TMI Tax Updates - e-Newsletter
January 2, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Securities / SEBI FEMA PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. Analysis of GST Council’s Decision on GST on supply of goods warehoused in a Special Economic Zone (SEZ) or Free Trade Warehousing Zone (FTWZ) to any person before clearance & ancillary issues

   By: Vivek Jalan

2. PERSONAL GUARANTOR – A FINANCIAL CREDITOR?

   By: DR.MARIAPPAN GOVINDARAJAN

3. Role of APEDA Registration in Boosting Agricultural Exports

   By: Ishita Ramani

4. No penalty if goods were found with a proper tax invoice and e-way bill belonging to a person whose registration was suspended

   By: Bimal jain

5. Analysis of GST Council’s Decision on Clarification on availability of Input Tax Credit as per section 16(2)(b) of CGST Act, 2017 in respect of goods which have been delivered by the supplier at his (supplier’s) place of business; & Impact of Place of Supply u/s 10(1)(a) & (b) of IGST Act

   By: Vivek Jalan

6. Do's and Don'ts for Food License Documents Under FSSAI Guidelines

   By: Ishita Ramani

7. On winning from lottery, cross words puzzles etc

   By: DEVKUMAR KOTHARI and CA UMA KOTHARI

News

1. Gross and Net GST revenue collections for the month of Dec, 2024

2. Advisory to Taxpayers on Extension of E-Way Bills Expired on 31st December, 2024

3. GST kitty up 7.3 pc to Rs 1.77 lakh cr in Dec

4. Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Arunachal Pradesh

5. EIC has evolved as a key facilitator of India’s export trade and quality standards compliance

6. DFS Secretary Shri M. Nagaraju chairs meeting to expedite resolution of public grievances

7. Tobacco Board focuses on sustainability and growth of the industry; exports reach 12,005 crores in 2023-24

8. Ministry of Finance Year Ender 2024: Department of Economic Affairs

9. CCI approves the proposed combination involving acquisition of 72.89% voting share capital in Prataap Snacks Limited by Authum Investment & Infrastructure Limited and Ms. Mahi Madhusudan Kela

10. CCI approves the acquisition of certain shareholding of Fourth Partner Energy Private Limited (Target) by International Finance Corporation (IFC), Asian Development Bank (ADB) and DEG - Deutsche Investitions - und Entwicklungsgesellschaft mbH (DEG)

11. Competition Commission of India (CCI) approves the acquisition of all outstanding equity shares of Kellanova by Mars, Incorporated

12. Monthly review of accounts of Government of India upto November, 2024 (FY2024-25)

13. Ministry of Finance Year Ender 2024: Department of Investment and Public Asset Management (DIPAM)

14. Ministry of Finance Year Ender 2024: Department of Public Enterprises

15. Income-Tax department extends deadline for filing revised ITR for AY25 to January 15

16. Pak PM Sharif unveils national economic plan to transform country in next 5 years

Notifications

Companies Law

1. G.S.R. 794 (E) - dated 31-12-2024 - Co. Law

Companies (Accounts) Second Amendment Rules, 2024 - Filing of Corporate Social Responsibility in Form CSR-2

Customs

2. 88/2024 - dated 31-12-2024 - Cus (NT)

Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver

DGFT

3. 46 /2024-25 - dated 30-12-2024 - FTP

Imposition of Minimum Import Price (MIP) on import of Soda Ash covered under Chapter 28 of ITC (HS) 2022, Schedule –I (Import Policy)

SEZ

4. S.O. 5645 (E) - dated 27-12-2024 - SEZ

Central Government de-notifies an area of 2.16 hectares, thereby making resultant area as 17.80 hectares at Plot No. 3, Kalwa TTC Industrial Area, MIDC, District Thane, in the State of Maharashtra

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/CFD/CFD-PoD-2/CIR/P/2024/185 - dated 31-12-2024

Implementation of recommendations of the Expert Committee for facilitating ease of doing business for listed entities

GST

2. 240/34/2024 - dated 31-12-2024

Clarification in respect of input tax credit availed by electronic commerce operators where services specified under Section 9(5) of Central Goods and Services Tax Act, 2017 are supplied through their platform

3. 241/35/2024 - dated 31-12-2024

Clarification on availability of input tax credit as per clause (b) of sub-section (2) of section 16 of the Central Goods and Services Tax Act, 2017 in respect of goods which have been delivered by the supplier at his place of business under Ex-Works Contract

4. 242/36/2024 - dated 31-12-2024

Clarification on place of supply of Online Services supplied by the suppliers of services to unregistered recipients

5. 243/37/2024 - dated 31-12-2024

Clarification on various issues pertaining to GST treatment of vouchers

Highlights / Catch Notes

GST

• Petition allowed for tax refund claim, Commissioner can't review appellate order u/s 107(2).

  Case-Laws - HC : The HC allowed the petition. The respondents failed to file a reply despite granted extensions regarding the petitioner's refund claim for April 2018 to March 2019. The HC held that the Commissioner cannot review an order passed by the appellate authority u/s 107(2) of the Act, rendering the impugned order unsustainable in light of the HC's earlier observations.
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• Dismissal of Writ Petition Against GST Demand Cancellation & Bank Account De-Freezing Upheld.

  Case-Laws - HC : The HC dismissed the writ petition challenging the cancellation of the alleged GST demand and de-freezing of bank accounts. It held that the final order u/s 74 of the CGST Act against the petitioner in 2019 was not challenged as per law. The freeze was u/s 79(1)(c), not Section 83. The petitioner was granted liberty to adopt appropriate remedies and raise grounds like identity theft in any future proceedings.
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• Voluntary GST deposit of Rs. 40 lakh to be refunded despite ineligibility for interest, rules HC.

  Case-Laws - HC : The HC allowed the petition and quashed the order rejecting the petitioner's refund claim of Rs. 40,00,000 deposited voluntarily by mistake. The HC held that the amount paid by the petitioner from the electronic cash ledger is required to be refunded as it was not covered u/s 54 of the GST Act. However, the petitioner is not entitled to any interest on such amount. The respondents are directed to refund the amount of Rs. 40,00,000 deposited by the petitioner.
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• HC orders tax authorities to process pending GST refund applications, consider additional documents, and pay interest if delayed.

  Case-Laws - HC : HC held that the competent authority shall examine the pending refund application under SGST/CGST Act provisions, consider additional documentation provided, and dispose of the same in accordance with law. Writ petition disposed of directing payment of interest on refund amount from date immediately after expiry of 60 days from receipt of RFD-01 application.
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• Petitioner Gets One Chance to Justify Input Tax Credit Claim as per Circulars Before Competent Authority.

  Case-Laws - HC : One opportunity granted to petitioner to prove claim for input tax credit in terms of Circulars referred in M. Trade Links [2024 (6) TMI 288 - Kerala HC] before competent authority. HC allowed writ petition, set aside orders denying input tax credit u/s 16(2)(c) CGST/SGST Acts, directed consideration of petitioner's claim after hearing authorised representative.
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• Authorities' Decision to Grant Relaxation for Municipal Dues Payment Upheld, Considering Party's Non-Defaulter History.

  Case-Laws - HC : The HC held that considering respondent No.6's history of not being a defaulter in the past for municipal dues, the authorities rightly granted relaxation for payment of the balance amount owed for occupying the municipal ground. Petition dismissed as it was not a fit case to allow the proceedings to continue.
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• Contractor's Plea Against Tax Deductions from Running Bills Dismissed as Unsubstantiated by High Court.

  Case-Laws - HC : The HC found the writ petition infructuous as there was no infirmity in the application of CGST and SGST Acts by the State respondents while making deductions from the petitioner's 2nd and 3rd running bills. The petitioner can submit a representation if entitled to any concession as per law. The writ petition was dismissed as infructuous.
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• Summary Rejection of GST Rectification Application Due to Petitioner's Failure to Reply to Notices Before Assessment.

  Case-Laws - HC : The HC rejected the application for rectification u/s 161 of the GST Act regarding mismatch between GSTR-3B, GSTR-2A, and GSTR-7. It held that the petitioner failed to reply to notices before assessment, violating principles of procedural fairness. The HC directed the petitioner to treat the impugned order as a show cause notice and submit objections with supporting documents within two weeks.
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Income Tax

• Deadline Extended for Determining Vivad Se Vishwas Scheme Payable Amount from Dec 31, 2024 to Jan 31, 2025.

  Circulars : The CBDT extended the due date for determining the amount payable under column (3) of the Table in section 90 of the Direct Tax Vivad Se Vishwas Scheme, 2024 from 31st December, 2024 to 31st January, 2025. Where a declaration is filed on or before 31st January, 2025, the payable amount shall be determined as per column (3), and for declarations filed on or after 1st February, 2025, the payable amount shall be determined as per column (4) of the said Table.
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• Dismissed writ plea against tax assessment order; no violation of natural justice found, legal heir represented before authority.

  Case-Laws - HC : Writ petition against assessment order dismissed by HC. Petitioner alleged violation of principles of natural justice. HC held no apparent violation as legal heir was duly represented before Assessing Authority. Alternative statutory remedy of appeal available, hence extraordinary writ jurisdiction not invoked. Petition dismissed with liberty to avail appellate remedy.
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• Stock-in-Trade Shares Don't Attract Expense Disallowance u/s 14A Even if Dividends Earned.

  Case-Laws - HC : Assessee held shares as stock-in-trade for trading purposes, not to earn dividend income. HC held provisions of Section 14A disallowing expenses relatable to exempt income inapplicable as no exempt income accrued. Where shares held as stock-in-trade, earning dividend immaterial; purpose is to trade by selling when price rises to earn profits. Situation differs from holding shares to retain control over investee company and intentionally earning dividend. Decided against revenue.
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• Detailed Reassessment Order Not Grounds for Writ When Appeal Remedy Available Under Income Tax Act.

  Case-Laws - HC : The HC held that the reassessment order was a detailed one based on appreciation of documents and rival submissions, not a cryptic order. As an effective alternative remedy of appeal u/s 246A of the Income Tax Act, 1961 is available, it would not be proper for the HC to exercise its extraordinary jurisdiction under Article 226 against the reassessment proceedings. However, the petitioner is free to avail the statutory alternative remedy.
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• Revision order u/s 263 upheld on casual acceptance of merchant banker's premium share valuation report.

  Case-Laws - AT : PCIT invoked section 263 against order of AO accepting valuation report of merchant banker determining share value at premium. ITAT held that AO failed to make proper enquiry and record reasons for accepting valuation report, especially when similar report was rejected in preceding year for assessee. AO passing order without proper enquiry and reasons on substantial issue like share valuation made order erroneous and amenable to revision u/s 263. Decided against assessee.
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• Unexplained cash credit of Rs. 2.5 crore cannot be added to assessee's income without evidence, rules ITAT.

  Case-Laws - AT : The ITAT held that the addition of Rs. 2.5 crore to the assessee's income was unsustainable. It was not established that the assessee actually received the said amount. The entire sales were duly recorded, and no evidence proved receipt of the impugned sum. The addition was made without any charging provision under the law. The ITAT ruled in favor of the assessee, setting aside the orders of the AO and CIT(A).
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• Revision u/s 263: Unsold Building Inventories Attract Notional Rental Income Tax, ITAT Rules Against Assessee.

  Case-Laws - AT : The ITAT held that the AO committed an error prejudicial to the Revenue's interest by failing to tax the notional annual letting value of the assessee company's unsold building inventories under 'income from house property'. Relying on judicial precedents, the ITAT ruled that unsold building inventories attract taxation on their notional rental income, which the AO erroneously omitted despite reopening assessment for this specific purpose. Consequently, the twin conditions for revision u/s 263 were satisfied, and the matter was decided against the assessee.
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• Taxpayer's Investment in Housing Project Qualifies for Sec 54F Deduction, Despite Association.

  Case-Laws - AT : The ITAT allowed the assessee's claim for deduction u/s 54F despite the Assessing Officer's objections. It held that the assessee had invested the entire net consideration in constructing a residential house within the stipulated period, satisfying the requirements of Section 54F. The mere fact that the assessee was associated with the concern developing the housing project could not be grounds for denying the deduction. The ITAT relied on judicial precedents, including the Karnataka High Court's decision in CIT vs. Smt. B.S. Shantakumari and the Supreme Court's ruling in Fibre Boards (P) Ltd., to conclude that the assessee was entitled to the deduction u/s 54F.
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• Undisclosed Bank Account and Cash Deposits Lead to Income Assessment, Turnover Estimation and Penalty for Not Getting Accounts Audited.

  Case-Laws - AT : The ITAT upheld the reopening of assessment u/s 147 as the assessee had not disclosed a savings bank account with cash deposits of Rs. 13,20,535, providing prima facie reason. 25% of the cash deposits were treated as the assessee's income in absence of evidence for source. The CIT(A)'s estimation of 8% profit on turnover was upheld as the assessee did not disclose all credit entries. Penalty u/s 271B for failure to get accounts audited was upheld as the assessee could not establish reasonable cause, having shown lower turnover to avoid audit.
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• Tax Deduction Upheld: ITAT Affirms AO's Well-Reasoned Order, Limits CIT's Revisionary Powers u/s 263.

  Case-Laws - AT : The ITAT allowed the assessee's appeal against revision u/s 263 by the CIT. The AO had rightly allowed deduction u/s 57 after detailed inquiry. The CIT cannot substitute his view for the AO's well-reasoned order. Explanation 2(a) to Sec. 263 does not give unfettered revision powers. The AO's order was not erroneous or prejudicial to revenue interests.
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• Assessee's evidence rebuts AO's addition; outstanding creditors allowed as per books.

  Case-Laws - AT : The ITAT dismissed the Revenue's appeal and upheld the CIT(A)'s order deleting the addition of Rs. 4 crores u/s 69C. The assessee's books reflected outstanding trade payables to Shri Paranthaman concerns. The seized material and the director's statement were rebutted by the evidence. The ITAT found contradictions and logical flaws in the director's statement relied upon by the AO. The loose sheets did not contain the complete creditors' list and were for reconciliation purposes during account finalization. The assessee established the outstanding trade creditors were allowable and not outside the books.
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• Deadline Extended for Individuals to File Late/Revised Tax Returns for FY 2023-24 to January 15, 2025 -24.

  Circulars : CBDT extended due date for resident individuals to file belated/revised return of income for AY 2024-25 from 31.12.2024 to 15.01.2025 u/ss 139(4) and 139(5) of Income Tax Act, 1961.
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Customs

• Petitioner's Car Seat Covers Qualify as Motor Vehicle Accessories, Eligible for MEIS Benefits: HC Ruling.

  Case-Laws - HC : The HC held that the petitioner's exported car seat covers manufactured by it fall under HS Code 87089900 and are eligible for benefits claimed under the Merchandise Exports from India Scheme (MEIS). Relying on the Supreme Court's decision in Mehra Brothers V. Joint Commercial Officer, the HC observed that car seat covers are accessories to motor vehicles, irrespective of being made of textile fabric. Consequently, the orders denying MEIS benefits to the petitioner were set aside.
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• Customs Authorities' Classification of Goods Overruled; Consignments Released to Petitioner.

  Case-Laws - HC : HC allowed petitioner's prayer for release of five consignments earlier considered 'firearms' by authorities. Superdarinama and conditions imposed earlier revoked. Petitioner can deal with consignments per law. Claim for demurrage compensation rejected.
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• Deceased Passenger's Heir Allowed to Redeem Confiscated Gold; Limitation Period Reset Due to Non-Communication.

  Case-Laws - HC : The HC held that the Petitioner, as the legal heir of the deceased passenger, is entitled to redeem the confiscated gold under the Customs Act, 1962. The limitation period u/s 125 for redeeming the goods did not commence due to lack of communication of the order to the deceased passenger. The Petitioner is permitted to redeem the goods upon compliance with the original order, and demurrage charges are waived considering the passenger's demise and non-service of the order.
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• Dismissal of Petition for Forum Shopping and Re-agitation of Adjudicated Issues under Customs Act.

  Case-Laws - HC : The HC dismissed the petition as it amounted to forum shopping since the petitioner sought to re-agitate issues already adjudicated upon by the HC after exhausting remedies against non-entertainment of appeals for non-compliance with mandatory pre-deposit u/s 129(E) of the Customs Act, 1962 and imposition of penalty on the petitioner under various provisions thereof.
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DGFT

• Government Extends Minimum Export Price of $2000 per Ton on Natural Honey Exports Until End of 2025.

  Notifications : The Central Government has extended the Minimum Export Price (MEP) of US$ 2000 FOB per metric ton on export of Natural Honey under ITC(HS) code 0409 0000 till 31st December 2025, as per Notification No. 45/2024-25 issued by the DGFT under the Foreign Trade (Development & Regulation) Act, 1992 and Foreign Trade Policy, 2023.
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• Exporters must follow new DGFT rules for seed exports: specs, raw materials, affidavits on compliance.

  Circulars : The DGFT issued a Standard Operating Procedure (SOP) for exporters to obtain authorizations for restricted seeds and planting materials. Key requirements include submitting product specifications, raw material details, and specific affidavits confirming compliance with regulations like the Biological Diversity Act and Seed Control Order. For seed exports, licenses, chemical treatment declarations, and labeling norms must be adhered to. For non-sowing purposes like rice paddy, an affidavit stating the material is solely for consumption and not sowing is mandated. The SOP aims to facilitate trade and streamline the authorization process.
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• Import Authorization for Low Ash Coke: Apply by Jan 12th with 3-Year Data, Get Quarterly Quota Based on Production Capacity.

  Circulars : The DGFT invited applications from 1st to 12th January 2025 for obtaining import authorizations for low ash metallurgical coke subject to country-wise quantitative restrictions from 1st January to 30th June 2025. Applicants must file country-specific applications with import data for past 3 years, current year imports, production capacity, and actual 2023-24 production. A Special EFC will allocate quantities, which cannot exceed the authorized amount per quarter, except for adjustments. The DGFT shall review utilization after the first quarter and may revise allocations based on actual imports. Misrepresentation will disqualify applicants. The DGFT reserves rights to modify procedures.
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SEZ

• Hybrid Working Model in Special Economic Zones Extended Until 2027, Boosting Operational Flexibility for Companies.

  Notifications : The Central Government amended Special Economic Zones Rules, 2006 extending the permission for hybrid working model for units in Special Economic Zones until 31st December 2027 by substituting the earlier date of 31st December 2024 in Rule 43A(3).
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FEMA

• Initiating FEMA Violation Proceedings After Omission of Provision Held Without Jurisdiction.

  Case-Laws - HC : The HC held that initiating proceedings against the petitioner alleging violation of Section 6(3)(b) of FEMA Act in 2021 was without jurisdiction. Section 6(3)(b) stood omitted by the Finance Act, 2015, notified on 15.10.2019. The complaint against the petitioner was filed on 25.10.2019 and show cause notice issued on 25.02.2020, after the omission took effect. Section 6 of the General Clauses Act regarding repeals was not applicable as the present case involved omission. The HC allowed the writ petition.
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Corporate Law

• Auditors Penalized for Gross Negligence and Lack of Due Diligence in Auditing Public Interest Entity.

  Case-Laws - NFRA : The NFRA held that the Auditors were grossly negligent and failed to exercise due diligence in the audit of a public interest entity, amounting to professional misconduct u/s 132(4) of the Companies Act, 2013. Monetary penalties were imposed - Rs. 2 crore on the Audit Firm, Rs. 10 lakhs on CA A.B. Jani who was also debarred for 5 years, and Rs. 5 lakhs on CA Rakesh Sharma who was debarred for 3 years from undertaking audits of companies.
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• NFRA Penalizes Auditors for Lapses in DB Realty Audit, Imposes Monetary Fines and Audit Bans.

  Case-Laws - NFRA : The NFRA held the Engagement Partner (EP) and Engagement Quality Control Reviewer (EQCR) guilty of professional misconduct u/ss 132(4), 22 of the Companies Act 2013 and Chartered Accountants Act 1949 for failing to exercise due diligence, obtain sufficient audit evidence, and comply with auditing standards during the 2015-16 audit of DB Realty Limited. Monetary penalties of Rs. 5 lakh on EP and Rs. 3 lakh on EQCR were imposed, along with debarment from audit assignments for 5 years and 3 years respectively.
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Indian Laws

• Banks Can Set Credit Card Interest Rates Above 30% Per Annum - Supreme Court Upholds RBI's Exclusive Jurisdiction.

  Case-Laws - SC : The SC held that the National Consumer Disputes Redressal Commission lacks jurisdiction to interfere with banking operations, which is the exclusive statutory domain of the RBI. It cannot fix a maximum ceiling rate of interest for banks to charge credit card holders or direct banks to charge interest not exceeding 30% p.a., in absence of RBI instructions. Charging interest rates as per RBI circulars/notifications, independent of a standard ceiling, does not constitute an unfair trade practice. The terms of a contract between parties cannot be judicially scrutinized unless arbitrary, discriminatory or mala fide. The impugned judgment interfered with contractual terms and the RBI's regulatory powers, hence was set aside.
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• Cheque Dishonor Cases: High Court Refuses to Quash Proceedings on Technical Grounds, Emphasizes Fair Trial.

  Case-Laws - HC : The HC dismissed the petitions seeking quashing of criminal complaints against the petitioners for dishonor of cheques. It held that exercising inherent jurisdiction u/s 482 CrPC to quash proceedings at summoning stage should be done sparingly. Mere change in complainant company's name is formal and curable, not affecting rights or merits. Quashing on this technical ground when cheque signatures are undisputed and claim unadjudicated would frustrate justice. The Trial Court was requested to expedite proceedings pending since 2018.
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• Negotiable Instruments Act offence can be compounded post-conviction if parties compromise.

  Case-Laws - HC : The HC permitted compounding of the offence u/s 138 of the Negotiable Instruments Act after the accused compromised with the complainant post conviction and sentencing. Relying on Supreme Court precedents, the HC held that Section 147 overrides Section 320(9) CrPC, allowing compounding even after conviction. Consequently, the HC quashed the conviction and sentence, acquitting the accused on payment of Rs.15,000 as compounding fee, which was reduced considering the accused's poor financial condition.
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PMLA

• Money laundering case can proceed despite acquittal in predicate offence, says SC.

  Case-Laws - SC : The SC held that merely because the respondent was discharged in the predicate offence, the HC cannot quash the summons issued under PMLA. The question of arraying the respondent as an accused is to be decided later, and the respondent can raise relevant contentions, including that the PMLA proceedings cannot sustain if the predicate offence is quashed. The impugned HC order was set aside, allowing the appellant to proceed pursuant to the summons, with all issues left open for the respondent if arrayed as an accused.
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• Economic Crimes Have Severe Consequences: HC Denies Bail in Money Laundering Case Involving Public Funds Misuse.

  Case-Laws - HC : The HC denied bail to the applicant accused of money laundering and collecting illegal bribes while controlling high-level management of State departments and public sector undertakings. Despite no unaccounted money being recovered, the court considered the gravity of economic offences involving deep-rooted conspiracies, huge public fund losses, and threats to the country's financial health. While economic offences warrant a different bail approach, the presumption of innocence was upheld. However, the applicant's release posed risks given the serious charges and potential witness tampering. The bail rejection prioritized the case's severity over the applicant's liberty interests.
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• Bail granted in money laundering case as prolonged incarceration violates Article 21 rights.

  Case-Laws - HC : The HC allowed the applications for grant of bail to the petitioners in a money laundering case involving unexplained sources of income. Despite being in judicial custody for 14 months with the investigation against them complete, the trial was unlikely to commence soon. Observing their prolonged incarceration would infringe their Article 21 rights, the HC held they had satisfactorily diluted the twin conditions u/s 45 of the PMLA, 2002. The petitioners were directed to be released on bail on executing bonds with conditions imposed to allay apprehensions of fleeing justice.
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SEBI

• Important Aspects of SEBI's Cyber Resilience Framework Compliance Extension till 2025.

  Circulars : SEBI provided regulatory forbearance till March 31, 2025 for compliance with Cybersecurity and Cyber Resilience Framework (CSCRF), allowing REs to demonstrate progress without facing regulatory action. Compliance timelines were extended to April 1, 2025 for KRAs and DPs. Provisions on data localization were kept in abeyance pending further consultations.
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• New SEBI Framework Allows Passive Fund Launch with Relaxed Norms, Sponsor Lock-In for MF Lite AMCs.

  Circulars : SEBI introduced a new framework for Mutual Fund Lite (MF Lite) schemes, allowing launch of passive funds tracking specified equity and debt indices. Key provisions include sponsor lock-in, networth and compliance requirements for MF Lite AMCs. Existing AMCs can hive off passive schemes to a separate MF Lite entity. Simplified disclosures, reduced trustee oversight, and relaxations in certain norms are permitted for passive schemes. Hybrid passive funds investing in equity and debt indices, close-ended debt passive funds based on target maturity indices, and disclosure of debt index replication factor are also introduced.
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• Exemption from Trading Restrictions for Non-Convertible Securities Issuance under SEBI Framework.

  Circulars : Trading window restrictions shall not apply to subscription to the issue of non-convertible securities carried out in accordance with SEBI framework, in addition to transactions specified in Clause 4(3)(b) of Schedule B read with Regulation 9 of SEBI (PIT) Regulations, 2015 and SEBI Circular SEBI/HO/ISD/ISD/CIR/P/2020/133 dated July 23, 2020.
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• Insiders Not Liable for Trades Without Access to Price-Sensitive Info on Stock Split.

  Case-Laws - AT : The AT held that stock split is a price sensitive information as it is likely to impact the price of securities. The UPSI period commenced from March 20, 2017 when the discussion specifically included analysis of stock split for IAL. However, the appellants cannot be considered insiders merely because they subscribed to IAL's pre-IPO preferential allotment. There was no evidence that appellants had access to or possessed UPSI when trading in IAL's scrip. Hence, the appeal was allowed.
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Service Tax

• Taxpayer Entitled to Refund of Over Rs. 1 Crore Unutilized Cenvat Credit Despite Procedural Lapse; CGST Provisions Override Excise Act.

  Case-Laws - AT : Appellant eligible for refund of Rs. 1,11,37,766/- unutilized Cenvat credit u/s 142(3) CGST Act despite inadvertent non-carry forward to TRAN-1. Procedural lapses cannot defeat substantive rights; specific CGST provisions override general Excise Act provisions. Interest payable on delayed refunds u/s 11BB Excise Act. Appeal allowed by CESTAT.
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Case Laws:

• GST

• 2025 (1) TMI 55
  Seeking grant of bail - illegal claim of refund of accumulated ITC on account of trade/supply of goods - obtained GST Registration on fictitious documents and has never conducted any business activity from the registered premises - it was held by High Court that 'The detention of the applicant in jail is not required. The applicant is not involved in a heinous crime like murder or terrorism. The basic rule is, bail is rule and jail is exception . The allegations of serious financial impropriety are levelled against the applicant.' HELD THAT:- It is not inclined to interfere with the impugned judgment granting bail and, hence, the present special leave petition is dismissed.

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• 2025 (1) TMI 54
  Challenge to order u/s 73 of the Goods and Service Tax Act, 2017 - valid communication of notice or not - petitioner being unaware of issuance of the notices as well as passing of the orders, could neither appear before the authority nor question the validity of the impugned orders within the period of limitation - HELD THAT:- In the case of OLA FLEET TECHNOLOGIES PRIVATE LIMITED VERSUS STATE OF UP AND 2 OTHERS [ 2024 (7) TMI 1543 - ALLAHABAD HIGH COURT] a coordinate Bench of this Court inter alia observed ' it does appear that the petitioner is entitled to a benefit of doubt. No material exist to reject the contention being advanced that the impugned order was not reflecting under the tab view notices and orders . On merits, as noted in the earlier orders an other dispute exists whether all replies and annexures to the replies as filed by the assessee were displayed to the assessing officer and whether those have been considered.' Conclusion - Proper communication of notices is essential for the validity of tax demands. Incorrect placement of notices on the GST portal does not constitute valid communication. The order impugned dated 23.07.2024 passed by the Deputy Commissioner, State Tax, Division-7, Prayagraj (Annexure-1 to the writ petition) is quashed and set aside - petition allowed.

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• 2025 (1) TMI 53
  Cancellation of the petitioner's registration with retrospective effect from 28 December 2018 - HELD THAT:- The petitioner is permitted to approach the competent authority of the respondents for the grant of registration afresh. Any such application that may be made, shall be disposed of in accordance with law and bearing in mind the provisions of the Circular dated 28 March 2019 issued by the Central Board of Indirect Taxes and Customs. Petition disposed off.

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• 2025 (1) TMI 52
  Rejection of refund claim - Failure of respondents to file a reply despite granted extensions - HELD THAT:- The petitioner is stated to have applied for refund for the period April 2018 to March 2019 in terms of two applications dated 04 July 2019 and 09 July 2019. Two deficiency memos came to be issued by the respondents while considering the aforesaid applications. It is the case of the writ petitioner that the aforesaid deficiency memos were duly attended to and all material duly supplied. Since the refund was not released even thereafter, the petitioner is stated to have approached the respondents by way of representations dated 13 February 2020 and 27 February 2020. In light of the continued inaction of the respondents, the petitioner had approached this Court in G.S. INDUSTRIES VERSUS PRINCIPAL COMMISSIONER OF CENTRAL GOODS SERVICES TAX ORS. [ 2020 (11) TMI 1126 - DELHI HIGH COURT] and which came to be disposed of on 24 November 2020, with the direction that the claim of the petitioner be duly processed and a decision taken thereon within a period of three weeks. Whether it would have been permissible at all for the Commissioner to question the validity of the order dated 09 June 2023 in purported exercise of powers conferred under Section 107 (2) of the Act? - HELD THAT:- The Commissioner, while seeking to review an order passed under the Act and in purported exercise of powers vested by Section 107 (2), cannot possibly sit over and above an order passed by the appellate authority - It clearly does not contemplate the Commissioner seeking to even attempt to review an order passed by the appellate authority. The power so wielded by the Commissioner with reference to Section 107 (2) is rendered further unsustainable when viewed in light of the observations which appear in our earlier order of 28 March 2024 - the impugned order cannot possibly sustain. Petition allowed.

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• 2025 (1) TMI 51
  Cancellation of the alleged demand of GST - de-freezing of bank accounts - It appears to have been alleged that the transactions which formed the basis for the creation of the demand under that enactment are not concerning the writ petitioner at all - HELD THAT:- Admittedly, a final order referable to Section 74 of the CGST Act had come to be passed against the writ petitioner in 2019. The petitioner has not adopted any steps to assail that order in accordance with law. In fact, the original order under Section 74 does not even form subject matter of challenge in the instant proceedings. The freeze, as the Court correctly noticed in the earlier order, was thus referable to Section 79(1)(c) as opposed to Section 83, with the latter being confined to a provisional attachment. There are no justification to grant the reliefs as are prayed for in the instant writ petition, it is deemed appropriate to accord liberty to the writ petitioner to adopt such appropriate remedies as may be permissible in law. It shall further be open for the writ petitioner to raise all grounds including that of identity theft in any proceedings that may be instituted. Petiotion disposed off.

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• 2025 (1) TMI 50
  Rejection of refund claim of the petitioner on the ground of limitation - mismatch between the figures of ITC relatable to integrated tax paid on imports, which was auto populated in Form of GSTR-2A and monthly returns filed in Form GSTR-3B returns - HELD THAT:- It is not in dispute that the petitioner deposited amount of Rs. 40,00,000/- by mistake on 20.11.2020 voluntarily which was neither towards any tax, interest or penalty. The similar issue came up for consideration before this Court in case of M/s. Joshi Technologies International [ 2016 (6) TMI 773 - GUJARAT HIGH COURT ] as well as in case of M/S. GUJARAT STATE POLICE HOUSING CORPORATION LTD. VERSUS UNION OF INDIA ANR. [ 2024 (1) TMI 1409 - GUJARAT HIGH COURT] , wherein it is held by this Court that ' the amount of GST paid by the petitioner is admittedly paid as a self assessment, which the petitioner was not required to pay as per the Notification No. 32/2017. Accordingly, in the facts of the case, the amount paid by the petitioner from electronic cash ledger is required to be refunded by the respondent authority and could not have been rejected on the ground of limitation under Section 54 (1) of the CGST Act.' In view of above analysis made in the aforesaid judgment which is squarely applicable to the facts of the case, more particularly when the petitioner has deposited voluntarily the amount of Rs. 40,00,000/-, the same would not be covered by the provisions of Section 54 of the GST Act and the same is required to be refunded by the respondent authorities as the same could not have been rejected on the ground of limitation under Section 54 (1) of the GST Act. However, the petitioner will not be entitled to any interest on such amount as the same was deposited voluntarily by mistake and therefore, the respondents to refund the amount of Rs. 40,00,000/- deposited by the petitioner. The impugned order dated 14. 6. 2024 passed by the respondent No. 2 rejecting the refund application of the petitioner is hereby quashed and set aside - petition allowed.

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• 2025 (1) TMI 49
  Refund under the provisions of the SGST/CGST Act - interest on the refund amount from the date immediately after the expiry of sixty days from the date of receipt of the application in FORM RFD-01 - HELD THAT:- The writ petition is disposed off by providing the competent authority of the respondents to examine the pending refund application and dispose of the same in accordance with law. The respondents shall also take into consideration the additional documentation that has been provided by the writ petitioner and has been filed in these proceedings. Petition disposed off.

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• 2025 (1) TMI 48
  Cancellation of registration of the writ petitioner with retrospective effect from 08 October 2022 - HELD THAT:- In the absence of any material having been relied upon which may have even remotely tended to indicate that the registration had been obtained by fraud, wilful mis-statement or suppression of facts, the order impugned cannot be sustained. The impugned order dated 09 July 2024 as well as the impugned Show Cause Notice dated 20 June 2024 quashed - petition allowed.

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• 2025 (1) TMI 47
  Denial of input tax credit in terms of the provisions contained in Section 16 (2) (c) of the Central Goods and Services Tax/State Goods and Services Tax Acts, 2017 - HELD THAT:- One opportunity can be granted to the petitioner to prove its claim in terms of the Circulars referred to in paragraph No.101 of the judgment of this Court in M. Trade Links [ 2024 (6) TMI 288 - KERALA HIGH COURT] before the competent authority. This writ petition will stand allowed by setting aside Exts. P2 and P3 orders to the extent it denies input tax credit on account of the provisions contained in Section 16 (2) (c) of the CGST/SGST Acts and directing that the claim of the petitioner shall be considered in terms of the Circulars referred to in paragraph No. 101 of the judgment of this Court in M. Trade Links after affording an opportunity of hearing to an authorised representative of the petitioner.

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• 2025 (1) TMI 46
  Inaction of the municipal authorities in YSR Kadapa District who had granted permission to respondent No.6 to occupy the Annie Besant Municipal High School ground for a period of 45 days for holding the Dussehra and Navaratri exhibition in not recovering the amount due as per the agreed terms - HELD THAT:- It is stated that considering the history of respondent No.6 inasmuch as he was not a defaulter in the past of any of the municipal dues, on his request, relaxation for payment of the balance amount had been granted by the authorities in his favour. This is not a fit case where the proceedings should be permitted to continue. Petition dismissed.

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• 2025 (1) TMI 45
  Deductions made from the petitioner's 2nd and 3rd running bills under the Central Goods and Services Tax Act, 2017 (CGST Act) and the Assam Goods and Services Tax Act, 2017 (SGST Act) - validity of Circular No. 3/2017-GST - HELD THAT:- This Court finds that the present writ petition has become infructuous, inasmuch as, there was no infirmity with the application of the CGST and SGST by the State respondents, while making deductions against the 2nd and 3rd running bills of the petitioner. It is needless to add that if the petitioner is of the view that he is entitled to some concession as per law, there is no bar for the petitioner to submit a representation to that effect. The writ petition is accordingly dismissed as infructuous.

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• 2025 (1) TMI 44
  Challenge to vires of Section 16(4) of the GST Act, 2017 - ITC refund claimed by the petitioner for a period from January, 2020 to March, 2020 rejected on the ground that the petitioner availed the Input Tax Credit (ITC) wrongly in contravention to Section 16 (4) of the CGST Act, 2017, read with Section 20 of the IGST Act, 2017, and the applicable Arunachal Pradesh GST Act, 2017 - HELD THAT:- Considering the amendment brought in Section 16 of the Central Goods and Services Tax Act, 2017, by inserting Sub-Section (5), the impugned order in original dated 15.02.2022 is hereby set aside without adjudicating the said orders on merit. Petition disposed off.

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• 2025 (1) TMI 43
  Rejection of application for rectification of error apparent on the face of record under Section 161 of the GST Act - mismatch between GSTR-3B and GSTR-2A and between GSTR-3B and GSTR-7 - HELD THAT:- The petitioner has filed an application for rectification under Section 161 of the Act on the premise, that the impugned order dated 25.04.2024, insofar as it levies tax on the very same discrepancies between GSTR-7 and GSTR-3B, which had been dropped on two earlier occasions, suffers from error apparent on the face of record. However, the same was rejected vide order dated 18.07.2024 on the premise that the circumstances do not warrant exercise of power under Section 161 of the Act, inasmuch as the petitioner had not replied to the notices issued before the assessment was made. Conclusion - The principles of procedural fairness and the necessity of providing parties with an opportunity to respond to allegations or discrepancies before final orders are made. The petitioner may treat the impugned order as a show cause notice and submit its objections within a period of two (2) weeks from the date of receipt of a copy of this order along with supporting documents/material. Petition closed.

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• Income Tax

• 2025 (1) TMI 42
  Disallowance of expenses - finding of the High Court in the impugned judgment is that the appellant assessee, except for producing resolution adopted by the Board, did not produce any material in support of the claim for expenses - HELD THAT:- We concur with the view taken by the High Court that apart from resolution of the Board, no other material was placed on record in support of the claim for deduction. Accordingly, we decline to interfere with the impugned judgment. However, we make it clear that the view taken by the High Court in the impugned judgment will remain confined to the Assessment Years 1990-1991, 1991-1992 and 1992-1993 - Assessee appeal dismissed.

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• 2025 (1) TMI 41
  Broken period interest paid on purchase of securities - As decided by HC [ 2023 (6) TMI 1461 - TELANGANA HIGH COURT] respondent had purchased securities to hold them as stock-in-trade. Therefore, interest paid on such securities would be an allowable deduction - HELD THAT:- The issue involved in this Special Leave Petition is squarely covered by a decision of this Court dated 16th October, 2024 rendered in Bank of Rajasthan Ltd. [ 2024 (10) TMI 875 - SUPREME COURT] In view of the aforesaid decision, the Special Leave Petition is, accordingly, dismissed.

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• 2025 (1) TMI 40
  Maintainability of writ petition against order of Assessment in violation of the principles of natural justice - invoking extraordinary writ jurisdiction vested in this under Article 226 of the Constitution of India - availability of alternative remedy - HELD THAT:- In the instant case, it is the case of the petitioner that the impugned order of Assessment is in violation of the principles of natural justice. We have enquired into this aspect of the matter and as noted above, the notices had been duly served upon Sh. Sahil Mahajan, the legal heir of Late Sneh Gupta, who was well represented before the Assessing Authority. The instant case does not fall under any of the exceptions enumerated hereinabove. The order impugned is passed by the Assessing Authority having jurisdiction in the matter and that there is no apparent violation of the principles of natural justice. Needless to say that no provision of Income Tax Act is under challenge in this petition. We are not inclined to entertain this petition and instead relegate the petitioner to the remedy of appeal before the Appellate Authority, in case, he wishes to challenge the impugned order of assessment. The petition is, therefore, dismissed with liberty to the petitioner to avail the remedy of appeal provided under the Income Tax Act.

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• 2025 (1) TMI 39
  Disallowance u/s 14A r.w.r.8D - expenses incurred to the extent relatable to the earned income of taxable income - HELD THAT:- As decided in M/s. Quest Global Engineering Services Pvt. Ltd.,[ 2021 (3) TMI 434 - KARNATAKA HIGH COURT] since no exempt income has accrued to the assessee therefore, the provisions of Section 14A of the Act do not apply to the fact situation of the case. Those cases where shares are held as 'stock-in-trade', it becomes a business activity of the assessee to the deal in those shares as a business proposition. Whether dividend is earned or not becomes immaterial. In fact, it would be a quirk of fate that when the investee company declared dividend, those shares are held by the assessee, though the assessee has to ultimately trade those shares by selling them to earn profits. The situation here is therefore, different from the case like Maxopp Investment Ltd. where the assessee would continue to hold those shares as it wants to retain control over the investee company. In that case, whenever dividend is declared by the investee company that would necessarily be earned by the assessee and the assessee alone. Therefore, even that the time of investing into those shares, the assessee knows that it may generate dividend income as well and as and when such dividend income is generated that would be earned by the assessee. In contrast, where the shares are held as stock-in-trade, this may not be necessarily a situation. The main purpose is to liquidate those shares whenever the share price goes upon order to earn profits - Decided against revenue.

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• 2025 (1) TMI 38
  Maintainability of writ petition against reassessment proceedings - HELD THAT:- The change of opinion is to be verified from the records regarding the assessment which has been made on earlier occasion is proper one, or the subsequent assessment is the proper one. If such a situation is there, then the same is to be deliberated upon by the authority by going through the documents available on record and on consideration of the rival submissions advanced on behalf of the parties, meaning thereby, the same pertains to the adjudication of fact. Also while considering the change in opinion, the order must not be non-speaking and based upon non-speaking order, there cannot be any consideration of the fact that the assessment is based upon the change in opinion. This Court in order to consider the said aspect has gone through the order impugned and found therefrom that the order is not cryptic, rather it is a detailed order basis upon the documents which were assessed/scrutinized by the Assessing Officer and basis upon the same, the assessment order was made, but when subsequently it was found that the disclosure of the documents needs to be statement in the income tax which is also based upon the material document which led the revenue to issue notice. It is, thus, evident from the impugned order that the said order is not a cryptic one, rather it is a detailed order on consideration of the rival submissions of the parties based upon the appreciation of the documents. This Court is of the view that in such a factual aspect where the assessment order is being disputed by the petitioner on fact, then it will not be proper for this Court to exercise its extraordinary jurisdiction conferred under Article 226 of the Constitution of India in a situation where the effective alternative remedy of appeal is available under Section 246A of the Income Tax Act, 1961. However, it is left open for the petitioner to avail the alternative remedy as provided under Section 246A of the Income Tax Act, 1961.

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• 2025 (1) TMI 37
  Condonation of delay filling appeal - delay of 38 days in filing the appeal by the assessee before CIT(A) - eligible reasons for delay - HELD THAT:- Before us the assessee has submitted a detailed affidavit of the chartered accountant of the assessee wherein the complete delay has been explained. It is not the case that the chartered accountant did not act. It is the case where the chartered accountant has under mistaken belief filed a reply on the online portal. The explanation of the chartered accountant clearly shows that that an email was received from the accountant of the company on 13 November 2022 along with the screenshot of the adjustment made. As the chartered accountant was busy for filing income tax returns for his overseas clients which prevented him from paying close attention to the nature of the proceedings and he presumed that the company received a communication under the Act, and he filed a response on 13 November 2022 itself on the online portal. It is not the case of the carelessness on behalf of the assessee or its chartered accountant, but merely a case of misapprehension. It is also correct that in form number 35 the assessee has given a cryptic answer for delay. The explanation of the assessee is that there is no space available for filing a condonation of delay at that particular column. In this case the delay is small and not inordinate. Nobody gains by filing an appeal late when substantial demand has arisen against him. We find that the CIT A has taken a very pedantic approach in considering the delay caused in filing of the appeal which is nominal. We find that now because of the affidavit of the chartered accountant filed before us, there is a sufficient cause of delay in filing of appeal by 38 days.

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• 2025 (1) TMI 36
  Disallowance of prior period expenses, contributions to pension and gratuity funds, and the treatment of upfront lease premium assessee's income is exempt u/s 11 and 12 - HELD THAT:- Additions and disallowances made by the AO and confirmed by the CIT(A) are not sustainable, particularly in view of the settled position regarding the assessee s entitlement to exemption u/s 11 and 12 of the Act. Consequently, all additions, disallowances, and consequential levies are deleted, and the grounds of appeals in AYs 2006-07 2007-08 filed by the assessee are allowed.

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• 2025 (1) TMI 35
  Revision u/s 263 - valuation of shares and the premium charged - PCIT noted that AO while passing the scrutiny assessment order rejected the valuation report submitted by the merchant banker and adopted fair value of shares at face value of Rs. 10 per share thereby brought excess share premium to tax - HELD THAT:- While making an assessment, the assessing officer has varied role to play. He is the investigator, prosecutor as well as adjudicator. As an adjudicator he is an arbitrator between the revenue and the taxpayer and he has to be fair to both. His duty to act fairly requires that when he enquires into a substantial matter like the present one, he must record a finding on the relevant issue giving, his reasons therefore, which is absent in the present facts of the case. Merely by passing an order sheet entry, the Ld.AO accepted the value as per the valuation report to be the market value and admits that no further enquiry has been made. It is settled law that while making assessment on assessee, the ITO acts in a quasi-judicial capacity. An assessment order is amenable to appeal by the assessee and to revision by the Commissioner under Sections 263 and 264. Therefore, a reasoned order on a substantial issue is legally necessary. In the present facts of the case, the order passed by the Ld.AO, therefore becomes erroneous because enquiry has not been made regarding the share valuation report based on which the assessee determined the share value at premium. It was incumbent on him to verify by making necessary enquiries, more so when in the immediately preceeding assessment year in assessee s own case the valuation report by the merchant banker was rejected on similar facts. Thus, we hold that provision of section 263 has been rightly invoked - Decided against assessee.

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• 2025 (1) TMI 34
  Addition of income having received amount in cash - reliance on notings and the paper so seized in search - evidentiary value of documents so found - HELD THAT:- It has not been established that the assessee actually received the said sum and further when the entire balance, as mentioned in the impugned document, is duly accounted for in the books of accounts of the assessee and the entire sales having been duly recorded in the books of accounts and no sales have been found to have been made outside the books and no other evidence having been established to prove the assessee having actually received the said sum. It is excruciating to note that the addition of ₹ 2.5 crore has been made without any charging provision so as to fall within the four squares of law. Nothing can be more painful to note that such order has passed the muster of section 153 of the Act. AO grossly erred in making the addition and which was wrongly confirmed by the learned CIT(A). Decided in favour of assessee.

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• 2025 (1) TMI 33
  Undisclosed income - difference of income voluntarily offered for taxation during the survey and income declared in the return of income - HELD THAT:- Assessee has been able to demonstrate its case for declaring the income below than the disclosure made by one of the directors in the survey operation u/s 133A of the Act and even otherwise the Hon ble Co-ordinate Bench of the Tribunal in the case referred to above pertaining to AY 2017-18 [ 2023 (1) TMI 757 - ITAT MUMBAI] has analyzed the identical facts and circumstances as involved in the instant case and by giving clear cut finding approved the Assessee s income as declared, hence, the addition under consideration is liable to be deleted, thus the same is deleted. Assessee appeal allowed.

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• 2025 (1) TMI 32
  Revision u/s 263 - AO failed to make sufficient inquiries and without application of mind passed reassessment order relating to the income from house property accrued to the appellant company on unsold inventories - Whether the AO's failure to make an addition for the deemed annual letting value of unsold inventories constitutes an error that is prejudicial to the interest of revenue. ? - HELD THAT:- Order of the AO is very cryptic and no inquiries/verification were made even though assessment was reopened for that very specific purpose. The Ld. PCIT has issued a show cause notice with a specific purpose as to leaving tax on unsold inventories of Rs. 54.26 crores when the project was 100% complete. Bench agrees with the view of PCIT who relied on the judicial precedent laid down in the case of Ansal Housing Financial and Leasing Company Ltd. [ 2012 (11) TMI 323 - DELHI HIGH COURT] and Emtci Engineering Ltd. [ 1996 (4) TMI 145 - ITAT AHMEDABAD-C] where it was specifically held that the income from house property has to be offered for tax purpose on the unsold inventories. We further draw our inference by placing reliance on the decision Gundecha Builders [ 2019 (1) TMI 112 - BOMBAY HIGH COURT] and CIT Vs. Sane Doshi Enterprises [ 2015 (4) TMI 882 - BOMBAY HIGH COURT] where it was held that the income from unsold inventories of a building should be offered under the head income from house property . Similar view was taken by in the case of DCIT Vs. M/s. Inorbit Malls P. Ltd. [ 2022 (10) TMI 1150 - ITAT MUMBAI] in which reliance was placed on the decision of Ansal Housing Finance Leasing Company Ltd. [ 2012 (11) TMI 323 - DELHI HIGH COURT] where it was held that the vacant units in the possession of the appellant are liable to be charged as notional rental income under the head income from house property on the basis of their annual letting value. The rental income should be offered on notional basis as per the statute. This order of the coordinate Bench was very exhaustive and binding in nature as it dealt with all cases relating to the core issue. AO committed an error of not making the addition of notional annual letting value on vacant units of building, for which the assessment was reopened. This error caused prejudice to the interest of Revenue by not taxing the amount as mentioned above. Thus, the twin conditions of error and prejudice to the interest of Revenue were fulfilled - Decided against assessee.

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• 2025 (1) TMI 31
  Denial of deduction u/s 80IA(4) - audit report in Form-10CCB was filed belatedly i.e., not along with the return of income - HELD THAT:- We find the Kolkata Bench of the Tribunal in the case of Tarasafe International (P.) Ltd [ 2024 (10) TMI 363 - ITAT KOLKATA] after considering the decision of Wipro Ltd.,[ 2022 (7) TMI 560 - SUPREME COURT] has held that when the audit report is filed before the final order of assessment, the assessee was entitled to claim deduction under section 80JJAA. Since the assessee in the instant case has admittedly filed the audit report in Form-10CCB prior to the processing of the return, therefore, assessee cannot be denied deduction u/sec.80IA(4) - Assessee appeal allowed.

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• 2025 (1) TMI 30
  Revision u/s 263 - As per CIT allowance of deduction u/s 36(1)(viia) passed by the AO is erroneous and prejudicial to the interest of Revenue - HELD THAT:- As undisputed fact that the issue on which the PCIT has invoked jurisdiction u/s 263 has already been decided by the Tribunal in assessee s own case in its favour. Merely because the department has not accepted the decision of the Tribunal and has filed an appeal before the Hon ble High Court, therefore, in our opinion, the order of the AO cannot be held as erroneous. In our opinion, it may be prejudicial to the interests of the Revenue but certainly not erroneous. As decided in the case of Malabar Industrial Co Ltd. [ 2000 (2) TMI 10 - SUPREME COURT ] has held that in order to invoke the jurisdiction u/s 263 the twin conditions must be satisfied i.e. the order must be erroneous and the order must be prejudicial to the interests of the Revenue. In the instant case, the Tribunal has already decided the issue in favour of the assessee though it has not been accepted by the Revenue and the appeal is pending before the Hon ble High Court and since the AO on the basis of submissions made by the assessee and relying on the decision of the Tribunal in assessee s own case has not made any addition / disallowance, therefore, the order of the AO in our opinion cannot be held to be erroneous - Decided in favour of assessee.

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• 2025 (1) TMI 29
  Deduction u/s 54F - as per AO assessee has diverted the money to the family concern without purchase of any residential house and the entire transaction for claiming exemption u/s 54F is manipulated and doctored - actual sale deed has not been entered into within the specified period and such an MoU has been entered into with a concern where the assessee and the family members are shareholders. HELD THAT:- We find as in the case of CIT vs. Smt. B.S. Shantakumari [ 2015 (8) TMI 274 - KARNATAKA HIGH COURT] has held that once it is established by the assessee that she had invested entire net consideration in construction of residential house within stipulated period, it would meet requirement of section 54F and she would be entitled to get benefit of section 54F even if the construction was not completed within a period of three years. We find in the case of Lalitkumar Kesarimal Jain [ 2019 (9) TMI 1138 - ITAT PUNE ] has held that mere fact that assessee was one of associated parties in said concern which was developing housing project, could not be a ground to deny benefit of deduction u/s 54F. Hon'ble Supreme Court in the case of Fibre Boards (P) Ltd. [ 2015 (8) TMI 482 - SUPREME COURT ] has held that advances paid for purpose of purchase and / or acquisition of plant / machinery, and land / building amount to utilization by assessee of capital gains under section 54G Thus, considering the fact that the assessee has admittedly entered into MoU and paid an amount of Rs. 10.60 crores to M/s. Kumar Housing Corporation, which finds mention in the sale deed executed subsequently, therefore, merely because the assessee and his family members are the shareholders in KUD and that the sale deed has been executed after a period of two years, the assessee in our opinion cannot be denied the benefit of deduction u/s 54F of the Act - Decided in favour of assessee.

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• 2025 (1) TMI 28
  Reopening assessment u/s 147 - reason to believe - cash deposits in the undisclosed bank account - HELD THAT:-Whether material would conclusively prove escapement of income is not the concern at that stage. Requirement is that there should be prima facie reason at the stage of reopening. The sufficiency or correctness of the reason cannot be examined at the threshold. In the present case, the assessee has not disclosed his SB bank account with Bank of Baroda in his return of income. On the other hand, he had deposited cash of Rs. 13,20,535/-. Hence, there was prima facie reason to reopen the case. Reopening is upheld and ground No.1 is dismissed. Addition of entire amount of cash deposited in the undisclosed bank account of the assessee - There is nothing on record to suggest that assessee was carrying on any business other than the business of wholesale purchase and sale of vegetables. Therefore, the logical conclusion would be that either he was carrying out the same business a part of which was not disclosed to the Department. It is also possible that part of the profit of his disclosed business was diverted and the amounts were deposited in the SB account. However, it is seen that the appellant has also made multiple withdrawals of almost the same amounts during the year. In absence of any evidence, it cannot be ascertained whether the amounts withdrawn were used for purchase of vegetables or were used for personal expenses or investments. Hence, a reasonable estimate of cash deposit may be considered as income of the assessee. In our view, it will be fair and reasonable if 25% of the cash deposit of is taken as the income of assessee. Estimation of profit @ 8% by the CIT(A) in lieu of profit @ 35% by the AO on the turnover - Appellant has not disclosed all credit entries even of his disclosed bank account. The appellant has not brought anything on record to show that the nature of the other credit entries are different from sales made by assessee and they are not tenable. Hence, the total credit entries are held to be sales of the assessee during the year. As assessee himself has shown profit @ 8% of the turnover in his ROI. Hence, we do not find any reason, to adopt a profit rate lower than the rate adopted by appellant. Therefore, the decision of CIT(A) in estimating income @ 8% is upheld. Penalty u/s 271B - failure to get his accounts audited on or before due date - HELD THAT:- Hon ble Supreme Court in case of Wipro Ltd. [ 2022 (7) TMI 560 - SUPREME COURT ] has held that the twin conditions of furnishing a declaration before the AO and that too before due date of filing original return u/s 139(1) are to be satisfied and both are mandatorily to be complied with. Hence, we agree with the CIT(A) that filing of audit report is mandatory and only exception for non-compliance is to establish with documentary evidence a reasonable cause . The assessee has not been able to establish any reasonable cause for failure to get accounts audited. In fact, he had estimated profit @ 8% on turnover of Rs. 32,34,156/- though the actual turnover was Rs. 89,63,222/-. No reasons are given as to why such a lower turnover was shown by the assessee. Hence, the accounts were not audited by showing turnover below limit prescribed u/s 44AB of the Act but assessee is taking the plea that he was not aware of the provisions of section 44AB of the Act. In view of the above facts the ground is dismissed.

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• 2025 (1) TMI 27
  Accrual of income in India or not? - royalty income - whether interconnect service charges paid by Vodafone and Bharti Airtel are chargeable to tax in India as per the Income-tax Act or DTAA? - HELD THAT:- As held so in series of judgements such as M/S Belgacom International Carrier Services SA Belgium [ 2024 (9) TMI 1675 - KARNATAKA HIGH COURT] , M/s. M.I. Limited [ 2024 (9) TMI 1677 - KARNATAKA HIGH COURT] , M/s. Maxis International Sdn Bhd.[ 2024 (9) TMI 1676 - KARNATAKA HIGH COURT] and Emirates Telecommunications group company, etc.[ 2024 (9) TMI 1678 - KARNATAKA HIGH COURT] that Interconnect charges are not royalty. In case of assessee, on identical facts and circumstances, Coordinate Benches have also held so. Therefore respectfully following all those decisions, we do not find any infirmity in the order of ld. CIT(A) in holding that interconnect charges cannot be taxed as royalty. Decided in favour of assessee.

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• 2025 (1) TMI 26
  Revision u/s 263 - as per CIT AO has erred in under assessing the income by allowing excess deduction u/s 57 - HELD THAT:- As is evident from the record that the assessee has made elaborate submissions on this issue and the AO has satisfied himself that assessee is eligible to claim deduction u/s. 57 of the Act. Therefore, we are of the considered view that on the very same issue ld. PCIT cannot form another view of that of the ld. Assessing Officer wherein he has after making a detailed enquiry also disallowed the claim of the assessee. As in the case of Narayan Tatu Rane Vs. ITO [ 2016 (5) TMI 1162 - ITAT MUMBAI ] it was held that newly inserted Explanation 2(a) to Sec. 263 does not authorize or give unfettered powers to Commissioner to revise each and every order, if in his (subjective) opinion, same has been passed without making enquiries or verification which should have been made. Thus, it is not at all a case where the subjected assessment order dt. 13.04.2021 should be alleged to be erroneous in so far as prejudicial to the interests of the revenue. There is neither error of law nor of facts. There is no erroneous assumption by the AO of either the facts or of law, as alleged by the ld. PCIT. Assessee appeal allowed.

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• 2025 (1) TMI 25
  Addition u/s. 69C - unexplained expenditure - Addition based on seized material corroborated by the statement of Director of the assessee - CIT(A) deleted addition - HELD THAT:- CIT(A) has discussed this issue at length and gave clear finding of fact that seized material is devoid of any evidence regarding alleged payment of trade payables due of Shri Paranthaman concerns outside books of accounts. We noted that although there is statement of Shri A.N.Boopathy, but this is a rebuttable statement and the assessee has led evidence in the shape of books of account which clearly reflects the trade payables as outstanding and moreover, seized materials confirms that. The contention of the Revenue that it is natural that name of Shri Paranthaman concerns did not figure in loose sheets since it is the list of actual sundry creditors as on 31.03.2018 and they did not figure in loose sheet no.11, 12 and 13, since they contain names of fictitious creditors as stated by Shri A.N.Boopathy is not at all relevant. We noted that there are contradictions and logical flaws in his statement as brought out by the CIT(A) and as noted by the CIT(A). The fact that Shri A.N.Boopathy considered loose sheet No.12 as the list of actual creditors as on 31.03.2017 which is supposed to include in trade payables of Paranthaman concerns also, is discussed and analyzed by the CIT(A). It is fact that once quantum of actual sundry creditors as on 31.03.2017 was disposed off by the CIT(A) based on loose sheet, particularly loose sheet no.12, the claim of the AO in the same breath that loose sheet no.11,12 13 contained the name of fictitious creditors introduced in place of Paranthaman concerns fails. We noted that seized loose sheet contained print out of group summary of sundry creditors which do not contain the complete list of sundry creditors as per the books of account and they contained partial list taken for the purpose of reconciliation in the process of finalization of accounts. Thus, difference in the amount of sundry creditors as on 31.03.2018 was explained by Shri A.N.Bhoopathy as mentioned in the seized loose sheets in his statement as payment made to Shri Paranthaman concerns outside the books of accounts. Hence, as per books of account, the assessee has clearly established by evidences that trade creditors payable of Rs. 4.00 crores to Shri Paranthaman concerns was outstanding and clearly allowable and not outside the books of accounts or cash. Hence, we confirm the order of the CIT(A) deleting the addition. Appeal of the Revenue is dismissed.

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• Customs

• 2025 (1) TMI 24
  Refusal to extend certain benefits claimed by it under the Merchandise Exports from India Scheme (MEIS) on goods exported - car seat covers manufactured by the petitioner fall under the Harmonized System (HS) Code 87089900 or not - HELD THAT:- In Mehra Brothers V. Joint Commercial Officer [ 1990 (11) TMI 144 - SUPREME COURT ], the Apex Court considered the question as to whether car seat covers are accessories to motor vehicles. After referring to the dictionary meaning of the term accessory , the Apex Court found that car seat covers or upholstery is accessories as an addition; an adjunct; an accompaniment for comfortable use of the motor vehicles or for elegance to the seat . The Court also noticed that the items concerned were being sold as automobile parts . Thus, with reference to the Sales Tax and Central Excise levies, the question was addressed, holding that even if the seat covers are being made up of textile fabric, in so far as they are used as an addition/accompaniment for the motor vehicle, they are accessories of the Motor vehicle/car seat. It is also noticed that the afore findings of the CEGAT were accepted by the Central Exercise Department, which is produced as Ext. P17. Similarly, the Director General of Foreign Trade has also accepted the afore classification as seen from Ext. P20. Likewise, Ext. P25 communication is issued by the 6th respondent, accepting the classification as seat covers as covered under 87089900 irrespective of whether made up of textile or not. Conclusion - The petitioner's products, which are exported are to be classified under serial No. 4558 having HS 8708990. The impugned orders/proceedings by which the benefit under the Scheme stood denied to the petitioner, would stand set aside. Petition allowed.

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• 2025 (1) TMI 23
  Refusal to the release of five consignments - consignments allegedly constituted firearms - HELD THAT:- In the opinion of the Court, the Petitioner is entitled to relief sought in the present writ petition. The relief sought in prayer, regarding the release of consignments stands granted through order dated 30th September, 2024, with certain conditions. However, since the Petitioner is entitled to succeed, the superdarinama is cancelled and the conditions imposed by the Court stand revoked. The Petitioner shall be entitled to deal with the said goods under the consignments, in accordance with law - The claim for compensation for demurrage is rejected. The present writ petition is disposed of along with pending applications.

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• 2025 (1) TMI 22
  Seeking issuance of a writ of mandamus directing the Respondent- Commissioner of Customs to re-export gold seized from the Petitioner s mother - Petitioner, as the legal heir of the deceased passenger, is entitled to redeem the confiscated goods, or not - applicability of limitation period for redeeming the goods under Section 125 of the Customs Act when the order was not duly communicated to the deceased passenger. Petitioner, as the legal heir of the deceased passenger, is entitled to redeem the confiscated goods under the Customs Act, 1962 or not - HELD THAT:- The passenger was a senior citizen of more than 70 years of age. The death certificate has been placed on record, which shows that she passed away on 11th December, 2023 in Uzbekistan itself. The Petitioner/daughter - Ms. Umida Karimova has placed a copy of her passport on record. The identity of the Petitioner and her relationship with late Ms. Sharipova is not being doubted by the Respondent. Considering that the goods in question are of substantial value and the passenger having expired, her heir/s i.e., her daughter cannot be deprived of the goods so long as the Order in Original dated 26th July, 2023 is complied with by the Petitioner. A pplicability of limitation period for redeeming the goods under Section 125 of the Customs Act - HELD THAT:- The limitation period under Section 125 would apply only when the option to redeem, given to the passenger, is duly communicated to the passenger. In the present case, admittedly, there is no evidence on record to show that the said order was duly communicated. Under such circumstances, the limitation period is not triggered and thus would not bar release of the goods in terms of the said order. Admittedly, the Customs Department did not verify the address that was available in the detention receipt or in the copy of the passport. In this regard, the Court is of the opinion that whenever such detentions of goods are made or seizures are effected, the department ought to consider taking the proper contact details including the postal address, email address and mobile number of the passenger concerned and add the same on the detention receipt. This would facilitate communication with the passenger in respect of further proceedings and the order passed, if any. Also, in view of the fact that the passenger has expired and there is no proof of service of the order passed by the Customs department, the demurrage charges shall stand waived. The present order shall not act as a precedent. Conclusion - The Petitioner is entitled to redeem the goods upon compliance with the original order. The limitation period under Section 125 did not commence due to lack of communication. Petition disposed off.

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• 2025 (1) TMI 21
  Non-compliance of provisions of mandatory pre-deposit Section 129(E) of Customs Act - Imposition of penalty on the petitioner under various provisions of the Customs Act, 1962 - HELD THAT:- The petitioner has exhausted its remedies against it grievance of its appeals not being entertained on the ground of not making the pre-deposit. The petitioner has also agitated his grievance in this regard before the Hon ble Allahabad High Court, albeit unsuccessfully. The petitioner is seeking to reagitate the issues before this Court. This is clearly a case of forum shopping and cannot be countenanced. Petition dismissed.

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• 2025 (1) TMI 20
  Abatement of appeals due to approval of Resolution Plan under IBC - request for adjournment due to the absence of counsel - HELD THAT:- On going through the Order of the Coordinate Bench M/S. TATA STEEL LIMITED ( [FORMERLY M/S. TATA STEEL BSL LTD) VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, BHUBANESWAR [ 2024 (4) TMI 1211 - CESTAT KOLKATA] , it is found that the Bench had recorded that the appellant company underwent CIRP in terms of IBC, which culminated into approval of Resolution Plan of Bhushan Steel Ltd by the Adjudicating Authority at NCLT, Principal Bench at New Delhi. They have also considered the relevant clauses of the Resolution Plan and the fact that both sides viz., the appellant as well as the Revenue have no qualms over the impugned appeals being abated and having been rendered infructuous, in view of the above said developments. The Order of the Coordinate Bench in respect of the same appellant for other appeals pending before the said bench has held that in the facts of the case, all those appeals abate. In addition, they have also gone through plethora of case laws, etc., keeping in view some of the other arguments concerning refund of pre-deposits, etc., and came to the conclusion that any order passed by the Tribunal beyond the vested power would ipso facto be non-est in law. Therefore, in view of the settled legal position, as clearly brought out in the Order of the Coordinate Bench dt.16.04.2024 and in view of Rule 22 and Rule 41 of the CESTAT (Procedure) Rule, 1982, these appeals would abate and after abatement of these appeals, the Tribunal would be rendered functus officio in the matters relating to these appeals and thus would not be able to decide any other issues connected with the said appeals. These appeals abate with effect from the date of approval of Resolution Plan by the NCLT vide its Order dt.15.05.2018 and are disposed of accordingly.

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• Corporate Laws

• 2025 (1) TMI 19
  Professional misconduct under Section 132(4) of the Companies Act, 2013 - Penalties and sanctions - HELD THAT:- There exists reasons to believe that the Auditors did not exercise due diligence in ensuring the audit quality expected in an audit of a public interest entity and were grossly negligent in the conduct of the professional duties by not adhering to the requirements as laid down by the relevant statutes. The Auditors' conclusion that they do not have reasons to believe that fraud is committed by the officers of the Company is not supported by sufficient appropriate audit evidence. The Auditors also failed to identify the persons comprising TCWG. The Auditors' failures in the audit, as mentioned in Paragraphs 16 to 70 above, amount to professional misconduct as per Section 132 (4) of the Companies Act, 2013. The charges of professional misconduct in the SCN are established based on the evidence in the Audit File, the audit reports on the financial statements for the FY 2018-19 and 2019-20, the submissions made by the Auditors, and the Annual Report of ZEEL for FY 2018-19 and 2019-20. Penalties and sanctions - HELD THAT:- Section 132 (4) of the Companies Act, 2013 provides for penalties in a case where professional misconduct is proved. The seriousness with which proved cases of professional misconduct are viewed is evident from the fact that a minimum punishment is laid down by the law. Because professional misconduct has been proved and considering the nature of violations and principles of proportionality and in view of the directions issued to the Audit Firm, in the exercise of powers under Section 132 (4) (c) of the Companies Act, 2013, it is ordered as under: a. Imposition of a monetary penalty of Rupees Two Crore upon M/s Deloitte Haskins Sells LLP. b. Imposition of a monetary penalty of Rupees Ten Lakhs upon CA A.B. Jani and in addition CA A.B. Jani is debarred for 5 years from being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate. c. Imposition of a monetary penalty of Rupees Five Lakhs upon CA Rakesh Sharma and in addition, CA Rakesh Sharma is debarred for 3 years from being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate. Conclusion - Auditors must exercise due diligence, maintain professional skepticism, and obtain sufficient audit evidence to support their opinions. Failure to do so constitutes professional misconduct.

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• 2025 (1) TMI 18
  Professional misconduct - Engagement Partner (EP) and Engagement Quality Control Reviewer (EQCR) failed to meet the requirements of the Standards on Auditing (SA) and provisions of the Companies Act 2013 during the audit of DB Realty Limited for the Financial Year 2015-16 - Section 132(4) of the Companies Act 2013 - Penalties and sanctions. HELD THAT:- The EP and the EQCR have made a series of serious departures from the Standards and the Law, in conduct of the audit of DBRL for FY 2015-16. Based on the above discussion, it is proved that they had failed to exercise due diligence in performance of this audit. Based on the foregoing discussion and analysis, it is concluded that the EP and the EQCR have committed Professional Misconduct as defined under Section 132 (4) of the Companies Act 2013 in terms of section 22 of the Chartered Accountants Act 1949 (CA Act) as amended from time to time, and as detailed below: a) The EP and the EQCR committed professional misconduct as defined by clause 7 of Part I of the Second Schedule of the CA Act, which states that a chartered accountant in practice is guilty of professional misconduct when he does not exercise due diligence or is grossly negligent in the conduct of his professional duties - This charge is proved as the EP and the EQCR failed to conduct the audit in accordance with the SAs and applicable regulations, failed to evaluate valuation reports and failed to perform engagement quality control review. b) The EP committed professional misconduct as defined by clause 8 of Part I of the Second Schedule of the CA Act, which states that a chartered accountant in practice is guilty of professional misconduct when he fails to obtain sufficient information which is necessary for expression of an opinion or its exceptions are sufficiently material to negate the expression of an opinion -This charge is proved as the EP failed to conduct the audit in accordance with the SAs. c) The EP committed professional misconduct as defined by clause 9 of Part I of the Second Schedule of the CA Act, which states that a chartered accountant in practice is guilty of professional misconduct when he fails to invite attention to any material departure from the generally accepted procedure of audit applicable to the circumstances - This charge is proved since the EP failed to conduct the audit in accordance with the SAs. Penalties and sanctions - HELD THAT:- Section 132(4) of the Companies Act, 2013 provides for penalties in a case where professional misconduct is proved. The seriousness with which proved cases of professional misconduct are viewed is evident from the fact that a minimum punishment is laid down by the law - Considering the proved professional misconduct and keeping in mind the nature of violations, principles of proportionality and deterrence against future professional misconduct, in exercise of powers under Section 132(4)(c) of the Companies Act, 2013, it is hereby ordered that imposition of a monetary penalty of Rs five lakhs. upon CA Chetan Desai; and Rs three lakhs upon CA Rakesh Rathi. In addition, they are debarred for a period of five years, and three years respectively from being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate. Conclusion - The EP and the EQCR failed to conduct the audit in accordance with the SAs and applicable regulations, failed to evaluate valuation reports and failed to perform engagement quality control review. Auditors must exercise due diligence, professional skepticism, and obtain sufficient audit evidence to support their audit opinions.

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• Securities / SEBI

• 2025 (1) TMI 17
  Persons/entities traded in the scrip of IAL while in possession of Unpublished Price Sensitive Information ( UPSI ) - higher price rise seen - contravention of provisions of Section 12A of the SEBI Act and PIT Regulations, 2015 - information of a stock split considered as Unpublished Price Sensitive Information (UPSI) or not? - - HELD THAT:- Splitting of stock per se is a Price sensitive information, since splitting of stock is an important decision for a company, (requiring approval of general body of shareholders under Section 61 of the companies Act, 2013), which is intended to improve the liquidity of stock and its affordability, which is likely to make an impact on price. In our considered view, splitting of shares results in shares of smaller face value, which makes the shares affordable, and thereby allows new sets of shareholders to come into picture with the resulting impact on demand and liquidity, that is likely to influence the price trends. Instances of three cases of stock split brought out by the respondent show that it resulted in price rise on the day of split, compared to the previous day. In our view the appellant s argument that there was insignificant price rise of 1.46% on BSE and of 1.25% on NSE on June 27, 2016 upon disclosure of the information compared to the previous trading day, is not relevant as it is the likelihood of materially affecting the price of the securities, which is the main factor to determine price sensitivity of information and not actual price rise. Lastly, in appellant s own admission, the information regarding stock split was UPSI, which in their view, came into existence on June 26, 2017 and was hence disclosed on the same date. If it were not a price sensitive information, there was no need to close the trading window. On which day UPSI commenced ? - It is evident that in the meeting held on November 22, 2016, the discussion was in the nature of a general briefing on the concept of stock split, without any specific reference to securities of IAL. Hence it cannot be held that the UPSI period started from November 22, 2016. Nevertheless, in subsequent one to one meeting between the MD and CFO held March 20, 2017, the discussion specifically included analysis of budget for next fiscal, along with sensitivity analysis to many scenarios including but not limited to impact of demonetization, GST, share split, dividends, etc. . Since this discussion was specifically with regard to the stock split for company IAL, it may be construed that the UPSI period started from March 20, 2017. Whether the appellants can be held as insiders within the meaning of PIT regulations? - None of the reasonings, directly or indirectly, suggest that appellants were in possession of or had access to the aforesaid UPSI at the time of trading in IAL scrip. With regard to the first reasoning relating to the pre-IPO allocation of preferential shares of IAL in 2014 for Rs. 49.99 crores, the Ld. Senior advocate for the appellants furnished a list of all such allottees, which was filed in compliance of the Companies (Share capital and debenture) Rules, 2014. The list shows that apart from the Appellant No. 2 and her husband, there were more than 80 such allottees, who had subscribed to the preferential allotment. The last column of the prescribed form makes disclosure of such allottees as Unrelated party or promoter / promoter group . Majority of such preferential allottees including appellant No. 2 and her husband were shown as unrelated party . Therefore, in our view, in contrast with the promoters , such unrelated parties cannot be held as connected persons , unless otherwise provided in the regulation. It is generally seen that prior to listing, subscription to its capital comes through reaching out to potential investors, directly or indirectly, since till the company remains unlisted, the benefit of the faceless digital platform of Stock exchange is not available to it. The assumption that in that process relationship is built among the investors, which may make them insiders is only an assumption and lacks credence. We have already held that there is no evidence suggesting that the appellants had access to or mere in possession of UPSI. Therefore, it cannot be held that trades made by the appellants during the alleged UPSI period were motivated by knowledge of UPSI. Thus, there is no evidence or inkling of communication of UPSI by insiders of IAL to the appellants. In view of this, there is no merit in the allegations that appellants traded in IAL based on knowledge of UPSI in their possession. Appeal allowed.

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• 2025 (1) TMI 16
  Applicability of corporate governance provisions - applicability of Regulation 23 of SEBI (LODR) Regulations Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 to appellant Company - Appellant s solitary contention is that the paid-up share capital is less than Rs.10 crores, thus entitled for exemption from compliance with the corporate governance provisions - HELD THAT:- It is settled that words of a statute are understood in their natural and ordinary sense; and sentences are construed according to their grammatical meaning. It is also settled that if the enacting portion of a Section is not clear, a proviso appended to it may give an indication as to its true meaning. Contention of the appellant is that in order to get the exemption from compliance with corporate governance provisions, the entity has to satisfy both conditions, namely, that the equity share capital should not exceed Rs.10 crores and net worth not exceed Rs.25 crores. We see force in this argument because a plain reading of the proviso makes it clear that the exemption shall continue to remain applicable till the equity share capital or the net worth of the entity reduces below the specified threshold. Therefore, we are of the considered view that since the paid-up equity share capital is less than Rs.10 crores, the corporate governance provisions do not apply to the appellant entity. Appeal allowed holding that the corporate governance provisions are not applicable to the appellant as the paid-up equity capital is less than Rs.10 Crores - As the penalty is unsustainable with a further direction to refund the same with interest at 8% p.a. within a period of 8 weeks from the date of this order.

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• 2025 (1) TMI 15
  Validity of SEBI's interim directions - lack of an opportunity for the appellant to be heard provided as alleged - appellant has executed Related Party Transactions without obtaining prior approval from the shareholders in terms of Regulation 23(4) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 - As argued there have been series of correspondence between the appellant and the SEBI but the impugned order interim ex-parte order has been passed without any tenable reasons - HELD THAT:- We are of the opinion that prima facie, is indubitable that appellant and SEBI were in exchange of correspondence since 2020, although it was vehemently contended by Shri. Kapadia that the relevant date to be reckoned is September 2023. In any event, it cannot be gainsaid that appellants have been called upon to file their reply within 21 days from the date of the impugned order. As recorded hereinabove, Shri Kapadia has submitted that SEBI shall pass orders within 30 days from the date of conclusion of hearing. The Learned Senior Advocate for the appellant is also in agreement with the proposed course of action. Thus, it would not be just and appropriate to continue the impugned interim ex-parte order any further keeping in view that:- The appellant has been directed to file reply within 21 days; and SEBI has made a statement before us to pass orders within 30 days from the date of conclusion of hearing and in the event of any adverse order, SEBI is enjoined with all powers to pass appropriate directions including an order of disgorgement.

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• FEMA

• 2025 (1) TMI 14
  Initiating proceedings against the petitioner on the basis of provision which stood omitted by the Finance Act, 2015 - proceedings were initiated as against the petitioner alleging violation of Section 6 (3) (b) of FEMA Act in the year 2021 - As submitted the said provision stood omitted by the Finance Act, 2015, which was notified on 15.10.2019 - HELD THAT:- The provisions of the Finance Act, 2015 are quite specific. It provides for amendments to the FEMA Act and by Section 139 of Finance Act, 2015, Section 6 (3) of the FEMA Act stood omitted. The said omission was effective from the date of notification i.e., 15.10.2019. Thus, we notice that the complaint as well as the show cause notice issued to the petitioner were specifically referable to Section 6 (3) (b) of the FEMA Act. It is clear that the complaint itself was made on 25.10.2019 and the show cause notice was issued on 25.02.2020. It is also clear that Section 6 (3) (b) stood omitted by the Finance Act, 2015 as notified on 15.10.2019. In view of the clear language of the omission, the contentions raised by the learned panel counsel that Section 6 of the General Clauses Act would come to the aid of the respondents cannot be accepted. As in Kolhapur Canesugar Works Ltd. [ 2000 (2) TMI 823 - SUPREME COURT ] has clearly held that Section 6 only applies to repeals and not to omissions and since the present case is specifically one of omission, we are of the opinion that Section 6 would not have any application in the instant case. In view of the fact that what has been specifically referred in the complaint and the show cause notice is Section 6 (3) (b), which stood omitted even as on the date, when the complaint was filed, the entire action as against the petitioner on the basis of infraction of Section 6 (3) (b) was without jurisdiction. WP allowed.

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• PMLA

• 2025 (1) TMI 13
  Money Laundering - whether the High Court is justified in quashing the summons on the premise that the respondent has been discharged in the predicate offence? - HELD THAT:- What has been issued to the respondent is merely a summons. Simply because he has been discharged in the predicate offence, a Court cannot quash the summons. The questions as to whether the respondent would be arrayed as an accused or not, is a matter which has to be decided at a later stage. In that eventuality, it is well open to the respondent to raise all relevant contentions for the aforesaid purpose including the submissions that since the predicate offence has been quashed, the subsequent action of the appellant arraying him as an accused in the PMLA proceedings would not be sustained in the eyes of law. The impugned order stands set aside and the appellant is at liberty to proceed in pursuance to the summons that had been issued. However, we make it clear that all issues are left open to the respondent, in the event of him being arrayed as an accused. - Appeal allowed.

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• 2025 (1) TMI 12
  Money Laundering - Seeking grant of Anticipatory Bail - commission of a serious economic offence of money laundering - offence punishable under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002 - it was held by High Court that ' The anticipatory bail application filed by the petitioner is dismissed.' HELD THAT:- In view of the averments made in the present application, the order dated 21.11.2024 is partly modified and it is clarified that the appellant, Rajkumar Daitapati, has deposited ₹80,00,000/- in the account of the respondent, Directorate of Enforcement, in the Union Bank of India (erstwhile, Corporation Bank). ₹20,00,000/- will also be deposited in the same account. Application disposed off.

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• 2025 (1) TMI 11
  Money Laundering - Seeking grant of bail - Money Laundering - proceeds of crime - diversion of funds - disproportionate assets more than 14 crores - it was held by High Court that ' It is deemed appropriate to allow this application and the applicant herein enlarged on bail subject to the conditions imposed' - HELD THAT:- It is not inclined to interfere with the ultimate conclusion arrived at by the High Court, taking into consideration the length of time, coupled with the fact that a complaint has already been filed. SLP dismissed.

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• 2025 (1) TMI 10
  Seeking grant of bail - Money Laundering - collecting illegal bribes and controlling the high level management of important State Departments and State Public Sector undertakings - HELD THAT:- In the case in hand, the factors enumerating in the case which should be taken in consideration while granting or refusing bail in a non-bailable case are that there are three charge sheets filed against the applicant in relation to the same allegations, 457 witnesses have been cited and more than 13,000 pages have been filed before the Special Court (PC) Raipur. It is trite that the court while considering an application seeking bail, is not required to weigh the evidence collected by the investigating agency meticulously, nonetheless, the court should keep in mind the nature of accusation, the nature of evidence collected in support thereof, the severity of the punishment prescribed for the alleged offences, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witness being tampered with, the larger interests of the public/State etc. Though, the findings recorded by the Court while granting or refusing bail would be tentative in nature, nonetheless the Court is expected to express prima facie opinion for granting or refusing to grant bail which would demonstrate an application of mind, particularly dealing with the economic offences - In the present case, the applicant was involved in the criminal acts of the syndicate and that he received commission from the liquor suppliers. However, no recovery of unaccounted money has been made in this regard and as per the investigating agency, the investigation is pending, hence, a conclusive determination of their role is yet to be made. As has been held in catena of decisions, the economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Undoubtedly, economic offences have serious repercussions on the development of the country as a whole. There is no denial to the fact that the economic offences constitute a separate class of their own, but trite it is that presumption of innocence is one of the bedrocks on which the criminal jurisprudence rests. Time and again, Apex Court has reiterated the need to integrate the right of investigating agencies to have effective interrogation of the accused with the right of liberty of the accused. In the instant case, the offence as alleged against the accused persons is very serious involving deep-rooted planning in which, huge financial loss is caused to the State exchequer. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of grave offence and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused - In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case but the consideration will have to be on case-to-case basis on the facts involved therein. Conclusion - The applicant's bail application was denied due to the gravity of the charges and the potential risks associated with his release. The court found sufficient grounds to believe that the applicant was involved in a criminal syndicate, justifying further judicial proceedings. The prayer for grant of bail to the applicant is liable to be rejected and it is hereby rejected.

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• 2025 (1) TMI 9
  Seeking grant of bail - Money Laundering - proceeds of the crime - unexplained source of income - prolonged incarceration of the petitioners without the commencement of trial - applicability of twin conditions under Section 45 of the PMLA, 2002 - HELD THAT:- In the case on hand, the petitioners have been in judicial custody for the last 14 months; the investigation of the crime, so far as the petitioners are concerned, is complete, and the complaint has been filed. But the investigation into the predicate offence is not complete and the charge sheet has not been filed. Therefore, there is not even the remotest possibility of the trial in the crime commencing in the near future. So, keeping the petitioners in indefinite incarceration till the culmination of the trial will infringe on their right to life guaranteed under Article 21 of the Constitution of India. The petitioners have strong roots in the State. The apprehension of the prosecution that the petitioners may flee from justice, can be adequately safeguarded by imposing stringent conditions. The petitioners have volunteered to abide by any condition that may be imposed by this Court and they will cooperate with the investigation. On considering the prosecution allegations and the explanations put forward by the petitioners, which have been narrated above, this Court is satisfied that there are reasonable grounds to hold that the petitioners have not committed the above offences. As the petitioners have no criminal antecedents, going by the law laid down by the Honourable Supreme Court in Dheeraj Kumar Shukla v. State of Uttar Pradesh [ 2023 (1) TMI 1374 - SC ORDER ], this Court has no hesitation to hold that the petitioners are not likely to commit an offence if they are enlarged on bail. This Court is convinced that the petitioners have satisfactorily diluted the twin conditions under Section 45 of the Act. Hence, the petitioners are entitled to be enlarged on bail. Conclusion - The prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. The applications are allowed, by directing the petitioners to be released on bail on them executing a bond for Rs. 2,00,000/- each, with two solvent sureties for the like sum, to the satisfaction of the jurisdictional court, which shall be subject to fulfilment of conditions imposed.

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• Service Tax

• 2025 (1) TMI 8
  Condonaton of gross delay of 160 days in filing these appeals and 35 days in refiling which has not been satisfactorily explained by the appellant - Exemption from service tax - it was held by CESTAT that the services are eligible for exemption - HELD THAT:- There are no reason to interfere with the impugned order dated 23-02-2024 passed by the Custom Excise Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad. The Civil Appeals are, accordingly, dismissed on the ground of delay as well as merits.

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• 2025 (1) TMI 7
  Refund of unutilized Cenvat credit under Section 142(9)(b) of the CGST Act, 2017 - rejection on the ground that there is no enabling provision under the Excise Act, where refund of closing balance of Cenvat credit can be allowed in cash - HELD THAT:- There is no dispute that the refund claim sought by the appellant is in respect of the amount of Cenvat credit which was already accrued as on 30th June, 2017. The only mistake on the part of the appellant is that due to inadvertent mistake that they could not carry forward part of the amount of Cenvat credit and therefore, for the same they claimed the refund. It is found that even if the appellant could not declare the Cenvat credit in the ST-3 return for the period April 2017 To June 2002 but, subsequently they have revised the ST-3 return wherein the differential amount of Cenvat credit was incorporated and due to this reason the Cenvat credit of Rs. 1,11,37,766/- could not be carried forward as form GST TRAN-1 was already filed prior to revision of the ST-3 return. Only for this reason refund claim of admitted Cenvat credit accrued prior to 30.06.2017 cannot be rejected. The appellant is eligible for refund in terms of section 142 (3) of CGST ACT, 2017. From the plain reading of the above provision of Section 142 it can be seen that those amount of Cenvat credit which could not be transferred under GST after 01.07.2017, the same is refundable under the existing Act. In the present case due to non mention of part amount of Cenvat Credit in ST-3 return for April June 2017 same could not be transferred to TRTRAN-1 - the refund cannot be rejected because the amount of Cenvat credit could not be transferred to TRAN-1 under GST. Reliance can be placed in M/S. GIGAMON SOLUTIONS PVT. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI [ 2024 (6) TMI 1111 - CESTAT CHENNAI] where it was held that ' the appellant has paid the tax under the erstwhile law. In the present case, the claim is only for refund and not proceedings for assessment or adjudication. In such a scenario, sub-section (3) of section 142 gets attracted. Rejection of the refund claim is not legally valid and merits to be set aside.' Conclusion - The appellant is eligible for refund in terms of section 142 (3) of CGST ACT, 2017. Procedural lapses should not defeat substantive rights; specific provisions in the CGST Act override general provisions in the Excise Act. Interest is payable on delayed refunds under Section 11BB of the Excise Act. Appeal allowed.

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• Central Excise

• 2025 (1) TMI 6
  Denial of Cenvat credit availed on the strength of invoices which are dated prior to amendment of Rule 4 vide Notification No. 21/2014-CE (NT) dated 11.07.2014 - As per amended rule, whether time limit of six months from the date of issue of the invoice for taking the credit, can be applied retrospectively to invoices issued before the amendment date - HELD THAT:- As per the facts of the present case though the appellant have availed the Cenvat credit belatedly in the month of August/September-2014, however, all the invoices related to such credit were issued before 11.07.2014. Therefore, in respect of those invoices, the amended Rule 4 vide Notification No. 21/2014-CE (NT) dated 11.07.2014 is not applicable and the credit could not have been denied on the ground of time bar. In the case of Voss Exotech Automotive Pvt. Ltd. [ 2018 (3) TMI 1048 - CESTAT MUMBAI ] the Mumbai Tribunal has held that ' the Notification No. 21/2014-S.T. (N.T.), dated 11-7-2014 should be applicable to those cases wherein the invoices were issued on or after 11-7-2014 for the reason that notification was not applicable to the invoices issued prior to the date of notification therefore at the time of issuance of the invoices no time limit was prescribed. Therefore in respect of those invoices the limitation of six months cannot be made applicable. Moreover for taking credit there is no statutory records prescribed the assessee s records were considered as account for Cenvat credit. Even though the credit was not entered in so-called RG-23A, Part-II, but it is recorded in the books of accounts, it will be considered as Cenvat credit was recorded. On this ground also it can be said that there is no delay in taking the credit. As per my above discussion, the appellant is entitled for the Cenvat credit hence the impugned order is set aside.' Conclusion - The time limit prescribed under Notification No. 21/2014-CE (NT) dated 11.07.2014 has no application in respect of the invoices issued prior to date of the said amendment in Rule 4 of Cenvat Credit Rules, 2004. The impugned order is not sustainable - Appeal allowed.

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• 2025 (1) TMI 5
  Reversal of Cenvat credit on inputs and input services used in the manufacture of exempted goods, specifically Di-Ammonium Phosphate (DAP), under Rule 6(3)(i) of the Cenvat Credit Rules, 2004 - by-product in the manufacturing process of copper products - exempt goods or not - HELD THAT:- Di-Ammonium Phosphate (DAP) is being manufactured by the appellant by using phosphoric acid and in-house manufacturing of the sulphuric has been obtained by processing sulphuric acid. It is an accepted fact that sulphuric acid is unintended product which emerges during the process of copper concentrate while manufacturing various types of copper products. This Tribunal in the appellant s own case, vide final order No. 12425-12427/2023 dated 02.11.2023 reported under [ 2023 (11) TMI 1070 - CESTAT AHMEDABAD] has held ' it is clear that any input/input services contained in any by- product/waste/refuse, Cenvat Credit cannot be varied or denied. With this statutory clarification demand under Rule 6 in respect of by-product is not applicable. This issue has been considered in various judgments as cited by Learned Counsel. Once it is established that the product in question is by-product then it is settled that in respect of by-product demand under Rule 6 will not sustain. Accordingly, in the present case also, Sulphuric Acid being a by-product, no demand under Rule 6 shall sustain.' Thus, sulphuric acid which is an unintended by-product, has further been used by the appellant for manufacture of phosphoric acid and the same has further found use in the manufacturing of Di-Ammonium Phosphate (DAP) which is chargeable to 1% rate of Central Excise duty as provided in Notification No. 12/2012-CE dated 17.03.2012 - Since the Di- Ammonium Phosphate (DAP) has been manufactured by utilizing a product which has emerged as unintended by-product, following the various legal pronouncements including the Hon ble Supreme Court decision in the case of BIRLA CORPORATION LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2005 (7) TMI 104 - SUPREME COURT] and in the case of Commissioner vs. Sterling Gelatin [ 2015 (10) TMI 557 - SC ORDER ], it is held that even after the amendment to Rule 6 by Notification No. 6/2015-CE dated 01.03.2015, so far as demand of Cenvat credit pertaining to use of sulphuric acid/phosphoric acid for manufacturing Di-Ammonium Phosphate (DAP) is not sustainable. Since the impugned order-in- original has not specifically mentioned the use of any input service on which Cenvat credit has been taken by the appellant while manufacturing and clearing Di-Ammonium Phosphate by the appellant and if so, he has to re- calculate the demand of Cenvat credit giving benefit of the fact that appellant is entitled not to reverse Cenvat credit on the inputs which have been availed on the copper concentrate while manufacturing various copper products. Conclusion - Sulphuric Acid being a by-product, no demand under Rule 6 shall sustain. The Adjudicating Authority has to segregate the demand of Cenvat credit into two segments, one which has been demanded on the primary inputs namely copper concentrate etc. and second, the demand on the use of common input and input services which have gone into manufacture of exempted DAP - matter remanded for fresh adjudication on the above terms - The appeals are allowed by way of remand.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 4
  Authority and jurisdiction of respondent to issue show cause notices after entering into a One Time Settlement (OTS) with the petitioner - no allegation of any fraud being committed by the petitioner - HELD THAT:- The fact remains that very purpose of bringing such OTS scheme is to encourage the tax payers to settle their disputes. Interestingly, in the OTS scheme issued by the Government of Telangana, the entire exercise of determination of tax/penalty amount was in the hands of the respondents and for that purpose, a committee consisting of senior officers was constituted. After having undertaken the entire exercise of determination of amount, a proposal was given by the respondents to the petitioner, which was duly accepted. The most important thing is that between the date of acceptance dated 22.06.2022 and actual recording of OTS on 17.08.2022, the Audit Officer by communication dated 11.07.2022 informed the respondents about the alleged short levy of tax/penalty. Despite having full knowledge about it, the respondent entered into OTS. There is no allegation against the petitioner in the show cause notice that petitioner had committed any fraud. After having entered into OTS, it was not open for the respondents to issue the impugned show cause notice. Curtains were finally drawn by the respondents by entering into OTS. If we permit the respondents to undertake aforesaid exercise of issuance of show cause notices even after entering into settlement, the very purpose of such scheme will vanish in thin air. This practice will certainly discourage the tax payers to enter into settlement. The settlement should draw the curtains for all times to come otherwise the very meaning of OTS will pale into insignificance. Conclusion - The finality of settlements under OTS schemes should be respected, and reopening is not permissible without statutory authority or allegations of fraud. The impugned show cause notices cannot sustain judicial scrutiny - Petition allowed.

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• Indian Laws

• 2025 (1) TMI 3
  Locus of Respondent organization to approach the National Commission - jurisdiction of National Consumer Disputes Redressal Commission to interfere with banking operations, which is the exclusive statutory domain of the Reserve Bank of India - jurisdiction to fix a maximum ceiling rate of interest to be charged by banks from their credit card holders for their failure to make full payment on the due date - interference with the contract executed between the parties or not - charging rate of interests by banks in the manner as advised by Reserve Bank of India vide its master circulars notifications being independent of a standard ceiling rate prescribed by the Reserve Bank of India, is unfair trade practice or not. Whether the Respondent organization has the locus to approach the National Commission? - HELD THAT:- Section 12(1)(b) also permits a any recognised consumer association whether the consumer to whom the goods sold or delivered or agreed to be sold or delivered or service provided or agreed to be provided is a member of such association or not to file a complaint, in terms of the procedure prescribed under section 13 of the Act. The Respondent nos. 1 and 2 herein, have taken refuge under this provision claiming themselves to be a voluntary consumer association, to approach the National Commission. Since, this Court has held that the requirement of Order I Rule 8, prescribed in Section 13(6) is to be read into section 12(1) of the 1986 Act RAMESHWAR PRASAD SHRIVASTAVA ORS. AND AVINASH GAUR AND ORS. VERSUS DWARKADHIS PROJECTS PVT. LTD. AND ORS. [ 2018 (12) TMI 2007 - SUPREME COURT] , the requirement of obtaining prior permission from the Commission, for any consumer to act in a representative capacity, can in no way be dispensed with. The consumer Complainant fails to disclose any deficiency in service or violation and is in fact a public interest litigation in guise of a purported consumer dispute. We also agree with the contention of the Appellants, that the Respondents had approached the National Commission at the behest of the Respondent no. 3, a credit card holder with Citibank, purportedly claiming an amount of Rs. 90,000/- against excess interest charged by the bank, which is barred by the pecuniary jurisdiction of the Commission. A direction by the National Commission or any other Court, must be based on material or evidence and not on surmises, and bald averments made by complainants. Any such directions issued otherwise is unsustainable. It is unable to subscribe to the view adopted by the National Commission, that any complaint under the Consumer Protection Act, 1986 to curb unfair trade practice(s) adopted by the banks is maintainable . Whether the National Consumer Disputes Redressal Commission, has the jurisdiction to interfere with banking operations, which is the exclusive statutory domain of the Reserve Bank of India? - Whether the National Consumer Disputes Redressal Commission had the jurisdiction to fix a maximum ceiling rate of interest to be charged by banks from their credit card holders for their failure to make full payment on the due date, at the behest of the Reserve Bank of India unilaterally direct banks/non-banking financial institutions to charge rates of interest not beyond the 30% p.a., in absence of an instruction/directive of the Reserve Bank of India? - HELD THAT:- The National Commission has assumed jurisdiction and expertise over the Reserve Bank of India, whilst observing that a ceiling on the rates of interest, is the purported solution to the alleged exploitation of credit card holders. It has made observations, that are contrary to the legislative intent of Section 21A of the Banking Regulation Act, 1949 that provides for a statutory bar on any court/tribunal to re-open transactions, that the rate of interest charged by the banking company in respect of such transaction is excessive - The decision of the National Commission to unilaterally hold that any interest above 30% p.a. is usurious, is in contrary to the legislative intent of section 21A and is an encroachment upon the domain of the Reserve Bank of India. In the case of Central Bank of India Vs Ravindra Ors. [ 2001 (10) TMI 1065 - SUPREME COURT ], this Hon ble Court had decided on the issue, when banks in India were not following a uniform practice, and other banks charged interest with monthly or quarterly rests while others charged with yearly or six-monthly rests. It was held by this Hon ble Court, that a distinction was drawn between the court s power to interfere on the promise that the interest charged is excessive under the general law, and the court s interference on the premise that the interest charged is in contravention of the circulars and directions issued by the Reserve Bank of India. In the former case, it would not be permissible in view of the bar enacted by Section 21A of the Banking Regulation Act, while in the latter case, it would be permissible because of the Reserve Bank of India s circulars and directions having statutory force under section 21/35A of the Act, having been violated. The RBI is the prime regulator and the decision-making authority for the economic/financial decisions of the Indian economy, any endeavor by the National Commission or any other Court/Tribunal to decide at the behest of the RBI cannot be termed to be just, fair and equitable - There is also merit in the submission made by the Appellants, that a direction cannot be issued to the Reserve Bank of India, to enact a particular legislation. It is a settled cannon of law that when an executive authority, exercises a legislative power by way of subordinate legislation pursuant to the delegated authority of a legislature, such executive authority, cannot be asked to enact a law, which he has been empowered to do under the delegated legislative authority. Whether the Impugned Judgment interferes with the contract executed between the parties? - Whether charging rate of interests by banks in the manner as advised by Reserve Bank of India vide its master circulars notifications being independent of a standard ceiling rate prescribed by the Reserve Bank of India, constitute an unfair trade practice? - HELD THAT:- It is a well-settled principle that the terms of a contract executed between two parties, are not open to judicial scrutiny unless the same is arbitrary, discriminatory, mala fide or actuated by bias. The courts cannot strike down the terms of a contract, because it feels that some other terms would have been fair, wiser or logical. In the present context, the pre-conditions of deceptive practice and unfair method are manifestly absent. The Banks have in no manner made any misrepresentation, to deceive the credit card holders. Upon availing the facility of the credit cards, the customers, are made aware of the most important terms and conditions , including the rate of interest, that shall be charged by the Banks. Even on merits, the Reserve Bank of India, has made it clear that there exists no material on record, to establish that any bank has acted contrary to the policy directives issued by the RBI - The mere inflation in the rates of interest cannot be construed as a practice, intended to cause loss or injury. It is correct to say that the National Commission has been duly empowered under the statute to set aside unfair contracts, which may symbolise a single will or are unilaterally dominant or incorporate terms which are unfair and unconscionable. However, the rate of interest, charged by the banks, determined by the financial wisdom directives issued by the Reserve Bank of India, and is duly communicated to the credit card holders from time to time, cannot be in any manner unconscionable or unilateral. The credit card holders are duly educated and made aware of their privileges and obligations, including timely payment levying of penalty on delay - the question of directing the RBI to act against any bank does not arise, in the facts and circumstances of the present case and that there is no question of the RBI being directed to impose any cap on the rate of interest, either on the banking sector as a whole, or in respect of any one particular bank, contrary to the provisions contained in the Banking Regulation Act, and the circulars/directions issued thereunder. Conclusion - The Court emphasized that the RBI is the primary regulator of banking practices, and the National Commission overstepped its jurisdiction by interfering with banking operations and contractual terms. The decision reinforced the RBI's authority in regulating interest rates and banking policies - the National Commission's judgment was set aside - appeal allowed.

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• 2025 (1) TMI 2
  Seeking quashing of Criminal Complaint - Dishonour of Cheque - continuation of legal proceedings commenced by the company in its former name by its new name - inherent jurisdiction under Section 482 of the CrPC for quashing the proceedings. Continuation of legal proceedings commenced by the company in its former name by its new name - HELD THAT:- It is relevant to note that the inherent jurisdiction of the Court under Section 482 of the CrPC ought to be exercised sparingly especially when the matter is at the stage of issuance of summons as the same has the effect of scuttling the proceedings without the parties having an opportunity to adduce the relevant evidence. The Hon ble Apex Court, in the case of Rathish Babu Unnikrishnan v. State (NCT of Delhi) [ 2022 (4) TMI 1434 - SUPREME COURT] , adverting to a catena of judgments, had underscored the parameters for exercising inherent jurisdiction to quash the proceedings at the stage of the summoning order. In the present case, apart from raising an argument in relation to the cheques in dispute being given as security, the petitioners have sought to challenge the complaints essentially on the ground that the same are not maintainable by virtue of the same being filed in the old name of the complainant company - It is argued that even though the name of the complainant company was changed on 28.05.2018, however, the complaints were subsequently filed in the erstwhile name in June, 2018. In the case of MUNISH KUMAR GUPTA VERSUS M/S MITTAL TRADING COMPANY [ 2024 (4) TMI 1212 - SC ORDER] , the Hon ble Apex Court had set aside the order whereby the concerned High Court had permitted the complainant to amend the date in the complaint by observing that if such amendment was not permitted, the same will be fatal to the case of the complainant. In the said case, the complainant therein had claimed that the error in the date of the cheque in dispute in the evidence as well as the complaint was merely typographical in nature. The Hon ble Apex Court observed that the date of the cheque is a relevant aspect as the same was instrumental in determining whether the issue of notice was within the time frame as provided under the NI Act and as to whether there was sufficient balance in the account of the issuer on the date. In view of the same, it was held that the amendment as sought for was not justified. While a bald averment is made that grave prejudice would be caused to the petitioners if the substitution of the new name of the complainant company is allowed, however, in the opinion of this Court, mere use of the old name of the complainant company is not a relevant aspect as the same is not likely to have any effect on the merits of the case. No cogent argument is made in relation to how the change in name will affect the case against the petitioners or as to how their defence would be hampered by such a change - It is also relevant to note that the mere change in name does not alter or affect the rights of the company. Furthermore, the agreement between the complainant company and the accused company is not disputed. The change of the name of the complainant company is merely formal in nature and the same can be easily cured. The same also has no effect on the original nature of the complaint. Application of inherent jurisdiction under Section 482 of the CrPC for quashing the proceedings - HELD THAT:- It is incumbent on this Court to exercise its inherent jurisdiction to ensure substantial justice. In light of the same, considering that the petitioners have failed to show as to how they will be gravely prejudiced by a mere correction in the name of the company, quashing of the criminal proceedings merely on account of a technical error at this junction, when the signatures on the cheques in dispute have not been disputed and the claim of the complainant company has not been adjudicated on merits, would be unmerited and it will frustrate the ends of justice - considering that the complaints have been pending since the year 2018, this Court considers it apposite to request the learned Trial Court to expedite the proceedings. The present petitions are dismissed.

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• 2025 (1) TMI 1
  Dishonour of Cheque - compounding of offence after the judgment of conviction and order of sentence have been passed - petitioner compromised the matter with the respondent (complainant) - HELD THAT:- Having taken note of the fact that the petitioner - accused and the complainant-respondent have settled the matter and the complainant has no objection in compounding the offence, therefore, this Court sees no impediment in accepting the prayer made on behalf of the accusedpetitioner for compounding of offence while exercising power under Section 147 of the Act as well as in terms of guidelines issued by the Hon ble Apex Court in Damodar S. Prabhu V. Sayed Babalal H. [ 2010 (5) TMI 380 - SUPREME COURT ], wherein the Hon ble Apex Court has held ' since Section 147 was inserted by way of an amendment to a special law, the same will override the effect of Section 320(9) of the CrPC, especially keeping in mind that Section 147 carries a non obstante clause.' In K. Subramanian Vs. R. Rajathi [ 2009 (11) TMI 1013 - SUPREME COURT ], it has been held by the Hon ble Apex Court that in view of the provisions contained in Section 147 of the Act read with Section 320 of Cr.P.C., compromise arrived at can be accepted even after recording of the judgment of conviction. Since, in the instant case, the petitioner-accused after being convicted under Section 138 of the Act, has compromised the matter with the complainant, prayer for compounding the offence can be accepted in terms of the aforesaid judgments passed by the Hon ble Apex Court. Conclusion - In view of the compromise arrived at between the parties, the petitioner should be permitted to compound the offence committed by him under Section 138 of the Code. The present matter is ordered to be compounded and the impugned judgment of conviction and order of sentence passed by learned Chief Judicial Magistrate, Shimla, District Shimla, H.P, which was affirmed in appeal by learned Additional Sessions Judge (CBI Court), Shimla, District Shimla, H.P., are quashed and set-aside and the petitioner-accused is acquitted of the charge framed against him under Section 138 of the Act - Undisputedly, the total amount of the cheques is Rs.15,000/-, however, the learned counsel for the petitioner submitted that the petitioner is a poor person and the imposition of compounding fee may be reduced. Petition disposed off.

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