TMI Tax Updates - e-Newsletter
May 8, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. Special Provisions Relating to Pass-Through Entities in Venture Capital Structures : Clause 222 of Income Tax Bill, 2025 Vs. Section 115U of Income Tax Act, 1961

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2. Enforcement and Recovery of Tax on Accreted Income : Clause 352(8) & (9) of the Income Tax Bill, 2025 Vs. Section 115TF of the Income-tax Act, 1961

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3. Changing Landscape of Interest on Delayed Payment of Tax on Accreted Income : Clause 352(7) of Income Tax Bill, 2025 Vs. Section 115TE of Income-tax Act, 1961

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4. Reforming the Exit Tax Regime for non-profit organizations (NPOs) or charitable institutions : Clause 352 of the Income Tax Bill, 2025 Vs. Section 115TD of the Income-tax Act, 1961

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5. Comprehensive Review of Taxation, Reporting, and Compliance for Securitisation Trusts : Clause 221 of the Income Tax Bill, 2025 Vs.Section 115TCA of the Income Tax Act, 1961

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6. Definitions, Scope, and Impact on the MAT/AMT Regime : Clause 206(19) of the Income Tax Bill, 2025 Vs. Section 115JF of the Income Tax Act, 1961

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7. Reducing tax avoidance by curbing the excessive use of deductions and exemptions by corporate and select non-corporate entities : Clause 206(18) of the Income Tax Bill, 2025 Vs. Section 115JEE of the Income-tax Act, 1961

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8. The Interplay of Special and General Provisions : Clause 206(12) of Income Tax Bill, 2025 Vs. Section 115JE of Income Tax Act, 1961

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9. Addresses the mechanism for granting tax credit for MAT/AMT paid in excess of regular tax liability by Other than Corporate : Clause 206(13)-(16) of the Income Tax Bill, 2025 Vs. Section 115JD of the Income-tax

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10. Addresses the mechanism for granting tax credit for MAT/AMT paid in excess of regular tax liability by Companies : Clause 206(13)-(16) of the Income Tax Bill, 2025 Vs. Section 115JAA of the Income-tax Act, 1961

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Articles

1. Why OPC Annual Return Filing is Important Even with Zero Turnover?

   By: Ishita Ramani

2. SUPREME COURT ON BETTING & GAMBLING – GAMESKRAFT CASE

   By: Dr. Sanjiv Agarwal

3. FILING OF APPEAL BEFORE GOODS AND SERVICES TAX APPELLATE TRIBUNAL – PART V

   By: DR.MARIAPPAN GOVINDARAJAN

4. Chapter XV: The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016

   By: YAGAY andSUN

5. The Companies (Mediation and Conciliation) Rules, 2016

   By: YAGAY andSUN

6. Chapter XVIII: The Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016

   By: YAGAY andSUN

7. Chapter XIV: The Companies (Inspection, Investigation, and Inquiry) Rules, 2014

   By: YAGAY andSUN

8. 🚰 Grey Water Waste, a Lost Opportunity: Why Recycling It Could Help Solve India’s Water Woes

   By: YAGAY andSUN

9. 💧Tapping the Untapped: How Recycling Grey Water Can Ease India's Water Scarcity.

   By: YAGAY andSUN

10. 💧Why India Needs Common Water Treatment Plants in Every City.

   By: YAGAY andSUN

11. 🛡️ Use of ‘Make in India’ Logo on Products: IPR Infringement & Inaction.

   By: YAGAY andSUN

12. 🛡️ Policy Brief & Legal Article: Preventing Misuse of the ‘Make in India’ Logo – Protecting National Intellectual Property

   By: YAGAY andSUN

13. Chapter XIX: The Companies (Revival and Rehabilitation of Sick Companies) Rules, 2014

   By: YAGAY andSUN

News

1. Invoice-wise Reporting Functionality in Form GSTR-7 on portal

2. UK PM Keir Starmer hits back at Opposition attacks over India FTA tax clause

3. Department of Economic Affairs, Ministry of Finance, invites suggestions from experts/public on Draft Framework of ‘India’s Climate Finance Taxonomy by 25th June 2025

4. PMLA review: SC asks Centre, petitioners to frame issues for decision

5. Cabinet approves Revised SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) Policy for Coal Allocation to Power Sector

6. India reserves right to retaliate if UK's proposed carbon tax hits exports: Official

7. India Global Forum Welcomes the Signing of the Historic UK–India Free Trade Agreement

8. Union Minister Shri Piyush Goyal Addresses Columbia India Energy Dialogue

9. A historic and ambitious deal to boost jobs, exports and national growth.

10. Income Tax team seizes Rs 50 lakh cash from car in Hathras, nabs two

11. India will retaliate, if EU imposes carbon tax: Goyal

Notifications

Income Tax

1. 44/2025 - dated 6-5-2025 - IT

Income-tax (Sixteenth Amendment) Rules, 2025

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2025/63 - dated 7-5-2025

Review of - (a) disclosure of financial information in offer document / placement memorandum, and (b) continuous disclosures and compliances by Infrastructure Investment Trusts (InvITs)

2. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2025/64 - dated 7-5-2025

Review of - (a) disclosure of financial information in offer document, and (b) continuous disclosures and compliances by Real Estate Investment Trusts (REITs)

GST - States

3. Instruction No. 01 of 2025-GST - dated 6-5-2025

Procedure to be followed in department appeal filed against interest and/or penalty only, related to Section 128A of the Goa GST Act, 2017

4. Instruction No. 02 of 2025-GST - dated 6-5-2025

Instructions for processing of applications for GST registration

DGFT

5. 06/2025-26 - dated 7-5-2025

Amendments in Standard Input Output Norms (SION) A-1294

Highlights / Catch Notes

GST

• Audit Compliance Mandate: GST Authorities Must Swiftly Provide Records to C&AG for Comprehensive Financial Scrutiny Under Article 149

  Circulars : The CBIC issued Instruction No. 05/2025-GST addressing timely production of records for audit, referencing C&AG Audit Report 7 of 2024. Invoking Article 149 of the Constitution, the instruction mandates field formations to expeditiously provide records and information to C&AG audit teams. Tax authorities must sensitize officers to promptly submit required documentation, including requesting taxpayers to furnish necessary documents when records are unavailable. The directive aims to facilitate comprehensive statutory audit processes by ensuring complete and timely access to relevant financial and tax-related records across government tax formations.
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• Tax Dispute Resolution: Petitioner Granted Reply Opportunity and Right to Appeal Amid Pending Notification Validity Challenge

  Case-Laws - HC : HC adjudicated a tax dispute involving notification challenges, granting the petitioner an opportunity to file a reply to the Show Cause Notice (SCN) within one month. The court noted that the SCN was uploaded on an additional tab without the petitioner's direct knowledge. The proceedings were deemed subject to the Supreme Court's pending decision on the validity of the impugned notifications. The court permitted the petitioner to pursue appellate remedies while reserving final determination pending the Supreme Court's verdict. The petition was disposed of with directions for the adjudicating authority to hear the petitioner's arguments on merits without passing default orders.
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• Anticipatory Bail Granted in Tax Fraud Case: Conditional Release Emphasizes Cooperation and Investigation Compliance

  Case-Laws - HC : HC granted anticipatory bail in a tax fraud case, finding custodial interrogation unwarranted. The court determined that pre-trial incarceration was unnecessary given the petitioner's asset declaration and potential for recovery through legal means. Bail was conditionally granted, requiring the petitioner to join the investigation within seven days, cooperate fully with investigating authorities, and comply with specified terms. The court emphasized preventing irreversible injustice while maintaining investigative integrity. The petitioner must submit to deemed custody, participate in the investigation when summoned, and risk bail cancellation for non-compliance. The order underscores judicial discretion in balancing investigative needs with individual liberty rights.
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• Tax Authority's Section 74(9) Order Upheld: Procedural Validity Confirmed, Jurisdictional Challenge Dismissed

  Case-Laws - HC : HC upheld the state tax authority's order under Section 74(9) of BGST Act, finding no jurisdictional error in issuing the demand notice. The court determined that the order was legally valid, as it was passed after proper service of show cause notice, and the petitioner failed to contest the substantive facts. The HC rejected arguments about parallel investigations, confirming the authority's right to proceed with tax assessment despite ongoing central agency investigations, thereby maintaining procedural integrity in tax proceedings.
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Income Tax

• Reassessment Notice Invalidated: Insufficient Evidence of Escaped Income Leads to Procedural Dismissal Under Section 148

  Case-Laws - HC : HC ruled that reassessment notice under Section 148 was invalid. The AO's reasons for reopening assessment lacked substantive evidence that escaped income was represented by an asset. The expenditure of Rs. 9.14 crores under 'wages and salaries', which included Rs. 6.29 crores for prior years, was transparently disclosed in financial statements. Since the conditions under Section 149(1)(b) were not satisfied, no reassessment notice could be issued after the limitation period of three years from the end of AY 2013-14. The petitioner, a joint venture between two public sector undertakings, had legitimate accounting practices for seconded employees' salary revisions. Consequently, the reassessment proceedings were set aside in favor of the assessee.
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• Loan Repayment in Cash Validates Reasonable Cause, Exempts Penalty Under Section 273B Tax Compliance Rule

  Case-Laws - HC : HC held that the assessee's cash repayment of loan to the finance corporation, made on lender's instruction to arrest interest escalation, constitutes reasonable cause under Section 273B. The court found that all three tax authorities erroneously imposed penalty under Section 271E without considering Section 273B, which provides exemption when genuine reasonable cause exists. The transaction was deemed bona fide, and no revenue loss occurred. The penalty orders by AO, CIT(Appeals), and ITAT were consequently set aside, with the ruling decisively favoring the assessee's interpretation of reasonable cause in tax compliance.
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• Tax Reassessment Invalidated: Section 148 Notice Struck Down for Failing to Meet Statutory Income Threshold Criteria

  Case-Laws - HC : HC adjudicated reassessment proceedings challenging tax notice under Section 148, determining that conditions in Section 149(1A) were not satisfied. The court interpreted the statutory threshold of Rs. 50 lakhs escaped income, clarifying that cumulative income from multiple assessment years can be considered, but must be represented through a specific asset or expenditure related to a singular event or occasion. The court ultimately allowed the petition and set aside the reassessment proceedings, emphasizing strict compliance with procedural limitations in tax reassessment mechanisms.
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• Legal Challenge: Tax Officer Must Issue Draft Order Before Final Assessment Under Section 144C, Protecting Taxpayer's Right to Representation

  Case-Laws - HC : HC held that under Section 144C of the Income Tax Act, 1961, the Assessing Officer (AO) is mandatorily required to forward a draft assessment order to an eligible assessee when proposing variations prejudicial to the assessee's interests. In this case, the AO erroneously passed a final assessment order under Section 143(3) without following the prescribed procedure of issuing a draft order and providing an opportunity for representation. Consequently, the court remanded the matter, directing the AO to comply with Section 144C's procedural requirements, specifically forwarding a draft assessment order to the eligible assessee before finalizing the assessment, thereby ensuring procedural fairness and adherence to statutory provisions.
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• Foreign Tax Credit Claim Survives Technical Deadline Miss: Procedural Delay Cannot Deny Substantive Tax Benefit Under Rule 128(9)

  Case-Laws - AT : ITAT ruled on Foreign Tax Credit (FTC) claim where Form No. 67 was filed beyond statutory deadline. The tribunal held that delayed filing does not automatically disqualify FTC claim. Applying judicial precedents from Madras HC and ITAT Kolkata, the tribunal determined that procedural delays in submitting Form No. 67 under rule 128(9) of Income-tax Rules do not preclude taxpayer from claiming foreign tax credit. The appellate tribunal directed the Assessing Officer to grant FTC benefit for taxes paid in foreign jurisdiction consistent with Double Taxation Avoidance Agreement between India and USA. Assessee's appeal was consequently allowed, establishing that technical non-compliance does not nullify substantive tax credit entitlement.
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• Tax Assessment Dispute Resolved: Section 69C Upheld, Multiple Deductions Evaluated, Tribunal Favors Substantive Compliance Over Technicalities

  Case-Laws - AT : The ITAT adjudicated multiple issues involving tax assessment for the assessee. Key determinations included: (1) upholding addition under Section 69C for undisclosed project expenditure based on matching accounting figures, (2) disallowing depreciation on gym equipment not installed at business premises, (3) accepting cancellation of property sale agreement and refund of advance, (4) allowing rent expenses for business premises despite procedural oversight, (5) validating foreign travel expenses for legitimate business purpose of marble procurement, and (6) deleting deemed profit additions and advance receipt additions due to lack of substantive evidence. Overall, most grounds were decided either partially or fully in favor of the assessee, with the tribunal emphasizing substantive compliance over procedural technicalities.
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• Tax Search Case: Tribunal Navigates Complex Assessment Rules with Nuanced Ruling on Unexplained Deposits and Procedural Limitations

  Case-Laws - AT : ITAT adjudicated a complex tax assessment case involving search and seizure proceedings under Section 153A. The tribunal addressed jurisdictional issues regarding unexplained cash deposits and the interpretation of 'other material' during assessment. After divergent opinions from bench members, a third member was consulted. The final outcome involves partially allowing appeals from both the department and assessee, with specific directions to restore matters to CIT(A) for merit-based examination of incriminating and other materials found during search proceedings. The decision emphasizes the nuanced interplay between Sections 153A, 153C, and 147, highlighting the tribunal's careful approach to reassessment and multiple assessment limitations in search-related tax proceedings.
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• Educational Trust Wins 80G Approval: School Fees Don't Negate Charitable Purpose, Tribunal Confirms Genuine Philanthropic Intent

  Case-Laws - AT : ITAT allowed the appellant's appeal, directing CIT(Exemptions) to grant 80G approval. The tribunal determined that the educational institution's receipt of school bus fees, tuition fees, and exam fees does not invalidate its charitable purpose status. The court emphasized that section 11, 12, and 13 provisions regarding fund application should be examined during assessment proceedings, not during 80G approval. The tribunal found no material evidence to suggest the trust's activities were not genuine, and since the institution was established for charitable purposes under section 2(15) with prior 12A registration, the 80G approval should be granted as applied in form 10AB on 29/06/2024.
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• Cooperative Society Wins Tax Deduction Battle: Section 80P Upheld Against CPC's Jurisdictional Overreach

  Case-Laws - AT : ITAT determined CPC exceeded jurisdictional authority in disallowing Section 80P deduction for cooperative society. Despite belated ITR filing, the tribunal found no legal basis for CPC to deny deduction under Section 80P(2). The impugned order was vacated, directing CPC to reverse disallowance and accept the claimed deduction under Chapter VI-A. The tribunal explicitly held that CPC lacked explicit statutory power to reject the deduction at the intimation stage under Section 143(1), thereby restoring the appellant's tax benefit.
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• Tax Dispute Resolved: Comprehensive Documentation and Clean Transaction Trail Prove Assessee's Compliance with Share Transaction Regulations

  Case-Laws - AT : ITAT determined the tax dispute involving share transactions, finding in favor of the assessee. The tribunal noted the taxpayer's comprehensive documentation of share purchases through registered brokers, including complete payment via banking channels, receipt in Demat account, and payment of requisite taxes. Despite revenue's allegations of manipulated penny stock transactions, the tribunal observed the lack of evidence proving the assessee's active involvement in fraudulent activities. Referencing a precedent case with similar circumstances, the tribunal applied judicial consistency principles and directed the Assessing Officer to delete the additions under section 68. Consequently, the assessee's appeal was allowed, effectively negating the disputed tax assessment.
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• Tax Dispute Resolved: Tribunal Dismisses Revenue Department's Claims on Exempt Income, Provident Fund, and Revisional Jurisdiction

  Case-Laws - AT : ITAT adjudicated multiple tax-related issues, predominantly focusing on three key aspects: (1) Section 14A disallowance for exempt income, (2) Employees' provident fund contribution, and (3) Revision under Section 263. The tribunal ultimately ruled in favor of the assessee, rejecting the revenue department's contentions. Specifically, no disallowance under Section 14A was permitted since no dividend income was earned during the assessment year. For the provident fund contribution issue, the Supreme Court's precedent was applied against the assessee. Regarding Section 263 revision, the tribunal found the Pr. CIT's order unsustainable, noting insufficient grounds for revisional jurisdiction, thereby quashing the impugned order and allowing the assessee's appeal.
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Customs

• Imported Quick Lime Classified Under CTH 2522 1000 Based on 92% Calcium Oxide Purity, Overriding Residuary Entries

  Case-Laws - AT : CESTAT adjudicated the classification dispute for imported Quick Lime, determining its proper tariff heading. The tribunal ruled that Quick Lime falls under CTH 2522 1000, given its calcium oxide purity of 92%, which does not meet the 98% threshold for alternative classification. The decision prioritized specific tariff headings over residuary entries, relying on Harmonized System Notes and Interpretative Rules of Classification. The tribunal distinguished this case from a prior precedent involving a product with 80% purity. Consequently, the appeal was allowed, affirming the classification of Quick Lime under the specific tariff heading CTH 2522 1000.
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• Customs Order Invalidated: Procedural Flaws and Natural Justice Violations Demand Comprehensive Redetermination of Seaweed Extract Classification

  Case-Laws - HC : HC found the customs classification order defective due to procedural irregularities. The impugned order was set aside on grounds of violating natural justice principles, specifically non-disclosure of documents referenced in Show Cause Notice. The court mandated a de novo hearing by the Adjudicating Authority, requiring complete document disclosure and a reasoned order. The matter was remanded for fresh adjudication, with the petitioner granted an opportunity to present arguments after receiving complete documentary evidence. The HC allowed the petition, effectively nullifying the original customs classification determination and directing a comprehensive re-examination of the seaweed extract's tariff classification.
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• Exporters Lose Challenge to Merchandise Exports Scheme Benefit Denial Due to Delayed Foreign Exchange Remittance

  Case-Laws - HC : HC dismissed the petition challenging the Merchandise Exports from India Scheme (MEIS) benefit denial. The Policy Review Committee (PRC) rejected the export benefit claim due to delayed foreign exchange remittance beyond the prescribed three-year period. For 6 out of 8 shipping bills, payment was realized within three years, allowing potential late fee benefits, which the petitioner did not pursue. The remaining bills were received beyond the stipulated timeframe, rendering them ineligible. The court found no jurisdictional error or arbitrariness in the PRC's decision and upheld the administrative discretion, concluding that policy relaxation cannot be claimed as a substantive right and is subject to exceptional circumstances.
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• Technical Glitches Invalidate Import Duty Interest Claim: Petitioner Wins Relief After Proving System-Wide Electronic Payment Challenges

  Case-Laws - HC : HC allowed the petition challenging the refusal to refund interest paid on import duty due to technical glitches in the Electronic Cash Ledger (ECL) system. The Court found that the D.G. Systems certified technical difficulties existed until 27.07.2023, rendering the interest claim invalid. The Court held that the respondents cannot claim interest and must refund any interest collected, particularly when the petitioner made timely payment attempts despite system limitations. The decision was based on a conjoint reading of Customs Act sections, the 17.04.2023 circular, and the 27.07.2023 advisory, ultimately finding the original order inconsistent with applicable regulations.
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• Black Pepper Smuggling Case: Deliberate Duty Evasion Leads to Full Goods Confiscation and Penalty Under Customs Act

  Case-Laws - AT : CESTAT upheld absolute confiscation of black pepper imported through unauthorized routes, finding the appellant's narrative of a fictitious intermediary non-credible. The tribunal conclusively established mens rea and deliberate intent to smuggle goods while evading duty payments. No substantive evidence was presented to support the appellant's claims about the alleged supplier. The court imposed a penalty of Rs. 1,00,000 and confirmed the seizure of goods, effectively sanctioning complete confiscation due to the appellant's contumacious conduct and failure to demonstrate legitimate procurement. The lower authority's order was substantially upheld with minimal modification regarding penalty quantum.
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• Peacock Feather Export Case: Insufficient Evidence Leads to Appellant's Exoneration Under Customs Act Section 114(i)

  Case-Laws - AT : CESTAT appellate proceedings concerning attempted export of prohibited peacock feathers involved allegations against an appellant for misrepresenting goods as 'carpets'. The tribunal found procedural irregularities in evidence collection, specifically improper reliance on statements under Section 108 of Customs Act without proper witness examination and cross-examination. The commissioner's order imposing a penalty of Rs. 3,00,000 was deemed unsustainable due to insufficient direct evidence linking the appellant to the alleged export conspiracy. Mere presence at the premises with the principal accused was deemed inadequate to establish culpability. The tribunal allowed the appeal, effectively setting aside the penalty order and exonerating the appellant from liability under Section 114(i) of the Customs Act, 1962.
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• Crude Palm Oil Importer Wins Customs Duty Challenge, Secures Lower 15% Rate After Challenging Enhanced 30% Tariff

  Case-Laws - AT : CESTAT adjudicated a customs duty dispute concerning crude palm oil import. The tribunal determined that the enhanced Basic Customs Duty (BCD) rate of 30% notified on 17.11.2017 was not applicable since the official gazette publication occurred on 20.11.2017, subsequent to the entry inward dates of 18.11.2017 and 19.11.2017. Consequently, the appellant is liable to pay the original BCD rate of 15% and is entitled to a refund of excess customs duty paid, including applicable interest. The tribunal ruled in favor of the appellant, effectively nullifying the retrospective duty enhancement.
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• Aluminium-based MCPCBs qualify for customs duty exemption based on functional equivalence and essential material characteristics under Notification 25/1999-CUS.

  Case-Laws - AT : CESTAT held that Metal Core Printed Circuit Boards (MCPCBs) are functionally equivalent to Printed Circuit Boards (PCBs), with additional heat dissipation capabilities. Aluminium-based copper clad laminates were eligible for customs duty exemption under Notification No. 25/1999-CUS prior to 2022 amendment. The tribunal found the Principal Commissioner of Customs (Preventive) lacked jurisdiction to issue show cause notices for 29 Bills of Entry already adjudicated by the jurisdictional Commissioner. The impugned order was set aside, with the appeal allowed, establishing that composite material classification depends on essential character and composition, not peripheral functional variations.
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• Customs Penalty Overturned: Social Connection Insufficient to Prove Smuggling Involvement in Red Sanders Export Case

  Case-Laws - AT : CESTAT adjudicated a customs penalty case involving attempted export of prohibited red sanders through misrepresentation as unaccompanied baggage. After comprehensive review, the tribunal determined that the appellant had no substantive involvement in the smuggling operation beyond a peripheral social connection. Consequently, the tribunal set aside the Rs. 5 lakh penalty imposed against the appellant, finding insufficient evidence to substantiate direct participation in the illicit export attempt. The appellate order effectively exonerated the individual from liability, recognizing the absence of direct culpability in the customs violation. Appeal was allowed, quashing the original penalty order.
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• Customs Import Dispute: Extended Limitation Period Rejected Due to Procedural Irregularities in Assessment Process

  Case-Laws - AT : CESTAT adjudicated a customs dispute involving invocation of extended limitation period under section 28(1) of Customs Act, 1962. The tribunal examined the procedural validity of a show cause notice issued by revenue authorities regarding thirteen import entries. After analyzing the import documentation and assessment process, the tribunal upheld the Commissioner (Appeals) findings that extended limitation period could not be arbitrarily invoked. The appellant's genuine belief in claiming exemption notification and the fact that goods were examined and cleared during original assessment were critical considerations. Relying on precedential jurisprudence, the tribunal ultimately dismissed the appeal, confirming that revenue authorities cannot retrospectively challenge already assessed and cleared import entries without substantive procedural justification.
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DGFT

• Stainless Steel Washers Export-Import: DGFT Reinstates SION C-888 with 1.0 kg to 1.60 kg Input-Output Norm

  Circulars : The DGFT reinstated and amended Standard Input Output Norms (SION C-888) for stainless steel washers export-import, allowing 1.0 kg of exported washers to correspond with 1.60 kg of imported stainless steel sheets/coils/strips of relevant grade and thickness. This amendment reverses the previous suspension from January 2020, reinstating the specific input-output norms under Paragraph 1.03 and 2.04 of the Foreign Trade Policy, 2023, thereby facilitating regulated trade in specified stainless steel manufacturing components.
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• Expanded SCOMET Export Rules Redefine Stockist Categories and Authorization Procedures for Technology Transfers

  Circulars : The DGFT amended Para 10.10 of the Handbook of Procedures (HBP) 2023, introducing a revised framework for Stock & Sale Authorization of SCOMET Items. The amendment broadens the definition of 'Stockist' to include subsidiaries, parent companies, affiliates, and Original Equipment Manufacturers. The policy establishes a comprehensive procedure for export authorization, requiring detailed documentation including end-user certificates, corporate relationship proof, and technical specifications. Key modifications include simplified re-export processes, post-reporting requirements for transfers, and annual inventory reporting. The amendment aims to provide more flexible yet controlled mechanisms for exporting sensitive technological items while maintaining robust end-user verification protocols.
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IBC

• NCLAT Upholds Creditors' Discretion in Resolution Plan Submission, Validates Strict Timeline for Insolvency Proceedings

  Case-Laws - AT : NCLAT addressed an insolvency resolution case involving submission of resolution plans after recall of a previous approved plan. The Tribunal held that the Committee of Creditors (CoC) was not obligated to issue a fresh Form-G or provide a mandatory 30-day period under Regulation 36B(3). The CoC validly established a timeline of 03.02.2025 for resolution plan submission, which applied equally to all Prospective Resolution Applicants. The Appellant failed to submit a resolution plan within the prescribed timeline. Consequently, the Adjudicating Authority's order rejecting the Appellant's time extension application was upheld, and the appeal was dismissed, affirming the CoC's commercial discretion in managing the insolvency resolution process.
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Indian Laws

• Stamp Vendor's Public Servant Status Affirmed: Bribery Charges Dropped Due to Insufficient Evidence Under Prevention of Corruption Act

  Case-Laws - SC : SC held that stamp vendors are public servants under the Prevention of Corruption Act. The Court adopted a purposive interpretation of "public servant" definition, emphasizing the nature of public duty performed. The appellant's status as a government-remunerated stamp vendor facilitating revenue collection qualifies him as a public servant. However, the prosecution failed to establish beyond reasonable doubt the demand and acceptance of illegal gratification. Consequently, the Court set aside the conviction under Sections 7 and 13(1)(d) read with Section 13(2) of the PC Act, finding insufficient evidence to prove bribery. The appeal was allowed, quashing the trial court and high court's previous convictions.
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• Supreme Court Limits High Court's Supervisory Powers, Emphasizes Judicial Restraint and Procedural Safeguards Under Article 227

  Case-Laws - SC : SC held that the HC's exercise of supervisory jurisdiction under Article 227 was improper. The power is fundamentally supervisory and must be sparingly invoked only in cases of apparent jurisdictional errors or grave injustice. By rejecting the plaint prematurely, the HC effectively usurped the trial court's original jurisdiction and negated the appellant's statutory right of appeal. The court emphasized that procedural safeguards are critical to the rule of law, and short-circuiting established legal procedures undermines judicial consistency. The HC's order was set aside, restoring the standard adjudicatory process and preserving procedural integrity.
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• Cheque Bounce Case: Accused's Liability Confirmed with Uncontested Debt and Failure to Repay Under Section 138

  Case-Laws - HC : HC dismissed the revision petition, upholding the accused's conviction under Section 138 of Negotiable Instruments Act. The court found that the accused issued a cheque for a legally enforceable debt, failed to rebut the presumption of liability, and did not pay the demanded amount despite receiving a valid notice. The court confirmed that the accused's signature on the cheque and failure to discharge the financial obligation satisfied all essential ingredients of the offense, thereby validating the lower courts' concurrent findings of guilt.
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PMLA

• Four Financial Entities Granted Aadhaar Authentication Powers Under Section 11A for Enhanced Regulatory Compliance and Verification

  Notifications : The GoI notification authorizes four financial entities to perform Aadhaar authentication under section 11A of the Prevention of Money-laundering Act, 2002. The RBI-approved entities, including financial services and lending companies, are permitted to conduct authentication after satisfying privacy and security standards prescribed under the Aadhaar Act. The central government's authorization enables these entities to leverage Aadhaar-based verification mechanisms for regulatory compliance and customer identification purposes, subject to prescribed regulatory guidelines and consultation with UIDAI.
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SEBI

• Comprehensive SEBI Regulations Reshape Securitisation Framework with Stricter Investor Safeguards and Enhanced Transparency

  Notifications : SEBI Notification on Securitised Debt Instruments Amendment Regulations, 2025 Key Legal Amendments: The notification introduces comprehensive regulatory changes for securitisation transactions, focusing on: 1. Definitional Amendments - Refined definitions for "advertisement", "control", and "minimum holding period" - Expanded scope of eligible underlying assets for securitisation 2. Regulatory Compliance Requirements - Mandatory periodic disclosure obligations for originators - Enhanced trustee accountability and responsibilities - Stricter conditions for liquidity facility providers - Minimum retention requirements for originators 3. Operational Restrictions - Minimum ticket size set at 1 crore for securitised debt instruments - Minimum holding period requirements for underlying assets - Limitations on clean-up call options - Dematerialisation of securitisation instruments 4. Advertisement Guidelines - Specific format and disclosure requirements for public issue advertisements - Restrictions on misleading or manipulative content 5. Governance Provisions - Enhanced code of conduct for special purpose distinct entities and trustees - Increased transparency and investor protection mechanisms The amendments aim to strengthen regulatory oversight, improve investor protection, and establish more robust frameworks for securitisation transactions in the Indian financial market.
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• SEBI Mandates Investor Charter for KRAs to Boost Transparency, Protect Rights, and Streamline Grievance Resolution Under Section 11(1)

  Circulars : Legal Summary: SEBI issued a circular mandating KYC Registration Agencies (KRAs) to publish an Investor Charter on their websites to enhance investor awareness and service transparency. The charter outlines KRAs' vision, mission, and key services including KYC registration, modification, status tracking, and data verification. Investors are granted specific rights such as data privacy, information accuracy, and grievance redressal. The circular prescribes a three-tier grievance resolution mechanism: direct complaint to KRA, escalation through SCORES portal, and dispute resolution via Online Dispute Resolution (ODR) portal. The directive is issued under Section 11(1) of the SEBI Act, 1992, to protect investor interests and regulate securities markets, effective immediately.
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• SEBI Can Terminate Administrator's Services Without Casting Stigma, Ensuring Flexibility in Administrative Appointments Under Circular Provisions

  Case-Laws - HC : HC held that SEBI possesses unrestricted authority to terminate an Administrator's services. The petitioner, who served as Administrator for over three years from 31.05.2019, was validly relieved through communication dated 09.03.2022 without casting any stigma. The termination communication acknowledged the petitioner's efforts while confirming the non-permanent nature of the administrative appointment. The court directed SEBI to assess and determine the petitioner's remuneration within eight weeks, in accordance with the circular dated 02.04.2019, considering the graded payment mechanism based on asset sale proceeds. The petitioner's request to nullify the termination letter was deemed untenable.
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• Regulatory Probe Halted: SEBI Investigation Under Section 11-C Requires Concrete Evidence, Not Mere Allegations

  Case-Laws - HC : HC determined that initiating an investigation under Section 11-C of SEBI Act requires demonstrable reasonable grounds. The court found insufficient substantive evidence to warrant the investigation, as the appointing authority merely reiterated withdrawn allegations without comprehensive supporting documentation. Internal notings remained unapproved by the Executive Director, and no compelling circumstances justified a suo motu investigation. The order was deemed arbitrary and unreasonable, lacking the requisite legal threshold for initiating regulatory proceedings against the petitioner entity.
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Case Laws:

• GST

• 2025 (5) TMI 459
  Service of SCN - SCN was uploaded on the Additional Tabs and was not within the knowledge of the Petitioner - challenge to N/N. 09/2023-Central Tax dated 31st March 2023, 09/2023-State Tax dated 22nd June 2023, 56/2023-Central Tax dated 28th December 2023 and 56/2023-State Tax dated 11th July 2024 - principles of natural justice - HELD THAT:- This Court had the opportunity to hear a batch of petitions wherein inter alia, the impugned notifications had been challenged. The case in DJST Traders Private Limited v. Union of India Ors. [ 2025 (5) TMI 43 - DELHI HIGH COURT] is the lead matter in the said batch of petitions. In the said petition, on 22nd April, 2025, the parties were heard at length qua the validity of the impugned notifications and accordingly it was held that Broadly, there are six categories of cases which are pending before this Court. While the issue concerning the validity of the impugned notifications is presently under consideration before the Supreme Court, this Court is of the prima facie view that, depending upon the categories of petitions, orders can be passed affording an opportunity to the Petitioners to place their stand before the adjudicating authority. In some cases, proceedings including appellate remedies may be permitted to be pursued by the Petitioners, without delving into the question of the validity of the said notifications at this stage. As observed by this Court in the order dated 22nd April, 2025 as well, since the challenge to the above mentioned notification is presently under consideration before the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax Ors. [ 2025 (4) TMI 60 - SC ORDER] , the challenge made by the Petitioner to the impugned notifications in the present proceedings shall also be subject to the outcome of the decision of the Supreme Court. However, on facts, the SCN was issued on 26th September, 2023. The same is stated to have been uploaded on the Additional notices tab and the SCN did not come to the knowledge of the Petitioner. The impugned order has been passed against the Petitioner on 12th December, 2023 - considering the fact that the notice was uploaded on the tab prior to the changes effected on the GST portal on 16th January 2024, the Petitioner is permitted to file a reply to the SCN within one month. Conclusion - i) The Petitioner is given an opportunity to file its reply and is heard on merits and that orders are not passed in default. ii) The adjudication order shall be subject to the outcome of the SLP pending in the Supreme Court, where the impugned notifications are challenged. Petition disposed off.

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• 2025 (5) TMI 458
  Seeking grant of anticipatory bail - fraudulently obtaining a refund from the Customs Department against Input Tax Credit (ITC) for which they were not eligible - HELD THAT:- Petitioner already declared his assets by way of affidavit and the same is handed over to the State. As such, State may recover the amount, if any, from the petitioner in accordance with law, for which custodial interrogation is not required. Pre-trial incarceration should not be a replica of post-conviction sentencing. The evidence might be prima facie sufficient to launch prosecution or to frame charges, but this Court is not considering the evidence at that stage but is analyzing it for the stage of anticipatory bail. An analysis of the above does not justify custodial interrogation or pre-trial incarceration. The penal provisions invoked coupled with the primafacie analysis of the nature of allegations and the other factors peculiar to this case, there would be no justifiability for custodial interrogation or the pre-trial incarceration at this stage, subject to the compliance of terms and conditions mentioned in this order. Without commenting on the case s merits, in the facts and circumstances peculiar to this case, and for the reasons mentioned above, the petitioner makes a case for bail. The petitioner is directed to join the investigation within seven days of uploading this order on the official webpage of the High Court of Punjab and Haryana and as and when called by the Investigator. The petitioner shall be in deemed custody for Section 27 of the Indian Evidence Act, 1872/ Section 23 of BSA, 2023. The petitioner shall join the investigation as and when called by the Investigating Officer or any Superior Officer and shall cooperate with the investigation at all further stages as required. In the event of failure to do so, the prosecution will be open to seeking cancellation of the bail. During the investigation, the petitioner shall not be subjected to third-degree, indecent language, inhuman treatment, etc. Conclusion - The petitioner is granted anticipatory bail and it was held that anticipatory bail was warranted, subject to stringent conditions, to prevent irreversible injustice due to pre-trial incarceration. Bail application allowed.

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• 2025 (5) TMI 457
  Parallel/multiple proceedings - initiating and passing an order u/s 74(9) of the Bihar Goods and Services Tax Act, 2005 (BGST Act) despite the existence of an ongoing investigation by the Central Agency (DGGI) into the same subject matter - violation of provisions of Section 6(2)(b) of the CGST/BGST Act, 2017 - principles of natural justice - HELD THAT:- So far as the challenge to the impugned order (Annexure- 5 ) is concerned, it is liable to fail for the reason that this order has not been passed during pendency of any proceeding on the same subject matter with the central agency. The order (Annexure- 5 ) has been passed upon scrutiny in terms of Section 61(1) of the CGST/BGST Act, 2017 read with Rule 99(1). The assessing authority/Proper Officer has categorically mentioned in the impugned order that notice Online ASMT-10, Reminder-1 and Reminder-2 were issued but despite lapse of time, the registered dealer did not submit its reply in GST ASMT-11. The dealer did not reverse the ineligible Input Tax Credit. These facts mentioned in the impugned order have not been contested by the petitioner. The submission of learned Senior Counsel for the petitioner that the basis of initiation of the proceedings and passing of order as contained in Annexure- 5 is the investigation and the materials which were sought for by issuing summons contained in Annexures- 1 , 2 and 4 by the central agency cannot be accepted on the face of the statement present in Annexure- 5 which have not been contested. In the present case, there is no denial of the facts mentioned in the impugned order (Annexure- 5 ) that the petitioner was issued a demand-cum-show cause notice in terms of sub-section (1) of Section 74 of the CGST Act, 2017. The fact remains that service of the demand-cum-show cause notice under sub-section (1) of Section 74 has also not been questioned and contested by the petitioner. It is also evident that in the show cause notice issued under sub-section (1) of Section 74, the petitioner was duly informed that he may appear before the authority for personal hearing either in person or through authorized representative - This Court, therefore, finds that there was proper compliance with the principles of natural justice before passing of the impugned order as contained in Annexure- 5 to the writ application. There are no jurisdictional error on the part of the State Authority (Respondent No. 2) in passing of the impugned order. The writ application is not fit to be entertained. Conclusion - The validity of the State Authority s order under Section 74(9) of the BGST Act upheld, rejecting the petitioner s contention that parallel proceedings by the Central Agency barred such action. Application disposed off.

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• Income Tax

• 2025 (5) TMI 456
  Disallowance of deduction made u/s 80IA - non-filing of the audit report in Form 10CCB relevant agreements and assessee is a works contractor not engaged in development maintenance of infrastructure facility - CIT(A) confirmed the above disallowance made by the Assessing Officer on the ground that the assessee has not furnished prescribed audit report in Form 10CCB - HELD THAT:- As before us it was the claim of the assessee that Form 10CCB was filed during the course of assessment proceedings the agreements were also produced but the Assessing Officer as well as Ld. CIT(A) has not accepted this fact and therefore the disallowance made by the Assessing Officer was confirmed by CIT(A). We find that Ld. AR of the assessee produced an affidavit duly sworn in by the Chief Financial Officer of the assessee company stating that Form 10CCB was filed during the course of assessment proceedings and the same is still available in the original assessment case records. It is also the contention of the assessee that this fact was revealed when the assessee sought permission of inspection of original assessment case records which was called at the direction of this Tribunal. We find in the affidavit that the assessee also claimed that the relevant agreements/documents were also handed over to the Assessing Officer physically as well as in Pen Drive. We deem it appropriate to set-aside the order passed by CIT(A) with regard to ground no.4 only i.e. in respect of disallowance of deduction claimed by the assessee u/s 80IA and remand the matter back to him with a direction to decide this limited issue only, afresh, as per fact and law, after providing reasonable opportunity of hearing to the assessee. Thus, this ground no.4 raised by the assessee stands partly allowed for statistical purposes. Addition u/s 2(22)(e) - HELD THAT:- In the catena of judgements referred by Ld. Counsel for the assessee as well as in the impugned order, the ratio laid down by the Hon ble Apex Court in the case of Gopal And Sons (HUF) [ 2017 (1) TMI 331 - SUPREME COURT] has not been considered. Under these given facts and circumstances, we deem it appropriate to remit back the issue of addition for deemed dividend u/s 2(22)(e) of the IT Act back to the file of CIT(A) who shall examine the facts in the light of above judgement of Hon ble Apex Court in the case of Gopal And Sons (HUF) (supra) and shall also conduct necessary enquiry to examine about the application of alleged funds received by the company. Before parting, we also notice that one of the ground raised by the assessee is that the transaction between the two companies i.e. one which gave the alleged some and one which received the alleged sum are in the nature of business transactions, however, as to whether the company which has given the loan is into lending business or not, this aspect also needs to be considered by Ld. CIT(A) while carrying out the proceedings of examination of the issue of addition for deemed dividend u/s 2(22)(e) of the IT Act. Agricultural income - We find that similar claim of agricultural income was allowed in earlier years and the ownership of substantial agricultural land was also accepted, accordingly, we do not find any infirmity in the order passed by Ld. CIT(A) wherein he allowed the relief of Rs. 3,00,000/-. Thus, this ground no.2 raised by the Revenue is dismissed. Addition on account of various expenses - HELD THAT:- We find that the AO has made ad-hoc/estimated disallowance and no specific instance was pointed out and accordingly Ld. CIT(A) gave relief by estimating the reasonable disallowance and therefore we do not find any infirmity in the order passed by Ld. CIT(A) wherein he has restricted the addition of Rs. 35,00,000/- to Rs. 20,00,000/- thereby allowing relief of Rs. 15,00,000/- to the assessee on account of various expenses made on ad-hoc basis. Thus, the ground no.3 raised by the Revenue is dismissed.

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• 2025 (5) TMI 453
  Validity of reopening of assessment against the ex-promoters - notice u/s 148 against petitioner company after the approval of the resolution plan for a period prior to closing - liability of previous management - as decided by HC [ 2024 (5) TMI 57 - BOMBAY HIGH COURT] unable to fathom as to how the provisions of Section 148 can be applied for collection of evidences of third party, ex-promoters etc., and we say this because there are separate provisions u/s 133(6) in which, such evidences can be collected. We are also unable to understand how the provisions of Section 148 can be used when the proceedings are not for recovery of tax - HELD THAT:- There is a gross delay of 250 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner. Even otherwise, we find no good reason to interfere with the impugned order passed by the High Court. Special Leave Petition is, accordingly, dismissed on the ground of delay as well as merits.

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• 2025 (5) TMI 452
  Revision u/s 263 - allowability of the expenditure and carry forward of the losses - ITAT quashed the order of CIT - As decided by HC [ 2021 (2) TMI 232 - BOMBAY HIGH COURT] ITAT was not justified in interfering with the CIT s order, since, the twin conditions prescribed u/s 263 were fulfilled. Besides, the CIT, by the impugned order, had quite fairly, granted the assessee an opportunity of being heard whilst directing the AO to verify the claim of the assessee in respect of the allowability of the expenditure and carry forward of the loss in accordance with law. HELD THAT:- We find that this is not a fit case to interfere under Article 136 of the Constitution of India. The Special Leave Petition is accordingly dismissed. All contentions are left open.

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• 2025 (5) TMI 451
  Disallowance of interest expense - loan amount in question was used by the appellant for purchasing land which was an agricultural land and on which the appellant had cultivated tapioca - As decided by HC [ 2024 (5) TMI 1243 - KERALA HIGH COURT ] tribunal rightly noticed by the Tribunal in the impugned order, the evidence on record showed that the land in question was used for agricultural purposes, which yielded agricultural income, which in turn was exempt from income tax u/s 10(1) of the Income Tax Act. As in view of Section 14A of the IT Act, the expenses could not have been seen as incurred for the purposes of the business for the purposes of Section 36 (iii) of the IT Act. HELD THAT:- As petitioner seeks permission to withdraw the present special leave petition. He is permitted to do so. Special Leave Petition is dismissed as withdrawn.

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• 2025 (5) TMI 450
  Reopening of assessment u/s 147 - Validity of order passed u/s 148A(d) - change of opinion - assessee has not produced any supporting documentary evidences in respect of the donation given - allegation of non sharing of the information/material purportedly relied upon in the impugned notice - as per HC [ 2023 (10) TMI 277 - ALLAHABAD HIGH COURT] the impugned order u/s 148A(d) and notice u/s 148 would not warrant any interference under Article 226 of the constitution of India as challenge to such order would be available to an assessee while challenging the order passed in reassessment proceedings consequent to the notice issued u/s 148 of the Act As petitioner has submitted that though specific ground about noncompliance of procedure under Section 151A of the Income Tax Act has been taken before the High Court, the said submission has not been considered. HELD THAT:- Having gone through the judgment of the High Court, we are of the opinion that there is in fact no submission based on Section 151A of the Act. As we were not inclined to interfere with the judgment of the High Court on this ground, Ms. Kavita Jha sought to withdraw the Special Leave Petition for approaching the High Court by filing a review petition. We are of the opinion that this is a reasonable request. The permission as sought by Ms. Kavita Jha is granted and Special Leave Petition is dismissed as withdrawn to enable the petitioner to adopt such remedies as are available to it in law with liberty to file appeals against the main order if so advised. In the facts and circumstances of the case, the interim order passed by this Court shall enure to the benefit of the petitioner for a period of four weeks from today. Special Leave Petition stand dismissed as withdrawn.

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• 2025 (5) TMI 449
  Reopening of assessment u/s 147 as barred by limitation u/s 149 - whether the conditions as specified under Section 149 (1) (b) of the Act are satisfied? - reasons to believe - HELD THAT:- As is apparent from the plain language of the said clause that, essentially, three conditions are required to be satisfied. First, that the AO has in his possession books of account or other documents or evidence, which reveal that the income chargeable to tax has escaped assessment. Second, that the said evidence is to the effect that the income chargeable to tax that has escaped assessment is represented in the form of an asset. And third, that the amount of income that has escaped assessment is or is likely to amount to Rs. 50 lakhs or more. Explanation to Section 149 (1) of the Act further explains that for the purposes of Clause (b) of Sub-section (1) of Section 149 of the Act, the expression asset would include immovable property, being land or building or both, shares and securities, loans and advances and deposits in bank. If we now examine the reasons for re-opening of the assessment as set out in the order passed under Section 148A (d) of the Act, we find that there is no evidence to support that the income, which has allegedly escaped assessment is represented in the form of an asset. The suggestion that the petitioner s income had escaped assessment is founded on the premise that the petitioner has booked expenses under the head wages and salaries , which are in excess of the expenses incurred during the relevant previous year (FY 2012-13). Note 21 to the Financial Statement for the said period furnished by the petitioner expressly indicates that an expenditure of Rs. 9.14 crores, which was debited to the account under the head Salaries and Wages, included Rs. 2.85 crores relating to the current year and Rs. 6.29 crores for the earlier years based on a debit note issued from NTPC. There is no cavil that the petitioner had incurred expenditure of Rs. 9.14 crores. The only ground on which the AO believes that the petitioner s income chargeable to tax for the relevant assessment year has escaped assessment is that the said expenditure includes expenditure, which is allocable to financial years prior to FY 2012-13. The account of salaries and wages is a nominal account. It is, thus, apparent that any expenditure incurred for the salaries and wages, irrespective of the years in which the same is incurred, would not be represented by any asset. Since the conditions as specified under Section 149 (1) (b) of the Act are not satisfied, no notice u/s 148 of the Act could be issued after expiry of three years from the end of AY 2013-14, that is, after 31.03.2017. In view of the above, it is not necessary to address the question whether reopening of assessment for AY 2013-14 is barred under the proviso to Section 149 (1) of the Act. However, we consider it apposite to address the said question as well. In the present case, the petitioner had expressly disclosed in its accounts, which were furnished in support of its return that the expenses booked under the head wages and salaries included Rs. 6.29 crores on account of salaries and wages, which pertain to prior financial years. Thus, no proceedings for initiation of reassessment could have been initiated under the provisions relating to reassessment that were in force prior to 01.04.2021 after expiry of four years from the end of the relevant assessment year. In the facts of the present case, the initiation of reassessment proceedings is not premised on any search conducted u/s 132 of the Act or requisitioned made u/s 132A of the Act. Thus, it would be relevant to examine whether a notice u/s 148 of the Act could have been issued for the reasons as communicated to the petitioner on 30.05.2022, pursuant to the directions issued in Union of India Ors. v. Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT ]. As stated earlier, the reason to believe that the petitioner s income had escaped assessment is premised on the basis that prior period expenses had been booked by the petitioner in its account for the previous year for the financial year 2012-13. Even if reopening of assessment by issuance of notice under Section 148 of the Act is permissible under the main enactment of Section 149 (1) of the Act, no such notice could be issued in the present case by virtue of the first proviso to Section 147(1) of the Act. Reasons for the petitioner to have booked the said expenditure for the FY 2012-13. The petitioner is a joint venture company formed by two public sector undertakings GAIL and NTPC Limited. It has been explained that NTPC Ltd. had seconded certain employees to the petitioner and the expenses of their salaries and wages were incurred by the petitioner. It was explained that NTPC Ltd. had issued a circular revising the salaries of its employees retrospectively. The said circular was communicated to the petitioner during the financial year relevant to assessment year in question [AY 2013-14]. Thus, although liability for payment of enhanced remuneration to the employees of NTPC who were seconded to the petitioner, pertaining to prior years, had crystalized during the previous year relevant to AY 2013-14, we find no infirmity with the petitioner debiting its profit and loss account with the said expenditure. Thus, reassessment proceedings initiated pursuant to the impugned notice, are set aside. Decided in favour of assessee.

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• 2025 (5) TMI 448
  Penalty u/s 271E - contravention of the Section 269T - bona fide within the meaning of Section 273B or not? - whether the reasonable cause shown by the petitioner, for having repaid the loan in cash on instruction of the lender to arrest escalation of the interest on loan for want of liquidation, whether it can be held to be bona fide quo Section 273B? - HELD THAT:- Section 269T provides that irrespective of the fact that there are several modes for repaying the deposit, the entities specified in Section 269T shall repay the deposit only by the modes set out therein. Thus, the negative language used in Section 269T as also the penal consequences provided in Section 271E for non-compliance of the procedure prescribed u/s 269T leave no manner of doubt that repayment of deposit in the manner prescribed u/s 269T is mandatory. Thus, it is mandatory u/s 269T of the Act for the persons specified therein to repay any loan/deposit together with interest, if any, exceeding the limits prescribed therein, by account payee cheque/ bank draft. The word reasonable cause has not been defined in the Act of 1961. Therefore, in the context of the penalty provisions, the words reasonable cause would mean a cause which is beyond the control of the assessee. Reasonable cause obviously means a cause which prevents a reasonable man of ordinary prudence acting under normal circumstances, without negligence or inaction or want of bona fides. In the instant case, the assessing authority while completing the assessment of return of income, came to the conclusion that the assessee made repayment of loan to M/s. Tata Finance Corporation for the assessment year 2015-16 in cash and proceeded to levy penalty u/s 271E of the Act straightway without noticing the provisions contained in Section 273B of the Act. There is no finding by the assessing authority or the two appellate authorities that the transaction made by the assessee in breach of the provisions contained in Section 269T of the Act, was not a genuine transaction. As stated earlier, all the three authorities viz., the AO CIT (Appeals) and the ITAT have proceeded on the basis that breach of provisions contained in Section 269SS of the Act shall lead automatically to penal provisions contained in Section 271E of the Act and completely ignored the provisions contained in Section 273B of the Act which requires that on proof of reasonable cause, the penalty imposable u/s 271E (1) would not be imposable and further ignored the fact that the imposition of penalty merely on technical mistake committed by the assessee, which has not resulted in any loss of revenue, would not be sustainable. the cause shown by the assessee that on the insistence of M/s. Tata Finance Corporation to pay the amount of loan in cash vide its letter dated 5-11-2012, would constitute a reasonable cause within the meaning of Section 273B of the Act and also in light of the decision of Kum. A.B. Shanthi s case [ 2002 (5) TMI 4 - SUPREME COURT ] reasonable cause has been shown by the assessee for non-compliance with the provisions contained in Section 269T of the Act and the transaction is genuine and bona fide which is not disputed by all the three authorities, however, all the three authorities ignored the provision contained in Section 273B of the Act and proceeded to levy penalty u/s 271E of the Act rendering the provision contained in Section 273B of the Act otiose, as the provision contained in 271E of the Act for imposition of penalty for non-compliance of Section 269T of the Act is subject to Section 273B of the Act. The order imposing penalty passed by the Assessing Officer, affirmed by the first appellate authority and further affirmed by the second appellate authority are liable to be and are hereby set aside/ quashed and it is held that since the appellant has shown the reasonable cause within the meaning of Section 273B - Decided in favour of assessee.

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• 2025 (5) TMI 447
  Reopening of assessment u/s 147 - as argued procedure u/s 148A was not followed, proper sanction was not obtained u/s 151 and AO had no territorial jurisdiction to issue a notice under Section 148 of the Act or to conduct the reassessment proceedings - HELD THAT:- As Petitioner now seeks to assail the order passed u/s 127 and has advanced submissions on two fronts: first, that the order passed u/s 127 of the Act is invalid on the ground that it assumes that the Petitioner is an assessee located in Delhi; and second, that no notice was issued to the Petitioner before passing the said order. Clearly, none of these grounds find mention in the present petition as according to the Petitioner, no such order existed. Other contentions are concerned, considering that the Petitioner is also challenging the assessment order on merits, we do not consider it apposite to entertain the same. We dispose of the present petition by leaving it open for the Petitioner to avail the statutory remedies. Petitioner requests that the time for filing the appeal against the impugned order may be extended as the same has elapsed. Mr. Chandra, learned counsel for the Revenue fairly states that he has no objection, if the same is extended by a period of two weeks. We direct that in the event the Petitioner avails the statutory remedies in respect of the impugned order within a period of two weeks from date, the same would be considered by the concerned authority uninfluenced by the question of delay. All rights and contentions of the parties are reserved and the Petitioner would not be precluded from assailing the impugned order, inter alia, on the grounds as urged in the present petition. Additionally, we clarify that the Petitioner is also at liberty to avail other remedies in respect of the order dated 17.12.2024 passed u/s 127 of the Act.

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• 2025 (5) TMI 446
  Seeking Refund of Tax recovered - amounts against an outstanding demand pursuant to the assessment order which has been set aside, has not been refunded as yet - HELD THAT:- Although, a specific prayer has not been made in the present petition regarding the Petitioner s grievance arising from attachment of his bank accounts which the learned counsel states still continues to be attached this court considers it apposite to further direct the concerned authorities to vacate the attachment in the event no further amounts are required to be recovered from the petitioner. We direct the concerned authorities to process the Petitioner s claim for refund alongwith applicable interest as expeditiously as possible and in any event within a period of eight weeks from date. In the event, the concerned authorities are of the view that the petitioner is not entitled to the refund, the said decision and the reasons for the same would be communicated to the petitioner. The petition is allowed in the aforesaid terms.

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• 2025 (5) TMI 445
  Validity of reassessment proceedings beyond period of limitation - escaped income from multiple assessment years to meet the threshold limit of Rs. 50 lakhs - whether the issuance of notice u/s 148 of the Act is within the period of limitation as prescribed u/s 149 (1)? - HELD THAT:-Conditions, as set out in Sub-section (1A) of Section 149 of the Act, are not satisfied. The issue involved in the present case is covered by the decision of this court in M/s L-1 Identity Solutions Operating Company Private Limited [ 2025 (4) TMI 1363 - DELHI HIGH COURT ] a plain reading of Sub-section (1A) of Section 149 of the Act indicates that the condition of a minimum amount of Rs. 50 lakhs of income escaping assessment, may be satisfied by the cumulative amount that has escaped assessment or is likely to escape assessment in respect of more than one assessment year exceeding the said amount. However, the same is subject to the condition that the income chargeable to tax is represented in the form of an asset or expenditure in relation to an event or occasion . Thus, in cases where the income that has escaped assessment is represented by an asset , notwithstanding that the said asset is on account of income that escaped assessment for more than one previous years, the condition under Section 149 (1) (b) of the Act would be satisfied, if the value of the asset exceeds Rs. 50 lakhs. The same would hold true if there is an expenditure in relation to an event or occasion , which exceeds the value of Rs. 50 lakhs. In this case as well as notwithstanding that the expenditure has been incurred in different previous years, the condition under Section 149 (1) (b) of the Act would be satisfied if the cumulative value of the expenditure exceeds Rs. 50 lakhs, provided that the same is related to an event or occasion The petition is accordingly allowed. Reassessment proceedings set aside.

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• 2025 (5) TMI 444
  Penalty levied u/s 271 (1) (c) - allegation of defective notice - AO disallowed the Assessee s claim for expenditure for availing professional services and further disallowance on account of interest claimed by the Assessee u/s 36 (1) (iii) - HELD THAT:- Revenue did not controvert that the notice issued to the Assessee did not specify under which limb of Section 271 (1) (c) of the Act, the penalty was proposed to be levied. Concededly, the question whether penalty proceedings initiated pursuant to such a notice is sustainable is squarely covered against the Revenue by several decisions of this court. As adverted to in the Unitech Reliable Projects Pvt. Ltd. [ 2023 (6) TMI 1219 - DELHI HIGH COURT] case, the imposition of a penalty entails several consequences. The AO is required to apply his mind to the material and indicate, clearly, to the assessee what is being put against him. In other words, which limb of Section 271(1)(c) of the Act is attracted in the given facts and circumstances of the case. Notice issued by the AO u/s 274 read with Section 271 (1) (c) to be bad in law as it did not specify which limb of Section 271 (1) (c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income - Decided in favour of assessee.

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• 2025 (5) TMI 443
  Validity of reassessment proceedings for want of necessary approval - valid sanction u/s 151 - HELD THAT:- In the present case, there is no dispute that the original assessment proceedings had culminated into the assessment order dated 30.12.2008 passed u/s 143(3). Therefore, in terms of the proviso (1) to Sub-section (1) of Section 151 of the Act, no notice u/s 148 could be issued unless, the Commissioner of Income Tax [CIT] or the Chief Commissioner of Income Tax [CCIT] was satisfied on the reasons recorded by the AO that it was a fit case for issuance of such notice. Admittedly, in the present case, no approval was obtained from the CIT or the CCIT. The notice under Section 148 of the Act was issued with the approval of the JCIT and not CCIT or CIT. Clearly, the notice under Section 148 of the Act was invalid as issued contrary to the provisions of Section 151 (1) of the Act. Any proceedings continued pursuant to said notice including the assessment order passed u/s 147 of the Act cannot be sustained. Thus, question whether the reassessment proceedings are without the jurisdiction as it did not have the approval of the statutory authority as mandated u/s 151 is answered in favour of the Assessee and against the Revenue.

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• 2025 (5) TMI 442
  Validity of order of assessment passed u/s 143(3) - AO obligation u/s 144C(1) to forward a draft of the proposed assessment order to the petitioner - HELD THAT:- As per Section 144C of the Act, 1961, the Assessing Officer is bound to forward a draft of the proposed order of assessment to the eligible assessee, if he proposed to make any variations which are prejudicial to the interest of such assessee. The eligible assessee has been defined u/s 144C(15) of the Act, 1961, which means any person in whose case the variation referred to in sub-section (1) arises as a consequence of the order of the TPO passed under sub-section (3) of Section 92-CA and any non-resident not being a company or any foreign company. The matter was remanded to the TPO to pass a fresh order u/s 92C (3) of the Act, 1961. Once the order has been passed by the TPO in accordance with the provisions, the petitioner becomes the eligible assessee and would come within the framework of Section 144C and the AO would have to pass a fresh order in terms of Section 144C. According to the order passed by the TPO, if any variations are made by the Assessing Officer on the said basis, he would have to compulsorily and necessarily pass a draft assessment order and forward it to the eligible assessee as the word used in Section 144C(1) of the Act, 1961, is shall . One such a proposed draft is forwarded to the eligible assessee, the procedure as laid down under Section 144C of the Act, 1961, would commence and would necessarily require to be completed accordingly. However, it appears that upon remand of the matter, the Assessing Officer has proceeded to pass an order finally in terms of Section 143(3) of the Act, 1961 without considering the provisions of Section 144C of the Act, 1961. The order, therefore, is not sustainable in law.

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• 2025 (5) TMI 441
  Purchase of Land under unexplained investment - two notices issued by the office of the CIT(A) / NFAC for which there was non-compliance from the side of the assessee - as submitted that the assessee is only a General Power of Attorney holder of Kadam family and was purchasing the property on behalf of Shri Maruti Wind Park Developers. Due to non-submission of the reply by the manager of the said company, the Assessing Officer made addition in the hands of the assessee. Delay in filing appeal - HELD THAT:- Ld. CIT(A) / NFAC should have taken a pragmatic view by condoning the delay of 40 days in light of the decisions of the Hon ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji Ors. [ 1987 (2) TMI 61 - SUPREME COURT] where it has been held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. We deem it proper to restore the issue to the file of the Assessing Officer with a direction to decide the issue afresh after proper verification of the records and considering the fact that the assessee is an employee of Shri Maruti Wind Park Developers and his transactions are in the capacity of General Power of Attorney holder. Needless to say, he shall decide the issue as per fact and law after providing due opportunity of being heard to the assessee. Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (5) TMI 440
  Revision u/s 263 - Validity of reassessment proceedings - Addition u/s 68 on bogus LTCG - HELD THAT:- We on going through the reasons recorded by the AO for carrying out the re-assessment proceedings note that the same were based on two facts, firstly the addition made in the hands of another assessee Rajendra Babulal HUF u/s. 68 of the Act for the bogus long term capital gain claimed u/s. 10(38) of the Act from sale of Equity shares of Greencrest Financial Services Private Limited. Secondly, information was received from the DDIT (Investigation) Kolkata about the beneficiaries of bogus long term capital gain which involved the name of the assessee also. When these informations were received by the AO and after proper application of mind and also examining the facts of the case from its income-tax return it was found that it is a fit case for issue of notice u/s. 148 of the Act. We therefore are of the considered view that reopening was not based on any borrowed satisfaction rather ld. AO has reason to believe that there is possible escapement of income in the form of bogus long term capital gain. He therefore issued notice u/s. 148 of the Act and carried out the re-assessment proceedings. Therefore, the first ground raised by the assessee that the re-assessment proceedings are invalid and bad in law and could not have been a subject matter of revision u/s. 263 of the Act has no merit and the same is hereby dismissed. Whether ld. PCIT was justified in invoking section 263 and holding that the order of the AO is erroneous in so far as prejudicial to the interest of the Revenue ? - There was no sufficient time available with the FAO to conduct enquiry and also to give opportunity to the assessee for the cross examination request of all the persons involved. This shows that had the sufficient time available with the AO a detailed enquiry would have been carried out to reach one of the permissible view. However, due to time constraint, no proper enquiries could be conducted by the AO nor proper time was given to the assessee to respond to the outcome of such enquiry if it had been conducted. The re-assessment proceedings have been concluded just for the sake of completion before they gets time barred and necessary enquiries could not be conducted by the AO for the alleged transaction of long term capital gain u/s. 10(38) of the Act. We therefore find merit in the finding of ld. PCIT observing that the re-assessment order dated 29.03.2022 is erroneous in so far as it is prejudicial to the interest of Revenue and thus has been rightly set aside so that proper re-assessment proceedings can be carried out after giving proper and reasonable opportunity to the assessee and then to decide the issue under consideration. Thus, the finding of ld. PCIT passed in the impugned order u/s. 263 of the Act is confirmed. Decided against assessee.

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• 2025 (5) TMI 439
  Validity of assessment u/s 147 OR proceedings ought to have been initiated u/s 153C instead - incriminating material seized or requisitioned belonging or relatable to the person other than on whom search was conducted HELD THAT:- We observed that Revenue Department has issued 153(C) notice and now the present appeal becomes infructuous, as the department cant issue Sec 148 notice and Sec 153(C) simultaneously for the same assessment year. Appeal of the Revenue is dismissed as infructuous.

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• 2025 (5) TMI 438
  Denial of Foreign Tax Credit (FTC) - taxes withheld/paid in United States of America - Form No. 67 filled beyond the due date - HELD THAT:- Filing of Form No. 67 is directory and not mandatory and the credit for foreign taxes paid cannot be denied merely on the delay in filing the Form No. 67. As per Duraiswamy Kumaraswamy [ 2023 (11) TMI 1000 - MADRAS HIGH COURT] and concurring with the views held in the cases relied upon in the cases of Rahul Anand [ 2024 (12) TMI 638 - ITAT KOLKATA] and Jaspal Singh Bindra [ 2024 (12) TMI 631 - ITAT KOLKATA] we hold that merely because the assessee could not file Form No. 67 within the prescribed time limit as per the provisions of rule 128(9) of the Income-tax rules, 1962, as it stood during the year under consideration, will not preclude the assessee from claiming the benefit of the Foreign Tax Credit in respect of taxes paid outside India. Therefore, the claim of the assessee is allowed and the AO is directed to give benefit of Foreign Tax Credit in respect of taxes paid outside India by the assessee in accordance with law and the DTAA between India and the USA - Appeal of assessee allowed.

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• 2025 (5) TMI 437
  Addition u/s 50C - difference between the declared sale consideration and the value assessable for the levy of stamp duty of the immovable property above mentioned without being referring the matter to the Ld. DVO - HELD THAT:- Powers of the CIT(A) are co-terminus with the powers of the AO. Merely because the assessee could not make compliance before the AO and no such request was made before the AO, it does not mean that the opportunity available to the assessee under the provisions of the Act should be denied. As per the provisions of Section 50C(2) of the Act, if the assessee claims before the AO that the value adopted or assessed by the stamp valuation authority exceeded the fair market value of the property as on the date of transfer, then the AO was required to refer the valuation of the capital asset to the Valuation Officer. Such request was made by the assessee before the AO in the course of remand proceeding. In view of these facts, we are of the considered opinion that the matter is required to be set aside to the file of the AO with a direction to refer the matter to the Valuation Officer for determining the Fair Market Value of the property and, thereafter, re-work the disallowance under Section 50Con the basis of his report. The ground taken by the assessee is allowed for statistical purpose. Applying profit percentage on the cash deposits in the bank account - AR submitted that the profit percentage of 3% as applied by the Ld. CIT(A) was excessive and that it should be reduced to 2.5% - HELD THAT:- AO had summited that the assessee did not produce the books of account related to his tour and travel business business. In view of this fact, the income disclosed by the assessee at the rate of 2.5% of the turnover was found not reliable and, therefore, the Ld. CIT(A) had directed to consider the income at the rate of 3% of the cash deposits. Assessee had himself admitted that he was earning commission at the rate of 2 to 3% of the turnover and that no books of account were produced in support of profit arrived @ 2.5% of the turnover, the income as estimated by the Ld. CIT(A) @ 3% of the cash deposits was reasonable. We do not find any reason to interfere with the order of the Ld. CIT(A) on this issue. Therefore, the ground taken by the assessee is dismissed.

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• 2025 (5) TMI 436
  Addition u/s 69A - unexplained cash deposits during the demonetization period - AR submitted that the assessee has already given the details related to cash deposits are out of the cash withdrawals from Kalupur Co-operative bank and the subsequent deposit of the said amount with Indian Overseas bank - HELD THAT:- From the perusal of the documents, it cannot be seen that the bank statement held with Indian Overseas bank the assessee has given the details from December, 2015 therein the assessee is depositing the amount to the extent of Rs. 6,90,000/- Rs. 1,48,000 Rs. 46,000/- and on the different dates the assessee is withdrawing as well the amounts. The bank statement of the assessee Kalupur Co-operative bank also reflects details of withdrawals as well as the subsequent deposits. The assessee has withdrawn Rs. 5,00,000/- each on the two dates and thus, in May, 2016, was having the cash of Rs. 10,00,000/-. Subsequently, the assessee was also having cash of Rs. 2,00,000/- from 1st Feb, 2016 as well as, if the same is tallied or co-related with the bank statement of Indian Overseas Bank, the assessee was having cash balance of Rs. 15,62,500/- in hand and therefore the trail of cash deposits during the period of demonetization has been explained by the assessee before the AO as well before the CIT(A). Therefore, AO was not right in making the addition u/s. 69A - Assessee appeal allowed.

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• 2025 (5) TMI 435
  Addition u/s 69C - undisclosed expenditure incurred in its ongoing project - HELD THAT:- Assessee failed to controvert the findings of ld. CIT(A) wherein it is observed by the Ld. CIT(A) that the figures mentioned therein are specific to the last Rupee and the other figures are also matching with the books of accounts. We are in agreement with the observations of CIT(A) and find no force in the arguments of assessee that this document is a dumb document. The judgement relied upon by the assessee are on different facts where revenue has failed to corelate the entries with the respective assessee or the figure noted does not represent any transaction. Whereas in the instant case, as observed above, almost all the figures are matching and are in relation to the projects carried out by the assessee. In view of these facts of the case, we confirmed the addition. Decided against assessee. Deprecation on Gym equipments - depreciation claim disallowed by observing that the Gym was not installed at the business premises - HELD THAT:- We find that it is not the first year that the depreciation on the Gym equipments was disallowed in the case of the assessee. It is also a matter of fact that no Gym equipments were found installed at the office premises when the search was taken place. Neither before the AO nor before the CIT(A) nor before us, assessee could controvert the findings that the Gym equipments were not installed at the office premises. This being so, the action of the AO in disallowing the deprecation on Gym equipments is found to be correct which is hereby upheld. Ground No.6 raised by the assessee is thus dismissed. Addition on account of unaccounted sale consideration received by the assessee - HELD THAT:- Agreement to Sell executed between the assessee and Shri R.C.Puri stood cancelled and the advance received was refunded through bank. The subject property was finally sold to M/s. Prerna Infradevelopers Pvt. Ltd. for INR 6.5 crores in FY 2008-09 relevant to AY 2009-10 wherein the loss incurred was duly accepted by the Department. It is also seen that the assessee has filed the cancellation agreement that Shri R.C.Puri had refunded advance amount which was not doubted by the AO nor any further enquiries were made nor any material was brought on record to hold that such cancellation agreement was sham document. Under these circumstances, we do not find any reason to interfere in the order of the Ld. CIT(A) in deleting the additions. As a result, Ground No.1(i) raised by the Revenue is dismissed. Disallowance of rent paid on for the property by holding that said premises was never taken by the assessee for business purposes - HELD THAT:- Premise in question was occupied by the appellant company for its office. This is a clear evidence that the assessee business premise was situated at this place. The assessee had filed all the necessary evidences such as rent agreement, ledger account, TDS certificate, bank statement and ownership proof in the hands of the landlord. The assessee has claimed depreciation of the assets installed at this premise which has been allowed. Merely for the inadvertent error of not intimating this premises in the reply filed, cannot be the sole basis of making disallowance by ignoring ample evidences filed by the assessee. No reason to interfere in the order of the Ld.CIT(A) in deleting the disallowance so made which is hereby upheld. Thus, Ground No.1(ii) of the Revenue s appeal is dismissed. Addition on account of foreign travel by Directors alongwith their family members - disallowance so made and observed that the travelling was carried out by the Directors and employees of the assessee company to buy the marble from Italy and majority of trips were carried out to Italy - HELD THAT:- We find that the AO simply on assumption and presumption basis has made the disallowance. From the details filed during the course of appellate proceedings as additional evidences which are discussed by the CIT(A) it is seen that the assessee has been able to demonstrate that the travelling were carried out for business purposes and ultimately marble was purchased from Italy and brought to India through Italian Freight carriers, Vapi Akash Stone Industries Ltd. Silvassa. It is also seen that in addition to the travelling undertaken by the Directors, Shri Inder Mohan Thapar Smt. Jaspreet Thapar, one Shri Naveen Punjabi who is the employee of the assessee company also visited Italy for making selection of the marble, stone etc. Thus, it is not a case where pleasure trips were carried out. The Ld.CIT(A) correctly deleted addition. Addition of deemed profit - CIT(A) has deleted the additions made on presumption basis - HELD THAT:- We find that the assessee has been able to demonstrate the breakup of the total cost claimed and further filed the necessary cancellation agreement which has not been doubted by the AO. Had there been any doubts in the mind of the AO with respect to the consideration received on cancellation agreement, he could have make independent enquiries from the other party which has not been done either during the course of assessment proceedings or during the remand proceedings. Further, no incriminating material to the effect was found/seized during the course of search. We are in full agreement with the observations made by the Ld.CIT(A) in deleting the addition made on presumption basis to protect the interest of the Revenue. Addition of advance received from one party - since the assessee has not being able to discharge the burden casted upon it proving the creditworthiness of the parties who had given the advance therefore, the addition was made - addition deleted by Ld.CIT(A) - HELD THAT:- CIT DR has failed to controvert the findings given by the CIT(A) and further looking to the facts that advance of INR 3 crores is duly mentioned in the Agreement to Sell and amount was received through banking channels and it was advance against the property and therefore, we do not find any infirmity in the order of the CIT(A) deleting the addition, thus the same is hereby upheld. Ground of the Revenue is thus dismissed.

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• 2025 (5) TMI 434
  Assessment u/s 153A in the case of unabated / completed year(s) - unexplained cash deposits in the bank accounts - meaning of other material - Diversified opinion of members of bench - matter refered to third member HELD THAT:- The assumption of jurisdiction u/s 153A of the Act being automatic consequent to search and seizure action u/s 132 of the Act, the assessments are completed based on the entire material before the Assessing Officer in the case of abated assessment. The moment action u/s 132 takes place, all the assessments pending as on the date shall abate. The interplay between Sections 153A, 153C, 147, undisclosed income, total income, abatement, unabated assessments, incriminating material, other material has to be treaded with utmost diligence and crucial in understanding how the principle against multiple assessments is upheld in the context of search and reassessment proceedings. One potential scenario for multiple assessments could arise if the Assessing Officer initiates proceedings u/s 147 for assessment years that are already covered under the block period of Section 153A, particularly based on the other material and facts emanated from the search proceedings during the assessment u/s 153A of the Act. Judicial pronouncements have aimed to clarify that once an assessment is made under Section 153A for a particular assessment year within the block period, the scope for reopening that assessment under Section 147 is limited. In accordance with the majority opinion, comprising the opinion of the Hon ble Accountant Member and the Hon ble Third Member, the appeals as decided Hon ble AM: All the additions which were based on incriminating material as well as on the basis of other materials as available with the AO are required to be set-aside to the file of Ld. CIT(A) to examine the matter on their merit . Hon ble Vice President (Third Member): I agree with the Hon ble AM that there is no legal impediment in making an addition, the basis of other material found during search, in an assessment u/s 153A for a year whose assessment was not pending on the date of search. For assessment years, where some incriminating materials have been found to exist as per the findings of ITAT, the matter is hereby being restored to the file of Ld. CIT(A) for deciding the grounds taken by the assessee on merits. In the combined result, all the appeals filed by the Department and assessee are partly allowed for statistical purposes.

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• 2025 (5) TMI 433
  Rejecting the approval u/s 80G - Charitable purposes or not - School Bus Fees , Tuition Fees and Exam Fees collected by the appellant for certain financial years do not fall under the definition of donations and therefore, provisions of section 80G of the Act are not found applicable - HELD THAT:- We are of the considered opinion that at the time of granting of approval u/s 80G of the Act, the authority has to satisfy herself that the chartable institution is established in India for charitable purposes and the activities of the assessee trust are genuine and the assessee trust also fulfilled all the conditions as mentioned above. CIT(Exemptions) in our view has also not brought any material on record to show that the assessee trust activities are not genuine or the conditions as specified above are not fulfilled by the assessee trust. The mere fact that assessee being an educational institution received school bus fees, tuition fees and exam fees, the approval u/s 80G of the Act cannot be denied specially when it is establish for the charitable purposes within the meaning of section 2(15) and the registration u/s 12A of the Act has already been granted. Provisions of section 11 12 along with section 13 including application of fund collected by the charitable organization are to be examined during the course of assessment proceedings and not at the time of granting approval u/s 80G of the Act. The issue whether receipts in the form of school bus fees, tuition fees and exam fees do not fall under the definition of donation are not at all relevant in the present proceedings as it is not a case of claiming deduction of donation paid u/s 80G of the Act from the Gross total Income by the donor. We allow the appeal of the assessee trust and direct the CIT (Exemptions) to grant approval u/s 80G of the Act to the assessee as applied in form 10AB on 29/06/2024. Assessee appeal allowed.

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• 2025 (5) TMI 432
  CPC jurisdiction to disallow or deny the claim for deduction made u/s 80P at the relevant time of passing the order of intimation u/s 143(1) - HELD THAT:- Appellant society furnished its ITR beyond the prescribed due date (filed belated) but making therein claim for 80P(2) deduction. The claim for deduction was no doubt subjected to disallowance by application of provisions of clause (ii) of section 80AC of the Act, however there was complete absence of authority vested with the Ld. CPC to carry out the disallowance u/s 143(1)(a)(v). Therefore, the impugned action of denial of 80P deduction to the appellant by the Ld. CPC was barred by jurisdiction, hence unlawful. And in the absence of any explicit power contained in and vested with any authority under the Act to ratify the impugned action of the Ld. CPC, we are duty bond to reverse prejudice caused to the appellant by vacating the impugned disallowance. We concur with the claim of the appellant society that the Ld. CPC clearly traversed and in fact exceeded its jurisdiction in disallowing the appellant s claim for deduction u/s 80P of the Act. Therefore, same is liable to be vacated. In consequence, we set-aside impugned order of Ld. CIT(A) and direct the Ld. CPC to reverse the disallowance and accept the claim of deduction u/c VI-A of the Act as claimed in the return of income filed by the appellant assessee.

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• 2025 (5) TMI 431
  Addition u/s. 56(2)(vii)(c)(ii) - difference in the valuation of shares calculated as per rule 11(UA) as compared to the valuation given in the valuation report obtained from independent valuer - HELD THAT:- Assessee has demonstrated that it is not a case of allotment of shares of higher value at lower rates with a purpose of transferring capital asset of higher value for less money. In fact, the company Baroque Pharmaceutical Ltd. had obtained loan of Rs. 22 crores for its business needs from the bank and to comply the conditions of the loan sanction letter, the outstanding loan of Rs. 10,39,000/- given by the assessee was converted into share capital. Even, the ld. counsel has also demonstrated various discrepancies in the valuation done by the AO. In view of this, find no justification on the part of the AO to make impugned additions and the same are ordered to be deleted. Appeal of the assessee stands allowed.

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• 2025 (5) TMI 430
  Addition of the liability claimed by the assessee firm to be outstanding - HELD THAT:- As in the course of the assessment proceedings IOC Limited had time and again expressed its inability to provide a copy of the account of the assessee firm as appearing in its books of account to the AO for the reason that it had w.e.f FY 2004-05 migrated to SAP software for maintaining its accounts. Accordingly, we are of a firm conviction that there were justifiable reasons for the assessee firm in not filing the letter/confirmation from IOC Limited in the course of the assessment proceedings or before the CIT(A). We, thus, in terms of our aforesaid deliberations admit the letter/confirmation alongwith the copy of the ledger account of the assessee firm (as appearing in the books of account of IOC Limited) as additional evidence under Rule 29 of the Appellate Tribunal Rules, 1963. Apropos, the merits of the claim of AR that IOC Limited, had vide its letter/confirmation alongwith the copy of account of the assessee firm (as appearing in its books of account) duly confirmed that an amount was outstanding in the latter s account as on 31/03/2004, we find substance in the same. We find that not only IOC Limited had vide its letter/confirmation dated 23/12/2024 confirmed that an amount was outstanding in the account of the assessee firm as on 31/03/2004, but also the said fact can safely be gathered on a perusal of the copy of the ledger account of the assessee firm that had been enclosed along with the same. We, thus, in terms of our aforesaid deliberations vacate the addition that was made by the A.O, which, thereafter, was sustained by the CIT(A). The Grounds of appeal No(s). 2 3 are allowed. Disallowance of sub-contract payments - As the assessee, despite having been afforded sufficient opportunities, had in the course of the set-aside proceedings failed to lead any evidence which would irrefutably evidence that the payments made to Sri Krishna Kumar Raju were towards the sub-contract work that was executed by him and were not in the nature of an advance, therefore, no infirmity arises from the orders of the lower authorities who have rightly disallowed its said claim for expenditure to the said extent. We, thus, finding no infirmity in the view taken by the CIT(A) who had rightly sustained the disallowance of sub-contract expenditure uphold the same. The Ground of Appeal No. 4 is dismissed.

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• 2025 (5) TMI 429
  TP Adjustment - upward adjustment made for advertisement, marketing and publicity expenses (AMP) - international transaction or not? - HELD THAT:- As per assessee s own case for the preceding two years we are in agreement that AMP is not an International Transaction and thus, delete the ALP adjustment made. Accordingly, these grounds taken by the assessee in this respect are allowed. ALP adjustment made on account of payment of royalty - Considering the facts of the present case and the applicable law as well as the recent decision in assessee s own case [ 2023 (8) TMI 1061 - ITAT KOLKATA ] for the Assessment Year 2012-13 as extracted above, we are in agreement that we delete the upward adjustment in respect of payment of royalty. Upward adjustment for R D services - HELD THAT:- As decided in assessee s own case [ 2023 (8) TMI 1061 - ITAT KOLKATA ] we find it proper to remit the matter back to the file of Ld. TPO to undertake comparability test based on correct functionality of the comparables by considering the material on record and arrive at the benchmarking in accordance with the provisions of law. Assessee is at liberty to furnish any further details in this respect to justify its benchmarking of ALP of the transaction. Adjustment made towards IT support services, adjustment towards allocation of expenses And Adjustment made for mark-up of recovery and expenses - HELD THAT:- As decided in assessee s own case [ 2023 (8) TMI 1061 - ITAT KOLKATA ] remit this issue also to the file of Ld. TPO to undertake afresh comparability test by capturing the correct functionality as the assessee has described the IT support services which it has provided to its AEs. Assessee is at liberty to furnish any further details in this respect to justify its benchmarking of ALP of the transaction. Disallowance of deduction u/s 80IB and 80IC - HELD THAT:- As decided in own case [ 2020 (6) TMI 474 - ITAT KOLKATA ] held units for which deduction u/s 80-IB and 80-IC were claimed by the assessee, came into existence only in F.Y. 2004-05. Thus, it is clear that the bad debts written off which was claimed as deduction did not pertain to any of the units for which the assessee claimed deduction u/s 80-IB and 80-IC of the Act. Therefore, apportionment of bad debt written off to the eligible units and registering profit of those eligible units for the purpose of allowing deduction u/s 80-IB and 80-IC, as done by the revenue authorities is unsustainable. The apportionment is directed to be deleted. Ground No.3 raised by the assessee is allowed. Non-granting of benefit of Double Tax Avoidance Agreement (DTAA) between India-UK and India- Spain respectively, qua the right of tax towards payment of dividend - HELD THAT:- As in assessee s own case [ 2023 (8) TMI 1061 - ITAT KOLKATA ] has dealt with this identical issue has remanded back to the file of Ld. TPO. Disallowance u/s 14A r.w.r 8D whilst computing the book profits u/s 115JB - HELD THAT:- Tribunal in the case of DCIT vs. Century Plyboards (L) Ltd. [ 2020 (12) TMI 55 - ITAT KOLKATA ] we hold that the disallowance made by the AO u/s 14A read with Rule 8D of the Rules could not be added back whilst computing book profits under section 115JB, since the same does not fall within the purview of explanation section 115JB of the Act.

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• 2025 (5) TMI 428
  Addition u/s 69 - Bogus LTCG - Unexplained share transactions/cash credit - onus to prove - NCL penny stock company as per the information received from the investigation wing and the shares were manipulated by broker to give bogus entries of LTCG/LTCL, therefore assessee was considered to be one of the beneficiaries of the non-genuine LTCG - HELD THAT:- Since the assessee has discharged his initial onus by placing on record all the relevant documentary evidences to prove the transactions in the script in question. As undisputed fact that assessee had purchased the shares through registered broker from stock exchange and entire payment was made through banking channel, consequently shares were received in her Dmat account maintained in Central Depository Services India Ltd. All the contract notes regarding purchase of shares have been placed on record coupled with the fact that assessee had paid all the required taxes i.e STT, stamp duty, SEBI turnover tax and all the payments reflected in the purchase contract notes. Besides the fact that the company is listed in BSE and never delisted at any time. As decided in the case of RNR Trading Pvt Ltd [ 2024 (12) TMI 1567 - ITAT MUMBAI] wherein the same script has been considered and dealt with and ultimately additions were deleted. However the revenue failed to rebut the said documentary evidences and to bring on record any evidence to prove that assessee was actively involved in manipulating the script in question, therefore adhering to the principles of judicial consistency and judicial discipline and also taking into consideration the totality of facts and circumstances as discussed in detail in the above paras, we direct the AO to delete the additions made u/s 68 of the Act. Assessee appeal allowed.

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• 2025 (5) TMI 427
  Disallowance u/s 14A - Expenditure incurred on earning exempt income - CIT(A) deleted addition on the ground that no exempt income was earned by the assessee in respect of the investment made in the shares of subsidiary/group entities of the assessee - HELD THAT:- AO has not disputed the fact that the assessee has not earned any dividend income from the investment in shares of the subsidiaries companies of the assessee as well as in the shares of M/s. Lanco Net Ltd. Though the AO has not given the details of the investment except the total amount of investment shown in the balance sheet, however, this fact has been accepted by the AO that the assessee has not received any dividend income during the year under consideration. CIT (A) deleted the addition by considering the fact that the assessee has not received any dividend income during the year under consideration and therefore, when no exempt income is earned by the assessee during the year, no disallowance can be made u/s 14A. All the investments are in the foreign based subsidiaries and the dividend income, if any, is taxable and not exempt u/s 10(34) of the I.T. Act, 1961. Therefore, the disallowance to the extent of these investments in the foreign subsidiaries cannot be made u/s 14A of the I.T. Act, 1961. Only investment in the Indian company is made by the assessee in the preceding year and not during the year under consideration and therefore, when there is no dividend income for the year under consideration, the provisions of section 14A are not applicable. Hence, as per case of Cheminvest Ltd [ 2015 (9) TMI 238 - DELHI HIGH COURT ] as well as Hero Cycles Ltd [ 2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT ] no disallowance u/s 14A is called for when the assessee has not earned any dividend income during the year under consideration. Accordingly, in view of the facts as discussed above, we do not find any error or illegality in the impugned order of the learned CIT (A) qua on this issue. The same is upheld. Addition on account of belated payment of employees contribution towards PF u/s 36(1)(va) r.w.s. 2(24)(x) - CIT (A) has deleted the said addition as held that if the assessee has made the payment on or before the due date of filing the return of income u/s 139(1), then the same is allowable u/s 43B - HELD THAT:- We note that this issue is now covered by the judgment of the Hon ble Supreme Court in the case of Checkmate Services (P) Ltd [ 2022 (10) TMI 617 - SUPREME COURT ]. Thus, the issue now stands decided against the assessee. Revision u/s 263 - there is a discrepancy in the net profit shown in the P L Account forming part of the Annual Report in comparison to the P L Account schedule to the ITR-6 - HELD THAT:- Once the AO has adopted one of the courses permissible and available to him, and this has resulted in loss to the Revenue to which the learned Pr. CIT may not agree, the said order cannot be treated as an erroneous order prejudice to the interest of the Revenue unless the view taken by the Assessing Officer is unsustainable in law. In setting aside the matter, the learned Pr. CIT must give a finding that the view taken by the Assessing Officer is unsustainable in law and therefore, the order is erroneous. The setting aside the order for doing fresh exercise on the part of the Assessing Officer reveals that the learned Pr. Cit was not sure about the correctness of the claim of the assessee and therefore, the learned Pr. CIT must be not sure about the correctness and erroneousness of the order passed by the Assessing Officer. Once the Assessing Officer has conducted an inquiry and the case of the assessee does not fall in the category of complete lack of inquiry, the learned Pr. CIT while passing the revision impugned order u/s 263 ought to have given a conclusive findings about the taxability of the income in India as well as the loss of revenue for not including the said income as part of the P L declared in the ITR. Hence, the impugned order is not sustainable and liable to be quashed. Assessee appeal allowed.

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• Customs

• 2025 (5) TMI 455
  Classification of imported Quick Lime - to be classified under CTH 2522 1000 or under CTH 2825 9090? - HELD THAT:- Based on the Tariff Headings and the Explanation given in the HSN Notes, it is very clear that Quick Lime is classifiable under CTH 2522 unless the chemical analysis proves that it has purity of 98% calcium oxide. Admittedly, in the present case, the purity is only 92%. Moreover, there is a specific classification of the product Quick Lime under CTH 2522 1000 while the classification prompted by Revenue is 2825 9090 is only a Residuary Entry , and taking into consideration the Interpretative Rules of Classification, specific heading is to be preferred to the residuary entry unless it is established that the product is pure calcium oxide. The decision in the case of CCE, Hyderabad-III vs. Bhadradri Minerals Pvt Limited [ 2015 (10) TMI 1836 - CESTAT BANGALORE] relied upon by the appellant has been brushed aside only on the ground that the product there was 80%, on the same analogy that the calcium oxide with purity less than 98% does not merit classification under CTH 2825. Conclusion - The chemical analysis clearly states that the purity is only 92% and accordingly, the product Quick Lime is rightly classifiable under CTH 2522 1000. Appeal allowed.

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• 2025 (5) TMI 426
  Levy of penalty CFS / Customs Cargo Service Provider (CCSP) - Loss of revenue - on Smuggling - Red Sanders - Recovery of value of the lost goods from the Appellant - the High Court dismissed the appeal, affirming the appellant s liability to indemnify the Commissioner for the loss of goods and upholding the penalties imposed under both Regulation 12(8) and Section 117 - HELD THAT:- It is not inclined to interfere with the impugned judgment passed by the High Court. Hence, the Special Leave Petition is dismissed.

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• 2025 (5) TMI 425
  Grant of scrips under the Merchandise Exports from India Scheme (MEIS) for the period June 2017 to August 2020 at the prescribed rate of 5% of FOB value - delay in filing two specific MEIS applications, allegedly caused by delayed uploading of Bank Realization Certificates - HELD THAT:- The Respondents are directed to forthwith allow 39 applications and issue the MEIS scrips in respect thereof to the Petitioner at the earliest and in any case not later than 7 days from today. The Petitioner is directed to attend the office of Respondent No. 3 on Friday, 02.05.2025 with all the documents pertaining to the said 2 applications referred to in paragraph 5 above and substantiate their claim before Respondent No. 3 - List for compliance on 07th May 2025.

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• 2025 (5) TMI 424
  Classification of the imported Seaweed Extract - to be classified under Customs Tariff Heading (CTH) 1212 29 10 or CTH 3101 00 99? - non-furnishing of documents relied upon in the Show Cause Notice prior to passing the adjudication order - violation of principles of natural justice - HELD THAT:- The very same goods of the Petitioner have been classified under CTH 3101, by the Commissioner of Customs (NS-I), JNCH (vide his order dated 30th April 2019) and the said order has been duly reviewed and accepted by the Review Committee of Chief Commissioners of Customs under the provisions of Section 129D of the Customs Act, 1962 and has not been challenged. Though these orders have been referred to whilst recording the submissions of the Petitioner, there is absolutely no finding and/or reasoning in relation to these orders and why the present Commissioner is taking a different view. The impugned order is completely silent on this aspect. This is yet another reason why the impugned order requires interference. The Testing Authority has in fact answered a query, which is quite telling. One query raised by the Department was whether the goods of the Petitioner were an Organic Fertilizer, and which was answered in the affirmative. This Test Report also finds no mention in the impugned order which is another reason why we are inclined to interfere with the impugned order. Conclusion - The impugned order has been passed without furnishing the documents relied upon in the Show Cause Notice. On this ground alone, it would be justified in setting aside the impugned order. The impugned order cannot be sustained and would have to be set aside - matter remanded back to the Adjudicating Authority for giving a De Novo hearing to the Petitioner [after supplying the documents referred to in the SCN] and thereafter pass a reasoned order - petition allowed by way of remand.

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• 2025 (5) TMI 423
  Recall of order vide which the Anticipatory Bail has been granted to Respondents - reasonable apprehension of arrest or harassment by the Investigating Agency justifying the grant of Anticipatory Bail under Section 438 Cr.P.C. - smuggling of gold - HELD THAT:- The DRI in their reply had stated that summons were repeatedly sent for enquiry under Section 108 Customs Act in connection with smuggling of 57 Kg of gold, but the Respondent failed to join the enquiry till date. This aspect was well considered by the learned ASJ to observe that the Respondents assertions established that it was not a mere fear or belief of apprehension without any basis, but the apprehension arose since they had been summoned only on the basis of statements of the co-accused and they could have been arrested; such an apprehension was real and could not be termed as fear or without any basis. Therefore, the Respondent had reasonable grounds of apprehension of being arrested. Furthermore, from the conduct of the DRI, it cannot be stated that there was no apprehension of harassment at their end. The learned ASJ in a well reasoned Order had considered all the contentions of the DRI before granting the Anticipatory Bail - Merely because the DRI stated that they had no intention to arrest the Respondents, was not sufficient to allay their apprehension of arrest since they were being served with Notices for joining the inquiry. Conclusion - The grant of Anticipatory Bail in the present case was rightly made by the learned ASJ after considering all relevant facts, including the Respondents status, lack of direct evidence against them, and the conduct of the Investigating Agency. There is no merit in the present Application for cancellation/recall of Anticipatory Bail, which is hereby dismissed.

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• 2025 (5) TMI 422
  Entitlement to benefit of MEIS in respect of shipping bills which were issued against the goods exported by the petitioner to Egypt, Algeria, Libya and Romania between July 2015 to August 2016 - delay on part of the foreign importers to release foreign exchange remittances in respect of the shipping bills - HELD THAT:- In the very nature of things, policy relaxation cannot be claimed by the petitioner as a matter of substantive right. The same lies within the realm of the discretion of the concerned authorities to be exercised in exceptional circumstances. It is for the PRC to consider whether the cited circumstances are such as to warrant grant of relaxation. In the present case, the PRC has noticed that in respect of 6 out of the 8 shipping bills, the payment was realized by the petitioner within 3 years from the export date and it was possible for the petitioner to avail the benefits under the MEIS Scheme with applicable late cut , however, the petitioner, for reasons best known to it, did not take the requisite steps - Consequently, in due course, the said shipping bills became ineligible for benefits under the MEIS in terms of the Policy provisions. In the present case, the Committee found that the payment was received much beyond the period stipulated under the Policy. As such, the PRC, after due consideration of the matter, rejected the application of the petitioner, thereby, denying the benefits under the MEIS to the petitioner - The view taken by the PRC neither suffers from any apparent jurisdictional error nor is afflicted on account of perversity / non-consideration of relevant aspects. This Court finds no justification in seeking to exercise jurisdiction under Article 226 of the Constitution of India to displace / upset a considered view taken by the PRC. Conclusion - Payments for most shipping bills were realized within the permissible three-year period, and the petitioner failed to claim MEIS benefits within that period despite the availability of late cut fees. Payments for the remaining shipping bills were realized beyond the stipulated period, falling outside the scope of usual relaxation.The PRC s decision rejecting the petitioner s claim was neither arbitrary nor unreasonable and did not warrant judicial interference. This Court finds no merit in the present petition; the same is, accordingly, dismissed.

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• 2025 (5) TMI 421
  Refund of interest paid on import duty due to technical glitches in the Electronic Cash Ledger (ECL) system during the phased implementation starting 01.04.2023 - rejection on the ground that such refund is not admissible, in light of the Customs (Waiver of Interest) Third Order, 2023, Order No. 03/2023-Customs (NT) dated 17.04.2023 (Customs Order) read with Section 27 of the Customs Act, 1962. Bone of contention is that while the phased implementation of ECL in Customs was being initiated from 01.04.2023, there arose certain technical glitches in the functioning of ECL facility at the Common Portal, and thus, the delay in payment has attracted interest which the petitioner seeks refund of. HELD THAT:- The circular dated 17.04.2023 had of course provided for the refund of interest until the date of system inability removal, and for an additional three days thereafter, as stipulated in Annexure-7. This circular specifically addressed the waiver of interest payable under Section 47 (2) of the Act of 1962 for the period from 01.04.2023 upto and including 13.04.2023 in respect of such goods where the payment of import duty was to be made from the amount available in ECL. This Court finds that the advisory issued by the D.G. Systems which is the backbone of the determination of the date of the technical glitches which would be there in the implementation of the ECL facility, which require the D.G. Systems to pronounce and certify the same - the advisory thus, clearly envisages that for ICEGATE registered users, the date of removal of the system inability, in context to the third order dated 17.04.2023 would be the date of issue of advisory which is 27.07.2023. Thus, practically, the D.G. Systems has acknowledged that the technical glitches were existing till 27.07.2023. This Court finds that the order dated 17.04.2023 acknowledged the technical difficulties to have been resolved only to a large extent, but not entirely. The order dated 17.04.2023 itself stipulates the requirement of waiver of the interest as per the certification given by the D.G. Systems regarding the duty and interest from the date of removal of such system inability at the Common Portal. Since, the date of removal of system inability at the common portal has been certified by the D.G. Systems vide advisory dated 27.07.2023 to be 27.07.2023 itself, therefore, the respondents cannot claim interest and will have to refund any interest which has been taken by them for the transaction in question, particularly, when the petitioner made the necessary payments in pursuance of the bill of entry having been returned, though the payment itself may have a third party failure, which cannot be attributed to the present petitioner. The certification by the D.G. Systems of the technical difficulties in existence making the system having inability at the Common Portal upto 27.07.2023 clinches the issue of refund in accordance with Section 27 of the Act of 1962 read with the Circular dated 17.04.2023. Conclusion - This Court is firmly of the opinion that the impugned order dated 21.11.2023 suffers from inconsistency with conjoint reading of Section 47 and Section Act of 1962, order dated 17.04.2023, the advisory issued on 27.07.2023 and the effort of the petitioner to make the necessary payments to the Banks successfully on 20.04.2023 vide Annexure-8. Petition allowed.

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• 2025 (5) TMI 420
  Absolute confiscation - levy of penalty and quantum thereof - black pepper of foreign origin - violation of Section 46 of the Customs Act, 1962 through routes that were not notified under Section 7(c) of the Customs Act - HELD THAT:- The alleged intermediary Ashish planted by the appellant could never be traced, nor his whereabouts ascertained. Even the appellant who had allegedly placed order for supply of 20-22 MTs black pepper on said Ashish could not intimate his whereabouts including phone number. It is thus likely that there may be no existing person of the said description and it is only stated as a fa ade to protect the appellant. Even the investigating agencies could not lay its hand on said Ashish, nor Pravin Kasera for whom said Ashish was meant to supply the goods led the authorities to any of his details. The fact of having placed order for procurement of 20-22 tons by a fictitious person is clever ploy by the appellant to extricate himself of consequential liabilities. The appellant could not produce even a single piece of evidence to support his contention that they had placed order on the said person named Ashish, who in turn had allegedly informed the appellant, about the seizure. With no formal orders or no payments having been made and with no details about Ashish, the version of the appellant is difficult to be believed. That being so, if Ashish was a real person upon whom the appellant had placed order for supply of said black pepper it belies logic as to why the appellant was/is not familiar with the whereabouts of the person who promised to deliver such large quantity of the said goods. From the facts of the case, it is evidently established that the appellant was well aware as to where the black pepper is being procured from and how it was required to be transported to prevent detention. It is not tenable that the import of such huge quantity of black pepper worth crores of rupees would be made by an unknown seller without receiving any payment from the purchaser. No prudent businessmen would deal and carry out such activities to/from unknown buyers and risk huge quantity of goods. Conclusion - There are no reason justifying non-imposition of penalty on the appellant. Mens rea on part of the appellant and his intent for smuggling of large quantities of black pepper evading duty payment is established. The onus to support his version about Ashish by furnishing his details was on the appellant, which has not been discharged. There is no payment proof of licit acquisition of the said goods. The confiscation of goods calls for no interference. There being no real owner/claimant of seized goods, the absolute confiscation of smuggled black pepper is in order. The appellant by his contumacious conduct has indeed rendered himself liable for imposition of penalty. A penalty of Rs. 1,00,000/- on the appellant would meet the ends of justice. The Order of the lower authority, is thus upheld and modified only to the aforesaid extent, qua the appellant - Appeal allowed in part.

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• 2025 (5) TMI 419
  Quantum of penalty u/s 114A and 114AA of the Customs Act, 1962 - mis-declaration, misclassification and undervaluation of the imported goods - HELD THAT:- From perusal of Section 112(a)(v), 114A and 114AA of the Customs Act, 1962, it is clear that they are distinct and meant for imposition of penalty on the basis of facts obtaining in each case. In fact, prima facie it appears that the fifth proviso to Section 114A bars levy of penalty under Section 112 or Section 114, if a penalty were to be imposed under Section 114A. Therefore, the act of the Adjudicating Authority in imposing a combined penalty very clearly reflects a non-application of mind. The matter remanded back to the Adjudicating Authority for the limited purpose of a decision afresh on the applicability and quantum of the penalties that are to be imposed under the aforesaid provisions, duly bearing in mind the relevant binding judicial precedents. Needless to say, the Adjudicating Authority should adhere to the principles of natural justice. Appeal allowed by way of remand.

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• 2025 (5) TMI 418
  Levy of penalty u/s 114 (i) of the Customs Act, 1962 - alleged involvement in the attempted export of prohibited goods, namely peacock feathers of Indian origin - role of appellant in securing the consignment or shipment or preparation of export documents misrepresenting the nature of goods as carpets instead of peacock feathers - HELD THAT:- The impugned order dated 13.05.2012 has been passed without taking into consideration the facts of the case, the role of the appellant in the alleged attempt of Shri Gambhir to export the prohibited items i.e. Peacock Feathers from India. The Hon ble Punjab Haryana High Court in the case of Jindal Drugs (Infra) [ 2016 (6) TMI 956 - PUNJAB HARYANA HIGH COURT] wherein the Hon ble High Court laid down a detailed procedure, inter alia, providing for cross-examination of the witness of the Revenue by the Adjudicating Authority and thereafter, if the Adjudicating Authority is satisfied that the statement of the witness is admissible in evidence than the Adjudicating Authority is obligated to offer such witnesses for cross-examination by the other side/assessee. Such view has also been affirmed by the Hon ble Supreme Court in the case of Andaman Timber (Infra) [ 2015 (10) TMI 442 - SUPREME COURT] . The learned Commissioner has wrongly relied upon the statement of the co-accused and the appellant recorded under Section 108 of the Customs Act, 1962 and has wrongly come to the conclusion that appellant by act of omission and commission rendered the ceased goods liable for confiscation under relevant provisions of Customs Act and rendered himself liable to penalty under Section 114(i) of Customs Act, 1962. In adjudication, the adjudicating authority is required to first examine the witness in chief and also to form an opinion that having regard to the facts and circumstances of the case, the statements of the witness are admissible in evidence. Thereafter, the witness is offered to be cross-examined then only the statement of the witness can be relied upon for fastening the liability upon him for omission and commission. The impugned order passed by learned Commissioner imposing penalty of Rs. 3,00,000/- on the appellant Samir Ahmed Mansuri, under Section 114(i) of the Customs Act, 1962 is not sustainable and is liable to be set-aside - appeal allowed. Conclusion - The adjudicating authority erred in relying solely on the appellant s statement under Section 108 and on statements of co-accused that did not implicate the appellant directly. The appellant s presence at the premises with the principal accused was insufficient to establish active involvement or conspiracy. Penalty cannot be imposed on appellant. Appeal allowed.

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• 2025 (5) TMI 417
  Enhancement of Basic Customs Duty (BCD) rate of 30% on crude palm oil, notified on 17.11.2017, but published in the Official Gazette on 20.11.2017 - Bills of Entry were filed on 16.11.2017 and entry inward granted on 18.11.2017 and 19.11.2017 - relevant date for determining the applicable customs duty rate under Section 15 of the Customs Act, 1962 - HELD THAT:- As the admitted fact is that the said Notification had been published in the Official Gazette on 20.11.2017, therefore, even if the dates of entry inwards are taken to decide the rate of duty applicable, the same are 18.11.2017 and 19.11.2017, which is prior to the publication of the said Notification in the Official Gazette. Considering the fact that the Notification No. 87/2017-Cus. dated 17.11.2017 was published in the Official Gazette on 20.11.2017 whereas the dates of entry inwards are prior to 20.11.2017, it is held that the enhanced rate of duty in terms of Notification No. 87/2017-Cus. dated 17.11.2017 is not applicable to the facts of this case. In these circumstances, it is held that differential duty / enhanced duty cannot be demanded from the appellant. The appellant are liable to pay Basic Customs Duty on Crude Palm Oil at the rate of 15%. Conclusion - The enhanced rate of duty in terms of Notification No. 87/2017-Cus. dated 17.11.2017 is not applicable as it was published in the Official Gazette on 20.11.2017, which is after the dates of entry inward. The appellant is entitled to refund of the excess customs duty paid along with interest. Appeal allowed.

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• 2025 (5) TMI 416
  Benefit of N/N. 25/1999-CUS dated 28.02.1999 (Sl. No. 62) and N/N. 24/2005-CUS dated 01.03.2005 (Sl. No. 39) - aluminium based Copper Clad laminates which was imported and used after following the procedure prescribed in the Customs (Import of Goods at concessional rate of duty for manufacture of excisable goods) Rules, 2017 [2017 Rules] to manufacture aluminium clad printed circuits boards . Are Metal core printed circuit boards (MCPCBs) also printed circuit boards (PCBs) or are they different from them? - HELD THAT:- Metal core printed circuit board performs the same function as the printed circuit board and is manufactured using the same method but has an additional functionality of dissipating heat quickly which is required in certain applications. Merely because a good has some additional functionality, it does not cease to be the good. A car, for instance, will NOT cease to be a car simply because it has power steering or power break or auto-transmission, advanced navigation or entertainment systems. The car does not cease to be the car because of these additional features and functions. Was the benefit of the exemption Notification No. 25/1999-Cus (S.No. 122) before it s amendment on 2.2.2022 available to the aluminium based copper clad laminates which were imported? - HELD THAT:- Since the goods in question are composite materials, applying the General Rules of Interpretation, they could fall under any of the Chapters depending upon the composition and essential character of the goods. Chapter 39 covers goods of plastic, Chapter 74 covers goods of copper, Chapter 75 covers goods of nickel, and Chapter 76 covers goods of aluminium. The goods covered by S.No. 122 of the notification can fall under any of these Chapters. Therefore, it cannot be said that goods which also have aluminium core are not covered by the notification when clearly goods which are classifiable under Chapter 76 are also covered by the notification. For instance, if there is metal core laminate with large amount of aluminium by weight and if it is classified accordingly as an article of aluminium, the goods are still entitled to exemption under S.No. 122. The functions of assessment and re-assessment under Section 17 and the recovery of duty under Section 28 are distinct. Therefore, the exercise of functions under Section 17 can only act as a jurisdictional fact for the purpose of excluding the jurisdiction of other proper officers empowered under that section for the exercise of the rest of the functions specified therein. Similarly, the exercise of the function of issuing show cause notices under Section 28 by a particular proper officer serves as a jurisdictional fact which would exclude the jurisdiction of other proper officers empowered under Section 28. In the case of Vintek, when in respect of 29 of the 80 Bills of Entry were already decided by the jurisdictional Commissioner in favour of the importer by order dated 13.10.2023 and further when such decision was not even assailed by the Revenue, could the Commissioner of Customs (Preventive) pass a contrary order confirming the demand in respect of 80 Bills of Entry, including the 29 in respect of which an order was already passed? - HELD THAT:- Clearly, the demand in respect of the 29 Bills of Entry is hit by lack of jurisdiction of the Principal Commissioner of Customs (Preventive) to issue the SCN dated 30.6.2022. Once the Additional Commissioner (Preventive) and Deputy Commissioner exercised their powers under section 28 in respect of these Bills of Entry, it automatically precluded every other proper officer, including the Principal Commissioner of Customs (Preventive) from also exercising his jurisdiction under section 28 in respect of the same Bills of Entry. This legal position is evident from Cannon India [ 2024 (11) TMI 391 - SUPREME COURT (LB)] . The order of the Commissioner of Customs (Preventive) dated 30.6.2022 cannot also be sustained in respect of the remaining 51 Bills of Entry because the issue involved in all the 80 Bills of Entry is identical. Once the order dated 26.9.2022 passed by the Commissioner of Customs (Import), Tughlakabad decided the issue and it was not appealed against and thereby attained finality, the Commissioner of Customs (Preventive) could not have taken a contrary view on the same issue. It would have been a different case if the issue was still disputed and SCNs were issued for subsequent Bills of Entry. Conclusion - i) MCPCBs are PCBs for the purpose of exemption notifications. ii) Aluminium based copper clad laminates were covered by the exemption under Notification No. 25/1999-CUS (S.No. 122) even before the 2022 amendment. iii) The Principal Commissioner of Customs (Preventive) lacked jurisdiction to issue show cause notices and pass orders in respect of the 29 Bills of Entry already adjudicated by the jurisdictional Commissioner, and could not take a contrary view on the remaining 51 Bills of Entry. The impugned order is set aside - appeal allowed.

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• 2025 (5) TMI 415
  Levy of penalty on the appellant under Section 114 of the Customs Act, 1962 - prohibited goods were being attempted to be exported by mis-declaring them as unaccompanied baggage through Malaysian Airlines - HELD THAT:- Having considered the submissions made by both sides and the role of the Nishant Kumar Singh as recorded in the impugned order, we find that there is nothing in the impugned order to show that Shri Nishant Kumar Singh had any role in the attempted smuggling of red sanders other than the fact that he was a friend of Shri Krishna Chandra Jha. In view of the above, it is found that Shri Nishant Kumar Singh, the appellant, had no role in the attempted smuggling of red sanders. The penalty imposed on him, therefore, cannot be sustained. The impugned order is set aside insofar as it pertains to imposition of penalty of Rs. 5 lakhs on the appellant - Appeal allowed.

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• 2025 (5) TMI 414
  Invocation of extended period of limitation contemplated under the proviso to section 28(1) of the Customs Act, 1962 - jurisdiction to issue SCN - denial of benefit under Sr. No 363A *List 37 Sr. No 22) of N/N. 21/2002-Cus dated 1.3.2002 - competence to issue SCN - HELD THAT:- Annexure-A to the show cause notice gives details of the 13 Bills of Entry that had been filed by the respondent. The dates are from 23.09.2025 to 09.02.2010. The show cause notice mentions that the extended period of limitation contemplated under the proviso to section 28(1) of the Customs Act was being invoked in respect of all the 13 Bills of Entry - It is not in dispute, as has also been noticed by the Commissioner (Appeals), that the appellant had declared all the particulars of goods in the Bills of Entry. He had also submitted the import documents and it is after examination, that the goods were cleared. It has, therefore, to be examined whether in such a situation, the extended period of limitation could be invoked. The appellant had claimed the benefit of an exemption notification believing that it was entitled to exemption. If this belief of the appellant was found to be incorrect, it was for the officers at the time of processing the Bills of Entry to have raised a query and taken a decision. But in the present case, the Bills of Entry were assessed and out of charge was given after the goods were examined. The Commissioner (Appeals) has relied upon the decision of the Supreme Court in Northern Plastic Ltd. vs. Collector of Customs Central Excise [ 1998 (7) TMI 91 - SUPREME COURT] wherein the Supreme Court also observed that whether the appellant was entitled to the benefit of exemption under a notification or not was a matter of belief of the appellant. The other finding recorded by the Commissioner (Appeals) that the Directorate of Revenue Intelligence did not have the competence to issue this show cause notice is not sustainable in view of the recent decision of the Supreme Court in Canon India [ 2024 (11) TMI 391 - SUPREME COURT (LB)] . Conclusion - The finding recorded by the Commissioner (Appeals) that the extended period of limitation under the proviso to section 28(1) of the Customs Act could not have been invoked does not suffer from any illegality. Appeal dismissed.

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• 2025 (5) TMI 413
  Abatement of appeal - Misclassification and undervaluation of the imported goods with a deliberate intention to evade payment of appropriate customs duty - HELD THAT:- It is apparent that the appellant is not interested in pursuing the appeal. Accordingly, we dismiss the same for non-prosecution under Rule 20 of Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982. However, the appellant is at liberty to file for restoration of appeal showing justifiable reasons for such restoration. The appeal is dismissed under Rule 20 of CESTAT (Procedure) Rules, 1982 for default.

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• Securities / SEBI

• 2025 (5) TMI 412
  Limitation / restriction upon SEBI for the purpose of termination of services of an Administrator appointed by it - Validity of communication withdrawing the petitioner s appointment as Administrator HELD THAT:- In the present case, the petitioner, having acted as the Administrator for more than three years pursuant to his appointment on 31.05.2019, was duly relieved of his responsibilities vide the communication dated 09.03.2022. A perusal of the communication dated 09.03.2022, reveals that the same does not cast any stigma on the petitioner; rather the said communication acknowledges the efforts made by the petitioner during his term as an Administrator. Inherently, the petitioner s appointment as Administrator is not indefinite and can be terminated by the SEBI. As such, the prayer sought by the petitioner that the letter dated 09.03.2022 be declared as null and void and that the petitioner be restored as Administrator, is untenable. There is no limitation / restriction upon SEBI for the purpose of termination of services of an Administrator appointed by it. It is the common case of the respective counsel for the parties that the petitioner s remuneration is governed by a circular dated 02.04.2019 issued by the Deputy General Manager, Recovery Division-1, Recovery and Refund Department, SEBI (respondent no. 2) which prescribes a graded payment mechanism depending upon the amount realized by the Administrator by way of sale of assets of the company in question (M/s. En Aromatic Petro Chemicals Pvt. Ltd.). The respondent is directed to consider the representation of the petitioner regarding payment of his remuneration; the same may be duly determined in terms of the stipulation contained in the appointment letter dated 31.05.2019, read with the aforesaid circular dated 02.04.2019. Let a reasoned order be passed by the respondent, setting out the monetary entitlement of the petitioner, and the time frame for payment of the same. Let the said order be passed within a period of eight weeks from today. In case any document/s is required from the petitioner for the purpose of assessing his remuneration, the same shall be duly provided by the petitioner.

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• 2025 (5) TMI 411
  Existence of reasons and the belief to warrant an investigation u/s 11-C of SEBI Act - HELD THAT:- The existence of reasonable grounds is sine qua non for directing an investigation under Section 11-C of the Act. Thus, where a review of the material on record indicates that the competent appointing authority has merely reiterated the allegations made in a subsequently withdrawn complaint, and further contains no reference to notices and replies of the petitioner entity to the same, or the compelling circumstances warranting an investigation suo motu into the subsequently withdrawn allegations levelled by the shareholders, the respondent No. 1 cannot be said to have passed an order directing investigation u/s 11-C, upon due application of mind. The said assessment is further bolstered upon perusal of the material on record where the internal notings of the respondent-SEBI, which ordinarily ought to contain the reasons and belief necessitating an investigation u/S 11-C of the Act, 1992, remain unapproved by the competent authority i.e. the Executive Director. It is a well-settled law that all state action must be reasonable and free from arbitrariness. Thus, where it appears from the perusal of the material on record that respondent No. 1/ Executive Director, SEBI did not possess any relevant reasons to believe, the passing of an order directing investigation under Section 11-C of the Act read with Regulation 5 of the SEBI (PFUTP) Regulations, 2003, cannot be sustainable.

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• Insolvency & Bankruptcy

• 2025 (5) TMI 410
  Condonation of delay in filing the appeal - NCLAT condoned the 15-day delay in filing the appeal, holding that the appeal was filed within the permissible condonable period after excluding the date of pronouncement and the time taken to obtain the certified copy - HELD THAT:- No case is made out to entertain the appeal. Appeal dismissed.

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• 2025 (5) TMI 409
  Submission of a Resolution Plan after the recall of the earlier approved Resolution Plan due to forged Bank Guarantee by the Successful Resolution Applicant (SRA) - Grant of 30 days time for submission of Resolution Plan as per provisions of Regulation 36B(5) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- The present is a case where process of issuance of Form-G had commenced on 04.10.2022, under which all Prospective Resolution Applicants were allowed time as per Regulation 36B. The process, which commenced after the order dated 19.12.2024 was not direction for start of a fresh process by issuance of fresh Form-G, rather Adjudicating Authority has remitted the matter to CoC and it was left to the commercial wisdom of the CoC to take steps. The Adjudicating Authority further held that if steps are not completed within 60 days, the CD would be deemed to be liquidated. The CoC in its 7th Meeting held on 13.01.2025, resolved to invite PRAs, who had submitted the Resolution Plans in the previous round. The CD was also not eligible to submit the Resolution Plan, in view of the order dated 19.12.2024 and CoC decided to seek Resolution Plan from three Resolution Applicants, who had submitted the Resolution Plans in the previous round. The present is a case where the Appellant has not submitted the Resolution Plan within the time allowed by the CoC. In view of the order dated 19.12.2024, the process, which was carried on by the CoC, was not the process for issuance of fresh Form-G and inviting Expression of Interest and Resolution Plans, and the decision was taken to invite Resolution Plans from existing PRAs only. The provisions of Regulation 36B, sub-regulation (3) are not attracted, nor the CoC was obliged to grant 30 days time to Resolution Applicants to submit the Resolution Plan - The timeline was to be fixed by the CoC and the CoC having extended the time for submitting the Plan to 03.02.2025, which was extended both for Appellant as well as other PRAs, there are no error in the order of Adjudicating Authority rejecting the Application filed by the Appellant, praying for extension of timeline for submission of the Plan by the Appellant. Conclusion - i) The Appellant was eligible to submit a Resolution Plan after rectification of the order dated 19.12.2024. ii) The Appellant was not entitled to a fresh 30-day period under Regulation 36B(3) for submission of the Resolution Plan. iii) The CoC s timeline of 03.02.2025 for submission of the Resolution Plan was valid and binding. iv) The Adjudicating Authority did not err in rejecting the Application for extension of time filed by the Appellant. Appeal dismissed.

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• Service Tax

• 2025 (5) TMI 408
  Condonation of delay - failure to remove office objections within stipulated time - delay of 619 days in filing the Notice of Motion - Revenue has put the blame on advocate representing the Department for such delay - it was held by High Court that No case is made out for condonation of delay and for restoration of the appeal - HELD THAT:- There are no good reason to interfere with the impugned order passed by the High Court of Judicature at Bombay. SLP dismissed.

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• 2025 (5) TMI 407
  Includability of expenditure incurred towards air travel of the service provider, who provided Management Consultancy Service to the Appellant and other companies - invocation of extended period of limitation - HELD THAT:- It can be seen from Rule 7 of Service Tax (Determination of Value) Rules, 2006 that for the purpose of discharge of Service Tax for the service provided from outside India, the value is equal to the actual consideration charged for the services provided or to be provided. Theres is no dispute in this appeal that the Appellant has discharged appropriate service tax for the consideration paid to Prof. Y. Washio, Japan for his Management Consultancy Service rendered. Even if the air travel expenditure is borne by the service provider and being reimbursable expenditure, the value of which is not includible for computation of the service tax paid. Extended period of limitation - HELD THAT:- Even if the air travel expenditure is treated as consideration for receipt of Management Consultancy Service, then whatever the tax payable or paid is eligible for the Appellant to take as CENVAT credit. As the issue is revenue neutral, there is no justification for invoking the extended period. The impugned order cannot sustain - appeal allowed.

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• 2025 (5) TMI 406
  Levy of service tax - Business Auxiliary Services - activities of cleaning and grading of agricultural produce carried out by the appellants - Cargo Handling Agency services - handling and transportation services related to agricultural produce provided by the appellants - cleaning, grading, handling, and transportation service - legal consultancy fees under reverse charge mechanism - extended period of limitation. Activity of cleaning and grading carried out by the appellants - HELD THAT:- It is an admitted fact that the department, based on intelligence sought information from the appellants regarding the nature of their activities. Based on the said information, the Department formed an opinion that the appellants were renting godowns/warehouse for commercial purposes and furtherance of business. In addition , the appellants were also providing handling and transportation services, cleaning and grading services to their clients. The Department also noted that the appellants were making payment for receiving legal services. In the instant case, the appellants were providing cleaning and grading services for few of the agricultural products which were warehoused by them for their clients which did not change the essential characteristics of the agricultural product stored /warehoused by the appellant. Consequently, the activity has to be considered to be in relation to the agriculture and is exempted from payment of service tax for the period upto 30.06.2012. In this context, support drawn from Hon ble Supreme Court s judgment in M.L. Agro Products Ltd. [ 2018 (7) TMI 1581 - SC ORDER] , wherein the Apex Court held that threshing and redrying of tobacco leaves, being an activity in relation to agriculture is covered under entry production of goods on behalf of client in relation to agriculture which is entitled for exemption under Notification No. 14/2004-S.T. - As regards the period from 01.07.2012 the negative list under section 66D clause (v) of the Act exempts the entire gamut of services related to agricultural produce - the activity of cleaning and grading carried out by the appellants stood exempted for both pre and post negative period. Handling and transportation charges - denial of benefit of the N/N. 10/2002 dated 1.08.2002 - HELD THAT:- A close reading of the said notification reveals that it exempts the taxable service provided to any person, by a Cargo Handling agency in relation to agricultural produce or goods intended to be stored in cold storage, from whole of the service tax leviable thereupon. Cargo Handling Service is defined in Circular No. B11/1/2002-TRU, dated 01-08-2002 as services of transporting coupled with loading, unloading, packing, unpacking if those are done by the authorities as that of Container Corporation of India, Airport Authority of India, Inland Container Depot, Container Freight Stations etc. Clearly, the appellant herein are not covered by the aforesaid definition - it is noted the departmental Circular no. B11/1/2002 -TRU dated 1.08.2002 which clarifies that the cargo handling services provided in relation to storage of agricultural produced are covered under storage and warehousing services and have been exempted from the levy of service tax - the handling and transport of agricultural produce was not taxable even prior 1.07.2012. This activity is also stood exempted from levy of service tax for the period 01.07.2012. Service tax on legal fees paid during the years 2012-13 to 2015-16 - HELD THAT:- As per Notification No.30/2012-ST dated 20.06.2012 legal service provided by any person as represented to any business entity the service tax is liable to be paid by the Recipient of the Service. The appellants being a business entity were liable to pay service tax on such legal consultancy charges on reverse charge basis. In view of the above, the demand on such legal fees upheld. Extended period of limitation - HELD THAT:- The extended period cannot be sustained as the department has not been able to establish any intent to evade by the appellant. Conclusion - i) Demand of service tax on cleaning and grading services is set aside. ii) Demand of service tax on handling and transportation services is set aside. iii) Demand of service tax on legal consultancy fees is upheld for the normal period. iv) Extended period demand and penalties are set aside. The appeals are allowed.

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• 2025 (5) TMI 405
  Taxability - Construction of Residential Complex Services - construction activity undertaken by the appellants, involving individual houses termed as villas within a gated community - Real Estate Agent Services - collection of land development charges. Taxability - Construction of Residential Complex Services - construction activity undertaken by the appellants, involving individual houses termed as villas within a gated community - HELD THAT:- To come within the ambit of the definition of residential complex as defined in Section 65(91a), the complex should comprise of a building having more than twelve residential units, or the complex should comprise of buildings having more than twelve residential units. Such building or buildings having more than twelve residential units should have a common area and any one or more of the facilities stipulated therein. That the building or buildings should have more than twelve residential units, should have a common area and should have any one or more of the facilities stipulated therein are cumulative requirements. The definition also states what is excluded. From the appeal records, it is also evident from the photographs produced that these are individual houses that were constructed by both the appellants and not building or buildings having more than twelve residential units. Therefore, by virtue of these individual houses not being a building or buildings having more than twelve residential units, they do not satisfy clause (i) of Section 65 (91a) and are therefore straightaway ousted from the ambit of the definition - the appellants cannot be considered to have rendered a taxable service in relation to construction of complex as stipulated in Section 65(105) (zzzh), thereby rendering the demand made on this count in the impugned OIOs wholly unsustainable. Real Estate Agent Services - collection of land development charges - HELD THAT:- Development, construction, implementation, supervision, maintenance, marketing, acquisition or management, of real estate. It is found that in the impugned OIO, the adjudicating authority has merely cited terms of a power of attorney given by a customer to the appellant to hold that the appellant has rendered all the services as stated in the power of attorney and that they are undertaken in relation to sale of land - the SCN does not rely on any invoices specifying the nature of services that the appellant has rendered as evidence for such real estate agent services that the appellant is alleged to have rendered and only alleges that during the financial year 2010-11, the appellant has collected land development charges from their customers. Further, the annexure to the SCN indicates that the land development charges is the difference between guidance value and actual sale value and if that be so, it only indicates amounts collected towards sale of immovable property, and thus outside the ambit of levy of service tax - the demand made on the appellant in the impugned OIO on the allegation of having rendered real estate agent services , cannot sustain. Conclusion - i) The appellants cannot be considered to have rendered a taxable service in relation to construction of complex as stipulated in Section 65(105)(zzzh), thereby rendering the demand made on this count in the impugned OIOs wholly unsustainable. ii) The demand made on the appellant in the impugned OIO on the allegation of having rendered real estate agent services , cannot sustain. The impugned order set aside - appeal allowed.

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• 2025 (5) TMI 404
  Levy of service tax - Business Auxiliary Service - incentive received from the airline companies - HELD THAT:- The issue whether the incentive received from the airline companies under the category of Business Auxiliary Service is chargeable to service tax has been settled in favour of the assessee by the decision of the Tribunal in the case of DHL Logistics Private Limited vs. Commissioner of Central Excise, Mumbai-II [ 2017 (8) TMI 600 - CESTAT MUMBAI] where it was held that In the instant case the appellant are directly buying themselves and thereafter selling the same to the exporters. In this activity they are receiving incentive and commission based on the total space purchased by them from the airline. This activities can by no stretch of imagination be considered as BAS as for any service to statute the BAS atleast three parties should be involved in the transaction namely the service provider, service recipient and the client. In the instant case there are only two parties in the transaction, the seller of space and the buyer of space. Any commission/incentive received, as a result of this transaction of sale cannot be considered as supply of BAS. In view of above, the demand under the head of BAS for the Revenue generated as airline/airline incentive is set aside. Reliance also placed on record the decision in the case of Wig Air Freight Private Limited vs. Commissioner of Central Goods and Service Tax, New Delhi [ 2024 (3) TMI 596 - CESTAT NEW DELHI] , where the issue under consideration was regarding imposition of service tax on incentives under the category of Business Auxiliary Service . Conclusion - For any service to statute the BAS at least three parties should be involved in the transaction namely the service provider, service recipient and the client. In the instant case there are only two parties in the transaction, the seller of space and the buyer of space. Any commission/incentive received, as a result of this transaction of sale cannot be considered as supply of BAS. The impugned order is set aside - appeal allowed.

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• Central Excise

• 2025 (5) TMI 454
  100% EOU - benefit of exemption from BCD under N/N.25/1999-Cus. dated 28.02.1999 NN/N.24/2005-Cus. dated 01.03.2005 - exemption from CVD under N/N. 6/2006-CE (List 5) - exemption from SAD under N/N.12/2012-CE (List-8) dated 17.03.2012 - extended period of limitation. HELD THAT:- Admittedly, appellants are not entitled to the benefit of Notification No.52/2003-Cus. dated 31.03.2003 and Notification No.22/2003-CE dated 31.03.2003 on parts which were used in the manufacture of SPV module cleared to DTA. However, appellant had claimed exemption on the said parts from BCD under alternative exemption Notifications No.25/1999-Cus. dated 28.02.1999 and Notification No.24/2005-Cus. dated 01.03.2005; also they claimed benefit of exemption under Notification No.6/2006-CE dated 01.03.2006 and Notification No.12/2012-CE dated 17.03.2012 from additional duty of customs (CVD) and SAD. On the admissibility of benefit of N/N.06/2006-CE dated 01.03.2006 and N/N.12/2012-CE dated 17.03.2012, this Tribunal in the case of HHV Solar Technologies [ 2024 (10) TMI 46 - CESTAT BANGALORE] observed the claim of the appellant that benefit of Notification No.6/2006-CE dated 01.03.2006 and No.12/2012-CE dated 17.03.2012 to the parts procured and used in the non-conventional devices or systems specified in List 5/List 8 of the respective Notifications, as the case may be, cannot be allowed and the Commissioner has rightly denied the benefit of the said exemption Notifications. Thus, the appellants are not eligible to the benefit of exemption from Additional Customs Duty [CVD] under Notification No.6/2006-CE dated 01.03.2206 and Notification No.12/2012-CE dated 17.03.2012. Consequently, the Appellants are also not eligible to exemption from SAD. Admissibility of N/N.25/1999-Cus. dated 28.02.1999 and N/N.24/2005-Cus. dated 01.03.2005 - HELD THAT:- This Tribunal in similar circumstances in HHV Solar Technologies Pvt. Ltd. [ 2024 (10) TMI 46 - CESTAT BANGALORE] after recording that the appellant could claim the said Notification as an alternative argument even if they had not claimed earlier, remanded the matter to the adjudicating authority to examine the admissibility of the benefit of the said Notifications. The adjudicating authority examined threadbare various conditions of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 and the procedure followed by a 100% EOU in receiving raw materials, its utilization and clearances of the manufactured goods, etc., and finally arrived at the conclusion that there is substantial compliance with the conditions contained under the said Rules by an 100% EOU, hence, eligible to the benefit of the said Notification - there are no discrepancy in the reasoning recorded by the learned Commissioner in extending the benefit of Notification No.25/1999-Cus. dated 28.02.1999 and Notification No.24/2005-Cus. dated 01.03.2005. The said order of the Adjudicating Authority has been accepted by the Department. Thus, applying the said reasoning and conclusion to the present case and also for the sake of uniformity in assessment, the benefit of the said Notifications cannot be denied to the Appellant. Extended period of limitation - HELD THAT:- The appellant is a 100% EOU and the receipt and disposal of the raw material had been duly recorded in the statutory records prescribed and the present issue relates to admissibility of alternate exemption Notification No.25/1999-Cus. dated 28.02.1999 and Notification No.24/2005-Cus. dated 01.03.2005, and also benefit of Notification No.6/2006-CE dated 01.03.2006 and Notification No.12/2012-CE dated 17.03.2012 claimed by the appellant on the basis of the records maintained, therefore, allegation of suppression or mis-declaration of facts in our view cannot be sustained. Thus, invoking extended period of limitation to confirm the demand cannot be sustained. Consequently, imposition of penalty and confiscation on the same reasoning also cannot be sustained. Conclusion - The Appellants are entitled to the benefit of exemption from BCD under Notification No.25/1999-2015-Cus. dated 28.02.1999 and Notification No.24/2005-Cus. dated 01.03.2005, but not to the benefit of CVD under Notification No.06/2006-CE dated 01.03.2006 and Notification No.12/2012-CE dated 17.03.2012 and consequently SAD is also inadmissible. The demand be re-determined for CVD and SAD with interest for normal period of limitation. Penalties imposed are set aside. Appeal disposed off by way of remand.

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• 2025 (5) TMI 403
  Levy of 4% Special Additional Duty (SAD) under Notification No. 23/2003-CE and Section 3(5) of the Customs Tariff Act, 1975 - clearances made by a 100% Export Oriented Unit (EOU) to its sister units located in the Domestic Tariff Area (DTA) - leviability of duty on destruction of expired tablets/ raw materials/remnant samples in the factory premises. Levy of 4% Special Additional Duty (SAD) under Notification No. 23/2003-CE and Section 3(5) of the Customs Tariff Act, 1975 - clearances made by a 100% Export Oriented Unit (EOU) to its sister units located in the Domestic Tariff Area (DTA) - HELD THAT:- In the case of Moser Baer India Ltd [ 2009 (6) TMI 48 - CESTAT, NEW DELHI (LB)] , one of the issues, inter alia, was of imposition of SAD on clearances from 100% E.O.U. The value included goods cleared in DTA by E.O.U and exempted from sales tax/ VAT. Hon ble Larger Bench concluded vide para 1, 7.1, 7.3, 7.4, 7.6 and para 8, 12-13 that if an article on which sales tax/VAT or other local taxes are leviable and same is notified by the Central Government by notification issued under Section 3(5) of the Customs Tariff Act, 1975 as attracting SAD @ 4% ad valorem, then SAD would be chargeable on import of the article, even if some State Governments give exemption overall or for some area of a particular state and if that article has been fully exempted from payment of sales tax/VAT. Therefore, we conclude that on merits if supplies are made by 100%EOU to specified exempt area, even if such area is not leviable to VAT/sales tax, it would still be chargeable to 4% SAD. Even the learned counsel had fairly conceded that the decision of the Larger Bench of the Tribunal in the case of Moser Baer India Ltd is against them. Leviability of duty on destruction of expired tablets/ raw materials/remnant samples in the factory premises - HELD THAT:- In Sun pharmaceutical Ltd vs. Commissioner of Central Excise and Customs, Daman [ 2008 (4) TMI 636 - CESTAT, AHMEDABAD] , it has been held that for expired medicines, if despite waiting for long for permission to destroy the goods, no permission is received and the destruction is carried out by party on its own in their premises, then the demand of duty cannot be sustained. It is not coming out from the records in this case as to whether permission was sought for by the appellant and still the party had destroyed the goods circumventing requirement of grant of some reasonable period to the department or not. If reasonable time was not allowed by the party, the duty shall be demandable otherwise not. On the issue of destruction of goods, further details are warranted. These aspects need to be looked into by the adjudicating authority with all the relevant details along with limitation issue. Invocation of extended period of limitation - HELD THAT:- Regarding filing of regular returns, it is observed that they have not disclosed availment of benefit at Sr. 1 of N/N. 23/2003 and have indicated only Sr. 2 of the above notification. Therefore, the appellant s argument on invocation of extended period fails. Conclusion - i) If supplies are made by 100%EOU to specified exempt area, even if such area is not leviable to VAT/sales tax, it would still be chargeable to 4% SAD. ii) Regarding duty on destruction of expired tablets/ raw materials/remnant samples in the factory premises, reasonable time was not allowed by the party, the duty shall be demandable otherwise not. On the issue of destruction of goods, further details are warranted. These aspects need to be looked into by the adjudicating authority with all the relevant details along with limitation issue. iii) The appellant s argument on invocation of extended period fails. Appeal partly allowed.

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• 2025 (5) TMI 402
  Penalty under Rule 209A of Central Excise Rules, 1944 - floating dummy companies and were availing Small Scale Industry (SSI) benefit under N/N. 175/1986- CE dt.01.03.1986 in respect of clearances made by the said 8 companies - whether in the given facts of the case and evidence on record, the 8 companies who have claimed SSI benefit were dummy units of the appellant and therefore, their clearances were required to be clubbed together for denial of the benefit under SSI scheme under N/N. 175/1986-CE dt.01.03.1986 or otherwise? - HELD THAT:- Some of the grounds taken by the learned Advocate have some merit inasmuch as the demand against the co-noticees, which was dropped, did not participate in the denovo proceedings on the assumption that they were not party to the remand proceedings but then evidence in relation to the said parties was taken into account while coming to the conclusion in respect of the present appellant as well as penalty was also imposed. It is obvious that the Adjudicating Authority, on the grounds that they did not participate despite notice of hearing, took into consideration the evidence on record and proceeded to decide the matter ex parte qua the co-noticees, which ultimately resulted in demand of duty from the appellant as well as imposition of penalty on appellant and other co-noticees including the Managing Director - there are no force in the submission of the learned Advocate that the Adjudicating Authority cannot involve the remaining 8 companies in the denovo adjudication proceedings and also in their submission that without reliance placed on their evidence the case cannot be made out against the appellant. It is pertinent to note that if it is taken as if these companies were not covered by the remand proceedings, the order concerning dropping the charges against them would stand confirmed and therefore, those evidences cannot be again applied against the appellant in this round of adjudication. In this case, though the co-noticees have had their own reasons for not joining the adjudication proceedings, despite having received the notice for personal hearing, the Adjudicating Authority was left with no other choice but to proceed based on the evidence on record - the matter needs to be remanded back to the Adjudicating Authority, who shall now give fresh notice of hearing to appellant as well as all the co-noticees as covered in the original SCNs and original Adjudication Order. Both the appeals are disposed of by way of remand.

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• 2025 (5) TMI 401
  CENVAT Credit availed by the appellant-company on inputs purchased from a registered dealer - credit availed credit irregularly on the basis of invoices without actual receipt of inputs, by way of paper transactions - imposition of penalties under Rule 26(1) and (2) of the Central Excise Rules, 2002 upon the co-appellants - extended period of limitation - HELD THAT:- In this case, the appellant-company was procuring inputs through the dealer, namely, M/s. Vikash Industrial Corporation, who is a registered dealer. The said dealer has shown, in his invoices, the manufacturers as M/s. Tata Steel Limited, M/s. Steel Authority of India Limited, M/s. Jindal Steel Products Limited, M/s. Jindal Steel Power Limited, M/s. Garden Reach Ship Builders Engineers Limited, M/s. Ambuja Cements Limited, M/s. Balmer Lawrie Company Limited, M/s. Skipper Limited, etc. There is no statement from the registered supplier cum dealer in the instant case i.e. M/s Vikash Industrial Corporation (proprietor: Sri Dipak Kumar Nathani), denying supply of goods to the appellant-company. If such be the admitted position, and it is said so after carefully going through the statement of Sri Dipak Kumar Nathani dated 05.02.2013, then we find it difficult to hold that the appellant-company had been required to go behind the covering documents issued by the said M/s. Vikash Industrial Corporation under the provisions of the Central Excise Act, 1944 read with the Central Excise Rules, 2002 - when all relevant particulars stood duly mentioned in the said invoices, it was wholly impractical and quite unreasonable to expect the recipient-company to go behind the said documents, examine the actual procurement of goods from the concerned manufacturer and establish transportation of such goods from the factory premises or godown or other premises of the concerned manufacturers up to the premises of the concerned dealer and then to the recipient s premises. During the course of investigation, statements of the owners of few vehicles were recorded, who stated that they had not transported the said goods. However, most of these statements of the vehicle owners were recorded after 3-4 years of the events. Further, these persons from whom statements were recorded, are the owners of the transporting vehicles and no statement from the drivers of the said vehicles have been recorded in this case - Moreover, the above vehicle owners were required to be questioned during the course of investigation as to whether they were driving the said vehicles for transportation of goods during the impugned period or not. If these owners of the transporting vehicles were found to be driving the vehicles during the said period, only in that case and if not proven otherwise, the statements recorded from such transporters may be admissible, although not conclusive. In these circumstances, we find that the CENVAT Credit availed by the appellant no. 1 cannot be denied. Mere recording statements from transporters/vehicle owners, with regard to few invoices, cannot be the reason to deny the whole of the CENVAT Credit availed by the appellant-company. The Revenue has also failed to bring on record as to from where the appellant-company procured the inputs, as it is the claim of the appellants that the inputs procured by them have been used in the manufacture of their final products, which have finally suffered duty - the CENVAT Credit cannot be denied to the appellant. Extended period of limitation - HELD THAT:- The appellant-company had purchased its requirements from M/s Vikash Industrial Corporation without any notice or knowledge of its internal workings and nothing was brought to our attention wherefrom it may be concluded that it had reason to doubt the genuineness of the supplies effected by the said Vikash Industrial Corporation. Receipt of the disputed inputs stood duly evidenced by the appellant-company s receipted challans, stores receipt vouchers and stock ledgers and the appellant-company throughout maintained its stand that without receiving such inputs, it would not have been possible to manufacture finished goods subsequently cleared to the Indian Railways on payment of appropriate duty - the extended period of limitation cannot be invoked without specific and concrete findings of fraud, suppression or willful misstatement. Penalty - HELD THAT:- As the availment of CENVAT Credit is regularized, therefore, no penalty is imposable on the appellants. Conclusion - i) The Revenue failed to bring on record any evidence to show how the appellant-company could have manufactured the finished goods without receipt of inputs, which were duly accounted for in the appellant s records. Credit cannot be denied. ii) The extended period of limitation cannot be invoked without specific and concrete findings of fraud, suppression or willful misstatement. The mere general observation by the adjudicating authority is insufficient. iii) As the availment of CENVAT Credit is regularized, therefore, no penalty is imposable on the appellants. Appeal allowed.

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• 2025 (5) TMI 400
  Levy of service tax - services rendered to BBMB, Nangal, a government authority, under the categories of Management, Maintenance and Repair Service and Commercial or Industrial Construction Services - HELD THAT:- In the present case, the services have been rendered to BBMB, Nangal, which is a govt. authority and as per the Board s Circular No. B-2/08/2004-TRU dated 10.09.2004, the services rendered to the govt. authority are not liable to service tax. The learned Commissioner (Appeals) has changed the classification Head of services from Management, Maintenance Repair Services to Commercial or Industrial Construction Services , which is also not permissible under law. The issue involved in the present case is also covered by the decision of the Tribunal in the case of Nagarujna Construction Co. [ 2010 (5) TMI 232 - CESTAT, BANGALORE] wherein it has been held that when the services are rendered to a government organization then it is not subject to service tax. Conclusion - The services have been rendered to BBMB, Nangal, which is a govt. authority and as per the Board s Circular No. B-2/08/2004-TRU dated 10.09.2004, the services rendered to the govt. authority are not liable to service tax. The impugned order is not sustainable in law - Appeal allowed.

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• 2025 (5) TMI 399
  CENVAT credit fraudulently availed without procuring the goods and thus indulging only in paper transactions - violation of Section 9D and Section 33 of the Central Excise Act, 1944 - HELD THAT:- The appellant has not filed any appeal against the impugned order and as such, they cannot request for quashing the impugned order by way of filing the cross-objections. The respondents could have helped themselves by bringing out any inadequacies in the grounds of review by the Committee of Chief Commissioners or the grounds of appeal in the appeal filed by the Department. It is failed to understand as to how the respondents would be benefitted by setting aside the impugned order, which in fact discharges them from any liability. If the respondents had any objection to the reasoning given by the learned Commissioner in coming to the conclusion that was arrived at, they were free to file an appeal against the impugned order. It is found that the respondents have not convinced on as to how the grounds of appeal taken by the Revenue in the instant appeal are not legally tenable. Conclusion - The respondents have not convinced on as to how the grounds of appeal taken by the Revenue in the instant appeal are not legally tenable. Appeal allowed.

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• 2025 (5) TMI 398
  Condonation of delay in filing the appeal beyond the prescribed period - mandatory pre-deposit requirements under Section 35F of the Central Excise Act - HELD THAT:- It was held, in Central Industries Security Force [ 2017 (6) TMI 279 - UTTARAKHAND HIGH COURT] and in Jagdish Ispat Pvt Ltd [ 2020 (2) TMI 1008 - CESTAT NEW DELHI] that the liberal approach is adaptable for condonation of delay; a litigant does not stand to benefit by lodging an appeal late and refusal to condone the delay can result in a meritorious matter being thrown out at the very threshold cause of justice being defeated. It is found that the delay caused is not intentional and the appellant does not gain anything by delaying the filing of appeal. Therefore, the delay is condonable. Conclusion - The Show cause Notice is not maintainable on limitation. Taking in to account other factors that the Show Cause Notice is vague and Non-specific, the same does not have any chance of survival. As such, remitting the matter back to the Commissioner (Appeals) is not going to serve any fruitful purpose. Appeal allowed by way of remand.

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• 2025 (5) TMI 397
  Demand on account of proportionate Cenvat reversal in terms of Rule 6(3)(ii) of the Cenvat Credit Rules, 2004 - rendering of exempted service during the period 2016-2017 and 2017-2018 up to June 2017 by issuance of the SCN dated 15.01.2022 - whether the appellant is providing any service at all or not? - HELD THAT:- As per Section 65(45) of the Finance Act, 1994, the service means any activity carried out by a person for another for consideration . Therefore, service means an activity carried out by a person for another person. In this case, it is required to see that whether the appellant is provided service to another person or not. It is admitted fact that appellant is an another unit of the appellant themselves for which they have provided the service. Therefore, it cannot be said that the appellant is provided service to another person. Admittedly, in this case, the appellant has provided job work activity to their own unit, therefore, it cannot be said that the appellant has provided any service to another person. Therefore, provisions of Section 65B(44) of Finance Act, 1994 are not applicable to the facts of the case. As there is no service provided by the appellant, therefore, it cannot be said that the appellant has provided any exempted service or taxable service. In that circumstances, the provision of Rule 66B(44) of the Cenvat credit, 2004 are not applicable to the facts of this case. In that circumstances, no service tax is payable by the appellant being they have not provided any service. The fact is noted that the show cause notice has been issued on 15.06.2022 for the period 2016-2017 and 2017-2018 up to June 2017, the show cause notice issued to the appellant beyond the period of five years. Therefore, the demand pertaining to the period up to May 2017 is not sustainable. As the said period is beyond five years, therefore, the show cause notice is barred by limitation - further, the appellant was provided permission to JSPL Angul under Rule 4(6) of CCR, 2004 to get job work done by the appellant, therefore, the activity of job work undertaken by the appellant was known to the respondent. Hence extended period of limitation is not invokable. Conclusion - The appellant is not liable to reverse Cenvat credit under Rule 6(3)(ii) and Rule 6(3A) of the CCR. Furthermore, the extended period of limitation for issuance of the SCN is not justified as the Department had prior knowledge of the arrangement. There are no merit in the impugned order - appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (5) TMI 396
  Disallowance of exemption towards inter-State consignment transfers - levy of penalty u/s 12(3)(b)(v) of the Tamil Nadu General Sales Tax Act - HELD THAT:- It is appropriate to refer the judgment of the Hon ble Supreme Court in Deputy General Manager (Appellate Authority) Vs. Ajai Kumar Srivastava [ 2021 (1) TMI 1312 - SUPREME COURT] , wherein the Hon ble Supreme Court dealt the contours of powers of the Court under Article 226 of the Constitution of India. It was held by The Apex Court that The Constitutional Court while exercising its jurisdiction of judicial review Under Article 226 or Article 136 of the Constitution would not interfere with the findings of fact arrived at in the departmental enquiry proceedings except in a case of malafides or perversity, i.e., where there is no evidence to support a finding or where a finding is such that no man acting reasonably and with objectivity could have arrived at that findings and so long as there is some evidence to support the conclusion arrived at by the departmental authority, the same has to be sustained. It is well settled principle of law that whenever any factual finding is rendered by the authorities, the Writ Court normally will not interfere, unless the same is perverse or contrary to law. Therefore, there is a duty cast upon this Court to find out whether the factual findings rendered by the Sales Tax Appellate Tribunal is in accordance with law. On harmonious reading of the impugned orders, the very reasoning for rejection the assessee s claim under Section 6A of Central Sales Tax Act is on three folds. (i) The agent sold the goods on the cost value, (ii) that the agent did not split the sale in a smaller quantity and (iii) receipt of sale price in advance. In order to substantiate the same, the Sales Tax Appellate Tribunal has extracted certain transactions of assessee s agents. No doubt in some invoices, the gross sale amount at the hands of the agent, and net amount received by the assessee are one and the same. Therefore, we need to consider whether such thing by itself is an indication of direct inter-State sale. At this juncture, it is relevant to refer the judgment relied by the Revenue. In Andaman Timber Industries Ltd s case [ 1997 (11) TMI 500 - MADRAS HIGH COURT] , the dealer has directly sent the goods in the name of ultimate buyer of the other State, whereas, in the case in hand, admittedly, the agent is available at the relevant place, and the stocks were transferred by the agent to the buyer on the same day. Conclusion - The transactions qualify as inter-State consignment transfers eligible for exemption under Section 6A. The impugned order is set aside - petition allowed.

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• Indian Laws

• 2025 (5) TMI 395
  Stamp vendor is a public servant for the purposes of the PC Act or not - conviction of the appellant for offences under Sections 7 and 13(1)(d) read with Section 13(2) of the PC Act. Legislative intent behind the definition of public servant under Section 2(c) of the PC Act - HELD THAT:- When the legislature has used such a comprehensive definition of public servant to achieve the purpose of punishing and curbing growing corruption in government and semi-government departments, it would be appropriate not to limit the contents of the definition clause by a construction which would be against the spirit of the statute. The definition of public servant , therefore, deserves a wide and purposive construction. In construing the definition of public servant in Section 2(c) of the PC Act, the Court is required to adopt a purposive approach as would give effect to the intention of the legislature. The PC Act was enacted after the repeal of the 1947 Act with the object of dealing with the circumstances, contingencies and shortcomings which were noticed in the working and implementation of the 1947 Act. The law relating to prevention of corruption was essentially made to deal with the public servants, not as understood in common parlance but as specifically defined in the PC Act. While holding that a deemed university would fall within the ambit of the PC Act, a three-Judge Bench of this Court in Mansukhbhai Kanjibhai Shah [ 2020 (4) TMI 882 - SUPREME COURT ] observed that it falls upon the courts to interpret provisions of an anti-corruption legislation in a manner to strengthen the fight against corruption. It was further added that in case two views are possible, the court should accept the one that seeks to eradicate corruption over the one which seeks to perpetuate it. Whether Stamp Vendors are Public Servants ? - HELD THAT:- Sections 13 and 14 stipulate the mode of stamping respectively, Section 15 reinforces the effect of non-compliance of the preceding provisions and deems it unstamped. Section 17 provides that all instruments chargeable with duty and executed by any person in India shall be stamped before or at the time of execution. Noncompliance of Section 17 is penalised under Section 62. Section 33 provides that every person who has authority to receive evidence shall impound an instrument which is, in their opinion, chargeable with duty but appears to be not duly stamped. The procedure laid down by the statute to be followed after such impounding also ensures that there is payment of stamp duty and the exchequer does not incur any revenue loss - Section 35 is of particular significance to the issue before this Court as it renders instruments which are not duly stamped inadmissible in evidence for any purpose and imposes a prohibition on such instruments from being acted upon, registered, or authenticated. However, the bar is removed on payment of duty and the penalty. The Collector, again, by powers vested in him under Section 40 is authorised to levy penalty. Section 42 reinforces that the purpose of stamping is in payment of duty, as once the payment of duty and a penalty is complete, the instrument is admissible. The common thread running across the above-mentioned provisions is that the Government desires that the holder of the instrument pays appropriate stamp duty. To fulfil this objective, the Government ensures there is sufficient availability of stamps through licensed stamp vendors. It is for this reason the Government remunerates a stamp vendor as he is facilitating the accessibility of stamps on behalf of the Government, and thus the role being performed by licensed stamp vendor is nothing short of a highly important public duty, essential for ensuring the efficient collection of revenue on behalf of the State. Meaning of Commission under Section 194H of the 1961 Act and Section 2(c)(i) the PC Act - HELD THAT:- Where the wording of a statutory provision indicates that the legislature has consciously attributed varying degrees of significance to different interpretative elements such as the nature of the relationship or the duty performed, the courts are obliged to adhere to that legislative determination and interpret the provision in a manner that reflects the intended statutory scheme. While interpreting a statute, it is essential not only to consider the words used but also to examine the Statement of Objects and Reasons, as it provides the background against which the legislation was enacted. The legislature introduced a comprehensive definition of public servant with the intent to punish and curb the menace of corruption. In such circumstances, it would be improper to construe the definition in a manner that limits its scope, thereby defeating the very essence and purpose of the statute - It is an important rule of interpretation that every interpretation of a statute must be undertaken by considering the statute in its entirety, the prior state of the law, other statutes in pari materia, the general scope and purpose of the legislation, and the mischief that the legislature intended to address. Public Duty as the determinant of status of Public Servant - HELD THAT:- The case of the appellant has tested positive on both aspects of the definition of a public servant under Section 2(c)(i) of the PC Act. The 1934 Rules envisage that the nascent discount eventually matures into a form of remuneration. Further, the purpose of securing stamp duty fortifies the motive behind the efforts of the Government to remunerate stamp vendors. Thus, the appellant, at the relevant time, was being remunerated by the Government. Undoubtedly, the appellant was discharging a duty in which both the State and the public have an interest, which, nonetheless, brings him within the ambit of a public servant as defined under the PC Act. Legality of appellant s conviction - HELD THAT:- It is well-settled that mere recovery of tainted money, by itself, is insufficient to establish the charges against an accused under the PC Act. To sustain a conviction under Sections 7 and 13(1)(d) of the Act respectively, it must be proved beyond reasonable doubt that the public servant voluntarily accepted the money, knowing it to be a bribe. The courts have consistently reiterated that the demand for a bribe is sine qua non for establishing an offence under Section 7 of the PC Act - A five-Judge Bench of this Court in Neeraj Dutta v. State (Government of NCT of Delhi), [ 2022 (12) TMI 1490 - SUPREME COURT (LB) ], categorically held that an offer by bribe-giver and the demand by the public servant have to be proved by the prosecution as a fact in issue for conviction under Sections 7 and 13(1)(d)(i) and (ii) of the PC Act. Mere acceptance of illegal gratification without proof of offer by bribe-giver and demand by the public servant would not make an offence under Sections 7 and 13(1)(d)(i) and (ii) of the PC Act. Thus, mere possession and recovery of tainted currency notes from a public servant, in the absence of proof of demand, is not sufficient to establish an offence under Sections 7 and 13(1)(d) of the PC Act respectively. Consequently, without evidence of demand for illegal gratification, it cannot be said that the public servant used corrupt or illegal means, or abused his position, to obtain any valuable thing or pecuniary advantage in terms of Section 13(1)(d) of the PC Act. It is noted that only two currency notes were recovered, both of which had been smeared with phenolphthalein powder. Notably, even accepting the prosecution s case for the sake of argument, the appellant was lawfully entitled to receive Rs. 10/- for the stamp paper, irrespective of any demand for bribe. Since, the Rs. 10/- note itself was tainted it becomes difficult to determine whether the change in the colour of the solution was triggered by the handling of the Rs. 10/- note or the Rs. 2/- note. Hence, the mere turning of the solution pink cannot, by itself, establish the acceptance of illegal gratification. Presumption under Section 20 of the PC Act - HELD THAT:- Undoubtedly, the presumption under Section 20 arises once it is established that the public servant accepted the gratification. However, in determining whether such acceptance occurred, the totality of the evidence led at the trial must be appreciated. The evidence led by the prosecution, the suggestions made by the defence witnesses, if any, the entire record is required to be considered. Only if the cumulative effect of all the evidence is such that the sole possible conclusion is that the public servant accepted the gratification can it be said that the prosecution has established its case beyond reasonable doubt - the prosecution has failed to establish beyond all reasonable doubt, the demand of bribe and its acceptance, in a trap laid by the ACB. In such circumstances, there is no question of a presumption under Section 20. Consequently, it is compelled to conclude that it would be entirely illegal to uphold the conviction of the appellant under Sections 13(1)(d)(i) and (ii) read with Section 13(2) of the Act. Conclusion - i) The legislature has used a comprehensive definition of public servant to achieve the purpose of punishing and curbing the growing menace of corruption. Keeping this intention of the legislature in mind, we are of the view that the definition of public servant as defined under the PC Act should be given a purposive and wide interpretation so as to advance the object underlying the statute. ii) It is the nature of duty being discharged by a person which assumes paramount importance when determining whether such a person falls within the ambit of the definition of public servant as defined under the PC Act. iii) Stamp vendors across the country, by virtue of performing an important public duty and receiving remuneration from the Government for the discharge of such duty, are undoubtedly public servants within the ambit of Section 2(c)(i) of the PC Act. iv) In the case at hand, the appellant was eligible for receiving discount on the purchase of stamp papers owing to the license that he was holding. Further, the discount is traceable to and is governed by the 1934 Rules framed by the State Government. Thus, the appellant, without a doubt, could be said to be remunerated by the government for the purposes of Section 2(c)(i) of the PC Act. v) The prosecution has failed in establishing the allegation of demand for illegal gratification and acceptance thereof beyond reasonable doubt. Therefore, the conviction of the appellant for the offences under Section 7 and 13(1)(d) read with Section 13(2) of the PC Act cannot be sustained and is, thus, liable to be set aside. The conviction and sentence of the accused, as awarded by the Trial Court and affirmed by the High Court is set aside - Appeal allowed.

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• 2025 (5) TMI 394
  Rejection of plaint by the High Court in exercise of its supervisory jurisdiction under Article 227 of the constitution - HELD THAT:- Power of the High Court under Article 227 is supervisory and is exercised to ensure courts and tribunals under its supervision act within the limits of their jurisdiction conferred by law. This power is to be sparingly exercised in cases where errors are apparent on the face of record, occasioning grave injustice by the court or tribunal assuming jurisdiction which it does not have, failing to exercise jurisdiction which it does have, or exercising its jurisdiction in a perverse manner. Essence of the power under Article 227 being supervisory, it cannot be invoked to usurp the original jurisdiction of the court which it seeks to supervise. Nor can it be invoked to supplant a statutory legal remedy under the Civil Procedure Code, 1908. In the present case, High Court has supervened the provisions of the Code when it rejected the plaint on the ground it was barred by law. In doing so, the High Court not only substituted itself as the court of first instance but also rendered nugatory a valuable right to appeal available to the appellant had the issue been adjudicated by the trial court in the first place - Procedural law provides the necessary legal infrastructure on which edifice of rule of law is built. Short-circuiting of procedure to reach hasty outcomes is an undesirable propensity of an overburdened judiciary. Such impulses rendering procedural safeguards and substantive rights otiose, subvert certainty and consistency in law and need to be discouraged. The impugned order set aside - appeal allowed.

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• 2025 (5) TMI 393
  Dishonour of Cheque - issuance of security cheque or the cheque was issued in discharge of a legally enforceable debt or liability? - burden of prove - rebuttal of presumptions - HELD THAT:- It was laid down by the Hon ble Supreme Court in Malkeet Singh Gill v. State of Chhattisgarh, [ 2022 (7) TMI 1455 - SUPREME COURT ] that the revisional court is not an appellate jurisdiction and it can only rectify the patent defect, errors of jurisdiction or the law. The accused did not dispute in his statement recorded under Section 313 of Cr.P.C. that he had issued the cheque in favour of the complainant. He claimed that the cheque was issued as a security. His witness, Sanjeev Chauhan, also stated in his affidavit (Ex. DW1/A) that the accused had handed over a blank signed cheque and Mangalsutra as security to the complainant. Therefore, the issuance of the cheque is not in dispute. It was laid down by this Court in Naresh Verma vs. Narinder Chauhan [ 2019 (10) TMI 1578 - HIMACHAL PRADESH HIGH COURT] that where the accused had not disputed his signatures on the cheque, the Court has to presume that it was issued in discharge of legal liability and the burden would shift upon the accused to rebut the presumption. The accused claimed that he had issued a blank signed cheque. The complainant denied this fact in his crossexamination. The statement of Sanjeev Chauhan (DW-1) is not reliable, as noticed above. It was suggested to the complainant in his cross-examination that the cheques were kept as security with Rewa Dass, but he was not examined to establish this fact. Hence, the version that a blank signed cheque was issued as security is not established - In any case, it was laid down by the Hon ble Supreme Court in Bir Singh v. Mukesh Kumar [ 2019 (2) TMI 547 - SUPREME COURT] , that a person is liable for the commission of an offence punishable under Section 138 of the N.I Act even if the cheque is filled by some other person - the learned Courts below had rightly held that the accused had failed to rebut the presumption attached to the cheque. The complainant stated that he issued a notice (Ex. CW1/D) to the accused asking him to pay the money. The accused stated in his statement recorded under Section 313 of Cr. P.C. that he had replied to the notice, which means that the issuance of the notice and its receipt are not in dispute. Hence, it is duly proved that the complainant had issued a notice to the accused, which was received by him. The accused admitted in his statement recorded under Section 313 of Cr. P.C. that he had not paid any money to the accused. Thus, another ingredient of the commission of an offence punishable under Section 138 of the NI Act, that the accused had failed to pay the money despite the receipt of a valid notice for demand, was also satisfied - it was duly proved on record that the accused had issued a cheque in favour of the complainant, which was dishonoured with an endorsement of insufficient funds. The accused failed to pay the amount despite the receipt of a valid notice of demand. Therefore, the necessary ingredients of Section 138 of the N I Act were duly satisfied, and the accused was rightly convicted by the learned Trial Court, which conviction was rightly affirmed by the learned Appellate Court. In the present case, the amount of Rs.. 50,000/- was awarded as compensation on the principal amount of Rs.. 4 lacs, which is hardly sufficient to compensate the complainant for the expenses incurred by him for prosecuting the complaint or the deprivation of the interest on the amount loaned by the complainant. However, no appeal was preferred by the complainant against the order of payment of compensation of Rs.. 4,50,000/-, and no interference is required with this part of the sentence. Revision dismissed.

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• 2025 (5) TMI 392
  Calculation of gratuity amount as per unamended service rules of the Company, which would result in a higher amount payable to deceased husband s estate - HELD THAT:- Though it is true that the Company ought to have amended the service manual immediately in line with the amended service rules, but the unamended service manual will certainly not give or create any right in favour of the petitioner to claim higher gratuity. The service manual is a mere handbook for the employees and does not have any statutory force. The employees would be governed by the statutory service rules, as amended. It is not a case that the amendment of the gratuity rules took place in 2022 after the death of the employee, as claimed by the petitioner, but the rules stood amended in the year 2014 with retrospective effect from July, 2013 with the approval of the Commissioner of Income Tax. May be due to mistake the amendment was not incorporated in the service manual. On detection of the error, the manual has been amended and the amendment is with effect from the date on which the amended gratuity rules came into force. Conclusion - It does not appear that the petitioner would be entitled to gratuity at a higher rate relying on the unamended gratuity rules. The petitioner would be entitled to receive gratuity as per the rules prevailing in the Company on the date of death of the employee, i.e, the amended rules which came into effect from July, 2013. Petition dismissed.

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