TMI Tax Updates - e-Newsletter
February 13, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Securities / SEBI Insolvency & Bankruptcy PMLA Service Tax Central Excise Indian Laws

Articles

1. Ease of Doing Business in real sense  by CBIC's Latest Instruction on Interest & Penalty Appeals

   By: DrJoshua Ebenezer

2. Greenwashing" and the principle of "Polluters Must Pay"

   By: YAGAY andSUN

3. Reverse Charge Mechanism (RCM) for Metal Scrap Recipients

   By: Tushar Malik

4. Exploring the Types of Trademarks and Their Legal Protections

   By: Ishita Ramani

5. Greenwashing: An Overview

   By: YAGAY andSUN

6. LEGAL TERMINOLOGY IN GST LAW (PART -8)

   By: Dr. Sanjiv Agarwal

7. What is the future of vpob: trends and predictions

   By: shubham jadhav

8. Greenwashing in the “Indian Context”.

   By: YAGAY andSUN

9. Ban on Single-Use Plastics in India: Success or Challenges?

   By: YAGAY andSUN

10. Ban on Sale of Acid in India: Overview

   By: YAGAY andSUN

News

1. GST evasion racket busted in Thane; 1 held

2. BJP-led UP govt not releasing correct death toll in Maha Kumbh stampede, alleges Mamata

3. Bengal budget pack of empty promises: BJP leader Suvendu Adhikari

4. Haryana Assembly's budget session to begin on Mar 7

5. Rs 3.89-lakh cr budget for FY'26 tabled in Bengal assembly, 4 pc DA increased

6. Rs 3.89 lakh cr budget for FY'26 tabled in Bengal assembly, 4 pc DA increased

7. Israel sells USD 5 billion in bonds to manage budget deficit, finance its war: Report

8. Himachal: Baba Balaknath trust approves budget of Rs 40.60 crore for 2025

9. Budget to be tabled in WB Assembly on Wednesday, focus likely on social welfare, women empowerment

10. Omar chairs pre-budget consultation meeting with stakeholders

11. Middle class treated as 'skeleton without soul' in USD5 trillion economy pursuit: Chadha

12. Rupee fell 50 pc under Modi govt compared to 33 pc during UPA regime: CPI-M MP

13. RBI lifts curbs on Kotak Mahindra Bank; lender can issue fresh credit cards

14. RBI to issue Rs 50 notes with Guv Malhotra's signature

15. Simplified Income Tax Bill brings in 'tax year' concept; omits 'previous year', obsolete clauses

16. 5th Meeting of the National Traders’ Welfare Board held in New Delhi

17. 87th Meeting of Network Planning Group under PM GatiShakti evaluates key Infrastructure projects

18. Income Tax Bill, 2025, to be tabled in Parliament on Thursday: Key highlights

19. Simplified Income Tax Bill brings in 'tax year' concept, omits 'assessment year'

20. Leaders of Indonesia and Turkiye hold talks on defence and economic ties

21. Leaders of Indonesia, Turkiye hold talks on defence, economic ties

22. New Income Tax Bill to have 622 pages, 536 sections; likely to be tabled in Par on Thursday

23. Trump readies matching tariffs on trade partners, possibly setting up major economic showdown

24. India-Israel Business Forum & CEO Forum Held To Strengthen Bilateral Economic Ties

25. DRI busts two facilities for printing of Fake Indian Currency Notes (FICN) in Maharashtra and Haryana; 3 arrested

Notifications

GST

1. 09/2025 - dated 11-2-2025 - CGST

Seeks to bring in force provisions of various rule of Central Goods and Services Tax (Amendment) Rules, 2024

GST - States

2. 188–F.T. - dated 4-2-2025 - West Bengal SGST

Seeks to amend notification No.697 F.T. dated 13.07.2021.

Income Tax

3. 15/2025 - dated 10-2-2025 - IT

Central Government approves ‘Bhaikaka University’ Anand, Gujarat for ‘Scientific Research’ under the category of ‘University, college or other institution’ for the purposes of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961

SEZ

4. S.O. 688 (E) - dated 7-2-2025 - SEZ

The Central Government has granted approval for the amalgamation of Special Economic Zones into one Multi-Sector Special Economic Zone, spanning 246.333 hectares. The zone is being developed by M/s. Mahindra World City Developers Limited and is situated in Chenglepet Taluk, Kancheepuram District, Tamil Nadu.

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/IMD/IMD-SEC-3/P/CIR/2025/15 - dated 12-2-2025

Service platform for investors to trace inactive and unclaimed Mutual Fund folios- MITRA (Mutual Fund Investment Tracing and Retrieval Assistant)

IBC

2. IBBI/LIQ/82/2025 - dated 11-2-2025

Intimation to the Board on the appointment of insolvency professional under various processes under the Code

DGFT

3. Trade Notice No. 29/ 2024-25 - dated 11-2-2025

Mandatory online submission and online payments against Show Cause Notices and other proceedings under provisions of the FTD & R Act

Highlights / Catch Notes

GST

• Central Government Sets Phased Implementation Dates for CGST Amendment Rules Under Section 164 Starting February 2025

  Notifications : The Central Government, exercising powers under Section 164 of CGST Act 2017, has notified the implementation dates for specific provisions of CGST (Amendment) Rules 2024. Rules 2, 24, 27, and 32 will come into effect from February 11, 2025, while Rules 8, 37, and clause (ii) of Rule 38 will be implemented from April 1, 2025. This notification, issued by CBIC, establishes a phased implementation approach for the amended rules, ensuring systematic adoption of the new GST provisions. The staggered implementation allows stakeholders adequate time to adapt to the regulatory changes while maintaining administrative efficiency in tax governance.
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• GST Registration Cancellation Invalid: Show Cause Notice Under Rule 21(b) Lacked Specific Violations and Reasoned Order

  Case-Laws - HC : HC determined the cancellation of GST registration invalid due to procedural deficiencies. The show cause notice (SCN) merely cited Rule 21(b) of CGST Rules 2017 without specifying material violations, preventing adequate response from the registrant. Despite the registrant's explanation of bank-verified invoices, the assessing authority failed to provide reasoned consideration of the response. The authority's single-line cancellation order, lacking substantive examination of the reply, was deemed insufficient to justify registration cancellation. The court emphasized that mere citation of legal provisions without detailed violation particulars and failure to provide reasoned orders violates principles of natural justice. The petition was allowed, invalidating the registration cancellation.
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• Provisional Attachment Order Under Section 83 CGST Act Invalidated Due To Lack Of Reasoning And Necessity

  Case-Laws - HC : HC quashed provisional attachment order under Section 83 of CGST Act, finding it legally deficient on multiple grounds. The order lacked tangible material justifying attachment necessity, failed to disclose substantive reasons beyond mere statutory reproduction, and showed no application of mind regarding jurisdictional elements. While Section 83 permits immediate action without pre-decisional hearing to protect revenue interests, it does not dispense with the requirement to provide reasoning. The Court rejected respondent's technical arguments about form limitations, emphasizing that fundamental principles of reasoned decision-making cannot be sacrificed for expediency. The attachment was invalidated for failing to demonstrate necessity through proper reasoning and for not considering less restrictive alternatives.
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• Assessment Order Under Section 73 of GST Act Quashed as Time-Barred, Exceeding Three-Year Limitation Period

  Case-Laws - HC : HC quashed demand order and show cause notice issued under Section 73 of UP GST Act 2017. For FY 2017-18, annual return filing deadline was extended to 05.02.2020. Per Section 73(10), three-year limitation period for passing assessment order would expire on 05.02.2023. Assessment order dated 02.12.2023 was time-barred as it exceeded statutory limitation period. Court held orders dated 02.12.2023 and 29.09.2023 passed by Asst. Commissioner were void being beyond limitation period prescribed under Section 73. Petition allowed with orders quashed for being time-barred.
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• Tax Authority's GST Demand Order Invalid Due to Missing Show Cause Notice Under Section 73 AGST Act

  Case-Laws - HC : HC quashed the impugned order dated 30.12.2023 due to procedural non-compliance with Section 73 of AGST Act, 2017. The authority failed to issue a proper Show Cause Notice as mandated under Section 73(1), instead only serving a Summary Notice in Form GST DRC-01. The court emphasized that compliance with subsections (1) to (8) and (10) to (11) of Section 73, along with Rule 142(1), are prerequisite conditions for validity of orders under Section 73(9). The absence of a proper Show Cause Notice violated principles of natural justice, rendering the tax determination order legally unsustainable. The petition was disposed of in favor of the petitioner.
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• Input Tax Credit Claim Valid Under Amended Section 16; Reversal Orders Quashed and Credit Amounts Restored

  Case-Laws - HC : HC held that petitioner's claim for input tax credit (ITC) was valid under amended Section 16 provisions. Following precedent established in Sri Ganapathi Pandi Industries case, the court affirmed taxpayer's entitlement to avail ITC for the disputed financial periods. The reversal of ITC along with associated penalties and interest was set aside. The court's ruling reinforces the principle that ITC claims meeting statutory requirements under amended provisions cannot be denied retrospectively. Original assessment orders requiring reversal were quashed, with directions to restore the claimed ITC amounts to the petitioner's electronic credit ledger.
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• GST Registration Cancellation Cannot Be Retrospective Without Prior Notice And Reasons In Show Cause Notice

  Case-Laws - HC : HC invalidated the retrospective cancellation of GST registration due to procedural deficiencies in the show cause notice (SCN). The original SCN failed to disclose the intent for retrospective cancellation or provide supporting reasons, violating principles of natural justice. The Court determined that absence of prior notice regarding retrospective action rendered the cancellation order invalid from February 13, 2024. While upholding the cancellation itself, the Court modified the effective date to align with the SCN issuance date of November 7, 2024, ensuring procedural fairness and due process in administrative action.
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• Tax Assessment Order Quashed: Section 169 Violation for Improper Notice Delivery and Denial of Fair Hearing Opportunity

  Case-Laws - HC : HC quashed assessment order for 2018-19 due to violation of natural justice principles under Section 169. Authority failed to serve proper notice seeking explanation regarding alleged defects. Following precedent established in prior cases, Court affirmed mandatory requirement of notice delivery either in person, registered post, or registered email. Only upon impracticability of these methods can alternative publication through portal/newspaper be considered. Assessment order converted to show cause notice, allowing petitioner opportunity to respond. Decision upholds fundamental right to be heard before adverse action, reinforcing procedural safeguards in tax assessment proceedings.
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• Port Authority's Land Lease for Commercial Complex Not Exempt Under Entry 41, Must Pay GST on Services

  Case-Laws - AAAR : AAAR ruled that long-term land lease services by Port Authority to Company A for establishing a commercial office complex does not qualify for GST exemption under Entry 41 of Notification 12/2017-CT(Rate). The authority determined that constructing an office complex for corporate use and rental purposes constitutes neither industrial nor financial activity. The definition specifically excludes industrial buildings, and mere maintenance of accounts cannot be equated with financial activity. Additionally, the Port Authority failed to meet the ownership threshold requirement of 20% government stake. Consequently, the lease services for commercial office complex development remain taxable under GST, as they do not satisfy the essential conditions for exemption under the notification.
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Income Tax

• Share Transactions Deemed Tax Avoidance Scheme After Multiple Authorities Find Evidence of Colourable Device to Evade Liability

  Case-Laws - HC : HC upheld lower authorities' concurrent findings that share transactions were a colourable device to avoid tax. The court determined this was a factual conclusion supported by evidence rather than a substantial question of law requiring intervention. The assessee's belated argument about potential loan deductions was dismissed as hypothetical. The court emphasized its limited scope to interfere with factual findings when backed by material evidence. Given the consistent determinations by three authorities and adequate supporting documentation, the court found no grounds to disturb the established position that the transactions constituted tax avoidance. Appeal dismissed.
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• Revenue Appeals Below Rs. 2 Crores Must Be Withdrawn Per CBDT Circulars, Retrospective Application Confirmed For Pending Cases

  Case-Laws - HC : HC determined that revenue appeals below monetary threshold of Rs. 2 crores must be withdrawn per CBDT circulars, rejecting argument for selective application. Court held that withdrawal provisions in circulars explicitly apply to pending appeals, while exceptions for filing new appeals below monetary limits are prospective from March 15, 2024. Following precedents in Anonymous v. Anonymous and related cases, HC disposed of appeals as revenue counsel lacked instructions to withdraw, despite clear directive in circulars. Court emphasized holistic interpretation of circulars, confirming retrospective application for withdrawal of pending matters while maintaining prospective application for new filings.
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• Appeal Filed in Wrong High Court Dismissed: Tax Assessment Order's Location Determines Territorial Jurisdiction for Appeals

  Case-Laws - HC : HC ruled on territorial jurisdiction in a tax appeal case. Original assessment order was passed by AO in Amritsar, while appeal was filed in Delhi. Following precedents from Seth Banarsi Dass Gupta and M/s ABC Papers Ltd., court determined that jurisdiction lies with HC within whose territory the AO passed the assessment order. Since assessment was made in Amritsar, Delhi HC lacks territorial jurisdiction to entertain the appeal. Court declined to examine substantive merits or ITAT's jurisdiction, dismissing appeal solely on jurisdictional grounds. Matter to be pursued before appropriate jurisdictional HC.
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• Direct Tax Vivad Se Vishwas Scheme Benefits Apply to Potential Appellants Within Appeal Filing Period Under Section 89(1)(a)

  Case-Laws - HC : HC determined that the Direct Tax Vivad Se Vishwas Scheme's benefits extend beyond cases with existing appeals, writs, or special leave petitions. The court interpreted Section 89(1)(a) broadly to include assessees who are aggrieved by Income-Tax Authority orders and still within the timeframe to file appeals, even if they haven't formally initiated proceedings. This interpretation expands the scheme's scope beyond current litigants to potential appellants, provided they fall within the statutory appeal filing period. The ruling effectively broadens access to the tax dispute resolution mechanism, allowing more taxpayers to utilize the settlement provisions under the Finance (No.2) Act, 2024.
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• Reopening Assessment Under Section 147 Valid When AO Discovers New Facts About Bogus Purchases and Investments

  Case-Laws - AT : ITAT upheld the reopening of assessment under s.147 as it was based on new facts not previously available to the AO, rejecting assessee's claim of mere "change of opinion." Regarding bogus purchases from six entities, ITAT confirmed CIT(A)'s approach of quantifying profit at 10% GP rate (less 1.53% already disclosed), sustaining addition of Rs. 1,22,08,002. CIT(A) reasonably estimated profits based on prevailing GP rates in rice miller/trader business for goods procured from grey market rather than bogus entities. On unaccounted investments, ITAT affirmed AO's addition based on "peak purchase" amount appearing in bogus concern's account, considering it represented unexplained investment in bogus billing operations.
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• Income From Land Deals Estimated at 10% of Turnover Under Section 80-C; Bank Deposits Partially Allowed as Business Income

  Case-Laws - AT : ITAT partially allowed appeal concerning assessment year 2013-14. Given assessee's cash-based business nature and bank deposits consistent with disclosed turnover, complete disallowance of cash deposits was deemed excessive. While assessee provided ledger copies for land purchases, documentation was insufficient per AO requirements. ITAT estimated income at 10% of total turnover (Rs. 2,23,77,000/-) as reasonable resolution. Based on bank certificate evidencing principal repayment of Rs. 72,643/- and interest of Rs. 3,59,357/-, tribunal directed AO to allow deductions under s.80-C and interest on self-occupied property. Matter resolved balancing business realities with compliance requirements.
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• Trademark Sale Gains Prior to 1998 Finance Act Qualify as LTCG, Section 50 Not Applicable to Pre-Amendment Intangibles

  Case-Laws - AT : ITAT held that gains from sale of trademarks "Coldarin" and "Raricap" acquired prior to 01/04/1998 qualify as Long Term Capital Gains, not Short Term Capital Gains. Section 50 was inapplicable as intangible assets were not part of depreciable block assets before Finance Act 1998 amendment. Since the trademarks were acquired in FY 1992-93 and 1997-98 when no statutory provision mandated inclusion of intangibles in block assets, depreciation provisions under Section 50 cannot apply. ITAT overturned lower authorities' treatment of gains as STCG, ruling in appellant's favor to classify proceeds as LTCG for tax purposes.
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• Trading Profit Rate Capped at 15% and Penalty Notice Under Section 271(1)(c) Quashed Due to Procedural Defects

  Case-Laws - AT : ITAT addressed two key issues in the appeal. On trading results, following precedent from AY 2000-01 to 2004-05, the Tribunal restricted gross profit rate to 15% and directed AO to recalculate trading addition accordingly. Regarding penalty under s.271(1)(c), the notice was found defective due to non-striking of irrelevant portions, making it impermissibly vague. Following Bombay HC precedent, ITAT held that penalty proceedings require specific grounds through proper statutory notice. The omnibus notice failed to inform appellant of precise charges. Consequently, both the AO's penalty order and CIT(A)'s confirmation were deemed erroneous. Appeal allowed in taxpayer's favor.
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• Penalty Under Section 271AAB Dropped As Voluntary Tax Payment During Search Doesn't Qualify As Undisclosed Income

  Case-Laws - AT : ITAT ruled against penalty imposition under s.271AAB(1A)(b) at 60% rate. The tribunal emphasized that mere voluntary disclosure during search proceedings does not constitute 'undisclosed income' for penalty purposes. No incriminating materials were discovered during the search substantiating undisclosed assets in form of money, bullion, jewelry, or unrecorded transactions. The tribunal held that market adjustments claimed by assessee did not qualify as undisclosed income under Explanation (c) to s.271AAB. Penalty requires discovery of undisclosed income during search as a prerequisite condition. Voluntary offer to pay additional tax to avoid litigation cannot be basis for penalty. The ITAT directed AO to delete the penalty assessment.
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• Income Surrendered During Survey Not Unexplained Under Section 115BBE As AO Found It From Regular Business

  Case-Laws - AT : ITAT overturned PCIT's revision order under s.263 regarding treatment of income surrendered during survey. The tribunal found AO had conducted proper inquiry into excess cosmetics stock discovered during survey. AO accepted assessee's explanation that undisclosed income arose from regular business transactions, not unexplained investments. Assessee demonstrated excess stock valued at cost was Rs.17 lakhs, not Rs.50 lakhs claimed. Since AO took a legally plausible view after adequate verification that s.115BBE was inapplicable, and no evidence existed of income from sources besides cosmetics business, PCIT's revision jurisdiction was unjustified. The original assessment order was neither erroneous nor prejudicial to revenue interests. Appeal allowed in assessee's favor.
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Customs

• Lactulose Imports Get Provisional Release Under Sr. No. 166(A) With Bond, Pending Final Classification Assessment

  Case-Laws - HC : HC ruled on customs duty exemption for Lactulose imports, addressing classification under Sr. No. 166(A) versus 166(B) of N/N. 50/2017. The court determined that while duty rates were identical under both classifications, 166(B) required compliance with Customs Rules 2022. Without definitively settling classification, HC directed provisional release under 166(A) subject to bond submission. Customs Department retained authority to issue Show Cause Notice and conduct further proceedings. The Bills of Entry were ordered to be assessed with partial exemption under 166(A), contingent on petitioner furnishing required bond. This interim arrangement preserved department's right to determine final classification while facilitating immediate goods clearance.
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• Multimedia Speakers with Radio Function Classified Under CTH 85182200 Based on Essential Character as Sound Reproduction Units

  Case-Laws - AT : The dispute centered on tariff classification of imported multimedia speakers and spare parts between CTH 85182200 (speakers) and CTH 85279100 (broadcast receivers). Following precedent established by CESTAT Bangalore, the Tribunal determined that multimedia speakers, despite having additional functionality, maintain their essential character as speaker units. The primary purpose remains sound reproduction rather than broadcast reception. The Tribunal ruled the goods are properly classifiable under CTH 85182200 as multiple speakers mounted in a single enclosure, aligning with the principle that classification should reflect the item's predominant function. The appellant's classification claim was upheld and appeal allowed.
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• Customs Authority Must Share Market Survey Data Before Rejecting Declared Import Value Under CVR 2007

  Case-Laws - AT : CESTAT addressed valuation dispute regarding imported electronic calculators where declared values were rejected and redetermined without sharing market enquiry report with the appellant. The Tribunal found violation of natural justice principles as appellant was denied opportunity to examine and respond to market survey data used for value redetermination. Following precedent from CST v. R.P. Dixit Saghidar, CESTAT remanded matter to Original Authority with directions to provide appellant copy of market inquiry report and worksheet, allow reasonable opportunity for response, and conduct fresh adjudication. The ruling emphasized proper implementation of Customs Valuation Rules 2007 and importance of transparency in value rejection proceedings.
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• Customs Duty Rate Determined by Port-Specific Entry Inwards Date Under Section 15, Not First Port Entry

  Case-Laws - AT : CESTAT held that customs duty rate is determined by the date of entry inwards at the specific port where goods are unloaded, not when vessel enters territorial waters or receives entry inwards at first port of call. Section 31 of Customs Act requires port-specific documentation for entry inwards by proper officer at each port. While goods become dutiable upon entering territorial waters, machinery provisions in Section 15 govern assessment methodology. The Tribunal rejected appellant's contention that first entry inwards dictates duty rate for subsequent ports, finding no statutory basis for this interpretation. Assessment at 7.5% based on entry inwards at Pipavav Port was upheld and appeal dismissed.
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• Special Additional Duty Exemption Denied After Importer Failed to Declare Goods Worth 73.79 Crores in VAT Returns

  Case-Laws - AT : CESTAT upheld denial of Special Additional Duty (SAD) exemption under Notification dated 17.03.2012 for imported goods valued at Rs. 73.79 Crores during 2013-2017. Appellant failed to declare goods in Delhi VAT returns and provide supporting documentation, violating notification requirements for state destination declaration and VAT registration disclosure. Principal Commissioner's findings established fraudulent practices through false declarations and non-compliance with exemption conditions. Tribunal confirmed recovery of SAD with penalties, noting appellant's failure to controvert evidence of tax evasion and misrepresentation. Appeal dismissed, affirming original order requiring payment of duties and penalties.
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DGFT

• DGFT Makes Electronic Certificates of Origin Mandatory Through eCoO 2.0 Platform, Manual Certificates Declared Invalid

  Circulars : DGFT issued directive regarding mandatory electronic Certificates of Origin (CoO) issuance through eCoO 2.0 platform on trade.gov.in. Manual CoOs issued after specified deadlines are declared null and void. Partner countries' customs authorities have been notified to reject manual certificates issued in contravention of guidelines. Violations should be reported to [email protected]. Non-compliant agencies risk removal from authorized CoO issuers list. This follows previous Trade Notices No. 36/2023-2024 and 24/2024-25 establishing electronic issuance requirements. Enforcement aims to ensure standardized digital documentation for international trade compliance and prevent unauthorized manual certifications.
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FEMA

• RBI Revises Payment Rules Between ACU Member Countries Under FEMA 14(R)(1) For Cross-Border Transactions

  Notifications : RBI amended the Foreign Exchange Management (Manner of Receipt and Payment) Regulations 2023 through notification FEMA 14(R)(1)/2025-RB. The amendment modifies Regulation 3(2)(I)(a)(ii) regarding payments between ACU member countries. Under the revised provision, transactions between residents of ACU participant countries must be conducted through the ACU mechanism or as per RBI directions to authorized dealers. For transactions with ACU members except Nepal and Bhutan, payments shall follow the specified manner for other transactions. The amendment aims to streamline cross-border payment mechanisms within ACU member territories while maintaining regulatory oversight of foreign exchange transactions. The regulations take effect upon official gazette publication.
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IBC

• Electricity Supplier Cannot Recover Additional Pre-CIRP Dues After Resolution Plan Approval Under Section 60(5)(c)

  Case-Laws - AT : NCLAT affirmed NCLT's jurisdiction to address pre-CIRP dues refund applications under Section 60(5)(c). The tribunal held that all pre-CIRP claims were extinguished upon resolution plan approval, where appellant's claim of 2,32,13,387 was settled for 4,64,003. The respondent's request for refund of pre-CIRP payments was granted, as these payments were made under duress to maintain electricity supply. The tribunal emphasized that post-resolution plan approval, no additional pre-CIRP claims could be entertained, following precedents from SC judgments in Paschimanchal Vidyut and Ghanshyam Mishra cases. The appellant was barred from recovering any pre-CIRP dues beyond the approved resolution plan amount.
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Indian Laws

• New Income Tax Bill Proposes Single Tax Year System, Digital Governance, and Enhanced CBDT Powers Under Clause 533

  News : The proposed Income Tax Bill 2025 aims to replace the Income Tax Act 1961 with a modernized and streamlined tax framework comprising 536 sections across 23 chapters. Key reforms include elimination of the previous year/assessment year distinction in favor of a single "tax year" concept, expanded CBDT authority for independent tax administration, and clearer provisions for ESOP taxation. The simplified legislation incorporates judicial precedents from past 60 years while reducing total page count to 622 from the original Act's 880 pages. Notable structural changes include expansion to 16 schedules, enhanced digital governance mechanisms, and empowerment of CBDT under Clause 533 to implement compliance frameworks without requiring parliamentary amendments. The bill aims to reduce litigation and provide greater tax certainty through clearer language and modernized provisions.
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• Spouses Held Jointly Liable for Trading Account Debt Under Bye-law 247A Due to Husband's Active Involvement

  Case-Laws - SC : SC upheld arbitral tribunal's finding of joint and several liability between spouses for debit balance in wife's trading account. The husband's conduct and marital relationship established his involvement, making him liable as a party to arbitration. The adjustment of credit balance from husband's account to wife's account was deemed legal under Bye-law 247A, as joint liability permitted such transfers without requiring written authorization. HC's interference under Section 37 was improper as it reappreciated evidence rather than applying perversity test under Section 34. The arbitral award was reinstated, holding both spouses jointly liable for the debit balance.
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• Legal Heirs Must Pay Compensation in Cheque Bounce Cases Even After Accused's Death Under Section 138 NI Act

  Case-Laws - HC : HC ruled that criminal proceedings under NI Act for cheque dishonor do not automatically abate upon accused's death during pendency of revision application. While no explicit definitions exist for fine or compensation in CrPC/IPC, compensation ordered under Sections 138/141 of NI Act is recoverable from deceased's estate similar to fine under Sections 421 and 431 CrPC. The Rs. 12 Lakh compensation awarded remains enforceable against the deceased's legal heirs through property auction/sale proceedings. Court directed substitution of legal representatives in place of deceased accused and held case would continue for recovery of compensation, treating it equivalent to fine for enforcement purposes. Application for substitution of legal heirs allowed.
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SEBI

• Stock Brokers Can Trade G-Secs Through Independent Business Units While Maintaining Separate Operations From Securities Trading

  Circulars : SEBI authorized registered stock brokers to access NDS-OM for G-Secs trading through Separate Business Units (SBUs). The SBUs must operate independently from the broker's securities market activities, maintaining segregated accounts and net worth. These units are restricted exclusively to NDS-OM transactions and must maintain arm's length relationships with other operations. The regulatory jurisdiction for SBU activities, including policy, risk management, and enforcement, falls under the respective regulatory authority, not SEBI. Consequently, stock exchange grievance mechanisms, Investor Protection Fund, and SCORES system are not applicable for SBU services. This directive aims to establish clear operational boundaries while facilitating broker participation in the G-Secs market.
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• SEBI Mandates Uniform Investor Charter Compliance Across 19 Market Intermediary Categories Including Brokers, Mutual Funds, Advisers

  Notifications : SEBI introduced comprehensive amendments across multiple regulations mandating compliance with Investor Charter requirements. The amendments affect 19 different regulatory frameworks including those governing stock brokers, merchant bankers, registrars, debenture trustees, mutual funds, custodians, investment advisers, and portfolio managers. Each regulated entity must now ensure compliance with the Investor Charter as specified by SEBI. The regulations came into effect upon official gazette publication in February 2025. This standardized approach aims to enhance investor protection and transparency across India's securities market by requiring all market intermediaries and participants to adhere to uniform charter guidelines prescribed by the regulatory authority.
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• Stock Exchanges Must Take Full Responsibility for AI Tools Used in Trading and Operations Under New Regulation 39B

  Notifications : SEBI amended the Securities Contracts Regulations by introducing Regulation 39B, establishing strict accountability for recognized stock exchanges and clearing corporations utilizing artificial intelligence tools. The amendment mandates these entities bear sole responsibility for data privacy, security, and integrity of investor information, accountability for AI-generated outputs, and compliance with applicable laws. The regulation encompasses both internally developed and third-party AI solutions used for trading, settlement, compliance, or business operations. This amendment, effective upon gazette publication, represents a significant regulatory framework for AI governance in securities markets, ensuring protection of stakeholder interests while enabling technological advancement in market infrastructure.
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• SEBI Makes Intermediaries Fully Liable for AI Tools' Output and Data Privacy in Investment Operations Under 2008 Regulations

  Notifications : SEBI amended the Intermediaries Regulations 2008 by introducing Chapter IIIB concerning artificial intelligence usage. The amendment establishes that regulated entities utilizing AI and machine learning tools, whether proprietary or third-party, are solely accountable for data privacy, security, and integrity of investors' information. Entities bear complete responsibility for AI-generated outputs and regulatory compliance. The regulation encompasses all AI applications used for investment, trading, strategy dissemination, or internal operations. SEBI reserves the right to take punitive action under Chapter V for violations. The amendment defines AI tools as any software, program, or system used for investment-related activities or compliance purposes, applying to all SEBI-regulated persons as defined in regulation 16A.
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• AI Implementation in Depositories: New Rules Mandate 15-Day Fee Payment and Data Protection Under Regulation 82AA

  Notifications : SEBI amended the Depositories and Participants Regulations effective April 1, 2025, introducing key modifications to regulatory compliance. Depositories must now remit annual fees within 15 days of the financial year start, accompanied by chartered accountant-certified computation statements. A 15% per annum interest penalty applies for delayed or insufficient payments. Notably, regulation 82AA establishes depositories' sole responsibility for artificial intelligence implementation, mandating accountability for data privacy, security, and regulatory compliance regardless of whether AI tools are internally developed or externally sourced. The amendment emphasizes protection of investor data and stakeholder interests in automated systems while maintaining fiduciary obligations.
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• Arbitrary Date Restriction in SEBI Circular on Margin Penalty Refunds Struck Down as Discriminatory Under Article 14

  Case-Laws - HC : HC quashed the arbitrary date stipulation (11.10.2021) in Circular Ref.No.60/2022 regarding refund of penalties for short/non-collection of upfront margins. The court found no justifiable basis for this date selection, which created discriminatory treatment between investor groups who had penalties passed on before and after the cutoff date. This violated Article 14 of the Constitution by adversely affecting similarly situated investors based on timing outside their control. The GRC's order dated 31.03.2023 was set aside and matter remanded for de novo hearing without being bound by the 11.10.2021 date restriction. The TM must refund penalties if other qualifying conditions are met, regardless of when the penalty was originally passed on to investors.
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Service Tax

• Service Tax Demands of Rs.1.83 Crores Set Aside: CENVAT Credit Reversal and Classification Disputes Under Section 73(1)

  Case-Laws - AT : CESTAT allowed appeal against multiple service tax demands totaling Rs.1.83 crores. Primary demands included non-reversal of CENVAT credit on exempted services (Rs.1.00 crores), business support services (Rs.42.94 lakhs), and healthcare services. Tribunal found appellant had reversed CENVAT credit with interest, services were incorrectly classified under business support/auxiliary categories, and healthcare services were exempt being inpatient treatments. Revenue failed to prove suppression or willful misstatement warranting extended period under Section 73(1). Demands were either legally unsustainable or time-barred. Tribunal noted appellant's bona fides in paying service tax with interest wherever applicable, attributing non-compliance to interpretational difficulties rather than deliberate evasion.
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• Reimbursed Expenses to Customs House Agents Not Part of Service Tax Value Under Rule 5(1) of Valuation Rules

  Case-Laws - AT : CESTAT determined reimbursed expenses received by a Customs House Agent (CHA) from clients are not includible in the taxable value for service tax assessment. Following SC's ruling in UOI v Intercontinental Consultants case, the tribunal held that Rule 5(1) of Service Tax Valuation Rules 2006 was ultra vires to Sections 66 and 67 of the Act. The expenses reimbursed to CHA, separate from the service fees on which service tax was already paid, cannot form part of the assessable value. The tribunal set aside the original order that had included such reimbursements in the taxable value, allowing the appellant's appeal and confirming that reimbursed expenses fall outside the scope of service tax valuation.
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Case Laws:

• GST

• 2025 (2) TMI 470
  Violation of principles of SCN - incomplete SCN - impugned orders are challenged by the petitioner primarily on the ground that the impugned SCN issued by the respondent No. 3 only quotes Rule 21(b) of CGST Rules, 2017, and does not provide any material particulars of the violations so as to enable the petitioner to respond - HELD THAT:- The entire proceedings taken pursuant to the impugned show cause notice are not sustainable. Once the show cause notice has been issued to the dealer soliciting his response to the violations detected, it is incumbent upon the authorities to indicate the details or material particulars of such violations. Mere mention of the provision of law which as per the Assessing Authority stands violated, is not enough. Once the petitioner responded to the show cause notice and brought it to the notice of the Assessing Authority that he had not committed any violations and had made all invoices through bank transactions, the least that was required to be done by the Assessing Authority was to consider and dispose of that explanation by giving reasons. It was up to the Assessing Authority to accept or reject the explanation, however, for not accepting the explanation, it was incumbent upon the respondent No. 3 to give reasons though brief. In the instant case, this too has not happened. The Assessing Authority has by a single line cancelled the registration by merely saying that it has examined the reply to the show cause notice without even showing further whether on examination the Authority has found the reply satisfactory or not. Such cryptic order cannot take away the registration of the petitioner. Conclusion - The Assessing Authority has by a single line cancelled the registration, without even showing further whether on examination the Authority has found the reply satisfactory or not. Such cryptic order cannot take away the registration of the petitioner. Petition allowed.

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• 2025 (2) TMI 469
  Challenge to order of provisional attachment of property un/s 83 of the CGST Act, 2017 on the premise that it suffers from manifest arbitrariness and in excess of the respondent s jurisdiction u/s 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- From a reading of the impugned order under Section 83 of the Act, this court is of the view that the impugned proceeding under Section 83 of the Act, does not disclose any tangible material which led to the formation of opinon that the provisional attachment is necessary for the purpose of protecting the interest of the revenue. The impugned order merely states that proceedings are initiated under Section 67 of the Act to determine the libaility of the petitioner. The only information it refers to is with reference to the account held by the petitioner with the said Bank. The order then proceeds to state that provisional attachment is necessary for the purpose of protecting the interest of the revenue, i.e., a mere reproduction of Section 83 of the Act. It appears that the respondent was under the misconception that inititiation of proceedings under Chapter XII,XIV and XV of the Act, by itself would enable or rather warrant exercise of power under Section 83 of the Act. The impugned proceeding does not show application of mind by the respondent to the existence or otherwise, of the existence of the above jurisdictional elements/aspects, thereby vitiating the impugned proceeding. Section 83 of the Act is designed to provide for dealing with situations where it could brook no delay and immediacy of action is necessary to protect the interest of the revenue. In view of the above legislative intent and object, Section 83 of the Act, does not provide for pre-decisional hearing which is normally in compliance with natural justice but instead only provides for a post decisional hearing. It may be relevant to clarify that it is now judicially acknowledged that the necessity for speed may call for immediate action and the need for promptitude may exclude the duty of giving a pre-decisional hearing to the person affected. However it does not dispense with disclosing reasons which led to the formation of opinon that the provisional attachment is necessary for the purpose of protecting the interest of the revenue. Having come to a conclusion that giving of reason is essential while making provisional attachment under Section 83 of the Act, the submission of the respondent, of deficiency either in Form DRC 22 or the portal for not supplying reason in the proceeding provisionally attaching the property under Section 83 of the Act cannot be a justification. I say so, for the cardinal principle of giving reason as condition for decision-making cannot be martyred for the cause of immediacy nor inadequacy of provision in the form / portal to enabling disclosure of reasons. In any view, if the contention of the respondent were to be accepted, nevertheless, nothing prevented the respondent from serving the notice containing reasons by other modes provided under Section 169 of the Act, such as tendering, sending by post etc. Thus the impugned proceedings stands vitiated for not furnishing reasons which led to the formation of opinion that the provisonal attachment is necessary in the interest of protecting the interest of the revenue. Conclusion - i) The impugned order does not disclose any material muchless tangible material which led to the formation of opinion that provisional attachment in exercise of power under Section 83 of the Act is necessary to protect the interest of the revenue. ii) The impugned proceedings does not disclose any reason warranting exercise of power under Section 83 of the Act. iii) The impugned proceedings does not disclose that the respondent had after applying its mind to the material arrived at a conclusion that it is necessary to exercise the power under Section 83 to protect the interest of the revenue and that any other measure less rigorous would not be adequate. The impugned order is set aside. The writ petition stands disposed of.

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• 2025 (2) TMI 468
  Seeking grant of Regular bail - no assessment of alleged embezzlement of GST committed by the petitioner - HELD THAT:- As per the principle of the criminal jurisprudence, no one should be considered guilty, till the guilt is proved beyond reasonable doubt and the conclusion of trial is likely to take considerable time and therefore, detaining the petitioner behind the bars for an indefinite period would solve no purpose. Reliance can be placed upon the judgment of the Apex Court rendered in Dataram versus State of Uttar Pradesh and another [ 2018 (2) TMI 410 - SUPREME COURT ] wherein it has been held that the grant of bail is a general rule and putting persons in jail or in prison or in correction home is an exception. This Court is conscious of the fundamental principle of law that right to speedy trial is a part of reasonable, fair and just procedure enshrined under Article 21 of the Constitution of India. Conclusion - The petitioner is directed to be released on regular bail on his furnishing bail and surety bonds to the satisfaction of the trial Court/Duty Magistrate, concerned. Petition allowed.

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• 2025 (2) TMI 467
  Maintainability of petition - availability of alternative remedy - concessional rate of tax at 12% under N/N. 11/2017-Central Tax (Rate) - denial of opportunity of hearing as mandated by Section 75 of the Act 2017 - violation of principles of natural justice - HELD THAT:- It is well settled law that mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction of the High Court under Article 226 of the Constitution of India has not pursued, would not oust the jurisdiction of the High Court and render a writ petition as not maintainable. Where the controversy is a purely legal one and it does not involve disputed questions of fact but only questions of law, petition cannot be throw/dismissed only on the ground of alternative remedy. However, the averments in the present petition itself depicts that two notices were received by the petitioner and the reason for not responding to such notices is not sufficient, it is mentioned that due to lack of awareness and technical knowledge, the petitioner could not respondent to the said notice . Therefore, it cannot be said that substantial compliance of natural justice has not been made. Moreover, there is efficacious alternative remedy in favour of the petitioner of filing an appeal under Section 107 of the Act 2017. Conclusion - i) Mere availability of an alternative remedy does not render a writ petition not maintainable if the controversy involves purely legal questions. ii) This Court is of the view that the petitioner has not been able to make out a case for interference by this Court under Article 226 of the Constitution of India. Petition dismissed.

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• 2025 (2) TMI 466
  Seeking quashing of Demand Order and SCN issued consequent to it by the concerned opposite party u/s 73 of the Uttar Pradesh State Goods and Service Tax Act, 2017 - contention of the petitioner is that the notices are time bound - HELD THAT:- The due date for filing annual return in the case of financial year 2017- 18 was 31.12.2018, however, this due date was extended by the Central Board of Direct Taxes and Customs vide notification dated 03.02.2018, to 05.02.2020 and this notification was adopted by the State of U.P. vide notification dated 05.02.2020. Based on this notification, the period of three years mentioned in Sub Section 10 of Section 73 would end on 05.02.2023 meaning thereby, an order under Sub Section 9 of Section 73 for the financial year 2017-18 could have been passed by 05.02.2023 but not after it. Considering the fact that in this case the Assessment Order was passed on 02.12.2023, which could not have been passed as it was barred by the said provision, the writ petition is allowed and the impugned orders dated 02.12.2023 and 29.09.2023 passed by the Assistant Commissioner, Lucknow Sector-20, Lucknow quashed.

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• 2025 (2) TMI 465
  Violation of principles of natural justice - no proper and prior Show Cause Notice prescribed under sub-section [1] of Section 73 of the Assam Goods and Services Tax Act, 2017 - petitioner was only served with a Summary of Show Cause Notice in Form GST DRC-01, which is also not in conformity with Section 73 read with Rule 142 [1] [a] of the Assam Goods and Services Tax Act, 2017 - HELD THAT:- From the provisions of Section 73, it emerges that the Show Cause Notice is required to be issued by the proper officer, the statement under Section 73[3] is to be issued by the proper officer as well as the Order under Section 73 [9] is required to be issued by the proper officer. Compliance of the provisions contained in sub-section [1] to sub-section [8] and sub-section [10] to sub-section [11] of Section 73 and sub-rule [1] of Rule 142 are conditions precedent to term an Order passed under sub-section [9] of Section 73 as a valid one. Having regard to the fact that a proper and prior Show Cause Notice under sub-section [1] of Section 73 of the AGST Act, 2017 was not issued along with the Summary of Show Cause Notice in Form GST DRC-01 [Annexure-B to the writ petition] and the Attachment to Determination of Tax [Annexure-B to the writ petition], and in terms of the observations made in the common Judgment and Order dated 26.09.2024 [supra], the impugned Order dated 30.12.2023 [Annexure-C to the writ petition] is found not sustainable in law and the same deserves to be set aside and quashed. Petition disposed off.

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• 2025 (2) TMI 464
  Reversal of ITC credit along with penalty and interest - HELD THAT:- Considering the fact that the legal issue involved in this Writ Petition has already been dealt with by this Court in a batch of Writ Petitions, viz., in SRI GANAPATHI PANDI INDUSTRIES [ 2024 (10) TMI 1631 - MADRAS HIGH COURT] , this Court is inclined to dispose of the present Writ Petition on the same lines. The petitioner was entitled to claim ITC for the specified financial years under the amended provisions of Section 16. Petition allowed.

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• 2025 (2) TMI 463
  Cancellation of GST registration with retrospective effect from 13 February 2024 - SCN embodied no intent or disclosure of the respondents contemplating cancellation from a retrospective date - principles of natural justice - HELD THAT:- Absence of reasons in the original SCN in support of a proposed retrospective cancellation as well as a failure to place the petitioner on prior notice of such an intent clearly invalidates the impugned action. The writ petition is entitled to succeed on this short ground alone - the writ petition is allowed by modifying the impugned order and providing that the cancellation of the petitioner s GST registration shall come into effect from the date of the SCN i.e. 07 November 2024.

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• 2025 (2) TMI 462
  Challenge to assessment order - petitioner raised a specific ground that the petitioner was not served with any notice seeking explanation with regard to the alleged defects - principles of natural justice - HELD THAT:- Reliance placed upon the judgment passed by this Court in a batch of writ petitions in MR. SAHULHAMEED VERSUS THE COMMERCIAL TAX OFFICER, TUTICORIN-II, THIRUNELVELI, TAMILNADU [ 2025 (1) TMI 1021 - MADRAS HIGH COURT] where it was held that Section 169 mandates a notice in person or by registered post or to the registered e-mail ID alternatively and on a failure or impracticability of adopting any of the aforesaid modes, then the State can, in addition, make a publication of such notices/ summons/ orders in the portal/ newspaper through the concerned officials. The aforesaid judgment of this Court is squarely applicable to the case on hand. In view of the same, the impugned assessment order passed by the respondent dated 26.04.2024 for the assessment year 2018-19 cannot be sustained and is liable to be quashed. Accordingly, the impugned assessment order passed by the respondent dated 26.04.2024 for the assessment year 2018-19 is hereby quashed. It is made clear that the impugned assessment order passed by the respondent dated 26.04.2024 shall be treated as show cause notice. Petition allowed.

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• 2025 (2) TMI 461
  Challenge to impugned order on the ground of principles of natural justice - Difference in ITC claim - mismatches between different forms - petitioner is ready and willing to pay 10% of the disputed tax and seeks one final opportunity before the adjudicating authority to put forth their objections - HELD THAT:- The petitioner shall deposit 10% 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 and the consequential demand order dated 24.08.2024 are set aside - Petition allowed.

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• 2025 (2) TMI 460
  Applicability of an exemption under the GST framework for services related to the leasing of land for a commercial office complex - service of granting a long-term lease of land by Shyama Prasad Mukherjee Port, Kolkata (SMPK) to Anmol Industries - exemption under entry 41 of N/N. 12/2017-Central Tax (Rate) - whether the leased plot for setting up of a commercial office complex can be said to have been used for industrial or financial activity? HELD THAT:- It is evident from the definition of setting up of a commercial office complex that land is required to be used for construction of office complex which could be used for own corporate use and excess vacant place could be rented out to other corporate entities conference rooms, guest houses, retail outlets etc. Thus, office complex built on the land leased out would be used for commercial purpose by way of sub-leasing/renting of the available space - Industrial buildings are specifically excluded from the purview of the Tender. When Industrial buildings itself are not allowed, no stretch of imagination can conclude that industrial activity is allowed under the instant tender. Thus setting up of commercial office complex has a specific purpose and the same cannot be equated to industrial activity. Whether the leased property is used for financial activity ? - HELD THAT:- The term financial activity is a specific one and cannot be equated with mere maintenance of accounts and records by a company or a business concern. The appellant is unable to satisfy the pivotal points related to the afore-stated second condition, i.e. whether the leased plot is being used for industrial or financial activity in an industrial or financial business area to qualify for the benefit of exemption as specified in entry number 41 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. The appellant is unable to satisfy the afore-stated third condition, i.e. whether the service provider is a state Government Industrial Development Corporation or Undertaking or any other entity having 20 per cent. or more ownership of Central Government, State Government, Union territory (either directly or through an entity wholly controlled by the Central Government, State Government, Union territory) also to qualify for the benefit of exemption as specified in entry number 41 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Conclusion - Services by way of grant of long term lease of land by SMPK to the applicant for the purpose of setting up commercial office complex as involved in the instant case is found not to be covered under entry 41 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and therefore cannot be treated as an exempt supply.

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• Income Tax

• 2025 (2) TMI 459
  Proceedings for an offence u/s 276-B - non-payment/belated remittance of the TDS - Failure to pay tax to the credit of Central Government - interpretation given to term reasonable cause - As decided by HC[ 2024 (6) TMI 1070 - ANDHRA PRADESH HIGH COURT] reason provided by the Petitioner for the delay in remitting the amount to the Central Government is sufficient to constitute reasonable cause in view of Section 278AA of the I.T. Act and hence criminal prosecution against the Petitioners is not warranted. HELD THAT:- We are not inclined to interfere in exercise of jurisdiction under Article 136 of the Constitution of India; hence, the special leave petition is dismissed. Pending application(s), if any, shall stand disposed of.

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• 2025 (2) TMI 458
  Scrutiny by the High Court in an appeal u/s 260A for Determination of the arm s length price made by the Tribunal - whether in every case where the Tribunal determines the arm s length price, the same shall attain finality and the High Court is precluded from considering the determination of the arm s length price determined by the Tribunal, in exercise of powers u/s 260A? This application has been filed seeking recall of this Court s order [ 2023 (4) TMI 859 - SUPREME COURT] on the ground that it had been tagged inadvertently. HELD THAT:- Though the order pertains to a different issue, even the issue raised in Special Leave Petition is covered by the decision of this Court in Ahmedabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT] Miscellaneous application stands dismissed.

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• 2025 (2) TMI 457
  Validity of order passed u/s 154 - violation of principles of natural justice - HELD THAT:- As gone through the order which has been passed by the Joint Commissioner of Income Tax. The procedure said to be adopted by the respondents, is not known to jurisprudence of any nature. When already application under Section 154 of the Act has been decided on 30.12.2024, without recalling the said order, a fresh order on 06.02.2025 could not have been passed. Court had only noted the contention in its order dated 22.01.2025 pertaining to the order being laconic and there was no direction to pass a fresh order and the indications made that as the order is being passed on the directions of the Court, no opportunity of hearing was required is, to say the least, most unwarranted and factually incorrect. Neither there was any direction nor the requirement of providing opportunity before passing a fresh order stood obviated only on account of filing of the writ petition before this Court. The challenge laid in the writ petition regarding the order passed on 30.12.2024 being laconic, stands admitted and, therefore, the said order cannot be sustained and is accordingly quashed. So far as the order dated 06.02.2025 is concerned, the same having been passed without recalling the earlier order and in violation of principles of natural justice, also cannot be sustained. Consequently, the order passed on 06.02.2025 is also quashed. Petitioner shall appear before the authority on 19.02.2025 and it would be required of the authority to provide opportunity of hearing to the petitioner and thereafter pass a fresh order on application under Section 154 of the Act in accordance with law.

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• 2025 (2) TMI 456
  Existence of dependent PE in India/fixed place PE in India - HELD THAT:- All the substantial questions of law raised in this appeal is no more res integra and has been decided against the appellant/revenue by the judgement passed in Adobe Systems Software Ireland Ltd [ 2023 (10) TMI 699 - ITAT DELHI] and batch matters. The parties in the aforesaid batch matters and the present appeals are the same, except that, in those appeals, the AYs were for the years from 2013 till 2017, whereas in the present appeal, the AY pertains to 2021-2022. Predicated thereon, he candidly submits that no substantial question of law is made out in the present appeal.

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• 2025 (2) TMI 455
  Existence of dependent PE in India/fixed place PE in India - HELD THAT:- Substantial questions of law raised in this appeal are no more res integra and has been decided against the appellant/revenue by the judgements passed in Adobe Systems Software Ireland Ltd.[ 2025 (1) TMI 1412 - DELHI HIGH COURT] - The parties in the aforesaid batch matters and the present appeals are the same, except that, in those appeals, the AYs were for the years from 2013 till 2017, whereas in the present appeal, the AY pertains to 2020-2021. No substantial question of law is made out in the present appeal.

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• 2025 (2) TMI 454
  Bogus purchases - purchase as well as the sale of shares was a colorable device adopted by the Assessee in order to avoid tax - HELD THAT:- The three authorities have considered the submissions and have arrived at the conclusion of the transfer being colourable device to avoid tax. This Court cannot reconsider the said findings of facts, which are based upon the records filed before the authorities. In light of the concurrent findings of fact by all the three authorities, in our view, whether the transaction is a colourable device to avoid tax does not raise any substantial question of law but is purely a finding of fact which has been arrived at concurrently by the three authorities. The evidence on record backs this crucial finding. Adequacy of evidence is usually not examined in such appeals dealing with substantial questions of law. In any case, this is also not a matter where the evidence could be said to be inadequate. Belated contention that even without the colourable device the assessee could have advanced a loan and claimed deductions is purely hypothetical. The effect of such a course cannot be envisioned. Such an issue does not arise. In any case, findings of fact that are backed by the material on record cannot be interfered based on such a contention. Appeal dismiised.

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• 2025 (2) TMI 453
  Withdrawal of pending Appeals below the monetary limits prescribed - As submitted though the monetary limits in these Appeals were less than Rs. 2 crores, the revenue was not obliged to withdraw them or refrain from pursuing these appeals - HELD THAT:- When it comes to withdrawal of pending Appeals below the monetary limits prescribed, the circulars were specifically made applicable to pending Appeals. When it comes to exceptions, the circulars provided that the decision could be taken by the revenue to institute Appeals below the monetary limits prescribed, where the Appeals were covered by the exceptions set out in paragraph 3.1 of the circular dated 15 March 2024. Paragraph 10 of the circular dated 15 March 2024 states that this circular shall come into force from the date of its issue. This circular will apply to SLPs and appeals filed henceforth before the Supreme Court, High Courts, and Tribunals. On the holistic reading of the two circulars, Mr. Pardiwalla s contention will have to be upheld. As in the case of V. M. Salgaonkar and Brothers [ 2024 (12) TMI 717 - BOMBAY HIGH COURT] has expressly upheld such contention by expressly rejecting the argument identical to that which is advanced today before us. Even in V. M. Salgaonkar and Brothers [ 2024 (12) TMI 717 - BOMBAY HIGH COURT] revenue had argued that the circulars must be read holistically and there was no scope for reading or construing one part retrospectively and the other prospectively. Thus, based on the above two CBDT circulars and the decision of the Co-ordinate Bench in V. M. Salgaonkar and Brothers (supra), we dispose of these Appeals since Mr. Chhotaray maintains that he has no instructions to withdraw the same. This was the course of action adopted by the Coordinate Bench in V. M. Salgaonkar and Brothers (supra) and by the Rajasthan High Court in the case of Satish Kumar Agarwal (supra) [ 2024 (10) TMI 431 - RAJASTHAN HIGH COURT] All these appeals are thus disposed of.

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• 2025 (2) TMI 452
  Jurisdiction of Delhi court to entertain the present appeal - Revision u/s 263 against Firms dissolved - HELD THAT:- In Seth Banarsi Dass Gupta [ 1978 (3) TMI 100 - DELHI HIGH COURT] this court held that the High Court within whose jurisdiction the AO has passed the assessment order would have the jurisdiction to entertain the appeal u/s 260A of the Act. In M/s ABC Papers Ltd. [ 2022 (8) TMI 863 - SUPREME COURT] the Supreme Court considered the question as to the jurisdiction of the court in cases in which the jurisdiction of the AO had been transferred during the pendency of the proceedings pursuant to an order passed under Section 127. This court does not have the jurisdiction to entertain the appeal as it emanates from the assessment order issued by the AO in Amritsar. In the present case as original assessment order was passed by the AO in Amritsar, therefore, this court would not have the territorial jurisdiction to entertain the present appeal. Once it is found that this court does not have the jurisdiction to entertain the present appeal, it would not be apposite to examine any other question relating to the merits of the dispute including whether the learned ITAT had jurisdiction to entertain the appeal preferred by CFIPL.

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• 2025 (2) TMI 451
  Direct Tax Vivad Se Vishwas Scheme - constitutional validity of Chapter IV of The Finance (No.2) Act, 2024 Direct Tax Vivad Se Vishwas Scheme, 2024 - petitioner is particularly aggrieved by Section 89(1)(a) of the said Act inasmuch as it has confined the meaning of the appellant to a person in whose case an appeal or a writ petition or a special leave petition has been filed by him or the Income Tax Authorities. HELD THAT:- Benefit of the Vivad Se Vishwas Scheme is available even to those assessees who are aggrieved by virtue of an order passed by the Income-Tax Authorities and intend to challenge the same by way of appeal and in whose cases, the time for filing appeal has not expired.

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• 2025 (2) TMI 450
  Validity of assessment order passed u/s 147 r.w.s.144B - petition challenged an order passed u/s 154 r.w.s.143(3) - HELD THAT:- Petitioner has to file an appeal against the Order passed u/s 147 r.w.s. 144B on 31.03.2022 or the Order passed u/s 154 r.w.s. 143(3) of the Income Tax Act, 1961 on 29.03.2022. Both have similar impact on the petitioner. Petitioner can therefore be asked to workout the appellate remedy against the Impugned Order dated 29.03.2022 which rectifies the earlier Order dated 29.12.2017 which was also sought to be revised pursuant to the Notice dated 31.03.2021 issued u/s 148 of the Income Tax Act, 1961. Both the Writ Petitions are disposed with liberty to the petitioner to challenge the Impugned Assessment Order dated 31.03.2022 and the Rectification Order dated 29.03.2022 before the Commissioner of Income Tax (Appeals) within a period of 30 days from the date of receipt of a copy of this order.

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• 2025 (2) TMI 449
  Validity of reopening of assessment - error in punching wrongly of 63 times is highly unusual and unbelievable - HELD THAT:- It is undisputed fact the assessee filed his original return of income and assessed to tax after calling for various details relating to the derivative business in shares and securities, after perusing books of accounts along with details and vouchers. As per audited profit and loss account still there is business loss. Though the escaped income is recorded to be Rs. 5,89,789/- during the course of assessment, it is said to be 12,56,760/-, the same was informed to the assessee vide order sheet entry dated 02-12- 2016. However, this amount of Rs. 12,56,760/- is not likely to change net loss of Rs. 1.8 crores claimed by the assessee in its profit and loss account. Further, there is no failure on the part of the assessee in disclosing the relevant materials before the AO. Thus, we have no hesitation in holding that the reopening of assessment itself is bad in law consequently the re-assessment proceedings is liable to be invalid in law. Decided in favour of assessee.

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• 2025 (2) TMI 448
  Reopening of assessment u/s 147 - change of opinion - bogus purchases and unexplained investments - HELD THAT:- As the reopening of the concluded assessment in the case of the assessee was, inter alia, based on the aforesaid reasons i.e. facts which were not there before the AO while framing the original assessment, therefore, we are unable to comprehend as to how the present reassessment proceedings initiated by him could be brought within the meaning of change of opinion as had been claimed by the Ld. AR. We, thus, are of the view that the claim of the assessee that his concluded assessment was reopened based on a mere change of opinion cannot be accepted and is accordingly, rejected. Estimation of income - bogus purchases - assessee had claimed to have purchased paddy/broken rice from outside state and from local parties - quantification of the profit element which the assessee would have made by procuring the goods not from the six bogus concerns from whom purchase bills were obtained, but at a discounted value from the open/grey market - HELD THAT:-CIT(Appeals), for quantifying the profit which the assessee would have made by procuring the goods at a discounted value from the open/grey market, as against the value booked in his books of accounts based on the bogus purchase bills of the aforesaid bogus/hawala parties, had after by taking cognizance of the fact that in the business of rice millers/traders the GP rate varied between 3% to 10% adopted GP rate of 10% had after allowing credit of the GP rate of 1.53% that was already disclosed by the assessee in his audited books of accounts, thus, made a balance addition of 8.47% of the value of the bogus purchases. As such, the CIT(Appeals) had sustained the addition of Rs. 1,22,08,002/- (out of the addition of Rs. 3,70,33,063/- made by the A.O). We have thoughtfully considered the view taken by the CIT(Appeals) and find no infirmity in the same. As the CIT(Appeals) had fairly quantified the profit element which the assessee would have made by procuring the subject goods not from the aforementioned six bogus concerns, but from the open/grey market, by adopting the GP rate prevailing in the business of rice miller/traders, therefore, we find no infirmity in the view taken by him, and, thus, sustain the addition to the extent that was upheld by him. Unaccounted investment - We are of the view that as observed by the CIT(Appeals), and rightly so, the assessee would have made certain unexplained investment in his business of providing bogus billing. Ostensibly, the A.O had taken the amount of peak purchase appearing in the account of one of the aforesaid bogus concerns as a bogus outstanding liability and made an addition of the same in the hands of the assessee correctly.

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• 2025 (2) TMI 447
  Denial of deduction u/s 80P(2)(a)(i) - interest earned from Sangli District Central Co-operative Bank - HELD THAT:- Hon ble High Court of AP TS, THE VAVVERU CO-OPERATIVE RURAL BANK LTD. VERSUS THE CHIEF COMMISSIONER OF INCOME TAX, VIJAYAWADA [ 2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT ] held that Interest Income earned by investing Income derived from Business and Profession by a Co-Operative Society was eligible for deduction u/sec.80P(2)(a) of the Act. No contrary decision of the Hon ble jurisdictional High Court has been brought to our notice - As decided in Yashwant Nagari Sahakari Patsanstha Maryadit [ 2024 (6) TMI 1387 - ITAT PUNE ] held that the assessee was eligible for deduction u/sec.80P(2)(a) of the Act on the Interest earned by assessee. Decided in favour of assessee.

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• 2025 (2) TMI 446
  Deduction u/s 80C - interest on housing loan - HELD THAT:-Considering the nature of business carried on by the assessee and the turnover disclosed which is mainly received in cash and since it is also not the case of the AO that total deposits in the bank account both cash and through cheques / DD etc. far exceeds the turnover disclosed by the assessee, the addition of the entire cash deposited in the bank account appears to be on the higher side. Disallowance of sundry creditors especially when the assessee has given Ledger copy of various parties from whom land was purchased. At the same time, by not furnishing the full details as per the satisfaction of the AO the claim of the assessee that no addition is called for cannot be accepted. Since the assessee in the instant case is engaged in plotting business and full details were not given before the AO in the manner in which it should have been given as per the direction of the AO and since the assessment year involved is assessment year 2013-14 which is very old and litigation must come to an end, therefore, considering we are of the considered opinion that the estimation of income @ 10% of the total turnover of Rs. 2,23,77,000/- as mentioned by the Assessing Officer in the assessment order will meet the ends of justice. Since the assessee has filed a copy of the interest certificate from the bank showing the repayment of principal amount of Rs. 72,643/- and interest amount of Rs. 3,59,357/- totaling to Rs. 4,32,000/- for the period between 01.04.2012 to 31.03.2013 which was also filed before the CIT(A), we direct the AO to allow the consequential deduction as per the provisions of section 80-C of the Act and interest on self occupied house property. Appeal filed by the assessee is partly allowed.

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• 2025 (2) TMI 445
  Denying the claim of deduction u/s. 80P - assessee is a co-operative society registered under the Kerala Co-operative Societies Act, formed with the object of providing financial accommodation to its members for agricultural purposes - HELD THAT:- The issue is now settled by the judgment of Mavilayi Service Cooperative Bank Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] Respectfully following the judgment of the Hon ble Supreme Court, we direct the AO to allow the claim of the assessee. Appeal filed by the assessee is allowed.

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• 2025 (2) TMI 444
  Reopening of assessment u/s 147 - whether AO has not obtained the approval of the specified authority u/s. 151? - scope of section 151(ii) of the Act, under new regime - HELD THAT:- According to the notice u/s. 148 of the Act for A.Y. 2017-18, which is available on record, was issued on 29.07.2022 after obtaining the prior approval accorded by the of PCIT-27, Mumbai on 27.07.2022 of the said notice vide reference no. pr.CIT-27/148A(d) Approval/2022-23. Three years have elapsed from the end of the relevant assessment year 2017-18 on 31.03.2021. According to section 151(ii) of the Act, under new regime, the approval should have been obtained either from the Principal Chief Commissioner of Income or Principal Director General or Chief Commissioner or Director General as specified authority which is not so obtained in the case in hand. We accordingly hold that the notice u/s. 148 of the Act is invalid hence the consequent assessment u/s. 147 of the Act is quashed -Assessee s appeal is allowed.

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• 2025 (2) TMI 443
  Applicability of the provisions of section 50 - Treating gains on sale of trademarks as Short Term Capital Gains instead of Long Term Capital Gains - HELD THAT:- As evident that prior to the amendment by the Finance (No. 2) Act, 1998, neither the depreciation nor the block of assets included within its ambit the intangible assets. Further, as noted in the foregoing paragraph, such intangible assets, for the purpose of depreciation, are also required to be acquired on or after 01/04/1998. Undisputedly, in the present case, both trademarks, i.e. Coldarin and Raricap , were acquired by the assessee vide purchaser agreements prior to 01/04/1998. Further, in the year of acquisition of the aforesaid trademarks, i.e. the financial year 1992-93 and 1997-98, there was no provision in the Act which mandated the inclusion of the intangible assets in the block of assets. Consequently, no question arises for allowance of depreciation on the block of assets, which includes intangible assets in the present case. Therefore, the other two conditions for the applicability of the provisions of section 50 of the Act are not satisfied in the present case. Section 50 of the Act has no applicability to the facts of the present case. Thus, we find merits in the submissions of the assessee in treating the capital gains as long term capital gains and offering the same to tax accordingly. The findings of the lower authorities in taxing the capital gains accrued to the assessee on the transfer of trademarks, i.e. Coldarin and Raricap , as short term capital gains are quashed. As a result, grounds raised in assessee s appeal are allowed.

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• 2025 (2) TMI 442
  Unexplained credit u/s. 68 - amount credited to capital a/c as bogus - whether or not the assessee s claim that the addition in his capital a/c (during the subject year) was made by transfers/adjustments through passing of entries in the relevant books of account of the proprietary concerns/divisions of the assessee and not through adjustments made in the Schedule/financial statement/on the face of balance sheet would require verification? - HELD THAT:- We are of a firm conviction that considering the fact that the explanation of the assessee as regards the source of the addition of Rs. 2 crores in his capital a/c during the subject year in the backdrop of, viz. the documents/material placed on our record; the remand report of the A.O; the rejoinder filed by the assessee, had rendered the adjudication of the said issue as contentious, therefore, the CIT(Appeals) ought to have acceded to the request of the assessee for allowing an opportunity to him to explain the same, based on the evidences, by personally putting up an appearance before the A.O. We, thus, in terms of our aforesaid observations restore the matter to the file of the A.O with a direction to re-adjudicate the same. A.O shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to substantiate his claim on the basis of fresh documentary evidence, if any. Thus, the Ground of appeal No.1 raised by the assessee is allowed for statistical purposes in terms of our aforesaid observations. Addition u/s. 2(22)(e) on deemed dividend - HELD THAT:- As the company viz. M/s. Atmastco Pvt. Ltd had advanced a loan aggregating not during the year under consideration but in the preceding year, therefore, in absence of any payment by the company during the subject year, there was no justification for the A.O to have held the amount so received by the assessee in the preceding year as deemed dividend in his hand during the subject year. Accordingly, the addition made by the A.O u/s. 2(22)(e) of the Act made/sustained by the lower authorities is vacated. Disallowance u/s. 14A r.w.Rule 8D - assessee had though during the subject year made investments in equity share capital of various companies and agricultural assets, but had not offered on a suo-motto basis any disallowance of any expenditure incurred for earning of exempt income - HELD THAT:- We are principally in agreement with the Ld. AR that in absence of any exempt income having been earned by the assessee during the subject year, the A.O as per the pre-amended Section 14A of the Act, as was applicable to the subject year, could not have worked out any disallowance in his hands. Our aforesaid view is fortified by the judgment of Chettinad Logistics Pvt. Ltd. [ 2018 (7) TMI 567 - SC ORDER ] and also Cheminvest Limited [ 2015 (9) TMI 238 - DELHI HIGH COURT ] When the assessee had not received any exempt dividend income during the year under consideration, therefore, no disallowance u/s. 14A of the Act was warranted in his case - aforesaid claim that the assessee was not in receipt of any exempt income during the subject year, cannot be summarily accepted on the very face of it, and would require verification, therefore, the matter in all fairness is restored to the file of the A.O for the limited purpose to verify the factual position. Additional Ground of appeal raised by the assessee is allowed for statistical purposes. Addition towards deemed sales tax disclosed by the assessee under the head loan advances (asset) in his balance sheet for the subject year - HELD THAT:- Addition requires to be looked into in the backdrop of the documents that have been placed on our record, viz. (i) copy of sales tax payable A/c. for F.Y.2011-12 and 2012-13; (ii) copy of bank statement evidencing making of the payment; and (iii) copy of the bank receipts evidencing payment by the assessee on 14.04.2012. Accordingly, we herein restore the matter to the file of the A.O for re-adjudication. Unexplained cash credit u/s. 68 - no explanation as regards the nature and source of the credits in his books of account (compiled in the form of statement of affairs that was filed before the A.O) HELD THAT:- As in the absence of any explanation of the assessee as regards the nature and source of the subject credits, the same in our view had rightly been held by the A.O as unexplained cash credit u/s. 68 of the Act.

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• 2025 (2) TMI 441
  Addition made on trading results - estimation of sales and gross profit - Tribunal in own case for Assessment Year 2000-01 to 2004-05 restricted the GP rate at 15% - HELD THAT:- The identical issue has been considered by the Co-ordinate Bench of the Tribunal in Assessee s own case for Assessment Year 2000- 01 to 2004-05 in Assessee s own case [ 2014 (9) TMI 1070 - ITAT DELHI] thus, restrict the GP rate at 15% for the year under consideration and direct the A.O. to compute the trading addition. Penalty u/s 271(1)(c) - defective notice - non striking off the irrelevant portion - HELD THAT:- As could be seen from case of Mr. Mohd. Farhan A. Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] while dealing with the issue of non-strike off of the irrelevant part in the notice issued u/s. 271(1)(c) of the Act, held that assessee must be informed of the grounds of the penalty proceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness. As the notice u/s. 274 r.w.s. 271(1)(c) of the Act was issued without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued, the penalty order passed u/s 271(1)(c) of the Act by the Assessing Officer and the order of the CIT(A) in confirming the penalty order are erroneous. Appeal filed by the Assessee is allowed.

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• 2025 (2) TMI 440
  Assessment order passed in respect of original return of income - AO failed to consider the revised return filed by the assessee - HELD THAT:- It is not a case where the assessee had not filed original return of income. However, the case is that pursuant to filing of revised return of income, the AO was supposed to take cognizance of revised return of income and the assessment order passed by the AO in respect of original return of income neither can be treated as an order passed u/s 144 of the Act nor the same could be held to be a valid order as the same has not been passed in respect of valid/revised return of income filed by the assessee. Therefore, this legal issue is decided in favour of the assessee and against the revenue. The assessment order passed by the Assessing Officer is hereby quashed. Deemed dividend u/s 2(22)(e) - Since the AO has thoroughly examined the nature of the transactions done by the assessee which have been done regularly and consistently and has noted that the same being in the ordinary course of business and out of commercial expediency and the account between the assessee and its subsidiary was in the nature of current account and further since the issue is squarely covered by the decision of the various High Courts/Tribunal decisions, therefore, in view of the above discussion, the addition made/confirmed by the lower authorities u/s 2(22)(e) of the Act is not sustainable in this case and the same is accordingly ordered to be deleted. Deduction u/s 80IA - assessee company claimed deduction for its steam generation unit from the boiler plant U-I located at Hapur - HELD THAT:- Counsel has duly demonstrated that the deduction u/s 80IA was duly claimed in the revised return. As observed above, both the lower authorities failed to take note of the revised return filed by the assessee. Therefore, the denial of deduction on this ground was not justified. So far as the computation of deduction is concerned, the issue is squarely covered by various decisions of the higher courts including the decision of the Hon ble Supreme Court in the case of CIT vs. M/s Jindal Steel Power Ltd [ 2023 (12) TMI 417 - SUPREME COURT] Quantum of deduction admissible - AO will verify the rates charged by the Electricity Board to other industrial undertakings as claimed above by the assessee and accordingly allow the deduction u/s 80IA of the Act to the assessee.

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• 2025 (2) TMI 439
  Addition u/s 68 - Specified Bank Notes ( SBN ) deposited during demonetization period - HELD THAT:- As from the circular issued by the CBDT, it is very clear that, while making additions towards cash deposits in demonetized currency, AO needs to analyze the business model of the assessee, its books of account and analysis of sales etc. In this case, we have gone through the analysis furnished by the assessee in respect of total sales, cash sales realization from debtors and cash deposits during financial year 2015-16 2016-17, there is no significant change in cash deposits during demonetization period. When there is no significant change in cash deposits during demonetization period, then merely for the reason that the assessee has accepted specified bank notes in violation of circulation/notification issued by Government of India and RBI, the source explained for cash deposits cannot be countenanced. From the financials filed by the assessee that assessee had enough stock of the fireworks to sale same to the customers on credit during the Diwali Festival i.e. 30.10.2016. Thus, we find that the assessee had sufficient stock as on 30.10.2016 (Diwali period) for sale of the goods which generated amount of Rs. 53,34,899/- (out of which, AO accepted Rs. 1,08,763/-) to be deposited during the demonetization period and there are no defects in the stock registers. Every purchase and sale matches with inflow and outflow of the stock and as assessee has placed on record that the purchased goods have already inflicted with VAT/Sales Tax and the AO has not found any infirmity in the books of accounts of the assessee. Appeal filed by the assessee is allowed.

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• 2025 (2) TMI 438
  Penalty invoking the provisions of 271AAB(1A)(b) @ 60% - additional income offered/accepted by the Appellant during the course of search/ search assessment proceedings forming part of the computation of the taxable total income in the search assessment order - HELD THAT:- No incriminating material has been unearthed during search which substantiate the fact that the assessee do not have undisclosed income which is represented by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other document or transaction found in the course of search which either have not been recorded before the date of search in the books of account or not disclosed to the Principal Chief Commissioner of Income Tax before the date of search. We concur with the submissions that penalty u/s 271AAB was discretionary and would depend on the merits of each case. Finding or unearthing of undisclosed income in the course or as a result of search conducted u/s 132 and consequent assessment of undisclosed income is a condition precedent for levy of penalty u/s 271AAB. Every offer of the assessee to pay tax on his income in the course of recording of statement u/s 132 does not amount to finding of undisclosed income . A mere offer or disclosure by an assessee to pay tax on some additional amount with a view to avoid litigation cannot amount to discovery of undisclosed income for the purposes of levy of penalty under section 271AAB of the Act. The stated penalty could be levied only in respect of the undisclosed income as defined in Explanation (c) to the said Section 271AAB. In the present case, we arrive at a conclusion that there aforesaid notings were nothing but market adjustments as pleaded by the assessee and the same would not fall within the expression undisclosed income as defined in Explanation (c) to the said Section 271AAB since the same is not represented by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other document or transaction found in the course of search which either have not been recorded before the date of search. In such a case, the levy of penalty could not be upheld. We reach a conclusion that the impugned penalty is not sustainable in law. Accordingly, we direct Ld. AO to delete the same. Decided in favour of assessee.

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• 2025 (2) TMI 437
  Revision u/s 263 - income surrendered during survey action should be treated as if the assessee is in possession of unexplained money and treatment of tax liability thereon should be under the provisions of section 69B and tax needs to be calculated as per section 115BBE of the Act, on the surrendered income - HELD THAT:- Proper enquiry was made by the AO and it is not the case where no enquiry was made. It is settled law that this power of revision can be exercised only where there is no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. The revisionary powers under section 263 allow the Principal Commissioner of Income Tax (PCIT) to revise an order if it is deemed erroneous and prejudicial to the interests of revenue. However, in this instance, the PCIT s revision order contradicts the facts and circumstances of the case duly supported by documentary evidence. Stock of goods that has been found in excess by the survey team, are the same nature and type of goods i.e. Cosmetics, which is regularly traded by the assessee in her usual course of business, and in course of survey the department has not been able to unearth any other documents or papers to arrive at any different conclusion that the assessee has any other source of income earning activity other than the business of cosmetics. Excess STOCK has not been separately identified and the loose papers and documents, diaries, impounded as per Annexure - 1 and 2 (of impounded documents) points to the fact that there has been unrecorded transactions of purchase and sales outside books of accounts pertaining to the same business of cosmetics , in which the assessee transacts, in usual course of her business, and as such the nexus or the link in between the excess stock found and the assessee business is established and whatever excess that has been found, is the excess stock, that is rolling in the same business and it has no independent identity of its own and is part and parcel of the normal business stock and what is not declared to the department is the receipt from business (and not any investment) because it cannot be co-related with any specific assets. Valuation of the stock as done by the survey team, it is seen that the assessee in course of assessment proceedings has specifically demonstrated with supporting sales invoices and calculation of the entire inventory of stock, that if the said excess stock is valued at COSTS, the difference will only be of an amount of Rs. 17 lakhs (approx), and not Rs. 50 lakhs, as it is has been made out to be . Neither the AO nor the Ld PCIT, in course of proceedings, before them, has been able to counter the said argument of the assessee, nor could they find any fault in the computation and calculation put forth by the assessee as regards the stock value, at cost, as claimed by the assessee. In course of hearing before us the DR, also did not raise any counter arguments regarding the process of valuation of the stock at cost and did not find any fault in respect of such valuation. Leading through the said calculation in respect of valuation of the stock at costs, the assessee proceeded a step further to demonstrate by way of an alternate argument, that if the stock value is taken at costs and tax is imposed as per provisions of section 115BBE, even then also the tax so arrived at will be covered by the tax actually paid by the assessee and as such there is no prejudice to Government revenue. Whether proper enquiry was made by the AO? - Source of the amount required for purchase of excess stock is well explained to the satisfaction of the AO to have come out of sale proceeds of cosmetics, and he has accepted the same after examination of the purchase and sales invoice vis a vis impounded documents and stock inventory of identical goods. As such under the circumstances it cannot be said that there has not been any enquiry on the part of the AO. In fact the AO has conducted enquiry and has applied his mind by raising queries and examining the documentary evidences produced before him and after conducting necessary enquiry, has taken a possible view in the matter, which is a legally acceptable view and as such there cannot be any basis to invoke the provisions of section 263 to revise the assessment. Neither the survey team in course of survey, nor the AO in course of assessment proceedings, has brought any adverse material on record, to prove the fact that the assessee had any income other than the business of cosmetics and the assessee has also explained the source of the income so surrendered before the survey team to have arisen out of business of cosmetics itself, and the said explanation has also been accepted by the AO after adequate enquiry and verification of documents produced before him, and he has arrived at a logical conclusion, which a prudent person, would have arrived under the circumstances. AO after careful examination of the submissions made by the assessee and after conducting detail enquiry, has taken a plausible view that the provisions of section 115BBE is not applicable in the instant case and the said assessment cannot be set aside merely on the ground of inadequacy of enquiry by the AO with respect to source of surrender of income. There is no perversity or lack of enquiry on the part of the assessing officer to render the decision erroneous under explanation 2 to section 263 of the Act 61, and the order passed by the AO, is neither erroneous nor prejudicial to the interest of revenue, and we hold that the assumption of jurisdiction u/s 263 by the Ld PCIT in the instant case is not legally justified and the consequential order passed u/s 263 of the Act 61, is hereby set aside. Appeal filed by assessee is allowed.

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• Customs

• 2025 (2) TMI 436
  Seeking setting aside of the bank attachment notice - non-service of OIO as per prescribed procedure - HELD THAT:- In view of the stand of the Department, it is directed that the directions be issued for de-freezing of these said bank accounts by 14th February, 2025. The prayer for condonation of delay shall be considered by the Appellate forum in accordance with law - Petition disposed off.

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• 2025 (2) TMI 435
  Partial exemption from customs duty for the import of Lactulose under Sr. No. 166 (A) of N/N. 50/2017 - whether imported goods are Bulk Drugs and should be classified under Sr. No. 166 (B)? - HELD THAT:- When one examines Sr. No. 166 of the 2017 Notification, it is found that the standard rate of duty is the same whether the Lactulose [imported by the Petitioner] falls within Sr. No. 166 (A) or under Sr. No. 166 (B). The only difference between the two is that if they fall within Sr. No. 166 (B), the Petitioner has to comply with the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022. If those Rules are not complied with, the Petitioner would be liable for action. At this stage, and keeping all issues open, the Lactulose imported by the Petitioner can be released by allowing them the partial exemption as contemplated under Sr. No. 166 (A) of the 2017 Notification subject to them furnishing a bond to the Customs Department in the format asked for by them. Thereafter, the Department is free to issue a Show Cause Notice, if it so chooses and take it to its logical conclusion. It is not opined whether the Lactulose imported by the Petitioner can be classified under Sr. No. 166 (A) or 166 (B) of the 2017 Notification. Conclusion - The Customs Department are directed to assess the Bills of Entry with the benefit of partial exemption under Sr. No. 166 (A) of the 2017 Notification, subject to the Petitioner furnishing a bond. Petition disposed off.

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• 2025 (2) TMI 434
  Jurisdiction of CESTAT to decide the case of the respondent when in fact the order in appeal was revisable as contemplated under Section 129DD of the Customs Act, 1962 - respondent herein being a frequent flyer, eligible passenger under the Act to carry gold or not - prohibited goods or not - the Applicant prayed that the order of the Appellate Tribunal needs to be stayed during the pendency of the appeal having regard to the questions of law framed while admitting the appeal. HELD THAT:- Considering the questions of law on which the appeal is admitted, and having regard to the issues involved in the present appeal, as an interim arrangement, the impugned order needs to be stayed and is accordingly stayed. Application allowed.

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• 2025 (2) TMI 433
  Seeking grant of bail - smuggling - admissibility of statements - non-corroborated statements can be bare basis of conviction of an accused or not? - HELD THAT:- This court is of the opinion that the confessional statement of an accused recorded under section 108 of the Act,1962, cannot blindly be accepted unless it is corroborated by any independent evidence/material as the same would not lead to conviction. The examination of confessional statement of the accused is essentially required so as to find out that the same is not taken under coercion or under extraneous influences. The trial court has also to be conscious enough while examining the correctness and voluntariness of the nature of the statement of the accused. Though, it has been held by the Hon ble Apex Court in the case of Romesh Chandra Mehta Vs State of West Bengal, reported in [ 1968 (10) TMI 50 - SUPREME COURT ], that the custom officers are not the police officers and the statement recorded under section 108 of the Act,1962, is admissible in evidence, though there seems to be no quarrel regarding the same, whereas the further issue is that can the statement of an accused recorded under section 108 of the Act,1962, blindly be accepted without any corroboration of other evidences ? Infact, the admissibility of an evidence is one aspect of the matter and the conviction can lead only on the basis of the confessional statement recorded under section 108 of the Act,1962 is the other aspect of the matter and the answer would be no. This court is of the opinion that the confessional statement of an accused recorded under section 108 of the Act,1962, cannot blindly be accepted unless it is corroborated by any independent evidence/material as the same would not lead to conviction. The examination of confessional statement of the accused is essentially required so as to find out that the same is not taken under coercion or under extraneous influences. The trial court has also to be conscious enough while examining the correctness and voluntariness of the nature of the statement of the accused. It has also been noticed that identically situated co-accused, namely, Avinash Singh has already been enlarged on bail. Further, the applicant has a case criminal history which has been explained in paragraph 5 of the bail application and he is languishing in jail since 07-08-2024 coupled with the fact that he has undertaken that if he is granted bail, he will not misuse the liberty of the same and would cooperate in the trial proceedings. Conclusion - Considering the submissions of learned counsel of both sides, nature of accusation and severity of punishment in case of conviction, nature of supporting evidence, prima facie satisfaction of the Court in support of the charge, reformative theory of punishment and considering larger mandate of the Article 21 of the Constitution of India and, without expressing any view on the merits of the case, this is a fit case of bail. Let the applicant involved in the aforementioned crime be released on bail, on his furnishing a personal bond and two sureties each in the like amount, to the satisfaction of the court concerned, subject to fulfilment of conditions imposed. Application allowed.

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• 2025 (2) TMI 432
  Seeking grant of bail - smuggling of currency notes of U.S. Dollars - admissibility and sufficiency of the confessional statement recorded under Section 108 of the Customs Act, 1962 without corroboration - HELD THAT:- It transpires that some interception was done by the D.R.I. officials at CCS International Airport, Lucknow, from where the co-accused person, namely, Tanvir Mustafa and other said accused persons were arrested, wherein 3 kg. gold was recovered from the front shirt pocket of Tanvir Mustafa and, thereafter, on the basis of some call records, the D.R.I. officials have also raided the house of the present applicant and recovered some articles. From perusal of the Panchnama , it also reveals that no articles either of prohibited category or restricted category are recovered from the possession of the applicant or his house and, therefore, prima facie, there seems to be no strong evidence and in consonance with the conversation with other co-accused persons. Further much emphasis is drawn on the statement of the present applicant-accused recorded under section 108 of the Act,1962 and the argument is placed on behest of the D.R.I. officials that the confessional statement itself is enough to convict the applicant. Though, it has been held by the Hon ble Apex Court in the case of Romesh Chandra Mehta Vs State of West Bengal [ 1968 (10) TMI 50 - SUPREME COURT] , that the custom officers are not the police officers and the statement recorded under section 108 of the Act,1962, is admissible in evidence, though there seems to be no quarrel regarding the same, whereas the further issue is that can the statement of an accused recorded under section 108 of the Act,1962, blindly be accepted without any corroboration of other evidences ? Infact, the admissibility of an evidence is one aspect of the matter and the conviction can lead only on the basis of the confessional statement recorded under section 108 of the Act,1962 is the other aspect of the matter and the answer would be no. This court is of the opinion that the confessional statement of an accused recorded under section 108 of the Act,1962, cannot blindly be accepted unless it is corroborated by any independent evidence/material as the same would not lead to conviction. The examination of confessional statement of the accused is essentially required so as to find out that the same is not taken under coercion or under extraneous influences. The trial court has also to be conscious enough while examining the correctness and voluntariness of the nature of the statement of the accused. It has also been noticed that the applicant has no previous criminal history, which has been explained in paragraph 35 of the bail application and he is languishing in jail since 09-08- 2024 coupled with the fact that he has undertaken that if he is granted bail, he will not misuse the liberty of the same and would cooperate in the trial proceedings. Conclusion - Considering the submissions of learned counsel of both sides, nature of accusation and severity of punishment in case of conviction, nature of supporting evidence, prima facie satisfaction of the Court in support of the charge, reformative theory of punishment and considering larger mandate of the Article 21 of the Constitution of India and, without expressing any view on the merits of the case, this is a fit case of bail. Let the applicant involved in the aforementioned crime be released on bail, on his furnishing a personal bond and two sureties each in the like amount, to the satisfaction of the court concerned, subject to fulfilment of conditions imposed. Application allowed.

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• 2025 (2) TMI 431
  Time barred SCN or not - fulfilment of conditions for re-export obligation as per N/N.158/95-CUS. or not - Revenue argued that goods are initially exported under EPCG scheme and not under bond, without payment of Excise Duty - HELD THAT:- SCN was issued after prescribed period, as provided under Section 28(1)(a) of the Customs Act, 1962. There are no mis-statement or suppression of facts on the part of the appellant. Therefore, appeal is liable to be allowed - appeal allowed.

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• 2025 (2) TMI 430
  Classification of imported Multimedia Speakers and spare parts - classificable under heading no.85182200 or under heading no. 85279100? - HELD THAT:- This issue was before the Banglore Tribunal in the case of Logic India Trading Co-v-C.C [ 2016 (3) TMI 5 - CESTAT BANGALORE] . The Tribunal has held that the speakers should be classified under CTH 8518 22 00. Conclusion - The goods should be classified under heading no.85182200 as speakers, rather than under heading no.85279100 as broadcast receivers. Appeal allowed.

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• 2025 (2) TMI 429
  Valuation of imported goods - electronic calculators - rejection of delared value - redteremination of value of the consignment on per piece basis - rule 4 to 9 of CVR 2007 - market enquiry report has not been provided to the appellant - violation of princuples of natural justice - HELD THAT:- The erstwhile Rule 10A of CVR 1988 had a provision for the rejection of declared value and it came to be replaced by a more elaborate Rule 12 after the introduction of CVR 2007. However, what is of interest is the rationale for introduction of a provision for rejection of the declared value. However over a period of time the Customs Valuation (Determination of Price of Imported Goods) Rules, have come to be modified, and the 2007 version is now dealt with, the circular brings out the difficulty in rejecting a declared value even though in some cases invoices were found to be manipulated but on the face of it the transaction value (i.e. the invoice price) is projected to be true and correct or the value was found to be substantially lower than the prevailing international market price. The Issue does not appear to be localised to India alone as the circular mentions that the Rule has been added to give effect to the decision taken by the Ministers of the Countries which are signatories to GATT, 1994. The Rule thus seeks to address the mischief of manipulated values declared by some importers by not correctly disclosing the transaction value based on documents which are in their exclusive possession . In the present case, the market enquiry report has not been provided to the appellant showing the results of the survey and with a work sheet as to how the value was arrived at. This has effectively disadvantaged the appellant from giving a reply and violates the principles of natural justice. In Commissioner of Sales Tax, U.P. v. R.P. Dixit Saghidar [ 2000 (3) TMI 992 - SUPREME COURT] , it was held that when principles of natural justice are stated to have been violated it is open to the appellate authority, in appropriate cases, to set aside the order and require the Assessing Officer to decide the cases de novo. This is because when an order is held to be invalid due to a violation of principles of natural justice, there is no final decision of the case and therefore proceedings are left open and the proceedings are not terminated. This being so it is felt appropriate to remand the matter to the Original Authority to cure the defect by supplying a copy of the Market Inquiry Report and worksheet to the appellant and decide the matter afresh. Conclusion - The original authority must provide the appellant with the market enquiry report and worksheet, allowing them to respond before issuing a new decision. Matter remanded to the original authority for fresh adjudication. Appeal disposed off by way of remand.

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• 2025 (2) TMI 428
  Determination of the applicable customs duty rate on imported goods - relevant date for rate of duty - whether the duty rate should be based on the date the vessel entered Indian territorial waters or the date of entry inwards at the specific port where the goods were unloaded? - HELD THAT:- There is no doubt that the goods assume, the nature of imported goods, the moment they enter into territorial waters of India and thus become leviable to duty on such import but the machinery provision as contained in Section 15 indicates, as to how assessment is to be done and duty shall be calculated when goods are required to be subjected to duty. Reading of Section 15 along with the proviso makes it clear that in case filing of Bill of Entry precedes the date of entry inwards of the vessel, the Bill of Entry shall be deemed to have been presented on the date of such entry inwards. Entry inwards as has been correctly pointed out by the Departmental Representative is required to be as per process dictated in Section 30 and Section 31 of the Customs Act, 1962. From plain reading of Section 31, it is clear that grant of entry inwards for any vessel is a port specific documentation and is required to be done at each port by the proper officer. Expression the proper connotes proper officer as authorised specific officer at each port. The goods cannot be unloaded at any port unless such proper officer has granted entry inwards at the specific port. This Court has also examined the matter in the light of the decision cited by both sides as well as the relevant statutory provisions, the judgments cited by the appellants do not deal with situation where entry inwards are granted at two different ports at two different points of time. As is emanating from the facts of this case, this Courts finds that the submission made by the appellants, proceed on the wrongful basis that entry into territorial waters and the first entry inwards granted, at the first touched port will dictate rate of duty and shall be considered as date of entry inwards for all subsequent ports, it touches. This Courts finds that there is no statutory basis to support such an argument and rather the plain reading of the statutory provision specifically Section 31, supports the argument of the department that entry inwards at the respective port and not the first port shall determine the rate of duty applicable. This Court, therefore, finds that the impugned order is well reasoned and deserves to be maintained. Conclusion - The duty rate is determined by the date of entry inwards at the specific port of unloading. The assessment of duty at 7.5% as per the entry inwards at Pipavav Port maintained. Order of Commissioner (Appeals) is upheld and appeal of the party is rejected.

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• 2025 (2) TMI 427
  Denial of benefit of exemption from payment of Special Additional Duty [SAD] availed under Serial No. 2 of Notification dated 17.03.2012 on the goods imported under various Bills of Entry during the period 01.04.2013 to 31.03.2017 - recovery of SAD with penalty - HELD THAT:- The dispute in the present appeals relate to Notification dated 17.03.2012, as amended, which exempts the goods of the description contained in the Table when imported into India from so much of the additional duty of customs, as is in excess of the amount calculated at the standard rate specified in the corresponding entry in Column No. 4 of the Table. However, the proviso stipulates that the exemption shall apply on goods imported on or after 01.05.2012 if the importer declares the State of destination namely the State where the goods are intended to be taken immediately for the first time after importation whether for sale or distribution on stock transfer basis and also declares the value added tax registration number or sales Tax registration number or Central Tax registration number, as the case may, be in the said State. By comparing the data, the goods valued at Rs. 73.79 Crores were not declared and disclosed by the appellant in the VAT return of Delhi State. The declaration made by the appellant was, therefore, false and SAD benefit would not be available, more particular when during the course of investigation, the appellant failed to provide any documentary evidence to support his claim - There is nothing in the appeal which may controvert the findings recorded by the Principal Commissioner. Penalty - HELD THAT:- VAT was not paid on the imported goods valued at Rs. 73.79 Crores. This finding recorded by the Principal Commissioner is borne out from the records and there is nothing in the appeal which may controvert this finding. Conclusion - The Principal Commissioner s findings regarding the appellant s fraudulent practices and non-compliance with notification conditions were crucial in determining the denial of the SAD exemption. There is nothing in the appeal which may controvert the findings recorded by the Principal Commissioner. Appeal dismissed.

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• Securities / SEBI

• 2025 (2) TMI 426
  Validity of Circular dated 02.09.2022 advising the trading member to refund the penalty levied on account of short/non-collection of upfront margin to clients, if the same has been passed on to the clients after 11.10.2021 - HELD THAT:- In the present case, it is the selection of the date, that is, 11.10.2021, that is the subject matter of challenge, and I am unable to find any support from the material on record as to the reason or basis for such selection. Apart from the offending date itself, there are other conditions that would have to be satisfied, for the refund of the penalty. A perusal of GRC proceedings dated 31.03.2023 would reveal that the only reason why a portion of the relief sought for has been denied is the stipulation of the date as 11.10.2021 in Circular Ref.No.60/2022 dated 02.09.2022. The circumstance set out under question and answer 15 in Circular No.48/2021 dated 12.10.2021 is thus, inapplicable to the present case. Such a conclusion emanates from a reading of the order of the GRC where the TM is not seen to have argued that there were failure/default on the part of the petitioners to justify passing on of the penalty. Having considered the matter carefully, selection/stipulation of the date as 11.10.2021 has no basis whatsoever. Such a stipulation had led to discrimination between two groups of investors, those who have been passed on the burden of penalty prior to 11.10.2021 and those who have suffered the burden post 11.10.2021. Thus, those investors who satisfy all the conditions under the Circulars but have suffered the passing on the penalty prior to 11.10.2021 have been left remediless. The passing of the penalty for short-levy by the TM to the investor has been consistently decried by SEBI. In such circumstances imposition of a date after which only the penalty would be refunded has no justification whatsoever. This is contrary to Article 14 of the Constitution of India, affecting adversely one group out of two equally placed groups of investors. The investor has no control over the date on which penalty is levied. Hence, there is serious prejudice caused by virtue of a fact that is outside the control of an investor, in respect of financial transactions that are identical to transactions by other investors, though of an anterior date. In the present case, the satisfaction of the petitioner of the other conditions for refund constitute questions of fact and I extract below the findings of the GRC which are relevant and set the context for the grievance of the petitioner. To be noted that the GRC has passed the order after hearing both the petitioner and HDFC/TM. The GRC has made it clear that the petitioner is, in fact, entitled to the refund and has ordered refund to the extent to which the Circular does not stand in the way. The decision adverse to the petitioner relates to that part of the penalty on upfront margin relatable to the period prior to 11.10.2021 only. The stipulation relating to the date under Circular Ref.No.60/2022 dated 02.09.2022, is found to be arbitrary and is quashed. As a consequence, the prayer of the petitioner stands moulded to a challenge encompassing order passed by the GRC dated 31.03.2023 and such challenge is allowed and order dated 31.03.2023 set aside. The petitioner s application before the GRC restored to its file. The GRC shall issue notice to both the Petitioner as well as the TM/HDFC, hear them and decide the matter de novo. In doing so, the GRC shall not be circumscribed by the reference to the date 11.10.2021 , in Circular No.60/22 dated 02.09.2022.

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• Insolvency & Bankruptcy

• 2025 (2) TMI 425
  Jurisdiction of Adjudicating Authority to entertain the Application relting to refund of pre-CIRP dues - Adjudicating Authority had become quorum non-judice - extinguishment of claims of the Appellant for pre-CIRP dues, upon the approval of the Resolution Plan by the Adjudicating Authority - Estoppel from claiming a refund of the amount paid towards pre-CIRP dues. Jurisdiction of Adjudicating Authority to entertain the Application relting to refund of pre-CIRP dues - HELD THAT:- The approval of the Resolution Plan by the Adjudicating Authority dated 21.09.2021 and the claim which was filed by the Appellant in the CIRP. The correspondence entered between the Parties was in reference to the approval of the Resolution Plan and payment of the amount which was due to the Appellant as per the Resolution Plan with a prayer to resumption of supply. Section 60(5) clearly indicates that under Section 60(5)(c) any question arising out of or in relation to the Insolvency Resolution or Liquidation proceeding of the Corporate Debtor is covered by the said definition. On looking into the reliefs and the concessions granted by the Order dated 21.09.2021, and the letter given by the Corporate Debtor on 29.10.2021, offering to make payment under the Resolution Plan and seeking restoration of supply, the said request clearly fell within Section 60(5)(c) - The NCLT had jurisdiction to entertain the application filed by the Respondent No.1 concerning the refund of pre-CIRP dues and compliance with the Resolution Plan. Extinguishment of claims of the Appellant for pre-CIRP dues, upon the approval of the Resolution Plan by the Adjudicating Authority - HELD THAT:- The law is well settled that by approval of the Resolution Plan, all dues and claims of pre-CIRP stand extinguished. In the present case, the DVC has filed its claim in the CIRP of 2,32,13,387/- for which an amount of 4,64,003/- was allocated for the Resolution Plan. Judgment of this Tribunal relied by the Respondent in the matter of Damodar Valley Corporation Vs. Kharkia Steels Pvt. Ltd. Ors. [ 2022 (3) TMI 821 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ], as well as the Judgment of the Hon ble Supreme Court in Paschimanchal Vidyut Vitran Nigam Ltd. Vs. Raman Ispat Pvt. Ltd. Ors. [ 2023 (7) TMI 831 - SUPREME COURT ] as well as the Judgment of the Hon ble Supreme Court in Ghanshyam Mishra Sons Pvt. Ltd. [ 2021 (4) TMI 613 - SUPREME COURT ] clearly lays down that all claims after approval of the Plan stands extinguished. The claims of the Appellant for pre-CIRP dues were extinguished upon the approval of the Resolution Plan, and the Appellant was not entitled to claim any additional pre-CIRP dues. Estoppel from claiming a refund of the amount paid towards pre-CIRP dues - HELD THAT:- The correspondence entered between the Parties clearly indicates that Respondent No.1 has offered to make the payment which was due as per the Plan. However, the Respondent itself has asked the Appellant to give the details of the payment which are required to be paid. Vide letter dated 07.12.2021 in response to which communication dated 07.12.2021 was issued. The Appellant has sought for claims that were due before the CIRP period and during the CIRP period as well. No issue can be raised regarding any claim prior to CIRP period since, the claim said after approval of the Resolution Plan and payment of amount under the Plan to the Appellant stood extinguished. It is however relevant to notice that no bifurcation and details have been given as to what was the claim prior to CIRP period and what was the claim subsequent to the CIRP period as was communicated by the Appellant vide letter dated 07.12.2021. On the record, there are also no details to come to the conclusion that how much amount as communicated in letter dated 07.12.2021 was during the CIRP period and what was the amount prior to CIRP period. The Impugned Order passed by the Adjudicating Authority cannot be faulted insofar as is directed for refund of the amount which was claimed by the Appellant of pre-CIRP period. The Respondent No.1 was not estopped from claiming a refund of pre-CIRP dues, as the payments were made under duress to ensure the resumption of electricity supply. Conclusion - i) The NCLT had jurisdiction to entertain the application filed by the Respondent No.1 concerning the refund of pre-CIRP dues and compliance with the Resolution Plan. ii) The claims of the Appellant for pre-CIRP dues were extinguished upon the approval of the Resolution Plan, and the Appellant was not entitled to claim any additional pre-CIRP dues. iii) The Respondent No.1 was not estopped from claiming a refund of pre-CIRP dues, as the payments were made under duress to ensure the resumption of electricity supply. iv) The Appellant is not entitled for recovering any dues from the Respondent which relate to pre-CIRP period with regard to which claim was filed by the Appellant and was dealt in the Resolution Plan approved on 21.09.2021. Appeal disposed off.

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• PMLA

• 2025 (2) TMI 424
  Seeking grant of regular bail - Money Laundering - reasons to believe - compliance with the statutory requirements under Section 19 of the PMLA - it was held by High Court that This Court is not inclined to release the applicant on bail and the instant application, is, hereby, dismissed. HELD THAT:- There are no ground to interfere with the impugned order passed by the High Court. However, the petitioner is granted two days time to surrender. SLP dismissed.

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• 2025 (2) TMI 423
  Maintainability of proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) in the absence of a scheduled offence - applicant s arrest and subsequent detention - lack of necessary sanction and procedural irregularities - it was held by high Court that The prayer for bail made by the applicant under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 (BNSS) read with Section 45 of the PMLA, 2002 for the offences under Section 3 4 of the PMLA, 2002, deserves to be and is hereby rejected. HELD THAT:- There are no ground to interfere with the impugned order passed by the High Court. However, liberty is given to the petitioner to move the Trial Court, particularly taking note of the subsequent development. SLP disposed off.

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• 2025 (2) TMI 422
  Seeking grant of bail - Money Laundering - extortion of money by impersonating himself - twin conditions of Section 45 of PMLA, 2002 - it was held by High Court that Looking into the facts and circumstances of the case as well as nature and gravity of the offence, it is not inclined to release the applicant on bail. HELD THAT:- It is not required to interfere with the impugned order. SLP dismissed.

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• Service Tax

• 2025 (2) TMI 421
  Jurisdiction of Adjudicating Authority to substitute a new order in place of the original order - rectification of mistake - mistake apparent on the face of record or not - HELD THAT:- Under Section 74 of Finance Act concerned Officer can rectify his order if any mistake apparent from the record. Therefore, Adjudicating Authority only rectifies any mistake which is apparently shows. The Adjudicating Authority cannot do anything which is not permissible in law. Revenue relied on Hon ble Supreme Court judgment in the case of Deva Metal Powders Pvt Ltd., Vs Commissioner, Trade Tax, UP 2007 (12) TMI 221 - SUPREME COURT] in which Hon ble Supreme Court held that a mistake which can be rectified is one which is patent, which is obvious and whose discovery is not dependent on any argument or elaboration, rectification of an order does not mean obliteration of order originally passed and its substitution by a new order. Where an error is far from self-evident, it ceased to be an apparent error. In this case Adjudicating Authority by Order-in-Original No. 88/2022- 23-Adjn dated 25.05.2022 substituted a new order in place of Order-in- Appeal No. 78/2022-Adjn dated 22.03.2022 which is beyond his jurisdiction. Conclusion - The Adjudicating Authority exceeded its jurisdiction by substituting a new order in place of the original order, leading to the dismissal of the appeal. There are no illegality or irregularity in the Order-in-Original - Appeal dismissed.

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• 2025 (2) TMI 420
  Abatement claim - construction services - rejection of entire claim on the ground that the appellant had provided only completion and finishing service and not construction of commercial complex service - rejection of a part of the claim as being barred by limitation - burden pf prove - principles of unjust enrichment - HELD THAT:- The Hon ble Supreme Court in Smt. J. Yashoda vs Smt. K. Shobha Rani [ 2007 (4) TMI 11 - SUPREME COURT] , held that the rule which is the most universal, is that the best evidence which the nature of the case will admit shall be produced. So long as the higher or superior evidence is within a persons possession or may be reached by him, he shall give no inferior proof in relation to it. In the present case the Original Authority has at para 12.4 of the OIO, stated that the appellant had not furnished contract copies in spite of repeated reminders. No copies of the contract stated to have been submitted to the Original Authority and First Appellate Authority (if any), is seen filed along with the Appeal Memorandum. It is not required to examine the matter independently and disturb the findings of the Lower Authorities. The ends of justice would be met by remanding the matter to the Original Authority and facilitating the appellant from furnishing the requisite contract copies so that the issue of classification can be examined in its proper perspective and a decision arrived at. Rejection of a part of the claim as being barred by limitation - HELD THAT:- The appellant has stated that the excess amounts were paid by mistake and could not be termed as duty/ service tax and hence, the same would be outside the purview of Section 11B of the Act. It is the appellants opinion that the department has no authority to retain such amount and therefore they are entitled for the refund of the said amount. Revenue has contested this plea citing the judgment in Mafatlal Industries Ltd. [ 1996 (12) TMI 50 - SUPREME COURT] - Hence as per the law declared by the Hon ble Supreme Court the right which accrues in favour of the appellant to claim the refund is under section 11B of the Central Excise Act 1944 and therefore, the limitation prescribed under the section would apply. Burden pf prove - principles of unjust enrichment - HELD THAT:- As per the judgement even in the case of an illegal levy or a levy which is unconstitutional, the right of refund is not automatic. The burden of proof lies on the claimant to establish that it would not cause unjust enrichment. Conclusion - The impugned order is set aside and the matter remanded for fresh adjudication, emphasizing the principles of natural justice and the need for a thorough review of the evidence. Appeal allowed by way of remand.

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• 2025 (2) TMI 419
  Non-reversal of CENVAT Credit attributable to exempted services - classification and taxability of services under Business Support Service and Business Auxiliary Service - demand under Health Care Service as a Pure Agent - applicability of Service Tax on Renting of Immovable Property and under Health Care Service for amounts received from corporates - demand under Import of Service without specific classification in the Show Cause Notice (SCN) - Invocation of extended period under Section 73(1) of the Act. Demand of Rs.1,00,76,186 on account of Cenvat Taken - Non-reversal of CENVAT Credit attributable to exempted services - HELD THAT:- The facts of the case show that the Modvat credit taken on the inputs was reversed by the petitioner. Since the reversal of Modvat credit has been done by the petitioner hence in our opinion it has to be treated that no credit was taken by the petitioner on the inputs, namely PVC granules used in the manufacture of PVC/PP bottles as contemplated under the Notification No. 15/94-C.E., dated 1-3-1994. There is no dispute that the appellant has reversed the entire credit of Rs.25,02,361/- taken on exempted output services along with interest of Rs.6,71,531 in September 2013, after the Show Cause Notice was issued. These details have been certified by the Chartered Accountant and they are not being disputed by the Revenue - the confirmed demand of Rs. Rs.1,00,76,186/-, is legally not sustainable. Demand of Rs.42,94,470/- under business support service - Classification and taxability of services under Business Support Service and Business Auxiliary Service - HELD THAT:- It is not found that the appellant, apart from making available the above space has provided any other infrastructure facilities to the client. In fact, it is clear from the Agreement that all such infrastructure facilities will have to be created by the client with their own cost. It is more akin to letting out the space on rent to the client for which the consideration is arrived @ 18% of the sale proceeds of the medicines. Therefore, on factual matrix there are no justification to classify the service as Business Support Service , the classification under which the present demand has been made and confirmed - the demand of Rs.42,94,470/- made under business support service set aside. Demand of Rs.8,87,242/- under business auxiliary service - HELD THAT:- The collection of blood samples prima facie does not fall under any of the above seven categories. Further, in the show cause notice, the department has nowhere specified under which clause of the definition of Business Auxiliary Service the liability shall be fastened on the Appellant. It is well settled that to bring any activity under the definition of Business Auxiliary Service for levy of tax, it is to be clearly mentioned in the show cause notice under which clause of the definition shall apply to fasten that service under the classification of Business Auxiliary Service - demand set aside. Demand of Rs.19,69,383/- under health care service as pure agent - HELD THAT:- On going through the copy of the ST 3 enclosed, it is found that indeed it is an inadvertent error on their part because of which they have shown an amount of Rs.1,91,20,228/- under Sl.3F(l)(iii) instead of at S.No. 3F(l)(ii), wherein it should have been shown, since this amount was received on account of diagnostic and treatment provided to admitted inpatients which is an exempted service - the demand of Rs.19,69,383 set aside. Demand of Rs.1,95,934/- under renting of immovable property service - HELD THAT:- On going through the challans and calculation sheet provided by the appellant at page Nos.367 to 389 and find the appellant s claims to be correct. Since, the Revenue has not adduced any evidence to the effect that the appellants have charged and recovered the Service Tax from their tenants, it is held that they are entitled for cum-tax benefit in terms of Section 67(2) of the Finance Act 1994 - the demand is required to be re-quantified as Rs.1,67,181 and not at Rs.1,95,934/- as calculated by the Revenue. Demand of Rs.4,73,252/- under health care service in respect of sundry debtors - HELD THAT:- The appellant shows by way of documentary evidence, along with the Chartered Accountant s Certification, that as and when the amounts were realized from the debtors, the same have been properly accounted for and Service Tax has been paid. The Appellant submits that during the material period, service tax was payable on collection basis and not on the invoice basis - the confirmed demand of Rs.4,73,252/- on the unrealised sundry debtors set aside. Demand of Rs.3,28,957/- under health care service in respect of amount received from corporates for treatment of their employees - HELD THAT:- If the payment is made towards health checkup and preventive care, then such service would become taxable under the category health service . In the present case, it is found that the amount being paid by the corporates is not account of such services, but is on account of in-patient hospitalization charges, which is being paid by the corporates to the appellant - demand set aside. Demand of Rs.1,03,133/- under Section 66A of the Act - HELD THAT:- The SCN proposed to levy service tax under Section 66A without mentioning any specific classification whatsoever. However, on production of the documentary evidences along with the reply to the SCN, the Adjudcating authority dropped a portion of the demand and confirmed the demand on Rs.7,27,129/- and Rs.1,38,583/- as expenditure incurred in foreign currency for the years 2008-09 and 2010-11. On such payments, he has confirmed the demand of Rs.1,03,133/- under three taxable classifications namely Business Support Service , Commercial Coaching Centre and Tutorial Service and Scientific or Technical Consultancy Service knowing fully that the demand proposed in the impugned show cause notice without mentioning any taxable service under which the demand was proposed - Since the appellant was not put to notice about the sub-classification of the import of service in the Show Cause Notice, the confirmed demand of Rs.1,03,133/- set aside. Time limitation - HELD THAT:- In this case, the appellant has reversed the cenvat taken along with interest and the decision are in their favour. Further all the cenvat credit taken whether for the exempted services or for the taxable services, have been recorded by them in their books of account. All these make it clear that the Dept has not brought in any evidence to the effect that the appellant was indulging in suppression with an intent to evade Service Tax payment. Similarly in case of import of service, even if the same payable, which is not in the present case, the same would be available as Cenvat Credit to the appellant. Hence, there would not be any motive to suppress. The entry of Rs.19 lacs is on account of their clerical mistake while filing the ST3 Returns. In respect of Renting of immovable property services, due to the confusion prevailing at that time, they have neither collected the Service Tax nor paid the same. Subsequently on getting clarification, they have paid the Service Tax along with interest. Thus if all the facts are considered together, we find that the Revenue has not made out any case of suppression, and the non-payment / short payment, if any has been purely on account of interpretational difficulties. The appellant has also shown their bonafides by making the payment of Service Tax, wherever payable, along with interest. Therefore, the confirmed demand for the extended period is legally not sustainable. Conclusion - All the demands are set aside. The Appeal succeeds on merits and on account of time-bar. Appeal allowed.

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• 2025 (2) TMI 418
  Valuation of service tax - inclusion of reimbursable expenses in the taxable value of services under Section 67 of the Finance Act, 1994, and Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 - Pure Agent under Rule 5(2) of the Valuation Rules - extended period of limitation - HELD THAT:- The issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [ 2018 (3) TMI 357 - SUPREME COURT] which has considered the issue of liability to pay service tax on reimbursable expenses received by the service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. VERSUS UOI. ANR. [ 2012 (12) TMI 150 - DELHI HIGH COURT] , wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. The impugned order in appeal and order in original are set aside - Appeal allowed.

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• 2025 (2) TMI 417
  Valuation of service tax - inclusion of expenses incurred by the appellant, a Customs House Agent (CHA), and reimbursed by client in the assessable value - Pure Agent under Rule 5(2) of the Valuation Rules - extended period of limitation - HELD THAT:- The issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, [ 2018 (3) TMI 357 - SUPREME COURT] which has considered the issue of liability to pay service tax on reimbursable expenses received by the service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. VERSUS UOI. ANR. [ 2012 (12) TMI 150 - DELHI HIGH COURT] , wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. Conclusion - The reimbursed expenses are not part of the taxable value for service tax purposes, aligning with the Supreme Court s interpretation of Section 67. The impugned order in appeal upholding the impugned order in original cannot sustain - Appeal allowed.

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• Central Excise

• 2025 (2) TMI 416
  Clandestine removal - appellant has consumed electricity in excess than the production what has been accounted - suppression of total manufactured quantity - demand raised by the Revenue for the period December 2012 to September 2013 - HELD THAT:- The Department has been issuing periodical notices on the appellant based on the same allegation that the electrical consumption shows that the appellant should have manufactured more ingots. All the proceedings are on the basis of Dr. Batra s Report on output ratio based on electrical consumption. The earlier eight Show Cause Notices are for the period 2002-03 to 2010. All the Show Cause Notices were initially decided by the adjudicating authority against the party and the demands were confirmed. The appellants had filed their appeal before the Tribunal. Conclusion - The allegations of suppressing manufacture were not substantiated, as the reliance on Dr. Batra s report was deemed unreliable based on previous precedents. The Tribunal had remanded the matter to the adjudicating authority to go through all the documentary evidence placed before him and to pass a considered decision - Appeal allowed.

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• 2025 (2) TMI 415
  CENVAT Credit - whether the appellant has received MS ingots? - HELD THAT:- It is understood from the ruling by Hon ble Allahabad High Court in the case of CCE vs. Juhi Alloys Ltd. [ 2014 (1) TMI 1475 - ALLAHABAD HIGH COURT] that the manufacturer has to take reasonable steps to ensure that the goods received by it are duty paid. The copies of certain invoices submitted by the appellant on 16.01.2025 indicate the central excise duty paid nature of the inputs and all the entries required in an invoice issued by first stage dealer are entered in the same. The appellant had taken required care in respect of receipt of inputs from M/s. Shreyas Enterprises. Therefore, in view of the ruling by Hon ble Allahabad High Court, the appellant is entitled for cenvat credit disputed in the proceedings. The impugned order set aside - appeal allowed.

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• Indian Laws

• 2025 (2) TMI 414
  Joint and several liability to repay debit balance in the bank account - Whether respondent no. 1, who is the husband of respondent no. 2, could have been made a party to the arbitration that was invoked by the appellant, who is a registered stock broker, and held to be jointly and severally liable for the debit balance that had accrued in the wife s (respondent no. 2 s) account with the appellant?. Perversity of the finding of joint and several liability - HELD THAT:- Applying the test for perversity under Section 34, it is clear that the High Court, while exercising jurisdiction under Section 37, adopted an incorrect approach. The arbitral tribunal s findings are definitely based on evidence, as has been rightly held by the Section 34 court. The High Court, at the stage of the Section 37 appeal, took an alternative view on this finding of fact by reappreciating evidence. The arbitral tribunal s conclusion was based on oral and documentary evidence regarding the conduct of the parties, which leads to a reasonable and possible view that there is joint and several liability. Hence, the High Court, while exercising jurisdiction under Section 37, has incorrectly held the award to be perverse. Patent illegality - HELD THAT:- The High Court held that despite noting the need for a client s express authorisation for adjustment of accounts, the arbitral tribunal approved an illegal transfer of the credit balance from respondent no. 1 s account to that of respondent no. 2. On going through the arbitral award, the finding of the arbitral tribunal is based on past experience meaning the conduct of respondent no. 1 all along acting on behalf of respondent no. 2, joint and several liability, and the respondents marital relationship. Bye-law 247A provides that a broker shall not withdraw money from a client s account other than money required for payment on behalf of the client, for payment of debt due to the broker from the client, or money in respect of which there is a liability of the client to the broker. Once the arbitral tribunal arrived at a finding that respondent no. 1 is jointly and severally liable for the debit balance in respondent no. 2 s account, which we have upheld above, Bye-law 247A in fact permits the withdrawal of the credit balance from respondent no. 1 s account. Therefore, the adjustment of accounts on 05.03.2001 is legal and valid. Although the arbitral tribunal has held that written authorisation for such adjustment is required, we find nothing in Bye-law 247A or in the SEBI Guidelines, on which this Bye-law is based, that mandates the same. Conclusion - The arbitral tribunal had jurisdiction over respondent no. 1, and the High Court erred in setting aside the arbitral award. The arbitral award was upheld in its entirety, holding both respondents jointly and severally liable for the debit balance in respondent no. 2 s account. Appeal allowed.

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• 2025 (2) TMI 413
  Insurance claim - valid permit or not - absence of non-depositing of authorization fee - HELD THAT:- This Court has carefully gone through the permit which is on record and the National Permit is certainly valid up to 13.10.2017. The authorization fee was required to be paid only when the truck was moving out of State of Bihar as it was registered in the State of Bihar and the truck caught fire on account of short-circuit on 08.06.2014 in the State of Bihar itself and, therefore, the respondent company could not have repudiated the claim on such a frivolous ground. The permit in question was issued by the competent authority in Bihar and, therefore, there was no requirement of paying authorization fee when the truck was being used in the State of Bihar and as per the terms and conditions of the National Permit, authorization fee was required to be paid only when the truck was moving out of State of Bihar. Thus, in the considered opinion of this Court, the appellant was certainly entitled for the insurance claim as held by the State Commission and, therefore, the order passed by the National Commission, dated 19.08.2020, deserves to be set aside and is accordingly set aside. Appeal allowed.

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• 2025 (2) TMI 412
  Dishonour of cheque - death of accused during pendency of the Revisional application preferred against conviction and sentence of compensation would be abated automatically or not - compensation and fine are similar and the said amount as imposed by the Court is to be recoverable from the estate of the deceased - HELD THAT:- There is no definition of fine stipulated in the CrPC but there is a provision to allow fine while convicting the accused person in view of the Indian Penal Code. Even no compensation is defined either in CrPC or IPC. The present proceeding is initiated under Sections 138/141 of the Negotiable Instruments Act, 1881 and whenever a person is convicted under the said sections, there is a provision to sentence of imprisonment as well as fine but, in the present case, both the Learned Courts below awarded compensation to be paid by the accused to the complainant to the tune of Rs. 12 Lakhs. Actually, compensation is granted to address the suffering caused by any loss or injury resulting from an act for which the accused has been sentenced. While it establishes criminal liability, the compensation awarded to the victim is treated similarly to what could be granted in a civil suit. As for accused herein, no fine was imposed on him; instead, he was directed to pay compensation. In the light of the provisions contained in Sections 421 of the Code of Criminal Procedure, 1973, fine amount as imposed by the Court, is to be recovered by sale and auction of the property of the accused; whereas as per Section 431 of the Code of Criminal Procedure, 1973, even amount of compensation can be recovered as if it was a fine. In the instant case, compensation was directed to be paid by the accused persons. Therefore, as per both sections 421 and 431 of the Code of Criminal Procedure, 1973, amount is to be recovered by way of auction and sale of the property of the late accused/petitioner no. 3, namely, Goutam Gupta. The legal heirs and representatives of the deceased did not prefer any application for substitution themselves as the petitioners in place of deceased Goutam Gupta. Therefore, the present Opposite Party No. 2 filed an application for substitution of legal heirs and representatives of the deceased Goutam Gupta. Therefore, the case of the petitioners would not abate for the death of petitioner no. 3 (since deceased), namely, Goutam Gupta as the sentence includes the compensation. Conclusion - i) The case would not abate for the death of the petitioner. ii) The registry is directed to take necessary steps to substitute the legal heirs and representatives in the Revisional application. Application allowed.

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