TMI Tax Updates - e-Newsletter
January 9, 2025

Case Laws in this Newsletter:

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

Articles

1. CONTRAVENTION OF SECTION 10(6) OF FOREIGN EXCHANGE MANAGEMENT ACT, 1999

   By: DR.MARIAPPAN GOVINDARAJAN

2. GST MILESTONES: 2024 IN RETROSPECT

   By: Dr. Sanjiv Agarwal

3. Provisions on limitation should be interpreted liberally in cases where genuine hardships are demonstrated

   By: Bimal jain

4. Advantages of LLP for Freelancers and Consultants

   By: Ishita Ramani

News

1. Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Rajasthan

2. Enabling filing of Application for Rectification as per Notn. 22/2024-CT, dtd. 08/10/24, 2024

3. Railways spent 76% of its budgetary outlay within first nine months: Ministry

4. Downward revision of GDP growth estimates set gloomy backdrop to Union Budget: Congress

5. Budget session of Jharkhand assembly from Feb 24 to Mar 27

6. CBI Court sentences then Superintendent of Customs, Uran, Dist. Raigad to two years’ Imprisonment with fine of Rs. 50,000/- in a case of Disproportionate Assets

7. Empanelment of Chartered Accountant firms/LLPs for the year 2025-2026.

8. CCI approves the proposed combination involving inter-connected steps resulting in inter alia the acquisition of up to 68.9% shareholding in Roop Automotives Limited by CA Carob Investments (Investor)

9. CCI approves the proposed acquisition of 21 SPVs, owning renewable power generation plants, and the holding companies of certain SPVs by Gentari Renewables India Pte. Ltd.

10. CCI approves the acquisition of certain shareholding of Pegatron Technology India Pvt. Ltd. (Pegatron India) by Tata Electronics Pvt. Ltd. (TEPL) and the transfer of TEL Components Pvt. Ltd.(TEL)’s business undertaking to Pegatron India

11. Secretary, DFS chairs a meeting with Fintech Ecosystem Partners, senior officials of RBI, NPCI, FIU-IND, MeitY, and founders of Fintech entities

12. Delhi polls: I-T department notifies control room to check black money

13. Trump says he will use ‘economic force’ against Canada

14. Mahama sworn in as Ghana's president for third time against backdrop of economic crisis

15. Rahul Gandhi skips UP court hearing on economic quota remark; next hearing on Jan 17

Notifications

Companies Law

1. S.O. 132(E) - dated 7-1-2025 - Co. Law

Central Government appoints Judicial Member and Technical Member in the National Company Law Tribunal for a period of five years

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2025/003 - dated 8-1-2025

Guidelines for Investment Advisers

2. SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2025/004 - dated 8-1-2025

Guidelines for Research Analysts

3. SEBI/HO/DDHS/DDHS-PoD-3/P/CIR/2025/002 - dated 7-1-2025

Measures for Ease of Doing Business for Credit Rating Agencies (CRAs) –Timelines

Highlights / Catch Notes

GST

• Government authorizes GST intelligence agency to enforce IT Rules on digital platforms.

  Notifications : Additional/Joint Director (Intelligence) of Directorate General of GST Intelligence Headquarters (DGGI-Hq), Central Board of Indirect Taxes and Customs in Department of Revenue, Ministry of Finance designated as nodal officer u/s 14A(3) of Integrated Goods and Services Tax Act, 2017 for purposes of Information Technology (Guidelines for Intermediaries and Digital Media Ethics Code) Rules, 2021 pursuant to Section 79(3)(b) of Information Technology Act, 2000. Notification effective from date of publication in Official Gazette.
  Visit to Get Source

  ---

• Petitioner contests tax demand over GSTR discrepancies, RCM non-payment, and private coaching receipts; HC orders partial payment pending review.

  Case-Laws - HC : Petitioner challenged impugned order by respondent regarding difference in outward supply between GSTR 3B and books of accounts, non-filing of GSTR 9 & 9C, non-payment of tax under RCM for freight charges, and non-payment of tax for private coaching fee receipts. HC held petitioner shall pay 25% of demand after deducting paid amount, subject to verification. Impugned order treated as show cause notice; petitioner to file objections within four weeks. Petition disposed of.
  Visit to Get Source

  ---

• Consolidated GST notice for multiple years invalid, separate notices required per year.

  Case-Laws - HC : The HC held that issuing a consolidated show cause notice for multiple assessment years from 2019 to 2023-24 was erroneous. It relied on precedents from Karnataka and Madras HCs which held that separate notices should be issued for each year u/s 73 of the GST Act. The HC granted an extension till 21.11.2024 for filing a reply to the 1622-page notice and excluded the corresponding period for passing orders to offset the delay.
  Visit to Get Source

  ---

• Bail granted in GST fraud case due to lack of evidence and right to cross-examine witnesses.

  Case-Laws - HC : The HC granted bail to the accused petitioner who was charged with creating fake firms, issuing invoices, and passing on input tax credit in violation of Section 132 of the Central Goods and Service Tax Act, 2017. The HC found that the prosecution heavily relied on statements recorded u/s 70, but failed to include those individuals as witnesses, depriving the accused of the right to cross-examine. Additionally, despite filing the complaint, the Department could not determine the amount of input tax credit claimed by beneficiaries after over a year of investigation. The HC noted that once a complaint is filed, no further evidence can be used against the accused. Considering the maximum punishment of five years and the accused's custody of five months, the HC allowed the bail application subject to conditions.
  Visit to Get Source

  ---

• Government Entity Liable to Pay GST Difference at 6% from Jan to Sept 2022, Interest Payable After 3 Months.

  Case-Laws - HC : The HC held that the respondent no. 2, a government entity, is liable to pay the petitioner the difference in GST amount at 6% from 01.01.2022 to 30.09.2022 within three months, failing which interest at 6% per annum shall be payable from the date of entitlement, as the GST rate was enhanced from 12% to 18% during this period according to respondent no. 4, the state GST department. The petition was disposed of.
  Visit to Get Source

  ---

• Principles of Natural Justice Violated: Notice by Incompetent Authority, No Hearing Before Order.

  Case-Laws - HC : HC held that the order disallowing credit passed by Deputy Commissioner without hearing petitioner violated principles of natural justice. The notice was issued by Joint Commissioner who lacked competence. Deputy Commissioner, though competent authority, didn't give notice or hear petitioner before passing impugned order. HC kept respondents' action of blocking electronic credit ledger in abeyance and restrained from giving effect to decision of blocking credit ledger. Matter listed for final hearing.
  Visit to Get Source

  ---

• Inverted rate of duty structure: Fresh Refund Application Allowed, GST Portal to Operate Accordingly.

  Case-Laws - HC : Refund due to inverted rate of duty structure: HC disposed of the petition allowing the petitioner-Firm to file a fresh refund application for services covered by the retrospective amendment to Rule 89(5) of CGST Rules 2017. The respondents were directed to decide the application strictly per the amended rule and applicable laws, requiring them to operate the GST portal accordingly.
  Visit to Get Source

  ---

• Herbal Cigarette Substitute Rightly Classified as Tobacco Substitute, Not Medicinal Product.

  Case-Laws - AAAR : AAAR dismissed appellant's appeal. Product 'Aorom Herbal Smokes' classifiable under HSN 24029010 (tobacco substitutes), not HSN 3004 (medicinal products). Appellant failed to substantiate product as 'medicinal cigarettes' under Drugs and Cosmetics Act, 1940 by not providing authoritative Ayurvedic text used for manufacturing. Appellant's own brochure claimed product as cigarette substitute aimed at assisting smokers to quit habit. Therefore, product attracts GST rate applicable to tobacco substitutes.
  Visit to Get Source

  ---

• Mobilization advance for construction services triggers GST liability on receipt: AAAR.

  Case-Laws - AAAR : The AAAR held that for construction services, the time of supply for GST purposes is the date of receipt of mobilization advance, being the earliest of the date of issue of invoice or receipt of payment. The mobilization advance constitutes payment and consideration, despite appellant's contention that it is merely a transaction in money. The notification No. 66/2017-CT (Rate) is inapplicable as the supply pertains to services. Consequently, the appeal by M/s S.P. Singla Constructions P Ltd. was rejected.
  Visit to Get Source

  ---

• Failure to pass on GST rate cut benefit to consumers by not revising MRP violated Section 171 of GST Act.

  Case-Laws - CCI : Respondent failed to reduce, re-fix and display MRPS commensurately after GST rate reduction on impacted SKUs w.e.f. 15.11.2017 and convey the same to dealers, thereby not passing on tax reduction benefit to consumers in violation of Section 171 of GST Act as per Delhi HC judgment [2024 (1) TMI 1248]. DGAP report stating no violation cannot be accepted. DGAP directed to reinvestigate case as per HC judgment and submit report u/r 133(4) of CGST Rules, 2017.
  Visit to Get Source

  ---

Income Tax

• Delay in filing appeal condoned due to accountant's failure, favoring merit over technicality.

  Case-Laws - HC : The HC condoned the delay of 98 days in filing the appeal. The appellant's services were disrupted due to a raid, and the accountant entrusted with filing the appeal failed to perform his duty, leading to his termination. The HC found the delay reasonable and allowed the appeal, favoring adjudication on merits over dismissal on technical grounds of limitation.
  Visit to Get Source

  ---

• Tax Collection at Source exemption for IFSC Units availing section 80LA deduction for 10 years.

  Notifications : A Unit of International Financial Services Centre shall not be considered as 'buyer' for TCS u/s 206C(1H) of the Income Tax Act, 1961, subject to conditions - the buyer furnishes Form 1A declaration for 10 consecutive years opted for section 80LA deduction; the seller doesn't collect TCS after receiving Form 1A and reports such receipts. The relaxation is available only for 10 years declared in Form 1A for section 80LA deduction. Definitions of buyer, seller, IFSC, and Unit are provided. DGIT(Systems) to prescribe procedures and formats. Effective from 1st January 2025.
  Visit to Get Source

  ---

• Inconsistent grounds in 148A notices deprived assessee of fair opportunity; HC quashed reassessment proceedings.

  Case-Laws - HC : AO issued notice u/s 148A(b) making certain allegations. However, in subsequent order u/s 148A(d), AO raised grounds at variance with initial allegations in 148A(b) notice. HC held this deprived assessee of effective opportunity to explain information didn't indicate escaped income. AO didn't consider assessee's claim that alleged escaped income was disclosed and assessed. HC set aside 148A(b) notice and 148A(d) order.
  Visit to Get Source

  ---

• Income Tax Reopening Quashed Over Mechanical Reliance on CGST Data Sans Verification of Assessee's Records.

  Case-Laws - HC : The HC quashed the show cause notice issued u/s 148A(b) and the consequent order u/s 148A(d) of the Income Tax Act. The HC held that the assessing officer and the PCIT exhibited gross non-application of mind in reopening the assessment merely based on information from CGST authorities about the assessee receiving payments from an entity allegedly involved in bogus invoicing, without verifying the assessee's credentials, returns, and supporting documents. The HC criticized the mechanical approach adopted by the tax authorities in intermixing CGST and Income Tax jurisdictions, stating that information under one regime cannot automatically apply to the other without tangible material indicating relevance to the assessee's income. The PCIT's remarks granting approval u/s 151 crossed limits of legitimacy, amounting to an abuse of authority.
  Visit to Get Source

  ---

• Jain Trust denied tax exemption for promoting interests of particular religious community.

  Case-Laws - AT : The ITAT upheld the denial of registration u/s 12AB to the Trust, as its objects were exclusively for the Jain Community, violating Section 13(1)(b) read with the explanation to Section 12AB(4). Registration u/ss 12A and 12AA is a prerequisite for claiming exemption u/ss 11 and 12. Section 13(1)(b) prohibits exemption to trusts established after the Act's commencement for the benefit of a particular religious community or caste. The CIT(E)'s order denying registration, being within the amended law's provisions, was upheld.
  Visit to Get Source

  ---

• Loan repayment by partnership firm to partners via journal entries not falling u/ss 269SS/269T.

  Case-Laws - AT : The ITAT held that where a partnership firm repays loans to its partners by journal entries/book entries, such transactions are not covered u/ss 269SS/269T of the Act, as a partnership firm is not distinct from its partners under general laws. The repayment by journal entry falls outside the ambit of section 269T, and such transactions are entitled to immunity u/s 273B, which stipulates that penalty u/s 271E is not imposable if there was reasonable cause for failure to accept/repay loans/deposits in prescribed modes. The journal entries were made in bona fide belief based on judicial precedents, without any finding of tax evasion intent. Consequently, the assessee's appeal was allowed.
  Visit to Get Source

  ---

• Software License Fees & Related Services Not Taxable as FTS Under India-UK DTAA.

  Case-Laws - AT : In the present case, the Income Tax Appellate Tribunal (ITAT) held that when the sale of software (prime) license fees is not taxable, the fees for provisions for other related services like training, utilization, and installation cannot be considered as Fees for Technical Services (FTS) under the India-UK Double Taxation Avoidance Agreement (DTAA). The ITAT noted that the Assessing Officer had accepted the assessee's claim that the sale of software license fees was not taxable for the relevant assessment year. The Coordinate Bench of the ITAT had previously held in the assessee's case for the preceding year that when the software itself is not taxable, the related activities cannot be treated as FTS. The ITAT found no distinguishing facts or evidence from the Department to controvert the earlier order. Consequently, the ITAT deleted the addition made by treating the fees for provisions for other related services as taxable and allowed the assessee's appeal.
  Visit to Get Source

  ---

• Fraudulent Income Taxable at Accrual Despite Later Recovery; Deductions Disallowed.

  Case-Laws - AT : The ITAT upheld the taxability of fraudulent income earned by the assessee through forgery and defrauding the government. Despite recovering the entire amount, the income accrued to the assessee and was utilized for economic gains like investments, making it taxable in the year of accrual under the Income-tax Act, 1961. The doctrine of real income requires taxation at accrual, irrespective of later recovery or repayment. Deductions claimed for subsequent recovery were disallowed as they did not qualify as expenses incurred for earning taxable income u/s 57. The prosecution initiated u/s 277 was for making false statements, separate from the taxability aspect. The order confirmed the addition of fraudulent income and denial of deductions for recovery.
  Visit to Get Source

  ---

• Search Assessment: Limitation Period Bars Assessments, Additions Quashed for Lack of Jurisdiction and Invalid Approvals.

  Case-Laws - AT : The ITAT held that the assessment years 2009-10, 2010-11 and 2011-12 were beyond the 10-year limitation period u/s 153C read with Explanation-1 to section 153A. Hence, the notice issued and assessments made u/s 153C for these years were barred by limitation, invalid, and quashed for want of valid jurisdiction. The consolidated satisfaction notes recorded by the AOs for multiple years were improper as separate notes were required year-wise. The additions made u/s 68 for the years 2009-10 to 2013-14 were unsustainable due to lack of jurisdiction and invalid, and hence quashed. The approval granted u/s 153D was treated as invalid and bad in law due to lack of proper application of mind and recording of satisfaction by the Addl. CIT. The addition of Rs. 60 lakh u/s 68 for 2009-10 was unjustified as no credit entry was found in the books. The addition of Rs. 1.25 crore u/s 68 for 2013-14 was deleted as it involved double taxation of amounts already offered under IDS 2016.
  Visit to Get Source

  ---

• Legitimate stock transactions cannot be disregarded as bogus capital gains based on mere suspicion.

  Case-Laws - AT : The ITAT held that the assessee's long-term capital gains (LTCG) from sale of shares could not be treated as bogus or manipulated. The Investigation Wing's report was generalized, and the AO failed to establish that the assessee's transactions were part of any price manipulation. The assessee provided evidence of purchase, sale, payment, and demat entries, which were not doubted. The ITAT relied on the Delhi High Court's decision in PCIT vs. Smt. Krishna Devi, where mere increase in share prices and weak company fundamentals were held insufficient to disbelieve declared capital gains. Consequently, the addition u/s 68 was deleted.
  Visit to Get Source

  ---

• Charitable exemption eligibility & write-off of non-recoverable amounts from members examined.

  Case-Laws - AT : The ITAT allowed the assessee's appeals on the following grounds: 1) Regarding exemption u/s 11 for charitable activity, the matter was referred to the AO to examine allowability in view of the SC decision in ACIT vs. Ahmedabad Urban Development Authority on computation of receipts from trade/business. 2) The write-off of non-recoverable amounts from terminated members was allowed as the security deposits were non-refundable and taken into the assessee's corpus, and the dues were already shown as income.
  Visit to Get Source

  ---

• Share capital genuineness upheld; share applicants' credentials verified; no Sec. 68 tax on share premium.

  Case-Laws - AT : Assessee company successfully proved genuineness of share capital and share premium received from various private limited companies. Creditworthiness and identity of share applicants established. Book value per share higher than share premium charged. Source of share application money already taxed in hands of share applicants, hence no justification for invoking Sec. 68. ITAT ruled in favor of assessee relying on Mahaveer Kumar Jain [2018 (4) TMI 1078 - SC] to avoid double taxation.
  Visit to Get Source

  ---

• Income Tax Exemption on Differential Between Stamp Duty Valuation and Purchase Price Under Joint Development Agreement.

  Case-Laws - AT : The ITAT quashed the order of the Pr. CIT, holding that the addition u/s 56(2)(x) on differential between stamp duty valuation and purchase price was not justified. The ITAT observed that the AO had enquired and was satisfied with the assessee's contention regarding the Joint Development Agreement (JDA). The ITAT noted that taxable income u/s 45(5A) would arise only upon obtaining a completion certificate, which was not the case here. The ITAT found that the Pr. CIT's order was based on assumptions without backing of facts, contrary to the prudent businessman principle. Consequently, the ITAT ruled in favor of the assessee.
  Visit to Get Source

  ---

• Reassessment notice under non-existent old Section 148 renders assessment orders invalid.

  Case-Laws - AT : CIT(A) erred by assuming reassessment proceedings initiated by AO u/s 148A were valid, ignoring merits of earlier assessment orders dated 31.03.2022 passed pursuant to notice issued on 30.06.2021 under old Section 148. ITAT held assessment orders based on notice issued under non-existent Section 148 were invalid, quashing them. CIT(A) ought to have independently determined validity of impugned orders instead of treating them as non-est due to subsequent Section 148A proceedings. Decided in assessee's favor.
  Visit to Get Source

  ---

Customs

• Certain IT hardware imports now require valid license, to be declared with Bill of Entry.

  Circulars : The Public Notice clarifies that import of certain IT hardware under HSN 8741 is restricted and requires a valid license. Bills of Entry must be filed under Scheme Code 14 with the license number mentioned. The system will not allow assessment without debiting the online license. Officers can add the scheme code and license details if importers fail to provide them initially. Stakeholders are requested to take note for necessary action. Officers facing difficulties can email for assistance.
  Visit to Get Source

  ---

• Customs allows manual filing of shipping bills for exports under drawback with 'No Foreign Exchange Involved' till systems updated.

  Circulars : JNCH issued an addendum to Public Notice No. 78/2017 regarding processing of shipping bills in manual mode. It inserted Para 4.6 allowing filing of shipping bills under claim of drawback u/s 74 with 'No Foreign Exchange Involved (NFEI)' under Scheme Code 99 till DG systems enables filing under Scheme Code 19 with GR waiver condition or provides a separate code for this export category. The addendum is effective from 21.06.2017.
  Visit to Get Source

  ---

• Customs authorities can't arbitrarily reject transaction value without valid reasons, evidence: CESTAT.

  Case-Laws - AT : The CESTAT allowed the appeal, holding that the revenue authorities erred in rejecting the declared/transaction value of the imported goods without any justifiable basis. It relied on the Supreme Court's decision in Century Metal Recycling Pvt. Ltd., which held that declared valuation can be rejected only based on evidence meeting the criteria of 'certain reasons', and the opinion formed must be reasonable. Since the revenue did not establish that the parties were related, any extra money was exchanged, or the declared value was influenced by extraneous factors, the rejection of transaction value was unjustified and hit by non-fulfillment of Rule 12.
  Visit to Get Source

  ---

• Possessor of smuggled bike liable to pay customs duty despite cheaper purchase price.

  Case-Laws - AT : DRI officers have jurisdiction to issue show cause notice u/s 28 of Customs Act, 1962. Appellant purchased smuggled bike registered with fake documents for Rs. 5,70,000 despite market price over Rs. 13 lakhs, making him not a bonafide purchaser. As per Section 125(1), when owner is unknown, possessor is liable to pay duty. Since bike's owner is unknown and appellant is possessor, he is liable to pay duty. Appeal dismissed by CESTAT.
  Visit to Get Source

  ---

• Imported betel nuts rightly classified, but penalties reduced for declared value mismatch with DGFT minimum price.

  Case-Laws - AT : The CESTAT held that the imported betel nuts were rightly classified under CTH 0802 8030. While the minimum import price fixed by DGFT could not be treated as tariff value for rejecting the declared transaction value, confiscation and penalties were justified. However, the redemption fine was reduced to 5% of the DGFT determined value, totaling Rs.10,95,000/- and penalty u/s 112(a) was reduced to Rs.5,00,000/-. Re-export of the goods was permitted with the reduced redemption fine. The appeal was allowed in part.
  Visit to Get Source

  ---

• Importer's parallel invoicing scheme for undervaluation rejected; customs rightly confiscated goods, imposed penalties.

  Case-Laws - AT : Appellant imported automotive windshields. Investigation revealed parallel invoices - one with actual higher valuation and another with suppressed lower valuation presented to customs for assessment to evade duty. Declared transaction value rejected as per CVR 2007 Rule 12. Undervaluation and misdeclaration established. Goods liable for confiscation u/s 111(m). Penalties u/ss 114(A) and 114(AA) upheld. No violation of natural justice. CESTAT dismissed appeal.
  Visit to Get Source

  ---

• Computer System Failure Can't Deny Importer's Statutory Compliance: No Penalty for Delayed Filing.

  Case-Laws - AT : The CESTAT held that the appellant should not be blamed for the delay in filing the bill of entry due to system-related faults. Section 11(4) does not require an importer to update bond details manually. Defects in linking the bond module and ICES by the department cannot deny an importer's statutory compliance. The Commissioner (Appeals) rightly allowed the duty rate as on 26/09/2018 after a 6-7 month delay, as the appellant attempted filing the bill of entry before the rate change notification. Importers should not be penalized for system faults. The appeal was disposed of, as remanding the matter would involve fresh investigation beyond the original authority's purview.
  Visit to Get Source

  ---

• Customs Dept failed to prove misdeclaration of imported Mace's quantity, grade, value to evade duty; onus not discharged.

  Case-Laws - AT : The CESTAT held that the Department failed to meet the burden of proof regarding the alleged misdeclaration of quantity, grade, and value of imported Mace to evade customs duties. The non-supply of the relied-upon Bill of Entry and lacunae in the analytical report on the grade of goods were fatal to the Department's case. The onus to prove that the declared price did not reflect the true transaction value is always on the Department. NIDB data cannot be directly applied unless the value falls within the parameters of identical or similar goods u/s 14 of the Customs Act, 1962 and the Customs Valuation Rules. The Department failed to establish by satisfactory methods that the declared value was incorrect. Regarding the excess quantity of 590.83 Kgs, the declared price should be adopted, and appropriate duty demanded from the importer-appellant. The re-determined value, fine, and penalties were set aside due to infirmities in the show cause notice and erroneous decision. The appeal was disposed of accordingly.
  Visit to Get Source

  ---

• Reasonable delay in filing appeal should not lead to dismissal without considering explanation.

  Case-Laws - AT : CESTAT allowed the appeal by way of remand. The appeal filed on 30.02.2019 was within one month of receipt of the order in original by the appellant. The Commissioner (Appeals) mechanically rejected the appeal on the ground of limitation without considering the explanation given by the appellant for the delay. CESTAT held that the matter should be re-heard by the Commissioner (Appeals) on merits without discussing the aspect of limitation, as there was nothing on record to show that the appellant deliberately caused the delay.
  Visit to Get Source

  ---

• Misdeclared imports of aluminum printing plates liable for confiscation and anti-dumping duty evasion penalty.

  Case-Laws - AT : The CESTAT upheld the findings that the appellant misdeclared the imported goods as "P.S. Printing Plates" to evade anti-dumping duty, when the test report from M/s. Don Bosco proved they were actually Aluminum Printing Plates having color treatment on one side. The appellant's challenges to the test report's reliability and delay were rejected. The goods were held liable for confiscation u/s 111(m), and the appellant was liable to pay the evaded anti-dumping duty of Rs. 44,15,360/- along with an equal penalty u/s 114A. The appeal was dismissed.
  Visit to Get Source

  ---

IBC

• Unjustified Judicial Interference in IBC Processes Breaches Legal Discipline, Expeditious Resolutions Prioritized.

  Case-Laws - SC : The SC held that the High Court erred in exercising power of judicial review and interdicting the Corporate Insolvency Resolution Process (CIRP) culminating in approval of a resolution plan by the Committee of Creditors. The jurisdiction of the Adjudicating Authority u/s 60(5)(c) was reiterated. The CIRP proceedings commenced six years ago, and the resolution plan was approved four years back, emphasizing the importance of concluding CIRP expeditiously. Unjustified interference with IBC proceedings breaches the discipline of law. The High Court erred in entertaining the writ petition due to delay and laches, especially when the respondent initiated proceedings under the IBC seeking similar relief. The IBC is a complete code with sufficient checks, balances, and remedies. Adherence to protocols and procedures maintains legal discipline. While High Courts' supervisory and judicial review powers are critical constitutional safeguards, their exercise demands rigorous scrutiny and judicious application. The appeal was allowed.
  Visit to Get Source

  ---

• Wockhardt Cephalosporin Facility Part of Corporate Debtor's Liquidation Estate Despite Alleged Sub-Letting.

  Case-Laws - AT : The NCLAT held that the Wockhardt Cephalosporin Facility, situated in an area of 13,000 sq. ft. within the larger property, is part of the liquidation estate of the CD. The CD had acquired leasehold rights over the entire area of 64,925 sq. mtrs. through the consent letter dated 09.03.2017 and Assignment Agreement dated 27.03.2018. The MIDC did not grant consent for sub-letting in favor of Wockhardt Ltd. The payment made by the Appellant pursuant to the RP's letter demanding unauthorized sub-letting charges cannot be construed as valid sub-letting. The Appellant's claim to exclude the 13,000 sq. ft. area from the CD's assets was rejected. The appeal was dismissed.
  Visit to Get Source

  ---

• Corporate Insolvency: NCLAT Clarifies Scope of Moratorium & Assessment Proceedings under IBC.

  Case-Laws - AT : The NCLAT held that after initiation of moratorium u/s 14(1) of the IBC, no assessment proceedings can be continued by the EPFO. However, after an order of liquidation is passed, Section 33(5) does not prohibit initiation or continuation of assessment proceedings. No claim based on assessment carried out during the moratorium period, prohibited u/s 14(1), can be admitted in CIRP. Claims filed by the appellants subsequent to approval of the Resolution Plan by the CoC could not have been admitted in CIRP as they were hit by Section 14(1). The appeals were dismissed as no error was found in the impugned orders of the Adjudicating Authority.
  Visit to Get Source

  ---

Indian Laws

• High Court Quashes Criminal Proceedings in Cheque Bounce Case Due to Lack of Legally Enforceable Debt and Malicious Prosecution.

  Case-Laws - HC : The HC quashed the summoning order and entire proceedings u/s 482 CrPC, allowing the application. It held that for an offence u/s 138 NI Act, the dishonoured cheque must represent a legally enforceable debt on the date of issuance and maturity. Since part payment was already made, the complaint u/s 138 could not be entertained. The complainant concealed the lawyer-client relationship and filed a malicious prosecution. Continuance would abuse the process of law and cause mental trauma. The HC found good ground to invoke inherent powers and quash the proceedings in the present facts and circumstances.
  Visit to Get Source

  ---

Service Tax

• Taxpayer eligible for refund and interest on excise duty paid under protest.

  Case-Laws - AT : The appellant is eligible for refund of Rs. 8,05,266/-. The 'under protest' letter filed for the initial payment is applicable to subsequent payments for the same issue, unless evidence shows the later payment was voluntary. The appellant is entitled to interest on the refund amount from 3 months after the refund claim date until payment, at 12% per annum u/s 11BB of the Central Excise Act, 1944. Appeal allowed.
  Visit to Get Source

  ---

• Mega Power Project Services Exempt from Service Tax as Recipient Qualifies as 'Governmental Authority'.

  Case-Laws - AT : The appellant rendered services to M/s NTPC, a public sector undertaking under government control, engaged in electricity generation. Services provided to a 'governmental authority' are exempt from service tax. The SC held that a 'governmental authority' includes bodies set up by Parliament/State legislature or established by government with 90% or more participation. As M/s NTPC qualifies as a 'governmental authority', the services rendered were exempt. The extended period of limitation was also not invokable as the appellant had a bona fide belief that no service tax was payable on services for a mega project. The appeal was allowed.
  Visit to Get Source

  ---

• Canpotex's Canadian location determined place of provision for services rendered, outside India's taxable territory.

  Case-Laws - AT : The Appellant provided services to Canpotex. The issue was whether these services were classifiable as Business Auxiliary Services (BAS) or Business Support Services (BSS)/Business Promotion Services (BPS), and the place of provision. The CESTAT held that u/r 3 of POPS Rules, the place of provision was Canada, Canpotex's location, as Canpotex was the recipient obliged to make payment. Since the place was outside India's taxable territory, the services were not chargeable to Service Tax. The CESTAT allowed the appeal, setting aside the demand, holding that discounts towards sale of goods don't constitute 'service' u/ss 65(105)/65B(44), not chargeable to Service Tax.
  Visit to Get Source

  ---

Central Excise

• Refund claim rejected for failure to challenge self-assessment order on valuation of goods.

  Case-Laws - AT : The CESTAT dismissed the appeal filed by the appellant seeking refund of central excise duty u/s 11B of the Central Excise Act, 1944. The appellant's claim for refund on the ground of excess duty payment due to wrong valuation of goods was rejected. The CESTAT held that in self-assessment cases, the refund proceedings u/s 11B are executionary and not re-assessment proceedings. The appellant failed to challenge the self-assessment order before the Commissioner (Appeals) or get it modified. Hence, the appellant cannot raise issues regarding the applicability of Sections 4 or 4A for duty assessment in the refund proceedings. The appellant failed to prove entitlement to the refund claimed.
  Visit to Get Source

  ---

Case Laws:

• GST

• 2025 (1) TMI 412
  Violation of principles of natural justice - Service of notice - impugned order is challenged on the premise that the notices and orders were uploaded under the view additional notices and orders tab on the GST Portal, thereby, the petitioner was unaware of the initiated proceedings and thus unable to participate in the adjudication proceedings - HELD THAT:- The impugned order dated 25.06.2024 is set aside. The petitioner shall deposit 25% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order. Petition disposed off.

  ---

• 2025 (1) TMI 411
  Violation of principles of natural justice - impugned order came to be passed without considering the petitioner's request for time - HELD THAT:- The impugned order dated 07.08.2024 is set aside and the petitioner shall deposit 10% of the disputed tax within a period of four weeks from the date of receipt of a copy of this order. On complying with the above condition, the impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections within a period of four weeks from the date of receipt of a copy of this order along with supporting documents/material. If any such objections are filed, the same shall be considered by the respondent and orders shall be passed in accordance with law after affording a reasonable opportunity of hearing to the petitioner. If the above deposit is not paid or objections are not filed within the stipulated period, i.e., four weeks respectively from the date of receipt of a copy of this order, the impugned order of assessment shall stand restored. Petition disposed off.

  ---

• 2025 (1) TMI 410
  Inaction on the part of the respondents in not refunding the amount of GST collected from the petitioner in the course of the execution of the contract that was awarded to the petitioner - grievance of the petitioner is that in spite of repeated approach being made to the respondents, there is a total inaction on the part of the respondents so far as refund of GST is concerned - HELD THAT:- The writ petition as of now stands disposed of directing the State Authorities to immediately process the claim of the petitioner so far as refund of GST is concerned, after due verification of facts and also the entitlement part of the petitioner is concerned. Let an appropriate decision be taken keeping in view the earlier order of the Central Government dated 28.01.2020 and 06.06.2018 (Annexure-P/2) and all subsequent orders also passed in this regard by the Central Government. Let an appropriate decision be taken within an outer limit of 90 days from the date of receipt of the copy of this order. Petition disposed off.

  ---

• 2025 (1) TMI 409
  Challenge to impugned order on the premise that the same was made in violation of principles of natural justice - HELD THAT:- The impugned order set aside, directing the petitioner to deposit 10% of the disputed taxes and allowing them to present their objections afresh before the adjudicating authority. Petition disposed off.

  ---

• 2025 (1) TMI 408
  Challenge to assessment order - mismatch between GSTR 1 and GSTR 3B - Revenue would submit that since the application for rectification filed by the petitioner dated 22.03.2024 is still pending, the same will be considered and disposed of in accordance with law - HELD THAT:- The respondent is directed to consider the application for rectification filed by the petitioner dated 23.02.2024 and pass appropriate orders on merits and in accordance with law, within a period of three weeks from the date of receipt of a copy of this order. Petition disposed off.

  ---

• 2025 (1) TMI 407
  Challenge to impugned order passed by the respondent - Difference in outward supply between GSTR 3B and Books of accounts - Non filing of returns in FORM GSTR 9 9C - Non-payment of tax under RCM for the freight charges - Non-payment of tax for the private coaching fee receipts - HELD THAT:- Petitioner submits that they would pay the balance remaining out of the 25% after deducting the monies which is stated to have been paid, which was not objected to by the learned Additional Government Pleader for the respondent who would seek the liberty of this Court to verify if the above statement is correct. On complying with the above conditions, the impugned order of assessment shall be treated as show cause notice and the petitioner shall file their objections within a period of four weeks from the date of receipt of a copy of this order. Petition disposed off.

  ---

• 2025 (1) TMI 406
  Challenge to impugned order passed by the respondent relating to the assessment year 2019-20 - petitioner would submit that they would pay the balance remaining out of the 25% after deducting the monies which is stated to have been paid - HELD THAT:- On complying with the above conditions, the impugned order of assessment shall be treated as show cause notice and the petitioner shall file their objections within a period of four weeks from the date of receipt of a copy of this order. The impugned order passed by the respondent dated 30.08.2024 is hereby set aside - Petition disposed off.

  ---

• 2025 (1) TMI 405
  Reversal of ineligible and excess claimed blocked ITC - Mismatch Between GSTR 3B and GSTR 2A - Mismatch Between GSTR 3B and GSTR 1 - petitioner is ready and willing to pay 25% of the disputed tax and that he may be granted one final opportunity before the adjudicating authority to produce the relevant documentary evidences, to which the learned Additional Government Pleader appearing for the respondent does not have any serious objection. HELD THAT:- The petitioner shall deposit 25% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order. The impugned order dated 03.07.2024 is set aside. Petition disposed off.

  ---

• 2025 (1) TMI 404
  Seeking leave to amend the Petition and challenge Show Cause Notice dated 12 February 2020 - HELD THAT:- Instead of allowing the Petitioner to challenge the Show Cause Notice at this belated stage, we think that interest of justice would be better served if the Petitioner responds to the Show Cause Notice by raising all permissible defences, including the defence that the matter is covered by certain decisions of this Court. Learned counsel for the Petitioner states that reply will be filed to the Show Cause Notice within two weeks from today. If the reply is indeed filed within two weeks from today, the Adjudicating Authority must consider such reply and the contentions raised therein and dispose of the Show Cause Notice by following the law and on its own merits. Petition disposed off.

  ---

• 2025 (1) TMI 403
  Challenge to attachment order - maximum period of attachment as provided under Section 83 of the Central Goods and Services Tax Act, 2017 has come to an end - HELD THAT:- In view of the submissions which have been made and the provisions contained in Section 83 of the Act of 2017, it is not required to keep this matter pending but to dispose off this writ petition with direction to Respondents No. 2 and 3-Punjab National Bank to allow the petitioner to operate its bank account unless the attachment of the account is in respect of some proceedings other than the one in connection with which order of attachment was earlier passed on 26.06.2023. Petition disposed off.

  ---

• 2025 (1) TMI 402
  Cancellation of GST registration of the petitioner - non-filing of returns for a continuous period of six months - HELD THAT:- Admittedly, the GST registration of the petitioner was cancelled due to non-compliance in filing returns, on account of the health condition of the Petitioner. Furthermore, the time limit for filing a statutory appeal against the cancellation order had also expired, and the petitioner claims that they were unaware of the notices and communications sent through the GST Portal. Therefore, this Court is of the view that the reason provided by the petitioner for non-compliance with the relevant provisions of the Act within the stipulated time appears to be genuine. The GST registration is restored subject to and conditional upon fulfilling the conditions imposed - petition disposed off.

  ---

• 2025 (1) TMI 401
  Issuance of a single consolidated show cause notice for more than one financial year - HELD THAT:- The petitioner has not made out any case for grant of relief on the ground that Ext.P1 show cause notice is a consolidated notice for several years mentioned above. The judgment of the Karnataka High Court, in M/S. BANGALORE GOLF CLUB VERSUS ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, KORAMANGALA, BENGALURU [ 2024 (10) TMI 116 - KARNATAKA HIGH COURT] relied on the judgment of the Madras High Court in TITAN COMPANY LTD., REPRESENTED BY ITS AUTHORIZED SIGNATORY MR. P. MANIVANNAN VERSUS THE JOINT COMMISSIONER OF GST CENTRAL EXCISE, THE ADDITIONAL COMMISSIONER OF GST CENTRAL EXCISE [ 2024 (1) TMI 619 - MADRAS HIGH COURT] , where again the question considered was in relation to the proceedings under Section 73 of the GST Act. The court in M/s. Banglore Golf Club held ' Based on the established legal principles and the precedent set by the Hon'ble Apex Court, this Court finds that the respondent erred in issuing a consolidated show cause notice for multiple assessment years, spanning from 2019 to 2023-24.' Coming to the contention of the learned counsel for the petitioner, that the petitioner has been given a very short time to reply to the show cause notice which runs to 1622 pages (including the documents relied upon), some reasonable time must be permitted to the petitioner to file a reply to the show cause notice. Accordingly, it is directed that the time for filing a reply to Ext.P1 show cause notice shall be extended till 21.11.2024. Since the extension of time is at the request of the petitioner, any limitation for passing orders for any of the financial years will also stand extended by similar period i.e. the period from 21.10.2024 (last date for filing reply as per show cause notice) till 21.11.2024 will stand excluded.

  ---

• 2025 (1) TMI 400
  Seeking grant of bail - accused petitioner has created fake firms and has issued goods/ invoices and has pass on the input tax credit - offence under section 132 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- It is found that the present case has been registered by the Department on the basis of the statements of one Mr. Ashutosh Garg and the Department has relied upon the statements of Mr. Ravi Kumar, Mr. Jatin Gupta, Sanket Gupta and Mr. Anil Kumar. Along-with the complaint, the prosecution has submitted the list of witnesses (Annex.A), where only 5 Officers of the Department have been made witnesses and none of the persons named above, whose statements recorded under section 70 of the Act of 2017, have been incorporated as witnesses to the matter - It is a settled law that until and unless these above- named persons are made witnesses or accused, their statements cannot be relied upon because it is the right of the accused to cross-examine the witnesses to prove the trustworthiness of their version. The allegation against the accused petitioner is that he has issued fake invoices so as to pass on the input tax credit which has caused huge loss to the economy by evasion of GST - The investigation is continuing for the last more than one year and the complaint has already been filed against the accused petitioner. The Department has not been even able to find out that how much input tax credit has been claimed by which of the beneficiaries. During the course of arguments, on a query put- forth by the Court, the learned Public Prosecutor on instructions stated that in cases registered under section 132 of the Act of 2017, the Competent Authority can continue the investigation for a maximum period of five years. He on instructions of the Department Officers also stated that in the present case, they will conclude the investigation within maximum further one year. Once a complaint has been filed on the basis of investigation made by the prosecution, in a criminal jurisprudence no further evidence collected, can be used against such an accused person. Conclusion - The present case was registered on the basis of statement of Mr. Ashutosh Garg, who is also said to have been involved in the evasion of GST by creating fake invoices in the names of fake firms to pass on input tax credit. The amount of alleged input tax credit wherein Mr. Ashutosh Garg is found involved, is more than the alleged input tax credit. The maximum punishment for the offence alleged against the accused petitioner is five years and presently the accused petitioner has already suffered the custody of five months. This Court without expressing any opinion on the merits and demerits of the case deems just and proper to release the accused-petitioner on bail - bail application allowed subject to fulfilment of conditions imposed.

  ---

• 2025 (1) TMI 399
  Seeking for issuance of an appropriate writ, order or direction, directing the respondents to reimburse the extra GST amount paid @ 6% from 01.01.2022 to 30.09.2022 along with interest - grievance of the petitioner is that despite the enhancement from 01.01.2022, the respondents are paying the running bills with 12% GST and the petitioner is paying 18% GST - HELD THAT:- Respondent No.4 which is a State GST Department, according to which also the rate of GST has been enhanced from 12% to 18% and same is liable to be paid by respondent No.2 which is a Government Entity. Respondent No.2 is directed to pay the difference of GST amount to the petitioner @ 6% from 01.01.2022 to 30.09.2022 with a period of three months from the date of receipt of certified copy of this order, failing which the petitioner shall be entitled for interest @ 6% per annum from the date of entitlement. Petition disposed off.

  ---

• 2025 (1) TMI 398
  Whether order of disallowing credit could be passed by the Competent Authority i.e., Deputy Commissioner, State Tax without hearing the petitioner? - violation of principles of natural justice - HELD THAT:- Admittedly, under Rule 86A of the RGST Rules, 2017/the CGST Rules, 2017, the authority competent to disallow debit/block credit is the Commissioner or an officer authorised on his behalf, not below the rank of Assistant Commissioner. The law further requires that such an officer having reasons to believe that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible as provided in clauses (a) and (b), may for the reasons to be recorded in writing, not allow debit of an amount equivalent to such credit in electronic credit ledger for discharge of any liability under Section 49 or for claim of any refund of any unutilised credit. In this case, the notice was given by an authority who was not competent to take decision i.e., Joint Commissioner, whereas, the impugned order has been passed by the Deputy Commissioner, who is a competent authority but who did not give notice, nor heard the petitioner. This prima facie appears to be in utter violation of principles of natural justice - The submission of learned Additional Advocate General that the authority, who gave opportunity of hearing, collected material and forwarded the same to the competent authority fulfills the requirement of principles of natural justice, cannot be accepted at this stage. The action of the respondents in blocking the electronic credit ledger of the petitioner is kept in abeyance and the respondents are restrained from giving effect to decision of blocking credit ledger of the petitioner. List this case for final hearing at motion stage in the last week of November, 2024.

  ---

• 2025 (1) TMI 397
  Rejection of refund of inputs on account of inverted rate of duty structure - Scope of the term Services in the formula for refund - HELD THAT:- The instant petition is disposed of with liberty to the petitioner-Firm to move a fresh application seeking refund in the spectrum of service, which is covered by the amendment in law. Such application shall be decided by the respondents strictly in accordance with the retrospective amendment made in the Rule 89 Sub-Rule (5) of CGST Rules, 2017 and also in accordance with the other laws applicable. Accordingly, the respondents shall be required to operate the GST portal.

  ---

• 2025 (1) TMI 396
  Vires of section 16(2)(c) of the Central Goods and Services Tax Act, 2017, identical to the Gujarat Goods and Services Tax Act, 2017 - seeking entitlement for Input Tax Credit (ITC) - HELD THAT:- Rule, returnable on 29th September, 2022. Notice to the learned Attorney General of India is already issued as per order dated 1.12.2020.

  ---

• 2025 (1) TMI 395
  Seeking issuance of a Writ of Mandamus directing the first to fifth respondents to disburse the Service Tax, Interest and Penalty amount to the petitioner for the services rendered by him - HELD THAT:- Reliance placed on the decision rendered by this Court in the case of V. GOPALAKRISHNAN VERSUS THE GOVERNMENT OF TAMIL NADU, THE ENGINEER CHIEF, THE CHIEF ENGINEER, THE SUPERINTENDING ENGINEER, THE EXECUTIVE ENGINEER, THE ASSISTANT COMMISSIONER OF CENTRAL GST AND CENTRAL EXCISE, DINDIGUL. [ 2023 (7) TMI 1532 - MADRAS HIGH COURT] , wherein, a direction was given to the Principal Secretary of Public Works Department to consider the case of the petitioners therein. This Writ Petition is disposed of by permitting the petitioner to approach the first to fourth respondents to reimburse the tax on account of increase in the rate of tax after implementation of GST, applying principle in Section 64A of the Sale of Goods Act, 1930.

  ---

• 2025 (1) TMI 394
  Classification of goods - Aorom Herbal Smokes - to be classified under HSN 24029010 (tobacco substitutes) or HSN 3004 (medicinal products)? - rate of GST to be paid by appellant on sales of Aorom Herbal Smokes - whether the product is a medicinal cigarettes? - HELD THAT:- In para 10.2 of the impugned ruling, GAAR reproduced section 3 (a) of the Drugs and Cosmetics Act, 1940, which states that Ayurvedic, Siddha or Unnai Drug, includes all medicines intended for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, and manufactured exclusively in accordance with the formulae described in the authoritative books of Ayurved, Siddha and Unani Tibb systems of medicine, specified in the First Schedule. GAAR, further goes on record that the appellant was not in a position to substantiate/pin point the authoritative books of Ayurved, according to which the subject goods have been manufactured. On being specifically asked during the course of personal hearing, the appellant failed to inform the name of the authoritative book of Ayurved. Further, during the course of personal hearing it was also informed that they do not hold any license permitting them to manufacture the said goods. This being the fact, leads us to a conclusion the appellant has failed in making out a case of their product falling under the category of medicinal cigarettes . Whether the cigarettes manufactured by the appellant, containing certain types of products are specifically formulated to discourage the habit of smoking? - HELD THAT:- The product of the appellant is a substitute of cigarette and is also manufactured and marketed with the said aim in mind. Therefore, the averment of the appellant in para 13 to the effect that It is submitted that such understanding is factually incorrect as the herbal smokes manufactured by the appellant are not intended to assist the smokers to stop smoking , belics fact - the product is classifiable under HSN 24029010 more so since it is not a medicinal cigarette and secondly since the appellant himself, in his brochure claims that the product in question, is a substitute to cigarette and is also intended to addicts who really want to quit the smoking habit. Conclusion - The product of the appellant is a substitute of cigarette and is also manufactured and marketed with the said aim in mind. The appeal filed by appellant M/s Aorom Herbotech is dismissed.

  ---

• 2025 (1) TMI 393
  Relevant time of supply - What is the time of supply for the purpose of discharge of GST in respect of mobilization advance received by it for construction services? - HELD THAT:- A conjoint reading of both the sections 2 (31) and 13, leads to a conclusion that the liability to pay tax on services shall arise at the time of supply, which will be the earliest of the date of issue of invoice by the supplier, if it is issued within the prescribed period or the date of receipt of payment, whichever is earlier . The explanation to section 13 (2) through a deeming provision states that the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment that the date of receipt of payment shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier. The averment of the appellant that the mobilization advance is not in the nature of payment; that it is merely a transaction in money; that consideration excludes deposit, is not a legally tenable argument. Further, the findings of the GAAR concurred with, that the time of supply in respect of the mobilization advance/advance payment received by the appellant in respect of supply of service, is the date of receipt of such advance. The question of applicability of notification No. 66/2017-CT (Rate) dated 15.11.2017, does not arise, owing to the fact that it is already held that in terms of the agreement between the appellant and MORT H, the supply is in respect of services. The said notification is applicable only in respect of supply of goods. Conclusion - The time of supply for GST purposes is the date of receipt of the mobilization advance. The appeal filed by appellant M/s S.P. Singla Constructions P Ltd. is rejected.

  ---

• 2025 (1) TMI 392
  Profiteering - Respondent had reduced, re-fixed and displayed the MRPS of the impacted SKUs commensurately w.e.f. 15.11.2017 after the rate of tax was reduced on them and conveyed the same to his Dealers or not - benefit of tax reduction passed on or not - violation of provisions of Section 171 of GST Act - HELD THAT:- From a bare perusal of the provisions of Section 171 of the Act and also the interpretation of Section 171 by the Hon'ble Delhi High Court vide its judgment dated 29.01.2024 [ 2024 (1) TMI 1248 - DELHI HIGH COURT] it emerges that the benefit of tax reduction must be passed on to the consumer by the manufacturer and sellers. The amount foregone from the public exchequer in favor of the consumers cannot be appropriated by the manufacturers, traders, distributors etc. When the Goods and Services Tax rate gets reduced the final price paid by the recipient requires to be reduced. The obligation of effecting/making a commensurate reduction in prices, is relevant to the underlying objective of the Goods and Services Tax which is to ensure that manufacturer/suppliers pass on the benefit of reduction in the rate of tax to the consumers, especially since the Goods and Services Tax is a consumption-based tax and the recipient (consumer) practically pays the taxes which are included in the final price. The tax foregone by the authorities has to be passed on to the consumers as commensurate reduction in price. The Respondent was legally required to reduce, re- fix and display the MRPS of the impacted SKUs commensurately w.e.f. 15.11.2017 and was also legally required to affix sticker or stamp or online print the reduced MRPS on the stock lying with him as on 15.11.2017. By doing so the Respondent would have passed on the benefit of tax reduction to the ultimate consumers who bear the burden of tax as per the provisions of Section 171 of the CGST Act, 2017. Conclusion - Since the final price paid by the end consumer has not been reduced commensurately, as per Section 171, the Report of the DGAP stating that the Respondent has not violated the provisions of Section 171 of the CGST Act, 2017 cannot be accepted. The DGAP is directed to re-investigate the case in terms of the Hon'ble Delhi High Court judgment dated 29.01.2024 and submit report under Rule 133(4) of the CGST, Rules, 2017.

  ---

• Income Tax

• 2025 (1) TMI 391
  Validity of reassessment proceedings - order is at variance with the allegations that were made in the impugned notice issued u/s 148A (b) - HELD THAT:- We find merit in the contention that the allegations made in the impugned order u/s 148A (d) of the Act is at variance with that as was set out in the impugned notice issued u/s 148A (b) of the Act. The very purpose of issuing a notice is to enable the assessee to explain the information available with the AO and to establish that the said information does not indicate that the petitioner s income has escaped the assessment. Since, the allegations made in the impugned notice issued under Section 148A (b) is at variance with the grounds raised in the impugned order passed u/s148A (d) of the Act, the petitioner did not have any effective opportunity to further explain that the said information did not indicate that its income had escaped assessment. AO has not considered the petitioner s claim that its income that is alleged to have escaped assessment, is a part of the income as was disclosed in its books of account and was also subject matter of the assessment. We consider it apposite to set aside the impugned notice as well as the impugned order. It is so directed.

  ---

• 2025 (1) TMI 390
  Reopening of assessment - Report generated by the Central Goods and Service Tax ( CGST ) Authorities that certain entities were engaged in issuing/generating/providing fake/bogus invoices to pass on a fraudulent Input Tax Credit ( ITC ) without supply of goods - HELD THAT:- The approach of the assessing officer was totally unfounded for more than one reason. The primary reason being the assessing officer s understanding of the GST transactions; secondly, the assessing officer s complete mis-reading of the facts, this despite the correct facts being placed on the record of the assessing officer by the petitioner; and thirdly, tangible material in the form of all documents pertaining to the professional services as rendered by the petitioner to M/s Flash Forge and all the details in that regard as reflected in the books of accounts in relation to receipt of fees, the TDS amounts deposited as also the GST amounts deposited in the treasury, have been completely overlooked, misconstrued by the officer. We are in fact not only surprised but pained with the approach of not only the assessing officer in showing such gross non-application of mind, but also with the mechanical approach of the PCIT, Mumbai, in according approval to the issuance of notice to the petitioner under Section 148A (b). This aspect we advert to little later. We wonder as to how without verifying the petitioner s credentials and merely on the basis of some information which was available with the CGST authorities, the assessing officer without verifying the returns which were filed by the petitioner and the supporting documents, qua the professional fees as received by the petitioner from M/s. Flash Forge, could have proceeded to issue a notice under section 148A (b) The information which was gathered by the department indicated that M/s Flash Forge had made payments to the petitioner. However, there was no material for the assessing officer to jump to a conclusion, that having received such amount, the petitioner was deemed to be involved and/or was the beneficiary of any bogus input tax credit as being portrayed by the CGST authorities. In our opinion, when tested on record it was a wholly unwarranted and a wholly erroneous assumption of the assessing officer and the PCIT to reopen the petitioner s assessment on such count. In fact, this is a case depicting a mechanical approach being adopted by both these officers. It is classic case wherein certain information which may be relevant in so far as the CGST authorities are concerned in relation to the transactions qua a registered person under the CGST Act is being mechanically and without application of mind, taken to be relevant, in so far as the proceedings under the IT Act are concerned, more so, when it is a case of re-opening of the assessment. We say so, as the CGST regime is governed by the provisions of the Central Goods and Service Tax Act and the State Goods and Service Tax Act as applicable. In so far as the income tax is concerned, it is governed under an independent enactment, namely the Income Tax Act, 1961. Both these Acts operate in different fields, with independent scheme of taxation, hence, there is no question of any overlapping or intermixing of the jurisdictions of these authorities, which stand compartmentalized. Even if some information is available under the CGST regime in respect of the registered person (assessee), the same cannot ipso facto and/or automatically apply to an assessee under the IT Act, unless the assessing officer has tangible material to indicate that certain transactions, which are relevant to the CGST are also relevant and necessary, in so far as the returns filed by an assessee are concerned, and any bogus transactions or anything in relation to such transactions, becomes relevant in so far as in a given case, qua the income disclosed by the assessee under the IT Act is concerned. Validity of PCIT Granting approval u/s 151 - A firm of Chartered Accountants, which is providing to its clients accounting and audit services, certainly cannot be alleged to have made bogus purchases from One World Group of Entities and in respect of which there was not a iota of material, over and above this, the petitioner has been alleged of having accommodation entries in regard to these purchases which are stated to be inflated resulting in suppression of profits, thereby reducing of the taxable income of the petitioner, while claiming fraudulent ITC, when there was no ITC whatsoever being claimed by the petitioner. All these remarks being made by the PCIT against the petitioner in granting approval under Section 151 of the IT Act for issuing notice under Section 148 of the IT Act, in our opinion, has crossed all limits of legitimacy in the discharge of the official duties by the PCIT. From the reading of the PCIT s remarks we may observe that if such high officers act with such colossal non-application of mind, amounting to an abuse of the authority and powers which are vested in him in law, which is coupled with a serious duty and an obligation to adhere to the correct facts of the case and on appropriate understanding of the law in grant of an approval, what can be the plight of the assessee. Thus, the impugned show cause notice issued to the petitioner u/s 148A (b) and also the consequent order u/s 148A (d) quashed - Decided in favour of assessee.

  ---

• 2025 (1) TMI 389
  Reopening of assessment u/s 147 - unexplained cash u/s. 69 - addition on the basis of disclosure from seized documents and on the basis of the statements of the partner, accountant and account assistant - HELD THAT:- AO has not recorded the reasons for reopening the assessment. The objection of the assessee against the reasons were not disposed of by AO. No incriminating evidence was shared with assessee before making the quantum addition. The addition has been made merely on the basis of unauthenticated documents found in search and on the basis of statements of Partner, Accountant and Account assistant. No opportunity to cross examine these persons was afforded to assessee. Issue in the present case is directly covered by the order passed by ITAT Mumbai bench in [ 2024 (5) TMI 91 - ITAT MUMBAI] in assessee s own case wherein held accountant in the statements recorded has explained how the entries are to be decoded for understanding what each entry means really. A sample entry has been considered and explained i.e. how to read the alphabets and the number in the entry. AO based on the said explanation proceeded to interpret the impugned entries as pertaining to the assessee. However we notice from the assessment order that the AO has not brought out any specific finding on how the impugned entries are linked to the assessee and whether any other seized material other than what is shared with the assessee have been used to aid the interpretation. Decided in favour of the assessee.

  ---

• 2025 (1) TMI 388
  Addition u/s 68 - sale consideration received on sale of shares are not genuine transaction and is only accommodation entries in the form of Long Term Capital Gain - HELD THAT:- Today is the 10th time of hearing of this appeal, none appeared on behalf of the assessee and no Authorization given in favour of any Representative. Even in the previous occasion only stereo-typic adjournment letters were filed by the assessee and no evidence or Paper Book filed by the assessee. This clearly shows that the assessee is not interested in pursuing the above appeal. Further the ground raised by the assessee is also general in nature without adducing any evidences in support of its claim. In the absence of the same, the Ld. CIT(A) confirmed the addition after calling for Remand Report from the AO. Further the case laws relied by the A.O. and CIT(A) are in favour of the Department. Decided against assessee.

  ---

• 2025 (1) TMI 387
  Addition u/s 68 - bogus share transaction - Allegation of price rigging or circulation of black money to generate LTCG - HELD THAT:- Assessee earned LTCG related to the scrip MPL through transactions conducted on the BSE. No adverse findings or comments have been issued by SEBI regarding this scrip, and the Ld. DR was unable to submit any such directions or allegations by SEBI related to the scrip in question. AO did not reject any of these primary pieces of evidence during assessment proceeding. Hon ble Bombay High Court in Shyam R. Pawar [ 2014 (12) TMI 977 - BOMBAY HIGH COURT] held that when details of share transactions are substantiated by DEMAT account statements and contract notes, and the AO fails to prove such transactions as bogus, the capital gains cannot be treated as unaccounted income under Section 68 of the Act. We find no basis to conclude that the assessee was involved in any price rigging or circulation of black money to generate LTCG. The evidence and documents submitted during the assessment proceedings were neither denied nor challenged in terms of their authenticity. - Decided in favour of assessee.

  ---

• 2025 (1) TMI 386
  Addition of interest - interest expenditure claimed by the assessee u/s 57(iii) - no business exigency for which the loan was given at a lower rate of 5.22% which was availed by the assessee at a rate of 9.04%, accordingly, the AO restricted the interest expenditure to a rate of 5.22% - HELD THAT:- Revenue has emphasized on the aspect of business prudence in advancing the loans to the sister concern at lower rates than the rate at which the funds were borrowed by the assessee. In this regard, it is pertinent to note that it is trite law that the test of commercial expediency/business prudence is required to be judged from the point of view of the businessman and not the Revenue. Therefore, we do not find any basis for restricting the interest expenditure claimed by the assessee under section 57(iii) of the Act. The loan availed by the assessee on interest was used to lend funds to the sister concern on interest and the interest expenditure incurred was claimed as a deduction under section 57(iii) of the Act. We are considered opinion that the assessee is entitled to claim a deduction under section 57(iii) of the Act in respect of interest expenditure while computing the income under the head income from other sources . Accordingly, the impugned disallowance made by the AO and upheld by the learned CIT(A) is deleted. Appeal of the assessee is allowed.

  ---

• 2025 (1) TMI 385
  Deemed dividend addition u/s 2(22)(e) - advances received by company wherein assessee is one of the shareholders having 35% holding in the company - HELD THAT:- Circular No. 19 of 2017 dated 12/06/2017 issued by the Central Board of Direct Taxes, which provides that the trade advances, which are in the nature of commercial transactions, would not fall within the ambit of the word advance in section 2(22)(e). We find that in Pradip Kumar Malhotra [ 2011 (8) TMI 16 - CALCUTTA HIGH COURT] held that gratuitous loan or advance given by the company to its shareholders would come within the purview of section 2(22)(e) but not the cases where the loan or advance is given in return to an advantage conferred upon the company by such shareholder. In the present case, upon receipt of advance from M/s AGIV India Pvt. Ltd., M/s Paros Corp purchased the shares of IND-AGIV Commerce Ltd. and RST Technologies Ltd., which facilitated the completion of the transaction between M/s AGIV India Pvt. Ltd. and M/s FOR-A Group Japan. Thus, the advance was given in return for an advantage conferred upon M/s AGIV India Pvt. Ltd. by the assessee. Such a transaction, being completely in the nature of a commercial transaction, would not fall within the ambit of the provisions of section 2(22)(e)and therefore the addition made by the AO is deleted. As a result, grounds raised by the assessee are allowed.

  ---

• 2025 (1) TMI 384
  Validity of Reassessment proceedings - reason to believe - assessee has not offered to tax certain receipts from Jindal Steel and Power Limited - HELD THAT:- We observed that as per the information on record, the AO was of the opinion that there is substantial receipts not offered to tax by the assessee and accordingly, he reopened the assessment. Even though there is a small factual error, however the gross amount in terms of rupees mentioned in the reasons supplied to the assessee and the additions made in the assessment order are same. Therefore, we are not inclined to proceed with the objections raised by the assessee for reopening of the assessment. Consideration received for supply of drawings and designs should be classified as Fees for Technical Services (FTS) or Business Profits under the Double Taxation Avoidance Agreement (DTAA) between India and Germany - Coming to the issue on merits, we observed that the assessee has declared three invoices in its return of income as exempt from tax however when the case was reopened it has filed its return of income by bringing on record facts clearly and it was submitted before the AO as well as ld. CIT (A) that two invoices of Euro 2,35,000 and 30,500 relates to supply of drawings and designs to Jindal Steel and Power Limited and which is exempt from tax on the basis of ITAT, Vishakhapatnam decision which is in favour of the assessee (it is decided in the case of M/s. SMS Schloemann Siemag AG Germany [ 2001 (4) TMI 62 - ANDHRA PRADESH HIGH COURT] which is the sister concern of the assessee). With regard to third invoice of Euro 9,49,600, it was submitted before the ld. CIT (A) that it is relating to supply of equipment. CIT (A) appreciated the above facts on record and deleted the addition made by the AO relating to supply of equipments. However, he did not consider the decision of ITAT, Vishakhapatnam relating to supply of drawings and designs as royalty/FTS and he proceeded to sustain the addition on the two invoices which assessee has not declared in their return of income. After considering the factual matrix on record, we observed that the ITAT, Vizag has considered the similar issue on record and decided the issue of supply of drawings and designs in favour of the assessee even though as royalties. However, the provisions of royalties and FTS are similar in nature, therefore, we are inclined to accept the submissions of the assessee and we direct the AO to delete the additions proposed in this case. Claim of the appellant to treat the proceeds towards such supervisory services as non-taxable business profits in the absence of Permanent Establishment ( PE ) in India for relevant contracts in terms of Article 7 of the DTAA - CIT (A) has enhanced the addition on the other supervisory services provided by the assessee in the new project for a period of 30 days - HELD THAT:- CIT (A) has enhanced the addition with the observation that the project in which the assessee has provided supervisory services for a period of less than six months still he treated the assessee as a deemed PE and proceeded to enhance the addition. As per the facts on record, assessee has followed contract completion method and accordingly, offered to tax in AY 2016-17 and assessee has submitted the relevant Balance Sheet in its paper book. For the sake of verification, we deem it fit and proper to remit the issue back to the file of AO whether the assessee has offered the relevant revenue based on the method followed by it i.e. contract completion method in the AY 2016-17. In case, it is found that assessee has offered the same in the year of completion, no further addition can be made in the present assessment year. Accordingly, ground no.4 is remitted back to the file of AO with the limited purpose to verify the above aspect after giving opportunity of being heard to the assessee. Hence, ground no.4 is allowed for statistical purposes.

  ---

• 2025 (1) TMI 383
  Denying registration u/s 12AB - objects of the Trust exclusively for Jain Community which is violation of clause (d) to Explanation of Section 12AB(4) of the Act r.w.s. 13(1)(b) - scope of amended provisions of Section 12AB - HELD THAT:- A conjoint reading of Sections 11, 12, 12A and 12AA of the Act makes it clear that registration u/s 12A and 12AA is a condition precedent for availing benefit u/s 11 and 12. Unless an institution is registered under the aforesaid provisions, it cannot claim the benefit of Sections 11 and 12. Section 13[1][b] prescribes the circumstances wherein the exemption would not be available to a Religious or Charitable trust otherwise falling u/s 11 or 12. Therefore, it requires to be read in conjunction with the provisions of Sections 11 and 12 towards determination of eligibility of a Trust to claim exemption under the aforesaid provisions, while granting registration. CIT [E] has considered the provisions of sec 13(1)(b) of the Act which is applicable only in a case of Charitable Trust or Institution created or established after commencement of this Act and only for the benefit of any particular religious community or caste namely Jains and thereby denied the registration, which in our considered view is well within the provision of amended law and therefore the order denying registration passed by CIT[E] does not require any interference. Decided against assessee.

  ---

• 2025 (1) TMI 382
  Penalty by invoking the provision of sec 271E - default of sec 269T while making repayment of loans by journal entries /book entries to the partners - transactions by way journal entry - HELD THAT:- Where the repayment has been made by the partnership firm to its partners, such transactions are not covered within the fold of s. 269SS/269T of the Act for the reason that under general laws, partnership firm is no different from partners constituting it and a firm is only a compendious name for partners who carry on business etc. It is the case of the assessee that the repayment has been made by journal entry and a small part paid through banking channel. Thus, the facts available on record would show that no actual payment has been made in cash but has been merely effected by journal entry in the books of the assessee. As in the case of CIT vs Noida Toll Bridge Co. Ltd. [ 2003 (1) TMI 46 - DELHI HIGH COURT] had taken judicial view that such repayment of loan by way of journal entry falls outside the ambit of s. 269T. In any case, such transactions are entitled to immunity available u/s 273B of the Act which stipulates that penalty u/s 271E is not to be imposed on a person for any failure, if he proves that there was reasonable cause for such failure in accepting/repaying the loan/deposits in modes other than the ones prescribed. The journal entries in the instant case appear to have been made with the partner of the firm under the bonafide belief that such transactions would not be hit by the provision of s. 269T in light of various judicial decisions on the issue including the judgement of the Jurisdictional High Court. There is no finding in the orders of the lower authorities that such transactions by way journal entry were undertaken to evade any tax in any manner. Appeal of the assessee is allowed.

  ---

• 2025 (1) TMI 381
  Expenditure incurred on CSR - Allowable business expenditure or not? - HELD THAT:- Expenditure incurred on CSR activities may not have direct nexus with the activities of the assessee but it may have indirect and may bring goodwill to the assessee. We observed that similar view was expressed by the coordinate Bench in the case of Ranbaxy Laboratories Ltd. [ 2009 (6) TMI 126 - ITAT DELHI-I] and decided the issue in favour of the assesse. Thus as the assessee has incurred expenditure for the development of their own staff/workers as well as in the general public interest without there being any obligation imposed upon them, ground decided in favour of assessee. Addition on account of Long-Term Capital Gain ( LTCG) on sale of land - determination of cost of acquisition for the land in question - adjustment of impairment loss - HELD THAT:- Assessee has not brought on record after acquiring the assets from M/s. Brindavan Beverages, how the cost are allocated and for the purpose of registration, it has booked the value of Rs. 20,93,29,172/-, the combined value for land and building and when such slum sales are being recorded in the books of account the value has to be recorded on the basis of transfer value and if there is any difference between assets acquired and the liability, normally the difference would be charged to goodwill. Nothing has been brought on record to show that what is the value recorded by the assessee in FY 1999-00 after acquisition of the abovesaid factory with the parcel of freehold land and it has only filed fixed assets schedule it contains details of addition on freehold land of Rs. 15,66,92,008/- and also there are several additions in building as well. It is the duty upon the assessee only to show the fixed assets schedule prepared for the purpose of income-tax alone and in which value of respective assets are disclosed in terms of addition and deletions which tallies with the fixed assets schedule prepared for the purpose of Companies Act. No depreciation schedule prepared for the purpose of income-tax for AY 1999-00 to AY 2014-15 are submitted. The reason for demanding depreciation schedule is, the assessee has acquired not only freehold land but also various buildings. The assessee must have declared the buildings separately and claimed depreciation. No depreciation is allowed in freehold land. Therefore, the claim of the assessee due to business impairment loss adjustment has altered the value of freehold land which assessee has subtracted during the year upon sale is not acceptable and considering the fact that the index cost of acquisition has to be calculated from the actual cost of land acquired by the assessee in FY 1999- 00 - Decided against assesee. Disallowance on account of penalty paid for wrong CENVAT utilized - AO disallowed the said expenses holding the same to be in the nature of penalty for violation of any law for the time being in force - HELD THAT:- As per the provisions of Section 37, Explanation 1, any expenditure incurred which is offence or prohibited by law shall not be deemed to be incurred for the purpose of business, which shall not be allowed to claim as business expenditure. That be the case, the issue under consideration is not yet settled, unless it is settled as compensation or compounding in nature, the same cannot be allowed to claim as expenditure. Therefore, the above expenditure is not allowable at this stage considering the nature of violation. Decided against assesee. Delayed payment of the Employees contribution to the Provident Fund, ESI and other welfare funds - HELD THAT:- We observed that this issue is now settled in the case of Checkmate Service Pvt. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] Accordingly, in our considered view, this issue is already settled in favour of the Department. Addition made by the AO on account of inventory loss and leakage - HELD THAT:- We observed that the same issue arose in assessee s own case for AY 2010- 11 [ 2023 (7) TMI 1150 - ITAT DELHI] and the same was dismissed by a coordinate Bench of ITAT and the said order in AY 2010-11 has also been followed in subsequent AYs 2011-12 to 2013-14 and 2017-18. Disallowance of traffic challans and disallowance of deposits from customers to be allowed in favour of assessee as relying on assessee own case [ 2023 (6) TMI 393 - ITAT DELHI] AY 2009-10 and [ 2023 (7) TMI 1150 - ITAT DELHI] AY 2010-11 respectively.

  ---

• 2025 (1) TMI 380
  Taxability in India - sale of software (prime) license fees - Fees for Technical Services (FTS) under the India-UK Double Taxation Avoidance Agreement (DTAA) or not? - Fees for provisions for other related services - HELD THAT:- We note that during the present assessment year i.e. AY 2020-21, AO has accepted the claim of the assessee that the sale of software (prime) license fee was not taxable. The Co-ordinate Bench of the Tribunal in AY 2019-20 in the case of the assessee [ 2023 (4) TMI 1088 - ITAT DELHI] held that when software itself was not taxable, the training and the related activities concerned with utilization and installation cannot be held to be FTS. CIT-DR could not bring any distinguishing facts to controvert the findings of the above order of the Tribunal. Department has not brought any evidence on record to substantiate that make available condition is satisfied in the case of the assessee for this assessment year. Therefore, we are of the considered view that when software itself is not taxable, the Fees for provisions for other related services will also not be taxable. Hence, the addition made treating the Fees for provisions for other related services as taxable is not acceptable and the same is deleted. Assessee appeal allowed.

  ---

• 2025 (1) TMI 379
  Taxability of Illegal Income - Prosecution initiated by the Income-tax Department u/s 277 - fraudulent claim of refunds by producing forged challans - Having recovered the entire amounts from the assessee, can the same amounts be treated as income of the assessee ? - Income-tax Department taxing @ 30-35% of the fraudulent income earned by the assessee by defrauding the Government Department HELD THAT:- While the taxability of the economic benefits derived from such fraudulent income is beyond the current scope, the fact that the assessee leveraged these funds for personal gains adds weight to the case for taxing the income in the year of accrual. This aligns with the established principle that income, once accrued or received, irrespective of its legality, must be taxed under the Income-tax Act, 1961. As an undisputable fact that the assessee has admitted to fraudulently earning income and parking the same in the accounts operated by him. The deliberate act of parking funds in the accounts operated by him do not absolve the assessee of the taxability of such income. The assessee had dominion over the funds and utilized them for economic gains, including investments. This clearly establishes that the income accrued to the assessee, making it taxable in his hands. The leveraging of fraudulently accrued income for economic benefits, such as investments in shares and deposits in the accounts operated by him, further supports its taxability in the hands of the assessee. While the taxation of economic benefits is beyond the current scope, it demonstrates that the assessee exercised full dominion and control over the funds. The fact that the fraudulent income was recovered or repaid in subsequent years does not negate the taxability of the income in the year of accrual. The doctrine of real income requires taxation at the time of accrual, irrespective of later events. In CIT v. Shoorji Vallabhdas Co. [ 1962 (3) TMI 6 - SUPREME COURT] held that income is taxable when it is received or accrued, and subsequent adjustments do not affect its original taxability. Thus, the assessee s claim for deductions in respect of recovery or repayment fails, as it does not satisfy the conditions enumerated in Section 57 of the Act. This provision permits deductions only for expenses incurred wholly and exclusively for the purpose of earning income. Recovery of fraudulent income is not an expense incurred for earning taxable income; rather, it represents restitution of wrongful gains. We also find that the Income-tax Department has initiated prosecution u/s 277 of the Act. This prosecution is primarily launched as per the provisions of the income-tax act for making false statements in verification under the IT Act. The deductions claimed for the recovery or repayment of fraudulent income in subsequent years are disallowed. Recovery of such income does not constitute an expense incurred wholly and exclusively for the purpose of earning income under Section 57 of the Act. Therefore, the order of the ld CIT(A) confirming the addition of the fraudulent income is hereby upheld. The denial of deductions for subsequent recovery is also upheld, as it aligns with statutory provisions of the Act as well as judicial precedents. Taxability arises at the point of accrual or receipt. Even if the income is later restituted or recovered, its taxability remains unaffected for the year of accrual. Subsequent adjustments do not negate the taxability for the original period for the matter generation, recovery and restitution are separate transactions. Thus, the act of restitution or recovery is treated independently for taxation purpose. Taxability remains intact for the year of accrual and recovery does not create a retroactive exemption. Under Section 57 of the Act, only expenses incurred wholly and exclusively for the purpose of earning income or deductible. Restitution does not meet the criterion. Allowing deductions for restitution of fraudulently earned income would undermine public policy by creating an incentive to commit fraud. In this case, the Income-tax Department has to act in dual role of the executor of the income-tax statute and also as an arm of Government. The prosecution launched was limited in its role as the executor of the income-tax statute. The act of perpetuation of a criminality per se have been ignored by the Income-tax Department as a part of Govt. of India. It is well settled principle that tax authorities are not only responsible for enforcing compliance under Income-tax Act but also act as an arm of Government in ensuring that violations of other laws particularly involving public exchequer are addressed through appropriate legal mechanisms. That is the reason inter-departmental organizations such as CEIB/SFIO/FIO have been established. Decided against assessee.

  ---

• 2025 (1) TMI 378
  Validity of assessment made u/s 153C being barred by limitation - AR submitted that the assessment year 2009 10 to 2012 13 would be beyond the block of 10 assessment years as per first proviso to section 153C and Explanation-1 to section 153A and assessment made u/s 153C dated 31/03/2022 for the assessment year 2009 10 would be time barred, is liable to be quashed - HELD THAT:- We find that the assessment year 2009-10, 2010-11 and 2011-12 is beyond the block of 10 year as per first proviso to section 153C read with Explanation-1 to section 153A and, therefore, notice issued under section 153C and assessment made under section 153C by the Assessing Officer for the assessment year 2009-10, 2010-11 and 2011-12 is barred by limitation and is invalid, bad in law and is hereby quashed for the want of valid assumption of jurisdiction on the part of the Assessing Officer. Validity of Satisfaction Note recorded by the AO of the searched person - We find that it is an admitted position that the consolidated satisfaction note was recorded by the Assessing Officer of the searched person before transmitting the documents/ information to the AO of the non-searched person i.e., the assessee in this case for the assessment year 2009 10 to 2019 20 i.e., for 11 years and thereafter the documents have been transferred on 21/01/2021 to the AO of the non searched persons i.e., the assessee company and subsequently the AO of the assessee company has further recorded consolidated satisfaction note for the assessment year 2009 10 and 2010 11 and thereafter the AO further recorded another consolidated satisfaction note for the assessment year 2011 12 to 2013 14, which is clear from the above discussions. We rely on the judgment of Sunil Kumar Sharma [ 2024 (2) TMI 116 - KARNATAKA HIGH COURT ] wherein it has been held that satisfaction note is required to be recorded u/s 153C for each assessment year and in the impugned proceedings, a consolidated satisfaction note has been recorded for different assessment year by both the AO i.e., the Assessing Officer of the searched person has recorded consolidated satisfaction note for the assessment year 2009 10 to 2019 20 and thereafter the Assessing Officer of the assessee has recorded consolidated satisfaction note for the assessment year 2009 10 and 2010 11 and another consolidated satisfaction note for the assessment year 2011 12 to 2013 14. There is no co relation with the documents year wise to clearly point out as to how the documents pertain to the assessee. Additions on account of unexplained cash credit and that too share capital / unsecured loans advances - In our opinion, as the very usurpation of jurisdiction under section 153C is found to be bad in law for want of jurisdiction, the Assessing Officer was precluded from making any other addition in the assessments made for the assessment year 2009-10 to 2013-14. Hence, the action of the Assessing Officer in making addition under section 68 in the relevant assessment year 2009-10 to 2013-14 is held to be unsustainable for want of jurisdiction and is, therefore, it is invalied and bad- in law. Therefore, in view of the aforesaid discussions, we hold that the Assessing Officer s action of making addition under section 68 of the Act for the relevant assessment year 2009-10 to 2013-14 is untenable in the eyes of law and it is hereby quashed. Validity of approval granted u/s 153D by the Addl. CIT, Central Range 1, Nagpur, for making assessment under section 153C of the Act for the assessment year 2009 10 to 2013 14 - From perusal of the approval granted u/s 153D it emerges that it is granted on the same day itself on 31/03/2022 on the basis of letter dated 31/03/2022 by the Assessing Officer for seeking approval, though it is separate approval for each year but it is stereo-type approval, in mechanical routine manner, though it is recorded that he has perused the draft assessment order but he has not pointed out the mistake / error committed by the Assessing Officer in the alleged draft order. Addl.CIT did not mention anything in the approval order passed under section 153D dt.31/03/2022, even though for each year separately, towards his process of deriving satisfaction so as to exhibit his due application of mind. The Addl.CIT has failed to satisfactorily record its concurrence. Even the approval granted by the Addl.CIT does not refer to any seized material/assessment records/ satisfaction note or any other documents which could suggest that the Addl.CIT has duly applied his mind before granting approvals. There is no recording of satisfaction by the Addl.CIT in the impugned approval order as to whether the assessment records/ assessment folders/ files/ seized materials or any incriminating documents or other connected documents and papers/ various statements recorded under section 132(4) and section 131(1A) of the assessee or any other person/ appraisal report of the Investigation Wing of the Department/ materials on hand with the Department at the time of initiation of search or material evidences gathered were placed for its verification and the same were duly verified and/or examined by him as mandated under section 153D. In the absence of compliance of the above mandate, the approval order dated 31/03/2022, passed under section 153D becomes an empty formality without due process of law and, thus, not sustainable. This is nothing but an approval by way of mere mechanical exercise accepting the draft assessment order without any independent application of mind by the Addl.CIT. Thus approval given by the Addl.CIT, in our opinion, is invalid in the eyes of law and, therefore, hold that approval gvien under section 153D was granted in a mechanical manner and without application of mind and hence, it is treated as invalid and bad in law. Addition u/s 68 - The said sum is not found credited in the books of account of the assessee-Company in the assessment year 2009 10, which is sine qua non/ pre-requisite/ pre-condition for making addition under section 68 on account of unexplained cash credits and in absence of this pre-condition of recording of credit entry in the books of account which is mandatory for applying section 68, the addition is unjustified. Thus, we conclude that addition of ₹ 60 lakh made in the assessment year 2009-10 is merely on presumption, surmises and conjectures without bringing any material/ evidence on record by the Revenue for substantiating its contention that it is an undisclosed income in the hands of the assessee-Company for the assessment year 2009-10. Addition on account of unexplained cash credit u/s 68 involved in the assessment year 2013 14 in respect of the amount of ₹ 50 lakh received as share application money from M/s.Suraksha Projects Ltd. in the assessment year 2013-14, which was recorded in the books of account and has been declared income shown in IDS, 2016 (supra) and due taxes has been paid by the assessee. Further, for ₹ 40 lakh received as share application money from Shridhan Jewellery P. Ltd. in the assessment year 2013 14, which was recorded in the books of account and has been declared income shown in IDS, 2016 (supra) and due taxes has been paid by the assessee-Company; on 11/10/2016 as per the surrender made in survey under section 133A dated 26/09/2016 on account of share capital / share application money by the assessee and hence, further making addition of ₹ 1,25,00,000 by the Assessing Officer in assessment made u/s 153C on 31/03/2022 would tantamount to be double addition on the same amount which had already been offered for taxation by the assessee, which we hold to be unsustainable in the eyes of law, and hence, the addition of ₹ 1,25,00,000 lakh is liable to be deleted.

  ---

• 2025 (1) TMI 377
  Accrual of income India - salary accrued to a non-resident seafarer - foreign income of the assessee taxable in India or not? - salary income in foreign exchange to a non-resident assessee whose salary is accrued/ received outside India and remitted to India - process of remittance of funds from out of India to the NRE account of the assessee, the amount was credited in NRE account of the assessee. HELD THAT:- A perusal of the Circular No. 13/2017 dated 11.04.2017, which is clarificatory in nature, shows that the salary accrued to a non-resident seafarer for services rendered outside India on a foreign ship shall not be included in the total income merely because the said salary has been credited in the NRE account maintained with an Indian bank by the seafarer. In view of the CBDT Circular, the assessee is entitled to the claim of relief from the applicability of the provisions of section 5(2)(a) of the Act, which is also allowable to the income accrued outside India in view of the decision of Smt. Sumana Bandopadhyay Another [ 2017 (7) TMI 503 - CALCUTTA HIGH COURT] Thus income is held to be not taxable merely because it is credited in the NRE account of the assessee and the findings of the Ld. CIT(A) in this regard are reversed. Decided in favour of assessee.

  ---

• 2025 (1) TMI 376
  Delay filling appeal before CIT(A)/NFAC - non admission of appeal on reasonable cause for the purpose of condoning the delay arising therein - HELD THAT:- DR could hardly dispute the clinching fact that the CIT(A)/NFAC herein has even included the time period of Covid - 19 Pandemic outbreak on 15th March, 2020 till the date of filing of the appeal coming to 30th September, 2021 despite the fact that hon ble apex court s landmark decision in Re: Cognizance for Extension of Limitation [ 2022 (1) TMI 385 - SC ORDER ] has already directed exclusion thereof. We deem it appropriate to clarify that this is indeed not the Revenue s case that the assessee has not explained the impugned delay up to 15th March, 2022 in her condonation petition. Larger interest of justice would be met in case the assessee s instant appeal is restored back to the AO for his afresh appropriate adjudication. Assessee s appeal is allowed for statistical purposes.

  ---

• 2025 (1) TMI 375
  Addition u/s. 69A r.w.s 115BBE - cash deposits during demonetization - possibility of assessee s unaccounted money being deposited in cash - HELD THAT:- Schedule 5 to the Balance Sheet as on 31.03.2017, the assessee has given details of advances from customers.The assessee has furnished details of cash deposits in the bank on various dates which shows that the cash deposits in the bank are from either cash sales or advances from the customers. The assessee has also given comparative analysis of cash sales during Financial Year 2015-16 2016-17. A comparative analysis of above tables reveal that cash sales during Financial Year 2016-17 are less than in Financial Year 2015-16 and there has been no cash sales in Financial year 2016-17 after December 2016. Details furnished by the assessee reveals that there has been consistent cash deposits in the bank. It is not a case where cash deposits were only during the period of demonetization. The cash deposits in the bank were evenly spread out during whole year. The assessee has also given details of cash deposits during preceding assessment year. The assessee in the normal course of business has been depositing cash every month in the bank account. Thus the explanation furnished by the assessee cannot be rejected out rightly. The assessee has substantiated that in normal course of business, the assessee has been making cash sales and has been depositing same in bank account and has also been receiving cash advances from the customers which were also deposited to the bank account of the assessee. CIT(A) have taken a pedantic view in rejecting explanation furnished by the assessee especially when entire sales including cash sales are duly reflected by the assessee in books of account and the same has been accepted by the AO. Decided in favour of assessee.

  ---

• 2025 (1) TMI 374
  Reopening of assessment u/s 147 - reproduction of the Investigation Wing report - eligibility of reasons to believe - non independent application of mind - HELD THAT:- Reasons are merely reproduction of the Investigation Wing report and not a word of any material otherwise relied or examined from the assessment record of assessee or any other piece of document containing such information has been relied by the AO to indicate that there was any application of mind The settled proposition of law is that reasons for reopening should not be merely a conclusion to make reopening. It is necessary that there is independent application of mind by the AO to the tangible material which is relied to form the reasons to believe that income has escaped assessment. The conclusion of the AO in the present form are at best reproduction of the conclusion in the Investigation report and indeed it is a borrowed satisfaction. Thus, relying the judgment of Meenakshi Overseas Pvt. Ltd. [ 2017 (5) TMI 1428 - DELHI HIGH COURT] AND Akik Marketing India Pvt. Ltd. [ 2024 (1) TMI 608 - ITAT DELHI] inclined to allow assessee appeal.

  ---

• 2025 (1) TMI 373
  Validity of reopening of assessment - AO issuing the notice u/s 143(2) who did not have the jurisdiction over the case of appellant - improper service of notice - HELD THAT:- Admitted case of the assessing officer is that only one statutory notice u/s 143(2) was issued on 18.09.2013. There is no mention in the assessment order that the service was by postal mode or by substituted service. The narration of facts in assessment order only indicate that after the centralization notice was issued on 18.09.2013. Admittedly, the case was centralized by order dated 26.11.2013 from ITO, Ward 9(3), Kolkata to DCIT, Central Circle-14, New Delhi. Furthermore, if the copy of this letter dated 26.11.2013 is examined which is also made available on record with the report of the Department, this order was passed on 26.11.2013 and the endorsement was forwarded to the concerned authorities for giving effect to the order was signed on 03.12.2013. It can be observed that at Sl.No.4 a direction is issued to ITO, Ward 9(3), Kolkata with a request to intimate the concerned assessee and send compliance report to the CIT(A), Kolkata-III, Kolkata, after physical transfer of records are completed. This even makes it questionable as to how even without the communication of the letter dated 26.11.2013, the ITO, Ward 9(3), Kolkata may have forwarded the record with the Central Circle-14, New Delhi for issuance of statutory notice u/s 143(2) on 18.09.2013. Coming to the alleged fact of service of a notice dated 19.08.2013 by JAO by affixation, the affixation report dated 09.09.2013 is first of all silent with regard to the fact that the notice were actually affixed as no expression in that context is used. Now the said officer has merely mentioned Therefore, I served the notice . The report is silent of the exact places where the notice was allegedly affixed. There is no independent witness. There is no order sheet supporting the conclusion of the AO of any denial on the part of the assessee to receive the notices or that the assessee was in any way avoiding the personal service so as to order for service by affixation. In fact without specific direction to the serving inspector to serve by way of affixation there was no right with serving inspector to serve by affixation, without endorsing in report as what compelled to serve by substituted service instead of personal service. Whatever shortcoming the ld. Counsel has pointed out in context to allegation of non-compliance of rules for substituted service stand un-rebutted and only establish there was invalid mode and manner of service. In fact if this notice was part of the record when transferred to CC-14 New Delhi, in pursuance of transfer of further proceedings by virtue of section 127 of the Act, then at time of passing the assessment order it should have been made part of the assessment order to show as to how the jurisdiction was assumed at Delhi on the basis of notice u/s 143(3) of the Act served by JAO at Kollata. As jurisdictional AO has not issued the notice u/s 143(2) of the Act, in the prescribed time and mode. Consequentially all the assessment proceedings are vitiated and make the impugned assessment order a nullity. Decided in favour of assessee.

  ---

• 2025 (1) TMI 372
  Addition u/s. 69A - unaccounted deposits introduced by the assessee into the firm - HELD THAT:- It is admitted fact that the additions had been made by the AO based on incriminating material only. Further, we have observed that the financial position extracted / culled out and furnished by the assessee from the incriminating materialsi.e. books of accounts maintained in the software foxpro available and perused by the AO. The extract prepared from books seized cannot be regarded as fresh evidence, within the meaning of Rule 46A of the IT. Rules 1962. Balances of receivable from the borrowers are carried forward from the preceding financial years. Hence, we find force in the argument of the Ld.AR that the opening balance cannot be added as income of the current year by invoking section 69A - AO made addition based on the loose sheets seized but without bringing on record any other evidence to support his case that the amount in question was invested by the partner during the year under appeal. We also note that the Ld.DR could not produce any evidence to support the point that the amount in question was invested by the partner into the firm in the impugned assessment year. The amount in question, being opening balance, cannot be added as income of the assessee u/s. 69A of the Act and we find no infirmity in the order of the ld.CIT(A) in so far as his direction to delete the addition made by the AO and hence, we uphold the same. Addition u/s 69A apply to the deposits made by a partner into the firm - Amount of deposit made by the partner into the firm would not fall under the provisions of section 69A of the Act and therefore, we find no infirmity in the order passed by CIT(A) in holding that the addition made u/s. 69A of the Act is invalid.

  ---

• 2025 (1) TMI 371
  Addition u/s 68 - bogus LTCG - Investigation Wing had carried out investigation with regard to the price manipulations and generation of bogus long term capital gains in number of stocks, classified as penny stocks - HELD THAT:- We notice that the investigation report prepared by Investigation Wing is a generalized report with regard to the modus operandi adopted in manipulation of prices of certain shares and generation of bogus capital gains. AO has placed reliance on the said report without bringing any material on record to show that the transactions entered by the assessee were found to be a part of manipulated transactions, i.e., it was not proved that the assessee has carried out the transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of prices. It is stated by the Ld.AR that the transactions carried on by the assessee were not subjected to scrutiny by SEBI at all. AO has recorded statement from the assessee u/s 131 of the Act, but he could not find any fault with the assessee. AO has only observed that the assessee could not explain as to why he invested in the shares of company, whose fundamentals are weak. However, the assessee had stated that she has made investment on the basis of market information that the future of this company is bright. In our view, the rationale of making investment may not be relevant to arrive at the conclusion that the transactions of purchase and sale of shares are bogus. AO has also referred to a statement given by a person named Shri Rakesh Somani before the Investigation Wing, but did not furnish the same to the assessee to rebut it. He also did not provide opportunity of cross-examination to the assessee. It was not known as to whether Shri Rakesh Somani has stated that the transactions entered by the assessee were bogus. Another important aspect is that the assessee has sold only a part of shares of above said company, i.e., 5,20,000 shares. The remaining 14,80,000 shares are still held by the assessee. Further, the assessee is also a regular investor holding shares of other companies also. Hence, it is not a case of isolated transaction of purchase and sale of shares. In view of the above, we are of the view that there is no reason to suspect the purchase and sale of shares undertaken by the assessee. As noticed that the evidences furnished by the assessee to prove the purchase and sale of shares, payment made/received, entry/exit of shares in the demat account of the assessee etc., were not doubted with. In the case of PCIT vs. Smt Krishna Devi [ 2021 (1) TMI 1008 - DELHI HIGH COURT ] has noticed that the reasoning given by the AO to disbelieve the capital gains declared by the assessee, viz., astronomical increase in the price of shares, weak fundamentals of the relevant companies are based on mere conjectures - Decided in favour of assessee.

  ---

• 2025 (1) TMI 370
  Denial of Exemption u/s 11 and 12 - audit report in the instant case was not filed on or before the specified date referred to in section 44AB - CIT(A) confirming the appellant's income assessed by the AO instead of returned income of Nil as declared by appellant - HELD THAT:- We find that the assessee is a public trust filed its return of income belatedly but within the time limit allowed u/s 139 of the IT act claiming exemption u/s 11/12 of the IT Act. Return was processed by CPC u/s 143(1) without allowing exemption claimed u/s 11/12 of the IT Act and whole of the receipt was determined as taxable income without allowing deduction of expenditure which was claimed in the return of income. We also find that no notice for proposed adjustments u/s 143(1)(a) was issued to the assessee by the Assessing Officer/CPC. Apparently the adjustments u/s 143(1)(a) was made without any prior notice to the assessee. We also find that Ld. Addl./JCIT(A), Thiruvanantpuram dismissed the appeal of the assessee by observing that audit report was not furnished before the specified date. We find some force in the arguments of assessee that Ld. Addl./JCIT(A), Thiruvanantpuram failed to take note of ground no.2 and alternative ground no.3 which were specifically raised in grounds of appeal in Form No.35 of first appeal memo and since each and every ground raised by the assessee has not been specifically dealt/decided/adjudicated by Ld. Addl./JCIT(A), Thiruvanantpuram, the order becomes bad in law. We deem it fit to set-aside the order passed by Ld. Addl./JCIT(A), Thiruvanantpuram and remand the matter back to him with direction to decide the appeal afresh deciding all the grounds raised in the appeal memo - Appeal filed by the assessee is allowed for statistical purposes.

  ---

• 2025 (1) TMI 369
  Exemption u/s 11 - Charitable activity - Revenue Authorities held that the assessee has been covered by the first proviso to Section 2(15) of the Act based on the fees collected by the assessee against the services provided to the members as well as non-members - HELD THAT:- This matter has been examined by the Tribunal in earlier year and has been referred to the Revenue Authorities to examine the bifurcation of the fees collected from members and non-members. The entire conspectus of Section 2(15) of the Act has been examined in the case of ACIT Vs. Ahmedabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT] wherein a detailed order has been made with regard to computation of amounts which constitute receipts from trade, commerce or business. Hence, the matter is referred to the Jurisdictional Assessing Officer to examine the allowability of the claim u/s 11 of the Act in view of the decision of the Hon ble Apex Court. Disallowance of amount write off of non-recoverable amount from the terminated members - Revenue Authorities disallowed the claim on the ground that the assessee was well within their right to recover the dues from the security deposits which has been collected from the members - HELD THAT:- As before us, it was submitted that the security deposit was non-refundable and taken into corpus of the assessee and the dues have already been shown as income in the respective years. Since dues are non-recoverable from the security deposit, we hold that the assessee has a right to write off all the non-recoverable dues. Appeals of the assessee are allowed for statistical purposes.

  ---

• 2025 (1) TMI 368
  Setoff of accumulated deficit against the current year surplus - HELD THAT:- We find considerable cogency in the submissions of the Assessee s that in view of the Hon ble Supreme Court of India in the case of CIT vs. Subros Educational Society, [ 2018 (4) TMI 1622 - SC ORDER] the set off of accumulated deficit is allowable. We further find force in the contention of the Ld. AR that in various aforesaid case laws, it has been expounded by the Hon ble Courts that excess of expenditure in earlier year can be set off against income of subsequent years and would amount to application of income for subsequent years. Though amendment has been made in Section 11 denying the set off of such deficit by the Finance Act, 2021 w.e.f. 01.04.2022 by inserting explanation 5 to section 11(1) but this is applicable prospectively. The accumulated deficit arising out of expenditure over income for the previous year is allowed to be set off against the surplus of the impugned year. Decided in favour of assessee.

  ---

• 2025 (1) TMI 367
  Addition u/s 68 - unexplained cash credit on account of share capital and share premium - as per revenue identity, creditworthiness, and genuineness of the not proved - HELD THAT:-Assessee company after having contacted various other private limited companies was able to convince the alleged share applicants to make investment in its equity share capital. Though the assessee company in the year under consideration is not having a huge turnover but the book value of each of its equity share on the date of issue is Rs. 193.63. A certificate to this effect has been given by the Chartered Accountant Firm giving information about the fixed assets, current assets and then after reducing the net current liabilities from the total of the asset side, book value has been calculated by dividing the remaining sum with a number of equity shares. The book value so arrived is Rs. 5,75,07,068/- and on dividing the same by number of equity shares i.e. 2,97,000 the book value per share is Rs. 193.63 and the same is more than the share premium of Rs. 190/- per share charged by the assessee. We, therefore, considering the facts of the case are satisfied that the assessee has successfully proved the genuineness of the transaction. Assessee has been able to explain the identity and creditworthiness of share applicant and genuineness of transaction and, therefore, there was no justification of invoking sec. 68 of the Act on the given transaction of receiving alleged share capital and share premium. In the assessment orders of the alleged share applicants the source of source of share application money which has been received by the assessee has already been taxed in the hands of the share applicants and taxing the same again in the hands of the assessee would tantamount to double additions. See Mahaveer Kumar Jain [ 2018 (4) TMI 1078 - SUPREME COURT] - Decided in favour of assessee.

  ---

• 2025 (1) TMI 366
  Revision u/s 263 - under-assessment of income - Addition u/s 56(2)(x) on differential between stamp duty valuation and the purchase price - By Joint Development Agreement (JDA) proprietorship concern of this assessee (G.C Construction), being developer, would start the construction work of the proposed building after obtaining sanction of the building plan and delivery of vacant possession of the said property HELD THAT:- AO enquired and apparently been satisfied by the assessee's contention. Thus, the ld. Pr. CIT is seen to have taken an adverse note of the JDA in as much as income has been determined in the assessment year under consideration, whereas the ld. AO had been convinced by the bona fide of the assessee's arguments before him and not taken any adverse view in this very same matter Operation of Section 45(5A), taxable income would arise once the project as per a JDA would obtain a certificate of completion for the whole or part of the project, from the competent authority. In this case, in the year under consideration, none of the conditions laid down in this Section are fulfilled for recognizing revenue. It is also seen that another anomaly has crept into the impugned order when the ld. Pr. CIT has resorted to several assumptions, without backing of facts, leading him to conclude that the fiscal behaviour of the appellant was allegedly not in keeping with what a prudent businessman would normally do. Thus, for example, he has presumed that just because the advance amount paid by the appellant has not been returned back then he has mentioned that no prudent businessman would block his capital for an indefinite period. Thus it is held that not only was the impugned issue considered by the ld. AO but also the provisions of Section 45(5A) of the Act would lead to the conclusion that the adverse inference drawn by the ld. CIT(A) was not justified. Also, the impugned order is based on a number of assumptions which could not possibly be used to draw any adverse conclusion against the appellant. Hence, his action cannot be supported and considering the tests discussed (supra), this matter is decided in favour of the appellant and the order of ld. Pr. CIT is quashed.

  ---

• 2025 (1) TMI 365
  Limited scrutiny assessment - additions on account of unexplained receipt - HELD THAT:- Assessee has duly demonstrated that the assessee had duly replied and furnished the relevant documents. As explained that the aforesaid amount of Rs. 1 Crore was out of the earlier security deposits which were received back in the year under consideration. Assessee's balance sheet as on 31.03.2017, wherein, short-term loans and advances as on 31.03.2016 have been mentioned at Rs. 1,00,25,000/- whereas, the same were at Rs. 25,000/- as on 31.03.2017. Assessee invited our attention to Note-9 containing details of the short-term loans and advances wherein also, the same figures have been mentioned. Copy of the bank account of HMP Ltd. reflecting the transaction of Rs. 1 Crore on 22.07.2016 and paperbook showing the corresponding receipt/deposits of Rs. 1 Crore in the bank account of the assessee. The ld. AO thus, totally ignored the aforesaid factual evidence on the file produced by the assessee. CIT(A) has merely paraphrased the findings of the ld. AO without making any effort to appreciate the reply and evidences furnished by the assessee.Thus, addition made by the lower authorities on this issue is not sustainable. Addition u/s 14A - addition on account of estimated income from investments - Assessee has demonstrated that the assessee during the year did not earn any tax exempt dividend income out of the investments made. Therefore, as per the law laid down by various Courts of the country, no disallowance u/s 14A of the Act is attracted. Thus, as Cheminvest Ltd [ 2015 (9) TMI 238 - DELHI HIGH COURT] and Shivam Motors (P.) Ltd. [ 2014 (5) TMI 592 - ALLAHABAD HIGH COURT] if the assessee during the year has not earned any tax exempt income, no disallowance u/s 14A of the Act will be warranted. Appeal of assessee allowed.

  ---

• 2025 (1) TMI 364
  Validity of reopening of assessment - notices issued under the old section 148 - as argued notice u/s 148 was issued on 30.06.2021 when this section was no more applicable, because w.e.f. 1st April, 2021, a new scheme of reassessment was introduced in the shape of section 148(A) - HELD THAT:- 1st Appellate Authority ought to have recorded a categorical finding on the merits of assessment orders impugned before it i.e. sustainability assessment orders dated 31.03.2022 passed vide notice issued on 30.06.2021 under section 148. CIT(Appeals) in a deeming manner assumed that subsequent proceeding taken by AO is a legal one, therefore, he can simply observe that these assessment orders are non-est and appeals become infructuous. It is pertinent to note that once reassessment order is passed by theAO (in the present appeal, such orders were passed on a notice issued under section 148, i.e. old provisions), then, whether an AO himself can suo motu treat those orders as non-est and start fresh re-assessment proceeding is a debatable point. It cannot be considered by the CIT(Appeals) in the manner as is done in the impugned order. The legal status of both the re-assessment orders are to be determined independently without getting influenced by the action of the AO initiated under section 148(a). Suo motu it cannot be construed by AO that earlier assessments passed on 31.03.2022 on a notice issued under section 148 would automatically obliterate or extinguish by the guidelines issued by the Hon ble Supreme Court in the case of Ashish Agarwa [ 2022 (5) TMI 240 - SUPREME COURT] The Hon ble Delhi High Court [ 2024 (4) TMI 96 - DELHI HIGH COURT] has held that those orders would remain unaffected and their status is to be decided on the basis of their own merits. It cannot be a case that they would automatically extinguish and AO will be enable to pass the fresh assessment u/s 148(a) of the Income Tax Act. Therefore, ideally ld. CIT(Appeals) should have not assumed, as if subsequent proceeding initiated by the ld. Assessing Officer under section 148(a) and assessment orders passed thereon are valid and, therefore, earlier assessment orders deserve to be just ignored. This understanding of the ld. CIT(Appeals) is not in accordance with law. Old assessments have been passed on the strength of a notice issued under section 148, which was not in existence on the day of its issuance, which was not inexistence on the day when notice was issued on 30.06.2021. Therefore, on this very foundation, no assessment orders could be passed. These assessment orders ought to have been quashed by the ld. CIT(Appeals). The assessment orders passed u/s 143(3) read with section 147 are invalid assessments - Decided in favour of assessee.

  ---

• Customs

• 2025 (1) TMI 363
  Valuation of imported goods, especially when the importer and the exporter are unrelated - Rejection of transaction value - enhancement of value with the support of a Chartered Engineer s report - HELD THAT:- The issue has been dealt-with by the Hon ble Supreme Court in the case of CENTURY METAL RECYCLING PVT. LTD. AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [ 2019 (5) TMI 1152 - SUPREME COURT] where it was held that 'Declared valuation can be rejected based upon the evidence which qualifies and meets the criteria of certain reasons . Besides the opinion formed must be reasonable. Reference to foreign journals for the price quoted in exchanges etc., to find out the correct international price of concerned goods would be relevant but reliance can be placed on such material only when the adjudicating authority had conducted enquiries and ascertained details with reference to the goods imported which are identical or similar and certain reasons exists and justifies detailed investigation.' It is never the case of the Revenue that the parties were related, that there was any extra/on money exchanged between the importer and the exporter or that the value admitted in the bill of entry was influenced by any extraneous considerations/circumstances. Hence, as declared by the Hon ble Apex Court in Century Metal Recycling Pvt. Ltd., it is found that the Revenue has miserably failed in discharging the burden of proving in accordance with law that the declared value was not acceptable for any justifiable reason/s or that the same was hit by the non-fulfillment of Rule 12 ibid. Conclusion - The authorities below have erred in rejecting the declared/transaction value of the import without any basis. Appeal allowed.

  ---

• 2025 (1) TMI 362
  Scope of amendment by Notification No. 127/2011-Cus. dated 30.12.2011 - Whether the appellant is eligible for the benefit of N/N. 46/2011 Cus. dated 01.06.2011 which provides for concessional rate of Basic Customs Duty (BCD) for all the goods classifiable under CTH 480830 to 480990? - HELD THAT:- Reliance placed upon decision of the Hon ble Apex Court in the case of M/S. RALSON (INDIA) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [ 2015 (4) TMI 74 - SUPREME COURT ] where it was held that ' Compounded rubber was also rescinded by the same Notification dated 1.3.94 and reintroduced in the same manner vide another Notification issued on 28.3.1994.' Thus, during the interregnum period, the taxpayer was eligible for the benefit of Notification in question, denial by the Revenue was not in accordance with law. Conclusion - The appellant was eligible for the concessional rate of BCD under the original notification, even during the period when the notification did not explicitly list the relevant CTH headings. Appeal allowed.

  ---

• 2025 (1) TMI 361
  Jurisdiction of Directorate of Revenue Intelligence (DRI) officers to issue a SCN under the Customs Act, 1962 - confiscation of the bike and also imposition of penalty on the ground that the bike was smuggled into India and the documents provided along with the said bike are fake - HELD THAT:- Hon ble Supreme Court in the case of COMMISSIONER OF CUSTOMS VERSUS M/S CANON INDIA PVT. LTD. [ 2024 (11) TMI 391 - SUPREME COURT (LB)] now held that DRI Officers have jurisdiction to issue show cause notice under Section 28 of the Customs Act. The appellant states that Department has failed to discharge its burden to prove that the said bike was smuggled into India and being non-notified good, burden is on the Revenue to prove the case. The appellant is genuine buyer of the bike which was registered in the name of another buyer. The concerned bike is registered in the fake name and other documents also found fake. Appellant purchased the bike with a price more than Rs. 13 lakhs in Rs. 5,70,000/- and paid in cash Rs. 5 lakhs without ascertaining the actual owner or registered owner. Bike is find goods as the appellant stated in his statement dated 24.10.2011 that he is interested in owning super bikes and went Marine Drive, Mumbai on a Sunday to attend super bikes assemble held by owners of such motor bikes. Therefore, the appellant is well aware about bikes. In these facts and circumstances, it is clear that appellant is not bonafide purchaser. Hon ble Supreme Court in NALIN CHOKSEY APPELLANT VERSUS THE COMMISSIONER OF CUSTOMS, KOCHI [ 2024 (12) TMI 687 - SUPREME COURT] held that as per Section 125(1) of the Customs Act and the possession of the vehicle can be made liable only when the owner of the goods is not known. In this case, owner of the vehicle is unknown and appellant is possessor of the vehicle. Therefore, he is liable to pay the duty. Conclusion - The possession of the vehicle can be made liable only when the owner of the goods is not known. In this case, the owner of the vehicle is unknown and appellant is possessor of the vehicle. Therefore, he is liable to pay the duty. Appeal dismissed.

  ---

• 2025 (1) TMI 360
  Classification of imported goods - Process Betel Nuts - to be classified under CTH as 21069030 or under CTH 08028020 - rejection of declared value - redetermination of value based on the fixed Tariff Value as per the Customs Act, 1962 - confiscation - penalties - permission to re-export the goods. Classification of goods - HELD THAT:- All the arguments advanced by the appellant in respect of the classification have been considered by Chennai Bench in case of M/S. S.T. ENTERPRISES AND M/S. AYUSH BUSINESS OVERSEAS VERSUS COMMISSIONER OF CUSTOMS (CHENNAI VII) [ 2021 (3) TMI 27 - CESTAT CHENNAI] and rejected observing ' since the import goods are betel nuts whole , these would merit classification under Chapter 8 and specifically under Chapter 0802 80 10 as classified by the department.' This decision of Chennai Bench ahs been affirmed by Hon ble Supreme Court in M/S AYUSH BUSINESS OVERSEAS ETC. VERSUS COMMISSIONER OF CUSTOMS (CHENNAI VII) [ 2021 (3) TMI 1285 - SC ORDER] . Thus, the goods imported by the appellant have been rightly held to be classifiable under the heading 0802 8030. Valuation of goods - HELD THAT:- The impugned order relies on the Notification of the DGFT fixing the minimum import price for the import of the areca nuts classifiable under Chapter 0802. The minimum import price fixed by the DGFT could not be called the tariff value as has been done by the impugned order. The Tariff Value as defined by the Custom Act, 1962 is the value of the good fixed by the Board and could not have been fixed by any DGFT. Minimum Import Price fixed by the DGFT is an indicative minimum price of the goods imported and the goods if imported below this price could not have been allowed clearance for home consumption. However this price could not have been basis for rejection of the transaction value declared by the importer. Appellant has for this reason instead of clearing the goods for home consumption sought the re-export. Appellant has in his submissions made before the adjudicating authority has submitted that the redemption fine be imposed on @ of 5%. Agreeing to the submission made, the end of justice will be met if we reduce the redemption fine to 5 of the value determined in the impugned order on the basis of minimum import price fixed by the DGFT. Thus redemption fine in case of goods imported as per B/E No 2329397 is reduced to Rs.3,45,000/- and goods imported as per B/E No.2625658 to Rs.7,50,000/-. Thus the total redemption fine is reduced to Rs.10,95,000/- - the penalty imposed on the appellant under Section 112 (a) of the Customs Act, 1962 reduced to Rs.5,00,000/-. Conclusion - The goods were correctly classified under CTH 08028020. The confiscation and penalties were justified, and re-export is allowed with a reduced redemption fine. Appeal allowed in part.

  ---

• 2025 (1) TMI 359
  Recovery of differential customs duty with penalty under section 112(a) (ii) and 114 (AA) of the Customs Act, 1962 - self-assessed transaction value was rejected and re-determination of the value - undervaluation of the goods - no opportunity for the pre-show cause notice consultation was provided - Violation of principles of natural justice. Violation of principles of natural justice - no opportunity for the pre-show cause notice consultation was provided - HELD THAT:- The pre-liminary contention raised by the learned counsel for the appellant that no opportunity for the pre-show cause notice consultation was provided, needs to be rejected out rightly as from the records of the case, it is found that the appellant had been evading the investigation as despite service of summons dated 09.04.2019, 16.05.2019, 24.10.2019 and 21.02.2020 seeking their appearance on the dates specified, the appellant failed to appear. Once the appellant had chosen not to cooperate with the Department, the question of providing the pre-show cause notice consultation does not arise - thee are no violation of the mandatory provisions of providing pre-show cause notice consultation to the appellant. Whether there was any mis- declaration in the valuation of the goods imported by the appellant? - HELD THAT:- The investigation was initiated on the basis of an intelligence that many Delhi based importers were engaged in suppression of actual transaction value and resorted to gross undervaluation in import of Automotive Windshield (Automotive Safety Glass) of assorted sizes for various models of vehicles and the appellant was one of such importers. Search of the office premises of the appellant company on 12.10.2018, resulted in recovery of a CPU, printouts were taken from the email of certain documents including actual invoices under a Panchnama of the same date - From the recovery of invoices, it is evident that two sets of parallel invoices were maintained, one was the actual invoice bearing higher valuation and the other parallel set of invoice of lower valuation was for the purpose of presentation before the customs for assessment. The apparent intent in resorting to such unlawful means was to suppress the actual transaction value so as to evade duty on the higher amount. Once the goods imported are found to be mis-declared in valuation, the declared value needs to be rejected under rule 12 of CVR, 2007. Here the appellant has indulged in manipulation of the invoices and fraudulently suppressed the actual transaction value of the goods imported by them so as to evade the customs duty on higher valuation and therefore, the declared value has been rightly rejected in terms of rule 12 - there are no error in determining the value of the goods on the basis of the actual invoices. In fact, there can be no better evidence of correct transaction value, as reflected in the original invoices issued by the foreign supplier and which has been admitted by the appellants and in fact, Jaspreet Singh had admitted to make the payment of duty on that basis. The department has adduced direct evidence of undervaluation. The modus operandi between Shri Jagmohan Kaushal and Shri Jaspreet Singh clearly establishes a case of conspiracy and in view of the settled principle it is therefore, impossible for the department to unravel every link of the transaction, many facts relating to these illicit transactions remain in the knowledge of the person concerned, CC, Madras vs. D.Bhoormull. The department has sufficiently discharged the burden of proving the undervaluation, which is unrebutted by the appellant in the absence of any substantial evidence. Since it is an established case of mis-declaration, under valuation and suppression of actual invoices, the goods are liable for confiscation as per section 111(m) of the Act - In view of the reasoning for invocation of the extended period of limitation and the findings recorded by the adjudicating authority, the penalty imposed on the appellant under section 114(A) and 114(AA) affirmed. No interference is called for even on the quantum of penalty in view of the discussion on merits. Conclusion - The mis-declaration and undervaluation warrant rejection of declared values and imposition of penalties. Appeal dismissed.

  ---

• 2025 (1) TMI 358
  Refund of excess paid duty due to a System error - 6 7 months delay in filing the bill of entry after the record of error alluded to by the appellant - whether the appellant was indeed responsible for having caused the error by non-updation of the bond details manually? - HELD THAT:- Section 11(4) states that a licensee shall file with the bond officer a monthly return of the receipt, storage, operations and removal of the goods in the warehouse, within ten days after the close of the month to which such return relates. The said provisions are reiterated in the above-mentioned Boards Circular. As stated by the appellant the provisions did not require an importer to keep the electronic bond module updated. This being so the department cannot fasten the delay in up-dation of the bond module on the importer and deny him the facility to file the bill of entry citing well known procedure which has no legal basis. Defects in linking of the bond module and ICES by the department, cannot be made a reason to deny the adherence to a statutory requirement by an importer, more so when the statute does not require the importer to enter such details in the ICES prior to filing a bill of entry. It is at best a curable defect and not a substantive one. The question arises whether the Commissioner (Appeals) was right in allowing the rate of duty as on 26/09/2018 to be applied after a period of 6 7 months, when the goods were actually cleared, which is against section 15 of the Customs Act 1962. It is true that in this case a Bill of Entry number was not generated by the Indian Customs Electronic Data Interchange System (ICES) for the said declaration and the self-assessed copy of the Bill of Entry was not electronically transmitted to the authorised person. The instruction pertains to payment of charges for late presentation of Bill of Entry, which has a discretionary element, unlike the relevant date for the rate of duty to be effective, which is fixed by the Customs statute and does not leave room for discretion. However, the issue that delays in filing of Bill of Entry happen due to system related faults is acknowledged by the instruction and has legal implications. In an era with progressive use of modern technology, the instruction take a pragmatic view of the procedure in vogue at the time the law was enacted and as applicable to the present. In such a situation the appellant should not be blamed for the delay and held responsible. Conclusion - The appellant should not be blamed for the delay and held responsible, once it is shown that an importer had attempted filing the bill of entry prior to the issue of a rate change notification. Importers should not be penalized for system-related faults. No purpose would be served in remanding the matter to the Original Authority to re-examine whether ex-bond bills of entry was filed for the entire lot of imported 6680 packages of Split Air Conditioners as claimed by the appellant or only for a part or for some other goods, as this would involve a fresh investigation of the facts which is beyond the issue on the file of the Original Authority and would result in a new proceedings - the lower authority has taken a view which is reasonable, legal and proper - Appeal disposed off.

  ---

• 2025 (1) TMI 357
  Alleged import of excess quantity of MACE, beyond the quantity declared in the BE and the value of the goods was also allegedly undervalued - misdeclaration of quantity, grade, and value of imported Mace to evade customs duties - onus to prove - HELD THAT:- The non-supply of the Bill of Entry relied upon to enhance the price of the imported goods and lacunae in the analytical report dated 30.07.2009 given by the Spice Board, Cochin, regarding the grade of the goods is fatal to the department s case. It is settled law that the onus to prove that the declared price did not reflect the true transaction value is always on the Department. Further NIDB data can be a guideline for the customs to arrive at the value of the goods but the NIDB data cannot be applied directly unless the value given therein falls within the parameters of identical goods or similar goods as stated in section 14 of the Customs Act 1962 and the Customs Valuation Rules. As stated by the Hon ble Supreme Court, it is always for the Customs Authorities to establish by methods known to law and in a satisfactory manner that the value of imported goods is not what the importer says it is and what that value actually is. That onus cannot be shifted to the importer. Similarly, any analytical report must state the grade of the goods being tested, the prevalent national / international standards if any for that product and how the product matches or deviates from that standard. Without that, the opinion is of no help. It can only be treated as an opinion in general and not pertaining to the goods in question as in the present case. Conclusion - The Department failed to meet the burden of proof. If the allegations in the show cause notice are not specific and are on the contrary vague, lack details and/or unintelligible that is sufficient to hold that the noticee was not given proper opportunity to meet the allegations indicated in the show cause notice. In the light of the infirmities in the SCN and the resultant erroneous decision taken in re-determining the value of the goods in the OIO and the impugned order, the re-determined value merits to be set aside along with fine and penalties imposed. As regards the case of the excess quantity of 590.83 Kgs the price as declared should be adopted and appropriate duty demanded from the importer-appellant as per law - Appeal disposed off.

  ---

• 2025 (1) TMI 356
  Time Limitation - Rejection of appeal on the ground of delay - HELD THAT:- It is observed that apparently the appeal has been filed beyond the period of limitation meant for filing the appeal before Commissioner (Appeals) in terms of Section 128 of Customs Act, 1962. However, from the copy of the grounds of appeal filed before Commissioner (Appeals), it is observed that the reason for the delay that occurred in filing the said appeal was sufficiently explained by the appellant. However, the impugned order has not dealt with those reasons. The appeal has mechanically been rejected on ground of limitation by quoting the provision of Customs Act, 1962 and the decision of Hon ble High Court Delhi in the case of DELTA IMPEX VERSUS COMMISSIONER OF CUSTOMS (ACU) , NEW DELHI [ 2004 (2) TMI 81 - HIGH COURT OF DELHI ]. There is no discussion about the explanation given by the appellant for the delay that has occurred. Though, the Commissioner (Appeals) having no statutory power to condone the delay beyond 90 days of the receipt of order in original, seen from that perspective no infirmity can be found in the impugned order. In view of the explanation given by the appellant, the appeal was otherwise well within time when it was filed before Commissioner (Appeals). There has been catena of decisions referring that the matter shall be referred to be disposed on merits and the plea of limitation has to be dealt with liberally. Conclusion - The appeal filed on 30.02.2019 is within one month of date of receipt of order in original with the appellant. Keeping in view that there is nothing on or record, otherwise to show that the appellant deliberately had caused the impugned delay. Otherwise also while appellant is not going to gain anything while causing delay in filing the appeal. Present is deemed to be a fit case to be re-heard by Commissioner (Appeals) vis- -vis the merits of the appeal. Resultantly, the matter remanded back for de-novo adjudication on merits without discussing the aspect of limitation - appeal allowed by way of remand.

  ---

• 2025 (1) TMI 355
  Evaison of ADD - Confiscation - interest - penalty along with anti-dumping duty - misdeclaration of imported goods - Aluminum Printing Plates having one side blue in colour and other side natural aluminum colour, declared as P.S. Printing Plates (Photosensitive Printing Plate) . The basic challenge of the appellant is to the test report relying on the findings of this Tribunal in the later decision in Sun N Sand [ 2024 (10) TMI 158 - CESTAT NEW DELHI] , where test report was held to be not reliable as the lab was lacking proper infrastructure for CTCP machine testing and, therefore, outsourced it for testing. HELD THAT:- The facts of the present case are not identical to the case of Sun N Sand in so far as the authenticity of the test report is concerned. Though in both the cases, the Government labs had refused to conduct the test due to non-availability of the infrastructure and the testing was forwarded to the private lab, i.e., M/s. Don Bosco, however, the present case is distinguishable as the testing had not been outsourced by M/s. Don Bosco and it has also not been proved by the appellant herein that M/s. Don Bosco was not fully equipped to carry out the testing of the samples. In the case of Sun N Sand, it was noted that on cross-examination of the technical expert from M/s. Don Bosco, the Commissioner (Appeals) had set aside the imposition of anti-dumping duty, whereas in the present case as noted by the original authority and as is evident from the absence of the appellant before the adjudicating authority, they have never sought for any cross-examination of the technical experts of M/s Don Bosco and in that view, the contention raised by the appellant that they have not been granted any opportunity of cross examination is unsustainable. Hence, the findings of the Tribunal in Sun N Sand are not applicable in the present case and no fault can be attributed to the test report. The fact cannot be ignored that as per the procedure for drawing the samples, one sample is given to the aggrieved party, i.e. the appellant herein and the appellant had an option to get the retesting done through the sample given to him, however, they refrained from exercising this right. On the issue, that the test was conducted after the expiry period of 18 months and therefore, the test report cannot be relied upon has been rightly rejected by the adjudicating authority as the testing agency has no way stated in the test report that the shelf life of the Plates had expired. Nor the appellant had produced any evidence from the supplier about the shelf life of the plates. Considering that the invoice of the goods is dated 18.04.2015 and hence they could have been manufactured sometime before the said date, the samples drawn from the consignment on 03.11.2015 were initially forwarded to the Government lab on 19.11.2015 but due to the unforeseen circumstances, the samples were finally sent on 14.12.2017 and soon, thereafter, the test report was made on 30.03.2017 - Since only the date of invoice as 18.04.2015 is available, the delay, if any, is not really very material as it would not change the nature and characteristics of the goods. The declared goods, as P.S. Plates, would remain the same even on the expiry of eighteen months and would not convert to CTCP Printing Plates. The simple illustration is, that if a food item, for example, bread which normally comes with the specification, Best before say 15th January 2025, if tested anytime after the said date would not convert into Roti . The bread would remain bread and infact, is edible for a few days later even after the expiry date. Therefore, the argument of the learned counsel that expired goods no way reflect its authentic and correct characteristics on testing has no merit and is unsustainable. Conclusion - The test report by Don Bosco was not faulty and relying on the same the authorities below have rightly held that the subject goods have been mis-declared by the appellant as Aluminium P.S. Printing Plates so as to evade the imposition of anti-dumping duty under the notification no. 51/2012-CUS(ADD) dated 03.12.2012. The appellant having given wrong description have violated the provisions of section 46(4) of the Act as such the goods are liable for confiscation under section 111 (m) of the Act. Consequently, the appellant is liable to pay the anti-dumping duty of Rs. 44,15,360/- along with the penalty of the same amount under section 114 (A) of the Act. Appeal dismissed.

  ---

• Insolvency & Bankruptcy

• 2025 (1) TMI 354
  Correctness of High Court of Karnataka exercising power of judicial review interdicting Corporate Insolvency Process culminating in the acceptance of a resolution plan by the Committee of Creditors - HELD THAT:- The jurisdiction and power of the Adjudicating Authority under Section 60(5)(c) has already been reiterated by this Court in Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta [ 2019 (11) TMI 731 - SUPREME COURT ] and Gujarat Urja Vikas Nigam Limited v. Amit Gupta [ 2021 (3) TMI 340 - SUPREME COURT ]. It is important to note that CIRP proceedings commenced on 26.10.2018, six years ago, and the resolution plan of the appellant was approved in 2020, four years back. The importance of concluding the CIRP proceedings was highlighted by this Court, on a number of occasions. In a recent order in COMMITTEE OF CREDITORS OF KSK MAHANADI POWER COMPANY LIMITED VERSUS M/S UTTAR PRADESH POWER CORPORATION LIMITED AND OTHERS [ 2024 (10) TMI 1624 - SUPREME COURT] , this Court has observed that an unjustified interference with the proceedings initiated under the Insolvency and Bankruptcy Code 2016, breaches the discipline of law. In view of the delay in approaching the High Court, particularly when respondent no.1 himself has initiated proceedings under the Code by filing interlocutory applications seeking similar relief, the High Court committed an error in entertaining the writ petition. Apart from delay and laches, High Court should have noted that Insolvency and Bankruptcy Code is a complete code in itself, having sufficient checks and balances, remedial avenues and appeals. Adherence of protocols and procedures maintains legal discipline and preserves the balance between the need for order and the quest for justice. Conclusion - The supervisory and judicial review powers vested in High Courts represent critical constitutional safeguards, yet their exercise demands rigorous scrutiny and judicious application. Appeal allowed.

  ---

• 2025 (1) TMI 353
  Exclusion of the asset from the liquidation estate of the CD - Whether the Wockhardt Cephalosporin Facility, which was situated in area of 13,000 sq. ft. of the larger property is not the asset of the CD and need to be excluded from the liquidation estate of the CD? - whether in the impugned order the Adjudicating Authority did not record any reason? - HELD THAT:- From the impugned order of the Adjudicating Authority, it does appear that reasons have been given by the Adjudicating Authority for holding that CD has absolute right over the property and area of 13,000 sq. ft., cannot be excluded from the liquidation estate. It is true that only brief reasons have been given by the Adjudicating Authority for rejecting the Application of the Appellant and the order also notices the submission of the Appellant and the Liquidator to rely on Assignment Deed dated 27.03.2018 and the conclusion was recorded by the Adjudicating Authority. The order impugned cannot be set aside on the ground that it does not record any reason. Reasons have been recorded, though, briefly in the impugned order. The consent letter dated 09.03.2017 was consent letter for transfer of Plot No.B-15/2 admeasuring 64,925 sq. mtrs. was in favour of CD for which consent was granted by MIDC. Thus, consent letter dated 09.03.2017 read with Assignment Agreement dated 27.03.2018 in favour of CD was assignment of entire area of 64,925 sq. mtrs. Hence, the CD acquired the leasehold rights of the entire area of Plot No.B-15/2 admeasuring 64,925 sq. mtrs. and the letter dated 09.03.2017 clearly mentions that there is no consent, rather prayer to continue sub-letting was not granted and Transferee was asked to apply for fresh sub-letting and Transferee clearly meant CD, i.e. M/s Euro Healthcare Pvt. Ltd. There is nothing on record to indicate that CD after assignment in its favour, obtained any consent for sub-letting in favour of Wockhardt Ltd., nor there is anything on record to indicate that sub- letting consent was ever granted by MIDC for Wockhardt Cephalosporin Facility area. Thus, amount which was demanded by MIDC was due to there being unauthorised sub-tenant and the said letter in no manner can be read as granting of consent for sub-tenant by the MIDC. The Lessee was prohibited to part with any portion of the leased land without prior consent of MIDC and there being no consent by MIDC for sub-letting, the claim of the Appellant that it is entitled to area of Wockhardt Cephalosporin Facility, which would be excluded from the assets of the CD, cannot be accepted. The payment made by the Appellant in pursuance of letter issued by RP, asking to make payment of unauthorised sub-letting charges, cannot be read as any valid sub-letting in favour of the Appellant of the 13,000 sq. ft. area, as claimed by the Appellant. In the reply, which was filed by the Liquidator before the Adjudicating Authority, it was categorically pleaded that Sub-Letting Agreement was an un-registered Agreement and sub-letting of leased land could have been done only by registered agreement. Conclusion - The Wockhardt Cephalosporin Facility is part of the liquidation estate of the CD. Appeal dismissed.

  ---

• 2025 (1) TMI 352
  Assessment proceedings can be carried on by the EPFO under Section 7A, 14B and 7Q of the EPF MP Act, 1952 after imposition of moratorium under Section 14 of the IBC - claim on the basis of assessment, subsequent to imposition of moratorium, can be admitted in the CIRP - claims, which were filed by the Appellant(s), subsequent to the approval of Resolution Plan by the CoC, could have been admitted in the CIRP. Whether after imposition of moratorium under Section 14 of the IBC, assessment proceedings can be carried on by the EPFO under Section 7A, 14B and 7Q of the EPF MP Act, 1952? - Whether any claim on the basis of assessment, subsequent to imposition of moratorium, can be admitted in the CIRP? - HELD THAT:- The plain reading of Section 14, sub-section (1) indicates that expression suits or proceedings against the corporate debtor has been used. The word proceeding is not qualified, so as to confine it to proceedings before the Civil Court. The proceedings, which have the effect on the assets of the CD are all covered in the expression proceeding . The question to be answered is as to whether after moratorium has been imposed, it was open for EPFO to proceed with the assessment proceeding. Learned Counsel for the parties state that during moratorium proceeding, no recovery proceeding can be initiated against the CD. However, submissions of the learned Counsel for the Appellant is that assessment proceedings against the CD may continue. Hence, the orders of assessment passed during moratorium period, were fully permissible and the claim on the basis of the said proceedings had to be admitted in CIRP. In the case before the Hon ble Supreme Court in Sundresh Bhatt, Liquidator of ABG Shipyard [ 2022 (8) TMI 1161 - SUPREME COURT] , demand notice was issued subsequent to initiation of CIRP and that was not the case of any assessment carried out by Customs Authorities and the liquidation order was passed on 25.04.1999 and notice under Section 72 was issued on 11.07.2019, i.e. after the liquidation - It is well settled law that a judgment of the Court has to be read in the context of the facts and ratio of judgment has to be read in reference to the facts, which have come for consideration before the Court. It is well settled that ratio of a judgment cannot be read as statute and above judgment of the Hon ble Supreme Court, does not support the submission of the Appellant that after imposition of moratorium under Section 14, sub-section (1), it was open for the EPFO Authority to proceed with the assessment and conclude the assessment. In the present case, admittedly assessment has been completed after initiation of the moratorium. We, thus, are of the view that once order of liquidation is passed, moratorium under Section 14 comes to an end and moratorium under Section 33(5), which is differently worded, comes into play. Under Section 33(5), the expression used are suit or other legal proceeding , which occurs in Section 446 of sub-section (1) noticed above. Thus, bar is only against suit or legal proceeding and there is no bar against assessment proceeding to be conducted by statutory Authorities, including the EPFO. Thus, after the liquidation, it is open for EPFO to carry on the assessment. Section 33(5), cannot be held to apply on assessment proceedings. However, while looking to the expression used in Section 14(1), assessment proceedings before the EPFO, cannot be continued after initiation of CIRP. Whether claims filed by the appellants subsequent to the approval of the Resolution Plan by the Committee of Creditors (CoC) could have been admitted in the CIRP? - HELD THAT:- It is an admitted fact that claims were filed by the Appellant subsequent to approval of Resolution Plan by the CoC. The Adjudicating Authority has relied on the judgment of the Hon ble Supreme Court in RPS Infrastructure Ltd. Vs. Mukul Kumar Anr. [ 2023 (9) TMI 516 - SUPREME COURT] , which judgment squarely applies to the facts of the present case. More so, when the claim on the basis of assessment, which has been made subsequent to initiation of moratorium is hit by Section 14, sub-section (1) of the IBC, no such claim can be admitted in the CIRP. Conclusion - After initiation of moratorium under Section 14, sub-section (1), no assessment proceedings can be continued by the EPFO. If after an order of liquidation is passed, Section 33, sub-section(5), does not prohibit initiation or continuation of assessment proceedings. No claim on the basis of assessment carried during the moratorium period, which is prohibited under Section 14(1) can be pressed in the CIRP. When the claim on the basis of assessment, which has been made subsequent to initiation of moratorium is hit by Section 14, sub-section (1) of the IBC, no such claim can be admitted in the CIRP. There are no error in the order impugned in the present Appeal(s) passed by Adjudicating Authority - appeal dismissed.

  ---

• Service Tax

• 2025 (1) TMI 351
  Condonation of delay of 154 days in filing the appeal - no satisfactory explanation given - Revenue appeal against the various issues involved, e.g.: - outdoor catering services - under-valuation of taxable services - in-flight catering services to International and Domestic airlines - bundled services - HELD THAT:- There is a gross delay of 154 days in filing the appeal which has not been satisfactorily explained. There are no good reason to interfere with the impugned order - The appeal is, therefore, dismissed on the ground of delay as well as on merits.

  ---

• 2025 (1) TMI 350
  Refund claim - payment made by the appellant under protest is applicable to subsequent payments for the same issue - applicability of limitation period under Section 11B of the Central Excise Act, 1944 - interest on the refund amount under Section 11BB of the Central Excise Act, 1944. Refund claim - payment made by the appellant under protest is applicable to subsequent payments for the same issue - HELD THAT:- The issue as to whether Service Tax is payable or not on Construction of Residential Complex service was under litigation for quite some time, right from its inception. In the present case, there is nothing to indicate that the Appellants were paying the Service Tax in the normal course. When the enquiries were made, they made two payments of Rs.17,28,454/- on 30.03.2006 and Rs.8,05,266/- on 05.07.2006, filing their under protest letter dated 28.03.2006. Both the payments have been made after this protest letter. No doubt the letter dated 28.03.2006, specifically mentions the payment of Rs.17,28,454 as being done under protest . But the fact remains that the subsequent payment was made only on 05.07.2006 - Filing such a letter clarifies that they are not subscribing to the view of the Revenue that Service Tax is payable. Such letter would have to taken as the one which pertains to all the payments made subsequently, unless the Revenue comes out any evidence to the contrary to the effect that subsequent payment has been made voluntary and is not made under protest. Such evidence is not forthcoming in the Revenue s case here. In the case of M/S NIPHAD SSK LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NASHIK [ 2017 (1) TMI 1024 - CESTAT MUMBAI ] Tribunal has held that once the Under Protest letter is filed, it would be applicable for the future payments also. Applying the ratio of this case law, it is held that the Under Protest letter filed at the time of the first payment also holds good for the subsequent payments made. The first letter clearly shows the view of the appellant that they are not in agreement with the stand taken by the Revenue. The appellant cannot be denied the refund of the second amount of Rs.8,05,266/-. Grant of interest on the refund in terms of Section 11BB - HELD THAT:- In the appellant s own case, in respect of already granted refund of Rs. Rs. 17,28,454, their appeal was before this Bench. Relying on the judgement of the Hon ble Supreme Court in the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [ 2011 (10) TMI 16 - SUPREME COURT] , this Bench has held ' The appellant has filed the refund claim on 22.11.2007. Hence after considering the period of 3 month s for processing of this application, the interest would be payable from 22.02.2008 till the date on which the refund has been paid to them.' In the present case, the Revenue has not pointed out any factual difference from the above case. Therefore, the appellant would be eligible for interest from 3 months from the date of their refund claim letter till the refund is granted. Conclusion - The appellants are eligible for refund of Rs. 8,05,266/-. The appellant would be eligible for interest from 3 months from the date of refund claim till the refund is paid. The interest payable would be @12% per annum. Appeal allowed.

  ---

• 2025 (1) TMI 349
  Denial of CENVAT Credit for the reason that the assessee-Appellant herein did not produce the original documents in support of its claim - HELD THAT:- The Appellant has given a plausible reason for non-production of original documents before the Commissioner, which is not suspected. Hence, at the outset, the reasons indicated by the Appellant appears to be bona fide. Further, the denial of Credit has been made only for the reason of non-production of the documents, which was clearly beyond the control of the appellant. Hence, it would meet the ends of justice if an opportunity is given, by setting aside the order, thereby directing the Appellant to go before the Commissioner/Adjudicating authority before whom the Appellant shall furnish all relevant documents to the satisfaction of the said authority; the said authority shall cause verification of the same and if satisfied, then consider allowing the claim of CENVAT Credit after following the process of law. But in any case, since the issue pertains to the year 2014, it is deemed appropriate to direct the Appellant to co-operate with the Authority without seeking any unnecessary adjournments and thereby enable the said Authority to pass a speaking order after considering the documents that may be furnished before him, within a period of 30 days from the date of the receipt of this Order. All the contentions insofar as the present issue is concerned, are left open. Conclusion - The denial of Credit has been made only for the reason of non-production of the documents, which was clearly beyond the control of the appellant. Hence, it would meet the ends of justice if an opportunity is given, by setting aside the order, thereby directing the Appellant to go before the Commissioner/Adjudicating authority. Appeal disposed off by way of remand.

  ---

• 2025 (1) TMI 348
  Nature of activity - service or manufacture - Process amounting to manufacture or Business Auxiliary Service? - powder coating of metals and articles of metals - HELD THAT:- The Appellant has inter alia furnished before the Adjudicating Authority permissions letters to send the materials for job work since, admittedly, the principals were SEZ units. Strangely, however, the Adjudicating Authority has not at all given due consideration to the said permission letters granted by the Authorized Officer for outsourcing the job work by the SEZ units to the Appellant herein. The said letters are clear in as much as, they indicate the purpose and also identify the entities to whom the job work was outsourced. On perusal of Notification No.8/2005 makes it clear that the goods received on job work should be used in the manufacture of goods on which appropriate duty is payable. The appellant has claimed that it had performed the job work as instructed by the SEZ units; the SEZ units did not dispute the job work executed by the Appellant for which both the parties did not dispute the payment / consideration and it is nowhere even disputed by the authorities below that the principals / SEZ units had used the said components that underwent the process of job work in the manufacture of final products which attract appropriate duty. There may be a doubt which is clearly out of context since, when the appellant had claimed to have delivered and the principals / SEZ units having not disputed the receipt of the same and that there has also been flow of consideration that too in cheque, that itself shows that the delivery is complete. But in any case, this aspect having been accepted by the Adjudicating Authority without any doubt and when there was no appeal by the Revenue, the impugned order to this extent is clearly arbitrary, uncalled for and beyond the appellate proceedings and it is also are in violation of the well settled principles of natural justice. Conclusion - The job worker / Appellant is entitled to the benefit of exemption Notification No.8/2005 and that the activity of the Appellant was not taxable under BAS. Appeal allowed.

  ---

• 2025 (1) TMI 347
  Justification for levying penalty - suppression of facts or not - Whether the demand of/imposition of penalty is correct, especially when admittedly, the payments of tax and interest stand discharged before the issuance of SCN? - HELD THAT:- Section 73(3) casts a serious responsibility on the officer who is issuing or proposing to issue SCN, to arrive at or decide or ascertain that the assessee has remitted the tax along with applicable interest. The allegation regarding suppression should not only be based on the non-filing of returns, but with an intention to evade tax. Here, in the case on hand, the assessee has pleaded that it could not file the ST-3 returns in time because it had no money or, rather they were under financial constraints due to which, they could also not remit the tax and therefore, they could not fill up the requirements of online filing of the returns, which, according to them was a bona fide reason for on filing of their ST3 returns and pay the tax in time. But, however, the fact remains that even before the issuance of SCN, they had remitted the entire tax demand along with interest - there was a plausible explanation on record, by the appellant, which was not found to be incorrect or that there was any other intention unearthed by the Revenue to disbelieve the said explanation. They only reason adopted in the impugned order is Section 73(4) ibid, which carves out an exception to Section 73(3) ibid. In the SCN, though suppression has been alleged, but however, the same is not connected with intent to evade tax, since admittedly, the appellant itself has admitted the non-payment for the reasons of its financial constraints, which is not denied by the revenue. Conclusion - SCN is issued only to impose penalty by invoking the larger period of limitation. This is clearly forbidden under Section 73(3) ibid and the case on hand therefore not covered under Section 73(4) ibid. The Commissioner has therefore erred in passing an unsustainable order which deserves to be set aside. Appeal allowed.

  ---

• 2025 (1) TMI 346
  Failure to obtain service tax registration and failure to deposit due service tax liability thereon in government exchequer - manpower recruitment or supply agency - site formation and clearance excavation and earthmoving and demolition services - Extended perod of limitation. Non-payment of service tax - HELD THAT:- It is found that the show cause notice dated 01.10.2014 was issued by the department for evasion of service tax on the allegation that the appellant has rendered taxable services under the category of manpower recruitment or supply agency and site formation and clearance excavation and earthmoving and demolition services and did not obtain service tax registration and also did not deposit the service tax liability in government exchequer - in this case, the services were provided to M/s NTPC which is a governmental authority and were exempted from levy of service tax. M/s NTPC is a public sector undertaking under the ownership of the Ministry of Power and is under control of the Government of India and is engaged in generation of electricity. Hon ble Apex Court in the case of COMMISSIONER, CUSTOMS CENTRAL EXCISE AND SERVICE TAX, PATNA VERSUS M/S SHAPOORJI PALLONJI AND COMPANY PVT. LTD. ORS. AND UNION OF INDIA ORS. VERSUS M/S SHAPOORJI PALLONJI AND COMPANY PVT. LTD. [ 2023 (10) TMI 748 - SUPREME COURT] has considered the scope of definition of Governmental Authority and as per the settled position of law, a Governmental Authority means an authority or a board or any other body: (i) set up by an Act of Parliament or a State Legislature; or (ii) established by government with 90% or more participation by way of equity or control to carry out any function entrusted to a municipality under Article 243W of the Constitution . Extended period of limitation - HELD THAT:- The invocation of extended period in the present case is also not warranted because the appellant had a bona fide belief that no service tax was attracted on the value of services rendered by them to turnkey projects being a minor sub-contractor in projects declared by Government of India as Mega Development Project of National Importance. The appellant even did not get itself registered due to the said bona fide belief and also did not recover any service tax from the main contractor M/s ITD or from M/s NTPC; and there was no intention to evade payment of service tax on the part of the appellant. Conclusion - Services provided as part of a 'Work Contract' related to dam construction are exempt. The services to a 'governmental authority' are exempt. The invocation of extended period in the present case is also not warranted because the appellant had a bona fide belief that no service tax was attracted. Appeal allowed.

  ---

• 2025 (1) TMI 345
  Classification of service - services provided by the Appellant to Canpotex - Business Auxiliary Services (BAS) or fall under Business Support Services (BSS) and Business Promotion Services (BPS)? - place of provision of services - services are used in India in the hands of the Indian farmers - export of services or not - non-application of mind and uncertainty in the mind of the Adjudicating Authority - violation of principles of natural justice - HELD THAT:- Reliance is placed on the decision of the Tribunal in Paul Merchants Limited vs. Commissioner, [ 2012 (12) TMI 424 - CESTAT, DELHI (LB)] , wherein it was held that the person, who is obliged to make payment for the service and whose need is satisfied by the provision of the service, is the recipient of service. On this ground, the Tribunal held that where the person located abroad is under an obligation to pay for the service and thus pays for it, the service is used outside India. The Tribunal has further held that when the person on whose instructions the services in question have been provided is located abroad, the destination of the service has to be treated abroad. The destination has to be decided on the basis of the place of consumption and not the place of performance. The place of provision of such services is outside the taxable territory and thus, these are not taxable for the period from July, 2012. In the instant case, considering the nature of services, it is found that the place of provision has to be determined under the general rule, i.e. Rule 3. Under Rule 3 of the POPS Rules, the place of provision of service will be Canada, i.e. location of Canpotex. As the place of provision of these services is outside the taxable territory, the same are not chargeable to Service Tax under Section 66B. In the impugned order the place of provision has been determined under Rule 4(b) of the POPS rules. It is evident from the agreement as well as the impugned order that service was not provided to an individual thus, such rule is not applicable. Further, no recipient of service was acting on behalf of the recipient in India as there was no contract between Canpotex and the farmers and Canpotex was also not present in India, therefore, Rule 4 (b) is not applicable to the facts of the case. Further, the recipient of service is the exporter and not the farmers thus, the presence of exporters determines that the service was performed outside India. The price of goods sold by one party to another is governed by the mutual understanding thereof. The seller may offer discount to the buyer towards the purchase price which will result into reduction of such sale price. The discount can be given in any form. The form of giving the discount cannot modify the nature of such discount being a factor resulting reduction of the price agreed. In this regard reliance is placed on Union of India vs. Bombay Tyres International Private Limited, [ 1983 (11) TMI 70 - SUPREME COURT] , wherein the Hon'ble Supreme Court laid down the principles for determining the deduction on account of discounts - On a perusal of the observations of the Hon'ble Supreme Court, it is clear that irrespective of the nomenclature used to describe discounts, so far as the discounts are established under the agreement or under terms of sale or by established practice and the nature of the discounts is known at or prior to the removal of the goods, they shall be admissible as deduction for arriving at the transaction value. Further, the Court has categorically held that the discounts shall be allowed even if they are not payable at the time of each invoice. Conclusion - The said discount, being towards sale of goods, is not covered under any of the categories of services under Section 65(105) and not chargeable to Service Tax under Section 66 of the Act for the period till June, 2012. Similarly, such discount, being towards sale of goods, is excluded from the definition of 'service' under Section 65B(44) of the Act and thus not chargeable to Service Tax under Section 66B of the Act for the period from July 2012. The confirmation of demand in the impugned order is not sustainable and deserves to be set aside - Appeal allowed.

  ---

• 2025 (1) TMI 344
  Justification in issuance of SCN - whether SCN was justified when the appellant had already discharged the service tax liability along with applicable interest before the issuance of the SCN? - levy of penalty - HELD THAT:- Once the discrepancies were pointed out by the audit team and accepted by the Appellant Assessee and service tax liability was discharged alongwith interest much before the issuance of the SCN, there was no occasion to issue a SCN, as has been consistently held by the Tribunal and the Superior Courts. The Tribunal in the case of Gardenia India Ltd., [ 2018 (11) TMI 305 - CESTAT ALLAHABAD] observed ' there was no need for issue of show cause notice in respect of the demands confirmed in the Order-in-Original. We set aside the penalties imposed under section 77 and 78 of Finance Act, 1994 read with Rule 15 of Cenvat Credit Rules.' Conclusion - In view of the payment of entire amount before issue of show cause notice there was no need for issue of show cause notice. Penalty also set aside. Appeal allowed.

  ---

• 2025 (1) TMI 343
  Levy of service tax - Business Auxiliary Service - act of selling / supplying bought out goods (spares) by the appellant to the buyers, while selling drilling rigs and ancillary equipment produced - HELD THAT:- Reliance placed in the case of LMP PRECISION ENGINEERING CO P LTD VERSUS C.C.E S.T. -VALSAD [ 2024 (5) TMI 777 - CESTAT AHMEDABAD] , where it was held that 'A simple requisition by the customer of the spare parts as may be required by them and delivering the same by them was as per contractual requirement or warranty obligation by the appellant. It would not tend to bring the transaction within the ambit of Business Auxiliary Service .' Conclusion - The act of selling / supplying bought out goods (spares) by the appellant to the buyers, while selling drilling rigs and ancillary equipment produced, does not come within the ambit of Business Auxiliary Service. Appeal allowed.

  ---

• 2025 (1) TMI 342
  Levy of service tax - Real Estate Agent service - having sold the land which was intended to be purchased initially for a profit - HELD THAT:- The very same issue in the present appellant company s case i.e. Rajni Builders Pvt Ltd. the issue in hand has been decided in RAJNI BUILDERS PVT LTD VERSUS C.C.E. S.T. -VADODARA-I [ 2024 (8) TMI 1448 - CESTAT AHMEDABAD] whereby this tribunal held that ' in the identical nature of transaction, it was held that assessee cannot be charged with service tax under 'Real Estate Agent'.' Conclusion - The appellant's activities were not taxable under the Real Estate Agent service category. Appeal of Revenue dismissed.

  ---

• Central Excise

• 2025 (1) TMI 341
  Condonation of gross delay of 3213 days in filing the appeals - no satisfactory explanation provided - HELD THAT:- There are no good reason to interfere with the impugned order dated 15-10-2015 passed by the Customs, Excise Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad in Appeal Nos. E/640/2009-DB, E/1284-1285/2009-DB and E/557/2012-DB respectively. The appeals are, therefore, dismissed on the ground of delay as well as on merits.

  ---

• 2025 (1) TMI 340
  Exemption from Duty - Wrongful availment of N/N. 12/2012-CE dated 17.03.2012 - food preparation supplied to Women Industrial Co-Operative Societies intended for free distribution to the economically weaker sections of the society - it was held by CESTAT that 'The demand of Central Excise duty along with interest and penalty confirmed in the impugned order is set aside.' HELD THAT:- There is no merit in these appeals and the same are accordingly dismissed.

  ---

• 2025 (1) TMI 339
  Interest on delayed refund - scope and ambit of Section 11 B and 11 BB of the Central Excise Act, 1944 and Section 35 F and 35 FF of the Central Excise Act, 1944 - Violation of principles of natural justice - failure to consider relevant facts - It is submitted that the impugned judgment does not take notice of the relevant facts, including the 6 years delay on the part of the respondent which has been condoned, as well as the statutory provisions, in terms of Section 11BB of the Central Excise Act, 1944 HELD THAT:- Issue notice, returnable in the week commencing 24.03.2025. Stay of the operation of the impugned judgment till the next date of hearing granted in favor revenue

  ---

• 2025 (1) TMI 338
  Cenvat Credit in respect of the rejected finished goods received back from the buyer - invocation of extended period of limitation - Suppression of facts or not - HELD THAT:- Though the appellant has recorded the factum of return of the defective goods in their RG 23A Part-I alongwith the relevant invoices and subsequent issuance of the production area for manufacture of finished products but has not been able to establish that the same were cleared on payment of duty. Further, the appellant has also not strictly followed the procedure as prescribed in Rule 16 of Central Excise Rules, 2002. In the absence of clear proof of payment of duty after re-processing of defective goods, it will be difficult for me to give a concrete finding on the said issue; but as far as extended period of limitation is concerned, the appellant has shown the defective goods returned in RG 23A Part-I and has been regularly filing monthly returns before the department and the department has not raised any objection and only during the course of audit conducted by AG Audit (H.P.) during 06.09.2003 to 29.10.2003 it has been pointed out that the appellant has wrongly taken the Cenvat Credit; and thereafter the show cause notice was issued purely on the basis of audit objection which is unsustainable. The appellant has been regularly filing monthly ER-1 returns for the period in dispute declaring the Cenvat Credit admissible to them and therefore, the appellant cannot be accused of suppression of relevant facts when there are series of instructions issued by the CBIC board directing the field officers to scrutinize the ER-1 returns carefully. When the audit was conducted in year 2003, the entire information was within the knowledge of the department from the date of conclusion of the audit, but in spite of that, the show cause notice was issued after a gap of three years without any further investigation conducted by the department from the date of conclusion of audit. It has been consistently held by various Courts that when the relevant facts are within the knowledge of the department, the extended period for raising the demand cannot be applied. Conclusion - The show-cause notice was issued purely on the basis of audit objections without the necessary investigation which must precede action under Section 11A of the Act. The demands based solely on audit objections without further investigation are unsustainable and that extended periods cannot be applied when facts are known to the department. The appeal of the appellant allowed on limitation alone by setting aside the impugned order.

  ---

• 2025 (1) TMI 337
  Refund of central excise duty under Section 11B of the Central Excise Act, 1944 - Self Assessment - Claim on the ground that excess payment of such duty made due to wrong valuation of goods - rejection on the ground that appellant have failed to justify that the burden of central excise duty paid by them and have not been passed on to the customers - principles of unjust enrichment - HELD THAT:- In the present case appellant have paid the duty of self assessment basis. Whether the issue with regards to applicability of Section 4A or Section 4 for making assessment of duty could not have been raised by the appellant in these proceedings of refund in terms of Section 11B of Central Excise Act, 1944 needs to be considered in the light of decision of Hon ble Supreme Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [ 2019 (9) TMI 802 - SUPREME COURT (LB) ]. Hon ble Supreme Court has specifically held that ' The provisions under Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self- assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re- assessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, re- assessment is not permitted nor conditions of exemption can be adjudicated.' Nothing has been brought on record to show that the self assessment made by the appellant at the time of clearance of these goods was ever appealed against by the appellant before the Commissioner (Appeals) in terms of Section 35 of Central Excise Act, 1944 or the order of self assessment has been modified. In absence of such modification the submissions made by the appellant in these proceedings under Section 11B challenging the self assessment made for claiming this refund cannot be said to be proper. In view of the above referred decision of Hon ble Supreme Court were in it has been specifically held that refund proceedings under Section 11B are executionary in nature. Conclusion - The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re-assessment proceedings at all. The appellant failed to prove entitlement to a refund under Section 11B. There are no merits in this appeal - appeal dismissed.

  ---

• 2025 (1) TMI 336
  Central Excise Duty for the period prior to registration - inclusion of clearances made to industrial customers in the assessable value - HELD THAT:- The claim made by the appellant is substantiated with documentary evidence. The clearances made to industrial customers is also included while computing the duty demanded in the impugned order. Since MRP based assessment is not applicable to clearances made to industrial customers, the submission made by the Appellantagreed upon, that the value of clearances amounting to Rs.3,62,038/- needs to be reduced from the value of Rs.1,53,53,283/- worked out by the Department for demanding duty. If this amount is reduced, then the value of clearances made during the Financial Year 2014-15 prior to 31.01.2015 i.e., the date of taking registration, works out to Rs.1,49,91,245/- - There is no demand liability to be paid by the Appellant for the period prior to 31.01.2015. There is no dispute that the Appellant has adopted the MRP based assessment after taking registration with effect from 31.01.2015. Since the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise. Conclusion - MRP-based assessments are not applicable to industrial customer clearances, and demands based on incorrect assessments are unsustainable. No demand liability to be paid by the Appellant for the period prior to registration. Appeal allowed.

  ---

• CST, VAT & Sales Tax

• 2025 (1) TMI 335
  Disallowance of claims of branch transfers by CMS Computers under section 6A of the CST Act - inter-state sale or not - levy to tax under the CST Act with interest and penalty - HELD THAT:- It is seen that the Assessing Officer has not provided any specific finding and had given a general finding that there were pre-existing orders for movement of goods. Mere existences of pre-existing purchase orders, prior to movement of goods, does not automatically imply that the entire movement constitutes an inter-state sale, particularly when the goods are stock transferred in the regular course of business. CMS Computers had to maintain ample stock at the branch office to fulfill the orders placed by the different customers. The Assessing Officer was obliged to evaluate each transaction involving the transfer of goods before deciding whether to allow or disallow the branch transfer. In this connection reference can be made to the judgment of the Supreme Court in Tata Engineering Locomotive [ 1970 (3) TMI 104 - SUPREME COURT] , wherein it was held that ' It has been suggested that all the transactions were of similar nature and the appellant s representative had himself submitted that a specimen transaction alone need be examined. In our judgment this was a wholly wrong procedure to follow and the Assistant Commissioner, on whom the duty lay of assessing the tax in accordance with law, was bound to examine each individual transaction and then decide whether it constituted an inter-state sale exigible to tax under the provisions of the Act.' Conclusion - The State Tribunal had meticulously examined the decisions and the factual position and has, therefore, considered it appropriate to remand the matter to the Assessing Officer to verify the lorry receipts/dispatch proof in respect of each of the transactions. There is, therefore, no infirmity in order passed by the State Tribunal. Appeal dismissed.

  ---

• Indian Laws

• 2025 (1) TMI 334
  Dishonour of Cheque - legally enforceable debt or other liability - Nature of Advance Payment - whether the cheque as given by the applicant was in discharge of a legally enforceable debt/liability or not? - Complainant i.e. opposite party no.2 has not disclosed the lawyer and client relationship between him and the applicant - HELD THAT:- It is clear that for commission of an offence under Section 138 N.I. Act, the cheque that is dishonoured must represent a legally enforceable debt not only on the day when it was drawn but also on the date of its maturity/presentation. If the cheque presented for collection of total value of the cheque without endorsing the part payment made by the drawer is dishonoured no offence under Section 138 N.I. Act would be attracted, as being held in the case of DASHRATHBHAI TRIKAMBHAI PATEL VERSUS HITESH MAHENDRABHAI PATEL ANR. [ 2022 (10) TMI 424 - SUPREME COURT] . In the present case, the opposite party no.2 has mentioned that he had given Rs.12,25,000/- in cash to the applicant for purposes of purchasing property. Although, in the complaint as well as notice, the complainant has spoken about returning of Rs.11,00,000/- by giving a cheque in this regard but there is no whisper about Rs.1,25,000/-. In case it is taken that Rs.1,25,000/- has already been paid, therefore, as part payment was already made, the complaint under Section 138 N.I. Act could not have been entertained - Be that as it may, once the complainant i.e. opposite party no.2 has not disclosed the lawyer and client relationship between him and the applicant and as for the first time admitted the aforesaid fact in his counter affidavit, the story in the complaint of giving advance in cash without disclosing as to how and from where such an arrangement was made also gives benefit to the applicant who under such relationship as admitted by the opposite party no.2 in his counter affidavit has mentioned about an agreement which cannot be disbelieved by this Court. As per the provision of Section 202 Cr.P.C. as amended with effect from 23.6.2006, the requirement is that in those cases where the accused is residing at a place beyond the area in which the concerned Magistrate exercises his jurisdiction, it is mandatory on the part of Magistrate to conduct an enquiry or investigation before issuing the process. That means, in case, if such an enquiry is not conducted in cases where the accused resides at a place beyond the area in which the Magistrate exercises his jurisdiction, the purpose of amendment in Section 202 Cr.P.C. would frustrate. Further the Apex Court in BHARAT BARREL DRUM MANUFACTURING COMPANY VERSUS AMIN CHAND PAYRELAL [ 1999 (2) TMI 627 - SUPREME COURT] , had considered Section 118(a) of the Act and held that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable and defendant can prove the non-existence of a consideration by raising a probable defence. The present case appears to be a case of malicious prosecution wherein the opposite party no.2 has concealed the real fact of lawyer-client relationship and has wrongly disclosed about Dilip Kumar Singh who is related to the applicant being Manager of the Institution where opposite party no.2 was working at the relevant point of time to which the Court cannot close its eyes as at the instance of relative of the applicant, the present complaint has been filed concealing the real relationship of lawyer client. It is also relevant to point out the fact that scope and ambit of Section 482 Cr.P.C. is a very agitated and debatable issue. Nevertheless, there are some cases which have got wide acceptance in the legal fraternity and hence, are used as the minor guidelines/principles governing the cases of quashing criminal proceedings. Conclusion - In the facts of the present case, where it has been established that opposite party no.2 has not approached the Court with clean hand, noticing his conduct as is clear from the records, this Court finds it to be a fit case for exercising powers under Section 482 Cr.P.C. Keeping in mind that criminal prosecution is a serious matter, it effects the liberty of a person, no greater damage can be done to the reputation of a person than dragging him in a criminal case, continuance of prosecution would be nothing but an abuse of the process of law and will be a mental trauma to the applicants, it becomes necessary for this Court to invoke inherent powers under Section 482 Cr.P.C. in present facts and circumstances of his case. This Court finds a good ground for quashing the impugned summoning order as well as entire proceedings - The present application under Section 482 Cr.P.C. is, accordingly, allowed.

  ---