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Showing 61 to 80 of 333 Records
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2025 (1) TMI 273
Unexplained cash found during search over and above the income surrendered by the assessee u/s 132(4) - CIT(A) held the addition will lead to double addition - HELD THAT:- Assessee has categorically admitted in the statement recorded u/s 132(4) that the advance is part of the surrendered income of Rs. 9.00 Crores in the relevant year. The probability of stating truth in the statement recorded u/s 132(4) is always more for usual reasons. Prima-facie, the statement recorded u/s 132(4) of the act has to be considered true and complete unless proved otherwise.
Since the Revenue has not brought any material on the record to contradict the finding of the CIT(A) and the inference emerged from the statement recorded under section 132(4) therefore, we are of the considered view that there is no need to interfere with the findings of the Ld. CIT(A). Consequentially, the Quantum appeal filed by the Revenue stands dismissed.
Penalty @ 30% u/s 271AAB(1)(a) - assessee surrendered the income during the course of search proceedings - non specification of clear charge - as per revenue assessee did not fulfill the terms and conditions laid down under section 271AAB(1)(a) and the assessee has also not divulged the source and manner of earning such income - HELD THAT:- As no specific charge has been mentioned in the penalty notice issued u/s 271AAB following the decision in the case of Jaina Marketing & Associates [2024 (3) TMI 1007 - ITAT DELHI] we delete the penalty imposed by the AO on the technical ground.
Merely issuing notice in general proforma will negate the very purpose of natural justice. Hon'ble Apex Court in the case of Dilip N Shrof [2007 (5) TMI 198 - SUPREME COURT] held that "the quasi-criminal proceedings u/s 271(1)(c) ought to comply with the principles of natural justice" - Decided in favour of assessee.
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2025 (1) TMI 272
Income recognition - mercantile system of accounting - interest income liable to be taxed on accrual basis or not? - CIT(a) deleting the addition and accepting the income of the assessee as per its audited annual report ignoring the assessee is following the mercantile system of accounting - HELD THAT:- RGPPL and KLNG has settled the loan as per the one time settlement scheme (OTS) pursuant to the Hon’ble NCLAT order and the assessee has received part of the principal and interest component even before the settlement was effected. CIT(A) has accepted the assessee’s contentions that it has not received any principal or interest subsequent to the settlement of loan post the order of Hon’ble NCLAT.
CIT(A) held that AO’s contentions that the assessee has not followed a consistent method for revenue recognition is also negated for the reason that due to the uncertainty that prevailed because of the Hon’ble NCLAT proceeding in the case of RGPPL, application of AS-9 is justified where the revenue recognition is based on the actual interest received during the year under consideration which is NIL during the impugned year.
To corroborate further the assessee being a government entity is subjected to statutory audit by Comptroller and Auditor General of India (CAG) along with supplementary audit which has approved the revenue recognition adopted by the assessee in considering AS-9 to be appropriate in case of uncertainties arising subsequent to preparation of the balance sheet.
Assessee relied on the decision of M/s. MMTC Ltd. [2024 (2) TMI 785 - ITAT DELHI] to substantiate that Accounting Standard AS-9 on revenue recognition issued by ICAI in case of uncertainty is most appropriate. It is also pertinent to point out that the ld. AO has also not brought on record any fact to establish that the assessee has received the impugned amount during the year under consideration in his remand report. The revenue has nothing to controvert assessee’s contentions. Decided in favour of assessee.
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2025 (1) TMI 271
Release of empty containers of Petitioner within a time frame to be fixed by this Hon’ble Court - charging ground rent, storage, handling or related charges from the Petitioners while releasing the empty containers to the Petitioner - HELD THAT:- It appears that the petitioner is only an intermediary of procuring containers and giving the same on lease to the consignees and it is for the consignees to get the material released and in absence thereof the Custom Authority may take appropriate action in accordance with law. The petitioner is not at loss as the petitioner is entitled to recover the dues of higher charges and other charges which may be payable for using the containers by the consignees in accordance with law. The prayers made in this petition cannot be granted while exercising extra ordinary jurisdiction under Article 226 of the Constitution of India.
Petition dismissed.
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2025 (1) TMI 270
Seeking rectification of mistake - Re-determination of value of polyester carpets - confiscation - redemption fine - penalty - HELD THAT:- The original authority (Joint Commissioner ) confiscated both the carpets and threading bars and allowed their redemption on payment of Rs. 30,00,000/- under section 125 of the Customs Act, 1962 [The Act]. He also imposed penalty of Rs.7,00,000/- under section 114(iii) of the Act.
In the impugned order, the Commissioner (Appeals) upheld the confiscation of carpets but set aside the confiscation of the threading bars. He reduced redemption fine to Rs. 1,00,000/- and penalty under section 114 (iii) also to Rs.1,00,000/-. In the Final Order, this Tribunal reversed the reduction of redemption fine and penalty with respect to carpets but did not specify by how much these have been enhanced. It is not possible to infer it from the order of the original authority because he did not give a breakup of how much was the redemption fine for the carpets and how much was for threading bars. Similarly, he did not indicate how much was the fine under section 114(iii) for the carpets and how much was for threading bars.
It is found that the market value of the carpets as per the order in original was Rs.99,38,300/-. As per section 125 the redemption fine cannot exceed the market value of the goods but no minimum amount of fine is prescribed. Similarly section 114 (iii) provides for imposition of penalty not exceeding the value of the goods as declared by the exporter or the value as determined under this Act whichever is greater. No minimum penalty has been prescribed.
Conclusion - Errors apparent on the record must be rectified to ensure clarity and compliance with legal standards. It also establishes that fines and penalties should be proportionate to the market value of the goods and within the statutory limits.
Appeal allowed in part.
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2025 (1) TMI 269
Classification of imported goods - Metal Core Printed Circuit Boards (MCPCBs) - whether these MCPCBs should be classified under Customs Tariff Heading (CTH) 85340000 as standard Printed Circuit Boards (PCBs) or under CTH 94054090 as parts of LED lamps, which carry different duty implications? - HELD THAT:- Department has relied heavily on the IGST Notification 1/2007-I.T(rate) dated 28.06.2017 to decide the classification of the MCPCB cannot be accepted as the same was for the specific purpose of inter-State supply of goods. This cannot supplant the responsibility of the assessing officer under Section 12 of the Customs Act, 1962 to determine the classification of goods.
The issue arising out of the present dispute is no more res integra in view of various orders passed by this Tribunal on identical set of facts. Since the Tribunal has taken the view that the product in question i.e., MCPCB should be classifiable under Tariff Item 8534 0000, different view cannot be taken to sustain classification of the same goods under Tariff Item 9405 9900, as claimed by the Revenue.
Conclusion - MCPCBs should be classified under CTH 8534.
There are no merits in the impugned appeal - appeal dismissed.
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2025 (1) TMI 268
Classification of imported goods - Composite Long Rod Insulators - to be classified under Chapter Tariff Heading 85469090 of Customs Tariff? - benefit of the concessional rate of duty under Notification No. 12/2012-Cus. - extended period of limitation.
HELD THAT:- This matter can be disposed of on limitation without entering into the issue on merit.
The appellant have filed the bill of entry on 9-2-2017 and declared the goods correctly as per the document i.e. Composite Long Rod Insulators, therefore, there is no mis-declaration. The issue was only of interpretation of the words ‘composite’ and ‘polymer’, the word ‘composite’ was used whether the goods imported falls under the description i.e. Polymer Long Rod Insulators as appearing in the Notification. Therefore, the issue involved is clearly an interpretation of the entry provided under the Notification - The appellant have very strong prima facie case on merit also as decided by the adjudicating authority. There is no change of circumstances from date of filing of bill of entry till the issue of show cause notice, therefore, nothing prevented the department to issue show cause notice within the normal period from the date of filing of bill of entry i.e. 9-2-2017. Therefore, there is no reason for invoking the extended period upto three years, when there is no change in the facts of the case.
In the similar type of facts in various judgments, the Hon’ble Supreme Court has taken a view that the extended period cannot be invoked - Relaince can be placed in Northern Plastic Ltd. v. Commissioner [1998 (7) TMI 91 - SUPREME COURT] where it was held that 'the appellant had not misdeclared the imported goods either by making a wrong declaration as regards the classification of the goods or by claiming benefit of the exemption notifications which have been found not applicable to the imported goods. We are also of the view that the declarations in the Bill of Entry were not made with any dishonest intention of evading payment of customs and countervailing duty.'
Conclusion - The extended period for demand under the Customs Act requires clear evidence of suppression or intent to evade duty, not merely an interpretative dispute. The show cause notice issued after almost three years is clearly barred by limitation.
Appeal allowed.
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2025 (1) TMI 267
Classification of imported goods - Telematics Control Unit (TCU) - to be classified under the Customs Tariff Heading 8517 62 90 of the First Schedule of the Customs Tariff Act, 1975 or not - eleigibility to avail concessional rate of Basic Customs Duty under Sl. No. 666 of the N/N. 69/2011-Customs, dated 29-7-2011.
Classification of goods - HELD THAT:- Classification of goods covered under the Customs Tariff is done as per the General Rules of Interpretation (‘GRI’). GRI 1 to 5 lay down the principles determining classification of goods under a specific Heading whereas GRI 6 is applicable if the objective is to determine the classification of goods in the Sub-headings of a Heading. The Larger Bench of the Hon’ble Tribunal in the matter of Saurashtra Chemical, Porbandar v. Collector of Customs [1985 (8) TMI 183 - CEGAT, NEW DELHI-LB] had held that the tariffs must be interpreted in the light of relevant Section and Chapter Notes which are statutorily binding like the Headings themselves.
It appears that CTH 8517 covers such apparatus which is used in transmission and reception of data and wherein the data is transmitted by way of electromagnetic waves in a wireless network. As discussed in Annexure 1 of this application, where the subject good provides for transmission and reception of data in the RF form in the wireless network, by application of the GRI Rule 1 and considering the HSN explanatory notes, the subject good appears to merit classification under CTH 8517 at four-digit level.
It is apparent that all the electrical machinery or equipment covered under Chapter 85 are not regarded as “parts or accessories” of motor vehicles classifiable under Chapter 87, as they stand excluded from the purview of Section XVII.
Applicability of the benefit of the notification - HELD THAT:- The benefit provided under the notification is subject to the condition that the goods being imported from Japan should be originating in Japan and the provisions laid down in Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between the Republic of India and Japan) Rules, 2011 are complied with. So long as the imported goods are rightly classifiable under CTH 8517 62 90 and are originating in Japan, the Applicant is eligible to avail concessional duty benefit @ 0% BCD.
Conclusion - The subject goods i.e. ‘Telematics Control Unit (TCU)’ is rightly classifiable under Customs Tariff Heading (CTH’) 8517and more specifically under 8517 62 90 - The applicant is eligible to avail concessional rate of Basic Customs Duty on import of the subject goods as per SI. No. 666 of Notification No 69/2011 - Customs, dated 29-7-2011.
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2025 (1) TMI 266
Rejection of preliminary objections raised by the Corporate Debtor that application under Section 9 filed by the Operational Creditor is barred by time - HELD THAT:- It is an admitted fact between the parties that invoices were raised from January, 2018 to August 2018. The copy of ledger has also been brought on the record which indicates that payments were made by the Corporate Debtor from time to time. As per ledger, last payment was received by the Operational Creditor on 26.08.2019 through bank receipt. The only question which needs consideration is as to whether the Operational Creditor was entitled for the benefit of Section 19 of the Limitation Act to enable it to seek extension of time from 26.08.2019 i.e. the last date of receipt of the payment. The Adjudicating Authority has treated the date of default as 26.08.2019 which is a date of the last payment receipt.
In the present case, last payment was admittedly made on 26.08.2019 i.e. within the period of three years and there is also acknowledgment by the Corporate Debtor in writing which is reflected from the reply to demand notice. When there is clear acknowledgment by the corporate debtor of last payment made on 26.08.2019 which payment was within the period of three years, the operational creditor was clearly entitled for the benefit of extension of limitation under Section 19 of the Limitation Act and both the conditions which are required to be fulfilled under Section 19 were fulfilled. There are no error in the order of the Adjudicating Authority rejecting the objection of the corporate debtor that application under Section 9 was barred by time. Giving the benefit of last date of payment on 26.08.2019, the application was well within limitation.
Conclusion - Section 9 application was not barred by limitation, as the acknowledgment of the last payment extended the limitation period.
Appeal is dismissed.
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2025 (1) TMI 265
Seeking approval of the resolution plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 ('the Code') read with Regulation 39 (4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- It is satisfied that all the requirements of Section 30 (2) of the Code are fulfilled and no provision of the law appears to have been contravened.
Section 30(6) of the Code enjoins the Resolution Professional to submit the Resolution Plan as approved by the CoC to the Adjudicating Authority. Section 31 of the Code deals with the approval of the Resolution Plan by the Authority if it is satisfied that the Resolution Plan, as approved by the CoC under section 30(4), meets the requirements provided under section 30(2) of the Code. Thus, it is the duty of the Adjudicating Authority to satisfy itself that the Resolution Plan, as approved by the CoC, meets the above requirements.
In K Sashidhar v. Indian Overseas Bank & Others [2019 (2) TMI 1043 - SUPREME COURT] the Hon'ble Apex Court held that if the CoC has approved the Resolution Plan by requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan, as approved by the CoC, meets the requirements specified in Section 30(2). The Hon'ble Apex Court further observed that the role of the NCLT is 'no more and no less'. The Hon'ble Apex Court further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan "as approved" by the requisite percent of voting share of financial creditors. Even in that enquiry, the grounds on which the Adjudicating Authority can reject the Resolution Plan is in reference to matters specified in Section 30(2) when the Resolution Plan does not conform to the stated requirements.
The Hon'ble Supreme Court in the matter of Ghanshyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited [2021 (4) TMI 613 - SUPREME COURT] held that on the date of the approval of the Resolution Plan by the Adjudicating Authority, all such claims which are not a part of the Resolution Plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim which is not a part of the Resolution Plan.
Conclusion - The instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A), and 39 (4) of the Regulations. The Resolution Plan is also not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law.
Application allowed.
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2025 (1) TMI 264
Admissibility of application - initiation of the Insolvency Resolution Process (IRP) against the personal guarantor u/s 95 of IBC - HELD THAT:- There is no dispute that the Appellant stood as a guarantor for the loan availed by the CD. A supplementary deed of guarantee was executed on 05.09.2017. There is also no dispute that the CD has already been admitted into CIRP. The Respondent Bank has proceeded in accordance with law by filing the application under Section 95 through the RP appointed by it. The Respondent served a demand notice dated 25.08.2020 on the Appellant about the unpaid debts of the CD in terms of Rule 7(1) of the Rules and evidence has been led that the said notice was duly delivered to the Appellant on 19.09.2020 to which there is no response to deny its liability. The application under Section 95 was filed after the expiry of 14 days after the date of service of demand notice and was duly served upon the Appellant who did not file any response.
The judgment relied upon by the Appellant in the case of Mr. Ravi Ajit Kulkarni [2021 (9) TMI 60 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] may be of some help to the Appellant had the RP not given independent finding in its report dated 23.07.2021 which is already reproduced in the earlier part of this order, for a quick reference, in which it has been categorically said that “in the virtual meeting organized on 19.06.2021, the Appellant acknowledged the existence of debt and stated that he has not made any payment in capacity of guarantor towards the debt due by the CD of the Respondent Bank” Section 99(2) provides that the debtor has to prove repayment of the debt claimed as unpaid by the creditor by furnishing evidence of electronic transfer of the unpaid amount from the bank account of the debtor, evidence of encashment of a cheque issued by the debtor or a signed acknowledgment by the creditor accepting receipt of dues whereas in the present case the Appellant categorically denied to have made payment which was sufficient to hold that there is a default.
Conclusion - The procedural compliance with Section 95 and the independent verification by the RP are critical for admitting insolvency applications against personal guarantors.
Appeal dismissed.
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2025 (1) TMI 263
Interpretation of the RBI’s Master Circular on Rupee/Foreign Currency Export Credit & Customer Service to Exporters (“Master Circular”) - Banking Ombudsman dismissed the Petitioners’ grievance against the very same interpretation that had been taken by HDFC Bank Limited (Respondent No. 4, “HDFC Bank”) - according to HDFC Bank, since the Subvention Scheme provides Government-sponsored discount only to “export credit”, the exporter would not be entitled to any benefit of the Subvention Scheme where the advance ceases to be “export credit” ab initio - exports actually having been effected within 450 days
HELD THAT:- In our opinion, the Master Circular and the Subvention Scheme, are both instruments of law that seek to implement the stated economic policy objectives. When such instruments fall for interpretation, they ought to be read purposively, contextually, and in a manner that has due regard to the text as well as context, without inflicting violence on the policy objective.
Master Circular on Export Credit - The Master Circular is explicit in terms of its purpose and objective. The Master Circular seeks “to make short-term working capital finance available to exporters at internationally comparable interest rates”.
The crux of the Master Circular is that export credit at competitive interest rates must be made available to exporters in the form of short-term working capital. The very same Master Circular requires banks to keep a close watch on the end-use of funds advanced and to ensure that the credit supplied at special rates under the Master Circular are genuinely used for the purposes of exports.
Crux of the Master Circular is that the maximum period of the export credit would be 360 days (extended to 450 days); one of the multiple means of liquidating it may be used; and the exports so financed would need to be performed within 360 days (extended to 450 days). Within such period, if the exports financed have indeed materialised, banks may purchase the export bills or discount the export bills, and thereby adhere to the period, simply converting the pre-shipment credit into a post-shipment credit (which is also another form of “export credit”). So also, if the exports did not materialise at all in 360 days, the credit extended to the exporter would have to be charged interest at the domestic lending rate and not at the special rate applicable to exports, for the entire period of the credit.
First Lot - We hold that the advances that financed the exports forming part of the First Lot clearly constitute “export credit” and are fully eligible for the subvention under the Subvention Scheme. Any subsequent period of the credit before its redemption i.e. the period of delay in submission of the export documents after the expiry of the maximum period of export credit, would be the period for which the Borrower enjoyed subvention despite the expiry of the maximum permissible period under the Master Circular. The Subvention Scheme is very clear that the subvention would be available only until the date on which the export credit becomes overdue. Reversal of any subvention for such period of delay would be a natural requirement, and we hold that HDFC Bank’s first reaction on October 4, 2021 i.e. of reversing the subvention only for such delayed period was the correct approach that would get support under the Master Circular. HDFC Bank must compute the precise period of delay under each of the underlying exports and charge and effect the reversal of the subvention only for such period of delay insofar as export credit that financed the First Lot is concerned.
Second Lot - The application of the domestic lending rate along with penal interest can only come into effect, if exports do not materialise at all within 450 days.
The special rate applicable to export credit, and the benefits flowing from the Subvention Scheme would not be available to the Borrower in relation to the Second Lot. In any case, HDFC Bank had cash collateral in the form of the fixed deposits for the entire amount, and on the instructions of the Borrower, the cash collateral was to be liquidated and the loan was to be closed out. Any effect of the subvention becoming inapplicable would indeed need to be charged to the Borrower. It was the subvention reversal on the First Lot that led to a mismatch of figures between the two parties. Consequently, we are of the opinion that just as the subvention ought to be made available to the Borrower in relation to the First Lot, HDFC Bank was justified in reversing the subvention amount applicable to the exports underlying the Second Lot. We are unable to agree with Mr. Sridharan, who moulded his argument to submit that as and when the export eventually took place, at least the subvention for the first 450 days ought to be available.
Principle for Drawing a Line - The controversy is only about whether the export documents should be submitted within 450 days and whether the exports should materialize within 450 days.
We have articulated above that in our view, considering the objective of the Master Circular, the core requirement is for exports to have materialised within 450 days and the export documents evidencing the same ought to be submitted. If the export documents, even if submitted later, demonstrate that the exports indeed took place within 450 days, the fact that they were filed a few days late would not be fatal. One would be compelled to hold that the First Lot reasonably falls on the right side of the line. However, where not only have the exports not taken place at all within 450 days, but also the exporter himself has foreclosed the export credit within the 450-day period stating that it is unlikely to be completed within the period, we have no hesitation in holding that Second Lot does not reasonably fall on the right side of the line.
Conclusions and Directions -
a) The Master Circular is required to be read purposively, and is to be implemented in letter and spirit, in a manner that does not undermine its very objective and reason for introduction. It must not be read in a narrow, technical and literal sense and that too with one of its many provisions being read in a manner that undermines its objective;
b) The maximum tenure of pre-shipment credit under the Master Circular is 360 days (extended to 450 days during the Covid-19 pandemic) and exports have to materialise within such period;
c) If exports materialise within such period and export documents demonstrate that the exports have materialised, the credit advanced to the exporter would indeed not be disqualified for being treated as “export credit”, merely on the ground that the export documents that prove the timely materialisation of exports were submitted late;
d) The period of delay in submission of export documents would not be fatal to the treatment of the advances as “export credit” – what is vital is that the export documents ought to prove that exports took place within the stipulated period;
e) The credit enjoyed after the maximum permissible period of export credit i.e. during the period of the delay in submitting the export documents, would attract interest at the normal interest rate along with penal interest in terms of the bank’s policy (published pursuant to the Master Circular);
f) If exports did not materialise within the stipulated period (360 days, extended to 450 days), for purposes of the Master Circular, it would be treated as exports not materialising at all. In such event, the very purpose of providing short-term working capital to finance successful exports would be undermined if the credit extended were to be treated as export credit despite exports not having materialised. Therefore, the credit advanced ought not to be treated as “export credit”;
g) Consequently, subvention would be available to the Borrower in respect of the finance provided in relation to the First Lot;
h) Subvention would not be available to the Borrower in respect of the finance provided in relation to the Second Lot;
i) HDFC Bank shall rectify the reversal of the subvention pertaining to the First Lot within a period of four weeks from the date this judgement is uploaded on this Court’s official website;
j) Consequently, the RBI and the Ministry of Commerce and Industry shall reimburse HDFC Bank with the funds that correspond to the subvention reversal in relation to the First Lot having been corrected as above;
k) HDFC Bank shall within a period of four weeks from today, provide to the Borrower, a detailed statement of account and the computation of the manner in which it has worked out the dues owed and owing between them, in accordance with the declaration of the law in this judgement;
l) There shall be no change to the reversal of subvention in relation to the advances made in connection with the Second Lot.
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2025 (1) TMI 262
Civil revision under Section 86 of the Rajasthan Sales Tax Act, 1994 challenging the order of Rajasthan Tax Board - exercise of jurisdiction under Section 22 A of the Rajasthan Sales Tax Act - HELD THAT:- Evidently, explanation II of Section 22 A of the Rajasthan Sales Tax Act, 1954, makes it abundantly clear that “goods in transport” means goods which have been handed over to a carrier and complete delivery thereof has not taken from such carrier. In the case on hand, none of the five asserted consignee claimed that in fact they had purchased the goods as claimed by the petitioner. The addressee Satyam Enterprises gone to the extent of making complaint against act of the petitioner. Therefore, at the time of seizure, the goods was with the carrier as such was in transit and covered by the explanation of Section 22A.
Conclusion - The goods are considered in transit until delivery is confirmed by the consignee, and proper documentation is essential to avoid penalties.
This Court does not find any merit in this Civil Revision. Accordingly, this Civil Revision stands dismissed.
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2025 (1) TMI 261
Maintainability of appeal - requirement of 7.5% pre-deposit as a condition for appeal can be waived or interfered with by the court - HELD THAT:- It is clear from Manoranjan Chakraborty [2000 (11) TMI 1079 - SUPREME COURT] that the provisions were upheld by the Supreme Court. So much so, there was no exercise of power under article 142 in the Constitution to do complete justice, to permit the respondent to pay any lesser amount than 50%. Nevertheless, the Court said, it was clear that if gross injustice is done and it can be shown for good reason Court should interfere then notwithstanding alternative remedy, a writ Court can in an appropriate case exercise its jurisdiction to do substantive justice.
Conclusion - Statutory pre-deposit requirements are generally binding unless gross injustice is clearly demonstrated.
Petition disposed off.
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2025 (1) TMI 260
Relevant time for filing an application - whether the time for filing a Section 17 application commences when the party seeking to challenge the award receives a formal notice (18.11.2022) of the making of the award, or from the date such party is aware of the existence of the award? - HELD THAT:- The respondents had notice of filing of the award due to the order dated 21.09.2022, wherein the District Court had directed the respondents to hand over the balance fee to the arbitrators, following which the award shall be furnished. The respondents were completely aware of this direction, which sufficiently states that clearing the fees will result in the court notifying the filing of award. The limitation for filing objections to the award is 30 days, and is governed by Article 119(b) of the First Schedule to the Limitation Act, 1963. The trigger for the limitation to start running specified therein is the date of service of notice of the filing of the award. Section 14(2) of the 1940 Act requires that the court of relevant jurisdiction should give notice to the concerned parties when an award is filed.
While Art. 119(b) of the Limitation Act requires that there be a ‘service of notice’ for the limitation to start running, Section 14(2) of the 1940 Act merely states that court ‘give notice’ to the parties. The precise form of what constitutes as a ‘notice’ of filing the award is unspecified. However, interpreted reasonably, what must be required is that the parties come to know about the existence of the award so that any objections to it may be filed. What appears from the usage of the word ‘notice’ is that the parties merely reach a state of awareness about the award and plan their next steps accordingly, and not the imposition of another procedural step.
The District Court and the High Court fell into error that the limitation for filing objections was still running when the appellant filed an application under Section 17 of the Act on 10.11.2022. The formal date of notice of filing of the award on the respondents, that is, 18.11.2022 holds no significance as they were made sufficiently aware of the award ’s filing on 21.09.2022 itself. The court directing the respondents to clear the fees was a clear intimation about its filing. Holding otherwise would not only be departing from precedents of this Court, but also allowing the respondents to take advantage of their own inaction. Hence, the limitation is to be treated as expired on 20.10.2022, and the appellant’s application seeking pronouncement of judgment in terms of the award was valid and well beyond the period for filing objections to the award.
Conclusion - The parties have to take steps to scrutinise the award themselves as soon as it becomes accessible and they are aware of its accessibility. The limitation period was deemed to have started on 21.09.2022, making the appellant's application under Section 17 timely and valid.
Appeal allowed.
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2025 (1) TMI 259
Principles of natural justice - whether the High Court has correctly exercised its supervisory jurisdiction under Article 227 in granting the respondent/claimant one more opportunity to crossexamine appellant/respondent’s witness, despite the Arbitral Tribunal rejecting such a prayer? - HELD THAT:- Section 11 application was allowed by the High Court on 08.05.2023 leading to the constitution of the Tribunal which held the first hearing on 19.05.2023. It is evident that the cross-examination of the appellant/respondent’s witness RW-1 commenced on 09.12.2023 when the respondent/claimant’s counsel asked 9 questions on that very day and the cross was adjourned for 10.02.2024. On 10.02.2024, the record shows that the crossexamination commenced at 11 am and concluded by 7 pm during which time the respondent/claimant’s counsel asked as many as 104 questions to the said witness. After a long lapse of almost 8 months, during which period the mandate of the Arbitral Tribunal was exhausted, the cross-examination commenced on 01.10.2024. Even on that day the cross-examination was commenced at 5.35 pm and concluded at 7.40 pm, which is more than two hours.
The Arbitral Tribunal seems to have given full opportunity to all parties, which is amply evident from the record. On the other hand, the unrestrained cross-examination of RW-1 by the respondent/claimant has already exceeded 12 hours, but the respondent/claimant does not seem to be satisfied with it.
Even as per the quote hereinabove interference under Article 226/227 is ‘permissible only if the order is completely perverse i.e. that the perversity must stare in the face.’ Condition (vi) to (x) underscores the reason why High Courts ought not to interfere with orders passed by the Arbitral Tribunals for more than one reason.
Conclusion - There are no justification in the order passed by the High Court in interfering with the directions of the Arbitral Tribunal holding that full and sufficient opportunity to cross-examine RW-1 has already been given and no further extension of time is warranted.
Appeal allowed.
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2025 (1) TMI 258
Estimation of income - Bogus purchases - result declared by the assessee in their return of income relied upon - AO Determined the commission from the alleged bogus parties relating to purchases and sales and made the addition - HELD THAT:- AO should have either rejected the books of account and determined the actual profit earned by the assessee. He chose to proceed with the result declared by the assessee in their return of income and also proceeded to make the presumed commission income which assessee must have paid and received.
We are not able to understand that the AO has retained the returned income as per the ROI and also made the commission income on top of the retuned income. Strictly speaking he has to determine the actual income earned by the assessee not on the basis of presumption. In that case, he has to rework the actual income earned by the assessee. As discussed above, the AO may have to reduce the bogus purchases and sales to the extent it is booked in the financial statements and must have added the commission income which is the payment presumed to have been made. The net result would have been lesser than the retuned income
AO has already proved that the purchases and sales as bogus based on the material found during the search and has already chose to treat them as bogus and cannot play hot and cold.
As discussed above, he has to determine the actual income earned by the assessee and can charge to tax only the actual returned income. It is allowed to make penalties as per the law and cannot presume or make additional income as the income of the assessee without their being actually earned by the assessee. It is different if the AO has not come to conclusion that the transactions are not genuine.
Therefore, after considering the factual matrix on this case, we are of the view that the gross taxable income cannot be less than the returned income filed by the assessee u/s 139(1) of the Act. In our view, the addition made by the Assessing Officer of commission and the elimination of bogus purchases and sales will reduce the taxable income. Therefore, we are inclined to delete the additions made by the Assessing Officer - Decided in favour of assessee.
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2025 (1) TMI 257
Revocation of cancellation of their GST registration - final order of cancellation fails to record or assign any reason in support of the allegations which stood leveled in the SCN and which preceded the passing of that order - Violation of principles of natural justice - HELD THAT:- As is manifest from a reading of the SCN of 26 December 2023, the respondents had failed to indicate any intent to cancel the registration from a retrospective date.
The final order of cancellation fails to record or assign any reason in support of the allegations which stood leveled in the SCN and which preceded the passing of that order. In view of the aforesaid, the order of 08 January 2024 is rendered wholly unsustainable.
As is manifest from a reading of the SCN of 26 December 2023, the respondents had failed to indicate any intent to cancel the registration from a retrospective date.
Conclusion - The entire procedure as adopted by the respondents appears to be wholly arbitrary.
The impugned order of 08 January 2024 cannot possibly be sustained - Petition allowed.
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2025 (1) TMI 256
Suspension of GST registration of petiitoner - non-consideration of reply - Violation of principles of natural jusice - HELD THAT:- Admittedly, the petitioner is a registered dealer under the provisions of GST. The respondent has initiated an enquiry into certain alleged irregularities committed by the petitioner. The petitioner has replied to the said show cause notice. Under the said circumstances, it would be appropriate for the respondent to consider the reply of the petitioner and thereafter pass suitable orders in accordance with law and the act of respondent in suspending the GST registration of the petitioner pending enquiry would be too harsh on the petitioner as he would not be in the position to conduct his business and the enquiry may take some time.
The respondent is hereby directed to revoke the suspension of the GST registration of the petitioner which has been done as per show cause notice dated 14.10.2024.
Petition disposed off.
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2025 (1) TMI 255
Challenge to order which has come to be passed and in terms of which a SCN dated 30 May 2024 pertaining to the tax period April 2019 to March 2020 has come to be finalized - HELD THAT:- While dealing with an identically worded order passed by the said officer, in XEROX INDIA LIMITED VERSUS ASSISTANT COMMISSIONER, WARD 208 (ZONE -11) DGST AND ANR [2024 (12) TMI 1283 - DELHI HIGH COURT] it was held that 'The Assistant Commissioner has clearly adopted a template where the only reason assigned is that the reply filed was “not comprehensible, conceivable, not perspicuous and is ambiguous”. This clearly exhibits an abject non-application of mind and the officer repeatedly employing identical phraseology to deal with such matters.' - the final order cannot be sustained.
The order dated 25 August 2024 is quashed - petition allowed.
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2025 (1) TMI 254
Cancellation of registration of the petitioner - non filing of the GST return for a continuous period of six months - petitioner is ready to make the payment towards GST returns for a period of six months - HELD THAT:- In view of the consensus between the parties, the matter is covered by the order passed in Kiran Enterprises GSTIN Versus Commissioner, State Goods & Another [2024 (10) TMI 1306 - UTTARAKHAND HIGH COURT]], the present writ petition is also decided in terms of the said order.
Petition disposed off.
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