of the learned single Judge passed in W.P(MD)No.6457 of 2025, dated 11.03.2025. Hence, the writ appeal stands dismissed.

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• 2025 (5) TMI 142
  Cancellation of the petitioner s GST registration - discrepancies found during physical verification of the business premises - HELD THAT:- Once the fact was recorded as to whether the business activities were being undertaken, no contrary material has been brought on record, the impugned orders cannot be sustained in the eyes of law. The record shows that the material used against the petitioner for cancellation of registration, no notice was ever put to the petitioner, rather in the counter affidavit, a statement has been made that as per Rule 25, reports are available on GST Portal in Form GST REG-30. But in the show cause notice, no mention has been made and thus, as per form- GST REG-30 the action is taken against the petitioner. Therefore, on this ground also, impugned order cannot be sustained. Accordingly, the impugned orders are hereby quashed. Thus, the matter requires re-consideration. In the result, the writ petition is allowed .

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• 2025 (5) TMI 141
  Validity of Demand-cum-Show Cause Notice (SCN) and the subsequent Order-in-Original - proper jurisdiction under the Central Goods and Services Tax Act, 2017 (CGST Act) - fake firms and entities were created for the purpose of availing fraudulent ITC - notices issued under Section 73 and 74 - HELD THAT:- It is held that the jurisdiction having been established by the said notifications and the opportunity for personal hearing having been granted, the Petitioner ought to be relegated to the Appellate Authority for availing the appellate remedy under Section 107 of the Central Goods and Services Act, 2017. Since the reply has been filed and the Court has been satisfied upon the issue of jurisdiction, the Petitioner is relegated to avail of the appellate remedy before the Appellate Authority. All contentions of the Petitioner are kept open. Accordingly, the present writ petition is disposed of in above terms. All the pending applications, if any, are also disposed of.

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• 2025 (5) TMI 140
  Challenged the order and corresponding DRC-07 of the same date passed under Section 73(9) of the Bihar Goods and Services Tax, 2017 ( the BGST Act, 2017 ) - breach of the statutory mandate of giving an opportunity of hearing - HELD THAT:- Having gone through the uncontroverted averments made in the impugned order with regard to affording opportunity of hearing to the petitioner, this Court is of the considered opinion that the plea of the petitioner of the order having been passed in violation of the statutory requirement of giving an opportunity of hearing cannot succeed. Finding no jurisdictional error in the impugned order, this Court declines to entertain the writ application. Liberty would, however, be available to the petitioner to avail it s remedy if any available to the petitioner in accordance with law. The writ petition stands disposed of accordingly.

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• 2025 (5) TMI 139
  Entitlement to claim ITC - petitioner wants to place the additional documents before the appellate Authority for due consideration in regard to the claims of ITC - HELD THAT:- The Apex Court in State of Karnataka vs. Ecom Gill Coffee Trading Private Limited, [ 2023 (3) TMI 533 - SUPREME COURT ], had required that for claiming benefit of ITC the documents have to be placed before the authorities concerned in regard to the various transactions which are made between the parties. Having regard to the judgment of the Apex Court rendered in Ecom Gill Coffee Trading Private Limited, these writ petitions are being partly allowed setting aside the order dated 04.03.2023 passed by Additional Commissioner, Grade-II (Appeal) I, State Goods and Service Tax, Agra and remanding back the matter requiring the appellate Court to grant time to the petitioner to place all the required documents as per the judgment of the Apex Court for consideration of the claim of ITC, and decide the appeals thereafter within a period of three months.

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• 2025 (5) TMI 138
  Challenged the order passed beyond the statutory period under Section 73 of the West Bengal/Central Goods and Services Tax Act, 2017 - invoking powers under Section 168A - reversal of input tax credit - retrospective cancellation of registration of three suppliers of the petitioner - force majeure - HELD THAT:- In the instant case, however, the respondents by invoking the powers under Section 168A of the said Act through two several notifications dated 31st March, 2023 and 28th December, 2023 had extended the date of passing of the order under Section 73(9) of the said Act in respect of the financial year 2019-20 up to 31st day of August, 2024. According to she, there was no force majeure condition prevailing by invoking the aforesaid provision and extending the period and on such ground not only the order passed under Section 73(9) of the said Act is unsustainable, the above notifications dated 31st March, 2023 and 28th December, 2023 are also bad and cannot be sustained. On a show cause being issued, the petitioner had duly responded to the same and had categorically stated that the purchases made with the suppliers whose registration had been cancelled retrospectively had been done in regular course of business and in good faith. To substantiate the same not only invoices of the above suppliers, but ledgers and eway bills for the relevant period in respect of the aforesaid three suppliers were also disclosed. By placing reliance on the order passed under Section 73(9) of the said Act, she would submit that although the proper officer had accepted the explanation given by the petitioner in respect of two suppliers, however, in respect of one particular supplier, namely, Shree Shyam Iron Steel Trading Company without assigning any reason the reversal of input tax credit was upheld. This according to her is a failure to exercise jurisdiction. Thus, she would submit that the order passed by the proper officer is not sustainable and should be set aside and pending hearing of this writ petition, the same should be stayed. Having regard thereto, let this matter stand adjourned and be taken up for further consideration on 28th April, 2025. Until further order, the impugned order shall remain stayed till the next date.

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• 2025 (5) TMI 137
  Extension of the time limit under Section 73 - Violation of statutory provision - notice issued - non-compliance to sub-section (8) of Section 73 of C.G.S.T. Act, 2017 (Act, 2017) - time-barred under the limitation provisions of Section 73(9) and (10) of the CGST/BGST Act, 2017 - principle of natural justice - HELD THAT:- No doubt, initially deadline was on or before 31.12.2021 and the same has been extended by virtue of circular dated 31.03.2023 (Annexure P/5). Therefore, the State respondents have right to initiate proceedings for the assessment of the year 2017-18 till 31.12.2023. In this regard, we have to take note of that the notice under Section 73 or Act, 2017 has been issued on 25.09.2023. Therefore, it is within the time limit. While issuing notice under Section 73(i) or Act, 2017 read with rule 142(i) whether State respondents have given thirty days time to answer or not. In this regard, it is evident from notice dated 29.09.2023, date for submission of reply has been given 05.10.2023 and so also for hearing on 05.10.2023. Thirty days lapses on 28.10.2023. Therefore, issuance of notice dated 29.09.2023 is not in accordance with sub-section 8 of Section 73 of Act, 2017. On this score, the petitioner has made out a case. Accordingly, the impugned actions dated 30.11.2023 are set aside. Matter is remanded to the concerned authority to issue a corrigendum to 29.09.2023 notice insofar as extending time limit for submission of reply and also date of hearing strictly in accordance with sub-section 8 of Section 73 or Act, 2017. The above exercise shall be completed within a period of three months from the date of receipt of this order. Remaining contentions or reliefs sought by the petitioner are left open to be urged before the authorities or before this Court in future. Thus, the present Writ Petition No. 14239 of 2024 stands allowed in part.

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• 2025 (5) TMI 136
  Wrongful availment of Input Tax credit - rectification of GST 3B returns for February and March 2018 to correct the inadvertent inter-mingling of input tax credit (ITC) claimed under IGST and Cess heads - whether the petitioner is fully aware of the case that it is required to meet and is being taken by surprise by not making it aware of the adverse material or the case it has to meet or is it only that the petitioner has tried to take advantage of a technical defect? - HELD THAT:- Once, it is concluded that the petitioner is fully aware of the case it is required to meet, then, there are no hesitation to conclude that the petitioner is mainly using this argument as a device to stall the proceedings. Even otherwise, the petitioner is required to show and establish that non-furnishing of the notice has caused it prejudice and that this has prevented it from effectively defending itself. After all, in a matter like the instant one, this Court cannot be oblivious that where the procedural and/or substantive provisions of law embody the principles of natural justice, the infraction per se does not lead to invalidity of the order passed. The prejudice must be caused to the litigant except in the case of a mandatory provision of law, which is conceived not only in individual interest, but also in public interest. This issue has been considered in detail by a three Judge Bench of the Hon ble Supreme Court of India in case titled as State of Uttar Pradesh vs. Sudhir Kumar Singh and Others [ 2020 (10) TMI 746 - SUPREME COURT ], wherein, after taking into consideration the law on the subject, the Hon ble Supreme Court has laid down that it is felt that a fair hearing would make no difference meaning that a hearing would not change the ultimate conclusion reached by the decision- maker then no legal duty to supply a hearing arises. Conclusion - The petitioner very well knows the case it requires to meet, as the same has been elaborately spelt out in the audit report and, therefore, there are no hesitation to conclude that no prejudice has been caused to the petitioner by non-issuance of the notice as the petitioner does not dispute the case against it. There are no merit in this petition and the same is accordingly dismissed,.

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• 2025 (5) TMI 135
  Cancellation of registration - SCN issued - no inspection report has been given to the Petitioner in pursuance to such request made by them - GST portal was being accessed by their accountant and the said accountant did not inform the Petitioner of the SCN having been uploaded - HELD THAT:- Since the SCN has now been served upon the Petitioner, let the Petitioner file a detailed reply along with the documents, if any, in support of its case to show that it is working at the principal place of business. Accordingly, the Impugned Order dated 07th November, 2024 shall be set aside. In the meantime the Petitioner s access to the GST portal shall be made available so that the Petitioner can upload the reply and the documents to the SCN. The said reply shall be uploaded by the Petitioner within two weeks. Accordingly, the present writ petition is disposed of in these terms.

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• 2025 (5) TMI 134
  Application for the release of conveyance and the goods detained - purchase of the goods alongwith Tax Invoice and E-way bills - HELD THAT:- Considering the submissions, issue Notice returnable on 24.04.2025. To be heard with Special Civil Application No. 8353 of 2022. By way of ad-interim relief, the respondent-authority shall release the conveyance and the goods in question on deposit of Rs. 5 Lakh by the petitioner without prejudice to the rights and contentions of the petitioner to be raised in this petition along with a bond of the value of the goods amounting to Rs. 13,74,812/-.

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• 2025 (5) TMI 133
  Refund rejection order of ITC on export of goods without payment of integrated tax - violation of the principles of natural justice - whether order of refund rejection order dated 05.12.2023 in which extraneous material has been taken into consideration or not? - HELD THAT:- As is evident from the show-cause notice read with the petitioner s explanation. Joint Commissioner of State Tax, Kishanganj Charge, Kishanganj, Bihar is exercising quasi-judicial function under the GST Act. He has taken extraneous material while passing order on 05.12.2023 and the same has been appreciated by the Appellate Authority in its order dated 22.07.2024. Petitioner has made out a case so as to interfere with the impugned action of the respondents. Accordingly, so called refund rejection order of the Joint Commissioner of State Tax, Kishanganj Charge, Kishanganj, Bihar treated as a further show-cause notice to the petitioner and petitioner is hereby directed to furnish his explanation along with documents, if any, within a period of eight weeks from the date of receipt of this order. Thereafter, Joint Commissioner of State Tax, Kishanganj Charge, Kishanganj, Bihar is hereby directed to pass a detailed speaking order while taking note of the principle laid down by the Hon ble Supreme Court in the cited decision and proceed to consider each of the contention to be raised by the petitioner against the treated show-cause notice dated 05.12.2023. CWJC No. 19159 of 2024 is allowed in part. CWJC No. 18690 of 2024 and CWJC No. 18761 of 2024 are allowed in part in terms of order passed in CWJC No. 19159 of 2024, while set aside the Appellate Authority order and so called refund rejection order treated as show-cause notice.

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• 2025 (5) TMI 132
  Challenge to order of determination of tax under Section 73 of the CGST Act, 2017/ KSGST Act, 2017 - time limitation - HELD THAT:- In the instant case, it is evident from Ext.P4 memorandum of appeal filed before the appellate authority that petitioner s specific case was that he was unaware about the show cause notice or even the order, both of which were issued prior to January, 2024. This Court has already held in the decision in Ramanattu Motor Corp s case [ 2025 (2) TMI 1091 - KERALA HIGH COURT ] that such uploading of notices and orders for the first time in the tab for additional notices and orders cannot amount to proper service of notice without appropriate instructions. In the instant case, petitioner s contention was that the show cause notice as well as the order of determination of tax were both uploaded only in the tab for additional notices and orders and hence he was unaware of the order. The appeal filed by the petitioner could not have been dismissed on the ground of delay. Therefore, the impugned order is liable to be set aside and the appellate authority should be directed to consider the appeal on merits, treating the appeal as having been filed within time. Petition allowed.

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• Income Tax

• 2025 (5) TMI 131
  Revision u/s 263 - exemption u/s 54F - As decided by HC [ 2024 (1) TMI 1458 - GUJARAT HIGH COURT] Tribunal correctly allowed the appeal of the assessee and set aside the order passed by the PCIT u/s 263 as prerequisite to exercise jurisdiction by the PCIT u/s 263 of the Act is that the assessment order is erroneous and prejudicial to the interest of the Revenue and for that both the conditions are required to be fulfilled - HELD THAT:- No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is, accordingly, dismissed. Pending application(s), if any, shall also stand disposed of.

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• 2025 (5) TMI 130
  Rejection of petitioner s declaration made in the prescribed form (Form 1) under DTVSV Scheme - rejection remarks as uploaded on the portal indicate that the petitioner s declaration was disregarded as it did not refer to the pending writ petition - petitioner contends that the non-disclosure of the details of the pending writ petition before this court was neither essential nor material. He submitted that the writ petition would have been rendered infructuous on settlement of the appeal, which was pending before the CIT(A) . As concluded petitioner had not taken into account that the amount payable would be 110% of the disputed tax. And second, that the AAR had not determined the income arising out of capital gains, which is chargeable to tax; therefore, the dispute stemming from the decision of the AAR was not covered by the DTVSV Scheme - HELD THAT:- As petitioner had unequivocally waived its rights whether direct or indirect to seek or pursue any remedy or any claim in relation to the tax arrears, which may otherwise have been available. Thus, in any event, the petitioner would be precluded from pursuing its writ petition, which is pending before this court. We say so because the petitioner s grievance regarding the disfavourable advance ruling the redressal of which is sought by petitioning this court would not survive after settlement of the subject dispute pending in the appeal filed before the CIT(A). It is also relevant to note that the said undertaking was in terms of Sub-section (4) of Section 91 of the Finance (No. 2) Act, 2024. We may also take note of Sub-section (3) of Section 91 of the said Act which, inter alia, requires the declarant to withdraw its writ petition filed before the High Court or the Supreme Court in respect of any order in respect of tax arrears . The petitioner had expressly confirmed that it would withdraw the writ petition Pending before this court if the certificate was issued by the Designated Authority (Form 2). We are also unable to sustain the Designated Authority s finding that the date of petitioner s declaration is required to be construed as 07.02.2025 and not 23.12.2024. As held hereinbefore, the petitioner s declaration filed on 23.12.2024 could not be treated as non est and ignored. Thus, the Designated Authority was required to issue a certificate determining the amount payable by the declarant in accordance with the provisions of the DTVSV Scheme within fifteen days of the date of receipt of the declaration. Admittedly, no such order was passed by the Designated Authority within the period as prescribed under Section 92 (1) of the Finance (No. 2) Act, 2024. There is no cavil that the Designated Authority had refrained from passing such an order on account of its objections, including failure to mention that the writ petition preferred by the petitioner was pending before this court, in the declaration - We do not find the said non-disclosure to be material or of any significance in the given facts and circumstances of the case. Once the petitioner had filled up the field by entering CIT(A) in the relevant column regarding where dispute was pending; it could not fill in the details of the writ petition under the same column of Form no. 1. The settlement of the dispute pending before the CIT(A) in the petitioner s appeal would also be dispositive of the petitioner s writ petition pending before this court. However, to obviate any such objection on the part of the Designated Authority, the petitioner had once again filed a declaration by furnishing revised Form no. 1 which mentioned the pending writ petition albeit in another column. The revised Form no. 1 was clearly in aid of the declaration made earlier on 23.12.2024 and thus was necessarily be read to substitute the earlier declaration. We are convinced to say so for the reasons that the declaration filed on 23.12.2024 could not be construed as non est or not having been made for the reasons as stated herein before. At the stage of reopening of the assessment, it is not ascertained whether the income of the assessee chargeable to tax has escaped assessment. The quantum of any such income and tax payable on the same is yet to be determined; the same is determined by the AO at the culmination of the proceedings. There is no determination of the disputed income , disputed tax , tax arrear , disputed penalty and disputed interest at the stage of issuance of notice under Section 148 or 148A of the Act. Consequently, it would be impossible to determine the amount payable for settlement of the dispute under DTVSV Scheme which in terms of Section 90 of Finance (No. 2) Act, 2024 is based on the quantum of disputed tax , disputed penalty , disputed interest or disputed fee. It is in this context that the FAQ No. 26 of CBDT Circular No. 12 of 2024 dated 15.10.2024 clarifies that in such cases DTVSV Scheme would be inapplicable. The FAQ 26 expressly indicates that it is in respect of writ petitions challenging notices issued under Section 148 or 148A of the Act. More importantly, the principle on the basis of which the clarification is rendered that the disputed tax is not determined is wholly inapplicable in the facts of the present case. Thus, the present petition is allowed. The Designated Authority is directed to process the petitioner s declaration and determine the amount payable by the declarant in accordance with the provisions of the DTVSV Scheme by construing the date of declaration filed by the petitioner.

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• 2025 (5) TMI 129
  Income deemed to accrue or arise in India - bandwidth charges paid to overseas telecom service providers - FTS or royalty - Scope of clear definition of process in Explanation to introduced by the Finance Act, 2012 - Whether the beneficial provision of the DTAA override retrospective amendments in domestic tax law, particularly when such amendments are clarificatory in nature and aim to bring clearly to the taxation of process and equipment under section 9 (1) (vi) of the Income Tax Act, 1961 ? HELD THAT:- Undisputedly, the questions raised are covered by the earlier decisions of this court in New Skies Satellite BV 2016 (2) TMI 415 - DELHI HIGH COURT] and Telstra Singapore Pte. Ltd. 2024 (7) TMI 1340 - DELHI HIGH COURT] Thus, the charges paid for bandwidth to overseas telecom service providers cannot be construed as royalty in the meaning of Section 9(1)(vi) of the Act. Decided in favour of assessee.

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• 2025 (5) TMI 128
  Dismissal of appeal by CIT(A) as infructuous as assessee had not paid the amount equal to the advance tax as per section 249(4)(b) HELD THAT:- AO had clearly mentioned that the assessee had filed his return of income in response to the notice issued u/s. 148 of the Act. In such circumstances, the finding of the CIT(A) that the assessee had not paid the admitted tax amount as per section 249(4)(b) of the Act is not correct. The provision 249(4)(b) would attract only in cases where the assessee had not filed their return of income and not in other cases. We find that the order of the Ld.CIT(A) is not in accordance with the provisions of the Act and therefore we set aside the order of the CIT(A) and remit the issue to his file to decide the appeal on merits -Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (5) TMI 127
  Revision u/s 263 - investment made in purchase of property - as alleged no inquiry was conducted by AO in passing assessment order u/sec.147 r.w.s.144B - PCIT concluded as per the insight portal information, the assessee had purchased two properties at Sarath City Mall , however, while completing the assessment u/sec.147 of the Act, the AO had considered only one sale deed and made addition u/sec.69 HELD THAT:- Whether the assessment order is erroneous in so far as it is prejudicial to the interest of the revenue is subjective satisfaction of the PCIT. In case the PCIT observes that, the order passed by the Assessing Officer is erroneous which caused prejudicial to the interest of the revenue and such finding is supported by necessary evidences and reasons, then, the PCIT can invoke jurisdiction u/sec.263 of the Act and set-aside the assessment order. Although, both sale deeds are available before the Assessing Officer, but, the Assessing Officer has considered only one sale deed and ignored the other sale deed even though there is no disclosure of said investment for purchase of property by the assessee. From the above, it is undisputedly clear that, the Assessing Officer has passed order u/sec.147 r.w.s.144B of the Act without conducting proper enquiry, which, he ought to have carried-out and, therefore, PCIT has rightly exercised his revisionary powers in light of Explanation-2 to section 263 of the Act. Therefore, in our considered view, the assessment order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the revenue and thus, there is no error in the reasons given by the PCIT to set-aside the assessment order by exercising powers conferred u/sec.263 - Appeal of the assessee is dismissed.

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• 2025 (5) TMI 126
  Addition u/s 68 - mismatch of cash book with the bank statement - commission income earned by the assessee company on transactions in shares - HELD THAT:- Both issues regarding whether assessee/appellant company has acted broker at relevant time or not and alleged mismatching of Cash books requires proper verification/examination and for this purpose, it is expedient to remit the issues back to the Learned AO with the direction to decide afresh after providing effective opportunity to assessee/appellant.

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• 2025 (5) TMI 125
  Income from house property - claim of deduction of Mixed Use Charges paid by the assessee to the MCD - assessee has claimed the Mixed Use Charges paid as deduction from the rental income received from its tenants - HELD THAT:- As relying on Transmarine Corporation [ 2021 (1) TMI 38 - ITAT MUMBAI ] as per the factual aspect and provision of Section 23(1)(b) of the Act we are of the view that the assessee is entitled for claim of deduction of Mixed uses Charges paid to the MCD against the use of residential properties for commercial activities. Accordingly, we set aside the order of the Ld. CIT(A) and direct the Assessing officer to delete the addition. Appeal of the assessee is allowed.

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• 2025 (5) TMI 124
  Addition u/s. 69A r.w.s.115BBE - unexplained cash deposit - whether same was out of withdrawals made earlier from ICICI and other bank account? - HELD THAT:- Assessee had not demonstrated about the source of alleged drawings and expenditure incurred for education of his children and also observing that as against the withdrawal of Rs. 35.00 lakh but the cash deposit of Rs. 40.00 lakh. So there is a clear cut difference of Rs. 5.00 lakh. Assessee has purchased a property during the year under consideration but inspite of having cash in hand with him and has taken loan from Bank of Oman, Muscat. This fact also supports the fact that part of the funds withdrawn by it in December 2015 has been utilized for household needs and education of his children. Taking liberal approach and considering the facts and circumstances, we deem it proper to sustain the addition of Rs. 15.00 lakh as against Rs. 40.00 lakh made by the AO and find that the assessee must have incurred some amount of funds withdrawn by him in December 2015 for the purpose of education of his children as well as household drawings. We therefore give relief of Rs. 25.00 lakh to the assessee accepting part of the source of the alleged cash deposit from cash withdrawal made during December 2015 as well as accumulated savings of past so many years. Appeal of the assessee is partly allowed.

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• 2025 (5) TMI 123
  Addition of cash deposit in the bank account during the demonetization period u/s 69A r.w.s. 115BBE - Assessee submitted that the cash deposits were made out of collection from sale of agricultural produces - HELD THAT:- There is no dispute to the fact of holding of around 100 acres of agricultural land by the assessee. It is also an admitted fact that in the subsequent two assessment years i.e. assessment year 2018-19 and 2019-20 the assessee has disclosed the agricultural receipt of Rs. 49.12 lakh and Rs. 1.62 crore respectively. Assessee has reflected such receipts on various dates in the Cash Book. Under these circumstances, disregarding the entire agricultural receipts in our opinion is not justified. At the same time, when the assessee was having a bank account, we fail to understand as to why the assessee was holding so much cash in his hands. Therefore, the argument of assessee that no addition can be made also cannot be accepted. Since the assessee undisputedly was holding about 100 acres of agricultural land and in the two subsequent assessment years i.e. 2018-19 and 2019-20, the assessee has shown the gross receipts from the agricultural activity at Rs. 49.12 lakh and Rs. 1.62 crore respectively and nothing was brought by Revenue before us that such agricultural income was not accepted by the Revenue, therefore, disregarding the entire agricultural income of the impugned assessment year in our opinion is not justified. Disallowance of 20% of such gross receipts in our opinion will meet the ends of justice. Further, the provisions of section 115BBE of the Act in our opinion are not applicable to the facts of the present case since the receipts are from disclosed sources i.e. from agricultural activity only. Appeal filed by the assessee is partly allowed.

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• 2025 (5) TMI 122
  Levying surcharge of 37% on the tax calculated on the income of appellant trust at maximum marginal rate - HELD THAT:- As per the income tax rates slab 37% of surcharge is leviable in case income of the assessee exceeds Rs. 5,00,00,000/- Special bench in case of Araadhya Jain Trust [ 2025 (4) TMI 648 - ITAT MUMBAI ] has held that where the income of private district trust is chargeable to tax at maximum marginal rate, surcharge has to be computed on the income having reference to the slab rates prescribed in the Finance Act under the heading Surcharge on Income Tax appearing in Para A, Para 1 first schedule applicable to the relevant assessment year. Thus, we are inclined to hold that since the surcharge is leviable when the income of an assessee exceeds Rs. 50,00,000/- and the maximum rate of surcharge of 37% is leviable if income exceeds Rs. 5 crore and therefore as the income of the assessee is only Rs. 3,48,040/- CPC grossly erred in leving surcharge of 37% on the assessee. Therefore no surcharge was leviable for the year under consideration on tax payable by the assessee. Effective grounds of appeal raised by the assessee are allowed.

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• 2025 (5) TMI 121
  Addition u/s 69A - unexplained cash deposits during the demonetization period - HELD THAT:- The appellant has not submitted the copy of the return for earlier assessment years. Be that as it may, the appellant has also not been able to controvert the findings of the lower authorities in the proceedings before us. In absence of credible and corroborative evidence to support the claim of the opening cash balance as on 01.04.2015 and 01.04.2016, the explanation of the appellant cannot be accepted in toto. The principle of human probability is also clearly applicable to the facts of the appellant. The assessee is required to incur expenses for various personal and household purposes, which would cause depletion of the cash in hand available with the assessee. Since the return for AY.2016-17 was filed after demonetization, credence cannot be given to the cash in hand as on 01.04.2016 in absence of any corroborative and supporting evidence. It would be fair and reasonable if 50% of the cash in hand as reflected in the return of income filed for AY.2015-16 on 24.05.2016, before demonetization period, is allowed to assessee for the purpose of making deposit in the bank account. The cash in hand as on 01.04.2015 was Rs. 25,13,128/-. The AO is accordingly directed to delete Rs. 12,56,564/- and the remaining addition is upheld. Accordingly, the ground No.1 is partly allowed. Levy of tax u/s 115BBE of the Act at enhanced rate of tax @ 60% on the addition u/s 69A - The provisions of section 115BBE of the Act was enacted on 15.12.2016 and hence cannot be applied for the year under consideration. AO is directed to tax the addition at normal rate of tax and applicable surcharges and cess, if any. The assessee is, accordingly, allowed relief against taxing the addition at higher rate u/s 115BE of the Act. Hence, we allow the ground No.2 of the assessee.

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• 2025 (5) TMI 120
  Revision u/s 263 - assessee has claimed depreciation on the amount of intangible assets shown under the head intangible assets under development and since the same was not put to use, depreciation could not be claimed on it - HELD THAT:- The claim of depreciation is fully supported by the Hon ble Supreme Court, therefore, by no stretch of imagination the assessment order can be considered as prejudicial to the interest of the revenue . Supreme Court in the case of Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT ] held that the phrase prejudicial to the interest of Revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of Revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interest of Revenue. Thus, when the AO had adopted one of the courses permissible and available to him, and this has resulted in loss to Revenue; or two views were possible and the Assessing Officer has taken one view with which the CIT may not agree; the said orders cannot be treated as an erroneous order prejudicial to the interest of Revenue unless the view taken by the AO is unsustainable in law. CIT must give a finding that the view taken by the AO is unsustainable in law and, therefore, the order is erroneous. He must also show that prejudice is caused to the interest of the Revenue. This legal principle is also laid down in the case of CIT Vs. Max India Ltd.[ 2007 (11) TMI 12 - SUPREME COURT ] Thus, claim of depreciation on goodwill is an allowable expenditure and therefore even if no enquiry was made by AO on this account, the assessment order cannot be held as prejudicial to the interest of revenue as there was no loss of revenue in allowing the claim of depreciation. The judgements relied upon by the Ld.CIT DR are on the issue where no enquiry was made by AO, however, since we have hold that assessment is not pre-judicial to the interest of revenue, these are not applicable in such circumstances. Accordingly the assessment may be erroneous, but it is not prejudicial to the interest of revenue and therefore the provisions of section 263 of the Act cannot be invoked. Accordingly, we quashed the order of Ld. Pr.CIT passed u/s 263, disallowing the deprecation claimed on Goodwill. Thus, the grounds of appeal raised by the assessee are allowed.

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• 2025 (5) TMI 119
  Validity of assessment orders passed u/s 153(3) r.w.s. 254/143(3) as barred by limitation - Determination of date of start of limitation i.e. the date of service of Tribunal order on the Department. HELD THAT:- In the instant case, it is not in dispute that the Tribunal order dated 28.02.2019 was pronounced in the open court and thus, the CIT(DR) had knowledge of the said order. Further, the order was served on CIT(DR) on the same date. Thus, we find merits in Ground of appeal. As the assessment order was served on the office of the CIT(DR) on 28.03.2019, the time available to the AO for passing the assessment order was upto to 31.12.2019. Since, the assessment order was passed on 23.04.2021, consequently the same is barred by limitation and no-nest in the eye of law.

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• 2025 (5) TMI 118
  Reassessment notice after death of assessee - requirement of issuing notice to a correct person and not to a dead person HELD THAT:- We find that the issue is covered in the case of Devendra [ 2023 (7) TMI 694 - BOMBAY HIGH COURT] wherein it was observed that a notice issued in the name of a dead person is unenforceable in the eye of law. It was therein observed that the legal heirs are under no statutory obligation to intimate the death of the assessee to the department. It was further observed that a notice issued in the name of a dead person is also not protected either by the provisions of Section 292B of Section 292BB of the Act. Although, in the present case before us, the A.O. while framing the assessment had remained well conversant of the fact that the assessee had died, but even otherwise, we find that as observed in the case of Savita Kapila [ 2020 (7) TMI 441 - DELHI HIGH COURT] no duty is cast upon a legal representative to intimate the factum of death of an assessee to the Income-tax department. Also, it was observed that as the notice under Section 148, dated 31/03/2019 was issued to the deceased assessee after the date of his death, i.e 21/12/2018, thus, the jurisdictional requirement of service of notice u/s 148 of the Act was not fulfilled. We find that in the case of Sumit Balkrishna Gupta . [ 2019 (2) TMI 1209 - BOMBAY HIGH COURT] had observed that the requirement of issuing notice to a correct person and not to a dead person is not a mere procedural requirement but is a condition precedent to the impugned notice being valid in law. It was observed that a notice issued in the name of a dead person will neither be protected by the provisions of Section 292B nor Section 292BB of the Act. Decided in favour of assessee.

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• 2025 (5) TMI 117
  Unexplained money u/s 69A - unexplained cash deposits in her bank account during the demonetization period - HELD THAT:- We are unable to comprehend that as to how the mere absence of narrations mentioning the purpose for which cash was withdrawn from the bank accounts in the cash book can justifiably form a basis for rejecting the claim of the assessee that the said amount was thereafter utilized for making cash deposits in her bank account during the demonetization period. As the department had not placed on record any material that would conclusively dislodge and disprove the claim of the assessee that the cash deposit made in her bank account during the demonetization period was sourced from the cash balance that was available with her on 08.11.2016 i.e during the pre-demonetization period, therefore, we do not find any substance in the aforesaid observation of the CIT(A). CIT(A) s observation that the assessee had during the pre-demonetization period made the subject cash withdrawals in Tamil Nadu, which, thereafter were claimed by her to be deposited during the demonetization period in her bank account at Hyderabad is not only based on facts which are not discernible from the record but is rather based on his misconceived observations. The assessee had though stated that the cash withdrawals were made from her bank accounts as the same was required for incurring expenses towards traveling, stay, other local purchases of consumables and other on-site expenses that would be involved in execution of the contract for installation of equipment and kits in 112 hospitals in the State of Tamil Nadu in November, 2016, but had nowhere stated that the cash was withdrawn by her in Tamil Nadu. D.R on being confronted by the aforesaid infirmity in the observation of the CIT(A), failed to rebut the same. We thus, vacate the adverse inference drawn by the CIT(A) based on the aforesaid misconceive facts. Accordingly, in terms of our observations we vacate the addition that had been sustained by the CIT(A) - Decided in favour of assessee. Deduction of certain expenditure viz., Employees cost, Business promotion expenses and Travelling expenses - HELD THAT:- Ostensibly, a perusal of the reply filed/uploaded by the assessee in the course of the assessment proceedings on 11.10.2019, prima facie, reveals that she had filed certain documents supporting her aforesaid claim for deduction of expenses. We deem it fit to restore the matter to the file of the A.O. with a direction to re-adjudicate the aforesaid issue in the backdrop of the reply/details that were filed by the assessee along with her reply that was uploaded in the course of the assessment proceedings. As it has been the assessee s claim before the CIT(A) as well as before us that the subject expenses were incurred wholly and exclusively in the course of her business, therefore, the A.O. is directed to verify the same in the backdrop of the mandate of Section 37(1). Disallowance of 10% of sundry creditors/outstanding liabilities - HELD THAT:- The assessee though on the course of the assessment proceedings could not obtain a copy of the confirmation of the aforesaid creditor viz. M/s. DHR Holdings India Pvt. Ltd but had thereafter procured the same in the course of the proceedings before the CIT(A) and uploaded/filed it on 01.09.2022 i.e during the appellate proceedings with the first appellate authority. However, we find that there is no whisper in the order of the CIT(A) about the aforesaid confirmation from creditor that was filed/uploaded by the assessee in the course of the proceedings before him. We are of the view that as the confirmation of the aforesaid creditor has a strong bearing on verifying the authenticity of the said creditor, therefore, the CIT(A) ought to have taken cognizance of the same. Be that as it may, we are of the view that the matter in all fairness requires to be restored to the file of A.O. with a direction to re-adjudicate the issue after considering the confirmation of the aforementioned creditor. Disallowance of 10% of sundry creditors (less than Rs. 10,000/-) of Rs. 12,682/- - We would mince no words in observing that we are unable to fathom that as to on what basis an ad hoc disallowance of the aforesaid sundry creditors has been carried out by the A.O. As there is no basis for the aforesaid disallowance/addition, therefore, we are constrained to vacate the same. Part disallowance i.e 10% of the opening balances of the sundry creditors that have been brought forward from the preceding year - We are of the view that no disallowance of any part of the said brought forward balances could have been made by the A.O during the year under consideration. Accordingly, the disallowance to the said extent is vacated. The Ground of appeal partly allowed/allowed for statistical purposes in terms of our aforesaid observations.

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• 2025 (5) TMI 116
  Addition u/s 68 - cash deposited in the bank account - assessee has not discharged the onus of proving the identity, creditworthiness, and genuineness of the transactions relating to the cash deposits during demonetization. HELD THAT:- Assessee prompted cash sales by introducing the sale which has not been taken place. Majority of the sales invoices shows the mobile number or the address. AO has not issued any single letter u/s. 133(6) to the buyer when the assessee stated that on the date of demonetization sales was only for Rs. 26,12,469/-. The period were demonetization announced was of the festival and marriage seasons therefore, when the cash sales is not disputed how the cash sales be disputed with out bringing anything contrary on record. The sales is duly recorded in the books and in the records of the state value added tax records. When the cash is duly recorded in the cash book as proceeds of the sale the same again cannot be added as unexplained and that too without reduced that receipt from the turnover as the ld. AO has already taxed the income generated from the sales. Assessee serviced the decision in the case of Smt. Harshila Chordia 2006 (11) TMI 117 - RAJASTHAN HIGH COURT ] in which it was held that Addition u/s 68 could not be made in respect of the amount which was found to be cash receipts from the customers against which delivery of goods was made to them . Thus, the sales recorded in the books of account of the assessee firm cannot be considered as unexplained and thereby we direct the ld. AO to delete that addition as the assessee has duly supported the source of cash deposited immediately on 3rd day of demonstration which was the proceedings of the sale made by the assessee. The bench noted that it was not the cash of the revenue that the assessee has accounted the sales in cash on the date of demonetization but we note that sales invoice no. 540, 541 dated 08.11.2016 was by cheque. Even out of cash deposit of Rs. 70,00,000/- the sale after the demonetization was for Rs. 26,12,469/- which was also supported by the delivery of goods and having details of the items sold to customer. Considering the overall facts and material placed on record we see no reason to sustain the addition and therefore, the same is directed to be deleted. Appeal of the assessee is allowed.

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• 2025 (5) TMI 115
  Deduction u/s 80P(2)(a)(i) - interest income earned by the assessee from term deposits - distinction between eligibility for deduction and attributability of amount of profits and gains from the activity of providing credit facilities to the members as well as deriving income from investments made with other cooperative societies HELD THAT:- Admittedly, assessee is a primary agricultural credit co-operative society and is governed by Karnataka Co-operative Societies Act, 1956 and it is carrying out its co-operative business with its members, the claim of deduction u/s 80P(2)(a)(i) of the Act cannot be denied. Also, assessee does not hold a banking license issued by RBI so as to give it a status of Co-operative Bank. Hence, we reverse the orders of lower authorities and allow this issue in the appeal of assessee. Disallowance u/s. 40A(2)(b) - AO concluded that assessee failed to prove the genuine services provided by the above related parties on the basis the assessee has given the commission - AO disallowed and added the entire payment of alleged commission to the total income of the assessee and initiated penalty proceedings u/s. 270A separately for under reporting of income - HELD THAT:-Assessee had paid uniform rate of 2.5% as commission to such five agents and therefore, the said payment is covered u/s, 40A(2)(b) - commission paid to such persons is at par with commission made to other collection agents also. The agreement of appointment of daily deposit commission agent is submitted by the assessee during the course of hearing. Commission agents mentioned in assessment order have regularly filed the Income Tax Returns and copies of ITR acknowledgement is also submitted by the assessee during the time of first appellate proceedings. Assessee had also paid salary to Shashikant Dhumal as senior clerk and relative of director. The Salary is paid to Shashikant Dhumal as per his employment agreement and same is at par with other senior clerks in the Society. Assessee has also deducted TDS on the said commission and such deductee parties have also shown the said income in their Income Tax Return. AO and CIT(A) wrongly treated the said payment as the commission paid towards non-genuine services. AO and CIT(A) has also wrongly observed that assessee has failed to furnish the copy of bills raised by the person. However, system generated daily collection received from members and commission paid on same is already submitted by the assessee. The said payment is not excessive and accordingly, the disallowance made in this respect is deleted. Rent added as Income from other sources - assessee has received rent for renting out the terrace space from VIOM Network Limited now known as ATC Telecom Infrastructure Pvt. Ltd. - HELD THAT:- As the rent received by the assessee for use of space, by Telecom Companies, in a building, or part thereof, owned by the assessee, in our considered view, the rent so received must be taken into account in computation of annual value to be taxed under the head income from house property . Accordingly, assessee rightly contends, the deduction u/s 24 is admissible on the facts of the present case. Assessee has already submitted leave and license agreement at the time of assessment proceedings and the first appellate proceedings. The rent received is offered to tax under the head Income form House Property and therefore AO as well as CIT(A) has wrongly treated the same under Income from Other Sources and therefore the same is deleted.

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• 2025 (5) TMI 114
  Accrual of interest income - non-receipt of the said interest amount and the debtor being declared a Non-Performing Asset (NPA) and subsequently undergoing insolvency proceedings HELD THAT:- As one has to see the probability or improbability of realization of a debt in a realistic manner. Here in this case there was no probability of realizing any interest from the debtor company as the same was declared NPA and therefore, there was no reason that assessee should have declared any income on accrual basis when in real there was no income received nor under these circumstances income could have been accrued to the assessee. Ld. CIT (A) has rightly held the tax can be levied on real income and not hypothetically income. Another important fact is that even though TDS was deducted by the debtor company even when no interest was ever paid to the assessee till date. In the subsequent assessment year assessee had not shown any interest and the same has been accepted by the ld. AO in the assessment orders and in fact in A.Y.2021-22 assessee has written off the principal amount as bad debt. Thus showing interest income on accrual basis and then writing it off subsequently was only a futile exercise when assessee was aware that it will not receive any amount from the debtor company. Accordingly, we uphold the order of the ld. CIT(A) that there was no interest actually accrued to the assessee which can be brought to tax. The order of the ld. CIT(A) deleting the interest amount of Rs. 3,60,00,000/- is upheld. Credit of TDS - We are unable to accept the proposition of the assessee for the reason that once assessee has not declared any corresponding income assessee cannot deduct take credit of the TDS. This has been held by the Hon ble Jurisdictional High Court in the case of Imageads Communications (P) Ltd ] 2025 (2) TMI 772 - BOMBAY HIGH COURT ]. Thus, assessee cannot take the credit of TDS, once the corresponding income has not been shown. Accordingly, the grounds raised by the assessee are dismissed.

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• 2025 (5) TMI 113
  Penalty notice u/s 271C beyond period of limitation - HELD THAT:- Penalty levied in this case u/s 271C of the Act deserves to be deleted in view of the decision of Hindustan Coca Cola Beverages Co. Pvt. Ltd [ 2023 (1) TMI 721 - ITAT DELHI] wherein has also drawn strength from the decision of NHK Japan broadcasting [ 2008 (4) TMI 182 - DELHI HIGH COURT] and Bharti Airtel [ 2016 (12) TMI 1601 - DELHI HIGH COURT] the date of knowledge is not relevant for the purposes of exercising jurisdiction insofar as the provisions of the Income-tax Act are concerned. If it were so, the limitation period, as for example prescribed u/s 147/148 of the Act would become meaningless of the concept of knowledge is imported into the scheme of the Act. Assessee appeal allowed.

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• 2025 (5) TMI 112
  Levy of penalty u/s. 271(1)(c) - Allegation of defective notice on non-striking off of irrelevant portions in a pre-printed performa - HELD THAT:- A bare perusal of above notice shows that the same is omnibus notice in a preprinted performa. Though, the AO has tick marked in the notice, however, it is not clearly emanating from the notice as to whether penalty u/s. 271(1)(c) of the Act is levied on the charge of concealment of particulars of income or furnishing inaccurate particulars of income or on both limbs of section 271(1)(c) of the Act. This makes the notice vague and defective. A perusal of the assessment order reveals that the AO while recording satisfaction for levy of penalty u/s. 271(1)(c) of the Act has failed to mention the charge i.e. whether satisfaction for levy of penalty u/s. 271(1)(c) of the Act is recorded for, concealment of particulars of income or furnishing inaccurate particulars or concealment of particulars of income and furnishing inaccurate particulars . Thus, no charge u/s. 271(1)(c) of the Act has been mentioned by the AO while recording satisfaction. The penalty is liable to be deleted on the ground of ambiguity in recording of satisfaction, as well. As pointed earlier, ambiguity in mind of the AO regarding charge on which penalty is to be levied u/s. 271(1)(c)of the Act is reflected in notice as well. AO has not struck off irrelevant matter in the notice issued in pre printed performa. In the case of Mohd. Farhan A. Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] has held that where omnibus notice has been issued and irrelevant matter in the notice has not been struck off, the notice is defective. No penalty can be levied on such defective notice. Assessee appeal allowed.

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• 2025 (5) TMI 111
  Addition u/s 69A - unexplained cash deposits in SBN during the demonetisation period - taxation u/s 115BEE - HELD THAT:- Assessee is running a coaching centre for aspirants for recruitment done by State Public Service Commission. The assessee s business involves cash collection from the trainees. During the assessment proceedings the assessee have furnished the books of accounts, cash book, Service tax returns in support of the turnover along with reconciliation, bank statements and sales records. Assessee has explained the source of cash deposit was from the business, collected on account of fees collected from the trainees and the entire list of candidates to show the nature and source of the cash deposit were furnished before the AO. AO and CIT(A) have not pointed out any defects or irregularities in the books of accounts of the assessee and further the same have not been rejected. In this scenario making an addition as unexplained money on account of the cash deposit made in SBN during the demonetisation period is not sustainable in law. Therefore, we do not countenance the action of the ld.CIT(A) in confirming the addition made by the AO for the reason that the assessee was not authorised to accept the SBN during the demonetisation period. In the present case the assessee though the assessee has collected the SBN during the demonetisation period, the same was not prohibited as per the specified bank notes (Cessation of Liability) Act, 2017. Further, we find that the assessee has explained the source of the cash deposit also. Hence, as relying on M/S. SURABII GOLD [ 2024 (4) TMI 1241 - ITAT CHENNAI] CIT(A) has erred in confirming addition u/s. 69A for the reason that the assessee was prohibited to accept the same. Difference between opening WDV of Fixed assets as per ITR and closing WDV of Fixed assets as per ITR - AO has made the addition u/s. 69 as an unexplained investment stating that the assessee has made addition to the assets which were not disclosed, instead of crediting to P L Account as income, has credited to the capital account. - HELD THAT:- We find that the assessee has duly submitted the particulars pertaining to the loans obtained for the purpose of acquiring the assets in question and has substantiated the sources of funds utilized for such acquisitions during the relevant assessment years, in addition to the income declared in those respective years. Furthermore, it is observed that the immovable properties in question, acquired during the period from Year 2006 to 2012, are supported by registered sale deeds executed in favour of the assessee. CIT (A) has erred in upholding the additions in the assessment year under consideration, without duly appreciating the fact that the said assets had been acquired in earlier years from borrowed funds and disclosed sources of income. Accordingly, the order of the CIT(A) is set aside, and the AO is directed to delete the impugned additions by allowing the grounds raised by the assessee.

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• 2025 (5) TMI 110
  Unexplained cash deposits u/s 69A - Fixing the commission @ 10% on the total receipts as against 0.41% declared by the assessee - CIT(A) confirming the addition giving opportunity of hearing to the AO before passing the appellate order HELD THAT:- As seen from the appellate order that no remand report was called from the AO, which the CIT(A) was statutorily required to obtain in view of sub-Rule (3) of Rule 46A of the Income-tax Rule, 1962. It is well-settled that the CIT(A) is vested with co-terminus power that the AO has in making an assessment order. As in the case of Smt. Prabhavati S. Shah [ 1998 (2) TMI 107 - BOMBAY HIGH COURT ] held that on a plain reading Rule 46A, it is clear that the same is intended to put fetters on the right of the appellant to produce before the AAC, any evidence, whether oral or documentary, other than evidence produced by him during the course of proceedings before the ITO except in the circumstances set out therein. In case of CIT vs. Valimohmad Ahmadbhai [ 1981 (7) TMI 53 - GUJARAT HIGH COURT ] held that mere fact that notice of hearing of appeal was given to the AO would not meet the requirements of Rule 46A(3) where assessee produced additional evidence in his appeal to the AAC. Since something adverse to the ITO was sought to be done in the course of appeal by way of augmenting the record, the ITO ought to have been heard and given an opportunity to meet the additional material by way of cross-examination, counter evidence and urging submissions in the context of the augmented record. CIT(A) has not followed the mandatory requirement of giving opportunity of hearing to the AO before passing the appellate order, where addition of entire cash deposit was restricted to 10% of the deposit. Thus, we set aside the order of the CIT(A) and remit the matter to the AO for de novo assessment order after considering the explanation and evidence produced by the appellant. Appeal of the assessee is allowed for statistical purpose.

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• 2025 (5) TMI 109
  Penalty u/s. 271(1)(c) - addition made by AO merely on estimation - AO estimated net profit rate at 12%, which got reduced to 8% by first appellate authority and to 6% by Tribunal - HELD THAT:- In view of the order in Naresh Katare Contractor [ 2017 (11) TMI 2070 - ITAT AGRA] relied upon assessee, no penalty can be imposed against the assessee based on estimated addition. Thus we do not find any justification for imposition of impugned penalty against the assessee u/s. 271(1)(c) when the income of the assessee has been assessed on the basis of estimated profit. Decided in favour of assessee.

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• 2025 (5) TMI 108
  Allowance of deduction u/s 80P in respect of interest income - commission income earned by Cane Development Councils and Cooperative Cane Development Unions from sugar mills on sugarcane supplied independently by sugarcane growers at rates fixed by the State Government constitutes business receipts or income from other sources under the Income Tax Act, 1961. HELD THAT:- Both the Cane Development Council and the Cooperative Cane Development Unions( or Cane Growers Cooperative Society) perform an important role in the cane production and marketing in a particular area or zone. While the unions are directly involved in the marketing of the sugar cane to the various factories, the Council performs a number of functions to facilitate the production and supply of sugarcane in the area assigned to it. Therefore, it is quite clear that the commission that is paid by the occupier of the factory or by Gud, Rub or Khandsari units is not on account of some investment that is made by these Councils or Unions with the factories but rather because of their role in production and marketing of sugar cane in that particular area. The payment of commission is therefore, attributable to the activity of production and marketing of sugarcane for which the Cane Development Councils and the Co-operative Cane Development Unions have been set up the under the Sugarcane Act and Rules. Since the Ld CIT(A) has made references to the functions performed under this Act and the Rules framed thereunder in his order, we hold that the Revenue is not justified in contending that he has not given a finding on the nature of the Commission received by the Assessees. We, therefore, uphold the decision of CIT(A) to allow the same to be deducted u/s 80P as they are receipts from the business and not income from other sources. Accordingly, all the appeals of the Revenue, which do not seem to have taken cognizance of the assigned roles of the Cane Development Councils or Cooperative Cane Development Unions in the production of marketing of cane as per the U.P. Sugarcane (Regulation of Supply Purchases) Act, 1953 read with the U.P. Sugarcane (Regulation of Supply Purchases) Rules, 1954, are fit to be dismissed.

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• 2025 (5) TMI 107
  Assessment u/s 153C - Deemed date of search - period of limitation - HELD THAT:- As in the present case a search and seizure operation u/s 132 of the Act was conducted on Tirupati assessee u/s 153C of the Act by recording satisfaction on 02.12.2016 for AY 2009-10 to AY 2014-15. The copy of satisfaction note recorded by the AO of the assessee has been placed assuming the date of search as 11.11.2014. However, the deemed date of search in the present case will be 02.12.2016 in view of case of JASJIT SINGH [ 2023 (10) TMI 572 - SUPREME COURT ] and hence the period of block assessment of six years immediately preceding assessment year relevant to previous year in which search was conducted has to be reckoned from 02.12.2016. Therefore, in the present case assessment proceedings for AY 2015-16, assessment should have been framed u/s 153C of the Act after issuing notice under section 153C of the Act. However, proceedings in the case of the assessee were wrongly framed under section 143(3) of the Act without issue of notice u/s 153C assuming the date of search as 11.11.2014 instead deemed date of search of 02.12.2016 and hence, the assessment order is bad in the eyes of the law on account of jurisdictional error and therefore liable to be quashed. As relying on case of Akansha Gupta [ 2024 (7) TMI 1133 - ITAT DELHI ] the assessment order passed in this case dated 31.12.2016 is bad in law in as much as no notice u/s. 153C has been issued, hence, the said assessment order deserve to be quashed and accordingly, the same is quashed. Accordingly, the legal grounds raised by the assessee are allowed in the aforesaid manner. Appeal of the assessee is allowed.

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• 2025 (5) TMI 106
  Addition u/s 36(1)(iii) - Interest free loan given to subsidiary on account of commercial expediency - HELD THAT:- Assessee company had signed a specific agreement with the FFC and had submitted that the profitability of its associate FFC would impact the financial status and the business of the assessee concern. CIT(A) took a very narrow view of the expression commercial expediency by observing from the financials of the FFC that it had earned profit during the year and therefore, it was out of scope of commercial expediency. We have carefully considered the same but do not agree with it. Transition of FFC from loss making to marginal profit was only during the year and that it would not per-se end the requirement of commercial expediency . This is best left to the assessee to judge its requirement of commercial expediency unless the AO makes it out a case that commercial expediency is no longer required. The commercial expediency does not mean the support by a holding company to its associate concern only when the associate concern is in a loss. CIT(A) observed that the loan from the holding company to its subsidiary FFC during the year had increased from Rs. 2.60 Crores to 4.18 Crores which prima facie shows that the subsidiary was in need of more funds during the year. Moreover, that in pursuance of the management agreement entered by the assessee with the associate concern, the assessee had earned consultancy and service fee. Therefore, direct the AO to delete the disallowance of interest made by the AO in respect of the loan given by the assessee company. Disallowance of retainership fees u/s 40(a)(i) - payment of retainership fees for the alleged non-deduction of tax at source on the said payment - HELD THAT:- As assessee has filed copy of ledger account and relevant TDS certificate substantiating that TDS was deposited before the due date of filing of return for relevant assessment year. This issue is restored back to the file of the AO to verify the above contention of the assessee and to take into cognizance the TDS deducted and decide the issue afresh as per law. Ground Nos.2 and 2.1 is partly allowed as per the above observation. Taxability in India - Disallowance of payment made to foreign nationals - HELD THAT:- As services rendered by Rosamond Freeman-Attwood falls under the category of Independent Personal Service and since, the stay was less than 120 days, therefore, the amount paid to Rosamond Freeman-Attwood was not taxable in India and therefore the assessee was not required to deduct the TDS u/s 40(a)(ia). Therefore, the disallowance made by the AO and confirmed by the ld. CIT(A) is deleted. For payment to M/s Elephant Pepper Camp Ltd., the services rendered outside India and similarly, the India Kenya DTAA did not contain the separate provisions for taxing of Fees for Technical Services during the relevant period the disallowanceis not sustainable. Contention of the AO that it was imperative on the part of the assessee to make an application u/s 195(2) for taking a certificate u/s 195(2) of the Act in respect of any payment made to a non-resident irrespective of the fact that the amount was taxable in India or not is not acceptable. Hon ble Supreme Court in in the case of GE India Technology Centre (P.) Ltd. [ 2010 (9) TMI 7 - SUPREME COURT] has held that section 195(2) of the Act gets attracted to cases where payment made is a composite payment in which certain proportion of payment has an element of income chargeable to tax in India. However, as held earlier, the payment to foreign entities is not taxable in India and therefore there was no requirement for the assessee to seek a certificate for non deduction of TDS in respect of the aforesaid payments u/s 195(2) of the Act. Disallowance of payments by AO was that the assessee had not submitted any document evidencing the service received from the aforesaid persons and the purpose of the payment made to these parties - The same is not acceptable firstly for the reason that the Assessing Officer made the disallowance u/s 40(a)(ia) of the Act and not under section 37(1) of the Act. Further, necessary documents regarding the services rendered have been submitted by the assessee Therefore, we hold that the AO was not correct in making the disallowance and the same is deleted.

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• 2025 (5) TMI 105
  Addition u/s 68 - bogus LTCG - unexplained share capital and share premium received by the assessee from various private limited companies - whether the AO has discharged the burden shifted to his shoulders in this case? - HELD THAT:- As assessee has discharged the burden placed on its shoulders by providing all the documents required in order to prove the identity of the creditor, credit worthiness of the creditor and genuineness of transactions. On the contrary, the AO has not discharged the burden shifted to his shoulders by disproving those documents. Instead, he has taken adverse view on the basis of incomplete enquiry, incorrect appreciation of financial statements of four companies and based on the general allegations made in the report of the investigation report. Accordingly addition made by the AO u/s 68, was not justified. Accordingly, we set aside the order passed by CIT(A) and direct the AO to delete the addition made u/s 68 of the Act. Appeal filed by the assessee is allowed.

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• 2025 (5) TMI 104
  Denial the claim of exemption u/s 80G as well as 12AA of the Act on account of non-compliance by the assessee - HELD THAT:- As in the interest of justice, it was considered imperative that the assessee may be granted another opportunity to file its submission in response to the notice issued by the Ld. CIT (Exemption) for justifying the genuineness of the activities and claim of approval. Hence, both the orders of the CIT (Exemption) are set aside and the matter is remanded to him for deciding both the applications afresh after granting an opportunity of being heard to the assessee and seeking the reply from the assessee in respect of the queries raised and in accordance with law. Appeals filed by the assessee are allowed for statistical purposes.

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• 2025 (5) TMI 103
  Unexplained cash deposits made in SBN during demonetisation period - HELD THAT:- From a mere reading of order of the CIT(A) it is clear that the appellant had withdrawn a sum of Rs. 17,42,000/- during the period commencing from 13.04.2016 to 28.09.2016. There is no evidence that these withdrawals were used for any other purpose. Therefore, the amount withdrawn earlier should be treated available for subsequent deposit. Therefore, the lower authorities were not justified in making addition of Rs. 4,83,500/- as unexplained money of the assessee. Accordingly the orders of the lower authorities are hereby set aside and direct the AO to delete the addition. Appeal filed by the assessee stands allowed.

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• 2025 (5) TMI 102
  Addition u/s 69A r.w.s 115BBE - Assessee could not gave proper justification for the source of cash deposited during the demonetization period - AO doubted the transaction of withdrawal HELD THAT:- AO has agreed to the claim of the Assessee regarding the withdrawal total sum of Rs. 30,00,000/- prior to the date of demonetization and availability of sufficient cash in hand. Assessee has also produced cash book before the A.O. which is having cash in hand Rs. 62,49,264/- as on 08/11/2016 after considering the cash expenses of Rs. 8,07,809/- from 01/04/2016 to 08/11/2016. Considering the fact that the Assessee has withdrawn the sufficient amount prior to the demonetization which is very well reflected in the statement of account and the same has not been disputed by the A.O. and not found the cash book as incorrect, thus A.O. should not have made the addition. CIT(A) has committed error in upholding the addition made by the A.O. Assessee appeal allowed.

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• 2025 (5) TMI 101
  Unexplained money u/s. 69A - HELD THAT:- This statement recorded on decoding has not been part of the assessment proceedings. The Revenue has relied on unverified and coded figures, which have been tallied against the un-coded figures without proper corroboration. Any statement recorded of the Directors or the employees relating to the material found in codes has not been brought on record. This raises serious doubts about the reliability of the figures used to make the addition. Since the authenticity of the decoded amounts is questionable, any conclusions drawn from them cannot be sustained. Secondly, the records indicate that the payment details align with the submissions made by the assessee. It has been established that the amount was paid on 25.11.2011, as per the assessee s records, which match the decoded figures quoted in the assessment order. The repeated mention of these figures in the department s findings confirms that there is no discrepancy in the assessee s declaration of the payments. Hence, the plea of the assessee stands corroborated, and there is no ground for any addition on this account. Thirdly, the statement made by Shri Murlidhar Maruthbhai Trivedi, the accountant of NODPL, has not been made available to the assessee. The assessment order itself acknowledges that this statement is based not only on information regarding the assessee but also on another person s details, which are confidential and lie within the Investigation Wing. Since this statement has not been shared with the assessee, reliance on it violates the principles of natural justice. Without providing the assessee an opportunity to cross-examine the statement or verify its contents, the department cannot use it as the basis for making an addition. NODPL has confessed before ITSC that it collected on-money from the sale of land and buildings. However, the admission was made in a general context regarding all purchasers of the scheme developed by NODPL. There is no specific mention or direct evidence linking the assessee to this alleged on-money transaction. In the absence of any concrete evidence that the assessee was involved in undisclosed transactions, making an addition solely on presumptions is unsustainable. Any such addition must be backed by clear, conclusive proof rather than general confessions made by third parties. Finally, the purchase deed in question has been executed in the year under consideration, hence the on-money payments have already been made in the same year, i.e. FY 2014-15, whereas the payments for the purchases have been made on 11.04.2009 of Rs. 15 lakhs, 17.11.2009 of Rs. 10 lakhs, 27.03.2010 of Rs. 12.50 lakhs, 25.11.2011 of Rs. 37.50 lakhs 08.01.2013 of Rs. 8.01 lakhs. Even on this count, it cannot be said that the amounts have been paid in the FY 2014-15. Appeal of the assessee is allowed.

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• 2025 (5) TMI 100
  Addition u/s 68 - fresh unsecured loan - HELD THAT:- We find that the assessee, during the appellate proceedings before CIT(A), filed several evidences in support of his claim which the CIT(A) forwarded to the AO for his comment. CIT(A) on the basis of remand report and assessee s rejoinder/explanation, ultimately held that major portion of loan, pertained to previous years and not the impugned assessment year. CIT(A) recorded a finding of fact that only an amount of Rs 95,00,516/- pertained to fresh loans taken during the year and confirmed the same on account of absence of satisfactory establishment of identity, creditworthiness and genuineness of transaction. No reason to interfere in the decision of the CIT(A). CIT(A) has examined the facts and evidences of the case and has considered the remand report of the AO in detail. Accordingly, we sustain the addition made u/s 68 Thus, Ground No. 1 of the assessee is dismissed. Addition on account of low withdrawal - CIT(A) was not justified in restricting the addition to Rs. 1 lakh. The addition on account of low withdrawal was itself made on estimate basis and the CIT(A) has failed to give any rationale for the said disallowance. We accordingly direct the AO to delete the addition on account of low withdrawal. This ground of the assessee is allowed while the ground of the Revenue is dismissed.

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• 2025 (5) TMI 99
  Revision u/s 263 - inadequacy of enquiry by the AO v/s no enquiry - HELD THAT:- AO has made specific enquiries to which the assessee has given specific replies. Therefore, it cannot be said that no enquiries were made by the AO and as held in the case of CIT vs. Clix Finance India Pvt. Ltd.[ 2024 (3) TMI 157 - DELHI HIGH COURT ] inadequacy of enquiry by the AO, would not in itself be a reason to invoke powers enshrined u/s 263. Therefore, we have no hesitation in holding that the ld. CIT erred in assuming jurisdiction u/s 263 of the Act. Appeal of the assessee is allowed.

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• 2025 (5) TMI 98
  Addition on difference in proprietor s capital account - HELD THAT:- From the various details furnished by the assessee we find the confusion arose in the minds of the Assessing Officer as well as the Ld. CIT(A) / NFAC regarding the two capital account balances which is mainly due to the capital account as per the business balance sheet and the capital account as per the personal balance sheet. In the personal balance sheet, the assessee has disclosed his entire assets and liabilities whereas in the business balance sheet, only the business assets and liabilities are reflected. CIT(A), without appreciating the facts properly, have sustained the addition made by the Assessing Officer which is not justified. We accordingly set aside the order of the CIT(A) / NFAC and direct the Assessing Officer to delete the addition. Addition on account of sundry creditors - HELD THAT:- Assessee under the head sundry creditor has shown an amount in the name of Sanjay M. Bafna, HUF. and his Ledger account shows the same account as the opening balance as on 01.04.2017 and after making certain payments, the closing balance of Rs. 12,11,10,914/- has been arrived at which has been shown in the balance sheet as on 31.03.2018 under the head loans - SANAJY M. BAFNA . Thus, this is only a mere change in the nomenclature without any difference in the figures as per the Ledger account. There is absolutely no error except the name change i.e. from sundry creditor to unsecured loans. Thus, the AO in our opinion was not justified in making the addition and the CIT(A)/ NFAC was not justified in sustaining the same without appreciating the facts properly although those details were very much available with them and the explanation was given by the assessee. We, therefore, set aside the order of the Ld. CIT(A) / NFAC and direct the AO to delete the addition. Decided in favour of assessee.

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• 2025 (5) TMI 97
  Reopening of assessment u/s 147 beyond period of limitation - addition by disallowing a part of the interest u/s 36(1)(iii) by apportioning the same to WIP - HELD THAT:- As in view of the decision of Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] it is clear that the time between the issue of original notice u/s 148 under the old regime and the time upto 30.06.2021 is the time limit available which needs to be added to the date on which the reply of the assessee was received. The Hon ble Supreme Court has referred to this time limit as the surviving time limit available. Applying the same principle as laid down in the case of Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB)] for A.Y. 2014-15, the Assessing Officer should have issued notice u/s 148 by 13.06.2022 and for A.Y. 2016-17 by 26.06.2022. However, for both the assessment years, the AO has issued notice u/s 148 subsequent to those dates i.e. 25.07.2022 and 26.07.2022 respectively. Therefore, the notices issued u/s 148 in the new regime are barred by limitation for both years. We, therefore, hold that the notice issued u/s 148 of the Act being barred by limitation, such re-assessment proceedings are not in accordance with law and have to be quashed. Even otherwise on merit also, we find the assessee has debited the entire interest expenditure to the Profit and Loss Account and the AO has applied the provisions of ICDS IX which have been introduced w.e.f. assessment year 2016-17 and therefore, are not applicable to the assessment year 2014-15. Since the ICDS provisions are not applicable to assessment year 2014-15, the Assessing Officer was not at all justified in making the disallowance in the hands of the assessee based on the same provisions. Assessee is following the Percentage of completion method for recognizing the revenue. Under this method, the income is recognized on the basis of work completed and offered to tax. The interest is a period cost and the same would be incurred by the assessee even though there is no increase in work-in-progress and the assessee has to incur the interest expenses even when there is no sale in the project. Therefore, such interest expenditure has to be allowed in the year in which such interest expenditure is incurred. A perusal of the above provisions show that once the borrowed funds are used for the purpose of business of the assessee, interest is allowable as deduction. We find in the present case the funds borrowed were used for the business of the assessee and therefore such interest expenditure cannot be disallowed as deduction. The action of the AO for assessment year 2014-15 is clearly against the settled principle laid down in the case of Lokhandwala Construction Industries Ltd.[ 2003 (1) TMI 93 - BOMBAY HIGH COURT] Further, as per the provisions of section 36(1)(iii), there is no provision in the said section to apportion the interest cost between the work-in-progress and the sales. The interest expenditure being a period cost, the same has to be allowed in the year in which it has been incurred. In our opinion, when the provisions of ICDS conflict with the provisions of the Act, the provisions of the Act would prevail. As per the ICDS IX, it is clearly mentioned that in case of conflict between the provisions of the Income Tax Act, 1961 and the ICDS IX, the provisions of the Act would prevail to that extent. Thus we hold that the borrowed funds which are utilized for the purpose of business of the assessee has to be allowed as deduction in the year in which the interest expenditure has been incurred. Assessee had debited the entire interest expenditure to the Profit and Loss Account rather than apportioning it between sales and work-in-progress (WIP), as per ICDS IX relating to borrowing costs - When the development is undertaken after obtaining necessary approval from the local authorities, the assessee can sell the units. Undisputedly, the assessee is following the percentage of completion method, according to which the revenue is accounted for in respect of units sold depending upon the percentage of work completed. Once the development plan is obtained, the assessee is entitled to sell any unit in the building under construction, even though, the possession is given subsequently and the revenue of the units to the extent of work completed is accounted for. It is not necessary that the flat or unit is complete in every respect to sell the flat / unit. We find as per clause 8 of ICDS, capitalisation of interest shall cease in case of an inventory when all the activities necessary to prepare such inventory for its intended sale are complete. Even in case of units that are under construction, since the assessee is following the percentage completion method for recognizing the revenue, the units do not fall within the definition of qualifying asset at all even though these are not complete in every respect. As per clause 8 of ICDS, the borrowing cost is to be ceased to be capitalised when substantially all the activities necessary to prepare such inventory for its intended sale are complete. Since in the instant case at the time of passing the plan itself, the said activities are complete, therefore, there is no question of capitalization of interest. Therefore, we hold that even as per ICDS IX, the assessee company was not required to capitalize the interest and has rightly debited the same to the Profit and Loss Account. Revenue appeal dismissed.

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• 2025 (5) TMI 96
  Cash deposit in regular bank account of the assessee - nature of business, which is of Air Travel and Air Ticket Agency - HELD THAT:- We find that the Assessee is purchasing tickets form the government approved carriers as he has been issued license by IATA (International Air Transport Association). All the sales amounts made by the Assessee are returned back to different airlines deducting the margin / commission of the Assessee. We find that the Assessee has filed details of all the sales he has made to different customers and since there is no bar from sale of tickets in cash, therefore, the findings given by the authorities below that the sales made in cash do not stand proved seems incorrect. Assessee s commission / margin earned from the same business has been accepted by the Department in the scrutiny assessment in earlier years also and no adverse view was taken in earlier years. In the present year, also like in earlier years sale of tickets has been made in cash but all such sale proceedings have been deposited in the account of Airlines, therefore, there is hardly any possibility of wrong doing on this account. Therefore, action of making addition of such cash sales and its sustenance by the ld. CIT(A) is not justified. Accordingly, Assessee s appeal on this issue is allowed.

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• 2025 (5) TMI 95
  Transfer of case u/s 127 - assumption of jurisdiction by the Range head i.e., Addl. CIT, Range-1, Raipur to perform the functions, and exercise the powers of an AO under section 2(7A) dehors an order u/s 120(4)(b) by the competent authority HELD THAT:- Admittedly, as stated by the revenue through the reports of Ld. AO, no order u/s 120(4)(b) of the Act was passed in the present case so as to confer upon the jurisdiction with the Addl. CIT, Range-1, Raipur to exercise or perform Power of Functions of Ld. AO. Assumption of jurisdiction by the Range head i.e., Addl. CIT, Range-1, Raipur to perform the functions, and exercise the powers of an Assessing Officer under section 2(7A) dehors an order u/s 120(4)(b) by the competent authority is held to be against the mandate of law, as decided in the case of Jindal Power Ltd.[ 2024 (6) TMI 1431 - ITAT RAIPUR ] As advised by the CBDT that, it is expected that apart from the category of assessee s defined in Para (v) of the impugned instruction, out of the remaining scrutiny assessments it is expected that 30% of assessment completed by the range head, 20% by DC/ACIT and 10% by ITO s. The notification no. 6/2009 relied upon by the revenue is only for the guidance of departmental officers to devise the method and mechanism in order to commending good performance of Assessing Officer in the area of quality assessment, the same cannot be considered as the replacement to order u/s 120(4)(b) conferring jurisdiction with the Addl. CIT, Range-1, Raipur Having similar facts and circumstances in the present case, we are of the conviction that the issue in present case is squarely covered by the view adopted by this Tribunal in the case of Jindal Power Ltd. Vs JCIT (Supra), which the revenue was unable to distinguish by furnishing any contrary material, evidence or decision. Further, admittedly there was no order for transferring the jurisdiction u/s 127 of the Act issued in the present case, therefore, on that count also the impugned assessment cannot survive. Consequently, in absence of inherent jurisdiction with the Addl. CIT, Range-1, Raipur, to exercise the duties of an Assessing Officer to frame the impugned assessment, the assessment framed u/s 144 of the Act, dated 03.02.2014 is liable to be quashed and we direct to do so.

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• 2025 (5) TMI 94
  Addition on account of deemed dividend u/s 2(22)(e) - case of the assessee was that there was no loan or advance received by the assessee, much less from M/s Orient Craft Ltd., and further, for that matter, no loan was received by the assessee from M/s Olympus Realtors P. Ltd. and hence there was no question of any deemed dividend to be assessed in his hands. HELD THAT:- Considering the fact that the issue involved in the present Appeals have been decided in favour of the Assessee and against the Department for both the Assessment Years 2014-15 and 2015-16 in the case of Sh. Sudhir Dhingra and Sh. Anoop Thatai [ 2022 (1) TMI 885 - ITAT DELHI] as held there is substantial difference between investment and advance. A.O. has disregarded the nature of payment made by each entity to the other entity regarding which the factual findings recorded by CIT (A) in his order have attained finality in the absence of any rebuttal or any appeal preferred by Revenue. Ld. AO has disregarded also the effect of legal character of all the entities more so when there was nothing adverse found in the assessments of these entities. We have already mentioned earlier that section 2(22)(e) creates fiction which operates very harshly and settled principle of law that provisions of law of such a nature are required to be construed strictly, more so in the light of factual findings as to the nature of these payments made by one entity to another recorded by CIT(A) against which revenue has made any rebuttal during the course of hearing. Therefore, there is no question of treating the amount withdrawn by the assessee as partner from the partnership firm namely M/s SKA Enterprises in the nature of loan and advance and treat it as deemed dividend under section 2(22)(e) of the Income Tax Act. None of the ingredients of section 2(22)(e) stand satisfied in the instant case. We have through the written submissions also reproduced above where rebuttal of each and every adverse observation made by the assessing officer has been made by the assessee and we are in agreement with the assessee on all those rebuttals. Appeal of the Assessee allowed.

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• 2025 (5) TMI 93
  Unexplained money added to the total income of the assessee u/s 69A r.w.s. 115BBE - Assessee has accepted Specified Bank Notes, which he was not allowed for the reason that the assessee cannot accept the demonetized currency i.e. SBN of Rs. 1000 Rs. 500 denomination from 09.11.2016 onwards, as the same were not a legal tender - HELD THAT:- As decided in Sri Tatiparti Satyanarayana [ 2022 (3) TMI 896 - ITAT VISAKHAPATNAM] Specified Bank Notes (Cessation of Liabilities) Act, 2017, defines appointed day vide Section 2(1)(a). As per Section 2(1)(a), appointed day means the 31st Day of December 2016. Section 5 of the Specified Bank Notes (Cessation of Liabilities) Act, 2017 also deals with prohibition on holding, transferring or receiving specified bank notes. Section 5 states that On and from the appointed day, no person shall knowingly or voluntarily, hold, transfer or receive any specified bank note . We therefore, find that the specified bank notes can be measured in monetary terms since the guarantee of the Central Government and the liability of Reserve Bank of India does not cease to exist till 31.12.2016. In view of the above, the contention of the Ld. DR, treating the receipt of SBNs from cash sales as illegal and thereby invoking the provisions of section 69A is not valid in law. Therefore, we dismiss this ground of the Revenue. Tribunal in the case of M/s Bhagur Urban Credit Co-op Soc. Ltd. [ 2023 (1) TMI 1384 - ITAT PUNE] also deleted the addition which was made on the basis of accepting the old currency i.e. SBN between 09.11.2016 to 11.11.2016 which were deposited in the bank account. Decided in favour of assessee.

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• 2025 (5) TMI 92
  Validity of order passed by CIT(A) u/s 250 - As alleged CIT(A) has neither adjudicated upon various grounds of appeal nor has passed a reasoned order for arriving at the decision, as is required u/s 250(6) - HELD THAT:- Even though the assessee had made its submissions along with supporting documents before the AO which are on record, compliance has not been made by the Ld. CIT(A) by not mentioning the reasons after examining the assessment records while disposing of the appeal nor the grounds of appeal raised before him have been decided. Though, the Ld. CIT(A) allowed the appeal but he has neither adjudicated upon various grounds of appeal nor has passed a reasoned order for arriving at the decision, as is required u/s 250(6) of the Act. We further note that in Ajji Basha [ 2019 (12) TMI 320 - MADRAS HIGH COURT] it has been held that a speaking order on merits with reasons and findings is to be passed by Commissioner (Appeals) on basis of ground raised in assessee s appeal; he cannot dispose assessee s appeal merely by holding that AO s order is a self-speaking order which requires no interference. It has also been held in the case of Premkumar Arjundas Luthra (HUF) [ 2016 (5) TMI 290 - BOMBAY HIGH COURT] that the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act and the procedure to be adopted for deciding the appeal. Accordingly, as the CIT(A) has not deliberated upon nor decided the various grounds of appeal raised before him, we find it appropriate to set aside the impugned order of the Ld. CIT(A) and remit the matter back to the file of Ld. CIT(A) for disposal of all the grounds raised by the assessee on merits by passing a speaking order de novo. Appeal is allowed for statistical purposes.

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• Customs

• 2025 (5) TMI 91
  Review of order - Classification of imported goods - Binding Material, Parts for Brake, disc brake pads, tool for mould, etc . - the department s classification under CTH 6813 8900 was upheld - HELD THAT:- There is no error apparent on the record - Review Petition is dismissed.

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• 2025 (5) TMI 90
  Seeking review of order - condition of pre-deposit renders the appellate remedy onerous and illusory or not - waiver of pre-deposit under Article 226 of the Constitution of India - HELD THAT:- This is not a case where pre-deposit provisions have been challenged as unconstitutional. In any event, the validity of such provision or similar provisions is already upheld by several decisions holding the field. The right to appeal is never inherent but only statutory. Therefore, if such a right is hedged with some condition, it cannot be said that such a right is rendered illusory. While the powers of a constitutional Court under Article 226 of the Constitution of India are expansive, the Hon ble Supreme Court has held that such powers should not ordinarily be exercised to sidestep the statutory requirements. In Kotak Mahindra Bank Pvt. Ltd. [ 2021 (2) TMI 1251 - SUPREME COURT] , the Hon ble Supreme Court has held that the discretionary jurisdiction under Article 226 should not be exercised to defeat the mandatory requirement of statutory provisions. Thus, no case for the exercise of review jurisdiction is made out. The Review Petition is therefore dismissed.

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• 2025 (5) TMI 89
  Seeking grant of regular bail - Conspiracy to smuggle the contraband by concealing the same in their body - quantity of narcotics recovered exceeds the commercial quantity threshold - HELD THAT:- The contraband was being carried by the petitioner surreptitiously by ingesting the contraband, which clearly suggests that he was consciously facilitating the illegal trade of contraband. The same is sufficient to prima facie establish the conscious position under the NDPS Act. With regard to the compliance under the Act, in the case of State of H.P. Vs. Pirthi Chand and Another [ 1995 (11) TMI 433 - SUPREME COURT ], the Hon ble Supreme Court while following the observations made by the Constitution Bench in Pooran Mal case [ 1973 (12) TMI 2 - SUPREME COURT ], held It is settled law that illegality committed in investigation does not render the evidence obtained during that investigation inadmissible. In spite of illegal search property seized, on the basis of said search, it still would form basis for further investigation and prosecution against the accused. The manner in which the contraband is discovered may affect the factum of discovery but if the factum of discovery is otherwise proved then the manner becomes immaterial. The documents placed on record prima facie reveal that notice under Section 50 of NDPS Act and under Section 102 103 of the Customs Act were served to the petitioner and he even gave reply to such notices. The record further indicates that the Investigating Officer had taken the petitioner to RML Hospital with the permission of the court for screening/scanning to confirm the presence of contraband in his body. Hence, it is not a case where no such permission was obtained before taking the petitioner to the hospital for Extraction of the drugs - the narrow parameter of bail available under Section 37 of the Act has not been satisfied in the facts of the present case. Petitioner has not been able to overcome the twin hurdle of Section 37. The length of the period of his custody or filing of the charge sheet and commencement of the trial by itself is not a consideration that can be treated as a persuasive ground for granting relief to the petitioner under Section 37 of the NDPS Act. Conclusion - The allegations, no doubt, are grave and serious in nature. The recovered quantity of contraband is way above the commercial quantity of Cocaine. Hence, keeping in view the entire facts and circumstances and the nature and gravity of allegations and in view of bar under Section 37 NDPS Act, it is not inclined to grant bail to the petitioner. Petition dismissed.

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• 2025 (5) TMI 88
  Liability of Directors and the Petitioner for non-fulfilment of its export obligations under the FTDR Act by the company - lifting of corporate veil - no show cause notice was issued to the Petitioner at all - violation of principles of natural justice - HELD THAT:- The Impugned Order does not contain any discussion with regard to the personal liability of the Petitioner. In fact, it is the case of the Petitioner that the show cause notices that are sought to be relied upon by the Respondent are all issued to the Company and have not been specifically addressed to the Petitioner - The Four O-I-O s state that the show cause notice dated 29.06.2004 was issued, thereafter another notice was issued on 05.05.2008 subsequently as well. However, it also states that the summons issued came back undelivered. In any event, after the Company had been directed to be wound up on 09.01.1998, all notices should have been issued to the Official Liquidator of the Company, which was concededly not done by the Respondent. The issue that obtains in the present case also obtains in a matter decided by this Court, the Pankaj Mehra case [ 2024 (12) TMI 1475 - DELHI HIGH COURT] . In the said case, a similar situation had arisen where after order for winding up of the Company was passed, notices under Section 11 of the FTDR Act were issued by the Respondent and Order(s) in Original were passed fastening a personal liability on the Directors of the Company for their role in the non-fulfilment of export obligations of the Company. This Court examined these Orders-in-Original and the final adjudication undertaken by the Respondent and found that no averment fastening personal liability on a Director was made either in the show cause notice or in the Order (s) passed by the Respondent. It was held by the Court that unless specific allegations are made against a Director regarding its role in the Company s export performance, they cannot be held personally liable. There is another aspect which has to be taken into consideration. The export licences were issued during the time period of 1989-1991. Between 27.06.2002 and 11.09.2008, the Respondent issued multiple notices, summons, and orders concerning various Advance Licenses held by the Company. The Four O-I-O s were then passed on 08.09.2009 and 17.09.2009. No explanation has been provided by the Respondent in these Four O-I-O s for the delay in taking steps against the Petitioner or the Company. No reason has been urged before this Court either. In any event, the contention of the Respondent that the Petitioner being a whole-time director is automatically liable and culpable for the defaults of the Company is also misconceived. It is no longer res integra that in order for a Director to be vicariously liable for the offences of the Company unless such Director was in charge and responsible to the Company for the conducts of its business, such Director cannot be held to be liable for offences alleged to have been committed by that Company. The Respondent has not disputed the fact either in the Impugned Order or in the Four O-I-O s that the Company went into liquidation in 1998, and that all documents and records were taken over by the Official liquidator. Thus, once a company goes into liquidation, all proceedings to be initiated against such company for the failure to submit documents in compliance with export obligations could only be initiated as is mandated in law. There is no evidence of this being done by Respondent either. Conclusion - In order for a Director to be vicariously liable for the offences of the Company unless such Director was in charge and responsible to the Company for the conducts of its business, such Director cannot be held to be liable for offences alleged to have been committed by that Company. This Court therefore finds no merit in the contentions of the Respondent - the Impugned Order and the Four Order(s)-In-Original are set aside - Petition disposed off.

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• 2025 (5) TMI 87
  Refund of amount paid under protest during investigation - rejection on the ground of time limitation - HELD THAT:- The learned Commissioner has erred in passing the impugned order dated 05.03.2015. In the impugned order, the learned Commissioner has mentioned two issues raised by the appellant that adjudicating authority failed to appreciate that refund claim was made regarding consequential relief granted to the appellant. There was no requirement on the part of the appellant to file refund claim but the claim made by the appellant ought to have been granted by the department on its own. Hence the period of limitation of Section 27 of Customs Act, 1962 was inapplicable. Therefore, the impugned is not sustainable and deserves to be quashed. The learned Commissioner has nowhere given any finding on the above issue and did not make any comment on the said issue in correct perspective. It is well settled legal position and the impugned order is not sustainable to that extent and deserves to be set-aside. Learned Commissioner did not bother to give his finding regarding the said issue and has nowhere discussed the said issue in correct perspective. It has been held in various cases by Tribunal that where an assessee succeeds in overturning an adjudication order, any amount paid either during investigation or as pre-deposit is to be refunded without raising the issue of limitation. The refund claim in such cases is not an ordinary claim under the Act but it is consequential relief resulting from the appellate order and therefore, cannot be rejected on the ground of limitation as being time-barred - reliance can be placed in OPEL ALLOYS PVT. LTD. VERSUS COMMISSIONER OF C. EX., GHAZIABAD [ 2009 (9) TMI 361 - CESTAT, NEW DELHI] and M/S. MANGALAM CEMENT LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2011 (8) TMI 956 - CESTAT, NEW DELHI] . Conclusion - The payment of Rs. 5,00,000/- made by the appellant has been made under protest and there is no doubt about it. This being the case, the amount deposited by the appellant cannot be taken as duty but it was a deposit and therefore, the refund application could not have been rejected on the ground of limitation. The impugned order passed by the learned Commissioner is not sustainable and is liable to be set-aside and the appeal filed by appellant deserves to be allowed - Appeal allowed.

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• 2025 (5) TMI 86
  Revocation of Custome Broker License - forefeiture of security deposit in whole - levy of penalty - failure to obtain authorization and to comply with Regulation 10(a) of the Customs Broker Licensing Regulations, 2018 (CBLR, 2018) - failure to advise their client regarding provisions of Customs law - HELD THAT:- In this case the adjudicating authority has held that the violations of Regulations 10(d) and 10(n) CBLR, 2018 have been proved for the reason that the Director of the Custom Broker was not aware of their employee working in Chennai, hence they were in no position to advise their client regarding provisions of Customs law. Further, there was no effort on the part of Customs Broker to verify the antecedents of the importer, hence violated Regulation 10(n) of the CBLR. In this case the Appellant-Custom Broker has filed the bill of entry, on investigation it was found that the quantity found is much in excess than what was declared. Therefore, we find that there was an attempt to mis-declare the weight to evade customs duty. Investigations also revealed that the consignment belongs to Mr. Gulab and the Import Export Code (IEC) of M/s. Mahi Enterprises has been used for the purpose of clearance of the imported goods. Investigations revealed that the employee of the Appellant-Customs broker had met the actual importer and did not inform the Customs about the actual importer about whom they had knowledge. In view of the fact that the bill of entry for the imports made at Chennai Customs was filed by their Bangalore office, the Custom Broker ought to have taken additional care to inform the importer about the Customs law and procedures and also ought to have exercised due diligence in such a case. Therefore, in the facts of the case, the Customs Broker has failed to advice the importer about the Customs law and procedures and exercise due diligence in verification of the antecedents of the importer and thereby violated Regulations 10(d) and 10(n) of CBLR, 2018. The penalty of forfeiture of the security deposit in whole and imposition of penalty of Rs. 50,000/- in the facts and circumstances of the case, can be considered for reduction. Accordingly, the forfeiture of security deposit under Regulation 14 of CBLR, 2018 is reduced to 15% of the security deposit amount and the penalty under Regulation 18 of CBLR, 2018 is reduced to Rs. 10,000/-. Conclusion - i) The Customs Broker violated Regulation 10(d) of CBLR, 2018 by failing to adequately advise the importer and exercise due diligence in the circumstances where the Bill of Entry was filed from a different office. ii) The Customs Broker did not violate Regulation 10(n) as it complied with KYC requirements by verifying the importer s identity and documents; it was not required to investigate or confront the importer regarding discrepancies in other registrations. iii) The penalty and forfeiture imposed were excessive and were accordingly reduced to 15% of the security deposit and Rs. 10,000 respectively. The impugned order is set aside, and the appeal is allowed

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• 2025 (5) TMI 85
  Valuation of imported goods - Undervaluation of imported goods - rejection of transaction value - appellant s request for cross examination during personal hearing was denied - violation of principles of natural justice - HELD THAT:- As regarding valuation, law is well settled that only when the transaction value under Rule 4 is rejected, then under Rule 3(ii) the value shall be determined by proceeding sequentially through Rules 5 to 8 of the Rules. Conversely if the transaction value can be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), there is no question of determining the value under the subsequent Rules. On perusal of the documents relied by the Adjudication Authority and considering the finding given by the respondent in the Order-in-Original No.COC-CUSTM-000-COM-021-16-17 dated 19.07.2016 on the very same issue regarding valuation of very same goods which was imported by M/s. Sarathi Impex Ltd, there is no admissible evidence to compare the goods imported by the appellant with the Proforma Invoice pertaining to the brand BAIDA and Long Feng- LF-588 relied by adjudication authority to reject the transaction value. Conclusion - There is no material on record or comparable imports to reject the transaction value. Appeal allowed.

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• 2025 (5) TMI 84
  Valuation of imported goods - re-determination of the customs value of the imported replacement goods - valsidity of rejection of declared value, given the declared value and prior acceptance of the original consignment s value by the department - HELD THAT:- The undisputed facts are that the goods were allowed for re-export by the Commissioner (Appeals). It is also fact that the impugned goods were replacement for the goods imported earlier which were found to be defective. Since originally the goods were allowed to be cleared at the declared value and replaced goods which were received after two months from the date of original import which were provided free of charge, the question of redetermination of value does not arise. It is also the fact that the similar items was imported by M/s. HCL Ltd. without any certification at USD 50,600, therefore, redetermination of value based on the supplier s list price without any sufficient reasons cannot be sustained. Moreover, when the appellant had requested for re-export, the question of payment of redemption fine and penalty does not arise since the goods were replacement of the defective goods which is not in dispute. It is also found that the goods have been auctioned without any intimation to the appellant by the Revenue that too when an appeal is pending before this Tribunal. The three letters that are placed on record to prove that the appellant had been intimated or letters issued by M/s. Menzies Aviation Bobba (Bangalore) Pvt. Ltd., the custodian of the goods and these letters have been issued prior to the Adjudication by the Original Authority vide Order-in-Original No. 79/2011 dated 31.03.2011. This intimation is much prior to the issuance of order of confiscation of the impugned goods. The appellant is right when he claims that the goods have been clandestinely auctioned without their knowledge, the fact that actual auction took place on 07.11.2013 does not justify the action taken by the department, especially when the issue is sub-judice, wherein the appeal is still pending before this Tribunal. The Hon ble High Court of Delhi in the case of Shilp Impex vs. Union of India [ 2002 (1) TMI 62 - SC ORDER] observed Admittedly, there was no relinquishment and at least that is not the stand of the Department and there has been no relinquishment. It was faintly suggested that the petitioner did not lift the goods and that amounts to relinquishment. Such a stand is hardly acceptable. Section 150 operates in a different field altogether. It relates to sale of goods not being confiscated goods, and which are to be sold under any provisions of the Act. Even this provision postulates a notice to the owner before action is taken. That has also undisputedly been not done. Conclusion - Re-determination of value based on the supplier s list price without any sufficient reasons cannot be sustained. The Respondent is directed to restore the sale value of the impugned goods - the impugned order is set aside and the Appeal is allowed.

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• 2025 (5) TMI 83
  Requirement of speaking order under section 17(5) of the Customs Act, 1962 - enhancement of value of imported goods at the rate of 13% on account of SVB loading - absence of such provision either in the Customs Act or in the valuation rules - HELD THAT:- The reliance placed by the Commissioner (Appeals) on Hanuman Prasad [ 2020 (12) TMI 1092 - CESTAT NEW DELHI] is completely mis-placed. In that case the importer had accepted in writing the re-assessment done by the proper officer and, therefore, it was held that the proper officer was not required to issue a speaking order as per section 17(5) of the Act. After accepting the re-assessment in writing, the importer had filed an appeal before the Commissioner (Appeals) and the Commissioner (Appeals) set aside the re-assessment on the ground that no speaking order was passed. It is in that factual matrix that the order of this Tribunal in Hanuman Prasad held that once the importer gives in writing that he accepts the re-assessment, there was no need for the proper officer to issue a speaking order. Therefore, it was held that the Commissioner (Appeals) had erred in setting aside the re-assessment on the ground that no speaking order was passed. Coming to the merits of the re-assessment itself, as per Section 14 of the Customs Act, the assessable value shall be the transaction value for import at the time and place of importation i.e, the CIF value of the imported goods. Transaction value is the price paid or payable by the importer for the goods. However, Section 14 itself provides for some exceptions and empowers the Government to frame rules to deal with such situations - If the transaction value is rejected then the value should be determined sequentially through Rules 4 to 9. In this case no reasons for rejection of transaction value were recorded at all by the Commissioner (Appeals) or by the proper officer. Further, the re-determination of the value was also not done through any of the Valuation Rules indicated, let alone following the Valuation Rules sequentially. According to the impugned order, the value was loaded at the rate of 13 per cent on account of SVB loading . There is no provision either in the Customs Act or in the valuation rules called SVB loading . Conclusion - The re-assessment of the Bill of Entry by the Assessing Officer was without any authority of law and also contrary to the provision of section 17 (5). The Commissioner (Appeals) committed an illegality in upholding such re-assessment. The impugned order as well as the re-assessment to the Bill of Entry by the Assessing Officer are set aside - Appeal allowed.

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• Insolvency & Bankruptcy

• 2025 (5) TMI 82
  Maintainability of section 9 petition - Initiation of CIRP - Service of demand notice - demand notice served by the Operational Creditor upon the Key Managerial Personnel (KMP) of the Corporate Debtor at its registered office, constitutes valid service of the statutory demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 (IBC) or not - HELD THAT:- It is well settled law that an operational creditor must send a demand notice of unpaid operational debt to the corporate debtor as mandated under section 8 of the IBC, before initiating the proceedings under section 9 for CIRP and the failure to issue a proper demand notice can render the section 9 petition invalid. On a perusal of Form 3 notice dated 31.03.2021 issued by the appellant, it is revealed that the same was addressed to the names of the KMP and delivered to the registered office of the respondent - Corporate Debtor viz., MESCO Kalinga Steel Limited. Even the subject and paragraph 1 of the notice clearly demonstrate that as per the IBC, demand notice / invoice demanding payment in respect of unpaid operational debt due from the corporate debtor was issued and thereby, the appellant called upon the Corporate Debtor to pay the operational debt within a period of ten days from the date of receipt of the notice, failing which, CIRP be initiated in respect of the Corporate Debtor - The contents of the notice clearly establish that the same was issued to the Corporate Debtor in respect of the operational debt due and payable by them. As such, it cannot be said that the appellant did not comply with the statutory requirement of sending demand notice in Form 3 to the respondent - Corporate Debtor as provided under section 8 of the IBC, before filing the section 9 petition seeking initiation of CIRP against the respondent in respect of the unpaid operational debt. Undoubtedly, the purpose of sending a demand notice is to give the corporate debtor an opportunity to either repay the outstanding debt, or dispute the debt if there are genuine reasons. In the present case, the notice dated 31.03.2021 sent by the appellant to the KMP of the corporate debtor at the registered office address in the capacity of their official position, explicitly demonstrates that the same was issued to the corporate debtor demanding the operational debt due and payable by them. However, it is not the case of the respondent that no notice was sent by the appellant calling upon the respondent - Corporate Debtor to pay the operational debt. Further, it is pertinent to point out that during the pendency of the section 9 petition, the Corporate Debtor approached the Operational Creditor for settlement, which was not fructified. The appellant has to establish as to what is the actual date of default, failing which, the application filed under section 9 of the IBC is incomplete. In this case, the appellant mentioned the date of default as 19.11.2019, in terms of the contract dated 11.10.2019. As per the contract, in respect of supply of LAM Coke by the appellant, the respondent had to pay 100% in advance through RTGS / NEFT fund transfer or alternatively by opening of LoC prior to dispatch. Subsequently, the contract was amended on various occasions, relating to lifting and delivery of LAM Coke. Further, at the request of the respondent, by emails dated 12.11.2019 and 16.11.2019, the appellant permitted the respondent to lift the coals without making payment in advance / opening LoC prior to despatch. On this basis, the respondent contended that the contract dated 11.10.2019 is novated and the default date mentioned in the petition is incorrect - However, the NCLT declined to decide this question as the respondent raised the plea of novation of contract to nullify the occurrence of default without pleading the same, and that, the question of novation of contract is a mixed question of law and fact. The NCLAT also, did not delve into this aspect, as the same was not a subject matter of the appeal before it. The issue relating to the date of default by the Corporate Debtor and novation of contract, if any, being a mixed question of law and fact, requiring detailed analysis based on the materials adduced by the parties, is to be decided by the NCLT at the time of final disposal of the section 9 petition, on merits. Conclusion - The demand notice dated 31.03.2021 issued by the appellant to the KMP of the Corporate Debtor and delivered at the registered office of the Corporate Debtor, can be construed as a deemed service of demand notice as required under section 8 of the IBC. This appeal stands allowed by setting aside the orders impugned herein and the matter is remanded to the NCLT, which shall entertain the section 9 petition and decide the same afresh, on merits, after providing reasonable opportunity to the parties by letting in oral and documentary evidence.

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• 2025 (5) TMI 81
  Determination of nature of Provident Fund (PF) dues - employer s contribution under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act), constitute an asset or a debt of the corporate debtor for purposes of the Insolvency and Bankruptcy Code, 2016 - PF dues forms part of the resolution plan or not - HELD THAT:- The provident fund of an employee is a combination to two components. Employees Contribution, being that amount, which is deducted from the salary/wages payable to an employee, which deduction is made by the employer. The other component being the contribution to be made by the employer, generally known as the Employer s contribution. Both combined, constitute the provident fund of an employee. Under section 5 (1) of the EPF Act, a fund is required to be established after framing of the Employees Provident Fund Scheme, which is to be administered by the Board constituted under section 5A of the EPF Act - In case there is any dispute as to the applicability of the provisions of the EPF Act or the contribution of the employer, such a dispute is to be determined by the authorities as provided under section 7-A of the EPF Act, in the mode and manner as provided thereunder. Section 7-B of the EPF Act provides for a review of the order passed under section 7-A. Section 7-B (5) of the EPF Act, provides for an appeal against an order passed under review as if the order passed under review were the original order passed by the Reviewing Authority under section 7A. Under section 7-I of the EPF Act, an appeal lies to the Tribunal as constituted under section 7-D of the EPF Act. The Provident Fund is in sum and substance the property of an employee, part of which is contributed by such employee and part by the employer. Though part of the provident fund is contributed by the employer, however in terms of sec.6 of the EPF Act, it is on account of a Statutory obligation and though at times, if for any reason, such contribution is not paid by the employer, that however, cannot mean that the employers contribution to the provident fund, would become the property or asset of the employer, over which he would have control or dominion of disposition, for in such a case it would be held by the employer in trust for the employee as the employers contribution to the provident fund - The protection against attachment to the provident fund as envisaged by section 10 of the EPF Act, as indicate, hereinafter, not only supports, but emphasizes the primacy of workers dues over everything else. The Provident Fund of an employee, which includes both the components (a) employee contribution and (b) employers contribution, cannot be held to be assets , over which the corporate debtor can be held to have any rights of ownership or dominion and would, even in case it is not deposited in the Provident Fund account, by the employer would continue to be property owned by the employee, held in trust by the employer, on behalf of the employee for being deposited in the provident fund account and thus would be outside the scope and ambit of the duties of the IRP as specified in Sec. 18 of the IB Code. There cannot be any doubt that payment of the employers provident contribution is on account of the statutory imposition arising under the EPF Act. It is however equally true that the same is not payable to the Central Government, any State Government or any Local Authority, but it is payable in the Fund established under sec.6 of the EPF Act, which is administered by the Board as constituted under the provisions of the EPF Act, which is an independent body. Conclusion - The claim of the respondents, cannot be said, to have been wiped out, on account of the resolution plan having been approved by the Committee of Creditors and consequently by the adjudicating authority and would be a claim, which is beyond the scope and ambit of Chapter II of the IB Code, and thus is a claim, which is payable by the petitioners. Since the claim is for a period earlier than the insolvency commencement date, there is no call for issuance of any directions in that regard. The petition fails and is dismissed.

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• Law of Competition

• 2025 (5) TMI 80
  Anti-competitive practice - tying of DoubleClick for Publishers (DFP) with Google s Ad Exchange (AdX) into Google Ad Manager - abuse of dominant position - Section 3(4) of the Competition Act, 2022 - HELD THAT:- The allegation of the Informant in the present mater primarily relates to various ad-tech intermediation services provided by Google and the DG is already investigating certain aspects of such ad-tech intermediation services provided by Google in Case Nos. 41 of 2021, 10 of 2022, and 36 of 2022. Thus, the subject matter of the allegations made in the instant Information is substantially the same, with the subject matter under examination before the DG in the said ongoing investigation. Accordingly, in terms of proviso to Section 26(1) of the Act, the Commission decided to club the present matter with Case Nos. 41 of 2021, 10 of 2022, and 36 of 2022. Resultantly, the DG is directed to investigate various practices in the ad-tech intermediation services, as alleged by the Informant, in a comprehensive manner and submit a consolidated investigation report in the matter. Conclusion - The prima facie material on record indicates potential contraventions of Sections 3(4) and 4 of the Competition Act, 2022 by Google in respect of its ad-tech intermediation services. The Secretary is directed to send a copy of this order along with the Information to the Office of the DG forthwith.

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• PMLA

• 2025 (5) TMI 79
  Money Laundering - validity of search and seizure conducted under Section 17 of the Prevention of Money Laundering Act, 2002 (PMLA) at the residence of the petitioner - reasons to believe - legality of statements recorded under Section 17(1)(f) and summons issued under Section 50 of the PMLA - HELD THAT:- While the legality and correctness of the impugned judgment and order is under consideration in the appeal already admitted and slated to be listed on the next date, in the mean time, it would not be proper to interject the process of investigation by the applicant-Directorate of Enforcement. The investigation into crime is something which should not be allowed to be halted. Having regard to the peculiar fact situation, the Enforcement Directorate has to be permitted to proceed with the investigation. While, therefore investigation under the PML Act is not to be hampered or put on hold, nor would stand affected adversely for its continuance, in relation to the alleged scam. The investigating authority-the applicant-Directorate of Enforcement, notwithstanding the judgment and order of learned Single Judge impugned in this appeal is allowed to investigate into the matter. While the prayer for stay of the impugned judgment and order in totality as advanced by the applicant cannot be accepted, the Court herewith clarifies, observes and provides that the impugned judgment and order shall not bar the applicant-investigating agency from proceeding with the inquiry and investigation in accordance with law, in respect of other accused and other persons, who may be needed to be enquired or investigated in connection with the case, notwithstanding the impugned judgment and directions in case of the petitioner. As the Court has permitted the inquiry and investigation to be continued against the other accused as well as other persons as may be required, the applicant-Enforcement Directorate-the investigating agency shall be at liberty to utilize all the documents and materials which may have been gathered, recovered and secured in course of the search and seizure at the place of the petitioner, as well as to utilize the statement recorded, for the purpose of rest of the investigation in accordance with law. This would not prejudice the respondent-petitioner as his case is pending consideration on merits. Whether petitioner s statement recorded under 17 (1) (f) of the PML Act, 2002 can be ordered to be retracted by the court, is also an issue at large to be considered in appeal. All investigations under the PML Act are needed to be permitted to be carried on in accordance with law, notwithstanding the directions in the operative order of learned Single Judge impugned in the appeal. The applicant-investigating agency therefore is entitled to proceed and to carry on the investigation in respect of other persons or accused, in accordance with law. Conclusion - The investigation under the PMLA is a continuous process and courts should refrain from interfering with it at the nascent stage, except in cases of clear abuse of process. Application disposed off.

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• 2025 (5) TMI 78
  Money Laundering - validity of attachment of properties under the PMLA, when the same properties are already seized and under custody of the State Police in a disproportionate assets case - overriding provisions of PMLA over Cr.P.C. - HELD THAT:- The properties were initially seized by ACB of Rajasthan Police, Distt. Ajmer in the disproportionate asset case against the appellants. However, respondent ED pressed for attachment of the properties, as per the provisions of PMLA Act, 2002. In my view, the provisions of PMLA will override the provisions of Cr.P.C. for the purpose of seizure/attachment/confiscation of the properties. However, seeing the fact that the order of confiscation was already passed by Ld. Special Judge Designated Court, Ajmer, the Respondent ED is at liberty to challenge the same before the Hon ble High Court of Rajasthan being an inter-se dispute between the two investigation agencies on the issue that whether the said properties will stand confiscated to the State Government or the Central Government. However, the present appellants have no right to challenge the impugned orders of confirmation of the attachment, as it is matter of record that appellants have generated the proceeds of crime/ disproportionate assets, by criminal misconduct in acquiring the disproportionate assets to the knowns sources of the income committed by Sh. Surendra Kumar Sharma, the then, public servant along with his family members, who abetted him to purchase the properties in their names, after considering the fact that they are already convicted in the trial for commission of predicate offence. Conclusion - The provisions of PMLA will override the provisions of Cr.P.C. for the purpose of seizure/attachment/confiscation of the properties. The Respondent ED is at liberty to challenge the order of confiscation passed by the Special Judge before the Hon ble High Court of Rajasthan being an inter-se dispute between the two investigation agencies. Appeal dismissed.

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• 2025 (5) TMI 77
  Money Laundering - scheduled offences - provisional attachment of properties mortgaged with appellant banks - HELD THAT:- Admittedly, the period of commission of scheduled offence is from 2010 to 2017 and FIR was registered in the year 2018. Two Loans of Rs. 4 Crore each were sanctioned by SBI on 16.11.2015 against the two properties mortgaged to it, as mentioned in para no. 1 above. 14 properties were mortgaged to Axis Bank including the two mortgaged properties with SBI, against the loan of Rs. 40 Crore sanctioned on 28.12.2015. The contention of learned counsel for Respondent ED is agreed upon that collusion of the officials/management of banks with the mortgagors and Directors of M/s DPIL is not ruled out. However, this issue needs to be decided by learned Special Judge, PMLA Court, whether the appellant banks were part and parcel of any conspiracy for sanctioning and releasing the loan without due diligence, or by overvaluation of the mortgaged properties. However, being a secured mortgagee of the aforementioned properties, the appellant banks are at liberty to stake its claim before learned Special Judge, PMLA Court, u/s 8(5) to section 8(8) of the PMLA, 2002, with notice to the other secured and unsecured creditors and after seeing the role of present appellants for colluding with accused M/s DPIL and its Directors for releasing loan against the norms, if any. Ld. Special Judge, PMLA Court can also entertain the application for auction of the mortgaged properties even before the conclusion of trial, u/s 8(7) of PMLA is filed by the Consortium of banks for auction sale and the proportionate distribution amongst them as per the respective outstanding liabilities of the borrowers/guarantors, with condition that any excess amount (if any) after realization of outstanding liabilities will be kept by way of FDR in the name of ED, for disposal as per final outcome of the trial in the PMLA case. Conclusion - The Adjudicating Authority being satisfied with the allegations made in the Original Complaint, coupled with the statements recorded under Section 50 of PMLA and the relied upon documents, formed the reasonable belief and thereby issued the Show Cause Notice and confirmed the Provisional Attachment Order. Appeal disposed off.

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• 2025 (5) TMI 76
  Money luandering - failure to file requisite Cash Transaction Reports (CTRs) for integrally connected cash transactions exceeding Rs. 10 lakhs in aggregate per month - HELD THAT:- It is not inclined to accept the contention of the Ld. Counsel for the appellant for giving simple warning, and therefore, some penalty needs to be maintained for the said admitted contravention. Hence, by taking a lenient view, the quantum of penalty reduced from Rs. 50,000/- each for 9 CTRs to a consolidated penalty of Rs. 50,000/- for not reporting all the 9 CTRs in time. Further, appellant bank is hereby directed to pay penalty of Rs. 10,000/- for failure to put in place in effective internal mechanism for detection and reporting of suspicious transactions in time, instead of Rs. 1 Lakh, as no irregularity was reported for the year 2014-15 onwards. Hence, the appellant bank is hereby directed to pay a total penalty of Rs. 60,000/-. Conclusion - The failure to file Cash Transaction Reports (CTRs) for integrally connected cash transactions aggregating Rs. 10 lakhs or more in a month constitutes a clear contravention of Section 12(1)(b) of the PMLA read with Rule 3(1)(B) of the PML Rules, 2005. Appeal disposed off.

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• Service Tax

• 2025 (5) TMI 75
  Extended period of limitation - suppression of facts or not - issuance of SCN is in consonance with the principles of natural justice or not - HELD THAT:- This Court finds that after issuance of the show cause notice dated 17.10.2020, the petitioner responded to the said notice by filing a defence reply dated 12.02.2024. The copy of the defence reply has not been brought on record of the writ application by the petitioner. However, learned Senior Counsel for the petitioner has contended that the Respondent No. 3 has not considered the submissions made in the written defence reply. The judgment of the Hon ble Supreme Court in the case of Northern Operating Systems Private Limited [ 2022 (5) TMI 967 - SUPREME COURT] was relied upon earlier before this Court in the case of Ramnath Prasad [ 2025 (2) TMI 301 - PATNA HIGH COURT] and this Court has held that the requirement to prove fraud and collusion is the extent to evade duty. This is a question of fact and may be properly adjudicated by either the Adjudicating Authority or the Appellate Authority. Prima-facie, we find that the Adjudicating Authority has discussed this issue so we will have a glance over the same to satisfy over the same to satisfy oneself as to whether any jurisdictional error may be found in this regard in the impugned order. On going through the various judicial pronouncements as to the subject that what would constituent a fraud, suppression or collusion, this Court finds in the facts of this case that this petitioner having surrendered his service tax registration had not disclosed the transactions in ST-3. The Taxing Authority were not aware of this, they were looking for cooperation on the part of the petitioner, they called for relevant information and records during investigation but the petitioner did not provide those information to the Taxing Authority. In such circumstance, if the Taxing Authority has taken a view that it is a case of suppression and the facts which have surfaced during investigation were not earlier known to them and they would not have come to know it if the investigation would not have taken place, cannot be found fault with - This Court is, therefore, of the prima-facie view that no jurisdictional error has been committed by the respondent no. 2 or respondent no. 3 in invoking the extended period of limitation of five years under proviso to Sub-Section (1) of Section 73 of the Act of 1994. There are no reason to interfere with the demand-cum-show cause notice dated 17.10.2020 as contained in Annexure P-1 and the order dated 04.07.2024 as contained in Annexure P-4 , on jurisdictional issues. Application disposed off.

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• 2025 (5) TMI 74
  Demand for service tax along with interest and penalty - income derived from legal services - non-payment of service tax for he contravened the provisions under Sections 67, 68, 69 and 70 of the Finance Act read with Finance Rules - HELD THAT:- It is true that the Petitioner in the instant case is undisputedly a legal practitioner. He is an individual lawyer practicing at Bhubaneswar and such averments of the Petitioner are not disputed by the Opposite Parties. It appears from the demand-cum-show cause notice under Annexure-3 that pursuant to third party disclosure, i.e. Income Tax Department, regarding income of the Petitioner such demand for service tax has been made by the Department. Thus, in view of the admitted fact that the Petitioner is a practicing lawyer and the earlier directions issued by this court, as stated above, as well as the instructions issued by the Department the Petitioner is exempted from levy of service tax for such income he derived from his legal service as a Lawyer. Thus, the demand-cum-show cause notice dated 15th April, 2021 (Annexure-3) and the order of recovery dated 28th January, 2025 (Annexure-5) are quashed to the extent it relates to demand of service tax from the income of the Petitioner from his profession as an individual lawyer. At the same time we notice that the Petitioner has disclosed his income from house property in the income tax return for the Assessment Years 2018-19 and 2020-21. So it is open for the Department (Opposite Parties) to proceed in respect of the income from house property, if any applicable, to levy service tax in accordance with law. With aforesaid observation and direction the writ petition is disposed of.

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• 2025 (5) TMI 73
  Availing the benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) -Failure to make payment due to technical glitches in the web portal - payment made after the prescribed cut-off date - It is the grievance of the petitioner that despite having made payment as called upon by the respondents under the SVLDRS, the respondents have issued a letter as a result of which, account of the petitioner at Andhra Bank, Bangalore has been frozen / blocked and since the requests by the petitioner including representation submitted by it to the respondents for issuance of discharge certificate in favour of the petitioner were not complied with by the respondents, petitioner is before this Court by way of the present petition. HELD THAT:- As the judgment of M/s Kivi Sansho Packaging Pvt. Ltd. Vs. Union of India and others is directly and squarely applicable to the facts of the instant case, particularly when the petitioner herein has made payment on 01.10.2020 itself and consequently, the impugned notices / letters at Annexures B and C dated 24.02.2021 and 12.03.2021 deserve to be quashed. In the result, I pass the following:- Petition is hereby allowed. The impugned notices / letters at Annexures B and C dated 24.02.2021 and 12.03.2021 issued by the 2nd and 3rd respondents are hereby quashed. The concerned respondents are directed to accept payment made by the petitioner on 01.10.2020 towards SVLDRS Scheme and proceed to take necessary steps to issue the Discharge Certificate in Form SVLDRS-4 in favour of the petitioner in accordance with law, within a period of four weeks from the date of receipt of a copy of this order.

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• 2025 (5) TMI 72
  Demand to pay service tax - Construction of residential complex service - Taxability and classification of Preferential Location Charges (PLC) - Section 65(105)(zzzzu) of the Finance Act, 1994, or whether these charges form part of the consideration for the construction of residential complex service - invocation of the extended period of limitation - HELD THAT:- We observe that the PLC, are inextricably linked to the construction of complex service provided to the customer as a preferential location/unit is asked for from the service provider among several other locations/units which are constructed by him while providing Construction of Complex Service. Thus PLC is an additional amount received by the service provider with respect to few among all locations/units constructed but it cannot be an amount for another service, as seeking an option of paying extra cannot be called as receiving a service. The transaction is therefore, on account of the property being sold to the buyer and there appears no separate existence of such charges. Section 66F(3) (a) of the Finance Act and Para 9.2.4 of the Education Guide as discussed above makes it clear that amount of PLC received is the part of value received for rendering construction of Residential Complex Service. PLC recovered from the customers will always be naturally bundled and shall form part and parcel of the transaction for sale of unit and such transaction takes place in ordinary course of business. Accordingly, Service Tax shall be chargeable on the amount recovered towards the same at the abated rate, which is applicable to the principal service of construction of a complex, including unit intended for sale to a buyer. Further, as abatement Notification No. 26/2012-ST specifically covers the services of construction of a part of any complex or building, benefit of abatement to the extent of 75% from the value of taxable service is available to the appellant with respect to PLC also. In fact PLC is the part of gross value paid for Construction of Complex Service. Since Service Tax is leviable at abated value, thus, Service Tax paid on the aforesaid charges at abated value stands justified, is held to have been rightly availed by them. Thus, it is clear that the entire transaction has to be treated as that for construction of units sale of land in terms of Section 66F of the Act. The demand is therefore liable to be set aside. We further observe that the issue is no longer res-integra. Amount of PLC is already held to be the part and parcel of the various elements of the main service which is Residential Complex Service and therefore the entire consideration received also has already been held eligible for abatement under said notification no. 26/2012-S.T. Accordingly, we hold that order under challenge has wrongly held PLC as the consideration received for activity different than Construction Service . The amount being part of the bundle, as discussed above, is wrongly denied the abatement benefit of Notification No. 26/2012. Section 65B(44) defines service to mean any activity carried out by a person for another for consideration. Explanation (a) to section 67 provides that consideration includes any amount that is payable for the taxable services provided or to be provided. The recovery of liquidated damages/penalty from other party cannot be said to be towards any service per se, since neither the appellant is carrying on any activity to receive compensation nor can there be any intention of the other party to breach or violate the contract and suffer a loss. The purpose of imposing compensation or penalty is to ensure that the defaulting act is not undertaken or repeated and the same cannot be said to be towards toleration of the defaulting party. The expectation of the appellant is that the other party complies with the terms of the contract and a penalty is imposed only if there is non-compliance. The activities, therefore, that are contemplated under section 66E (e), when one party agrees to refrain from an act, or to tolerate an act or a situation, or to do an act, are activities where the agreement specifically refers to such an activity and there is a flow of consideration for this particular activity. Invocation of the extended period of limitation , we observe that appellant was maintaining all the records, and the demand was proposed basis the records of appellant only. Also, no element of fraud or suppression has been established in the Impunged Order. Further, it is submitted that the Appellant was under the bonafide belief that it was not liable to pay Service Tax in the alleged manner. The Appellant followed a reasonable and correct interpretation of law. Further, demand was proposed pursuant to audit. Also, returns were periodically filed before the Department by Appellant on the basis of self-assessment and it was the responsibility of the Department to scrutinize such assessment to verify its correctness. Thus, suppression of facts with mala fide intent cannot be alleged. Hence, we hold that extended period of limitation has wrongly been invoked while issuing the show cause notice. Reliance in this regard is placed on the decision in the case of G.D. Goenka Pvt. Ltd. Vs. Commissioner of Central Goods Service Tax, Delhi South [ 2023 (8) TMI 995 - CESTAT NEW DELHI] Therefore it is held that the demand for the extended period is wrongly confirmed. Finally, it is also observed that the present SCN was issued for period July 2012-September 2015 i.e. for the negative list regime where classification based levy ceased to exist. Thus, demand proposed by invoking/examining obsolete provisions and without analyzing relevant provisions i.e. Section 65B (44) of the Act or 66E (b) of the Act, is not sustainable. Hence the demand even for the normal period is liable to be set aside. Hence, the order under challenge confirming even the partial demand is set aside and the appeal is allowed.

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• 2025 (5) TMI 71
  Demand to pay service Tax under the category of renting of immovable property service - meaning of Section 65(105)(zzzz) of the Finance Act, 1994 - refund claim of Service Tax - term Scope of Work - HELD THAT:- On going through the agreement placed on record by the appellant, it is an admitted fact that the appellant is receiving a lease rent of Rs.32,00,000/- per month from the lessee. Section 65(105)(zzzz) of the Finance Act,1994 mandates that any service provided or to be provided to any person, by any other person, in relation to renting of immovable property, for use in the course of furtherance of business or commerce, comes under this category. Admittedly, the appellant does qualify under the above definition of renting of immovable property service. Similarly, as per clause 90(a) of Section 65 of the Act, renting of immovable property includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce. Admittedly, the appellant does qualify under the above categories of renting of immovable property service, for leasing out their plant along with immovable property to the lessee against a consideration of Rs.32,00,000/- per month. Thus, we find that the appellant is liable to pay Service Tax under the category of renting of immovable property service. From the agreement, it is evident that the appellant is liable to pay Service Tax under the category of renting of immovable property service. Thus, we hold that the authorities below have rightly rejected the refund claim of the appellant. Consequently, we uphold the impugned order. In these terms, we do not see any merit in the appeal and accordingly, the same is dismissed.

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• 2025 (5) TMI 70
  Demand of service tax along with penalty imposed under Section 78 of the Finance Act, 1994 - differential value of services - Value of Sale of Services as declared in Income Tax returns - taxable value of services declared in the ST-3 returns filed with the Service Tax Department - exemption for supply of Maintenance and Repair Service of a vessel pertaining Naval Dockyard as SEZ - HELD THAT:- Firstly, the original authority did not take into account the various details already filed by the appellants in the periodic ST-3 returns and therefore, the demand had come down upon examination of the details at the stage of adjudication from Rs. Rs.1,04,09,610/- to Rs. 6,27,128/-. Further, such confirmed amount of service tax upon proper determination of the applicable rates of service tax during the disputed period and also on examination of the merits of the service tax exemption notification applicable in the case of appellants, had further been reduced to Rs.1,82,290/- by the learned Commissioner (Appeals). Therefore, the aforesaid instructions of the CBIC that firstly the SCN should be issued after proper verification of the facts, and if this has not been done then the adjudicating authorities are expected to pass a judicious order after proper appreciation of the facts and details submitted by the appellants, squarely applies to this case. Thus, the provision of imposition of penalty under Section 78(1) ibid is not legally feasible in the absence of any specific grounds for suppression, fraud etc., and the same cannot stand the scrutiny of law. Therefore, the appeal filed by the appellants is allowed, by partially modifying the impugned order, to the extent of setting aside the portion of the order which has confirmed the penalty under Section 78(1) of the Finance Act, 1994 for an amount of Rs.1,82,290/-.

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• 2025 (5) TMI 69
  Demand for service tax on various charges like Terminal Charges, Packing Charges, Unloading Charges, Overtime Charges, etc. along with interest and penalty - Appellant s activities as a custodian under Section 45 of the Customs Act, 1962 for all goods unloaded in the customs area meant for import, export, and transhipment - HELD THAT:- As seen from the definition provided at Section 65(23), it categorically excludes handling of export cargo and there is no dispute that all the above charges are collected from customers of export cargo. There is also no dispute that the appellant was appointed as a custodian under Section 45 of the Customs Act, 1962 and the warehousing activities were specifically covered under Section 58 of the Customs Act, 1962. The adjudicating authorities in the impugned order ignoring these facts blindly confirms the demand based on the Board s Circular which only clarifies that the terminal charges form part of storage and processing charges which has no relevance to the services provided by the appellant with regard to export Cargo, hence we do not find any justification in confirming the demand under storage and warehousing services . The Circular also clearly specifies that the services provided in relation to export cargo and passenger baggage are excluded from tax net. Hence, demand on Cargo Handling Services for the export purpose cannot be sustained. The reliance placed by the Commissioner on the above circular is misplaced as the terminal charges referred therein is against storage and warehousing charges and as rightly claimed by the appellant, they are the custodian under Section 45 of the Customs Act 1962. Thus, service tax demanded on unaccompanied baggage is to be set aside. The circular with regard to abandoned cargo also clarifies that no service tax is leviable under the category of Cargo Handling Service . Thus, the impugned orders are set aside and both the appeals are allowed.

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• 2025 (5) TMI 68
  Demand of service tax along with interest and Penalty - Reverse Charge Mechanism (RCM) on royalty payment to its foreign parent company for software licensing - Section 76 of Finance Act 1994 (Act) - revenue neutral situation. HELD THAT:- We find that in view of the Statutory Provisions, the demand of service tax made as well as confirmed in the adjudication proceeding does not suffer from any infirmity, as a ground of revenue neutrality cannot be a generic defence in all cases for not raising the demand as such. Had it been the Statutory Provision, the very purpose of making the provisions for payment of service tax on reverse charge basis or payment of duty even for inter unit transfer or sale to related companies would become otiose as it is very well known that if any service tax is paid by a service provider or excise duty is paid by manufacturer, the receipt of such goods as service would be entitled to take the credit and thereafter utilise the same for payment of further service tax liability, or central excise duty. However, taking of credit and utilisation thereon is regulated in terms of Cenvat Credit Rules. Such revenue neutralities may be considered as a valid ground as defence for non-invocation of extended period or imposition of penalty etc., where suppression, mis-statement etc., are alleged. However, in a situation where the penalty is not being imposed under Section 78 nor any extended period is being invoked, the ground of revenue neutrality cannot be interpreted in a manner so as to nullify the entire demand itself and as a consequence also nullifies the demand of interest and imposition of penalty under Section 76 also. Therefore, we are of the considered opinion that the plea of revenue neutrality for non-maintenance of demand, per se, and consequentially non- recovery of interest as well as non-imposition of penalty under Section 76 is not tenable. We, however, find that there has been substantive compliance by the appellant when they paid the non-paid service tax even before the issue of show cause notice and in fact paid some interest thereon. We also note that there is no allegation of any suppression, fraud etc. The Adjudicating Authority has imposed penalty under Section 76 at the maximum permissible. We find that in the facts of the case, the penalty of Rs. 10,00,000/- would be just and accordingly modify the amount of penalty imposed. Thus, we find no infirmity in the order of the Commissioner except to the extent modified, supra, and accordingly upheld the impugned order. Appeal allowed partly.

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• 2025 (5) TMI 67
  Demand to pay service tax - failure to file ST-3 returns - imposition of late fee under Section 70(1) of the Finance Act, 1994 read with Rule 7C of the Service Tax Rules, 1994 - service recipient under Reverse Charge Mechanism - HELD THAT:- The findings are absolutely erroneous rather vague. As per Notification No. 10/2014 the appellant is not the person liable to pay service tax. Section 70 of Finance Act read with Rule 7C of Service Tax Rules as invoked by the department does not apply on the appellant. Also when Circular dated 23.08.2007 doesn t require the Return when the assessee is entitled for some exemption. The present appellant, the provider of service also is exempted from paying service tax as Notification No. 10/2014 requires tax from recipient of service under Reverse Charge Mechanism. The appellant also gets covered under the said circular and thus is not liable to file the Service Tax Returns. The circulars are binding as the departmental authorities, the impugned order is contrary to the clarification in the said circular hence is hereby set aside. Consequent thereto, the appeal is hereby allowed.

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• 2025 (5) TMI 66
  Demand of Service Tax along with the interest and penalties - Payment of license fee to the Railways for providing catering services on board trains - scope of taxable services under section 66D of the Finance Act - Issuance of Show Cause Notice invoking the extended period of limitation - applicability of the reverse charge mechanism. Held That:- Perusal of the order reveals that the issue as framed above has been decided by this Tribunal in favour of the assessee. Even Commissioner (Appeals) has dropped the demand of Rs.1,43,55,406/- for the period 2013-14 to 2015-16 alongwith interest and penalty on this issue while relying upon several decisions with reference to support services. The balance demand of Rs.50,98,356/- for the period 2016-17 has been confirmed based on the amendment in the notification No.30/2012 dated 20.06.2012 but once the amount of licence fee paid itself is denied to be the consideration towards taxable service, question of any liability of appellant, service provider under Reverse charge mechanism (Notification No.30/2012) doesn t at all arises. The partial demand confirmed is also about the catering service being rendered by the appellant. Hence the confirmation of partial demand by Commissioner (Appeals) is also not sustainable. Therefore, the Order-in-Appeal dated 24.01.2019 is hereby set aside. Consequently, the appeal is allowed.

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• 2025 (5) TMI 65
  Demand for service tax along with the interest and the appropriate penalties - Miscellaneous income - Forfeiture of security deposit/earnest money deposit and fines or penalties - scope of declared services u/s 66E(e) of the Finance Act, 1994 - definition of service u/s 65B(45) - Miscellaneous income - HELD THAT:- From persual of the record, it becomes abundantly clear that the issue of considering a forfeited amount as an amount of consideration towards declared services stands already settled in favour of the assessee. The same is already held to not to be the consideration towards rendering declared service defined under section 66E(e) of the Finance Act, 1944. In fact the cancellation of contract itself is held to not to be a service. We find no reason to differ from these findings. We further observe that department also vide Circular No.214/1/2023-ST dated 28th February, 2023 has clarified about leviability of service tax on the declared services, agreeing to the obligation to refrain from an act or to tolerate an act or a situation, or to do an act under clause (e) of section 66E of Finance Act, 1994 and has clarified that the activities contemplated under section 66 E (e) i.e. when one party agrees to refrain from an act or to tolerate an act or a situation, or to do an act, are the activities where the agreements specifically refers to such an activity and there is a flow of consideration for this activity. In appellant s own case vide Final order No. 59733/2024 dated 04.11.2024, CESTAT Delhi, while relying upon the decision of South Easter Coal [ 2023 (8) TMI 606 - SC ORDER] has set aside the demand of service tax confirmed on the identical allegations holding that the penalties, fines and forfeited amounts cannot be treated as consideration towards declared services defined under section 66 E(e) of the Finance Act. We observe that adjudicating authorities below have ignored the earlier decisions. Hence, the act of the authority is held to be an act of judicial indiscipline. The authorities below are warned to be careful in future. Such an order of reflecting judicial indiscipline is otherwise not sustainable. We draw our support from the decision in the case of Vishnu Traders vs. State of Haryana and Others [ 1993 (11) TMI 230 - SUPREME COURT] . Thus, the order under challenge is hereby set aside. Resultantly, the appeal is allowed.

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• 2025 (5) TMI 64
  Demand for service tax on Works Contract Services - reverse charge mechanism - construction of warehouses for the Rajasthan State Warehousing Corporation Ltd. (RSWC) under the PEG Scheme for augmenting food grains storage - mega exemption notification no.25/2012 dated 20.06.2012 - negative list under section 66(d). HELD THAT:- From perusal of the provisions, it is clear that the activity of the appellant is of construction of such warehouses as are meant for agricultural produce and not of such nature as mentioned in said clause of section 66D. However, admittedly, it is an activity of construction of warehouse under PEG Scheme to Augment Food grains Storage as apparent from work order dated 28.06.2012 issued by RSWC in favour of appellant. Hence, the activity in question is an activity covered under entry no.14 of notification no.25/2012 dated 20.06.2012. Though the department contention that the activity is not covered under the negative list is accepted. However, as observed above, the activity/services rendered by appellant gets fully covered under the mega exemption notification serial no.25/2012 dated 20.06.2012. We also do not find any evidence contrary to the admitted fact for storage of post storage harvest articles. Resultantly, we held that there is no base in the impugned order for confirming even the partial demand. With these observations, the order under challenge is hereby set aside. Consequent, thereto, the appeal is allowed.

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• Central Excise

• 2025 (5) TMI 63
  Method of valuation - stock transfers of clinker to sister units based on the transaction value at which clinker was sold to independent buyers - to be valued under Rule 11 of the Central Excise Valuation Rules, 2000, or under Rule 8, based on cost of production for captive consumption? - interconnected undertakings related to each other under Section 4(2)(b)(F) of the Central Excise Act, 1944 - it was held by CESTAT that Appellant has correctly paid the duty in terms of Rule 8 of the Valuation Rules. In that circumstance, demand against the Appellant is not sustainable. HELD THAT:- The view taken by the Custom, Excise Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata agreed upon. There is no merit in the appeal and the same is accordingly dismissed.

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• 2025 (5) TMI 62
  Entitlement to a special rate of value addition @ 73.5%, which is based on the actual value of the cost of raw materials and inventory reflected in the audited financial statement - 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 this matter relates to valuation, this High Court has no jurisdiction to entertain, try and determine the issue as sought to be raised by the Commissioner of Central Excise, Customs and Service Tax, Siliguri. Liberty granted to the Commissioner of Central Excise, Customs and Service Tax, Siliguri, to approach the Hon ble Supreme Court of India for redressal of their grievances, if any, in accordance with law - application disposed off.

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• 2025 (5) TMI 61
  Applicability of Doctrine of merger - demand of duty, interest, and penalty under the Central Excise Act, 1944 - HELD THAT:- Insofar as the prayer to set aside the order in original dated 28.1.2022 passed by the Joint Commissioner is concerned, it is found that as per the doctrine of merger, the order of the Joint Commissioner merged with the order in appeal dated 17.8.2023 passed by the Commissioner (Appeals) and, therefore, it does not exist at all. Secondly, it is found that an appeal against the order of the Joint Commissioner lies to the Commissioner (Appeals) and not before this CESTAT. The Commissioner (Appeals) had already set aside the Order dated 28.1.2022 passed by the Joint Commissioner and remanded the matter to the Joint Commissioner. Insofar as the prayer to set aside the Order-in-Appeal of the Commissioner (Appeals) is concerned, it is found that since an order dated 12.11.2024 has since been passed by the Additional Commissioner in pursuance of the impugned order dated 17.8.2023, this appeal has become infructuous. If the appellant is aggrieved by the order dated 12.11.2024, it can seek remedy as per the law. Appeal dismissed.

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• 2025 (5) TMI 60
  Admissibility of CENVAT credit of service tax paid on goods transport agency [GTA] services availed for outward transportation of goods from the factory gate/depot of the appellant to the premises of the customer under rule 2(1) of the 2004 Credit Rules - levy of service tax on fine/penalties, retention money and liquidated damages , against delayed completion of works or non-performance of contract under section 66E(e) of the Finance Act. Admissibility of CENVAT credit of service tax paid on GTA services - HELD THAT:- It is clear from the invoice dated 25.06.2016 that the appellant had not charged freight charges separately and they were included in the value for delivery of the goods to the premises of the buyers. The appellant, therefore, cleared the finished goods to the buyers on FOR destination basis. The agreement executed with JSW Steel Coated Products Ltd, when read with the Memorandum of Understanding, also shows that the delivery terms were on FOR basis. In such circumstances, the finding recorded by the Commissioner that no evidence was led by the appellant to establish that delivery was on FOR terms is clearly erroneous as all the relevant documents had been submitted by the appellant - the appellant was clearly entitled to avail CENVAT credit of service tax paid on GTA services for onward transportation of goods from the factory gate of the appellant to the premises of the customers. Demand of service tax on fines, penalties, retention money and liquidated damages - HELD THAT:- The issue is covered by a decision of this Tribunal in South Eastern Coalfields [ 2020 (12) TMI 912 - CESTAT NEW DELHI] . The Tribunal held that It is, therefore, not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the appellant towards consideration for tolerating an act leviable to service tax under section 66E(e) of the Finance Act. Conclusion - i) Since the place of removal is the premises of the buyer, the appellant was clearly entitled to avail CENVAT credit of service tax paid on GTA services for onward transportation of goods from the factory gate of the appellant to the premises of the customers. ii) It is, therefore, not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the appellant towards consideration for tolerating an act leviable to service tax under section 66E(e) of the Finance Act. The impugned order dated 30.09.2022 passed by the Commissioner, therefore, deserves to be set aside and is set aside. The appeal is, accordingly, allowed.

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• 2025 (5) TMI 59
  Demands of Central Excise duty on freight along with interest and penalty - clubbing of the value of purchases - addition of freight with clearance value to deny the benefit of SSI exemption on the first clearance value - HELD THAT:- From the Profit and Loss Account of the appellant company, we observe that the appellant has been involved in trading of the control panel purchased from MCG Electrocontrols Pvt, in addition to their own manufacturing of the control panels. Thus, it is clear that the Department has accepted the trading activity of the appellant company. However, the trading value pertains to the purchases made by the appellant company from MCG Electrocontrols Pvt. Ltd. has not been considered as trading activity of the appellant company. We observe that there is no evidence brought on record to include the trading value along with their own manufactured goods. Therefore, we hold that the Department has not brought in any evidence to establish that MCG Electrocontrols Pvt Ltd. is a dummy unit of the appellant. Accordingly, we hold that the demand of central excise duty confirmed in the impugned order by including the value of purchase made by the appellant from MCG Electrocontrols, is not sustainable and hence we set aside the same. Since the demand of duty is not sustainable, the question of demanding interest and imposing penalty does not arise. Hence, we set aside the impugned order and allow the appeal filed by the appellant with consequential relief, if any, as per law.

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• 2025 (5) TMI 58
  SSI exemption - clubbing of clearances - Eagle brand flasks were finally assembled and manufactured at the premises of the appellant - premises was shared by both the Appellant and M/s Shanti International, a partnership firm - HELD THAT:- It is a fact on record that the course of search of the appellant s premises, no manufacturing activity was observed by the visiting team. The Appellant has been consistently stating that he is getting the goods manufactured by various small scale manufacturers in rural area which is exempted from levy of excise duty. The investigation has not brought any contrary evidence either. If the Eagle brand flasks are manufactured in rural areas, then the said goods are eligible for the exemption provided under the above said notification. From the impugned order, it is observed that the Ld. Adjudicating Authority refers to the statement of the Applicant that though he is not having any manufacturing unit, he gets the goods manufactured by various job workers by supplying raw materials, moulds etc. and that various parts of the flask likewise is manufactured by job workers and finally assembled at their premises 5/1, Height Road, Liluah, Howrah. Flasks along with packing boxes [inner and outer covers with the brand name Eagle ] are sent to an address in village Bhattanagar in Anandpur, Liluah for final manufacture of the Vacuum Flask . Thus, we observe that the Ld. adjudicating authority in his findings accepts that the final products after packing the goods ready with the brand name of Eagle ready for sale emerges at the rural area namely, village Bhattanagar in Anandpur, Liluah - the clearance of finished goods bearing the brand name Eagle by the appellant are eligible for the SSI exemption as provided under the notification 8/2003 -CE dated 01.03.2003, as amended. Hence, demand of duty from the appellant for manufacture and sale of branded goods of another person is not sustainable and accordingly, the same is set aside. Clubbing of clearnces - HELD THAT:- The Adjudicating Authority observes that both the units are operative from the same premises ; they were controlled by one single family; all the production activities were carried out in the premises of one unit and raw materials and packing materials were stored in the other premises and both the units have common office; accordingly, the value of clearances of both the units are clubbed. Regarding the role of M/s Eagle Home Appliance Pvt. Ltd., the Adjudicating authority finds that they dealt with such excisable goods on which proper central excise duty was not discharged and hence were liable to confiscation. Accordingly they were liable to penalty under Rule 26 of the Central Excise Act, 1944. Conclusion - The clearances of the appellant-company M/s. Exotic Industries (India) and that of M/s. Shanti International cannot be clubbed together for the purpose of demanding central excise duty from the appellant company. Accordingly, the demand confirmed by clubbing the value of clearances of both the companies is set aside. The impugned order is set aside - appeal allowed.

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• 2025 (5) TMI 57
  Levy of penalty under Rule 26 of Central Excise Rules, 2002 - fraudulent availment of CENVAT credit - HELD THAT:- In addition to the factual inconsistencies in the show cause notice, as highlighted by the learned Counsel for the appellants, we also find that no positive action on part of the appellants in order to allege collusion with M/s Puneet Exports Inc. has been brought on record. The fact that the appellants are job-workers and thus, are not required to maintain any records is not disputed. Under the circumstances, it is not understood as to how Revenue confirms the collusion by the appellants. It is also found that when the credit involved in respect of the appellants was only about Rs.3.73 Lakhs Rs.8.17 Lakhs and Rs.8.13 Lakhs penalty of Rs.50 Lakhs each was imposed on the appellants beyond the provisions of Rule 26 as above. The impugned show cause notice and the impugned order are not on a reasonable foundation and are not legally also tenable - Appeal allowed.

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• 2025 (5) TMI 56
  CENVAT credit on service tax paid on GTA (Goods Transport Agency) services when the credit is availed through the Head Office - denial of credit on the ground that the Head Office of the appellant is not registered as an ISD - HELD THAT:- Reliance placed on the decision of Hon ble High Court of Gujarat in the case of Dashion Ltd [ 2016 (2) TMI 183 - GUJARAT HIGH COURT] where it was held that there is nothing in the said Rules of 2005 or in the Rules of 2004 which would automatically and without any additional reasons disentitle an input service distributor from availing Cenvat credit unless and until such registration was applied and granted. It was in this background that the Tribunal viewed the requirement as curable. Particularly when it was found that full records were maintained and the irregularity, if at all, was procedural and when it was further found that the records were available for the Revenue to verify the correctness, the Tribunal, in our opinion, rightly did not disentitle the assessee from the entire Cenvat credit availed for payment of duty. Conclusion - The appellants have correctly availed the CENVAT credit on GTA services, distributed by their Head Office even though their Head Office is not registered as an ISD. Appeal allowed.

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• 2025 (5) TMI 55
  Clandestine manufacture and clearance of biris - unlabelled biris found during the search, particularly those accounted for in the appellant s RG 12A stock register - failure to maintain Daily Stock Accounts (DSA) - demand on the basis of 9(nine) sale bills of tobacco, ITRs, three cash memos and the statements, diary and loose sheets recovered during the course of investigation - HELD THAT:- All the unlabelled and labelled biris were not seized from the factory. They were seized from the residence and the rooms adjacent to the factory. Further, we observe that there is no duty on unlabeled biris upto a clearance of 20 lakh sticks. The appellant has accounted the 1,67,000 unlabelled biris in the RG 12A account. Thus, we hold that the 1,67,000 unlabelled biris which were accounted for in RG 12A are not liable for seizure. We find that all the unlabelled biris found at the time of visit of the officers have been later labelled and cleared on payment of central excise duty. Similarly, the labelled biris found not entered in the register were also accounted and cleared on payment of duty. Accordingly, the demand of duty on the 1.67 lakhs unlabelled biris accounted in their books of account as well as the labelled biris accounted in the books and cleared on payment of duty cannot be confiscated and duty cannot be demanded again on the same goods. The appellant procures unlabelled biris from the contractor. In the impugned order on the basis of the statement recorded from the contractor, it has been alleged that the appellant has procured 1,00,000 biris per day from January 2005. However, it is observed that the investigation has not done verification and confirm the same from Shri Palash Biswas. It is seen that the contractor retracted his statement by filing an affidavit before the Executive Magistrate. Thus, the retracted statement has no evidentiary value without any further corroboration. Wherever the appellant decides to manufacture labeled biris, they label it and enter in the register. Thus, having unlabelled biris in the factory or residence cannot give rise to the conclusion that they have been kept for clandestine clearance. As per rule 25(1)(b) of the said Rules if any producer, manufacturer, registered person of a warehouse or a registered dealer does not account for any excisable goods produced or manufactured or stored by him then, all such goods shall be liable to confiscation. The unlabelled biris were not required to be entered in the register maintained under rule 10 of the said Rules. Under these circumstances, the said goods are not liable to confiscation and accordingly, the confiscation of unlabelled biris made in the impugned order set aside. The demand of central excise duty has been made mainly on the basis of the 9(nine) sale bills of tobacco, ITRs, three cash memos and the statements, diary and loose sheets recovered during the course of investigation. We take note of the appellant s submission in this regard that they have categorically denied to have purchased the said 160 kgs of tobacco from M/s. Jay Hind Tobacco Store. Even if it is assumed that the purchase was genuine, it is observed that no attempt has been made to ascertain quantity of probable manufacture at the time of investigation or at the time of adjudication by the Ld. Additional Commissioner. There is no evidence available on record to show that the appellant has manufacture labelled biris liable to duty by using those tobacco - The allegation in the impugned order is that the labelled biris manufactured by the appellant were subsequently cleared clandestinely without payment of duty. It is to be noted that clandestine removal is a serious charge which needs to be established with cogent and tangible evidence. There is no such evidence for clandestine removal brought on record in this case and hence the demands confirmed without any corroborative evidence is not sustainable. In the present case, it is a fact on record that there is no evidence of manufacture of labelled biris and clandestine clearance of the finished goods without payment of duty. In this case, the investigation has merely relied upon the statement of the contractor that he was supplying one lakh biris per day and arrived at the duty liability on that basis - No evidence on record regarding receipt of money in cash for the clandestinely cleared goods. In the absence of any corroborative evidence for manufacture and clandestine removal labelled biris manufactured out of the said 160 kgs of tobacco said to have been purchased from M/s. Jay Hind Tobacco Store, the allegation of clandestine clearance is not sustainable. Further, the Income Tax Returns (ITRs) filed by the appellant for the financial years from 2005-06 to 2008-09 have been relied upon - the income declared in the returns does not show whether it was received from the sale of labelled biris cleared clandestinely. Thus, on the basis of the income declared in the ITRs it cannot be concluded that the appellant has clandestinely cleared labelled biris. The demand of central excise duty confirmed in the impugned order is not sustainable and hence we set aside the same. Since, the demand of duty is not sustained, the question of demanding interest and imposing penalty does not arise. Conclusion - i) Having unlabelled biris in the factory or residence cannot give rise to the conclusion that they have been kept for clandestine clearance. ii) In the absence of any corroborative evidence for manufacture and clandestine removal, the allegation of clandestine clearance is not sustainable. iii) Since the demand of duty is not sustained, the question of demanding interest and imposing penalty does not arise. Appeal allowed.

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• 2025 (5) TMI 54
  Clandestine manufacture and removal - shortage of goods - non-appreciation of facts and evidence - non-speaking order - based on recovery of certain documents and explanation/corroboration in terms of statements of the relevant persons of the company as well as that of dealers receiving such clandestinely removed goods - irregular availment of credit - HELD THAT:- The whole case is based on recovery of private records showing certain production of excisable goods, their clearances and also receipt on payment, etc., in relation to such clandestinely removed goods. The department has also adduced evidence to support as to from where the raw materials were brought in without accounting for the same which have been used for manufacture of certain unaccounted furniture cleared to some of the dealers, who have also corroborated the same by admitting that they have received certain chairs without payment of duty and in respect of some, they have paid to the appellant in cash - when clandestine removal takes place, there has to be certain amount of clandestine production and also use of certain unaccounted raw materials, etc., without taking them on record. Similarly, when clandestine clearances take place, the sale proceeds cannot be reflected in their regular accounts. The detailed investigation has clearly brought out various evidences in this regards, as discussed in detail by the Adjudicating Authority. It is also found that authenticity and veracity of these private records have not been denied by the Managing Director of the appellant himself and in fact, it gets further corroborated by the statements made even by the people who are not the employees of the appellant company. It is found that the various objections taken by the appellant are having one common theme that the entire case is based on self incriminating statements and there is no corroborative evidence. It is failed to understand that when the Managing Director himself has admitted the veracity of all the documents relied upon, as also the relied upon statements recorded under section 14 of the Central Excise Act, where is the room for doubting the conclusion drawn based on those documents. It is also an admitted fact that none of these statements have been retracted. In the case of CCE, Mumbai Vs Champion Confectionery [ 2010 (2) TMI 1044 - CESTAT MUMBAI] , the Bench, inter alia, upheld the demand of duty in respect of clandestine removal of goods relying on the statements, even when the said statements were retracted by the people who made the statements. While evaluating various evidences including statements, etc., it held that evidence relating to excess unaccounted stock found on the date of visit and the quantum of unaccounted clearances on certain date itself can be reasonable to conclude that the clandestine clearances are substantial. In the case of CCE, Mumbai Vs Kalvert Foods India Pvt Ltd [ 2011 (8) TMI 24 - SUPREME COURT] , the Hon ble Supreme Court has dealt with demand on the basis of clandestine removal, wherein the reliance was placed on the statement of managing director, buyer and production supervisor. The Hon ble Supreme Court, inter alia, made an observation that for the statements made before Central Excise officer cannot be considered, looked into and relied upon. Essentially, what emerges from the judgments cited is that when there is clear-cut admitted position and facts in terms of statements recorded by the responsible persons admitting narration in such private records, the conclusion drawn based on said documents along with statements of corroborative nature in itself would be sufficient evidence for alleging clandestine removal. It is obvious that in the case of clandestine manufacture and removal it cannot be proved with mathematical precision and therefore, preponderance of probability in itself would be a good ground for establishing the allegation unless it has been rebutted strongly with the cogent evidence to the contrary. In the present appeal, each and every argument and defence taken by the appellant has been considered and examined by the Adjudicating Authority before arriving at his conclusion. Therefore, there are no infirmity in the order passed by the Adjudicating Authority except to the extent of not excluding the amount from the confirmed demand where the demand itself has been dropped on merit. Conclusion - The demand of duty and penalties upheld based on a holistic evaluation of private records, admissions by the Managing Director and key employees, corroborative statements of dealers and suppliers, and consistent application of legal principles regarding clandestine manufacture and removal and irregular credit availment. Appeal dismissed.

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• 2025 (5) TMI 53
  Clandestine manufacture and removal - stainless steel (SS) billets, flats, and rounds - existence of corroborative evidences or not - allegation is based on the records recovered from the appellant itself which showed actual daily production of the goods - demand of interest and penalty - extended period of limitation - HELD THAT:- The quantity of goods shown as manufactured in the RG-1 register was lower than the quantity mentioned in the private registers. The present demand pertains to only two months namely August 2010 and September 2010. The appellant does not dispute the recovery of the documents or that the registers were their own records maintained by the staff. The submissions of the appellant is that the department failed to establish the clandestine manufacture and removal and sale of the goods through positive, cogent evidence. Clandestine removal, by its their nature, is secretive. If every transaction is recorded in official registers and documents are issued, then there cannot be clandestine removal. Therefore, clandestine removal can only be established through indirect evidences - there is positive evidence in the form of the appellant s own records maintained privately that more goods were manufactured than what was recorded in the RG-1 register. Therefore, the appellant was bound to pay excise duty on the entire production, but had paid duty only on some part of the production. The contention of the appellant is that the department should show through positive evidence that there was a clandestine removal. If there were documents showing clearance of every consignment of the appellant, then it would not be a clandestine removal. On the facts in this case, there was sufficient evidence with the department to conclude that goods were clandestinely manufactured and cleared by the appellant. As far as the demand of excise duty under Rule 2 (3) (5) of the CCR is concerned, this is on account of refractories and slag which the appellant had removed from the factory. There is no dispute about such removal - the entire demand of duty of excise in the impugned order needs to be upheld on merits. Extended period of limitation - HELD THAT:- The extended period of limitation under Section 11A (4) can be invoked if duty is not paid, short paid, not levied, short levied or erroneously refunded by reason of fraud or collusion or willful mis-statement or suppression of facts. In this case, the allegation is the suppression of part of the production by the appellant - the extended period of limitation has been correctly invoked in this case. Demand of interest - HELD THAT:- As the demand needs to be sustained consequently interest under Section 11AA also needs to be upheld. Penalty - HELD THAT:- Penalty can imposed under Section 11AC, if the duty is not paid or short paid by reason of fraud or collusion or willful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty. As it is found in favour of the Revenue on the question of suppression of facts, there are no reason to take a different view on the question of penalty under Section 11AC also needs to be upheld. Proceedings and liabilities are affected or barred by the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- This Tribunal is not concerned with nor does it have any role in recovery of any dues. The CIRP proceedings do not determine the tax liabilities but only determine the recoveries. Further, as per IBC, 2016, institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law Tribunal, arbitration panel or other authority is prohibited. This position is also reflected in para d of the order of the NCLT enclosed with the letter of M/s Shyam Sel and Power Limited - This appeal is not against the corporate debtor but by the Corporate Debtor assailing the liability of duty and penalty. It is also not about the recovery of the dues. Nothing in the IBC prohibits this Tribunal from hearing and deciding on merits an appeal filed by the Corporate Debtor against the Revenue. Conclusion - i) The clandestine manufacture and removal can be proved by indirect evidence such as discrepancies in production records, that extended limitation applies where suppression of facts is proved, and that penalty and interest follow from confirmed duty demands. ii) The insolvency proceedings do not bar adjudication of appeals on merits. There are no infirmity in the impugned order. The impugned order is upheld and the appeal is dismissed.

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• 2025 (5) TMI 52
  Refund of education cess and secondary higher education cess paid during the disputed periods under the area-based exemption N/N. 56/2002-CE dated 14.11.2002 - demand by holding that education cess and secondary higher education cess are not duties of excise and therefore, for payment of education cess and secondary higher education cess, CENVAT Credit of basic excise duty cannot be used - HELD THAT:- This issue has been settled by the Hon ble Apex Court in the case of SRD Nutrients Pvt. Ltd. [ 2017 (11) TMI 655 - SUPREME COURT ] which has been subsequently followed in various final orders passed by this Tribunal viz, Final Order in SUN PHARMACEUTICAL INDUSTRIES [ 2018 (3) TMI 2009 - CESTAT CHANDIGARH ] and Final Orders in SUN PHARMACEUTICALS INDUSTRIES [ 2018 (8) TMI 2128 - CESTAT CHANDIGARH] ]. Following the above said final orders, in the appellant s own case of the previous period, the Tribunal set aside the order of Commissioner (Appeals) and allowed the appeals of the appellant. Conclusion - The appellant is entitled to refund of education cess and secondary higher education cess for the disputed periods. The impugned order is not sustainable and is set aside - appeal allowed.

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• 2025 (5) TMI 51
  Inclusion of transportation charges in the assessable value - place of removal - suppression of facts or not - invocation of extended period of limitation - HELD THAT:- The adjudicating authority disallowed the show cause notice based on a clear finding rendered in the appellant s own case by the Commissioner(Appeals) referred to above. There is no new fact that has been brought out in the impugned proceedings by the department to negate the findings of the Ld. Commissioner (Appeals) referred supra. When it is well accepted and not being contested by the Revenue that the property in the goods did actually got transferred to the buyers at the factory gate of the appellant, and the fact of supply of goods to the buyer by the appellant separately recording the freight element cannot therefore form a part of the assessable value. It is also not disputed that the factory gate price of the impugned goods was available at all point in time for consideration by the Revenue. It is evident that the place of removal of the impugned goods is the factory gate and Central Excise duty would therefore be liable to be paid on the basic price excluding the transportation cost that has been said to be paid by the assessee and collected by the buyers at the rate prescribed in terms of the contract irrespective of the fact that the goods were delivered at the buyer s premises. In case, the point of delivery, as contended by the Revenue is to be considered as place of removal for charging of Central Excise duty, then the goods have to be further removed from the buyer s premises for sale. This indeed is not the case in the present matter. The fact that the appellant arranged for transportation of the goods at the buyer s instance cannot be a ground for loading the factory gate price with the transportation charges and the outward freight cannot be incorporated in the assessable value. The Hon ble Supreme Court in the case of Commr. of C.Ex., Chennai-II vs. Aeons Construction Products Ltd. [ 2015 (8) TMI 441 - SC ORDER] had held that transportation charges were not includible in the assessable value as property in the goods had changed hands from the assessee to the customer at the factory gate and had upheld the impugned order. Conclusion - The freight element separately shown in invoices and collected at the buyer s instance is not includible in the assessable value for Central Excise duty. The order of the Ld. Commissioner(Appeals) is not sustainable in the eyes of law and needs to be set aside - Appeal allowed.

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• 2025 (5) TMI 50
  Levy of Additional Excise Duty (AED) imposed by the Finance Act, 2014 on pre-budget stock as in existence at the time of introduction of the levy - appellant contends as per settled law, AED being a new levy, they could not be called upon to pay AED on such stocks as were in existence prior to the introduction of the same - HELD THAT:- The issue with regard to collection of a fresh levy on pre-budget stock/stock manufactured and produced before imposition of the levy has long been settled by a slew of cases. Even the CBEC vide letter D.O.F. No.334/1/2003-TRU (Pt.) dated February 28, 2003 and TRU Letter F.No.345/2/2004-TRU (Pt.) dated August 10, 2004 had clarified that the new levy imposed will not be attracted on pre-budget stock in view of the judgement of the Hon ble Apex Court in the case of CCE, Hyderabad vs. Vazir Sultan Tobacco Co.Ltd., [ 1996 (2) TMI 138 - SUPREME COURT] . The said position was reiterated by the Hon ble Apex Court vide its decision in the case of Ponds India Ltd. vs. Collector of Central Excise, Madras [ 1997 (1) TMI 77 - SUPREME COURT] . Following the aforesaid ruling of the Apex Court various High Courts and the Tribunal have in a slew of cases accordingly held that any fresh levy introduced is not applicable to goods manufactured prior to the introduction of the levy. Conclusion - The appellant cannot be fastened with Additional Excise Duty (newly imposed for the first time) on stocks of finished goods that were already in existence at the time of introduction of the said levy and were only awaiting clearance. The levy of duty on goods is fastened only as a consequence and the fact of their manufacture when the said levy is in vogue, its collection having been deferred till the time of removal of the said goods from the factory. The impugned order, being contrary to law is required to be set aside - Appeal allowed.

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• 2025 (5) TMI 49
  Method of valuation - physician s samples supplied free of cost for payment of central excise duty - determination of value under Rule 4 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 or not - HELD THAT:- The issue of value of physician s samples has been examined by this Tribunal in the case of Klars Sehen Pvt. Ltd. vs. Commissioner of Central Excise, Kolkata [ 2023 (8) TMI 742 - CESTAT KOLKATA] , wherein this Tribunal has observed the valuation of physician samples is to be done as per under Rule 4 of the valuation rules, 2000 based on the pro rate value of medicaments sold in the trade and valued under Section 4A. As the appellant is paying duty in terms of the CBEC Circular No.813/10/2005-CX dated 25.04.2005 i.e. cost of production + 10%/15%, in that circumstances, and the assessment in this case has been initially done provisionally and same was finalized later on, the show cause notice issued to the appellant is not sustainable. Conclusion - Valuation of physician samples is to be done as per Section 4(1)(a) of the Central Excise Act, 1944 The impugned order is set aside and the appeal is allowed.

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• Indian Laws

• 2025 (5) TMI 48
  Seeking appropriate directions from authorities - problems faced, with the existing guidelines -Inaccessibility of the digital KYC/e-KYC/video KYC processes for persons with disabilities, particularly acid attack survivors with permanent facial or eye disfigurement and persons with blindness or low vision - requirement to conduct due diligence of its clients by the banking companies and the financial institutions is mandated under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) and the Rules, 2005 - Reserve Bank of India in compliance with Rule 9(14) of the Rules 2005, has issued the Reserve Bank of India (Know Your Customer KYC) Directions, 2016 - Enable persons with disabilities to enjoy and exercise their rights equally with others - Article 21 of the Constitution HELD THAT:- As pointed out, persons with disabilities encounter unique barriers in accessing online services due to the lack of accessible websites, applications and assistive technologies. Similarly, individuals in remote or rural areas often face poor connectivity, limited digital literacy, and a scarcity of content in regional languages, effectively denying them meaningful access to e-governance and welfare delivery systems. In such circumstances, the State s obligations under Article 21 read in conjunction with Articles 14,15 and 38 of the Constitution must encompass the responsibility to ensure that digital infrastructure, government portals, online learning platforms, and financial technologies are universally accessible, inclusive and responsive to the needs of all vulnerable and marginalized populations. Bridging the digital divide is no longer merely a matter of policy discretion but has become a constitutional imperative to secure a life of dignity, autonomy and equal participation in public life. The right to digital access, therefore, emerges as an intrinsic component of the right to life and liberty, necessitating that the State proactively design and implement inclusive digital ecosystems that serve not only the privileged but also the marginalized, those who have been historically excluded. In order to make the process of digital KYC accessible to persons with disabilities, especially facial / eye disfigurements due to acid attacks and visual impairments, we issue the following directions: (i) The respondent authorities/Ministries shall direct all REs, whether government or private to follow accessibility standards as prescribed from time to time. The respondents shall appoint a nodal officer in every department responsible for digital accessibility compliance. (ii) All regulated entities must mandatorily undergo periodical accessibility audit by certified accessibility professionals and involve persons with blindness in user acceptance testing phase while designing any app or website or in case of any new feature being launched. (iii) Respondent No. 2/ RBI shall issue guidelines to all regulated entities to adopt and incorporate alternative modes for verifying the liveness or capturing a live photograph of the customers, as mandated under Annex-I of the MD on KYC, 2016, for the purpose of conducting Digital KYC / e-KYC beyond the traditional blinking of eyes to ensure inclusivity and user-convenience. (iv) Respondent No. 2 / RBI shall issue appropriate clarifications / guidelines / directions to all regulated entities that they have Customer Due Diligence (CDD) and on-boarding of new customers can be done using the video-based KYC process or the V-CIP procedure, in accordance with the provisions of the MD on KYC, 2016, wherein blinking of the eyes is not a mandatory requirement. (v) The respondent authorities must design their KYC templates or customer acquisition forms to capture disability type and percentage of the customer and appropriately record as part of the account records so as to provide them accessible services or reasonable accommodations. (vi) The respondent authorities should provide clear directions to all regulated entities to accept image of thumb impression during Digital KYC process. (vii) Respondent No. 2 / RBI shall amend the MD on KYC so as to enhance the implementation of the OTP based e-KYC authentication (face-to-face) to customers. (viii) Respondent No.3 shall make the necessary amendments and/or modifications to its notification dated 05.12.2023 thereby ensuring that the paper-based KYC process for verification of customers shall continue, enabling the petitioners and other similarly placed individuals to avail an accessible alternative for completing the KYC procedure. (ix) The respondent authorities shall provide options for sign language interpretation, closed captions, and audio descriptions for visually and hearingimpaired users. (x) The respondent authorities shall develop alternative formats including Braille, easy-to-read formats, voice-enabled services, to disseminate government notifications and deliver public services, ensuring accessibility for all. (xi) All regulated entities should procure or design devices or websites / applications / software in compliance of accessibility standards for ICT Products and Services as notified by Bureau of Indian Standards. (xii) The respondent authorities shall ensure that online services including e-governance platforms, digital payment systems, and e-launching platforms, are accessible to persons with disabilities, thereby fostering a barrier-free digital environment. (xiii) The respondent authorities are directed to ensure that all websites, mobile applications and digital platforms comply with the Web Content Accessibility Guidelines (WCAG) 2.1 and other relevant national standards, such as the Guidelines for Indian Government Websites (GIGW). It shall be mandatory for all Government websites to adhere to Section 46 of the RPwD Act, 2016, which requires both electronic and print media to be accessible to persons with disabilities. (xiv) The respondent authorities shall issue appropriate guidelines to develop and implement a mechanism where customers who have already completed their KYC process with one regulated entity may authorize the sharing of their KYC information with other entities through the Central KYC Registry (CKYCR). (xv) The respondent authorities shall establish a dedicated grievance redressal mechanism for persons with disabilities to report accessibility issues. (xvi) The respondent authorities shall establish a mechanism for human review of rejected KYC applications in cases where accessibility-related challenges prevent successful verification. A designated human officer shall be empowered to override automated rejections and approve applications on a case-by-case basis. (xvii) The respondent authorities shall establish dedicated helplines for persons with disabilities, offering step-by-step assistance in completing the KYC process through voice or video support. (xviii) Respondent No. 2 / RBI shall routinely initiate public campaigns through press release/ advertisement in electronic/ print and social media portals and to raise awareness, increase sensitization, and ensure effective dissemination of information about alternative methods of conducting Digital KYC / e-KYC and circulate standardized materials and mandate all regulated entities to display notices containing such information. (xix) The respondent authorities should mandate inclusion of disability awareness and training modules as part of e-learning modules for officials of regulated entities for better sensitization of officials. (xx) Respondent No. 2 / RBI shall monitor and ensure strict adherence by all regulated entities to the guidelines / notifications / directions issued by it, including those in terms of directions issued by this Court in the instant Writ Petition. Thus, both the writ petitions stand disposed of. No costs.

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• 2025 (5) TMI 47
  Legislative competence to determine the jurisdiction and also pecuniary limits of courts and tribunals - Constitutionality of Sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the Consumer Protection Act, 2019 - reasonable classification under Article 14 - manifest arbitrariness - loss of remedy - pecuniary jurisdictions of the district, state and national commissions on the basis of value of goods and services paid as consideration, instead of compensation claimed are challenged in the writ petition - claim on the basis of insurance policy offered by Lions International Club, up to two million dollars as compensation to families of deceased members was denied - Appellant s husband, a District governor of the Lions Club of Jhansi, passed away due to COVID-19 - National commission rejected her petition on the ground that the consideration for the insurance policy does not exceed Rs.10 crores. HELD THAT:- From perusal of the record, there can be no doubt about the legislative competence and also the power of the Parliament to prescribe limits of pecuniary jurisdiction of courts and tribunals and in our case, the district, state or the national commission. Four aspects for achieving justice are well founded and articulated as, i) distribution of advantages and disadvantages of society, ii) curbing the abuse of power and liberty, iii) deciding disputes and, iv) adapting to change. Adapting to change is important for achieving justice, as failure to adapt produces injustice and is, in a sense, an abuse of power. Thus, failure to use power to adapt to change is in its own way an abuse of power. In fact, the issue is not one of change or not to change, but of the direction and the speed of change and such a change may come in various ways, and most effectively through legislation. Legal reform through legislative correction improves the legal system and it would require assessment of the working of the law, its accessibility, utility and abuse as well. The Executive branch has a constitutional duty to ensure that the purpose and object of a statute is accomplished while implementing it. It has the additional duty to closely monitor the working of a statute and must have a continuous and a real time assessment of the impact that the statute is having. As stated above, reviewing and assessing the implementation of a statute is an integral part of Rule of Law. The purpose of such review is to ensure that a law is working out in practice as it was intended. If not, to understand the reason and address it quickly. It is in this perspective that this Court has, in a number of cases, directed the Executive to carry a performance/assessment audit of a statute or has suggested amendments to the provisions of a particular enactment so as to remove perceived infirmities in its working. Shifting the focus of judicial review to functional capability of these bodies is not to be understood as an argument for alternative remedy, much less as a suggestion for judicial restraint. In fact, this shift is in recognition of an important feature of judicial review, which performs the vital role of institutionalizing authorities and bodies impressed with statutory duties, ensuring they function effectively and efficiently. The power of judicial review in matters concerning implementation of policy objectives should transcend the standard power of judicial review to issue writs to perform statutory duty and proceed to examine whether the duty bearers, the authorities and bodies are constituted properly and also whether they are functioning effectively and efficiently. By ensuring institutional integrity, we achieve our institutional objectives. Further, effective and efficient performance of the institutions can reduce unnecessary litigation. Id. See para 23. In conclusion we hold that the Council and Authority being statutory authorities having clear purpose and objects and vested with powers and functions must act effectively and in complete coordination to achieve the preambular object of the statute to protect the interest of consumers. As they are impressed with statutory duty, their functioning will be subject to judicial review. Vibrant functioning of the Council and the Authority will subserve the purpose and object of the Parliament enacting the 2019 legislation. Conclusions: For the reasons stated above; (a) we dismiss the constitutional challenge to section 34, 47 and 58 of the 2019 Act and declare that the said provisions are constitutional and are neither violative of Article 14 nor manifestly arbitrary; (b) Central Consumer Protection Council and the Central Consumer Protection Authority shall in exercise of their statutory duties under sections 3, 5, 10, 18 to 22 take such measures as may be necessary for survey, review and advise the government about such measures as may be necessary for effective and efficient redressal and working of the statute. With the above directions, the Writ Petition and Civil Appeal are disposed of. Pending applications, if any, are also disposed of accordingly.

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• 2025 (5) TMI 46
  Validity of sanctity of the auction conducted under the SARFAESI Act, 2002 - higher bid after GBJ Hotels had emerged as the successful auction purchaser - Edelweiss ARCL claims that the debt much exceeds what it has received from GRT Hotels - HELD THAT:- We have heard objections being raised with regard to the contents of the additional affidavit of Edelweiss ARCL as well a contention that the secured asset has been sold to GRT Hotels at a throwaway price. At this juncture, we do not consider it necessary to examine the quantum of debt. The best available offer has been accepted. We are only tasked today to determine the rate of interest payable by Edelweiss ARCL to GBJ Hotels on the sum of Rs.27 crore which has been returned to the latter by the former and to also pass consequential directions with regard to declaration of GRT Hotels as the successful bidder. Sale certificate having been issued, steps for delivery of peaceful and vacant possession of the assets of the respondent no.4 in favour of GRT Hotels and all other consequential steps, if any, shall be taken by Edelweiss ARCL in accordance with law within a month from date. We clarify not having examined the claim of Edelweiss ARCL that the debt is now somewhere near Rs.186 crore + and that only Rs.153 crore could be recovered in course of the process of bidding that was undertaken pursuant to our order dated 28th March, 2025. Edelweiss ARCL shall be at liberty to approach the Registry with a prayer for withdrawal of Rs.33 crore deposited by GRT Hotels. Once such approach is made, the said amount with accrued interest, if any, shall be released in favour of Edelweiss ARCL as early as possible. Thus, the special leave petition stands disposed of.

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• 2025 (5) TMI 45
  Validity of extension/re-employment to the post of Director, Animal Husbandry, after superannuation - suitability and eligibility - exercise the power of re-employment - HELD THAT:- The sole ground for extension/re-employment was the recommendation of the Hon ble Minister, upon which, the Hon ble Chief Minister had already approved six months re-employment. Prior to that the file was not processed at all by the Department. Therefore, once a decision had already been taken by the Hon ble Chief Minister, who on earth much less a lesser mortal , could have bye- passed the order. Obviously, such decision had to be justified at all costs. The respondent-State admittedly did not at all consider whether other eligible candidates are available in the Department. This attitude of the State certainly tilts the balance of equality and administrative exigencies towards private/individual interest rather than public interest. Administrative orders of the present kind must serve a greater public interest. It must be passed on public grounds and the said expression is of wide magnitude and cannot have such a limited meaning that because merely a person being a Director, he must continue in the Department, more particularly, the provisions of Chapter 22 of the Hand Book, which are mandatory, were required to be followed. We need to reiterate that normally, the power of the Government in regard to the re-employment/extension is absolute, but is subject to the conditions and limitations provided in the rules or instructions. Once the Government forms the opinion that it is in public interest, then, correctness of such opinion can normally be not challenged before the Courts. However, if such decision is arbitrary, it will be open for the Court to interfere in such matters. After all it is the Government itself while incorporating Clause 22 has specifically mentioned it would be appreciated that in each case of extension or re-employment, it is not only the next man who misses promotion, but often several people miss consequential promotions all along the hierarchical strata. Thus, one person getting re-employment/extension means deferment of promotion for six or seven persons . No doubt, it is the Government which is the final authority to take such a decision. The decision is subjective but ought to be data based, bonafide and in public interest as well as in the interest of administration of service of the State. Ordinarily, the burden of showing the exceptional circumstances and public grounds is on the State and it must be reflected from the record. Administrative orders of the present kind must serve a greater public interest. It must be passed on public grounds and it is for this precise reason that the respondents, in their wisdom, provided for a proper procedure for processing cases of extension in service/re-employment. It is more than settled that extension in service/reemployment, is only to be made in exceptional circumstances, whereas the instant case, is one spoil system as the reemployment has been made illegally. Merely because the recommendation has come from an elected representative, would not justify the extension/re-employment, in absence of satisfaction recorded. Since, the respondents have failed to follow the procedure as contemplated in Chapter 22 of the Hand Book on Personal Matters, which as per directions of this Court passed in CWPIL No. 201 of 2017 titled as Court on its own motion vs. State of H.P and another, decided on 19th December, 2017, have been held to be binding on the State Government and further directed to be followed in letter and spirit. Therefore, the re-employment granted to respondent No. 4 cannot be countenanced and the same is required to be quashed and set aside. Therefore, both the writ petitions are allowed. The re-employment granted to respondent No. 4 is quashed and set aside with immediate effect. The official respondents are directed to convene a fresh DPC and since petitioner in CWP No. 231 of 2025 namely, Vishal Sharma was illegally deprived of, his case from consideration for promotion is required to be considered along-with other eligible candidates in the DPC so convened. Thus, the writ petitions stand disposed of, so also the pending applications, if any.

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